EASTCOM(SH:600776)2019-03-31 16:00Financial Performance - The net profit of the parent company for 2018 was CNY 101,782,431.64, with a statutory surplus reserve of CNY 10,178,243.16 extracted, representing 10% of the net profit[8]. - The total distributable profit at the end of 2018 was CNY 504,532,364.73, after deducting the cash dividend of CNY 75,360,003.84 distributed for 2017[8]. - The proposed cash dividend for 2018 is CNY 0.60 per 10 shares, totaling CNY 75,360,003.84, with remaining undistributed profit of CNY 429,172,360.89 to be carried forward[8]. - The company's operating revenue for 2018 was CNY 2,404,822,502.70, a decrease of 1.33% compared to CNY 2,437,285,614.69 in 2017[26]. - Net profit attributable to shareholders was CNY 127,402,474.47, representing an increase of 7.78% from CNY 118,208,655.39 in the previous year[26]. - The net profit after deducting non-recurring gains and losses was CNY 60,720,051.19, a decrease of 26.40% compared to CNY 82,494,861.10 in 2017[26]. - The company's cash flow from operating activities was negative at CNY -34,007,300.73, an improvement from CNY -68,620,898.01 in 2017[26]. - The total assets at the end of 2018 were CNY 3,802,976,653.98, an increase of 0.83% from CNY 3,771,709,106.79 at the end of 2017[26]. - The basic earnings per share for 2018 was CNY 0.1014, up 7.78% from CNY 0.0941 in 2017[26]. - The weighted average return on net assets increased to 4.18% from 3.94% in 2017, an increase of 0.24 percentage points[26]. - The company reported a total of CNY 66,682,423.28 in non-recurring gains and losses for 2018, compared to CNY 35,713,794.29 in 2017[29]. Business Operations - The company operates in various sectors including enterprise networks, information security, and intelligent self-service devices[16]. - The company’s financial electronic division is a key area of focus, contributing to its overall business strategy[16]. - The company is focusing on expanding its enterprise network and information security business, targeting government and public safety sectors[32]. - The company aims to enhance its market competitiveness by upgrading its management and strengthening its core business advantages[32]. - The company achieved a revenue of 2.405 billion yuan in 2018, a year-on-year decrease of 1.33%[40]. - The revenue from the enterprise network and information security sector was CNY 249,701,277.77, down 18.98% year-on-year, primarily due to a decline in specialized network communication revenue[51]. - The smart self-service equipment sector generated revenue of CNY 752,628,887.11, a decrease of 13.03%, with cash machine sales dropping by 27% while non-cash machine sales increased by 34%[48]. - The information communication technology service and operation sector saw revenue growth of 14%, reaching CNY 592,744,354.77, driven by steady growth in network optimization services[51]. - The total revenue from other industries was CNY 738,830,983.02, an increase of 6.21%, mainly due to growth in new business from manufacturing services[51]. Research and Development - The company holds a total of 517 patents, including 199 invention patents, enhancing its R&D capabilities[36]. - The company has made significant investments in R&D, with R&D expenses amounting to CNY 148,445,226.83, a 2.26% increase from the previous year[47]. - The company invested 167.88 million yuan in R&D, accounting for 6.98% of operating revenue, with 562 R&D personnel, representing 22.06% of total employees[60]. - The company is actively pursuing new developments in the smart manufacturing sector, focusing on IoT modules and automotive electronics, while also enhancing its manufacturing service capabilities[45]. - Research and development expenses for 2018 were CNY 148,445,226.83, slightly up from CNY 145,157,779.21 in 2017[176]. Financial Position - Cash and cash equivalents at the end of the period amounted to 1,060,642,541.71 yuan, an increase of 42.65% compared to the previous period[35]. - The accounts receivable increased by 178.62% to 153,342,977.45 yuan, primarily due to an increase in bank acceptance bills[35]. - The company’s long-term equity investments decreased by 52.86% to 114,575,224.25 yuan due to the disposal of equity in an associate[35]. - The company’s intangible assets increased by 124.82% to 107,029,163.89 yuan, attributed to the completion of the self-service device module development project[35]. - The company’s total assets at the end of 2018 were 3,116,511,739.78 RMB, with total liabilities amounting to 1,000,000,000.00 RMB, resulting in a healthy equity position[190]. Governance and Compliance - The company has provided a standard unqualified audit report from Zhongshun Zhonghuan Accounting Firm[7]. - The company emphasizes the importance of risk factors in its future development, urging investors to be cautious[10]. - The company has retained Zhongshun Zhonghuan Accounting Firm as its auditor for the third consecutive year, with an audit fee of 790,300 RMB[93]. - The company has not faced any major litigation or arbitration matters during the reporting period, indicating a stable legal standing[94]. - The company has maintained a good integrity status, with no adverse integrity issues reported for the company or its major stakeholders during the reporting period[94]. Social Responsibility - The company provided vocational training for approximately 291 person-times from impoverished areas during the reporting period[102]. - The employee insurance participation rate reached 96.3%, ensuring medical security for employees[104]. - The company engaged in a public welfare activity, donating winter clothing to 6,524 children in Xinjiang's Akesu region[100]. - The company is actively implementing a "village-to-village" financial service project in Guizhou, focusing on rural financial services[100]. - The company is committed to fulfilling its social responsibilities while creating value for shareholders[104]. Shareholder Information - The total number of ordinary shareholders at the end of the reporting period was 121,957, a decrease from 211,774 at the end of the previous month[111]. - The largest shareholder, Putian Oriental Communication Group Co., Ltd., held 570,712,740 shares, representing 45.44% of the total shares[111]. - China Securities Finance Corporation increased its holdings by 48,500 shares, bringing its total to 32,203,281 shares, or 2.56% of the total[111]. - The company has a significant stake in Dongxin Peace Technology Co., Ltd., holding 131,172,253 shares, which is 29.38% of its total equity[116]. - The actual controller of the company is China Putian Information Industry Group Co., Ltd., which is a large state-owned enterprise under the supervision of the State-owned Assets Supervision and Administration Commission[118]. Internal Control and Management - The company has established a comprehensive internal control system in accordance with relevant laws and regulations, including the Company Law and the Securities Law[144]. - The company will disclose its internal control evaluation report alongside the 2018 annual report, ensuring transparency in its internal control processes[152]. - There were no significant defects in internal control during the reporting period, as confirmed by the internal control audit report from Zhongzheng Accounting Firm[152]. - The company has implemented a performance evaluation mechanism for senior management, linking comprehensive assessment results to rewards, salary adjustments, and personnel changes[151]. - The company has a strong focus on market expansion and strategic partnerships within the telecommunications sector[127].