TCL科技：2023年一季度报告(英文版)

Stock Code: 000100 Stock Abbr.: TCL TECH. Announcement No.: 2023-031

TCL科技集团股份有限公司TCL Technology Group Corporation

First Quarter 2023 Report

April 27, 2023

Content

Section I Important Notices and Definitions ...... 3

Section II Key Financial Information ...... 5

Section III Management Discussion and Analysis ...... 7

Section IV Shareholder Information ...... 11

Section V Other Significant Events ...... 13

Section VI Quarterly Financial Statements ...... 14

Section I Important Notices and Definitions

The Board of Directors (or the “Board”), the Supervisory Committee, directors, supervisors andsenior management of TCL Technology Group Corporation (hereinafter referred to as the “Company”)hereby guarantee that this quarterly report is factual, accurate and complete, and shall be jointly andseverally liable for any misrepresentations, misleading statements, or material omissions therein.Mr. Li Dongsheng, the Chairman of the Board, Ms. Li Jian, the person-in-charge of financialaffairs (Chief Financial Officer), and Mr. Peng Pan, the person-in-charge of the financial department,hereby guarantee that the financial statements carried in this Report are factual, accurate and complete.All the Company’s directors attended the board meeting for the review of this Report.The future plans, development strategies or other forward-looking statements mentioned in thisReport shall NOT be considered as promises of the Company to investors. Therefore, investors arekindly reminded to pay attention to possible investment risks.This Report has not been audited. This Report has been prepared in both Chinese and English.Should there be any discrepancies or misunderstandings between the two versions, the Chineseversion shall prevail.

Definitions

Section II Key Financial InformationI. Key accounting data and financial indicatorsIndicate whether there is any retrospectively adjusted or restated datum in the table below

□ Yes ? No

The total share capital at the end of the last trading session before the disclosure of this Report:

Fully diluted earnings per share based on the latest total share capital above:

II. Non-recurring profit and loss items and amounts

?Applicable □ Not applicable

Unit: RMB

Details of other profit and loss items that meet the definition of non-recurring profits and losses:

□ Applicable ?Not applicable

The Company has no other profit and loss items that meet the definition of non-recurring profits and losses.Note on non-recurring profit and loss items listed in the Explanatory Announcement No. 1 on Information Disclosure for CompaniesOffering Their Securities to the Public—Non-Recurring Gain/Loss defined as Recurring Gain/Loss items:

□ Applicable ?Not applicable

The Company does not have any non-recurring profit and loss items listed in the Explanatory Announcement No. 1 on InformationDisclosure for Companies Offering Their Securities to the Public—Non-Recurring Gain/Loss that are defined as recurring profit and

loss items.

III. Changes of key accounting data and financial indicators and reasons therefor?Applicable □ Not applicable

Unit: RMB

Section III Management Discussion and Analysis

The global political and economic situation remains both complicated and challenging thus farthis year. With developed economies still experiencing inflation pressure, overseas economy growthis expected to slow down, while China's economy has generally shown sound momentum. In the faceof a complicated and volatile external business environment, the Company continues to maintain itsstrategic position with a focus on developing semiconductor displays, new energy photovoltaic andsemiconductor materials along with other related semiconductor industries. On the basis of itsoperating strategy of “enhancing the quality and efficiency of operations, playing to strengths whilstshoring up weaknesses, accelerating global strategic development and driving development withinnovation”, the Company continues to improve its comparative competitiveness, strengthen riskcontrol and maintain robust operations.During the reporting period, the Company registered revenue of RMB39.44 billion, representinga decline of 2.8% year-on-year; net profit of RMB110 million; net profit attributable to shareholdersof the listed company of -RMB550 million; and a net operating cash flow of RMB4.5 billion. TheCompany's declines in performance are mainly due to the following reasons: the average price ofmainstream semiconductor display products was significantly lower than that during the same periodof last year, and industry profit margins hit cyclical lows, which resulted in the performance of thesemiconductor display business dropping significantly year-on-year. However, the Company hasmanaged to stabilize performance compared with the fourth quarter of last year, gradually improvingprofitability in step with the continuously rising price of major products since the end of the firstquarter. During the reporting period, return on investment was significantly reduced in comparisonwith that of the previous year due to the impact of project exit and revenue recognition. In terms ofnew energy photovoltaic and semiconductor materials business, the Company continues to cement itsleadership positioning through advantages in products and technologies, registering rapid growth inrevenue and performance.

Semiconductor display business

During the first quarter, the semiconductor industry, as a whole, experienced seasonal lows, butthe supply-demand relationship tended to be sound, with the price of mainstream panels rebounding.

Emphasizing cost efficiency in its operations, the Company continued to optimize its business andproduct structure, driving the operational improvement of semiconductor display business, andexpedited the strategic shift from large-sized displays to full-sized displays. During the reportingperiod, the Company’s semiconductor display business realized revenue of RMB15.12 billion,recording a year-on-year decline of 24.5%; TCL CSOT sold 11,323,000 sq.m of display panels, up

0.7% year-on-year.

