Third Quarter Report 2019 of TCL Corporation TCL
集团股份有限公司
TCL CORPORATION
Third Quarter Report 2019
31 October 2019
Third Quarter Report 2019 of TCL Corporation Part I Important Notes, Table of Contents and Definitions
The Board of Directors (or the “Board”), the Supervisory Committee as well as the directors, supervisors and senior management of TCL Corporation (hereinafter referred to as the “Company” or the “Group”) hereby guarantee the factuality, accuracy and completeness of the contents of this Report and its summary, and shall be jointly and severally liable for any misrepresentations, misleading statements or material omissions therein.
All theCompany’s directors have attended the Board meeting for the review of this Report and its summary.
Mr. Li Dongsheng, Chairman of the Board of the Company, and Ms. Du Juan, Principal in charge of accounting (CFO), and Mr. Xi Wenbo, head of the financial department, hereby guarantee that the financial statements carried in this Report are factual, accurate and complete.
Third Quarter Report 2019 of TCL Corporation Table of Contents
Part I Important Notes, Table of Contents and Definitions ................................................ 2 Part II Key Corporate Information ........................................................................................ 4 Part III Management Discussion and Analysis ........................................................................ 4 Part IV Significant Events .......................................................................................................... 7 Part V Financial Statements .................................................................................................... 13
Third Quarter Report 2019 of TCL Corporation Definitions
|||
|-|-|
|Term|Definition|
|The “Company”, the “Group”|TCL Corporation|
|The “Reporting Period”|The period from 1 July 2019 to 30 September 2019|
|Reference Basis or Reference Report|Excluding the impact of restructuring business data, the Company prepares the|
||financial report for Q1~Q3 2019 and the corresponding period of prior year|
||according to the consolidation scope after restructuring.|
|Reorganization|The Company held the 13th meeting of the 6th Board of Directors on 7 December|
||2018 and held the 1st Extraordinary Shareholders’ General Meeting of on 7|
||January 2019 to review and approve the relevant proposals and implementation|
||of major asset restructuring matters.|
|CSOT|Shenzhen China Star Optoelectronics Technology Co., Ltd.|
|Wuhan CSOT|Wuhan China Star Optoelectronics Technology Co., Ltd.|
|Highly|Highly Information Industry Co., Ltd., a majority-owned subsidiary of the|
||Company listed on the National Equities Exchange and Quotations (stock code:|
||835281)|
|Guangdong Juhua|Guangdong Juhua Printed Display Technology Co., Ltd.|
|China Ray|Guangzhou China Ray Optoelectronic Materials Co., Ltd.|
|Bank of Shanghai|Bank of Shanghai Co., Ltd. (stock code: 601229.SH), with the Company|
||holding a 5.14% interest|
|712 Corp.|Tianjin 712 Communication & Broadcasting Co., Ltd. (stock code:|
||603712.SH), with the Company holding a 19.07% interest as its second largest|
||shareholder|
|Fantasia|Fantasia Holdings Group Co., Limited (stock code: 01777.HK), with the|
||Company holding a 20.08% interest as its second largest shareholder|
|Admiralty Harbour Capital|Admiralty Harbour Capital Limited|
|China Innovative Capital Management|China Innovative Capital Management Limited|
|Open Edutainment|Beijing National Center for Open & Distance Education Co., Ltd.|
|t1 project|The generation 8.5 (or G8.5) TFT-LCD production line of CSOT|
|t2 project|The generation 8.5 (or G8.5) TFT-LCD production line of CSOT|
|t3 project|The generation 6 (or G6) LTPS-LCD panel production line of CSOT|
|t4 project|The generation 6 (or G6) flexible LTPS-AMOLED panel production line of|
||CSOT|
|t6 project|The generation 11 (or G11) new TFT-LCD production line of CSOT|
|t7 project|The generation 11 (or G11) new ultra-high-definition (UHD) TFT-LCD and|
||AMOLED production line of CSOT|

Third Quarter Report 2019 of TCL Corporation Part II Key Corporate Information
I. Key Financial Information
Indicate by tick mark whether there is any retrospectively restated datum in the table below.
□ Yes■ No
||||||
|-|-|-|-|-|
|SN|Item|Q1~Q3 2019|Q1~Q3 2018|Change (%)|
|1|NoteOperating revenue (RMB)|58,817,666,092|82,237,144,880|-28.48|
|2|EBITDA (RMB)|11,628,483,268|10,980,668,039|5.90|
||Net profit (RMB)|3,487,414,307|2,875,954,102|21.26|
||Net profit attributable to the listed|2,577,329,981|2,489,661,515|3.52|
||company’s shareholders (RMB)||||
|3|||||
||Net profit attributable to the listed|503,396,307|1,594,799,286|-68.44|
||company’s shareholders before non-||||
||recurring gains and losses (RMB)||||
||Basic earnings per share (RMB/share)|0.1946|0.1842|5.65|
|4|||||
||Diluted earnings per share (RMB/share)|0.1902|0.1840|3.37|
|5|Weighted average return on equity (%)|8.85|8.65|0.2|
||Net cash generated from/used in operating|||0.70|
|||7,609,274,189|7,556,432,868||
||activities (RMB)||||
|6|||||
||Net cash per share generated from/used in|||0.70|
|||0.5616|0.5577||
||operating activities (RMB/share)||||
|||30 September 2019|31 December 2018|Change (%)|
|7|Total assets (RMB)|161,733,012,431|192,763,941,739|-16.1|
||Total owners’ equity (RMB)|64,194,513,642|60,871,672,647|5.46|
|8|Owners’ equity attributable to the listed|30,402,435,279|30,494,364,951||
|||||-0.30|
||company’s shareholders (RMB)||||
|9|Share capital (share)|13,549,648,507|13,549,648,507|0.00|
||Equity per share attributable to the listed|2.2438|2.2506||
|10||||-0.30|
||company’s shareholders (RMB/share)||||

Note: In April 2019, the Company completed the handover of major assets in a restructuring. Therefore, the operating revenue data ofQ1~Q3 2019 andQ1~Q3 2018 are not comparable as the former only includes the January-March 2019 operating revenue generated by the said assets, while the latter comprises the January-September 2018 such revenue. On the reference basis, theQ1~Q3 2019
operating revenue would be up by19.23% year-on-year.
The total share capital at the end of the last trading session before the disclosure of this Report:
Third Quarter Report 2019 of TCL Corporation
|||
|-|-|
|Total share capital at the end of the last trading||
||13,528,438,719|
|session before the disclosure of this Report (share)||

Fully diluted earnings per share based on the latest total share capital above:
|||
|-|-|
|Fully diluted earnings per share based on the latest||
||0.1905|
|total share capital above (RMB/share)||

Note: After the restructuring, the Company has transformed into a global high-tech conglomerate concentrating on the semi-conductor display and materials business. The key operational philosophy and mission of the Company is to create value for and grow with the shareholders. In order to effectively protectshareholders’ interests and improve shareholder value, the Company carried out a share repurchase programme during the Reporting Period. Up to the disclosure date of this Report, 502,108,222 shares have been repurchased, of which 3,875,613 shares have been used for the 2019 Restricted Stock Incentive Plan which is the Second Global Innovation Partner Plan, 33,391,897 shares have been used for the Second Global Partner Plan with the relevant non-transaction transfer already completed, and the rest will be kept as treasury shares and used for employee stock ownership plans, equity incentive plans or convertible bonds. The key financial information ofQ1~Q3 2019 andQ1~Q3 2018 exclusive of the effects of the businesses of the restructuring (pro forma data presented based on the consolidation scope after the restructuring) is as follows:
||||||
|-|-|-|-|-|
|Series|||||
||Item|Q1~Q3 2019|Q1~Q3 2018|Change (%)|
|No.|||||
|1|Operating revenue (RMB)|41,155,521,088|34,516,849,258|19.23|
|2|EBITDA (RMB)|11,185,231,704|8,512,067,043|31.40|
||Net profit (RMB)|3,393,704,069|2,450,815,301|38.47|
|3|Net profit attributable to the listed|2,577,342,044|2,160,702,740|19.28|
||company’s shareholders (RMB)||||
||Net profit attributable to the listed|566,036,298|1,259,589,648||
||company’s shareholders before non-|||-55.06|
||recurring gains and losses (RMB)||||
||Basic earnings per share (RMB/share)|0.1946|0.1599|21.70|
|4|||||
||Diluted earnings per share (RMB/share)|0.1902|0.1596|19.17|
|5|Weighted average return on equity (%)|8.85|7.08|1.77|

 Note: The data ofQ1~Q3 2019 andQ1~Q3 2018 in the table above exclude the results of the businesses of the restructuring. Non-recurring gains and losses:
Unit: RMB
||||
|-|-|-|
|Item|Q1~Q3 2019|Note|
|Gain or loss on disposal of non-current assets (inclusive of|||
||1,306,635,794|N/A|
|impairment allowance write-offs)|||
|Government subsidies charged to current profit or loss (exclusive|||
|of government subsidies given in the Company’s ordinary course|866,210,360|N/A|
|of business at fixed quotas or amounts as per government’s|||

Third Quarter Report 2019 of TCL Corporation
||||
|-|-|-|
|uniform standards)|||
|Gain or loss on fair-value changes in trading financial assets and|||
|liabilities & investment income from disposal of trading financial|||
|assets and liabilities and available-for-sale financial assets|161,115,198|N/A|
|(exclusive of effective portion of hedges that arise in the|||
|Company’s ordinary course of business)|||
|Other|103,020,541|N/A|
|Less: Corporate income tax|133,708,269|N/A|
|Minority interests (net of tax)|229,339,950|N/A|
|Total|2,073,933,674|--|

Explain the reasons if the Company classifies an item as a non-recurring profit/loss according to the definition in the<Explanatory Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to thePublic—Non-Recurring Profits andLosses>, or classifies any non-recurring profit/loss item mentioned in the said explanatory announcement as a recurring profit/loss item□ Applicable■ N/A
No such cases for the Reporting Period.
II. Numbers of Ordinary Shareholders and Preferred Shareholders with Resumed Voting Rights as well as Holdings of Top 10 Shareholders
Unit: share
||||||||||
|-|-|-|-|-|-|-|-|-|
|||||Number of preferred|||||
|Number of ordinary shareholders||489,699||shareholders with resumed|||-||
|||||voting rights (if any)|||||
|Top 10 shareholders|||||||||
|Name of|Nature of|Shareholding||||Shares in pledge or frozen|||
||||Number of shares||Restricted shares||||
|shareholder|shareholder|percentage%||||Status||Status|
|Li Dongshengand his acting-in-concert parties|Domestic naturalperson|9.02|1,221,748,009||609,636,366|Li Dongsheng In|||
|||||||||579,480,000|
|||||||pledge|||
|||||||Jiutian Liancheng|||
|||||||||408,899,521|
|||||||In pledge|||
|HuizhouInvestmentHolding Co., Ltd.|State-owned legalperson|6.48|878,419,747||||||
|HubeiChangjiang HezhiHanyi EquityInvestment FundPartnership|Domestic non-state-owned legalperson|4.97|673,965,188||||||

Third Quarter Report 2019 of TCL Corporation
|||||||
|-|-|-|-|-|-|
|(LimitedPartnership)||||||
|China SecuritiesFinanceCorporationLimited|Domestic non-state-owned legalperson|2.75|373,231,553|||
|XinjiangDongxing HuaruiEquityInvestmentPartnership(LimitedPartnership)|Domestic non-state-owned legalperson|1.85|250,726,210|||
|Hong KongSecuritiesClearingCompany Ltd.|Foreign legalperson|1.79|242,181,788|||
|Central HuijinAssetManagement Co.,Ltd.|State-owned legalperson|1.52|206,456,500|||
|GuangdongGuangxinHoldings GroupLtd.|State-owned legalperson|1.09|147,760,683|||
|XiaomiTechnology Co.,Ltd.|Domestic non-state-owned legalperson|1.00|134,949,437|||
|CDB InnovationCapital Co., Ltd.|State-owned legalperson|0.87|118,065,919|||
|Top 10 unrestricted shareholders||||||
|||||Type of shares||
|Name of shareholder||Unrestricted shares||||
|||||Type|Shares|
|Huizhou Investment Holding Co.,Ltd.||878,419,747||RMB-||
|||||denominated|878,419,747|
|||||ordinary stock||
|Hubei Changjiang Hezhi HanyiEquity Investment Fund Partnership(Limited Partnership)||673,965,188||RMB-||
|||||denominated|673,965,188|
|||||ordinary stock||
|Li Dongsheng and his acting-in-||612,111,643||RMB-|612,111,643|

