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Financial Performance - For the fiscal year ending December 31, 2024, the company reported total revenue of $5,702,949 thousand, a decrease of 11.5% from $6,445,798 thousand in 2023[3]. - Gross profit for the year was $134,640 thousand, up 22.6% from $109,816 thousand in the previous year[3]. - The company incurred a net loss of $20,192 thousand, significantly improved from a loss of $120,773 thousand in 2023[3]. - Basic and diluted loss per share was $0.26, compared to $1.52 in the previous year[4]. - The company reported a pre-tax profit of $33,700,000 for 2024, compared to $25,889,000 in 2023[18]. - The income tax expense for 2024 was $30,703,000, an increase from $17,484,000 in 2023[20]. - The net loss attributable to shareholders was $20.3 million, an improvement from a net loss of $120.7 million in the same period last year, due to enhanced operational efficiency[68]. - The return on equity (ROE) for the period was -1.4%, an improvement from -7.7% in the same period last year, primarily due to reduced losses. The basic loss per share was $0.26[72]. Revenue Breakdown - Revenue from the Asia segment decreased to $2,597,525,000 in 2024 from $3,798,328,000 in 2023, representing a decline of 31.6%[14]. - The Europe segment reported revenue of $1,174,562,000 in 2024, up from $1,050,945,000 in 2023, an increase of 11.7%[14]. - The Americas segment saw revenue increase to $1,930,862,000 in 2024 from $1,596,525,000 in 2023, a growth of 20.9%[14]. - The total segment profit for 2024 was $119,523,000, compared to a loss of $9,549,000 in 2023[14]. Asset and Liability Changes - Total assets decreased to $3,024,727 thousand from $3,458,939 thousand, a decline of 12.6%[5]. - Cash and cash equivalents decreased to $1,516,241 thousand from $1,845,323 thousand, a reduction of 17.9%[5]. - The company’s total equity decreased to $1,463,663 thousand from $1,561,372 thousand, a decline of 6.3%[6]. - Total liabilities decreased to $2,358,360,000 in 2024 from $2,758,064,000 in 2023, a decline of 14.5%[15]. Operational Efficiency and Cost Management - Research and development expenses decreased to $49,965 thousand from $57,108 thousand, reflecting a reduction of 12.5%[3]. - Operating expenses decreased to $142.3 million from $219.4 million, a reduction of $77.1 million, attributed to workforce adjustments and restructuring efforts[68]. - The company is focusing on high-margin industries and clients, terminating unprofitable businesses, and restructuring underperforming operations to enhance efficiency[71]. - Cost-cutting measures are expected to enhance efficiency and maintain financial flexibility, leading to improved financial performance in the first half of 2025 compared to the same period last year[136]. Market and Competitive Landscape - The company is facing competitive pressure in the EMS industry due to overcapacity among peers, leading to price declines despite a normalization of the market and reduced material costs[47]. - The smartphone market showed signs of recovery in 2024 due to inventory replenishment, but intense competition in China and geopolitical issues impacted sales significantly[50]. - The overall smartphone market is experiencing pressure from economic and geopolitical factors, leading to intensified competition and profit erosion[84]. - The geopolitical situation, including the Russia-Ukraine conflict and U.S.-China tensions, is reshaping international trade and impacting supply chains[133]. Strategic Initiatives and Future Outlook - The company aims to optimize capacity utilization while focusing on cost reduction, consolidating locations, and restructuring operations due to the decline in profitability from mainland China operations[45]. - The company is strategically expanding its global footprint with operations in China, India, Vietnam, Taiwan, Mexico, and the United States to maximize production value and enhance supply chain management[47]. - The company is diversifying its business strategy to reduce reliance on mobile business and improve its product portfolio, focusing on smart manufacturing, automotive electronics, and AI solutions[75]. - The company is actively seeking opportunities in smart automation manufacturing, particularly in the automotive and electronics sectors, and has launched an intelligent recycling robot in collaboration with an environmental company[78]. Employee and Governance Matters - The total number of employees in the group decreased to 31,568 as of December 31, 2024, down from 36,657 on December 31, 2023[63]. - The company is committed to employee development, focusing on attracting and retaining talent through competitive compensation, training, and career advancement opportunities[59]. - The company has implemented a performance-based compensation policy to reward good performance, contributions, and productivity[65]. - The company has established a clear division of responsibilities between the Chairman and the CEO to enhance board independence and management balance[143]. Compliance and Regulatory Environment - The company is monitoring compliance with global transfer pricing regulations to ensure operational efficiency and tax risk management[117]. - The implementation of the new VAT law in mainland China, effective January 1, 2026, may affect various business operations, necessitating close monitoring and adjustments to compliance strategies[110]. - The revised Company Law in mainland China will take effect on July 1, 2024, impacting corporate governance, capital contributions, and compliance costs for foreign-invested enterprises[111].

Financial Performance - Revenue for the six months ended June 30, 2024, was $1,895,530 thousand, a decrease of 29.2% compared to $2,676,717 thousand for the same period in 2023[7] - Gross profit for the same period was $28,622 thousand, down 27.8% from $39,621 thousand year-over-year[7] - The company reported a net loss of $31,643 thousand for the six months ended June 30, 2024, compared to a net loss of $49,835 thousand in the prior year, representing a 36.5% improvement[8] - The total comprehensive loss for the period was $56,080 thousand, compared to $202,883 thousand in the same period last year, indicating a substantial reduction in losses[8] - The basic and diluted loss per share for the period was 0.4 US cents, compared to 0.6 US cents in the same period last year[8] - The company reported a net loss attributable to shareholders of $31,578,000, an improvement from a loss of $50,016,000 in the same period of 2023[26] - The company’s loss per share for the period was $(0.10), reflecting the overall financial performance[12] Expenses and Costs - Research and development expenses were $23,799 thousand, a decrease of 10.1% from $26,459 thousand in the previous year[7] - The company incurred interest expenses of $30,318 thousand, an increase of 28.7% from $23,551 thousand in the same period last year[7] - Operating expenses decreased to $73.1 million from $122.3 million, a reduction of $49.2 million, due to restructuring and layoffs[78] - The company incurred a total depreciation expense of $64,708,000, down from $80,211,000 in the same period last year[23] Assets and Liabilities - As of June 30, 2024, total assets amounted to $3,840,184 thousand, an increase from $3,458,939 thousand as of December 31, 2023, representing a growth of approximately 11%[9] - Current liabilities rose to $3,149,700 thousand from $2,736,965 thousand, marking an increase of approximately 15%[9] - The company's equity attributable to owners decreased to $1,501,861 thousand from $1,558,487 thousand, a decline of about 4%[10] - The total equity decreased to $1,504,514 thousand from $1,561,372 thousand, representing a decrease of about 4%[10] Cash Flow and Financing - The net cash used in operating activities for the six months was $(197.37) million, compared to $(628.79) million in the previous year, indicating an improvement[13] - The company raised $1,305.80 million in bank borrowings during the financing activities, compared to $755.74 million in the previous year[13] - The company incurred a net cash outflow of $(49.80) million from investing activities, compared to $(38.24) million in the same period last year[13] - The group's free cash flow was a net outflow of $255 million, compared to an inflow of $10 million