TCL科技:2020年第三季度报告全文(英文版)

TCL Technology Group Corporation                     Third Quarterly Report 2020




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




      THIRD QUARTERLY REPORT 2020
                                   29 October 2020




                                                                                   1
TCL Technology Group Corporation                                        Third Quarterly Report 2020




         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 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.
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 has been prepared in both Chinese and English. Should there be any
discrepancies or misunderstandings between the two versions, the Chinese versions shall
prevail.




                                                                                                      2
TCL Technology Group Corporation                                                                        Third Quarterly Report 2020



                                                    Table of Contents


Part I Important Notes, Table of Contents and Definitions........................................................... 2

Part II Key Corporate Information..................................................................................................5

Part III Management Discussion and Analysis..............................................................................10

Part IV Significant Events............................................................................................................... 17

Part V Financial Statements............................................................................................................29




                                                                                                                                          3
TCL Technology Group Corporation                                                                Third Quarterly 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 “Current Period”                           The period from 1 January 2020 to 30 September 2020.

The “Reporting Period”                         The period from 1 July 2020 to 30 September 2020.

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.

Samsung Suzhou                                   Samsung Suzhou LCD Co., Ltd.

San’an Semiconductor                            Quanzhou San’an Semiconductor Technology 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                                 Bank of Shanghai Co., Ltd. (stock code: 601229.SH)

712 Corp.                                        Tianjin 712 Communication & Broadcasting Co., Ltd. (stock code: 603712.SH)

                                                 Fantasia Holdings Group Co., Limited, a listed company on the Stock Exchange
Fantasia
                                                 of Hong Kong (stock code: 01777.HK)

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

                                                 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


                                                                                                                              4
TCL Technology Group Corporation                                                                           Third Quarterly Report 2020




                               Part II Key Corporate Information

I Key Financial Information

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

□ Yes ■ No

                                                           30 September 2020                 31 December 2019               Change (%)

Total assets (RMB)                                                  200,282,199,399                    164,844,884,926               21.50%
Owners’ equity attributable to the listed
                                                                      31,074,758,363                    30,111,946,237                   3.20%
company’s shareholders (RMB)
Share capital (share)                                                 13,519,279,411                    13,528,438,719               -0.07%
Equity per share attributable to the listed
                                                                               2.2986                          2.2258                    3.27%
company’s shareholders (RMB/share)
                                                          Q3 2020            YoY change (%)             Q1-Q3 2020        YoY change (%)
Revenue (RMB)                                            19,376,776,395                 28.87%          48,709,987,251              -17.18%
Revenue on the same basis after the spin-off
                                                         19,376,776,395                 28.87%          48,709,987,251               18.36%
(RMB) (note)
EBITDA (RMB)                                              4,530,535,012                 41.94%          10,673,641,330               -8.21%
Net profit attributable to the listed company’s
                                                            817,109,760                 68.48%           2,025,175,746              -21.42%
shareholders (RMB)
Net profit attributable to the listed company’s
shareholders before non-recurring gains and                 678,187,625               168.13%             860,050,472                70.85%
losses (RMB)
Net cash generated from/used in operating
                                                          4,523,259,350               210.14%           11,871,070,129               56.01%
activities (RMB)
Basic earnings per share (RMB/share)                              0.0632                73.63%                 0.1563               -19.68%
Diluted earnings per share (RMB/share)                            0.0604                68.72%                 0.1497               -21.29%
Weighted average return on equity (%)                              2.66%                 1.06%                  6.74%                -2.12%

Note: In April 2019, the Company completed the handover of assets in a significant spin-off. Therefore, the Q1-Q3 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
Q1-Q3 2019 data were on the same basis after the spin-off, revenue would be up by 18.4% 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 Q1-Q3 2020 and Q1-Q3 2019
data, the net profit attributable to the listed company’s shareholders would be up by 28.9% year-on-year on the same basis.


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
                                                                                                                          13,519,279,411
session before the disclosure of this Report (share)

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


                                                                                                                                           5
TCL Technology Group Corporation                                                                      Third Quarterly Report 2020


Fully diluted earnings per share based on the latest
                                                                                                                                0.1498
total share capital above (RMB/share)



Non-recurring gains and losses:
                                                                                                                          Unit: RMB

                                  Item                                         Q1-Q3 2020                        Note

Gain or loss on disposal of non-current assets (inclusive of
                                                                                        300,297,646          Not applicable
impairment allowance write-offs)

Government grants through profit or loss (exclusive of
government grants given in the Company’s ordinary course of
                                                                                        465,617,542          Not applicable
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
                                                                                        280,758,994          Not applicable
lower than the Company’s enjoyable fair value of identifiable net
assets of investees when making investments

Gain or loss on fair-value changes in held-for-trading and
derivative financial assets and liabilities & income from disposal
of held-for-trading and derivative financial assets and liabilities
                                                                                        101,008,421          Not applicable
and other investments in debt obligations (exclusive of the
effective portion of hedges that arise in the Company’s ordinary
course of business)

Non-operating income and expense other than the above                                   173,115,293          Not applicable

Less: Corporate income tax                                                               86,827,078          Not applicable

         Non-controlling interests (net of tax)                                          68,845,544          Not applicable

Total                                                                                 1,165,125,274                --

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


II Total Number of Shareholders and Holdings of Top 10 Shareholders at the End of the
Reporting Period

1. Numbers of Ordinary Shareholders and Preferred Shareholders with Resumed Voting Rights as well as
Holdings of Top 10 Shareholders

                                                                                                                              Unit: share

Number of ordinary shareholders at                                        Number of preference
                                                                512,782                                                               0
the period-end                                                            shareholders with resumed



                                                                                                                                          6
TCL Technology Group Corporation                                                                       Third Quarterly Report 2020


                                                                     voting rights at the period-end
                                                                     (if any)

                                                       Top 10 shareholders

       Name of          Nature of       Shareholding                         Restricted shares         Shares in pledge or frozen
                                                         Total shares held
   shareholder         shareholder       percentage                                held                 Status            Shares

Li Dongsheng                                                                                     Put in pledge by
                    Domestic natural                                                                                      275,000,000
and his                                                                                          Li Dongsheng
                    person/general                8.57      1,158,599,393         613,931,602
acting-in-concert                                                                                Put in pledge by
                    legal person                                                                                          344,899,521
party                                                                                            Jiutian Liancheng

Huizhou
                    State-owned legal
Investment                                        5.50        743,139,840
                    person
Holding Co., Ltd.

Hong Kong
Securities          Foreign legal
                                                  3.11        420,738,484
Clearing            person
Company Ltd.

Tibet Tianfeng
Enterprise          Domestic general
                                                  3.01        407,344,415
Management Co., legal person
Ltd.

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

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

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

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

ICBC Credit
Suisse Asset        Fund, wealth
Management Co., management                        0.55         74,761,500
Ltd.-              product, etc.
Agricultural Bank



                                                                                                                                        7
TCL Technology Group Corporation                                                        Third Quarterly Report 2020


of China-ICBC
Credit Suisse
China
Securities
Financial Assets
Management Plan

China Southern
Asset
Management Co.,
Ltd.-
                    Fund, wealth
Agricultural Bank
                    management       0.55        74,761,500
of China-
                    product, etc.
Southern China
Securities
Financial Assets
Management Plan

                                    Top 10 unrestricted shareholders

                                                                                               Shares by type
         Name of shareholder            Unrestricted shares held
                                                                                          Type             Shares

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

Li Dongsheng and his                                                                RMB-denominate
                                                                   544,667,791                             544,667,791
acting-in-concert party                                                             d ordinary stock

Hong Kong Securities Clearing                                      420,738,484 RMB-denominate              420,738,484
Company Ltd.                                                                        d ordinary stock

Tibet Tianfeng Enterprise                                          407,344,415 RMB-denominate              407,344,415
Management Co., Ltd.                                                                d ordinary stock

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

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

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

ICBC Credit Suisse Asset
Management Co., Ltd.-
                                                                                    RMB-denominate
Agricultural Bank of China-ICBC                                       74,761,500                           74,761,500
                                                                                    d ordinary stock
Credit Suisse China Securities
Financial Assets Management Plan

China Southern Asset Management                                                     RMB-denominate
                                                                       74,761,500                           74,761,500
Co., Ltd.-Agricultural Bank of                                                     d ordinary stock



                                                                                                                         8
TCL Technology Group Corporation                                                                       Third Quarterly Report 2020


China-Southern China Securities
Financial Assets Management Plan

Zhong Ou Asset Management-
Agricultural Bank of China-Zhong                                                                  RMB-denominate
                                                                                      74,761,500                             74,761,500
Ou China Securities Financial Assets                                                               d ordinary stock
Management Plan

                                       Being acting-in-concert parties upon the signing of the Agreement on Acting in Concert, Mr.
Related or acting-in-concert parties   Li Dongsheng and Xinjiang Jiutian Liancheng Equity Investment Partnership (Limited
among the shareholders above           Partnership) (hereinafter referred to as “Jiutian Liancheng”) are the biggest shareholder of the
                                       Company with a total of 1,158.5994 million shares.

Top 10 shareholders involved in
                                       Not applicable
securities margin trading (if any)

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.


2. Number of Preferred Shareholders and Shareholdings of Top 10 of Them

□ Applicable ■ Not applicable




                                                                                                                                            9
TCL Technology Group Corporation                                             Third Quarterly Report 2020




               Part III Management Discussion and Analysis

I Overview

The technology and financial sector has suffered from the impact of the further escalated Sino-US
trade war since the beginning of this year. In addition, the global economy was in a slump because
the COVID-19 pandemic has not been eliminated. Due to the effective pandemic control measures
and the "dual circulation" development pattern, which is the mutual promotion of the double cycles
of the domestic and international markets, China has become the only major economy with positive
growth. With the acceleration of the restructuring of the global economic landscape and the
continuous adjustment of the industrial chains, strategic emerging industries such as semi-conductor
materials, new displays technology and integrated circuits in China are entering a new stage of
development. The Company persisted with the established strategies, regarded innovation and
technology as the core driver, as well as maximized the cost efficiency. The Company
continuously created new dynamic for the high-end technology industry and further
promoted the global leading strategies.

In the nine months ended 30 September 2020, on the same basis after the spin-off, the Company
recorded revenue of RMB48.71 billion, up by 18.4% year-on-year, and a net profit attributable to
the listed company’s shareholders of RMB2.03 billion. Excluding the gain from the spin-off, the net
profit attributable to the listed company’s shareholders increased by 28.9% year-on-year on the
same basis. Specifically, the net profit attributable to the listed company’s shareholders was
RMB0.817 billion in the third quarter, up by 68.5% year-on-year.

TCL CSOT reported a revenue of RMB32.38 billion, up by 31.9% year-on-year, due to a lower
average price of major products from the same period of last year; Moreover, the impact on
production and logistics brought by the pandemic resulted in a net profit of RMB566 million, down
by 56.3% year-on-year. Benefited from the improvement in the supply and demand of global
large-size display business, the price of panels in each size stably increased in the third quarter. The
Company continued to promote structural cost reduction and consolidate its leading advantages in
operating efficiency and benefit. Although the depreciation of the third quarter increased by

                                                                                                           10
TCL Technology Group Corporation                                            Third Quarterly Report 2020



RMB573 million from the second quarter, after the capacity of new production lines smoothly
climbed to the top, TCL CSOT recorded a net profit of RMB700 million in the third quarter, a
significant increase of RMB659 million from the second quarter and an increase of 151.6%
year-on-year. Meanwhile, the industrial finance & investment and venture capital business recorded
a net profit of RMB785 million.

