TCL Corporation reports net profit of 2.089 billion yuan for H1 2015

The company's transformation effort has paid off

SHENZHEN, China, Aug. 18, 2015 /CNW/ -- According to TCL Corporation's 2015 Interim Report released in August, the company achieved steady growth in both revenue and net profit. TCL booked revenue of 46.684 billion yuan (approx. US$7.3 billion) in the first half of 2015, up 6.6% year-on-year. Net profit stood at 2.089 billion yuan (approx. US$327 million). Excluding non-recurring gains and losses, net profit was 1.620 billion yuan (approx. US$253 million), a rise of 73.68% from a year earlier, including a net profit of 1.207 billion yuan (approx. US$189 million) attributable to the shareholders of the listed companies, surging 120.35% year-on-year.

Despite a weak global economy and decreased market demand, TCL achieved solid growth in revenue and net profit for the first half of 2015, demonstrating the company's advantages in vertical integration of the industry chains as well as excellent performance in terms of production capacity.

The significant increase in net profit was mainly attributable to China Star Optoelectronics Technology (CSOT), the communication business as well as the financial and investment businesses. During the first half of 2015, CSOT maintained steady growth as a result of implementing a strategy of shifting the focus from efficiency to products as a means of preserving competitiveness. CSOT achieved sales revenue of 8.167 billion yuan (approx. US$1.3 billion) and net profit of 1.240 billion yuan (approx. US$194 million) in the first half of 2015. Thanks to its leading competitive edge, CSOT sold 11.71 million LCD panels during the reporting period, as its main products continue to get positive reviews from buyers. Sales of ultra HD LCD panels increased 25% year-on-year. CSOT has maintained the leading position across the globe for nine successive quarters in terms of capacity utilization rate, integrated product yield and major operating and financial indicators. With CSOT's t2 and t3 plants being put into production, TCL has improved its LCD industry chain and enhanced its overall competitiveness.

TCL's communication business, a sector in which TCL has certain advantages, maintained rapid growth in the first half of 2015. TCL Communication Technology achieved sales revenue of 10.53 billion yuan (approx. US$1.6 billion), up 8.88% year-on-year, and net profit of 358 million yuan (approx. US$56 million) during the reporting period. Despite slower growth and fiercer competition across global smartphone markets, TCL Communication Technology continued to expand market share by innovating and improving its product mix in a move to enhance the impact of both the TCL and ALCATEL brands. The company sold 34.84 million mobile phones in the first half of 2015, up 16.3% year-on-year, with smartphone sales soaring 38.86% to 20.88 million units. According to IDC as well as the company's own data, the company moved up to sixth place globally in terms of mobile phone market share in the second quarter of 2015. Additionally, TCL Communication Technology plans to explore innovation in the universe of mobile smart devices by establishing an open smart ecosystem that brings together smart devices, the cloud platform and internet services, and then quickly add value to the ecosystem by providing mobile applications and services.

TCL Multimedia Electronics generated sales revenue of 12.171 billion yuan (approx. US$1.9 billion) in the first half of 2015. Net profit was 109 million yuan (approx. US$17.0 million) during the reporting period, including operating profit of 85 million yuan (approx. US$13.3 million), an improvement of 144 million yuan (approx. US$22.5 million) from a year earlier. The company improved operational efficiency and accelerated business development by putting in place a variety of integration strategies and measures that have proven effective in the first half of 2015. The average price for the company's LCD TVs in China climbed 4.2% year-on-year. The proportions of sales attributable to smart TVs increased to 65.2% while the proportion for 4K TVs moved up 13.8%. Curved TV sales reached 30,083 units. In June, the company held a 24% share of China's curved TV market. TCL Multimedia Electronics continued integrating online and offline operations and added to the number of sales channels, increasing the proportion of sales attributable to e-commerce channels to 14.1%.

In addition to the steady development of the product businesses, TCL's service businesses also experienced rapid growth., GoLive as well as both the internet and the mobile app platforms all performed well. GoLive's partnerships across the industry ecosystem moved ahead successfully in the first half of 2015. GoLive reached a strategic partnership with China Research Institute of Film Science & Technology, the sole technology platform owned by the State Administration of Press, Publication, Radio, Film and Television of China, in the upstream sector. Under the terms of the deal the company obtained the exclusive trial license for TV and film theatre chains. The company also signed agreements with several major smart TV vendors in the downstream sector. The number of users activated in August exceeded 2 million.

The Finance Services Business Division and the Investment & Venture Business also reported strong performance. The Finance Services Business Division recorded net profit of 327 million yuan (approx. US$51.1 million) in the first half of 2015, while the Investment & Venture Business achieved net profit of 215 million yuan (approx. US$33.6 million) in the same period. The rapid yet steady growth of the two divisions bodes well for them becoming important profit sources for TCL in the future.

Marta Chen

SOURCE TCL Corporation

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