Investment Rating - FIT Hon Teng maintains a BUY rating with a new target price of HK$2 40 based on 11x FY24E P/E [2][13] Core View - FIT Hon Teng's 1Q24 results were in line with expectations driven by recovery in PC/server markets solid Voltaira business and strong Networking segment [2] - The company is expected to benefit from AirPods ramp-up integration of Voltaira auto electronics business and AI server/networking products in 2H24E [2] - Revenue and net profit are forecasted to rebound 12% and 52% YoY respectively in FY24E [2] - The stock's recent correction is attributed to profit-taking after a 101% rally in the past three months [2] Financial Performance - 1Q24 revenue reached US$965mn a 12% YoY increase while net profit was US$10 2mn compared to a loss of US$9 3mn in 1Q23 [2] - Gross profit margin improved by 450bps YoY to 20 3% due to a better product mix [2] - EV segment revenue surged 205% YoY driven by the Voltaira merger while Computing and Networking segments grew 6% and 9% YoY respectively [2] - FY24E revenue is projected at US$4 715mn with a 12 4% YoY growth and net profit is expected to reach US$199 6mn a 51 4% YoY increase [3][9] Segment Analysis - EV Mobility segment revenue jumped 205% YoY in 1Q24 due to the Voltaira merger [7] - Networking segment grew 9% YoY driven by AI demand and new CPU-related products [2] - Computing segment increased 6% YoY supported by market recovery [2] AI Server Opportunity - FIT Hon Teng expects US$500-1 000 content value per compute tray for AI servers in FY24E [2] - AI revenue share is projected to be 7-9% in FY24E up from 1% in FY23 [2] Valuation - The stock is trading at 8 9x/6 7x FY24/25E P/E which is considered attractive given multiple growth drivers [2][13] - The new target price of HK$2 40 is based on 11x FY24E P/E reflecting accelerated growth and profitability recovery [13] Growth Drivers - Key catalysts include AirPods shipments AI server product updates and continued revenue upside from auto business consolidation [13] - The company's "3+3 Strategy" is expected to drive accelerated growth and profitability recovery [13]

Financial Performance - For the fiscal year ended December 31, 2023, the revenue was $4,195,550 thousand, a decrease of 7.4% compared to $4,530,603 thousand in 2022[7]. - Gross profit for 2023 was $807,140 thousand, representing a gross margin of 19.2%, up from 16.9% in 2022[6]. - Operating profit decreased to $262,831 thousand in 2023, with an operating margin of 6.3%, compared to 6.8% in the previous year[7]. - Net profit attributable to shareholders was $128,969 thousand, down from $169,619 thousand in 2022, reflecting a net profit margin of 3.1%[7]. - Revenue for the year ended December 31, 2023, was $4,196 million, a decrease of 7.4% compared to the previous year, while profit decreased by 23.5% to $130 million[18]. - Annual profit fell by 23.5% from $170 million in 2022 to $130 million in 2023, resulting in a profit margin decrease from 3.8% to 3.1%[31]. - The company reported a net profit of $128,969 thousand for the year, compared to $169,619 thousand in the previous year, reflecting a decrease of approximately 24%[191]. - The company’s total comprehensive income for the year was reported at $89,578 thousand, a decrease from $170,342 thousand in the previous year[191]. Revenue Segmentation - The smartphone component segment remains the primary revenue source, with a 17.2% decrease in revenue compared to the previous year due to changes in high-end smartphone product structures and competition[18]. - The network infrastructure segment experienced a significant revenue decline of 43.7% year-over-year, attributed to inventory destocking in the server downstream market[18]. - Revenue from the electric vehicle (EV) segment increased by 99.7% year-over-year, bolstered by the acquisition of Prettl SWH Group, now known as FIT Voltaira Group GmbH[18]. - The system terminal product segment saw a revenue increase of 6.0% year-over-year, maintaining competitiveness in existing acoustic products and capitalizing on new wireless charging opportunities for smartwatches[19]. - Revenue from the smartphone segment decreased by 17.2%, primarily due to changes in high-end smartphone product structures and increased competition[23]. - Revenue from the network infrastructure segment decreased by 43.7%, influenced by inventory destocking in the server downstream and a shift in product mix[24]. - Revenue from the electric vehicle segment increased by 99.7%, attributed to the acquisition