China Display Optoelectronics Technology Holdings Limited Announces Unaudited Financial and Operating Data for the First Three Quarters of 2018

Revenue Increased by 6.8% Year-on-Year to RMB2.55 billion

Overall Sales Volume for a Single
Month in September and the Third Quarter

Up by 57.3% and 19.0% Year-on-Year Respectively

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HONG KONG, CHINA - Media
OutReach - 25 October 2018 – China Display Optoelectronics Technology Holdings
Limited (“Ch Display Opt” or the “Company”, together with its subsidiaries,
the “Group”; HKSE stock code: 334)
is pleased to announce its unaudited financial and
operating data for the nine months ended 30 September 2018 (the “Period”).

 

During the Period, the Group’s
revenue amounted to RMB2.55 billion, representing a year-on-year increase of
6.8%; and the sales volume was 32.6 million units, representing a year-on-year
decrease of 3.9%. In September 2018, the Group passed the qualification
requirements of a world-leading smartphone manufacturer to produce its module
products, which has driven a year-on-year increase of 57.3% and 19.0% in
overall sales volume for a single month in September and for the third quarter,
respectively. As a result, the proportion of the Group’s sales volume of
laminated products increased significantly to 63.4% and the overall unit
selling price of products increased by 11.1% to RMB78. In the meantime, as the
Group constantly optimized its product mix, the revenue generated from
laminated LCD module products amounted to RMB2.03 billion, representing a
year-on-year increase of 36.9%; while the revenue generated from non-laminated
LCD module products amounted to RMB520 million, representing a year-on-year
decrease of 42.5%.

 

During the Period, full-screen products are still the main focus of the
market. In view of this, the Group, together with its parent, Shenzhen China Star
Optoelectronics Technology Co., Ltd. (?????????????), and its subsidiaries
(collectively, “CSOT“), jointly developed various mid and high-end full-screen notch-cutting module products
(including LTPS and In-cell/On-cell products), so that the product mix was
thereby further optimized and the proportion of the sales volume of mid and high-end products
increased steadily. During the Period, the Group’s full-screen products accounted for
approximately 47.0% of the overall sales volume and the proportion of the sales volume of LTPS
products increased from 38.1% for the first half of 2018 to 49.5%.

 

The Group has been striving to form a one-stop operation model of panel
and module with CSOT. In September 2018, the Group and CSOT established cooperation with a
well-known phone brand, indicating that the strategy deployed by the Group and CSOT to
harness synergy and acquire new customers has obtained outstanding results. The Group will
continue to focus on enhancing the synergistic benefits with CSOT, and utilize
the network of CSOT to build business relationships with more first-tier customers and expand the base
of brand customers, as well as leveraging on CSOT’s advancing panel production
techniques and gradually stabilized panel resources to increase the sales proportion of
high-end products such as LTPS, In-cell and full-screen products, and continuously optimize the
product mix at a time when the industry is undergoing consolidation.

 

The
Management of Ch Display
Opt said,
“Although the operating environment in 2018 is relatively challenging, the
Group believes
that opportunities lie within the challenges. As the industrial peak season
approaches, through
implementation of a series of adjustment measures by the Group and the
cooperation formed
with new customers, sales have significantly improved and the sales volume and gross profit margin have gradually
increased. For the long run, the Group remains cautiously optimistic about the
development prospect of the
display module business. Given the smooth progress of the sixth generation
flexible LTPS-AMOLED display
panel production line project of CSOT, it is expected to commence mass production in the first half
of 2019. The Group has jointly established a professional research and development team with
CSOT as well, which has been developing LTPS and active-matrix organic light-emitting diode
(“AMOLED”) module product technology in order to lay a solid foundation for the future
operation development and create greater value for the Group and
its shareholders.”

The Group’s revenue by
product segment and their respective year-on-year changes during the Period are
as follows:

 

The
Group’s sales volume by product segment and their respective year-on-year
changes during the Period are as follows:

About China
Display Optoelectronics Technology (334.HK)

Headquartered in China, China
Display Optoelectronics Technology Holdings Limited (HKSE stock code: 334) is
one of the major providers of small-to-medium-sized display modules in the
region. Ch Display Opt engages primarily in the research and development,
manufacturing, sales and distribution of LCD modules mainly for handheld mobile
devices on an ODM basis. Smartphone LCD module products of Ch Display Opt are
welcomed by domestic and overseas manufacturers with sales volume ranking among
the top.

 

For
more information, please visit its website at www.cdoth8.com.