This leading monitor manufacturer reported a 15.3% revenue growth in the first quarter, driven by rising profit margins, with profits more than doubling during the period.
Yang Ge
Television and display giant TCL Electronics Holdings Limited (1070.HK) reported last week that, benefiting from strong growth in emerging businesses with higher profit margins such as large-screen televisions and Mini LED televisions, the company achieved a 15.3% revenue growth in the first quarter, with profits more than doubling. The company also announced a milestone deal to establish a joint venture with one of the oldest and most recognized brands in the display industry, Japan's Sony (6758.T), creating a new landscape.
In TCL Electronics' first quarter revenue of HKD 29.2 billion (USD 3.7 billion), the largest share—approximately 57%—came from large-size displays, which have become the mainstay for homes and businesses. Revenue from this segment grew by 17.2% year-on-year, from HKD 14.3 billion to HKD 16.7 billion. As the trend towards larger screens continues, the company stated that the average size of displays sold in the first quarter increased to 55.6 inches, up 2.3 inches from the same period last year.
The company stated: &#34;Benefiting from the continuous increase in the proportion of mid-to-high-end and large-size televisions, the effects of product structure upgrades have been further highlighted. Mid-to-high-end products maintain a leading advantage in global shipments.&#34;
At the same time, the company's internet business has also become an important profit growth point. This segment's revenue grew by 13.2%, reaching HKD 740 million, with gross margins soaring to 65%. Specifically, the main driving force came from high-margin overseas internet services, with revenue contributions from this segment increasing by 20 percentage points through in-depth cooperation with Google, Roku, and Netflix.
TCL Electronics also reported that its Mini LED televisions achieved stronger triple-digit growth, with this business increasingly expanding its share within its core display business. In this quarter, Mini LED television shipments more than doubled, soaring by 102%, accounting for 15.4% of all display shipments, an increase of 6.6 percentage points year-on-year. The overseas market for Mini LED televisions was particularly strong, with a year-on-year increase of 178%.
Large-screen and Mini LED televisions typically have higher profit margins than more mature traditional display models, and the strong growth in these two areas helped the company increase its gross margin from 14.6% in the same period last year to 16.1%. This, in turn, drove the company's profits to HKD 359 million, a 124% increase from HKD 161 million recorded in the same period last year.
TCL Electronics is one of the oldest and most successful television brands in China, with higher international recognition compared to earlier competitors like Skyworth (0751.HK) and Konka (000016.SZ). In the first quarter, the company further enhanced its brand influence through the agreement signed in March to establish a joint venture with Sony. This joint venture will continue to be responsible for Sony's home entertainment business, including its iconic television products
In addition to its display business, TCL ELECTRONICS also reported steady progress in its newer photovoltaic business, with revenue in the first quarter increasing by 12.7% year-on-year to HKD 4.81 billion. Its smart connectivity and smart home business also grew by 19.6%, reaching HKD 494 million, accounting for 1.7% of total revenue in the first quarter.
Yongzhu Fang focuses on reporting on Chinese companies listed in the United States and Hong Kong, including sponsored content. For more information, including inquiries about individual articles, please click here to contact us.

01070

SONY

6758

TCL Electronics Holdings Limited's revenue in the first quarter increased by 15.3%, with profits doubling, benefiting from strong growth in the large screen and Mini LED television business. The company has established a joint venture with Sony to promote new business development. Large-size displays accounted for 57% of total revenue, and Mini LED television shipments increased by 102% year-on-year. The internet business has also become an important source of profit, with revenue growth of 13.2%

- TCL Electronics reported a 15.3% revenue increase in Q1, driven by rising profit margins and a more than doubling of profits.  
- A significant portion of the revenue, approximately 57%, came from large displays, with Mini LED TVs also showing strong growth, contributing to an overall increase in gross profit margin from 14.6% to 16.1%.  
- The company announced a joint venture with Sony to enhance its brand presence while also experiencing growth in its photovoltaic and smart home segments.

BambooWorks

TCL ELECTRONICS

Sony

Sony Group Corporation

Alphabet

Alphabet - C

Roku

Netflix

SKYWORTH GROUP

KONKA GROUP

News Summary: Significant growth in large screen and Mini LED TV business, TCL Electronics profits soar