Sony Group is spinning off control of its home entertainment business, including the flagship Bravia television brand, to Chinese rival TCL Electronics, the latest Japanese company to cut exposure in the low-margin segment.

The PlayStation-maker said Tuesday it will sell a 51% stake in its home entertainment arm to TCL. The two companies intend to set up a joint venture that will begin operations in April 2027 to produce televisions carrying the Sony and Bravia names but use TCL¡¯s display technology, according to a statement.

Shares of TCL soared more than 16% in Hong Kong, notching their biggest intraday gain since April 2025. Sony¡¯s stock dipped 0.9% in Tokyo on Wednesday.

TCL, one of China¡¯s oldest and largest electronics conglomerates, has for years tried to forge a major overseas business. It¡¯s grown into a major budget TV name in the U.S. and has previously licensed the BlackBerry and Alcatel brands for mobile devices.

It took over one of the most prominent display booths at the CES 2026 conference in Las Vegas this year, supplanting Samsung Electronics, and will now seek to leverage the Sony brand and technical expertise to continue its expansion.

Tokyo-based Sony has focused on expanding its portfolio of intellectual property assets ¡ª anime, live-action film, music and sports broadcasts ¡ª while trimming its presence in consumer electronics. Faced with declining margins and growing price competition, it¡¯s already sold off or shuttered its operations in PCs, tablets and portable media players as well as low-end TVs, despite the global recognition of the Sony brand.

Japanese companies have lost ground in TVs to Chinese and Korean rivals, with companies such as Toshiba, Hitachi, Mitsubishi Electric and Pioneer exiting the business altogether while others, such as Panasonic and Sharp, have de-emphasized the business in their growth strategies.

Sony Bravia TVs survived due to their positioning at the premium tier of the market, where consumers are willing to pay more for high-end picture and sound quality. The company¡¯s longtime marketing positioned the hardware as an extension of the Sony creative ecosystem, a way to experience content as intended by creators using Sony gear.