Leon(SZ:300603)2021-04-26 16:00Financial Performance - The company's revenue declined significantly due to the COVID-19 pandemic, with major operations in Xinjiang being halted for extended periods, leading to a substantial drop in business income [4]. - The company reported a continuous increase in bad debt provisions due to insufficient fiscal capacity of government clients, impacting liquidity and financial costs [4]. - The telecommunications value-added business revenue declined due to a shrinking market, with overall revenue from this segment decreasing throughout the year [4]. - The company's operating revenue for 2020 was ¥1,006,429,531.55, a decrease of 27.17% compared to ¥1,381,970,363.87 in 2019 [20]. - The net profit attributable to shareholders in 2020 was -¥913,232,779.03, representing a decline of 848.40% from ¥122,023,926.38 in 2019 [20]. - The net cash flow from operating activities was -¥38,245,570.09 in 2020, a decrease of 119.01% compared to ¥201,222,401.86 in 2019 [20]. - The total assets at the end of 2020 were ¥2,683,856,253.94, down 27.55% from ¥3,704,376,631.00 at the end of 2019 [20]. - The net assets attributable to shareholders decreased by 38.30% to ¥1,481,179,730.37 at the end of 2020 from ¥2,400,799,788.76 at the end of 2019 [20]. - The basic earnings per share for 2020 was -¥2.21, compared to ¥0.30 in 2019, reflecting a decline of 836.67% [20]. - The company reported a significant loss in the fourth quarter, with a net profit attributable to shareholders of -¥923,888,777.41 [23]. - The company has indicated uncertainty regarding its ability to continue as a going concern due to negative net profits in recent years [20]. - The company has not distributed any cash dividends or bonus shares for the year, indicating a focus on retaining capital for recovery and growth [6]. - The total distributable profit for 2020 was reported as a negative RMB 643,731,948.47, indicating financial challenges [159]. Business Strategy and Expansion - The company plans to strengthen its traditional business in Northwest China while actively expanding into South China, East China, Southwest China, and overseas markets to increase market share [5]. - The company aims to enhance its layout in data centers and digital city sectors, establishing a market-oriented R&D system to boost core competitiveness [5]. - The company plans to focus on new product development and market expansion strategies in the upcoming fiscal year [30]. - The company operates over 30 Tier 3+ data centers nationwide, with more than 8,000 racks and bandwidth exceeding 2.5T [35]. - The company has successfully expanded its business through both organic growth and strategic acquisitions, including the acquisition of Wo Chi Technology and Dayi Internet [32]. - The company plans to expand its data center and cloud services, aiming to increase the number of available cabinets to 30,000-50,000 over the next three to five years [73]. - The company is actively exploring business integration with edge computing and has obtained a CDN license to support its service offerings [50]. - The company aims to enhance its one-stop cloud service offerings and provide comprehensive security solutions to address customer needs [135]. - The company plans to strengthen its communication network technology services and expand into civilian aviation and road traffic sectors, while also targeting markets outside the northwest region [137]. Operational Challenges - The overall gross profit margin for engineering projects has decreased, reflecting challenges in new business development and operational costs [4]. - The company faced challenges in its telecommunications value-added services due to stricter operator control policies and increased competition in the internet business [75]. - The company has not experienced any significant changes in the feasibility of its fundraising investment projects [123]. - The company is actively managing accounts receivable to mitigate risks associated with delayed payments and potential bad debts due to economic conditions [147]. - There is a risk of goodwill impairment if acquired subsidiaries do not meet operational targets, which could adversely affect the company's financial results [148]. - The company acknowledges potential risks in its future operations and emphasizes the importance of investor awareness regarding these risks [6]. - The company reported a significant increase in financial expenses by 129.41% to approximately ¥20.73 million, primarily due to increased borrowing costs [97]. Research and Development - Investment in R&D increased by 30%, focusing on innovative technologies and new product development to enhance competitive advantage [195]. - The company has implemented a talent cultivation plan to strengthen its core management and technical teams, ensuring continuous R&D capability [62]. - The company's R&D investment in 2020 amounted to ¥34,020,801.93, representing 3.38% of total revenue [98]. - The number of R&D personnel decreased to 159 in 2020, accounting for 21.96% of the workforce [98]. Market Position and Customer Base - The company has established a long-term stable partnership with nearly 300 government departments and enterprises across various industries, including internet and finance [35]. - The customer base for data center services includes leading internet companies like Alibaba and Baidu, as well as traditional industries and government units [48]. - The company has integrated AI and cloud computing technologies into its services, improving the effectiveness of solutions provided to government clients [33]. - The company has developed a comprehensive digital marketing solution utilizing big data analytics for clients in e-commerce, gaming, and entertainment sectors [61]. - The company has accumulated nearly 200 effective billing codes with major telecom operators, covering various billing types to meet diverse terminal product and value-added service needs [60]. Compliance and Governance - The company has committed to maintaining transparency and compliance with regulatory requirements, ensuring accurate and timely information disclosure [194]. - The company confirmed that its business operations comply with relevant laws and regulations [199]. - The company has maintained a reliable internal control system to ensure the accuracy of financial reports [198]. - The company is committed to ensuring the independence of its operations and management from its controlling shareholders [197]. - The company has not faced any administrative penalties from the China Securities Regulatory Commission in the last twelve months [199]. - The company has a long-term commitment to ensure that its fundraising activities align with the relevant regulations of the Shenzhen Stock Exchange [182]. Shareholder Relations - The company has engaged in investor communications, including discussions with institutional investors regarding business development [152]. - The company’s cash dividend policy aligns with its articles of association and shareholder resolutions, ensuring transparency and protection of minority shareholders [158]. - The company has a commitment to ensure that the investment of raised funds will not lead to any competition with its controlling shareholders [183]. - The company has established a performance compensation agreement with multiple investors to ensure accountability and transparency in financial reporting [178]. - The company is actively managing its share issuance and compensation obligations to maintain market stability and investor confidence [169].