[年报]东山精密(002384):2022年年度报告（英文版）
原标题:东山精密:2022年年度报告（英文版） April 21, 2023 Annual Report 2022 Section I Important Note, Table of Contents and Definitions The Board of Directors, the Board of Supervisors, directors, supervisors and senior officers of the Company hereby warrant that the information contained in this Annual Report is true, accurate and complete and this Annual Report is free from any misrepresentation, misleading statement or material omission, and agree to assume joint and several liability for this Annual Report. YUAN Yonggang, Principal of the Company, CFO WANG Xu and Accounting Supervisor ZHU Deguang hereby represent that the financial statements contained in this Annual Report are true, accurate and complete. All directors of the Company attended the meeting of the Board of Directors reviewing this Report. This Report contains certain forward-looking statements regarding future plans, which do not constitute any substantial covenant made by the Company to the investors, and involve material uncertainties, and the realization of which is subject to market changes, efforts made by the Company’s management team and other factors. The main risk factors facing the Company are set forth in “Section III – XI. Prospects for Future Development of the Company” of this Report. The investors should pay attention to the relevant investment risks. According to the profit distribution proposal approved by the Board of Directors, the Company will distribute a cash dividend of RMB 1.1 (inclusive of tax) per 10 shares to all shareholders on the basis of 1,702,865,009 shares (excluding the treasury shares), and will not distribute any bonus shares or transfer any capital reserve to the share capital for the reporting period. Note: This document is a translated version of the Chinese version Annual Report 2022（“2022 年年度报告”), and the published annual report in the Chinese version shall prevail. The complete published Chinese Annual Report 2022 may be obtained at www.cninfo.com.cn . Table of Contents Section I Important Note, Table of Contents and Definitions ................................ 2 Section II Company Profile and Financial Highlights ........................................... 7 Section III Management’s Discussion and Analysis ............................................. 10 Section IV Corporate Governance ........................................................................ 30 Section V Environmental and Social Responsibilities .......................................... 43 Section VI Significant Matters .............................................................................. 47 Section VII Changes in Shares and Shareholders ................................................ 55 Section VIII Preferred Shares ............................................................................... 59 Section IX Bonds .................................................................................................... 60 Section X Financial Report .................................................................................... 61 List of References I. Financial statements signed and chopped by Mr. YUAN Yonggang, legal representative, Mr. WANG Xu, CFO, and Mr. ZHU Deguang, Accounting Supervisor of the Company; II. Original of the auditor’s report stamped with the seal of the accounting firm and signed and chopped by the certified public accountants; III. Originals of all documents of the Company publicly disclosed during the reporting period and related announcements; IV. Original of the Annual Report 2022 signed by the legal representative of the Company; and V. Place keeping such documents for inspection: Securities Department of the Company at Building 12#, Yunhe Town Headquarters Industrial Park, 99 East Taihu Road, Wuzhong District, Suzhou. Definitions
Section II Company Profile and Financial Highlights I. Company Profile
Accounting firm engaged by the Company:
□ Applicable ? N/A Financial advisor engaged by the Company that performs the duties of ongoing supervision over the Company during the reporting period: VI. Key Accounting Data and Financial Indicators Did the Company need to retrospectively adjust or restate any accounting data of prior accounting years? □ Yes ? No
negative and the most recent annual auditor’s report indicates that the Company’s ability to continue as a going concern is uncertain? □ Yes ? No Whether the lower of the net profit before and after deduction of non-recurring gain or loss is negative? □ Yes ? No VII. Differences in Accounting Data under the Chinese Accounting Standards for Business Enterprises (the “CASBEs”) and Overseas Accounting Standards 1. Differences in net profit and in net assets disclosed in the financial report prepared under the CASBEs and the International Financial Reporting Standards (IFRS) □ Applicable ? N/A There was no difference in net profit and in net assets disclosed in the financial report for the reporting period prepared under the CASBEs and the IFRS. 2. Differences in net profit and in net assets disclosed in the financial report prepared under the CASBEs and overseas accounting standards □ Applicable ? N/A There was no difference in net profit and in net assets disclosed in the financial report for the reporting period prepared under the CASBEs and overseas accounting standards. VIII. Key Financial Indicators by Quarter In RMB
financial metrics set out in any quarter report or semi-annual report of the Company already disclosed? □ Yes ? No IX. Items and Amounts of Non-recurring Gains or Losses ? Applicable □ N/A In RMB