Third Quarter Report 2019 of TCL Corporation
|||||
|-|-|-|-|
|concert parties||denominated||
|||ordinary stock||
|China Securities FinanceCorporation Limited|373,231,553|RMB-||
|||denominated|373,231,553|
|||ordinary stock||
|Xinjiang Dongxing Huarui EquityInvestment Partnership (LimitedPartnership)|250,726,210|RMB-||
|||denominated|250,726,210|
|||ordinary stock||
|Hong Kong Securities ClearingCompany Ltd.|242,181,788|RMB-||
|||denominated|242,181,788|
|||ordinary stock||
|Central Huijin Asset ManagementCo., Ltd.|206,456,500|RMB-||
|||denominated|206,456,500|
|||ordinary stock||
|Guangdong Guangxin HoldingsGroup Ltd.|147,760,683|RMB-||
|||denominated|147,760,683|
|||ordinary stock||
|Xiaomi Technology Co., Ltd.|134,949,437|RMB-||
|||denominated|134,949,437|
|||ordinary stock||
|CDB Innovation Capital Co., Ltd.|118,065,919|RMB-||
|||denominated|118,065,919|
|||ordinary stock||
||Being acting-in-concert parties upon the signing of the Agreement on Acting in Concert, Mr.|||
|Related or acting-in-concert parties||||
||Li Dongsheng and Xinjiang Jiutian Liancheng Equity Investment Partnership (Limited|||
|among the shareholders above||||
||Partnership) are the biggest shareholder of the Company with a total of 1,221,748,000 shares.|||
|Shareholders involved in securities||||
||N/A|||
|margin trading (if any)||||

2. Number of Preferred Shareholders and Shareholdings of Top 10 of Them
□ Applicable■ N/A
Third Quarter Report 2019 of TCL Corporation Part III Management Discussion and Analysis
I. Overview
The Company focused on its core business and achieved solid growth in operating results. This April, TCL successfully spin-off the intelligent terminal and supporting business in restructuring and fully transformed into a global high-tech conglomerate focusing on the semi-conductor display and materials business. During Q1-Q3 2019, on a reference basis, the Company achieved operating revenue of 41.16 billion, up by19.2% year-on-year; and a net profit of 3.39 billion, representing a year-on-year growth of38.5%, of which the net profit attributable to the listedcompany’s shareholders amounted to2.58 billion, up by19.3% year-on-year.
Affected by global economic growth slowly and concentrated release of capacity in panel industry, global semi-conductor display industry has continued over-supplying , the price of large-sized panel has declined continuouslyand overseas panel manufacturers has faced greater losses, which accelerated industrial restructuring and shuffling. Chinese enterprises are enjoying increasingly prominent advantages in business scale and efficiency in display industry, with the industrial chain has accelerated transforming into china, the development of new technologies has provided opportunities for chinese display industry to catch up the global leading level.Therefor,China will become a main force driving the development of display industry. As the “Survival of the Fittest” at the supply side is further intensified, as well as rapid growth in commercial display, new applications and new markets at the demand side, which will drive panel industry into great reforms and opportunities.
The Company has further strengthened its leading advantages in operating efficiency and performance by streamlining the organizational structure and redesigning business flows according to the operational philosophy of maximizing cost efficiency. TheCompany’s per-capita net profit has increased from RMB28,500 to RMB 76,100, expense ratio has decreased from16.1% to13.0%. With a solid capital structure, theCompany’s debt/assets ratio has dropped from68.4% to60.3% ,the operating cash flow amounted to RMB7.61 billion, which suggests more sustainability.
Third Quarter Report 2019 of TCL Corporation Competitive edges have been established with product development and process application as the basis, driven by product and technological innovation. During Q1-Q3 2019, TCL spent a total of RMB3.89 billion onR&D and filed for 1,527 PCT patents, with published patents of quantum dot ranking the second globally. During the Reporting Period, CSOT launched the “Star Screen” Mini- LED backlight product, which adopts the TFT-LCD process driven by LED backlight technology with multi-segment dynamic control. The product offers significantly improved image contrast and definition, which will consolidate dominant position of large-sized display products in the high-end market. In the field of AMOLED, the company is focusing on the technology development and application of flexible and foldable screens, CSOT has independently built a new laminated structure that allows a switch between dual fold forms of outer fold and inner fold, which satisfied differentiated demands of different customers.
Advantages of scale based on technology upgrading have been further enhanced and product mix has been further optimized with focus on the extension of multi-scenario applicationas well as the improvement of product economic performances. TCL CSOT has experienced a rapid capacity ramping-up of t6 plant and a smooth construction of t7 project which is positioned to UHD. With improved performances optimized by processes , the sixth-generation LTPS production line has continued to increase capacity beyond its designed capacity and the sixth-generation flexible AMOLED production line will put into mass production soon. In the next five years, the total shipping area of CSOT will reach18% CAGR ,which will account for a much larger market share. The coming of 5G era is driving continuous diversification of terminal applications. Through in-depth cooperation with industrial leaders, CSOT has launched emerging display applications such as “intelligent screen” and “smart screen”, to jointly promote the building of multi-scenario IoT ecosystem with big household screens as the core application and to keep improving interaction modes and user experience with display as the core medium.CSOT’s market share of 55-inch TV panels has ranked NO.1 in global, LTPS mobile panels and 86-inch commercial display panels has ranked No. 2 globally for both, and the income from small and medium-sized products is taking up44.8% of the total income.
Take the lead in developing internationalization to refine the manufacturing system and management capabilities for global customers. On September 26, the construction of the module and whole-widget integrated intelligent manufacturing park in India under the cooperation of TCL
Third Quarter Report 2019 of TCL Corporation CSOT and TCL Electronics officially kicked off. According to the plan, the Phase I project will produce 8 million pieces of 26-55 inch large-sized and 30 million pieces of 3.5-8 inch small- and medium-sized modules annually, and mass production is expected to be delivered in the first half of 2020. As the third largest TV market and second largest mobile phone market in the world, India has become an important strategic market of terminal manufacturers. TCL CSOT collaborates with a number of strategic customers through its factory in India to jointly establish a local production, sales and services integrated industrial chain system, further enhancing the globalization process and influence of Chinese maufacturing as well as TCLCSOT’s competitive edges in global display industry.
The industrial finance and investment businesses of TCL maintain a good momentum of development, and continue to contribute strategic synergy and earnings to the Group. These businesses not only provide capital management and allocation services, help reduce financing costs and contribute steady earnings to TCL, but also help improve the ecological construction of industrial chain and the layout of cutting-edge technologies through incubation, investment, etc.
At the end of 2016, the Company launched the transformation of “changing organization, adjusting structure, focusing on core business, downsizing staffs and increasing efficiency” to remove development obstacles and inject new growth momentum. After three years of development,TCL’s industrial goal towards high-end science and technology will come true in the near future. During the Reporting Period, in order to better lead future development and demonstrate the corporate vision and mission guided by the new strategy, the Company released its corporate culture for the new phase–《The Strategy towards GlobalLeadership》，According to the new corporate culture, the Company will strive towards its global leading position with a sense of responsibilities, innovation and excellence as the fundamental philosophy, develop a sustainable internal drive with leading technology, and take leading management and scale growth as resource guarantee.
Since the foundation in 2009, TCL CSOT, with a fast and pragmatic strategy, has achieved a global industrial leading position in operating efficiency and performance at all stages of the industrial cycle and established advantages in scale and management. With constant development of new technologies, new processes and new applications as well as industrial faster shuffling and transfer across countries, products, markets, technologies and ecosystems of global semi-conductor display
Third Quarter Report 2019 of TCL Corporation industry have entered into a new stage of development. Facing the next 10 years, with the goal of developing leading products, technology and leading ecosystem, TCL CSOT will establish product competitiveness in active mini-LED backlight and direct-viewing products and technology; lead the development of printing OLED which will achieve a leading position in printing QLED based on its experience and advantages in electroluminescent quantum dot materials, as well as based on the technical strategic cooperation in materials, functional modules, equipment and chips for establishing a technology ecosystem with a broader value chain.
TCL will stick to its operating strategy, maximize cost efficiency for survival, seek development with reforms and innovation, while continues to enhance competitiveness and maintain sustained and healthy development towards a global industrial leading position.
II. Core Business Analysis
TCL’s core businesses mainly include semi-conductor display and material business, industrial finance and investment business and other businesses:
Pursuant to its development strategy of becoming a world-leading high-tech conglomerate, TCL will concentrate on its core businesses and gradually spin- off the other businesses according to the principle of the maximum value for shareholders. Meanwhile, in accordance with the whole new positioning of a high-tech conglomerate, TCL will enter into the relevant basic and high-tech strategic emerging industries when the timing is ripe by means ofM&A, etc., as well as integrate resources through the industrial chain, so as to foster new growth drivers.
(I) Semi-Conductor Display and Material Business
Third Quarter Report 2019 of TCL Corporation DuringQ1~Q3 2019, CSOT recorded a revenue of 24.56 billion, up by28.4% year-on-year; and a net profit of 1.30 billion, down by28.7% year-on-year;EBITDA% is26.5%. Due to great efficiency rooted from plant investment, synergy from the industrial chain and excellent management level, CSOT has maintained its global leadership for the efficiency and profitability with significantly over- average edge than peers.
The t1 and t2 plants in Shenzhen is operating at full capacity for strong sales, and the capacity of the t6 plant ramps up as plan. The total shipment area of large-sized panels reaches 14,290,000 square meters , up by10.1% year-on-year, the total shipment of large-sized panels reaches 30,019,000 pieces ,which ranks third globally in large-sized panels. CSOT achieves a operating revenue of 13.55 billion in large-sized panel business, down by17.7%, which is affected by the panel price of main products is much lower than the last year.
The t3 plant achieves the shipment area of 1,008,000 square meters, up by 2.52 times year-on-year; the total shipment of large-sized panels reaches of 87,787,000 pieces of small and medium sized panels, up by over 2 times year-on-year. The market share of LTPS-LCD products ranked second globally. Operating revenue reaches RMB 11.01 billion, up by 3.14 times year-on-year.
The t4 flexible AM-OLED plant saw a faster-than-expected ramp-up of its capacity and yield rate, as well as the customer development progress. In particular, prominent advantages were gained in differentiated technologies, such as camera under panel, extreme narrow frame and foldable screen. Phase I will put into mass production in Q4.
As the capacity is stepping into high growth phrase, as well as product mix will be refined continuously, the profitability will be further strengthened. At the end of the Reporting Period, the t3 plant capacity rose to 50K/month, as the capacity will be further increased through technical improvement, marginal investment efficiency will be improved significantly; the t6 plant capacity ramped up to 80K/month, it would reach full capacity of 90K/month in November; the t4 plant would volume shipping to the brand customers. CSOT has made significant progresses in its strategy of multiple products by continuing to increase the proportions of high-growth and high margin products for commercial display, vehicle display, gaming monitor, etc. and establishing strategic cooperation with CVTE, HiteVision, BYD. The CAGR ofCSOT’s overall shipment for large-sized panels in the next five years will be17%, including new applications such as ultra large-sized public display and interactive whiteboards, as well as new technologies and products such as 8K and OLED; the CAGR
Third Quarter Report 2019 of TCL Corporation of small and medium sized panel shipment will achieve26%, mainly including AMOLED products and applications.
Leading production-line technology better meet the market demands for high-end and large- sized panel , CSOT market share will increase continuously. According to the latest IHS statistics, up to Q1 2019, Chinese mainland panel manufacturers enjoyed a market share of33.9% for 60-inch and larger-sized LCD TV panels, representing a growth of nearly 10 times compared to last year. CSOT owns two G11 production lines, of which t6 will reach to full capacity at the end of this year and the construction of t7 is smoothly on the way. The 65-inch, 75-inch, 86-inch and 118-inch large- sized products can be cut in an economical way in these two production lines, which feature such advantages of higher resolution and better production yield than lower-generation production lines. With increases in the average size of large-sized display terminal products, CSOT will enjoy rapid increases in market share with an increasingly dominating position.
Driven by technology innovation, CSOT accelerates the development of leading technology and application . In the Reporting Period, CSOT launched the MLED product based on Mini-LED on TFT glass to further increase its medium- and high-end market share. In the small and medium size filed,CSOT’s LTPS production yield rate and quality have reached world-leading level and its under- panel fingerprint recognition technology, ultimate bezelless screen, dynamic frame rate technology and the upgrading process to diversify products have made great progress; in terms of flexible AMOLED panel, CSOT mainly focus on differentiated technologies and products, such as camera under-panel and foldable AMOLED, which aquires well recognition by a number of strategic brand clients.
Actively promote newly display technology,materials as well as core processes and industrial ecology, leading the development of next generation display technologies,. Served as the only “National Printing and Flexible Display Innovation Centre”, Guangdong Juhua has launched the production of the prototype for 31-inch 4K RGB full quantum dot printing OLED. China Ray develops new OLED key materials with independent IP. The evaporated red-light and green-light emitting materials, as well as the solution-processed red-light emitting materials produced by China Ray are demonstrated an industry-wide advanced performance.
(II) Industrial Finance and Investment Business
1. TCL Financial
TCL Financial mainly comprises theGroup’s finance and the supply chain finance.
Third Quarter Report 2019 of TCL Corporation The finance business primarily involves providing financial and management support to the major businesses and subsidiaries within the Group, and undertaking the functions of efficiency improvement and risk management of Group assets. Over the years,TCL’s credit rating has been maintained at AAA. In the Reporting Period, TCL Financial completed the issue of five-year debenture of RMB1 billion with a stated interest rate of4.30% at an overall financing cost that is lower than the market average. The supply chain finance business provides member and related enterprises with various financing and supply chain financial services, helping them to increase resource efficiency and generate stably growing income.
2. TCL Capital
TCL Capital consists of TCL Venture Capital, Admiralty Harbour Capital Limited and China Innovative Capital Management Limited (equity participation).
TCL’s venture capital business manages funds of RMB9.365 billion in total (as at the end of the Reporting Period), and has invested in a total of 116 projects. So far, the invested projects have established technological and business cooperation withTCL’s businesses, and some projects from which TCL Venture capital has withdrawn its investment have also provided satisfying returns. Harbour Capital is a licensed financial enterprise in Hong Kong with investment banking and asset management qualifications. During this year, it completed nine projects of debenture issue, underwriting and debt restructuring. At present, it is taking active steps to generate income from financial advising and asset management, with satisfactory profits gained.
China Innovative Capital Management Limited is a leading institutional investor in equity investments andM&A in relation to listed companies. It has invested in over 110 listed companies and provides professional support forTCL’s domesticM&A activities and business expansion. Meanwhile, the Group directly invests in a number of listed companies, including a19.07% interest in 712 Corp. (603712.SH), a5.14% interest in Bank of Shanghai (601229.SH) and a20.08% interest in Fantasia Holdings (01777.HK). During the Reporting Period, Apart from the Company increased its interest in Bank of Shanghai by0.15%, other direct interests in listed companies remained the same shareholding ratio during the Reporting Period.
Third Quarter Report 2019 of TCL Corporation Part IV Significant Events
I. Changes in Key Consolidated Financial Statement Line Items and Explanation of why□ Applicable■ N/A
II. Progress, Influence and Solutions Associated with Significant Events
||||
|-|-|-|
|Announcement on significant event|Date of disclosure|Website for disclosed announcement|
|To ensure that the Partners Plan drives thegrowth of the Company’s overallperformance on a long-term basis, theCompany has revised Phase II GlobalPartners Plan (Draft) and its clauses in thesummary part. For more detail, please referto the TCL Corporation Phase II GlobalPartners Plan (Draft Revision) disclosed onthe information media as designated by theCompany.|||
||13 August 2019|http://www.cninfo.com|

