中芯国际(00981) - 2023 - 年度业绩

Financial Performance and Metrics - Full-year revenue reached $6.32 billion with a gross margin of 19.3$6,321.56 million compared to $7,273.28 million in 2022[22] - Net profit attributable to shareholders dropped by 50.4$902.53 million in 2023 from $1,817.94 million in 2022[22] - Gross margin declined by 18.7 percentage points to 19.3$4,064.16 million in 2023 from 4,611.05 million in 2022[22] - R&D investment as a percentage of revenue increased by 1.1 percentage points to 11.2% in 2023[25] - Operating cash flow decreased by 69.5% to 465.96 million in 2023 from $1,525.70 million in 2022[22] - Total assets increased by 9.1$47,787.31 million in 2023 from $43,807.78 million in 2022[23] - Basic earnings per share dropped by 52.2$0.11 in 2023 from $0.23 in 2022[25] - Weighted average return on equity decreased by 5.4 percentage points to 4.6$6,321.56 million, a decrease of 13.1% compared to the previous year[36] - Gross profit for 2023 was $1,217.74 million, with a gross margin of 19.3$1,124.94 million, with a net profit margin of 17.8%[33] - Total assets for 2023 were $47,787.31 million, an increase from$43,807.78 million in 2022[34] - Cash and cash equivalents for 2023 were $6,215.06 million, down from$10,676.15 million in 2022[34] - Operating cash flow for 2023 was $3,358.29 million, a decrease from$5,347.92 million in 2022[35] - Revenue decreased by 13.1% to $6,321.6 million, primarily due to a 17.4$1,124.9 million, impacted by lower revenue and higher costs[74][79] - Gross profit decreased by 55.9% to $1,217.7 million, driven by lower capacity utilization and wafer sales volume[78] - Operating cash flow decreased by 37.2$3,358.3 million, mainly due to reduced cash received from sales[79] - Capital expenditures increased by 21.9% to $7,633.4 million, reflecting higher investments in property, plant, and equipment[74] - Sales volume of 8-inch equivalent wafers decreased by 17.4$988 per wafer[76] - Inventory increased by 40.1% to 724,021 pieces, primarily due to production stockpiling[87] - Revenue from the China region increased to 80.1% of total revenue, up from 74.2% in the previous year[83] - Revenue from 12-inch wafers accounted for 73.7% of total wafer revenue, while 8-inch wafers contributed 26.3%[86] - R&D expenses decreased by 3.5% to $707.3 million, reflecting cost optimization efforts[78] - Integrated circuit wafer foundry production costs increased by 13.1$5,103.8 million in 2023[88] - Direct materials for integrated circuit wafer foundry accounted for 6.5% of total costs in 2023, a decrease from 7.2% in 2022[88] - Direct labor costs for integrated circuit wafer foundry decreased by 24.5% year-over-year to $110.2 million in 2023[88] - Manufacturing expenses for integrated circuit wafer foundry increased by 15.6$4,358.7 million in 2023[88] - Top five customers accounted for 37.1% of total revenue, with sales amounting to $2,346.1 million in 2023[89] - Top five suppliers accounted for 32.5$466.0 million in 2023[89] - Total interest-bearing debt increased to $10,208.7 million in 2023, up from$8,694.4 million in 2022[91][92] - Capital expenditure commitments for machinery and equipment reached $10,701.6 million at the end of 2023[94] - Property, plant, and equipment increased by 27.0$23,944.9 million in 2023, driven by new factory construction and capacity expansion[97] - Inventory increased by 43.1% year-over-year to $2,735.9 million in 2023, primarily due to production stockpiling[97] - Restricted funds due to borrowing and foreign exchange transactions amounted to$435.6 million at the end of the reporting period[98] - Leverage ratio improved to -21.1% as of December 31, 2023, compared to -34.4% in the previous year[100] - Capitalized interest-related depreciation expenses were $28.2 million for the reporting period, down from$35.9 million in the prior year[100] - Investments in associates increased by 9.3% to $110.05 million in 2023, up from$100.7 million in 2022[101] - Total financial assets measured at fair value stood at $626.79 million as of December 31, 2023[101] - Securities investments totaled$12.42 million at the end of 2023, with fair value changes of $37.82 million during the year[102] - Derivative investments for hedging purposes had a total fair value change of$16.97 million, with a net loss of $69.8 million at year-end[103] - Cross-currency swap contracts accounted for the largest portion of derivative investments, with a year-end book value of -$84.52 million[103] - The company's hedging strategy effectively managed risks, with gains or losses from hedging instruments recognized in other comprehensive income[103] - The board approved the 2023 hedging policy on May 11, 2023, focusing on production and operation-related