TCL Technology Group Corporation Annual Report 2021 (Summary)
Stock Code: 000100 Stock Abbreviation: TCL 科技 Announcement No.: 2022-030
TCL 科技集团股份有限公司
TCL Technology Group Corporation
ANNUAL REPORT 2021 (SUMMARY)
April 27, 2022
TCL Technology Group Corporation Annual Report 2021 (Summary)
Bucking up, Speeding up and Stepping up to a New Level
ANNUAL REPORT 2021 Chairman's Statement
In 2021, the Group recorded a revenue of RMB163.54 billion, up by 113.3% year-on-year; a
net profit of RMB14.96 billion, up by 195.3% year-on-year, a net profit attributable to the
company’s shareholders of RMB10.06 billion, up by 129.2% year-on-year; the net cash flow
generated from operating activities of RMB32.9 billion, up by 97% year-on-year; and a debt/asset
ratio of 61.2%, down by 3.8 percentage points. As stated above, the financial status remains stable,
various operating indicators significantly improved, relative competitive advantages were
strengthened obviously, and the Group took great steps towards becoming a global leader.
Excellent business performance depends on continuous corporate transformation, with a focus
on the main business, enhancing relative competitiveness and speeding up the development of core
industries. TCL CSOT achieved an operating revenue of RMB88.1 billion, a year-on-year increase
of 88.4%, and a net profit of RMB10.65 billion, a year-on-year increase of 339.6%. TCL
Zhonghuan achieved an operating revenue of RMB41.1 billion, a year-on-year increase of 115.7%,
and a net profit of RMB4.44 billion, a year-on-year increase of 200.6%. Other businesses under the
Group maintained stable growth.
The Group's development strategy focuses on the pan-semiconductor industry, aiming at
becoming a global leader or industry leader, continuously enhancing core competence and steadily
advancing various businesses. TCL CSOT will consolidate the competitiveness of large-sized LCD
business, maintain high efficiency, optimize the production line and product structure, and
accelerate the development of medium-sized t9 project. TCL CSOT has established a relative
competitive advantage in LTPS business and is investing in expanding LTPS production capacity
(Wuhan t5 project). TCL CSOT will strive to become the most competitive enterprise in the field of
semiconductor display by enhancing the competitiveness of its t4 OLED production line and
developing the next generation of new display technology.
TCL Zhonghuan new energy photovoltaic business has established industry-leading
competitiveness in the field of crystals and wafers. With the production of Yinchuan Crystal Plant, it
TCL Technology Group Corporation Annual Report 2021 (Summary)
will further enhance its competitive advantage. The Company will improve its industrial chain
layout, proactively expand global business, and make every effort to become a leader in the global
photovoltaic new energy industry.
Zhonghuan Advanced has made considerable progress in its semiconductor materials business.
While consolidating its competitive advantage of original products, it has rapidly improved the
competitiveness of 12-inch products and strives to become an industry leader in China.
The Group will firmly push ahead with its development strategy for the pan-semiconductor
industry and actively support the development of various industries.
The year 2022 will see a turbulent international situation. Risky events occur constantly,
posing a great impact on the global economy. The Group should be prepared for various risks wi th
worst-case scenario thinking.
The semiconductor display market has entered a downside circle since last September. In the
face of a pessimistic situation affected by economic slowdown and weak market demand, TCL
CSOT is under pressure. Moka Technology, acquired by the Group last year, is expected to maintain
stable business growth this year and contribute to profit growth, which will play a positive role in
the semiconductor display business. Benefiting from the global energy conservation and carbon
reduction policy, the new energy photovoltaic business ushers in a historic opportunity. TCL
Zhonghuan will accelerate the development of its new energy photovoltaic business. Zhonghuan
Advanced’s semiconductor materials business will seize the opportunity bro ught by the
development of China's integrated circuit industry. TCL Zhonghuan’s business is expected to
continue to grow robustly this year.
Facing the uncertainty of the global economy, the Group will firmly promote its global leading
development strategy, consolidate its basic capacity and actively expand the global operation. In the
meantime, the Group will prudently assess the project investments, manage operations risks,
maintain financial stability, and achieve development against the trend.
The Company has always been dedicated to returning high value to its shareholders. The
Board of Directors has proposed a final dividend of RMB1.5 per 10 shares to share the value of
corporate growth with shareholders.
TCL Technology Group Corporation Annual Report 2021 (Summary)
I would like to express my sincere gratitude for the trust of all our shareholders, for the support
from all our partners and users, as well as for the efforts of all employees!
April 27, 2022
TCL Technology Group Corporation Annual Report 2021 (Summary)
Part I Important Notes
This summary is based on the full text of the 2021 Annual Report of TCL Technology Group
Corporation. In order for a full understanding of the Company’s operating results, financial status
and future development plan, investors should carefully read through the aforesaid full text of the
annual report on the media designated by the China Securities Regulatory Commission (the
“CSRC”).
All the Company’s directors attended the Board meeting for the review of this Report and its
summary.
This Report and its summary have been prepared in both Chinese and English. Should there be
any discrepancies or misunderstandings between the two versions, the Chinese versions shall
prevail.
Independent auditor’s modified opinion
□ Applicable √ Not applicable
Board-approved final cash and/or stock dividend plan for ordinary shareholders
√Applicable □ Not applicable
Any capital reserves converted into share capital or not
□ Yes √ No
The Board has approved a final dividend plan for the ordinary shareholders as follows: based
on the share capital of 13,666,683,905 shares on April 27, 2022 that are eligible for profit
distribution (the total share capital of 14,030,642,421 shares minus the 363,958,516 shares in the
Company’s special securities account for repurchase that are not eligible for profit distribution), a
cash dividend of RMB1.5 (tax inclusive) per 10 shares is to be distributed to the shareholders,
totaling RMB2,050,002,585.75. The retained earnings of RMB5,971,326,768.25 will carry forward
for future distribution. Where any changes occur, before the implementation of the dividend plan, to
the share capital of the Company due to any convertible bonds-to-stock programs, share repurchases,
exercises of equity incentives, new share issues in refinancing, etc., the dividend will be adjusted
according to the principle of “adjusting the total payout amount under the same dividend ratio”,
TCL Technology Group Corporation Annual Report 2021 (Summary)
subject to the actual payout amount.
Board-approved final cash and/or stock dividend plan for preference shareholders
□ Applicable √ Not applicable
Part II Company Profiles
1. Corporate Information
Stock name TCL 科技 Stock code 000100
Place of listing Shenzhen Stock Exchange
Contact Information Board Secretary
Name Liao Qian
10/F, Tower G1, International E Town, TCL Science Park, 1001 Nanshan District, Shenzhen,
Office address
Guangdong Province, China
Tel. 0755-3331 1666
Email address ir@tcl.com
2. Main businesses or products of the Company during the Reporting Period
The Company’s main business structure contains semiconductor display business, new energy
photovoltaic and semiconductor materials business, industrial finance and other businesses. The
Company will continue to optimize its business structure and concentrate its resources on its main
business, so as to achieve the strategic goal of two global leading core industries: semiconductor
display, new energy photovoltaic and semiconductor materials.
TCL TECH.
TCL TECH.
Semi -conductor
Semi-conductor New energy photovoltaic & Industrial finance && Other
display
display Semi-conductor materials
Semi-conductor materials investment
China Ray Zhonghuan Zhonghuan TCL TCL Capital Highly
TCL CSOT TPC
Photovoltaic Advanced Financial
For details of Moka TCL
Juhua M icrochip
Technology
the Company
’s business, please refer to “Part III Management Discussion and Analysis” herein.
3. Key Financial Information
（1）Main accounting data and financial indicators in the past three years
Indicate whether there is any retrospectively restated datum in the table below.
TCL Technology Group Corporation Annual Report 2021 (Summary)
□ Yes √ No
2021 2020 2021-Over-2020 Change 2019
Revenue (RMB) 163,540,559,623 76,677,238,079 113.28% 74,933,085,688
Net profit attributable to the
10,057,443,528 4,388,159,018 129.20% 2,617,766,571
company’s shareholders (RMB)
Net profits attributable to the
company’s shareholders before
9,437,240,976 2,933,248,153 221.73% 235,119,321
non-recurring gains and losses
(RMB)
Net cash generated from operating
32,878,450,437 16,698,282,775 96.90% 11,490,096,405
activities (RMB)
Basic earnings per share
0.7463 0.3366 121.72% 0.1986
(RMB/share)
Diluted earnings per share
0.7354 0.3226 127.96% 0.1935
(RMB/share)
Up by 12.71 percentage
Weighted average return on equity 26.46% 13.75% 9.09%
points
Change of December 31,
At the end of the December 31,
December 31, 2020 2021 over December 31,
Reporting Period 2019
2020
Total assets (RMB) 308,733,133,305 257,908,278,887 19.71% 164,844,884,926
Owners’ equity attributable to the
43,034,234,611 34,107,795,454 26.17% 30,111,946,237
company’s shareholders (RMB)
（2）Main accounting data by quarter
Unit: RMB
Q1 Q2 Q3 Q4
Revenue 32,143,561,563 42,155,085,195 46,629,888,432 42,612,024,433
Net profit attributable to the company’s shareholders 2,403,729,935 4,380,154,872 2,318,085,363 955,473,358
Net profits attributable to the company’s shareholders
2,123,056,041 3,374,761,906 3,060,177,204 879,245,825
before non-recurring gains and losses
Net cash generated from operating activities 8,003,201,979 5,892,512,178 10,063,994,904 8,918,741,376
Indicate whether any of the quarterly financial data in the table above or their summations differs materially from what has been
disclosed in the Company’s quarterly or interim reports.
