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]

Financial Performance - The revenue for the year 2021 was $8,583 million, a decrease of $352 million or 3.9% compared to $8,935 million in 2020[7]. - The profit attributable to the owners of the company increased to $56.3 million in 2021, compared to a loss of $173.9 million in 2020[7]. - The basic earnings per share for 2021 was 0.7 cents[7]. - The financial performance for the year ended December 31, 2021, has been audited and is detailed in the consolidated financial statements[24]. - The net profit for the period was $56.4 million, a significant improvement from a net loss of $173.8 million in the previous year[131]. - The gross profit for the period was $224.4 million, an increase of $129.2 million compared to the same period last year, with a gross margin of 2.6%, up from 1.07% year-on-year[139]. - The company reported a consolidated revenue of $8,583 million, a decrease of $352 million or 3.9% compared to $8,935 million in the same period last year[154]. - The group’s Asian segment generated operating revenue of $6,576 million, a decrease of 16.7% from $7,891 million in the same period last year, while profit increased to $126 million from $78 million[159][161]. Strategic Focus and Growth Plans - The company aims to focus on both revenue growth and net profit improvement, particularly in low-risk orders from reputable clients[7]. - The company plans to diversify into new fields such as IoV (Internet of Vehicles), IoT (Internet of Things), AR/VR (Augmented Reality/Virtual Reality), AI (Artificial Intelligence), and big data[7]. - The company is committed to optimizing costs and enhancing supply chain management as part of its growth and diversification strategy[29]. - The company is considering strategic acquisitions to enhance its product offerings and market presence[20]. - The company is focusing on expanding its OEM business and enhancing its manufacturing operations in regions such as Beijing, Langfang, and India[14]. - The company is actively involved in the development of smart factory projects under the Industry 4.0 initiative, aiming to improve production quality and reduce costs[14]. - The company is focusing on maintaining a competitive advantage through global expansion in India and Vietnam, cost competitiveness, and rapid product development cycles[46]. - The company is focusing on deep engineering services and complex smartphone product launches to meet the demands of high-potential customers[175]. Operational Efficiency and Cost Management - The company will continue to enhance efficiency and return rates while controlling overall costs and operating expenses to mitigate profit decline pressures[8]. - The company is implementing a light-asset strategy and reallocating resources to productive assets to strengthen its competitive position[6]. - The company is committed to improving internal operational efficiency and reducing manufacturing costs through better supply chain and quality management[144]. - The group aims to enhance automation, optimize asset utilization, and control manufacturing overheads to improve efficiency and maintain stable returns[157]. - The group is focusing on maintaining a lean and asset-light business model, prioritizing profit margin improvement over revenue growth[158]. - The company has implemented various strategies to mitigate component shortages, including closer communication with suppliers and adjusting procurement cycles[114]. Market Trends and Challenges - The global smartphone market shipped 1.35 billion units in 2021, reflecting a conservative year-on-year growth rate of 5.7% compared to 2020, amid ongoing component shortages and rising logistics costs[40]. - The ongoing global semiconductor shortage is expected to impact the supply of common electronic components, with price increases and extended order times anticipated to persist into 2022[44]. - The smartphone market has faced challenges with a decline in global shipments for five consecutive years since 2016, exacerbated by component shortages and the COVID-19 pandemic[154]. - The semiconductor supply shortage is anticipated to persist, with analysts predicting that supply chain delays caused by COVID-19 will last at least another year[163]. - The competitive landscape is shifting as several competitors are expanding into high-margin and high-growth businesses outside of mobile products[185]. Employee and Corporate Culture - The company expresses gratitude to its employees for their resilience and teamwork in facing unprecedented challenges in 2021[10]. - The company emphasizes employee training