电科网安(002268) - 2022 Q4 - 年度财报

Important Notices, Table of Contents, and Definitions Important Notices The company's board and management affirm the report's accuracy, with an unqualified audit opinion issued that includes an emphasis of matter paragraph - Dahin Certified Public Accountants (Special General Partnership) issued an unqualified audit report with an emphasis of matter paragraph, concerning litigation over a property purchase by a wholly-owned subsidiary[28][241] - The proposed 2022 profit distribution plan is a cash dividend of RMB 0.6 (tax included) per 10 shares, based on a total of 845,876,603 shares, with no bonus shares or capitalization issue[29] Definitions This section defines key terms used in the report, such as the company, its affiliates, and regulatory bodies Key Definitions | Term | Definition | | :--- | :--- | | The Company, Our Company, CECCyber | CETC Network Security Technology Inc | | Controlling Shareholder, CETC Cyberspace Security | China Electronics Technology Network Information Security Co., Ltd | | Actual Controller, CETC | China Electronics Technology Group Corporation | | Reporting Period | January 1, 2022 to December 31, 2022 | Company Profile and Key Financial Indicators Company Information This section provides the company's basic registration, listing, contact information, and information disclosure channels Company Basic Information | Item | Content | | :--- | :--- | | Stock Ticker | CECCyber | | Stock Code | 002268 | | Listing Exchange | Shenzhen Stock Exchange | | Legal Representative | Meng Ling | | Registered Address | No. 333 Yunhua Road, High-tech Zone, Chengdu | Key Accounting Data and Financial Indicators In 2022, the company's revenue grew 16.35% to RMB 3.44 billion, while net profit attributable to shareholders increased by 21.99% to RMB 307 million Key Financial Data for 2022 | Indicator | 2022 | 2021 (Restated) | YoY Change | | :--- | :--- | :--- | :--- | | Operating Revenue (RMB) | 3,438,032,692.66 | 2,954,810,984.81 | 16.35% | | Net Profit Attributable to Shareholders (RMB) | 306,636,944.06 | 251,365,338.53 | 21.99% | | Net Profit Attributable to Shareholders (Non-recurring items deducted) (RMB) | 263,372,647.23 | 183,151,646.32 | 43.80% | | Net Cash Flow from Operating Activities (RMB) | 339,238,216.43 | 674,259,021.81 | -49.69% | | Basic Earnings Per Share (RMB/Share) | 0.3624 | 0.2970 | 22.02% | | Weighted Average Return on Equity | 5.90% | 5.09% | Up 0.81 ppt | | Total Assets (RMB) | 7,566,748,883.08 | 7,133,829,615.67 | 6.07% | | Net Assets Attributable to Shareholders (RMB) | 5,234,864,248.23 | 5,072,603,382.42 | 3.20% | Quarterly Key Financial Indicators for 2022 (Unit: RMB) | Indicator | First Quarter | Second Quarter | Third Quarter | Fourth Quarter | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue | 651,331,607.37 | 701,730,299.60 | 705,800,771.06 | 1,379,170,014.63 | | Net Profit Attributable to Shareholders | -36,057,117.34 | 50,645,581.88 | 34,992,295.98 | 257,056,183.54 | | Net Cash Flow from Operating Activities | -603,489,966.19 | -31,402,577.91 | 152,141,564.15 | 821,989,196.38 | - During the reporting period, total non-recurring gains and losses amounted to RMB 43,264,296.83, primarily from government grants and fair value changes in financial assets[57][22] Management Discussion and Analysis Industry Overview China's cybersecurity industry entered a recovery period in 2022, driven by policy, technology, and capital, with data security becoming a key focus - National policies on cybersecurity, cryptography, and data security have created new growth opportunities and sustained demand from compliance requirements[24] - Cybersecurity firms are actively investing in new technologies, with data security and industrial internet security emerging as key R&D directions[24] - Capital market activity in the cybersecurity sector remained robust in 2022, with approximately 110 financing events in the primary market[85] Principal Business Activities The company focuses on data security, leveraging its core cryptographic capabilities to provide comprehensive solutions across the entire data lifecycle - The company's core business is built on cryptography, offering a range of products from chips to systems for industries like finance and government[48][25] - A comprehensive suite of network security products provides protection for network boundaries, endpoints, identity, and security management[49][62] - The company focuses on data security compliance, offering products for data classification, desensitization, and auditing[64][65] - The "MiLiFang" data security circulation system was launched, utilizing privacy-preserving computation to enable secure data sharing[52][86] - The company is exploring a "Platform + Service" model, developing SaaS platforms for data security compliance and cybersecurity operations[54][67] Core Competitiveness Analysis The company's core strengths lie in its state-owned enterprise brand, advanced technical