Orient: Domestic black electronic faucet market share will continue to rise. AI interconnection and RGB backlight will reshape the black electronic market.

Orient releases research report, stating that Samsung's exit will benefit domestic leading black electronics manufacturers by taking over 300,000 TV sales, significantly enhancing the competitive advantage of domestic leading brands. The bank predicts that the domestic market share of leading domestic brands will continue to rise. TCL Electronics (01070) and Hisense Visual Technology (600060.SH) have already achieved cooperation with Google, and brands with overseas Google TV ecosystem adaptation capabilities are more likely to gain a first-mover advantage in the competition for AI TVs and smart home entry. Currently, high-end TVs are forming two parallel upgrade paths: the RGB backlight route and the route prioritizing precise control of brightness and brightness, represented by TCLSQD-Mini LED. Which path will win in the high-end market in the future still depends on the speed of improvement in picture quality experience and cost reduction. Key points from Orient: Samsung's exit from the Chinese home appliance market is expected to boost the domestic market share of TCL and Hisense Visual Technology. On May 6, Samsung officially announced its comprehensive exit from the Chinese home appliance market, retaining only its mobile, storage chip business, and home appliance after-sales service. According to data from Aowei up to March, Samsung's online and offline sales market share in TV and refrigerators were 2.28% and 0.45% respectively, ranking 11th and 20th. The bank predicts that its exit will benefit domestic leading black electronics manufacturers by taking over 300,000 TV sales. Following Sony's partnerships with TCL and Matsushita with Skyworth, Samsung's exit signals that local brands have completed a comprehensive surpass. The competitiveness of local brands has shifted from cost-driven upgrading to "technology + brand" dual-driven, the pricing power in the global high-end market is beginning to loosen, and the bank predicts that this signal will be further perceived by consumers, accelerating the global high-endization of local brands. According to Loto data, in the first quarter of 2026, the top eight mainstream domestic brands in the Chinese TV market and their sub-brands collectively shipped approximately 7.68 million units, accounting for 95.2% of the overall market, of which Hisense, TCL, Skyworth, and Xiaomi together shipped approximately 6.32 million units, accounting for 78.3% of the share. In the same period, Samsung, Sony, Philips, Sharp and other foreign brands collectively shipped approximately 200,000 units, accounting for less than 3%. The competitive advantage of leading domestic brands is significant, and the bank predicts that the domestic market share of leading domestic brands will continue to rise. Google I/O strengthens AI multi-terminal entry, smart home interconnection and AI hardware competition enter the ecological stage. On May 19, Google held the I/O developer conference focused on advancing AI ecological construction with Gemini. AI capabilities extend from software entrances like search, Chrome, Android to hardware terminals like Android XR smart glasses, Google TV, Nest smart homes, etc. AI smart glasses in cooperation with Gentle Monster and Warby Parker support functions such as navigation, messaging, and photography, allowing users to complete some interactions without taking out their phones. Meanwhile, Google launched the Google Home Gemini built-in project, aiming to provide standardized one-stop solutions to help hardware manufacturers quickly develop and launch smart home products that are natively adapted to Gemini, enabling interconnectedness and enhancing whole-house smart experiences. TCL Electronics and Hisense Visual Technology have already achieved cooperation with Google and brands with overseas Google TV ecosystem adaptation capabilities are more likely to gain a first-mover advantage in the competition for AI TVs and smart home entry. RGB Mini LED's dense release intensifies the fierce competition in picture quality. Top brands such as Sony, Hisense, and TCL have released new products around high-end display technology, shifting industry competition from the traditional Mini LED era based on brightness and partition number to color purity and picture quality algorithm capabilities. At AWE 2026, Sony completed the global first public display of true RGB TV picture quality based on its over twenty years of RGB backlight technology accumulation, enhancing the ability for color reproduction through three primary colors control and backlight algorithm optimization. While Sony has collaborated with TCL in the TV business, it still retains product definition rights and operates independently; TCL focuses on production, operation, and marketing, focusing on reducing costs and increasing efficiency. Hisense's RGB Mini LED TVs have entered mass production volume stage. According to Ovi Yun Net's data, the monthly average sales volume of domestic RGB Mini LED TVs in the first quarter of 2026 reached 329% of the monthly average sales volume after March 2025, with Hisense Visual Technology's sales share at 79.4% and Hisense occupying 7 out of 10 positions in the top 10 single-product sales. The bank believes that high-end TVs are currently forming two parallel upgrade paths: one represented by Sony and Hisense in the RGB backlight route, focusing on three primary colors emission, color purity, and picture quality algorithms; and the other represented by TCLSQD-Mini LED, prioritizing control of brightness and precision. Behind these two technological paths are different supply chains and business models, with the RGB route relying more on chips and light control algorithms, and the SQD route relying more on panel and lamp scale. Which path will win in the high-end market in the future still depends on the speed of improvement in picture quality experience and cost reduction. Investment recommendations and investment targets 1) The process of high-end TV development is continuing, and leading companies are expected to benefit. Related entities: Hisense Visual Technology (hold); the acceleration of the RGB Mini LED industrial chain development is expected to benefit the picture quality chip industrial chain, related entities: Shenzhen MTC Co. Ltd (002429.SZ, unrated), Xiamen Changelight (300102.SZ, unrated); 2) The possible overseas expansion of smart home may be catalyzed by Google AI, and related ecological software companies are expected to benefit. Risk warning The continuity of the old-for-new subsidy policy is uncertain, tariff disturbances may occur repeatedly, and industry competition may intensify.