Hillstone Networks(SH:688030)2022-04-26 16:00Financial Performance - The company's operating revenue for 2021 was ¥1,026,948,139.06, representing a 41.57% increase compared to ¥725,388,848.88 in 2020[21]. - The net profit attributable to shareholders for 2021 was ¥75,526,102.89, a 25.39% increase from ¥60,235,219.58 in 2020[21]. - The net profit after deducting non-recurring gains and losses was ¥54,057,654.59, up 41.68% from ¥38,153,774.89 in 2020[21]. - The total assets at the end of 2021 were ¥1,943,537,512.75, an 8.34% increase from ¥1,793,979,216.32 at the end of 2020[21]. - The net assets attributable to shareholders increased by 5.74% to ¥1,507,258,047.57 at the end of 2021 from ¥1,425,424,406.01 at the end of 2020[21]. - Basic earnings per share for 2021 were ¥0.4191, a 25.40% increase from ¥0.3342 in 2020[22]. - The company's gross profit margin for its main business was 73.93%, an increase of 4.33 percentage points from the previous year[141]. - The company's boundary security business revenue was RMB 756,805,735.43, up 41.35% year-on-year, accounting for 74.37% of total revenue[136]. - The company's other security business revenue grew by 52.22%, contributing 20.54% to total revenue[137]. R&D and Innovation - R&D investment reached 299.25 million yuan, accounting for 29.14% of operating revenue, with a year-on-year growth of 41.01%[36]. - The number of R&D personnel increased by 24.95% year-on-year to 611, representing 33.79% of total employees, with 36.5% holding a master's degree or higher[36]. - The company has developed three new core technologies during the reporting period: "malware detection technology based on behavior analysis in virtual environments," "hardware acceleration technology for secure processing," and "security orchestration and automated response technology," bringing the total number of core technologies to 24[87]. - The company has applied for a total of 141 patents during the reporting period, with 58 patents granted, bringing the cumulative total to 430 applications and 266 grants[94]. - The company is focusing on R&D for security chips to strengthen its core competitiveness and cover a wider range of application scenarios[184]. Operational Challenges - The company has not yet achieved profitability since its listing[4]. - The company reported a net cash flow from operating activities of -¥119,053,386.79 in 2021, a significant decrease from ¥2,720,224.71 in 2020[21]. - The company’s accounts receivable at the end of the reporting period amounted to 629.69 million, representing 40.50% of current assets, with a turnover rate of 1.58 times[128]. - The company experienced a net cash flow from operating activities of -119.05 million during the reporting period, indicating potential cash flow challenges[130]. - The company's inventory turnover rate is low, which may increase operational funding pressure[133]. Market Position and Strategy - The company aims to become a leading guardian in the development of the digital world, focusing on the cybersecurity industry, which is expected to grow from $10.26 billion in 2021 to $21.46 billion by 2025, representing a compound annual growth rate (CAGR) of 20.5%[75]. - The company has served over 23,000 users across various sectors, including finance, government, and healthcare, solidifying its position as a technology innovation leader in the cybersecurity field[78]. - The company plans to enhance its investment in self-developed software and hardware, container security, XDR, and SOAR to strengthen its market competitiveness[77]. - The company is actively pursuing opportunities in the industrial internet sector, with the industrial information security market expected to grow by 31.83% in 2021, reaching a total market size of approximately $16.701 billion[86]. - The company is focusing on optimizing talent development through external recruitment and internal training to prepare for ongoing and future business expansion[200]. Governance and Compliance - The board of directors has confirmed the authenticity and completeness of the annual report[4]. - The company does not have any special arrangements for corporate governance[7]. - There are no non-operating fund occupations by controlling shareholders or related parties[9]. - The report includes a forward-looking statement risk declaration, indicating that future plans do not constitute a commitment to investors[8]. - The company has a dispersed shareholding structure with no controlling shareholder, which may pose risks to governance stability[135]. Future Outlook - The company plans to further optimize and deepen the three-dimensional interlocking mechanism in 2022 to maximize organizational efficiency and business growth[38]. - The company is enhancing its channel construction to improve marketing capabilities and increase coverage of small and medium enterprises by expanding the number of signed agents[197]. - The company aims to enrich its product lines, enhancing revenue diversification and developing emerging business lines such as application delivery, data security, and security services[195]. - The company is actively expanding its overseas market presence, particularly in Latin America and Southeast Asia, to establish benchmark projects in these regions[198]. - The company plans to enhance its overseas market presence, aiming for overseas sales to become a new growth driver[189].