Progress of Stock Repurchase
To safeguardshareholders’ rights and interest and enhance shareholder value, the Company held the 14th Meeting of the 6th Session of the Board on 10 January 2019, where the Plan on the Repurchase of Partial Public Shares was reviewed and considered. On 14 February 2019, the Company disclosed the Repurchase Report on the Repurchase of Partial Public Shares. In light of the secondary stock market trend, the Company reviewed and approved the Proposal on the Adjustment of the Repurchased Share Price Cap at the 15th Meeting of the 6th Session of the Board held on 19 March 2019, adjusting the price for repurchasing theCompany’s shares from a cap of RMB3.80 per share to RMB5.00 per share. The Company started to implement the stock repurchase from 14 February 2019. The specific progress can be found on related announcements disclosed on the media designated by
the Company.
From the first implementation of the repurchase till 15 October 2019, the Company had repurchased
Third Quarter Report 2019 of TCL Corporation a total of 502,108,200 shares by means of centralized bidding transaction through its securities account for repurchase. The shares occupy3.71% of theCompany’s share capital with the highest transaction price being RMB4.17 per share, the lowest RMB3.13 per share, the average RMB3.40 per share, and the total transaction amount RMB1,708,529,800 (not inclusive of transaction fees). Progress of any repurchased share reduction through centralized price bidding
□ Applicable■ N/A
III. Commitments that theCompany’s Actual Controller, Shareholders, Related Parties and Acquirers, as well as the Company Itself and Other Parties, Failed to Fulfill on Time during Reporting Period
□ Applicable■ N/A
No such cases in the Reporting Period.
IV. 2019 Annual Operating Performance Forecast
□ Applicable■ N/A
V. Securities Investments
Unit:RMB’000
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|||||Beginning||Sold in|Gain/Loss on fair-|Ending||
|Securit|Securit||Measuremen||Purchased in||||Funding|
|||Security name||carrying||Q1-Q3|value changes in|carrying||
|y type|y code||t method||Q1-Q3 2019||||source|
|||||amount||2019|Q1-Q3 2019|amount||
|||CDB||||||||
|||2017666||||||||
||||Fair value|||||||
|Others|N/A|RMB wealth||-|1,000,000|-|18,380|1,018,380|S elf-funded|
||||method|||||||
|||management||||||||
|||products||||||||
|||CDB||||||||
|||2017666||||||||
||||Fair value|||||||
|Others|N/A|RMB wealth||-|500,000|-|2,360|502,360|S elf-funded|
||||method|||||||
|||management||||||||
|||products||||||||
|||CCB||||||||
|Trust||||||||||
|||Shengjing|Fair value|||||||
|product|N/A|||-|400,000|-|4,440|404,440|S elf-funded|
|||Tongying|method|||||||
|s||||||||||
|||Bond||||||||

Third Quarter Report 2019 of TCL Corporation
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|||Investment||||||||
|||Collective||||||||
|||Fund Trust||||||||
|||Products||||||||
|||ISHARES JP||||||||
|||MORGAN|Fair value|||||||
|Bond|N/A|||-|351,970|-|(2,630)|349,250|S elf-funded|
|||USD|method|||||||
|||EMERGI||||||||
|||Guotai Junan||||||||
|||Asset||||||||
|||Management|Fair value|||||||
|Others|N/A|||-|300,000|-|3,330|303,330|S elf-funded|
|||Junxiang|method|||||||
|||Yinghuo||||||||
|||No.2||||||||
|||CDB||||||||
|||2017666||||||||
||||Fair value|||||||
|Others|N/A|RMB wealth||-|300,000|-|2,340|302,340|S elf-funded|
||||method|||||||
|||management||||||||
|||products||||||||
|||CDB||||||||
|||2017666||||||||
||||Fair value|||||||
|Others|N/A|RMB wealth||-|300,000|-|2 ,3 4 0|302,340|S elf-funded|
||||method|||||||
|||management||||||||
|||products||||||||
|||ABC “safe||||||||
|||and||||||||
|||profitable”||||||||
||||Fair value|||||||
|Others|N/A|oriented||-|300,000|-|1,650|301,650|S elf-funded|
||||method|||||||
|||RMB wealth||||||||
|||management||||||||
|||products||||||||
|||BCM||||||||
|||"Yutong||||||||
|||Fortune"|Fair value|||||||
|Others|N/A|||-|300,000|-|1,650|301,650|S elf-funded|
|||RMB wealth|method|||||||
|||management||||||||
|||products||||||||
|||ICBC||||||||
|||financial||||||||
|||products-|Fair value|||||||
|Others|N/A|||-|300,000|-|1,630|301,630|S elf-funded|
|||Legal person|method|||||||
|||RMB||||||||
|||property||||||||

Third Quarter Report 2019 of TCL Corporation
|||||||||
|-|-|-|-|-|-|-|-|
|||4,291,170||||||
|Other securities investments||||||||
||--||5,405,980|4,975,460|590,160|4,566,470|--|
|held at period-end||||||||
|||4,291,170||||||
|Total|--||9,457,950|4,975,460|625,650|8,653,840|--|
|Disclosure date of||||||||
|announcement on Board’s||||||||
||20 March 2019|||||||
|consent for securities||||||||
|investments||||||||
|Disclosure date of||||||||
|announcement on general||||||||
||10 April 2019|||||||
|meeting’s consent for securities||||||||
|investments (if any)||||||||

VI. Wealth Management Entrustment
Unit:RMB’000
||||||
|-|-|-|-|-|
|Type of wealth|||Outstanding amount||
||Funding source|Principal||Overdue amount|
|management|||before maturity||
|Bank’s wealth|||||
||Self-funded|5,302,390|3,723,950|0|
|management product|||||
|Securities firm’s wealth|||||
||Self-funded|800,000|800,000|0|
|management product|||||
|Trust wealth|||||
||Self-funded|500,000|500,000|0|
|management product|||||
|Other|Self-funded|269,440|269,440|0|
|Total||6,871,830|5,293,390|0|

 High-risk wealth management entrustments with amounts that are individually significant, or with low security, low liquidity, or no protection of the principal:
□ Applicable■ N/A
VII. Investments in Derivative Financial Instruments
|||
|-|-|
|Funding source|Mostly foreign-currency revenue|

Third Quarter Report 2019 of TCL Corporation
|||
|-|-|
|Legal matters involved (if applicable)|N/A|
|Disclosure date of board announcement approving||
||28 April 2018|
|derivative investment (if any)||
||In order to effectively manage the exchange and interest rate risks of foreign|
||currency assets, liabilities and cash flows, the Company, after fully analyzing the|
||market trend and predicting the operation (including orders and capital plans),|
||adopts forward foreign exchange contracts, options and interest rate swaps to|
||avoid future exchange rate and interest rate risks. As its business scale changes|
||subsequently, the Company will adjust the exchange rate risk management|
||strategy according to the actual market conditions and business plans.|
||Risk analysis:|
||1. Market risk: the financial derivatives business carried out by the Group belongs|
||to hedging and trading business related to main business operations, and there is|
||a market risk of loss due to the fluctuation of underlying interest and exchange|
||rates, which lead to the fluctuation of prices of financial derivatives;|
||2. Liquidity risk: the derivatives business carried out by the Group is an over-the-|
||counter transaction operated by a financial institution, and there is a risk of loss|
||due to paying fees to the bank for the operations of evening up or selling the|
||derivatives below the buying prices;|
||3. Performance risk: the Group conducts the derivative business based on rolling|
|Analysis of risks and control measures associated|budgets for risk management, and there is a risk of performance failure due to|
|with derivative investments held in Reporting|deviation between the actual operating results and budgets;|
|Period (including but not limited to market risk,|4. Other risks: in the case of specific business operations, if the operator fails to|
|liquidity risk, credit risk, operational risk, legal|finish the prescribed procedures for report or approval, or fails to record the|
|risk, etc.)|financial derivative business information accurately, timely and completely, it|
||may result in loss of derivative business or trading opportunities. Moreover, if the|
||trading operator fails to fully understand the terms of transaction contracts or|
||product information, the Group will face the legal risks and transaction losses|
||therefrom.|
||Measures taken for risk control:|
||1. Basic management principles: the Group strictly follows the hedging principle|
||and the main purpose of locking costs and avoiding risks. It is required that the|
||financial derivatives business to be carried out matches the variety, size, direction|
||and duration of spot goods, and no speculative trading should be involved. In the|
||selection of hedging instruments, only simple financial derivatives that are|
||closely related to the main business operation and meet the requirements of hedge|
||accounting treatment should be selected, and avoid complex business that|
||exceeds the prescribed business scope or is difficult to recognize in terms of risk|
||and pricing;|
||2. The Group has formulated a special risk management system tailored to the|
||risk characteristics of the financial derivatives business, covering all key aspects|
||such as pre-emptive prevention, in-process monitoring and post-processing.|

