Hangjin Technology Co.Ltd(000818) 2021 annual business performance award scheme
2022-005
January, 2002
(I) enterprise profile and development process
Hangjin Technology Co.Ltd(000818) (hereinafter referred to as ” Hangjin Technology Co.Ltd(000818) ” or “company”) is a Shenzhen main board high-tech listed company integrating the production of chemical raw materials and the production and R & D of semiconductor electronic products (Stock Code: 000818). The company, formerly known as Jinxi Chemical General Factory, was founded in 1939 and was once known as the “cradle of chemical industry” in New China.
In 2017, the company began to advance into military industry and electronic industry, and established the business development pattern of “chemical industry, military industry and Electronics”. In the military industry and electronics sector, the company closely focused on the national strategic policy of “domestic substitution, independent control” and deeply arranged the two business areas of high-end chip and communication RF. The development trend of the company continued to improve and the business performance improved steadily. Hangjin Technology Co.Ltd(000818) has now developed into one of the important high-end chip core enterprises in China.
In 2021, the control of the company changed, and Wuhan Xinneng Industrial Development Co., Ltd. (hereinafter referred to as “Wuhan Xinneng”), a wholly-owned subsidiary of Wuhan Development Investment Co., Ltd. (hereinafter referred to as “Wuhan development investment”), a secondary company of Wuhan financial holding (Group) Co., Ltd. (hereinafter referred to as “Wuhan financial holding”) became the controlling shareholder of the company, The state owned assets supervision and Administration Commission of Wuhan Municipal People’s Government (hereinafter referred to as “Wuhan SASAC”) became the actual controller of the company.
(II) business introduction
1. Chemical sector
The chemical sector business is the company’s traditional advantageous business. Its main products include caustic soda, propylene oxide, polyether, liquid chlorine, benzene chloride and polyvinyl chloride. It has formed an industrial production pattern dominated by “caustic soda, propylene oxide and polyether”. The products are widely used in iron and steel, chemical fiber, medicine, food, construction, petrochemical and other industries. In addition, the company actively responded to the national strategy of carbon neutralization and hydrogen energy utilization, and built a 3000nm3 / h high-purity hydrogen filling station. Hydrogen products have become the strategic business of the company’s chemical sector, effectively improving the company’s overall competitiveness.
2. Military industry sector
The military industry sector of the company includes Changsha Shaoguang Semiconductor Co., Ltd. (hereinafter referred to as “Changsha Shaoguang”), Weike electronic module (Shenzhen) Co., Ltd. (hereinafter referred to as “Weike Electronics”), Hunan Jiuqiang xundun Information Technology Co., Ltd. (hereinafter referred to as “Jiuqiang xundun”), Shenzhen Zhongdian Huaxing Electronic Technology Co., Ltd. (hereinafter referred to as “Zhongdian Huaxing”) and other enterprises. Changsha Shaoguang is mainly engaged in the R & D, design, testing and packaging of military integrated circuits. Integrated circuit products are mainly supporting the whole machine units of major military industrial groups such as aviation, aerospace, weapons, ships and electronics. Some products are the core components of multiple key weapon models and the core components of applications such as data processing, data storage and system control of tip weapons and equipment. As a high-tech enterprise and advanced technology enterprise, Weike electronics is mainly engaged in the development, design, production and sales of thick film hybrid integrated circuits, as well as the standard SMT surface mount assembly and packaging business based on printed circuit board. Its products involve military, communication, CNC machine tools, medical electronics, automotive electronics manufacturing and other fields.
3. Electronic sector
The electronics segment of the company includes two business segments: Beidou and communication RF. It governs three enterprises: Wuhan navigation and location service industry technology Research Institute Co., Ltd. (hereinafter referred to as “Wuhan navigation Institute”), Honglin Microelectronics (Kunshan) Co., Ltd. (hereinafter referred to as “honglinwei”) and Shenzhen Weike RF Technology Co., Ltd. (hereinafter referred to as “Weike RF”). Wuhan navigation Institute is Hubei Beidou navigation and location service engineering laboratory, which is a high-tech enterprise specializing in Beidou high-precision location service. Provide products and services including chips, modules and boards, intelligent terminals, solutions and so on. Honglinwei is a leading base station antenna and RF device supplier in China. It has leading technical capabilities in the fields of RF chip modeling and simulation, system level packaging and testing of RF devices for millimeter wave communication (SIP / AIP). Waco RF is mainly engaged in the R & D, production and sales of high-end RF materials, RF devices and precision electronic interconnection products in the field of wireless communication. The products are widely used in 5g communication base station, UAV, Internet of things, military radar, Beidou system, unmanned millimeter wave radar of L4 level and above, smart city and other fields.
