“Science and Technology Innovation Board Daily”, March 30 (Reporter Wu Xuguang) On the afternoon of March 29, Zhimingda held the 2023 annual results briefing. The “Science and Technology Innovation Board Daily” reporter and many investors asked questions about the company's current order status, the progress of deferred fund-raising projects, 2024 performance expectations, and the integration of foreign equity investment business.

Zhimingda is a private military enterprise focusing on embedded computer modules and solutions. Looking back at 2023, during the reporting period, the company achieved operating income of 663 million yuan, an increase of 22.58% year on year, net profit attributable to shareholders of listed companies of 96.26 million yuan, an increase of 27.73% year on year; net profit after deduction was 61.77 million yuan, a decrease of 13.13% over the same period last year.

At the performance meeting, Jiang Hu, co-chairman and general manager of Zhimingda, said that based on the current situation where revenue growth is not increasing profit, the company will adopt a series of measures to reduce costs and increase efficiency by internally controlling the scale of operations and the pace of expansion; externally, strengthening supply chain management, reducing raw material costs, and improving product delivery efficiency.

Referring to the company's 2024 order size forecast, Jiang Hu said that it is expected that new orders in 2024 will increase significantly compared to 2023.

“We believe that the industry will be in a period of steady growth for two years after the 14th Five-Year Plan. Based on expectations for the industry in 2024, the company's revenue and net profit are expected to grow steadily in 2024.” When talking about Zhimingda's revenue and net profit growth expectations this year, Qin Yin, secretary of the company's board of directors, added.

Qin Yin further explained that Zhimingda's core business, ballistic products, have been growing rapidly for 4 consecutive years since 2020. Among them, the growth rate of the ammunition business was around 80% in 2023, and the growth rate gradually slowed down by 2024; due to the exponential increase in the value of stand-alone machines produced by the company in 2024, the growth rate of airborne products this year is expected to be higher than in 2023.

Furthermore, the company's distribution plan was a highlight. In the face of a decline in net profit after deduction, Zhimingda still insisted on profit distribution and the transfer of capital reserves to increase share capital.

The company plans to distribute a cash dividend of 2.10 yuan (tax included) for every 10 shares to all shareholders. At the same time, it plans to transfer 4.9 shares for every 10 shares to all shareholders using the capital reserve fund. After this transfer, the company's total share capital will increase to 112 million shares.

Regarding the purpose of increasing 4.9 shares for every 10 shares, Zhimingda's board secretary Qin Yin said at the performance meeting that the reason the company increased its share capital was to increase share capital, reduce stock prices, improve stock liquidity, and facilitate investors' investment.

Some industry professionals analyzed the “Science and Technology Innovation Board Daily” reporter that although some individual stocks with small circulation markets are willing to use high turnover to improve liquidity. However, we also need to be alert. It is not ruled out that some company shareholders use this to push up the stock price and then reduce their holdings. Investors should beware of chasing high duvet covers.

It should be pointed out that Zhimingda issued an announcement on March 28 stating that the company has 30.373,600 restricted shares, accounting for 40.37% of its total issued share capital. The sales restrictions will be lifted and listed for circulation on April 8.

Regarding the company's subsequent holdings reduction plan, Zhimingda's board secretary Qin Yin said that there is currently no plan to reduce holdings.

At the results meeting, the “Science and Technology Innovation Board Daily” noticed that the recent situation of Zhimingda's foreign equity investment company Mingkesi was also frequently asked by investors. As early as 2021, Zhimingda, which was only listed on the Science and Technology Innovation Board, acquired part of Minkos's shares at a premium of 34.51 times, which once attracted market attention.

After a lapse of 2 years, how did Minkos, which was acquired at a high premium, perform?

The “Science and Technology Innovation Board Daily” reporter combed through Zhimingda's annual report and found that as of 2023, its participating subsidiary Minkos had achieved revenue of 53.5016 million yuan and net profit of 46.627 million yuan.

According to the original acquisition and gambling agreement, Minkos promised a positive net profit for 2023; achieve a cumulative net profit of not less than 30 million yuan from 2023 to 2025, and complete the development and production of 100 models of ADC chips; at the end of 2025, if the performance does not meet the promised performance, the company has the right to choose share repurchase or share compensation.

Looking at it now, Minkos's net profit in 2023 did not reach a positive figure. Next, this means that if after the 2025 performance commitment period expires, Minkos still does not meet the performance agreement for the performance commitment period, Zhimingda has the right to choose share repurchase or share compensation.

Regarding Minkos's loss of performance and subsequent repurchase plans, Qin Yin, the board secretary of Zhimingda, said that the core chip field of the signal chain where Mingxwei is located is in a period of rapid development in the context of localized substitution, but it will take time to accumulate technology and expand the market, and the company in it will also take time to develop. Minkos is still working hard, and the company will give them greater support.

Although Zhimingda expressed support for Mingke's development, it has already begun to transfer part of its shares in the target to stop losses.

According to Zhimingda's 2023 annual report, during the reporting period, the company transferred shares corresponding to Mingke Siwei's registered capital of 12.3493 million yuan to Anhui Traffic Control Investment Information New Infrastructure Private Equity Fund Partnership (Limited Partnership), Sun Wei, etc. at a price of 6.72 yuan per 1 yuan of registered capital.

Regarding the reason for this share transfer, Zhi Mingda said that on the basis of the increase in the valuation of the investment project Minkos and the appreciation of the company's investment, the company will partially transfer its shares to redeem part of the investment income, which will help the company reduce investment costs and improve the efficiency of the use of capital.

Furthermore, the progress of the company's fund-raising project has also attracted investors' attention.

On the evening of December 7, 2023, Zhimingda issued an announcement to postpone the IPO fundraising project. Apart from the 100% progress and completion of the R&D center's technological transformation and supplementary working capital, the embedded computer capacity expansion project is scheduled to be extended from the end of 2023 to July 2024.

At the results meeting held on the afternoon of March 29, some investors were concerned and asked: “How is the company's fundraising project progressing? When is it expected that the product will launch?”

In response, Jiang Hu, co-chairman and general manager of Zhimingda, said that the embedded computer capacity expansion project plant has been completed and will be put into operation after renovation.