Enc Digital Technology Co.Ltd(603869) 4 on April 19, the annual report of 2021 was released. The company achieved an operating revenue of 937 million yuan, an increase of 16.6% year-on-year; The net profit attributable to the parent company was 222067 million yuan, a year-on-year increase of 28.8%; The net profit attributable to the parent company after deducting non profits was 181623 million yuan, with a loss of 336 million yuan in the same period last year, which was significantly reduced year-on-year.
2021 is the first full fiscal year after Enc Digital Technology Co.Ltd(603869) divested the marine route business. From the perspective of profitability, the industry’s cognitive business has reversed the downward trend since 2019. Taking “urban intrinsic safety” as the main line of development, the company has gradually changed from an integrated company to a professional solution company with core self-developed software products around the three scenarios of police, enterprise and park security.
In terms of revenue, the transformation of business strategy led to the optimization of the company’s revenue structure. The highlight of performance was software business and technical services. The revenue increased from 160 million yuan to more than 300 million yuan, a significant increase of 88% year-on-year, accounting for 33% of revenue and 63% of gross profit margin; Although the growth of product sales and system integration was limited, the profit increased by 2.9 points to 27.8% by selecting high-quality projects; Therefore, the overall gross profit margin of the company increased by 7.66 percentage points to 39%; From the perspective of business line, the company’s police security business achieved a revenue of 682 million yuan, a year-on-year decrease of 1.64%; The revenue of enterprise security business was 254 million yuan, with a year-on-year increase of 130.9%. Enterprise security business has gradually grown into one of the main channels of business.
The company’s traditional police integration business has large accounts receivable and long collection cycle, which puts great pressure on the company’s capital chain. Over the past two years, the company has actively controlled the scale of traditional integration business with large advance scale and long payment collection cycle, and made great efforts to build self-developed software products with security as the main line, so as to drive the implementation of projects with software products.
In 2021, the scale of accounts receivable of the company decreased from 1.53 billion yuan to 1.38 billion yuan, showing a downward trend for two consecutive years; The net cash inflow from the company’s operating activities was 734 million yuan, an increase of 130 million yuan over the same period of last year; In addition, the proportion of accounts receivable with a term of more than one year decreased from 82% in 2020 to 63% in 2021, and the operation quality was significantly improved.
In 2021, the company made a provision for goodwill impairment of 19.915 million yuan, compared with 89.249 million yuan in the same period of last year. At present, the book goodwill is 587 million yuan. Goodwill impairment for two consecutive years reflects the impact of changes in the external environment and the company’s strategic adjustment on the business, but it also reflects the company’s gradual reversal of the downward trend. The provision of goodwill impairment has further alleviated the company’s financial burden and will greatly reduce the pressure on future statements.
