Core Insights - TCL Electronics reported a 20.4% year-on-year revenue growth to HKD 54.78 billion for the first half of 2025, with adjusted net profit increasing by 62.0% to HKD 1.06 billion [1] - The company is enhancing operational efficiency through digital transformation and automation, leading to a 1.0 percentage point decrease in overall expense ratio [1] - The application of AI technology in product development and operations is expected to drive long-term growth, with new products like smart glasses and companion robots launched in the first half of 2025 [1] Group 1: Market Trends and Strategies - TCL Electronics is capitalizing on the trend of high-end and large-screen TVs, driven by consumer demand for superior viewing experiences [2] - The company is implementing a high-end strategy in the domestic market, supported by the "old-for-new" policy, leading to a significant outperformance in TV shipment volumes [2] - In the international market, TCL has established production bases in multiple countries, achieving an annual capacity of over 30 million units, allowing for flexible global distribution [2] Group 2: Product Performance and Innovations - In the first half of 2025, TCL's global TV shipments increased by 7.6% year-on-year to 13.46 million units, maintaining a top-two global ranking [2] - The Mini LED TV segment saw a remarkable 176.1% year-on-year growth in shipments, reaching 1.37 million units, positioning TCL as the global leader in this category [2] - The large-screen display business generated a revenue of HKD 28.35 billion, with a gross margin increase of 0.5 percentage points to 15.9% [2] Group 3: AI and New Business Ventures - TCL is increasing R&D investments in high-end display technologies and AI to enhance product competitiveness and support its global high-end strategy [3] - The company has upgraded its AI interaction capabilities in TVs, achieving industry-leading content hours exceeding 30,000 hours [3] - TCL's new ventures include the launch of the Thunder X3 Pro AR glasses and the TCL AiMe companion robot, marking significant advancements in the AI, IoT, and robotics integration [4]

【财华社讯】TCL电子(01070.HK)公布，截至2025年6月30日止六个月，收入547.77亿港元，同比增长 20.4%；归母净利润10.9亿港元，同比增长67.8%；非香港财务报告准则计经调整归母净利润10.6亿港 元，同比增长62%；每股基本盈利45.14港仙。不派中期息。 本文源自：财华网 ...

Core Insights - TCL Electronics reported a revenue of HKD 54.777 billion for the six months ending June 30, 2025, representing a year-on-year increase of 20.41% [1] - The gross profit reached HKD 8.366 billion, up 15.99% year-on-year, while the net profit attributable to shareholders was HKD 1.09 billion, marking a significant increase of 67.78% [1] - The company emphasized quality growth in its core business, improved product and channel structure, and rapid expansion of innovative businesses, contributing to overall revenue growth [1] Financial Performance - The overall expenses ratio decreased by 1.0 percentage points to 11.5% compared to the same period last year, driven by effective cost management and digital transformation initiatives [1] - The after-tax profit increased by 60.5% to HKD 1.048 billion, and the adjusted net profit attributable to shareholders rose by 62.0% to HKD 1.060 billion [1] - The net capital debt ratio remained stable at 0.0%, with cash and cash equivalents increasing by 30.4% to HKD 11.442 billion, indicating a robust financial structure [1] Display Business Performance - The display business revenue grew by 10.9% to HKD 33.419 billion, with gross profit increasing by 11.4% to HKD 5.197 billion, and the gross margin for large-size displays improved by 0.5 percentage points to 15.9% [2] - TCL TV's global shipment volume increased by 7.6% to 13.46 million units, maintaining a top two position among global TV brands [2] - The shipment of TCL Mini LED TVs surged by 176.1% to 1.37 million units, securing the leading position globally [2]

Core Viewpoint - TCL Electronics reported a significant increase in revenue and profit for the first half of 2025, driven by quality growth in core business and effective cost management [1][2] Financial Performance - Revenue for the six months ending June 30, 2025, reached HKD 54.777 billion, a year-on-year increase of 20.41% [1] - Gross profit amounted to HKD 8.366 billion, reflecting a 15.99% year-on-year growth [1] - Net profit attributable to shareholders was HKD 1.09 billion, up 67.78% year-on-year, with basic earnings per share at HKD 0.4514 [1] - The overall expense ratio decreased by 1.0 percentage points to 11.5% compared to the same period last year [1] - Cash and cash equivalents increased by 30.4% to HKD 11.442 billion, indicating a robust financial structure [1] Business Segments - Display business revenue grew by 10.9% to HKD 33.419 billion, with gross profit increasing by 11.4% to HKD 5.197 billion [2] - The gross margin for large-size display business improved by 0.5 percentage points to 15.9% [2] - TCL TV global shipment increased by 7.6% to 13.46 million units, maintaining a top two position among global TV brands [2] - TCL Mini LED TV shipments surged by 176.1% to 1.37 million units, ranking first globally [2] - The company expanded its channel layout and strengthened key channel development, ensuring TCL TV ranks among the top three in retail volume in nearly twenty countries [2]

Financial Summary The group's financial performance for the six months ended June 30, 2025, shows significant growth in revenue, gross profit, and net profit, with adjusted net profit attributable to owners increasing by **62.0%** Financial Summary for the Six Months Ended June 30, 2025 | Metric | 2025 (Million HKD) | 2024 (Million HKD) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 54,777 | 45,494 | 20.4% | | Gross Profit | 8,366 | 7,213 | 16.0% | | Profit After Tax | 1,048 | 653 | 60.5% | | Net Profit Attributable to Owners | 1,090 | 650 | 67.8% | | Adjusted Net Profit Attributable to Owners | 1,060 | 654 | 62.0% | - The Group voluntarily reclassified warranty expenses from sales and distribution expenses to cost of sales in accordance with China Accounting Standards for Business Enterprises Interpretation No. 18, and restated comparative amounts for the first half of 2024[5](index=5&type=chunk) [Business Review and Outlook](index=2&type=section&id=%E6%A5%AD%E5%8B%99%E5%9B%9E%E9%A1%A7%E8%88%87%E5%B1%95%E6%9C%9B) [Overview](index=2&type=section&id=1.%20%E7%B6%9C%E8%BF%B0) The Group achieved quality growth in H1 2025, driven by strategic R&D investment and a focus on premium large-screen TVs, Mini LED, and AI, resulting in significant increases in revenue, gross profit, and net profit - Global TV industry shipments in H1 2025 saw a slight increase of **0.1%** year-on-year, with Mini LED TV global industry shipments growing **149.6%** to **4.8 million units**, and 75-inch and above TV global industry shipments increasing **20.5%** to **11.49 million units**[7](index=7&type=chunk) - China's TV industry retail sales achieved **10.9%** double-digit growth, stimulated by the "trade-in" policy, while domestic photovoltaic industry newly added grid-connected installed capacity grew **106.5%** to **212 GW** year-on-year[8](index=8&type=chunk) - Global shipments of AI smart glasses are projected to reach **5.5 million units** in 2025, increasing to **22 million units** by 2027, with a compound annual growth rate of approximately **100.0%**[10](index=10&type=chunk) Key Financial Indicators for H1 2025 | Metric | H1 2025 (Billion HKD) | Year-on-Year Growth | | :--- | :--- | :--- | | Revenue | 54.777 | 20.4% | | Gross Profit | 8.366 | 16.0% | | Profit After Tax | 1.048 | 60.5% | | Net Profit Attributable to Owners | 1.090 | 67.8% | | Adjusted Net Profit Attributable to Owners | 1.060 | 62.0% | - As of June 30, 2025, the net gearing ratio remained stable at **0.0%**, with cash and cash equivalents increasing **30.4%** year-on-year to **HKD 11.442 billion**[14](index=14&type=chunk) - R&D expenses increased **5.6%** year-on-year to **HKD 1.154 billion**, focusing on cutting-edge display technologies like Mini LED and Quantum Dot, and AI[19](index=19&type=chunk) - The Group launched TCL AiMe, the world's first split-type smart home companion robot, at CES 2025, and introduced several new AR/XR smart glasses, with RayNeo glasses achieving the top online sales market share during the 618 shopping festival[20](index=20&type=chunk)[21](index=21&type=chunk) - TCL officially became a top-tier global partner of the Olympics, with the TCL TV global brand index increasing **1.7%** year-on-year to **93**[22](index=22&type=chunk) [Display Business](index=7&type=section&id=2.%20%E9%A1%AF%E7%A4%BA%E6%A5%AD%E5%8B%99) The Group's display business achieved quality growth in H1 2025, with revenue increasing **10.9%** to **HKD 33.419 billion** and gross profit rising **11.4%** to **HKD 5.197 billion**, driven by optimized product structure and a successful mid-to-high-end strategy, securing TCL TV's global top two shipment ranking and Mini LED TV's global top spot - TCL TV global shipments reached **13.46 million units**, a **7.6%** year-on-year increase, with global market share rising **0.9 percentage points** to **14.2%**, maintaining a stable top two ranking globally[23](index=23&type=chunk) - The gross profit margin of the large-screen display business increased by **0.5 percentage points** year-on-year to **15.9%**[16](index=16&type=chunk) - TCL Mini LED TV global shipments surged **176.1%** year-on-year to **1.37 million units**, ranking first globally[16](index=16&type=chunk) [Large-Screen Display](index=7&type=section&id=2.1%20%E5%A4%A7%E5%90%8B%E5%AF%B8%E9%A1%AF%E7%A4%BA) Large-screen display business revenue grew **9.4%** to **HKD 28.352 billion** and gross profit increased **12.9%** to **HKD 4.514 billion**, with TCL TV global shipments reaching **13.46 million units**, up **7.6%**, securing a top two global market share, driven by rapid growth in Mini LED and large-screen products - Large-screen business revenue recorded a year-on-year increase of **9.4%** to **HKD 28.352 billion**, with gross profit growing **12.9%** to **HKD 4.514 billion**[25](index=25&type=chunk) - TCL Mini LED TV global shipment market share increased by **4.1 percentage points** year-on-year to **28.7%**, ranking first globally[25](index=25&type=chunk) [China Market](index=8&type=section&id=%E4%B8%AD%E5%9C%8B%E5%B8%82%E5%A0%B4) China market revenue grew **4.4%** to **HKD 8.72 billion**, with gross profit up **14.0%** to **HKD 1.69 billion** and gross