From the “screen display revolution” to “scene reconstruction”, TCL Electronics (01070)'s transition to high-end and the release of ecological dividends

In a market environment with diversified development of smart terminals, although the TV industry is often regarded as a traditional sector with weak growth, there is still no shortage of leaders among them.

Recently, Hong Kong stock listed company TCL Electronics (01070) announced its 2024 results. During the year, the company achieved revenue of HK$99.32 billion, up 25.7% year on year; profit after tax reached HK$1.85 billion, up 123.6% year on year; adjusted net profit to mother was HK$1.61 billion, double the year on year.

Compared with the 2024 global TV industry's 3.7% year-on-year shipment data, the 14.8% year-on-year growth rate of TCL TV's global shipments was not only nearly four times higher than the average growth rate of the industry, but also set a new historical peak record. Global shipments reached 29 million units, ranking in the top two in the world.

This series of data not only breaks the stereotype of “low growth” in the industry, but is also a success of TCL Electronics' systematic practice of digging deep into the value of middle and high-end products, improving the premium capacity of global brands, and optimizing operational efficiency. It also sets a successful example for peers.

Industrial landscape restructuring driven by display technology upgrades

Science and technology are the primary productive forces, and mastering core technology is the key to opening up the middle and high-end markets. TCL Electronics abandoned the traditional path of exchanging the market at low prices through technical barrier construction and product structure optimization. In 2024, the explosive growth of its large size and mini LED TVs proved the effectiveness of this strategy.

Throughout the 70-year development history of the global color TV industry, technological innovation has always been a core variable in reshaping the market pattern. From CRT video tubes to LCD liquid crystal displays, from plasma to OLED, to today's Mini LED technology, every breakthrough in display technology is accompanied by a change in industry leadership.

According to Zhongyikang's omni-channel data, the retail sales volume of Mini LED TVs in the domestic market soared to 4.43 million units in 2024, with a penetration rate of 13.6%, a direct increase of 10.7 percentage points over 2023. The ultimate audiovisual experience that Mini LED TVs bring to consumers on large screens is an important factor favored by consumers. Among these, TCL Electronics is one of the key players driving the rapid penetration of Mini LED TVs.

According to TCL Electronics sales data, TCL Mini LED TV shipments in the domestic market increased by 264.7% year on year, and have occupied the top position in the domestic mini LED TV retail market for many years. It is worth noting that in 2024, global shipments of TCL Mini LED TVs exceeded 1.7 million units, a year-on-year increase of 194.5%, and a market share of 28.8%, ranking first in the world.

The successful combination of the “middle and high-end plus large screen” strategy has led to the rapid growth of TCL Electronics' large-size display business. In 2024, TCL Electronics' large-size display business increased 23.6% year over year to HK$60.11 billion, of which domestic market revenue was HK$19.05 billion, up 18.9% year on year.

You need to know that the high-end segment of the TV industry has long been dominated by Japanese and South Korean companies. In the current wave of Mini LED technology, TCL Electronics' breakthrough is closely related to its “forward-looking technology research and development - capacity implementation - cost optimization.”

From a technical perspective, according to the Zhitong Finance App, as early as 2016, TCL Electronics began research and development on mini LED technology, 3-5 years ahead of the mainstream layout of the industry. TCL Electronics launched the world's first mini LED TV in 2019 and achieved mass production. Since then, it has launched iterative Mini LED TV products every year to enrich the product matrix and further meet the needs of different consumer groups. And I have to mention his foresight in firmly implementing the “TCL+ Thunderbird” dual brand strategy.

TCL Electronics' “TCL+ Thunderbird” dual-brand strategy is essentially a precise breakdown of consumer demand. The TCL brand is aimed at home consumers seeking the ultimate audio and image quality and lifestyle experience, while the Thunderbird brand focuses more on young consumers who love e-sports and pursue the ultimate cost performance ratio. When the size of the TV breaks through the tipping point, it is no longer a “home appliance”, but “home space infrastructure” — high-end is by no means an increase in price but stratification, and the dual brands are by no means a simple “high or low match”, but a deep adaptation to the needs of different user groups.

On the industrial side, by establishing a positive cycle of “R&D - mass production - cost”, the company achieved rapid transformation of laboratory results into a market advantage. While peers were still competing with panel manufacturers for production capacity, TCL Electronics was already able to adjust production plans on a cyclical basis.