on December 31, 2023[106] Revenue Segmentation - Revenue from the Asia segment was $1,067,385,000, down 43.0% from $1,874,505,000 year-over-year[19] - The Americas segment reported revenue of $541,678,000, an increase of 18.8% compared to $455,733,000 in the previous year[19] - The total segment profit for the six months was $25,038,000, significantly up from $5,621,000 in the same period last year[19] Strategic Focus and Market Conditions - The company plans to continue focusing on expanding its manufacturing services in the mobile phone sector, leveraging its vertical integration capabilities[14] - The smartphone market showed signs of improvement in the first half of 2024, driven by the proliferation of 5G and integration of AI technologies, despite facing significant challenges such as market saturation and increased competition[65] - The company is diversifying its business strategy through 5G, IoV, AI, and next-generation communication technologies to reduce reliance on the mobile phone market[83] - The company is actively developing AI hardware and software solutions for industrial automation, contributing to sustainable development through the launch of the FIH Robotics smart recycling robot[84] Employee and Governance - The total number of employees as of June 30, 2024, is 44,519, an increase from 36,657 on December 31, 2023[75] - The company emphasizes employee development and training, focusing on attracting and retaining talent through competitive compensation and a supportive work environment[71] - The company has established a written division of responsibilities between the chairman and the CEO to enhance governance[142] Compliance and Regulatory Environment - The group is committed to compliance with the OECD's BEPS action plan and related local transfer pricing regulations[104] - The revised Company Law in Mainland China will take effect on July 1, 2024, impacting corporate governance, capital contributions, and compliance costs for foreign-invested entities[101] - The new Foreign Investment Law in Mainland China requires adjustments to governance structures and compliance models, potentially increasing legal and regulatory costs[102]

Financial Performance - The company's revenue for the six months ended June 30, 2024, was $1,895,530,000, a decrease of 29.1% compared to $2,676,717,000 for the same period in 2023[13]. - The gross profit for the period was $28,622,000, significantly lower than the previous year's gross profit of $39,621,000, indicating a decline in profitability[2]. - The net loss for the period was $31,643,000, compared to a net loss of $49,835,000 in the same period last year, showing an improvement in loss[4]. - Total revenue for the six months ended June 30, 2024, was $1,895,530,000, a decrease of 29.2% from $2,676,717,000 in the same period of 2023[14]. - Revenue from the Asia segment was $1,067,385,000, down 43.0% from $1,874,505,000 year-over-year[14]. - The Americas segment reported revenue of $541,678,000, an increase of 18.8% compared to $455,733,000 in the previous year[14]. - The company recorded a loss before tax of $29,313,000, slightly improved from a loss of $29,601,000 in the same period last year[14]. - The net loss attributable to shareholders was $31,578,000, compared to a loss of $50,016,000 for the same period in 2023[21]. - Operating expenses for the period were $73.1 million, a decrease of $49.2 million from $122.3 million in the same period last year, attributed to layoffs and restructuring efforts[52]. - Other income, gains, and losses for the period amounted to $43.0 million, a decrease of $89.7 million year-on-year, primarily due to the absence of capital gains from property sales[52]. Assets and Liabilities - Total assets as of June 30, 2024, amounted to $3,840,184,000, an increase from $3,458,939,000 as of December 31, 2023[5]. - Current liabilities increased to $3,149,700,000 from $2,736,965,000, indicating a rise in short-term financial obligations[6]. - The company's cash and cash equivalents were $1,705,805,000, down from $1,845,323,000 at the end of 2023, reflecting a decrease in liquidity[5]. - The group reported total trade receivables of $843,562 million as of June 30, 2024, down from $958,516 million as of December 31, 2023[26]. - Total trade and other payables increased to $1,849,124 million as of June 30, 2024, from $1,643,013 million as of December 31, 2023[29]. - Bank borrowings rose to $865,800 million as of June 30, 2024, compared to $703,676 million as of December 31, 2023, with interest rates ranging from 5.88% to 8.07%[30]. Research and Development - Research and development expenses were $23,799,000, a decrease from $26,459,000 in the previous year[14]. - The company has implemented a "2+2" strategy to actively expand into automotive electronics, robotics, artificial intelligence, and next-generation communication technologies, achieving significant progress in these areas[35]. - Significant milestones were achieved in automotive electronics and AI robotics solutions, improving vehicle safety and efficiency[37]. - The company is investing in next-generation communication technologies, including LEO ground user terminals and 6G non-terrestrial network technologies[40]. Market and Strategic Focus - The global economic environment remains complex, with moderate growth but ongoing challenges, particularly in major economies like the US and China, which are experiencing uneven recovery patterns[36]. - The company acknowledges that its past operating performance has shown volatility and may continue to fluctuate significantly from one period to another[33]. - The company is diversifying its business strategy through 5G, IoV, AI, and next-generation communication technologies to reduce reliance on the smartphone market[57]. - The company is actively expanding overseas production capacity to meet customer demand and diversify its customer and product base[85]. Customer and Supplier Relations - The company's top five customers accounted for approximately 85.30% of total revenue during the first half of 2024[38]. - Revenue from Hon Hai Technology Group, including Hon Hai and Sharp Corporation, represented about 30.79% of total revenue[38]. - The top five suppliers represented about 44.6% of the company's total procurement, reflecting a strategic integration approach to ensure procurement efficiency and favorable commercial terms[41]. Employee and Organizational Development - Employee development is a key focus, with the company emphasizing equal employment opportunities, competitive compensation, and a supportive work environment to attract and retain talent[44]. - The total number of employees in the group was 44,519, an increase from 36,657 as of December 31, 2023[48]. - The company has implemented competitive compensation policies and annual bonuses to retain employees in a challenging labor market[48]. - The company has strengthened partnerships with universities and educational institutions to create a stable talent pipeline[47]. Governance and Compliance - The financial statements were prepared in accordance with International Financial Reporting Standards, ensuring compliance with accounting regulations[10]. - The audit committee has reviewed the unaudited consolidated financial statements for the period and recommended their approval to the board[90]. - The company has adhered to all provisions of the Corporate Governance Code, with the exception of the separation of roles between the Chairman and the CEO, which has been maintained since January 1, 2017[91]. - The Board has decided to appoint Mr. Chi Yu Yang as the Chairman and Mr. Lin Chia Yi as the CEO, effective July 1, 2024, to enhance corporate governance and ensure a balance of power[91]. Economic and Market Challenges - The company faces ongoing challenges from weak demand and market saturation, with a focus on high-margin sectors and cost-cutting measures[54]. - The company anticipates that the challenging conditions in the Asia division will persist into 2024, affecting performance and recovery[61]. - The ongoing geopolitical tensions and high inflation rates are expected to impact consumer spending and overall demand for smartphones[82]. - The ODM/OEM/EMS industry faces challenges such as rising domestic production costs and a shortage of skilled labor, impacting profitability[79].