profit margin increasing **1.7 percentage points** to **19.4%**, as TCL TV shipments rose **3.5%** and Mini LED TV shipments surged **154.2%**, securing top two retail rankings - China market revenue increased **4.4%** year-on-year to **HKD 8.72 billion**, with gross profit growing **14.0%** to **HKD 1.69 billion**, and gross profit margin improving by **1.7 percentage points** year-on-year to **19.4%**[26](index=26&type=chunk) - TCL TV shipments increased **3.5%** year-on-year, with TCL brand TV shipments growing **10.2%** year-on-year, ranking among the top two in both retail volume and value[26](index=26&type=chunk) - TCL Mini LED TV shipments increased **154.2%** year-on-year, with its share of total shipments rising **12.6 percentage points** year-on-year to **21.2%**[26](index=26&type=chunk) [International Market](index=9&type=section&id=%E5%9C%8B%E9%9A%9B%E5%B8%82%E5%A0%B4) International market TCL TV shipments grew **8.7%**, with revenue increasing **11.8%** to **HKD 19.632 billion** and gross profit rising **12.3%** to **HKD 2.824 billion**, leading to a **0.1 percentage point** increase in gross profit margin to **14.4%**, while overseas TCL Mini LED TV shipments surged **196.8%** - TCL TV international shipments increased **8.7%** year-on-year, with revenue growing **11.8%** to **HKD 19.632 billion** and gross profit rising **12.3%** to **HKD 2.824 billion**, and gross profit margin improving by **0.1 percentage points** year-on-year to **14.4%**[28](index=28&type=chunk) - TCL Mini LED TV overseas shipment volume increased **196.8%** year-on-year, with its share of total shipments rising **4.9 percentage points** year-on-year to **7.7%**[28](index=28&type=chunk) - TCL TV retail volume consistently ranked among the top three in nearly **twenty countries** globally[29](index=29&type=chunk) [North America Market](index=9&type=section&id=%E5%8C%97%E7%BE%8E%E5%B8%82%E5%A0%B4) North America market TCL TV overall shipments decreased **7.3%** year-on-year, but product structure significantly improved, with brand index up **17.8%**, 65-inch and above TV shipments growing **60.5%**, and Mini LED TV shipments surging **349.6%**, securing a stable top two retail market share in the US - North America market TCL TV overall shipments decreased **7.3%** year-on-year, but the TCL TV brand index improved by **17.8%** year-on-year[29](index=29&type=chunk) - Shipments of 65-inch and above TCL TVs increased **60.5%** year-on-year, with their share of total shipments rising **13.0 percentage points** year-on-year[29](index=29&type=chunk) - TCL Mini LED TV shipments surged **349.6%** year-on-year, with their share of total shipments rising **6.0 percentage points** year-on-year, maintaining a stable top two retail market share in the US market[31](index=31&type=chunk) [Europe Market](index=10&type=section&id=%E6%AD%90%E6%B4%B2%E5%B8%82%E5%A0%B4) Europe market TCL brand TV shipments grew **13.3%** year-on-year, with 65-inch and above TV shipments increasing **29.6%** and Mini LED TV shipments surging **91.0%**, securing top two retail rankings in France and Poland, and top three in Sweden, Spain, Greece, and Czech Republic - TCL brand TV shipments in Europe increased **13.3%** year-on-year[34](index=34&type=chunk) - Shipments of 65-inch and above TCL TVs increased **29.6%** year-on-year, and TCL Mini LED TV shipments surged **91.0%** year-on-year[34](index=34&type=chunk) - TCL TV retail volume consistently ranked among the top two in France and Poland, and among the top three in Sweden, Spain, Greece, and the Czech Republic[34](index=34&type=chunk) [Emerging Markets](index=10&type=section&id=%E6%96%B0%E8%88%88%E5%B8%82%E5%A0%B4) Emerging markets TCL TV shipments grew **17.9%** year-on-year, with 65-inch and above TV shipments increasing **45.8%**, securing top retail rankings in the Philippines, Australia, Saudi Arabia, Argentina, and Pakistan, top two in Brazil, Thailand, and Myanmar, and top three in Vietnam and South Korea - TCL TV shipments increased **17.9%** year-on-year, with 65-inch and above TCL TV shipments growing **45.8%** year-on-year[34](index=34&type=chunk) - TCL TV retail volume ranked first in the Philippines, Australia, Saudi Arabia, Argentina, and Pakistan, among the top two in Brazil, Thailand, and Myanmar, and among the top three in Vietnam and South Korea[34](index=34&type=chunk) [Small and Medium-Sized Display](index=10&type=section&id=2.2%20%E4%B8%AD%E5%B0%8F%E5%90%8B%E5%AF%B8%E9%A1%AF%E7%A4%BA) Small and medium-sized display business revenue grew **21.3%** to **HKD 4.563 billion** and gross profit increased **2.7%** to **HKD 627 million**, driven by focus on key markets, penetration of top-tier network operator channels in Europe and North America, and successful launch of popular new products like the TCL 60 series phones and TCL NXTPAPER 11 Plus tablet - Global mobile phone shipments in H1 2025 saw a slight decrease of **1.2%** year-on-year, while tablet industry shipments increased **12.4%** year-on-year[32](index=32&type=chunk) - Small and medium-sized display business revenue increased **21.3%** year-on-year to **HKD 4.563 billion**, with gross profit growing **2.7%** year-on-year to **HKD 627 million**[35](index=35&type=chunk) - Launched TCL 60 series phones featuring NXTPAPER 3.0 color e-ink eye-care display technology, and the flagship tablet TCL NXTPAPER 11 Plus, equipped with NXTPAPER 4.0 eye-care display technology and an AI toolbox for the first time[35](index=35&type=chunk) [Smart Commercial Display](index=11&type=section&id=2.3%20%E6%99%BA%E6%85%A7%E5%95%86%E9%A1%AF) Smart commercial display business revenue grew **9.4%** to **HKD 504 million**, with gross profit reaching **HKD 56 million**, driven by product structure improvement in the domestic market, where digital signage shipments ranked first, and successful expansion to key clients like Starbucks and Luckin Coffee, while overseas markets focused on education and launched the flagship office smart screen 98E60 - Domestic digital signage shipments ranked first in the industry, successfully expanding to key clients such as Starbucks, Luckin Coffee, Mixue Ice Cream & Tea, and Li Auto[36](index=36&type=chunk) - Smart commercial display business revenue increased **9.4%** year-on-year to **HKD 504 million**, with gross profit reaching **HKD 56 million**[38](index=38&type=chunk) - Launched the flagship office smart screen 98E60, featuring Future Paper display technology and integrating core technologies such as professional display, audio-video, conference systems, and AI algorithms[38](index=38&type=chunk) [Internet Business](index=12&type=section&id=3.%20%E4%BA%92%E8%81%AF%E7%B6%B2%E6%A5%AD%E5%8B%99) The Group's global internet business revenue reached **HKD 1.458 billion**, a **20.3%** year-on-year increase, with gross profit growing **21.5%** to **HKD 794 million** and gross profit margin increasing **0.5 percentage points** to **54.4%**, driven by user experience-centric TV-side AI interaction upgrades and robust overseas market expansion, achieving high profitability - Global internet business revenue reached **HKD 1.458 billion**, a **20.3%** year-on-year increase[39](index=39&type=chunk) - Gross profit increased **21.5%** year-on-year to **HKD 794 million**, with gross profit margin increasing **0.5 percentage points** year-on-year to **54.4%**[39](index=39&type=chunk) [China Market](index=12&type=section&id=3.1%20%E4%B8%AD%E5%9C%8B%E5%B8%82%E5%A0%B4) China market internet business focused on user experience, emphasizing TV-side AI technology and interaction upgrades, successfully completing the "Lingkong Desktop 3.0" major upgrade and launching ultra-high-definition services on TV terminals, with UHD content duration exceeding **30,000 hours** - Successfully completed the major upgrade of "Lingkong Desktop 3.0," achieving minimalist desktop optimization and fully leveraging the advantages of Mini LED display technology[40](index=40&type=chunk) - Ultra-high-definition services were launched on TV terminals, with UHD content duration exceeding **30,000 hours**[40](index=40&type=chunk) [International Market](index=13&type=section&id=3.2%20%E5%9C%8B%E9%9A%9B%E5%B8%82%E5%A0%B4) The international market continued to deepen strategic cooperation with internet giants like Google, Roku, and Netflix, with TCL Channel completing a comprehensive upgrade, significantly improving content distribution efficiency and achieving content localization; as of June 30, 2025, TCL Channel's cumulative user base exceeded **39.3 million**, effectively driving robust growth in the international internet business - Continuously deepened close cooperation with internet giants such as Google, Roku, and Netflix, driving continuous breakthroughs in overseas business models[42](index=42&type=chunk) - TCL Channel completed a comprehensive upgrade, significantly improving content distribution efficiency and achieving content localization in multiple countries[42](index=42&type=chunk) - As of June 30, 2025, TCL Channel's cumulative user base exceeded **39.3 million**[42](index=42&type=chunk) [Innovative Businesses](index=13&type=section&id=4.