HUA HONG SEMICONDUCTOR LIMITED
華虹半導體有限公司
(Incorporated in Hong Kong with limited liability)
（於香港註冊成立之有限公司）
(Stock Code: 01347)
（股份代號：01347）
2024 INTERIM REPORT
中 期 報 告
DEFINITIONS
In this interim report, unless the context otherwise requires, the following terms shall have the meanings set out below.
“Board” the board of Directors of the Company;
“China” or “the PRC” the People’s Republic of China, but for the purpose of this interim report and
for geographical reference only, except where the context otherwise requires,
references in this interim report to “China” and the “PRC” do not include Taiwan, the
Macau Special Administrative Region and Hong Kong;
“Company” or “our Company” Hua Hong Semiconductor Limited, a company incorporated in Hong Kong with
limited liability on 21 January 2005 and, except where the context otherwise
requires, all of its subsidiaries, or its present subsidiaries where the context refers
to the time before it became the holding company of its present subsidiaries;
“Company Secretary” the company secretary of the Company;
“Director(s)” the director(s) of the Company;
“EPS” earnings per share;
“Executive Director(s)” the executive Director(s) of our Company;
“Group” our Company and our subsidiaries or, where the context so requires, the
businesses operated by our subsidiaries or their predecessors (as the case may
be) with respect to the period before our Company became the holding company of
our present subsidiaries (or became associated companies of our Company);
“HHGrace” Shanghai Huahong Grace Semiconductor Manufacturing Corporation* (
), a company incorporated in the PRC on 24 January 2013
and a wholly-owned subsidiary of the Company;
“Hua Hong Manufacturing” Hua Hong Semiconductor Manufacturing (Wuxi) Co., Ltd.* ( ( )
), a company incorporated in the PRC on 17 June 2022 and held as to 51%
by the Group;
“HK$” Hong Kong dollars, the lawful currency of Hong Kong;
“Hong Kong” the Hong Kong Special Administrative Region of the PRC;
“Hong Kong Stock Exchange” The Stock Exchange of Hong Kong Limited;
“IC” Integrated Circuit;
“Independent Non-Executive the independent non-executive Director(s) of our Company;
Director(s)”
INTERIM REPORT 2024 1
DEFINITIONS
“Listing Rules” the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong
Limited, as amended or supplemented from time to time;
“Model Code” the Model Code for Securities Transactions by Directors of Listed Issuers as set out
in Appendix C3 to the Listing Rules;
“Non-Executive Director(s)” the non-executive Director(s) of our Company;
“RMB” Renminbi, the lawful currency of the PRC;
“RMB Share(s)” or “A Share(s)” the ordinary share(s) of the Company which are listed on the STAR Market and
traded in RMB;
“RMB Share Issue” the Company’s issue of 407,750,000 RMB Shares, which have been listed on the
STAR Market since 7 August 2023;
“SFO” the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong), as
amended or supplemented from time to time;
“Shanghai Stock Exchange” the Shanghai Stock Exchange;
“STAR Market” the Science and Technology Innovation Board of the Shanghai Stock Exchange;
“US$” US dollars, the lawful currency of USA.
2 HUA HONG SEMICONDUCTOR LIMITED
CORPORATE INFORMATION
Board of Directors Hong Kong Legal Advisor
Executive Directors Herbert Smith Freehills
Suxin Zhang (Chairman) 23/F, Gloucester Tower
Junjun Tang (President) 15 Queen’s Road Central
Hong Kong, PRC
Non-Executive Directors
Jun Ye Principal Banks
Guodong Sun
Limin Zhou China Construction Bank Shanghai Branch
Chengyan Xiong No. 900, Lujiazui Ring Road
Pudong New Area
Independent Non-Executive Directors Shanghai, PRC
Stephen Tso Tung Chang
Kwai Huen Wong, JP China Development Bank Co., Ltd. Shanghai Branch
Songlin Feng No. 68, Puming Road
Pudong New Area
Company Secretary Shanghai, PRC
Sui Har Lee
China Merchants Bank Co., Ltd. Shanghai Branch
Authorized Representatives No.1088 Lujiazui Ring Road
Junjun Tang Pudong New Area
Sui Har Lee Shanghai, PRC
Audit Committee China Construction Bank Corporation Hong Kong
Stephen Tso Tung Chang (Chairman) Branch
Chengyan Xiong 28/F, CCB Tower, 3 Connaught Road, Central
Songlin Feng Hong Kong, PRC
Remuneration Committee Bank of Communications Co., Ltd. Hong Kong Branch
Kwai Huen Wong, JP (Chairman) 20 Pedder Street, Central
Jun Ye Hong Kong, PRC
Songlin Feng
China Development Bank Jiangsu Branch
Nomination Committee No. 232, Middle Jiangdong Road
Suxin Zhang (Chairman) Nanjing, Jiangsu, PRC
Kwai Huen Wong, JP
Songlin Feng Agricultural Bank of China Wuxi Xinwu Subbranch
No. 26, Hefeng Road, Xinwu District
Website Wuxi, Jiangsu, PRC
www.huahonggrace.com China Construction Bank Wuxi High and New
Technology Industrial Development Zone Subbranch
Auditor No. 26, Hefeng Road, Xinwu District
Wuxi, Jiangsu, PRC
Ernst & Young
Certified Public Accountants China CITIC Bank Wuxi New District Subbranch
27/F, One Taikoo Place No. 26, Hefeng Road, Xinwu District
979 King’s Road, Quarry Bay Wuxi, Jiangsu, PRC
Hong Kong, PRC
INTERIM REPORT 2024 3
CORPORATE INFORMATION
Bank of China Wuxi High and New Technology Industrial Stock Code
Development Zone Subbranch
No. 140, Wangzhuang Road, Xinwu District Hong Kong Stock Exchange: 01347
Wuxi, Jiangsu, PRC
Shanghai Stock Exchange: 688347
Bank of Communications Co., Ltd. Wuxi Branch
No.8, 2nd Financial Street, Binhu District
Wuxi, Jiangsu, PRC
Share Registrar
Hong Kong shares:
Tricor Investor Services Limited
17/F, Far East Finance Centre
16 Harcourt Road
Hong Kong, PRC
A shares:
China Securities Depository and Clearing Corporation
Limited, Shanghai Branch
No. 188 South Yanggao Road
Pudong New Area
Shanghai, PRC
Registered Office
Room 2212, Bank of America Tower
12 Harcourt Road, Central
Hong Kong, PRC
Principal Places of Business
288 Halei Road
Zhangjiang Hi-Tech Park
Shanghai, PRC
Postcode: 201203
No. 30, Xinzhou Road
Xinwu District
Wuxi, Jiangsu, PRC
Postcode: 214028
No.30-1, Xinzhou Road
Xinwu District
Wuxi, Jiangsu, PRC
Postcode: 214028
4 HUA HONG SEMICONDUCTOR LIMITED
KEY FINANCIALS
Revenue Gross prot margin
US$ million %
1,400 35.0%
1,262.2
1,215.5 30.3% 29.9%
1,200 30.0%
1,000 938.5 25.0%
800 20.0%
600 15.0%
400 10.0% 8.5%
200 5.0%
0 0.0%
1H 2022 1H 2023 1H 2024 1H 2022 1H 2023 1H 2024
Prot attributable to owners of the parent EPS
US$ million US$
250 0.20
230.8
0.176
0.18
200 186.9 0.16
0.144
0.14
150 0.12
0.10
100 0.08
0.06
50 38.5 0.04
0.022
0.02
0 0.00
1H 2022 1H 2023 1H 2024 1H 2022 1H 2023 1H 2024
INTERIM REPORT 2024 5
MANAGEMENT DISCUSSION AND ANALYSIS
Financial Performance
1H 2024 1H 2023 Change
US$’ 000 US$’000
Unaudited Unaudited
Revenue 938,510 1,262,223 (25.6)%
Cost of sales (858,815) (884,970) (3.0)%
Gross profit 79,695 377,253 (78.9)%
Other income and gains 71,095 50,679 40.3%
Selling and distribution expenses (4,770) (5,090) (6.3)%
Administrative expenses (164,078) (147,839) 11.0%
Other expenses (13,813) (46,126) (70.1)%
Finance costs (49,432) (56,700) (12.8)%
Share of profits of associates 2,805 3,504 (19.9)%
(Loss)/profit before tax (78,498) 175,681 (144.7)%
Income tax credit/(expense) 11,464 (26,945) (142.5)%
(Loss)/profit for the period (67,034) 148,736 (145.1)%
Attributable to:
Owners of the parent 38,491 230,758 (83.3)%
Non-controlling interests (105,525) (82,022) 28.7%
Revenue
Revenue was US$938.5 million, a decrease of 25.6% compared to 1H 2023, primarily due to decreased average
selling price.
Cost of sales
Cost of sales was US$858.8 million, a decrease of 3.0% compared to 1H 2023, primarily due to decreased labor costs
and reversal of inventories to net realisable value, partially offset by increased depreciation costs.
Gross pro t
Gross profit was US$79.7 million, a decrease of 78.9% compared to 1H 2023, primarily due to decreased average
selling price, capacity utilization and increased depreciation costs.
Other income and gains
Other income and gains were US$71.1 million, an increase of 40.3% compared to 1H 2023, primarily due to increased
interest income.
6 HUA HONG SEMICONDUCTOR LIMITED
MANAGEMENT DISCUSSION AND ANALYSIS
Selling and distribution expenses
Selling and distribution expenses were US$4.8 million, a decrease of 6.3% compared to 1H 2023, primarily due to
decreased labor expenses.
Administrative expenses
Administrative expenses were US$164.1 million, an increase of 11.0% compared to 1H 2023, primarily due to
increased operating expenses for Hua Hong Manufacturing and engineering wafer costs.
Other expenses
Other expenses were US$13.8 million, a decrease of 70.1% compared to 1H 2023, primarily due to decreased foreign
exchange losses.
Finance costs
Finance costs were US$49.4 million, a decrease of 12.8% compared to 1H 2023, primarily due to decreased interest
rate of bank borrowings.
Share of pro ts of associates
Share of profits of associates were US$2.8 million, a decrease of 19.9% compared to 1H 2023, due to decreased profit
realized by the associates.
