盈方微(000670) - 2017 Q4 - 年度财报(更新)

Important Notes, Table of Contents, and Definitions Important Notes The company's board, supervisory board, and senior management guarantee the report's accuracy; auditors issued a qualified opinion with an emphasis of matter, and no dividends or bonus shares are planned - The company's board of directors, supervisory board, and senior management guarantee the annual report's truthfulness, accuracy, and completeness, free from false records, misleading statements, or major omissions[4] - Asia Pacific (Group) Certified Public Accountants (Special General Partnership) issued an audit report with an emphasis of matter and a qualified opinion for the company[5] - The company plans not to distribute cash dividends, bonus shares, or convert capital reserves into share capital[6] Table of Contents This section lists the complete chapter structure of the annual report, covering company profile, business overview, operational analysis, significant events, and financial reports - The report's table of contents includes twelve main chapters, from important notes to the catalog of reference documents, comprehensively covering the company's annual report content[8] Definitions This section provides definitions for common terms and company-related entities used in the report, ensuring investors' accurate understanding of the content - Key terms such as "InfoTM Microelectronics", "Company Shares", "Actual Controller", and "Controlling Shareholder" are clearly defined in the report[10] - Major subsidiaries, including Shanghai InfoTM Microelectronics Co., Ltd., InfoTM Microelectronics (Hong Kong) Co., Ltd., and InfoTM, Inc., are listed[10] Company Profile and Key Financial Indicators Company Information This section provides the company's basic registration information, including stock abbreviation, code, listing exchange, legal representative, and registered and office addresses - The company's stock abbreviation is "InfoTM Microelectronics", stock code "000670", listed on the Shenzhen Stock Exchange[12] - The company's legal representative is Fang Xusheng (acting), with its registered address in Shashi District, Jingzhou City, Hubei Province, and office address in Pudong New Area, Shanghai[12] Contact Person and Contact Information This section lists the contact information for the company's Board Secretary and Securities Affairs Representative, facilitating investor communication - The acting Board Secretary is Fang Xusheng, and the Securities Affairs Representative is Dai Bo, both with contact addresses at 2nd Floor, Building 4, No. 500 Shengxia Road, Pudong New Area, Shanghai[13] Information Disclosure and Document Storage Location This section specifies the company's designated information disclosure media and the location where the annual report is kept for reference - The company's designated information disclosure media include China Securities Journal, Securities Times, Shanghai Securities News, Securities Daily, and Juchao Information Network (www.cninfo.com.cn)[14](index=14&type=chunk) Registration Change Status During the reporting period, there were no changes in the company's main business or controlling shareholder status - The company's main business has not changed since its listing during the reporting period[16] - The company's controlling shareholder has not changed throughout its history during the reporting period[16] Other Relevant Information This section discloses information about the accounting firm appointed by the company and the sponsor institution that performed continuous supervision duties during the reporting period - The company's appointed accounting firm is Asia Pacific (Group) Certified Public Accountants (Special General Partnership), with signing accountants Chen Gang and Zhou Xianhong[17] - The sponsor institution appointed by the company to perform continuous supervision duties during the reporting period was China Merchants Securities Co., Ltd., with sponsor representative Wang Luning, and the supervision period was from July 15, 2014, to July 15, 2017[17] Key Accounting Data and Financial Indicators In 2017, the company's operating revenue significantly decreased by 49.39% year-on-year, net profit attributable to shareholders turned from profit to loss, decreasing by 1469.27%, and total assets and net assets also significantly reduced 2017 Key Accounting Data and Financial Indicators | Indicator | 2017 (CNY) | 2016 (CNY) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 241,073,950.69 | 476,364,098.15 | -49.39% | | Net Profit Attributable to Shareholders of Listed Company | -330,976,597.17 | 24,171,705.77 | -1,469.27% | | Net Profit Attributable to Shareholders of Listed Company (Excluding Non-Recurring Items) | -337,755,088.94 | 14,348,421.18 | -2,453.95% | | Net Cash Flow from Operating Activities | 56,802,585.94 | 46,725,671.32 | 21.57% | | Basic Earnings Per Share (CNY/share) | -0.4053 | 0.0296 | -1,469.26% | | Weighted Average Return on Net Assets | -61.18% | 3.76% | -64.94% | | Total Assets (Year-End) | 455,326,605.87 | 799,581,938.63 | -43.05% | | Net Assets Attributable to Shareholders of Listed Company (Year-End) | 371,649,436.79 | 710,252,467.88 | -47.67% | Differences in Accounting Data Under Domestic and Overseas Accounting Standards The company's net profit and net assets in financial reports disclosed under International Accounting Standards or overseas accounting standards did not differ from those under Chinese Accounting Standards during the reporting period - The company's net profit and net assets in financial reports disclosed under International Accounting Standards did not differ from those under Chinese Accounting Standards during the reporting period[19] - The company's net profit and net assets in financial reports disclosed under overseas accounting standards did not differ from those under Chinese Accounting Standards during the reporting period[20] Quarterly Key Financial Indicators In 2017, the company's quarterly operating revenue continuously declined, with the fourth quarter experiencing a significant net loss due to large asset impairment provisions and exchange losses 2017 Quarterly Key Financial Indicators | Indicator | Q1 (CNY) | Q2 (CNY) | Q3 (CNY) | Q4 (CNY) | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue | 82,934,994.42 | 74,945,216.28 | 43,336,408.68 | 39,857,331.31 | | Net Profit Attributable to Shareholders of Listed Company | 5,060,473.97 | -118,200.43 | -25,006,504.63 | -310,912,366.08 | | Net Profit Attributable to Shareholders of Listed Company (Excluding Non-Recurring Items) | 3,500,351.65 | -1,806,057.05 | -25,802,943.38 | -313,646,440.16 | | Net Cash Flow from Operating Activities | 71,795,785.29 | -49,031,272.92 | -8,690,216.39 | 42,728,289.96 | - In 2017, the company experienced its first operating loss due to decreased chip business revenue, reduced data center lease income, significant asset impairment provisions, and exchange losses, with the largest loss occurring in Q4[22][23] Non-Recurring