%20%E5%89%B5%E6%96%B0%E6%A5%AD%E5%8B%99) Innovative businesses maintained strong growth, with H1 2025 revenue surging **42.4%** to **HKD 19.875 billion** and gross profit increasing **25.7%** to **HKD 2.374 billion**, driven by doubled revenue and gross profit in the photovoltaic business, steady expansion of all-category marketing, significantly improved profitability in smart connectivity and smart home businesses, and breakthrough progress in AR/XR smart glasses and AI companion robots - Innovative businesses maintained strong growth, with H1 2025 revenue surging **42.4%** year-on-year to **HKD 19.875 billion** and gross profit increasing **25.7%** year-on-year to **HKD 2.374 billion**[17](index=17&type=chunk) - Photovoltaic business revenue and gross profit increased **111.3%** and **98.5%** year-on-year, respectively, to **HKD 11.136 billion** and **HKD 1.073 billion**[17](index=17&type=chunk) [Photovoltaic Business](index=13&type=section&id=4.1%20%E5%85%89%E4%BC%8F%E6%A5%AD%E5%8B%99) Photovoltaic business revenue grew **111.3%** to **HKD 11.136 billion** and gross profit increased **98.5%** to **HKD 1.073 billion**, driven by a focus on the distributed photovoltaic end-market, strengthened power market trading capabilities, deepened channel cooperation, and steady overseas business development, with products and operations launched in the European market - Photovoltaic business revenue increased **111.3%** year-on-year to **HKD 11.136 billion**, with gross profit improving **98.5%** year-on-year to **HKD 1.073 billion**[17](index=17&type=chunk)[45](index=45&type=chunk) - As of June 30, 2025, the photovoltaic business in the China market had accumulated over **290** industrial and commercial signed projects, over **2,380** dealer channels, and nearly **280,000** signed rural households[45](index=45&type=chunk) - Steadily advanced overseas business development, actively explored integrated solar-storage solutions, and achieved product and business launches in Europe[44](index=44&type=chunk) [All-Category Marketing](index=14&type=section&id=4.2%20%E5%85%A8%E5%93%81%E9%A1%9E%E7%87%9F%E9%8A%B7) All-category marketing revenue grew **1.2%** to **HKD 7.842 billion**, with air conditioners accounting for **82.2%** and refrigeration/washing products for **17.8%**, as the Group leveraged its global brand influence and channel network to expand branded distribution of smart products like air conditioners, refrigerators, and washing machines, and launched several new products - All-category marketing revenue increased **1.2%** year-on-year to **HKD 7.842 billion**[46](index=46&type=chunk) - Air conditioner revenue accounted for **82.2%**, and refrigeration/washing product revenue accounted for **17.8%**[46](index=46&type=chunk) - Launched several new products, including the TCL Big Eye AI Super Drum Washer-Dryer Set, TCL Little Blue Wing Fresh Air Conditioner, and TCL Ice Kirin Magnetic Fresh Refrigerator[46](index=46&type=chunk) [Smart Connectivity and Smart Home](index=14&type=section&id=4.3%20%E6%99%BA%E8%83%BD%E9%80%A3%E6%8E%A5%E5%8F%8A%E6%99%BA%E8%83%BD%E5%AE%B6%E5%B1%85) Smart connectivity and smart home business revenue reached **HKD 897 million**, with gross profit and gross profit margin increasing **13.2%** and **3.5 percentage points** to **HKD 211 million** and **23.6%** respectively, showing significant improvement in profitability, while AR/XR smart glasses achieved breakthrough progress, with RayNeo glasses exceeding **52%** sales market share during the 618 shopping festival, and the world's first split-type smart home companion robot, TCL AiMe, was launched - Smart connectivity and smart home business revenue reached **HKD 897 million**, with gross profit increasing **13.2%** year-on-year to **HKD 211 million**, and gross profit margin improving **3.5 percentage points** year-on-year to **23.6%**[47](index=47&type=chunk) - RayNeo glasses achieved over **52%** sales market share during the 2025 618 shopping festival, with sales **3.4 times** that of the same period last year, securing the top sales position in the XR industry across both JD.com and Tmall platforms[48](index=48&type=chunk)[50](index=50&type=chunk) - Launched TCL AiMe, the world's first split-type smart home companion robot, at CES, integrating AI, IoT control hub, and home companion robot functionalities[49](index=49&type=chunk) [Outlook](index=16&type=section&id=5.%20%E5%B1%95%E6%9C%9B) The Group will pursue a "mid-to-high-end + globalization" strategy, investing in core technologies like Mini LED and AI to build technological barriers, expand its premium product matrix, and leverage global channels, aiming to become a leading global smart terminal enterprise - Global trends towards larger screens and premiumization are expected to further emerge, with 75-inch and above, Mini LED, and other large-screen and mid-to-high-end TV products anticipated to maintain high growth[51](index=51&type=chunk) - Will continue to deepen the "mid-to-high-end + globalization" dual-driven strategy, increasing investment in core technologies to build technological barriers[51](index=51&type=chunk) - Actively seize new market opportunities brought by AI, increase AI-related R&D investment, and accelerate product development and business promotion for AR/XR smart glasses and companion robots[52](index=52&type=chunk) - Adhere to the long-term operational goal of "Net Profit Growth > Gross Profit Growth > Revenue Growth > Sales Volume Growth," striving to become a leading global smart terminal enterprise with global operations[53](index=53&type=chunk) [Management Discussion and Analysis](index=18&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%A4%E8%A8%8E%E8%AB%96%E5%8F%8A%E5%88%86%E6%9E%90) [Comparison of H1 2025 with H1 2024](index=18&type=section&id=2025%E4%B8%8A%E5%8D%8A%E5%B9%B4%E5%BA%A6%E8%88%872024%E5%B9%B4%E4%B8%8A%E5%8D%8A%E5%B9%B4%E5%BA%A6%E6%AF%94%E8%BC%83) The Group's H1 2025 financial performance was strong, with revenue up **20.4%** to **HKD 54.777 billion** and gross profit up **16.0%** to **HKD 8.366 billion**, while profit before tax and net profit attributable to owners surged **61.1%** and **67.8%** respectively, and adjusted net profit attributable to owners increased **62.0%**, indicating significant improvements in operational quality and profitability Consolidated Income Statement Comparison for H1 2025 vs H1 2024 | Metric | H1 2025 (Thousand HKD) | H1 2024 (Thousand HKD) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 54,777,049 | 45,493,620 | 20.4% | | Cost of Sales | (46,411,098) | (38,280,761) | 21.2% | | Gross Profit | 8,365,951 | 7,212,859 | 16.0% | | Other Income and Gains | 894,483 | 1,094,792 | -18.3% | | Selling and Distribution Expenses | (4,011,576) | (3,832,293) | 4.7% | | Administrative Expenses | (2,312,964) | (1,860,323) | 24.3% | | Research and Development Expenses | (1,154,499) | (1,092,783) | 5.6% | | Other Operating Expenses | (17,875) | (171,529) | -89.6% | | Net Impairment Loss on Financial and Contract Assets | (18,325) | (10,053) | 82.3% | | Finance Costs | (392,234) | (521,358) | -24.8% | | Profit Before Tax | 1,420,846 | 881,796 | 61.1% | | Income Tax Expense | (373,196) | (228,882) | 63.1% | | Profit for the Period | 1,047,650 | 652,914 | 60.5% | | Net Profit Attributable to Owners | 1,090,419 | 649,920 | 67.8% | | Adjusted Net Profit Attributable to Owners | 1,059,892 | 654,211 | 62.0% | [Revenue](index=19&type=section&id=%E6%94%B6%E5%85%A5) The Group's H1 2025 revenue increased **20.4%** year-on-year to **HKD 54.777 billion**, primarily driven by comprehensive growth in display, internet, and innovative businesses, with innovative businesses showing the most significant increase - The Group's revenue increased **20.4%** year-on-year from **HKD 45.494 billion** in H1 2024 to **HKD 54.777 billion** in H1 2025[55](index=55&type=chunk) Revenue by Business Segment (Six Months Ended June 30) | Business Segment | 2025 (Million HKD) | % of Total | 2024 (Million HKD) | % of Total | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Display Business | 33,419 | 61.0% | 30,135 | 66.3% | 10.9% | | Large-Screen Display | 28,352 | 51.8% | 25,914 | 57.0% | 9.4% | | Small and Medium-Sized Display | 4,563 | 8.3% | 3,761 | 8.3% | 21.3% | | Smart Commercial Display | 504 | 0.9% | 460 | 1.0% | 9.4% | | Internet Business | 1,458 | 2.7% | 1,212 | 2.7% | 20.3% | | Innovative Businesses | 19,875 | 36.3% | 13,953 | 30.6% | 42.4% | | Photovoltaic Business | 11,136 | 20.4% | 5,269 | 11.6% | 111.3% | | All-Category Marketing | 7,842 | 14.3% | 7,753 | 17.0% | 1.2% | | Smart Connectivity and Smart Home | 897 | 1.6% | 931 | 2.0% | -3.6% | | Others | 25 | 0.0% | 194 | 0.4% | -87.1% | | **Total Revenue** | **54,777** | **100.0%** | **45,494** | **100.0%** | **20.4%** | [Display Business (Revenue)](index=20&type=section&id=%E9%A1%AF%E7%A4%BA%E6%A5%AD%E5%8B%99_%E6%94%B6%E5%85%A5) Display business revenue increased **10.9%** year-on-year to **HKD 33.419 billion**, primarily driven by global market expansion, enhanced brand influence, and improved product structure, leading to comprehensive revenue growth across large-screen, small and medium-sized, and smart commercial display businesses - Display business revenue increased **10.9%** year-on-year from **HKD 30.135 billion** in H1 2024 to **HKD 33.419 billion** in H1 2025[57](index=57&type=chunk) - Large-screen display business revenue increased **9.4%** year-on-year to **HKD 28.352 billion**[57](index=57&type=chunk) - Small and medium-sized business revenue increased **21.3%** year-on-year to **HKD 4.563 billion**[57](index=57&type=chunk) - Smart commercial display business revenue increased **9.4%** year-on-year to **HKD 504 million**[57](index=57&type=chunk) [Internet Business (Revenue)](index=20&type=section&id=%E4%BA%92%E8%81%AF%E7%B6%B2%E6%A5%AD%E5%8B%99_%E6%94%B6%E5%85%A5) Internet business revenue increased **20.3%** year-on-year to **HKD 1.458 billion**, primarily due to continuous breakthroughs in overseas internet business monetization models and significant improvements in content development, product experience, and commercialization capabilities - Internet business revenue increased **20.3%** year-on-year from **HKD 1.212 billion** in H1 2024 to **HKD 1.458 billion** in H1 2025[58](index=58&type=chunk) - Primarily benefiting from continuous breakthroughs in overseas internet business monetization models and significant improvements in content development, product experience, and commercialization capabilities[58](index=58&type=chunk) [Innovative Businesses (Revenue)](index=20&type=section&id=%E5%89%B5%E6%96%B0%E6%A5%AD%E5%8B%99_%E6%94%B6%E5%85%A5) Innovative businesses revenue increased **42.4%** year-on-year to **HKD 19.875 billion**, primarily due to a **111.3%** growth in photovoltaic business revenue to **HKD 11.137 billion**, achieved through strengthened power market trading capabilities, flexible market strategy adjustments, and deepened channel cooperation - Innovative businesses revenue increased **42.4%** year-on-year from **HKD 13.953 billion** in H1 2024 to **HKD 19.875 billion** in H1 2025[59](index=59&type=chunk) - Photovoltaic business revenue increased **111.3%** to **HKD 11.137 billion**[59](index=59&type=chunk) [Gross Profit and Gross Profit Margin](index=20&type=section&id=%E6%AF%9B%E5%88%A9%E5%8F%8A%E6%AF%9B%E5%88%A9%E7%8E%87) The Group's overall gross profit increased **16.0%** year-on-year to **HKD 8.366 billion**, primarily due to its mid-to-high-end transformation strategy and cost control, though the overall gross profit margin decreased **0.6 percentage points** year-on-year to **15.3%** due to the increased revenue contribution from the relatively lower-margin photovoltaic business - The Group's overall gross profit increased **16.0%** year-on-year from **HKD 7.213 billion** in H1 2024 to **HKD 8.366 