Company Overview - TCL was founded in 1981, originally as TTK Household Appliance Ltd, and has expanded its business into semiconductor display and renewable energy photovoltaic sectors [1] - In 2019, TCL underwent an asset restructuring, splitting into TCL Technology Group Co., Ltd. (TCL Technology) and TCL Industrial Holdings Co., Ltd. (TCL Industrial) [1] - TCL Technology focuses on semiconductor displays and renewable energy photovoltaic industries, with TCL Huaxing becoming a leading global player in semiconductor displays [1] Climate Goals and Management - In 2023, TCL Technology publicly committed to achieving carbon peak by 2030 and carbon neutrality in its operations by 2050 [2] - The company has established a climate change governance system led by the board, with a dedicated committee for strategic and sustainable development overseeing climate issues [2] Green Production and Certifications - TCL Technology has 13 products certified for ISO 14067 carbon footprint and 8 products certified under the French carbon footprint certification [3] - The company promotes zero waste to landfill management, with 10 subsidiaries receiving UL 2799A certification for waste management [3] Renewable Energy Initiatives - As of 2024, TCL Huaxing has installed a total photovoltaic capacity of 138.5 MW, generating 149,236 MWh of electricity [4] - The company purchased approximately 36,300 MWh of green electricity and 160,000 MWh of green certificates, totaling renewable energy usage of 343,909 MWh [4] - TCL Huaxing invested about 130 million RMB in energy-saving initiatives, achieving energy savings of 224,319 MWh and reducing carbon emissions by 115,446 tons [4] Expert Commentary - TCL's commitment to peak carbon emissions by 2030 and achieve carbon neutrality by 2050 demonstrates a long-term responsibility towards sustainability [5]

Core Viewpoint - The company reported a significant decline in revenue and increased losses in the first half of 2025, indicating ongoing challenges in the market and operational performance [4]. Group 1: Financial Performance - In H1 2025, the company achieved revenue of 13.398 billion, a year-on-year decrease of 17.36%, and a net profit attributable to shareholders of -4.242 billion, with losses widening compared to the previous year [4]. - In Q2 2025, the company reported revenue of 7.297 billion, a year-on-year increase of 16.18%, but the net profit attributable to shareholders was -2.336 billion, with losses expanding both year-on-year and quarter-on-quarter [4]. Group 2: Silicon Wafer Business - The company maintained the industry's leading market share in silicon wafer shipments, but revenue from this segment decreased by 44.62% to 5.777 billion in H1 2025, with a gross margin decline of 14.50 percentage points to -23.74% [5]. - The company focused on reducing production costs through technological improvements, achieving a 40% year-on-year decrease in cost per watt and over a 20% reduction in per furnace costs [5]. - The concentration of major customers increased, ensuring a positive net cash flow from operating activities of 0.523 billion [5]. Group 3: Module Business - The company saw a quarterly increase in photovoltaic module shipments, with Q2 2025 shipments doubling compared to the previous quarter [6]. - Revenue from the module business grew by 39.22% to 3.846 billion in H1 2025, although the gross margin decreased by 6.80 percentage points to -6.20% [6]. - The company completed the capacity establishment for half-cell and bifacial (BC) technology, enhancing its product matrix and collaborating with industry partners to build a BC ecosystem [6]. Group 4: Global Strategy and Business Transformation - The company is actively promoting a global strategy, with steady progress on projects in the Middle East and a systematic review of capacity in the Philippines, positioning it as a base for global BC battery and module production [7]. - The overseas subsidiary Maxeon is focusing on the high-barrier U.S. market and is gradually transforming its business model to emphasize products, technology, brand, and channels [7]. - Maxeon's module business faced significant negative impacts due to returns from the U.S. market, and the company is working on addressing these challenges while facing uncertainties in supply chain restructuring and market acceptance [7].

Investment Rating - The report maintains a "Buy" rating for the company, indicating an expectation of returns exceeding the market benchmark by more than 15% over the next 6-12 months [4][6]. Core Insights - The company reported a significant decline in revenue and increased losses in the first half of 2025, with total revenue of 13.398 billion yuan, down 17.36% year-on-year, and a net loss attributable to shareholders of 4.242 billion yuan, which is a larger loss compared to the previous year [1]. - Despite the challenges, the company has maintained its leading market share in silicon wafer shipments and has made progress in reducing production costs through technological improvements [2]. - The company's photovoltaic module shipments have shown a sequential increase, with Q2 shipments doubling compared to the previous quarter, indicating a gradual improvement in operational capabilities [3]. - The company is actively pursuing a global strategy and transforming its Maxeon business to focus on high-barrier markets in the U.S., although it faces challenges related to product returns and supply chain restructuring [4]. Financial Performance Summary - For the first half of 2025, the company's silicon wafer business revenue decreased by 44.62% to 5.777 billion yuan, with a gross margin of -23.74%, reflecting ongoing pressure on profitability [2]. - The photovoltaic module business saw a revenue increase of 39.22% to 3.846 billion yuan, although the gross margin decreased to -6.20% [3]. - The company's financial projections indicate a continued decline in revenue and net profit for 2025, with expected revenues of 25.231 billion yuan and a net loss of 4.123 billion yuan [5][9]. Market Position and Strategy - The company has achieved a cumulative shipment of over 200 GW of 210 silicon wafers, maintaining its position as the industry leader in market share [2]. - The focus on building a complete 210 ecosystem and enhancing partnerships in the BC technology space is part of the company's strategy to improve its competitive edge [3]. - The ongoing global expansion efforts, particularly in the Middle East and the Philippines, are aimed at establishing a robust overseas supply chain [4].