Research and Development - Research and development expenses accounted for 11.2% of revenue, with a total of 4,335 R&D personnel across 19 global centers[9] - As of December 31, 2020, the company held 6,034 patents and had 6,287 patents pending[9] - The company aims to enhance per capita output to levels comparable to developed countries through continuous improvement in production processes and global production layout[10] - The company focuses on high-tech, high-value-added precision manufacturing to establish leading advantages in various segments for sustainable development[8] - The company has developed a technology platform to improve R&D efficiency and maintain technological leadership in sub-sectors such as optics and MEMS[11] - The company emphasizes innovation-driven development, continuously enhancing its R&D and high-precision manufacturing capabilities[7] - The company has a strategic focus on core technology R&D in MEMS, electromagnetic transmission, acoustics, optics, and precision components[9] - The company aims to enhance R&D capabilities and customer satisfaction to maintain its market leadership[21] - The company’s R&D expenses increased by 11.8% to RMB 1.92 billion in 2020, primarily due to increased R&D in the optical business[46] Financial Performance - Revenue for 2020 was RMB 17,140,219 thousand, a decrease of 4.2% compared to 2019[14] - Net profit attributable to shareholders for 2020 was RMB 1,506,707 thousand, a decrease of 32.2% from 2019[14] - R&D expenses as a percentage of revenue increased to 11.2% in 2020, up by 1.6 percentage points from 2019[14] - Capital expenditures in 2020 were RMB (5,087,990) thousand, an increase of 67.8% compared to 2019[14] - The gross profit margin for 2020 was 24.7%, a decrease of 3.9 percentage points from 2019[14] - Free cash flow for 2020 was RMB (1,399,535) thousand, indicating a significant cash outflow[14] - Total asset return rate decreased to 4.1% in 2020, down by 2.8 percentage points from 2019[14] - The group's total revenue for the year decreased by 4.2% year-on-year to RMB 17.14 billion, with a gross margin of 24.7% and a net profit of RMB 1.51 billion, down 32.2% year-on-year, primarily due to supply chain impacts from the pandemic[22] - In Q4 2020, total revenue was RMB 4.78 billion, a year-on-year decline of 9.8%, but the gross margin improved to 28.1%, an increase of 4.5 percentage points quarter-on-quarter, with net profit reaching RMB 756 million, a quarter-on-quarter increase of 75.7%[22] Business Strategy and Operations - The company is focusing on internal management transformation and business diversification to adapt to rapid industry changes[21] - The optical business completed two rounds of strategic financing in 2020 and received approval for a separate listing on a Chinese stock exchange, aiming to enhance strategic expansion and attract talent[23] - The MEMS microphone shipments saw significant year-on-year growth in 2020, with plans to continue market penetration through distribution channels in 2021[22] - The company aims to enhance its acoustic business profitability through the launch of standardized small cavity speaker modules in 2021[22] - The company is actively expanding its market presence in the notebook and tablet metal structural components, aiming to improve capacity utilization and mitigate business risks[39] Sustainability and Corporate Responsibility - The company has a commitment to sustainability, publishing an independent sustainability report annually since 2013[4] - The company has set a clean energy target for 2030 and initiated measures such as transitioning to solar energy and introducing electric vehicles[24] - The company achieved 100% waste conversion at two plants in Changzhou under a zero landfill waste program[24] - The company made donations amounting to approximately RMB 880,000 for COVID-19 prevention measures during the fiscal year ending December 31, 2020[108] Risk Management - The company has implemented a comprehensive risk management and internal control system to address strategic, market, operational, financial, and compliance risks[59] - The company faces foreign exchange risks due to its international operations, with cash inflows primarily in RMB and USD, maintaining a balanced ratio[65] - The company has implemented measures to mitigate risks from unforeseen events, such as the COVID-19 pandemic, ensuring a safe working environment[67] - The company has established an enterprise risk management framework to effectively identify, assess, mitigate, and monitor key strategic, market, financial, operational, and compliance risks[186] Governance and Board Composition - The company has a diverse board with members holding significant experience in finance, technology, and corporate governance, enhancing its strategic decision-making capabilities[70][71][72][73] - The board includes members with international experience, which may facilitate the company's market expansion and global strategy[71][73] - The company emphasizes compliance and legal matters, as highlighted by Mr. Mo's responsibilities in financial operations and legal compliance[70] - The board has established separate committees, all chaired by independent non-executive directors, to assist in governance and oversight[124] Shareholder and Financial Structure - The company reported its annual financial statements for the year ending December 31, 2020, which were approved by the board on March 25, 2021[79] - The company has a share incentive plan allowing for a maximum of 1.65% of the issued share capital to be awarded, which equates to 19,940,250 shares as of March 25, 2021[107] - The company’s major shareholders include individuals with significant stakes, such as Mr. Pan and Ms. Wu, whose interests are disclosed in the report[103] - The company has established continuous related party transactions that comply with the Hong Kong Listing Rules[95] Employee and Management - The group employed 33,735 full-time employees as of December 31, 2020, a decrease of 14% from 39,385 employees on December 31, 2019, primarily due to automation efforts and reduced manpower needs caused by the pandemic[110] - The senior management team's compensation is determined based on qualifications, experience, responsibilities, market benchmarks, company performance, and individual performance[175] - The company is committed to investing in talent to develop innovative products and has established multiple R&D centers across Asia, Europe, and North America[110] Audit and Compliance - The audit for the financial statements was conducted by Deloitte, with a resolution to reappoint them as auditors presented at the annual general meeting[115] - The audit and risk committee reported on risk management and internal controls during the fiscal year[134] - The company has adopted best practices in corporate governance since its listing, publishing quarterly financial results to provide shareholders with deeper insights into performance and business progress[146] - The company has established a structured risk management and internal control system aimed at managing risks rather than eliminating them, providing reasonable but not absolute assurance against material misstatements[145]

(Incorporated in the Cayman Islands with limited liability) Stock Code: 2018 中期報告 2020 Interim Report 瑞聲科技控股有限公司 AAC TECHNOLOGIES HOLDINGS INC. (於開曼群島註冊成立之有限公司) 股票代號: 2018 2020 Interim Report 2020 中期報告 瑞聲科技控股有限公司是全球領先的智能設備解決方案提 供商，擁有材料研發、仿真、算法、設計、自動化以及工藝 開發等尖端技術，在聲學、光學、電磁傳動及精密結構件、 微機電系統、無線射頻與天線多個領域，提供頂級的微型 專有技術解決方案。集團以「引領市場創新，提升用戶體 驗」為目標，為客戶提供性能卓越和質量超群的產品，持 續為客戶創造價值，共同實現用戶體驗創新。 www.aactechnologies.com 本中期報告之中英文版本如有不一致，概以英文版本為準。 此中期報告乃使用環保紙印刷 目 錄 | --- | --- | |------------------------------|-------| | | | | ...