and development, with a focus on enhancing skills and productivity, particularly in its Indian facility, which offers better promotion opportunities and salary increases than industry standards[121]. - The company has created a positive corporate culture that fosters creativity and innovation among employees, supporting collaboration with clients and startups[123]. - The company has focused on attracting and retaining skilled employees by offering competitive compensation and a supportive work environment[120]. Research and Development - The company is investing in new technology development, allocating $50 million towards R&D initiatives[20]. - The company is committed to improving its research and development capabilities to meet the evolving needs and product design requirements of its customers[41]. - The company has invested resources to enhance R&D capabilities in mobile devices, particularly in cellular embedded products, and successfully entered the U.S. market in 2021[54]. - The group is focusing on vertical integration and optimizing production capacity in China, India, and Vietnam to develop new IoT and automotive electronic products[190]. Supply Chain and Logistics - The company has faced operational challenges due to the COVID-19 pandemic, which has impacted its overall performance and profitability during the reporting period[27]. - The logistics costs for exporting goods from China to Europe and the US have significantly increased due to a shortage of truck drivers in Europe, exacerbating delivery issues and leading to higher product prices[34]. - The company has implemented emergency plans to mitigate supply chain risks and has reserved additional inventory beyond demand[104]. - The impact of power outages in certain regions of China has caused disruptions in the supply chain, but the situation has gradually improved over time[111]. Market Expansion and Customer Base - The company is actively expanding its customer base by identifying new clients with strong market growth potential and financial stability to reduce risk concentration[54]. - The company is exploring opportunities to export products to overseas markets, including the Middle East and Africa, where mobile penetration rates are significantly below the global average[96]. - The smartphone market in India saw a significant year-on-year shipment increase of 42.3% in the first half of 2021, reaching a record of 72 million units shipped[47]. - The group’s sales in India accounted for approximately 27% of total sales during the period, highlighting significant growth in the Indian market[167].

Financial Performance - For the six months ended June 30, 2021, the company reported revenue of $3,937.87 million, an increase of 7.36% compared to $3,668.27 million in the same period of 2020[8]. - The gross profit for the same period was $62.32 million, a significant recovery from a gross loss of $2.67 million in the previous year[8]. - The company incurred a net loss of $28.33 million, improving from a net loss of $101.30 million in the prior year[10]. - The company reported a basic loss per share of $0.30, improving from a loss of $1.20 per share in the previous year[12]. - The group reported a total profit of $75,015,000 for the six months ended June 30, 2021, compared to $26,223,000 in the same period of 2020, indicating a significant improvement[29]. - The group recorded a loss before tax of $31,414,000 for the six months ended June 30, 2021, a reduction from a loss of $86,952,000 in the same period of 2020[29]. - The net loss attributable to the company's owners for the period was $28.2 million, compared to a net loss of $100.5 million in the same period last year[127]. - The net loss margin for the period was 0.72%, an improvement from 2.74% in the previous year[127]. Cash Flow and Liquidity - The company's cash and cash equivalents stood at $1,742.08 million, slightly decreased from $1,779.33 million at the end of 2020[14]. - The net cash used in operating activities for the six months ended June 30, 2021, was $(17,952) thousand, compared to $(190,669) thousand for the same period in 2020, indicating a significant improvement[22]. - The net cash used in investing activities for the six months ended June 30, 2021, was $(49,851) thousand, a decrease from $(90,521) thousand in the same period of 2020, indicating improved cash flow management[22]. - The net cash used in financing activities was $26,569 thousand for the six months ended June 30, 2021, compared to $221,217 thousand in the same period of 2020[22]. - The free cash flow for the period was a net outflow of $72 million, compared