Gains and Losses Items and Amounts This section lists the company's non-recurring gains and losses items and their amounts for 2017, 2016, and 2015, totaling CNY 6.78 million in 2017 Non-Recurring Gains and Losses Items and Amounts | Item | 2017 Amount (CNY) | 2016 Amount (CNY) | 2015 Amount (CNY) | | :--- | :--- | :--- | :--- | | Gains/Losses from Disposal of Non-Current Assets | 18,095,469.13 | 68,291.63 | -6,638,094.95 | | Government Subsidies Included in Current Profit/Loss | 4,356,071.27 | 10,727,065.52 | 6,742,155.69 | | Other Non-Operating Income and Expenses (Excluding Above) | -10,137,022.72 | 785,575.26 | -565,546.41 | | Less: Income Tax Impact | 0 | 1,703,425.27 | 805,564.03 | | Impact on Minority Interests (After Tax) | 5,536,025.91 | 54,222.55 | 85,273.06 | | Total | 6,778,491.77 | 9,823,284.59 | -1,352,322.76 | Business Overview Main Businesses Engaged in During the Reporting Period The company primarily engages in SoC chip design, R&D, sales, and providing overall solutions, while actively developing big data center services and Beidou chip design and application development to enhance profitability - The company is a leading domestic SoC chip design enterprise, primarily targeting mobile internet terminals, smart homes, video surveillance, and action cameras[29] - The company continues to develop its "big data center" business, based on data center construction, cabinet leasing, and power broadband services[29] - The company continuously invests in Beidou chip design and industry application development to comprehensively enhance its profitability[29] Main Businesses The company's core business is SoC chip design, with expansion into big data center and Beidou businesses, forming a diversified profit model - The company primarily engages in the R&D, design, and sales of intelligent processors and related software, offering integrated hardware design and software application solutions[29] - The company operates in the 'C Manufacturing—C39 Computer, Communication and Other Electronic Equipment Manufacturing' industry[29] Operating Model The chip design business adopts a Fabless model, the big data center business is primarily asset leasing, and the Beidou business develops hardware and software systems based on chips - The chip design business operates on a Fabless model, focusing on design and software development while outsourcing manufacturing, packaging, and testing[30] - The big data center business primarily involves asset leasing, providing data centers, cabinet rentals, power and broadband access, and operation and maintenance services to large internet companies or specific clients[31] - The Beidou business develops and sells Beidou industry-specific hardware and software systems based on Beidou chips, offering chip products and complete solutions[32] Significant Changes in Major Assets During the reporting period, the company's intangible assets and development expenditures significantly decreased due to amortization and impairment provisions, with overseas assets primarily including Hong Kong and US subsidiaries - Intangible assets decreased by CNY 80.76 million (65.30%) at period-end compared to period-start, primarily due to amortization and impairment provisions during the period[34] - Development expenditures decreased by CNY 58.07 million (51.13%) at period-end compared to period-start, mainly due to impairment provisions during the period[34] Major Overseas Assets | Asset Name | Region | Total Assets at Year-End (CNY 10,000) | Operating Model | Net Profit for the Year (CNY 10,000) | Proportion of Overseas Assets to Company's Net Assets | | :--- | :--- | :--- | :--- | :--- | :--- | | InfoTM Microelectronics (Hong Kong) Co., Ltd. | Hong Kong | 10,011.32 | Primarily engaged in electronic product sales | -7,506.61 | -10.74% | | INFOTM,INC. | USA | 26,396.43 | Primarily engaged in data center property and equipment operations | -1,138.42 | 15.63% | Core Competitiveness Analysis Leveraging years of SoC chip design experience, the company has developed core competencies in R&D technology, market understanding, and industry chain collaboration, while actively expanding its big data business - The company has developed excellent design capabilities in high-end SoC processor R&D, holding 11 computer software copyrights, 30 patents, and 17 pending patent applications[37] - The company adheres to a customer-oriented development model, enhancing market influence through precise market positioning, reasonable product structure, and differentiated pricing[39] - The company has established close cooperation with mainstream industry players, tool vendors, and world-class foundries, integrating upstream and downstream industry chain resources[40] Management Discussion and Analysis Overview During the reporting period, the company experienced its first operating loss, primarily due to declining chip business revenue, reduced data center lease income, significant asset impairment provisions, and exchange losses. The company actively adjusted its chip business direction, changed data center clients with more favorable agreements, and made progress in its Beidou chip project - In 2017, the company reported its first operating loss, with operating revenue of CNY 241.07 million and net profit attributable to shareholders of -CNY 330.98 million[43] - Chip business revenue declined primarily due to lower-than-expected market capacity for innovative products and product technical specification upgrades[44] - The US data center business terminated cooperation with its original client, High Sharp, and signed a more favorable lease agreement with new client BMMTECH CANADA CORPORATION[46][47] - The Beidou high-precision chip project by subsidiary YuXin Technology has completed engineering verification and commenced sales in power and surveying industries[48] Main Business Analysis The company's main business revenue and costs significantly decreased year-on-year, with dramatic changes in balance sheet items, particularly accounts receivable, inventories, intangible assets, and development expenditures, which significantly reduced due to large impairment provisions. Financial expenses substantially increased due to exchange losses, and net cash flow from operating activities grew, but net profit incurred a substantial loss Major Balance Sheet Item Changes | Item | 2017 Year-End (CNY) | 2016 Year-End (CNY) | Change Rate (%) | Explanation of Significant Change | | :--- | :--- | :--- | :--- | :--- | | Cash and Equivalents | 56,315,982.64 | 84,263,440.83 | -33.17% | Decreased operating revenue | | Accounts Receivable | 29,383,415.37 | 169,822,096.52 | -82.70% | Provision for bad debts | | Inventories | 11,219,950.93 | 50,729,377.71 | -77.88% | Provision for inventory depreciation | | Intangible Assets | 42,915,921.63 | 123,672,625.73 | -65.30% | Amortization and impairment provision | | Development Expenditures | 55,493,100.00 | 113,559,235.26 | -51.13% | Impairment provision | | Deferred Income Tax Assets | 47,466,597.44 | 15,546,171.83 | 205.33% | Subsidiary recognized deferred income tax assets | | Other Payables | 47,477,725.25 | 6,772,107.53 | 601.08% | Increase in business deposits received | | Retained Earnings | -227,682,407.46 | 103,294,189.71 | -320.42% | Significant loss in current period | Major Income Statement Item Changes | Item | 2017 (CNY) | 2016 (CNY) | Change Rate (%) | Explanation of Significant Change | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue | 241,073,950.69 | 476,364,098.15 | -49.39% | Decrease in trading revenue | | Asset Impairment Losses | 316,449,396.11 | 30,302,128.23 | 944.31% | Increase in impairment provisions for receivables, etc. | | Financial Expenses | 10,215,776.24 | -9,908,511.95 | 203.10% | Increase in exchange losses due to exchange rate fluctuations | | Gains from Asset Disposal | 18,095,469.13 | 68,291.63 | 26397.35% | Gains from subsidiary's disposal of intangible assets as capital contribution | | Net Profit Attributable to Parent Company Owners | -330,976,597.17 | 24,171,705.77 | -1469.27% | Loss in current period | Overview This section details the comparison of the company's balance sheet and income statement major items' period-end/current period balances with period-start/prior year balances, explaining changes exceeding 30%, primarily due to revenue decline, asset impairment, and exchange rate fluctuations - Cash and equivalents, notes receivable, accounts receivable, prepayments, inventories, other current assets, intangible assets, development expenditures, and long-term deferred expenses all significantly decreased at period-end year-on-year[49] - Deferred income tax assets and other payables significantly increased at period-end year-on-year[49] - Operating revenue and cost significantly decreased year-on-year, while asset impairment losses, financial expenses, and non-operating expenses significantly increased, leading to a substantial net loss attributable to parent company owners[50] Revenue and Cost The company's operating revenue decreased by 49.39% year-on-year in 2017, mainly due to a significant reduction in trading business revenue. Chip-related business and overseas revenue contributed significantly but also declined. Customer and supplier concentration for the top five was high Operating Revenue Composition | Item | 2017 Amount (CNY) | Proportion of Operating Revenue (%) | 2016 Amount (CNY) | Proportion of Operating Revenue (%) | YoY Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Total Operating Revenue | 241,073,950.69 | 100% | 476,364,098.15 | 100% | -49.39% | | Chip Business | 90,112,770.44 | 37.38% | 146,042,329.34 | 30.66% | -38.30% | | Trading Business | 1,161,538.44 | 0.48% | 151,653,239.70 | 31.84% | -99.23% | | Service Business | 143,339,424.53 | 59.46% | 175,517,943.30 | 36.84% | -18.33% | | Real Estate Business | 6,460,217.28 | 2.68% | 3,150,585.81 | 0.66% | 105.05% | | Domestic Revenue | 93,361,141.94 | 38.73% | 230,841,669.03 | 48.46% | -59.56% | | Overseas Revenue | 147,712,808.75 | 61.27% | 245,522,429.12 | 51.54% | -39.84% | - The company actively scaled down its trading business, leading to a 99.23% year-on-year decrease in revenue from this segment[52][62] - Chip sales volume decreased by 92.34% year-on-year, and production volume decreased by 87.71%, primarily due to reduced customer demand and the company's strategic reduction in trading business[56] - Sales to the top five customers accounted for 96.54% of total annual sales, and purchases from the top five suppliers accounted for 76.45% of total annual purchases, indicating high customer and supplier concentration[63] Expenses The company's financial expenses significantly increased by 203.10% year-on-year, primarily due to increased exchange losses resulting from RMB appreciation Key Expenses | Item | 2017 (CNY) | 2016 (CNY) | YoY Change (%) | Significant Change Explanation | | :--- | :--- | :--- | :--- | :--- | | Selling Expenses | 6,911,139.33 | 6,341,252.87 | 8.99% | - | | Administrative Expenses | 133,172,280.49 | 115,548,034.66 | 15.25% | - | | Financial Expenses | 10,215,776.24 | -9,908,511.95 | -203.10% | Due to exchange losses from RMB appreciation | R&D Investment The company's total R&D investment in 2017 was CNY 89.01 million, accounting for 36.92% of operating revenue, with both the number of R&D personnel and capitalized R&D investment decreasing R&D Investment | Indicator | 2017 | 2016 | Change Ratio (%) | | :--- | :--- | :--- | :--- | | Number of R&D Personnel (persons) | 65 | 118 | -44.92% | | Proportion of R&D Personnel | 47.10% | 55.92% | -8.82% | | R&D Investment Amount (CNY) | 89,010,598.33 | 100,716,568.95 | -11.62% | | R&D Investment as % of Operating Revenue | 36.92% | 21.14% | 15.78% | | Capitalized R&D Investment Amount (CNY) | 19,325,852.68 | 45,730,531.16 | -57.74% | | Capitalized R&D Investment as % of Total R&D Investment | 21.71% | 45.41% | -23.70% | - Capitalized R&D investment decreased by 57.74% year-on-year, mainly because some capitalized projects were completed in the previous year and R&D investment decreased this year[67] Cash Flow The company's net cash flow from operating activities increased by 21.57% year-on-year, but cash outflow from investing activities remained substantial, and net cash flow from financing activities significantly decreased due to no financing activities in the current period. A significant difference exists between net cash flow from operating activities and net profit, primarily due to large asset impairment provisions Cash Flow Situation | Item | 2017 (CNY) | 2016 (CNY) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 56,802,585.94 | 46,725,671.32 | 21.57% | | Net Cash Flow from Investing Activities | -82,348,342.69 | -108,548,077.55 | 24.14% | | Net Cash Flow from Financing Activities | 0 | 47,253,546.36 | -100.00% | | Net Increase in Cash and Cash Equivalents | -27,429,988.64 | -11,447,539.77 | -139.61% | - Total cash inflow from operating activities decreased by 40.36% year-on-year, primarily due to reduced cash received from sales of goods and services[70] - Total cash inflow from financing activities decreased by 100% year-on-year, as there were no cash inflows from financing activities in the current reporting period[70] - A significant difference exists between net cash flow from operating activities and net profit for the year, mainly due to the CNY 383.70 million asset impairment provision made in the current reporting period[71] Non-Core Business Analysis Among the company's non-core businesses, asset impairment losses had a huge impact on total profit, mainly due to impairment provisions for accounts receivable, intangible assets, development expenditures, and inventories Impact of Non-Core Business on Total Profit | Item | Amount (CNY) | Proportion of Total Profit (%) | Reason for Formation | | :--- | :--- | :--- | :--- | | Asset Impairment | 316,449,396.11 | -87.97% | Primarily due to impairment provisions for receivables, intangible assets, development expenditures, and inventories | Asset and Liability Status The company's asset and liability structure underwent significant changes, with accounts receivable substantially decreasing due to impairment provisions, and the proportion of fixed assets increasing Significant Changes in Asset Composition | Item | 2017 Year-End Amount (CNY) | Proportion of Total Assets (%) | 2016 Year-End Amount (CNY) | Proportion of Total Assets (%) | Change in Proportion (%) | Explanation of Significant Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Cash and Equivalents | 56,315,982.64 | 12.37% | 84,263,440.83 | 10.54% | 1.83% | - | | Accounts Receivable | 29,383,415.37 | 6.45% | 169,822,096.52 | 21.24% | -14.79% | Due to impairment provision in current period | | Inventories | 11,219,950.93 | 2.46% | 50,729,377.71 | 6.34% | -3.88% | - | | Fixed Assets | 134,979,056.17 | 29.64% | 161,001,265.24 | 20.14% | 9.50% | - | - The company has no assets or liabilities measured at fair value, and no asset rights were restricted at the end of the reporting period[76] Investment Status During the reporting period, the company had no significant equity investments, non-equity investments, securities investments, or derivative investments - The company had no securities investments during the reporting period[76] - The company had no derivative investments during the reporting period[77] Disposal of Major Assets and Equity The company did not sell any significant assets or equity during the reporting period - The company did not sell any significant assets during the reporting period[79] - The company did not sell any significant equity during the reporting period[80] Analysis of Major Controlled and Invested Companies The company's major subsidiaries, InfoTM Microelectronics Co., Ltd. and InfoTM Microelectronics (Hong Kong) Co., Ltd., experienced significant declines in total assets, net assets, operating revenue, and net profit during the reporting period, primarily due to increased asset impairment provisions Key Subsidiary Financial Information | Company Name | Company Type | Registered Capital (CNY) | Total Assets (CNY) | Net Assets (CNY) | Operating Revenue (CNY) | Net Profit (CNY) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | InfoTM Microelectronics Co., Ltd. | Subsidiary | 180,000,000.00 | 457,999,404.34 | 31,924,207.58 | 105,029,358.12 | -236,735,860.81 | | InfoTM Microelectronics (Hong Kong) Co., Ltd. | Subsidiary | US$1,000,000.00 | 100,113,197.73 | -40,099,862.80 | 24,941,557.55 | -75,066,052.18 | - Net profit of InfoTM Microelectronics Co., Ltd. decreased by 86703.29% year-on-year, and InfoTM Microelectronics (Hong Kong) Co., Ltd. decreased by 327.17%, both primarily due to increased asset impairment provisions in the current reporting period[81][82] Information on Structured Entities Controlled by the Company The company had no controlled structured entities during the reporting period - The company had no controlled structured entities during the reporting period[83] Outlook on the Company's Future Development The company will seize opportunities in China's integrated circuit industry, focusing on chip R&D and design, expanding big data services and Beidou system operations, and achieving industry integration through M&A and business synergies. The 2018 plan includes enhancing core capabilities, expanding overseas data center scale, and actively promoting Beidou technology applications. Concurrently, the company faces product and market, exchange rate, human resources, and technology leakage risks - In 2017, global semiconductor industry sales exceeded USD 400 billion, a 20.6% increase year-on-year; China's integrated circuit industry sales reached CNY 541.13 billion, a 24.8% increase year-on-year[84] - The company's future development strategy focuses on "chip R&D and design as the main business, providing big data services and Beidou system operations," achieving industry integration through M&A, external investments, and business synergies[87] - The 2018 operating plan includes enhancing core capabilities in "chips, applications, and technology," expanding the pan-imaging market, increasing investment in overseas data centers, exploring new business models, and actively promoting Beidou technology application solutions[88] - The company may face product and market risks (high R&D investment, intense competition), exchange rate risks (impact of fluctuations on transactions and foreign currency translation), and human resources and technology leakage risks (talent loss, inadequate core technology protection)[89][90] Reception of Research, Communication, and Interview Activities During the reporting period, the company hosted 1,688 individual investors through various means, without disclosing or leaking any undisclosed significant information Reception of Research, Communication, and Interview Activities | Reception Date | Reception Method | Type of Recipient | Number of Receptions | Number of Institutions | Number of Individuals | Disclosure of Undisclosed Significant Information | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | 2017-06-08 | Other | Other | 1,688 | 0 | 1,688 | No | | 2017-12-31 | Phone Communication | Individual | | | | | | 2017-12-31 | Other | Individual | | | | | Significant Events Profit Distribution of Company's Common Shares and Capital Reserve Conversion to Share Capital The company did not distribute profits or convert capital reserves into share capital for 2015, 2016, and 2017, primarily due to significant prior-year losses and the need to maintain liquidity for R&D investment and daily operations - The company did not distribute profits for 2016, and the profit distribution proposal was approved by the 2016 annual general meeting of shareholders[94] - The company did not distribute profits or convert capital reserves into share capital for 2015, 2016, and 2017, with retained earnings carried forward to the next year[95][96] - The company is not eligible for cash dividends due to significant prior-year losses and the need to maintain strong liquidity for high R&D expenses and long cycles in the IC design industry[96] Profit Distribution and Capital Reserve Conversion to Share Capital Plan for the Current Reporting Period The company plans not to distribute cash dividends, bonus shares, or convert capital reserves into share capital for the current year - The company plans not to distribute cash dividends, bonus shares, or convert capital reserves into share capital for the current year[98] Fulfillment of Commitments The company's controlling shareholder, actual controller, and other promisors all timely fulfilled their share lock-up and reduction commitments during the reporting period, and continue to fulfill commitments regarding horizontal competition, related-party transactions, and fund occupation - The share lock-up commitments of controlling shareholders InfoTM Microelectronics and ShunYuan Investment expired on July 15, 2017, with no breaches by the promisors[99] - InfoTM Microelectronics and actual controller Chen Zhicheng committed