Financial Performance - The company reported a revenue of HKD 10,722 million for 2022, a 39% increase from HKD 7,738 million in 2021[3] - EBITDA for 2022 was HKD 841 million, up 64% from HKD 513 million in the previous year, representing approximately 7.8% of total revenue[5] - Shareholders' profit attributable to the company was HKD 582.5 million, a 78% increase from HKD 327.8 million in 2021[3] - The company achieved a net foreign exchange gain of approximately HKD 16.8 million in 2022, compared to HKD 10.2 million in 2021[5] - The company's net profit attributable to shareholders was HKD 559,570,000 in 2022, up from HKD 309,719,000 in 2021, marking an increase of 80.7%[36] - Basic earnings per share increased to 78.4 HK cents in 2022 from 45.1 HK cents in 2021[34] - The company reported a total comprehensive income of HKD 324,293,000 for 2022, slightly down from HKD 333,900,000 in 2021[37] - The group's total revenue for 2022 was HKD 10,722,361,000, an increase of 38.5% from HKD 7,737,943,000 in 2021[46] Business Segments - The automotive display business generated revenue of HKD 9,577 million, a 47% increase from HKD 6,509 million in 2021, accounting for approximately 89% of total revenue[7] - The industrial display business recorded revenue of HKD 1,145 million, a decrease of 7% from HKD 1,228 million in 2021, representing about 11% of total revenue[8] - Revenue in China reached HKD 7,495,000,000, an increase of approximately 48% compared to 2021, accounting for 70% of total group revenue[29] - European display screen business generated revenue of HKD 1,607,000,000, a 12% increase from 2021, representing 15% of total group revenue[30] - In Korea, the revenue reached HKD 397,000,000 in 2022, a 19% increase compared to 2021, accounting for 4% of the group's total revenue[32] - In the Americas, revenue was HKD 680,000,000 in 2022, a significant 56% increase from 2021, representing 6% of the group's total revenue[33] Dividends and Shareholder Returns - The company proposed a final dividend of HKD 0.23 per share, up from HKD 0.15 per share in 2021, with a payout ratio of 31%[6] - The proposed final dividend for the year is HKD 0.23 per share, an increase from HKD 0.15 per share in 2021, totaling HKD 182,062,000 for 2022 compared to HKD 110,449,000 in 2021[56][64] Assets and Liabilities - The company maintained a cash and bank deposit balance of HKD 2,881 million as of December 31, 2022, compared to HKD 2,267 million at the end of 2021[3] - Non-current assets increased significantly to HKD 1,672,534,000 in 2022 from HKD 689,978,000 in 2021[38] - Current assets rose to HKD 6,610,566,000 in 2022, compared to HKD 4,853,186,000 in 2021[39] - The company's total assets less current liabilities amounted to HKD 4,179,975,000 in 2022, up from HKD 3,375,111,000 in 2021[39] - The group held a liquid investment portfolio valued at HKD 2,881,000,000 at year-end 2022, compared to HKD 2,271,000,000 in 2021[68] - The group has capital commitments of HKD 905,255,000 as of December 31, 2022, significantly higher than HKD 93,518,000 in 2021, indicating planned investments[63] Market and Growth Prospects - The group successfully expanded its automotive business, increasing overall revenue and profit, driven by strong personal consumption and government tax incentives in China[9] - The group achieved the highest market share in the global automotive display market, particularly for displays larger than 8 inches, establishing a strong customer network with major automotive manufacturers[10] - For 2023, the group expects continued revenue growth, supported by increasing demand for TFT and touch screen display modules in China, the US, Europe, and South Korea[9] - The group plans to expand its TFT and touch screen module production facilities in Chengdu, China, to capture upcoming business opportunities and further increase market share[14] - The group has secured multiple projects from top European automotive manufacturers, which will contribute to revenue growth in the coming years[12] - The group is developing new generation automotive display technologies, focusing on large, curved, and interactive screens to meet the trend of smart vehicle cockpits[16] - The group is actively expanding into the electric vehicle market, successfully penetrating major participants and securing projects for upcoming models[29] Research and Development - Research and development expenses were HKD 190,165,000 in 2022, slightly down from HKD 199,705,000 in 2021[51] - The company has successfully developed a 3D AR-HUD prototype, breaking the limitations of fixed image distance in existing AR-HUD displays[25] - The group has multiple projects in mass production for automotive OLED displays, indicating strong market acceptance of its f-OLED technology[19] - The group has launched a new TFT module for CMS monitors, addressing display latency issues in low temperatures[27] Governance and Compliance - The company was included in the Hang Seng Index series in March 2023, enhancing its market reputation and shareholder base[28] - The company is committed to transparency in its financial reporting process[79] - The board includes independent non-executive directors, ensuring governance and oversight[79] - The chairman of the board is Gao Wenbao, indicating leadership stability[79] - The announcement date is March 21, 2023, reflecting timely communication of financial information[79] Environmental Commitment - The group is committed to environmental protection and sustainability, planning to install solar power systems in its factories to reduce carbon emissions and energy costs[15]

