华虹公司：港股公告：2024中期报告

查股网 2024-09-06 华虹公司(688347)公司公告

2024

中期報告INTERIM REPORT

HUA HONG SEMICONDUCTOR LIMITED華虹半導體有限公司

(Incorporated in Hong Kong with limited liability)(Stock Code: 01347)（股份代號：01347）

（於香港註冊成立之有限公司）

DEFINITIONS

INTERIM REPORT2024

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 andfor geographical reference only, except where the context otherwise requires,references in this interim report to“China”and the“PRC”do not include Taiwan, theMacau Special Administrative Region and Hong Kong;“Company”or“our Company”Hua Hong Semiconductor Limited, a company incorporated in Hong Kong withlimited liability on 21 January 2005 and, except where the context otherwiserequires, all of its subsidiaries, or its present subsidiaries where the context refersto 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, thebusinesses operated by our subsidiaries or their predecessors (as the case maybe) with respect to the period before our Company became the holding company ofour 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 2013and 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 Director(s)”

the independent non-executive Director(s) of our Company;

HUA HONG SEMICONDUCTOR LIMITED

DEFINITIONS

“Listing Rules”the Rules Governing the Listing of Securities on The Stock Exchange of Hong KongLimited, as amended or supplemented from time to time;“Model Code”the Model Code for Securities Transactions by Directors of Listed Issuers as set outin 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 andtraded in RMB;“RMB Share Issue”the Company’s issue of 407,750,000 RMB Shares, which have been listed on theSTAR Market since 7 August 2023;“SFO”the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong), asamended 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.

CORPORATE INFORMATION

INTERIM REPORT2024

Board of DirectorsExecutive DirectorsSuxin Zhang(Chairman)

Junjun Tang(President)

Non-Executive DirectorsJun YeGuodong SunLimin ZhouChengyan XiongIndependent Non-Executive DirectorsStephen Tso Tung ChangKwai Huen Wong, JPSonglin FengCompany SecretarySui Har LeeAuthorized RepresentativesJunjun TangSui Har LeeAudit CommitteeStephen Tso Tung Chang(Chairman)Chengyan XiongSonglin FengRemuneration CommitteeKwai Huen Wong, JP(Chairman)

Jun YeSonglin FengNomination CommitteeSuxin Zhang(Chairman)

Kwai Huen Wong, JPSonglin Feng

Websitewww.huahonggrace.comAuditorErnst & Young

Certified Public Accountants

27/F, One Taikoo Place979 King’s Road, Quarry BayHong Kong, PRC

Hong Kong Legal AdvisorHerbert Smith Freehills23/F, Gloucester Tower15 Queen’s Road CentralHong Kong, PRCPrincipal BanksChina Construction Bank Shanghai BranchNo. 900, Lujiazui Ring RoadPudong New AreaShanghai, PRCChina Development Bank Co., Ltd. Shanghai BranchNo. 68, Puming RoadPudong New AreaShanghai, PRCChina Merchants Bank Co., Ltd. Shanghai BranchNo.1088 Lujiazui Ring RoadPudong New AreaShanghai, PRCChina Construction Bank Corporation Hong KongBranch28/F, CCB Tower, 3 Connaught Road, CentralHong Kong, PRCBank of Communications Co., Ltd. Hong Kong Branch20 Pedder Street, CentralHong Kong, PRCChina Development Bank Jiangsu BranchNo. 232, Middle Jiangdong RoadNanjing, Jiangsu, PRCAgricultural Bank of China Wuxi Xinwu SubbranchNo. 26, Hefeng Road, Xinwu DistrictWuxi, Jiangsu, PRCChina Construction Bank Wuxi High and NewTechnology Industrial Development Zone SubbranchNo. 26, Hefeng Road, Xinwu DistrictWuxi, Jiangsu, PRCChina CITIC Bank Wuxi New District SubbranchNo. 26, Hefeng Road, Xinwu DistrictWuxi, Jiangsu, PRC

HUA HONG SEMICONDUCTOR LIMITED

CORPORATE INFORMATION

Bank of China Wuxi High and New Technology IndustrialDevelopment Zone SubbranchNo. 140, Wangzhuang Road, Xinwu DistrictWuxi, Jiangsu, PRCBank of Communications Co., Ltd. Wuxi BranchNo.8, 2nd Financial Street, Binhu DistrictWuxi, Jiangsu, PRC

Share RegistrarHong Kong shares:

Tricor Investor Services Limited17/F, Far East Finance Centre16 Harcourt RoadHong Kong, PRCA shares:

China Securities Depository and Clearing CorporationLimited, Shanghai BranchNo. 188 South Yanggao RoadPudong New AreaShanghai, PRC

Registered OfficeRoom 2212, Bank of America Tower12 Harcourt Road, CentralHong Kong, PRCPrincipal Places of Business288 Halei RoadZhangjiang Hi-Tech ParkShanghai, PRCPostcode: 201203No. 30, Xinzhou RoadXinwu DistrictWuxi, Jiangsu, PRCPostcode: 214028No.30-1, Xinzhou RoadXinwu DistrictWuxi, Jiangsu, PRCPostcode: 214028

Stock CodeHong Kong Stock Exchange: 01347Shanghai Stock Exchange: 688347

KEY FINANCIALS

INTERIM REPORT2024

RevenueGross pro?t margin

US$ millionUS$Pro?t attributable to owners of the parentEPS

0.00

25.0%

30.0%

20.0%

15.0%

10.0%

5.0%

0.0%

1,2001,000

1,400

1,262.2

938.5

35.0%

30.3%

29.9%

8.5%

230.8

38.5

186.9

0.022

0.14

0.16

0.18

0.20

0.10

0.12

0.06

0.08

0.02

0.04

0.176

0.144

1,215.5

1H 20231H 20221H 20241H 20231H 20221H 2024

US$ million

HUA HONG SEMICONDUCTOR LIMITED

MANAGEMENT DISCUSSION AND ANALYSIS

Financial Performance

1H 20241H 2023ChangeUS$’000US$’

UnauditedUnauditedRevenue938,5101,262,223(25.6)%Cost of sales(858,815)(884,970)(3.0)%Gross profit79,695377,253(78.9)%Other income and gains71,09550,67940.3%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 associates2,8053,504(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 parent38,491230,758(83.3)% Non-controlling interests(105,525)(82,022)28.7%RevenueRevenue was US$938.5 million, a decrease of 25.6% compared to 1H 2023, primarily due to decreased averageselling price.Cost of salesCost of sales was US$858.8 million, a decrease of 3.0% compared to 1H 2023, primarily due to decreased labor costsand reversal of inventories to net realisable value, partially offset by increased depreciation costs.Gross protGross profit was US$79.7 million, a decrease of 78.9% compared to 1H 2023, primarily due to decreased averageselling price, capacity utilization and increased depreciation costs.Other income and gainsOther income and gains were US$71.1 million, an increase of 40.3% compared to 1H 2023, primarily due to increasedinterest income.

MANAGEMENT DISCUSSION AND ANALYSIS

Selling and distribution expensesSelling and distribution expenses were US$4.8 million, a decrease of 6.3% compared to 1H 2023, primarily due todecreased labor expenses.Administrative expensesAdministrative expenses were US$164.1 million, an increase of 11.0% compared to 1H 2023, primarily due toincreased operating expenses for Hua Hong Manufacturing and engineering wafer costs.Other expensesOther expenses were US$13.8 million, a decrease of 70.1% compared to 1H 2023, primarily due to decreased foreignexchange losses.Finance costsFinance costs were US$49.4 million, a decrease of 12.8% compared to 1H 2023, primarily due to decreased interestrate of bank borrowings.Share of prots of associatesShare of profits of associates were US$2.8 million, a decrease of 19.9% compared to 1H 2023, due to decreased profitrealized 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 dueto decreased taxable profit.(Loss)/prot for the periodAs a result of the cumulative effect of the above factors, loss for the period was US$67.0 million, compared to profit forthe period of US$148.7 million in 1H 2023.

