[年报]东山精密(002384):2021年年度报告（英文版）
原标题:东山精密:2021年年度报告（英文版） April 2022 Section I Important Note, Table of Contents and Definitions The Board of Directors, the Board of Supervisors, directors, supervisors and senior management of the Company hereby warrant that the information presented in this Annual Report is true, accurate and complete and this Annual Report is free from any misrepresentations, misleading statements or material omissions, and agree to assume joint and several liabilities for this Annual Report. YUAN Yonggang, Chairman of the Company, WANG Xu, CFO, and ZHU Deguang, Chief Accountant hereby represent that the financial statements contained in this Annual Report are true, accurate and complete. All directors of the Company attended the Board meeting to review this Annual Report. The future plans and other forward-looking statements mentioned in this Annual Report do not constitute a material commitment to any stakeholders, and the realization of them is subject to material uncertainty due to various factors, including changes in the market and the efforts of the Company's operating team. The main risk factors facing the Company are set forth in “Section III – XI. Prospects for Future Development of the Company” in this Annual Report. Investors are kindly reminded to pay attention to the relevant investment risks. According to the profit distribution proposal approved by the Board of Directors, the Company will distribute a cash dividend of RMB 2.00 (inclusive of tax) per 10 shares to all shareholders on the basis of 1,705,913,710 shares, while bonus share and share distribution from capital reserve is nil. Note： This document is a translated version of the Chinese version Annual Report 2021(“2021年年度报告全文”), and the published Chinese version shall prevail when inconsistency occurs, which can be obtained at http://www.cninfo.com.cn. Table of Contents Section I Important Note, Table of Contents and Definitions ........................................................ 2 Section II Company Profile and Financial Highlights .................................................................... 7 Section III Management’s Discussion and Analysis ...................................................................... 11 Section IV Corporate Governance ................................................................................................. 41 Section V Environmental and Social Responsibility ..................................................................... 61 Section VI Significant Events .......................................................................................................... 66 Section VII Changes in Share Capital and Shareholders ............................................................. 82 Section VIII Preferred Shares ......................................................................................................... 93 Section IX Bonds .............................................................................................................................. 94 Section X Financial Report ............................................................................................................. 95 List of References I. The financial statements signed and chopped by Mr. YUAN Yonggang, legal representative, Mr. WANG Xu, CFO, and Mr. ZHU Deguang, Chief Accountant of the Company; II. The original of the auditor’s report stamped with the seal of the accounting firm, and signed and chopped by the certified public accountants; III. The originals of all documents publicly disclosed during the reporting period and related announcements; IV. The original of the Annual Report 2021 signed by the legal representative of the Company; and V. Place for inspection of all the above-mentioned documents: Securities Department of the Company at Buliding 12A, No 99, Taihu East Road, Suzhou, PRC Definitions
Section II Company Profile and Financial Highlights I. Company Profile
Accounting firm engaged by the Company:
√Applicable □ N/A
period: □ Applicable √ N/A VI. Key Accounting Data and Financial Indicators Whether the Company need to retrospectively adjust or restate any accounting data of previous fiscal years? □ Yes √ No
been negative, and the most recent annual auditor’s report indicates that the Company’s ability to continue as a going concern is uncertain? □ Yes √ No Whether the lower of the net profit before and after deduction of non-recurring gains and losses is negative? □ Yes √ No VII. Differences in Accounting Data under China Accounting Standards for Business Enterprises (CASBEs) and Overseas Accounting Standards 1. Differences in net profit and in net assets disclosed in the financial statements during the reporting period prepared under CASBEs and International Financial Reporting Standards (IFRS) □ Applicable √ N/A There was no difference in net profit and in net assets disclosed in the financial statements during the reporting period, which prepared under CASBEs and International Financial Reporting Standards (IFRS) 2. Differences in net profit and in net assets disclosed in the financial statements during the reporting period prepared under CASBEs and overseas accounting standards □ Applicable √ N/A There was no difference in net profit and in net assets disclosed in the financial statements during the reporting period, which prepared under CASBEs and overseas accounting standards. VIII. Key Financial Indicators by Quarter Unit: RMB
corresponding financial indicators set out in any quarter report or semi-annual report of the Company which already disclosed? □ Yes √ No IX. Items and Amounts of Non-recurring Gains and Losses √ Applicable □ N/A Unit: RMB
