TCL COMMUNICATION TECHNOLOGY HOLDINGS LIMITED

TCL通訊科技控股有限公司

(02618.HK)2009 Annual Results Presentation 2009 Annual Results Presentation

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Agenda

Business Review & Outlook

Q&A

Appendix: Corporate Information

Financial Highlights

3

Business Review

Business Recovery after the financial crisisTotal sales volume of 16.1 million units in 2009, an increase of 18% over 2008 and significantly exceeding the sales target of 10 million units for the year.Sales performance in both of overseas and China markets resumed to the levels seen before the financial tsunami.

Successful new product launch in mid to high-end segmentWhile solidified the existing low-end handsets business, successfully explored the mid to high-end product segments.QWERTY keypad OT-800 and touch screen OT-708 received favorable response from the market and in great demand.

Successful CB buyback and the rights issueGreatly strengthened the financial position with sufficient cash flow.

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Business Review (Cont’d)

Europe, Middle East and Africa (“EMEA”) • Shipments to Europe, the Middle East and Africa (“EMEA”) totaled 6.4 million units in

2009, a 19% increase over 2008.• The overwhelming market response to the OT-708 (“One Touch MINI”) series

predominately drove business growth in these areas.

Latin America (“LATAM”)• Sales volume in Latin America (“LATAM”) for 2009 reached 6.4 million units, an

increase of 7% over 2008.• the OT-800 (“Jade”) and OT-708 (“One Touch MINI”) handsets were the best-selling

products in the region and appealed to customers. They were particularly successful in Mexico.

The PRC• During the period under review, the Group achieved a satisfactory sales performance

in China. A total of 2.8 million units of handsets and accessories were sold last year, an increase of 61% over 2008.

• Positively enhanced efforts in R&D of 3G, and a series of projects already run for TD-SCDMA products.

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Sales Volume and Revenue (Handset and accessories)

Sales Revenue for Handset and Accessories in 2009 and 2008Sales Revenue for Handset and Accessories in 2009 and 2008

‘000 Units Y2009 Y2008 ChangeTotal 16,123 13,695 +18%

Overseas 13,351 11,969 +12%

The PRC 2,772 1,726 +61%

Sales Volume for Handset and Accessories in 2009 and 2008Sales Volume for Handset and Accessories in 2009 and 2008

HK $ Million Y2009 Y2008 ChangeTotal 4,361 4,538 -4%

Overseas 3,880 4,017 -3%

The PRC 481 521 -8%

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Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

400

650

900

1,150

1,400

1,650

1,900

2,150

2,400

2,650

ALCATEL TCL

Sales Volume in Y2009

’000 Units

Sales volume grew remarkably in the fourth quarter, increasing by 100% to 6.8 million units from the same period of 2008.

Sales volume of December 2009 hit single-month record high to 2.6 million units.

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Product Research & Development

In 2009, The Group launched a series of low to mid-end handsets to address the different needs of the low to mid-end market. The enriched product mix gave a boost to the Group’s overall sales volume.

The Group introduced a total of 17 models of Alcatel handsets and 2 models of TCL handsets in 2009.

Through cooperation with famous brands of fashions & accessories, it enriched handset design and made its product mix more diversified and competitive.

OT-708 (“One Touch MINI”) and OT-800 (“Jade”) series. These two models were very popular among customers and in great demand, and they have received an enthusiastic response from the market and were warmly accepted by a number of major telecommunications operators.

Positively enhanced efforts in R&D of 3G, and a number of 3G data cards were well received by customers; a series of projects already run for TD-SCDMA products.

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Y2010 New Product

9

Y2010 New Product (Cont’d)

10

Y2010 New Product (Cont’d)

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Y2010 New Product (Cont’d)

12

Y2010 New Product (Cont’d)

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Future Outlook

The Group will further strengthen and extend cooperation with major telecommunications operators.

While consolidating the low-end handset and accessory business, we will steadily explore mid to high-end markets.

The Group envisage stepping up efforts to receive more orders for the ODM business, which is forecast to experience robust growth in 2010 and hence drive overall sales volume and operating efficiency for the Group.

The Group will enhance efforts in R&D of 3G handsets and accessories, with the intention of launching Android-based and touch screen handsets. Meanwhile, we will continue to diversify our product line by stepping up efforts in developing products like data cards and multifunctional phones, etc.

