TCL Communication Delivered Significant Q3 Results, Sustaining Strong Growth Momentum

HONG KONG, Oct. 29 /PRNewswire-Asia/ --

FINANCIAL HIGHLIGHTS

TCL Communication Technology Holdings Limited ("TCL Communication," or "The Company", together with its subsidiaries referred to as "the Group"; HKSE stock code: 02618) today announced the unaudited results of the Group for the three months ended 30 September, 2010.

The Group continued its stellar performance since the beginning of 2010, and recorded a new breakthrough during the third quarter by further enhancement of its core competencies with a stronger brand, closer customer relationships, improved product competitiveness and higher operational efficiency.

Sales volume of handsets and accessories continued to hit new high in the third quarter of 2010 and totaled 9.5 million units, representing a 124% increase year-on-year (YOY). Sales volume of September 2010 set a new single-month record of 3.6 million units. For the first nine months of 2010, the sales volume totaled 23.7 million units, up 155% YOY. As named by iSuppli, an international market research firm, the Group ranked Top 7 mobile phone manufacturer by sales volume in the world in second quarter of 2010, moving up from the tenth in the first quarter of the year, marking the success of the Group's global strategy.

During the third quarter 2010, the Group's revenue increased by 101% YOY to HK$2,156 million, with cumulative revenue for the first nine months up 134% YOY to HK$5,607 million. Gross profit margin continued to improve in the third quarter to 24.2%, up from 20% and 22% in the first and second quarter respectively, and also improved from 22.0% in the same period last year. This is primarily due to synergy captured in closer collaborations with suppliers from integrated initiatives of forecast, ordering, inventory and delivery management.

As a result, net profit for the third quarter jumped 1,343% YOY to HK$202 million, while net profit for the first nine months reached HK$452 million, compared with a loss of HK$91 million over the same period of 2009.  Basic earnings per share for the first nine months was 41.91 HK cents as compared with basic loss per share 9.89 HK cents in the same period last year.

The Group also improved operational efficiency by reducing its expense ratio for the first nine months to 16% from 24% for the same period of 2009, and down to 15% for the third quarter from 21% in the same period last year.

Commenting on the performance, Mr. Guo Aiping, the Chief Executive Officer of TCL Communication, said, "Since our breakthrough turnaround from June 2009, I am pleased that we have achieved significant results in virtually all aspects of our business. As much as a validation of the dedication of our employees, these remarkable results are also testament to a successful transformation of the Group. In the forth quarter and beyond, we will continue to commit ourselves to increase core competitiveness where we will focus our resources and efforts to strengthen product competitiveness, enhance operational efficiency, increase brand values and optimize distribution channels across all markets."

In the third quarter 2010, sales in overseas markets made commendable contributions to our overall sales volumes increasing 160% to 9.1 million units. The sales volume in the PRC market also remained relatively stable with vast growth potentials.

In Americas, the Group successfully gained traction, ALCATEL brand is currently ranked the fourth in Latin America's mobile market in terms of market share. In the third quarter 2010, shipments to the region totaled 5.6 million units, up 262% YOY, gross profit margins also improved by 8 percentage points compared with the same period last year. In the fourth quarter and beyond, the Group will strengthen its sales position and continue aggressive expansion into local sub-markets including the Caribbean Islands.

In Europe, Middle East and Africa (EMEA), The Group's strategic focus has been on expansion into markets within the Commonwealth of Independent States (CIS) and Africa, while maintaining a steady pace of development in more matured markets in Europe. In the third quarter, the Group rolled out a full range of ALCATEL handsets to positive market reception in the Middle East.

In the PRC market, the Group partnered with China UnionPay (CUP) and became the first mobile handsets manufacturer in China endorsed by CUP as a secure platform delivery mobile payment, marking an important strategic direction where the Group aspires to grow the business of mobile terminals in lock-steps of global 3G trends. In the coming quarter, the Group also plans to launch it first Android-based 7-inch tablet in the PRC market. Meanwhile, the APAC region remains one of the key markets for growth in the handsets industry, and the Group will continue to strengthen channel network with the aim of further increasing the sale.

Anticipating customer demands and industry trends, the Group launched 21 new models in the third quarter and a total of 53 new models were brought to market since the beginning of 2010. Most of them received positive market reception as well as industry recognition. Among the new models, the OT-806 won the award from IF Industry Design. While the Group continued to expand into new markets with high sales potential, it also strengthened existing markets by launching competitive products and enlarging its customer base. Aside from maintaining its leading sales position in low to medium priced product segments, the Group stepped up efforts to play a bigger role in high-end segments. In the third quarter, the Group welcomed its first 3G Android smartphone OT-980 and successfully launched it in Europe.

Looking ahead, Mr. Guo continued, "To sustain the positive uptrend, we will continue to expand our product lines, in particular the converging products and tablets. We will expedite development and the time-to-market of new models to drive the growth and improve our competitive position globally. I am confident that the Group will deliver robust results for the full year of 2010. "

About TCL Communication

TCL Communication Technology Holdings Limited (stock code: 02618) is one of the top seven manufacturers of mobile handsets in the world and an acknowledged leader in alliances with telecommunication operators. Its headquarters are in the PRC, and its products are sold in more than 100 countries and regions under 2 brand names: TCL and ALCATEL. For more information, please visit its website at http://tclcom.tcl.com.

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