Income tax credit/(expense)
Income tax credit was US$11.5 million, compared to income tax expenses of US$26.9 million in 1H 2023, primarily due
to decreased taxable profit.
(Loss)/pro t for the period
As a result of the cumulative effect of the above factors, loss for the period was US$67.0 million, compared to profit for
the period of US$148.7 million in 1H 2023.
INTERIM REPORT 2024 7
MANAGEMENT DISCUSSION AND ANALYSIS
Financial Status
30 June 31 December
2024 2023 Change
US$’ 000 US$’000
Unaudited Audited
Non-current assets
Property, plant and equipment 3,750,176 3,519,292 6.6%
Investment property 165,611 166,643 (0.6)%
Right-of-use assets 80,629 78,545 2.7%
Investment in associates 141,036 139,099 1.4%
Equity instruments designated at fair value
through other comprehensive income 285,938 270,506 5.7%
Other non-current assets 182,374 199,780 (8.7)%
Total non-current assets 4,605,764 4,373,865 5.3%
Current assets
Inventories 462,563 449,749 2.8%
Trade and notes receivables 274,382 278,669 (1.5)%
Due from related parties 16,034 11,219 42.9%
Other current assets 282,912 212,649 33.0%
Pledged deposits 39,259 32,088 22.3%
Cash and cash equivalents 6,423,866 5,585,181 15.0%
Total current assets 7,499,016 6,569,555 14.1%
Current liabilities
Trade payables 246,206 235,410 4.6%
Interest-bearing bank borrowings 247,034 193,035 28.0%
Due to related parties 8,340 13,876 (39.9)%
Government grants 39,359 35,017 12.4%
Other current liabilities 529,657 495,049 7.0%
Total current liabilities 1,070,596 972,387 10.1%
Net current assets 6,428,420 5,597,168 14.9%
Non-current liabilities
Interest-bearing bank borrowings 1,964,956 1,906,526 3.1 %
Lease liabilities 19,440 19,129 1.6 %
Deferred tax liabilities 4,892 30,834 (84.1)%
Total non-current liabilities 1,989,288 1,956,489 1.7 %
Net assets 9,044,896 8,014,544 12.9 %
8 HUA HONG SEMICONDUCTOR LIMITED
MANAGEMENT DISCUSSION AND ANALYSIS
Explanation of items with uctuation over 10% from 31 December 2023 to 30 June 2024
Due from related parties
Due from related parties increased from US$11.2 million to US$16.0 million, primarily due to increased rental
receivables from one of our related parties.
Other current assets
Other current assets increased from US$212.6 million to US$282.9 million, primarily due to increased value-added tax
credit.
Pledged deposits
Pledged deposits increased from US$32.1 million to US$39.3 million, primarily due to increased deposits for the
portion of dividend not paid yet on 30 June 2024.
Cash and cash equivalents
Cash and cash equivalents increased from US$5,585.2 million to US$6,423.9 million, mainly due to reasons stated in
the cash flow analysis below.
Due to related parties
Due to related parties decreased from US$13.9 million to US$8.3 million, primarily due to a payment of technology
purchased in the period.
Government grants
Government grants increased from US$35.0 million to US$39.4 million, primarily due to receipts from government for
research and development projects.
Interest-bearing bank borrowings
Total interest-bearing bank borrowings increased from US$2,099.6 million to US$2,212.0 million, due to increased
drawdowns of bank borrowings.
Deferred tax liabilities
Deferred tax liabilities decreased from US$30.8 million to US$4.9 million, primarily due to a reversal of dividend
withholding tax accrued for 2023.
INTERIM REPORT 2024 9
MANAGEMENT DISCUSSION AND ANALYSIS
Cash Flow
1H 2024 1H 2023 Change
US$’ 000 US$’000
Unaudited Unaudited
Net cash flows generated from operating activities 137,550 293,058 (53.1)%
Net cash flows used in investing activities (470,924) (353,930) 33.1 %
Net cash flows generated from/(used in)
financing activities 1,206,061 (36,934) (3,365.4)%
Net increase/(decrease) in cash and
cash equivalents 872,687 (97,806) (992.3)%
Cash and cash equivalents at beginning of the period 5,585,181 2,008,765 178.0 %
Effect of foreign exchange rate changes, net (34,002) (60,002) (43.3)%
Cash and cash equivalents at end of the period 6,423,866 1,850,957 247.1 %
Net cash ows generated from operating activities
Net cash flows generated from operating activities decreased from US$293.1 million to US$137.6 million, primarily due
to decreased revenue.
Net cash ows used in investing activities
Net cash flows used in investing activities were US$470.9 million, primarily including US$499.4 million for capital
investments and US$17.6 million for an equity instrument, partially offset by US$46.0 million of interest income and
US$0.1 million for disposal of items of property, plant and equipment.
Net cash ows generated from nancing activities
Net cash flows generated from financing activities were US$1,206.1 million, including (i) US$1,181.9 million of capital
contribution from non-controlling interests, (ii) US$202.4 million of proceeds from bank borrowings, and (iii) US$0.7
million from share option exercises, partially offset by (i) US$87.5 million of repayments of bank borrowings, (ii)
US$52.0 million of interest payments, (iii) dividend payments of US$28.9 million and (iv) US$3.2 million payment of
principal portion of lease payments.
Financial Resources
The Group adopts a prudent approach to cash and financial management to ensure proper risk control and low cost
of funds. The Group finances its operations primarily with internally generated cash flow and bank loans. As at 30
June 2024, the Group had cash and bank balances of approximately US$6,423.9 million (of which approximately
US$5,716.8 million were denominated in RMB and approximately US$700.0 million in US dollars), representing an
increase of US$838.7 million as compared to US$5,585.2 million at the end of 2023.
Liquidity
To meet liquidity requirements in the short and long term, our policy is to monitor regularly the current and expected
liquidity requirements to ensure that we maintain sufficient reserves of cash and adequate committed lines of funding
from major financial institutions.
10 HUA HONG SEMICONDUCTOR LIMITED
MANAGEMENT DISCUSSION AND ANALYSIS
Capital Management
Our primary objectives of capital management are to safeguard our ability to continue as a going concern and to
maintain healthy capital ratios to support our business and maximize shareholders’ value. We manage our capital
structure and make adjustments in light of the changes in economic conditions. To do this, we may adjust the dividend
payment to shareholders, return capital to shareholders, or issue new shares. We are not subject to any externally
imposed capital requirements. No changes were made in the objectives, policies, or processes for managing capital
during the six months ended 30 June 2024.
Bank Loans
The particulars of bank loans of the Group as at 30 June 2024 are set out as below:
30 June 2024 31 December 2023
US$’ 000 US$’000
Current
Current portion of long term bank loans – secured 244,008 193,035
Current portion of long term bank loans – unsecured 3,026 –
247,034 193,035
Non-current
Secured bank loans 1,740,373 1,786,526
Unsecured bank loans 224,583 120,000
1,964,956 1,906,526
2,211,990 2,099,561
The Group is dedicated to improving financing method. As at 30 June 2024, the Group had outstanding bank
borrowings of US$2,212.0 million, compared to US$2,099.6 million as at the end of 2023. The bank borrowings
included secured interest-bearing borrowings of US$1,984.4 million and unsecured interest-bearing borrowings of
US$227.6 million. Bank borrowing of US$253.6 million had fixed interest rates ranging from 1.2% to 2.3% per annum.
Except for bank loans of US$1,586.1 million were denominated in US$, all borrowings are denominated in RMB.
Charges on Group Assets
As at 30 June 2024, certain of Group’s property, plant and equipment with a net carrying value of US$2,187,134,000
(31 December 2023: US$1,487,211,000), right-of-use assets of US$47,248,000 (31 December 2023: US$44,319,000),
properties under development of US$86,029,000 (31 December 2023: US$86,565,000) and pledged deposits of
US$30,869,000 (31 December 2023: US$31,062,000) were pledged to banks to secure the Group’s banking facilities.
Pledged deposits with a carrying value of US$304,000 as at 30 June 2024 (31 December 2023: US$306,000) were
pledged to secure the issuance of letters of credit.
Other pledged deposits with a carrying value of US$7,395,000 as at 30 June 2024 (31 December 2023: US$27,000)
were pledged to secure the payment of dividends to shareholders.
INTERIM REPORT 2024 11
MANAGEMENT DISCUSSION AND ANALYSIS
Exposure to Fluctuations in Exchange Rates
We have transactional currency exposures, arising primarily from sales or purchases by our significant subsidiaries
operating in Mainland China in US$ rather than the subsidiary’s functional currency, which is RMB. During the six
months ended 30 June 2024, approximately 20% of our sales were denominated in currencies other than the functional
currency of the subsidiary making the sale, whilst 70% of costs of sales were denominated in the subsidiary’s
functional currency.
In addition, we have currency exposures from interest-bearing bank borrowings, held by our subsidiary operating in
Mainland China. As at 30 June 2024, interest-bearing bank borrowings with a carrying amount of US$1,586.1 million
were denominated in US$, instead of the subsidiary’s functional currency, which is RMB.
As at 30 June 2024, if the US dollar had strengthened or weakened against the RMB by 5%, with all other variables
held constant, our profit before tax for the period would have been approximately US$35.0 million lower or higher.
For the six months ended 30 June 2024, the Group had not entered into any arrangement to hedge the aforementioned
foreign currency risks. Nevertheless, the Company’s management will continue to monitor the foreign exchange
exposure position and will consider appropriate measures should the need arise.
Contingent Liabilities
As at 30 June 2024, the Group did not have any contingent liabilities.
RMB Share Issue
On 7 August 2023, the Company was listed on the STAR Market of the Shanghai Stock Exchange, pursuant to which a
total of 407,750,000 ordinary shares of the Company were issued.
