TCL Technology Cancels Supporting Fundraising: Is LCD Entering a Harvest Period?
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Author | Huang Yu
On June 2, TCL Technology (000100.SZ) announced the cancellation of issuing shares to raise supporting funds for purchasing assets. This capital raising was originally intended to increase the stake in Guangzhou Huaxing Optoelectronics Semiconductor Display Technology Co., Ltd. ("Guangzhou Huaxing Semiconductor," the operating entity of TCL Huaxing t9 factory).
The funds originally intended for raising will now be resolved by TCL Technology through a combination of its own funds and self-raised funds. Other than this adjustment, there are no other substantive changes in this transaction.
According to a statement by TCL Technology at the end of March, it plans to issue shares and pay cash to acquire a 45% stake in Guangzhou Huaxing Semiconductor. The target asset for this transaction is valued at about 9.32 billion yuan, with about 4.66 billion yuan to be paid via issuing shares and about 4.66 billion yuan in cash.
Under the initial plan, the cash portion was intended to be raised by issuing shares to no more than 35 qualified specific investors. Once the transaction is completed, TCL Technology will directly and indirectly control 100% of Guangzhou Huaxing Semiconductor’s equity.
At the investor communication meeting on June 2, TCL Technology management provided a detailed explanation for the cancellation of the 4.66 billion yuan supporting fund raising.
TCL Technology management stated that, after carefully reviewing the current business situation and development plans, they believe three major changes have occurred in their development stage.
First, the LCD display industry’s healthy competitive structure has been consolidated, and TCL Huaxing has basically passed the peak period of capital expenditures and minority equity repurchases, with the past few quarters showing a turning point in free cash flow and operational performance. Second, TCL Technology’s overall business situation this year has been better than expected.
Third, financing channels such as banks and the bond market are smooth, with financing costs better than expected.
"Based on smooth and low-cost self-raised funding channels externally, the company is confident in supporting core business and key project development." Meanwhile, TCL Technology management emphasized that this proactive cancellation of raising supporting funds will not affect the company's development strategy or overall shareholder return plans.
Financial reports show that in the first quarter of 2026, TCL Technology achieved a total operating income of 43.45 billion yuan, up 8.4% year-on-year; net profit attributable to shareholders of 1.56 billion yuan, up 53.7% year-on-year, setting a new single-quarter high in the past 17 quarters.
At this investor communication meeting, TCL Technology management further pointed out that from 2021 to 2025, is a key window period for capacity construction and structural integration in the global semiconductor display industry. During this time, the company invested in new production lines such as t5 and t9, acquired Suzhou Samsung t10 and Guangzhou LGD t11, and also purchased minority stakes in t6 and t7 lines.
It is revealed that in these five years, TCL Technology spent more than 60 billion yuan on new lines including M&A; additionally, it bought minority stakes from local government industrial funds totaling over 30 billion yuan; during this period, the company raised about 18 billion yuan from equity financing in the capital market, with the rest resolved through operating cash flow and self-raised funds.
Against this backdrop, the proportion of TCL Huaxing net profit attributable to TCL Technology shareholders has significantly increased from about 60% in the first half of 2025 to over 80% in the first quarter of 2026.
Meanwhile, TCL Technology further improved its all-size capacity layout, with LCD capacity climbing to the top two globally.
Information shows that the t9 production line is an 8.6-generation oxide thin-film transistor (TFT) LCD production line. Unlike large-sized TV panels, t9’s main products focus on displays, laptops, tablets, and automotive displays—medium and large LCD panels.
TCL Technology management noted that the acquisition of 45% equity in the t9 production line is currently at the stage of responding to exchange inquiries. After subsequent approval by the exchange and registration by the CSRC, the delivery will progress. If all processes proceed smoothly, this acquisition may complete all consideration payments and business change procedures in the third quarter.
Upon completion of the acquisition, the profits corresponding to the acquisition of the 45% stake in the t9 project will all be reflected in the listed company’s net profit attributable to shareholders.
The reason for continuously increasing investment in LCD capacity during the window period has been previously explained by TCL founder and chairman Li Dongsheng.
He pointed out that the common industry view holds that the next generation of display technology will replace Liquid Crystal Display (LCD) within a relatively short cycle. However, based on TCL's own development experience, he believes that currently there is no technology capable of replacing LCD for large-screen displays.
"In the foreseeable future, LCD will definitely be mainstream in large-screen displays, and with innovations in new technologies such as Mini LED and other quantum dot technologies, the lifecycle of LCD products will be longer, and their competitiveness will be even stronger," Li Dongsheng said.
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