Financial Performance - Fiscal year 2023 revenue decreased to $6,446 million, down $2,948 million or 31.4% from $9,394 million in 2022[18]. - Loss attributable to owners for 2023 was $120.7 million, compared to a loss of $72.1 million in 2022[18]. - Basic loss per share for 2023 was 1.52 cents[18]. - The group recorded a consolidated net loss during the period, with expectations for this trend to continue at least until the first half of 2024[37]. - The company reported audited consolidated results for the year ending December 31, 2022[35]. - The company reported consolidated revenue of $2,677 million for the first half of 2023, a decrease of $1,448 million or 35.1% compared to $4,125 million in the same period last year[98]. - The company confirmed consolidated revenue of $6,446 million for the period, down $2,948 million or 31.4% from $9,394 million in the same period last year[104]. - Gross profit decreased to $110 million, down $82 million from $192 million in the same period last year, resulting in a gross margin of 1.70%, down from 2.04%[105]. - The expected credit loss provision for the year is $133.8 million, significantly up from $80.5 million in the same period of 2022[73]. - The cumulative amount of expected credit loss provisions reached $225.3 million as of December 31, 2023, compared to $80.5 million in the previous year[113]. Market Challenges - The operating environment for fiscal year 2024 is expected to remain challenging with significant uncertainties[19]. - The company faces challenges related to customer demand fluctuations, extended replacement cycles, and potential delays or cancellations of new projects[39]. - The smartphone market is facing challenges due to economic downturns and prolonged replacement cycles, leading to increased competition and reduced demand visibility[56]. - The company has faced significant market challenges since late 2017, with declining profit margins and demand continuing into 2023, attributed to a saturated mobile phone market and increased price sensitivity among customers[44]. - The company is experiencing downward pressure on profit margins as clients push for lower prices due to their declining profitability[57]. - The company is actively managing risks, capital structure, and operational costs to remain competitive and flexible in a challenging economic environment[52]. - The company is facing challenges from high inflation, high interest rates, and currency depreciation in emerging markets, which are affecting consumer demand[102]. - The competitive landscape in the EMS industry remains challenging, with many players facing declining operating profit margins due to pricing pressures and excess capacity[106]. Strategic Initiatives - The company continues to implement a light-asset strategy and reorganize global facilities to allocate resources to productive assets[18]. - The company is diversifying into new markets such as automotive electronics, robotics, and artificial intelligence to reduce reliance on the volatile mobile phone market[18]. - The company is focusing on maintaining financial stability while seeking growth opportunities amid challenging market conditions[19]. - The company is committed to optimizing resource allocation and improving operational efficiency to mitigate profit erosion[19]. - The company has invested heavily in research and development to drive innovation and transition into new fields[18]. - The company is focusing on three future industries: electric vehicles, digital health, and robotics, alongside three core technologies: artificial intelligence, semiconductors, and next-generation communications[24]. - The company is actively developing core technologies in artificial intelligence and is investing in the robotics industry as part of its long-term business strategy[24]. - The company is committed to enhancing its manufacturing technology and vertical integration services to provide better quality and lower costs[41]. Leadership and Governance - The company appointed Mr. Chi Yu-Yang as the acting chairman since January 1, 2017, with over 44 years of experience in the telecommunications industry[22]. - Dr. Guo Wen-Yi joined the company as an executive director on June 29, 2018, and has over 29 years of experience in wireless communication product development and international business[23]. - Mr. Lin Chia-Liao was appointed as an executive director on March 10, 2023, and has over 27 years of experience in the communications and computer industry, focusing on high-end smartphone development[24]. - The company’s leadership team has extensive experience in risk management and engineering, contributing to its strategic decision-making[22][23][24]. - The company continues to strengthen its board with experienced professionals to enhance governance and operational efficiency[30]. Operational Efficiency - The company is focused on expanding its market presence and enhancing its product offerings through innovation and strategic partnerships[36]. - The company is committed to improving operational management and efficiency, including talent development and R&D capabilities[60]. - The company is focusing on optimizing production processes and reducing waste to improve manufacturing value-added (MVA) and lower costs[56]. - The company is enhancing its capabilities in innovative design solutions to address the evolving needs of target markets[54]. - The company is committed to providing cost-effective and vertically integrated global supply chain solutions to meet varying production demands[55]. Economic and Geopolitical Factors - Various risks affecting future performance include geopolitical tensions, inflation pressures, and market saturation, which could lead to significant deviations from projected results[39]. - The ongoing geopolitical tensions, including the US-China trade war and the Russia-Ukraine conflict, have created significant uncertainty in the global economic landscape[47]. - The Federal Reserve has raised interest rates 11 times since 2022, reaching a range of 5.25% to 5.5%, the highest in 22 years, impacting consumer purchasing power and demand[46]. - The macroeconomic environment remains challenging, with high inventory levels leading to conservative budgeting and procurement among customers[142]. Workforce and Employee Engagement - The company has established a global R&D team with offices in China, Taiwan, India, and Vietnam to support significant business growth opportunities, including new technologies and materials[91]. - Employee development is a key focus, with the company emphasizing internal training and attracting external talent to enhance competitiveness[85]. - The HR department has ensured 100% timely payment of employee provident fund and pension contributions, safeguarding employee financial welfare[90]. - In 2023, the company resolved 86% of approximately 300 employee feedback issues, with 14% still in progress[87]. - The company has conducted 50 "workshop tours," addressing 551 employee concerns, with 92% resolved and 8% still being processed[87]. Investment and Future Outlook - The company is focusing its investment strategy on sectors with significant potential, including 5G, IoV, medical electronics, and artificial intelligence[172]. - The company is actively exploring potential investment opportunities to enhance its portfolio value, although no significant investment plans have been established at this stage[171]. - The company is committed to achieving net-zero emissions by 2050 and prioritizing green investments[172]. - The company is continuously evaluating the impact of new laws and regulations in its operating regions, including China, India, and Vietnam[175]. - The smartphone market is expected to recover with low single-digit percentage growth in 2024, driven by generative AI applications, and the penetration rate of 5G smartphones is projected to reach 60%[195].

Financial Performance - The company's total revenue for the year ended December 31, 2023, was $6,445.8 million, a decrease of 31.2% compared to $9,394.3 million in 2022[2]. - The gross profit for the year was $109.8 million, down from $191.9 million in the previous year, reflecting a gross margin decline[2]. - The net loss for the year was $120.8 million, compared to a net loss of $72.1 million in 2022, indicating a worsening financial performance[3]. - The basic loss per share for the year was $1.52, compared to a loss of $0.91 per share in the previous year, highlighting increased losses on a per-share basis[3]. - The total comprehensive loss for the year was $220.0 million, compared to a total comprehensive loss of $377.5 million in 2022, showing some improvement in overall financial health[3]. - The group reported a loss before tax of $99,904,000 in 2023, compared to a loss of $59,684,000 in 2022[13]. - The group recorded a pre-tax profit of approximately $6.2 million from the sale of properties in December 2022 and $78.5 million in April 2023[55]. - The group reported consolidated revenue of $2,677 million for the first half of 2023, a decrease of $1,448 million or 35.1% compared to $4,125 million in the same period last year[119]. - The company reported consolidated revenue of $6,446 million for the period, a decrease of $2,948 million or 31.4% compared to $9,394 million in the same period last year[125]. - The decline in sales was attributed to weak consumer demand amid a global economic slowdown, geopolitical uncertainties, and rising living costs[125]. Assets and Liabilities - Non-current assets decreased to $860.5 million in 2023 from $1,023.4 million in 2022, primarily due to a reduction in property, plant, and equipment[4]. - Current assets fell to $3,458.9 million in 2023, down from $4,486.9 million in 2022, driven by a decline in inventory and trade receivables[4]. - Total liabilities decreased to $2,736.0 million in 2023 from $3,708.4 million in 2022, reflecting improved financial management[4]. - The group's total assets decreased to $4,319,436,000 in 2023 from $5,510,290,000 in 2022, representing a decline of 21.6%[14]. - The total liabilities decreased to $1,643,013,000 in 2023 from $2,704,356,000 in 2022, indicating a reduction of approximately 39.2%[36]. Cash Flow and Liquidity - The company's cash and cash equivalents increased slightly to $1,845.3 million in 2023 from $1,825.1 million in 2022, indicating stable liquidity[4]. - Cash and bank deposits increased to $1,706,572,000 