Taking its newly released Vientiane partitioning technology as an example, it deeply decouples every aspect of the Mini LED TV imaging display: from the light-emitting chip to the final projection to the screen display, deeply optimizes the details and difficulties affecting image quality in various aspects such as materials, processes, design, and algorithms, and uses a system engineering philosophy to solve problems from the bottom up.

And this is exactly the point where TCL electronics is most likely to be underestimated by the outside world. It is easy for many people to attribute its success in the Mini LED TV market to its advantage of entering the market earlier than other peers, while ignoring the internal engine that drives the company steadily forward — perception and advance planning for changes in the tide.

This “advanced technology+manufacturing flexibility+demand insight” trinity model is breaking through the zero-sum game of traditional price competition and providing a model for the transformation and upgrading of the consumer electronics industry. When display technology enters the “micro-innovation” era, the ability to systematically innovate may replace a single technical parameter and become a new yardstick for determining the competitive landscape of the market.

From “made in China” to “global roots”, extremely efficient management

In today's “anti-globalization,” the ability to localize is critical. Unlike the “hardware internal volume” of other manufacturers, the globalization of TCL Electronics is more like a systemic war — shifting from a price battle in the past to a comprehensive ability competition of “advanced technology+global operation”. By establishing core supply chains in different regions around the world, control of the industrial chain is transformed into a “power to price management capacity.”

In terms of production capacity and supply chain, TCL Electronics has established production bases around the world. Production sites in Vietnam and Mexico cover North America and the Asia-Pacific region, while Poland, Brazil, and Pakistan respectively radiate Europe, Latin America, and Middle East Africa, to achieve agile and fast delivery while reducing tariff expenses.

At the same time, in terms of marketing and channel management, TCL Electronics drastically adjusted its organizational structure and split the global market into six major marketing headquarters in China, North America, Latin America, Europe, Asia Pacific, and the Middle East and Africa. By hiring local talents, it is more suited to the local market in terms of regional organization management and accurate marketing.

For example, in developed European and American regions, TCL Electronics positions the market exhibition industry at the brand level. While further expanding high-end channels, it establishes a high-end brand image and gradually conquers consumer mentality through accurate marketing; while in emerging markets where countries such as Asia Pacific, Latin America, the Middle East and Africa are scattered and have more room to improve market share, TCL Electronics focuses on “one country, one policy” and gradually increases channel coverage through refined channel operations.

According to reports, TCL Electronics currently has a coverage rate of over 95% among the top 50 channels in the world. This also made TCL Electronics' large-size display business account for 68.3% of overseas market revenue, an increase of 25.9% over the previous year to HK$41.06 billion. TCL TV ranked in the top three retail sales volume in nearly 20 countries around the world.

It is easy to see that TCL Electronics' “global localization” is not a simple replication model. Instead, through a “one region, one policy” approach, TCL Electronics' globalization is no longer limited to simple product output, but rather shifts development to “deep adaptation to local needs.”

It is worth mentioning that under this approach, the operating efficiency of TCL Electronics continues to be optimized. In 2024, the sales and distribution expenditure rate fell 1.0 percentage point to 7.6% year on year, driven by precise marketing strategies; the administrative expenditure rate fell 0.9 percentage points to 4.2% year on year, and the overall cost ratio decreased 1.9 percentage points year on year to 11.8% year on year.

From a long-term perspective, TCL Electronics' globalization strategy enables it to reduce costs and increase efficiency. In the context of adhering to high-end products, the company's gross profit space will also be further enhanced, thus achieving high-quality development.

Leading the way in laying out new tracks, intelligent ecology may add new volume

In 2022, the release of ChatGPT sparked widespread discussion in society at home and abroad, and some people thought it was a “landmark event for the arrival of AI.” The advent of C-side ChatGPT products has made the public intuitively feel that AI can understand complex language instructions, greatly breaking through the previous perception that AI usually handles simple tasks.

At the beginning of 2025, General Secretary Xi Jinping further stated, “China attaches great importance to the development of artificial intelligence, actively promotes the deep integration of the Internet, big data, artificial intelligence and the real economy, cultivates and expands the intelligent industry, accelerates the development of new quality productivity, and provides new impetus for high-quality development.” Artificial intelligence has been included in the national development strategy, and the government has introduced a series of policies to promote technological innovation, resource construction, and industry application. According to iResearch's forecast, the scale of China's artificial intelligence industry will exceed trillion dollars in 2029, and the review growth rate will reach 32.1% over the next five years.

Under the wave of AI, smart homes are undoubtedly a must-compete place for future home appliance companies. As an industry leader, TCL Electronics was also early on in the AI field. Ten years ago, TCL Electronics proposed the smart home concept of “AIoT full scenario, full ecosystem, full product”, and launched smart home appliances every year.