In 2010, we will continue to raise our operating efficiency and to invigorate cost control and risk management, laying a solid foundation for sustainable business growth.

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Agenda

Business Review & Outlook

Q&A

Appendix: Corporate Information

Financial Highlights

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Income Statement Highlights

Income Statement HighlightsIncome Statement Highlights

(HK$ Million) Y2009 Y2008 Change

Sales Volume (‘000 Units) 16,123 13,695 +18%

EPS (HK$ Cents) (as restated) 2.51 3.11 -19%

Proposed final dividends per ordinary share (HK$ Cents) * 3.5 - N/A

Revenue 4,361 4,538 -4%

Average Selling Price (US$)

Gross profit 949 812 +17%

Gross profit （%) 22% 18% +4%

Profit/(loss) before effect of convertible bonds 88 0.4 +21,900%

Effects of convertible bonds (65) 28 N/A

Profit/(loss) after effect of convertible bonds 23 28 -18%

EBITDA before effect of convertible bonds 163 91 +80%

35 43 -19%

* The proposed final dividend for the year is subject to the approval of the Company's shareholders at the forthcoming AGM.

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Financial Position Highlights

Financial Position HighlightsFinancial Position Highlights(HK$ Million) 2009-12-31 2008-12-31 Change

Non-current assets 488 528 -8%

Current assets 6,278 4,037 +56%

-Inventory 448 230 +95%

-Restricted deposits received from rights issue excess application 1,604 - N/A

-Other payable arising from rights issue excess application (1,604) - N/A

-Other current assets 565 616 -8%

-Cash and cash equivalents 1,170 684 +71%

-Trade receivable 1,304 837 +56%-Pledged deposit 1,187 1,670 -29%

-Interest bearing bank borrowings (1,461) (1,867) -22%

-Convertible bonds - (142) N/A

-Trade and notes payable (1,074) (591) +82%

-Other current liabilities (1,171) (891) +31%

Current liabilities (5,310) (3,349) +59%

Net current assets 968 688 +41%

Non-current liabilities (361) (151) +139%

-Other non-current liabilities (361) (9) +3,900%Net assets 1,095 1,065 +3%

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Key Sales Figures

Sales Volume by Geographic Segments

in Y2009 & Y2008

Revenue by Geographic Segments

in Y2009 & Y2008

Y2009

The PRC 11%

Overseas 89%

Y2008

The PRC 11%

Overseas 89%

The PRC 17%

Overseas 83%

Y2009

The PRC 13%

Overseas 87%

Y2008

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Sales Volume Recovery

Despite the negative effect from global financial tsunami in the 1H 2009, company’s recovery started in Jun 2009 and immediately turn into significant growth mode.

FY 2009 sales volume significantly increased by 18% over 2008, to 16.1million units.

Sales Volume (’000 units)

3,374 3,342 3,547 3,432

2,2762,782

4,240

6,825

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

1Q 2008 2Q 2008 3Q 2008 4Q 2008 1Q 2009 2Q 2009 3Q 2009 4Q 2009

1919

GP %

GP 18% GP 22%

Uptrend in GP%

22%

18%17%

14%

10%

15%

20%

25%

Y2006 Y2007 Y2008 Y2009

GP%

2020

Turnaround in Profitability

Profit before tax and effect of CB (HK$ million)Gross Profit (HK$ million)

85112

236

516

-

100

200

300

400

500

600

09Q1 09Q2 09Q3 09Q4(42)

314

124

(60)

(40)

(20)

0

20

40

60

80

100

120

140

09Q1 09Q2 09Q3 09Q4

HK$ Million HK$ Million

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Key Financial Ratios

Successfully completed the early buyback of all outstanding CB in mid 2009, eliminated the dilution effect and improved the financial position.

Successfully improved the company’s cash position by raising HK$358 million in January 2010 through rights issue.

