Kersen(SH:603626)2019-04-26 16:00Financial Performance - The company achieved a net profit of CNY 28,151,954.96 for the year 2018, with a 10% statutory surplus reserve of CNY 2,815,195.50 deducted [7]. - The total distributable profit as of December 31, 2018, was CNY 411,070,560.10 after accounting for previous dividends of CNY 74,219,200.00 [7]. - The company plans to distribute a cash dividend of CNY 2.50 per 10 shares, totaling CNY 103,226,683.00 (including tax) to shareholders [7]. - In 2018, the company's operating revenue reached ¥2,408,320,131.75, an increase of 11.24% compared to ¥2,164,957,830.68 in 2017 [23]. - The net profit attributable to shareholders decreased by 43.94% to ¥124,682,904.66 from ¥222,403,797.35 in the previous year [23]. - The net cash flow from operating activities increased by 57.41% to ¥328,027,016.51, up from ¥208,393,528.32 in 2017 [24]. - Total assets grew by 44.19% to ¥4,961,080,087.07, compared to ¥3,440,622,546.08 at the end of 2017 [24]. - The company's net assets attributable to shareholders increased by 6.06% to ¥1,864,584,406.89 from ¥1,757,980,983.04 in 2017 [24]. - Basic earnings per share decreased by 61.28% to ¥0.30 from ¥0.78 in 2017 [25]. - The weighted average return on equity dropped by 8.16 percentage points to 7.02% from 15.18% in the previous year [25]. Risk Management - The company emphasizes the importance of risk awareness regarding future plans and development strategies [8]. - The company has a comprehensive risk analysis detailed in the annual report, highlighting potential challenges [9]. - The company maintains a commitment to ensuring the accuracy and completeness of its financial reports [6]. - The company has not reported any violations of decision-making procedures regarding external guarantees [9]. - The company faces risks related to customer concentration, as major clients in the consumer electronics sector may impact performance if their business changes significantly [104]. - The company is exposed to fluctuations in the consumer electronics industry, particularly in smartphones and tablets, which may lead to reduced demand and pricing pressures [105]. - The company recognizes the risk of increased competition in the precision metal manufacturing sector, necessitating ongoing investment in technology and service quality to maintain its market position [106]. Operational Insights - The company primarily engages in precision metal manufacturing, providing components for clients like Apple, Amazon, and Google, focusing on sectors such as consumer electronics and medical devices [34]. - The company operates on a made-to-order production model, with production cycles ranging from one day to two weeks depending on product complexity [36]. - The company has a significant presence in the Yangtze River Delta region, with a focus on high-precision metal components for various industries, including telecommunications and medical devices [38]. - The company is leveraging advanced manufacturing technologies such as CNC machining and precision casting to meet the increasing demands for high-quality metal components [39]. - The company has expanded its product offerings to approximately 5,000 types, providing a one-stop service for various industries and enhancing its competitive advantage [43]. - The company has developed strong relationships with high-end clients in the consumer electronics and medical device sectors, which enhances customer loyalty and market share [47]. Research and Development - The company has over 160 authorized patents, including more than 30 invention patents, reflecting its strong R&D capabilities and commitment to innovation [42]. - The company has established six R&D and production bases in Kunshan and Dongtai, allowing for significant production scale and stable supply relationships with clients [43]. - Research and development expenses increased by 31.34% to ¥149,459,643.04, reflecting investments in new product development [58]. - The company has invested in nearly 30 R&D projects, focusing on high-precision components for various electronic devices [72]. - The medical device sector saw a revenue increase of over 60%, attributed to the development of multiple projects in recent years [62]. Market Trends - The smartphone market saw a shipment of 1.4049 billion units in 2018, a year-on-year decline of 4.1%, with the top five manufacturers holding 66.1% of the market share [80]. - The tablet market experienced a shipment of 173.8 million units, down 6.16% from 2017, with the top five manufacturers capturing 59.9% of the market [80]. - The global PC market saw a total shipment of 259.4 million units, a decrease of 1.3%, with the top six manufacturers holding 79.4% of the market share [80]. - The global medical device market is projected to grow from $444.2 billion in 2018 to $577.6 billion by 2023, with a CAGR of 5.4% from 2017 to 2023 [82]. - The electronic cigarette market is expected to grow at a CAGR of 19.3% from 2018 to 2022, driven by increasing health awareness and demand for alternatives to traditional tobacco products [85]. Corporate Governance - The company has implemented measures to ensure that executive compensation is linked to the execution of its return measures, promoting accountability [126]. - The board of directors has held 10 meetings in the year, with all members attending, ensuring effective governance [191]. - The company has established a risk management framework within its governance structure, enhancing decision-making processes [189]. - The company has a structured approach to performance evaluation and incentive mechanisms for senior management, ensuring alignment with future development plans [193]. - The company has no reported penalties from securities regulatory agencies in the past three years [182]. Shareholder Relations - The company is committed to maintaining a stable and continuous profit distribution policy, prioritizing cash dividends, with a minimum of 30% of the average distributable profit over the last three years to be distributed [110]. - The company distributed cash dividends amounting to 103,226,683.00 RMB, representing 82.79% of the net profit attributable to ordinary shareholders [114]. - The cash dividend per 10 shares for 2018 was 2.50 RMB, consistent with the previous year [114]. - The company has a policy that mandates a minimum cash dividend ratio of 40% for mature stage companies with significant capital expenditure [112]. - The company has committed to not transferring or entrusting shares held by major shareholders for a period of 36 months post-listing [115]. Financial Management - The company reported a return on investment from entrusted financial management, with actual returns of 54.25 million RMB from a 5 million RMB investment at a 4.4% annualized yield [143]. - The company has a high interest coverage ratio, indicating strong cash flow to cover interest payments on debts [149]. - The company has no overdue bank loans, reflecting good repayment capability [149]. - The company plans to use up to RMB 200,000,000 of idle self-owned funds for cash management, effective for one year from the board's approval date [139]. - The company has maintained a stable credit rating of AA for its convertible bonds, with a stable outlook [149].