Company code: 688538 Company abbreviation: Hehui Optoelectronics

Shanghai Hehui Optoelectronics Co., Ltd

Summary of the 2024 Annual Report

Section 1 Important Notice

1. The summary of this annual report is from the full text of the annual report, in order to fully understand the company's operating results, financial status and future development plan, investors should go to the www.sse.com.cn website to read the full text of the annual report carefully.

2. Major risk warning

The Company has described the various risks that the Company may face in the process of production and operation in the "2024 Annual Report of Shanghai Hehui Optoelectronics Co., Ltd.", please refer to "Section 3 Management Discussion and Analysis" "IV. Risk Factors". Investors are advised to pay attention to the investment risks.

3. The Board of Directors, the Board of Supervisors, and the directors, supervisors and senior management of the Company guarantee the authenticity, accuracy and completeness of the contents of the annual report, and that there are no false records, misleading statements or major omissions, and bear legal responsibilities in accordance with the law.

4. All directors of the company attend the meeting of the board of directors.

5. Lixin Certified Public Accountants (Special General Partnership) issued a standard unqualified audit report for the company.

6. The company is not profitable and has not yet achieved profitability at the time of listing

√ Yes □ No

The Company has explained the reasons for the unrealized profitability in the "2024 Annual Report of Shanghai Hehui Optoelectronics Co., Ltd.", please refer to the content related to "IV. Risk Factors" in "Section 3 Management Discussion and Analysis". Investors are advised to pay attention to the investment risks.

7. The profit distribution plan or the plan for the conversion of provident fund into share capital for the reporting period approved by the board of directors

On March 27, 2025, the company held the twelfth meeting of the second board of directors and deliberated and approved the "About < 2024 Annual Profits

Run the > of the distribution plan. The profit distribution plan for 2024 is that in 2024, it is planned not to withdraw the statutory surplus reserve fund and arbitrary provident fund, not to distribute cash dividends, not to give bonus shares, and not to convert capital reserve into share capital. The profit distribution plan still needs to be reviewed and approved by the company's general meeting of shareholders.

8. Whether there are special arrangements for corporate governance and other important matters

□ Applicable √ Not applicable

Section 2 Basic information of the company

1. Company profile

1.1 Company Shares

√ Applicable □ Not applicable

Company stock profile

Stock Type Stock Listed Exchange and Sector Stock Abbreviation Stock Code Stock Abbreviation Before the Change

A-shares, Shanghai Stock Exchange's Science and Technology Innovation Board and Glitter 688538 are not applicable

1.2 Brief description of the Company's Depositary Receipts

□ Applicable √ Not applicable

1.3 Contacts and Contact Details

Secretary of the Board of Directors and Representative of Securities Affairs

Name: Li Fengling, Chen Jiadong

Address: No. 1568, Jiugong Road, Jinshan Industrial Zone, Shanghai No. 1568, Jiugong Road, Jinshan Industrial Zone, Shanghai

Tel: 021-60892866 021-60892866

Fax: 021-60892866 021-60892866

E-mail ir@everdisplay.com ir@everdisplay.com

2. Brief introduction of the company's main business during the reporting period

2.1 Main business, main products or services

The company mainly focuses on the R&D, production and sales of high-resolution AMOLED semiconductor display panels. Company AMOLED Semiconductor

At the same time, the company is also actively developing and producing AMOLED semiconductor display panel products suitable for on-board display, aviation airborne display, desktop display, smart home display, industrial control display, medical display and other professional display fields.

2.2 Main business model

(1). Profit model

The company is engaged in high-resolution AMOLED semiconductors through self-developed AMOLED semiconductor display panel design and manufacturing technology

R&D, production and sales of display panels. The Company primarily generates revenue and profit from the sale of AMOLED semiconductor display panels. (2). Sales model

The company's AMOLED semiconductor display panel products are independently developed and produced, and according to the main use of customers after purchasing products, the sales activities are divided into direct sales and trade two models, all sales models are in the form of buyout. Under the direct sales model, the products purchased by customers are mainly used for the production of consumer terminal electronic products or the processing of full modules for external sales; Under the trade model, the products purchased by customers are mainly used for direct external sales.

