TCL COMMUNICATION TECHNOLOGY HOLDINGS LIMITED (2618.HK)

2016 Interim Results Presentation Hong Kong · 12 August 2016 AGENDA 2

FINANCIAL BUSINESS REVIEW Q & A HIGHLIGHTS & OUTLOOK FINANCIAL HIGHLIGHTS FINANCIAL HIGHLIGHTS 4

Income Statement (HK$ Million)

Q2 Q2 Change 1H 1H Change 2016 2015 (%) 2016 2015 (%) Total Sales Vol. 15,960 17,912 -11% 33,101 33,692 -2% (’000 units)

Incl. Sales Vol. of Smart 8,601 9,975 -14% 17,413 19,682 -12% Devices (’000 units)

Total ASP (US$) 43.5 47.1 -8% 42.6 50.7 -16%

Revenue 5,378 6,537 -18% 10,932 13,227 -17%

Gross Profit Margin (%) 21.4% 19.5% +1.9% 20.4% 19.3% +1.1%

Net Profit 2 269 -99% 11 454 -98%

Net Profit Margin (%) 0.04% 4.1% -4.1% 0.1% 3.4% -3.3%

Basic EPS (HK Cents) 0.64 21.41 -97% 1.76 36.58 -95% QUARTERLY REVENUE OF HANDSETS & OTHER PRODUCTS 5

Revenue (HK$ Billion) 15 Smart Devices Feature Phones and Other Products

12 10.7 1.1

9 8.3 7.8 7.5 1.0 1.0 7.1 6.7 6.7 6.5 0.9 2.3 0.7 0.6 6 5.5 5.5 1.3 5.6 5.4 0.9 1.2 9.6 0.8 4.0 2.1 7.3 1.5 6.8 3 6.0 5.9 6.2 2.4 5.2 5.4 4.3 4.7 4.6 1.2 3.4 2.5 1.2 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2013 2013 2013 2013 2014 2014 2014 2014 2015 2015 2015 2015 2016 2016 QUARTERLY SALE VOLUME OF TABLETS 6 CONTINUOUS AND STEADY SALES VOLUME

Volume (‘000 unit) 2,000

1,500 1,339 1,315

1,099 986 990 1,000 863 718

513 500

289

63 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2014 2014 2014 2014 2015 2015 2015 2015 2016 2016 SALES VOLUME PROPORTION & ASP 7 REFINED PRODUCT PORTFOLIO STRATEGY

ASP Smart Devices Proportion (US$) （%） 80 100% ASP (US$) Smart Devices Proportion

90% 70

80% 60 55.1 54.7 70% 52.2 52.4 53.4 50.2 50 47.1 45.4 43.3 60% 62% 62% 42.0 41.8 43.5 41.8 58% 56% 40 55% 54% 50% 37.0 53% 51% 53% 46% 40% 30 40% 34% 30% 20 27% 20%

10 17% 10%

0 0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2013 2013 2013 2013 2014 2014 2014 2014 2015 2015 2015 2015 2016 2016 GROSS MARGIN TREND 8 SUSTAINABLE HEALTHY RANGE

GP Margin (%) 30.0%

21.1% 21.4% 19.3% 19.4% 20.0% 19.0% 17.4%

10.0% Continuing Brand Value and Cost-Down Efforts Pricing and Customer Economies Currency Strategy Relationship of Scale Product Competitiveness 0.0% Q1 Q2 2012 2013 2014 2015 2016 2016 FINANCIAL POSITION HIGHLIGHTS 9 STATEMENT OF FINANCIAL POSITION

(HK$ Million) 30 June 2016 31 December 2015 Change (%)

Non-current assets 4,444 4,364 +2% Current assets Inventories 3,386 2,541 +33% Trade & factored receivables 5,277 6,095 -13% Other current assets 1,780 2,013 -12% Pledged deposits 696 1,028 -32% Cash and cash equivalents 587 566 +4% Total current assets 11,726 12,243 -4% Current liabilities Interest-bearing bank and (2,499) (3,074) -19% other borrowings Other current liabilities (4,322) (4,154) +4% Trade and notes payables (4,820) (4,790) +1% Total current liabilities (11,641) (12,018) -3% Net current assets 85 225 -62% Total assets less current liabilities 4,529 4,589 -1% Non-current liabilities (478) (551) -13% Net assets 4,051 4,038 -- KEY FINANCIAL RATIOS 10

