JCET Hits New Highs for Performance in Q3, High-Performance Packaging Technology Opens New Opportunities for Semiconductor Back-end Manufacturing

Q3 2022 Financial Highlights：

Revenue was RMB 9.18 billion,an increase of 13.4% year-on-year. A record high third quarter in the company's history.

Generated RMB 1.70 billion cash from operations. With net capex investments of RMB 1.07 billion,free cash flow for the quarter was RMB 0.63 billion.

Net profit was RMB 0.91 billion,a record high third quarter in the company's history.

Earnings per share was RMB 0.51,as compared to RMB 0.45 in Q3 2021.

Q3 YTD 2022 Financial Highlights：

Revenue was RMB 24.78 billion,an increase of 13.1% year-on-year,a record high in the company's history.

Generated RMB 4.38 billion cash from operations. With net capex investments of RMB 2.58 billion,free cash flow for the first three quarters of 2022 was RMB 1.80 billion.

Net profit was RMB 2.45 billion,a record high in the company's history.

Earnings per share was RMB 1.38,as compared to RMB 1.23 in Q3 YTD 2021.

SHANGHAI,Oct. 27,2022 -- Today,JCET Group (SSE: 600584),a leading global provider of integrated circuit (IC) manufacturing and technology services,announced its financial results for the third quarter of 2022. The financial report shows that in the third quarter,JCET achieved revenue of RMB 9.18 billion,an increase of 13.4% year-on-year,and net profit of RMB 0.91 billion,an increase of 14.6% year-on-year,a record high third quarter in the company's history.

In recent years,JCET leverages its international and domestic "dual circulation" model,constantly optimizes the product structure and its business proportion,flexibly adjusts the order structure and capacity layout,and enhances its ability to withstand cyclical fluctuations.

JCET accelerated the research and development of high-performance packaging and testing technologies including 2.5D/3D chiplet integration,and the introduction of customer products. The company strengthened the development of high-value added markets such as automotive electronics,computing electronics and 5G communications,and enhanced value-added services such as high-end testing and design services. The related revenue and proportion increased rapidly. Among them,the company's advanced packaging related revenue,which mainly includes high-density system level packaging technology,large size flip chip technology and fan-out wafer level packaging technology increased by 21% year-on-year in the first three quarters. The revenue related to automotive electronics and computing electronics increased 59% year-on-year in the first three quarters. At the same time,the company's overseas factories grew strongly,and through deepening lean production and strengthening cost control,the company overcame the trend and achieved record high growth in the third quarter. The company continued to improve the management of working capital,stably produced abundant cash flow,and laid a solid foundation for sustainable development in the future.

At the same time,the company makes great efforts in innovation,cooperates with the industrial supply chain,continuously improves talent incentives,employee care and other measures,practices corporate social responsibility,and stimulates the cohesion of all employees. The company launched its first employee stock ownership plan and stock option incentive plan since its public listing,reflecting the firm confidence of all its employees in the long-term development of the company.

Mr. Li Zheng,CEO of JCET said,"In recent years,JCET has successfully introduced the mass production of high-density high-performance packaging technology to many of the world's leading IC manufacturers,providing a solid foundation for the company to expand its market share in advanced technology and solidify its steady growth. In the first three quarters of this year,the revenue and profit from JCET's high-density system-level packaging technology and fan-out wafer level packaging technology increased significantly compared with the same period last year,reflecting the significant growth in the large-scale application of semiconductor heterogeneous integrated packaging in computers,new energy vehicles,smart cars,intelligent manufacturing,and other fields. JCET will further increase its resource investment in relevant technologies and markets and is confident to continue strengthening its leading position in the global high-performance packaging market."

Click to view: JCET 2022 Third Quarter 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

Sep 30,2022

Dec 31,2021

ASSETS

Current assets

Currency funds

2,412

2,761

Trading financial assets

4,151

2,670

Derivative financial assets

5

Accounts receivable

5,043

4,271

Receivables financing

98

28

Prepayments

205

183

Other receivables

72

77

Inventories

4,157

3,193

Assets classified as held for sale

99

Other current assets

132

130

Total current assets

16,270

13,417

Non-current assets

Long-term receivables

35

38

Long-term equity investments

764

770

Other equity investments

434

418

Investment properties

90

93

Fixed assets

19,088

18,424

Construction in progress

1,107

661

Right-of-use assets

597

622

Intangible assets

484

447

Goodwill

2,253

2,023

Deferred tax assets

179

185

Other non-current assets

1

1

Total non-current assets

25,032

23,682

Total assets

41,302

37,099

LIABILITIES AND EQUITY

Sep 30,2021

Current liabilities

Short-term borrowings

1,885

2,193

Derivative financial liabilities

27

2

Notes payable

312

579

Accounts payable

6,700

5,298

Contract liabilities

332

458

Employee benefits payable

1,023

1,062

Taxes and surcharges payable

207

235

Other payables

498

414

Liabilities classified as held for sale

45

Current portion of long-term liabilities

2,096

1,052

Other current liabilities

4

3

Total current liabilities

13,084

11,341

Non-current liabilities

Long-term borrowings

3,375

3,751

Lease liabilities

543

568

Long-term employee benefits payable

8

20

Deferred income

351

337

Deferred tax liabilities

79

82

Total non-current liabilities

4,356

4,758

Total liabilities

17,440

16,099

Equity

Paid-in capital

1,780

1,780

Capital reserves

15,016

14,984

Less: Treasury shares

(89)

