Financial reporter Liu Jian
On April 12, Dawei Co., Ltd. released its 2023 annual report, the company mainly focuses on the two major businesses of new energy and semiconductor storage, but its performance has declined significantly. In 2023, the company's revenue will be 733 million yuan, a year-on-year decrease of 12.55%, and the net profit loss attributable to the parent company will be 66.6261 million yuan, which is the first loss since the company's listing in 2008. It is worth noting that the company's gross profit margin has continued to decline for many years, from 40.59% in 2016 to 5.32% in 2023.
The first loss since listing
According to the annual report, Dawei Co., Ltd. will achieve operating income of 733 million yuan in 2023, a year-on-year decrease of 12.55%, and a net profit loss attributable to the parent company of 66.6261 million yuan, a year-on-year decrease of 516.96%, and a profit of 15.9792 million yuan in the same period in 2022. The decline in revenue was mainly due to the decrease in the smart terminal business and the impact of industry cycles. At the same time, in response to the new energy industry development policy and accelerating the promotion of the Chenzhou lithium battery new energy industry project, the company has invested relevant personnel and funds, which is also one of the factors affecting the net profit.
2023 is the first year of parallel promotion of the company's two major business segments of "new energy + automobile" and "semiconductor storage + intelligent terminal", in the face of the cycle and fluctuation of the industry, the company will continue to deepen and expand its existing business, seek progress while maintaining stability, and at the same time comply with the national new energy industry development policy and market development trend, allocate resources, accelerate the promotion of the Chenzhou lithium battery new energy industry project, and continue to inject new momentum into the company's business segment.
Regarding the decline in performance, the company said that in order to focus on the focus of business development, the company optimized and adjusted the business in the field of intelligent terminals, and the intelligent terminal business decreased, superimposed on the impact of the industry cycle, and the company's sales revenue declined year-on-year. In 2023, in terms of operating income, the semiconductor storage business continued to make efforts in the slow development stage of the industry, actively increased its market share, and achieved revenue of 580 million yuan, a year-on-year increase of 42.32%.
In addition, affected by unfavorable factors such as the relatively weak demand for semiconductor storage and intelligent terminal industries, in 2023, the company will provide for impairment of inventory, goodwill and other assets with signs of impairment, and the company will open the Chenzhou lithium battery new energy industry project of Dawei Co., Ltd. in December 2022, and invest relevant personnel and funds for the project, and the company's net profit loss attributable to the parent company in 2023 will be 66.6261 million yuan.
After auditing, the company's total assets in 2023 will be 730.5047 million yuan, a year-on-year decrease of 9.32%, and the net assets attributable to shareholders of listed companies will be 607.3556 million yuan, a year-on-year decrease of 9.62%.
Founded in 2000 and listed on the Shenzhen Stock Exchange in 2008, Dawei Co., Ltd. is headquartered in Shenzhen, Guangdong Province.
The financial report shows that the company's performance since its listing in 2008 is average, and the highest year of net profit attributable to the parent company was in 2010, reaching 40.37 million yuan, and since then the overall state of decline, and the net profit attributable to the parent in 2023 is the lowest in the history, and it is the first loss.
The gross profit margin of semiconductor storage business was only 2.32%
It is worth noting that the company's gross sales margin has been declining since 2016, from 40.59% in 2016 to 5.32% in 2023.
The main products of the company's traditional automotive business are eddy current retarders and hydraulic retarders. During the reporting period, the traditional automobile business achieved operating income of 49.1633 million yuan, a year-on-year increase of 23.20%, and the proportion of revenue increased from 4.76% to 6.71%.
The storage business and the intelligent terminal business together constitute the two pillars of the development of the digital economy. The main products of the semiconductor storage business are NAND and DRAM storage, and Dawei Chuangxin storage products can be widely used in personal computers, vehicles, IDC, industrial control, medical, rail transit, intelligent electronics and other fields. The intelligent terminal business specifically includes the research and development and sales of computer software and hardware such as graphics cards provided by the subsidiary Dawei Weconex, which is suitable for desktops, servers, etc., and can be used in desktop office, industrial control, intelligent computing and other fields, and is compatible with domestic CPU, domestic firmware and domestic operating system.
