GalaxyCore Inc.
2024 Implementing Plan for"Enhancing Quality and Increasing Efficiency
to Ensure Returns"
stock abbreviation：GalaxyCoreStock code：688728
GalaxyCore Inc. (hereinafter referred to as "GalaxyCore" or the"Company") is committed to practicing its corporate mission of"Showcasing China's innovation and the integrity of Chineseenterprises worldwide". Upholding the development principle of"investors first", the Company is steadfast in protecting the interestsof all shareholders, fostering a good market image, and promotinghigh-quality development. With confidence in the Company'sprospects, the Company has formulated the 2024 Implementing Planfor "Enhancing Quality and Increasing Efficiency to Ensure Returns".This plan was approved by the 3rd meeting of the 2nd session of theCompany's Board of Directors on April 25, 2024.
Focusing on upgrading and revitalizing core operations toenhance production and operational efficiencyImproving the internal governance structure and strengtheningthe responsibility of “critical minority”Enhancing the effectiveness of information disclosure andnormalizing investor communicationReinforcing the shared responsibilities and benefits betweenthe management and shareholdersEnhancing investor returns and formulating shareprice stabilization plansOther matters
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CONTENTS
GALAXYCORE
Focusing on upgrading andrevitalizing core operationsto enhance production andoperational efficiency
After 20 years of development, GalaxyCore has become a renownedleading semiconductor enterprise at home and abroad.The core business of the Company includes the research anddevelopment, design, packaging and testing, and sales of CMOSimage sensors and display driver ICs. The products of the Companyare primarily used in the mobile phone sector, and widely applied inareas such as tablets, laptops, wearable devices, mobile payments,automotive electronics, and other consumer electronics andindustrial applications.
GALAXYCORE INC.GALAXYCORE INC.
As for display driver ICs, the Company mainly provides LCD displays with resolutions between QQVGA and FHD+and TDDI displays with HD and FHD resolutions, and its products are mainly used in small and medium-sizeddisplays for mobile phones, wearables, industrial control systems, and household products. Its TDDI productsin HD and FHD resolutions have secured orders from internationally renowned mobile phone brands.In 2024, the Company will keep upholding the customer-centric principle, gaining a deep understanding ofcustomer needs, continuously optimizing product structure to meet evolving product demands,and enhance customer loyalty. The main optimization directions include:
The Company successfully achieved mass production and product delivery of 32-megapixel image sensorproducts, reflecting customers' recognition on the products developed based on its independentlyhigh-pixel single-chip integration technology.The Company successfully developed 50-megapixel products, transitioning its product positioning from thetraditional 2 to 8-megapixel range to 50-megapixel and beyond. This provides a robust assurance for itsventuring into the high-pixel image sensor market.As for non-mobile phone image sensors, the Company successfully launched GC8613, a 4K image sensorfeaturing wide dynamic range and low power consumption, which further upgrades its productspecifications. In the field of automotive electronics, the Company's products are mainly used for areassuch as dash cameras, backup cameras, 360-degree surround view systems, and rear-view applications.In 2023, the Company achieved a revenue of RMB200 million in the aftermarket for automotive electronics.
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Delving deeper into demands, focusing on core business, andconsistently promoting the upgrading and iteration of products1.
Currently, the Company primarily operates three product lines: CMOS image sensors for mobile phones,CMOS image sensors for non-mobile phone applications, and display driver ICs. As for CMOS image sensors,the Company offers CMOS image sensors ranging from QVGA (80,000 pixels) to 50 megapixels, andthe major breakthroughs achieved in 2023 are as follows:
The Company's self-developed GC13A2 13-megapixel image sensor,which supports single-frame and high dynamic range (HDR),has been validated by the first batch of brand customers.This product is expected to enter mass production stage in 2024.
①
In 2024, the Company will continue to develop and iterate onhigh-pixel technologies related to products, securing its leadingposition in this technological arena following its global pioneering ofhigh-pixel and single-chip technology. In addition, the Company willalso develop more high-performance products with its self-developedsingle-frame and high-dynamic technology.This effort aims to broaden the scope of downstream applications ofits products, expand its market share in high-pixel CMOS image sensors,and spearhead the evolution of high-pixel and single-chip technologyas the prevailing standard for advanced CMOS image sensors.
