京东方精电(00710) - 2020 - 中期财报

Company Overview and Financial Summary Financial Summary The Group's H1 2020 revenue grew 18.1% to HK$1.898 billion, with a strong Q2 rebound offsetting initial COVID-19 impacts Financial Summary (HK$ million) | Financial Summary (HK$ million) | For the 6 months ended June 30, 2020 | For the 6 months ended June 30, 2019 | | :--- | :--- | :--- | | Revenue | 1,898 | 1,607 | | EBITDA | 89.8 | 88.3 | | Profit Attributable to Shareholders | 18.2 | 17.3 | | Cash and Time Deposits Balance | 1,502 | 1,294 | | Basic Earnings Per Share | 2.5 HK cents | 2.4 HK cents | - As of June 30, 2020, the Group maintained a strong cash position with cash and time deposits of HK$1.502 billion and no bank loans[4] - Despite Q1 impacts from COVID-19, a recovery in the China market enabled a rapid response to customer demand in Q2, driving an 18.1% increase in overall revenue for the period[4] Chairman's Statement Performance Review and Analysis Revenue growth was driven by TFT and touch display modules, with manufacturing integration enhancing operational efficiency - Revenue growth was primarily driven by the mass production of TFT and touch display modules, with the TFT module business accounting for approximately 75% of total revenue[5] - EBITDA saw a slight increase of 1.7% due to reduced staff costs and operating expenses, while manufacturing integration with BOE Group improved operational efficiency and operating profit[5] - The Board of Directors resolved not to declare an interim dividend for the six months ended June 30, 2020[6] Business Review Both automotive and industrial display segments achieved significant growth, driven by TFT module sales in specific markets Automotive Display Business The automotive display business revenue grew 13% to HK$1.386 billion, driven by strong demand in China, Korea, and Japan Business Segment Performance | Business Segment | H1 2020 Revenue (HK$ million) | H1 2019 Revenue (HK$ million) | YoY Growth | Share of Total Revenue | | :--- | :--- | :--- | :--- | :--- | | Automotive Display Business | 1,386 | 1,231 | 13% | ~73% | - The China automotive market recovered significantly in Q2, leading to a surge in orders from Chinese customers and a substantial increase in revenue from NEV touch display modules[7] - The Korean and Japanese markets recorded significant revenue growth due to several TFT module projects that commenced mass production in late 2019[7] Industrial Display Business The industrial display business revenue grew 36% to HK$512 million, led by sales for education and high-end appliances Business Segment Performance | Business Segment | H1 2020 Revenue (HK$ million) | H1 2019 Revenue (HK$ million) | YoY Growth | Share of Total Revenue | | :--- | :--- | :--- | :--- | :--- | | Industrial Display Business | 512 | 376 | 36% | ~27% | - Revenue growth was primarily driven by sales of TFT display modules for education-related applications in China and for a world-renowned high-end home appliance brand[8] Business Outlook The Group is optimistic about continued growth in H2 2020, particularly in the China market for both automotive and industrial segments - Based on existing orders, the Group expects the TFT and touch display module business to continue growing in H2 2020, especially in the China market[9] - Automotive Outlook: The Group has secured over 50% of order share among major Chinese automakers and will co-develop smart cockpit products like AMOLED and AR-HUDs, though the European market outlook remains uncertain[10] - Industrial Outlook: The Group will continue promoting display products to industrial and high-end consumer clients, aiming to increase TFT and touch module sales and introduce AMOLED products, but recovery in European and US markets is expected to be slow[11] Development Strategy and R&D The Group is strategically transitioning to a smart cockpit display system provider, focusing R&D on advanced technologies like AR-HUD and AMOLED - Strategic Transition: The Group is committed to transforming from a display solution provider to a "smart cockpit display system assembly solution provider"[13] - Market Position: According to market research, the company achieved a 10% share of the global automotive display market in Q1 2020[12] - R&D Progress: - AR-HUD: Secured a development order from a renowned Chinese NEV manufacturer - Integrated Display: Won a project for an integrated instrument display from another NEV company - Glasses-free 3D: Completed R&D for the first large-size full HD glasses-free 3D automotive instrument - Curved Display: Dual-curved and triple-curved display products have been verified and are ready for mass production - AMOLED: Initial development of flexible automotive AMOLED technology is complete, with mass production of small-sized AMOLEDs for a well-known NEV brand underway[13][14][15] Consolidated Financial Statements Consolidated Statement of Profit or Loss For the six months ended June 30, 2020, the company recorded revenue of HK$1.898 billion and profit attributable to shareholders of HK$18.18 million Key Figures (HK$ thousand) | Item (HK$ thousand) | For the 6 months ended June 30, 2020 | For the 6 months ended June 30, 2019 | | :--- | :--- | :--- | | Revenue | 1,898,299 | 1,607,173 | | Operating Profit | 