TCL科技:2020年半年度报告(英文版)

TCL Technology Group Corporation                    Interim Report 2020




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




                  INTERIM REPORT 2020
                                   29 August 2020




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     TCL Technology Group Corporation                                                                                  Interim Report 2020




                                                    Table of Contents

Part I Important Notes, Table of Contents and Definitions ........................................................... 7

Part II Corporate Information and Key Financial Information ................................................. 10

Part III Business Summary ............................................................................................................. 14

Part IV Management Discussion and Analysis ............................................................................. 20

Part V Significant Events ................................................................................................................ 42

Part VI Share Changes and Shareholder Information ................................................................. 60

Part VII Directors, Supervisors and Senior Manage ment ........................................................... 67

Part VIII Corporate Bonds ............................................................................................................. 68

Part IX Financial Statements .......................................................................................................... 78

Part X Other Information Submitted .......................................................................................... 145




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                                       Ramp up, Catch up

                           and Go all out to be A Global Leader
                                         Chairman’s Message



Dear shareholders, customers and partners,

In the first half of 2020, the global political and economic landscape constantly underwent major
changes. Affected by the global COVID-19 epidemic, China’s economic development faced greater
challenges and risks. Enterprises were also inevitably affected, which would accelerate industrial
transformation, upgrading and restructuring. To address the challenges, the government introduced
the policy that “domestic economic cycle plays a leading role while international economic cycle
remains its extension and supplement”, and strengthened economic vitality by tax reduction and
liquidity management. Meanwhile, it vigorously supported industrial development, expedited the
improvement of key technology, and enhanced the competitiveness of the manufacturing industry.
All of these were conducive to the business development of the Group.

Seeking opportunities from the crisis, the Company kept transforming and innovating. It achieved
revenue growth in all the sectors by maximizing cost efficiency as well as improving quality and
profitability. In the first half of 2020, TCL Tech. recorded revenue of RMB29.33 billion, up by 12.3%
year-on-year on the same basis, and a net profit attributable to the listed company’s shareholders of
RMB1.21 billion, down by 42.3% year-on-year. Excluding the effect of the gain from the spin-off,
the net profit attributable to the listed company’s shareholders increased by 7.6% year -on-year on
the same basis.

The semi-conductor display business is still at the bottom of the cycle. Although it has stabilized
and recovered, the prices of main products in the current period are still lower than those in the
same period of last year. TCL CSOT exerted its superb management capabilities by constantly
optimizing its products and customer structures. As a result, the large-size panel business achieved
profit, while the small- and medium-size panel business improved significantly. In the first half of
2020, TCL CSOT reported a revenue of RMB19.51 billion (up by 19.9% year-on-year), a deficit of
RMB133 million, and a net profit attributable to the parent company of RMB24 million.

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Specifically, the net profit in the second quarter increased by RMB215 million from the first quarter.
The supply and demand would gradually balance as the market recovers, resulting in a rebound of
semi-conductor display industry. In the third quarter, prices of products are expected to rise at a
faster pace. Profitability of TCL CSOT in the second half of the year will continue to improve.

With technological innovation as the driving force, the Company has a further investment in the
display technology of intelligent and digital manufacturing to develop strategically integrated
technologies and products, aiming at establishing a leading layout of next-generation display
technologies, materials and processes. During the Reporting Period, the Company invested
RMB2.88 billion in R&D, up by 28.9% year-on-year on the same basis. It established a joint
laboratory with San’an Optoelectronics to research a process solution for the mass production of
Micro-LED displays. It also acquired a strategic stake in JOLED Inc. of Japan to jointly promote
the industrial production of large-size inkjet-printing OLED displays. The PCT applications of the
Company increased by 838 and the accumulated PCT applications reached 12,113.

Given the competitive advantages of TCL CSOT, the Group will seize opportunities to further
expand and develop itself through mergers and acquisitions, so as to secure its global leadership in
the semi-conductor display business.

The industrial finance business of TCL developed steadily. It fulfilled the funding needs of the
Company’s key projects at a low cost, actively managed the industrial liquidity and global currency
risks, and gradually built its capacity of global asset allocation. TCL Capital proactively made
arrangements regarding new materials and technologies, established an ecological chain, and
fostered new industries. Meanwhile, it acted a role in the sustainable and healthy development of
the Company by achieving a favourable investment return.

To develop new driving forces for the long-term growth, the Company entered new markets in the
capital- and technology-intensive strategic industries by taking its advantages of technology,
management and capital. The Company acquired 100% equity of Tianjin Zhonghuan Electronics
Group Co., Ltd., whose main asset was the controlling stake in “Tianjin Zhonghuan Semiconductor
Co., Ltd.” (stock code: 002129.SZ). The core business of “Zhonghuan Semiconductor” was
semi-conductor silicon-wafer & photovoltaic silicon-wafer and its modules. The Company believes
that the enterprise has a promising future with great potentials to lead the globe in the
                                                                                                        4
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semi-conductor and photovoltaic business. As the core and basic component of integrated circuits,
the semi-conductor silicon-wafer is in line with China’s integrated circuit development strategy. The
management and operation of Zhonghuan Electronics is similar to that of the Company, so the two
can fully coordinate with and empower each other in terms of industrial chain, globalization as well
as management systems, thus accelerating their respective business development. The acquisition
also included a controlling stake in “Tianjin Printronics Circuit Corp.” (stock code: 002134.SZ) and
its other assets, which would inject new momentum into the Company’s growth.

Looking ahead to the second half of 2020, enterprise development has reached another critical
phase along with the breakout of global epidemic, the risk of China-US. trade war and increasing
uncertainties of the world economy. However, we firmly believe that enterprises with competitive
strength can always adjust quickly in every crisis, take the initiative to change, seize opportunities,
and develop new capabilities.

In the second half of 2020, TCL CSOT will continue to promote the expansion of Phase II and
Phase III of t4 plant (G6-OLED) and the construction of t7 plant (G11-LCD), enhance the
competitiveness of the small- and medium-size panel business such as LTPS and flexible OLED,
and develop new display technologies and materials. TCL CSOT will complete the acquisition of 60%
equity of Samsung Electronics Suzhou LCD Co., Ltd. from Samsung Display (TCL CSOT and
Suzhou Industrial Park hold the remaining 10% and 30% equity, respectively) and 100% equity of
Samsung Display Suzhou Co., Ltd. The core business of these two plants are the production of G8.5
TFT-LCD panel (with a production capacity of 120K/month) and modules (with a production
capacity of 3.5M/month), respectively. The acquisition will promote TCL CSOT to further optimize
its industrial layout and product mix as well as the manufacturing and supply chain system, and
enhance the competitiveness of the Company’s large-size display business to achieve
comprehensive leadership in products, technologies, efficiency, manufacturing, and industrial
ecology construction.

The Company will further support and coordinate the semi-conductor and new energy business,
fully release the vitality of internal organizations with mechanisms, and improve its core
capabilities, so as to accomplish various tasks as planned and speed up the implementation of
Zhonghuan Semiconductor’s globalization strategy.

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The industrial finance business of TCL will support the semi-conductor display from various
aspects by constantly optimizing asset allocation. It will also boost the Company’s operational
efficiency and control the global operation risks. Meanwhile, TCL Capital will focus on investment
of industrial chain and other high-tech industries to promote the competitiveness of its industrial
ecology.

The Company has established an optimistic operational budget this year. Despite the short-term
effect brought by COVID-19 epidemic on operational results, the Company still has confidence to
overcome difficulties and challenges to achieve the annual business objectives under great
uncertainty of global economy in the second half of 2020. TCL Tech., in pursuit of the substantive
development, will enhance the core competitiveness of China’s manufacturing industry and
concentrate all resources and efforts to stride toward a global leadership.




                                                                               Li Dongsheng
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        Part I Important Notes, Table of Contents and Definitions

The Board of Directors (or the “Board”), the Supervisory Committee as well as the directors,
supervisors and senior management of TCL Technology Group Corporation (hereinafter
referred to as the “Company”) hereby guarantee the factuality, accuracy and completeness of
the contents of this Report and its summary, and shall be jointly and severally liable for any
misrepresentations, misleading statements or material omissions therein.
All the Company’s directors have attended the Board meeting for the review of this Report
and its summary.
Mr. Li Dongsheng, the Chairman of the Board, Ms. Du Juan, the person-in-charge of
financial affairs (Chief Financial Officer), and Mr. Xi Wenbo, the person-in-charge of the
financial department, hereby guarantee that the financial statements carried in this Report
are factual, accurate and complete.
This Report and its summary have been prepared in both Chinese and English. Should there
be any discrepancies or misunderstandings between the two versions, the Chinese versions
shall prevail.




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      TCL Technology Group Corporation                                                                        Interim Report 2020



                                                      Definitions
                        Term                                                           Definition

The “Company”, the “Group”, “TCL”, “TCL    TCL Technology Group Corporation and its consolidated subsidiaries, except
Tech.” or “we”                                 where the context otherwise requires.

The “Reporting Period”                          The period from 1 January 2020 to 30 June 2020.

                                                  In April 2019, the Company completed the handover of assets in a significant
                                                  spin-off. Therefore, the revenue data of H1 2020 and H1 2019 are not
                                                  comparable as the former does not inc lude the revenue generated by the
The same basis after the spin-off
                                                  spun-off assets in January-March 2020, while the latter comprises the such
                                                  revenue in January-March 2019. Therefore, the revenue data of H1 2020 and H1
                                                  2019 are only comparable on the same basis after the spin-off.

                                                  The significant assets spin-off approved at the 13th meeting of the 6th Board of
The significant assets spin-off or the spin-off   Directors on 7 December and the First Extraordinary General Meeting of 2019
                                                  on 7 January 2019.

TCL CSOT                                          TCL China Star Optoelectronics Technology Co., Ltd.

Zhonghuan Electronics                             Tianjin Zhonghuan Electronics Group Co., Ltd.

Zhonghuan Semiconductor                           Tianjin Zhonghuan Semiconductor Co., Ltd. (stock code: 002129.SZ)

Samsung Display                                   Samsung Display Co., Ltd.

                                                  Highly Information Industry Co., Ltd., a majority-owned subsidiary of the
Highly                                            Company listed on the National Equities Exchange and Quotations (stock code:
                                                  835281)

Guangdong Juhua                                   Guangdong Juhua Printed Display Technology Co., Ltd.

China Ray                                         Guangzhou China Ray Optoelectronic Materials Co., Ltd.

                                                  China Display Optoelectronics Technology Holdings Limited, a majority-owned
CDOT                                              subsidiary of the Company listed on the Stock Exchange of Hong Kong (stock
                                                  code: 00334.HK)

Educational Web                                   TCL Educational Web Ltd.

                                                  Bank of Shanghai Co., Ltd. (stock code: 601229.SH), with the Company
Bank of Shanghai
                                                  holding a 5.58% interest.

                                                  Tianjin 712 Communication & Broadcasting Co., Ltd. (stock code: 603712.SH),
712 Corp.
                                                  with the Company holding a 19.07% interest as its second largest shareholder.

                                                  Fantasia Holdings Group Co., Limited, a listed company on the Stock Exchange
Fantasia                                          of Hong Kong (stock code: 01777.HK), with the Company holding a 20.06%
                                                  interest as its second largest shareholder.

Admiralty Harbour Capital                         Admiralty Harbour Capital Limited

China Innovative                                  China Innovative Capital Management Limited

t1 project                                        The generation 8.5 (or G8.5) TFT-LCD production line of TCL CSOT



                                                                                                                                     8
     TCL Technology Group Corporation                                                           Interim Report 2020


                                        The generation 8.5 (or G8.5) TFT-LCD (including oxide semiconductor)
t2 project
                                        production line of TCL CSOT

t3 project                              The generation 6 (or G6) LTPS-LCD panel production line of TCL CSOT

                                        The generation 6 (or G6) flexible LTPS-AMOLED panel production line of TCL
t4 project
                                        CSOT

t6 project                              The generation 11 (or G11) new TFT-LCD production line of TCL CSOT

                                        The generation 11 (or G11) new ultra-high-definition (UHD) TFT-LCD and
t7 project
                                        AMOLED production line of TCL CSOT




                                                                                                                  9
       TCL Technology Group Corporation                                                                        Interim Report 2020




        Part II Corporate Information and Key Financial Information

I Corporate Information

Stock name                        TCL Tech.                            Stock code                    000100

Changed stock name (if any)       N/A

Place of listing                  Shenzhen Stock Exchange

Company name in Chinese           TCL 科技集团股份有限公司

Abbr. (if any)                    TCL 科技

Company name in English (if
                                  TCL Technology Group Corporation
any)

Abbr. (if any)                    TCL TECH.

Legal representative              Li Dongsheng


II Contact Information

                                                                                          Board Secretary

Name                                                             Liao Qian

                                                                 19/F, Tower B, TCL Building, Gaoxin South First Road,
Office address                                                   Shenzhen High-Tech Industrial Park, Shenzhen, Guangdong
                                                                 Province, China

Tel.                                                             0755-3331 1666

Fax                                                              0755-3331 3819

Email address                                                    ir@tcl.com


III Other Information

1. Contact Information of the Company

No change occurred to the registered address, office address and their zip codes, website address and email address of the Company
in the Reporting Period. The said information can be found in the 2019 Annual Report.


2. Media for Information Disclosure and Place where this Report is Lodged

No change occurred to the newspapers designated by the Company for information disclosure, the website designated by the CSRC
for disclosing the Company’s periodic reports and the place for lodging such reports in the Reporting Period. The said information
can be found in the 2019 Annual Report.




                                                                                                                                10
       TCL Technology Group Corporation                                                                         Interim Report 2020


3. Other information

No change occurred to the other information in the Reporting Period.


IV Key Financial Information

Indicate whether there is any retrospectively restated datum in the table below.

□ Yes ■ No
Serial
                               Item                            H1 2020                  H1 2019                Change (%)
 No.
                             Note
           Revenue (RMB)                                       29,333,210,856           43,781,613,735                    -33.00
   1       Revenue on the same basis after the
                            Note                               29,333,210,856           26,119,468,731                     12.30
           spin-off (RMB)

   2       EBITDA (RMB)                                          6,143,106,318           8,436,689,169                    -27.19

           Net profit attributable to the listed
                                             Note                1,208,065,986           2,092,348,692                    -42.26
           company’s shareholders (RMB)
   3       Net profit attributable to the listed
           company’s shareholders before                          181,862,847             250,467,130                    -27.39
           non-recurring gains and losses (RMB)

           Basic earnings per share (RMB/share)                          0.0932                   0.1569                  -40.60
   4
           Diluted earnings per share (RMB/share)                        0.0893                   0.1544                  -42.16

   5       Weighted average return on equity (%)                            4.11                    7.17                    -3.06

           Net cash generated from/used in
                                                                 7,347,810,779           6,150,821,822                     19.46
           operating activities (RMB)
   6
           Net cash per share generated from/used
                                                                         0.5431                   0.4539                    19.65
           in operating activities (RMB/share)

                                                             30 June 2020          31 December 2019            Change (%)

   7       Total assets (RMB)                                 184,833,234,677          164,844,884,926                     12.13

           Total owners’ equity (RMB)                         64,891,825,753           63,883,145,340                       1.58
   8       Owners’ equity attributable to the listed
                                                               30,027,342,791           30,111,946,237                      -0.28
           company’s shareholders (RMB)

   9       Share capital (share)                               13,528,438,719           13,528,438,719                       0.00

           Equity per share attributable to the listed
  10                                                                     2.2196                   2.2258                    -0.28
           company’s shareholders (RMB/share)

Note: In April 2019, the Company completed the handover of assets in a significant spin-off. Therefore, the H1 2019 data included
the results of the spun-off assets for January-March 2019 and a gain of RMB1.15 billion from the spin-off. Provided that the H1 2019
data were on the same basis after the spin-off, revenue would be up by 12.3% year-on-year. In 2020, the Company continued to focus
on its core business and maximize shareholder ’s value by spinning off the Educational Web business, which generated a gain of
RMB234 million. Provided that the spin-off gains were excluded from both of the H1 2020 and H1 2019 data, the net profit
attributable to the listed company’s shareholders would be up by 7.6% year-on-year on the same basis.




                                                                                                                                    11
     TCL Technology Group Corporation                                                                   Interim Report 2020


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

Total share capital at the end of the last trading session before
                                                                                                              13,519,279,411
the disclosure of this Report (share)

Fully diluted earnings per share based on the latest total share
                                                                                                                     0.0894
capital above (RMB/share)


V Accounting Data Differences under China’s Accounting Standards for Business Enterprises
(CAS) and International Financial Reporting Standards (IFRS) and Foreign Accounting
Standards

1. Net Profit and Equity under CAS and IFRS

□ Applicable ■ Not applicable
No such differences for the Reporting Period.


2. Net Profit and Equity Differences under CAS and Foreign Accounting Standards

□ Applicable ■ Not applicable
No such differences for the Reporting Period.


3. Reasons for Accounting Data Differences Above

□ Applicable ■ Not applicable


VI Non-Recurring Gains and Losses

                                                                                                                  Unit: RMB

                            Item                                              H1 2020                  Note

Gain or loss on disposal of non-current assets (inclusive of
                                                                                        289,778,280       Not applicable
impairment allowance write-offs)
Government grants through profit or loss (exclusive of
government grants given in the Company’s ordinary
                                                                                        355,097,992       Not applicable
course of business at fixed quotas or amounts as per the
government’s uniform standards)
Gain equal to the amount by which investment costs for
the Company to obtain subsidiaries, associates and joint
ventures are lower than the Company’s enjoyable fair                                   280,758,994       Not applicable
value of identifiable net assets of investees when making
investments

Spin-off costs in staff arrangement, integration, etc.                                             -      Not applicable

Gain or loss on fair-value changes in held-for-trading
financial assets and liabilities & return on investment                                  40,067,037       Not applicable
from disposal of held-for-trading financial assets and


                                                                                                                           12
        TCL Technology Group Corporation                                                                 Interim Report 2020


liabilities and available-for-sale financial assets (exclusive
of effective portion of hedges that arise in the Company’s
ordinary course of business)

Non-operating income and expense other than the above                       192,303,192                    Not applicable

Other gains and losses that meet the definition of
                                                                                       -                   Not applicable
non-recurring gain/loss

Less: Corporate income tax                                                    78,214,197                   Not applicable

         Non-controlling interests (net of tax)                               53,588,159                   Not applicable

Total                                                                      1,026,203,139                   Not applicable

Explanation of why the Company reclassifies as recurrent a non-recurring gain/loss item defined or listed in the Explanatory
Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the Public —Non-Recurring Gain/Loss
Items:
□ Applicable ■ Not applicable
No such cases for the Reporting Period.




                                                                                                                            13
     TCL Technology Group Corporation                                                                Interim Report 2020




                                      Part III Business Summary

I Principal Activity of the Company in the Reporting Period

During the Reporting Period, the main business structure of TCL Tech. still consisted of the
following three segments: the semi-conductor display and materials business, the industrial finance
& investment business and the other businesses. The Company acquired 100% equity of Tianjin
Zhonghuan Electronics Group Co., Ltd. After the Ownership Transaction, the business structure of

the Company is planned to be adjusted as follows:




For further information about the Company’s businesses, please refer to “Part IV Management

Discussion and Analysis” herein.

II Significant Changes in Major Assets

1. Significant Changes in Major Assets

                       Major assets                             Main reason for significant change

Held-for-trading financial assets               Increase in purchases of wealth management products

Prepayments                                     Increase in prepayments to suppliers

Other receivables                               Increase in security deposit payments

Equity assets                                   No significant change

Investment property                             Transfer from construction in progress

Fixed assets                                    Transfer from construction in progress

Intangible assets                               No significant change


                                                                                                                     14
     TCL Technology Group Corporation                                                            Interim Report 2020


Construction in progress                      Transfer to fixed assets and investment property

Development costs                             Transfer-out upon availability for intended use

Long-term prepaid expense                     Increase in the current period

Other non-current assets                      Increase in prepayments for equipment and land use rights


2. Major Assets Overseas

□ Applicable ■ Not applicable


III Core Competitiveness Analysis

Established in Huizhou in 1981, TCL has been sticking to the industry for nearly 40 years by
keeping innovating, forging ahead and daring to change. Today, TCL has grown into a leading
company with global influence. In early 2019, the Company completed a divestment of the
intelligent terminal and supporting businesses and officially renamed itself as “TCL Tech.”,
positioning as a global leading technology group. At present, the Company has become a global
leader in LCD panels with a rapidly increasing market share.

With a clear strategic development path and promising long-term development potential, the
Company’s leadership in LCD panels is constantly improving

In March 2020, TCL Tech. completed the sale of its online education business, continued to focus
on high-tech, capital-intensive and long-cycle strategic emerging industries, and enhanced its
industrial finance capability. With a clear development path, the Company has witnessed great
improvement in its core competitiveness and sustainable capability. The growth potential of the
Company has been further released. Under the heavy pressure of the epidemic in 2020, the sales
area and revenue of panels have increased with a growth rate significantly higher than that of the
industry and its major competitors.

At present, the industry downturn accelerates the restructuring of competition pattern, and the scale
of production is rapidly centralizing at China's leading companies. The Company took the
opportunity to liquidate inefficient production capacity and actively seek opportunities for mergers
and acquisitions. With the successive release of production capacity, TCL Tech. will be able to
cover all the mainstream sizes of display application, meet the specific technical and specification


                                                                                                                 15
    TCL Technology Group Corporation                                                   Interim Report 2020



requirements of application customers in various industries, further enhance the Company’s
position in the industry, and drive the growth of its operational efficiency and profitability. With an
increasing centralization of panel market, the business cycle of the industry will be shortened
significantly, and the fluctuations of panel price will be greatly reduced, leading to a better
long-term profit outlook.

