Financial Performance - Operating revenue for the year ended 2022 was RMB 53,491 million, an increase from RMB 50,928 million in 2021, representing a growth of 4.1%[5] - The net profit attributable to equity holders of the company decreased to RMB 827 million from RMB 1,634 million in 2021, a decline of 49.3%[5] - Cash generated from operating activities increased significantly to RMB 5,148 million, up 313.8% from RMB 1,244 million in the previous year[5] - The gross profit margin decreased to 15.3%, down 1.5 percentage points from 16.8% in 2021[5] - The overall revenue for the fiscal year ending December 31, 2022, was RMB 53,491 million, representing a 5.0% increase from RMB 50,928 million in the previous year[15] - Revenue from the mainland China market reached RMB 36,564 million, an increase of RMB 3,344 million or 10.1% compared to RMB 33,220 million in the previous year[18] - Revenue from overseas markets was RMB 16,927 million, accounting for 31.6% of total revenue, which is a decrease of RMB 781 million or 4.4% from RMB 17,708 million in the previous year[19] - The multimedia business recorded revenue of RMB 23,080 million for the year ended December 31, 2022, a decrease of RMB 4,290 million or 15.7% compared to the previous year[23] - Revenue from smart TV system products in the Chinese market was RMB 9,891 million, down RMB 3,058 million or 23.6% year-on-year[23] - The smart appliance business recorded revenue of RMB 4,393 million, a slight increase of RMB 18 million or 0.4% from the previous year[35] Business Development and Strategy - The company launched the new Q53 PRO series wallpaper TV, enhancing product competitiveness in the television segment[7] - The company aims to enhance its competitive edge by reforming its domestic offline marketing network and strengthening online sales capabilities[15] - The company plans to optimize its organizational structure and improve per capita efficiency by simplifying processes and reducing unnecessary management[15] - The company is committed to advancing its smart systems technology and new energy business in response to the global clean energy development trend and China's dual carbon strategy[15] - The company is focusing on high-end TV products and expanding its sales strategies to increase market share amid competitive pressures[24] - The company is actively exploring new retail channels and live streaming platforms to boost brand exposure and sales in overseas markets[26] - The company aims to strengthen its brand influence through product launches and promotional events in international markets[26] - The group aims to expand its photovoltaic business and explore strategic partnerships with upstream suppliers to enhance market competitiveness[34] - The group is focusing on technological innovation and product development in smart appliances, emphasizing health, energy efficiency, and intelligence[36] - The group is committed to optimizing its organizational structure and integrating new business expansions to create favorable conditions for future development[41] New Energy Business - The new energy business saw the installation of over 140,000 household photovoltaic power stations, with a cumulative total exceeding 200,000, positioning the company among the industry leaders[8] - The group's revenue from the new energy business reached RMB 11,934 million, an increase of RMB 7,833 million or 191.0% compared to the previous year[31] - The total installed capacity of distributed photovoltaic power stations exceeded 200,000 households, with over 140,000 new households connected to the grid during the year[31] - The group launched upgraded products that are more aesthetically pleasing and functional to meet diverse user needs in the distributed photovoltaic market[31] - The group is actively responding to the "dual carbon" goals through its photovoltaic business, focusing on technological innovation and sustainable practices[57] Financial Position and Investments - The debt-to-equity ratio improved to 69.7%, down 6.9 percentage points from 76.6% in the previous year[5] - The company’s market capitalization was HKD 8,660 million, down from HKD 14,562 million[5] - The company’s stockholders' equity attributable to the company was RMB 17,867 million, slightly down from RMB 18,045 million in 2021[5] - The group's total current assets as of December 31, 2022, were RMB 10,899 million, a decrease of RMB 2,826 million or 20.68% from December 31, 2021[45] - The group's total bank loans as of December 31, 2022, amounted to RMB 15,257 million, an increase from RMB 14,262 million as of December 31, 2021[46] - The group has invested in 52 unlisted companies with a total investment value of RMB 2,322 million as of December 31, 2022[48] - The group invested a total of RMB 1,402 million in expanding factories in Ningbo, Wuhan, Shenzhen, Guangzhou, and Qianhai, along with an additional RMB 836 million for acquiring properties, factories, and equipment[54] Corporate Governance and Management - The company emphasizes its commitment to corporate governance and investor relations, with Lin Chengcai overseeing these functions[68] - The company has been involved in various national and provincial research projects, enhancing its technological capabilities[65] - The executive team collectively brings extensive experience and educational backgrounds, contributing to the company's strategic direction and operational management[62][63][65][68] - The company has a strong focus on innovation, with Wu holding 13 authorized invention patents and participating in significant national projects[78] - The company is committed to maintaining high standards in corporate governance through its independent non-executive directors[71][75] - The board of directors includes members with diverse expertise, enhancing the company's strategic decision-making capabilities[78] - The company has established a shareholder communication policy to maintain effective dialogue with shareholders, which is regularly reviewed by the board[166] - The board consists of 8 members, including 5 executive directors and 3 independent non-executive directors, ensuring balanced and independent oversight of management practices[174] - The company has established a diversity policy, which is reviewed annually by the nomination committee to ensure independent perspectives are obtained[168] Shareholder and Stock Information - The company’s share option plan is valid for 10 years from the date of adoption, expiring on August 19, 2024[122] - The total number of stock options granted under the 2014 stock option plan was 283,100,239 shares at the beginning and end of the fiscal year[126] - The total number of stock options available for employees was 61,342,000, with 24,328,000 remaining unexercised as of December 31, 2022[125] - The total number of stock options available for directors was 32,000,000, with 10,000,000 remaining unexercised as of December 31, 2022[124] - The company did not cancel any stock options during the fiscal year[126] - The company repurchased a total of 107,232,000 shares at a total cost of approximately HKD 444.49 million during the reporting year[99] - The company has no existing management or administrative contracts related to its overall or any significant part of its business during the reporting year[109] - The company has purchased suitable liability insurance for its directors to provide protection against legal claims arising from the group's business[109] Compliance and Risk Management - The company adopted anti-fraud and anti-corruption policies in March 2022, which include guidelines on business ethics and mechanisms for reporting corruption[166] - The company has maintained compliance with the corporate governance code throughout the reporting year, ensuring transparency and accountability to shareholders[165] - The audit committee reviewed the accounting principles and practices adopted by the group and discussed audit and financial reporting matters, including the financial statements for the year ended December 31, 2022[159] - The committee monitored the financial reporting system, risk management, and internal control systems of the group[198] - The financial risk management details are disclosed in the consolidated financial statements, highlighting the group's approach to managing financial risks[84]

Financial Performance - Total revenue for the year ended December 31, 2022, was RMB 53,491 million, representing a 5.0% increase from RMB 50,928 million in 2021[2] - Gross profit decreased by 4.0% to RMB 8,207 million compared to RMB 8,548 million in the previous year[2] - Net profit for the year was RMB 1,407 million, down 28.4% from RMB 1,965 million in 2021[2] - Profit attributable to equity holders of the company was RMB 827 million, a decline of 49.4% from RMB 1,634 million in the prior year[4] - Basic earnings per share decreased to 31.97 cents from 62.11 cents in 2021[4] - The company's operating profit before tax for 2022 was RMB 1,819 million, a decrease of 29% from RMB 2,552 million in 2021[7] - The group reported a pre-tax consolidated profit of RMB 1,819 million for the year ended December 31, 2022[27] - The overall gross margin for the group was 15.3%, down 1.5 percentage points from 16.8% in the previous year[68] Revenue Breakdown - The multimedia business generated RMB 23,080 million in revenue, while the smart systems technology business contributed RMB 11,933 million, and the new energy business accounted for RMB 11,934 million[21] - Revenue from customer contracts recognized at a point in time was RMB 51,538 million, while revenue recognized over time was RMB 1,351 million, indicating a strong reliance on point-in-time revenue recognition[21] - The smart home appliance segment generated RMB 4,569 million in revenue, with significant contributions from smart white goods and other smart appliances[21] - The multimedia business saw a decline in revenue from RMB 27,370 million in 2021 to RMB 23,080 million in 2022, a decrease of approximately 15.5%[22] - The smart systems technology business experienced a slight increase in revenue from RMB 10,911 million in 2021 to RMB 11,933 million in 2022, representing an increase of about 