HUA HONG SEMICONDUCTOR LIMITED

MANAGEMENT DISCUSSION AND ANALYSIS

Financial Status

30 June2024

31 December

2023Change

US$’000US$’

UnauditedAuditedNon-current assetsProperty, plant and equipment3,750,1763,519,2926.6%Investment property165,611166,643(0.6)%Right-of-use assets80,62978,5452.7%Investment in associates141,036139,0991.4%Equity instruments designated at fair value through other comprehensive income285,938270,5065.7%Other non-current assets182,374199,780(8.7)%Total non-current assets4,605,7644,373,8655.3%Current assetsInventories462,563449,7492.8%Trade and notes receivables274,382278,669(1.5)%Due from related parties16,03411,21942.9%Other current assets282,912212,64933.0%Pledged deposits39,25932,08822.3%Cash and cash equivalents6,423,8665,585,18115.0%Total current assets7,499,0166,569,55514.1%Current liabilitiesTrade payables246,206235,4104.6%Interest-bearing bank borrowings247,034193,03528.0%Due to related parties8,34013,876(39.9)%Government grants39,35935,01712.4%Other current liabilities529,657495,0497.0%Total current liabilities1,070,596972,38710.1%Net current assets6,428,4205,597,16814.9%Non-current liabilitiesInterest-bearing bank borrowings1,964,9561,906,5263.1 %Lease liabilities19,44019,1291.6 %Deferred tax liabilities4,89230,834(84.1)%Total non-current liabilities1,989,2881,956,4891.7 %Net assets9,044,8968,014,54412.9 %

MANAGEMENT DISCUSSION AND ANALYSIS

Explanation of items with uctuation over 10% from 31 December 2023 to 30 June 2024Due from related partiesDue from related parties increased from US$11.2 million to US$16.0 million, primarily due to increased rentalreceivables from one of our related parties.Other current assetsOther current assets increased from US$212.6 million to US$282.9 million, primarily due to increased value-added taxcredit.Pledged depositsPledged deposits increased from US$32.1 million to US$39.3 million, primarily due to increased deposits for theportion of dividend not paid yet on 30 June 2024.Cash and cash equivalentsCash and cash equivalents increased from US$5,585.2 million to US$6,423.9 million, mainly due to reasons stated inthe cash flow analysis below.Due to related partiesDue to related parties decreased from US$13.9 million to US$8.3 million, primarily due to a payment of technologypurchased in the period.Government grantsGovernment grants increased from US$35.0 million to US$39.4 million, primarily due to receipts from government forresearch and development projects.Interest-bearing bank borrowingsTotal interest-bearing bank borrowings increased from US$2,099.6 million to US$2,212.0 million, due to increaseddrawdowns of bank borrowings.Deferred tax liabilitiesDeferred tax liabilities decreased from US$30.8 million to US$4.9 million, primarily due to a reversal of dividendwithholding tax accrued for 2023.

HUA HONG SEMICONDUCTOR LIMITED

MANAGEMENT DISCUSSION AND ANALYSIS

Cash Flow

1H 20241H 2023ChangeUS$’000US$’

UnauditedUnauditedNet cash flows generated from operating activities137,550293,058(53.1)%Net cash flows used in investing activities(470,924)(353,930)33.1 %Net cash flows generated from/(used in) financing activities1,206,061(36,934)(3,365.4)%Net increase/(decrease) in cash and cash equivalents872,687(97,806)(992.3)%Cash and cash equivalents at beginning of the period5,585,1812,008,765178.0 %Effect of foreign exchange rate changes, net(34,002)(60,002)(43.3)%Cash and cash equivalents at end of the period6,423,8661,850,957247.1 %Net cash ows generated from operating activitiesNet cash flows generated from operating activities decreased from US$293.1 million to US$137.6 million, primarily dueto decreased revenue.Net cash ows used in investing activitiesNet cash flows used in investing activities were US$470.9 million, primarily including US$499.4 million for capitalinvestments and US$17.6 million for an equity instrument, partially offset by US$46.0 million of interest income andUS$0.1 million for disposal of items of property, plant and equipment.Net cash ows generated from nancing activitiesNet cash flows generated from financing activities were US$1,206.1 million, including (i) US$1,181.9 million of capitalcontribution from non-controlling interests, (ii) US$202.4 million of proceeds from bank borrowings, and (iii) US$0.7million 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 ofprincipal portion of lease payments.Financial ResourcesThe Group adopts a prudent approach to cash and financial management to ensure proper risk control and low costof funds. The Group finances its operations primarily with internally generated cash flow and bank loans. As at 30June 2024, the Group had cash and bank balances of approximately US$6,423.9 million (of which approximatelyUS$5,716.8 million were denominated in RMB and approximately US$700.0 million in US dollars), representing anincrease of US$838.7 million as compared to US$5,585.2 million at the end of 2023.

LiquidityTo meet liquidity requirements in the short and long term, our policy is to monitor regularly the current and expectedliquidity requirements to ensure that we maintain sufficient reserves of cash and adequate committed lines of fundingfrom major financial institutions.

MANAGEMENT DISCUSSION AND ANALYSIS

Capital ManagementOur primary objectives of capital management are to safeguard our ability to continue as a going concern and tomaintain healthy capital ratios to support our business and maximize shareholders’value. We manage our capitalstructure and make adjustments in light of the changes in economic conditions. To do this, we may adjust the dividendpayment to shareholders, return capital to shareholders, or issue new shares. We are not subject to any externallyimposed capital requirements. No changes were made in the objectives, policies, or processes for managing capitalduring the six months ended 30 June 2024.Bank LoansThe particulars of bank loans of the Group as at 30 June 2024 are set out as below:

30 June 202431 December 2023

US$’000US$’

CurrentCurrent portion of long term bank loans – secured244,008193,035Current portion of long term bank loans – unsecured3,026–

247,034193,035Non-currentSecured bank loans1,740,3731,786,526Unsecured bank loans224,583120,000

1,964,9561,906,5262,211,9902,099,561The Group is dedicated to improving financing method. As at 30 June 2024, the Group had outstanding bankborrowings of US$2,212.0 million, compared to US$2,099.6 million as at the end of 2023. The bank borrowingsincluded secured interest-bearing borrowings of US$1,984.4 million and unsecured interest-bearing borrowings ofUS$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 AssetsAs 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 ofUS$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) werepledged 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.

HUA HONG SEMICONDUCTOR LIMITED

MANAGEMENT DISCUSSION AND ANALYSIS

Exposure to Fluctuations in Exchange RatesWe have transactional currency exposures, arising primarily from sales or purchases by our significant subsidiariesoperating in Mainland China in US$ rather than the subsidiary’s functional currency, which is RMB. During the sixmonths ended 30 June 2024, approximately 20% of our sales were denominated in currencies other than the functionalcurrency of the subsidiary making the sale, whilst 70% of costs of sales were denominated in the subsidiary’sfunctional currency.In addition, we have currency exposures from interest-bearing bank borrowings, held by our subsidiary operating inMainland China. As at 30 June 2024, interest-bearing bank borrowings with a carrying amount of US$1,586.1 millionwere denominated in US$, 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 variablesheld 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 aforementionedforeign currency risks. Nevertheless, the Company’s management will continue to monitor the foreign exchangeexposure 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 IssueOn 7 August 2023, the Company was listed on the STAR Market of the Shanghai Stock Exchange, pursuant to which atotal 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 issuanceexpenses, including underwriting, sponsorship fees, as well as other issuance expenses, the net proceeds amountedto RMB20,920.7 million. Upon receipt of the proceeds, the entire amount has been deposited into a dedicated accountfor the proceeds, which was approved by the Board. The proceeds raised will be utilised in accordance with thepreviously disclosed intended use of the proceeds as set out below:

Unit: RMB’

Previously disclosed intendeduse of proceeds

Amount ofcommittedinvestments

Accumulatedunutilised proceeds

as at 30 June 2024

Expected timeframe

for usage ofunutilised proceeds

Hua Hong Manufacturing (Wuxi) Project12,500,0009,705,574By the end of 20258-Inch Factory Optimisation and Upgrading

Project

2,000,0001,891,860By the end of 2025Specialty Technological Innovation,

Research and Development Project

2,500,0002,071,467By the end of 2026Replenishment of Working Capital1,000,0000N/AApart from the above, the surplus proceeds of RMB2,921 million raised from the RMB Share Issue will also be used forthe 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 proposedto be used, according to the intentions previously disclosed by the Company in the prospectus, and there was nomaterial change or delay in the use of proceeds.