to an outflow of $191 million in the previous year[164]. - The group’s cash balance was $1,742 million, a decrease from $1,779 million on December 31, 2020[164]. Assets and Liabilities - Total assets as of June 30, 2021, were $4,487.58 million, down from $4,757.76 million at the end of 2020[14]. - The company’s non-current assets totaled $1,214.95 million, a decrease from $1,274.31 million at the end of 2020[13]. - The total liabilities as of June 30, 2021, were $3,909,286 thousand, an increase from $3,613,544 thousand as of June 30, 2020, reflecting a rise of approximately 8.2%[15]. - The company’s capital and reserves increased from $2,046,796 thousand as of June 30, 2020, to $2,075,432 thousand as of December 31, 2020, marking a growth of about 1.4%[15]. - The total trade payables as of June 30, 2021, were $2,485,045 million, compared to $2,760,474 million as of December 31, 2020[46]. Research and Development - Research and development expenses decreased to $62.69 million from $82.20 million, reflecting a reduction of 23.69%[8]. - The group reported a decrease in research and development expenses to $62,687,000 from $82,200,000 year-over-year, reflecting a strategic focus on cost management[29]. - The company is focusing on enhancing R&D capabilities to support significant business growth opportunities, including new technologies and materials[113]. - The R&D team is continuously innovating in industrial design, audio-visual quality, user experience, and AI technology to maintain competitive advantages[182]. Market and Industry Trends - The global laptop shipment is expected to grow by 22% in 2021, reaching a record 268 million units despite ongoing semiconductor shortages[83]. - The smartphone market in several countries is nearing saturation, leading to price competition and profit erosion across the industry[83]. - The COVID-19 pandemic has accelerated digital transformation, benefiting the electronic consumer products industry significantly[83]. - The competitive landscape in the mobile manufacturing industry remains intense, with frequent changes in order conditions and pricing strategies[83]. - The smartphone market in mature regions like the US and Western Europe is seeing extended upgrade cycles, influenced by limited product innovation and the impact of COVID-19 on economic activities[88]. Operational Challenges - The group recorded a net loss during the reporting period due to challenges such as component shortages and price increases, which may continue to impact future performance[79]. - The ongoing supply chain disruptions continue to affect order levels and delivery times, leading to increased costs[97]. - The company is facing significant challenges due to rising prices of nearly all semiconductor components, which could pressure profit margins over time[108]. - The COVID-19 pandemic has caused significant operational and financial impacts, with ongoing uncertainty affecting consumer demand and supply chains[98]. Strategic Initiatives - The company plans to continue focusing on market expansion and new product development to drive future growth[7]. - The company is actively transforming into a light-asset enterprise group by eliminating outdated and redundant assets to manage costs and preserve cash[84]. - The company is diversifying its revenue contributions from mobile phones to mitigate risks associated with reliance on a single product and region[85]. - The company aims to provide comprehensive and competitive one-stop shopping solutions to meet the evolving needs of its global customers[84]. Employee and Management - The total number of employees as of June 30, 2021, was 56,832, a decrease from 70,381 on December 31, 2020[113]. - The company emphasizes employee development and retention, focusing on providing competitive compensation and a supportive work environment[109]. - The company has implemented strict COVID-19 prevention measures, including daily temperature checks and mandatory mask-wearing for employees[111]. - The company is committed to corporate social responsibility and has implemented various community service activities[111]. Future Outlook - The company anticipates ongoing volatility in operational performance due to external factors such as COVID-19 and supply chain disruptions[80]. - The company is committed to continuously assessing the impact of COVID-19 on its operations and financial performance, providing timely updates to shareholders and investors[99]. - The company is optimistic about recovery in the third quarter, particularly in Mexico, benefiting from ongoing trade dynamics and compliance with the USMCA[139].

