After the epidemic era, the rising cost of raw materials and shipping costs make many companies in 2021 to increase revenue but not increase profits. the evening of March 11, Hong Kong-listed TCL Electronics released 2021 financial results show that the company in 2021 to achieve operating business operating income of 74.85 billion Hong Kong dollars, a year-on-year growth of 46.9%; gross profit amounted to 12.53 billion Hong Kong dollars, a year-on-year growth of 29.7%. Affected by rising raw material prices, net attributable profit from operating business amounted to HK$1.18 billion, a year-on-year decline of 35.9%.

At the same time, the TV business volume fell and rose, the global smart screen sales volume of 23.58 million units, business income of 49.27 billion Hong Kong dollars, the domestic TV sales revenue amounted to 13.24 billion Hong Kong dollars.TCL global Internet business revenue amounted to 1.85 billion Hong Kong dollars, the domestic Internet business (Thunderbird Technology-related business) revenue amounted to 1.49 billion Hong Kong dollars.

TV sales of 23.58 million units and revenue of HK$49.27 billion

In 2021, the TCL Electronics business structure was reclassified into Display Business, Innovation Business and Internet Business. Among them, the display business includes large-size display business (i.e., smart screen business), small and medium-size display business and smart commercial display business.

For the display business, the revenue of large-size display business was HK$49.27 billion, an increase of 24.3% year-on-year; the global sales volume of smart screens was 23.58 million units, a slight decrease of 1.5% year-on-year; and the market share of the sales volume was increased by 0.8 percentage points year-on-year to 11.5%, which is stable in the top three in the world.

Among them, in 2021, the Chinese market TCL smart screen sales volume fell 24.4% year-on-year, but the average selling price recorded a 36.0% year-on-year increase, sales revenue amounted to 13.24 billion Hong Kong dollars, a year-on-year increase of 2.9%; gross margin of 18.3%, a year-on-year decline of 3.0 percentage points.

The average sales size of the company's Smart Screen increased by 2.5 inches from 49.9 inches in 2020 to 52.4 inches in 2021, with the share of TCL Smart Screen sales of 65 inches and above increasing by 8.3 percentage points to 27.0%.

Volume and price in the international market, TCL Smart Screen sales volume increased by 7.6% year-on-year, the average selling price increased by 25.1% year-on-year, sales revenue amounted to 36.03 billion Hong Kong dollars, a year-on-year increase of 34.7%; gross margin of 16.1%, basically flat year-on-year.

Among them, TCL Smart Screen sales in the European market improved 47.6% year-on-year; sales in the North American market declined 6.2% year-on-year; and sales in emerging markets such as Asia-Pacific increased 10.5% year-on-year.

For the small and medium-sized display business, the Group released a number of small and medium-sized display products such as TCL 20 series and 30 series 5G cell phones and tablet PCs during the year. 2021 saw the Group's small and medium-sized display business reach a total sales volume of 25.31 million units, a year-on-year increase of 7.5%, and revenues of HK$14.38 billion, a year-on-year increase of 29.5%.

In terms of intelligent commercial display business, the Group joined hands with Nail and Tencent meeting ecology in 2021, and launched the commercial interactive flat panel market. the scale of the Group's intelligent commercial display business continued to expand in 2021, and the total revenue increased by 18.3% year-on-year to HK$310 million.

TCL Group's innovative businesses include smart connectivity, smart home, full category marketing and photovoltaic business. 2021 revenue of HK$8.55 billion, an increase of 86.7% year-on-year. It is mainly due to the rapid expansion of the smart connectivity business and full category marketing business, whose revenues grew at a year-on-year rate of 211.4% and 70.7%, respectively.

Smart Connectivity launched smart connectivity products including smart glasses, routers, and smart wearable. TCL NXTWEAR Air and Thunderbird Smart Glasses Pioneer Edition were released, officially entering the AR/VR track. 2021 overall sales of the Group's smart connectivity business amounted to 5.25 million units, a year-on-year growth of 33.5%; revenue amounted to HK$1.56 billion, a significant increase of 34.2% year-on-year.

Revenue from the Group's smart home business reached HK$610 million in 2021, a year-on-year increase of 78.9%. Meanwhile, in order to further improve the smart IOT ecosystem and full-category layout, the Group leveraged its existing brand and channel advantages in the global market to distribute TCL's air, ice and washing products. 2021 distribution revenue from the Group's full-category marketing business amounted to HK$6.37 billion, representing a year-on-year growth of 70.7%.

Thunderbird's revenue was HK$1.49 billion

In recent years, TCL's Internet business has continued to develop, and the Group's global Internet business revenue in 2021 amounted to HK$1.85 billion, a year-on-year increase of 49.9%. Domestic Internet business (Thunderbird Technology-related business) revenue amounted to 1.49 billion Hong Kong dollars, a sharp increase of 63.7% year-on-year.

Among them, in 2021, Thunderbird Networks Technology Group membership business revenue grew 62.3% year-on-year, vertical and innovative business revenue grew 78.1% year-on-year, and Thunderbird Technology ARPU in 2021 reached HK$76.2, an increase of 43.4% year-on-year.

Thunderbird Technology has fully expanded its innovative businesses such as children's business and big screen education, while developing vertical content areas such as cloud games and short videos. Among them, the children's business grew 316.8% year-on-year, and the innovative business has gradually become a new engine of revenue growth for the company.

At the same time, the report shows that by the end of February 2022, the Group has further increased its stake in Thunderbird Networks Technology to 82.22%, and expects its contribution to the Group's revenue and profit to be further expanded in the future.

Revenue from overseas internet business amounted to HK$360 million, a year-on-year increase of 11.2%. 2021 saw the addition of platform operation share revenue from Google, completing the commercialization transformation of the company's content aggregation app, TCLChannel. As of the end of December 2021, TCL Channel has covered 58 countries in North America, Europe, Central and South America, and Asia Pacific, with a cumulative user base of 7.05 million.

In 2021, TCL Electronics' R&D expenses amounted to HK$2.48 billion, representing a year-on-year increase of 52.2%; the growth was mainly due to the Group's continued increase in R&D investment in cutting-edge technologies, such as Mini LED, AI, IoT, 5G, cloud services, big data, intelligent interactions, Android TV system, and the Internet.

Looking ahead to 2022, the Group will continue to develop high-end display technologies such as Mini LED, Quantum Dot and 8K, while focusing on intelligent interaction technologies and advancing the exploration of AI, Internet big data, 5G, intelligent manufacturing and other technological fields to continuously enhance the competitive strength of its core technologies.

In 2021, the gross profit margin of TCL Electronics was 16.7%, a year-on-year decline of 2.3 percentage points. Among them, the gross profit margin of the display business in 2021 was 16.1%, a year-on-year decline of 2.1 percentage points, mainly due to the panel in the first half of 2021 and other raw material prices rose more leading to the overall pressure on gross profit.

At the same time, the upstream panel prices in the second half of 2021 gradually decline, the company's gross margin in the third quarter of 2021 since the continuous rebound recovery. According to the financial report, the board of directors recommended an annual dividend of HK16.70 cents per share, with a full-year payout ratio of 35.0% of net attributable profit.