Join-Cheer(SZ:002279)2019-04-29 16:00Financial Performance - The company's operating revenue for 2018 was ¥2,720,235,569.39, representing a 36.55% increase compared to ¥1,992,176,981.00 in 2017[31]. - The net profit attributable to shareholders was a loss of ¥841,464,317.58, a significant decline from a profit of ¥306,943,384.51 in the previous year[31]. - The net cash flow from operating activities increased by 245.75% to ¥442,286,465.26, up from ¥127,919,925.53 in 2017[31]. - Total assets decreased by 30.39% to ¥3,277,058,167.32 at the end of 2018, down from ¥4,707,752,786.27 at the end of 2017[31]. - The net assets attributable to shareholders fell by 56.63% to ¥1,133,828,543.29, compared to ¥2,614,056,562.07 in 2017[31]. - The company reported a basic earnings per share of -¥1.1838, down from ¥0.4351 in 2017[31]. - The weighted average return on equity was -49.49%, a decrease of 62.35% from 12.86% in the previous year[31]. - The total cash dividends distributed over the past three years have been CNY 37,551,270.30, with a focus on maintaining shareholder value despite recent losses[141]. Revenue Breakdown - The internet business segment generated ¥1,691,564,483.47, accounting for 62.18% of total revenue, with a year-on-year growth of 39.02%[74]. - The management software business generated revenue of CNY 102,025.15 million, with a year-on-year growth of 33.13%[49]. - The digital communication business reported revenue of CNY 165,911.71 million, reflecting a year-on-year increase of 39.52%[49]. - The electronic government business earned CNY 71,770.37 million, marking a year-on-year growth of 29.76%[50]. - The company's group control business achieved revenue of 302.55 million yuan, representing a year-on-year increase of 41.86%[62]. Impairment and Risks - The company recognized an impairment loss on goodwill of 1.08 billion yuan, reducing the goodwill balance to 601.24 million yuan, reflecting challenges in achieving expected synergies from acquisitions[14]. - The company recorded a goodwill impairment of CNY 107,739.49 million due to declining profits from subsidiaries and increased management risks[49]. - The company faces potential operational risks related to its subsidiary, Shanghai Yitong, due to legal issues and management changes, which may impact overall performance[15]. - The company acknowledges the impact of macroeconomic fluctuations on client demand, particularly in government and large enterprise sectors, which could affect future performance[6]. Investment and Financing - The company raised a total of 780 million yuan through the issuance of convertible bonds in 2017, with ongoing risks related to the effectiveness of the funded projects in meeting market demands[18]. - The total investment amount for the reporting period was CNY 1,008,693,539.00, reflecting a year-on-year increase of 30.81%[101]. - The company has committed to investing ¥27.58 million in the Government Affairs R&D Center project, with a cumulative investment of ¥9.15 million achieved[110]. - The company has utilized ¥29.81 million of the raised funds, leaving ¥50.65 million unutilized, which includes ¥19.05 million for temporary working capital and ¥30.20 million for cash management[108]. Strategic Initiatives - The company is committed to enhancing product and solution offerings to adapt to changing market demands and maintain competitive advantages[8]. - The company plans to enhance its B2B2C big data service capabilities, focusing on management software and digital communication[30]. - The company aims to achieve "digital enterprise and intelligent management" for clients in the construction industry, focusing on technological leadership and deep industry engagement[63]. - The company is actively involved in the "Internet + Government Services" initiative, implementing various systems to improve public service efficiency[61]. Governance and Compliance - The company has established a robust decision-making process for dividend distribution, involving independent directors and ensuring stakeholder engagement[138]. - The company has committed to ensuring that any related transactions comply with relevant laws and regulations, protecting the interests of minority shareholders[148]. - The company has maintained a commitment to avoid engaging in any competitive business activities with its subsidiaries during the commitment period[146]. - The company has confirmed that it will not occupy or use the funds or resources of its subsidiaries for any personal or unrelated business purposes[155]. Subsidiary Performance - Subsidiary Huaxia Diantong achieved operating revenue of 294.65 million RMB, a year-on-year increase of 29.41%, with a net profit of 92.69 million RMB, up 11.66%[118]. - Subsidiary Shanghai Yitong reported operating revenue of 640.38 million RMB, a year-on-year increase of 20.23%, but net profit decreased by 45.61% to 57.08 million RMB due to significant asset impairment losses[119]. - Subsidiary Yiqilian Technology achieved operating revenue of 800.02 million RMB, a year-on-year increase of 29.09%, but net profit fell by 78.31% to 19.25 million RMB due to market competition and policy impacts[120]. Legal and Regulatory Issues - In 2018, the company reported a significant issue involving three employees from its subsidiary Shanghai Yitong, who were found to have forged client seals, leading to a police report filed on February 26, 2019[171]. - The company has received notifications from police in Shanghai and Beijing regarding the investigation into the forgery and contract fraud cases, which may impact the company's ability to claim performance compensation[172]. - The audit report for 2018 received a qualified opinion due to uncertainties regarding the recoverability of receivables totaling 34,000.00 million CNY[170].