Token Sciences(SZ:300088)2023-04-14 16:00Wearable Devices and Market Trends - The global wearable device shipment is expected to return to positive growth in 2023, with an estimated increase of 4.6% to 539 million units[2]. - The compound annual growth rate (CAGR) for wearable devices over the next five years is projected to be 5.1%, reaching 628 million units by 2026[2]. Automotive Business and Technology Development - The company has established a significant position in the supply chain for automotive clients, covering over 70% of global vehicle brands[3]. - The automotive business has become a key strategic direction, with a complete supply chain covering various automotive products[11]. - New technologies and products, such as 3D automotive curved cover plates, have been launched, leading to an increase in customer orders[11]. - The company is actively expanding its customer base in the new energy vehicle sector, supplying central control screen modules to major clients like T Company and BYD[59]. - The automotive display market is shifting towards larger, multi-screen setups, with the company focusing on 3D curved glass cover technology[63]. - The company has secured framework agreements for multiple 3D automotive projects, with total amounts reaching several billion CNY[63]. - The company is optimistic about the growth trends in automotive electronics, ultra-thin glass cover plates, and VR headset modules, which are expected to bring significant opportunities in 2023 and beyond[66]. Financial Performance and Revenue - The company achieved operating revenue of CNY 698,726.34 million, a year-on-year decrease of 0.44%[11]. - Operating profit was CNY 73,297.46 million, down 30.26% year-on-year, while net profit attributable to shareholders was CNY 67,966.40 million, a decrease of 24.84%[11]. - The decline in revenue was attributed to global inflation and weakened consumer demand, while net profit was impacted by rising raw material prices and increased competition[11]. - The top five customers accounted for 66.51% of total annual sales, with the largest customer contributing 20.30%[17]. - The total procurement amount from the top five suppliers was CNY 1,372,249,921.17, representing 23.96% of total annual procurement[17]. Research and Development - R&D expenses increased by 9.43% year-on-year to CNY 330,023,034.90[18]. - The company has completed the research and development of flexible OLED display modules, achieving trial production and mass production, thus enhancing its competitive advantage in the industry[19]. - The company is committed to enhancing R&D efforts, focusing on projects such as DLC coating, UTG product development, and IGZO technology mass production[85]. - The company has a strong focus on research and development, with several patents and technology achievements recognized at the provincial level[140]. Cash Flow and Investment Activities - The cash inflow from investment activities decreased by 89.78% to approximately $93.94 million, while cash outflow from investment activities decreased by 52.85% to approximately $1.03 billion[21]. - The net cash flow from investment activities improved by 26.00%, reaching approximately -$939.98 million compared to the previous period[21]. - The company's cash inflow from operating activities in 2022 was approximately ¥6.53 billion, a year-on-year increase of 24.33%[45]. - The cash outflow from operating activities in 2022 was approximately ¥5.22 billion, reflecting a year-on-year increase of 26.97%[45]. - The net cash flow generated from operating activities was approximately ¥1.31 billion, representing a year-on-year increase of 14.84%[45]. Governance and Compliance - The company has established a comprehensive governance structure to enhance operational compliance and improve governance levels in accordance with regulatory requirements[97]. - The company maintains an independent governance structure, with 11 board members, including 4 independent directors, exceeding one-third of the total board size[100]. - The company has established a performance evaluation and incentive mechanism for senior management, combining base salary with annual performance assessments[105]. - The company has implemented a comprehensive internal control system to manage risks and ensure the normal operation of business activities[106]. Market Conditions and Risks - In 2023, the company faces risks from global economic recession, inflation, and geopolitical factors, leading to a decline in consumer income expectations and a decrease in global consumer electronics demand[80]. - The company acknowledges risks related to technological updates and the need for continuous communication with downstream clients to maintain competitiveness[159]. - The company anticipates challenges from global economic downturns and intensified competition in the touch display industry, impacting profit margins[151]. Strategic Initiatives and Future Plans - The company plans to enhance the self-manufacturing rate of key equipment and accelerate the mass production of new production lines[11]. - The company is actively promoting restructuring and fundraising efforts to enhance profitability and strengthen its competitive position in automotive electronics and high-end display modules[79]. - The company aims to expand its market presence through new product development and strategic partnerships[171]. - The company is considering the possibility of East信光电 entering the capital market in the future[193].