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From July 26 to 29, the 2024 China International Digital Interactive Entertainment Expo (China Joy) was held in Shanghai. This exhibition brought together more than 600 well-known companies from 31 countries and regions around the world to participate in the exhibition. The exhibition content is centered on games and extends to more diversified entertainment and cultural content and supply chain ecology.

TCL Huaxing brought a variety of e-sports monitors, notebooks, gaming TVs and e-sports mobile phone screen products to the show. In an interview with Beijing News Shell Finance and other media, TCL Huaxing CEO Zhao Jun said that it is expected that e-sports monitors will grow by 10% year-on-year this year. In the first half of 2024, the revenue of e-sports display products will account for more than 50% of TCL Huaxing's display business.

TCL Huaxing CEO Zhao Jun was interviewed by Beijing News Shell Finance and other media. Photo provided by the interviewee

The display business has become the third largest revenue source for TCL Huaxing

At this exhibition, the TCL Huaxing booth set up TCL Huaxing and TCL Industrial exhibition areas, with multiple product categories on display from e-sports screens, laptop products, to handheld game consoles and e-sports mobile phones, further expanding the e-sports ecosystem and deepening the construction of the "screen universe".

TCL Huaxing began to enter the IT display field in 2019. In 2021, TCL Huaxing acquired the Suzhou Samsung 8.5-generation line, which is now the TCL Huaxing Suzhou base (t10 production line), which is the main production base for e-sports display products.

In 2022, TCL Huaxing's Guangzhou T9 project was officially put into production. It is a high-generation production line specializing in the production of high-end IT and professional display products, and is compatible with high-generation panel production lines of LCD and Micro LED.

Zhao Jun, CEO of TCL Huaxing, said that IT business is one of the strategic growth points of TCL Huaxing. Five years ago, it started with e-sports monitors and its global market share has grown rapidly. In the future, it will continue to provide greater support to the IT business in terms of technology layout and production line expansion.

"Since last year, TCL Huaxing has begun to explore IT business based on OLED technology, develop flagship IT products, and focus on high-end flagship laptops and tablet products. At present, TCL Huaxing's production lines and technology layout have covered from amorphous silicon production lines to IGZO production lines, as well as LTPS production lines and OLED production lines." Zhao Jun introduced that the company has established joint laboratories with Lenovo, Xiaomi, ViewSonic and other companies to explore the future possibilities of products together.

"Currently, TV panels and mobile phone panels are the two largest application categories in TCL Huaxing's business. However, the display business, including e-sports monitors, commercial monitors, and IT business including laptops and tablets, is growing very fast and has now become the third pole of TCL Huaxing's business." Zhao Jun introduced that currently, the revenue from e-sports display products accounts for more than 50% of TCL Huaxing's display business.

Beijing News Shell Finance reporter noted that TCL Technology expects its net profit attributable to shareholders of the parent company to be 950 million yuan to 1.05 billion yuan in the first half of 2024, a year-on-year increase of 180% to 210%. In the first half of the year, the display business is expected to achieve a net profit of 2.58 billion yuan to 2.88 billion yuan, a year-on-year improvement of more than 6 billion yuan, of which the second quarter is expected to achieve a net profit of 2.04 billion yuan to 2.34 billion yuan.

"In the large-size field, the improvement in the pattern of further increasing industry concentration and the trend of large-size on the demand side have driven the reasonable recovery of prices of major products. The company will continue to adhere to the large-size high-end strategy, accelerate the expansion of medium-size IT and automotive businesses, enhance its market position in small-size, expand VR/AR and special display markets, and achieve sustained and healthy development of the semiconductor display business." TCL Technology pointed out in its performance forecast for the first half of this year.

The price of e-sports display products is becoming more and more affordable

The e-sports screen market is also undergoing differentiation. According to a report by Luotu Technology, in the first half of this year, online e-sports display sales in mainland China grew by 30% year-on-year. Offline low-priced e-sports display screens grew rapidly, while mid- to high-end price segments showed compression.

Zhao Jun said that in recent years, e-sports monitors have maintained a rapid growth rate. It is predicted that by 2028, the e-sports display market will have an annual compound growth rate of about 10%, and he is optimistic about the prospects of the e-sports market.

How has TCL Huaxing's e-sports display products performed this year? Zhao Jun said that this year's display products are expected to maintain a small single-digit growth, and e-sports monitors may have a growth rate of about 10%. In the first half of this year, the growth rate of TCL Huaxing's e-sports display reached 20%.

Regarding the current e-sports display market, Zhao Jun introduced that there are two phenomena in the current e-sports display market: one is the continuous upgrading of technology and specifications, and the other is the continuous decline in market prices of entry-level and mainstream products. This is a normal phenomenon. It is precisely because the prices of e-sports display products are becoming more and more affordable that more consumers are willing to choose e-sports display products. This is a good thing.

In response to the continuous decline in prices of mainstream and entry-level products, Zhao Jun said that TCL Huaxing is also fully prepared. TCL Huaxing's main factories for producing e-sports products are the 8.5-generation line in Shenzhen, the 8.5-generation line in Suzhou, and the 8.6-generation line in Guangzhou. The cutting efficiency and cost competitiveness of the production lines are constantly improving.

"For consumers, low-end and entry-level do not mean a poor consumer experience. In the future, we will continue to upgrade the specifications of entry-level e-sports products while providing more affordable prices, so that more and more ordinary consumers can experience better products and gaming experiences at relatively affordable prices." Zhao Jun mentioned.

What is the focus of industry competition in the field of e-sports display at present? Zhao Jun mentioned that there are two main focuses of competition. One is to upgrade products and technologies around the core experience of e-sports products. In the view of TCL Huaxing, the core experience of e-sports products is "three highs and one fast" (high curvature, high contrast, high refresh rate, and fast response speed). In addition, as the post-90s, post-00s, and even post-10s become players of e-sports products, they pursue personalization more. The core competitiveness of TCL Huaxing lies in having new technologies across the entire product line to meet the different needs of customers. It not only has cutting-edge display technologies such as HVA, HFS, MiniLED and printed OLED, but also covers TVs, professional e-sports display equipment, smart phones, etc., which can provide consumers with diversified and personalized experiences.

In recent years, the TV power-on rate has been decreasing. Zhao Jun said that the reasons for the decreasing TV power-on rate are very complex, and the key is to enhance the attractiveness of TV products, and to upgrade the display technology to bring consumers a more shocking and immersive consumption experience.

Zhao Jun mentioned that in terms of super-large-size TVs, what needs to be paid attention to is whether consumers are willing to watch them and whether they can move them in. In the process of upgrading the size of TVs, TCL Huaxing has also been continuously reducing costs, making the price of super-large-size TVs more and more affordable. In the past few years, the size of TCL Huaxing TVs has been upgraded, and the price has remained basically unchanged, which is also the result of market competition.

"In short, the TV industry ecosystem is relatively complex. If we want consumers to be happy to buy TVs and watch TVs, it is not enough to rely solely on display panel practitioners. All participants in the ecosystem need to work together. With the advent of the AI ​​era, TV may become the smart center or control center of the home, and the role it plays may be different from the past." Zhao Jun said.

Chen Weicheng, financial reporter of Beijing News Shell

Edited by Bai Huabing Proofread by Zhao Lin