eGOVA(SZ:300075)2022-12-03 10:10Financial Performance - In 2018, the company's main business revenue increased by 7.14%, but net profit attributable to shareholders decreased by 30.9% [3] - The company faced a significant loss of over 40 million due to the subsidiary Digital Zhitong, which impacted the consolidated financial statements by approximately 70 million [3] - Operating cash flow improved significantly, reaching 176 million in 2018, a nearly 600% increase compared to the previous year [4] - By the end of 2018, the company had a cash balance exceeding 800 million, providing a solid foundation for future development [4] Business Structure and Growth - In Q1 2019, revenue showed substantial growth, with operating service revenue increasing by 23% to 558 million, accounting for 43.29% of total revenue [5] - The company aims to enhance its business structure by focusing on software, system integration, and operational services, with operational services showing the most growth [5][6] - The company is transitioning to cloud-based services, with a focus on urban management and industry cloud solutions [7][8] Challenges and Strategic Adjustments - The company acknowledged the impact of industry competition and structural adjustments on revenue growth, which fell below 10% in 2018 [9][13] - Rising labor costs, which increased by 26.6% to 330 million in 2018, have affected overall profitability [6] - The company is implementing a new employee stock incentive plan to alleviate wage pressure and improve performance [6] Future Outlook - The company is focusing on urban operation centers and cloud platforms, particularly in the context of 5G technology and smart city applications [14] - There is confidence in the sustainable development of the subsidiary Baoding Jindi, which has consistently exceeded performance commitments [11][12] - The company plans to leverage market opportunities, such as the Digital China Conference, to enhance its market presence [14]