TCL 2003 net profit up 32 percent in 2003

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Last updated at: (Beijing Time) Friday, February 20, 2004

TCL 2003 net profit up 32 percent in 2003

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TCL Corp, the country's second-largest television and cellphone maker, posted an unaudited net profit of 560 million yuan (US$67.65 million) in 2003, up 32 per cent year-on-year, the company said in a statement Thursday.

It also has set a sales target of 51.7 billion yuan (US$6.25 billion), including overseas sales of US$2 billion in 2004, as it aims to build a global brand name after its merger with French electronic giant Thomson.

The company sold 11.59 million units of television sets last year, rising 44 per cent year-on-year.

Its sales of mobile phones reached 9.82 million units, up 57 per cent, the statement said.

Its A shares, open to select foreign investors, resumed trading following a one-day suspension sparked by reports of sales and earnings that were leaked to newspapers.

The statement also denied reports of its talks of reorganization with Hualing, a Hong Kong-listed electronic company and its plan to sell State-owned shares.

A spokesman from the company said the annual report is scheduled to be released on March 3.

Su Qing, an analyst from the Merchant Securities said TCL's good growth rate made its shares outperform in a flat stock market Thursday.

TCL rose 0.8 per cent to 8.76 yuan (US$1.06) yesterday. It was the most active counter on the southern Shenzhen bourse.

The shares have more than doubled from a January IPO price of 4.26 yuan (51 US cents).

Su said shares of TCL have been active because of its recent move to sign a co-operative agreement with Thomson.

"Its good operations and prospects will attract more investors," she said.

The Chinese electronics giant also aims to achieve sales of 70 billion yuan (US$8.46 billion) in 2005 and 150 billion yuan (US$18.12 billion) by 2010, according to earlier reports quoted by TCL President Li Dongsheng.

A TCL spokesman confirmed that TCL-Thomson Electronics will open its production in July as scheduled.

Li will head the new company, which is composed by the TV-manufacturing assets of TCL and French Thomson.

In November, TCL and Thomson announced plans to form a joint venture with TCL holding a 67 per cent controlling share. TCL bought most of Thomson's loss-making TV operations as well as its DVD player business. The two firms signed the framework agreement for the joint venture in January.

Despite being the world's biggest television manufacturer, the joint venture's profitability has come into the spotlight as the French company reported a US$100 million loss on its television and DVD operation in 2003.

Li said he is confident the venture will be profitable within a year.

The Sino-French company will produce between 19 million and 20 million TV sets a year, according to the spokesman.

TCL held about 20 per cent of the Chinese market last year, and aimed to increase overseas sales to 60 to 70 per cent of total sales.

Source: China Daily

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