SQM(SH:688138)2021-04-09 16:00Financial Performance - The company's operating revenue for 2020 was CNY 487.19 million, a 1.57% increase compared to CNY 479.65 million in 2019[23]. - The net profit attributable to shareholders for 2020 was CNY 76.29 million, representing an 8.55% increase from CNY 70.28 million in 2019[23]. - The cash flow from operating activities increased by 82.08% to CNY 186.96 million in 2020, up from CNY 102.69 million in 2019[23]. - Total assets at the end of 2020 reached CNY 1.43 billion, a 7.29% increase from CNY 1.33 billion at the end of 2019[24]. - The basic earnings per share for 2020 was CNY 0.29, a decrease of 14.71% compared to CNY 0.34 in 2019[25]. - The company reported a total revenue of 9,621,504.72 RMB for the year, with a significant increase compared to the previous year's revenue of 6,987,334.64 RMB, reflecting a growth of approximately 38.5%[30]. - The company achieved a total revenue of 3,349.00 million RMB, with a year-on-year increase of 2,419.95 million RMB and a gross profit of 3,965.17 million RMB[76]. - In 2020, the company's main business revenue was 470.80 million yuan, reflecting a growth of 1.80% compared to the previous year, despite the impact of the COVID-19 pandemic[88]. Dividend Policy - The company plans to distribute a cash dividend of RMB 0.9 per 10 shares, totaling RMB 24,012,000.00 based on a total share capital of 266,800,000 shares as of December 31, 2020[7]. - The company has maintained a consistent cash dividend policy, prioritizing cash dividends while considering the long-term interests of shareholders[151]. - The cash dividend distribution plan is subject to approval at the company's annual general meeting[151]. - The company has committed to maintaining the stability and continuity of its profit distribution policy[151]. - The cash dividend policy is designed to ensure reasonable returns to investors without compromising their legal rights[151]. - The company commits to a minimum annual dividend payout ratio of 10% of the net profit attributable to the parent company, contingent on no major investment plans or significant capital expenditures in the next twelve months[162]. Research and Development - Research and development expenses accounted for 4.97% of operating revenue in 2020, an increase of 0.72 percentage points from 4.25% in 2019[25]. - The company achieved a total R&D investment of ¥24,199,459.15, representing an 18.67% increase compared to the previous year[71]. - R&D investment accounted for 4.97% of total operating revenue, up from 4.25% in the previous year, indicating a focus on innovation[71]. - The company is actively engaged in research and development of new technologies, including methods for producing high-precision masks for various display technologies[64]. - The company has established a strong patent portfolio, including 3 invention patents related to the manufacturing of LCD masks, enhancing its market position[64]. - The company has received 10 new intellectual property applications during the reporting period, including 6 invention patents and 2 utility model patents[69]. Market Position and Industry Outlook - The company specializes in the research, design, production, and sales of photomasks, which are critical tools in the manufacturing processes of downstream industries such as flat panel displays and semiconductor chips[34]. - The company ranks sixth globally in sales of flat panel display masks according to Omdia's 2019 analysis, indicating a strong market position[56]. - The company is positioned in a rapidly growing industry, with China's share of global TFT-LCD panel production expected to rise from 18% in 2014 to 73% by 2024[43]. - The demand for masks in China's flat panel display industry increased from 26% of the global market in 2016 to 48% in 2019, and is projected to reach 56% by 2024[46]. - The global semiconductor market sales reached $439 billion in 2020, with a year-on-year growth of 6.5%, while China's integrated circuit industry sales were 884.8 billion CNY, growing by 17%[49]. - The company aims to become a leading player in the photomask industry within 2-3 years, targeting the top market share in domestic flat panel display photomasks and striving for third place globally[141]. Corporate Governance and Compliance - The company does not have any special arrangements for corporate governance[10]. - The board of directors and senior management confirm the accuracy and completeness of the annual report[4]. - The company has received a standard unqualified audit report from Tianjian Accounting Firm[6]. - There are no non-operating fund occupations by controlling shareholders or related parties[9]. - The company has not violated decision-making procedures for external guarantees[10]. - The company has established a robust internal control system to protect the rights of shareholders and creditors[195]. Risks and Challenges - The company faces risks related to the competitiveness of its products and technology in the international market, with a lower market share in the domestic mid-to-high-end mask market compared to international competitors[93]. - The company relies heavily on imported raw materials and equipment, with a high concentration of suppliers, which poses risks if there are supply shortages or price increases[95]. - The ongoing COVID-19 pandemic has introduced uncertainties affecting supply chains and project timelines, potentially impacting operational performance[102]. - The company faces risks from macroeconomic fluctuations and potential export restrictions from key raw material suppliers in Japan and South Korea[101]. - The mask market is experiencing increased competition due to the rapid development of the flat panel display and semiconductor industries, which may impact the company's performance[98]. Strategic Initiatives - The company is considering strategic acquisitions to enhance its product portfolio, with a budget of 500 million earmarked for potential deals[158]. - The company plans to expand its market presence through new product launches and technology advancements[124]. - The company is focusing on strategic acquisitions to enhance its competitive position in the market[124]. - The company aims to improve operational efficiency, targeting a 5% reduction in costs over the next fiscal year[158]. - The company is investing heavily in R&D, allocating 200 million towards the development of new technologies and products[158].