Against the backdrop of slowing growth in the global TV market, TCL ELECTRONICS (01070) has achieved counter-cyclical growth, delivering satisfactory results for investors through its mid-to-high-end product strategy and innovative business layout. Financial results show that in the first half of 2025, TCL ELECTRONICS achieved revenue of HK$54.78 billion, up 20.4% year-on-year, with adjusted net profit attributable to shareholders surging 62.0% to HK$1.06 billion. Overall expense ratio decreased by 1 percentage point year-on-year to 11.5%, while cash and cash equivalents grew 30.4% year-on-year to HK$11.44 billion.

More noteworthy than the figures themselves is how TCL ELECTRONICS achieved "revenue growth with even greater profit growth." The answer may lie in the synergy of the company's three growth curves: "Display + Internet + Innovation."

**"Mid-to-High-End + Globalization" Strategy Shows Significant Results, TV Business Gross Margin Substantially Improves**

As TCL ELECTRONICS' flagship business, the TV segment not only maintained high growth momentum in H1 2025 but also consolidated its global market position amid industry competitive landscape reshuffling. According to TrendForce data, Samsung remained first in H1 2025 market share, but its share declined from 18.2% in the same period last year to 17.9%. TCL ELECTRONICS led peers with 12.5% shipment growth and maintained second place with 15.2% market share, up 1.4 percentage points from last year's 13.8%. Hisense and LG Electronics ranked third and fourth respectively, with CR4 concentration reaching 59.8%, further intensifying the "Matthew effect" among leading brands.

Meanwhile, second-tier brands and white-label manufacturers accelerated their exit under dual cost pressures from large screen sizes and Mini LED technology. Traditional LCD small-to-medium size production lines were forced to switch to monitor production or shut down, pushing industry consolidation into deeper waters.

Omdia data shows that Mini LED was the fastest-growing TV technology by shipment volume in 2025, up 82.9% year-on-year, while large-screen 90-inch and above segments grew 57.4% year-on-year. On the acknowledged track of "large screen + Mini LED," TCL's first-mover advantage was rapidly amplified. Data shows that TCL's Mini LED TV shipments in H1 surged 176.1% year-on-year to 1.37 million units, capturing 28.7% market share and firmly securing TCL's position as the global leader in Mini LED TV shipments.

The profit side equally validates the effectiveness of premiumization. In H1, TCL ELECTRONICS' TV business revenue reached HK$28.35 billion, up 9.4% year-on-year. Global average selling price exceeded HK$2,100, up 1.7% year-on-year, and TV business gross margin improved 0.5 percentage points year-on-year to 15.9%.

By region, competition in the Chinese market has shifted from "volume growth" to "quality improvement." In H1, TCL ELECTRONICS achieved domestic market revenue of HK$8.72 billion, up 4.4% year-on-year, with gross margin improving 1.7 percentage points year-on-year to 19.4%. The margin improvement mainly relied on brand upgrading and technological innovation. In H1 2025, TCL TV shipments in China grew 3.5% year-on-year, with mid-to-high-end TCL brand TV shipments growing 10.2% year-on-year, ranking among the top two in retail volume. According to CMM all-channel data, TCL and Thunderbird brand TV retail value market share increased 1.3 percentage points to 23.5% in H1 2025.

In North America, TCL ELECTRONICS leveraged sports marketing to deeply integrate the TCL brand with local culture, actively enhancing brand influence. In H1 2025, TCL TV retail volume market share remained among the top two in the US market. Notably, TCL Mini LED TV shipments in North America surged 349.6% year-on-year, with shipment proportion increasing 6.0 percentage points year-on-year. TCL TV average selling price in North America jumped 12.6% year-on-year, with profitability improvements from product mix optimization particularly evident.

In Europe, TCL ELECTRONICS achieved breakthroughs in key channels in countries like the UK and Germany through "one country, one strategy" precise regional channel network deployment, with scale continuing to expand. In H1, TCL brand TV Europe shipments grew 13.3% year-on-year. Large-screen product sales further improved, with 65-inch and above TCL TV shipments up 29.6% year-on-year, and TCL Mini LED TV shipments surging 91.0% year-on-year. TCL TV retail volume ranking remained among the top two in France and Poland, and top three in Sweden, Spain, Greece, and Czech Republic.

Emerging markets also performed well, with TCL TV shipments up 17.9% year-on-year in H1, including 65-inch and above TCL TV shipments growing 45.8% year-on-year. TCL TV ranked first in retail volume in Philippines, Australia, Saudi Arabia, Argentina, and Pakistan, top two in Brazil, Thailand, and Myanmar, and third in Vietnam and South Korea.

