quectel wireless solutions co., ltd

Company Stock Code: 603236. SS

Short Name of the Company: Quectel

Quectel Wireless Solutions Co., Ltd.

2019 Annual Financial Report

Building 5, Shanghai Business Park Phase III (Area B), No.1016 Tianlin Road, Minhang District, Shanghai 200233, China Email: [email protected] Website: www.quectel.com page 2

Contents

Contents ...................................................................................................................................................... 2

1 Important Notes................................................................................................................................... 3

2 Basic Information of the Company ................................................................................................... 4

2.1. Company profile ......................................................................................................................... 4

2.2. Brief Introduction to Main Business Scope or Products in the Reporting Period ...................... 4

2.2.1. Main Business Engaged ................................................................................................. 4

2.2.1.1. Wireless Communication Modules is the Key Link of the IoT Industrial Chain ... 4

2.2.1.2. Main Product Types ............................................................................................. 5

2.2.1.3. Target Applications .............................................................................................. 8

2.2.2. Business Model ............................................................................................................... 8

2.2.2.1. Procurement Model .............................................................................................. 9

2.2.2.2. Production Model ................................................................................................. 9

2.2.2.3. Sales Model .......................................................................................................... 9

2.2.3. Industry Overview ......................................................................................................... 10

2.3. Key Accounting Data and Financial Indicators ........................................................................ 12

2.3.1. Key Accounting Data and Financial Indicators for the Past Three Years .................... 12

2.3.2. Key Accounting Data by Quarter in the Reporting Period ............................................ 13

2.4. Share Capital and Shareholders .............................................................................................. 13

2.4.1. Total Number of Shareholders and Top 10 Shareholders. ........................................... 13

2.4.2. The Ownership and Controlling Relationship Between the Controlling Shareholder and

the Company................................................................................................................................ 15

2.4.3. The Ownership and Controlling Relationship Between the Actual Controller and the

Company ...................................................................................................................................... 16

3 Management Discussion and Analysis of Business Operation .................................................. 17

3.1. Analysis on Main Business ...................................................................................................... 17

3.2. Changes in Consolidation Scope when Compared to the Previous Financial Year ............... 17

4 Financial Reports .............................................................................................................................. 18

Consolidated Balance Sheet ....................................................................................................... 18

Parent Company Balance Sheet ................................................................................................. 20

Consolidated Income Statement ................................................................................................. 22

Parent Company Income Statement ........................................................................................... 24

Consolidated Cash Flow Statement ............................................................................................ 25

Parent Company Cash Flow Statement ...................................................................................... 27

Consolidated Statement of Changes in Shareholder's Equity .................................................... 29


1 Important Notes

(1) The summary is an abstract of the full-text annual report, for more details of operating results,

financial condition and the future development plan of Quectel (the “Company”), investors should

refer to the full-text annual report that was published on medias, such as the official website of

Shanghai Stock Exchange, appointed by the China Securities Regulatory Commission (the “CSRC”).

(2) The Board of Directors, Board of Supervisors as well as the Directors, Supervisors and Senior

executives of the Company hereby guarantee the authenticity, accuracy and completeness of the

contents, without any misrepresentation, misleading statement or material omission, of this Report,

and shall bear joint or several legal liabilities.

(3) All Directors of the Company attended the Board meeting to review this report.

(4) BDO China Certified Public Accountants LLP has issued a standard auditor’ report with unqualified

opinion for the Company.

(5) The Board has reviewed and approved the following profit distribution plan for the Reporting Period:

Approved by the fifteenth meeting of the second board of directors, the plans on profit distribution and

reserve transferring for year 2019 is based on the total shares registered on the record date of equity

distribution, a cash dividend of RMB 5 (tax inclusive) per 10 shares would be distributed to all the

shareholders recorded. The transferring of reserves will be 2 shares upon each 10 shares to the

whole shareholders. The plan is yet to be approved by the Company's general meeting of

shareholders.


2 Basic Information of the Company

2.1. Company profile

2.2. Brief Introduction to Main Business Scope or Products in the Reporting Period

During the Reporting Period, the Company’s main business, business model and industry situations has

no significant changes. Details are as follows:

2.2.1. Main Business Engaged

The Company's main business is engaged in the design, production, R&D and sales services of wireless

communication modules and solutions in the IoT field, providing one-stop services including wireless

communication modules, IoT application solutions and cloud platform management. The diverse products

provided by the Company and their rich features can satisfy the needs of intelligent terminals in different

markets.

2.2.1.1. Wireless Communication Modules is the Key Link of the IoT Industrial Chain

The wireless communication module enables the intelligent terminal products of various types in the IoT

industry to access network and transmit information. It is within the middle link between upstream

standardized chips and downstream highly fragmented vertical application fields, and it is also a key

component of the intelligent IoT terminal equipment.

Stock Profile

Class of Stock Stock Exchange for Listing Stock Name Stock code Previous Stock Name

Class A Shanghai Stock Exchange Quectel 603236 -

Contact Information Board Secretary Securities Representative

Name Lei ZHENG Fan Wang

Office Address

Building 5, Shanghai Business Park Phase III (Area B), No.1016 Tianlin Road, Minhang District, Shanghai 200233, China

Building 5, Shanghai Business Park Phase III (Area B), No.1016 Tianlin Road, Minhang District, Shanghai 200233, China

Tel. 021-51086236 021-51086236

E-mail Address [email protected] [email protected]


2.2.1.2. Main Product Types

The diverse products provided by the Company and their rich functions satisfy the needs of intelligent

terminals in different markets. The main product types include GSM/GPRS module (2G module),

WCDMA/HSPA module (3G module), LTE module (4G module), LPWA module, 5G module, GNSS

positioning module, Wi-Fi module, Antenna, and so forth.

