STS(SH:603322)2018-03-27 16:00Dividend and Share Capital - The company plans to distribute a cash dividend of 1.20 RMB per 10 shares to all shareholders, based on a total share capital of 80,000,000 shares as of December 31, 2017[5]. - The company will increase its share capital by 4 shares for every 10 shares held, using capital reserves, pending approval from the shareholders' meeting[5]. - The company has established a cash dividend policy to protect the rights of minority investors, in compliance with relevant regulations[86]. - The company declared a cash dividend of 1.20 RMB per 10 shares, totaling 9,600,000 RMB based on a total share capital of 80,000,000 shares as of December 31, 2016[86]. - In 2017, the net profit attributable to ordinary shareholders was 21,379,307.40 RMB, with a cash dividend payout ratio of 44.90%[88]. - The total cash dividend distributed in 2016 was also 9,600,000 RMB, with a net profit of 30,290,588.05 RMB, resulting in a payout ratio of 31.69%[88]. - The company has a plan to repurchase shares to stabilize stock prices if certain conditions are met, including shareholder approval[89]. - The company has committed to repurchase shares if the stock price falls below the net asset value per share within three years post-IPO[89]. Financial Performance - The company's operating revenue for 2017 was CNY 948,793,175.84, representing a 22.29% increase compared to CNY 775,839,105.32 in 2016[21]. - The net profit attributable to shareholders decreased by 29.42% to CNY 21,379,307.40 from CNY 30,290,588.05 in the previous year[21]. - The basic earnings per share for 2017 was CNY 0.27, down 38.64% from CNY 0.44 in 2016[23]. - The total assets at the end of 2017 reached CNY 1,288,070,241.82, a 22.39% increase from CNY 1,052,398,777.47 in 2016[22]. - The cash flow from operating activities for 2017 was CNY 38,147,312.94, a significant recovery from a negative cash flow of CNY -45,341,969.33 in 2016[21]. - The weighted average return on equity decreased to 4.42% in 2017 from 11.91% in 2016, a decline of 7.49 percentage points[23]. - The company reported a net profit of CNY 12,450,031.67 in Q3 2017, showing a positive trend after a loss in Q1[25]. - Non-recurring gains and losses totaled CNY 6,640,745.61 in 2017, compared to CNY 1,368,565.14 in 2016[28]. Operational Highlights - The company successfully expanded its business by winning contracts in three provinces for China Mobile's comprehensive maintenance projects and 16 provinces for network construction projects[38]. - The company has initiated a strategic partnership with Aricent Holdings for the development of IoT small base stations, and completed the acquisition of 50.01% of Sangrui Electronics[39]. - Research and development expenses increased by 4.17% to CNY 35.63 million, reflecting the company's commitment to innovation in communication network operations[43]. - The company is focusing on the development of 5G small base stations and has initiated new product development in point coverage solutions[39]. - The company faced challenges due to intensified market competition, leading to lower bid prices for network construction and maintenance services[41]. - The company has expanded its service network by establishing new branches in Yunnan and Heilongjiang, although these regions incurred significant losses[41]. Market and Competition - The telecommunications industry in China saw a revenue growth of 8.4% in fixed communication services and 5.7% in mobile communication services in 2017, indicating a robust market environment[71]. - The company is positioned in the communication technology service sector, which is expected to expand with the investment in 5G network construction, despite increasing competition[71]. - The company plans to enhance its market presence by focusing on regions with growing demand, such as Hubei and Jiangsu, to improve overall profitability[48]. Risk Management - The company has detailed potential risks in its report, which can be found in the section discussing operational conditions and future development risks[7]. - The company emphasizes the importance of investment risk awareness regarding forward-looking statements made in the report[6]. - The company faces risks related to customer concentration, particularly with China Mobile as a major client, which could significantly impact financial performance[82]. - The company reported a high proportion of accounts receivable, which poses a risk of bad debts as business scales up[83]. - The company anticipates potential cash flow volatility due to business expansion, which could adversely affect normal operations[83]. Governance and Compliance - The company operates under the supervision of the China Securities Regulatory Commission and the Shanghai Stock Exchange[11]. - The company has committed to ensuring the accuracy and completeness of the annual report's financial statements[4]. - The company has not engaged in any cash buyback of shares during the reporting period[87]. - The company has committed to timely and accurate information disclosure regarding any share reductions, adhering to regulatory requirements[92]. - The company has established a policy to limit stock transfers for key shareholders for a period of 36 months post-IPO, ensuring stability in shareholding[92]. - The company has implemented measures to protect employee rights, ensuring compliance with labor laws and timely payment of wages and benefits[91]. Audit and Internal Control - The company has received a standard unqualified audit report from the accounting firm Xin Yong Zhong He[4]. - The internal control audit was also conducted by Xinyong Zhonghe Accounting Firm, with a fee of 300,000 RMB[100]. - The company did not face any major litigation or arbitration matters during the reporting year[99]. - The company did not have any significant accounting errors or changes in accounting estimates during the reporting period[95]. - The company has not encountered any risks of suspension or termination of listing[99]. - The company complied with the new accounting standards issued by the Ministry of Finance in 2017[95]. Employee and Shareholder Information - The company employed a total of 3,055 staff, with 2,562 in the parent company and 493 in major subsidiaries[138]. - The number of technical personnel reached 2,457, including 414 in research and development[138]. - The company has established a competitive salary system to motivate employees and ensure internal equity[139]. - The company has implemented a demand-oriented training plan, focusing on safety production and project management[140]. - The total number of ordinary shareholders at the end of the reporting period is 15,159, an increase from 13,072 at the end of the previous month[116]. - The top ten shareholders hold a total of 80,000,000 shares, representing 98.08% of the total shares[119].