TCL科技定期财报：TCL科技：2019年年度报告（英文版）

TCL集团股份有限公司2019年年度报告TCLTechnologyGroupCorporationAnnualReport20191TCL科技集团股份有限公司TCLTechnologyGroupCorporationANNUALREPORT201931March2020TCLTechnologyGroupCorporationAnnualReport20192TableofContentsPartIImportantNotes,TableofContentsandDefinitions..................................................8PartIICorporateInformationandKeyFinancialInformation...........................................11PartIIIBusinessSummary.........................................................................................................17PartIVDirectors’Report.............................................................................................................22PartVSignificantEvents............................................................................................................51PartVIShareChangesandShareholderInformation.........................................................84PartVIIDirectors,Supervisors,SeniorManagementandStaff.......................................93PartVIIICorporateGovernance..............................................................................................113PartIXCorporateBonds..........................................................................................................129PartXFinancialReport.............................................................................................................138TCLTechnologyGroupCorporationAnnualReport20193AchieveGlobalLeadershipbyInnovationandEfficiencyChairman’sStatementDearshareholders,customersandpartners,In2019,assupplysurgedandgrowthofdemandsloweddown,theglobalsemi-conductordisplayindustryenteredacoldwinterwithgreatearningpressure.Tosurviveandalsoprepareforthegrowthofnextcycle,becamethetoppriorityforeverycompany.Underthesevereandcomplicatedbusinessenvironment,theCompanypersuesitsgloballeadershipsteadily,completedthesignificantassetsspin-off,andcontinuouslyimprovedtheefficiencybyorganizationreformation,soastopromotesteadygrowthinallthebusinesses.BusinessReviewfor2019In2019,onthereferencebasis(theconsolidationscopeaftertheRestructuring),theCompanyrecordedrevenueofRMB57.27billion,upby18.7%year-on-year;andanetprofitofRMB3.56billion,upby0.53%yearly,ofwhichthenetprofitattributabletothelistedcompany’sshareholderswasRMB2.62billion,downby17.0%yearly.TheCompanycompletesthesignificantassetsspin-off,optimizesthecapitalstructureandimprovestheoperatingefficiency.ThenetprofitpercapitaincreasestoRMB74,000fromRMB38,600.Andthedebt/assetratiodecreasesto61.3%from68.4%,whilethenetcashflowgeneratedfromoperatingactivitiesamountedtoRMB11.49billion,bothimprovethesustainablepotentialgreatly.TheCompanykeepsonitsstrategyasglobalindustryleader,concentratesonthelong-termstrategicindustrieswhicharehigh-techandcapitalintensive.Enhancetheecologicaldevelopmentoftheindustry,improvestheabilityofindustrialfinanceandfacilitatestheindustrialdevelopmentaftertherestructuring.ThecleardevelopmentstrategyoftheCompanywillfullyreleasethegrowthpotentialandthepositiveeffectoftherestructuring.Thepanelpricecontinuouslydropstothehistoriclowebbwithindustrylossesarisingandthemarketfurtherconcentratedtotheleadingenterpriseslastyear.TCLCSOTkeepsthebestefficiencyandprofitabilityoftheindustrybythebusinessprocessimprovement,TCLTechnologyGroupCorporationAnnualReport20194ultimatecostreductionandthebetterproductandcustomermix.Fortheyearunderreview,TCLCSOTrecordedrevenueofRMB33.99billion,upby22.9%year-on-year,andanetprofitofRMB964million,downby58.5%year-on-year.Thet6(G11)plantinShenzhenreacheddesignedproductionattheendofthe2019andthet4(flexibleAMOLED)plantachievedmassproductionatthesametime.Thetwoplantswillsupporttheprofitgrowthofthisyearfirmly.TCLCSOTcontinuouslyinvestsinR&Dandactivelydevelopsthenextgenerationofdisplaytechnologies,frommaterialstomanufacturing(includingink-jetprintingflexibleOLED).ThePCTpatentapplicationsoftheCompanyincreases2,752inthecurrentperiodandtheacumulatedpatentapplicationsreachesto11,261.Theindustrialfinancebusinessdevelopssteadilyandoptimizesthecapitaloperatingsystem,improvestheassetefficiencyandriskcontrolcapability.Thesupplychainfinanceenablestheindustrydevelopmentandmeetthecapitalneeds.TCLventurecapitalfocusesontheopportunitiesofcutting-edgetechnology;AdmiraltyHarbourCapitalstartsitsoffshoreoperatessmoothly.FortheReportingPeriod,theindustrialfinance,investmentandventurecapitalrecordedanetprofitofRMB999milliontotally;Earningfromthesignificantassetsspin-offwasRMB1.15billion.TheotherbusinessesoftheCompanywerestableandrecordedrevenueofRMB22.9billionandanetprofitofRMB320million.EarningsfromfinanceandotherbusinessesstabilizetheperformanceoftheCompanyduringthewinterofthepanelcycle.2020businessplanningSincetheendoflastyear,thepriceofthebig-sizepanelhasrisenasbusinessenvironmentimproved.Ithinkthattheglobaldemand-supplyrelationshipoftheindustryhasnotchangedfundamentally,butthelong-termprospectoftheindustryisbrightwithverylargemarketpotential.Thehuman-computerinteractiontechnologycreatesthenewapplicationscenariosandexpandthenewmarketindemandofcommercialdisplay;Globalindustryreshufflingareacceleratedandtheindustryconcentratetotheleadingcompanies.TCLTechnologyGroupCorporationAnnualReport20195Theenvironmentoftheglobaldisplayindustrywillbebettercomparinglastyearandtheenterprisewithedgewillhavemoreopportunities.TCLCSOTfocuseson"improvingefficiencyandprofitability",compareswithallthebenchmarksthoroughly,findstherootreason,responsesquickly,buildsupthecorecompetencies,continuestoreducethecost,improvesoperationqualityaswellasactivelyexpandsnewmarketsandcustomerstoachievebusinesssuccess.TheCompanywillmaintainthemaxproductionofthet6plant,furtherexpandthecapacityoft3plant,reachmassproductionofthePhaseIofthet4plant,completePhaseIIandPhaseIIIconstructionoft4,andstartthet7(G11)operationattheendoftheyear.Continuouslymaxtheexistingcapacityandcompletefullsales.Keeponcapacityexpansionandsupporttherevenuegrowththisyear.TheCompanyshalldedicatedtothevideointeractionandcommercialdisplaytechnology,improveLTPSandflexibleAM-OLEDtechnology,furtheroptimizeproductandcustomerstructure,continuouslystrengthenthemarketpositionandenhanceearnings.WeareconfidentthatTCLCSOT'srevenuegrowthandprofitabilitywillexceedlastyear.Theindustrialfinance&investmentbusinesswillsupportthesemiconductordisplayfrommanyaspects,furtherimprovethefinancialstatusandassetturnoverrate,aswellaslowerfinancialcosts.TCLCapitalwillfocusoninvestmentfromupstreamtodownstreamofindustrialchainandstrategictechnology,andsupportecologicalperfectionofthesemi-conductordisplay.Theindustrialfinance&investmentbusinesswillcontinuouslycontributetosteadygrowthinearningsandimprovethecapabilitytocounterthecycle.TheCompanywillcontinuetospinofftheotherbusinessandkeepaneyeontheM&Aopportunityinthesemiconductor.Focusonthesemi-conductordisplaybusinessandshareholderreturn.TheCompanyhasanactiveexpectationthisyear.AlthoughtheCOVID-19epidemiccausesgreateruncertaintytotheglobaleconomy,wehaveconfidencetoovercomedifficultiesandchallengestofurtherexpandthemarketshareandachieveastrongrevenuegrowth.TCLTechnologyGroupCorporationAnnualReport20196Medium-and-longtermstrategicoutlookChinaistheworld'slargestexporter.AndthemanufactureistherootofChina'seconomiccompetitiveness,butthehigh-endmanufacturingabilityisinsufficientwithlowvalueadded.Chinaneedtoupgradeitsmanufacturer,enhancetheirhigh-endmanufacturingandtechnologyability.Thelong-termstrategyofthecompanyiscentralizingtheresourceandbuildingupgloballeadershipinstrategicindustriesoftechnology-intensiveandcapital-intensive.Ontheotherhand,theCompanyenhancestheindustrialfinancialcapacity,developstheindustrialfinancebusinesscreatively,facilitatesindustrialdevelopment,establishestheefficientindustrialfinancialbusinesssystemandincreasestheinvestmentincomealso.Thesemi-conductordisplaytechnologyandmaterialisoneofthemostimportantcoreandbasicindustrieswithgreatmarketprospectsofwhichChinahasaglobaladvantage.IthinkthereisanopportunityforChina'sdisplayindustrytobecomethegloballeaderinbig-sizeproducts,butinmediumandsmallsizewillfacethechallengesfromKoreancompanies.ChinaandKoreawillbecomethefinalleadingforcesofglobaldisplayindustry.Asthecompetitionofthedisplayindustrywillbeheated,thebusinessvolatilitywillbelowerfinally.Theleadingplayer'sadvantageswillbesignificantandthereturnwillincreasegradually.TheCompanywillincreasethescaleandefficiencyoftheindustrybyinteriorandexteriordevelopment,increaseR&Dinvestment,establishthetechnicalbarrier,breakthroughthenextgenerationofdisplaytechnology,deploytheglobalindustrialchainlayoutactivelyandserveglobalcustomers,establishtheecologicalsystemoftheindustry,improveefficiencyandbecomeagloballeaderinthedisplayindustry.Withtheadvantagesfromtechnology,managementandcapital,theCompanyislookingforopportunitytocreateanewfieldinthecapital-intensiveandtechnology-intensivestrategicindustriestosupportlong-termsustainablegrowthoftheenterprise.Thepotentialtargetwillbetheleadingenterpriseoftheindustry,whichhasconsistentbusinesslogicandhassynergytoincreaseearnings.TheCompanyalwaysvaluesshareholderreturnsandstabilizesthecashdividends.TheTCLTechnologyGroupCorporationAnnualReport20197BoardofDirectorsproposesthedividendofRMB0.1persharefortheyearunderreview.TheCompanyhasdistributedcashdividendsfor9consecutiveyearssince2012andcumulativedividendswillexceedRMB8.1billion.TheGroupwillcontinuouslyexecutetheexistingdividendpolicyandactivelypaybacktheshareholders.In2019,theCompanycumulativelyrepurchased565millionshareswithtotalRMB1.934billionofrepurchasetoenhanceshareholderreturn.IhavepersonallyincreasedmysharesintheCompanybyatotalof175millionsharessinceDec.2018andIhaveconfidenceinthelong-termvalueoftheCompany.Finally,onbehalfoftheBoardofDirectors,I’dliketotakethisopportunitytoexpressmygratitudeforthetrustsofallourshareholders,forthesupportfromallourpartnersandusers,aswellasforthehardworkofmanagementteamandstaff!LiDongsheng31March2020TCLTechnologyGroupCorporationAnnualReport20198PartIImportantNotes,TableofContentsandDefinitionsTheBoardofDirectors(orthe“Board”),theSupervisoryCommitteeaswellasthedirectors,supervisorsandseniormanagementofTCLTechnologyGroupCorporation(hereinafterreferredtoasthe“Company”)herebyguaranteethefactuality,accuracyandcompletenessofthecontentsofthisReportanditssummary,andshallbejointlyandseverallyliableforanymisrepresentations,misleadingstatementsormaterialomissionstherein.AlltheCompany’sdirectorshaveattendedtheBoardmeetingforthereviewofthisReportanditssummary.AndalltheCompany’ssupervisorshaveattendedthemeetingoftheSupervisoryCommitteeforthereviewofthisReportanditssummary.TheBoardhasapprovedafinaldividendplanfortheordinaryshareholdersasfollows:basedonthesharecapitalof13,000,372,307shareson27March2020thatareeligibleforprofitdistribution(thetotalsharecapitalof13,528,438,719sharesminusthe528,066,412sharesintheCompany’sspecialsecuritiesaccountforrepurchasethatarenoteligibleforprofitdistribution),acashdividendofRMB1(taxinclusive)per10sharesistobedistributedtotheshareholders,totalingRMB1,300,037,230.70.TheretainedearningsofRMB6,819,795,641.3willcarryforwardforfuturedistribution.Meanwhile,therewillbenobonusissuefromeitherprofitorcapitalreservesfortheyearunderreview.Mr.LiDongsheng,theChairmanoftheBoard,Ms.DuJuan,theperson-in-chargeoffinancialaffairs(ChiefFinancialOfficer),andMr.XiWenbo,theperson-in-chargeofthefinancialdepartment,herebyguaranteethatthefinancialstatementscarriedinthisReportarefactual,accurateandcomplete.ThisReportanditssummaryhavebeenpreparedinbothChineseandEnglish.Shouldtherebeanydiscrepanciesormisunderstandingsbetweenthetwoversions,theChineseversionsshallprevail.TCLTechnologyGroupCorporationAnnualReport20199DefinitionsTermDefinitionThe“Company”,the“Group”,“TCL”,“TCLTech.”or“we”TCLTechnologyGroupCorporationanditsconsolidatedsubsidiaries,exceptwherethecontextotherwiserequiresThe“ReportingPeriod”Theperiodfrom1January2019to31December2019ThereferencebasisorthereferencereportThefinancialreportsoftheReportingPeriodandlastyearthattheCompanypreparesbasedontheconsolidationscopeaftertherestructuring,i.e.exclusiveoftheeffectsoftherestructuredbusinessesTCLIndustriesTCLIndustriesHoldingsInc.The“MajorAssetRestructuring”,“Restructuring”or“significantassetsspin-off”Themajorassetrestructuringapprovedatthe13thmeetingofthe6thBoardofDirectorson7DecemberandtheFirstExtraordinaryGeneralMeetingof2019on7January2019andsettledinApril2019TCLCSOTTCLChinaStarOptoelectronicsTechnologyCo.,Ltd.WuhanCSOTWuhanChinaStarOptoelectronicsTechnologyCo.,Ltd.GuangdongJuhuaGuangdongJuhuaPrintedDisplayTechnologyCo.,Ltd.ChinaRayGuangzhouChinaRayOptoelectronicMaterialsCo.,Ltd.HighlyHighlyInformationIndustryCo.,Ltd.,amajority-ownedsubsidiaryoftheCompanylistedontheNationalEquitiesExchangeandQuotations(stockcode:835281)CDOTChinaDisplayOptoelectronicsTechnologyHoldingsLimited,amajority-ownedsubsidiaryoftheCompanylistedontheStockExchangeofHongKong(stockcode:00334.HK)BankofShanghaiBankofShanghaiCo.,Ltd.(stockcode:601229.SH),withtheCompanyholdinga5.14%interest712Corp.Tianjin712Communication&BroadcastingCo.,Ltd.(stockcode:603712.SH),withtheCompanyholdinga19.07%interestasitssecondlargestshareholderFantasiaFantasiaHoldingsGroupCo.,Limited,alistedcompanyontheStockExchangeofHongKong(stockcode:01777.HK),withtheCompanyholdinga20.06%interestasitssecondlargestshareholderAdmiraltyHarbourCapitalAdmiraltyHarbourCapitalLimitedHuizhouEnvironmentalResourceHuizhouTCLEnvironmentalResourceCo.,Ltd.TCLIndustries(HK)TCLIndustriesHoldings(HK)LimitedTCLHouseholdElectricApplianceHuizhouTCLHouseholdElectricApplianceGroupCo.,Ltd.OpenEdutainmentBeijingNationalCenterforOpen&DistanceEducationCo.,Ltd.HefeiHomeAppliancesTCLHomeAppliances(HeFei)Co.,Ltd.CoolFriendsTechnologyHuizhouCoolFriendsNetworkTechnologyCo.,Ltd.TCLTechnologyGroupCorporationAnnualReport201910KoyooOnlineServiceKoyooOnlineServiceCo.,Ltd.TCLTechnologyParkTCLTechnologyParkCo.,Ltd.JDHJDHInformationTech(Zhuhai)Co.,Ltd.HAWKInternetShenzhenHAWKInternetCo.,Ltd.GetechGetechLtd.t1projectThegeneration8.5(orG8.5)TFT-LCDproductionlineofTCLCSOTt2projectThegeneration8.5(orG8.5)TFT-LCD(includingoxidesemiconductor)productionlineofTCLCSOTt3projectThegeneration6(orG6)LTPS-LCDpanelproductionlineofTCLCSOTt4projectThegeneration6(orG6)flexibleLTPS-AMOLEDpanelproductionlineofTCLCSOTt6projectThegeneration11(orG11)newTFT-LCDproductionlineofTCLCSOTt7projectThegeneration11(orG11)newultra-high-definition(UHD)TFT-LCDandAMOLEDproductionlineofTCLCSOTTCLTechnologyGroupCorporationAnnualReport201911PartIICorporateInformationandKeyFinancialInformationICorporateInformationStocknameTCLCorp.Stockcode000100Changedstockname1TCLTech.StockexchangeforlistingShenzhenStockExchangeCompanynameinChineseTCL科技集团股份有限公司Abbr.TCL科技CompanynameinEnglishTCLTechnologyGroupCorporationAbbr.TCLTECH.LegalrepresentativeLiDongshengRegisteredaddressTCLTechBuilding,17HuifengThirdRoad,ZhongkaiHi-TechDevelopmentDistrict,HuizhouCity,GuangdongProvince,ChinaZipcode516001OfficeaddressTCLTechBuilding,17HuifengThirdRoad,ZhongkaiHi-TechDevelopmentDistrict,HuizhouCity,GuangdongProvince,ChinaZipcode516001CompanywebsiteEmailaddressir@tcl.comCompanyhonorsFortuneChina500Top60ChineseCorporateCitizens2019ResponsibilityValueInnovationEnterpriseAwardOutstandingEnterpriseinSocialResponsibilitygrantedbyChinaCorporateSocialResponsibilityAnnualConferenceInvestors’FavoriteAwardgrantedbyCailianpress.comBestBoardAwardgrantedbythe15thGoldRoundTableSustainabilityInnovationAwardgrantedbytheCaijingmagazineBestA-stockCompanyinInvestmentValueAwardgrantedbyGelonghuiBestChinaListedCompaniesinCorporateSocialResponsibilityAward2018grantedbyJRJ.com1Inordertoreflectitsbusinessscopeandoperationsinanaccurateandclearmanner,aswellasitsstrategicpositioningtobecomeagloballyleadingtechnologycompany,theCompanyhaschanged,uponapproval,itsChinesenamefrom“TCL集团股份有限公司”to“TCL科技集团股份有限公司”,Englishnamefrom“TCLCorporation”to“TCLTechnologyGroupCorporation”,stocknameinChinesefrom“TCL集团”to“TCL科技”,stocknameinEnglishfrom“TCL”to“TCLTech.”,andtheabbreviationofitsEnglishnamefrom“TCLCorp.”to“TCLTech.”.Thestockcodeof“000100”remainsunchanged.TCLTechnologyGroupCorporationAnnualReport201912IIContactInformationBoardSecretaryNameLiaoQianAddress19/F,TowerB,TCLBuilding,GaoxinSouthFirstRoad,ShenzhenHigh-TechIndustrialPark,Shenzhen,GuangdongProvince,ChinaTel.0755-33311666Fax0755-33313819Emailaddressir@tcl.comIIIMediaforInformationDisclosureandPlacewherethisReportIsLodgedNewspapersdesignatedbytheCompanyforinformationdisclosureSecuritiesTimes,ChinaSecuritiesJournal,ShanghaiSecuritiesNewsandSecuritiesDailyWebsitedesignatedbyCSRCforpublicationofthisReportPlacewherethisReportislodgedBoardOfficeofTCLTechnologyGroupCorporationIVChangetoCompanyRegisteredInformationUnifiedsocialcreditcode91441300195971850YChangetoprincipalactivityoftheCompanysincegoingpublic(ifany)NotapplicableEverychangeofcontrollingshareholdersinceincorporation(ifany)NotapplicableVOtherInformationTheindependentauditfirmhiredbytheCompany:NameDaHuaCertifiedPublicAccountants(SpecialGeneralPartnership)OfficeaddressRoom1101,Building7,No.16XiSiHuanZhongRoad,HaidianDistrict,BeijingAccountantswritingsignaturesQiuJunzhouandJiangXianminTheindependentsponsorhiredbytheCompanytoexerciseconstantsupervisionovertheCompanyintheReportingPeriod:□Applicable■NotapplicableTheindependentfinancialadvisorhiredbytheCompanytoexerciseconstantsupervisionovertheCompanyintheReportingPeriod:TCLTechnologyGroupCorporationAnnualReport201913NameOfficeaddressRepresentativePeriodofsupervisionCITICSecuritiesCo.,Ltd.CITICSecuritiesTower,No.8Zhongxin3rdRoad,FutianDistrict,Shenzhen,ChinaHuangBiaoandLiuJianFrom1March2019to31December2020VIKeyFinancialInformationIndicatewhetherthereisanyretrospectivelyrestateddatuminthetablebelow.