On the evening of April 24, Dimensity Technology disclosed its 2023 annual report. According to the annual report, Tianji Technology achieved an operating income of 412 million yuan, down 31.22% from the same period last year, and a net profit of -71.0505 million yuan, down 2204.6% from the same period last year.
From a quarterly point of view, from the first quarter to the fourth quarter of 2023, the company's net profit will be a loss, and the loss in the fourth quarter will further expand, with a loss of nearly 30 million yuan. However, compared with the company's quarterly revenue, the fourth quarter revenue accounted for the largest proportion of the whole year, but the net profit in the current quarter was the worst in the whole year.
Image source: Company announcement
Gross margin declined
Dimensity Technology is an IT services and solutions provider. In recent years, the company has carried out digital transformation to try to further enhance its competitiveness.
According to CCID Consulting Research, China's IT service market will grow steadily from 2023 to 2028, and the size of China's IT service market will reach 302.37 billion yuan in 2024, a year-on-year increase of 6.6%. The market size will reach 469 billion yuan in 2028.
In addition, the cloud computing market in mainland China is still in a stage of rapid development. The China Academy of Information and Communications Technology predicts that by 2025, the overall market size of cloud computing in mainland China will exceed one trillion yuan. With the construction and deployment of cloud infrastructure, the consulting, migration, development, operation and maintenance, and sustainable operation requirements related to enterprise cloud migration will also arise.
It can be seen that behind the active transformation and upgrading of Dimensity Technology in recent years, it is that the industry market in which it is located has a good space for development.
However, at least from the current and retrospective performance of the company in recent years, although the company is in an industry with potential for growth, its performance is difficult to satisfy investors.
According to the company, one of the main reasons for the further expansion of the performance loss is the decline in operating income due to the intensification of market competition, the overall gross profit margin of the project is declining, and the company's net profit is declining year-on-year.
According to the disclosure of Dimensity Technology's 2023 annual report, the gross profit margin of the company's IT support and maintenance products, IT outsourcing service products, and IT professional service products decreased by 8.91%, 3.9%, and 2.96% year-on-year, respectively. Among them, the company's IT support and maintenance products and IT outsourcing service products are core business products, with revenue accounting for more than 70% of total revenue.
The former chairman of the board of directors was detained
On February 28 this year, Tianji Technology disclosed two announcements, one is that Su Yujun, the chairman of the company, was detained on suspicion of collusion in bidding and resigned from all positions in the company; The two are father and son.
Regarding this emergency, Dimensity Technology said that the relevant matters are still under investigation. A lawyer told a reporter from the China Securities Journal that according to the Criminal Law of the People's Republic of China, if Su Yujun is convicted of collusion in bidding and the circumstances are serious, he may face up to three years in prison or criminal detention.
It is worth mentioning that because of this incident, the company's 2023 financial report was issued with an unqualified audit report with an emphasis paragraph.
According to investigation, Su Bo previously entered the company by participating in the private placement. According to the announcement at that time, after the release of the fixed increase plan in April 2016, it was issued in November 2017 after several adjustments. According to the issuance report, Su Bo subscribed for 14,339,600 shares for 190 million yuan. After the issuance, Subo held 4.53% of the shares, becoming the second largest single shareholder of the company at that time.
After Su Bo entered the listed company, in September 2018, Tianji Technology elected Su Yujun as the chairman, and Lu Wenxiong, the actual controller at the time, retreated behind the scenes. It is worth mentioning that at that time, Su Yujun did not directly hold shares of Dimensity Technology, and his election as chairman also surprised the outside world and was subject to regulatory inquiries.
Just more than half a month after the company disclosed that Su Yujun was suspected of collusion in bidding, the company disclosed that it had received a warning letter from the Shanghai Securities Regulatory Bureau.
After investigation, the company received two government subsidies on May 22, 2023 and November 10, 2023, with an amount of 1.396 million yuan and 1.306 million yuan respectively, both of which are government subsidies related to income and directly included in the current profit and loss, accounting for 45.28% and 42.36% of the audited net profit attributable to shareholders of listed companies in 2022 (-3.083 million yuan).
However, Tianji Technology did not fulfill its information disclosure obligations for the above information in a timely manner through the interim report, and did not disclose the above two government subsidies until August 11, 2023 and February 2, 2024, respectively.
Based on the above facts, the Shanghai Securities Regulatory Bureau took administrative supervision measures of issuing a warning letter to Dimensity Technology, Su Yujun, then chairman of Dimensity Technology, and Nie Ting, secretary of the board of directors of the company.
"Change of office and change of people"
In October last year, the company held the second extraordinary general meeting of shareholders in 2023, deliberated and passed the "Proposal on the Proposed Change of Accounting Firm", and agreed to appoint Rongcheng Certified Public Accountants (Special General Partnership) (hereinafter referred to as "Rongcheng Certified Public Accountants") as the company's 2023 audit institution.
In March this year, the company received a relevant letter of explanation issued by Rongcheng Certified Public Accountants. According to the explanatory letter, Rongcheng Certified Public Accountants, as the company's 2023 audit institution, originally appointed Ye Chun, Wan Bin and Zheng Jiping as the signing certified public accountants, and Guo Xiaopeng as the project quality control reviewer to provide audit services for the company. In view of the work adjustment of the originally appointed signing certified public accountant Ye Chun and the project quality control reviewer Guo Xiaopeng, after the arrangement of Rongcheng Certified Public Accountants, it is planned to replace the signing certified public accountants with Wan Bin, Li Yue and Zheng Jiping, and replace the quality control reviewer with Yao Binxing to continue to complete the relevant work.
However, it is worth noting that, judging from the disclosure, some of the signed CPAs after the adjustment are "newcomers" in the industry and do not have rich audit experience.
According to the announcement, Li Yue became a Chinese certified public accountant in 2020, began to engage in the audit business of listed companies in 2013, and began to practice in Rongcheng Certified Public Accountants in 2020; In addition, Zheng Jiping became a Chinese certified public accountant in 2022, began to engage in the audit business of listed companies in 2020, and began to practice in Rongcheng Certified Public Accountants in 2022, and has not signed an audit report of a listed company in the past three years.
As a project partner, Wan Bin became a Chinese certified public accountant in 2007, began to engage in the audit business of listed companies in 2006, began to practice in Rongcheng Certified Public Accountants in 2019, and signed the audit reports of three listed companies in the past three years.
Reviewer: Xu Jinzhong Editor: Zhang Jing Proofreader: Ya Wenhui Producer: Li Ruoyu Signed: Fei Yangsheng
