EmbedWay(SH:603496)2021-03-30 16:00Financial Performance - The company's revenue for 2020 was CNY 533,124,549.14, representing a 22.81% increase compared to CNY 434,114,198.37 in 2019[26]. - The net profit attributable to shareholders for 2020 was CNY 36,395,234.29, a decrease of 45.95% from CNY 67,338,091.67 in 2019[26]. - The net cash flow from operating activities for 2020 was CNY -79,431,924.85, indicating a significant decline compared to CNY 15,613,509.98 in 2019[26]. - The total assets at the end of 2020 were CNY 1,168,528,095.24, which is a 21.29% increase from CNY 963,416,870.37 in 2019[26]. - The net assets attributable to shareholders at the end of 2020 were CNY 815,167,930.73, reflecting a 1.72% increase from CNY 801,350,236.35 in 2019[26]. - The basic earnings per share for 2020 were CNY 0.1838, down 45.56% from CNY 0.3376 in 2019[26]. - The diluted earnings per share for 2020 were CNY 0.1806, a decrease of 45.96% compared to CNY 0.3342 in 2019[26]. - The weighted average return on equity for 2020 was 4.49%, a decrease of 4.23 percentage points from 8.72% in 2019[26]. - The company reported a net profit excluding non-recurring items of CNY 30,905,632.87 for 2020, down 49.22% from CNY 60,858,548.36 in 2019[26]. Shareholder Returns - The company did not distribute cash dividends, issue bonus shares, or increase capital from reserves for the fiscal year 2020[7]. - The company has established a shareholder return plan for 2020-2022, committing to distribute at least 20% of the annual distributable profits as cash dividends[193]. - In 2020, the company did not distribute any cash dividends, issue bonus shares, or increase capital from reserves, despite a net profit of approximately CNY 36.40 million[194]. - The cash dividend for 2019 was CNY 1.05 per 10 shares, amounting to a total cash distribution of approximately CNY 21.10 million, which was 31.34% of the net profit[194]. - The company’s cash distribution policy prioritizes cash dividends after reserving statutory and surplus reserves[193]. - The company has not engaged in any share buybacks that would count towards cash dividends[195]. Audit and Compliance - The company received a standard unqualified audit report from Zhonghua Certified Public Accountants[6]. - The board of directors confirmed that all members attended the board meeting, ensuring accountability for the report's accuracy[5]. - The financial report is guaranteed to be true, accurate, and complete by the responsible executives[6]. - The company has not violated decision-making procedures for external guarantees[9]. Operational Insights - The company has detailed risk factors related to its operations in the board report[9]. - The report includes a comprehensive discussion and analysis of the company's operational conditions and potential risks[9]. - The company emphasizes that forward-looking statements do not constitute substantive commitments to investors, highlighting investment risks[8]. - There are no non-operational fund occupations by controlling shareholders or related parties[9]. - The company has not indicated any significant changes in shareholder structure or stock variations during the reporting period[12]. Market and Industry Trends - The global market for switches is projected to reach $27.8 billion, enterprise routers $3.3 billion, and wireless products $11.3 billion by 2020, indicating stable growth in the data communication sector[45]. - The network security industry in China reached a scale of approximately 156.36 billion yuan in 2019, growing by 17.1% from 2018, with an expected growth rate of 8.85% in 2020[45]. - The increasing importance of information security and big data is expected to drive rapid growth in the information security industry, particularly in government sectors[57]. - The smart systems market is experiencing significant growth driven by trends such as new infrastructure, post-pandemic recovery, carbon neutrality, and information security[62]. - The implementation of SDN/NFV technologies is expected to enhance the capabilities of 5G network deployment and management[144]. Research and Development - The company's R&D investment reached 112.47 million yuan, accounting for 21.10% of total revenue[84]. - The number of R&D personnel increased to 361, representing 65.64% of the total workforce[75]. - The company has made substantial investments in the development of 5G-related products, including front-end access systems and security protection systems for mobile networks[85]. - The company is focused on building a smart manufacturing production capacity and improving management in production quality and response speed[179]. Strategic Initiatives - The company aims to provide integrated hardware and software solutions that combine domestic and intelligent technologies, focusing on three main categories: intelligent computing, intelligent networking, and smart IoT[44]. - The company is actively expanding its product offerings in the field of intelligent systems, including the development of autonomous AI integrated machines and intelligent inspection robots[86]. - The company has established deep partnerships with domestic chip manufacturers, developing a series of competitive products and technology platforms in the IT infrastructure market[48]. - The company plans to enhance its marketing service network and attract high-end market talent to create a collaborative market environment[182]. Challenges and Risks - The company recognizes the risk of intensified market competition due to the growing demand in information security and industrial internet sectors[185]. - The company faces potential risks from rapid industry and technology changes, which could lead to mismatches between products and market demands[186]. - The company emphasizes the importance of maintaining core technical personnel to ensure sustainable development amidst increasing competition for talent[190].