Cogobuy Continued Growth with Net Profit Boosted by 29.2% to RMB187.4 Million in 2020 Annual Results
Highlights of the annual results for the year ended 31 December 2020:
- Increasing demand for chips increased the Group’s chips sales continuously, resulting in an increase of 29.2% in net profit to approximately RMB187.4 million during the Year. The Group’s profit attributable to equity shareholders of the Company was approximately RMB123.2 million.
- The Group’s revenue was approximately RMB6,185.1 million, a YoY increase of 5.7%; gross profit was approximately RMB698.6 million, a YoY increase of 23.5%.
- Ingdan Innovations entered a series of investment agreements with more than 10 institutional investors in 2020 to support its business growth and expansion.
HONG KONG, April 1, 2021 /PRNewswire/ — Cogobuy Group ("Cogobuy" or the "Company", stock code: 400.HK; with its subsidiaries (the ”Group”)), a technology company focusing on serving the global chips industry and artificial intelligence ("AI") and internet of things ("IoT", together "AIoT") ecosystem in China, is pleased to announce its audited consolidated results for the year ended 31 December 2020 ("2020" or the "Year").
Financial Highlights for the Full Year of 2020
Worldwide construction and deployment of 5G networks are accelerating, driving demand for chips. As a technology company focused on serving the global chip industry and AIoT ecosystem, Cogobuy’s business directly benefits from rising domestic and global chip demand. During the Year, the Company’s net profit and revenue both recorded increases, of which the rate of growth for net profit outpaced revenue.
For the year ended 31 December 2020, the Group’s net profit was approximately RMB187.4 million, a YoY increase of 29.2%; revenue was approximately RMB6,185.1 million, a YoY increase of 5.7%; gross profit was approximately RMB698.6 million, representing a YoY increase of 23.5%. The increase in gross profit margin was partially driven by the shift of sales mix to products with higher gross margins, such as Electric Vehicle ("EV") and Vehicle to Everything ("V2X"), smart homes, and AI surveillance. During the Year, the Group’s profit attributable to equity shareholders of the Company amounted to approximately RMB123.2 million. For the year ended 31 December 2020, the Company’s cash and bank balances including short-term bank deposits and pledged deposits was RMB554.4 million. The Group’s bank loans were RMB138.9 million. Basic common shares outstanding were 1,416,184,732; diluted common shares outstanding were 1,396,548,000.
Following a business restructuring completed in early 2020, Cogobuy Group was reorganized into two primary businesses, Ingdan Innovations and Ingfin Technologies (the "IFT") to provide a full spectrum of services for the 5G industry chain and to create sustainable income for the Group. Cogobuy combined its IC components sales and marketing platform, Cogobuy.com, with its Ingdan AIoT platform, to form Ingdan Innovations, which focuses on the sales and promotion of IC chips to AIoT manufacturers in China. Meanwhile, Ingfin Technologies focuses on the research and development and sales of proprietary products, and develops customized technical solutions which include bundles of software, hardware, and core components. Targeting V2X and 5G applications, Ingfin Technologies also provides financing services and seeks investment or acquisition and merger opportunities in high-quality startups within the Group’s AIoT ecosystem, improving Cogubuy’s overall strategic position and generating investment income.
Cogobuy’s Business Directly Benefits from 5G’s Development and Other Applications
Despite the impact of COVID-19 pandemic (the "pandemic"), demand for chips on IngDan Innovation’s platform grew promptly, driven by rapidly recovering national economic activities and the development of the 5G market. Ingdan Innovations maintains agency agreements with over 50% of global high-end chip suppliers and many leading domestic chip companies, allowing it to serve over a hundred global high-end chip suppliers upstream, and thousands of AIoT hardware companies downstream, while providing them with chips application development solutions and sales services. Additionally, rapid penetration of 5G across different industries and mobile terminal equipment are driving development in the telecommunication services and V2X industries, and driving demand for chips. The Company is capturing the boom from 5G all along the industrial chain, including related 5G network construction, AIoT applications, and artificial intelligence. The new demand for chips from these growing industries will also create important new growth momentum for the Group in the future.
New Business Areas: Focusing on Electric Vehicles and the Internet of Vehicles
EV and V2X are regarded as the most prominent segments within 5G vertical industry applications. It is an important field of next-generation information and communication technologies, such as 5G and artificial intelligence, in automotive and transportation industrial applications. According to the Topology Research Institute, by 2021, global vehicle shipments are expected to reach 83.5 million units, and global automotive chip production is expected to reach approximately USD21 billion, with an annual growth rate of approximately 12.5%.
