Intron Technology's 2023 Interim Revenue Grows by 27% to RMB2,626 Million Revenue from New Energy Segment Increases by 58%, Outperforming Market Growth Automated and Connected Vehicles Solutions Segment Soars by 118%


Financial Highlights

(Hong Kong, 23 August 2023) – Intron Technology Holdings Limited ("Intron Technology" or the "Group"; HKEX: 1760), a leading automotive electronics solutions provider in China, delivered a strong performance in the first half of 2023, outperforming the market. In particular, the new energy segment maintained strong growth momentum with a year-on-year increase of 58.1%, which was higher than the growth level of new energy vehicles in the market. The automated & connected vehicles solutions business grew rapidly by 117.6% year-on-year, sustained a satifactory performance.

For the six months ended 30 June 2023, Intron Technology’s revenue increased by 27% year-on-year to RMB2,626.2 million, benefiting from the new energy automotive market entering a stage of steady improvement, with demand constantly increasing. In addition, the Group achieved strong revenue growth by leveraging its strong capabilities in new energy automotive R&D and industrialization, unique business model and business advantages. The Group’s gross profit was RMB541.0 million, an increase of 21%. Profit attributable to shareholders was RMB154.5 million, up by 1%. During the period under review, the Group’s gross profit margin was 20.6%, compared with 21.6% in the corresponding period of last year. Disregarding the additional increase of R&D inputs, the Group’s operating profit margin increased slightly by 0.5% as compared with the corresponding period of last year. The profit margin attributable to shareholders was 5.9% (1H2022: 7.4%). 

Mr Davy Luk, Chairman, Co-CEO and Executive Director of Intron Technology, said, "After two years of rapid growth, the Group’s overall performance continued to outperform the market in the first half of 2023. Leveraging its strong capabilities in new energy automotive R&D and industrialization, the Group helped OEMs to implement highly cost-effective mass production programs and improve business penetration. The new energy business segment continued to be the main driver of the Group’s revenue and earnings growth, driving its business to outperform the industry level."

The new energy vehicle solutions business continued to be the Group’s main growth driver. Benefiting from the increasing market demand for new energy vehicles, the Group’s new energy business, including Motor Control Unit ("MCU") and Battery Management System ("BMS") solutions, continuously expanded its market share and maintained a strong growth momentum, resulting in a satisfactory performance for the Group’s revenue in the first half of 2023. Revenue from this business segment increased significantly by 58% year-on-year to RMB1,253.0 million, higher than the growth rate of new energy vehicles in the market, accounting for 48% of the Group’s overall revenue, up from 38% in the corresponding period of last year.

The Group provides advanced mass production solution services and has developed various core technologies of electronic control units ("ECUs"), including power electronics, embedded software, functional safety and system integration, allowing the Group to stand out in the rapidly changing market environment and comprehensively meet the different needs of customers. The Group continues to optimize and improve the three electric vehicle related core electronic control solutions, namely, MCU, BMS and Vehicle Control Unit ("VCU"), as well as the thermal management system, in order to further increase market penetration.

Revenue from body control, safety and powertrain solutions accounted for 39% of the Group’s overall revenue. Revenue from the safety business and powertrain business recorded a year-on-year increase of 43% and 41%, respectively. The Group won more projects by strengthening the localized solution process and continuously improving and shortening the delivery time, along with new braking system application, driven by the expanded application of driver assistance systems. In addition, the Group increased new projects with OEM customers, particularly in braking and steering applications, which drove growth in the safety business. Meanwhile, the performance of the powertrain business benefited from the continuous improvement of delivery processes and efficiency, as well as the Group winning more new mass production projects. Revenue from body control business decreased slightly by 3% year-on year, mainly due to customers’ high inventory levels, which took time to digest. The Group will continue to focus on market dynamics and respond flexibly, while constantly improving product quality and service levels to maintain its market competitiveness.

During the period under review, revenue from the automated & connected vehicles solutions business surged 118% to RMB203.3 million, accounting for 8% of the Group’s overall revenue, representing an increase of 5% in the corresponding period of last year, mainly due to the significant increase in  the installation rate and penetration rate of the Group’s solutions, as well as the increasing number of mass production projects. The business developed fast. For example, the high-performance cockpit driving integrated domain controller MADC3.5 was officially released, which is the Group’s third domain control product solution for mid-high class automated driving.

