ECT(SZ:300679)2023-08-24 16:00Financial Performance - The company's operating revenue for the reporting period was ¥1,364,770,418.26, a decrease of 9.25% compared to ¥1,503,821,361.85 in the previous year[93]. - Net profit attributable to shareholders was ¥125,145,044.26, down 35.80% year-on-year[197]. - The net profit after deducting non-recurring gains and losses was ¥117,174,059.62, a decrease of 34.65% compared to the previous year[197]. - Basic earnings per share decreased by 36.17% to ¥0.30[197]. - The net cash flow from operating activities increased significantly by 191.53% to ¥223,688,541.58[197]. - Total assets at the end of the reporting period were ¥5,807,686,770.32, a slight decrease of 0.04% from the end of the previous year[197]. - Net assets attributable to shareholders increased by 2.41% to ¥4,218,233,475.95[197]. - The company reported a significant decrease in investment activities, with cash flow from investing activities at -¥197,385,746.04, down 140.48% from ¥487,652,614.57[93]. - The company's financial expenses increased by 59.78% to -¥10,828,999.43, primarily due to reduced loan interest expenses[93]. Environmental Compliance - The total wastewater discharge from the subsidiary Henghe Dingfu in the first half of 2023 was 81,808 tons, compliant with the approved annual discharge limit of 936,329 tons[11]. - Henghe Dingfu's wastewater treatment facility has a processing capacity of 6,200 tons per day, sufficient to meet normal production needs[11]. - The company obtained an environmental permit for urban sewage discharge valid from June 2023 to June 2028[6]. - The subsidiary Henghe Dingfu's wastewater discharge indicators met the requirements of the Electronic Industry Water Pollutants Discharge Standard (GB 39731-2020)[11]. - The company has established an environmental self-monitoring plan for key pollutant discharge subsidiaries, ensuring compliance with relevant standards[15]. - The company has completed the technical transformation project for the PCB production line, passing environmental acceptance on April 20, 2023[6]. - The company has received an environmental permit for its subsidiary in Vietnam, valid since August 11, 2022[7]. - The company has implemented a wastewater treatment process involving filtration, coagulation, sedimentation, and neutralization to ensure discharge standards are met[11]. Product and Market Overview - The company specializes in micro electrical connectors and interconnection systems, with a focus on high-reliability and high-performance products, achieving international standards in technology[45]. - The company's core products include micro RF connectors and cable assemblies, which are critical components in smart mobile terminals and emerging smart devices[48]. - The company achieved a revenue of 351,975,973.02 CNY from RF connectors and cable assemblies, a decrease of 23.05% year-on-year[70]. - Automotive connector revenue increased by 45.79% year-on-year, reaching 313,851,127.98 CNY, with a stable profit margin of 39.43%[70]. - The company’s electromagnetic compatibility components revenue decreased by 18.44% year-on-year, totaling 389,249,030.06 CNY[70]. - The company’s soft board revenue declined by 25.85% year-on-year, amounting to 150,724,765.40 CNY[70]. - The company is a core supplier for major smartphone brands, including Xiaomi, Oppo, and Samsung, and has established a strong position in the automotive connector market[58]. - The company has accumulated a significant client base, including major automotive manufacturers and well-known TIER 1 suppliers, becoming a core supplier for them[55]. - In Q1 and Q2 2023, global smartphone shipments were 270 million and 258 million units, representing year-over-year declines of 13% and 10% respectively[43]. - In the first half of 2023, domestic smartphone shipments were 67.6 million and 64.3 million units, with year-over-year declines of 11% and 5% respectively[43]. - In the first half of 2023, the sales volume of new energy vehicles in China reached 3.747 million units, a year-over-year increase of 44.1%, with a market penetration rate of 28.3%[44]. Investment and Fund Management - The total amount of raised funds is ¥185,966.81 million, with ¥26,359.26 million invested during the reporting period[102]. - Cumulative investment of raised funds reached ¥133,436.78 million, with a balance of ¥72,585.94 million remaining in the dedicated account as of June 30, 2023[102]. - The project for increasing capital in Hefei Electric Connector has a total investment commitment of ¥96,187.43 million, with 78.28% of the investment progress completed[103]. - The Shenzhen headquarters production base upgrade project has a total investment commitment of ¥76,896.99 million, with 74.44% of the investment progress completed[103]. - The cumulative change in the use of raised funds amounts to ¥82,383 million, representing 44.30% of the total raised funds[102]. - The company has invested ¥57,242.60 million in the Shenzhen headquarters production base upgrade project[102]. - The company has not achieved the expected benefits from the investment projects as of the reporting period[106]. - The company used raised funds to replace pre-invested self-raised funds totaling ¥135,439,130.84[109]. - As of the end of the reporting period, the total amount of unused raised funds was ¥725,859,400, with ¥300,000,000 approved for purchasing financial products and ¥425,859,400 remaining in the special account[109]. - The disclosure of the usage of raised funds is consistent with actual usage, with no issues of untimely or inaccurate