2014

TCL COMMUNICATION TECHNOLOGY HOLDINGS LIMITED (02618.HK) Q1 2014 Results Presentation Hong Kong, 24 April, 2014

AGENDA

BUSINESS REVIEW & OUTLOOK

FINANCIAL HIGHLIGHTS

Q & A

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BUSINESS REVIEW & OUTLOOK

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•Sales volume: 13.6 million units, up 60% YoY (including 6.3 million units of smartphone & other smart devices, up 334% YoY)

•Revenue: HK$ 5.5 billion, up 126% YoY

•Net Profit: HK$ 180 million

•Basic EPS/(LPS): Increased to 15.05 HK cents from -21.82 HK cents YoY

Q1 2014 RESULTS

Q1 2014 OVERVIEW

•Ranked the 5th global handset manufacturer and was No. 1 among Chinese handset players in Q4 2013 (Source: Gartner)

•Keen demand despite traditional slack season in Q1

•Both revenue and profits significantly increased from Q2 2013 driven by strong smart devices sales momentum outperforming the market growth

•Gross margin stood at a healthy level of 19.6%, increased from 16.4% for the same period in 2013

•Product mix continued to improve. Newly launched advanced smart devices were well received in markets

•Selected as a constituent of the following indexes: Hang Seng Global Seng Broad Consumption Index

Seng Composite Index, Hang Seng Composite Industry Index - Information Technology and Hang Seng Composite SmallCap Index

BUSINESS OVERVIEW

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INDUSTRY RANKING NO. 5 GLOBAL HANDSET MANUFACTURER, NO. 1 CHINESE PLAYER

RANK COMPANY Q4 2013 SHIPMENTS (M UNITS)

Q4 2013 MARKET SHARE (%)

QoQ GROWTH RATE (%)

YoY GROWTH RATE (%)

1 Samsung 119.2 24.3 +1.8 +11.5

2 Nokia 63.6 13.0 +0.8 -25.3

3 Apple 50.2 10.2 +65.6 +15.6

4 LG 18.4 3.7 +1.8 +22.6

5 TCL-ALCATEL 17.6 3.6 +32.0 +58.3

6 Huawei 17.3 3.5 +27.7 +26.7

7 ZTE 16.3 3.3 +19.1 +1.0

8 Lenovo 13.6 2.8 +4.2 +63.2

9 Sony 10.4 2.1 +6.4 +30.6

10 Coolpad 8.4 1.7 -4.4 +36.2

Others 155.3 31.8 +0.2 -1.8

TOTAL 490.3 100.0 +7.6 +3.9

TOP-10 CELL PHONE BRANDS IN Q4 OF 2013 (Source: Gartner) (RANKING BY UNIT SHIPMENTS IN MILLIONS)

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•Gartner: TCL Communication has strong relationship with carriers, especially in LATAM; it also had success in EMEA with its launch of new products.

INDUSTRY RANKING NO.10 GLOBAL SMARTPHONE MANUFACTURER

TOP-10 SMARTPHONE BRANDS IN Q4 OF 2013 (Source: Gartner) (RANKING BY UNIT SHIPMENTS IN MILLIONS)

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RANK COMPANY

Q4 2013 Q4 2013 QoQ YoY

SHIPMENTS MARKET SHARE GROWTH RATE GROWTH RATE

(M UNITS) (%) (%) (%)