capabilities, integrated service delivery, and growing business scale - As a core entity of CETC's cybersecurity segment, the company benefits from its state-owned enterprise background, earning trust in critical sectors[87] - The company possesses deep expertise in cryptography, including strong capabilities in algorithm research, chip design, and platform-based services[55][69][79] - A nationwide, integrated technical consulting and grid-based delivery system ensures strong solution and service implementation capabilities[290] - The company maintains a stable, high-quality talent pool, supported by a long-term restricted stock incentive plan[310] Analysis of Main Business In 2022, revenue grew 16.35%, driven by strong performance in the cryptography, network security, and data security segments, with data security revenue surging 135.40% Revenue Composition (by Product) | Product Category | 2022 Revenue (RMB) | % of Total Revenue | YoY Change | | :--- | :--- | :--- | :--- | | Cryptography | 1,335,149,166.70 | 38.83% | 22.97% | | Network Security | 1,883,465,466.47 | 54.78% | 6.06% | | Data Security | 219,418,059.49 | 6.38% | 135.40% | Revenue Composition (by Region) | Region | 2022 Revenue (RMB) | % of Total Revenue | YoY Change | | :--- | :--- | :--- | :--- | | Southwest | 1,133,265,607.00 | 32.96% | 15.08% | | North China | 1,091,220,395.10 | 31.74% | 17.78% | | East China | 497,886,760.81 | 14.48% | 61.62% | Period Expenses (Unit: RMB) | Item | 2022 | 2021 | YoY Change | | :--- | :--- | :--- | :--- | | Selling Expenses | 334,265,782.50 | 335,021,837.82 | -0.23% | | Administrative Expenses | 179,999,656.25 | 178,112,547.45 | 1.06% | | Financial Expenses | -16,479,546.26 | -11,437,052.21 | -44.09% | | R&D Expenses | 377,252,555.97 | 290,770,403.64 | 29.74% | - The company's customers are primarily government agencies and large state-owned enterprises, leading to seasonal sales patterns with a peak in the fourth quarter[320] - Net cash flow from operating activities decreased by 49.69%, mainly due to the timing of collections from major projects at the end of the previous year[269] Analysis of Assets and Liabilities As of year-end, total assets reached RMB 7.57 billion with no major structural changes, though RMB 1.11 billion in assets were restricted due to litigation Major Asset Composition (Unit: RMB) | Item | Year-end 2022 Amount | % of Total Assets | | :--- | :--- | :--- | | Cash and Cash Equivalents | 2,111,850,455.98 | 27.91% | | Accounts Receivable | 1,046,249,783.75 | 13.83% | | Construction in Progress | 1,095,755,464.68 | 14.48% | | Inventories | 656,553,721.05 | 8.68% | - As of the end of the reporting period, RMB 1,105,785,012.11 in assets were restricted, of which RMB 1,095,230,024.75 was construction in progress affected by litigation[275] Investment Analysis The company had no major investments during the period, while the benefits of previously raised funds were below expectations due to external factors and litigation - Of the RMB 2.66 billion raised in 2017, RMB 2.00 billion has been invested, with RMB 0.66 billion remaining unused as of year-end 2022[359][341] - The returns on investment projects did not meet expectations due to macroeconomic changes, longer R&D cycles, and the seizure of a key property asset[361][362] - The acquisition of Westone (Guangzhou) Information Security Technology Co, Ltd under common control contributed RMB 9.57 million to the company's net profit[364][347] Future Outlook The company aims to be a data intelligence security service provider with cryptography at its core, focusing on cryptography, network security, and data security businesses - The company's strategic positioning is a "data intelligence security service provider with cryptography at its core", focusing on ubiquitous cryptography and intelligent defense[367] - Future development will focus on three key areas: strengthening critical infrastructure protection with cryptography, leading in network security services, and building a top brand in data security[388] - The 2023 business plan includes deepening the integration of cryptography in key industries and vigorously expanding the data security market[391] - Key risks include intensified market competition, technological disruption, talent shortages, and financial risks associated with large accounts receivable[394] Corporate Governance Overview of Corporate Governance The company adheres to regulatory requirements, continuously improving its governance structure and internal controls, and maintains full operational independence - The company's actual governance practices are in compliance with the regulations for listed companies issued by the China Securities Regulatory Commission[376][424] - The company is fully independent from its controlling shareholder and actual controller in terms of business, personnel, assets, organization, and finance[420][402] Directors, Supervisors, and Senior Management This section details the status of directors, supervisors, and