With e mphasis on both scale and benefit, TCL CSOT maintains a global-leading efficiency

TCL CSOT has grown into a high-tech company driven by technology and management. It
continues to expand in the field of LCD large-screen segmentation with the largest scale growth rate
in the world, while the production of overseas manufacturers keeps declining.

With advantages in market segment scale, TCL CSOT maintains the world’s leading industry
management capability. Its efficiency and benefit indicators continue to lead the industry. Through
organization optimization, procedure simplification, plan innovation and expense management,
TCL CSOT has realized the effective reduction of material costs, manufacturing expenses and
platform expenses.

With the gradual reshuffle of the industry, the industrial pattern is expected to be significantly
optimized. Base on its comprehensive and efficient industrial layout, industry-leading management
capacity and operational efficiency, as well as advantages in specific market segment, TCL CSOT
will steadily enter the stage of high growth, further improve its market share, profitability,
competitive advantages and industry position.

With strong R&D capabilities and a global layout, TCL Tech. is committed to developing
itself into a world-leading technology company

TCL Tech. spared no effort in R&D investment. In the first half of 2020, the Company’s R&D
investment reached RMB2.88 billion, accounting for 9.81% of its revenue. The Company attached
great importance to the reserves and exploration of cutting-edge technologies, making efforts on
major breakthroughs in such aspects as technological layout, product layout, and technological
material layout. In terms of the large-size panel business, TCL CSOT has an intensive process
background, which has realized many milestone achievements in research. The Company’s
large-size HVA products are technologically advanced in high-end machines. In the future, the
                                                                                                       16
    TCL Technology Group Corporation                                                   Interim Report 2020



Company will consolidate such advantages in the high-end market through the promotion of 8K &
Touch technologies, and will keep advancing the mass production of flexible printed QLED/OLED
displays. In terms of the small- and medium-size panel business, TCL CSOT will enter the market
with high-end products. The high-color-saturation CPLP + IEST energy saving + low blue light
technology, which researched and developed independently by TCL CSOT, can improve image
quality and protect human eyes, and has already been supplied to major mobile phone
manufacturers. In addition, the next-generation of fully flexible AMOLED production line has been
mass-produced, leading a broad application prospect of foldable and rollable products.

In the first half of 2020, TCL Tech. submitted 838 PCT applications. Its accumulated applications
reached 12,113, covering different regions such as Europe, the United States, and South Korea.
During the Reporting Period, TCL CSOT submitted 838 PCT applications and its accumulated
applications reached 11,895. As at 30 June 2020, TCL Tech. has applied for 25,700 Chinese patents
and 10,329 U.S. patents. As at 30 June 2020, TCL CSOT has applied for 20,355 Chinese patents
and 10,175 U.S. patents. The Company owns 1,199 public patents in the field of quantum dots,
ranking the 2nd in the world.

The Company is committed to seizing the unprecedented opportunities for industrial adjustment and
reshuffle in the semi-conductor display and materials field by vertical extension and horizontal
integration of the industrial chain. It wil also focus on the ecological layout of such fields as basic
materials, next-generation display materials, and key equipment in new processes with a view to
forming an advantage base on ecological leadership. Through continuous investment, the Company
has been making breakthroughs in the research and development of printed display technologies
and new materials. The "National Printed and Flexible Display Innovation Center" of Guangdong
Juhua, a subsidiary of the Company, is the sole national innovation center in the display field in
China, building into the world's most advanced printing display public platform. The R&D strength
and development progress of China Ray are at the forefront of the industry. The OLED materials of
China Ray has been mass-supplied. The QLED R&D team of the company has solved key problems
(such as lifetime of red and green materials). The performance of the independently developed
blue-light emitting material leads an advanced position, and its relevent research achievements have
been published on the top international scientific journal - Nature Communication.

                                                                                                       17
    TCL Technology Group Corporation                                                   Interim Report 2020



Industrial cluster linkage brings an effective synergy advantage

After the spin-off, the Company held the industrial finance & investment and venture capital
business, mainly comprising TCL Finance and TCL Capital. The sector supported the
semi-conductor display business from various aspects. It reduced financing costs and improved
resource efficiency for the Group. TCL Finance provided financial services for the Company’s main
business and its partners of the industrial chain, ensuring the provision of resources for major
investment projects, and generating revenue by utilizing surplus capital.

TCL Capital will expand the scale of funds and strengthen its financial investment capabilities. It
will invest in artificial intelligence, semi-conductor display technology, new materials, intelligent
manufacturing and other fields to play an active role in building an industrial ecology. The
industrial finance & investment and venture capital business is conducive to the Company’s
industrial chain layout around its core business. The stable profit contribution it brings also helps
offset the influence of the semi-conductor display industrial downturn. Focusing on the main
business, TCL’s investment and venture capital business has realized the coordinated development
of industrial technologies and investment opportunities. It accomplished many successful
investments in such fields as core electronic devices, basic software and high-end general-purpose
chips, including the investments on Cambricon and YEESTOR Microelectronics.

The connotation of “Spirit of Eagle” is enriched and the cultivation of corporate culture is
strengthened

Through the ups and downs for more than 30 years, our company developed the “spirit of eagle”,
which reflects TCL’s core values and competitiveness, as well as cohesion of TCLers. The
connotation of the “Spirit of Eagle” will be re-interpreted in the new era of development and further
motivate all TCLers to forge ahead, embrace changes, challenge conventional ideas, endure
hardship, make progress and continue to thrive. In 2019, the Company upgraded its corporate
culture based on the “Spirit of Eagle”. In 2020, the Company continued to strengthen the
team-building and cultivation of corporate culture by improving the organizational structure and the
collaborative division of labor between the data headquarters and subordinate industries. It achieved
certain results as constantly enhancing the management and work quality of employees at each tier


                                                                                                       18
    TCL Technology Group Corporation                                                 Interim Report 2020



through multiple rounds of in-depth management training. During the epidemic in early 2020, the
quick organization of 600 employees from Shenzhen and Huizhou branches to support Wuhan, the
normal operation of Wuhan CSOT, and the zero infection of 7,000 employees in Wuhan plant, are
all evidences of the further deepening and consolidation of the corporate culture.




                                                                                                     19
    TCL Technology Group Corporation                                                Interim Report 2020




                       Part IV Management Discussion and Analysis

I Overview
International political and economic environment has become more complex and volatile this year.
The COVID-19 epidemic has further aggravated the anti-globalization sentiment, resulting in
increasing obstacles to foreign trade and technological cooperation. The cyclical recovery of the
semi-conductor display sector has been disturbed under the new phase of the global economy. In the
face of such crises, the Company adheres to its solid and steady strategy, which is to build an
emerging high-tech business group with global competitiveness, and concentrates on high-tech
industries by maximizing efficiency.
In the first half of 2020, on the same basis after the spin-off, the Company recorded revenue of
RMB29.33 billion, up by 12.3% year-on-year, and a net profit attributable to the listed company’s
shareholders of RMB1.21 billion, down by 42.3% year-on year. Excluding the gain from the
spin-off, the net profit attributable to the listed company’s shareholders increased by 7.6%
year-on-year on the same basis. Specifically, the net profit attributable to the listed company’s
shareholders was RMB0.8 billion in the second quarter, up by 96% from the first quarter.
During the Reporting Period, the semi-conductor display sector remained at the bottom of the
industrial cycle. Under the negative impact on logistics and work resumption caused by the
epidemic, the Company has maintained a relatively leading advantage in efficiency and benefit
by promoting refined manage ment. TCL CSOT reported a revenue of RMB19.51 billion, up by
19.9% year-on-year; a net loss of RMB133 million, down by RMB1,152 million year-on-year (in
the second quarter, there was an improvement of RMB215 million from the first quarter); and a net
profit attributable to the parent company of RMB24 million. The Company has a further investment
in R&D and intelligent manufacturing, aiming to develop strategically integrated technologies and
products. During the Reporting Period, the Company’s R&D investment reached RMB2.88 billion,
up by 28.9% year-on-year on the same basis. Meanwhile, the industrial finance, venture capital and
other businesses sector recorded a net profit of RMB1.2 billion, stabilizing the Company’s
profitability during the industry downturn. The expansion of the global semi-conductor display
production is coming to the concluding phase, which leads to a reconstruction of the industry. Given
the prices of display pannel in major sizes began to recover in July, the Company would imporove
its performance in the second half of the year.
The Company’s semi-conductor display sector achieved a globally leading scale. During the


                                                                                                    20
    TCL Technology Group Corporation                                                  Interim Report 2020


Reporting Period, the t1, t2, and t6 production lines of TCL CSOT maintained at full capacity and
ranked second globally in terms of the TV panel market share. The market share of 55-inch TV
panel ranked the 1st in the world, while its 65-inch TV panel ranked the 2nd. Although the small-
and medium-size panel plants located in Wuhan, thanks to the well management of supply chain,
the LTPS panel of the t3 production line operated at full capacity, and the high-end, new-form
product of the t4 flexible AMOLED production line was rapidly improved. Cooperation with global
leading brand customers was constantly deepened. Additionally, steady progress was made in t7
project construction.
In the meantime, TCL CSOT seized the opportunity of industrial restructuring to consolidate its
leading position in display panels through internal development and external M&A. With the
release of production capacity of t4 and t7 and the integration of Suzhou Samsung’s production line,
by 2023, the compound annual growth rate of TCL CSOT’s capacity will reach 18.8%. Given the
rapid scale growth and the improvement of industry, TCL CSOT will enter a dual-driven
development stage.
Leading Technology is always the Company’s main driving force. As 5G technology develops,
the demand for large-size, 8K, Touch and other display products grows rapidly. With the promotion
of mobile Internet, requirements for the quality of electronics consumption keeps raising, and the
demand for distance education, online shopping and social entertainment increases. The Company
actively deepened cooperation with strategic suppliers and launched “smart screen”, “wisdom
screen” and other interactive products. Together with the partners of the industrial chain, the
Company promoted high-end display demand such as 8K/120Hz and built an IoT ecology of
multiple scenarios.
During the Reporting Period, the Company focused on the layout of the next-generation
display technologies and ecology. TCL CSOT established a joint laboratory with San’an
Optoelectronics to develop Micro-LED display technology and formed a solution for commercial
production of Micro-LED displays. The Company also invested in JOLED Inc. to accelerate the
application of inkjet printing technology and to lead the construction of a global new display
industrial ecology covering upstream equipment, materials and devices. TCL CSOT will promote
the development of Micro-LED and printed OLED displays and develop the independent
intellectual property rights of the new display technology field from materials, processes,
equipments and production line solutions, so as to lead the future display technologies.
The COVID-19 epidemic not only caused a crisis with considerable difficulties for global public
security, but also increased the uncertainty of the global economy. Looking ahead, we will make
                                                                                                      21
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preparations for the new development pattern of "dual circulation" . As the foundation of the
electronic information industry, semi-conductor and semi-conductor display are strategic industries
related to the overall development of national economy and society. At present, the historic
relocation of global semi-conductor industry has already emerged, speeding up the industrial
restructuring.
With an innovative and disruptive thinking, the Company will keep improving management to grow
into a global leader. The Company will transform and upgrade itself from lean production to
advanced manufacturing that features intelligent and digital production. It will also introduce IPD
and LTC to optimize process and improve the organizational capabilities as well as the talent pool.
The Company will continue to promote the vertical extension and horizontal integration of the
semi-conductor display business. In addition, it will empower China’s semi-conductor and new
energy industries, which are rising at an accelerated pace, with industrial integration experience and
global layout capabilities accumulated over the past 30 years. In high-tech, heavy-assset and
long-cycle fields, the Company will continuously consolidate the foundation to secure a
world-leading position, and constantly accumulate core assets in tech field.


II Core Business Review


During the Reporting Period, the principal business structure of TCL Tech. still consisted of the
following three segments: the semi-conductor display and materials business, the industrial finance
& investment business and the other businesses. The Company acquired 100% equity of Tianjin
Zhonghuan Electronics Group Co., Ltd. After the Ownership transaction, the business structure of

Company is planned to be adjusted as follows:




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(I) Semi-conductor Display and Materials Business
In the first half of 2020, the sudden COVID-19 epidemic hit the semi-conductor display sector
badly. The consumer demand was temporarily suppressed, the cyclical recovery of the
semi-conductor display sector was delayed, and the panel prices fluctuated at the historical bottom.
In the face of the severe external challenges, TCL CSOT adhered to its strategic focus and strove
for survival through maximizing cost efficiency, thus maintaining its industry-leading
operational efficiency and benefit. During the Reporting Period, TCL CSOT recorded product
sales area of 14.2 million square meters, up by 47.9% year-on-year; revenue of RMB19.51 billion,
up by 19.9% year-on-year; and EBITDA of RMB4.63 billion, basically unchanged compared with
the same period of last year. Affected by the historically low prices of display panels and the
one-time expenditure brought about by the upgrade of epidemic prevention and control measures,
TCL CSOT had a deficit of RMB133 million during the Reporting Period. Specifically, the net
profit in the second quarter increased by RMB215 million from the first quarter, and the net profit
of the large-size panel business in the second quarter increased by RMB110 million from the first
quarter. TCL CSOT’s profitability maintained a leading position in the industry.


Scale advantage was further enhanced, and supply chain control and manufacturing
capabilities were improved. The t1, t2, and t6 production lines operated at full capacity for strong
sales, achieving large-size panel sales area of 13.67 million square meters, up by 52.9%
year-on-year, along with revenue of RMB12.16 billion, up by 32.3% year-on-year. In the meantime,
equipment was moved into the t7 production line as planned. It is expected that mass production
will start in early 2021. In Huizhou, the high-generation module factory operated with a monthly
production capacity of more than 4 million pieces, and the Phase II construction of a smart factory
that mainly produces super-large panels of 8K and 80 inches or above was promoted. Mass
production can be expected by the end of 2020.
As for the small- and medium-size panel business, such impact as material shortages and work
resumption delay during the epidemic was overcome, which guaranteed safe production
continuously. The panel section of the t3 production line operated at full capacity, and the
production capacity of the module section returned to normal in the second quarter. Moreover, the
Phase I production capacity and yield rate of the t4 flexible AMOLED production line were
improved as scheduled,       products for brand manufacturers were mass produced and delivered, and


                                                                                                    23
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the construction of Phase II and Phase III was accelerated. The small- and medium-size panel
business recognized sales area of 0.53 million square meters, down by 19% year-on-year; and
revenue of RMB7.35 billion (including CDOT), up by 3.80% year-on-year.


Product and customer structures kept improving, while super-large TV, commercial display
and high-end notebook computer businesses grew rapidly. The G11 production line t6 of TCL
CSOT operated at full capacity, driving the continued rapid growth of the large-size panel business.
The shipping area of 55-inch and larger-size products accounted for more than 70%. Specifically,
the TV panel market share rose to 2nd in the world rankings: the market share of 55-inch panels
ranked the 1st in the world, that of 65-inch panels ranked the 2nd, and that of 75-inch panels also
ranked the 2nd. Commercial display business grew rapidly in the field of high-end gaming monitors
and interactive whiteboards. The shipment of 86-inch interactive whiteboards ranked 2nd in the
world. In the small- and medium-size panel business, the shipment of LTPS smart phone panels
ranked the 3rd in the world; LTPS notebook computer panels were sold to a number of international
brand customers, and the annual shipment was expected to become the world’s 2nd; flexible
AMOLED smart phone panels were stably supplied to brand customers for their flagship products,
and the shipment surged to the 4th place in the world.


With technological innovation as the main driving force, product competitiveness was
continuously enhanced, the layout in the field of new display technologies and materials was
improved, and a technological and ecological leadership advantage was formed. TCL CSOT
constantly consolidated the application advantages of HVA technology in large-size LCD high-end
products, improved the shares of such high-end products as 8K/120Hz, and accelerated the mass
production of MLED product based on Mini-LED on Glass. In the LTPS application field, it
increased the proportion of Incell/COF/blind via product, and strengthened the development of
mass production technology for under-display/in-display fingerprint sensors to products with LCD
screens. For flexible AMOLED displays, the focus was placed on under-display shooting, folding,
LTPO and other special technologies. The yield rate ramp-up of foldable screens and double-curved
perforated screens was successful, and the product performance met the demand of brand
customers.
TCL CSOT attaches great importance to the technological development of the next-generation new
display field. It has been investing in new display technologies such as printed OLED/QLED and


                                                                                                    24
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Micro-LED. During the Reporting Period, TCL CSOT and San’an Semiconductor jointly invested
in the establishment of a laboratory. Focusing on the development of Micro-LED technology, the
two aim to promote the Company’s ecological layout in the field from materials, processes,
equipment and production line solutions to independent intellectual property rights.
Guangdong Juhua subordinate to the Company, as the only “National Printed and Flexible Display
Innovation Center” of the industry, focuses on the basic, key technology development and industrial
applications of printed display processes. China Ray develops new OLED key materials with
independent IP. Optical overlay (CPL) materials have been mass-produced and shipped, and the
performance of red and green light-emitting materials for printed OLED has been greatly improved.
Furthermore, breakthroughs have been made in key problems such as the lifetime of red and green
materials for QLED materials. The number of public patents in quantum dot electroluminescent
field ranks the 2nd in the world. In order to accelerate the industrialization process of printed
display technologies, TCL CSOT acquired a strategic stake in JOLED Inc. Through joint R&D,
patent cooperation, etc., the two will speed up the industrial mass production of printed OLED
displays from all aspects including materials, equipments, processes and products, and will improve
the Company’s ecology construction in the key processes of the printed display industrial chain,
with a view to leading the future technological development trend.


Looking ahead to the second half of 2020, the impact of the epidemic will gradually weaken. With
the approach of the sales season, downstream customers will actively stock up, panel prices will
rebound, and industry operating profit will be improved. In the long run, the trend of steady growth
in demand will remain unchanged, the exit of the industry’s inefficient production capacity will
accelerate, the restructuring and integration of the industry will speed up, and the industr ial
concentration will further increase. The long-term development prospects are bright.
TCL CSOT will grasp the opportunity of industry integration to expand its scale and enrich
its product portfolio; continue to leverage the business synergy advantage, accelerate the
progress of localization, and make breakthroughs in cost reduction. In addition, it will
expedite the developme nt of future-oriented capabilities, promote the IPD/LTC process
system reform, improve digital-related capabilities and intelligent manufacturing quality, and
make its utmost efforts to achieve technology leadership and ecology leadership by improving
efficiency and product mix.




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(II) Industrial Finance and Investment Business
TCL’s industrial finance business mainly includes the Group’s finance and the supply chain finance.
In the first half of 2020, affected by the COVID-19, the finance team focused on the funding needs
of the Group’s key projects, and strengthened the active management of liquidity and currency risk.
The supply chain finance business took full advantage of Internet platform, and jointly with
domestic financial institutions, continuously provided high quality and convenient receivables
financing services for small and medium enterprise partners affected by the epidemic, realizing the
sound development of the industrial ecosystem. In the second half, the industrial finance business
will stick to the service concept of “partner finance”, focus on real industrial needs, highlight the
improvement of user experience, and constantly enrich and deepen service.
TCL Capital seek investment opportunities in key fields of technological industries, including new
display technology, semi-conductor and their relevant industry chain, as well as high end materials
and technological equipments that promote technology and create synergy. At the same time,
investment value was generated. By the end of the Reporting Period, the scale of funds managed by
TCL’s venture capital business reached RMB8,989 million, and it invested in 121 projects
cumulatively. Currently, it holds stocks of CATL, Dynanonic, Willsemi, Cambricon, DKEM, and
other listed companies. Admiralty Harbour Capital obtained No. 6 license from HK SFC
successfully during the Reporting Period and became an investment bank with full licenses. In the
first half of 2020, it completed 9 bonds issuing and underwriting projects and 4 debt management
projects. Its investment banking and asset management business developed healthily. China
Innovative has invested in more than 110 listed companies cumulatively with steady growth in
performance. It invested in mature companies related to the Company’s businesses.

At the end of the Reporting Period, the Company invests in some listed companies directly,
including a 19.07% interest in 712 Corp. (603712.SH), a 5.58% interest in Bank of Shanghai

(601229.SH) and a 20.06% interest in Fantasia Holdings (01777.HK).