Disclosure for Companies Publicly Offering Securities – Non-recurring Gains or Losses classified as recurrent profit or loss during the reporting period. Section III Management’s Discussion and Analysis I. Industry Overview and Outlook for the Reporting Period During the reporting period, the industry in which we operate has not undergone any material change as compared with the preceding year. PCB segment: According to the latest report issued by Prismark, the PCB industry is expected to grow by 5.2% in 2022, and the total output value of the global PCB industry will exceed USD 100 billion by 2026. The vigorous development of 5G, AI, Cloud, consumer electronics, new energy and other industries will continuously drive the rapid growth of the PCB industry. According to Prismark, we were ranked the world’s third largest PCB manufacturer in terms of operating revenue in 2021. In reliance on our strength in R&D, production engineering, quality control, delivery and other aspects, we are able to provide high-quality products and services to our customers. Photoelectric display segment: (1) Touch panel products: Along with the rapid development of AI, Big Data and other new technologies, touch panel products are applied in more and more fields, the market size is increasing continuously, the adoption of touch panels in laptops is increasing steadily, and more and more touch panels are used on smart home and smart automotive products to realize human-machine interaction. (2) LED devices: Small-pitch LEDs are characterized by high definition, high brightness, high fidelity, long life and seamless image, and suit different application scenarios. Due to their remarkable advantages, small-pitch LEDs come into favor of the professional display and commercial market and their market penetration has been increasing continuously. In the future, after the products show their cost advantages, they are expected to enter the broader commercial market. In the field of photoelectric display, we are a well-known manufacturer of touch panel modules and LED display devices. Precision manufacturing segment: Our products in the field of precision manufacturing, including base station antennas, filters and other structural components and assemblies for mobile communication, functional and structural components for new energy vehicles, etc., are mainly applied in communication, new energy and other fields. As a global communication technology standard, 5G stands at a critical period of development of technical standards and commercialization. The prospects for the 5G related industry are extensive in the long run. As a well-known supplier of communication equipment and assemblies in the world, we will firmly grasp this opportunity for development. Along with the vigorous development of the new energy vehicle industry, the vehicles tend to be lighter, resulting in an increase in the adoption of aluminum products on new energy vehicles. We provide light aluminum functional and structural components and other products to major carmakers. In the future, our advantages in the coverage of multiple industry chains and provision of integrated solutions will help us improve customer adhesion. II. Main Business Overview during the Reporting Period During the reporting period, the main business conducted by us has not undergone any material changes. We are committed to growing into a supplier of core components for the smartly interconnected world. Our business operations are divided into three main segments: PCB, photoelectric display, and precision manufacturing. Our products are widely applied in consumer electronics, communication equipment, new energy vehicle, industrial equipment, AI, medical appliances and other fields. In the field of PCB, we are committed to providing industry-leading customers with comprehensive PCB products and services, and integrated solutions covering design, R&D and manufacturing of PCB products that are customized to suit different downstream end products. Our products are widely applied on mobile phones, computers, AR/VR devices, wearable devices, servers, communication equipment, new energy vehicles, industrial control equipment, etc. In the field of photoelectric display, we are a well-known manufacturer of touch panel modules and LED display devices. Our touch panel products are mainly used on medium- and large-sized displays for laptops, tablets, smart home devices, on-board displays, etc.; LCM products are mainly used on medium- and small-sized displays for mobile phones, tablets, etc.; and LED products are widely used on outdoor and indoor small-pitch HD displays. In addition, we have successfully launched our new Mini LED backlight products on the market, and are actively developing customers for such products. In the field of precision manufacturing, we mainly provide precision metal structural components and assemblies for customers engaged in the business of communication equipment, consumer electronics and new energy vehicles, etc., including base station antennas, filters and other structural components and assemblies for mobile communication, functional and structural components for new energy vehicles, etc. III. Core Competencies of DSBJ 1. Advantage in products: wide range of products and integrated industry chain In recent years, we have continuously improved our industrial and product mix through acquisitions and internal development, broken development bottlenecks, and introduced superior businesses to build up new growth drivers. At present, our product offerings cover three business segments, namely PCB, photoelectric display and precision manufacturing. We are able to provide customers with a variety of basic and core components for smart interconnection. In the field of PCB and small-pitch LED devices, we have grown into a leading company in the industry. We actively give full play to the synergistic effect of all business segments in R&D, technology, supply chain, products, marketing and other areas, through integration of internal resources and coordinated development, gradually achieve the synergy advantage of vertically integrated industry chain, and strive to provide comprehensive, one-stop and technologically advanced integrated product solutions to customers in the field of smart interconnection, and satisfy the customization requirements of customers to the maximum extent. 