CICC has released a research report maintaining its 2025/2026 profit forecasts for TCL ELECTRONICS (01070) unchanged, while introducing a 2027 attributable net profit forecast of HK$3.235 billion. The current share price corresponds to a 2026/2027 P/E ratio of 9.9x/8.5x. The firm reiterates its Outperform rating and, considering the valuation roll-forward into the new year, has raised its target price by 24.6% to HK$14.7. This new target implies 2025/2026 P/E multiples of 13.4x/11.5x, representing a potential upside of 35%. CICC's primary viewpoints are outlined below.

The company forecasts a 45% to 60% year-on-year increase in 2025 profit. According to a company announcement: 1) TCL ELECTRONICS expects its adjusted net profit attributable to shareholders to be between HK$2.33 billion and HK$2.57 billion for 2025, representing growth of 45% to 60% year-on-year; the midpoint of this profit range exceeds the target set by its equity incentive plan (HK$2.328 billion). 2) The company is in discussions with Sony regarding a potential collaboration, which may include the establishment of a joint venture to take over Sony's home entertainment business.

TCL remains firmly committed to its global and premiumization strategy, with its core businesses sustaining quality growth. Despite market volatility, TCL has persisted with its focus on premium and large-screen products, driving continuous improvement in the profitability of its domestic sales. In the fourth quarter of 2025, the average online and offline retail prices for TCL-branded color TVs increased by 23% and 3% year-on-year, respectively, significantly outperforming the industry average. CICC anticipates that the company's domestic TV shipment volume in 4Q25 will face relatively limited profit pressure, supported by product mix upgrades. According to forecasts from Sigmaintell, global TV shipments are expected to reach 221 million units in 2025, down 0.7% year-on-year; however, TCL's TV shipments are projected to hit 30.41 million units, up 5.4% year-on-year, securing the second position globally. In North America, the company is actively advancing channel transformation and product mix upgrades, while in Europe, it is expanding channel coverage, contributing to the resilient growth of its overseas operations.

As a global leader in premium televisions, a partnership with Sony could significantly enhance TCL's advantages in the high-end market, overseas channels, and brand strength. 1) Sony focuses exclusively on the high-end segment of the TV market; its global TV shipment market share was approximately 1.8% in the first three quarters of 2025. 2) The announcement indicates that if the transaction proceeds, TCL ELECTRONICS and Sony would hold 51% and 49% stakes in the joint venture, respectively. The JV would be responsible for integrated operations spanning product R&D, manufacturing, sales, and logistics, and would be authorized to use the Sony and BRAVIA brands. 3) CICC believes that if the collaboration materializes, it would allow TCL to strengthen its high-end product portfolio and achieve further breakthroughs in overseas channel presence and brand influence.