The total proceeds raised in the RMB Share Issue amounted to RMB21,203 million. After deducting the issuance
expenses, including underwriting, sponsorship fees, as well as other issuance expenses, the net proceeds amounted
to RMB20,920.7 million. Upon receipt of the proceeds, the entire amount has been deposited into a dedicated account
for the proceeds, which was approved by the Board. The proceeds raised will be utilised in accordance with the
previously disclosed intended use of the proceeds as set out below:
Unit: RMB’000
Amount of Accumulated Expected timeframe
Previously disclosed intended committed unutilised proceeds for usage of
use of proceeds investments as at 30 June 2024 unutilised proceeds
Hua Hong Manufacturing (Wuxi) Project 12,500,000 9,705,574 By the end of 2025
8-Inch Factory Optimisation and Upgrading 2,000,000 1,891,860 By the end of 2025
Project
Specialty Technological Innovation, 2,500,000 2,071,467 By the end of 2026
Research and Development Project
Replenishment of Working Capital 1,000,000 0 N/A
Apart from the above, the surplus proceeds of RMB2,921 million raised from the RMB Share Issue will also be used for
the Group’s business operations upon obtaining the necessary approvals in accordance with relevant regulations.
During the six months ended 30 June 2024, the proceeds from the RMB Share Issue were used, and were proposed
to be used, according to the intentions previously disclosed by the Company in the prospectus, and there was no
material change or delay in the use of proceeds.
12 HUA HONG SEMICONDUCTOR LIMITED
MANAGEMENT DISCUSSION AND ANALYSIS
Business Review
In the first half of 2024, the global economy continued to recover after the spillover risks from the pandemic and
geopolitical conflicts. The global economy maintained a good growth trend, however, inflationary pressures recurred.
For the overall semiconductor market, the demand trend of some domestic supply chains was improving, however,
the supply-side competition was intensifying, there were regional and product differences in recovery, terminal
inventories were still at high levels, and the fragility of recovery still existed. In the first half of 2024, benefiting from
the advantages of our “8-inch + 12-inch” strategy, product competitiveness and continuous innovation of specialty
process technologies, the beliefs of “Courage, Perseverance and Unity” upheld by our entire workforce and joint
efforts with customers, our Company’s capacity utilization rate has gradually increased. The 8-inch capacity utilization
rate exceeded 100% while 12-inch capacity utilization rate approached full production in the second quarter, and
revenue has shown positive quarter-on-quarter growth for two consecutive quarters. In particular, the performance of
the analog and power management platform was especially impressive.
Benefiting from the localization of consumer ICs such as mobile phones and the booming development of some
downstream markets, the overall product demand for IC process platforms improved, and the shipments and revenue
of each process platform in the first half of 2024 showed a growth trend compared to that in the second half of
2023. The Embedded/Standalone Non-Volatile Memory (eNVM/Standalone NVM) process platforms continued to
maintain rapid growth in both R&D and sales, with MCU and smart card IC products advancing in tandem. The 40nm
specialty process platform has successfully started small-scale pilot production, with a continuous enrichment of
product categories. The 65/90nm BCD platform business has developed smoothly, with strong end-user demand and
significant growth in shipment volume in the first half of the year.
Due to the competitive pressure gradually released from the industry’s expansion of production capacity, as well as
the impact of inventory adjustments in automotive electronics and new energy terminals, the overall power discrete
devices sector was facing a severe market situation. Our Company’s high-end power discrete devices have faced
double pressure on demand and price since the end of 2023. In the first half of 2024, the revenue of high-end power
discrete devices IGBT and superjunction MOSFET experienced some declines. However, customers still maintain good
intentions for the development of new products, which may be reflected from the introduction of new products, and the
number of new industrial and automotive-related products has continued to grow, showing no signs of decline.
In addition, the Company actively carries out ecological chain construction to serve the national strategy, which
promotes the coordinated development with the industrial chain of terminal application companies and IC design
customers, and establishes a sustainable industrial ecosystem. In the first half of 2024, a number of ecological chain
construction activities were carried out in the fields of automotive electronics, high-end consumption and new energy,
and cooperation at the business level was gradually expanded.
A groundbreaking ceremony for the Hua Hong Manufacturing project was held on 30 June 2023. The project has a
planned monthly production capacity of 83,000 wafers, with a focus on advanced specialty ICs and high-end power
discrete devices, and process manufacturing platforms capable of producing automotive-grade products. At present,
the construction unit and the engineering R&D team are refining and pushing forward the implementation of various
key nodes. The project has completed the structural topping-out of the main plant in April 2024, two months ahead
of schedule, and is expected to commence equipment move-in in the third quarter, achieve operational status of
production line in the fourth quarter, and release production capacity from 2025 onwards.
In the second half of 2024, the semiconductor situation will remain complicated and unclear, and the recovery of
the IC industry will coexist with challenges. The Company will continue to advance production capacity, accelerate
process development, and strive to cover a wider range of product categories; continue to pay close attention to end
market trends, unswervingly promote its diversified development strategy, deploy more advanced “Specialty IC +
Power Discrete” technologies in our “8-inch + 12-inch” production platforms, and provide global customers with more
comprehensive and excellent technologies and services in the specialty wafer foundry field.
INTERIM REPORT 2024 13
MANAGEMENT DISCUSSION AND ANALYSIS
Signi cant Investment
The Company did not hold any significant investment (with a value of 5% or more of the Company’s total assets) as of
30 June 2024.
Future Plans for Material Investments and Capital Assets
Save as disclosed in this interim report, the Group did not have other concrete plans for material investments or capital
assets as of 30 June 2024.
14 HUA HONG SEMICONDUCTOR LIMITED
EPS
51%
IC
2024 15
C3
A
407,750,000
571
16
15
23
900
68
1088
3 28
20
232
26
www.huahonggrace.com
26
26
979
27
2024 17
140 01347
688347
8
16
17
A
188
12
2212
288
201203
30
214028
30-1
214028
18
銷售收入 毛利率
百萬美元 %
1,400 35.0%
1,262.2
1,215.5 30.3% 29.9%
1,200 30.0%
1,000 938.5 25.0%
800 20.0%
600 15.0%
400 10.0% 8.5%
200 5.0%
0 0.0%
二零二二年 二零二三年 二零二四年 二零二二年 二零二三年 二零二四年
上半年 上半年 上半年 上半年 上半年 上半年
母公司擁有人應佔溢利 每股盈利
百萬美元 美元
250 0.20
230.8
0.176
0.18
200 186.9 0.16
0.144
0.14
150 0.12
0.10
100 0.08
0.06
50 38.5 0.04
0.022
0.02
0 0.00
二零二二年 二零二三年 二零二四年 二零二二年 二零二三年 二零二四年
上半年 上半年 上半年 上半年 上半年 上半年
2024 19
938,510 1,262,223 (25.6)%
(858,815) (884,970) (3.0)%
79,695 377,253 (78.9)%
71,095 50,679 40.3%
(4,770) (5,090) (6.3)%
(164,078) (147,839) 11.0%
(13,813) (46,126) (70.1)%
(49,432) (56,700) (12.8)%
2,805 3,504 (19.9)%
(78,498) 175,681 (144.7)%
11,464 (26,945) (142.5)%
(67,034) 148,736 (145.1)%
38,491 230,758 (83.3)%
(105,525) (82,022) 28.7%
9.385 25.6%
8.588 3.0%
7,970 78.9%
7,110 40.3%
20
480 6.3%
1.641 11.0%
1,380 70.1%
4,940 12.8%
280 19.9%
1,150 2,690
6,700 1.487
2024 21
3,750,176 3,519,292 6.6%
165,611 166,643 (0.6)%
80,629 78,545 2.7%
141,036 139,099 1.4%
285,938 270,506 5.7%
182,374 199,780 (8.7)%
4,605,764 4,373,865 5.3%
462,563 449,749 2.8%
274,382 278,669 (1.5)%
16,034 11,219 42.9%
282,912 212,649 33.0%
39,259 32,088 22.3%
6,423,866 5,585,181 15.0%
7,499,016 6,569,555 14.1%
246,206 235,410 4.6%
247,034 193,035 28.0%
8,340 13,876 (39.9)%
39,359 35,017 12.4%
529,657 495,049 7.0%
1,070,596 972,387 10.1%
6,428,420 5,597,168 14.9%
1,964,956 1,906,526 3.1 %
19,440 19,129 1.6 %
4,892 30,834 (84.1)%
1,989,288 1,956,489 1.7 %
9,044,896 8,014,544 12.9 %
22
10%
1,120 1,600
2.126 2.829
3,210 3,930
55.852 64.239
1,390 830
3,500 3,940
20.996 22.120
3,080 490
2024 23
137,550 293,058 (53.1)%
(470,924) (353,930) 33.1 %
1,206,061 (36,934) (3,365.4)%
872,687 (97,806) (992.3)%
5,585,181 2,008,765 178.0 %
(34,002) (60,002) (43.3)%
6,423,866 1,850,957 247.1 %
2.931 1.376
4.709 4.994 1,760
4,600 10
12.061 (i) 11.819 (ii) 2.024 (iii)
70 (i) 8,750 (ii) 5,200 (iii) 2,890
(iv) 320
64.239 57.168
7.000 55.852 8.387
24
244,008 193,035
3,026 –
247,034 193,035
1,740,373 1,786,526
224,583 120,000
1,964,956 1,906,526
2,211,990 2,099,561
22.120
20.996 19.844 2.276 2.536
1.2% 2.3% 15.861
2,187,134,000 1,487,211,000
47,248,000 44,319,000 86,029,000
86,565,000 30,869,000
31,062,000
304,000 306,000
7,395,000 27,000
2024 25
20%
70%
15.861
5%
3,500
407,750,000
212.03
209.207
12,500,000 9,705,574
8 2,000,000 1,891,860
2,500,000 2,071,467
1,000,000 0
29.21
26
8 +12
8 100% 12
IC IC
(eNVM/Standalone NVM)
MCU IC 40 65/90
BCD
IGBT MOSFET
IC
8.3 IC
2
IC
IC
+ 8 +12
2024 27
5%
28
REPORT ON REVIEW OF INTERIM CONDENSED
CONSOLIDATED FINANCIAL INFORMATION
To the board of directors of Hua Hong Semiconductor Limited
(Incorporated in Hong Kong with limited liability)
Introduction
We have reviewed the interim financial information set out on 29 59
pages 29 to 59 which comprises the condensed consolidated
statement of financial position of Hua Hong Semiconductor Limited
(the “Company”) and its subsidiaries (collectively referred to
as the “Group”) as at 30 June 2024 and the related condensed
consolidated statements of profit or loss, comprehensive income,
changes in equity and cash flows for the six-month period then
ended, and explanatory notes. The Rules Governing the Listing of
Securities on The Stock Exchange of Hong Kong Limited require
the preparation of a report on interim financial information to be in 34
compliance with the relevant provisions thereof and Hong Kong 34
Accounting Standard 34 Interim Financial Reporting (“HKAS 34”)
issued by the Hong Kong Institute of Certified Public Accountants 34
(“HKICPA”). The directors of the Company are responsible for the
preparation and presentation of this interim financial information
in accordance with HKAS 34. Our responsibility is to express a
conclusion on this interim financial information based on our review.
