1

2011/12 Interim Results

25 November 2011

2

Forward Looking Statement

This presentation and subsequent discussion

may contain certain forward-looking statements

with respect to the financial condition, results of

operations and businesses of Skyworth. These

forward-looking statements represent Skyworth’s

expectations or beliefs concerning future events

and involve known and unknown risks and

uncertainties which could cause actual results,

performance or events to differ materially from

those expressed or implied in such statements.

3 3

Core Margin Improvement and Continuous Top Line Growth

Six months ended 30 Sep (HK$ million) 1H2011/12 1H2010/11 Change

Turnover 13,074 11,148 17.3%

Gross profit 2,771 1,971 40.6%

Gross margin 21.2% 17.7% 3.5pp

Operating profit (EBIT) 702 556 26.3%

Operating margin (Excluded impairment loss $79m)

5.4% 6.0%

5.0% 5.0%

0.4pp 1.0pp

Impairment loss recognised in respect of AFS investments 79 - -

Profit for the period 485 413 17.4%

Net profit margin (Excluded impairment loss $79m)

3.7% 4.3%

3.7% 3.7%

- 0.6pp

Attributable to non-controlling interests 24 59 (59.3%)

Attributable to owners of the Company 461 354 30.2%

(HK$ cents)

Basic EPS Diluted EPS

17.70

17.18

13.96 13.40

26.8% 28.2%

Dividend per share 5.5 5.0 10.0%

Dividend payout (%) 31.6% 35.8% (4.2pp)

4

Cost Structure

• S&D expenses increased mainly on advertising and brand building, and bonus and salary rise as incentives for sales and marketing staff

• * G&A expenses included HK$24m expenses on granting share options as incentives to certain directors and senior management

Six months ended 30 Sep

(% to sales)

1H

2011/12

1H

2010/11 Change 2010/11

Selling and distribution 13.9% 11.8% 2.1pp 11.7%

General and administration 3.5%* 3.1% 0.4pp 2.9%

Total expense rate 17.4% 14.9% 2.5pp 14.6%

5 5

Healthy Inventory Level Highly Liquid Position

Six months ended 30 Sep

(HK$ million)

1H

2011/12

1H

2010/11 Change 2010/11 Change

Inventories

- Total

- Finished goods

4,541

2,858

2,903

1,801

56.4%

58.7%

2,657

1,630

70.9%

75.3%

Liquid bills receivable

- On hand

- Endorsed to suppliers*

- Discounted to banks#

5,954

779

-

3,918

3,412

1,007

52.0%

(77.2%)

100%

6,252

306

693

(4.8%)

154.6%

100%

6,733 8,337 (19.2%) 7,251 (7.1%)

Pledged bank deposits

- for banking facilities etc

- for forex hedging^

575

92

121

662

375.2%

(86.1%)

506

52

13.6%

76.9%

Cash and bank balances 2,354 2,150 9.5% 2,524 (6.7%)

Trade receivables 3,451 2,719 26.9% 2,051 68.3%

6

Net Cash (Liquid Bills on Hand treated as Cash Equivalents)

Six months ended 30 Sep

(HK$ million)

1H

2011/12

1H

2010/11 Change 2010/11 Change

Bank borrowings

Financial liabilities

- for discounted bills#

- for forex hedging^

-Other bank loans

- Current

- Long term

-

90

4,462

3,773

779

1,007

644

1,525

2,594

582

100%

(86.0%)

192.6%

45.5%

33.8%

693

50

3,612

3,577

778

100%

320%

23.5%

5.5%

0.1%

4,552 3,176 43.3% 4,355 4.5%

Trade payables

- On hand

- Under endorsed bills*

3,572

779

2,873

3,412

24.3%

(77.2%)

2,309

306

54.7%

154.6%

4,351 6,285 (30.8%) 2,615 66.4%

Bills payable 791 822 (3.8%) 917 (13.7%)

Total trade & bills payable 5,142 7,107 (27.6%) 3,532 45.6%

Net assets 7,692 6,303 22.0% 7,249 6.1%

7

Inventory Turnover Remained Optimal

Gearing Increased to Improve ROE

Sep 11 Sep 10 Change Mar 11

Return on equity 12.3% 11.5% 0.8pp 16.6%

Current ratio (times) 1.5 1.4 7.1% 1.6

AR turnover (days)

- excluded bills receivables

- with discounted bills

- without discounted bills

38

136

131

35

161 123

8.6%

(15.5%) 6.5%

27

134 103

Inventory Turnover (days) - Total - Raw materials - Finished goods

64

20

40

62 23 36

3.2%)

