LEO(SZ:002131)2021-04-29 16:00Financial Performance - The company's operating revenue for 2020 was approximately ¥15.55 billion, an increase of 10.80% compared to ¥14.03 billion in 2019[26]. - The net profit attributable to shareholders for 2020 was approximately ¥4.77 billion, a significant increase of 1451.47% from ¥307.61 million in 2019[26]. - The net profit attributable to shareholders after deducting non-recurring gains and losses was approximately ¥283.46 million, up 127.82% from ¥124.42 million in 2019[26]. - The company's total assets at the end of 2020 were approximately ¥19.26 billion, representing a 44.55% increase from ¥13.32 billion at the end of 2019[29]. - The net assets attributable to shareholders at the end of 2020 were approximately ¥12.98 billion, a 59.57% increase from ¥8.13 billion at the end of 2019[29]. - The basic earnings per share for 2020 was ¥0.71, a 1320.00% increase from ¥0.05 in 2019[29]. - The weighted average return on equity for 2020 was 45.11%, an increase of 41.12 percentage points from 3.99% in 2019[29]. - The company reported a significant increase in net profit in the second half of 2020, primarily due to the fair value changes from its investment in Li Auto after its listing on NASDAQ[32]. - The company reported a net cash flow from operating activities of approximately ¥464.18 million in 2020, a decrease of 47.10% from ¥877.48 million in 2019[26]. - The company achieved operating revenue of 1,554,786.79 million RMB, a year-on-year increase of 10.80%[81]. - The net profit attributable to shareholders reached 477,247.55 million RMB, a significant increase of 1,451.47% year-on-year, with a net profit excluding non-recurring gains and losses of 28,346.21 million RMB, up 127.82%[81]. Dividend Distribution - The total share capital as of December 31, 2020, is 6,754,804,205 shares, with 45,779,220 shares excluded from profit distribution due to performance compensation obligations, resulting in a base of 6,709,024,985 shares for dividend distribution[9]. - The proposed cash dividend is 0.10 RMB per 10 shares (including tax) for all shareholders[9]. - The company reported a cash dividend of 0.10 CNY per share for 2020, totaling 67,090,249.85 CNY, which is 1.41% of the net profit attributable to shareholders[193]. - In 2019, the cash dividend was 0.06 CNY per share, amounting to 40,528,825.23 CNY, representing 13.18% of the net profit attributable to shareholders[194]. - The company did not distribute any cash dividends in 2018, and the net profit for that year was negative[194]. Business Operations and Strategy - The company has established a digital marketing strategy that encompasses a complete service chain, including strategy formulation, content creation, media placement, and performance monitoring[15]. - The company is involved in the production of micro and small pumps, which are essential for various applications, including municipal water supply and industrial wastewater treatment[15]. - The company's mechanical manufacturing business includes the research, development, manufacturing, and sales of pumps and garden machinery, with three major production bases established in China[41]. - The company has expanded its business into various sectors, including digital marketing and industrial pumps, through multiple acquisitions since its listing[24]. - The company has built a robust international marketing network, collaborating with major local distributors and international retail chains, enhancing its global presence[72]. - The company has integrated customer resources from its subsidiaries, enabling cross-marketing and broader customer coverage[62]. - The company has developed a unique 1+N service model in social e-commerce, combining live streaming and short video content with digital media applications[59]. - The company has established 15 live streaming rooms to enhance its influencer incubation system, further driving its marketing capabilities[59]. - The company aims to strengthen its investment in the new energy vehicle industry chain, leveraging returns from its investment segment to support its core businesses[103]. Market Trends and Industry Insights - In 2020, China's internet advertising revenue reached approximately RMB 497.16 billion, a year-on-year increase of 13.85%[42]. - The short video market in China reached a scale of RMB 140.83 billion in 2020, with expectations to approach RMB 200 billion in 2021, reflecting a high growth trend[43]. - The company ranked 3rd in the 2020 annual digital marketing company rankings published by Internet Weekly[47]. - The company's industrial pump products are positioned as a leading brand in the domestic market, benefiting from the government's investment in major water conservancy projects totaling RMB 1.29 trillion from 2020 to 2022[52]. - The digital marketing segment's revenue grew by 12.36% year-on-year, benefiting from a strong foundation laid in 2019[82]. - In 2020, the advertising business for the Toutiao platform grew nearly 20% year-over-year, while the Kuaishou advertising business surged by approximately 200%[59]. Risks and Challenges - The company emphasizes the importance of risk awareness regarding future plans and development strategies, indicating potential risks in the upcoming outlook[7]. - The company faces market volatility risks due to its reliance on exports and the uncertain global economic environment[181]. - The company faces risks related to raw material price fluctuations, which significantly impact operating costs and overall performance[182]. - Labor shortages have led to rising labor costs, posing a risk to the company's ability to expand operations[183]. - Changes in export tax rebate rates, which were 9%, 10%, and 13% in 2020, can directly affect product sales gross margin and competitiveness[184]. - The digital marketing industry is highly competitive, with numerous players vying for market share, which may impact the performance of the newly acquired companies[189]. - Regulatory risks exist as the digital marketing sector may face increased scrutiny and higher entry barriers from government authorities[190]. Investments and Financial Management - The company has a commitment to ensuring the accuracy and completeness of its financial reports, with key personnel affirming the integrity of the annual report[6]. - The company has recognized investment income of CNY 32.61 million, accounting for 0.52% of total profit, primarily from equity investments in joint ventures[129]. - Fair value changes in investments contributed CNY 5.95 billion, representing 94.03% of total profit, mainly from investments in Ideal Automotive[129]. - The company has invested a total of 3,500 million CNY in Shenzhen Qingsong Shengrui Investment Partnership, holding a 28% stake[143]. - The company has fully invested 1,650 million CNY in Shenzhen Qingsong Boan Investment Partnership, with a holding ratio of 70.18%[143]. - The company has invested 20,000 million CNY in Nanjing Qingsong Medical Health Industry Investment Partnership, holding a 39.02% stake, with 1.2 billion CNY already contributed[143]. - The company has fully invested 35,000 million CNY in Zhejiang Mintai Commercial Bank, holding a 2.88% stake[143]. - The company reported a fair value change gain of 6,005,326,291.06 CNY from its investment in Ideal Automotive, with an initial investment cost of 450,000,000 CNY[146]. Terminated Projects - The company has terminated the "Digital Marketing Cloud Platform Construction Project" due to changes in market conditions and reduced reliance on data centers, resulting in a total investment of 94,100,000 RMB[152]. - The "Big Data Processing and Application Center Construction Project" was also terminated, with a total investment of 35,386,000 RMB, primarily due to increased compliance requirements for user data collection[152]. - The "Digital Advertising Trading Platform Construction Project" was halted, with an investment of 7,494,000 RMB, due to market demand shrinkage[152]. - The "Pump (Motor) Intelligent Manufacturing Base Technology Transformation Project" was terminated, with an investment of 62,068,000 RMB, due to the procurement of cost-effective domestic equipment[155]. - The total committed investment for the terminated projects amounted to 219,754,750 RMB, with 35,779,380 RMB actually invested[152]. - The company has permanently supplemented its working capital with the remaining funds from the terminated projects, totaling 180,796,090 RMB[160]. Corporate Governance and Leadership - The company’s legal representative is Wang Xiangrong, highlighting the leadership structure[19]. - The company has fulfilled commitments made by actual controllers, shareholders, and related parties during the reporting period, with ongoing performance in certain areas[198]. - The performance compensation arbitration case has been ruled, and the company will expedite the process for relevant parties to advance performance compensation matters[198].