9.4%[22] - The new energy business reported a significant increase in revenue from RMB 4,101 million in 2021 to RMB 11,934 million in 2022, marking a growth of approximately 190%[22] - The group reported a total of RMB 52,889 million in revenue from customer contracts, highlighting the importance of these contracts to overall performance[21] Assets and Liabilities - Total assets increased to RMB 46,426 million in 2022 from RMB 45,050 million in 2021[5] - Total liabilities increased to RMB 35,527 million in 2022, up from RMB 31,325 million in 2021, reflecting a growth of approximately 13.9%[6] - The company's total assets minus current liabilities decreased to RMB 28,883 million in 2022 from RMB 29,556 million in 2021, a decline of about 2.3%[6] - The company's cash and cash equivalents at the end of 2022 were RMB 9,054 million, down from RMB 10,611 million at the end of 2021, a decrease of about 14.6%[9] - The company's trade payables amounted to RMB 8,650 million, a slight decrease from RMB 8,736 million in 2021[48] Investments and Expenditures - The net cash used in investing activities was RMB (5,051) million in 2022, compared to RMB (1,220) million in 2021, indicating a significant increase in investment outflows[8] - The company invested a total of RMB 1,402 million in expanding factories in Ningbo, Wuhan, Shenzhen, Guangzhou, and Qianhai during the reporting year[76] - An additional RMB 836 million was invested in acquiring other properties, plants, and equipment to enhance production capacity and efficiency[76] Research and Development - Research and development expenses were RMB 2,116 million, slightly up from RMB 2,097 million in 2021[3] - The company plans to enhance its research and development efforts in smart home appliances and internet value-added services to capture emerging market opportunities[10] - Research and development expenses increased to RMB 2,116 million, up RMB 19 million or 0.9% year-on-year, with an R&D expense ratio of 4.0%[69] Market and Strategic Focus - The company is focusing on digital technology and accelerating the development of smart system technology business[51] - The group aims to enhance product competitiveness and innovation through the development of new technologies, including 5G and AI applications[78] - The group is committed to achieving high-margin and high-value products to maintain market leadership in the smart home appliance sector[78] - The group plans to leverage its strengths in multimedia and digital technology to capitalize on opportunities in global economic digitalization and low-carbon initiatives[78] Corporate Governance and Compliance - The company has adhered to corporate governance codes to enhance transparency and accountability to shareholders[81] - The company adopted the revised Hong Kong Financial Reporting Standards (HKFRS) 16, which specifies that costs incurred to make property, plant, and equipment operational should be recognized in profit or loss[12] - The application of the revised standards did not have a significant impact on the company's financial performance or position for the current and prior years[12] Employee and Operational Metrics - As of December 31, 2022, the group had approximately 31,400 employees, a decrease from 34,000 employees as of December 31, 2021[77] - The company’s employee costs totaled RMB 4,869 million in 2022, up from RMB 4,696 million in 2021, indicating an increase of approximately 3.7%[36] Dividends and Shareholder Returns - The board did not recommend a final dividend for the year due to ongoing share buyback programs[2] - The company declared an interim dividend of RMB 69 million for 2022, compared to no interim dividend in 2021, while the final dividend for 2021 was RMB 497 million[37] - The company did not declare a final dividend for the year ending December 31, 2022, compared to a final dividend of HKD 0.23 per share in 2021[37] Cash Flow and Financial Position - The net cash generated from operating activities increased significantly to RMB 5,148 million in 2022, compared to RMB 1,244 million in 2021[7] - The company's cash and bank balances were RMB 9,054 million as of December 31, 2022, down from RMB 10,611 million on December 31, 2021, representing a decrease of RMB 1,557 million or 14.7%[70] - The total bank loans amounted to RMB 15,257 million as of December 31, 2022, an increase from RMB 14,262 million on December 31, 2021[71]

Financial Performance - Total revenue for the nine months ended September 30, 2022, was RMB 38,419 million, representing a 7.0% increase from RMB 35,891 million in the same period of 2021[2] - Gross profit for the same period was RMB 6,017 million, up 3.1% from RMB 5,838 million year-on-year[2] - Profit attributable to equity holders of the company decreased by 32.1% to RMB 518 million from RMB 763 million in the previous year[2] - Excluding the impact of fair value changes, profit attributable to equity holders increased by approximately 71.3% compared to the same period last year[2] - The company reported total comprehensive income of RMB 431 million for the period, down from RMB 1,328 million in the previous year[5] - Basic earnings per share for the period were RMB 19.92, compared to RMB 29.01 in the same period last year[5] - The overall gross margin for the nine months ended September 30, 2022, was 15.7%, a decrease of 0.6 percentage points from 16.3% in the same period last year[24] Revenue Breakdown - Revenue from the mainland China market was approximately RMB 25,681 million, an increase of RMB 2,371 million or 10.2% compared to RMB 23,310 million in the same period last year[11] - Revenue from overseas markets was RMB 12,738 million, accounting for 33.2% of total revenue, with a slight increase of RMB 157 million or 1.2% compared to RMB 12,581 million last year[12] - The multimedia business accounted for 35.5% of the mainland China market revenue, down from 50.4% in the previous year, while the new energy business increased to 30.5% from 9.4%[11] - The multimedia business revenue decreased to RMB 16,977 million, a decline of RMB 2,687 million or 13.7% from RMB 19,664 million in the same period last year[16] - The revenue from smart TV system products in the mainland China market for the nine months ended September 30, 2022, was RMB 6,980 million, a decrease of RMB 1,950 million or 21.8% compared to the same period last year[17] - The revenue from smart TV system products in overseas markets for the same period was RMB 6,137 million, down RMB 1,142 million or 15.7% year-on-year[18] - The revenue from the internet value-added services of the Cool Open system reached RMB 988 million, an increase of RMB 58 million or 6.2% compared to the previous year[19] - The smart system technology business in the mainland China market recorded revenue of RMB 5,168 million, an increase of RMB 276 million or 5.6% year-on-year[20] - The overseas revenue for the smart system technology business was RMB 3,818 million, an increase of RMB 1,045 million or 37.7% compared to the previous year[20] - The revenue from smart appliances in the mainland China market was RMB 2,449 million, an increase of RMB 348 million or 16.6% year-on-year[21] - The overseas revenue for smart appliances was RMB 924 million, a decrease of RMB 289 million or 23.8% compared to the previous year[21] - The revenue from the new energy business for the nine months ended September 30, 2022, reached RMB 7,821 million, an increase of RMB 5,631 million or 257.1% compared to RMB 2,190 million in the same period last year[22] Expenses and Cash Flow - Research and development expenses for the nine months were RMB 1,549 million, compared to RMB 1,475 million in the previous year[4] - Sales and distribution expenses for the nine months ended September 30, 2022, were RMB 2,538 million, a decrease of RMB 336 million or 11.7% from RMB 2,874 million in the same period last year[25] - The ratio of sales and distribution expenses to revenue for the nine months ended September 30, 2022, was 6.6%, a decrease of 1.4 percentage points from 8.0% in the same period last year[25] - The ratio of general and administrative expenses to revenue for the nine months ended September 30, 2022, was 2.9%, an increase of 0.3 percentage points from 2.6% in the same period last year[25] - The net cash flow from operating activities for the nine months ended September 30, 2022, was RMB 2,975 million, compared to a cash outflow of RMB 518 million in the previous year[8] - The cash and cash equivalents at the end of the period were RMB 9,203 million, compared to RMB 9,056 million at the end of the same period last year[9] Strategic Initiatives - The company plans to utilize cash for share buybacks under suitable market conditions[1] - The company plans to implement a five-year strategic transformation plan focusing on multimedia, smart system technology, smart appliances, new energy, and modern service industries[15] - The company plans to shift its sales strategy towards high-end TV products like OLED to improve market share amid ongoing competition and pandemic impacts[17] - The company has successfully expanded its e-commerce business to mitigate the negative impacts of the pandemic on offline sales channels[18] - The company aims to leverage strategic partnerships with internet giants to accelerate the development of its smart home and smart city businesses[19] - The company aims to develop a one-stop solution provider model integrating finance, installation, and after-sales services in the photovoltaic sector[22] - The company continues to enhance supply chain management and strategic cooperation with key suppliers in the modern service industry[23] - The company aims to leverage opportunities in global economic digitalization, focusing on green building and smart system development to enhance user experience and promote green economic growth[26] - The company plans to develop new products using "5G+AI+end devices" technology to improve product competitiveness and expand into the smart home system market[26] Operational Resilience - The company has implemented strict internal pandemic prevention measures to minimize operational risks, ensuring no production stoppages or shipment delays occurred during the reporting period[26] - The company is closely monitoring market uncertainties, including interest rate hikes in major economies, geopolitical tensions, and rising transportation costs, to make objective adjustments to its operational plans[26] Share Repurchase - The company repurchased shares amounting to RMB 345 million during the nine months ended September 30, 2022[8] - The company has completed the repurchase of all company notes, which were subsequently canceled, leading to the cessation of quarterly financial disclosures for its subsidiary starting January 1, 2023[27] Asset Management - Non-current assets as of September 30, 2022, totaled RMB 17,680 million, an increase from RMB 15,831 million as of December 31, 2021[6] - Current assets included trade receivables of RMB 10,348 million, down from RMB 12,142 million in the previous year[6]

