Financial Performance - Revenue for the six months ended June 30, 2021, was $1,982 million, an increase of 3.4% compared to $1,916 million for the same period in 2020[11]. - Gross profit for the same period was $268 million, reflecting a 2.5% increase from $261 million in 2020[11]. - Operating profit decreased by 50.1% to $15.9 million from $31.9 million in the previous year[11]. - Profit attributable to owners of the company was $9.3 million, down 58.2% from $22.2 million in 2020[11]. - The company reported a net profit of $7,880 thousand, down from $20,145 thousand in the previous year, indicating a decrease of 60.91%[58]. - Basic earnings per share for the company was $0.14, compared to $0.33 in the prior year, a decline of 57.58%[58]. - The company reported a foreign exchange loss of $10,780 thousand for the period, contrasting with a gain of $27,645 thousand in the previous year[59]. - The company’s net profit attributable to shareholders for the six months ended June 30, 2021, was $9.264 million, a decrease of 58% compared to $22.173 million for the same period in 2020[105]. Revenue Segments - The mobile device segment saw a revenue decrease of 28.4% due to the removal of wired headphone configurations in new smartphones[15]. - Communication infrastructure revenue increased by 7.4% due to the rise in demand for networking products during the pandemic[15]. - Revenue from the computer and consumer electronics segment increased by 22.3% as a result of remote work and online learning trends[15]. - Automotive, industrial, and medical segments experienced a revenue increase of 30.6%[15]. - Smart accessories revenue surged by 79.6% as physical retail channels reopened in Europe and the US[15]. - Revenue from the mobile devices segment decreased by 28.4%, primarily due to the removal of wired earphone configurations in new smartphones, although Lightning cable products partially offset this decline[22]. - The communications infrastructure segment saw a revenue increase of 7.4%, driven by the growing demand for high-speed connectors and cables[22]. - Revenue from the computer and consumer electronics segment increased by 22.3%, supported by the ongoing trends of remote work and online learning[22]. - The automotive, industrial, and medical segment experienced a revenue increase of 30.6%, benefiting from rising demand for electric vehicles and in-car infotainment products[22]. - The smart home segment's revenue grew by 2.4%, reflecting the increasing interconnectivity of home appliances[22]. - Revenue from the smart accessories terminal market surged by 79.6%, attributed to the recovery of the pandemic in Europe and the U.S., along with the launch of new true wireless Bluetooth earphones[26]. Expenses and Costs - Research and development expenses rose by 13.9% to $131 million, mainly due to investments in upgrading Lightning cables and high-speed connectors[29]. - Operating profit decreased by 50% to $16 million, with the operating profit margin dropping from 1.7% to 0.8%[31]. - Income tax expenses increased by 20.0% to $6 million, with the effective tax rate rising from 21.3% to 43.2%[32]. - Employee benefits expenses totaled $368 million for the first half of 2021, compared to $329 million in the same period of 2020[49]. - The company incurred depreciation and amortization expenses of $74.051 million for property, plant, and equipment during the six months ended June 30, 2021[110]. Assets and Liabilities - Cash and cash equivalents stood at $757 million, a slight decrease from $766 million at the end of the previous year[34]. - Total assets decreased from $4,638,937 thousand to $4,451,631 thousand, a decline of approximately 4.03%[60]. - Total liabilities decreased from $2,448,561 thousand to $2,166,619 thousand, a decrease of approximately 11.48%[61]. - Current liabilities increased significantly from $1,789,962 thousand to $2,091,503 thousand, an increase of about 16.86%[61]. - Trade receivables decreased from $872 million as of December 31, 2020, to $668 million as of June 30, 2021, due to improved collection efforts on overdue receivables[41]. - Inventory increased from $944 million as of December 31, 2020, to $994 million as of June 30, 2021, due to overall business expansion and anticipated higher product demand in the second half of 2021[40]. Financing and Investments - The company issued convertible preferred shares to Fortinet Inc. for $75 million, which can be converted into 32.6% of Linksys' equity[38]. - The company raised $2,140,415 thousand from bank borrowings, significantly higher than the $1,605,216 thousand raised in the previous year[64]. - The company reported a net cash inflow from operating activities of $55,412 thousand, compared to a cash outflow of $53,816 thousand for the same period in 2020[64]. - The company incurred a net cash outflow from investing activities of $65,147 thousand, an improvement from the $108,513 thousand outflow in the same period last year[64]. - The company recognized government subsidies of $7,278 thousand for the six months ended June 30, 2021, up from $5,954 thousand in the same period of 2020[96]. Shareholder Information - The company did not declare any interim dividend for the six months ended June 30, 2021[54]. - The company has a significant shareholder, Hon Hai, holding 5,179,557,888 shares, representing 75.15% of the total equity[174]. - The company plans to issue 2,400,232 preferred shares to Fortinet Inc. for approximately $85,000,000, resulting in a change in ownership structure for Linksys Holdings, Inc.[167]. - The company has not purchased, sold, or redeemed any of its listed securities during the six months ending June 30, 2021[186]. Corporate Governance - The chairman and CEO roles are held by the same individual, which the board believes provides strong and consistent leadership[187]. - The board of directors has confirmed compliance with the standard code of conduct for securities trading during the six months ending June 30, 2021[188]. - The audit committee, consisting of three independent non-executive directors, reviewed the unaudited condensed consolidated interim financial information for the six months ending June 30, 2021[191].

