Company Operations and Structure - The company operates over 800 direct and franchise stores across 22 provinces and 4 municipalities in China[7]. - As of December 31, 2021, the company had more than 100 subsidiaries under its umbrella[7]. - The group employed 3,599 employees as of December 31, 2021, down from 4,669 in 2020, with total compensation and employee benefits amounting to approximately RMB 351,560 thousand[72]. Financial Performance - Total revenue for the year was RMB 10,243,930 thousand, a decrease of RMB 3,306,220 thousand or 24.40% compared to RMB 13,550,150 thousand in the previous year[15]. - The company reported a net loss of RMB 3,596,985 thousand for 2021, compared to a net profit of RMB 114,512 thousand in the previous year[15]. - Mobile phone sales reached 3,525 thousand units, a decrease of 4,430 thousand units or 55.69% from 7,955 thousand units in the previous year[15]. - Revenue from mobile communication devices and accessories was RMB 9,787,866 thousand, a decrease of RMB 3,458,458 thousand or 26.11% from RMB 13,246,324 thousand in the previous year[25]. - Service revenue from mobile operators increased to RMB 250,879 thousand, an increase of RMB 112,248 thousand or 80.97% compared to RMB 138,631 thousand in the previous year[27]. - Other service revenue was RMB 205,185 thousand, up RMB 39,990 thousand or 24.21% from RMB 165,195 thousand in the previous year[27]. - Gross profit for the year was RMB 575,788 thousand, a decrease of RMB 600,903 thousand or 51.07% from RMB 1,176,691 thousand in the previous year, with a gross margin decline from 8.68% to 5.62%[29]. - Administrative expenses increased to RMB 885,110 thousand, an increase of RMB 615,527 thousand or 228.33% from RMB 269,583 thousand in the previous year[34]. - Financial asset impairment losses were RMB 943,037 thousand, an increase of RMB 921,086 thousand from RMB 21,951 thousand in the previous year, primarily due to the impact of COVID-19[35]. - The income tax credit for the year ended December 31, 2021, was RMB 308,364 thousand, a dramatic increase of 3,704.61% from RMB 8,105 thousand in 2020, primarily due to tax credits arising from losses[40]. Strategic Focus and Future Plans - The company has been focusing on multi-channel operations and diversified service models to adapt to the retail industry's evolving environment[7]. - The company aims to enhance market competitiveness and brand influence through new retail business and overseas expansion[7]. - The company is committed to offering a comprehensive range of services, including mobile hardware and accessories sales, value-added software services, and after-sales support[7]. - The company aims to provide comprehensive and convenient pre-storage services for partners and customers through its competitive omnichannel marketing capabilities[19]. - In 2022, the company aims to leverage opportunities in the smart home and IoT product markets, focusing on enhancing its own store operations and expanding into more operator stores[19]. - The company plans to strengthen strategic cooperation with potential brands and leading technology brands to capture market growth opportunities[19]. - The company will enhance its supply chain management while adjusting its street store layout and increasing the proportion of mall stores[19]. - The company anticipates that 2022 will be a year of explosive growth for 5G-related products, leveraging its established foundation in the 5G sector to drive sales revenue[77]. - The company plans to enhance its operational capabilities in smart home and IoT products, focusing on upgrading its retail stores and expanding partnerships with telecom operators[77]. - The company aims to strengthen its presence in shopping malls and optimize the quality of street-side stores as part of its layout strategy[77]. Governance and Management - The company appointed several non-executive directors, including Mr. Xie Hui and Mr. Jia Zhao Jie, who have extensive experience in strategic management and trade operations[85][86][87]. - The supervisory board consists of three members, including a worker representative, with a term of three years, allowing for re-election[94]. - Ms. Yang Hui serves as the chairperson of the supervisory board and has a background in financial management, previously holding a position as the financial vice president at Zhuhai Huafa[98]. - The company emphasizes the importance of financial oversight, including the review and verification of financial reports and the supervision of management actions[94]. - The independent non-executive directors, such as Mr. Lu Ting Jie and Mr. Lu Ping Bo, contribute to the governance and strategic direction of the company[90]. - The company has a structured approach to appointing directors and supervisors, ensuring a mix of experience and expertise in its leadership[92]. - The financial management system and policies are being enhanced under the guidance of experienced professionals within the company[98]. - The company has a focus on compliance and risk management, with dedicated roles for legal and risk control within its trade operations[87]. - The board of directors is responsible for making key decisions and overseeing the company's strategic initiatives[90]. - The company aims to maintain transparency and accountability in its financial activities through regular audits and reviews by the supervisory board[94]. Risks and Challenges - The company faces risks related to lease properties, including the inability to renew leases or renew at higher rents, which could impact overall operating performance[110]. - Inventory backlog risk exists due to the short product life cycles, necessitating effective inventory management to mitigate operational risks[112]. - The company has implemented a group fund pool management model to manage cash flow pressures from inventory and receivables[113]. - The COVID-19 pandemic significantly impacted the group's business, leading to major impairments in inventory, accounts receivable, and other receivables due to widespread store closures[74]. - The company faced foreign currency risk primarily from bank deposits and other receivables denominated in USD, EUR, and HKD, without hedging against such risks[68]. Shareholder Information - The total issued share capital of the company was 732,460,400 shares as of December 31, 2021[128]. - As of December 31, 2021, Liu Donghai holds 168,362,098 domestic shares, representing 49.86% of the relevant share class and 22.99% of the total share capital[148]. - Liu Donghai, Liu Hua, Liu Wencui, Liu Yongmei, and Liu Wenli collectively hold 169,337,902 domestic shares, accounting for 50.14% of the relevant share class and 23.12% of the total share capital[148]. - Zhuhai Huafa Group Co., Ltd. owns 337,700,000 domestic shares, which is 100% of the relevant share class and 46.10% of the total share capital[155]. - Dawn Galaxy International Limited holds 42,000,000 H shares, representing 10.64% of the relevant share class and 5.73% of the total share capital[155]. - The company has not entered into any management contracts for significant portions of its business during the year ended December 31, 2021[142]. - The remuneration policy for directors and senior management is based on the company's operating performance and individual performance[143]. - The board of directors is authorized to distribute and pay dividends based on the financial status and relevant regulations[120]. Compliance and Corporate Governance - The company has maintained compliance with the corporate governance code, with the roles of Chairman and CEO being separated after June 30, 2021[182]. - The audit committee reviewed the company's annual performance and financial statements for the year ending December 31, 2021, prepared in accordance with international financial reporting standards[179]. - The company has not changed its auditor in the last three years, with Ernst & Young being appointed as the auditor for the financial year ending December 31, 2021[186]. - The supervisory board actively monitored the company's overall management activities and financial risks, ensuring compliance with the company's articles of association[191]. - The supervisory board emphasized the importance of internal control and risk management, providing suggestions for improvement based on reports received[193]. - The company is committed to high standards of corporate governance to protect shareholder interests and enhance corporate value[199].
迪信通(06188) - 2021 - 年度财报