Today, TCL Electronics is still actively exploring the field of AI, not only actively embracing DeepSeek in terms of AI assistants, but also integrating this technology into various categories such as TVs, air conditioners, and mobile phones, opening a new chapter in smart life. For example, TCL TV is connected to DeepSeek through its own Fuxi AI platform, focusing on in-depth cooperation in the fields of multi-modal understanding, knowledge processing and content services; TCL washing machines can generate personalized smart cleaning solutions based on Fuxi's AI model and DeepSeek's real-time reasoning and deduction capabilities to provide users with a cleaner and more intimate laundry experience; TCL refrigerators are based on the Fuxi AI model and self-developed AI energy saving and noise reduction functions. Through intelligent recognition of the operating environment and state of the device, combined with a deep understanding of users' usage habits, the TCL refrigerator can achieve adaptive optimization Defrosting and adaptively optimizing the compressor frequency; there are also categories such as air conditioners, mobile phones, and smart door locks to achieve more intelligent application scenarios one by one through AI technology.

It is worth noting that not only are traditional major appliances, but innovative categories such as consumer-grade smart glasses and intelligent robots are also competitive grounds for the application of artificial intelligence technology.

In the case of AI+AR glasses, smart glasses can achieve a more natural way of human-computer interaction and expand richer application scenarios through the power of large AI models. For example, with the addition of a display module, “AI+AR” glasses can enable new gameplay such as real-time translation and AR navigation.

According to IDC data, the global smart glasses market is expected to ship 1.05 million units in 2025, an increase of 18.3% over the previous year. The industry generally believes that with the deep integration of AI technology and breakthroughs in optical display solutions, 2025 will become a key point in the smart glasses market. It can be said that the era of AI+AR glasses is coming soon.

Meanwhile, in the field of smart glasses, Thunderbird Innovation, an up-and-coming company incubated by TCL Electronics, has taken the lead and occupied the number one market share for consumer AR glasses in China for three consecutive years.

In addition to smart glasses, TCL Electronics groundbreaking unveiled the world's first split smart home companion robot, TCL Ai Me, at this year's International Consumer Electronics Show (CES).

The TCL Ai Me uses a split cockpit and bionic design, and is the core choice for implementing the “all-scene intelligent companionship” strategy. The family is a diverse and dynamically changing usage scenario, and the needs of users show highly personalized characteristics in different groups of people and different scenarios. TCL Electronics deeply integrates TCL Ai Me into the smart home ecosystem and acts as a super portal. It can not only interact with people naturally in multiple modes, provide warm emotional companionship and anthropomorphic interaction, but also continuously learn and adapt to the behavioral habits of family members.

As subsequent algorithm technology and content ecosystems continue to be iterated, TCL Ai Me will most likely redefine the imaginative space of companion robots as rapidly as Mini LED TV products.

summed

From a medium- to long-term perspective, TCL Electronics' series of strategies are essentially a paradigm upgrade that places the quality of operations above the growth rate of scale. Through the high added value of high-end products, the premium capacity of the global layout, and continuous optimization of operational efficiency, the company is building a sustainable development path driven by technology and prioritizing steady management.

As TCL founder Li Dongsheng said, “You can only have a future if you dare to invest in the future” — long-term investment in display technology, artificial intelligence, and management capacity building will enable TCL Electronics to take a more favorable position in the restructuring of the global industrial chain.

It is worth mentioning that TCL Electronics also performed very well in the capital market. In the face of the downturn in the Hong Kong stock market in 2024, the stock price of TCL Electronics bucked the trend and rose by more than 1.5 times throughout the year. Since the beginning of the year, the stock price has continued to soar, with a cumulative increase of nearly 50%. Although the stock price continues to rise sharply, its PETTM is only 13.5 times, and is still discounted by about 50% compared to A-shares and international peer valuations. Combined with technological innovations such as AI, TCL Electronics's valuation is expected to move closer to technology companies. In terms of dividends, Wind data shows that according to the latest annual calculation, its dividend rate is as high as 6.27%, higher than the Hang Seng Index's 4.91%, and the shareholder return is very impressive.

This “double dividend”, which combines capital appreciation and return on cash flow, just confirms the long-term nature of enterprises that create value for shareholders. In the era of low interest rates, benchmark companies that can continue to fulfill the double promise of “growth premium+stable dividend” naturally win the deep trust and value revaluation of the capital market.