CS&S(SH:600536)2019-03-28 16:00Financial Performance - The company's operating revenue for 2018 was CNY 4,613,161,359.60, a decrease of 6.67% compared to CNY 4,942,995,517.06 in 2017[18]. - The net profit attributable to shareholders of the listed company was CNY 110,809,179.59, an increase of 47.95% from CNY 74,898,371.62 in the previous year[18]. - The net profit attributable to shareholders after deducting non-recurring gains and losses was CNY 43,998,271.18, a decrease of 4.87% compared to CNY 46,248,428.38 in 2017[18]. - The net cash flow from operating activities was CNY 132,149,878.79, an increase of 113.35% from CNY 61,939,613.74 in 2017[18]. - The total assets at the end of 2018 were CNY 5,690,422,088.29, an increase of 7.95% from CNY 5,271,271,196.23 at the end of 2017[18]. - The net assets attributable to shareholders of the listed company were CNY 2,196,168,331.49, an increase of 4.24% from CNY 2,106,814,169.03 in 2017[18]. - Basic earnings per share increased by 47.95% to CNY 0.22 in 2018 from CNY 0.15 in 2017[19]. - The weighted average return on equity rose by 1.56 percentage points to 5.16% in 2018 compared to 3.60% in 2017[19]. - The total profit reached 122 million RMB, an increase of 71.02% year-on-year[32]. - The company reported a significant change in profit due to the subsidiary Anren Co., which is no longer consolidated and is now accounted for using the equity method, resulting in substantial investment income[46]. Revenue Breakdown - Revenue from proprietary software products was 572 million RMB, down 39.52% year-on-year, primarily due to the exclusion of a subsidiary from consolidation[32]. - Industry solutions generated revenue of 2.584 billion RMB, a slight decline of 1.08% year-on-year[32]. - Service-oriented business revenue increased by 4.99% year-on-year, totaling 1.421 billion RMB[32]. - The company's revenue from software services was approximately CNY 4.58 billion, with a gross margin of 38.76%, reflecting a year-over-year decrease of 6.81% in revenue and 8.05% in cost[37]. Research and Development - Total R&D expenditure amounted to CNY 1.01 billion, representing 21.83% of total revenue, with 50.08% of the company's workforce engaged in R&D activities[42]. - The average gross margin for proprietary software products was 68.09%, up 0.22 percentage points year-on-year[32]. - The company is focusing on enhancing core competitiveness through technological innovation and collaboration[26]. - The company is committed to optimizing its business structure and enhancing operational quality and efficiency through various innovative strategies[60]. Market Position and Strategy - The company operates in a software and information technology services industry projected to grow at an average annual rate of over 13% during the 13th Five-Year Plan period[23]. - The company has established a comprehensive software industry chain, including operating systems, middleware, and security products, serving key sectors such as finance and energy[23]. - The company is expanding its market presence in key sectors such as electronic government and modern digital cities[28]. - The company anticipates a high growth rate in the industry for 2019, driven by national strategies in big data and artificial intelligence[58]. Financial Management and Governance - The company has improved its corporate governance by revising its articles of association and establishing a risk management committee, enhancing risk management capabilities[122]. - The company has disclosed its internal control self-assessment report, which was evaluated according to the Basic Norms for Internal Control[127]. - The company has undergone an internal control audit by Zhongtianyun Accounting Firm, which issued an audit report confirming the effectiveness of internal controls[128]. - The company has maintained a clear separation of powers among its governance structures, ensuring effective decision-making and operational coordination[122]. Shareholder Information - The proposed cash dividend is CNY 0.70 per 10 shares, totaling CNY 34,619,394.74, which accounts for 31.24% of the net profit attributable to shareholders[5]. - The total number of ordinary shareholders increased from 62,207 to 85,061 during the reporting period[94]. - The largest shareholder, China Electronics Corporation, holds 223,190,246 shares, accounting for 45.13% of the total shares[95]. - The company has no controlling shareholder or actual controller situation[101]. Legal and Compliance Issues - The company is involved in a significant lawsuit regarding a contract dispute with a subsidiary, with the amount in question totaling approximately 7.63 million RMB[76]. - The company has received a court execution notice demanding payment of 7,625,727 RMB, which includes project payments and legal fees[77]. - The company has submitted an application to suspend the execution of the payment as it disputes the existence of a contractual relationship with the claimant[77]. Employee and Management Information - The total number of employees in the parent company is 2,742, while the total number of employees in major subsidiaries is 3,927, resulting in a combined total of 6,669 employees[118]. - The number of R&D personnel is 3,340, accounting for a significant portion of the workforce[118]. - The total remuneration for all directors, supervisors, and senior management personnel is 9.1704 million yuan[116]. - The company has implemented a basic salary plus performance bonus system for senior management, which is evaluated based on company performance[116]. Accounting Policies and Financial Reporting - The financial statements comply with the requirements of the Accounting Standards for Business Enterprises, reflecting the company's financial position as of December 31, 2018[169]. - The company includes all subsidiaries in its consolidated financial statements, ensuring uniform accounting policies across entities[172]. - The company recognizes financial instruments as either financial assets or financial liabilities upon entering into a contract[178]. - The company confirms its financial statements are prepared based on actual transactions and events, ensuring accuracy and completeness[169].