2. Advantage in customers: high-quality domestic and foreign customer base We have a mature global sales service system, industry-leading technical capabilities and advanced production capabilities, and our products are popular with top customers in different areas throughout the world and have a high-quality customer base. The remarkable platform superiority of our customers helps us maintain high profitability, reduce credit risks and continuously expand the scope of cooperation with them. In addition, the high-quality customer base has a good demonstration effect, and will help us further enhance our popularity and capability to develop new customers, and acquire larger market shares in the future competition. Our customers come from consumer electronics, communication equipment, industrial equipment, automotive and other industries. Such diversified customer base enables us to fend off the impact of the seasonal and cyclical fluctuations of different industries, and helps us accumulate experience of cooperation with customers from different industries and improve our core competencies while maintaining stable growth of business. production factor We attach great importance to technological innovation in our business development, and drive our development through innovation. Through continuous R&D investments, we now own hundreds of patents and licenses, and have built complete open R&D system and efficient R&D mechanisms, and a global R&D team with outstanding professional level, rich industrial experience and strong innovation capabilities. Through continuous investments in R&D of new materials, new technologies and new production processes, we have continuously explored frontier production technologies for core components in the field of smart interconnection, and laid a solid foundation for serving emerging businesses, such as AR/VR, IoT, Mini LED and new energy vehicles. While improving product technologies, we attach great importance to the innovation and upgrading of production technologies, and have gained some effect in integrated development of informatization and industrialization. By promoting integrated development of informatization and industrialization, we have vigorously implemented intelligent manufacturing and built intelligent factories. 4. Advantage in scale: promote development in reliance on advantage in scale and increase benefits based on synergistic effect Our customers are well-known domestic and international hi-tech companies who have high purchase quantities, set strict requirements for delivery of products, and have high requirements for the scale of production and production efficiency of suppliers. Through years of development and accumulation, we have grown into a supplier of core components for smart interconnection with relatively strong overall capabilities in China. Our large scale of production can satisfy the purchase demands of major downstream customers, creating a big advantage in scale. Our advantage in scale provides us with strong bargaining power in the purchase of raw materials, resulting in reduction of the unit production cost. On the other hand, through effective integration of internal resources, we can reduce operating costs, thereby increasing our superiority over our competitors, further consolidating and enhancing our position in the industry, and improving our core competencies. 5. Advantage in management: advanced concept, complete system and efficient execution We advocate the corporate spirit of “openness, inclusion and pragmatism”, stick to the management principle of “delegation of powers in business operation, support by the platform and centralized supervision”, give full play to the initiative and creativity of grass-roots organizations, and have built a scientific and efficient management system. Our management team owns practical experience in the management of advanced manufacturing industry, has wide global visions, is able to make accurate strategic judgments and decisions on the trends of industry and opportunities for development, and has strong cohesion and executive ability. We are practical and keep forging ahead in day-to-day management and operation, make periodic benchmarking analysis to compare our performance against historic data, budget targets and the results of outstanding peers, and effectively improve our operational quality and efficiency by setting examples and objectives, identifying the breakthrough point, focusing on implementation and reviewing what has been done, to lay a solid foundation for our sustained high-quality development. 6. Advantage in internationalization: promoting the establishment of a “dual circulation” development pattern We closely follow the national development strategy, actively take part in global economic competitions, and continuously enhance integration of high-quality resources of the industry. After completing two overseas acquisitions in 2016 and 2018 respectively, we have successfully entered the PCB industry that has broader prospects for development, optimized our business structure, and laid a solid foundation for our high-quality development. We have realized growth in both scale of operation and operating results through such lead-forward development. In 2019, we established our overseas headquarters and operating entities with different functions in North America, Europe, Southeast Asia and other countries and regions, in order to further improve our global operating capabilities, promote the establishment of a “dual circulation” development pattern, and actively cope with the complicated competition environment. IV. Analysis of Main Business 1. Overview During the reporting period, we faced lots of challenges, such as the complicated global economic situation, repeated outbreaks of COVID-19, continuous rise of the prices of staple commodities, continuous appreciation of Renminbi, periodic shortage of energy and great shock on the global supply chain. However, we acted with one mind, coped with challenges calmly and prioritized stability while pursuing progress. We adopted more moderate business strategies, actively promoted integrated development of informatization and industrialization, and improved our technical capabilities to continuously provide our customers throughout the world with technologically advanced products and services; optimized out organization structure, strictly controlled unnecessary capital expenditures, and enhanced budget management, so that our financial position