1 Samsung 83.3 29.5 +3.7 +29.2

2 Apple 50.2 17.8 +65.6 +15.6

3 Huawei 16.1 5.7 +37.6 +85.3

4 Lenovo 12.9 4.6 +0.1 +63.1

5 LG 12.8 4.5 +6.4 +59.5

6 ZTE 11.2 4.0 +21.9 +34.3

7 Sony 10.3 3.6 +8.6 +45.0

8 Coolpad 8.4 3.0 -1.0 +43.4

9 Nokia 8.2 2.9 -3.9 +15.6

10 TCL-ALCATEL 7.4 2.6 +58.9 +253.8

Others 61.5 21.8 -1.7 +37.7

TOTAL 282.3 100.0 +12.8 +35.9

AMERICAS 56%

EMEA 30%

APAC 10%

CHINA 4%

AMERICAS 59%

EMEA 28%

APAC 7%

CHINA 6%

FEATURE PHONES & OTHER PRODUCTS SMARTPHONES & OTHER SMART DEVICES

GEOGRAPHICAL REVENUE BREAKDOWN

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REGIONAL BUSINESS REVIEW

EUROPE, MIDDLE EAST

1.0 1.6

0.0

0.5

1.0

1.5

2.0

Q1 2013 Q1 2014

+60% Revenue (HK$ Billion)

•Shipments: 3.8 million units, up 28% YoY ; Revenue: HK$1.6 billion, up 60% YoY

•Smartphone & Other Smart Devices Shipments: 1.9 million units, up 174% YoY

•Ranked No. 3 in Eastern European, Middle East and Africa regions, and No. 5 in Russia in terms of sales volume in Q4 2013

•Q2 business plan: Expand the sales network to Nordic countries and launch more tablets & LTE smartphones

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AMERICAS

1.0 3.2

0.0

1.0

2.0

3.0

4.0

Q1 2013 Q1 2014

Revenue (HK$ Billion)

+233% •Shipments: 7.5 million units, up 90% YoY; Revenue: HK$3.2 billion,

up 233% YoY

•Smartphone & Other Smart Devices Shipments: 3.5 million units, up 1,228% YoY

•Migration of the user base from feature phones to smartphones accelerated the expansion

•Ranked No.1 in Central America, Pacific Islands and Caribbean; No. 2 in Mexico; No.4 in LATAM, No. 5 in North America in terms of sales volume in Q4 2013

•Q2 business plan: Consolidate position with the newly set up sales channels. Smartphones & tablets will be the growth driver

REGIONAL BUSINESS REVIEW

ASIA PACIFIC

•Shipments: 1.2 million units, up 151% YoY; Revenue: HK$ 0.4 billion, up 103% YoY

•Smartphone & Other Smart Devices Shipments: 0.5 million units, up 122% YoY

•Became the largest supplier of a tier-one operator in India and the Philippines; and ranked No. 2 in Malaysia in Q4 2013

•Q2 business plan: Widen sales channels in open markets and strengthen existing sales points

CHINA •Shipments: 1.1 million units, up 0.2% YoY; Revenue: HK$ 0.3 billion, up

16% YoY

•Smartphone & Other Smart Devices Shipments: 0.4 million units, up 51% YoY

•Smartphone sales increased area: Chongqing and the provinces of Jiangsu, Yunnan, Sichuan and Anhui

•Strategically partnered with online stores of China Mobile and Suning.com to promote iconic product, TCL S720T

•Q2 business plan: Strengthen sales points with operators &

0.2 0.4

0.0

0.2

0.4

0.6

Q1 2013 Q1 2014

+103%

0.3 0.3

0.0

0.2

0.4

Q1 2013 Q1 2014

Revenue (HK$ Billion)

+16%

Revenue (HK$ Billion)

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- STRATEGY

Advanced Smartphone

Cloud terminals / Smart Connectivity Devices

LTE/Tablet Entry-level Smartphone

EDGE Phone Advanced Feature Phone

Entry-level Feature Phone

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- 650MHz-1.5GHz Dual-core CPU Android 4.0 - 4.1 Windows

- Quad-core CPU 6.45mm Thickness Android 4.2 Firefox Cloud applications Multi-screen Wifi display on TV LTE

- - Tablets

Octa-core CPU Metal casing Wearable devices Android 4.4 4K video

- 500MHz-600MHz Android 2.1 - 2.3 3G

EDGE Qwerty keypad Multi-touch display Entry-level

Multi-touch Panel Technology

GPRS, Ultra-low cost Qwerty key pad

2007-08

SOUTH AMERICA

NORTH AMERICA

PRODUCTS SELECTED BY GLOBAL MAINSTREAM OPERATORS & DISTRIBUTORS

EMEA CHINA APAC

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NEW PRODUCTS

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Quad Core 1.2 GHz CPU display

