BOE VARITRONIX(00710)2024-03-21 10:15Financial Performance - The company's revenue for the year 2023 was HKD 10,760 million, a slight increase of 0.4% compared to HKD 10,722 million in 2022[3]. - EBITDA for 2023 decreased by 8% to HKD 771 million, with an EBITDA margin of approximately 7.2% compared to 7.8% in 2022[4]. - Shareholders' profit for 2023 was HKD 475.3 million, down 18% from HKD 582.5 million in 2022, primarily due to price adjustments and increased costs associated with new facilities[4]. - The proposed final dividend per share is HKD 0.19, down from HKD 0.23 in 2022, with a payout ratio of 32% compared to 31% in the previous year[5]. - The group’s net profit for the year was HKD 481,081, down from HKD 559,570 in the previous year[41]. - Basic earnings per share decreased to 60.4 cents from 78.4 cents in the previous year[40]. - The diluted earnings per share for 2023 was HKD 0.603, compared to HKD 0.778 in 2022, indicating a decline of about 22.5%[70]. Revenue Breakdown - The automotive display business generated revenue of HKD 9,710 million in 2023, representing a 1% increase from HKD 9,577 million in 2022, accounting for approximately 90% of total revenue[6]. - The industrial display business recorded revenue of HKD 1,050,000,000, a decrease of approximately 8% compared to HKD 1,145,000,000 in 2022, accounting for about 10% of the group's total revenue[9]. - Revenue in China reached HKD 7,913,000,000, representing a 6% increase compared to the same period in 2022, accounting for 74% of total revenue[32]. - Revenue from the European display business was HKD 1,412,000,000, a decrease of 12% compared to 2022, accounting for 13% of total group revenue[34]. - Revenue in the Americas reached HKD 728,000,000, an increase of approximately 7% year-over-year, representing about 7% of total group revenue[35]. - Revenue from South Korea was HKD 305,000,000, a decrease of approximately 23% year-over-year, accounting for 3% of total group revenue[36]. - Revenue in Japan was HKD 69,000,000, a significant decrease of approximately 57% compared to the previous year, representing 1% of total group revenue[37]. Market Trends and Opportunities - The automotive display module market is projected to have a compound annual growth rate (CAGR) of 4.40%, 8.35%, and 18.16% over the next three years for total shipments, medium to large size (8 inches and above) shipments, and oxide shipments respectively[11]. - The Chinese automotive manufacturers are expected to see a 21% increase in sales of new energy vehicles in 2024, indicating significant market growth potential[12]. - The global sales volume of new energy vehicles from China accounted for about 60% of the global market share in 2023, maintaining its position as the largest in the world for nine consecutive years[12]. - The automotive display system market is expected to reach nearly HKD 100 billion in China by 2026, with the global smart cockpit and smart mobility market projected to reach several hundred billion HKD[12]. - The transition from gasoline and diesel vehicles to new energy vehicles in Europe is expected to create growth opportunities for the company in the European market[11]. Operational Strategies - The company plans to optimize supply chain management and production efficiency to improve profitability[4]. - The new facility in Chengdu, which began operations in 2022, is expected to increase production capacity significantly, enhancing production efficiency and supply capabilities[6]. - The company is enhancing its supply chain management by shifting to lower-cost IC chip suppliers to reduce overall costs and improve profitability[15]. - The company is focusing on developing high-quality products such as oversized automotive displays and curved displays to enhance competitiveness in the automotive sector[14]. - The company is actively expanding its automotive display business and aims to maintain its leading market share by collaborating closely with major automotive manufacturers and suppliers[17]. Research and Development - The company has successfully developed a new generation AR-HUD system and filed 34 technology patents, expanding its product offerings in the smart cockpit display system[29]. - The introduction of OXIDE technology has improved display performance, surpassing traditional a-Si technology, and has been validated for automotive reliability[20]. - The ADS-Pro technology enhances display quality with features like touchless interaction and improved color accuracy, gaining recognition from major automotive manufacturers[22]. - Multiple f-OLED displays have entered mass production, showcasing the company's leadership in flexible OLED technology[23]. - The newly developed pressure touch technology addresses false touch issues in outdoor applications, enhancing usability in challenging environments[27]. Financial Position and Assets - The company maintained a strong cash position with cash and deposits totaling HKD 3,501 million as of December 31, 2023, up from HKD 2,881 million at the end of 2022[3]. - Non-current assets increased to HKD 1,936,645 thousand in 2023 from HKD 1,672,534 thousand in 2022, representing a growth of 15.7%[43]. - Current assets rose to HKD 8,097,225 thousand in 2023, up from HKD 6,610,566 thousand in 2022, marking an increase of 22.4%[44]. - Total liabilities increased to HKD 5,022,791 thousand in 2023 from HKD 4,103,125 thousand in 2022, an increase of 22.4%[44]. - The company's equity totalled HKD 4,409,711 thousand in 2023, compared to HKD 4,115,773 thousand in 2022, showing an increase of 7.1%[44]. Corporate Governance - The board confirmed compliance with corporate governance codes, with some non-executive directors unable to attend the annual general meeting due to other commitments[87]. - The audit committee is responsible for reviewing the group's financial information and monitoring the financial reporting system, risk management, and internal control systems[89]. - The compensation committee oversees the remuneration policies for all directors and senior management, with a majority of independent non-executive directors[90]. - The nomination committee evaluates the board's structure and composition, ensuring compliance with corporate strategy and assessing the independence of non-executive directors[91]. - The investment committee aims to identify and select suitable investment projects to enhance and transform the group’s strategy[92].