Financial Performance - In 2020, the company's revenue was $8,935 million, a decrease of $5,444 million or 37.9% compared to $14,379 million in 2019[6]. - The loss attributable to shareholders increased to $173.9 million in 2020, compared to a loss of $12.3 million in 2019[6]. - The basic loss per share for 2020 was $2.13[6]. - The group reported a comprehensive net loss during the period due to challenges posed by the COVID-19 pandemic and other factors[22]. - The net loss for the period was $173.8 million, compared to a net loss of $12.2 million in the same period last year[70]. - The overall gross margin continued to be under pressure due to intense market competition and overcapacity, impacting the company's financial health[70]. - The group reported a credit loss provision of $6 million for the period, compared to $0.17 million in the same period last year[43]. - The group received government subsidies totaling $56.8 million, including those related to COVID-19, to help mitigate production costs[81]. - The group recorded a foreign exchange loss of $0.03 million for the period, significantly improved from a loss of $57 million in the same period last year[80]. - The net loss attributable to shareholders for the period was $173.9 million, compared to a net loss of $12.3 million in the same period last year, resulting in a net loss margin of 1.95%[83]. Operational Strategy - The company plans to upgrade and expand its production facilities and technical capabilities in India to meet changing global demands[6]. - The company has suspended non-essential capital expenditures to focus on productive assets and improve capacity utilization[6]. - The company aims to innovate in areas such as IoT, 5G, and healthcare electronics while divesting non-productive assets[7]. - The company will continue to focus on controlling overall costs and operational expenses to mitigate profit decline pressures[7]. - The company is restructuring to adapt proactively to global dynamics and expand capacity in response to market needs[6]. - The company has a strategic focus on resource integration and optimization management, particularly in factory operations[11]. - The company is committed to developing its OEM business and expanding into overseas markets[11]. - The company is actively transforming into a light-asset enterprise and reducing costs to maintain cash flow amid uncertain demand environments[29]. - The company is focusing on vertical integration and providing comprehensive manufacturing solutions to support customer needs throughout the product lifecycle[29]. - The company is closely monitoring global economic dynamics and adjusting priorities and resources accordingly to prepare for necessary changes[29]. Market Trends and Outlook - The smartphone market is expected to recover, driven by increased demand in India and the acceleration of 5G adoption in China[5]. - The global landscape is undergoing significant changes due to COVID-19, impacting consumer behavior and market demand[7]. - The smartphone market faced a decline in global shipments for the third consecutive year, with a 5.9% drop in 2020, although a potential rebound of 4.4% is expected in 2021 depending on COVID-19 recovery[88]. - IDC forecasts that the overall smartphone market will reach 1.466 billion units by 2024, with 5G smartphone shipments increasing to 58%[76]. - The company anticipates a strong market demand for 5G products in 2021, with a recovery in pipeline sales and logistics activities expected[99]. - The smartphone market in India saw a recovery with a 16.5% increase in shipments in Q3 2020, driven by strong promotions during the Diwali Festival[31]. - The company is closely monitoring the future development of its segments and assessing their impact on overall performance and cash flow[95]. Supply Chain and Production - The supply chain faced pressure due to U.S. government restrictions on certain Chinese companies, leading to shortages of common electronic components like ICs and LCDs[30]. - The company has diversified its customer and supplier base to mitigate potential risks associated with reliance on major clients and suppliers[60]. - The company is enhancing its supply chain management to ensure a steady supply of key components and maintain competitive pricing[55]. - The procurement amount from Hon Hai Technology Group accounted for 10.7% of the total procurement during the period[57]. - The supply chain faced significant disruptions in March 2020 due to COVID-19, with supply constraints peaking at that time[58]. - By the second half of 2020, there was a notable increase in demand for various electronic components, leading to supply shortages and price increases[59]. Employee and Corporate Responsibility - The company expressed gratitude to all employees for their efforts in navigating the unprecedented challenges posed by COVID-19 and the volatile global environment[8]. - The company is committed to maintaining high standards of corporate social responsibility and employee welfare, providing benefits above legal requirements and local competitors, particularly in its Hanoi and India facilities[63]. - The company has implemented effective internal controls and risk management systems to assess and monitor potential risks[60]. - The company is committed to community engagement and corporate social responsibility initiatives, particularly in its India operations[63]. - The company has observed a significant increase in demand for products related to 5G communication and autonomous driving features in traditional and electric vehicles[59]. - The company maintains good communication channels with employees to foster a harmonious labor relationship and gather feedback[61]. Investment and R&D - The company is investing $H million in R&D for new technologies aimed at improving product offerings and customer experience[12]. - The company has established a global R&D team across China, Taiwan, India, and Vietnam, focusing on enhancing R&D capabilities to support significant business growth opportunities[65]. - The company is committed to providing three years of monthly security updates and two years of software upgrades for Nokia smartphones, maintaining a strong position in the trust rankings[119]. - The company is focusing on innovation in industrial design, audio-visual quality, and user experience to enhance its product offerings[183]. - The company continues to invest in R&D to enhance its core competitiveness, focusing on product creation, development, and manufacturing solutions[182]. Regulatory and Compliance - The company is committed to compliance with relevant laws and regulations across its major operating regions, including Asia, the Americas, and Europe[138]. - The company has applied for multiple COVID-19 relief measures from the Chinese government, with most applications already received[139]. - The company is monitoring the legislative process of the VAT law in China, assessing its potential impact on operations[141]. - The company is evaluating the implications of the Foreign Investment Law in China, which provides a five-year transition period for compliance[141]. - The Indian government has introduced a new tax regulation requiring buyers to withhold 0.1% tax on payments exceeding 5 million INR to resident sellers, impacting cash flow for sellers[145]. Challenges and Risks - The COVID-19 pandemic caused disruptions, increased costs, and supply shortages, negatively impacting the company's operational performance[74]. - The ongoing impact of COVID-19 on the company's future will depend on unpredictable developments and various factors, including the pace of market recovery and government responses[195]. - The company is prepared to take necessary measures to mitigate risks associated with losing a major client[199]. - The existing business model may undergo changes, affecting revenue, gross margin, and net profit margin[199]. - The overall economic weakness and market volatility may impact clients' liquidity and ability to fulfill contractual obligations[198].

