TCL Denies Rumor on LCD Panel Production Line Establishment

TCL Corporation (SZSE: 000100) clarified in a statement that it is still in discussions about making inroads into the LCD panel segment, but has not inked any cooperation or investment agreement with the third-party yet.

Since August 2009, some overseas LCD panel makers have successively unveiled their production line construction plans in the Mainland China, which will become the world's largest single LCD TV market and even outpace Europe in two or three years. However, the investments, which are led by overseas counterparts, will hardly to solve the essential problems in the domestic LCD panel industry, noted Li Dongsheng, board chairman for TCL.

Facing increasing competition, TCL never stops trying to extend its reach to LCD TV upstream segments. In January 2006, TCL set up a joint venture in cooperation with BOE Technology Group Co., Ltd. (SZSE: 000725), Skyworth, Changhong, Konka, and Shenzhen-based company, in a bid to team up with domestic companies to establish LCD panel production lines and enhance the competitiveness of their terminal products in the global market. However, the project so far has made no progress and made no investment in LCD panel production lines, TCL explained in the statement, adding that the company had discussions with major domestic players in the industry and local government, but did not reached an agreement.

The Mainland China is expected to reach LCD TV shipment of 22.60 million in 2009, according to a report by Displaybank, a leading display research institute. The number is predicted to hit 30.20 million in 2010, with a 34% rise year on year; and it will climb to 36.90 million in 2011.

In addition, the mainland is estimated to have a LCD TV penetration ratio of 50% in 2009, and the figure will jump to 84% in 2012, Displaybank said.

Days ago, the Chinese home appliance maker unveiled its third-quarter financial results. It reaped sales revenues of CNY 12.768 billion in July-September 2009, rising 26.16% from July-September 2008 and 34.26% from April-June 2009. Net profit arrived at CNY 54.49 million. After deducting non-recurring profit and loss, net profit swelled 169.08% year on year to CNY 37.4 million. Sales volume of LCD TVs surged 121% year on year to 2.597 million.

In the first three quarters of 2009, TCL gained sales revenues of CNY 29.846 billion, climbing 5.35% from the period last year. Net profit came to CNY 153 million. It had a LCD TV sales volume of 5.53 million in total, jumping 105.2% year on year.

(USD 1 = CNY 6.83)

Source: www.163.com (November 02, 2009)

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