The brief introductions of the main products are listed below:

Type Picture Brief Introduction Application

2G

Module

2G module adopts industrial-grade

standard, supports GSM/GPRS

full-band SMS, data transmission and

other functions. It features small size,

low power consumption, wide

temperature range, and strong

anti-interference ability, and embeds

an extensive set of stable and reliable

internet protocols.

Suitable for various

industrial and civil

applications such as

smart-metering,

mobile payment,

security surveillance

and object tracker.

3G

Module

3G module supports multi-band

UMTS/HSPA(+) communication

standards. A rich set of internet

protocols, communication interfaces

as well as abundant drivers extend the

applicability of the module to a wide

range of M2M applications in business

and industry.

Vehicle and

transportation,

intelligent security,

smart-metering,

mobile payment and

so on.


4G

Module

4G standard module contains a broad

product portfolio of Cat.1 to Cat.20,

covers global mainstream network,

and adopts various packages. It also

supports enhanced functions including

GNSS positioning, Wi-Fi, VoLTE, etc.

With all these features, the module

provides stable and reliable network

connections for industrial routers,

video surveillance applications, and so

on. This module series has obtained

more than 200 operators’ and

regulatory certifications worldwide,

helping customers to sell their

terminals to all over the world. Quectel

4G smart modules have built-in main

control chip and memory, supporting

the running of Android system, and the

modules feature powerful functions

and a rich set of multimedia interfaces.

Quectel 4G automotive modules are

manufactured in strict accordance with

IATF 16949:2016 standards, and

follow the automotive-grade quality

control process. The automotive

modules have excellent anti-static and

anti-electromagnetic interference

capabilities, and the entire Quectel

automotive product roadmap is

complete and clear, which matches

the trend of automotive industry in the

future.

Wireless payment,

telematics and

transportation, smart

energy, smart city,

intelligent security,

wireless gateway,

smart retail, robot,

unmanned aerial

vehicle and so on.

LPWA

Module

LPWA technology features wide

coverage, low cost, low power

consumption, and massive

connections. LPWA module series

supports NB-IoT and CAT.M

communication networks around the

world and owns characters of ultra-low

power consumption and compact size.

With its first-mover advantage in the

field of LPWA, rich product portfolio,

and superior product performance, this

series of modules has been greatly

Remote metering,

smart city, security

surveillance, home

appliances, sharing

economy, wearable

device, asset

tracker, industrial,

agricultural and

personal life, etc.


recognized in the industry, and its

market share remains in an absolute

leading position.

5G

Module

Both industrial and automotive 5G

module support 5G Sub-6 GHz,

mmWave, and both 5G NSA and SA

modes. The integrated

multi-constellation GNSS receiver

provides high-precision positioning

service. A rich set of Internet

protocols, industry-standard interfaces

and abundant functionalities and

drivers extend the applicability of the

module to a wide range of IoT and

eMBB applications. By the end of

2019, more than 200 customers in

more than 20 industries worldwide

have selected the Company's 5G

modules for terminal product

development and application.

Automotive,

industrial router,

home gateway,

industrial PDA,

video surveillance,

digital signage,

laptop, ultra HD live

video and so on.

GNSS

Module

GNSS module satisfies the positioning

requirements of IoT products.

Multi-constellation supported by the

GNSS module generally increases the

number of visible and available

satellites, greatly reduces the time to

first position, and increases positioning

accuracy especially in complicated

urban environments. The product has

the characteristics of small size, high

precision and high sensitivity.

Vehicle and

transportation,

personal tracker,

handheld device,

intelligent security

and so on.

Wi-Fi

Module

Wi-Fi module is highly reliable and can

meet the application for complex

environment. Its ultra-compact size

fully meets the demands for

size-sensitive applications, and helps

customers reduce product size and

optimize product cost. The product is

suitable for large-scale and automated

production, and can effectively help to

reduce production costs and improve

production efficiency. Wi-Fi standard

module supports 802.11a/ b/ g/ n/ ac

and Bluetooth communication. The

Automotive,

security, industrial

PDA, MiFi, health

care and so on.


2.2.1.3. Target Applications

The modules of the Company are widely used in many fields, such as telematics and transportation,

smart energy, wireless payment, smart security, smart city, wireless gateway, smart industry, smart life,

smart agriculture, etc., providing solutions for global IoT terminal devices.

2.2.2. Business Model

In the Reporting Period, the Company adopted asset-light model and has been mainly concentrating on

the design, R&D and sales service on wireless communication modules and solutions.

new generation of Wi-Fi module

supports Wi-Fi 6, provides a maximum

data rate of up to Gigabit and meet the

requirements of automotive-grade.


2.2.2.1. Procurement Model

The Company has established a strict controlling system to regulate and standardize the procurement

process, including selection and evaluation of suppliers, quality control of raw materials, etc., to ensure

the efficiency and order of procurement. Procurement department will organize purchases based on order

status, safety stock, R&D products and future market expectations.

