EASTCOM(600776)2017-04-28 16:00Financial Performance - In 2016, the company's operating revenue was CNY 1,980,288,987.42, a decrease of 44.47% compared to CNY 3,565,925,468.23 in 2015[19] - The net profit attributable to shareholders was CNY 91,625,023.65, down 46.04% from CNY 169,799,041.36 in the previous year[19] - The basic earnings per share decreased to CNY 0.0729, a decline of 46.04% from CNY 0.1352 in 2015[21] - The weighted average return on net assets was 3.09%, down 2.74 percentage points from 5.83% in 2015[21] - The net cash flow from operating activities was negative CNY 58,567,690.44, compared to negative CNY 10,806,712.79 in 2015, indicating a significant decline[20] - The company reported a revenue of 1.98 billion yuan for 2016, a decrease of 44% year-on-year, while the gross margin for main business increased by 6.86 percentage points to 20.32%[41] - Net profit for the year was 92 million yuan, down 46% compared to the previous year[41] - The company reported a total profit of CNY 68,774,206.67 for 2016, down 34.4% from CNY 104,790,807.84 in the previous year[174] - The comprehensive income for the current period amounts to CNY 92,272,567.09, compared to a comprehensive income of CNY 169,336,339.96 in the previous period, indicating a decrease of about 45.4%[187] Asset and Liability Management - The company's total assets increased by 3.48% to CNY 3,846,529,343.90 at the end of 2016, compared to CNY 3,717,306,997.20 at the end of 2015[20] - The company's net assets attributable to shareholders increased slightly by 0.69% to CNY 2,978,584,261.70 at the end of 2016[20] - The company's total liabilities increased to CNY 827,199,744.63 from CNY 719,035,790.21, reflecting a growth of approximately 15.06%[166] - Cash and cash equivalents at the end of the reporting period were CNY 691,513,089.06, compared to CNY 637,228,926.10 at the beginning of the year, representing an increase of approximately 8.49%[165] - Accounts receivable rose to CNY 797,003,404.14 from CNY 700,600,476.92, marking an increase of about 13.76%[165] - Inventory levels increased to CNY 727,854,921.20 from CNY 635,303,527.39, reflecting a growth of approximately 14.55%[165] Business Strategy and Development - The company optimized its business structure by eliminating low-value-added businesses and expanding into new sectors such as enterprise networks and information security[28] - The smart self-service equipment sector is expected to grow, with the company focusing on cash and non-cash self-service terminal products and expanding into sectors beyond banking[30] - The information communication technology service sector is enhancing its capabilities to meet the technical service demands of operators and equipment manufacturers, driven by the growth of 4G and the upcoming 5G commercial rollout[31] - The company is positioned to benefit from the increasing market opportunities in the specialized network communication sector, particularly in public safety[29] - The company achieved significant growth in the enterprise network and information security sector, capitalizing on the G20 Hangzhou Summit, resulting in historical performance[42] - The company launched new intelligent self-service products, including large cash recycling machines, and entered new markets such as rural credit cooperatives and city commercial banks[43] Research and Development - R&D expenditure for 2016 was 164.97 million yuan, with 60 new patent applications filed, including 26 invention patents[36] - Research and development expenditure increased by 2.68% to approximately CNY 165 million, indicating a commitment to innovation[46] - Total R&D investment amounted to ¥164.97 million, representing 8.33% of operating revenue, with 19.19% of the workforce dedicated to R&D[61] Market Position and Competition - The company’s market share in the financial electronic product sector improved, with significant breakthroughs in non-cash intelligent terminals in major banks[38] - The foreign market revenue grew by 25% to CNY 123 million, driven by increased exports of cash self-service equipment[55] - The company is focused on expanding its market influence in non-cash products within the intelligent self-service equipment industry[82] - The company faces market competition risks, operating in a highly competitive environment with numerous small-scale enterprises[84] Corporate Governance and Compliance - The company appointed Zhongzheng Zhonghuan Accounting Firm as the financial auditor for the 2016 fiscal year, replacing Ruihua Accounting Firm after five years of service[93] - The company maintained a good integrity status, with no significant debts or court judgments unfulfilled during the reporting period[95] - The company has a structured remuneration system for its executives, based on performance assessments and board approvals[139] - The company has established a sound internal control system in compliance with relevant laws and regulations, ensuring effective governance[147] Shareholder Information - The total number of ordinary shareholders reached 83,401 by the end of the reporting period, an increase from 78,681 at the end of the previous month[117] - The largest shareholder, Putian Oriental Communication Group, holds 570,712,740 shares, representing 45.44% of total shares[119] - The company has no strategic investors or general legal entities among its top ten shareholders[120] Future Outlook - Future outlook suggests a projected revenue increase of 15% for the next fiscal year, driven by new product launches and market expansion strategies[132] - The company plans to increase its workforce by 10% to support growth initiatives and enhance operational efficiency[132] - The company aims to enhance its ICT service capabilities through partnerships and business expansion in design, software development, and IT services[77]