Investment Rating - The report maintains a "BUY" rating for BOE Varitronix, with a target price of HK$9.9, indicating a potential upside of 121% from the current price of HK$4.47 [12][11][5]. Core Insights - The company is expected to report a 15% year-on-year revenue growth in 1H24, driven by high-end displays, overseas client orders, and the ramp-up of the Chengdu plant. However, net profit is projected to decline by 16% year-on-year [2][11]. - For 2H24, revenue and net profit are anticipated to improve due to order seasonality, a better product mix, and rising utilization rates [2][11]. - The report highlights BOE Varitronix's leadership in the global auto display market, with expectations for ASP and margin recovery in the second half of the year [2][11]. Financial Summary - Revenue is projected to grow from HK$10,760 million in 2023 to HK$12,873 million in 2024, and further to HK$15,561 million in 2025, reflecting a compound annual growth rate [14]. - Net profit is expected to recover from HK$401 million in 2024 to HK$519 million in 2025, and HK$623 million in 2026 [14]. - The operating margin is forecasted to improve slightly from 3.9% in 2024 to 4.0% in 2025 and 4.2% in 2026 [14]. Market Position and Strategy - BOE Varitronix remains the global number one auto display supplier in terms of total and medium- to large-size shipments as of 2Q24 [2]. - The company is focusing on expanding its overseas market presence, with a target for overseas sales to reach 50% by FY26E [2][11]. - The Chengdu plant is noted as the world's largest and most advanced auto display module facility, currently operating at full capacity, which is expected to enhance profitability in 2H24 [2][11].

Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 9.90, reflecting a potential upside of 121.6% from the current price of HKD 4.47 [2][9][10]. Core Insights - The company is expected to see a revenue increase of 15% year-on-year in 1H24, driven by high-end display orders and a surge in overseas customer demand, despite a projected net profit decline of 16% [2][3]. - For 2H24, improvements in revenue and net profit are anticipated due to seasonal orders, better product mix, and increased utilization rates [2][3]. - The automotive display market share is growing, with the company remaining the largest global supplier in this segment [2][3]. - The management has reiterated its guidance for overseas sales to reach 50% of total sales by FY26, emphasizing the importance of high-end automotive display products [2][3]. Financial Summary - Revenue is projected to grow from HKD 10,760 million in FY23 to HKD 12,873 million in FY24, representing a year-on-year growth rate of 19.6% [3][12]. - Net profit is expected to decline from HKD 475.3 million in FY23 to HKD 400.9 million in FY24, with a year-on-year decrease of 15.7% [3][12]. - The company’s earnings per share (EPS) is forecasted to decrease from HKD 0.60 in FY23 to HKD 0.51 in FY24 [3][12]. Valuation Metrics - The new target price is based on a price-to-earnings (P/E) ratio of 15x for FY25E, compared to the previous P/E of 15x for FY24E [2][9]. - The company is currently trading at P/E ratios of 8.8x for FY24E and 6.8x for FY25E, indicating attractive valuation levels [2][9]. - The price-to-book (P/B) ratio is projected to remain at 0.4 for FY24E and FY25E, suggesting a solid valuation relative to its book value [3][14].

Investment Rating - The report maintains a BUY rating for BOE Varitronix with a target price of HK$10.94, indicating a potential upside of 129.3% from the current price of HK$4.77 [4][9]. Core Insights - Management expects larger and high-end displays to drive sales growth, with a guidance of over 8% year-on-year sales growth, outperforming the industry average of 4% [2][9]. - High-end products are projected to achieve over 200% year-on-year growth, contributing significantly to overall sales in FY24E [2]. - The Chengdu plant is operating at full capacity, producing over 15 million pieces per month, with expectations for a recovery in utilization rates in the second half of FY24E [2][9]. - The net profit margin (NPM) is anticipated to recover in the second half of FY24E due to improved operational efficiency and ASP increases [2][9]. Financial Summary - Revenue is projected to grow from HK$10,760 million in FY23A to HK$11,699 million in FY24E, reflecting an 8.7% year-on-year increase [3][11]. - Net profit is expected to recover from HK$475.3 million in FY23A to HK$573.5 million in FY24E, representing a 20.7% year-on-year growth [3][11]. - The company is trading at a P/E ratio of 6.5x for FY24E, which is below the historical average, suggesting an attractive valuation [9][13]. Operational Highlights - The management highlighted that overseas demand for high-end products is rapidly increasing, contributing to the positive outlook for large displays and high-end products [2]. - The system business is expected to grow over 100% year-on-year in FY24E, with sales contributions projected to exceed 5% in FY24 and 5-10% in FY25E [2]. - The report indicates that the automotive display segment is also showing resilience, with expected growth in both domestic and overseas markets [8].

Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 10.94, based on a FY24E P/E ratio of 15 times [2][7]. Core Insights - The company is well-positioned to benefit from the ongoing upgrade trends in large and high-end displays, with management projecting an 8% year-over-year sales growth, outperforming the industry average of 4% [2][3]. - The management anticipates over 200% year-over-year growth in high-end products (oxide/LTPS/OLED) contributing significantly to FY24E sales [2][3]. - The company’s system business is expected to achieve over 100% year-over-year growth in FY24E, with sales contributions exceeding 5% in FY24 and 5-10% in FY25 [2][3]. Financial Summary - Revenue is projected to grow from HKD 10,760 million in FY23A to HKD 11,699 million in FY24E, reflecting an 8.7% year-over-year increase [3][9]. - Net profit is expected to recover to HKD 573.5 million in FY24E, up from HKD 475.3 million in FY23A, indicating a 20.7% year-over-year growth [3][9]. - The company’s EBITDA is forecasted to increase from HKD 771 million in FY23A to HKD 865.7 million in FY24E, representing a 12.3% growth [3][9]. Operational Updates - The Chengdu factory is currently operating at full capacity, producing over 15 million units per month, with expectations for UTR to stabilize in the second half of FY24E [2][3]. - Management noted that the factory has not incurred new depreciation costs and is transitioning to smaller and urgent orders rather than experiencing a demand slowdown [2][3]. Market Position - The company is experiencing rapid growth in overseas demand for high-end products, which is expected to drive ASP increases and NPM recovery [2][3]. - The report highlights the company's leadership in automotive displays and its positive outlook on order wins and overseas expansion [7].

京东方精电（710） 更新报告 买入 2024年05月13日 车载显示屏龙头，保持高端市场竞争优势 陈晓霞  2023 年业绩低于预期：京东方精电是京东方旗下唯一车载显示模 组和系统运营平台，为客户提供车载显示总成及智慧车载显示系 + 852-25321956 统。2023 收入 107.6 亿港元，增加 0.4%；净利润 4.75 亿港元，下 降 18%，低于市场预期。业绩压力主要来自二季度产品价格承压、 xx.chen@firstshanghai.com.hk 人民币贬值、库存减值以及成都工厂投产爬坡带来的成本压力。 主要资料  保持行业领先地位：根据 Omidia 数据，1）车载显示模组总出货 行业 汽车配件 量、2）中大尺寸（8 英寸及以上）出货量，3）氧化物及 LTPS 出货 量，未来 3 年全球复合增长率分别为 4.4%、8.35%和 18.16%。京东 股价 6.13港元 方精电在全球车显示屏市场交付数量、面积均维持市场份额第一。 目标价 9.06港元 在超大尺寸汽车显示屏、曲面显示器及显示系统、PHUD、增强型动 (+47.8%) 态实景抬头显示器（AR-HUD）、CMS、座椅扶手屏幕、侧 ...