Third Quarter Report 2019 of TCL Corporation
|||
|-|-|
||Professional personnel are rationally arranged for investment decision-making,|
||business operations and risk control. Investment participants are required to fully|
||understand the risks of financial derivatives investment and strictly implement|
||the business operations and risk management systems of derivatives. Before|
||starting the derivatives business, the holding company must submit to the|
||management department of the Group detailed business reports including its|
||internal approval, main product terms, operational necessity, preparations, risk|
||analysis, risk management strategy, fair value analysis and accounting methods,|
||and special summary reports on business operated. Operations can be|
||implemented only after getting opinions from the professional department of the|
||Group;|
||3. Relevant departments should track the changes in the open market price or fair|
||value of financial derivatives, timely assess the risk exposure changes of invested|
||financial derivatives, and make reports to the board of directors on business|
||development;|
||4. When the combined impairment of the fair value of derivatives and changes|
||in the value of the assets (if any) used for risk hedging by the Group results in a|
||total loss or floating loss amounting to 10% of the recently audited net assets of|
||the Company, and the absolute amount exceeds RMB10 million, the Group will|
||disclose it in a timely manner.|
||With the rapid expansion of overseas sales, the Company keeps following|
||the above rules in the operation of forward foreign exchange contracts, interest|
|Changes in market prices or fair value of derivative|rate swap contracts and futures contracts to avoid and hedge foreign exchange|
|investments in Reporting Period (fair value analysis|risks arising from operation and financing. It saw a gain of RMB 46.84 million|
|should include measurement method and related|for the Reporting Period. The fair value of derivatives is determined by real-|
|assumptions and parameters)|time quoted price of the foreign exchange market, based on the difference|
||between the contractual price and the forward exchange rate quoted|
||immediately in the foreign exchange market on the balance sheet date.|
|Major changes in accounting policies and specific||
|accounting principles adopted for derivative||
||No major changes|
|investments in Reporting Period compared to last||
|reporting period||
||In view of the fact that nearly half of the main business of the Company is|
||overseas, a wide range of settlement currencies is involved. The Company|
||reduces exchange losses and locks transaction costs by reasonable financial|
||derivatives, which helps to reduce risk control costs and improve company|
||competitiveness. Risks are effectively controlled as the Company has taken series|
|Opinion of independent directors on derivative||
||of measures such as conducting a rigorous internal evaluation for the operation|
|investments and risk control||
||of financial derivatives business, establishing a corresponding regulatory|
||mechanism, formulating reasonable accounting policies and specific accounting|
||principles, setting limits for risk exposure management, and operating simple|
||financial derivatives. The contracting agent for financial derivatives business of|
||the Company is a sound financial agent with good credit standing.|

Third Quarter Report 2019 of TCL Corporation
||
|-|
|The independent directors believe that the financial derivatives transactionscarried out by the Company in the nine months ended 30 September 2019 areclosely related to the daily operation needs of the Company with controllablerisks. The business is in line with the interests of minority shareholders of thecompany and the relevant laws and regulations.|

Unit:RMB’000
|||||||||
|-|-|-|-|-|-|-|-|
|||||||Ending contractualamount as % of theCompany’s ending netassets||
||Beginning amount||Ending amount||Gain/loss in|||
|Type of contract|||||Reporting|||
||||||Period|||
||Contractual|Actual|Contractual|Actual||Contractual|Actualamount|
||amount|amount|amount|amount||amount||
|1. Forward forex||||||||
||25,316,330|860,700|12,894,200|378,400||||
|contracts||||||200.9|5.9|
||||||46,840|||
|2. Interest rate swaps|4,653,250|139,600|5,672,470|170,170||88.4|2.7|
|3. Currency swaps|3,115,890|155,790|2,376,490|157,020||37|2.4|
|Total|33,085,470|1,156,090|20,943,160|705,590|46,840|326.3|11.0|

 VIII. Visits received during Reporting Period
|||||
|-|-|-|-|
|Date of visit|Way of visit|Type of visitor|Index to key discussions|
|18 January 2019|One-on-one meeting|Institutional investor|http://www.cninfo.com.cn|
|12 February 2019|One-on-one meeting|Institutional investor|http://www.cninfo.com.cn|
|18 February 2019|One-on-one meeting|Institutional investor|http://www.cninfo.com.cn|
|19 February 2019|One-on-one meeting|Institutional investor|http://www.cninfo.com.cn|
|19 February 2019|One-on-one meeting|Institutional investor|http://www.cninfo.com.cn|
|20 February 2019|One-on-one meeting|Institutional investor|http://www.cninfo.com.cn|
|25 February 2019|One-on-one meeting|Institutional investor|http://www.cninfo.com.cn|
|27 February 2019|One-on-one meeting|Institutional investor|http://www.cninfo.com.cn|
|1 March 2019|One-on-one meeting|Institutional investor|http://www.cninfo.com.cn|
|4 March 2019|One-on-one meeting|Institutional investor|http://www.cninfo.com.cn|
|7 March 2019|One-on-one meeting|Institutional investor|http://www.cninfo.com.cn|
|20 March 2019|One-on-one meeting|Institutional investor|http://www.cninfo.com.cn|
|28 March 2019|One-on-one meeting|Institutional investor|http://www.cninfo.com.cn|
|29 March 2019|One-on-one meeting|Institutional investor|http://www.cninfo.com.cn|
|9 April 2019|One-on-one meeting|Institutional investor|http://www.cninfo.com.cn|
|24 April 2019|Tel communication|Institutional investor|http://www.cninfo.com.cn|

Third Quarter Report 2019 of TCL Corporation
|||||
|-|-|-|-|
|25 April 2019|One-on-one meeting|Institutional investor|http://www.cninfo.com.cn|
|24 May 2019|One-on-one meeting|Institutional investor|http://www.cninfo.com.cn|
|29 May 2019|One-on-one meeting|Institutional investor|http://www.cninfo.com.cn|
|12 June 2019|One-on-one meeting|Institutional investor|http://www.cninfo.com.cn|
|13 June 2019|One-on-one meeting|Institutional investor|http://www.cninfo.com.cn|
|28 June 2019|One-on-one meeting|Institutional investor|http://www.cninfo.com.cn|
|25 July 2019|One-on-one meeting|Institutional investor|http://www.cninfo.com.cn|
|13 August 2019|One-on-one meeting|Institutional investor|http://www.cninfo.com.cn|
|12 September 2019|One-on-one meeting|Institutional investor|http://www.cninfo.com.cn|
|20 September 2019|One-on-one meeting|Institutional investor|http://www.cninfo.com.cn|

IX. Irregularities in Provision of Guarantees for External Parties
□ Applicable■ N/A
X. Occupation of theCompany’s Capital by the Controlling Shareholder or Its Related Parties for Non-Operating Purposes
□ Applicable■ N/A
Third Quarter Report 2019 of TCL Corporation Part V Financial Statements
I. Financial Statements
1. Consolidated Balance Sheet
Prepared by TCL Corporation
Unit: RMB
||||
|-|-|-|
|Item|30 September 2019|31 December 2018|
|Current assets:|||
|Monetary capital|17,765,873,517.00|26,801,342,532.00|
|Deposit reservation for balance|||
|Lending funds|||
|Financial assets held for trading|8,455,991,946.00|0.00|
|Financial assets at fair value|||
||0.00|1,137,579,704.00|
|through profit or loss|||
|Derivative financial assets|104,730,871.00|0.00|
|Notes receivable|165,373,400.00|4,272,221,611.00|
|Accounts receivable|8,386,427,291.00|13,651,444,917.00|
|Receivables financing|||
|Advances to suppliers|890,674,240.00|1,194,972,138.00|
|Premiums receivable|||
|Reinsurance accounts receivable|||
|Reinsurance reserve fund|||
|receivable|||
|Other receivables|3,127,931,370.00|5,719,378,954.00|
|Including: Interest receivable|152,634,125.00|70,777,805.00|
|Dividends receivable|0.00|47,748,475.00|
|Inventories|5,380,508,492.00|19,887,971,677.00|
|Contract assets|||
|Available-for-sale financial assets|0.00|18,792,459.00|
|Other current assets|4,541,971,080.00|7,624,097,005.00|
|Current portion of non-current assets|||
|Total current assets|48,819,482,207.00|80,307,800,997.00|
|Non-current assets:|||

Third Quarter Report 2019 of TCL Corporation
||||
|-|-|-|
|Loans and advances to customers|4,962,826,572.00|1,123,799,564.00|
|Debt investment|20,230,211.00|0.00|
|Available-for-sale financial assets|0.00|4,270,844,592.00|
|Other debt investment|0.00|0.00|
|Held-to-maturity investment|||
|Long-term receivables|0.00|0.00|
|Long-term equity investment|16,505,349,223.00|16,957,109,519.00|
|Other equity instrument|||
||1,416,650,483.00|0.00|
|investment|||
|Other non-current financial assets|1,352,285,147.00|0.00|
|Investment property|85,404,928.00|1,676,210,635.00|
|Fixed assets|40,363,437,728.00|35,983,131,306.00|
|Construction in progress|34,403,396,154.00|38,924,586,355.00|
|Bearer biological assets|||
|Oil and gas assets|||
|Right-of-use assets|||
|Intangible assets|5,713,948,761.00|5,954,872,994.00|
|R&D expense|1,182,054,993.00|1,011,503,608.00|
|Goodwill|2,452,185.00|357,111,511.00|
|Long-term prepaid expense|1,761,214,449.00|1,861,333,252.00|
|Deferred income tax assets|304,838,828.00|797,881,851.00|
|Other non-current assets|4,839,440,562.00|3,537,755,555.00|
|Total non-current assets|112,913,530,224.00|112,456,140,742.00|
|Total assets|161,733,012,431.00|192,763,941,739.00|
|Current liabilities:|||
|Short-term borrowings|11,647,311,497.00|13,287,723,834.00|
|Borrowings from central bank|321,824,577.00|231,404,499.00|
|Interbank loans obtained|0.00|0.00|
|Financial liabilities held for trading|164,242,779.00|0.00|
|Financial liabilities at fair value|||
||0.00|212,097,067.00|
|through profit or loss|||
|Derivative financial liabilities|134,883,003.00|0.00|
|Notes payable|1,698,986,435.00|3,092,573,501.00|
|Accounts payable|10,428,286,568.00|23,922,711,995.00|
|Advances from customers|463,879,636.00|1,460,773,236.00|

Third Quarter Report 2019 of TCL Corporation
||||
|-|-|-|
|Contract liabilities|||
|Financial assets sold under|||
||0.00|0.00|
|repurchase agreements|||
|Customer deposits and interbank|||
||2,271,522,476.00|545,052,800.00|
|deposits|||
|Receiving from vicariously traded|||
|securities|||
|Acting underwriting securities|||
|Employee benefits payable|962,366,407.00|2,891,392,699.00|
|Taxes payable|277,751,532.00|716,534,266.00|
|Other payables|12,779,825,053.00|23,120,774,383.00|
|Including: Interest payable|439,575,585.00|586,819,775.00|
|Dividend payable|11,058,234.00|22,552,834.00|
|Handling charges and|||
|commissions payable|||
|Dividend payable for reinsurance|||
|Liabilities held for sale|0.00|0.00|
|Current portion of non-current|||
||2,818,805,828.00|6,009,915,080.00|
|liabilities|||
|Other current liabilities|16,365,508.00|3,344,450,936.00|
|Total current liabilities|43,986,051,299.00|78,835,404,296.00|
|Non-current liabilities:|||
|Reserve fund for insurance|||
|contract|||
|Long-term borrowings|36,557,908,400.00|36,864,922,669.00|
|Bonds payable|14,484,218,148.00|12,985,628,025.00|
|Including: preferred stock|||
|Perpetual capital|||
|securities|||
|Lease liabilities|||
|Long-term payables|24,907,460.00|73,901,549.00|
|Long-term employee benefits|||
||23,405,932.00|24,245,725.00|
|payable|||
|Provisions|||
|Deferred income|2,070,523,071.00|2,637,228,528.00|
|Deferred income tax liabilities|391,002,247.00|440,352,161.00|