30 June 2016 31 December 2015

Gearing Ratio 16% 20%

Current Ratio 1.01 1.02

Trade Receivables Turnover Days* 81 89

Inventory Turnover Days ** 28 26

NAV Per Share HK$3.13 HK$ 3.16

* Excluding factored trade receivables ** Only inventories in factory BUSINESS REVIEW & OUTLOOK 1H 2016 OVERVIEW 12 RESULTS • Sales Volume: 33.1 million units, down 2% YoY (including 17.4 million units of smart devices, down 12% YoY） • Revenue: HK$ 10.9 billion, down 17% YoY

• Net Profit: HK$ 11 million, down 98% YoY

• Basic EPS: Decreased to 1.76 HK cents from 36.58 HK cents

BUSINESS OVERVIEW • Healthy gross margin: Implemented a more stringent approach to controlling risk and focused on business with high profitability in view of the gloomy economic conditions, intensified competition and continued currency fluctuation. Gross margin remained at a healthy level of over 19%.

• Continuous growth in tablet Quarterly tablet sales volume has increased steadily over the past 2 years. In 1H sales volume: 2016, tablet sales volume increased 9% YoY to almost 1.9 million units.

• Sustainable growth in In 1H 2016, the cumulative number of activated users of mobile Internet application internet applications and platforms increased almost 2 times YoY to 34.5 million; while the settlement amount service business: of third party payment increased for more than 3 times YoY to HK$7.3 billion.

• Virtual Reality (VR) device Unveiled its first VR-supporting flagship smartphone, Alcatel IDOL 4S, alongside VR- debut: in-the-Box, which officially announced its entry into the VR market.

+ COMPANY DATA 13 INDUSTRY RANKING - TOTAL PHONES NO. 6 GLOBAL HANDSET BRAND

TOP 10 BRANDS IN Q1 16 (Source: Gartner and Company Data) Q1 16 Q1 16 QoQ YoY Rank Company Shipments Market Share Growth Rate Growth Rate (Million units) (%) (%) (%) 1 Samsung 95.5 21.3 -4.5 -2.6

2 Apple 51.6 11.5 -27.8 -14.2

3 29.0 6.5 -10.2 +56.0

4 16.7 3.7 -38.1 -49.3

5 16.3 3.6 +22.5 +136.5

No.6 6 TCL-Alcatel 16.2 3.6 -33.8 +7.3

7 15.0 3.4 -17.4 +2.1

8 LG 14.3 3.2 -21.8 -27.4

9 BBK 14.1 3.2 +23.7 +125.4

10 ZTE 13.7 3.1 -19.9 +2.3

Others 165.0 36.9 -15.6 -5.9

TOTAL 447.4 100.0 -15.4 -3.0 + COMPANY DATA 14 INDUSTRY RANKING – NO. 10 GLOBAL SMARTPHONE BRAND

TOP 10 SMARTPHONE BRANDS IN Q1 16 (Source: Gartner and Company Data) Q1 16 Q1 16 QoQ YoY Rank Company Shipments Market Share Growth Rate Growth Rate (Million units) (%) (%) (%) 1 Samsung 81.2 23.2 -2.7 +0.1

2 Apple 51.6 14.8 -27.8 -14.2

3 Huawei 28.9 8.3 -10.1 +59.4

4 OPPO 16.1 4.6 +24.3 +144.7

5 Xiaomi 15.0 4.3 -17.4 +2.1

6 BBK 14.0 4.0 +23.3 +131.4

7 12.7 3.6 -36.8 -33.0

8 LG 12.6 3.6 -18.5 -18.6

9 ZTE 11.1 3.2 -24.8 +10.7

No.10 10 TCL-Alcatel 7.9 2.3 -40.8 -13.2

Others 98.2 28.1 -10.6 +2.2

TOTAL 349.3 100.0 -13.4 -3.9 + COMPANY DATA 15 INDUSTRY RANKING – TABLETS NO. 7 GLOBAL TABLET BRAND

TOP 10 TABLET BRANDS IN Q1 16 (Source: Gartner and Company Data) Q1 16 Q1 16 QoQ YoY Rank Company Shipments Market Share Growth Rate Growth Rate (Million units) (%) (%) (%) 1 Apple 10.1 24.9 -33.9 -26.5

