SCAM(SZ:300554)2023-04-26 16:00Financial Performance - The company's operating revenue for 2022 was ¥406,532,427.82, representing a 63.63% increase compared to ¥248,452,404.38 in 2021[22]. - The net profit attributable to shareholders for 2022 was ¥12,830,661.42, a significant turnaround from a loss of ¥75,010,965.42 in 2021, marking a 117.11% improvement[22]. - The net profit attributable to shareholders after deducting non-recurring gains and losses was ¥8,027,106.61, compared to a loss of ¥80,956,660.14 in the previous year, reflecting a 109.92% increase[22]. - The company's total assets at the end of 2022 reached ¥997,662,601.47, a 30.27% increase from ¥765,839,564.96 in 2021[22]. - The net assets attributable to shareholders increased by 33.92% to ¥663,101,040.31 in 2022, up from ¥495,162,163.46 in 2021[22]. - The basic earnings per share for 2022 was ¥0.1328, a recovery from a loss of ¥0.8013 per share in 2021, representing a 116.57% improvement[22]. - The weighted average return on net assets was 2.37% in 2022, a significant increase from -14.03% in 2021, indicating improved profitability[22]. - The net cash flow from operating activities was -¥128,534,993.39 in 2022, a decline of 224.47% compared to ¥103,263,132.95 in 2021[22]. Revenue and Sales Growth - In Q1 2022, the company's revenue was approximately ¥77.29 million, which increased to ¥119.71 million in Q4 2022, showing a growth of 54.8% quarter-over-quarter[24]. - The net profit attributable to shareholders was negative in Q1 2022 at approximately -¥5.64 million, but turned positive to ¥9.00 million by Q4 2022, indicating a significant recovery[24]. - The revenue from superhard material products accounted for 94.93% of total revenue, amounting to approximately ¥385.91 million, which is a 58.92% increase from ¥242.83 million in 2021[69]. - Diamond wire sales volume increased by 144.45% year-on-year, reaching 6,402,235.16 kilometers, driven by strong demand in the slicing industry[72]. - The production volume of diamond wire rose by 160.07% year-on-year to 7,515,617.07 kilometers, reflecting capacity expansion to meet market demand[72]. Market and Industry Trends - The diamond wire saw industry is experiencing a shift towards thinner wire diameters, with the mainstream diameter for monocrystalline silicon cutting evolving to 35-40µm by 2022[34]. - The market demand for diamond wire is projected to grow significantly, with estimates suggesting a rise from approximately 0.90-0.92 billion kilometers in 2021 to 3.58-3.71 billion kilometers by 2025[36]. - The photovoltaic industry is driving the demand for diamond wire, with a notable increase in silicon wafer production, which grew by 40.4% year-over-year in 2021[36]. - The transition from traditional slurry cutting to diamond wire cutting has been accelerated, with diamond wire now fully replacing slurry cutting in monocrystalline wafer production since 2017[33]. Research and Development - The company has developed a production capacity of 7 million km of ultra-fine diamond wire in the first phase of its project, which is expected to stabilize in the fourth quarter, contributing to revenue growth compared to the previous year[49]. - The company has established a research and development center in Japan to enhance its capabilities in diamond grinding wheel products[52]. - The company has completed several R&D projects, including new diamond tool products aimed at enhancing market competitiveness and revenue growth[81]. - The company is focusing on new product development and market expansion to strengthen its position in the semiconductor industry[81]. - Research and development expenses for 2022 were approximately ¥29.60 million, an increase of 22.25% from the previous year[66]. Governance and Compliance - The company reported a comprehensive governance structure, adhering to relevant laws and regulations, ensuring no interference from controlling shareholders in decision-making processes[127]. - The company has established a robust internal control system, with clear responsibilities and a scientific division of labor among its governance bodies[127]. - The company has maintained a complete and independent procurement, production, sales, and R&D system, separate from the controlling shareholder[127]. - The company’s governance practices are in compliance with the requirements set by the China Securities Regulatory Commission and the Shenzhen Stock Exchange[127]. - The company has actively engaged with various investment institutions, showcasing its commitment to transparency and investor relations[124]. Risks and Challenges - The company acknowledges potential risks in its future development outlook, which investors should be aware of[4]. - The diamond wire business accounts for over 80% of total revenue, indicating significant operational risk associated with this segment[113]. - The company faces risks from intensified market competition and potential overcapacity in the diamond wire industry, which could lead to decreased product prices and profit margins[114]. - The concentration of sales revenue among the top five customers is 49.19%, which poses a risk if any major customer experiences financial difficulties[116]. - The company is exposed to risks from rising raw material prices, which could adversely affect product costs and profit margins[121]. Employee and Talent Management - The company has optimized its compensation policy to attract and retain key talent, ensuring competitive salary standards[156]. - The company emphasizes employee training and development, implementing a comprehensive training management system to enhance skills and performance[157]. - The company has a structured approach to employee satisfaction and performance evaluation, ensuring alignment with strategic goals[157]. - The company plans to implement a comprehensive talent recruitment strategy, focusing on high-end talent and recent graduates to build a strong and innovative team[110]. Profit Distribution and Dividends - The company has established a profit distribution policy that prioritizes cash dividends, with a minimum of 10% of distributable profits to be distributed in cash if conditions allow[159]. - The company plans not to distribute profits for the year 2022, with retained earnings carried over to the next year, citing the need for sustainable development amid macroeconomic challenges[167]. - The company’s retained earnings will be utilized to support its healthy and sustainable development in the future[167]. - The company’s profit distribution policy will be reviewed every three years, considering various factors and stakeholder opinions[164]. Subsidiaries and Investments - The company established a wholly-owned subsidiary, Jiangsu Sanhong New Materials Co., Ltd., with a registered capital of ¥80 million, focusing on new material technology research and non-metallic mineral products manufacturing[196]. - The company formed a controlling subsidiary, Nanjing Sanxin Semiconductor Equipment Manufacturing Co., Ltd., with a registered capital of ¥10 million, specializing in manufacturing and sales of specialized equipment and electronic materials[196]. - The company has established Jiangsu San Hong New Materials Co., Ltd. in July 2022 to further its capabilities in the ultra-hard materials sector[103]. Environmental and Social Responsibility - The company has established a comprehensive wastewater treatment system and air pollution control measures, meeting national environmental standards[183]. - The company actively engages in social responsibility, ensuring fair treatment of stakeholders and maintaining transparency in operations[185]. - The company has not yet initiated poverty alleviation or rural revitalization efforts but plans to respond to national calls in the future[188].