Third Quarter Report 2019 of TCL Corporation
||||
|-|-|-|
|Other non-current liabilities|482,232.00|30,586,139.00|
|Total non-current liabilities|53,552,447,490.00|53,056,864,796.00|
|Total liabilities|97,538,498,789.00|131,892,269,092.00|
|Owners’ equity:|||
|Share capital|13,549,648,507.00|13,549,648,507.00|
|Other equity instruments|||
|Including: preferred stock|||
|Perpetual capital|||
|securities|||
|Capital surplus|5,782,131,867.00|5,996,741,456.00|
|Less: Treasury stock|1,726,338,433.00|63,457,893.00|
|Other comprehensive income|-516,409,442.00|-1,174,161,842.00|
|Special reserves|||
|Surplus reserves|2,184,261,029.00|2,184,261,029.00|
|General reserve|360,766.00|360,766.00|
|Undistributed profits|11,128,780,985.00|10,000,972,928.00|
|Total equity attributable to equity|||
||30,402,435,279.00|30,494,364,951.00|
|holders of the Company|||
|Minority interests|33,792,078,363.00|30,377,307,696.00|
|Total owners’ equity|64,194,513,642.00|60,871,672,647.00|
|Total liabilities and owners’ equity|161,733,012,431.00|192,763,941,739.00|

 Legal representative: Li Dongsheng Head for financial affairs: Du Juan Head of the financial department: Xi Wenbo 2. Balance Sheet of the Company as the Parent
Unit: RMB
||||
|-|-|-|
|Item|30 September 2019|31 December 2018|
|Current assets:|||
|Monetary capital|10,711,739,610.00|1,328,706,659.00|
|Financial assets held for trading|3,425,782,656.00||
|Financial assets at fair value|||
|||711,741,161.00|
|through profit or loss|||
|Derivative financial assets|88,938,440.00||
|Notes receivable|28,448,251.00|20,496,958.00|
|Accounts receivable|377,419,812.00|194,958,986.00|
|Receivables financing|||

Third Quarter Report 2019 of TCL Corporation
||||
|-|-|-|
|Advances to suppliers|153,597,813.00|187,895,276.00|
|Other receivable|16,335,297,175.00|18,773,352,761.00|
|Including: Interest receivable|45,946,747.00|212,199,974.00|
|Dividends receivable|4,211,824,115.00|4,211,824,115.00|
|Inventories|15,365,811.00|825,999.00|
|Contract assets|||
|Available-for-sale financial assets|||
|Current portion of non-current|||
|assets|||
|Other current assets|12,112,596.00|1,873,961,604.00|
|Total current assets|31,148,702,164.00|23,091,939,404.00|
|Non-current assets:|||
|Debt investment|||
|Available-for-sale financial assets||1,185,429,885.00|
|Other debt investment|||
|Held-to-maturity investment|||
|Long-term receivables|||
|Long-term equity investment|39,249,008,763.00|41,803,449,993.00|
|Other equity instrument|||
||518,669,009.00||
|investment|||
|Other non-current financial assets|1,015,832,810.00||
|Investment property|93,607,444.00|5,158,426.00|
|Fixed assets|53,661,200.00|40,058,266.00|
|Construction in progress|1,241,308.00|551,693.00|
|Bearer biological assets|||
|Oil and gas assets|||
|Right-of-use assets|||
|Intangible assets|20,845,187.00|18,776,430.00|
|R&D expense|||
|Goodwill|||
|Long-term prepaid expense|457,596,747.00|461,055,759.00|
|Deferred income tax assets|||
|Other non-current assets|||
|Total non-current assets|41,410,462,468.00|43,514,480,452.00|
|Total assets|72,559,164,632.00|66,606,419,856.00|

Third Quarter Report 2019 of TCL Corporation
||||
|-|-|-|
|Current liabilities:|||
|Short-term borrowings|6,238,260,000.00|3,300,260,000.00|
|Financial liabilities held for trading|||
|Financial liabilities at fair value|||
|through profit or loss|||
|Derivative financial assets|||
|Notes payable|138,392,439.00|123,708,153.00|
|Accounts payable|371,960,665.00|252,801,470.00|
|Advances from customers|32,396,668.00|38,614,679.00|
|Contract liabilities|||
|Employee benefits payable|72,530,578.00|98,753,095.00|
|Taxes payable|3,285,288.00|3,437,498.00|
|Other payables|16,198,761,281.00|6,407,741,790.00|
|Including: Interest payable|329,607,987.00|471,294,072.00|
|Dividends payable|11,057,515.00|4,549,747.00|
|Liabilities held for sale|||
|Current portion of non-current|||
||2,030,453,828.00|3,000,000,000.00|
|liabilities|||
|Other current liabilities||2,000,000,000.00|
|Total current liabilities|25,086,040,747.00|15,225,316,685.00|
|Non-current liabilities:|||
|Long-term borrowings|2,190,000,000.00|5,340,956,000.00|
|Bonds payable|14,484,218,148.00|12,985,628,025.00|
|Including: preferred stock|||
|Perpetual capital|||
|securities|||
|Lease liabilities|||
|Long-term payables|700,000.00|700,000.00|
|Long-term employee benefits|||
||23,405,932.00|24,245,725.00|
|payable|||
|Provisions|||
|Deferred income|50,011,600.00|51,506,173.00|
|Deferred income tax liabilities|||
|Other non-current liabilities|||
|Total non-current liabilities|16,748,335,680.00|18,403,035,923.00|

Third Quarter Report 2019 of TCL Corporation
||||
|-|-|-|
|Total liabilities|41,834,376,427.00|33,628,352,608.00|
|Owners’ equity:|||
|Share capital|13,549,648,507.00|13,549,648,507.00|
|Other equity instruments|||
|Including: preferred stock|||
|Perpetual capitalsecurities|||
|Capital surplus|8,391,390,047.00|8,565,337,838.00|
|Less: Treasury stock|1,726,338,433.00|63,457,893.00|
|Other comprehensive income|56,064,337.00|-24,869,176.00|
|Special reserves|||
|Surplus reserves|1,982,196,590.00|1,982,196,590.00|
|Retained earnings|8,471,827,157.00|8,969,211,382.00|
|Total owners’ equity|30,724,788,205.00|32,978,067,248.00|
|Total liabilities and owners’ equity|72,559,164,632.00|66,606,419,856.00|

 3. Consolidated Income Statement for Q3
Unit: RMB
||||
|-|-|-|
|Item|Q3 2019|Q3 2018|
|1. Revenue|15,043,817,358.00|29,729,856,357.00|
|Including: Operating revenue|15,036,052,357.00|29,713,396,587.00|
|Interest income|7,765,001.00|16,459,770.00|
|Earned premiums|||
|Fee and commission income|||
|2. Operating costs and expenses|15,408,639,989.00|29,131,491,991.00|
|Including: Cost of sales|13,859,643,355.00|24,689,901,623.00|
|Interest expense|4,817,412.00|6,461,262.00|
|Fee and commission expense|||
|Surrender value|||
|Net payments for insurance|||
|claims|||
|Reserve fund for insurance|||
|contracts|||
|Policyholder dividend|||
|expenses|||

Third Quarter Report 2019 of TCL Corporation
||||
|-|-|-|
|Amortized reinsurance|||
|expenditures|||
|Taxes and surcharges|48,091,768.00|158,209,758.00|
|Selling expense|199,683,347.00|2,140,730,098.00|
|Administrative expense|293,283,969.00|912,231,140.00|
|R&D expense|722,455,220.00|1,193,268,465.00|
|Finance costs|280,664,918.00|30,689,645.00|
|Including: Interest expense|434,347,881.00|480,746,488.00|
|Interest income|106,746,690.00|144,274,289.00|
|Add: Other income|517,506,256.00|628,754,578.00|
|Investment income (“-” for|576,410,283.00|460,824,515.00|
|loss)|||
|Including: Share of profit or|396,531,183.00|360,196,830.00|
|loss of joint ventures and associates|||
|Financial assets measured|||
|at amortized cost through profit or loss|||
|Foreign exchange gain (“-” for|-299,877.00|-22,090,978.00|
|loss)|||
|Net exposure hedge gain (“-”|0.00|0.00|
|for loss)|||
|Gain on changes in fair value|64,950,705.00|-107,764,896.00|
|(“-” for loss)|||
|Credit impairment loss (“-” for|-1,054,559.00|0.00|
|loss)|||
|Asset impairment loss (“-” for|-83,358,305.00|-249,193,124.00|
|loss)|||
|Asset disposal income (“-” for|5,599,397.00|20,537,781.00|
|loss)|||
|3. Operating profit (“-” for loss)|714,931,269.00|1,329,432,242.00|
|Add: Non-operating income|81,998,416.00|46,554,058.00|
|Less: Non-operating expense|4,649,448.00|19,475,159.00|
|4. Profit before tax (“-” for loss)|792,280,237.00|1,356,511,141.00|
|Less: Income tax expense|41,928,606.00|181,396,899.00|
|5. Net profit (“-” for net loss)|750,351,631.00|1,175,114,242.00|
|(1) Classified by continuity of|||
|operations|||
|1. Net profit from continuing|750,351,631.00|1,175,114,242.00|

Third Quarter Report 2019 of TCL Corporation
||||
|-|-|-|
|operations (“-” for net loss)|||
|2.Net profit from discontinued|0.00|0.00|
|operations (“-” for net loss)|||
|(2) Classified by ownership of the|||
|equity|||
|1. Net profit attributable to owners|484,981,289.00|903,723,232.00|
|of the Company as the parent|||
|2. Minority interests|265,370,342.00|271,391,010.00|
|6. Other comprehensive income, net of|-26,068,932.00|-882,722,281.00|
|tax|||
|Attributable to owners of the Company|-26,691,643.00|-758,784,159.00|
|as the parent|||
|(1) Items that will not be reclassified|19,081,757.00|0.00|
|to profit or loss|||
|1. Changes arising from|0.00|0.00|
|remeasurement on defined benefit plans|||
|2. Share of other|26,584,508.00|0.00|
|comprehensive income of investees that|||
|will not be reclassified to profit or loss|||
|under equity method|||
|3. Changes in fair value of|12,454,793.00|0.00|
|other equity instruments investment|||
|4. Changes in the fair value|0.00|0.00|
|of the company’s own credit risk|||
|5. Others|-19,957,544.00|0.00|
|(2) Items that may subsequently be|-45,773,400.00|-758,784,159.00|
|reclassified to profit or loss|||
|1.Share of other|-179,106,860.00|35,681,864.00|
|comprehensive income of investees that|||
|will be reclassified to profit or loss under|||
|equity method|||
|2. Changes in fair value of|0.00||
|other debt investments|||
|3. Gains and losses from|0.00|-234,841,738.00|
|changes in fair value of available-for-sale|||
|financial assets|||
|4. Amount of financial assets|0.00||
|reclassified into other comprehensive|||
|income|||

Third Quarter Report 2019 of TCL Corporation
||||
|-|-|-|
|5. Gain/Loss arising from|0.00||
|reclassification of held-to-maturity|||
|investments to available-for-sale financial|||
|assets|||
|6. Other debt investment|0.00||
|credit impairment provisions|||
|7. Cash flow hedge reserve|-19,415,646.00|-36,912,730.00|
|8. Differences arising from|151,851,168.00|-507,901,826.00|
|translation of foreign currency-|||
|denominated financial statements|||
|9. Others|897,938.00|-14,809,729.00|
|Attributable to minority interests|622,711.00|-123,938,122.00|
|7. Total comprehensive income|724,282,699.00|292,391,961.00|
|Attributable to owners of the|458,289,646.00|144,939,073.00|
|Company as the parent|||
|Attributable to minority interests|265,993,053.00|147,452,888.00|
|8. Earnings per share|||
|(1) Basic earnings per share|0.0364|0.0667|
|(2) Diluted earnings per share|0.0358|0.0667|