III Core Business Analysis

Year-on-year changes in key financial data:
                                                                                                             Unit: RMB
                                                                        Change
                                         H1 2020        H1 2019                         Main reason for change
                                                                         (%)

Revenue                               29,333,210,856   43,781,613,735   -33.00%   The spin-off

Cost of sales                         26,740,893,081   37,357,128,093   -28.42%   The spin-off


                                                                                                                     26
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Selling expense                            324,665,389       2,382,736,337       -86.37%    The spin-off

Administrative expense                     770,003,011       1,266,510,300       -39.20%    The spin-off

R&D expense                             1,882,501,102        1,880,666,523         0.10%    No significant change

Finance costs                              916,022,280         604,713,951        51.48%    Increase in financings

Income tax expense                         164,586,735         282,946,949       -41.83%    The spin-off

R&D investments                         2,878,922,049        2,666,576,851         7.96%    No significant change

Net cash generated from/used in
                                        7,347,810,779        6,150,821,822        19.46%    No significant change
operating activities
Net cash generated from/used in
                                      -17,208,563,956      -21,986,038,288        21.73%    The spin-off
investing activities
Net cash generated from/used in
                                      13,235,850,184         5,464,945,756       142.20%    Increase in financings
financing activities
                                                                                            Increase in net cash generated from
Net increase in cash and cash
                                        3,388,412,372       -9,901,559,172       134.22%    operating activities, increase in
equivalents
                                                                                            financings and the spin-off

Significant changes to the profit structure or sources of the Company in the Reporting Period:
□ Applicable ■ Not applicable

No such changes in the Reporting Period.
Breakdown of operating revenue:
                                                                                                                           Unit: RMB

                                        H1 2020                                       H1 2019

                                                                                                 As % of total         Change (%)
                            Revenue         As % of total revenue          Revenue
                                                                                                   revenue

Total                    29,333,210,856                    100%           43,781,613,735                   100%                 -33.00%

By operating division

Semi-conductor
                         19,512,204,757                   66.52%          16,275,666,954                 37.17%                 19.89%
display business
Distribution
                           9,126,805,527                  31.11%           8,814,033,673                 20.13%                  3.55%
business
Other businesses and
internally offset            694,200,572                   2.37%          18,691,913,108                 42.70%                 -96.29%
accounts

By product category

Semi-conductor
                         19,512,204,757                   66.52%          16,275,666,954                 37.17%                 19.89%
display devices
Distribution of
                           9,126,805,527                  31.11%           8,814,033,673                 20.13%                  3.55%
electronics
Other businesses and
internally offset            694,200,572                   2.37%          18,691,913,108                 42.70%                 -96.29%
accounts


                                                                                                                                    27
     TCL Technology Group Corporation                                                                                          Interim Report 2020


By operating segment

Mainland China            20,814,424,616                        70.96%             23,804,831,122                   54.37%                -12.56%

Overseas (including
                           8,277,832,855                        28.22%             19,559,977,677                   44.68%                -57.68%
Hong Kong)

Others                       240,953,385                         0.82%               416,804,936                      0.95%               -42.19%

Operating division, product category or operating segment contributing over 10% of revenue or operating profit :

                                                                                                                                       Unit: RMB
                                                                          Gross                                                     YoY change in
                                                                                       YoY change in          YoY change in
                                  Revenue           Cost of sales         profit                                                     gross profit
                                                                                         revenue (%)         cost of sales (%)
                                                                         margin                                                      margin (%)

By operating division

Semi-conductor
                            19,512,204,757          17,578,748,152         9.91%                  19.89%                26.99%             -5.04%
display business

Distribution business        9,126,805,527              8,791,575,814      3.67%                  3.55%                  3.47%                 0.07%

By product category

Semi-conductor
                            19,512,204,757          17,578,748,152         9.91%                  19.89%                26.99%             -5.04%
display devices
Distribution of
                             9,126,805,527              8,791,575,814      3.67%                  3.55%                  3.47%                 0.07%
electronics

By operating segment

Mainland China              20,814,424,616          19,272,086,968         7.41%              -12.56%                   -4.74%             -7.61%

Overseas (including
                             8,277,832,855              7,426,275,636     10.29%              -57.68%                  -56.14%             -3.15%
Hong Kong)

Core business data restated according to the changed methods of measurement that occurred in the Reporting Period:

□ Applicable ■ Not applicable
Any over 30% YoY movements in the data above and why:
The movements were primarily driven by the spin-off.


IV Analysis of Non-Core Businesses

□ Applicable ■ Not applicable


V Analysis of Assets and Liabilities

1. Significant Changes in Asset Composition

                                                                                                                                       Unit: RMB

                             30 June 2020                               31 December 2019                   Change
                                                                                                             in               Reason for any
                                            As % of total                             As % of total
                        Amount                                      Amount                                percentag       significant change
                                               assets                                    assets
                                                                                                            e (%)


                                                                                                                                                  28
       TCL Technology Group Corporation                                                                         Interim Report 2020


Monetary
                    21,542,628,054           11.66%    18,648,184,663             11.31%       0.35%       No significant change
assets
Accounts
                     9,730,783,694            5.26%      8,340,353,992             5.06%       0.20%       Increase in revenue
receivable

Inventories          5,541,418,058            3.00%      5,677,963,123             3.44%       -0.44%      No significant change

                                                                                                           Transfer from
Investment
                     1,163,696,611            0.63%         82,272,964             0.05%       0.58%       construction in
property
                                                                                                           progress
                                                                                                           Return on investment
                                                                                                           in associates and joint
Long-term
                                                                                                           ventures, as well as
equity              18,606,252,622           10.07%    17,194,284,162             10.43%       -0.36%
                                                                                                           increase in the
investments
                                                                                                           investment in Bank of
                                                                                                           Shanghai
                                                                                                           Transfer from
Fixed assets        59,857,478,115           32.38%    45,459,070,330             27.58%       4.80%       construction in
                                                                                                           progress
Constructio                                                                                                Transfer to fixed
n in                21,017,402,164           11.37%    33,578,289,802             20.37%       -9.00%      assets and investment
progress                                                                                                   property
Short-term
                    16,491,170,954            8.92%    12,069,657,099              7.32%       1.60%       Increase in financings
borrowings
Long-term
                    46,145,998,074           24.97%    38,512,059,200             23.36%       1.61%       Increase in financings
borrowings


2. Assets and Liabilities at Fair Value

                                                                                                                           Unit: RMB
                                        Gain/loss on
                                          fair-value
                                                          Cumulative         Increase in the    Decrease in
                         Beginning        changes in
         Item                                          fair-value changes      Reporting       the Reporting      Ending amount
                          amount             the
                                                       recorded in equity        Period           Period
                                          Reporting
                                           Period

Financial assets

1.
Held-for-trading
financial assets
                        8,617,440,186   106,075,384                      -   11,434,746,249    8,492,845,265      11,665,416,554
(excluding
derivative
financial assets)
2. Derivative
                          159,035,592     16,810,520          37,311,285          7,638,267      33,583,848           187,211,816
financial assets


                                                                                                                                     29
        TCL Technology Group Corporation                                                                               Interim Report 2020


3. Receivables
                                      -                -             -636,831          107,391,838                 -       106,755,007
financing
4. Investments in
other equity                279,883,515                -           -7,149,123            6,328,611        8,140,429        270,922,574
instruments
Subtotal of
                          9,056,359,293   122,885,904              29,525,331    11,556,104,965      8,534,569,542      12,230,305,951
financial assets
Financial
                            272,924,688        8,851,977          114,299,180          218,027,917       53,910,065        560,193,697
liabilities

Significant changes to the measurement attributes of the major assets in the Reporting Period:

□ Yes ■ No


3. Restricted Asset Rights as at the Period-End

                                    Carrying amount
      Restricted assets                                                                   Reason for restriction
                                     (RMB’0,000)

Monetary assets                                      25,103   Deposited in the central bank as the required reserve

Monetary assets                                      26,544   Other monetary assets

Held-for-trading
                                                   184,061    Put in pledge for loan
financial assets
Fixed assets                                      3,609,419   As collateral for loan

Intangible assets                                  261,606    As collateral for loan

Total                                             4,106,734   -


VI Investments Made

1. Total Investment Amount


 Total investment amount in the Reporting         Total investment amount in the same
                                                                                                            Change (%)
                   Period (RMB)                        period of last year (RMB)

                              15,240,085,210                                3,621,221,234                                       320.85%


2. Major Equity Investments Made in the Reporting Period

□ Applicable ■ Not applicable


3. Major Non-Equity Investments Ongoing in the Reporting Period

□ Applicable ■ Not applicable




                                                                                                                                         30
    TCL Technology Group Corporation                                                                                                                 Interim Report 2020


4. Financial Assets at Fair Value

                                                                                                                                                          Unit: RMB’0,000
                                      Gain/loss
                                          on            Cumulative
                                                                               Purchased
                      Initial         fair-value          fair-value                                Sold in the         Cumulative
  Type of                                                                         in the                                                    Ending             Funding
                   investment         changes             changes                                    Reporting           return on
  assets                                                                       Reporting                                                    amount             source
                       cost             in the          recorded in                                     Period          investment
                                                                                 Period
                                      Reporting            equity
                                       Period

  Stocks                142,513            4,679                -715                  82,627              80,542               1,444             55,248     Self-funded

  Bonds                 456,605          -8,538                        -           187,296               172,408              13,194        285,701         Self-funded

  Wealth
management            1,166,225            6,969                       -           868,212               597,148               4,306         577,362        Self-funded
 products
Derivative
 financial                    764         1,681                3,731                     764               3,358              -4,610             18,721     Self-funded
instruments

  Others                269,233            7,498                 -64                  16,713                       -           2,111         285,998        Self-funded

   Total              2,035,340          12,289                2,953             1,155,610               853,457              16,445      1,223,031                   --


5. Financial Investments

(1) Securities Investments

                                                                                                                                                          Unit: RMB’0,000

                                                                                            Cum
                                                                                            ulativ
                                                                               Gain/loss       e
                                                   Mea                            on        fair-v
                                                   sure                        fair-valu alue           Purchased                     Gain/los                Acc
                                      Initial              Beginning                                                   Sold in the                 Ending                  Fundi
Securit Security Security                          men                            e         chan          in the                      s in the                ount
                                    investment               carrying                                                  Reporting                  carrying                  ng
y type      code        name                        t                          changes       ges        Reporting                     Reportin                ing
                                       cost                  amount                                                      Period                    amount              source
                                                   met                          in the      recor        Period                       g Period                title
                                                   hod                         Reportin ded
                                                                               g Period        in
                                                                                            equit
                                                                                               y

Bank’s               Agricultu                                                                                                                               Held
             Not                                   Fair
wealth                ral Bank                                                                                                                                -for- Self-f
          applicabl                   145,000 valu                         -           83           -     145,000                 -         83 145,083
manag                 of China                                                                                                                                tradi unded
              e                                     e
ement                 “Huilifen                                                                                                                               ng



                                                                                                                                                                                 31
       TCL Technology Group Corporation                                             Interim Report 2020


produc                   g”                                                                 fina
   t                  Corporat                                                               ncial
                          e                                                                  asset
                      Customiz                                                                s
                      ed RMB
                      Structure
                      d Deposit
                       Product

                      Bank of
                                                                                             Held
                       China
Bank’s                                                                                      -for-
                      Principal
wealth                                                                                       tradi
            Not       -Protecte            Fair
manag                                                                                         ng Self-f
          applicabl d Wealth       100,000 valu   -   973   -   100,000   -   973 100,973
ement                                                                                        fina unded
             e        Manage                e
produc                                                                                       ncial
                      ment—C
   t                                                                                         asset
                      NYAQK
                                                                                              s
                          F

                      Agricultu
                      ral Bank
                      of China                                                               Held
Bank’s               “Huilifen                                                             -for-
wealth                   g”                                                                 tradi
            Not                            Fair
manag                 Corporat                                                                ng Self-f
          applicabl                 40,000 valu   -   677   -    40,000   -   677   40,677
ement                     e                                                                  fina unded
             e                              e
produc                Customiz                                                               ncial
   t                  ed RMB                                                                 asset
                      Structure                                                               s
                      d Deposit
                       Product

                       Huaxia
                        Bank
                      Enterpris
                          e                                                                  Held
Bank’s               Growing                                                                -for-
wealth                 Income                                                                tradi
            Not                            Fair
manag                 Conserva                                                                ng Self-f
          applicabl                 40,000 valu   -   182   -    40,000   -   182   40,182
ement                    tive                                                                fina unded
             e                              e
produc                Customiz                                                               ncial
   t                     ed                                                                  asset
                       Wealth                                                                 s
                      Manage
                        ment
                       Product



                                                                                                      32
       TCL Technology Group Corporation                                                  Interim Report 2020


                      Agricultu
                      ral Bank
                      of China                                                                    Held
Bank’s               “Huilifen                                                                  -for-
wealth                   g”                                                                      tradi
            Not                             Fair
manag                 Corporat                                                                     ng Self-f
          applicabl                40,000 valu          -   161   -   40,000   -   161   40,161
ement                     e                                                                       fina unded
             e                               e
produc                Customiz                                                                    ncial
   t                  ed RMB                                                                      asset
                      Structure                                                                    s
                      d Deposit
                       Product

                      Bank of
                                                                                                  Held
                       China
Bank’s                                                                                           -for-
                       Steady
wealth                                                                                            tradi
            Not        Wealth               Fair
manag                                                                                              ng Self-f
          applicabl Manage         40,000 valu          -   154   -   40,000   -   154   40,154
ement                                                                                             fina unded
             e          ment                 e
produc                                                                                            ncial
                      Plan-Zhi
   t                                                                                              asset
                         hui
                                                                                                   s
                       Series

                       China
Bank’s               Everbrig                                                                    Othe
wealth                 ht Bank                                                                      r
            Not
manag                 Corporat              Cos                                                   curr Self-f
          applicabl                34,950               -     -   -   34,950   -   481   35,431
ement                     e                  t                                                    ent unded
             e
produc                Structure                                                                   asset
   t                      d                                                                        s
                      Deposits

                       ICBC
                                                                                                  Held
                       Wealth
Bank’s                                                                                           -for-
                      Manage
wealth                                                                                            tradi
            Not       mentCor               Fair
manag                                                                                              ng Self-f
          applicabl    porate      30,000 valu     30,488   643   -        -   -   643   31,131
ement                                                                                             fina unded
             e          RMB                  e
produc                                                                                            ncial
                       Wealth
   t                                                                                              asset
                      Manage
                                                                                                   s
                        ment

                       CICC                                                                       Held
            Not        Xintou               Fair                                                  -for-
 Trust                                                                                                    Self-f
          applicabl Collectiv      30,000 valu          -   488   -   30,000   -   488   30,488 tradi
 plan                                                                                                     unded
             e        e Capital              e                                                     ng
                        Trust                                                                     fina


                                                                                                               33
         TCL Technology Group Corporation                                                                               Interim Report 2020


                         Plan No.                                                                                               ncial
                             2                                                                                                  asset
                                                                                                                                    s

                          Huaxia
                           Bank
                         Enterpris
                             e                                                                                                  Held
  Bank’s                Growing                                                                                                -for-
  wealth                  Income                                                                                                tradi
               Not                                Fair
  manag                  Conserva                                                                                                   ng Self-f
             applicabl                   30,000 valu                -       220     -       30,000         -     220   30,220
  ement                    tive                                                                                                 fina unded
                e                                    e
  produc                 Customiz                                                                                               ncial
     t                      ed                                                                                                  asset
                          Wealth                                                                                                    s
                         Manage
                           ment
                         Product

                                                                                                                                Not
  Other securities
                                                                                                                                appli Self-f
  investments held at the             1,277,765      -       585,606      -1,358 -720      672,936   847,129   17,738 422,537
                                                                                                                                cabl unded
  period-end
                                                                                                                                e

  Total                               1,807,715      -       616,094      2,233 -720    1,172,886    847,129   21,800 957,036       -     -

  Disclosure date of the
  board announcement
                                     20 March 2019
  approving the securities
  investments

  Disclosure date of the
  general meeting
  announcement approving             10 April 2019
  the securities investments
  (if any)


 (2) Investments in Derivative Financial Instruments


Funding source                                           Mostly foreign-currency revenue

Legal matters involved (if applicable)                   Not applicable

Disclosure date of the board announcement
                                                         28 April 2018
approving the derivative investments (if any)

Disclosure date of the general meeting
announcement approving the derivative                    Not applicable
investments (if any)



                                                                                                                                              34
       TCL Technology Group Corporation                                                                                 Interim Report 2020


                                                 In order to effectively manage the exchange and interest rate risks of foreign currency
                                                 assets, liabilities and cash flows, the Company, after fully analyzing the market trend
                                                 and predicting the operation (including orders and capital plans), adopts forward foreign
                                                 exchange contracts, options and interest rate swaps to avoid future exchange rate and
                                                 interest rate risks. As its business scale changes subsequently, the Company will adjust
                                                 the exchange rate risk management strategy according to the actual market conditions
                                                 and business plans.
                                                 Risk analysis:
                                                 1. Market risk: the financial derivatives business carried out by the Group belongs to
                                                 hedging and trading business related to main business operations, and there is a market
                                                 risk of loss due to the fluctuation of underlying interest and exchange rates, which lead
                                                 to the fluctuation of prices of financial derivatives;
                                                 2. Liquidity risk: the derivatives business carried out by the Group is an
                                                 over-the-counter transaction operated by a financial institution, and there is a risk of
                                                 loss due to paying fees to the bank for the operations of evening up or selling the
                                                 derivatives below the buying prices;
                                                 3. Performance risk: the Group conducts the derivative business based on rolling
                                                 budgets for risk management, and there is a risk of performance failure due to deviation
                                                 between the actual operating results and budgets;
Analysis of risks and control measures         4. Other risks: in the case of specific business operations, if the operator fails to finish
associated with derivative investments held in the prescribed procedures for report or approval, or fails to record the financial
Reporting Period (including but not limited to derivative business information accurately, timely and completely, it may result in loss
market risk, liquidity risk, credit risk,        of derivative business or trading opportunities. Moreover, if the trading operator fails to
operational risk, legal risk, etc.)              fully understand the terms of transaction contracts or product information, the Group
                                                 will face the legal risks and transaction losses therefrom.
                                                 Measures taken for risk control:
                                                 1. Basic management principles: the Group strictly follows the hedging principle and
                                                 the main purpose of locking costs and avoiding risks. It is required that the financial
                                                 derivatives business to be carried out matches the variety, size, direction and duration of
                                                 spot goods, and no speculative trading should be involved. In the selection of hedging
                                                 instruments, only simple financial derivatives that are closely related to the main
                                                 business operation and meet the requirements of hedge accounting treatment should be
                                                 selected, and avoid complex business that exceeds the prescribed business scope or is
                                                 difficult to recognize in terms of risk and pricing;
                                                 2. The Group has formulated a special risk management system tailored to the risk
                                                 characteristics of the financial derivatives business, covering all key aspects such as
                                                 pre-emptive prevention, in-process monitoring and post-processing. Professional
                                                 personnel are rationally arranged for investment decision-making, business operations
                                                 and risk control. Investment participants are required to fully understand the risks of
                                                 financial derivatives investment and strictly implement the business operations and risk
                                                 management systems of derivatives. Before starting the derivatives business, the
                                                 holding company must submit to the management department of the Group detailed
                                                 business reports including its internal approval, main product terms, operational


                                                                                                                                            35
       TCL Technology Group Corporation                                                                                Interim Report 2020


                                                necessity, preparations, risk analysis, risk management strategy, fair value analysis and
                                                accounting methods, and special summary reports on business operated. Operations can
                                                be implemented only after getting opinions from the professional department of the
                                                Group;
                                                3. Relevant departments should track the changes in the open market price or fair value
                                                of financial derivatives, timely assess the risk exposure changes of invested financial
                                                derivatives, and make reports to the board of directors on business development;
                                                4. When the combined impairment of the fair value of derivatives and changes in the
                                                value of the assets (if any) used for risk hedging by the Group results in a total loss or
                                                floating loss amounting to 10% of the recently audited net assets of the Company, and
                                                the absolute amount exceeds RMB10 million, the Group will disclose it in a timely
                                                manner.

                                                With the rapid expansion of overseas sales, the Company keeps following the above
Changes in market prices or fair value of       rules in the operation of forward foreign exchange contracts, interest rate swap contracts
derivative investments in Reporting Period      and futures contracts to avoid and hedge foreign exchange risks arising from operation
(fair value analysis should include             and financing. It saw a net gain of RMB38.68 million for the Reporting Period. The fair
measurement method and related assumptions value of derivatives is determined by real-time quoted price of the foreign exchange
and parameters)                                 market, based on the difference between the contractual price and the forward exchange
                                                rate quoted immediately in the foreign exchange market on the balance sheet date.

Major changes in accounting policies and
specific accounting principles adopted for
                                                No significant change
derivative investments in Reporting Period
compared to last reporting period

                                                In view of the fact that certain raw materials of the core business of the Company are
                                                purchased overseas, a wide range of settlement currencies is involved. The Company
                                                reduces exchange losses and locks transaction costs by reasonable financial derivatives,
                                                which helps to reduce risk control costs and improve company competitiveness. Risks
                                                are effectively controlled as the Company has taken series of measures such as
                                                conducting a rigorous internal evaluation for the operation of financial derivatives
Opinion of independent directors on             business, establishing a corresponding regulatory mechanism, formulating reasonable
derivative investments and risk control         accounting policies and specific accounting principles, setting limits for risk exposure
                                                management, and operating simple financial derivatives. The contracting agent for
                                                financial derivatives business of the Company is a sound financial agent with good
                                                credit standing. The financial derivatives transactions carried out by the Company in the
                                                first half of 2020 are closely related to the daily operation needs of the Company with
                                                controllable risks. The business is in line with the interests of minority shareholders of
                                                the company and the relevant laws and regulations.

 Positions of derivative investments at the period-end:
                                                                                                                          Unit: RMB’0,000

                                                                                           Gain/loss in       Ending contractual amount
      Type of contract                Beginning amount            Ending amount             Reporting       as % of the Company’s ending
                                                                                              Period                   net assets


                                                                                                                                             36
        TCL Technology Group Corporation                                                                             Interim Report 2020


                                  Contractual     Actual        Contractual    Actual                     Contractual          Actual
                                   amount         amount          amount       amount                       amount             amount

1. Forward forex contracts          1,279,232      36,087         1,568,462     48,622                               24.17          0.75

2. Interest rate swaps                528,098      15,843          872,902      26,187            3,868              13.45          0.40

3. Currency swaps                     215,565      14,399          427,531      21,377                                6.59          0.33

Total                               2,022,895      66,329         2,868,895     96,186            3,868              44.21          1.48


VII Sale of Major Assets and Equity Investments

1. Sale of Major Assets

□ Applicable ■ Not applicable
No such cases in the Reporting Period.


2. Sale of Major Equity Investments

□ Applicable ■ Not applicable


VIII Principal Subsidiaries and Joint Stock Companies

Principal subsidiaries and joint stock companies with an over 10% effect on the Company’s net profit:
                                                                                                                             Unit: RMB

             Rel
             atio
             nshi
                    Princip
               p
                         al   Registere                                                                   Operating
 Name        with                                Total assets          Net assets          Revenue                            Net profit
                    activit       d capital                                                                 profit
              the
                         y
              Co
             mpa
              ny
TCL
China               Semi-c
Star                onduct
             Sub
Optoele             or        RMB23.8
             sidi                               148,117,510,196      61,298,930,297      19,512,204,757   -134,963,372       -139,251,664
ctronics            display   88 billion
             ary
Technol             device
ogy Co.,            s
Ltd.
Highly              Distrib
             Sub
Informa             ution     RMB133
             sidi                                 4,325,648,765         985,702,957       9,126,805,527   141,852,694         100,311,085
tion                of        million
             ary
Industry            electro


                                                                                                                                     37
       TCL Technology Group Corporation                                                                         Interim Report 2020


Co.,                nics
Ltd.

