Formation of Joint Venture
Expand LTPS LCD Modules Production Scale to Seize Market Share
(13 June 2016, Hong Kong) - TCL Display Technology Holdings Limited ("TCL Display" or the "Group"; HKSE stock code: 334), the leading provider of small-to-medium-sized display modules in China, announced that the Group entered into the MOU with Wuhan CSOT, with regard to the formation of Joint Venture to engage in production of LTPS LCD module products. It is currently contemplated that the total investment amount of the Joint Venture will be RMB900 million, and that TCL Display will own not less than 50% of the registered capital of the Joint Venture, whereas Wuhan COST will own not more than 50% of the registered capital of the Joint Venture.
Wuhan COST was jointly established by Shenzhen CSOT (a subsidiary of TCL Corporation) and Hubei Science & Technology Investment Group Co., Ltd. (a company invested by the Wuhan City Government), with China Development Fund Co., Ltd. as one of the major shareholders. The production plant of the Joint Venture will be located at the Optics Valley Smart Industrial Park of the Wuhan East Lake High-tech Development Zone, next to Wuhan CSOT's LCD panel production plant. It is contemplated that the Joint Venture will operate 10 fully automated production lines of LTPS LCD module for mobile phones and with an average annual productivity of approximately 50 million laminated display modules for mobile phones. Installation of related production lines will be completed at the end of 2016 while mass production is expected to commence officially in October 2017.
The Group intends to use the HK$150 million net proceeds from the placing previously to form a Joint Venture with Wuhan CSOT, not only can the Group leverage on the resources and expertise of Wuhan CSOT in LTPS LCD panel production to manufacture better quality products, it also enables the Group to further expand its existing high-end LTPS LCD module production scale, in order to grasp the growing demand for LTPS LCD module products.
Mr. LI Jian, Chief Executive Officer of TCL Display, stated, "Along with the success of Shenzhen CSOT in large-sized display panel production, Wuhan CSOT will be able to maintain its leading position in product yield efficiency as well as production ramp-up in the industry. The establishment of Joint Venture between TCL Display and Wuhan CSOT not only benefits the Group from the efficiency brought by economies of scale, but also reduces expenses in areas including logistic and agent fees (accounting for approximately 5% of the LCD panel costs). The Joint Venture can also provide the Group with a new supplier to stabilise the upstream supply of LCD panels, allowing us to strengthen our leading position amongst display modules providers. We believe the Joint Venture will allow the Group to increase its market share and create higher returns to shareholders."
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About TCL Display Technology Holdings Limited (SEHK: 334)
Headquartered in China, TCL Display Technology Holdings Limited is one of the major providers of small-to-medium-sized display modules (<=10.1") in the region. TCL Display engaged primarily in the research and development, manufacturing, sales and distribution of LCD modules mainly for handheld mobile devices on an ODM basis. Smartphone LCD module products of TCL Display are welcomed by domestic and overseas manufacturers with sales volume ranking among the top.
For more information, please visit its website at www.tcldisplay.com.
About Wuhan China Star Optoelectronics Technology Company Limited
Wuhan CSOT is established on 20 May 2014. Wuhan CSOT is principally engaged in the production of the 6th generation LTPS (Oxide) LCD / AMOLED panels, providing high-end small and medium-sized display panels for mobile device products. In 2015, Wuhan CSOT has filed 1,423 patent applications and is one of the leading corporations in Hubei Province in terms of the number of invention patent filed. The company is jointly owned by Shenzhen CSOT which is a subsidiary of TCL Corporation, Hubei Science & Technology Investment Group Co., Ltd. and China Development Fund Co., Ltd.
Issued by Cornerstones Communications Ltd. on behalf of TCL Display Technology Holdings Limited. For further information, please contact:
Cornerstones Communications Limited
Sam Choi / Wendy Lau / Edward Siu
Tel: (852) 2903 9289 / 2903 9286 / 2903 9299
Email: tcl.display@cornerstonescom.com
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