On April 10, KTC released its 2023 annual report. During the reporting period, the company achieved operating income of 13.447 billion yuan, an increase of 16.05% over the same period of last year, and net profit attributable to the parent company of 1.283 billion yuan, a decrease of 15.37% over the same period of last year. This year, under the circumstances of intensifying international and regional disputes, freight instability, and some major products in the destocking stage, all employees of the company are still unremitting, seeking business opportunities in new applications and new fields, promoting the vigorous development of new quality productivity, and helping the company's operating performance to continue to improve!
Key accounting data and financial indicators
Key financial indicators by quarter
The company's main business is the research and development, design, production and sales of intelligent display products, including intelligent interactive tablets, innovative display products, professional display products, smart TVs, etc. The company promotes its products in the field of innovative display products in a way that combines its own brand and customer service. The company has been engaged in the intelligent display industry for 29 years, and has always focused on R&D, design and manufacturing in the field of intelligent display, and is one of the earliest manufacturers dedicated to intelligent display terminal products in China.
In 2005, the company began to produce LCD TV, and on the basis of years of technical precipitation and experience accumulation, the company continues to develop new product fields by virtue of its own R&D and design advantages. In 2010, the company entered the field of commercial display and developed a number of commercial display products such as intelligent interactive flat panels, e-sports displays, splicing screens, and single-screen displays. In 2021, the company launched the innovative display product category, and launched products such as smart sports mirrors under this category. From 2022 to 2023, the company will increase its efforts to develop innovative categories, and support the development of its three own brands "KTC", "Horion" and "FPD", and successively launch new products such as mobile smart screens, smart beauty mirrors, VR glasses, live broadcast machines, projectors, smart display screens, and OLED suspension TVs.
In the future, the company will focus on R&D, design, manufacturing, Relying on the technical precipitation and experience accumulation in sales and service, with the extension and value enhancement of the intelligent display industry chain and business layout as the strategic direction, through the integration of internal and external resources, we will continue to promote R&D capabilities and product innovation and upgrading, continuously improve the company's production capacity and efficiency, create an international intelligent manufacturing ecological chain of the display industry, expand more abundant cultural and creative product categories and services, and strive to become an international leading intelligent manufacturer of intelligent display terminal products.
During the reporting period, the company unswervingly implemented the strategy of driving the company's business development with scientific and technological innovation, continuously consolidated the company's position in the industry, adhered to flexible manufacturing, customized R&D and design of software and hardware in the whole process, differentiated market strategy and relying on high-quality customer resources, independent innovation to develop diversified intelligent display products, continuously explored customers in depth, improved R&D, production and manufacturing capabilities, and increased production capacity and product strength. In the fourth quarter of this year, the company's production capacity was further released, and the shipment volume reached a record high, and the sales volume and sales of comprehensive products achieved steady growth this year.
Among them, the broad development prospects of innovative display products, the business scale grew rapidly during the reporting period, and has developed into one of the company's main business segments. In order to better reflect the company's R&D and innovation results, and more intuitively and accurately display the company's business growth composition, the management split the innovative display products originally included in the intelligent interactive display products and presented them separately, so the presentation caliber of each product in 2022 was changed, and the process of changing the caliber is detailed in "2. Revenue and cost" in this section. After this change, the details of each main business are as follows:
(1) Intelligent interactive display products
During the year, the sales of the company's intelligent interactive display products business were about 3.841 billion yuan, a decrease of 9.00% over the previous year, of which the sales of the intelligent interactive display flat panel business decreased by 32.56%, and the sales of the e-sports display business increased by 169.97%.
During the reporting period, the sales of intelligent interactive display panels decreased to a certain extent due to various factors such as the overseas macro environment and the destocking of overseas customers. In order to maintain the competitiveness and sustainable development of the intelligent interactive display product business in the industry, the company invested 127 million yuan in the research and development of intelligent interactive display products in 2023 to help enhance the competitiveness of the intelligent interactive display flat panel business in the domestic and overseas markets.
During the reporting period, the company's intelligent interactive tablet shipments decreased by 23.54% year-on-year, mainly due to the following reasons: first, after the high growth of overseas educational intelligent interactive tablets in 2021 and the first half of 2022, since the second half of 2022, the demand in the European and American markets has declined due to the impact of the Russia-Ukraine war and inflation;
The professional display products produced by the company include e-sports monitors, commercial displays, medical displays and other products. During the reporting period, the company's shipments of professional display products increased by 173.89% year-on-year, especially the e-sports display business continued the good trend of the previous year, showing a trend of continuous growth. With years of technology accumulation in R&D and manufacturing, R&D breakthroughs in high-precision display technology and good cost control, the company has been able to further expand the market share of e-sports displays, and the shipment of this product will increase to 1.4299 million units in 2023, a year-on-year increase of 241.39%.
