Core Viewpoint - The financial performance of Shanghai Mingzhi Electric Co., Ltd. has significantly declined over the past two years, primarily due to the relocation of production bases and the underachievement of new project capacities [1][2][3] Group 1: Financial Performance - In 2023, the company achieved operating revenue of 2.543 billion yuan, a decrease of 14.09% year-on-year, and a net profit attributable to shareholders of 140 million yuan, down 43.20% [1] - In 2024, the operating revenue further declined to 2.416 billion yuan, a decrease of 4.99%, with net profit dropping to 78 million yuan, down 44.53% [1][2] Group 2: Production Base Relocation - The relocation of the Shanghai production base began in the second half of 2022 and was completed in the first half of 2023, with production capacity transferred to the newly built Taicang smart manufacturing base [5][6] - The relocation was initiated due to a government notice in March 2020, and a compensation agreement was reached in October 2022 [3][4] Group 3: New Projects and Capacity Issues - The company has several new projects that have not yet reached their designed capacities, including the LED control and drive product expansion project and the brushless motor capacity increase project [8][10] - The LED control and drive product expansion project was initially planned to produce 425,000 units but was reduced to 120,000 units due to increased market competition and demand fluctuations [8][9] - The brushless motor capacity project is expected to be completed by December 2024, with anticipated revenues of 24.97 million yuan [10][11] Group 4: Market Conditions and Challenges - The company faces challenges from reduced market demand due to global economic uncertainties, trade tensions, and increased competition in the LED driver market [8][9] - The average sales price and gross margin for the LED control and drive products have been affected by market conditions, with gross margins of 29% and 39% in 2023 and 2024, respectively [8][9] - The company’s production and sales have been impacted by the relocation process and the overall market environment, leading to fluctuations in revenue and profitability [6][8]