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 andgeopolitical 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, terminalinventories were still at high levels, and the fragility of recovery still existed. In the first half of 2024, benefiting fromthe advantages of our“8-inch + 12-inch”strategy, product competitiveness and continuous innovation of specialtyprocess technologies, the beliefs of“Courage, Perseverance and Unity”upheld by our entire workforce and jointefforts with customers, our Company’s capacity utilization rate has gradually increased. The 8-inch capacity utilizationrate exceeded 100% while 12-inch capacity utilization rate approached full production in the second quarter, andrevenue has shown positive quarter-on-quarter growth for two consecutive quarters. In particular, the performance ofthe analog and power management platform was especially impressive.Benefiting from the localization of consumer ICs such as mobile phones and the booming development of somedownstream markets, the overall product demand for IC process platforms improved, and the shipments and revenueof each process platform in the first half of 2024 showed a growth trend compared to that in the second half of2023. The Embedded/Standalone Non-Volatile Memory (eNVM/Standalone NVM) process platforms continued tomaintain rapid growth in both R&D and sales, with MCU and smart card IC products advancing in tandem. The 40nmspecialty process platform has successfully started small-scale pilot production, with a continuous enrichment ofproduct categories. The 65/90nm BCD platform business has developed smoothly, with strong end-user demand andsignificant 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 asthe impact of inventory adjustments in automotive electronics and new energy terminals, the overall power discretedevices sector was facing a severe market situation. Our Company’s high-end power discrete devices have faceddouble pressure on demand and price since the end of 2023. In the first half of 2024, the revenue of high-end powerdiscrete devices IGBT and superjunction MOSFET experienced some declines. However, customers still maintain goodintentions for the development of new products, which may be reflected from the introduction of new products, and thenumber 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, whichpromotes the coordinated development with the industrial chain of terminal application companies and IC designcustomers, and establishes a sustainable industrial ecosystem. In the first half of 2024, a number of ecological chainconstruction 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 aplanned monthly production capacity of 83,000 wafers, with a focus on advanced specialty ICs and high-end powerdiscrete 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 variouskey nodes. The project has completed the structural topping-out of the main plant in April 2024, two months aheadof schedule, and is expected to commence equipment move-in in the third quarter, achieve operational status ofproduction 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 ofthe IC industry will coexist with challenges. The Company will continue to advance production capacity, accelerateprocess development, and strive to cover a wider range of product categories; continue to pay close attention to endmarket 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 morecomprehensive and excellent technologies and services in the specialty wafer foundry field.

HUA HONG SEMICONDUCTOR LIMITED

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 of30 June 2024.

Future Plans for Material Investments and Capital AssetsSave as disclosed in this interim report, the Group did not have other concrete plans for material investments or capitalassets as of 30 June 2024.

2024

EPS

51%

407,750,000

2024

www.huahonggrace.com

1088

2212

201203

214028

30-1214028

01347688347

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2024??

25.0%

30.0%

20.0%

15.0%

10.0%

5.0%

0.0%

1,2001,000

1,400

1,262.2

938.5

35.0%

30.3%

29.9%

8.5%

1,215.5

毛利率

二零二二年

上半年

二零二三年

上半年

二零二四年上半年

二零二二年

上半年

二零二三年

上半年

二零二四年

上半年

0.00

230.8

38.5

186.9

0.022

0.14

0.16

0.18

0.20

0.10

0.12

0.06

0.08

0.02

0.04

0.176

0.144

母公司擁有人應佔溢利百萬美元美元每股盈利

二零二二年

上半年

二零二三年上半年

二零二四年

上半年

二零二二年

上半年

二零二三年上半年

二零二四年

上半年

銷售收入百萬美元

938,5101,262,223(25.6)%(858,815)(884,970)(3.0)%79,695377,253(78.9)%71,09550,67940.3%(4,770)(5,090)(6.3)%(164,078)(147,839)11.0%(13,813)(46,126)(70.1)%(49,432)(56,700)(12.8)%

2,8053,504(19.9)%(78,498)175,681(144.7)%11,464(26,945)(142.5)%(67,034)148,736(145.1)% 38,491230,758(83.3)% (105,525)(82,022)28.7%

9.38525.6%

8.5883.0%

7,97078.9%

7,11040.3%

2024

4806.3%

1.64111.0%1,38070.1%4,94012.8%

28019.9%1,1502,690

6,7001.487

3,750,1763,519,2926.6%165,611166,643(0.6)%80,62978,5452.7%141,036139,0991.4%285,938270,5065.7%182,374199,780(8.7)%4,605,7644,373,8655.3%462,563449,7492.8%274,382278,669(1.5)%16,03411,21942.9%282,912212,64933.0%

39,25932,08822.3%6,423,8665,585,18115.0%7,499,0166,569,55514.1%246,206235,4104.6%247,034193,03528.0%

8,34013,876(39.9)%

39,35935,01712.4%529,657495,0497.0%1,070,596972,38710.1%6,428,4205,597,16814.9%1,964,9561,906,5263.1 %

19,44019,1291.6 %4,89230,834(84.1)%1,989,2881,956,4891.7 %9,044,8968,014,54412.9 %

2024

10%1,1201,600

2.1262.829

3,2103,930

55.85264.239

1,3908303,5003,940

20.99622.120

3,080490

137,550293,058(53.1)%(470,924)(353,930)33.1 %1,206,061(36,934)(3,365.4)%872,687(97,806)(992.3)%5,585,1812,008,765178.0 %(34,002)(60,002)(43.3)%6,423,8661,850,957247.1 %

2.9311.376

4.7094.9941,7604,60010

12.061(i)11.819(ii)2.024(iii)70(i)8,750(ii)5,200(iii)2,890(iv)320

64.23957.168

7.00055.8528.387

2024

244,008193,0353,026–247,034193,0351,740,3731,786,526224,583120,0001,964,9561,906,5262,211,9902,099,561

22.120

20.99619.8442.2762.536

1.2%2.3%15.861

2,187,134,0001,487,211,00047,248,00044,319,00086,029,00086,565,00030,869,00031,062,000

304,000306,0007,395,00027,000

20%70%

15.861

5%3,500

407,750,000

212.03

209.207

12,500,0009,705,57482,000,0001,891,860

2,500,0002,071,4671,000,0000

29.21

2024

8+128100%12

ICIC

(eNVM/Standalone NVM)MCUIC4065/90BCD

IGBTMOSFETIC

8.3IC

IC+ 8+12

REPORT ON REVIEW OF INTERIM CONDENSED

CONSOLIDATED FINANCIAL INFORMATION

2024INTERIM REPORT2024

2959

2410

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 onpages 29 to 59 which comprises the condensed consolidatedstatement of financial position of Hua Hong Semiconductor Limited(the“Company”) and its subsidiaries (collectively referred toas the“Group”) as at 30 June 2024 and the related condensedconsolidated statements of profit or loss, comprehensive income,changes in equity and cash flows for the six-month period thenended, and explanatory notes. The Rules Governing the Listing ofSecurities on The Stock Exchange of Hong Kong Limited requirethe preparation of a report on interim financial information to be incompliance with the relevant provisions thereof and Hong KongAccounting Standard 34Interim Financial Reporting (“HKAS 34”)issued by the Hong Kong Institute of Certified Public Accountants(“HKICPA”). The directors of the Company are responsible for thepreparation and presentation of this interim financial informationin accordance with HKAS 34. Our responsibility is to express aconclusion on this interim financial information based on our review.Our report is made solely to you, as a body, in accordance with ouragreed terms of engagement, and for no other purpose. We do notassume responsibility towards or accept liability to any other personfor the contents of this report.

Scope of ReviewWe conducted our review in accordance with Hong Kong Standardon Review Engagements 2410Review of Interim FinancialInformation Performed by the Independent Auditor of the Entity

issued by the HKICPA. A review of interim financial informationconsists of making inquiries, primarily of persons responsible forfinancial and accounting matters, and applying analytical and otherreview procedures. A review is substantially less in scope thanan audit conducted in accordance with Hong Kong Standards onAuditing and consequently does not enable us to obtain assurancethat we would become aware of all significant matters that mightbe identified in an audit. Accordingly, we do not express an auditopinion.