Financial Performance - Revenue for the six months ended June 30, 2022, was HKD 4,831 million, representing a 51% increase from HKD 3,200 million for the same period in 2021[12] - EBITDA for the same period was HKD 359 million, up from HKD 174 million, indicating a significant growth of 106%[12] - Shareholders' profit attributable to the company was HKD 250.9 million, compared to HKD 95.1 million in the previous year, marking a 164% increase[12] - Basic earnings per share increased to HKD 34.5 cents from HKD 12.9 cents, reflecting a growth of 168%[12] - The automotive display business generated revenue of HKD 4,335,000,000, a 68% increase from HKD 2,578,000,000 in 2021, making up about 90% of total revenue[23] - Operating profit for the same period was HKD 275,028, up 187.5% from HKD 95,569 in the previous year[91] - Net profit for the period was HKD 233,843, representing a significant increase of 163.5% compared to HKD 88,980 in the prior year[94] - Total comprehensive income for the period was HKD 111,895, slightly up from HKD 100,628 in the same period last year[94] Cash and Liquidity - The company maintained a cash and cash equivalents balance of HKD 2,263 million as of June 30, 2022, slightly down from HKD 2,267 million at the end of 2021[12] - The company reported a net cash increase of 76,039 thousand in cash and cash equivalents, contrasting with a decrease of 33,600 thousand in the same period last year[103] - The company's cash and cash equivalents at the end of the period were 2,262,545 thousand, slightly down from 2,267,118 thousand at the beginning of the year due to currency fluctuations[103] Market Position and Strategy - The company is positioned as a global leader in automotive TFT display products, particularly in large and medium-sized display modules[7] - The company aims to become a leading provider of automotive smart cockpit display solutions[7] - The focus on automotive and industrial display solutions is a key strategic direction for the company[7] - The company is actively involved in the development of new products and technologies to enhance its market position[7] - The company anticipates continued revenue growth in the second half of 2022, driven by increasing orders for TFT and touch screen display modules, particularly from China and Europe[25] Production and Development - A new production facility for TFT and touch screen modules is planned in Chengdu, China, expected to be completed by the end of 2022 or early 2023, to capture upcoming market opportunities[30] - The company is focusing on the gradual mass production of high-end display products such as BD displays, AMOLED displays, and mini-LED solutions as growth drivers in the coming years[25] - The company is committed to developing advanced automotive display technologies, including HDR, mini-LED, and BD cell technologies, to enhance display performance and meet rising market demands[33] Shareholder Information - The company did not declare an interim dividend for the six months ending June 30, 2022, consistent with the previous year[22] - The company declared a final dividend of 15.0 HK cents per share for the previous fiscal year, amounting to 109,284 thousand, up from 36,780 thousand in the previous year[125] - As of June 30, 2022, major shareholder 京东方科技集团股份有限公司 holds 400,000,000 shares, representing approximately 54.31% of the company's issued share capital[61] Corporate Governance - The company has complied with the corporate governance code as outlined in the listing rules as of June 30, 2022[74] - The company has adopted a code of conduct for directors' securities transactions, which meets or exceeds the standard set by the listing rules[75] - The board of directors has confirmed compliance with the standards set forth in the code of conduct during the review period[75] Environmental and Social Responsibility - The company is committed to regularly reviewing and updating its carbon reduction pathways and related targets based on environmental trends and business developments[39] - The company has invested in a water recycling treatment system at its Heyuan production facility, which reduces wastewater discharge by 6,000 tons annually[41] Employee Information - The company employed a total of 4,063 employees globally as of June 30, 2022, with a performance-based compensation policy in place[44] Investment and Capital Expenditure - The group incurred capital expenditures of 304,987 thousand for the purchase of property, plant, and equipment, which is a significant rise from 48,274 thousand in the previous year[103] - The group has capital commitments for the construction and purchase of plant and equipment amounting to RMB 635,666,000 as of June 30, 2022, compared to RMB 93,518,000 as of December 31, 2021[139] Foreign Exchange and Financial Instruments - The company recognized a foreign exchange loss of 120,126 thousand during the period, impacting the overall comprehensive income[100] - The group does not currently use any financial instruments for hedging purposes but monitors foreign exchange risks regularly[46]