in 2023 from $1,660,599,000 in 2022, showing a growth of 2.8%[14]. - Cash received from factoring arrangements under financial institutions was $1,780,174,000 in 2023, down from $2,402,526,000 in 2022, indicating a decrease of about 26%[33]. Taxation and Deferred Tax - The income tax expense for the year was $20,869,000, compared to $12,451,000 in the previous year, reflecting an increase of approximately 67.9%[20]. - The effective tax rate for the company's subsidiaries in China is 25%, with certain subsidiaries eligible for a reduced rate of 15% due to high-tech enterprise certification[21]. - The total deferred tax liabilities were $11.24 million in 2023, significantly up from $3.75 million in 2022, resulting in a net deferred tax balance of $(7.55) million[29]. - The company reported unutilized tax losses of approximately $2.05 billion as of December 31, 2023, slightly down from $2.08 billion in 2022[30]. Operational Performance - The group has adopted new International Financial Reporting Standards (IFRS) effective from January 1, 2023, including IFRS 17 related to insurance contracts[6]. - The group has implemented IFRS 1 and IFRS Practice Statement 2 amendments, which clarify the disclosure of significant accounting policies, without major impact on financial performance[10]. - The group’s operations are categorized into three segments based on customer location: Asia, Europe, and the Americas[11]. - The group is focusing on cost reduction strategies to maintain profitability amid a challenging market[55]. - The group is actively restructuring its business to reduce idle assets and improve operational efficiency[55]. Market Conditions and Economic Outlook - Global economic growth is projected to slow from 3.5% in 2022 to 3% in 2023, significantly below historical averages[56]. - The global electronics industry continues to experience weak growth, with manufacturing output declining for seven consecutive months[56]. - The company faces various risks and uncertainties that could significantly impact actual performance, including geopolitical tensions and macroeconomic changes[49]. - The company is implementing a "China +1" strategy to mitigate risks associated with reliance on a single market[50]. - The company anticipates challenges related to customer demand fluctuations and potential delays in new projects[50]. Customer and Market Strategy - The company is focused on maintaining existing customer relationships while also seeking new clients amid competitive pressures[50]. - The company aims to diversify its revenue sources and reduce reliance on single customers and regions to mitigate concentrated risks[64]. - The company is actively expanding its customer base and has established a dedicated business development team to identify new clients with strong growth potential and financial stability[80]. - The company is exploring new business opportunities and strategies to maintain competitive differentiation in a challenging market environment[59]. Supply Chain Management - The company aims to enhance supply chain management through diversified sourcing and increased flexibility, which has become a key focus area[54]. - The company has implemented a comprehensive supply chain management system to mitigate risks associated with supply disruptions[96]. - The company continuously monitors material and component supply conditions and price fluctuations[96]. - The group has established contingency plans to address ongoing supply challenges and has shared relevant information with customers[97]. Employee and Corporate Governance - The company emphasizes the importance of employee development and retention, focusing on providing equal employment opportunities and competitive compensation[105]. - The company has achieved 100% compliance in timely payment of employee provident fund and retirement contributions[110]. - The company has a strong focus on corporate social responsibility, demonstrated by over 200 employees participating in a blood donation event[107]. - The total number of employees as of December 31, 2023, is 36,657, down from 44,055 on December 31, 2022[112]. Research and Development - Continuous investment in R&D is aimed at enhancing capabilities and supporting significant business growth opportunities[112]. - The company is committed to investing in research and development to improve its operational advantages[124]. - The company is enhancing its R&D capabilities and plans to invest more in local product design and development teams to strengthen its ODM service offerings[152]. Environmental and Social Responsibility - The company is committed to using environmentally friendly materials and technologies in its production processes[76]. - The company continues to prioritize environmental, social, and governance (ESG) measures, including hiring and promoting women employees[153]. Strategic Partnerships and Collaborations - The company has established strong after-sales services in North America, providing end-to-end value-added manufacturing and after-sales services covering the entire product lifecycle[172]. - The company is exploring opportunities in the MIH open electric vehicle alliance for product development and exports[155]. - The company is collaborating with a customer in the electric vehicle (EV) sector to manufacture LTE clusters for two-wheeled electric vehicles, with shipments expected to begin in early 2024[172].

Financial Performance - For the six months ended June 30, 2023, the company reported revenue of $2,676.7 million, a decrease from $4,125.3 million in the same period of 2022, representing a decline of approximately 35.2%[10]. - The cost of sales for the same period was $2,637.1 million, down from $4,043.6 million, resulting in a gross profit of $39.6 million compared to a gross profit of $81.7 million in 2022[10]. - The company incurred a loss before tax of $29.6 million, compared to a loss of $19.0 million in the prior year, indicating a worsening financial performance[10]. - The net loss attributable to the owners of the company for the period was $50.0 million, compared to a loss of $23.8 million in the same period last year, reflecting an increase in losses of 110.5%[12]. - The total comprehensive loss for the period was $202.9 million, compared to a total comprehensive loss of $220.6 million in the previous year, showing a slight improvement[12]. - The company reported a basic loss per share of $0.6 cents, compared to a loss of $0.3 cents per share in the same period of 2022, reflecting a deterioration in per-share performance[12]. - The company recognized a fair value loss on investments amounting to $78.9 million for the period, compared to a loss of $61.8 million in the previous year, highlighting challenges in investment performance[11]. - The company reported a consolidated revenue of $2,677 million for the first half of 2023, a decrease of $1,448 million or 35.1% compared to the same period last year[155]. - The gross profit margin for the period was 1.48%, down from 1.98% in the previous year, primarily due to weakened smartphone demand and intense competition[169]. - The company recorded a net loss attributable to shareholders of $50 million, compared to a net loss of $23.8 million in the same period last year[169]. Assets and Liabilities - As of June 30, 2023, total assets were reported at $3,765.3 million, a decrease from $4,486.9 million in the previous year, indicating a decline in asset value[13]. - Total assets decreased from $1,801,858 thousand to $1,595,163 thousand, a decline of approximately 11.5%[15]. - Current liabilities increased to $2,704,356 thousand, with a notable rise in bank borrowings to $676,054 thousand[15]. - Shareholders' equity attributable to the company decreased from $1,781,653 thousand to $1,577,164 thousand, a reduction of about 11.5%[16]. - Cash and cash equivalents decreased from $1,825,109 thousand to $1,241,398 thousand, a decline of approximately 32%[14]. - The company has a total of $3,074,080 thousand in current assets, down from $3,708,432 thousand, a decrease of approximately 17%[15]. - The total amount of trade and other receivables as of June 30, 2023, was USD 1,518,805,000, compared to USD 1,905,645,000 as of December 31, 2022[53]. - The group recognized an expected credit loss provision of USD 142,131,000 for trade receivables as of June 30, 2023, an increase from USD 91,668,000 as of December 31, 2022[55]. Cash Flow and Investments - The net cash used in operating activities for the six months ended June 30, 2023, was $(628,791) thousand, compared to $(212,759) thousand for the same period in 2022, indicating a significant decline in operational cash flow[19]. - The net cash used in investing activities was $(38,239) thousand for the six months ended June 30, 2023, compared to $(91,947) thousand in the previous year, showing an improvement in cash outflow for investments[18]. - Cash and cash equivalents decreased by $(559,484) thousand during the six months ended June 30, 2023, compared to a decrease of $(131,343) thousand in the same period of 2022[18]. - The financing activities generated a net cash inflow of $107,546 thousand for the six months ended June 30, 2023, compared to $173,363 thousand in the same period of 2022, indicating a decrease in financing cash flow[18]. - The company reported a cash outflow of $(35,235) thousand for the purchase of property, plant, and equipment in the first half of 2023, down from $(59,241) thousand in the same period of 2022[19]. Market Conditions and Economic Outlook - The smartphone market is experiencing a decline in demand and production, particularly in emerging markets like Southeast Asia and Africa, due to the strong U.S. dollar making phones more expensive[99]. - High inflation and geopolitical tensions are suppressing consumer spending, leading to a cautious approach in order placements by customers[100]. - The company anticipates ongoing volatility in its operational performance, particularly influenced by seasonal factors and market conditions[91]. - The company is diversifying its business risks by expanding into product categories beyond smartphones[102]. - The ongoing geopolitical tensions and the impact of the Ukraine crisis have led to a significant decline in global demand for Chinese goods[102]. - The smartphone market is facing significant challenges due to economic downturns, with consumer spending being highly cautious, particularly