ConclusionBased on our review, nothing has come to our attention that causesus to believe that the interim financial information is not prepared, inall material respects, in accordance with HKAS 34.Certified Public AccountantsHong Kong29 August 2024

INTERIM CONDENSED CONSOLIDATED STATEMENT OFPROFIT OR LOSS

FOR THE SIX MONTHS ENDED 30 JUNE 2024

HUA HONG SEMICONDUCTOR LIMITED

For the six months ended

30 June20242023(Unaudited)(Unaudited)

Notes(US$’000)(US$’000)

Revenue

938,5101,262,223Cost of sales(858,815)(884,970)

Gross profit79,695377,253Other income and gains71,09550,679Selling and distribution expenses

(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 associates2,8053,504

2,805(LOSS)/PROFIT BEFORE TAX

(78,498)175,681Income tax credit/(expense)

11,464(26,945)

(LOSS)/PROFIT FOR THE PERIOD(67,034)148,736

Attributable to:

Owners of the parent 38,491230,758 Non-controlling interests (105,525)(82,022)

(67,034)148,736

EARNINGS PER SHAREATTRIBUTABLE TO ORDINARY EQUITY HOLDERS OF THE PARENT:

Basic – For profit for the period US$0.022

0.022

US$0.176

0.176

Diluted – For profit for the period US$0.022

0.022

US$0.175

0.175

INTERIM CONDENSED CONSOLIDATED STATEMENT OF

COMPREHENSIVE INCOME

FOR THE SIX MONTHS ENDED 30 JUNE 2024

2024INTERIM REPORT2024

For the six months ended

30 June20242023(Unaudited)(Unaudited)US$’000US$’

(LOSS)/PROFIT FOR THE PERIOD(67,034)148,736

OTHER COMPREHENSIVE LOSSOther comprehensive loss that may bereclassified to profit or loss in subsequent periods:

Exchange differences on translation of foreign operations(49,338)(169,717)

Net other comprehensive loss that may bereclassified 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 effect653,082

Net other comprehensive loss that will not bereclassified 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 3,06295,074 Non-controlling interests (119,805)(133,521)

(116,743)(38,447)

INTERIM CONDENSED CONSOLIDATED STATEMENT OFFINANCIAL POSITION

30 JUNE 2024

HUA HONG SEMICONDUCTOR LIMITED

30 June2024

31 December

2023(Unaudited)(Audited)Notes(US$’000)(US$’000)

NON-CURRENT ASSETS

Property, plant and equipment

3,750,1763,519,292Right-of-use assets80,62978,545Investment property165,611166,643Intangible assets42,32049,827Investment in associates141,036139,099Equity instruments designated at fair value through other comprehensive income

285,938270,506Long term prepayments139,425149,953Deferred tax assets629–

Total non-current assets4,605,7644,373,865

CURRENT ASSETSProperties under development207,151178,828Inventories462,563449,749Trade and notes receivables

274,382278,669Prepayments, other receivables and other assets75,76133,821Due from related parties16,03411,219Pledged deposits39,25932,088Cash and cash equivalents6,423,8665,585,181

Total current assets7,499,0166,569,555

CURRENT LIABILITIES

Trade payables

246,206235,410Other payables and accruals505,945430,478Interest-bearing bank borrowings247,034193,035Lease liabilities4,6743,076Government grants39,35935,017Due to related parties8,34013,876Income tax payable19,03861,495

Total current liabilities1,070,596972,387

NET CURRENT ASSETS6,428,4205,597,168

TOTAL ASSETS LESS CURRENT LIABILITIES11,034,1849,971,033

continued/

INTERIM CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL

POSITION30 JUNE 2024

30 June2024

31 December

2023(Unaudited)(Audited)Notes(US$’000)(US$’000)

NON-CURRENT LIABILITIES

Interest-bearing bank borrowings1,964,9561,906,526Lease liabilities19,44019,129Deferred tax liabilities4,89230,834

Total non-current liabilities1,989,2881,956,489

Net assets9,044,8968,014,544

EQUITYEquity attributable to owners of the parent

Share capital

4,935,4704,933,559Reserves1,333,7991,367,436

Total equity attributable to owners of the parent6,269,2696,300,995Non-controlling interests2,775,6271,713,549

Total equity9,044,8968,014,544

Suxin ZhangJun Ye

DirectorDirector

HUA HONG SEMICONDUCTOR LIMITED

INTERIM CONDENSED CONSOLIDATED STATEMENT OFCHANGES IN EQUITY

FOR THE SIX MONTHS ENDED 30 JUNE 2024

Attributable to owners of the parent

Sharecapital

Mergerreserve

Shareoptionreserve

Shareof othercomprehensive

income ofassociates

Otherreserve andcontributedsurplusFair valuereserve

Assetrevaluationreserve#StatutoryreservefundExchangefluctuationreserve

RetainedprofitsTotal

Non-controllinginterests

Totalequity

#US$’000US$’000US$’000US$’000US$’000US$’000US$’000US$’000US$’000US$’000US$’000US$’000US$’

(note 12)

At 1 January 2024

4,933,559645,494*12,794*1,352*35,685*58,435*99,257*233,042*(60,233)*341,610*6,300,9951,713,5498,014,544Profit/(loss) for the period–––––––––38,49138,491(105,525)(67,034)Other comprehensive loss for the period:

Change in fair value ofequity investmentsdesignated at fairvalue through othercomprehensiveincome, net of tax–––––(371)––––(371)–(371)Exchange differenceson translation offoreign operations––––––––(35,058)–(35,058)(14,280)(49,338)

Total comprehensive (loss)/

income for the period–––––(371)––(35,058)38,4913,062(119,805)(116,743)Dividend declared––––––––(36,233)(36,233)–(36,233)Issue of shares (note 12)121,911–(474)–––––––1,437–1,437Equity-settled share optionarrangements––8–––––––8311Capital contribution fromnon-controlling interests–––––––––––1,181,8801,181,880Transfer from retainedprofits generated by asubsidiary–––––––11,870–(11,870)–––

At 30 June 2024(unaudited)4,935,470645,494*12,328*1,352*35,685*58,064*99,257*244,912*(95,291)*331,998*6,269,2692,775,6279,044,896At 1 January 2023

1,994,462645,49413,346–35,685(22,247)99,257191,125(30,145)103,4933,030,4701,104,9984,135,468Profit/(loss) for the period–––––––––230,758230,758(82,022)148,736Other comprehensive loss for the period:

Change in fair value ofequity investmentsdesignated at fairvalue through othercomprehensiveincome, net of tax–––––(17,466)––––(17,466)–(17,466)Exchange differenceson translation offoreign operations––––––––(118,218)–(118,218)(51,499)(169,717)Total comprehensive (loss)/

income for the period–––––(17,466)––(118,218)230,75895,074(133,521)(38,447)Issue of shares (note 12)123,367–(822)–––––––2,545–2,545Equity-settled share option arrangements––107–––––––10733140Capital contribution fromnon-controlling interests–––––––––––295,470295,470Transfer from retainedprofits generated by asubsidiary–––––––29,259–(29,259)–––At 30 June 2023 (unaudited)1,997,829645,49412,631–35,685(39,713)99,257220,384(148,363)304,9923,128,1961,266,9804,395,176

HUA HONG SEMICONDUCTOR LIMITED

INTERIM CONDENSED CONSOLIDATED STATEMENT OF CHANGES

IN EQUITYFOR THE SIX MONTHS ENDED 30 JUNE 2024#The asset revaluation reserve arose from a change in use from anowner-occupied property to an investment property carried at fairvalue.* These reserve accounts comprise the consolidated reserves of

US$1,333,799,000 (31 December 2023: US$1,367,436,000) in theinterim condensed consolidated statement of financial position.

1,333,799,000

1,367,436,000

INTERIM CONDENSED CONSOLIDATED STATEMENT OFCASH FLOWS

FOR THE SIX MONTHS ENDED 30 JUNE 2024

HUA HONG SEMICONDUCTOR LIMITED

FOR THE SIX MONTHS

ENDED 30 JUNE20242023(Unaudited)(Unaudited)(US$’000)(US$’000)

CASH FLOWS FROM OPERATING ACTIVITIES

(Loss)/profit before tax(78,498)175,681Adjustments for:

Finance costs49,43256,700 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

4216 Depreciation of property, plant and equipment258,527234,954 Amortisation of intangible assets8,2725,836 Depreciation of right-of-use assets3,1703,209(Reversal of impairment)/impairment of trade receivables

(438)319

Equity-settled share option expense11140

182,905447,930

(Increase)/decrease in inventories(12,814)43,287Increase 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)17,084Increase in amounts due from related parties(4,815)(3,797)Increase in pledged deposits(198)–Increase/(decrease) in trade payables10,796(9,092)Increase/(decrease) in other payables and accruals

75,872(99,536)Increase/(decrease) in government grants4,582(1,873)Decrease in amounts due to related parties(5,536)(1,376)

Cash generated from operations194,822364,563Income tax paid(57,272)(71,505)

Net cash flows generated from operating activities137,550293,058

continued/

INTERIM CONDENSED CONSOLIDATED STATEMENT OF CASH

FLOWSFOR THE SIX MONTHS ENDED 30 JUNE 2024

FOR THE SIX MONTHSENDED 30 JUNE

20242023(Unaudited)(Unaudited)(US$’000)(US$’000)

CASH FLOWS FROM INVESTING ACTIVITIES

Interest received45,99027,646Purchases 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 equipment10810

Net cash flows used in investing activities(470,924)(353,930)

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from bank borrowings202,44721,088Proceeds from issue of shares6932,849Capital contribution from non-controlling interests1,181,880296,197Repayment 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 CASHEQUIVALENTS 872,687(97,806)

Cash and cash equivalents at beginning of period5,585,1812,008,765Effect of foreign exchange rate changes, net(34,002)(60,002)

CASH AND CASH EQUIVALENTS AT END OF PERIOD6,423,8661,850,957

NOTES TO THE INTERIM CONDENSEDCONSOLIDATED FINANCIAL INFORMATION

30 June 2024

HUA HONG SEMICONDUCTOR LIMITED

1. CORPORATE INFORMATION

Hua Hong Semiconductor Limited (the“Company”) is a limitedliability company incorporated in Hong Kong on 21 January2005. The registered office of the Company is located at Room2212, Bank of America Tower, 12 Harcourt Road, Central,Hong Kong.The principal activity of the Company is investment holding.During the period, the Company’s subsidiaries (collectivelyrefer to as the“Group”) were principally engaged in themanufacture and trading of semiconductor products.In the opinion of the directors, the parent of the Company isShanghai Huahong (Group) Co., Ltd. (“Huahong Group”),which is a state-owned company established in the People’sRepublic of China (“PRC”) and supervised by the ShanghaiState-owned Assets Supervision and AdministrationCommission (“Shanghai SASAC”). The ultimate parent of theCompany is Shanghai SASAC.