Financial Performance - For the six-month period ending June 30, 2022, the operating revenue was RMB 24,284 million, an increase from RMB 22,567 million in the same period of 2021, representing a growth of approximately 7.6%[8] - The net profit for the period was RMB 631 million, compared to RMB 610 million in the previous year, reflecting a growth of about 3.4%[8] - The overall revenue for the six months ended June 30, 2022, was RMB 24,284 million, representing a 7.6% increase from RMB 22,567 million in the same period last year[13] - Total revenue for the six months ended June 30, 2022, was RMB 24,284 million, an increase of 7.6% from RMB 22,567 million in 2021[64] - Total revenue for the multimedia business reached RMB 10,626 million, while the smart systems technology business generated RMB 4,599 million, and the smart appliance business contributed RMB 2,200 million[85] - The new energy business reported revenue of RMB 829 million, with modern services and other businesses generating RMB 2,113 million, leading to a total revenue of RMB 22,567 million for the reporting period[85] Profitability Metrics - The gross profit margin decreased to 16.0%, down from 16.6% year-on-year, a decline of 0.6 percentage points[8] - The operating profit margin was 4.4%, a decrease from 4.7% in the previous year, representing a decline of 0.3 percentage points[8] - The return on equity for the company was 3.8%, down from 4.9% in the previous year, a decrease of 1.1 percentage points[8] - Basic earnings per share decreased to RMB 12.98 from RMB 15.54, a decline of 16.5% year-over-year[67] - Total comprehensive income for the period was RMB 270 million, significantly lower than RMB 1,053 million in 2021, a decrease of 74.3%[67] Cash Flow and Liquidity - Cash and cash equivalents increased significantly to RMB 12,471 million, up 35.5% from RMB 9,242 million in the prior year[8] - The company’s cash and cash equivalents stood at RMB 9,823 million, providing a strong liquidity position[70] - For the six months ended June 30, 2022, the net cash generated from operating activities was RMB 2,049 million[75] - The group’s cash and bank balances were RMB 9,823 million as of June 30, 2022, down RMB 788 million or 7.4% from RMB 10,611 million on December 31, 2021[48] Debt and Liabilities - The net debt to equity ratio improved to 71.7%, down from 77.3% year-on-year, a reduction of 5.6 percentage points[8] - Total bank loans reached RMB 14,505 million as of June 30, 2022, an increase from RMB 14,262 million on December 31, 2021[48] - The overall interest-bearing liabilities totaled RMB 15,407 million, a decrease from RMB 16,145 million on December 31, 2021, resulting in a debt-to-equity ratio of 71.7% compared to 76.6% previously[48] - Current liabilities amounted to RMB 33,378 million, indicating a slight increase from the previous year[71] Market Performance - The company's market capitalization was HKD 10,193 million as of the reporting date, with 2,627 million shares issued[8] - Sales volume of smart TV systems in the Chinese market decreased by 14.3% to 2,469 thousand units compared to 2,881 thousand units in the same period last year[14] - Revenue from the mainland China market was approximately RMB 16,101 million, an increase of RMB 1,469 million or 10.0% from RMB 14,641 million in the same period last year[17] - Revenue from overseas markets was RMB 8,174 million, accounting for 33.7% of total revenue, with a growth of RMB 248 million or 3.1% compared to RMB 7,926 million in the same period last year[17] Strategic Initiatives - The company plans to focus on high-end TV products like OLED to improve market share in response to competitive pressures and the impact of COVID-19[25] - The company aims to accelerate the development of smart systems and new energy businesses as part of its strategic transformation over the next five years[22] - The company has established an advanced R&D center in Nanjing to enhance its research capabilities and increase market share in smart appliances[34] - The company plans to continue developing household photovoltaic business while gradually expanding into commercial photovoltaic and comprehensive smart energy management[37] Research and Development - Research and development expenses were RMB 1,001 million for the six months ended June 30, 2022, an increase of RMB 21 million or 2.1% from RMB 980 million in the same period last year[47] - The company aims to enhance its brand value in the smart home appliance market by leveraging core patented technologies and expanding online and offline sales channels[37] Dividends - The company declared an interim dividend of HKD 0.03 per share, compared to HKD 0.0144 per share in the previous year, indicating a significant increase[12] - The board proposed an interim dividend of HKD 0.03 per share, totaling approximately RMB 69 million, compared to no dividend for the same period in 2021[170] Employment and Workforce - The workforce decreased to approximately 29,500 employees as of June 30, 2022, down from 34,000 employees at the end of 2021[59] Investments and Assets - The group reported a total asset value of RMB 44,230 million as of June 30, 2022, compared to RMB 43,000 million at the end of 2021[70] - The group held investments in 50 unlisted companies valued at RMB 2,797 million as of June 30, 2022, including a 10% stake in a company focused on manufacturing flat panel displays[50] Other Financial Metrics - The company incurred a net cash outflow from investing activities of RMB 1,876 million during the period[75] - The company reported a profit of RMB 409 million for the period, which is a decrease from RMB 610 million in the previous year[72] - The total tax expense for the period was RMB 198 million, compared to RMB 202 million in the same period last year[100]

Financial Performance - Total revenue for the three months ended March 31, 2022, was RMB 10,890 million, representing a 9.5% increase from RMB 9,943 million in the same period last year[2] - Gross profit for the same period was RMB 1,787 million, up 5.9% from RMB 1,687 million year-on-year[2] - Net profit for the period decreased by 40.1% to RMB 170 million, compared to RMB 284 million in the previous year[2] - Profit attributable to equity holders of the company was RMB 69 million, down 59.4% from RMB 170 million in the same period last year[2] - The company reported a basic earnings per share of RMB 2.63, down from RMB 6.45 in the same period last year[5] - The overall gross margin for the three months ended March 31, 2022, was 16.4%, a decrease of 0.6 percentage points from 17.0% in the same period last year[26] - The net loss from other income and expenses was RMB 256 million, a decrease of RMB 415 million compared to a net income of RMB 159 million in the same period last year[27] Revenue Breakdown - Revenue from the mainland China market was RMB 7,361 million, an increase of RMB 1,114 million or 17.8% from RMB 6,247 million in the same period last year[11] - Multimedia business revenue in the three months ended March 31, 2022, was RMB 5,184 million, a decrease of RMB 969 million or 15.7% from RMB 6,153 million in the same period last year[15] - The sales revenue of smart TV systems in the mainland China market was RMB 2,252 million, a decrease of RMB 535 million or 19.2% from RMB 2,787 million in the same period last year[16] - Revenue from overseas markets was RMB 3,529 million, accounting for 32.4% of total revenue, a decrease of RMB 167 million or 4.5% from RMB 3,696 million in the same period last year[12] - The revenue from the smart TV system products in overseas markets for the three months ended March 31, 2022, was RMB 1,659 million, a decrease of RMB 603 million or 26.7% compared to RMB 2,262 million in the same period last year[17] - The revenue from the Cool Open System's internet value-added services was RMB 370 million, a decrease of RMB 6 million or 1.6% compared to RMB 376 million in the same period last year[19] - The smart system technology business recorded revenue of RMB 2,750 million, an increase of RMB 490 million or 21.7% compared to RMB 2,260 million in the same period last year[20] - The smart appliance business generated revenue of RMB 991 million, an increase of RMB 30 million or 3.1% compared to RMB 961 million in the same period last year[21] - The new energy business revenue was RMB 1,516 million, a significant increase of RMB 1,361 million or 878.1% compared to RMB 155 million in the same period last year[23] Expenses and Costs - Research and development expenses for the three months were RMB 465 million, slightly down from RMB 492 million in the previous year[4] - Sales and distribution expenses for the three months ended March 31, 2022, were RMB 750 million, a decrease of RMB 139 million or 15.6% compared to RMB 889 million in the same period last year[28] - General and administrative expenses increased to RMB 351 million, up RMB 46 million or 15.1% from RMB 305 million year-on-year[28] - The R&D expenses as a percentage of revenue were 4.3%, down 0.6 percentage points from 4.9% in the same period last year[28] Assets and Liabilities - Total assets as of March 31, 2022, amounted to RMB 45,354 million, compared to RMB 45,050 million as of December 31, 2021[6] - Total assets less current liabilities amounted to RMB 28,682 million as of March 31, 2022, down from