(3). Production mode

The company adopts the production mode of "sales and production" for production arrangement, and the company's marketing and sales department regularly counts the purchasing needs of customers, and forms sales forecasts and shipment plans in combination with market conditions. According to the shipment plan, the production department formulates a production plan based on the company's products and finished products, and issues the production plan to the manufacturing department for production.

(4). Procurement model

The company mainly purchases raw materials, equipment, spare parts and services required for panel manufacturing from suppliers. The company's procurement department formulates a procurement plan according to the production plan, raw material inventory, etc., and comprehensively considers the overall supply and demand situation of the market, price changes and the supplier's delivery cycle, etc., and establishes appropriate safety stock for the main raw materials required for the production plan.

(5). R&D model

1) New technology development

For the development of new technologies, the company has formulated the process management control document "New Technology Development Management Procedures", which mainly includes four stages: project evaluation stage, design evaluation stage, technical verification stage and case closure review stage.

2) New product development

For new product development, the company has formulated the process management control document "New Product Development Management Procedure", which mainly includes five stages: business opportunity evaluation stage, evaluation and verification stage, design and process verification stage, production verification stage and mass production stage.

2.3 The situation of the industry

(1). The development stage, basic characteristics and main technical thresholds of the industry

According to the China Securities Regulatory Commission's "Guidelines for the Industry Classification of Listed Companies (Revised in 2012)", the company belongs to the "C39 computer, communication and other electronic equipment manufacturing industry"; According to the Industrial Classification of the National Economy (GB/T 4754-2017) issued by the National Bureau of Statistics, the company belongs to the "C3974 Display Device Manufacturing" in the "C39 Computer, Communication and Other Electronic Equipment Manufacturing". According to the Classification of Strategic Emerging Industries (2018) issued by the National Bureau of Statistics, "display device manufacturing" belongs to the core electronics industry of the new generation of information technology industry; According to the Guiding Catalogue of Key Products and Services in Strategic Emerging Industries (2016 Edition) issued by the National Development and Reform Commission, "new active organic light-emitting diode (AMOLED) panel products" belong to the key products of strategic emerging industries.

1) The stage of development of the industry

In view of the advantages of excellent display quality, light and thin, healthy eye protection, energy saving and power saving, and more feasible in terms of functional integration, environmental adaptation and shape plasticity, AMOLED has gradually been recognized by manufacturers in downstream application fields and has been widely used, and has become one of the mainstream technologies in small and medium-sized semiconductor display panels, and is widely used in consumer terminal electronic products such as smart phones and smart wearables (smart watches and smart bracelets). With the iteration of technology and the reduction of costs, the screen size of devices equipped with AMOLED displays is also getting larger and larger, and tablets and laptops have begun to use AMOLED displays, and medium-sized applications such as tablets, laptops, and automobiles have become the next growth point of the AMOLED market.

2) Industry characteristics

(1) Technology-intensive and capital-intensive industries

The AMOLED semiconductor display panel industry is a technology-intensive and capital-intensive industry, with high technical process requirements for R&D and production, large scale of fixed asset investment, and a long period of time from project construction to achieving planned production capacity, completing yield climbing, and achieving economies of scale. In the early stage of production, due to the large allocation of fixed costs, industry manufacturers usually incur losses due to high unit costs, and may even have a negative gross profit margin of products. With the maturity of technology, the improvement of product yield and the increase of output, the scale effect has gradually emerged, and the gross profit margin and net profit margin have gradually improved.

(2) The cyclical nature of the industry

AMOLED semiconductor display panel industry has a certain correlation with the macro environment cycle, so it will show cyclicality in the development, AMOLED semiconductor display panel is mainly used in downstream consumer terminal electronic products, and the industry prosperity has a certain correlation with the macroeconomic cycle. When the macroeconomic situation is improving, consumption and investment activities will rise, and the market demand for consumer terminal electronic products will increase, which will drive the production and sales of the panel industry to increase, and vice versa.