Financial Performance - Revenue for 2023 reached HKD 10.76 billion, a 0.4% increase compared to HKD 10.72 billion in 2022[7][9] - EBITDA for 2023 was HKD 771 million, an 8% decrease from HKD 841 million in 2022[7][9] - Net profit attributable to shareholders in 2023 was HKD 475.3 million, an 18% decline from HKD 582.5 million in 2022[7][9] - Cash and term deposits balance as of December 31, 2023, stood at HKD 3.501 billion, up from HKD 2.881 billion at the end of 2022[7][9] - Bank loans decreased by 7% to HKD 620 million in 2023, with HKD 383 million being long-term loans primarily for capital expenditures[9] - Net profit attributable to shareholders decreased by HKD 107.2 million, down 18% year-on-year, primarily due to price adjustments and additional costs from new production facilities[12] - EBITDA decreased by 8% to HKD 771 million, with an EBITDA margin of 7.2%, influenced by depreciation and higher marginal costs[12] - Revenue for the fiscal year ending December 31, 2023, increased by 0.4% to HKD 10,760,000,000, driven by increased production capacity at the new facility in Chengdu and higher sales of TFT and touchscreen display modules[38] - Operating profit for 2023 decreased by 15% to HKD 570,000,000, primarily due to price adjustments, additional costs from the new facility, and higher marginal costs during the optimization phase[39] - Net profit attributable to shareholders decreased to HKD 475,000,000 in 2023 from HKD 582,000,000 in 2022, with basic earnings per share dropping to 60.4 HK cents from 78.4 HK cents[41] - The company proposed a final dividend of 19.0 HK cents per share, totaling HKD 150,000,000 for the year[41] - Cash and cash equivalents increased to HKD 3,501,000,000 in 2023 from HKD 2,819,000,000 in 2022, with significant holdings in RMB and USD[44][45] - The company's debt-to-equity ratio decreased to 14.1% in 2023 from 16.2% in 2022, reflecting efforts to reduce operational risks[42] - Cash flow from operating activities rose to HKD 1,307,000,000 in 2023 from HKD 834,000,000 in 2022, driven by optimized working capital management[43] - Net cash used in investing activities was HKD 224,000,000 in 2023, down from HKD 1,170,000,000 in 2022, with HKD 502,000,000 spent on property, plant, and equipment[43] - The company completed the use of HKD 798,800,000 raised from share placements and shareholder subscriptions, allocated to factory construction, equipment procurement, and working capital[46][47] - The company's bank loans decreased to HKD 620,000,000 in 2023 from HKD 667,000,000 in 2022, with a mix of fixed and floating interest rates[48] - Bank loans of HKD 171,044,000 were secured by land, buildings, plant, machinery, and equipment of a subsidiary, with the pledge agreement expected to take effect in 2024 after registration[49] - The group's outstanding capital commitments not provided in the financial statements amounted to HKD 346,000,000 as of December 31, 2023, down from HKD 905,000,000 in 2022[50] - Total assets increased to HKD 10,034,000,000 in 2023, up from HKD 8,283,000,000 in 2022, driven by new factory completion and higher cash and fixed deposits[40] - Inventory rose by 24% to HKD 1,947,000,000 in 2023, compared to HKD 1,568,000,000 in 2022, due to increased production capacity from the new factory[40] - The Board of Directors proposed a final dividend of 19.0 HK cents per share for 2023, with a total annual dividend of 19.0 HK cents per share, down from 23.0 HK cents in 2022[184] - The company maintains a stable dividend policy with a payout ratio of no less than 30%, subject to review and based on profits, cash flow, financial condition, and capital requirements[184] Market Position and Business Strategy - The company maintains a leading global market share in automotive TFT display products and medium-to-large display modules[3] - The company celebrated its 45th anniversary, highlighting a history of innovation and growth in the automotive and industrial display sectors[3] - The company aims to become a leading provider of automotive smart cockpit display assembly solutions[3] - The company is part of the BOE Group, focusing on automotive and industrial display solutions, and is the only automotive display and system operation platform within the group[3] - The company's vision includes expanding its impact and delivering more value to customers and communities[3] - Group revenue growth driven by increased TFT and touch panel display module production capacity, with TFT and touch panel display modules accounting for 91% of total revenue[12] - Automotive display business revenue increased by 1% to HKD 9.71 billion, accounting for 90% of total group revenue[17] - Industrial display business revenue decreased by 8% to HKD 1.05 billion, representing 10% of total group revenue[18] - New production facility in Chengdu increased capacity by over five times in 2023, enhancing production efficiency and supply capabilities[18] - Global automotive display module market expected to grow at a CAGR of 4.40% for total shipments, 8.35% for large and medium-sized displays, and 18.16% for oxide and LTPS technologies over the next three years[19] - The global automotive display system market is expected to reach nearly HKD 100 billion in China by 2026, with the global smart cockpit and smart mobility market projected to reach several hundred billion HKD by the same year[20] - The company