Feitian(SZ:300386)2019-08-05 16:00Business Performance - The company's main business has seen a decline due to reduced demand for USB Key and OTP products, leading to a significant impact on operating performance [5]. - The company faces intensified competition in the IC card market, resulting in decreasing product prices and a lack of breakthrough in operational performance [6]. - Total revenue for the reporting period was ¥386,835,204.35, a decrease of 9.59% compared to the same period last year [24]. - Net profit attributable to shareholders was ¥11,274,825.90, down 69.20% year-over-year [24]. - The net profit after deducting non-recurring gains and losses was -¥7,253,973.25, a decline of 137.97% compared to the previous year [24]. - The revenue from USB Key products was ¥20,221.63 million, accounting for 52.27% of total revenue, down 12.99% year-over-year [33]. - Revenue from dynamic token products was ¥9,668.76 million, representing 24.99% of total revenue, a decrease of 17.23% compared to the previous year [33]. - The company reported a significant decrease in investment amounting to RMB 14,007,190.94, down 55.85% from RMB 31,725,500 in the previous year [67]. Financial Position - The company's total assets decreased by 7.39% to ¥1,863,864,265.91 compared to the end of the previous year [24]. - The company's cash and cash equivalents decreased by 50.09% due to increased investments and cash payments for goods and services [35]. - The company's total liabilities decreased from CNY 250,763,144.83 to CNY 106,093,978.06, a reduction of approximately 57.68% [155]. - The total liabilities at the end of the reporting period were 8,821.00 million yuan, showing an increase from 7,008.00 million yuan at the beginning of the year [180]. - The total equity attributable to the parent company at the end of the reporting period was 1,746.00 million yuan, reflecting a decrease from the previous year's 1,660.20 million yuan [181]. Research and Development - R&D investments are crucial for enhancing innovation capabilities, but rising labor costs and uncertainties in R&D activities significantly affect overall profitability [9]. - Research and development expenses were RMB 42,542,766.24, down 31.16% from RMB 61,797,143.12, mainly due to a reduction in the number of participants in R&D projects [53]. - Research and development efforts have led to the filing of 56 new patents in 2019, indicating a strong commitment to innovation and technology advancement [43]. Strategic Initiatives - The company plans to launch high-value-added smart cards to achieve differentiated competition [7]. - The company is focusing on expanding its market presence in Southeast Asia, targeting a 30% increase in market share by the end of 2020 [42]. - The company has initiated strategic acquisitions to enhance its technology capabilities, with a budget allocation of 200 million RMB for potential mergers and acquisitions in 2019 [42]. - The company is implementing a new marketing strategy aimed at increasing brand awareness, with a budget increase of 15% for marketing expenditures in 2019 [42]. Legal Matters - The company has filed a lawsuit against Beijing Xinan Century Technology Co., Ltd. and Wuhan Xinan Luojia Technology Co., Ltd. for patent infringement, seeking damages of 5 million yuan [103]. - The court ruled that the defendants must cease infringement activities and pay compensation of 2 million yuan for economic losses and 30,000 yuan for legal expenses [104]. - The company is actively pursuing legal actions to protect its intellectual property rights [103]. - The company has incurred significant legal expenses related to its patent litigation efforts, reflecting its commitment to defending its intellectual property rights [106]. Cash Flow and Investments - The net cash flow from operating activities improved to -¥94,544,032.34, a 66.71% increase from -¥284,005,734.37 in the previous year [24]. - The company’s cash flow from investment activities showed a significant decline, with a net cash flow of -190,298,792.58 CNY in 2019 compared to a positive net cash flow of 115,626,817.94 CNY in 2018 [176]. - The company reported a total cash and cash equivalents balance of 320,857,955.18 CNY at the end of the first half of 2019, down from 402,018,438.76 CNY at the end of the first half of 2018 [173]. Market Outlook - The information security market in China is projected to grow from ¥495.2 billion in 2018 to ¥926.8 billion by 2021, with a compound annual growth rate of 23% [31]. - The company provided a positive outlook for the second half of 2019, projecting a revenue growth of 20% driven by new product launches and market expansion strategies [42]. - The company plans to enhance fundraising efficiency and long-term development through adjustments in project funding allocations [80]. Shareholder Information - The total number of common shareholders at the end of the reporting period is 33,413 [135]. - The largest shareholder, Huang Yu, holds 30.94% of shares, totaling 29,339,862 shares [136]. - The company plans not to distribute cash dividends or issue bonus shares for the half-year period [98].