Financial Performance - Revenue for the fiscal year ended December 31, 2020, was $4,314.66 million, a slight decrease of 1.3% from $4,372.38 million in 2019[9] - Gross profit for 2020 was $579.77 million, resulting in a gross margin of 13.4%, down from 17.2% in 2019[9] - Operating profit decreased to $124.76 million, with an operating margin of 2.9%, compared to 6.3% in the previous year[9] - Profit attributable to owners of the company was $42.51 million, a significant decline of 81.9% from $235.41 million in 2019[9] - In 2020, the company's revenue was $4,315 million, a decrease of 1.3% compared to 2019, while profit dropped by 81.5% to $43 million[22] - Gross profit decreased by 23.1% from $754 million in 2019 to $580 million in 2020, with gross margin dropping from 17.2% to 13.4%[33] - Operating profit fell by 54.5% from $275 million in 2019 to $125 million in 2020, leading to a decrease in operating margin from 6.3% to 2.9%[37] - Net profit for the year decreased by 81.5% from $233 million in 2019 to $43 million in 2020, with profit margin dropping from 5.3% to 1.0%[39] Asset and Equity Management - Current assets increased to $2,848.11 million from $2,741.91 million in 2019, while total assets rose to $4,638.94 million[10] - Total equity reached $2,190.38 million, up from $2,077.35 million in 2019, indicating a strengthening balance sheet[10] - Cash and cash equivalents decreased from $892 million at the end of 2019 to $766 million at the end of 2020[40] - Trade receivables decreased from $930 million at the end of 2019 to $872 million at the end of 2020, due to improved management of overdue receivables[46] - Trade payables decreased from $691 million as of December 31, 2019, to $674 million as of December 31, 2020, with an average turnover days of 67 days compared to 71 days in 2019[47] - The debt-to-equity ratio as of December 31, 2020, was 11.6%, a significant increase from 2.7% as of December 31, 2019[48] Revenue Segmentation - The mobile devices segment was the largest revenue source, with a 4.9% decrease in revenue due to the removal of wired headphone jacks in new smartphones[22] - The communications infrastructure segment saw a 9.4% decline in revenue, impacted by U.S.-China trade conflicts and changes in optical module demand[22] - The computer and consumer electronics segment experienced a 10.1% increase in revenue, driven by the rise in demand for laptops and tablets during the pandemic[22] - The automotive, industrial, and medical segment grew by 11.7% in revenue, reflecting increased applications in these areas[22] - The smart home segment's revenue increased by 12.4%, benefiting from the demand for routers and network products during the pandemic[22] - Revenue from the mobile device segment decreased by 4.9% to $1,653 million, primarily due to the removal of wired headphone jacks in new smartphones[29] - The communication infrastructure segment saw a revenue decline of 9.4%, generating $802 million, impacted by changes in optical module business and trade conflicts[30] - The computer and consumer electronics segment experienced a revenue increase of 10.1%, reaching $875 million, driven by the demand for remote work and online learning during the pandemic[30] - The automotive, industrial, and medical segment's revenue increased by 11.7% to $145 million, benefiting from rising electric vehicle demand[28] - The smart home segment's revenue grew by 12.4% to $298 million, supported by the trend of interconnected home appliances[28] - Revenue from smart accessories decreased by 3.1% to $542 million, reflecting a growing market but facing challenges[28] Strategic Initiatives and Market Focus - The company emphasized advancements in technology sectors such as 5G, automotive electronics, smart accessories, IoT, and smart home solutions[14] - Despite challenges from the COVID-19 pandemic, the company aims to expand market share in rapidly growing industries[14] - The company remains committed to creating sustainable and long-term value for shareholders through strategic innovation and manufacturing advantages[14] - The company is focusing on developing next-generation connectivity solutions, including 5G mobile antennas and WiFi 6 Mesh technology[15] - A strategic alliance was formed with Fortinet to enhance the product portfolio under the Linksys brand, addressing the growing demand for secure remote work solutions[18] - The company is expanding production capacity in Vietnam to improve operational efficiency and profitability[15] - The company plans to strategically focus on mobile devices and automotive, industrial, and medical markets for future growth[26] - The company aims to enhance smart product development for home living, with new product launches at CES 2020[26] - The company will continue to seek emerging application opportunities in interconnect solutions, particularly in electric vehicles and automotive electronics[26] Corporate Governance and Leadership - Sidney