Affected by the 5G layout, Runxin Technology's revenue and net profit both declined in 2018

Runxin Technology released its 2018 annual report. The company achieved revenue of 1.693 billion yuan, a year-on-year decrease of 7.45%; net profit was 15.78 million yuan, a year-on-year decrease of 71.01%; non-net profit was 14.90 million yuan, a year-on-year decrease of 71.93%.

Runxin Technology stated that the main reasons for the year-on-year decline in annual performance were: (1) In 2018, due to cash flow problems at Phicomm Technology (Hong Kong) Co., Ltd., the normal operation of its business was affected. Based on the principle of prudence, the company made a special bad debt provision of RMB19.7404 million for the overdue accounts receivable of this customer with impairment risk, and made an inventory impairment provision of RMB2.3889 million for the inventory under this customer. (2) In 2018, the three major operators began to fully promote the 5G network pilot and upgrade, and significantly reduced the traditional network and terminal procurement plan. The company's broadband, WLAN network, radio frequency, audio and other communication businesses experienced a significant decline, and sales performance and gross profit margin were lower than expected. Under this mid- to long-term market change trend, the company has been making industrial layout in 5G communication modules and 5G radio frequency front-end modules in recent years, and has opened up new fields such as industrial Internet of Things, smart home, and automotive electronics.

It is worth noting that among the four main businesses of Runxin Technology, the revenue, profit and gross profit margin of digital communication chips and system-level application products, RF and power amplifier devices, audio and power amplifier devices have all declined, while the profit of the capacitor business is relatively considerable. Among them, the revenue of digital communication chips and system-level application products was 623 million yuan, the operating profit was 49.68 million yuan, and the gross profit margin was 7.97%; the revenue of RF and power amplifier devices was 380 million yuan, the operating profit was 34.24 million yuan, and the gross profit margin was 9.01%; the revenue of audio and power amplifier devices was 170 million yuan, the operating profit was 10.71 million yuan, and the gross profit margin was 6.29%.

At the same time, Runxin Technology released its first quarter report of 2019. The company achieved total operating revenue of 336 million yuan, a year-on-year decrease of 9.86%; net profit attributable to shareholders of listed companies was 7.3158 million yuan, a year-on-year decrease of 44.98%; net profit attributable to shareholders of listed companies after deducting non-recurring gains and losses was 5.5493 ​​million yuan, a year-on-year decrease of 57.62%.