Semi-conductor display technology and materials is one of the core fundamental industries with
great importance and promising prospects, where Chinese enterprises played a significant role in the
industries. During the Reporting Period, TCL CSOT acquired 60% ownership of the G8.5
production line (t10) of Samsung Suzhou and 100% ownership of the supporting module
factory, and introduced Samsung to be a strategic shareholder of TCL CSOT. Both sides would
coordinate their respective technology, production and market advantages to launch comprehensive
cooperation and form a new ecological alliance. The assets was delivered as scheduled and would
be included into the consolidated financial statements in the first quarter of 2021. Meanwhile, the
China Securities Regulatory Commission approved the Company's acquisition of a 39.95%
minority interest of the t3 production line as well as the capital raising program of RMB2.6 billion
in September. The delivery of asset was progressing. This transaction would further enhance the
profitability attributable to the Company and increase returns for shareholders.

By self-research, cooperation and acquisition, the company improved the ecological system
around printing OLED/QLED, Micro-LED and other new display technologies, as well as
reinforced the technological leading advantages. The Company’s subsidiary, Guangdong Juhua
focused on printing display process by developing key technologies and promoting industrial
application, while China Ray focused on researching new OLED key materials with independent IP.
The patents owned by the Company in the QLED electroluminescent field ranked as top two of the
world. TCL CSOT acquired a strategic stake in JOLED Inc. Through joint R&D and patent
cooperation, the company improved the ecology construction of the printing display industrial chain
from all aspects including materials, equipment, processes and products, so as to accelerate the
industrialization of printing OLED. TCL CSOT and San’an Semiconductor are dedicated to
promoting independent IPs from materials, processes, equipments and production line solutions by
jointly establishing a laboratory focusing on Micro-LED technology.


                                                                                                          11
TCL Technology Group Corporation                                           Third Quarterly Report 2020



To meet the requirement of searching growth driver in semiconductor and semiconductor
photovoltaic industry, the company invested in the field of silicon materials, which held a high
position in the upstream of the industry. With the grid parity, new development opportunities
appeared for photovoltaics. Along with the third wave of semiconductor industry relocation and the
industrial restructuring under international political and economic changes, the Company will
continuously lay a solid foundation in high-tech, heavy-asset and long-cycle fields, and develop
competitiveness in basic procedures and key areas such as materials and equipment. During the
Reporting Period, the Company acquired 100% equity of Tianjin Zhonghuan Electronics
Group Co., Ltd. The asset is processing transfer formalities and will be included into the
consolidated financial statements in Q4 2020.

Looking forward to the whole year, although the pandemic has affected the short-term business
performance and there are great uncertainties in global economic growth, the company is confident
to reach the annual business target. Moreover, the company attempts to seize the historic
opportunity of global industrial transformation by taking advantages in management, efficiency,
industrial chain resources and its successful experience of global operation. The company will strive
to promote a global leading position in the fields of semiconductor display and materials industry as
well as semiconductor and semiconductor photovoltaic industry.


II Core Business Review


During the Reporting Period, the 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 has acquired 100% equity of Tianjin
Zhonghuan Electronics Group Co., Ltd. and its statements will be consolidated in Q4 2020, the
business structure of the Company will then be as follows:




                                                                                                         12
TCL Technology Group Corporation                                                                Third Quarterly Report 2020




                                                            TCL Tech




      Semi-conductor display &          Semi-conductor &               Industrial finance &                    Other
             materials              Semi-conductor photovoltaic            investment

                                    Zhonghuan     Zhonghuan       TCL Financial   TCL Capital         Highly       TPC
     TCL CSOT        China Ray     Semiconductor Semiconductor
                                                  Photovoltaic

       Juhua          CDOT




(I) Semi-conductor Display and Materials Business

Due to impact of the pandemic, the supply and demand in the semiconductor display industry both
shrank, and the price of panels continued to fluctuate at the bottom. Due to recovered demand in
the third quarter as well as the influence of the coming selling season, the price maintained at
a high level, which enhanced the industrial profitability.

From January to September, TCL CSOT recorded product sales area of 21.687 million square
meters, up by 41.7% year-on-year; a revenue of RMB32.38 billion, up by 31.9% year-on-year, and a
net profit of RMB566 million. Specifically, the net profit of the third quarter was RMB700 million,
up by RMB659 million quarter-on-quarter and 151.6% year-on-year.

The large-size panel business maintained leading efficiency and profitability, which results in
a rise to the second place of the global market share of TV panels. Endogenous
capability-building and M&A supported the continual high growth of TCL CSOT.

The production lines of large-size panels operated at full capacity for strong sales, achieving sales
area of 20.71 million square meters, up by 44.9% year-on-year, along with a sales volume of 34.48
million pieces, up by 14.9% year-on-year. TCL CSOT gave full play to advantages of the
high-generation production line in production efficiency in ultra-large sizes and high specifications,
and optimized the product mix. The market share of 55-inch panels ranked the first in the world,
that of 32-inch panels ranked the second, and that of 65-inch and 75-inch panels rose to the third
position. 8K/120Hz product sales grew rapidly. The Company achieved mass production of 75-inch
8K MLED Xingyao Screen, and actively extended business to the commercial display field. The

                                                                                                                              13
TCL Technology Group Corporation                                          Third Quarterly Report 2020



market share of 86-inch interactive whiteboards ranked second in the world.

Large-size panel business recorded a revenue of RMB20.33 billion, up by 50.9% year-on-year,
maintaining a leading profitability in the industry. TCL CSOT acquired the Suzhou factories of
Samsung Display, which was expected to be consolidated in the first quarter of 2021. Meanwhile,
the t7 production line was about to achieve mass production. According to endogenous
capability-building and M&A, the production capacity and market share of TCL CSOT was
expected to maintain a rapid growth, and the competitiveness of large-size display business would
be continuously enhanced.

The Company drove development of small- and medium-size panel business by technology
innovation, and continuously optimized products and customer structure. High-end notebook
computers and flexible OLED products grew rapidly.

The small- and medium-size panel business recognized sales area of 0.97 million square meters,
down by 3.6% year-on-year; and a revenue of RMB12.05 billion (including CDOT), up by 8.7%
year-on-year.

Module capacity of the t3 production line decreased in the first half due to impact of the pandemic,
but it recovered to full capacity and sales in the third quarter. The Company strengthened the
development of full screen display and in-display fingerprint technology, increased the proportion
of Incell/COF/blind via products, and continuously optimized the product mix. Its market share of
LTPS mobile phone panels maintained the top three position in the world with a recovering
profitability.

The Phase I production capacity and yield rate of the t4 flexible AMOLED production line were
improved as scheduled, and foldable screens and double-curved screens for brand manufacturers
were mass produced and delivered. In addition, the Company continued introducing global leading
brands, and its shipments of OLED mobile phone panels rose to the fourth across the world. For the
t4 production line, the focus was placed on under-display shooting, folding, LTPO and other special
technologies. The DOT and 120Hz products was mass produced through a leading technology in
China. Equipment for Phase II and Phase III was being moved in as planned. A total capacity of
45K/month could be estimated to achieve in 2021.

                                                                                                        14
TCL Technology Group Corporation                                           Third Quarterly Report 2020



The Company enhanced the full-life-cycle capability of products, and further enriched the
mix of medium-size products based on existing advantages in LTPS fields in notebook
computers and tablet computers as well as customers’ resources in Esports and IWB. With
existing strategies of medium-size panels and the judgment on large, medium and small size market,
the company promoted technical investment for medium-size products and broadened the high-end
customers during the Reporting Period. In addition, the company grasped the opportunities from the
booming market of special displays for entertainment and Esports, as well as the needs of upgrade
in high-end business notebook computers. The volume shipment of 32-inch curved gaming panel of
TCL CSOT ranked second across the world, and its LTPS notebook computer panel has been
supplied to mass brand customers.



(II) Industrial Finance and Investment Business

TCL’s industrial finance business mainly includes the Group’s finance and the supply chain finance.
The finance team focused on the funding needs of the Group’s key projects, strengthened the active
management of liquidity and currency risk, and gradually satisfied financial needs of the overseas
business. The supply chain finance took full advantage of Internet platform. Jointly with domestic
financial institutions, it continuously provided high quality and convenient receivables financing
services for small and medium enterprises, realizing the sound development of the industry.

TCL Capital seek investment opportunities in key fields of high-tech industries, including new
display technology, semi-conductor industry chain, as well as high end materials and process
equipment. These investments took a balanced approach to promote technology development and
derive economic benefits. By the end of the Reporting Period, the AUM of TCL Capital reached
RMB8, 989 million, and 124 projects were invested cumulatively. Currently, it holds the stake of
CATL, DKEM, Cambricon and some other listed companies, in addition to interests in SenseTime,
Shangtai Tech, ASR Microelectronics, GalaxyCore, etc. As for Admiralty Harbour Capital, it has
issued and underwritten 14 bonds and 5 debt management projects. Its investment banking and asset
management business grew steadily. China Innovative focused in mature companies related to the
Company’s businesses, and it has invested in more than 115 listed companies cumulatively with a
steady growth in performance.
                                                                                                         15
TCL Technology Group Corporation                                         Third Quarterly Report 2020



At the end of the Reporting Period, the Company holds a stake of several listed companies directly,
including the 712 Corp. (603712.SH), the Bank of Shanghai (601229.SH) and the Fantasia
Holdings (01777.HK).




                                                                                                       16
TCL Technology Group Corporation                                                       Third Quarterly Report 2020




                                   Part IV Significant Events

I Major Changes of Main Items in Financial Statements and Financial Indicators within the
Reporting Period, as well as the Reasons for the Changes

1. Balance Sheet Items
                                                                                                             Unit: RMB

Balance sheet items        30 September 2020   31 December 2019       Change (%)           Reasons for the Changes

Monetary assets               12,827,443,241       18,648,184,663             -31.2    Payments for investments

                                                                                       Increase in investments in
Held-for-trading
                               7,920,821,272        6,074,750,918              30.4    wealth management products
financial assets
                                                                                       purchased

Accounts receivable           11,284,708,459        8,340,353,992              35.3    Increase in revenue

                                                                                       Increase in prepayments to
Prepayments                      874,835,005          364,422,948             140.1
                                                                                       suppliers

                                                                                       Increase in receivables in
Other receivables             16,106,570,308        2,750,041,514             485.7
                                                                                       relation to M&A investments
Loans and advances to
                               1,961,571,208        3,637,768,065             -46.1    Recovery of loans
customers
Other non-current
                               3,318,741,915        2,542,689,268              30.5    Increase in debt investments
financial assets
                                                                                       Increase in construction in
Investment property            1,157,774,022           82,272,964           1,307.2
                                                                                       progress transferred to this item
                                                                                       Increase in construction in
Fixed assets                  59,542,069,991       45,459,070,330              31.0
                                                                                       progress transferred to this item
Long-term prepaid
                               2,253,426,047        1,567,690,992              43.7    Increase in the period
expense
                                                                                       Increase in prepayments for
Other non-current assets      16,046,365,881        4,250,658,887             277.5
                                                                                       equipment

                                                                                       Increase in borrowings received
Borrowings from central
                               1,235,104,379          573,222,113             115.5    by TCL Finance Co., Ltd. from
bank
                                                                                       the central bank
Held-for-trading
                                 482,824,416          188,220,097             156.5    Increase in financial products
financial liabilities
Derivative financial                                                                   Increase in forward forex
                                 318,400,408           84,704,591             275.9
liabilities                                                                            products
                                                                                       Adoption of the new accounting
Contract liabilities             346,106,030                      -                -
                                                                                       standard governing revenue

Customer deposits and          3,339,383,199        1,355,128,509             146.4    Increase in deposits received by


                                                                                                                        17
TCL Technology Group Corporation                                                                        Third Quarterly Report 2020


interbank deposits                                                                                      TCL Finance Co., Ltd.

