[中报]TCL科技(000100):2024年半年度报告（英文版）
原标题:TCL科技:2024年半年度报告（英文版） INTERIM REPORT 2024 August 2024 Part I Important Notes, Table of Contents and Definitions The Board of Directors (or the “Board”), the Supervisory Committee as well as the directors, supervisors and senior management of TCL Technology Group Corporation (hereinafter referred to as the “Company”) hereby guarantee the factuality, accuracy and completeness of the contents of this Report and its summary, and shall be jointly and severally liable for any misrepresentations, misleading statements or material omissions therein. Mr. Li Dongsheng, the person-in-charge of the Company, Ms. Li Jian, the person-in-charge of financial affairs (Chief Financial Officer), and Ms. Jing Chunmei, the person-in-charge of the financial department, hereby guarantee that the financial statements carried in this Interim Report are factual, accurate, and complete. All the Company’s directors attended the Board meeting for the review of this Interim Report and its summary. The future plans, development strategies or other forward-looking statements mentioned in this Report and its summary shall NOT be considered as promises of the Company to investors. Therefore, investors are kindly reminded to pay attention to possible investment risks. The Company has no interim dividend plan, either in the form of cash or stock, nor for the conversion of capital reserve into share capital. This Report and its summary have been prepared in both Chinese and English. Should there be any discrepancies or misunderstandings between the two versions, the Chinese version shall prevail. Table of Contents Part I Important Notes, Table of Contents and Definitions ........................................................... 2 Part II Corporate Information and Key Financial Information ................................................... 6 Part III Management Discussion and Analysis ............................................................................... 9 Part IV Corporate Governance ...................................................................................................... 31 Part V Environmental and Social Responsibility .......................................................................... 35 Part VI Significant Events ............................................................................................................... 44 Part VII Changes in Shares and Information about Shareholders ............................................. 57 Part VIII Preferred Shares ............................................................................................................. 65 Part IX Bonds ................................................................................................................................... 66 Part X Financial Report .................................................................................................................. 69 Documents Available for Reference (I) The financial statements signed and stamped by the person-in-charge of the Company, the Chief Financial Officer and person-in-charge of the financial department. (II) The originals of all company documents and announcements that were disclosed to the public during the Reporting Period. Definitions
Part II Corporate Information and Key Financial Information I. Corporate Information
1. Contact Information of the Company Whether the registered address, office address and their zip codes, website address and email address of the Company changed during the Reporting Period. □ Applicable ? Not Applicable No changes occurred to the registered address, office address and their zip codes, website address, email address and other contact information of the Company during the Reporting Period. Please refer to the Annual Report 2023 for details. 2. Media for Information Disclosure and Place Where This Report is Lodged Whether the media for information disclosure and place where this report is lodged changed during the Reporting Period. □ Applicable ? Not Applicable No changes occurred to the name and website of the stock exchange website and media on which the Company discloses its Interim Report and the place for lodging such reports during the Reporting Period. Please refer to the Annual Report 2023 for details. 3. Other Information Whether other information changed during the Reporting Period. □ Applicable ? Not Applicable IV. Key Accounting Data and Financial Indicators □Yes ?No
1. Differences in Net Profits and Equity under CAS and IFRS □ Applicable ? Not Applicable There is no difference in net profits and net assets between the financial statements prepared in accordance with International Accounting Standards (IAS) and Chinese Accounting Standards (CAS) for the Reporting Period of the Company. 2. Differences in Net Profits and Equity under CAS and Foreign Accounting Standards □ Applicable ? Not Applicable There is no difference in net profits and net assets between the financial statements prepared in accordance with foreign accounting standards and Chinese Accounting Standards (CAS) for the Reporting Period of the Company. 3. Reasons for Accounting Data Differences Above □ Applicable ? Not Applicable VI. Non-Recurring Gains and Losses ? Applicable □ Not applicable Unit: RMB
□ Applicable ? Not Applicable The Company has no other profit and loss items that meet the definition of non-recurring profits and losses. Notes on non-recurring profit and loss items that which is listed in the Explanatory Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the Public—Non-Recurring Gain/Loss shall be used to define Recurring Gain/Loss items □ Applicable ? Not Applicable The Company does not have any non-recurring profit and loss items listed in the Explanatory Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the Public—Non-Recurring Gain/Loss that are defined as recurring profit and loss items. Part III Management Discussion and Analysis I. Company-related Industry Outlook During the Reporting Period In the first half of 2024, political and economic unpredictability continuously increased worldwide, with intensified geopolitical conflicts and re-balancing of international trade systems. Meanwhile, major economies grappled with persistent inflationary pressures, resulting in heightened policy uncertainties and subpar global economic growth. In response to the complicated challenges, the Company focused on the development of its display business and new energy photovoltaic business, enhanced the resilience of its business, and optimized its competitive edge in pursuit of high-quality and sustainable development. During the Reporting Period, TCL TECH. achieved a revenue of RMB80.224 billion; a net profit of RMB995 million attributable to the shareholders of listed companies, which is an increase of 192.28% year-on-year; and a net operating cash