Wai Chi : Announces Interim Results - Approximately HK$857.5 million in Revenue and HK$112.7 million in Gross Profit, Maintains Confidence in its Long-term Profitability Prospects

【For immediate release】

(Stock Code: 1305.HK)

Wai Chi Holdings Announces Interim Results Approximately HK$857.5 million in Revenue and HK$112.7 million in Gross Profit

Maintains Confidence in its Long-term Profitability Prospects

(Hong Kong, 25 August 2023)-Wai Chi Holdings Company Limited ("Wai Chi Holdings", together with its subsidiaries collectively known as the "Group") (Stock code: 1305.HK) is pleased to announce its interim results for the six months ended 30 June 2023 ("the period under review"). Revenue from the core sector of LED business was approximately HK$749,807,000, representing a decrease of approximately 9.5% compared to that of the corresponding period in 2022. The total revenue for the period under review was approximately HK$857,538,000, a decrease of approximately 22.9% compared to approximately HK$1,112,441,000 for the corresponding period in 2022, mainly due to the decreased revenue from the semiconductor memory chip business, as a result of the Group's strategic response to the current unfavourite market conditions. Gross profit from the Group's core LED segments was approximately HK$110,150,000, representing an increase of approximately 1.3% from approximately HK$108,760,000 for the corresponding period in 2022, segment gross profit margin increased by approximately 1.6 percentage points from approximately 13.1% in the first half of 2022 to approximately 14.7% in the period under review. Overall gross profit was approximately HK$112,740,000, decreased by approximately 1.0% from approximately HK$113,840,000 in the corresponding period in 2022. The overall gross profit margin was approximately 13.1%, increased by approximately 2.9 percentage points from approximately 10.2% in the corresponding period in 2022. Profit for the period attributable to owners of the Company amounted to approximately HK$24,128,000, an increase of approximately 26.8% from approximately HK$32,940,000 in the corresponding period in 2022.

During the period under review, the revenue from one of the Group's major business segments, sales of LED backlight products, amounted to approximately HK$698,617,000 (six months ended 30 June 2022: HK$780,139,000), representing a decrease of approximately 10.4%, which was mainly attributable to the decrease in sales of backlights for industrial equipment displays and TV. Amid an influx of competitors into the market, the automobile onboard display backlight sales encountered some challenges, but the demand for the Group's quality goods remained stable during the period under review. The Group's mini LED and local dimming LED products are expected to enter mass production in the second half of the year, leading to a substantial increase in the penetration rate of these high-end products.

During the period under review, the revenue from the Group's other core segment of lighting services amounted to HK$51,190,000, increasing approximately 5.0% compared to the corresponding period last year. Such increase was mainly due to the Group's efforts in developing opportunities in commercial and education lighting services in the PRC while maintaining good working relationships with overseas clients.

Currently, the market demand for memory chips and related products is on a cyclic low period. Facing pressure from the global chip oversupply together with the domestic consumer market slowdown, the Group conducted this line of business prudently during the period under review. The revenue and profit margin of this business segment are significantly influenced by industry trends. During the period under review, the segment contributed revenue of approximately HK$107,731,000 (six months ended 30 June 2022: approximately HK$283,541,000).

The Group's R&D centre is located at its production plant in Huizhou, providing strong technical and R&D support for its business. The Group has achieved a number of technological advancements and breakthroughs over the years, and as of 30 June 2023, the Group holds 258 patents registered in the PRC. Additionally, recognising the Group's outstanding R&D capacities and business potential, one of its subsidiaries was awarded the title of "Specialized and New 'Little Giant' Enterprise" ( 專 精 特 新 「 小 巨 人 」 企 業 ) by the Industrial and Information Technology Department of Guangdong Province (廣東省工業信息廳) in July.

Mr. Chen Chung Po, Chairman, Executive Director and CEO of the Group concluded, "Currently, the market penetration of new energy vehicles in China is increasing, providing new growth opportunities for the in-vehicledisplay industry. In the meantime, memory chip price declines have begun to slow down significantly, signalling a potential rebound in global semiconductor memory chip demand. The Group remains confident in its long-termprofitability prospects. Looking forward, the Group stands poised to capitalise on the market opportunities, leveraging its technological edge and adaptability to meet customer demands."

About Wai Chi Holdings Company Limited (Stock Code: 1305.HK)

Wai Chi Holdings Company Limited is an established LED products manufacturer focusing on producing LED backlight and LED lighting products on an OEM and ODM basis. Equipped with comprehensive production facilities in Shenzhen, Huizhou and Yichang in the PRC, the Group is capable of handling the requisite production procedures (including product design, mould production, mass production and quality control and maintenance) for LED backlight products and LED lighting products. The Group recently expanded its business into the semiconductor memory chips filed to capture the growing demand in the market. The Group was listed on the Main Board of The Stock Exchange of Hong Kong Limited in November 2014 and its stock code is 1305.HK.

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