□ Yes √ No
4. Equity and Shareholders
（1）Table of the total number of ordinary shareholders and preference shareholders with resumed voting rights as well as
TCL Technology Group Corporation Annual Report 2021 (Summary)
shareholding of the top ten shareholders
Unit: share
Number of
Number of preference
Number of
ordinary shareholders
preference
Total ordinary shareholders at with resumed
shareholders
shares held at 799,609 the month-end 773,077 0 voting rights at 0
with resumed
the period-end prior to the the month-end
voting rights at
disclosure of prior to the
the period-end
this Report disclosure of this
Report
Top 10 shareholders
Name of Nature of Shareholding Total shares held Restricted shares Shares in pledge, marked or frozen
Shareholder shareholder ratio (%) at the period-end held Share Status Shares
Li Dongsheng Domestic Put in pledge by Li
198,838,800
and his natural Dongsheng
8.26 1,158,599,393 610,181,602
acting-in-concer person/general Put in pledge by
344,899,521
t party legal person Jiutian Liancheng
Huizhou
Investment State-owned
5.30 743,139,840 0
Holding Co., legal person
Ltd.
Wuhan Optics
Valley
State-owned
Industrial 3.98 558,552,396 0 Pledge 255,754,475
legal person
Investment Co.,
Ltd.
Hong Kong
Securities Foreign legal
3.19 447,848,011 0
Clearing person
Company Ltd.
China Securities
Domestic
Finance
general legal 2.66 373,231,553 0
Corporation
person
Limited
Tibet Tianfeng
Domestic
Enterprise
general legal 1.76 246,568,838 0
Management
person
Co., Ltd.
TCL Fund, wealth 0.81
TCL Technology Group Corporation Annual Report 2021 (Summary)
Technology management 113,143,154 0
Group product, etc.
Corporation -
2021 to 2023
Employee Stock
Ownership Plan
(Phase I)
Sinatay Life
Insurance Co., Fund, wealth
Ltd. - management 0.74 104,190,172 0
Conventional product, etc.
Product
ICBC Credit
Suisse Fund -
Agricultural
Bank of China -
Fund, wealth
ICBC Credit
management 0.53 74,761,500 0
Suisse China
product, etc.
Securities
Financial Asset
Management
Plan
Southern Asset
Management
Agricultural
Bank of China Fund, wealth
Southern China management 0.53 74,761,500 0
Securities product, etc.
Financial Asset
Management
Plan
Mr. Li Dongsheng and Ningbo Jiutian Liancheng Equity Investment Partnership (Limited
Note on the above shareholders’ Partnership) became persons acting in concert by signing the Agreement on Concerted Action,
associations or concerted actions holding 1,158,599,393 shares in total and becoming the largest shareholder of the
Company.
Top 10 ordinary shareholders Tibet Tianfeng Enterprise Management Co., Ltd., a shareholder of the Company, holds
involved in securities margin 154,173,746 shares through the general securities account, and holds 92,395,092 shares through
trading the credit securities account, with a total of 246,568,838 shares actually held.
Special account for share The top 10 shareholders above include “The Securities Account of TCL Technology Group
repurchases among the top 10 Corporation for Repurchases”, but they are not listed in the above top 10 shareholders. As of the
shareholders end of the Reporting Period, there were 293,415,852 shares in the account.
