SM Micro(SH:688699)2022-08-26 16:00Share Capital and Governance - The company plans to increase its total share capital from 74,368,000 shares to 110,064,640 shares by distributing 4.8 additional shares for every 10 shares held, resulting in a total increase of 35,696,640 shares[6]. - The company has confirmed that there are no non-operating fund occupations by controlling shareholders or related parties[8]. - The company has confirmed that there are no special arrangements for corporate governance[8]. - The company has not reported any violations of decision-making procedures for external guarantees[8]. - The company has ensured that all board members can guarantee the authenticity, accuracy, and completeness of the semi-annual report[8]. Financial Performance - The company's operating revenue for the first half of 2022 was RMB 398.38 million, a decrease of 35.59% compared to the same period last year[20]. - The net profit attributable to shareholders for the first half of 2022 was RMB 92.17 million, down 69.54% year-on-year[20]. - The basic earnings per share for the first half of 2022 was RMB 1.24, a decline of 69.53% compared to the previous year[20]. - The company's cash flow from operating activities decreased by 120.45%, resulting in a net outflow of RMB 53.72 million[21]. - The weighted average return on net assets for the first half of 2022 was 5.40%, a decrease of 19.21 percentage points from the previous year[20]. - The company's net assets attributable to shareholders decreased by 4.77% to RMB 1.61 billion compared to the end of the previous year[20]. Research and Development - Research and development expenses for the first half of 2022 amounted to RMB 58.94 million, an increase of 113.92%, representing 14.80% of operating revenue[21]. - The company is focused on enhancing its core competitiveness through increased investment in research and development and expanding its R&D team[22]. - The company has applied for a total of 23 new patents during the reporting period, with 11 patents granted, bringing the cumulative total to 661 applications and 498 granted[39]. - The company has been recognized as a national-level "specialized and innovative" small giant enterprise in 2020[37]. - The company is actively developing new technologies, including a method to enhance grayscale levels in LED displays without increasing clock frequency[37]. Market and Industry Trends - The decline in revenue was attributed to multiple factors, including strict pandemic control measures and geopolitical instability affecting market demand[22]. - In the first half of 2022, China's integrated circuit imports totaled approximately 1.35 trillion RMB, a year-on-year increase of 5.5%[27]. - China's integrated circuit exports amounted to 499.3 billion RMB, reflecting a year-on-year growth of 16.4%[27]. - The total production of integrated circuits in China for the first half of 2022 was 166.1 billion units, representing a year-on-year decline of 6.3%, marking the first negative growth since 2009[27]. - The global semiconductor market is projected to achieve a year-on-year growth rate of 16.3% in 2022, with logic circuits expected to grow by 20.8%, analog circuits by 19.2%, and memory by 18.7%[27]. Environmental Responsibility - The company has not faced any environmental penalties during the reporting period and adheres to environmental regulations in its operations[79]. - The company ensures that wastewater generated is treated and meets the A-level standards of the "Discharge Standards for Pollutants from Urban Wastewater Treatment Plants" (GB/T31962-2015) before being discharged into the municipal sewage system[80]. - The company has implemented noise pollution prevention measures to ensure that factory boundary noise meets the Class 2 functional area standards of the "Industrial Enterprise Boundary Environmental Noise Emission Standards" (GB12348-2008)[81]. - The company is committed to environmental responsibility by utilizing LED lighting products, which are energy-efficient and contribute to energy conservation and emission reduction efforts[82]. Shareholder Commitments and Regulations - The company has a commitment to lock-up periods for shareholders, with specific durations ranging from 12 to 36 months for various stakeholders[85]. - The company commits not to transfer or manage shares held prior to the IPO for 12 months post-listing, ensuring compliance with relevant regulations[90]. - The company will adhere to the legal responsibilities associated with the share lock-up commitments, ensuring no losses to stakeholders due to non-compliance[92]. - The company will ensure that any share reductions post-lock-up comply with the Company Law and Securities Law[93]. - The company guarantees that there will be no fraudulent issuance of shares during the IPO process, with a buyback procedure initiated if conditions are not met[100]. Financial Management and Audit - The company has appointed Rongcheng Accounting Firm as its auditing institution for the 2022 fiscal year[115]. - The financial statements were audited and found to fairly reflect the company's financial position as of June 30, 2022[143]. - The company has not made any significant changes to the use of raised funds during the reporting period[123]. - The company has allocated RMB 215.37 million of idle raised funds for cash management, with a remaining balance of RMB 215.37 million as of June 30, 2022[126]. - The company has established stable partnerships with major wafer manufacturers, ensuring product supply capability and competitiveness[52]. Operational Challenges - The ongoing global pandemic and macroeconomic fluctuations have led to a decline in consumer electronics market demand, affecting both sales volume and pricing[65]. - The global wafer foundry market remains tight, with several foundries issuing price increase notices, which may adversely affect the company's operating performance if wafer prices rise significantly[61]. - The company faces risks related to the fluctuation of raw material and packaging processing prices, which directly impact gross margin and net profit[59]. - The financial expenses increased by 193.67% due to increased foreign exchange losses[65]. Future Outlook - The company plans to continue investing in R&D to drive future growth and innovation[167]. - The company is expanding into new markets, particularly in automotive electronics and ultra-high-definition displays, driven by trends in 5G and smart technology[54]. - The company is committed to developing innovative products that meet new European standards, enhancing energy efficiency and environmental sustainability[44].