Lu has been appointed as the Executive Director and CEO since December 30, 2013, with over 20 years of experience in connector technology business[60] - Lu Boqing has been the Global COO and CFO since March 16, 2015, providing strategic guidance for business development[61] - Chester John Pipkin has been an Executive Director since April 1, 2019, and is responsible for the smart home and smart accessories business[62] - The company has a strong leadership team with significant experience in their respective fields, enhancing operational efficiency and strategic direction[63] - The company is committed to maintaining high standards of corporate governance and financial transparency[61] - The board consists of three executive directors and four independent non-executive directors, complying with listing rules regarding board composition[155] - The independent non-executive directors have confirmed their independence, and the board has complied with relevant listing rules regarding their appointment[155] - The company has established an internal audit department with dedicated personnel to ensure the effectiveness of internal control systems and operational efficiency[199] Shareholder and Market Information - Sales to the top five customers accounted for 57.6% of total revenue for the year ended December 31, 2020, down from 66.1% in 2019[78] - The largest single customer represented 33.2% of total revenue for the year ended December 31, 2020, compared to 33.0% in 2019[78] - Purchases from the top five suppliers accounted for 37.4% of total procurement for the year ended December 31, 2020, down from 39.5% in 2019[79] - The largest single supplier accounted for 17.5% of total procurement for the year ended December 31, 2020, compared to 17.1% in 2019[79] - The company reported a distributable reserve of approximately $1,673 million as of December 31, 2020[82] - The company did not recommend a final dividend for the year ended December 31, 2020[75] Risk Management and Compliance - The company has adopted a prudent foreign exchange hedging policy, with a nominal amount of $440 million in forward foreign exchange contracts as of December 31, 2020[56] - The company has established arrangements for employees to confidentially report any misconduct related to financial reporting or internal controls[174] - The board is responsible for monitoring compliance with legal and regulatory requirements[169] - The internal audit department completed the 2020 risk management report, which was reviewed by the audit committee and the board[198] - The risk management framework includes a supervisory layer (the board and audit committee), an executive layer (functional departments), and a management layer (management team) to ensure effective risk management[198] Employee and Compensation Information - As of December 31, 2020, the company had approximately 55,402 employees, up from 47,163 employees in 2019, with total employee benefits expenses amounting to $750 million compared to $622 million in 2019[55] - The compensation committee reviews the compensation policy and overall compensation structure for directors and senior management based on the group's operating performance and market practices[89] - The company is committed to ensuring that no director participates in determining their own compensation[189] - The compensation committee is tasked with establishing transparent procedures for the remuneration of all directors and senior management[189] Environmental, Social, and Governance (ESG) Initiatives - The company is committed to environmental, social, and governance (ESG) initiatives, establishing a committee to enhance accountability in risk management and reporting[15] - The environmental, social, and governance committee held 1 meeting to review the revised ESG policies and related work for 2021[192]

Financial Performance - Revenue for the six months ended June 30, 2020, was $1,916,543 thousand, a slight decrease of 0.1% compared to $1,918,306 thousand for the same period in 2019[7]. - Gross profit for the same period was $261,217 thousand, representing a decrease of 30.6% from $376,360 thousand in 2019[7]. - Operating profit dropped to $31,913 thousand, down 73.8% from $121,836 thousand in the previous year[7]. - Profit attributable to owners of the company was $22,173 thousand, a significant decline of 78.2% compared to $101,834 thousand in 2019[7]. - The gross margin decreased to 13.6% from 19.6%, a drop of 6.0 percentage points[6]. - The operating profit margin fell to 1.7% from 6.4%, a decrease of 4.7 percentage points[6]. - Net profit for the period was $20,145 thousand, down 80% from $100,743 thousand in the same period last year[48]. - Basic earnings per share decreased to $0.33 from $1.55, reflecting a decline of 78.7% year-over-year[46]. - The company reported a total comprehensive loss of $10,425 thousand for the period, compared to a comprehensive income of $83,704 thousand in the