(III) development planning
As one of the four major integrated circuit bases in China, Wuhan has unique advantages in policy, industry, science and education and location resources in the field of integrated circuit industry. Now it has gathered more than 100 chip enterprises, forming a national “core” industrial highland characterized by memory chips, optoelectronic chips, infrared chips and Internet of things chips. Hangjin Technology Co.Ltd(000818) as a high-tech listed company with leading market value under the state owned assets supervision and Administration Commission of Hubei Province and Wuhan city and its main business includes integrated circuit R & D and production, it has many high-tech professionals including academician Liu Jingnan’s team, Dr. Lin Haili and Dr. Wei Qifu’s team and Shenyang 4435 R & D center team in chip R & D, design and packaging testing. In the future, Hangjin Technology Co.Ltd(000818) will seize the golden period of the policy of “domestic substitution, independent control” and the outbreak of the development of the global “chip shortage” industry, give full play to the platform advantages of listed companies and the advantages of Wuhan local chip industry, use domestic and foreign funds, and improve the chip industry chain of listed companies through the combination of endogenous growth and extended acquisition, So as to achieve the strategic development goal of building Hangjin Technology Co.Ltd(000818) into a science and technology benchmark enterprise under the SASAC of Wuhan, Hubei Province, and then establishing the banner of Wuhan integrated circuit Shenzhen New Industries Biomedical Engineering Co.Ltd(300832) .
(IV) financial status
First three quarters of 2021 2020 2019 2018
Operating income (100 million yuan) 34.70 35.36 37.74 38.25
Net profit attributable to shareholders of listed companies: 636.236.307.503 million yuan
Net profit attributable to shareholders of listed companies after deducting non recurring profit and loss of 614.2.45 3.00 4.10 (RMB 100 million)
Net cash flow from operating activities 470 181 220 403 million yuan
Basic earnings per share (yuan / share) 0.93 0.34 0.44 0.73
Diluted earnings per share (yuan / share) 0.93 0.34 0.44 0.73
Weighted average return on net assets 20.15%, 8.49%, 12.18%, 18.90%
End of September 2021 end of 2020 end of 2019 end of 2018
Total assets (100 million yuan): 48.06 48.29 44.50 42.22
Net assets attributable to shareholders of listed companies: 33.43, 28.77, 26.82, 2.422 billion yuan
In recent years, the company has vigorously strengthened enterprise management, continuously promoted enterprise business transformation, and continued to improve its business performance.
By the third quarter of 2021, the company had achieved an operating revenue of 3.47 billion yuan, a year-on-year increase of 40.80%; The net profit attributable to the shareholders of the listed company was 636 million yuan, a year-on-year increase of 251.21%. At present, Hangjin Technology Co.Ltd(000818) has been officially listed in the sample stock list of Shenzhen Component Index of Shenzhen Stock Exchange. It is a high-tech listed company with leading market value and main business including integrated circuit R & D and production under the state owned assets supervision and Administration Commission of Hubei Province and Wuhan city. 2、 Feasibility of implementing business performance reward
The company is in a critical period of business development. The businesses of chemical, military and electronic sectors are in a fully competitive market environment. There is an urgent demand for high-end technology and management talents. Whether the company can attract, retain and fully stimulate talents has become a key factor for the company’s sustainable and rapid development and advantage in market competition. By implementing the strong link between business performance incentive and the company’s key performance objectives, strengthen the high consistency of the interests of shareholders, employees and the company, which is conducive to the company’s performance improvement and long-term development, and promote the company to continue to move forward to a high-level, high-tech and high market value technology platform company. Maintain and increase the value of state-owned assets.