Subsidiaries obtained or disposed in the Reporting Period:
                                                    How subsidiary was obtained or       Effects on overall operations and operating
                   Subsidiary
                                                   disposed of in the Reporting Period                  performance

TCL Optoelectronics Korea Co., Ltd                            Incorporated                          No significant effect

TCL Technology Investments Limited(BVI)                       Incorporated                          No significant effect

Admiralty Harbour Strategic Investment
                                                              Incorporated                          No significant effect
Limited
TCL Light Electrical Appliances (Longmen)
                                                             De-registered                          No significant effect
Co., Ltd.

TCL Educational Web Ltd. and its subsidiaries                 Transferred                           No significant effect

Other information about principal subsidiaries and joint stock companies:
There were no other information about the principal subsidiaries and joint stock companies during the Reporting Period that the
Company is required to disclose.


IX Structured Bodies Controlled by the Company

□ Applicable ■ Not applicable


X Operating Performance Forecast for January-September 2020

Warning of a forecast negative net profit for the January-September period of the current year or a considerable YoY change therein,
as well as the reasons:
□ Applicable ■ Not applicable


XI Risks Facing the Company and Countermeasures

1. Risk of Macroeconomic Fluctuations
In the first half of 2020, affected by the COVID-19, the uncertainty of global economic growth
increased. Although the epidemic is still spreading, the global economy is gradually recovering
from the most severe situation. Major countries have restarted their economies one after another,
and the global economy is showing signs of stabilization. However, the overall prospects for
economic recovery are still not optimistic: emerging economies have been severely hit, and
monetary policy has been substantially loosened; in the second half of the year, the global economic
outlook remains uncertain, and the road to recovery is still fraught with difficulties. Chi na was the
first country to suffer the virus’s onslaught. In the first half of 2020, its economy fell first and then
rose, recovering steadily. Given that China has accumulated extensive experience in epidemic
prevention and control, the possibility of a second outbreak is low. It is expected that the work and

                                                                                                                                 38
    TCL Technology Group Corporation                                                 Interim Report 2020


production resumption of the traditional service sector will speed up in the second half of the year,
and thereby help the overall economy move toward normality. The return of the annual GDP to
positive growth is within reach. Looking ahead to the second half of 2020, the economy and the
market as a whole are still in a process of recuperation. “Counter-globalization” behavior such as
the COVID-19 epidemic, trade protectionism and unilateralism will continue to dampen global and
Chinese economic growth. The display sector is a national strategic emerging industry. The
development of new display technologies has been strongly supported by the central and local
governments, but it is still necessary for the Company to remain vigilant about the potential risks
that macroeconomic uncertainty may bring to its development.
Against this backdrop, the Company will continue its in-depth studies of the macroeconomic trends
and their impact. Based on China’s idea of a new “development pattern in which domestic
economic cycle plays a leading role while international economic cycle remains its extension and
supplement”, the Company will keep focusing on the professional operation strategies for the main
business, precisely determine its business development directions, fully grasp market opportunities,
and on the basis of maintaining TCL CSOT’s balanced product market distribution as well as good
customer quality and portfolio, strive for survival through maximizing cost efficiency, and develop
through transformation, innovation and exploration, in order to minimize the negative impact of the
macro economy.
2. Risk of Industry Restructuring and Reshuffle
Although the demand for large-size panels as well as small- and medium-size panels has picked up,
as shown by the latest industry supply-demand data, the semi-conductor display sector as a whole is
still in a downward cycle, and it may hover at the bottom of the cycle until 2021. Additionally, due
to the COVID-19 epidemic, the global economy remains stagnant. Overseas manufacturers have
clearly reduced production, and the concentration of production capacity has accelerated. In the
panel industry, the concentration will further increase, the industry reshuffle will be sped up, and
the weak will be eliminated.
The Company will carefully identify the opportunities and challenges brought about by the industry
restructuring and reshuffle, expedite product technology iteration and business model innovation,
continue to analyze in depth the trends of changes in industry supply and demand relations, predict
production capacity allocation in advance, and increase R&D investment so as to create high
barriers to competition and broaden the business moat through the continuous improvement of
products’ technological content and added value as well as the constant expansion of the
Company’s scale and benefit advantages. Moreover, taking advantage of the synergy formed by
                                                                                                     39
    TCL Technology Group Corporation                                                  Interim Report 2020


industry-finance integration, the Company will keep improving the upstream and downstream
layout and actively explore the second track to effectively soften the impact of the semi -conductor
display business downturn, with the aim of seizing the earliest opportunities in the possible industry
restructuring.
3. Risks Caused by Market Competition
In terms of downstream applications, with the gradual increase in the penetration rate of 5G smart
phones, as well as the rapid rise of artificial intelligence and the Internet of Things (IoT), new
products in such fields as middle- and high-end smart devices, wearable devices, commercial
display devices, and in-vehicle devices have emerged one after another. The steady growth of the
traditional market and the rapid take-off of the commercial display market have driven the
continuous increase in market demand, and at the same time led to increasingly fierce market
competition. Furthermore, the application scenarios of end consumers are also constantly changing.
For example, short video applications such as Douyin have made for the creation of auto-rotate
smart screens, and the COVID-19 epidemic has facilitated the development of under-display
fingerprint scanning. If the Company cannot keep creating new products according to the demand
of downstream applications, its business growth will also be hindered.
The Company will continue to focus on the needs of the industry and end customers. It will
optimize its business structure and enhance its product competitiveness with product technology
innovation as the main driving force. The Company will also actively listen to customer feedback,
further strengthen in-depth cooperation with existing major domestic and foreign customers, and
provide customers with solutions that take into account both production profit and customization.
Meanwhile, it will conduct in-depth research on mainstream customers in the industry, accurately
grasp the pace of end market applications, constantly increase R&D investment, and based on more
thorough research and analysis of market segments, explore more emerging fields, actively make
arrangements regarding emerging market segments, and develop new driving forces for growth.
4. Management Risks Brought by Restructuring, Transformation and M&A
At present, the Company has completed the spin-off and transformation. Its business management is
in good condition. However, the spin-off and transformation have brought about substantial changes
in capital structure, business structure, management structure, operations procedures and even
corporate culture, which imposes extremely high requirements for the Company’s business
management level. On the other hand, the Company is still actively looking for industry mergers
opportunities and has already gained something. How to integrate the target companies from such


                                                                                                      40
    TCL Technology Group Corporation                                                  Interim Report 2020


aspects as business, personnel and technology to achieve the “one plus one greater than two” effect
also poses a challenge to the Company’s management level.
The Company will reorganize its structures, procedures and working mechanisms through structural
adjustment and organizational re-framing to ensure that all tasks before and after the spin-off and
transformation can be seamlessly connected and effectively implemented, and that the new
structures and new mechanisms can bring a longer-term transformation impetus and a solider
organizational guarantee to the Company. In the meantime, all employees will respond to the
Company’s call to “strive for survival through maximizing cost efficiency, and develop through
transformation, innovation and exploration”, and actively carry out crucial tasks such as
“maximizing cost efficiency”, “transformation, innovation and exploration”, and “team capability
uplift”. All kinds of talent will be actively promoted and introduced. The employees will
consciously set higher management goals for various tasks, take up the opportunities and challenges
brought about by the spin-off, transformation and M&A with full enthusiasm, and achieve
long-term, stable growth with high quality.
5. Intellectual Property Risks
Competition in the semi-conductor display and materials field is becoming increasingly fierce. As
the Company keeps expanding its business scale and technological layout, patent disputes occur
from time to time, and intellectual property risks become increasingly obvious. Ideological trends
such as “counter-globalization” are more likely to further amplify related risks.
The Company will continue to maintain high-intensity R&D investment, continuously enhance the
professional capabilities of the core technical team, and constantly improve the layout of key
technology and product patents through the “independent research + cooperative R&D” model.
Meanwhile, it will keep perfecting the intellectual property management and protection mechanism,
and through strategic cooperation with external professional institutions on intellectual property,
strengthen risk-involved patent investigation, enhance patent risk early warning, reduce
risk-involved patent threats, and comprehensively improve the ability to defend against intellectual
property risks.




                                                                                                      41
       TCL Technology Group Corporation                                                                           Interim Report 2020




                                              Part V Significant Events

I Annual and Extraordinary General Meetings Convened during the Reporting Period

1. General Meetings Convened during the Reporting Period


                                                    Investor                                                     Index to disclosed
        Meeting                   Type                               Date of the meeting   Date of disclosure
                                               participation ratio                                                  information

The First
                         Combination of
Extraordinary
                         on-site and online                24.98%      3 February 2020      4 February 2020
General Meeting of
                         voting
2020

The Second
                         Combination of
Extraordinary
                         on-site and online                23.05%       16 March 2020         17 March 2020
General Meeting of
                         voting                                                                                 http://www.cninfo.co
2020
                                                                                                                m.cn
                         Combination of
The 2019 Annual
                         on-site and online                22.84%        20 April 2020         21 April 2020
General Meeting
                         voting

The Third
                         Combination of
Extraordinary
                         on-site and online                25.55%         15 June 2020          16 June 2020
General Meeting of
                         voting
2020

2. Extraordinary General Meetings Convened at the Request of Preference Shareholders with Resumed

Voting Rights
□ Applicable     ■ Not applicable


II Interim Dividend Plan

□ Applicable ■ Not applicable


III Commitme nts of the Company’s Actual Controller, Shareholders, Related Parties and
Acquirers, as well as the Company Itself and Other Entities Fulfilled in the Reporting Period
or Overdue at the Period-End

□ Applicable ■ Not applicable

No such cases in the Reporting Period.




                                                                                                                                      42
     TCL Technology Group Corporation                                                          Interim Report 2020


IV Engagement and Disengagement of Inde pendent Auditor

Are the interim financial statements audited?
□ Yes ■ No


V Explanations Given by the Board of Directors and the Supervisory Committee Regarding
the Independent Auditor's “Modified Opinion” on the Financial Statements of the Reporting
Period

□ Applicable ■ Not applicable


VI Explanations Given by the Board of Directors Regarding the Inde pendent Auditor's
“Modified Opinion” on the Financial Statements of Last Year

□ Applicable ■ Not applicable


VII Insolvency and Reorganization

□ Applicable ■ Not applicable


VIII Legal Matters

Significant lawsuits and arbitrations:

□ Applicable ■ Not applicable
Other legal matters:
□ Applicable ■ Not applicable


IX Doubts from Media

□ Applicable ■ Not applicable

The Company had no issues about which media generally raised doubts in the Reporting Period.


X Punishme nts and Rectifications

□ Applicable ■ Not applicable
No such cases in the Reporting Period.


XI Credit Quality of the Company as well as its Controlling Shareholder and Actual
Controller

□ Applicable ■ Not applicable




                                                                                                               43
    TCL Technology Group Corporation                                                 Interim Report 2020


XII Equity Incentive Plans, Employee Stock Ownership Plans or Other Incentive Measures
for Employees

(I) The Top 400 and Key Personnel Stock Ownership Plan and the Global Partner Plan

On 14 April 2020, the Company disclosed the Announcement on the Completion of the Non-Deal
Transfers under the First Global Partner Plan and Shareholding Increases by Directors, Supervisors
and Senior Management. As indicated in the Confirmation of Securities Ownership Transfer issued
by the Shenzhen branch of China Securities Depository and Clearing Co., Ltd., 32,022,354 shares
(0.24% of the Company’s total share capital) of the Company held in the securities account under
the Designated Asset Management Plan of the First Global Partner Plan of TCL Group were
transferred through a non-deal manner to the securities accounts of the holders under the plan. To be
specific, a total of 2,443,960 shares were transferred to the Company’s directors, supervisors and
senior management (Mr. Li Dongsheng, Ms. Du Juan, Mr. Jin Xuzhi, Mr. Liao Qian, Mr. Yan
Xiaolin and Mr. Mao Tianxiang), and 29,578,394 shares to other holders. The unvested 67,125,761
shares under the First Global Partner Plan and the corresponding dividends (if any) would be sold
by the Management Committee of the First Stock Ownership Plan at a proper timing before the
expiry of the First Global Partner Plan, and the proceeds generated therein would be returned to the

Company.

(II) The Second Global Partner Plan

On 14 April 2020, the Company disclosed the Announcement on the Equity Vesting of the Second
Global Partner Plan. This plan set out a company performance-related condition of a
not-lower-than-15% growth in the net profit attributable to shareholders of the Company as the
parent in 2019 compared to 2018. According to the 2019 Annual Independent Auditor’s Report for
TCL Technology Group Corporation issued by Da Hua Certified Public Accountants (Special
General Partnership), the net profit attributable to shareholders of the Company as the parent in
2019 failed to grow by over 15% compared to 2018, which meant the said condition had not been
satisfied. Therefore, the 33,391,897 shares under the Second Global Partner Plan and the
corresponding dividends (if any) would be taken back by the Company and would not be vested in
the holders under the plan. These shares would be sold by the Management Committee of the
Second Stock Ownership Plan at a proper timing before the expiry of the Second Global Partner


                                                                                                     44
    TCL Technology Group Corporation                                                   Interim Report 2020



Plan, and the proceeds generated therein would be returned to the Company.

(III) The 2018 Restricted Stock Incentive Plan and the Global Innovation Partner Plan

The Proposal on the Repurchase and Retirement of Restricted Shares That Have Been Granted
under the 2018 and 2019 Restricted Stock Incentive Plans But Are Still in Lockup was approved
respectively at the 25th Meeting of the 6th Board of Directors and the 16th Meeting of the 6th
Supervisory Committee both dated 28 March 2020. As such, it was agreed to repurchase and retire
the 6,780,952 restricted shares that had been granted to 723 awardees under the 2018 Restricted
Stock Incentive Plan but were still in lockup due to the failure to satisfy the unlocking condition for
the second unlocking period, i.e. an unfulfilled company performa nce requirement for 2019; it was
agreed to repurchase and retire the 881,067 restricted shares that had been granted to 27 awardees
under the 2019 Restricted Stock Incentive Plan but were still in lockup because they were deemed
by the Board of Directors as no longer eligible for the incentives due to reasons such as the spin-off
of Huizhou TCL Environmental Resource Co., Ltd. and resignation; and it was agreed to repurchase
and retire the 1,497,289 restricted shares that had been granted to 95 in-service awardees but were
still in lockup due to the failure to satisfy the unlocking condition for the current unlocking period,
i.e. an unfulfilled company performance requirement for 2019. The independent directors of the
Company issued their independent opinion on the relevant matters, and the law firm issued the legal

opinion. The said matters were approved at the 2019 Annual General Meeting on 20 April 2020.

(IV) The 2019 Restricted Stock Incentive Plan and the Second Global Innovation Partner

Plan

The Proposal on the Repurchase and Retirement of Restricted Shares That Have Been Granted
under the 2018 and 2019 Restricted Stock Incentive Plans But Are Still in Lockup was approved
respectively at the 25th Meeting of the 6th Board of Directors and the 16th Meeting of the 6th
Supervisory Committee both dated 28 March 2020. As such, it was agreed to repurchase and retire
the 6,780,952 restricted shares that had been granted to 723 awardees under the 2018 Restricted
Stock Incentive Plan but were still in lockup due to the failure to satisfy the unlocking condition for
the second unlocking period, i.e. an unfulfilled company performance require ment for 2019; it was
agreed to repurchase and retire the 881,067 restricted shares that had been granted to 27 awardees
under the 2019 Restricted Stock Incentive Plan but were still in lockup because they were deemed


                                                                                                       45
     TCL Technology Group Corporation                                                                          Interim Report 2020



by the Board of Directors as no longer eligible for the incentives due to reasons such as the spin-off
of Huizhou TCL Environmental Resource Co., Ltd. and resignation; and it was agreed to repurchase
and retire the 1,497,289 restricted shares that had been granted to 95 in-service awardees but were
still in lockup due to the failure to satisfy the unlocking condition for the current unlocking period,
i.e. an unfulfilled company performance requirement for 2019. The independent directors of the
Company issued their independent opinion on the relevant matters, and the law firm issued the legal

opinion. The said matters were approved at the 2019 Annual General Meeting on 20 April 2020.

XIII Major Related-Party Transactions

1. Continuing Related-Party Transactions

□ Applicable ■ Not applicable


2. Related-Party Transactions Regarding Purchase or Disposal of Assets or Equity Investments

□ Applicable ■ Not applicable


3. Related-Party Transactions Regarding Joint Investments in Third Parties

□ Applicable ■ Not applicable


4. Amounts Due to and from Related Parties

□ Applicable ■ Not applicable
Indicate whether there were any amounts due to and from related parties for non-operating purposes.
□ Yes ■ No


5. Other Major Related-Party Transactions


               Title of announcement                    Date of disclosure                      Website for disclosure

Announcement on the Expected Continuing
                                               31 March 2020
Related-Party Transactions for 2020

Announcement on TCL Finance Co., Ltd.
Continuing to Provide Financial Services for                                       http://www.cninfo.com.cn
TCL Industries Holdings Inc. and Extending     31 March 2020
the Financial Service Agreement between
Them and the Related-Party Transaction




                                                                                                                               46
        TCL Technology Group Corporation                                                                             Interim Report 2020


XIV Occupation of the Company’s Capital by the Controlling Shareholder or any of Its
Related Parties for Non-Operating Purposes

□ Applicable ■ Not applicable


XV Major Contracts and Execution thereof

1. Entrustment, Contracting and Leases

(1) Entrustment

□ Applicable ■ Not applicable
No such cases in the Reporting Period.


(2) Contracting

□ Applicable ■ Not applicable
No such cases in the Reporting Period.


(3) Leases

□ Applicable ■ Not applicable

No such cases in the Reporting Period.


2. Major Guarantees

                                                                                                                        Unit: RMB'0,000

       Guarantees provided by the Company as the parent and its subsidiaries for external parties (exclusive of those for subsidiaries)

                                                        Actual                                                        Havin     Guarantee
                     Disclosure
                                                     occurrence          Actual                                          g         for a
                     date of the       Line of                                            Type of         Term of
  Obligor                                                date           guarantee                                     expire      related
                   guarantee line     guarantee                                          guarantee       guarantee
                                                     (agreement          amount                                        d or      party or
                   announcement
                                                    signing date)                                                       not           not
TCL King
Electrical
                                                                                                         1 month-5
Appliances             2018-12-7        345,000         2019-8-29           344,310    Joint-liability                No        Yes
                                                                                                         years
(Huizhou)
Co., Ltd.
TCL
Overseas
                                                                                                         1 month-1
Electronics            2018-12-7        120,000         2020-1-15            47,057    Joint-liability                No        Yes
                                                                                                         year
(Huizhou)
Ltd.



                                                                                                                                            47
       TCL Technology Group Corporation                                                           Interim Report 2020


TCL King
Electrical
Appliances          2018-12-7       60,000   2019-11-18     4,000   Joint-liability   1 year      No       Yes
(Chengdu)
Co., Ltd.
Huizhou
                                                                                      3
TCL Mobile
                    2018-12-7      450,000    2020-1-10   257,867   Joint-liability   months-1    No       Yes
Communicat
                                                                                      year
ion Co., Ltd.
TCL
Communicat
ion
                    2018-12-7      120,000   2017-11-20    12,035   Joint-liability   1-5 years   No       Yes
Technology
Holdings
Limited
TCL Mobile
Communicat                                                                            3
ion (HK)            2018-12-7      248,500     2020-3-5    84,425   Joint-liability   months-1    No       Yes
Company                                                                               year
Limited
                                                                                      3
TCT Mobile
                    2018-12-7        1,600     2020-3-1      750    Joint-liability   months-1    No       Yes
Italy S.R.L
                                                                                      year
TCL Home
                                                                                      6
Appliances
                    2018-12-7      140,000    2020-1-14    32,966   Joint-liability   months-1    No       Yes
(Hefei) Co.,
                                                                                      year
Ltd.
TCL Home
Appliances                                                                            1-6
                    2018-12-7                 2020-4-13     2,647   Joint-liability               No       Yes
(Zhongshan)                         16,000                                            months
Co., Ltd.
TCL
Air-Conditio
                                                                                      1 month-5
ner                 2018-12-7      158,600     2016-9-9    89,244   Joint-liability               No       Yes
                                                                                      years
(Zhongshan)
Co., Ltd.
TCL Air
Conditioner                                                                           1 month-1
                    2018-12-7      131,600    2020-1-17    22,490   Joint-liability               No       Yes
(Wuhan)                                                                               year
Co., Ltd.
Zhongshan
TCL                                                                                   9 days-6
                    2018-12-7       75,300    2020-1-21     9,866   Joint-liability               No       Yes
Refrigeration                                                                         months
Equipment


                                                                                                                  48
       TCL Technology Group Corporation                                                           Interim Report 2020


Co., Ltd.

Guangdong
TCL Smart
Heating &                                                                             3-6
                    2018-12-7        7,000    2020-1-15     2,422   Joint-liability               No       Yes
Ventilation                                                                           months
Equipment
Co., Ltd.
TCL
Air-Conditio
                                                                                      1-6
ner                 2018-12-7       25,000    2020-1-13    11,796   Joint-liability               No       Yes
                                                                                      months
(Jiujiang)
Co., Ltd.
TCL Tonly
Electronics
                    2018-12-7       40,000    2015-11-7    16,409   Joint-liability   2-5 years   No       Yes
(Huizhou)
Co., Ltd.
TCL Very
Lighting
                                                                                      4-182
Technology          2018-12-7        4,000    2020-2-14      354    Joint-liability               No       Yes
                                                                                      days
(Huizhou)
Co., Ltd.
SHIFENDA
OJIA Online                                                                           6-162
                    2018-12-7        3,000    2020-1-20       40    Joint-liability               No       Yes
Service Co.,                                                                          days
Ltd.
Guangzhou
Yunsheng
Tianji              2018-12-7      110,000    2017-9-28    89,855   Joint-liability   12 years    No       Yes
Technology
Co., Ltd.
Guangzhou
TCL Science
and
                    2018-12-7      200,000   2018-12-18   115,300   Joint-liability   13 years    No       Yes
Technology
Developmen
t Co., Ltd.
Shenzhen
Bao’an TCL
Haichuanggu
Technology          2018-12-7       20,000    2018-9-25    16,144   Joint-liability   3 years     No       Yes
Park
Developmen
t Co., Ltd.