(13.0%) 11.1%

55 20 32

AP Turnover (included Bills Payables) (days)

- with endorsed bills

- without endorsed bills

77

67

107

66

(28.0%)

1.5%

66 57

Debt/Equity Ratio - Exclude discounted bills and foreign exchange hedging arrangements

59.4% 24.7% 34.7pp 51.1%

Book value per share (HK dollars) 2.88 2.40 20.0% 2.73

8

China TV

78.1% (77.7%)

Overseas TV

6.0% (4.6%)

HK$13.1bn

17.3%

Digital Set-top box

11.7% (15.6%)

LCD Module 1.4%(0.4%)

Revenue Breakdown by Products 1H2011/12 (1H2010/11)

Around 90% Revenue Generated in China Market under

Brand

* Others include property rental, precision molding,

refrigerators, washing machines and car electronics

Others 2.8%(1.7%) *

9 9

Gross Profit Margin by Products

Group

(20.4% in 2HFY11)

Sep 11 Sep 10 Change Mar 11

21.2% 17.7% 3.5pp 19.2%

China TV 21.7% 17.6% 4.1pp 19.6%

Overseas TV 6.2% 4.5% 1.7pp 10.5%

China set-top box 26.4% 20.0% 6.4pp 19.1%

ODM set-top box 14.8% 17.6% 2.8pp 15.5%

LCD module (small size) 13.9% 14.5% 0.6pp 14.1%

• China TV: Inventory level remained healthy, swift market upgrade from CCFL to LED

backlight, 3D and smart TV improved margin and ASP

• Digital STB: Blended GPM was 21.5%, ASP dropped while penetrating inland

in China; weak overseas economy delayed digitalisation timetable

• Overseas TV: Reversal of provision of HK$16m vs HK$26m in 1HFY11

• LCD module: For 3rd parties’ handsets and Skyworth TV

10

Segmental Profit by Business Segments

(HK$m)

1H2011/12

1H2010/11

Operational Profit

China TV HK$579m 82.6%

Overseas TV HK$1m (1HFY11 –HK$5m)

Digital settop box HK$191m 9%

11 11

8 Months 2011/12 TV Sales Volume

In Nov LED TV 67% and 3D TV 35% of Mix

China TV LED TV Targets over 150% Growth & 57% of Mix

(’000 units) 2011/12

(Apr - Nov)

2010/11

(Apr – Nov)

Change%

2011/12

Target

Achieved %

China TV comprises:

4,489 3,971 13% 7,000 64%

- LED TV - 3D LED TV - CCFL TV

- 3D CCFL TV

- CRT TV

1,708.4

651.7

1,683.9

432.9

12.0

814.7

0.0

3,049.8

0.0

106.8

110%

n/a

(45%)

n/a

(89%)

3,000

1,000

2,500

500

N/A

57%

65%

67%

87%

N/A

Overseas TV 1,508 940 60% 2,000 75%

Total 5,997 4,911 22% 9,000 67%

• China TV & Total TV Revenue 18% & 21%, respectively

• Total TV targets 13% growth, maintains No.1 LCD TV market share in China at 18%

• 2010/11 China TV 6.4m units (4.7m CCFL 1.6m LED); Overseas TV 1.6m units

12

China TV Revenue Mix

CCFL Upgrading to LED Backlight and 3D TV

GP Margin 1H2011/12 1H2010/11 2010/11

Flat Panel TV 21.7% 17.1% 19.8%

3D TV 29.2% N/A N/A

LED TV 21.6% 23.5% 25.5%

CCFLTV 12.9% 14.5% 16.7%

% of China TV Sales

3D (FPR) LED TV and CCFL TV were launched in Dec 2010

and Mar 2011 respectively.

