JCET Innovation and Manufacturing Strategies Deliver Record High Revenue for FY2020 with Profits Twice the Total of the Last 17 Years

Fourth Quarter and Fiscal Year 2020 Financial Results:

Fourth-quarter revenue was RMB 7.70 billion. On a comparable basis,taking into account the accounting change in revenue recognition,it was an increase of 17.6% year on year (see note 1).

Full-year revenue was RMB 26.46 billion. On a comparable basis,it was an increase of 28.2% year on year (see note 2).

Fourth-quarter cash from operations was RMB 1.80 billion. With net capex investments of RMB 1.01 billion,free cash flow for the quarter was RMB 0.79 billion.

Full-year cash from operations was RMB 5.43 billion,up 71.1% year on year. With net capex investments of RMB 3.01 billion,free cash flow for the year was RMB 2.42 billion.

Fourth-quarter net profit was RMB 0.54 billion. Full-year net profit was RMB 1.30 billion,a record high in the company's history.

Earnings per share was RMB 0.34 in the fourth quarter and RMB 0.81 for the full year,as compared to RMB 0.17 in Q4 2019 and RMB 0.06 in 2019 respectively.

Note 1:During the reporting period,we optimized the business model for the purchase and sale of certain packaged products,of which JCET Group no longer bears the general inventory risk on the main raw materials. In accordance with PRC GAAP,both revenue and costs of goods sold were recorded on the net basis and decreased by RMB 0.92 billion respectively. This change had no impact on the company's net profit. Assuming that revenue was still recognized by the gross method (should be recorded on the net basis according to PRC GAAP),it would be RMB 8.62 billion,an increase of 17.6% over the same period last year.

Note 2:During the reporting period,both revenue and costs of goods sold were recorded on the net basis and decreased by RMB 3.70 billion respectively. This change had no impact on the company's net profit. Assuming that revenue was still recognized by the gross method (should be recorded on the net basis according to PRC GAAP),it would be RMB 30.16 billion,an increase of 28.2% over the same period last year.

SHANGHAI,April 28,2021 -- JCET (SSE: 600584),a leading global provider of integrated circuit (IC) manufacturing and technology services,today announced its full year financial results for the year ended December 31,2020. According to the financial report,in 2020,JCET achieved solid and rapid growth with strong profitability,with revenue of RMB 26.46billionand net profit of RMB 1.30billion.

The demand for semiconductor products was historically strong in 2020,driven by the rapid development and integration of 5G and AI. JCET was poised and ready for this opportunity,delivering a record level performance for FY2020 by successfully optimizing and integrating the technology,management and production capacity resources of its domestic and international manufacturing hubs and R&D centers. JCET also leveraged its years of accumulated industry know-how and continued expanding its investment in both R&D and talent development,resulting in a year-on-year increase of 5.2% in R&D expenditure and 154 new patents. JCET's core technologies include advanced packaging technologies such as System-in-Package (SiP),high-density flip-chip and wafer-level-packaging (WLP),providing innovative solutions for 5G communication,automotive,high-performance computing,storage and other demanding applications. During FY2020,the cumulative number of JCET patents grew to 3,238. The expansion of intellectual property has created a solid foundation for future innovations that will be needed to meet the unique and complex demands of the market.

Mr. Li Zheng,CEO of JCET said,"With over 50 years of OSAT industry experiences,JCET is now firmly positioned as a tier-1 global IC manufacturing and service provider. With the support and guidance from our new board of directors,the company has successfully optimized and integrated our technology,talent and production recourses throughout our operations around the world. We have made significant investments to continue developing innovative packaging technologies as well as assembly and test manufacturing processes. These strategic initiatives led to our record breaking performance in 2020 and have also positioned us well for the opportunities that lie ahead of us in 2021!"

Ms. Janet Chou,CFO of JCET said,"We delivered record level annual revenue,profit and free cash flows in 2020. The net profit for the year was approximately twice the sum of the net profits for the 17 years since the public listing of JCET. We strengthened our balance sheet with significant improvements in our key financial metrics. We announced a common stock dividend of RMB 0.05 per share. Our focus on advanced packaging technologies is paying off."