Accumulated other comprehensive income

550

(281)

Surplus reserves

174

174

Unappropriated profit

6,431

4,334

Total equity attributable to owners of the parent

23,862

20,991

Minority shareholders

9

Total equity

23,862

21,000

Total liabilities and equity

41,099

CONSOLIDATED INCOME STATEMENT (Unaudited)

RMB in millions,except share data

Three months ended

Nine months ended

Sep 30,2022

Sep 30,2021

Sep 30,2021

Revenue

9,184

8,099

24,778

21,917

Less: Cost of sales

7,616

6,576

20,323

18,006

Taxes and surcharges

26

16

69

58

Selling expenses

45

49

142

145

Administrative expenses

312

276

805

743

Research and development expenses

343

312

980

860

Finance expenses

(26)

20

(11)

176

Including: Interest expenses

51

70

143

270

Interest income

5

14

21

34

Add: Other income

55

38

138

135

Investment income / (loss)

25

15

65

299

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

1

3

(6)

286

Gain / (loss) on the net position hedging

(8)

(11)

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

(25)

(40)

Credit impairment (loss is expressed by "-")

22

14

17

14

Asset impairment (loss is expressed by "-")

(61)

(34)

(125)

(52)

Gain / (loss) on disposal of assets

18

16

41

30

Operating profit / (loss)

902

891

2,566

2,344

Add: Non-operating income

40

46

6

Less: Non-operating expenses

8

1

11

Profit / (loss) before income taxes

942

883

2,611

2,339

Less: Income tax expenses

33

89

159

222

Net profit / (loss)

909

794

2,452

2,117

Classified by continuity of operations

Profit / (loss) from continuing operations

909

794

2,452

2,117

Classified by ownership

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

909

793

2,116

Net profit / (loss) attributable to minority shareholders

1

1

Add: Unappropriated profit at beginning of period

5,522

2,751

4,335

1,517

Less: Cash dividends payable

356

89

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

6,431

3,544

6,544

Other comprehensive income,net of tax

446

24

832

(78)

Comprehensive income attributable to owners of the parent

446

24

832

(78)

Comprehensive income not be reclassified to profit or loss

(14)

(14)

1

Remeasurement gains or losses of a defined benefit plan

1

Change in the fair value of other equity investments

(14)

(14)

Comprehensive income to be reclassified to profit or loss

460

24

846

(79)

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

7

(21)

Cash flow hedge reserve

(9)

(4)

(26)

(9)

Exchange differences of foreign currency financial statements

462

28

872

(49)

Total comprehensive income

1,355

818

3,284

2,039

Including:

Total comprehensive income attributable to owners of the parent

1,355

817

3,284

2,038

Total comprehensive income attributable to minority shareholders

1

1

Earnings per share

Basic earnings per share

0.51

0.45

1.38

1.23

Diluted earnings per share

0.51

0.45

1.38

1.23

CONSOLIDATED CASH FLOW STATEMENT (Unaudited)

RMB in millions

Three months ended

Nine months ended

Sep 30,2021

CASH FLOWS FROM OPERATING ACTIVITIES

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

8,201

8,048

25,200

22,834

Receipts of taxes and surcharges refunds

126

107

273

340

Other cash receipts relating to operating activities

87

94

218

207

Total cash inflows from operating activities

8,414

8,249

25,691

23,381

Cash payments for goods and services

5,534

4,995

17,146

14,415

Cash payments to and on behalf of employees

948

1,057

3,257

3,327

Payments of all types of taxes and surcharges

193

210

694

589

Other cash payments relating to operating activities

43

75

214

257

Total cash outflows from operating activities

6,718

6,337

21,311

18,588

Net cash flows from operating activities

1,696

1,912

4,380

4,793

CASH FLOWS FROM INVESTING ACTIVITIES

Cash receipts from returns of investments

3,390

2,455

8,550

2,852

Cash receipts from investment income

17

13

55

13

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

76

93

110

261

Net cash receipts from disposal of subsidiaries and other business units

3

30

Total cash inflows from investing activities

3,486

2,561

8,745

3,126

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

1,138

1,365

2,688

3,013

Cash payments for investments

4,101

2,420

10,061

4,376

Total cash outflows from investing activities

5,239

3,785

12,749

7,389

Net cash flows from investing activities

(1,753)

(1,224)

(4,004)

(4,263)

CASH FLOWS FROM FINANCING ACTIVITIES

Cash proceeds from investments by others

4,966

Cash receipts from borrowings

1,446

2,268

2,961

4,629

Other cash receipts relating to financing activities

347

Total cash inflows from financing activities

1,961

9,942

Cash repayments for debts

796

2,985

2,530

8,515

Cash payments for distribution of dividends or profit and interest expenses

405

161

495

366

Other cash payments relating to financing activities

169

212

758

771

Total cash outflows from financing activities

1,370

3,358

3,783

9,652

Net cash flows from financing activities

76

(1,090)

(822)

290

EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS

37

1

95

(7)

NET INCREASE IN CASH AND CASH EQUIVALENTS

56

(401)

(351)

813

Add: Cash and cash equivalents at beginning of period

2,356

3,381

2,763

2,167

CASH AND CASH EQUIVALENTS AT END OF PERIOD

2,412

2,980

2,980