Financial Performance - The company reported a revenue of HKD 7,738 million for the year ended December 31, 2021, representing a 71% increase from HKD 4,527 million in 2020[8]. - EBITDA for the year was HKD 513 million, up 138% from HKD 216 million in the previous year[8]. - Shareholders' profit attributable to the company was HKD 327.8 million, a 378% increase compared to HKD 68.6 million in 2020[8]. - Cash and cash equivalents at the end of 2021 stood at HKD 2,267 million, compared to HKD 1,635 million at the end of 2020[8]. - Operating profit for the same period was HKD 350,000,000, an increase of approximately 400% from HKD 70,000,000 in the previous year[17]. - Net profit attributable to shareholders reached HKD 327,800,000, compared to HKD 68,600,000 in 2020, marking a significant increase[17]. - The group’s revenue for the fiscal year ended December 31, 2021, increased by 71% to HKD 7,738,000,000 compared to the previous fiscal year[17]. Automotive Sector Growth - The company achieved significant growth in the automotive sector, with revenue from automotive displays reaching HKD 6,509 million, an 89% increase from HKD 3,450 million in 2020[9]. - The automotive display business accounted for approximately 84% of the company's total revenue, reflecting strong demand in the market[9]. - The automotive display business in China accounted for over 40% of the group's total revenue in 2021, with a customer base expanding to cover major traditional and new energy vehicle manufacturers[11]. - The sales of TFT display products for new energy vehicle customers exceeded 30% coverage in 2021, contributing to the overall revenue growth driven by strong demand in the traditional and new energy vehicle markets[11]. - The group expects continued revenue growth in 2022, driven by increasing demand for TFT and touch screen display modules, particularly from China and Europe[11]. Research and Development - The group invested HKD 200,000,000 in research and development, representing about 3% of total revenue[17]. - Significant investments have been made in Hefei Jiangcheng Technology Co., Ltd. to support the development of AR-HUD and related technologies[14]. - The company is focusing on developing next-generation automotive display technologies, including AR-HUD and head-up displays, with production expected to start in the first half of 2022 for a local Chinese automotive brand[14]. - The company has built a professional automotive electronics R&D team, focusing on smart cockpit solutions, and has secured multiple projects with new energy vehicle companies in China and Europe[15]. Environmental Sustainability - The company emphasizes the importance of ESG governance and management, integrating sustainability factors into all business decision-making processes[34]. - The total greenhouse gas emissions in 2021 amounted to 4,308.09 tons of CO2 equivalent, with a revenue ratio of 556.74 tons per billion HKD[45]. - The company has maintained ISO 14001 certification since 2005, ensuring compliance with environmental laws and regulations[44]. - The company emphasizes the importance of environmental protection and sustainable development in its operations[42]. - The company aims to maintain a carbon dioxide equivalent density of 0.065 tons per 1,000 units as an initial target for emission reduction[47]. Employee Management and Welfare - The company employed a total of 3,725 staff globally, with a performance-based compensation policy in place[20]. - The employee turnover rates for Hong Kong, China, and overseas in 2021 were 15.9%, 34.3%, and 5.9% respectively[61]. - The company maintained a safe working environment, with no work-related fatalities reported over the past three years, and recorded 18 minor injuries in 2021, resulting in a total of 286 lost workdays[62]. - Employee compensation and bonuses are linked to performance, with annual reviews considering financial performance, business outlook, individual performance, market levels, and inflation[61]. - The company promotes a healthy lifestyle among employees through health and wellness seminars and various sports activities[64]. Corporate Governance - The company is committed to maintaining high standards of corporate governance, ensuring accountability and transparency among stakeholders[117]. - The board consists of 3 executive directors, 3 non-executive directors, and 3 independent non-executive directors as of December 31, 2021[118]. - The company has adopted and complies with the corporate governance code as per the Hong Kong Stock Exchange's listing rules[117]. - The independent non-executive directors bring extensive professional management experience to the board, ensuring the company's continued success[118]. - The company emphasizes the importance of balancing interests among shareholders, customers, creditors, employees, and other stakeholders[117]. Supplier and Procurement Management - The top five suppliers represented 67.2% of total procurement, with the largest supplier accounting for 38.3%[194]. - The total procurement transaction amount was HKD 3,362 million, reflecting a significant increase from HKD 2,431 million in 2020, representing a growth of approximately 38.3%[182]. - The company has established a subcontracting agreement with the parent company for the manufacturing of TFT/TP modules, which has been effective since 2016 and was updated in 2018[181]. - The company has implemented a comprehensive quality management system that meets ISO 9001 and IATF 16949 requirements, ensuring strict quality control throughout the production process[82]. Community Engagement - The company actively participates in community charity events, including the Standard Chartered Marathon and fundraising activities in Guangdong[87]. - Since 2012, the company has established a scholarship program in partnership with a local technical school to support outstanding students and assist those in need[88]. - The group’s charitable donations reached HKD 128,532 in the fiscal year, an increase from HKD 89,000 in 2020[158].

