惠伦晶体(300460) - 2022 Q4 - 年度财报(更正)

Important Notes, Table of Contents, and Definitions Important Notes The company attributes its significant 2022 performance decline to market downturns and underutilized new production capacity - The significant performance decline and losses are mainly attributed to two factors: - Market Impact: A downturn in the consumer electronics and communications markets led to a drop in both volume and price for the company's main products, with shipments of piezoelectric quartz crystal components decreasing by 25.66% YoY[3] - Internal Impact: Despite ongoing capacity expansion, the average capacity utilization of new production lines (e.g., the Chongqing project) was only 47% in 2022[3] - The company plans no cash dividend, bonus shares, or capitalization of public reserves[6] Table of Contents The report follows a standard structure, covering corporate information, financial analysis, governance, and other key disclosures Definitions This section defines key terms used in the report, including company names, reporting period, and core technical products Company Profile and Key Financial Indicators Company Information and Contact Details This section provides the company's basic corporate and contact information, including its stock code and key personnel Key Accounting Data and Financial Indicators The company's 2022 financial performance deteriorated sharply, with revenue declining and net profit turning to a significant loss | Indicator | 2022 | 2021 | YoY Change | | :--- | :--- | :--- | :--- | | Operating Revenue (CNY) | 333,283,222.78 | 629,860,484.03 | -47.09% | | Net Profit Attributable to Shareholders (CNY) | -172,669,062.11 | 104,074,374.85 | -265.91% | | Net Profit Attributable to Shareholders (Non-recurring Items Excluded) (CNY) | -183,157,836.31 | 100,212,658.85 | -282.77% | | Net Cash Flow from Operating Activities (CNY) | 19,910,653.03 | 132,474,977.07 | -84.97% | | Basic Earnings Per Share (CNY/Share) | -0.6153 | 0.3961 | -255.34% | | Weighted Average Return on Equity | -15.67% | 10.88% | -26.55% | | Total Assets (CNY) | 1,872,131,181.35 | 1,981,073,033.64 | -5.50% | | Net Assets Attributable to Shareholders (CNY) | 991,497,786.38 | 1,188,196,248.34 | -16.55% | | Quarter | Q1 | Q2 | Q3 | Q4 | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue (CNY) | 113,296,733.78 | 117,768,579.73 | 91,042,310.62 | 11,175,598.65 | | Net Profit Attributable to Shareholders (CNY) | -1,020,181.71 | 3,167,465.20 | -1,164,472.34 | -173,651,873.26 | - Non-recurring gains and losses in 2022 totaled CNY 10.49 million, primarily from government subsidies (CNY 9.29 million) and other non-operating income/expenses (CNY 4.15 million)[24][25] Management Discussion and Analysis Industry Situation and Company Position The quartz crystal component industry benefits from national policies, with the company holding a leading domestic position - The industry benefits from national strategic plans, such as the "14th Five-Year Plan," which accelerates the deployment of 5G, IoT, Industrial Internet, and IoV, promoting the core electronic components industry[28][29][30] - The global quartz crystal component market is projected to grow from $4.34 billion in 2021 to $5.68 billion by 2028, at a CAGR of approximately 4.14%, with automotive electronics, wearables, and IoT as the fastest-growing segments[34][35] - The company is a national "Little Giant" enterprise, leading domestically in the mass production of small-sized MHz products and high-value-added TSX and TCXO products, with combined shipments reaching 167 million units in 2022, up 0.68% YoY[37][38] - The company has mastered photolithography processes based on semiconductor technology, making it one of the few global manufacturers capable of mass-producing high-frequency 76.8MHz 1612-size thermal crystals certified by Qualcomm[39] Principal Business and Operating Model The company develops and sells quartz crystal components, with 2022 performance impacted by market downturns and low capacity utilization - The company's main products are SMD resonators, TCXO oscillators, and TSX thermal crystals, widely used in communications, automotive electronics, and consumer electronics[41][42][43] - The operating model involves centralized procurement, production-to-order manufacturing, and a sales model combining distribution and direct sales[44][45][46] - The 2022 performance decline was mainly due to: - Weak market demand leading to lower product prices and volumes, with total shipments of approximately 699 million units, a 25.66% YoY decrease[47] - The average capacity utilization of the Chongqing subsidiary's investment project was only about 47%[47] Core Competitiveness Analysis The company's core strengths lie in its advanced technology, product development, mass production capabilities, and first-mover market advantage - Technology and Process Advantage: Mastery of photolithography for MHz applications enables both miniaturization and high base frequency, overcoming the limitations of traditional mechanical grinding[49] - Product Development Advantage: Early domestic mass producer of miniaturized products like SMD2520, SMD2016, and SMD1612, with SMD1210 now available, alongside high-value products like TSX thermal crystals and TCXO oscillators[50] - Mass Production and Supply Chain Advantage: Mass production capability for mid-to-high-end products positions the company favorably for domestic substitution, driving local collaboration and breakthroughs in upstream materials like ultra-small bases and temperature-compensated ICs[51] - First-Mover Market Advantage: Strong partnerships with leading customers across various sectors enable timely and precise responses to product iteration demands, securing market opportunities[52] Analysis of Main Business Operations In 2022, revenue and net profit declined significantly, though the company advanced in smart manufacturing and R&D investment Overview Despite poor 2022 results, the company advanced in smart manufacturing, increased R&D spending, and expanded into new markets - In 2022, the company was recognized as a "Dongguan Smart Manufacturing Demonstration Project," and its Chongqing subsidiary was named a "Chongqing Smart Factory"[55] - Despite the performance decline, R&D expenses increased by 7.69% YoY to CNY 31.32 million, raising the R&D-to-revenue ratio to 9.40%[56] - The company is expanding into emerging industries, having introduced products to automakers like BYD and GAC Motor, with mass shipments to BYD already underway[57][58] Revenue and Costs Revenue fell 47.09% to CNY 333 million, with the core electronic components business seeing its gross margin turn negative | Category | 2022 Revenue (CNY) | % of Total Revenue | YoY Change | | :--- | :--- | :--- | :--- | | By Industry | | | | | Electronic Components | 298,298,435.46 | 89.50% | -50.50% | | Software and IT Services | 34,984,787.32 | 10.50% | 28.28% | | By Product | | | | | SMD | 294,087,690.26 | 88.24% | -50.60% | | By Region | | | | | Mainland China | 232,599,780.51 | 69.79% | -19.37% | | Hong Kong, China | 33,404,729.93 | 10.02% | -66.69% | | By Industry | Operating Revenue (CNY) | Operating Cost (CNY) | Gross Margin | Gross Margin YoY Change | | :--- | :--- | :--- | :--- | :--- | | Electronic Components | 298,298,435.46 | 332,916,337.47 | -11.61% | -58.83% | - Due to the industry cycle and weak consumer electronics demand, the production-to-sales ratio declined in 2022, leading to a 67.41% YoY increase in year-end inventory[63] Expenses Management expenses decreased due to the reversal of share-based payment fees, while financial expenses fell on higher exchange gains | Expense Item | 2022 (CNY) | 2021 (CNY) | YoY Change | Reason for Significant Change | | :--- | :--- | :--- | :--- | :--- | | Selling Expenses | 20,026,523.74 | 18,658,142.85 | 7.33% | Increased marketing and promotion fees | | Administrative Expenses | 49,603,927.53 | 69,898,722.23 | -29.03% | Reversal of share-based payment fees as performance targets were not met | | Financial Expenses | 16,592,175.43 | 18,899,390.15 | -12.21% | Increased foreign exchange gains | | R&D Expenses | 31,317,615.65 | 29,080,447.00 | 7.69% | Increased R&D projects and investment | R&D Investment R&D investment increased to 12.13% of revenue, focusing on high-frequency, miniaturized products for emerging markets | Indicator | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | | R&D Investment (CNY) | 40,413,205.17 | 35,465,110.10 | 30,415,775.66 | | R&D Investment as % of Revenue | 12.13% | 5.63% | 7.84% | | Number of R&D Personnel | 162 | 165 | - | | R&D Personnel as % of Total | 18.31% | 16.02% | - | - Key R&D projects include SMD1612 76.8MHz thermal crystals for Qualcomm platform phones, TCXOs for GPS modules, SMD1210 76.8MHz crystals for 5G, and high-spec SMD3225 crystals for automotive use, aiming to fill domestic gaps and enter high-end markets[70] Cash Flow Operating cash flow plummeted due to lower sales collections, while investment and financing cash flows also saw significant changes | Item | 2022 (CNY) | 2021 (CNY) | YoY Change | | :--- | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 19,910,653.03 | 132,474,977.07 | -84.97% | | Net Cash Flow from Investing Activities | -83,522,413.45 | -770,578,806.82 | 89.16% | | Net Cash Flow from Financing Activities | -1,004,558.85 | 708,536,851.96 | -100.14% | | Net Increase in Cash and Cash Equivalents | -62,933,012.56 | 69,696,520.43 | -190.30% | - The significant discrepancy between net operating cash flow (CNY 19.91 million) and net profit (-CNY 173 million) is mainly due to large non-cash expenses, including depreciation and amortization (CNY 111 million) and impairment provisions (CNY 58.61 million)[74] Non-Main Business Operations Non-main business activities significantly impacted profits, driven by asset impairment losses of CNY 58.61 million | Item | Amount (CNY) | % of Total Profit | Explanation | | :--- | :--- | :--- | :--- | | Investment Income | -1,061,508.61 | 0.55% | Operating losses of joint ventures | | Asset Impairment | -58,613,523.22 | 30.34% | Impairment of goodwill, equipment, inventory, and accounts receivable | | Non-operating Income | 4,393,703.54 | -2.27% | Compensation income, etc | Analysis of Assets and Liabilities Total assets decreased by 5.50%, with a significant shift from construction in progress to fixed assets after project completion - The asset structure changed significantly, with a large decrease in construction in progress and a large increase in fixed assets, mainly due to the capitalization of installed and adjusted machinery and equipment[78] | Item | Year-end 2022 Amount (CNY) | % of Total Assets | Year-start 2022 Amount (CNY) | % of Total Assets | Change in Proportion | | :--- | :--- | :--- | :--- | :--- | :--- | | Fixed Assets | 994,444,606.48 | 53.12% | 844,304,214.65 | 42.62% | 10.50% | | Construction in Progress | 39,642,859.06 | 2.12% | 243,395,390.41 | 12.29% | -10.17% | | Short-term Borrowings | 365,876,110.90 | 19.54% | 232,087,510.23 | 11.72% | 7.82% | - As of the reporting period end, CNY 553 million of the company's assets were restricted, primarily fixed assets (CNY 457 million) and intangible assets (CNY 22 million) used as collateral for financing leases and loans[81] Analysis of Investment Total investment for the period was CNY 216 million, a sharp 72.64% decrease, with no major equity investments made - The investment amount for the reporting period was CNY 216 million, a significant decrease of 72.64% from CNY 790 million in the previous year[82] - The company engaged in forward foreign exchange purchase transactions for hedging purposes to lock in the cost of raw materials settled in JPY, resulting in an actual loss of CNY 227,200 during the period[85] Analysis of Major Subsidiaries and Affiliates The Chongqing production subsidiary reported a net loss of CNY 45.79 million, while the Hong Kong sales subsidiary was profitable | Company Name | Main Business | Total Assets (CNY) | Net Assets (CNY) | Operating Revenue (CNY) | Net Profit (CNY) | | :--- | :--- | :--- | :--- | :--- | :--- | | H.K. TFC INDUSTRIAL CO., LIMITED | Sales | 42,306,248.78 | 26,411,557.70 | 36,740,259.67 | 15,075,689.71 | | Guangzhou Chuangxiangyun Technology Co., Ltd. | Production, Sales, Service | 82,925,251.33 | 67,719,947.73 | 34,984,787.32 | 1,761,730.65 | | TFC Communication (Chongqing) Co., Ltd. | Production, Sales | 1,047,478,828.93 | 361,875,691.22 | 106,199,085.60 | -45,789,090.51 | Future Outlook The company plans to deepen management reform and business innovation in 2023 while acknowledging several key operational risks - 2023 Business Plan: - Management Reform: Optimize organizational structure and adopt scientific assessment systems like KPI and OKR[94][96] - Business Innovation: Spin off business units for independent accounting to foster multi-product line development[94][96] - Internal Optimization: Launch a "decluttering" initiative to streamline internal systems and products[94][96] - Platform Building: Develop a Shenzhen sales platform to leverage product platform effects[94][96] - Employee Incentives: Introduce employee stock ownership platforms in select wholly-owned subsidiaries[94][96] - Key Risk Disclosures: - Macroeconomic Risk: A global economic downturn could impact consumer electronics and other industries, affecting the company's performance[97][99][100][101][102] - Price Fluctuation Risk: Increased market competition could lead to further product price declines, impacting gross margins[97][99][100][101][102] - Market Competition Risk: Lagging behind market demand in technological R&D could put the company at a disadvantage[97][99][100][101][102] - Investment Project Risk: New depreciation and amortization could reduce profits, and project benefits may not meet expectations[97][99][100][101][102] - Inventory and Accounts Receivable Risk: Large year-end balances of inventory and accounts receivable pose risks of slow turnover and collection[97][99][100][101][102] Corporate Governance Overview of Corporate Governance The company's governance practices comply with relevant laws and regulations, ensuring operational independence from its controlling shareholder - The company's actual governance practices do not materially differ from the laws, regulations, and normative documents issued by the CSRC and Shenzhen Stock Exchange[106] - The company is independent from its controlling shareholder in terms of business, personnel, assets, organization, and finance, possessing a complete and independent business and operational capability[106][111] Directors, Supervisors, and Senior Management This section