in low-cost and prepaid segments[132]. - The company is closely monitoring global news and planning cautiously to address uncertainties and potential recession risks in the second half of 2023[188]. Operational Strategies and Restructuring - The company has been actively restructuring its operations and reducing costs to improve efficiency and adapt to uncertain demand conditions, with ongoing efforts to streamline operations into 2023[97]. - The company is focusing on diversifying revenue contributions from mobile phones to mitigate risks associated with reliance on single customers, products, and regions[104]. - The company is committed to business diversification and transformation to enhance long-term sustainability and competitiveness in the OEM/ODM sectors[105]. - The company is actively managing risks through strategies related to capital structure, cost control, and operational efficiency to adapt to the current volatile environment[105]. - The company is undergoing significant layoffs in North China to optimize personnel allocation due to declining demand and high inventory levels[192]. Research and Development - Research and development expenses for the period were $26.5 million, down from $37.4 million in the previous year, indicating a reduction in R&D investment[10]. - The company is investing in R&D capabilities to meet the evolving demands of customers in terms of performance, cost, and time-to-market[105]. - The company is expanding its global design team to provide flexible solutions and expertise aimed at reducing overall product costs and accelerating time-to-market[105]. - The company is committed to enhancing its R&D capabilities by investing in a global R&D team across China, Taiwan, India, and Vietnam to support significant business growth opportunities[151]. Customer Relationships and Sales - The company has established long-term relationships with four of its top five customers for over five years, indicating a stable revenue stream despite market fluctuations[133]. - The group has established a dedicated business development team to expand its customer base, focusing on new customers with good market growth potential and long-term relationship stability[128]. - The company is focusing on maintaining long-term partnerships with customers, suppliers, and logistics partners to navigate business challenges[145]. - The company is actively seeking to optimize order utilization and reduce costs by terminating unprofitable services[108]. Employee Management and Corporate Governance - The total number of employees as of June 30, 2023, was 42,575, down from 44,055 on December 31, 2022, resulting in a total employee cost of $132 million for the period, a decrease from $187 million in the first half of 2022 and $184 million in the second half of 2022[151]. - The company has implemented a new share plan and a new stock option plan approved by shareholders on May 19, 2023, allowing the board to grant share rewards or stock options to eligible employees[152]. - The employee turnover rate is maintained between 15% to 18%, which is better than competitors, reflecting strong employee retention strategies[149]. - The company has upgraded its salary and performance evaluation systems in 2023 to enhance operational efficiency[148]. Future Plans and Spin-off - The company plans to spin off its Indian subsidiary BFIH, one of India's largest electronic manufacturing service providers, and aims for an independent listing on major Indian stock exchanges[184]. - A special cash dividend will be proposed to shareholders, amounting to no less than 40% of the net proceeds from the sale of BFIH's existing equity shares, contingent upon the successful completion of the spin-off[184]. - The spin-off timeline has been delayed due to current market conditions, with intentions to proceed when the market improves[185].

Financial Performance - The company reported a revenue of $2,676,717 thousand for the six months ended June 30, 2023, compared to $4,125,264 thousand for the same period in 2022, representing a decrease of approximately 35.2%[2]. - Gross profit for the current period was $39,621 thousand, down from $81,679 thousand in the previous year, indicating a decline of about 51.5%[2]. - The net loss for the period was $23,823 thousand, compared to a loss of $49,835 thousand in the same period last year, showing an improvement of approximately 52.2%[4]. - The group reported a consolidated net loss during the six-month period ending June 30, 2023, with expectations of continued losses for the remainder of the year[54]. - The company reported a basic loss per share of $0.6 cents for the current period, compared to $0.3 cents in the previous year, reflecting a worsening in per-share performance[4]. - The group reported a loss before tax of $29,601,000 for the six months ended June 30, 2023, compared to a loss of $18,968,000 for the same period in 2022[18]. - The company’s basic and diluted loss per share for the six months ended June 30, 2023, was $50,016,000, compared to $23,780,000 for the same period in 2022[25]. - The company’s return on equity (ROE) for the period was negative 3.2%, compared to negative 1.2% in the same period last year, indicating an increase in losses[174]. Assets and Liabilities - Total assets as of June 30, 2023, were $3,765,275 thousand, down from $4,486,932 thousand as of December 31, 2022, reflecting a decrease of about 16.1%[5]. - Current liabilities amounted to $3,074,080 thousand as of June 30, 2023, compared to $3,708,432 thousand at the end of 2022, a reduction of approximately 17.1%[6]. - The company’s cash and cash equivalents were $1,241,398 thousand as of June 30, 2023, down from $1,825,109 thousand at the end of 2022, representing a decrease of about 32.0%[5]. - The total liabilities decreased to $2,043,359 thousand as of June 30, 2023, from $2,704,356 thousand as of December 31, 2022, indicating a reduction of 24.4%[39]. - Trade receivables as of June 30, 2023, amounted to $1,372,182,000, down from $1,744,534,000 as of December 31, 2022[35]. - The total amount of trade receivables and other receivables as of June 30, 2023, was $1,518,805,000, compared to $1,905,645,000 as of December 31, 2022[35]. Market and Economic Conditions - The smartphone market in China declined by 12% in Q1 2023, driven by weak demand and changing consumer preferences towards travel and entertainment rather than purchasing smartphones[68]. - The company is facing a decline in consumer demand for smartphones, particularly in emerging markets like Southeast Asia and Africa, due to the strengthening of the U.S. dollar[63]. - The overall economic slowdown, slow recovery in China, rising youth unemployment, and increased inventory levels are key factors contributing to the decline in smartphone sales in 2023[68]. - The smartphone market is currently characterized by reduced demand and ongoing competitive pressure, with excess inventory affecting OEMs and ODMs[178]. - The company is experiencing challenges in production planning due to shortened demand visibility and cautious outsourcing strategies from customers[152]. - The global smartphone market is facing issues of oversupply and intense competition, resulting in declining pricing and profit margins[149]. Strategic Initiatives - The company plans to focus on market expansion and new product development in the upcoming quarters, aiming to enhance revenue streams[3]. - The company is exploring potential mergers and acquisitions to strengthen its market position and drive future growth[3]. - The company is committed to its growth and diversification strategies, despite potential obstacles that may arise[56]. - The company aims to diversify its customer base and product offerings to better predict and respond to changing demand patterns[81]. - The company is actively seeking more orders to optimize utilization rates, as low production levels lead to substantial unabsorbed production costs[80]. - The company is focusing on effective cost management and operational efficiency to mitigate the impact of rising costs due to inflation[65]. Research and Development - Research and development expenses for the current period were $39,621 thousand, compared to $50,744 thousand in the previous year, indicating a reduction of approximately 22.0%[2]. - The company is committed to investing in research and development to enhance its business development capabilities[172]. - The company is focused on developing R&D capabilities and enhancing end-to-end service products, particularly in India and Vietnam[84]. Supply Chain and Operations - The company emphasizes the importance of supply chain management to ensure efficient delivery of components and materials[76]. - The company is committed to simplifying production processes and improving operational efficiency to enhance manufacturing value-added (MVA)[77]. - The company is actively building strong relationships with suppliers to negotiate favorable pricing terms and explore alternative sourcing options[76]. - The company has implemented effective internal controls and enterprise risk management systems to assess and control potential risks related to reliance on major customers and suppliers[120]. Employee and Workforce Management - The total number of employees as of June 30, 2023, was 42,575, a decrease from 44,055 on December 31, 2022[135]. - Employee costs for the period amounted to $132 million, down from $187 million in the first half of 2022 and $184 million in the second half of 2022, primarily due to workforce optimization[135]. - The company has implemented various employee engagement measures, resulting in a 15% to 20% increase in management learning trends[133]. - The company is committed to maintaining long-term relationships with customers, suppliers, and logistics partners during challenging times[125]. Future Outlook - The company plans to spin off its Indian subsidiary BFIH and list it independently on major Indian stock exchanges[176]. - The company intends to distribute a special cash dividend to shareholders, amounting to no less than 40% of the net proceeds from the proposed spin-off of BFIH[176]. - The company acknowledges ongoing geopolitical tensions and inflation as significant challenges impacting its performance[173]. - The company will closely monitor market conditions and adjust its dividend policy as necessary based on business outlook and financial performance[175].