13

Blended China TV ASP Remains Solid

Pricing Power with Premium Brand and Product Innovation

ASP 1H2011/12 2010/11 1H2010/11 2009/10

3D TV 5,221 N/A N/A N/A

LED LCD TV 3,123 4,341 4,478 8,063

CCFL LCD TV 2,151 2,574 2,680 2,949

In Oct 2011, 3D LED TV ASP HK$5,700; 3D CCFL TV ASP HK$3,200

14

Sophisticated Distribution Channels into Rural Markets China TV Revenue Breakdown 1H2011/12 (1H2010/11)

One layer from our 42 branches, 199 sales offices to 18,000 retail customers

60% of China TV revenue generated from 3rd to 5th tier cities and growing

Other electronic shops and direct sales support margin

Large scale chain stores in 1st tier cities support market shares and brand building

15 15

Overall (Volume) LCD TV (Volume)

Rank Brand % Rank Brand %

1 Skyworth 14.9% 1 Skyworth 16.4%

2 Hisense 14.3% 2 Hisense 15.5%

3 Changhong 13.6% 3 TCL 13.7%

4 TCL 12.9% 4 Konka 11.5%

5 Konka 11.6% 5 Changhong 11.2%

6 Haier 6.9% 6 Haier 7.4%

7 Sharp 4.9% 7 Sharp 5.5%

8 Samsung 4.0% 8 Sony 4.4%

9 Sony 3.9% 9 Samsung 4.1%

10 LG 2.8% 10 LG 3.2%

Overall (Revenue) LCD TV (Revenue)

1 Hisense 14.2% 1 Hisense 15.3%

2 Skyworth 13.3% 2 Skyworth 14.7%

3 Changhong 12.1% 3 TCL 11.7%

4 TCL 10.8% 4 Konka 9.8%

5 Konka 9.2% 5 Sharp 8.7%

6 Sharp 7.8% 6 Changhong 8.4%

7 Samsung 7.6% 7 Samsung 7.6%

8 Haier 6.5% 8 Haier 7.0%

9 Sony 6.0% 9 Sony 6.7%

10 LG 4.0% 10 LG 4.5%

Source: AVC Ltd. Sep 2011 (390 cities; 4,300 retail terminals)

China TV Market Shares Oct 2010 - Sep 2011 (Domestic LCD TV 76%)

16 16

China LCD TV Market Shares (Sep 2011 before National Day Holiday)

Top 6 Domestic Brands Secured 75% (73% in April 2011)

Source: AVC Ltd. Sep 2011 (390 cities; 4,300 retail terminals)

LCD TV (Volume) LCD TV (Revenue)

Brand Sep 2011

Sep 2010

Change (%pt)

Brand Sep 2011

Sep 2010

Change (%pt)

1 Skyworth 15.8% 14.2% 1.6% 1 Hisense 14.5% 14.2% 0.3%

2 TCL 15.1% 12.8% 2.3% 2 Skyworth 14.5% 12.5% 2.0%

3 Hisense 14.5% 14.8% (0.3%) 3 Sharp 12.2% 10.5% 1.7%

4 Changhong 11.7% 10.4% 1.3% 4 TCL 11.6% 11.1% 0.5%

5 Konka 10.0% 12.0% (2.0%) 5 Changhong 8.8% 7.8% 1.0%

6 Haier 7.9% 5.7% 2.2% 6 Konka 8.5% 9.9% (1.4%)

7 Sharp 7.1% 7.6% (0.5%) 7 Sony 7.4% 8.7% (1.3%)

8 Sony 5.0% 6.1% (1.1%) 8 Haier 7.0% 5.3% 1.7%

9 Samsung 3.2% 6.2% (3.0%) 9 Samsung 6.2% 9.8% (3.6%)

10 LG 2.4% 4.5% (2.1%) 10 LG 3.8% 5.8% (2.0%)

11 Toshiba 1.4% 0.6% 0.8% 11 Toshiba 1.5% 0.8% 0.7%

12 Sanyo 1.4% 1.0% 0.4% 12 Sanyo 0.9% 0.6% 0.3%

China 3D TV Market Shares (Volume)

Hisense 20.2% Skyworth 19.6% Changhong 16.5% Konka 10.7% Samsung 9.0%

17

Digital Set Top Box Gross Margin Improved

China Market Migrating to Digitalisation 2015

Convergence of Broadcast, Internet and Telecommunications

Volume growth: China Skyworth Brand -10% Overseas ODM 36% Overall 7%

China: No.1 market share 19% (nationwide 29m units in 2010, 30m in 2011E)* and best seller of high definition cable boxes

Overseas: Volume - Europe 52%, America 11%, Asia 32%; Top 5 China brands; Cable operators customers increased; More focus on South America and India.

