TCL科技：2024年第三季度报告(英文版)

Stock Code: 000100 Stock Abbr.: TCL TECH. Announcement No.: 2024-080

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

Third Quarter 2024 Report

October 2024

Content

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

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

Section III Management Discussion and Analysis ...... 8

Section IV Shareholder Information ...... 12

Section V Other Significant Events ...... 15

Section VI Quarterly Financial Statements ...... 16

Section I Important Notices and Definitions

The Board of Directors (or the "Board"), the Supervisory Committee as wellas the directors, supervisors and senior management of TCL Technology GroupCorporation (hereinafter referred to as the "Company") hereby guarantee thatthis quarterly report is factual, accurate, and complete, and shall be jointly andseverally liable for any misrepresentations, misleading statements, or materialomissions therein.

Mr. Li Dongsheng, the person-in-charge of the Company, Ms. Li Jian, theperson-in-charge of financial affairs (Chief Financial Officer), and Ms. JingChunmei, the person-in-charge of the financial department, hereby guaranteethat the financial statements in this Report are factual, accurate, and complete.

All of the Company’s directors attended the Board meeting for the review ofthis Third Quarter 2024 Report.

The future plans, development strategies, or other forward-lookingstatements mentioned in this Report shall NOT be considered as promises of theCompany to investors. Therefore, investors are kindly reminded to pay attentionto possible investment risks.

This Report has not been audited. This Report has been prepared in bothChinese and English. Should there be any discrepancies or misunderstandingsbetween the two versions, the Chinese version shall prevail.

Definitions

Section II Key Financial Information(I) Key accounting data and financial indicatorsIndicate whether there is any retrospectively adjusted or restated datum in the table below

□ Yes ?No

(II) Non-recurring profit and loss items and amount?Applicable □ Not applicable

Unit: RMB

Note: According to the relevant provisions of the Explanatory Announcement No. 1 on Information Disclosure for Companies OfferingTheir Securities to the Public—Non-Recurring Gain/Loss (Revised in 2023), public grants closely related to the Company’s normalbusiness operations, in compliance with national policies, received according to determined criteria, and with a continuous impact onthe Company’s profits and losses shall be presented as recurring profits and losses. Public grants presented as non-recurring profits orlosses in the third quarter of 2023 comprise the public grants related to assets amounting to RMB 287.77 million, which should beclassified as recurring profits or losses in accordance with the relevant provisions of the 2023 Explanatory Announcement No. 1. Thechange did not have any material impact on the Company's financial position and operation results.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.Notes on non-recurring profit and loss items that are listed in the Explanatory Announcement No. 1 on Information Disclosure forCompanies Offering Their Securities to the Public—Non-Recurring Gain/Loss shall be used to define 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 andloss items.

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

Unit: RMB

Section III Management Discussion and Analysis

Since this year, we witnessed increasing complexity and volatility in world politics, withescalating geopolitical tensions, and continuously restructuring international trade relations, while theglobal economy exacerbated the uncertainty with repeat measures to counter inflation seen worldwide.In response to these challenges, the Company focused on the development of displays and new energyphotovoltaics, and enhanced the resilience of its business and optimized its competitive edge inpursuit of high-quality sustainable development. In the first three quarters, the Company reported anoperating revenue of RMB 123.028 billion, and the net profit attributable to shareholders of the listedcompany of RMB 1.525 billion.

During the Reporting Period, the display industry experienced a period of supply-end stability,characterized by growing demand for larger-sized products. This healthy supply-demand dynamiccontributed to improved year-on-year profitability, particularly for mainstay products like televisionpanels. During the Reporting Period, the Company's display business took a proactive stance inoptimizing both business strategies and structure, with an operating revenue of RMB 76.956 billion,up by 25.74% year-on-year; a net profit of RMB 4.443 billion, representing a year-on-year increaseof RBM6.067 billion. Despite the ongoing growth of global demand for photovoltaic installations,the overall industry faced operating challenges due to a concentrated release of capacity, which hasresulted in a widening supply-demand gap and a significant decline in product prices compared to theprevious year. TZE maintained positive operating cash flow and a relentless focus on cost efficiency,while accelerating organizational changes to address industry challenges. TZE generated RMB