Our report is made solely to you, as a body, in accordance with our
agreed terms of engagement, and for no other purpose. We do not
assume responsibility towards or accept liability to any other person
for the contents of this report.
Scope of Review
We conducted our review in accordance with Hong Kong Standard
on Review Engagements 2410 Review of Interim Financial 2410
Information Performed by the Independent Auditor of the Entity
issued by the HKICPA. A review of interim financial information
consists of making inquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other
review procedures. A review is substantially less in scope than
an audit conducted in accordance with Hong Kong Standards on
Auditing and consequently does not enable us to obtain assurance
that we would become aware of all significant matters that might
be identified in an audit. Accordingly, we do not express an audit
opinion.
Conclusion
Based on our review, nothing has come to our attention that causes
us to believe that the interim financial information is not prepared, in
all material respects, in accordance with HKAS 34. 34
Certified Public Accountants
Hong Kong
29 August 2024
2024 INTERIM REPORT 2024 29
INTERIM CONDENSED CONSOLIDATED STATEMENT OF
PROFIT OR LOSS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
For the six months ended
30 June
2024 2023
(Unaudited) (Unaudited)
Notes (US$’000) (US$’000)
Revenue 4 938,510 1,262,223
Cost of sales (858,815) (884,970)
Gross profit 79,695 377,253
Other income and gains 71,095 50,679
Selling and distribution expenses 4 (4,770) (5,090)
Administrative expenses (164,078) (147,839)
Other expenses (13,813) (46,126)
Finance costs (49,432) (56,700)
Share of profits of associates 2,805 2,805
3,504
(LOSS)/PROFIT BEFORE TAX 5 (78,498) 175,681
Income tax credit/(expense) 6 11,464 (26,945)
(LOSS)/PROFIT FOR THE PERIOD (67,034) 148,736
Attributable to:
Owners of the parent 38,491 230,758
Non-controlling interests (105,525) (82,022)
(67,034) 148,736
EARNINGS PER SHARE
ATTRIBUTABLE TO ORDINARY
EQUITY HOLDERS OF THE PARENT: 7
Basic
– For profit for the period US$0.022 US$0.176
0.022 0.176
Diluted
– For profit for the period US$0.022 US$0.175
0.022 0.175
30 HUA HONG SEMICONDUCTOR LIMITED
INTERIM CONDENSED CONSOLIDATED STATEMENT OF
COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED 30 JUNE 2024
For the six months ended
30 June
2024 2023
(Unaudited) (Unaudited)
US$’000 US$’000
(LOSS)/PROFIT FOR THE PERIOD (67,034) 148,736
OTHER COMPREHENSIVE LOSS
Other comprehensive loss that may be
reclassified to profit or loss in subsequent
periods:
Exchange differences on translation of foreign
operations (49,338) (169,717)
Net other comprehensive loss that may be
reclassified to profit or loss in subsequent
periods (49,338) (169,717)
Other comprehensive loss that will not be
reclassified to profit or loss in subsequent
periods:
Equity investments designated at fair value
through other comprehensive income:
Changes in fair value (436) (20,548)
Income tax effect 65 3,082
Net other comprehensive loss that will not be
reclassified to profit or loss in subsequent
periods (371) (17,466)
OTHER COMPREHENSIVE LOSS FOR
THE PERIOD, NET OF TAX (49,709) (187,183)
TOTAL COMPREHENSIVE LOSS FOR
THE PERIOD (116,743) (38,447)
Attributable to:
Owners of the parent 3,062 95,074
Non-controlling interests (119,805) (133,521)
(116,743) (38,447)
2024 INTERIM REPORT 2024 31
INTERIM CONDENSED CONSOLIDATED STATEMENT OF
FINANCIAL POSITION
30 JUNE 2024
30 June 31 December
2024 2023
(Unaudited) (Audited)
Notes (US$’000) (US$’000)
NON-CURRENT ASSETS
Property, plant and equipment 9 3,750,176 3,519,292
Right-of-use assets 80,629 78,545
Investment property 165,611 166,643
Intangible assets 42,320 49,827
Investment in associates 141,036 139,099
Equity instruments designated at fair value
through other comprehensive income 285,938 270,506
Long term prepayments 139,425 149,953
Deferred tax assets 629 –
Total non-current assets 4,605,764 4,373,865
CURRENT ASSETS
Properties under development 207,151 178,828
Inventories 462,563 449,749
Trade and notes receivables 10 274,382 278,669
Prepayments, other receivables and
other assets 75,761 33,821
Due from related parties 16,034 11,219
Pledged deposits 39,259 32,088
Cash and cash equivalents 6,423,866 5,585,181
Total current assets 7,499,016 6,569,555
CURRENT LIABILITIES
Trade payables 11 246,206 235,410
Other payables and accruals 505,945 430,478
Interest-bearing bank borrowings 247,034 193,035
Lease liabilities 4,674 3,076
Government grants 39,359 35,017
Due to related parties 8,340 13,876
Income tax payable 19,038 61,495
Total current liabilities 1,070,596 972,387
NET CURRENT ASSETS 6,428,420 5,597,168
TOTAL ASSETS LESS CURRENT
LIABILITIES 11,034,184 9,971,033
continued/
32 HUA HONG SEMICONDUCTOR LIMITED
INTERIM CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL
POSITION
30 JUNE 2024
30 June 31 December
2024 2023
(Unaudited) (Audited)
Notes (US$’000) (US$’000)
NON-CURRENT LIABILITIES
Interest-bearing bank borrowings 1,964,956 1,906,526
Lease liabilities 19,440 19,129
Deferred tax liabilities 4,892 30,834
Total non-current liabilities 1,989,288 1,956,489
Net assets 9,044,896 8,014,544
EQUITY
Equity attributable to owners of the
parent
Share capital 12 4,935,470 4,933,559
Reserves 1,333,799 1,367,436
Total equity attributable to owners of the
parent 6,269,269 6,300,995
Non-controlling interests 2,775,627 1,713,549
Total equity 9,044,896 8,014,544
Suxin Zhang Jun Ye
Director Director
2024 INTERIM REPORT 2024 33
INTERIM CONDENSED CONSOLIDATED STATEMENT OF
CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 30 JUNE 2024
Attributable to owners of the parent
Share
of other Other
Share comprehensive reserve and Asset Statutory Exchange
Share Merger option income of contributed Fair value revaluation reserve fluctuation Retained Non-controlling Total
capital reserve reserve associates surplus reserve reserve# fund reserve profits Total interests equity
#
US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000
(note 12)
12
At 1 January 2024
4,933,559 645,494* 12,794* 1,352* 35,685* 58,435* 99,257* 233,042* (60,233)* 341,610* 6,300,995 1,713,549 8,014,544
Profit/(loss) for the period – – – – – – – – – 38,491 38,491 (105,525) (67,034)
Other comprehensive l ss
for the period:
Change i fair value of
equity i vestments
designated at fair
value through other
comprehensive
i come, net of tax – – – – – (371) – – – – (371) – (371)
Exchange differences
on translation of
foreign operations – – – – – – – – (35,058) – (35,058) (14,280) (49,338)
Total comprehensive (loss)/
i come for the period – – – – – (371) – – (35,058) 38,491 3,062 (119,805) (116,743)
Div dend declared – – – – – – – – (36,233) (36,233) – (36,233)
Issue of shares (note 12) 12 1,911 – (474) – – – – – – – 1,437 – 1,437
Equity-settled share option
arrangements – – 8 – – – – – – – 8 3 11
Capital contribution from
non-control i g i terests – – – – – – – – – – – 1,181,880 1,181,880
Transfer from retained
profits generated by a
subsid ary – – – – – – – 11,870 – (11,870) – – –
At 30 June 2024
(unaudited) 4,935,470 645,494* 12,328* 1,352* 35,685* 58,064* 99,257* 244,912* (95,291)* 331,998* 6,269,269 2,775,627 9,044,896
At 1 January 2023
1,994,462 645,494 13,346 – 35,685 (22,247) 99,257 191,125 (30,145) 103,493 3,030,470 1,104,998 4,135,468
Profit/(loss) for the period – – – – – – – – – 230,758 230,758 (82,022) 148,736
Other comprehensive l ss
for the period:
Change i fair value of
equity i vestments
designated at fair
value through other
comprehensive
i come, net of tax – – – – – (17,466) – – – – (17,466) – (17,466)
Exchange differences
on translation of
foreign operations – – – – – – – – (118,218) – (118,218) (51,499) (169,717)
Total comprehensive (loss)/
i come for the period – – – – – (17,466) – – (118,218) 230,758 95,074 (133,521) (38,447)
Issue of shares (note 12) 12 3,367 – (822) – – – – – – – 2,545 – 2,545
Equity-settled share option
arrangements – – 107 – – – – – – – 107 33 140
Capital contribution from
non-control i g i terests – – – – – – – – – – – 295,470 295,470
Transfer from retained
profits generated by a
subsid ary – – – – – – – 29,259 – (29,259) – – –
At 30 June 2023
(unaudited) 1,997,829 645,494 12,631 – 35,685 (39,713) 99,257 220,384 (148,363) 304,992 3,128,196 1,266,980 4,395,176
34 HUA HONG SEMICONDUCTOR LIMITED
INTERIM CONDENSED CONSOLIDATED STATEMENT OF CHANGES
IN EQUITY
FOR THE SIX MONTHS ENDED 30 JUNE 2024
#
The asset revaluation reserve arose from a change in use from an #
owner-occupied property to an investment property carried at fair
value.
