Core Viewpoint - TCL Electronics has reported impressive mid-term performance for the first half of 2025, with revenue reaching HKD 54.78 billion, a year-on-year increase of 20.4%, and adjusted net profit attributable to shareholders soaring by 62.0% to HKD 1.06 billion, indicating a significant improvement in operational quality and long-term growth potential [1][2]. Industry Outlook - The display industry is transitioning from a "slow business" to a more innovative and profitable sector, driven by a wave of consumer demand for smart, immersive viewing experiences, particularly for Mini LED televisions [2][3]. - The Mini LED television penetration rate reached 34% in Q2 2025, up nearly five percentage points from Q4 2024, indicating a robust demand and supply cycle that enhances profitability [2]. Company Performance - TCL Electronics' display business revenue for the first half of 2025 was HKD 33.41 billion, a 10.9% increase, with large-size display revenue growing by 9.4% to HKD 28.35 billion. The company maintained its position as one of the top two global television manufacturers, with a shipment of 13.46 million units, a 7.6% increase [4][5]. - The company has led innovations in Mini LED technology, launching the industry's first fourth-generation LCD television, enhancing user experience with features like a 100% full-screen display [5]. Competitive Landscape - The competitive dynamics in the industry are shifting from chaotic price wars to a more consolidated environment among major players, leading to improved industry profit margins [2][3]. - The exit of major panel manufacturers from the large-size LCD market has stabilized panel prices, allowing downstream manufacturers to focus on product and brand development [3]. Investment Rationale - TCL Electronics is viewed as a "scarce asset" within the industry, with a strong growth trajectory and a favorable valuation compared to historical averages, currently trading at approximately 10 times earnings, below its historical average of 17 times [11][15]. - The company has a consistent dividend policy, with an average payout ratio of 42.33%, reflecting strong cash flow and commitment to shareholder returns [13][14]. Future Growth Drivers - The company is expected to benefit from three main sources of returns: performance growth, valuation recovery, and dividends, with projected adjusted net profits for 2025 potentially reaching HKD 2.32 billion [7][11]. - The internet and innovation segments are also showing significant growth, with internet revenue increasing by 20.3% and solar business revenue soaring by 111.3% in the first half of 2025 [15][16]. Conclusion - TCL Electronics is positioned to capitalize on the evolving display industry, leveraging its technological advancements, strong market presence, and diversified revenue streams to deliver sustainable growth and attractive returns for investors [1][2][16].
低估值、高成长、稳分红：TCL电子(1070.HK)的“三重收益”投资逻辑