[Company Overview and Financial Summary](index=2&type=section&id=Company%20Overview%20and%20Financial%20Summary) [Financial Summary](index=2&type=section&id=Financial%20Summary) The Group achieved strong financial performance in H1 2021, with revenue growing 69% to **HKD 3.2 billion** and profit attributable to shareholders soaring 423% to **HKD 95.1 million**, demonstrating enhanced profitability and a robust cash position 2021 Interim Financial Summary (Million HKD) | Metric | H1 2021 | H1 2020 | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Revenue | 3,200 | 1,898 | +69% | | EBITDA | 174 | 90 | +93% | | Profit Attributable to Shareholders | 95.1 | 18.2 | +423% | | Basic and Diluted EPS | 12.9 HK cents | 2.5 HK cents | +416% | | Cash and Time Deposits Balance | 1,601 | 1,502 | +6.6% | - As of June 30, 2021, the Group had **no bank loans**, maintaining a healthy cash position[4](index=4&type=chunk) [Management Discussion and Analysis](index=2&type=section&id=Management%20Discussion%20and%20Analysis) [Chairman's Report](index=2&type=section&id=Chairman%27s%20Report) The Chairman's Report highlights the Group's recovery from COVID-19, achieving significant H1 2021 revenue and profit growth driven by China's automotive market and display module sales, with a strategic focus on smart cockpit display systems - The Group's business recovered from the COVID-19 pandemic, achieving **substantial growth in revenue and profit attributable to shareholders** in H1 2021, primarily due to the rapid recovery of China's automotive market and the commencement of mass production for new projects[4](index=4&type=chunk) - Sales of TFT modules and touch display modules accounted for **81% of total revenue**, serving as the primary growth driver[4](index=4&type=chunk) - The profit attributable to shareholders ratio increased from **1% to 3%**, indicating improved profitability driven by sales growth and economies of scale[6](index=6&type=chunk) - The Board resolved **not to declare an interim dividend** for the six months ended June 30, 2021[7](index=7&type=chunk) [Business Review](index=3&type=section&id=Business%20Review) In H1 2021, both core businesses grew, with automotive display revenue surging 86% to account for 81% of total revenue, driven by China's market and product mix optimization, while industrial display revenue also grew 21% due to increased orders in education and high-end home appliances [Automotive Display Business](index=3&type=section&id=Automotive%20Display%20Business) Automotive display revenue grew 86% year-on-year to **HKD 2.578 billion**, comprising 81% of total Group revenue, driven by China's rapidly recovering automotive market, significant growth in new energy vehicle displays, and a shift towards higher-value touch display modules and larger TFTs Automotive Display Business Revenue | Period | Revenue (HKD) | | :--- | :--- | | H1 2021 | 2,578,000,000 | | H1 2020 | 1,386,000,000 | - China's new energy vehicle display business recorded **substantial revenue growth** due to increased customer orders[9](index=9&type=chunk) - Revenue from European, Korean, Japanese, and American markets also recorded **considerable growth** compared to a lower base in the same period last year[9](index=9&type=chunk) [Industrial Display Business](index=4&type=section&id=Industrial%20Display%20Business) Industrial display revenue grew 21% year-on-year to **HKD 622 million**, accounting for 19% of total Group revenue, driven by increased sales of TFT display modules for education applications in China and orders from a renowned high-end home appliance brand Industrial Display Business Revenue | Period | Revenue (HKD) | | :--- | :--- | | H1 2021 | 622,000,000 | | H1 2020 | 512,000,000 | [Business Outlook](index=4&type=section&id=Business%20Outlook) The Group anticipates continued growth in H2 2021, with further increases in revenue and profit driven by China's TFT and touch display module orders, while mitigating global electronic component shortages through measures like price adjustments to ensure smooth production and delivery - Revenue and profit are expected to **further increase in H2 2021**, primarily driven by orders for TFT and touch display modules from traditional and new energy vehicles in China[11](index=11&type=chunk) - Global electronic component shortages remain a business uncertainty, and the Group has **increased product prices** to cope with rising raw material costs, with these adjustments to be reflected in H2 2021[11](index=11&type=chunk) - Mass production of **large-sized AMOLED displays** for a renowned Chinese new energy vehicle manufacturer is scheduled to commence in 2022[13](index=13&type=chunk) [Development Strategy and R&D](index=5&type=section&id=Development%20Strategy%20and%20R%26D) The Group's strategy focuses on becoming a total solution provider for automotive smart cockpit display systems, considering capacity expansion with BOE Group and investing in advanced HMI technologies like AR-HUD and curved displays, with R&D emphasizing intelligent cockpits, MiniLED, BD cell, and securing mass production projects for AR-HUD and CMS [Development Strategy](index=6&type=section&id=Development%20Strategy) The Group aims to increase market share by strengthening client relationships and expanding into new energy vehicle markets like Europe, considering a joint venture with BOE Group to expand TFT and touch display module manufacturing in China, with a strategic goal to become a total solution provider for automotive smart cockpit display systems and invest in HMI technologies like AR-HUD - The Group aims to become a **total solution provider for automotive smart cockpit display systems**, seizing future trends[14](index=14&type=chunk) - Considering a **joint venture with BOE Group** to expand TFT and touch display module manufacturing facilities in China to meet the growing demand in the automotive market[14](index=14&type=chunk) - Increased investment in Shenzhen Jiangcheng Technology Co., Ltd. to support **AR-HUD R&D**, with plans for mass production of an AR-HUD project for a Chinese automaker in 2022[14](index=14&type=chunk) [R&D Development](index=7&type=section&id=R%26D%20Development) R&D focuses on intelligent