senior management, including changes in roles and compensation during the reporting period - During the reporting period, directors He Song and Chen Xin, who also served as Chairmen, resigned due to work-related reasons[406][408] 2022 Compensation for Selected Senior Management (Pre-tax, Unit: 10,000 RMB) | Name | Position | Total Compensation | | :--- | :--- | :--- | | Zhong Kai | Director, General Manager (Resigned) | 113.44 | | Wei Hongkuan | Deputy General Manager | 92.65 | | Zhou Jun | Deputy General Manager | 81.66 | | Liu Zhihui | Deputy GM, Board Secretary, CFO | 72.4 | Employee Information As of year-end, the company had 2,901 employees, with technical staff comprising the largest group, and over 80% holding a bachelor's degree or higher Employee Composition by Profession | Professional Category | Number of People | | :--- | :--- | | Technical Staff | 2,121 | | Sales Staff | 286 | | Production Staff | 58 | | Other | 536 | | Total | 2,901 | Employee Composition by Education Level | Education Level | Number of People | | :--- | :--- | | Doctorate | 19 | | Master's | 570 | | Bachelor's | 1,750 | | College and Below | 562 | | Total | 2,901 | Equity Incentive Plan The company continued its restricted stock incentive plan, repurchasing and canceling shares from ineligible participants while unlocking the first tranche for eligible employees - In April 2022, the company approved the repurchase and cancellation of 418,000 restricted shares from 11 ineligible participants in the initial incentive plan[455] - On December 30, 2022, the board confirmed that the conditions for the first vesting period were met, allowing 2,963,270 shares to become tradable[501] Environmental and Social Responsibility Social Responsibility The company actively fulfills its social responsibilities, is not a major pollutant, and engages in targeted poverty alleviation and community service - The company and its subsidiaries are not classified as key polluting units and promote environmental protection and low-carbon office practices[490][511] - The company has actively participated in social welfare, conducting targeted poverty alleviation for six consecutive years and organizing volunteer service activities[493][333] Significant Matters Fulfillment of Commitments The company and its related parties strictly fulfilled all commitments during the reporting period, including performance targets for an acquired subsidiary - The acquired subsidiary, Westone (Guangzhou) Information Security Technology Co, Ltd, achieved a net profit of RMB 9.74 million, exceeding its performance commitment of RMB 9.20 million[538][539] - Commitments from the controlling shareholder and actual controller regarding the avoidance of horizontal competition and regulation of related-party transactions were strictly fulfilled[354] Explanation of Non-Standard Audit Report The board addressed the emphasis of matter paragraph in the audit report, which relates to uncertainty surrounding a property asset seized amid developer bankruptcy - The audit report's emphasis of matter concerns a property purchased by the subsidiary Beijing Net-Security, which was seized due to the developer's bankruptcy, creating uncertainty over the resolution plan[543][522] - As of December 31, 2022, the property had a book value of RMB 1.16 billion, with a cumulative impairment provision of RMB 67.87 million[524] - The Board of Directors, Board of Supervisors, and independent directors all agreed with the audit report, stating it objectively reflects the company's situation[525][527][547] Major Litigation and Arbitration The company's major litigation involves a property purchased by its subsidiary, with legal proceedings ongoing due to the developer's bankruptcy - The core litigation is an enforcement objection lawsuit filed by the subsidiary Beijing Net-Security regarding the seized property, which is currently suspended pending further developments[568][570] Major Related-Party Transactions The company engaged in routine operational transactions with related parties under the same ultimate controller, primarily involving the sale and purchase of goods and services Key Related-Party Sales and Purchases | Related Party | Transaction Content | 2022 Amount (RMB) | | :--- | :--- | :--- | | The 30th Research Institute of CETC | Sales of goods, provision of services | 533,248,309.87 | | The 30th Research Institute of CETC | Purchase of goods, receipt of services | 199,420,462.34 | | CETC Cyberspace Security Co, Ltd | Purchase of goods, receipt of services | 48,616,228.47 | - The company held a year-end deposit balance of RMB 1.92 billion and had a total credit line of RMB 0.52 billion with the related-party CETC Finance Company[593][576] Changes in Share Capital and Shareholders Changes in Share Capital The company's total share capital decreased slightly due to the repurchase and cancellation of 418,000 restricted shares from ineligible incentive plan participants - During the reporting period, the