previous year[48]. Revenue Breakdown - Revenue from the mobile device end market increased by 14.2% due to higher shipments of new smartphones[10]. - Revenue from the communication infrastructure end market decreased by 8.4% due to trade conflicts and changes in demand for optical modules[10]. - Revenue from the computer and consumer electronics end market increased by 5.5% driven by remote work and online learning trends[10]. - Revenue from the smart home and smart accessories end market decreased by 3.2% and 30.2% respectively, impacted by the COVID-19 pandemic[10]. - Revenue from automotive, industrial, and medical markets saw a revenue increase of 5.7% to $65,509 million, supported by rising demand for electric vehicles[15]. - Revenue from smart home market decreased by 3.2% to $120,229 million, reflecting ongoing trends in home office and online education[16]. - Smart accessories market revenue dropped by 30.2% to $183,434 million, indicating a significant decline in demand[15]. Cost and Expenses - Cost of sales increased by 7.4% from $1,542 million to $1,655 million, primarily due to pandemic-related shutdowns and changes in business model[19]. - Total expenses for the six months ended June 30, 2020, amounted to $1,909,980 thousand, an increase from $1,806,073 thousand in the same period of 2019, representing a growth of approximately 5.7%[88]. - The cost of goods sold was $1,165,736 thousand for the six months ended June 30, 2020, compared to $1,025,979 thousand in 2019, indicating an increase of about 13.6%[88]. - Employee benefits expenses totaled $329 million for the first half of 2020, up from $281 million in the same period of 2019[40]. - Legal and professional expenses increased to $30,899 thousand in the first half of 2020, up from $19,521 thousand in 2019, representing a growth of about 57.9%[88]. Cash Flow and Liquidity - Cash and cash equivalents decreased from $892 million to $744 million, while short-term bank deposits fell from $118 million to $94 million[26]. - The company reported a net cash used in operating activities was $(31,330) thousand, compared to $210,007 thousand for the same period in 2019, indicating a significant decline in operational cash flow[53]. - Cash outflow for the purchase of property, plant, and equipment was $(138,449) thousand, an increase from $(111,712) thousand in the previous year, reflecting increased investment in capital expenditures[53]. - The company reported a net cash inflow from financing activities of $3,432 thousand, a recovery from a net cash outflow of $(133,047) thousand in the same period last year[53]. - The company’s cash and cash equivalents decreased from $1,024,642,000 to $881,775,000 during the reporting period[111]. Assets and Liabilities - Total assets as of June 30, 2020, were $4,230,312 thousand, a decrease from $4,407,029 thousand at the end of 2019[49]. - Total liabilities decreased from $2,329,682 thousand to $2,160,268 thousand, a reduction of approximately 7.3%[50]. - Non-current liabilities decreased from $667,504 thousand to $653,285 thousand, a decrease of about 2.1%[50]. - Current liabilities decreased from $1,662,178 thousand to $1,506,983 thousand, a decline of approximately 9.3%[50]. - The company’s total liabilities increased due to higher bank borrowings, reflecting a strategic move to leverage debt for operational needs[53]. Strategic Outlook - The company anticipates stronger performance in the second half of 2020, despite uncertainties related to COVID-19[14]. - Strategic focus on emerging applications in interconnect solutions and automotive electronics is expected to capture new market opportunities[14]. - The introduction of new products such as WiFi 6 Mesh routers and GaN chargers at CES 2020 aims to enhance market share and consumer engagement[14]. - The company plans to continue its strategy of market expansion and product development, although specific figures were not disclosed[52]. - The company is considering strategic acquisitions to enhance its market position, with a budget of $100 million allocated for potential deals[156]. Shareholder Information - The company did not declare any interim dividends for the six months ended June 30, 2020, consistent with the same period in 2019[100]. - The company has implemented a share award plan approved by the board on January 5, 2015, aimed at incentivizing directors and employees[143]. - The stock option plan was adopted on December 19, 2017, to attract and retain quality personnel, with a maximum issuance of 130,000,000 shares, approximately 1.9% of the issued share capital at the time[145]. - The company reported a total of 6,881,287 thousand shares issued and fully paid as of June 30, 2020, an increase from 6,743,436 thousand shares as of January 1, 2019, representing an increase of about 2.0%[115]. - As of June 30, 2020, Hon Hai Precision Industry Co., Ltd. (Foxconn) holds 5,179,557,888 shares, representing 75.27% of the total equity[141].