2.2.2.2. Production Model

In the Reporting Period, production of the Company is mainly in a form of outsourcing manufacturing. The

Company only selects outsourced factories that strictly meet industrial standards and have excellent

production qualification, and strictly controls the processing process. Although the main equipment on the

relevant production line are owned by the outsourced factory, the Company designates its own on-site

engineers to supervise the entire production procedure, and deploys the Company’s self-owned test

equipment, for the testing of function, performance and specifications before the production is finished, on

production line to strengthen the control of the core processing procedures. Then, the product will be

finished and delivered outbound after being inspected by both the outsourced factories and the Company.

Further, in 2019, the Company started to build self-owned intelligent manufacturing centre to improve the

production efficiency, product quality and to guarantee the production capacity and supply.

2.2.2.3. Sales Model

In the Reporting Period, the product sales market was divided into overseas and domestic markets; sales

model included distribution and direct sales. To satisfy market development requirements and facilitate

the sales management, the Company divided the sales area into China, Europe, Asia-Africa-Latin

America and North America. Sales and technical service teams in multiple countries and regions around

the world can provide customers with timely and efficient localized services.


2.2.3. Industry Overview

According to the Ericsson Mobility Report in November 2019, the number of IoT terminal devices that use

cellular modules for communication will reach 5 billion by 2025. At the same time, the number of IoT

terminal devices using NB-IoT and Cat.M technology for IoT communication will continue to grow at a

high speed. 2G and 3G will run continuously in some major fields; the application scope of 4G will

continue to expand due to the wide coverage.

Ericsson Mobility Report

The main institutions' predictions on the development of global IoT are as follows:

Institutions Predictions

Gartner The number of global IoT device connections will reach 26 billion by 2020, more

than three times the number in 2016, in 1.9 trillion USD.

HUAWEI The number of global IoT device connections will reach 100 billion by 2025.

IHS The number of global IoT device connections will increase from 15.4 billion in

2015 to 30.7 billion in 2020, and will reach 75.4 billion by 2025.

IDC The number of global IoT device connections will reach 28.1 billion by 2020, in

1.7 trillion USD.

Machina Research The number of global IoT device connections will reach 25 billion by 2022,

releasing global industry opportunities in 1.2 trillion USD.

BI Intelligence By 2025, there will be more than 55 billion IoT devices, and total IoT related


According to the predictions of the above institutions, it is foreseeable that IoT will be a potentially huge

market with trillions of US dollars in the future. Moreover, the IoT cellular module industry is the first

application market of IoT field to provide intrinsic driving force and form a complete industrial chain.

In addition, the continuous innovation and strong policy support on communication technology is enabling

the next leap towards 5G, industrial Internet, and IoT. On Oct. 22, 2019, Wen Ku, the director of the

Information and Communication Development Department of the MIIT, said: “The withdrawal from 2G and

3G is an inevitable choice for mobile communication iteration”. As 2G and 3G are gradually evading from

people’s attention, and the scenarios of mobile communication is gradually shifting to LPWA, 4G, and 5G.

Since 5G technology is still under development, LTE and LPWA technologies will still apply to a great part

of the application market in the short term. With the advantages of wide coverage, low power

consumption, low cost, and massive connections, LPWA modules will meet the needs in large-scale

scenarios with narrow bands and low speed; LTE modules will apply to medium-speed connection

scenarios in IoT field: among all the LTE module series, Cat.1 is applied to the IoT scenarios of low and

medium speeds, with requirements for high-speed mobility and supporting of voice service; Cat.4

supports higher speed and low latency connectivity and has excellent network coverage, and

technologies above Cat.16 will be gradually mature and satisfy the needs of certain high-speed

applications in the situation where 5G has not yet been applied on a large scale. In the future, 5G will be

applied to high-speed scenarios with high bandwidth and extremely demanding latency.

In June 2019, 3GPP organization completed and froze the Release 15 standards, as the first phase of the

5G standards version, which means 5G commercial application process is steadily moving forward

globally. Whether to support NSA, SA, Sub-6 GHZ, and mmWave will become a functional consideration

for the module industry. In the future, the market may compete in terms of AI, edge computing, and

Internet of Vehicles technology integration on 5G modules.

On Jun. 6, 2019, the MIIT issued 5G commercial licenses to China Telecom, China Mobile, China Unicom,

and CBN. Thereafter, China officially entered the first year of 5G commercialization. With the

characteristics of high speed, low latency, high reliability, 5G is the development direction of the next

generation of information technology and a critical foundation for the digital economy. On Aug. 29, 2019,

the MIIT issued The Implementation Opinions of the MIIT on Promoting the Quality of Manufacturing

Products and Services (Branch of the MIIT [2019] No. 188), which also mentioned the need to speed up

the development of 5G and IoT related industries. With the gradual maturity of 5G technology and the

integration of 5G, AI and IoT, a brand-new intelligently-connected world is coming into being.

On Feb. 21, 2020, the Political Bureau of the CPC Central Committee convened a meeting that

investments will exceed 25 trillion USD.

Ericsson The number of IoT terminal devices that use cellular modules for communication

will reach 5 billion by 2025.

GSMA

By 2025, the number of global IoT device connections (including cellular and

non-cellular) will reach 25.2 billion. In China, the number was 2.3 billion in 2018;

and it is expected to reach 7 billion by 2022.


emphasized that development on biomedicine, medical equipment, 5G networks, and industrial Internet

should be accelerated. On Mar. 4, 2020, the Standing Committee of the Political Bureau of the CPC

Central Committee convened a meeting to emphasize once again the acceleration of 5G networks, data

centers and other new infrastructure. On Mar. 24, 2020, the MIIT issued the Notice on Promoting the

Rapid Development of 5G (the MIIT (2020) No. 49), which mentioned “to strengthen the R&D of 5G

technology and standards”, and “to accelerate the R&D of 5G application modules to support the

large-scale application of industrial production, wearable devices and other common terminals and to

continue to support the R&D, engineering and industrialization of core 5G chipsets, key components,

software, instruments and other 5G key fields, to lay the foundation for industrial development”.

