Revenue increased but profit did not, Jingchen's chip shipments exceeded 100 million for the first time in 2020

On February 25, Jingchen Co., Ltd. released its 2020 performance report. The company achieved total operating revenue of approximately 2.738 billion yuan, a year-on-year increase of 16.14%; net profit attributable to the parent company's owners was approximately 116 million yuan, a year-on-year decrease of 26.58%.

Jingchen Co., Ltd. stated that due to the impact of the epidemic in the first half of 2020, the demand for orders from the company's downstream terminal customers decreased, and the company's operating income declined to a certain extent year-on-year. The revenue in the first and second quarters decreased by 28.23% and 4.45% year-on-year respectively. At the same time, due to continuous operating investment, related expenses increased year-on-year, resulting in losses.

In the second half of 2020, benefiting from the improvement of the epidemic prevention and control situation, the recovery of domestic market demand and the further increase in overseas market demand, the company's operating performance continued to improve, with operating income hitting a record high for two consecutive quarters. Revenue in the third and fourth quarters increased by 41.95% and 49.44% year-on-year respectively. Among them, the fourth quarter achieved revenue of 973.4859 million yuan, and the net profit in a single quarter exceeded 100 million yuan.

In summary, the company's performance continued to improve in 2020, with annual chip shipments exceeding 100 million for the first time, and net cash flow from operating activities also increased significantly. As the impact of the epidemic gradually weakens, the macroeconomic recovery, and the gradual recovery of upstream and downstream companies, the company's future performance is expected to improve further, but there is a certain degree of uncertainty in the company's specific performance.

With the goal of serving global customers and further expanding and strengthening its global business, the company continues to increase its R&D investment. In 2020, the company incurred R&D expenses of RMB 579,755,200, up 25.56% from the same period last year. During the reporting period, the company implemented an equity incentive plan to attract and retain outstanding talents; and further strengthened its R&D capabilities by expanding the R&D team and establishing new R&D centers.

Regarding the fact that the company's net profit did not grow in sync with revenue, Jingchen shares stated that it was mainly due to the combined impact of equity incentives and increased foreign exchange fluctuations. In 2020, the total amount of share-based payment expenses recognized due to equity incentives was 73.8649 million yuan, an increase of 69.4866 million yuan over the same period last year, and the impact on the net profit attributable to shareholders of the listed company was 69.3804 million yuan (the impact of related income tax expenses has been taken into account).

In the fourth quarter of 2020, the exchange rate of the US dollar against the RMB dropped significantly. The company's full-year exchange loss was 57.2969 million yuan, an increase of 54.0901 million yuan over the same period last year, and the impact on the net profit attributable to shareholders of the listed company was 51.4851 million yuan (the impact of related income tax expenses has been taken into account). Excluding the above impact, the net profit attributable to shareholders of the listed company in the reporting period was 236.9020 million yuan, an increase of 43.31% over the same period last year.