automotive cockpits, developing large-sized, high-pixel, immersive display products, including LED local dimming, MiniLED, and BD cell technologies, achieving breakthroughs in curved displays, naked-eye 3D, AR-HUD, and CMS, securing multiple projects from renowned automakers, with some commencing mass production in H2 2021 - Committed to developing **LED local dimming, MiniLED, high dynamic range display, and BD cell technologies** to enhance display image quality[16](index=16&type=chunk) - Achieved phased results in **automotive curved displays** and secured the first in-vehicle integrated touch irregular curved display project from a renowned automaker[17](index=17&type=chunk) - **AR-HUD products** have secured customized project nominations from leading Chinese automotive clients; **WHUD** (Windshield HUD) also secured multi-model project nominations from another major client[17](index=17&type=chunk) - Secured project nominations from new and new energy vehicle manufacturers in China, Europe, and America, including **instrument display systems, multi-screen display assemblies, and electronic rearview mirror display systems**, with some projects commencing mass production in H2 this year[19](index=19&type=chunk) [Condensed Consolidated Financial Statements](index=10&type=section&id=Condensed%20Consolidated%20Financial%20Statements) [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=10&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the six months ended June 30, 2021, the Group reported revenue of **HKD 3.2 billion**, up 69% year-on-year, operating profit of **HKD 95.57 million**, up 379%, and profit attributable to shareholders of **HKD 95.11 million**, up 423%, with basic and diluted EPS at **12.9 HK cents** Consolidated Statement of Profit or Loss Summary (Thousand HKD) | Item | H1 2021 | H1 2020 | | :--- | :--- | :--- | | Revenue | 3,200,005 | 1,898,299 | | Operating Profit | 95,569 | 19,936 | | Profit Before Tax | 94,862 | 18,784 | | Profit for the Period | 88,980 | 18,182 | | Profit Attributable to Shareholders of the Company | 95,105 | 18,182 | | Basic Earnings Per Share | 12.9 HK cents | 2.5 HK cents | [Consolidated Statement of Financial Position](index=11&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2021, the Group's total assets were **HKD 4.236 billion**, total liabilities **HKD 1.408 billion**, and net assets **HKD 2.828 billion**, with net current assets of **HKD 2.272 billion** and cash and cash equivalents of **HKD 1.6 billion**, indicating a robust financial position Consolidated Statement of Financial Position Summary (Thousand HKD) | Item | June 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | **Assets** | | | | Non-current assets | 578,783 | 522,832 | | Current assets | 3,656,928 | 3,307,006 | | **Total assets** | **4,235,711** | **3,829,838** | | **Liabilities and Equity** | | | | Current liabilities | 1,385,108 | 1,037,232 | | Non-current liabilities | 22,889 | 25,452 | | **Total liabilities** | **1,408,000** | **1,062,684** | | **Total equity** | **2,827,714** | **2,767,154** | [Condensed Consolidated Statement of Cash Flows](index=14&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) In H1 2021, net cash from operating activities was a **HKD 60.36 million** inflow, a significant improvement from a **HKD 6.51 million** outflow in the prior period, while net cash used in investing activities was **HKD 65.50 million** and in financing activities **HKD 28.46 million**, with period-end cash and cash equivalents at **HKD 1.6 billion** Condensed Consolidated Statement of Cash Flows Summary (Thousand HKD) | Item | H1 2021 | H1 2020 | | :--- | :--- | :--- | | Net cash from / (used in) operating activities | 60,360 | (6,513) | | Net cash used in investing activities | (65,499) | (23,091) | | Net cash used in financing activities | (28,461) | (3,715) | | Net decrease in cash and cash equivalents | (33,600) | (33,319) | | Cash and cash equivalents at beginning of period | 1,627,531 | 1,538,328 | | **Cash and cash equivalents at end of period** | **1,600,920** | **1,493,954** | [Notes to the Financial Statements](index=15&type=section&id=Notes%20to%20the%20Financial%20Statements) [Significant Accounting Policies and Segment Reporting](index=15&type=section&id=Significant%20Accounting%20Policies%20and%20Segment%20Reporting) This interim financial report, prepared under HKAS 34 and reviewed by KPMG, manages the Group's business as a single operating segment: the design, manufacture, and sale of LCDs and related products, with China being the largest revenue source, accounting for 63% of total revenue - The Group manages its business as a **single unit**, with the design, manufacture, and sale of liquid crystal displays and related products as the sole reportable segment[38](index=38&type=chunk) Revenue from External Customers by Geographical Region (Thousand HKD) | Region | H1 2021 | H1 2020 | | :--- | :--- | :--- | | China (Location of operation) | 2,009,215 | 1,003,751 | | Europe | 669,249 | 545,956 | | Korea | 168,091 | 106,985 | | Americas | 155,309 | 78,227 | | Others | 198,141 | 163,380 | | **Total** | **3,200,005** | **1,898,299** | [Acquisition of a Subsidiary](index=24&type=section&id=Acquisition%20of%20a%20Subsidiary) On February 8, 2021, the Group acquired control of Hefei Jiangcheng Technology Co., Ltd., increasing its stake from 22.5% to 57.375%, aiming to strengthen its AR-HUD R&D capabilities and support its strategic goal of becoming a smart cockpit display system solution provider - The Group acquired a **34.875% stake** in Hefei Jiangcheng Technology Co., Ltd., increasing its total shareholding to **57.375%** and gaining control[68](index=68&type=chunk) - This acquisition is expected to support the Group's