TCL Communication Sustained Growth Momentum and Achieved Strong 2011 Annual Results

Revenue and Net Profit Surged 22% and 14% YoY Respectively

HONG KONG, Feb. 27, 2012 /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 audited results of the Group for the year ended 31 December 2011.

During the year under review, the Group was able to sustain growth momentum despite economic volatility worldwide as well as intensive competition in the industry. A totalled of 43.6 million units of handsets and other products were sold, up 20% compared with the previous year. Sales volume in China markets reached 5.1 million units, surged remarkably by 139% compared with last year. The impressive results are mainly driven by the Group's better sales mix, greater efforts in geographical expansion into new and high potential markets, the success of its "Step-up" product strategy and enhanced brand building efforts. In the fourth quarter of 2011, Gartner, Inc., an international research firm, named our ALCATEL brand one of the top ten global mobile vendors, on the back of its strong relationship with key global operators. IHS iSuppli and Strategy Analytics also ranked ALCATEL the 8th global brand in terms of sales volume in the same period.

The Group's revenue rose to HK$10.7 billion, representing a 22% increase year-on-year. Overall average selling price remained stable at US$31. Nevertheless, gross profit margin remained stable at 22% as compared to last year, the gross profit still increased to HK$2.3 billion from HK$1.9 billion, while net profit increased by 14% year-on-year to HK$801 million.

Basic earnings per share in 2011 increased to 72.83 HK cents from 64.69 HK cents in 2010. In view of this, the Board of Directors has recommended the payment of a final dividend of 15 HK cents per ordinary share, representing a full year dividend payout ratio of 40% of the profit attributable to owners of the parent during the year.

Commenting on the performance, Dr. Guo Aiping, the Chief Executive Officer of TCL Communication, said, "The Group continued to perform well and sustained growth momentum in 2011. By boosting the awareness of our ALCATEL ONE TOUCH brand, we continued to achieve measurable progress in expanding our existing markets in the Americas, Europe, the Middle East, Africa and the Asia Pacific region, as well as deepening our penetration into high potential emerging markets such as Brazil, Africa, India and Thailand. In China, we have successfully grasped market opportunities arising from the growing demand for smartphones and launched a number of new 3G Android products during the year. We have also continued to expand our nation-wide distribution network and established closer cooperation with the country's three major telecommunications operators and online media enterprises. With stronger R&D and product design capabilities, we have enhanced our product mix and the competitiveness of our products, which further consolidated our leading position worldwide."

Sales in Europe, the Middle East and Africa ("EMEA") region continued strong growth momentum in 2011, with shipments surged 21% year-on-year to 16.3 million units. The Group's smartphone products received positive response in the EMEA region, and delivered robust performance across Europe, Russia and South Africa. In addition, shipments to the Americas grew to 19.3 million units in 2011, representing a 3% increase compared to last year. This growth is mainly driven by the increase in market share with new sales channels that include tier-1 carriers, as well as the shift in sales from low-end phones to mid-high end feature phones and 3G Android smartphones with higher margins. In the Asia Pacific region, sales volume surged remarkably by 56% year-on-year to 2.9 million units, which was mainly attributable to open market development and its growing market share in the low to mid-end product segment as well as the high-end market. In view of the encouraging response to the Group's sponsorship of Le Tour de France 2011 cycling competition, the Group was appointed as the official partner of the Amaury Sport Organisation in France for the years 2011 through 2013, especially for the 100th Le Tour de France tournament in 2013. This sponsorship arrangement will further boost the global image of the ALCATEL ONE TOUCH brand.

The Group achieved impressive performance in China. In 2011, total sales volume in China market jumped by 139% to 5.1 million units, with achievements made in a number of areas such as the launch of new products, market expansion, brand building and closer relationships with operators. To tap on the growing demand of smartphones, the Group continuously launched a number of smartphones products to strengthen and enhance the product portfolio of smartphones, which in turn established good reputation and generated positive response from the market. In addition, with the deepened cooperation with the three major telecommunications operators in China, the Group has broadened its sales channels and achieved breakthroughs in Guangdong, Shenzhen, Sichuan, Fujian, Shandong, Jiangsu and Zhejiang. To accelerate the penetration of the ALCATEL ONE TOUCH brand in China's e-commerce market, the Group deepened the cooperation with e-commerce partners. The Group's ALCATEL ONE TOUCH online flagship store on Tmall (previously named as Taobao Mall) was ranked one of the top 10 Virtual stores in China during the year.

Most of new models launched during the year received positive market responses and were selected by major telecommunications operators around the world such as China Unicom, Orange, Vodafone, Telefonica and America Movil. During the year, the Group launched Xiangyun A919, which symbolizes the beginning of the Group's development of cloud-based smartphones. Meanwhile, following the launch of the TCL Pad16, the Group's first tablet, in July, the Group has also introduced Spark and TULI, two 7-inches display tablets, in December. With their impressive design and highly flexible customization features, the new tablets are set to be an important milestone in the Group's expansion in the tablet market. The Group's ALCATEL ONE TOUCH Facebook phones were selected by French Telecom - Orange and launched across Africa and Europe. The Group has continuously won recognition from the industry with the reception of numerous prestigious awards such as the "Red Dot Design Award - Product Design 2011", awarded to ONE TOUCH 818 and ONE TOUCH 355 PLAY; the "China Telecommunication Industry Enterprise Leadership" award presented at the "China Telecommunication Forum 2011"; the "China Smartphones Outstanding Award 2011" awarded to TCL A990; as well as the "Most Impressive Radiation Free Handset Award" awarded to ONE TOUCH 806D in India.

Looking forward to 2012, the Group is confident that it will continue to sustain its growth momentum in the coming year with business in China and sales of smartphones being the main growth drivers. The Group will step-up its efforts in launching new products, expanding its distribution network, and fostering its partnerships with three major telecommunication operators to enhance its market penetration in China.

Mr. Li Dongsheng, Chairman of TCL Communication, said, "With the solid results we have achieved over the previous years, we will continue to reinforce our leading position in global handset market by taking advantage of our reputable brand, strong R&D capabilities, diversified product portfolio and extensive market presence. To further propel our development, we will continue our geographical expansion into new and high-potential markets, pursue our proven 'Step-up' product strategy and strengthen our brand building efforts. We are well-poised for further growth in 2012, and we are confident that we will continue to bring fruitful returns to our shareholders."

Sales volume breakdown by market

About TCL Communication

TCL Communication Technology Holdings Limited (stock code: 02618.HK), together with its subsidiaries design, manufacture and market an expanding portfolio of mobile and internet products worldwide under two key brands - TCL and ALCATEL ONE TOUCH. The Group's portfolio of products is currently sold in the PRC and over 120 countries throughout the Americas, Europe, the Middle East, Africa and Asia Pacific. TCL Communication operates its highly efficient manufacturing plants and R&D centres in various provinces of the PRC with headquarters in Shenzhen, China. For more information, please visit its website at http://tclcom.tcl.com.

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