Synthesis Electronic Technology (SZ:300479)2017-05-18 16:00Financial Performance - The company's operating revenue for 2016 was CNY 279,334,476.80, a decrease of 20.01% compared to CNY 349,194,914.82 in 2015[18]. - The net profit attributable to shareholders for 2016 was CNY 20,605,805.73, down 58.31% from CNY 49,424,916.17 in 2015[18]. - The net cash flow from operating activities was negative CNY 47,127,107.26, a decline of 410.09% compared to CNY 15,198,014.84 in 2015[18]. - Basic earnings per share decreased by 63.51% to CNY 0.1288 from CNY 0.3530 in 2015[18]. - The total assets at the end of 2016 were CNY 509,947,048.31, an increase of 1.94% from CNY 500,249,322.77 at the end of 2015[18]. - The net assets attributable to shareholders decreased by 0.84% to CNY 402,075,926.02 from CNY 405,470,120.29 in 2015[18]. - The company reported a significant decline in net profit margins, with a weighted average return on equity dropping to 5.10% from 16.60% in 2015[18]. - In 2016, the company's operating revenue and net profit decreased by 20.01% and 58.31% respectively due to intensified competition in the identity authentication business and significant strategic transformation investments[44]. - The company's gross margin for identity authentication products decreased by nearly 6 percentage points year-on-year, with a decline in sales revenue attributed to intensified market competition and delays in product launches[46]. Strategic Initiatives - The company plans to distribute a cash dividend of CNY 0.60 per 10 shares to all shareholders[4]. - The company aims to transition from identity recognition to intelligent cognition, positioning itself as a one-stop international service provider in related fields[31]. - The company has established a "185" strategic upgrade plan focusing on deepening industry engagement and transitioning from identity recognition to intelligent cognition[45]. - The company is expanding its business scope from identity authentication to industry deepening and intelligent cognition, which increases product complexity and quality requirements[4]. - The company has initiated a merger and acquisition activity to purchase assets from InnoMicro Technology (Tianjin) Co., Ltd., which is progressing in an orderly manner[44]. - The company has established a joint venture with XuHui Technology to enhance its self-service medical products, achieving over 130 clients in top-tier hospitals[29]. - The company has established a joint venture with Wenzhou Xuhui Technology Co., Ltd. to enhance its smart medical and internet medical services[68]. Product Development and Innovation - The company has developed and upgraded multiple models of handheld and desktop terminals, resulting in 12 new product bids or entries during the reporting period[27]. - The company has developed over 40 innovative products and launched or exclusively owns more than 20 multifunctional terminals/industry solutions, significantly contributing to national key projects in various sectors[35]. - The company has completed the development of five differentiated terminals and six supporting system software for computer vision, positioning itself as a domestic leader in this field[36]. - The company has made significant investments in artificial intelligence systems, with ongoing research and development for multiple commercial AI applications[51]. - The company has integrated its computer vision solutions into various applications, achieving commercial use in multiple provinces, showcasing its market competitiveness[30]. Market Performance - The mobile business solution has been upgraded and has secured bids from 7 banks, establishing itself as a leading brand in the mobile banking sector[28]. - The revenue from the self-service medical and banking sector increased by 400.91% to ¥25,345,046.49, indicating strong demand in this area[63]. - Revenue from identity card reading devices decreased by 43.23% to ¥187,866,733.10, while revenue from mobile business increased by 1,168.70% to ¥38,711,700.34[63]. - The company achieved a remarkable 536% year-on-year revenue growth in its key deepening businesses: mobile exhibition, bank-medical self-service, and computer vision, with a gross margin increase of 16 percentage points compared to identity authentication products[44]. Risks and Challenges - The company faces risks related to talent acquisition, product quality, and management of resources due to increased mergers and acquisitions[4]. - Risks include potential delays in acquiring high-end R&D and marketing talent, which could hinder strategic implementation[110]. - Revenue in North China, Northeast China, and Central China decreased by 53.17%, 47.87%, and 46.41% respectively compared to the previous year, primarily due to intensified competition in identity authentication business and fluctuations in industry customer demand[64]. Governance and Compliance - The company has maintained a stable profit distribution policy to ensure reasonable returns to shareholders[146]. - The company emphasizes the importance of resource sharing and consistent management practices amid increasing joint ventures and acquisitions[110]. - The company strictly adheres to legal and regulatory requirements in its governance practices, with no significant discrepancies noted with the China Securities Regulatory Commission's guidelines[197]. - The company has implemented effective internal control systems to enhance operational compliance and transparency[193]. Human Resources and Management - The company employed a total of 406 staff, including 339 in the parent company and 67 in major subsidiaries[187]. - The professional composition of employees includes 50 production personnel, 126 sales personnel, 160 technical personnel, 9 financial personnel, and 61 administrative personnel[187]. - The company emphasizes a "people-oriented, technology innovation" business philosophy in its compensation policy[188]. - The total remuneration for directors, supervisors, and senior management in 2016 amounted to CNY 3.724 million, with 15 individuals receiving compensation[184]. Future Outlook - The company aims to maintain its leading position in the identity authentication industry and expand its market presence in intelligent recognition and industry integration as part of its 2017 strategic plan[95]. - The company plans to commercialize various intelligent cognitive solutions in 2017, including service robots and smart self-service devices[73]. - The company will focus on rapidly expanding four industry deepening products, which are expected to achieve mature mass production by the end of 2016[102]. - The company aims to make convenient payment a pillar industry, focusing on partnerships with banks and expanding the market for integrated electronic scales[104].