On October 29, TCL Corporation (000100.SZ) released its performance report for Q3 of 2009, in which the company’s sales revenue reached RMB 12.768 billion, increasing of 26.16% and 34.26% compared to the same period of last year and last quarter respectively. The company achieved net earnings of RMB 54.49 million, a figure which settled at RMB 37.40 million after deduction of non-recurring gains and losses: a substantial increase of 169.08% compared to the same period of last year. From January to September, TCL Corporation achieved total sales revenue of RMB 29.846 billion, up 5.35% compared to the same period of last year, with net earnings of RMB 153 million, up 36.07% compared to the same period of last year (excluding the adjustment of yield from transfer price of low-voltage electrical apparatus business).

TCL Corporation stated that in Q3 of 2009, benefiting from the improvement in overall operating efficiency, as well as significant promotion of core competitiveness in its main business and improvement of the economic environment, the company's performance continued to experience solid growth with both domestic and overseas markets showing rapid increases in momentum.

In specific businesses, operating profit of TCL Multimedia increased substantially. In Q3 of 2009, it achieved profit of HKD 86.81 million, and accumulated profit of HKD 230 million from January to September, a significant increase compared to the same period of last year. In the first three quarters, TCL LCD TV sales maintained rapid growth with total sales of 5.53 million units, up 105.2% compared to the same period of last year; of which sales of LCD TV sets in the third quarter totaled 2.597 million, up 121% compared to the same period of last year. Driven by increased consumption, the “Home Appliances to the Countryside” and "trade-in" schemes like old-for-new subsidies, and other policies favorable to the consumer, the company’s LCD TV sales in the Chinese market continued to climb; sales in the third quarter rose 323.4%, compared to the same period of last year, reaching 1.393 million units, up 67.8% compared to last quarter. Overseas markets also maintained strong growth. From January to September, LCD TV sales totaled 2.543 million units, up 33.3% compared to the same period of last year, of which Q3 sales rose 42.3% to 1.204 million units.

TCL Communication significantly improved its performance in Q3 of 2009, returning HKD 13.89 million in profit; the company's sales of mobile phones and accessories reached 4.24 million units, up 20% compared to the same period of last year, and up 51% compared to last quarter; of which overseas sales returned a high 3.49 million units, up 20% and 61% compared to the same period of last year and last quarter respectively, having recovered to pre-financial crisis levels, indicating that the company has significantly increased its operating efficiency post-reorganization. TCL Communication said that with the global economy continuing to improve, sales of mobile phones and accessories will continue to sustain steady growth in Q4. The company will unswervingly implement the "3G + 4C" strategy, actively strengthen product R&D, and reinforce in-depth cooperation with major operators in order to introduce more competitive and innovative products and provide consumers with more high-quality services.

It is understood that, under the premise of maintaining steady development of its main business, TCL Corporation has begun cultivating new business growth points; that is, entering the circular economy and medical electronics industries. Considering TCL Corporation’s working out of a clear development strategy, Home appliances industry observers reckon that achieving a horizontal diversified breakthrough by relying on its inherent technological advantage to extend into new businesses will probably become one of the stable earnings growth points for the company in the future.

On the same day, the company issued a public notice: As its subsidiary, Techne Electronics has the industrial characteristics of numerous businesses, complex process and low gross margin in the basic parts business – in which the unit is currently engaged – the management team plays an important role in implementing refined management and enhancing operational efficiency. The unit is more suitable to being operated by a joint-equity enterprise with a more detailed and simpler decision-making mechanism and operating system. In order to enhance the company's competitiveness and gross margin level in the basic parts business, as well making the company more focused on investing in the key parts industry, the company decided upon a partial transfer of Techne Electronics shares to its key senior management and mainstay staff, in order to introduce a management and employee stock ownership plan, achieve diversification of ownership structure, and establish a good incentive mechanism and management structure; thus, better supporting the development of Techne Electronics. This is an effective attempt to increase vigor in the parts business, accelerate business growth and enhance the Corporation’s return on capital.

Industry analysts said that after enduring the hardships of the financial crisis, TCL Corporation has grown in both maturity and stability. From the Q3 report released by TCL today, the company’s operating status meets the general idea of "consolidating foundation, achieving in adversity and pursuing steady development". The company’s performance growth is going stable. In particular, TCL Multimedia’s overseas market and TCL Communication have achieved quarterly earnings, which is of great encouragement to TCL Corporation. In early 2009, the company launched a series of reforms and innovation initiatives that are more pragmatic and effective; lean management and product structure optimization and upgrading are in full swing across all areas of business. These initiatives have significantly enhanced the core competencies of TCL Corporation’s main business and driven the promotion of overall operating efficiency and vast improvement of various financial indicators. The third-quarter data shows that during the reporting period, the company’s asset-liability ratio, consolidated gross profit margin, and consolidated expense ratio, all improved, turnover of receivables accelerated and efficiency in inventory turnover improved significantly, indicating the company’s level of corporate governance and decision-making is upgrading continuously. TCL Corporation said that with overseas markets gradually warming, its decade-long international expansion has begun to show positive effects, a result of which will surely be an expansion of global market share.