Li Dongsheng, the founder of TCL, has once again achieved a significant financial victory.

Changxin Memory Technologies went public, and TCL Technology subscribed to 18.2448 million shares for RMB 158 million. Based on Changxin's first-day stock performance, the market value of this holding is approximately RMB 894 million, resulting in a paper profit of around RMB 736 million. Furthermore, both parties have formally signed a strategic cooperation agreement, planning to collaborate on technology R&D, industrial chain integration, and supply chain coordination.

Known as a "capital maestro," Li Dongsheng's sharp investment acumen is clearly evident. However, what most showcases his strategic vision and risk-taking nature is his continuous high-stakes bets on business layout. He once stated, "Companies that don't make changes won't survive three cycles."

In mid-July, TCL Electronics announced it would acquire the TCL air-conditioning business for approximately HKD 5.61 billion. After the transaction is completed, the business will be officially listed on the Hong Kong stock platform. This deal marks TCL Electronics' transformation from a single display business leader into a global comprehensive home appliance platform, achieving a full product category layout encompassing televisions, air conditioners, solar energy, and smart home products.

This asset injection represents another significant capital restructuring within the TCL system in recent years, still following Li Dongsheng's core logic: placing the most growth-potential assets onto the most suitable capital platform. Therefore, the key question for this acquisition is: what new narrative can the combination of TVs and air conditioners create?

TCL TV Needs a New Story

The surface-level reason for this merger is official—"building a smart home ecosystem to achieve multi-category synergy." Logically, the TV serves as the entry point for the home IoT, while air conditioning is an essential home appliance. Integrating the two is a natural part of the "smart home" puzzle. Additionally, channels can be shared; selling air conditioners alongside TVs in physical stores can better showcase the smart home concept. TCL aims to leverage its strong black goods foundation to achieve a leap in industrial scale, using its core business to nurture new ones.

However, there is a prerequisite: the TV business itself must be strong enough to support other segments. On the surface, TCL Electronics' core TV business is at its peak. In 2025, TCL Electronics' revenue surpassed HKD 100 billion for the first time, reaching HKD 114.583 billion, a year-on-year increase of 15.4%; net profit attributable to the parent company was HKD 2.495 billion, up 41.8% year-on-year. The first half of 2026 is also expected to see similar growth rates.

The continuous improvement in TCL Electronics' performance is inseparable from the steady development of its TV business. In 2025, the display business revenue was HKD 75.797 billion, accounting for 66.2% of total revenue. To develop its TV business, TCL Electronics has been pushing forward globalization and a mid-to-high-end strategy, which has also fueled performance growth. In 2025, large-size TVs accounted for 56.5% of the company's revenue, with international market large-size TV revenue making up 41.5%, serving as the core engine for TV business growth.

With this growth trend, TCL has a real opportunity to surpass Samsung and claim the global top spot in TV sales. According to Omdia global data, Samsung barely held the top spot with 35.27 million units shipped and a 16% market share, but its year-on-year growth was only 0.1%, nearly stagnant. In contrast, TCL's global TV shipments exceeded 30 million units, with a 14.7% market share, ranking second globally. Its year-on-year growth was a robust 5.4%, narrowing the gap with Samsung from 2.9 percentage points to 1.3 percentage points. In the mid-to-high-end Mini LED segment, TCL leads globally with a 31.1% market share.

Compared to competitors, TCL has an industrial chain advantage. For instance, CSOT provides a stable supply of panel resources, and its own factories, combined with contract manufacturer MOKA TV's manufacturing capacity, form a closed loop, giving it an edge in cost control and delivery efficiency. Additionally, after taking over Sony's home entertainment business in the first half of this year, TCL has gained Sony TV chip technology, effectively securing a ticket to the high-end market. With production scale and technical reputation, TCL can combine manufacturing efficiency with premium branding, potentially further gaining pricing power in the industry.

However, the momentum may not be entirely under Li Dongsheng's control. Currently, TCL's TV business is at a crossroads of "peak scale with diminishing returns." Looking at the industry landscape, the global TV market has been stagnant for years. In 2025, global shipments were about 222 million units, a slight year-on-year decrease of 0.2%; the Chinese market was even worse, with annual sales dropping to 27.63 million units, a historic low, with year-on-year declines for four consecutive quarters. In a typical zero-sum market, the industry's total volume ceiling is clear, and share gains can only come from squeezing competitors, making price wars a constant threat. Furthermore, the TV business is heavily dependent on the real estate industry, offering weak resistance to risk, and a single product category struggles to smooth out economic cycle fluctuations.

This is something the "capital maestro" Li Dongsheng would never tolerate. Bringing the air-conditioning business into TCL Electronics is precisely to cultivate a second growth curve.

Is an AI Air Conditioner Promising?

Against the backdrop of long-standing dominance by industry giants like Gree and Midea, TCL air conditioners is a relatively low-profile brand. Although its quality isn't poor, its market presence is small. In 2025, TCL's air-conditioning business generated revenue of HKD 33.8 billion, a 16% year-on-year increase, with net profit of HKD 1.9 billion, up 40% year-on-year. In the first half of this year, TCL's Guangzhou smart manufacturing base for air conditioners was officially put into operation, with plans to produce 100 million units over the next five years. Total sales in 2025 exceeded 22 million units, ranking among the top two Chinese brands by export volume. In markets like Europe and Southeast Asia, TCL air conditioners rapidly grew, capitalizing on extreme heat waves. In the second quarter of 2026, the Western European market saw over 27% year-on-year growth, with France and Northern Europe seeing increases of over 300%; mobile air conditioners were even sold out.

