精研科技(300709) - 2018 Q2 - 季度财报

Important Notice, Table of Contents and Definitions This section provides important notices, the report's table of contents, and definitions of key terms Company Profile and Key Financial Indicators This section provides an overview of the company and its key financial performance indicators Key Accounting Data and Financial Indicators During the reporting period, the company experienced a significant decline in performance, with total operating revenue decreasing by 28.60% to 296.13 million CNY and net profit attributable to shareholders turning to a loss of -10.66 million CNY 2018 Half-Year Key Accounting Data | Indicator | Current Period | Prior Year Period | Current Period vs. Prior Year Period Change | | :--- | :--- | :--- | :--- | | Total Operating Revenue (CNY) | 296,125,733.67 | 414,763,073.25 | -28.60% | | Net Profit Attributable to Shareholders (CNY) | -10,661,486.75 | 76,746,266.11 | -113.89% | | Net Cash Flow from Operating Activities (CNY) | 78,593,742.21 | 145,991,066.29 | -46.17% | | Basic Earnings Per Share (CNY/share) | -0.12 | 1.16 | -110.34% | | Weighted Average Return on Net Assets | -0.84% | 17.82% | -18.66% | | Total Assets (CNY) | 1,566,089,493.41 | 1,583,242,951.33 | -1.08% | | Net Assets Attributable to Shareholders (CNY) | 1,215,964,699.21 | 1,270,820,160.88 | -4.32% | Non-Recurring Gains and Losses Items and Amounts | Item | Amount (CNY) | | :--- | :--- | | Gains/Losses from Disposal of Non-Current Assets | -324.06 | | Government Grants Included in Current Profit/Loss | 1,203,875.91 | | Fair Value Changes and Investment Income from Trading Financial Assets/Liabilities | -4,535,129.27 | | Other Non-Operating Income and Expenses | -3,465,472.21 | | Other Items Meeting the Definition of Non-Recurring Gains/Losses | 5,722,447.17 | | Total | -1,074,602.46 | Business Overview This section provides a high-level overview of the company's core business operations and strategic focus Main Businesses During the Reporting Period The company primarily provides customized MIM core components for consumer electronics and automotive sectors, with performance driven by product design iterations and continuous investment in R&D and new market expansion - The company's main business involves providing high-complexity, high-precision customized MIM core components for smart phones, wearable devices, computers, and automotive sectors[24] - Performance growth is primarily driven by new demands from mobile phone technology iterations, such as dual cameras, while the company actively collaborates with clients on new product development and expands into new business areas like automotive components[25] Significant Changes in Major Assets During the reporting period, the company's major asset categories, including fixed assets, intangible assets, and construction in progress, significantly increased due to ongoing investments in capacity expansion and infrastructure development Major Asset Changes (Compared to End of 2017) | Major Asset | Growth Rate | Primary Reason | | :--- | :--- | :--- | | Fixed Assets | 17.18% | New factory buildings capitalized and new equipment acquired | | Intangible Assets | 23.36% | New land and software purchases | | Construction in Progress | 25.24% | Acquisition of large equipment and new factory infrastructure investment | - The company established a new wholly-owned US subsidiary, GIAN TECH. AMERICA, INC., with assets of approximately 17.21 million CNY, accounting for 1.42% of the company's net assets, primarily engaged in trade, R&D, investment, and services[28] Analysis of Core Competencies The company's core competencies include strong global client relationships, strategic market presence, comprehensive one-stop service capabilities, robust R&D strength, and an experienced management and technical team - The company possesses a high-quality global customer service platform, having established partnerships with numerous well-known brand enterprises, with products widely applied in consumer electronics such as smartphones and wearable devices[29] - The company offers clients one-stop service solutions from preliminary design, testing, and product development to subsequent manufacturing, and has added post-processing steps like overmolding and cold heading[31][32] - During the reporting period, the company undertook several R&D projects, including research on thermal debinding binders, Kovar alloy, titanium alloy, automotive shift system components, and ceramic powder injection molding processes, with some projects entering mass production or sample trial stages[33][34] Management Discussion and Analysis This section provides a detailed discussion and analysis of the company's operating performance and financial condition Overview In the first half of 2018, the company faced operational pressure with a 28.60% decline in revenue and a net loss, yet