3) Industry technology threshold

The AMOLED semiconductor display panel industry is a typical technology-intensive industry, with very high requirements for R&D and production technology and equipment. The technical processes involved in the production of AMOLED semiconductor display panels integrate the research results of optics, physics, chemistry, materials science, precision mechanics, electronic technology, and mechanics. A mature display panel production line needs to go through the construction period, trial production period and ramp-up period, any stage needs to carry out precise technical process debugging to achieve the best state of the production line, any technical process problems may have an adverse impact on the production line, thereby reducing the production line utilization rate and product yield. In addition, the AMOLED semiconductor display panel industry has extremely high requirements for the accuracy of product production and assembly (up to the micron level), and the requirements for product quality are becoming more and more stringent, and the requirements for enterprise technology and process are also increasing. Therefore, the entry threshold of AMOLED semiconductor display panel industry is very high, and it is difficult for new entrants to fully grasp all the technologies and processes involved in the short term, and they need to have many years of technical experience accumulation, and they need to continuously improve the production process in order to produce products with market competitiveness.

(2). Analysis of the company's position in the industry and its changes

The company is a leading well-known enterprise in the R&D, production and sales of small and medium-sized high-resolution AMOLED semiconductor display panels in China, and is a pioneer and leader in the field of medium-sized high-end AMOLED displays such as flat panels, notebooks, automotive and aviation in China. In the field of medium size, the company is the earliest manufacturer in the domestic AMOLED panel industry and has achieved stable supply.

During the reporting period, the application scenarios of the company's products have been continuously enriched, from wearable and mobile phones to medium-sized fields such as tablets, laptops, vehicles, and aviation, and have become the first choice for tablets and laptops for many domestic leading brand customers. Since 2020 public

The company's first flat-panel AMOLED display will be mass-produced, and the notebook AMOLED display will be shipped in large quantities by 2024, 2020-2024

The company's shipments of tablet and notebook AMOLED displays have continuously maintained the first position in China. With its self-developed AMOLED display for tablets and laptops in terms of technological innovation and industry leadership, the company won the "2024 Shanghai Manufacturing Individual Champion Enterprise" award from the Shanghai Municipal Commission of Economy and Information Technology.

According to Omdia data, in 2024, the company's tablet AMOLED display shipments will rank 3rd in the world and 1st in China;

Notebook AMOLED display shipments ranked second in the world and first in China, and smart wearable AMOLED display shipments ranked first

It is ranked 4th in the world and 3rd in China.

(3) The development and future development trend of new technologies, new industries, new forms of business and new models during the reporting period

The new display industry in which the company is located is an important part of the electronic information industry, the foundation of strategic emerging industries, and one of the most dynamic industries. AMOLED semiconductor display panels have the all-round advantages of excellent display quality, healthy eye protection, energy saving and power saving, and have been widely used in small-size applications such as smartphones and smart wearables, and will continue to expand and further in the future

Increase market penetration. According to the Omdia report, in 2024, shipments of AMOLED displays in the smartphone segment will exceed for the first time

Beyond LCD, it accounts for 51% of the total smartphone display market.

In medium and large-size application scenarios such as tablets, laptops, and in-vehicle displays, the penetration rate of AMOLED is rapidly increasing. In flat

In the field of board computers, Apple's iPad Pro panel technology will switch to AMOLED technology in 2024, which will significantly drive the rapid penetration rate of AMOLED

Climbing, leading and accelerating the adoption and application of AMOLED technology in the entire tablet industry, and is expected to enter a period of rapid growth in the future. In the field of notebook computers, as leading manufacturers continue to increase the application of AMOLED displays, the penetration rate of AMOLED displays is growing rapidly, and with the advancement of technology and the increase in the maturity of panel production lines, laptop products using AMOLED displays are becoming more and more popular with consumers. In the field of on-board display, with the development of automotive intelligence, the application scenarios of on-board display are gradually increasing, and traditional scenarios such as the original instrument panel and central control are derived from head-up displays, transparent A-pillars, co-pilot and rear seat entertainment displays, and display windows

In the future, with the continuous improvement of OLED life reliability and the optimization of the cost side, the penetration rate of AMOLED in the high-end automotive market is expected to further increase.

