[中报]东山精密(002384):2024年半年度报告（英文版）
原标题:东山精密:2024年半年度报告（英文版） August 20, 2024 Section I Important Note, Table of Contents and Definitions The Board of Directors, the Board of Supervisors, directors, supervisors and senior executives of the Company hereby warrant that the information contained in this Semi-Annual Report is true, accurate and complete without any misrepresentation, misleading statement or material omission, and agree to assume joint and several liabilities for this Semi-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 Semi-Annual Report are true, accurate and complete. All directors of the Company attended the meeting of the Board of Directors reviewing this Semi-Annual Report. Forward-looking statements such as those on future development plans in this Report do not constitute substantial commitments by the Company to the investors. The investors should make investments rationally and keep an eye on the associated risks. In this Report, the Company has elaborated relevant potential risk factors and countermeasures, as can be referred to in “X. Risk Exposures to the Company and Countermeasures” under “Section III Management’s Discussion and Analysis”, to which the investors should pay attention. The Company had no plan to pay cash dividends, distribute bonus shares or convert any capital reserve to the share capital. Note: This document is a translated version of the Chinese Semi-Annual Report 2024 ("2024年半年度报告"). In case of any discrepancies, the Semi-Annual Report 2024 published in the Chinese version shall prevail. The full Chinese Semi-Annual Report 2024 is available 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 .................................................................................................................... 31 Section V Environmental and Social Responsibilities ..................................................................................... 33 Section VI Significant Matters ......................................................................................................................... 39 Section VII Changes in Shares and Shareholders ............................................................................................. 48 Section VIII Preferred Shares ........................................................................................................................... 53 Section IX Bonds .............................................................................................................................................. 54 Section X Financial Report .............................................................................................................................. 55 List of References 1. Financial statements signed and chopped by Mr. YUAN Yonggang, legal representative, Mr. WANG Xu, CFO, and Mr. ZHU Deguang, Accounting Supervisor of the Company. 2. Originals of all documents of the Company publicly disclosed during the reporting period and related announcements. 3. Original of the Semi-Annual Report 2024 stamped with the seal and signed by the legal representative of the Company. 4. 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
1. Contact information of the Company Whether there is any change in the Company’s registered address, office address and corresponding postal code, website, and email address, etc. during the reporting period? □Applicable ?N/A There has been no change in our registered address, office address and corresponding postal code, website and email address, etc., as detailed in the Annual Report 2023. 2. Media for information disclosure and place for keeping the Report Whether there is any change in the media for information disclosure and place for keeping the report during the reporting period? □Applicable ?N/A The website of the stock exchange and the media and its website disclosing our semi-annual report, as well as the place for keeping our semi-annual report remain unchanged, as detailed in the Annual Report 2023. 3. Other related information Whether there is any change in other related information during the reporting period? □Applicable ?N/A IV. Key Accounting Data and Financial Indicators Did the Company need to retrospectively adjust or restate any accounting data of prior years? □Yes ?No
the International Financial Reporting Standards (IFRS) □Applicable ?N/A There was no difference in net profit and net assets disclosed in the financial report for the reporting period prepared under the CASBEs and the IFRS. 2. Differences in net profit and 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 net assets disclosed in the financial report for the reporting period prepared under the CASBEs and overseas accounting standards. VI. 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 by 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 by Companies Publicly Offering Securities - Non-recurring Gain or Loss as recurring gain or loss. Section III Management’s Discussion and Analysis I. Situations of Our Primary Business during the Reporting Period (I) During the reporting period, our primary business has not undergone any material change. We focus on the R&D and manufacturing of core components for the intelligently interconnected world, and the provision of comprehensive intelligent interconnection solutions to customers all over the world. We are primarily engaged in the R&D, manufacturing and sale of PCBs, precision components, touch panel modules and LED display devices, which are widely used in consumer electronics, new energy vehicles, communication equipment, industrial equipment, AI, medical appliances and other fields. (II) During the reporting period, our main business model has not undergone any material change. We leverage our complete business chain to provide our customers with comprehensive, one-stop, industrial-leading services, continuously increase the depth of cooperation and adhesion with our customers, and maintain long-term, stable collaboration with premium customers taking the lead in the global consumer electronics, new energy vehicle and communication equipment industries. We manufacture main products based on market demands and adopt the production model that determines production according to sales, under which we develop production plans and deliver products taking into account the purchase orders placed by customers, the product quantities demanded by the customers under such purchase orders, as well as our production capacity and supply of raw materials. (1) Our main products and their applications