2.1 BASIS OF PREPARATION

The interim condensed consolidated financial information forthe six months ended 30 June 2024 has been prepared inaccordance with HKAS 34Interim Financial Reporting. Theinterim condensed consolidated financial information doesnot include all the information and disclosures required in theannual financial statements, and should be read in conjunctionwith the Group’s annual consolidated financial statements forthe year ended 31 December 2023.The financial Information relating to the year ended 31December 2023 that is included in the interim condensedconsolidated statement of financial position as comparativeinformation does not constitute the Company’s statutory annualconsolidated financial statements for that year but is derivedfrom those financial statements. Further information relating tothose statutory financial statements required to be disclosedin accordance with section 436 of the Hong Kong CompaniesOrdinance is as follows:

2212

2.1

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL

INFORMATION30 June 2024

2.1 BASIS OF PREPARATION (CONTINUED)

The Company has delivered the financial statements for theyear ended 31 December 2023 to the Registrar of Companiesas required by section 662(3) of, and Part 3 of Schedule 6 to,the Hong Kong Companies Ordinance. The Company’s auditorhas reported on the financial statements for the year ended 31December 2023. The auditor’s report was unqualified; did notinclude a reference to any matters to which the auditor drewattention by way of emphasis without qualifying its report; anddid not contain a statement under sections 406(2), 407(2) or407(3) of the Hong Kong Companies Ordinance.

2.2 CHANGES IN ACCOUNTING POLICIES AND

DISCLOSURESThe accounting policies adopted in the preparation of theinterim condensed consolidated financial information areconsistent with those applied in the preparation of the Group’sannual consolidated financial statements for the year ended31 December 2023, except for the adoption of the followingnew and revised Hong Kong Financial Reporting Standards(“HKFRSs”) for the first time for the current period’s financialinformation.Amendments to HKFRS 16

Lease Liability in a Sale and LeasebackAmendments to HKAS 1

Classification of Liabilities as Current or Non-current

Amendments to HKAS 1

Non-current Liabilities with Covenants

Amendments to HKAS 7 and HKFRS 7

Supplier Finance Arrangements

The adoption of above revised standards has no significantfinancial effect to the Group’s interim condensed consolidatedfinancial information.

2.1

662(3)

406(2)407(2)407(3)

2.2

HUA HONG SEMICONDUCTOR LIMITED

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIALINFORMATION

30 June 2024

3. OPERATING SEGMENT INFORMATION

For management purposes, the Group is organised into onesingle business unit that includes primarily the manufactureand sale of semiconductor products. Management reviews theconsolidated results when making decisions about allocatingresources and assessing the performance of the Group.Accordingly, no segment analysis is presented.The principal assets employed by the Group are located inthe PRC. Therefore, no segment information based on thegeographical location of assets is presented for the period.Revenues are attributed to geographic areas based on thelocation of customers. Revenues regarding geographicalsegments based on the location of customers for the periodare presented as follows:

For the six months

ended 30 June20242023(Unaudited)(Unaudited)(US$’000)(US$’000)

China (including Hong Kong)751,214966,424North America93,070119,307Asia (excluding China and Japan)51,70384,248Europe38,91277,309Japan3,61114,935

Total938,5101,262,223

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL

INFORMATION

30 June 2024

4. REVENUE AND OTHER INCOME AND GAINS

An analysis of revenue and other income and gains is asfollows:

For the six months

ended 30 June20242023(Unaudited)(Unaudited)(US$’000)(US$’000)

Revenue from contracts with customersSale of goods938,5101,262,223

Other income and gainsRental income7,1187,384Interest income54,80825,421Government subsidies8,57715,001Others5922,873

71,09550,679

HUA HONG SEMICONDUCTOR LIMITED

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIALINFORMATION

30 June 2024

4. REVENUE AND OTHER INCOME AND GAINS

(CONTINUED)An analysis of revenue and other income and gains is asfollows: (continued)

The disaggregation of the Group’s revenue based on thegeographical region for the six months ended 30 June 2024 isincluded in note 3.

5. PROFIT BEFORE TAX

The Group’s profit before tax is arrived at after charging/(crediting):

For the six monthsended 30 June20242023(Unaudited)(Unaudited)(US$’000)(US$’000)

Type of goods or serviceSales of semiconductor products and totalrevenue from contracts with customers

938,5101,262,223

Timing of revenue recognitionGoods transferred at a point in time and totalrevenue from contracts with customers

938,5101,262,223

For the six monthsended 30 June

20242023(Unaudited)(Unaudited)(US$’000)(US$’000)

Cost of inventories sold858,815884,970(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, net13,77046,110

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL

INFORMATION30 June 2024

6. INCOME TAX

Profits arising in Hong Kong were subject to profits tax at therate of 16.5% during the period (six months ended 30 June2023: 16.5%). No provision for Hong Kong profits tax has beenmade as the Company and a subsidiary incorporated in HongKong had no assessable income during the period (six monthsended 30 June 2023: Nil).The Company’s subsidiary incorporated in the Cayman Islandsis not subject to corporate income tax (“CIT”) as it does nothave a place of business (other than a registered office) orcarry on any business in the Cayman Islands.All of the Group’s subsidiaries registered in the PRC and haveoperations in Mainland China are subject to PRC enterpriseincome tax on the taxable income as reported in their PRCstatutory accounts adjusted in accordance with relevant PRCincome tax laws based on a statutory rate of 25%.Pursuant to the relevant laws and regulations in the PRC andwith approval from the tax authorities in charge, preferentialtax treatment of 15% is available to entities recognised as Highand New Technology Enterprises. Shanghai Huahong GraceSemiconductor Manufacturing Corporation, one of the Group’ssubsidiaries was recognised as High and New TechnologyEnterprise and are entitled to a preferential tax rate of 15% (sixmonths ended 30 June 2023: 15%).Pursuant to the relevant laws and regulations in the PRC andwith approval from the tax authorities in charge, one of theGroup’s subsidiaries, Huahong Semiconductor (Wuxi) Co.,Ltd. (“Hua Hong Wuxi”), is entitled to an exemption from CITfor five years, commencing from the first year that Hua HongWuxi generates taxable profit, and a deduction of 50% on theCIT rate for the following five years. Hua Hong Wuxi was inaccumulated tax loss positions as of 30 June 2024, and thetax holiday has not begun to take effect.

16.5%

25%

15%15%

15%

50%

HUA HONG SEMICONDUCTOR LIMITED

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIALINFORMATION

30 June 2024

6. INCOME TAX (CONTINUED)

The major components of income tax (credit)/expense of theGroup are as follows:

7. EARNINGS PER SHARE ATTRIBUTABLE

TO ORDINARY EQUITY HOLDERS OF THEPARENTThe calculation of the basic earnings per share amounts isbased on the profit for the period attributable to ordinary equityholders of the parent and the weighted average number ofordinary shares of 1,716,776,029 in issue during the period (sixmonths ended 30 June 2023: 1,307,657,291).The calculation of the diluted earnings per share amountis based on the profit for the period attributable to ordinaryequity holders of the parent. The weighted average numberof ordinary shares used in the calculation is the number ofordinary shares in issue during the period, as used in the basicearnings per share calculation, and the weighted averagenumber of ordinary shares assumed to have been issued atno consideration on the deemed exercise or conversion of alldilutive potential ordinary shares into ordinary shares.