In the post-Moore era,technical collaboration across the IC industry chain is becoming more and more important. As a leading supplier in the IC industry,JCET continues operating by its core value of "win-win cooperation" and is committed to promoting the collaborative development of the supply chain to enable the semiconductor industry to successfully overcome the challenges created by the growing demands of the market.

For more information,please refer to JCET FY2020 report.

CONSOLIDATED BALANCE SHEET (Audited)

RMB in millions

As of

ASSETS

Dec 31,2020

Dec 31,2019

Current assets

Currency funds

2,235

2,569

Trading financial assets

5

Derivative financial assets

8

4

Accounts receivable

3,846

3,350

Receivables financing

41

68

Prepayments

158

188

Other receivables

41

11

Inventories

2,946

2,731

Current portion of non-current assets

137

Other current assets

149

501

Total current assets

9,429

9,559

Non-current assets

Long-term receivables

42

40

Long-term equity investments

949

972

Other equity investments

430

517

Investment properties

96

100

Fixed assets

17,790

17,799

Construction in progress

866

1,664

Intangible assets

526

587

Goodwill

2,071

2,214

Long-term prepaid expenses

1

Deferred taxassets

128

128

Other non-currentassets

1

1

Total non-currentassets

22,899

24,023

Total assets

32,328

33,582

CONSOLIDATED BALANCE SHEET (CONTINUED)(Audited)

RMB in millions

As of

LIABILITIES AND EQUITY

Dec 31,2019

Current liabilities

Short-term borrowings

5,288

9,098

Derivative financial liabilities

161

Notes payable

513

958

Accounts payable

4,499

4,618

Receipts in advance

113

Contract liabilities

173

Employee benefits payable

858

586

Taxes and surcharges payable

109

53

Other payables

254

235

Current portion of long-term liabilities

2,131

1,827

Other current liabilities

21

Total current liabilities

13,846

17,649

Non-current liabilities

Long-term borrowings

2,978

1,585

Bonds payable

999

Long-term payables

592

1,216

Long-termemployee benefits payable

4

1

Deferred income

375

337

Deferred taxliabilities

124

156

Total non-currentliabilities

5,072

3,295

Total liabilities

18,918

20,944

Equity

Paid-in capital

1,603

1,603

Surplus reserves

10,242

10,242

Accumulated other comprehensive income

(83)

429

Specialized reserves

120

122

Unappropriated profit

1,518

231

Totalequity attributable to owners of the parent

13,400

12,627

Minority shareholders

10

11

Total equity

13,410

12,638

Total liabilities and equity

32,582

CONSOLIDATED INCOME STATEMENT (Audited)

RMB in millions,except share data

Three months ended

Year ended

Dec 31,2019

Dec 31,2019

Revenue

7,701

7,330

26,464

23,526

Less: Cost of sales

6,512

6,388

22,374

20,895

Taxes and surcharges

20

10

48

37

Selling expenses

50

67

225

265

Administrative expenses

350

230

1,037

1,044

Research and development expenses

252

393

1,020

969

Finance expenses

152

213

634

870

Including: Interest expenses

136

153

569

742

Interest income

11

7

42

27

Add: Other income

88

79

185

296

Investment income / (loss)

6

6

(2)

7

Including: Income / (loss) from investments

in associates and joint ventures

(3)

3

(11)

4

Gain / (loss) on the net position hedging

(5)

(14)

(4)

(13)

Gain / (loss) on changes in fair value of financial

assets/liabilities

39

(86)

67

(86)

Credit impairment (loss is expressed by "-")

1

(29)

(7)

(35)

Asset impairment (loss is expressed by "-")

(62)

(219)

(87)

(234)

Gain / (loss) on disposal of assets

126

730

168

744

Operating profit / (loss)

558

496

1,446

125

Add: Non-operating income

3

6

6

6

Less: Non-operating expenses

3

47

21

51

Profit / (loss) before income taxes

558

455

1,431

80

Less: Income tax expenses

17

178

125

(17)

Net profit / (loss)

541

277

1,306

97

Classified by continuity of operations

Profit / (loss) from continuing operations

541

277

1,306

97

Classified by ownership

Net profit / (loss) attributable to owners of the parent

540

271

1,304

89

Net profit / (loss) attributable to minority shareholders

1

6

2

8

Add: Unappropriated profit at beginning of period

994

(40)

