NSU(SZ:002089)2019-04-29 16:00Financial Performance - The company reported a significant increase in revenue, achieving a total of 1.2 billion RMB for the year, representing a growth of 15% compared to the previous year[13]. - The company's operating revenue for 2018 was ¥759,217,083.41, a decrease of 52.69% compared to ¥1,604,715,291.66 in 2017[18]. - The net profit attributable to shareholders was -¥452,238,132.69, representing a decline of 292.19% from -¥115,311,605.41 in the previous year[18]. - The net cash flow from operating activities was -¥52,012,848.08, a decrease of 129.18% compared to ¥178,253,992.58 in 2017[18]. - The basic and diluted earnings per share were both -¥0.33, a decline of 312.50% from -¥0.08 in 2017[18]. - The total operating revenue for 2018 was ¥759,217,083.41, a decrease of 52.69% compared to ¥1,604,715,291.66 in the previous year[55]. - The communication manufacturing sector contributed ¥490,691,549.21, accounting for 64.63% of total revenue, down 51.96% from ¥1,021,401,081.02[55]. - The LED segment reported a revenue of ¥141,032,363.09, down 54.40% from ¥309,280,404.13 in the previous year[55]. - The total revenue from communication network products decreased by 4.21% to CNY 82,637,412.83 in 2018, compared to CNY 86,270,766.49 in 2017[66]. - The total revenue from system engineering income dropped significantly by 74.05% to CNY 2,063,214.61 in 2018, down from CNY 7,950,194.28 in 2017[66]. User Growth and Market Expansion - User data showed an increase in active users by 20%, reaching a total of 5 million users by the end of 2018[13]. - The company plans to expand its market presence in Southeast Asia, targeting a 10% market share within the next two years[13]. - The company is focusing on expanding its "new energy" and "large communication" business lines, particularly in electric logistics vehicles and communication hardware[27]. - The company has established a strategic layout in the new energy electric vehicle industry, forming a supply chain with "complete vehicles as the leader and batteries as the supporting" structure[40]. - The sales of new energy electric logistics vehicles from the company’s subsidiary, Shaanxi Tongjia, have consistently ranked among the top in the industry, indicating a strong market position[98]. Research and Development - New product development includes the launch of three innovative technology solutions aimed at enhancing user experience, with an investment of 100 million RMB allocated for R&D[13]. - The company’s R&D investment decreased by 30.39% to CNY 37,479,533.94 in 2018, representing 4.94% of total revenue, up from 3.36% in 2017[74]. - The number of R&D personnel increased by 56.41% to 122 in 2018, representing 26.99% of the total workforce[74]. - The company is increasing its investment in technology and R&D to establish competitive advantages in the LED chip sector while implementing strict cost management practices[101]. Strategic Initiatives and Acquisitions - A strategic acquisition of a local tech firm was completed for 200 million RMB, aimed at enhancing technological capabilities and market reach[13]. - The company signed an investment agreement for a lithium carbonate project with the Jiangsu Province Tai Xing Economic Development Zone, aiming for a production capacity of 40,000 tons annually[42]. - Strategic partnerships were formed with several companies in the "new energy" sector to enhance collaboration in sales, operations, and development of core components[43]. - The company has established a merger fund in collaboration with Suzhou Hongrong Investment Co., Ltd. and other partners to enhance its new energy industry chain layout[164]. Risk Management - The company has identified key risks including market competition and regulatory changes, which are detailed in the risk management section of the report[4]. - The company faced significant risks due to policy changes in the new energy vehicle sector, including delayed government subsidies impacting cash flow[96]. - The company is navigating a highly competitive market for new energy vehicles, with many investments driven by policy rather than market demand[97]. - The company’s strategic focus includes addressing the risks associated with market competition and ensuring sustainable growth in the new energy vehicle sector[97]. Financial Policies and Shareholder Returns - No cash dividends will be distributed to shareholders for the fiscal year, as the company aims to reinvest profits into growth initiatives[5]. - The company maintains a stable profit distribution policy, ensuring that cash dividends will not be less than 10% of the distributable profits of the parent company each year[115]. - The company plans to distribute cash dividends annually, with a minimum of 10% of the distributable profits from the parent company for each year from 2018 to 2020[120]. - The decision-making process for profit distribution includes obtaining approval from the supervisory board and shareholders, ensuring transparency and protection of minority shareholders' rights[121]. Operational Efficiency and Internal Controls - The company has implemented a new internal control system to address previously identified deficiencies, ensuring compliance and operational efficiency[4]. - The company has implemented cost control measures at Shaanxi Tongjia, resulting in a continuous decline in unit costs since 2016, enhancing market competitiveness[46]. - The company is focusing on cost control and technology investment to enhance product competitiveness and market share, with a commitment to improving core technology and talent development[98]. Subsidiary Performance and Challenges - The company reported substantial losses in its subsidiaries, with Shenzhen Yisi Software Technology Co., Ltd. posting a net loss of approximately 8.72 million yuan[94]. - Suzhou Xinnajing Optoelectronics Co., Ltd. experienced a net profit decline due to market fluctuations in the LED industry, resulting in a loss of approximately 253.66 million yuan[94]. - The company has made provisions for long-term equity investment impairment due to continuous losses in subsidiaries like Shaanxi Tongjia Automobile Co., Ltd.[94]. - Jiangxi Dibi Ke reported net profits of 38.03 million yuan, 2.56 million yuan, and a net loss of 101.71 million yuan for the years 2016, 2017, and 2018 respectively, resulting in a cumulative net profit loss of 61.11 million yuan, also failing to meet performance commitments[134]. Audit and Compliance - The audit report from Da Xin Accounting Firm for 2018 included a qualified opinion due to unverified financial data from Jiangxi Dibi Ke, impacting the assessment of long-term equity investment value[138]. - The audit report issued by Da Xin Certified Public Accountants for the 2018 financial statements contains a qualified opinion due to insufficient audit evidence regarding the financial status and operating results of Jiangxi Dibi Ke and Shenzhen Yiruan Technology[141]. - The board of directors agrees with the qualified opinion and emphasizes the importance of addressing the issues raised by the auditors[143]. Leasing and Real Estate - The company has a total of 18 leasing agreements with various companies, indicating a strategic approach to utilizing its real estate assets[174]. - The company has a rental income strategy that includes properties leased to technology and medical companies, reflecting its focus on supporting innovation and industry growth[170][173]. - The company has signed multiple leasing contracts for properties in Suzhou, with monthly rents ranging from 9 to 25 RMB per square meter, with lease terms varying from 12 to 96 months[168][170][172].