* These reserve accounts comprise the consolidated reserves of *
US$1,333,799,000 (31 December 2023: US$1,367,436,000) in the 1,333,799,000
interim condensed consolidated statement of financial position. 1,367,436,000
2024 INTERIM REPORT 2024 35
INTERIM CONDENSED CONSOLIDATED STATEMENT OF
CASH FLOWS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
FOR THE SIX MONTHS
ENDED 30 JUNE
2024 2023
(Unaudited) (Unaudited)
(US$’000) (US$’000)
CASH FLOWS FROM OPERATING ACTIVITIES
(Loss)/profit before tax (78,498) 175,681
Adjustments for:
Finance costs 49,432 56,700
Share of profits of associates (2,805) (3,504)
Interest income (54,808) (25,421)
Loss on disposal of items of property, plant and
equipment 42 16
Depreciation of property, plant and equipment 258,527 234,954
Amortisation of intangible assets 8,272 5,836
Depreciation of right-of-use assets 3,170 3,209
(Reversal of impairment)/impairment of trade
receivables (438) 319
Equity-settled share option expense 11 140
182,905 447,930
(Increase)/decrease in inventories (12,814) 43,287
Increase in properties under development (28,323) (8,951)
Decrease/(increase) in trade and notes receivables 4,740 (19,113)
(Increase)/decrease in prepayments, other
receivables and other assets (32,387) 17,084
Increase in amounts due from related parties (4,815) (3,797)
Increase in pledged deposits (198) –
Increase/(decrease) in trade payables 10,796 (9,092)
Increase/(decrease) in other payables and accruals 75,872 (99,536)
Increase/(decrease) in government grants 4,582 (1,873)
Decrease in amounts due to related parties (5,536) (1,376)
Cash generated from operations 194,822 364,563
Income tax paid (57,272) (71,505)
Net cash flows generated from
operating activities 137,550 293,058
continued/
36 HUA HONG SEMICONDUCTOR LIMITED
INTERIM CONDENSED CONSOLIDATED STATEMENT OF CASH
FLOWS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
FOR THE SIX MONTHS
ENDED 30 JUNE
2024 2023
(Unaudited) (Unaudited)
(US$’000) (US$’000)
CASH FLOWS FROM INVESTING ACTIVITIES
Interest received 45,990 27,646
Purchases of items of property, plant and equipment,
prepaid lease payment and intangible assets
(499,404) (381,586)
Purchase of an equity investment designated at fair
value through other comprehensive income (17,618) –
Proceeds from disposal of items of property,
plant and equipment 108 10
Net cash flows used in investing activities (470,924) (353,930)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from bank borrowings 202,447 21,088
Proceeds from issue of shares 693 2,849
Capital contribution from non-controlling interests 1,181,880 296,197
Repayment of bank loans (87,530) (128,092)
Increase in pledged deposits (7,369) (167,738)
Interest paid (51,955) (57,533)
Principal portion of lease payments (3,229) (3,093)
Dividends paid (28,876) –
Payment of share issued expense – (612)
Net cash flows generated from/(used in)
financing activities 1,206,061 (36,934)
NET INCREASE/(DECREASE) IN CASH AND CASH
EQUIVALENTS 872,687 (97,806)
Cash and cash equivalents at beginning of period 5,585,181 2,008,765
Effect of foreign exchange rate changes, net (34,002) (60,002)
CASH AND CASH EQUIVALENTS AT END OF
PERIOD 6,423,866 1,850,957
2024 INTERIM REPORT 2024 37
NOTES TO THE INTERIM CONDENSED
CONSOLIDATED FINANCIAL INFORMATION
30 June 2024
1. CORPORATE INFORMATION 1.
Hua Hong Semiconductor Limited (the “Company”) is a limited
liability company incorporated in Hong Kong on 21 January
2005. The registered office of the Company is located at Room
2212, Bank of America Tower, 12 Harcourt Road, Central, 12
Hong Kong. 2212
The principal activity of the Company is investment holding.
During the period, the Company’s subsidiaries (collectively
refer to as the “Group”) were principally engaged in the
manufacture and trading of semiconductor products.
In the opinion of the directors, the parent of the Company is
Shanghai Huahong (Group) Co., Ltd. (“Huahong Group”),
which is a state-owned company established in the People’s
Republic of China (“PRC”) and supervised by the Shanghai
State-owned Assets Supervision and Administration
Commission (“Shanghai SASAC”). The ultimate parent of the
Company is Shanghai SASAC.
2.1 BASIS OF PREPARATION 2.1
The interim condensed consolidated financial information for
the six months ended 30 June 2024 has been prepared in
accordance with HKAS 34 Interim Financial Reporting . The 34
interim condensed consolidated financial information does
not include all the information and disclosures required in the
annual financial statements, and should be read in conjunction
with the Group’s annual consolidated financial statements for
the year ended 31 December 2023.
The financial Information relating to the year ended 31
December 2023 that is included in the interim condensed
consolidated statement of financial position as comparative
information does not constitute the Company’s statutory annual
consolidated financial statements for that year but is derived
from those financial statements. Further information relating to 436
those statutory financial statements required to be disclosed
in accordance with section 436 of the Hong Kong Companies
Ordinance is as follows:
38 HUA HONG SEMICONDUCTOR LIMITED
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL
INFORMATION
30 June 2024
2.1 BASIS OF PREPARATION (CONTINUED) 2.1
The Company has delivered the financial statements for the 662(3)
year ended 31 December 2023 to the Registrar of Companies 6 3
as required by section 662(3) of, and Part 3 of Schedule 6 to,
the Hong Kong Companies Ordinance. The Company’s auditor
has reported on the financial statements for the year ended 31
December 2023. The auditor’s report was unqualified; did not
include a reference to any matters to which the auditor drew
attention by way of emphasis without qualifying its report; and
did not contain a statement under sections 406(2), 407(2) or
407(3) of the Hong Kong Companies Ordinance. 406(2) 407(2)
407(3)
2.2 CHANGES IN ACCOUNTING POLICIES AND 2.2
DISCLOSURES
The accounting policies adopted in the preparation of the
interim condensed consolidated financial information are
consistent with those applied in the preparation of the Group’s
annual consolidated financial statements for the year ended
31 December 2023, except for the adoption of the following
new and revised Hong Kong Financial Reporting Standards
(“HKFRSs”) for the first time for the current period’s financial
information.
Amendments to Lease Liability in a Sale and 16
HKFRS 16 Leaseback
Amendments to Classification of Liabilities as 1
HKAS 1 Current or Non-current 1
Amendments to Non-current Liabilities with 7
HKAS 1 Covenants 7
Amendments to Supplier Finance Arrangements
HKAS 7 and HKFRS 7
The adoption of above revised standards has no significant
financial effect to the Group’s interim condensed consolidated
financial information.
2024 INTERIM REPORT 2024 39
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL
INFORMATION
30 June 2024
3. OPERATING SEGMENT INFORMATION 3.
For management purposes, the Group is organised into one
single business unit that includes primarily the manufacture
and sale of semiconductor products. Management reviews the
consolidated results when making decisions about allocating
resources and assessing the performance of the Group.
Accordingly, no segment analysis is presented.
The principal assets employed by the Group are located in
the PRC. Therefore, no segment information based on the
geographical location of assets is presented for the period.
Revenues are attributed to geographic areas based on the
location of customers. Revenues regarding geographical
segments based on the location of customers for the period
are presented as follows:
For the six months
ended 30 June
2024 2023
(Unaudited) (Unaudited)
(US$’000) (US$’000)
China (including Hong Kong) 751,214 966,424
North America 93,070 119,307
Asia (excluding China and Japan) 51,703 84,248
Europe 38,912 77,309
Japan 3,611 14,935
Total 938,510 1,262,223
40 HUA HONG SEMICONDUCTOR LIMITED
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL
INFORMATION
30 June 2024
4. REVENUE AND OTHER INCOME AND GAINS 4.
An analysis of revenue and other income and gains is as
follows:
For the six months
ended 30 June
2024 2023
(Unaudited) (Unaudited)
(US$’000) (US$’000)
Revenue from contracts with customers
Sale of goods 938,510 1,262,223
Other income and gains
Rental income 7,118 7,384
Interest income 54,808 25,421
Government subsidies 8,577 15,001
Others 592 2,873
71,095 50,679
2024 INTERIM REPORT 2024 41
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL
INFORMATION
30 June 2024
4. REVENUE AND OTHER INCOME AND GAINS 4.
(CONTINUED)
An analysis of revenue and other income and gains is as
follows: (continued)
For the six months
ended 30 June
2024 2023
(Unaudited) (Unaudited)
(US$’000) (US$’000)
Type of goods or service
Sales of semiconductor products and total
revenue from contracts with customers 938,510 1,262,223
Timing of revenue recognition
Goods transferred at a point in time and total
revenue from contracts with customers 938,510 1,262,223
The disaggregation of the Group’s revenue based on the
geographical region for the six months ended 30 June 2024 is
included in note 3. 3
5. PROFIT BEFORE TAX 5.
The Group’s profit before tax is arrived at after charging/
(crediting):
For the six months
ended 30 June
2024 2023
(Unaudited) (Unaudited)
(US$’000) (US$’000)
Cost of inventories sold 858,815 884,970
(Reversal of write-down)/write-down of
inventories to net realisable value (8,237) 20,697
(Reversal of impairment)/impairment of
trade receivables (438) 319
Exchange differences, net 13,770 46,110
42 HUA HONG SEMICONDUCTOR LIMITED
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL
INFORMATION
30 June 2024
6. INCOME TAX 6.
Profits arising in Hong Kong were subject to profits tax at the 16.5%
rate of 16.5% during the period (six months ended 30 June
2023: 16.5%). No provision for Hong Kong profits tax has been 16.5%
made as the Company and a subsidiary incorporated in Hong
Kong had no assessable income during the period (six months
ended 30 June 2023: Nil).
The Company’s subsidiary incorporated in the Cayman Islands
is not subject to corporate income tax (“CIT”) as it does not
have a place of business (other than a registered office) or
carry on any business in the Cayman Islands.
All of the Group’s subsidiaries registered in the PRC and have
operations in Mainland China are subject to PRC enterprise
income tax on the taxable income as reported in their PRC
statutory accounts adjusted in accordance with relevant PRC 25%
income tax laws based on a statutory rate of 25%.
Pursuant to the relevant laws and regulations in the PRC and
with approval from the tax authorities in charge, preferential
tax treatment of 15% is available to entities recognised as High 15%
and New Technology Enterprises. Shanghai Huahong Grace
Semiconductor Manufacturing Corporation, one of the Group’s
subsidiaries was recognised as High and New Technology 15%
Enterprise and are entitled to a preferential tax rate of 15% (six 15%
months ended 30 June 2023: 15%).