□Yes■NoItem201920182019-over-2018change(%)2017Revenue(RMB)Note74,933,085,688113,360,075,545-33.90111,577,362,348EBITDA14,224,327,74214,096,523,2610.9113,395,054,317Netprofit(RMB)3,657,735,3204,065,194,164-10.023,544,702,884Netprofitattributabletothelistedcompany’sshareholders(RMB)2,617,766,5713,468,207,407-24.522,664,396,006Netprofitattributabletothelistedcompany’sshareholdersbeforenon-recurringgainsandlosses(RMB)235,119,3211,587,391,372-85.191,190,649,328Basicearningspershare(RMB/share)0.19860.2566-22.600.2178Dilutedearningspershare(RMB/share)0.19350.2562-24.470.2178Weightedaveragereturnonequity(%)9.0911.98-2.8910.86Netcashgeneratedfrom/usedinoperatingactivities(RMB)11,490,096,40510,486,580,4439.579,209,615,123Netcashpersharegeneratedfrom/usedinoperatingactivities(RMB/share)0.84930.77399.740.681431December201931December2018Changeof31December2019over31December2018(%)31December2017Totalassets(RMB)164,844,884,926192,763,941,739-14.48160,293,985,835Totalowners’equity(RMB)63,883,145,34060,871,672,6474.9554,142,938,886Owners’equityattributabletothelistedcompany’sshareholders(RMB)30,111,946,23730,494,364,951-1.2529,747,067,178Sharecapital(share)13,528,438,71913,549,648,507-0.1613,514,972,063Equitypershareattributabletothelistedcompany’sshareholders(RMB/share)2.22582.2506-1.12.2010Note:InApril2019,theCompanycompletedthehandoverofmajorassetsinarestructuring.Therefore,therevenuedataTCLTechnologyGroupCorporationAnnualReport201914of2019and2018arenotcomparableastheformeronlyincludestheJanuary-March2019revenuegeneratedbytherestrcuctedassets,whilethelattercomprisestheJanuary-December2018suchrevenue.Adoptingthesamereferencebasis,revenuewouldbeupby18.72%in2019comparedto2018.ThetotalsharecapitalattheendofthelasttradingsessionbeforethedisclosureofthisReport:TotalsharecapitalattheendofthelasttradingsessionbeforethedisclosureofthisReport(share)13,528,438,719Fullydilutedearningspersharebasedonthelatesttotalsharecapitalabove(RMB/share)0.1935Note:Aftertherestructuring,theCompanyhasshiftedtoagloballyleadingintelligenttechnologycompanyconcentratingonthesemi-conductordisplayandmaterialsbusiness.ItisthekeyoperationalphilosophyandmissionoftheCompanytocreatevalueforandgrowwiththeshareholders.Inordertoeffectivelyprotectshareholders’interestsandenhanceshareholdervalue,theCompanycarriedoutasharerepurchaseprogrammeduringtheReportingPeriod,whichhasbeencompletedon10January2020.Cumulatively,565,333,922shares(or4.18%ofthetotalsharecapital)havebeenrepurchased,ofwhich3,875,613shareshavebeenusedforthe2019RestrictedStockIncentivePlanandtheSecondGlobalInnovationPartnerPlan,33,391,897shareshavebeenusedfortheSecondGlobalPartnerPlan,andtherestwillbekeptastreasurysharesandusedforemployeestockownershipplans,equityincentiveplansorconvertiblebonds.Thekeyfinancialinformationof2019and2018exclusiveoftheeffectsoftherestructuringbusinesses(referencedatapresentedbasedontheconsolidationscopeaftertherestructuring)isasfollows:Item201920182019-over-2018change(%)Revenue(RMB)57,270,940,68548,240,376,80818.72Netprofit(RMB)3,564,025,0843,545,237,9380.53Netprofitattributabletothelistedcompany’sshareholders(RMB)2,617,778,6353,153,044,155-16.98Basicearningspershare(RMB/share)0.19860.2333-14.87Dilutedearningspershare(RMB/share)0.19350.2329-16.92Weightedaveragereturnonequity(%)9.099.74-0.65Note:Thedataof2019and2018inthetableaboveexcludetheresultsoftherestructuringbusinesses.Indicatewhetherthereareanycorporatebonds.