Orient Securities released a research report stating that the global TV industry is entering a phase of market share rebalancing, creating a time window for Chinese brands to potentially become the global leader. TV brands, led by TCL ELECTRONICS (01070), are consistently delivering on their strategies of globalization and premiumization. If the industry's net profit margin continues to recover, the valuation benchmark is expected to rise. The main points from Orient Securities are as follows:
The TV industry has entered a certain window for global share rebalancing. Upstream, the concentration and operational rate control of Chinese panel manufacturers ensure "moderate fluctuations, a trending upward movement, and converging volatility" in prices. Brands no longer need to hoard panels due to cycle concerns, making gross margins more predictable. Downstream, structural demand centered on large sizes and MiniLED is accelerating and will resonate with the 2026 FIFA World Cup in North America, a major sporting event, providing fertile ground for the concentrated realization of prior investments in sports IP and channel development. In terms of market share, the systematic retreat of Japanese TV brands and their trend towards cooperation with Chinese companies is a foregone conclusion. Samsung is also trading price for volume in certain channels, putting pressure on its pricing system. The time window for Chinese brands to claim the top global spot is opening.
TCL ELECTRONICS' 2025 performance significantly exceeded expectations, with its globalization and mid-to-high-end strategies continuing to deliver results. Driven by its dual strategy of "globalization" and "premiumization," TCL ELECTRONICS achieved high-quality growth in the global market, with continuously enhanced profitability. In 2025, revenue increased by 15.4% year-on-year to HKD 114.58 billion. Adjusted net profit attributable to shareholders grew by 56.5% compared to the previous year to HKD 2.51 billion. The actual 2025 adjusted net profit exceeded the upper target of the 2025 share incentive plan and was close to the upper limit of the 2025 positive profit alert. In 2025, TCL TV's global shipment market share reached 14.7%, up 0.8 percentage points year-on-year, steadily ranking among the top two global TV brands. The proportion of relatively high-margin TCL MiniLED TV in global shipments increased by 6.8 percentage points year-on-year to 13.0%, with a market share of 31.1%, firmly holding the top global position.
The net profit margin for leading TV companies continues to improve, with earnings delivery being key. As the earnings season begins, the report believes that compared to other home appliance sub-sectors, the TV industry has a higher proportion of exports, is less affected by diminishing domestic subsidy effects, and offers greater earnings stability. The market commonly perceives the TV industry as being squeezed upstream by panel costs and downstream by substitution from new display categories, leading to a long-term low net profit margin environment. However, the report argues that increased concentration among upstream Chinese panel makers makes midstream gross margins more predictable, downstream new display businesses like projectors have no further substitution effect on TVs, and coupled with the rising proportion of high-margin MiniLED products, the net profit margin is steadily increasing. The recovery of the industry's net profit margin is key to the market rebuilding the valuation system for TV stocks. The report believes that, led by TCL ELECTRONICS, the TV sector is entering a phase of steady upward movement.
Related targets: Leading TV companies: TCL ELECTRONICS, Hisense Visual Technology, KTC Technology.
Risk warnings include the risk of continued increases in raw material prices, diminishing marginal stimulus from replacement subsidies, and risks from tariff disruptions.
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