V2X is considered the most prominent segment within 5G vertical industry applications. Cogobuy already has a strategic focus on the V2X market through its two primary businesses, Ingdan Innovations and Ingfin Technologies. The Company also established a V2X value-chain alliance ("the alliance") with chip manufacturers, module suppliers, and car manufacturers to explore a new V2X sustainable business model. The alliance is expected to provide new growth momentum for Cogobuy. Semiconductor components for automotive networking, safety, and autonomous driving have increased nearly 4 to 5 times in every vehicle, creating significant demand and business growth for Ingdan Innovations. Our sales for Advanced Driver Assistance Systems ("ADAS”) chip products increased over 300% compared with the same period last year. Additionally during the Year, Ingfin Technologies’ proprietary (IFT) V2X application solution received its first order, which utilizes big data collected by AI analysis terminal devices, to provide one-stop solutions for accurate vehicle rescue, service tracking, driving analysis, remote accident identification, as well as fast claims settlement in the Chinese market. Cogobuy expects IFT to grow rapidly, and will continue to expand the Group’s V2X business to capture high growth market opportunities.
Highly Recognized by the Industry and Endorsed by Tencent Cloud
Cogobuy’s continued work in the domestic chip and AloT industry has earned recognition from the Group’s partners and customers. The Group won the "Most Valuable Partner in IoT" award from Tencent Cloud during the Year. Moving forward, the Group will continue to link upstream and downstream IoT enterprises to further their growth and lead a new era of domestic 5G intelligence.
Capital Injections from Strategic Investors in Ingdan Innovations
During the Year, Ingdan Innovations’ positioning and potential attracted additional strategic investors. Ingdan Innovations successfully secured investments from more than 10 institutional investors including Guangdong Finance Fund Management, which belongs to Guangdong’s largest provincial integrated financing platform. The investment from the investors will aid Ingdan Innovations’ continued ascent in the rapidly growing 5G market and the trillion-RMB domestic chip market, further accelerating growth in Group’s core business. Upon completion of the transaction, the Group’s ownership of Ingdan Innovations changed from 75% to approximately 65.65%.
Mr. Jeffrey Kang, CEO of Cogobuy Group, said, "The Group sustained business growth throughout the Year, in spite of the adverse impact from the COVID-19 pandemic. With continuing development and popularization of 5G, market demand for chips will also continue to increase.
To enable the Group to further capitalize on the 5G market trend, we are deploying our services comprehensively along the 5G industrial chain through our new "Ingdan Innovations + Ingfin Technologies" dual business model. Furthermore, the Group will actively grow the business related to intelligent devices and industrial automation in accordance with China’s "14th Five-Year Plan", which heavily emphasizes development of the chip industry within China and industrial automation. We expect these policies and industry trends to directly benefit our business.
Looking ahead, favorable government policies and rapid development of 5G products and technologies will continue to facilitate intelligent transformation across different business verticals, and promote industrial innovation and development. The Group will continue to capitalize on growth opportunities from 5G’s expansion, and provide services to industries related to chips and AIoT, such as autopilot, cloud computing, big data, and industrial automation. The Group’s business is expected to see continued growth in 2021 due to customers’ strong demand for chips, ultimately creating greater value for our shareholders."
The information contained in this document has not been independently verified. No representation, warranty or undertaking, express or implied, is made by the Company or any of its affiliates, advisers or representatives as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of such information or opinions presented or contained herein. The information contained in this document should be considered in the context of the circumstances prevailing at the time, is subject to change without notice and the Company makes no undertaking to update the information in this document to reflect any developments that occur after the date of the presentation. It is not the Company’s intention to provide, and you may not rely on these materials as providing, a complete or comprehensive analysis of the Company, or its financial or trading position or prospects. Neither of the Company nor any of its affiliates, advisers or representatives accept any responsibility or have any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this document or its contents or otherwise arising in connection with this document.
This document may contain statements that reflect the Company’s current intent, beliefs and expectations about the future as of the respective dates indicated herein. These forward-looking statements are not guarantees of future performance and are based on a number of assumptions about the Company’s operations and factors beyond the Company’s control, which are subject to significant risks and uncertainties; accordingly, actual results may differ materially from those described in these forward-looking statements. Neither the Company nor any of its affiliates, advisers or representatives has any obligation, nor do they undertake, to update these forward-looking statements for any events or developments including the occurrence of unanticipated events that occur subsequent to such dates.
About Cogobuy Group
Cogobuy Group, a technology company serving the global chip industry and AIoT ecosystem, is headquartered in Shenzhen, with offices and branches across major cities in China, including Hong Kong, Shanghai, Beijing, Wuhan, Chengdu, Nanjing, Hangzhou, and Xi’an, as well as overseas branches in the U.S., Singapore, Israel, and Japan. The Group is comprised of two companies operating a dual business model: Ingdan Innovations, a technical service platform serving the chip industry, and Ingfin Technologies, which encompasses the Company’s AIoT proprietary products, technology services, and financing. For further information, please refer to the Company’s website at http://www.cogobuygroup.com/
For investor and media enquiries
Please contact Ms. Novam Ng at [email protected].
This press release is issued by Financial PR (HK) Limited on behalf of Cogobuy Group.
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