flow of RMB12.633 billion. Major factors that influenced the Company’s performance included: the positive turnaround of the supply-demand relationship in the display industry, the steady price appreciation of mainstream products, the Company’s proactive optimization of business strategies and business structure, and significantly improved profitability. During the Reporting Period, the display business achieved an operating revenue of RMB49.877 billion, with a year-on-year increase of 40.39%, and a net profit of RMB2.696 billion, with a year-on-year increase of RMB6.145 billion. The trade of the global energy transition persisted, with increasing demand for installed capacity in the new energy photovoltaic industry. Nonetheless, industry-wide supply-demand discrepancies resulted in a substantial year-on-year decline in photovoltaic product prices. During the Reporting Period, TZE achieved a revenue of RMB16.213 billion, with a year-on-year decrease of 53.54%, which resulted in TCL Technology's net profits attributable to the parent company decreased by RMB-914 million. The Company strengthens its competitive edge in industry scale and leadership by enhancing its core competencies, building a solid operational foundation, and optimizing its production capacity and product portfolio. As the competitive landscape of the display industry continues to improve, leading manufacturers have established a significant scale advantage. During the Reporting Period, the Company’s display segment strategically realigned its production capacity and product structure on the basis of incremental markets and continuously increased its market share, with its TV panel shipments ranking No. 2 globally, MNT panel shipments jumping to No. 2 globally, and ranking among the top 3 flexible OLED manufacturers in terms of shipments. At the end of the Reporting Period, the Company’s monocrystalline silicon production capacity for its new energy photovoltaic segment stood at 190GW. Cumulative shipments of photovoltaic materials during the Reporting Period amounted to approximately 62GW, reflecting an 18.3% year-on-year increase. The Company ranked first in the industry with a 23.5% comprehensive market share for silicon wafers. The Company implements a strategic approach that focuses on fortifying its core competencies and rectifying shortcomings, to bolster the competitive edge of its core business segments, and increase both efficiency and effectiveness. The Company’s display business capitalized on the technological capabilities of its high-gen production lines to lead the continuous upgrading of larger-sized specification products, and to grasp the iterative demand for IT products fueled by the AI revolution, to fill the gap in its mid-sized production capacity (e.g., the t9 production line) and product layout. The small-sized OLED business successfully implemented a high-end and differentiated product strategy. Relying on its advantages in leading G12 and N-type wafer technology, Industry 4.0, and flexible manufacturing processes, the Company’s new energy photovoltaic business played a synergistic role across the core sections along the photovoltaic value chain, and ultimately shored up the relative advantages in cost efficiency to navigate industry cycles through relative competitiveness. With the implementation of its global strategy, the Company has built a globally integrated business network anchored in the Chinese domestic market, and created a comprehensive global industrial ecosystem. The Company’s display business improved its layout in its panel module plant in India and in its overseas business platform, to strengthen its capacity to serve global customers and partners and satisfy the incremental needs of markets worldwide. The Company’s new energy photovoltaic division is pursuing a cautious yet determined globalization strategy, diligently assessing and exploring potential industrial projects in strategic global locations. The Company will form a strategic partnership with its Saudi Arabian counterparts to establish the largest overseas crystalline silicon wafer manufacturing facility to date. By fully capitalizing on MAXEON’s distinctive market advantages and technological innovations in international markets, the Company competitive position on a global scale. Through strategic realignment, the Company enhances its capabilities, streamlines processes and structures, and establishes a diverse and globally integrated talent ecosystem. The Company’s strategy sets the course for future corporate growth, while its organizational capabilities provide the foundation for its operations. The Company has adopted a customer-centric business model, and seamlessly integrated value creation and value realization processes. By building a robust, agile, and flat organizational structure, it has improved decision-making efficiency and responsiveness to customer and market demands. Furthermore, the Company has implemented a clear accountability framework for its industrial operations, emphasizing employee development and talent acquisition to bolster its organizational capacity. A diverse and inclusive talent ecosystem is supporting the Company’s strategic pursuit of global leadership. Looking ahead, as some companies shut down or divest their production capacities in the industry, the display industry will see further optimization of its supply-side structure. Meanwhile, such trends as large-size displays and artificial intelligence will promote steady growth of display demand, and a sound supply-demand relationship is expected to drive continuous improvement in the Company’s display business profitability. While the photovoltaic industry remains at the bottom of the cycle, the Company’s new energy photovoltaic business is taking a proactive stance. By accelerating organizational transformation, focusing on strengthening core competencies and addressing weaknesses, and enhancing its operational resilience, the Company aims to navigate through the industry cycles with a competitive edge. By upholding the spirit of "Venturing Midstream and Striving to Win", the Company will firmly grasp the opportunities brought by transformations in the technology manufacturing industry and the global energy structure, and continue to implement the business strategies of "improving operational quality and efficiency, enhancing strengths to shore up weaknesses, innovation-driven development as well as accelerating global expansion" in order to achieve sustainable, high-quality development and take on a leading role in the global market. II. Main Businesses of the Company During the Reporting Period The Company focused on the development of the core business of displays and new energy photovoltaics and other silicon materials, and was committed to achieving the strategic goal of global leadership.