RMB 29,556 million as of December 31, 2021[7] - The company's net asset value was RMB 20,908 million as of March 31, 2022, slightly down from RMB 21,086 million as of December 31, 2021[7] Market and Strategic Focus - The company plans to focus on high-end TV products like OLED to improve market share in response to competitive pressures and the impact of COVID-19 variants[16] - The company aims to accelerate transformation in 2022, focusing on smart, refined, and international strategies across five business segments[29] - The company plans to expand into overseas markets, particularly in India, Southeast Asia, Africa, and continue developing in Europe and Latin America[29] - The company is committed to developing smart system control center products and promoting green building initiatives[29] - The company plans to continue expanding its smart appliance business and enhance its R&D capabilities through an independent listing on the Shenzhen Stock Exchange[22] - The company aims to develop a comprehensive new energy strategy, focusing on household photovoltaic systems and gradually expanding into commercial photovoltaic and smart energy management[23] Operational Challenges - The ongoing COVID-19 pandemic and its variants continue to pose uncertainties for the business environment, although no significant financial difficulties have been reported to date[30] - The sales volume in overseas markets decreased by 18.9% due to the severe impact of the COVID-19 pandemic and high shipping costs[18] - The total sales volume of smart TV systems was 2,781 thousand units, a decrease of 18.3% compared to 3,404 thousand units in the same period last year[10] Corporate Governance - The board has approved a share buyback plan, subject to suitable market conditions[2] - The company expresses gratitude to shareholders and business partners for their continued support and acknowledges the efforts of management and staff[31]

Financial Performance - Revenue for 2021 reached RMB 50,928 million, an increase of 27.0% compared to RMB 40,093 million in 2020[3] - Operating profit before interest and tax was RMB 3,013 million, up 15.0% from RMB 2,620 million in the previous year[3] - Net profit for the year was RMB 1,965 million, reflecting a growth of 7.1% from RMB 1,835 million in 2020[3] - The overall revenue for the fiscal year ending December 31, 2021, was RMB 50,928 million, representing a 27.0% increase from RMB 40,093 million in the previous year[38] - The gross profit margin for the fiscal year was 16.8%, a decrease of 1.1 percentage points compared to the previous year[40] - Sales volume of smart TV systems decreased by 18.0% to 13,977 thousand units, down from 17,048 thousand units in the previous year[41] - Revenue from the mainland China market was RMB 33,220 million, an increase of RMB 8,637 million or 35.1% from RMB 24,583 million in the previous year[44] - Revenue from overseas markets was RMB 17,708 million, accounting for 34.8% of total revenue, with a 14.2% increase from RMB 15,510 million in the previous year[45] - The multimedia business revenue was RMB 27,370 million, an increase of RMB 2,903 million or 11.9% from RMB 24,467 million in the previous year[50] - The smart appliance business recorded revenue of RMB 4,375 million for the year ended December 31, 2021, an increase of RMB 157 million or 3.7% compared to the previous year[64] - The group's new energy business revenue surged to RMB 4,101 million, a significant increase of RMB 3,997 million or 3,843.3% compared to the previous year[69] - The modern service industry business achieved revenue of RMB 3,932 million, an increase of RMB 1,452 million or 58.5% year-on-year[71] Market Expansion and Strategy - The company is actively expanding both domestic and international markets, with a focus on establishing a presence in Africa, ASEAN, Europe, and India[19] - The company aims to enhance its international strategy and expand overseas business to mitigate the impacts of COVID-19[39] - The company plans to spin off Skyworth Electric Co., Ltd. for independent listing on the A-share market, with the application materials accepted by the Shenzhen Stock Exchange[9] - The company aims to achieve a revenue target of RMB 100 billion by 2024 as part of its three-year development plan[16] - The company is focusing on transforming its business model towards modern service industries and software, leveraging new technologies and materials[39] - The company is exploring financial technology services by collaborating with financial institutions to enhance user experience and service capabilities on its OTT platform[87] - The company is considering strategic acquisitions to enhance its product portfolio and market presence, with a budget of up to HKD 1 billion allocated for potential deals[123] - Market expansion efforts include entering three new international markets, aiming for a 25% increase in overseas sales[123] Research and Development - The company added 1,457 new patents in 2021, bringing the total to 11,065 patents, enhancing product competitiveness[10] - The company emphasizes the importance of talent management and aims to strengthen its high-quality talent pool to improve research and development capabilities[27] - The group continues to invest heavily in R&D to enhance competitiveness, which has led to increased R&D expenses despite a decrease in the R&D expense to revenue ratio[76] - The company is investing HKD 500 million in research and development for new technologies in the upcoming year[123] - The group aims to enhance its research and development capabilities by constructing an advanced R&D center in Nanjing Industrial Park[64] Corporate Governance and Management - The management team is committed to improving corporate governance and investor relations, reflecting a strong focus on transparency and accountability[114] - The company has a diverse board with members holding significant shares, ensuring alignment with shareholder interests[104][105][109][113][116] - The board of directors remains committed to maintaining strong corporate governance and transparency in financial reporting[123] - The company has implemented strict quality control measures and conducts regular market surveys to improve product quality and customer satisfaction[151] Financial Position and Investments - The company’s cash position improved by 29.4%, reaching RMB 12,739 million compared to RMB 9,841 million in 2020[3] - The company’s net debt to equity ratio rose to 76.6%, up from 69.6% in 2020, indicating increased leverage[3] - Net current assets as of December 31, 2021, were RMB 13,725 million, an increase of RMB 2,208 million or 19.2% from RMB 11,517 million as of December 31, 2020[78] - Cash and bank balances increased to RMB 10,611 million, up RMB 2,397 million or 29.2% from RMB 8,214 million as of December 31, 2020[78] - Total bank loans amounted to RMB 14,262 million as of December 31, 2021, compared to RMB 11,387 million as of December 31, 2020[80] - The overall interest-bearing liabilities totaled RMB 16,145 million, an increase from RMB 13,224 million as of December 31, 2020, with a debt-to-equity ratio of 76.6%, up from 69.6%[80] - The company held investments in 40 unlisted companies valued at RMB 2,292.4 million as of December 31, 2021[82] - The company has made four equity investments in listed companies on the Hong Kong Stock Exchange, Shanghai Stock Exchange, or Shenzhen Stock Exchange, focusing on emerging industries such as semiconductors and new materials, which are expected to yield significant equity appreciation[88] Employee and Social Responsibility - The company expresses gratitude to its employees, shareholders, and partners for their support and contributions, aiming for greater success and shareholder returns in the coming year[28] - The company emphasizes the importance of employees as key drivers of business growth and provides various training programs to enhance their skills and awareness of environmental issues[150] - The company is committed to long-term environmental sustainability and has established a corporate social responsibility policy focusing on four main areas: work environment, environment, operational practices, and society[146] Product Development and Innovation - The company is accelerating the development of its photovoltaic business, focusing on distributed photovoltaic systems and exploring new business opportunities in energy storage and operation[21] - The introduction of Mini-LED technology provides a 25% energy saving and enhances user experience with superior picture quality[52] - The development of ultra-wideband antennas improved Wi-Fi connection stability by over 30%[52] - The group launched several flagship products, including the 8K OLED TV W92 and the world's first bendable OLED TV W82, enhancing its product lineup[52] - The company plans to leverage new technologies such as 5G, AI, and big data to launch new products including 5G+8K TVs and smart appliances, aiming to enhance product competitiveness and maintain performance in 2021[95] Shareholder Returns and Dividends - The company reported a final dividend of HKD 0.23 per share, totaling approximately RMB 497 million, compared to no dividend in 2020[144] - The company has adopted a dividend policy that allows for the declaration of dividends based on distributable profits, cash flow, and financial condition[145]

