JCET Performance Hits Another Record High in 1H 2022, Benefiting From Global Resource Optimization

Q2 2022 Financial Highlights：

Revenue was RMB 7.46 billion,an increase of 4.9% year on year. A record high second quarter in the company's history.

Generated RMB 1.04 billion cash from operations. With net capex investments of RMB 0.64 billion,free cash flow for the quarter was RMB 0.4 billion.

Net profit was RMB 0.68 billion.

Earnings per share was RMB 0.39,as compared to RMB 0.54 in Q2 2021.

1H 2022 Financial Highlights：

Revenue was RMB 15.59 billion,an increase of 12.8% year on year,a record high in the company's history.

Generated RMB 2.68 billion cash from operations. With net capex investments of RMB 1.51 billion,free cash flow for the first half of 2022 was RMB 1.17 billion.

Net profit was RMB 1.54 billion,an increase of 16.7% year on year,a record high in the company's history.

Earnings per share was RMB 0.87,as compared to RMB 0.78 in 1H 2021.

SHANGHAI,Aug. 18,2022 -- Today,JCET Group (SSE: 600584),a leading global provider of integrated circuit (IC) manufacturing and technology services,announced its financial results for the first half year of 2022. The financial report shows that in the first half of 2022,JCET achieved revenue of RMB 15.59 billion,and net profit of RMB 1.54 billion,with an overall solid and positive performance.

In 2022,the global IC market showed local fluctuations,and the demand growth for individual applications slowed down. In the face of these market dynamics,JCET upheld its professional and international management strategies,leveraged its rich technology insights and global resource optimization,and focused on technologies and processes such as advanced packaging and high value-added applications,ensuring steady business operations while maintaining a solid upward development trend.

At the same time,JCET overcame the adverse impact of the recurring local COVID-19 epidemic to ensure stable and orderly production while achieving a series of milestones in innovative technology development and manufacturing expansion.

JCET increased its investment in production and technology development in the field of high-performance packaging and achieved new levels of packaging capabilities for chipsets for smartphones. At the same time,revenue from the automotive electronics and computing electronics markets increased significantly compared to the same period last year,showing that the company is continuing to optimize its product portfolio while focusing on markets of high value-added applications. With the cultivation of differentiated competitiveness,the company is building new momentum for further development. JCET's microelectronics wafer-level micro-system integration high-end manufacturing project officially started construction in July,which is an example of JCET's steady advancement of its business strategy in advanced packaging technology and high-end manufacturing. This will greatly enhance JCET's innovation and manufacturing capability to better meet the needs of global customers and to build up the future growth of the company.

Mr. Li Zheng,CEO of JCET said,"Due to the superimposed impact of the domestic epidemic and the fluctuation of the global economic situation,the overheated semiconductor IC market is likely to enter a downward cycle,especially the decline of the domestic cell phone market and consumer market. This will put certain pressure on the capacity efficiency of the company's domestic plants,and the orders from relevant markets are not optimistic. The company will continue to promote lean production and optimization of our product portfolio,and continue to actively invest in technology development and advanced production capacity in the field of high-performance packaging and testing to lay a solid foundation for future stable development."

For more information,please refer to the JCET 1H FY2022 Report.

About JCET Group

JCET Group is the world's leading integrated-circuit manufacturing and technology services provider,offering a full range of turnkey services that include semiconductor package integration design and characterization,R&D,wafer probe,wafer bumping,package assembly,final test and drop shipment to vendors around the world.

Our comprehensive portfolio covers a wide spectrum of semiconductor applications such as mobile,communication,compute,consumer,automotive and industry etc.,through advanced wafer level packaging,2.5D/3D,System-in-Packaging,and reliable flip chip and wire bonding technologies. JCET Group has two R&D centers in China and Korea,six manufacturing locations in China,Korea and Singapore,and sales centers around the world,providing close technology collaboration and efficient supply-chain manufacturing to customers in China and around the world.

CONSOLIDATED BALANCE SHEET (Unaudited)

RMB in millions

Jun 30,2022

Dec 31,2021

ASSETS

Current assets

Currency funds

2,356

2,761

Trading financial assets

3,440

2,670

Derivative financial assets

5

Accounts receivable

3,695

4,271

Receivables financing

66

28

Prepayments

145

183

Other receivables

62

77

Inventories

3,771

3,193

Assets classified as held for sale

99

Other current assets

128

130

Total current assets

13,663

13,417

Non-current assets

Long-term receivables

37

38

Long-term equity investments

762

770

Other equity investments

441

418

Investment properties

91

93

Fixed assets

18,485

18,424

Construction in progress

961

661

Right-of-use assets

592

622

Intangible assets

485

447

Goodwill

2,130

2,023

Deferred tax assets

183

185

Other non-current assets

1

1

Total non-current assets

24,168

23,682

Total assets

37,831

37,099

LIABILITIES AND EQUITY

Jun 30,2021

Current liabilities

Short-term borrowings

1,673

2,193

Derivative financial liabilities

16

2

Notes payable

215

579

Accounts payable

5,288

5,298

Contract liabilities

357

458

Employee benefits payable

929

1,062

Taxes and surcharges payable

180

235

Other payables

757

414

Liabilities classified as held for sale

45

Current portion of long-term liabilities

1,068

1,052

Other current liabilities

4

3

Total current liabilities

10,487

11,341

Non-current liabilities

Long-term borrowings

3,767

3,751

Lease liabilities

540

568

Long-term employee benefits payable

7

20

Deferred income

358

337

Deferred tax liabilities

95

82

Total non-current liabilities

4,767

4,758

Total liabilities

15,254

16,099

Equity

Paid-in capital

1,780

1,780

Capital reserves

14,996

14,984

Accumulated other comprehensive income

105

(281)

