TCL Electronics: High Growth, High Dividends, Low Valuation — Is It Time for Reassessment?

After the marginal retreat of policy tailwinds, China’s TV brand market faces new challenges.

According to data from 洛图科技, in 2025 China’s TV market brand complete-set shipments fell year over year by 8.5%, hitting the lowest level since 2010. In the second half of the year, the decline widened further to 16.9%.

But right against this kind of industry backdrop, TCL Electronics turned in a set of results that are almost the opposite in direction.

In 2025, the company reached the one-trillion-yuan revenue milestone. Its adjusted attributable net profit increased sharply by 56.5% year over year. Against the backdrop of the industry’s overall shipments falling by nearly a tenth, its global TV shipment market share instead rose by 0.8 percentage points to 14.7%, maintaining its position among the top two global brands.

These financial results are beginning to make the market realize that this company may no longer fit neatly into the old framework of traditional black-electronics cycle stocks.

I. Beyond one-trillion-yuan revenue and high dividends, what’s truly striking is the scissors spread

According to the performance announcement, during the year the company achieved revenue of HKD 114.58 billion, up 15.4% year over year, setting a historical high. Profit after tax rose 36.7% year over year to HKD 2.53 billion. Adjusted attributable net profit increased 56.5% year over year to HKD 2.51 billion—clearly faster than revenue growth.

If you look only at these figures, this is already a very impressive set of results. But even more notable is how well these results translate into real outcomes.

Meanwhile, according to the company’s previously disclosed equity incentive plan: using 2024 adjusted net profit attributable to the parent company as the base, the growth rates for 2025, 2026, and 2027 must be no less than 45%, 75%, and 100%, respectively. Now, 2025 is not only meeting the target—it is exceeding it.

The prior three-year goal of doubling net profit used to look out of reach. Now it seems entirely possible to complete it on schedule, strengthening the certainty and predictability of performance.

Source: iFind, compiled by 格隆汇

At the same time, the board recommended paying a final dividend of HKD 0.498 per share, keeping the payout ratio at about 50% of adjusted attributable net profit. The final dividend increased 56.6% year over year. Based on the current share price of about HKD14.3**, the final dividend alone provides about3.5% of cash return. High-growth technology companies are not rare; high-growth companies that also maintain stable long-term high dividend payouts are far fewer.**

Source: iFind, compiled by 格隆汇

Earlier, when discussing Hong Kong-listed stocks, Wall Street legend Michael Burry pointed out that the historic plunge in the Hang Seng Tech Index was the only case driven purely by multiple compression (i.e., valuation and sentiment). In fact, while the Hang Seng Tech Index fell, the constituent companies’ revenue and profits were still growing steadily. This created a scissors spread of rising earnings and falling valuations.

If you put performance execution, dividend capacity, and the current valuation together, the scissors spread in TCL Electronics is very clear.

The company’s current apparent valuation, its P/E ratio, is around 14x. As of the end of 2025, the company’s cash and cash equivalents on hand reached HKD 13.52B, up more than 54% year over year. Using the current market capitalization of HKD361 billion, the P/E ratio after excluding cash is only about9x, creating a value trough within the consumer technology sector.

A clear mismatch between fundamentals and valuation may well be one of the key reasons institutions are refocusing. Within the last 90 days, more than 14 major mainstream investment banks have issued research reports, and most have given Buy ratings.

Source: Securities Star

But if what we’re seeing is still only a market-level signal of repricing, what ultimately determines whether TCL Electronics can be continuously revalued is whether changes have truly occurred inside its fundamental business structure.

In the past, when the market looked at TCL Electronics, it often liked to classify it as a black-electronics cycle stock.

The black-electronics industry has been trapped for a long time in two things: one is the panel price cycle, and the other is low-price, large-scale competition. Having revenue doesn’t mean having profits; even if profits exist at a certain stage, they may not be stable.

But this performance in 2025 appears precisely in the context of a high base and high difficulty. That alone indicates that its growth momentum no longer relies only on tailwinds from the industry. In its further deep-dive report, 华创证券 emphasized that the market may have noticed TCL Electronics’ turnaround in performance, but it failed to realize that behind TCL’s revenue growth lies a structural change in the industry.

II. A resonance of premiumization and globalization—escaping the black-electronics cycle-stock framework

This change first shows up in the display business.

In 2025, the company’s display business revenue grew 9.2% year over year to HKD 75.80 billion. Gross profit increased 16.4% year over year to HKD 12.48 billion. Gross margin rose 1.1 percentage points to 16.5%, meaning the profit quality of its core business is improving. The key variable driving this change is premiumization.

First, look at the domestic market.