[Financial Highlights](index=3&type=section&id=%E8%B2%A1%E5%8B%99%E6%91%98%E8%A6%81) The company's financial highlights for the first half of 2021 show significant revenue growth, a slight increase in profit attributable to equity holders, and changes in key financial ratios and per-share metrics 2021 First Half Financial Highlights (For the Six Months Ended June 30) | Indicator Category | Indicator | 2021 First Half (Unaudited) | 2020 First Half (Unaudited) | Change | | :--- | :--- | :--- | :--- | :--- | | **Operating Results (RMB millions)** | **Revenue** | **22,567** | **15,979** | **+41.2%** | | | Operating Profit | 1,050 | 1,010 | +4.0% | | | Profit for the Period | 610 | 573 | +6.5% | | | **Profit Attributable to Equity Holders of the Company** | **409** | **391** | **+4.6%** | | **Financial Position (RMB millions)** | Cash Position | 9,242 | 7,901 | +17.0% | | | Borrowings | 13,580 | 7,849 | +73.0% | | | Equity Attributable to Equity Holders of the Company | 17,052 | 15,919 | +7.1% | | | Inventories | 8,746 | 5,388 | +62.3% | | **Key Ratios** | Gross Profit Margin | 16.6% | 19.3% | -2.7 percentage points | | | Net Profit Margin | 2.7% | 3.6% | -0.9 percentage points | | | Net Debt to Equity Ratio | 77.3% | 63.9% | +13.4 percentage points | | | Inventory Turnover Period (Days) | 78 | 79 | -1.3% | | **Per Share Data (RMB cents)** | **Earnings Per Share - Basic** | **15.54** | **12.87** | **+20.7%** | | | Earnings Per Share - Diluted | 14.44 | 12.11 | +19.2% | | | Book Value Per Share | 747.08 | 594.48 | +25.7% | [Company Information](index=4&type=section&id=%E5%85%AC%E5%8F%B8%E8%B3%87%E6%96%99) Skyworth Group Limited is a Bermuda-incorporated company listed on the Hong Kong Stock Exchange, with Deloitte Touche Tohmatsu as its auditor - Skyworth Group Limited is a company incorporated in Bermuda, with its shares listed on The Stock Exchange of Hong Kong Limited under stock code **00751**[5](index=5&type=chunk)[6](index=6&type=chunk) - The company's auditor is Deloitte Touche Tohmatsu[5](index=5&type=chunk) [Business and Financial Review](index=6&type=section&id=%E6%A5%AD%E5%8B%99%E5%8F%8A%E8%B2%A1%E5%8B%99%E5%9B%9E%E9%A1%A7) This section provides an overview of the group's operational performance, financial position, and key strategic initiatives during the reporting period [Performance Summary](index=6&type=section&id=%E6%A5%AD%E7%B8%BE%E6%91%98%E8%A6%81) In the first half of 2021, the Group's revenue significantly increased by 41.2% to RMB 22.567 billion, primarily driven by multimedia and smart system technology businesses, despite a decline in gross profit margin and a modest increase in profit for the period 2021 First Half Performance Summary | Indicator | Amount (RMB millions) | Prior Period | Remarks | | :--- | :--- | :--- | :--- | | **Revenue** | **22,567** | 15,979 | 64.9% from Mainland China market | | Gross Profit | 3,745 | - | Gross profit margin was 16.6%, compared to 19.3% in the prior period | | Profit for the Period | 610 | 573 | - | | Profit Attributable to Equity Holders | 409 | 391 | - | | Interim Dividend | Not distributed | Not applicable | Company may use cash for share repurchases | [Business Performance Review](index=7&type=section&id=%E6%A5%AD%E5%8B%99%E8%A1%A8%E7%8F%BE%E5%9B%9E%E9%A1%A7) Despite global pandemic challenges and rising raw material costs, the Group achieved strong revenue growth across both Mainland China and overseas markets, with significant contributions from multimedia and modern service businesses [Revenue Analysis](index=7&type=section&id=%E7%87%9F%E6%A5%AD%E9%A1%8D%E5%88%86%E6%9E%90) In the first half of 2021, the Group's total revenue reached RMB 22.567 billion, a 41.2% year-on-year increase, primarily due to global economic recovery, though rising raw material prices led to a decline in gross profit margin and a decrease in smart TV system sales - The Group's overall revenue increased by **41.2%** year-on-year, reaching **RMB 22,567 million**[8](index=8&type=chunk) - Affected by rising raw material prices, the Group's gross profit margin was **16.6%**, a **2.7 percentage point** decrease from the prior period[8](index=8&type=chunk) Smart TV System Sales Volume (Thousand Units) | Market | 2021 First Half | 2020 First Half | Change | | :--- | :--- | :--- | :--- | | China Market | 2,881 | 3,415 | (15.6%) | | Overseas Market | 3,852 | 3,613 | 6.6% | | **Total** | **6,733** | **7,028** | **(4.2%)** | [Geographical Segment Analysis](index=8&type=section&id=%E5%9C%B0%E5%8D%80%E5%88%86%E9%83%A8%E6%A5%AD%E5%8B%99%E5%88%86%E6%9E%90) The Group achieved strong revenue growth in both Mainland China and overseas markets, with Mainland China contributing 64.9% of total revenue and Asia (excluding Middle East) being the largest overseas market - Revenue from the Mainland China market increased by **40.8%** year-on-year, reaching **RMB 14.641 billion**[10](index=10&type=chunk) - Overseas market revenue increased by **42.0%** year-on-year, reaching **RMB 7.926 billion**, accounting for **35.1%** of the Group's total revenue[11](index=11&type=chunk) Overseas Market Revenue Geographical Distribution | Region | 2021 First Half (%) | 2020 First Half (%) | | :--- | :--- | :--- | | Asia (excluding Middle East) | 60 | 58 | | Europe | 12 | 14 | | Middle East | 10 | 12 | | Americas | 10 | 6 | | Africa | 7 | 9 | | Oceania | 1 | 1 | [Business Segment Analysis](index=9&type=section&id=%E6%A5%AD%E5%8B%99%E6%9D%BF%E5%A1%8A%E5%88%86%E6%9E%90) All four of the Group's business segments achieved growth, with multimedia business revenue increasing by 45.4% due to new photovoltaic operations, and modern service business revenue in Mainland China surging by 131.0% Revenue by Business Segment (RMB millions) | Business Segment | 2021 First Half | 2020 First Half | Year-on-Year Growth | | :--- | :--- | :--- | :--- | | Multimedia Business | 13,655 | 9,394 | +45.4% | | Smart System Technology Business | 4,599 | 3,805 | +20.9% | | Smart Appliances Business | 2,200 | 1,880 | +17.0% | | Modern Service Business | 1,987 | 899 | +121.0% | - The photovoltaic business, a new segment within multimedia, generated **RMB 829 million** in revenue during the period[20](index=20&type=chunk) - Coolita system's internet value-added service revenue reached **RMB 605 million**, a **19.6%** year-on-year increase, covering over **96 million** smart terminals cumulatively[19](index=19&type=chunk) - Modern service business revenue in the Mainland China market increased by **131.0%** year-on-year, reaching **RMB 1.751 billion**[24](index=24&type=chunk) [Gross Profit Margin](index=14&type=section&id=%E6%AF%9B%E5%88%A9%E7%8E%87) In the first half of 2021, the Group's overall gross profit margin decreased by 2.7 percentage points to 16.6%, primarily due to rising upstream supply chain costs, particularly for key raw materials in smart TV systems and smart appliances - The Group's overall gross profit margin was **16.6%**, a **2.7 percentage point** decrease from **19.3%** in the prior period[26](index=26&type=chunk) - The decline in gross profit margin is primarily attributed to rising upstream raw material costs, such as over **50%** increase in glass and IC prices for smart TVs, and rising copper prices affecting appliance products[26](index=26&type=chunk) [Expenses](index=14&type=section&id=%E8%B2%BB%E7%94%A8) During the reporting period, the Group's selling and distribution, general and administrative, and research and development expenses all increased in absolute terms, but their ratios to revenue decreased, indicating improved cost control efficiency and continued investment in R&D Expense Analysis (RMB millions) | Expense Item | 2021 First Half | Ratio to Revenue | 2020 First Half | Ratio to Revenue | | :--- | :--- | :--- | :--- | :--- | | Selling and Distribution Expenses | 1,855 | 8.2% | 1,495 | 9.4% | | General and Administrative Expenses | 615 | 2.7% | 587 | 3.7% | | Research and Development Expenses | 980 | 4.3% | 814 | 5.1% | [Liquidity, Financial Resources, and Cash Flow Management](index=14&type=section&id=%E6%B5%81%E5%8B%95%E8%B3%87%E9%87%91%E3%80%81%E8%B2%A1%E5%8B%99%E8%B3%87%E6%BA%90%E5%8F%8A%E7%8F%BE%E9%87%91%E6%B5%81%E9%87%8F%E7%AE%A1%E7%90%86) As of June 30, 2021, the Group maintained a stable financial position with net current assets increasing to RMB 13.442 billion, though total interest-bearing debt rose to RMB 15.417 billion, leading to an increase in the debt-to-equity ratio Key Financial Position Indicators (RMB millions) | Indicator | June 30, 2021 | December 31, 2020 | Change | | :--- | :--- | :--- | :--- | | Net Current Assets | 13,442 | 11,517 | +16.7% | | Bank Balances and Cash | 8,385 | 8,214 | +2.1% | | Total Interest-Bearing Debt | 15,417 | 13,224 | +16.6% | | Debt to Equity Ratio | 77.3% | 69.6% | +7.7 percentage points | [Treasury Policy and Investment Portfolio](index=15&type=section&id=%E8%B2%A1%E8%B3%87%E6%94%BF%E7%AD%96%E8%88%87%E6%8A%95%E8%B3%87%E7%B5%84%E5%90%88) The Group adopts a prudent treasury policy with most assets and liabilities settled in RMB, recorded a net exchange loss of RMB 1 million, and holds significant investments in unlisted and listed equity securities for strategic smart home ecosystem development - As of June 30, 2021, the Group held investments in **46** unlisted companies with a total value of **RMB 2.796 billion**[31](index=31&type=chunk) Major Listed Equity Securities Investments (As of June 30, 2021) | Listed Company | Investment Value (RMB millions) | Listing Exchange | | :--- | :--- | :--- | | Bank of Gansu Co., Ltd. | 102.6 | Hong Kong Stock Exchange | | Jiangsu Broadcasting & TV Information Network Corporation Limited | 122.0 | Shanghai Stock Exchange | | Amlogic (Shanghai) Co., Ltd. | 171.2 | Shanghai Stock Exchange | | Sanrenxing Media Group Co., Ltd. | 79.4 | Shanghai Stock Exchange | | Linklogis Inc. | 112.5 | Hong Kong Stock Exchange | | Anhui Core-Ray Technology Co., Ltd. | 49.7 | Shenzhen Stock Exchange | [Significant Investments and Acquisitions](index=17&type=section&id=%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B3%87%E5%8F%8A%E6%94%B6%E8%B3%BC) During the reporting period, the Group invested RMB 409 million in factory expansions across multiple locations and an additional RMB 197 million in other property, plant, and equipment to enhance production scale and smart product capacity - The Group spent **RMB 409 million** on factory expansion projects and invested **RMB 197 million** in other production equipment during the reporting period[34](index=34&type=chunk) [Human Resources and Contingent Liabilities](index=17&type=section&id=%E4%BA%BA%E5%8A%9B%E8%B3%87%E6%BA%90%E8%88%87%E6%88%96%E7%84%B6%E8%B2%A0%E5%82%B5) As of June 30, 2021, the Group's global workforce decreased to approximately 33,000 employees, while the company continues to focus on staff welfare and training, and addresses patent disputes deemed not to have a material adverse financial impact - As of June 30, 2021, the Group had approximately **33,000** employees, a decrease from **36,000** as of December 31, 2020[35](index=35&type=chunk) - The