3Peak Incorporated(688536) : announcement on 2021 annual profit distribution plan

Securities code: 3Peak Incorporated(688536) securities abbreviation: 3Peak Incorporated(688536) Announcement No.: 2022009 3Peak Incorporated(688536) microelectronics technology (Suzhou) Co., Ltd

Announcement of annual profit distribution plan in 2021

The board of directors and all directors of the company guarantee that there are no false records, misleading statements or major omissions in the contents of this announcement, and bear legal responsibility for the authenticity, accuracy and integrity of its contents according to law. Important content tips: \uf020 distribution ratio per share: cash dividend of 0.614 yuan (including tax) per a share. \uf020 this profit distribution is based on the total share capital registered on the date of equity distribution, and the specific date will be specified in the announcement of equity distribution implementation. \uf020 if the total share capital of the company changes before the equity registration date of equity distribution, it is proposed to maintain the distribution proportion per share unchanged, adjust the total distribution accordingly, and announce the specific adjustment separately. \uf020 the reason why the amount of cash dividend to be distributed by the company in 2021 is lower than 30% of the net profit attributable to the shareholders of the listed company in that year: Based on the characteristics of the industry, the company will maintain high R & D investment to strengthen team construction and ensure technology accumulation and product R & D progress. At the same time, we need to further invest resources, strengthen production capacity guarantee, actively seek extension development opportunities and improve the comprehensive competitiveness of the company. Considering that the company is in an important stage of rapid development and needs a lot of financial support, the company puts forward the annual profit distribution plan for 2021.

1、 Contents of profit distribution plan

Audited by PricewaterhouseCoopers Zhongtian Certified Public Accountants (special general partnership), as of December 31, 2021, the company’s profit available for distribution at the end of the period was 64845554976 yuan. According to the resolution of the board of directors, it is proposed to distribute profits in 2021 based on the total share capital registered on the date of equity distribution. The profit distribution plan is as follows:

The company plans to distribute a cash dividend of 6.14 yuan (including tax) to all shareholders for every 10 shares. Based on the company’s total share capital of 80235848 shares as of December 31, 2021, it is planned to distribute a total cash dividend of 4926481067 yuan (including tax). The cash dividend amount of the company in this year accounted for 11.11% of the net profit attributable to shareholders of the listed company in that year.

If the total share capital of the company changes between the date of disclosure of this announcement and the date of equity distribution and equity registration, the company will maintain the distribution proportion per share unchanged, adjust the total profit to be distributed accordingly, and announce the specific adjustment separately.

The profit distribution plan needs to be submitted to the general meeting of shareholders for deliberation.

2、 Description of cash dividend ratio less than 30% in this year

In 2021, the net profit attributable to the shareholders of the listed company was 44353556513 yuan, the accumulated undistributed profit of the parent company was 71796752596 yuan, and the total cash dividend to be distributed by the listed company was 4926481067 yuan, accounting for less than 30% of the net profit attributable to the shareholders of the listed company this year, mainly based on the development of the industry, the development stage and business model of the company Based on the comprehensive consideration of profitability and capital demand, the specific reasons are described below.

(I) industry situation and characteristics of the company

The company’s main business is the R & D and sales of analog integrated circuit products, which belongs to the integrated circuit design industry. In recent years, the company’s industry generally presents the following characteristics: 1. With the rapid development of China’s integrated circuit industry, it has attracted a large number of enterprises to join, and the market competition is becoming increasingly fierce; 2. Emerging application fields such as industrial intelligent manufacturing, new energy and intelligent driving constantly put forward new requirements for the performance and technology of analog chip products; 3. The demand of Companies in the industry for talents is increasing, the gap of R & D and technical talents is becoming increasingly prominent, the flow of talents is becoming more and more frequent, and the acquisition cost of excellent technical talents continues to rise; 4. Due to the strong demand for IC production capacity in the emerging IC market and the tight demand for IC production capacity in the emerging IC market, vid-19 is particularly affected. (II) business model and development stage of the company

The company is committed to becoming a supplier of analog and embedded processor chips. The company’s products mainly focus on signal chain and power management analog chips, and gradually integrate embedded processors. The application scope of products covers many fields, such as information communication, industrial control, monitoring safety, medical health, instruments and meters, new energy and automobile. Since its establishment, the company has always adopted the business model of fabless.

In recent years, with years of deep cultivation in the field of analog chips and seizing the new opportunities brought by domestic substitution, the company has achieved rapid development, continuous breakthroughs in technology research and development, continuous enrichment of product models, smooth market expansion and rapid growth of revenue scale.

At present, the company is still in the stage of rapid development and needs to continue to invest a lot of funds for talent reserve, technology research and development, capacity expansion and market development.

(III) profitability and capital demand of the company

In 2021, the net profit attributable to the shareholders of the listed company was 44353556513 yuan, and the net profit realized by the parent company was 50558040590 yuan.