that the price for reducing company shares through the secondary market would not be less than CNY 15/share within 48 months from the completion of the share reform, a commitment still valid and being fulfilled[99] - InfoTM Microelectronics committed to ensuring the listed company's independent operation, avoiding horizontal competition, and standardizing/reducing related-party transactions, a commitment still valid and being fulfilled[100] Non-Operating Funds Occupied by Controlling Shareholders and Their Related Parties from the Listed Company There were no non-operating funds occupied by controlling shareholders or their related parties from the listed company during the reporting period - There were no non-operating funds occupied by controlling shareholders or their related parties from the listed company during the reporting period[102] Explanation by the Board of Directors, Supervisory Board, and Independent Directors (if any) on the Accounting Firm's "Non-Standard Audit Report" for the Current Reporting Period The company's board of directors and supervisory board understand and acknowledge the audit report with an emphasis of matter and a qualified opinion issued by the accounting firm. The board believes that the impairment provision for High Sharp's accounts receivable complies with accounting standards and prudence principles, but independent directors hold differing opinions on this matter - The company's board of directors understands and acknowledges the emphasis of matter in the 2017 audit report issued by Asia Pacific CPA, and is actively cooperating with the China Securities Regulatory Commission's investigation[104] - The board believes that the significant bad debt provision for all accounts receivable from High Sharp complies with Accounting Standards for Business Enterprises and the company's accounting policies, with sufficient basis and adherence to the prudence principle[104][105] - The supervisory board agrees with the board's special statement, affirming that the impairment provision is adequately supported and reasonably quantified for the qualified opinion matter[107] - Independent director Yang Licheng believes management failed to provide sufficient evidence to prove the fairness and compliance of the recognition and measurement of impairment provisions for accounts receivable from High Sharp and others, as well as for development expenditures, intangible assets, and inventories[109] - Independent director Zong Shicai agrees with Asia Pacific CPA's qualified opinion and abstained from voting on the full provision for High Sharp's accounts receivable[110] Explanation of Changes in Accounting Policies, Accounting Estimates, and Accounting Methods Compared to the Previous Year's Financial Report The company's accounting policies changed in 2017, primarily involving income statement presentation, reclassification of asset disposal gains/losses, and government grant accounting, to comply with new accounting standards and financial statement format revisions issued by the Ministry of Finance - The company changed its accounting policies in accordance with Accounting Standard for Business Enterprises No. 42, revised Accounting Standard for Business Enterprises No. 16, and the Ministry of Finance's Notice on Revising and Issuing the Format of Financial Statements for General Enterprises[111] - Accounting policy changes include separately presenting "net profit from continuing operations" and "net profit from discontinued operations" in the income statement, adding "gains from asset disposal," and recognizing government grants related to daily activities as other income[100][111] Explanation of Significant Accounting Error Corrections Requiring Retrospective Restatement During the Reporting Period The company had no significant accounting error corrections requiring retrospective restatement during the reporting period - There were no significant accounting error corrections requiring retrospective restatement during the reporting period[112] Explanation of Changes in the Scope of Consolidated Financial Statements Compared to the Previous Year's Financial Report The scope of consolidated financial statements did not change during the reporting period - The scope of consolidated financial statements did not change during the reporting period[113] Appointment and Dismissal of Accounting Firms The company re-appointed Asia Pacific (Group) Certified Public Accountants (Special General Partnership) as the audit firm for its 2017 financial report and internal control, with an audit fee of CNY 2.2 million - The company re-appointed Asia Pacific (Group) Certified Public Accountants (Special General Partnership) as the audit firm for its 2017 financial report and internal control[114] - The remuneration for the domestic accounting firm was CNY 2.2 million, with an audit service continuity of 2 years[114] Facing Suspension and Termination of Listing After Annual Report Disclosure The company currently does not face suspension or termination of listing - The company currently does not face suspension or termination of listing[115] Bankruptcy Reorganization Matters No bankruptcy reorganization matters occurred during the reporting period - No bankruptcy reorganization matters occurred during the reporting period[115] Major Litigation and Arbitration Matters A sales contract dispute lawsuit involving the company's wholly-owned subsidiary, InfoTM Microelectronics Co., Ltd., was withdrawn by the plaintiff, and property preservation measures were lifted, with no impact on the company's current or subsequent period profits - The plaintiff withdrew the lawsuit in the sales contract dispute involving the company's wholly-owned subsidiary InfoTM Microelectronics Co., Ltd. and Shenzhen Datan Digital Electronics Co., Ltd., which began in 2015[117] - The court ruled to lift the property preservation measures on InfoTM Microelectronics Co., Ltd.'s assets, and the lawsuit had no impact on the company's current or subsequent period profits[117] Penalties and Rectification Status The company has been under investigation by the China Securities Regulatory Commission since October 2016 for alleged violations, with no conclusion reached as of the end of the reporting period - The company received an "Investigation Notice" from the China Securities Regulatory Commission on October 14, 2016, for alleged violations, with the investigation ongoing as of the report date[118] - As of the date of this report, the investigation is still in progress, and the company has not received any conclusive opinions or decisions[118] Integrity Status of the Company, Its Controlling Shareholder, and Actual Controller The company's actual controller, Chen Zhicheng, was arrested on suspicion of bill fraud, and his shares in the company were successively frozen. The company's controlling shareholder and actual controller are involved in multiple lawsuits, including loan contract disputes and bill recourse disputes - On February 13, 2018, the