Financial Performance - In 2021, the company achieved operating revenue of RMB 114.52 billion, a year-on-year increase of 12.9%, with domestic revenue of RMB 78.07 billion and international revenue of RMB 36.45 billion[19]. - The net profit attributable to shareholders of the listed company was RMB 6.81 billion, representing a year-on-year growth of 59.9%, with basic earnings per share of RMB 1.47[19]. - Total assets at the end of 2021 were RMB 168.76 billion, an increase of 12.03% compared to the end of 2020[23]. - Total liabilities at the end of 2021 were RMB 115.48 billion, up 10.49% from the end of 2020[23]. - The equity attributable to shareholders of the listed company increased by 18.91% to RMB 51.48 billion at the end of 2021[23]. - Operating revenue for 2021 reached RMB 114,521.6 million, an increase of 12.88% compared to 2020[24]. - Net profit attributable to shareholders was RMB 6,812.9 million, reflecting a growth of 59.93% year-over-year[24]. - The basic earnings per share (EPS) rose to RMB 1.47, a 59.78% increase from the previous year[24]. - The net cash flow from operating activities amounted to RMB 15,723.5 million, up 53.66% from 2020[24]. - The weighted average return on equity increased to 14.49%, up 4.56 percentage points from 2020[24]. Dividend Distribution - The company plans to distribute a cash dividend of 3 RMB per 10 shares to all shareholders, based on the total share capital as of the dividend record date[2]. - The proposed dividend distribution for 2021 is RMB 3 per 10 shares, amounting to a total cash dividend of no more than RMB 1.44 billion, subject to shareholder approval[140]. - The company distributed a total cash dividend of RMB 928 million for the 2020 fiscal year, with a total share capital of 4,637,709,675 shares at the time of distribution[144]. - Cumulative cash distributions from 2019 to 2021 accounted for 62.6% of the average distributable profit over the last three years, exceeding the 30% requirement set in the company's articles of association[144]. - The company will complete the dividend distribution for the 2021 fiscal year by August 31, 2022, at the latest[141]. Corporate Governance - The company emphasizes the importance of reading the risk factors outlined in the business outlook for 2022[2]. - The report highlights the company's governance and corporate responsibility practices[4]. - The company has established a compensation arrangement for its directors and senior management to cover potential economic losses incurred while performing their duties[21]. - The company respects the rights of stakeholders, including banks, employees, consumers, suppliers, and the community, and actively collaborates with them for sustainable development[23]. - The company adheres to governance regulations and has established a governance structure that ensures equal rights for all shareholders, particularly minority shareholders[130]. - The board of directors is responsible for the company's operational plans and investment strategies, with various committees established to enhance governance[132]. - The company has implemented a long-term incentive mechanism linked to performance, ensuring that senior management's compensation aligns with the company's strategic goals[132]. - The company has established independent financial management systems and operates separate bank accounts to maintain financial independence[135]. - The company actively reviews and updates its governance practices to align with best practices and regulatory standards[156]. Risk Management - The company has established a risk control system for derivative investments, addressing market, liquidity, credit, operational, and legal risks[94]. - The company utilized financial products for hedging derivative investments to enhance financial stability against exchange rate fluctuations[95]. - The company’s derivative investments are primarily based on foreign exchange income and expenditure budgets, ensuring sufficient funds for settlement[94]. - The company’s derivative investment transactions are conducted with reputable banks, minimizing counterparty credit risk[94]. - The group manages interest rate risk primarily from interest-bearing liabilities, utilizing total debt control and structured management to mitigate risks[128]. - The group employs internal credit management measures, including customer credit investigations and credit insurance, to manage customer credit risk effectively[129]. Research and Development - The company has over 26 years of R&D experience in the chip field, establishing industry-leading full-process design capabilities[37]. - The total R&D investment amounted to RMB 18,804 million, representing a 27.08% increase compared to RMB 14,797 million in 2020[72]. - The proportion of R&D investment to operating revenue rose to 16.42% in 2021, up by 1.83 percentage points from 14.59% in 2020[72]. - The number of R&D personnel increased to 33,422 in 2021, a growth of 5.28% from 31,747 in 2020, accounting for 46.0% of the total workforce[71]. Market Expansion and Product Development - The company plans to expand its market presence by investing in new infrastructure projects, including the establishment of data centers in western regions to balance digital resource distribution[8]. - A new product, PowerPilot, aimed at improving energy efficiency in 5G networks, is set to launch in Q2 2024, with anticipated cost savings of 20% for clients[9]. - The company is exploring strategic acquisitions to enhance its capabilities in mobile edge computing, with a budget allocation of $500 million for potential targets[9]. - The company aims to achieve carbon neutrality by 2030, aligning with global sustainability goals and enhancing its market competitiveness[8]. - The company is focusing on the development of 5G cloud-based PLC solutions to enhance computing power and scalability, addressing traditional PLC limitations[11]. Compliance and Legal Matters - The company is committed to compliance with relevant laws and regulations affecting its business operations, including those related to product safety and data protection[25]. - The compliance management committee oversees compliance matters, including export control and anti-bribery regulations[120]. - The company has implemented a comprehensive compliance management system to mitigate country-specific risks and ensure adherence to trade and tax regulations[125]. Investor Relations - The company held multiple investor meetings throughout 2021, including a conference call in May with 100 investors[44]. - The company plans to enhance communication with investors in the upcoming year to increase understanding and support from investors[139]. - The company maintains multiple formal communication channels with shareholders, including annual and quarterly reports, to ensure transparency[137]. Technology and Innovation - The company reported a significant increase in data throughput capabilities with 5G technology, achieving up to 1,000 times higher data rates compared to current standards[8]. - The integration of AI solutions is expected to enhance operational efficiency and customer engagement, contributing to a projected revenue growth of 15% in the next fiscal year[9]. - The introduction of the FlexE technology is projected to improve bandwidth efficiency by 40%, supporting the growing demands of 5G applications[9]. - The company is expanding its XR (Extended Reality) offerings, integrating AR, VR, and MR technologies to create immersive environments for users[11]. - The company’s AI-driven network energy-saving solution PowerPilot has been commercially deployed in over 900,000 sites globally, achieving double the energy-saving effect compared to traditional solutions[39].
中兴通讯(00763) - 2021 - 年度财报