2 Samsung 7.1 17.5 -12.6 -5.9

3 Lenovo 2.1 5.2 -32.8 -17.1

4 Huawei 2.0 4.9 -7.1 +89.5

5 1.5 3.7 -51.8 +132.6

6 1.0 2.5 -37.5 -39.2

No.7 7 TCL-Alcatel 1.0 2.5 -24.7 +37.9

8 Microsoft 0.9 2.2 +7.4 +16.0

9 Acer 0.6 1.5 -34.4 -12.3

10 LG 0.6 1.5 -38.4 -45.3

Others 13.7 33.6 -17.0 -35.1

TOTAL 40.6 100.0 -24.7 -21.3 1H 2016 GEOGRAPHICAL REVENUE BREAKDOWN 16

FEATURE PHONES & OTHER PRODUCTS SMART DEVICES

CHINA CHINA 4% 3% APAC APAC 6% 5% NORTH MEA MEA NORTH AMERICA 8% 8% AMERICA 30% 32%

EUROPE 24% EUROPE 32% LATIN AMERICA LATIN 20% AMERICA 28% INTERNATIONAL BUSINESS REVIEW 17 Revenue NORTH AMERICA (HK$ Billion) +6% • Sales volume: 7.1 million units, up 4% YoY; 4.0 Revenue: HK$3.43 billion, up 6% YoY • Sales volume of smart devices: 4.3 million units, up 37% YoY 3.0 • Q1 2016 sales volume ranking (Source: Gartner & Company data): North America: No. 4 (Total phones); No. 5 (Smartphones) 2.0 3.43 • Recorded continuous growth in tablet business by leveraging the close 3.22 relationship with major operators 1.0 • Q3 business plan: Seize opportunities in VR, increase sales of 4G products 0.0 1H 1H 2015 2016 Revenue LATIN AMERICA (HK$ Billion) • Sales volume: 9.9 million units, down 7% YoY; 6.0 -27% Revenue: HK$2.94 billion, down 27% YoY • Sales volume of smart devices: 5.5 million units, down 16% YoY • Q1 2016 sales volume ranking (Source: Gartner & Company data): 4.0 Latin America: No. 3 (Total phones); No. 5 (Smartphones); No. 4 (Tablets) Mexico: No. 3 (Total phones); No. 4 (Smartphones); No. 4 (Tablets) 2.0 4.00 Chile: No. 3 (Total phones); No. 4 (Smartphones); No. 4 (Tablets) 2.94 • Business was affected by prolonged currency fluctuations and the rise of local kings 0.0 1H 1H • Q3 business plan: Continue implementing stringent controls on currency 2015 2016 and credit risks, optimise product mix to strengthen leading position in entry-level smartphone market INTERNATIONAL BUSINESS REVIEW 18 Revenue EUROPE (HK$ Billion) • Sales volume: 8.7 million units, up 14% YoY; 4.0 -13% Revenue: HK$2.77 billion, down 13% YoY • Sales volume of smart devices: 4.2 million units, down 7% YoY 3.0 • Q1 2016 sales volume ranking (Source: Gartner & Company data): Europe: No. 5 (Total phones); No. 7 (Smartphones) 2.0 3.20 Eastern Europe (excl. Russia): 2.77 No. 5 (Total phones); No. 8 (smartphones); No. 3 (Tablets) 1.0 • Maintained market share with mid-high end smart devices 0.0 • Q3 business plan: Widen open market and online sales channels 1H 1H 2015 2016 Revenue MEA (HK$ Billion) • Sales volume: 3.9 million units, down 1% YoY; 2.0 Revenue: HK$890 million, down 30% YoY -30% • Sales volume of smart devices: 1.9 million units, down 28% YoY 1.5 • Q1 2016 sales volume ranking (Source: Gartner & Company data): MEA: No. 6 (Total phones); No. 6 (Smartphones); No. 3 (Tablets) 1.0 South Africa: No. 3 (Total phones); No. 2 (Smartphones); No. 1 (Tablets) 1.28 • Increasing number of domestic brands intensified market competition 0.5 0.89 • Q3 business plan: Focus on entry-level products to secure its existing market share 0.0 1H 1H 2015 2016 INTERNATIONAL BUSINESS REVIEW 19 Revenue APAC (HK$ Billion) 0.8 • Sales volume: 1.7 million units, up 83% YoY; +48% Revenue: HK$540 million, up 48% YoY • Sales volume of smart devices: 0.9 million units, up 46% YoY 0.6 • Continued monitoring the impact of currency devaluation, enforced stringent controls on exchange rate risk 0.4 • Q3 business plan: Further broaden online sales channels 0.54 0.2 0.37

0.0 1H 1H 2015 2016 Revenue CHINA (HK$ Billion) • Sales volume: 1.8 million units, down 52% YoY; 1.5 -69% Revenue: HK$360 million, down 69% YoY • Sales volume of smart devices: 0.6 million units, down 71% YoY 1.0 • Completed strategic adjustment and business reorganisation, implemented premium products strategy 1.16 • Q3 business plan: Develop operators, open markets and e-commerce 0.5 channels in parallel, establish strategic partnership in pre-installation, promotion and joint marketing 0.36 0.0 1H 1H 2015 2016 STEP-UP PRODUCT STRATEGY 20