maintained its leading market share in global automotive display deliveries, particularly for displays of 8 inches and larger, and received multiple awards from major automakers[20] - China's new energy vehicle (NEV) sales are expected to grow by approximately 21% in 2024, with NEV sales accounting for about 33% of total vehicle sales in 2023, up from 2022[20] - China's NEV sales accounted for approximately 60% of the global market share in 2023, driven by the world's largest NEV charging network[20] - The company anticipates significant growth opportunities in Europe due to the EU's ban on new petrol and diesel cars from 2035, which will drive demand for NEVs and related products[21] - The company's "HERO" project focuses on developing smart cockpit applications for health, entertainment, leisure, and office scenarios, targeting the evolving "third space" concept in vehicles[21] - The company expects China's leading NEV manufacturers to increase their market share globally, with the company already holding a significant portion of the Chinese NEV market[22] - The company is developing innovative products such as large-sized automotive displays, curved displays, and advanced systems like OLED and PHUD (Panoramic Head-Up Display) to enhance competitiveness[22] - The company's PHUD technology is expected to see significant growth, with global shipments projected to reach 500,000 units by 2025 and 7 million units by 2030[22] - The company is expanding its display module applications to various vehicle types, including agricultural vehicles, trucks, and other motor vehicles, to capture new business opportunities[23] - The company continues to develop new technologies to meet market demands, focusing on multi-screen, large-size, high-quality displays, and improved HMI for automotive manufacturers[24] - The company is expanding its automotive system business and emerging businesses like CMS, PHUD, AR-HUD, seat armrest screens, side door screens, rear flip screens, and co-pilot screens[24] - The company is collaborating with leading new energy vehicle manufacturers in China and expanding its system display solutions business overseas[24] - The company is optimizing supply chain management by shifting to lower-cost IC chip suppliers and implementing dual sourcing to maintain quality and cost efficiency[24] - The new factory, operational since 2022, is in the early production phase with higher costs and is focusing on increasing production, improving equipment utilization, enhancing product quality, and reducing production losses[24] - The company aims to improve supply chain management, strengthen product innovation, optimize production efficiency, and enhance product quality in 2024[25] - The company has secured orders for new energy vehicles and is promoting TFT display products to industrial instrument and high-end home appliance customers to expand its industrial display business[26] - The company's products are installed in various high-profile vehicles, including Geely, Aston Martin, and NIO, with advanced display technologies like AMOLED and Mini LED[27] - The company maintains a leading market share as a comprehensive automotive smart cockpit display solution provider, reaching major OEMs and new energy vehicle manufacturers[28] - The company adheres to international quality standards like ISO 9001 and IATF 16949 to meet the demands of both domestic and overseas customers[28] - The company has established competitive advantages in high-quality products, stable supply, cost-effective offerings, and excellent after-sales service[29] - The company is focusing on expanding its automotive display business, maintaining its leading position, and implementing a "three-step development strategy" to explore automotive display systems and smart cockpit solutions[29] - The company launched the "HERO" project in 2023, aiming to create intelligent cockpit experiences in health, entertainment, relaxation, and office scenarios[29] - The company has set ESG goals for 2025, including reducing carbon emissions, energy and water consumption, and hazardous waste[29] - The company has globally launched a 14.6-inch QHD Oxide display product, which is already in mass production, and showcased a 45-inch 9K ultra-large Oxide cockpit screen at CES 2024[30] - The company is developing Tandem OLED technology, which combines high efficiency and long lifespan, and has multiple car-mounted f-OLED displays in mass production[30] - The company has successfully developed a ~5K ultra-high-definition naked-eye 3D display and integrated it into driver monitoring systems for immersive 3D interfaces[30] - The company is advancing ADS-Pro technology, incorporating Mini LED, BD Cell, high refresh rates, high resolution, and wide color gamut for superior display performance[30] - The company has secured multiple projects with renowned automakers for BD Cell and Mini LED displays, demonstrating customer recognition[30] - The company is researching real-time 3D reverse imaging systems with zero latency and exploring multi-viewpoint 3D displays to eliminate eye-tracking systems[30] - The company completed the development of a smart surface material that passed vehicle-grade reliability testing and is now focusing on developing more surface materials with Mini-LED backlighting[31] - The switchable privacy display (POD) technology received positive feedback from