2020-09-07 16:00Financial Performance - The company's total revenue for the first half of the year reached approximately $1.843 billion, marking a historical high with a year-on-year growth of 26.3%[6]. - Gross margin was reported at 26.2%, an increase of 7.4 percentage points year-on-year[6]. - Net profit attributable to shareholders was approximately $202 million, a historical high with a year-on-year growth of 456.3%[6]. - EBITDA was approximately $766 million, reflecting a year-on-year increase of 45.1%[6]. - Revenue for the six months ended June 30, 2020, was $1,843,375 thousand, representing a 26.3% increase compared to $1,459,781 thousand for the same period in 2019[8]. - Profit attributable to owners of the company for the same period was $202,133 thousand, a significant increase of 556.0% from $30,811 thousand in the prior year[8]. - Gross profit increased by 76.5% from $273.2 million to $482.2 million, attributed to changes in product mix, increased wafer shipments, and higher average selling prices[18]. - Operating profit turned from a loss of $18.4 million in the previous year to a profit of $112.0 million, influenced by revenue growth and changes in cost structure[19]. - The company reported a profit of $177.0 million for the period, compared to a loss of $1.4 million in the same period last year, influenced by increased investment income[20]. - Basic and diluted earnings per share for the period were $0.04, compared to $0.00 in the same period last year[154]. - The company reported a basic earnings of $197.1 million for the six months ended June 30, 2020, compared to $25.2 million in the same period of 2019, reflecting a substantial growth[191]. Capital Expenditure and Investments - The company successfully raised approximately 52.5 billion RMB through its listing on the Sci-Tech Innovation Board, aimed at enhancing technological capabilities and expanding production capacity[6]. - The company has initiated a new round of capital expenditure plans to enhance core competitiveness and drive continuous growth[7]. - Capital expenditures for the company's foundry business in 2020 are planned to be approximately $6.7 billion, primarily for machinery and equipment capacity expansion[31]. - The company plans to replace approximately RMB 4,494.5 million (approximately $647.5 million) of self-raised funds with the proceeds from the public offering for specific projects[97]. - The company has commitments for capital expenditures of $203.0 million for building factories, $3,395.3 million for acquiring machinery and equipment, and $6.2 million for acquiring intangible assets[39]. Research and Development - Advanced process R&D is progressing smoothly, with the first generation of advanced process technology in mass production and ongoing trial production projects with domestic and international clients[6]. - The second generation of advanced process platforms is steadily advancing and is currently in the customer product validation phase[6]. - Research and development expenses for the period were $324,485 thousand, a slight decrease of 2.4% from $332,479 thousand in the prior year[14]. - The company plans to continue expanding its market presence and investing in new technologies to drive future growth[12]. Market and Sales Performance - Revenue increased by 26.3% from $1,459.8 million in the same period last year to $1,843.4 million, driven by a 19.7% increase in wafer shipments and a rise in average selling price[16]. - Wafer shipments rose from approximately 2.4 million 8-inch wafers to 2.8 million 8-inch wafers, while the average selling price increased from $615 to $649[16]. - Revenue from mainland China and Hong Kong reached $1,177,203 thousand, a significant increase of 45.3% compared to $810,264 thousand in 2019[173]. - Wafer sales accounted for $1,677,521 thousand, an increase from $1,372,480 thousand in 2019, representing a growth of 22.2%[174]. Financial Position and Assets - Total assets as of June 30, 2020, were $20,388,178 thousand, a 24.0% increase from $16,437,820 thousand at the end of the previous year[8]. - Total equity rose by 29.2% from $10,197.9 million to $13,177.7 million, driven by changes in assets and liabilities, as well as capital injections from non-controlling interests[24]. - Cash and cash equivalents increased by $912.2 million during the period, with net cash from operating activities rising to $407.5 million, up 14.4% from the previous year[27][28]. - The company reported a total of 39,702,165 stock options granted, with 29,562,909 options remaining unexercised as of June 30, 2020[149]. Corporate Governance - The company has maintained compliance with corporate governance codes and policies since January 25, 2005[102]. - The board of directors consists of 14 members, with a mix of executive and independent directors[104]. - The roles of the chairman and co-CEOs are separated, with Dr. Zhou Zixue as chairman and Dr. Zhao Haijun and Dr. Liang Mengsong as co-CEOs[104]. - The audit committee consists of three members, including the chairman, who are not former executives or employees of the company[108]. - The company ensures compliance with Hong Kong listing rules and provides training for new directors on governance policies[106]. Related Party Transactions - The company holds approximately 17.55% equity from the National Integrated Circuit Fund, which is considered a related party under Hong Kong listing rules[46]. - The framework agreement with SMIC North Integrated Circuit Manufacturing (Beijing) Co., Ltd. is valid for three years, from January 1, 2018, to December 31, 2020, covering various services and asset transactions[48]. - The company has established a framework agreement with SMIC North for transactions from 2018 to 2020, which has been approved by independent shareholders[54]. - The company emphasizes compliance with Hong Kong listing rules regarding related party transactions and independent shareholder approvals[54]. Risk Management - The company faces currency risks primarily related to fluctuations in the Euro, Japanese Yen, and Chinese Yuan, and employs financial instruments to mitigate these risks[32]. - The company has established interest rate swap agreements to manage cash flow risks associated with variable interest rates on long-term loans[34]. - The audit committee reviews the effectiveness of the company's internal controls and risk management policies[108]. Environmental and Regulatory Compliance - The company has received environmental impact assessment approvals and emission permits for its subsidiaries in Shanghai, Beijing, Tianjin, Shenzhen, and other locations[120]. - The company is subject to environmental regulations that require compliance monitoring by relevant authorities, with potential fines for exceeding waste emission limits[121]. - High-tech enterprises in China can benefit from a reduced corporate income tax rate of 15% under specific conditions, including investment amounts exceeding RMB 8 billion (approximately $1.1 billion)[122]. Shareholder Information - The largest shareholders include China Information Communication Technology Group with a 15.10% stake and National Integrated Circuit Industry Investment Fund with a 17.23% total equity stake[126]. - The company has no controlling shareholder or actual controller[124]. - The total number of ordinary shares issued as of June 30, 2020, was 5,690,665,932[126].