Current portion of                                                                                      Increase in the current portion of
                                   5,697,042,073             1,691,963,496                   236.7
non-current liabilities                                                                                 long-term borrowings

Long-term borrowings              60,621,676,376            38,512,059,200                     57.4     Increase in financings



2. Income Statement Items

                                                                                                                              Unit: RMB

         Item              Q1-Q3 2020            Q1-Q3 2019             Change (%)                    Reasons for the Changes

Taxes and levies              147,380,452             289,281,187                    -49.1 The spin-off

Selling expense               548,204,916            2,582,419,684                   -78.8 The spin-off

Finance costs               1,453,054,866             885,378,869                    64.1 Increase in financings

                                                                                            Increase in inventory valuation
Asset impairment loss        -708,096,422             -397,698,940                   78.0
                                                                                            allowances

3. Cash Flow Statement Items

                                                                                                                              Unit: RMB

                Item                   Q1-Q3 2020             Q1-Q3 2019           Change (%)               Reasons for the Changes

                                                                                                        New production lines running at
Net cash generated from/used in
                                           11,871,070,129       7,609,274,189                    56.0 full capacity and increase in
operating activities
                                                                                                        cash as loans and advances

Net cash generated from/used in                                                                         Increase in investment
                                        -40,577,217,778       -26,893,265,344                    50.9
investing activities                                                                                    expenditures

Net cash generated from/used in
                                         23,485,740,179         9,957,977,427                   135.8 Increase in financings
financing activities


II Progress, Influence and Solutions with regard to Significant Events

        Summary of the significant event                        Disclosure date                  Index to the related announcement

Announcement on the Completion of Share
                                                               13 January 2020
Repurchase & Changes in Shares

Announcement on Change of the Company
Name with the Industrial and Commercial                        7 February 2020
Administration and Change of the Stock Name

Preliminary Plan on the Acquisition of Assets                                                  http://www.cninfo.com.cn
through Share Offering, Convertible Corporate
                                                                29 April 2020
Bonds Offering and Cash Payment and Raising
the Matching Funds

Announcements on participating in the public       24 June 2020, 16 July 2020, 22 July 2020,
acquisition of the 100% equity interests in        11 September 2020 and 28 September 2020



                                                                                                                                       18
TCL Technology Group Corporation                                                                 Third Quarterly Report 2020


Zhonghuan Group

Report on the Acquisition of Assets through
Share Offering, Convertible Corporate Bonds
                                                  29 August 2020 and 17 September 2020
Offering and Cash Payment and Raising the
Matching Funds (Draft) (Revised)

Reminder of Postponed Re-election of the
Board of Directors and the Supervisory                       29 August 2020
Committee

Announcement on Adjustment to the Line of
                                                             29 August 2020
Guarantee for Subsidiary

Announcement on the Acquisition of a 60%
Interest in Samsung Suzhou LCD Co., Ltd. and
                                                             29 August 2020
of the 100% Interest of Samsung Display
Suzhou Co., Ltd.

Announcement on Unconditional Approval by
the M&A and Restructuring Committee of the
CSRC of the Acquisition of Assets through
Share Offering, Convertible Corporate Bonds                 18 September 2020
Offering and Cash Payment and Raising the
Matching Funds & Resumption of Share
Trading

Progress of any share repurchase:

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 14th Meeting of the 6th Board

of Directors on 10 January 2019, at which the Proposal on the Repurchase of Certain Public Shares was 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/share 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 account 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 approved at the



                                                                                                                                19
         TCL Technology Group Corporation                                                                                Third Quarterly Report 2020



        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 repurchased shares by means of centralized bidding:
        □ Applicable ■ Not applicable


        III Commitments that the Company’s Actual Controller, Shareholders, Related Parties,
        Acquirers, the Company Itself or Other Parties, Failed to Fulfill on Time during the
        Reporting Period

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


        IV Financial Investments

        1. Securities Investments

                                                                                                                                         Unit: RMB’0,000

                                                                    Gain/lo
                                                                               Cumula
                                                                     ss on
                                                                                tive
                                             Meas                   fair-val                                                                                     Fu
                                                                               fair-val     Purchased in                     Gain/loss
Securi     Secur                  Initial    urem    Beginning        ue                                   Sold in the                   Ending     Accou        ndi
                    Security                                                     ue             the                           in the
  ty        ity                  investmen    ent    carrying       changes                                Reporting                     carrying   nting        ng
                      name                                                     changes       Reporting                       Reporting
 type       code                   t cost    meth     amount         in the                                  Period                      amount      title       sou
                                                                               recorde        Period                          Period
                                              od                    Reporti                                                                                      rce
                                                                                d in
                                                                      ng
                                                                               equity
                                                                    Period

                   Agricultur

                   al Bank of

Bank’               China
                                                                                                                                                    Held-f
  s                 “Huilifen                                                                                                                                   Sel
                                                                                                                                                    or-trad
wealth      Not        g”                                                                                                                                       f-f
                                             Fair                                                                                                    ing
manag      appli   Corporate       145,000                      -     1,180             -       145,000                  -       1,180    146,180                un
                                             value                                                                                                  financ
ement      cable    Customiz                                                                                                                                     de
                                                                                                                                                      ial
produ               ed RMB                                                                                                                                       d
                                                                                                                                                    assets
  ct               Structured

                    Deposit

                    Product

Bank’             Guangdon                                                                                                                         Held-f       Sel

  s         Not     g Branch                                                                                                                        or-trad      f-f
                                             Fair
wealth     appli    of China       120,000                      -       250             -       120,000                  -         250    120,250    ing         un
                                             value
manag      cable   Constructi                                                                                                                       financ       de

ement               on Bank                                                                                                                           ial        d



                                                                                                                                                            20
         TCL Technology Group Corporation                               Third Quarterly Report 2020


produ              -“Ganyua                                                                      assets

  ct               n-Jinbao

                   DJ” RMB

                    Wealth

                   Managem

                      ent

                    Product

                    No. 819

                    of 2020

                   Changjian

                       g

                   Securities

                   -Chaoyue
                                                                                                  Held-f
                    Wealth                                                                                     Sel
Asset                                                                                             or-trad
            Not    Managem                                                                                     f-f
manag                                    Fair                                                      ing
           appli      ent       50,000           -   213   -   50,000   -       213      50,213                un
ement                                    value                                                    financ
           cable   Lexiang                                                                                     de
 plan                                                                                               ial
                    1-Day                                                                                      d
                                                                                                  assets
                   Collective

                     Asset

                   Managem

                    ent Plan

                    Huaxia

                     Bank

                   Enterprise
Bank’
                   Growing                                                                        Held-f
  s                                                                                                            Sel
                    Income                                                                        or-trad
wealth      Not                                                                                                f-f
                   Conservat             Fair                                                      ing
manag      appli                40,000           -   600   -   40,000   -       600      40,600                un
                      ive                value                                                    financ
ement      cable                                                                                               de
                   Customiz                                                                         ial
produ                                                                                                          d
                   ed Wealth                                                                      assets
  ct
                   Managem

                      ent

                    Product

                    Bank of
Bank’
                     China                                                                        Held-f
  s                                                                                                            Sel
                    Steady                                                                        or-trad
wealth      Not                                                                                                f-f
                    Wealth               Fair                                                      ing
manag      appli                40,000           -   537   -   40,000   -       537      40,537                un
                   Managem               value                                                    financ
ement      cable                                                                                               de
                      ent                                                                           ial
produ                                                                                                          d
                   Plan-Zhih                                                                      assets
  ct
                   ui Series

                                                                                                  Other        Sel
Bank’      Not      China      34,950   Cost    -     -   -   34,950   -       816      35,766
                                                                                                  curren       f-f


                                                                                                          21
         TCL Technology Group Corporation                                                            Third Quarterly Report 2020


  s        appli    Everbrigh                                                                                                      t         un

wealth     cable     t Bank                                                                                                    assets        de

manag               Corporate                                                                                                                d

ement               Structured

produ               Deposits

  ct

                         China

                     Fortune

                    Internatio
                                                                                                                               Held-f
                    nal Trust                                                                                                                Sel
                                                                                                                               or-trad
            Not     Co., Ltd.                                                                                                                f-f
Trust                                        Fair                                                                               ing
           appli         CICC      30,000                  -     889         -     30,000            -       889      30,889                 un
 plan                                        value                                                                             financ
           cable     Xintou                                                                                                                  de
                                                                                                                                 ial
                    Collective                                                                                                               d
                                                                                                                               assets
                     Capital

                    Trust Plan

                         No. 2

                    Minmetal

                           s

                    Trust-Hen
                                                                                                                               Held-f
                   gxin Rixin                                                                                                                Sel
                                                                                                                               or-trad
            Not          No.                                                                                                                 f-f
Trust                                        Fair                                                                               ing
           appli    17-Steady      26,000                  -     157         -     26,000            -       157      26,157                 un
 plan                                        value                                                                             financ
           cable    Investmen                                                                                                                de
                                                                                                                                 ial
                           t                                                                                                                 d
                                                                                                                               assets
                    Collective

                     Capital

                    Trust Plan

                    Zhonghai
                                                                                                                               Held-f
                    Trust-Sea                                                                                                                Sel
                                                                                                                               or-trad
            Not          Gull                                                                                                                f-f
Trust                                        Fair                                                                               ing
           appli    Collective     20,000                  -     601         -     20,000            -       601      20,601                 un
 plan                                        value                                                                             financ
           cable     Capital                                                                                                                 de
                                                                                                                                 ial
                    Trust Plan                                                                                                               d
                                                                                                                               assets
                         No. 3

                                                                                                                               Held-f
                                                                                                                                             Sel
                     Bosera                                                                                                    or-trad
Monet       Not                                                                                                                              f-f
                         Waifu               Fair                                                                               ing
 ary       appli                   50,000                  -      66         -     50,000      30,000        145      20,145                 un
                    Monetary                 value                                                                             financ
 fund      cable                                                                                                                             de
                         Fund                                                                                                    ial
                                                                                                                                             d
                                                                                                                               assets

Other securities investments
                                 1,693,215    --     616,094   -2,319   -2,020   1,074,683   1,378,011     35,103    321,479       --        --
held at the period-end




                                                                                                                                        22
        TCL Technology Group Corporation                                                                              Third Quarterly Report 2020


Total                              2,249,165      --       616,094      2,175     -2,020      1,630,633      1,408,011       40,491     852,818     --        --

Disclosure date of the board

announcement approving the                                                                 20 March 2019

securities investments

Disclosure date of the general

meeting announcement
                                                                                           10 April 2019
approving the securities

investments (if any)




        2. Investments in Derivative Financial Instruments


    Funding source                             Mostly foreign-currency revenue

    Legal matters involved (if
                                               Not applicable
    applicable)

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

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

                                               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.