 Legal representative: Li Dongsheng Head for financial affairs: Du Juan Head of the financial department: Xi Wenbo 4. Income Statement of the Company as the Parent for Q3
Unit: RMB
||||
|-|-|-|
|Item|Q3 2019|Q3 2018|
|1. Total revenue|543,963,613.00|564,486,423.00|
|Less: Cost of sales|497,046,360.00|493,750,947.00|
|Taxes and surcharges|340,606.00|-1,100,091.00|
|Selling expense|5,534,527.00|8,713,780.00|
|Administrative expense|80,248,940.00|65,622,353.00|
|R&D expense|34,971,218.00|20,080,198.00|
|Finance costs|236,701,397.00|101,884,868.00|
|Including: Interest expense|333,209,614.00|359,032,988.00|
|Interest income|95,255,830.00|178,756,463.95|
|Add: Other income|0.00|0.00|
|Investment income (“-” for|361,094,314.00|834,483,557.00|

Third Quarter Report 2019 of TCL Corporation
||||
|-|-|-|
|loss)|||
|Including: Share of profit or|304,497,022.00|260,808,493.00|
|loss of joint ventures and associates|||
|Financial assets|0.00|0.00|
|measured at amortized cost through|||
|profit or loss|||
|Net exposure hedge gain (“-”|0.00|0.00|
|for loss)|||
|Gain on changes in fair value|116,206,626.00|-225,820,894.00|
|(“-” for loss)|||
|Credit impairment loss (“-”|-3,895.00|0.00|
|for loss)|||
|Asset impairment loss (“-” for|0.00|-3,000,000.00|
|loss)|||
|Asset disposal income (“-” for|256,624,954.00|22,236,169.00|
|loss)|||
|2. Operating profit (“-” for loss)|423,042,564.00|503,433,200.00|
|Add: Non-operating income|67,299,176.00|3,171,065.00|
|Less: Non-operating expense|1,762,001.00|312,085.00|
|3. Profit before tax (“-” for loss)|488,579,739.00|506,292,180.00|
|Less: Income tax expense|0.00|0.00|
|4. Net profit (“-” for net loss)|488,579,739.00|506,292,180.00|
|(1) Net profit from continuing|488,579,739.00|506,292,180.00|
|operations (“-” for net loss)|||
|(2) Net profit from discontinued|0.00|0.00|
|operations (“-” for net loss)|||
|5. Other comprehensive income, net of|49,539,268.00|6,286,204.00|
|tax|||
|(1) Items that will not be|20,973,409.00|0.00|
|reclassified to profit or loss|||
|1. Changes arising from|0.00|0.00|
|remeasurement on defined benefit plans|||
|2. Share of other|20,973,409.00|0.00|
|comprehensive income of investees that|||
|will not be reclassified to profit or loss|||
|under equity method|||
|3. Changes in fair value of|0.00|0.00|
|other equity instruments investment|||

Third Quarter Report 2019 of TCL Corporation
||||
|-|-|-|
|4. Changes in the fair value|0.00|0.00|
|of the company’s own credit risk|||
|5. Others|0.00|0.00|
|(2) Items that may subsequently be|28,565,859.00|6,286,204.00|
|reclassified to profit or loss|||
|1. Share of other|28,379,224.00|8,666,867.00|
|comprehensive income of investees that|||
|will be reclassified to profit or loss|||
|under equity method|||
|2. Changes in fair value of|0.00|0.00|
|other debt investments|||
|3. Gains and losses from|0.00|37,443,122.00|
|changes in fair value of available-for-|||
|sale financial assets|||
|4. Amount of financial|0.00|0.00|
|assets reclassified into other|||
|comprehensive income|||
|5. Gain/Loss arising from|0.00|0.00|
|reclassification of held-to-maturity|||
|investments to available-for-sale|||
|financial assets|||
|6. Other debt investment|0.00|0.00|
|credit impairment provisions|||
|7. Cash flow hedge reserve|0.00|0.00|
|8. Differences arising from|0.00|0.00|
|translation of foreign currency-|||
|denominated financial statements|||
|9. Others|186,635.00|-39,823,785.00|
|6. Total comprehensive income|538,119,007.00|512,578,384.00|
|7. Earnings per share|||
|(1) Basic earnings per share|0.0367|0.0374|
|(2) Diluted earnings per share|0.0361|0.0374|

 5. Consolidated Income Statement forQ1~Q3
Unit: RMB
||||
|-|-|-|
|Item|Q1~Q3 2019|Q1~Q3 2018|
|1. Revenue|58,904,374,914.00|82,311,703,856.00|

Third Quarter Report 2019 of TCL Corporation
||||
|-|-|-|
|Including: Operating revenue|58,817,666,092.00|82,237,144,880.00|
|Interest income|86,708,822.00|74,558,976.00|
|Earned premiums|||
|Fee and commission income|||
|2. Operating costs and expenses|59,149,896,807.00|81,214,122,617.00|
|Including: Cost of sales|51,216,771,448.00|67,608,559,930.00|
|Interest expense|13,129,607.00|47,798,247.00|
|Fee and commission expense|||
|Surrender value|||
|Net payments for insurance|||
|claims|||
|Reserve fund for insurance|||
|contracts|||
|Policyholder dividend|||
|expenses|||
|Amortized reinsurance|||
|expenditures|||
|Taxes and surcharges|289,281,187.00|476,751,931.00|
|Selling expense|2,582,419,684.00|6,591,710,312.00|
|Administrative expense|1,559,794,269.00|2,761,324,355.00|
|R&D expense|2,603,121,743.00|3,255,976,562.00|
|Finance costs|885,378,869.00|472,001,280.00|
|Including: Interest|1,531,338,739.00|1,426,122,381.00|
|expense|||
|Interest income|346,654,556.00|586,773,983.00|
|Add: Other income|1,439,033,065.00|1,681,149,454.00|
|Investment income (“-” for|2,582,149,708.00|1,554,782,242.00|
|loss)|||
|Including: Share of profit or|1,050,534,922.00|975,423,924.00|
|loss of joint ventures and associates|||
|Financial assets measured|||
|at amortized cost through profit or loss|||
|Foreign exchange gain (“-” for|-11,364,959.00|-46,156,011.00|
|loss)|||
|Net exposure hedge gain (“-”|0.00|0.00|
|for loss)|||

Third Quarter Report 2019 of TCL Corporation
||||
|-|-|-|
|Gain on changes in fair value|360,480,571.00|-211,675,899.00|
|(“-” for loss)|||
|Credit impairment loss (“-” for|-21,601,368.00|0.00|
|loss)|||
|Asset impairment loss (“-” for|-397,698,940.00|-883,711,527.00|
|loss)|||
|Asset disposal income (“-” for|2,171,307.00|20,666,672.00|
|loss)|||
|3. Operating profit (“-” for loss)|3,707,647,491.00|3,212,636,170.00|
|Add: Non-operating income|128,111,130.00|393,308,150.00|
|Less: Non-operating expense|23,468,759.00|63,678,620.00|
|4. Profit before tax (“-” for loss)|3,812,289,862.00|3,542,265,700.00|
|Less: Income tax expense|324,875,555.00|666,311,598.00|
|5. Net profit (“-” for net loss)|3,487,414,307.00|2,875,954,102.00|
|(1) Classified by continuity of|||
|operations|||
|1.Net profit from continuing|3,487,414,307.00|2,875,954,102.00|
|operations (“-” for net loss)|||
|2.Net profit from discontinued|0.00|0.00|
|operations (“-” for net loss)|||
|(2) Classified by ownership of the|||
|equity|||
|1.Net profit attributable to owners of|2,577,329,981.00|2,489,661,515.00|
|the Company as the parent|||
|2.Minority interests|910,084,326.00|386,292,587.00|
|6. Other comprehensive income, net of|486,458,995.00|-1,355,670,633.00|
|tax|||
|Attributable to owners of the Company|322,801,953.00|-1,204,107,955.00|
|as the parent|||
|(1) Items that will not be reclassified|10,569,895.00|0.00|
|to profit or loss|||
|1. Changes arising from||0.00|
|remeasurement on defined benefit plans|||
|2. Share of other|26,584,508.00||
|comprehensive income of investees that|||
|will not be reclassified to profit or loss|||
|under equity method|||
|3. Changes in fair value of|-15,116,675.00|0.00|

Third Quarter Report 2019 of TCL Corporation
||||
|-|-|-|
|other equity instruments investment|||
|4. Changes in the fair value||0.00|
|of the company’s own credit risk|||
|5. Others|-897,938.00||
|(2) Items that may subsequently be|312,232,058.00|-1,204,107,955.00|
|reclassified to profit or loss|||
|1. Share of other|-148,175,755.00|30,520,924.00|
|comprehensive income of investees that|||
|will be reclassified to profit or loss under|||
|equity method|||
|2. Changes in fair value of|||
|other debt investments|||
|3. Gains and losses from||-453,159,469.00|
|changes in fair value of available-for-sale|||
|financial assets|||
|4. Amount of financial assets|||
|reclassified into other comprehensive|||
|income|||
|5. Gain/Loss arising from|||
|reclassification of held-to-maturity|||
|investments to available-for-sale financial|||
|assets|||
|6. Other debt investment|||
|credit impairment provisions|||
|7. Cash flow hedge reserve|-81,314,957.00|-160,618,638.00|
|8. Differences arising from|541,722,770.00|-620,850,772.00|
|translation of foreign currency-|||
|denominated financial statements|||
|9. Others|0.00||
|Attributable to minority interests|163,657,042.00|-151,562,678.00|
|7. Total comprehensive income|3,973,873,302.00|1,520,283,469.00|
|Attributable to owners of the|2,900,131,934.00|1,285,553,560.00|
|Company as the parent|||
|Attributable to minority interests|1,073,741,368.00|234,729,909.00|
|8. Earnings per share|||
|(1) Basic earnings per share|0.1946|0.1842|
|(2) Diluted earnings per share|0.1902|0.1840|

Legal representative: Li Dongsheng Head for financial affairs: Du Juan Head of the financial department: Xi Wenbo
Third Quarter Report 2019 of TCL Corporation 6. Income Statement of the Company as the Parent forQ1~Q3
Unit: RMB
||||
|-|-|-|
|Item|Q1~Q3 2019|Q1~Q3 2018|
|1. Total revenue|1,307,562,446.00|1,592,583,396.00|
|Less: Cost of sales|1,147,964,483.00|1,426,166,215.00|
|Taxes and surcharges|9,260,334.00|5,192,099.00|
|Selling expense|19,930,919.00|22,078,001.00|
|Administrative expense|241,010,707.00|188,442,994.00|
|R&D expense|80,232,047.00|68,238,056.00|
|Finance costs|650,227,534.00|499,345,799.00|
|Including: Interest expense|1,009,268,066.00|947,416,942.00|
|Interest income|396,745,068.00|415,884,910.00|
|Add: Other income|4,958,600.00|0.00|
|Investment income (“-” for|1,103,949,851.00|3,460,955,519.00|
|loss)|||
|Including: Share of profit or|887,726,773.00|750,817,598.00|
|loss of joint ventures and associates|||
|Financial assets|0.00|0.00|
|measured at amortized cost through|||
|profit or loss|||
|Net exposure hedge gain (“-”|0.00|0.00|
|for loss)|||
|Gain on changes in fair value|44,716,834.00|-298,214,663.00|
|(“-” for loss)|||
|Credit impairment loss (“-”|2,741,266.00|0.00|
|for loss)|||
|Asset impairment loss (“-” for|0.00|-3,920,025.00|
|loss)|||
|Asset disposal income (“-” for|256,615,165.00|22,248,607.00|
|loss)|||
|2. Operating profit (“-” for loss)|571,918,138.00|2,564,189,670.00|
|Add: Non-operating income|77,307,037.00|299,706,726.00|
|Less: Non-operating expense|9,065,602.00|9,666,588.00|
|3. Profit before tax (“-” for loss)|640,159,573.00|2,854,229,808.00|
|Less: Income tax expense|0.00|0.00|
|4. Net profit (“-” for net loss)|640,159,573.00|2,854,229,808.00|

