markdown [Financial Highlights](index=1&type=section&id=Financial%20Highlights) Financial Highlights for the Six Months Ended June 30, 2025 Financial Highlights for the Six Months Ended June 30, 2025 | Metric | H1 2025 | H1 2024 | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Revenue | 2,305 million USD | 2,067 million USD | +11.5% | | Profit | 30 million USD | 33 million USD | -7.5% | | Basic EPS | 0.44 cents | 0.46 cents | -3.4% | | Interim Dividend | None | None | - | [Condensed Consolidated Interim Financial Statements](index=2&type=section&id=Condensed%20Consolidated%20Interim%20Financial%20Statements) [Condensed Consolidated Interim Income Statement](index=2&type=section&id=Condensed%20Consolidated%20Interim%20Income%20Statement) For the six months ended June 30, 2025, the Group's revenue increased by **11.5%** year-on-year to **$2.305 billion**; however, due to increased cost of sales, administrative expenses, and income tax expense, profit for the period decreased by **7.5%** year-on-year to **$30.21 million**, and basic earnings per share declined from **0.46 cents** to **0.44 cents** Key Income Statement Items (thousand USD) | Item | H1 2025 | H1 2024 | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Revenue | 2,304,962 | 2,066,760 | +11.5% | | Gross Profit | 428,517 | 421,193 | +1.7% | | Operating Profit | 105,119 | 93,175 | +12.8% | | Profit Before Tax | 80,491 | 61,395 | +31.1% | | Profit for the Period | 30,213 | 32,672 | -7.5% | | Profit Attributable to Owners of the Company | 31,511 | 32,524 | -3.1% | | Basic EPS (cents) | 0.44 | 0.46 | -4.3% | [Condensed Consolidated Interim Statement of Comprehensive Income](index=3&type=section&id=Condensed%20Consolidated%20Interim%20Comprehensive%20Income%20Statement) Total comprehensive income for the period shifted from a loss of **$51.78 million** in the prior period to an income of **$71.44 million**, primarily driven by a **$41.31 million** foreign currency exchange gain, compared to an **$84.55 million** exchange loss in the prior period - Foreign currency exchange differences were the primary factor influencing the change in total comprehensive income, shifting from a loss of **$84.55 million** in the prior period to a gain of **$41.31 million** in the current period[5](index=5&type=chunk) [Condensed Consolidated Interim Balance Sheet](index=4&type=section&id=Condensed%20Consolidated%20Interim%20Balance%20Sheet) As of June 30, 2025, the Group's total assets increased to **$5.736 billion** and total liabilities increased to **$3.182 billion**, with asset growth primarily from property, plant, and equipment and inventory, and liability growth mainly from increased bank borrowings Key Balance Sheet Items (thousand USD) | Item | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Total Assets | 5,736,239 | 5,470,183 | +4.9% | | Total Liabilities | 3,182,084 | 2,987,095 | +6.5% | | Total Equity | 2,554,155 | 2,483,088 | +2.9% | [Notes to Financial Statements](index=6&type=section&id=Notes%20to%20Condensed%20Consolidated%20Interim%20Financial%20Information) [Segment Information](index=7&type=section&id=4%20Segment%20Information) The Group's operations are divided into two main segments, Semi-finished Products and Consumer Goods, with Semi-finished Products contributing the vast majority of revenue; by product line, Automotive business doubled due to acquisition, and Cloud and Network Infrastructure business performed strongly driven by AI demand, while the US remained the largest market despite a year-on-year decline, with growth recorded in China, Taiwan, and parts of Europe [Revenue by Operating Segment](index=8&type=section&id=Revenue%20by%20Operating%20Segment) Revenue from the Semi-finished Products segment increased by **14.3%** year-on-year to **$2.018 billion**, while the Consumer Goods segment's revenue decreased by **4.7%** year-on-year to **$287 million** Revenue from External Customers (thousand USD) | Operating Segment | H1 2025 | H1 2024 | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Semi-finished Products | 2,018,217 | 1,765,915 | +14.3% | | Consumer Goods | 286,745 | 300,845 | -4.7% | | **Total** | **2,304,962** | **2,066,760** | **+11.5%** | [Revenue by Product Line](index=9&type=section&id=Revenue%20by%20Product%20Line) Automotive and Cloud and Network Infrastructure businesses were the primary growth drivers, with revenues increasing by **102.3%** and **35.7%** year-on-year respectively, while Smartphone and System Terminal Products businesses experienced revenue declines Revenue by Product Line (thousand USD) | Product Line | H1 2025 | H1 2024 | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Automotive | 459,755 | 227,270 | +102.3% | | Cloud and Network Infrastructure | 353,901 | 260,729 | +35.7% | | Computer and Consumer Electronics | 432,403 | 378,226 | +14.3% | | Smartphone | 365,123 | 415,228 | -12.1% | | System Terminal Products | 588,516 | 671,576 | -12.4% | [Revenue by Geographical Region](index=9&type=section&id=Revenue%20by%20Geographical%20Region) Revenue from the US market decreased by **10.4%** year-on-year but remained the largest market, while China, Singapore, Germany, and Ireland markets achieved significant growth Revenue by Geographical Region (thousand USD) | Region | H1 2025 | H1 2024 | Y-o-Y Change | | :--- | :--- | :--- | :--- | | United States | 812,496 | 906,525 | -10.4% | | China | 382,372 | 347,731 | +9.9% | | Taiwan | 204,742 | 185,138 | +10.6% | | Singapore | 133,002 | 72,077 | +84.5% | | Germany | 79,629 | 37,071 | +114.8% | | Ireland | 79,959 | 39,031 | +104.9% | [Major Customers](index=10&type=section&id=Major%20Customers) The Group has a high reliance on major customers, with two key clients collectively contributing over **43%** of total revenue, where Customer A's revenue decreased while Customer B's revenue increased Major Customer Revenue Contribution (thousand USD) | Customer | H1 2025 | H1 2024 | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Customer A | 717,741 | 812,794 | -11.7% | | Customer B | 284,238 | 244,853 | +16.1% | [Other Gains and Expenses](index=12&type=section&id=6%20Other%20Gains%20-%20Net) The period recorded goodwill impairment losses of **$20.94 million** and property, plant, and equipment impairment losses of **$5.38 million**, primarily related to the acoustics business, which faces a pessimistic outlook due to challenges in raw material supply, production efficiency, and trade policies, leading to recoverable amounts of assets being lower than their carrying values - Due to severe challenges and failure to meet budget targets in the acoustics business, the Group conducted an impairment assessment, recognizing goodwill impairment losses of approximately **$20.94 million** and property, plant, and equipment impairment losses of **$5.38 million**[27](index=27&type=chunk) [Dividends](index=15&type=section&id=9%20Dividends) The Board did not declare any interim dividend for the six months ended June 30, 2025, consistent with the policy in the prior period - The company did not declare an interim dividend for 2025[32](index=32&type=chunk) [Management Discussion and Analysis](index=17&type=section&id=Management%20Discussion%20and%20Analysis) [Business Overview and Outlook](index=17&type=section&id=Business%20Overview%20and%20Outlook) The Group's first-half revenue grew by **11.5%**, primarily driven by strong growth in Automotive business (**+102.3%**) and Cloud and Network Infrastructure business (**+35.7%**), benefiting from the acquisition of Auto-Kabel and demand from the AI server market; looking ahead, the company is optimistic about long-term opportunities from the AI wave and will continue to invest in 5GAIoT, acoustics, and electric vehicle sectors, while remaining cautious about macroeconomic uncertainties - Cloud and Network Infrastructure business revenue increased by **35.7%** year-on-year, benefiting from AI server demand[36](index=36&type=chunk) - Automotive business revenue significantly increased by **102.3%** year-on-year due to the successful acquisition of Auto-Kabel Group[37](index=37&type=chunk) - The company expects the connector industry to recover with the AI wave driving the consumer electronics industry, and will continue to invest in end markets such as 5GAIoT, acoustics, and