Financial Performance - Revenue for the year ended December 31, 2019, was $4,372,382 thousand, representing an increase from $4,005,635 thousand in 2018, a growth of 9.2%[6] - Gross profit for 2019 was $754,195 thousand, with a gross margin of 17.2%, slightly down from 17.7% in 2018[6] - Operating profit decreased to $275,170 thousand in 2019, resulting in an operating margin of 6.3%, down from 7.7% in the previous year[6] - Profit attributable to owners of the company was $235,414 thousand, a marginal increase from $233,946 thousand in 2018, reflecting a profit margin of 5.4%[6] - In 2019, the company's revenue reached $4,372 million, representing a growth of 9.2% compared to 2018, while net profit increased by 0.3% to $233.3 million[16] - Total comprehensive income for the year was $199,308 thousand, significantly higher than $141,066 thousand in 2018, representing an increase of about 41.2%[183] - The company reported a financial loss of $7,496 thousand in 2019, compared to a financial income of $2,917 thousand in 2018, reflecting a significant change in financial performance[181] - The company experienced a foreign exchange loss of $37,511 thousand in 2019, an improvement from a loss of $90,080 thousand in 2018[183] Assets and Liabilities - Total assets as of December 31, 2019, were $4,407,029 thousand, compared to $4,309,744 thousand in 2018, indicating a growth of 2.3%[7] - Current assets were $2,741,909 thousand, while current liabilities were $1,662,178 thousand, resulting in a current ratio of 1.65[7] - Total liabilities decreased from $2,362,416 thousand in 2018 to $2,329,682 thousand in 2019, a reduction of about 1.39%[185] - The company’s total liabilities increased to $1,666,774 thousand in 2019 from $1,547,829 thousand in 2018[190] - Cash and cash equivalents decreased from $1,065 million in 2018 to $892 million in 2019, while short-term bank deposits increased from $6 million to $118 million[34] Market Performance - The automotive, industrial, and medical end markets saw a revenue increase of 62.3% in 2019 compared to 2018, driven by strategic investments in interconnect solutions[16] - The smart home end market revenue surged by 622.0% in 2019 compared to 2018, significantly boosted by the merger with Belkin International[17] - The smart accessories market revenue grew by 83.7% in 2019 compared to 2018, reflecting the company's focus on innovative product offerings[18] - Mobile devices remained the largest revenue contributor, with a 1.6% increase in revenue in 2019, despite some declines due to changes in smartphone standards[16] - The communication infrastructure end market experienced a revenue decline of 5.8% in 2019 compared to 2018, impacted by inventory reductions and trade conflicts[16] - The computer and consumer electronics end market saw a revenue decrease of 14.9% in 2019, attributed to product structure changes and intensified market competition[16] Research and Development - Research and development expenses increased by 10.0% from $227 million in 2018 to $250 million in 2019, primarily due to investments in 400G optical communication products and automotive applications[30] - The company plans to continue expanding its R&D investments in automotive applications and explore strategic partnerships for interconnect solutions[16] - The company is actively engaged in research and development of new products and technologies to enhance its competitive edge[190] Corporate Governance - The board consists of three executive directors and four independent non-executive directors, ensuring compliance with listing rules regarding independent director appointments[126] - The company has established three board committees: Audit Committee, Remuneration Committee, and Nomination Committee, to oversee specific areas of governance[126] - The company has confirmed the independence of all independent non-executive directors throughout the reporting period[73] - The audit committee consists of three independent non-executive directors, responsible for overseeing the appointment and remuneration of external auditors[140] Strategic Initiatives - The company completed the integration