    Analysis of risks and control              Risk analysis:
    measures associated with
                                               1. Market risk: the financial derivatives business carried out by the Group belongs to hedging and
    derivative investments held in
                                               trading business related to main business operations, and there is a market risk of loss due to the
    Reporting Period (including but
                                               fluctuation of underlying interest and exchange rates, which lead to the fluctuation of prices of
    not limited to market risk,
                                               financial derivatives;
    liquidity risk, credit risk,
    operational risk, legal risk, etc.)        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;

                                               4. Other risks: in the case of specific business operations, if the operator fails to finish the


                                                                                                                                                         23
  TCL Technology Group Corporation                                                                        Third Quarterly Report 2020


                                     prescribed procedures for report or approval, or fails to record the financial derivative business
                                     information accurately, timely and completely, it may result in loss of derivative business or trading
                                     opportunities. Moreover, if the trading operator fails to 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 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 rules in the
Changes in market prices or fair
                                     operation of forward foreign exchange contracts, interest rate swap contracts and futures contracts
value of derivative investments in
                                     to avoid and hedge foreign exchange risks arising from operation and financing. It saw a net gain of
Reporting Period (fair value
                                     RMB74.51 million for the Reporting Period. The fair value of derivatives is determined by
analysis should include
                                     real-time quoted price of the foreign exchange market, based on the difference between the
measurement method and related
                                     contractual price and the forward exchange rate quoted immediately in the foreign exchange market
assumptions and parameters)
                                     on the balance sheet date.

Major changes in accounting
policies and specific accounting     No significant change
principles adopted for derivative


                                                                                                                                             24
  TCL Technology Group Corporation                                                                         Third Quarterly Report 2020


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

Opinion of independent directors financial derivatives business, establishing a corresponding regulatory mechanism, formulating
on derivative investments and risk reasonable accounting policies and specific accounting principles, setting limits for risk exposure
control                              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.

                                     We believe that the financial derivatives transactions carried out by the Company in the nine
                                     months ended 30 September 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

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

 1. Forward forex contracts         1,279,232        36,087        2,512,274          89,823                            37.47              1.34

 2. Interest rate swaps              528,098         15,843          819,255          24,578          7,451             12.22              0.37

 3. Currency swaps                   215,565         14,399          344,523          17,226                              5.14             0.26

            Total                   2,022,895        66,329        3,676,052        131,627           7,451             54.82              1.96


 V Progress of Projects Financed with Raised Funds

 □ Applicable ■ Not applicable


 VI 2020 Annual Operating Performance Forecast

 Warning of a forecast loss on or a forecast significant year-on-year change in the 2020 annual net profit, as well as explanation of
 why:
 □ Applicable ■ Not applicable




                                                                                                                                            25
TCL Technology Group Corporation                                                                        Third Quarterly Report 2020


VII Significant Contracts Arising from the Company’s Ordinary Course of Business

□ Applicable ■ Not applicable


VIII 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                 384,596                                0
  management product

 Securities firm’s wealth
                                     Self-funded                            115,000                     50,213                             0
  management product

          Trust plan                 Self-funded                            126,000                     98,179                             0

            Other                    Self-funded                            181,485                     52,026                             0

Total                                                                       963,468                 585,014                                0

High-risk wealth management transactions with a significant single amount, low liquidity and no principal protection:
□ Applicable ■ Not applicable


IX Irregularities in the Provision of Guarantees

□ Applicable ■ Not applicable


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

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


XI Communications with the Investment Community such as Researches, Inquiries and
Interviews Received during the Reporting Period

                                                                                                  Main
                                                             Type of                                                  Index to main
                                             Way of                         Communication discussions and
        Date                Place                       communication                                                  information
                                        communication                             party         materials
                                                              party                                                  communicated
                                                                                                provided

                                                                            UBS Asset                            Log Sheet No.
                       Company                                              Management,      Inquired about      2020-001 on Investor
                       Conference                       Institutional       Essence          the Company’s      Relations Activities on
15 January 2020                         By visit
                       Room in                          investor            Securities,      business            15 January 2020
                       Shenzhen                                             Oriental Alpha   development         disclosed by the
                                                                            Fund, Tongben                        Company on


                                                                                                                                           26
TCL Technology Group Corporation                                                       Third Quarterly Report 2020


                                                          Investment,                         http://www.cninfo.com.
                                                          Rosefinch Fund,                     cn dated 16 January
                                                          Shenzhen                            2020
                                                          Shangdao
                                                          Investment, and
                                                          Shanghai Life
                                                          Insurance

                                                          TF Securities,
                                                          China Asset
                                                          Management,
                                                          TruValue Asset
                                                                                              Log Sheet No.
                                                          Management,
                                                                                              2020-002 on Investor
                                                          Dingsa Fund,
                                                                                              Relations Activities on
                  Company                                 Essence Fund,     Inquired about
                                                                                              16 January 2020
                  Conference              Institutional   Essence           the Company’s
16 January 2020                By visit                                                       disclosed by the
                  Room in                 investor        Securities, Sense business
                                                                                              Company on
                  Shenzhen                                Fund, Boyuan      development
                                                                                              http://www.cninfo.com.
                                                          Fund, JTJ
                                                                                              cn dated 17 January
                                                          Investment,
                                                                                              2020
                                                          China Orient
                                                          Asset
                                                          Management,
                                                          etc.

                                                          E Fund, Harvest
                                                          Fund, Southern
                                                          Asset
                                                          Management,
                                                          Bosera Funds,
                                                          Perseverance
                                                          Asset                               Log Sheet No.
                                                                            Inquired about
                                                          Management,                         2020-003 on Investor
                                                                            the 2019
                  Company                                 Yinhua Fund,                        Relations Activities on
                                                                            performance and
                  Conference              Institutional   GF Fund,                            31 March 2020
31 March 2020                  By visit                                     development
                  Room in                 investor        Dacheng Fund,                       disclosed by the
                                                                            planning of TCL
                  Shenzhen                                UBS Securities,                     Company on
                                                                            Tech. and TCL
                                                          Minsheng Royal                      http://www.cninfo.com.
                                                                            CSOT
                                                          Fund                                cn dated 2 April 2020
                                                          Management,
                                                          HSBC Jintrust
                                                          Fund, CCB
                                                          Principal Asset
                                                          Management,
                                                          etc.



                                                                                                                        27
TCL Technology Group Corporation                                                           Third Quarterly Report 2020


                                                             Harvest Fund,
                                                             China Asset
                                                             Management,
                                                             Penghua Fund,
                                                             Perseverance
                                                             Asset
                                                                                                  Log Sheet No.
                                                             Management,        Inquired about
                                                                                                  2020-004 on Investor
                                                             asptex, Daiwa,     the Q1 2020
                                                                                                  Relations Activities on
                                             Institutional   Morgan Stanley, performance and
29 April 2020    -                By phone                                                        29 April 2020 disclosed
                                             investor        Q Fund             development
                                                                                                  by the Company on
                                                             Management,        planning of TCL
                                                                                                  http://www.cninfo.com.
                                                             UG, Essence        Tech.
                                                                                                  cn dated 7 May 2020
                                                             International,
                                                             Essence
                                                             Securities, Aeon
                                                             Insurance Asset
                                                             Management,
                                                             etc.

                                                             Dajia Asset,
                                                             China Life
                                                             Asset, Fullgoal
                                                             Fund,
                                                                                                  Log Sheet No.
                                                             Perseverance
                                                                                                  2020-005 on Investor
                                                             Asset,
                                                                                                  Relations Activities on
                                                             Everbright         Inquired about
                 Renaissance                                                                      17 August 2020
                                                             Securities, GF     the Company’s
17 August 2020 Tianjin            By visit   Institution                                          disclosed by the
                                                             Fund, Taikang      business
                 Lakeview Hotel                                                                   Company on
                                                             Asset, Hongta      development
                                                                                                  http://www.cninfo.com.
                                                             Securities, GF
                                                                                                  cn dated 18 August
                                                             Securities,
                                                                                                  2020
                                                             GFund, EHE
                                                             Capital,
                                                             Guosheng
                                                             Securities, etc.

                                                             China Life Asset                     Log Sheet No.
                                                             Management                           2020-006 on Investor
                                                                                Inquired about
                                                             Company                              Relations Activities on
                 Company                                                        the H1 2020
                                                             Limited, CIB                         31 August 2020
                 Conference                                                     performance and
31 August 2020                    By visit   Institution     Fund                                 disclosed by the
                 Room in                                                        development
                                                             Management                           Company on
                 Shenzhen                                                       planning of TCL
                                                             Co., Ltd., ABC                       http://www.cninfo.com.
                                                                                Tech.
                                                             Life Insurance,                      cn dated 2 September
                                                             CITIC                                2020



                                                                                                                            28
TCL Technology Group Corporation                                                  Third Quarterly Report 2020


                                                               Prudential Fund,
                                                               China Asset
                                                               Management,
                                                               Harvest Fund,
                                                               ICBC Credit
                                                               Suisse, Taikang
                                                               Asset, Ping An
                                                               Annuity
                                                               Insurance, Ping
                                                               An Fund, etc.




                                         Part V Financial Statements

I Financial Statements

1. Consolidated Balance Sheet

Prepared by TCL Technology Group Corporation
                                                                                                      Unit: RMB

                   Item                         30 September 2020                 31 December 2019

Current assets:

  Monetary assets                                          12,827,443,241.00                  18,648,184,663.00

  Settlement reserve

  Loans to other banks and financial
institutions

  Held-for-trading financial assets                         7,920,821,272.00                   6,074,750,918.00

  Derivative financial assets                                 378,239,337.00                     159,035,592.00

  Notes receivable                                              2,800,162.00                     228,941,977.00

  Accounts receivable                                      11,284,708,459.00                   8,340,353,992.00

  Receivables financing                                        74,424,300.00

  Prepayments                                                 874,835,005.00                     364,422,948.00

  Premiums receivable

  Reinsurance receivables

  Receivable reinsurance contract
reserve

  Other receivables                                        16,106,570,308.00                   2,750,041,514.00

     Including: Interest receivable

                  Dividends receivable                                                             5,771,104.00


                                                                                                                29
TCL Technology Group Corporation                               Third Quarterly Report 2020


  Financial assets purchased under
resale agreements

  Inventories                               5,270,225,811.00                5,677,963,123.00

  Contract assets

  Assets held for sale

  Current portion of non-current assets

  Other current assets                      7,238,202,237.00                5,911,827,639.00

Total current assets                       61,978,270,132.00               48,155,522,366.00

Non-current assets:

  Loans and advances to customers           1,961,571,208.00                3,637,768,065.00

  Debt investments                           120,768,132.00                    20,373,264.00

  Other debt investments

  Long-term receivables

  Long-term equity investments             20,293,408,531.00               17,194,284,162.00

  Investments in other equity
                                             202,636,394.00                   279,883,515.00
instruments

  Other non-current financial assets        3,318,741,915.00                2,542,689,268.00

  Investment property                       1,157,774,022.00                   82,272,964.00

  Fixed assets                             59,542,069,991.00               45,459,070,330.00

  Construction in progress                 24,985,366,572.00               33,578,289,802.00

  Productive living assets

  Oil and gas assets

  Right-of-use assets

  Intangible assets                         6,453,132,676.00                5,684,584,119.00

  Development costs                         1,176,484,042.00                1,548,470,972.00

  Goodwill                                      2,452,186.00                    2,452,186.00

  Long-term prepaid expense                 2,253,426,047.00                1,567,690,992.00

  Deferred income tax assets                 789,731,670.00                   840,874,034.00

  Other non-current assets                 16,046,365,881.00                4,250,658,887.00

Total non-current assets                  138,303,929,267.00              116,689,362,560.00

Total assets                              200,282,199,399.00              164,844,884,926.00

Current liabilities:

  Short-term borrowings                    11,857,441,092.00               12,069,657,099.00

  Borrowings from the central bank          1,235,104,379.00                  573,222,113.00

  Loans from other banks and financial


                                                                                             30
TCL Technology Group Corporation                               Third Quarterly Report 2020


institutions

  Held-for-trading financial liabilities     482,824,416.00                   188,220,097.00

  Derivative financial liabilities           318,400,408.00                    84,704,591.00

