Fully Integrated and Optimized Strategies for Growth Propel JCET to Quarterly Highs for Revenue and Profit in Q1 2021

Q1 2021 financial highlights:

Revenue was RMB 6.71 billion. It was an increase of 17.6% year on year and a record high first quarter in the company's history.

Generated RMB 1.20 billion cash from operations,up 4.9% year on year. With net capex investments of RMB 0.56 billion,free cash flow for the quarter was RMB 0.64 billion.

Net profit was RMB 0.39 billion. A record high first quarter in the company's history with 188.7% year on year growth.

Earnings per share was RMB 0.24,as compared to RMB 0.08 in Q1 2020.

SHANGHAI,April 28,2021 -- JCET (SSE: 600584),a leading global provider of integrated circuit (IC) manufacturing and technology services,today announced its financial results for the first quarter of 2021 ended March 31,2021. According to the financial report,in Q1 2021,JCET maintained its momentum of growth and strong profitability,with revenue of RMB 6.71 billionand net profit of RMB 0.39 billion,which achieved 17.6% and 188.7% year on year growth respectively

In 2020,JCET played on its strengths of unparalleled industry insights and strategies,promoted development with innovation,and improved efficiency led by a world class management team. After nearly two years of resource optimization and integration,JCET's operations are now running in their optimum mode. With a concise development strategy and roadmap in place,as well as a team driven by passion to win,JCET has constructed a solid foundation for growth in 2021.

Mr. Li Zheng,CEO of JCET said,"After reaching new highs in financial performance for 2020,including a net profit more than doubled of the previous 17 years' combined,JCET's earnings and revenue for the first quarter of 2021 again set new records year-over-year. Our continued excellence in R&D,manufacturing and strategic management is the key to our success and positions us well for even better results in 2021."

Ms. Janet Chou,CFO of JCET said: "We achieved record quarterly revenue and profitability. Our gross margin expanded 2.9 percentage points year over year. Our debt leverage ratio decreased to below 2.0. We delivered RMB 0.64 billion free cash flow which demonstrated the strength of our business model. Our outstanding performance reflects solid execution of our growth strategy."

Recently,with a strong recovery underway in the automotive market and an increased demand for deeper collaborative design within the industry supply chain,JCET announced the official opening of its Automotive Electronics Business Center and Design Services Business Centerto further enhance the technology innovation advantage. The investment of resources into these two new business units demonstrates JCET's commitment to promoting collaborative and synergistic development across the IC industry and further strengthens its position for continued growth.

For more information,please refer to JCET Q1FY2021 report.

CONSOLIDATED BALANCE SHEET (Unaudited)

RMB in millions

As of

ASSETS

Mar 31,2021

Dec 31,2020

Current assets

Currency funds

1,913

2,235

Trading financial assets

5

5

Derivative financial assets

8

Accounts receivable

3,458

3,846

Receivables financing

58

41

Prepayments

190

158

Other receivables

26

41

Inventories

2,650

2,946

Other current assets

83

149

Total current assets

8,383

9,429

Non-current assets

Long-term receivables

40

42

Long-term equity investments

948

949

Other equity investments

432

430

Investment properties

95

96

Fixed assets

18,065

17,790

Construction in progress

689

866

Right-of-use assets

709

Intangible assets

477

526

Goodwill

2,086

2,071

Deferred tax assets

106

128

Other non-current assets

1

1

Total non-current assets

23,648

22,899

Total assets

32,031

32,328

CONSOLIDATED BALANCE SHEET (CONTINUED) (Unaudited)

RMB in millions

As of

LIABILITIES AND EQUITY

Mar 31,2020

Current liabilities

Short-term borrowings

4,477

5,288

Derivative financial liabilities

7

Notes payable

449

513

Accounts payable

4,155

4,499

Contract liabilities

271

173

Employee benefits payable

664

858

Taxes and surcharges payable

135

109

Other payables

232

254

Current portion of long-term liabilities

2,474

2,131

Other current liabilities

315

21

Total current liabilities

13,179

13,846

Non-current liabilities

Long-term borrowings

2,446

2,978

Bonds payable

999

999

Lease liabilities

597

Long-term payables

487

592

Long-term employee benefits payable

7

4

Deferred income

344

375

Deferred tax liabilities

129

124

Total non-current liabilities

5,009

5,072

Total liabilities

18,188

18,918

Equity

Paid-in capital

1,603

1,603

Surplus reserves

10,242

10,242

Accumulated other comprehensive income

(36)