Full lamination 8 Mpxl rear camera

LTE Cat4. NFC 2150mAh battery

7.4 mm thickness

Quad Core 1.2 GHz CPU 4.5 display Full lamination 8 Mpxl rear camera LTE Cat4. NFC 2000mAh battery 8.5 mm thickness

NEW PRODUCTS

Quad Core 1.5 GHz CPU with Dual SIM Mpxl Camera

Heavy Duty Battery: 3400 mAh Wireless Connection to TV with Wi-Fi Display

Bluetooth Enabled Phone Slim Capacitive Stylus and LED Magic Flip

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Color: Champagne Gold / Slate Quad Core 1.2 GHz CPU

13.1 Mpxl rear Camera Ultra Thin Body: 7.5 mm Wireless Connection to TV with Wi-Fi Display Aluminum Metal Frame Translucent upper and lower deco with LED lighting

NEW PRODUCTS

Quad Core 1.3 GHz CPU

Super thin: 7.9 mm Super light 325 g TV Mirror: Two Connectivity Modes:

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Dual Core 1.3 GHz CPU 1024X600 TFT Display

Super thin: 8.9 mm Super light : 285 g

Narrow Border Dedicated accessories

Two Connectivity Mode:

BRAND BUILDING & AWARDS IN EMEA & AMERICAS

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MWC 2014, Barcelona ONETOUCH IDOL X+ won the recognition in CES

Samba Party, Brazil Car Racing Sponsorship, Mexico One Direction Concert Sponsorship, LATAM

BRAND BUILDING IN APAC & CHINA

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4G Smart Device Strategy Press Conference, China

Product Promotion, Malaysia

Outdoor Billboard, Hong Kong

Cooperation with Handy, Hong Kong MTR Advertisement, Hong Kong

Spring Press Conference, China

GOAL & FORECAST

EXECUTION PLANS

CHALLENGES & OPPORTUNITIES

OUTLOOK

•2014 full year revenue growth target: Uplift from 35% to 45% versus 2013

• LTE smartphones and tablets are the main growth drivers in 2014

•65% of 2014 products portfolio supports LTE mode including both TDD-LTE and FDD-LTE

• In order to accommodate market needs, LTE smartphones and tablets includes entry-level and advanced segments

• Increase open market penetration and strengthen direct sales to major retailers and distributors

•Strengthen branding via digital and traditional platforms

•Mobile market is rapidly shifting to a new generation of 4G device. LTE will be a key growth driver

•Operators are warming, in particular, to tablet devices as they shift from traditional communications to personal digital life services providers

•Rapid and efficient execution is crucial to deliver business growth

•Competitive business environment; having brand recognition is the key

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•

devices which are designed as user platforms to connect to other services

•Optimize offline and online sales & marketing system via O2O platform

• Increase marketing efficiency via online sales and product development

FINANCIAL HIGHLIGHTS

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FINANCIAL HIGHLIGHTS

Revenue & Net Profit/(Loss) (HK$ Million)

Revenue (HK$ Million)

Q1 2013 Q1 2014

5,541

2,449

+126%

Q1 2014 Q1 2013 YOY (%)

Sales Volume

13,608 8,486 +60%

Sales Volume of Smartphone & Other Smart Devices

6,316 1,454 +344%

Total ASP (US$)

52.2 37.0 +41%

Revenue 5,541 2,449 +126%

Gross Profit % 19.6% 16.4% +3.2%

Net Profit/(Loss) 180 (247) N/A

Net Profit/(Loss)% 3.2% (10.1%) N/A

Basic Earnings/(Loss) Per Share (HK Cents)

