[年报]环旭电子(601231):2024年年度报告（英文版）
原标题:环旭电子:2024年年度报告（英文版） Convertible Bond Code:113045 Abbreviated Name: USI Convertible Bond Universal Scientific Industrial (Shanghai) Co., Ltd. 2024 Annual Report Note: This Report has been prepared in both Chinese and English. Should there be any discrepancies or misunderstandings between the two versions, the Chinese version shall prevail. Important Notice I. The Board of Directors, the Board of Supervisors, directors, supervisors and senior management of the Company hereby assure that the content set out in the annual report is truthful, accurate and complete, and contains no misrepresentations, misleading statements or material omissions, and are individually and collectively responsible for the content set out therein. II. Absent directors
III. Deloitte Touche Tohmatsu Certified Public Accountants LLP has issued a standard unqualified audit report for the Company. IV. Jeffrey Chen, person in charge of the Company, Xinyu Wu, person in charge of accounting, and Yuh-Huah Chern, person in charge of the accounting firm (accountant in charge) declare that the financial report in the annual report is truthful, accurate and complete. V. The proposal of profit distribution for the reporting period deliberated and approved by the Board of Directors USI intends to distribute a dividend of RMB 2.3 yuan (tax included) for every 10 shares on the basis of the total share capital on the registration date of equity distribution minus the number of shares in its special repurchase account, without giving bonus shares or capitalizing capital reserves, and all the remaining undistributed profits will be carried forward for distribution in the following years.? The Company's Profit Distribution Plan for 2024 was deliberated and approved at the Seventeenth Meeting of the Sixth Session of the Board of Directors of the Company, and it still needs to be deliberated at the Company's 2024 Annual General Meeting of Shareholders. VI. Risk disclosure for forward-looking statements √Applicable □ Not Applicable This report involves forward-looking statements such as future plans, and does not constitute a material commitment of the Company to investors. Investors are requested to pay attention to investment risks. VII. Are there any funds occupied by controlling shareholder or other related parties for non-operational purposes? No VIII. Is there any external guarantee in violation of the prescribed decision-making process? No IX. Are more than half of the directors unable to guarantee the truthfulness, accuracy and completeness of the annual report disclosed by the Company? No X. Major risk disclosure The major risks facing the Company are described in “Possible Risks” of “Discussion and Analysis of Corporate Development in the Future” in this report. XI. Others □Applicable√ Not Applicable Contents Section I Definitions .................................................................................................................................. 5 Section II Company Profile and Key Financial Indicators ................................................................... 7 Section III Management Discussion and Analysis ............................................................................... 12 Section IV Corporate Governance ........................................................................................................ 52 Section V Environmental and Social Responsibility ............................................................................ 82 Section VI Major Events ........................................................................................................................ 92 Section VII Changes in Shares and Information of Shareholders .................................................... 110 Section VIII Information on Preferred Shares .................................................................................. 118 Section IX Information on Bonds ........................................................................................................ 119 Section X Financial Statements ........................................................................................................... 123
Section I Definitions I. Definitions In this report, the following terms shall have the following meanings unless the context otherwise
Section II Company Profile and Key Financial Indicators I. Company profile
II. Contact
III. Basic information
IV. Information disclosure and place at which the report is available
V. The Company's stocks
VI. Other related information
bonds, the sponsor will continue to perform its responsibility of continuous supervision over the use of the raised funds. VII. Key accounting data and financial indicators in the past three years (I) Key accounting data
(II) Key financial indicators
Explanation of the Company’s key accounting data and financial indicators in the past three years at the end of the reporting period □Applicable √Not Applicable None VIII. Accounting data differences under domestic and overseas accounting standards (I) Differences in net profits and net assets attributable to shareholders of the listed company in the financial report disclosed under international accounting standards and Chinese accounting standards □Applicable √Not Applicable (II) Differences in net profits and net assets attributable to shareholders of the listed company in the financial report disclosed under overseas accounting standards and Chinese accounting standards □Applicable √Not Applicable (III) Explanation of differences between Chinese accounting standards and overseas accounting standards □Applicable √Not Applicable IX. Key financial data by quarter for 2024
