BEKEN(603068)2023-05-30 16:00Financial Performance - The company's operating income for the current period was RMB 713,221,412.08, with a cost of RMB 529,865,165.67[7] - The company's net profit attributable to the parent company for the current period was a loss of RMB 238,060,644.74[6] - The company's retained earnings at the end of the period were RMB 125,643,267.38, a significant decrease from the previous period's RMB 393,959,905.32[6] - Net profit decreased to -241,380,763.89 yuan from 58,463,643.79 yuan in the previous period[21] - The company achieved consolidated operating revenue of RMB 713.22 million in 2022, a year-on-year decrease of 34.87%, and a net profit attributable to the parent company of RMB -238.06 million, including inventory impairment provisions of RMB 149 million and share-based payment expenses of RMB 44 million[102] - Total revenue decreased by 34.87% to RMB 71,322.14 million, with a 0.27 percentage point reduction in gross margin[104] - Revenue from outside mainland China decreased by 28% to RMB 33,849.91 million, with a 1.26 percentage point reduction in gross margin[104] - Direct sales revenue decreased by 58.24% to RMB 17,584.09 million, with a 5.13 percentage point reduction in gross margin[104] - Distribution sales revenue decreased by 20.26% to RMB 53,738.05 million, with a 0.35 percentage point increase in gross margin[104] - Revenue from wireless data transmission products declined due to slowing sales of Wi-Fi and Bluetooth products, impacted by reduced consumer electronics demand[105] - Revenue from mainland China decreased by 40%, while revenue from outside mainland China decreased by 28%, with the company actively expanding new sales channels[105] - Top five customers accounted for 78.10% of total annual sales, amounting to RMB 55,699.89 million[106] - Total operating revenue for 2022 was 713,221,412.08, a decrease of 34.9% compared to 1,094,992,693.75 in 2021[170] - Operating costs in 2022 were 529,865,165.67, down 34.6% from 810,492,633.95 in 2021[170] - Revenue for 2022 decreased to 455,522,592.22 from 749,816,628.89 in 2021, a decline of 39.2%[174] - Net loss for 2022 was -250,697,914.56 compared to a net profit of 32,840,818.87 in 2021[174] - Basic and diluted earnings per share were -1.67 in 2022, down from 0.20 in 2021[175] - Comprehensive income for 2022 was -255,697,914.56, compared to 32,840,818.87 in 2021[175] - The company's total comprehensive income for the period was RMB -255,697,914.56[185] - The company's total owner's equity at the beginning of the year was RMB 1,996,480,434.56[185] - The company's total owner's equity at the end of the period was RMB 1,755,134,968.11[185] - The company's total comprehensive income for the previous period was RMB 58,226,753.16[182] - The company's total owner's equity at the beginning of the period was RMB 1,988,391,374.13[182] R&D and Innovation - The company received government subsidies totaling RMB 18,463,466.91, including RMB 7,800,000 for the ANC headphone audio chip R&D and industrialization project[12][13] - Government subsidies for R&D and other projects totaled 18,463,466.91 yuan, including 1,120,000 yuan for IoT application chip development and 7,800,000 yuan for ANC headphone audio chip R&D[26][27] - R&D expenses in 2022 increased by 32.18% to 287.6853 million yuan, accounting for 40.34% of the revenue[88] - R&D expenses increased by 32.18% to RMB 28,768.53 million, reflecting the company's focus on innovation[107] - R&D expenses increased to 247,064,693.95 in 2022, up 34.3% from 183,939,321.59 in 2021[174] - The company has 355 employees, with 317 (89.30%) being R&D personnel, and holds 142 invention patents in China and the US, covering key areas such as energy consumption, noise reduction, filtering, and wake-up in wireless RF[99] - The company's low-power IC design capabilities are highly competitive, with significant IP accumulation in low-power power management circuits, RF transceivers, frequency synthesizers, and oscillators[100] Government Subsidies and Financial Income - The company received government subsidies totaling RMB 18,463,466.91, including RMB 7,800,000 for the ANC headphone audio chip R&D and industrialization project[12][13] - Government subsidies received increased to 20,861,679.54 yuan from 5,342,943.61 yuan in the previous period[18] - Government subsidies for R&D and other projects totaled 18,463,466.91 yuan, including 1,120,000 yuan for IoT application chip development and 7,800,000 yuan for ANC headphone audio chip R&D[26][27] - Financial interest income increased to 37,937,425.36 yuan from 12,169,157.18 yuan in the previous period[18] - Interest income rose to 37,905,004.03 in 2022, a significant increase from 12,158,075.82 in 2021[174] Inventory and Asset Management - The company incurred a significant inventory impairment loss of RMB 148,658,210.73[14] - Inventory value as of December 31, 2022, was RMB 380,228,639.98, with a provision for inventory impairment due to intense market competition[164] - Total non-current assets amounted to RMB 420,389,120.60, while total assets were RMB 2,019,656,840.36[168] - Total current liabilities were RMB 204,957,059.27, with short-term borrowings at RMB 25,976,657.56[168] - Total liabilities amounted to RMB 222,141,698.51, with non-current liabilities at RMB 17,184,639.24[168] - Total equity attributable to the parent company was RMB 1,799,855,261.00, with a minority interest of RMB -2,340,119.15[169] - Capital reserve stood at RMB 1,473,849,804.80, while undistributed profits were RMB 125,643,267.38[169] - Total liabilities and equity amounted to RMB 2,019,656,840.36[169] - Total assets decreased from RMB 2,332,606,162.08 in 2021 to RMB 1,797,515,141.85 in 2022, a decline of