  Notes payable                             2,201,076,330.00                1,720,401,552.00

  Accounts payable                         12,070,105,238.00               11,549,133,141.00

  Advances from customers                        173,642.00                   141,748,956.00

  Contract liabilities                       346,106,030.00

  Financial assets sold under
                                              50,072,917.00
repurchase agreements
  Customer deposits and deposits from
                                            3,339,383,199.00                1,355,128,509.00
other banks and financial institutions
  Payables for acting trading of
securities
  Payables for underwriting of
securities

  Employee benefits payable                 1,197,125,944.00                1,094,216,685.00

  Taxes and levies payable                   414,939,297.00                   226,806,037.00

  Other payables                           15,454,442,183.00               12,293,565,901.00

     Including: Interest payable

                 Dividends payable              1,293,126.00                   11,058,225.00

  Fees and commissions payable

  Reinsurance payables

  Liabilities directly associated with
assets held for sale
  Current portion of non-current
                                            5,697,042,073.00                1,691,963,496.00
liabilities

  Other current liabilities                  200,648,800.00                    69,021,962.00

Total current liabilities                  54,864,885,948.00               43,057,790,139.00

Non-current liabilities:

  Insurance contract reserve

  Long-term borrowings                     60,621,676,376.00               38,512,059,200.00

  Bonds payable                            15,170,111,167.00               16,479,085,461.00

     Including: Preference shares

                 Perpetual bonds

  Lease liabilities

  Long-term payables                          24,230,000.00                    24,206,057.00

  Long-term employee benefits                 22,180,974.00                    23,017,619.00



                                                                                             31
TCL Technology Group Corporation                                                                  Third Quarterly Report 2020


payable

  Provisions

  Deferred income                                               1,475,493,665.00                                 1,912,421,056.00

  Deferred income tax liabilities                               1,051,903,905.00                                  952,677,822.00

  Other non-current liabilities                                                                                        482,232.00

Total non-current liabilities                                  78,365,596,087.00                               57,903,949,447.00

Total liabilities                                             133,230,482,035.00                              100,961,739,586.00

Owners’ equity:

  Share capital                                                13,519,279,411.00                               13,528,438,719.00

  Other equity instruments

     Including: Preference shares

                    Perpetual bonds

  Capital reserves                                              5,693,980,327.00                                 5,716,667,384.00

  Less: Treasury stock                                          1,913,028,859.00                                 1,952,956,751.00

  Other comprehensive income                                     -325,376,763.00                                  -534,081,855.00

  Specific reserve

  Surplus reserves                                              2,238,368,089.00                                 2,238,368,089.00

  General reserve                                                       360,766.00                                     360,766.00

  Retained earnings                                            11,861,175,392.00                                11,115,149,885.00

Total equity attributable to owners of
                                                               31,074,758,363.00                                30,111,946,237.00
the Company as the parent
Non-controlling interests                                      35,976,959,001.00                               33,771,199,103.00

Total owners’ equity                                          67,051,717,364.00                               63,883,145,340.00

Total liabilities and owners’ equity                         200,282,199,399.00                              164,844,884,926.00

Legal representative: Li Dongsheng                                                   Person-in-charge of financial affairs: Du Juan

Person-in-charge of the financial department: Xi Wenbo

2. Balance Sheet of the Company as the Parent

                                                                                                                        Unit: RMB

                     Item                           30 September 2020                             31 December 2019

Current assets:

  Monetary assets                                               4,827,670,877.00                                 3,966,899,016.00

  Held-for-trading financial assets                             3,207,379,027.00                                 2,969,105,570.00

  Derivative financial assets

  Notes receivable                                                  1,000,000.00                                    22,514,486.00



                                                                                                                                 32
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  Accounts receivable                       256,524,188.00                   445,089,599.00

  Receivables financing

  Prepayments                               106,850,302.00                    97,127,177.00

  Other receivables                       35,561,803,323.00               17,129,473,443.00

     Including: Interest receivable

                 Dividends receivable                                      4,211,824,115.00

  Inventories                                  8,719,048.00                   14,868,714.00

  Contract assets

  Assets held for sale

  Current portion of non-current assets

  Other current assets                       28,718,538.00                     6,471,074.00

Total current assets                      43,998,665,303.00               24,651,549,079.00

Non-current assets:

  Debt investments

  Other debt investments

  Long-term receivables

  Long-term equity investments            45,978,186,585.00               39,297,272,437.00

  Investments in other equity
                                             15,000,000.00                    15,000,000.00
instruments

  Other non-current financial assets       1,494,462,399.00                1,540,912,643.00

  Investment property                        89,670,494.00                    92,622,685.00

  Fixed assets                               46,318,858.00                    54,238,373.00

  Construction in progress                   35,890,080.00                     1,241,308.00

  Productive living assets

  Oil and gas assets

  Right-of-use assets

  Intangible assets                           17,842,117.00                   19,144,884.00

  Development costs

  Goodwill

  Long-term prepaid expense                 446,149,090.00                   454,968,882.00

  Deferred income tax assets

  Other non-current assets

Total non-current assets                  48,123,519,623.00               41,475,401,212.00

Total assets                              92,122,184,926.00               66,126,950,291.00




                                                                                            33
TCL Technology Group Corporation                               Third Quarterly Report 2020


Current liabilities:

  Short-term borrowings                     6,919,214,444.00                6,484,481,271.00

  Held-for-trading financial liabilities

  Derivative financial liabilities            15,016,970.00                     5,980,760.00

  Notes payable                                                                30,282,528.00

  Accounts payable                           186,541,476.00                   424,224,599.00

  Advances from customers                                                      17,470,841.00

  Contract liabilities                        13,659,035.00

  Employee benefits payable                  160,578,430.00                   125,095,153.00

  Taxes and levies payable                    10,439,721.00                    10,354,865.00

  Other payables                           22,166,518,250.00                9,347,609,813.00

     Including: Interest payable

                    Dividends payable           1,292,429.00                   11,057,515.00

  Liabilities directly associated with
assets held for sale
  Current portion of non-current
                                            5,270,725,300.00                  847,326,922.00
liabilities

  Other current liabilities                     3,614,791.00

Total current liabilities                  34,746,308,417.00               17,292,826,752.00

Non-current liabilities:

  Long-term borrowings                     13,943,234,875.00                2,110,000,000.00

  Bonds payable                            13,135,868,376.00               16,479,085,461.00

     Including: Preference shares

                    Perpetual bonds

  Lease liabilities

  Long-term payables

  Long-term employee benefits
                                              22,180,974.00                    23,017,619.00
payable

  Provisions

  Deferred income                             39,334,600.00                    51,561,600.00

  Deferred income tax liabilities

  Other non-current liabilities

Total non-current liabilities              27,140,618,825.00               18,663,664,680.00

Total liabilities                          61,886,927,242.00               35,956,491,432.00

Owners’ equity:




                                                                                             34
TCL Technology Group Corporation                                     Third Quarterly Report 2020


  Share capital                                13,519,279,411.00                 13,528,438,719.00

  Other equity instruments

     Including: Preference shares

                  Perpetual bonds

  Capital reserves                              8,365,272,080.00                    8,382,776,032.00

  Less: Treasury stock                          1,913,028,859.00                    1,952,956,751.00

  Other comprehensive income                        129,770,077.00                    56,064,337.00

  Specific reserve

  Surplus reserves                              2,036,303,650.00                    2,036,303,650.00

  Retained earnings                             8,097,661,325.00                    8,119,832,872.00

Total owners’ equity                          30,235,257,684.00                 30,170,458,859.00

Total liabilities and owners’ equity          92,122,184,926.00                 66,126,950,291.00


3. Consolidated Income Statement for Q3

                                                                                          Unit: RMB

                     Item                 Q3 2020                         Q3 2019

1. Total revenues                               19,414,257,022.00                15,043,817,358.00

  Including: Revenue                            19,376,776,395.00                15,036,052,357.00

              Interest income                        37,480,627.00                     7,765,001.00

              Insurance premium income

              Fee and commission
income

2. Costs and expenses                           18,961,057,366.00                15,408,639,989.00

  Including: Cost of sales                      16,766,859,872.00                13,859,643,355.00

              Interest expense                        9,690,038.00                     4,817,412.00

              Fee and commission
expense

              Surrenders

              Net insurance claims paid

              Net amount provided as
insurance contract reserve
              Expenditure on policy
dividends
              Reinsurance premium
expense

              Taxes and levies                       60,096,496.00                    48,091,768.00



                                                                                                   35
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                 Selling expense                   223,539,527.00                   199,683,347.00

                 Administrative expense            445,564,745.00                   293,283,969.00

                 R&D expense                       918,274,102.00                   722,455,220.00

                 Finance costs                     537,032,586.00                   280,664,918.00
                    Including: Interest
                                                   530,891,328.00                   434,347,881.00
expense

                                  Interest
                                                    46,883,545.00                   106,746,690.00
income

Add: Other income                                  302,109,828.00                   517,506,256.00

         Return on investment (“-” for loss)     611,022,869.00                   576,410,283.00

            Including: Share of profit or loss
                                                   412,163,854.00                   396,531,183.00
of joint ventures and associates
              Income from the
derecognition of financial assets at
amortized cost (“-” for loss)

         Exchange gain (“-” for loss)               -367,349.00                      -299,877.00

         Net gain on exposure hedges (“-”
for loss)

         Gain on changes in fair value (“-”
                                                   180,440,583.00                    64,950,705.00
for loss)

         Credit impairment loss (“-” for
                                                     8,198,256.00                     -1,054,559.00
loss)
         Asset impairment loss (“-” for loss)   -379,414,395.00                   -83,358,305.00

         Asset disposal income (“-” for
                                                      -388,292.00                     5,599,397.00
loss)

3. Operating profit (“-” for loss)              1,174,801,156.00                  714,931,269.00

Add: Non-operating income                            4,449,340.00                    81,998,416.00

Less: Non-operating expense                         12,507,266.00                     4,649,448.00

4. Gross profit (“-” for loss)                  1,166,743,230.00                  792,280,237.00

Less: Income tax expense                           174,162,360.00                    41,928,606.00

5. Net profit (“-” for net loss)                 992,580,870.00                   750,351,631.00

  5.1 By operating continuity

        5.1.1 Net profit from continuing
                                                   992,580,870.00                   750,351,631.00
operations (“-” for net loss)

        5.1.2 Net profit from discontinued
operations (“-” for net loss)

  5.2 By ownership

        5.2.1 Net profit attributable to           817,109,760.00                   484,981,289.00


                                                                                                   36
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owners of the Company as the parent
      5.2.1 Net profit attributable to
                                                175,471,110.00                   265,370,342.00
non-controlling interests
6. Other comprehensive income, net of
                                                273,560,957.00                   -26,068,932.00
tax
  Attributable to owners of the Company
                                                289,165,857.00                   -26,691,643.00
as the parent
      6.1 Items that will not be
                                                 -12,918,845.00                   19,081,757.00
reclassified to profit or loss
         6.1.1 Changes caused by
remeasurements on defined benefit
schemes
         6.1.2 Other comprehensive
income that will not be reclassified to             641,118.00                    26,584,508.00
profit or loss under the equity method
         6.1.3 Changes in the fair value of
                                                 -13,559,963.00                   12,454,793.00
investments in other equity instruments
         6.1.4 Changes in the fair value
arising from changes in own credit risk