We do not have any other item of gain or loss within the meaning of non-recurring gains or losses. Classification of any item of non-recurring gain or loss defined by the Explanatory Announcement No. 1 on Information Disclosure for Companies Publicly Offering Securities - Non-recurring Gain or Loss as recurring gain or loss: □ Applicable ? N/A We have not classified any item of non-recurring gain or loss defined by the Explanatory Announcement No. 1 on Information Disclosure for Companies Publicly Offering Securities - Non-recurring Gain or Loss as recurring gain or loss. Section III Management’s Discussion and Analysis I. Industry Overview and Outlook for the Reporting Period PCB segment: According to the latest report issued by Prismark, the total output value of the PCB industry reached USD81.741 billion in 2022, an increase of 1.0% from the preceding year. The vigorous development of 5G, cloud, AI, Internet of Things, consumer electronics, new energy and other industries will continuously drive the rapid growth of the PCB industry. According to Prismark, we were ranked the world’s third largest PCB manufacturer in terms of operating revenue in 2022. In reliance on our superior R&D, production process, quality control, delivery and other capabilities, we are able to provide premium products and services to our customers. Photoelectric display segment: (1) Touch panel products: Along with the rapid development of AI, big data and other new technologies, touch panel products are applied in more and more fields, such as laptop, smart home and new energy vehicles, to realize human- machine interaction. (2) LED devices: Small-pitch LEDs are characterized by high definition, high brightness, high fidelity, long life and seamless image, and suit different application scenarios. Due to their remarkable advantages, small-pitch LEDs come into favor of the professional display and commercial market and their market penetration has been increasing continuously. In the future, after the products show their cost advantages, they are expected to enter the broader civilian market. In the field of photoelectric display, we are a well-known manufacturer of touch panel modules and LED display devices. Precision manufacturing segment: Our products in the field of precision manufacturing, including base station antennas, filters and other structural components and assemblies for mobile communication, functional and structural components for new energy vehicles (such as heat dissipation, shell, body in white and battery structural parts), are mainly applied in communication equipment, new energy vehicle and other fields. As of December 2022, there were 2.31 million 5G base stations in China, accounting treatment of 21.3% of the total number of mobile base stations, or an increase of 7 percentage points from the preceding year. Along with the improvement of the private 5G network ecosystem led by the operators and participated in by lots of players, the relevant market size is expected to further increase in 2023. As a well-known supplier of communication equipment and assemblies in the world, we will firmly grasp this opportunity for development. Along with the vigorous development of the new energy vehicle industry, the vehicles tend to be electrically powered, lightweight and intelligent with long range. As one of the few vendors that are able to provide the new energy vehicle manufacturers with a wide range of products (including PCB (including FPC), on-board display, functional and structural components) and integrated solutions, our advantages in the coverage of multiple industry chains and provision of integrated solutions will help us improve customer adhesion. II. Main Business Overview during the Reporting Period During the reporting period, the main business conducted by us has not undergone any material change. We are committed to growing into a supplier of core components for the intelligently interconnected world. Our business operations are divided into three main segments: PCB, photoelectric display, and precision manufacturing. Our products are widely applied in consumer electronics, new energy vehicle, communication equipment, industrial equipment, AI, servers, medical appliances and other fields. In the field of PCB, we are committed to providing industry-leading customers with comprehensive PCB products and services, and integrated solutions covering design, R&D and manufacturing of PCB products that are customized to suit different downstream end products. Our products are widely used on mobile phones, computers, AR/VR devices, wearable devices, energy storage devices, servers, communication equipment, new energy vehicles, energy storage, industrial control equipment, etc. In the field of photoelectric display, we are a well-known manufacturer of touch panel modules and LED display devices. Our touch panel products are mainly used on medium- and large-sized displays for laptops, tablets, smart home devices, on-board displays, etc.; LCM products are mainly used on medium- and small-sized displays for mobile phones, tablets, etc.; and LED products are widely used on outdoor and indoor small-pitch HD displays. We are actively expanding the application of our optoelectronic display products on vehicles. In the field of precision manufacturing, we mainly provide precision metal structural components and assemblies to customers engaged in the business of new energy vehicles, energy storage and communication equipment, including functional and structural components for new energy vehicles (such as heat dissipation, shell, body in white and battery structural parts), base station antennas, filters and other structural components and assemblies for mobile communication. III. Core Competencies of DSBJ (I) Advantage in customers: High-quality domestic and foreign customer base Our products find favor with top customers in different areas throughout the world and have a premium customer base, which has a good demonstration effect, and will help us further enhance capability to develop new customers, and acquire larger market shares in the future competition. Our customers come from consumer electronics, new energy vehicle, communication equipment and other industries. Such diversified customer base enables us to fend off the impact of seasonal and cyclical fluctuations of different industries, and improve our core competencies while maintaining stable growth of business. (II) Advantage in products: Wide range of products and integrated industry chain In recent years, we have continuously improved our industrial and product mix through acquisitions and internal development, broken development bottlenecks, and introduced superior businesses to build up new growth drivers. At present, our product