Quectel Wireless Solutions is committed to becoming a leader in the innovation of the IoT field. As higher

requirements for network speed, stability and time latency are raised for various scenarios of IoT, the

Company continuously updates the module products that lead the development of the industry and brings

5G, 4G, LPWA, automotive, smart and other modules to drive tremendous application innovation in the

industry. The wireless communication module is an indispensable important bond in the IoT industry. The

Company will take full advantage of the resources in IoT industry, strengthen the close cooperation

between the upstream and downstream of the module industry, and continuously improve the

industrialization capabilities of terminal products for various users to provide users with complete

solutions, comprehensively integrate Chinese IoT products into the global market and lead the industry

forward.

2.3. Key Accounting Data and Financial Indicators

2.3.1. Key Accounting Data and Financial Indicators for the Past Three Years

Unit: Yuan Currency: RMB

2019 2018 Fluctuation (%) 2017

Total assets 2,931,973,545.61 1,292,448,613.62 126.85 806,416,280.30

Revenue 4,129,746,036.13 2,701,473,995.49 52.87 1,660,800,819.29

Net profits attributable

to shareholders of the

listed company

148,001,477.82 180,485,212.16 -18.00 81,513,812.13

Net profits excluding

non-recurring profit or

loss attributable to

shareholders of the

listed company

134,838,343.05 170,403,764.16 -20.87 76,326,878.40

Net assets attributable

to shareholders of the

listed company

1,714,723,122.18 655,299,024.64 161.67 465,427,565.86

Net cash flow from -143,946,666.41 84,305,901.32 -270.74 16,900,381.68


operating activities

Basic earnings per

share (RMB/share) 1.94 2.70 -28.15 1.30

Diluted earnings per

share (RMB/share) 1.94 2.70 -28.15 1.30

Weighted average

ROE (%) 13.34 32.21 -18.87 22.97

2.3.2. Key Accounting Data by Quarter in the Reporting Period


Q1 Q2 Q3 Q4

Revenue 739,353,549.75 968,519,875.97 1,146,989,817.94 1,274,882,792.47

Net profits attributable to

shareholders of the listed

company

43,419,624.25 34,796,511.61 15,182,031.25 54,603,310.71

Net profits excluding

non-recurring profit or

loss attributable to

shareholders of the listed

company

42,844,323.20 32,708,236.63 12,551,303.17 46,734,480.05

Net cash flow from

operating activities -144,516,303.31 85,930,359.03 -287,494,378.03 202,133,655.90

2.4. Share Capital and Shareholders

2.4.1. Total Number of Shareholders and Top 10 Shareholders.

Total number of common shareholders at the end of the Reporting Period 13,590

Total number of common shareholders at the end of the last month before

the disclosure date of the annual report 13,058

Total number of preferred shareholders with voting rights restored at the

end of Reporting Period 0

Total number of preferred stockholders with voting rights restored at the

end of the last month before the disclosure date of the annual report 0

Shareholding of the top 10 shareholders

Name of

Shareholder

Increase

or

Number of

shares

Shareholding

percentage

Number of

restricted

Pledged or frozen

shares

Type of

shareholder


(Full Name) decrease

of shares

during the

Reporting

Period

held at the

end of the

Reporting

Period

shares

held Status

of

shares

Amount

Penghe

QIAN

0 21,205,050 23.78 21,205,050 - 0 Domestic

natural person

Ningbo

Quectel

Investment

Partnership

(Limited

Partnership)

0 7,000,000 7.85 7,000,000 - 0

Domestic

non-state-

owned legal

person

EdgeWater

Investments

- Shanghai

Jidu

Investment

Center

(Limited

Partnership)

0 4,620,000 5.18 4,620,000 - 0

Domestic

non-state-own

ed legal

person

Chongqing

Xinzhan

Equity

Investment

Fund

Managemen

t Co.,

Ltd.-Chongq

ing Xinzhan

Baoda

Investment

Center

(Limited

Partnership)

0 3,813,559 4.28 3,813,559 - 0

Domestic

non-state-own

ed legal

person

Chuango

Security

Technology

Co., Ltd

0 3,495,000 3.92 3,495,000 Pledged 1,600,0

00

Domestic

non-state-own

ed legal

person

Xiangdong,

REN

0 2,666,666 2.99 2,666,666 - 0 Domestic

natural person

Ningbo

Lanshi

Chuangyua

0 2,421,308 2.72 2,421,308 Pledged 450,000 Domestic

non-state-own

ed legal


2.4.2. The Ownership and Controlling Relationship Between the Controlling Shareholder and the

Company

√ Applicable □ Not applicable

n Venture

Capital

Partnership

(Limited

Partnership)

person

Xiaoan,

WANG

2,381,360 2,381,360 2.67 0 - 0 Domestic

natural person

Shanghai

Xingzhi

Venture

Capital Co.,

Ltd.

0 2,380,000 2.67 2,380,000 - 0 Domestic

non-state-own

ed legal

person

Zhuming,

LIAO

0 2,000,000 2.24 2,000,000 Pledged 500,000 Domestic

natural person

Explanation of

associated relationship

between and concerted

action of

above-mentioned

shareholders.

