Financial Performance - Hua Hong Semiconductor achieved sales revenue of US$2,004 million for the year 2024, reflecting a steady quarter-on-quarter improvement in overall financial performance [18]. - The company reported a profit attributable to owners of the parent of US$449.9 million for 2024, with earnings per share (EPS) increasing to US$0.345 [14][16]. - The gross profit margin improved to 34.1% in 2024, up from 21.3% in 2023 [12][13]. - Hua Hong Semiconductor's revenue for 2024 was US$2,004 million, a decrease of 12.3% compared to the previous year [151]. - Revenue from semiconductor wafers accounted for 94.9% of total revenue, amounting to US$1,900,929 thousand, down 12.9% year-over-year [152]. - Revenue from systems and fabless companies represented 95.8% of total revenue, totaling US$1,919,000 thousand, a decline of 9.0% year-over-year [153]. - The company's revenue in China was US$1,636,528 thousand, making up 81.6% of total revenue, down 7.8% from the previous year [155]. - Gross profit decreased by 57.9% to US$205.13 million in 2024, mainly due to lower average selling prices and increased depreciation costs [172]. - The company's net cash flows generated from operating activities were US$459.50 million, a decrease of 28.4% compared to 2023 [192]. Production and Capacity - The second 12-inch production line in Wuxi commenced operations ahead of schedule, contributing to the company's "8-inch + 12-inch" strategy [19]. - The company maintained an average annual capacity utilization rate close to 100%, securing a leading position among global wafer foundry enterprises [151]. - Wafer shipments (8-inch wafer equivalent) increased by 10.8% year-on-year, reaching 4,545 thousand wafers in 2024 [161]. - Capacity utilization for 8-inch wafer equivalent rose to 99.5% in 2024, an increase of 5.2 percentage points from 2023 [160]. - The company successfully commenced mass production at the Huahong Manufacturing Project (Hua Hong Fab 9) by the end of 2024, with plans to introduce 40nm process nodes in 2025 [167]. Strategic Initiatives - The company plans to enhance production capacity and optimize its "Specialty IC + Power Discrete" product portfolio in 2025 [21]. - The Hua Hong Manufacturing Project is expected to drive steady revenue growth starting in 2025, laying a solid foundation for future performance improvement [19]. - The company aims to deepen strategic collaboration with customers and partners to meet rising demand driven by supply chain localization in the Chinese market [21]. - The company aims to continue leveraging its technological expertise and proactive sales strategies to navigate market challenges and capitalize on growth opportunities [151]. - The Analog & Power Management and Logic & RF platforms showed strong revenue growth, driven by demand in AI-related applications [156]. - The Analog & PM (Power Management) platform saw significant revenue growth in 2024, driven by strong demand in AI supporting power applications [164]. Governance and Management - Junjun Tang appointed as Chairman and Executive Director effective December 31, 2024, with extensive experience in the integrated circuit industry [38]. - Dr. Peng Bai to become President and Executive Director starting January 1, 2025, bringing over 30 years of experience in integrated circuits manufacturing [40]. - Mr. Suxin Zhang resigned as Chairman and Executive Director on December 31, 2024 [53]. - Mr. Limin Zhou resigned as a Non-Executive Director on March 7, 2025 [55]. - Mr. Songlin Feng appointed as Independent Non-Executive Director effective March 28, 2024, with over 32 years of experience in semiconductor research [63]. - Company maintains a strong governance structure with a diverse board of directors and senior management team [41]. - The Company has a nine-member Board comprising two Executive Directors, four Non-Executive Directors, and three Independent Non-Executive Directors [87]. - The Board held six meetings during the year ended 31 December 2024, with all Directors given the opportunity to put items on the agenda [97]. - The Company complied with the Corporate Governance Code during the year ended 31 December 2024 [84]. - Independent Non-Executive Directors represent more than one-third of the Board, ensuring compliance with Listing Rules [93]. - The roles of the Chairman and the President are separate, with the Chairman overseeing overall management and the President handling day-to-day operations [94]. - The Company has implemented mechanisms to ensure independent views are available to the Board, reviewed annually for effectiveness [92]. - Directors are required to keep abreast of their responsibilities and the Company's business activities [102]. - The Company has arranged appropriate insurance to cover potential liabilities of Directors and Officers regarding legal actions [96]. Financial Management - The company has established relationships with major banks including China Construction Bank and China Development Bank for financial support [32]. - For the year ended 31 December 2024, the remuneration paid to the auditors for audit services was US$0.73 million, and for non-audit services was US$0.01 million [115]. - Cash and cash equivalents decreased by 20.2% to US$4,459.13 million at the end of 2024, primarily due to cash flow analysis factors [191]. - Administrative expenses increased by 8.8% to US$351.28 million, mainly due to higher R&D expenses and new fab start-up costs [173]. - Cash and cash equivalents decreased from US$5,585.2 million as of 31 December 2023 to US$4,459.1 million as of 31 December 2024, representing a decline of approximately 20.1% [195]. - If interest rates had been 100 basis points higher or lower, profit before tax for the year would have been US$20,053,000 lower or higher, indicating significant sensitivity to interest rate changes [197]. - Approximately 18% of sales were denominated in currencies other than the functional currency of the subsidiaries, while 61% of costs of sales were in the subsidiaries' functional currency [198]. - Interest-bearing bank borrowings with a carrying amount of US$1,502.3 million were denominated in US$, exposing the company to foreign currency risk [199]. - A 5% strengthening or weakening of the US$ against the RMB would result in profit before tax being approximately US$99.6 million lower or higher, highlighting the impact of currency fluctuations [200]. Workforce and Diversity - The gender ratio of the Group's workforce as of 31 December 2024 was approximately 74% male to 26% female [120]. - The Company believes that gender diversity is important and has achieved compliance with the relevant listing rules following the appointment of a new director [118]. - The Company will continue to maintain a balance of diverse perspectives on the Board conducive to growth [119].
华虹半导体(01347) - 2024 - 年度财报