SG(SH:600734)2020-08-28 16:00Financial Performance - The company's operating revenue for the first half of 2020 was CNY 422,067,388.30, a decrease of 76.86% compared to CNY 1,823,691,816.54 in the same period last year[22]. - The net profit attributable to shareholders of the listed company was a loss of CNY 213,076,915.49, worsening by 19.33% from a loss of CNY 178,567,191.62 in the previous year[22]. - The net cash flow from operating activities was a negative CNY 114,127,793.21, an improvement of 12.94% compared to a negative CNY 131,083,478.97 in the same period last year[22]. - The total assets at the end of the reporting period were CNY 2,366,435,462.35, down 9.62% from CNY 2,618,173,826.87 at the end of the previous year[22]. - The net assets attributable to shareholders of the listed company decreased to CNY -698,260,373.93, a decline of 49.12% from CNY -468,255,418.78 at the end of the previous year[22]. - Basic earnings per share for the first half of 2020 were CNY -0.3424, a decrease of 19.55% from CNY -0.2864 in the same period last year[25]. - The company reported a net profit excluding non-recurring gains and losses of CNY -198,764,193.26, showing a 4.51% improvement from CNY -208,141,340.28 in the previous year[22]. - In the first half of 2020, the company achieved revenue of approximately RMB 378 million, a decrease of 78.82% compared to RMB 1.784 billion in the same period last year[41]. - The net profit for the same period was approximately -RMB 159.25 million, an increase of 7.97% compared to -RMB 147.50 million in the previous year[41]. Business Challenges - The decline in revenue was primarily due to the impact of the COVID-19 pandemic, funding issues, and industry factors affecting subsidiaries[25]. - The mobile intelligent terminal business faced significant challenges due to liquidity issues, COVID-19, and intensified US-China trade tensions, leading to underutilization of production capacity[40]. - The overall core competitiveness of the company has significantly declined due to financial pressures and liquidity issues[38]. - The company anticipates continued net profit losses for the first nine months of 2020 due to ongoing liquidity issues exacerbated by the COVID-19 pandemic and trade tensions[79]. - The company faces liquidity risks due to tightened funding from financial institutions, impacting operational activities and customer order maintenance[80]. Strategic Focus - The company is focusing on product iteration and cost reduction in the industry IoT smart terminal segment, while also planning new product developments in smart warehousing and retail[40]. - The company is increasing R&D investment in 5G technology to maintain competitiveness in the mobile communication and IoT markets[81]. - The company is adapting its sales model and increasing R&D investment to enhance its core technology and market competitiveness[83]. - The company plans to focus on debt restructuring and divesting non-performing assets in the second half of 2020 to improve liquidity[46]. - The company aims to capture the supply opportunities for Huawei's dual-band gateway and WiFi6 power adapters in the second half of 2020[49]. Legal Issues - The company is involved in significant litigation, including a case with China Construction Bank involving a claim of RMB 66.55 million, which was dismissed by the court in August 2019, but the plaintiff has appealed[104]. - The company is facing a lawsuit from Bohai Bank for RMB 60 million related to a financial loan contract, with no progress reported as of now[106]. - Another lawsuit involves China Everbright Bank, claiming RMB 109.645 million, with no updates on the case as of August 2020[107]. - The company has been ordered by the court to repay principal and interest in a case involving Shenzhen Sanhui Technology Co., with a judgment amount of RMB 25 million, and the company has appealed this decision[112]. - Shenzhen Xingfei has faced multiple lawsuits related to sales contract disputes, with total claims amounting to over 2 billion yuan across various cases[137]. Subsidiary Performance - In the first half of 2020, Ruide Electronics achieved revenue of approximately 255 million RMB, a decrease of 29.95% compared to 364 million RMB in the same period last year[44]. - The net profit for the same period was approximately -6.65 million RMB, an improvement of 459,000 RMB from -7.11 million RMB year-on-year[44]. - Zhongke Rongtong's revenue in the first half of 2020 was approximately 41.35 million RMB, a slight increase from 32.50 million RMB in the first half of 2019[45]. - Zhongke Rongtong's net profit for the first half of 2020 was approximately -14.89 million RMB, a decline compared to -9.86 million RMB in the same period last year[45]. Investments and Assets - The company approved a total of CNY 200 million for external equity investments during the reporting period[63]. - The establishment of wholly-owned subsidiaries Beijing Hanzhu Technology Co., Ltd. and Beijing Zhuhuang Technology Co., Ltd. with registered capital of CNY 100 million each[64]. - The company has completed the investment in the new generation mobile terminal product R&D project with a total investment of CNY 5,000,000[68]. - The total assets of Shenzhen Xingfei Technology Co., Ltd. (consolidated) were CNY 1,543,228,652.95, with a net loss of CNY 159,249,511.80[74]. - The total assets of Shenzhen Ruide Electronics Co., Ltd. (consolidated) were CNY 579,137,765.52, with a net loss of CNY 6,654,875.75[74]. Related Party Transactions - The company has a total of 119.15 million RMB in related party debts, with a significant portion being transactions with subsidiaries[187]. - The company’s total related party transactions amounted to 530.97 million RMB, with pricing based on market principles[182]. - The company’s total balance of related party debts at the beginning of the period was 4.8 billion RMB, with no new funding provided during the reporting period[186]. - The company’s rental income is determined based on market conditions, reflecting a strategic approach to asset utilization[189]. Guarantees and Liabilities - Total guarantee amount (including subsidiaries) is RMB 858,707,373.45, which accounts for a significant portion of the company's net assets[193]. - The total amount of guarantees exceeding 50% of net assets is RMB 825,574,032.45[195]. - The total amount of overdue guarantees is RMB 33,000,000.00, with guarantees still not fulfilled[193]. - The company has been ordered to repay amounts in several cases, with a notable ruling in June 2020 requiring repayment of 409.80 million CNY[145].