Stock Code: 6244
Motech Industries Inc.
2023 Annual Report
Issue date: April 22, 2024
Corporate website: https://www.motech.com.tw/
Motech Industries Inc.
Table of Contents
- Letter to Shareholders……………………………………………………………………
- Company Profile………………………………………………………………………….
- Corporate Governance
1. Organization…………………………… | …… | ..………………………………………. |
- Directors, Independent Directors, President, Vice Presidents, Assistant Vice Presidents and Managers of Departments and Branches………………………………
- Remuneration Paid to Directors, Independent Directors, President and Vice
Presidents in the Most Recent Year ………………………………………… | ……… | ... | |
4. | Corporate Governance Implementation………………………………… | ………….…. | |
5. | Audit Fees for CPA……………………………………………………………………. | ||
6. | Change of CPA……………………………………………………………………… | ... |
7. Details of the Company's Chairman, President, or Managers in Charge of Finance or Accounting Who Held a Position in the CPA's Firm or Its Affiliates in the Most
Recent Year… ………………………………………………………………………… | . |
8. Changes in Shareholding and Shares Pledged by Directors, Independent Directors, Managers and Shareholders with 10% Shareholdings or More in the Most Recent
Year and as of the Date of this Annual Report……………… | ……………………… | ... |
- Top 10 Shareholders Who are Related Parties, Spouses, or within Second-Degree of Kinship to Each Other…………………………………………………………………
- Number of Shares Held and Shareholding Percentage of the Company, the Company's Directors, Independent Directors, Managers and Directly or Indirectly
Controlled Entities on the Same Investee…………………………… | ……………… | .. |
IV. Capital Overview
Page
1
4
6
8
15
20
62
63
63
63
64
65
1. | Capital and Shares………………………………….…………………………………. | 66 | |
2. | Corporate Bonds………………………………………………………………………. | 70 | |
3. | Preferred Shares…………………………………………….…………………………. | 71 | |
4. | Global Depositary Shares……………………...………………………………… | …… | 71 |
5. | Employee Stock Options……………………...………….………………………… | … | 71 |
6. | Employee Restricted Stock……………………...……………………………… | …….. | 71 |
7. | New Share Issuance in Connection with Mergers and Acquisitions………………….. | 71 | |
8. | Execution of Financing Plans……………………...……………………… | ………….. | 71 |
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Operational Highlights
1. Business…………………………………………………….………………………….
2. Market and Sales Overview………………………………...…………………… | ……. |
3. Human Resources in the Past Two Fiscal Years and as of the Date of this Annual Report…………………………………………….……………………………………
73
78
82
4. | Expenditure Related to Environmental Protection… | …………………………………. | 83 | |||
5. | Employment Relations………………………….………………..…………………… | 83 | ||||
6. | Cyber Security Management……………….…….………………………………… | … | 86 | |||
7. | Material Contracts………………………….…………………………….…………… | 88 | ||||
VI. | Financial Highlights | |||||
1. | Condensed Balance Sheet and Statement of Comprehensive Income from 2019 to | |||||
2023…………………………………………….……………………………………... | 89 | |||||
2. | Financial Analysis from 2019 to 2023………………………….… | …………….…….. | 95 | |||
3. | Audit Committee's Review Report for 2023…………………… | …….………………. | 99 | |||
4. | Audited Consolidated Financial Statements for the Years Ended December 31, 2023 | |||||
and 2022………………………………………….…………………………………… | 100 | |||||
5. | Audited Parent Company Only Financial Statements for the Years Ended December | |||||
31, 2023 and 2022………………………………………….…………………………. | 168 | |||||
6. | Financial Difficulties Experienced by the Company and Its Affiliates in the Most | |||||
Recent Year and as of the Date of this Annual Report, and Their Impact on the | ||||||
Company's Financial Position………………………….……………….…………… | .. | 235 | ||||
VII. | Review and Analysis of Financial Position and Performance and Associated Risks | |||||
1. | Financial Position………………………….……………….…………………………. | 236 | ||||
2. | Financial Performance………………………………………………………………… | 237 | ||||
3. | Cash Flows………………………….……………….……………………………… | ... | 238 | |||