company's total share capital decreased by 418,000 shares due to the repurchase and cancellation of restricted stock, resulting in a year-end total of 845,876,603 shares[585] - The share change was due to the cancellation of unvested restricted stock held by 11 incentive plan participants who were no longer eligible[602][587] Shareholders and Actual Controller As of year-end, the company had 63,639 shareholders, with CETC Cyberspace Security Co, Ltd as the controlling shareholder and CETC as the actual controller Top Five Shareholders | Shareholder Name | Nature | Shareholding Ratio | Year-end Shares Held | | :--- | :--- | :--- | :--- | | CETC Cyberspace Security Co, Ltd | State-owned legal entity | 32.95% | 278,750,040 | | HKSCC NOMINEES LIMITED | Foreign legal entity | 2.88% | 24,322,720 | | Nuoan Growth Hybrid Securities Investment Fund | Other | 2.35% | 19,860,821 | | CETC Investment Holdings Co, Ltd | State-owned legal entity | 2.18% | 18,407,495 | | Huashang Smart Life Flexible Allocation Hybrid Fund | Other | 1.58% | 13,374,612 | - The company's controlling shareholder is CETC Cyberspace Security Co, Ltd, and the actual controller is China Electronics Technology Group Corporation (CETC), with no changes during the period[607][629][630] Information on Preferred Shares No Preferred Shares The company had no preferred shares during the reporting period - The company had no preferred shares during the reporting period[614] Information on Bonds No Bonds The company had no bonds during the reporting period - The company had no bonds during the reporting period[616] Financial Report Audit Report Dahin CPA issued an unqualified audit opinion with an emphasis of matter paragraph related to litigation over a subsidiary's property purchase - The audit opinion was an unqualified opinion with an emphasis of matter paragraph, highlighting uncertainty related to a property seized due to developer litigation[618][660] - Key audit matters included: - Revenue Recognition: Due to the inherent risk of management override as revenue is a key performance indicator - Provision for Bad Debts on Accounts Receivable: Due to the significant management judgment involved in estimating provisions for the high balance of receivables[662][664] Financial Statements This section presents the company's consolidated and parent company balance sheets, income statements, cash flow statements, and statements of changes in equity for 2022 Consolidated Balance Sheet Key Items from the Consolidated Balance Sheet (Unit: RMB) | Item | 2022-12-31 | 2021-12-31 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | 2,111,850,455.98 | 2,696,303,750.91 | | Accounts receivable | 1,046,249,783.75 | 795,641,310.94 | | Inventories | 656,553,721.05 | 972,107,109.46 | | Total Assets | 7,566,748,883.08 | 7,133,829,615.67 | | Liabilities and Equity | | | | Accounts payable | 1,164,491,286.26 | 1,001,968,370.48 | | Contract liabilities | 489,555,559.20 | 687,128,466.06 | | Total Liabilities | 2,317,898,940.87 | 2,041,629,345.49 | | Equity attributable to parent company | 5,234,864,248.23 | 5,072,603,382.42 | | Total Equity | 5,248,849,942.21 | 5,092,200,270.18 | Consolidated Income Statement Key Items from the Consolidated Income Statement (Unit: RMB) | Item | 2022 | 2021 | | :--- | :--- | :--- | | Operating Revenue | 3,438,032,692.66 | 2,954,810,984.81 | | Cost of Goods Sold | 2,177,020,426.49 | 1,862,879,290.49 | | R&D Expenses | 377,252,555.97 | 290,770,403.64 | | Operating Profit | 324,538,478.93 | 252,597,171.42 | | Total Profit | 328,090,511.33 | 258,466,648.43 | | Net Profit | 307,763,320.65 | 252,683,103.69 | | Net Profit Attributable to Parent Company | 306,636,944.06 | 251,365,338.53 | Consolidated Cash Flow Statement Key Items from the Consolidated Cash Flow Statement (Unit: RMB) | Item | 2022 | 2021 | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 339,238,216.43 | 674,259,021.81 | | Net Cash Flow from Investing Activities | -777,790,650.96 | -61,302,596.62 | | Net Cash Flow from Financing Activities | -140,627,579.74 | 62,182,091.94 | | Net Increase in Cash and Cash Equivalents | -579,180,014.27 | 675,138,517.13 | Notes to the Financial Statements The notes detail the company's accounting policies, tax status, and specific information on financial statement items, including revenue recognition and related-party transactions - Revenue from product sales is recognized upon customer acceptance, while revenue from system integration and services is recognized based on the percentage of completion[197] - The company and several subsidiaries are certified as High-Tech Enterprises, qualifying for a preferential corporate income tax rate of 15%[251] - During the period, the company acquired 100% of Westone (Guangzhou) Information Security Technology Co, Ltd, a company under common control, and consolidated its financials[821][549] - Total expenses recognized for equity-settled share-based payments during the period amounted to RMB 12,980,427.66[1040]