②
CMOS image sensors formobile phones
GC13A2
GC8613
In 2024, the Company will actively propel the mass production ofGC8613 and further promote the Company's non-mobile phone CMOSproducts with 4-megapixel and 8-megapixel to empower applicationssuch as smart cities, smart homes, and conference systems.
①
In 2024, the Company will continue to expand in the aftermarket forautomotive electronics and actively develop CMOS image sensorproducts that meet vehicle regulations and are applicable to factoryinstallation, aiming to client-side delivery and testing.②
CMOS image sensors fornon-mobile phone applications
In 2024, the Company will further expand its applications in variousintelligent scenarios such as smart homes, healthcare, andcommercial displays. The Company will continue to expand the salesshare of TDDI products and continuously enhance the productcompetitiveness.
①
The Company expects to launch AMOLED products designed forwearable devices in 2024. In the future, AMOLED display driver ICswill emerge as an important growth driver for the Company.②
Displaying driver ICs
In 2024, the Company will further deepen its Fab-lite operating model, building and strengthening anoperational system and structure that is more suitable for Fab-lite, based on its previous Fabless model.This endeavor aims to enhance the Company's operational efficiency. On the one hand, the Company willenhance the self-operation capability of its subsidiary, GalaxyCore Semiconductor (Shanghai) Limited(hereinafter referred to as "GalaxyCore Semiconductor"), ensuring capacity improvement while maintainingutilization rate and production yield to achieve cash flow breakeven for GalaxyCore Semiconductor.On the other hand, the Company will continue to enhance liquidity risk management. These measuresinclude increasing the proportion of long-term debt, diversifying financing sources, strengthening financialanalysis and management systems, and other measures. In doing so, the Company aim to ensure thatdebt risks are controllable and providing solid financial support for the stable operation andsustainable development of enterprises.
Deepening the Fab-lite model to continuously optimizeoperational efficiency2.
In December 2023, the Company's "project for the research and industrialization of distinctive technology in12-inch CIS integrated circuit" reached the planned usable state and was successfully completed.This accomplishment signifies the Company's transition from a Fabless operating model to Fab-lite.The new production capacity from this fund-raising project was primarily used for manufacturing mid-to-high-endCIS products, which is a complementary and enhancement of the product line in addition to its existing business.
This project contributes to integrating the Company's resources in chip design and manufacturing, enhancing thedesign and process level in the field of back-illuminated image sensors, and accelerating the industrialization ofresearch and development achievements. These achievements are beneficial for strengthening the Company's corecompetitiveness and laying the foundation for increasing market share and expanding its leading edge.
79,538million
he Company's total R&D
investment amounted
17%
representing 17% ofthe current operating income
The Company added 26new invention patents
bringing the total numberof invention patents
received authorization for3 new utility model patents
resulting in a total of 213
new utility model patents
Implementing the concept of "new quality productivity"to build core technological competitiveness3.
The Company has always regarded the innovation capabilities in technology R&D and product design as theprimary drivers of value creation. Over the years, the Company has been committed to the research anddevelopment of core technologies, adhering to an orientation towards independent R&D,and has established a comprehensive independent R&D system.
June 2023
◎The Company released GC8613, a new high-end, star-level wide dynamic range 4K image sensor◎The 32-megapixel image sensor products went into mass productionJuly 2023
August 2023
◎The Company released the industry's first DAG single-frame and high dynamic range 13-megapixel image sensor
◎The Company released image stabilization technology for the dynamic chip
December 2023◎The Company released two single-chip 50-megapixel image sensors
In 2023, the main R&D achievements obtained by the Company are as follows:
GALAXYCORE INC.
In 2024, the Company will continue its commitment to independent research and development, ensure steadyinvestment in R&D and actively implement the concept of "new quality productivity". Based on the Fab-litebusiness model, the Company makes innovation its primary driving force, aiming to create "high-tech,high-efficiency, high-quality" productivity. Leveraging the Company's pioneering high-pixel single-chip technologyand other advancements, we will accelerate the transformation and empowerment of core technologies intoproducts. This will steadily propel the Company's development, maintaining industry leadership and corecompetitiveness. In 2024, the Company plans to focus on the following R&D projects:
Project name
Totalprojectinvestment
Amountcumulativelyinvested
Progress orphasedresult
Objectivesto be achieved
Technologicallevel
Domesticallyleading
ApplicationprospectNo.