hedging activities[103] - Total assets of major subsidiaries amount to $53,944,730 thousand[105] - Net assets of major subsidiaries are$30,514,644 thousand, with revenue of $6,311,545 thousand and net profit of$841,384 thousand[106] - The company holds a 12.79% voting right in Jiangsu Changjiang Electronics Technology Co., Ltd., accounted for using the equity method[107] - The company holds an 8.17% voting right in Xinxin Financial Leasing Co., Ltd., accounted for using the equity method[107] - The company holds a 14.10% voting right in Xianxin Integrated Circuit Manufacturing Co., Ltd., accounted for using the equity method[107] - The company holds a 14.83% voting right in SMIC (Ningbo) Co., Ltd., accounted for using the equity method[107] - Total investment in private equity funds as of December 31, 2023, is $86,192 thousand, with a cumulative profit impact of$86,786 thousand[104] - The company's investment in Fund H has a 30.12% ownership stake, with a cumulative profit impact of $16,257 thousand[104] - The company's investment in Fund J has a 24.84$1,911 thousand[104] - The company's investment in Fund K has a 17.21% ownership stake, with no reported profit impact[104] - The company's distributable reserves as of December 31, 2023, amounted to $5,680.3 million[112] - The company's 2023 capital expenditure was approximately$7.5 billion, with 2024 capital expenditure expected to remain roughly flat compared to 2023, exceeding 10% of the company's latest audited net assets[195] Corporate Governance and Board Structure - The company's board of directors includes both executive and independent non-executive members[2] - The company has maintained a high level of corporate governance and complies with the Corporate Governance Code of the Hong Kong Stock Exchange[118] - The company has established specialized committees including Audit, Remuneration, Nomination, and Strategy Committees to assist the board in fulfilling its functions[118] - The company has appointed four independent non-executive directors to enhance the objectivity and scientific nature of board decisions[118] - The company's profit distribution policy is more flexible compared to domestic A-share listed companies, allowing for dividends from profits, share premiums, or other assets permitted by Cayman Islands law[120] - The company's major decisions, such as changes to the business, amendments to the articles of association, and election of directors, remain subject to shareholder approval[121] - The company's liquidation assets will be used to pay employee salaries, taxes, and debts, with remaining assets distributed to shareholders[123] - Shareholders holding 10% or more of the company's shares can request a special general meeting[126] - Shareholders holding 3% or more of the company's voting shares can propose resolutions at the annual general meeting[128] - The company publishes quarterly financial results within approximately 45 days after each quarter and holds public conference calls/webcasts[129] - The 2024 Annual General Meeting is scheduled for June 28, 2024, in Shanghai[129] - The company adopted a revised and restated memorandum and articles of association in 2023 to comply with Hong Kong Listing Rules[130] - The company approved a proposal not to distribute profits for the year 2022[132] - The board was authorized to issue, allot, and deal with up to 20% of the company's issued H shares as of the 2023 annual general meeting date[132] - The board was authorized to repurchase up to 10% of the company's issued H shares as of the 2023 annual general meeting date[132] - The company adopted the 2024 Share Incentive Plan and issued shares accordingly[132] - Restricted share units were granted to related parties under the 2014 Share-Based Compensation Plan on September 5, 2022, and April 1, 2023[132] - The company revised the shareholder meeting rules and board meeting rules[132] - The company adopted a new organizational outline and bylaws[132] - The company's board consists of 8 members, including 1 chairman (executive director), 3 non-executive directors, and 4 independent non-executive directors[158] - The roles of chairman and joint CEOs are separate, with Liu Xunfeng serving as chairman and Zhao Haijun and Liang Mengsong serving as joint CEOs[159] - The company's board members are appointed for a term of three years, with one category of directors eligible for re-election at each annual general meeting[160] - The company has achieved the diversity requirements of the Hong Kong Listing Rules, with board members of different genders[161] - In 2023, directors participated in continuous professional development and updated their knowledge and skills to comply with corporate governance