JCET's Global Manufacturing Strategy Produces Records for Revenue and Profit in Q3
Q3 2020 Financial Highlights:
- Revenue was RMB 6.79 billion. On a comparable basis, taking into account the accounting change in revenue recognition, it was an increase of 11.2% year on year (see note).
- Generated RMB 1.48 billion cash from operations, up 171.3％ year on year. With net capex investments of RMB 0.69 billion, free cash flow for the quarter was RMB 0.79 billion.
- Net profit was RMB 0.40 billion, a record high in the company's history.
- Earnings per share was RMB 0.25, as compared to RMB 0.05 in Q3 2019.
Note: 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 1.05 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 7.84 billion, an increase of 11.2% over the same period last year. |
SHANGHAI, Oct. 30, 2020 /PRNewswire/ -- JCET Group Co., Ltd. (Shanghai Stock Exchange code: 600584), a world leading provider of semiconductor microsystem integration packaging and testing services announced financial results for the third quarter 2020, ended September 30, 2020. Revenue was RMB 6.79 billion and net profit was RMB 0.40 billion, showing steady revenue growth and continued improvement in profitability. JCET has achieved revenue of RMB 18.76 billion and net profit of RMB 0.76 billion through the first three quarters, both representing record highs for the company.
JCET has continued to grow its strategic partnerships with global industry leading semiconductor manufacturers by accelerating the growth of high volume production capacity of advanced assembly and test processes and engaging in robust market strategies. These initiatives have led to improvements in key financial metrics.
Mr. Li Zheng, Chief Executive Officer of JCET Group, said, "By expanding the integration of the resources in each of our worldwide operations, we have accelerated the growth of our production capacity for devices designed for key applications in the 5G, high-performance computing and high-end storage markets. Additionally, the technical services capabilities of each of our global factories have been enhanced significantly due to the continued improvements driven by our company's world-class management team."
Ms. Janet Chou, Chief Financial Officer of JCET Group, said, "With strong execution and operational discipline, JCET delivered record profit in the third quarter of 2020. We remain committed to driving profitable growth and cash generation. Given the improved liquidity position and healthier balance sheet, we will continue to invest in critical technologies to strengthen our core competencies."
About JCET Group:
JCET Group is a leading global semiconductor system integration packaging and test 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 | |||||||
As of | ||||||||
ASSETS | Sep 30, 2020 | Dec 31, 2019 | ||||||
Current assets | ||||||||
Currency funds | 2,248 | 2,569 | ||||||
Derivative financial assets | 3 | 4 | ||||||
Accounts receivable | 3,851 | 3,350 | ||||||
Receivables financing | 85 | 68 | ||||||
Prepayments | 201 | 188 | ||||||
Other receivables | 11 | 11 | ||||||
Inventories | 3,138 | 2,731 | ||||||
Current portion of non-current assets | 56 | 137 | ||||||
Other current assets | 194 | 501 | ||||||
Total current assets | 9,787 | 9,559 | ||||||
Non-current assets | ||||||||
Long-term receivables | 30 | 40 | ||||||
Long-term equity investments | 941 | 972 | ||||||
Other equity investments | 491 | 517 | ||||||
Investment properties | 97 | 100 | ||||||
Fixed assets | 17,970 | 17,799 | ||||||
Construction in progress | 1,176 | 1,664 | ||||||
Intangible assets | 556 | 587 | ||||||
Goodwill | 2,159 | 2,214 | ||||||
Long-term prepaid expenses | 0 | 1 | ||||||
Deferred tax assets | 124 | 128 | ||||||
Other non-current assets | 1 | 1 | ||||||
Total non-current assets | 23,545 | 24,023 | ||||||
Total assets | 33,332 | 33,582 | ||||||
CONSOLIDATED BALANCE SHEET (CONTINUED) (Unaudited) | RMB in millions | |||||||