Explanation for differences between the quarterly data and formerly disclosed data in periodic reports □Applicable √Not Applicable X. Non-recurring profit or loss √Applicable □ Not Applicable
Explanations for significant amount of extraordinary gain or loss items identified by the Company but not listed in the “Explanatory Announcement No.1 for Public Company Information Disclosures –Extraordinary Gains or Losses”, and recurring gain or loss items identified by the Company which are listed as extraordinary gain or loss items in the “Explanatory Announcement No.1 for Public Company Information Disclosures – Extraordinary Gains or Losses”. □Applicable √Not Applicable XI. Items measured at fair value √Applicable □ Not Applicable
XII. Others □Applicable √Not Applicable Section III Management Discussion and Analysis I. Discussion and Analysis of Corporate Operations USI is a global leader in electronic design and manufacturing services as well as a leader in the field of SiP (System-in-Package) technology. The Company has 30 production and service locations across four continents of Asia, Europe, Americas, and Africa, and offers customer diversified electronic products with 2 D(MS) product services: Design, Manufacturing, Miniaturization, Industrial Software and Hardware Solutions, and Material Procurement, Logistics and Maintenance Services. (I) An overview of the Company's performance in 2024 In 2024, AI technology and computing power investment continued to be the focus of global scientific and technological development. The intelligent upgrade of consumer electronic products had a relatively mild driving effect on market demand. The demand for industrial products gradually picked up. The European and American automotive industries were facing a complex business environment in transition. Factors such as US dollar interest rates, geopolitics, and supply chain restructuring deeply affected the global and regional supply and demand conditions, and the economic boom required a longer recovery period. The Company's revenue in 2024 decreased by 0.17% year-on-year, essentially unchanged. In response to the global supply chain restructuring and customers' demands for localized manufacturing, the Company completed the construction of new plants in Mexico and Poland as scheduled, served the expansion of overseas production capacity, merger with Hirschmann and responded to the pressure of customer supply chain price reduction, etc., which also caused the increase of the Company's operating costs. The Company achieved operating profit of RMB 1.87 billion in 2024, a decrease of 14.01% YoY, resulting in a corresponding decrease in total profit and net profit attributable to shareholders of the listed company. (II) Changes in revenue The Company realized total revenue of RMB 60.69 billion in 2024, down 0.17% from the previous year. Revenue from automotive electronics products increased by 16.24% YoY, while cloud and storage products saw a 13.35% increase. Conversely, revenue from communication products decreased by 3.36%, consumer electronics products by 0.27%, industrial products by 12.82%, and medical electronics products by 11.21%. Changes in revenue by product category reflect changes in the global economy and end-market demand. The revenue of communication products and consumer electronics products decreased slightly YoY due to the sales volume of important customers; the revenue of industrial products decreased YoY due to customer destocking and gradual recovery in demand; automotive electronics products mainly achieved YoY growth due to the Company's merger with Hirschman in 2024; the revenue growth of cloud and storage products benefited from the significant growth in demand for server products driven by AI. (III) Changes in expenses and profits Affected by the increase in material cost rate and the decrease in exchange-related gains, the Company's gross profit margin in 2024 was 9.49%, a decrease of 0.09 percentage points YoY, and the operating profit margin was 3.09%, a decrease of 0.50 percentage points YoY, and the Company achieved an operating profit of RMB 1.87 billion in 2024, a decrease of 14.01% YoY. In 2024, the total amount of the Company's selling expenses, administrative expenses, research and development expenses, and financial expenses was RMB 4.00 billion, showing a YoY increase of RMB 424 million, with a growth rate of 11.86%. Among them: administrative expenses increased by RMB 155 million YoY, with a growth rate of 12.76%. Research and development expenses increased by RMB 100 million YoY, with a growth rate of 5.55%. Selling expenses increased by RMB 68 million YoY, with a growth rate of 19.94%. Financial expenses increased by RMB 101 million YoY, showing a relatively large increase, mainly due to the increase in the net foreign exchange losses in 2024. The selling expenses, administrative expenses, and research and development expenses of the Company all showed varying degrees of growth. The main reason is that the financial data