offerings cover three business segments, namely PCB, photoelectric display and precision manufacturing. We are able to provide our customers with a variety of basic and core components for intelligent interconnection. In the field of PCB, we have grown into a leading company in the industry. We actively leverage the synergistic effect of all business segments in R&D, technology, supply chain, products, marketing and other areas, through integration of internal resources and coordinated development, gradually achieve the synergy advantage of vertically integrated industry chain, and strive to provide comprehensive, one-stop and technologically advanced integrated product solutions to our customers, and satisfy their customization requirements to the maximum extent. (III) Advantage in technology: Stick to the principle that technological innovation capability is the primary production factor We attach great importance to technological innovation in our business development, and drive our development through innovation. Through participation in the early development projects of the industry-leading customers, we keep in step with the development of cutting-edging technologies, and have built complete open R&D system and efficient R&D mechanisms, and a global R&D team with outstanding professional level, rich industrial experience and strong innovation capabilities. Through continuous investments in R&D of new materials, new technologies and new production processes, we have continuously explored frontier production technologies for core components in the field of intelligent interconnection, and laid solid foundations for serving emerging businesses, such as AR/VR, IoT, Mini LED and new energy vehicles. While improving product technologies, we attach great importance to the innovation and upgrading of production technologies, and have gained some effect in the integrated development of informatization and industrialization. By promoting integrated development of industrialization and informatization, we have vigorously implemented intelligent manufacturing and built intelligent factories. (IV) Advantage in management: Advanced concept, complete system and efficient execution We advocate the corporate spirit of “openness, inclusion, pragmatism and forward-looking”, stick to the management principle of “overall planning, delegation of powers in business operation, support by the platform and centralized supervision”, give full play to the initiative and creativity of all organizations, and have built a scientific and efficient management system. Our management team owns practical experience in the management of advanced manufacturing industry, has wide global visions, is able to make accurate strategic judgments and decisions on the trends of industry and opportunities for development, and has strong cohesion and executive ability. We are practical and keep forging ahead in day-to-day management and operation, make periodic benchmarking analysis to compare our performance against historic data, budget targets and the results of outstanding peers, and effectively improve our operational quality and efficiency by setting examples and objectives, identifying the breakthrough point, focusing on implementation and reviewing what has been done, to lay solid foundations for our sustainable high-quality development. (V) Advantage in scale: Promote development in reliance on advantage in scale and increase benefits based on synergistic effect Our customers are well-known domestic and international hi-tech companies who have high purchase quantities, strict requirements for delivery of products, and high requirements for the scale of production and production efficiency of suppliers. Through years of development and accumulation, we have grown into a supplier of core components for intelligent interconnection with relatively strong overall capabilities in China. Our large scale of production can satisfy the purchase demands of major downstream customers, creating a big advantage in scale. Our advantage in scale provides us with strong bargaining power in the purchase of raw materials, resulting in reduction of the unit production costs. On the other hand, through effective integration of internal resources, we can reduce operating costs, thereby increasing our superiority over our competitors, further consolidating and enhancing our position in the industry, and improving our core competencies. (VI) Advantage in internationalization: Promote the establishment of a “dual circulation” development pattern We closely follow the national development strategy, actively take part in global economic competitions, and continuously enhance integration of high-quality resources of the industry. After the completion of two overseas acquisitions, we have successfully entered the PCB industry that has broader prospects for development, optimized our industrial structure, and laid solid foundations for our high-quality development. We have achieved growth in both scale of operation and operating results through such lead-forward development. In 2019, we established our overseas headquarters and operating entities with different functions in North America, Europe, Southeast Asia and other countries and regions. In 2022, in order to implement our new-round development strategy and actively respond to the demands of customers, we accelerated the development of overseas production bases, to further improve our global operating capabilities, promote the establishment of a “dual circulation” development pattern, and actively cope with the complicated competition environment. IV. Analysis of Main Business 1. Overview During the reporting period, in face of complicated global economic situations, weak consumer demands, periodically interrupted supply of materials and other unfavorable factors, we made steady progress, stuck to the “two-wheel drive” strategy, focused on the two key fields of consumer electronics and new energy vehicles, actively marched into the new blue sea of new energy while continuously improving the product quality and efficiency of the consumer electronics business. We implemented a more moderate