(I) Display Business Global TV retail sales remained sluggish in the first half of 2024, but the optimization of the supply-side competitive landscape and the trend towards on demand production have pushed the industry onto a trend of healthy and sustainable development. TV panels have a steady and moderate increase in prices driven by supply-side factors, e.g. maintenance shutdowns during the Chinese New Year, and demand-side factors, e.g. inventory buildup for sporting events and the trend toward larger- sized TV panels. Small and medium-sized panels have experienced a rebound in sales, fueled by hardware product innovation and replacement demands, resulting in structural price hikes. By leveraging its strengths in terms of scale and efficiency, TCL CSOT has consistently optimized its business and product mix with favorable price increases for key products, and significantly boosted operating performance. During the Reporting Period, the display business achieved a revenue of RMB49.877 billion, with a year-on-year increase of 40.39%, and a net profit of RMB2.696 billion, with a year-on-year increase of RMB6.145 billion while recording a profit of RMB2.157 billion in the second quarter, with a year-on-year increase of 300.19%. The display business achieved a net cash flow from its operating activities of RMB13.2 billion, which is an increase of 60.9% from the same period last year. In its large-sized products business, TCL CSOT leveraged its advantages in terms of high-gen production lines and synergy with the industry chain, and led the upgrading and high-end development of large-sized TV panels. Capitalizing on the manufacturing efficiency and process advantages of its G8.5 and G11 high-gen production lines, TCL CSOT led the way in improving image quality and reducing energy consumption for large-sized products, and collaborated with strategic customers to enhance the penetration of premium TVs in the market and elevate the value of key segments alongside the industry chain. During the Reporting Period, the Company consolidated its No. 2 position in terms of global market share of TV panels, with 81% of the shipment area for products above 55 inches, and 55% of the shipment area for products above 65 inches, with the average size increased by 1.2 inches compared to the same period of the last year; meanwhile, 55- inch and 75-inch products ranked No. 1 in the world, with the market share of 65-inch products ranked No. 2 globally. In commercial markets such as interactive whiteboards, digital signage, and splicing screens, the Company ranked among the top three in terms of global market share. In the mid-size panel segment, TCL CSOT seized growth opportunities in niche applications by deepening cooperation with new business clients in IT and vehicle-mounted devices, and enhancing product competitiveness and market share. Aligned with mid-sized IT and vehicle-mounted devices, the t9 production line made steady progress in terms of product development and customer acquisition. The Company further diversified its product portfolio with IGZO oxide products put into SoP and shipments, and the Gen 6 LTPS line undergoing rapid product upgrades. Riding on the worldwide e-sports market and commercial PC replacement needs in Europe and the Americas, the Company significantly increased its monitor shipments, which are now ranked second globally. Our gaming monitors for e-sports hold the largest market share worldwide. Additionally, notebook and tablet shipments have shown steady growth, with our LTPS notebooks ranked second and LTPS tablets ranked first globally. We have continued to focus on the premiumization and large-size trends in vehicle-mounted devices, the shipment area of LTPS car screens has ascended to the third largest in the world. In the field of small size, TCL CSOT drives business development with technological innovation continuously optimizing the product and customer mix, and achieving significant growth in OLED shipments. In the first half of the year, the Company’s LTPS smartphone panel shipments secured the second position globally. Our flexible OLED smartphone panel shipments hit 39 million units, marking a substantial 180% year-on-year growth, and our market share climbed to third place globally. Furthermore, we ranked fourth globally in terms of foldable display shipments. The Company has pioneered innovative technologies in flexible OLEDs, e.g. foldable displays, LTPO, Pol-Less, and FIAA ultra-narrow bezels. As a supplier for top-tier flagship smartphone brands, we have successfully elevated our average selling prices by increasing high-end products. The global market for display terminals maintained a steady pace throughout the year. The increasing demand for larger sizes will continue to fuel growth in the overall display segment. The industrial supply and demand. Corporate profitability is recovering with reasonable business returns under favorable circumstances. Recently, TCL CSOT participated in the bidding of 70% of LG Display (China) Co., Ltd. and 100% of LG Display (Guangzhou) Co., Ltd., and has been chosen as the preferred bidder. This potential acquisition will enable TCL CSOT to diversify its display production line technologies and further consolidate the industry. TCL CSOT is committed to fostering a healthy and sustainable industry, driving profitability, and enhancing overall industry