22.582 billion of operating revenue in the first three quarters, and resulted in TCL Technology's netprofits attributable to the parent company decreased by RMB 1.813 billion.Display Business

Despite the global economic slowdown and subdued consumer demand, which dampeneddemand for large-sized panels in the first three quarters of 2024, the industry's competitive landscapeimproved, and the on-demand production trend laid a solid foundation for the healthy developmentof the industry. Seasonal fluctuations in downstream inventory demand led to a moderate increase inTV panel prices in the first half of the year, followed by a dip in the third quarter and the price hasremained stable since then. The structural price hike and subsequent fluctuations in a narrow range

in small and medium-sized panel products were driven by innovations in hardware products and theneed for replacements.

By leveraging its strengths in terms of scale and efficiency, TCL CSOT consistently optimizedits business and product mix with favorable price increases for key products compared to the sameperiod from last year, and significantly boosted operating performance year on year. During theReporting Period, the display business achieved an operating revenue of RMB 76.956 billion, with ayear-on-year increase of 25.74%, and a net profit of RMB 4.443 billion, with a year-on-yearincrease of RMB 6.067 billion; and net cash flows from operating activities of RMB 19.838billion.In the large-sized products segment, TCL CSOT, on the basis of on-demand production, waswell-poised to lead the upgraded and high-end large-sized TV panels, impelling the healthy and sounddevelopment of the industry. During the Reporting Period, the Company solidified its position as theworld's second-largest TV panel supplier, leading the global market in both 65-inch and 75-inchsegments. The share of 65-inch and larger products in total TV panel shipment area reached 55%,while the Company vigorously develop large commercial displays such as interactive whiteboardsand splicing screens. In the mid-size segment, the Company significantly increased its market sharesin IT and vehicle-mounted products with the product development of t9 production line as scheduledand customer acquisition efforts. At present, the Company is the world's second largest monitorsupplier, and holds the top spot in the global gaming monitor market. Furthermore, the Company hassuccessfully secured partnerships with several leading international laptop manufacturers andachieved SoP. In the small-size segment, the Company is focused on capturing an incremental shareof the mid-to-high-end consumer electronics market. During the Reporting Period, the Companycemented its position as the world's second largest supplier of LTPS smartphone panels to brandcustomers. Meanwhile, shipments of flexible OLED mobile phone panels experienced steady growth,with an increased proportion of high-end products.During the Reporting Period, the Company's Board of Directors approved the strategicacquisition of an 80% stake in LG Display (China) Co., Ltd. and a 100% stake in LG Display(Guangzhou) Co., Ltd. by TCL CSOT. This move is expected to enhance the Company's technologyportfolio in display production lines, strengthen partnerships with global customers, and driveprofitability.

Looking at the longer term, global display terminal sales are expected to remain stable. The sizegrowth trend of large-sized products will drive the robust growth of display areas. The improvingsupply-side structure will push the industry to pivot back on reasonable commercial returns, and thedisplay industry's cyclical fluctuation will gradually weaken. TCL CSOT will continue to develophealthily and stably, while enhancing both corporate profitability and value.

New energy photovoltaics and other silicon materials business

Since 2024, the installed capacity of global PV at the user end has been on an upward trajectory.However, the supply-demand imbalance and intensified competition in the photovoltaic industry haveled to a sustained decline in product prices, eroding profitability and pushing industry players intonegative cash margins. At the end of August, a trend had been shown featuring a stable pricethroughout the supply chain, and the industry is poised to bottom out with continued consolidationand elimination of outdated capacity. During the Reporting Period, TZE achieved an operatingrevenue of RMB 22.582 billion, a year-on-year decrease of 53.6%, net profits negative RMB 6.478million, and net cash flows from operating activities of RMB 2.562 billion due to falling prices formajor products across the industry chain as well as substantial setbacks in both financial performanceand stock prices of Maxeon, with its controlling interests held by TZE.