231

142

Less: Other reductions

16

17

Unappropriated profit at end of period (attributable to

owners of the parent）

1,518

231

1,518

231

CONSOLIDATED INCOME STATEMENT (CONTINUED) (Audited)

RMB in millions,2019

Other comprehensive income,net of tax

(308)

(42)

(505)

156

Comprehensive income attributable to owners of the

parent

(308)

(42)

(505)

156

Comprehensive income not be reclassified to profit or loss

(40)

10

(50)

10

Remeasurement gains or losses of a defined benefit plan

(2)

(1)

(2)

(1)

Change in the fair value of other equity investments

(38)

11

(48)

11

Comprehensive income to be reclassified to profit or loss

(268)

(52)

(455)

146

Cash flow hedge reserve

(3)

(1)

(1)

3

Exchange differences of foreign currency financial statements

(265)

(51)

(454)

143

Total comprehensive income

233

235

801

253

Including:

Total comprehensive income attributable to owners of

the parent

232

229

799

245

Total comprehensive income attributable to minority

shareholders

1

6

2

8

Earnings per share

Basic earnings per share

0.34

0.17

0.81

0.06

Diluted earnings per share

0.34

0.17

0.81

0.06

CONSOLIDATEDCASH FLOWSTATEMENT (Audited)

RMB in millions,2019

CASH FLOWS FROM OPERATING ACTIVITIES

Cash receipts from the sale of goods and the rendering of

services

7,989

7,548

27,350

24,199

Receipts of taxes and surcharges refunds

(42)

354

486

651

Other cash receipts relating to operating activities

139

120

905

396

Total cash inflows from operating activities

8,086

8,022

28,741

25,246

Cash payments for goods and services

4,891

5,009

18,475

17,385

Cash payments to and on behalf of employees

1,143

1,067

3,787

3,766

Payments of all types of taxes and surcharges

186

(158)

499

253

Other cash payments relating to operating activities

63

290

545

666

Total cash outflows from operating activities

6,283

6,208

23,306

22,070

Net cash flows from operating activities

1,803

1,814

5,435

3,176

CASH FLOWS FROM INVESTING ACTIVITIES

Cash receipts from returns of investments

6

(30)

12

73

Cash receipts from investment income

9

31

9

32

Net cash receipts from disposal of fixed assets,intangible

assets and other long-term assets

253

23

318

68

Net cash receipts from disposal of subsidiaries and other

business units

56

56

Other cash receipts relating to investing activities

81

81

20

Total cash inflows from investing activities

405

24

476

193

Cash payments to acquire fixed assets,intangible assets and

other long-term assets

1,268

647

3,330

2,803

Cash payments for investments

5

5

Total cash outflows from investing activities

1,273

647

3,335

2,803

Net cash flows from investing activities

(868)

(623)

(2,859)

(2,610)

CONSOLIDATEDCASH FLOWSTATEMENT(CONTINUED)(Audited)

RMB in millions,2019

CASH FLOWS FROM FINANCING ACTIVITIES

Cash receipts from borrowings

5,775

3,437

15,725

14,280

Other cash receipts relating to financing activities

238

2,118

Total cash inflows from financing activities

5,675

15,725

16,398

Cash repayments for debts

5,738

4,687

16,190

17,300

Cash payments for distribution of dividends or profit and

interest expenses

189

57

614

726

Including: Dividends or profit paid to non-controlling

shareholders of subsidiaries

3

3

Other cash payments relating to financing activities

676

545

1,167

1,311

Total cash outflows from financing activities

6,603

5,289

17,971

19,337

Net cash flows from financing activities

(828)

(1,614)

(2,246)

(2,939)

EFFECT OF EXCHANGE RATE CHANGES ON CASH AND

CASH EQUIVALENTS

4

(10)

(29)

33

NET INCREASE IN CASH AND CASH EQUIVALENTS

111

(433)

301

(2,340)

Add: Cash and cash equivalents at beginning of period

2,056

2,299

1,866

4,206

CASH AND CASH EQUIVALENTS AT END OF PERIOD

2,167

1,866

2,866