Financial Performance - Revenue for 2022 increased to $9,394 million, up by $812 million or 9.5% compared to 2021[5] - Net loss attributable to shareholders in 2022 was $72.1 million, compared to a profit of $56.3 million in 2021[5] - Basic loss per share in 2022 was $0.0091[5] - The company recorded a consolidated net loss during the reporting period due to challenges including the COVID-19 pandemic and other adverse impacts on its operations[19] - The company's performance has historically been volatile and may continue to fluctuate significantly from period to period, with Q1 typically being less representative due to the Chinese New Year holiday[19] - The company recorded a comprehensive operating income of $9.394 billion, a 9.5% increase from the previous year's $8.583 billion, but reported a net loss of $72.1 million compared to a net profit of $56.3 million in the previous year[106] - The company's gross margin decreased to 2.04% from 2.61% in the previous year, impacted by weak smartphone demand and low margins in system assembly business[106] - The company's return on equity (ROE) for the period was -4%, compared to 2.6% in the same period last year, reflecting a loss[117] - The company reported a basic loss per share of $0.0091 for the period[117] Business Strategy and Diversification - The company is focusing on improving profit margins rather than revenue growth, targeting diversification into new areas such as IoV, IoT, AR/VR, AI, and big data[5] - The company is implementing a light-asset strategy, reallocating resources to productive assets and restructuring to achieve long-term cost reduction[5] - The company is prioritizing low-risk orders from reputable clients to mitigate payment recovery risks[5] - The company is leveraging its expertise in wireless technology, product design, and lean production to transition into new business areas[5] - A series of business development activities have been initiated, with the company expecting significant returns in the near future[5] - The company is focusing on efficiency, cost control, and maintaining financial resources to navigate global challenges and market dynamics[6] - The company is diversifying its revenue streams to reduce reliance on a single customer, product, and region, amid slowing global smartphone growth[33] - The company is focusing on diversifying and transforming its business, expanding overseas operations, and improving efficiency to enhance long-term sustainability[34] - The company is actively managing risks, strategies, capital structure, and costs to prepare for uncertain demand environments, including reducing redundant assets and optimizing staffing[34] - The company is leveraging its R&D capabilities in materials and processes to provide customized manufacturing solutions, aiming to reduce overall product costs and accelerate time-to-market for clients[34] - The company is closely monitoring global economic conditions, geopolitical tensions, and the impact of the Russia-Ukraine conflict to adapt its strategies and operations[34] - The company is expanding its ODM business and seeking new clients in different geographic regions to diversify its customer base and reduce dependency on a limited number of clients[104] - The company is exploring new business opportunities in China, India, and the US, while paying attention to market conditions and increasing competition to maintain its industry position and competitiveness[104] - The company is transitioning to a leaner, asset-light business model, reducing non-core investments, and restructuring underperforming manufacturing segments[116] - The company is focusing on reducing operating expenses, optimizing workforce, and improving internal operational efficiency, including manufacturing processes, supply chain management, and cost control[115] - The company is expanding production capacity and R&D/ODM capabilities in India and Vietnam, while increasing local procurement in India to meet demand in developing markets like India and Africa[114] Leadership and Governance - Chi Shangyang, aged 64, has been the acting Chairman since January 1, 2017, and joined the company as an Executive Director in August 2009. He is also the CEO and Chairman of the Corporate Governance Committee[8] - Chi Shangyang holds multiple leadership roles in subsidiaries, including Chairman of Bharat FIH Limited and Chairman of Qunmao Communications Co., Ltd[8] - Chi Shangyang has over 43 years of experience in the communications industry, including roles at BenQ and ITT Corporation[8] - Dr. Guo Wenyi, aged 57, was appointed as an Executive Director on June 29, 2018, and has over 28 years of experience in wireless communication product development and international business development[9] - Dr. Guo Wenyi is the inventor of 38 U.S. wireless communication patents and has held key positions at Wiscom Technologies and AT&T Labs[9] - Meng Xiaoyi, aged 58, served as an Executive Director until March 10, 2023, and has over 30 years of experience in factory operations and resource optimization[10] - Meng Xiaoyi led the EMS/OEM business, focusing on cross-regional market development and manufacturing operations in Beijing, Langfang, and India[10] - Meng Xiaoyi’s division received the company’s Best Operational Performance Award for three consecutive years[10] - Meng Xiaoyi played a key role in industrial 4.0 smart factory projects and cost reduction initiatives[10] - Meng Xiaoyi served as a non-executive director of BFH from June 10, 2022, to February 3, 2023[10] - Lin Jialiao appointed as Executive Director effective March 10, 2023, bringing over 26 years of experience in the communication and computer industry[11] - Lin Jialiao leads the IDM1 business unit, focusing on innovation, design, manufacturing, and improving financial gross margin and operating profit margin[11] - Lin Jialiao is driving the development of AI core technologies and expanding into the robotics industry under the "3+3" strategy (EV, digital health, robotics, AI, semiconductors, next-gen communication)[11] - Liu Shaomu, Independent Non-Executive Director, has over 40 years of experience in corporate governance, finance, and auditing, and serves on multiple committees[12] - Daniel Joseph Mehan, Independent Non-Executive Director, brings extensive expertise in information systems, cybersecurity, and business management, with over 20 years at AT&T[13] - Tao Yunzhi, Independent Non-Executive Director, specializes in digital transformation consulting and has over 20 years of experience in internet, mobile apps, and emerging markets[14] Market and Industry Challenges - The company expects a turbulent operating environment in 2023, with an uncertain outlook[6] - The company faces risks and uncertainties including macroeconomic changes, currency market fluctuations, market saturation, and increasing competition, which could impact future performance[19] - The company faces significant risks including inaccurate forecasts, seasonal sales factors, increased revenue volatility, and risks related to excess and obsolete inventory[20] - The mobile phone manufacturing industry is highly competitive and saturated, with the company facing severe market conditions and declining profit margins since late 2017, expected to continue through 2023[23] - The company is under pressure to reduce manufacturing costs for low-cost products due to high inflation and rising labor costs, particularly in Vietnam where minimum wages increased in July 2022[23] - The company's gross margins are impacted by the product mix ordered by major clients, with high-volume, low-complexity manufacturing services typically having lower gross margins[23] - The company is focusing on cost reduction without compromising quality, especially in controlling certain supply chain costs, to maintain competitiveness during economic downturns[23] - The company's clients are innovating and launching new products and services to overcome challenges such as thin profit margins, high inflation, and shortened replacement cycles[24] - Low operating profit margins are seen as a significant factor limiting market development, potentially hindering expansion plans[24] - Global smartphone market experienced the lowest annual shipment volume since 2013, with the worst holiday quarter performance ever recorded[25] - China's smartphone market hit a decade low in 2022, while India's market declined by 10%, the lowest since 2019[25] - The company faced challenges due to weak demand, inflation, geopolitical tensions, supply chain constraints, and lockdowns in China, leading to reduced orders for both feature phones and smartphones[25] - The company adjusted its organizational structure to focus on global markets, particularly India and China, to diversify business risks beyond smartphones[25] - Supply chain constraints eased in the second half of 2022 as production capacity and output increased, but the industry shifted to a demand-constrained market with price-sensitive customers[25] - The company struggled with