TCL Multimedia Records a Profit of Approximately HK$240 Million from Equity Divestment

HONG KONG, June 29, 2011 /PRNewswire-Asia/ -- TCL Multimedia Technology Holdings Limited ("TCL Multimedia" or "the Group", HKSE stock code: 01070) is pleased to announce that its wholly-owned subsidiary, TCL Holdings (BVI) Limited has entered into the Equity Transfer Agreement with Talent Bright International Limited ("Talent") on 28 June 2011, pursuant to which TCL Multimedia has agreed to dispose of its entire equity interest in TCL King Electronics (Shenzhen) Company Limited, an indirectly wholly-owned subsidiary, to Talent at a consideration of approximately RMB 315.5 million (equivalent to approximately HK$378.6 million). After the completion of the disposal, TCL Multimedia will record a gain after tax of approximately RMB 200.4 million (equivalent to approximately HK$240.4 million). The proceeds will serve as working capital for TCL Multimedia. As part of the Group's continuous optimization of its assets and business structure, the transaction will bring a positive gain, as well as strengthen TCL Multimedia's cash flow and financial position, thus enhancing the overall operating strength of the Group.

In response to the industry development trend, the transaction marks an important step in TCL Multimedia's endeavour to accelerate its industrial upgrades. Through realizing idle assets, the Group will not only improve asset utilization and lower operating costs, but will also centralize resources to strengthen its core LCD TV business development In addition, it will enhance its differentiated advantages and competitiveness in international markets in order to strengthen its market position.

To realize the rapid development of its core LCD TV business, TCL Multimedia, through its vertical integration strategy, strives to proactively strengthen its business structure. The Group's vertically integrated LCD TV assembly plant in Huizhou, China commenced mass production in 2010, showing that its economies of scale have gradually been achieved. On 17 June, the Group also announced plans to build a vertically integrated LCD TV production plant in Hohhot, Inner Mongolia with an annual production capacity of 3 million LCD TV sets in order to meet TCL Multimedia's rapid sales growth and market demand. Moreover, the Group has announced plans to issue new shares at an issue price of HK$3.20 per share so as to acquire an LCD TV module plant in Huizhou from TCL Corporation. The acquisition will lower production costs (such as transportation and packaging costs), shorten inventory turnover days and fully realize synergistic effects to significantly improve the Group’s competitiveness in the TV manufacturing industry. In addition, the 8.5-generation LCD panel production lines of Shenzhen China Star Photoelectrics Technology Co. Ltd invested by the Group's parent company, TCL Corporation, are scheduled to commence trial production in the third quarter of 2011, which will bring strategic support to TCL Multimedia and ensure the Group’s LCD panel supply. With this extension of its supply value chain, TCL Multimedia will further increase its competitive advantage in the LCD TV industry in future.

Mr. Li Dongsheng, Chairman of TCL Multimedia, said, "We have capitalized on a great opportunity for the Group to realize idle assets at a reasonable price under current market conditions. The proceeds from the disposal will not only provide the Group with additional cash flow but will also result in strong financial support for the Group's business development in LED-backlight LCD TVs, as well as innovative products, such as 3D TVs and smart TVs, thus laying a solid foundation for further strengthening the Group's competitive edges."

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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