恒信东方(300081) - 2015 Q4 - 年度财报

Important Notes, Contents and Definitions Important Notes The board guarantees the report's authenticity and outlines risks while announcing the 2015 profit distribution plan - The proposed 2015 profit distribution plan is to distribute a cash dividend of 1 Yuan (tax included) per 10 shares and to issue 15 new shares for every 10 shares from the capital reserve, based on a total of 134,000,000 shares[5] - The company highlights key future risks, including those related to industrial transformation, industry policies, management integration, technological innovation, and the potential loss of core technical personnel[5] Definitions This section defines key technical terms used in the report, such as VR, CG, and IP Key Term Definitions | Term | Definition | | :--- | :--- | | VR | Virtual Reality | | CG | Computer Graphics, the technology of creating animation using computers | | IP | Intellectual Property, referring to the property rights enjoyed by a rights holder for the results of their intellectual labor | Company Profile and Key Financial Indicators Company Information This section provides the company's basic registration, contact, and information disclosure details Company Basic Information | Item | Content | | :--- | :--- | | Stock Ticker | Hison Mobile | | Stock Code | 300081 | | Chinese Name | 恒信移动商务股份有限公司 | | Legal Representative | Meng Xianmin | | Registered Address | No 69, Tianshan Street, Shijiazhuang Development Zone, Hebei Province | Key Accounting Data and Financial Indicators The company's revenue declined, but net profit remained stable, with a significant turnaround in profit after non-recurring items Key Financial Data for 2015 | Indicator | 2015 | 2014 | YoY Change | | :--- | :--- | :--- | :--- | | Operating Revenue (Yuan) | 474,880,085.98 | 667,357,602.79 | -28.84% | | Net Profit Attributable to Shareholders (Yuan) | 10,588,462.91 | 10,539,483.58 | 0.46% | | Net Profit Attributable to Shareholders (Excluding Non-recurring Items) (Yuan) | 5,325,654.81 | -14,226,580.31 | 137.43% | | Net Cash Flow from Operating Activities (Yuan) | 30,595,419.81 | 47,448,800.18 | -35.52% | | Basic Earnings Per Share (Yuan/Share) | 0.08 | 0.08 | 0.00% | | Total Assets (Yuan) | 975,408,054.51 | 886,543,086.64 | 10.02% | Quarterly Key Financial Indicators for 2015 (Unit: Yuan) | Indicator | Q1 | Q2 | Q3 | Q4 | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue | 138,314,449.35 | 118,878,994.08 | 85,255,577.14 | 132,431,065.41 | | Net Profit Attributable to Shareholders | -7,063,537.25 | 10,721,166.85 | -9,714,527.06 | 16,645,360.37 | - During the reporting period, total non-recurring gains and losses amounted to 5,262,808.10 Yuan, primarily from government subsidies and investment income from the disposal of financial assets[24][25] Company Business Summary Main Business The company's main business is mobile information products and services, with a strategic shift towards 4G and mobile internet-based solutions - The company's main business is divided into two segments: - Personal Mobile Information Products and Services: Includes mobile phone retail, operator-contracted device sales, and value-added services like mobile video and music search[28][29] - Industry Mobile Information Products and Services: Includes sales of all-in-one card equipment and operation of industry-specific information services[30][31] - As 4G networks develop, the scale of traditional business has slightly declined, prompting a strategic shift towards mobile internet-based commercial service products[31] Core Competitiveness The company's core strengths lie in its marketing network, R&D capabilities, and extensive intellectual property portfolio - The company's core competitiveness includes: - Marketing Advantages: Long-term partnerships with telecom operators and exploration of new media marketing models[34][35] - Technology and R&D Advantages: Focus on independent innovation in mobile internet technology and e-commerce[36] - Intellectual Property: Owns 8 patents, 15 trademarks, and 113 software copyrights[37][38] Management Discussion and Analysis Overview In 2015, revenue fell due to business adjustments, but net profit was maintained through investment income and strategic capital operations 2015 Performance Overview | Indicator | 2015 Amount | YoY Change | | :--- | :--- | :--- | | Operating Revenue | 474.88 million Yuan | -28.84% | | Operating Profit | -440.59 Yuan | -195.04% | | Total Profit | 0.79 million Yuan | -91.34% | | Net Profit Attributable to Shareholders | 10.59 million Yuan | +0.46% | - The revenue decline was mainly due to inventory structure optimization in the mobile information product sales business and a significant drop in the revenue-sharing ratio for the mobile video business[43] - Net profit remained stable primarily due to approximately 10 million Yuan in operating investment income from the investment in Anhui Saida Technology Co, Ltd, along with the recognition of some government subsidies[43] - The company is actively pursuing business transformation through capital operations, including: - Participating in the establishment of an investment partnership to enter the internet and media industries[45] - Acquiring a controlling stake in a pawn company to enter the internet finance sector[47] - Planning a major asset restructuring to acquire Oriental DreamWorks, targeting the CG and VR entertainment industry[47] Analysis of Main Business Operations Revenue from core mobile information services fell, but gross margin improved significantly due to effective cost control measures 2015 Revenue Breakdown by Product | Product Segment | Revenue (Yuan) | % of Total Revenue | YoY Change | | :--- | :--- | :--- | :--- | | Personal Mobile Information Terminal Integrated Sales Service | 373,692,829.05 | 78.69% | -30.95% | | Industry Mobile Information Business Operation | 58,877,545.04 | 12.40% | -18.19% | | Personal Mobile Information Business Sales Service | 25,173,324.39 | 5.30% | -21.02% | | Industry Mobile Information Product Integrated Sales Service | 13,962,679.74 | 2.94% | -23.68% | Performance by Major Business Segment | Segment/Product | Operating Revenue (Yuan) | Operating Cost (Yuan) | Gross Margin | Revenue YoY | Cost YoY | | :--- | :--- | :--- | :--- | :--- | :--- | | Mobile Information Product Sales & Services | 471,706,378.22 | 309,293,671.67 | 34.43% | -28.89% | -33.00% | | Personal Mobile Information Terminal Integrated Sales Service | 373,692,829.05 | 285,136,361.24 | 23.70% | -30.95% | -32.36% | - Sales volume of personal mobile information terminals decreased by 50.04% YoY, and inventory decreased by 43.09%, mainly due to adjustments in product structure in response to operator sales policies[55] - Operating costs decreased by 33.00% YoY, driven by a 32.50% reduction in inventory costs and a 42.65% cut in channel promotion costs, reflecting the scaled-back terminal sales[57] Assets and Liabilities Total assets grew, with a significant shift from cash to long-term equity investments due to strategic acquisitions Significant Changes in Asset Composition | Asset Item | 2015 Year-End Balance (Yuan) | % of Total Assets | 2014 Year-End Balance (Yuan) | % of Total Assets | Reason for Change | | :--- | :--- | :--- | :--- | :--- | :--- | | Cash and Cash Equivalents | 357,819,957.53 | 36.68% | 479,009,158.00 | 54.03% | Primarily due to increased external cash investments during the period | | Long-term Equity Investments | 157,917,514.80 | 16.19% | 0.00 | 0.00% | Primarily due to the new equity investment in Anhui Saida Technology Co, Ltd | Future Development Outlook The company will accelerate its transformation into an "Internet+" service provider, focusing on internet finance and the pan-entertainment industry - Development Strategy: To integrate business resources and expand into new fields like internet finance, video, and animation, extending the industrial and value chains[89] - Major Initiatives: - Internet Finance: Develop internet pawn services by leveraging its controlling stake in Beijing Hengshengtong Pawnshop[89] - Pan-Entertainment Industry: Enter the CG and VR content services sector through the proposed acquisition of Oriental DreamWorks, moving up the value chain from a downstream service provider to an upstream content creator[90] - Operating Plan: 1. Establish a modern enterprise management system to strengthen group operations[91] 2. Consolidate traditional businesses while accelerating the transition to internet finance, media, and cultural entertainment[92] 3. Actively advance the M&A process for Oriental DreamWorks[93] 