electric vehicles[42](index=42&type=chunk) [Operating Results](index=20&type=section&id=Operating%20Results) Despite an **11.5%** revenue increase, profit decreased by **7.5%**, primarily due to a decline in gross margin from **20.4%** to **18.6%** and a substantial **75.0%** year-on-year increase in income tax expense, with the gross margin decline attributed to product mix changes and exchange rate impacts, and increased taxes stemming from withholding tax on profit distributions from Chinese subsidiaries Revenue Share by End Market | End Market | H1 2025 Share | H1 2024 Share | | :--- | :--- | :--- | | System Terminal Products | 25.5% | 32.5% | | Automotive | 19.9% | 11.0% | | Computer and Consumer Electronics | 18.8% | 18.3% | | Smartphone | 15.8% | 20.1% | | Cloud and Network Infrastructure | 15.4% | 12.6% | - Gross margin decreased from **20.4%** in the prior period to **18.6%**, primarily due to changes in product mix and exchange rate impacts[47](index=47&type=chunk) - Income tax expense increased by **75.0%** year-on-year, mainly due to withholding tax expenses on profit distributions from Chinese subsidiaries and increased operating profit in certain regions[52](index=52&type=chunk) [Liquidity and Capital Resources](index=22&type=section&id=Liquidity%20and%20Capital%20Resources) The company's financial position is robust, though leverage has increased; as of period-end, cash and cash equivalents were **$1.101 billion**, total bank borrowings increased to **$1.823 billion**, and the debt-to-equity ratio (net debt/total capital) rose from **15.4%** at year-end to **22.1%**, with capital expenditure increasing year-on-year to **$275 million**, primarily for new production facilities Liquidity Metrics | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and Cash Equivalents | 1,101 million USD | 1,113 million USD | | Total Bank Borrowings | 1,823 million USD | 1,538 million USD | | Current Ratio | 1.4 times | 1.4 times | | Quick Ratio | 0.9 times | 1.0 times | | Debt-to-Equity Ratio | 22.1% | 15.4% | - Capital expenditure for the first half was **$275 million**, a **30.3%** year-on-year increase (compared to **$211 million** in the prior period), primarily for establishing new production facilities and upgrading existing ones[57](index=57&type=chunk) [Human Resources and Foreign Exchange Risk](index=25&type=section&id=Human%20Resources%20and%20Foreign%20Exchange%20Risk) As of June 30, 2025, the Group's employee count was approximately **68,970**, an increase of about **11.7%** from year-end, with total employee benefit expenses growing by **15.6%** year-on-year to **$533 million**; the Group faces foreign exchange risk across multiple currencies and has adopted a prudent hedging policy, managing risk through forward foreign exchange contracts - As of June 30, 2025, the Group had approximately **68,970** employees, with total employee benefit expenses of **$533 million**[66](index=66&type=chunk) - The Group hedges foreign exchange risk by entering into forward foreign exchange contracts, with a notional principal amount of **$540 million** as of period-end[68](index=68&type=chunk) [Other Disclosures](index=26&type=section&id=Other%20Disclosures) [Audit and Governance](index=26&type=section&id=Audit%20and%20Governance) The unaudited interim financial information for the period has been reviewed by the Audit Committee and external auditor PricewaterhouseCoopers; the company complied with most provisions of the Corporate Governance Code, with the sole exception being the Chairman and Chief Executive Officer roles held by the same individual (Mr. Lu Songqing), which the Board believes contributes to strong and consistent leadership - The interim financial information has been reviewed by the Audit Committee and external auditor PricewaterhouseCoopers[69](index=69&type=chunk) - The company did not comply with Code Provision C.2.1 regarding the separation of Chairman and Chief Executive Officer roles, with Mr. Lu Songqing holding both positions; the Board believes this arrangement facilitates strong and consistent leadership[70](index=70&type=chunk)
FIT HON TENG(06088) - 2025 - 中期业绩