STS(SH:603322)2017-03-28 16:00Financial Performance - The company's operating revenue for 2016 was CNY 775,839,105.32, representing an increase of 11.78% compared to CNY 694,067,728.56 in 2015[20]. - The net profit attributable to shareholders for 2016 was CNY 30,290,588.05, a decrease of 28.96% from CNY 42,640,771.70 in 2015[20]. - The basic earnings per share for 2016 was CNY 0.44, down 38.03% from CNY 0.71 in 2015[22]. - The weighted average return on equity for 2016 was 11.91%, a decrease of 7.79 percentage points from 19.70% in 2015[22]. - The overall gross margin decreased to 20.51%, down from 23.76% in the previous year, attributed to lower contract prices and increased costs in newly expanded regions[45]. - The company reported a significant increase in costs due to new projects in Jiangsu, Yunnan, and Heilongjiang, amounting to approximately 53.15 million[48]. - The company achieved a net profit margin of 12% for 2016, up from 10% in 2015, indicating improved operational efficiency[130]. Cash Flow and Financial Position - The company reported a net cash flow from operating activities of -CNY 45,341,969.33 in 2016, compared to CNY 35,509,497.80 in 2015[21]. - The company's cash and cash equivalents increased by 140.45% to ¥329,055,187.72, primarily due to funds raised from the initial public offering[31]. - The total assets at the end of 2016 reached CNY 1,052,398,777.47, which is a 61.64% increase from CNY 651,094,827.21 in 2015[21]. - The company's total liabilities increased by 83.66% to 131,130,000.00 CNY, reflecting expansion into new business areas[68]. - The company reported a net cash flow from operating activities of -45,341,969.33 CNY, primarily due to significant upfront investments in new business regions[64]. Shareholder and Dividend Information - The company plans to distribute a cash dividend of 1.20 RMB per 10 shares based on a total share capital of 80,000,000 shares as of December 31, 2016[2]. - The company has a cash dividend policy, distributing 1.50 RMB per 10 shares for the 2015 fiscal year, totaling 9 million RMB[86]. - The company will compensate investors for losses incurred due to false statements or omissions in the prospectus, following the recognition by the regulatory authority[90]. - The company plans to repurchase shares as part of its strategy to enhance shareholder value[91]. Operational Developments - The company is involved in the development of new technologies such as 4G and 5G networks, as well as cloud computing and IoT[10]. - The company continues to focus on integrated communication technology services, including network construction, maintenance, and optimization[29]. - The company has engaged in significant R&D projects, including studies on indoor distribution systems and 4G small base stations, maintaining industry-leading technology levels[33]. - The company is developing an IoT monitoring platform for generator sets as part of its smart operation strategy[39]. Market and Competitive Environment - The telecommunications industry saw fixed asset investments reach 435 billion, with mobile communication investments at 235.5 billion, reflecting a competitive market environment[72]. - The company anticipates further market consolidation as procurement strategies shift towards larger telecommunications service providers, intensifying competition[72]. - The company faces challenges from rising labor costs and declining market prices, impacting overall profitability in the telecommunications service industry[77]. - The company plans to continue focusing on the communication technology service industry and expand its main business coverage area to enhance performance[78]. Governance and Compliance - The company has a governance structure that complies with relevant laws and regulations, ensuring transparency and accountability[140]. - The company has established a competitive compensation system based on job roles and industry standards[136]. - The company actively engages with shareholders through various communication channels to enhance investor relations[142]. - The company has committed to ensuring employee rights by adhering to labor laws and timely payment of social insurance and housing funds[92]. Risks and Challenges - The company has detailed potential risks in the report, which can be found in the section discussing operational conditions and future development risks[5]. - The company faces risks related to customer concentration, with China Mobile being a major client, which could significantly impact performance if their market position declines[81]. - High accounts receivable and potential bad debt risks are present as the company expands, which could adversely affect financial performance if major clients default[82]. - The company is exposed to risks from changes in procurement policies of telecom operators, which could affect business expansion and operational management[82].