4. Enhance refined management to continuously reduce costs and improve efficiency[93] - Potential Risks: - Industrial Transformation Risk: Management challenges from business expansion[93] - Industry Policy Risk: Incomplete regulations for the internet pawn industry[94] - Management Integration Risk: Increased external investments demand higher management capabilities[95] - Technological Innovation Risk: Fast-paced product upgrades pose a risk of innovation failure[96] - Loss of Core Personnel Risk: High dependency on key personnel in the industry[96] - Major Asset Restructuring Risk: The acquisition is subject to regulatory approval and carries uncertainty[96] Significant Matters Profit Distribution and Capitalization of Capital Reserve The company proposed a generous 2015 profit distribution plan after two consecutive years of no distributions 2015 Profit Distribution and Capitalization Plan | Item | Content | | :--- | :--- | | Dividend per 10 Shares (Yuan) (tax incl) | 1 | | New Shares per 10 Shares | 15 | | Share Base for Distribution (Shares) | 134,000,000 | | Total Cash Dividend (Yuan) (tax incl) | 13,400,000.00 | | Distributable Profit (Yuan) | 62,723,916.84 | - The company's profit distribution for the last three years: - 2015: Proposed plan of 1 Yuan dividend and 15 new shares per 10 shares[101][103] - 2014: No distribution due to a recent return to profitability and significant capital expenditure needs[104] - 2013: No distribution due to an annual loss[105][106] Material Related-Party Transactions The company engaged in routine operational transactions with a related party, totaling approximately 5.997 million Yuan Related-Party Transactions in the Ordinary Course of Business | Related Party | Transaction Type | Transaction Content | Transaction Amount (10k Yuan) | | :--- | :--- | :--- | :--- | | Beijing Jingyuan Shifang Culture Media Co, Ltd | Procurement | Technical service fees | 522.26 | | Beijing Jingyuan Shifang Culture Media Co, Ltd | Procurement | Equipment purchase | 53.56 | | Beijing Jingyuan Shifang Culture Media Co, Ltd | Sales | Sale of fixed assets | 23.9 | Other Significant Matters The company initiated a major asset restructuring and made several strategic investments to expand into new business areas - On November 26, 2015, the company suspended trading to plan a major asset restructuring, intending to issue shares to acquire Oriental DreamWorks; the plan is still pending final approval[134] - The company invested 30 million Yuan of its own funds as a limited partner to establish the Beijing Shifang Hulian Investment Partnership, targeting the internet and media industries[135] - The company's subsidiary, Fengyun Shidai Technology Co, Ltd, completed a capital increase, raising a total of 30 million Yuan from strategic investors[136] - The company progressively achieved 100% control of Beijing Hengshengtong Pawnshop through acquisition and capital injection to solidify its internet finance business[137] Changes in Share Capital and Shareholders Changes in Share Capital The total share capital remained unchanged, but the proportion of restricted shares decreased due to the lifting of lock-up periods for executives Changes in Share Capital | Share Type | Pre-Change Quantity | Change (+/-) | Post-Change Quantity | Post-Change Ratio | | :--- | :--- | :--- | :--- | :--- | | I. Restricted Shares | 50,733,463 | -8,305,952 | 42,427,511 | 31.66% | | II. Unrestricted Shares | 83,266,537 | +8,305,952 | 91,572,489 | 68.33% | | III. Total Shares | 134,000,000 | 0 | 134,000,000 | 100.00% | Shareholders and Actual Controller Mr Meng Xianmin is the controlling shareholder and actual controller, holding 31.91% of the company's shares Shareholdings of Top Two Shareholders | Shareholder Name | Shareholder Type | Shareholding Ratio | Year-End Shares Held | Number of Restricted Shares | | :--- | :--- | :--- | :--- | :--- | | Meng Xianmin | Domestic Individual | 31.91% | 42,759,034 | 32,069,275 | | Pei Jun | Domestic Individual | 5.57% | 7,468,324 | 5,976,243 | - The company's controlling shareholder and actual controller is Mr Meng Xianmin, who currently serves as the Chairman and General Manager[148][150] Directors, Supervisors, Senior Management, and Employees Changes in Shareholdings of Directors, Supervisors, and Senior