On the afternoon of March 8, 2018, 1249.hk held a results conference for the 2017 fiscal year, which was attended by Mr. Ren Xuenong, Chief Financial Officer and Executive Director, Mr. Wang Xiaofeng, Chief Marketing Officer and Vice President, and Mr. Zhou Yufeng, Deputy Chief Financial Officer.

The company's revenue in 2017 was 5.913 billion yuan, an increase of 38.6% over the same period last year, and its net profit was 199 million yuan, an increase of 30.9% over the same period last year. It is recommended to pay a final dividend of HK35 cents per share.

The company's revenue mainly comes from four businesses.They are:

1. Audio products
two。 Video products
3. Intelligent and supporting products
4. Other business

Audio productsMainly include wireless Bluetooth speakers, sound bullies, headphones, home theaters and small speakers and other products, is the bulk of the company's revenue, accounting for 77% of the total revenue. This segment generated 4.55 billion yuan in revenue in 2017, an increase of 60% over the same period last year. Audio is mainly represented by Bluetooth and headphones. Under audio products, this part of the growth is mainly driven by new audio and headphones, with revenue of 3.54 billion yuan, an increase of 83% over the same period last year, while sales of traditional audio products have declined, and it is expected that traditional audio products will continue to decline in the future.

Video productsIt mainly includes products such as DVD players and Blu-ray players, and set-top boxes, which brought in 730 million yuan in revenue last year, down 37% from the same period last year. The decline is mainly due to the impact of video products such as ipad and smartphones. Independent audio products are expected to have opportunities in the future, but they will not go as well as audio products.

Intelligent and supporting productsIt mainly includes intelligent voice speakers and their supporting components, intelligent voice modules, intelligent gateways and other products, which brought the company 460 million yuan in revenue last year, an increase of five times, but mainly because of a small base.

Other businessMainly parts and R & D, revenue of 160 million yuan, down 14% from the same period last year.

Finance:

In 2017, the company's gross profit margin fell by 1% to 13.9%, mainly due to resources, raw materials and RMB appreciation. At present, the company has no interest-bearing liabilities, and its cash and its equivalents reach 850 million yuan, an increase of 16% over the same period last year. The beautiful cash flow has laid a good foundation for the company to expand its scale and develop new projects in the future.

Focus on future development:

In terms of R & D investment, the company is relatively high in the whole industry, and currently R & D revenue accounts for 4% of the total revenue. In the future, the company will focus on the development of sound bully and headphone product business, increase R & D investment, including solid intelligence, acoustics laboratory, and continue to strengthen the technical advantages in intelligent voice. At the same time, the company forecasts 10% revenue growth for 2018.

The following is a question and answer compiled by Gelonghui:

Q1: the company's gross profit margin fell in 2017 because of the appreciation of the RMB. How much is the appreciation of raw materials? what will it be like in 2018?

A: in terms of the change of gross profit margin, the exchange rate is related to the cost of materials, the company's raw materials are imported and domestic, the appreciation of RMB affects the cost of domestic materials, and there is a hedge against imported materials. The exchange rate was 7% at the beginning of last year and 6.5% at the end of last year. The exchange rate had a greater impact on the gross profit margin in the second half of the year, and the exchange rate affected the gross profit margin by 2%. But at the same time, imported materials have a hedging effect, so the overall decline of 1%, the exchange rate has a greater impact on the gross profit margin.

For the future, if domestic material costs rise, all manufacturers will face problems, but the company's goal is to be more competitive than other manufacturers, mainly in management. In the management of controlling gross profit margin in the future, the impact of labor costs is relatively small, so the company will optimize foreign exchange management, raw materials continue to rise is unlikely, is already very high.

Q2What are the three orders in the first three business sectors of the company in 2018, compared with the same period last year? Guidelines for business growth in 2018?

A: the company's performance in the first quarter of 2018 continued in the fourth quarter of last year, which was better than the 10% growth the company forecast for 2018. Mainly because of the continuation of the 2017 cycle. The company will launch new products from March to April 2018 and will expand new customers and new orders. 10% of the year is reasonable, and if there is any excess, the report will be adjusted.

Q3What is the specific goal and scale of the future development of intelligent audio?

The United States accounts for half of the world's intelligent audio, the company started relatively early, with stable customers and orders, intelligent and intelligent matching accounted for 8% of the total revenue last year, and the company is confident that it will be in double digits this year.

Q4Is 10% month-on-month or year-on-year? Apple Inc gave us an order. Can we do it on a technical scale?

A: 10% is the year-on-year data. At present, the United States is the main market for intelligent audio business, and the industry is constantly changing. about Company A, there is too much information to answer.

Q5What is the difference between Bluetooth speaker smart sound and traditional speaker? The barrier for traditional sound makers to enter smart sound?

The threshold of Bluetooth is not high, and many companies have turned to Bluetooth speakers, but it is not easy to do it well. The market is highly concentrated, 60% of the market is already occupied by mainstream companies, and the rest is cheap at the low end. What the company does is not cheap and low-end, the company's customers are manufacturers with requirements for sound, technology and appearance, and structural processes such as waterproof technology, new material silica gel and other processes have the most manufacturing threshold. The company has the best customer resources in the industry.