3. The company's main accounting data and financial indicators

3.1 Key accounting data and financial indicators for the past 3 years

Unit: 10,000 yuan Currency: RMB

2024 2023 This year is compared to 2022

Increase/decrease (%)

Total assets 2,959,450.78 2,844,062.56 4.06 3,089,323.23

Net assets attributable to shareholders of listed companies 1,003,409.98 1,256,077.85 -20.12 1,580,505.24

Operating income 495,831.18 303,844.99 63.19 419,088.15

Deduction of business income unrelated to the main business

After income and income without commercial substance 481,740.99 300,650.32 60.23 414,972.73

of operating income

Net profit attributable to shareholders of listed companies -251,805.10 -324,439.12 Not applicable -160,179.21

Deductions attributable to shareholders of listed companies are not -258,644.77 -333,172.24 Not applicable -178,129.19

Net profit from recurring gains or losses

Net cash flow from operating activities -17,249.15 -27,816.21 N/A -2,894.43

Weighted average return on equity (%) -22.29 -22.88 increased by 0.59 -9.65

percentage point

Basic earnings per share (RMB/share) -0.18 -0.23 -0.12 -0.12 -0.12 -0.12 -0.12 -0.12

Diluted earnings per share (RMB/share) -0.18 -0.23 -0.12 N/A

R&D investment as a percentage of operating income (% 9.99 15.52 decreased by 5.53 10.34

Percentages

3.2 Key accounting data by quarter in the reporting period

Unit: 10,000 yuan Currency: RMB

Q1 Q2 Q3 Q4

(January-March) (April-June) (July-September) (October-December)

Operating income 112,407.44 127,049.12 130,274.19 126,100.43

-64,151.41 -63,708.99 -48,364.02 -75,580.68 attributable to shareholders of listed companies

Net profit

attributable to shareholders of listed companies

-65,462.77 -65,131.72 -51,196.91 -76,853.37 after deducting non-recurring gains and losses

Net profit

Cash flow from operating activities -10,408.14 12,844.34 -14,458.34 -2,790.81

Net amount

Explanation of the discrepancies between the quarterly data and the data disclosed in the periodic report

□ Applicable √ Not applicable

4. Shareholders

4.1 The total number of shareholders of common shares, the total number of shareholders of preferred shares whose voting rights have been restored, the total number of shareholders holding special voting shares, and the top 10 shareholders

Unit: Shares

As of the end of the reporting period, the total number of ordinary shareholders (households) was 125,507

The total number of ordinary shareholders (households) at the end of the previous month prior to the disclosure date of the annual report was 123,879

Total number of preferred shareholders whose voting rights were restored as of the end of the reporting period /

Total number of preferred shareholders whose voting rights were restored at the end of the previous month prior to the disclosure date of the annual report /

Total number of shareholders holding special voting shares as of the end of the reporting period /

Total number of shareholders holding special voting shares at the end of the previous month before the disclosure date of the annual report /

Shareholdings of the top 10 shareholders (excluding shares lent through refinancing)

Stake, token, or freeze

Name of Shareholder Holding Restriction Closing Situation Shareholder

(Full name) Increase or decrease during the reporting period Number of shares held at the end of the period Proportion (%) Number of shares Nature of shares

Status Quantity

Shanghai Lianhe Investment Co., Ltd. 0 8,057,201,900 58.25 8,057,201,900 None 0 State-owned legal person

Shanghai Integrated Circuit Industry Investment Fund Co., Ltd. -210,384,760 1,534,160,240 11.09 0 None 0 State-owned legal person

Shanghai Jinlian Investment Development Co., Ltd. -16,538,819 412,491,181 2.98 0 N/A 0 State-owned legal person

China Merchants Bank Co., Ltd. - ChinaAMC SSE STAR Market 50 Components -71,815,682 272,151,422 1.97 0 N/A 0 Others