As of | ||||||||
LIABILITIES AND EQUITY | Sep 30, 2020 | Dec 31, 2019 | ||||||
Current liabilities | ||||||||
Short-term borrowings | 5,797 | 9,098 | ||||||
Derivative financial liabilities | 42 | 161 | ||||||
Notes payable | 487 | 958 | ||||||
Accounts payable | 5,212 | 4,618 | ||||||
Receipts in advance | 0 | 113 | ||||||
Contract liabilities | 30 | 0 | ||||||
Employee benefits payable | 777 | 586 | ||||||
Taxes and surcharges payable | 116 | 53 | ||||||
Other payables | 217 | 235 | ||||||
Current portion of long-term liabilities | 2,510 | 1,827 | ||||||
Total current liabilities | 15,188 | 17,649 | ||||||
Non-current liabilities | ||||||||
Long-term borrowings | 2,680 | 1,585 | ||||||
Bonds payable | 1,022 | 0 | ||||||
Long-term payables | 714 | 1,216 | ||||||
Long-term employee benefits payable | 2 | 1 | ||||||
Deferred income | 365 | 337 | ||||||
Deferred tax liabilities | 158 | 156 | ||||||
Total non-current liabilities | 4,941 | 3,295 | ||||||
Total liabilities | 20,129 | 20,944 | ||||||
Equity | ||||||||
Paid-in capital | 1,603 | 1,603 | ||||||
Surplus reserves | 10,242 | 10,242 | ||||||
Accumulated other comprehensive income | 232 | 429 | ||||||
Specialized reserves | 122 | 122 | ||||||
Unappropriated profit | 994 | 231 | ||||||
Total equity attributable to owners of the parent | 13,193 | 12,627 | ||||||
Minority shareholders | 10 | 11 | ||||||
Total equity | 13,203 | 12,638 | ||||||
Total liabilities and equity | 33,332 | 33,582 | ||||||
CONSOLIDATED INCOME STATEMENT (Unaudited) | RMB in millions, except share data | |||||||
Three months ended | Nine months ended | |||||||
Sep 30, 2020 | Sep 30, 2019 | Sep 30, 2020 | Sep 30, 2019 | |||||
Revenue | 6,787 | 7,047 | 18,763 | 16,196 | ||||
Less: Cost of sales | 5,631 | 6,209 | 15,863 | 14,507 | ||||
Taxes and surcharges | 11 | 9 | 28 | 26 | ||||
Selling expenses | 59 | 71 | 175 | 199 | ||||
Administrative expenses | 252 | 265 | 687 | 814 | ||||
Research and development expenses | 277 | 227 | 768 | 576 | ||||
Finance expenses | 179 | 223 | 482 | 657 | ||||
Including: Interest expenses | 131 | 220 | 433 | 589 | ||||
Interest income | 12 | 7 | 31 | 20 | ||||
Add: Other income | 17 | 31 | 97 | 217 | ||||
Investment income / (loss) | (1) | 5 | (8) | 1 | ||||
Including: Income / (loss) from investments in a | (1) | 5 | (8) | 2 | ||||
Gain / (loss) on the net position hedging | 6 | 0 | 1 | 0 | ||||
Gain / (loss) on changes in fair value of financial assets | 28 | 0 | 28 | 0 | ||||
Credit impairment (loss is expressed by "-") | (1) | 2 | (7) | (6) | ||||
Asset impairment (loss is expressed by "-") | 0 | (1) | (25) | (15) | ||||
Gain / (loss) on disposal of assets | 33 | 7 | 42 | 14 | ||||
Operating profit / (loss) | 460 | 87 | 888 | (372) | ||||
Add: Non-operating income | 3 | 0 | 3 | 1 | ||||
Less: Non-operating expenses | 10 | 0 | 18 | 4 | ||||
Profit / (loss) before income taxes | 453 | 87 | 873 | (375) | ||||
Less: Income tax expenses | 55 | 10 | 108 | (194) | ||||
Net profit / (loss) | 398 | 77 | 765 | (181) | ||||
Classified by continuity of operations | ||||||||
Profit / (loss) from continuing operations | 398 | 77 | 765 | (181) | ||||
Classified by ownership | ||||||||
Net profit / (loss) attributable to owners of the parent | 398 | 77 | 764 | (182) | ||||
Net profit / (loss) attributable to minority shareholders | 0 | 0 | 1 | 1 | ||||
Add: Unappropriated profit at beginning of period | 598 | (116) | 231 | 143 | ||||
Less: Other reductions | 2 | 0 | 2 | 0 | ||||
Unappropriated profit at end of period (attributable to owners of the parent) | 994 | (39) | 994 | (39) | ||||
CONSOLIDATED INCOME STATEMENT (CONTINUED) (Unaudited) | RMB in millions, except share data | |||||||
Three months ended | Nine months ended | |||||||
Sep 30, 2020 | Sep 30, 2019 | Sep 30, 2020 | Sep 30, 2019 | |||||
Other comprehensive income, net of tax | (354) | 241 | (197) | 199 | ||||
Comprehensive income attributable to owners of the parent | (354) | 241 | (197) | 199 | ||||