Third Quarter Report 2019 of TCL Corporation
||||
|-|-|-|
|(1) Net profit from continuing|640,159,573.00|2,854,229,808.00|
|operations (“-” for net loss)|||
|(2) Net profit from discontinued|0.00|0.00|
|operations (“-” for net loss)|||
|5. Other comprehensive income, net of|81,669,317.00|-16,405,104.00|
|tax|||
|(1) Items that will not be|20,973,409.00|0.00|
|reclassified to profit or loss|||
|1. Changes arising from|0.00|0.00|
|remeasurement on defined benefit plans|||
|2. Share of other|20,973,409.00|0.00|
|comprehensive income of investees that|||
|will not be reclassified to profit or loss|||
|under equity method|||
|3. Changes in fair value of|0.00|0.00|
|other equity instruments investment|||
|4. Changes in the fair value|0.00|0.00|
|of the company’s own credit risk|||
|5. Others|0.00|0.00|
|(2) Items that may subsequently be|60,695,908.00|-16,405,104.00|
|reclassified to profit or loss|||
|1. Share of other|60,509,273.00|11,837,631.00|
|comprehensive income of investees that|||
|will be reclassified to profit or loss|||
|under equity method|||
|2. Changes in fair value of|0.00|0.00|
|other debt investments|||
|3. Gains and losses from|0.00|-28,242,735.00|
|changes in fair value of available-for-|||
|sale financial assets|||
|4. Amount of financial|0.00|0.00|
|assets reclassified into other|||
|comprehensive income|||
|5. Gain/Loss arising from|0.00|0.00|
|reclassification of held-to-maturity|||
|investments to available-for-sale|||
|financial assets|||
|6. Other debt investment|0.00|0.00|
|credit impairment provisions|||

Third Quarter Report 2019 of TCL Corporation
||||
|-|-|-|
|7. Cash flow hedge reserve|0.00|0.00|
|8. Differences arising from|0.00|0.00|
|translation of foreign currency-|||
|denominated financial statements|||
|9. Others|186,635.00|0.00|
|6. Total comprehensive income|721,828,890.00|2,837,824,704.00|
|7. Earnings per share|||
|(1) Basic earnings per share|0.0483|0.2112|
|(2) Diluted earnings per share|0.0472|0.2109|

 7. Consolidated Cash Flow Statement forQ1~Q3
Unit: RMB
||||
|-|-|-|
|Item|Q1~Q3 2019|Q1~Q3 2018|
|1. Cash flows from operating activities:|||
|Proceeds from sale of commodities|62,445,844,833.00|87,478,829,334.00|
|and rendering of services|||
|Net increase in customer deposits and|1,726,469,676.00|118,621,967.00|
|interbank deposits|||
|Net increase in borrowings from|90,420,078.00|384,005,121.00|
|central bank|||
|Net increase in funds borrowed|0.00|0.00|
|from other financial institutions|||
|Cash premiums received on|||
|original insurance contracts|||
|Cash received from re-insurance|||
|business|||
|Net increase policyholders’|||
|deposits investments|||
|Interest, handling charges and|86,708,822.00|75,095,177.00|
|commissions received|||
|Net increase in interbank loans|0.00|0.00|
|obtained|||
|Net increase in repurchase|||
|business capital|||
|Net cash received from trading|||
|securities|||
|Tax refunded|2,937,257,381.00|3,150,142,479.00|

Third Quarter Report 2019 of TCL Corporation
||||
|-|-|-|
|Cash generated from other|1,928,746,345.00|1,555,464,127.00|
|operating activities|||
|Subtotal of cash generated from|69,215,447,135.00|92,762,158,205.00|
|operating activities|||
|Payments for commodities and|47,132,428,452.00|70,949,819,486.00|
|services|||
|Net increase in loans and advances|3,849,847,076.00|193,039,179.00|
|to customers|||
|Net increase in deposits in central|-273,067,081.00|-2,989,900,368.00|
|bank and in interbank loans granted|||
|Cash paid for original insurance|||
|contract compensation payment|||
|Net increase of lending funds|||
|Cash for payment of interest,|0.00|0.00|
|handling charge and commission|||
|Cash paid for policy dividends|||
|Cash paid to and for employees|3,548,355,254.00|6,552,021,316.00|
|Taxes paid|3,627,716,700.00|3,999,758,106.00|
|Cash used in other operating|3,720,892,545.00|6,500,987,618.00|
|activities|||
|Subtotal of cash used in operating|61,606,172,946.00|85,205,725,337.00|
|activities|||
|Net cash generated from/used in|7,609,274,189.00|7,556,432,868.00|
|operating activities|||
|2. Cash flows from investing activities:|||
|Proceeds from disinvestment|18,373,451,069.00|29,694,358,171.00|
|Investment income|730,526,027.00|811,956,499.00|
|Net proceeds from disposal of fixed|92,766,770.00|329,046,258.00|
|assets, intangible assets and other long-|||
|lived assets|||
|Net proceeds from disposal of|863,813,211.00|187,122,885.00|
|subsidiaries or other business units|||
|Cash generated from other investing|0.00|0.00|
|activities|||
|Subtotal of cash generated from|20,060,557,077.00|31,022,483,813.00|
|investing activities|||
|Payments for acquisition of fixed|14,853,883,306.00|24,385,750,710.00|
|assets, intangible assets and other long-|||

Third Quarter Report 2019 of TCL Corporation
||||
|-|-|-|
|lived assets|||
|Payments for investments|24,810,844,947.00|35,635,978,700.00|
|Net increase in pledged loans|0.00|0.00|
|granted|||
|Net payments for acquisition of|170,197,901.00|2,130,303.00|
|subsidiaries and other business units|||
|Cash used in other investing activities|7,118,896,267.00|0.00|
|Subtotal of cash used in investing|46,953,822,421.00|60,023,859,713.00|
|activities|||
|Net cash generated from/used in|-26,893,265,344.00|-29,001,375,900.00|
|investing activities|||
|3. Cash flows from financing activities:|||
|Capital contributions received|7,530,780,247.00|4,268,302,543.00|
|Including: Capital contributions by|7,523,571,607.00|4,204,844,650.00|
|non-controlling interests to subsidiaries|||
|Increase in borrowings obtained|30,186,401,095.00|41,706,872,105.00|
|Cash generated from other financing|2,017,417,200.00|3,000,000,000.00|
|activities|||
|Subtotal of cash generated from|39,734,598,542.00|48,975,174,648.00|
|financing activities|||
|Repayment of borrowings|23,925,281,321.00|33,831,573,154.00|
|Payments for interest and dividends|3,700,800,263.00|3,915,826,749.00|
|Including: Dividends paid by|99,072,668.00|340,664,124.00|
|subsidiaries to non-controlling interests|||
|Cash used in other financing|2,150,539,531.00|1,917,202.00|
|activities|||
|Subtotal of cash used in financing|29,776,621,115.00|37,749,317,105.00|
|activities|||
|Net cash generated from/used in|9,957,977,427.00|11,225,857,543.00|
|financing activities|||
|4. Effect of foreign exchange rate|657,452,489.00|-300,902,699.00|
|changes on cash and cash equivalents|||
|5. Net increase in cash and cash|-8,668,561,239.00|-10,519,988,188.00|
|equivalents|||
|Add: Cash and cash equivalents,|25,702,383,482.00|23,281,170,085.00|
|beginning of the period|||
|6. Cash and cash equivalents, end of the|17,033,822,243.00|12,761,181,897.00|
|period|||

Third Quarter Report 2019 of TCL Corporation 8. Cash Flow Statement of the Company as the Parent forQ1~Q3
Unit: RMB
||||
|-|-|-|
|Item|Q1~Q3 2019|Q1~Q3 2018|
|1. Cash flows from operating activities:|||
|Proceeds from sale of commodities|1,143,838,588.00|1,604,971,486.00|
|and rendering of services|||
|Tax rebates|690,755.00|0.00|
|Cash generated from other operating|14,276,992,714.00|7,682,534,306.00|
|activities|||
|Subtotal of cash generated from|15,421,522,057.00|9,287,505,792.00|
|operating activities|||
|Payments for commodities and|1,229,934,222.00|1,731,946,423.00|
|services|||
|Cash paid to and for employees|120,421,860.00|156,871,079.00|
|Taxes paid|53,164,105.00|26,766,977.00|
|Cash used in other operating|1,161,090,996.00|2,205,056,143.00|
|activities|||
|Subtotal of cash used in operating|2,564,611,183.00|4,120,640,622.00|
|activities|||
|Net cash generated from/used in|12,856,910,874.00|5,166,865,170.00|
|operating activities|||
|2. Cash flows from investing activities:|||
|Proceeds from disinvestment|13,841,885,978.00|24,032,951,216.00|
|Investment income|638,304,881.00|2,186,097,813.00|
|Net proceeds from disposal of fixed|141,657.00|242,738,774.00|
|assets, intangible assets and other long-|||
|lived assets|||
|Net proceeds from disposal of|0.00|0.00|
|subsidiaries or other business units|||
|Cash generated from other investing|0.00|0.00|
|activities|||
|Subtotal of cash generated from|14,480,332,516.00|26,461,787,803.00|
|investing activities|||
|Payments for acquisition of fixed assets,|3,836,282.00|8,872,601.00|
|intangible assets and other long-lived|||
|assets|||
|Payments for investments|12,209,066,918.00|29,520,135,549.00|

Third Quarter Report 2019 of TCL Corporation
||||
|-|-|-|
|Net payments for acquisition of|0.00|0.00|
|subsidiaries and other business units|||
|Cash used in other investing|0.00|0.00|
|activities|||
|Subtotal of cash used in investing|12,212,903,200.00|29,529,008,150.00|
|activities|||
|Net cash generated from/used in|2,267,429,316.00|-3,067,220,347.00|
|investing activities|||
|3. Cash flows from financing activities:|||
|Capital contributions received|7,208,640.00|63,457,893.00|
|Increase in borrowings obtained|9,058,956,000.00|8,474,962,000.00|
|Cash generated from other financing|2,000,000,000.00|3,000,000,000.00|
|activities|||
|Subtotal of cash generated from|11,066,164,640.00|11,538,419,893.00|
|financing activities|||
|Repayment of borrowings|12,740,956,000.00|7,791,532,000.00|
|Payments for interest and dividends|2,202,303,594.00|2,146,282,637.00|
|Cash used in other financing|1,837,149,002.00|1,917,202.00|
|activities|||
|Sub-total of cash used in financing|16,780,408,596.00|9,939,731,839.00|
|activities|||
|Net cash generated from/used in|-5,714,243,956.00|1,598,688,054.00|
|financing activities|||
|4. Effect of foreign exchange rate|-27,037,253.00|58,444,146.00|
|changes on cash and cash equivalents|||
|5. Net increase in cash and cash|9,383,058,981.00|3,756,777,023.00|
|equivalents|||
|Add: Cash and cash equivalents,|1,328,680,629.00|1,056,211,686.00|
|beginning of the period|||
|6. Cash and cash equivalents, end of the|10,711,739,610.00|4,812,988,709.00|
|period|||

II. Instructions on the Adjustment of Financial Statements
1. The implementation of new financial instrument criteria, new revenue criteria or new lease criteria from 2019 on and the adjusted implementation of financial statements at the beginning of the year
Consolidated balance sheet
Unit: RMB
Third Quarter Report 2019 of TCL Corporation
|||||
|-|-|-|-|
|Assets|31 December 2018|1 January 2019|Adjusted|
|Current assets:||||
|Monetary capital|26,801,342,532.00|26,801,342,532.00||
|Deposit reservation for||||
|balance||||
|Lending funds||||
|Financial assets held for|0.00|||
|||2,632,625,960.00|2,632,625,960.00|
|trading||||
|Financial assets at fair|1,137,579,704.00|||
||||-1,137,579,704.00|
|value through profit or loss||||
|Derivative financial|0.00|||
|||197,798,188.00|197,798,188.00|
|assets||||
|Notes receivable|4,272,221,611.00|4,272,221,611.00||
|Accounts receivable|13,651,444,917.00|13,647,564,194.00|-3,880,723.00|
|Receivables financing||||
|Advances to suppliers|1,194,972,138.00|1,194,972,138.00||
|Premiums receivable||||
|Reinsurance accounts||||
|receivable||||
|Reinsurance reserve||||
|fund receivable||||
|Other receivable|5,719,378,954.00|5,716,183,466.00|-3,195,488.00|
|Including: Interest|70,777,805.00|||
|||70,777,109.00|-696.00|
|receivable||||
|Dividend|47,748,475.00|||
|||47,748,475.00||
|receivable||||
|Redemptory monetary|0.00|||
|capital for sale||||
|Inventory|19,887,971,677.00|19,887,971,677.00||
|Contract assets||||
|Available-for-sale|18,792,459.00|||
|||18,792,459.00||
|financial assets||||
|Non-current assets|0.00|||
|matured within one year||||
|Other current assets|7,624,097,005.00|7,624,097,005.00||
|Total current assets|80,307,800,997.00|81,993,569,230.00|1,685,768,233.00|
|Non-current assets:||||

