Financial Performance - For the six months ended June 30, 2022, TCL reported revenue of HKD 33.679 billion, a decrease of 3.6% compared to HKD 34.934 billion in the same period of 2021[11]. - Gross profit increased by 3.9% to HKD 5.782 billion, with an overall gross margin improvement of 1.3 percentage points to 17.2%[15]. - Net profit attributable to shareholders decreased by 76.1% to HKD 249 million, primarily due to a one-time gain of HKD 741 million from the sale of a stake in a semiconductor company in 2021[12]. - The adjusted net profit attributable to shareholders increased by 4.9% to HKD 257 million, reflecting a strong operational performance despite market challenges[11]. - The company's revenue decreased by 3.6% from HKD 34.93 billion in H1 2021 to HKD 33.68 billion in H1 2022[36]. - Gross profit increased by 3.9% from HKD 5.57 billion in H1 2021 to HKD 5.78 billion in H1 2022, with a gross margin of 17.2%, up 1.3 percentage points year-on-year[42]. - The net profit for the period was HKD 292,728,000, significantly down from HKD 1,078,353,000 in the previous year, indicating a decline of about 72.9%[68]. - Pre-tax profit decreased by 56.4% from HKD 1.150 billion in the first half of 2021 to HKD 502 million in the first half of 2022, primarily due to a one-time gain from the sale of equity in a subsidiary in the previous year[53]. - Profit for the period fell by 72.8% from HKD 1.078 billion in the first half of 2021 to HKD 293 million in the first half of 2022, with attributable net profit declining by 76.1% to HKD 249 million[55]. Revenue Segments - Revenue from innovative businesses reached HKD 5.259 billion, a significant increase of 21.1% year-on-year, with solar business contributing HKD 172 million in Q2 2022[16]. - Internet business revenue surged by 30.7% to HKD 942 million, enhancing profitability contributions[16]. - Revenue from the display business fell by 7.9% year-on-year to HKD 26.97 billion, accounting for 80.1% of total revenue[38]. - Revenue from innovative businesses grew by 21.1% year-on-year to HKD 5.26 billion, representing 15.6% of total revenue[40]. - The smart connection and smart home business generated revenue of HKD 839 million, with smart home revenue increasing by 25.8% to HKD 287 million[28]. - The global internet business revenue reached HKD 942 million, reflecting a year-on-year increase of 30.7%[29]. - The domestic internet business revenue amounted to HKD 814 million, a significant year-on-year growth of 35.7%, with ARPU reaching HKD 39.3, up 25.3%[30]. - The international internet business revenue was HKD 128 million, marking a year-on-year increase of 5.7%[31]. Market Performance - TCL's smart screen business maintained a global market share ranking of third, with significant growth in small and medium-sized display segments, increasing by 16.4%[16]. - In the first half of 2022, TCL's global sales of smart screens reached 10.15 million units, with sales of 65-inch and larger smart screens increasing by 36.9% year-on-year to 1.53 million units, accounting for 15.1% of total sales[18]. - International sales revenue of TCL smart screens decreased by 19.9% year-on-year to HKD 13.34 billion, but the sales of 65-inch and larger smart screens grew by 13.0%, leading to a gross margin increase of 2.6 percentage points to 17.0%[19]. - In the Chinese market, TCL smart screen sales increased by 1.1% year-on-year, with a market share rise of 0.7 percentage points to 13.9%, while sales of 65-inch and larger smart screens surged by 58.8%[22]. - During the 618 shopping festival, TCL smart screens achieved the highest online sales and market share for 65-inch and larger TVs, as well as for TCL Mini LED smart screens[23]. - The revenue from TCL's small and medium-sized display business reached HKD 7.06 billion, representing a year-on-year growth of 16.4%, with North America showing over 50% revenue growth[24]. - TCL Mini LED smart screen sales in China grew by 31.2% year-on-year, with TCL Mini LED and quantum dot smart screens ranking first in retail volume in the domestic market[22]. Research and Development - R&D expenses rose by 4.0% to HKD 1.07 billion, with an R&D expense ratio of 3.2%, up 0.3 percentage points from the previous