(22 August 2019, Hong Kong) Sun.King Power Electronics Group Limited (“Sun.King Electronics” or the “Company”, together with its subsidiaries collectively known as the “Group”) (Stock Code: 580.HK) is pleased to announce that the Group recorded sales revenue of RMB627 million for the six months ended 30 June 2019 (the “Period”), up 6.7% year-on-year. The Group’s net profit attributable to owners of the parent increased by 38.0% year-on-year to RMB113 million. In order to give back to the shareholders for their long-term support, the board of directors resolved to pay an interim dividend of 2 HK cents per ordinary share, which stayed flat compared to the corresponding period last year.

Performance highlights:

The Order of Flexible DC Transmission was Sufficient and Delivered Smoothly, Other Income and Revenue Grew Substantially

During the Period, the sales revenue of the Company reached RMB627 million, up 6.7% year-on-year. Sales revenue from power transmission and distribution business and electrified railway transportation businesses increased, while the sales revenue from industrial and other businesses dropped. As other income and revenue grew substantially, net profit attributable to owners of the parent increased by 36.6% year-on-year to RMB113 million.

According to the breakdown by business segment, sales revenue from power transmission and distribution totalled RMB377 million, up 20.6% year-on-year, and the gross profit of this segment was 29.5%. During the Period, the order of flexible DC transmission project was sufficient and delivered smoothly. A number of ultra-high-voltage direct current (UHVDC) transmission projects were launched and started to getting new orders.

Underpinned by the growth in procurements of high-power electric trains and passenger EMUs, revenue sales of the electrified transportation segment increased by 18.5% year-on-year to RMB51 million, and the gross profit margin from this segment remained stable at 31.6%.

Sales revenue from industrial and others segment was RMB200 million, down 12.8% year-on-year. During the Period, metallurgical industries such as electrolytic aluminum were almost stagnant due to policy factors, and the number of newly-initiated projects dropped significantly.

Chart 1：Sales revenue breakdown by business segment

Accelerated the R&D of Core Technologies and Marched into the Consumer Market Represented by IGBT

During the Period, the Group initiated an independent R&D project for the core device of power semiconductor-IGBT (“IGBT Project”), and established a Swiss-based company SwissSEM with R&D team equipped with international cutting-edge technologies and solid experience. Meanwhile, the Group started the IGBT production line construction project in the core area of Yangtze River Delta-Jiashan Economic and Technological Development Zone.

As a core device in power semiconductor sector, IGBT is the “CPU” in electrified equipment with a broad market, playing an essential role in highly efficient, energy-saving and innovative electric energy application industry represented by intelligent grids, rail transport, new-energy vehicles, new energy power generation, frequency conversion and energy conservation. The Group marched into the core device of power semiconductor and initiated the high-end IGBT with independent technologies, which were major measures in accelerating the R&D of core technologies and expanding consumer markets.

Moreover, the Group sold a portion of its business in industrial sector - a disposal of 43% equity interests in Jiujiang Sun.King Technology Co., Ltd. (the “Jiujiang Sunking”). After this disposal of equity interests, the Group further consolidated its focus on core businesses, thereby accelerating R&D and industrialization of high-end technologies. The net income from the disposal of equity interests will mainly be used for R&D of new technologies led by IGBT projects and business development of the Group.

Mr. Xiang Jie, Chairman of Sun.King Electronics, said, “as a pioneer in the domestic R&D of power electronic device technology, the Company launched the R&D and production project of power semiconductor core device IGBT which was included in the national strategic emerging industries catalogue and projects to strengthen industrial development at the grass-roots level. The domestic IGBT technology is backward thus has a broad market scope. We will take the IGBT project as opportunity to power the future development of the Group.”

Looking into the second half of 2019, a number of projects of the Company are expected to deliver orders on a large scale. Among them, major projects in the flexible direct current transmission sector-Zhangbei Flexible Direct Project and Wudongde Multi-terminal DC Project are expected to continue their large-scale delivery. In addition, the UHVDC transmission projects-Qinghai-Henan, Shaanbei-Wuhan and Yangzhong-Jiangxi as planned in the Notice on Accelerating the Planning and Construction of a Batch of Key Projects for Power Transmission and Transformation , as well as the Yunnan-Guizhou Interconnection HVDC transmission project were launched in the first half of 2019 and received orders in succession, and are expected to enter the stage of large-scale delivery in the second half of 2019; while the HVDC transmission projects-“Baihetan-Jiangsu”, “Baihetan-Zhejiang” and “Min-Guang Interconnection”are expected to start in the second half of 2019.

The management of Sun.King comments that the Group will continue to adhere to its business strategy of regarding technology leadership as the core of its competitiveness, strengthen management, adopt a sound financial policy and focus on independent technological R&D, and promote the advancement of energy technologies through continuous introduction of high-end power electronic devices, innovative technologies and solutions that spur rapid growth of corporate and social values.

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Sun.King Power Electronics Group Limited

Sun.King Power Electronics Group Limited, takes technology innovation as the core driving force for enterprise development, focusing on two high-end technology fields of power semiconductor and supporting device technology and new power technology, providing international cutting-edge technologies and products for power transmission and distribution, electrified transportation and other industries. The Company was established in 2002 and listed on the Main Board of the Hong Kong Stock Exchange in October 2010 (stock code 0580.HK). The Group launched IGBT R&D project during the first half of 2019, striving to provide new impetus to the continued growth of the Group's future performance. In addition, the Group focused on strengthening the construction of overseas R&D teams and further enhanced the Group's international R&D capabilities and high-end talent pool.

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