ANNUALREPORT2023 April2024 1 MessagetoOurShareholders Astimepasses,wecontinuetoinnovateandachievenewmilestones. Theyear2023markedasignificantmilestoneforBOEaswecelebratedour30thanniversaryintheindustry.Ourjourneytothispointhasbeenfraughtwithchallenges,yetourunwaveringresolveanddedicationhavebornefruit,whichcanbeseeninthesignificantdevelopmentalstrideswehaveachieved.Thispastyear,withitsbackdropofcomplexglobal,political,andeconomicshifts,aswellasongoingadjustmentsinindustrialstructures,haspresenteduswithauniquearrayofchallenges.However,theresilienceandtenacityoftheBOEteamhaveensuredthestabilityandincrementalgrowthofouroperations.Ouroperatingrevenueandnetprofitbeforeexceptionalgainsandlosseshaveshownconsistentquarterlygrowth.Mostnotably,ournetprofitattributabletoshareholdersbeforeexceptionalgainsandlosses,surgedby71.74%yearonyear,givingusamoresolidfoundationforsustained,high-qualitygrowth. Expandingmarketsandenhancingindustrystanding WemaintainedourgloballeadershipintermsofbothshipmentvolumeandshipmentareaofLCD,anddidsoacrossfivemainstreamproductcategories.OurinnovativeIoTproductsinsegmentssuchaslowpowerconsumption,tileddisplayscreens,anddigitalsignagecontinuedtodominateglobalshipments.Arecord-highmilestonewasreachedwithnearly120millionflexibleOLEDunitsshippedannually,andthiswascomplementedbytheinitiationofChina'sfirst8.6GAMOLEDproductionline,furtheraffirmingourtechnologicalleadership.Ourtransformationalendeavourshavealsobornefruitacrossvarioussectors.Oursmartfinancesectorexpandeditsstrategiccustomerbase,whileoursensorandsmartmedicalengineeringsectorshavebothachievedsignificantyear-on-yeargrowthinoperatingrevenue.OurstrategicintegrationwithHCSemiTekintheMLEDsectorhasalsorefinedourindustriallayout.Moreover,Zhongxiangyinghasbeenrecognizedasanational"LittleGiant"firmforbeingprofessional,sophisticated,distinctiveandnovel,andEnergyTechnologyislistedamongthenation'sthirdlistofsmartphotovoltaicpilotdemonstrationenterprises. Drivinginnovationtoempowerhigh-qualityindustrialdevelopment BOEhascumulativelyfiledapplicationsforover90,000patentsasof2023,withinventionscomprisingover90%ofthepastyear'sfilingsandinternationalpatentsexceeding33%.AndwewerenamedforthesixthconsecutiveyeartotheGlobalTop20oftheU.S.grantedpatentranking.ThegloballyacclaimeddisplayindustryeventSID2023markedourdebutofworld-classtechnologiesandhighlightedourcaptureofnineprestigiousawards,furtherenhancingourpresenceintheindustrythroughleadingtechnologicalinnovation.TheBOEGlobalInnovationPartnerConference2023,thebiggesteverinourhistory,servedasaprofessionalplatformforecosystemconstructionandcollaborativeexchange,drewunprecedentedparticipationfromindustryexperts,ecosystempartners,andleadingcompaniesworldwide,andfueledfurthermomentumforhigh-qualitydevelopmentwithintheindustry.Tomaintainthetechnologicaledge,BOEhasestablishedkeyinnovationplatformsinsemiconductordisplays,IoTinnovation,andsensordevices.Togetherwithourpartners,ourcollaborativeeffortsintheadvancementofkeytechnologyareacceleratingtheIoTtransformation.Inparticular,ourIoTinnovationplatformisdedicatedtoexploringspecializedapplicationscenarios,whilethesensortechnologyplatformiszeroinginoncutting-edgeoptoelectronicandnovelsensortechnologies.Theseinitiativesaredesignedtocultivateamoreopenandcollaborativeinnovationecosystem,pavingthewayfortheindustry’shigh-quality,synergistic advancement. Usingmechanismstoimprovescientificmanagementandenhanceefficiency Inthepastyear,werefinedouroperationalandmanagementmechanismsevenfurther.Withtheoperationalmechanism"threeofficesandthreemanagements"thatintegrates“anagilefrontoffice,anintensivemiddleoffice,andanefficientbackoffice”with“strategy,proceduresandperformance”,our"Platform+BattleTeam"operationalmodelhasstrengthenedmanagement’sresponsibility,establishingamatrixedmanagementstylewhere“BattleTeamsleadengagementswhilePlatformshandleinfrastructure”.Thissystemensuresacustomer-centricandbusiness-orientedmethodology,effectivelymarshallingresourcesandfosteringthedevelopmentofcapabilities.Thissetupnotonlyfacilitatesthesharingofplatformresourcesandcapabilitiestoleverageeconomiesofscale,butalsomaximizesinternalefficiencyandcollaboration,propellingcontinuousbusinessgrowth.Beinglistedamongworld-classdemonstrationenterprisesbytheState-ownedAssetsSupervisionandAdministrationCommissionoftheStateCouncilin2023alongwithsixotherlocalenterprisesisatestamenttoourpastendeavoursandachievements,aswellasthefaithinourpotentialforfutureexcellence. Stayingcommittedtogreendevelopmentandresolutelypursuingapathoflowcarbonemissions In2023,BOEpublishedtheTowardsCarbonNeutrality:BOE’sLow-CarbonDevelopmentReport,whichpledgedcarbonneutralityinourdisplayoperationsby2050.Aspartofourdailyoperationsandmanagement,weunswervinglyadheretothesustainabledevelopmentprinciplesof"Green+,Innovation+,Community+."Bycoordinatinggreenmanagementinitiatives,buildinggreenfactories,establishinggreensupplychains,anddevelopinggreen,low-carbonproducts,weareshowingourcommitmenttoimplementingcomprehensivegreendevelopmentpractice