■Yes□NoIndicatewhethertheCompanyhasseenadeficitforthepasttwoyears.□Yes■No□NotapplicableTCLTechnologyGroupCorporationAnnualReport201915VIIAccountingDataDifferencesunderChina’sAccountingStandardsforBusinessEnterprises(CAS)andInternationalFinancialReportingStandards(IFRS)andForeignAccountingStandards1.NetProfitandEquityunderCASandIFRSNosuchdifferencesfortheReportingPeriod.2.NetProfitandEquityDifferencesunderCASandForeignAccountingStandardsNosuchdifferencesfortheReportingPeriod.3.ReasonsforAccountingDataDifferencesAbove□Applicable■NotapplicableVIIIKeyFinancialInformationbyQuarterUnit:RMBQ1Q2Q3Q4Revenue29,600,956,87514,180,656,86015,036,052,35716,115,419,596Netprofit1,006,077,5301,730,985,146750,351,631170,321,013Netprofitattributabletothelistedcompany’sshareholders779,088,3891,313,260,303484,981,28940,436,590Netprofitattributabletothelistedcompany’sshareholdersbeforenon-recurringgainsandlosses560,950,806-310,483,676252,929,177-268,276,986Netcashgeneratedfrom/usedinoperatingactivities2,243,903,2413,906,918,5811,458,452,3673,880,822,216IndicatewhetheranyofthequarterlyfinancialdatainthetableaboveortheirsummationsdiffersmateriallyfromwhathavebeendisclosedintheCompany’squarterlyorinterimreports.□Yes■NoIXNon-RecurringGainsandLossesUnit:RMBItem201920182017NoteGainorlossondisposalofnon-currentassets(inclusiveofimpairmentallowancewrite-offs)1,419,020,969-58,305,452420,543,530NotapplicableTCLTechnologyGroupCorporationAnnualReport201916Governmentsubsidieschargedtocurrentprofitorloss(exclusiveofgovernmentsubsidiesgivenintheCompany’sordinarycourseofbusinessatfixedquotasoramountsasperthegovernment’suniformstandards)1,170,648,5261,377,064,5701,159,442,050NotapplicableGainequaltotheamountbywhichinvestmentcostsfortheCompanytoobtainsubsidiaries,associatesandjointventuresarelowerthantheCompany’senjoyablefairvalueofidentifiablenetassetsofinvesteeswhenmakinginvestments--191,917,137NotapplicableGainorlossonfair-valuechangesintradingfinancialassetsandliabilities&investmentincomefromdisposaloftradingfinancialassetsandliabilitiesandavailable-for-salefinancialassets(exclusiveofeffectiveportionofhedgesthatariseintheCompany’sordinarycourseofbusiness)186,339,457162,729,226-207,276,526NotapplicableNon-operatingincomeandexpenseotherthantheabove77,285,628871,846,769504,575,138NotapplicableLess:Corporateincometax165,397,982191,940,974310,502,820NotapplicableNon-controllinginterests(netoftax)305,249,348280,578,104284,951,831NotapplicableTotal2,382,647,2501,880,816,0351,473,746,678NotapplicableExplanationofwhytheCompanyreclassifiesasrecurrentanon-recurringgain/lossitemdefinedorlistedintheExplanatoryAnnouncementNo.1onInformationDisclosureforCompaniesOfferingTheirSecuritiestothePublic—Non-RecurringGain/LossItems:□Applicable■NotapplicableTCLTechnologyGroupCorporationAnnualReport201917PartIIIBusinessSummaryIPrincipalActivityoftheCompanyintheReportingPeriodDuringtheReportingPeriod,theCompanyprimarilyconsistsofthefollowingthreebusinesssegments:thesemi-conductordisplayandmaterialsbusiness,theindustrialfinance&investmentbusinessandtheotherbusinesses.Adheretothestrategyofbecomingagloballeadingintelligenttechnologycompany,