continued to expand fixed asset investment by 36.88% and R&D spending by 71.41% 2018 Half-Year Performance Overview | Indicator | Amount | Year-on-Year Change | | :--- | :--- | :--- | | Operating Revenue | 296 million CNY | -28.60% | | Net Profit Attributable to Parent | -10.66 million CNY | -113.89% | | Basic Earnings Per Share | -0.12 CNY | -110.34% | - To address challenges, the company continued to increase fixed asset investment (up 36.88% year-on-year) to expand capacity, and significantly invested in R&D (expenses up 71.41% year-on-year) to support client new product development and explore new technologies[39][40] Analysis of Main Business During the reporting period, the company's main business revenue and costs declined due to reduced downstream demand, with wearable device revenue significantly decreasing by 70.53% and gross margins across all product lines experiencing declines Key Financial Data Year-on-Year Changes | Item | Current Period (CNY) | Prior Year Period (CNY) | Year-on-Year Change | Primary Reason | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue | 296,125,733.67 | 414,763,073.25 | -28.60% | Decrease in downstream customer demand | | Operating Cost | 215,263,085.41 | 244,211,685.32 | -11.85% | Due to decrease in operating revenue | | Administrative Expenses | 76,495,011.19 | 51,116,578.57 | 49.65% | Increase in R&D expenses | | R&D Investment | 43,346,269.73 | 25,287,431.63 | 71.41% | Increased investment in new projects and materials R&D | Operating Revenue by Product Category | Product Category | Operating Revenue (CNY) | Gross Margin | Year-on-Year Change in Operating Revenue | Year-on-Year Change in Gross Margin | | :--- | :--- | :--- | :--- | :--- | | Wearable Devices | 47,185,208.08 | 36.88% | -70.53% | -13.85% | | Smartphones | 206,957,186.91 | 26.84% | 2.03% | -7.37% | | Processing Services and Others | 40,709,787.54 | 16.40% | -19.54% | -21.09% | Analysis of Non-Core Business Non-core business activities significantly impacted total profit negatively, primarily due to fair value changes in unhedged forward foreign exchange contracts and quality-related deductions, despite some investment income from wealth management products Non-Core Business Profit and Loss | Item | Amount (CNY) | Proportion of Total Profit | Explanation of Cause | | :--- | :--- | :--- | :--- | | Investment Income | 7,013,221.90 | -65.79% | Primarily income from wealth management products | | Fair Value Change Gains/Losses | -5,825,904.00 | 54.65% | Fair value changes of unhedged forward foreign exchange contracts | | Non-Operating Income | 288,630.72 | -2.71% | Primarily handling fee refunds and quality compensation | | Non-Operating Expenses | 3,751,175.59 | -35.19% | Primarily quality deduction losses | Analysis of Assets and Liabilities At the end of the reporting period, the company's asset and liability structure remained relatively stable, with a significant increase in monetary funds from IPO proceeds and growth in fixed assets, while short-term and long-term borrowings decreased - Monetary funds increased by 110.03% compared to the end of the previous year, primarily due to the receipt of IPO proceeds[48] - Fixed assets and construction in progress increased by 33.55% and 128.54% respectively compared to the end of the previous year, mainly due to the capitalization of new factory buildings, equipment purchases, and new factory area infrastructure investments[48] - Short-term borrowings decreased by 56.35% compared to the end of the previous year, and long-term borrowings were fully repaid[49] Analysis of Investment Status During the reporting period, the company actively expanded its investment footprint by establishing three new wholly-owned subsidiaries with a total investment of 36.58 million CNY, utilizing 566 million CNY in raised funds for production and R&D expansion, and engaging in 918 million CNY in entrusted wealth management Significant Equity Investments During the Reporting Period | Investee Company Name | Investment Method | Investment Amount (CNY) | Shareholding Percentage | Source of Funds | | :--- | :--- | :--- | :--- | :--- | | GIAN TECH. AMERICA, INC | New Establishment | 16,576,494.90 | 100.00% | Own Funds | | Daoyan (Shanghai) Electronic Technology Development Co., Ltd. | New Establishment | 20,000,000.00 | 100.00% | Own Funds | | Jingyan (Hong Kong) Technology Development Co., Ltd. | New Establishment | 0.00 | 100.00% | Own Funds | Overall Use of Raised Funds (CNY in thousands) | Item | Amount | | :--- | :--- | | Total Raised Funds | 763,425.00 | | Total Raised Funds Invested in Current Period | 70,228.30 | | Total Raised Funds Cumulatively Invested | 566,370.50 | - The company used its own funds and raised funds for entrusted wealth management totaling 918 million CNY, of which 187 million CNY came from own funds and 731 million CNY from raised funds and own funds (brokerage wealth