JCET Accelerates Technology Upgrades and Transformation in 2022, Maintaining a Leading Edge in High Value-added Applications

Q4 2022 Financial Highlights:

Revenue was RMB 8.98 billion,an increase of 4.6% year-on-year.

Generated RMB 1.63 billion cash from operations. With net capex investments of RMB 1.24 billion,free cash flow for the quarter was RMB 0.39 billion.

Net profit was RMB 0.78 billion.

Earnings per share was RMB 0.44,as compared to RMB 0.49 in Q4 2021.

Full Year 2022 Financial Highlights:

Revenue was RMB 33.76 billion,an increase of 10.7% year-on-year. A record high in the company's history.

Generated RMB 6.01 billion cash from operations. With net capex investments of RMB 3.81 billion,free cash flow was RMB 2.20 billion.

Net profit was RMB 3.23 billion,a record high in the company's history.

Earnings per share was RMB 1.82,as compared to RMB 1.72 in 2021.

SHANGHAI,March 30,2023 -- JCET Group (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 31,2022. According to the financial report,in 2022 JCET achieved revenue of RMB 33.76 billion,an increase of 10.7% year-on-year,and net profit attributable to owners of the parent of RMB 3.23 billion,an increase of 9.2% year-on-year.

In 2022,JCET's pioneering efforts in advanced packaging and testing technology and manufacturing continued to yield results. The company has honed its core technological capabilities through in-depth collaboration with global customers,forming a differentiating competitive advantage. The company's XDFOI™ high-density multi-dimensional heterogeneous integration chiplet technologies have entered the stage of high volume manufacturing (HVM). The company now provides multiple customers with HVM advanced packaging solutions for 4D millimeter-wave radar. During the reporting period,the profit and revenue contributed by high-performance,high-density system-level packaging technology and fan-out wafer-level packaging technology showed solid growth year-on-year. The revenue share of high-value-added products such as computing electronics and automotive electronics also continued to grow. Revenue from automotive electronics increased by 85% year-on-year in 2022,while computing electronics increased by 46% year-on-year. The company gained more test businesses in areas such as 5G RF,automotive chips,high-performance computing chips,and related business attributing to a revenue increase of 25% year-on-year. Over the past three years,the company has achieved positive free cash flow for 13 consecutive quarters through continuous improvement in profitability and asset structure,improvement in cash flow capacity,and a decrease in its asset-to-liability ratio.

Always being customer-centric,JCET has comprehensively and continuously improved its production and service quality and has been highly recognized by customers and other parties around the world. At the same time,the company continues to optimize its production capacity structure and actively meet customers' medium and long-term needs. The construction of the Microelectronics Wafer-level Microsystems Integration High-end Manufacturing Project has steadily progressed. In order to further strengthen the product research and development capabilities in the field of cutting-edge technology,the company completed an increase of capital to RMB 1 billion for its wholly-owned subsidiary,JCET Management Co.,Ltd. The construction of an Industry 4.0 intelligent new plant in the company's South Korea factory has been completed,and the Singapore factory has achieved a series of automated production and technological upgrades.

Mr. Li Zheng,CEO of JCET said,"In 2022,the company overcame adverse external factors such as shrinking demand in the end consumer market,and completed new technology developments in the fields of automotive electronics,high-performance computing,and other fields as well as the HVM of new products from several world-renowned customers,laying a solid foundation for the company's high-quality development in the future. Since the fourth quarter of 2022,the downward pressure on consumer markets such as mobile phones has remained significant,and the global IC industry is still in a typical downward cycle. JCET is actively utilizing its flexible global layout and the adjustment period in which revenue and profit margins are under short-term pressure to accelerate the active transformation of back-end chip manufacturing processes to high performance,as well as the automation and intelligent upgrade of production lines,to provide sufficient preparation for the global market recovery in the near future,and a new round of application demand growth."

For more information,please refer to the JCET 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 industrial,through advanced wafer-level packaging,2.5D/3D,System-in-Package,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 our global customers.

CONSOLIDATED BALANCE SHEET (Audited)

RMB in millions

Dec 31,2022

Dec 31,2021

ASSETS

Current assets

Currency funds

2,459

2,761

Trading financial assets

4,316

2,670

Derivative financial assets

18

5

Accounts receivable

3,689

4,271

Receivables financing

59

28

Prepayments

110

183

Other receivables

61

77

Inventories

3,152

3,193

Assets classified as held for sale

99

Other current assets

279

130

Total current assets

14,143

13,417

Non-current assets

Long-term receivables

40

38

Long-term equity investments

765

770

Other equity investments

440

418

Investment properties

89

93

Fixed assets

19,517

18,424

Construction in progress

807

661

Right-of-use assets

578

622

Intangible assets

483

447

Goodwill

2,210

2,023

Long-term prepaid expenses

28

Deferred tax assets

247

185

Other non-current assets

61

1

Total non-current assets

25,265

23,682

Total assets

39,408

37,099

LIABILITIES AND EQUITY

Dec 31,2021

Current liabilities

Short-term borrowings

1,174

2,193

Derivative financial liabilities

2

Notes payable

339

579

Accounts payable

4,634

5,298

Contract liabilities

214

458

Employee benefits payable

984

1,062

Taxes and surcharges payable

210

235

Other payables

378

414

Liabilities classified as held for sale

45

Current portion of long-term liabilities

3,096

1,052

Other current liabilities

4

3

Total current liabilities

11,033

11,341

Non-current liabilities

Long-term borrowings

2,721

3,751

Lease liabilities

562

568

Long-term employee benefits payable

14

20

Deferred income

340

337

Deferred tax liabilities

40

82

Other non-current liabilities

55

Total non-current liabilities

3,732

4,758

Total liabilities

14,765

16,099

Equity

Paid-in capital

1,780

1,780

Capital reserves

15,080

14,984

Accumulated other comprehensive income

400

(281)