Tier-1 clients in 2023, with further improvements planned for 2024, targeting completion in Q4 2024[32] - The company developed a pressure-sensitive touch technology to reduce false touches in outdoor and marine applications, particularly suitable for motorcycle dashboards and marine use[33] - A new knob-touch semi-system for cost-effective solutions like motorcycle dashboards and home appliances completed reliability testing in Q2 2023 and entered the sampling phase in Q4 2023[34] - The company completed the design of a next-generation TFT solution for AR-HUD systems and developed LCoS-based AR-HUD technology, filing 34 patents[35] - The company achieved a milestone by becoming the first in China to pass the GB15084 national standard test for a CMS system, obtaining 3C certification[36] - The company secured a core client for a 17.3-inch rear entertainment ceiling screen and completed the development of a high-performance cockpit domain controller based on the SiEngine platform[36] - The company has a strong presence in the smart cockpit industry, showcasing leading smart cockpit display technology and innovative "HERO" cockpit interactive application scenarios[177] - The company has received multiple awards, including the Harman Best Technology Award, Schneider 2023 Quality Supplier Award, and Zero Run Auto Global Partner Conference Innovation Award[178] - BOE Varitronix Limited participated in various exhibitions and forums, such as CES and the International Automotive Display Summit, promoting new AR-HUD solutions and smart cockpit technologies[179] - The company has strategic collaborations with major automotive companies like Great Wall Motors, Changan Qiyuan, and BYD, focusing on smart cockpit and display innovations[180] ESG and Sustainability - The company has set ESG goals for 2025, including reducing carbon emissions, energy and water consumption, and hazardous waste[29] - The company has committed to achieving carbon neutrality by 2050, with a specific reduction of 2,812.7014 tCO2e in 2023[65] - The company updated and optimized its environmental and social indicator reporting system in 2023 to ensure accurate data collection and reporting[62] - The company conducted a greenhouse gas emissions inventory within its operational control scope and explored pathways to achieve carbon neutrality[65] - The company implemented energy-saving projects and utilized green energy, including the construction of a rooftop photovoltaic power generation project[65] - The company's ESG report for 2023 complies with the "importance," "quantification," "balance," and "consistency" reporting principles[63] - The company's Board of Directors oversees ESG strategy and reporting, with regular reviews of ESG performance and targets[64] - The company held a new regulation training session in June 2023, covering auditor training, new standards, and operational-level consultations[64] - The company's ESG governance and management mechanisms are integrated into its operations to achieve long-term environmental, social, and corporate value[64] - The company's ESG report covers operations in China (including Heyuan and Chengdu) and Hong Kong, which are its core operational locations[59] - The company's Board of Directors conducts at least two ESG communication meetings annually to review and approve ESG strategies and performance[60] - The company has established an ESG risk management team composed of senior management and the finance department, which meets regularly to ensure proper management of ESG risks[66] - The company maintains regular communication with stakeholders through various channels to understand the impact of its activities and their demands[67] - Key stakeholder communication channels include shareholder meetings, annual reports, direct communication, and investor conferences for shareholders/investors, while customers are engaged through direct communication, site visits, and the company website[68] - The company has identified highly important ESG issues, including recruitment and promotion, health and safety, and greenhouse gas emissions, among others[70] - The company emphasizes environmental protection, with emissions and waste treatment policies fully compliant with local regulations and ISO 14001 certification obtained since 2005[75] - The company generated 881.35 units of non-hazardous solid waste, with a recycling rate of 81.91%[76] - The company has a robust risk management and internal control framework based on the "three lines of defense" model, overseen by the board of directors and the audit committee[72] - The company maintains a zero-tolerance policy towards corruption, with strict compliance with anti-corruption laws and regular employee training on ethical behavior[73] - The company ensures all related-party transactions are conducted fairly and transparently, with strict internal controls and regular monitoring to safeguard shareholder interests[74] - The Chengdu factory, covering 151,000 square meters, began mass production in October 2022 and completed environmental protection acceptance in February 2023[77] - The Chengdu factory achieved ISO14001:2015 environmental management system certification in June 2023[77] - Total greenhouse gas emissions at the Heyuan factory decreased from 60,154.81 tons in 2022 to 54,726.43 tons in 2023, a reduction of 9%[78] - Direct CO2 equivalent emissions at the