Nsfocus(SZ:300369)2017-04-21 16:00Financial Performance - The company's operating revenue for 2016 was approximately ¥1.09 billion, representing a 24.27% increase compared to ¥877.66 million in 2015[25]. - The net profit attributable to shareholders after deducting non-recurring gains and losses was approximately ¥197.55 million, an increase of 19.56% from ¥165.23 million in 2015[25]. - The basic earnings per share for 2016 was ¥0.61, reflecting a 10.91% increase from ¥0.55 in 2015[25]. - The total assets at the end of 2016 amounted to approximately ¥2.71 billion, a 27.12% increase from ¥2.13 billion at the end of 2015[25]. - The net cash flow from operating activities was approximately ¥93.62 million, a decrease of 30.82% compared to ¥135.33 million in 2015[25]. - The weighted average return on net assets for 2016 was 12.47%, down from 13.44% in 2015[25]. - The total equity attributable to shareholders at the end of 2016 was approximately ¥1.92 billion, a 13.56% increase from ¥1.69 billion at the end of 2015[25]. - The company reported a total non-operating income of CNY 22,573,170.76 in 2016, a decrease of 22.5% compared to CNY 29,098,513.54 in 2015[30]. - The company received government subsidies amounting to CNY 10,900,669.40 in 2016, significantly lower than CNY 33,453,168.00 in 2015[30]. - The total revenue for 2016 reached ¥1,090,693,867.24, representing a 24.27% increase compared to ¥877,664,817.03 in 2015[65]. - The net profit attributable to shareholders was 220.12 million RMB, reflecting a year-on-year growth of 13.28%[54]. - The total profit reached 258.70 million RMB, growing by 20.24% compared to the previous year[54]. Market Presence and Expansion - The company has established wholly-owned subsidiaries in Hong Kong, the United States, Japan, Singapore, Germany, and the United Kingdom to expand its international market presence[11]. - The company is actively monitoring and assessing risks associated with its overseas market expansion to mitigate potential adverse impacts on its operations[11]. - The company plans to continue expanding its market presence and investing in new technologies and products[25]. - The company aims to enhance its market share in the domestic information security sector while actively expanding into international markets, positioning itself as a globally influential cybersecurity enterprise[103]. - The company is actively expanding its global security market presence, having established subsidiaries in regions such as the US, Japan, and Germany to enhance its growth potential[109]. Research and Development - The company acknowledges the risk of declining performance if Yisaitong fails to invest adequately in research and development or adapt to market demands[12]. - The total R&D investment amounted to ¥231,408,610.62, accounting for 21.22% of operating revenue, with a year-on-year growth of 5.53%[76]. - The company plans to continue investing in artificial intelligence and machine learning technologies to enhance its security products and services[61]. - The company has established an innovation center to focus on new product and technology development in response to industry changes[59]. - The company launched a threat intelligence platform in 2016, enhancing its security defense system and operational capabilities[59]. Shareholder Returns and Dividends - The company plans to distribute a cash dividend of 1.20 RMB per 10 shares (including tax) to all shareholders, based on a total share capital of 398,222,087 shares[13]. - The company distributed a cash dividend of 1.100047 CNY per 10 shares, totaling 40,049,631.68 CNY, which represents 20.61% of the net profit attributable to shareholders for 2015[116]. - For 2016, the proposed cash dividend is 1.20 CNY per 10 shares, amounting to 47,786,650.44 CNY, which is 21.71% of the net profit attributable to shareholders of 220,124,125.56 CNY[120]. - The company has maintained a cash dividend payout ratio of 100% for the reported periods, ensuring full distribution of available profits[117]. - The company has consistently increased its cash dividends over the past three years, with amounts of 30,070,715.22 CNY in 2014, 40,049,631.68 CNY in 2015, and 47,786,650.44 CNY in 2016[118]. Risks and Challenges - The company faces risks related to potential changes in tax incentives, which could adversely affect its financial performance if the favorable corporate income tax rate of 10% is altered[8]. - The company emphasizes the importance of retaining core technical personnel to maintain its technological advantage and has implemented stock option and restricted stock incentive plans to stabilize its workforce[9]. - The company reported a significant increase in inventory levels, which rose by 147.56% to ¥6,525,226.96 in 2016 from ¥2,635,848.45 in 2015, attributed to increased stocking for sales[68]. - The company's total liabilities increased significantly, with short-term loans rising to ¥171,905,750.00, up from ¥65,187,200.00, reflecting a 3.28% increase in the proportion of total assets[83]. Corporate Governance and Management - The company has established a performance evaluation system to align the contributions of management and core technical personnel with their compensation, ensuring market competitiveness[10]. - The company has been evaluated as a "CNCERTCC Network Security Emergency Service Support Unit" by the National Computer Network Emergency Technology Processing Coordination Center[38]. - The company has committed to not engaging in direct or indirect interference in daily operations by its investors[127]. - The company has a strategy to manage share transfers primarily through block trades and concentrated bidding in the secondary market after the lock-up period[127]. - The company has ensured compliance with share transfer commitments, with no violations reported[123]. Product and Service Development - The company launched 14 products and services under the "Green Alliance Cloud" by the end of 2016, including three new SaaS solutions[35]. - The company holds 120 invention patents as of December 31, 2016, with 103 patents in China and 6 in the United States[42]. - The company's remote security assessment system maintained a market share of 25.1%, ranking first for five consecutive years in the vulnerability management market[37]. - The company maintains a leading market share in the cybersecurity industry, particularly in government and financial sectors[51]. - The security products segment generated ¥766,525,085.57, making up 70.28% of total revenue, with a year-on-year growth of 19.99%[65]. Investment Activities - The company invested 8.50 million RMB in Apollo Cloud, acquiring a 15.89% stake, enhancing its position in the SDN and big data technology sector[54]. - An investment of 6.00 million RMB was made in Yide Network Technology, obtaining a 15% stake, focusing on big data analysis services[54]. - The company made significant equity investments totaling 35,455,072.88 CNY during the reporting period[87]. - The company completed the construction of a data center with 20 cabinets, 200 servers, and 500M bandwidth, supporting 12,800 virtual CPUs and 20TB memory[56]. Ownership Structure - The company does not have a controlling shareholder, with no single shareholder holding more than 30% of the total shares[193]. - The company reported a diversified ownership structure, with no actual controller identified[194]. - Major shareholders include Investor AB Limited (20.31%), Lenovo Investment (12.72%), Shen Jiya (12.15%), and Lei Yan Investment (8.71%) as of the end of 2016[193]. - The company’s foreign ownership accounted for 20.31% of total shares, with INVESTOR AB holding 75,619,120 shares[191].