ABT Networks(SH:688168)2020-04-19 16:00Financial Performance - The company's operating revenue for 2019 was CNY 248,731,759.62, representing a 27.33% increase compared to CNY 195,346,548.76 in 2018[21]. - The net profit attributable to shareholders for 2019 was CNY 73,771,975.96, which is a 19.86% increase from CNY 61,549,570.52 in 2018[21]. - The net assets attributable to shareholders increased by 291.38% to CNY 999,665,911.12 at the end of 2019, compared to CNY 255,418,127.27 at the end of 2018[22]. - Total assets grew by 241.75% to CNY 1,064,997,333.22 at the end of 2019, up from CNY 311,633,724.87 at the end of 2018[22]. - The basic earnings per share for 2019 was CNY 1.77, a 10.63% increase from CNY 1.60 in 2018[23]. - The diluted earnings per share for 2019 also stood at CNY 1.77, consistent with the basic earnings per share[23]. - The company reported a net profit of CNY 51,755,633.77 in the fourth quarter of 2019, significantly contributing to the annual performance[25]. - The company’s weighted average return on equity decreased to 16.04% in 2019 from 26.93% in 2018, a decline of 10.89 percentage points[23]. - The company reported a non-operating income of 4,781,770.79 in 2019, a significant increase from 1,546,322.90 in 2018, representing a growth of approximately 209%[29]. - The government subsidies recognized in the current period amounted to 5,641,517.10 in 2019, compared to 1,742,200.00 in 2018, indicating a year-over-year increase of about 224%[28]. Research and Development - The R&D expenditure as a percentage of operating revenue increased to 15.19% in 2019 from 13.59% in 2018, reflecting a 1.6 percentage point increase[23]. - The company reported a total R&D expenditure of ¥37,773,098.02, which accounts for 15.19% of its operating revenue[78]. - The number of R&D personnel is 109, representing 56.77% of the total workforce[78]. - During the reporting period, the company applied for 64 domestic invention patents and 12 software copyrights[76]. - The company is conducting foundational research in artificial intelligence and machine learning technologies[76]. - The company has filed multiple patents related to its core technologies, including those for the ABT SPOS platform, which is designed for various hardware architectures[65]. - The company has established R&D centers in Beijing and Wuhan, and a network attack and defense research laboratory in Tianjin[89]. Product Development and Innovation - The company launched three major versions of its security gateway products: V4.7, V4.7P, and V5.0, along with two major versions of its security policy visualization products: V1.7 and V1.8[76]. - The company has developed a core security technology platform (ABT SPOS) that supports rapid adaptation across multiple architectures, enhancing its product offerings[65]. - The company’s security management software has been recognized as a key module for major industry solutions, receiving multiple accolades including the "Most Potential Award" at the 2nd Financial Critical Information Infrastructure Protection Forum[56]. - The company’s products are widely adopted by major manufacturers, including Huawei and Xinhua San, showcasing strong market presence[57]. - The company achieved a total revenue of 248.73 million yuan in 2019, representing a year-on-year growth of 27.33%[108]. - The company successfully launched products compatible with domestic high-end chips, quickly capturing the domestic security market[101]. - The company expanded its support for IPv6 networks across multiple versions of its security products, enhancing its application in various industries[100]. Market and Industry Trends - In 2018, the global cybersecurity industry reached a scale of $111.99 billion, with an expected growth to $121.67 billion in 2019, reflecting an annual growth rate of 11.3%[43]. - The domestic cybersecurity industry in China was valued at 51.09 billion yuan in 2018, with a projected increase to 63.13 billion yuan in 2019, marking a growth of 19.2%[43]. - The number of cellular IoT terminal connections in China reached 920 million by Q3 2019, expected to exceed 1.9 billion by 2025[47]. - The demand for security management platform products is expected to grow due to the increasing attack surface from the exponential growth of internet assets during the IPv6 upgrade[59]. - The commercial rollout of 5G has led to an explosive increase in IoT terminal numbers, necessitating enhanced security measures to prevent attacks and data breaches[60]. Corporate Governance and Shareholder Commitments - The profit distribution plan for 2019 is to distribute a cash dividend of 4.5 RMB per 10 shares, totaling approximately 23,031,000 RMB (including tax) to all shareholders[6]. - The company has committed to not transferring or entrusting management of shares held prior to the IPO for 36 months from the listing date[146]. - The company has outlined specific plans for the use of undistributed profits, although details were not disclosed in the report[145]. - The company has established a limit on the annual transfer of shares by its directors and senior management to no more than 25% of their total holdings during their tenure[153]. - The company will ensure that all related party transactions are documented through written contracts or agreements[168]. - The company will take responsibility for any losses caused to the company or other investors due to non-compliance with the commitments made[168]. Financial Management and Investments - The company has invested a total of RMB 1,939.85 million in various projects, with a current investment of RMB 1,939.85 million[81]. - The security strategy project has a total investment of RMB 650 million, with RMB 378.82 million already invested, achieving automated security policy deployment and attack surface calculation[81]. - The company approved a plan to use up to RMB 600 million of temporarily idle raised funds for cash management, ensuring it does not affect the investment project progress or normal operations[186]. - The company has a total of RMB 9 million in principal guaranteed investment with an annualized return of 1.71% and a floating return investment of RMB 10 million with an annualized return of 3.35%[188]. - The company reported a significant increase in cash flow from financing activities, amounting to 660.83 million yuan, a 28,457.14% increase year-on-year[110]. Risk Management - The company has not faced any non-operational fund occupation by controlling shareholders or related parties[8]. - The company has not violated any decision-making procedures for providing guarantees[8]. - The company faced risks related to core component supply chains, particularly with reliance on suppliers like Cavium and Intel[104]. - The company is actively addressing industry risks by increasing investment in product and R&D departments to keep pace with technological advancements[105]. - The COVID-19 pandemic caused delays in the company's Wuhan R&D center, impacting product development timelines[107].