ANDON HEALTH(SZ:002432)2014-04-28 16:00Financial Performance - The company's operating revenue for 2013 was CNY 407,567,065.20, representing a 14.46% increase compared to CNY 356,081,981.82 in 2012[21]. - The net profit attributable to shareholders for 2013 was a loss of CNY 8,346,130.24, a decrease of 219.52% from a profit of CNY 6,982,945.78 in 2012[21]. - The net cash flow from operating activities was a negative CNY 74,469,374.02, a decline of 1,522.59% compared to CNY 5,234,764.08 in 2012[21]. - The total assets at the end of 2013 amounted to CNY 933,666,908.25, an increase of 14.07% from CNY 818,472,322.83 at the end of 2012[21]. - The net assets attributable to shareholders decreased by 1.22% to CNY 748,499,783.54 at the end of 2013 from CNY 757,708,421.02 at the end of 2012[21]. - The basic earnings per share for 2013 was -CNY 0.02, a decrease of 200% from CNY 0.02 in 2012[21]. - The weighted average return on equity was -1.11% in 2013, down from 0.91% in 2012[21]. - The company reported a net loss for the first time in over a decade due to the costs associated with its transition to a mobile health management model[31]. - The company reported a total revenue of 23,610 million CNY, with a year-on-year increase of 51.94%[65]. - The net profit for the year was a loss of CNY 8,539,878.89, compared to a profit of CNY 6,953,520.34 in the previous year[178]. Cash Flow and Investments - The company's cash flow from operating activities was negative at -7.447 million yuan, a decrease of 1.52259 million yuan from the previous year[35]. - Operating cash inflow increased by 19.73% to $496.08 million, while operating cash outflow rose by 39.46% to $570.55 million, resulting in a net cash flow from operating activities of -$74.47 million, a decrease of 1,522.59% year-over-year[47]. - Investment cash inflow decreased by 27.5% to $34,952.99, while investment cash outflow increased by 38.62% to $60.62 million, leading to a net cash flow from investing activities of -$60.58 million, an increase of 38.7% year-over-year[48]. - Financing cash inflow surged by 106,016.06% to $133.86 million due to short-term bank loans, while financing cash outflow increased by 48.09% to $36.73 million, resulting in a net cash flow from financing activities of $97.13 million[49]. - The company reported a net cash flow from operating activities of -33,683,101.93 CNY, a decrease from 29,544,014.63 CNY in the previous period[188]. - The net cash flow from investing activities was -27,666,552.87 CNY, an improvement from -45,546,442.65 CNY in the previous year[188]. - Cash inflow from financing activities was 71,000,000.00 CNY, with a net cash flow of 34,272,641.96 CNY, compared to -24,800,000.00 CNY in the prior period[188]. Sales and Market Expansion - The company aims to expand its market presence by establishing branches in France and enhancing online sales channels domestically[36]. - Domestic sales grew by 49.94% to $157.93 million, while international sales increased by 1.58% to $249.64 million[50]. - The company plans to launch 3-5 new iHealth products in 2014, focusing on increasing technological content and brand image to capture market share[75]. - The company aims to expand its blood glucose product sales, which currently lag behind international competitors, by increasing promotional efforts and advertising[76]. - The company plans to continue expanding its market presence and invest in new product development[200]. Research and Development - Research and development expenses amounted to 32.6149 million yuan, representing 8.00% of the annual operating revenue and 4.36% of the latest audited net assets[45]. - The company has established a strong R&D capability, focusing on electronic blood pressure monitors and other health products, enhancing its competitive edge in both domestic and international markets[56]. - The company has a R&D team of nearly 300 people but faces challenges in attracting and retaining specialized talent in a competitive market[79]. - The company has invested a total of $3.16 million from its fundraising efforts during the reporting period, with a cumulative investment of $10.45 million[62]. Shareholder and Governance - The company did not distribute any cash dividends or bonus shares for the year 2013[4]. - The company has a cash dividend policy stating that during profit distribution, cash dividends should account for at least 20% of the total distribution when significant capital expenditures are planned[87]. - The company engaged in multiple investor communications throughout 2013, discussing development status and product R&D progress[88][89]. - The company has committed to not transferring or entrusting its shares for six months following its IPO, ensuring stability in shareholding[97]. - The company has successfully fulfilled all commitments made to shareholders during the reporting period[99]. - The company held three temporary shareholder meetings in 2013, all of which passed the proposed resolutions, including those related to capital increase and related party transactions[140][141]. Risks and Challenges - The company faced significant risks as outlined in the board report, which investors should be aware of[12]. - The company acknowledges the risk of declining net profits due to high investment in R&D and sales, and plans to enhance domestic sales of iHealth, blood pressure, and blood glucose products[83]. - The company recognizes the risk of innovation in the personal health management sector and is focused on accumulating personal health big data[79]. - The company experienced losses in domestic subsidiaries due to higher supply prices from the parent company, impacting overall profitability[71]. - The introduction of new models in the maternal and infant product series was delayed, affecting sales in the US subsidiary for the year[71]. Employee and Workforce - The company reported a total of 1,455 employees as of December 31, 2013, with 25.70% holding a bachelor's degree or higher[125]. - The employee age structure shows that 71.07% are under 30 years old, indicating a young workforce[129]. - The company has a significant production workforce, comprising 59.66% of total employees[127]. - The total remuneration for directors, supervisors, and senior management during the reporting period amounted to 2.45 million yuan[123]. - The company has established a labor contract system in compliance with the Labor Law of the People's Republic of China[130]. Internal Control and Compliance - The company maintained effective internal controls over financial reporting as per the internal control audit report dated April 29, 2014[158]. - The company received a standard unqualified audit opinion from Da Hua Certified Public Accountants on April 28, 2014, confirming the fair presentation of its financial statements[161]. - The internal control system was established to ensure compliance, asset security, and accurate financial reporting[155]. - No significant internal control deficiencies were found during the self-evaluation report for the reporting period[156]. Share Capital and Structure - The total share capital increased to 372 million shares after a capital reserve conversion of 124 million shares based on the previous total of 248 million shares[104]. - The largest shareholder, Shihezi Sanhe Equity Investment Partnership, holds 46.62% of the shares, totaling 173,440,661 shares, with 10 million shares pledged[108]. - The company’s shareholding structure shows that 33.46% of shares are unrestricted, totaling 289,019,200 shares[104]. - The company has not reported any significant matters regarding its subsidiaries during the reporting period[101].