         6.1.5 Other                                                             -19,957,544.00
      6.2 Items that will be reclassified to
                                                302,084,702.00                   -45,773,400.00
profit or loss
         6.2.1 Other comprehensive
income that will be reclassified to profit       14,189,009.00                  -179,106,860.00
or loss under the equity method
         6.2.2 Changes in the fair value of
other debt investments
         6.2.3 Other comprehensive
income arising from the reclassification            636,831.00
of financial assets
         6.2.4 Credit impairment
allowance for other debt investments
         6.2.5 Reserve for cash flow
                                                 83,569,874.00                   -19,415,646.00
hedges
         6.2.6 Differences arising from the
translation of foreign
                                                203,688,988.00                   151,851,168.00
currency-denominated financial
statements

         6.2.7 Other                                                                 897,938.00

  Attributable to non-controlling
                                                 -15,604,900.00                      622,711.00
interests

7. Total comprehensive income                  1,266,141,827.00                  724,282,699.00

  Attributable to owners of the Company        1,106,275,617.00                  458,289,646.00


                                                                                                37
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as the parent
  Attributable to non-controlling
                                                                   159,866,210.00                                265,993,053.00
interests
8. Earnings per share

  8.1 Basic earnings per share                                             0.0632                                         0.0364

  8.2 Diluted earnings per share                                           0.0604                                         0.0358

Legal representative: Li Dongsheng                                                  Person-in-charge of financial affairs: Du Juan

Person-in-charge of the financial department: Xi Wenbo


4. Income Statement of the Company as the Parent for Q3

                                                                                                                       Unit: RMB

                     Item                                Q3 2020                                      Q3 2019

1. Revenue                                                         351,681,400.00                                543,963,613.00

Less: Cost of sales                                                273,170,479.00                                497,046,360.00

        Taxes and levies                                              828,636.00                                      340,606.00

        Selling expense                                               223,167.00                                    5,534,527.00

        Administrative expense                                     132,624,426.00                                  80,248,940.00

        R&D expense                                                 35,323,026.00                                  34,971,218.00

        Finance costs                                              337,959,065.00                                236,701,397.00

          Including: Interest expense                              563,888,687.00                                333,209,614.00

                        Interest income                            241,280,876.00                                  95,255,830.00

Add: Other income

         Return on investment (“-” for
                                                                   350,268,142.00                                361,094,314.00
loss)
            Including: Share of profit or
                                                                   257,155,500.00                                304,497,022.00
loss of joint ventures and associates
              Income from the
derecognition of financial assets at
amortized cost (“-” for loss)
         Net gain on exposure hedges (“-”
for loss)

         Gain on changes in fair value (“-”
                                                                     3,488,019.00                                 116,206,626.00
for loss)

         Credit impairment loss (“-” for
                                                                        -1,099.00                                       -3,895.00
loss)
         Asset impairment loss (“-” for
loss)


                                                                                                                                38
TCL Technology Group Corporation                               Third Quarterly Report 2020


         Asset disposal income (“-” for
                                                  88,496.00                   256,624,954.00
loss)

2. Operating profit (“-” for loss)          -74,603,841.00                  423,042,564.00

Add: Non-operating income                      -1,771,503.00                   67,299,176.00

Less: Non-operating expense                      909,455.00                     1,762,001.00

3. Gross profit (“-” for loss)              -77,284,799.00                  488,579,739.00

Less: Income tax expense

4. Net profit (“-” for net loss)            -77,284,799.00                  488,579,739.00

  4.1 Net profit from continuing
                                              -77,284,799.00                  488,579,739.00
operations (“-” for net loss)

  4.2 Net profit from discontinued
operations (“-” for net loss)

5. Other comprehensive income, net of
                                               8,987,973.00                    49,539,268.00
tax
  5.1 Items that will not be reclassified
                                                 641,118.00                    20,973,409.00
to profit or loss
        5.1.1 Changes caused by
remeasurements on defined benefit
schemes
        5.1.2 Other comprehensive income
that will not be reclassified to profit or       641,118.00                    20,973,409.00
loss under the equity method
        5.1.3 Changes in the fair value of
investments in other equity instruments
        5.1.4 Changes in the fair value
arising from changes in own credit risk

        5.1.5 Other

  5.2 Items that will be reclassified to
                                               8,346,855.00                    28,565,859.00
profit or loss
        5.2.1 Other comprehensive income
that will be reclassified to profit or loss    8,346,855.00                    28,379,224.00
under the equity method
        5.2.2 Changes in the fair value of
other debt investments
        5.2.3 Other comprehensive income
arising from the reclassification of
financial assets
        5.2.4 Credit impairment allowance
for other debt investments

        5.2.5 Reserve for cash flow hedges

        5.2.6 Differences arising from the


                                                                                             39
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translation of foreign
currency-denominated financial
statements

     5.2.7 Other                                                                             186,635.00

6. Total comprehensive income                         -68,296,826.00                      538,119,007.00

7. Earnings per share

   7.1 Basic earnings per share                                   N/A                               N/A

   7.2 Diluted earnings per share                                 N/A                               N/A


5. Consolidated Income Statement for Q1~Q3

                                                                                               Unit: RMB

                    Item                     Q1~Q3 2020                      Q1~Q3 2019

1. Total revenues                                   48,833,159,938.00                 58,904,374,914.00

  Including: Revenue                                48,709,987,251.00                 58,817,666,092.00

              Interest income                         123,172,687.00                       86,708,822.00

              Insurance premium income

              Fee and commission
income

2. Costs and expenses                               49,698,704,134.00                 59,149,896,807.00

  Including: Cost of sales                          43,507,752,953.00                 51,216,771,448.00

              Interest expense                            25,967,987.00                    13,129,607.00
              Fee and commission
expense

              Surrenders

              Net insurance claims paid

              Net amount provided as
insurance contract reserve
              Expenditure on policy
dividends
              Reinsurance premium
expense

              Taxes and levies                        147,380,452.00                      289,281,187.00

              Selling expense                         548,204,916.00                   2,582,419,684.00

              Administrative expense                 1,215,567,756.00                  1,559,794,269.00

              R&D expense                            2,800,775,204.00                  2,603,121,743.00

              Finance costs                          1,453,054,866.00                     885,378,869.00

                Including: Interest                  1,663,333,175.00                  1,531,338,739.00


                                                                                                        40
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expense

                                  Interest
                                                   297,750,444.00                   346,654,556.00
income

Add: Other income                                 1,254,526,018.00                1,439,033,065.00

         Return on investment (“-” for loss)    1,951,687,393.00                2,582,149,708.00

            Including: Share of profit or loss
                                                  1,293,666,489.00                1,050,534,922.00
of joint ventures and associates
              Income from the
derecognition of financial assets at
amortized cost (“-” for loss)

         Exchange gain (“-” for loss)                321,274.00                    -11,364,959.00

         Net gain on exposure hedges (“-”
for loss)

         Gain on changes in fair value (“-”
                                                   294,474,510.00                   360,480,571.00
for loss)

         Credit impairment loss (“-” for
                                                     7,074,256.00                   -21,601,368.00
loss)
         Asset impairment loss (“-” for loss)   -708,096,422.00                  -397,698,940.00

         Asset disposal income (“-” for
                                                       931,334.00                     2,171,307.00
loss)

3. Operating profit (“-” for loss)              1,935,374,167.00                3,707,647,491.00

Add: Non-operating income                          496,388,240.00                   128,111,130.00

Less: Non-operating expense                         31,308,402.00                    23,468,759.00

4. Gross profit (“-” for loss)                  2,400,454,005.00                3,812,289,862.00

Less: Income tax expense                           338,749,095.00                   324,875,555.00

5. Net profit (“-” for net loss)                2,061,704,910.00                3,487,414,307.00

  5.1 By operating continuity

        5.1.1 Net profit from continuing
                                                  2,061,704,910.00                2,155,327,307.00
operations (“-” for net loss)

        5.1.2 Net profit from discontinued
                                                                                  1,332,087,000.00
operations (“-” for net loss)

  5.2 By ownership
        5.2.1 Net profit attributable to
                                                  2,025,175,746.00                2,577,329,981.00
owners of the Company as the parent
        5.2.1 Net profit attributable to
                                                    36,529,164.00                   910,084,326.00
non-controlling interests
6. Other comprehensive income, net of
                                                   184,621,267.00                   486,458,995.00
tax

  Attributable to owners of the Company            220,697,688.00                   322,801,953.00


                                                                                                   41
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as the parent
     6.1 Items that will not be
                                                -26,301,283.00                   10,569,895.00
reclassified to profit or loss
         6.1.1 Changes caused by
remeasurements on defined benefit
schemes
         6.1.2 Other comprehensive
income that will not be reclassified to          -5,592,197.00                   26,584,508.00
profit or loss under the equity method
         6.1.3 Changes in the fair value of
                                                -20,709,086.00                   -15,116,675.00
investments in other equity instruments
         6.1.4 Changes in the fair value
arising from changes in own credit risk

         6.1.5 Other                                                               -897,938.00

     6.2 Items that will be reclassified to
                                               246,998,971.00                   312,232,058.00
profit or loss
         6.2.1 Other comprehensive
income that will be reclassified to profit      78,939,921.00                  -148,175,755.00
or loss under the equity method
         6.2.2 Changes in the fair value of
other debt investments
         6.2.3 Other comprehensive
income arising from the reclassification
of financial assets
         6.2.4 Credit impairment
allowance for other debt investments
         6.2.5 Reserve for cash flow
                                                48,139,564.00                   -81,314,957.00
hedges
         6.2.6 Differences arising from the
translation of foreign
                                               119,919,486.00                   541,722,770.00
currency-denominated financial
statements

         6.2.7 Other

  Attributable to non-controlling
                                                -36,076,421.00                  163,657,042.00
interests
7. Total comprehensive income                 2,246,326,177.00                3,973,873,302.00

  Attributable to owners of the Company
                                              2,245,873,434.00                2,900,131,934.00
as the parent
  Attributable to non-controlling
                                                   452,743.00                 1,073,741,368.00
interests

8. Earnings per share

  8.1 Basic earnings per share                         0.1563                           0.1946



                                                                                               42
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  8.2 Diluted earnings per share                                              0.1497                                         0.1902

Legal representative: Li Dongsheng                                                     Person-in-charge of financial affairs: Du Juan

Person-in-charge of the financial department: Xi Wenbo


6. Income Statement of the Company as the Parent for Q1~Q3

                                                                                                                          Unit: RMB

                     Item                                Q1~Q3 2020                                    Q1~Q3 2019

1. Revenue                                                            838,064,997.00                               1,307,562,446.00

Less: Cost of sales                                                   657,228,381.00                               1,147,964,483.00

        Taxes and levies                                                4,850,677.00                                   9,260,334.00

        Selling expense                                                12,141,079.00                                  19,930,919.00

        Administrative expense                                        274,612,165.00                                241,010,707.00

        R&D expense                                                    86,941,389.00                                  80,232,047.00

        Finance costs                                                 881,790,014.00                                650,227,534.00

          Including: Interest expense                            1,408,282,484.00                                  1,009,268,066.00

                        Interest income                               545,183,243.00                                396,745,068.00

Add: Other income                                                      15,329,412.00                                   4,958,600.00

         Return on investment (“-” for
                                                                 1,742,123,364.00                                  1,103,949,851.00
loss)

            Including: Share of profit or
                                                                      874,371,626.00                                887,726,773.00
loss of joint ventures and associates
              Income from the
derecognition of financial assets at
amortized cost (“-” for loss)

         Net gain on exposure hedges (“-”
for loss)

         Gain on changes in fair value (“-”
                                                                      102,312,826.00                                  44,716,834.00
for loss)
         Credit impairment loss (“-” for
                                                                         599,982.00                                    2,741,266.00
loss)
         Asset impairment loss (“-” for
loss)
         Asset disposal income (“-” for
                                                                           88,496.00                                256,615,165.00
loss)