Research and Development - Research and development expenses accounted for 9.6% of revenue, with 4,177 R&D personnel across 19 global centers[11] - The company holds 4,411 patents and has 4,785 patents pending as of December 31, 2019[11] - The company is expanding its R&D in micro-acoustics, touch motors, actuators, and MEMS, maintaining technological leadership in these segments[12] - The company has implemented a platform technology to improve R&D efficiency and resource integration across various product lines[12] - The company continues to focus on innovation-driven development to meet future market demands[8] - The company has a strategic goal of leading market innovation and enhancing user experience[2] - The company is committed to creating value for customers through high-performance and quality products[2] Financial Performance - Total revenue for 2019 was RMB 17.88 billion, a decrease of 1.4% year-on-year[24] - Gross margin for 2019 was 28.6%, down from 37.2% in 2018, with Q4 2019 gross margin at 29.0%[24] - The company reported a net profit of RMB 2.22 billion for 2019, significantly lower than RMB 3.80 billion in 2018[24] - Capital expenditures for 2019 were RMB 3.03 billion, representing 60.9% of EBITDA[24] - The group's net profit for the year decreased by 41.5% year-on-year to RMB 2.22 billion, primarily due to a decline in gross profit and an increase in R&D costs[25] - The gross profit for 2019 was RMB 5.1 billion, a decline of 24% from RMB 6.7 billion in 2018, resulting in a gross margin decrease from 37.2% to 28.6%[43] Market Trends and Impact - The impact of COVID-19 is expected to negatively affect demand for smartphones in Q1 2020, leading to lower revenue, gross profit, and net profit[23] - Global smartphone shipments decreased by 2.3% year-on-year to 1.37 billion units in 2019, with a recovery trend observed in the second half of the year[28] - The global 5G smartphone shipments reached 19 million units in 2019, accounting for 1.4% of total smartphone shipments, and are projected to grow to 199 million units (15%) in 2020[28] Operational Efficiency - The company aims to enhance operational efficiency through strict cost control and increased automation[23] - The company aims to enhance production standardization and digitization through self-designed automated equipment[12] - The group plans to commence mass production of the WLG platform in 2020, which is expected to contribute significantly to long-term performance[25] Corporate Governance - The company has a strong commitment to corporate social responsibility, with board members involved in various non-profit organizations and educational institutions[70] - The board of directors includes members with diverse backgrounds in technology, finance, and academia, enhancing the company's strategic decision-making capabilities[70][71][72][73] - The company emphasizes the importance of independent directors in maintaining corporate governance and risk management practices[71][73] - The board consists of independent non-executive directors, ensuring a governance structure that promotes accountability and transparency[122] Risk Management - The company has established an enterprise risk management framework to effectively identify, assess, mitigate, and monitor key strategic, market, financial, operational, and compliance risks[187] - The internal audit team has confirmed the effectiveness of the internal control system for the fiscal year ending December 31, 2019[189] - The company conducts quarterly reviews of its major financial and regulatory risk exposures with management[188] Shareholder Information - The company reported a mid-term dividend of HKD 0.40 per ordinary share for the fiscal year ending December 31, 2019, but decided not to declare a final dividend[81] - The company's distributable reserves amounted to RMB 1,707,881,000, slightly down from RMB 1,716,775,000 in 2018[82] - Major shareholders as of December 31, 2019, include GIC Private Limited holding 6.99% and JPMorgan Chase Group holding 10.48% of the company's shares[107] Employee and Management - The group employed 39,385 full-time employees as of December 31, 2019, an increase of approximately 9% from 35,995 employees on December 31, 2018, primarily due to expansion in Nanning and Vietnam[114] - The company’s employee compensation is determined based on individual performance, qualifications, industry experience, and market trends[114] Audit and Compliance - The consolidated financial statements for the year were audited by Deloitte, and a resolution to reappoint Deloitte as the company's auditor will be presented at the annual general meeting[118] - The audit and risk committee is responsible for overseeing the implementation and regular review of the whistleblowing policy[196] - The company has adopted best practices in corporate governance, publishing quarterly financial results to provide shareholders with deeper insights into performance and business progress[149]