15.05 (21.82) N/A

0.4 0.6 0.6 1.1

1.6 1.9

1.2

2.5

3.4

5.2

4.3

2.1 2.4

2.4 2.6

1.5

1.9 1.5

2.0

1.2

1.5

2.1

2.3

1.2

2.1

2.5 2.8

3.2

2.1

3.0 3.1

3.9

2.4

4.0

5.5

7.5

5.5

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

Q1 2011

Q22011

Q32011

Q42011

Q12012

Q22012

Q32012

Q42012

Q12013

Q22013

Q32013

Q42013

Q1 2014

Smartphone & Other Smart Devices Feature Phone & Other Products

Revenue HK$ Billion

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SUSTAINABLE REVENUE GROWTH QUARTERLY REVENUE OF HANDSETS & OTHER PRODUCTS

31.3

29.6

33.4

31.2

34.6 35.6

37.1 37.1 37.0

41.8

45.4

50.2

52.2

0.3% 1% 4%

6%

10%

14%

19% 17% 17%

27%

34%

40%

46%

0%

10%

20%

30%

40%

50%

25

30

35

40

45

50

55

Q1 2011

Q22011

Q32011

Q42011

Q12012

Q22012

Q32012

Q42012

Q12013

Q22013

Q32013

Q42013

Q1 2014

ASP Sales Proportion of Smartphone & Other Smart Devices

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BETTER SALES PRODUCT MIX & UPWARD ASP TREND SMARTPHONE SALES VOLUME PROPORTION & ASP GROWTH

ASP (USD) Sales Proportion of Smartphone & Other Smart Device (%)

GROSS MARGIN TREND GROSS MARGIN

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14.4%

17.0%17.9%

21.8%22.4%

21.9%

17.4%16.4%

18.4%19.6% 19.6% 19.6%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

2006 2007 2008 2009 2010 2011 2012 Q12013

Q22013

Q32013

Q42013

Q12014

Product Competitiveness

Economies of Scale

Pricing and Currency Strategy

Brand Value and Customer Relationship

Continuous Cost Down Effort

FINANCIAL POSITION HIGHLIGHTS STATEMENT OF FINANCIAL POSITION

(HK$ Million) 31 March 2014 31 December 2013 Change (%)

Non-current assets 2,710 2,557 +6%

Current assets

-Inventories 3,026 2,649 +14%

-Trade & factored receivables 5,089 6,036 -16%

-Other current assets 1,309 1,341 -2%

-Pledged deposits 1,482 1,698 -13%

-Cash and cash equivalents 432 142 +204%

Total current assets 11,338 11,866 -4%

Current liabilities

-Interest-bearing bank and other borrowings (3,504) (2,690) +30%

-Other current liabilities (4,191) (4,656) -10%

-Trade and notes payables (3,079) (3,875) -21%

Total current liabilities (10,774) (11,221) -4%

Net current assets 564 645 -13%

Total assets less current liabilities 3,274 3,202 +2%

Non-current liabilities (224) (289) -22%

Net assets 3,050 2,913 +5%

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KEY FINANCIAL RATIOS

* Calculated -bearing borrowings over total assets, excluding RMB foreign exchange program ** Excluding RMB foreign exchange program *** Excluding factored trade receivables **** Only inventories in factory

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31 March 2014 31 December 2013

Gearing Ratio * 19% 17%

Current Ratio ** 1.06 1.06

Trade Receivables Turnover Days*** 65 63

Inventories Turnover Days **** 38 39

NAV per share HK$ 2.59 HK$ 2.55

Q & A

25

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THANK YOU

DISCLAIMER

The information contained herein should not be utilized for any

legal purposes in regards to any investment decision

or results. In particular, this document does not constitute any

recommendation or invitation for subscribing for or sale and

purchase of any securities of TCL Communication Technology

Holdings Limited ( The Company hereby expressly

disclaims any liability for any loss or damage resulting from or in

connection with any reliance by any investor on the information

contained herein.

A number of forward-looking statements may be made during this

presentation. Forward-looking statements are any statements that

are not historical facts. These forward-looking statements are

based on the current expectations of the Company and there can

be no assurance that such expectations will prove to be correct.

Because forward-looking statements involve risks and uncertainties,

the actual results could differ materially from these

statements.

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