of Belkin International Inc., enhancing its position in the smart accessories and smart home markets[12] - The company is focusing on expanding its presence in the 5G, automotive electronics, smart accessories, and smart home markets[11] - The company aims to leverage vertical integration and collaboration with Belkin to enhance its market position in consumer electronics[14] Employee and Management - Employee count increased from 40,500 as of December 31, 2018, to approximately 47,163 as of December 31, 2019, with total employee benefits expenses rising to $622 million in 2019 from $604 million in 2018[48] - The company has established a remuneration committee to review the remuneration policy based on operational performance and market practices[75] - The company encourages all directors to participate in professional development to enhance their knowledge and skills[129] Inventory and Supply Chain - The average inventory turnover days increased to 68 days in 2019 from 65 days in 2018, indicating a slight decrease in inventory efficiency[8] - Inventory increased from $650 million as of December 31, 2018, to $703 million as of December 31, 2019, primarily due to the expansion in Vietnam and early preparation for the 2020 Spring Festival[39] Financial Reporting and Compliance - The financial statements have been prepared in accordance with International Financial Reporting Standards and reflect the group's financial position accurately as of December 31, 2019[170] - The audit identified key audit matters, including inventory impairment and goodwill impairment assessments, which are significant to the financial statements[173] - The company has implemented key control procedures related to inventory valuation and impairment assessments[174] Shareholder Relations - Effective communication with shareholders is prioritized, with timely updates provided on the investor relations website to enhance investor understanding of the company's performance and strategies[163] - Shareholders have the right to propose resolutions at annual general meetings, with voting procedures detailed in the circular sent to shareholders[164]

Financial Performance - For the six months ended June 30, 2019, the company's revenue was $1,918.3 million, an increase of 11.6% compared to $1,719.4 million in the same period of 2018[13]. - Gross profit for the same period was $376.4 million, reflecting a 27.7% increase from $294.7 million year-over-year[13]. - Operating profit decreased by 12.9% to $121.8 million from $139.8 million in the prior year[13]. - Net profit attributable to the company's owners was $101.8 million, down 5.6% from $107.6 million in the previous year[13]. - The gross margin improved to 19.6% from 17.1%, an increase of 14.6% year-over-year[11]. - The operating profit margin decreased to 6.4% from 8.1%, a decline of 21.0%[11]. - Revenue for the six months ended June 30, 2019, was $1,918 million, an increase of 11.6% compared to $1,719 million for the same period in 2018[24]. - Net profit for the period decreased by 5.6% from $107 million for the six months ended June 30, 2018, to $101 million for the same period in 2019, with a profit margin decline from 6.2% to 5.3%[35]. - Basic earnings per share for the company owners was $1.55, slightly down from $1.60 in the previous year[61]. - The company reported a decrease in cash and cash equivalents of $19,587 thousand for the six months ended June 30, 2019, compared to an increase of $347,088 thousand in the same period of 2018[68]. Revenue Segmentation - The mobile devices segment saw a revenue decline of 9.4% due to the removal of headphone jacks in new smartphone models[16]. - Revenue from the communications infrastructure segment decreased by 3.0% due to reduced customer demand[16]. - Revenue from the computer and consumer electronics segment dropped by 21.5% due to changes in product design and new gaming console models[16]. - Revenue from the automotive, industrial, and medical terminal markets increased by 100.5% for the six months ended June 30, 2019, compared to the same period in 2018[17]. - Revenue from the smart home market increased by 3,235.9% for the