Management Several key executives adjusted their shareholdings during the reporting period, including a notable reduction by the Vice General Manager - Director and Vice General Manager Pei Jun reduced his holdings by 500,000 shares during the period, with a year-end holding of 7,468,324 shares[156] Remuneration of Directors, Supervisors, and Senior Management The total pre-tax remuneration paid to directors, supervisors, and senior management in 2015 was 2.944 million Yuan Remuneration of Key Management Personnel (Unit: 10k Yuan) | Name | Position | Total Pre-tax Remuneration from the Company | | :--- | :--- | :--- | | Meng Xianmin | Chairman; General Manager | 28 | | Pei Jun | Director; Vice General Manager | 24 | | Duan Zhaodong | Vice General Manager; Secretary of the Board | 24 | | Chen Wei | Vice General Manager; CFO | 22 | | Total | -- | 294.4 | Employee Information The company employed 1,551 people at year-end, with sales personnel forming the largest professional group Employee Composition by Profession | Professional Category | Number of People | | :--- | :--- | | Sales Personnel | 1,101 | | Technical Personnel | 266 | | Management Personnel | 73 | | Administrative Personnel | 56 | | Finance Personnel | 55 | | Total | 1,551 | Corporate Governance Basic Status of Corporate Governance The company maintains a sound governance structure compliant with regulations and operates independently from its controlling shareholder - The company's governance structure is well-established and complies with relevant laws, ensuring the standardized operation of the shareholders' meeting, board of directors, board of supervisors, and management[189] - The company is independent from its controlling shareholder in terms of business, personnel, assets, organization, and finance, possessing autonomous operational capabilities[194] Financial Report Auditor's Report The auditor issued a standard unqualified opinion on the company's 2015 financial statements - The audit opinion type was a standard unqualified audit opinion[207] - The auditing firm was Lixin Certified Public Accountants (Special General Partnership), and the report was signed on March 22, 2016[207] Financial Statements This section presents the audited consolidated and parent company financial statements for the year 2015 Consolidated Balance Sheet Total assets grew by 10.02%, driven by new long-term equity investments, while total liabilities increased significantly Key Items from Consolidated Balance Sheet (Unit: Yuan) | Item | Closing Balance | Opening Balance | | :--- | :--- | :--- | | Total Assets | 975,408,054.51 | 886,543,086.64 | | Cash and Cash Equivalents | 357,819,957.53 | 479,009,158.00 | | Long-term Equity Investments | 157,917,514.80 | 0.00 | | Total Liabilities | 153,377,849.93 | 90,187,322.04 | | Short-term Borrowings | 50,000,000.00 | 50,000,000.00 | | Other Payables | 82,108,328.73 | 6,099,765.72 | | Total Equity Attributable to Parent Company | 798,422,803.07 | 782,263,474.66 | Consolidated Income Statement Despite a sharp revenue decline and an operating loss, investment income helped maintain a stable net profit for the year Key Items from Consolidated Income Statement (Unit: Yuan) | Item | Current Period | Prior Period | | :--- | :--- | :--- | | I. Total Operating Revenue | 474,880,085.98 | 667,357,602.79 | | Less: Operating Costs | 309,293,671.67 | 461,651,823.27 | | Selling Expenses | 100,802,351.62 | 137,651,876.57 | | Administrative Expenses | 78,780,806.65 | 84,626,710.59 | | Add: Investment Income | 12,609,684.22 | 31,155,700.51 | | III. Operating Profit | -4,405,896.83 | 4,635,668.17 | | IV. Total Profit | 794,300.02 | 9,169,097.44 | | Net Profit Attributable to Parent Company Owners | 10,588,462.91 | 10,539,483.58 | Consolidated Cash Flow Statement A significant cash outflow from investing activities led to a net decrease in cash and cash equivalents for the year Summary of Consolidated Cash Flow Statement (Unit: Yuan) | Item | 2015 | 2014 | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 30,595,419.81 | 47,448,800.18 | | Net Cash Flow from Investing Activities | -172,983,120.30 | 110,268,792.43 | | Net Cash Flow from Financing Activities | 24,384,257.02 | -52,191,244.40 | | Net Increase in Cash and Cash Equivalents | -118,003,443.47 | 105,526,348.21 |