of the German automotive component manufacturer FIT Voltaira[24]. Assets and Liabilities - Total assets increased to $5,093,736 thousand in 2023, compared to $4,547,183 thousand in 2022[6]. - Total liabilities rose to $2,656,358 thousand, compared to $2,200,244 thousand in the previous year, marking an increase of 20.7%[189]. - Cash and cash equivalents increased significantly to $1,316,364 thousand from $914,045 thousand, a rise of 44%[187]. - The company’s retained earnings stood at $1,850,209 thousand as of December 31, 2023, up from $1,734,043 thousand, indicating a growth of about 6.7%[192]. Expenses and Investments - Distribution and selling expenses increased by 12.8% to $105 million in 2023, mainly due to the full consolidation of FIT Voltaira[26]. - Administrative expenses rose by 46.8% to $191 million in 2023, primarily due to the acquisition of FIT Voltaira and increased professional fees[27]. - R&D expenses increased by 4.0% from $296 million in 2022 to $308 million in 2023, primarily due to the acquisition of FIT Voltaira[28]. - Capital expenditures surged to $510 million in 2023 from $131 million in 2022, primarily for the acquisition of FIT Voltaira and new production facilities[33]. Cash Flow and Financing - Operating cash flow from business activities increased to $648,793 thousand, up from $635,725 thousand year-over-year, indicating a growth of about 2%[194]. - The company incurred a total cash outflow from investing activities of $410,212 thousand, significantly higher than the previous year's outflow of $66,164 thousand[194]. - The company raised $1,368,698 thousand through bank borrowings, compared to $1,112,870 thousand in the prior year, reflecting an increase of approximately 23%[194]. - The cash flow from financing activities showed a net inflow of $248,584 thousand, a recovery from a net outflow of $270,239 thousand in the previous year[194]. Strategic Initiatives - The company is implementing a "3+3" strategy to restructure resources for future growth and develop high-margin products[11]. - Significant capital investments are being made for ongoing global expansion despite external market challenges[11]. - The company continues to invest in advanced connector solutions for electric vehicles, 5G AI IoT, and acoustic applications to leverage next-generation interconnect technology trends[12]. - The acquisition of Belkin has resulted in record performance, with plans to expand the Disney collaboration product line and introduce innovative products in 2024[13]. Governance and Compliance - The board of directors' compensation is reviewed by the compensation committee and approved by the board, considering factors such as experience, responsibilities, and company performance[41]. - The company has established stock option plans and restricted stock incentive plans to provide valuable rewards to attract and retain talent[41]. - The company has a strong focus on compliance with relevant laws and regulations, as well as maintaining relationships with employees, customers, and suppliers[60]. - The company ensures compliance with legal and regulatory requirements as part of its corporate governance responsibilities[134]. Shareholder Relations - The company emphasizes the importance of effective communication with shareholders to enhance investor relations and ensure informed investment decisions[164]. - Shareholders holding at least 10% of the company's share capital have the right to request a special general meeting to discuss specified matters[166]. - The company has adopted a shareholder communication policy to foster mutual relationships and communication with shareholders[164]. Risk Management - The company has a risk management framework that includes a supervisory layer (Board and Audit Committee), an execution layer (functional departments), and a management layer (management team)[156]. - The internal audit department completed the 2023 risk management report and presented it to the Audit Committee, confirming the effectiveness of the risk management system[157]. Employee and Diversity Initiatives - As of December 31, 2023, the company had approximately 66,148 employees, an increase from 53,544 employees as of December 31, 2022[40]. - The overall gender ratio of the company as of December 31, 2023, is 48.2% male and 51.8% female[147]. - The board of directors consists of 87.5% male and 12.5% female members[147]. - The company appointed a female director on August 7, 2023, emphasizing its commitment to gender diversity[146].

