Netac(SZ:300042)2024-04-02 16:00Financial Performance - The company reported a significant decline in revenue and gross margin due to oversupply in the storage market, leading to a drop in product prices [4]. - Rental income, patent revenue, and government subsidies decreased year-on-year, contributing to a reduction in net profit compared to the previous year [4]. - The company's operating revenue for 2023 was ¥1,087,597,455.99, a decrease of 38.63% compared to ¥1,772,140,185.83 in 2022 [26]. - The net profit attributable to shareholders for 2023 was -¥43,764,196.30, representing a decline of 170.44% from ¥62,134,042.30 in the previous year [26]. - The net cash flow from operating activities was -¥85,433,598.30, down 162.77% from ¥136,098,693.00 in 2022 [26]. - Basic and diluted earnings per share for 2023 were both -¥0.2184, a decrease of 170.43% from ¥0.3101 in 2022 [26]. - The company reported a significant drop in non-recurring profit and loss, with a net profit of ¥51,829,932.80 in 2023, down 218.28% from ¥43,821,486.80 in 2022 [26]. - The company has indicated uncertainty regarding its ability to continue as a going concern, as the net profit before and after deducting non-recurring gains and losses has been negative for the last three accounting years [27]. - The company's revenue after deductions for 2023 was ¥1,077,190,773.52, compared to ¥1,735,560,772.73 in 2022 [27]. - The total revenue for Q2 2023 was CNY 362.41 million, while the net profit attributable to shareholders was negative at CNY 27.42 million, indicating a significant decline in profitability [29]. - The company achieved operating revenue of 1,087.60 million yuan in 2023, a decrease of 38.63% year-on-year [49]. - The decline in revenue and profit was primarily due to weak terminal demand and high inventory levels leading to an oversupply in the storage market [49]. Market and Product Development - The company has diversified its product offerings to include SSDs, DRAM, embedded storage, and mobile storage, targeting various applications including wearables and consumer electronics [41]. - The company is focusing on expanding its market presence in the wearable device and consumer electronics sectors, leveraging its brand influence [41]. - The company continues to invest in new product development, launching safer and faster solid-state drives and memory products [48]. - The company has developed a complete PCIe 4.0 SSD product line and is working on the next generation PCIe 5.0 SSDs [54]. - The company has launched new products such as the NV7000-t PCIe 4.0 SSD and ZM3 mobile SSD to meet diverse customer needs [54]. - The company reported a significant increase in demand for storage products driven by the growth of AI and IoT industries [46]. - The company is focusing on optimizing its product lines in response to market trends and customer demands, particularly in the DRAM sector [53]. - The company launched new high-performance storage solutions, including the CF2000 storage card with a read speed of up to 1750MB/s, targeting high-quality video content creation [57]. - The company plans to continue expanding its solid-state flash drive product line to meet market demand for ultra-high-speed, large-capacity, portable storage solutions [57]. Operational Strategy and Cost Management - In response to market fluctuations, the company has adjusted its operational strategy to control costs and maintain product gross margins [4]. - The company has implemented changes in accounting policies effective January 1, 2023, impacting the financial reporting of deferred tax assets and liabilities [27]. - The company has successfully maintained the validity of its key patent despite challenges, with the latest ruling in its favor [62]. - The company is actively managing operational risks associated with its Hong Kong subsidiary, including strict inventory control and regular audits to address receivables collection challenges [138]. - The company is implementing strategies to enhance product value through performance and quality improvements, while also expanding into emerging markets and new customer segments [132]. Research and Development - The company plans to accelerate R&D for high-end memory products like DDR4 and DDR5, and solid-state drives with new interface protocols, to meet growing demands in cloud computing, AI, and smart vehicles [119]. - Research and development (R&D) expenditure amounted to 17,867,285.38 yuan, representing 1.64% of operating revenue, down from 2.56% in 2022 [81]. - The number of R&D personnel decreased by 37.93% to 90, with the proportion of R&D staff in total employees dropping from 24.70% to 15.65% [80]. - The company is committed to ongoing research and development to maintain its competitive edge in the rapidly evolving technology landscape [131]. Governance and Management - The company has a complete labor management system, with all employees signing labor contracts and no personnel holding concurrent positions in shareholder units [149]. - The governance structure includes a shareholders' meeting, board of directors, and supervisory board, with no overlap in institutional settings with shareholders [151]. - The board held a total of 46 meetings during the reporting period, including 13 regular meetings and 33 temporary meetings [184]. - The company has a financial department that operates independently, maintaining separate bank accounts and tax obligations from its shareholders [152]. - The company has established long-term partnerships with key suppliers to manage raw material costs, particularly in response to fluctuations in the RMB exchange rate, which could affect product gross margins [136]. Future Outlook and Strategic Plans - The company plans to enhance its marketing strategy, increasing the marketing budget by 30% to boost brand awareness [165]. - The company is exploring potential mergers and acquisitions to enhance its competitive position in the market [158]. - The company has set a performance guidance for 2024, aiming for a revenue increase of at least 15% compared to 2023 [158]. - The company is considering strategic acquisitions to enhance its technology portfolio, with a budget of 300 million RMB allocated for potential deals [165]. - The company plans to establish joint ventures as part of its future investment strategy, with proposals submitted for approval in May and November 2023 [192]. Employee and Compensation Policies - The total remuneration paid to directors, supervisors, and senior management during the reporting period amounted to 6.2524 million yuan [179]. - The company plans to issue year-end bonuses for senior management based on the resolutions from the board meetings [177]. - The company ensures that the remuneration decisions comply with the established compensation management system [177]. - A total of 84 training sessions were organized throughout the year to enhance employee skills and knowledge [197]. Risks and Challenges - The company faces risks related to raw material price fluctuations, particularly for flash memory, which could impact cost control and operational performance [129]. - The company has faced increased competition in the flash memory and mobile storage market, necessitating adjustments in product development and marketing strategies to maintain market share and profit margins [132]. - The company anticipates unrecoverable receivables totaling CNY 16.66 million, with a potential tax impact of approximately CNY 2.50 million due to inability to deduct asset write-offs from taxable income [133].