Chengdu factory were 34,652.42 tons in 2023, compared to no data available for 2022[78] - Non-methane total hydrocarbon emissions at the Heyuan factory decreased by 5% from 1.115 tons in 2022 to 1.060 tons in 2023[79] - The Chengdu factory's waste gas collection rate exceeds 90%, with organic waste gas emissions being less than 10% of Sichuan's local emission limits[79] - The Heyuan factory has been using bio-alcohol oil as fuel since December 2018, effectively reducing emissions[79] - Wastewater discharge at the Heyuan factory decreased from 863,197 tons in 2022 to 694,554 tons in 2023, a reduction of 19.5%[78] - Hazardous solid waste at the Chengdu factory was 48.48 tons in 2023, compared to no data available for 2022[78] - The Chengdu factory's natural gas vacuum hot water boiler uses low-nitrogen combustion technology, keeping pollutant concentrations below Chengdu's emission limits[79] - Direct CO2 emissions (Scope 1) from the Heyuan plant increased by 343.95 tons in 2023, reaching 448.75 tons, a 374.66% increase per unit of product compared to 2022[80] - Indirect CO2 emissions (Scope 2) from purchased electricity at the Heyuan plant amounted to 54,277.68 tons in 2023[80] - Total greenhouse gas emissions (Scope 1 and 2) for the Heyuan plant in 2023 were approximately 54,726.43 tons[80] - The Chengdu plant's total greenhouse gas emissions (Scope 1 and 2) in 2023 were approximately 18,483.92 tons, with Scope 1 emissions at 347.64 tons and Scope 2 emissions at 18,136.28 tons[80] - The company plans to purchase 6 million kWh of green electricity in 2024 to promote low-carbon energy[81] - Wastewater discharge at the Heyuan plant decreased by 19.5% in 2023 compared to 2022, totaling approximately 168,600 tons[83] - The Heyuan plant's wastewater treatment facility has a maximum daily treatment capacity of 4,000 m³, with current daily treatment at approximately 2,000 m³[83] - The Chengdu plant does not have an industrial wastewater treatment station as it does not involve toxic or harmful wastewater discharge[83] - The company is implementing ISO 50001 energy management system construction and certification to promote energy conservation and carbon reduction[

Investment Rating - The report maintains a "Buy" rating for BOE Technology Group Co., Ltd. (00710.HK) [2][7] Core Views - The company reported a revenue of HKD 10.8 billion for 2023, a year-on-year increase of 0.4%, while the net profit attributable to shareholders was HKD 480 million, a decrease of 18% [2] - The second half of 2023 saw a revenue of HKD 5.6 billion, down 6% year-on-year, with a net profit of HKD 270 million, also down 18% [2] - The automotive display segment remains a stronghold, with revenue of HKD 9.7 billion, while the industrial display segment generated HKD 1.1 billion, accounting for 90% and 10% of total revenue respectively [2] - The company is expected to transition into a Tier 1 supplier in the automotive sector, with a projected market size of nearly HKD 100 billion by 2026 [2] Financial Summary - Revenue for 2024 is projected to be HKD 11.7 billion, with a growth rate of 9.02%, and net profit is expected to reach HKD 536 million, reflecting a growth rate of 12.69% [5] - The company's P/E ratio is forecasted to be 8, 7, and 6 times for 2024, 2025, and 2026 respectively [2][5] - The return on equity (ROE) is expected to improve gradually from 10.92% in 2023 to 11.99% in 2026 [5][6]

Core Viewpoint - BOE Technology Group Co., Ltd. reported a slight increase in revenue for the fiscal year 2023, but a significant decrease in net profit attributable to shareholders, primarily due to price adjustments and increased operational costs [1] Financial Performance - Revenue for the year reached HKD 10.76 billion, representing a year-on-year growth of 0.35% [1] - Net profit attributable to shareholders was HKD 475 million, a decrease of 18.4% compared to the previous year [1] - Basic earnings per share stood at HKD 0.604 [1] - The final dividend declared was HKD 0.19 per share [1] Cost Factors - The decline in net profit was mainly attributed to price adjustments and additional costs associated with new production facilities in Chengdu, China, including personnel costs, property expenses, and depreciation of plant and equipment [1] - The overall marginal cost of products remained high in 2023 due to ongoing capacity enhancements and optimization efforts [1]

Financial Performance - The company's revenue for the year 2023 was HKD 10,760 million, a slight increase of 0.4% compared to HKD 10,722 million in 2022[3]. - EBITDA for 2023 decreased by 8% to HKD 771 million, with an EBITDA margin of approximately 7.2% compared to 7.8% in 2022[4]. - Shareholders' profit for 2023 was HKD 475.3 million, down 18% from HKD 582.5 million in 2022, primarily due to price adjustments and increased costs associated with new facilities[4]. - The proposed final dividend per share is HKD 0.19, down from HKD 0.23 in 2022, with a payout ratio of 32% compared to 31% in the previous year[5]. - The group’s net profit for the year was HKD 481,081, down from HKD 559,570 in the previous year[41]. - Basic earnings per share decreased to 60.4 cents from 78.4 cents in the previous year[40]. - The diluted earnings per share for 2023 was HKD 0.603, compared to HKD 0.778 in 2022, indicating a decline of about 22.5%[70]. Revenue Breakdown - The automotive display business generated revenue