Group is involved in some individual patent disputes, but the directors believe these will not have a material adverse effect on the Group's financial position[35](index=35&type=chunk) [Outlook and Post-Reporting Period Events](index=18&type=section&id=%E5%89%8D%E7%9E%BB%E8%88%87%E5%A0%B1%E5%91%8A%E6%9C%9F%E5%BE%8C%E4%BA%8B%E9%A0%85) Looking ahead, the Group designates 2021 as the 'Efficiency Enhancement Year,' focusing on transforming its business model and accelerating R&D in 5G+AI+Terminal technologies, while acknowledging the ongoing uncertainty of the COVID-19 pandemic on overseas operations - The Group will define products with a '5G+AI+Terminal' technology development approach, accelerating R&D and application of new technologies, materials, and processes to enhance product competitiveness[36](index=36&type=chunk) - The Group will focus on advancing the construction of overseas production bases in Southeast Asia, India, and Africa, and actively develop OEM business[36](index=36&type=chunk) - Post-reporting period, the COVID-19 pandemic is expected to continue to impact the Group's overseas business, though the exact timing and scale of the impact remain unpredictable[37](index=37&type=chunk) [Condensed Consolidated Financial Statements](index=19&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8) This section presents the condensed consolidated financial statements, including the statement of profit or loss, financial position, changes in equity, and cash flows [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=19&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E6%90%8D%E7%9B%8A%E5%8F%8A%E5%85%B6%E4%BB%96%E5%85%A8%E9%9D%A2%E6%94%B6%E5%85%A5%E8%A1%A8) For the six months ended June 30, 2021, the Group reported a 41.2% increase in revenue to RMB 22.567 billion, a decline in gross profit margin, and a 4.6% increase in profit attributable to equity holders to RMB 409 million Profit or Loss Statement Summary (RMB millions) | Item | 2021 First Half | 2020 First Half | | :--- | :--- | :--- | | Total Revenue | 22,567 | 15,979 | | Gross Profit | 3,745 | 3,086 | | Profit Before Tax | 812 | 755 | | **Profit for the Period** | **610** | **573** | | Profit Attributable to Equity Holders of the Company | 409 | 391 | | Basic Earnings Per Share (RMB cents) | 15.54 | 12.87 | [Condensed Consolidated Statement of Financial Position](index=21&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8) As of June 30, 2021, the Group's total assets increased to RMB 56.649 billion, with net current assets rising to RMB 13.442 billion, indicating improved liquidity, despite a significant increase in inventories and bank borrowings Financial Position Statement Summary (RMB millions) | Item | June 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | **Total Assets** | **56,649** | **53,684** | | Non-current Assets | 14,677 | 14,076 | | Current Assets | 41,972 | 39,608 | | **Total Liabilities** | **36,717** | **34,693** | | Current Liabilities | 28,530 | 28,091 | | Non-current Liabilities | 8,187 | 6,602 | | **Net Assets** | **19,932** | **18,991** | | Equity Attributable to Equity Holders of the Company | 17,052 | 16,310 | [Condensed Consolidated Statement of Changes in Equity](index=23&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E6%AC%8A%E7%9B%8A%E8%AE%8A%E5%8B%95%E8%A1%A8) As of June 30, 2021, equity attributable to equity holders of the company increased from RMB 16.310 billion at the beginning of the year to RMB 17.052 billion, primarily driven by profit for the period and fair value gains on equity instruments - Equity attributable to equity holders of the company increased from **RMB 16.310 billion** at the beginning of 2021 to **RMB 17.052 billion** at period-end[46](index=46&type=chunk) - The primary drivers for the increase in equity were profit for the period (**RMB 409 million**) and fair value gains on financial assets recognized in other comprehensive income (**RMB 445 million**)[46](index=46&type=chunk) [Condensed Consolidated Cash Flow Statement](index=25&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E7%8F%BE%E9%87%91%E6%B5%81%E9%87%8F%E8%A1%A8) In the first half of 2021, the Group experienced a net cash outflow of RMB 1.403 billion from operating activities, contrasting with a net inflow in the prior year, while financing activities generated a net inflow primarily from new bank loans Cash Flow Statement Summary (RMB millions) | Item | 2021 First Half | 2020 First Half | | :--- | :--- | :--- | | Net Cash (Used in) Generated from Operating Activities | (1,403) | 1,786 | | Net Cash (Used in) Generated from Investing Activities | (202) | 81 | | Net Cash Generated from Financing Activities | 1,755 | 83 | | **Net Increase in Cash and Cash Equivalents** | **150** | **1,950** | | Cash and Cash Equivalents at Beginning of Period | 8,214 | 4,806 | | **Cash and Cash Equivalents at End of Period** | **8,385** | **6,827** | [Notes to the Condensed Consolidated Financial Statements](index=27&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8%E9%99%84%E8%A8%BB) This section provides detailed notes and disclosures supporting the condensed consolidated financial statements, including segment information, earnings per share, and related party transactions [Revenue and Segment Information](index=28&type=section&id=%E7%87%9F%E6%A5%AD%E9%A1%8D%E5%8F%8A%E5%88%86%E9%83%A8%E8%B3%87%E6%96%99) The Group's revenue is categorized into four reportable segments, with multimedia business being the largest contributor at RMB 13.655 billion, and the modern service and other segment generating the highest profit primarily from property sales 2021 First Half Segment Revenue and Results (RMB millions) | Reportable Segment | External Segment Revenue | Segment Results | | :--- | :--- | :--- | | Multimedia Business | 13,655 | 91 | | Smart System Technology Business | 4,599 | 188 | | Smart Appliances Business | 2,200 | 42 | | Modern Service and Others | 2,113 | 536 | - Within the modern service and other segment, segment results related to 'property sales' amounted to **RMB 340 million**[62](index=62&type=chunk) [Dividends and Earnings Per Share](index=36&type=section&id=%E8%82%A1%E6%81%AF%E8%88%87%E6%AF%8F%E8%82%A1%E7%9B%88%E5%88%A9) The Board resolved not to recommend an interim dividend for the six months ended June 30, 2021, with basic earnings per share at 15.54 RMB cents and diluted earnings per share at 14.44 RMB cents - The Board resolved not to declare an interim dividend for 2021[67](index=67&type=chunk) Earnings Per Share Calculation | Item | 2021 First Half | 2020 First Half | | :--- | :--- | :--- | | Profit for Basic EPS Calculation (millions) | 409 | 391 | | Profit for Diluted EPS Calculation (millions) | 380 | 368 | | Weighted Average Number of Ordinary Shares - Basic (shares) | 2,631,476,890 | 3,037,798,995 | [Related Party Transactions](index=52&type=section&id=%E9%97%9C%E9%80%A3%E4%BA%BA%E5%A3%AB%E4%BA%A4%E6%98%93) During the reporting period, the Group engaged in several related party transactions, with sales of finished goods to associates being the largest at RMB 431 million, and total remuneration for directors and key management increasing by 40% - Sales of finished goods to associates amounted to **RMB 431 million**, more than doubling from the prior period[113](index=113&type=chunk) - Total remuneration for directors and key management personnel was **RMB 35 million**, a **40%** increase from **RMB 25 million** in the prior period[114](index=114&type=chunk) [Review Report](index=54&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8%E7%9A%84%E5%AF%A9%E9%96%B1%E5%A0%B1%E5%91%8A) The company's condensed consolidated financial statements for the period have been reviewed by Deloitte Touche Tohmatsu, who found no material non-compliance with accounting standards - The company's auditor, Deloitte Touche Tohmatsu, has reviewed these interim financial statements in accordance with Hong Kong Standard on Review Engagements 2410[119](index=119&type=chunk) - The review concluded that the auditor found no matters leading them to believe the condensed consolidated financial statements are not prepared in all material respects in accordance with Hong Kong Accounting Standard 34[119](index=119&type=chunk) [Corporate Governance and Other Information](index=55&type=section&id=%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB%E5%8F%8A%E5%85%B6%E4%BB%96%E8%B3%87%E6%96%99) This section details the company's corporate governance practices, shareholder information, related party transactions, and internal control systems [Shareholders' Equity and Share Schemes](index=55&type=section&id=%E8%82%A1%E6%9D%B1%E6%AC%8A%E7%9B%8A%E8%88%87%E8%82%A1%E4%BB%BD%E8%A8%88%E5%8A%83) As of June 30, 2021, major shareholders Mr. Huang Hongsheng and Ms. Lin Weiping collectively held approximately 46.75% equity, while the company had outstanding share options under its 2014 scheme and purchased shares for a new 2020 share award scheme - Major shareholder Mr. Huang Hongsheng and his spouse Ms. Lin Weiping (Executive Director) are deemed to jointly hold approximately **46.75%** of the company's share interests[122](index=122&type=chunk)[123](index=123&type=chunk)[132](index=132&type=chunk) - As of June 30, 2021, a total of **121,498,000** share options remained unexercised under the 2014 Share Option Scheme[134](index=134&type=chunk)[137](index=137&type=chunk) - The company purchased **40,000,000** shares during the period for the 2020 Share Award Scheme, but no award shares have been granted yet[139](index=139&type=chunk)[145](index=145&type=chunk) [Related Party Transactions and Compliance](index=61&type=section&id=%E9%97%9C%E9%80%A3%E4%BA%A4%E6%98%93%E8%88%87%E5%90%88%E8%A6%8F) During the reporting period, the Group engaged in three ongoing related party transactions, including a sale and leaseback agreement, advisory services, and product sales, with all directors confirming compliance with securities dealing standards - The Group has three continuing related party transactions involving finance leases, advisory services, and product sales, all disclosed as required[141](index=141&type=chunk)[142](index=142&type=chunk) - All directors confirmed compliance with the