                                                                                                                  49
       TCL Technology Group Corporation                                                                                Interim Report 2020


TCL
Industries
Holdings              2018-12-7         800,000        2016-10-4          740,505      Joint-liability   1-5 years     No        Yes
(HK)
Limited
Canyon
Circuit                                                                                                  1
Technology            2018-12-7           5,000         2020-1-2                 269   Joint-liability   month-191     No        Yes
(Huizhou)                                                                                                days
Co., Ltd.
Huizhou
Shenghua                                                                                                 63-189
                      2018-12-7           9,000         2020-1-3                 822   Joint-liability                 No        Yes
Industrial                                                                                               days
Co., Ltd.
Taiyang
Electro-optic                                                                                            135-184
                      2018-12-7           4,000        2020-1-13                 61    Joint-liability                 No        Yes
(Huizhou)                                                                                                days
Co., Ltd.
Shenzhen
Qianhai
Qihang
                                                                                                         1 month-1
Supply                2020-3-31          40,000        2020-1-10            25,827     Joint-liability                 No        No
                                                                                                         year
Chain
Management
Co., Ltd.
Shenzhen
Qianhai
Qihang
International
                      2020-3-31         110,000        2020-6-17             3,800     Joint-liability   1 year        No        No
Supply
Chain
Management
Co., Ltd.
 Total approved line for such                                         Total actual amount of such
 guarantees in the Reporting                           3,621,525      guarantees in the Reporting                                  954,356
            Period (A1)                                                       Period (A2)
 Total approved line for such                                         Total actual balance of such
 guarantees at the end of the                          3,621,525      guarantees at the end of the                               1,931,259
    Reporting Period (A3)                                               Reporting Period (A4)

                                   Guarantees provided by the Company as the parent for its subsidiaries

                    Disclosure                         Actual                                                                    Guarantee
                                                                        Actual                                         Having
                    date of the       Line of       occurrence                            Type of            Term of                  for a
  Obligor                                                             guarantee                                        expired
                  guarantee line     guarantee          date                             guarantee       guarantee                 related
                                                                       amount                                           or not
                  announcement                      (agreement                                                                    party or


                                                                                                                                          50
       TCL Technology Group Corporation                                                                Interim Report 2020


                                             signing date)                                                            not

Wuhan
China Star
                                                                                           3
Optoelectron
                    2020-3-31    1,110,000      2016-2-24     614,301    Joint-liability   months-8    No        No
ics
                                                                                           years
Technology
Co., Ltd.
Shenzhen
China Star
Optoelectron
                                                                                           3
ics
                    2020-3-31    3,820,000      2018-2-11    1,664,681   Joint-liability   months-8    No        No
Semiconduct
                                                                                           years
or Display
Technology
Co., Ltd.
TCL China
Star
Optoelectron                                                                               1 month-8
                    2020-3-31     710,800       2015-4-21     458,407    Joint-liability               No        No
ics                                                                                        years
Technology
Co., Ltd.
Wuhan
China Star
Optoelectron
                                                                                           3
ics
                    2020-3-31    1,510,000     2017-12-22    1,112,062   Joint-liability   months-8    No        No
Semiconduct
                                                                                           years
or Display
Technology
Co., Ltd.
Huizhou
China Star
                                                                                           2
Optoelectron
                    2020-3-31     730,000      2019-12-26     343,631    Joint-liability   months-1    No        No
ics
                                                                                           year
Technology
Co., Ltd.
China Star
Optoelectron
ics
                    2020-3-31     330,000       2019-8-30      48,000    Joint-liability   1 year      No        No
International
(HK)
Limited
China
                                                                                           1 month-4
Display             2020-3-31     150,000       2019-5-27      35,151    Joint-liability               No        No
                                                                                           years
Optoelectron


                                                                                                                            51
       TCL Technology Group Corporation                                                               Interim Report 2020


ics
Technology
(Huizhou)
Co., Ltd.
Wuhan
China
Display
                                                                                          1 month-5
Optoelectron          2020-3-31    50,000   2018-10-31          2,623   Joint-liability               No        No
                                                                                          years
ics
Technology
Co., Ltd.
Huizhou
Zhongkai
TCL
Zhirong               2020-3-31   100,000   2019-12-13         20,000   Joint-liability   12 months   No        No
Technology
Microcredit
Co., Ltd.
Highly
                                                                                          1
Information
                      2020-3-31   294,000     2018-7-2       207,122    Joint-liability   month—3    No        No
Industry Co.,
                                                                                          years
Ltd.
Beijing
Hecheng
Nuoxin                2020-3-31     5,000     2018-9-5          2,000   Joint-liability   2 years     No        No
Technology
Co., Ltd.
Beijing
Lingyun
                                                                                          1 month-1
Data                  2020-3-31    90,000     2020-1-1         33,145   Joint-liability               No        No
                                                                                          year
Technology
Co., Ltd.
Beijing
Sunpiestore
                      2020-3-31    70,000     2018-9-5         57,000   Joint-liability   1-2 years   No        No
Technology
Co., Ltd.
Shaanxi Titi
Electronic
                      2020-3-31     3,000     2018-9-5          1,000   Joint-liability   2 years     No        No
Technology
Co., Ltd.
 Total approved line for such                            Total actual amount of such
  guarantees in the Reporting                9,862,800   guarantees in the Reporting                            3,494,494
            Period (B1)                                          Period (B2)

 Total approved line for such                9,862,800   Total actual balance of such                           4,599,123


                                                                                                                      52
        TCL Technology Group Corporation                                                                           Interim Report 2020


 guarantees at the end of the                                         guarantees at the end of the
       Reporting Period (B3)                                             Reporting Period (B4)

                                  Total guarantee amount (total of the three kinds of guarantees above)

Total guarantee line approved                                        Total actual guarantee amount
    in the Reporting Period                           13,484,325        in the Reporting Period                                4,448,850
           (A1+B1+C1)                                                         (A2+B2+C2)
Total approved guarantee line                                        Total actual guarantee balance
  at the end of the Reporting                         13,484,325       at the end of the Reporting                             6,530,382
       Period (A3+B3+C3)                                                    Period (A4+B4+C4)
Total actual guarantee amount (A4+B4+C4) as % of the
                                                                                                                                  217%
Company’s net assets

Of which:

Balance of guarantees provided for shareholders, the actual
                                                                                                                           1,901,632.29
controller and their related parties (D)
Balance of debt guarantees provided directly or indirectly for
                                                                                                                           2,647,178.76
obligors with an over 70% debt/asset ratio (E)
Amount by which the total guarantee amount exceeds 50% of
                                                                                                                           5,024,784.76
the Company’s net assets (F)

Total of the three amounts above (D+E+F)                                                                                   9,573,595.82

Joint liability possibly borne or already borne in the Reporting
                                                                                                                                   N/A
Period for outstanding guarantees (if any)
Guarantees provided in breach of prescribed procedures (if
                                                                                                                                   N/A
any)



Irregularities in Provision of Guarantees
□ Applicable ■ Not applicable
No such cases in the Reporting Period.


3. Cash Entrusted for Wealth Management

                                                                                                                     Unit: RMB’0,000

                                                                                                                Unrecovered overdue
             Type                 Funding source                   Amount                Undue amount
                                                                                                                      amount

        Bank’s wealth
                                   Self-funded                              540,983                   511,433                         -
  management product

 Securities firm’s wealth
                                   Self-funded                              115,000                         -                         -
  management product

          Trust plan               Self-funded                               80,000                    70,000                         -

            Other                  Self-funded                               70,173                    27,996                         -

                         Total                                              806,156                   609,429                         -

High-risk wealth management transactions with a significant single amount, low liquidity and no principal protection:

                                                                                                                                      53
     TCL Technology Group Corporation                                                                                  Interim Report 2020


□ Applicable ■ Not applicable


4. Other Major Contracts

□ Applicable ■ Not applicable
No such cases in the Reporting Period.


XVI Corporate Social Responsibility (CSR)

1. Major Environmental Issues


The Company as the parent is not a major polluter. The subsidiaries in the table below were major
polluters declared by the environmental protection authorities in 2019, and “subsidiaries”
mentioned in this section refer to the following subsidiaries in particular.
                                                  Numbe                                                            Approved
                                                                                           Governing     Total
 Name of the                                       r of     Distribution     Discharge                               total
                    Major           Way of                                                 discharge   discharge                Excessive
 Company or                                       dischar of discharge concentration                               discharge
                   pollutants      discharge                                               standards    (metric                 discharge
  subsidiary                                        ge        outlets         (mg/L)                                (metric
                                                                                            (mg/L)       ton)
                                                  outlets                                                          tons/year)

                                  Intermittentl
                     COD                                                    122.5mg/L      260 mg/L    443.43t     1226.05t       None
                                  y discharged              Northwester
                                       to                   n corner of
                                                    1
  TCL China       Ammonia         Guangming                  the plant
                                                                             7.0 mg/L      30 mg/L       25.3t         /          None
     Star          nitrogen         Sewage                     area
Optoelectroni                        Plant
cs Technology                     Continuousl                Artificial
                     COD                                                     19 mg/L       30 mg/L      32.48t      174.89t       None
   Co., Ltd.                      y discharged              wetland to
                                       to           1       the north of
                  Ammonia
                                  Dongkengsh                 the plant       0.42 mg/L     1.5 mg/L      0.72t        7.7t        None
                   nitrogen
                                       ui                      area

Wuhan China          COD          Intermittentl                             36-75mg/L      400mg/L     114.04t      353.55t       None
                                                            Northwester
     Star                         y discharged
                                                            n corner of
Optoelectroni                      to Zuoling       1
                  Ammonia                                    the plant
cs Technology                       Sewage                                 0.56-1.72mg/L    30mg/L      11.41t      35.36t        None
                   nitrogen                                    area
   Co., Ltd.                         Plant



Construction and operation of facilities for preventing pollution:

During the Reporting Period, no major environmental pollution incidents occurred in either the
Company or any of its subsidiaries. An advanced sewage management system has been established
for each subsidiary, and regular monitoring and supervision and inspection mechanisms have been
                                                                                                                                            54
    TCL Technology Group Corporation                                                   Interim Report 2020



adopted to ensure the emission and disposal of waste water, waste gas, and solid waste and factory
noises generated during the operation are in compliance with the national and local laws and

regulations.

The waste water of each subsidiary company includes domestic waste water and industrial waste
water, of which domestic waste water is discharged into the local municipal sewage treatment pipe
network after being pre-treated by oil separation and septic treatment, and industrial waste water
enters different treatment systems according to its characteristics, and is discharged subjected to the
standards after physical and chemical and biochemical treatment. The atmospheric pollutants
produced by each subsidiary are mainly process waste gases in the production process. For different
types of waste gases, each subsidiary has constructed corresponding waste gas treatment systems,
such as waste gas stripping system, acidic waste gas treatment system, alkaline waste gas treatment
system, organic waste gas treatment system, waste gas treatment system for waste water treatment
station, etc. for the collection of waste gases through pipelines to the corresponding waste gas
treatment system, where waste gases are discharged at a high altitude after meeting relative
standards. The concentration and total amount of waste water and exhaust gas discharged meet the
relevant national and local standards. The solid wastes generated b y each subsidiary include general
waste, hazardous waste and domestic garbage, of which, hazardous wastes are treated by an
entrusted qualified hazardous waste disposal agency according to the regulations; general wastes are
disposed of by a resource recycling firm after being classified in the plant area; while domestic
garbage is disposed of by the property management company by sending the garbage to qualified
landfills. All the disposals meet the regulatory requirements. The factory noise generated by each
subsidiary comes from the mechanical noises of production and power equipment, including
refrigerators, cooling towers, air compressors, fans, various types of pumps, etc.. The Company
reduces the impact of noise on the surrounding environment by the use of low-noise equipment,
vibration reduction, noise reduction, etc., and noise reduction measures such as sound insulation
and sound absorption in the factories and equipment rooms. The monitoring results show that the
factory boundary noise and emission of all subsidiaries meet the standards in a stable manner.

Environmental Impact Assessment on Construction Projects and Other Environme ntal

Protection Administrative Licenses

                                                                                                       55
    TCL Technology Group Corporation                                                    Interim Report 2020



Each subsidiary complies with the laws and regulations of environmental impact assessment on
construction projects and other environmental protection administrative licenses, and no violations

occurred during the Reporting Period.

Emergency Response Plan for Environme ntal Incide nts

Each subsidiary has set up an environmental incident emergency organization led by the senior
management of the enterprise and prepared an environmental emergency response plan, which has
been filed with the local environmental protection department in accordance with relevant national
laws and regulations. In addition, regularly emergency drills are conducted for environmental

incidents according to the plan to ensure the validity of emergency response plan.

Environmental Self-Monitoring Program

Each subsidiary has formulated an environmental self-monitoring program in accordance with
national regulations, and monitors the discharge of pollutants by manual monitoring or manual
monitoring performed by a third-party qualified agency. The monitoring plans and annual
monitoring reports can be checked on the key environmental monitoring information platform

managed by local environmental authorities or subsidiary websites.

Other environme nt-related information that should be disclosed:

None.

Other relevant information:

None.

2. Measures Taken for Targeted Poverty Alleviation

(1) Plans

To respond to the "Opinions of the China Securities Regulatory Commission on the Role of Capital
Markets in Serving the Country in Poverty Alleviation", the Company has been fulfilling its social
responsibilities in poverty alleviation and public service, especially in the field of education poverty
alleviation. The "TCL Hope Engineering Candlelight Awards Program" jointly established by
CYDF and Shenzhen TCL Public Welfare Foundation in 2013 is one of the earliest public welfa re
projects for rural teachers in the country. The investment to this project is over RMB34 million in
six years. The purpose of the award is to demonstrate the morality and professional dreams of

                                                                                                        56
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outstanding rural teachers who have worked hard in the grassroots education front in
poverty-stricken areas for their posts, and encourage more outstanding young teachers to take root

in rural basic education and promote rural education development.

In 2019, Shenzhen TCL Public Welfare Foundation officially launched the “A.I. Go Home” project.
In cooperation with TCL Industrial Technology Research Institute, the Foundation employed
artificial intelligence technology to develop and design a storytelling robot named “Yi Ge” which
can simulate the voices of parents and tell stories to left-behind children and migrant children, thus
strengthening the emotional connections between parents and children. With the help of the robot,
children can hear the voices of their parents more often in the process of growing up, so that mental
health problems and deviant behavior of left-behind children and migrant children caused by the

long-time separation from their parents can be prevented.

Shenzhen TCL Public Welfare Foundation and the Education Foundation of the Central
Conservatory of Music in Beijing jointly set up the “Little Music +” project in 2019 and released
the “Xiao Xue” music robot, with the hope of bringing famous Chinese and foreign music pieces
and appreciations to students who lack music resources, inspiring optimis m in every child with the

power of music, and making music literacy the wealth of a lifetime for every child.

(2) Summary of the Related Work Done in the Reporting Period

In 2020, the original launch of the 7th TCL Hope Project—Candlelight Awards Program was
disrupted by the sudden COVID-19 outbreak. After discussion, we determined that the content of
the project would be adjusted and upgraded. Therefore, Shenzhen TCL Public Welfare Foundation
and the China Youth Development Foundation decided to cancel the 7th TCL Hope

Project—Candlelight Awards Program in 2020.

In the first half of 2020, an online “Yi Ge Chinese Idiom Class” was organized for pilot schools in
rural areas. According to the lesson teaching methods of the pilot primary schools and combined
with the teaching materials used by each grade, the idioms, fables and ancient poems in the “Yi Ge”
storytelling robot were selected as extracurricular and extended learning materials for formal
courses, helping the students to learn knowledge while listening to stories. The project covered ten
classes from the first to sixth grades of 2 schools in 2 provinces, with a total of 586 students. The


                                                                                                      57
     TCL Technology Group Corporation                                                         Interim Report 2020



duration exceeded 1,500 minutes (25 hours).

Meanwhile, project plan adjustments were made due to the epidemic. The originally planned offline
“Little Music Class” was changed to an online activity called “A Song Between Classes”, and the
music in the “Xiao Xue” music robot was used. Without occupying the course time of the teachers
and students, 1 classic song of the world was played online every day between classes, creating a
new break time mode for rural primary schools. In total, applications from 35 schools were received,
but in the end 18 classes of 5 schools (located in 5 counties in Heilongjiang, Henan, Hebei, Yunnan,
and Sichuan, respectively) were chosen to participate in the project, covering 956 students from the

first to sixth grades. The duration exceeded 6,400 minutes (about 107 hours).

(3) Results

                          Indicators                         Measurement Unit   Quantity/Development

I. Overall summary                                                ——                 ——

  Of which: Cash                                               RMB’0,000                                      20

  Poverty alleviation by public programmes                        ——                 ——

              Investment amount in targeted poverty
                                                               RMB’0,000                                      10
alleviation

              Investment amount in public fund for poverty
                                                               RMB’0,000                                      10
alleviation


(4) Subsequent Plans

From 2020, the coverage of the “A.I. Go Home” project will keep expanding. It is expected that 5 to
8 pilot schools will be established in the second half of the year, and that more than 30 classes will
join the “Yi Ge Story Club” and drive the participation of the schools on a class basis. In the
meantime, customized “Yi Ge” storytelling robots will be provided to left-behind children so that
the left-behind children can grow up happily with the company of the robots that can simulate the

voices of their parents.

In 2020, we will continue to expand the coverage of the “Little Music +” project, and establish 5 to
8 partner schools and 30 partner classes. We will also continue the online “A Song Between Classes”
project to provide more children who lack professional music resources with famous Chinese and

foreign music pieces and master appreciations.

                                                                                                              58
    TCL Technology Group Corporation                                                   Interim Report 2020



The Company will expand the existing award scale and publicity impact of the TCL Hope
Project—Candlelight Awards Program, and strengthen interactive communication on the Internet

platform to maintain social attention.

The coverage of the Candlelight Micro-loan Project will be expanded to solve the financial needs of
more rural teachers and improve their lives. This is to ensure the positive development of r ural

education.

XVII Other Significant Events

              Title of announcement             Date of disclosure      Website for disclosure

Announcement on the Completion of a Share
Repurchase and the Corresponding Share          13 January 2020
Changes

Announcement on the Change of the Company
Name with the Industrial and Commercial
                                                7 February 2020
Administration and the Change of the Stock
Name
                                                                       http://www.cninfo.com.cn
Preliminary Plan on the Acquisition of Assets
through Share Offering, Convertible Corporate
                                                  29 April 2020
Bonds Offering and Cash Payment and
Raising the Matching Funds

Announcement on Participating in the Public
Acquisition of the 100% Equity Interests in       24 June 2020
Zhonghuan Group


XVIII Significant Events of Subsidiaries

              Title of announcement             Date of disclosure      Website for disclosure

Announcement on Intending to Increase the
                                                 31 March 2020
Capital in TCL CSOT

Voluntary Announcement on Subsidiary TCL                               http://www.cninfo.com.cn
CSOT and San’an Semiconductor Establishing        8 June 2020
a Joint Lab




                                                                                                       59
     TCL Technology Group Corporation                                                                                   Interim Report 2020




                  Part VI Share Changes and Shareholder Information

I. Share Changes

1. Share Changes

                                                                                                                                     Unit: share

                          Before                Increase/decrease in the Reporting Period (+/-)                             After

                                                                        Shares as
                                                        Shares as       dividend
                                   Percentage New        dividend       converted                                                   Percentage
                     Shares                                                             Other       Subtotal       Shares
                                     (%)      issues converted            from                                                         (%)
                                                        from profit      capital
                                                                        reserves

1. Restricted
                    867,764,980       6.41%         -               -               -   713,455      713,455       868,478,435          6.42%
shares

1.1 Shares held
by state-owned                0       0.00%         -               -               -           0              0               0        0.00%
legal persons

1.2 Shares held
by other
                    777,102,199       5.74%         -               -               -   713,455      713,455       777,815,654          5.75%
domestic
investors

Among which:
Shares held by
                    150,908,441       1.12%         -               -               -           0              0   150,908,441          1.12%
domestic legal
persons

Shares held by
domestic            626,193,758       4.63%         -               -               -   713,455      713,455       626,907,213          4.63%
natural persons

1.3 Shares held
by foreign           90,662,781       0.67%         -               -               -           0              0    90,662,781          0.67%
investors

Among which:
Shares held by
                     90,532,347       0.67%         -               -               -           0              0    90,532,347          0.67%
foreign legal
persons

Shares held by
                        130,434       0.00%         -               -               -           0              0      130,434           0.00%
foreign natural


                                                                                                                                             60
      TCL Technology Group Corporation                                                                            Interim Report 2020


persons

2. Unrestricted
                   12,660,673,739       93.59%         -             -       -   -713,455    -713,455 12,659,960,284          93.58%
shares

2.1
RMB-denomina
                   12,660,673,739       93.59%         -             -       -   -713,455    -713,455 12,659,960,284          93.58%
ted ordinary
shares

3. Total shares    13,528,438,719     100.00%          -             -       -           0           0 13,528,438,719       100.00%

Reasons for share changes:
During the Reporting Period, locked-up shares held by senior management increased by 713,455 restricted shares, as unrestricted
shares decreased by the same number. As such, the total shares of the Company remained unchanged.

