HBGK(SZ:300449)2022-04-19 16:00Financial Performance - The company's revenue decreased significantly due to the loss of orders from its subsidiary, Jinshi Weishi, which faced industry-wide technological upgrades and competition limitations [5]. - The company reported a substantial loss primarily due to goodwill impairment provisions of RMB 31,782.49 million for Tianjin Putai and RMB 20,085.07 million for Jinshi Weishi, along with bad debt provisions totaling RMB 17,339.87 million [5]. - The company's operating revenue for 2021 was ¥292,428,637.95, a decrease of 31.01% compared to ¥423,878,084.01 in 2020 [24]. - The net profit attributable to shareholders for 2021 was -¥754,096,371.37, representing a decline of 1,680.83% from a profit of ¥47,702,411.62 in 2020 [24]. - The cash flow from operating activities was ¥20,306,981.64, down 86.84% from ¥154,338,305.84 in 2020 [24]. - The total assets at the end of 2021 were ¥628,962,444.14, a decrease of 55.16% from ¥1,402,637,147.00 at the end of 2020 [24]. - The basic earnings per share for 2021 was -¥2.53, a decline of 1,681.25% compared to ¥0.16 in 2020 [24]. - The weighted average return on equity for 2021 was -139.95%, down 143.29% from 3.34% in 2020 [24]. - The company reported a net profit excluding non-recurring items of -¥751,293,496.90 for 2021, compared to -¥27,810,440.88 in 2020 [24]. - The company experienced a significant decline in net assets, which were ¥161,797,161.87 at the end of 2021, down 82.33% from ¥915,893,533.24 at the end of 2020 [24]. Business Transformation and Strategy - The company is transitioning its business model from a traditional security solution provider to a city intelligent security service operator, which requires improved management capabilities [8]. - The company plans to enhance its operational capabilities in project management to mitigate risks associated with the sustainability of its operational projects [7]. - The cash increase project proposed in 2021 is critical for the company's business development in 2022, and its failure to obtain approval could restrict financing capabilities [7]. - The company is focusing on enhancing customer dependency through improved technology and services in its operational projects [7]. - The company has signed a financial assistance agreement with the cash increase subscribers to alleviate financial pressure [7]. - The company is actively involved in the IP derivative product copyright protection sector, utilizing digital watermarking technology to ensure authenticity and traceability in transactions [48]. - The company has initiated the "Snow Bright Project" in Yinchuan, which serves as a case study for its smart security business transformation, focusing on operational projects rather than long-term engineering projects [53]. Research and Development - R&D expenses rose by 103.86% to ¥4,137.38 million, reflecting increased investment in technology upgrades [67]. - The company has developed a comprehensive product system based on digital watermarking technology, which includes video, audio, and image watermarking, positioning itself as a leader in the domestic market [51]. - The company has achieved significant advancements in video monitoring technology, creating a comprehensive technical platform that includes various advanced technologies [59]. - The company is focusing on digital watermark technology applications, which are still in the early stages of commercialization and face market challenges [78]. - The company has invested in developing specialized software platforms for public security applications, leveraging cloud computing, IoT, and big data technologies [61]. Market Trends and Opportunities - The AI+ security market is expected to exceed RMB 90 billion by 2025, with a stable growth rate of around 10% in the public security traffic sector during 2021-2025 [38]. - The demand for AI security is diversifying, with a growing preference for integrators with technical support capabilities, leading to a rapid decline in average prices for AI video surveillance [39]. - The digital transformation of the security industry is entering a critical period, with new market hotspots emerging in smart governance, smart transportation, and smart healthcare [39]. - The digital economy's core industry value added is projected to account for 10% of GDP by 2025, with significant improvements in digital technology integration with the real economy [44]. Governance and Management - The company held 1 annual general meeting and 2 extraordinary general meetings during the reporting period, ensuring equal rights for all shareholders [145]. - The newly formed board of directors consists of 12 members, including 6 independent directors, complying with legal requirements [145]. - The company has established a fully independent financial department with a sound financial management system, ensuring no interference from the actual controller [148]. - The company has a diverse board with members holding various professional backgrounds, including law, finance, and technology, enhancing its governance structure [159]. - The company has been recognized for its technological advancements, with its General Manager Sun Zhenwen having received multiple awards for innovation and entrepreneurship [160]. Financial Management and Compliance - The company has implemented a comprehensive internal control system to ensure compliance, asset security, and the integrity of financial reporting [194]. - There were no significant internal control deficiencies reported during the period [195]. - The company has not initiated any stock incentive plans or employee shareholding plans during the reporting period [192]. - The company plans to maintain its focus on employee training to enhance skills and align with business development [188]. - The company has a competitive salary policy that includes basic, position, and performance-based wages, along with various employee benefits [187]. Future Outlook - The company aims to enhance its digital transformation initiatives to better serve its customers and improve overall service delivery [154]. - The company plans to expand its market presence through strategic partnerships and potential acquisitions in the next fiscal year [154]. - The company is exploring new market segments to diversify its revenue streams and reduce dependency on existing markets [154]. - The company has set a future revenue guidance of 28,916 million for the upcoming fiscal year, aiming for continued growth [154]. - The company is planning to issue shares to specific targets, but there are concerns about the implications of control changes associated with this issuance [175].