standard code for securities transactions[144](index=144&type=chunk) [Board of Directors and Committees](index=63&type=section&id=%E8%91%A3%E4%BA%8B%E6%9C%83%E8%88%87%E5%A7%94%E5%93%A1%E6%9C%83) The company is committed to high corporate governance standards, with the Board supported by executive, nomination, remuneration, and audit committees that held meetings to fulfill their responsibilities, largely complying with the Corporate Governance Code - The Board has established four committees: Executive, Nomination, Remuneration, and Audit, to assist in fulfilling its responsibilities[147](index=147&type=chunk) - During the reporting period, the company largely complied with the code provisions of the Corporate Governance Code, with a deviation only for code provision A.6.7 due to an independent non-executive director's inability to attend the annual general meeting[146](index=146&type=chunk) [Risk Management and Internal Control](index=66&type=section&id=%E9%A2%A8%E9%9A%AA%E7%AE%A1%E7%90%86%E8%88%87%E5%85%A7%E9%83%A8%E7%9B%A3%E6%8E%A7) The Board affirms its responsibility for maintaining robust internal control systems, supported by a dedicated Risk Management Department that independently assesses operations and reports directly to the Audit Committee, and an Internal Audit Department ensuring compliance across business units - The company has established a Risk Management Department and an Internal Audit Department to ensure the robustness and effective operation of its internal control systems[157](index=157&type=chunk)[160](index=160&type=chunk) - The head of the Risk Management Department has direct access to the Audit Committee and reports directly to the Board and Audit Committee, ensuring independence[158](index=158&type=chunk)

Financial Performance - Revenue for the year ended December 31, 2020, was RMB 40,093 million, representing a 7.6% increase from RMB 37,277 million in 2019[6] - Operating profit (before interest and tax) increased by 28.6% to RMB 2,620 million from RMB 2,037 million in the previous year[6] - Net profit for the period rose by 78.0% to RMB 1,835 million compared to RMB 1,031 million in 2019[6] - Cash position increased by 61.3% to RMB 9,841 million from RMB 6,102 million in 2019[6] - The gross profit margin decreased by 2.2 percentage points to 17.9% from 20.1% in the previous year[6] - The company’s net debt to equity ratio increased to 69.6% from 61.4% in 2019, reflecting a rise of 8.2 percentage points[6] - The company’s market capitalization decreased by 16.3% to HKD 5,763 million from HKD 6,887 million in 2019[6] - Overall gross margin for the group decreased to 17.9%, down 2.2 percentage points from 20.1% in the previous year[61] - Selling and distribution expenses were RMB 3,477 million, a decrease of RMB 280 million or 7.5% compared to the previous year[62] - General and administrative expenses increased to RMB 1,415 million, up RMB 401 million or 39.5% year-over-year[62] - Research and development expenses were RMB 1,865 million, an increase of RMB 22 million or 1.2% compared to the previous year[62] Revenue Breakdown - Revenue from the domestic market was RMB 24,583 million, a decrease of RMB 1,423 million or 5.5% from RMB 26,006 million in the previous year[35] - Revenue from overseas markets was RMB 15,510 million, an increase of RMB 4,239 million or 37.6% from RMB 11,271 million in the previous year[36] - Multimedia business accounted for 59.1% of the revenue in the domestic market, while smart system technology business accounted for 21.1%[35] - Revenue from smart TV systems in the mainland China market was RMB 12,223 million, a decrease of RMB 1,425 million or 10.4% year-on-year[41] - The overseas market for smart TV systems generated revenue of RMB 8,302 million, an increase of RMB 2,395 million or 40.5% compared to the previous year[45] - Smart appliances revenue in mainland China for the year ended December 31, 2020, was RMB 2,868 million, a decrease of RMB 209 million or 6.8% compared to the previous year[54] - Overseas revenue for smart appliances reached RMB 1,350 million, an increase of RMB 132 million or 10.8% year-over-year[54] - Modern services revenue in mainland China was RMB 1,961 million, an increase of RMB 131 million or 7.2% compared to the previous year[57] - Overseas revenue for modern services was RMB 519 million, a significant increase of RMB 497 million or 2,259.1% year-over-year[57] Strategic Initiatives - The company approved 17 major R&D projects with a total investment of RMB 1.86 billion, achieving a new product output rate of 32.3%[11] - The company completed the development of Mini-LED TVs and launched new products including AI entertainment TVs and 4K monitors[11] - The company plans to focus on the "5G+AI+terminal" technology development strategy, accelerating the upgrade of technology and product iterations[20] - The company aims to enhance its market competitiveness by leveraging new technologies and materials to create new product functionalities and experiences[21] - The company anticipates significant potential in the domestic high-end and rural appliance markets in 2021[18] - The company expects pressure on export business profitability due to fluctuations in the RMB exchange rate and rising raw material prices[18] - The company is committed to improving supply chain management and strategic cooperation with suppliers to reduce procurement costs[17] - The company is focused on expanding its industrial park construction to adjust its industrial and asset structure amid a complex global environment[25] - The company aims to expand its overseas business by leveraging supply chain advantages and focusing on markets like India, ASEAN, and Africa[30] - The company plans to introduce high-end and customized new products to meet the demands of urban high-end customers[30] - The company is committed to enhancing internal business collaboration and clarifying development directions to improve overall efficiency[30] - The strategic plan includes a focus on four major business segments: multimedia, smart system technology, smart appliances, and modern services[39] Investments and Acquisitions - The company successfully completed the acquisition of Tianjin Yitong Pump Industry and initiated the IPO process for Shenzhen Cool Open[14] - The company has established two venture capital funds to support innovation and investment initiatives[14] - The group held investments in 46 unlisted companies valued at RMB 2,224 million as of December 31, 2020, with RMB 1,085 million representing a 10% stake in a company involved in manufacturing and selling electronic components[68] - Total capital expenditure for expanding production facilities in Ningbo, Nanjing, Guangzhou, and Qianhai was RMB 958 million, with an additional RMB 769 million invested in machinery and equipment[74] - The group plans to continue investing in property, factory, and office construction to enhance production capacity and operational efficiency[74] Corporate Governance and Management - The company has a diverse board with members holding significant experience in finance, law, and technology sectors[104][106] - The management team is focused on enhancing corporate governance and investor relations to improve overall company performance[98] - The company continues to expand its market presence through strategic appointments and leveraging the expertise of its board members[97][104] - The company reported a comprehensive financial statement for the year ending December 31, 2020, highlighting its performance and financial position[125] - The company faced significant risks and uncertainties during the reporting year, which are discussed in detail in the chairman's report and management discussion sections[127] Employee and Social Responsibility - The group maintained approximately 36,000 employees as of December 31, 2020, consistent with the previous year, and emphasized employee training and welfare[76] - The company has established a corporate social responsibility policy focusing on environmental sustainability and operational practices[130] - The company emphasizes the importance of employee training programs to enhance skills and awareness of environmental issues[134] - The company made charitable donations totaling approximately RMB 1.7 million in the reporting year, compared to RMB 1.4 million in 2019[154] Shareholder Information - As of December 31, 2020, the company's distributable reserves amounted to approximately RMB 2,398 million, an increase from RMB 1,525 million in 2019[148] - The company did not recommend a final dividend for the year ending December 31, 2020, consistent with the previous year[128] - The total number of issued shares was 2,668,129,420[173] - The company has a total of 1,063,361,320 shares issued as of December 31, 2020[175] - The company repurchased a total of 392,800,000 shares at a price of HKD 2.8 per share, totaling approximately HKD 1,099.84 million[151]