and cash flows have been continuously improved and optimized. In 2021, our main financial performance grew stably: our operating revenue totaled RMB 31.793 billion, an increase of 13.17% year on year; net profit attributable to shareholders of the listed company was RMB 1.862 billion, an increase of 21.72% year on year; net profit attributable to shareholders of the listed company after deduction of non-recurring gains or losses was RMB 1.577 billion, an increase of 21.17% year on year; net cash flows from operating activities was RMB 3.210 billion, an increase of 9.46% year on year; and as of the end of the reporting period, equity-debt ratio was 61.34%, a decrease of 3.53% year on year. In 2021, we and our subsidiaries were granted with many special honors, including “China ESG Golden Award 2021”, “2021 Model Enterprise for Industrial Internet Development of Jiangsu”, and “Specialized, Refinement, Characteristic and Novelty Little Giant Enterprise”, among others. Below is a brief description of the main activities conducted by us in 2021: (1) The PCB business grew stably and our overall competencies were improved rapidly We center on the requirements of customers, continuously increase R&D investments, and strive to improve our core competencies. During the reporting period, our PCB business realized continued growth of operating revenue and attained good operating results. While maintaining in-depth cooperation with key customers, MFLEX actively developed AR/VR, new energy vehicle and other new businesses, gave full play to its advantages in customer response, product R&D and internal operation, and realized stable growth of main operating results. Multek made active efforts to mitigate the adverse effect caused by periodic power rationing, price rise of raw materials and other factors, and made great breakthroughs in its operating results by integrating resources, improving management capabilities and bringing all internal potentialities into full play. (2) Take full advantage of industry chain and synergistic effect, and actively promote innovation and development We always give priority to development. We have made correct assessments of the situation, and responses and arrangements taking into account of our capabilities and position on the market, and further defined our new “three-year PCB and precision manufacturing and actively cooperated with customers from the new energy vehicle industry in developing solutions. During the reporting period, our operating revenue from the new energy vehicle business increased by 120% as compared with the preceding year. In addition, we have enhanced R&D efforts, closely grasped the new opportunities brought about by the technology innovation and growth of market size of the industry, and accelerated forward-looking deployments. Our headquarters also established the new energy strategy department, in order to actively seek the application and breakthroughs of our products in electrification, intelligentization or otherwise in respect of new energy vehicles, develop new customers of the industry, and build up new growth drivers. (3) Adjust and optimize our compensation policies and system and enhance the training of personnel As our professional and international management structure and corporate strategies have mounted a new step, we need to continuously improve and make breakthroughs in our compensation policy and system, and augment our management and technical staff. During the reporting period, we implemented our 2021 employee stock ownership plan and repurchased certain shares, which would be available under our share incentive and employee stock ownership plans. In the future, we will actively explore the establishment of a more competitive compensation system, strive to enhance the sense of gain and arouse the enthusiasm of the employees, and maximize the value of the Company. In addition, we have established the medium-to-long term talent training plan, in order to promote our future development. (4) Continue to promote integration of informatization and industrialization and improve management efficiency We focus on the development of intelligent manufacturing, and an advanced production model; actively use modern information technologies, give full play to our advantages, build smart factories, and promote high integration of informatization and industrialization, and the application of big data, AI, cloud platform and IoT technologies in our management and operation, and digitalization of management and operation, to drive development with technology. During the reporting period, we completed the smart transmission system of the die bond workshop of Yancheng Dongshan, automatic and smart workshop of MFLEX Yancheng, financial RPA document review system and other projects, which effectively improved our management efficiency. In addition, we and our subsidiaries have been granted many provincial and municipal-level honors due to our excellent achievements in the integration of informatization and industrialization. (5) Stick to the strategy of prudent operations, and promote our high-quality development During the reporting period, we stuck to the strategy of prudent operations, strictly controlled capital expenditures, and continuously adjusted and optimized capital structure and debt structure. The benchmarking, cost reduction and efficiency improvement and other activities conducted by us previously effectively promoted the improvement of our operating performance in 2021. In particular, the operating performance indicators of our LED segment have reached the advanced level of the industry. In view of the high proportion of our foreign currency assets and the impact of the prices of maple commodities on material costs, our finance department, in conjunction with the business departments, flexibly used hedging instruments to mitigate the adverse effect brought about by the fluctuations in foreign exchange rates and prices of maple commodities, and avoid the risk of market fluctuations. In the future, we will adopt more moderate and prudent financial strategies, strive to improve asset turnovers, and promote our high-quality development. （未完）  |