4. | Major Capital Expenditures in the Most Recent Year and Their Impacts on the | |||||
Company's Finance and Operation…………………………………………………… | 238 | |||||
5. | Reinvestment Policies in the Most Recent Year, Main Reasons for Investment Gains | |||||
or Losses, Improvement Plans, and Investment Plans of the Next Year……………… | 238 | |||||
6. | Risk Items to be Analyzed and Assessed in the Most Recent Year and as of the Date | |||||
of this Annual Report……… | ……………….……………….……………………… | .. | 240 | |||
7. | Other Significant Matters…………………………………….…………………. | ……. | 244 | |||
VIII. Special Notes | ||||||
1. | Affiliates………………………….…………………………….……………….…….. | 245 | ||||
2. | Private Placement of Securities in the Most Recent Year and as of the Date of this | |||||
Annual Report……………………….…………………………….………………… | .. | 248 | ||||
3. | The Company's Shares Held or Disposed of by Subsidiaries in the Most Recent Year | |||||
and as of the Date of this Annual Report…………………………. | ………………… | ... | 248 | |||
4. | Other Necessary Supplement………………………….………………… | .................... | 248 |
5. Any Events in the Most Recent Year and as of the Date of this Annual Report that had Significant Impacts on Shareholders' Rights or Security Prices as Stated in
Subparagraph 2, Paragraph 3, Article 36 of the Securities and Exchange Act……… | .. 248 |
I. Letter to Shareholders
To all shareholders:
Thank you all for your long-term support and encouragement to Motech Industries Inc.
In 2023, multiple factors including worldwide inflation and interest rate hikes, the U.S.-China trade dispute, the Russia-Ukraine war, and the economic slowdown in China posed challenges to the macroeconomic environment. Impacted by the market downturn, the Company delivered a less than satisfactory operating performance. However, the strong economic performance of Taiwan coupled with the pressing need for energy transition allowed the Company to remain profitable in 2023 with efforts from all employees. The outcome was also an indication that our long-term involvement in the development of high-efficiency modules had earned positive feedback from the market. Taiwan accomplished a record-high grid capacity of 2.7GW in 2023, and is channeling efforts toward the goal of reaching 20GW by 2025. Furthermore, the "12 Key Strategies" announced by Executive Yuan at the end of 2022 clearly pointed out that the cumulative installed capacity of PV shall rise to 31GW by 2030. We therefore expect the market to exhibit a steady growth and we would strive for improvement on the basis of stability.
1. 2023 Operating Results
- Outcome of operating plans
(In Thousands of New Taiwan Dollars)
Items | 2023 | 2022 | ||||||||
Consolidated operating revenue | 4,065,981 | 100.0% | 5,359,978 | 100.0% | ||||||
Consolidated gross profit (loss) | 677,424 | 16.7% | 693,907 | 12.9% | ||||||
Consolidated operating income | 323,417 | 8.0% | 336,695 | 6.3% | ||||||
(loss) | ||||||||||
Consolidated income (loss) | 229,585 | 5.6% | 275,934 | 5.1% | ||||||
before tax | ||||||||||
Consolidated net income (loss) | 224,317 | 5.5% | 272,317 | 5.1% | ||||||
Consolidated net income (loss) | ||||||||||
attributable to shareholders of | 218,168 | 5.4% | 267,882 | 5.0% | ||||||
the parent company | ||||||||||
Earnings per share (NT$) | 0.56 | 0.73 | ||||||||
In 2023, module sale was a key component of consolidated revenue. The Company completed production upgrade by the end of 2022, securing a leading position in the M6 cell technology competition. Large-sized TOPCon modules have been VPC-certified with a winning conversion efficiency. The benefits of product portfolio optimization emerged in 2023, contributing to gross margin improvement. We also persistently seek breakthroughs in power station construction. By the end of 2023, the grid capacity was approximately 40MW, and as construction progresses, a significant increase in capacity is expected at the end of 2024.
