Dear Global Consumers, Shareholders, Partners, and All Our Dearest Employees,
In 2024, amidst a highly volatile global political and economic situation, with the development of markets and technologies constantly changing, AI has given the world boundless room for imagination. Risks and opportunities coexist, and we at TCL Electronics, relying on the wisdom, courage, and resilience of our entire staff, have navigated through the thorns and delivered a relatively satisfactory performance. In 2024, TCL Electronics' global revenue approached nearly HK$100 billion, with net profit doubling year-on-year. The mid-to-high-end product structure of our core businesses significantly improved, and new business segments have become new growth drivers. The global organisational structure and regional strategies have been reshaped, and the global capability building with a focus on long-term development has achieved key results, while operational efficiency centred on relative competitiveness was further optimised. The Company's growth has filled TCLers worldwide with confidence. Although the journey is long and arduous, the essence is always simple, we will steadfastly walk on the path of "globalisation" and "technologicalisation", keep users in mind, stay strategically determined, embrace transformation, and strive to inspire greatness. We will accumulate small victories into big triumphs, and potential energy into kinetic energy, thus accelerating our pace towards global leadership.
On behalf of the Board, I would like to express sincere gratitude to our global consumers, Shareholders, partners, and TCL Electronics' employees worldwide, as I present the annual results for the year of 2024.
Significant Improvement in Profitability with Global Scale Surged and Continuous Enhancement of Operational Efficiency, Maintaining High Dividend Policy to Reward Shareholders
The industry in which the Company's core products operate is a fully competitive and mature market, but the market demand is sufficiently large and steady. The upstream industry structure is further concentrated and stable, and the leading brands with advantages in vertically integrated supply chains and efficiency have a more competitive edge globally. Enterprises that adhere to long-term cultivation will mature like fine wine and thrive with time. In 2024, we achieved global scale surge, as the Company's total revenue increased by 25.7% year-on-year to HK$99.32 billion, of which revenue from the innovative business increased by 44.9% year-on-year to HK$27.01 billion. Operational efficiency continued to improve, with the overall expense ratio decreasing by 1.9 percentage points year-on-year to 11.8%. Profitability improved significantly, with the Company's net profit increasing by 123.6% year-on-year to HK$1.85 billion, and the adjusted profit attributable to owners of the parent increasing by 100.1% year-on-year to HK$1.61 billion.
We are grateful to every Shareholder who has accompanied us through the economic cycles. Every transaction represents a trust contract in TCL Electronics' future development. In 2024, we continued to practice long-termism and maintained our high dividend payout policy to reward Shareholders and share the Company's profits with them. To this end, the Board proposed a final dividend of HK31.80 cents per share for 2024, representing a dividend payout ratio reaching 50% of the adjusted profit attributable to owners of the parent.
Adhere to Mid-to-High-End Breakthroughs with Continuous Technological Innovation and Enhanced Product Competitiveness and User Experience
In 2024, adhering to the mission of creating value for consumers, we led the way with TV products and effectively implemented the "Mid-to-High-End + Large Screen" strategy. According to Omdia's data, in 2024, global shipment of TCL TV increased by 14.8% year-on-year to 29 million sets, with market share further increasing to 13.9%, ranking among the top two global TV brands. Notably, the proportion of high-end and large-screen products increased significantly, with global shipment of TCL Mini LED TV growing by 194.5% year-on-year to 1.7 million sets, driving the revenue from the large-sized display business to increase by 23.6% year-on-year to HK$60.11 billion. In terms of internet business, we focused on enhancing user experience and service, while strengthening overseas market penetration, with TCL Channel comprehensively upgraded. In 2024, revenue remained stable at HK$2.63 billion, with gross profit margin increasing by 1.3 percentage points year-on-year. Meanwhile, our innovative business reached a new level, with revenue scale increasing by 44.9% year-on-year to HK$27.01 billion and gross profit increasing by 30.5% year-on-year to HK$3.35 billion. Among them, the photovoltaic business adhered to the "Relatively Light Asset" model, emphasising quality operation and risk control. The business scale and quality entered the first tier in the industry, while its operational efficiency and profit quality continued to improve, building up capabilities as foundation for going global.
In terms of R&D and product innovation, we focused on enhancing product competitiveness and R&D efficiency, increasing investment in display technology, artificial intelligence, innovative scenarios, and technology standards, to improve user experience. In the field of artificial intelligence, we launched the TCL AI large language model, promoting deep integration of core products with DeepSeek, injecting powerful AI capabilities into product lines and businesses. At the same time, we adhered to the operational philosophy of "capital allocation and product reserves on a scale of five to ten years", exploring new scenarios and models for smart lifestyle. We continued to invest in areas such as audio equipment, e-sports monitors, and future smart glasses and AI robots, launching the world's first modular AI companion robot, TCL Ai Me. The RayNeo smart XR/AR glasses, of which the Company participated in the incubation, maintained industry-leading position, with its product competitiveness gaining wide recognition in the market. These will all become the Company's second growth curve in the future, and we will remain committed to long-term investment and await the rewards that time will bring.