(3) Our situation in the industry In the field of PCB, according to the research data published by Prismark, in terms of sales revenues in 2023, we are ranked second in the field of FPC and third in the field of PCB in the world. We have strong technology R&D, quality control, and smart factory management capabilities in the PCB industry, and can provide customers with high-quality products and services. Our major PCB customers are well-known global consumer electronics and new energy vehicle manufacturers, so we have a good customer base and strong competitiveness. In the field of precision components, we are one of the largest specialized precision component suppliers, provide structural components for new energy vehicles, communication equipment and other fields, and mainly serve well-known global new energy vehicle and communication equipment manufacturers. We have strong competencies in the industry and are one of the few vendors able to provide the new energy vehicle manufacturers with PCBs (including FPCs), on-board displays, functional and structural components, and other products and integrated solutions. In the future, we will leverage our advantages in the coverage of multiple industry chains and the provision of integrated solutions to further improve customer adhesion. In the field of touch panel modules and LED display devices, we are one of the largest touch panel modules and LED display device manufacturers in China. With the completion of our acquisition and integration of Suzhou JDI, we further expand our on-board display module business and strengthen our overall competence in the field of touch panel modules. II. Core Competencies of DSBJ (I) Advantage in customers: Premium 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 our capability to develop new customers and acquire larger market shares in the future competition. Our customers come from consumer electronics, new energy vehicles, communication equipment and other industries. Such a 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, focusing on the R&D and production of core components related to consumer electronics and new energy industry, 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 consumer electronics and new energy vehicle manufacturers 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 the integration of internal resources and coordinated development, gradually achieve the synergy advantage of a 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. cutting-edging technologies and have built a 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 funding for R&D of new materials, new technologies and new production processes, we have vigorously 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 certain effects in the integrated development of informatization and industrialization. By promoting the integrated development of informatization and industrialization, we have vigorously implemented intelligent manufacturing and built smart factories. (IV) Advantage in management: Advanced concept, complete system and efficient execution We advocate the corporate spirit of “openness, inclusion and pragmatism”, stick to the management principle of “overall planning, the 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 has practical experience in the management of the advanced manufacturing industry, has wide global visions, can make accurate strategic judgments and decisions on the trends of industry and opportunities for development, and has strong cohesion and executive ability. We embrace a pragmatic and enterprising approach in day-to-day management and operation, make periodic benchmarking analyses to compare our performance against historic data, budget targets and the results of outstanding peers, and effectively improve the quality and efficiency of our operations and timely adjust our operational strategy, by setting examples and objectives, identifying breakthrough points, 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 that have high purchase quantities, strict requirements for the 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 the 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 strategies, actively take part in global economic competitions, and continuously enhance the 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 results of operations through such lead-forward development. In recent years, we have established operating entities with different functions in North America, Europe, Southeast Asia and other countries and regions. In 2022, to implement our new-round development strategy and grasp the development opportunities brought about by the new energy vehicle industry, we established the “two-wheel drive” strategy and decided to focus our efforts on the two core fields, namely consumer electronics and new energy vehicles. To actively respond to the demands of customers, we have accelerated the construction and production of overseas production