TCL电子(01070) - 2025 - 中期业绩

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] Business Review and Outlook Overview 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] - 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] - 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] 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] - 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] - 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][21] - 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] Display Business 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] - The gross profit margin of the large-screen display business increased by 0.5 percentage points year-on-year to 15.9%[16] - TCL Mini LED TV global shipments surged 176.1% year-on-year to 1.37 million units, ranking first globally[16] Large-Screen Display 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] - TCL Mini LED TV global shipment market share increased by 4.1 percentage points year-on-year to 28.7%, ranking first globally[25] China Market 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] - 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] - 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] International Market 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] - 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] - TCL TV retail volume consistently ranked among the top three in nearly twenty countries globally[29] North America Market 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] - 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] - 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] Europe Market 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] - 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] - 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] Emerging Markets 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] - 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] Small and Medium-Sized Display 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] - 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] - 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] Smart Commercial Display 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] - Smart commercial display business revenue increased 9.4% year-on-year to HKD 504 million, with gross profit reaching HKD 56 million[38] - 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] Internet Business 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] - 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] China Market 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] - Ultra-high-definition services were launched on TV terminals, with UHD content duration exceeding 30,000 hours[40] International Market 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] - TCL Channel completed a comprehensive upgrade, significantly improving content distribution efficiency and achieving content localization in multiple countries[42] - As of June 30, 2025, TCL Channel's cumulative user base exceeded 39.3 million[42] Innovative Businesses 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] - 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] Photovoltaic Business 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][45] - 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] - Steadily advanced overseas business development, actively explored integrated solar-storage solutions, and achieved product and business launches in Europe[44] All-Category Marketing 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] - Air conditioner revenue accounted for 82.2%, and refrigeration/washing product revenue accounted for 17.8%[46] - 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] Smart Connectivity and Smart Home 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] - 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][50] - 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] Outlook 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] - Will continue to deepen the "mid-to-high-end + globalization" dual-driven strategy, increasing investment in core technologies to build technological barriers[51] - 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] - 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] Management Discussion and Analysis Comparison of H1 2025 with H1 2024 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 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] 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) 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] - Large-screen display business revenue increased 9.4% year-on-year to HKD 28.352 billion[57] - Small and medium-sized business revenue increased 21.3% year-on-year to HKD 4.563 billion[57] - Smart commercial display business revenue increased 9.4% year-on-year to HKD 504 million[57] Internet Business (Revenue) 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] - Primarily benefiting from continuous breakthroughs in overseas internet business monetization models and significant improvements in content development, product experience, and commercialization capabilities[58] Innovative Businesses (Revenue) 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] - Photovoltaic business revenue increased 111.3% to HKD 11.137 billion[59] Gross Profit and Gross Profit Margin 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] - The gross profit margin for H1 2025 was 15.3%, a 0.6 percentage point decrease year-on-year compared to H1 2024[60] - The decrease in gross profit margin was primarily due to the increased revenue contribution from the relatively lower-margin photovoltaic business[60] Display Business (Gross Profit Margin) 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] - The gross profit margin for the large-screen display business increased by 0.5 percentage points year-on-year to 15.9%[61] Internet Business (Gross Profit Margin) 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] - Primarily benefiting from the Group's enhanced overseas internet commercialization capabilities, leading to stronger monetization[62] Innovative Businesses (Gross Profit Margin) 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] - Primarily due to the increased revenue contribution from the relatively lower-margin photovoltaic business[63] Other Income and Gains 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] - Primarily due to reduced interest income resulting from a decrease in the Group's wealth management scale[64] Selling and Distribution Expenses 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] - Primarily due to the Group's strategic increase in brand marketing and product promotion investments[65] Administrative Expenses 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] - 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] Research and Development Expenses 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] - Primarily due to the Group's continued increased investment in high-end display technologies and AI[67] Other Operating Expenses 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] - Primarily because the Group recognized goodwill impairment in H1 2024[68] Net Impairment Loss on Financial and Contract Assets 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] - Primarily due to an increase in bad debt provisions for trade receivables[69] Finance Costs 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] - Primarily due to reduced interest expenses from bill discounting and factoring trade receivables during the reporting period[70] Share of Profits and Losses - Joint Ventures and Associates 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] - Primarily due to improved performance and increased profitability of the Group's associate companies[71] Profit Before Tax 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] - 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] Income Tax Expense 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] - 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] Profit for the Period and Net Profit Attributable to Owners 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] - 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] - 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] Non-HKFRS Measures: Adjusted Net Profit Attributable to Owners 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] 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 Major Investments, Acquisitions and Disposals 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] - There were no significant acquisitions or disposals of subsidiaries, associates, or joint ventures during the six months ended June 30, 2025[80] Future 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 - Except as disclosed in this announcement, the Group currently has no specific plans for material investments or capital assets[81] Liquidity and Financial Resources 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] - As of June 30, 2025, the Group's gearing ratio was 0.0%[83] Pledged Assets 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 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] - 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] Pending Litigation 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] Foreign Currency Exchange Risk 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] - Emphasizes the importance of conducting trade, investments, and borrowings in functional currencies to achieve natural hedging effects[88] - For sound financial management purposes, the Group does not engage in any high-risk derivative instrument transactions or leveraged foreign exchange contracts[88] Employees and Remuneration Policy 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] - The Group provides competitive benefits, performance bonuses based on Group performance and individual employee contributions, and continuous training and development programs[89] - On April 9, 2025, 91,497,900 award shares were granted under the 2023 Share Award Scheme[90] Financial Information Consolidated Statement of Profit or Loss and Other Comprehensive Income 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 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 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 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] - 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] - Presented in Hong Kong dollars, with all values rounded to the nearest thousand[98] 2. Changes in Accounting Policies and Disclosures 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][100] - These amendments will not have any significant impact on the interim condensed consolidated financial information[100] 3. New and Revised HKFRSs Issued But Not Yet Effective 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] - Including HKFRS 18, HKFRS 19, and amendments to HKFRS 9 and HKFRS 7[102] - The Group is assessing the impact of the initial application of these new and revised HKFRSs[102] 4. Operating Segment Information 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] - Segment performance is assessed based on each segment's revenue and gross profit[103] 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 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 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 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 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] 9. Dividends 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] 10. Earnings Per Share Attributable to Ordinary Equity Holders of the Parent 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 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] 12. Trade Receivables 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] - Approximately HKD 548,000 of trade receivables have been pledged as collateral for the Group's bank loans[119] 13. Trade Payables 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] 14. Interest-Bearing Bank and Other Borrowings 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] - Certain of the Group's bank loans are secured by debt instruments measured at amortized cost, inventories, future receivables, and trade receivables[124] 15. Share Capital 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 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] Purchase, Sale or Redemption of 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 - 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] Interim Dividend 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] Corporate Governance 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] - The Company has complied with the code provisions of the Corporate Governance Code during the six months ended June 30, 2025[128] - 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] [Standa