Investment Rating - The report maintains a BUY rating for FIT Hon Teng with a target price (TP) of HK$ 2.42, indicating a potential upside of 12.6% from the current price of HK$ 2.15 [5][13]. Core Insights - Recent stock price corrections are viewed as overdone, primarily driven by investor concerns regarding Apple's TWS order allocation. Management has confirmed that the first production line of AirPods in Vietnam began shipments in February 2024, expected to contribute 5-7% of sales in FY24E. By 2025, additional production lines will be added in India, positioning FIT and Luxshare as the two largest AirPods suppliers with a projected market share of 30% and 70% respectively [2][3]. - The management has reiterated a solid outlook for 2024, projecting high-teens revenue growth, over 15% gross profit (GP) and operating profit (OP) growth year-on-year, driven by AirPods, AI server connectors, and the auto business [3][4]. Financial Summary - Revenue is projected to grow from US$ 4,196 million in FY23A to US$ 4,715 million in FY24E, reflecting a year-on-year growth of 12.4%. Net profit is expected to increase significantly from US$ 129.6 million in FY23A to US$ 201.2 million in FY24E, representing a growth of 55.3% [4][11]. - The earnings summary indicates a consistent improvement in profitability metrics, with gross profit margins expected to rise from 19% in FY23A to 20% in FY24E, and operating profit margins increasing from 6.3% to 7.5% over the same period [11][18]. Growth Drivers - Key growth drivers identified include the AirPods production ramp-up, AI server product launches, and consolidation in the auto business, with expected contributions of 5-7% from AirPods, 7-9% from AI server products, and 8% from the auto business in FY24E [3][4]. - The report highlights that the recent share price correction presents a buying opportunity, with the stock trading at attractive valuation multiples of 9.7x and 7.6x for FY24E and FY25E P/E respectively, compared to a historical average of 15x [3][13].

Investment Rating - The report maintains a "Buy" rating for FIT Hon Teng with a target price of HKD 1.65, based on a 9.0x 2024 P/E ratio [2][3][7] Core Views - FIT Hon Teng's 2023 financial performance met expectations, with revenue declining 7.4% YoY to USD 4.196 billion and net profit decreasing 23.5% YoY to USD 130 million [2][8] - The company's "3+3" strategy, focusing on electric vehicles (EV), 5G AIoT, and acoustic products, is expected to drive future growth [2][9] - EV business is seen as a major growth driver, with revenue contribution from EV, 5G AIoT, and acoustic products expected to reach 30% in 2024 and 40% in 2025 [2][9] - The acquisition of SWH (renamed FIT Volaira) is expected to accelerate the company's expansion in the EV market, particularly in Europe [2][10] Financial Performance - 2023 revenue: USD 4.196 billion (-7.4% YoY) [2][8] - 2023 net profit: USD 130 million (-23.5% YoY) [2][8] - 2023 gross margin: 19.2% (+2.3 ppts YoY) [8] - 2023 R&D expenses: 7.3% of revenue (+0.8 ppts YoY) [8] - 2023 administrative expenses: 4.5% of revenue (+1.6 ppts YoY) [8] Future Projections - 2024-2026 EPS forecast: USD 0.023 / USD 0.029 / USD 0.035 [2][7] - 2024-2026 revenue forecast: USD 4.673 billion / USD 5.074 billion / USD 5.472 billion [5] - 2024-2026 net profit forecast: USD 166 million / USD 208 million / USD 245 million [5] Business Strategy - The company is leveraging its global presence and MIH platform to expand its EV business, with a focus on high-voltage connectors and intelligent vehicle systems [9][10] - The acoustic business is benefiting from the company's position as a supplier of TWS products to North American customers [9] - The 5G AIoT and data center markets are expected to drive demand for high-speed connectors, benefiting the company's copper and optical-based products [9] Market Position - FIT Hon Teng is positioned to benefit from the growing EV, 5G AIoT, and data center markets, with a diversified product portfolio and strong R&D capabilities [9][10] - The company's acquisition of FIT Volaira enhances its position in the automotive sector, particularly in Europe [10]

