TCL Multimedia (01070) Turnarounds to Net Profit of HK$143 Million in the first half of 2009

Highlights:

-- Profit attributable to equity holders of the parent achieved a

turnaround in the first half of 2009 to HK$143 million profit,

including an unaudited gain on disposal of a subsidiary in Wuxi

amounting to HK$45 million, as compared with HK$198 million loss in the

first half of 2008. Operating profit increased by 15.7% year-on-year to

HK$273 million as compared with HK$236 million for the same period last

year.

-- Sales volume of LCD TVs continued to grow rapidly, increased by 93.0%

year-on-year to 2.93 million sets

-- The Group retained market leadership in the PRC TV market with 17.4%

market share in 1Q 2009 (Source: Displaysearch)

-- Gross profit reached HK$2,083 million in the first half of 2009,

representing 11.8% growth year-on-year as compared with HK$1,863

million in the first half of 2008

-- The Group maintained solid financial position; cash and bank balance as

at 30 June 2009 was HK$2,010 million

-- The PRC Government continued to implement favorable policies on

consumer electronic industry as part of its economy stimulus plans,

including raising the subsidy cap of the "Household Appliances Subsidy

Scheme" to RMB3,500, introducing the "Home Appliances Replacement

Scheme" and the "Promotion of Energy Efficient Appliances". The Group

had won the most bids for TV products under the "Household Appliances

Subsidy Scheme"

-- The Group's overseas business continued to improve with optimized cost

structure after successful operational restructuring

HONG KONG, Aug. 18 /PRNewswire-Asia/ -- TCL Multimedia Technology Holdings Limited ("TCL Multimedia", or the "Group", Hong Kong Stock Exchange: 01070) today announces the unaudited consolidated results for the six months ended 30 June 2009.

Despite the global economic downturn, the Group's turnover slightly declined 2.8%, from HK$11,716 million for the first half of 2008 to HK$11,391 million for the first half of 2009. However, through the Group's improvements in products, supply chain and cost control, profit attributable to equity holders of the parent achieved a turnaround during the period under review to HK$143 million profit as compared to HK$198 million loss for the same period of last year, including an unaudited gain on disposal of a subsidiary in Wuxi amounting HK$45 million. At the same time, operating profit increased by 15.7% year-on-year to HK$273 million as compared with HK$236 million for the same period last year. Amidst rising panel cost during the first half of 2009, the Group strategically optimized its supply chain and cost structure and significantly increased its gross margins to 18.3% for the first half of 2009 from 15.9% for the same period of last year. Gross profit was HK$2,083 million, up by 11.8% as compared to HK$1,863 million for the first half of 2008.

According to GfK, global LCD TV sales volume for the first five months of 2009 rebounded strongly and increased by 40% as compared to the same period last year as distributors had began to replenish their inventory. With the Group's strong brand, industry leadership and innovative products, overall sales volume of its LCD TV products increased by 93.0% and reached approximately 2.93 million sets, outpacing average industry growth rate. While achieving strong growth in the PRC market, the Group also recognized increasing orders from overseas markets, especially larger screen size models in North America and MPEG-4 models in Europe. The Group's AV products also recorded healthy growth during the period, sales volume increased 10.7% to approximately 9.03 million sets.

"Despite the ongoing challenges in the market environment, we continued to be successful in the execution of our business transition to LCD TV and became one of the leading LCD manufacturers in the global market," commented Mr. LEONG Yue Wing, CEO of TCL Multimedia. "We continued to focus on implementing strict margin, cost and risk management over each step of the supply chain and inventory control, in order to improve operational efficiency and effectiveness to manage our product quality. In addition, we made good progress on the completion of our vertical integration plan, of which our LCD TV Integration Plant in Huizhou, the PRC is expected to begin full operation in September this year. This plant is expected to produce 3 million LCD TV sets and 2 million semi-finished LCD TV kits when it is operating at full capacity."

During the period under review, the PRC Market continued to be the largest contributor and growth driver to the Group, with LCD TVs sales volume of 1.59 million sets which represented 248.9% increase when compared to the same period last year. The strong growth was mainly driven by the market transition of CRT TV to LCD TV and the PRC Government's continuous expansion of the "Household Appliances Subsidy Scheme". In addition to nationwide spring sales and "Old for New" promotion which boosted sales during the period under review, the Group also promoted wider adoption of the next generation digital TV by launching two core products - internet TV ("MiTV") and blue laser high definition TV.

The Group also achieved certain breakthroughs for its overseas markets. For European Markets, the Group continued its prudent development plan and recorded good results. LCD TV sales volume doubled in Western Europe during the six months period as compared to the same period of last year. At the same time, the Group restarted sales in Germany and Czech Republic, and introduced TCL brand LCD TVs in Western Europe with good selling-out performance. Amidst rising panel cost, the Group's North American Markets achieved operating profit in the second quarter of 2009 while operating loss decreased significantly year-on-year in the first half of 2009, as transportation costs and various fixed costs were lowered through successful contract renegotiations and operational restructuring. In Emerging Markets, the Group proactively provided value added service to OEM clients and launched a regional marketing campaign in Asia (especially for 2010 Guangzhou Asian Games) to enhance brand awareness and product recognition. As Strategic OEM markets gained economy of scale, and lower costs on volume leverage, brought very stable profit to the Group despite its lower margin, this segment continued to be an important market.

Looking ahead to the rest of 2009, consumer sentiment will remain weak in many key markets and business environment will continue to be challenging, though the PRC will outperform other major economies. Demand for TV products in the PRC will continue to increase at a much faster pace, attributable to the PRC Government's expansion of "Household Appliances Subsidy Scheme". At the same time, other supportive policies including "Home Appliances Replacement Scheme" and the "Promotion of Energy Efficient Appliances" are rolling out which provide ample growth potential for the Group.

Mr. LEONG Yue Wing, CEO of TCL Multimedia said "TCL Multimedia managed to turnaround during the economic tsunami, demonstrating commendable execution by our management team. We have also completed our core plan of transition from CRT TV to LCD TV business smoothly. Our strengthened operation enables us to allocate more capital in R&D to enhance our core competitiveness. We will launch more innovative products to the market with our extended R&D efforts. We are optimistic that the growth momentum will sustain and we will continue to dedicate ourselves to create more value for our shareholders."

Sales volume by region is indicated below:

1H 2009 1H 2008

('000 sets) ('000 sets) Change

LCD TVs 2,930 1,518 +93.0%

- PRC 1,591 456 +248.9%

- Overseas 1,339 1,062 +26.1%

CRT TVs 2,305 5,407 (57.4%)

- PRC 1,426 2,771 (48.5%)

- Overseas 879 2,636 (66.7%)

Total TV sales volume 5,235 6,925 (24.4%)

AV products 9,029 8,154 +10.7%

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.

For investor and media enquiries:

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Jane Liu

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PRChina

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