billion** in H1 2025[60](index=60&type=chunk) - The gross profit margin for H1 2025 was **15.3%**, a **0.6 percentage point** decrease year-on-year compared to H1 2024[60](index=60&type=chunk) - The decrease in gross profit margin was primarily due to the increased revenue contribution from the relatively lower-margin photovoltaic business[60](index=60&type=chunk) [Display Business (Gross Profit Margin)](index=21&type=section&id=%E9%A1%AF%E7%A4%BA%E6%A5%AD%E5%8B%99_%E6%AF%9B%E5%88%A9%E7%8E%87) Display business gross profit margin was **15.6%**, an increase of **0.1 percentage points** year-on-year, primarily benefiting from the implementation of the mid-to-high-end strategy and improved product structure, with large-screen display business gross profit margin increasing **0.5 percentage points** year-on-year to **15.9%** - The gross profit margin for the display business in H1 2025 was **15.6%**, an increase of **0.1 percentage points** year-on-year[61](index=61&type=chunk) - The gross profit margin for the large-screen display business increased by **0.5 percentage points** year-on-year to **15.9%**[61](index=61&type=chunk) [Internet Business (Gross Profit Margin)](index=21&type=section&id=%E4%BA%92%E8%81%AF%E7%B6%B2%E6%A5%AD%E5%8B%99_%E6%AF%9B%E5%88%A9%E7%8E%87) Internet business gross profit margin was **54.4%**, an increase of **0.5 percentage points** year-on-year, primarily due to enhanced monetization capabilities driven by improved overseas internet commercialization, leading to further expansion of high-margin overseas internet revenue - The gross profit margin for the internet business in H1 2025 was **54.4%**, an increase of **0.5 percentage points** year-on-year[62](index=62&type=chunk) - Primarily benefiting from the Group's enhanced overseas internet commercialization capabilities, leading to stronger monetization[62](index=62&type=chunk) [Innovative Businesses (Gross Profit Margin)](index=21&type=section&id=%E5%89%B5%E6%96%B0%E6%A5%AD%E5%8B%99_%E6%AF%9B%E5%88%A9%E7%8E%87) Innovative businesses gross profit margin was **11.9%**, a decrease of **1.6 percentage points** year-on-year, primarily due to the increased revenue contribution from the relatively lower-margin photovoltaic business - The gross profit margin for innovative businesses in H1 2025 was **11.9%**, a decrease of **1.6 percentage points** year-on-year[63](index=63&type=chunk) - Primarily due to the increased revenue contribution from the relatively lower-margin photovoltaic business[63](index=63&type=chunk) [Other Income and Gains](index=21&type=section&id=%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5%E5%8F%8A%E6%94%B6%E7%9B%8A) Other income and gains decreased **18.3%** year-on-year to **HKD 894 million**, primarily due to reduced interest income resulting from a decrease in the Group's wealth management scale - Other income and gains decreased **18.3%** year-on-year from **HKD 1.095 billion** in H1 2024 to **HKD 894 million** in H1 2025[64](index=64&type=chunk) - Primarily due to reduced interest income resulting from a decrease in the Group's wealth management scale[64](index=64&type=chunk) [Selling and Distribution Expenses](index=21&type=section&id=%E9%8A%B7%E5%94%AE%E5%8F%8A%E5%88%86%E9%8A%B7%E6%94%AF%E5%87%BA) Selling and distribution expenses increased **4.7%** year-on-year to **HKD 4.012 billion**, primarily due to the Group's strategic increase in brand marketing and product promotion investments - Selling and distribution expenses increased **4.7%** year-on-year from **HKD 3.832 billion** in H1 2024 to **HKD 4.012 billion** in H1 2025[65](index=65&type=chunk) - Primarily due to the Group's strategic increase in brand marketing and product promotion investments[65](index=65&type=chunk) [Administrative Expenses](index=21&type=section&id=%E8%A1%8C%E6%94%BF%E6%94%AF%E5%87%BA) Administrative expenses increased **24.3%** year-on-year to **HKD 2.313 billion**, primarily due to increased realized losses from the liquidation of derivative financial instruments and higher bonus provisions resulting from the Group's strong performance - Administrative expenses increased **24.3%** year-on-year from **HKD 1.860 billion** in H1 2024 to **HKD 2.313 billion** in H1 2025[66](index=66&type=chunk) - Primarily due to increased realized losses from the liquidation of derivative financial instruments in H1 2025 and higher bonus provisions resulting from the Group's strong performance in H1 2025[66](index=66&type=chunk) [Research and Development Expenses](index=22&type=section&id=%E7%A0%94%E7%99%BC%E8%B2%BB%E7%94%A8) Research and development expenses increased **5.6%** year-on-year to **HKD 1.154 billion**, primarily due to the Group's continued increased investment in high-end display technologies and AI - Research and development expenses increased **5.6%** year-on-year from **HKD 1.093 billion** in H1 2024 to **HKD 1.154 billion** in H1 2025[67](index=67&type=chunk) - Primarily due to the Group's continued increased investment in high-end display technologies and AI[67](index=67&type=chunk) [Other Operating Expenses](index=22&type=section&id=%E5%85%B6%E4%BB%96%E7%87%9F%E9%81%8B%E6%94%AF%E5%87%BA) Other operating expenses significantly decreased **89.6%** year-on-year to **HKD 17.88 million**, primarily because the Group recognized goodwill impairment in H1 2024, which did not recur in the current period - Other operating expenses significantly decreased **89.6%** year-on-year from **HKD 172 million** in H1 2024 to **HKD 17.88 million** in H1 2025[68](index=68&type=chunk) - Primarily because the Group recognized goodwill impairment in H1 2024[68](index=68&type=chunk) [Net Impairment Loss on Financial and Contract Assets](index=22&type=section&id=%E9%87%91%E8%9E%8D%E5%8F%8A%E5%90%88%E7%B4%84%E8%B3%87%E7%94%A2%E6%B8%9B%E5%80%BC%E虧%E6%90%8D%E6%B7%A8%E9%A1%8D) Net impairment loss on financial and contract assets significantly increased **82.3%** year-on-year to **HKD 18.33 million**, primarily due to an increase in bad debt provisions for trade receivables - Net impairment loss on financial and contract assets significantly increased **82.3%** year-on-year from **HKD 10.05 million** in H1 2024 to **HKD 18.33 million** in H1 2025[69](index=69&type=chunk) - Primarily due to an increase in bad debt provisions for trade receivables[69](index=69&type=chunk) [Finance Costs](index=22&type=section&id=%E8%9E%8D%E8%B3%87%E6%88%90%E6%9C%AC) Finance costs decreased **24.8%** year-on-year to **HKD 392 million**, primarily due to reduced interest expenses from bill discounting and factoring trade receivables during the reporting period - Finance costs decreased **24.8%** year-on-year from **HKD 521 million** in H1 2024 to **HKD 392 million** in H1 2025[70](index=70&type=chunk) - Primarily due to reduced interest expenses from bill discounting and factoring trade receivables during the reporting period[70](index=70&type=chunk) [Share of Profits and Losses - Joint Ventures and Associates](index=22&type=section&id=%E5%88%86%E4%BD%94%E6%90%8D%E7%9B%8A%EF%BC%8D%E5%90%88%E8%B3%87%E5%85%AC%E5%8F%B8%E5%8F%8A%E8%81%AF%E7%96%B6%E5%85%AC%E5%8F%B8) Share of profits increased **8.6%** year-on-year to **HKD 67.89 million**, primarily due to improved performance and increased profitability of the Group's associate companies - Share of profits increased **8.6%** year-on-year from **HKD 62.48 million** in H1 2024 to **HKD 67.89 million** in H1 2025[71](index=71&type=chunk) - Primarily due to improved performance and increased profitability of the Group's associate companies[71](index=71&type=chunk) [Profit Before Tax](index=22&type=section&id=%E9%99%A4%E7%A8%85%E5%89%8D%E5%88%A9%E6%BD%A4) Profit before tax increased **61.1%** year-on-year to **HKD 1.421 billion**, primarily due to significant improvements in operational quality across multiple business lines, including display, internet, and innovative businesses, benefiting from economies of scale and efficiency enhancements, which effectively lowered the overall expense ratio - Profit before tax increased **61.1%** year-on-year from **HKD 882 million** in H1 2024 to **HKD 1.421 billion** in H1 2025[72](index=72&type=chunk) - Primarily due to significant improvements in operational quality across multiple business lines, including display, internet, and innovative businesses, during the reporting period, benefiting from economies of scale and efficiency enhancements, which effectively lowered the overall expense ratio[72](index=72&type=chunk) [Income Tax Expense](index=22&type=section&id=%E6%89%80%E5%BE%97%E7%A8%85) Income tax expense increased **63.1%** year-on-year to **HKD 373 million**, primarily due to increased profit before tax for certain subsidiaries during the reporting period, with the Group's effective tax rate increasing **0.3 percentage points** year-on-year from **26.0%** in H1 2024 to **26.3%** in H1 2025 - Income tax expense increased **63.1%** year-on-year from **HKD 229 million** in H1 2024 to **HKD 373 million** in H1 2025[73](index=73&type=chunk) - The Group's effective tax rate increased **0.3 percentage points** year-on-year from **26.0%** in H1 2024 to **26.3%** in H1 2025[73](index=73&type=chunk) [Profit for the Period and Net Profit Attributable to Owners](index=23&type=section&id=%E6%9C%AC%E6%9C%9F%E5%88%A9%E6%BD%A4%E5%8F%8A%E6%AD%B8%E6%AF%8D%E6%B7%A8%E5%88%A9%E6%BD%A4) Profit for the period increased **60.5%** year-on-year to **HKD 1.048 billion**, and net profit attributable to owners grew **67.8%** year-on-year to **HKD 1.090 billion**, primarily due to the Group's continued increased R&D investment in high-end display technologies and AI, active global supply chain and channel deployment, and ongoing optimization of cost structure, leading to improved operational quality and enhanced profitability - Profit for the period increased **60.5%** year-on-year from **HKD 653 million** in H1 2024 to **HKD 1.048 billion** in H1 2025[74](index=74&type=chunk) - Net profit attributable to owners increased **67.8%** year-on-year from **HKD 650 million** in H1 2024 to **HKD 1.090 billion** in H1 2025[74](index=74&type=chunk) - The primary reasons for the increase are the Group's continued increased R&D investment in high-end display technologies and AI, active global supply chain and channel deployment, and ongoing optimization of cost structure, leading to improved operational quality and enhanced profitability[74](index=74&type=chunk) [Non-HKFRS Measures: Adjusted Net Profit Attributable to