Fourth Quarter and Fiscal Year 2020 Financial Results: - Fourth-quarter revenue was RMB 7.70 billion. On a comparable basis, taking into account the accounting change in revenue recognition, it was an increase of 17.6% year on year (see note 1). - Full-year revenue was RMB 26.46 billion. On a comparable basis, taking into account the accounting change in revenue recognition, it was an increase of 28.2% year on year (see note 2). - Fourth-quarter cash from operations was RMB 1.80 billion. With net capex investments of RMB 1.01 billion, free cash flow for the quarter was RMB 0.79 billion. - Full-year cash from operations was RMB 5.43 billion, up 71.1% year on year. With net capex investments of RMB 3.01 billion, free cash flow for the year was RMB 2.42 billion. - Fourth-quarter net profit was RMB 0.54 billion. Full-year net profit was RMB 1.30 billion, a record high in the company's history. Earnings per share was RMB 0.34 in the fourth quarter and RMB 0.81 for the full year, as compared to RMB 0.17 in Q4 2019 and RMB 0.06 in 2019 respectively. Note 1: During the reporting period, we optimized the business model for the purchase and sale of certain packaged products, of which JCET Group no longer bears the general inventory risk on the main raw materials. In accordance with PRC GAAP, both revenue and costs of goods sold were recorded on the net basis and decreased by RMB 0.92 billion respectively. This change had no impact on the company's net profit. Assuming that revenue was still recognized by the gross method (should be recorded on the net basis according to PRC GAAP), it would be RMB 8.62 billion, an increase of 17.6% over the same period last year. Note 2: During the reporting period, we optimized the business model for the purchase and sale of certain packaged products, of which JCET Group no longer bears the general inventory risk on the main raw materials. In accordance with PRC GAAP, both revenue and costs of goods sold were recorded on the net basis and decreased by RMB 3.70 billion respectively. This change had no impact on the company's net profit. Assuming that revenue was still recognized by the gross method (should be recorded on the net basis according to PRC GAAP), it would be RMB 30.16 billion, an increase of 28.2% over the same period last year. JCET (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, 2020. According to the financial report, in 2020, JCET achieved solid and rapid growth with strong profitability, with revenue of RMB 26.46 billion and net profit of RMB 1.30 billion. The demand for semiconductor products was historically strong in 2020, driven by the rapid development and integration of 5G and AI. JCET was poised and ready for this opportunity, delivering a record level performance for FY2020 by successfully optimizing and integrating the technology, management and production capacity resources of its domestic and international manufacturing hubs and R&D centers. JCET also leveraged its years of accumulated industry know-how and continued expanding its investment in both R&D and talent development, resulting in a year-on-year increase of 5.2% in R&D expenditure and 154 new patents. JCET's core technologies include advanced packaging technologies such as System-in-Package (SiP), high-density flip-chip and wafer-level-packaging (WLP), providing innovative solutions for 5G communication, automotive, high-performance computing, storage and other demanding applications. During FY2020, the cumulative number of JCET patents grew to 3,238. The expansion of intellectual property has created a solid foundation for future innovations that will be needed to meet the unique and complex demands of the market. Mr. Li Zheng, CEO of JCET said, "With over 50 years of OSAT industry experiences, JCET is now firmly positioned as a tier-1 global IC manufacturing and service provider. With the support and guidance from our new board of directors, the company has successfully optimized and integrated our technology, talent and production recourses throughout our operations around the world. We have made significant investments to continue developing innovative packaging technologies as well as assembly and test manufacturing processes. These strategic initiatives led to our record breaking