Financial Performance - For the six months ended June 30, 2020, the company reported revenue of $3,668,273, a decrease from $6,389,177 in the same period of 2019, representing a decline of approximately 42.6%[7] - The gross loss for the period was $2,665, compared to a gross profit of $43,603 in the previous year, indicating a significant downturn in profitability[7] - The company incurred a net loss of $101,298 for the six months ended June 30, 2020, compared to a net loss of $83,839 in the same period of 2019, reflecting an increase in losses of approximately 20.8%[10] - The group reported a pre-tax loss of $86,952,000 for the six months ended June 30, 2020, compared to a loss of $76,733,000 for the same period in 2019[26] - The company reported a significant increase in bank loans denominated in US dollars, rising to $835,800,000 from $605,000,000 in the previous year[49] - The company reported a total of $482,067 thousand in sales of goods from its associate company during the six months ended June 30, 2020[73] - The company recorded a net loss of $2,997 thousand in other comprehensive income related to financial assets during the reporting period[64] - The company reported a total of $12,585 thousand in outsourcing income during the six months ended June 30, 2020[73] - The company reported a significant decline in mobile phone shipments, with the market becoming saturated and pricing pressure exceeding expectations[179] Expenses and Costs - Research and development expenses were $82,200, slightly down from $86,603 in the previous year, showing a reduction of about 5.6%[7] - The total depreciation expense for the period was $95,224,000, compared to $98,182,000 in the previous year[32] - The company faced significant supply disruptions in March 2020 due to COVID-19, but supply pressures began to shift from supply to demand starting in April 2020[108] - Operating expenses for the period were $182 million, a decrease from $210 million in the same period last year, benefiting from cost-saving measures[125] - The company is focusing on controlling BOM costs and manufacturing costs to improve gross margin performance amid ongoing market pressures[179] Assets and Liabilities - Total assets decreased from $5,731,252 as of December 31, 2019, to $4,372,108 as of June 30, 2020, a decline of approximately 23.8%[12] - The total equity attributable to the owners of the company decreased from $2,094,486 to $1,885,464, a reduction of approximately 10%[14] - The company’s non-current assets decreased from $1,271,269 to $1,186,946, reflecting a decline of approximately 6.6%[13] - The total liabilities as of June 30, 2020, included $941,548 thousand in bank borrowings, fully offset by bank balances[69] - The company’s total liabilities included trade and other payables of $2,513,966 thousand as of June 30, 2020, down from $4,007,915 thousand as of December 31, 2019[15] Cash Flow and Financing - The company reported a net cash inflow from financing activities of $221,217 thousand for the six months ended June 30, 2020, compared to a net cash outflow of $(370,799) thousand for the same period in 2019[18] - The net cash used in operating activities was $(353,056) thousand, compared to $153,666 thousand for the same period in 2019[18] - The group’s cash balance was $1,444 million, down from $1,545 million on December 31, 2019[159] - Free cash flow for the period was an outflow of $399 million, improving from an outflow of $665 million in the previous period[159] Market Impact and Challenges - The company experienced a significant impact from COVID-19, with operations temporarily suspended in China and India, but has since resumed operations in most areas[20] - The company anticipates ongoing volatility in performance due to various market and economic factors[85] - The smartphone market is expected to see a decline in shipments by 12.57% in 2020 due to COVID-19, with a potential rebound in 2021 depending on market recovery[128] - The company is closely monitoring the financial health of its customers and their ability to meet contractual obligations due to market volatility and economic weakness[181] - The COVID-19 pandemic has led to a reduction in production capacity and operational challenges, with a decrease in working days from 12 weeks to 11 weeks in Q1 2020[183] Strategic Initiatives and Future Outlook - The company has not provided specific guidance for future performance but indicated ongoing efforts in market expansion and product development[4] - The company is focusing on enhancing automation in production to mitigate rising labor costs and improve efficiency[129] - The company aims to explore new projects, products, and customer opportunities based on a solid foundation of existing products and clients[103] - The company is actively expanding its investment portfolio in various