Financial Performance - TCL's total revenue for 2021 increased by 46.9% year-on-year to HKD 74.85 billion, with display business revenue growing by 43.5% to HKD 63.95 billion and innovative business revenue rising by 86.7% to HKD 8.55 billion[25]. - The gross profit for 2021 was HKD 12.53 billion, representing a 29.7% increase compared to HKD 9.66 billion in 2020[18]. - The net profit attributable to shareholders decreased by 35.9% to HKD 1.18 billion from HKD 1.85 billion in the previous year[18]. - The company achieved a basic earnings per share of HKD 0.4926, with a proposed final dividend of HKD 0.1670 per share, resulting in an annual payout ratio of 35.0%[30]. - Gross profit rose by 29.7% year-on-year to HKD 12.53 billion, although it lagged behind sales revenue growth due to supply chain disruptions[26]. - The group’s revenue from continuing operations reached HKD 74.85 billion, a year-on-year increase of 46.9%[31]. - Gross profit amounted to HKD 12.53 billion, reflecting a year-on-year growth of 29.7%, with a gross margin decrease of 2.3 percentage points to 16.7% due to rising panel and chip prices[31]. - Profit before tax from continuing operations decreased from HKD 2.08 billion in 2020 to HKD 1.45 billion in 2021, a decline of 30.4%[58]. - Net profit from continuing operations fell from HKD 1.89 billion in 2020 to HKD 1.28 billion in 2021, a decrease of 32.4%[59]. Dividends and Shareholder Returns - TCL announced a proposed final dividend of HKD 0.167 per share, which is a 45.2% increase compared to the previous year's final dividend of HKD 0.115[18]. - The board proposed a final dividend of HKD 0.167 per share for the year ended December 31, 2021, an increase from HKD 0.115 per share in 2020[158]. - The dividend policy targets a payout ratio of approximately 30% to 50% of the annual net profit, with the remaining profit allocated for business development and operations[124]. - The board retains the ultimate decision-making authority regarding dividend declarations and payments[124]. Revenue Growth and Business Segments - Internet business revenue increased by 49.9% year-on-year to HKD 1.85 billion, with significant contributions to profitability[27]. - Revenue from the large-size display business grew by 24.3% year-on-year to HKD 49.27 billion, while the small-size display business revenue increased by 29.5% to HKD 14.38 billion[29]. - The overall revenue from innovative businesses saw a significant increase, with a 70.7% year-on-year growth in distribution revenue across all categories[27]. - The smart commercial display business achieved a total revenue of HKD 310 million in 2021, representing a year-on-year growth of 18.3%[39]. - The smart connection business sold 5.25 million units in 2021, with revenue reaching HKD 1.56 billion, marking a significant year-on-year increase of 34.2%[40]. - The smart home business generated revenue of HKD 610 million in 2021, reflecting a substantial year-on-year growth of 78.9%[41]. - The overall internet business revenue reached HKD 1.85 billion in 2021, showing a year-on-year increase of 49.9%[43]. Product Development and Innovation - The company launched new products including the TCL 4K Mini LED Smart Screen C825 and the first borderless 98-inch IMAX Enhanced giant screen, TCL 98X9C, during 2021[12]. - The company launched several high-tech products, including AR/XR smart glasses and smart locks, contributing to a 34.2% year-on-year growth in smart connectivity revenue[27]. - The company aims to leverage advancements in display technology and artificial intelligence to drive economic growth and industry transformation[25]. - The company plans to enhance its R&D capabilities, focusing on high-end display technologies such as Mini LED, quantum dots, and 8K[47]. - The company is investing heavily in R&D, with a budget allocation of 5 billion HKD for new product development and AI technology advancements[75]. Market Position and Strategy - Global sales of TCL smart screens reached 23.58 million units, maintaining a global market share ranking of third[26]. - The company plans to continue its globalization strategy and increase R&D investment to drive long-term growth and shareholder value[28]. - The company aims to enhance its global supply chain and marketing channels to become the leading TV brand worldwide[48]. - The company aims to expand its global smart IoT ecosystem and strengthen its market position through technological innovation and brand development[47]. - The company is focused on product innovation and expanding into overseas markets to enhance its core technological competitiveness[166]. Corporate Governance and Compliance - The company has adopted a corporate governance code as a guideline for its governance practices, ensuring compliance with applicable standards[81]. - The board of directors consists of 11 members, with independent non-executive directors accounting for over half of the board, ensuring compliance with listing rules[89]. - The company has complied with the corporate governance code during the year ended December 31, 2021, except for deviations related to specific provisions[82]. - The board regularly reviews the group's financial and operational performance and discusses future development plans[86]. - The company has established a formal board appointment letter outlining the key terms and conditions of appointments for all directors[82]. Employee and Social Responsibility - The total employee cost for the year ended December 31, 2021, was HKD 5,989,639,000, reflecting the company's commitment to retaining high-quality talent[66]. - The company aims to build an AI x IoT ecosystem for a smart health lifestyle, driving global business development across all categories[145]. - The company has conducted a series of investor meetings and presentations throughout 2021 to maintain effective communication with shareholders[140]. - TCL's social responsibility initiatives included spending approximately RMB 49,546,000 on charitable projects in 2021[151]. - The TCL Charity Foundation has invested over RMB 38,000,000 in the "TCL Hope Project" since its inception, benefiting over 2,600 rural teachers[150]. Risk Management and Financial Health - The company has adopted a set of risk management and internal control policies to identify, assess, and manage significant risks[130]. - The board confirmed that the Group has sufficient resources to continue its operations for the foreseeable future, adopting the going concern basis for the financial statements[128]. - The company has established credit insurance for trade receivables to manage credit risk associated with customers[174]. - The company relies heavily on panel availability and pricing for its TV products, maintaining strong relationships with suppliers to mitigate risks[167]. Shareholder Structure and Stock Options - As of December 31, 2021, TCL Holdings owned 1,260,358,288 shares, representing 50.82% of the issued shares[187]. - The company has adopted a stock option plan in 2007, which was replaced by a new plan in 2016, allowing for a maximum of 10% of the issued shares to be granted under the new plan[2]. - The company has established a stock option plan to incentivize eligible participants, including employees and consultants, contributing to the group's operational success[2]. - The report highlights the importance of stock options in the company's overall compensation strategy[196].
TCL电子(01070) - 2021 - 年度财报