1. The controlling shareholder Penghe QIAN is the executive partner of the

shareholder Ningbo Quectel Investment Partnership (Limited

Partnership) and holds a 0.43% share of its capital contribution.

2. In addition to the above, the Company is not aware of there is other

associated relationship between and concerted action of the

above-mentioned shareholders.

Explanation of preferred

stockholders with voting

rights restored and

number of held shares

Not applicable


2.4.3. The Ownership and Controlling Relationship Between the Actual Controller and the

Company

√ Applicable □ Not applicable


3 Management Discussion and Analysis of Business Operation

3.1. Analysis on Main Business

During the Reporting Period, the Company's revenue was RMB 4,129,746,036.13, increased by 52.87%

over the same period of last year; the net profits attributable to shareholders of the listed company was

RMB 148,001,477.82, decreased by 18.00% over the same period of last year.

3.2. Changes in Consolidation Scope when Compared to the Previous Financial Year

√Applicable □Not applicable

By December 31, 2019, the Company’s scope of consolidation is as follows.

Name of Subsidiary

Anysmart Technologies Company Limited

Quectel Technologies Company Limited

Quectel Wireless Solutions Co., Ltd.

Quectel Telecom Technology Co.,Ltd

Hong Kong Quectel Technologies Company Limited

Company Name Quectel Wireless Solutions Co., Ltd.

Legal Representative Penghe QIAN

Date April 13, 2020


4 Financial Reports

Consolidated Balance Sheet

Dec. 31, 2019

Name of enterprise: Quectel Wireless Solutions Co., Ltd.


Items Dec. 31, 2019 Dec. 31, 2018

Current Assets:

Cash and bank balances 601,191,423.32 283,455,763.66

Financial assets held for trading 301,118,055.56

Notes receivable 31,632,857.05

Accounts receivable 480,932,487.85 211,524,659.06

Accounts receivable financing 178,553,333.41

Prepayments 15,026,229.99 3,133,596.78

Other receivables 35,718,179.44 42,745,945.49

Inventories 724,338,080.95 494,655,325.54

Other current asset 221,122,770.18 117,134,548.67

Total current assets 2,558,000,560.70 1,184,282,696.25

Non-current Assets:

Other equity instrument investment 60,000,000.00

Fixed assets 159,112,536.14 68,290,112.57

Construction in process 21,768,111.39

Intangible assets 53,785,328.05 19,921,820.25

Long-term deferred expenses 44,694,624.82 11,613,933.22

Deferred tax assets 5,609,982.41 2,961,789.79

Other non-current assets 29,002,402.10 5,378,261.54

Total non-current assets 373,972,984.91 108,165,917.37

Total assets 2,931,973,545.61 1,292,448,613.62

Current Liabilities:


Short-term borrowings 236,535,945.54 60,653,308.92

Notes payable 127,045,352.65 99,966,588.12

Account payable 723,773,777.03 384,137,110.04

Advances from customers 29,136,712.76 20,503,028.68

Employee salaries payable 94,749,548.93 69,267,044.53

Taxes payable 4,684,557.45 2,225,220.62

Other payables 1,324,529.07 397,288.07

Total current liabilities 1,217,250,423.43 637,149,588.98

Total liabilities 1,217,250,423.43 637,149,588.98

Shareholders’ equity

Share capital 89,180,000.00 66,880,000.00

Capital reserve 1,172,630,636.96 283,461,115.43

Other comprehensive income 21,323.70 68,225.51

Surplus reserve 35,468,387.85 27,517,290.29

Retained earnings 417,422,773.67 277,372,393.41

Total equity attributable to parent company 1,714,723,122.18 655,299,024.64

Minority interests

Total shareholders’ equity 1,714,723,122.18 655,299,024.64

Total liabilities and shareholders’ equity 2,931,973,545.61 1,292,448,613.62


Parent Company Balance Sheet

Dec. 31, 2019

Name of enterprise: Quectel Wireless Solutions Co., Ltd.


Items Dec. 31, 2019 Dec. 31, 2018

Current Assets:

Cash and bank balances 506,572,015.47 275,656,693.13

Financial asset held for trading 301,118,055.56

Notes receivable 31,632,857.05

Accounts receivable 477,027,756.48 211,476,210.49

Accounts receivable financing 181,831,546.86

Prepayments 9,917,961.67 2,764,531.90

Other receivables 34,294,491.87 43,304,545.98

Inventories 722,611,632.60 494,655,325.54

Other current assets 218,383,697.24 116,241,479.54

Total current assets 2,451,757,157.75 1,175,731,643.63

Non-current Assets:

Long-term equity investment 121,839,380.85 10,315,770.00

Fixed assets 122,061,707.77 59,500,003.26

Intangible assets 53,785,328.05 19,921,820.25

Long-term deferred expenses 33,897,227.17 9,203,617.42

Deferred tax assets 5,558,054.07 2,959,381.37

Other non-current assets 14,406,480.58 4,665,953.54

Total non-current assets 351,548,178.49 106,566,545.84

Total assets 2,803,305,336.24 1,282,298,189.47

Current Liabilities:

Short-term borrowings 236,535,945.54 41,153,308.92


Notes payable 117,131,012.65 99,966,588.12

Account payable 763,400,302.97 461,847,377.84

Advances from customers 28,859,240.70 20,451,445.72

Employee salaries payable 41,008,266.21 36,504,750.46

Taxes payable 2,973,271.06 2,141,153.67

Other payables 4,533,255.53 2,350,020.30

Total current liabilities 1,194,441,294.66 664,414,645.03

Total liabilities 1,194,441,294.66 664,414,645.03

Shareholders’ equity

Share capital 89,180,000.00 66,880,000.00

Capital reserve 1,172,630,636.96 283,461,115.43

Surplus reserve 35,468,387.85 27,517,290.29

Retained earnings 311,585,016.77 240,025,138.72

Total shareholders’ equity 1,608,864,041.58 617,883,544.44

Total liabilities and shareholders’ equity 2,803,305,336.24 1,282,298,189.47


Consolidated Income Statement

Jan. to Dec. 2019


Item Year 2019 Year 2018

I. Revenue 4,129,746,036.13 2,701,473,995.49

Including: Operating revenue 4,129,746,036.13 2,701,473,995.49

II. Total operating costs 3,982,036,060.84 2,510,196,701.22

Including: Costs of sales 3,256,180,032.99 2,150,196,181.62

Taxes and surcharges 7,101,926.42 1,783,110.98

Selling expenses 202,063,698.01 123,495,656.24

Administrative expenses 127,790,047.09 72,725,527.78

Research and development

expenses 361,645,466.78 163,602,845.18

Finance expenses 27,254,889.55 -1,606,620.58

Including: Interest expenses 6,660,819.06 3,225,120.96

Interest income 3,954,030.36 937,580.50

Add: Other income 12,710,079.20 9,981,569.45

Investment income (loss

expressed with "-") 2,331,250.00 427,479.45

Gains/loss on fair value changes

(loss expressed with "-") 360,071.08

Credit impairment losses (loss

expressed with "-") -13,803,046.33

Asset impairment losses (loss

expressed with "-") -3,909,970.71 -10,227,117.38

III. Operating profit (loss expressed with

"-") 145,398,358.53 191,459,225.79

Add: Non-operating income 10,782.43 1,117,179.08

Subtract: Non-operating expenses 55,855.76

IV. Total profit (loss expressed with "-") 145,353,285.20 192,576,404.87

Subtract: Income tax expenses -2,648,192.62 12,091,192.71

V. Net profit (loss expressed with "-") 148,001,477.82 180,485,212.16


Net profit from continuing operations

(loss expressed with "-") 148,001,477.82 180,485,212.16

Net profit attributable to shareholders

of the parent company (loss expressed

with "-")