sectors, including IoT and AI technologies, to enhance its market position[146] - The company is committed to maintaining financial resources sufficient for ongoing operations amid significant market demand fluctuations[189] Regulatory and Compliance - The company has complied with all relevant laws and regulations affecting its operations and investments in major jurisdictions[149] - The Chinese government has implemented various support measures to boost business confidence and ease compliance burdens due to the COVID-19 pandemic[150] - The implementation of the Civil Code in China, effective January 1, 2021, may lead to significant changes in business and compliance practices for foreign companies operating in the region[152] - The company is assessing the benefits of participating in the PLI scheme to enhance its competitive position in the Indian market[154] Employee and Operational Management - The total number of employees as of June 30, 2020, was 71,654, a decrease from 85,729 on December 31, 2019[112] - Employee costs for the period amounted to $285 million, down from $296 million in the first half of 2019 and $235 million in the second half of 2019, primarily due to optimization and adjustment of the employee structure[112] - The company has implemented strict measures to ensure employee health during the COVID-19 pandemic, including temperature checks and social distancing protocols[112] - The company is focused on enhancing employee quality and numbers to ensure leadership and capability in product development and manufacturing processes[110]

Financial Performance - In 2019, the revenue from continuing operations was $14,379 million, a decrease of $489 million or 3.3% compared to $14,868 million in 2018[8]. - The loss attributable to owners of the company from continuing operations significantly reduced to $33 million in 2019, compared to a loss of $679 million in 2018[8]. - The basic loss per share from continuing operations for 2019 was $0.40[8]. - The total revenue from continuing operations for the year 2019 was $14,379 million, a decrease of $489 million or 3.3% compared to the previous year[41]. - The net loss from continuing operations for 2019 was $33 million, significantly improved from a net loss of $679 million in the same period last year[41]. - The gross profit for continuing operations was $253 million, an increase of $399 million compared to the previous year, with a gross margin of 1.76%, improving from a loss margin of 0.98%[43]. - The group's operating expenses decreased to $367 million from $470 million year-on-year, benefiting from cost reduction measures[55]. - The group’s return on equity was negative 0.58% as of December 31, 2019, an improvement from negative 39.97% the previous year[55]. - The group recorded a profit of $230 million in the Asian segment, down from $257 million in the previous year[65]. - The group confirmed an impairment loss of $3.1 million on property, plant, and equipment during the period, compared to an impairment loss of $6.1 million in the same period last year[56]. Strategic Initiatives - The company plans to continue investing in 5G research and development and other key areas to adapt to the changing "Internet + industry" environment[8]. - The company will maintain a strategy of not accepting orders with thin profit margins and will implement additional measures to offset profit decline pressures in 2020[8]. - The company has been exploring new business opportunities related to 5G applications and V2X (Vehicle-to-Everything) to strengthen its position in the mobile phone manufacturing industry[6]. - The company is continuing to invest in local manufacturing services and component supply in India to benefit from the "Make in India" initiative[7]. - The company plans to increase its workforce by 20% to support growth initiatives and new product development[11]. - The company aims to explore new projects, products, and customer opportunities based on a solid foundation of existing products and clients[27]. - The company is committed to technological innovation and manufacturing efficiency to ensure user experience and cost competitiveness[29]. - The company aims to enhance its core capabilities and production capacity in mechanical engineering, which is crucial for the successful operation of the component business[50]. - The company is focusing on optimizing production costs, including direct labor costs and the benchmark costs of self-manufactured modules and molds[50]. - The company is focusing on R&D investments to enhance its manufacturing capabilities and develop innovative materials and solutions to meet customer demands[119]. Market Trends and Challenges - The global smartphone shipment volume has been declining for three consecutive years, with expectations of a rebound starting in 2020 due to aggressive 5G plans in