TCL Display Announces 2016 Interim Results

For Immediate Release

TCL Display Technology Holdings LimitedAnnounces 2016 Interim Results* * * * * *Revenue Grew by 51.2% Year-on-Year to Approximately RMB1.45 Billion Optimised Product Structure to Increase Market Share

Financial Highlights (Unaudited)

(17 August 2016, Hong Kong) TCL Display Technology Holdings Limited ("TCL Display" or the "Group", Stock Code: 334) today announced its unaudited interim results for the six months ended 30 June 2016 ("the Review Period").

During the first half of 2016, the Group's total sales volume of display modules increased by 22.7% year-on-year to approximately 33.2 million units and the revenue grew by 51.2% to approximately RMB1.45 billion. Due to the increase in the cost of the main raw materials, namely LCD display panels, the gross profit margin of the Group's products fell to 3.1% for the Review Period compared to 6.6% for the previous year. In face of the sluggish growth in the global sales of smartphone, the Group enhanced its core competitiveness through product structure optimisation, and recorded a significant growth in the sales of display modules in the PRC, with sales volume reaching approximately 16 million units and sales revenue amounting to approximately RMB927 million, representing a year-on-year increase of 54.2% and 120.3% respectively. The Group has successfully climbed into the top 3 position among smartphone LCD display module manufacturers in the PRC, which demonstrated the Group's achievement in capturing the opportunities brought by industry consolidation, allowing the Group to further seize market share and strengthen its leading position.

During the Review Period, mobile phone display module products remained as the Group's main source of revenue. Benefited from the smart device customers' demand for high-end quality products, the Group recorded revenue from and sales volume of laminated module products of approximately RMB997 million and 12.9 million units respectively, representing a prominent increase of approximately 325% and approximately 452% year-on-year respectively; revenue from laminated module products as a percentage of the Group's total revenue accounted for 68.8%, up from approximately 24.5% compared to the previous year. Meanwhile, the Group recorded revenue from and sales volume of non-laminated module products of approximately RMB452 million and 20.2 million units respectively, representing a year-on-year decrease of approximately 37.6% and approximately 18.0%. The Group expects the trend of increasing demand for high-end laminated module products in the market to persist.

Following the success of on-cell embedded module products which commenced mass production last year, the Group's investments in the development of new technologies have gradually borne fruits. The first batch of in-cell embedded module products has already been delivered in June 2016. As the Group has successfully secured small supply of the low-temperature polysilicon ("LTPS") display panels required for the production of LTPS display modules from Wuhan China Star Optoelectronics Technology Co., Ltd. ("Wuhan CSOT"), which has launched the 6th generation LTPS display panel production line in February 2016 under the Project t3, the supply of LTPS display panels from Wuhan CSOT is expected to rise in the second half of 2016, allowing the Group to gain greater market share in the high-end products sector more effectively.

In order to capture the growing market demand for LTPS display modules more efficiently, the Group entered into a memorandum of understanding with Wuhan CSOT during the Review Period regarding the cooperation involving the formation of a joint venture with Wuhan CSOT. The joint venture will be engaged in the production of LTPS display modules and will operate 10 fully automated production lines of LTPS display modules for mobile phones, with an average annual production capacity of 50 million units of laminated display modules for mobile phones, with an aim to further propel profit growth.

Mr. LI Jian, Chief Executive Officer of TCL Display, expressed, "To be listed as the top 3 smartphone LCD display module manufacturers in the PRC is truly encouraging. With regard to the decline in gross profit during the Review Period, the Group is actively liaising with customer for adjustment of product prices and has made some progress. It is believed that such liaisons would help boost the growth of the Group's gross profit in the second half of 2016. Meanwhile, the Group has already made strategic deployments and tactic planning. With the successful formation of the vertical integrated supply chain with Wuhan CSOT, we hope to ensure a stable upstream supply of display panels. On the other hand, we look forward to smoothly materialising the formation of the joint venture with Wuhan CSOT, expanding its LTPS display module production scale, thereby benefiting from economies of scale and generating greater profits for the Group and its shareholders. Looking forward, we will continue to put resources into the research and development of display modules, strengthening the Group's product structure. We forecasts a continuous improvement in the sales of laminated display module products, which is expected to be the growth driver for the Group's future sales."

The Group's revenue and sales volume by product segments and their respective year-on-year changes during the Review Period are as follows:

-End-

About TCL Display

Headquartered in China, TCL Display Technology Holdings Limited (HKSE stock code: 334) is one of the major providers of small-to-medium-sized display modules (

For more information, please visit its website at www.tcldisplay.com.

Issued by Cornerstones Communications Ltd. on behalf of TCL Display Technology Holdings Limited. For further information, please contact:

Cornerstones Communications Limited Sam Choi / Wendy Lau / Edward Siu / Sharon Kwok Tel: (852) 2903 9289 / 2903 9286 / 2903 9299 / 2903 9288 Email: tcl.display@cornerstonescom.com