performance in 2020 and have also positioned us well for the opportunities that lie ahead of us in 2021!" Ms. Janet Chou, CFO of JCET said, "We delivered record level annual revenue, profit and free cash flows in 2020. The net profit for the year was approximately twice the sum of the net profits for the 17 years since the public listing of JCET. We strengthened our balance sheet with significant improvements in our key financial metrics. We announced a common stock dividend of RMB 0.05 per share. Our focus on advanced packaging technologies is paying off." In the post-Moore era, technical collaboration across the IC industry chain is becoming more and more important. As a leading supplier in the IC industry, JCET continues operating by its core value of "win-win cooperation" and is committed to promoting the collaborative development of the supply chain to enable the semiconductor industry to successfully overcome the challenges created by the growing demands of the market. For more information, please refer to JCET FY2020 report. CONSOLIDATED BALANCE SHEET (Audited) RMB in millions As of ASSETS Dec 31, 2020 Dec 31, 2019 Currency funds 2,235 2,569 Trading financial assets 5 0 Derivative financial assets 8 4 Accounts receivable 3,846 3,350 Receivables financing 41 68 Prepayments 158 188 Other receivables 41 11 Inventories 2,946 2,731 Current portion of non-current assets 0 137 Other current assets 149 501 Total current assets 9,429 9,559 Non-current assets Long-term receivables 42 40 Long-term equity investments 949 972 Other equity investments 430 517 Investment properties 96 100 Fixed assets 17,790 17,799 Construction in progress 866 1,664 Intangible assets 526 587 Goodwill 2,071 2,214 Long-term prepaid expenses 0 1 Deferred tax assets 128 128 Other non-current assets 1 1 Total non-current assets 22,899 24,023 Total assets 32,328 33,582 CONSOLIDATED BALANCE SHEET (CONTINUED) (Audited) RMB in millions As of LIABILITIES AND EQUITY Dec 31, 2020 Dec 31, 2019 Current liabilities Short-term borrowings 5,288 9,098 Derivative financial liabilities 0 161 Notes payable 513 958 Accounts payable 4,499 4,618 Receipts in advance 0 113 Contract liabilities 173 0 Employee benefits payable 858 586 Taxes and surcharges payable 109 53 Other payables 254 235 Current portion of long-term liabilities 2,131 1,827 Other current liabilities 21 0 Total current liabilities 13,846 17,649 Non-current liabilities Long-term borrowings 2,978 1,585 Bonds payable 999 0 Long-term payables 592 1,216 Long-term employee benefits payable 4 1 Deferred income 375 337 Deferred tax liabilities 124 156 Total non-current liabilities 5,072 3,295 Total liabilities 18,918 20,944 Equity Paid-in capital 1,603 1,603 Surplus reserves 10,242 10,242 Accumulated other comprehensive income (83) 429 Specialized reserves 120 122 Unappropriated profit 1,518 231 Total equity attributable to owners of the parent 13,400 12,627 Minority shareholders 10 11 Total equity 13,410 12,638 Total liabilities and equity 32,328 33,582 CONSOLIDATED INCOME STATEMENT (CONTINUED) (Audited) RMB in millions, except share data Three months ended Year ended Dec 31, 2020 Dec 31, 2019 Dec 31, 2020 Dec 31, 2019 Revenue 7,701 7,330 26,464 23,526 Less: Cost of sales 6,512 6,388 22,374 20,895 Taxes and surcharges 20 10 48 37 Selling expenses 50 67 225 265 Administrative expenses 350 230 1,037 1,044 Research and development expenses 252 393 1,020 969 Finance expenses 152 213 634 870 Including: Interest expenses 136 153 569 742 Interest income 11 7 42 27 Add: Other income 88 79 185 296 Investment income / (loss) 6 6 (2) 7 Including: Income / (loss) from investments in associates and joint ventures (3) 3 (11) 4 Gain / (loss) on the net position hedging (5) (14) (4) (13) Gain / (loss) on changes in fair value of financial assets/liabilities 39 (86) 67 (86) Credit impairment (loss is expressed by "-") 1 (29) (7) (35) Asset impairment (loss is expressed by "-") (62) (219) (87) (234) Gain / (loss) on disposal of assets 126 730 168 744 Operating profit / (loss) 558 496 1,446 125 Add: Non-operating income 3 6 6 6 Less: Non-operating expenses 3 47 21 51 Profit / (loss) before income taxes 558 455 1,431 80 Less: Income tax expenses 17 178 125 (17) Net profit / (loss) 541 277 1,306 97 Classified