For the six monthsended 30 June20242023(Unaudited)(Unaudited)(US$’000)(US$’000)

Current income tax expense – PRC15,03547,071Current income tax expense – elsewhere226Deferred tax(26,501)(20,152)

Total income tax (credit)/expense(11,464)26,945

1,716,776,029

1,307,657,291

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL

INFORMATION30 June 2024

7. EARNINGS PER SHARE ATTRIBUTABLE

TO ORDINARY EQUITY HOLDERS OF THEPARENT (CONTINUED)The calculations of basic and diluted earnings per share arebased on:

For the six months

ended 30 June20242023(Unaudited)(Unaudited)(US$’000)(US$’000)

EarningsProfit attributable to ordinary equity holders of theparent, used in the basic earnings per sharecalculation

38,491230,758

Number of shares

For the six months

ended 30 June20242023(’000)(’000)

SharesWeighted average number of ordinary sharesin issue during the period used in the basicearnings per share calculation

1,716,7761,307,657Effect of dilution-weighted average number ofordinary shares:

Share options2,67511,002

Total1,719,4511,318,659

HUA HONG SEMICONDUCTOR LIMITED

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIALINFORMATION

30 June 2024

8. DIVIDENDS

During the six months ended 30 June 2024, the Company’sshareholders approved 2023 proposed final dividend with atotal amount of US$36,233,000 (HK$16.5 cents per ordinaryshare) (six months ended 30 June 2023: Nil).

For the six months

ended 30 June20242023US$’000US$’

Final declared and paid28,876–Final declared and unpaid (included in pledged deposits) 7,357–Total36,233–

36,233,000

16.5

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL

INFORMATION30 June 2024

9. PROPERTY, PLANT AND EQUIPMENT

During the six months ended 30 June 2024, the major changesin property, plant and equipment include:

? The Group acquired items of property, plant andequipment with a cost of US$511,788,000 (six monthsended 30 June 2023: US$246,129,000).? Depreciation for items of property, plant and equipmentwas US$258,527,000 during the period (six months ended30 June 2023: US$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 June2024 (six months ended 30 June 2023: US$45,000).

10. TRADE AND NOTES RECEIVABLES

511,788,000246,129,000?

258,527,000234,954,000?

56,000

45,000

10.

30 June2024

31 December

2023

(Unaudited)(Audited)

(US$’000)(US$’000)

Trade receivables214,852214,414Notes receivable61,77366,951

276,625281,365

Impairment of trade receivables(2,243)(2,696)

Total274,382278,669

HUA HONG SEMICONDUCTOR LIMITED

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIALINFORMATION

30 June 2024

10.

30 June2024

31 December

2023

(Unaudited)(Audited)

(US$’000)(US$’000)

Within 3 months3213,283232,485Over 3 and within 6 months3660,11343,762Over 6 months and within 1 year619862,422

Total274,382278,669

11.

30 June

2024

31 December

2023(Unaudited)(Audited)(US$’000)(US$’000)

Within 1 month1121,164149,116Over 1 but within 3 months1370,74742,579Over 3 but within 6 months3630,70916,166Over 6 but within 12 months6129,52011,158Over 12 months1214,06616,391

Total246,206235,410

10. TRADE AND NOTES RECEIVABLES

(CONTINUED)

An ageing analysis of the trade receivables, based on theinvoice date and net of provisions, is as follows:

11. TRADE PAYABLES

An ageing analysis of the trade payables of the Group as atthe end of the reporting period, based on the invoice date, isas follows:

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL

INFORMATION30 June 2024

12. SHARE CAPITAL

13. COMMITMENTS

The Group had the following contractual commitments at theend of the reporting period:

12.

Number ofshares in issue

Amount ofshare capital(’000)(US$’000)

1 January 20241,716,5894,933,559Issue of shares with exercise of share options7391,911

30 June 2024 (unaudited)

1,717,3284,935,470

1 January 20231,306,8371,994,462Issue of shares with exercise of share options1,3103,367

30 June 2023 (unaudited)

1,308,1471,997,829

13.

30 June

2024

31 December

2023(Unaudited)(Audited)(US$’000)(US$’000)

Property, plant and equipment 2,974,5851,258,232

HUA HONG SEMICONDUCTOR LIMITED

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIALINFORMATION

30 June 2024

14. RELATED PARTY TRANSACTIONS

(a) Name and relationship

14.(a)

Name of related partyRelationship 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.

(“Huahong Technology Development”)

Associate of the Group– Shanghai Huahong Real Estate Co., Ltd. (“Huahong Real Estate”)

Subsidiary of Huahong

Technology Development– Shanghai Huajin Property Management Co., Ltd. (“Huajin”)

Subsidiary of Huahong

Technology Development

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL

INFORMATION30 June 2024

14. RELATED PARTY TRANSACTIONS

(CONTINUED)

(b) In addition to the transactions disclosed elsewhere inthis financial information, the Group had the followingtransactions with related parties during the period:

14.(b)

For the six months

ended 30 June

20242023(Unaudited)(Unaudited)(US$’000)(US$’000)

Sales of goods to related parties(note (i))

(i)Huahong Zealcore9,1107,698Hongri395785

Purchases of goods from related parties(note (ii))

(ii)Hongri16,69910,804Huahong Zealcore364660Jitong88

Rental income from a related party

(note (iii))

(iii)Shanghai Huali7,0167,040

Service fee charged by a related party(note (iv))

(iv)Huajin288303

Interest expense charged by a related

party under lease arrangement asa lessee (note (iv))

(iv)Huahong Real Estate445473

Expense paid on behalf of a related

party (note (v))

(v)Shanghai Huali13,58514,338

HUA HONG SEMICONDUCTOR LIMITED

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIALINFORMATION

30 June 2024

14. RELATED PARTY TRANSACTIONS

(CONTINUED)

(b) In addition to the transactions disclosed elsewhere inthis financial information, the Group had the followingtransactions with related parties during the period:

(Continued)Notes:

(i) The sales of goods to the related parties were madeaccording to the prices and terms agreed between therelated parties.(ii) The purchases of goods and intangible assets from related

parties were made according to the prices and termsoffered by the related parties.(iii) The rental income received from a related party was basedon the prices and terms agreed between the relatedparties.(iv) The service fees and interest expense charged by relatedparties were based on the prices and terms agreedbetween the related parties.(v) The expense paid on behalf of the related party is interest-

free and repayable on demand.

14.(b)

(i)(ii)(iii)(iv)(v)

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL

INFORMATION

30 June 2024

14. RELATED PARTY TRANSACTIONS

(CONTINUED)(c) Compensation of key management personnel of theGroup

15. FAIR VALUE AND FAIR VALUE HIERARCHY

OF FINANCIAL INSTRUMENTSThe carrying amounts and fair values of the Group’s financialinstruments, other than those with carrying amounts thatreasonably approximate to fair values, are as follows:

14.(c)

For the six months

ended 30 June

20242023(Unaudited)(Unaudited)(US$’000)(US$’000)

Short term employee benefits2,2821,869Pension scheme contributions10180Equity-settled share option expense11103

Total compensation paid to key

management personnel

2,3942,052

15.

Carrying amountsFair values30 June

2024

31 December

2023

30 June2024

31 December

2023(US$’000)(US$’000)(US$’000)(US$’000)

(Unaudited)(Audited)(Unaudited)(Audited)

Financial assets

Equity investments designated at fairvalue through other comprehensiveincome

285,938270,506285,938270,506

Financial liabilities

Interest-bearing bank borrowings1,964,9561,906,5261,967,2021,911,206

HUA HONG SEMICONDUCTOR LIMITED

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIALINFORMATION

30 June 2024

15. FAIR VALUE AND FAIR VALUE HIERARCHY

OF FINANCIAL INSTRUMENTS (CONTINUED)The Group’s finance department headed by the financemanager is responsible for determining the policies andprocedures for the fair value measurement of financialinstruments. The finance department reports directly to thechief financial officer. At each reporting date, the financedepartment analyses the movements in the values of financialinstruments and determines the major inputs applied in thevaluation. The valuation is reviewed and approved by the chieffinancial officer.The fair values of the financial assets and liabilities areincluded at the amount at which the instrument could beexchanged in a current transaction between willing parties,other than in a forced or liquidation sale. The followingmethods and assumptions were used to estimate the fairvalues of those financial assets and liabilities measured at fairvalue:

The fair values of listed equity investments are based onquoted market prices adjusted by discount for illiquidity if theinvestments are still in the lock-up period. The fair values ofunlisted equity investments designated at fair value throughother comprehensive income have been estimated using amarket-based valuation technique based on assumptions thatare not supported by observable market prices or rates. Ifthere is a recent deal regarding the unlisted investments, thefair values are estimated based on the dealing price. If thereis no such deal to be referenced, the directors will determinecomparable public companies (peers) based on industry, size,leverage and strategy, and calculates an appropriate pricemultiple, such as price to book value (“P/B”) multiple and priceto sales value (“P/S”) multiple, for each comparable companyidentified. The multiple is calculated by dividing the enterprisevalue of the comparable company by net assets. The tradingmultiple is then discounted for considerations such asilliquidity based on company-specific facts and circumstances.The discounted multiple is applied to the corresponding netassets of the unlisted equity investments to measure the fairvalue. The directors believe that the estimated fair valuesresulting from the valuation technique, which are recordedin the consolidated statement of financial position, and therelated changes in fair values, which are recorded in othercomprehensive income, are reasonable, and that they werethe most appropriate values at the end of the reporting period.