company's actual controller, Mr. Chen Zhicheng, was arrested by the Gansu Provincial Public Security Department on suspicion of bill fraud, with the investigation ongoing[119] - All company shares held by InfoTM Microelectronics were successively frozen by public security authorities due to the aforementioned matter[119] - Controlling shareholder InfoTM Microelectronics and actual controller Chen Zhicheng are involved in multiple lawsuits, including loan contract disputes, bill recourse disputes, and financial loan contract disputes[120][121] Implementation of Company's Equity Incentive Plan, Employee Stock Ownership Plan, or Other Employee Incentive Measures The company terminated its 2015 employee stock ownership plan in March 2017 - On March 13, 2017, the company's board of directors and supervisory board approved the "Proposal on Terminating the 2015 Employee Stock Ownership Plan," deciding to terminate the plan[122] Significant Related-Party Transactions During the reporting period, the company had no significant related-party transactions related to daily operations, asset or equity acquisition/disposal, joint external investments, or related-party creditor-debtor relationships - The company had no related-party transactions related to daily operations during the reporting period[124] - The company had no related-party transactions involving asset or equity acquisition/disposal during the reporting period[125] - There were no related-party creditor-debtor relationships during the reporting period[127] Significant Contracts and Their Fulfillment The data center site lease service contract of the company's subsidiary INFOTM,INC. changed during the reporting period; after terminating cooperation with the original client High Sharp, a new lease agreement was signed with BMMTECH. Lease income has a significant impact on the company's profit - The site lease service contract between the company's subsidiary INFOTM,INC. and High Sharp was terminated on December 15, 2017[132] - On the same day, INFOTM,INC. signed a new "Lease Agreement" with BMMTECH, with a lease term from January 1, 2018, to December 31, 2019[132] Impact of Lease Income on Company's Total Profit | Lessor Name | Lessee Name | Lease Asset Details | Lease Income (CNY 10,000) | Impact on Company's Net Profit | | :--- | :--- | :--- | :--- | :--- | | INFOTM,INC. | High Sharp | Site, Equipment | 11,787.3 | Increase in net profit | | INFOTM,INC. | High Sharp | Site, Equipment | 2,525.85 | Increase in net profit | - The company had no significant guarantees, entrusted wealth management, or entrusted loans during the reporting period[134][135][136] Social Responsibility Status The company adheres to the philosophy of "people-oriented, harmonious development" and fulfills its social responsibilities in protecting investor and creditor rights, safeguarding employee rights, and participating in public welfare. The company did not engage in targeted poverty alleviation and is not a key polluting unit - The company strictly adheres to laws and regulations, protects shareholder and creditor rights, convenes general meetings in accordance with the law, and fulfills information disclosure obligations[138] - The company strictly implements national employment policies, safeguards employee rights, and provides social security, medical care, and vocational training[139] - The company actively participates in social welfare, pays taxes according to law, and conducts investor education and constitutional literacy promotion[139] - The company did not carry out targeted poverty alleviation work in the reporting year and has no subsequent plans for it[140] - As a chip design and R&D enterprise, the company does not cause environmental pollution and is not classified as a key polluting unit by environmental protection authorities[141] Explanation of Other Significant Matters The company faces an ongoing investigation by the China Securities Regulatory Commission, and a judicial auction of some of the controlling shareholder's shares may lead to a change in actual control, though the company's stock had its delisting risk warning removed in March 2017 - The company received an "Investigation Notice" from the China Securities Regulatory Commission on October 14, 2016, for alleged violations, with the investigation ongoing as of the report date[142] - The company's stock trading had its delisting risk warning removed effective March 30, 2017, with the stock abbreviation changing from '*ST Yingfang' to 'Yingfang Micro'[143] - The 106,259,600 shares of the company held by controlling shareholder InfoTM Microelectronics were unsold in a judicial auction in March 2018, with a second auction planned, which may lead to a change in the company's actual control[144] Significant Matters of the Company's Subsidiaries The company's controlled subsidiary, YuXin Technology, jointly invested with partners to establish Yiyu (Shanghai) Aerospace Technology Co., Ltd., with YuXin Technology contributing intangible assets for a 20% stake, aiming to promote the commercial development of Beidou technology application solutions - In February 2017, YuXin Technology, in partnership with Hongfocha (Shanghai) Cultural Development Co., Ltd. and Shanghai Xileshi Equity Investment Fund Management Co., Ltd., jointly invested CNY 100 million to establish Yiyu (Shanghai) Aerospace Technology Co., Ltd.[145] - YuXin Technology contributed its developed intangible asset, the "Beidou Application Platform based on Beidou Positioning" software, valued at CNY 20 million, for a 20% equity stake[145] - This cooperation is expected to leverage YuXin Technology's technical and brand advantages, monetize intangible assets, and accelerate the commercial development of Beidou technology application solutions[145] Share Changes and Shareholder Information Share Changes During the reporting period, the company's total share capital and equity structure remained unchanged, with the number of restricted and unrestricted shares remaining constant Share Capital Changes | Item | Quantity Before Change (shares) | Proportion Before Change (%) | Increase/Decrease in This Change (+, -) | Quantity After Change (shares) | Proportion After Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | I. Restricted Shares | 216,460,074 | 26.51% | 0 | 216,460,074 | 26.51% | | II. Unrestricted Shares | 600,167,286 | 73.49% | 0 | 600,167,286 | 73.49% | | III. Total Shares | 816,627,360 | 100.00% | 0 | 816,627,360 | 100.00% | - The company's total share capital and equity structure remained unchanged during the reporting period[148] Securities Issuance and Listing Status During the reporting period, the company had no securities issuance, its total share capital and shareholder structure remained unchanged, and there were no existing internal employee shares - The company had no securities issuance (excluding preferred shares) during the reporting period[149] - The company's total share capital, shareholder structure, assets, and liabilities remained unchanged