HAND(SZ:300170)2022-04-25 16:00Financial Performance - In 2021, the company experienced a revenue rebound, returning to an upward trajectory after a decline in 2019 and 2020, with significant growth attributed to the acceleration of new software product business[5]. - The company reported a net profit increase, with the profitability of incubated products improving, indicating a positive trend towards operational recovery[5]. - The company's operating revenue for 2021 was ¥2,810,661,529.65, representing a 12.74% increase from ¥2,493,084,967.52 in 2020[38]. - The net profit attributable to shareholders for 2021 was ¥197,066,619.71, a significant increase of 199.91% compared to ¥65,709,488.68 in 2020[38]. - The net profit attributable to shareholders after deducting non-recurring gains and losses was -¥161,621,745.69, a decrease of 476.50% from ¥42,927,593.73 in 2020[38]. - The net cash flow from operating activities for 2021 was ¥191,404,731.03, down 57.13% from ¥446,512,710.61 in 2020[38]. - The basic earnings per share for 2021 was ¥0.22, an increase of 214.29% from ¥0.07 in 2020[38]. - The diluted earnings per share for 2021 was ¥0.20, up 185.71% from ¥0.07 in 2020[38]. - The total assets at the end of 2021 were ¥5,170,417,481.14, a slight decrease of 0.90% from ¥5,217,577,254.22 at the end of 2020[38]. - The net assets attributable to shareholders at the end of 2021 were ¥3,418,695,409.64, an increase of 3.24% from ¥3,311,530,422.44 at the end of 2020[38]. - The weighted average return on net assets for 2021 was 5.79%, an increase of 3.66% compared to 2.13% in 2020[38]. - The company reported a significant decline in net profit after deducting non-recurring gains and losses, indicating potential challenges in operational efficiency[38]. Business Strategy and Focus - The management team emphasized a strategic focus on becoming a comprehensive service provider combining "software products + services," targeting four main business lines: industrial digitalization, financial digitalization, ERP, and IT outsourcing[6]. - The company plans to enhance the delivery efficiency through reforms in the delivery model, aiming for high-quality rapid development of its proprietary software business in 2022[8]. - The management expressed confidence in navigating challenges posed by the macroeconomic environment and the ongoing pandemic, with preparations to expand into overseas markets[8]. - The company aims to leverage the increasing digital transformation needs of large enterprises to drive its core business growth[64]. - The company plans to focus on four major business lines: industrial digitalization, financial digitalization, general ERP, and IT outsourcing to meet customer digitalization demands[194]. - The company aims to transition from a service-oriented company to a software and service integrated digital service provider within 3-5 years[195]. - The company will enhance its market expansion efforts in its proprietary software business, targeting a significant increase in market share[196]. Market Trends and Opportunities - The digital economy's contribution to GDP is projected to rise from 7.8% in 2020 to 10% by 2025, indicating a favorable macro environment for the company's growth[54]. - The smart manufacturing software market is expected to grow at a compound annual growth rate (CAGR) of 17.4%, reaching ¥320.22 billion by 2026[64]. - The average growth rate of digital marketing in China is expected to be 19% in 2022, with digital marketing investment accounting for slightly over 50% of total marketing expenditure[66]. - The demand for digital marketing services is increasing among top-ranking enterprises, indicating a strong growth opportunity for the company's digital marketing business in the coming years[69]. - The financial digitalization sector is experiencing heightened demand due to the integration of business and finance, requiring more intelligent solutions to enhance operational efficiency[70]. - The ERP market continues to grow, driven by leading enterprises expanding their organizational scale and the need for digital transformation in various sectors[73]. - The trend of IT outsourcing is rising as companies seek to delegate digital resource management to specialized service providers, enhancing operational efficiency[74]. Product Development and Innovation - The company has developed its own technology platform, "Fusion Middle Platform," which supports the development of proprietary software products such as intelligent manufacturing and digital marketing[4]. - The company has transitioned from a service provider to a comprehensive digital solution supplier, focusing on both software and implementation services[75]. - The core business capabilities include "industrial digitalization," "financial digitalization," "pan-ERP," and "ITO," with a focus on self-developed software products[79]. - The company has developed its own intelligent manufacturing software, which has been refined through numerous projects, targeting industries such as lithium battery, automotive, and engineering machinery[83]. - The company has developed the "一步制造云" software to enhance digital manufacturing capabilities, creating a "1+n" collaborative manufacturing system that integrates upstream supply chain enterprises[86]. - The company has developed the HSCS software for automated reconciliation and settlement, addressing the complexities of modern business transactions, widely used in various industries including internet and retail[98]. - The "智享财务" suite aims to integrate financial processes with business operations, enhancing efficiency and compliance in financial management[102]. - The management accounting business leverages big data and AI to support internal management and decision-making, with a focus on comprehensive budgeting and performance analysis[105]. Operational Challenges and Risks - The company acknowledged the risks associated with rising human resource costs, which are a significant operational expense in the talent-intensive software and IT services industry[15]. - The company has seen a growing demand for digitalization services among large enterprises, particularly in the areas of intelligent manufacturing and financial digitalization[6]. - The gross profit margin for the main business was 25.74%, a decrease compared to the previous year, attributed to rising labor costs and the transition of proprietary software from development to maturity[125]. - Sales expenses increased by CNY 62,023,758.17 year-on-year, primarily due to the recovery of business activities and the hosting of a user conference[125]. - The net cash flow from operating activities decreased by 57.13% year-on-year, mainly due to increased payments to employees and other operating expenses[126]. International Expansion and Subsidiaries - The company has established subsidiaries or offices in overseas markets including Japan, Singapore, Europe, and the United States, demonstrating its global ERP implementation delivery capabilities[108]. - The company has formed localized solution packages that comply with local tax, compliance, and legal requirements in over 80 countries, enhancing its overseas implementation capabilities[119]. - The company has established remote centralized delivery centers in Wuhan, Xi'an, and Chengdu, with plans to expand their scale and evaluate new centers[199]. Research and Development - R&D investment in 2021 amounted to ¥449,548,905.80, representing 15.99% of operating revenue, a decrease from 18.26% in 2020[151]. - The number of R&D personnel decreased by 9.59% from 7,109 in 2020 to 6,427 in 2021, with the proportion of R&D personnel dropping from 79.74% to 66.87%[151]. - The capitalized R&D expenditure in 2021 was ¥226,338,815.91, representing 50.35% of total R&D investment, an increase from 47.11% in 2020[151]. - The company plans to continue utilizing raised funds for their intended purposes without any reported issues[184].