Focusing on High-performance Advanced Packaging and Global Layout, JCET Achieved Quarter-on-Quarter Growth in Q2 2023

Q2 2023 Financial Highlights:

Revenue was RMB 6.31 billion, an increase of 7.7% quarter-on-quarter.
Generated RMB 1.19 billion cash from operations. With net capex investments of RMB 0.75 billion, free cash flow for the quarter was RMB 0.44 billion.
Net profit was RMB 0.39 billion, an increase of 250.8% quarter-on-quarter.
Earnings per share was RMB 0.22, as compared to RMB 0.39 in Q2 2022.

1H 2023 Financial Highlights:

Revenue was RMB 12.17 billion.
Generated RMB 2.42 billion cash from operations. With net capex investments of RMB 1.56 billion, free cash flow for the first half of 2023 was RMB 0.86 billion.
Net profit was RMB 0.5 billion.
Earnings per share was RMB 0.28, as compared to RMB 0.87 in 1H 2022.

SHANGHAI, Aug. 25, 2023 /PRNewswire/ -- Today, JCET Group (SSE: 600584), a leading global provider of integrated circuit (IC) back-end manufacturing and technology services, announced its financial results for the first half year of 2023. The financial report shows that in the first half of 2023, JCET achieved revenue of RMB 12.17 billion, and net profit of RMB 0.5 billion. In Q2 2023 JCET achieved revenue of RMB 6.31 billion, an increase of 7.7% quarter-on-quarter, and net profit of RMB 0.39 billion, an increase of 250.8% quarter-on-quarter.

In the first half of 2023, the global semiconductor industry was in the fluctuating stage of bottoming out and rebounding. JCET adhered to high-performance advanced packaging technologies and product development mechanism, focusing on solutions for emerging applications such as high performance computing and storage, enhanced strategic layout of production capacity, and further strengthened its market position in the global IC industry.

JCET continues to enhance its technological innovation, with R&D investment of RMB 0.67 billion in the first half of this year, a year-on-year increase of 5.0%. The company's multi-dimensional fan-out heterogeneous integration solution XDFOI™ for 2.5D/3D packaging achieved HVM, providing high-performance chiplet package solutions and production capacity for global customers. In collaboration with multiple customers in the field of high-density SiP technology, JCET has achieved the development and mass production of multiple RFFE modules and AiP modules in the 5G millimeter-wave market. The company is intensifying its market exploration in sectors such as automotive electronics, industrial electronics, and high-performance computing. During the reporting period, revenue from automotive electronics achieved a year-on-year growth of 130%. The company has established a subsidiary with controlling stake in the Lingang New Area of Shanghai, reinforcing its strategic capacity layout in the field of automotive electronics.

In addition, the company has optimized various operational expenses and asset structures, maintaining a stable cash flow capability. It has achieved positive free cash flow for 15 consecutive quarters.

While pursuing its own development, JCET actively engages in philanthropic efforts, contributing to society in areas such as health and environmental protection, disaster relief during floods, and science popularization initiatives.

Mr. Li Zheng, CEO of JCET, said, "JCET has always centered its focus on customers, and achieved quarter-on-quarter growth in performance for the second quarter of this year. Looking ahead, the direction of high-performance advanced packaging technology driving the innovation of the IC industry has become increasingly clear. JCET remains committed to achieving high-quality development through professional and international management, and will continue to create value for investors and the IC industry."

For more information, please refer to the JCET 1H FY2023 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

	Jun 30, 2023		Dec 31, 2022
ASSETS
Current assets
Currency funds	5,352		2,459
Trading financial assets	2,006		4,316
Derivative financial assets	0		18
Accounts receivable	3,545		3,689
Receivables financing	105		59
Prepayments	127		110
Other receivables	63		61
Inventories	3,003		3,152
Other current assets	251		279
Total current assets	14,452		14,143
Non-current assets
Long-term receivables	41		40
Long-term equity investments	744		765
Other equity investments	456		440
Investment properties	87		89
Fixed assets	19,574		19,517
Construction in progress	710		807
Right-of-use assets	567		578
Intangible assets	483		483
Goodwill	2,293		2,210
Long-term prepaid expenses	22		28
Deferred tax assets	274		247
Other non-current assets	106		61
Total non-current assets	25,357		25,265
Total assets	39,809		39,408

LIABILITIES AND EQUITY	Jun 30, 2023		Dec 31, 2022
Current liabilities
Short-term borrowings	1,211		1,174
Derivative financial liabilities	2		0
Notes payable	215		339
Accounts payable	4,603		4,634
Contract liabilities	273		214
Employee benefits payable	689		984
Taxes and surcharges payable	158		210
Other payables	396		378
Current portion of long-term liabilities	2,857		3,096
Other current liabilities	4		4
Total current liabilities	10,408		11,033
Non-current liabilities
Long-term borrowings	3,013		2,721
Lease liabilities	549		562
Long-term employee benefits payable	11		14
Deferred income	362		340
Deferred tax liabilities	14		40
Other non-current liabilities	41		55
Total non-current liabilities	3,990		3,732
Total liabilities	14,398		14,765
Equity
Paid-in capital	1,787		1,780
Capital reserves	15,265		15,080
Accumulated other comprehensive income	750		400
Specialized reserves	2		0
Surplus reserves	229		229
Unappropriated profit	7,292		7,154
Total equity attributable to owners of the parent	25,325		24,643
Minority shareholders	86		0
Total equity	25,411		24,643
Total liabilities and equity	39,809		39,408

