TCL Huaxing acquired 80% equity of Zhaoyuan Optoelectronics for 490 million yuan, adding more LED up

On December 26, TCL Technology (000100.SZ) issued an announcement stating that its subsidiary TCL Huaxing Optoelectronics Technology Co., Ltd. had successfully won 80% equity and related creditor's rights of Fujian Zhaoyuan Optoelectronics Co., Ltd. held by Fujian Province Electronic Information (Group) Co., Ltd., with a final transaction price of 490 million yuan. The core goal of this transaction is to improve TCL China Star's strategic layout in the field of next-generation display technology, strengthen core technology reserves, and then build sustainable industry competitiveness. After the transaction is completed, Fujian Zhaoyuan Optoelectronics will officially become a holding subsidiary of TCL China Star, which also marks that TCL China Star has fallen a key step in the layout of the LED display upstream industrial chain and has taken an important step towards the goal of vertical integration of the entire industrial chain.

The announcement disclosed the details of this transaction. The underlying assets were officially listed for transfer at the Fujian Province Property Rights Exchange Center on November 28, 2025. In addition to the 80% equity of Zhaoyuan Optoelectronics, it also covered the transferor's all creditor's rights to the underlying company as of March 31, 2025 of 1.759 billion yuan, and the principal of 1.64 billion yuan of interest and penalty interest generated from April 1, 2025 to March 31, 2026. The final transaction price remains consistent with the listing price.

As a global leading company in the field of semiconductor displays, TCL China Star has clear strategic considerations for this acquisition. The announcement clearly pointed out that the transaction aims to help TCL China Star independently control the design and manufacturing of LED chips, create a vertically integrated system for the entire industry chain from LED chips to display modules, and build an independently controllable supply chain ecosystem. In fact, TCL Huaxing has been continuing to deepen its layout in the semiconductor display field in recent years. In September 2025, it successfully held a mass production ceremony for COB direct display products of the MLED project at its Suzhou base. Its first Mini LED product, the P1.2 COB display, has been simultaneously achieved. Mass production has been rolled off the line, and this breakthrough has laid a solid foundation for it in the industrialization of MLED display technology.

As the core basic material of the display industry, LED chips directly determine the image quality, energy efficiency level and reliability of terminal display products. They are a key link with great strategic value in the industrial chain. TCL Technology stated in the announcement that based on the company's long-term development plan, entering the LED chip business is an important measure to extend to the upstream industrial chain. It can effectively break down supply barriers in key links, achieve independent control of core resources, and gradually tap and enhance the industry. The value of chain integration enhances overall competitive resilience.

Judging from the situation of the target company, Zhaoyuan Optoelectronics 'main business focuses on LED epitaxy and chips. It has a complete LED chip production line, large-scale production capacity and a solid business foundation. Its products cover many high-value applications such as backlights, Mini LED direct displays, and car lighting., with outstanding relative competitiveness in relevant segments. However, the announcement also mentioned that the unreasonable product structure led to low gross profit, which was the main reason for Zhaoyuan Optoelectronics 'previous losses. Financial data shows that the company achieved operating income of 880 million yuan and a net loss of 389 million yuan in 2024; from January to October 2025, operating income was 710 million yuan and a net loss of 299 million yuan.

Regarding the value of this acquisition, the announcement clarified two core directions. On the one hand, TCL Huaxing will build on the existing assets and business of Zhaoyuan Optoelectronics to accelerate the establishment and integration of the LED vertical industrial chain system, help the research and development of Mini/Micro LED high-end display technology breakthrough, and accelerate its application in high-end TV, Commercial large-screen, car displays and other industrial applications. On the other hand, TCL Huaxing will give full play to its advantages to empower Zhaoyuan Optoelectronics in multiple dimensions such as manufacturing, technology, and market, and coordinate its existing business and technical resources in the fields of direct display, vehicle-mounted and backlight to introduce high-quality major customer resources help Zhaoyuan Optoelectronics enhance its product competitiveness and scale effect, ultimately improve its profitability, and achieve coordinated development between the two parties.