Leascend(SZ:300051)2021-04-22 16:00Financial Performance - The company reported a net profit of negative value for the last three accounting years after deducting non-recurring gains and losses, indicating a need for measures to enhance resource utilization and improve profitability[6]. - The company has reported negative net profits for the last three consecutive years, leading to a risk warning for its stock trading[20]. - The company's operating revenue for 2020 was ¥221,676,657.80, a decrease of 23.11% compared to ¥288,308,607.71 in 2019[30]. - The net loss attributable to shareholders for 2020 was ¥93,777,162, representing a 63.55% improvement from a loss of ¥257,255,734 in 2019[30]. - The net cash flow from operating activities decreased by 62.94% to ¥19,408,981.80 in 2020, down from ¥52,377,893.30 in 2019[30]. - The total assets at the end of 2020 were ¥699,891,894, a decline of 13.44% from ¥808,535,974 at the end of 2019[30]. - The net assets attributable to shareholders decreased by 21.82% to ¥244,788,215 at the end of 2020, down from ¥313,096,456 at the end of 2019[30]. - The basic earnings per share improved to -¥0.26 in 2020 from -¥0.70 in 2019, marking a 62.86% increase[30]. - The weighted average return on equity was -35.18% in 2020, an improvement from -57.07% in 2019[30]. - The total profit for the period was -¥95,865,168.80, and the net profit attributable to the parent company was -¥93,777,162.86, representing an increase of 62.28% and 63.55% respectively, mainly due to a reduction in goodwill impairment for the subsidiary[53]. Business Strategy and Development - The company is actively expanding its game business and mobile communication resale business to increase revenue[6]. - The company has launched a series of cloud office products, including 35 Cloud Attendance and 35 Cloud Portal, to differentiate its offerings and enhance customer trust[8]. - The company is focusing on developing new game products and updating existing ones to maintain competitiveness in the gaming market[16]. - The company plans to continue investing in research and development to ensure sustainable growth in its gaming business[17]. - The company aims to innovate its product offerings, including cloud services and intelligent terminal products, to create a comprehensive cloud office solution that allows users to manage tasks seamlessly across multiple devices[41]. - The company is actively developing mobile gaming through its subsidiary, Dao Xi Technology, which is expanding its product line to include H5 games and leveraging partnerships with platforms like Tencent to enhance market competitiveness[44]. - The company plans to continue its dual cloud strategy, focusing on the innovation and iteration of enterprise office products, while also enhancing its gaming and virtual operator businesses to strengthen its position in the internet industry[45]. - The company aims to expand its mobile game business and mobile communication resale business by leveraging its R&D advantages and actively launching various game products[47]. Market Competition and Risks - The company faces significant market competition risks as the software operation service industry in China is rapidly growing, with many new entrants[8]. - The company has established formal cooperation with major telecom operators to enhance its mobile resale business, integrating resources to provide unified communication services[45]. - The company has obtained a value-added telecommunications business operation license, but faces increasing competition in the virtual operator sector[13]. Internal Controls and Compliance - The company has identified six significant non-financial internal control deficiencies during the reporting period, which need to be addressed[5]. - The company has established a comprehensive information security management system to mitigate risks related to internet, system, and data security[9]. - The company has established a comprehensive intellectual property management system to protect its rights and actively apply for product copyrights[18]. - The company has committed to avoiding competition and related transactions, with compliance confirmed as of February 11, 2020[155]. - The company has made a commitment to maintain the authenticity, accuracy, and completeness of the provided information, with compliance confirmed as of February 11, 2020[155]. Shareholder and Governance Matters - The stock will be suspended for one day on April 23, 2021, and will resume trading on April 26, 2021, under the new name "ST Sanwu" with a trading limit of 5%[20]. - No cash dividends or stock bonuses will be distributed to shareholders for the current fiscal year[20]. - The company has reported a commitment to transparency in financial reporting and governance practices, with compliance confirmed as of the report date[155]. - The company has confirmed that all major shareholders are committed to avoiding conflicts of interest and ensuring independent operations[154]. - The company has established management systems for related party transactions to ensure compliance with relevant regulations and protect the interests of minority shareholders[162]. Financial Management and Investments - The company has established an independent financial department and accounting system, ensuring compliance with tax regulations[161]. - The company has committed to not reducing shareholdings during the commitment period, which started from July 25, 2009, and will continue until the commitments are fulfilled[156]. - The company has a total of 1,600 million CNY in funds that have been repurposed, accounting for 33.59% of the total raised funds[106]. - The company has reported a total of 4,588 million CNY allocated to technology support and marketing center upgrades, with 100% of the investment completed[108]. - The company has utilized CNY 12.0736 million of surplus raised funds for permanent working capital as of December 31, 2020[125]. Operational Efficiency and Cost Management - The company is committed to reducing costs and improving average employee efficiency through its independent accounting management systems[39]. - The company's operating costs decreased by 22.96% year-on-year, totaling 106,053,819.64 CNY[72]. - The company reported a significant reduction in operating costs for game products, with a decrease of 45.64% year-on-year in operational expenses[72]. - The company has made strategic adjustments in personnel and expenses to align with market demands, enhancing operational efficiency[112]. Subsidiaries and Acquisitions - The company completed the acquisition of Shenzhen Xinman Technology Co., Ltd. on March 30, 2020, with a total acquisition cost of CNY 130 million, and reported revenue of CNY 24,162,222.67 and net profit of CNY 19,061,708.35 from the acquired entity[197]. - The company disposed of its stake in Beijing Yizhong Postal Information Technology Co., Ltd. for CNY 15 million, resulting in a loss of CNY 24,880,800.32 upon loss of control on December 29, 2020[198]. - The company has established new subsidiaries and made equity investments, including a 300,000 yuan investment in Shenzhen Guoniu Education Training Co., Ltd., acquiring a 3% stake[101]. Future Outlook and Plans - The company plans to enhance its cloud service offerings and intelligent terminal products, focusing on mobile internet and cloud computing, supported by national policies[140]. - The company will continue to implement its dual-cloud strategy, focusing on innovation and iteration of enterprise office products, including upgrades to "35 Cloud Portal" and "Three Five Business Card Chain" to enhance user experience and service offerings[144]. - The company plans to enhance its mobile office client and develop a mobile intelligent website building platform to meet the needs of enterprises for mobile image display and e-commerce[46].