2.8‛-6‛ display 6‛-10.1‛ Tablets 16.3‛ BigPad Wearable devices 4.5‛-6‛ display Android L Quad-core CPU Windows OS 6.45mm thickness Cloud applications Android 4.2 4G 3.5‛-6‛ display Firefox 16.3‛ BigPad Multi-screen Wearable device for kids Wi-Fi display on TV Android M 2.8’’- 4.5’’ display 5‛-6‛ Display Windows 10 Mobile 650MHz-1.5GHz 6‛-10‛ Tablets Full metal body Dual-core CPU Octa-core CPU VR devices Android 4.0 - 4.1 EDGE Metal casing GPRS, Windows Android 4.4 Ultra-low Qwerty cost keypad 2.8’’- 3.5’’ display 2015-2016 Qwerty key Multi-touch 500MHz-600MHz pad display Android Entry-level 2.1 - 2.3 3G 2013-2014 Multi-touch panel 2 in 1 / technology 2011-2012 WEARABLE DEVICE/ SMART CONNECTIVITY MULTIPLE OS/ IoT

2007-2010 FEATURE EDGE 4G/ TABLET/ VIRTUAL REALITY DEVICE/ PHONE PHONE SMARTPHONE CLOUD TERMINAL BIGPAD PRODUCTS SELECTED BY GLOBAL MAINSTREAM OPERATORS & DISTRIBUTORS 21

EUROPE CHINA

·

NORTH APAC AMERICA

LATIN AMERICA MEA NEW PRODUCTS 22

IDOL 4 Series received 14 recognitions at MWC 2016

Octa Core CPU 5.2'‘ FHD IPS Display Slim Body: 7.1 mm 13 Mpxl Rear Camera, Dual-tone LED Flash Augmented Multimedia Experience with Boom Key

Octa Core CPU 5.5‛ QHD AMOLED Display Ultra Slim Body: 6.99 mm 16 Mpxl Rear Camera, Dual-tone LED Flash Augmented Multimedia Experience with Boom Key VR–in-the-Box NEW PRODUCTS 23

PLUS 10 received 3 recognitions at MWC 2016

Quad Core CPU 10.1‛ HD IPS Display Windows 10 Home Long-lasting Battery: 8,410 mAh (with LTE Keyboard) Detachable LTE Keyboard (Wi-Fi Hotspot for up to 15 Devices)

Octa Core CPU 5.2'‘ FHD LTPS Display Compatible with Android 4.3 & Ultra Slim Body: 6.95mm iOS 7 or Above 16 Mpxl Rear Camera Long Standby Time: 4 days Dual-tone LED Flash IP65 certified: Water & Dust Resistant Fingerprint Recognition 2-way Call & Voice Message Full Netcom GPS Locator

BRAND-BUILDING ACTIVITIES 24

01 02

03 04

01. The 4th China Information Technology Expo 2016 China

02. TCL 750 Product Launch China

03. IDOL 4S Product Launch Philippines

04. The 10th La Rochelle Beach Cup Sponsorship France OUTLOOK 25 CHALLENGES  Strong headwinds in global economic environment persist, which increase operation and credit risks  Persistently strong US dollar further weakens purchasing power in emerging markets  Active overseas expansion of Chinese handset manufacturers intensifies market competition  Threats from local kings in various regions are mounting

EXECUTION PLANS  Continue to implement stringent credit control and hedging policies to maintain a healthy and stable financial position  Optimise management capability, improve internal communication and collaboration efficiency  Invest resources into developing cost-competitive mid-high end products and VR devices to seize market share  Strengthen new brand image and realign marketing strategy to strengthen dominant position in overseas markets

GOALS & FORECAST  4G smartphones and tablets will continue to be the main growth drivers in 2016  Continue to promote ‚Double +‛ business transformation strategy, enhance intelligence and internet application service ability, seize the opportunity to develop new strategic business Q & A THANK YOU

Disclaimer

The information contained herein should not be utilized for any legal purposes in regards to any investment decision or results. In particular, this document does not constitute any recommendation or invitation for subscribing for or sale and purchase of any securities of TCL Communication Technology Holdings Limited (the Company) hereby expressly disclaims any liability for any loss or damage resulting from or in connection with any reliance by any investor on the information contained herein.

A number of forward-looking statements may be made during this presentation. Forward-looking statements are any statements that are not historical facts. These forward-looking statements are based on the current expectations of the Company and there can be no assurance that such expectations will prove to be correct. Because forward-looking statements involve risks and uncertainties, the actual results could differ materially from these statements.