approximately 22.9%[157] - Total liabilities decreased from RMB 306,165,383.99 in 2021 to RMB 222,141,698.51 in 2022, a decline of approximately 27.4%[157] - The asset-liability ratio decreased from 13.13% in 2021 to 11.00% in 2022[157] - Total assets decreased by 8.7% to 2,176,544,258.34 in 2022 from 2,383,439,337.13 in 2021[172] - Total liabilities increased by 8.9% to 421,409,290.23 in 2022 from 386,958,902.57 in 2021[172] - Owner's equity decreased by 12.1% to 1,755,134,968.11 in 2022 from 1,996,480,434.56 in 2021[173] - Fixed assets slightly decreased to 51,127,983.87 in 2022 from 51,750,083.92 in 2021[172] - Intangible assets decreased to 72,832,828.98 in 2022 from 74,257,062.44 in 2021[172] - Deferred tax assets increased by 64.2% to 34,853,596.09 in 2022 from 21,232,840.13 in 2021[172] - Total equity at the end of 2022 was 1,799,855,261.00, slightly down from 1,988,391,374.13 at the end of 2021[180] Share Repurchase and Incentive Plans - The company repurchased and canceled 855,000 restricted shares at a price of RMB 36.03 per share, totaling RMB 30,805,650[2] - The company terminated its 2021 stock option and restricted stock incentive plan, resulting in the cancellation of 2.13 million stock options and the repurchase of 815,000 restricted shares[41][42] - The company terminated the 2021 stock option and restricted stock incentive plan and repurchased and canceled the restricted stocks[56] - The company terminated its 2021 stock option and restricted stock incentive plan in December 2022, canceling 2.13 million stock options for 53 incentive recipients and repurchasing 855,000 restricted shares for 37 incentive recipients[153] - The company's total share capital decreased by 855,000 shares, resulting in a total of 150,424,966 shares, maintaining a 100% ownership structure[152] - The company terminated the 2021 stock option and restricted stock incentive plan in December 2022, canceling 2.13 million stock options and repurchasing 855,000 restricted shares[156] - The number of restricted shares decreased from 45,415,103 in 2021 to 0 in 2022[156] - The number of unrestricted shares increased from 105,864,863 in 2021 to 150,424,966 in 2022[156] - The company granted 860,000 restricted shares of RMB ordinary shares (A shares) to 38 incentive recipients, including senior and middle-level management and core technical (business) personnel, at a grant price of RMB 36.03 per share[189] - The company granted 2,130,000 stock options to 53 senior and middle-level management and core technical (business) personnel[189] Subsidiaries and Ownership - The company has 100% ownership in subsidiaries such as Broadcom Integrated Circuit (Hong Kong) Co., Ltd., Broadcom Integrated Technology (Shenzhen) Co., Ltd., Broadcom Integrated Technology (Beijing) Co., Ltd., Broadcom Integrated Circuit (Zhejiang) Co., Ltd., and Adveos Microelectronic Systems P.C. [30] - The company holds a 51% stake in Shanghai Bolelisk Technology Co., Ltd. [30] - The company has established new subsidiaries in Qingdao and Shanghai, namely Broadcom Microelectronics (Qingdao) Co., Ltd. and Shanghai Ansai Microelectronics Co., Ltd., both with 100% ownership [30] - The company's consolidated financial statements include subsidiaries such as Broadcom Integrated Circuits (Hong Kong) Co., Ltd. and Broadcom Integrated Technology (Shenzhen) Co., Ltd.[190] - The company's subsidiaries also include Broadcom Integrated Technology (Beijing) Co., Ltd., Broadcom Integrated Circuits (Zhejiang) Co., Ltd., and Adveos Microelectronic Systems P.C.[191] Risk Management - The company's financial risk is primarily related to credit risk, with major exposure in monetary funds, receivables, and other financial assets[28] - The company faces liquidity risk and manages it by monitoring cash balances, marketable securities, and rolling 12-month cash flow forecasts to ensure sufficient funds for debt repayment [32] - The company's primary interest rate risk stems from short-term bank borrowings [33] - The company is exposed to exchange rate risk due to financial assets and liabilities denominated in USD [34] - The company faces other price risks related to equity investments, which are subject to market price fluctuations [35] - Intense competition from international giants like Qualcomm and MediaTek, as well as domestic IC design companies, poses a significant market risk[115] - Potential talent loss due to competitive offers from rivals could impact R&D and technological capabilities, affecting profitability[115] - Supplier concentration and potential capacity shortages during peak IC production seasons could disrupt supply chain stability[116] Corporate Governance and Leadership - Key management personnel compensation for the current period amounted to 6.9157 million RMB, compared to 7.5347 million RMB in the previous period [39] - The company's board of directors' compensation and assessment committee evaluated senior management based on performance and operational indicators, linking their compensation to the company's asset status, profitability, and annual business objectives[57] - Total compensation for directors, supervisors, and senior management at the end of the reporting period was 6.9157 million yuan[63] - The company held five board meetings in 2022, with resolutions published in corresponding announcements[64][65] - Independent directors receive fixed allowances approved by the shareholders' meeting, while senior management compensation consists of basic salary and year-end bonuses[63] - The company's board of directors includes independent non-executive directors from major corporations such as Henderson Land Development and VTech Holdings[61] - Key executives hold multiple directorships across various