JCET Will Continuously Focus on R&D and Resource Investment, Preparing for Future Market Growth

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25 Apr, 2023, 12:25 GMT

Q1 2023 Financial Summary：

Revenue was RMB 5.86 billion.
Generated RMB 1.23 billion cash from operations. With net capex investments of RMB 0.81 billion, free cash flow for the quarter was RMB 0.42 billion.
Net profit was RMB 0.11 billion. Earnings per share was RMB 0.06.

SHANGHAI, April 25, 2023 /PRNewswire/ -- JCET Group (SSE: 600584), a leading global provider of integrated circuit (IC) manufacturing and technology services, today announced its financial results for the first quarter of 2023. According to the financial report, in Q1 2023 JCET achieved revenue of RMB 5.86 billion, and net profit of RMB 0.11 billion.

Consumer electronics demand has been weak causing chip companies to accumulate high inventory levels and face increasing market pressure. In order to actively and effectively respond to market changes, JCET continuously invests in high-performance, advanced packaging technology, and in fields with continuously growing demand such as automotive electronics, industrial electronics, and high-performance computing, to prepare for a new round of application demand growth.

In recent years, JCET focused on technology development and has achieved HVM of advanced packaging technologies such as system level (SiP), wafer level, and 2.5D/3D. In Q1 2023, the proportion of advanced packaging revenue in the company's revenue continuously exceeded 60%, becoming the "ballast stone" for the company's development. JCET invested RMB 1.31 billion in R&D in 2022, a year-on-year increase of 10.7%; in the first quarter of this year, R&D investment was RMB 0.31 billion, accounting for 5.3% of revenue. JCET has made breakthroughs in the field of chiplet technology, achieving ultra-large high-density fan-out flip chip heterogeneous integration of multiple chips in packages as large as 102mm x 102mm. It is also supported with a complete set of turnkey services from design to production, providing excellent microsystem integration solutions for high-performance computing applications.

In the field of automotive electronics, the company accelerates the R&D of advanced packaging technologies related to electric vehicles and autonomous driving with high-reliability standards, as well as the development of next-generation power device modules and other products, enhancing the differentiated competitiveness of advanced technologies and services and implementing them at their factories. In Q1 2023, the revenue of automotive electronics continued to grow with a year-on-year increase of 144%.

In 2023, JCET will maintain a reasonable level of growth in total capital expenditure, expanding production capacity to meet customer needs, while actively expanding the company's investment in R&D, infrastructure, technological innovation, and factory automation upgrades.

Mr. Li Zheng, CEO of JCET said, "The combination of several factors has resulted in a sustained downturn in the semiconductor market. Although the short-term performance is under pressure, JCET will continuously adhere to the strategy of promoting international and domestic business, increase investment in cutting-edge technology and resources, and focus on higher-level packaging technologies such as automotive electronic chips and diversified solutions for chiplet. The company will carry out forward-looking infrastructure, R&D, and strategic production capacity expansion, accelerate the product development and market promotion mechanisms centered on intelligent solutions, explore market demand with greater potential for future development, and provide high-quality production technology services to global customers."

For more information, please refer to the JCET Q1 2023 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 industrial, through advanced wafer-level packaging, 2.5D/3D, System-in-Package, 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 our global customers.

CONSOLIDATED BALANCE SHEET (Unaudited)		RMB in millions

	Mar 31, 2023	Dec 31, 2022
ASSETS
Current assets
Currency funds	3,312	2,459
Trading financial assets	3,180	4,316
Derivative financial assets	4	18
Accounts receivable	2,605	3,689
Receivables financing	119	59
Prepayments	132	110
Other receivables	42	61
Inventories	2,636	3,152
Other current assets	276	279
Total current assets	12,306	14,143
Non-current assets
Long-term receivables	39	40
Long-term equity investments	753	765
Other equity investments	450	440
Investment properties	88	89
Fixed assets	19,045	19,517
Construction in progress	897	807
Right-of-use assets	551	578
Intangible assets	477	483
Goodwill	2,181	2,210
Long-term prepaid expenses	25	28
Deferred tax assets	251	247
Other non-current assets	104	61
Total non-current assets	24,861	25,265
Total assets	37,167	39,408

