HON-Flex(SZ:300657)2022-04-28 16:00Financial Performance - The company's net profit significantly declined during the reporting period, primarily due to the transfer of consumer electronics production capacity to the Jingmen factory and the transformation of the Xianghai factory into a new energy professional factory, which affected operations [5]. - The company incurred substantial losses at the Yingtan factory due to lower-than-expected order transfers and new customer onboarding, resulting in insufficient capacity utilization and high fixed costs [5]. - The company recorded a financial expense of approximately 24.5 million related to convertible bonds in 2021 [6]. - The company reported a revenue of RMB 1.2 billion for the fiscal year 2021, representing a year-over-year increase of 15% [22]. - The gross profit margin improved to 25% in 2021, up from 22% in the previous year [22]. - The net profit attributable to shareholders for 2021 was -¥263,647,491.11, a decrease of 394.75% from ¥89,449,350.92 in 2020 [33]. - The net profit attributable to shareholders after deducting non-recurring gains and losses was -¥300,719,430.47, a decline of 765.59% compared to -¥34,741,561.65 in 2020 [33]. - The net cash flow from operating activities was ¥123,298,765.90, down 61.13% from ¥317,180,718.59 in 2020 [33]. - The company's operating revenue for 2021 was ¥3,195,215,200.63, representing a 21.09% increase compared to ¥2,638,789,653.41 in 2020 [33]. - The company reported a significant drop in quarterly performance, with the fourth quarter showing a net profit of -¥87,387,375.75 compared to a profit of ¥22,588,836.51 in the first quarter [40]. Strategic Initiatives - The company plans to adjust its product structure and implement a dual-driven development strategy focusing on consumer electronics and automotive electronics to stabilize operations and enhance profitability [9]. - The company is actively negotiating with suppliers to mitigate the impact of rising raw material prices and is exploring alternative materials to reduce costs [10]. - The company is expanding its production capacity through technological upgrades and new production lines, which may pose management risks due to rapid growth [10]. - The company plans to expand its market presence in Southeast Asia, targeting a 20% market share by 2025 [22]. - The company is investing RMB 100 million in R&D for flexible electronics technology in the next fiscal year [22]. - A strategic acquisition of a local competitor is anticipated to enhance production capacity by 40% [22]. - The company aims to leverage its technological strengths and market position to capture emerging opportunities in the evolving electronics landscape [54]. - The company is focusing on enhancing its production efficiency and quality through automation upgrades and information system implementations [62]. - The company aims to stabilize its backlight business while expanding into mid-size and mini LED markets, with a strategy to leverage continuous technological innovation [62]. Market Trends and Competition - The company faces intensified competition in the FPC industry, with both domestic and foreign players entering the market, necessitating increased investment in high-end product development [11]. - The ongoing COVID-19 pandemic continues to pose risks to the company's operations, with strict logistics and personnel movement restrictions affecting production and supply chains [12]. - The FPC industry is experiencing rapid growth driven by demand from 5G technology, automotive electrification, and the rise of wearable devices, with significant opportunities identified in the automotive sector and mini LED applications [54]. - The company has seen a notable increase in the demand for FPCs due to the growing trend of lightweight and high-performance electronic products [54]. - The automotive electronics sector is experiencing significant growth, with FPC demand increasing due to its advantages in safety and efficiency, leading to a strategic shift of the main factory to focus on automotive battery production [61]. Research and Development - The company has a strong commitment to R&D and has been actively pursuing technological upgrades to enhance product performance and production processes [55]. - The company is investing in new product development, including flexible pressure sensors and TWS Bluetooth earphones, which have received technical certification and are expected to enter mass production [63]. - The company has obtained a total of 44 authorized invention patents, 285 utility model patents, and 69 software copyrights, with 120 invention patents currently under application [67]. - The company has ongoing R&D projects aimed at enhancing production capabilities and developing competitive products, with several projects completed in 2021 [105]. - Research and development expenses increased by 12% to 200 million RMB, focusing on innovative electronic solutions [199]. Governance and Shareholder Engagement - During the reporting period, the company held 1 annual general meeting and 8 extraordinary general meetings, ensuring equal treatment of all shareholders and facilitating their participation [162]. - The board of directors consists of 9 members, including 3 independent directors, and has held 16 meetings during the reporting period to ensure effective governance [163]. - The company has implemented a performance evaluation and incentive mechanism for senior management, linking their performance directly to compensation [163]. - The company has actively communicated with investors through various channels, ensuring timely and accurate information disclosure [166]. - The company aims to enhance shareholder value through strategic decisions made in its general meetings [173]. Investment and Financial Management - The total investment amount for the reporting period reached ¥611,461,970.79, representing a year-on-year increase of 198.79% [120]. - The company completed significant equity investments, including ¥79,648,700.00 for a 100% stake in Xiamen Hongxin Communication Technology Co., Ltd. and ¥79,200,000.00 for a 51% stake in Xiamen Bian Dian Optoelectronics Co., Ltd. [121]. - The total amount of raised funds was ¥126,739.01 million, with ¥111,394.80 million already utilized, and the remaining unused funds amounting to ¥17,563.60 million [132]. - The company reported a cumulative loss of ¥19,963,638.38 from its investment projects, indicating challenges in achieving expected returns [124]. - The company has ongoing major non-equity investments, including ¥51,182,960.82 for the Xiang'an factory flexible printed circuit board technology upgrade and expansion project, with a cumulative actual investment of ¥234,652,036.97 [125].