Shenzhen Enrich Electronics Co.,Ltd

In the first half of 2018, the world economy continued to improve, and the economic recovery of the United States and the Eurozone accelerated. In emerging economies, China is the leader of economic growth. International crude oil prices are at a relatively low level, and the prices of bulk chemical raw materials are rising and gradually stabilizing. The yen exchange rate fluctuations are relatively stable compared with the first half of 2017, with fluctuations within 5%. Domestic mainstream panel makers BOE, Tianma, etc. remain Leading the continuous growth of China's flat panel display industry, Sanli Spectrum focuses on the company's development strategy and annual business plan, and implements strategies for growth and efficiency to cope with market changes.

1. Insist on innovation, actively develop new products, new markets and new application areas, and expand domestic and foreign markets. TFT production and sales continued to rise, especially with the mass production of Hefei Sanli Spectrum in 2017, the original capacity bottleneck was solved, and sales revenue continued to grow.

2. Strengthen management and promote the company to improve quality and efficiency. First, aiming at the rising price of raw and auxiliary materials, continue to promote cost reduction and efficiency measures and profit center assessment; second, diligently practice internal strength, reduce production costs and improve enterprise quality through technological innovation and management methods.

3. Grasp the project construction management, accelerate the industrial strategic layout, and grasp new opportunities for development. The production capacity of Hefei's production line with an annual output of 10 million square meters will be released, and new profit growth points will be cultivated, which will create favorable conditions for future development.

The company's main products are TFT series and black and white series polarizers. The company's products are mainly used in mobile phone, computer, LCD TV and other consumer electronic products display, as well as automotive electronics, medical equipment, instrumentation and other industrial control electronic product display, can also be applied to 3D glasses, anti-glare sunglasses. The company's customers are mainly panel manufacturers.

In the first half of 2018, Sanli Spectrum's operating income was RMB 417,321,500, a year-on-year increase of 14.74%. Operating profit was RMB 29,190,600, an increase of 3.08% year-on-year. The net profit attributable to shareholders of the parent company was RMB 28,636,700, a decrease of 7.36% year-on-year. The net profit attributable to the parent company after non-recurring gains and losses was RMB 18,253,500, a decrease of 22.79% year-on-year.

Revenue growth during the reporting period benefited from the following:

1) Hefei subsidiary mass production in the second half of 2017 effectively solved the capacity bottleneck problem;

2) The steady growth of the domestic polarizer market and the import substitution function of the company's products. With the advantages of capacity increase, delivery and cost performance, the company's revenue in the first half of the year has been steadily increasing. The main reason for the decline in net profit during the reporting period is: Hefei Subsidiary company's production capacity has not been fully released, resulting in higher unit production costs and lower gross profit, resulting in a decrease in net profit.