TCL Technology Group Corporation Annual Report 2021 (Summary)
（2）Total number of preferred shareholders and top 10 preferred shareholders
□ Applicable √ Not applicable
（3） Disclosure of property rights and control relationship between the Company and the actual controller
with block diagram
□ Applicable √ Not applicable
5. Existing bonds on the date of approval and disclosure of the annual report
√Applicable □ Not applicable
(1) General Information on Corporate Bonds
Unit: RMB'0,000
Way of
principal
Date of Outstanding Place of
Bond name Abbr. Bond code Value date Maturity Coupon rate repayment
issuance balance transaction
and interest
payment
TCL Interest
Corporation payable
Corporate annually
Shenzhen
Bonds Publicly 17TCL April 18, April 19, April 19, and
112518 100,000 3.40% Stock
Offered in 2017 01 2017 2017 2022 principal
Exchange
to Qualified repayable in
Investors full upon
(Tranche 1) maturity
TCL Interest
Corporation payable
Corporate annually
Shenzhen
Bonds Publicly 17TCL and
112542 July 6, 2017 July 7, 2017 July 7, 2022 15,700 3.45% Stock
Offered in 2017 02 principal
Exchange
to Qualified repayable in
Investors full upon
(Tranche 2) maturity
TCL Interest
Corporation payable
Corporate annually
Shenzhen
Bonds Publicly 18TCL June 5, June 6, June 6, and
112717 17,001.90 4.00% Stock
Offered in 2018 01 2018 2018 2023 principal
Exchange
to Qualified repayable in
Investors full upon
(Tranche 1) maturity
TCL Interest Shenzhen
18TCL August 17, August 20, August 20,
Corporation 112747 200,000 3.55% payable Stock
02 2018 2018 2023
Corporate annually Exchange
TCL Technology Group Corporation Annual Report 2021 (Summary)
Bonds Publicly and
Offered in 2018 principal
to Qualified repayable in
Investors full upon
(Tranche 2) maturity
TCL Interest
Corporation payable
Corporate annually
Shenzhen
Bonds Publicly 19TCL May 17, May 20, May 20, and
112905 100,000 4.33% Stock
Offered in 2019 01 2019 2019 2024 principal
Exchange
to Qualified repayable in
Investors full upon
(Tranche 1) maturity
TCL Interest
Corporation payable
Corporate annually
Shenzhen
Bonds Publicly 19TCL July 19, July 23, July 23, and
112938 100,000 4.30% Stock
Offered in 2019 02 2019 2019 2024 principal
Exchange
to Qualified repayable in
Investors full upon
(Tranche 2) maturity
TCL Interest
Corporation payable
Corporate annually
Shenzhen
Bonds Publicly 19TCL October 17, October 21, October 21, and
112983 200,000 4.20% Stock
Offered in 2019 03 2019 2019 2024 principal
Exchange
to Qualified repayable in
Investors full upon
(Tranche 3) maturity
Investor eligibility (if any) For qualified investors / For professional investors
Trading system applicable Not applicable
Risk of termination of listing and
No
trading (if any) and countermeasures
(2) The latest tracking ratings and rating changes of bonds
□ Applicable √ Not applicable
(3) Selected financial information of the Company in the past two years:
Unit: RMB'0,000
Change of December
At the end of the Reporting
Item December 31, 2020 31, 2021 over December 31,
Period
2020
TCL Technology Group Corporation Annual Report 2021 (Summary)
Current ratio 1.08 0.92 15.43%
Debt/asset ratio 61.2% 65.1% -3.84%
Quick ratio 0.83 0.66 16.95%
2021 2020 YoY change
Net profit before non-recurring 1,398,268 351,280 298.05%
gains and losses
Debt to EBITDA ratio 20.86% 11.36% 9.50%
Interest coverage ratio 4.57 2.58 77.50%
Cash coverage ratio 8.54 6.45 32.52%
EBITDA coverage ratio 8.39 5.98 40.28%
Debt repayment ratio 100% 100% 0.00
Interest payment ratio 100% 100% 0.00
Part III Report of the Board
I. Principal Activity of the Company in the Reporting Period
In 2021, the international situation was increasingly complex, and regional conflicts worsened.
With the continuation of the pandemic, the global economy faced huge risk challenges. China
pushed ahead the establishment of a "dual circulation" development pattern that focuses on
domestic flow and features positive interplay between domestic flow and international engagement
as a major strategic task. China built its comparative advantages in major links, strengthened its
influence in the industrial chain, supply chain and innovation chain, gradually transformed in an
orderly way, upgraded to a green and low-carbon development mode and achieved high-quality
development across the board. In the face of opportunities and challenges, the Company
continuously focused on the semi-conductor display business, the new energy photovoltaic and
semi-conductor materials business. In accordance with its requirements of "Ramp up, Catch up", the
Company implements the operating strategy of "improving operating quality and profitability,
consolidating advantages and improving disadvantages, accelerating global layout, and promoting
innovation-driven development" and is dedicated to be a global leading and competitive group with
core industries all occupying world leading positions.
