China Display Optoelectronics Technology Holdings Limited Announces 2018 Annual Results

HONG KONG, CHINA - Media OutReach - 19 March 2019 - China Display Optoelectronics Technology Holdings Limited ("Ch Display Opt" or the "Company", together with its subsidiaries, the "Group"; HKSE stock code: 334) today announced its annual results for the twelve months ended 31 December 2018 (the "Review Period").

During the Review Period, the Group recorded a revenue of RMB5.28 billion, representing a year-on-year increase of 52.4%, of which the revenue of laminated LCD module products registered a rise by 101.6% year-on-year to RMB4.38 billion. The increase of the Group's revenue was due to the following reasons: (i) the Group's annual sales volume was up by 13.1% to 60.4 million units as driven by the orders placed by new first-tier brand customers in the second half of 2018; (ii) the Group continuously optimised its product mix and increased the proportion of high-end products, so that the portion of laminated products rose from 40.5% for same period last year to 68.9% in terms of sales volume, with the overall average selling price up by 34.7% to RMB87.5. During the Review Period, the Group further expanded its market share and successfully entered the direct supply chain of the world's top mobile phone manufacturers, including Samsung, Huawei, Xiaomi, vivo and OPPO.

To keep abreast of the customer demand, the Group actively devoted its efforts to the research and development of new products and new technologies. Given the market demand on full-screen products, the Group has successfully commenced the mass production of its first batch of full-screen products nationwide in July 2017. During the Review Period, the Group has cooperated with CSOT to develop and mass produce a variety of high-end full-screen notch-cutting module products. During the Review Period, the Group's full-screen products accounted for approximately 64% of the overall sales volume and the proportion of the sales volume of low-temperature poly-silicon (LTPS) products increased from 29% for the same period last year to 64%. 

In addition, during the Review Period, the Group keenly seized the opportunities brought by the development of the smart home market and Internet of Things. In March 2018, the Group launched a partnership with Baidu to introduce its first smart speaker with interactive touch display module, which marked the Group's first foray into the smart home market. The Group expanded the production capacity of 8 to 17-inch medium sized display modules for smart home products and devices by adding new dedicated production lines for the above, so as to further expand its market share.

Looking ahead, the management of Ch Display Opt, said, "the global economic outlook in 2019 is full of challenges due to the impact of trade conflicts and geopolitical tensions. Nevertheless, we will continue to put forth our best efforts to meet any difficulty head-on and with pragmatism. With our outstanding ability and responsiveness to market changes, we will further enhance our collaborations with first-tier brand customers through leveraging CSOT's technology and resources to lay a solid foundation for future development. In terms of research and development capabilities, the Group will keep up the sustained allocation of resources to foldable AMOLED display module and in-display fingerprint technologies. In addition, we will explore and identify the "blue ocean markets", such as automotive display and smart home industries, in order to expand business diversification, and reinforce and increase our competitiveness to enable healthy business growth."

The Group's revenue and sales volume by product segment and their respective year-on-year change during the Review Period are as follows: