Motorcomm Electronic Technology Co., Ltd.
2024Action Plan for
"Improving Quality, Increasing Efficiency and Enhancing Return"
Securities code：
688515
ABOUTTHIS REPORT
041014161819
Attaching importance to R&D andenhancing core competencies with thefocus on the principal businessesOptimizing financial managementto improve profitability andoperational efficiencyOptimizing corporate governanceand enhancing the awareness of"the critical few"Improve information disclosureand build a multi-level investorcommunication mechanismThe management andshareholders will share burdensand benefits, to actively conveyvalue of the CompanyOthers
Motorcomm Electronic Technology Co., Ltd. (hereinafter referred to as "Motorcomm" or "the Company")believes that it is a listed company's rightful obligation for its development and its duty towards its investorsto improve its quality, increase its investors' returns and enhance its investors' sense of gain.To practise the "investor-oriented" development concept as a listed company and safeguard all shareholders'interests, the Company has specially drafted the 2024 Action Plan for "Improving Quality and IncreasingEfficiency for Higher Returns" (hereinafter referred to as "the Action Plan") based on its confidence in futuredevelopment prospects and value recognition.This Action Plan was reviewed and approved at the 17th meeting of the Company's 1st Board of Directors onApril 26, 2024.
2024 Action Plan for "Improving Quality, Increasing Efficiency and Rewarding"
Since its establishment, the Company has aimed to achieve high reliability and stability of communications. Entering the market withEthernet physical layer chips, it aims at the seven physical layers, data link layer and network layer of the OSI seven-layer model.As of 2023, it has developed seven major product lines for CNC Ethernet physical layer chips, CNC Ethernet switch chips, CNC Ethernetnetwork card chips, vehicle-borne Ethernet physical layer chips, vehicle-borne Ethernet switch chips, vehicle-borne gateway chips, andvehicle-borne high-speed video transmission chips. At present, CNC Ethernet physical layer chips, CNC Ethernet switch chips, CNCEthernet network card chips and vehicle-borne Ethernet physical layer chips have been put into mass production. The Company coversmultiple ?elds, including data communication, security, consumption, telecommunication, industry and vehicle-borne devices. Its prod-ucts are classi?ed as commercial, industrial and automotive grade, including routers, RP repeaters, LED displays, smart TV sets, wire-less terminals, PV, set top boxes, network printers, cameras, mining, power systems, data centers, industrial control, ships, switches,industrial Internet, industrial automation, smart instruments, piloted driving, millimeter-wave radars, intelligent central control, lidarand other application scenarios.Attachingimportance to R&Dand enhancingcore competencieswith the focuson the principalbusinessesDevoting to R&D, design and merchandising of high-speed wired communication chips, Motorcomm is oneof the few enterprises able to supply 100M, 1,000M and
2.5G Ethernet series chips in Mainland China.
sevenphysical layers
Ethernetphysical
layer chips
vehicle-bornegateway chips
Ethernetnetwork cardchipsEthernet
switchchips
vehicle-borne
Ethernetchips
vehicle-borneEthernet switchchips
vehicle-bornehigh-speed videotransmission
chips
datacommunication
security
vehicle-borneconsumption
industry
telecommunication
Attaching importance to R&D and enhancing core competencies with the focus on the principal businesses
2024 Action Plan for "Improving Quality, Increasing Efficiency and Rewarding"
In 2024, the Company will continue to focus on technological breakthroughs and innovations of high-speedwired communication chips. Concentrating on network data communication and vehicle communication,it will constantly meet customer needs for high-performance communication chips, and achieve leapfrogdevelopment through continuous accumulation, to yield good returns for shareholders and create beneficialvalue for the society. Particularly, several aspects are concerned as follows:
In 2024, the Company will seize the great opportunities of national strategic emerging industries and future industrial development to continu-ously integrate industrial resources, gradually extend to upper-layer network processing products, and focus on deploying ?elds of new energyvehicles, WIFI7, AI and Information technology application innovation. It has developed a range of chip products and solutions enrich the prod-uct layout, and continuously improve the performance of 100M, 1,000M, and 2.5 G products.
The competitiveness of an integrated circuit design company is mainlyreflected from its R&D capability and technical strength. As a profes-sional chip design company, the Company is committed to R&D andindustrialization of high-speed wired communication chips. Being con-stantly oriented towards independent R&D, it has established a completeindependent R&D system. At present, the Company has developed coretechnical capabilities in many aspects such as high-speed digital-analogcircuit design, design of communication algorithms, data exchange/de-velopment, SOC integration and software development.