During the reporting period, the semiconductor display business, and new energy photovoltaic
and semiconductor materials business drove the growth of the Company. Both the operating scale
TCL Technology Group Corporation Annual Report 2021 (Summary)
and financial revenue hit a new high. The Company achieved an operating revenue of RMB163.54
billion, a year-on-year increase of 113.3%; achieved a net profit of RMB 14.96 billion, a
year-on-year increase of 195.3%; achieved a net profit attributable to the shareholders of the listed
company of RMB10.06 billion, a year-on-year increase of 129.2%. Benefiting from the overall
higher prosperity in the industry, the Company's capacity scale increased and its structure was
optimized, as the Company’s display business saw its revenue increase by 88.4% year-on-year and
the net profit increase by 339.6%. The Company seized the development opportunity in the new
energy photovoltaic industry and gave full play to the advantages of intelligent manufacturing,
advanced technology and production capacity. G12 silicon wafer ranked top in global market shares.
The semiconductor material business continued to maintain strong growth, and shipments of
8-12-inch polished wafers and epitaxial wafers rose quickly. The new energy photovoltaics and
semiconductor materials businesses achieved an operating revenue of a year-on-year increase of
115.7%, and a net profit of a year-on-year increase of 200.6%.
Driven by innovation in product technology and continuously expanding in the major
links alongside the industrial chain and value chain. During the reporting period, the Company
invested RMB8.77 billion in R&D, with a year-on-year increase of 34.1%. The company newly
filed 1,254 PCT patent applications, with a total of 14,051 applications filed, ranked top among the
Chinese enterprises. The display business further increased R&D investments in the process,
materials and equipment of new display technologies such as printing OLED, QLED and
Micro-LED, and jointly built an industrial ecosystem for technology development and application
with industries, scientific research institutions and universities. The number of patent applications
for quantum dot electroluminescence technology and materials reached 1,964, ranking second in the
world. A series of patented technologies and know-how have been developed with independent
intellectual property rights in the new energy photovoltaic field, and the introduction of the "G12 +
integrated shingle" technology platform has been accelerated. The Company will continue to
increase resource investment in the field of new energy photovoltaic and semi -conductor materials
and improve its technical strength in key links alongside the industrial chain.
Strengthen the integration of intelligent technology and industrial manufacturing, and
build future competitiveness based on digitization and intelligence. The Company has greatly
TCL Technology Group Corporation Annual Report 2021 (Summary)
improved its production efficiency and product quality through introducing automation and
intelligent equipment, building the industrial Internet and a big data platform, accelerating industrial
4.0 upgrading, and integrating intelligent technologies such as artificial intelligence and IoT into
products. TCL CSOT has introduced intelligent technology projects such as artificial intelligenc e
identification systems and multi-factor analysis to develop an overall solution for AI industrial
quality inspection with independent intellectual property rights, and the level of intelligent
manufacturing has been greatly improved. Through the construction of intelligent benchmarking
factories, TCL Zhonghuan has improved its production and operation efficiency by more than 70%
and increased its labor efficiency by 4 to 5 times.
Increase production capacity in an orderly way, along with a high-end product system,
and optimize the business portfolio and revenue structure. The semi-conductor display business
follows a strategy featuring the high-end development for large-sized panels and excellent quality
for medium-sized and small-sized panels. The market share of TV panels is second in the world, of
which the high-end market occupies first place, and the market share of interactive whiteboards is
the first in the world; the medium-sized business revenue of the LTPS production line accounts for
41%, the shipment of notebook computers is the second in the world, onboard products have been
imported into many core customers, having become a profit growth point. New energy
photovoltaics further enhanced the industrial application of G12 + silicon wafers and the integrated
shingled technology platform. The Company's total monocrystalline silicon production capacity was
increased to 88GW. Ningxia Yinchuan 50GW (G12) solar grade monocrystalline silicon material
intelligent plant was put into operation in January 2022. Both production and sales of
semiconductor materials have increased significantly, enabling the company to transform into a
first-class comprehensive solution provider in the industry.
