Fenda Tech(SZ:002681)2021-03-05 16:00Financial Performance - The company's operating revenue for 2020 was approximately ¥3.54 billion, a slight increase of 0.06% compared to 2019[32]. - The net profit attributable to shareholders for 2020 was approximately ¥1.07 billion, a significant increase of 134.90% compared to a net loss of approximately ¥3.05 billion in 2019[32]. - The net profit attributable to shareholders after deducting non-recurring gains and losses was approximately ¥163.19 million, representing a 105.29% increase from a net loss of approximately ¥3.08 billion in 2019[32]. - The basic earnings per share for 2020 was ¥0.55, a recovery from a loss of ¥1.49 per share in 2019, marking a 136.91% improvement[32]. - The total assets at the end of 2020 were approximately ¥5.18 billion, an increase of 5.88% from approximately ¥4.90 billion at the end of 2019[32]. - The net cash flow from operating activities for 2020 was approximately ¥478.70 million, a decrease of 32.90% compared to ¥713.39 million in 2019[32]. - The weighted average return on net assets for 2020 was 39.42%, a significant recovery from -82.40% in 2019[32]. - The company's net assets attributable to shareholders increased by 3.49% year-on-year, reaching CNY 2,255,812,718.68[34]. - The company reported a non-operating income from government subsidies of CNY 92,661,574.65 in 2020, up from CNY 36,825,821.69 in 2019[40]. - The company achieved a total operating revenue of ¥3,537,728,683.41 in 2020, a slight increase of 0.06% compared to ¥3,535,639,194.26 in 2019[68]. - The company reported a net profit of 62,074,273.57 CNY from its subsidiary Shenzhen Fenda Intelligent Technology Co., with a revenue of 653,994,175.07 CNY[105]. Business Strategy and Focus - The company aims to focus on its core business, enhancing market expansion, technology research and development, and supply chain management[15]. - The company is exploring entry into the smart automotive sector, leveraging its core competencies in wireless, audio, software, and precision manufacturing[15]. - The company emphasizes the importance of maintaining a high market share to secure pricing power and aims to rank among the top five in its industry[15]. - The company has identified smart wearables, smart voice speakers, and hair styling appliances as its star businesses, with a focus on developing other product lines to achieve similar success[15]. - The company is committed to innovation and brand development as dual drivers of growth, with plans to enhance its research and development capabilities[15]. - The company recognizes the need for a talent pipeline and an innovative corporate culture to adapt to the evolving technological landscape[15]. - The company has established a strategy to concentrate on its main business and improve operational efficiency in a complex market environment[15]. - The company aims to build its product lines into star products within the Boston Matrix to ensure sustained rapid growth[15]. - The company is actively seeking collaborations with major health and medical companies to enhance its product offerings in the smart wearable sector[55]. - The company is focusing on the development of smart home products and plans to expand its market presence in the smart speaker segment[112]. - The company aims to enhance brand value and market positioning for its sub-brands, including Fenda, Lecheng, and Luomansi, while actively expanding its customer base[115]. Research and Development - The company focuses on R&D in consumer electronics, with major products including wireless audio, smart wearables, and health appliances, targeting high-end markets[46]. - The company's R&D investment in 2020 was CNY 21,228 million, representing a compound annual growth rate of 29.24% since its IPO, accounting for 6.00% of revenue[51]. - The company has filed for 111 patents and software copyrights, including 37 invention patents, indicating a strong focus on innovation and intellectual property protection[65]. - R&D expenses for the year amounted to CNY 212.28 million, accounting for 6% of total revenue, with a focus on smart speakers and wearable products[89]. - The company plans to enhance its market share in the smart wearable sector by increasing investment in research and development, particularly in health monitoring products[112]. - The company will increase R&D investment and collaborate with renowned universities to cultivate a sustainable talent pool in technology innovation[115]. Market Trends and Challenges - The smart speaker market in China saw a sales volume of 36.76 million units in 2020, a year-on-year decline of 8.6%, but is expected to exceed 42 million units in 2021, growing by 14%[108]. - Global wearable device sales reached 284.1 million units in the first three quarters of 2020, marking a year-on-year increase of 26.5%[109]. - The precision structural components industry is anticipated to benefit from the recovery of the smartphone market, with a projected 11.4% growth in global smartphone sales in 2021[111]. - The company anticipates risks from the ongoing COVID-19 pandemic, which could adversely affect its operational performance, and plans to strengthen domestic market efforts[116]. - The company faces risks from raw material price fluctuations, particularly for chips and electronic components, and will implement refined production management to mitigate these impacts[116]. - The company is exposed to RMB exchange rate fluctuations, which could affect export competitiveness, and plans to enhance domestic market efforts and utilize financial derivatives for risk management[116]. - The company recognizes the risk of core technical personnel turnover and will enhance incentive mechanisms to retain high-end talent[117]. Corporate Governance and Shareholder Relations - The company plans not to distribute cash dividends, issue bonus shares, or increase capital using reserves[5]. - The company has committed to ensuring that minority shareholders have sufficient opportunities to express their opinions and that their legal rights are fully protected[125]. - The company has a transparent decision-making process regarding its cash dividend policy, which aligns with long-term development and shareholder returns[125]. - The company has committed to strict adherence to its promises regarding performance and related party transactions[128]. - The company has established a long-term commitment to ensuring the independence of its financial operations, including the establishment of an independent financial department and accounting system[150]. - The company has a commitment to ensuring that its assets are not used to guarantee the debts of other enterprises under its control[150]. - The company has outlined a strategy to seek new suitable properties to ensure uninterrupted production operations in case of any leasing issues[144]. - The company has established a competitive prohibition commitment for key personnel to prevent conflicts of interest and ensure loyalty to the company[144]. Legal and Compliance Matters - The company faced a litigation case involving Guangju Communications with a disputed amount of 89.3757 million RMB, which has been ruled by the Shenzhen International Arbitration Court, but the execution of the ruling remains uncertain[174]. - The company withdrew a previous arbitration application related to Fuchengda's performance commitment dispute, which involved a claim of 1.9345115 billion RMB, and this withdrawal is not expected to have a significant impact on the company's profits[174]. - The company reported no significant accounting errors requiring retrospective restatement during the reporting period[169]. - The company confirmed that the changes in accounting policies will not significantly impact its financial position, operating results, or cash flows[168]. Operational Efficiency and Production Capacity - The company has established a strong order delivery capability with a production capacity of 24 million sets, becoming one of the largest production bases for audio products and smart wearables in China[52]. - The company is expanding its production capacity with the completion of the first phase of the Dongguan Qingxi production base, which is expected to enhance operational efficiency[66]. - The company reported a significant decline in inventory levels across various product categories, with smart wearable products inventory decreasing by 99.97% year-on-year[75]. - The company has established a training system for employees to enhance their skills and has implemented various employee welfare initiatives[200].