To navigate the tough industry environment, the Company focused on extreme cost efficiency,built a robust Industry 4.0 foundation, and executed a global strategy, with the aim to promote asustainable industry ecosystem characterized by healthy competition. By leveraging technologicalinnovation and lean manufacturing, the Company established a competitive edge with ongoing effortsto optimize silicon material utilization, reduce furnace costs, increase wafer output per kilogram, andproactively address cyclical swings in the market during the Reporting Period, which drove theindustry’s transition to N-type and larger-sized products. At the end of the Reporting Period, thecompany’s N-type products monthly output per unit was approximately 505kg higher than theindustry runner-up. Additionally, the company’s wafer yield per kilogram surpassed that of thesecond best in the industry by approximately 1 piece. During the Reporting Period, the Company’smonocrystalline silicon production capacity for photovoltaic segment rose to 190GW. Shipments ofphotovoltaic materials amounted to approximately 94.86GW, reflecting an 11.4% year-on-yearincrease. The Company ranked first in the industry with a 19.2% market share for silicon wafers. By

upgrading Industry 4.0 manufacturing processes, the Company established flexible and synergisticpartnerships with its supply chain. The high traceability of our products enhanced customer loyaltyand global competitiveness. In collaboration with RELC fully owned by Saudi Arabia’s PublicInvestment Fund (PIF), and Vision Industries, the Company built the world’s largest overseas crystalwafer plant to bolster its global competitiveness.

Amid cyclical bottom in the industry, the Company actively pushed ahead with its organizationalrestructuring, business changes, and management optimization to bolster its competitive position.Looking ahead, the supply-side adjustments have positioned the industry for high-quality growth, butthe global photovoltaic industry is expected to keep intense competition in the near term. In responseto operational challenges, TZE took rational measures by adjusting its production and sales structure,ensured positive cash flow, and strove for the highest level of cost efficiency, so as to strengthen itscompetitiveness. The global renewable energy market presents ample growth opportunities, yet thedistribution of production capacity worldwide remains uneven. The Company’s management teambelieves that the principle of "survival of the fittest” within the photovoltaic industry would contributeto a more optimized long-term industry landscape, enhance profitability, and has confidence that itcan leverage the industry bottom so as to build a lasting competitive advantage.

Looking at the future, the display industry is expected to experience further consolidation underthe Matthew effect as large-scale manufacturers continue to cement their dominant positions. In themeanwhile, the emerging trends such as. the growing demand for larger displays and AI applicationswill drive new growth opportunities, ultimately enhancing industry profitability. The photovoltaicindustry is still poised for significant growth globally. The Company's new energy photovoltaicbusiness will strengthen its operational resilience and competitive edge to navigate through industrycycles. By upholding the spirit of "Venturing Midstream and Striving to Win", the Company willfirmly grasp the opportunities brought by transformations in the technology manufacturing industryand the global energy structure, and continue to implement the business strategies of "improvingoperational quality and efficiency, enhancing strengths to shore up weaknesses, innovation-drivendevelopment as well as accelerating global expansion" in order to achieve sustainable, high-qualitydevelopment and take on a leading role in the global market.

Section IV Shareholder Information(I) 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

Participation of shareholders holding more than 5%, top 10 shareholders, and top 10 non-restricted shareholders in the lending of sharesunder the refinancing business?Applicable □ Not applicable

Unit: share

Change in top 10 shareholders and top 10 non-restricted shareholders due to securities lending/returning under refinancing as comparedto the previous period

□Applicable ? Not applicable

(II) Total number of preferred shareholders and shareholdings of the top 10 preferred shareholders

□Applicable ? Not applicable

Section V Other Significant Events

1. Derivative investments for hedging purposes made during the Reporting Period

Unit: RMB'0,000

2. Other significant events during the Reporting Period

□Applicable ? Not applicable

Section VI Quarterly Financial Statements(I) Financial statements

1. Consolidated Balance Sheet

Prepared by: TCL Technology Group Corporation

Unit: RMB

2. Consolidated Income Statement for the period from the beginning of the year to the end of the ReportingPeriod

Unit: RMB

3. Consolidated Statement of Cash Flows for the period from the beginning of the year to the end of theReporting Period

Unit: RMB

(II) Adjustments to financial statement items at the beginning of the year of the firstimplementation of the new accounting standards which have been implemented since 2024

□Applicable ? Not applicable

(III) Auditor's ReportWhether the Third Quarter Report has been audited or not?

□ Yes ?No

The Company's Third Quarter Report has not yet been audited.

TCL Technology Group Corporation

October 29, 2024