strategy by further strengthening its **R&D capabilities in Augmented Reality Head-Up Displays (AR-HUD)**[68](index=68&type=chunk) [Other Information](index=29&type=section&id=Other%20Information) [Liquidity and Financial Resources](index=29&type=section&id=Liquidity%20and%20Financial%20Resources) As of June 30, 2021, the Group maintained a robust financial position with a current ratio of **2.64**, cash and time deposits of **HKD 1.601 billion**, zero bank borrowings, and improved inventory turnover and accounts receivable collection efficiency Key Financial Ratios | Metric | June 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | Current Ratio | 2.64 | 3.19 | | Gearing Ratio | 0% | 0% | | Inventory Turnover Ratio (Annualized) | 10.1 times | 7.8 times | | Trade Receivables Turnover Days | 72 days | 84 days | - At period-end, the Group held cash and time deposits balance of **HKD 1.601 billion**, with **no bank borrowings**[83](index=83&type=chunk) [Directors' and Shareholders' Interests](index=30&type=section&id=Directors%27%20and%20Shareholders%27%20Interests) The report discloses directors' and major shareholders' equity interests, with BOE Technology Group Co., Ltd. as the controlling shareholder holding **54.38%** of shares, and several directors holding shares or share incentives in both the Company and its associate, BOE - **BOE Technology Group Co., Ltd.** is the major shareholder, holding **400 million shares**, representing **54.38%** of the issued share capital[96](index=96&type=chunk) [Share Incentive Schemes](index=34&type=section&id=Share%20Incentive%20Schemes) The Company operates share option and share award schemes to incentivize and retain talent, granting **6.31 million** award shares to directors and employees during the period, with some options exercised, aligning employee interests with company development - On March 29, 2021, the Company granted a total of **6,310,000 award shares** to 72 selected participants (including 5 directors and 67 employees) under the Share Award Scheme[102](index=102&type=chunk) - As of June 30, 2021, **3,450,000 share options** remained unexercised under the Fourth Share Option Scheme[100](index=100&type=chunk) - During the period, the trustee of the Share Award Scheme purchased a total of **5,856,000 Company shares** in the market for a total consideration of approximately **HKD 23.183 million**[105](index=105&type=chunk) [Corporate Governance](index=38&type=section&id=Corporate%20Governance) The Company complied with the Corporate Governance Code during the reporting period, establishing Audit, Remuneration, and Nomination Committees, each with a majority of independent non-executive directors to ensure governance independence and effectiveness, with the interim financial report reviewed by the Audit Committee and KPMG - The Company has complied with the code provisions of the **Corporate Governance Code** as set out in Appendix 14 to the Listing Rules[106](index=106&type=chunk) - The Audit Committee, comprising **3 independent non-executive directors**, has reviewed these interim results[107](index=107&type=chunk) - Independent non-executive directors constitute a **majority of the members** of both the Remuneration Committee and the Nomination Committee[109](index=109&type=chunk)[110](index=110&type=chunk)

2020年年報 京東方精電有限公司 股份代號 710 目錄 | 2 | 主席報告 | | --- | --- | | 8 | 管理層討論及分析 | | 10 | 營運回顧 | | 14 | 環境、社會及管治報告 | | 30 | 董事及高級管理層 | | 34 | 企業管治報告 | | 43 | 董事會報告 | | 54 | 獨立核數師報告 | | 60 | 綜合損益表 | | 61 | 綜合損益及其他全面收益表 | | 62 | 綜合財務狀況表 | | 63 | 綜合權益變動表 | | 64 | 綜合現金流量表 | | 65 | 財務報表附註 | | 106 | 五年概要 | | 107 | 本集團擁有之物業 | | 108 | 公司資料 | 主席報告 | 財務摘要 | | | | --- | --- | --- | | 百萬港元 | 2020 | 2019 | | 收益 | 4,527 | 3,574 | | 利息、稅項、折舊及攤銷前利潤（EBITDA1 ） | 216 | 166 | | 股東應佔溢利 | 68.6 | 25.0 | | 現金及定期存款結餘 | 1,635 | 1,546 | | 基本每 ...

[Company Overview and Financial Summary](index=2&type=section&id=%E5%85%AC%E5%8F%B8%E6%A6%82%E8%A6%BD%E8%88%87%E8%B2%A1%E5%8B%99%E6%91%98%E8%A6%81) [Financial Summary](index=2&type=section&id=%E8%B2%A1%E5%8B%99%E6%91%98%E8%A6%81) The Group's H1 2020 revenue grew 18.1% to HK$1.898 billion, with a strong Q2 rebound offsetting initial COVID-19 impacts Financial Summary (HK$ million) | Financial Summary (HK$ million) | For the 6 months ended June 30, 2020 | For the 6 months ended June 30, 2019 | | :--- | :--- | :--- | | **Revenue** | 1,898 | 1,607 | | **EBITDA** | 89.8 | 88.3 | | **Profit Attributable to Shareholders** | 18.2 | 17.3 | | **Cash and Time Deposits Balance** | 1,502 | 1,294 | | **Basic Earnings Per Share** | 2.5 HK cents | 2.4 HK cents | - As of June 30, 2020, the Group maintained a **strong cash position** with cash and time deposits of **HK$1.502 billion** and **no bank loans**[4](index=4&type=chunk) - Despite Q1 impacts from COVID-19, a recovery in the China market enabled a rapid response to customer demand in Q2, driving an **18.1% increase in overall revenue** for the period[4](index=4&type=chunk) [Chairman's Statement](index=2&type=section&id=%E4%B8%BB%E5%B8%AD%E5%A0%B1%E5%91%8A) [Performance Review and Analysis](index=3&type=section&id=%E6%A5%AD%E7%B8%BE%E5%9B%9E%E9%A1%A7%E8%88%87%E5%88%86%E6%9E%90) Revenue growth was driven by TFT and touch display modules, with manufacturing integration enhancing operational efficiency - Revenue growth was primarily driven by the mass production of TFT and touch display modules, with the **TFT module business accounting for approximately 75% of total revenue**[5](index=5&type=chunk) - EBITDA saw a slight increase of 1.7% due to reduced staff costs and operating expenses, while manufacturing integration with BOE Group improved operational efficiency and operating profit[5](index=5&type=chunk) - The Board of Directors resolved **not to declare an interim dividend** for the six months ended June 30, 2020[6](index=6&type=chunk) [Business Review](index=3&type=section&id=%E6%A5%AD%E5%8B%99%E5%9B%9E%E9%A1%A7) Both automotive and industrial display segments achieved significant growth, driven by TFT module sales in specific markets [Automotive Display Business](index=3&type=section&id=%E6%B1%BD%E8%BB%8A%E9%A1%AF%E7%A4%BA%E5%B1%8F%E6%A5%AD%E5%8B%99) The automotive display business revenue grew 13% to HK$1.386 billion, driven by strong demand in China, Korea, and Japan Business Segment Performance | Business Segment | H1 2020 Revenue (HK$ million) | H1 2019 Revenue (HK$ million) | YoY Growth | Share of Total Revenue | | :--- | :--- | :--- | :--- | :--- | | Automotive Display Business | 1,386 | 1,231 | 13% | ~73% | - The China automotive market recovered significantly in Q2, leading to a surge in orders from Chinese customers and a substantial increase in revenue from NEV touch display modules[7](index=7&type=chunk) - The Korean and Japanese markets recorded significant revenue growth due to several TFT module projects that commenced mass production in late 2019[7](index=7&type=chunk) [Industrial Display Business](index=4&type=section&id=%E5%B7%A5%E6%A5%AD%E9%A1%AF%E7%A4%BA%E5%B1%8F%E6%A5%AD%E5%8B%99) The industrial display business revenue grew 36% to HK$512 million, led by sales for education and high-end appliances Business Segment Performance | Business Segment | H1 2020 Revenue (HK$ million) | H1 2019 Revenue (HK$ million) | YoY Growth | Share of Total Revenue | | :--- | :--- | :--- | :--- | :--- | | Industrial Display Business | 512 | 376 | 36% | ~27% | - Revenue growth was primarily driven by sales of TFT display modules for education-related applications in China and for a world-renowned high-end home appliance brand[8](index=8&type=chunk) [Business Outlook](index=4&type=section&id=%E6%A5%AD%E5%8B%99%E5%B1%95%E6%9C%9B) The Group is optimistic about continued growth in H2 2020, particularly in the China market for both automotive and industrial segments - Based on existing orders, the Group expects the TFT and touch display module business to continue growing in H2 2020, especially in the China market[9](index=9&type=chunk) - **Automotive Outlook**: The Group has secured over **50% of order share** among major Chinese automakers and will co-develop smart cockpit products like AMOLED and AR-HUDs, though the European market outlook remains uncertain[10](index=10&type=chunk) - **Industrial Outlook**: The Group will continue promoting display products to industrial and high-end consumer clients, aiming to increase TFT and touch module sales and introduce AMOLED products, but recovery in European and US markets is expected to be slow[11](index=11&type=chunk) [Development Strategy and R&D](index=5&type=section&id=%E7%99%BC%E5%B1%95%E7%AD%96%E7%95%A5%E8%88%87%E7%A7%91%E7%A0%94) The Group is strategically transitioning to a smart cockpit display system provider, focusing R&D on advanced technologies like AR-HUD and AMOLED - **Strategic Transition**: The Group is committed to transforming from a display solution provider to a **"smart cockpit display system assembly solution provider"**[13](index=13&type=chunk) - **Market Position**: According to market research, the company achieved a **10% share of the global automotive display market** in Q1 2020[12](index=12&type=chunk) - **R&D Progress**: - **AR-HUD**: Secured a development order from a renowned Chinese NEV manufacturer - **Integrated Display**: Won a project for an integrated instrument display from another NEV company - **Glasses-free 3D**: Completed R&D for the first large-size full HD glasses-free 3D automotive instrument - **Curved Display**: Dual-curved and triple-curved display products have been verified and are ready for mass production - **AMOLED**: Initial development of flexible automotive AMOLED technology is complete, with mass production of small-sized AMOLEDs for a well-known NEV brand underway[13](index=13&type=chunk)[14](index=14&type=chunk)[15](index=15&type=chunk) [Consolidated Financial Statements](index=9&type=section&id=%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8) [Consolidated Statement of Profit or Loss](index=9&type=section&id=%E7%B6%9C%E5%90%88%E6%90%8D%E7%9B%8A%E8%A1%A8) For the six months ended June 30, 2020, the company recorded revenue of HK$1.898 billion and profit attributable to shareholders of HK$18.18 million Key Figures (HK$ thousand) | Item (HK$ thousand) | For the 6 months ended June 30, 2020 | For the 6 months ended June 30, 2019 | | :--- | :--- | :--- | | **Revenue** | 1,898,299 | 1,607,173 | | **Operating Profit** | 19,936 | 20,537 | | **Profit Before Tax** | 18,784 | 20,074 | | **Profit for the Period Attributable to Owners** | 18,182 | 17,250 | | **Basic Earnings Per Share** | 2.5 HK cents | 2.4 HK cents | [Consolidated Statement of Financial Position](index=10&type=section&id=%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8) As of June 30, 2020, the company had total assets of HK$2.937 billion, total liabilities of HK$899 million, and total equity of HK$2.557 billion Key Figures (HK$ thousand) | Item (HK$ thousand) | As at June 30, 2020 | As at December 31, 2019 | | :--- | :--- | :--- | | **Non-current Assets** | 519,460 | 559,547 | | **Current Assets** | 2,936,711 | 2,973,622 | | **Current Liabilities** | 882,579 | 761,502 | | **Non-current Liabilities** | 16,346 | 20,232 | | **Net Assets** | 2,557,246 | 2,751,435 | | **Total Equity** | 2,557,246 | 2,751,435 | [Consolidated Statement of Changes in Equity](index=11&type=section&id=%E7%B6%9C%E5%90%88%E6%AC%8A%E7%9B%8A%E8%AE%8A%E5%8B%95%E8%A1%A8) Total equity decreased from HK$2.751 billion to HK$2.557 billion, mainly due to dividend