China Net Finance, May 11 Recently, Tongding Internet released its 2023 annual report. In 2023, the company will achieve revenue of 3.349 billion yuan, a year-on-year increase of 1%; net profit attributable to shareholders of listed companies was 237 million yuan, a year-on-year increase of 88.72%; deducted non-net profit of 46 million yuan, a year-on-year increase of 139.89%. In addition, the company made an asset impairment provision of 97 million yuan, which is expected to reduce the total profit of 97 million yuan in 2023.
Source: Tongding Internet 2023 annual report
Regarding the performance, Tongding Internet said that on the one hand, due to the relatively sufficient relevant orders and the company's cost reduction and efficiency increase, the revenue and gross profit margin of communication cables and power cables increased year-on-year; On the other hand, non-recurring gains and losses increased to about $190 million.
At present, the main business of Tongding Internet is optoelectronic communication and network security. Among them, the optoelectronic communication business includes communication cables, power cables, optical fiber cables, communication equipment and other products, contributing more than 95% of revenue in 2023.
In terms of products, in 2023, the revenue of communication cables will be 1.205 billion yuan, a year-on-year increase of 7.54%; power cable revenue was 1.058 billion yuan, a year-on-year increase of 3.04%; the revenue of optical fiber and cable was 613 million yuan, a year-on-year decrease of 9.17%; the revenue of communication equipment was 359 million yuan, a year-on-year decrease of 8.70%; The revenue of Internet security was 92 million yuan, a year-on-year increase of 29.63%. The above products accounted for 35.99%, 31.59%, 18.29%, 10.71% and 2.76% of the revenue, respectively.
Source: Tongding Internet 2023 annual report
Regarding the decline in the revenue of the optical fiber and cable business, Tongding Internet said that in recent years, the demand of the domestic optical fiber and cable market has fluctuated greatly, resulting in fluctuations in product prices. In 2023, Tongding Interconnection's optical fiber sales volume will decrease by 77.21% year-on-year to 245,500 core kilometers, and the inventory will increase by 78.88% year-on-year.
Source: Tongding Internet 2023 annual report
In the annual report, whether the compensation disclosed by Tongding Internet can be recovered has attracted much attention.
In 2016, Tongding Internet acquired a controlling stake in Byzoro Networks through acquisition. At that time, the two parties to the transaction also signed a performance compensation agreement, that is, they promised that the non-net profit deducted by Byzoro Networks from 2017 to 2019 would not be less than 99 million yuan, 137 million yuan and 155 million yuan respectively.
Since Byzoro Networks has not fulfilled the above-mentioned promised performance, the counterparty shall fulfill its compensation obligations in accordance with the performance compensation agreement. In this regard, Tongding Internet said in the annual report that according to the agreement, the performance compensation commitment party should compensate the company for shares and cash. However, as of the end of 2023, some of the shares acquired by the original shareholders of Byzoro Networks have been sold, pledged, frozen, etc., and there is a risk that the company's performance compensation cannot be recovered on time.
In April this year, Tongding Internet announced the latest progress of the above-mentioned compensation. As of the announcement date, the counterparty had 21,178,900 remaining shares to be compensated, 352 million yuan in cash to be compensated and 5,797,500 yuan in cash dividends to be returned.
In addition, Tongding Internet also faces the risk of customer concentration. In 2023, the total sales amount of the company's top five customers will be 2.415 billion yuan, accounting for 72.10% of the total annual sales. Among them, the sales of the top three customers accounted for 36.02%, 15.42% and 11.06% respectively.
Tongding Internet said that at present, the sales objects of the company's products are mainly concentrated in operators such as mobile, telecom, and Unicom, and the customers are relatively concentrated. In the future, while further consolidating and expanding the existing market, the company will vigorously expand overseas and non-operator markets to reduce the risk of customer concentration.
(Editor in charge: Zhu He)