Keytakeaway

ThecompanyisagloballeaderinTVandIFPDOEMmanufacturing.In2025,demandintheIFPDandTVOEMindustriesdeclined.Thecompany’ssmartTVrevenuescaleandsharedecreased,butsmartinteractivedisplayandinnovativedisplaybusinessesgrewagainstthetrend.In2026Q1allthreemajorcorebusinessesachievedgrowthinbothvolumeandvalue.Meanwhile,benefitingfromdecliningpanelprices,thecompany’sgrossmarginrecordedYoYimprovementfortwoconsecutivequarters.Astheimpactofassetimpairmentprovisionsweakens,togetherwitharecoveryinindustrydemandandcontinuedrapidgrowthofinnovativedisplayproductsandproprietarybrands,revenueandprofitareexpectedtoreturntoanupwardtrendin2026.

Event

OnApril19,2026,KTCreleasedits2025annualreport;onApril29,2026,KTCreleasedits20261Qreport.

ThecompanyreportedrevenueofRMB14.473bnin2025(-7.14%YoY),withnetprofitattributabletoshareholdersoftheparentcompanyofRMB505mn(-39.35%YoY),andanetmarginof3.49%(-1.85pct);amongwhich,inQ4revenuereachedRMB3.693bn(-11.98%YoY),netprofitattributabletoshareholdersoftheparentcompanywasRMB3mn(-99.04%YoY),andnetmarginwas0.07%(-6.49pct).In1Q26,revenuereachedRMB3.492bn(+11.14%YoY),netprofitattributabletoshareholdersoftheparentcompanywasRMB155mn(-27.64%YoY),andnetmarginwas4.45%(-2.38pct).

Risks

1)Declineinmarketdemand:TheglobalTVmarkethasenteredastageofstock-basedcompetition.DevelopedcountriesandregionslikeEurope,theUS,andJapanareshowingsignsofdemandexhaustion.Highinflationisalsoerodingconsumers'realpurchasingpower,leadingtosustainedsluggishdemandforTVshipments.AccordingtoRUNTOdata,globalTVshipmentsareexpectedtoreach221mnunitsin2025(-0.7%).AccordingtoRUNTOTechnologydata,China’sTVshipmentswere32.895mnunitsin2025(-8.5%).Lookingahead,theTVmarketenvironmentisunlikelytoseefundamentalchanges.

2)Panelpricerebound:Thepersistentdeclineininventorylevelsatleadingpanelmanufacturers,coupledwithexpandedproductioncuts,reinforcedthebalancebetweenmarketsupplyanddemand.AccordingtodatafromAVCRevo,pricesforTVpanelsofvarioussizeshavestoppedfallingsinceOctober2022andhavesubsequentlyexperiencedmodestincreases.ComparedtoOctober2022,theaveragepricesfor75/65/55/50/43/32-inchTVpanelsincreasedbyUSD72/73/52/40/17/10respectivelyasofJune2024.

3)RMBexchangeratefluctuations:Long-termexchangeratefluctuationscanimpactthebusinessstrategiesofforeigntradeenterprises.TheUSDexchangeratehasbeensubjecttosignificantshort-termfluctuations.AccordingtodatafromtheChinaForeignExchangeTradeSystem,thecurrentspotexchangerateofUSDtoRMBisaround6.9.

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