* Source : GL Research, China

18

Overseas Revenue Geography Summary

Self-brand TV Entering Emerging Markets

Revenue included TV and set-top boxes

TV – Product mix migrated to LCD TV (CCFL and LED)

STB - High- end production for overseas cable operators

19

Differentiated Product Mix - ASP and Margin Premium

Cloud TV

Cinema/ FPR 3D TV

Smart Android 3D TV

LED backlight + Coocaa (content) + Health (Sports Games)

Full HD Built-in Settop box TV

20

Cloud TV

• The first 3D channel in China will start broadcasting on 1,

Jan 2012

• IPTV channel will launch 3D HD movie and sports programs

in Dec 2011

• By 2015, 100 HD and 10 3D channels will be ready

• In 3Q2011, 3D TV sales volume up 93% YoY, revenue up

55%, penetration reached 15%. *

21 Source: GfK China (100 cities retail terminals)

• Simplified the operating device. Storage and apps

management, and upgrade from the cloud.

Simply log into your family account, web browse, movies,

games, blog sharing, video chatting, electronic bills, books

and data etc are all on the cloud.

User friendly even to old people and children

Product Trend - Cloud TV & 3D TV

22

China Market LCD TV Size Mix

Size Sep

2011

Sep

2010

Change

20” – 23” 0.9% 0.7%

24” – 27” 6.6% 13.5%

30” – 33” 34.5% 31.7%

34” – 39” 5.1% 6.9%

40” – 43” 29.0% 24.9%

44” – 49” 16.4% 15.1%

50” – 53” 1.0% 1.5%

54” – 59” 4.8% 3.4%

Size SG LED B/L

PR LED B/L

PR CCFL B/L

SG PDP

32” - 3480 2374 -

37” 5420 4109 3256 -

42” 4630 5387 3595 3857

43” 6075 - - 5310

46” 7212 7112 - 8294

47” 6098 6870 4685 -

48” 7203 - - -

50” - - - 5917

55” 1225

2 10379 - 12597

3D TV Market Price (Oct 2011)

30- 40% Premium

Source: AVC Ltd. Sep 2011 & National Day Flat TV 2011 (210 cities; 1,850 retail terminals)

Cost Pressure Low

Panel Oversupply & Local Sourcing, Price Trending Down

Narrow Price Premium Speeding Up Penetration of LED TV

23 Source: AVC Ltd. National Day Flat TV 2011 (210 cities; 1,850 retail terminals)

USD LED backlight Panel Price

Premium of LED > CCFL TV 30% 20%

24 24 24

TV to

Countryside subsidy Swapping

Old for New subsidy

LCD TV Replacement Demand in China

360m units CRT TV Remained by end of 2011

90% > 8 years old

Growth sustains, given

25% (Urban 20% Rural 13%)

LCD TV penetration rate

(95m units installed) &

increasing affordability Urban CRT TV

220m (145% TV penetration) New TV

• Urbanisation

• Higher Penetration/ household

• Wedding 10m/yr, Property

Source: Skyworth, Chinese Statistics Yearbook (State Statistics Bureau)

Rural CRT TV

140 m (110% TV penetration)

Energy

Efficiency Standard

Public Housing 5m units built in 2011/12

25 25

Appendices

2010/11 TV Sales

Production Capacity and Strategic Alliances

2011 China National LCD TV Unit Growth & LED TV Penetration

Subsidy Policies Updates

LCD TV Replacement Stages in

Penetration of STB/ household in China

Global demand of STB

26 26

2010/11 TV Sales Volume China TV LED TV 25% vs 1.8% in 2009/10

China Flat Panel TV 5% YoY

Maintains No.1 market share at 19% in 2010

(’000 Units) 2010/11 (Apr - Mar)

2009/10 (Apr – Mar)

Change

China Flat Panel TV includes:

6,400 7,034 (9%)

- LED TV

- CCFL TV - CRT TV

1,559.7

4,704.2

136.3

106.4

5,883.2

1,045.0

1,366%

(20%)

(87%)

Overseas TV 1,596 1,972 (19%)

Total 7,996 9,006 (11%)

• Total China TV Revenue 1% negative growth YoY

27 27

Vertical Integration and Chain Management

Upstream supply chain management

Logistics investments in regional

logistic centers in Chengdu, Jiangxi and Nanjing

Strategic partnerships with LG Display and CMI

Investments in module production and LED chips packaging

Shenzhen 7m units (will be reallocated after 2011)

(NEW in 2013 - 15) Lishui, Nanjing 1 - 5m units

Guangzhou 2m units

Inner Mongolia 1m units

Production Capacity 2011/12

Downstream inventory management

28 28 28

2011E total TV reach 42m units, 5% YoY

2012E LCD TV sales 42m units, 10% YoY, 2015E will reach 53m units

Source: AVC Monitor and Forecast 2010

2004-2011中国液晶电视市场零售规模与变化

25 127

390

774

1175

2359

3362

3816

321%

405%

208%

98%

52%

101%

43%

14%

2004 2005 2006 2007 2008 2009 2010F 2011F

LCD（万台）

增长率(%)