In 2024, the Company will continue accumulate core competencies,make persis-tent independent innovations as follows and speed up transformation of achieve-ments. Besides, it will attach importance to the quality control capability, makeconstant breakthroughs in technologies, and maintain the leading position and corecompetencies within the industry:
Continuously integrate industrial resources around the seven major product lines to keepadvanced within the industry
Maintaining intensity of R&D investments andkeeping on making innovations to continuouslyimprove independent R&D capability
Product linesProgress as of 2023Key plans for 2024 and next three years
Attaching importance to R&D and enhancing core competencies with the focus on the principal businesses
In 2023, the Company cumulativelyinvested RMB 221.7506 million inR&D, accounting for 81.07% of thecurrent operating income; appliedfor 46 new invention patents, and atotal of 125 invention patents; ?led 5applications for 5 new utility models,and a total of 23 utility models.CNC Ethernet physicallayer chips
100M, 1,000M and 2.5G chips were put into massproduction.
Diversify 100M, 1,000M and 2.5G chips were; expectedto realize mass production and shipment of 10G chipsin 2026.CNC Ethernet switchchips
5-port, 4+2-port and 8-port chips were put intomass production and shipped.
Samples of 24-port switch chips are expected to beprepared at the end of 2024, and diversify the sin-gle-port gigabit/2.5G products.
CNC Ethernet networkcard chips
Gigabit chips were put into mass production.Supplement varieties of gigabit chipsVehicle-borne Ethernetphysical layer chips
100M chips were put into mass production; gi-
gabit chips were put into mass production and
shipped.
Put 100M and gigabit products into mass productionand ship themVehicle-borne Ethernetswitch chips
The first-generation vehicle-borne Ethernet
switch chips were under development.
The samples are expected to be made at the end of2025.
Vehicle-borne gatewaychips
The ?rst-generation vehicle-borne gateway chips
were under pre-development.
Make breakthroughs in technological outcomes.Vehicle-borne high speedvideo transmission chips
The first-generation vehicle-borne high speedvideo transmission chips were being developed.
The samples are expected to be prepared at the end of
2025.
50%Maintain relatively highR&D investments; it isexpected that the R&Dinvestments would ac-count for no less than50% of the income
Train
organize and carry outquality managementtraining on a regularbasis
IPD
standardize manage-ment through IPD pro-cess creation
at least 3 new productstyles will be addedevery year in the nextthree years
styles
IP platform construc-tion to improve thequality and speed ofresearch and develop-ment
IPplatform
and perform IT-basedconstruction of R&Dprocess to improve theefficiency and qualityof R&D management
IT
-based
2024 Action Plan for "Improving Quality, Increasing Efficiency and Rewarding"
In 2024, the Company will focus on developing its businesses abroad, actively expand its business landscape, and change from a domestictechnology-based startup company to a globalized business group when it continues to consolidate and deepen its domestic businesses.
Firmly focusing on its principal business, the Company will look for enterprises at different stag-es of development in multiple dimensions such as technology maturity, growth space, and indus-trial chain ecology by means of capital operations including but not limited to M&A to continuous-ly integrate resources, in hope of steadily promoting development of its principal business, givingfull play to the synergy between businesses and improve its overall competitiveness.
Strengthening brand building and marketing network construction, and activelydeveloping domestic and overseas markets
Promoting strategic M&A of resources around industriesand performing industrial-financial integration to enhancecompetitive advantages
In 2023,the Company's R&D personnel accountedfor 67.24%the Company had 4 core technicians
The Company constantly accelerates its strategic upgrades andsystem iterations. To give full play to the pioneering role of thestrategic pivot of the R&D system, enhance its core competencies,and lay a more solid foundation for development, the Company hasestablished the Institute of Advanced Technology and the CentralEngineering Department to conduct forward-looking technologyresearch and make breakthroughs in key technology capabilities.Besides, it has aggregated resources from different R&D modulesto establish a product R&D department to play pivotal roles instrengthening the overall strengths of each module such as pro-fessional technical capabilities, coordinated engagement capabil-ities, and product delivery capabilities, in order that the Companywill achieve new breakthroughs in development.
