EASTCOM(SH:600776)2015-08-12 16:00Financial Performance - The company's operating revenue for the first half of 2015 was CNY 1,919,463,642.04, representing a 9.10% increase compared to CNY 1,759,284,351.47 in the same period last year[21]. - The net profit attributable to shareholders for the first half of 2015 was CNY 76,504,571.14, which is a 23.71% increase from CNY 61,843,838.52 in the previous year[21]. - The net profit after deducting non-recurring gains and losses was CNY 56,830,444.55, showing a significant increase of 104.96% compared to CNY 27,727,346.14 in the same period last year[21]. - The basic earnings per share for the first half of 2015 was CNY 0.0609, up 23.71% from CNY 0.0492 in the same period last year[22]. - The weighted average return on equity increased to 2.63%, up 0.39 percentage points from 2.24% in the previous year[22]. - The company's total assets at the end of the reporting period were CNY 3,609,593,581.83, a decrease of 0.53% from CNY 3,628,821,084.18 at the end of the previous year[21]. - The net cash flow from operating activities for the first half of 2015 was negative CNY 426,438,158.22, slightly improved from negative CNY 433,197,380.60 in the same period last year[21]. - The net assets attributable to shareholders at the end of the reporting period were CNY 2,866,329,333.64, a marginal increase of 0.04% from CNY 2,865,184,766.34 at the end of the previous year[21]. Revenue Breakdown - The financial electronics sector saw operating revenue of CNY 392.7 million, with a year-on-year increase of 25.25%[36]. - Domestic revenue accounted for CNY 1.859 billion, reflecting a 9.79% increase year-on-year, while international revenue grew by 24.43% to CNY 45.5 million[39]. - The company's operating costs rose to CNY 1.712 billion, an increase of 9.6% year-on-year[32]. Investments and Loans - The company holds a 30% equity stake in Hangzhou Eastcom Baifeng Technology with an investment cost of ¥7,500,000, showing a decrease of 10.60% from the previous period[43]. - The company has issued a total of ¥48,000,000 in entrusted loans to Zhejiang Qingyuan Green Universe Holdings, with a loan term of 1 year and an interest rate of 14%[48]. - An additional ¥65,000,000 was entrusted to Zhejiang Landun Real Estate Development for a 1-year loan at an interest rate of 11.50%, which was successfully recovered in April 2015[49]. - The company has also provided a loan of ¥54,600,000 to Shenzhen Tianmei Investment Development, secured by shares of Huashu Media Holdings[50]. - A total of ¥110,000,000 was entrusted to CITIC Securities for investment in stock pledge repurchase transactions, with a loan term of 1 year[51]. Subsidiary Performance - Subsidiary Hangzhou Dongxin Financial Technology Service Co., Ltd. achieved revenue of CNY 87.52 million, a year-on-year increase of 26%, and net profit of CNY 43.26 million, a year-on-year increase of 76%[53]. - Subsidiary Hangzhou Dongxin Network Technology Co., Ltd. reported revenue of CNY 159.36 million, a year-on-year increase of 16%, and net profit of CNY 14.23 million, a year-on-year increase of 179%[53]. Cash Flow and Liquidity - The company's cash and cash equivalents decreased to RMB 663,922,593.66 from RMB 1,271,531,760.68, representing a decline of approximately 47.8%[86]. - Accounts receivable increased significantly to RMB 930,960,963.57 from RMB 565,142,170.92, marking an increase of about 64.6%[86]. - Inventory levels rose to RMB 652,072,600.39, up from RMB 631,597,959.90, indicating a growth of approximately 3.5%[86]. - The company reported a total of 2,082,600 stock options held by executives at the beginning of the period, with 1,457,820 remaining at the end, indicating a reduction in options held[79]. Corporate Governance and Shareholder Information - The total number of shareholders reached 65,328 by the end of the reporting period[73]. - The largest shareholder, Putian Oriental Communication Group Co., Ltd., holds 570,712,740 shares, representing 45.44% of the total shares[74]. - Beijing Jinsun Yangguang Investment Co., Ltd. increased its holdings by 22,782,809 shares, now holding 1.81% of the total shares[74]. Legal and Regulatory Matters - The company is currently involved in a civil lawsuit with Zhejiang Qingyuan Green Universe Holdings Co., Ltd. for an amount of CNY 48,000,000, with the court currently preparing for auction of the mortgaged property[58]. - The company has not reported any major asset acquisitions or disposals during the reporting period[67]. Accounting Policies and Financial Reporting - The financial statements are prepared based on the going concern assumption and comply with the relevant accounting standards issued by the Ministry of Finance and the China Securities Regulatory Commission[112]. - The company recognizes revenue from product sales when the significant risks and rewards of ownership have been transferred to the buyer, and the amount can be reliably measured[182]. - Service revenue is recognized based on the percentage of completion method when the outcome of the service transaction can be reliably estimated[184]. - Government grants related to assets are recognized as deferred income and allocated to profit or loss over the useful life of the related assets[185]. Taxation and Incentives - The company benefits from a VAT export refund rate of 15% for its ATM products, enhancing its profitability[194]. - The company is recognized as a high-tech enterprise, allowing it to enjoy a reduced corporate income tax rate of 15% for three years[194]. - The company’s subsidiaries are subject to various tax incentives, including a two-year exemption and a 50% reduction in corporate income tax for software enterprises[195].