Owners](index=23&type=section&id=%E9%9D%9E%E9%A6%99%E6%B8%AF%E8%B2%A1%E5%8B%99%E5%A0%B1%E5%91%8A%E6%BA%96%E5%89%87%E8%A8%88%E9%87%8F%EF%BC%9A%E7%B6%93%E8%AA%BF%E6%95%B4%E6%AD%B8%E6%AF%8D%E6%B7%A8%E5%88%A9%E6%BD%A4) Adjusted net profit attributable to owners increased **62.0%** year-on-year to **HKD 1.060 billion**, primarily due to significant improvements in operating performance across multiple business lines, including display, internet, and innovative businesses, benefiting from economies of scale and efficiency enhancements, which effectively lowered the overall expense ratio and continuously improved operational efficiency; this non-HKFRS measure provides supplementary data for investors to assess the Group's core business performance - Adjusted net profit attributable to owners increased **62.0%** year-on-year from **HKD 654 million** in H1 2024 to **HKD 1.060 billion** in H1 2025[75](index=75&type=chunk) Reconciliation of Adjusted Net Profit Attributable to Owners to Net Profit Attributable to Owners | Metric | H1 2025 (Thousand HKD) | H1 2024 (Thousand HKD) | | :--- | :--- | :--- | | Net profit attributable to owners, as presented | 1,090,419 | 649,920 | | Net (gains) / losses from investment companies | (5,181) | 253 | | Net (gains) / losses from disposal and liquidation of subsidiaries | (745) | – | | Net (gains) / losses related to call and put options | (18,425) | 449 | | Net (gains) / losses from disposal of non-current assets | (8,643) | 4,764 | | Related income tax impact | 2,467 | (1,175) | | **Adjusted Net Profit Attributable to Owners** | **1,059,892** | **654,211** | [Financial Review](index=25&type=section&id=%E8%B2%A1%E5%8B%99%E5%9B%9E%E9%A1%A7) [Major Investments, Acquisitions and Disposals](index=25&type=section&id=%E4%B8%BB%E8%A6%81%E6%8A%95%E8%B3%87%E3%80%81%E6%94%B6%E8%B3%BC%E5%8F%8A%E5%87%BA%E5%94%AE) As of June 30, 2025, the Group held no major investments and made no significant acquisitions or disposals of subsidiaries, associates, or joint ventures during the six months ended on that date - The Group held no major investments as of **June 30, 2025**[80](index=80&type=chunk) - There were no significant acquisitions or disposals of subsidiaries, associates, or joint ventures during the six months ended **June 30, 2025**[80](index=80&type=chunk) [Future Plans for Material Investments or Capital Assets](index=25&type=section&id=%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B3%87%E6%88%96%E8%B3%87%E6%9C%AC%E8%B3%87%E7%94%A2%E7%9A%84%E6%9C%AA%E4%BE%86%E8%A8%88%E5%8A%83) Except as disclosed in this announcement, the Group currently has no specific plans for material investments or capital assets - Except as disclosed in this announcement, the Group currently has no specific plans for material investments or capital assets[81](index=81&type=chunk) [Liquidity and Financial Resources](index=25&type=section&id=%E6%B5%81%E5%8B%95%E8%B3%87%E9%87%91%E5%8F%8A%E8%B2%A1%E5%8B%99%E8%B3%87%E6%BA%90) The Group maintains ample liquidity, with cash and cash equivalents increasing **30.4%** year-on-year to **HKD 11.442 billion** as of June 30, 2025, and a stable net gearing ratio of **0.0%**, indicating a robust financial structure and sufficient liquidity - As of **June 30, 2025**, the Group's cash and cash equivalents totaled approximately **HKD 11.442 billion**, an increase of **30.4%** compared to **December 31, 2024**[82](index=82&type=chunk) - As of **June 30, 2025**, the Group's gearing ratio was **0.0%**[83](index=83&type=chunk) [Pledged Assets](index=26&type=section&id=%E8%B3%87%E7%94%A2%E6%8A%B5%E6%8A%BC) As of June 30, 2025, several of the Group's assets, including restricted cash and pledged deposits, debt instrument investments, bills receivable, inventories, other receivables, and trade receivables, were pledged as collateral for performance and quality assurance balances, financial assets, and bank facilities Pledged Assets as of June 30, 2025 | Pledged Assets | June 30, 2025 (HKD) | December 31, 2024 (HKD) | | :--- | :--- | :--- | | Restricted cash and pledged deposits | 543,179,000 | 669,910,000 | | Debt instruments at amortized cost | 161,821,000 | 107,637,000 | | Bills receivable | 116,124,000 | 192,282,000 | | Inventories | 99,577,000 | 400,087,000 | | Other receivables | 57,121,000 | 4,428,000 | | Trade receivables | 548,000 | 無 | [Capital Commitments and Contingent Liabilities](index=26&type=section&id=%E8%B3%87%E6%9C%AC%E6%89%BF%E6%93%94%E5%8F%8A%E6%88%96%E7%84%B6%E8%B2%A0%E5%82%B5) As of June 30, 2025, the Group had contracted but unprovided capital commitments of approximately **HKD 533 million**, with no authorized but uncontracted capital commitments; additionally, TCL SEMP Eletroeletronicos is involved in a Brazilian tax assessment dispute for which the Group has made no provision based on legal advice - As of **June 30, 2025**, the Group had contracted but unprovided capital commitments of approximately **HKD 533 million**[85](index=85&type=chunk) - TCL SEMP Eletroeletronicos is involved in a Brazilian tax assessment dispute, for which the Group has made no provision based on legal counsel's opinion that an effective defense can be mounted[86](index=86&type=chunk) [Pending Litigation](index=26&type=section&id=%E6%9C%AA%E6%B1%BA%E8%A8%B4%E8%A8%9F) Aside from the aforementioned Brazilian tax dispute, the Group was not involved in any other material litigation as of June 30, 2025 - Aside from the aforementioned, the Group was not involved in any material litigation as of **June 30, 2025**[87](index=87&type=chunk) [Foreign Currency Exchange Risk](index=26&type=section&id=%E5%A4%96%E5%B9%A3%E5%8C%AF%E5%85%8C%E9%A2%A8%E9%9A%AA) The Group effectively monitors and manages foreign currency exchange risk through a centralized foreign exchange management strategy, emphasizing functional currency transactions for natural hedging, and avoiding high-risk derivative instrument transactions - The Group adopts a centralized foreign exchange management strategy to monitor overall foreign exchange risk, offset positions of various associated companies, and conduct centralized hedging transactions with banks[88](index=88&type=chunk) - Emphasizes the importance of conducting trade, investments, and borrowings in functional currencies to achieve natural hedging effects[88](index=88&type=chunk) - For sound financial management purposes, the Group does not engage in any high-risk derivative instrument transactions or leveraged foreign exchange contracts[88](index=88&type=chunk) [Employees and Remuneration Policy](index=27&type=section&id=%E5%83%B1%E5%93%A1%E5%8F%8A%E9%85%AC%E9%87%91%E6%94%BF%E7%AD%96) As of June 30, 2025, the Group had **32,603** employees with total employee costs of approximately **HKD 3.342 billion**, offering competitive benefits, performance bonuses, and continuous training, and granted **91,497,900** award shares under the 2023 Share Award Scheme on April 9, 2025 - As of **June 30, 2025**, the Group had **32,603** employees, with total employee costs of approximately **HKD 3.342 billion**[89](index=89&type=chunk) - The Group provides competitive benefits, performance bonuses based on Group performance and individual employee contributions, and continuous training and development programs[89](index=89&type=chunk) - On **April 9, 2025**, **91,497,900** award shares were granted under the 2023 Share Award Scheme[90](index=90&type=chunk) [Financial Information](index=28&type=section&id=%E8%B2%A1%E5%8B%99%E8%B3%87%E6%96%99) [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=28&type=section&id=%E7%B6%9C%E5%90%88%E6%90%8D%E7%9B%8A%E5%8F%8A%E5%85%B6%E4%BB%96%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E8%A1%A8) Profit for the period increased **60.5%** year-on-year to **HKD 1.048 billion**, and profit attributable to owners of the parent increased **67.8%** to **HKD 1.090 billion**, with total comprehensive income significantly growing to **HKD 1.101 billion**, basic earnings per share at **45.14 HK cents**, and diluted earnings per share at **43.04 HK cents** Consolidated Statement of Profit or Loss and Other Comprehensive Income (Six Months Ended June 30) | Metric | 2025 (Thousand HKD) | 2024 (Thousand HKD) | | :--- | :--- | :--- | | Revenue | 54,777,049 | 45,493,620 | | Gross Profit | 8,365,951 | 7,212,859 | | Profit Before Tax | 1,420,846 | 881,796 | | Profit for the Period | 1,047,650 | 652,914 | | Profit Attributable to Owners of the Parent | 1,090,419 | 649,920 | | Total Comprehensive Income for the Period | 1,100,547 | 313,878 | | Basic Earnings Per Share Attributable to Ordinary Equity Holders of the Parent | 45.14港仙 | 26.69港仙 | | Diluted Earnings Per Share Attributable to Ordinary Equity Holders of the Parent | 43.04港仙 | 25.62港仙 | [Consolidated Statement of Financial Position](index=31&type=section&id=%E7%B6%9C%E5%90%88%E8%B3%87%E7%94%A2%E8%B2%A0%E5%82%B5%E8%A1%A8) As of June 30, 2025, the Group's total assets were **HKD 82.679 billion**, with net assets of **HKD 17.726 billion**; total current assets amounted to **HKD 69.442 billion**, including **HKD 20.013 billion** in inventories and **HKD 11.442 billion** in cash and cash equivalents, while total current liabilities were **HKD 63.337 billion**, with trade payables at **HKD 31.075 billion** Consolidated Statement of Financial Position (As of June 30) | Metric | June 30, 2025 (Thousand HKD) | December 31, 2024 (Thousand HKD) | | :--- | :--- | :--- | | Total Non-Current Assets | 13,236,644 | 11,833,477 | | Total Current Assets | 69,442,484 | 64,533,927 | | Inventories | 20,012,987 | 15,288,555 | | Trade Receivables | 21,826,741 | 22,332,884 | | Cash and Cash Equivalents | 11,441,935 | 8,771,691 | | Total Current Liabilities | 63,336,670 | 57,128,936 | | Trade Payables | 31,075,322 | 26,646,451 | | Net Assets | 17,725,820 | 17,676,418 | [Notes](index=33&type=section&id=%E9%99%84%E8%A8%BB) This section provides detailed notes to the interim condensed consolidated financial statements, covering basis of preparation, changes in accounting policies, new HKFRSs not yet effective, operating segment information, revenue, finance costs, profit before tax, income tax, dividends, earnings per share, goodwill, trade receivables, trade payables, interest-bearing bank and other borrowings, share capital, and restatement of comparative amounts [1. Basis of Preparation](index=33&type=section&id=1.