Against the backdrop of a decline in total TV shipment volume across China’s TV industry, TCL gained market share by outperforming with mid-to-high-end products. In 2025, TCL’s Mini LED TV domestic shipment volume grew 33.6% year over year, and its quantum dot TV shipment volume grew 29.6%. Meanwhile, the trend toward larger screen sizes was clear: TCL TVs of 65 inches and above accounted for 57.6% of domestic TCL TV shipments, and the average size increased to 64.3 inches.

The overseas signals are even stronger.

In 2025, TCL TV shipments of 65 inches and above overseas grew 50.0% year over year, and their share of shipments rose 6.7 percentage points year over year to 24.2%. TCL Mini LED TV’s overseas shipment growth reached 228.0%, driving its global Mini LED TV shipments to grow 118.0% year over year. Global market share reached 31.1%, firmly securing the first place.

In the past, many companies talked about globalization—essentially selling products to more countries and regions, with the core being an expanded sales radius. But TCL Electronics’ globalization has now evolved beyond simply shipping products abroad; it is upgrading in parallel across brand, products, channels, and localized operations, moving toward premiumization.

At the product level, TCL Electronics is further targeting premium mindshare.

In 2025, in September, its annual flagship model, the TCL X11L, was released with “100% BT.2020全局 high color gamut,” breaking the industry’s color-gamut deadlock that had lasted for a decade. It also comes with top-tier specifications such as 20,000+ mini light zones, a 10,000:1 contrast ratio, and an ultra-bright彩XDR 10000 nits peak brightness. Entering 2026, TCL further cascaded flagship technologies down: in January it released the Q10M Pro and the Q10M series new products, bringing the SQD-Mini LED core technology that had previously been exclusive to X11L to a broader market, promoting wider adoption of high-end display technologies.

Notably, during the 2026 CES, TCL won multiple awards including the Gold Award for Innovative Display Technologies thanks to its SQD-Mini LED-related technologies and products. It also jointly released, with Germany’s TÜV Rheinland, the “White Paper on Perceived 3D Color Gamut of Display Products,” intending to define a new standard for the industry’s picture-quality evaluation.

In terms of channels, the trend toward premiumization is also evident. The performance report shows that in the European market, TCL Electronics achieved full coverage across key channels and improved product mix toward higher-value directions.

In the U.S. market, research from 開源証券 found that among channels positioned in the mid-to-high end, TCL’s branded display area saw a significant expansion. BestBuy’s flagship products have upgraded from its QLED series across the board to a QD-Mini LED high-end line where most units are priced above $1,000; the number of SKUs available rose from 2 to 8. At Costco, TCL highlighted its 98-inch QD-Mini LED product priced at $1,599, while two years ago it only had one 58-inch LED product priced at $279 in that channel. For mass-market channels such as Walmart, dominated by mid-to-low-end products, TCL’s strategy is to improve quality and efficiency—pushing toward larger screens and QLED—to maintain reasonable profit with stronger product capabilities (such as QLED versus standard LED from competing products), rather than getting dragged into a price war.

In emerging markets such as Latin America, the Middle East and Africa, and the Asia-Pacific region, TCL places even more emphasis on localized operations and channel coverage. With a dual-track strategy in which offline channels and e-commerce platforms develop in tandem, it can quickly respond to differing consumer preferences and market tempos across regions.

On the brand front, TCL Electronics continues to reshape global consumers’ perception of China’s TV brands through technology awards, international exhibitions, sports sponsorships, and a matrix of high-end product lineups. Among them, TCL has reached official sponsorship/collaboration agreements with multiple national football teams or their associations, including those from Argentina, Brazil, Spain, and Italy. Leveraging the FIFA World Cup, a global sports event, is expected to further expand brand exposure and market share.

In the past, voice and influence in the premium TV market has long been held by Korean brands such as Samsung and LG. Chinese brands have been growing quickly in scale, but breakthroughs in the high-end segment have remained limited.

Now, however, TCL Electronics has officially entered direct competition in the premium market, becoming the strongest competitor to Korean brands—and has already achieved favorable phased results.

Specifically, TCL Electronics’ premium strategy has been implemented effectively in North America, driving growth in both revenue and ASP. Circana, an authoritative U.S. data institution, awarded TCL the title of “Champion of North America TV Share Increase.” In the cumulative 12 months through October 2025, TCL TVs’ sales value market share in North America rose by 1.3 percentage points to 10.8%. At the same time, TCL TV holds top-three market share rankings in more than 20 countries overseas.

III. Multi-business accelerates and takes off, improving the layout of an intelligent terminal technology platform

If you understand TCL Electronics only as a TV company, then this story actually covers only part of the picture.

If the premiumization and globalization of the display business reshaped and strengthened TCL Electronics’ traditional main channel, then another set of numbers in the financial report sketches out its platform-like profile that goes beyond a single product category.