(83)

Specialized reserves

120

120

Unappropriated profit

1,904

1,518

Total equity attributable to owners of the parent

13,833

13,400

Minority shareholders

10

10

Total equity

13,843

13,410

Total liabilities and equity

32,328

CONSOLIDATED INCOME STATEMENT (Unaudited)

RMB in millions,except share data

Three months ended

Mar 31,2021

Mar 31,2020

Revenue

6,712

5,708

Less: Cost of sales

5,636

4,961

Taxes and surcharges

20

8

Selling expenses

49

57

Administrative expenses

230

209

Research and development expenses

258

215

Finance expenses

96

147

Including: Interest expenses

110

154

Interest income

5

9

Add: Other income

41

34

Investment income / (loss)

(2)

(1)

Including: Income / (loss) from investments

in associates and joint ventures

(2)

(1)

Gain / (loss) on the net position hedging

(2)

(1)

Credit impairment (loss is expressed by "-")

4

5

Asset impairment (loss is expressed by "-")

(28)

3

Gain / (loss) on disposal of assets

6

4

Operating profit / (loss)

442

155

Less: Non-operating expenses

2

6

Profit / (loss) before income taxes

440

149

Less: Income tax expenses

53

15

Net profit / (loss)

387

134

Classified by continuity of operations

Profit / (loss) from continuing operations

387

134

Classified by ownership

Net profit / (loss) attributable to owners of the

parent

386

134

Net profit / (loss) attributable to minority shareholders

1

Add: Unappropriated profit at beginning of period

1,518

231

Unappropriated profit at end of period (attributable to

owners of the parent)

1,904

365

CONSOLIDATED INCOME STATEMENT (CONTINUED) (Unaudited)

RMB in millions,2020

Other comprehensive income,net of tax

47

131

Comprehensive income attributable to owners of the

parent

47

131

Comprehensive income not be reclassified to profit or loss

1

Remeasurement gains or losses of a defined benefit

plan

1

Comprehensive income to be reclassified to profit or loss

46

131

Cash flow hedge reserve

(10)

(2)

Exchange differences of foreign currency financial

statements

56

133

Total comprehensive income

434

265

Including:

Total comprehensive income attributable to owners

of the parent

433

265

Total comprehensive income attributable to minority

shareholders

1

Earnings per share

Basic earnings per share

0.24

0.08

Diluted earnings per share

0.24

0.08

CONSOLIDATED CASH FLOW STATEMENT(Unaudited)

RMB in millions

Three months ended

Mar 31,2020

CASH FLOWS FROM OPERATING ACTIVITIES

Cash receipts from the sale of goods and the rendering of

services

7,439

6,035

Receipts of taxes and surcharges refunds

157

223

Other cash receipts relating to operating activities

51

293

Total cash inflows from operating activities

7,647

6,551

Cash payments for goods and services

5,073

4,225

Cash payments to and on behalf of employees

1,128

959

Payments of all types of taxes and surcharges

130

90

Other cash payments relating to operating activities

112

128

Total cash outflows from operating activities

6,443

5,402

Net cash flows from operating activities

1,204

1,149

CASH FLOWS FROM INVESTING ACTIVITIES

Net cash receipts from disposal of fixed assets,intangible

assets and other long-term assets

36

7

Total cash inflows from investing activities

36

7

Cash payments to acquire fixed assets,intangible assets

and other long-term assets

597

678

Total cash outflows from investing activities

597

678

Net cash flows from investing activities

(561)

(671)

CONSOLIDATED CASH FLOW STATEMENT (CONTINUED) (Unaudited)

RMB in millions

Three months ended

Mar 31,2020

CASH FLOWS FROM FINANCING ACTIVITIES

Cash receipts from borrowings

1,623

5,931

Other cash receipts relating to financing activities

347

Total cash inflows from financing activities

1,970

5,931

Cash repayments for debts

2,662

5,748

Cash payments for distribution of dividends or profit and

interest expenses

134

164

Other cash payments relating to financing activities

107

174

Total cash outflows from financing activities

2,903

6,086

Net cash flows from financing activities

(933)

(155)

EFFECT OF EXCHANGE RATE CHANGES ON CASH

AND CASH EQUIVALENTS

7

22

NET INCREASE IN CASH AND CASH EQUIVALENTS

(283)

345

Add: Cash and cash equivalents at beginning of period

2,167

1,866

CASH AND CASH EQUIVALENTS AT END OF PERIOD

1,884

2,211