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Implementation status of budget
The Company did not release financial forecasts in 2023; thus, it was not required to disclose the implementation status of budget. - 1 -
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Financial position and profitability analysis
The Company generated consolidated operating revenues of NT$4,066 million in 2023, a decrease of 24.1% from NT$5,360 million in 2022. Consolidated gross profit amounted to NT$677 million, a decrease of 2.4% from NT$694 million in the previous year. Gross margin equaled 16.7%, up from 12.9% in 2022. Consolidated net income was NT$224 million with net income attributable to shareholders of the parent company of NT$218 million and an earnings per share of NT$0.56. - Research and development:
The shift towards large-size solar modules in the global market prompts the Company to draw upon its industry-leading experience in TOPCon M6 development to have a full-scale upgrade to large-size M10 production in order to align with the international market. Moreover, the Company would accelerate its factory-wide switch to TOPCon capacity, which is projected to be an important driver of profitability. The materials and components of TOPCon cell allow it to generate higher power output than other products in dim light or under scorching sun. Its excellent power generation efficiency and low degradation rate make it a perfect solution for Taiwan's climates. As TOPCon improves the return of investment on solar power stations, it is gaining wide popularity in the market.
2. Overview of 2024 Business Plan
- Business policy
- Channel efforts on the mass production of next-generationN-type TOPCon modules, improve the conversion efficiency and enhance existing production lines. Upgrade to a larger size to meet market demand.
- Continue to initiate solar power system projects to expand our stable revenue streams.
- Continuously increase our green energy trading channels and electricity sales revenue, and seize business opportunities from major electricity consumers.
- Extend the field of fishery and electricity symbiosis, seeking cross-industry alliances to expand PV applications.
- Sales forecast and basis
In terms of the global market, boosted by strong green energy demand, the market research institution PV InfoLink predicts the worldwide PV module demand to maintain a growth rate above 15% in 2024. However, uncertainties in the market, including the digestion of accumulated inventory, the need to expand the capacity of power grids, the increase in global production capacity and the promotion of energy localization by various countries, have pushed the market to turn cautious, testing the players' resilience in areas of costs, sales and research and development.
As for Taiwan, statistics of the Energy Administration, Ministry of Economic Affairs showed that the cumulative installed solar PV capacity reached 12.4GW in 2023. The election at year end had delayed the development and review of large-scale facilities in the fourth quarter. The gap to be bridged between current capacity and the goal of 20GW by 2025 is favorable to the Company's module and power business. In the face of recent competitions due to large imports of modules from Southeast Asia, the Company plans to attract customers with high-efficiency products such as N-type TOPCon, increase the proportion of exports, and implement product upgrades in response.
- Key production and sales policies
- Continue to maintain long-term cooperation with customers and provide quality products and services aligned with demand of customers and markets.
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- Boost our market share in Taiwan, continuously expand our export markets, and actively explore emerging regions to initiate diverse sales mix.
- Focus on the development and application of high-efficiency products.
- Emphasize quality improvement and production cost reduction.
- Strategies for Future Developments
- Enhance the technical level of solar cells and module products.
- Improve product quality and yield.
- Offer diverse product mixes to satisfy customer demand.
- Improve product marketing and sales potential and aggressively explore new markets.
- Streamline management to enhance business management performance.
- Fulfill our corporate social responsibility and pursue sustainability.
- Proactively explore new businesses on our own or through strategic joint ventures, and adopt diversification to mitigate operating risks.
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Impacts from External Competitions, Regulatory Compliance and Macro-environment
In terms of industrial policy, the Taiwan government announced the "Taiwan's Pathway to Net-Zero Emissions in 2050" in March 2022 as the ac tion pathway and released the "12 Key Strategies" in December of the same year as action plans. In February 2023, the Climate Change Response Act was amended to impose a carbon fee for the first time; and in May 2023, the Renewable Energy Development Act was amended to stipulate that buildings meeting certain conditions shall have solar power generation facilities with a certain installation capacity or above installed on the roofs. The Act also requires major electricity consumers to have their installed renewable energy capacity accounted for 10% of their contract capacity by 2025 (i.e., within five years). Through the government's policies and amendments to laws and regulations, as well as the cooperation of the private sector, Taiwan is gradually moving toward energy transition that will also prompt industry growth.
ESG has gained significant attention in the capital market in recent years and has been a long-standing goal of the Company. The Company measures its relationship with environmental protection, social responsibility and corporate governance through quantitative metrics. We have long been devoted to the green energy industry, and serve consumers with core technology and long-term warranty. In recent years, we have been actively constructing solar power plants to create a steady source of profitability. We value corporate governance and discipline, and aim to expand our investment in the green energy industry, setting the stage for future success.