First is the innovative business.

In 2025, TCL Electronics’ innovative business revenue grew 31.9% year over year to HKD 35.63 billion. Its photovoltaic business revenue grew 63.6% year over year to HKD 21.06 billion. Newly installed capacity reached 8.0GW. The cumulative number of signed industrial and commercial projects exceeded 340, and the cumulative number of dealer channels exceeded 2,530. More importantly than the scale itself, this shows that TCL Electronics can replicate, into new product and energy scenarios, the brand strength originally built up in the TV business, the global channel network spanning the world, and global operational capabilities.

In other words, the company is beginning to demonstrate capabilities that a platform-type enterprise typically possesses—not just operating a single category, but being able to incubate new growth curves based on the existing resource base.

Second is the internet business. TCL Electronics’ internet business revenue grew 18.3% year over year to HKD 3.11 billion, with a gross margin as high as 56.4%. In overseas markets, the company deepened cooperation with tech giants including Google, Roku, and Netflix. Its flagship models were among the first to integrate Google Gemini to upgrade the AI interaction experience. Its content aggregation application, TCL Channel, completed a comprehensive upgrade, significantly increasing locally high-quality content in key countries such as Europe and Latin America. This drove a sharp year-over-year increase of 150% in total daily average usage time on the platform. By the end of 2025, TCL Channel’s global cumulative users surpassed 45.7 million.

In the domestic market, the company leverages its own OTT platform, optimizing interaction through a major upgrade of “Lingkong Desktop 3.0” and promoting deep integration between the intelligent assistant XiaoT and smart agents. In addition, TCL Electronics builds its own “content factory” with proprietary rights using AI technology. Especially in the children’s segment, it has cumulatively launched 26 self-produced children’s AIGC animation album titles, with high-quality content accounting for as much as 70%. The company also continues to promote tool and hardware innovation. By building its own Agent tools, it improves the efficiency of AI manhua/cartoon creation, and it successfully released an AI hardware product, AmbyUni, expanding intelligent interaction scenarios.

Although internet business revenue is not the largest share, it significantly optimizes the company’s profit structure. It also means TCL Electronics’ business model is no longer just selling hardware once. It is beginning to extend into ongoing internet service operations. This naturally brings additional room for valuation imagination.

What’s even more important is that its AI and new terminal layout are further expanding TCL Electronics’ boundaries.

On the TV side, TCL Electronics has integrated Google Gemini into its overseas flagship models, while in China it continues to advance upgrades to the AI experience on the TV platform, building its own AI content factory with proprietary rights. TVs are evolving from traditional home appliances into intelligent interaction terminals.

Meanwhile, the innovation company 雷鸟创新 that the company incubates has also established a clear leading advantage in the AR glasses track.

In 2025, RayNeo Innovation’s share in China’s consumer AI/AR glasses market reached 32%, ranking first with an absolute advantage. Its global AR glasses market share reached 39% in the second quarter, topping the world for the first time. Its product RayNeo X3 Pro, as the world’s first mass-produced full-color etched waveguide AR glasses, was selected for TIME magazine’s 2025 list of best inventions, standing alongside innovation products from companies such as Apple and Huawei. Even more noteworthy is its strategic cooperation with Ant Group. It was the first on AR glasses to enable “look-and-pay.” Users only need to glance at the merchant’s Alipay payment device or QR code, and payment can be completed on the glasses—pushing AR devices from display-oriented tools toward truly personal, on-the-go intelligent terminals and marking a key step.

In addition, the company’s TCL AiMe, the world’s first split-type intelligent home companion robot launched at the 2025 international consumer electronics show, further demonstrates its ambition for terminal layout within the smart home ecosystem.

Put these clues together, and it’s clear that TCL Electronics’ future business boundaries are no longer limited to traditional black electronics. Relying on its accumulated capabilities across technology, supply chain, brand, channels, and content entry points, it is evolving into a broader intelligent terminal technology platform driven by frontier technologies such as AI.

If in 2024, the capital market re-understood TCL Electronics because it emerged from the prior industry downturn, then what this 2025 financial report truly proves is that its growth is no longer just a cycle repair. It is driven together by product-structure upgrades toward mid-to-high-end offerings, deeper globalization operations, and the expansion of internet and innovative businesses. Worth mentioning is that recently the company formally announced a strategic cooperation with Sony. They plan to establish a joint venture in which TCL holds 51% and Sony holds 49%, to undertake TCL’s global home entertainment business. It is expected that the two brands will form strong synergies, achieving further growth in business.

As it evolves into a globally leading intelligent terminal technology platform, TCL Electronics’ sources of profit are becoming thicker, its growth structure is becoming more stable, and the logic behind its valuation has started to be rewritten.