(2) Innovative display products
During the reporting period, the sales of innovative display products reached 962 million, an increase of 128.92% over the previous year. Under the company's insistence on continuous cultivation, nearly 20 product lines have been formed. The company actively advertises to enhance the popularity of the three major brands of "KTC", "Horion" and "FPD", and at the same time actively develops cross-border e-commerce business, and uses the company's strong export capabilities to promote products to go overseas and open up new markets. In 2023, the company's R&D investment in innovative display products will be about 217 million, and the product line will focus on new scenarios, and provide broader development prospects for the company's innovative display products by integrating new technologies such as AI artificial intelligence, cloud computing, and the Internet of Things.
During the reporting period, the shipment of innovative display products increased by 272.33% year-on-year, mainly due to the fact that innovative display products meet the diversified application needs of customers, have more user-friendly design and convenient operation methods, and comprehensively provide users with a more comfortable and convenient use experience through the application of cutting-edge technologies such as AI, VR, AR and other cutting-edge technologies in product design.
(3) Smart TV
The smart TV products produced by the company can be divided into OLED TV, Mini-LED TV and LED backlight TV according to display technology. During the reporting period, the company shipped 7.314 million smart TVs, an increase of 37.31% over the previous year, and achieved sales of 7.290 billion yuan, an increase of 32.00% over the previous year. The smart TV business is an important driver of the company's overall sales growth, among which the company's smart TV business has also made great progress in the North American market, and the sales volume of the smart TV business of different sizes have shown an increase in this year. Over the years, the company has been deeply engaged in the field of smart TV, actively exploring the TV market through a variety of business models, and maintaining the vitality of the company's business fundamentals. In terms of R&D, the company invested about 273 million yuan in R&D for the smart TV business in 2023, laying the foundation for the company's overall business;
(4) Design and processing business
Some of the company's customers are large enterprises in the industry, which have LCD panel production business or have certain resource advantages in the procurement channels of LCD panels and other materials, so part of the business of the above-mentioned enterprises and the company adopts raw materials such as liquid crystal panels for customers, and the company provides design and processing business services. With the advantage of many years of rich experience in design and processing, the company is able to provide customized design and production for such customers to meet their diverse delivery needs. During the reporting period, the company's design and processing business showed a year-on-year decline.
During the reporting period, the design and processing business achieved sales of 426 million, accounting for 3.17% of the main business, accounting for a year-on-year decline, and sales decreased by 53.97% compared with the previous year. With the development of the company's intelligent display products, the accumulation of R&D strength, and the improvement of manufacturing and supply chain capabilities, customers prefer to rely on the company's overall product solutions, so the company's business has gradually shrunk.
(5) Parts sales business
The company's parts sales business mainly originates from the following three aspects: first, the upstream of the industrial chain where the company is located is all kinds of parts suppliers, the company has a long-term strategic cooperative relationship with some of the manufacturers, in the case of sufficient supply of upstream manufacturers, the company will purchase some parts for external sales under the premise of ensuring their own production needs, so as to earn a certain price difference; second, the company's main cooperative customers are mostly global well-known brand customers or large brand customers in the regional market, which have higher requirements for product quality, therefore, the company will purchase some parts that do not meet the requirements of the customer level products for external sales; thirdIn the future, the company will focus on the development of MTO technical service cooperation model, use its own advanced manufacturing advantages to provide local LocalKing customers with localized procurement, and provide them with motherboard boards, diaphragms, light bars, smart pens, screen projectors, smart rendezvous, adapters, docking stations, touch frames and other display-related parts.
During the reporting period, the sales volume of parts sales business was about 927 million, an increase of 86.76% over the previous year. The company's parts sales business is mainly LCD panels and other display-related parts. In 2023, the overall price of the LCD panel market fluctuates greatly and rapidly, and the company's orders grow rapidly, which also intensifies the procurement demand and inventory.
During the reporting period, the company signed contracts to hire more than 40 958, 211, double first-class university enrollment, with the continuous expansion of the company's personnel team, but also increased the overall expenditure of employee compensation, R & D expenses, management expenses of staff compensation increased by 11.88%, 17.10% respectively, positively enhanced the company's R & D, management, manufacturing capabilities; In terms of advertising, the company increased advertising and promotion, and the sales expenses and advertising expenses were about 65 million yuan, an increase of 86.94% over the previous year, and the total share-based payment expenses of the company were 89 million yuan, an increase of 302.29% over the previous year The company implements an effective foreign exchange management system, and the company's foreign exchange income for the year is 15 million yuan, a decrease of 91.72% over the previous year, and the profit and loss formed by exchange rate fluctuations are stable.
Composition of operating income