during the reporting period[149] - The company has no existing internal employee shares[149] Shareholder and Actual Controller Information As of the end of the reporting period, the company had 106,733 common shareholders. Controlling shareholder Shanghai InfoTM Microelectronics Technology Co., Ltd. held 25.92% of shares, all of which were pledged and frozen. The actual controller, Mr. Chen Zhicheng, also had his shares pledged and frozen. Neither the controlling shareholder nor the actual controller changed, and they continue to fulfill share reduction restriction commitments - As of the end of the reporting period, the total number of common shareholders was 106,733[150] Shareholding of Shareholders Holding 5% or More or Top 10 Shareholders | Shareholder Name | Shareholder Nature | Shareholding Ratio (%) | Number of Shares Held at Period-End (shares) | Number of Restricted Shares Held (shares) | Number of Unrestricted Shares Held (shares) | Pledge or Freeze Status | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Shanghai InfoTM Microelectronics Technology Co., Ltd. | Domestic Non-State-Owned Legal Person | 25.92% | 211,692,576 | 211,692,576 | 0 | Pledged 211,442,176 shares, Frozen 211,692,576 shares | | Shanghai ShunYuan Enterprise Investment Development Co., Ltd. | Domestic Non-State-Owned Legal Person | 4.99% | 40,777,984 | 3,115,248 | 37,662,736 | None | | Chongqing Guotou Wealth Investment Management Co., Ltd. - Liying No. 1 Private Equity Fund | Other | 4.93% | 40,261,901 | 0 | 40,261,901 | None | | Chen Zhicheng | Domestic Natural Person | 0.27% | 2,203,000 | 1,652,250 | 550,750 | Pledged 671,261 shares, Frozen 2,203,000 shares | - The company's controlling shareholder is Shanghai InfoTM Microelectronics Technology Co., Ltd., and the actual controller is Chen Zhicheng[153][154] - Neither the controlling shareholder nor the actual controller reduced their holdings in the company and continue to fulfill their share reduction commitments[155] Preferred Shares Information Preferred Shares Information The company had no preferred shares during the reporting period - The company had no preferred shares during the reporting period[159] Directors, Supervisors, Senior Management, and Employees Changes in Shareholdings of Directors, Supervisors, and Senior Management During the reporting period, the shareholdings of the company's current directors, supervisors, and senior management remained unchanged. Former Chairman Chen Zhicheng held 2,203,000 shares at period-end - The shareholdings of the company's current directors, supervisors, and senior management remained unchanged at 0 shares at both the beginning and end of the reporting period[162] - Former Chairman Chen Zhicheng held 2,203,000 shares at both the beginning and end of the period[162] Changes in Company's Directors, Supervisors, and Senior Management During the reporting period, several directors and senior management resigned due to personal reasons or inability to perform duties, while new directors and senior management were elected by the general meeting of shareholders and appointed by the board of directors - Former Chairman Chen Zhicheng resigned on February 24, 2018, due to inability to perform duties[163] - Several directors (Li Yuan, Zhao Haifeng, Wang Fang, Pan Xiaoyan, Wang Yue, Qian Kai) and senior management (Zhao Haifeng, Wang Fang) resigned due to personal reasons or inability to perform duties[163][164] - The company appointed new directors (Zhu Peng, Fang Xusheng, Pan Xiaoyan, Yang Licheng, Lin Zhuobin, Lian Songyu) and senior management (Jiang Yudong as Deputy General Manager, Zhang Xuefang as CFO) through shareholder meetings and board resolutions[164] Employment Status This section details the professional backgrounds, main work experiences, and primary responsibilities of the company's current directors, supervisors, and senior management, also disclosing their positions in other entities. Some former senior executives received public reprimands from securities regulatory agencies - The company's current board members include Fang Xusheng (Acting Chairman), Shi Haoliang, Chen Yanbiao, Lian Songyu, Zhu Peng, and independent directors Lin Zhuobin, Zong Shicai, and Yang Licheng[165][166][167] - The supervisory board members include Zhou Zuoyi (Chairman), Wang Tao, and Zhang Yi (Employee Representative Supervisor)[168] - Senior management includes Li Yuan (General Manager), Fang Xusheng (Acting Board Secretary), and Zhang Xuefang (CFO)[169] - Mr. Chen Zhicheng, then Chairman and General Manager, and Mr. Zhao Haifeng, then Director and CFO, received a public reprimand from the Shenzhen Stock Exchange on November 3, 2016[170] Remuneration of Directors, Supervisors, and Senior Management The remuneration for the company's directors, supervisors, and senior management is determined according to the decision-making procedures of the Remuneration and Appraisal Committee, with a total pre-tax remuneration of CNY 6.60 million paid to them in 2017 - The company's Remuneration and Appraisal Committee determines compensation based on industry benchmarks, company performance, and executive achievements[171] - The total pre-tax remuneration paid to directors, supervisors, and senior management in the reporting period was CNY 6.60 million[171] Remuneration of Directors, Supervisors, and Senior Management | Name | Position | Employment Status | Total Pre-Tax Remuneration from Company (CNY 10,000) | Receives Remuneration from Company's Related Parties | | :--- | :--- | :--- | :--- | :--- | | Fang Xusheng | Director, Acting Chairman, Acting Board Secretary | Current | 65 | No | | Shi Haoliang | Director | Current | 95.06 | No | | Chen Yanbiao | Director | Current | 0 | Yes | | Li Yuan | General Manager, Former Director | Current | 64.99 | No | | Jiang Yudong | Deputy General Manager | Current | 67.69 | No | | Zhang Xuefang | CFO | Current | 45.51 | No | | Zhao Haifeng | Former Director, Former Executive Deputy General Manager, Former CFO | Resigned | 86.97 | No | | Chen Zhicheng | Former Chairman | Resigned | 96.56 | No | | Total | -- | -- | 660.13 | -- | Company Employee Information As of the end of the reporting period, the company had a total of 138 employees, with technical personnel accounting for the highest proportion. The company has established a market-competitive compensation system and a comprehensive training system, and did not engage in labor outsourcing Employee Numbers and Professional Composition | Indicator | Quantity (persons) | | :--- | :--- | | Total Number of Employees | 138 | | Technical Personnel | 65 | | Sales Personnel | 8 | | Financial Personnel | 14 | | Administrative Personnel | 51 | | Bachelor's Degree or Above | 107 | | College Degree | 19 | | Below College Degree | 12 | - The company has established a market-competitive compensation system and continuously optimizes its remuneration and appraisal system based on operating conditions[176] - The company has established a comprehensive training system, including new