theCompanywillcontinuetostrengthenmanufacturingcompetitiveness,focusondevelopinghigh-techstrategicbusinesses,andestablishglobalcuttingedgesinrelatedbusinesses.TheindustrialfinancebusinesswillfacilitatethedevelopmentoftheCompany’smanufacturingbusinessandincreasereturnsoninvestments.Capitalizingontheindustrialsuperiority,theCompanywillinvestinenterprisesfromtheecologicalindustrychainforbettercomprehensiveadvantage.Inthefuture,undertheprincipleofconcentratingonthecorebusinessandmaximizingshareholdervalue,theCompanywillcontinuetopromoteM&Asintheotherbusinesses,soastoachievehigherreturnsonassets.ForfurtherinformationabouttheCompany’sbusinesses,pleasereferto“PartIVDirector’sReport”herein.TCLTech.HighlyOpenEdutainmentSemi-conductordisplay&materialsTCLCSOTJuhuaChinaRayIndustrialfinance&investmentTCLFinancialTCLCapitalOtherWuhanCSOTTCLTechnologyGroupCorporationAnnualReport201918IISignificantChangesinMajorAssets1.SignificantChangesinMajorAssetsMajorassetsSignificantchangeFixedassetsPrimarilydrivenbythetransferoftheconstructioninprogressofthet2,t3,t4andt6productionlinestofixedassetsIntangibleassetsPrimarilydrivenbyspinoffsintheRestructuring2.MajorAssetsOverseas□Applicable■NotapplicableIIICoreCompetitivenessAnalysisThroughthedevelopmentof39years,TCLalwaysadherestothemanufacturingindustry,changeandinnovatecontinuously.Inthelatestreform,theCompanyspinsofftheintelligentterminalandsupportingbusinesses,reconfirmedthetechnology-centricbusinessdirectionatthebeginningof2019.Furthermore,forthepurposeofaccuratelyreflectingthestrategicposition-“Tobecomeagloballyleadingtechnologycompany”,theCompanyrenamedto"TCLTech."andachievedanewroundofindustrialupgradingandtechnologicaltransformationwithexpansionandimprovementonthecorebusiness.ScaleandefficiencyareprominentadvantagesandthecompetitivenesswasintensifiedduringtheindustrytroughTCLCSOThasarapidgrowthofproductioncapacityandcontinuouslyincreasesthemarketshares,salesthroughthemaxcapacityoft1andt2,aswellast6G11reachesdesigncapacityinadvance.WuhanCSOTt3LTPSproductsalesrankssecondintheworld,t4flexibleAMOLEDbeginsmassproductionandsupply,t7G11projectconstructionisinsmoothprogressandTCLmoduleandwhole-widgetintegratedprojectPhaseIreachestargetoutput.Now,thepositionofTCLCSOTbig-sizepanelisstableinthemarketsegment:Theshipmentof55-inchTVpanelsranksfirst,theshipmentof65-inchTVpanelsranksthird,theshipmentof86-inchTVpanelsinthewhiteboardfieldrankssecondandtheTCLTechnologyGroupCorporationAnnualReport201919shipmentof32-inchTVpanelsinthee-sportsfieldranksthird.TheoveralladvantagesofTCLCSOTstandamongtheforefrontoftheglobaldisplaypanelindustry.Sinceoperation,TCLCSOTimprovestheefficiencyofcapacityexpansionbyefficientproductionlinelayout,givesfullplaytoGeminiplantlayoutassemblyeffectandindustrialchainintegrationadvantageanddrivesextremeefficiencycostmeasureswithefficiencyandbenefitindicatorscontinuingtobetheglobalindustryleader.Withtheindustryreshuffleintensifiedandconcentrationincreased,TCLTechnologycansuccessfullycrossthebottomofthecyclebasedonscaleandefficiencyadvantagesandwillbenefitfromthenextindustryboomcyclewithsufficientresources.StrengtheningtheabilityoftechnologyresearchanddevelopmentandproductinnovationandbeforehandlayoutofthenextgenerationdisplaytechnologyandmaterialsIn2019,theCompany'sR&DinvestmentreachedRMB5.46billion.TCLTech.submitted2,752PCTinternationalpatentapplicationswithaccumulativeapplicationsof11,261coveringcountriesandregionssuchasEurope,AmericaandKorea.T……