TKD(SH:603738)2019-04-11 16:00Financial Performance - The net profit attributable to the parent company for 2018 was CNY 36,358,746.47[5] - The company's operating revenue for 2018 was CNY 611,299,588.85, representing a year-on-year increase of 13.21% compared to CNY 539,964,464.17 in 2017[24] - The net profit attributable to shareholders for 2018 was CNY 36,358,746.47, a decrease of 43.66% from CNY 64,539,616.99 in 2017[24] - The net cash flow from operating activities decreased by 64.46% to CNY 47,672,751.74 in 2018, down from CNY 134,135,307.89 in 2017[24] - Basic earnings per share for 2018 were CNY 0.23, down 43.90% from CNY 0.41 in 2017[25] - The weighted average return on equity decreased to 5.80% in 2018, down 5.66 percentage points from 11.46% in 2017[25] - The total assets of the company at the end of 2018 were CNY 1,196,196,610.13, a decrease of 5.65% from CNY 1,267,813,347.14 at the end of 2017[24] - The total profit amounted to CNY 57.86 million, a decrease of 39.79% compared to the previous year[83] - Net profit for the period was CNY 44.11 million, down 42.14% year-on-year[83] Dividend Policy - The proposed cash dividend is CNY 0.9 per 10 shares (including tax), with no bonus shares or capital reserve conversion[5] - The company has a cash dividend policy that mandates a minimum cash distribution of 20% of the annual distributable profit, with higher percentages for mature stages without major capital expenditures[150] - In 2018, the company distributed cash dividends amounting to CNY 14,285,311.29, representing a net profit distribution rate of 39.29%[157] - In 2017, the cash dividend distribution was CNY 26,071,880.00, with a net profit distribution rate of 40.40%[157] - In 2016, the cash dividend distribution was CNY 21,337,600.00, with a net profit distribution rate of 36.15%[157] - The company has not proposed a cash profit distribution plan for the reporting period despite having positive distributable profits[158] Risk Management - The company emphasizes the importance of risk awareness regarding future plans and development strategies[6] - The report includes a standard unqualified audit opinion from Zhongshun Zhonghuan Accounting Firm[4] - The company has detailed various risks faced in production and operations in the report[7] - There are no non-operating fund occupations by controlling shareholders or related parties[7] - The company faces risks related to product quality, as any instability could lead to customer returns and claims[133] - The company is at risk of not maintaining its high-tech enterprise status, which could affect its tax rate and overall financial performance[138] - The company faces risks from exchange rate fluctuations, particularly due to high export ratios and reliance on foreign currencies for procurement[143] - The macroeconomic environment has become increasingly uncertain since 2018, particularly due to intensified trade tensions, which may affect the company's production capacity and product pricing[145] Business Overview - The report outlines the company's business overview and key financial indicators[15] - The company operates several wholly-owned and controlling subsidiaries in the electronics sector[12] - The company's main business is the research, development, production, and sales of quartz crystal resonators, with no changes in the main business since establishment[34] - The company’s products include various models of quartz crystal resonators, covering DIP and SMD types, aimed at applications in personal computers, home appliances, and mobile communications[34] - The company aims to enhance its market competitiveness by expanding production capacity and optimizing product structure through fundraising projects[34] - The company is actively promoting chip solutions to gain more opportunities in the smart and IoT markets[38] Production and Sales - The company reported a significant increase in asset impairment losses due to expanded production and sales scale, leading to increased costs[26] - The cash flow from operating activities was negatively impacted by increased payments for labor and materials due to expanded production scale[26] - The company's total production volume increased to 2.78 billion units in 2018, representing a growth of 23.51% year-over-year[49] - The company's sales volume reached 2.55 billion units, up 18.97% year-on-year, with revenue of 611 million yuan, an increase of 13.21%[74] - The gross margin for its main business was 25.44%, down from 28.96% the previous year, due to increased competition and rising costs[77] - The production volume of quartz crystal resonators increased by 23.51% year-on-year, with sales volume rising by 18.97%[93] Research and Development - Research and development expenses for 2018 amounted to 20.20 million yuan, accounting for 3.30% of total revenue[78] - The company holds 93 patents, including 6 invention patents, highlighting its commitment to innovation[78] - The company has successfully extended its production from DIP to SMD products, achieving mass production of high-frequency chips, bases, and covers[66] - The company successfully developed new micro SMD products (SMD2016, 1612, 2012) and achieved mass production, adapting to the demands of 5G technology[104] Market Trends - The global market share of Japanese quartz crystal manufacturers decreased from 59.9% in 2010 to 48.80% in 2017, a decline of 11.10 percentage points[44] - In 2017, Taiwan manufacturers held approximately 24.30% of the global market share for frequency components, an increase of 6.00 percentage points from 2010[45] - The global frequency component market value remained between $3.1 billion and $3.3 billion in 2017, with an estimated annual sales volume of 17.5 billion to 18.5 billion units, reflecting a compound annual growth rate (CAGR) of 2.1%[46] - The IoT connections are projected to grow from 8.6 billion in 2018 to 22.3 billion by 2024, with a CAGR of 17%[55] - The number of internet broadband access ports reached 886 million by the end of 2018, with a net increase of 110 million from the previous year[57] Corporate Governance - The company has made commitments to avoid related party transactions and ensure compliance with regulations to protect shareholder interests[176] - The company is committed to ensuring that any share repurchase or increase in shareholding complies with relevant regulations and does not exceed specified financial limits[166][167][168] - The controlling shareholders pledged not to interfere with the company's management or infringe on its interests[186] - The company reported no significant accounting errors during the reporting period[192] - There were no major lawsuits or arbitration matters reported during the year[195] Community Engagement - The company established the "Taijing Technology Scholarship" and "Taijing Technology Innovation Fund" at Wuhan University of Technology to support outstanding impoverished students, with a total funding of 300,000 yuan from 2017 to 2021[200] - The company actively participates in local poverty alleviation plans as per government and regulatory documents[199] - The company prioritizes providing employment opportunities for impoverished areas and households[199] - The company offers financial support for local poverty alleviation projects[199]