Sincerely yours,
Chairman Yung-Hui Tseng
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II. Company Profile
1. Date of Incorporation
Motech Industries Inc.: June 3, 1981
Motech Industries Inc., Science Park Branch: June 24, 1999
2. Company History
1981 | - | Officially established in June with an authorized capital of NT$2,000,000. Mainly |
engaged in the production and selling of digital multimeters (DMM). | ||
1990 | - | Acquired factories and equipment and moved from Xinyi Road in Taipei City to |
ShenKeng in New Taipei City. | ||
1999 | - | The Science Park Branch obtained company license issued by the MOEA and |
became the first solar cell manufacturer in Taiwan. | ||
2003 | - | Officially listed on TPEx. |
2005 | - | Ranked among the top ten solar cell manufacturers worldwide. |
2006 | - | The second factory of the Science Park Branch was completed and in operation in |
the second half of the year. | ||
2007 | - | The first solar cell manufacturer in Taiwan to obtained certifications of both |
ISO-14001 Environmental Management System and OHSAS 18001 Occupational | ||
Health and Safety Management System in Taiwan. | ||
2009 | - | The full range of our solar cells passed the TUV Rheinland REACH-SVHC testing |
and obtained the certification. | ||
2010 | - | The world's first solar cell to complete the carbon footprint verification. |
- Xingda Power Plant of Taipower under construction contract won the Excellence | ||
Award of MOEA. | ||
2011 | - Xingda Power Plant of Taipower under construction contract won the Gold Quality | |
Award of Executive Yuan. | ||
- Won the 14th Outstanding PV Product Award of Photonics Industry & Technology | ||
Development Association with the multicrystalline solar cells, IM156 B3. | ||
- | The first PV inverter manufacturer in Asia to obtain the certification for | |
VDE-AR-N 4105 guideline with the PV inverters, PVMate 3300MS~4600MS | ||
models. | ||
- | Won the "Outstanding Market Value and Revenue Award" in the 1st Golden Laurel | |
Award for TPEx-listed Companie of the Taipei Exchange. | ||
2014 | - | The first enterprise in the world to obtain the certification from British Standards |
Institution (BSI) for the corporate social responsibility report. | ||
- | Won the Golden Award for Large Technology and Electronics Manufacturing | |
Enterprises of the Taiwan TOP 50 Corporate Sustainability Report Award. | ||
2015 | - | Merged with Topcell Solar International Co., Ltd. After the merger, the capital was |
raised NT$456,720,000 to NT$4,869,054,080. | ||
- Established Motech (Maanshan) Renewable Energy Co., Ltd. with a focus on solar | ||
cell and module business. | ||
2016 | - | Established the joint venture, Teco-Motech Co., Ltd., with Teco Group to engage in |
the generation and selling of solar power of PV systems. | ||
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2017 | - | Established Motech Power One Co., Ltd., which specialized in the generation and | |||
selling of solar power. | |||||
- Won Bronze Award | in the 26th Annual Enterprises Environmental Protection | ||||
Award, the first solar cell manufacturer in Taiwan to receive the award. | |||||
2018 | - | Established Motech Power Gamma Co., Ltd. and Motech Power Beta Co., Ltd. to | |||
engage in the generation and selling of solar power of PV systems. | |||||
2019 | - Completed the "tunnel oxide passivated contact for high efficiency N-type silicon | ||||
solar cells" project in cooperation with the Industrial Technology Research | |||||
Institute (ITRI). | |||||
- Completed the green energy flagship industry-academia-research alliance project | |||||
in collaboration with the Ministry of Science and Technology. | |||||
- Completed the certification of high-power 330W mono-crystalline modules, and | |||||
the development of high-power 340W mono-crystalline modules and 335W | |||||
double-glass modules. | |||||
- | Completed the short-form merger with Taiwan Solar Module Manufacturing | ||||
Corporation to enhance operational efficiency. | |||||
- Established Motech Power Zeta Co., Ltd. to engaged in the generation and selling | |||||
of solar power of PV systems. | |||||
- Received the Taiwan Excellent PV Module Award of Bureau of Energy, MOEA. | |||||
2020 | - | Entered a three-year syndicated loan agreement with a consortium for an amount | |||
equivalent to NT$1.68 billion. | |||||
- | Completed the short-form merger with Motech Energy System Co., Ltd. to | ||||
enhance operational efficiency. | |||||
- Carried | out capital | reduction for loss | compensation. Reduced capital to NT$ | ||
3,550,418,750. | |||||
- Completed the development of ultra-high efficiency N-type TOPCon cells with | |||||
ITRI. The MoPower-360 PV module had an efficiency exceeding 21%. | |||||
- Completed the certification of high-power 360W mono-crystalline modules and | |||||
passed the tests of Taiwan Excellent PV Award. | |||||
2021 | - | Completed the development of ultra-high efficiency N-type TOPCon cells with | |||
ITRI. The conversion efficiency of MoPower-400 PV module could reach a | |||||
maximum of 22%. | |||||
2022 | - | Raised | capital to | NT$3,870,418,750 | through a cash capital increase of |
NT$320,000,000. | |||||
- Completed the development of ultra-high efficiency N-type TOPCon cells with ITRI. The conversion efficiency of MoPower-410 PV module could reach a maximum of 22.5%.