15.

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL

INFORMATION

30 June 2024

15. FAIR VALUE AND FAIR VALUE HIERARCHY

OF FINANCIAL INSTRUMENTS (CONTINUED)Management has assessed that the fair values of the non-current portion of interest-bearing bank borrowings withfloating interest rate of the Company approximate to their fairvalues due to their floating interest rates.The non-current portion of lease liabilities of the Groupapproximate to their fair values since their carrying amountsare present value and the internal rates of return are closeto rates currently available for instruments with similar terms,credit risk and remaining maturities.The fair values of interest-bearing bank borrowings with fixedinterest rate have been calculated by discounting the expectedfuture cash flows using rates currently available for instrumentswith similar terms, credit risk and remaining maturities. TheGroup’s own non-performance risk for interest-bearing bankborrowings as at 30 June 2024 and 31 December 2023 wasassessed to be insignificant.Fair value hierarchyThe following tables illustrate the fair value measurementhierarchy of the Group’s financial instruments:

Financial assets measured at fair value30 June 2024

15.

Fair value measurement categorised into

Level 1Level 2Level 3Total

US$’000US$’000US$’000US$’

(Unaudited)(Unaudited)(Unaudited)(Unaudited)

Equity investments designated

at fair value through othercomprehensive income

1,980281,0272,931285,938

HUA HONG SEMICONDUCTOR LIMITED

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIALINFORMATION

30 June 2024

15. FAIR VALUE AND FAIR VALUE HIERARCHY

OF FINANCIAL INSTRUMENTS (CONTINUED)Fair value hierarchy (Continued)Financial assets measured at fair value (Continued)31 December 2023

During the period, there were no transfers of fair valuemeasurements between Level 1 and Level 2 and no transfersinto or out of Level 3 for both financial assets and financialliabilities (six months ended 30 June 2023: Nil).

15.

Fair value measurement categorised into

Level 1Level 2Level 3Total

(US$’000)(US$’000)(US$’000)(US$’000)(Audited)(Audited)(Audited)(Audited)Equity investments designated

at fair value through othercomprehensive income

2,429265,1282,949270,506

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL

INFORMATION30 June 2024

15. FAIR VALUE AND FAIR VALUE HIERARCHY

OF FINANCIAL INSTRUMENTS (CONTINUED)Fair value hierarchy (Continued)The recurring fair value measurement for the Group’sequity investments designated at fair value through othercomprehensive income and financial assets at fair valuethrough profit or loss, was made using significant unobservableinputs (Level 3) as at 30 June 2024. Below is a summary of thevaluation techniques used and the key inputs to the valuation:

15.

Valuationtechnique

Signicantunobservable inputRange

Sensitivity of fair value

to the input

Unlisted equity investmentValuation

multiples

Average P/S multiple of peers

30 June 2024: 4.5x-11.9x31 December 2023:

4.5x-11.9x

5 % (31 December 2023: 5%)increase/decrease would resultin increase/decrease in fairvalue by 5% (31 December2023: 5%)

4.5x-11.9x

5 %

5%Discount for illiquidity2024:20%-30%

2023:20%-30%

5 % (31 December 2023: 5%)

increase/decrease would resultin decrease/increase in fairvalue by 5% (31 December2023: 5%)20%-30%20%-30%

5 %

HUA HONG SEMICONDUCTOR LIMITED

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIALINFORMATION

30 June 2024

15. FAIR VALUE AND FAIR VALUE HIERARCHY

OF FINANCIAL INSTRUMENTS (CONTINUED)Fair value hierarchy (Continued)The movements in financial assets categorised into Level 3during the period are as follows:

15.

Equity investments

designated at fairvalue through othercomprehensive

income

(US$’000)

1 January 20242,949Exchange realignment(18)

30 June 2024 (unaudited)2,931

1 January 2023176,190Total loss recognised in other comprehensive income(20,250)Exchange realignment(6,168)

30 June 2023 (unaudited)149,772

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL

INFORMATION30 June 2024

16. SHARE OPTION SCHEME

The Company operates a share option scheme (the“Scheme”)for the purpose of providing incentives and rewards to eligibleparticipants who contribute to the success of the Group’soperations.The following share options were outstanding during theperiod:

17. EVENT AFTER THE REPORTING PERIOD

To the date of approval of the interim condensed consolidatedfinancial information, there is no material subsequent eventundertaken by the Group.

18. APPROVAL OF THE INTERIM CONDENSED

CONSOLIDATED FINANCIAL INFORMATIONThe interim condensed consolidated financial information wasapproved and authorised for issue by the board of directors on29 August 2024.

16.

Number of options

20242023(’000)(’000)

At 1 January21,42223,438Exercised during the period(739)(1,310)Forfeited during the period(205)(13)

At 30 June20,47822,115

17.

18.

OTHER DISCLOSURES

30 JUNE 2024

HUA HONG SEMICONDUCTOR LIMITED

20,477,972

1.19%

SHARE OPTION SCHEME

The Company adopted a share option scheme on1 September 2015, which became effective on 4September 2015. The share option scheme shall bevalid and effective for a period of 7 years commencingon the date of adoption. It has therefore expiredon 1 September 2022. No further options could begranted, and none has been granted, under the ShareOption Scheme from that date. As of 30 June 2024,the Company had options for 20,477,972 sharesoutstanding under the share option scheme, whichrepresented approximately 1.19% of the Company’sissued shares as of that date. The table below setsout details of outstanding options granted to Directorsand other grantees under the share option schemeand transactions during the six months ended 30 June2024:

OTHER DISCLOSURES30 June 2024

Number of share optionsName or category of participants

Directors

Former directorsOther employeesIn aggregateMr. Junjun Tang

Granted on 4 September 2015–988,000–29,262,000––30,250,000Granted on 24 December 2018––680,000–33,820,000–34,500,000Granted on 29 March 2019500,000–––––500,000Granted on 23 December 2019–––––2,482,0002,482,000Cancelled/lapsed during the year 2015–––-130,000––-130,000Cancelled/lapsed during the year 2016–––-1,458,000––-1,458,000Cancelled/lapsed during the year 2017–––-1,353,399––-1,353,399Cancelled/lapsed during the year 2018–––-754,595––-754,595Cancelled/lapsed during the year 2019––-600,000-58,000-1,035,000-36,000-1,729,000Cancelled/lapsed during the year 2020–-119,000-80,000–-993,904-84,000-1,276,904Cancelled/lapsed during the year 2021-62,500–––-5,751,868-592,993-6,407,361Cancelled/lapsed during the year 2022––––-543,728-73,983-617,711Cancelled/lapsed during the year 2023-8,168-6,900-15,068Exercised during the period––––705,95133,500739,451Cancelled during the period–––––––Lapsed during the period––––-87,758-116,668-204,426Outstanding as at 1 January 2024437,500–––19,468,1911,516,24821,421,849Outstanding as at 30 June 2024437,500–––18,674,3921,366,08020,477,972Vesting period of share optionsNote 1Note 2Note 3Note 2Note 3Note 4

123234Exercise period of share optionsNote 5Note 6Note 7Note 6Note 7Note 8

567678Exercise price of share optionsHK$18.400HK$6.912HK$15.056HK$6.912HK$15.056HK$17.952

18.4006.91215.0566.91215.05617.952Weighted average closing price of the sharesimmediately before the dates on which the share options were exercisedHK$19.20HK$21.65 19.2021.65

HUA HONG SEMICONDUCTOR LIMITED

OTHER DISCLOSURES

30 June 2024

Notes:

1 Subject to conditions as set out in the grant notice, onefourth of the options shall vest on each of 23 December2021, 12 August 2022, 11 August 2023 and 9 August20242 Subject to conditions as set out in the grant notices, one

third of the options shall vest on each of 4 September2017, 4 September 2018 and 4 September 20193 Subject to conditions as set out in the grant notices, foremployees at or above the level of the vice president,one fourth of the options shall vest on each of 24December 2020, 24 December 2021, 24 December 2022and 24 December 2023; for the other employees, onethird of the options shall vest on each of 24 December2020, 24 December 2021 and 24 December 20224 Subject to conditions as set out in the grant notices, foremployees at or above the level of the vice president,one fourth of the options shall vest on each of 23December 2021, 23 December 2022, 23 December 2023and 23 December 2024; for the other employees, onethird of the options shall vest on each of 23 December2021, 23 December 2022 and 23 December 20235 The exercise period of share options is from 29 March2021 to 28 March 20266 The exercise period of share options is from 4 September2017 to 3 September 20227 The exercise period of share options is from 24December 2020 to 23 December 20258 The exercise period of share options is from 23

December 2021 to 22 December 2026Please refer to note 16 of the Notes to the InterimCondensed Consolidated Financial Information forfurther details.