In order to actively implement CSR and achieve high-quality development, the Company
upgraded its corporate culture and took on "leading technology, realizing harmony and
coexistence" as its vision and mission to promote sustainable social development. The
Company advocates a green development model and promotes low-carbon at the production and
final-user ends. TCL CSOT improves the use of clean energy by building a photovoltaic power
generation system on the plant roof. HVA, 1G1D display and other technologies can effectively
TCL Technology Group Corporation Annual Report 2021 (Summary)
improve the transmission of light, improving image quality while saving energy. The G12 silicon
wafer of TCL Zhonghuan can achieve higher photoelectric conversion and manufacturing efficiency.
The Company continues to devote itself to poverty alleviation, student aid, disaster relief and other
charitable activities in an innovative manner. The funds and materials with a total of RMB300
million are used for normalized charitable services to promote joint social progress.
On the occasion of the 40th anniversary and looking into the future, we will pool our
efforts, take science and technology as the guide and innovation as the driving force, continue
to "ramp up, catch up", and accelerate to become the world's leading intelligent technology
industry group, and shoulder greater responsibility and missions for the prosperity of the
national economy and people's lives.
II. Main businesses of the Company during the reporting period
Based on the semi-conductor display business, new energy photovoltaic and semi-conductor
materials as the main business, the Company will continue to optimize its business structure, and
further focus on its main businesses, to achieve the strategic goal of global leadership in its two core
industries.
TCL TECH.
TCL TECH.
Semi-conductor New energy photovoltaic & Industrial finance & Other
display Semi-conductor materials investment
Zhonghuan Zhonghuan TCL TCL Capital
TCL CSOT China Ray Highly TPC
Photovoltaic Advanced Financial
Moka TCL
Juhua
Technology M icrochip
(I) Semiconductor display business
In the first half of 2021, the supply-demand relationship was improved in the semi-conductor
display industry with increased industry concentration. Affected by fluctuated market demands and
logistics costs, the large-size products saw a sharp decrease in price in the second half of the year.
As a leading enterprise, TCL CSOT continued to expand its scale and optimize its business
structure through endogenous growth and external acquisition. Both revenue and profit hit a
record high. During the reporting period, TCL CSOT achieved a total of sales areas of 39.4915
TCL Technology Group Corporation Annual Report 2021 (Summary)
million square meters, a year-on-year increase of 36%, and semi-conductor display business
achieved a revenue of RMB88.1 billion, a year-on-year growth of 88.4% and a net profit of
RMB10.65 billion, a year-on-year increase of 339.6%.
In the large-size segment, TCL CSOT continued to expand its scale, adhering to the
strategy of high-end products and enhanced its competitive advantage. Factories t1, t2 and t6
maintained effective operations, Factory t7 ramped up as scheduled; Factory t10 (formerly Samsung
Suzhou LCD factory) has been consolidated since Q2 and the acquisition of the remaining 30%
minority equity was completed at the end of September, thus becoming a wholly-owned subsidiary
of TCL CSOT. The Company's leading position in large-size panels was further reinforced, ranking
2nd globally in terms of market share of TV panels, ranking 1st globally in terms of market share of
55-inch products; the high-end strategy has achieved remarkable results, with the shipment area of
65 inch and above products exceeding 47% of the total shipment area, 65-inch and 75-inch products
ranked No.2 in terms of market share, and the Company ranked 1st globally in terms of market
share of 8K and 120 HZ high-end TV panels; the Company has accelerated the adjustment of its
product structure, with non-TV business exceeded 23%, and become the core supplier for the
leading customers in terms of commercial display markets such as interactive whiteboards, digital
signage and splicing screens, among which the market share of interactive whiteboards increased to
No.1 globally.
In the medium-sized segment, TCL CSOT diversified its product structure, actively
introduced leading customers, invested in new production capacity and de veloped a new
engine for business growth. The Company has seized opportunities for rapid growth in the market
of medium-sized products and increased its market share through optimizing existing production
lines. The Company ranks 1st globally in terms of market share of e-sports displays in Q4, Factory
t3 production line accelerated the medium-sized transformation, and the revenue of non-mobile
phone products increased to 41%, 2nd globally in terms of shipment volume of LTPS notebook
panels, and 1st globally in terms of shipment volume of LTPS tablet PC panels; the shipment
volume of vehicle-mounted panels has increased rapidly by introducing a number of Chinese and
foreign leading customers; the Company has achieved cooperation with brand customers with
respect to display and laptop products equipped with Mini LED backlighting. To meet the needs of
TCL Technology Group Corporation Annual Report 2021 (Summary)
customers, the Company is expanding its 6th generation LTPS LCD display panel production line.