codes[162] - All directors complied with the company's insider information management system and the Standard Code for Securities Transactions by Directors of Listed Issuers as of December 31, 2023[163] - The board has mechanisms in place to ensure access to independent views and opinions, including the nomination process and evaluation of independent non-executive directors[164] - The board revised the Corporate Governance Policy in February 2022 to align with the revised Corporate Governance Code effective from January 1, 2022[165] - The board holds at least four meetings annually, with agendas prepared by the company secretary and meeting records distributed to all directors for review[166] - In 2023, the board held 5 meetings, including 3 in-person and 2 via telecommunication, with all directors attending as required[167] - The company held 5 board meetings in 2023, reviewing key proposals including the 2022 annual report, 2023 interim report, quarterly financial results, and the 2023 capital expenditure plan[168] - The Audit Committee held 4 meetings in 2023, reviewing the 2022 annual report, 2023 interim report, quarterly financial results, and the 2023 audit plan[171][172] - The Remuneration Committee held 3 meetings in 2023, reviewing the 2024 Hong Kong stock incentive plan, 2023 company target plan, and 2022 performance-based bonus scheme[174] - The company's strategic committee held 1 meeting in 2023, focusing on evaluating strategic plans and providing recommendations to the board and management[185] - The nomination committee held 1 meeting in 2023, reviewing the board's structure, size, and composition, and setting criteria for director roles[182] - The company's nomination committee consists of Dr. Liu Xunfeng (Chairman), Professor Lawrence J. Lau, Dr. Fan Renda, and Academician Wu Hanming[181] - The company's strategic committee members include Dr. Chen Shanzhi (Chairman), Mr. Yang Lumin, Professor Lawrence J. Lau, Academician Liu Ming, and Academician Wu Hanming[184] - The company's company secretary, Ms. Guo Guangli, received at least 15 hours of relevant professional training in 2023, as required by Hong Kong Listing Rules[187] R&D and Technology Development - R&D investment as a percentage of revenue increased by 1.1 percentage points to 11.2% in 2023[25] - The company has developed multiple technology platforms, including 28nm ultra-low power, 40nm embedded memory for automotive, and 55nm high-voltage display driver for automotive, which have entered small-batch trial production in 2023[47] - The company focuses on expanding production capacity, developing new processes, and strengthening industry chain collaboration to enhance its capital, technology, and industry ecosystem barriers[46] - The company added 601 new invention patents in the reporting period, bringing the cumulative total to 17,602 invention patents[48] - Total R&D investment in 2023 was $707.275 million, accounting for 11.2$5,794.5 million, a decrease of 14.0% year-over-year[36] - The company has established a mature supplier management system and a comprehensive supply chain security system, ensuring stable and secure supply chain operations[39] - The company's production model includes small-batch trial production, risk mass production, and mass production, with each stage focusing on improving yield, production capacity, and meeting customer demands[40] - The company employs various marketing strategies, including direct customer engagement, market research, and participation in industry events to expand its customer base[41] - In 2023, the global semiconductor industry experienced a structural supply-demand adjustment, with inventory levels remaining high, but signs of recovery emerged in the second half of the year[42] - The wafer foundry industry is highly technology-intensive, capital-intensive, and talent-intensive, with stringent requirements for production environments, energy, raw materials, and quality systems[43] - SMIC is ranked fourth globally and first in mainland China among pure-play wafer foundry companies based on 2023 sales[45] - The company expects moderate growth in 2024, with sales revenue increasing by mid-single digits compared to the previous year, assuming no significant changes in the external environment[108] - The company plans to continue its previously announced factory and capacity expansion plans in 2024, with capital expenditures expected to be roughly flat compared to the previous year[108] - The company's gross margin will face significant depreciation pressure due to ongoing high investments, but it aims to maintain profitability through strict cost control and efficiency improvements[108] - The company's total number of employees is 20,223, with 15,