Surplus reserves

229

174

Unappropriated profit

7,154

4,334

Total equity attributable to owners of the parent

24,643

20,991

Minority shareholders

9

Total equity

24,643

21,000

Total liabilities and equity

39,099

CONSOLIDATED INCOME STATEMENT (Audited)

RMB in millions,except share data

Three months ended

Year ended

Dec 31,2021

Dec 31,2021

Revenue

8,984

8,585

33,762

30,502

Less: Cost of sales

7,688

6,882

28,010

24,887

Taxes and surcharges

20

19

90

77

Selling expenses

42

49

184

194

Administrative expenses

95

299

900

1,042

Research and development expenses

333

326

1,313

1,186

Finance expenses

137

29

126

206

Including: Interest expenses

64

43

207

313

Interest income

10

4

31

37

Add: Other income

53

35

191

170

Investment income / (loss)

63

16

128

315

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

1

(291)

(5)

(6)

Gain / (loss) on the net position hedging

11

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

3

(12)

(37)

(12)

Credit impairment (loss is expressed by "-")

17

9

34

23

Asset impairment (loss is expressed by "-")

(131)

(216)

(257)

(268)

Gain / (loss) on disposal of assets

6

2

48

32

Operating profit / (loss)

680

826

3,246

3,170

Add: Non-operating income

2

12

47

18

Less: Non-operating expenses

1

7

2

18

Profit / (loss) before income taxes

681

831

3,291

3,170

Less: Income tax expenses

(98)

(13)

60

210

Net profit / (loss)

779

844

3,231

2,960

Classified by continuity of operations

Profit / (loss) from continuing operations

779

844

3,231

2,960

Classified by ownership

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

779

843

3,958

Net profit / (loss) attributable to minority shareholders

1

2

Add: Unappropriated profit at beginning of period

6,430

3,544

4,334

1,518

Less: Extract statutory surplus accumulation

55

53

55

53

Cash dividends payable

356

89

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

7,154

4,334

7,334

Other comprehensive income,net of tax

(151)

(120)

680

(197)

Comprehensive income attributable to owners of the parent

(151)

(120)

680

(197)

Comprehensive income not be reclassified to profit or loss

7

(14)

(7)

(13)

Remeasurement gains or losses of a defined benefit plan

1

(2)

1

(1)

Change in the fair value of other equity investments

6

(12)

(8)

(12)

Comprehensive income to be reclassified to profit or loss

(158)

(106)

687

(184)

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

(21)

Cash flow hedge reserve

23

10

(4)

2

Exchange differences of foreign currency financial statements

(181)

(116)

691

(165)

Total comprehensive income

628

724

3,911

2,763

Including:

Total comprehensive income attributable to owners of the parent

628

723

3,911

2,761

Total comprehensive income attributable to minority shareholders

1

2

Earnings per share

Basic earnings per share

0.44

0.49

1.82

1.72

Diluted earnings per share

0.43

0.49

1.81

1.72

CONSOLIDATED CASH FLOW STATEMENT (Audited)

RMB in millions

Three months ended

Year ended

Dec 31,2021

CASH FLOWS FROM OPERATING ACTIVITIES

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

11,033

9,611

36,233

32,445

Receipts of taxes and surcharges refunds

34

49

307

389

Other cash receipts relating to operating activities

103

30

321

237

Total cash inflows from operating activities

11,170

9,690

36,861

33,071

Cash payments for goods and services

8,458

6,031

25,604

20,445

Cash payments to and on behalf of employees

1,019

937

4,275

4,265

Payments of all types of taxes and surcharges

(152)

19

543

608

Other cash payments relating to operating activities

213

68

427

324

Total cash outflows from operating activities

9,538

7,055

30,849

25,642

Net cash flows from operating activities

1,632

2,635

6,012

7,429

CASH FLOWS FROM INVESTING ACTIVITIES

Cash receipts from returns of investments

4,151

3,281

12,701

6,133

Cash receipts from investment income

33

20

89

33

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

(3)

10

107

271

Net cash receipts from disposal of subsidiaries and other business units

30

Other cash receipts relating to investing activities

10

10

Total cash inflows from investing activities

4,181

3,321

12,927

6,447

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

1,236

1,345

3,924

4,358

Cash payments for investments

4,300

4,029

14,361

8,405

Total cash outflows from investing activities

5,536

5,374

18,285

12,763

Net cash flows from investing activities

(1,355)

(2,053)

(5,358)

(6,316)

CASH FLOWS FROM FINANCING ACTIVITIES

Cash proceeds from investments by others

4,965

Cash receipts from borrowings

2,255

2,524

5,216

7,153

Other cash receipts relating to financing activities

(347)

Total cash inflows from financing activities

2,177

5,216

12,118

Cash repayments for debts

2,523

3,099

5,053

11,613

Cash payments for distribution of dividends or profit and interest expenses

29

26

524

392

Including: Dividends or profit paid to non-controlling shareholders of subsidiaries

3

3

Other cash payments relating to financing activities

(71)

(166)

687

605

Total cash outflows from financing activities

2,481

2,959

6,264

12,610

Net cash flows from financing activities

(226)

(782)

(1,048)

(492)

EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS

(10)

(17)

84

(25)

NET INCREASE IN CASH AND CASH EQUIVALENTS

41

(217)

(310)

596

Add: Cash and cash equivalents at beginning of period

2,412

2,980

2,763

2,167

CASH AND CASH EQUIVALENTS AT END OF PERIOD

2,453

2,763

2,763