Easy open-ended index securities investment fund

Industrial and Commercial Bank of China Co., Ltd.-E Fund SSE STAR Market 50 65,112,826 173,648,282 1.26 0 None 0 Others

Component exchange-traded securities investment fund

Hong Kong Securities Clearing Company Limited 39,290,630 136,870,727 0.99 0 N/A 0 Overseas legal person

Industrial and Commercial Bank of China Co., Ltd.-CSI Shanghai State-owned Enterprises Trading 3,568,367 67,440,665 0.49 0 N/A 0 Others

Open-ended index securities investment funds

Shanghai Science and Technology Venture Capital (Group) Co., Ltd. 0 66,255,240 0.48 0 None 0 State-owned legal person

Agricultural Bank of China Co., Ltd.-CSI 500 Trading Open 36,160,598 58,945,387 0.43 0 None 0 Others

index securities investment funds

Shanghai Jiushi Investment Management Co., Ltd. 3,456,228 46,098,668 0.33 0 None 0 State-owned legal person

Description of the above-mentioned shareholder affiliation or concerted action Shanghai Science and Technology Venture Capital (Group) Co., Ltd. holds 30.70% of the equity of Shanghai Integrated Circuit Industry Investment Fund Co., Ltd.

In addition, the Company does not know whether the other shareholders mentioned above are related or acting in concert.

Explanation of preferred shareholders whose voting rights have been restored and the number of shares held is not applicable

Holders of depositary receipts

□ Applicable √ Not applicable

The top 10 shareholders in terms of the number of voting rights as of the end of the reporting period

□ Applicable √ Not applicable

4.2 Block diagram of the property rights and control relationship between the company and the controlling shareholder

√ Applicable □ Not applicable

4.3 Block diagram of the property rights and control relationship between the company and the actual controller

√ Applicable □ Not applicable

4.4 The total number of preferred shareholders and the top 10 shareholders of the company at the end of the reporting period

□ Applicable √ Not applicable

5. Corporate bonds

□ Applicable √ Not applicable

Section 3: Important Matters

1. The company shall, in accordance with the principle of materiality, disclose the major changes in the company's operation during the reporting period, as well as the events that have a significant impact on the company's operation during the reporting period and are expected to have a significant impact in the future.

In 2024, the company achieved operating income of 4958.3118 million yuan, an increase of 63.19% from 3038.4499 million yuan in the same period of the previous year.

Among them, the overseas operating income was 1353.1559 million yuan, accounting for 27.29% of the operating income in the reporting period, mainly because the company adheres to R&D and innovation, is committed to continuous breakthroughs in the cutting-edge technology of AMOLED, accelerates the transformation of the achievements of the latest technical solutions, and makes the product more advantageous in terms of performance in terms of thinness, brightness, strength and service life through the application of various cutting-edge technologies such as new form of hybrid display and Tandem laminated display technology, so as to meet the needs of customers for high-end AMOLED The demand for semiconductor display panels has achieved a rise in both volume and price. In the field of tablets and laptops, the company continued to break through the commanding heights of technology, consolidated its leading position in China, and reached a new high in shipments, with an increase of more than 180% in operating income, ranking first in China in terms of market share. In the field of on-board aviation, the company's product line has been continuously enriched, achieving comprehensive coverage of multiple scenarios and specifications, and a number of new products have been mass-produced and delivered during the reporting period, with explosive growth in shipments and an increase of more than 200% in operating income. In the field of smart phones, the company collaborated with brand customers to innovate and continuously deepen cooperation, and product shipments continued to rise steadily, driving a good trend of stable growth in operating income. In the field of smart wearables, the company relies on the advantages of innovative product matrix, and quickly opens the market with new products that are light, thin and high-performance, and the shipments and operating income of brand customers have increased year-on-year.

2. If there is a delisting risk warning or termination of listing after the disclosure of the company's annual report, the reasons for the delisting risk warning or termination of listing shall be disclosed.

□ Applicable √ Not applicable