management products)[73] Analysis of Major Holding and Participating Companies During the reporting period, key subsidiaries Changzhou Boyan and Jingyan Dongguan both reported losses, primarily due to declining parent company business, reduced assembly operations, increased R&D investment, and higher depreciation expenses Operating Performance of Major Subsidiaries (CNY) | Company Name | Operating Revenue | Operating Profit | Net Profit | | :--- | :--- | :--- | :--- | | Changzhou Boyan Technology Co., Ltd. | 12,859,757.77 | -1,051,353.87 | -1,041,029.08 | | Jingyan (Dongguan) Technology Development Co., Ltd. | 46,806,934.08 | -8,877,480.93 | -8,877,480.93 | - Changzhou Boyan's performance decline was mainly affected by the decrease in Jingyan Technology's business and its own assembly business, with gross margin decreasing by 28.34% year-on-year[81] - Jingyan Dongguan's losses were due to the impact of the parent company's business decline, increased R&D investment (accounting for 6.17% of revenue), and increased fixed asset investment leading to a 49.36% year-on-year increase in depreciation expenses[83] Forecast of Operating Performance for Jan-Sep 2018 The company forecasts a significant year-on-year decline of 81.01% to 85.26% in cumulative net profit for the first three quarters of 2018, primarily due to decreased downstream demand, intensified competition, and increased R&D investment 2018 Jan-Sep Cumulative Net Profit Forecast | Period | Estimated Net Profit (CNY in thousands) | Year-on-Year Change Range | | :--- | :--- | :--- | | Beginning of Year to End of Next Reporting Period (Jan-Sep) | 17,338.50 to 22,338.50 | Decrease of 81.01% to 85.26% | - The performance decline is mainly attributed to decreased downstream customer demand, intensified industry competition leading to lower gross margins, and the company's increased R&D investment to support major strategic clients[84] - The company expects to achieve profitability in the third quarter (July-September), with net profit estimated between 28 million CNY and 33 million CNY, though still representing a 19.24% to 31.48% decrease compared to the same period last year[84][85] Risks Faced by the Company and Countermeasures The company faces key risks including slowing growth in downstream industries, customer concentration, intensified market competition, declining gross margins, exchange rate fluctuations, and management challenges from scale expansion, which it plans to address through market development, efficiency improvements, and R&D - Key Risk Factors: - Slowing growth in downstream industries: Smartphone industry shipments are slowing, and consumer replacement cycles are lengthening[86] - Customer concentration: High reliance on major customers poses a risk if their procurement volumes decrease[87] - Intensified market competition: The MIM industry is attracting more competitors, leading to fiercer market competition[88] - Declining gross margins: Affected by customer profitability, market competition, and rising costs[88] - Exchange rate fluctuations: Export business is primarily settled in USD, facing RMB exchange rate fluctuation risks[88] Significant Matters This section details significant events and material matters that occurred during the reporting period Changes in Shares and Shareholder Information This section outlines changes in the company's share capital and provides details on its shareholder structure Number of Shareholders and Shareholding Information As of the reporting period end, the company had 15,493 common shareholders, with a high concentration among the top ten, including the actual controllers and their affiliated entities, and several major shareholders have pledged their shares - As of the end of the reporting period, the total number of common shareholders was 15,493[138] Top Ten Shareholders' Shareholding (Partial) | Shareholder Name | Shareholding Percentage | Number of Restricted Shares Held | Pledged or Frozen Status | | :--- | :--- | :--- | :--- | | Wang Mingxi | 21.95% | 19,316,880 | Pledged 3,140,000 | | Shi Juanhua | 8.33% | 7,326,000 | Pledged 2,350,000 | | Qian Yejun | 6.21% | 5,464,800 | Pledged 3,820,000 | | Huang Yichao | 5.53% | 4,866,840 | Pledged 2,016,400 | | Changzhou Chuangyan Investment Consulting Co., Ltd. | 5.40% | 4,752,000 | - | | Shanghai Yabang Venture Capital Partnership | 5.25% | 4,620,000 | Pledged 2,400,000 | - The company's actual controllers, Wang Mingxi and Huang Yichao, are father and daughter; Huang Yichao holds 59.50% equity in Changzhou Chuangyan Investment Consulting Co., Ltd[138] Information on Preferred Shares This section confirms the absence of preferred shares during the reporting period - During the reporting period, the company had no preferred shares[144] Information on Directors, Supervisors, and Senior Management This section confirms no changes in the composition or