Cyclical Headwinds Pressure Consumer Business, Automotive Display Moat Drives Long-Term Growth

Key Points

Tianma Microelectronics: Cyclical Consumer Headwinds Reverse Short-Term Profits, Automotive Display Moat Secures Long-Term Growth

Near-Term Losses Overshadow Tianma’s Strong Automotive Electronics & Micro-LED Growth Trajectory

Growth Transformation Underway: Tianma Shifts Dependence From Weak Consumer Displays to High-Growth Automotive & New Tech Businesses

Event：Institutional Site Visit & Investor Briefing – July 17, 2026

Participating Institutions：SECF Capital, Shenwan Hongyuan Securities, Galaxy Securities, China Zheshang Bank, and other institutional investment firms

Corporate Speaker：Chen Dan, Investment and Financing Director

For the first half of 2026 (January 1 – June 30), Tianma Microelectronics expects a net loss ranging from RMB 720 million to RMB 750 million, representing a sharp reversal from a net profit of RMB 205.9 million recorded in the year-ago period. For full-year 2025, the company posted a net profit of RMB 167.38 million, with a 0.61% return on equity, a 61.59% debt-to-asset ratio, and earnings per share of 0.0682.

Tianma’s operating profile displays notable structural divergence in 1H2026. Rapid price increases for upstream memory and electronic components, paired with softened global consumer electronics demand, have pressured the company’s consumer display segment, especially its flexible AMOLED smartphone display business. To navigate ongoing cyclical headwinds, Tianma has elevated lean management standards, capitalized on its resilient supply chain and stable customer base, and actively optimized its product and business structure. In the smartphone market, the company is prioritizing high-end product lines to gain greater penetration in flagship models from leading global brands. It is also broadening flexible AMOLED adoption across wearables, automotive displays, and IT display applications. Currently, its flexible AMOLED panels are in mass production for automotive installations and high-end wearable projects for major domestic and international clients. Moving forward, Tianma will continue enhancing its overall product competitiveness to drive operational improvement.

As one of the company’s core strategic verticals, automotive display serves as Tianma’s key long-term growth engine. Through years of global market competition, the firm has built a highly coordinated, system-level capability set spanning product technology, customer relationship management, supply chain governance, financial oversight, quality assurance, and localized on-the-ground support. This integrated framework forms a durable business moat and underpins its strong market leadership. Backed by a full suite of advanced production lines — including LTPS, OLED, high-generation TM19, upgraded TM20 module facilities, and Micro-LED production platforms — Tianma is strengthening its end-to-end automotive display solution capacity and accelerating the commercialization of next-generation display technologies. The company is also advancing R&D and mass production for integrated automotive display assemblies to solidify its near-term, mid-term, and long-term competitive positioning. Tianma will continue scaling and strengthening its automotive business across three core segments: traditional automotive displays, automotive electronics, and new energy vehicle supporting solutions.

Tianma’s automotive electronics segment focuses on delivering integrated automotive display assemblies to top-tier global automakers. The business has undergone full-scale systemic upgrading, evolving from basic display module supply to high-value system-level integration services. The segment began mass shipments to leading international automotive clients in 2023, rapidly scaled its production capacity throughout 2024, and delivered over 30% year-over-year revenue growth alongside meaningful profitability improvement in 2025. Fueled by ongoing customer project rollouts, Tianma’s automotive electronics division has entered a sustained high-growth phase, driving consistent expansion in the company’s overall automotive business scale and product value content.

Tianma continues steady progress in Micro-LED industrialization. In 2025, the company’s joint-venture full-process Micro-LED production line achieved notable manufacturing advancements, enabling high-efficiency, high-precision, high-yield simultaneous transfer of over one million Micro-LED chips. The technical breakthrough has supported commercial adoption in professional PID applications, with small-batch shipments currently underway. Within the automotive segment, Tianma has launched its first standardized automotive-grade Micro-LED display, featuring high light transmittance, modular scalability, and robust long-term reliability. The milestone validates the firm’s successful transition from pure technical R&D to standardized commercial product development in the Micro-LED space.

While maintaining strategic focus on its core display business, Tianma is cultivating new growth avenues by leveraging its decades-long panel manufacturing expertise and advanced production technologies. The company has developed its proprietary Multi-Project Glass (MPG) technology platform, collaborating with industry partners on R&D for panel-level smart antennas, electrochromic smart glass, advanced semiconductor packaging, microfluidic biochips, and optical fingerprint recognition. By deploying mature panel fabrication technologies across diversified industrial use cases, Tianma is building a layered innovation pipeline to foster long-term business diversification. At this stage, its non-display initiatives remain in early incubation with negligible revenue contribution, posing no material impact on current financial results. The scaled commercialization and profitability of these emerging verticals remain uncertain. Tianma will continue increasing R&D investment, iterating product solutions, and expanding market reach to support steady advancement of its non-display innovation portfolio.

The global display industry operates within a highly competitive cross-border landscape, presenting both persistent challenges and structural opportunities. With more than 40 years of specialized experience in small-to-medium-sized displays, Tianma has established full coverage of mainstream display technologies and offers comprehensive customized solutions for consumer, automotive, industrial, and medical display markets. The company prioritizes internal capability enhancement over market rivalry, and continues strengthening its overall competitiveness through deeper collaboration with upstream and downstream industry partners. By benchmarking against global industry leaders, Tianma consistently refines its operational system and technical capabilities.

Risk Disclosure

Key risks include prolonged weakness in global consumer electronics demand, sustained cost inflation for upstream components and raw materials, slower-than-anticipated commercialization of Micro-LED and automotive electronics businesses, execution uncertainty for scaling non-display innovation segments, and intensifying industry competition and pricing pressure.

Outlook

Tianma’s projected 1H2026 net loss reflects temporary cyclical industry pressure rather than structural business decline. Rising revenue contribution from high-margin automotive display and automotive electronics segments will effectively offset ongoing weakness in its consumer business. Accelerated Micro-LED commercialization and gradual maturation of non-display innovation verticals will further extend the company’s long-term growth runway. Driven by sustained product mix optimization and the gradual release of new value drivers, Tianma is well-positioned to rebound from near-term cyclical losses and deliver consistent long-term growth.