LIABILITIES AND EQUITY	Mar 31, 2023	Dec 31, 2022
Current liabilities
Short-term borrowings	898	1,174
Derivative financial liabilities	7	0
Notes payable	280	339
Accounts payable	3,504	4,634
Contract liabilities	214	214
Employee benefits payable	718	984
Taxes and surcharges payable	196	210
Other payables	377	378
Current portion of long-term liabilities	2,847	3,096
Other current liabilities	4	4
Total current liabilities	9,045	11,033
Non-current liabilities
Long-term borrowings	2,528	2,721
Lease liabilities	529	562
Long-term employee benefits payable	14	14
Deferred income	322	340
Deferred tax liabilities	32	40
Other non-current liabilities	52	55
Total non-current liabilities	3,477	3,732
Total liabilities	12,522	14,765
Equity
Paid-in capital	1,780	1,780
Capital reserves	15,103	15,080
Accumulated other comprehensive income	269	400
Surplus reserves	229	229
Unappropriated profit	7,264	7,154
Total equity attributable to owners of the parent	24,645	24,643
Minority shareholders	0	0
Total equity	24,645	24,643
Total liabilities and equity	37,167	39,408

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

	Three months ended
	Mar 31, 2023	Mar 31, 2022
Revenue	5,860	8,138
Less: Cost of sales	5,166	6,599
Taxes and surcharges	20	16
Selling expenses	49	49
Administrative expenses	171	258
Research and development expenses	309	322
Finance expenses	57	23
Including: Interest expenses	64	43
Interest income	9	7
Add: Other income	32	56
Investment income / (loss)	2	12
Including: Income / (loss) from investments in associates and joint ventures	(12)	(5)
Gain / (loss) on changes in fair value of financial assets/liabilities	8	3
Credit impairment (loss is expressed by "-")	5	(7)
Asset impairment (loss is expressed by "-")	6	1
Gain / (loss) on disposal of assets	3	15
Operating profit / (loss)	144	951
Add: Non-operating income	0	5
Less: Non-operating expenses	3	0
Profit / (loss) before income taxes	141	956
Less: Income tax expenses	31	95
Net profit / (loss)	110	861
Classified by continuity of operations
Profit / (loss) from continuing operations	110	861
Classified by ownership
Net profit / (loss) attributable to owners of the parent	110	861
Net profit / (loss) attributable to minority shareholders	0	0
Add: Unappropriated profit at beginning of period	7,154	4,334
Unappropriated profit at end of period (attributable to owners of the parent）	7,264	5,195
Other comprehensive income, net of tax	(131)	(32)
Comprehensive income attributable to owners of the parent	(131)	(32)
Comprehensive income not be reclassified to profit or loss	11	0
Remeasurement gains or losses of a defined benefit plan	1	0
Change in the fair value of other equity investments	10	0
Comprehensive income to be reclassified to profit or loss	(142)	(32)
Cash flow hedge reserve	0	(4)
Exchange differences of foreign currency financial statements	(142)	(28)
Total comprehensive income	(21)	829
Including:
Total comprehensive income attributable to owners of the parent	(21)	829
Total comprehensive income attributable to minority shareholders	0	0
Earnings per share
Basic earnings per share	0.06	0.48
Diluted earnings per share	0.06	0.48


CONSOLIDATED CASH FLOW STATEMENT (Unaudited)		RMB in millions

	Three months ended
	Mar 31, 2023	Mar 31, 2022
CASH FLOWS FROM OPERATING ACTIVITIES
Cash receipts from the sale of goods and the rendering of services	6,984	8,815
Receipts of taxes and surcharges refunds	94	115
Other cash receipts relating to operating activities	53	70
Total cash inflows from operating activities	7,131	9,000
Cash payments for goods and services	4,385	5,845
Cash payments to and on behalf of employees	1,194	1,249
Payments of all types of taxes and surcharges	212	187
Other cash payments relating to operating activities	106	79
Total cash outflows from operating activities	5,897	7,360
Net cash flows from operating activities	1,234	1,640
CASH FLOWS FROM INVESTING ACTIVITIES
Cash receipts from returns of investments	3,930	1,000
Cash receipts from investment income	14	6
Net cash receipts from disposal of fixed assets, intangible assets and other long-term assets	26	26
Net cash receipts from disposal of subsidiaries and other business units	0	28
Total cash inflows from investing activities	3,970	1,060
Cash payments to acquire fixed assets, intangible assets and other long-term assets	839	899
Cash payments for investments	2,780	1,650
Total cash outflows from investing activities	3,619	2,549
Net cash flows from investing activities	351	(1,489)
CASH FLOWS FROM FINANCING ACTIVITIES
Cash receipts from borrowings	347	531
Total cash inflows from financing activities	347	531
Cash repayments for debts	985	746
Cash payments for distribution of dividends or profit and interest expenses	53	42
Including: Dividends or profit paid to non-controlling shareholders of subsidiaries	0	0
Other cash payments relating to financing activities	33	143
Total cash outflows from financing activities	1,071	931
Net cash flows from financing activities	(724)	(400)
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS	(8)	(2)
NET INCREASE IN CASH AND CASH EQUIVALENTS	853	(251)
Add: Cash and cash equivalents at beginning of period	2,453	2,763
CASH AND CASH EQUIVALENTS AT END OF PERIOD	3,306	2,512

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