Approval of share changes:
□Applicable ■ Not applicable

Transfer of share ownership:
□Applicable ■ Not applicable

Progress on any share repurchase:
■ Applicable □ Not applicable

It is the key operational philosophy and mission of the Company to create value for and grow with the shareholders. In order to

effectively protect shareholders’ interests and enhance shareholder value, the Company convened the 14 th Meeting of the 6th Board of

Directors on 10 January 2019, at which the Proposal on the Repurchase of Certain Public Shares wa s approved. The Report on the

Repurchase of Certain Public Shares was disclosed on 14 February 2019. In view of the trends on the secondary market of stocks, the

Company convened the 15th Meeting of the 6th Board of Directors on 19 March 2019, at which the Proposal on the Adjustment to the

Upper Limit of the Share Repurchase Price. As such, the upper limit of the share repurchase price was adjusted from RMB3.80/s hare

to RMB5.00/share. The Company implemented the share repurchase from 14 February 2019. Up to 10 January 2020, the Company

has cumulatively repurchased 565,333,922 shares (or 4.18% of the Company’s total share capital) in its special securities acc ount for

repurchases by way of centralized bidding, with the highest trading price being RMB4.17/share, the lowest trading price being

RMB3.13/share, and the average trading price being RMB3.42/share. The total transaction amount was RMB1,933.5965 million

(exclusive of trading fees). The share repurchase has been implemented in a process in compliance with the applicable regulations

including the Specific Rules of the Shenzhen Stock Exchange for Share Repurchase by Listed Companies. The actual number of

shares repurchased, repurchase price and amount used were in compliance with the repurchase plan approve d at the 14th Meeting of

the 6th Board of Directors, with no difference with the disclosed Report on Share Repurchase. As such, the Company has completed

the share repurchase as per the repurchase plan that it disclosed.

Progress on reducing the repurchas ed shares by means of centralized bidding:
□ Applicable ■ Not applicable



                                                                                                                                    61
     TCL Technology Group Corporation                                                                                 Interim Report 2020


Effects of share changes on the basic earnings per share, diluted earnings per share, equity per share attributable to the
Company’s ordinary shareholders and other financial indicators of the prior year and the prior accounting period,
respectively:
□ Applicable ■ Not applicable

Other information that the Company considers necessary or is required by the securities regulato r to be disclosed:
□ Applicable ■ Not applicable


2. Changes in Restricted Shares

                                                                                                                              Unit: share

                         Beginning
                                          Unlocked in       Increase in       Ending restricted      Reason for
    Shareholder          restricted                                                                                   Date of unlocking
                                        Reporting Period Reporting Period          shares             restriction
                           shares

                                                                                                  Restricted shares
Star Century
                           90,532,347                   -                 -         90,532,347 in a share             2020-12-25
Enterprises Limited
                                                                                                  offering

Duilong Xinglan
Venture Investment
                                                                                                  Restricted shares
Management
                           42,521,163                   -                 -         42,521,163 in a share             2020-12-25
Partnership
                                                                                                  offering
(Limited
Partnership)

Duilong Xingyong
Venture Investment
                                                                                                  Restricted shares
Management
                           38,380,684                   -                 -         38,380,684 in a share             2020-12-25
Partnership
                                                                                                  offering
(Limited
Partnership)

Duilong Xingyuan
Venture Investment
                                                                                                  Restricted shares
Management
                           37,695,315                   -                 -         37,695,315 in a share             2020-12-25
Partnership
                                                                                                  offering
(Limited
Partnership)

Duilong Xinglian
Venture Investment
                                                                                                  Restricted shares
Management
                           32,311,279                   -                 -         32,311,279 in a share             2020-12-25
Partnership
                                                                                                  offering
(Limited
Partnership)

                                                                                                  Locked-up shares
Other                    615,667,627                    -         713,455          616,381,082                        9999-99-99
                                                                                                  of senior


                                                                                                                                      62
       TCL Technology Group Corporation                                                                                             Interim Report 2020


                                                                                                              management

2018 Restricted                                                                                               Restricted shares
Stock Incentive                 6,780,952                    -                       -              6,780,952 granted as             2020-5-16
Plan                                                                                                          incentives

2019 Restricted                                                                                               Restricted shares
Stock Incentive                 3,875,613                    -                       -              3,875,613 granted as             2020-6-26
Plan                                                                                                          incentives

Total                         867,764,980                    -                 713,455        868,478,435               --                   --


II Issuance and Listing of Securities

  Name of
                                   Issue price                                           Number          Termination          Index to
stock and its                                       Issued                                                                                    Date of
                   Issue date      (or interest                     Listing date     approved for          date of            disclosed
  derivative                                        number                                                                                  disclosure
                                      rate)                                         public trading transaction               information
  securities

Type: convertible corporate bonds, convertible corporate bonds with warrants, corporate bonds

Corporate                                                                                                               http://www.cninf
                2020-6-8                     2.5%   10,000,000         2020-6-16         10,000,000       2020-12-04                        2020-6-8
bonds                                                                                                                   o.com.cn


III Shareholders and Their Shareholdings at the End of the Reporting Period

                                                                                                                                             Unit: share

                                                                            Number of preference
Number of ordinary                                                          shareholders with resumed
                                                                 522,933                                                                                0
shareholders at the period-end                                              voting rights at the period-end
                                                                            (if any) (see note 8)

                                    5% or greater ordinary shareholders or top 10 ordinary shareholders

                                   Shareh                                                                              Shares in pledge or frozen
                                                             Increase/decre
                                    olding Total ordinary                          Restricted       Unrestricted
    Name of          Nature of                                    ase in the
                                   percen shares held at                           ordinary           ordinary
  shareholder       shareholder                                  Reporting                                               Status            Shares
                                    tage the period-end                           shares held        shares held
                                                                   Period
                                     (%)

                                                                                                                     Put in pledge
                   Domestic
Li Dongsheng                                                                                                             by Li             275,000,000
                   natural
and his                                                                                                              Dongsheng
                   person/gener       8.56 1,158,599,393          -63,148,616 610,181,602            548,417,791
acting-in-concer                                                                                                     Put in pledge
                   al legal
t party                                                                                                                by Jiutian          344,899,521
                   person
                                                                                                                       Liancheng

Huizhou            State-owned
                                      5.49     743,139,840       -135,279,907                   -    743,139,840                     -                  -
Investment         legal person



                                                                                                                                                        63
       TCL Technology Group Corporation                                                              Interim Report 2020


Holding Co.,
Ltd.

Hong Kong
Securities         Foreign
                                     3.19    431,613,255    78,123,401             -   431,613,255   -                -
Clearing           legal person
Company Ltd.

Tibet Tianfeng
                   Domestic
Enterprise
                   general legal     3.08    417,344,415   -108,751,227            -   417,344,415   -                -
Management
                   person
Co., Ltd.

China Securities
                   Domestic
Finance
                   general legal     2.76    373,231,553              -            -   373,231,553   -                -
Corporation
                   person
Limited

Central Huijin
Asset              State-owned
                                     1.53    206,456,500              -            -   206,456,500   -                -
Management         legal person
Co., Ltd.

National Social Fund,
Security           wealth
                                     0.95    128,080,487    75,080,487             -   128,080,487   -                -
Fund-Portfolio management
601                product, etc.

Perseverance
Asset
Management         Fund,
L.L.P.-           wealth
                                     0.74    100,000,000    40,000,000             -   100,000,000   -                -
Perseverance       management
Linshan            product, etc.
Yuanwang Fund
No. 1

Industrial and
Commercial
                   Fund,
Bank of China
                   wealth
-E Fund                             0.73     99,184,547    99,184,547             -    99,184,547   -                -
                   management
Research
                   product, etc.
Selected Stock
Fund

Star Century
                   Foreign
Enterprises                          0.67     90,532,347              -   90,532,347             -   -                -
                   legal person
Limited

Strategic investor or general
                                   Not applicable
legal person becoming a

                                                                                                                     64
     TCL Technology Group Corporation                                                                                    Interim Report 2020


top-10 ordinary shareholder
in a rights issue (if any) (see
note 3)

                                  Being acting-in-concert parties upon the signing of the Agreement on Acting in Concert, Mr. Li
                                  Dongsheng and Xinjiang Jiutian Liancheng Equity Investment Partnership (Limited Partnership)
                                  (hereinafter referred to as “Jiutian Liancheng”) are the biggest shareholder of the Company with a
                                  total of 1,158.5994 million shares. As certain partners of Jiutian Liancheng have quit from the
                                  company and as requested by these partners, the meeting of partners of Jiutian Liancheng has
                                  resolved to reduce shareholdings in the Company corresponding to the shares of these partners in the
                                  partnership. And these partners would withdraw from the partnership. On 27 February 2020, Jiutian
                                  Liancheng reduced its holdings of 63.876 million shares, accounting for 0.5% of the Company’s
Related or acting-in-concert      total share capital, through bulk trading. This shareholding reduction is in compliance with the
parties among the                 Several Provisions on the Reduction of Shares Held in a Listed Company by the Shareholders,
shareholders above                Directors, Supervisors and Senior Management of the Listed Company. With confidence in the
                                  future development of the Company, Mr. Li Dongsheng and the incumbent senior management of
                                  the Company do not reduce their direct or indirect shareholdings in the Company. On 28 April 2020,
                                  They had also undertaken not to reduce their shareholdings in the Company during the period, from
                                  the date when announced the resolutions of the first Board meeting, which convened to review the
                                  plan that acquire the 39.95% interest held by Wuhan Optics Valley Industrial Investment Co., Ltd. in
                                  Wuhan China Star Optoelectronics Technology Co., Ltd. through share offering, convertible
                                  corporate bonds offering and cash payment and raise the matching funds (hereinafter referred to as
                                  the “Transaction”), to the date of the completion/termination of the Transaction.

                                                Top 10 unrestricted ordinary shareholders

                                                                                                               Shares by class
     Name of shareholder                Unrestricted ordinary shares held at the period-end
                                                                                                          Class               Shares

Huizhou Investment Holding                                                                          RMB-denominate
                                                                                      743,139,840                              743,139,840
Co., Ltd.                                                                                            d ordinary shares

Li Dongsheng and his                                                                                RMB-denominate
                                                                                      548,417,791                              548,417,791
acting-in-concert party                                                                              d ordinary shares

Hong Kong Securities                                                                                RMB-denominate
                                                                                      431,613,255                              431,613,255
Clearing Company Ltd.                                                                                d ordinary shares

Tibet Tianfeng Enterprise                                                                           RMB-denominate
                                                                                      417,344,415                              417,344,415
Management Co., Ltd.                                                                                 d ordinary shares

China Securities Finance                                                                            RMB-denominate
                                                                                      373,231,553                              373,231,553
Corporation Limited                                                                                  d ordinary shares

Central Huijin Asset                                                                                RMB-denominate
                                                                                      206,456,500                              206,456,500
Management Co., Ltd.                                                                                 d ordinary shares

National Social Security                                                                            RMB-denominate
                                                                                      128,080,487                              128,080,487
Fund-Portfolio 601                                                                                   d ordinary shares

Perseverance Asset                                                                                  RMB-denominate
                                                                                      100,000,000                              100,000,000
Management L.L.P.-                                                                                  d ordinary shares


                                                                                                                                         65
     TCL Technology Group Corporation                                                                                    Interim Report 2020


Perseverance Linshan
Yuanwang Fund No. 1

Industrial and Commercial
Bank of China-E Fund                                                                               RMB-denominate
                                                                                       99,184,547                               99,184,547
Research Selected Stock                                                                              d ordinary shares
Fund

Huizhou Investment and                                                                              RMB-denominate
                                                                                       75,504,587                               75,504,587
Development Co., Ltd.                                                                                d ordinary shares

                                  Being acting-in-concert parties upon the signing of the Agreement on Acting in Concert, Mr. Li
                                  Dongsheng and Xinjiang Jiutian Liancheng Equity Investment Partnership (Limited Partnership)
                                  (hereinafter referred to as “Jiutian Liancheng”) are the biggest shareholder of the Company with a
                                  total of 1,158.5994 million shares. As certain partners of Jiutian Liancheng have quit from the
                                  company and as requested by these partners, the meeting of partners of Jiutian Liancheng has
                                  resolved to reduce shareholdings in the Company corresponding to the shares of these partners in the
Related or acting-in-concert      partnership. And these partners would withdraw from the partnership. On 27 February 2020, Jiutian
parties among top 10              Liancheng reduced its holdings of 63.876 million shares, accounting for 0.5% of the Company’s
unrestricted ordinary             total share capital, through bulk trading. This shareholding reduction is in compliance with the
shareholders, as well as          Several Provisions on the Reduction of Shares Held in a Listed Company by the Shareholders,
between top 10 unrestricted       Directors, Supervisors and Senior Management of the Listed Company. With confidence in the
ordinary shareholders and top future development of the Company, Mr. Li Dongsheng and the incumbent senior management of
10 ordinary shareholders          the Company do not reduce their direct or indirect shareholdings in the Company. On 28 April 2020,
                                  They had also undertaken not to reduce their shareholdings in the Company during the period, from
                                  the date when announced the resolutions of the first Board meeting, which convened to review the
                                  plan that acquire the 39.95% interest held by Wuhan Optics Valley Industrial Investment Co., Ltd. in
                                  Wuhan China Star Optoelectronics Technology Co., Ltd. through share offering, convertible
                                  corporate bonds offering and cash payment and raise the matching funds (hereinafter referred to as
                                  the “Transaction”), to the date of the completion/termination of the Transaction.

Top 10 ordinary shareholders
involved in securities margin None
trading (if any) (see note 4)

Indicate whether any of the top 10 ordinary shareholders or the top 10 unrestricted ordinary shareholders of the Company
conducted any promissory repo during the Reporting Period.
□ Yes ■ No
No such cases in the Reporting Period.


IV Change of the Controlling Shareholder or the Actual Controller

□ Applicable ■ Not applicable




                                                                                                                                         66
     TCL Technology Group Corporation                                                                         Interim Report 2020




                Part VII Directors, Supervisors and Senior Management

I Change in Shareholdings of Directors, Supervisors and Senior Management

□ Applicable ■ Not applicable
No changes occurred to the shareholdings of the directors, supervisors and senior management in the Reporting Period. See the 2019
Annual Report for more details.


II Change of Directors, Supervisors and Senior Manage ment

□ Applicable ■ Not applicable
No changes occurred to the directors, supervisors and senior management in the Reporting Period. See the 2019 Annual Report for
more details.




                                                                                                                               67
      TCL Technology Group Corporation                                                               Interim Report 2020




                                       Part VIII Corporate Bonds

General Information of Corporate Bonds

                                                                                                             Way of
                                                                            Outstanding                     principal
  Bond name         Abbr.       Bond code     Value date       Maturity       balance      Coupon rate   repayment and
                                                                            (RMB’0,000)                     interest
                                                                                                            payment

TCL
Corporation’s
                                                                                                         Interest
Corporate
                                                                                                         payable
Bonds Publicly
                                                                                                         annually and
Offered in
                 16TCL02      112353        16 March 2016 16 March 2021          150,000         3.56% principal
2016 to
                                                                                                         repayable in
Qualified
                                                                                                         full upon
Investors
                                                                                                         maturity
(Tranche 1)
(Type 2)

TCL
Corporation’s                                                                                           Interest
Corporate                                                                                                payable
Bonds Publicly                                                                                           annually and
Offered in       16TCL03      112409        7 July 2016     7 July 2021          200,000         3.50% principal
2016 to                                                                                                  repayable in
Qualified                                                                                                full upon
Investors                                                                                                maturity
(Tranche 2)

TCL
Corporation’s                                                                                           Interest
Corporate                                                                                                payable
Bonds Publicly                                                                                           annually and
Offered in       17TCL01      112518        19 April 2017   19 April 2022        100,000         3.40% principal
2017 to                                                                                                  repayable in
Qualified                                                                                                full upon
Investors                                                                                                maturity
(Tranche 1)

TCL                                                                                                      Interest
Corporation’s   17TCL02      112542        7 July 2017     7 July 2022          300,000         4.93% payable
Corporate                                                                                                annually and



                                                                                                                        68
      TCL Technology Group Corporation                                              Interim Report 2020


Bonds Publicly                                                                         principal
Offered in                                                                             repayable in
2017 to                                                                                full upon
Qualified                                                                              maturity
Investors
(Tranche 2)

TCL
Corporation’s                                                                         Interest
Corporate                                                                              payable
Bonds Publicly                                                                         annually and
Offered in       18TCL01      112717     6 June 2018    6 June 2023    100,000   5.48% principal
2018 to                                                                                repayable in
Qualified                                                                              full upon
Investors                                                                              maturity
(Tranche 1)

TCL
Corporation’s                                                                         Interest
Corporate                                                                              payable
Bonds Publicly                                                                         annually and
                                         20 August      20 August
Offered in       18TCL02      112747                                   200,000   5.30% principal
                                         2018           2023
2018 to                                                                                repayable in
Qualified                                                                              full upon
Investors                                                                              maturity
(Tranche 2)

TCL
Corporation’s                                                                         Interest
Corporate                                                                              payable
Bonds Publicly                                                                         annually and
Offered in       19TCL01      112905     20 May 2019    20 May 2024    100,000   4.33% principal
2019 to                                                                                repayable in
Qualified                                                                              full upon
Investors                                                                              maturity
(Tranche 1)

TCL
Corporation’s                                                                         Interest
Corporate                                                                              payable
Bonds Publicly                                                                         annually and
Offered in       19TCL02      112938     23 July 2019   23 July 2024   100,000   4.30% principal
2019 to                                                                                repayable in
Qualified                                                                              full upon
Investors                                                                              maturity
(Tranche 2)

TCL              19TCL03      112983     21 October     21 October     200,000   4.20% Interest


                                                                                                      69
      TCL Technology Group Corporation                                                                                 Interim Report 2020


Corporation’s                                       2019             2024                                                 payable
Corporate                                                                                                                  annually and
Bonds Publicly                                                                                                             principal
Offered in                                                                                                                 repayable in
2019 to                                                                                                                    full upon
Qualified                                                                                                                  maturity
Investors
(Tranche 3)

TCL
Technology
Group
Corporation’s
                                                                                                                           Principal
Short-Term
                                                                                                                           repayable in
Corporate                                                             5 December
                  20TCLD1           149140           8 June 2020                                100,000            2.50% full upon
Bonds Publicly                                                        2020
                                                                                                                           maturity with
Offered in
                                                                                                                           interest
2020 to
Professional
Investors
(Tranche 1)

Place for bond listing and
                                    Shenzhen Stock Exchange
trading

                                    These bonds are for qualified investors only (20TCLD1 were offered after the new Securities Law
Investor eligibility
                                    and are for professional investors only).

                                    1. The interest for the period from 16 March 2019 to 15 March 2020 on “16TCL02” was paid on
                                    16 March 2020.
                                    2. The interest for the period from 19 April 2019 to 18 April 2020 on “17TCL01” was paid on 20
Interest payment and principal
                                    April 2020.
repayment during the Reporting
                                    3. The interest for the period from 20 May 2019 to 19 April 2020 on “19TCL01” was paid on 20
Period
                                    May 2020.
                                    4. The interest for the period from 6 June 2019 to 5 June 2020 on “18TCL01” was paid on 8 June
                                    2020.

                                    1. TCL Corporation’s Corporate Bonds Publicly Offered in 2017 to Qualified Investors (Tranche
                                    1) is of a five-year term, with the issuer’s coupon rate adjustment option and the investors’
Where the bond carries any
                                    sell-back option at the end of the third year. During the Reporting Period, the issuer exercised its
issuer or investor option clause,
                                    coupon rate adjustment option to adjust the coupon rate for the period from 19 April 2020 to 18
interchangeable clause or other
                                    April 2020 to 3.40% subsequent to a coupon rate of 4.80% for the period from 19 April 2017 to 18
special clauses, give the
                                    April 2020; investors exercised their sell-back option and the Company paid the principals of
execution details (if applicable)
                                    RMB403,000,200 on 20 April 2020; and the sold-back bonds have all been resold, with an actual
of these clauses during the
                                    sell-back amount of RMB0 and a currently outstanding amount of RMB1 billion.
Reporting Period

                                    2. TCL Corporation’s Corporate Bonds Publicly Offered in 2017 to Qualified Investors (Tranche


                                                                                                                                           70
TCL Technology Group Corporation                                                                             Interim Report 2020


                        2) is of a five-year term, with the issuer’s coupon rate adjustment option and the investors’
                        sell-back option at the end of the third year. During the Reporting Period, the issuer exercised its
                        coupon rate adjustment option to adjust the coupon rate for the period from 7 July 2020 to 6 July
                        2020 to 3.45% subsequent to a coupon rate of 4.93% for the period from 7 July 2017 to 6 July
                        2020; investors exercised their sell-back option and the Company paid the principals of
                        RMB2.843 billion on 7 July 2020; and the Company is reselling the sold-back bonds in
                        accordance with applicable regulations, and the number of bonds planned to be reso ld will not
                        exceeds 28,430,000.


                        3. TCL Corporation’s Corporate Bonds Publicly Offered in 2018 to Qualified Investors (Tranche
                        1) is of a five-year term, with the issuer’s coupon rate adjustment option and the investors’
                        sell-back option at the end of the third year. The interest payment day is June 6 from 2019 to 2023
                        (the subsequent first trading day if it is a statutory holiday or rest day, with no additional interest
                        for the postponement). If an investor chooses to exercise the sell-back option, the interest payment
                        day for the sold-back bonds is June 6 from 2019 to 2021 (the subsequent first trading day if it is a
                        statutory holiday or rest day, with no additional interest for the postponement).


