Author | Gao Linglang

Editor | Wang Gefa

On the evening of July 16, TCL Electronics unveiled its plan to acquire a 51% stake in TCL's air conditioning business for HK$5.61 billion, utilizing a blend of cash and share issuance.

Following this announcement, TCL Electronics' stock price took a nosedive, closing nearly 12% lower and shrinking its market value to around HK$34 billion at one juncture.

This move signifies TCL Electronics' second significant foray into its core business this year, following a TV joint venture pact with Sony in January.

Remarkably, just three days prior to this deal's announcement, TCL Technology and TCL Zhonghuan, both integral parts of the TCL Group, revealed their interim results. These results highlighted substantial profit growth in the display panel business, while the photovoltaic subsidiary continued to post losses.

Within days, two major listed entities under TCL made strategic moves, unveiling three primary business lines—home appliances, displays, and photovoltaics—and prompting the market to reevaluate the capital operation pace of this home appliance behemoth.

According to the announcement, TCL Electronics is set to acquire 100% of TCL AeroWell, which indirectly holds a 51% stake in TCL Air Conditioner (Zhongshan) Co., Ltd., the actual operator of TCL's air conditioning business.

The total transaction value stands at HK$5.61 billion, with approximately HK$5.443 billion being financed through the issuance of 360 million new shares at HK$15 each, and the remaining HK$167 million in cash.

Given that TCL Electronics and the controlling shareholder of TCL's air conditioning business are both subsidiaries of TCL Industries, this transaction is deemed a related-party deal. It necessitates approval from independent shareholders and is expected to finalize in the fourth quarter of this year.

Business registration records indicate that TCL AeroWell was established in October of the previous year and acquired the 51% stake from TCL Industries for approximately RMB 1.8 billion just a month later. Now, it is divesting this stake to TCL Electronics for roughly RMB 4.8 billion, realizing a paper gain of nearly 170%.

The sellers encompass a wholly-owned platform of TCL Industries, entities under CPE Source Peak, and employee stock ownership platforms of TCL Air Conditioner and TCL Industries.

Upon completion of the share issuance, TCL Industries' stake in the listed company will decrease from 54.54% to 51.51%, with no alteration in actual control.

From a business standpoint, TCL Air Conditioner sold over 22 million units in 2025, with exports constituting 76%. The company reported annual revenue of HK$33.8 billion, a 16% year-on-year increase, and net profit exceeding HK$1.9 billion, a roughly 40% year-on-year surge, demonstrating significantly stronger profitability than TCL Electronics' existing TV business.

Industry projections indicate that the global HVAC market will expand from $564.8 billion this year to $1.2 trillion by 2035.

Guolian Minsheng Securities' research report suggests that if the transaction proceeds smoothly, TCL Electronics could transition from a traditional color TV platform to a comprehensive home appliance group encompassing more categories, with potential synergies between TV and air conditioning businesses in channels and R&D. However, fluctuations in overseas raw material prices pose a short-term risk.

Some industry insiders speculate that if TCL Electronics can bolster its domestic air conditioning channel weaknesses, it could potentially disrupt the market currently dominated by Gree, Midea, and Haier.

Revisiting July 13, the interim reports simultaneously disclosed by TCL Technology and TCL Zhonghuan also garnered market attention.

TCL Technology anticipates net profit attributable to shareholders for the first half to range from RMB 3.7 billion to RMB 3.92 billion, a 96% to 108% year-on-year increase, primarily driven by net profit exceeding RMB 3.8 billion from TCL Huaxing's display business.

However, TCL Zhonghuan, the photovoltaic subsidiary, remains in the red, projecting a loss of RMB 3 billion to RMB 3.3 billion for the first half. Although this marks an improvement from last year's loss of RMB 4.242 billion, market sentiment remains cautious.

Following the announcement, TCL Zhonghuan's stock price dipped nearly 4%, while TCL Technology's surged over 6%. TCL Zhonghuan's persistent losses have prompted the market to reassess TCL Technology's 2020 acquisition of Tianjin Zhonghuan Group for RMB 12.5 billion, marking its foray into the photovoltaic sector.

Wind data reveals that during the photovoltaic industry's expansion cycle, TCL Zhonghuan's performance doubled. However, with industry overcapacity and product price declines, the company incurred net losses exceeding RMB 9 billion in both 2024 and 2025, transforming the photovoltaic business from a growth engine into a liability.

In contrast, TCL Technology's RMB 9.325 billion acquisition of the remaining 45% stake in Guangzhou Huaxing Semiconductor in March, fully owning the high-end display assets, is viewed as a strategic move to focus on core business and consolidate boundaries, in stark contrast to the ongoing support for the photovoltaic sector.

From TCL Electronics' acquisition of the air conditioning business to TCL Technology's integration of display assets and the continued pressure on the photovoltaic business, TCL Group's capital operations in the first half of this year clearly exhibit a blend of expansion and consolidation.

Core display and color TV businesses are expanding through acquisitions to solidify their advantages. Businesses with strong cyclicality and short-term challenges, such as photovoltaics, are passively contracting.

For actual controller Li Dongsheng, the crux lies in balancing resource allocation among multiple listed platforms to determine whether this round of integration can genuinely enhance the group's overall value.

Disclaimer: The content of this article is for reference only. The information or opinions expressed herein do not constitute any investment advice. Readers are advised to make investment decisions with caution. -END-