business strategy, improved internal management, enhanced system governance and data governance, actively developed domestic and overseas production bases, and fully leveraged our efficient R&D system to continuously launch new technologies and new products, thereby achieving steady growth of operating results. In 2022, our main financial indicators grew stably: our operating revenue was RMB31.580 billion, a decrease of 0.67% year on year; net profit attributable to shareholders of the listed company was RMB2.368 billion, an increase of 27.12% year on year; net profit attributable to shareholders of the listed company after deduction of non-recurring gains or losses was RMB2.126 billion, an increase of 34.83% year on year; net cash flows from operating activities was RMB4.630 billion, an increase of 44.25% year on year; and debt to assets ratio was 59.52%, a decrease of 1.82% year on year. In 2022, we and our subsidiaries were awarded many special honors, including “Yins Award for Social Responsibility 2022”， “2022 Model Factory for Intelligent Manufacturing of Jiangsu” and “AAA Candidate Model Enterprise of Jiangsu in the Implementation of Integration of Informatization and Industrialization Management System”, among others. Below is a brief description of the main activities conducted by us in 2022: I Focus on and continue to put superior resources in the two key fields and main products During the reporting period, we stuck to the “two-wheel drive” strategy, focused on and continued to put superior resources in the two key fields and main products; while actively cultivating our advantageous products and key customers, enhanced the development of new products and new customers. We further improved our deployment in the key fields, to enhance the synergy effect. During the reporting period, we successfully acquired a back-end on-board display module assembly plant owned by JDI, thereby entering the field of on-board displays, and accelerated the transformation and adjustment of our non-key business, to focus on key business and assets. While maintaining a cautious and optimistic attitude and pursuing sustainable development, we vigorously enhanced the deployment at home and abroad and development of the domestic and overseas market, in order to further improve our operating efficiency and results of operation. II Actively leverage the efficient R&D system, and promote the rapid development of the new energy business. We actively leveraged our efficient R&D system, and based on our capabilities accumulated in the fields of PCB and communication equipment, achieved the application of lightweight, electric, intelligent and other new products and made breakthroughs in the field of new energy vehicles. In particular, our heat dissipation, shell and battery structural part products have got wide approbation of the customers, driving a sharp increase in our operating revenue from the new energy business. In the field of PCB, we actively participated in the early development projects of the industry-leading customers, to keep in step with the strategic innovations of the leading customers, and further enhance our capabilities and advantages. III Continuously optimize the organization structure, and build competitive remuneration policies and system We continuously optimized our organization structure, provided organizational and talent support for the rapid development of the new businesses through training, introducing and retaining talents and other measures, further improved our scientific and effective performance appraisal system, and explored the establishment of a more competitive remuneration system. During the reporting period, we implemented the 2022 employee stock ownership plan (ESOP) for key officers and technical personnel with the shares repurchased. As we are accelerating the deployment in the field of new energy, the new “three-year plan” will lead our high-quality development. We implemented the 2022 second ESOP, to further enhance the sense of gain and arouse the enthusiasm of our employees, maximize our values, and promote the achievement of our strategic objectives. IV Continuously improve the system and data governance, and further increase the management efficiency We continuously improved the system and data governance, and further optimized the management documents and internal processes at all levels according to the characteristics of our industry and development stage, to effectively increase our operating and management capabilities, reduce the institutional costs of our business operation, build a sound, scientific and effective internal management system. We carried out a data governance campaign, in order to fully activate and release the value of our data assets through data governance at the source and with data security as the baseline, enhance group-wide data integration, further promote our development towards digitalization and intelligentalization, and improve our work efficiency and management level through intelligent application of data. V Adhere to the proactive and moderate financial management strategy, and promote our development to a new level During the reporting period, we continuously adjusted and optimized our capital structure and debt structure, adopted a more moderate and cautious financial strategy, maintained a healthy financial position, and further lowered our debt to asset ratio. First, we improved the budget management system, monitored the achievement of budget goals, detected gaps through ongoing comparative analysis, and took corresponding measures. Second, we focused on the management of cash flows, which produced good results, ensured the use of funds as scheduled, and maintained a stable ratio of cash to net profit. Third, we used foreign exchange and commodity hedging instruments to prevent the effect of market fluctuations on our business operation. Fourth, we actively improved the asset turnovers, enhanced cost improvement, and leveraged the value of assets, to promote steady growth of our operating results. 2. Revenue and costs (1) Components of operating revenue In RMB
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