of HKD 9,710 million in 2023, representing a 1% increase from HKD 9,577 million in 2022, accounting for approximately 90% of total revenue[6]. - The industrial display business recorded revenue of HKD 1,050,000,000, a decrease of approximately 8% compared to HKD 1,145,000,000 in 2022, accounting for about 10% of the group's total revenue[9]. - Revenue in China reached HKD 7,913,000,000, representing a 6% increase compared to the same period in 2022, accounting for 74% of total revenue[32]. - Revenue from the European display business was HKD 1,412,000,000, a decrease of 12% compared to 2022, accounting for 13% of total group revenue[34]. - Revenue in the Americas reached HKD 728,000,000, an increase of approximately 7% year-over-year, representing about 7% of total group revenue[35]. - Revenue from South Korea was HKD 305,000,000, a decrease of approximately 23% year-over-year, accounting for 3% of total group revenue[36]. - Revenue in Japan was HKD 69,000,000, a significant decrease of approximately 57% compared to the previous year, representing 1% of total group revenue[37]. Market Trends and Opportunities - The automotive display module market is projected to have a compound annual growth rate (CAGR) of 4.40%, 8.35%, and 18.16% over the next three years for total shipments, medium to large size (8 inches and above) shipments, and oxide shipments respectively[11]. - The Chinese automotive manufacturers are expected to see a 21% increase in sales of new energy vehicles in 2024, indicating significant market growth potential[12]. - The global sales volume of new energy vehicles from China accounted for about 60% of the global market share in 2023, maintaining its position as the largest in the world for nine consecutive years[12]. - The automotive display system market is expected to reach nearly HKD 100 billion in China by 2026, with the global smart cockpit and smart mobility market projected to reach several hundred billion HKD[12]. - The transition from gasoline and diesel vehicles to new energy vehicles in Europe is expected to create growth opportunities for the company in the European market[11]. Operational Strategies - The company plans to optimize supply chain management and production efficiency to improve profitability[4]. - The new facility in Chengdu, which began operations in 2022, is expected to increase production capacity significantly, enhancing production efficiency and supply capabilities[6]. - The company is enhancing its supply chain management by shifting to lower-cost IC chip suppliers to reduce overall costs and improve profitability[15]. - The company is focusing on developing high-quality products such as oversized automotive displays and curved displays to enhance competitiveness in the automotive sector[14]. - The company is actively expanding its automotive display business and aims to maintain its leading market share by collaborating closely with major automotive manufacturers and suppliers[17]. Research and Development - The company has successfully developed a new generation AR-HUD system and filed 34 technology patents, expanding its product offerings in the smart cockpit display system[29]. - The introduction of OXIDE technology has improved display performance, surpassing traditional a-Si technology, and has been validated for automotive reliability[20]. - The ADS-Pro technology enhances display quality with features like touchless interaction and improved color accuracy, gaining recognition from major automotive manufacturers[22]. - Multiple f-OLED displays have entered mass production, showcasing the company's leadership in flexible OLED technology[23]. - The newly developed pressure touch technology addresses false touch issues in outdoor applications, enhancing usability in challenging environments[27]. Financial Position and Assets - The company maintained a strong cash position with cash and deposits totaling HKD 3,501 million as of December 31, 2023, up from HKD 2,881 million at the end of 2022[3]. - Non-current assets increased to HKD 1,936,645 thousand in 2023 from HKD 1,672,534 thousand in 2022, representing a growth of 15.7%[43]. - Current assets rose to HKD 8,097,225 thousand in 2023, up from HKD 6,610,566 thousand in 2022, marking an increase of 22.4%[44]. - Total liabilities increased to HKD 5,022,791 thousand in 2023 from HKD 4,103,125 thousand in 2022, an increase of 22.4%[44]. - The company's equity totalled HKD 4,409,711 thousand in 2023, compared to HKD 4,115,773 thousand in 2022, showing an increase of 7.1%[44]. Corporate Governance - The board confirmed compliance with corporate governance codes, with some non-executive directors unable to attend the annual general meeting due to other commitments[87]. - The audit committee is responsible for reviewing the group's financial information and monitoring the financial reporting system, risk management, and internal control systems[89]. - The compensation committee oversees the remuneration policies for all directors and senior management, with a majority of independent non-executive directors[90]. - The nomination committee evaluates the board's structure and composition, ensuring compliance with corporate strategy and assessing the independence of non-executive directors[91]. - The investment committee aims to identify and select suitable investment projects to enhance and transform the group’s strategy[92].

