FOET(SZ:300173)2020-08-16 16:00Acquisition and Expansion - The company completed the acquisition of 88% of Chao Ye Precision, expanding its presence in the lithium battery automation equipment sector[11]. - The company plans to establish a lithium battery automation equipment production line in Foshan to enhance resource utilization and achieve coordinated development[11]. - The company completed the acquisition of 88% equity in Chao Ye Precision, which contributed to improved performance in Q2[45]. - The company completed the acquisition of 88% of Super Precision, which has been consolidated into the financial statements since May 2020, enhancing revenue sources and business scale[62]. - The company is pursuing both internal development and external acquisitions to strengthen its advanced equipment manufacturing sector and diversify revenue sources[60]. - The company plans to acquire 88% equity of Dongguan Chaoye Precision Equipment Co., Ltd. through a combination of issuing shares and cash payment, with the project approved by the China Securities Regulatory Commission on April 2, 2020[147]. Financial Performance - The company's operating revenue for the reporting period was ¥221,730,585.13, representing a 115.97% increase compared to ¥102,666,142.27 in the same period last year[27]. - The net profit attributable to shareholders decreased by 46.48% to ¥2,722,897.94 from ¥5,087,485.82 year-on-year[27]. - The net cash flow from operating activities increased significantly by 2,399.92% to ¥70,501,356.99, compared to a negative cash flow of ¥3,065,386.05 in the previous year[27]. - Total assets at the end of the reporting period reached ¥3,158,434,348.22, a 113.05% increase from ¥1,482,514,735.23 at the end of the previous year[27]. - The net assets attributable to shareholders increased by 67.11% to ¥1,163,787,124.07 from ¥696,424,246.13 year-on-year[27]. - The company achieved operating revenue of ¥221,730,585.13, an increase of 115.97% year-on-year[45]. - The basic and diluted earnings per share dropped to ¥0.0000, a 100% decrease compared to ¥0.0087 in the previous year[27]. - Operating profit reached ¥10,588,558.10, up 78.34% from ¥5,937,211.48 year-on-year[62]. - The total profit amounted to ¥9,690,369.35, reflecting a 20.96% increase from ¥8,011,113.11 in the previous year[62]. Risk Management and Legal Matters - The company aims to improve its risk management by enhancing credit rating assessments and strengthening collection efforts on overdue accounts[10]. - The company has taken legal measures to protect its interests regarding the 139 million yuan owed by related party Songde Industrial[12]. - The company is facing integration risks post-acquisition, including management, technology development, and sales channel integration[11]. - The company has a high accounts receivable amount, which could affect cash flow and operational liquidity if not managed properly[88]. - The company is closely monitoring the impact of the ongoing global pandemic on its operations and market demand[7]. Research and Development - The company is focusing on accelerating product research and development to enhance competitiveness in the intelligent manufacturing sector[7]. - The company aims to enhance its core technology R&D capabilities to drive the development of the lithium battery production equipment market in China[48]. - The R&D team consists of nearly 50 members with extensive industry experience, focusing on smart manufacturing technology[55]. - Research and development expenses increased by 116.88% to ¥13,259,547.61, driven by the consolidation of Super Precision's financial data[66]. Market and Industry Outlook - The lithium battery industry in China is expected to experience significant growth opportunities, benefiting companies with technological advantages[48]. - The 3C electronic products sector, where the company operates, is expected to experience stable growth after years of increase, driven by rapid product updates and the demand for digital lithium batteries[49]. - The company is expanding its product offerings beyond 3C consumer electronics to include non-standard automation equipment for various industries[47]. - The company aims to leverage synergies from recent acquisitions to drive growth in both business segments[34]. Shareholder and Governance Matters - The company will not distribute cash dividends or issue bonus shares for the current period[13]. - The company has established a non-compete agreement for four years post-transaction to prevent conflicts with its subsidiary, ensuring no direct or indirect involvement in competing businesses[101]. - The company has committed to achieving a net profit of no less than RMB 25 million, RMB 26.25 million, and RMB 27.5 million for the years 2018, 2019, and 2020 respectively[96]. - The company has experienced changes in its board of directors, with the resignation of Chairman Guo Jingsong and the appointment of Chen Wu as the new General Manager[145]. Operational Challenges - The impact of the COVID-19 pandemic has led to a slowdown in demand growth for the company's 3C equipment business[60]. - In Q1, the company faced significant impacts from COVID-19, resulting in an operating revenue of only ¥1,856,672.41 and a net loss of ¥26,035,238.96[45]. - The company is actively monitoring the fulfillment of commitments by its controlling shareholders and related parties[95].