Investment Rating - The report maintains a "BUY" rating for FIT Hon Teng with a target price (TP) raised to HK$2.42, reflecting a 19.3% upside from the current price of HK$2.03 [5][19]. Core Insights - The report highlights opportunities in the US$1.7 billion server connector and cable market, driven by increased demand for next-generation high-speed connectivity in AI servers for FY24/25E [2][3]. - Management expects a 15-20% year-over-year growth in the networking/server segment for FY24E, with AI server-related revenue projected to reach 8-10% of FY24E sales, up from 1% in FY23 [2][3]. - The report anticipates FIT's net profit to grow by 55% and 27% year-over-year in FY24 and FY25, respectively, supported by the ramp-up of AI server connectivity products and consolidation of the Voltaira auto business [2][3]. Financial Summary - Revenue is projected to increase from US$4.196 billion in FY23 to US$4.715 billion in FY24, representing a 12.4% year-over-year growth [18][22]. - Net profit is expected to rise from US$170.3 million in FY23 to US$200 million in FY24, reflecting a 55.4% increase [18][22]. - Earnings per share (EPS) is forecasted to grow from 2.42 US cents in FY23 to 2.83 US cents in FY24 [18][22]. Market Position - FIT Hon Teng is positioned as a global leader in the server connector market, alongside competitors such as Amphenol, TEL, and Molex [2][3]. - The company is expected to capture a 20-30% market share in the global server connector and cable market, aiming for US$500 million in sales by FY25E [2][3]. Valuation Metrics - The report notes that FIT is trading at 9.2x/7.2x FY24/25 P/E, which is attractive compared to the historical average of 15x [3][19]. - The new target price of HK$2.42 is based on an 11x FY24E P/E, reflecting a 33% discount to the 5-year historical average [19].

Investment Rating - The investment rating for FIT Hon Teng is maintained as "Buy" with a target price (TP) set at HK$1.65 [3][7]. Core Insights - The FY23 results were in line with expectations, with operating revenue decreasing by 7.4% year-on-year to US$4,196 million and shareholders' net profit decreasing by 23.5% year-on-year to US$130 million [9][11]. - The company is implementing a "3+3" strategy focusing on the development of electric vehicles (EVs), 5G AIoT, and acoustics, which is expected to drive future growth [11][13]. - The revenue mix from EV Mobility, new Generation 5G AIoT, and Audio is projected to reach 30% in 2024 and 40% in 2025 [11][13]. Financial Performance - Forecasted EPS for FY24-FY26 is US$0.023, US$0.029, and US$0.035 respectively, with a 9.0x PER for 2024 [7][9]. - The gross profit margin increased by 2.3 percentage points year-on-year to 19.2% in FY23, while R&D expenses as a percentage of total revenue increased to 7.3% [9][22]. - The company expects revenue growth in the coming years, with total revenue projected to increase from US$4,196 million in FY23 to US$5,472 million by FY26 [22]. Business Strategy and Market Position - The acquisition of SWH, now FIT Voltaira, enhances the company's product offerings in the EV sector, positioning it to meet the growing demand for high-voltage connectors and wiring harnesses [13][11]. - The company aims to expand its customer base and production capabilities in the EV mobility sector, leveraging its global layout and partnerships through MIH [11][13]. - The audio business is also expected to benefit from the increasing demand for high-speed connections driven by AI server growth and data center construction [11][13].

