China Display Optoelectronics Technology Holdings Limited Announces 2017 Annual Results

Mar 26, 2018 19:45 JST

Source: China Display Optoelectronics Technology Holdings Limited

Net Profit Increased by 27.0% YOY
Further Develop High-end Products to Broaden Revenue Sources
Financial Highlights (Audited) https://bit.ly/2pEQFRJ

HONG KONG, Mar 26, 2018 - (Media OutReach) - China Display Optoelectronics Technology Holdings Limited ("Ch Display Opt" or the "Company", together with its subsidiaries, the "Group"; HKSE stock code: 334) today announces its results for the twelve months ended 30 December 2017 (the "Review Period").

During the Review Period, sales of the Group's high-end products, including in-cell LCD and on-cell LCD module products as well as low temperature poly-silicon ("LTPS") LCD module products grew steadily, which facilitated the growth of the average selling price from RMB49.4 for the same period last year to RMB64.9 for the Review Period, representing an increase of 31.5% year-on-year. During the Review Period, owing to the rise in total average selling price and the steady growth in the cost of major raw materials and upstream components, the Group's revenue remained relatively stable at RMB3.46 billion, representing a slight drop of 5.8% year-on-year. The Group reported gross profit of RMB280 million, representing an increase of 36.1% year-on-year. Gross profit margin was 8.1%, representing an increase of 2.5 percentage point; and profit attributable to owners of the parent amounted to RMB116 million, representing an increase of 27.0% year-on-year. Basic earnings per share was RMB5.75 cents, increased by 17.6% year-on-year. The Board proposed a final dividend of HK$2 cents per share.

During the Review Period, the Group recorded sales volume of LCD module products of 53.4 million units, representing a decline of 28.4%. The decrease was mainly attributable to the reduction of inventory by some smartphone manufacturers and the promotion of full-screen device products in the market during the first half of 2017, which resulted in the shortage of components across the upstream supply chain. The Group's sales volume was recovered in the third quarter, in addition to being affected by the delay of peak season to the fourth quarter, the sales volume in the second half year increased by 50.6%, comparing to the first half year. The revenue of non-laminated modules and laminated modules of the Group decreased by 2.9% and 7.4% respectively, which were affected by the decrease of sales volume.

Wuhan China Display Optoelectronics Technology Company Limited ("Wuhan CDOT"), the joint venture between the Group and Wuhan China Star Optoelectronics Technology Co., Ltd ("Wuhan CSOT"), officially commenced mass production in the fourth quarter of 2017. The production plate of Wuhan CDOT is located in the proximity of Wuhan CSOT's production plant which provides customers with one-stop solutions from panel to module. In terms of flexible panel supply, the main plant and power plant of Wuhan CSOT's the 6th generation flexible LTPS-AMOLED display panel production line ("Project t4") capped in advance in December 2017, and is expected to be in operation by the first half year of 2019 and commence mass production by the first half year of 2020. With the completion of the project, the supply chain of the upstream panel of the Group will be improved, and the competitiveness in small and medium size high-end displays, especially flexible displays, will also increase.

Given the market demand of full-screen products, the Group has endeavoured to initiate active research and development of relevant technologies. In July 2017, the Group was engaged by a renowned French mobile phone brand to manufacture full-screen module products, which was the first batch of official mass production nationally. So far, the Group has cooperated with Wuhan CSOT to develop a variety of full-screen LTPS products, and mastered the technology of notch-cutting. The Group will continue to take advantage of its excellent market responsiveness and commitment to continuous technology investment to boost its sales volume of full-screen module products and to meet market demand.

During the Review Period, the Group has entered into a MOU with Brightpro Resources Limited ("Brightpro Resources"), a wholly owned subsidiary of Taiwan-based prominent TFT-LCD products manufacturer HannStar Display Corporation Limited ("HannStar", 6116.TW), with regard to the possible acquisition of 51% to 81% interest in HannStar Display (Nanjing) Corporation ("HannStar Display (Nanjing)") ("Possible Acquisition") for the purposes of broadening revenue sources and improving the products' gross margin. Upon the materialisation of the Possible Acquisition, the Group will be able to acquire a major stake in HannStar Display (Nanjing). Having Brightpro Resources remained as a minority shareholder of HannStar Display (Nanjing) after the Possible Acquisition will also provide more opportunities for cooperation between the Group and HannStar, the mother company of Brightpro Resources.

In order to expand its product business, the Group partnered with Baidu whose smart home terminal incorporated the Company's display module for the first time has been officially launched.

Looking ahead, Mr. LI Jian, Chief Executive Officer of Ch Display Opt, said, "In 2018, a robust recovery is expected in the domestic and even the global economy, but the industry is still undergoing a period of consolidation with continuously fierce competition. The Group will proactively respond to market changes and strengthen our core capability in light of industry development, so as to keep on enhancing the Group's viability and competitiveness. With the increasingly stable panel supply from Wuhan CSOT, the Group expects substantial increase in the sales proportion of full-screen products, which will allow the Group to further expand its market share. In the meantime, the Group will also keenly branch into the automotive display modules market and the smart home terminal business so as to capture the opportunity brought forth by the Internet of Things, and lay a sound foundation for future operations, thus maximising the profit and value for the Group and its shareholders."

The Group's revenue and sales volume by product segments and their respective year-on-year change during the Review Period are as follows: https://bit.ly/2I19vJy

About China Display Optoelectronics Technology (334.HK)

Headquartered in China, China Display Optoelectronics Technology Holdings Limited (HKSE stock code: 334) is one of the major providers of small-to-medium-sized display modules in the region. Ch Display Opt engages primarily in the research and development, manufacturing, sales and distribution of LCD modules mainly for handheld mobile devices on an ODM basis. Smartphone LCD module products of Ch Display Opt are welcomed by domestic and overseas manufacturers with sales volume ranking among the top.

For more information, please visit its website at www.cdoth8.com.

Issued by Cornerstones Communications Ltd. on behalf of China Display Optoelectronics Technology Holdings Limited. For further information, please contact:

Cornerstones Communications Limited
Prudence Lai / Cham Chen / Sharon Kwok / Yesan Ma
Tel: (852) 2903 9291 / 2903 9299 / 2903 9288 / 2903 9297
Email: cdot@cornerstonescom.com

Source: China Display Optoelectronics Technology Holdings Limited