predicting order volumes due to cautious customer behavior, impacting material procurement, staffing, and production scheduling[26] - China's dynamic zero-COVID policy severely disrupted the smartphone supply chain in the first half of 2022, causing delays in new product development and shipments[26] - Material and component supply stabilized in the second half of 2022, but the market demand remained weakened due to labor and material shortages exacerbated by COVID-19 regulations[26] - The company's business was significantly impacted by lockdowns and factory shutdowns due to the highly contagious Omicron variant in the first half of 2022, but managed to minimize the impact through team efforts and support from local governments, customers, suppliers, and logistics providers[27] - China's strict COVID-zero policy, including lockdowns, testing, and quarantine rules, added pressure on consumer and business spending, pushing the economy close to recession[27] - In November 2022, the company faced a severe situation at its production base in northern China due to a COVID-19 outbreak and strict local government lockdowns[28] - China's exports unexpectedly dropped in October 2022 for the first time since May 2020 due to the COVID-zero policy, highlighting the policy's growing impact[28] - The sudden relaxation of COVID-zero measures in December 2022 led to widespread infections, labor shortages, and supply chain disruptions, causing factory production halts[28] - The Russia-Ukraine war caused a sharp rise in global oil, gas, and coal prices, pushing inflation to levels not seen in decades[29] - Ukraine and Russia account for about one-third of global wheat production and one-quarter of barley production, with the war leading to significant price increases for these commodities[29] - The war exacerbated global food shortages, particularly affecting low-income countries in Africa and the Middle East that rely on Ukrainian and Russian wheat[29] - Rising energy, food, and commodity prices, combined with post-pandemic supply chain tensions, increased transportation, logistics, and operational costs for companies worldwide[29] - Inflation rates worldwide surged to levels comparable to the 1970s, damaging consumer and business confidence[29] - Eurozone economic growth has significantly slowed due to high inflation and energy prices, with activity deteriorating notably in the second half of 2022[30] - The Federal Reserve has raised its target interest rate seven times in 2022, from 0%-0.25% to 4.25%-4.50%, with further hikes expected[31] - US CPI reached a 40-year high in June 2022, and although it dropped to 6.5% by December, it remains three times the Fed's 2% target[32] - The World Bank predicts global economic growth of only 1.7% in 2023 and 2.7% in 2024, with risks of a second global recession in the same decade[32] - The prolonged Ukraine-Russia conflict has increased geopolitical risks and supply chain disruptions, particularly affecting Europe's energy dependency[30] - Stronger US dollar has made smartphones more expensive in emerging markets like Southeast Asia and Africa, potentially extending replacement cycles[31] - Central banks' aggressive rate hikes to combat inflation are increasing debt servicing costs for households, businesses, and governments[32] - The company is monitoring the Ukraine conflict's potential long-term impact on its European/African sales and distribution channels[30] - Global smartphone production may further decline due to extended replacement cycles and lack of product differentiation[31] - The company is facing challenges due to prolonged smartphone replacement cycles, market saturation, and macroeconomic headwinds, leading to reduced demand visibility and increased cost pressures[37] - The company is experiencing pressure on profit margins as clients become more price-sensitive and reduce discretionary spending, impacting order predictability and production planning[37] - The company is actively seeking more orders to optimize utilization and mitigate the impact of lower production volumes and unabsorbed fixed costs[37] - The company is adapting to changes in client outsourcing strategies, with some clients reducing outsourcing to optimize their own capacity utilization[37] - The Chinese smartphone market is severely saturated with over 1.6 billion active mobile subscriptions, exceeding the population of 1.4 billion, leading to intense brand competition[38] - A major client's smartphone shipments dropped by 18.7% in 2022, with sales declining to 30.5 million units[38] - The smartphone replacement/upgrade cycle in mature markets like the US and Western Europe has further lengthened due to limited product innovation and differentiation[38] - Global smartphone manufacturers are accelerating the launch of new form factors (e.g., foldable phones, self-developed high-efficiency IC chips, under-display cameras) to stimulate consumer replacement demand[38] - The company faces challenges in accurately estimating future customer demand due to the short-term nature of commitments and rapid changes in product demand[39] - The company is controlling recurring expenses and inventory levels, reducing idle costs, and streamlining production processes to optimize asset and workforce utilization[39] - The company is focusing on improving operational management, cost efficiency, and production processes to enhance learning curves and yield rates[40] - The company is investing in R&D capabilities, talent development, and the use of environmentally friendly materials and technologies to maintain competitiveness[40] - The company is adjusting its service offerings to provide better and more cost-competitive solutions for customer products in the saturated smartphone market[41] - The company believes its long-term business relationships with major clients are a testament to its commitment to quality and delivery, helping clients compete in a challenging and saturated market[41] - The company has relocated its headquarters from Langfang, China to Taipei since March 26, 2021, and continues to focus on expanding its business beyond mainland China[42] - The company is exploring new projects, products, industries, and customer opportunities in different countries to diversify its product lines and customer base[42] - The company is enhancing its automation levels, improving efficiency, and implementing robust cost control measures to strengthen its core capabilities[42] - The company is expanding its operations in India, leveraging its EMS and ODM capabilities to enter high-growth industries such as telecommunications, mechanical components, electric vehicles, TVs, and wearable devices[45] - Bharat FIH Limited (BFIH) operates over 90 production lines across three industrial parks in Andhra Pradesh and Tamil Nadu, employing more than 25,000 workers, with approximately 85% being female employees[46] - BFIH is deepening its localization strategy for manufacturing and sourcing components to reduce reliance on imports and mitigate global supply chain risks[45] - The company is focusing on near-shoring production to reduce dependency on China, with some U.S. clients requesting manufacturing in the U.S./Mexico[43] - BFIH is enhancing its R&D capabilities, with a research center located at the Indian Institute of Technology Madras Research Park, to provide innovative EMS and ODM solutions[46] - The company is diversifying its customer and product portfolio to mitigate risks associated with market competition and supply chain disruptions[42] - BFIH aims to reduce manufacturing costs, improve supply chain management, and shorten product delivery times by expanding its service offerings[45] - BFIH plans to increase investment in R&D capabilities, focusing on vertical integration and providing diversified services to OEMs in the ODM value chain[47] - BFIH aims to establish a strong local product design and development team, enhancing existing R&D resources[47] - BFIH's R&D center provides design and development services for smartphones, IoT, network infrastructure, EV subsystems, and smart TVs[47] - BFIH is strengthening partnerships with startups and e-commerce companies in electronics manufacturing to expand business in the short term[48] - BFIH is exploring opportunities to export mobile phones and wearables to Europe and the US, leveraging India's geographical advantage[49] - BFIH expects to benefit from the Production Linked Incentive (PLI) scheme and export duty exemptions, increasing export opportunities[49] - BFIH's short-term goal in the telecom and network products sector is to gain market share in EMS services and explore export opportunities[49] - BFIH has postponed its planned IPO due to current market conditions, with the intention to proceed when market conditions improve[49] - Vietnam's manufacturing sector is driven by low labor costs, a large and well-educated workforce, and strong foreign direct investment inflows[50] - Vietnam's economy grew by 8.02% in 2022, the fastest annual growth rate since 1997, driven