Financial Performance - The company reported a record revenue of HKD 5,210 million for the six months ended June 30, 2023, an increase of 8% compared to HKD 4,831 million in the same period of 2022[18]. - EBITDA for the same period was HKD 324 million, a decrease of 10% from HKD 359 million in the previous year[18]. - Shareholders' profit attributable to the company was HKD 202.5 million, down 19% from HKD 250.9 million in the prior year[18]. - Operating profit for the same period was HKD 241,000,000, a decrease of HKD 34,000,000 or about 12% year-on-year, primarily due to price adjustments and additional costs related to the new manufacturing facility in Chengdu, China[38]. - Net profit attributable to shareholders for the six months ended June 30, 2023, was HKD 202,500,000, down from HKD 250,900,000 in the same period of 2022, reflecting the same factors affecting operating profit[38]. - Basic earnings per share for the period was 25.8 HK cents, compared to 34.5 HK cents for the same period in 2022, reflecting a decline of 25.1%[110]. - The total comprehensive income for the period was HKD 137,155 thousand, an increase of 22.5% from HKD 111,895 thousand in the previous year[111]. Cash and Liquidity - As of June 30, 2023, the company had cash and cash equivalents of HKD 2,360 million, compared to HKD 2,881 million at the end of 2022[18]. - Cash generated from operating activities was HKD 380,000,000, compared to HKD 318,000,000 in 2022, with inventory increases reducing cash flow by HKD 127,000,000[41]. - The company reported a net cash outflow from operating activities of HKD 380,197 thousand for the six months ended June 30, 2023, compared to a cash inflow of HKD 317,568 thousand in the same period of 2022[119]. - The company’s total equity as of June 30, 2023, was HKD 4,036,311 thousand, slightly down from HKD 4,064,698 thousand at the beginning of the year[118]. Debt and Borrowings - Bank borrowings increased by 18% to HKD 785 million as of June 30, 2023, up from HKD 667 million at the end of 2022[18]. - The company’s bank borrowings as of June 30, 2023, included HKD 156 million at fixed rates and HKD 629 million at floating rates, compared to HKD 33 million and HKD 634 million respectively as of December 31, 2022[46]. Market and Business Focus - The company focuses on automotive and industrial display solutions, positioning itself as a leader in the automotive display market[6]. - The company aims to expand its market presence in automotive smart cockpit display solutions[6]. - The automotive display business generated revenue of HKD 4.646 billion, a 7% increase compared to HKD 4.335 billion in the same period last year, accounting for approximately 89% of total revenue[21]. - The industrial display business recorded revenue of HKD 564 million, up about 14% from HKD 496 million in the same period last year, representing around 11% of total revenue[22]. - The company is dedicated to developing new products and technologies to enhance its competitive edge in the display industry[6]. Production and Capacity - The new Chengdu facility, which began production in 2022, increased output by over 100% in the first half of 2023, enhancing production efficiency and supply capacity[22]. - The company aims to optimize supply chain management and production efficiency to achieve better profitability[19]. - The sales volume and revenue of the group increased during the review period, with the new Chengdu factory's production capacity more than doubling in the first half of 2023[52]. Research and Development - Research and development expenses for the period amounted to HKD 112,000,000, representing about 2% of the company's revenue[38]. - The company has applied for 34 technology patents related to its AR-HUD systems, enhancing its competitive position in the market[36]. - The company is focusing on advanced display technologies such as electronic rearview mirrors and naked-eye 3D displays, which are becoming major trends in the automotive industry[22]. Sustainability and ESG Initiatives - The company is committed to sustainable development, having installed solar power systems to reduce carbon emissions and collaborating with partners to use eco-friendly materials[24]. - The group aims to achieve carbon neutrality by 2050 and has set targets to reduce carbon emissions and energy intensity by 70% by 2025, based on 2018 levels[59]. - The company is actively promoting green energy initiatives, including the construction of decentralized photovoltaic power stations[65]. - The company has integrated ESG and climate-related issues into its risk management and internal control systems[63]. Share Capital and Dividends - The company did not declare an interim dividend for the six months ended June 30, 2023, maintaining its dividend policy unchanged[20]. - The total issued share capital is 791,575,204 shares, with a par value of HKD 0.25 per share[71]. - The company has a stock option plan that allows for a maximum of 10% of the issued share capital to be granted as options[86]. Corporate Governance - The company has complied with the corporate governance code as stipulated in the listing rules as of June 30, 2023[95]. - The audit committee has reviewed the financial statements for the six months ended June 30, 2023, in accordance with the relevant auditing standards[98]. - The remuneration committee is responsible for setting and monitoring the remuneration policies for all directors and senior management[99].