148,001,477.82 180,485,212.16

VI. Other comprehensive income (net of

tax) -46,901.81 -83,162.08

A. Other net comprehensive incomes

attributable to owners of the Parent -46,901.81 -83,162.08

1. Other comprehensive income to be

reclassified into profit or loss -46,901.81 -83,162.08

(1) Foreign currency exchange

reserves -46,901.81 -83,162.08

VII. Total comprehensive income 147,954,576.01 180,402,050.08

A. Total comprehensive income

attributable to shareholders of the

parent

147,954,576.01 180,402,050.08

B. Consolidated income attributable to

minority shareholders

VIII. Earnings per share

A. Basic earnings per share

(RMB/share) 1.94 2.70

B. Diluted earnings per share

(RMB/share) 1.94 2.70


Parent Company Income Statement

Jan. to Dec. 2019



I. Revenue 4,110,103,370.79 2,703,616,936.32

Subtract: Costs of sales 3,497,800,973.66 2,250,284,345.84

Taxes and surcharges 6,161,227.24 1,291,197.96

Selling expenses 95,214,844.04 62,447,086.40

Administrative expenses 224,011,466.80 109,753,953.16

Research and development

expenses 177,184,292.88 115,581,747.24

Finance expenses 26,417,587.60 -2,298,561.11

Including: Interest expenses 6,086,993.64 2,470,137.90

Interest income 3,852,338.75 921,333.39

Add: Other income 8,315,733.20 8,102,988.00

Investment income (loss expressed

with “-”) 2,331,250.00 427,479.45

Gains/loss on fair value changes

(loss expressed with “-”) 360,071.08

Credit impairment losses (loss

expressed with “-”) -13,442,114.47 -10,208,036.25

Asset impairment losses (loss

expressed with “-”) -3,909,970.71

II. Operating profit (loss expressed with “-”) 76,967,947.67 164,879,598.03

Add: Non-operating income 211.00 1,101,399.08

Subtract: Non-operating expenses 55,855.76

III. Total profit (loss expressed with “-”) 76,912,302.91 165,980,997.11

Subtract: Income tax expenses -2,598,672.70 12,093,472.69

IV. Net profit (loss expressed with “-”) 79,510,975.61 153,887,524.42

A. Net profit from continuing operations (loss

expressed with “-”) 79,510,975.61 153,887,524.42

V. Total comprehensive income 79,510,975.61 153,887,524.42


VI. Earnings per share

A. Basic earnings per share (RMB/share) 1.04 2.30

B. Diluted earnings per share (RMB/share) 1.04 2.30

Consolidated Cash Flow Statement

Jan. to Dec. 2019



I. Cash flows from operating activities

Cash received from sales of goods or rendering

of services 3,499,883,811.23 2,498,432,109.95

Refunds of taxes 257,003,327.77 213,221,324.68

Cash received from other operating activities 19,165,180.20 13,232,181.15

Sub-total of cash inflows from operating

activities 3,776,052,319.20 2,724,885,615.78

Cash paid for goods and services 3,286,391,494.07 2,299,729,531.49

Cash paid to and on behalf of employees 438,857,181.89 220,909,541.84

Cash paid for all types of taxes 24,464,530.09 29,993,320.70

Cash paid for other operating activities 170,285,779.56 89,947,320.43

Sub-total of cash outflows from operating

activities 3,919,998,985.61 2,640,579,714.46

Net cash flows from operating activities -143,946,666.41 84,305,901.32

II. Cash flows from investing activities

Cash received from disposal or returns of

investments 300,000,000.00 60,000,000.00

Cash received from returns on investments 2,331,250.00 427,479.45

Sub-total of cash inflows from investing

activities 302,331,250.00 60,427,479.45

Cash paid for the purchase and construction of

fixed assets, intangible assets and other

long-term assets

233,954,963.16 72,419,180.12

Cash paid for the acquisition of investment 660,757,984.48

Sub-total of cash outflows from investing

activities 894,712,947.64 72,419,180.12


Net cash flows from investing activities -592,381,697.64 -11,991,700.67

III. Cash flows from financing activities

Cash received from investment absorption 902,000,112.83

Cash received from borrowings 275,093,961.81 60,653,308.92

Sub-total of cash inflows from financing

activities 1,177,094,074.64 60,653,308.92

Cash repayments of borrowings 101,777,690.55

Cash paid for distribution of dividends, profits or

for interest expenses 3,481,788.33 2,231,583.76

Sub-total of cash outflows from financing

activities 105,259,478.88 2,231,583.76

Net cash flows from financing activities 1,071,834,595.76 58,421,725.16

IV. Effect of exchange rate fluctuation on

cash and cash equivalents 3,604,675.73 1,437,006.31

V. Net increase in cash and cash equivalents 339,110,907.44 132,172,932.12

Add: Balance of cash and cash equivalents

at the beginning of the period 258,463,963.66 126,291,031.54

VI. Balance of cash and cash equivalents at

the end of the period 597,574,871.10 258,463,963.66


Parent Company Cash Flow Statement

Jan. to Dec. 2019



I. Cash flows from operating activities

Cash received from sales of goods or rendering

of services 3,467,884,522.06 2,501,232,090.11

Refunds of taxes 257,003,327.77 213,221,324.68

Cash received from other operating activities 14,135,301.80 13,279,603.74

Sub-total of cash inflows from operating

activities 3,739,023,151.63 2,727,733,018.53

Cash paid for goods and services 3,524,615,079.12 2,347,078,774.33

Cash paid to and on behalf of employees 182,862,429.37 95,221,164.69

Cash paid for all types of taxes 18,074,729.14 25,334,164.85

Cash paid for other operating activities 267,937,439.28 158,937,048.27

Sub-total of cash outflows from operating

activities 3,993,489,676.91 2,626,571,152.14

Net cash flows from operating activities -254,466,525.28 101,161,866.39

II. Cash flows from investing activities

Cash received from disposal or returns of

investments 300,000,000.00 60,000,000.00

Cash received from returns on investments 2,331,250.00 427,479.45

Sub-total of cash inflows from investing

activities 302,331,250.00 60,427,479.45

Cash paid for the purchase and construction of

fixed assets, intangible assets and other

long-term assets

175,372,069.81 60,141,693.75

Cash paid for the acquisition of investment 712,281,595.33 8,000,000.00

Sub-total of cash outflows from investing

activities 887,653,665.14 68,141,693.75

Net cash flows from investing activities -585,322,415.14 -7,714,214.30

III. Cash flows from financing activities

Cash received from investment absorption 902,000,112.83


Cash received from borrowings 275,093,961.81 41,153,308.92

Sub-total of cash inflows from financing

activities 1,177,094,074.64 41,153,308.92

Cash repayments of borrowings 82,277,690.55

Cash paid for distribution of dividends, profits or

for interest expenses 2,892,254.57 1,492,309.04

Sub-total of cash outflows from financing

activities 85,169,945.12 1,492,309.04

Net cash flows from financing activities 1,091,924,129.52 39,660,999.88

IV. Effect of exchange rate fluctuation on

cash and cash equivalents 3,671,933.24 1,477,398.39

V. Net increase in cash and cash

equivalents 255,807,122.34 134,586,050.36

Add: Balance of cash and cash equivalents

at the beginning of the period 250,664,893.13 116,078,842.77

VI. Balance of cash and cash equivalents at

the end of the period 506,472,015.47 250,664,893.13


Consolidated Statement of Changes in Shareholder's Equity Period: January-December 2019

Monetary unit: RMB

Items

Year 2019

Shareholders’ Equity Attributable to Parent

Minority

Interest

Total

shareholders’

equity Share capital

Other Equity Instruments

Capital Reserve

Less:

Treasury

Stock

Other

Comprehensive

Income

Special

Reserves

Surplus

Reserve

General Risk

Provision

Retained

earnings Others Subtotal

Preferred

Stock

Perpetual

Debt Others

Ⅰ. Closing

Balance of Prior

Year

66,880,000.00 283,461,115.43 68,225.51 27,517,290.29 277,372,393.41 655,299,024.64 655,299,024.64

Ⅱ. Opening

Balance of Current

Year

66,880,000.00 283,461,115.43 68,225.51 27,517,290.29 277,372,393.41 655,299,024.64 655,299,024.64

Ⅲ. Increases/

Decreases in

Current Year

("-" for Decreases)

22,300,000.00 889,169,521.53 -46,901.81 7,951,097.56 140,050,380.26 1,059,424,097.54 1,059,424,097.54

