SG(SH:600734)2019-07-02 16:00Financial Performance - The company's operating revenue for 2017 was CNY 6,474,445,474.46, representing a 52.95% increase compared to CNY 4,232,988,543.77 in 2016[26] - The net profit attributable to shareholders for 2017 was CNY 186,708,521.64, a slight increase of 1.61% from CNY 183,750,784.48 in 2016[26] - The net profit attributable to shareholders after deducting non-recurring gains and losses was CNY 169,124,572.07, which is a significant increase of 77.75% compared to CNY 95,145,178.05 in 2016[26] - Basic earnings per share decreased by 19.85% to CNY 0.3001 from CNY 0.3744 in 2016[27] - Net profit attributable to shareholders after deducting non-recurring gains and losses increased by 40.18% to CNY 0.2718 per share from CNY 0.1939 in 2016[27] - The company reported a significant increase in unallocated profits, rising by 418.45% to 142,089,192.49 CNY, indicating a strong financial performance[98] - The company's total net profit for 2015, 2016, and 2017 was reported as ¥154,819,126.72, ¥183,750,784.48, and ¥186,708,521.64 respectively, with no dividends distributed in those years[183] Cash Flow and Assets - The net cash flow from operating activities was negative at CNY -293,443,461.95, a decline of 341.73% from CNY 121,391,843.60 in 2016[26] - The net cash flow from operating activities was negative CNY 146,206,464.48 in Q4 2017, indicating cash flow challenges[30] - The operating cash flow showed a significant decline, with a net outflow of approximately CNY 293.44 million, compared to a net inflow of CNY 121.39 million in the previous year[71] - Total assets at the end of 2017 amounted to CNY 8,225,118,774.79, which is a 15.47% increase from CNY 7,123,455,304.71 at the end of 2016[26] - The company's equity attributable to shareholders increased by 13.45% to 2,874,784,003.03 CNY, driven by improved profitability[98] - Accounts receivable rose by 49.92% to 3,487,687,789.17 CNY, primarily due to increased customer payments from subsidiary Shenzhen Xingfei[92] - Inventory decreased by 20.94% to 430,250,110.94 CNY, indicating improved inventory management[92] Business Operations and Strategy - The company has indicated that the 2018 operational plans are subject to change based on future internal and external conditions, highlighting potential risks[8] - The company is focusing on mobile intelligent terminal products and has established a presence in the IoT security field through acquisitions and internal growth strategies[37] - The company aims to integrate supply chain resources and has established long-term partnerships with key suppliers to ensure product quality and production efficiency[42] - The company is actively seeking investment opportunities in the fintech sector through the establishment of a venture capital fund, enhancing its growth potential[59] - The company plans to explore new investment opportunities in technology and innovation sectors through its newly established subsidiary, Shenzhen Yongsheng Shida Investment Development Co., Ltd.[113] - The company plans to expand its overseas market presence while consolidating its positions in Southeast Asia and Latin America, targeting entry into high-end markets like Japan and the USA[147] Subsidiaries and Acquisitions - The company acquired subsidiaries Shenzhen Xingfei, Dongfang Tuoyu, and Zhongke Rongtong, leading to changes in the consolidation scope and increased revenue from these subsidiaries[30] - Shenzhen Xingfei, a key subsidiary, has three production bases and serves over 30 countries, enhancing its competitive position in the ODM market[41] - The company established a new wholly-owned subsidiary, Shanghai Shiwow Network Technology Development Co., Ltd., with a registered capital of RMB 10 million to expand its business in the East China region[114] - The company agreed to acquire 100% of Hangzhou Xuhang Network Technology Co., Ltd. for RMB 940 million, later modifying the deal to acquire a 4% stake for RMB 29.4 million[122] Research and Development - The company’s R&D expenditure increased by 118.69% to approximately CNY 126.82 million, reflecting a strong commitment to innovation[71] - The company is increasing investment in IoT and smart terminal R&D, enhancing high-end resources to drive market sales and improve product value[162] - The company plans to develop a 5G product research team to closely follow 5G technology trends and actively participate in the development of 5G terminal solutions[152] Market Trends and Future Outlook - The global smartphone market saw a slight decline in shipments, with a total of approximately 1.472 billion units shipped in 2017, a year-on-year decrease of 0.1%[102] - The overall mobile internet market is projected to exceed 1 trillion CNY in 2018, continuing to grow rapidly[146] - The market for lithium batteries is expected to grow primarily in the fields of power batteries and energy storage batteries, driven by advancements in technology and the development of the new energy industry[103] - The company anticipates significant growth in the market for emerging mobile smart terminal products, including wearable devices and smart home products, driven by consumer interest[142] Profit Distribution and Commitments - The company has a clear profit distribution policy that aligns with shareholder interests and ensures transparency in decision-making processes[174] - The independent directors agreed that the decision not to distribute profits in 2016 and 2017 was in accordance with the company's profit distribution policy and relevant laws, given the negative retained earnings[179] - The company has committed to not seeking control over the actual controller or major shareholders for 36 months post-transaction completion[190] - The company committed to achieving a net profit of no less than 30 million yuan for the years 2016, 2017, and 2018[195]