EmbedWay(SH:603496)2019-04-17 16:00Financial Performance - The company's operating revenue for 2017 was CNY 312,209,928.23, representing a year-over-year increase of 38.18% compared to CNY 247,742,650.82 in 2016[33]. - The net profit attributable to shareholders for 2017 was CNY 75,236,384.38, which is a 39.78% increase from CNY 62,021,479.23 in 2016[33]. - The net cash flow from operating activities for 2017 was -CNY 58,706,831.41, showing a significant increase of 166.53% compared to CNY 57,051,215.82 in 2016[33]. - The total assets at the end of 2017 were CNY 769,750,554.79, an increase of 18.69% from CNY 374,188,872.29 at the end of 2016[33]. - The basic earnings per share for 2018 was CNY 0.7522, a decrease of 12.51% compared to CNY 0.8598 in 2017[33]. - The weighted average return on net assets for 2018 was 14.62%, down 1.68 percentage points from 16.30% in 2017[33]. - The company reported a net profit of CNY 22,516,935.83 in Q4 2018, with total operating revenue of CNY 94,072,201.93 for the same quarter[36]. - The company’s net profit attributable to ordinary shareholders in 2018 was 105,166,343.17 RMB, resulting in a net profit margin of 30.54%[165]. - The net profit for the year reached 85,031,263.50 yuan, a growth of 102.61% compared to the previous year, driven by increased revenue from network visualization and self-developed software[116]. Dividend and Profit Distribution - The company plans to distribute a cash dividend of 0.225 CNY per share (including tax) and to increase capital by converting 4.2 shares for every 10 shares held[7]. - The company has not proposed any stock bonus shares in its profit distribution plan[7]. - The company plans to distribute cash dividends of no less than 20% of the distributable profits for the year, provided that the net profit is positive and cash flow is sufficient[160]. - In 2018, the company distributed cash dividends of 2.25 RMB per 10 shares, totaling 32,112,634.73 RMB, and increased capital by 4.2 shares per 10 shares, totaling 59,943,585 shares[165]. - The company’s profit distribution policy emphasizes cash dividends as the preferred method, with stock dividends as an alternative[160]. - The company’s profit distribution plan for 2018 was approved at the annual general meeting, requiring further shareholder approval for the proposed distributions[160]. Audit and Compliance - The company has received a standard unqualified audit report from Zhonghua Certified Public Accountants[6]. - The financial report has been declared accurate and complete by the responsible personnel[6]. - The board of directors has confirmed that all members attended the board meeting, ensuring accountability for the report's accuracy[5]. - The company has established strict procedures for related party transactions to ensure fairness and protect the interests of minority shareholders[176]. - The company has made a commitment regarding the accuracy and completeness of its prospectus, taking legal responsibility for any false statements or omissions[191]. Risk Management - The company has detailed potential risks in its report, advising investors to review the discussion and analysis of operational conditions[9]. - The report includes a forward-looking statement risk declaration, indicating that future plans do not constitute a commitment to investors[8]. - The report emphasizes the importance of risk awareness for investors regarding the company's future strategies[8]. - The company faces market competition risks due to increasing participation from competitors in the network visualization and embedded computing sectors[152]. - The company is at risk of industry and technology changes that could lead to mismatched products and lost competitive advantages if it misjudges market trends[153]. - The company’s operations may be affected by policy risks, particularly regarding information security and domestic controllability initiatives[156]. Research and Development - The company’s R&D investment accounted for 17.89% of total revenue, with 240 R&D personnel representing 69.36% of the total workforce[72]. - The company successfully obtained 1 patent and 17 software copyrights during the reporting period[72]. - The company invested 77.18 million in R&D, accounting for 17.89% of the annual sales revenue[82]. - The company will increase investment in new product and technology R&D, focusing on next-generation network visualization products, 5G mobile network technologies, and smart IoT solutions[144]. Business Operations - The company continues to focus on the development and sales of intelligent system solutions, specifically in network visualization infrastructure and embedded computing platforms, with no major changes in its main business operations during the reporting period[43]. - The network visualization infrastructure business includes core modules and solutions for various network standards, aimed at optimizing network performance and security, which is crucial for the growing demand in data applications[44]. - The embedded and integrated computing platform business provides customized solutions for various industries, including telecommunications and medical devices, highlighting the company's adaptability to market needs[52]. - The company emphasizes product innovation and market expansion as key drivers for growth, supported by the increasing demand for data collection and application in the context of big data and information security[60]. - The company has maintained a direct sales model for domestic markets while utilizing foreign trade companies for international sales, enhancing its market presence and customer relationships[58]. Market Trends and Industry Insights - The embedded systems industry continues to experience strong growth, driven by demand across various sectors including communication, healthcare, and military[132]. - The global IoT security market is projected to grow from $6.89 billion in 2015 to $28.9 billion by 2020[122]. - The Chinese government aims to achieve significant progress in military informationization by 2020, as part of its "Thirteenth Five-Year Plan" to modernize the military[133]. - Major Chinese tech companies like Alibaba, Huawei, and Tencent are making significant advancements in domestic technology, particularly in areas such as chips and operating systems[138]. Shareholder Relations and Governance - The company has committed to providing transparent dividend policies to enhance shareholder confidence and oversight[160]. - The company will hold a board meeting within 10 days if the stock price falls below the net asset value, followed by a shareholders' meeting to discuss stabilization measures[182]. - The company has a lock-up period of 36 months for certain shareholders, during which they cannot transfer their shares[176]. - The company will notify and disclose any commercial opportunities that may compete with its business to ensure transparency[179].