SHENGYI ELECTRONICS CO.(SH:688183)2021-03-25 16:00Financial Performance - The company's operating revenue for 2020 was approximately CNY 3.63 billion, an increase of 17.35% compared to CNY 3.10 billion in 2019[25]. - The net profit attributable to shareholders for 2020 was approximately CNY 439.23 million, a slight decrease of 0.44% from CNY 441.18 million in 2019[25]. - The net cash flow from operating activities reached approximately CNY 838.34 million, representing a significant increase of 219.25% compared to CNY 262.60 million in 2019[25]. - Basic earnings per share for 2020 remained at CNY 0.66, unchanged from 2019, while diluted earnings per share also stayed at CNY 0.66[28]. - The weighted average return on net assets decreased to 24.72% in 2020, down by 3.90 percentage points from 28.62% in 2019[28]. - Operating revenue for the first quarter of 2020 was CNY 771,963,396.95, while the second quarter saw revenue of CNY 1,134,193,619.19[29]. - The net profit attributable to shareholders in the second quarter of 2020 was CNY 189,623,614.56, compared to CNY 107,362,401.89 in the first quarter[29]. - The net cash flow from operating activities in the second quarter of 2020 was CNY 54,695,853.61, significantly lower than CNY 320,559,297.23 in the first quarter[29]. - Non-operating income for 2020 totaled CNY 19,787,651.57, compared to CNY 449,136.87 in 2019[33]. - Operating costs increased by 21.47% year-over-year to CNY 2,641,721,847.76, primarily due to the growth in operating revenue[102]. Research and Development - The company has a strong focus on R&D and is committed to expanding its product offerings in the PCB sector[25]. - Research and development expenses accounted for 4.30% of operating income in 2020, a decrease of 0.30 percentage points from 4.60% in 2019[28]. - The company invested approximately ¥156.20 million in R&D in the current year, representing a 9.70% increase from the previous year[64]. - The R&D personnel count increased to 596, accounting for 12.14% of the total workforce, up from 10.45% in the previous period[77]. - The company has developed 13 core technologies in PCB manufacturing, maintaining a strong competitive edge, and has obtained 150 invention patents as of the end of 2020[56]. - The company has achieved international advanced level in two key technology projects related to 5G PCB manufacturing, which are widely used in 5G communication base stations[57][58]. - The company is collaborating with Guangzhou Haige Communication Group and Tsinghua University on a key national R&D project for 5G technology, currently in implementation[59]. - The company aims to enhance its market competitiveness by developing diverse high-frequency materials for PCB applications, with a focus on 5G technology[73]. - The company has established a comprehensive R&D innovation platform, maintaining a strong focus on technological advancements and customer collaboration[79]. - The company achieved significant progress in various R&D projects, with several completed and others in development, indicating a strong commitment to innovation[68]. Market Position and Strategy - The company ranks 20th in the overall PCB industry and 7th among domestic PCB manufacturers according to CPCA's 2019 report[48]. - The company has established strong brand recognition and market presence in the communication PCB sector through successful certifications with well-known domestic and international enterprises[48]. - The demand for high-frequency and high-speed PCBs is expected to increase with the growth of 5G technology, which requires low dielectric constant and low loss factor materials[51]. - The company is positioned as one of the few capable suppliers of high-end communication PCBs for 5G applications[51]. - The company aims to enhance its market share and ranking through continuous market expansion and product diversification[48]. - The company’s PCB products are essential for the stability and reliability required in communication equipment, which fosters long-term customer relationships[48]. - The global PCB industry is projected to grow at a compound annual growth rate (CAGR) of 4.30% from 2019 to 2024, reaching a market value of $75.846 billion by 2024[52]. - The PCB industry in mainland China is expected to maintain a CAGR of 4.90%, with a total market value of $41.770 billion by 2024[52]. - The company aims to expand its international market presence and strengthen its overseas marketing service network, focusing on communication, cloud computing, IoT, and new energy sectors over the next three years[141]. Governance and Compliance - The company has maintained a consistent governance structure, ensuring the integrity of its financial reporting[11]. - The company has received a standard unqualified audit report from Huaxing Accounting Firm[6]. - The company has not reported any non-operating fund occupation by controlling shareholders or related parties[9]. - The company has established a robust management system and automated processes to improve production efficiency and reduce labor costs[83]. - The company has passed multiple management system certifications, including ISO9001 and IATF16949, reinforcing its commitment to quality and customer satisfaction[82]. - The company will strictly adhere to legal regulations and improve its governance level to ensure sustainable and healthy development[143]. - The company has committed to ensuring independent operation and decision-making for Shengyi Electronics[164]. - The company will strictly adhere to the requirements of the Company Law of the People's Republic of China regarding related party transactions, ensuring fair treatment for all shareholders[164]. Investment and Financial Management - The company plans to distribute a cash dividend of CNY 3.30 per 10 shares to shareholders, pending approval at the annual general meeting[7]. - The company has established a profit distribution policy to enhance investor returns, focusing on reasonable and stable returns for investors[179]. - The company will set up a special account for the raised funds and ensure strict management and effective use of these funds[179]. - The company is committed to improving the protection system for small and medium investors, ensuring their rights to information and participation in decision-making[179]. - The company will not engage in unfair benefit transfers or damage its interests, ensuring accountability for any violations of commitments made[182]. - The company will compensate investors for direct losses incurred due to reliance on the stock price stabilization plan, with the compensation amount to be determined through negotiation or according to regulatory authority determinations[171]. - The company will actively seek feedback from independent directors and public investors to continuously improve its profit distribution policy[179]. Risks and Challenges - The company has outlined potential risks in its future development strategies, which investors should be aware of[5]. - The company faces risks related to technological innovation, including potential loss of core technical personnel and the impact of market competition on profitability[95]. - The company has reported a 100% decrease in long-term borrowings, which were reclassified as current liabilities[131]. - The company will publicly apologize and stop receiving remuneration and dividends until it takes appropriate measures to stabilize the stock price if it fails to fulfill its commitments[191]. - The company is liable for compensation to investors if it causes losses due to non-fulfillment of public commitments[190]. Production and Capacity - The company produced 822,000 square meters of printed circuit boards in 2020, an increase of 1.88% year-over-year[101]. - The company established the Dongguan Hongmei branch to enhance production capacity, focusing on the semi-process drilling of circuit boards, effectively addressing capacity bottlenecks[89]. - The company implemented a comprehensive quality management model, enhancing risk identification and prevention capabilities, ensuring high product quality[88]. - The company initiated the East City Phase IV project to strengthen its competitive edge, with construction starting on September 28, 2020[89]. Shareholder Relations - The company has established a return mechanism for investors, enhancing the transparency of its cash dividend policy to protect the rights of minority investors[145]. - Major shareholders, including Guohong Investment, will not reduce their holdings within two years after the lock-up period ends, and any reduction will comply with relevant laws and regulations[158]. - The company guarantees that any reduction in shares will not be below the price at the time of the initial public offering[158]. - The company will report any planned share reductions to the stock exchange 15 trading days in advance[158].