GH-Tech(000004)2023-05-29 16:00Financial Performance - In 2021, the company's operating revenue was ¥288,944,181.62, representing a 3.00% increase from ¥280,531,008.22 in 2020[23]. - The net profit attributable to shareholders was -¥509,107,298.88 in 2021, a significant decline of 887.81% compared to a profit of ¥64,623,126.77 in 2020[23]. - The net cash flow from operating activities decreased by 21.95% to ¥3,101,531.46 in 2021 from ¥3,973,925.97 in 2020[23]. - The total assets at the end of 2021 were ¥1,110,569,957.85, down 28.97% from ¥1,563,562,870.86 at the end of 2020[23]. - The net assets attributable to shareholders decreased by 34.95% to ¥947,687,384.87 at the end of 2021 from ¥1,456,803,734.35 at the end of 2020[23]. - The company reported a basic earnings per share of -¥3.1566 in 2021, a decrease of 906.28% from ¥0.3915 in 2020[23]. - The weighted average return on equity was -42.35% in 2021, down 46.89% from 4.54% in 2020[23]. - The company experienced a significant loss in the fourth quarter of 2021, with a net profit attributable to shareholders of -¥542,843,915.60[27]. - The company's total revenue for 2021 was approximately ¥288.94 million, representing a 3.00% increase compared to ¥280.53 million in 2020[69]. - Revenue from mobile network security business decreased by 31.47% to ¥191.77 million, accounting for 66.37% of total revenue[67]. - Emergency business generated ¥70.95 million, contributing 24.55% to total revenue, while smart business added ¥2.09 million, making up 7.23%[67]. Internal Control and Governance - The company reported a significant internal control deficiency in revenue recognition, leading to premature revenue recognition issues[4]. - The audit report for the fiscal year 2021 issued by the accounting firm contained a qualified opinion, highlighting concerns regarding financial statement accuracy[4]. - The company has established a relatively complete and reasonable corporate governance structure and internal control system, complying with relevant laws and regulations[130]. - The company has a fully independent financial department with a standardized financial accounting system and independent financial management for subsidiaries[134]. - The company has implemented systematic training and learning for employees regarding financial management and internal controls to enhance compliance[131]. - The company has maintained a complete and independent business operation capability, with no competition with its controlling shareholder in daily operations[134]. - The company has conducted regular board meetings and shareholder meetings to ensure clear responsibilities and protect investor rights[132]. - The company is committed to strengthening its internal control and management practices in response to ongoing internal and external changes[130]. - The internal control audit report indicated significant deficiencies in financial reporting, particularly regarding goodwill impairment and revenue recognition[168]. - The company emphasized the importance of internal control systems to protect shareholder interests and ensure compliance with regulations[164]. Research and Development - The company reported a 36.27% increase in R&D expenses, totaling ¥31,762,562.45 in 2021, reflecting a strategic focus on enhancing research and development capabilities[83]. - The company's R&D investment amounted to ¥47,845,162.91 in 2021, representing a 45.89% increase from ¥32,795,527.56 in 2020[86]. - R&D investment accounted for 16.56% of operating revenue in 2021, up from 11.69% in 2020, an increase of 4.87%[86]. - The number of R&D personnel increased to 194 in 2021, a rise of 31.97% from 147 in 2020[86]. - The proportion of R&D personnel in the company reached 69.53% in 2021, up from 55.68% in 2020, an increase of 13.85%[86]. - The company completed the construction of an Android sandbox system, enabling automated detection of over 120 behaviors and generating reports in approximately 30 minutes[85]. - The company achieved a coverage of 1.8 million app detections throughout the year[85]. - The capitalized amount of R&D investment was ¥16,082,600.46 in 2021, a 69.52% increase from ¥9,487,035.56 in 2020[86]. - The capitalized R&D investment accounted for 33.61% of total R&D investment in 2021, up from 28.93% in 2020, an increase of 4.68%[86]. Market and Industry Trends - The network security market in China was approximately 53.2 billion RMB in 2020, with a year-on-year growth rate of 11.3%[34]. - The market is expected to grow at a rate of 15% from 2021 to 2023, reaching over 80 billion RMB by 2023[34]. - The national "14th Five-Year Plan" emphasizes the need to strengthen network security infrastructure and capabilities[38]. - The network security industry is projected to exceed 250 billion RMB by 2023, with a compound annual growth rate of over 15%[38]. - The mobile application security industry is expected to experience rapid growth due to increased regulatory measures and the rising frequency of security incidents[108]. - Emerging technologies such as cloud computing and artificial intelligence are creating new security challenges for mobile applications, necessitating improved protective measures[111]. - The new infrastructure initiative is expected to drive demand for mobile security solutions, creating a significant market opportunity[113]. Business Strategy and Focus - The company has shifted its main business focus to mobile internet security, smart city solutions, and emergency services as of the report date[21]. - The company is expanding into emergency industry and smart city projects, with ongoing initiatives in emergency command center construction and smart campus projects[52]. - The company is committed to a "product + service" business model, focusing on mobile application security and expanding into emergency industries and smart cities for new growth opportunities[116]. - The company plans to enhance its investment in security services and product development to maintain market competitiveness[63]. - The company aims to deepen its cybersecurity industry layout and explore diversified business growth points, aligning with national digital development strategies and regulations[114]. Legal and Compliance Issues - The company faced a lawsuit involving a claim of 11.1781 million RMB, which has not formed an estimated liability[200]. - The company has been ordered to pay a total of 1.3052 million RMB in compensation for certain cases, with appeals currently in process[200]. - The company has not experienced any bankruptcy reorganization during the reporting period[199]. - There are no significant litigation or arbitration matters that meet the disclosure standards[200]. - The company has not faced any administrative penalties related to environmental issues during the reporting period, indicating compliance with environmental regulations[174]. Shareholder and Management Changes - The company experienced resignations of key personnel, including the board secretary and independent directors, during the reporting period[137]. - The company reported a significant turnover in management, with several key personnel changes occurring on October 15, 2021, due to personal reasons[138]. - The company’s board of directors includes professionals with diverse backgrounds, including finance, law, and management, enhancing its governance structure[141]. - The company appointed new board members on October 15, 2021, including Chen Jinhai as a director and independent director Zhong Mingxia[138]. - The company is focused on enhancing its governance structure through the election of new independent directors and supervisors[137]. Financial Management and Audit - The company appointed Deloitte Touche Tohmatsu Certified Public Accountants LLP as the auditor for the fiscal year 2021, with an audit fee of 1.2 million RMB[197]. - The internal control audit for 2021 was also conducted by Deloitte Touche Tohmatsu, with a fee of 100,000 RMB[198]. - The company has successfully communicated the change of auditors with all parties involved, ensuring no objections were raised[197]. - The change of auditors was approved at the third extraordinary general meeting of shareholders in 2021[197].