shareholdings of the company's directors, supervisors, and senior management during the reporting period - During the reporting period, there were no changes in the shareholdings or personnel composition of the company's directors, supervisors, and senior management[146][147] Information on Corporate Bonds This section confirms the absence of publicly issued and listed corporate bonds that are outstanding or fully unredeemed - During the reporting period, the company had no publicly issued and listed corporate bonds that were outstanding or not fully redeemed as of the approval date of the semi-annual report[150] Financial Report This section presents the company's unaudited consolidated and parent company financial statements for the half-year period Financial Statements This section provides the company's unaudited consolidated and parent company financial statements for the first half of 2018, including the balance sheet, income statement, cash flow statement, and statement of changes in equity Consolidated Balance Sheet As of June 30, 2018, the company's total assets were 1.57 billion CNY, a slight decrease of 1.08% from the beginning of the period, with total liabilities at 350 million CNY and equity attributable to the parent company at 1.22 billion CNY Consolidated Balance Sheet Key Items (CNY) | Item | Period-End Balance | Period-Beginning Balance | | :--- | :--- | :--- | | Total Assets | 1,566,089,493.41 | 1,583,242,951.33 | | Total Current Assets | 886,202,421.82 | 1,000,329,889.91 | | Total Non-Current Assets | 679,887,071.59 | 582,913,061.42 | | Total Liabilities | 350,124,794.20 | 312,422,790.45 | | Total Current Liabilities | 331,889,704.35 | 299,986,824.69 | | Total Non-Current Liabilities | 18,235,089.85 | 12,435,965.76 | | Total Owners' Equity | 1,215,964,699.21 | 1,270,820,160.88 | Consolidated Income Statement In the first half of 2018, the company's total operating revenue reached 296 million CNY, a 28.60% year-on-year decrease, resulting in a net loss of -10.66 million CNY due to disproportionate cost reductions and increased management expenses, primarily R&D Consolidated Income Statement Key Items (CNY) | Item | Current Period Amount | Prior Period Amount | | :--- | :--- | :--- | | I. Total Operating Revenue | 296,125,733.67 | 414,763,073.25 | | II. Total Operating Costs | 305,711,799.15 | 327,447,313.17 | | Including: Operating Cost | 215,263,085.41 | 244,211,685.32 | | Administrative Expenses | 76,495,011.19 | 51,116,578.57 | | III. Operating Profit | -7,198,123.07 | 89,343,918.45 | | IV. Total Profit | -10,660,667.94 | 89,271,045.78 | | V. Net Profit | -10,661,486.75 | 76,746,266.11 | | Net Profit Attributable to Parent Company Owners | -10,661,486.75 | 76,746,266.11 | Consolidated Cash Flow Statement During the reporting period, net cash flow from operating activities decreased by 46.17% to 78.59 million CNY due to lower sales, while net cash outflow from investing activities significantly increased to 410 million CNY driven by wealth management product purchases and fixed asset acquisitions Consolidated Cash Flow Statement Key Items (CNY) | Item | Current Period Amount | Prior Period Amount | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 78,593,742.21 | 145,991,066.29 | | Net Cash Flow from Investing Activities | -410,184,183.71 | -69,757,456.22 | | Net Cash Flow from Financing Activities | -53,657,762.01 | -67,728,052.52 | | Net Increase in Cash and Cash Equivalents | -385,495,287.03 | 6,122,773.58 | | Cash and Cash Equivalents at Period End | 204,519,272.64 | 105,195,333.02 | - The company's half-year financial report is unaudited[152] Notes to Consolidated Financial Statements This section provides detailed explanations for key items in the consolidated financial statements, including cash composition, accounts receivable aging and impairment, inventory classification and write-downs, and changes in fixed assets and construction in progress - As of the period end, the company's restricted monetary funds amounted to 39.76 million CNY, all of which were bank acceptance bill deposits[320] - At period end, the book balance of accounts receivable was 189 million CNY, with a bad debt provision of 9.52 million CNY based on aging, representing an impairment rate of 5.04%, and 99.49% of accounts receivable were within one year of age[329][330] - At period end, the book value of inventory was 147 million CNY, with work-in-progress and raw materials accounting for a higher proportion, and a total inventory impairment provision of 11.03 million CNY was made[358] - During the reporting period, the company's R&D expenses within administrative expenses were 43.35 million CNY, an increase of 71.41% from 25.29 million CNY in the prior year, which was the main reason for the increase in administrative expenses[480] Catalogue of Reference Documents This section lists all documents available for reference