Orient Securities: Domestic Black Appliance Leaders Expected to Increase Domestic Market Share, AI Interconnection and RGB Backlighting Reshape the Industry

Orient Securities has released a research report stating that Samsung's exit will benefit domestic black appliance leaders, potentially capturing 300,000 units of TV sales. The competitive advantage of leading domestic brands is significant, and the firm expects their domestic market share to continue rising. TCL ELECTRONICS (01070) and Hisense Visual (600060.SH) have already established cooperation with Google. Brands with overseas Google TV ecosystem adaptation capabilities are more likely to gain a first-mover advantage in the competition for AI TV and smart home entry points. Currently, high-end televisions are developing along two parallel upgrade paths. One path is the RGB backlighting route, exemplified by Sony and Hisense. The other is the route prioritizing light control precision and brightness, represented by TCL's SQD-Mini LED. Which path ultimately prevails in the high-end market will depend on the picture quality experience and the speed of cost reduction. The main views of Orient Securities are as follows.

Samsung's exit from the Chinese home appliance market is expected to boost the domestic market share of TCL and Hisense Visual. On May 6th, Samsung officially announced a complete withdrawal from the Chinese home appliance market, retaining only its mobile phone, memory chip businesses, and after-sales service for home appliances. According to AVC cumulative data through March, Samsung's combined online and offline sales market share for color TVs and refrigerators was 2.28% and 0.45% respectively, ranking 11th and 20th. Other product categories did not make the top 20. The firm estimates this exit will benefit domestic black appliance leaders by allowing them to capture 300,000 units of TV sales. Following Sony's cooperation with TCL and Panasonic's with Skyworth, Samsung's withdrawal signals that local brands have achieved comprehensive superiority. The competitiveness of local brands has upgraded from cost-driven to a dual-drive of "technology + brand." Pricing power in the global high-end market is beginning to loosen. The firm expects this signal to be further perceived by consumers, accelerating the global premiumization of local brands. According to RUNTO data, in the first quarter of 2026, the top eight domestic mainstream TV brands and their sub-brands in China shipped approximately 7.68 million units, accounting for 95.2% of the total market. Among them, Hisense, TCL, Skyworth, and Xiaomi shipped about 6.32 million units combined, holding a 78.3% share. In the same period, foreign brands like Samsung, Sony, Philips, and Sharp shipped a total of about 200,000 units, with a share of less than 3%. The competitive advantage of leading domestic brands is significant, and the firm expects their domestic market share to continue increasing.

Google I/O reinforces AI multi-terminal entry points, with smart home interconnection and AI hardware competition entering an ecosystem phase. On May 19th, Google held its I/O Developer Conference, focusing on advancing the AI ecosystem with Gemini. AI capabilities are extending from software entry points like Search, Chrome, and Android to hardware terminals such as Android XR smart glasses, Google TV, and Nest smart home devices. AI smart glasses, developed in collaboration with Gentle Monster and Warby Parker, support navigation, messaging, and photography, allowing users to complete certain interactions without taking out their phones. Simultaneously, Google launched the Google Home Gemini built-in project, aiming to provide a standardized, one-stop solution to help hardware manufacturers quickly develop and launch smart home products natively compatible with Gemini, achieving interconnectivity and enhancing the whole-home smart experience. TCL ELECTRONICS and Hisense Visual have already taken the lead in cooperating with Google. Brands with overseas Google TV ecosystem adaptation capabilities are more likely to gain a first-mover advantage in the competition for AI TV and smart home entry points.

Intensive launches of RGB Mini LED signal intensifying competition in picture quality. Leading brands like Sony, Hisense, and TCL are intensively launching new products centered on high-end display technologies. Industry competition is shifting from the brightness and number of dimming zones of the traditional Mini LED era to color purity and picture quality algorithm capabilities. Sony completed the world's first public picture quality demonstration of its true-color RGB TV at AWE 2026. This technology is based on over two decades of RGB backlighting R&D, enhancing real color reproduction through tri-color control and backlight algorithm optimization. Although Sony cooperates with TCL on TV business, it retains product definition authority and maintains independent operations. TCL focuses on production, operations, and marketing, concentrating on cost reduction and efficiency improvement. Hisense's RGB Mini LED TVs have entered mass production and scaling. According to AVC data, the average monthly sales of domestic RGB Mini LED TVs in Q1 2026 reached 329% of the average monthly sales after March 2025. Hisense Visual held a 79.4% sales share, occupying 7 of the top 10 spots in single-product sales rankings. The firm believes two parallel upgrade paths are forming in the high-end TV market: one is the RGB backlighting route represented by Sony and Hisense, focusing on tri-color light emission, color purity, and picture quality algorithms; the other is the route prioritizing light control precision and brightness, represented by TCL's SQD-Mini LED. These two technological paths correspond to different supply chains and business models. The RGB route relies more on chips and light control algorithms, while the SQD route depends more on panel and LED bead scale. Which path ultimately prevails in the high-end market will still depend on the picture quality experience and the speed of cost reduction.

Investment Recommendations and Targets: 1) The premiumization of TVs continues to advance, benefiting leading companies. Related TV set manufacturers: Hisense Visual (Overweight). The RGB Mini LED industry chain is accelerating development, with the picture quality chip industry chain expected to benefit. Related companies: Zhaochi Co., Ltd. (002429.SZ, Not Rated), Ganzhao Optoelectronics (300102.SZ, Not Rated). 2) Smart home overseas expansion may be catalyzed by Google's AI initiatives, with related ecosystem foundational software companies expected to benefit.

Risk Warnings: Uncertainty regarding the continuity of trade-in subsidy policies, recurring tariff disruptions, and intensifying industry competition.