%20%E7%B7%A8%E8%A3%BD%E5%9F%BA%E6%BA%96) These unaudited interim condensed consolidated financial statements are prepared in accordance with Hong Kong Accounting Standard 34 and Appendix D2 of the Listing Rules, using the historical cost convention and presented in Hong Kong dollars - These unaudited interim condensed consolidated financial statements are prepared in accordance with Hong Kong Accounting Standard **34** and the disclosure requirements of Appendix **D2** of the Listing Rules issued by the Hong Kong Institute of Certified Public Accountants[98](index=98&type=chunk) - Prepared under the historical cost convention, except for derivative financial instruments and certain financial assets and equity investments which are measured at fair value[98](index=98&type=chunk) - Presented in Hong Kong dollars, with all values rounded to the nearest thousand[98](index=98&type=chunk) [2. Changes in Accounting Policies and Disclosures](index=33&type=section&id=2.%20%E6%9C%83%E8%A8%88%E6%94%BF%E7%AD%96%E5%8F%8A%E6%8A%AB%E9%9C%B2%E7%9A%84%E8%AE%8A%E5%8B%95) The financial information for the current period first adopted HKAS 21 amendment "Lack of Exchangeability," which clarifies currency exchange assessment and spot exchange rate estimation methods, but had no significant impact on the interim condensed consolidated financial information - First adopted the HKAS **21** amendment "Lack of Exchangeability"[99](index=99&type=chunk)[100](index=100&type=chunk) - These amendments will not have any significant impact on the interim condensed consolidated financial information[100](index=100&type=chunk) [3. New and Revised HKFRSs Issued But Not Yet Effective](index=34&type=section&id=3.%20%E5%B7%B2%E9%A0%92%E5%B8%83%E4%BD%86%E5%B0%9A%E6%9C%AA%E7%94%9F%E6%95%88%E7%9A%84%E9%A6%99%E6%B8%AF%E8%B2%A1%E5%8B%99%E5%A0%B1%E5%91%8A%E6%BA%96%E5%88%99%E6%9C%83%E8%A8%88%E6%BA%96%E5%88%99) The Group has not yet applied several new and revised HKFRSs issued but not yet effective, including HKFRS 18, 19, and amendments to HKFRS 9 and 7, and is currently assessing the impact of their initial application - The Group has not applied the following new and revised HKFRSs issued but not yet effective in these unaudited interim condensed financial statements[101](index=101&type=chunk) - Including HKFRS **18**, HKFRS **19**, and amendments to HKFRS **9** and HKFRS **7**[102](index=102&type=chunk) - The Group is assessing the impact of the initial application of these new and revised HKFRSs[102](index=102&type=chunk) [4. Operating Segment Information](index=34&type=section&id=4.%20%E7%B6%93%E7%87%9F%E5%88%86%E9%A1%9E%E8%B3%87%E6%96%99) The Group is organized into six reportable operating segments based on regional TV categories and other product types: TCL TV (China Market and International Market), Internet Business, Smart Mobile, Connected Devices and Services, All-Category Marketing, Photovoltaic Business, and Smart Commercial Display, Smart Home and Other Businesses; segment performance is assessed based on each segment's revenue and gross profit - The Group is organized into six reportable operating segments: TCL TV (China Market and International Market), Internet Business, Smart Mobile, Connected Devices and Services, All-Category Marketing, Photovoltaic Business, and Smart Commercial Display, Smart Home and Other Businesses[105](index=105&type=chunk) - Segment performance is assessed based on each segment's revenue and gross profit[103](index=103&type=chunk) Operating Segment Revenue and Gross Profit (Six Months Ended June 30) | Segment | 2025 Revenue (Thousand HKD) | 2024 Revenue (Thousand HKD) | 2025 Gross Profit (Thousand HKD) | 2024 Gross Profit (Thousand HKD) | | :--- | :--- | :--- | :--- | :--- | | TCL TV - China Market | 8,720,454 | 8,353,344 | 1,689,451 | 1,482,275 | | TCL TV - International Market | 19,631,732 | 17,560,766 | 2,824,399 | 2,515,916 | | Internet Business | 1,457,871 | 1,212,056 | 793,226 | 653,093 | | Smart Mobile, Connected Devices and Services | 5,170,279 | 4,410,323 | 790,447 | 756,258 | | All-Category Marketing | 7,842,078 | 7,752,507 | 1,089,555 | 1,161,976 | | Photovoltaic Business | 11,136,594 | 5,269,368 | 1,073,390 | 540,859 | | Smart Commercial Display, Smart Home and Other Businesses | 818,041 | 935,256 | 105,483 | 102,482 | | **Consolidated** | **54,777,049** | **45,493,620** | **8,365,951** | **7,212,859** | [5. Revenue](index=36&type=section&id=5.%20%E6%94%B6%E5%85%A5_%E9%99%84%E8%A8%BB) This note provides a detailed analysis of revenue from contracts with customers, categorized by type of goods or services, geographical market, and timing of revenue recognition, with sales of goods being the primary revenue source, Mainland China as the largest geographical market, and most revenue recognized at a point in time Disaggregated Revenue Information from Contracts with Customers (Six Months Ended June 30, 2025) | Category | TV and Others (Thousand HKD) | Internet Business (Thousand HKD) | Total (Thousand HKD) | | :--- | :--- | :--- | :--- | | **Type of goods or services** | | | | | Sales of goods | 52,664,558 | 92,953 | 52,757,511 | | Construction services | 654,620 | – | 654,620 | | Video-on-demand services | – | 301,099 | 301,099 | | Advertising, vertical applications and other new businesses | – | 1,063,819 | 1,063,819 | | **Total revenue from contracts with customers** | **53,319,178** | **1,457,871** | **54,777,049** | | **Geographical markets** | | | | | Mainland China | 24,171,944 | 957,223 | 25,129,167 | | Europe | 6,691,562 | 77,395 | 6,768,957 | | North America | 8,459,101 | 211,355 | 8,670,456 | | Emerging markets | 13,996,571 | 211,898 | 14,208,469 | | **Total revenue from contracts with customers** | **53,319,178** | **1,457,871** | **54,777,049** | | **Timing of revenue recognition** | | | | | Transfer of goods at a point in time | 52,664,558 | 92,953 | 52,757,511 | | Services transferred over time | 654,620 | 301,099 | 955,719 | | Services transferred at a point in time | – | 1,063,819 | 1,063,819 | | **Total revenue from contracts with customers** | **53,319,178** | **1,457,871** | **54,777,049** | [6. Finance Costs](index=38&type=section&id=6.%20%E8%9E%8D%E8%B3%87%E6%88%90%E6%9C%AC_%E9%99%84%E8%A8%BB) This note details the components of finance costs, primarily comprising interest on bank/factoring loans and bill discounting, totaling **HKD 392 million**, a decrease from the same period last year Finance Costs (Six Months Ended June 30) | Metric | 2025 (Thousand HKD) | 2024 (Thousand HKD) | | :--- | :--- | :--- | | Interest on bank/factoring loans and bill discounting | 378,176 | 497,732 | | Interest on deposits and loans from companies controlled by TCL Industries Holdings | 3,861 | 15,187 | | Interest on deposits from associate companies of TCL Industries Holdings | 72 | – | | Interest expense on lease liabilities | 10,125 | 8,439 | | **Total finance costs for the period** | **392,234** | **521,358** | [7. Profit Before Tax](index=38&type=section&id=7.%20%E9%99%A4%E7%A8%85%E5%89%8D%E5%88%A9%E6%BD%A4_%E9%99%84%E8%A8%BB) This note details expenses deducted from profit before tax, including depreciation of property, plant and equipment, amortization of other intangible assets, and share-based employee benefits, notably with no goodwill impairment recognized in H1 2025, compared to **HKD 126 million** in H1 2024 Items Deducted from Profit Before Tax (Six Months Ended June 30) | Metric | 2025 (Thousand HKD) | 2024 (Thousand HKD) | | :--- | :--- | :--- | | Depreciation of property, plant and equipment | 203,617 | 188,058 | | Depreciation of investment properties | 5,942 | 7,450 | | Depreciation of right-of-use assets | 93,278 | 89,743 | | Impairment of goodwill | – | 126,040 | | Amortisation of other intangible assets | 276,047 | 241,031 | | Share-based employee benefits under TCL Share Award Scheme | 101,389 | 44,645 | [8. Income Tax Expense](index=39&type=section&id=8.%20%E6%89%80%E5%BE%97%E7%A8%85_%E9%99%84%E8%A8%BB) This note provides a detailed analysis of income tax expense, including current tax expense for Hong Kong and other regions, under-provision in prior periods, and deferred tax, with total tax expense at **HKD 373 million** and an effective tax rate of **26.3%** Income Tax Expense (Six Months Ended June 30) | Metric | 2025 (Thousand HKD) | 2024 (Thousand HKD) | | :--- | :--- | :--- | | Current period – Hong Kong current tax expense | 145,912 | 2,640 | | Current period – Other regions current tax expense | 315,478 | 218,749 | | Under-provision in prior periods | 58,633 | 14,429 | | Deferred | (146,827) | (6,936) | | **Total tax expense for the period** | **373,196** | **228,882** | - Hong Kong profits tax is provided at a rate of **16.5%**, while other regions are calculated at local tax rates[112](index=112&type=chunk) [9. Dividends](index=39&type=section&id=9.%20%E8%82%A1%E6%81%AF_%E9%99%84%E8%A8%BB) The Board of Directors has resolved not to declare any dividends for the six months ended June 30, 2025, consistent with the same period in 2024 - The Board of Directors has resolved not to declare any dividends for the six months ended **June 30, 2025** (June 30, 2024: nil)[114](index=114&type=chunk) [10. Earnings Per Share Attributable to Ordinary Equity Holders of the Parent](index=40&type=section&id=10.%20%E6%AF%8D%E5%85%AC%E5%8F%B8%E6%99%AE%E9%80%9A%E8%82%A1%E8%82%A1%E6%9D%B1%E6%87%89%E4%BD%94%E6%AF%8F%E8%82%A1%E7%9B%88%E5%88%A9) This note details the calculation of basic and diluted earnings per share; in H1 2025, profit attributable to ordinary equity holders of the parent was **HKD 1.090 billion**, with basic earnings per share at **45.14 HK cents** and diluted earnings per share at **43.04 HK cents** Earnings Per Share Calculation (Six Months Ended June 30) | Metric | 2025 (Thousand HKD/Number of Shares) | 2024 (Thousand HKD/Number of Shares) | | :--- | :--- | :--- | | Profit attributable to ordinary equity holders of the parent used for calculating basic and diluted earnings per share | 1,090,419 | 649,920 | | Weighted average number of ordinary shares outstanding during the period for calculating basic earnings per share, less shares held for TCL Share Award Scheme | 2,415,542,163 | 2,434,812,243 | | Dilutive effect - weighted average number of award shares | 117,713,978 | 102,298,251 | | Weighted average number of ordinary shares outstanding during the period for calculating diluted earnings per share | 2,533,256,141 | 2,537,110,494 | [11. Goodwill](index=41&type=section&id=11.