In 2022, the company’s capital demand mainly comes from the following aspects:

1. Continue to promote the accumulation of key technologies and research and development of new products, so as to consolidate technical advantages, enrich product categories and maintain long-term competitiveness. The company will continue to expand its analog product line, invest resources to promote the development of embedded processors, vehicle regulations and isolation technologies, and strengthen key R & D capabilities such as processes and devices. Specific investments include the recruitment of excellent technical talents from China and abroad, the purchase of high-end R & D equipment and the construction of R & D office space;

2. Strengthen capacity guarantee and maintain the long-term security of the supply chain. If the strong demand and tight production capacity in the integrated circuit terminal market continue, the company needs to further increase the investment in production capacity guarantee to meet the current business needs. At the same time, actively promote the introduction and cultivation of new suppliers to maintain the long-term security of the supply chain;

3. According to the business plan, the company needs to continuously improve the product quality management system, increase the investment in reliability and functional safety, and continue to escort product R & D and technological innovation;

4. With the continuous expansion of sales scale, the funds required for daily operation have increased significantly.

Considering the above reasons, in order to meet the needs of business development, ensure the sustainable growth of the company and better safeguard the long-term interests of all shareholders, the company needs more capital investment to ensure the realization of the above business objectives.

(IV) reasons why the proportion of cash dividends is lower than 30%

As the company is in an important stage of rapid development, it is necessary to maintain high R & D investment to strengthen team building and ensure technology accumulation and product R & D progress. At the same time, we need to further invest resources, strengthen production capacity guarantee and actively seek extension development opportunities. Therefore, the company needs to maintain sufficient funds to deal with operational risks and meet the needs of sustainable development.

(V) purpose and plan of retained undistributed profits of the company

The undistributed profits of the company in 2021 will be accumulated and rolled over to the next year to meet the capital needs related to the company’s production and operation, product R & D and project investment.

In the future, the company will further standardize the use and management of funds and improve the efficiency of fund use.

The company will continue to strictly comply with relevant laws and regulations and the articles of association, comprehensively consider various factors related to profit distribution, actively implement the company’s profit distribution policy from the perspective of conducive to the long-term development of the company and the return of investors, and share the achievements of the company’s development with the majority of investors.

3、 Decision making procedures performed by the company

(I) convening, deliberation and voting of the board meeting

The second meeting of the third board of directors held on March 11, 2022 deliberated and adopted the proposal on the annual profit distribution plan in 2021. Considering that the company is currently in a period of rapid development and needs to invest a lot of funds for technology and product R & D, capacity guarantee and extension growth, and with the continuous expansion of business scale, the demand for daily working capital also increases. In order to ensure that the company has sufficient funds to deal with business risks and grow steadily, and better safeguard the long-term interests of all shareholders, In accordance with relevant laws and regulations, normative documents and the articles of association, the board of directors of the company agreed to the 2021 annual profit distribution plan and agreed to submit the plan to the 2021 annual general meeting of shareholders of the company for deliberation.

(II) opinions of independent directors

As the company is currently in a period of rapid development, it needs to maintain high R & D investment for a long time, further invest resources, strengthen capacity guarantee and actively seek extension development opportunities. At the same time, with the continuous expansion of business scale, the demand for daily working capital also increases. The company needs to maintain sufficient funds to deal with business risks and meet the needs of sustainable development.

The company’s annual profit distribution plan for 2021 comprehensively considers the company’s industrial characteristics, operating conditions, development planning, capital demand and other factors, adapts to the company’s development strategy and business plan, is conducive to ensuring the funds required for the company’s long-term development, complies with the provisions of laws, regulations and the articles of association, and can better safeguard the long-term interests of all shareholders.

Therefore, all independent directors agree to the 2021 annual profit distribution plan of the company and agree to submit the proposal to the 2021 annual general meeting of shareholders of the company for deliberation.

(III) opinions of the board of supervisors

The second meeting of the third board of supervisors held on March 11, 2022 deliberated and adopted the proposal on the annual profit distribution plan in 2021. After review, the board of supervisors believes that the profit distribution plan of the company in 2021 is in line with the current actual situation of the company, is conducive to meeting the capital needs of the company’s sustainable development, and complies with the provisions of laws, regulations and the articles of association. It agrees to submit the proposal to the 2021 annual general meeting of shareholders of the company for deliberation. 4、 Relevant risk tips

(I) analysis of the impact of cash dividends on the company’s earnings per share, cash flow and production and operation

This profit distribution plan comprehensively considers the company’s development stage, future capital demand and other factors, and will not have a significant impact on the company’s operating cash flow, affect the company’s normal operation and contribute to the company’s long-term development. (II) description of other risks

The profit distribution plan can only be implemented after being submitted to the 2021 annual general meeting of the company for deliberation and approval. Please pay attention to the investment risks.

It is hereby announced.

3Peak Incorporated(688536) microelectronics technology (Suzhou) Co., Ltd. board of directors March 14, 2022

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