by continuity of operations Profit / (loss) from continuing operations 541 277 1,306 97 Classified by ownership Net profit / (loss) attributable to owners of the parent 540 271 1,304 89 Net profit / (loss) attributable to minority shareholders 1 6 2 8 Add: Unappropriated profit at beginning of period 994 (40) 231 142 Less: Other reductions 16 0 17 0 Unappropriated profit at end of period (attributable to owners of the parent) 1,518 231 1,518 231 CONSOLIDATED INCOME STATEMENT (CONTINUED) (Audited) RMB in millions, except share data Three months ended Year ended Dec 31, 2020 Dec 31, 2019 Dec 31, 2020 Dec 31, 2019 Other comprehensive income, net of tax (308) (42) (505) 156 Comprehensive income attributable to owners of the parent (308) (42) (505) 156 Comprehensive income not be reclassified to profit or loss (40) 10 (50) 10 Remeasurement gains or losses of a defined benefit plan (2) (1) (2) (1) Change in the fair value of other equity investments (38) 11 (48) 11 Comprehensive income to be reclassified to profit or loss (268) (52) (455) 146 Cash flow hedge reserve (3) (1) (1) 3 Exchange differences of foreign currency financial statements (265) (51) (454) 143 Total comprehensive income 233 235 801 253 Including: Total comprehensive income attributable to owners of the parent 232 229 799 245 Total comprehensive income attributable to minority shareholders 1 6 2 8 Earnings per share Basic earnings per share 0.34 0.17 0.81 0.06 Diluted earnings per share 0.34 0.17 0.81 0.06 CONSOLIDATED INCOME STATEMENT (CONTINUED) (Audited) RMB in millions, except share data Three months ended Year ended Dec 31, 2020 Dec 31, 2019 Dec 31, 2020 Dec 31, 2019 CASH FLOWS FROM OPERATING ACTIVITIES Cash receipts from the sale of goods and the rendering of services 7,989 7,548 27,350 24,199 Receipts of taxes and surcharges refunds (42) 354 486 651 Other cash receipts relating to operating activities 139 120 905 396 Total cash inflows from operating activities 8,086 8,022 28,741 25,246 Cash payments for goods and services 4,891 5,009 18,475 17,385 Cash payments to and on behalf of employees 1,143 1,067 3,787 3,766 Payments of all types of taxes and surcharges 186 (158) 499 253 Other cash payments relating to operating activities 63 290 545 666 Total cash outflows from operating activities 6,283 6,208 23,306 22,070 Net cash flows from operating activities 1,803 1,814 5,435 3,176 CASH FLOWS FROM INVESTING ACTIVITIES Cash receipts from returns of investments 6 (30) 12 73 Cash receipts from investment income 9 31 9 32 Net cash receipts from disposal of fixed assets, intangible assets and other long-term assets 253 23 318 68 Net cash receipts from disposal of subsidiaries and other business units 56 0 56 0 Other cash receipts relating to investing activities 81 0 81 20 Total cash inflows from investing activities 405 24 476 193 Cash payments to acquire fixed assets, intangible assets and other long-term assets 1,268 647 3,330 2,803 Cash payments for investments 5 0 5 0 Total cash outflows from investing activities 1,273 647 3,335 2,803 Net cash flows from investing activities (868) (623) (2,859) (2,610) CONSOLIDATED INCOME STATEMENT (CONTINUED) (Audited) RMB in millions, except share data Three months ended Year ended Dec 31, 2020 Dec 31, 2019 Dec 31, 2020 Dec 31, 2019 CASH FLOWS FROM FINANCING ACTIVITIES Cash receipts from borrowings 5,775 3,437 15,725 14,280 Other cash receipts relating to financing activities 0 238 0 2,118 Total cash inflows from financing activities 5,775 3,675 15,725 16,398 Cash repayments for debts 5,738 4,687 16,190 17,300 Cash payments for distribution of dividends or profit and interest expenses 189 57 614 726 Including: Dividends or profit paid to non-controlling shareholders of subsidiaries 3 0 3 0 Other cash payments relating to financing activities 676 545 1,167 1,311 Total cash outflows from financing activities 6,603 5,289 17,971 19,337 Net cash flows from financing activities (828) (1,614) (2,246) (2,939) EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS 4 (10) (29) 33 NET INCREASE IN CASH AND CASH EQUIVALENTS 111 (433) 301 (2,340) Add: Cash and cash equivalents at beginning of period 2,056 2,299 1,866 4,206 CASH AND CASH EQUIVALENTS AT END OF PERIOD 2,167 1,866 2,167 1,866 SOURCE: JCET Group