In the field of large-sized displays, TCL CSOT sustained its premium products strategy toconsolidate its leading position in TV panels. By market share, the Company secured its top 2 positionin TV panels, of which it ranked No.1 in both 55-inch and 75-inch products, and top 2 in 65-inchproducts, while being a top-tier player in commercial displays. The Company consistently took thelead in trends related to large-sized displays in the industry, and more than 45% of the shipment areaof TV products are above 65-inch. The Company has enhanced the competitiveness of its mid-sizedproducts, and delivered products to IT brands through its t9 production line; during the reportingperiod, the Company ranked No.1 in MNT e-sports displays and No.2 in LTPS tablets and LTPSlaptops by global market share, while maintaining the rapid development of vehicle-mounted devicebusiness. In terms of small-sized products, TCL COST focused on differential technologies andpushed ahead with product structure upgrading. The Company jumped to the second place amongLTPS mobile phones by global market share, supplying flexible LTPO OLED products for a numberof high-end models launched by various brands.With a surging global digital economy, the Company is optimistic about the development andindustrial value of semiconductor displays as the key information carrier and major interactiveinterface. The Matthew effect has further optimized the industry, top-tier enterprises have constantlyenhanced their economies of scale, laying a solid foundation for future long-term and healthydevelopment. Along with the steady price rebound of mainstream products, led by TV panels, theindustry mid-range ROE is expected to be restored, and the Company’s semiconductor displaybusiness will also gradually experience operational improvements.

New energy photovoltaic and semiconductor materials businessIn the first quarter, the photovoltaic industry increasingly improved its upstream materials supply.The Company’s large-sized silicon wafers were in short supply, catalyzing the high-speed

development of new energy photovoltaic materials. During the reporting period, TCL Zhonghuanrecorded revenue of RMB17.62 billion, represented an increase of 31.8% year-on-year, and net profitof RMB2.46 billion, up 69.2% year-on-year.TCL Zhonghuan seized the initiative for future development, fortified its competitive advantagethrough its "G12 + Shingled PV" dual technology platform, and increased its capacity for advancedmanufacturing with a stabilized and strengthened supply chain, continuously improved its productcompetitiveness as well as the scale of production and sales. At the end of the reporting period, theCompany's total monocrystalline silicon capacity was up to 150GW, with the production utilizationrate climbing sharply month-over-month. The Company consolidated its leading position in theglobal market share of photovoltaic silicon wafers and N-type wafers, and consistently developedlarge-sized, flake-oriented and N-type technologies for photovoltaic materials. Using metrics such asconsumption rate of silicone materials per crystalline unit, monthly output per furnace, wafer outputper kg and other indicators, the Company has managed to maintain an industry leadership positionwith the remarkable cost and market advantages of G12 strategic products. Upholding the concept ofdifferentiated development, the Company has built an intelligent plant for 25GW N-type TOPCONbatteries, working to integrate the advanced technologies of photovoltaic materials, imbricationcomponents and N-type TOPCON batteries, so as to enhance synergistic effects along the industrialchain and strengthen the comprehensive competitiveness of new energy photovoltaic business.With the aim of cementing a leadership position in new energy photovoltaic products, theCompany will continue to focus on the development of photovoltaic materials, building adifferentiated business ecosystem for batteries and components, and deepen the industry 4.0 systemand the application of flexible manufacturing.

Looking ahead to the year, the Company’s semiconductor display business is expected to seeimproved operational performance aided by balanced supply and demand throughout the industry.Driven by the high-speed development of the industry and TCL Zhonghuan’s competitive edges, thenew energy photovoltaic business will maintain its high-quality development, making contributionsto the steady growth of the Company. Through both internal development and M&As of thesemiconductor materials business, the Company will develop into a leader in semiconductor siliconwafer production within China.With a focus on a wide range of semiconductor businesses, including semiconductor displays,

new energy photovoltaic and semiconductor materials, the Company will continue to seizeopportunities arising from the technical and manufacturing transformation of China and global energyrestructuring, so as to build its core competitive strength based on product and technology innovation,giving full play to the advantages of lean management and economies of scale, leading to itsaccelerated development into a leading international tech industry group.

Section IV Shareholder InformationI. Table of the total number of ordinary shareholders and the number of preferred shareholders withresumed voting rights as well as the shareholdings of the top 10 shareholders

Unit: Share

II. Total number of preferred shareholders and shareholdings of the top 10 preferred shareholders

□ Applicable ?Not applicable

Section V Other Significant Events?Applicable □ Not applicable

1. Derivative investment for hedging purposes during the reporting period

Unit: RMB'0,000

2. Other material matters during the reporting period

Section VI Quarterly Financial Statements

I. Financial statements

1. Consolidated Balance Sheet

Prepared by: TCL Technology Group Corporation

Unit: RMB

2. Consolidated Income Statement

Unit: RMB

3. Consolidated Cash Flow Statement

Unit: RMB

II. Auditor’s report

Whether the First Quarter Report has been audited or not?

□ Yes ? No

TCL Technology Group Corporation

Board of Directors

April 27, 2023