OTHER DISCLOSURES30 June 2024

DIRECTORS’ AND CHIEF EXECUTIVE’SINTERESTS IN SHARES ANDUNDERLYING SHARES OF THECOMPANY

As of 30 June 2024, except as disclosed below, noneof the Directors nor the Chief Executive of the Companyhad any interests and short positions in the shares,underlying shares or debentures of the Company or anyassociated corporation (within the meaning of Part XVof SFO), as recorded in the register kept under section352 of the SFO, or as otherwise notified to the Companyand the Hong Kong Stock Exchange pursuant to theModel Code.

Name of DirectorCapacity

Number ofunderlying shares

held inlong position

(1)

Approximatepercentage ofinterests(1)

Mr. Junjun TangBeneficial owner

448,5000.03%

(1) (i)437,500

(ii)

A11,000A

Note:

(1) Including (i) long position in 437,500 underlying shares

of the Company under share options granted pursuantto the Share Option Scheme and (ii) 11,000 A sharesof the Company as disclosed in the announcementregarding the plan for additional acquisition of A Sharesof the Company by certain senior management dated 5January 2024. Please refer to page 61 for particulars ofoutstanding options as of 1 January 2024 and 30 June2024 respectively.

HUA HONG SEMICONDUCTOR LIMITED

OTHER DISCLOSURES

30 June 2024

Substantial shareholders

Capacity andnature of ownership

Number ofshares held

Approximatepercentage of

aggregateownershipin issued share

capital*

Shanghai Hua Hong International, Inc. (Hua Hong International)

(2)(2)

Legal and beneficial owner347,605,650

(1)

20.24%

Shanghai Huahong (Group) Co., Ltd. (Huahong Group)

(2)

Interest in a controlled corporation

347,605,650

(1)

20.24%

(2)

Legal and beneficial owner1,198,517

(3)

0.07%

Sino-Alliance International, Ltd. (Sino-Alliance International)

Legal and beneficial owner160,545,541

(1)(4)

9.35%

Sino-Alliance International, Ltd. (Sino-Alliance International)

Interest in a controlled corporation

28,415,606

(1)

1.65%

Shanghai Alliance Investment Ltd. (SAIL)

Interest in a controlled corporation

188,961,147

(1)(5)

11.00%

Xinxin (Hongkong) Capital Co., LimitedLegal and beneficial owner168,262,925

(1)

9.80%

Xun Xin (Shanghai) Investment Co., Ltd.Interest in a controlled corporation

168,262,925

(1)

9.80%

China Integrated Circuit Industry Investment Fund Co., Ltd.

Interest in a controlled corporation

168,262,925

(1)

9.80%

SUBSTANTIAL SHAREHOLDERS’

AND OTHER PERSONS’OWNERSHIPIN THE SHARES AND UNDERLYINGSHARES OF THE COMPANY

As of 30 June 2024, persons other than a Director orChief Executive of the Company, having ownershipof 5% or more or short positions in the shares andunderlying shares of the Group, were as follows:

OTHER DISCLOSURES30 June 2024

SUBSTANTIAL SHAREHOLDERS’

AND OTHER PERSONS’OWNERSHIPIN THE SHARES AND UNDERLYINGSHARES OF THE COMPANY(Continued)

Notes:

(1) Long positions in the shares of the Company.

(2) Hua Hong International is a wholly-owned subsidiary of

Huahong Group.

(3) Huahong Group directly held a total of 1,198,517 A

shares.

(4) Including 3,084 shares held in escrow by Sino-Alliance

International pursuant to an escrow arrangement.

(5) SAIL indirectly held beneficial ownership in the Company

through two wholly-owned subsidiaries, including Sino-Alliance International.* The percentages are calculated based on the totalnumber of issued shares of the Company as of 30 June2024, i.e., 1,717,328,145 shares.Except as disclosed above, so far as is known to any ofthe Directors and Chief Executive of the Company, as of30 June 2024, no other person or corporation had anybeneficial ownership or short positions in any shares orunderlying shares of the Company which was recordedin the register required to be kept by the Companypursuant to section 336 of the SFO.PURCHASE, SALE OR REDEMPTIONOF SECURITIESNeither the Company nor any of its subsidiariespurchased, sold or redeemed any of the Company’slisted securities during the six months ended 30 June2024.

GEARING RATIOThe 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 bankborrowings, lease liabilities and amounts due to relatedparties, less cash and cash equivalents. The Group’sgearing ratio as at 30 June 2024 was -64.39% (31December 2023: -55.79%).

(1)(2)

(3) 1,198,517A

(4) Sino-Alliance International

3,084

(5) Sino-AllianceInternational*

1,717,328,145

-64.39%-55.79%

HUA HONG SEMICONDUCTOR LIMITED

OTHER DISCLOSURES

30 June 2024

7,0006,700EMPLOYEES AND REMUNERATIONPOLICIES

As at 30 June 2024, the Company had approximately7,000 employees in the PRC and overseas (30June 2023: approximately 6,700). The Company’sremuneration policy is reviewed periodically anddetermined by reference to the analysis on marketcompetitiveness, company performance, and individualqualifications and performance. Staff benefits includemedical schemes, mandatory social insurance andprovident fund etc.COMPLIANCE WITH THE DEED OFNON-COMPETITION AND DEED OFRIGHT OF FIRST REFUSALHuahong Group, SAIL and INESA, being controllingshareholders of the Company at the time, enteredinto a deed of non-competition (the“Deed of Non-competition”) dated 23 September 2014, details ofwhich have been set out in the paragraph headed“Non-competition Undertaking”in the section headed“Relationship with Controlling Shareholders”of theCompany’s prospectus dated 3 October 2014 (the“Prospectus”). In addition, Huahong Group andSAIL 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 paragraphheaded“Right of First Refusal”in the section headed“Relationship with Controlling Shareholders”of theProspectus.As of 30 June 2024, the Company has reviewed thewritten declaration from each of Huahong Group, SAILand INESA on their compliance with their commitmentsunder the Deed of Non-competition and the Deedof Right of First Refusal (as the case may be). TheIndependent Non-Executive Directors have reviewedthe status of compliance and confirmed that all thecommitments under the Deed of Non-competition andthe Deed of Right of First Refusal (as the case may be)have been complied with by the relevant parties.

OTHER DISCLOSURES30 June 2024

CORPORATE GOVERNANCEThe Company is committed to maintaining a highstandard of corporate governance with a view tosafeguarding the interests of its shareholders andenhancing corporate value and accountability.The Board is of the view that the Company hascomplied with the code provisions set out in theCorporate Governance Code as contained in AppendixC1 of the Listing Rules during the six-month periodended 30 June 2024.

CODE OF CONDUCT FOR SECURITIESTRANSACTIONS BY DIRECTORSThe Company has adopted a code of conductregarding the Directors’securities transactions on termsno less exacting than the required standard set out inthe Model Code. Having made specific enquiries of allDirectors, the Company has received their confirmationthat they have complied with the required standard asset forth in the Model Code during the six-month periodended 30 June 2024.

AUDIT COMMITTEEThe Audit Committee, comprising one Non-executiveDirector and two Independent Non-executive Directorsof the Company, has reviewed and approved theunaudited results of the Group for the six months ended30 June 2024 and has discussed with management theaccounting principles and practices adopted by theGroup, internal controls and financial reporting matters.

HUA HONG SEMICONDUCTOR LIMITED

OTHER DISCLOSURES

30 June 2024

D2( www.hkexnews.hk )( www.huahonggrace.com )

PUBLICATION OF INTERIM REPORTON THE WEBSITES OF THE HONGKONG STOCK EXCHANGE AND THECOMPANY

The interim report for the six months ended 30 June2024 containing information required by Appendix D2of the Listing Rules will be dispatched to shareholdersand published on the websites of the Hong KongStock Exchange (www.hkexnews.hk) and the Company(www.huahonggrace.com) in due course.

By Order of the BoardHua Hong Semiconductor LimitedMr. Suxin ZhangChairman and Executive Director

www.huahonggrace.com

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