Upgrade the process ofdomestic fabs, research newprocess technology, logicarchitecture, digitalalgorithms, analog circuits,and packaging technologyso as to manufacturehigh-performance 0.7umBSI CMOS image sensors,and to meet the demand ofcustomers for BSI CMOSimage sensor chips higherthan 32M.
R&D of thesecond-generationBSI sub-micronhigh-pixel CMOSimage sensor chips
15,000.0014,035.93
Underresearch
CMOS imagesensor chips
4,500.002,685.86
4,200.002,120.96
4,000.003,222.02
R&D andindustrialization ofthe sixth-generationhigh-performance
1.12um BSI CIS
R&D andindustrialization ofthe application ofadaptive white pointremoval algorithmto 5M products
Underresearch
The project will upgrade theprocess of domestic fabsand manufacturehigh-performance 1.12umBSI CMOS image sensorsthat support video HDR.Improve the performance of5M products, raise testingefficiency and reduce overallproduct costs with theupgraded adaptive whitepoint removal algorithm.
Internationallyleading
CMOS imagesensor chips
Underresearch
Internationallyleading
CMOS imagesensor chips
R&D of thefirst-generation 4KCMOS imagesensor chips
Develop a high-performanceimage sensor featuring animage resolution of 4K(3840×2160), ultra-high lightsensitivity, very low noise andultra-high dynamic range.Underresearch
Internationallyleading
CMOS imagesensor chips
Domesticallyleading
Develop AMOLED displaydriver ICs for intelligentwearablesR&D of AMOLEDdisplay driver ICsfor intelligentwearables
7,800.006,582.28
Underresearch
Display driver ICs
76,500.0043,631.71Total
GALAXYCORE INC.
Project name
Totalprojectinvestment
Amountcumulatively
invested
Progress orphasedresult
Objectivesto be achieved
Technologicallevel
ApplicationprospectNo.
4,000.001,808.81
6,000.002,243.18
8,000.007,865.63
R&D of thefirst-generation 4KCMOS imagesensor chips with alarge sensor sizeR&D of theseventh-generationhigh-performance
1.12um BSI CIS
embedded OCF
Underresearch
Develop a high-performanceimage sensor featuring anoptical sensor size of 1/1.8,image resolution of 4K(2688×1520), high lightsensitivity, low noise andhigh dynamic range.Apply embedded OCF to
1.12um BSI CMOS
image sensors.
Domestically
leading
CMOS imagesensor chips
Underresearch
Domesticallyleading
CMOS imagesensor chips
R&D of thesecond-generationnew pixels
Develop a 0.64um 50M-pixelimage sensor, with a newpixel architecture adopted for
0.64um pixel to achieve full
isolation between pixels.Underresearch
Internationally
leading
CMOS imagesensor chips
Internationally
leading
Build high-performance
1.0um high-pixel products
based on lately developed
process and technology, logic
architecture, digital
algorithm, analog circuit, and
encapsulation technology.
R&D ofhigh-performance
1.0um high-pixel
CMOS image sensors
8,000.00203.41
Underresearch
8,000.0071.53
3,000.001,126.76
4,000.001,665.34
R&D of thethird-generation BSIsub-micronhigh-pixel CMOSimage sensor chipsR&D ofhigh-performanceand low-costQQVGA-resolutiondisplay driver ICs
Underresearch
Build high-performance 0.8um
BSI CMOS image sensors
based on lately developed
process and technology, logic
architecture, digital algorithm,
analog circuit, and
encapsulation technology.
Develop high-performance and
low-cost QQVGA-resolution
(128RGB*160)
display driver ICs.