reporting[109]. Credit Risk and Financial Instruments - The company does not report any discrepancies between net profit and net assets under foreign accounting standards and Chinese accounting standards during the reporting period[17]. - The company continues to recognize financial assets based on the extent of involvement in transferred financial assets, assessing risks and rewards associated with value changes[24]. - For financial assets that meet derecognition conditions, the difference between the carrying amount and the consideration received is recognized in current profit or loss[25]. - The company uses market quotes to determine the fair value of financial assets or liabilities in active markets, adjusting for any restrictions on the asset itself[25]. - Expected credit losses are calculated based on the weighted average of credit losses, reflecting the difference between contractual cash flows and expected cash flows[26]. - The company measures loss provisions for all contract assets and receivables based on expected credit losses over the entire duration[28]. - If credit risk has significantly increased since initial recognition, the company measures loss provisions based on expected credit losses over the entire duration[30]. - The company assesses whether credit risk has significantly increased by comparing default risk at the reporting date with that at initial recognition[31]. - Evidence of credit impairment includes significant financial difficulties of the issuer or debtor, breaches of contract, and the likelihood of bankruptcy[34]. - The company evaluates expected credit losses based on reasonable and supportable information about past events, current conditions, and forecasts of future economic conditions[34]. - Financial instruments are grouped based on common credit risk characteristics for the assessment of expected credit losses[34]. - The company assesses expected credit losses for accounts receivable based on historical loss experience and current economic conditions, categorizing them into several groups for calculation[75]. - The aging analysis method is used to estimate expected credit losses for accounts receivable, referencing historical experience and current conditions[75]. - The company classifies receivables into risk categories, including a low-risk category for receivables from related parties and government[77]. - The company uses historical credit loss experience to estimate expected credit losses for other receivables, similar to accounts receivable[77]. - The company categorizes receivables into groups based on credit risk characteristics for expected credit loss calculations[75]. Strategic Direction and Future Outlook - The company plans to enhance the intelligence level of automotive electronics and increase production capacity for automotive connectors in the coming years[106]. - The company aims to ensure continuous revenue growth while aligning with long-term development goals in the 5G sector[135]. - The company is focusing on enhancing production capacity and technological upgrades to meet the increasing demand in the market[135]. - The investment in the 5G sector is part of the company's strategic plan to deepen its market presence and adapt to new application requirements[135]. - The company plans to expand its market applications beyond smartphones, focusing on automotive electronics and non-smartphone consumer electronics[152]. - The company aims to enhance its competitive position in the automotive connector market, particularly in RF connectors, as part of its strategic direction[152]. - The company is exploring acquisition opportunities to strengthen its market presence and diversify its product offerings[181]. - Future outlook indicates potential market expansion and new product development strategies to enhance competitive positioning[181]. Employee and Shareholder Engagement - The first temporary shareholders' meeting had a participation rate of 31.20% on April 18, 2023[160]. - The annual shareholders' meeting had a participation rate of 38.69% on May 22, 2023[160]. - The total number of participants in the employee stock ownership plan was adjusted from 172 to 171 due to voluntary resignations[194]. - The first phase of the employee stock ownership plan allowed for the unlocking of 40% of the total equity, corresponding to 2,321,515 shares[191]. - The company has implemented a stock incentive plan to motivate employees and align their interests with shareholders[188]. Risks and Challenges - The company faces risks related to rising procurement prices of raw materials and electroplating services, which constitute over 50% of production costs[153]. - The company has a significant reliance on the smartphone industry, with approximately 60% of sales revenue coming from smartphone clients, indicating a potential risk if the industry experiences major downturns[151]. - Exchange rate fluctuations, particularly the RMB/USD rate, may adversely affect sales and net profit, with hedging strategies in place to mitigate risks[155]. - The procurement cost of automotive RF connector harnesses is significantly high, and fluctuations in major raw material prices could impact production and profitability[155]. - The development of 5G millimeter-wave technology is crucial for new product promotion, and any delays could extend the transition period between old and new products[155]. - The company has not engaged in derivative investments or entrusted loans during the reporting period[141][142]. - The company has not sold any significant assets or equity during the reporting period[143][144].