SG(SH:600734)2019-07-02 16:00Financial Performance - In 2018, the company's operating revenue was CNY 6,759,565,820.36, an increase of 4.40% compared to CNY 6,474,445,474.46 in 2017[19] - The net profit attributable to shareholders of the listed company was CNY -267,155,730.38, representing a decrease of 243.09% from CNY 186,708,521.64 in the previous year[19] - The net profit attributable to shareholders after deducting non-recurring gains and losses was CNY -331,011,786.89, a decline of 295.72% compared to CNY 169,124,572.07 in 2017[19] - The net cash flow from operating activities was CNY -246,111,066.37, showing an improvement of 16.13% from CNY -293,443,461.95 in the previous year[19] - The company reported a total distributable profit of CNY -339,913,616.86 for the year, resulting in no profit distribution or capital reserve transfer to share capital[4] - The net assets attributable to shareholders decreased by 9.20% from the end of 2017 to 2,610,191,478.94 RMB[22] - Total assets decreased by 10.80% from the end of 2017 to 7,336,587,239.50 RMB[22] - Basic earnings per share were -0.4285 RMB, a decrease of 242.79% compared to 0.3001 RMB in 2017[22] - The weighted average return on net assets dropped by 16.41 percentage points to -9.7414%[22] - The company recorded a net profit attributable to shareholders of -391,621,871.87 RMB in Q4 2018[23] - The operating revenue for Q4 2018 was 2,738,787,493.74 RMB, showing a significant increase compared to previous quarters[23] Subsidiary Performance - Shenzhen Xingfei, a wholly-owned subsidiary, generated sales revenue of approximately 6.515 billion yuan in 2018, a 4.36% increase from 6.243 billion yuan in the previous year[44] - The net profit for Shenzhen Xingfei was approximately 200.44 million yuan, reflecting a 7.69% increase from 186.13 million yuan year-on-year[44] - The battery power supply business, operated by Ruide Electronics, achieved sales revenue of about 903 million yuan in 2018, a 19.60% increase from 755 million yuan in the previous year[46] - Ruide Electronics reported a net profit of approximately 14.10 million yuan, a decline of 44.51% from 25.41 million yuan year-on-year, mainly due to a decrease in average selling prices[46] - Shenzhen Xingfei Technology Co., Ltd. reported total assets of approximately 5.65 billion RMB and net profit of approximately 200.44 million RMB for the year[114] Research and Development - The company invested 124,449.92 million RMB in R&D, a slight decrease of 1.87% from the previous year[55] - Research and development expenses amounted to ¥124,449,915.89, which is 1.84% of total operating revenue, with 388 R&D personnel making up 15.68% of the total workforce[70] - The company is actively investing in research and development to adapt AI technology for various electronic products, which is expected to drive market growth[85] - The company plans to increase R&D investment in new industries, particularly in IoT products, to ensure sustained operational growth[131] - The company is committed to developing a high-level, intelligent security system across multiple industries, including drone defense systems and IoT management platforms[135] Market Strategy and Expansion - The company plans to focus on future operational strategies, although specific commitments were not made due to potential changes in internal and external conditions[4] - The company is preparing to expand into new markets with fast charging and wireless charging products under its battery and power supply business[36] - The company plans to expand its overseas market presence while focusing on domestic brand partnerships to indirectly penetrate international markets[60] - The company is strategically expanding its presence in international markets, particularly in Europe, Latin America, and Southeast Asia[81] - The company aims to optimize its overseas market structure, targeting high-end markets in Japan and the United States while consolidating its presence in Southeast Asia and Latin America[125] Risks and Challenges - The company faced no significant risks that materially affected its production and operations during the reporting period[4] - The company faces risks related to business integration, industry policy changes, and market competition, necessitating strategic adjustments and enhanced R&D capabilities[140][144] - The company has faced liquidity challenges due to macroeconomic factors and reduced lending from financial institutions, impacting daily operations[148] - Due to tight liquidity and potential litigation risks, the company cannot accurately predict 2019 revenue figures, prioritizing liquidity improvement and debt risk mitigation[130] Corporate Governance and Compliance - The company has engaged Lixin Zhonglian Accounting Firm for auditing, which issued a standard unqualified audit report[4] - The company has established a KPI management system and project reward mechanisms to boost employee productivity and engagement[148] - The company has committed to ensuring that Shenzhen Xingfei and its other subsidiaries receive equal treatment to protect their interests[183] - The company is in the process of negotiating with Zhonghai Trust for the purchase of "17 Shida Bonds" totaling RMB 40 million[186] Investment and Financing - The company is focusing on multi-channel fundraising to alleviate financial strain, especially after the inability to issue a planned 1 billion yuan public bond in Q4 2018[41] - The company has approved a total of approximately 59.995 million RMB for external equity investments during the reporting period[90] - The company has pledged 70% equity of Shenzhen Xingfei and 51% equity of Zhongke Rontong as collateral for the repayment of "17 Shida Bonds"[186] - The company plans to improve its financial situation by attracting strategic investors and enhancing its overall competitiveness and shareholder value[139] Profit Distribution and Commitments - The company has not distributed profits in the last three years due to negative available profits, with the 2018 available profit for distribution being -339,913,616.86 RMB[153] - The net profit commitments for Shenzhen Xingfei for 2016, 2017, and 2018 are set at no less than 136 million, 158.4 million, and 183.7 million respectively[162] - If the cumulative net profit falls below the committed amount during the compensation period, compensation will be made through shares obtained from the transaction[162]