Internationallyleading
CMOS imagesensor chips
CMOS imagesensor chips
Underresearch
Internationallyleading
CMOS imagesensor chips
R&D of thefirst-generationCMOS imagesensor chips
Develop a high-performance
image sensor featuring low
image resolution
consumption, high light
sensitivity, low noise and
high dynamic range.Underresearch
Domestically
leading
CMOS imagesensor chips
Delving deeper into demands, focusing on core business, andconsistently promoting the upgrading and iteration of products4.
Outstanding talent serves as the important foundationand driving force for the development ofsemiconductor enterprises, acting as the lifeblood oftechnological innovation. As of the end of 2023,GalaxyCore's R&D personnel increased by 227compared to the same period last year,representing a year-on-year growth of 49.56%.The Company places great emphasis on continuousinvestment and positive incentives for its R&D team.The Company aims to further improve the corporategovernance structure, establish and strengthen along-term incentive and constraint mechanism, attractand retain outstanding talent, fully motivate their
R&D personnel
increased
49.56%
year-on-year
increase
enthusiasm and creativity, and effectively enhance thecohesion of the core team and the corecompetitiveness of the enterprise. As part of thiseffort, the Company has formulated and released anincentive plan based on the revenue of product lineswith 13-megapixel and above as the assessmentindicator.In June 2023, the Board of Directors of the Companyapproved the 2023 Restricted Stock Incentive Plan,granting 9.5 million restricted stocks for the first time,accounting for 0.38% of the Company's current totalshare capital, at a price of RMB8.97 per share to 145eligible incentive recipients.In addition, the Company places great importance onidentifying and nurturing talents. In 2023, theCompany attained the status of the "Honored Partnerof the China Graduate Chip Innovation Contest". Tocontinuously strengthen its independent research anddevelopment capabilities and attract more new R&Dtalent, the Company plans to deepen its collaborationswith various universities and research institutions inthe future. This collaboration aims to promote talentcultivation, technological innovation, and knowledgesharing, nurturing new talent in the industry andcontinuously enhancing the influence of technologicalinnovation.
Improving the internalgovernance structure andstrengthening the responsibilityof “critical minority”
The Company has continuously improved the corporate governancestructure in accordance with relevant laws, regulations andnormative documents such as the Company Law of the People’sRepublic of China, the Securities Law of the People’s Republic ofChina, the Governance Rules of Listed Companies and the Guidelinesfor the Articles of Association of Listed Companies. At present, astandard operating system centered on the general meeting ofshareholders, the Board of Directors, special committees and seniormanagement has been established.In 2024, the Company will continue to optimize corporategovernance, strengthen communication with investors, and safeguardand protect the legitimate rights and interests of all shareholders.Specific priorities and plans are as follows:
Optimizing internal control andstrengthening compliance management1.
In December 2023, the Company concluded a freshround of Board of Directors elections. In March 2024,the Company revised the Articles of Association andthe rules of procedure of the special committees ofthe Board of Directors to optimize and formulate theprocedures and system for the selection andappointment of audit institutions, respectively; and inaccordance with the Administrative Measures forIndependent Directors of Listed Companies and theWorking Policy for Independent Directors, theCompany further clarified the responsibilities ofindependent directors, optimized their performance,assessed their independence on a regular basis, andgave full play to the role of independent directors.In 2023, the Company arranged for relevant personnelto attend various special training programs organizedby the Shanghai Stock Exchange and the ChinaAssociation for Public Companies to continuously
Implementing the requirements on independent director reform2.
In 2024, the Company will actively report on business operations and significant matters to independent directorsin various forms, including on-site meetings, site visits, and special reports on key matters. Relevant documentswill also be submitted to provide comprehensive and convenient conditions for independent directors to fulfilltheir duties. Additionally, the Company will prepare exclusive workplaces and environment for independentdirectors, and make the office of the Board of Directors the communication and coordination department toensure that independent directors can conduct on-site work efficiently and professionally for at least 15 workingdays each year. The Company will regularly assess the independence of independent directors to ensure theirindependence and impartiality in fulfilling their duties.
strengthen and improve the awareness of the "criticalminority" for compliance and their ability to theirduties. In 2024, the Company will continue to activelyorganize the directors, supervisors and seniormanagement to participate in trainings provided bythe CSRC and the Shanghai Stock Exchange, andplans to internally organize or invite externalintermediaries to carry out themed trainings for theCompany for no less than [4] sessions, with theproposed topics covering corporate governance oflisted companies, disclosure of information,performance of duties by independent directors andother latest policies and regulations. The Companywill also continuously improve the performance abilityand professional quality of the "critical minority" byorganizing relevant personnel to study the laws,regulations, and policies on the capital market, aimingto continuously improve its ability to operate in astandard manner.