value. (II) New Energy Photovoltaics and Other Silicon Materials Business In the first half of 2024, global photovoltaic terminal installations continued to grow steadily. However, the rapid release of production capacity across the supply chain in the photovoltaic industry has led to further supply-demand imbalances and intensified short-term competition. In the second quarter of 2024, prices throughout the main industry chain product fell below costs, causing net losses. At the end of June, the industry reached the bottom of the cycle, with many companies suffering cash-cost losses and facing operational performance pressures. During the Reporting Period, TZE achieved a revenue of RMB16.213 billion, with a year-on-year decrease of 53.54%, and a net profit of negative RMB3.176 billion. Net cash flows from operating activities amounted to RMB128 million. TZE prioritizes technological innovation, cementing a leading position in G12 and N-type photovoltaic materials technology. Through continuous cost reductions and efficiency optimizations, the Company is actively enhancing its relative comparative competitiveness. By leveraging technological innovation and lean manufacturing, the Company has established a competitive edge with ongoing efforts to enhance silicon material utilization, reduce furnace costs, and increase wafer output per kilogram, which are driving the industry’s transition to N-type and larger-sized products. During the Reporting Period, the Company’s monocrystalline silicon capacity expanded to 190GW, while photovoltaic material shipments grew by 18.3% year-on-year to approximately 62GW. The Company secured a leading position in the industry with a 23.5% market share for silicon wafers. Notably, its N-type products achieved a 42% external sales market share, signifying a 6 percentage point increase from 2023. Although a comparably high depreciation rate per unit caused by different investment methods, the Company’s photovoltaic material business maintains a cost advantage of approximately 0.033 yuan/W more cost-competitive than the industry’s second-best player. TZE is solidifying its Industry 4.0 smart manufacturing capabilities and resolutely implementing a global leadership strategy. Building on its globally leading G12 silicon wafer technology, Industry 4.0 flexible manufacturing capabilities, and a strong intellectual property portfolio, the Company is accelerating its internationalization efforts and expanding its localized manufacturing footprint overseas. In collaboration with RELC which is fully owned by Saudi Arabia’s Public Investment Fund (PIF), and Vision Industries, the Company is building the world’s largest overseas crystal wafer plant to bolster its global competitiveness. The Company aims to fully capitalize on Maxeon’s unique competitive advantages in its core markets and its proven technological innovation capabilities. By fostering a collaborative ecosystem between global production and distribution channels, the Company seeks to strengthen its competitive edge in the global marketplace (especially in North America). In the second half of 2024, the global photovoltaic industry remains at the bottom of the cycle, with fundamental changes in market conditions and intensifying competition. In the wake of operational challenges, TZE will uphold its bottom line of extreme cost efficiency, accelerate organizational restructurings and management optimizations, and enhance its comparable competitiveness. The global renewable energy market presents ample growth opportunities, yet the distribution of production capacity worldwide remains uneven. The Company’s management team believes that the Matthew effect within the photovoltaic industry will contribute to a more optimized long-term market structure and enhance profitability. III. Analysis of Core Competitiveness Since its establishment in 1981, TCL has consistently demonstrated resilience and adaptability, successfully navigating through various market cycles. Through a sustained commitment to innovation and transformation, the Company has emerged as a prominent technology manufacturing group in China. At present, TCL TECH has established a business structure centered on displays and new energy photovoltaics. With a well-defined development roadmap and efficient operations, the Company has a distinctive corporate culture and is well-poised for building its core competitiveness and sustainable development capabilities. advantages TCL CSOT, a preeminent global display company and a pioneer in domestic display manufacturing, has invested over RMB260 billion to establish 9 state-of-the-art panel lines and 5 module factories, serving a diverse range of global clients. The Company leverages its strategic “Twin Star” production line layout to maximize synergies with a focus on both endogenous growth and epitaxial mergers and acquisitions, enabling it to expand its production capacity and build leadership through size. By establishing its own production lines and acquiring Samsung’s Suzhou plant, TCL CSOT has gradually solidified its leading position in the global large-size panel market, actively enhanced its value chain structure, increased module capacity, and further elevated its position along the value chain and increased profitability. TCL CSOT has passed through several industry cycles, transforming from a “follower” to a “peer” and then