TCL: Net profit in the first three quarters exceeded 9 billion yuan, an increase of more than 340% year-on-year

On October 14, TCL released its performance forecast for the first three quarters of 2021, expecting to achieve a net profit attributable to shareholders of RMB 9.03 billion to RMB 9.18 billion in the first three quarters, a year-on-year increase of 346% to 353%; it is expected to achieve a net profit attributable to shareholders of RMB 2.25 billion to RMB 2.4 billion in the third quarter, a year-on-year increase of 175% to 194%.

According to TCL, during the reporting period, the main factors affecting the company's operations and performance were:

(I) The semiconductor display industry is more prosperous than the same period last year. Benefiting from the continuous growth of production capacity and the optimization of business and product structure, the semiconductor display business achieved a year-on-year growth of more than 30% in shipment area in the first three quarters, and a year-on-year growth of about 16 times in net profit.

In the large-size business area, affected by logistics and demand disturbances in some regions of the world, the prices of major products fell back from the highs in the third quarter. In addition, due to the impact of upstream supply chain fluctuations, the quarterly profit of the large-size business decreased on a quarter-on-quarter basis. However, the company actively promoted the optimization of product structure such as high-end TVs and commercial displays, and the stability of performance was significantly improved. Net profit in the third quarter increased by about 4 times year-on-year.

In the mid-size business area, the company's market share in e-sports MNT, LTPS laptops, LTPS tablets and automotive markets has increased rapidly, and its performance has continued to grow.

In the small-size business area, the company's T3 line operations have gradually improved, and the T4 line has actively established differentiated competitive advantages such as flexible folding and under-screen cameras. Affected by the early R&D investment and the accelerated ramp-up of production lines, the T4 loss increased on a month-on-month basis.

Looking ahead, the total demand area of ​​the global regional market will maintain a stable annual growth, the industry competition pattern will be optimized, and the trend of weakening volatility in the industry cycle will remain unchanged. The company will accelerate the improvement of the small and medium-sized business layout, continue to optimize the product and customer structure, enhance efficiency and benefit advantages, and raise the performance center in cyclical fluctuations.

(II) Zhonghuan Semiconductor's revenue and profits continued to grow rapidly, becoming the second engine of the company's performance growth. Zhonghuan Semiconductor has continuously improved the monthly output of crystal single furnaces, reduced silicon consumption per unit product, increased the A-grade rate of silicon wafers, and improved output efficiency through continuous technological innovation. The scale of G12 products has been accelerated, and the product structure has been smoothly transformed. The profit of the semiconductor photovoltaic materials business has increased significantly. The semiconductor materials business has released effective production capacity by accelerating the commissioning of new production lines, further increasing the scale of semiconductor material production and sales, and the 8-12 inch large silicon wafer project has progressed smoothly.

(III) In order to comply with the national industrial orientation, focus on the main business of science and technology, and meet the needs of the company's announced financing projects, the company disposed of the equity of Fantasia Properties in the third quarter. The one-time impact caused a sharp decline in the performance of the company's investment business segment in the third quarter both year-on-year and quarter-on-quarter. The other businesses of the industrial finance and investment business segment are operating well, and the company is confident that this business segment will achieve stable profit contribution throughout 2021. In the face of challenges and opportunities, the company continues to follow the spirit of "uphill, catch up and surpass, and lead the world" and the company's strategic planning requirements, adhere to the business strategy of "improving the quality and efficiency of operations, strengthening strengths, making up for weaknesses, accelerating global layout, and innovation-driven development", and promote the two core industries of semiconductor display, semiconductor photovoltaics and semiconductor materials to become global leaders.