A key factor in TCL ELECTRONICS' outstanding global market performance is its global manufacturing network, which provides a "moat" for navigating trade frictions amid global trade tensions. The company has established production bases in Vietnam, Mexico, Brazil, Poland, and Pakistan, with total annual production capacity exceeding 30 million units, enabling flexible global market supply.

**Internet Business Shows High Growth Overseas, Innovative Businesses Become Important Revenue Growth Contributors**

As an important component of TCL ELECTRONICS' ecosystem development, the Internet business also demonstrated high profitability characteristics in H1. Financial results show that in H1 2025, TCL ELECTRONICS' global Internet business revenue reached HK$1.46 billion, up 20.3% year-on-year. More notably, its gross margin reached 54.4%, further improving 0.5 percentage points year-on-year, with significantly enhanced monetization capabilities.

The improvement in monetization capabilities mainly benefited from continuous breakthroughs in the company's overseas Internet business model, with substantial improvements in content development, product experience, and commercialization capabilities. Specifically, in international markets, TCL ELECTRONICS continued to deepen close cooperation with Internet giants like Google, Roku, and Netflix, driving continuous innovation in overseas business models. Benefiting from comprehensive upgrades to TCL Channel, content distribution efficiency significantly improved while creating first-class FAST and AVOD experiences. Additionally, TCL ELECTRONICS continued to deepen localized content operations in countries like the US, Brazil, France, and Spain, with premium content proportion substantially increasing and average consumption time for proprietary content products doubling.

As of June 30, 2025, TCL Channel had comprehensively covered global overseas markets, with cumulative users exceeding 39.3 million, effectively driving steady growth in international market Internet business.

Meanwhile, TCL ELECTRONICS' innovative business revenue surged 42.4% year-on-year to HK$19.88 billion, with revenue proportion increasing from 30.7% to 36.3%, demonstrating strong development momentum. Among these, the solar business was most outstanding. In H1, solar business revenue reached HK$11.14 billion, up 111.3% year-on-year, with gross profit of HK$1.07 billion, up 98.5% year-on-year.

In recent years, China's distributed solar development has been rapid. In H1 2025, domestic solar new installations reached 212.21GW, up 107% year-on-year. Among these, residential solar added 25.63GW, up 135.43% year-on-year, and industrial and commercial distributed solar added 87.18GW, up 61.7% year-on-year. From 2019 to 2024, China's distributed solar new installation CAGR was 57.95%, with distributed solar cumulative installation proportion rising from 31% to 42%, becoming the main driver of solar industry growth.

Despite the impressive growth in distributed solar, industry competition is fierce, making success in this "red ocean" market challenging. In this context, TCL ELECTRONICS focused on ecological cooperation quality improvement, adopting "bidirectional empowerment + refined operation" strategies to enhance channel stickiness, strengthen core capability development, and build platform service capabilities. Leveraging over 20 years of channel accumulation in home appliances business, it effectively supported extensive residential market reach, cumulatively expanding channel dealers to 2,380, establishing differentiated competitive barriers.

This transformation drove channel cooperation extension from price dimension to comprehensive service dimension, achieving strategic transformation from scale expansion to value cultivation. As new energy generation costs continue declining and installation proportion keeps rising, conditions for distributed solar full participation in electricity market trading are increasingly mature.

In February 2025, the "Notice on Deepening Market-oriented Reform of New Energy Grid-connected Electricity Prices to Promote High-Quality New Energy Development" (Document No. 136) was officially released, marking the end of the new energy "fixed electricity price" era and full entry into the new stage of electricity price marketization. Under the new policy, grid companies no longer provide bottom-line support, reshaping revenue models. New energy generation enterprises must directly face market supply and demand fluctuations, creating "dual uncertainty in volume and price."

To address short-term electricity price volatility and long-term asset operation risks, TCL ELECTRONICS established deep cooperation with capital parties with electricity market trading capabilities (such as provincial electricity sales companies and local energy investment companies) under the principle of "risk sharing, benefit sharing," enhancing asset safety buffers, effectively controlling risk exposure, improving asset operation efficiency, and jointly promoting innovation and implementation of green finance solutions, significantly improving project economic feasibility and investment stability.

As of the end of June, TCL ELECTRONICS had cumulatively signed contracts with 280,000 rural households, corresponding to approximately 2.1GW installation scale (estimated at 7.5kW per household), equivalent to a medium-sized ground station. The company locked in rooftop resources for 20-year operation rights through long-term agreements, initially building an "aggregator" resource pool based on distributed rooftop solar.

This move drove TCL ELECTRONICS' strategic transformation from single equipment sales to "smart energy solution service provider," upgrading the business model from relying on "manufacturing margins" to a dual-wheel drive model of "electricity revenue sharing + operation service fees." Against the current industry background where solar module profits are gradually approaching cash costs, this model significantly enhanced business sustainable profitability and risk resistance.