2. Operating profit (“-” for loss)                                  780,955,372.00                                571,918,138.00

Add: Non-operating income                                             484,516,543.00                                  77,307,037.00

Less: Non-operating expense                                             8,488,739.00                                   9,065,602.00


                                                                                                                                   43
TCL Technology Group Corporation                                 Third Quarterly Report 2020


3. Gross profit (“-” for loss)              1,256,983,176.00                  640,159,573.00

Less: Income tax expense

4. Net profit (“-” for net loss)            1,256,983,176.00                  640,159,573.00

  4.1 Net profit from continuing
                                              1,256,983,176.00                  640,159,573.00
operations (“-” for net loss)

  4.2 Net profit from discontinued
operations (“-” for net loss)

5. Other comprehensive income, net of
                                                73,705,740.00                    81,669,317.00
tax
  5.1 Items that will not be reclassified
                                                 -5,592,197.00                   20,973,409.00
to profit or loss
      5.1.1 Changes caused by
remeasurements on defined benefit
schemes
      5.1.2 Other comprehensive income
that will not be reclassified to profit or       -5,592,197.00                   20,973,409.00
loss under the equity method
      5.1.3 Changes in the fair value of
investments in other equity instruments
      5.1.4 Changes in the fair value
arising from changes in own credit risk

      5.1.5 Other
  5.2 Items that will be reclassified to
                                                79,297,937.00                    60,695,908.00
profit or loss
      5.2.1 Other comprehensive income
that will be reclassified to profit or loss     79,297,937.00                    60,509,273.00
under the equity method
      5.2.2 Changes in the fair value of
other debt investments
      5.2.3 Other comprehensive income
arising from the reclassification of
financial assets
      5.2.4 Credit impairment allowance
for other debt investments

      5.2.5 Reserve for cash flow hedges

      5.2.6 Differences arising from the
translation of foreign
currency-denominated financial
statements

      5.2.7 Other                                                                   186,635.00

6. Total comprehensive income                 1,330,688,916.00                  721,828,890.00



                                                                                               44
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7. Earnings per share

    7.1 Basic earnings per share                                   N/A                              N/A

    7.2 Diluted earnings per share                                 N/A                              N/A


7. Consolidated Cash Flow Statement for Q1~Q3

                                                                                              Unit: RMB

                   Item                     Q1~Q3 2020                      Q1~Q3 2019

1. Cash flows from operating activities:

  Proceeds from sale of commodities
                                                   50,348,052,437.00                  62,445,844,833.00
and rendering of services
  Net increase in customer deposits and
deposits from other banks and financial             1,984,254,690.00                   1,726,469,676.00
institutions
  Net increase in borrowings from the
                                                         661,882,266.00                   90,420,078.00
central bank
  Net increase in loans from other
financial institutions
  Premiums received on original
insurance contracts

  Net proceeds from reinsurance
  Net increase in deposits and
investments of policy holders
  Interest, fees and commissions
                                                         123,172,687.00                   86,708,822.00
received
  Net increase in loans from other
banks and financial institutions
  Net increase in proceeds from
repurchase transactions
  Net proceeds from acting trading of
securities

  Tax and levy rebates                              2,691,374,733.00                   2,937,257,381.00

  Cash generated from other operating
                                                    1,704,768,084.00                   1,928,746,345.00
activities
Subtotal of cash generated from
                                                   57,513,504,897.00                  69,215,447,135.00
operating activities
  Payments for commodities and
                                                   36,638,895,339.00                  47,132,428,452.00
services
  Net increase in loans and advances to
                                                     -991,814,418.00                   3,849,847,076.00
customers
  Net increase in deposits in the central
                                                     -284,795,549.00                    -273,067,081.00
bank and other banks and financial


                                                                                                        45
TCL Technology Group Corporation                                 Third Quarterly Report 2020


institutions
  Payments for claims on original
insurance contracts
  Net increase in loans to other banks
and financial institutions

  Interest, fees and commissions paid

  Policy dividends paid

  Cash paid to and for employees             2,985,796,906.00                 3,548,355,254.00

  Taxes and levies paid                      3,682,068,200.00                 3,627,716,700.00

  Cash used in other operating
                                             3,612,284,290.00                 3,720,892,545.00
activities
Subtotal of cash used in operating
                                            45,642,434,768.00                61,606,172,946.00
activities
Net cash generated from/used in
                                            11,871,070,129.00                 7,609,274,189.00
operating activities
2. Cash flows from investing activities:

  Proceeds from disinvestment               17,115,227,387.00                18,373,451,069.00

  Return on investment                         783,085,375.00                   730,526,027.00

  Net proceeds from the disposal of
fixed assets, intangible assets and other          148,840.00                    92,766,770.00
long-lived assets
  Net proceeds from the disposal of
                                               303,139,290.00                   863,813,211.00
subsidiaries and other business units
  Cash generated from other investing
activities
Subtotal of cash generated from
                                            18,201,600,892.00                20,060,557,077.00
investing activities
  Payments for the acquisition of fixed
assets, intangible assets and other         23,959,069,555.00                14,853,883,306.00
long-lived assets

  Payments for investments                  34,796,469,202.00                24,810,844,947.00

  Net increase in pledged loans granted

  Net payments for the acquisition of
                                                                                170,197,901.00
subsidiaries and other business units
  Cash used in other investing
                                                23,279,913.00                 7,118,896,267.00
activities
Subtotal of cash used in investing
                                            58,778,818,670.00                46,953,822,421.00
activities
Net cash generated from/used in
                                            -40,577,217,778.00              -26,893,265,344.00
investing activities
3. Cash flows from financing activities:


                                                                                               46
TCL Technology Group Corporation                                          Third Quarterly Report 2020


  Capital contributions received                    3,262,240,000.00                   7,530,780,247.00

     Including: Capital contributions by
                                                    3,262,240,000.00                   7,523,571,607.00
non-controlling interests to subsidiaries

  Borrowings received                              53,060,270,869.00                  30,186,401,095.00

  Cash generated from other financing
                                                         473,470,318.00                2,017,417,200.00
activities
Subtotal of cash generated from
                                                   56,795,981,187.00                  39,734,598,542.00
financing activities

  Repayment of borrowings                          28,146,415,143.00                  23,925,281,321.00

  Interest and dividends paid                       4,080,360,106.00                   3,700,800,263.00

     Including: Dividends paid by
                                                         279,523,652.00                   99,072,668.00
subsidiaries to non-controlling interests
  Cash used in other financing
                                                    1,083,465,759.00                   2,150,539,531.00
activities
Subtotal of cash used in financing
                                                   33,310,241,008.00                  29,776,621,115.00
activities
Net cash generated from/used in
                                                   23,485,740,179.00                   9,957,977,427.00
financing activities
4. Effect of foreign exchange rates
                                                         -46,170,424.00                  657,452,489.00
changes on cash and cash equivalents
5. Net increase in cash and cash
                                                    -5,266,577,894.00                  -8,668,561,239.00
equivalents
Add: Cash and cash equivalents,
                                                   17,637,742,929.00                  25,702,383,482.00
beginning of the period
6. Cash and cash equivalents, end of the
                                                   12,371,165,035.00                  17,033,822,243.00
period


8. Cash Flow Statement of the Company as the Parent for Q1~Q3

                                                                                              Unit: RMB

                  Item                      Q1~Q3 2020                      Q1~Q3 2019

1. Cash flows from operating activities:
  Proceeds from sale of commodities
                                                         940,689,494.00                1,143,838,588.00
and rendering of services

  Tax and levy rebates                                     1,073,352.00                      690,755.00

  Cash generated from other operating
                                                    5,024,481,872.00                  14,276,992,714.00
activities
Subtotal of cash generated from
                                                    5,966,244,718.00                  15,421,522,057.00
operating activities
  Payments for commodities and
                                                         911,465,646.00                1,229,934,222.00
services



                                                                                                        47
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  Cash paid to and for employees               136,915,723.00                   120,421,860.00

  Taxes and levies paid                         21,333,420.00                    53,164,105.00
  Cash used in other operating
                                             1,310,184,966.00                 1,161,090,996.00
activities
Subtotal of cash used in operating
                                             2,379,899,755.00                 2,564,611,183.00
activities
Net cash generated from/used in
                                             3,586,344,963.00                12,856,910,874.00
operating activities

2. Cash flows from investing activities:

  Proceeds from disinvestment                7,079,430,025.00                13,841,885,978.00

  Return on investment                       5,373,342,218.00                   638,304,881.00
  Net proceeds from the disposal of
fixed assets, intangible assets and other              760.00                       141,657.00
long-lived assets
  Net proceeds from the disposal of
subsidiaries and other business units
  Cash generated from other investing
activities
Subtotal of cash generated from
                                            12,452,773,003.00                14,480,332,516.00
investing activities
  Payments for the acquisition of fixed
assets, intangible assets and other             33,750,534.00                     3,836,282.00
long-lived assets

  Payments for investments                  26,261,636,831.00                12,209,066,918.00

  Net payments for the acquisition of
subsidiaries and other business units
  Cash used in other investing
                                                23,279,913.00
activities
Subtotal of cash used in investing
                                            26,318,667,278.00                12,212,903,200.00
activities
Net cash generated from/used in
                                            -13,865,894,275.00                2,267,429,316.00
investing activities

3. Cash flows from financing activities:

  Capital contributions received                                                  7,208,640.00

  Borrowings received                       33,049,034,080.00                 9,058,956,000.00

  Cash generated from other financing
                                                60,300,000.00                 2,000,000,000.00
activities
Subtotal of cash generated from
                                            33,109,334,080.00                11,066,164,640.00
financing activities

  Repayment of borrowings                   19,697,628,200.00                12,740,956,000.00

  Interest and dividends paid                2,189,458,151.00                 2,202,303,594.00


                                                                                               48
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  Cash used in other financing
                                                                     77,117,687.00                          1,837,149,002.00
activities
Subtotal of cash used in financing
                                                                 21,964,204,038.00                         16,780,408,596.00
activities
Net cash generated from/used in
                                                                 11,145,130,042.00                          -5,714,243,956.00
financing activities
4. Effect of foreign exchange rates
                                                                    -12,865,485.00                            -27,037,253.00
changes on cash and cash equivalents
5. Net increase in cash and cash
                                                                   852,715,245.00                           9,383,058,981.00
equivalents
Add: Cash and cash equivalents,
                                                                  3,941,090,221.00                          1,328,680,629.00
beginning of the period
6. Cash and cash equivalents, end of the
                                                                  4,793,805,466.00                         10,711,739,610.00
period


II Adjustments to the Financial Statements

1. Adjustments to the Financial Statements at the Beginning of the First Execution Year (2020) of the New
Accounting Standards Governing Revenue and Leases

Consolidated balance sheet:
                                                                                                                     Unit: RMB

              Item                     31 December 2019               1 January 2020                    Adjustment

Current assets:

  Monetary assets                            18,648,184,663.00             18,648,184,663.00

  Settlement reserve

  Loans to other banks and
financial institutions
  Held-for-trading financial
                                              6,074,750,918.00              6,074,750,918.00
assets

  Derivative financial assets                  159,035,592.00                 159,035,592.00

  Notes receivable                             228,941,977.00                 228,941,977.00

  Accounts receivable                         8,340,353,992.00              8,340,353,992.00

  Receivables financing

  Prepayments                                  364,422,948.00                 364,422,948.00

  Premiums receivable

  Reinsurance receivables

  Receivable reinsurance
contract reserve

  Other receivables                           2,750,041,514.00              2,750,041,514.00