Investment Rating - The report maintains a "BUY" rating for FIT Hon Teng with a new target price of HK$2.21, representing a 64.7% upside from the current price of HK$1.34 [4][15]. Core Insights - FIT Hon Teng's FY23 results were in line with expectations, reporting revenue of US$4,196 million, a decrease of 7% year-on-year, and a net profit of US$130 million, down 24% year-on-year. The decline was attributed to softer demand in traditional servers and PCs, while the EV segment saw a significant increase of 100% year-on-year due to the Voltaira merger [2][3]. - The management provided an optimistic outlook for FY24E, forecasting double-digit year-on-year growth in both revenue and gross profit, driven by new product launches and synergies from the Voltaira auto electronics business. Revenue and net profit are expected to rebound by 12.2% and 41.6% year-on-year, respectively [2][10]. Financial Performance Summary - FY23 revenue was US$4,196 million, with a gross margin of 19.2%, an improvement from 16.9% in FY22, due to a better product mix and effective execution of the "3+3 Strategy" [2][19]. - The company expects revenue for FY24E to reach US$4,706 million, with a gross profit of US$931 million, reflecting a gross margin of 19.8% [10][19]. - The net profit for FY24E is projected at US$183 million, with an EPS of 2.58 US cents, indicating a significant recovery from FY23 [11][19]. Growth Drivers - Key growth drivers include the integration of Voltaira's auto business, advancements in AI server and networking products, and increased orders for AirPods expected in Q3 2024 from major US customers [2][10]. - The report highlights the attractive valuation of FIT Hon Teng, trading at 6.6x FY24E P/E, which is considered favorable given the anticipated earnings visibility and growth potential [2][15]. Market Position - FIT Hon Teng's market capitalization is approximately HK$9,737.8 million, with a shareholding structure dominated by Foxconn Far East Ltd, holding 71.1% [5][16]. - The stock has shown strong performance, with a 1-month increase of 38.1% and a 3-month increase of 27.6% [5].

Financial Performance - Revenue for the year ended December 31, 2023, was $4,196 million, a decrease of 7.4% compared to $4,531 million for the year ended December 31, 2022[2] - Profit for the year ended December 31, 2023, was $130 million, down 23.5% from $170 million for the year ended December 31, 2022[2] - Basic earnings per share attributable to the company's owners for the year ended December 31, 2023, was 1.82 cents, a decrease from 2.42 cents for the year ended December 31, 2022[2] - The company did not declare any final dividend for the year ended December 31, 2023[2] - The company reported a total comprehensive income of $90,115 thousand for the year ended December 31, 2023, compared to a loss of $50,611 thousand for the year ended December 31, 2022[5] - The company reported a net profit attributable to shareholders of $128,969 thousand for the year ended December 31, 2023, down from $169,619 thousand in 2022, reflecting a decrease of about 24%[23][25] - Basic earnings per share for 2023 were $1.82, compared to $2.42 in 2022, indicating a decline of approximately 25%[23] - Annual profit decreased by 23.5% to $130 million, with a profit margin decline from 3.8% to 3.1%[47] Revenue Breakdown - Total revenue for the year ended December 31, 2023, was $4,195,550 thousand, a decrease from $4,530,603 thousand in 2022, representing a decline of approximately 7.4%[14] - Revenue from the semi-finished products segment was $3,487,295 thousand, down from $3,858,562 thousand in the previous year, indicating a decrease of about 9.6%[14] - Revenue from the consumer products segment was $708,255 thousand, which remained stable compared to $672,041 thousand in 2022, showing an increase of approximately 5.4%[14] - Revenue from the United States was $1,928,367 thousand, a decrease from $2,039,833 thousand in 2022, indicating a decline of about 5.5%[15] - Revenue from electric vehicles increased significantly to $305,098 thousand from $152,814 thousand in the previous year, marking an increase of approximately 100%[15] - Revenue from the smartphone component market decreased by 17.2% year-over-year due to structural changes in high-end smartphone products and increased competition[33] - Revenue from the networking infrastructure market dropped by 43.7% year-over-year, impacted by inventory destocking in the server supply chain[33] - Revenue from system terminal products increased by 6.0% year-over-year, driven by competitive advantages in existing acoustic products and new wireless charging opportunities[34] Assets and Liabilities - Total assets as of December 31, 2023, amounted to $5,093,736 thousand, an increase from $4,547,183 thousand as of December 31, 2022[7] - Non-current assets totaled $1,981,745 thousand as of December 31, 2023, compared to $1,783,187 thousand as of December 31, 2022[6] - Current assets were $3,111,991 thousand as of December 31, 2023, up from $2,763,996 thousand as of December 31, 2022[6] - Total liabilities as of December 31, 2023, were $2,656,358 thousand, compared to $2,200,244 thousand as of December 31, 2022[8] - Total liabilities as of December 31, 2023, were $2,656,358 thousand, up from $2,200,244 thousand in 2022, marking an increase of around 20%[18][19] Cash Flow and Investments - The company’s cash and cash equivalents increased to $1,316,364 thousand as of December 31, 2023, from $914,045 thousand as of December 31, 2022[6] - The company's net cash generated from operating activities for the fiscal year 2023 was $574 million, while cash used in investing activities was $410 million, and cash generated from financing activities was $249 million[49] - Capital expenditures for the fiscal year 2023 were $510 million, significantly higher than $131 million in 2022, primarily for the acquisition of FIT Voltaira Group GmbH and the establishment of new production bases[50] Operational Efficiency and Costs - The total expenses for sales, distribution, and administrative costs in 2023 were $3,991,541 thousand, down from $4,281,177 thousand in 2022, indicating a decrease of approximately 7%[21] - The cost of goods sold for 2023 was $2,436,724 thousand, a decrease from $2,680,309 thousand in 2022, representing a reduction of about 9%[21] - R&D expenses increased by 4.0% to $308 million, mainly due to the acquisition of FIT Voltaira Group GmbH[44] - Administrative expenses increased by 46.8% to $191 million, driven by the acquisition and increased professional fees[43] - Distribution costs and selling expenses increased by 12.8% to $105 million, primarily due to the acquisition of FIT Voltaira Group GmbH[42] Strategic Initiatives - The company aims to capitalize on the growing demand for connectors in data centers driven by AI and cloud services, focusing on energy efficiency and open standard platforms[35] - The company anticipates stable market demand in 2024 for computer and consumer electronics connectors, despite economic uncertainties[35] - The acquisition of FIT Voltaira Group GmbH is expected to enhance the company's EV product development and expand its market presence in automotive electronics[36] - The company is exploring potential acquisitions to enhance its product portfolio and market reach[70] - A new strategic partnership was announced, expected to drive a 15% increase in operational efficiency[71] Corporate Governance and Compliance - The company has adopted new accounting standards effective January 1, 2023, which are not expected to have a significant impact on the financial statements[11] - The audit committee, consisting of three independent non-executive directors, has reviewed the audited consolidated financial statements for the year ended December 31, 2023[62] - The company's auditor, PwC, confirmed that the figures in the announcement align with the audited consolidated financial statements for the year ended December 31, 2023[63] - The company has complied with all applicable provisions of the corporate governance code during the year ended December 31, 2023, except for the separation of the roles of Chairman and CEO[64] Future Outlook - The company provided a positive outlook for the next quarter, projecting a revenue increase of 10%[70] - New product launches are expected to contribute an additional $50 million in revenue next quarter[71] - The company is expanding its market presence in Vietnam, targeting a 25% market share by the end of the fiscal year[70] - Research and development investments increased by 30%, focusing on innovative technologies[71] - The board of directors approved a share buyback program worth $100 million to enhance shareholder value[71]

Financial Performance - For the six months ended June 30, 2023, revenue decreased by 15.1% to $1,784 million compared to $2,101 million in the same period of 2022[7]. - Gross profit declined by 19.4% to $283 million, resulting in a gross margin of 15.9%, down from 16.7% in the previous year[6]. - Operating profit fell by 60.8% to $47 million, leading to an operating margin of 2.6%, down from 5.7%[6]. - The net loss attributable to the company was $9 million, a significant decrease from a profit of $85 million in the same period last year, representing a 110.6% decline[7]. - Revenue for the first half of 2023 was $1,784 million, a decrease of 15.1% compared to $2,101 million in the same period of 2022[13]. - The company reported a loss of $9 million for the six months ended June 30, 2023, compared to a profit of $85 million for the same period in 2022, resulting in a profit margin decline from 4.1% to -0.5%[21]. - The company reported a total comprehensive loss of $74,630 thousand for the period, compared to a loss of $23,050 thousand in the previous