Comprehensive income not be reclassified to profit or loss | (10) | 0 | (10) | 0 | ||||
Change in the fair value of other equity investments | (10) | 0 | (10) | 0 | ||||
Comprehensive income to be reclassified to profit or loss | (344) | 241 | (187) | 199 | ||||
Comprehensive income using the equity method | 0 | 0 | 0 | 0 | ||||
Cash flow hedge reserve | (1) | (1) | 1 | 4 | ||||
Exchange differences of foreign currency financial statements | (343) | 242 | (188) | 195 | ||||
Total comprehensive income | 42 | 318 | 567 | 18 | ||||
Including: | ||||||||
Total comprehensive income attributable to owners of the | 42 | 318 | 566 | 17 | ||||
Total comprehensive income attributable to minority | 0 | 0 | 1 | 1 | ||||
Earnings per share | ||||||||
Basic earnings per share | 0.25 | 0.05 | 0.48 | (0.11) | ||||
Diluted earnings per share | 0.25 | 0.05 | 0.48 | (0.11) | ||||
CONSOLIDATED CASH FLOW STATEMENT (Unaudited) | RMB in millions | |||||||
Three months ended | Nine months ended | |||||||
Sep 30, 2020 | Sep 30, 2019 | Sep 30, 2020 | Sep 30, 2019 | |||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
Cash receipts from the sale of goods and the rendering of services | 6,468 | 6,695 | 19,360 | 16,651 | ||||
Receipts of taxes and surcharges refunds | 105 | 139 | 528 | 297 | ||||
Other cash receipts relating to operating activities | 244 | 69 | 767 | 277 | ||||
Total cash inflows from operating activities | 6,817 | 6,903 | 20,655 | 17,225 | ||||
Cash payments for goods and services | 4,241 | 5,200 | 13,584 | 12,376 | ||||
Cash payments to and on behalf of employees | 856 | 911 | 2,644 | 2,699 | ||||
Payments of all types of taxes and surcharges | 81 | 173 | 313 | 411 | ||||
Other cash payments relating to operating activities | 159 | 74 | 482 | 377 | ||||
Total cash outflows from operating activities | 5,337 | 6,358 | 17,023 | 15,863 | ||||
Net cash flows from operating activities | 1,480 | 545 | 3,632 | 1,362 | ||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
Cash receipts from returns of investments | 6 | 37 | 6 | 103 | ||||
Cash receipts from investment income | 0 | 2 | 0 | 2 | ||||
Net cash receipts from disposal of fixed assets, intangible assets | 38 | 30 | 65 | 45 | ||||
Other cash receipts relating to investing activities | 0 | 0 | 0 | 20 | ||||
Total cash inflows from investing activities | 44 | 69 | 71 | 170 | ||||
Cash payments to acquire fixed assets, intangible assets and other | 726 | 627 | 2,062 | 2,157 | ||||
Total cash outflows from investing activities | 726 | 627 | 2,062 | 2,157 | ||||
Net cash flows from investing activities | (682) | (558) | (1,991) | (1,987) | ||||
CONSOLIDATED CASH FLOW STATEMENT (CONTINUED) (Unaudited) | RMB in millions | |||||||
Three months ended | Nine months ended | |||||||
Sep 30, 2020 | Sep 30, 2019 | Sep 30, 2020 | Sep 30, 2019 | |||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
Cash receipts from borrowings | 1,418 | 2,350 | 9,950 | 10,843 | ||||
Other cash receipts relating to financing activities | 0 | 1,103 | 0 | 1,880 | ||||
Total cash inflows from financing activities | 1,418 | 3,453 | 9,950 | 12,723 | ||||
Cash repayments for debts | 2,311 | 3,407 | 10,452 | 12,613 | ||||
Cash payments for distribution of dividends or profit and interest | 120 | 232 | 425 | 669 | ||||
Other cash payments relating to financing activities | 206 | 51 | 491 | 766 | ||||
Total cash outflows from financing activities | 2,637 | 3,690 | 11,368 | 14,048 | ||||
Net cash flows from financing activities | (1,219) | (237) | (1,418) | (1,325) | ||||
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH | (48) | 37 | (33) | 43 | ||||
NET INCREASE IN CASH AND CASH EQUIVALENTS | (469) | (213) | 190 | (1,907) | ||||
Add: Cash and cash equivalents at beginning of period | 2,525 | 2,512 | 1,866 | 4,206 | ||||
CASH AND CASH EQUIVALENTS AT END OF PERIOD | 2,056 | 2,299 | 2,056 | 2,299 | ||||
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