                                                                                                                             49
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     Including: Interest
receivable

                 Dividends
                                        5,771,104.00        5,771,104.00
receivable
  Financial assets purchased
under resale agreements

  Inventories                       5,677,963,123.00    5,677,963,123.00

  Contract assets

  Assets held for sale

  Current portion of
non-current assets

  Other current assets              5,911,827,639.00    5,911,827,639.00

Total current assets               48,155,522,366.00   48,155,522,366.00

Non-current assets:

  Loans and advances to
                                    3,637,768,065.00    3,637,768,065.00
customers

  Debt investments                    20,373,264.00       20,373,264.00

  Other debt investments

  Long-term receivables
  Long-term equity
                                   17,194,284,162.00   17,194,284,162.00
investments

  Investments in other equity
                                     279,883,515.00      279,883,515.00
instruments

  Other non-current financial
                                    2,542,689,268.00    2,542,689,268.00
assets

  Investment property                 82,272,964.00       82,272,964.00

  Fixed assets                     45,459,070,330.00   45,459,070,330.00

  Construction in progress         33,578,289,802.00   33,578,289,802.00

  Productive living assets

  Oil and gas assets

  Right-of-use assets

  Intangible assets                 5,684,584,119.00    5,684,584,119.00

  Development costs                 1,548,470,972.00    1,548,470,972.00

  Goodwill                              2,452,186.00        2,452,186.00

  Long-term prepaid
                                    1,567,690,992.00    1,567,690,992.00
expense

  Deferred income tax assets         840,874,034.00      840,874,034.00



                                                                                                         50
TCL Technology Group Corporation                                             Third Quarterly Report 2020


  Other non-current assets           4,250,658,887.00     4,250,658,887.00

Total non-current assets           116,689,362,560.00   116,689,362,560.00

Total assets                       164,844,884,926.00   164,844,884,926.00

Current liabilities:

  Short-term borrowings             12,069,657,099.00    12,069,657,099.00

  Borrowings from the
                                       573,222,113.00       573,222,113.00
central bank
  Loans from other banks
and financial institutions

  Held-for-trading financial
                                      188,220,097.00       188,220,097.00
liabilities

  Derivative financial
                                        84,704,591.00        84,704,591.00
liabilities

  Notes payable                      1,720,401,552.00     1,720,401,552.00

  Accounts payable                  11,549,133,141.00    11,549,133,141.00

  Advances from customers             141,748,956.00          5,499,574.00                 -136,249,382.00

  Contract liabilities                                     133,818,206.00                   133,818,206.00

  Financial assets sold under
repurchase agreements
  Customer deposits and
deposits from other banks            1,355,128,509.00     1,355,128,509.00
and financial institutions
  Payables for acting trading
of securities
  Payables for underwriting
of securities

  Employee benefits payable          1,094,216,685.00     1,094,216,685.00

  Taxes and levies payable            226,806,037.00       226,806,037.00

  Other payables                    12,293,565,901.00    12,293,565,901.00

     Including: Interest
payable

                 Dividends
                                        11,058,225.00        11,058,225.00
payable

  Fees and commissions
payable

  Reinsurance payables

  Liabilities directly
associated with assets held
for sale



                                                                                                           51
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  Current portion of
                                     1,691,963,496.00     1,691,963,496.00
non-current liabilities

  Other current liabilities             69,021,962.00        71,453,138.00                    2,431,176.00

Total current liabilities           43,057,790,139.00    43,057,790,139.00

Non-current liabilities:

  Insurance contract reserve

  Long-term borrowings              38,512,059,200.00    38,512,059,200.00

  Bonds payable                     16,479,085,461.00    16,479,085,461.00

     Including: Preference
shares
                    Perpetual
bonds

  Lease liabilities

  Long-term payables                    24,206,057.00        24,206,057.00

  Long-term employee
                                        23,017,619.00        23,017,619.00
benefits payable

  Provisions

  Deferred income                    1,912,421,056.00     1,912,421,056.00

  Deferred income tax
                                      952,677,822.00       952,677,822.00
liabilities
  Other non-current
                                          482,232.00           482,232.00
liabilities

Total non-current liabilities       57,903,949,447.00    57,903,949,447.00

Total liabilities                  100,961,739,586.00   100,961,739,586.00

Owners’ equity:

  Share capital                     13,528,438,719.00    13,528,438,719.00

  Other equity instruments

     Including: Preference
shares
                    Perpetual
bonds

  Capital reserves                   5,716,667,384.00     5,716,667,384.00

  Less: Treasury stock               1,952,956,751.00     1,952,956,751.00

  Other comprehensive
                                      -534,081,855.00      -534,081,855.00
income

  Specific reserve

  Surplus reserves                   2,238,368,089.00     2,238,368,089.00

  General reserve                         360,766.00           360,766.00



                                                                                                           52
TCL Technology Group Corporation                                                           Third Quarterly Report 2020


  Retained earnings                           11,115,149,885.00        11,115,149,885.00

Total equity attributable to
owners of the Company as                      30,111,946,237.00        30,111,946,237.00
the parent

Non-controlling interests                     33,771,199,103.00        33,771,199,103.00

Total owners’ equity                         63,883,145,340.00        63,883,145,340.00

Total liabilities and owners’
                                          164,844,884,926.00         164,844,884,926.00
equity


Balance sheet of the Company as the parent:
                                                                                                                 Unit: RMB

             Item                   31 December 2019              1 January 2020                    Adjustment

Current assets:

  Monetary assets                              3,966,899,016.00         3,966,899,016.00

  Held-for-trading financial
                                               2,969,105,570.00         2,969,105,570.00
assets
  Derivative financial assets

  Notes receivable                               22,514,486.00             22,514,486.00

  Accounts receivable                           445,089,599.00           445,089,599.00

  Receivables financing

  Prepayments                                    97,127,177.00             97,127,177.00

  Other receivables                           17,129,473,443.00        17,129,473,443.00

     Including: Interest
receivable

                  Dividends
                                               4,211,824,115.00         4,211,824,115.00
receivable

  Inventories                                    14,868,714.00             14,868,714.00

  Contract assets

  Assets held for sale

  Current portion of
non-current assets

  Other current assets                             6,471,074.00             6,471,074.00

Total current assets                          24,651,549,079.00        24,651,549,079.00

Non-current assets:

  Debt investments

  Other debt investments

  Long-term receivables


                                                                                                                         53
TCL Technology Group Corporation                                           Third Quarterly Report 2020


  Long-term equity
                                   39,297,272,437.00   39,297,272,437.00
investments

  Investments in other equity
                                      15,000,000.00       15,000,000.00
instruments

  Other non-current financial
                                    1,540,912,643.00    1,540,912,643.00
assets

  Investment property                 92,622,685.00       92,622,685.00

  Fixed assets                        54,238,373.00       54,238,373.00

  Construction in progress              1,241,308.00        1,241,308.00

  Productive living assets

  Oil and gas assets

  Right-of-use assets

  Intangible assets                   19,144,884.00       19,144,884.00

  Development costs

  Goodwill

  Long-term prepaid
                                     454,968,882.00      454,968,882.00
expense

  Deferred income tax assets

  Other non-current assets

Total non-current assets           41,475,401,212.00   41,475,401,212.00

Total assets                       66,126,950,291.00   66,126,950,291.00

Current liabilities:

  Short-term borrowings             6,484,481,271.00    6,484,481,271.00

  Held-for-trading financial
liabilities

  Derivative financial
                                        5,980,760.00        5,980,760.00
liabilities

  Notes payable                       30,282,528.00       30,282,528.00

  Accounts payable                   424,224,599.00      424,224,599.00

  Advances from customers             17,470,841.00           80,718.00                   -17,390,123.00

  Contract liabilities                                    17,390,123.00                    17,390,123.00

  Employee benefits payable          125,095,153.00      125,095,153.00

  Taxes and levies payable            10,354,865.00       10,354,865.00

  Other payables                    9,347,609,813.00    9,347,609,813.00

     Including: Interest
payable



                                                                                                         54
TCL Technology Group Corporation                                           Third Quarterly Report 2020


                    Dividends
                                       11,057,515.00       11,057,515.00
payable

  Liabilities directly
associated with assets held
for sale
  Current portion of
                                     847,326,922.00      847,326,922.00
non-current liabilities

  Other current liabilities

Total current liabilities          17,292,826,752.00   17,292,826,752.00

Non-current liabilities:

  Long-term borrowings              2,110,000,000.00    2,110,000,000.00

  Bonds payable                    16,479,085,461.00   16,479,085,461.00

     Including: Preference
shares
                    Perpetual
bonds

  Lease liabilities

  Long-term payables

  Long-term employee
                                      23,017,619.00       23,017,619.00
benefits payable

  Provisions

  Deferred income                     51,561,600.00       51,561,600.00

  Deferred income tax
liabilities
  Other non-current
liabilities

Total non-current liabilities      18,663,664,680.00   18,663,664,680.00

Total liabilities                  35,956,491,432.00   35,956,491,432.00

Owners’ equity:

  Share capital                    13,528,438,719.00   13,528,438,719.00

  Other equity instruments

     Including: Preference
shares
                    Perpetual
bonds

  Capital reserves                  8,382,776,032.00    8,382,776,032.00

  Less: Treasury stock              1,952,956,751.00    1,952,956,751.00
  Other comprehensive
                                      56,064,337.00       56,064,337.00
income


                                                                                                         55
TCL Technology Group Corporation                                                                       Third Quarterly Report 2020


  Specific reserve

  Surplus reserves                               2,036,303,650.00                   2,036,303,650.00

  Retained earnings                              8,119,832,872.00                   8,119,832,872.00

Total owners’ equity                          30,170,458,859.00                   30,170,458,859.00
Total liabilities and owners’
                                               66,126,950,291.00                   66,126,950,291.00
equity


2. Retrospective Adjustments to the Comparative Data of Prior Periods due to the First Execution in 2020
of the New Accounting Standards Governing Revenue and Leases


The Company has adopted since 1 January 2020 the Accounting Standard No. 14 for Business

Enterprises-Revenue revised by the Ministry of Finance in 2017.

As required by the new revenue standard, retained earnings and other relevant financial statement items at the

beginning of the period when the new revenue standard was first adopted (1 January 2020) should be adjusted

according to the cumulative effects arising from the first adoption of the new revenue standard, and data of the

comparable periods should not be adjusted.

When executing the new revenue standard, the Company considered adjustments only for the cumulative effects

in respect of the outstanding contracts on the date of the standard’s first adoption; and did not make retrospective

adjustments in respect of the changes that had occurred to contracts before the beginning of the earliest

comparable period or before the beginning of 2020, but according to the final arrangements of the contract

changes, identified the fulfilled and unfulfilled performance obligations, determined the transaction price and

distributed the transaction price to the fulfilled and unfulfilled performance obligations. The effects of the

adoption of the new revenue standard on the presentation of the balance sheet items as at the beginning of the

current period are as follows:


                                 Carrying amount as per the          Effect of            Effect of         Carrying amount as per the
           Item
                                  former revenue standard       reclassification       remeasurement         revised revenue standard

Advances from customers                       141,748,956.00        -136,249,382.00                                        5,499,574.00

Contract liabilities                                                133,818,206.00                                       133,818,206.00

Other current liabilities                       69,021,962.00          2,431,176.00                                       71,453,138.00




                                                                                                                                     56
TCL Technology Group Corporation                                                                  Third Quarterly Report 2020


III Independent Auditor’s Report

Indicate by tick mark whether the financial statements above have been audited by an independent auditor.

□Yes √ No

These financial statements have not been audited by such an auditor.




                                                                                                                                57

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