year[41]. Revenue Breakdown - Revenue from the smartphone segment decreased by 22.8% due to a decline in shipments of high-end smartphones[10]. - Revenue from the network infrastructure segment dropped by 41.3%, impacted by inventory destocking in the server downstream[10]. - Revenue from the computer and consumer electronics segment decreased by 6.6%, despite opportunities in acoustic components[10]. - Revenue from the electric vehicle segment decreased by 5.9% due to product updates affecting component sales[10]. - Revenue from system terminal products increased by 1.3%, driven by higher demand for wireless charging products in new smartwatches[10]. - Smartphone revenue decreased by 22.8% to $445.9 million, primarily due to a decline in shipments of high-end smartphones[14]. - Network infrastructure revenue decreased by 41.3% to $218.9 million, impacted by changes in product mix and inventory destocking in the server downstream[15]. - Electric vehicle revenue decreased by 5.9% to $71.6 million, mainly due to product updates and reduced sales of automotive components[15]. - System terminal products revenue increased by 1.3% to $578.9 million, driven by higher demand for wireless charging products for new smartwatches[16]. Expenses and Costs - Total expenses for the six months ended June 30, 2023, amounted to $1,757,560 thousand, down 12.6% from $2,012,955 thousand in the prior year[82]. - The cost of goods sold was $1,052,310 thousand, a decrease of 13.3% from $1,213,514 thousand in the same period of 2022[82]. - R&D expenses increased by 2.2% to $139 million, attributed to higher costs related to molds and materials[18]. - Employee benefits expenses totaled $358 million for the six months ended June 30, 2023, down from $399 million for the same period in 2022, reflecting a reduction in workforce from 53,544 to 52,488 employees[32]. - Legal and professional expenses increased to $33,788 thousand, up 59.5% from $21,226 thousand in the same period of 2022[82]. Cash Flow and Liquidity - Cash and cash equivalents increased from $914 million as of December 31, 2022, to $1,384 million as of June 30, 2023, while total bank borrowings rose from $1,027 million to $1,402 million[22]. - The net cash flow from operating activities for the six months ended June 30, 2023, was $202,743 thousand, compared to $205,829 thousand for the same period in 2022[47]. - Cash and cash equivalents increased by $504,074 thousand for the six months ended June 30, 2023, compared to an increase of $131,160 thousand for the same period in 2022[47]. - The company incurred capital expenditures of $93,560 thousand for the purchase of property, plant, and equipment during the six months ended June 30, 2023[47]. Inventory and Receivables - The average inventory turnover days increased to 105 days, compared to 94 days in the previous year[8]. - Trade receivables decreased from $720 million as of December 31, 2022, to $615 million as of June 30, 2023, attributed to reduced product shipments from declining global demand for consumer electronics[27]. - Trade payables decreased from $661 million as of December 31, 2022, to $535 million as of June 30, 2023, mainly due to reduced procurement linked to lower global demand for consumer electronics[28]. - Inventory decreased to $792,037 thousand from $966,793 thousand, indicating a reduction in stock levels[42]. Strategic Initiatives - The company plans to strategically pursue opportunities in the electric vehicle market and expand its customer base through acquisitions[12]. - The overall market demand is expected to decline in the second half of 2023 due to economic uncertainties and inflation[12]. - The company aims to maintain product competitiveness and expand its global footprint despite a soft consumer electronics market[12]. Shareholder Information - The board did not declare any interim dividend for the six months ended June 30, 2023[36]. - The company did not declare any interim dividends for the six months ended June 30, 2023, consistent with the previous year[104]. - The company recognized share-based payment expenses of $862,000 for the six months ended June 30, 2023, down from $1,582,000 in the same period of 2022[122]. - The company had four subsidiaries in China eligible for a preferential income tax rate of 15% for the six months ended June 30, 2023[85]. Financial Position - Total assets as of June 30, 2023, amounted to $4,619,705 thousand, an increase from $4,547,183 thousand at the end of 2022[42]. - As of June 30, 2023, total equity amounted to $2,272,203 thousand, a decrease from $2,346,939 thousand as of January 1, 2023[44]. - The company’s total liabilities decreased from $979,030,000 to $798,852,000, a reduction of about 18.4%[120]. - The company reported total sales of $225,226,000 to related parties for the six months ended June 30, 2023, down from $296,672,000 in the same period of 2022[136].

Financial Performance - Revenue for the six months ended June 30, 2023, was $1,784 million, a decrease of 15.1% compared to $2,101 million for the same period in 2022[2] - The company reported a loss of $9 million for the six months ended June 30, 2023, compared to a profit of $85 million for the same period in 2022[2] - Basic loss per share attributable to owners of the company was $0.13 for the six months ended June 30, 2023, down from earnings of $1.23 per share for the same period in 2022[2] - The operating profit before tax for the six months ended June 30, 2023, was $7,525 thousand, compared to $107,581 thousand for the same period in 2022, indicating a significant drop of around 93%[13] - The gross profit for the six months ended June 30, 2023, was $350,839 thousand, compared to $283,154 thousand for the same period in 2022, showing an increase of approximately 23.8%[13] - The company reported a total tax expense of $16,204 thousand for the six months ended June 30, 2023, down from $22,095 thousand in the same period of 2022[23] - The net loss attributable to the company's owners for the six months ended June 30, 2023, was $(8,952) thousand, a significant decline from a profit of $85,117 thousand in the same period of 2022[25][27] Assets and Liabilities - Total assets as of June 30, 2023, amounted to $4,619 million, compared to $4,547 million as of December 31, 2022[6] - Total liabilities increased to $2,347 million as of June 30, 2023, from $2,200 million as of December 31, 2022[6] - Cash and cash equivalents were $1,384 million as of June 30, 2023, compared to $914 million as of December 31, 2022[5] - Inventory decreased to $792 million as of June 30, 2023, from $967 million as of December 31, 2022[5] - Trade receivables were $615 million as of June 30, 2023, down from $720 million as of December 31, 2022[5] - The company's total liabilities reached $2,347,502 thousand as of June 30, 2023, compared to $2,200,244 thousand at the end of 2022, indicating an increase of approximately 6.7%[18][19] - The division liabilities for semi-finished products were $730,704 thousand, while consumer goods liabilities were $156,537 thousand, totaling $887,241 thousand[18] Revenue Breakdown - Revenue from the smartphone segment was $445,883 thousand, down from $577,628 thousand in the previous year, reflecting a decrease of about 22.8%[15] - Revenue from the networking equipment segment decreased to $218,936 thousand from $373,151 thousand, a decline of approximately 41.4%[15] - Revenue from external customers in the United States was $952,956 thousand, slightly down from $969,903 thousand in the previous year, a decrease of about 1.0%[16] - The geographical revenue breakdown shows that China contributed $541,038 thousand, while Vietnam contributed $209,222 thousand for the six months ended June 30, 2023[21] - Revenue from smartphone components decreased by 22.8% for the six months ended June 30, 2023, due to a decline in high-end smartphone shipments[34] - Revenue from network infrastructure decreased by 41.3% for the six months ended June 30, 2023, impacted by inventory destocking in the server downstream[34] - Revenue from the electric vehicle market decreased by 5.9% for the six months ended June 30, 2023, due to changes in customer specifications[34] Operational Insights - The company continues to focus on the manufacturing and sales of mobile and wireless devices, connectors, and related products for the communications, computer, and automotive markets[7] - The company anticipates increased demand for electric vehicles and related infotainment products, which will drive market demand for power management and vehicle networking products[35] - The company expects overall performance in the network infrastructure business to improve starting in Q4 2023 due to recovering downstream demand[36] Corporate Governance and Compliance - The company has confirmed compliance with the standard code regarding securities trading by all directors for the six months ended June 30, 2023[63] - The company is committed to maintaining high standards of corporate governance and has complied with applicable codes[62] - The audit committee reviewed the unaudited interim consolidated financial information for the six months ended June 30, 2023[59] Strategic Initiatives - The company plans to continue investing in the electric vehicle market and seeks new applications for interconnect solutions through strategic acquisitions[36] - The board has approved a new strategic initiative to enhance customer experience, which is expected to drive a J% increase in customer retention rates[68] - Recent acquisitions are expected to enhance operational efficiency, with projected cost savings of F million annually[68]