                        4. TCL Corporation’s Corporate Bonds Publicly Offered in 2018 to Qualified Investors (Tranche
                        2) is of a five-year term, with the issuer’s coupon rate adjustment option and the investors’
                        sell-back option at the end of the third year. The interest payment day is August 20 from 2019 to
                        2023 (the subsequent first trading day if it is a statutory holiday or rest day, with no additional
                        interest for the postponement). If an investor chooses to exercise the sell-back option, the interest
                        payment day for the sold-back bonds is August 20 from 2019 to 2021 (the subsequent first trading
                        day if it is a statutory holiday or rest day, with no additional interest for the postponement).


                        5. TCL Corporation’s Corporate Bonds Publicly Offered in 2019 to Qualified Investors (Tranche
                        1) is of a five-year term, with the issuer’s coupon rate adjustment option and the investors’
                        sell-back option at the end of the third year. The interest payment day is May 20 from 2020 to
                        2024 (the subsequent first trading day if it is a statutory holiday or rest day, with no additional
                        interest for the postponement). If an investor chooses to exercise the sell-back option, the interest
                        payment day for the sold-back bonds is May 20 from 2020 to 2022 (the subsequent first trading
                        day if it is a statutory holiday or rest day, with no additional interest for the postponement).


                        6. TCL Corporation’s Corporate Bonds Publicly Offered in 2019 to Qualified Investors (Tranche
                        2) is of a five-year term, with the issuer’s coupon rate adjustment option and the investors’
                        sell-back option at the end of the third year. The interest payment day is July 23 from 2020 to
                        2024 (the subsequent first trading day if it is a statutory holiday or rest day, with no additional
                        interest for the postponement). If an investor chooses to exercise the sell-back option, the interest
                        payment day for the sold-back bonds is July 23 from 2020 to 2022 (the subsequent first trading
                        day if it is a statutory holiday or rest day, with no additional interest for the postponement).


                        7. TCL Corporation’s Corporate Bonds Publicly Offered in 2019 to Qualified Investors (Tranche
                        3) is of a five-year term, with the issuer’s coupon rate adjustment option and the investors’


                                                                                                                                  71
     TCL Technology Group Corporation                                                                                 Interim Report 2020


                                  sell-back option at the end of the third year. The interest payment day is October 21 from 2020 to
                                  2024 (the subsequent first trading day if it is a statutory holiday or rest day, with no additional
                                  interest for the postponement). If an investor chooses to exercise the sell-back option, the interest
                                  payment day for the sold-back bonds is October 21 from 2020 to 2022 (the subsequent first
                                  trading day if it is a statutory holiday or rest day, with no additional interest for the postponement).


Bond Trustee and Credit Rating Agency

Bond trustee:

                                                   33/F, Bohua
                  Guotai Junan
                                                   Plaza, 669
Name              Securities Co., Office address                     Contact person Wu Lei              Tel.             021-38676503
                                                   Xinzha Road,
                  Ltd.
                                                   Shanghai

                                                   22/F, CITIC
                                                   Securities
                                                   Plaza, 48
                  CITIC
                                                   Liangmaqiao                        Deng
Name              Securities Co., Office address                     Contact person                     Tel.             010-60838888
                                                   Road,                              Xiaoqiang
                  Ltd.
                                                   Chaoyang
                                                   District,
                                                   Beijing

Credit rating agency which conducted follow-up ratings for bonds during Reporting Period:

                                                                                      Room 968, Tower 1, 599 Xinye Road, Qingpu
Name              China Chengxin Securities Rating Co., Ltd.         Office address
                                                                                      District, Shanghai

Where the bond trustee or credit rating
agency was changed during the Reporting
Period, explain the reasons, the executed    Not applicable
procedures, the impact on investors’
interests, etc. (if applicable)


Utilization of Funds Raised through Corporate Bonds

                                             The raised funds were used to supplement the working capital and repay debt, which is
Utilization of funds raised through          in strict compliance with the prospectus. And with the authorization of the Board and
corporate bonds and procedures executed      the general meeting, the related internal decision-making procedure was executed
                                             according to the relevant rules approved by the Board and the general meeting.

Ending balance (RMB’0,000)                                                                                                               0

                                             The Company has signed the Escrow Account Agreement for the Funds Raised through
                                             TCL Corporation’s Corporate Bonds Publicly Offered in 2015 to Qualified Investors,
Operation of special account for raised
                                             the Escrow Account Agreement for the Funds Raised through TCL Corporation’s
funds
                                             Corporate Bonds Publicly Offered in 2017 to Qualified Investors (Tranche 1), the
                                             Escrow Account Agreement for the Funds Raised through TCL Corporation’s


                                                                                                                                          72
     TCL Technology Group Corporation                                                                               Interim Report 2020


                                                Corporate Bonds Publicly Offered in 2017 to Qualified Investors (Tranche 2), the
                                                Escrow Account Agreement for the Funds Raised through TCL Corporation’s
                                                Corporate Bonds Publicly Offered in 2018 to Qualified Investors (Tranche 1), the
                                                Escrow Account Agreement for the Funds Raised through TCL Corporation’s
                                                Corporate Bonds Publicly Offered in 2018 to Qualified Investors (Tranche 2), the
                                                Escrow Account Agreement for the Funds Raised through TCL Corporation’s
                                                Corporate Bonds Publicly Offered in 2019 to Qualified Investors (Tranche 1), the
                                                Escrow Account Agreement for the Funds Raised through TCL Corporation’s
                                                Corporate Bonds Publicly Offered in 2019 to Qualified Investors (Tranche 2) , the
                                                Escrow Account Agreement for the Funds Raised through TCL Corporation’s
                                                Corporate Bonds Publicly Offered in 2019 to Qualified Investors (Tranche 3), and the
                                                Escrow Account Agreement for the Funds Raised through TCL Technology Group
                                                Corporation’s Short-Term Corporate Bonds Publicly Offered in 2020 to Professional
                                                Investors (Tranche 1) with China Development Bank (Guangdong branch) to ensure
                                                that the raised funds will be used as earmarked.

Whether the utilization of raised funds is in
line with the promised usages, utilization      Yes
plan or other promises in the prospectus


Rating Results of Corporate Bonds

According to the Follow-up Rating Report (2020) on TCL Technology Group Corporation’s
Corporate Bonds Publicly Offered in 2016 to Qualified Investors (Tranches 1 and 2) issued by
China Chengxin Securities Rating Co., Ltd. on 27 May 2020, the AAA credit status of TCL

Corporation and the said bonds was affirmed with a “Stable” outlook.

According to the Follow-up Rating Report (2020) on TCL Technology Group Corporation’s
Corporate Bonds Publicly Offered in 2017 to Qualified Investors (Tranches 1 and 2) and on TCL
Technology Group Corporation’s Corporate Bonds Publicly Offered in 2018 to Qualified Investors
(Tranches 1 and 2) issued by China Chengxin Securities Rating Co., Ltd. on 27 May 2020, the AAA

credit status of TCL Corporation and the said bonds was affirmed with a “Stable” outlook.

According to the Credit Rating Report on TCL Technology Group Corporation’s Corporate Bonds
Publicly Offered in 2019 to Qualified Investors (Tranches 1, 2 and 3) issued by China Chengxin
Securities Rating Co., Ltd. on 28 May 2020, the AAA credit status of TCL Corporation and the said

bonds was affirmed with a “Stable” outlook.




                                                                                                                                       73
    TCL Technology Group Corporation                                                   Interim Report 2020


Credit Enhance ment, Repayment Plans and Other Repayme nt Guarantee Measures

No credit enhancement measures were taken for the Company’s bonds during the Reporting Period.

The capital for principal repayment and interest payment for the Company’s bonds is primarily
sourced from the revenue, net profit and cash flows arising from its ordinary course of business.
The repayment guarantee measures include a specialized task group, a strict capital management
plan, a bond trustee, the Rules for Bondholders’ Meetings, strict information disclosure, and an
undertaking to not distribute profits to shareholders, as well as suspend capital expenditures such as
major investments in external parties and mergers and acquisitions where the Company fails to, or

expectedly fails to, repay the principal and pay the interest on any bonds on time.

The Company’s credit enhancement mechanism, repayment plans and other repayment guarantee

measures remained unchanged during the Reporting Period.

Meetings of Bondholders Convened during Reporting Period

No such cases in the Reporting Period.

Performance of Duties by Bond Trustee during Reporting Period

As the trustee of the “16TCL02”, “16TCL03”, “17TCL01”, “17TCL02”, “18TCL01”, “18TCL02”,
“19TCL01” and “20TCLD1” bonds, Guotai Junan Securities Co., Ltd., in strict accordance with the
applicable laws and regulations including the Measures for the Issue and Trading of Corporate
Bonds and the Professional Code of Conduct for Corporate Bond Trustees, keeps a close eye on the
Company’s operating, financial and credit conditions to fulfill its duties as a bond trustee and
protect the legal rights and interests of the bondholders. And the bond trustee has no conflicts of

interests in any kind with the Company.

As the trustee of the “19TCL02” and “19TCL03” bonds, CITIC Securities Co., Ltd., in strict
accordance with the applicable laws and regulations including the Measures for the Issue and
Trading of Corporate Bonds and the Professional Code of Conduct for Corporate Bond Trustees,
keeps a close eye on the Company’s operating, financial and credit conditions to fulfill its duties as
a bond trustee and protect the legal rights and interests of the bondholders. And the bond trustee has

no conflicts of interests in any kind with the Company.


                                                                                                       74
      TCL Technology Group Corporation                                                                               Interim Report 2020


Relevant Financial Information of the Company as at the End of the Reporting Period or the
End of Last year (or the Reporting Period or the Same Period of Last Year)

                  Item                              30 June 2020                31 December 2019                  Change (%)

Current ratio                                                       1.13                           1.12                          0.94%

Debt/asset ratio (%)                                               64.89                        61.25                              3.64

Quick ratio                                                         0.87                           0.85                          2.25%

                                                      H1 2020                       H1 2019                       Change (%)

EBITDA-to-interest cover (times)                                    3.93                         5.66                          -30.57%

Debt repayment ratio (%)                                            100                            100                             0.00

Interest payment ratio (%)                                          100                            100                             0.00

Explanation of why any financial indicator in the table above registered a year-on-year change of over 30%:

It’s primarily driven by the year-on-year decrease in profit.


Overdue Amounts

□ Applicable ■ Not applicable
No such cases.


Principal Repayme nt and Interest Payment of Other Bonds and Debt Financing Instruments
during the Reporting Period

                                       Principal amount                                                           Principal repayment and
No.           Bond abbreviation                                    Issue date        Maturity      Coupon rate
                                      (RMB’00,000,000)                                                               interest payment
 1      15TCL-MTN001                            5                   2015-4-1          5 years             5.50%   Repaid in full on time


Credit Lines Granted by Banks, as well as Their Utilization and Repayment during the
Reporting Period

The Company operates in compliance, with a fine credit reputation, strong profitability and a great
ability to repay debt. Additionally, it maintains a long-term partnership with the China Development
Bank, The Export-Import Bank of China, the Industrial and Commercial Bank of China, etc. As at
30 June 2020, the credit lines granted by the major bank partners to the Company totaled
RMB216.6 billion, with RMB77.2 billion utilized and RMB139.4 billion left. During the Reporting

Period, there were no defaults on bank loans.




                                                                                                                                         75
     TCL Technology Group Corporation                                                                            Interim Report 2020


Fulfillme nt of Commitme nts Made in Bond Prospectuses during Reporting Period

Up to the date of the approval of this Report for issue, the Company has been executing all the
commitments given in its bond prospectuses, without any negative impact on the investors caused

by the Company’s weak execution of such commitments.

Significant Events during the Reporting Period

□ Applicable ■ Not applicable


Guarantor for Corporate Bonds

□ Yes  No

Indicate whether the guarantor is a legal person or other organization.
□ Yes  No
Indicate whether the financial statements of the guarantor (including the balance sheet, the income statement, the cash flow statement,
and the statement of changes in owners’/shareholders’ equity) for the reporting period are disclosed separately within two months
when every accounting year ends.

□ Yes ■ No




                                                                                                                                   76
TCL Technology Group Corporation                                       Interim Report 2020



                   TCL Technology Group Corporation

                      Unaudited Financial Statements
                     (For the period from 1 January 2020 to 30 June 2020)




                                   Contents                                      Page
I           Unaudited Financial Statements

            1. Co n so lid ated Balan ce Sh eet                                  1- 2

            2. Co n so lid ated In come Statemen t                                 3

            3. Co n so lid ated Cash Flo w Statemen t                            4- 5
            4. Co n so lid ated Statemen t of Ch an ges
                                                                                  6- 7
            in Sh ar eho ld er s’ Equ ity
            5. Balan ce Sh eet of th e Comp an y as th e
                                                                                  8- 9
            Par en t
            6. In co me Statemen t of th e Co mp an y as
                                                                                   10
            th e Par en t
            7.Cash Flo w Statemen t o f th e Co mp an y
                                                                                11- 12
            as th e Par en t
            8. Statemen t o f Ch an ges in
            Sh ar eho ld er s’ Eq u ity of th e Co mp an y as                  13- 14
            th e Par en t
            9. No tes to Fin an cial Statemen ts                              15- 144




                                                                                        78
                                        TCL Technology Group Corporation
                                           Consolidated Balance Sheet
                                                  (RMB’000)

Assets:                                           Note V                     30 June 2020       31 December 2019

Current assets:
  Monetary assets                                    1                        21,542,628             18,648,185
    Held-for-trading financial assets                2                         8,989,331              6,074,751
    Derivative financial assets                      3                           187,212                159,036
    Notes receivable                                 4                            26,133                228,942
    Accounts receivable                              5                         9,730,784              8,340,354
    Receivables financing                            6                           106,755                       -
    Prepayments                                      7                           694,616                364,423
    Other receivables                                8                         5,084,046              2,750,042
    Inventories                                      9                         5,541,418              5,677,963
    Other current assets                             10                        8,080,115              5,911,827

Total current assets                                                          59,983,038             48,155,523


Non-current assets:
    Loans and advances to customers                  11                        1,941,271              3,637,768
    Debt investments                                 12                           20,116                 20,373
   Long-term equity investments                      13                       18,606,252             17,194,284
   Investments in other equity
                                                     14                          270,923                279,884
instruments
   Other non-current financial assets                15                        2,676,086              2,542,689
    Investment property                              16                        1,163,697                 82,273
    Fixed assets                                     17                       59,857,478             45,459,070
    Construction in progress                         18                       21,017,402             33,578,290
    Intangible assets                                19                        6,378,500              5,684,584
    Development costs                                20                          895,325              1,548,471
    Goodwill                                         21                            2,452                  2,452
    Long-term prepaid expense                        22                        2,073,741              1,567,691
    Deferred income tax assets                       23                          860,601                840,874
    Other non-current assets                         24                        9,086,352              4,250,659


Total non-current assets                                                     124,850,196            116,689,362

Total assets                                                                 184,833,234            164,844,885

                                                                                  Person-in-ch
                                          Person-in-charge                        arge of the
Legal                                     of financial                            financial
representative:      Li Dongsheng         affairs:               Du Juan         department:       Xi Wenbo
The attached notes to the financial statements form an integral part of the financial statements.




                                                          1
                                          TCL Technology Group Corporation
                                         Consolidated Balance Sheet (Continued)
                                                      (RMB’000)
Liabilities and shareholders’ equity:                  Note V                      30 June 2020          31 December 2019

Current liabilities:
   Short-term borrowings                                   25                         16,491,171                 12,069,657
   Borrowings from central bank                            26                           1,404,722                  573,222
   Customer deposits and deposits from
                                                           27                           3,617,529                 1,355,129
other banks and financial institutions
   Loans from other banks and financial                                                  500,000                           -
                                                           28
institutions
   Held-for-trading financial liabilities                  29                             403,530                  188,220
   Derivative financial liabilities                        30                             156,664                    84,705
   Notes payable                                           31                           2,293,907                 1,720,402
   Accounts payable                                        32                          11,436,883                11,549,133
   Advances from customers                                 33                               2,155                  141,749
   Contract liabilities                                    34                            231,497                           -
  Financial assets sold under repurchase                   35                              50,073                          -
agreements
   Employee benefits payable                               36                             821,672                 1,094,217
   Taxes and levies payable                                37                             260,209                  226,806
   Other payables                                          38                         12,315,818                 12,293,566
   Current portion of non-current liabilities              39                           3,092,394                 1,691,963
   Other current liabilities                               40                             108,656                    69,022
Total current liabilities                                                             53,186,880                 43,057,791
Non-current liabilities
   Long-term borrowings                                    41                          46,145,998                38,512,059
   Bonds payable                                           42                         17,977,601                 16,479,085
   Long-term payables                                      43                              24,210                    24,206
   Long-term employee benefits payable                     36                              22,408                    23,018
   Deferred income                                         44                           1,589,175                 1,912,421
   Deferred income tax liabilities                         23                             995,139                  952,678
   Other non-current liabilities                                                                 -                      483
Total non-current liabilities                                                          66,754,531                 57,903,950
Total liabilities                                                                     119,941,411               100,961,741
   Share capital                                           45                         13,528,439                 13,528,439
   Capital reserves                                        46                           5,764,408                 5,716,667
   Less: Treasury stock                                    47                           1,945,748                 1,952,957
   Other comprehensive income                              68                           (602,550)                 (534,082)
   Surplus reserves                                        48                           2,238,368                 2,238,368
   General reserve                                         49                                 361                       361
   Retained earnings                                       50                         11,044,065                 11,115,150
Total equity attributable to shareholders of                                          30,027,343                 30,111,946
the Company as the parent
   Non-controlling interests                                                          34,864,480                 33,771,198
Total shareholders’ equity                                                           64,891,823                 63,883,144
Total liabilities and shareholders’ equity                                          184,833,234                164,844,885
                                                                                               Person-in-char
                                                                                               ge of the
Legal                                         Person-in-charge of                              financial
representative:            Li Dongsheng       financial affairs:                Du Juan       department:      Xi Wenbo
The attached notes to the financial statements form an integral part of the financial statements.


                                                                2
                                                   TCL Technology Group Corporation
                                                    Consolidated Income Statement
                                                             (RMB’000)
                                                                                      Note V               H1 2020                H1 2019
1. Total revenue                                                                                         29,418,903          43,860,558
Including: Revenue                                                                     51                29,333,211          43,781,614
      Interest income                                                                  52                    85,692                78,944
Less: Cost of sales                                                                    51                26,740,893          37,357,128
     Interest expense                                                                  52                    16,278                 8,312
     Taxes and levies                                                                  53                    87,284               241,189
     Selling expense                                                                   54                   324,665           2,382,736
     Administrative expense                                                            55                   770,003           1,266,510
     R&D expense                                                                       56                 1,882,501           1,880,667
     Finance costs                                                                     57                   916,022               604,714
     Including: Interest expense                                                                          1,132,442           1,096,991
                  Interest income                                                                           250,867               239,908
Add: Other income                                                                      58                   952,416               921,527
     Return on investment                                                              59                 1,340,665           2,005,739
     Including: Share of profit or loss of joint ventures and associates                                    881,503               654,004
     Exchange gain                                                                     52                       689               (11,065)
     Gain on changes in fair value                                                     60                   114,034               295,530
Less: Credit impairment loss                                                           63                     1,124                20,547
     Asset impairment loss                                                             62                   328,682               314,341
Add: Asset disposal income                                                             61                     1,320                (3,428)
2. Operating profit                                                                                         760,573           2,992,717
Add: Non-operating income                                                              64                   491,939                46,113
Less: Non-operating expense                                                            65                    18,801                18,820
3. Gross profit                                                                                           1,233,711           3,020,010
Less: Income tax expense                                                               66                   164,587               282,947
4. Net profit                                                                                             1,069,124           2,737,063
   4.1 By operating continuity
   Net profit from continuing operations                                                                  1,069,124           1,404,976
   Net profit from discontinued operations                                                                        -           1,332,087
   4.2 By ownership
   Net profit attributable to shareholders of the Company as the parent                                   1,208,066           2,092,349
   Net profit attributable to non-controlling interests                                                   (138,942)               644,714
5. Other comprehensive income, net of tax                                              67                  (88,940)               512,530
   5.1 Other comprehensive income that will not be reclassified to profit or
loss                                                                                                       (13,382)               (17,564)
   5.2 Other comprehensive income that may subsequently be reclassified to
profit or loss upon satisfaction of prescribed condition                                                   (75,558)               530,094
6. Total comprehensive income                                                                               980,184           3,249,593
   Attributable to shareholders of the Company as the parent                                              1,139,598           2,441,842
   Attributable to non-controlling interests                                                              (159,414)               807,751
7. Earnings per share                                                                  68
 7.1 Basic earnings per share (RMB yuan/share)                                                               0.0932                0.1569
 7.2 Diluted earnings per share (RMB yuan/share)                                                             0.0893                0.1544


                                                                                                      Person-in-char
                                                                                                      ge of the
                                                        Person-in-charge of                           financial
Legal representative:            Li Dongsheng           financial affairs:                 Du Juan   department:      Xi Wenbo
 The attached notes to the financial statements form an integral part of the financial statements.