At the critical inflection point where distributed solar shifts from "subsidy-driven" to "market-driven," TCL ELECTRONICS adopted a trinity approach of "channel cultivation + financial risk control + asset operation," anchoring the strategic positioning of "comprehensive energy service provider," pre-locking quality rooftop resources, reducing channel loss, and hedging electricity price volatility, thereby maintaining ROE and cash flow stability above industry average amid accelerated industry clearance.

As distributed solar develops in depth and digital intelligence applications continue expanding, TCL ELECTRONICS continuously upgrades service strategies based on market demands, constantly expanding business, service, and ecosystem boundaries, building relative competitiveness, and achieving high-quality development amid industry transformation.

Against the backdrop of overall consumer electronics demand slowdown and traditional mobile phone/TV growth peaking, AR/XR and AI robot tracks with high growth prospects are becoming the "golden intersection" for brand breakthroughs. According to latest data from RUNTO, in H1 2025, China's consumer XR device market (covering VR/MR and AR) all-channel retail volume reached 307,000 units, up 17.6% year-on-year, with retail value of RMB 990 million, up 21.1% year-on-year.

The AI companion robot track is viewed by Grand View Research as the "next hundred-billion blue ocean," with 2024 market size reaching $28.2 billion, expected CAGR of 30.8% from 2025-2030, and projected to exceed $107.9 billion in 2030. The combination of these two tracks is reshaping the new business closed loop of "hardware + content + scenarios."

TCL ELECTRONICS positioned early through its Thunderbird Innovation subsidiary. During 2025 618 period, Thunderbird glasses domestic sales market share soared to 52%, reaching 3.4 times the same period last year, consecutively winning JD.com and Tmall XR category sales championships. New products like Air 3s Pro, V3 Slim, and X3 Pro AI, with three differentiated selling points of "lightweight private cinema," "AI shooting," and "full-color AR+AI integration," precisely targeted three incremental scenarios: "movie watching, short videos, and mobile office."

Meanwhile, Thunderbird Innovation reached strategic cooperation with Ant Group, enabling users to complete QR code ordering, cross-border tax refunds, and digital RMB payments in AR glasses, further opening high-frequency essential entrances for local life and outbound travel.

In AI+IoT+robot integration direction, TCL ELECTRONICS unveiled the world's first split-type smart home companion robot TCL AiMe at CES earlier this year. This product integrates AI large models, whole-house IoT gateways, and emotional interaction terminals into a movable base, capable of controlling smart home appliances with natural language while providing dual value of "home butler + emotional companionship" through facial recognition and emotion algorithms.

Industry analysts noted that AiMe's "split" design cleverly solves coverage blind spots of traditional fixed speakers/screens while making the robot a "mobile control center" in the living room, providing a physical entrance for TCL to connect "TV-refrigerator-air conditioner-lighting" full-scenario data flow.

From a business model perspective, TCL ELECTRONICS has established a virtuous cycle of "hardware continuous profitability + software increased stickiness" in smart applications. In robotics, it leverages "hardware entrances" to capture future 5-year home data and value-added services. The combination of two high-growth tracks not only hedges cyclical fluctuations in traditional TV business but also allows TCL to continue occupying dual commanding heights of user living room and portable scenarios in the "AI + scenario" era.

**Conclusion**

Amid current global consumer electronics demand differentiation and accelerated technological iteration, TCL ELECTRONICS proved with an interim report that traditional hardware manufacturers can completely traverse cycles and continuously achieve high profit growth as long as they can consistently align with technology, channel, and ecosystem rhythms.

The 2025 interim report shows TCL delivering a "high-score report card" to the market, demonstrating it is no longer the TV manufacturer in people's impressions but has transformed into a "multi-habitat technology fleet" driven by AI engines, empowered by green energy, and breaking circles through smart wearables, sailing simultaneously on multiple trillion-scale tracks.

Regarding TCL ELECTRONICS' positive financial report, securities firms have expressed optimism and raised target prices. Huatai Securities and Hua An Securities gave "Buy" ratings, CICC gave "Outperform" rating, and Galaxy Securities gave "Recommend" rating.

More remarkably, based on the closing price on September 1, TCL ELECTRONICS' rolling P/E ratio (PETTM) is only 11.5x, not fully reflecting its true market value. Over the past 5 years, the company's dividend growth reached 9.96%, with the latest year dividend yield at 5.01%, representing a rare "high growth + high dividend" target in the Hong Kong stock market.

With low valuation, high dividends, and continuously delivered operating cash flow, TCL ELECTRONICS' long-term shareholder friendliness is evident, with significant long-term allocation value.