details the background, remuneration, and changes of key management personnel during the reporting period - During the reporting period, there were changes in the company's directors, supervisors, and senior management, including the election of Director Deng Youqiang and Supervisor Qin Yuzhen, and the departure of Supervisor Cai Fengqiong and Senior Manager Li Zongjie[117] | Name | Position | Pre-tax Remuneration from the Company (CNY 10,000) | | :--- | :--- | :--- | | Zhao Jiqing | Chairman | 27.35 | | Han Jiling | General Manager | 54.55 | | Jiang Jianwei | Deputy General Manager | 64.72 | | Deng Youqiang | Director, CFO | 25.18 | | Pan Yihua | Director, Board Secretary | 21.97 | | Total | -- | 398.4 | Employee Situation At year-end, the company had 885 employees, with production and technical staff forming the largest professional groups | Professional Composition | Number of People | | :--- | :--- | | Production Personnel | 342 | | Sales Personnel | 49 | | Technical Personnel | 277 | | Finance Personnel | 19 | | Administrative Personnel | 198 | | Total | 885 | Equity Incentive Plan The second vesting period of the 2020 restricted stock plan was executed, while the third was forfeited due to unmet performance targets - In October 2022, the conditions for the second vesting period of the 2020 restricted stock incentive plan were met, allowing 29 eligible participants to vest 2.1 million shares, with 28 individuals ultimately vesting a total of 1.8 million shares[163] - As the company's 2022 performance did not meet the requirements for the third vesting period of the 2020 restricted stock incentive plan, previously accrued share-based payment expenses for this period were reversed[685] Internal Control The company maintained effective internal controls over key operational areas, with no material weaknesses identified in its self-assessment - The company has established internal control systems covering all major operational and management aspects, including management of subsidiaries, investments, related-party transactions, and information disclosure[166][168][170][171][174] - According to the internal control self-assessment report, which covered 100% of assets and revenue in the consolidated statements, no material or significant deficiencies were found in financial or non-financial reporting[188][189] Environmental and Social Responsibility Environmental and Social Responsibility The company complies with environmental regulations, protects stakeholder interests, and actively engages in social welfare and poverty alleviation - The company and its subsidiaries are not classified as major polluting entities and received no environment-related administrative penalties during the reporting period[192] - The company actively fulfills its social responsibilities, including protecting the rights of shareholders, employees, customers, and suppliers, and participating in public relations and social welfare initiatives[193][194] - The company actively participates in poverty alleviation and rural revitalization, donating goods and funds worth over CNY 130,680 to charities and schools in 2022, and employing 226 people from impoverished areas in Yunnan, Guizhou, and Sichuan[195] Significant Matters Significant Related-Party Transactions The company engaged in a CNY 50 million financing lease transaction with a related party, exceeding the approved limit | Related Party | Transaction Type | Transaction Amount (CNY 10,000) | Approved Limit (CNY 10,000) | Exceeded Limit | | :--- | :--- | :--- | :--- | :--- | | Anhui Zhengqi Financial Leasing Co., Ltd. | Financing Lease Service | 5,000 | 10,000 | Yes | Significant Guarantees The company provided guarantees totaling CNY 183 million for its subsidiaries, representing 18.43% of its net assets | Indicator | Amount (CNY 10,000) | | :--- | :--- | | Approved guarantee limit for subsidiaries during the period | 80,000 | | Actual guarantees provided to subsidiaries during the period | 18,275.32 | | Outstanding guarantee balance for subsidiaries at period-end | 18,275.32 | | Ratio of total actual guarantees to company's net assets | 18.43% | Changes in Share Capital and Shareholders Changes in Share Capital Total share capital increased by 1.62 million shares due to the vesting of restricted stocks under the 2020 incentive plan - Due to the listing and circulation of the first batch of vested shares from the second vesting period of the 2020 restricted stock incentive plan, the company's total share capital increased by 1,620,000 shares to 280,624,251 shares[231] Shareholders and Ultimate Controller The ultimate controller is Mr. Zhao Jiqing, and the controlling shareholder has a significant portion of its shares pledged | Shareholder Name | Shareholder Type | Shareholding Ratio | Shares Held at Period-end | Pledged/Frozen Status | | :--- | :--- | :--- | :--- | :--- | | Xinjiang