GOODIX(SH:603160)2019-04-12 16:00Dividend Policy - The company plans to distribute a cash dividend of RMB 0.5 per share (including tax) to all shareholders based on the total share capital on the dividend record date for the year 2018[4]. - The company aims for a cash dividend policy where at least 20% of the distributable profit will be distributed as cash dividends if the company is profitable and has positive retained earnings[75]. - The company plans to distribute cash dividends with a minimum ratio of 40% for mature stage and significant capital expenditure arrangements, and 20% for growth stage under similar conditions[76]. - The cash dividend distribution for 2017 was set at RMB 0.6 per share, totaling RMB 272.5 million, and was approved by the shareholders' meeting[79]. - In 2018, the company distributed cash dividends totaling RMB 228,325,829.50, representing 30.75% of the net profit attributable to ordinary shareholders[83]. - The cash dividend per 10 shares in 2018 was RMB 5.00, down from RMB 6.00 in 2017 and RMB 4.00 in 2016[83]. - The company did not propose a cash profit distribution plan despite having positive distributable profits for ordinary shareholders during the reporting period[83]. - The company has maintained a consistent dividend payout strategy over the past three years, with a focus on returning value to shareholders[83]. Financial Performance - The company's operating revenue for 2018 was CNY 3,721,291,685.55, representing a year-on-year increase of 1.08% compared to CNY 3,681,594,308.56 in 2017[17]. - The net profit attributable to shareholders for 2018 was CNY 742,498,646.02, a decrease of 16.29% from CNY 886,942,112.90 in 2017[17]. - The basic earnings per share for 2018 was CNY 1.65, down 15.38% from CNY 1.95 in 2017[19]. - The weighted average return on equity for 2018 was 19.72%, a decrease of 9.07 percentage points from 28.79% in 2017[19]. - The net cash flow from operating activities for 2018 was CNY 1,232,098,069.07, an increase of 11.57% compared to CNY 1,104,340,700.08 in 2017[17]. - The total assets at the end of 2018 were CNY 5,345,221,338.17, reflecting a year-on-year increase of 20.99% from CNY 4,417,940,059.28 in 2017[18]. - The net profit after deducting non-recurring gains and losses for 2018 was CNY 671,962,039.69, a decrease of 22.83% from CNY 870,734,322.12 in 2017[17]. - The gross profit margin reached 52.18%, with a total gross profit of 1.94 billion yuan, an increase of 10.67% from the previous year[1]. Risk Management - The company reported no significant risk events during the reporting period, and potential risks and countermeasures are detailed in the report[5]. - The company has established a comprehensive risk management framework to address potential challenges[5]. - The company faces industry risks due to cyclical fluctuations in the semiconductor industry, which could impact demand for chips if macroeconomic conditions worsen[72]. - The company is exposed to competition risks, with increasing pressure from both international and domestic competitors, potentially leading to price declines and reduced profit margins[72]. - The company recognizes the risk of technology innovation lagging behind industry trends, which could lead to wasted R&D resources and missed market opportunities[73]. Research and Development - Research and development expenditure increased by 40.50% to 838 million yuan, accounting for 22.53% of operating revenue[1]. - The number of patent applications reached 2,799, with 335 domestic applications in 2018, a growth of 50.9% year-over-year[36]. - The company has mastered core technologies for NB-IoT and will invest in developing a comprehensive ecosystem solution, focusing on low-power wireless connectivity, security, sensors, and MCU technologies[71]. - The company has developed a comprehensive low-power narrowband IoT solution through acquisitions, enhancing its technological capabilities[31]. - The company plans to expand its product line in the smart mobile terminal sector, focusing on under-display fingerprint and 3D facial recognition technologies[69]. Market and Industry Trends - The domestic integrated circuit industry reached a total scale of 653.1 billion RMB in 2018, growing by 20.7% year-on-year, while the integrated circuit design sector grew by 21.5% to 251.9 billion RMB[27]. - In 2018, global smartphone shipments were 1.4 billion units, a decline of 4.1% year-on-year, with China's smartphone market experiencing a 10.5% drop to approximately 400 million units[28]. - The fingerprint recognition chip market slowed down due to the maturity of the capacitive fingerprint industry, with significant price drops and limited growth in penetration rates[29]. - The global market size for capacitive touch chips is estimated between 2 billion to 2.5 billion USD, with over 60% of applications in smartphones[29]. Corporate Governance - The board of directors and senior management have confirmed the accuracy and completeness of the financial report for the year[2]. - The company is committed to transparent governance and compliance with relevant laws and regulations to protect shareholder interests and ensure sustainable development[71]. - Independent directors are required to provide independent opinions on dividend proposals, especially when profits are reported but no cash dividend is proposed[78]. - The company has a mechanism to ensure that independent directors and minority shareholders can express their opinions and protect their rights during the dividend decision process[78]. Legal Matters - The company is involved in significant litigation regarding patent infringement, seeking RMB 70 million in damages from two defendants for unauthorized use of its patented technology[99]. - The company has filed lawsuits against three defendants for infringing on its utility model patent ZL201821077979.2, seeking RMB 50 million in damages and additional costs of RMB 50,000[100]. - The total amount involved in the ongoing litigation is approximately RMB 80.5 million[102]. - The company is actively defending its intellectual property rights through these legal actions[100][101]. Employee and Management Structure - As of December 31, 2018, the company had 1,196 employees, with 1,053 in R&D, indicating a strong focus on talent acquisition to meet market demands[73]. - The total pre-tax compensation for the chairman and general manager was 32.15 million yuan, while the independent directors received 2.5 million yuan each[150]. - The company has a diverse board composition with independent directors, which is crucial for corporate governance[167]. - The company employs a total of 1,196 staff, including 1,101 at the parent company and 95 at major subsidiaries[169]. Financial Management - The company has engaged in cash asset management, with a total of ¥4 billion allocated to directed asset management and ¥5.9 billion in structured deposits[118]. - The company has no overdue amounts in its cash asset management activities[118]. - The company has a diversified approach to wealth management, utilizing both principal-protected and non-principal-protected products[120][121]. - The company has established relationships with major banks such as China Merchants Bank, CITIC Bank, and Guangfa Bank for its financial management strategies[119][120][121].