Global Business Expansion by Constructing Corporate Moats with Long-Term Capability Building and Forging Relative Competitiveness through Leading Efficiency
The global market is like a vast ocean, and companies are like a fleet of ships sailing through the waves. We firmly believe that long-term strategic planning, organisational adaptation, and long-term capabilities built upon the organisation are necessary guarantees for an enterprise to set sail. We build corporate moats for long-term development through capabilities building and forge the Company's relative competitiveness by continuously improving efficiency. We also believe that "time is a friend to good companies and an enemy of mediocre ones" and emphasise focus on and investment in capability building day in and day out for decades.
We accelerated the global localisation layout, achieving effective implementation of "local brands with global influence", "local products from global supply", and "local talents of global layout". We intensified strategic supplier and channel cooperation, accelerated the global localisation of industrial layout and intelligent manufacturing investment, and optimised global logistics resources and warehouse networks, enhancing our global agile delivery and crisis management capabilities. We continued to promote digital transformation, and the effects of data-driven operations on efficiency improvement began to emerge. In terms of global marketing, we facilitated the effective improvement of global marketing efficiency and brand value through diversified sponsorships and global customer management. Earlier this year, TCL announced that it had officially become a Worldwide Olympic Partner. The Olympic spirit of "Faster, Higher, Stronger – Together" aligns perfectly with TCL's corporate spirit of embracing transformative innovation, pursuing excellence, and striving to inspire greatness, further activating our global brand vitality and potential. In terms of efficiency forging, we increased investment expenses, strictly controlled administrative expenses, and improved operational turnover, to pursue optimal cost control. The Company's global capabilities building and efficiency forging have gradually yielded good results, providing a foundation for long-term sustainable and high-quality development.
Upholding Green Operations, Focusing on Social Responsibilities, Adhering to Business Ethics to Create Long-Term Sustainable Value
The Company takes sustainable development as its core, actively fulfils its corporate social responsibility, and supports international initiatives such as the United Nations Global Compact (UNGC), reflecting its global responsibility and commitment. In terms of environmental aspect, the Company actively followed the goals of carbon peaking and carbon neutrality, reducing carbon emissions in production and operations, and promoting the low-carbon transition of the value chain. The core business has obtained the highest level B rating in CDP climate change management, and the small-and-medium-sized display business has again been awarded EcoVadis Gold rating, with the total score ranking among the top 5% globally. For social aspect, the Company gave back to the community which we rely on by actively participating in charitable donations and supporting vulnerable groups. We launched innovative products, paying attention to and improving the convenience and safety of use for the elderly and children. With an inclusive and open attitude, we widely attracted global talent, and carried out "TCL for Her" programme, supporting women's development. Regarding governance, the Company solidified the organisation for compliance management, promoted localised management of antimonopoly and anti-unfair competition, conducted anti-corruption themed presentations at supplier conferences, clarified the code of conduct for external partner enterprises, and incorporated ESG factors into supply chain management. The Company has received Hang Seng Index's ESG rating of A and has been included in the Hang Seng Corporate Sustainability Benchmark Index for several consecutive years. In the future, we will continue to be guided by sustainable development, improve our environmental, social and governance performance, and create long-term sustainable value for Shareholders, partners and all sectors of society.
True Global Leadership is to be Loved by Global Users, Respected by Global Peers, Taken Pride in by Global Employees, and Trusted by Global Capital
Building a high-rise begins with mounds of soil. After long-term development, the Company's leading scale effect has brought about a decrease in marginal costs, breakthroughs in the mid-to-high-end segment have increased our pricing power for end products, and long-term capabilities building has accumulated relative efficiency edge. Collaboration with upstream partners has gradually built a vertical industry ecosystem, and the business flywheel has driven the momentum of organic growth and incubation of new businesses. Our high-quality development path is becoming clearer, but there is still tremendous room for improvement to reach global leadership. Our fundamental vision is to become a true global leader, not only leading in market share or profitability, but more importantly, being able to attain global users' affection, global peers' respect, global employees' pride, and global capital's trust.
In the new year, by riding the strong winds and relying on bold spirit, TCL Electronics will spread its wings to soar over the highest mountain and continue to focus on the strategy of "Lead with Brand Value, Excel in Global Efficiency, Drive with Technology, Thrive on Global Vitality". While creating value for consumers at the core, we will adhere to mid-to-high-end development, continuously optimise our product portfolio, increase technology investment and reserves, implement regional positioning strategies, promote global localisation development, and accelerate more high-spiritedly towards true global leadership.
DU Juan
Chairperson
21 March 2025