Pursuant to the relevant laws and regulations in the PRC and
with approval from the tax authorities in charge, one of the
Group’s subsidiaries, Huahong Semiconductor (Wuxi) Co.,
Ltd. (“Hua Hong Wuxi”), is entitled to an exemption from CIT
for five years, commencing from the first year that Hua Hong 50%
Wuxi generates taxable profit, and a deduction of 50% on the
CIT rate for the following five years. Hua Hong Wuxi was in
accumulated tax loss positions as of 30 June 2024, and the
tax holiday has not begun to take effect.
2024 INTERIM REPORT 2024 43
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL
INFORMATION
30 June 2024
6. INCOME TAX (CONTINUED) 6.
The major components of income tax (credit)/expense of the
Group are as follows:
For the six months
ended 30 June
2024 2023
(Unaudited) (Unaudited)
(US$’000) (US$’000)
Current income tax expense – PRC 15,035 47,071
Current income tax expense – elsewhere 2 26
Deferred tax (26,501) (20,152)
Total income tax (credit)/expense (11,464) 26,945
7. EARNINGS PER SHARE ATTRIBUTABLE 7.
TO ORDINARY EQUITY HOLDERS OF THE
PARENT
The calculation of the basic earnings per share amounts is
based on the profit for the period attributable to ordinary equity
holders of the parent and the weighted average number of 1,716,776,029
ordinary shares of 1,716,776,029 in issue during the period (six 1,307,657,291
months ended 30 June 2023: 1,307,657,291).
The calculation of the diluted earnings per share amount
is based on the profit for the period attributable to ordinary
equity holders of the parent. The weighted average number
of ordinary shares used in the calculation is the number of
ordinary shares in issue during the period, as used in the basic
earnings per share calculation, and the weighted average
number of ordinary shares assumed to have been issued at
no consideration on the deemed exercise or conversion of all
dilutive potential ordinary shares into ordinary shares.
44 HUA HONG SEMICONDUCTOR LIMITED
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL
INFORMATION
30 June 2024
7. EARNINGS PER SHARE ATTRIBUTABLE 7.
TO ORDINARY EQUITY HOLDERS OF THE
PARENT (CONTINUED)
The calculations of basic and diluted earnings per share are
based on:
For the six months
ended 30 June
2024 2023
(Unaudited) (Unaudited)
(US$’000) (US$’000)
Earnings
Profit attributable to ordinary equity holders of the
parent, used in the basic earnings per share
calculation 38,491 230,758
Number of shares
For the six months
ended 30 June
2024 2023
(’000) (’000)
Shares
Weighted average number of ordinary shares
in issue during the period used in the basic
earnings per share calculation 1,716,776 1,307,657
Effect of dilution-weighted average number of
ordinary shares:
Share options 2,675 11,002
Total 1,719,451 1,318,659
2024 INTERIM REPORT 2024 45
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL
INFORMATION
30 June 2024
8. DIVIDENDS 8.
For the six months
ended 30 June
2024 2023
US$’000 US$’000
Final declared and paid 28,876 –
Final declared and unpaid (included in
pledged deposits) 7,357 –
Total 36,233 –
During the six months ended 30 June 2024, the Company’s
shareholders approved 2023 proposed final dividend with a
total amount of US$36,233,000 (HK$16.5 cents per ordinary 36,233,000
share) (six months ended 30 June 2023: Nil). 16.5
46 HUA HONG SEMICONDUCTOR LIMITED
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL
INFORMATION
30 June 2024
9. PROPERTY, PLANT AND EQUIPMENT 9.
During the six months ended 30 June 2024, the major changes
in property, plant and equipment include:
The Group acquired items of property, plant and
equipment with a cost of US$511,788,000 (six months 511,788,000
ended 30 June 2023: US$246,129,000).
246,129,000
Depreciation for items of property, plant and equipment
was US$258,527,000 during the period (six months ended 258,527,000
30 June 2023: US$234,954,000).
234,954,000
Assets with a net book value of US$56,000 were disposed
of by the Group during the six months ended 30 June
2024 (six months ended 30 June 2023: US$45,000). 56,000
45,000
10. TRADE AND NOTES RECEIVABLES 10.
30 June 31 December
2024 2023
(Unaudited) (Audited)
(US$’000) (US$’000)
Trade receivables 214,852 214,414
Notes receivable 61,773 66,951
276,625 281,365
Impairment of trade receivables (2,243) (2,696)
Total 274,382 278,669
2024 INTERIM REPORT 2024 47
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL
INFORMATION
30 June 2024
10. T R A D E A N D N O T E S R E C E I V A B L E S 10.
(CONTINUED)
An ageing analysis of the trade receivables, based on the
invoice date and net of provisions, is as follows:
30 June 31 December
2024 2023
(Unaudited) (Audited)
(US$’000) (US$’000)
Within 3 months 3 213,283 232,485
Over 3 and within 6 months 3 6 60,113 43,762
Over 6 months and within 1 year 6 1 986 2,422
Total 274,382 278,669
11. TRADE PAYABLES 11.
An ageing analysis of the trade payables of the Group as at
the end of the reporting period, based on the invoice date, is
as follows:
30 June 31 December
2024 2023
(Unaudited) (Audited)
(US$’000) (US$’000)
Within 1 month 1 121,164 149,116
Over 1 but within 3 months 1 3 70,747 42,579
Over 3 but within 6 months 3 6 30,709 16,166
Over 6 but within 12 months 6 12 9,520 11,158
Over 12 months 12 14,066 16,391
Total 246,206 235,410
48 HUA HONG SEMICONDUCTOR LIMITED
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL
INFORMATION
30 June 2024
12. SHARE CAPITAL 12.
Number of Amount of
shares in issue share capital
(’000) (US$’000)
1 January 2024 1,716,589 4,933,559
Issue of shares with exercise of share options 739 1,911
30 June 2024 (unaudited)
1,717,328 4,935,470
1 January 2023 1,306,837 1,994,462
Issue of shares with exercise of share options 1,310 3,367
30 June 2023 (unaudited)
1,308,147 1,997,829
13. COMMITMENTS 13.
The Group had the following contractual commitments at the
end of the reporting period:
30 June 31 December
2024 2023
(Unaudited) (Audited)
(US$’000) (US$’000)
Property, plant and equipment 2,974,585 1,258,232
2024 INTERIM REPORT 2024 49
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL
INFORMATION
30 June 2024
14. RELATED PARTY TRANSACTIONS 14.
(a) Name and relationship (a)
Name of related party Relationship with the Group
Huahong Group and its subsidiaries
– Hua Hong International Inc. (“Huahong International”) 20.24% Shareholder of the
Company
20.24%
– Shanghai Huahong Zealcore Electronics Co., Ltd. (“Huahong Zealcore”) Subsidiary of Huahong Group
– Shanghai Hongri International Electronics Co., Ltd. (“Hongri”) Subsidiary of Huahong Group
– Shanghai Hua Hong Jitong Smart System Co., Ltd. (“Jitong”) Subsidiary of Huahong Group
– Shanghai Huali Microelectronics Co., Ltd. (“Shanghai Huali”) Subsidiary of Huahong Group
Shanghai Huahong Technology Development Co., Ltd. Associate of the Group
(“Huahong Technology Development”)
– Shanghai Huahong Real Subsidiary of Huahong
Estate Co., Ltd. (“Huahong Real Estate”) Technology Development
– Shanghai Huajin Property Subsidiary of Huahong
Management Co., Ltd. (“Huajin”) Technology Development
50 HUA HONG SEMICONDUCTOR LIMITED
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL
INFORMATION
30 June 2024
14. RELATED PARTY TRANSACTIONS 14.
(CONTINUED)
(b) In addition to the transactions disclosed elsewhere in (b)
this financial information, the Group had the following
transactions with related parties during the period:
For the six months
ended 30 June
2024 2023
(Unaudited) (Unaudited)
(US$’000) (US$’000)
Sales of goods to related parties
(note (i)) (i)
Huahong Zealcore 9,110 7,698
Hongri 395 785
Purchases of goods from related parties
(note (ii)) (ii)
Hongri 16,699 10,804
Huahong Zealcore 364 660
Jitong 8 8
Rental income from a related party
(note (iii)) (iii)
Shanghai Huali 7,016 7,040
Service fee charged by a related party
(note (iv)) (iv)
Huajin 288 303
Interest expense charged by a related
party under lease arrangement as
a lessee (note (iv)) (iv)
Huahong Real Estate 445 473
Expense paid on behalf of a related
party (note (v)) (v)
Shanghai Huali 13,585 14,338
2024 INTERIM REPORT 2024 51
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL
INFORMATION
30 June 2024
14. RELATED PARTY TRANSACTIONS 14.
(CONTINUED)
(b) In addition to the transactions disclosed elsewhere in (b)
this financial information, the Group had the following
transactions with related parties during the period:
(Continued)
Notes:
(i) The sales of goods to the related parties were made (i)
according to the prices and terms agreed between the
related parties.
(ii) The purchases of goods and intangible assets from related (ii)
parties were made according to the prices and terms
offered by the related parties.
(iii) The rental income received from a related party was based (iii)
on the prices and terms agreed between the related
parties.
(iv) The service fees and interest expense charged by related (iv)
parties were based on the prices and terms agreed
between the related parties.
(v) The expense paid on behalf of the related party is interest- (v)
free and repayable on demand.