%20%E5%95%86%E8%AD%BD) As of June 30, 2025, the net carrying amount of goodwill was **HKD 3.167 billion**, an increase from the beginning of the year, primarily due to the recognition of provisional goodwill of **HKD 168 million** from subsidiary acquisitions during the period Movement in Goodwill (As of June 30, 2025) | Metric | Thousand HKD | | :--- | :--- | | Net carrying amount as at January 1, 2025 | 2,947,380 | | Acquisition of subsidiaries | 168,103 | | Exchange adjustments | 51,563 | | Net carrying amount as at June 30, 2025 (unaudited) | 3,167,046 | - Provisional goodwill of **HKD 168 million** was recognized, as the fair value assessment of identifiable assets and liabilities of subsidiaries acquired during the period has not yet been finalized[117](index=117&type=chunk) [12. Trade Receivables](index=41&type=section&id=12.%20%E6%87%89%E6%94%B6%E8%B2%BF%E6%98%93%E8%B3%87%E6%AC%BE) As of June 30, 2025, net trade receivables amounted to **HKD 21.827 billion**, a slight decrease from year-end 2024, with credit terms typically ranging from **30 to 180 days**, some receivables held as collateral, and impairment provisions increasing to **HKD 288 million** Ageing Analysis of Trade Receivables (By Invoice Date) | Ageing | June 30, 2025 (Thousand HKD) | December 31, 2024 (Thousand HKD) | | :--- | :--- | :--- | | Current to 90 days | 15,642,677 | 16,595,138 | | 91 to 180 days | 2,690,791 | 2,857,168 | | 181 to 365 days | 2,096,588 | 2,059,204 | | Over 365 days | 1,684,448 | 1,088,325 | | **Total** | **22,114,504** | **22,599,835** | | Impairment allowance | (287,763) | (266,951) | | **Net** | **21,826,741** | **22,332,884** | - Most of the Group's sales in Mainland China are settled by cash on delivery or bank-guaranteed commercial bills, with credit terms of **30 to 90 days**; for overseas sales, settlement is generally required using letters of credit with terms of **90 to 180 days**[118](index=118&type=chunk) - Approximately **HKD 548,000** of trade receivables have been pledged as collateral for the Group's bank loans[119](index=119&type=chunk) [13. Trade Payables](index=42&type=section&id=13.%20%E6%87%89%E4%BB%98%E8%B2%BF%E6%98%93%E8%B3%87%E6%AC%BE) As of June 30, 2025, total trade payables amounted to **HKD 31.075 billion**, an increase from year-end 2024; trade payables are interest-free and typically settled within credit terms ranging from **30 to 120 days** Ageing Analysis of Trade Payables (By Invoice Date) | Ageing | June 30, 2025 (Thousand HKD) | December 31, 2024 (Thousand HKD) | | :--- | :--- | :--- | | Current to 90 days | 25,007,522 | 21,779,822 | | 91 to 180 days | 4,917,774 | 3,852,823 | | 181 to 365 days | 932,785 | 860,845 | | Over 365 days | 217,241 | 152,961 | | **Total** | **31,075,322** | **26,646,451** | - Trade payables are interest-free and typically settled within credit terms ranging from **30 to 120 days**[121](index=121&type=chunk) [14. Interest-Bearing Bank and Other Borrowings](index=43&type=section&id=14.%20%E8%A8%88%E6%81%AF%E9%8A%80%E8%A1%8C%E8%B2%B8%E6%AC%BE%E5%8F%8A%E5%85%B6%E4%BB%96%E8%B2%B8%E6%AC%BE) As of June 30, 2025, total interest-bearing bank and other borrowings amounted to **HKD 5.805 billion**, with most being current and unsecured loans; TCL Industries Holdings provided guarantees for certain of the Group's bank loans totaling **HKD 2.915 billion** Interest-Bearing Bank and Other Borrowings (As of June 30) | Category | June 30, 2025 (Thousand HKD) | December 31, 2024 (Thousand HKD) | | :--- | :--- | :--- | | **Current** | | | | Bank loans – unsecured | 5,350,612 | 3,755,295 | | Bank loans – secured | 209,472 | 400,318 | | Bank advances as consideration for factored trade receivables | 2,612 | 11,927 | | Loans from a company controlled by TCL Industries Holdings | 20,089 | 4,859 | | **Total Current** | **5,582,785** | **4,172,399** | | **Non-current** | | | | Bank loans – unsecured | 218,771 | 434,423 | | Bank loans – secured | 3,168 | 3,237 | | **Total Non-Current** | **221,939** | **437,660** | | **Total** | **5,804,724** | **4,610,059** | - TCL Industries Holdings has separately guaranteed certain of the Group's bank loans, with a guaranteed amount of **HKD 2.915 billion**[124](index=124&type=chunk) - Certain of the Group's bank loans are secured by debt instruments measured at amortized cost, inventories, future receivables, and trade receivables[124](index=124&type=chunk) [15. Share Capital](index=44&type=section&id=15.%20%E8%82%A1%E6%9C%AC) As of June 30, 2025, the Company's issued and fully paid share capital was **HKD 2.521 billion**, consistent with December 31, 2024 Share Capital (As of June 30) | Metric | June 30, 2025 (Thousand HKD) | December 31, 2024 (Thousand HKD) | | :--- | :--- | :--- | | 3,000,000,000 shares of HKD 1.00 each (authorized) | 3,000,000 | 3,000,000 | | 2,520,935,155 shares of HKD 1.00 each (issued and fully paid) | 2,520,935 | 2,520,935 | [16. Comparative Amounts](index=44&type=section&id=16.%20%E6%AF%94%E8%BC%83%E9%87%91%E9%A1%8D) Certain comparative amounts have been reclassified to conform with the current period's presentation and disclosure - Certain comparative amounts have been reclassified to conform with the current period's presentation and disclosure[124](index=124&type=chunk) [Purchase, Sale or Redemption of Shares](index=45&type=section&id=%E8%B3%BC%E8%B2%B7%E3%80%81%E5%87%BA%E5%94%AE%E6%88%96%E8%B4%96%E5%9B%9E%E8%82%A1%E4%BB%BD) During the six months ended June 30, 2025, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities, including treasury shares - During the six months ended **June 30, 2025**, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities (including treasury shares)[125](index=125&type=chunk) [Interim Dividend](index=45&type=section&id=%E4%B8%AD%E6%9C%9F%E8%82%A1%E6%81%AF) The Board of Directors has resolved not to declare any dividends for the six months ended June 30, 2025, consistent with the same period in 2024 - The Board of Directors has resolved not to declare any dividends for the six months ended **June 30, 2025** (June 30, 2024: nil)[126](index=126&type=chunk) [Corporate Governance](index=45&type=section&id=%E4%BC%81%E6%A5%AD%E6%B2%BB%E7%90%86) The Company has established and will continuously optimize its risk management and internal control systems, with management regularly reporting corporate governance status to the Board and Audit Committee - The Company has established and will continuously optimize its risk management and internal control systems, with management regularly reporting corporate governance status to the Board and Audit Committee[127](index=127&type=chunk) - The Company has complied with the code provisions of the Corporate Governance Code during the six months ended **June 30, 2025**[128](index=128&type=chunk) - The Audit Committee, together with the Company's management, has reviewed the Group's unaudited interim condensed consolidated financial statements for the six months ended **June 30, 2025**[129](index=129&type=chunk) [Standa

Key Points - The top three companies with net inflows from southbound funds are Xinda Biopharmaceutical (01801) with 835 million, China Life (02628) with 403 million, and AIA Insurance (01299) with 373 million [1][2] - The top three companies with net outflows are the Tracker Fund of Hong Kong (02800) with -6.679 billion, Hang Seng China Enterprises (02828) with -2.584 billion, and Anta Sports (02020) with -782 million [1][2] - In terms of net inflow ratio, Canggang Railway (02169) leads with 66.05%, followed by Bosideng (03998) with 49.50%, and Zhengzhou Bank (06196) with 48.61% [1][2] - The companies with the highest net outflow ratios include Skyworth Group (00751) at -52.19%, Anta Sports (02020) at -50.20%, and Ruipu Lanjun (00666) at -44.79% [1][2] Net Inflow Rankings - The top ten companies by net inflow include: - Xinda Biopharmaceutical (01801) with 835 million and a closing price of 95.000 (+8.82%) [2] - China Life (02628) with 403 million and a closing price of 22.800 (+0.71%) [2] - AIA Insurance (01299) with 373 million and a closing price of 76.400 (+3.03%) [2] - Other notable companies include Ideal Automotive (02015) with 365 million and a closing price of 97.150 (+3.30%) [2] Net Outflow Rankings - The top ten companies by net outflow include: - Tracker Fund of Hong Kong (02800) with -6.679 billion and a closing price of 26.080 (+2.35%) [2] - Hang Seng China Enterprises (02828) with -2.584 billion and a closing price of 93.760 (+2.76%) [2] - Anta Sports (02020) with -782 million and a closing price of 90.000 (+0.22%) [2] - Other significant outflows include Alibaba (09988) with -267 million and a closing price of 123.700 (+6.09%) [2] Net Inflow Ratio Rankings - The top companies by net inflow ratio include: - Canggang Railway (02169) with 66.05% and a closing price of 1.310 (-0.76%) [3] - Bosideng (03998) with 49.50% and a closing price of 4.600 (+0.66%) [3] - Zhengzhou Bank (06196) with 48.61% and a closing price of 1.410 (-2.08%) [3] Net Outflow Ratio Rankings - The top companies by net outflow ratio include: - Skyworth Group (00751) with -52.19% and a closing price of 3.260 (+1.24%) [3] - Anta Sports (02020) with -50.20% and a closing price of 90.000 (+0.22%) [3] - Ruipu Lanjun (00666) with -44.79% and a closing price of 12.160 (+5.28%) [3]