Third Quarter Report 2019 of TCL Corporation
|||||
|-|-|-|-|
|Loans and advances to|1,123,799,564.00|||
|||1,123,799,564.00||
|customers||||
|Debt investment|0.00|||
|Available-for-sale|4,270,844,592.00|||
||||-4,270,844,592.00|
|financial assets||||
|Other debt investment|0.00|||
|Held-to-maturity||||
|investment||||
|Long-term receivables|0.00|||
|Long-term equity|16,957,109,519.00|||
|||17,117,936,085.00|160,826,566.00|
|investment||||
|Other equity instrument|0.00|||
|||1,618,075,184.00|1,618,075,184.00|
|investment||||
|Other non-current|0.00|||
|||1,034,117,327.00|1,034,117,327.00|
|financial assets||||
|Investment property|1,676,210,635.00|1,676,210,635.00||
|Fixed assets|35,983,131,306.00|35,983,131,306.00||
|Construction in|38,924,586,355.00|||
|||38,924,586,355.00||
|progress||||
|Productive biological||||
|assets||||
|Oil and gas assets||||
|Right-of-use assets||||
|Intangible assets|5,954,872,994.00|5,954,872,994.00||
|R&D expense|1,011,503,608.00|1,011,503,608.00||
|Goodwill|357,111,511.00|357,111,511.00||
|Long-term prepaid|1,861,333,252.00|||
|||1,861,333,252.00||
|expense||||
|Deferred income tax|797,881,851.00|||
|||797,881,851.00||
|assets||||
|Other non-current assets|3,537,755,555.00|3,537,755,555.00||
|Total non-current assets|112,456,140,742.00|110,998,315,227.00|-1,457,825,515.00|
|Total assets|192,763,941,739.00|192,991,884,457.00|227,942,718.00|
|Current liabilities:||||
|Short-term borrowings|13,287,723,834.00|13,287,723,834.00||
|Borrowings from central|231,404,499.00|||
|||231,404,499.00||
|bank||||

Third Quarter Report 2019 of TCL Corporation
|||||
|-|-|-|-|
|Interbank loans obtained|0.00|||
|Transactional financial|0.00|||
|||143,456,979.00|143,456,979.00|
|liabilities||||
|Financial liabilities at|212,097,067.00|||
|fair value through profit or|||-212,097,067.00|
|loss||||
|Derivative financial|0.00|||
|||68,640,088.00|68,640,088.00|
|liabilities||||
|Notes payable|3,092,573,501.00|3,092,573,501.00||
|Accounts payable|23,922,711,995.00|23,922,711,995.00||
|Advances from|1,460,773,236.00|||
|||1,460,773,236.00||
|customers||||
|Contract liability||||
|Financial assets sold|0.00|||
|under repurchase agreements||||
|Customer deposits and|545,052,800.00|||
|||545,052,800.00||
|interbank deposits||||
|Receiving from||||
|vicariously traded securities||||
|Acting underwriting||||
|securities||||
|Payroll payable|2,891,392,699.00|2,891,392,699.00||
|Taxes payable|716,534,266.00|716,534,266.00||
|Other payables|23,120,774,383.00|23,120,774,383.00||
|Including: Interest|586,819,775.00|||
|||586,819,775.00||
|payable||||
|Dividend|22,552,834.00|||
|||22,552,834.00||
|payable||||
|Handling charges and||||
|commissions payable||||
|Dividend payable for||||
|reinsurance||||
|Liabilities held for sale|0.00|||
|Current portion of non-|6,009,915,080.00|||
|||6,009,915,080.00||
|current liabilities||||
|Other current liabilities|3,344,450,936.00|3,344,450,936.00||
|Total current liabilities|78,835,404,296.00|78,835,404,296.00||

Third Quarter Report 2019 of TCL Corporation
|||||
|-|-|-|-|
|Non-current liabilities:||||
|Reserve fund for||||
|insurance contract||||
|Long-term borrowings|36,864,922,669.00|36,864,922,669.00||
|Bonds payable|12,985,628,025.00|12,985,628,025.00||
|Including: preferred||||
|stock||||
|Perpetual||||
|capital securities||||
|Lease liability||||
|Long-term payables|73,901,549.00|73,901,549.00||
|Long-term payroll|24,245,725.00|||
|||24,245,725.00||
|payable||||
|Anticipation liabilities||||
|Deferred income|2,637,228,528.00|2,637,228,528.00||
|Deferred income tax|440,352,161.00|||
|||441,171,726.00|819,565.00|
|liabilities||||
|Other non-current|30,586,139.00|||
|||30,586,139.00||
|liabilities||||
|Total non-current liabilities|53,056,864,796.00|53,057,684,361.00|819,565.00|
|Total liabilities|131,892,269,092.00|131,893,088,657.00|819,565.00|
|Owners’ equity:||||
|Share capital|13,549,648,507.00|13,549,648,507.00||
|Other equity instruments||||
|Including: preferred||||
|stock||||
|Perpetual||||
|capital securities||||
|Capital surplus|5,996,741,456.00|5,996,741,456.00||
|Less: Treasury stock|63,457,893.00|63,457,893.00||
|Other comprehensive|-1,174,161,842.00|||
|||-839,211,395.00|334,950,447.00|
|income||||
|Special reserves||||
|Surplus reserves|2,184,261,029.00|2,184,261,029.00||
|General reserve|360,766.00|360,766.00||
|Retained earnings|10,000,972,928.00|9,894,139,954.00|-106,832,974.00|

Third Quarter Report 2019 of TCL Corporation
|||||
|-|-|-|-|
|Total equity attributable to|30,494,364,951.00|||
|owners of the Company as||30,722,482,424.00|228,117,473.00|
|the parent||||
|Minority interests|30,377,307,696.00|30,376,313,376.00|-994,320.00|
|Total owners’ equity|60,871,672,647.00|61,098,795,800.00|227,123,153.00|
|Total liabilities and owners’|192,763,941,739.00|||
|||192,991,884,457.00|227,942,718.00|
|equity||||

Balance Sheet of the Company as the Parent
Unit: RMB
|||||
|-|-|-|-|
|Assets|31 December 2018|1 January 2019|Adjusted|
|Current assets:||||
|Monetary capital|1,328,706,659.00|1,328,706,659.00||
|Financial assets held for||||
|||40,735,804.00|40,735,804.00|
|trading||||
|Financial assets at fair|711,741,161.00|||
||||-711,741,161.00|
|value through profit or loss||||
|Derivative financial||||
|||2,802,750.00|2,802,750.00|
|assets||||
|Notes receivable|20,496,958.00|20,496,958.00||
|Accounts receivable|194,958,986.00|194,958,986.00||
|Receivables financing||||
|Advances to suppliers|187,895,276.00|187,895,276.00||
|Other receivable|18,773,352,761.00|18,773,352,761.00||
|Including: Interest|212,199,974.00|||
|||212,199,974.00||
|receivable||||
|Dividend|4,211,824,115.00|||
|||4,211,824,115.00||
|receivable||||
|Inventory|825,999.00|825,999.00||
|Contract assets||||
|Available-for-sale||||
|financial assets||||
|Non-current assets||||
|matured within one year||||
|Other current assets|1,873,961,604.00|1,873,961,604.00||
|Total current assets|23,091,939,404.00|22,423,736,797.00|-668,202,607.00|
|Non-current assets:||||
|Debt investment||||

Third Quarter Report 2019 of TCL Corporation
|||||
|-|-|-|-|
|Available-for-sale|1,185,429,885.00|||
||||-1,185,429,885.00|
|financial assets||||
|Other debt investment||||
|Held-to-maturity||||
|investment||||
|Long-term receivables||||
|Long-term equity|41,803,449,993.00|||
|||41,803,449,993.00||
|investment||||
|Other equity instrument||||
|||1,144,694,080.00|1,144,694,080.00|
|investment||||
|Other non-current||||
|||708,938,412.00|708,938,412.00|
|financial assets||||
|Investment property|5,158,426.00|5,158,426.00||
|Fixed assets|40,058,266.00|40,058,266.00||
|Construction in|551,693.00|||
|||551,693.00||
|progress||||
|Productive biological||||
|assets||||
|Oil and gas assets||||
|Right-of-use assets||||
|Intangible assets|18,776,430.00|18,776,430.00||
|R&D expense||||
|Goodwill||||
|Long-term prepaid|461,055,759.00|||
|||461,055,759.00||
|expense||||
|Deferred income tax||||
|assets||||
|Other non-current assets||||
|Total non-current assets|43,514,480,452.00|44,182,683,059.00|668,202,607.00|
|Total assets|66,606,419,856.00|66,606,419,856.00||
|Current liabilities:||||
|Short-term borrowings|3,300,260,000.00|3,300,260,000.00||
|Transactional financial||||
|liabilities||||
|Financial liabilities at||||
|fair value through profit or||||
|loss||||

Third Quarter Report 2019 of TCL Corporation
||||
|-|-|-|
|Derivative financial|||
|liabilities|||
|Notes payable|123,708,153.00|123,708,153.00|
|Accounts payable|252,801,470.00|252,801,470.00|
|Advances from|38,614,679.00||
|||38,614,679.00|
|customers|||
|Contract liability|||
|Payroll payable|98,753,095.00|98,753,095.00|
|Taxes payable|3,437,498.00|3,437,498.00|
|Other payables|6,407,741,790.00|6,407,741,790.00|
|Including: Interest|471,294,072.00||
|||471,294,072.00|
|payable|||
|Dividend|4,549,747.00||
|||4,549,747.00|
|payable|||
|Liabilities held for sale|||
|Current portion of non-|3,000,000,000.00||
|||3,000,000,000.00|
|current liabilities|||
|Other current liabilities|2,000,000,000.00|2,000,000,000.00|
|Total current liabilities|15,225,316,685.00|15,225,316,685.00|
|Non-current liabilities:|||
|Long-term borrowings|5,340,956,000.00|5,340,956,000.00|
|Bonds payable|12,985,628,025.00|12,985,628,025.00|
|Including: preferred|||
|stock|||
|Perpetual|||
|capital securities|||
|Lease liability|||
|Long-term payables|700,000.00|700,000.00|
|Long-term payroll|24,245,725.00||
|||24,245,725.00|
|payable|||
|Anticipation liabilities|||
|Deferred income|51,506,173.00|51,506,173.00|
|Deferred income tax|||
|liabilities|||
|Other non-current|||
|liabilities|||

Third Quarter Report 2019 of TCL Corporation
|||||
|-|-|-|-|
|Total non-current liabilities|18,403,035,923.00|18,403,035,923.00||
|Total liabilities|33,628,352,608.00|33,628,352,608.00||
|Owners’ equity:||||
|Share capital|13,549,648,507.00|13,549,648,507.00||
|Other equity instruments||||
|Including: preferred||||
|stock||||
|Perpetual||||
|capital securities||||
|Capital surplus|8,565,337,838.00|8,565,151,202.00|-186,636.00|
|Less: Treasury stock|63,457,893.00|63,457,893.00||
|Other comprehensive|-24,869,176.00|||
|||-25,418,344.00|-549,168.00|
|income||||
|Special reserves||||
|Surplus reserves|1,982,196,590.00|1,982,196,590.00||
|Retained earnings|8,969,211,382.00|8,969,947,186.00|735,804.00|
|Total owners’ equity|32,978,067,248.00|32,978,067,248.00||
|Total liabilities and owners’|66,606,419,856.00|||
|||66,606,419,856.00||
|equity||||

2. Instructions on Comparable Data on the earlier stage of retroactive adjustment and the implementation of new financial instrument criteria or new lease criteria from 2019 on
For the financial instruments recognized and measured before 1 January 2019 in a way that is inconsistent with the New Accounting Standards for Financial Instruments, the Company makes transitional adjustments according to the new standards. And the Company does not restate the comparable financial data of the previous period that is inconsistent with the New Accounting Standards for Financial Instruments. The difference between the original carrying amount of a financial instrument and the new carrying amount on the date of the adoption of the New Accounting Standards for Financial Instruments is recorded in the retained earnings or other comprehensive income as at 1 January 2019.
III IndependentAuditor’s Report
Indicate whether the financial statements above have been audited by an independent auditor.
□Yes√ No
These financial statements have not been audited by such an auditor.