year[15]. - The company aims to enhance its core technology competitiveness by investing in high-end display technologies such as Mini LED and 8K[33]. - The company continues to invest in cutting-edge technology and product development, launching multiple award-winning smart products, including Mini LED displays and AR/XR glasses[17]. - R&D expenses increased by 4.0% from HKD 1.029 billion in the first half of 2021 to HKD 1.070 billion in the first half of 2022, driven by investments in advanced display technologies and cloud services[47]. Strategic Initiatives - The company is focusing on high-end market penetration and international operations to improve operational quality and profitability[14]. - TCL's overall business strategy emphasizes brand leadership and cost advantages, aiming for growth in mid-to-high-end markets and new business avenues[14]. - The company plans to expand its global internet business and strengthen partnerships with overseas internet partners[33]. - The company is focusing on the development of new businesses such as photovoltaic and AR/XR smart glasses to drive long-term growth[33]. - For the full year of 2022, TCL aims to maintain its global market share leadership while improving product structure to counter market demand pressures[32]. Financial Position - As of June 30, 2022, the company had cash and cash equivalents totaling approximately HKD 6.973 billion, with 40.3% in USD and 42.8% in RMB[58]. - The company's capital-to-debt ratio was 0.3% as of June 30, 2022, with net borrowings of approximately HKD 47.739 million[59]. - The total non-current assets as of June 30, 2022, amounted to HKD 11,709,484,000, slightly up from HKD 11,682,651,000 at the end of 2021[72]. - Current assets totaled HKD 47,261,112,000, a decrease from HKD 47,851,686,000 at the end of 2021, representing a decline of about 1.2%[72]. - The company reported a significant foreign exchange loss of HKD 798,594,000 for the period, compared to a gain of HKD 245,859,000 in the previous year[68]. - The company's net current assets decreased to HKD 7,615,907 thousand from HKD 7,910,662 thousand, indicating a decline of about 3.73% year-over-year[73]. - The total liabilities of the company as of June 30, 2022, were HKD 41,422,445 thousand, compared to HKD 41,161,673 thousand at the end of 2021, reflecting an increase of about 0.63%[73]. Cash Flow - For the six months ended June 30, 2022, the net cash inflow from operating activities was HKD 131,786,000, a significant decrease from HKD 1,186,090,000 in the same period of 2021[77]. - The net cash outflow from investing activities was HKD 5,094,496,000 for the first half of 2022, compared to HKD 3,321,412,000 in the same period of 2021[77]. - The cash flow from financing activities showed a net inflow of HKD 180,594,000 in the first half of 2022, a decrease from HKD 1,556,245,000 in the same period of 2021[78]. - The company incurred a loss of HKD 4,087,149,000 from loans to TCL Holdings in the first half of 2022, compared to HKD 3,923,931,000 in the previous year[77]. Shareholder Information - As of June 30, 2022, TCL Holdings owns 1,308,057,288 shares, representing approximately 52.42% of the company's issued shares[156]. - Major shareholders, including Wang Jingbo and Zeng Qiang, each hold 348,850,000 shares, representing approximately 13.98% of the issued shares[156][157]. - The total number of issued shares as of June 30, 2022, is 2,495,495,667 shares[154]. - The company has granted restricted shares to directors and senior management, which have not yet vested as of June 30, 2022[153]. Compliance and Governance - The company adopted revised Hong Kong Financial Reporting Standards effective from January 1, 2022, ensuring consistency with the previous year's annual financial report[80]. - The audit committee reviewed the unaudited interim condensed consolidated financial report for the six months ending June 30, 2022[176]. - All directors confirmed compliance with the standard code of conduct for securities trading during the six months ending June 30, 2022[177]. - Independent non-executive directors reviewed the non-competition agreements and confirmed compliance during the specified period[180].
TCL电子(01070) - 2022 - 中期财报