Surplus reserves

174

174

Unappropriated profit

5,522

4,334

Total equity attributable to owners of the parent

22,577

20,991

Minority shareholders

9

Total equity

22,577

21,000

Total liabilities and equity

37,099

CONSOLIDATED INCOME STATEMENT (Unaudited)

RMB in millions,except share data

Three months ended

Six months ended

Jun 30,2022

Jun 30,2021

Jun 30,2021

Revenue

7,455

7,106

15,594

13,818

Less: Cost of sales

6,107

5,793

12,706

11,430

Taxes and surcharges

27

22

43

42

Selling expenses

48

47

97

97

Administrative expenses

236

237

494

467

Research and development expenses

315

291

638

548

Finance expenses

(8)

61

15

157

Including: Interest expenses

49

90

92

200

Interest income

9

15

16

20

Add: Other income

26

56

83

97

Investment income / (loss)

28

286

40

284

Including: Income / (loss) from investments in associates and joint ventures

(2)

285

(7)

283

Gain / (loss) on the net position hedging

(1)

(3)

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

(17)

(14)

Credit impairment (loss is expressed by "-")

2

(4)

(5)

Asset impairment (loss is expressed by "-")

(65)

11

(64)

(17)

Gain / (loss) on disposal of assets

9

9

23

15

Operating profit / (loss)

713

1,012

1,664

1,453

Add: Non-operating income

1

5

6

6

Less: Non-operating expenses

1

1

1

3

Profit / (loss) before income taxes

713

1,016

1,669

1,456

Less: Income tax expenses

31

80

126

133

Net profit / (loss)

682

936

1,543

1,323

Classified by continuity of operations

Profit / (loss) from continuing operations

682

936

1,543

1,323

Classified by ownership

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

682

936

1,322

Net profit / (loss) attributable to minority shareholders

1

Add: Unappropriated profit at beginning of period

5,196

1,904

4,335

1,518

Less: Cash dividends payable

356

89

356

89

Unappropriated profit at end of period (attributable to owners of the parent）

5,522

2,751

5,751

Other comprehensive income,net of tax

419

(148)

386

(101)

Comprehensive income attributable to owners of the parent

419

(148)

386

(101)

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

419

(148)

386

(102)

Comprehensive income using the equity method that may be reclassified to profit or loss

(7)

(20)

(7)

(20)

Cash flow hedge reserve

(13)

5

(18)

(5)

Exchange differences of foreign currency financial statements

439

(133)

411

(77)

Total comprehensive income

1,101

788

1,929

1,222

Including:

Total comprehensive income attributable to owners of the parent

1,101

788

1,929

1,221

Total comprehensive income attributable to minority shareholders

1

Earnings per share

Basic earnings per share

0.39

0.54

0.87

0.78

Diluted earnings per share

0.39

0.54

0.87

0.78

CONSOLIDATED CASH FLOW STATEMENT (Unaudited)

RMB in millions

Three months ended

Six months ended

Jun 30,2021

CASH FLOWS FROM OPERATING ACTIVITIES

Cash receipts from the sale of goods and the rendering of services

8,184

7,346

16,999

14,785

Receipts of taxes and surcharges refunds

32

76

147

233

Other cash receipts relating to operating activities

62

62

132

113

Total cash inflows from operating activities

8,278

7,484

17,278

15,131

Cash payments for goods and services

5,766

4,347

11,612

9,420

Cash payments to and on behalf of employees

1,060

1,142

2,309

2,270

Payments of all types of taxes and surcharges

314

249

501

379

Other cash payments relating to operating activities

93

69

171

181

Total cash outflows from operating activities

7,233

5,807

14,593

12,250

Net cash flows from operating activities

1,045

1,677

2,685

2,881

CASH FLOWS FROM INVESTING ACTIVITIES

Cash receipts from returns of investments

4,160

396

5,160

396

Cash receipts from investment income

32

38

Net cash receipts from disposal of fixed assets,intangible assets and other long-term assets

8

132

34

168

Net cash receipts from disposal of subsidiaries and other business units

(1)

27

Total cash inflows from investing activities

4,199

528

5,259

564

Cash payments to acquire fixed assets,intangible assets and other long-term assets

651

1,051

1,550

1,648

Cash payments for investments

4,310

1,955

5,960

1,955

Total cash outflows from investing activities

4,961

3,006

7,510

3,603

Net cash flows from investing activities

(762)

(2,478)

(2,251)

(3,039)

CASH FLOWS FROM FINANCING ACTIVITIES

Cash proceeds from investments by others

4,966

4,966

Cash receipts from borrowings

985

737

1,515

2,360

Other cash receipts relating to financing activities

347

Total cash inflows from financing activities

985

5,703

1,515

7,673

Cash repayments for debts

988

2,867

1,734

5,529

Cash payments for distribution of dividends or profit and interest expenses

49

71

90

205

Other cash payments relating to financing activities

446

452

589

559

Total cash outflows from financing activities

1,483

3,390

2,413

6,293

Net cash flows from financing activities

(498)

2,313

(898)

1,380

EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS

59

(15)

57

(8)

NET INCREASE IN CASH AND CASH EQUIVALENTS

(156)

1,497

(407)

1,214

Add: Cash and cash equivalents at beginning of period

2,512

1,884

2,763

2,167

CASH AND CASH EQUIVALENTS AT END OF PERIOD

2,356

3,381

2,381