Hexing(SH:603556)2018-03-29 16:00Financial Performance - The company achieved a net profit attributable to shareholders of RMB 562,851,964.67 in 2017, after deducting a statutory surplus reserve of RMB 28,647,267.48, resulting in a total distributable profit of RMB 534,204,697.19[5]. - The company's operating revenue for 2017 reached ¥3,025,410,050.26, representing a 39.80% increase compared to ¥2,164,152,301.61 in 2016[22]. - Net profit attributable to shareholders was ¥562,851,964.67, an increase of 10.76% from ¥508,149,911.76 in the previous year[22]. - The company's total revenue for the year increased by 25.73% to CNY 1,660,832,859.85, driven by a rise in net profit[44]. - The company reported a significant increase in net assets attributable to shareholders, reaching ¥4,675,233,503.89, an 11.72% increase from ¥4,184,653,249.73 in 2016[22]. - The company's deferred income tax assets increased by 53.80% to CNY 55,316,816.36, indicating a rise in deductible temporary differences[43]. - The company’s smart metering products generated revenue of ¥2,378,977,115.06 in 2017, reflecting a year-over-year growth of 35.77%[60]. - The revenue from the company's distribution and power terminal products reached ¥191,456,547.85, marking a significant increase of 66.22% year-over-year[61]. - The system solutions segment saw a revenue increase of 55.05%, totaling ¥368,583,392.32 in 2017, driven by projects in countries along the Belt and Road Initiative[61]. Dividend and Shareholder Returns - The proposed dividend distribution for 2017 is RMB 3.00 per 10 shares (tax included), along with a capital reserve conversion of 3 additional shares for every 10 shares held[5]. - The company has a cash dividend policy that has not been adjusted in the past three years, indicating a consistent approach to shareholder returns[106]. - In 2017, the company proposed a cash dividend plan, with a distribution of 3 shares for every 10 shares held and a cash dividend of approximately 114.42 million RMB, representing 20.33% of the net profit attributable to ordinary shareholders[106]. Risk Management and Compliance - The company emphasizes that forward-looking statements regarding future plans and strategies do not constitute a commitment to investors, highlighting the importance of investment risk awareness[6]. - The company has detailed the risks it faces in the annual report, urging investors to pay attention to the relevant sections discussing potential risks[7]. - The company maintains a commitment to transparency and compliance, as evidenced by the presence of all board members at the board meeting[7]. - The company is actively managing risks associated with overseas subsidiaries, emphasizing the need for enhanced internal control as international operations expand[102]. - The company did not report any significant deficiencies in internal controls during the reporting period[190]. Research and Development - The company has over 700 R&D engineers and has participated in the formulation of international and industry standards, maintaining a leading technological advantage in smart metering and smart distribution[36]. - The company's R&D expenditure increased by 57.91% to CNY 258,313,826.58, indicating a strong commitment to innovation[67]. - The proportion of R&D personnel reached 32%, with a total of 792 R&D staff[75]. - Total R&D investment amounted to ¥258,313,826.58, representing 8.54% of operating revenue[75]. Market Expansion and Strategy - The company aims to expand its business model from primarily metering products to comprehensive smart power distribution solutions[32]. - The company is positioned to benefit from the expected significant increase in smart meter purchases and investment in distribution network infrastructure in international markets over the next 3-5 years[41]. - The company is focusing on expanding its market presence in smart grid and distributed solar energy solutions, with a dedicated investment in technology development[87]. - The company plans to expand its overseas market presence, having established subsidiaries in over 10 countries and serving clients in more than 80 countries[96]. - The company is exploring potential acquisitions to strengthen its market position, with a budget of $200 million allocated for this purpose[173]. Corporate Governance - The audit report for the financial statements was issued by Ernst & Young Hua Ming, confirming the accuracy and completeness of the financial report[4]. - The board of directors held a total of 8 meetings during the year, with 1 in-person meeting and 7 combined in-person and communication meetings[187]. - All resolutions presented at the shareholders' meetings during the reporting period were approved[185]. - The company has maintained compliance with relevant regulations and improved its governance structure during the reporting period[183]. Employee Management and Compensation - The total annual remuneration payable to directors, supervisors, and senior management during the reporting period amounted to 6.9901 million yuan[175]. - The company has implemented an EVA (Economic Value Added) compensation incentive policy to align employee interests with long-term company goals[179]. - The training program includes a closed-entry training for new graduates to ensure they possess good professional qualities and foundational knowledge[180]. - The company has established a fair and competitive salary system, ensuring that average employee annual income exceeds regional and industry averages during prosperous economic periods[179]. Financial Management - The company has invested ¥120,000,000 in bank wealth management products using raised funds, with an outstanding balance of ¥80,000,000[127]. - The company has also invested ¥162,000,000 in bank wealth management products using its own funds, with an outstanding balance of ¥91,100,000[127]. - The overall performance of entrusted financial management products indicates a strong return on investment, with several products achieving returns above 5%[128][129]. - The company is focusing on diversifying its financial products to enhance customer engagement and market presence[128][129]. Share Capital and Ownership Structure - The total number of ordinary shares increased from 373,340,000 to 380,192,000, reflecting an increase of 6,852,000 shares[139]. - The largest shareholder, Zhejiang Haixing Holding Group, holds 184,394,840 shares, representing 48.5% of the total shares[153]. - The actual controllers, Zhou Liangzhang and Li Xiaoqing, indirectly hold 52.99% and directly hold 3.29% of the company's shares, totaling 56.28%[163]. - The company has implemented a stock incentive plan to motivate employees and align their interests with shareholders[141].