- Our solar modules and cells received the Taiwan Excellent PV Product Award of Bureau of Energy, MOEA.
- Won the "Excellence Award for Cooperation in Employee Salary Survey" of Directorate General of Budget, Accounting and Statistics of Executive Yuan.
2023 - Completed the development of ultra-high efficiency N-type TOPCon cells with ITRI. The conversion efficiency of MoPower-485 PV module could reach a maximum of 24.5%.
- Completed the development of agro-photovoltaics modules with ITRI. The light transmission rate exceeded 40-50%.
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III.Corporate Governance
1. Organization
- Organizational Structure
Internal
Audit Office
Shareholders' | Board of Directors | President | |||||
Meeting | Chairman Office | Office | |||||
Compensation Audit
Committee Committee
As of December 31, 2023
Finance & Accounting
Division
Legal Department
Technology
Development &
Production Division
General Administration Management Division
Commerce Division
Power System Division
Aquaculture Department
Taiwan Procurement
Department
Energy Technical
Service Department
Industrial Safety
Department
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(2) Functions of each department
Departments | Functions | ||
- Establish the directions of corporate business development, | |||
Chairman Office | operating objectives and corporate governance | ||
- | Supervise the strategy planning and major operating | ||
decision-making | |||
- Formulate and execute business strategies and objectives | |||
President Office | - Integrate products and services to develop competitive | ||
business models | |||
- Drive and coordinate annual production and business plans | |||
Internal Audit Office | - Perform audits and exception analyses on company-wide | ||
business, finance and operation and make recommendations | |||
for improvement | |||
Finance & Accounting | - | Responsible for operations associated with finance, | |
Division | accounting, tax and investor relations | ||
Legal Department | - | Legal affairs and management of intellectual property rights | |
- Work management, production yield improvement, R&D | |||
project promotion, technology enhancement and training of | |||
Technology | technology department; formulation of operation planning | ||
and quality strategies, and quality assurance of raw materials | |||
Development & | |||
and finished goods; manufacturing of solar cells and modules | |||
Production Division | |||
in Taiwan and China, and cross-departmental integration of | |||
resources for continuous improvement on manufacturing | |||
processes | |||
- | Responsible for the human resource and organization | ||
General Administration | developments, and public affair management in Taiwan | ||
Management Division | - | Integrated planning, maintenance and management of | |
information, network and communication systems | |||
Commerce Division | - | Responsible for the sales of solar cells and modules | |
- Responsible for solar power station investments (system | |||
Power System Division | development and relationship strengthening; development of | ||
fishery and electricity symbiosis and collection of market | |||
intelligence; installation, troubleshooting and maintenance of | |||
solar panel project) | |||
- Management of aquaculture projects related to fishery and | |||
Aquaculture Department | electricity symbiosis (including regulatory analysis and | ||
scheme evaluation, permit application and progress tracking, | |||
and communication with farming operations and partner | |||
firms). | |||
Taiwan Procurement | - Management of procurement and import and export | ||
Department | |||
Energy Technical Service | - | Responsible for the after-sale service of inverters | |
Department | |||
Industrial Safety | - | Integration management over safety, environmental | |
Department | protection and health of each factory | ||
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Motech Industries Inc. published this content on 17 June 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 17 June 2024 08:19:03 UTC.