Haitong International has released a research report reiterating an "Outperform" rating for TCL ELECTRONICS (01070) with a corresponding target price of HK$15.60. The company continues to refine its global operational structure, with an equity incentive plan clearly outlining growth targets, while the collaboration with Sony aids in the steady advancement of its globalization strategy. Regarding its core business, the company is deeply cultivating high-end display technologies and maintaining high-quality expansion in the global market. Its Mini LED products are effectively driving overall scale expansion while optimizing the company's product mix, enhancing overall profitability, and leading to outstanding performance in both revenue and profit. Key points from Haitong International's report are as follows: The company issued a 2025 profit growth forecast, anticipating adjusted net profit attributable to shareholders to reach HK$2.33 billion to HK$2.57 billion, representing a year-on-year increase of 45% to 60% compared to 2024. Throughout 2025, the company has consistently adhered to its globalization and mid-to-high-end development strategy, achieving excellent global business growth and continuous improvement in profitability. This is underpinned by its leading market position in large-size display business, the maintenance of high profitability in its internet business, and the ongoing expansion of its innovative business scale. The company is also actively exploring new AI application scenarios and strengthening its layout in cutting-edge technologies. TCL Electronics announced a strategic cooperation intention with Sony in the home entertainment sector, signing a memorandum of understanding. This includes plans to establish a joint venture, with TCL holding a 51% stake and Sony holding 49%, aiming to take over Sony's home entertainment business and operate related activities globally, including televisions and home audio products. The joint venture is expected to leverage TCL's own advanced display technology and global scale advantages, empowered by the SONY and BRAVIA brands, to steadily advance the expansion of its business footprint. According to data from Sigmaintell, global TV shipments reached 220 million units in 2025, a year-on-year decrease of 0.7%. TCL's shipments reached 30.4 million units, a year-on-year increase of 5.4%, capturing a 13.8% market share, up 0.8 percentage points year-on-year, ranking second globally. Sony's shipments reached 4.1 million units (-14.2%), with a 1.9% market share (-0.3 ppts), ranking tenth globally. Haitong International judges that in 2026, boosted by major sporting events like the FIFA World Cup, global TV shipments are expected to remain flat or achieve stable growth. Furthermore, penetration rates for 85+ inch large-size TVs and MiniLED technology are set to continue rising. Driven by industry leaders like TCL, the global market share of Chinese brands is anticipated to expand further. Risks include terminal demand falling short of expectations and geopolitical risks.
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