2009 2008

Current Ratio 1.18 1.21

Account Receivable Turnover Days 81 85

Inventory Turnover Days* 18 19

Cash and cash equivalents (HK$ million) 1,170 684

Convertible Bonds (HK$ million) - 142

* Finished goods only

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Agenda

Business Review & Outlook

Q&A

Appendix: Corporate Information

Financial Highlights

23

Q & A

For further enquiries:

Mr. Andrew YipTel: (86) 755 3331 3019

Ms. Cherry PangTel: (86) 755 3331 3171

Email: ir.tclcomm@tcl.com

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Agenda

Business Review & Outlook

Q&A

Appendix: Corporate Information

Financial Highlights

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Company Overview

Principal Business

Research & Development, manufacturing and global sales of mobile phones and accessories of two key brands:

– ”TCL” (in China)– ”ALCATEL” (in Europe, Middle East, Africa, Americas, Asia-Pacific and China)

BackgroundA member of TCL Corporation

Listed on the Hong Kong Stock Exchange in Sep. 2004 (02618 HK)

TCL COMMUNICATION TECHNOLOGY HOLDINGS LIMITED(02618. HK)

Mr. LI DongshengChairman & ED

Public Shareholders

2.53% 50.70%

TCL Corporation

46.63%

Mr. GUO AipingCEO & ED

Huizhou Investment Holding Ltd

PhilipsTCL Employee

CommitteeOther & PublicMr. LI Dongsheng

0.14%

*The above information was updated to 28 February 2010.

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Strong Brands Power

TCL Brand established since 1981 as a leading electronics brand in PRC

No.1 of 2002 Deloitte Technology Fast 500 Asia Pacific Winners

Total estimated brand value of RMB40.1bn and ranked the 3rd Most Valuable Brand in China according to China Most Valuable Brand survey in 2007

Established in France since 1898

World widely accepted by its fame and great reputation

Typical brand in Europe’s telecommunication industry

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Global Presence

ProductionFacilities, R&D Centers, Sales Offices

Headquartered in Shenzhen, China

Global research facilities located in Shenzhen, Shanghai and Huizhou

Global factory located in Huizhou

Global presence across over 80 countries and regions

65 repair centers, over 50 offices, over 4,000 employees around the world

Shenzhen:- Headquarter- R&D Center

Huizhou:- Global factory- R&D Center

Shanghai:- R&D Center

Paris:- Sales Center

Mexico City:- Sales Center

2828

Product Mix

Market segments

GP Margin

High end

Mid end

Low end

HighMidLow

Existing

29

3030

Strong R&D Capability

More than 700 highly skilled and experienced research engineers distributed in Shanghai, Shenzhen and HuizhouThe ownership of GSM core technological patents obtained through acquisition of ALCATEL mobile phone businessOne of the few companies who own 2G, 2.5G, 2.75G core patents in the world, excellent tradition of research and developmentAble to provide solutions to GSM, GPRS, EDGE, CDMA, WCDMA, TD-SCDMA independentlyStart to work on 3G, projects already run for TD-SCDMA productsFocus on innovation as well as the high quality of our products

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High efficient Production Facilities

Production capacity of approximately 30 million units annually

World-class SMT production lines and supporting facilities

Experience of efficient global logistics

Strict tests by key telecommunication operators in the world

ISO9001 and ISO14001 qualified

Testing & manufacturing capability for platform TI, MTK, ADI & QUALCOMM

Manufacture center in Huizhou, China

SMT production line Testing centre

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Alliances with Major Operators

USA

LATAM

China

APAC

EMEA

3333

Experienced Senior Management Team

Chairman

Mr. Li Dongsheng

CEO George Guo

GSMJiyang Wang

GMCXiaobin Lv

AmericasNicolas Zibell

APACAlbert Wong

EMEAYves Morel

CDMABing Li

BDLVittorio

Di Mauro

ChinaWanquan

Huang

QMS & GCSLaurent Labbe

CMDRonald Hu

LegalStephen Chiang

PLM BPS Sales HQOperation

TD-SCDMAKailong

Wang

GAMEric Vallet

E-CommerceFeng Xiao

PSMMichael Chen

PlanningAnnie Tang

Global Product Marketing

Violetta Jovanovic

GSJames Zhang

ODMHaizhen Niu

ACERichard Yan

KASGeorge Guo

SWLHarry Au

NO.2 Creative Center

Davy Xu

CEO OfficeWubin Sun

IS/ITWanquan

Huang

HRVanessa Wang

FinanceThomas Liu

NO.3Creative Center

EXCOM

*The above information was updated to 28 February 2010.

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Thank you