payments and currency exchange differences - Opening total equity was **HK$2,751,435 thousand**, and closing total equity was **HK$2,557,246 thousand**[22](index=22&type=chunk) - Key equity movements include: **profit for the period (+HK$18,182 thousand)**, changes in exchange reserve (**-HK$21,646 thousand**), and **payment of prior year dividends (-HK$191,146 thousand)**[22](index=22&type=chunk) [Condensed Consolidated Statement of Cash Flows](index=13&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E7%8F%BE%E9%87%91%E6%B5%81%E9%87%8F%E8%A1%A8) For H1 2020, the company experienced net cash outflows from operating, investing, and financing activities, with period-end cash at HK$1.494 billion Key Figures (HK$ thousand) | Item (HK$ thousand) | For the 6 months ended June 30, 2020 | For the 6 months ended June 30, 2019 | | :--- | :--- | :--- | | **Net Cash Used in Operating Activities** | (6,513) | (28,559) | | **Net Cash Used in Investing Activities** | (23,091) | (51,308) | | **Net Cash Used in Financing Activities** | (3,715) | (4,246) | | **Net Decrease in Cash and Cash Equivalents** | (33,319) | (84,113) | | **Cash and Cash Equivalents at End of Period** | 1,493,954 | 1,255,437 | [Notes to the Unaudited Interim Financial Report](index=14&type=section&id=%E6%9C%AA%E7%B6%93%E5%AF%A9%E6%A0%B8%E4%B8%AD%E6%9C%9F%E8%B2%A1%E5%8B%99%E5%A0%B1%E5%91%8A%E9%99%84%E8%A8%BB) [3. Revenue and Segment Reporting](index=15&type=section&id=3.%20%E6%94%B6%E7%9B%8A%E5%8F%8A%E5%88%86%E9%83%A8%E5%A0%B1%E5%91%8A) The Group operates as a single segment, with China being the largest geographical market, contributing over 50% of H1 2020 revenue - The Group's business is classified as a **single reportable segment**: the design, manufacturing, and sale of liquid crystal displays and related products[27](index=27&type=chunk) Revenue from External Customers (HK$ thousand) | Revenue from External Customers (HK$ thousand) | H1 2020 | H1 2019 | | :--- | :--- | :--- | | **China (place of domicile)** | 1,003,751 | 591,037 | | **Europe** | 545,956 | 685,365 | | **The Americas** | 78,227 | 113,136 | | **Korea** | 106,985 | 63,146 | | **Others** | 163,380 | 154,489 | | **Consolidated Revenue** | **1,898,299** | **1,607,173** | [15. Significant Related Party Transactions](index=21&type=section&id=15.%20%E9%97%9C%E9%80%A3%E4%BA%BA%E5%A3%AB%E7%9A%84%E9%87%8D%E5%A4%A7%E4%BA%A4%E6%98%93) Significant transactions with parent company BOE Technology Group included purchases of goods totaling HK$980 million, reflecting deeper business integration Transactions with BOE Group (HK$ thousand) | Transactions with BOE Group (HK$ thousand) | H1 2020 | H1 2019 | | :--- | :--- | :--- | | **Purchases of goods** | 979,604 | 472,068 | | **Rental of properties, plant and equipment (income)** | 6,681 | 5,256 | - As of June 30, 2020, amounts due to BOE Group for purchase costs and other expenses totaled **HK$244 million**[46](index=46&type=chunk) [17. Non-adjusting Events After the Reporting Period](index=23&type=section&id=17.%20%E5%A0%B1%E5%91%8A%E6%9C%9F%E5%BE%8C%E9%9D%9E%E8%AA%BF%E6%95%B4%E4%BA%8B%E9%A0%85) Post-period, the Group invested RMB 50.1 million to establish a new subsidiary, Ruihe Technology Co, Ltd, holding a 50.1% equity interest - After the reporting period, the company invested **RMB 50.1 million** through a subsidiary to establish a new joint venture, "Ruihe Technology Co, Ltd", holding a **50.1% stake** and consolidating it as a subsidiary[47](index=47&type=chunk) [Other Information](index=25&type=section&id=%E5%85%B6%E4%BB%96%E8%B3%87%E6%96%99) [Liquidity and Financial Resources](index=25&type=section&id=%E6%B5%81%E5%8B%95%E8%B3%87%E9%87%91%E5%8F%8A%E8%B2%A1%E6%94%BF%E8%B3%87%E6%BA%90) The Group maintained a strong financial position with HK$1.502 billion in cash, zero bank loans, a zero gearing ratio, and a liquidity ratio of 3.3 Financial Indicators | Financial Indicator | As at June 30, 2020 | As at December 31, 2019 | | :--- | :--- | :--- | | **Total Equity (HK$ million)** | 2,557 | 2,751 | | **Current Ratio** | 3.3 | 3.9 | | **Cash and Time Deposits (HK$ million)** | 1,502 | 1,546 | | **Bank Loans (HK$ million)** | 0 | 0 | | **Gearing Ratio** | 0% | 0% | | **Inventory Turnover Ratio (times)** | 6.6 | 5.0 | | **Trade Receivables Turnover (days)** | 73 | 82 | [Directors' and Chief Executive's Interests in Shares](index=26&type=section&id=%E8%91%A3%E4%BA%8B%E5%8F%8A%E4%B8%BB%E8%A6%81%E8%82%A1%E6%9D%B1%E6%96%BC%E8%82%A1%E4%BB%BD%E4%B9%8B%E6%AC%8A%E7%9B%8A) As of June 30, 2020, BOE Technology Group was the controlling shareholder with a 54.41% stake, and several directors held share options Major Shareholders | Name of Major Shareholder | Number of Shares Held | Approx. Percentage of Issued Share Capital | | :--- | :--- | :--- | | BOE Technology Group Co, Ltd | 400,000,000 | 54.41% | | Ko Chun Shun | 50,551,000 | 6.88% | | Rockstead Technology Limited | 37,951,000 | 5.16% | - Several directors held share options granted on January 24, 2019, with an **exercise price of HK$2.00 per share**[60](index=60&type=chunk) [Corporate Governance](index=30&type=section&id=%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB) The company complied with the Corporate Governance Code, with its Audit, Remuneration, and Nomination Committees chaired by independent directors - The company has complied with the code provisions of the **Corporate Governance Code**[71](index=71&type=chunk) - The **Audit Committee**, comprising three independent non-executive directors, has reviewed this interim financial report[73](index=73&type=chunk) - Independent non-executive directors form the majority in both the **Remuneration Committee** and the **Nomination Committee**[74](index=74&type=chunk)[75](index=75&type=chunk)