by manufacturing exports and FDI inflows[50] - Vietnam's 2023 GDP growth target is 6.5% with an inflation rate target of 4.5%[51] - Fushan Technology (Vietnam) expanded its business to include home appliances, smartphones, automotive parts, and EV projects, diversifying from traditional mobile manufacturing[52] - Fushan Technology (Vietnam) began its own sales operations in 2022, capturing both local and international business opportunities[52] - The company has been involved in 5G, IoV (Internet of Vehicles), and AI since 2019, leveraging its expertise in software design and hardware development[53] - Mobile Drive, a joint venture with Stellantis, focuses on developing smart cockpit solutions for automotive infotainment systems[53] - The company is restructuring part of its capacity to obtain automotive functional safety certification without significant capital investment[54] - The company provides end-to-end manufacturing capabilities and repair services for mobile devices and smart consumer electronics, enhancing its competitive edge[54] - The company is expanding its production capacity in India and Vietnam to meet the growing demand in these markets[55] - The company is diversifying its customer base and product portfolio to mitigate risks associated with macroeconomic challenges[55] - The company's 5G products are gaining momentum due to the promotion of 5G services by US operators and the affordability of 5G products, with more 5G products appearing in the company's shipments[56] - The company has achieved initial success with top US operators and foresees opportunities to expand its business and product portfolio with more US operators[56] - A major Chinese client's global smartphone shipments in 2022 were 153.2 million units, a 19.8% year-on-year decrease, with a 14% year-on-year increase in sales of high-end smartphones priced at RMB 3,000 and above in China during the third quarter[57] - The company is a strategic supplier to Ensky Technology Pte. Ltd., leveraging its strong engineering and global manufacturing capabilities to meet the client's demands for shorter delivery times and high output rates[58] - Sharp Corporation's smartphone shipments globally decreased by 15.1% and in Japan by 17.2% in 2022, with its ICT division reporting an operating loss of -4.4% due to unfavorable exchange rates[59] - Sharp is focusing on developing eco-friendly mobile phone components using recycled

Financial Performance - Revenue for the six months ended June 30, 2022, was $4,125.264 million, an increase from $3,937.867 million in the same period of 2021, representing a growth of approximately 4.8%[9] - Gross profit for the same period was $81.679 million, with a gross margin of approximately 2%[9] - The company reported a loss before tax of $18.968 million, improving from a loss of $31.414 million in the previous year[9] - The net loss for the period was $23.823 million, compared to a loss of $28.329 million in the prior year, indicating a reduction in losses[10] - Total comprehensive loss for the period amounted to $220.624 million, significantly higher than $16.573 million in the previous year, primarily due to foreign exchange losses[10] - The basic loss per share remained stable at 0.3 cents for both periods[10] - The group reported a pre-tax loss of $(18,968) thousand for the six months ended June 30, 2022, compared to a loss of $(31,414) thousand in the same period of 2021, showing an improvement in financial performance[28] - The net loss for the period was $23,780,000 for the six months ended June 30, 2022, compared to a loss of $28,184,000 for the same period in 2021[38] Expenses and Cost Management - Research and development expenses were $37.446 million, down from $62.687 million in the previous year, reflecting a cost-cutting strategy[9] - The company incurred interest expenses of $7.251 million during the period[9] - The total depreciation expense for the period was $89,048,000, with $71,278,000 capitalized as inventory and $2,773,000 included in research and development expenses[35] - Approximately $4 million was spent on restructuring activities aimed at long-term cost reduction and efficiency improvements[154] - The overall operating expenses for the period were $133 million, down from $166 million in the previous year, indicating a focus on cost control[164] Assets and Liabilities - As of June 30, 2022, total assets amounted to $4,368,248 thousand, a decrease from $4,751,025 thousand as of December 31, 2021, representing a decline of approximately 8.06%[11] - Current liabilities were reported at $3,474,317 thousand, down from $3,778,285 thousand at the end of 2021, indicating a reduction of about 8.04%[13] - The company reported a net asset value of $893,931 thousand, down from $972,740 thousand, reflecting a decline of approximately 8.09%[13] - The total equity attributable to owners of the company was $2,053,324 thousand, a decrease from $2,167,269 thousand, representing a decline of about 5.26%[15] - The company’s bank borrowings increased to $1,041,141 thousand from $857,490 thousand, indicating an increase of approximately 21.39%[13] Market and Sales Performance - Sales to Asia amounted to $2,867,476 thousand, a decrease from $3,451,984 thousand in the previous year, indicating a decline in the Asian market[29] - The company reported sales of goods to a joint venture amounting to $17,707,000 for the six months ended June 30, 2022[82] - The company reported trade receivables from Foxconn's subsidiaries totaling $445,659,000 as of June 30, 2022, compared to $610,426,000 as of December 31, 2021, indicating a decrease of approximately 27%[78] - The company reported a foreign exchange gain of $13.6 million during the period, offsetting some revenue losses[165] Strategic Initiatives and Future Outlook - The company is focusing on expanding its market presence and enhancing product offerings as part of its future strategy[3] - The company plans to continue its market expansion and product development strategies, although specific figures were not disclosed in the conference call[66] - The company is committed to optimizing its capital structure and reducing costs to improve efficiency and cash reserves in response to uncertain demand environments[97] - The company aims to maintain a streamlined, asset-light, and flexible business model while diversifying its customer base and product offerings[169] - The company is actively managing risks related to geopolitical tensions, supply chain disruptions, and the impact of COVID-19 on the smartphone market, which has led to delays in shipments and weakened demand[97] Supply Chain and Operational Challenges - The ongoing supply chain issues, including component shortages and logistics challenges, have exacerbated the already difficult market conditions[90] - The company faces risks related to supply chain disruptions, including component shortages and extended delivery times[87] - The company is exploring a "China plus one" strategy to diversify its supply chain, considering countries like Vietnam, India, and Bangladesh as alternatives[135] - The company is evaluating alternative sourcing options outside the affected regions to maintain production capabilities[131] - The company is committed to strict compliance with local regulations and public health recommendations to ensure operational continuity during the pandemic[161] Employee and Workforce Management - The total number of employees was 55,840, a decrease from 73,993 on December 31, 2021[151] - Total employee costs for the period amounted to $187 million, down from $252 million in the first half of 2021 and $192 million in the second half of 2021, primarily due to workforce optimization[151] - Employee retention remains a challenge, prompting the company to offer competitive compensation, a good working environment, and broader career prospects[151] - The company has implemented various employee welfare programs and community initiatives, strictly adhering to labor laws and factory regulations[150] Research and Development - The company is enhancing its R&D capabilities, focusing on product design and development to engage with OEM clients early in the product lifecycle[101] - The company has established a global R&D team across China, Taiwan, India, and Vietnam to enhance its core capabilities and support significant business growth opportunities[150] - The company is investing in R&D for new smart solutions and electric vehicle supercapacitor modules, with several products already in mass production[200] Environmental and Social Governance - The company is committed to environmental, social, and governance (ESG) initiatives, including hiring and promoting female employees and adhering to environmental compliance standards[102] - The company has implemented health measures for employees, with full vaccination achieved at manufacturing sites in India[138] - The company has introduced a vaccination program and mandatory vaccination proof for new employees to ensure workplace safety amid COVID-19[150]