CONSOLIDATED INCOME STATEMENT (Unaudited)			RMB in millions, except share data

	Three months ended		Six months ended
	Jun 30, 2023	Jun 30, 2022	Jun 30, 2023	Jun 30, 2022
Revenue	6,313	7,455	12,173	15,594
Less: Cost of sales	5,359	6,107	10,525	12,706
Taxes and surcharges	27	27	47	43
Selling expenses	51	48	100	97
Administrative expenses	175	236	347	494
Research and development expenses	360	315	669	638
Finance expenses	(7)	(8)	51	15
Including: Interest expenses	68	49	131	92
Interest income	27	9	35	16
Add: Other income	40	26	73	83
Investment income / (loss)	(24)	28	(21)	40
Including: Income / (loss) from investments in associates and joint ventures	(10)	(2)	(21)	(7)
Gain / (loss) on changes in fair value of financial assets/liabilities	37	(17)	46	(14)
Credit impairment (loss is expressed by "-")	(6)	2	(1)	(5)
Asset impairment (loss is expressed by "-")	(5)	(65)	0	(64)
Gain / (loss) on disposal of assets	13	9	16	23
Operating profit / (loss)	403	713	547	1,664
Add: Non-operating income	2	1	3	6
Less: Non-operating expenses	0	1	4	1
Profit / (loss) before income taxes	405	713	546	1,669
Less: Income tax expenses	19	31	50	126
Net profit / (loss)	386	682	496	1,543
Classified by continuity of operations
Profit / (loss) from continuing operations	386	682	496	1,543
Classified by ownership
Net profit / (loss) attributable to owners of the parent	386	682	496	1,543
Net profit / (loss) attributable to minority shareholders	0	0	0	0
Add: Unappropriated profit at beginning of period	7,264	5,196	7,154	4,335
Less: Cash dividends declared	358	356	358	356
Unappropriated profit at end of period (attributable to owners of the parent）	7,292	5,522	7,292	5,522
Other comprehensive income, net of tax	481	419	350	386
Comprehensive income attributable to owners of the parent	481	419	350	386
Comprehensive income not be reclassified to profit or loss	6	0	17	0
Remeasurement gains or losses of a defined benefit plan	0	0	1	0
Change in the fair value of other equity investments	6	0	16	0
Comprehensive income to be reclassified to profit or loss	475	419	333	386
Comprehensive income using the equity method that may be reclassified to profit or loss	0	(7)	0	(7)
Cash flow hedge reserve	0	(13)	0	(18)
Exchange differences of foreign currency financial statements	475	439	333	411
Total comprehensive income	867	1,101	846	1,929
Including:
Total comprehensive income attributable to owners of the parent	867	1,101	846	1,929
Total comprehensive income attributable to minority shareholders	0	0	0	0
Earnings per share
Basic earnings per share	0.22	0.39	0.28	0.87
Diluted earnings per share	0.22	0.39	0.28	0.87

CONSOLIDATED CASH FLOW STATEMENT (Unaudited)				RMB in millions

	Three months ended		Six months ended
	Jun 30, 2023	Jun 30, 2022	Jun 30, 2023	Jun 30, 2022
CASH FLOWS FROM OPERATING ACTIVITIES
Cash receipts from the sale of goods and the rendering of services	6,178	8,184	13,162	16,999
Receipts of taxes and surcharges refunds	122	32	216	147
Other cash receipts relating to operating activities	110	62	163	132
Total cash inflows from operating activities	6,410	8,278	13,541	17,278
Cash payments for goods and services	4,069	5,766	8,454	11,612
Cash payments to and on behalf of employees	878	1,060	2,072	2,309
Payments of all types of taxes and surcharges	254	314	466	501
Other cash payments relating to operating activities	22	93	128	171
Total cash outflows from operating activities	5,223	7,233	11,120	14,593
Net cash flows from operating activities	1,187	1,045	2,421	2,685
CASH FLOWS FROM INVESTING ACTIVITIES
Cash receipts from returns of investments	4,350	4,160	8,280	5,160
Cash receipts from investment income	38	32	52	38
Net cash receipts from disposal of fixed assets, intangible assets and other long-term assets	7	8	32	34
Net cash receipts from disposal of subsidiaries and other business units	0	(1)	0	27
Total cash inflows from investing activities	4,395	4,199	8,364	5,259
Cash payments to acquire fixed assets, intangible assets and other long-term assets	749	651	1,588	1,550
Cash payments for investments	3,200	4,310	5,980	5,960
Total cash outflows from investing activities	3,949	4,961	7,568	7,510
Net cash flows from investing activities	446	(762)	796	(2,251)
CASH FLOWS FROM FINANCING ACTIVITIES
Cash proceeds from investments by others	230	0	230	0
Including: Cash receipts from capital contributions from minority shareholders of subsidiaries	86	0	86	0
Cash receipts from borrowings	1,317	985	1,664	1,515
Total cash inflows from financing activities	1,547	985	1,894	1,515
Cash repayments for debts	755	988	1,740	1,734
Cash payments for distribution of dividends or profit and interest expenses	414	49	467	90
Other cash payments relating to financing activities	16	446	48	589
Total cash outflows from financing activities	1,185	1,483	2,255	2,413
Net cash flows from financing activities	362	(498)	(361)	(898)
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS	45	59	37	57
NET INCREASE IN CASH AND CASH EQUIVALENTS	2,040	(156)	2,893	(407)
Add: Cash and cash equivalents at beginning of period	3,306	2,512	2,453	2,763
CASH AND CASH EQUIVALENTS AT END OF PERIOD	5,346	2,356	5,346	2,356

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