Enhancing the effectivenessof information disclosure andnormalizing investorcommunication
Enhancing information disclosure and investor relations managementis an important measure for the Company to improve its governancelevel, enhance market transparency and establish a positivecorporate image. The Company has always attached greatimportance to information disclosure, and has conscientiouslyfulfilled its information disclosure obligations in strict accordancewith the Listing Rules of the Science and Technology InnovationBoard of the Shanghai Stock Exchange and the AdministrativeSystem of Information Disclosure Matters of the Company and otherrelevant regulations to disclose the Company’s periodic reports,interim announcements and other material information in a true,accurate, complete, timely and effective manner.The Company’s information disclosure was rated A in the 2022 -2023 information disclosure evaluation of listed companies on theShanghai Stock Exchange. In 2023, the Company disclosed a total of[65] interim announcements, submitted [4] periodic reports, held [3]results briefings, and disclosed ESG reports for two consecutiveyears.In 2024, the Company will continuously optimize informationdisclosure and investor relations management effortsin the following ways:
In periodic reports and interim announcements, the Company places great emphasis on optimizing thelanguage and structure of its announcements, using more accessible language and avoiding the use ofoverly professional or obscure terms to make the presentation of information clearer.◎
◎
When organizing online or offline briefings, visual interpretation is provided in the form of videos andcharts to help investors better understand the Company’s operating and financial conditions.◎By disclosing the ESG social responsibility report, the Company responds more comprehensively to theconcerns of the capital market and the public on the sustainable development of the Company from theperspective of conveying corporate social responsibility.◎
Improving the readability of information disclosure1.
After the disclosure of the annual and semi-annual results reports, the Company releases a series ofvisual reports called “Understand in One Graph” in a timely manner to interpret the reports moreintuitively and help investors better understand the Company’s operating results, financial conditions anddevelopment strategy.
Strengthening investor communications2.
In 2024, the Company will formulate no less than [12] investor roadshows/reverse roadshows to organize investorcommunication and exchange to understand the Company’s operations; and hold at least [3] results briefings,invite senior executives of the Company to interpret the results and answer investors’ questions. Additionally, theCompany will release relevant information on investor communication activities in form of Investor RelationsRecord Form.
Reinforcing the sharedresponsibilities and benefitsbetween the management andshareholders
In 2024, the Company will continue to improve its corporatemanagement model, further strengthen the mechanism of sharedresponsibilities and benefits between the management andshareholders, and promote the long-term andstable development of the Company.
Continuously building and refining ascientific compensation system1.
The Company’s compensation system adheres to thefundamental principles of creating valuecomprehensively, scientifically evaluating that value,and fairly distributing value. The compensationpolicies and plans for senior management are studied
and reviewed by the Company’s Compensation andEvaluation Committee and approved by the Board ofDirectors.The remuneration of senior management consists ofbasic salary and performance bonus, which are paidbased on the annual business performance andevaluation results. The performance appraisal andremuneration of the Company’s management arealigned with the long-term development andshareholders’ interests of the Company, and theCompany’s management and shareholders share risksand benefits, which is conducive to stimulating theenthusiasm of the management, safeguarding theinterests of the shareholders, and promoting thelong-term and stable development of the Company.
Focusing on exploring the establishment of a medium andlong-term incentive mechanism2.
To date, the Company has launched the Option Planand Restricted Stock Incentive Plan. The assessmentindexes of the Company’s incentive plan are set in ascientific and reasonable manner, and are binding onthe incentive objects, which is conducive to fully
safeguarding the interests of the Company’sshareholders and helping to strengthen the sharedresponsibilities and benefits between the managementand shareholders.The Company will continue to launch incentive plansin due course in the future, further establish andimprove the long-term incentive mechanism of theCompany. These efforts will integrate the interests ofshareholders, the Company and employees moreclosely, fully mobilize the enthusiasm and creativity ofoutstanding employees, and make all parties focus onthe long-term development of the Company.
