Shenzhen SEC Co.-
(2) Analysis of Main Business
Main business of the Company includes development and operation of specialized electronics market and supporting projects,
property lease service, IT product channel retail terminal service, e-commerce and value-added microcredit service.
? Operation of the electronics markets
In the first half year, facing the intense market competition and the impact from new-type commercial pattern, the Company actively
explored the new development pattern, constantly enhanced the operating capability and innovation capability of electronics market
mainly operated, built and optimized the operating mode of “physical store + e-commerce + channel” and duplicated this mode in
other SEG electronics markets outside Shenzhen, at the same time, the Company strengthened the building of physical channel and
continued to cultivate Tmall of SEG electronics market. In the field of selecting products, the Company achieved precision and
novelty, as well as lowered down the costs.
The Company seizes the opportunity that Shenzhen Municipal Government intends to build Huaqiang North as the maker center.
Based on its own advantages, the Company established the SEG International Maker Product Exhibition and Promotion Center. The
Company intends to attract high-quality and innovative products through SEG electronics market, build vertical O2O channel with
segmentation, take smart hardware and maker’s products as the core concept, fully exert the capability of distributing resources, link
the upstream and downstream channels of market, and finally for the Company’s own platform. It will be beneficial to attract
consumers to market, achieve the diversified competition with other professional markets, and to promote the Company’s business
transformation and upgrading.
In the report period, the Company's electronics market business achieved a total operating income of 158,490,000 Yuan, a decrease
of 0.47% over the previous year and a total profit of 44,790,000 Yuan, a decrease of 11.69% over the previous year, mainly due to
the decrease of the rental income of Nanning SEG market and the earlier-stage fees incurred by Suzhou SEG Digital.
? Business of property leasing service
In the report period, the property rental business of the headquarters and the Company's subsidiary SEG Baohua continues to increase
steadily.
With the continuous depression in the property rental industry in the entire Shenzhen Huaqiang North area, the vacancy rate of the
surrounding offices continues to increase, and the rental level maintains the status quo or has a slight decline. SEG Baohua has
Summary of 2015 Semi-Annual Report of Shenzhen SEG Co., Ltd.
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overcome the difficulties by improving service levels and by taking effective management measures, such as grasping the golden
opportunity of Huaqiang North Maker Center and so on. In combination with the popular maker center concept of Huaqiang North,
SEG Baohua actively explores new performance growth points and stabilizes the occupancy rate at 99% or higher in the report period.
Meanwhile, SEG Baohua remains the rental at the highest level among the surrounding offices in Huaqiang North.
In the report period, the Company's property rental service yielded a total operation income of 37,380,000 Yuan, a year-on-year
increase of 6.98%, and a total profit of 8,760,000 Yuan, a year-on-year increase of 46.97%.
? Business of the channel retailing terminal of IT products
In the report period, the overall business in the channel retailing terminal of IT products of SEG Industry, the wholly owned
subsidiary of the Company, is in good conditions, and each economic indicator achieved a dramatic increase compared with that of
the previous year. In the first half of 2015, SEG Industry has formally signed a memorandum of cooperation documents with Apple
and officially obtained the authorized Apple distributor for big customers in the China Southern Region. In mid-June, SEG Industry
has achieved good results in the first App recommended council for big customers held in Shenzhen after the cooperation.
4. Actively researching the new projects
A. To promote the transformation and upgrading of the Company's main industry and extension to the upstream of the industry chain,
the Company has established a strategic cooperation partnership with Dongguan EONTEC company (hereinafter referred to as
EONTEC), making use of own advantages in technology research and resources. The cooperation intends to promote the
development and application in the consumer electronics and related fields of new materials such as liquid metal. Both parties signed
the Strategic Cooperation Framework Agreement of EONTEC and Shenzhen SEG on May 27, 2015.
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