Cogobuy Announces 2020 Interim Results
Net Profit Significantly Increases 193.6% to RMB118.6 Million
HONG KONG, Sept. 1, 2020 /PRNewswire/ --
Highlights of the Interim Results for the Six Months Ended June 30, 2020:
Cogobuy Group ("Cogobuy" or the "Company", stock code: 400.HK; with its subsidiaries (the ''Group'')), a technology service company focusing on serving global chip industry and artificial intelligence ("AI") and internet of things ("IoT", together "AIoT") ecosystem, is pleased to announce its unaudited interim results for the six months ended June 30, 2020 ("the first half of 2020" or the "Period").
Financial Highlights of the First Half of 2020
With policies continuing to favor greater 5G infrastructure to support the IoE in China, Cogobuy's chips business directly benefits from the rising domestic demand for chips, leading to the organic growth in the revenue. The Company's net profit and revenue have both recorded a significant increase, of which the growth rate of net profit is faster than revenue, with a year-on-year increase of 193.6% and 22.8% respectively. For the six months ended 30 June 2020, the Group's net profit was approximately RMB118.6 million, a YoY increase of 193.6%; revenue was approximately RMB3,281.2 million, a YoY increase of 22.8%; gross profit was approximately RMB254.6 million, representing a YoY increase of 27.0 %. The increase in gross profit margin was contributed by change in sales mix in which sales in proprietary markets such as, the Internet of Vehicles, smart homes, AI surveillance, etc. had a relatively higher gross margin than those of the traditional IC components. During the period, profit attributable to equity shareholders of the Company was approximately RMB 100.1 million. For the six months ended 30 June 2020, the Company's cash and bank balances including short-term bank deposits and pledged deposits was RMB343.3 million. The Group's bank loans were RMB145.7 million. Basic common shares outstanding were 1,417,416,732 as of 30 June 2020; weighted average number of ordinary shares for the purpose of diluted earnings per share were 1,400,271,000.
Following a business restructure completed in early 2020, Cogobuy Group was reorganized into two primary businesses of "Ingdan Innovations" and "Ingfin Services" (the "IFS"). Cogobuy combined its IC components sales and marketing platform, Cogobuy.com, with its Ingdan AIoT business service platform, to form Ingdan Innovations, to focus on the sales and promotion of IC chips to AIoT manufacturers in China. Meanwhile, Ingfin Services focuses on the research and development and sales of proprietary products and developing customized technical solutions which include bundles of software, hardware and core components. Targeted to Vehicle to Everything (V2X), 5G applications, and memory and storage areas, Ingfin Services 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. Upon the completion of the restructuring, the Company holds 75% of Ingdan Innovations.
Cogobuy Business Directly Benefits from 5G's Development and Applications
Ingdan Innovations, under Cogobuy, reached agreements with over 50% of global high-end chip suppliers and many top domestic chip companies, allowing it to serve hundreds of global high-end chip suppliers upstream, and thousands of AIoT hardware companies downstream. Additionally, rapid penetration of 5G across different industries is driving demand for chips and related technology applications. Cogobuy which focuses on serving global chip industry and AIoT ecosystem, has directly benefited from the boom in industrial demand. Through IngDan Innovation, the Company is capturing the boom from 5G all along the industrial chain, including related 5G network construction, AIoT applications and artificial intelligence, such as V2X, intelligent medical devices, and intelligent manufacturing devices. The new demand for chips from these growing industries will create important new growth momentum for the Group in the future.
New Business Areas: Focusing on the Internet of Vehicles Business
Every industry is now utilizing 5G and expanding its industrial application scenarios, especially Vehicle to Everything (V2X), which is regarded as the most prominent segment within 5G vertical industry applications. According to CCID data, by 2021, China's V2X market is estimated to reach 115 billion US dollars, with a compound annual growth rate of approximately 28.1%.
Cogobuy is optimistic about the potential of V2X, and already has a strategic focus on the V2X market through its two primary businesses, Ingdan Innovations and Ingfin Services. The Company also established the V2X value-chain alliance with chip manufacturers, module suppliers, and car manufacturers, which will bring significant market opportunities and be new growth momentum for Cogobuy. IngDan Innovation's Advanced Driver Assistance Systems ("ADAS'') chip products, the demand for which has increased over 300% compared with the same period last year, and In-Vehicle Infotainment (IVI) chip products are highly sought after by China's first-tier automotive pre-installation market, helping the Group develop its Internet of Vehicles business and capture dividends from the smart car industry.
Additionally during the Period, Ingfin Services' (IFS) V2X application solution received its first order for its proprietary product which utilizing the big data collected by AI analysis terminal devices, to provide one-stop solution for accurate vehicle rescue, service tracking, driving analysis, remote accident identification, as well as fast claims settlement in the Chinese market. Cogobuy expects IFS's proprietary product business to grow rapidly.
Ingdan Innovations Brings on First Leading Strategic Investor
With the acceleration of 5G construction and new infrastructure in China, the business development and potential of Ingdan Innovations successfully obtained the subscription of other strategic investors. In August 2020, the Group successfully brought on Guangdong Finance Fund Management, which belongs to Guangdong's largest provincial integrated financial platform, as Ingdan Innovations' first leading strategic investor to support its development in the rapidly growing 5G market and trillion-RMB domestic chip market. The new capital will also assist Cogobuy Group in resuming its high growth.
Mr. Jeffrey Kang, CEO of Cogobuy Group, said, "Cogobuy returned to growth in 2020. During the Period, Cogobuy was well positioned to capture the market opportunities arising from the rapid expansion of 5G applications and infrastructure. We provide our services to the global chip industry and AIoT ecosystem, and continue to extend our reach into different potential markets. To further optimize the Company's business, we are focusing on developing new, fast-growing industries within China in the coming years through our new "Ingdan Innovations + Ingfin Services" dual business model. Ingdan Innovations is the Group's technical service platform engaged in chips sales, while Ingfin Services offers both the Company's proprietary products and financing services. The model has resulted in strong performance in both profit and revenue in the first half of 2020.
During the Period, we were proud to welcome the Group's first leading strategic investor, Guangdong Finance Fund Management via Ingdan Innovations. The investment will provide capital and resources to support the expansion of Cogobuy's market share in the trillion-RMB domestic chip market, which will help Cogobuy both resume and maintain a high growth rate in the future.
Looking ahead to the second half of 2020, China has invested in infrastructure as way to resume and stabilize the domestic economy, which has further facilitated domestic 5G infrastructure development and driven the demand for high-end chips. We expect domestic demand for high-end chips to increase significantly in the near term and following years, providing an opportunity for significant growth in our chip sales. We look forward to continuing to meet the demands arising from new 5G industries as they develop, and 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 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 and are subject to significant risks and uncertainties, and 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 service company focusing on serving 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 U.S., Singapore, Israel, and Japan. The Group was composed by Ingdan Innovations, a technical service platform serving chip industry, and "Ingfin Services", integrated the Company's proprietary products, financing, and other enterprise services, forming a new "Ingdan Innovations + Ingfin Services" dual business model. For further information, please refer to the Company's website at http://www.cogobuy.com/
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