52 HUA HONG SEMICONDUCTOR LIMITED
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL
INFORMATION
30 June 2024
14. RELATED PARTY TRANSACTIONS 14.
(CONTINUED)
(c) Compensation of key management personnel of the (c)
Group
For the six months
ended 30 June
2024 2023
(Unaudited) (Unaudited)
(US$’000) (US$’000)
Short term employee benefits 2,282 1,869
Pension scheme contributions 101 80
Equity-settled share option expense 11 103
Total compensation paid to key
management personnel 2,394 2,052
15. FAIR VALUE AND FAIR VALUE HIERARCHY 15.
OF FINANCIAL INSTRUMENTS
The carrying amounts and fair values of the Group’s financial
instruments, other than those with carrying amounts that
reasonably approximate to fair values, are as follows:
Carrying amounts Fair values
30 June 31 December 30 June 31 December
2024 2023 2024 2023
(US$’000) (US$’000) (US$’000) (US$’000)
(Unaudited) (Audited) (Unaudited) (Audited)
Financial assets
Equity investments designated at fair
value through other comprehensive
income 285,938 270,506 285,938 270,506
Financial liabilities
Interest-bearing bank borrowings 1,964,956 1,906,526 1,967,202 1,911,206
2024 INTERIM REPORT 2024 53
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL
INFORMATION
30 June 2024
15. FAIR VALUE AND FAIR VALUE HIERARCHY 15.
OF FINANCIAL INSTRUMENTS (CONTINUED)
The Group’s finance department headed by the finance
manager is responsible for determining the policies and
procedures for the fair value measurement of financial
instruments. The finance department reports directly to the
chief financial officer. At each reporting date, the finance
department analyses the movements in the values of financial
instruments and determines the major inputs applied in the
valuation. The valuation is reviewed and approved by the chief
financial officer.
The fair values of the financial assets and liabilities are
included at the amount at which the instrument could be
exchanged in a current transaction between willing parties,
other than in a forced or liquidation sale. The following
methods and assumptions were used to estimate the fair
values of those financial assets and liabilities measured at fair
value:
The fair values of listed equity investments are based on
quoted market prices adjusted by discount for illiquidity if the
investments are still in the lock-up period. The fair values of
unlisted equity investments designated at fair value through
other comprehensive income have been estimated using a
market-based valuation technique based on assumptions that
are not supported by observable market prices or rates. If
there is a recent deal regarding the unlisted investments, the
fair values are estimated based on the dealing price. If there
is no such deal to be referenced, the directors will determine
comparable public companies (peers) based on industry, size,
leverage and strategy, and calculates an appropriate price
multiple, such as price to book value (“P/B”) multiple and price
to sales value (“P/S”) multiple, for each comparable company
identified. The multiple is calculated by dividing the enterprise
value of the comparable company by net assets. The trading
multiple is then discounted for considerations such as
illiquidity based on company-specific facts and circumstances.
The discounted multiple is applied to the corresponding net
assets of the unlisted equity investments to measure the fair
value. The directors believe that the estimated fair values
resulting from the valuation technique, which are recorded
in the consolidated statement of financial position, and the
related changes in fair values, which are recorded in other
comprehensive income, are reasonable, and that they were
the most appropriate values at the end of the reporting period.
54 HUA HONG SEMICONDUCTOR LIMITED
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL
INFORMATION
30 June 2024
15. FAIR VALUE AND FAIR VALUE HIERARCHY 15.
OF FINANCIAL INSTRUMENTS (CONTINUED)
Management has assessed that the fair values of the non-
current portion of interest-bearing bank borrowings with
floating interest rate of the Company approximate to their fair
values due to their floating interest rates.
The non-current portion of lease liabilities of the Group
approximate to their fair values since their carrying amounts
are present value and the internal rates of return are close
to rates currently available for instruments with similar terms,
credit risk and remaining maturities.
The fair values of interest-bearing bank borrowings with fixed
interest rate have been calculated by discounting the expected
future cash flows using rates currently available for instruments
with similar terms, credit risk and remaining maturities. The
Group’s own non-performance risk for interest-bearing bank
borrowings as at 30 June 2024 and 31 December 2023 was
assessed to be insignificant.
Fair value hierarchy
The following tables illustrate the fair value measurement
hierarchy of the Group’s financial instruments:
Financial assets measured at fair value
30 June 2024
Fair value measurement categorised into
Level 1 Level 2 Level 3 Total
1 2 3
US$’000 US$’000 US$’000 US$’000
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Equity investments designated
at fair value through other
comprehensive income 1,980 281,027 2,931 285,938
2024 INTERIM REPORT 2024 55
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL
INFORMATION
30 June 2024
15. FAIR VALUE AND FAIR VALUE HIERARCHY 15.
OF FINANCIAL INSTRUMENTS (CONTINUED)
Fair value hierarchy (Continued)
Financial assets measured at fair value (Continued)
31 December 2023
Fair value measurement categorised into
Level 1 Level 2 Level 3 Total
1 2 3
(US$’000) (US$’000) (US$’000) (US$’000)
(Audited) (Audited) (Audited) (Audited)
Equity investments designated
at fair value through other
comprehensive income 2,429 265,128 2,949 270,506
During the period, there were no transfers of fair value 1
measurements between Level 1 and Level 2 and no transfers 2 3
into or out of Level 3 for both financial assets and financial
liabilities (six months ended 30 June 2023: Nil).
56 HUA HONG SEMICONDUCTOR LIMITED
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL
INFORMATION
30 June 2024
15. FAIR VALUE AND FAIR VALUE HIERARCHY 15.
OF FINANCIAL INSTRUMENTS (CONTINUED)
Fair value hierarchy (Continued)
The recurring fair value measurement for the Group’s
equity investments designated at fair value through other
comprehensive income and financial assets at fair value
through profit or loss, was made using significant unobservable
inputs (Level 3) as at 30 June 2024. Below is a summary of the 3
valuation techniques used and the key inputs to the valuation:
Valuation Signi cant Sensitivity of fair value
technique unobservable input Range to the input
Unlisted equity investment Valuation Average P/S multiple 30 June 2024: 4.5x-11.9x 5% (31 December 2023: 5%)
multiples of peers 31 December 2023: increase/decrease would result
4.5x-11.9x in increase/decrease in fair
value by 5% (31 December
2023: 5%)
5%
4.5x-11.9x 5%
5%
4.5x-11.9x 5%
Discount for illiquidity 2024:20%-30% 5% (31 December 2023: 5%)
2023:20%-30% increase/decrease would result
in decrease/increase in fair
value by 5% (31 December
2023: 5%)
20%-30% 5%
20%-30% 5%
5%
5%
2024 INTERIM REPORT 2024 57
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL
INFORMATION
30 June 2024
15. FAIR VALUE AND FAIR VALUE HIERARCHY 15.
OF FINANCIAL INSTRUMENTS (CONTINUED)
Fair value hierarchy (Continued)
The movements in financial assets categorised into Level 3 3
during the period are as follows:
Equity investments
designated at fair
value through other
comprehensive
income
(US$’000)
1 January 2024 2,949
Exchange realignment (18)
30 June 2024 (unaudited) 2,931
1 January 2023 176,190
Total loss recognised in other comprehensive income (20,250)
Exchange realignment (6,168)
30 June 2023 (unaudited) 149,772
58 HUA HONG SEMICONDUCTOR LIMITED
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL
INFORMATION
30 June 2024
16. SHARE OPTION SCHEME 16.
The Company operates a share option scheme (the “Scheme”)
for the purpose of providing incentives and rewards to eligible
participants who contribute to the success of the Group’s
operations.
The following share options were outstanding during the
period:
Number of options
2024 2023
(’000) (’000)
At 1 January 21,422 23,438
Exercised during the period (739) (1,310)
Forfeited during the period (205) (13)
At 30 June 20,478 22,115
17. EVENT AFTER THE REPORTING PERIOD 17.
To the date of approval of the interim condensed consolidated
financial information, there is no material subsequent event
undertaken by the Group.
18. APPROVAL OF THE INTERIM CONDENSED 18.
CONSOLIDATED FINANCIAL INFORMATION
The interim condensed consolidated financial information was
approved and authorised for issue by the board of directors on
29 August 2024.
2024 INTERIM REPORT 2024 59
OTHER DISCLOSURES
30 JUNE 2024
SHARE OPTION SCHEME
The Company adopted a share option scheme on
1 September 2015, which became effective on 4
September 2015. The share option scheme shall be
valid and effective for a period of 7 years commencing
on the date of adoption. It has therefore expired
on 1 September 2022. No further options could be 20,477,972
granted, and none has been granted, under the Share 1.19%
Option Scheme from that date. As of 30 June 2024,
the Company had options for 20,477,972 shares
outstanding under the share option scheme, which
represented approximately 1.19% of the Company’s
issued shares as of that date. The table below sets
out details of outstanding options granted to Directors
and other grantees under the share option scheme
and transactions during the six months ended 30 June
2024:
60 HUA HONG SEMICONDUCTOR LIMITED
OTHER DISCLOSURES
30 June 2024
Number of share options Name or category of participants
Directors
Mr. Junjun Tang Former directors Other employees In aggregate
Granted on 4 September 2015 – 988,000 – 29,262,000 – – 30,250,000
Granted on 24 December 2018 – – 680,000 – 33,820,000 – 34,500,000
Granted on 29 March 2019 500,000 – – – – – 500,000
Granted on 23 December 2019 – – – – – 2,482,000 2,482,000
Cancelled/lapsed during the year 2015 – – – -130,000 – – -130,000
Cancelled/lapsed during the year 2016 – – – -1,458,000 – – -1,458,000
Cancelled/lapsed during the year 2017 – – – -1,353,399 – – -1,353,399
Cancelled/lapsed during the year 2018 – – – -754,595 – – -754,595
Cancelled/lapsed during the year 2019 – – -600,000 -58,000 -1,035,000 -36,000 -1,729,000
Cancelled/lapsed during the year 2020 – -119,000 -80,000 – -993,904 -84,000 -1,276,904
Cancelled/lapsed during the year 2021 -62,500 – – – -5,751,868 -592,993 -6,407,361
Cancelled/lapsed during the year 2022 – – – – -543,728 -73,983 -617,711
Cancelled/lapsed during the year 2023 -8,168 -6,900 -15,068
Exercised during the period – – – – 705,951 33,500 739,451
Cancelled during the period – – – – – – –
Lapsed during the period – – – – -87,758 -116,668 -204,426
Outstanding as at 1 January 2024 437,500 – – – 19,468,191 1,516,248 21,421,849
Outstanding as at 30 June 2024 437,500 – – – 18,674,392 1,366,080 20,477,972
Vesting period of share options Note 1 Note 2 Note 3 Note 2 Note 3 Note 4
1 2 3 2 3 4
Exercise period of share options Note 5 Note 6 Note 7 Note 6 Note 7 Note 8
5 6 7 6 7 8
Exercise price of share options HK$18.400 HK$6.912 HK$15.056 HK$6.912 HK$15.056 HK$17.952
18.400 6.912 15.056 6.912 15.056 17.952
Weighted average closing price of the shares
immediately before the dates on which the share
options were exercised HK$19.20 HK$21.65
19.20 21.65
2024 INTERIM REPORT 2024 61
OTHER DISCLOSURES
30 June 2024
Notes:
1 Subject to conditions as set out in the grant notice, one 1
fourth of the options shall vest on each of 23 December
2021, 12 August 2022, 11 August 2023 and 9 August
2024
2 Subject to conditions as set out in the grant notices, one 2
third of the options shall vest on each of 4 September
2017, 4 September 2018 and 4 September 2019
3 Subject to conditions as set out in the grant notices, for 3
employees at or above the level of the vice president,
one fourth of the options shall vest on each of 24
December 2020, 24 December 2021, 24 December 2022
and 24 December 2023; for the other employees, one
third of the options shall vest on each of 24 December
2020, 24 December 2021 and 24 December 2022
4 Subject to conditions as set out in the grant notices, for 4
employees at or above the level of the vice president,
one fourth of the options shall vest on each of 23
December 2021, 23 December 2022, 23 December 2023
and 23 December 2024; for the other employees, one
third of the options shall vest on each of 23 December
2021, 23 December 2022 and 23 December 2023
5 The exercise period of share options is from 29 March 5
2021 to 28 March 2026
6 The exercise period of share options is from 4 September 6
2017 to 3 September 2022
7 The exercise period of share options is from 24 7
December 2020 to 23 December 2025
8 The exercise period of share options is from 23 8
December 2021 to 22 December 2026
Please refer to note 16 of the Notes to the Interim 16
Condensed Consolidated Financial Information for
further details.