bases. These actions will further improve our global operating capabilities, promote the establishment of a “dual circulation” development pattern, and enable us to actively cope with the complicated competition environment. III. Analysis of Primary Business In the first half of 2024, we have been proactive in adapting to and integrating with the new economic development cycle with the rapid emergence of new products and technologies, etc., amidst multiple opportunities and challenges. Leveraging thorough market research and analysis, we have maintained a steadfast approach and resilience, reinforcing our strategic resolve and organizational capabilities for corporate growth. Adhering to our strategic vision and a commitment to high-quality and sustainable operation, we have vigorously invested in research and development, and intensified our efforts in nurturing and recruiting key talents, with our comprehensive initiatives encompassing industrial restructuring, innovation in product portfolio, expansion of customer base, integration of information technology and industrialization, and management of costs. During the reporting period, our core business of PCB has seen steady growth, while our new energy business has progressed in an orderly fashion. For the first six months of 2024, we recorded an operating revenue of RMB16,628,586,200, a year-on-year increase of 21.67%. However, the significant non-recurring revenue in the same period of the previous year, coupled with the exchange rate fluctuations and the ramp-up of new product mass production, has exerted certain pressures on our current period’s financial performance. Consequently, for the reporting period, we have achieved a net profit of RMB560,600,900, reflecting a year-on-year decrease of 32.01%. Our main endeavors from January to June 2024 can be seen as follows: I. Core business strengths and organic growth In the PCB sector, we have adeptly seized the opportunities presented by industry development. We maintain a consistent and stable presence in our core customer base, industry forecast, product technology, and production capacity planning, allowing us to fortify our competitive edge and expand our field into broader market segments. With the advent of AI, we have intensified our R&D efforts in the creation of PCB (including FPC) products tailored for AI servers, cloud computing, and automotive sector, among others, and are proactively engaging with new customer development. By ongoing investment in R&D to bolster our technological prowess, we are actively positioning ourselves at the forefront of innovative technology products, to capitalize on emerging industry trends and embrace the dawn of a new era of sci-tech innovation. II. Rapid growth of emerging businesses and enhanced development resilience During the reporting period, our new energy sector achieved a revenue of RMB3.81 billion, a year-on-year increase of approximately 29.33%, further elevating its share in our overall revenue. We have taken various measures to mobilize resources, strengthen internal and external collaboration, and implement agile marketing strategies, fostering a positive trajectory for our new energy business which has become a robust engine propelling us towards a future of sustainable development. With the gradual release of new production capacity and the smooth delivery of new products, our consumer electronics and new energy businesses have synergized to form a resilient portfolio, laying a solid foundation for our high-quality development. III. Concentration on high-quality revenue streams and adjustment to non-core businesses In the intricate and dynamic competitive landscape of our industry, we observed a plateau in the operational efficiency of our non-core businesses, particularly in the LED sector. To address this, we have promptly realigned our business strategy, by implementing a lean management approach to drive continuous cost reduction and efficiency improvement across the entire value chain on the one hand, and making adjustments to our customer and product portfolios, as well as our operation mode, on the other hand, to ensure the steady development of the business sector in the pursuit of an early success. IV. Innovative talent pool cultivation and organizational capabilities improvement We are committed to creating a people-centric culture, attracting and retaining top-tier talent from across the globe. Aligned with our Through internal development programs and external hiring initiatives, we ensure a steady pipeline of talents for our critical roles, and further strengthen our organizational capabilities, which helps achieve effective business growth, thereby bringing a win-win situation for both the Company and the employees. V. Efficient business-finance integration system and data governance Constructing an efficient business-finance integration system and enhancing operational management efficiency based on data governance are essential for sustainable development and continuous upgrading of our enterprise. With great emphasis on this regard, we have made active deployment, accordingly, deeply integrating business and financial data through a unified information platform, actively optimizing resource allocation within the enterprise, enhancing the scientific rigor and precision of our business decisions, and implementing strict risk control for comprehensive business oversight, to support our ongoing enhancement and optimization. Year-on-year changes in key financial data In RMB
□Applicable ?N/A There have been no significant changes in the components or sources of profits during the reporting period of the Company. Components of operating revenue In RMB
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