The plant of t9 project has been constructed for 8.6th generation oxide semi-conductor new display
device production line and SoP is expected in 2023. The Company's medium-sized business layout
will be gradually improved to explore a new drive for business growth.
In the field of small-sized product businesses, TCL CSOT has improved productivity
through technological differentiation, improved the customer portfolio and improved the
operating indicators. The shipment volume of LTPS mobile phone panels of Factory t3 production
line ranked fourth in the world, and the new VR/AR display products were expanded to improve the
profitability. The first phase of t4 project has successfully reached production capacity, and the
second and third phases of production capacity are constructed as scheduled. The differentiation
advantage has been realized thanks to folding screens, under screen camera technology and LTPO
technology. The folding screen has successfully realized the SoP and supplied to the first-tier brand
manufacturer, and made a breakthrough in the development of new customers. Affected by high
R&D investments in the early stage and the fixed expenditure in the production capacity increase
period, t4 operating efficiency did not meet expectations. The Company will focus on improving
technical capacity of products, meeting the needs of strategic customers and gradually improving
operating efficiency.
Breakdown of semi-conductor display business：
Shipment area Shipment volume Revenue Net profit
10,000
10,000 Year- Year- RMB Year- RMB Year-
Item pieces /
square on-year on-year 100 on-year 100 on-year
10,000
meters (%) (%) million (%) million (%)
sets
Large-sized
3,774.7 36% 6,332.4 38% 565.5 95.1% 123.0 306.4%
products
Medium-to-small Decreased
sized products by RMB
174.5 23% 9,622 -3% 234.1 31.6% -11.1
1,150
million
Moka Not Not Not
- - 903.9 120.0 3.3
Technology applicable applicable applicable
TCL Technology Group Corporation Annual Report 2021 (Summary)
Other and offsets - Not Not
- - - -38.5 -8.7
applicable applicable
Total - - - - 881.0 88.4% 106.5 339.6%
Note: Moka Technology has been integrated since the second quarter of 2021. The numbers in the Table may contain rounding
errors.
In the long term, the LCD display industry will remain centered on Mainland China with an
optimized competitive pattern. The leading enterprises had significant advantages in terms of
management efficiency, scale, technology, research and development, supply chain, and so forth,
significantly increasing industry entry barriers. In the short term, affected by the turbulent
international political and economic situation, economic growth has slowed down, and market
demands have become sluggish. The semi-conductor display industry faces huge operating
challenges.
TCL CSOT will further optimize its business portfolio and accelerate transformation and
upgrading from a leader in large-sized displays to a leader in all sizes of displays. With the capacity
increase of Factory t4 phase II and phase III and the expansion of Factory t9 and Factory t3, TCL
CSOT will continue to increase its capacity and improve the layout of large, medium and small size
display businesses. Large size businesses continue to increase the proportion of high-end products
and take a lead in becoming a global leader. Small and medium-sized businesses build a business
matrix mixed with product lines and technology lines, shaping a diversified business layout in
combination with flexible OLEDs, LTPS and module factories, with product planning for all
technological categories.
The Company will uphold efficiency-oriented operations, maintain industry-leading
profitability, improve intelligent manufacturing capacity, management efficiency and personnel
efficiency by building a digital plant. The existing production lines will end their depreciation
period respectively, it is expected that the proportion of depreciation in revenue will gradually
decline, further improving the profitability of TCL CSOT. Meanwhile, TCL CSOT will further
increase R&D investments. By means of equity investment and strategic cooperation and other
methods, the Company works with industrial chain partners to jointly promote the development of
new display technologies such as OLED, Miniled and Microled.
TCL Technology Group Corporation Annual Report 2021 (Summary)
(II) New energy photovoltaic and semiconductor materials business
The global energy structure is undergoing transformation. Renewable energy ushers in new
opportunities for development, and semi-conductor materials, as the upstream of the electronic
industry chain, ushering in fast development following the trend of domestic substitution. Since
2021, as the raw material price keeps rising, the manufacturers face pressure in the short term. In
the face of both opportunities and challenges, TCL Zhonghuan adopts a "9215" development plan,
resolutely implementing "global leading strategies for new energy photovoltaic materials and the
strategy of catching up and surpassing for semiconductor materials", to deepen institutional reform,
comprehensively improve organizational capacity and release corporate vitality. TCL Zhonghuan
pushes ahead with technological innovation and deeply participates in the governance of global
intellectual property rights; builds a scientific and orderly manufacturing mode of transformation to
ensure high-quality corporate development.
