Lettall Electronic(SH:603629)2020-04-20 16:00Financial Performance - The company's operating revenue for 2019 was CNY 1,620,250,982.39, representing a year-on-year increase of 1.61% compared to CNY 1,594,594,984.84 in 2018[23]. - The net profit attributable to shareholders for 2019 was CNY 63,452,864.86, a decrease of 31.36% from CNY 92,446,535.43 in 2018[23]. - The basic earnings per share for 2019 was CNY 0.63, down 31.52% from CNY 0.92 in 2018[24]. - The weighted average return on equity for 2019 was 6.48%, a decrease of 12.71 percentage points from 19.19% in 2018[24]. - The overall gross margin for 2019 was 18.88%, down from 21.58% in 2018, primarily due to declining sales prices across major products[55][57]. - The sales volume of precision metal structural parts reached 22.95 million units, a year-on-year increase of 14.93%, but the average selling price dropped by 14.91% to CNY 53.41, leading to a decline in revenue[53][54]. - The company reported a significant decrease in net profit due to continuous price declines in the sales market, despite an 8% drop in the price of key raw materials[55][59]. Cash Flow and Dividends - The company plans to distribute a cash dividend of RMB 2.00 per 10 shares, totaling RMB 20,000,000.00 (including tax) based on a total share capital of 100,000,000 shares as of December 31, 2019[7]. - In 2019, the company distributed cash dividends amounting to 20,000,000.00 RMB, which represents 31.52% of the net profit attributable to ordinary shareholders[121]. - The company plans to distribute at least 10% of the annual distributable profits in cash dividends for the three years following its IPO, with a cumulative cash distribution of no less than 30% of the average distributable profits over any three consecutive years[117]. - The company has retained undistributed profits primarily for asset purchases, equipment acquisition, and other operational expenditures to enhance competitiveness and support growth[113]. Operational Highlights - The company has established partnerships with major brands such as Hisense, TCL, and Xiaomi, focusing on precision metal components for LCD TVs[34]. - The company operates a direct sales model, primarily focusing on domestic sales while some products are exported[34]. - The company has a production capacity of over 22 million precision metal stamping backplates and rear shells annually, with 15 large-size and 5 small-size production lines[42]. - The company has expanded its customer base to include Xiaomi, Huawei, and Samsung, enhancing its industry position[44]. - The company has developed over 100 new models, including the Hisense 8K PRO concept machine backplate and Huawei's 65-inch and 85-inch smart screen components[47]. Market Conditions - In 2019, the global LCD TV shipment was 226 million units, with a year-on-year growth of only 0.4%[37]. - China's LCD TV exports in 2019 were 93.56 million units, a year-on-year decrease of 3.1%, while domestic sales were 47.72 million units, down 2%[37]. - The retail sales of LCD TVs in China in 2019 reached 134 billion yuan, a year-on-year decline of 11.2%, with an average price per unit of 2,809 yuan, down 9.99%[37]. - The television market in China saw a decline in domestic sales by 2% and export sales by 3.1% in 2019, indicating a shift in market dynamics[93]. Risks and Challenges - There are no significant risks that could materially affect the company's operations during the reporting period[8]. - The decline in net profit for 2019 was attributed to a decrease in client pricing and an increase in direct labor costs[26]. - The company faces risks from the evolving LCD television market and competition from new display technologies like OLED and laser TVs, which could reduce demand for its products[106]. - The COVID-19 pandemic has introduced uncertainties that may negatively impact sales due to reduced overseas orders from downstream clients[106]. - Raw material costs, particularly for electro-galvanized sheets and aluminum profiles, constitute about 70% of direct material costs, making the company vulnerable to price fluctuations[99]. Compliance and Governance - The company has committed to ensuring the accuracy and completeness of the prospectus, taking legal responsibility for any false statements or omissions[138]. - The actual controllers of the company have committed not to transfer or entrust the management of their shares for 36 months from the date of listing[125]. - The company will strictly adhere to the "Stabilization Plan" to fulfill obligations and responsibilities regarding stock price stabilization[131]. - The company has implemented stricter regulations for related party transactions, including pricing and decision-making processes, to protect shareholder interests[168]. - The company has made commitments to minimize related party transactions and ensure they are conducted at market prices[170]. Investments and Financial Management - The company has invested CNY 58.18 million in new production equipment, with over 80% allocated to specialized production equipment, enhancing capacity and layout[58]. - The company has structured deposits totaling CNY 230 million from raised funds, with no overdue amounts[196]. - The company has invested CNY 65 million in wealth management products from its own funds, with the entire amount still outstanding[196]. - The company has a structured deposit of CNY 100 million with Nanjing Bank, yielding an annualized return of 4.30%, with a total expected return of CNY 4.34 million[196]. Audit and Financial Reporting - The company has received a standard unqualified audit report from Tianjian Accounting Firm[6]. - The company has appointed Tianjian Accounting Firm as its auditor, with a remuneration of ¥40,000 for the audit[187]. - The company has reported adjustments in financial statement items due to changes in accounting policies, affecting receivables and payables significantly[171].