(0000) units

Growth rate (%)

2011 China National LCD TV Unit Growth 14%

China LED TV Penetration Speeding Up

Hit 18mn units >65% Growth in 2011E

4%

8%

16%

25%

31%

38%

45%

50%

-

100

200

300

400

500

600

700

800

10Q1 10Q2 10Q3 10Q4 11Q1 11Q2 11Q3 11Q4

2010-2011年LED电视规模预测

LED LED渗透率

Source: AVC Monitor and Forecast 2010, RedTech Advisors

(10k units)

29

30 30 30

Subsidy Policies

Home Appliances To Countryside

The first phase implemented from 1 Dec 2007 in Shandong,

Henan, Sichuan and Tsingtao will expire on 30 Nov 2011 as

scheduled.

The second will expire on 30 November 2012, and the third will

expire on 31 January 2013 as scheduled.

In Apr- Aug 2011, 29% of Skyworth China TV revenue was under

the program but insignificant adverse impact is expected after

expiration

The new round of submission of designated products has just

started in Nov 2011, one year after the last time.

In Jan - Sep, 2011 all appliances sales volume reached 75m units,

RMB188bn, YoY up 42% and 62% respectively.

No. of models increased from 50 to 80 for one manufacturer since Nov

2010. Retail price cap at RMB$7,000, subsidy cap at RMB$455

31 31 31

Subsidy Policies

Energy Saving

Energy saving subsidy started in pilot city, Beijing till end of Feb

2012. Extra RMB300 on first grade TV (all LED TV), RMB200 for

second grade (energy saving CCFL TV)

Swapping Old For New

Up to 7 Mar 2011, TV sales 14m units, 36% of all 5 kinds appliances

sales volume total over 40m units and over RMB$152bn

1 Jun, 2010 – end of 2011, 19 additional provinces and cities (Hebei,

Shanxi, Liaoning, Dalian, Jilin, Heilongjiang, Anhui, Fujian, Xiamen,

Jiangxi, Henan, Hubei, Hunan, Chongqing, Sichuan, Guizhou, Shaanxi,

Gansu, Qinghai) are covered

10% of selling price as the subsidy with a maximum subsidy amount of

RMB400 remains unchanged

Pilot program launched in Jun 2009 in 9 cities and provinces: Beijing,

Shanghai, Tianjin, Jiangsu, Zhejiang, Shandong, Guangdong, Fuzhou

and Changsha

32

The Overlay of TV Upgrade and Replacement

(2010 – 2013 Boom) Urban begins 2nd Wave Upgrade (CCFL – LED)

while Rural begins 1st Wave of Upgrade (CRT – LCD)

Time required for Market Permeation of Color TV and Flat

TV in China from 20% to 100%

Color TVs

(Boom 1995 –

1999)

Urban

1986 1997

Rural

1996 2009E

Flat-screen

TVs

(Boom 2010E –

2013E)

Urban

2008 2012E

(CCFL)

2010 2018E

(LED)

Rural

2010 2022E

Source: Chinese Statistics Yearbook, Displaysearch, CICC Research

11 years

13 years

4 years

12 years

8 years

33 33

China Digital Set-top Box Penetration

Government Push & Unique Cable Broadcasting Model

IPTV Box 4.5m units in 2010, reach 12m units in 2015E

72100

230260

498534

580615

640672

710

130155

180205

174 184 200220 230 240

0

100

200

300

400

500

600

700

2009 2010 2011E 2012E 2013E 2014E 2015E

Digital Cable Households Cable Households TV Households

(m) Units

Source: iSupplyi, GL Research Jan 2011

34 34

Global Settop Box Huge Demand 2009 YoY 29%

74% Made in China, YoY 42%

Retail and Cable Operators markets Stable Demand in Next 5 Years

10.8

59.3

71.1

14

76.5

91.2

15.3

83.8

100

16

91.2

110

0

20

40

60

80

100

120

2008 2009 2010 2011E

DVB-C DVB-T (DTT & iDTV & Combo) DVB-S (DTH & FTA)

(m) Units/ Year

Source: iSupplyi, IMS Research, Skyworth Jan 2011

Vision

To create a globally prominent

brand of consumer electronic products

ir@skyworth.com.hk investor.skyworth.com