Revenue and Profitability - The group's revenue for the period was RMB 15,979 million, a decrease of 7.3% compared to RMB 17,230 million in the same period last year, with 65.1% of sales coming from the mainland China market[11] - Gross profit reached RMB 3,086 million, with a gross margin of 19.3%, down from 19.7% in the previous year[11] - The profit attributable to equity holders for the period was RMB 573 million, representing a 64.7% increase from RMB 348 million in the same period last year[11] - The overall revenue for the six months ended June 30, 2020, was RMB 15,979 million, a decrease of 7.3% compared to RMB 17,230 million for the same period in 2019[12] - Revenue from customer contracts amounted to RMB 15,765 million, with multimedia business contributing RMB 9,394 million and smart systems technology business contributing RMB 3,777 million[57] - The company reported a pre-tax consolidated profit of RMB 755 million for the six months ended June 30, 2020[64] - The company’s net profit for the six months ended June 30, 2020, was RMB 1,387 million, a slight decrease of 3.1% from RMB 1,432 million in the same period of 2019[74] Cash Flow and Financial Position - Net cash inflow from operating activities was RMB 2,055 million, an increase of 40.6% from RMB 1,462 million in the same period last year[8] - Total cash position, including restricted bank deposits and cash, was RMB 7,901 million, up 67.2% from RMB 4,726 million last year[8] - The net cash generated from operating activities for the six months ended June 30, 2020, was RMB 2,055 million, an increase of 40.7% compared to RMB 1,462 million for the same period in 2019[45] - The company reported a net cash outflow from investing activities of RMB 188 million for the six months ended June 30, 2020, compared to RMB 1,187 million for the same period in 2019, indicating improved cash management[46] - The net cash inflow from financing activities was RMB 1,950 million for the six months ended June 30, 2020, compared to RMB 948 million for the same period in 2019, reflecting increased borrowing activities[46] - The total cash and cash equivalents at the end of the period were RMB 6,827 million, up from RMB 4,265 million at the end of the same period in 2019[46] Debt and Equity - The debt-to-equity ratio improved to 63.9%, up from 54.3% in the previous year[8] - The total bank loans as of June 30, 2020, were RMB 7,849 million, a decrease from RMB 8,177 million as of December 31, 2019, while the total interest-bearing liabilities amounted to RMB 11,636 million, up from RMB 11,133 million[31] - The debt-to-equity ratio as of June 30, 2020, was 63.9%, an increase from 61.4% as of December 31, 2019[31] - The company issued secured corporate bonds amounting to RMB 2,000 million on September 15, 2017, with an annual interest rate of 5.36% and a maturity date of September 14, 2022[100] Market Performance and Strategy - The multimedia business and smart system technology business accounted for 58.8% and 23.8% of total revenue, respectively, compared to 59.1% and 24.9% in the same period last year[11] - The company plans to adjust sales strategies and pricing to improve market share in response to the impact of COVID-19 and intense market competition[19] - The company is actively adjusting its product and business structure in response to the ongoing COVID-19 pandemic, aiming to enhance product quality and reduce operational costs[39] - The company is focusing on developing 5G application products and expanding overseas markets, particularly in Southeast Asia, India, and Africa[38] Expenses and Cost Management - Sales and distribution expenses amounted to RMB 1,495 million, a decrease of RMB 343 million or 18.7% compared to RMB 1,838 million in the same period last year, with a sales and distribution expense to revenue ratio of 9.4%, down 1.3 percentage points from 10.7%[28] - General and administrative expenses increased to RMB 587 million, up RMB 169 million or 40.4% from RMB 418 million in the same period last year, with a ratio of 3.7%, an increase of 1.3 percentage points from 2.4%[28] - Research and development expenses were RMB 814 million, a decrease of RMB 94 million or 10.4% from RMB 908 million in the same period last year, with a ratio of 5.1%, down 0.2 percentage points from 5.3%[28] Investments and Acquisitions - The company has established a financial services platform to broaden financing channels, including venture capital and micro-loans[26] - The company acquired a 34% equity interest in Beijing Skyworth Digital Technology Co., Ltd. from a non-controlling shareholder for RMB 10 million[44] - The company plans to continue expanding its smart appliance product line and enhance its internet value-added services through the Cool Open System[61] - The group sold 90% of its subsidiary, Guangzhou Skyworth Electronics, for RMB 574 million, resulting in a gain of RMB 151 million from the sale[131][133] Corporate Governance and Compliance - The company’s financial statements were reviewed by Deloitte, and no significant issues were found regarding compliance with Hong Kong Accounting Standards[145] - The company has maintained compliance with the Corporate Governance Code, except for one independent non-executive director's absence from the annual general meeting due to other commitments[176] - The board is committed to maintaining high standards of corporate governance and transparency to enhance shareholder value[183] Employee and Shareholder Information - The company has approximately 33,000 employees as of June 30, 2020, down from 36,000 as of December 31, 2019, indicating a reduction of about 8.3%[37] - The company announced a conditional cash offer to repurchase up to 392,800,000 shares at HKD 2.80 per share, representing approximately 12.83% of the issued shares as of the announcement date[190] - As of June 30, 2020, the company’s directors held a total of 1,238,258,799 shares, representing approximately 40.45% of the issued shares[148]

Financial Performance - For the year ended December 31, 2019, SKYWORTH reported a revenue of RMB 37.277 billion, representing a year-on-year increase of 23.5%[3] - The net profit attributable to shareholders for the same period was RMB 1.031 billion, reflecting an increase of 86.4% compared to the previous year[3] - The company achieved a gross profit margin of 20.1%, up 1.4 percentage points from the previous year[3] - The overall revenue for the group for the twelve months ended December 31, 2019, was RMB 37,277 million, a decrease of RMB 1,701 million or 4.4% compared to the previous year[17] - Gross profit increased to RMB 7,502 million, reflecting a growth of 4.3% from RMB 7,194 million in the previous year, with a gross margin of 20.1%[16] - The net profit for the year was RMB 1,031 million, representing a 22.9% increase from RMB 839 million in the previous year[16] - The company reported a total comprehensive income of RMB 935 million for the year, recovering from a loss of RMB 1,078 million in the previous year[199] - Basic earnings per share increased to RMB 24.61 from RMB 13.85, marking an increase of 77.5%[199] Research and Development - The company invested nearly RMB 1.9 billion in research and development throughout 2019[6] - Research and development expenses increased by 9.2% to RMB 1,843 million, up from RMB 1,688 million in 2018[16] - Research and development expenses for the year were RMB 1,843 million, compared to RMB 1,327 million in the previous year, showing an increase of 38.8%[198] - The group has applied for a total of 1,164 patents, with several research achievements receiving provincial and municipal awards[7] Market Performance - The number of users for Shenzhen Coolpad reached 42.39 million, with monthly active users at 28 million[6] - Revenue from the mainland China market was approximately RMB 26,006 million, a decrease of RMB 2,230 million or 7.9% compared to the previous year[20] - Revenue from overseas markets was RMB 11,271 million, an increase of RMB 529 million or 4.9% compared to the previous year, accounting for 30.2% of total revenue[21] - The multimedia business revenue recorded RMB 21,505 million, a decrease of RMB 3,290 million or 13.3% compared to the previous year[24] - The group achieved a market share of 39.6% in the OLED market in mainland China, ranking first among domestic brands[27] Product Development and Innovation - The company launched several new products, including the 8K+Alot+5G smart TV and 8K+OLED TV, with new product revenue accounting for over 50%[6] - The group launched nine new OLED TV models using industry-leading technology, enhancing its competitive position in the market[27] - The company is focusing on enhancing product capabilities and consumer experience through the development of new technologies such as the Hummingbird AI chip and SOBiF technology[27] Strategic Initiatives - The company aims for a revenue target of RMB 100 billion, focusing on investment, innovation, and reform in 2020[9] - The company has strategically abandoned some low-margin international projects to focus on emerging consumer markets and optimize sales structure[28] - The company is committed to transforming from manufacturing to modern service industries, enhancing operational efficiency and production capacity[36] - The company is actively promoting the development of smart home systems and plans to increase support for research and development in this area[32] Corporate Governance - The company has a diverse board with members having extensive experience in finance, law, and technology sectors[59][60] - The management team is focused on enhancing corporate governance and investor relations[57] - The company emphasizes the importance of scientific decision-making and strengthening management oversight to enhance operational effectiveness[49] - The company has adopted a board diversity policy to ensure a balanced mix of skills, experience, and perspectives[132] Financial Management - The total bank loans amounted to RMB 8,177 million as of December 31, 2019, an increase from RMB 6,324 million as of December 31, 2018[41] - The overall interest-bearing liabilities totaled RMB 11,133 million as of December 31, 2019, compared to RMB 8,350 million as of December 31, 2018, resulting in a debt-to-equity ratio of 61.4%[41] - The company issued secured corporate bonds with a principal value of RMB 2,000 million at an annual interest rate of 5.36%, aimed at adjusting the debt structure and supplementing general working capital[82] Social Responsibility and Sustainability - The group has established a corporate social responsibility policy focusing on four main areas: work environment, environment, operational practices, and society[71] - The group has implemented various energy efficiency strategies, including the use of energy-saving machines and the installation of eco-friendly lighting systems[71] - The company made charitable donations totaling approximately RMB 1.4 million during the reporting year[86] Challenges and Outlook - The company has faced challenges due to COVID-19 but is optimistic about the recovery of its financial performance in 2020[51] - The company is conducting impairment reviews and expected credit loss assessments due to potential adverse impacts from COVID-19 on receivables and inventory recoverability[51] - The company is focusing on structural adjustments in product, asset, debt, talent, and distribution to drive innovation and sustainable development[49]