six months ended June 30, 2019, compared to the same period in 2018, following the acquisition of Belkin International[19]. - Revenue from the smart accessories market increased by 662.9% for the six months ended June 30, 2019, compared to the same period in 2018, also due to the acquisition of Belkin International[19]. - Revenue breakdown by region shows a significant increase in the US market, reaching $732,352 thousand, up 27.8% from $573,223 thousand in 2018[92]. - Revenue from China decreased to $518,174 thousand, down 19.2% from $640,836 thousand in 2018[92]. Expenses and Costs - R&D expenses rose by 34.4% to $121 million for the six months ended June 30, 2019, due to ongoing investments in 400G optical communication products and automotive applications[32]. - Distribution and selling expenses increased by 90.0% to $57 million, mainly due to the acquisition of Belkin International[30]. - Administrative expenses rose by 68.6% to $86 million, driven by the acquisition of Belkin International and increased employee compensation[31]. - Cost of goods sold for the period was $1,025,979 thousand, an increase of 19.2% from $861,028 thousand in 2018[96]. Cash Flow and Liquidity - Cash generated from operating activities for the six months ended June 30, 2019, was $256,464 thousand, down from $374,996 thousand in the same period of 2018, resulting in a net cash inflow of $200,323 thousand[68]. - The company incurred a net cash outflow from investing activities of $96,546 thousand, compared to $45,350 thousand in the previous year, primarily due to increased purchases of property, plant, and equipment totaling $111,712 thousand[68]. - The financing activities resulted in a net cash outflow of $123,364 thousand, significantly impacted by the repayment of bank loans amounting to $862,655 thousand[68]. - As of June 30, 2019, cash and cash equivalents amounted to $1,044 million, down from $1,065 million as of December 31, 2018[36]. Assets and Liabilities - Total assets as of June 30, 2019, amounted to $4,263,819 thousand, a decrease from $4,309,744 thousand at the end of 2018[64]. - Total liabilities were $2,299,123 thousand, down from $2,362,416 thousand, indicating a reduction in overall debt[65]. - Trade receivables decreased from $935 million as of December 31, 2018, to $805 million as of June 30, 2019, due to improved management of overdue receivables[45]. - Trade payables decreased from $722 million as of December 31, 2018, to $708 million as of June 30, 2019, primarily due to seasonal procurement reductions[46]. Strategic Focus and Future Outlook - The company plans to focus strategically on mobile devices, automotive, industrial, and medical terminal markets, which are anticipated to be the main growth drivers in the second half of 2019[22]. - Strong demand is anticipated for headphones and related products, with plans to further penetrate the Android smartphone customer base[22]. - The company plans to continue its market expansion and product development strategies to enhance future growth prospects[115]. - The company is considering strategic acquisitions to enhance its product portfolio, with a budget of $300 million allocated for potential mergers[163]. Corporate Governance and Compliance - The board of directors has adhered to the corporate governance code and principles applicable to the company, with a commitment to high standards of corporate governance[154]. - The audit committee, consisting of three independent non-executive directors, reviewed the unaudited condensed consolidated interim financial information for the six months ended June 30, 2019[158]. - The company confirmed no significant changes in financial information compared to the disclosures in the 2018 annual report as of June 30, 2019[159]. Shareholder Information - The company’s major shareholders include Lu Songqing with 123,720,000 shares, representing 1.83% of the total shares[140]. - Foxconn holds 5,179,557,888 shares, representing 76.48% of the total equity[144]. - The share option plan allows for a maximum issuance of 130,000,000 shares, approximately 1.9% of the issued share capital as of the adoption date[150].