to a front-runner, which features high-quality development by expanding its product portfolio from large-size panels to a full range of display sizes. TZE will leverage its competitive advantages in terms of capacity, product offerings, and cost structure, while driving technological innovations and operational transformations to bolster its market position. The Company is committed to ongoing improvements in its flexible manufacturing capabilities for photovoltaic silicon wafers, and is ensuring that it can meet the diverse needs of its customers. The Company’s patented technologies enable it to develop differentiated products, technologies, and manufacturing processes for photovoltaic cell modules. Leading in technology and ecology: Prioritizing the growth of high-tech sectors, and building a first-mover advantage through ecological leadership The Company has established a strategic foothold in core technologies, e.g. displays and new energy photovoltaics, capitalizing on its subsidiaries TCL COST and TZE. Through strategic partnerships with upstream and downstream industry players, the Company has built a robust global ecosystem for technology and innovation, and is steadily advancing its technological leadership in next-generation display technologies as well as G12 and N-type photovoltaic materials. The Company has accumulated over 70,000 patent applications and has been instrumental in developing over 200 international and domestic technical standards, underscoring its unwavering commitment to technological innovation and its status as a preeminent high-tech enterprise. The Company has secured over 2,400 patents in quantum dot display technology, ranking second globally, which will displays. TCL TECH took the leads in establishing the “National Printing and Flexible Display Innovation Center” and the “National New Display Technology Innovation Center”, with 9 national-level enterprise open innovation platforms and 33 provincial-level innovation platforms obtaining the relevant qualifications. Leading in efficiency and management: navigating cycles with industry-leading efficiency and effectiveness TCL has leveraged its substantial scale and technological prowess to achieve industry-leading levels of efficiency and effectiveness. Through ongoing management reforms and system upgrades, the Company has maintained its competitive edge. TCL CSOT leverages the synergy of its twin factories to optimize production line planning and maximize capacity expansion. Through management reforms and process optimizations, TCL has strengthened end-to-end collaboration, resulting in improved overall operational efficiency. By pursuing cost excellence, we have established an end-to-end cost advantage, resulting in continuous improvements in product quality and performance, as well as a leading competitive position in the industry. At the same time, TCL CSOT has established proven risk mitigation capabilities which have been honed through multiple industry cycle fluctuations. Looking ahead, TCL will make use of this core competency, and will be well-poised to navigate future uncertainties and achieve global leadership. Amidst the cyclical downturn in the new energy photovoltaic industry, TZE has steadfastly adhered to its core business philosophy of “digging in”. The Company has comprehensively implemented Industry 4.0 intelligent manufacturing systems, coupled with Operation 4.0 and Quality 4.0 management frameworks. Through the relentless optimization of production automation, labor productivity, and operational efficiency, TZE has fortified its competitive edge in terms of efficiency and cost, thereby positioning itself to successfully navigate the industry cycle and emerge as a leading global player in the new energy photovoltaic sector. Corporate culture upgrade: With the mission of “leading technology, harmonious coexistence”, we are effectively addressing operational changes and competition In early 2020, TCL inaugurated a new phase of corporate culture, as articulated in the strategic document The Path to Global Leadership. The Company has adopted a core mission centered around “leading technology, harmonious coexistence”, underpinned by the core values of “change, employees to embrace change, break through limitations, and drive business optimizations and upgrades through active exploration and innovation. Guided by a commitment to responsibility and a relentless pursuit of excellence, TCL has dedicated itself to delivering superior products and services to its valued customers. Amidst a complex and dynamic external business environment, TCL employees will continue to uphold its core principles and values—“The Path to Global Leadership”. Demonstrating unwavering courage and determination, TCL will remain at the forefront of its industry, undeterred by competitive pressures. Through strategic adaptations and innovative initiatives, TCL will navigate the evolving business landscape and successfully transition into a new phase of growth. IV. Analysis of Core Businesses Overview See the relevant contents in "I. Main businesses of the Company during the reporting period". Year-on-year changes in key financial information Unit: RMB'0,000
No significant changes to the profit structure or sources of the Company during the Reporting Period. Breakdown of revenue Unit: RMB'0,000
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