The numbers look good, but compared to competitors, TCL air conditioners isn't even in the mainstream competition. According to data disclosed in Midea's prospectus, based on Frost & Sullivan data, the global top four by sales volume were Midea (27.5%), Gree (17.5%), Daikin (12.3%), and Midea's rival (7.5%). Furthermore, TCL air conditioners has inherent weaknesses that require long-term improvement. For example, brand recognition is lacking. In most consumers' minds, TCL is synonymous with TVs, and its presence in the air-conditioning market is weak. A recent home renovator told AI Lanmei Hui, "When I think of air conditioners, I immediately think of Gree or Midea. I had no idea TCL even made air conditioners." In their view, home appliances are long-term purchases, and they prefer established brands; they'd only consider TCL for TVs.

Additionally, TCL air conditioners has a weak channel foundation. Air conditioners heavily rely on offline dealer networks and installation service systems, and TCL's accumulation in white goods channels is far behind that of Gree and Midea, which have been established for decades. However, AI seems to be an opportunity for TCL air conditioners. Its Xiaolan Wings series features tags like AI fresh air, AI sleep adjustment, and AI comfort temperature control, using AI algorithms to link wind sensation, temperature and humidity, and fresh air volume. Functions include AI intelligent power saving, AI millimeter-wave radar for sleep quality sensing, and multi-scenario commands based on its self-developed Honghu AI large model. On social platforms, some users have reported issues like higher-than-expected operating noise and imprecise AI recognition.

More realistically, the functional premium that AI brings to the entire home appliance industry is not as significant as imagined. A consumer told AI Lanmei Hui, "For air conditioners, I mainly consider price, energy efficiency, and after-sales service. I don't really need AI features. The remote control is enough, and I can also control it with my phone." Moreover, compared to competitors, TCL's AI air conditioner may not be as competitive. For instance, Midea's air conditioners have integrated the DeepSeek large model, Gree has introduced an AI central air-conditioning energy-saving system and its self-developed AI dynamic balancing technology, and Haier and Casarte have upgraded their AI comfort algorithms. Leading brands have hundreds of millions of user data to support their AI development, enabling faster and more accurate model updates and optimizations. These are TCL's weaknesses in building a full-house smart ecosystem.

Fortunately, Li Dongsheng's actions are decisive. Integrating TCL air conditioners into TCL Electronics is a key step in initiating smart synergy.

The 'Merger Maestro' Trapped in Cycles

Looking at the long term, Li Dongsheng is indeed a "capital maestro." In 2004, he pushed for the internationalization of the TV business; in 2019, he promoted the split of the "TCL Group," placing consumer electronics and semiconductor displays under different listed platforms; then came the integration of CSOT and the inclusion of Zhonghuan Semiconductor into the fold; and now, the injection of the air-conditioning business into TCL Electronics.

Besides its TV business, TCL Electronics also operates internet services, solar energy, marketing, smart home, and other innovative businesses. In the solar business, TCL Electronics operates with a light asset model, mainly focusing on residential and commercial distributed solar solutions, rather than manufacturing. The core solar manufacturing (ingots, wafers, cells, modules) is handled by TCL Zhonghuan under TCL Technology. TCL Electronics' solar business revenue in 2025 grew by 63.61% year-on-year to HKD 21.063 billion, showing strong performance, but TCL Zhonghuan has been underperforming. In 2025, TCL Zhonghuan achieved revenue of RMB 29.05 billion, up 2.22% year-on-year, but its net profit attributable to the parent company was a loss of RMB 9.264 billion. Over two years, TCL Zhonghuan's cumulative losses have exceeded RMB 19 billion.

According to Li Dongsheng's vision, TCL Technology is meant to develop two tracks synergistically. In 2025, the semiconductor display business (TCL CSOT) performed strongly, with revenue of RMB 105.24 billion, up 17.4% year-on-year, accounting for 57% of TCL Technology's total revenue. However, the solar photovoltaic segment, TCL Zhonghuan, continues to suffer massive losses. Instead of becoming a second growth engine, it has become a severe drag on TCL Technology's strategic progress. Currently, TCL Zhonghuan remains stuck at the bottom of its cycle, with no clear turnaround in sight, and a market value of about RMB 34.3 billion. TCL Technology holds approximately 30% of TCL Zhonghuan's shares, meaning Li Dongsheng's stake in this entity is worth roughly RMB 10.3 billion. Based on this book value, his initial investment of over RMB 12.5 billion has resulted in a paper loss of over RMB 2.2 billion.

It is entirely possible that Li Dongsheng, a top-tier capital expert, has stumbled with Zhonghuan. Looking at Li Dongsheng's business empire, he has always had a preference for industries characterized by "heavy assets, strong cycles, and extreme competition." Whether it was the aggressive tactics in the home appliance era or the massive counter-cyclical investments in the panel era, he has established a global leading position through extreme cost control and economies of scale. This is perhaps Li Dongsheng's path dependency: believing that as long as scale is large enough and costs low enough, one can always ride the wave by buying the dip during downturns. However, while the solar industry also emphasizes scale and cycles, its technological iteration speed is far faster than panels, and industry barriers are relatively lower, leading to an exponentially higher level of "involution."

Li Dongsheng aims to build a business empire that spans the entire industrial chain, from upstream to downstream, efficiently designing, producing, manufacturing, and distributing globally. Nevertheless, the accumulation of risk from continuous mergers and acquisitions, along with challenges from industry cycle shifts, constantly tests TCL's operational health. The market will wait and see whether the perpetually restless Li Dongsheng can create several more "TCLs."

Has your household ever purchased TCL home appliances?