of Hirschmann was consolidated into the Company's financial statements throughout 2024. Affected by the YoY decline in operating profit, the Company achieved a total profit of RMB 1.85 billion in 2024, showing a decrease of 15.34%; the net profit attributable to the shareholders of the company was RMB 1.65 billion, showing a decrease of 15.16%. (IV) Key results of work in 2024 1. Continuous investment in overseas production capacity The Company's global manufacturing footprint continued to expand in 2024 with new plants in Poland and Mexico, which were put into operation in 2024. In November 2024, the Company announced a partnership with Tech Mahindra, a leading global technology consulting and digital solutions provider, to establish the Company's first Engineering Offshore Development Center (ODC) in Bangalore, India, dedicated to providing scalable solutions, reducing time to market and driving technological innovation to meet customers' evolving needs. In order to promote the optimization of the global operation management process, integrate the global operation capabilities, and match the process of the Company's global layout, on the basis of establishing the Digital Transformation Center, the Company will continue to recruit talents with different professional backgrounds within the Company in 2024, aiming at the pain points of the operation process, combining with external experts, evaluating and adopting suitable digital tools to optimize the workflow, and building a cross-departmental communication platform to improve work efficiency. 2. Strengthen the supply chain serving global manufacturing The Company has developed local suppliers in each region to increase the proportion of localized supply, reduce transportation time and costs, and enhance supply flexibility and response speed; proactively cultivated domestic suppliers with competitive advantages in raw materials, as well as equipment suppliers for production, testing, and automation; leveraged scale and efficiency advantages to serve clients with sizable demand; and additionally, continuously improved global supply chain operations, inventory management, process and system optimization, and sustainability management. 3. Advance smart manufacturing capabilities The Company’s global manufacturing facilities increased their smart manufacturing rating by 0.34 stars to reach 3.07 stars. Over the year, automation initiatives reduced costs by millions of dollars, with the development of 6 new universal automation platforms and the completion of 54 digital automation modules (including 6 AI modules). Moving forward, the Company’s automation enhancements will focus on new projects for key clients, aiming to lower automation equipment costs and deployment timelines through centralized procurement and improved internal assembly capabilities. 4. Accelerate digital transformation By addressing digital needs in R&D and management, the Company leveraged technologies such as AI applications to continuously refine workflows and employee performance. For instance, the Digital Transformation Center (DTC) brings together talent from diverse professional backgrounds within the Company. Focusing on critical operational pain points identified through internal assessments, the DTC collaborates with internal and external experts to evaluate and deploy tailored digital tools. Partnering with the corporate IT department, it optimizes workflows and establishes cross-departmental communication platforms via dedicated projects, driving measurable efficiency gains. 5. Prudent inventory control and sound operation The Company actively controlled inventory, which was reduced from RMB 8.32 billion at the end of 2023 to 7.75 billion at the end of 2024, and the amount of working capital occupied has been significantly reduced. 6. Launch of the SiP Dual-Engine Technology Platform The Company has continued to invest in miniaturization solutions. The Miniaturization Innovation R&D Center (MCC) has introduced the groundbreaking SiP Dual-Engine Technology Platform, which leverages transfer molding based high density integration to meet demands for large-scale, highly integrated, and ultra-compact modules. By adopting the Vacuum Printing Encapsulation (VPE) process, the platform achieves encapsulation without requiring custom molds, significantly shortening development cycles. Beyond the SiP Dual-Engine Technology Platform, MCC’s capabilities extend to integrating heterogeneous components into complex modules. Equipped with comprehensive design services and dedicated production facilities, the company’s development team provides end-to-end support from product conceptualization to mass production, ensuring the successful implementation of advanced system integration. 