Enhancing investor returnsand formulating share pricestabilization plans
Cash dividends1.
The Company has always valued investor returns.During the IPO period, the general meeting ofshareholders of the Company has approved theShareholders’ Dividend Returns Plan within ThreeYears upon the Public Offering and Listing ofGalaxyCore Inc., which stipulates the principles andpolicies of profit distribution, conditions for cashdividends, the proportion and time interval of cashdividends, as well as the dividend plan for the threeyears since the IPO date. The aforementioned plan isconducive to safeguarding the asset income rights ofall shareholders of the Company.In August 2023, the Company implemented theDistribution of the Company's FY2022 Profit and paida cash dividend of RMB0.03077 (inclusive of tax) forevery 10 shares to all shareholders, totaling a cashdividend of RMB79,964,819.59, accounting for 18.22%of the net profit attributable to the parent in 2022.
GALAXYCORE INC.
A reasonable dividend policy will be established in2024 to balance the dynamic balance between theCompany's growth, performance, capital demand, andshareholders' immediate and long-term interests. Inaccordance with the Articles of Association as well asrelevant laws and regulations, the Company willprioritize cash dividends as a method of distributingprofits. The Company plans to distribute no less than30% of the net profit attributable to the parentcompany as dividends in the coming year. TheCompany will seriously study the Opinions onStrengthening Supervision and Preventing Risks andPromoting the High-quality Development of theCapital Market, and formulate plans for increasing thefrequency of annual dividends and implementingmid-year dividends to enhance the sense ofachievement among investors through a "sustainable,stable and scientific" shareholders' return mechanism.
In May 2023, the Company issued the Repurchase Report, with acumulative repurchase amount of RMB150 million throughcentralized bidding.In February 2024, Mr. Zhao Lixin, the de facto controller andchairman of the Company, proposed share repurchase of theCompany. In March, the Board of Directors of the Companyconsidered and approved the proposal of repurchasing a totalamount of not less than RMB150 million (inclusive) and not morethan RMB300 million (inclusive) through centralized bidding.
GALAXYCORE INC.
Share repurchase2.
On August 5, 2022,the Company received theCommitment Letter on the Voluntary Extension of theLock-up Period by Shareholders issued by theshareholders. Keenway International Limited andHopefield Holding Limited, the shareholders of theCompany, voluntarily extended the lock-up period for175,000,000 shares and 175,000,000 shares, whichthey held in the Company’s initial public offering ofshares subject to limited selling conditions, for aperiod of six months from the date of expiry of thelock-up period on August 18, 2022 to February 18,2023. They have committed to abstain fromtransferring or reducing their respective shares in theCompany during this extended lock-up period.
Conveying Company confidence
.
In 2024, the Company will establish a share pricestabilization mechanism based on the capital marketconditions. If there is an excessive short-term declinein share price, a price falling below the issue price orbelow the value of net assets, the Company willproactively take corresponding measures to stabilizethe share price, such as share repurchase, increaseholdings of the Company's shares, and other efforts tostabilize the share price and enhance investorconfidence.
Board of Directors of GalaxyCore Inc.
April 25, 2024
Other matters
The Company will continuously evaluate the implementation of theimplementing plan for “Enhancing Quality and Increasing Efficiencyto Ensure Returns”, and promptly fulfill its information disclosureobligations. The Company will continue to focus on its main businessand enhance its core competitiveness, profitability and riskmanagement capabilities. By leveraging sound businessmanagement, standardized corporate governance, and positiveinvestor returns, the Company will effectively safeguard investors’interests, assume its responsibilities and obligations as a listedcompany, repay investors’ trust, uphold a positive market image forthe Company, and promote the stable and healthy development ofthe capital market.The Company’s plans and development strategies mentioned in thisreport are forward-looking statements that are not fait accompli, anddo not constitute substantial commitments of the Company toinvestors. Investors should be aware of the relevant risks.
stock abbreviation：GalaxyCoreStock code：688728
Howcasing China's Innovation AndThe Integrity Of Chinese Enterprises Worldwide