The feasibility of implementing business performance reward includes the following aspects:
1. The need to implement the reform of state-owned enterprises
In order to implement the decision and deployment of the CPC Central Committee and the State Council on deepening the reform of state-owned enterprises, implement the three-year action plan for the reform of state-owned enterprises (2020-2022), the notice on matters related to strengthening the implementation of the tenure system and contractual management of managers (state owned enterprise reform office FA No. 7) In accordance with the spirit of the relevant documents in the guidelines for the operation of the excess profit sharing mechanism of “double hundred enterprises” and “demonstration enterprises of scientific and technological reform” on improving the salary distribution mechanism determined by performance contribution and flexibly carrying out medium and long-term incentives in various ways, and in accordance with the relevant requirements of the three-year action plan for the reform of state owned enterprises in Hubei Province and the special action implementation plan of Wuhan SASAC, The purpose of the company’s launch of this business performance incentive scheme is to organically combine the interests of enterprises and employees by establishing a business performance incentive mechanism, so as to maximize the entrepreneurial enthusiasm of enterprise leaders and core staff officers, which is conducive to the improvement and long-term development of the company’s performance, and promote the enterprise to realize quality change, efficiency change and power change. 2. The need of constructing contractual management with equal rights and responsibilities
At the beginning of 2021, Wuhan SASAC became the actual controller of the company and agreed that the original management team would continue to be responsible for the operation and management of the company. According to the company’s strategic layout and strong confidence in the team’s business ability, the chairman of the company made a commitment to major shareholders to deduct non attributable net profits of 300 million yuan, 330 million yuan and 370 million yuan in the next three years (2021-2023) on the basis of the historical operating performance of 307 million yuan and 236 million yuan in 2019 and 2020, The unfinished part shall be compensated by the chairman of the company in cash. According to the relevant requirements of state-owned enterprise reform of “building contractual management with equal rights and responsibilities”, the company launched the 2021 annual business performance reward scheme, with a view to establishing a medium and long-term incentive mechanism of “core personnel who contribute to the performance and share the new achievements of the company’s development”.
3. The corporate governance structure is sound and the basic management system is standardized
The company has a clear equity structure, sound corporate governance, sound organization of the board of shareholders, the board of directors, the board of supervisors and the management, clear responsibilities and standardized operation. The company’s human resource management system is standardized, the post responsibilities are clear, and the tenure system and contractual management of the management are implemented. It has established a labor employment, performance appraisal, salary and welfare system in line with market competition. The company has a sound financial management system and standardized financial operation. In recent three years, the company has not been subject to any administrative or criminal punishment for financial and tax violations, nor has any major risk event brought potential risks to the company’s operation.
4. The company’s operating conditions continued to improve and its performance increased significantly
In 2021, with the care and support of Wuhan SASAC and shareholders, the company’s management team grasped the new opportunities of historical development, adjusted the new layout of strategic development, explored and innovated new business models, far exceeding the performance gambling goal. In the first three quarters of 2021, the company achieved an operating revenue of 3.47 billion yuan, a year-on-year increase of 40.80%, a net profit of 636 million yuan, a year-on-year increase of 251.21%, and a large increase in performance. All business segments of the company showed a steady and rapid development momentum. It is estimated that the net profit attributable to shareholders of Listed Companies in 2021 will be 700 million yuan to 900 million yuan, far exceeding the performance commitment target of 300 million yuan. In the first year since the state-owned holding listed company, the company’s performance has made a good start.
To sum up, on the basis of the progress made in the company’s operation and management, the business performance reward is not only a positive affirmation of the company’s operating results by shareholders, but also a necessary measure to effectively motivate employees, stabilize the company’s core team, and further improve the equal tenure system of rights and responsibilities and contractual management.
3、 Key points of 2021 annual business performance award scheme
In order to fully stimulate the innovation and creation of key talents of listed companies, and promote listed companies to continue to move forward to a high-level, high-tech and high market value technology platform company, this plan is prepared for the prudent and rigorous implementation of this business performance award.
(I) calculation method of annual business performance award
1. Annual operating performance award
Annual operating performance reward = (annual audited net profit deducted from non parent company – annual target profit) × Proportion of business performance reward
The following factors shall be excluded when determining the annual business performance award:
(1) Annual non operating income caused by major asset disposal;
(2) Changes in annual profits caused by mergers and acquisitions, reorganization and other acts;
(3) Other factors that should be considered by the board of directors.
2. Target profit for 2021
The business performance reward scheme takes one year as a cycle, and the overall target profit is verified according to the cycle years of the reward scheme. Whereas the operating performance commitment made by the company’s management to the controlling shareholders is a true, accurate and reasonable performance goal made by comprehensively considering the company’s medium and long-term development plan, industry development cycle, historical profit level, foreign business environment and other factors. Therefore, the target profit of this business performance incentive scheme is implemented according to the promised value of business performance, as follows:
Annual target profit (net profit not attributable to parent company)
2021
