TCL TV Sees Global Shipment Surge in High-End Market

On August 23rd, TCL Electronics Holdings Limited (01070.HK, hereinafter referred to as "TCL Electronics"), a listed company on the Hong Kong stock market, announced its interim financial results for 2024. The report shows that the adjusted net profit attributable to the parent company increased by nearly 150% year-on-year, indicating a significant enhancement in its profitability.

According to information from TCL Electronics, 2024 has been a big year for sports, with global events such as the European Cup and the Olympics, leading to a significant increase in global demand for televisions. TCL Electronics seized this opportunity and achieved a notable increase in shipments of large-sized and mid-to-high-end TV products. According to the interim report, TCL Electronics' market performance in this area was particularly outstanding.

In the Chinese market, TCL Electronics benefited from policies such as the central government's "consumer goods trade-in" initiative, achieving commendable results through optimizing product structure and precise brand positioning. In the first half of 2024, TCL TV shipments in the domestic market increased by 5.4% year-on-year against the trend, and revenue increased by 21.1% year-on-year to 8.35 billion Hong Kong dollars.

In terms of overseas markets, TCL Electronics also performed strongly. Relevant data shows that in the first half of 2024, TCL TV shipments in the international market increased by 10.4% year-on-year, and revenue increased by 24.2% year-on-year to 17.56 billion Hong Kong dollars.

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Mid-to-high-end market sees comprehensive breakthroughs

In the first half of this year, driven by the Olympic Games and the implementation of the "consumer goods trade-in" policy, TCL Electronics' global TV shipments have significantly increased.

Relevant data shows that in the first half of 2024, TCL Electronics achieved revenue of 45.49 billion Hong Kong dollars, a year-on-year increase of 30.3%; the adjusted net profit attributable to the parent company reached 650 million Hong Kong dollars, a significant year-on-year increase of 147.3%. In addition, diversified businesses continued to expand, with innovative business revenue surging by 60.6% year-on-year, reaching 13.95 billion Hong Kong dollars. In terms of cost control, TCL Electronics' operational efficiency has significantly improved. The administrative expense ratio decreased by 1.1 percentage points year-on-year to 4.1%, and the sales expense ratio decreased by 0.9 percentage points year-on-year to 9.6%, with the overall expense ratio decreasing by 2.0 percentage points to 13.7%.

TCL Electronics' performance in the mid-to-high-end TV market was particularly outstanding. According to the interim report, in the first half of 2024, the global shipments of TCL TVs with a screen size of 75 inches and above increased by 34.5% year-on-year, and the global shipments of TCL Mini LED TVs increased significantly by 122.4%. These shipment increases directly drove the company's large-screen display business revenue to increase by 23.2% year-on-year, reaching 25.91 billion Hong Kong dollars.

In the domestic market, TCL Electronics seized the opportunity of the "consumer goods trade-in" policy, improved product structure through the TCL brand, and at the same time, used the LeEco brand to delve into the younger market. In the first half of 2024, TCL TV shipments in the Chinese market increased by 5.4% year-on-year against the trend, and revenue increased by 21.1% year-on-year to 8.35 billion Hong Kong dollars. The breakthrough in the mid-to-high-end market was also particularly significant, with shipments of TCL TVs with a screen size of 75 inches and above increasing by 17.7% year-on-year, accounting for 33.2% of the total shipments. At the same time, the shipments of TCL Mini LED TVs in the Chinese market surged by 120.1% year-on-year, and according to the data from CTR, the retail volume of this product has been leading in the Chinese market.

In terms of overseas markets, TCL Electronics also performed impressively. In the first half of 2024, TCL TV shipments in the international market increased by 10.4% year-on-year, and revenue increased by 24.2% year-on-year to 17.56 billion Hong Kong dollars. Especially in the shipments of TVs with a screen size of 75 inches and above and TCL Mini LED TVs, they increased significantly by 77.9% and 124.7% year-on-year, respectively, showing further optimization of product structure. By precisely targeting brand marketing and delving into key regional channels such as North America, Europe, and emerging markets, TCL TVs have consistently ranked in the top five in shipments in nearly 30 countries overseas. According to data from GfK and Circana, these market strategies have been significantly effective.Television Business Defies the Downtrend with Growth

In the first half of this year, a new round of nationwide consumer goods exchange for old ones has provided a strong impetus for TCL Electronics' television business.

In March, relevant departments proposed four major actions: equipment renewal, consumer goods exchange for old ones, recycling, and standard enhancement, aiming to promote high-quality durable consumer goods to more widely enter residents' lives. According to data from the Ministry of Commerce, from January to May of this year, the sales volume of home appliances exchanged for old ones on major e-commerce platforms increased by 81.8% year-on-year.

However, despite the implementation of policies, the overall sales performance of televisions has not met expectations. According to data, in the first half of 2024, the total shipment volume of brand TVs in the Chinese mainland market was 16.39 million units, a year-on-year decrease of 4.2%. Even with the support of the "618" shopping festival in June, the shipment volume in the second quarter still declined by 7.5% year-on-year.

In the early months of January to February, the market performance was relatively good, with a cumulative shipment volume that increased by 3.1% year-on-year, leading many institutions to be optimistic about the prospects of China's television market, believing that the market has shown signs of stabilization. However, starting from March, the market downturn intensified, with a significant year-on-year decrease of 11.3% in shipments for that month.

Relevant data shows that, except for the shipment volume in January that exceeded expectations, the following five months all showed a year-on-year decline. Even though this year is a big year for sports, with multiple promotional opportunities such as the "618" promotion, the European Cup, the Copa America, and the Olympics, it has not been able to reverse the downturn in China's consumer market. Online retail data provided by Runto Technology shows that the sales volume and sales revenue during this year's "618" promotion (May 20th to June 23rd) decreased by 21.6% and 15.8% respectively, continuing the trend of declining retail volume during the "618" and "Double 11" in 2023.

However, despite the decline in sales volume, the sales revenue of China's television market has increased. In the first half of 2024, the total retail sales of China's television market increased by about 10% year-on-year, reaching 52.2 billion yuan, with the average unit price rising to 3,733 yuan, a year-on-year increase of 14.7%. Aowei Yunwang predicts that the annual sales revenue is expected to reach 112.3 billion yuan, a year-on-year increase of 2.5%.

It is against this backdrop that TCL Electronics' television business has grown against the trend, further highlighting its market competitiveness.

Looking forward to the second half of the year, TCL Electronics plans to continue consolidating the foundation of the mid-to-low-end market and achieving breakthroughs in the mid-to-high-end market around the strategic layout of "expanding scale, strengthening operations, activating organizations, and globalization." TCL Electronics will deepen overseas retail, channel, and marketing capabilities, strengthen global brand advantages, and is committed to improving global organizational operational capabilities through an ultra-efficient business model, strengthening a data-driven operational system, and comprehensively assisting in cost reduction and efficiency enhancement, as well as improving user experience, to promote the company's high-quality development.