This report does not constitute a rating action. Stronger EBITDA: We raise our growth forecast for TCL Electronics’ EBITDA to about 20% for 2026. This reflects the company's shift to more mid- to high-end TVs and improved internet margins from a growing overseas user base. Inventory buildup: Meanwhile, an inventory buildup could weigh on cash flow this year. Softer global TV demand than market expectations led to a higher June-end inventory. Inventory days also lengthened due to longer shipping times. TCE Electronics had been preparing inventory for the FIFA World Cup in June-July as well as rapidly expanding overseas markets. Potential acquisition synergies: TCL Electronics'announced acquisition of an air conditioning business from the parent group will diversify the company’s