During the reporting period, the new energy photovoltaics and semiconductor materials
businesses achieved a total revenue of RMB41.1 billion, a year-on-year increase of 115.7%, and a
net profit of RMB4.44 billion, a year-on-year increase of 200.6%.
1. New energy photovoltaics industry
The Company gives full play to its leading technology advantages and drives rapid growth of
the business scale. During the reporting period, TCL Zhonghuan increased the capacity of new
energy photovoltaics to 88GW, with improved product adaptability, and the market share rose to
28%. Relying on the advantages of G12 silicon wafer technology and the manufacturing mode, the
G12 silicon wafer market share ranked first in the world, while high-efficiency N-type
monocrystalline silicon wafer ranked first in the world, and the global industrial influence was
further strengthened. The Company continues to expand the advantages of advanced production
capacity. The 50GW (G12) single crystal silicon material plant of Ningxia Zhonghuan phase VI has
been put into operation, and the 25GW monocrystalline silicon plant in Tianjin and 30GW
monocrystalline silicon material plant in Inner Mongolia are under construction, which will further
facilitate the release of G12 silicon chip production capacity of the Company.
In terms of modules, benefiting from the rapid increase of overseas high-power and distributed
products, the Company has expanded its international market through patented technology of
TCL Technology Group Corporation Annual Report 2021 (Summary)
shingle 3.0, making it the benchmark in power generation efficiency of high-power modules.
During the reporting period, the production capacity of photovoltaic modules increased to 11GW,
with a year-on-year increase of 120%. The G12 high-efficiency shingled PV module project has
realized SoP in Jiangsu Province, while the G12 high-efficiency shingled PV module project in
Tianjin has hastened its SoP.
Based on long-term technological development and the comprehensive application of industry
4.0, the Company has established its differentiated competitiveness in production efficiency and
product reliability. During the reporting period, the consumption rate of silicon material per unit
decreased by nearly 3% year-on-year, the monthly production of silicon rod per unit increased by
30%, the labor productivity and the first pass yield (FPY) of G12 production line increased
significantly, and the monthly production and output per single unit took a lead in the industry.
Relying on industry 4.0, the Company has cooperated with upstream and downstream customers to
establish a flexible cooperation mode, which has effectively driven the production and marketing
scale and improved product quality.
2. Semiconductor materials industry
The global semi-conductor industry is increasingly moving to Mainland China. China has
become the largest semiconductor market and continues to maintain the fastest growth rate, driving
the rapid development of the semiconductor material industry. The Company's semiconductor
materials business has developed rapidly. During the reporting period, semiconductor materials
reached the preset capacity targets of 8-inch 750,000 pieces/month and 12-inch 170,000
pieces/month. 8-inch products have established a comprehensive product capability and market
competitiveness comparable to international first-tier manufacturers; the 12-inch products were in a
breakthrough period. The products applied to the customized process have passed the certification
of several domestic leading customers under stable SoP. The products adopting the advanced
process accelerated to catch up, and products above 28nm were successfully verified by several
customers and entered a stage of capacity increase.
Looking into the future, the dual carbon policy will drive the high-efficiency and high-quality
development of the global economy, and the global economic pattern is bound to drive the
reconstruction of the high-tech industrial chain dominated by electronic information. The Company
TCL Technology Group Corporation Annual Report 2021 (Summary)
will seize strategic opportunities, increase investment in new energy photovoltaic and
semi-conductor fields, strengthen the control of key links and strategic nodes alongside the
industrial chain, and contribute to the high-tech industry breakthrough under the trend of energy
structure transformation.
The Company is maintaining steady development in other aspects of corporate development.
TCL financial company focused on ensuring the Company's project capital demand, reducing costs
and increasing efficiency, improving its active management of industrial funds and risks, and
supporting the high-quality development of the industry. TCL Capital explored investment and
deployment opportunities in key areas that drive the development of the science and technology
industry, such as new display types, semiconductor and core materials and process equipment
related to the industrial chain, and promoted technology and business synergy. Highly and TPC
stably improved their operation benefits, significantly enhancing both quality and efficiency.
TCL Technology Group Corporation
April 27, 2022
