On December 22, TCL Group issued an announcement in response to the Shenzhen Stock Exchange’s inquiry letter to respond to external doubts about the asset restructuring plan.
The trademark is still owned by the group
Regarding the question of whether to retain the company’s brand, TCL Group stated in its reply to the Shenzhen Stock Exchange’s inquiry letter that after the completion of this transaction, the TCL trademark will still be owned by the group. are owned by TCL Group, and TCL Group can still use these trademarks. And because the TCL trademark is mainly used in the terminal business products sold this time; after the completion of this transaction, TCL Holdings is obliged to actively maintain and enhance the image of the TCL trademark and is also obligated to invest in maintenance, promotion and other related expenses for the TCL trademark. Therefore, the consideration for this transaction does not include such trademark use arrangements.
According to this trademark use arrangement plan, TCL Group will not invest additional expenses in the maintenance, promotion and management of TCL trademarks related to the use of the underlying assets. During the period when TCL Holdings was using the TCL trademark, TCL Holdings’ investment in advertising, integrated communication, experiential marketing, maintenance, promotion and management of the TCL trademark had been at least consistently no lower than what TCL Group had invested in the TCL trademark before the completion of this transaction. The level of input costs for the matter.
It is worth mentioning that there have been voices questioning that the reorganized TCL will transform into a technology group, and the influence of the original brand is mainly in the home appliance industry, so retaining the original brand is of little significance.
In this regard, TCL Chairman Li Dongsheng said, "In order to solve this matter, we have specially set up a new concept, that is, ***has a trademark. TCL Holdings can continue to use the 'TCL' trade name, and the group We will retain the ownership of the trademark, and at the same time, the trademark rights will also remain with TCL Group. At the same time, retaining 'TCL' will be helpful to the company's future business. We will not only be limited to the panel industry, but the company will also consider diversification in related industry chains in the future. Through mergers and acquisitions, we will develop new material platforms outside of Huaxing; we will also seek opportunities in the field of high-end equipment.”
As for the question of whether the valuation is low, TCL Group stated in its reply to the announcement that TCL Industrial and The assessed value of all shareholders' equity of Gechuang Dongzhi is negative. Among them, the assessed value of TCL Industrial’s net assets is -798 million yuan. Compared with the book value of -1.17 billion yuan, the assessed value has increased by 370 million yuan. This is because the assets and liabilities included in the evaluation scope of TCL Industrial this time are part of the effective asset divestitures carried out by the listed company based on the actual situation of the company's business operations after the reorganization (including the interests of associated companies such as Fantasia Holdings, Geely Automobile, Tencent, Alibaba, etc. The remaining assets and liabilities after the strategic investment of stocks and Zhonggang Capital, which has Hong Kong securities trading, asset management, etc.); after the completion of the asset transaction, the counterparty of the transaction took over the relevant liabilities of TCL Industrial while taking over the assets, and paid for them. Some liabilities have guaranteed obligations. Because the amount of the liability is greater than the fair value of the asset, the appraised value is negative.
The book value and appraised value of Gechuang Dongzhi are both -21,800 yuan. The company explained this as because the original shareholders did not contribute capital to Gechuang Dongzhi on the base date, and Gechuang Dongzhi's liabilities were greater than its assets.
The chairman's additional increase in holdings shows confidence
Previously, at a media exchange meeting on major asset restructuring held at TCL headquarters, Chairman Li Dongsheng said on the issue of TCL's restructuring, "We have Decisions are made based on confidence in doing both aspects well.”
Based on confidence in the development of the company’s core business and recognition of the company’s long-term investment value, TCL announced on December 17, 2018. The announcement stated that Li Dongsheng planned to increase his holdings of the company's shares with his own funds within five trading days from the date of the announcement, with a target amount of 15 million yuan. Afterwards, it was announced on December 20 that Li Dongsheng planned to increase his holdings by an additional 25 million yuan with his own funds.
So far, Li Dongsheng has completed his first shareholding increase plan, increasing his holdings of 6.6 million shares of the company's stocks, totaling 16.082 million yuan.
After the shareholding increase is completed, Li Dongsheng holds 646 million shares of the company, accounting for 4.76% of the total share capital.
Public information shows that the industries to be divested in this TCL restructuring are mainly smart terminals and related supporting businesses, including TCL Industrial, Huizhou Home Appliances and Gechuang Dongzhi. The industries in which the above-mentioned assets are located are characterized by fierce competition, high sales revenue, but weak profitability. The net profit margins attributable to shareholders of TCL Group's TV business in the last year and period were only 2.23% and 2.66% respectively; in addition, TCL's communications business is still at a loss, and the net profit attributable to shareholders in the last year and period is only 2.23% and 2.66% respectively. They were -2.041 billion yuan and -285 million yuan respectively, facing greater operating risks.
After the reorganization, TCL Group will focus on CSOT’s semiconductor display business. CSOT's sales have always been among the top in the world. Currently, CSOT has a sales advantage in the field of large-size LCD panels with only two full-scale 8.5-generation lines. In the future, as CSOT's production capacity increases, The company's operating income will grow accordingly.
In addition, with the divestment of some liabilities, TCL's main financial indicators have improved. Data shows that the company's asset-liability ratio will drop from 66.22% to 61.52%; the net sales interest rate will increase from 3.17% to 10.50%. The company's earnings per share (0.3614 yuan/share) in 2017 will increase by 0.1436 yuan/share.
This article is from Securities Daily
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