TCL Group’s 2Q26 net profit exceeds expectations, CSOT is strong but panel price risk is asymptotic (Morgan Stanley)
TCL Group's preliminary net profit in the first half and second quarter of 2026 exceeded Morgan Stanley's expectations, mainly due to the profit growth of CSOT (TCL Huaxing) and the narrowing of TCL Central's losses.
TCL Group's preliminary net profit in the first half and second quarter of 2026 exceeded Morgan Stanley's expectations, mainly due to the profit growth of CSOT (TCL Huaxing) and the narrowing of TCL Central's losses. However, the report predicts that TV panel prices will decline slightly starting from the third quarter. Morgan Stanley maintains an equal weight rating and is more optimistic about BOE, believing that it has scale advantages and faster progress in glass core substrates. One-sentence conclusion: TCL's short-term performance is outstanding, but the risk of the panel down cycle is gradually approaching. The upside space of its stock price may be limited, and BOE has a more competitive advantage within the sector. Positive/negative: It is positive for TCL Group (000100) in the short term, but negative for the panel industry in the medium and long term. CSOT's positive performance has been partially priced in, and the expected decline in Q3 panel prices is a new risk. Good news for rival BOE. Catalysts: 1) The actual trend of TV panel prices in Q3; 2) Whether TCL Central can continue to reduce losses; 3) Downstream terminal demand (especially TV) shipment data.