During the reporting period, the company's semiconductor storage business achieved operating income of 580 million yuan, a year-on-year increase of 42.32%, and the proportion of revenue also increased to 79.09%. However, its gross profit margin is declining, only 2.32% in 2023, a year-on-year decrease of 5.92%.
The smart terminal business has declined sharply, and the operating income in 2023 will be 91.8845 million yuan, a year-on-year decrease of 75.76%, accounting for 12.54% of revenue. In terms of gross profit margin, it was only 5.14%, down 5.60% year-on-year.
In addition, many key figures in the company's financial report are not optimistic.
It is worth noting that the net operating cash flow in 2023 will be -40.1765 million yuan, which is significantly different from the net profit of the current year, mainly due to the increase in inventory strategic reserves. According to the financial report data, the company's inventory value at the end of 2023 was 94.9971 million yuan, accounting for 13% of total assets, an increase of 2.28% compared with the beginning of 2023.
In terms of R&D investment, the company has a downward trend. In 2023, the R&D investment will be 6.4939 million yuan, a year-on-year decrease of 49.20%. In the past 10 years, the company's R&D investment has been declining as a whole, and the R&D investment in 2023 is the lowest in 10 years.
There are still uncertainties in lithium battery projects
The popularity of new energy vehicles has made lithium battery a popular track. Lithium, a key raw material for batteries, is in growing demand. The company has also begun to actively deploy the coordinated development of new energy and automobile business, hoping that the lithium battery sector can become another pillar of the company, but the company's lithium battery industry project still has great uncertainty.
On December 28, 2022, the company signed the "Investment Cooperation Agreement" with the People's Government of Guiyang County, Chenzhou City, Hunan Province, and opened the Chenzhou lithium battery new energy industry project of Dawei Co., Ltd., and built a comprehensive utilization of lithium-containing mineral resources and a lithium battery industry chain project, and a new energy special vehicle base project.
During the reporting period, the company's new energy business mainly includes the investment and construction of Dawei's Chenzhou lithium battery new energy industry project, and starting from the second half of 2023, in order to actively expand the upstream and downstream resources of the industrial chain, the company's extensive access is not limited to lithium carbonate entrusted processing and trade business.
As of the end of 2023, Dawei has invested more than 9,000 yuan in the Chenzhou lithium battery new energy industry project (including the investment in bidding for prospecting rights, the purchase of land for the lithium carbonate project, etc.).
During the reporting period, the company has made the following important progress:
In the upstream lithium mineral resources, Guiyang Dawei Mining, a wholly-owned subsidiary, has won the prospecting right for kaolin mine in Dachongli Mining Area, Guiyang County, Hunan Province, with an area of 3.58 square kilometers, and the company has fully launched exploration work.
At the midstream lithium salt production end, Dawei Co., Ltd. Chenzhou Lithium New Energy Industry Guiyang with an annual output of 40,000 tons of battery-grade lithium carbonate project (phase I) has an annual output of 20,000 tons of battery-grade lithium carbonate, and the project is currently under construction.
At the application end of downstream lithium resources, the company conducts feasibility studies and planning and design with relevant partners for the application industry chain of lithium battery cathode materials, batteries and new energy special vehicles.
The company actively lays out integrated projects from lithium mining, beneficiation to lithium carbonate smelting, and at the same time forms synergies with the new energy special vehicle business to build a whole industrial chain of lithium battery new energy.
During the reporting period, Dawei's Chenzhou lithium battery new energy industry project has been awarded the key project of industrial enterprise expansion and upgrading in Hunan Province, and the kaolin mine survey project in Dachongli mining area of Guiyang County has become the first project in Hunan Province to obtain an exploration permit among the four key mining rights listed for sale in November 2023. The company has set up a number of project companies in Guiyang County, and the core team has been successfully established.
In 2024, the company will focus on promoting the Chenzhou lithium battery new energy industry project to ensure the realization of the annual business goals. However, the company also said that Dawei Chenzhou lithium battery new energy industry project is still in the early stage of construction preparation, and future lithium industry market changes, including the current and expected available resources of lithium, the competitive landscape of the lithium industry, the end market demand of lithium products, scientific and technological development, government policies and global and regional economic conditions, etc., may have an impact on the company's project progress and benefits.