1. Total

Comprehensive

Income

-46,901.81 148,001,477.82 147,954,576.01 147,954,576.01

2. Contributed

Capital by Owners

and Capital

Withdrawal

22,300,000.00 889,169,521.53 911,469,521.53 911,469,521.53

(1) Common

Stocks Invested by

Owners

22,300,000.00 879,700,112.83 902,000,112.83 902,000,112.83

(2) The Amount of

Share-Based

Payments

Recorded in

shareholders’

Equity

9,469,408.70 9,469,408.70 9,469,408.70

3. Profit

Distribution 7,951,097.56 -7,951,097.56

(1) Accrual of

Surplus Reserve 7,951,097.56 -7,951,097.56

Ⅳ. Balance at the

End of year 89,180,000.00 1,172,630,636.96 21,323.70 35,468,387.85 417,422,773.67 1,714,723,122.18 1,714,723,122.18


Items

Year 2018

Shareholders’ Equity Attributable to Parent

Minority

Interest

Total

shareholders’

equity Share capital


Capital Reserve

Less:

Treasury

Stock

Other

Comprehensive

Income

Special

Reserves

Surplus

Reserve

General Risk

Provision Retained earnings Others Subtotal

Preferred

Stock Perpetual Debt Others

Ⅰ. Closing

Balance of Prior

Year

66,880,000.00 273,991,706.73 151,387.59 12,128,537.85 112,275,933.69 465,427,565.86 465,427,565.86

Ⅱ. Opening

Balance of Current

Year

66,880,000.00 273,991,706.73 151,387.59 12,128,537.85 112,275,933.69 465,427,565.86 465,427,565.86

Ⅲ. Increases/

Decreases in

Current Year

("-" for Decreases)

9,469,408.70 -83,162.08 15,388,752.44 165,096,459.72 189,871,458.78 189,871,458.78

1. Total

Comprehensive

Income

-83,162.08 180,485,212.16 180,402,050.08 180,402,050.08

2. Contributed

Capital by Owners

and Capital

Withdrawal

9,469,408.70 9,469,408.70 9,469,408.70

(1) The Amount of

Share-Based

Payments

Recorded in

Shareholders’

Equity

9,469,408.70 9,469,408.70 9,469,408.70

3. Profit

Distribution 15,388,752.44 -15,388,752.44

(1) Accrual of

Surplus Reserve 15,388,752.44 -15,388,752.44

Ⅳ. Balance at the

End of the Year 66,880,000.00 283,461,115.43 68,225.51 27,517,290.29 277,372,393.41 655,299,024.64 655,299,024.64


Changes in Parent Company Shareholders' Equity January-December 2019

Monetary unit: RMB

Items

Year 2019

Share capital


Capital Reserve Less: Treasury

Stock

Other Comprehensive

Income

Special Reserves

Surplus Reserve

Retained earnings

Total

shareholders’

equity Preferred

Stock

Perpetual

Debt Others

Ⅰ. Closing Balance of Prior Year 66,880,000.00 283,461,115.43 27,517,290.29 240,025,138.72 617,883,544.44

Ⅱ. Opening Balance of Current

Year 66,880,000.00 283,461,115.43 27,517,290.29 240,025,138.72 617,883,544.44

Ⅲ. Increases/ Decreases in Current

Year ("-" for Decreases) 22,300,000.00 889,169,521.53 7,951,097.56 71,559,878.05 990,980,497.14

1. Total Comprehensive Income 79,510,975.61 79,510,975.61

2. Contributed Capital by Owners

and Capital Withdrawal 22,300,000.00 889,169,521.53 911,469,521.53

(1) Common Stocks Invested by

Owners 22,300,000.00 879,700,112.83 902,000,112.83

(2) The Amount of Share-Based

Payments Recorded in Owners’

Equity

9,469,408.70 9,469,408.70

3. Profit Distribution 7,951,097.56 -7,951,097.56

(1) Accrual of Surplus Reserve 7,951,097.56 -7,951,097.56

Ⅳ. Balance at the End of the Year 89,180,000.00 1,172,630,636.96 35,468,387.85 311,585,016.77 1,608,864,041.58


Items

Year 2018

Share capital


Capital Reserve Less: Treasury

Stock

Other Comprehensive

Income

Special Reserves

Surplus Reserve

Retained earnings

Total

shareholders’

equity Preferred

Stock

Perpetual

Debt Others

Ⅰ. Closing Balance of Prior Year 66,880,000.00 273,991,706.73 12,128,537.85 101,526,366.74 454,526,611.32

Ⅱ. Opening Balance of Current Year 66,880,000.00 273,991,706.73 12,128,537.85 101,526,366.74 454,526,611.32

Ⅲ. Increases/ Decreases in Current

Year ("-" for Decreases) 9,469,408.70 15,388,752.44 138,498,771.98 163,356,933.12

1. Total Comprehensive Income 153,887,524.42 153,887,524.42

2. Contributed Capital by Owners

and Capital Withdrawal 9,469,408.70 9,469,408.70

(1) The Amount of Share-Based

Payments Recorded in Owners’

Equity

9,469,408.70 9,469,408.70

3. Profit Distribution 15,388,752.44 -15,388,752.44

(1) Accrual of Surplus Reserve 15,388,752.44 -15,388,752.44

Ⅳ. Balance at the End of the Year 66,880,000.00 283,461,115.43 27,517,290.29 240,025,138.72 617,883,544.44

quectel wireless solutions co., ltd

Documents