62 HUA HONG SEMICONDUCTOR LIMITED
OTHER DISCLOSURES
30 June 2024
DIRECTORS’ AND CHIEF EXECUTIVE’S
INTERESTS IN SHARES AND
UNDERLYING SHARES OF THE
COMPANY
As of 30 June 2024, except as disclosed below, none
of the Directors nor the Chief Executive of the Company
had any interests and short positions in the shares, XV
underlying shares or debentures of the Company or any 352
associated corporation (within the meaning of Part XV
of SFO), as recorded in the register kept under section
352 of the SFO, or as otherwise notified to the Company
and the Hong Kong Stock Exchange pursuant to the
Model Code.
Number of
underlying shares Approximate
held in percentage of
Name of Director Capacity long position (1) interests
(1)
Mr. Junjun Tang Beneficial owner
448,500 0.03%
Note:
(1) Including (i) long position in 437,500 underlying shares (1) (i) 437,500
of the Company under share options granted pursuant (ii)
to the Share Option Scheme and (ii) 11,000 A shares A
of the Company as disclosed in the announcement 11,000 A
regarding the plan for additional acquisition of A Shares 61
of the Company by certain senior management dated 5
January 2024. Please refer to page 61 for particulars of
outstanding options as of 1 January 2024 and 30 June
2024 respectively.
2024 INTERIM REPORT 2024 63
OTHER DISCLOSURES
30 June 2024
SUBSTANTIAL SHAREHOLDERS’
AND OTHER PERSONS’ OWNERSHIP
IN THE SHARES AND UNDERLYING
SHARES OF THE COMPANY
As of 30 June 2024, persons other than a Director or
Chief Executive of the Company, having ownership 5%
of 5% or more or short positions in the shares and
underlying shares of the Group, were as follows:
Approximate
percentage of
aggregate
ownership
Capacity and Number of in issued share
Substantial shareholders nature of ownership shares held capital*
*
Shanghai Hua Hong International, Inc. Legal and beneficial owner 347,605,650 (1)
20.24%
(Hua Hong International) (2)
(2)
Shanghai Huahong (Group) Co., Ltd. Interest in a controlled 347,605,650(1) 20.24%
(Huahong Group) (2) corporation
(2)
Legal and beneficial owner 1,198,517(3) 0.07%
Sino-Alliance International, Ltd. Legal and beneficial owner 160,545,541(1)(4) 9.35%
(Sino-Alliance International)
Sino-Alliance International, Ltd. Interest in a controlled 28,415,606(1) 1.65%
(Sino-Alliance International) corporation
Shanghai Alliance Investment Interest in a controlled 188,961,147(1)(5) 11.00%
Ltd. (SAIL) corporation
Xinxin (Hongkong) Capital Co., Limited Legal and beneficial owner 168,262,925(1) 9.80%
Xun Xin (Shanghai) Investment Co., Ltd. Interest in a controlled 168,262,925(1) 9.80%
corporation
China Integrated Circuit Industry Interest in a controlled 168,262,925(1) 9.80%
Investment Fund Co., Ltd. corporation
64 HUA HONG SEMICONDUCTOR LIMITED
OTHER DISCLOSURES
30 June 2024
SUBSTANTIAL SHAREHOLDERS’
AND OTHER PERSONS’ OWNERSHIP
IN THE SHARES AND UNDERLYING
SHARES OF THE COMPANY
(Continued)
Notes:
(1) Long positions in the shares of the Company. (1)
(2) Hua Hong International is a wholly-owned subsidiary of (2)
Huahong Group.
(3) Huahong Group directly held a total of 1,198,517 A (3) 1,198,517 A
shares.
(4) Including 3,084 shares held in escrow by Sino-Alliance (4) Sino-Alliance International
International pursuant to an escrow arrangement. 3,084
(5) SAIL indirectly held beneficial ownership in the Company (5) Sino-Alliance
through two wholly-owned subsidiaries, including Sino- International
Alliance International.
* The percentages are calculated based on the total *
number of issued shares of the Company as of 30 June 1,717,328,145
2024, i.e., 1,717,328,145 shares.
Except as disclosed above, so far as is known to any of
the Directors and Chief Executive of the Company, as of
30 June 2024, no other person or corporation had any
beneficial ownership or short positions in any shares or 336
underlying shares of the Company which was recorded
in the register required to be kept by the Company
pursuant to section 336 of the SFO.
PURCHASE, SALE OR REDEMPTION
OF SECURITIES
Neither the Company nor any of its subsidiaries
purchased, sold or redeemed any of the Company’s
listed securities during the six months ended 30 June
2024.
GEARING RATIO
The Group monitors capital using a gearing ratio,
which is net debt divided by total equity plus net debt.
The Group includes, within net debt, trade payables,
other payables and accruals, interest-bearing bank
borrowings, lease liabilities and amounts due to related -64.39%
parties, less cash and cash equivalents. The Group’s -55.79%
gearing ratio as at 30 June 2024 was -64.39% (31
December 2023: -55.79%).
2024 INTERIM REPORT 2024 65
OTHER DISCLOSURES
30 June 2024
EMPLOYEES AND REMUNERATION
POLICIES
As at 30 June 2024, the Company had approximately
7,000 employees in the PRC and overseas (30 7,000 6,700
June 2023: approximately 6,700). The Company’s
remuneration policy is reviewed periodically and
determined by reference to the analysis on market
competitiveness, company performance, and individual
qualifications and performance. Staff benefits include
medical schemes, mandatory social insurance and
provident fund etc.
COMPLIANCE WITH THE DEED OF
NON-COMPETITION AND DEED OF
RIGHT OF FIRST REFUSAL
Huahong Group, SAIL and INESA, being controlling
shareholders of the Company at the time, entered
into a deed of non-competition (the “Deed of Non-
competition”) dated 23 September 2014, details of
which have been set out in the paragraph headed
“Non-competition Undertaking” in the section headed
“Relationship with Controlling Shareholders” of the
Company’s prospectus dated 3 October 2014 (the
“Prospectus”). In addition, Huahong Group and
SAIL entered into a deed of right of first refusal (the
“Deed of Right of First Refusal”) dated 10 June 2014,
details of which have been set out in the paragraph
headed “Right of First Refusal” in the section headed
“Relationship with Controlling Shareholders” of the
Prospectus.
As of 30 June 2024, the Company has reviewed the
written declaration from each of Huahong Group, SAIL
and INESA on their compliance with their commitments
under the Deed of Non-competition and the Deed
of Right of First Refusal (as the case may be). The
Independent Non-Executive Directors have reviewed
the status of compliance and confirmed that all the
commitments under the Deed of Non-competition and
the Deed of Right of First Refusal (as the case may be)
have been complied with by the relevant parties.
66 HUA HONG SEMICONDUCTOR LIMITED
OTHER DISCLOSURES
30 June 2024
CORPORATE GOVERNANCE
The Company is committed to maintaining a high
standard of corporate governance with a view to
safeguarding the interests of its shareholders and
enhancing corporate value and accountability.
The Board is of the view that the Company has
complied with the code provisions set out in the C1
Corporate Governance Code as contained in Appendix
C1 of the Listing Rules during the six-month period
ended 30 June 2024.
CODE OF CONDUCT FOR SECURITIES
TRANSACTIONS BY DIRECTORS
The Company has adopted a code of conduct
regarding the Directors’ securities transactions on terms
no less exacting than the required standard set out in
the Model Code. Having made specific enquiries of all
Directors, the Company has received their confirmation
that they have complied with the required standard as
set forth in the Model Code during the six-month period
ended 30 June 2024.
AUDIT COMMITTEE
The Audit Committee, comprising one Non-executive
Director and two Independent Non-executive Directors
of the Company, has reviewed and approved the
unaudited results of the Group for the six months ended
30 June 2024 and has discussed with management the
accounting principles and practices adopted by the
Group, internal controls and financial reporting matters.
2024 INTERIM REPORT 2024 67
OTHER DISCLOSURES
30 June 2024
PUBLICATION OF INTERIM REPORT
ON THE WEBSITES OF THE HONG
KONG STOCK EXCHANGE AND THE
COMPANY
The interim report for the six months ended 30 June D2
2024 containing information required by Appendix D2
of the Listing Rules will be dispatched to shareholders ( www.hkexnews.hk )
and published on the websites of the Hong Kong ( www.huahonggrace.com )
Stock Exchange (www.hkexnews.hk) and the Company
(www.huahonggrace.com) in due course.
By Order of the Board
Hua Hong Semiconductor Limited
Mr. Suxin Zhang
Chairman and Executive Director
68 HUA HONG SEMICONDUCTOR LIMITED
www.huahonggrace.com