At the same time, the Group has maintained close cooperation with Beijing Horizon Robotics Technology R&D Co., Ltd. (北京地平線機器人技術研發有限公司) ("Horizon Robotics"), a leading automated driving chip company in the PRC, for many years. In April 2023, the Group officially won the "Horizon Matrix® Platform" certificate for the MADC2.5 high performance automated driving system developed and designed on the basis of dual Journey®5 chips, marking that the Group’s MADC2.5 products have officially passed the Matrix 5 standard hardware design certification, and Intron Technology, as an ecological partner of Horizon Robotics, can provide mature mass production platform solutions based on dual Journey®5 chips for the practice of advanced intelligent driving.

Meanwhile, in June 2023, the Group signed a strategic cooperation agreement with Haomo AI Technology Co., Ltd. (毫末智行科技有限公司) to build a highly competitive intelligent driving mass production program: single Journey®3 driving-parking integrated domain controller. Intron Technology, as a solution provider, will be responsible for intelligent driving project hardware design and manufacturing, and the expected scope of cooperation will be product development and support services within the automotive automated driving and intelligent driving system architecture and hardware architecture.

The Group’s cloud server related electronics solutions mainly include power management and electronic control solutions designed for high-performance CPUs and graphic processors used in data centers and cloud servers. In the first half of 2023, the revenue from this business declined by 71% to RMB87.1 million, mainly due to a slowdown in global server market demand coupled with the easing of the pandemic in the second half of 2022, after peaking in the first half of 2022 due to a short-term surge in demand.

R&D has always been a top priority for the Group’s development. As electrification and intelligence become a major trend in the automotive industry and its complexity increases, the Group’s outstanding technological advantages in this field will enable it to further consolidate its market position and expand its market share.

In the first half of 2023, the Group continued to increase its R&D investment in line with its asset-light, R&D-heavy development policy. During the period under review, R&D expenses increased by 59% year-on-year to RMB232.8 million, accounting for 8.9% (1H2022: 7.0%) of the Group’s revenue. As at 30 June 2023, the Group had 1,058 full-time R&D-related professionals, representing 70% of its total workforce. During the period under review, the Group owned 256 patents and 207 software copyrights, representing an increase of 21 patents and 20 software copyrights, respectively, compared with the corresponding period of last year.

The Group’s R&D follows the principle of "staying close to customers with multi-location R&D facilities" to improve R&D strength and brand service quality. In 2023, the Group increased investment in R&D bases, including Shanghai base of 2,500 square meters and Shenzhen base of 700 square meters. In addition, the Group will establish an R&D centre in Hong Kong Science Park for the development of automated & connected vehicle software, advanced power semiconductor applications and collaborative robots solutions. The centre is expected to operate officially in November 2023, preparing for the Group’s overseas expansion following Chinese automotive brands going global.

The Group will keep a keen eye on industry development and market changes, continuously improve and enhance competence in electrical/electronic architecture and software development, maintain industry leadership, commit to simplifying intelligent automotive design through the application of advanced semiconductor technology, and make vehicles more intelligent, efficient and secure. 

Mr Eddie Chan, Co-CEO and Executive Director of Intron Technology, said, "As the localization rate of the overall automotive market is rising and the penetration rate of the new energy automotive market is growing, the Chinese automotive market will continue to be positive, where the Group’s developmental priority will be new energy and automated & connected vehicles solutions. With the asset-light, research-heavy business model, together with a management team experienced in electrification and intelligence fields, and a deep understanding of the market, the Group is confident that it can continue to grow in this direction and generate desirable returns for shareholders."

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About Intron Technology Holdings Limited (英恒科技控股有限公司)
Intron Technology Holdings Limited is a fast-growing automotive electronics solutions provider in China focuses on providing solutions targeting critical automotive electronic components applied in New Energy, Intelligent Driving, Automated & Connected Vehicles Solutions, Body Control, Safety and Powertrain systems. The Group utilises its research and development and engineering capabilities to provide solutions incorporating advanced semiconductor devices to help OEMs achieve industry leading performance. Intron Technology has been included in the MSCI China Index from 30 November 2022.

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