Financial Performance - For the fiscal year ended December 31, 2018, FIT Hon Teng Limited reported revenue of $4,005,635 thousand, a 17.6% increase from $3,398,803 thousand in 2017[25]. - The gross profit for 2018 was $708,077 thousand, reflecting a gross margin of 17.7%, up from 16.0% in 2017[24][25]. - Operating profit increased to $308,552 thousand in 2018, resulting in an operating margin of 7.7%, compared to 6.5% in the previous year[24][25]. - The net profit attributable to owners of the company was $232,675 thousand, representing a profit margin of 5.8%, an increase from 5.3% in 2017[24][25]. - In 2018, the company's revenue reached $4,006 million, representing a growth of 17.9% compared to 2017, while profit increased by 29.4% to $233 million[38]. - Annual profit rose by 29.4% from $180 million in 2017 to $233 million in 2018, with a profit margin increase from 5.3% to 5.8%[58]. Asset and Liquidity Management - Current assets rose to $2,752,810 thousand in 2018, up from $2,412,019 thousand in 2017, indicating improved liquidity[26]. - Total assets increased to $4,309,744 thousand, compared to $3,180,634 thousand in 2017, showing significant growth in the company's asset base[26]. - Cash and cash equivalents increased to $1,065 million as of December 31, 2018, up from $768 million a year earlier[59]. - Trade receivables decreased from 993 million USD as of December 31, 2017, to 935 million USD as of December 31, 2018, due to improved collection efforts[64]. - Trade payables increased from 589 million USD as of December 31, 2017, to 722 million USD as of December 31, 2018, driven by increased procurement due to higher customer demand[65]. Market Expansion and Strategic Initiatives - The company completed the acquisition of Belkin International Inc. in September 2018, enhancing its capabilities in smart accessories and smart home markets[30]. - FIT plans to actively expand into 5G, communications, automotive electronics, and smart home markets, leveraging its technological advantages[30][31]. - The company plans to integrate resources between FIT and Belkin to expand product lines and enhance competitiveness in 2019[35]. - The company is investing in the development of automotive electronic systems and autonomous driving components[46]. - The company is focused on strategic growth in mobile devices, communication infrastructure, and automotive sectors in 2019[45]. Revenue Growth by Market Segment - Revenue from the automotive, industrial, and medical end markets surged by 38.2% in 2018 due to increased R&D investments and strategic partnerships[38]. - The smart home market revenue skyrocketed by 366.9% in 2018 following the successful acquisition of Belkin International, Inc.[39]. - The smart accessories market revenue increased by 387.5% in 2018, also attributed to the acquisition of Belkin International, Inc.[41]. - The mobile device market generated revenue growth of 9.3% in 2018, driven by new smartphone product launches and related interconnect solutions[38]. - The optical module business saw an 8.5% revenue increase in 2018, benefiting from the growing demand for high-end (100G) optical modules and CPU slots[38]. Inventory and Operational Efficiency - The average inventory turnover days increased to 65 days in 2018, compared to 58 days in 2017, indicating a slower inventory turnover[27]. - Inventory increased from 528 million USD as of December 31, 2017, to 650 million USD as of December 31, 2018, primarily due to the acquisition of Belkin International[62]. - The company aims to enhance production efficiency and flexibility through automation and process optimization[45]. Research and Development - Research and development expenses increased by 19.5% from $190 million in 2017 to $227 million in 2018, driven by investments in 400G optical communication products and automotive applications[55]. - The company anticipates continued strong demand for connectors driven by the expansion of data centers and the deployment of 5G networks[42]. Corporate Governance and Management - The company has a strong board of directors with diverse backgrounds in technology, finance, and management, enhancing its strategic decision-making capabilities[81][82]. - The company emphasizes the importance of independent directors for governance and oversight, ensuring transparency and accountability in its operations[82]. - The board consists of 3 executive directors, 1 non-executive director, and 3 independent non-executive directors[150]. - The company has established a remuneration committee to review the compensation policies based on performance and market practices[101]. - The company has adopted a board diversity policy, considering factors such as gender, age, race, and industry experience to enhance board effectiveness[178]. Shareholder Relations and Dividends - The proposed final dividend is HKD 0.07 per share, with a payout ratio of approximately 26%[36]. - The company has adopted a dividend policy that considers financial performance, cash flow, business conditions, future operations, capital needs, and any restrictions on dividend payments[192]. - The company emphasizes effective communication with shareholders to strengthen investor relations and ensure timely disclosure of information for informed investment decisions[193]. Related Party Transactions - Purchases from the top five suppliers represented 39.4% of total procurement for the year ended December 31, 2018, compared to 38.2% in 2017, with the largest supplier accounting for 15.3% of total procurement, an increase from 13.1% in 2017[94]. - The company has entered into a non-competition agreement with Hon Hai Precision Industry Co., Ltd., ensuring that it will not engage in any competing business activities related to its operations[120]. Audit and Compliance - The auditor, PwC, has been appointed for the fiscal year ended December 31, 2018, and will be proposed for reappointment at the upcoming annual general meeting[147]. - The independent auditor's report confirms that the consolidated financial statements reflect the group's financial position as of December 31, 2018, in accordance with International Financial Reporting Standards[199]. - The company has established a mechanism for handling and disclosing insider information, ensuring compliance with relevant regulations and approval processes[188].