                                                                            3
                                                   TCL Technology Group Corporation
                                                   Consolidated Cash Flow Statement
                                                              (RMB’000)

                                                                                          Note V              H1 2020           H1 2019

1.   Cash flows from operating activities:
        Proceeds from sale of commodities and rendering of services                                        30,776,853        46,131,645

        Net increase/(decrease) in customer deposits and deposits from other
                                                                                                            2,262,400         2,657,645
                banks and financial institutions
        Net increase/(decrease) in borrowings from central bank                                               831,500          (33,465)

        Net increase in loans from other financial institutions                                               500,000                  -
        Interest, fees and commissions received                                                                85,692            78,944
        Tax and levy rebates                                                                                1,409,112         2,051,141
        Cash generated from other operating activities                                       69             1,133,384           911,336


        Subtotal of cash generated from operating activities                                               36,998,941        51,797,246


        Payments for commodities and services                                                            (23,358,384)      (34,287,313)

        Net (increase)/decrease in loans and advances to customers                                          (106,115)        (3,013,412)

        Net (increase)/decrease in deposits in central bank and other banks and
                                                                                                              319,970           368,644
                financial institutions

        Cash paid to and for employees                                                                    (2,545,709)        (2,909,441)
        Taxes and levies paid                                                                             (2,253,748)        (2,402,718)
        Cash used in other operating activities                                              70           (1,707,145)        (3,402,183)


        Subtotal of cash used in operating activities                                                    (29,651,131)      (45,646,423)


        Net cash generated from/used in operating activities                                 73             7,347,810         6,150,823


2.   Cash flows from investing activities:
        Proceeds from disinvestment                                                                        10,040,824         9,423,467
        Return on investment                                                                                  245,980           199,930
        Net proceeds from the disposal of fixed assets, intangible assets and other
                                                                                                                  146            20,067
           long-lived assets
        Net proceeds from the disposal of subsidiaries and other business units                               199,303           863,817


        Cash generated from other investing activities                                                     10,486,253        10,507,281


        Payments for the acquisition of fixed assets, intangible assets and other
                                                                                                         (12,491,013)       (11,374,990)
           long-lived assets
        Payments for investments                                                                         (15,202,884)      (13,828,141)
        Net payments for the acquisition of subsidiaries and other business units                                    -        (171,293)
        Cash used in other investing activities                                              71                 (920)        (7,118,896)


        Subtotal of cash used in investing activities                                                    (27,694,817)      (32,493,320)


        Net cash generated from/used in investing activities                                              (17,208,564)     (21,986,039)
                                                                                                     Person-in-charg
                                                                                                     e of the
                                                       Person-in-charge of                           financial
Legal representative:             Li Dongsheng         financial affairs:                 Du Juan   department:         Xi Wenbo
The attached notes to the financial statements form an integral part of the financial statements.

                                                                            4
                                     TCL Technology Group Corporation
                                 Consolidated Cash Flow Statement (Continued)
                                                 (RMB’000)

                                                               Note V             H1 2020               H1 2019

3.      Cash flows from financing activities :
        Capital contributions received                                          2,262,240             4,829,829
         Including: Capital contributions by
                                                                                2,262,240             4,822,620
              non-controlling interests to subsidiaries
        Borrowings raised                                                      28,360,521            19,249,337
        Net proceeds from issuance of bonds                                     4,403,000             1,000,000
        Cash generated from other financing activities                             71,503                     -

        Subtotal of cash generated from financing activities                   35,097,264            25,079,166

        Repayment of borrowings                                              (18,182,122)           (14,866,027)
        Interest and dividends paid                                           (3,066,421)            (2,898,038)
         Including: Dividends paid by subsidiaries to
                                                                                (275,264)               (25,953)
     non-controlling interests
        Cash used in other financing activities                 72              (612,872)            (1,850,155)

        Subtotal of cash used in financing activities                        (21,861,415)           (19,614,220)

        Net cash generated from/used in financing
                                                                               13,235,849             5,464,946
              activities

4. Effect of foreign exchange rates changes on cash and
                                                                                   13,317               468,710
cash equivalents

5. Net increase in cash and cash equivalents                                    3,388,412            (9,901,560)

Add: Cash and cash equivalents, beginning of the period                        17,637,743            25,702,384

6. Cash and cash equivalents, end of the period                 74             21,026,155            15,800,824




                                                                                 Person-in-c
                                          Person-in-charge                       harge of the
Legal                                     of financial                           financial
representative:        Li Dongsheng       affairs:               Du Juan        department:        Xi Wenbo
The attached notes to the financial statements form an integral part of the financial statements.



                                                          5
                                                                              TCL Technology Group Corporation
                                                                   Consolidated Statement of Changes in Shareholders’ Equity
                                                                                           (RMB’000)

                                                                                                                           H1 2020
                                                                           Equity attributable to shareholders of the Company as the parent
                                                                                                                                                                                                        Total
                                                                                                                  Other                                                        Non-controlli
                                                   Share             Capital            Treasury                                Surplus       General         Retained                          shareholders’
                                                                                                           comprehens                                                           ng interests
                                                  capital           reserves               stock                               reserves       reserve         earnings                                equity
                                                                                                            ive income
1. Balance as at the end of the prior
                                             13,528,439           5,716,667          (1,952,957)               (534,082)      2,238,368          361        11,115,150           33,771,198          63,883,144
year
Add: Adjustment for change in
                                                        -                   -                   -                      -              -             -                 -                    -                  -
accounting policy
2. Balance as at the beginning of the
                                             13,528,439           5,716,667          (1,952,957)               (534,082)      2,238,368          361        11,115,150           33,771,198          63,883,144
year
3. Increase/decrease in the period                      -             47,741               7,209                (68,468)              -             -          (71,085)           1,093,282           1,008,679
3.1 Total comprehensive income                          -                   -                   -               (68,464)              -             -        1,208,066            (159,414)            980,188
3.2 Capital increased and reduced by
                                                        -             47,741               7,209                       -              -             -                 -           1,659,202           1,714,152
shareholders
3.2.1 Capital increased by shareholders                 -                   -                   -                      -              -             -                 -           2,262,240           2,262,240
3.2.2 Share-based payments included in
                                                        -              5,526               7,209                       -              -             -                 -                    -             12,735
owners’ equity
3.2.3 Others                                            -             42,215                    -                      -              -             -                 -           (603,038)           (560,823)
3.3 Profit distribution                                 -                   -                   -                      -              -             -       (1,279,155)           (406,506)      (1,685,661)
3.3.1 Appropriation to surplus reserves                 -                   -                   -                      -              -             -                 -                    -                  -
3.3.2 Appropriation to shareholders                     -                   -                   -                      -              -             -       (1,279,155)           (406,506)      (1,685,661)
3.4 Transfers within owners’
                                                        -                   -                   -                    (4)              -             -                 4                    -                  -
equity
3.4.1 Other comprehensive income
                                                        -                   -                   -                    (4)              -             -                 4                    -                  -
transferred to retained earnings
4. Balance as at the end of the period       13,528,439            5,764,408         (1,945,748)               (602,550)      2,238,368          361        11,044,065           34,864,480          64,891,823


                                                                           Person-in-charge of financial                                           Person-in-charge of the
  Legal representative:                    Li Dongsheng                    affairs:                                        Du Juan                     financial department:              Xi Wenbo
  The attached notes to the financial statements form an integral part of the financial statements.


                                                                                                           6
                                                                            TCL Technology Group Corporation
                                                           Consolidated Statement of Changes in Shareholders’ Equity (Continued)
                                                                                       (RMB’000)

                                                                                                                          2019
                                                                          Equity attributable to shareholders of the Company as the parent
                                                                                                                                                                                                        Total
                                                                                                              Other                                                          Non-controlli
                                                  Share            Capital           Treasury                                   Surplus      General           Retained                        shareholders
                                                                                                      comprehensive                                                           ng interests
                                                 capital          reserves              stock                                  reserves      reserve           earnings                             ’ equity
                                                                                                            income
1. Balance as at the end of the prior
                                             13,549,649         5,996,741            (63,458)             (1,174,162)         2,184,261          361        10,000,973         30,377,308       60,871,673
year
Add: Adjustment for change in
                                                       -                 -                   -               334,950                  -             -         (106,833)             (994)          227,123
accounting policy
2. Balance as at the beginning of the
                                             13,549,649         5,996,741            (63,458)              (839,212)          2,184,261          361          9,894,140        30,376,314       61,098,796
year
3. Increase/decrease in the period             (21,210)         (280,074)         (1,889,499)                305,130            54,107              -         1,221,010         3,394,884        2,784,348
3.1 Total comprehensive income                         -                 -                   -               299,561                  -             -         2,617,765         1,223,644        4,140,970
3.2 Capital increased and reduced by           (21,210)         (280,074)         (1,889,499)                       -                 -             -                    -      2,247,318           56,535
shareholders
3.2.1 Capital increased by shareholders                -                 -                   -                      -                 -             -                    -      7,327,174        7,327,174
3.2.2 Share-based payments included in         (21,210)           (8,061)            (81,962)                       -                 -             -                    -               -       (111,233)
owners’ equity
3.2.3 Others                                           -        (272,013)         (1,807,537)                       -                 -             -                    -    (5,079,856)      (7,159,406)
3.3 Profit distribution                                -                 -                   -                      -           54,107              -       (1,391,186)          (76,078)      (1,413,157)
3.3.1 Appropriation to surplus reserves                -                 -                   -                      -           52,832              -          (52,832)          (16,923)          (16,923)
3.3.2 Appropriation to shareholders                    -                 -                   -                      -                 -             -       (1,337,079)          (59,155)      (1,396,234)
3.3.3 Others                                           -                 -                   -                      -            1,275              -           (1,275)                  -                 -
3.4 Transfers within owners’
                                                       -                 -                   -                 5,569                  -             -           (5,569)                  -                 -
equity
3.4.1 Other comprehensive income
                                                       -                 -                   -                 5,569                  -             -           (5,569)                  -                 -
transferred to retained earnings
4. Balance as at the end of the period       13,528,439         5,716,667         (1,952,957)              (534,082)          2,238,368          361         11,115,150        33,771,198       63,883,144

                                                                      Person-in-charge of financial                                          Person-in-charge of the
 Legal representative:                  Li Dongsheng                  affairs:                                      Du Juan                      financial department:              Xi Wenbo
  The attached notes to the financial statements form an integral part of the financial statements.



                                                                                                      7
                                     TCL Technology Group Corporation
                                  Balance Sheet of the Company as the Parent
                                                 (RMB’000)

Assets                                          Note XV                      30 June 2020        31 December 2019
Current assets
  Monetary assets                                                              11,913,572                3,966,899
  Held-for-trading financial
  assets                                                                        2,906,115                2,969,106
  Derivative financial assets                                                          854                          -
  Notes receivable                                                                 21,361                   22,514
  Accounts receivable                               1                             144,774                  445,090
  Prepayments                                                                     200,601                   97,127
  Other receivables                                 2                          15,001,251               17,129,473
  Inventories                                                                        6,776                  14,869
  Other current assets                                                               9,801                      6,471


Total current assets                                                           30,205,105               24,651,549


Non-current assets
   Long-term equity investments                     3                          45,722,688               39,297,272
   Investments in other equity
instruments                                         4                              15,000                   15,000
   Other non-current financial
                                                    5                           1,583,060                1,540,913
assets
   Investment property                                                             90,654                   92,623
  Fixed assets                                                                     49,292                   54,238
  Construction in progress                                                         19,280                       1,241
  Intangible assets                                                                19,746                   19,145
  Long-term prepaid expense                                                       449,084                  454,969


Total non-current assets                                                       47,948,804               41,475,401


Total assets                                                                   78,153,909               66,126,950




                                                                                  Person-in-c
                                          Person-in-charge                        harge of the
 Legal                                    of financial                            financial
 representative:        Li Dongsheng      affairs:                Du Juan        department:        Xi Wenbo

 The attached notes to the financial statements form an integral part of the financial statements.




                                                          8
                                     TCL Technology Group Corporation
                            Balance Sheet of the Company as the Parent (Continued)
                                                  (RMB’000)

Liabilities and shareholders’ equity:               Note XV                30 June 2020         31 December 2019

Current liabilities
  Short-term borrowings                                                         7,213,043                6,484,481
  Derivative financial liabilities                                                      -                    5,981
  Notes payable                                                                   137,543                   30,283
  Accounts payable                                                                106,095                  424,225
  Advances from customers                                                              28                   17,471
  Contract liabilities                                                             56,508                        -
  Employee benefits payable                                                       123,795                  125,095
  Taxes and levies payable                                                          9,669                   10,355
  Other payables                                                               13,437,563                9,347,608
  Current portion of non-current                                                3,024,296                  847,327
  liabilities
Total current liabilities                                                      24,108,540               17,292,826

Non-current liabilities
 Long-term borrowings                                                           5,703,000                2,110,000
 Bonds payable                                                                 17,977,601               16,479,085
 Long-term employee benefits                                                       22,408                   23,018
 payable income
 Deferred                                                                          39,335                   51,562

Total non-current liabilities                                                  23,742,344               18,663,665

Total liabilities                                                              47,850,884               35,956,491

  Share capital                                                                13,528,439               13,528,439
  Capital reserves                                                              8,388,302                8,382,776
  Less: Treasury stock                                                          1,945,748                1,952,957
  Other comprehensive income                                                      120,782                   56,064
  Surplus reserves                                                              2,036,304                2,036,304
  Retained earnings                                                             8,174,946                8,119,833

Total shareholders’ equity                                                    30,303,025               30,170,459

Total liabilities and shareholders’
                                                                               78,153,909               66,126,950
equity
                                                                                  Person-in-c
                                           Person-in-charge                       harge of the
 Legal                                     of financial                           financial
 representative:      Li Dongsheng         affairs:               Du Juan        department:        Xi Wenbo
 The attached notes to the financial statements form an integral part of the financial statements.



                                                          9
                                    TCL Technology Group Corporation
                               Income Statement of the Company as the Parent
                                               (RMB’000)

                                                              Note XV              H1 2020              H1 2019


1.    Revenue                                                    6                  486,384              763,599
Less: Cost of sales                                              6                  384,058              650,918
     Taxes and levies                                                                  4,022               8,920
     Selling expense                                                                  11,918              14,396
     Administrative expense                                                         141,988              160,762
     R&D expense                                                                      51,618              45,261
     Finance costs                                                                  543,831              413,526
     Including: Interest expense                                                    844,394              676,058
                    Interest income                                                 303,902              301,489
Add: Other income                                                                     15,329               4,959
     Return on investment                                        7                1,391,855              742,856
     Including: Share of profit or loss of joint                                    617,216              583,230
                                                                 7
ventures and associates
     Gain on changes in fair value                                                    98,825            (71,490)
Less: Credit impairment loss                                                           (601)              (2,745)
Add: Asset disposal income                                                                  -                  (10)


2.   Operating profit                                                               855,559              148,876
Add: Non-operating income                                                           486,288               10,008
Less: Non-operating expense                                                            7,579               7,304


3.   Gross profit                                                                 1,334,268              151,580
Less: Income tax expense                                                                    -                     -

4.   Net profit                                                                   1,334,268              151,580


5.   Other comprehensive income                                                       64,718              32,130


6.   Total comprehensive income                                                   1,398,986              183,710




                                                                                 Person-in-c
                                         Person-in-charg                         harge of the
Legal                                    e of financial                          financial
representative:         Li Dongsheng     affairs:               Du Juan         department:        Xi Wenbo

The attached notes to the financial statements form an integral part of the financial statements.


                                                         10
                                           TCL Technology Group Corporation
                                    Cash Flow Statement of the Company as the Parent
                                                     (RMB’000)

                                                                     Note XV                 H1 2020              H1 2019


1.    Cash flows from operating activities:


      Proceeds from sale of commodities and rendering of
                                                                                             832,527               746,180
              services
      Tax and levy rebates                                                                     1,073                   341

      Cash generated from other operating activities                                         112,440             5,063,425



      Subtotal of cash generated from operating activities                                   946,040             5,809,946



      Payments for commodities and services                                                 (717,268)            (909,086)

      Cash paid to and for employees                                                       (108,049)              (77,954)

      Taxes and levies paid                                                                  (19,721)             (45,844)

      Cash used in other operating activities                                              (964,363)             (800,356)



      Subtotal of cash used in operating activities                                       (1,809,401)           (1,833,240)



      Net cash generated from/used in operating activities               8                 (863,361)             3,976,706



2.    Cash flows from investing activities:
      Proceeds from disinvestment                                                          3,069,748             9,941,886

      Return on investment                                                                 4,989,820               280,280

      Net proceeds from the disposal of fixed assets, intangible
                                                                                                    1                  135
              assets and other long-lived assets


      Cash generated from other investing activities                                       8,059,569            10,222,301



      Payments for the acquisition of fixed assets, intangible
                                                                                             (12,165)               (2,576)
              assets and other long-lived assets
      Payments for investments                                                           (10,584,137)           (4,220,774)

      Cash used in other investing activities                                                   (920)                     -



      Subtotal of cash used in investing activities                                      (10,597,222)           (4,223,350)



      Net cash generated from/used in investing activities                                (2,537,653)            5,998,951




                                                                                             Person-in-c
                                                       Person-in-charg                       harge of the
Legal                                                  e of financial                        financial
representative:            Li Dongsheng                affairs:               Du Juan       department:    Xi Wenbo

The attached notes to the financial statements form an integral part of the financial statements.




                                                                    11
                                   TCL Technology Group Corporation
                       Cash Flow Statement of the Company as the Parent (Continued)
                                                (RMB’000)

                                                         Note XV                 H1 2020                 H1 2019


1.   Cash flows from financing activities:


     Capital contributions received                                                       -                 7,209
     Borrowings raised                                                         19,360,252                6,460,956
     Net proceeds from issuance of bonds                                        4,403,000                1,000,000
     Cash generated from other financing
          activities                                                               60,000                        -


     Subtotal of cash generated from financing
                                                                               23,823,252                7,468,165
     activities


     Repayment of borrowings                                                 (10,824,628)              (9,480,956)
     Interest and dividends paid                                              (1,707,229)              (1,782,161)
     Cash used in other financing activities                                      (16,524)             (1,536,764)


     Subtotal of cash used in financing activities                           (12,548,381)             (12,799,881)


     Net cash generated from/used in financing
                                                                               11,274,871              (5,331,716)
          activities

4.   Effect of foreign exchange rates changes
                                                                                   (3,269)                (30,892)
on cash and cash equivalents


5.    Net increase in cash and cash equivalents                                 7,870,588                4,613,049
Add: Cash and cash equivalents, beginning of
                                                                                3,941,090                1,328,679
the period

6.    Cash and cash equivalents, end of the
period                                                         9               11,811,678                5,941,728




                                                                                  Person-in-c
                                          Person-in-charg                         harge of the
 Legal                                    e of financial                          financial
 representative:       Li Dongsheng       affairs:                Du Juan        department:        Xi Wenbo

 The attached notes to the financial statements form an integral part of the financial statements.




                                                          12
                                                                   TCL Technology Group Corporation
                                                 Statement of Changes in Shareholders’ Equity of the Company as the Parent
                                                                                 (RMB’000)

                                                                                                                         H1 2020
                                                                                                                        Other                                                       Total
                                                               Share           Capital         Treasury                                Surplus                Retained
                                                                                                                comprehensiv                                                shareholders’
                                                              capital         reserves             stock                              reserves                earnings
                                                                                                                    e income                                                      equity
 1. Balance as at the end of the prior year               13,528,439        8,382,776         (1,952,957)              56,064        2,036,304               8,119,833          30,170,459
 Add: Adjustment for change in accounting policy                    -                -                  -                   -                -                       -                    -

 2. Balance as at the beginning of the year               13,528,439        8,382,776         (1,952,957)              56,064        2,036,304               8,119,833          30,170,459

 3. Increase/decrease in the period                                 -           5,526               7,209              64,718                -                 55,113              132,566
 3.1 Total comprehensive income                                     -                -                  -              64,718                -               1,334,268           1,398,986
 3.2 Capital increased and reduced by shareholders                  -           5,526               7,209                   -                -                       -              12,735
 3.2.1 Share-based payments included in owners’ equity             -           5,526               7,209                   -                -                       -              12,735
 3.3 Profit distribution                                            -                -                  -                   -                -           (1,279,155)            (1,279,155)
 3.3.1 Appropriation to surplus reserves                            -                -                  -                   -                -                       -                    -
 3.3.2 Appropriation to shareholders                                -                -                  -                   -                -           (1,279,155)            (1,279,155)
 3.3.3 Others                                                       -                -                  -                   -                -                       -                    -
 4. Balance as at the end of the period                   13,528,439        8,388,302         (1,945,748)             120,782        2,036,304               8,174,946          30,303,025



 Legal                                                        Person-in-charge of                                                  Person-in-charge of the
 representative:                       Li Dongsheng           financial affairs:                            Du Juan                  financial department:           Xi Wenbo

The attached notes to the financial statements form an integral part of the financial statements.




                                                                                         13
                                                                       TCL Technology Group Corporation
                                              Statement of Changes in Shareholders’ Equity of the Company as the Parent (Continued)
                                                                                 (RMB’000)

                                                                                                                            2019
                                                                                                                         Other                                                        Total
                                                               Share          Capital        Treasury                                    Surplus             Retained
                                                                                                                 comprehensiv                                                 shareholders’
                                                              capital        reserves            stock                                  reserves             earnings
                                                                                                                     e income                                                       equity
 1. Balance as at the end of the prior year               13,549,649       8,565,338             (63,458)             (24,870)        1,982,197         8,969,209                 32,978,065
 Add: Adjustment for change in accounting policy                    -               -                   -                (739)                 -                 739                        -
 2. Balance as at the beginning of the year               13,549,649       8,565,338             (63,458)             (25,609)        1,982,197         8,969,948                 32,978,065

 3. Increase/decrease in the period                         (21,210)       (182,562)        (1,889,499)                81,673            54,107         (850,115)                 (2,807,606)
 3.1 Total comprehensive income                                     -               -                   -              81,673                  -             528,318                 609,991
 3.2 Capital increased and reduced by shareholders          (21,210)       (182,562)        (1,889,499)                      -                 -                   -              (2,093,271)
 3.2.1 Share-based payments included in owners’ equity     (21,210)         (8,061)             (81,962)                    -                 -                   -               (111,233)
 3.2.2 Others                                                       -      (174,501)        (1,807,537)                      -                 -                   -              (1,982,038)
 3.3 Profit distribution                                            -               -                   -                    -           54,107        (1,378,433)                (1,324,326)
 3.3.1 Appropriation to surplus reserves                            -               -                   -                    -           52,832           (52,832)                          -
 3.3.2 Appropriation to shareholders                                -               -                   -                    -                 -       (1,337,079)                (1,33