7. ESG performance hits another milestone For a long time, the Company has been adhering to the concept of sustainable management, practicing the four strategic axes of "low-carbon mission, recycling, social integration, and value co-creation", and integrating the concept of sustainable development into the Company's strategy. The company has been recognized as a Sustainability Yearbook Member by S&P Global for four consecutive years, achieving a top 5% ranking in the Electronic Equipment, Instruments & Components industry category. The Company has been awarded the honors of "Top 1% of Chinese Enterprises in S&P Global ESG Scoring" and "Best Progress Enterprise in the Industry". II. Industry of the Company during the Reporting Period During the reporting period, the Company's industry was the electronics manufacturing service industry, and its products were mainly used in consumer electronics, cloud storage, industrial, automotive electronics, and medical industries. The Company's service products, business layout, and operations are characterized by modularization, diversification, and globalization. (I) Basic situation of the industry The EMS industry mainly provides overall electronic products and devices solutions such as design, engineering development, raw material procurement, manufacturing, logistics, testing and after-sales service for various electronic products and equipment. Electronic manufacturing services mainly include 3C (Computer, Communication, Consumer Electronics) products, industrial, automobile, medical, transportation, energy, aerospace and other fields, among which consumer electronics occupies an important position. The growing demand for smart phones, smart wearable devices, AR/VR devices, computers and cloud, smart home and other products has driven the rapid development and continuous upgrading of chips, storage, electronic components, modules and smart manufacturing. China has the largest market share and the most competitive supply chain in the global electronics manufacturing services industry. The rapidly increasing demand for nearshoring and friendly shoring in the global supply chain has significantly stimulated investment and capacity expansion in Mexico, South East Asia, India, Eastern Europe and other regions, and has also affected the transfer of capacity in the upstream supply chain, thus forming a new capacity scale and industrial chain cluster in the future. In addition, the impact of the US tariffs on China and Mexico will prompt the supply chain to invest in new production capacity in regions with geographical advantages, policy advantages, and cost advantages, reducing the business risks caused by the imposition of tariffs in specific regions. It will also prompt enterprises to increase investment in research and development, promote technological innovation, and increase the added value of products, reduce dependence on low-value-added manufacturing links, and enhance their competitiveness in a high-tariff environment. (II) Industry characteristics and development trends 1. The industry has a large overall scale, with high industry concentration In 2024, the industrial scale of the global EMS industry exceeded USD 633.2 billion, with high industry concentration. The top 10 manufacturers in the world accounted for more than 70% of the total revenue. Leading enterprises in the industry have accumulated rich customer resources and industry experience, with large assets and revenues, and maintained a relatively stable leading position. In 2024, electronic products were still in the stage of supply chain destocking, and inventory levels are gradually returning to a reasonable range. Inflation levels in major economies around the world showed a moderate trend in 2024 as a whole. Monetary policy has shifted, and the world has entered an interest rate cut cycle. The pace of US dollar interest rate hikes has stopped and the interest rate cut channel has been opened, which has had a certain positive impact on industry demand and is expected to drive a recovery in demand for electronic products in 2025. 2. The business and competitive environment is becoming increasingly complex, and electronic manufacturing service providers are facing transformation The trend of geopolitics and global economic and trade regionalization affects the reconstruction of the global supply chain. In order to achieve the risk management needs of supply chain diversification, some offshore outsourcing is turned to near-shore or friendly outsourcing, and demand and order adjustments change rapidly. At present, the US’s imposition of tariffs on China, Mexico, Canada, and others increases the cost of the electronic manufacturing service industry, and the operating environment and competitive environment becomes more complex. Electronic manufacturing service providers are also actively transforming and upgrading, striving to play a more important role in the supply chain. (1) Deepened cooperation and integration between downstream customers and upstream electronics manufacturing service providers End consumer electronics brand owners, cloud service provider and other brand manufacturers no longer solely place their orders, but become more deeply involved in the production process of electronic manufacturing service providers, including technology research and development, production planning, quality control and other stages. Similarly, electronic manufacturing service providers are no longer just passively following orders, but actively participate in the brand's product planning and design, providing professional technical and process advice, thus forming a closer partnership between the two parties. (2) Transformation to comprehensive service provider Technological progress continues to promote the upgrading and iteration of electronic products and equipment, and the large-scale application of AI will promote the continuous development of electronic （未完）  |