employee onboarding, technical R&D training, management training, and training for directors, supervisors, and senior management[177] - The company did not engage in labor outsourcing during the reporting period[178] Corporate Governance Basic Status of Corporate Governance The company strictly complies with relevant laws and regulations, continuously improves its corporate governance structure, ensures the independent operation of its general meeting of shareholders, board of directors, supervisory board, and internal organizations, and emphasizes information disclosure and investor relations management, with no significant differences from the governance norms issued by the China Securities Regulatory Commission - The company strictly adheres to the 'Company Law' and 'Securities Law' in convening shareholder meetings, utilizing online voting to protect the rights of small and medium shareholders[180] - The company maintains independence from its controlling shareholder in personnel, assets, finance, organization, and business, ensuring no abuse of power to harm company interests[180] - The Board of Directors has established Strategy, Nomination, Remuneration & Appraisal, and Audit Committees to provide professional advice for board decisions[180] - The company strictly fulfills its information disclosure obligations, ensuring information is true, accurate, complete, timely, and fair, with no significant premature information leakage[181] - The company's actual corporate governance status does not significantly differ from the normative documents on listed company governance issued by the China Securities Regulatory Commission[182] Company's Independence from Controlling Shareholders in Business, Personnel, Assets, Organization, and Finance The company is independent of its controlling shareholder, actual controller, and other enterprises controlled by them in terms of business, personnel, assets, organization, and finance, possessing autonomous operating capabilities - The company's main business is independent of its controlling shareholder, with no horizontal competition or obviously unfair related-party transactions[183] - The company's employees are independent of the controlling shareholder in labor, personnel, and salary management, and the appointment of directors, supervisors, and senior management complies with regulations[183] - The company's assets are independent, complete, and clearly owned, possessing independent production systems, supporting facilities, trademarks, and patents[183] - The company and its controlled subsidiaries' production, operation, and office facilities are completely separate from the controlling shareholder and its related enterprises, with no mixed operations[184] - The company and its controlled subsidiaries have independent financial departments, established independent accounting systems, independent bank accounts, and their use of funds is not interfered with by the controlling shareholder[184] Horizontal Competition Status The company has no horizontal competition - The company has no horizontal competition[185] Information on Annual and Extraordinary General Meetings Held During the Reporting Period During the reporting period, the company held one annual general meeting and two extraordinary general meetings, with all meetings convened and conducted in compliance with relevant regulations Shareholder Meetings During the Reporting Period | Session | Meeting Type | Investor Participation Rate (%) | Date of Meeting | Disclosure Date | | :--- | :--- | :--- | :--- | :--- | | 2016 Annual General Meeting | Annual General Meeting | 31.70% | 2017-04-06 | 2017-04-07 | | 2017 First Extraordinary General Meeting | Extraordinary General Meeting | 31.43% | 2017-09-28 | 2017-09-29 | | 2017 Second Extraordinary General Meeting | Extraordinary General Meeting | 31.42% | 2017-12-20 | 2017-12-21 | - There were no requests from preferred shareholders with restored voting rights to convene extraordinary general meetings during the reporting period[186] Performance of Duties by Independent Directors During the Reporting Period Independent directors diligently performed their duties during the reporting period, actively attending board and shareholder meetings, and offering professional advice on improving company systems and operational decisions. Some independent directors raised objections or abstained from voting on the CFO appointment proposal, but their suggestions were adopted by the company - Independent director Zong Shicai was unable to attend two consecutive board meetings in person due to other work commitments and entrusted other independent directors to attend on his behalf[186] - Independent directors Qian Kai, Zong Shicai, and Wang Yue raised objections or abstained from voting on the proposal to appoint the company's CFO, citing insufficient understanding of the candidate or belief in more suitable alternatives[187][188] - Independent directors' suggestions were adopted by the company, playing a crucial role in improving the company's oversight mechanisms and safeguarding the legitimate rights and interests of the company and all shareholders[189] Performance of Duties by Specialized Committees Under the Board of Directors During the Reporting Period The company's Board of Directors' specialized committees, including the Strategy Committee, Nomination Committee, Audit Committee, and Remuneration and Appraisal Committee, diligently and effectively performed their duties during the reporting period, ensuring efficient board operations and scientific decision-making - The Strategy Committee reviewed the company's operating performance and future development strategy[190] - The Nomination Committee deliberated on matters such as the election of independent directors and the appointment of the CFO[190] - The Audit Committee held 6 meetings, reviewing periodic reports, re-appointment of auditors, asset impairment provisions, and accounting policy changes, while overseeing audit work progress[190] - The Remuneration and Appraisal Committee assessed the performance of directors and senior management and confirmed their compensation payments[191] Work of the Supervisory Board The supervisory board found no risks in the company during its oversight activities in the reporting period and had no objections to the supervised matters - The supervisory board found no risks in the company during its oversight activities in the reporting period[192] - The supervisory board had no objections to the supervised matters during the reporting period[192] Evaluation and Incentive for Senior Management The company's evaluation and incentive for senior management are implemented according to established policies - The company's evaluation and incentive for senior management are implemented according to the 'Work Rules for the Board's Remuneration and Appraisal Committee' and the 'Remuneration System for Directors and Senior Management'[193] Internal Control Status No significant internal control deficiencies