19,936 | 20,537 | | Profit Before Tax | 18,784 | 20,074 | | Profit for the Period Attributable to Owners | 18,182 | 17,250 | | Basic Earnings Per Share | 2.5 HK cents | 2.4 HK cents | Consolidated Statement of Financial Position As of June 30, 2020, the company had total assets of HK$2.937 billion, total liabilities of HK$899 million, and total equity of HK$2.557 billion Key Figures (HK$ thousand) | Item (HK$ thousand) | As at June 30, 2020 | As at December 31, 2019 | | :--- | :--- | :--- | | Non-current Assets | 519,460 | 559,547 | | Current Assets | 2,936,711 | 2,973,622 | | Current Liabilities | 882,579 | 761,502 | | Non-current Liabilities | 16,346 | 20,232 | | Net Assets | 2,557,246 | 2,751,435 | | Total Equity | 2,557,246 | 2,751,435 | Consolidated Statement of Changes in Equity Total equity decreased from HK$2.751 billion to HK$2.557 billion, mainly due to dividend payments and currency exchange differences - Opening total equity was HK$2,751,435 thousand, and closing total equity was HK$2,557,246 thousand[22] - Key equity movements include: profit for the period (+HK$18,182 thousand), changes in exchange reserve (-HK$21,646 thousand), and payment of prior year dividends (-HK$191,146 thousand)[22] Condensed Consolidated Statement of Cash Flows For H1 2020, the company experienced net cash outflows from operating, investing, and financing activities, with period-end cash at HK$1.494 billion Key Figures (HK$ thousand) | Item (HK$ thousand) | For the 6 months ended June 30, 2020 | For the 6 months ended June 30, 2019 | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | (6,513) | (28,559) | | Net Cash Used in Investing Activities | (23,091) | (51,308) | | Net Cash Used in Financing Activities | (3,715) | (4,246) | | Net Decrease in Cash and Cash Equivalents | (33,319) | (84,113) | | Cash and Cash Equivalents at End of Period | 1,493,954 | 1,255,437 | Notes to the Unaudited Interim Financial Report 3. Revenue and Segment Reporting The Group operates as a single segment, with China being the largest geographical market, contributing over 50% of H1 2020 revenue - The Group's business is classified as a single reportable segment: the design, manufacturing, and sale of liquid crystal displays and related products[27] Revenue from External Customers (HK$ thousand) | Revenue from External Customers (HK$ thousand) | H1 2020 | H1 2019 | | :--- | :--- | :--- | | China (place of domicile) | 1,003,751 | 591,037 | | Europe | 545,956 | 685,365 | | The Americas | 78,227 | 113,136 | | Korea | 106,985 | 63,146 | | Others | 163,380 | 154,489 | | Consolidated Revenue | 1,898,299 | 1,607,173 | 15. Significant Related Party Transactions Significant transactions with parent company BOE Technology Group included purchases of goods totaling HK$980 million, reflecting deeper business integration Transactions with BOE Group (HK$ thousand) | Transactions with BOE Group (HK$ thousand) | H1 2020 | H1 2019 | | :--- | :--- | :--- | | Purchases of goods | 979,604 | 472,068 | | Rental of properties, plant and equipment (income) | 6,681 | 5,256 | - As of June 30, 2020, amounts due to BOE Group for purchase costs and other expenses totaled HK$244 million[46] 17. Non-adjusting Events After the Reporting Period Post-period, the Group invested RMB 50.1 million to establish a new subsidiary, Ruihe Technology Co, Ltd, holding a 50.1% equity interest - After the reporting period, the company invested RMB 50.1 million through a subsidiary to establish a new joint venture, "Ruihe Technology Co, Ltd", holding a 50.1% stake and consolidating it as a subsidiary[47] Other Information Liquidity and Financial Resources The Group maintained a strong financial position with HK$1.502 billion in cash, zero bank loans, a zero gearing ratio, and a liquidity ratio of 3.3 Financial Indicators | Financial Indicator | As at June 30, 2020 | As at December 31, 2019 | | :--- | :--- | :--- | | Total Equity (HK$ million) | 2,557 | 2,751 | | Current Ratio | 3.3 | 3.9 | | Cash and Time Deposits (HK$ million) | 1,502 | 1,546 | | Bank Loans (HK$ million) | 0 | 0 | | Gearing Ratio | 0% | 0% | | Inventory Turnover Ratio (times) | 6.6 | 5.0 | | Trade Receivables Turnover (days) | 73 | 82 | Directors' and Chief Executive's Interests in Shares As of June 30, 2020, BOE Technology Group was the controlling shareholder with a 54.41% stake, and several directors held share options Major Shareholders | Name of Major Shareholder | Number of Shares Held | Approx. Percentage of Issued Share Capital | | :--- | :--- | :--- | | BOE Technology Group Co, Ltd | 400,000,000 | 54.41% | | Ko Chun Shun | 50,551,000 | 6.88% | | Rockstead Technology Limited | 37,951,000 | 5.16% | - Several directors held share options granted on January 24, 2019, with an exercise price of HK$2.00 per share[60] Corporate Governance The company complied with the Corporate Governance Code, with its Audit, Remuneration, and Nomination Committees chaired by independent directors - The company has complied with the code provisions of the Corporate Governance Code[71] - The Audit Committee, comprising three independent non-executive directors, has reviewed this interim financial report[73] - Independent non-executive directors form the majority in both the Remuneration Committee and the Nomination Committee[74][75]