Summary of TCL Electronics Conference Call Industry Overview - The black electronics industry is experiencing an improved competitive landscape, primarily due to Xiaomi shifting its strategic focus towards white goods and automotive sectors, which has alleviated competitive pressure in the black electronics market [2][7] - The penetration rate of Mini LED TVs is rapidly increasing, expected to exceed 30% by the end of 2024, driven by cost reductions in the supply chain and government subsidy policies that lower consumer purchase costs, significantly enhancing the profitability of TV brands [2][9] - Mini LED TVs have a profit margin close to 10%, compared to only 2-3% for regular TVs, indicating that the rise in Mini LED penetration directly improves the profitability of companies like TCL Electronics and Hisense [2][10] - Since Q3 2024, panel prices have weakened and stabilized, easing cost pressures for TV brands and helping to improve the competitive landscape and release new product benefits [2][11] Company Performance and Strategy - TCL Electronics is ranked among the top three global TV brands, enhancing its brand influence and market share through partnerships with major sports events like the NFL and the European Cup, as well as aggressive expansion in Southeast Asian markets [2][12] - The company expects to achieve a profit of HKD 2.33 billion in 2025, representing a 45% year-on-year increase, with a current market capitalization of approximately HKD 24 billion, reflecting a valuation of less than 11 times earnings, indicating significant investment value [4][13] - TCL's business structure consists of three main segments: display business (over 60% share), innovative business, and internet business, with the display segment being the primary profit contributor [4][5] Financial Projections and Valuation - The company anticipates a profit growth of 45% for the full year 2025, with a projected profit of HKD 2.33 billion, up from HKD 1.61 billion in 2024 [4][13] - The current valuation is considered reasonable, and the company continues to be recommended for investment [13][14] Competitive Dynamics - The competitive dynamics in the black electronics sector have improved, particularly with Xiaomi's reduced aggressiveness in new product launches and its focus on maintaining hardware profit margins [7][8] - The introduction of new products, particularly Mini LED TVs, has positively impacted brand profitability [8] Additional Insights - The internet business primarily involves software for TV sales, with revenue generated from advertising and partnerships in both domestic and international markets [5] - TCL's innovative business includes solar energy and smart home products, contributing to revenue diversification [5] This summary encapsulates the key points from the conference call, highlighting the industry's dynamics, TCL Electronics' strategic positioning, financial outlook, and competitive landscape.

Investment Rating - The report maintains a recommendation for the home appliance industry [2] Core Viewpoints - The report analyzes the impact of the USMCA (United States-Mexico-Canada Agreement) and the potential risks posed by the U.S. government's tariff policies on Chinese home appliance companies operating in Mexico [6][8] - It emphasizes that the concerns regarding the USMCA's risks are primarily focused on two aspects: the potential for the U.S. government to invoke national security clauses and the upcoming review of the agreement in 2026 [6][8] - The report suggests that the short-term impact of the USMCA's implementation is limited, as many leading Chinese home appliance companies have already established significant production capacities in Mexico that comply with the agreement's rules [6][7] Summary by Sections Industry Basic Data - The home appliance industry consists of 80 listed companies with a total market value of 185.1 billion yuan and a circulating market value of 165.1 billion yuan [2] Relative Index Performance - The absolute performance of the industry over the past 1 month, 6 months, and 12 months is 0.3%, 1.1%, and 21.4% respectively, while the relative performance is -3.2%, -5.6%, and 3.0% [3] USMCA Agreement Analysis - The USMCA is designed to encourage regional production and supply chain integration, with specific rules for determining the origin of products [12][14] - The agreement provides trade benefits only to goods certified as originating from the USMCA region [12][14] - The report outlines two potential scenarios for the future of the USMCA: the continuation of the current tariff framework and the tightening of origin certification rules [55][58] Company Strategies - Leading Chinese home appliance companies like Haier, Midea, Hisense, and TCL have established substantial production capacities in Mexico, which allows them to mitigate tariff risks effectively [6][7][56] - The report highlights that these companies have the capability to meet the USMCA's origin certification requirements, thus reducing potential tariff impacts [6][7][57] - The white goods sector, particularly Haier, is expected to strengthen its market position in North America due to its localized production and supply chain flexibility [7][60] Market Dynamics - The report notes that while black goods manufacturers face challenges due to the concentration of LCD panel supply chains in Asia, they can still expand their market share through product upgrades [7][61] - The overall competitive landscape for Chinese home appliance companies has shifted from relying on cost advantages to focusing on brand development, operational efficiency, and product innovation [60]

TCL Electronics Conference Call Summary Industry and Company Overview - **Company**: TCL Electronics - **Industry**: Display Technology and Consumer Electronics Key Financial Performance - Net profit rebounded to HKD 1.76 billion in 2024 after a decline from 2020 to 2022 [2][3] - Operating profit margin is approximately 1.77%, while gross margin is around 15.6% [2][3] - Revenue growth from HKD 50 billion in 2020 to nearly HKD 100 billion in 2024, with a compound annual growth rate (CAGR) of about 14.16% [3] Display Business Insights - Display business revenue reached HKD 69.4 billion in 2024, driven by large-size products [2][3] - Retail sales increased by 23.6% year-on-year, with shipment volume rising by 14.8% to 29 million units [2][4] - International market shipments grew by 17.6%, with revenue increasing by approximately 26% [4] Market Share and Competition - In the Chinese TV market, market share is stratified, with Hisense leading, followed by TCL and Xiaomi [2][5] - Demand for large screens is increasing, with 63% of demand for TVs over 75 inches expected by Q1 2025 [2][5] - TCL's Mini LED technology is a key competitive response to market demands [2][8] Product Strategy - TCL employs a multi-brand strategy (TCL, Lenovo, Thunderbird) across various price segments [6][7] - The V series targets cost-effectiveness, the T series is positioned in the mid-to-high-end market, and the C series serves as the flagship line [6][7] - Recent product launches include low and mid-range Mini LED products to compete effectively [5][6] Mini LED Technology Impact - Mini LED technology shows significant potential for global market breakthroughs [8] - Brands are competing on price and technology to enhance market share and meet consumer demands for quality and performance [8] International Market Expansion - The Chinese Mini LED TV market is rapidly growing, supported by government subsidies [9] - North American market competition is intense, with Samsung and LG holding 30%-40% market share [10] - Chinese companies, including TCL, are gaining market share in Europe, increasing from 16% to approximately 20% from 2022 to 2024 [10] Future Revenue Projections - Projected display business revenues for 2025-2027 are HKD 78.7 billion, HKD 85.6 billion, and HKD 91.5 billion, respectively [11][12] - Innovation business, particularly in solar energy, is expected to grow significantly, with revenues projected at HKD 32.7 billion, HKD 41.6 billion, and HKD 52 billion from 2025 to 2027 [12] Key Observations for Future Development - Key observation points include product performance in the fall and the potential for channel expansion in Europe and North America [13] - Sustained performance in these areas could position TCL as a global brand in the long term [13]

TCL Electronics Conference Call Summary Industry Overview - TCL Electronics has shown strong performance in the global television market since 2024, consistently exceeding expectations and becoming a leading domestic black electrical brand in international markets, surpassing Korean and Japanese brands in global TV shipments [2][4] - The company is expected to further increase its market share in the high-end segment [2] Key Points and Arguments - **Brand Enhancement and Technological Innovation**: TCL has significantly improved brand recognition in North America since 2015, leveraging partnerships with local sports events for promotion. The introduction of Mini LED technology has provided domestic brands with opportunities to compete in the high-end market, achieving a penetration rate of over single digits in North America and Europe by the first half of 2025 [2][6] - **Growth Drivers**: Short-term growth is driven by channel breakthroughs and expansion in emerging markets, particularly in Europe, where successful channel establishment has led to significant synergistic effects [2][7][8] - **Product Structure Optimization**: TCL has optimized its product structure through Mini LED technology, enhancing shipment and profitability in North America due to adjusted channel structures. The company has also improved cost control efficiency under the leadership of CEO Du Juan, aiming for dual improvements in valuation and profitability through stock incentive goals [2][10] - **Business Segments**: TCL Electronics' main business includes televisions (approximately 70% of revenue), large and small-sized displays, smart commercial displays, and internet-based services. The television segment has seen a growth rate of about 10% over the past two years [11] Additional Important Insights - **337 Investigation Impact**: The 337 investigation initiated by the U.S. Trade Commission on August 4, 2025, regarding intellectual property infringement is not expected to have a substantial impact on TCL's operations in North America, as similar cases have often ended in withdrawal or settlement [3] - **Future Growth Logic**: TCL's future growth is anticipated to come from simultaneous increases in market share and profits, along with adjustments in channel structures to enhance profit margins. The global market share is currently over 10%, with significant potential for growth in Europe, Latin America, and the Middle East [14] - **Competitive Advantages**: TCL's core advantages stem from effective cost control, benefiting from ongoing investments in high-generation panel production lines. Domestic manufacturers' TV panel market share exceeded 60% in 2023 and is expected to approach 80% in 2024 [15] - **Mini LED Technology**: The development of Mini LED technology has shown a rapid increase in penetration compared to OLED, with advantages in cost and longevity, making it more suitable for long-term use in televisions [16][17] - **Profitability through Cost Efficiency**: TCL has optimized its overseas marketing structure, leading to improved expense ratios and contributing positively to profitability [20] - **2025 Performance and Outlook**: In the first half of 2025, TCL Electronics is expected to see a revenue growth rate of approximately 20%, with the television segment growing between 15% and 20%. The company anticipates continued growth momentum in the second half of 2025, supported by domestic policies and Mini LED penetration [21][22]