TCL Multimedia Proposes to Acquire LCD TV Module Business from TCL Corporation by Way of Issuing New Shares at an Issue Price of HK$3.20 per Share

Issue Price Represents a Premium of 9.22% to the Average Closing Price for the Last Five Trading Days as at the Date of the Announcement

HONG KONG, June 28, 2011 /PRNewswire-Asia/ -- TCL Multimedia Technology Holdings Limited ("TCL Multimedia" or "the Group", HKSE stock code: 01070) is pleased to announce that the Group proposes to acquire the LCD TV module business of TCL Optoelectronics Technology (Huizhou) Co., Ltd. ("TOT") from its parent company TCL Corporation ("TCL Corporation") for a consideration of RMB655,572,098.59 (approximately HK$788,791,012.73). The acquisition will be settled by way of the issue and allotment of 246,497,191 new shares by TCL Multimedia at an issue price of HK$3.20 per share to TCL Corporation. The issued price presents a premium of 9.22% to the average closing price of HK$2.93 for the last five trading days as at the date of the announcement. The acquisition will help the Group realize its vertical integration strategy to create cost synergies and generate new revenue stream for TCL Multimedia. In addition, upon the completion of acquisition, TCL Corporation, the parent company, will increase its direct and indirect holding stake from 52.41% to 61.21% of the enlarged share capital of TCL Multimedia.

TOT was established by TCL Corporation in December 2007 in China. The headquarters of TOT is located in Huizhou of Guangdong Province, PRC. It is principally engaged in the manufacturing, sales and maintenance of advanced display facilities and components, and is the first large screen LCD TV module plant invested and established by Chinese domestic enterprise. Currently, TOT is the Group’s key LCD module (including panels) supplier, accounting for approximately 30% of the Group’s total procurement volume in 2010. LCD module accounts for 70% of the total cost of LCD TV. The total designed capability of TOT amounts to 8 million units. It has invested in the construction of six LCD module production lines, with an annual production capacity of up to 6 million units.

As at 31 December 2010, the total assets and net assets of TOT were RMB1,047.7 million (equivalent of approximately HK$1,260.6 million) and RMB571.1 million (equivalent of approximately HK$687.2 million) respectively. Its operating revenue was RMB1,349.3 million (equivalent of approximately HK$1,623.5 million) for the year ended 31 December 2010, representing an increase of 6.3 times year-on-year, while the net profit amounted to RMB8.307 million (equivalent of approximately HK$9.995 million).

TCL Multimedia strives to proactively implement its long-term development strategy, with an emphasis on "Vertical integration, Innovation and internationalization". The acquisition of TOT will allow the Group to further integrate its production process and achieve potential cost synergy by enhancing vertically integrated production process and self manufacturing its key components. It will also rationalize its resource allocation and enhance production utilization in order to further increase the production efficiency of vertical integration strategy through the strategic cooperation with Shenzhen China Star Photoelectrics Technology Co Ltd. ("China Star Photoelectrics"), 8.5 generation LCD panel production project. In addition, TOT will allow the Group to achieve new revenue contribution while it will help ensure the component supply as well as better accommodate potential variation of component costs in future. TCL Corporation, the largest shareholder of TCL Multimedia, will increase the Group's shareholding to 61.21% upon the completion of acquisition, showing the confidence for TCL Multimedia’s future prospects and profitability.

Mr. Li Dongsheng, Chairman of TCL Multimedia said, "The proposed acquisition of TOT module business will further increase TCL Multimedia's competitive advantage in the LCD TV market and accelerate the industry's upgrade, as well as realize its development strategy of "Vertical integration, Innovation and internationalization". With the partnership with Huizhou Bri-King Optronics Co. Ltd and China Star Photoelectrics (8.5 generation LCD panel production plant to be commenced trial production in the third quarter of 2011), TCL Multimedia will further increase its synergy effect of the integration."

About TCL Multimedia

TCL Multimedia Technology Holdings Limited is one of the largest TV manufacturers globally and its products are sold all over the world. Headquartered in China, TCL Multimedia operates its manufacturing plants and R&D centres across all major continents. The Group's largest shareholder is TCL Corporation.

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