China[7]. - The smartphone industry faced challenges in 2019, with many markets experiencing contraction and increased pricing pressure due to competition[27]. - The group has faced challenges in the component business due to overcapacity and intense competition, impacting profit margins[64]. - The group anticipates continued pressure on profit margins due to the low-margin nature of system assembly business driving sales growth in the Asian segment[65]. - The COVID-19 outbreak has led to a projected 2% decrease in global smartphone shipments for 2020, with the Chinese market expected to see a 5% decline[138]. - The overall profit of the group has been under pressure due to competition, and the impact of COVID-19 on performance remains difficult to predict[142]. - The group is facing significant risks related to smartphone shipment declines and pricing pressures, necessitating control over BOM and manufacturing costs to improve gross margin performance[129]. Customer and Supplier Relationships - The five major customers accounted for approximately 90.02% of the total revenue during the period, with three maintaining a long-term relationship of over five years[27]. - The company relies heavily on major customers, making its performance directly influenced by their challenges in the competitive smartphone market[29]. - The company emphasizes the importance of long-term partnerships with various customers to navigate market challenges and enhance service delivery[26]. - The company collaborates with over 3,000 suppliers, with the top five suppliers accounting for approximately 71.25% of total procurement during the period[34]. - The procurement amount from Foxconn, one of the top five suppliers, represents about 8.35% of the company's total procurement during the period[34]. - The company has maintained good business relationships with major international and Chinese brands, enhancing its manufacturing and R&D capabilities across the Asia-Pacific region[24]. Operational Efficiency and Cost Management - The company has taken steps to improve overall profitability by reducing indirect costs and operational expenses[6]. - The gross margin improved to 40%, up from 35% in the previous year, reflecting better cost management[10]. - The group has implemented cost reduction measures, resulting in a significant decrease in operational costs and achieving a gross profit margin that turned positive in the first half of 2019[122]. - The group has adopted "Industry 4.0" smart manufacturing models to reduce manufacturing costs and maintain competitive advantages amid rising labor costs in China[124]. - The company emphasizes internal talent development and recruitment of external professionals to enhance product development and manufacturing processes[37]. Investment and Financial Management - The company has invested $100 million in new technology development, focusing on AI and machine learning applications[12]. - The group aims to reduce currency risk related to the Indian rupee by revising its currency settlement mechanism with Indian business clients[53]. - The group has actively managed foreign exchange risks through natural hedging and short-term foreign exchange contracts[109]. - The company has established a disaster recovery plan to ensure effective response and minimize potential harmful impacts from cyber attacks[139]. - The company has complied with all relevant laws and regulations that significantly impact its operations and investments[91]. Environmental and Social Responsibility - The group emphasizes environmental sustainability and has integrated measures to minimize negative impacts on the environment, aiming to meet international standards such as ISO14001[146]. - The group actively monitors energy management, greenhouse gas emissions reduction, air pollution control, and wastewater treatment to comply with corporate social and environmental responsibility guidelines[146]. - The company has made significant technological upgrades in energy management, including the introduction of energy-efficient equipment[148]. - The group is committed to achieving global energy efficiency goals set annually and has implemented ISO50001 energy management systems[146]. Corporate Governance - The company has a strong management team with over 32 years of accounting and financial experience, led by the Chief Financial Officer, who oversees financial reporting, planning, and risk management[17]. - The company has a diverse board of directors with extensive experience in various industries, including telecommunications and digital transformation consulting[15][16]. - The company emphasizes internal controls and corporate governance as part of its financial management strategy[17]. - The company’s board of directors includes five members, with two being independent non-executive directors[151].