Dutch electronics giant Royal Philips Electronics plans to sell its LCD TV business in the Chinese market to Admiral Holdings Ltd, a wholly owned subsidiary of Hong Kong-listed TPV Technology Limited, according to an announcement issued by TPV on Thursday.

The two companies reached a letter of intention on the same day, under which TPV will be allowed to use the Philips brand for its TV products for 5 years. At the same time, the sales and distribution business of Philips TV in China including both its inventories and employees will be transferred to TPV, the First Financial Daily reports.

The announcement did not reveal the specific price and date of the deal. It only emphasized that the letter of intention having no legal binding force could be terminated at any time before the contract signed.

Philips has sold out its TV business in the European market and in North America. Its market share in China is also very small, ranking 11th in the first half of 2010. Some 20,000 Philips TV sets were sold per month in the country, accounting for only 1.7 percent of the total, according to figures from the marketing consultant company AVC.

Furthermore, its performances in other Asian countries are even worse.

TPV Technology is one of the largest OEM (Original Equipment Manufacturing) manufacturers of LCD TVs, which produced 9.5 million TV sets in 2009. And it expected its output in 2010 will reach 14 or 15 million, becoming the world’s biggest OEM manufacturer of LCD TVs.

However, TPV’s own brand didn’t perform well in the Chinese market and failed to enter in the top 20 brands in the first quarter of 2010. Industry analysts think it is hard to predict whether the Philips brand could help TPV drive the growth of its own brand.

In September 2005, Philips sold part of its monitor and entry-level flat screen TV business to TPV.