Huilun Equity Investment Partnership (Limited Partnership) | Domestic Non-state-owned Legal Entity | 14.37% | 40,327,380 | Pledged 31,803,200 | | Zhao Jiqing | Domestic Natural Person | 5.35% | 15,000,000 | - | | Anhui Zhidao Investment Co., Ltd. | Domestic Non-state-owned Legal Entity | 4.97% | 13,950,000 | - | - The controlling shareholder, Xinjiang Huilun, and the ultimate controller, Zhao Jiqing, are parties acting in concert[240] Information on Preferred Shares Preferred Shares The company had no preferred shares during the reporting period - The company had no preferred shares during the reporting period[248] Information on Bonds Bonds The company had no bonds outstanding during the reporting period - The company had no bond-related matters during the reporting period[250] Financial Report Audit Report The auditor issued a standard unqualified opinion, highlighting revenue recognition and inventory provision as key audit matters - The audit opinion is a standard unqualified opinion[252] - Key audit matters include: 1. Revenue Recognition: As revenue is a key performance indicator, there is an inherent risk of management manipulating the timing of revenue recognition to meet specific targets[255][256] 2. Adequacy and Completeness of Inventory Write-down Provision: Due to the material amount of inventory, the provision for write-downs involves significant management judgment[259] Financial Statements This section presents the complete financial statements, showing total assets of CNY 1.87 billion and a net loss of CNY 173 million | Key Items from Consolidated Balance Sheet | Dec 31, 2022 (CNY) | | :--- | :--- | | Total Assets | 1,872,131,181.35 | | Total Liabilities | 880,633,394.97 | | Total Equity Attributable to Parent Company | 991,497,786.38 | | Key Items from Consolidated Income Statement | 2022 (CNY) | | :--- | :--- | | Total Operating Revenue | 333,283,222.78 | | Total Operating Costs | 478,540,339.84 | | Total Profit | -193,199,813.93 | | Net Profit | -172,669,062.11 | | Key Items from Consolidated Cash Flow Statement | 2022 (CNY) | | :--- | :--- | | Net Cash Flow from Operating Activities | 19,910,653.03 | | Net Cash Flow from Investing Activities | -83,522,413.45 | | Net Cash Flow from Financing Activities | -1,004,558.85 | Company Basic Information The company is a high-tech enterprise specializing in quartz crystal components, with six wholly-owned subsidiaries - The company's main business is quartz crystal components, with key products including SMD resonators, TSX thermal crystals, and TCXO oscillators[310] - A total of 6 wholly-owned subsidiaries were included in the scope of the consolidated financial statements for the period[312] Significant Accounting Policies and Estimates This section details the accounting policies for key areas like revenue recognition and financial instruments, including recent changes - Revenue Recognition: Revenue is recognized when the customer obtains control of the related goods or services, typically upon customer sign-off for domestic sales and upon completion of customs clearance for overseas sales[466][470] - Financial Instrument Impairment: Impairment of financial assets measured at amortized cost is based on expected credit losses, with a simplified approach for accounts receivable, measuring the loss provision at an amount equal to lifetime expected credit losses[371][372] - R&D Expenditures: Research-phase expenditures are expensed as incurred, while development-phase expenditures are capitalized if specific criteria are met[440][441][442] - Changes in Accounting Policies: The company has amended its accounting policies regarding the "sale of products before fixed assets reach their intended use" and the "judgment of onerous contracts" in accordance with Interpretations No. 15 and No. 16 of the Accounting Standards for Business Enterprises[481] Notes to Consolidated Financial Statement Items Key balance sheet items include significant provisions for bad debt, inventory write-downs, and goodwill impairment | Item | Year-end Gross Book Value (CNY) | Impairment/Write-down Provision (CNY) | Net Book Value (CNY) | | :--- | :--- | :--- | :--- | | Accounts Receivable | 129,334,963.25 | 22,019,512.49 | 107,315,450.76 | | Inventory | 366,356,557.81 | 38,615,828.23 | 327,740,729.58 | | Fixed Assets | 1,797,325,889.31 | 55,298,997.25 | 994,444,606.48 | | Goodwill | 204,093,223.96 | 199,959,254.34 | 4,133,969.62 | - Restricted cash and cash equivalents at year-end amounted to CNY 73.52 million, primarily serving as deposits for letters of credit, cash pools, and forward foreign exchange contracts[489] - The goodwill impairment test indicated that the recoverable amount of the asset group related to Guangzhou Chuangxiangyun Technology Co., Ltd. was lower than its carrying amount, resulting in a goodwill impairment provision of CNY 3.21 million for the period[594][599]