technology and investment companies, including Sensethink Technology and Brizan Investment[60][61] - The company's governance structure includes a compensation and assessment committee responsible for reviewing senior management remuneration[63] - The company maintains a diversified leadership team with directors holding positions in semiconductor, robotics, and investment sectors[60][61] - The company's board resolutions and governance practices are documented and disclosed in accordance with regulatory requirements[64][65] - The company's Audit Committee held 4 meetings in the reporting period, reviewing financial reports and accounting policy changes[68][69] - The Compensation and Assessment Committee held 1 meeting to review executive compensation for 2022[70] - All directors attended all 5 Board meetings in 2022, with no consecutive absences[66] - Key executives include Pengfei Zhang, who holds multiple director positions across various shareholder entities[121] - Wang Weifeng, Vice President, has extensive experience in chip design, previously working at Huawei and Broadcom Limited[122] - Xu Xiuhui, CFO, brings over a decade of financial management experience from KPMG and other firms[122] Employee and Talent Management - Total number of employees in the parent company and major subsidiaries is 355, with 173 in the parent company and 182 in major subsidiaries[72][73] - The company has 317 R&D personnel, accounting for 89.3% of the total workforce[73] - Employee education breakdown: 19 PhDs, 157 Masters, 159 Bachelors, and 20 with college or lower degrees[73] - The company implemented a differentiated salary system, with compensation consisting of base salary and bonuses[74] - The company maintains a comprehensive training system combining internal and external programs to develop talent[75] - Total number of employees increased by 33 to 355 by the end of 2022[89] Legal and Regulatory Compliance - The company's litigation against Li Tong Technology and Shanghai Kaihuang Electronics for patent infringement was withdrawn, with the court approving the withdrawal of the lawsuit[145] - The company's litigation in the U.S. District Court for the Western District of Texas against Li Tong Technology for patent infringement is ongoing, seeking damages and legal fees[145] - The company held 5 board meetings and 5 supervisory board meetings in 2022, all compliant with legal and regulatory requirements[118] - All shareholder meeting proposals in 2022 were passed without any rejections[120] - The company's internal control audit was conducted by Lixin Accounting Firm, with an audit fee of 100,000 RMB[144] - The company's financial statements are prepared in accordance with the "Accounting Standards for Business Enterprises" issued by the Ministry of Finance and relevant regulations of the China Securities Regulatory Commission[192] - The company's financial statements truly and completely reflect the consolidated and parent company's financial position as of December 31, 2022, and the consolidated and parent company's operating results and cash flows for the year 2022[193] - The company's operating cycle is 12 months[195] - The company's accounting treatment for business combinations under common control and non-common control is applicable[196] - The company's cash and cash equivalents include cash on hand and deposits that can be used for payment at any time, as well as short-term, highly liquid investments that are readily convertible to known amounts of cash and subject to insignificant risk of changes in value[199] - The company's functional currency is RMB[200] Non-Compete and Related-Party Transactions - The controlling shareholder and actual controllers of Beken Corporation have committed to avoiding any business activities that compete with Beken, ensuring no conflicts of interest or unfair advantages are taken[135] - Any violation of the non-compete commitments by the controlling shareholder or actual controllers will result in penalties, including cessation of competitive activities, payment of profits from such activities, and compensation for losses[135] - The commitments made by the controlling shareholder and actual controllers are irrevocable and remain effective as long as they hold their positions in Beken Corporation[135] - Beken Corporation and its subsidiaries will minimize related-party transactions, ensuring transactions are conducted with independent third parties under fair market conditions[135] - Related-party transactions between Beken Corporation and its controlling shareholder or actual controllers will be conducted at government or market prices, with strict adherence to legal procedures and avoidance of conflicts of interest[135] - The controlling shareholder and actual controllers have pledged not to exploit their positions for personal gain or to harm the interests of Beken Corporation and its minority shareholders[135] - The company will strictly avoid borrowing or occupying funds from Broadcom Integration, and will not use methods such as advance payments or debt repayment to encroach on Broadcom Integration's funds[136] - All necessary transactions between the company and Broadcom Integration will be conducted in compliance with market principles, ensuring fairness and reasonableness[136] - The company will sign written contracts or agreements for all related transactions with Broadcom Integration and strictly follow the necessary legal procedures[136] - The company guarantees not to seek any improper benefits through related transactions or impose any improper obligations on Broadcom Integration[136] - The company will strengthen the supervision of raised funds to ensure their reasonable and legal use[136] - The company