From Eontec Bi-Annual 10K
3. Management's Discussion and Analysis
(A) Report of operation Profile
During the reporting period, company management to actively implement the 2016 annual main business plan, the firm implementation of the agreed development strategy, optimize the industrial chain layout; increase technological innovation, new products and technology to accelerate the pace of improvement; and constantly improve product quality system, enhance the quality of the entire process management; innovative marketing idea, the depth of excavation known customers; the company continued to improve management and control system, and promote internal process optimization and improvement.
2016 half-year, the company achieved operating income of 23,986.11 million, down 8.26% over the previous year; net profit of 1,306.79 million, down 35.88 percent over the previous year, mainly due to R&D investment and equity-based compensation expense increased.
The main work is as follows:
(1) Consumer Electronics
With digital, Information Technology development and growth in consumer demand for electronic products, expanding Consumer Electronics subscribers worldwide. Especially popular consumer electronics products downstream demand for smart phones, tablet PCs and other products continues strong. Current consumer electronics products continue to become thinner, intelligent development trend, light alloy resources can be recycled, no cutting technology and other advantages of gradually highlighted the strong needs of frame and casing for mobile phones, laptops and other Consumer Electronics products. In order to meet market demand, the company's management to grasp the opportunities of industrial upgrading, and actively build the company's ability to structure the overall Consumer Electronics solutions and one-stop service. On the strong foundation built upon last year's Consumer Electronics business, continue to increase efforts to develop Consumer Electronics products structure parts market. At present, the company and Lenovo, Samsung, Wistron, Pegatron, Xiaomi, OPPO, VIVO and many other well-known domestic and foreign customers to establish a cooperative relationship.
(2) Liquid Metal
(i) Liquid Metal has become this year's main project, the company increased R & D investment, take a variety of measures including the provision of a mobile phone liquid metal structure samples, etc. to many domestic and foreign mobile phone manufacturers, the market continued to expand the liquid metal market, and gradually increase its market share. During the reporting period, the company liquid metal product sales revenue 8.373 million yuan.
(ii) On March 2016, the company and LiquidMetal Technologies, Inc. (Registered in the United States) (hereinafter referred to as "LQMT") signed a strategic cooperation agreement (parallel to the License Agreement). This is a global company in the field of technical reserves and the layout of a big step, help both sides achieve complementary intellectual property and industrial technology, to further strengthen the production technology of amorphous metal, amorphous metal accelerate basic research and development and commercial applications, and promote a revolutionary breakthrough in the amorphous metal, amorphous alloy in the company to improve the technological content of products and industry sectors added value, broaden the product line and market space.
(iii) Enable investors to better understand the technical background and prospects of liquid metal in the international market, and gradually expand the market share of liquid metal products, the company through an interactive platform for investor relations, technical exchange seminars and other means increase promotional efforts of liquid metal, and achieved good results. The most typical is the company, and LiquidMetal Technology Co., Ltd. on April 15, 2016 in Dongguan Songshan Lake Academic Exchange Center, jointly organized the "Bulk Amorphous Applied Technology Promotion Conference" received the industry's highest attention.
(3) New Energy Vehicles
According to China Association of Automobile Manufacturers statistics, in the first half of 2016, China's new energy automobile production 177,000, 170,000 sales, an increase of 125.0% and 126.9%, respectively, over the previous year. Good momentum of development of new energy automotive market for the company to further develop magnesium alloy auto parts business to create a favorable external environment.
During the reporting period, the company last year on the basis of magnesium aluminum auto parts business scale growing, continue to increase R&D investment, and constantly develop new products with high technological content and added value, while actively developing new customers, increase market share rate. As of the reporting period, the company and TKP, HBA, TRW, AWE, Alpine, BYD and other well-known domestic and foreign customers to establish a good relationship of cooperation.
(4) Bio-Degradable Magnesium Alloy Medical
Companies with "Guangdong Province, the second batch of innovative research teams", "the Guangdong Provincial Academy of Sciences expert workstation", "medical magnesium alloy industry technology innovation strategic alliance" and other platforms to follow up "biodegradable magnesium bone fixation screws" products seized hospital inspection. May 2016, with the joint efforts of domestic and international medical field of magnesium alloys and seized homes detection experts, the company received biodegradable magnesium in bone fixation screws Inspection Institute issued a "test", the company is biodegradable magnesium medical another major breakthrough alloy project. Subsequently, the company started clinical trials ethics approval. Up to now, Zhongnan Hospital of Wuhan University, Kunming General Hospital of Chengdu Military Region and Taihe Hospital Ethics approval has passed, other hospitals ethical approval of clinical trials in progress.
(5) Non-public issuance of Corporate Bonds
With a capital operation platform to further broaden the financing channels, optimize the debt structure to meet the needs of company funds, the company in February 26, 2016, March 17, 2016, were held the second session of the Board and the Twenty-Third 2016 first Extraordinary General meeting, approved the "non-public issuance of corporate bonds program motion" and motion. As of the reporting period, the issue of the size of the company in 2016 non-public issuance of corporate bonds issued for the end of the first phase of $ 100 million. Non-public issuance of corporate bonds. See the related companies in 2016 Interim Report IV ninth point.
(6) Equity Investments
During the reporting period, the company raised investment project to raise funds invested 15.186 million yuan. As of the reporting period, the company raise investment project to raise funds invested a total of 272,058 million yuan, raise investment project reaches its intended use. July 7, 2016, the twenty-ninth and twentieth meeting of the second session of the Supervisory Committee of the Second Board reviewed and approved "on the company's initial public offering to raise capital investment projects knot and cancellation of fund-raising special account motion, "agreed the company's initial public offering to raise capital investment projects knot and cancellation of fund-raising special account. On 2016 July 19, the company complete cancellation procedure of investment projects to raise funds special account, the company and Huatai Securities Co., Ltd., China Industrial and Commercial Bank branch in Dongguan stream signed "to raise funds tripartite regulatory agreement" subsequently terminated.
(7) Foreign Investment
During the reporting period, the company is actively looking for future strategic development in line with the company's investment projects in order to improve the company's industrial development by epitaxial structure, enhance their core competitiveness, and promote the continued growth of the company. During the reporting period, the company completed the "Shenzhen Eon Liquid Metal Co., Ltd." and the establishment of wholly-owned equity investment established "Dongguan Eon Communication Technology Co., Ltd." (the report period, the company has not yet invested in Dongguan Eon Communication Technology Co., Ltd. ) business registration procedures.
(8) Innovative Development
During the reporting period, the company continued to strengthen research and development efforts, continue to increase the main business R&D investment, according to market demand, the company introduced to meet customer demand for new products. During the reporting period, the company developed a total investment amounting to 19.83 million, representing an increase of 40.93%. The company attaches great importance to the development and protection of intellectual property rights, during the reporting period, the company made four patents.
(9) Stock options
During the reporting period, the company has completed the second phase of the stock option incentive plan involved first granted 5,475,600 copies of the registration of stock options, options referred to: [] Yee JLC3, option codes: [036 217]. The implementation of stock option incentive plan, will help further establish and improve the company's long-term incentives to stabilize the company talent team, improve the incentive pay system has played a positive role.