Attaching importance to the talent development strategy, and optimizing the incentivemechanism to maintain stability of the scientific research team
The core team members of the Company mostly had more than tenyears of practical experience. The Company led and built a technicalexpert team composed of several senior persons from the industry ofcommunication chips, who constituted the backbone force for the Com-pany's R&D. In reliance upon its profound understanding of Ethernet,related communication protocols and chip design technologies, theCompany has constructed mature and effective interdisciplinary collab-orative R&D and R&D talent training mechanisms, thus demonstratingits own unique core talent advantages and characteristics.The Company attaches great importance to the investments in and theincentives for the R&D Team. In 2024, the Company will continue adhereto the talent concept of "first-class talents, first-class performance,?rst-class returns". In March, a resolution was passed by the Board ofDirectors after deliberation that the Company would repurchase partialshares for implementing the equity incentive plan or employee stockownership plan. In the future, the Company intends to draft an equityincentive plan or employee stock ownership plan to some R&D person-nel in combination with the market situation and its business objectives,to make up the resultant force for joint construction and sharing amongthe Company, its shareholders and employees.
Accelerate capacity building of the marketing team.
Strengthen the professional quality training of the marketing department and enhance thecustomer service capability;Enhance outreachIncrease the coverage of brand promotion through online and of?ine communications andcarry out more pertinent brand promotion activities to expand brand in?uence;Accelerate market penetration of overseas customers
In 2022, the Company built a Singapore development center, and in 2023, its overseas rev-enues amounted to RMB 28.606 million. With a good momentum of growth, the Companyconstantly enhanced its business development abroad in multiple ways, and opened up itsBlue Ocean market in support of the Company's rapid development in businesses.
Technical maturity
Growing space
Industry chainecology
On the basis of reinforcing its independent R&D, in the future, the Company will further conduct cooperation with different institutions ofhigher learning and scienti?c research institutions, to facilitate talent training, technology innovations and knowledge sharing, cultivate youngblood of the industry, enhance in?uence of technology innovations.
In 2023, the Company jointlydeclared“Key Ethernet Multime-dia Adaptation and Long-rangeEnhancement Technologies, Inde-pendent Chip R&D and Application”
together with several organiza-tions.
In 2023, the Company and Nan-jing University of Posts and Tele-communications jointly establishedan Ethernet transmission chip R&Dcenter.
Overseas Incomein 2022-2023
202220231000
3000
(Unit: RMB)
2000
7.9788
million
28.606
million
Attaching importance to R&D and enhancing core competencies with the focus on the principal businessesAttaching importance to R&D and enhancing core competencies with the focus on the principal businesses
2024 Action Plan for "Improving Quality, Increasing Efficiency and Rewarding"
Optimizing?nancialmanagementto improvepro?tabilityand operationale?ciency
The Company's product lines are not merely limited to Ether-net physical layer chips, but are being extended to the upperlayer of the OSI model through continuous R&D. Besides, Eth-ernet chips have a wide range of application scenarios. In ad-dition to their domestic applications, their overseas applicationscenarios and customers are more extensive.
Enhancing customer diversification andincreasing asset profitability
In 2023,the Company’s sales to the top fivecustomers were approximately RMB
148.213 million
accounting for 54.18 % of the totalannual sales
In 2024, the Company will accelerate the R&D ofnew products and enhance its efforts for customerdevelopment at home and abroad, in an attempt toincrease the return on assets, including three as-pects:
Based on seven product lines, con-tinuing to diversify and optimizethe product mix by expanding newdownstream application scenariosso that the applications of the Com-pany's products related to data com-munication will gradually extendfrom homes to enterprises.
actively exploring new customers,increasing the data communicationmarket share, and focusing on themarket of automotive chips; activelydeploying the relevant markets ofdata centers, and accelerating cus-tomer diversification through imple-mentation of strategic cooperationprojects;
strengthening in-depth cooperationwith existing customers, satisfyingnew customer needs in a timelymanner while increasing the ex-isting market share, and create anexcellent supply chain ecospheretogether with customers;
Optimizing nancial management to improve protability and operational efciency
2024 Action Plan for "Improving Quality, Increasing Efficiency and Rewarding"
In 2024, the Company will continue to strictly abide by relevant laws andregulations, normative documents and the Management Measuresfor Corporate Fundraising, prudently use the raised funds, effectivelyensure smooth progression of the fundraising projects as planned, andpromote its principal business through the implementation of theseprojects, to realize expected returns of the projects, and enhance itsoverall pro?tability.
Prudently using raised funds and strengthen-ing the management of fundraising projectsThe Company attaches great importance to the reasonable planningand use of capital stock. In 2024, the Company will continue to strength-en cash management, improve the capital utilization ef?ciency throughthe following methods, and better realize fund preservation and appre-ciation:
Concerning management of self-owned funds, on the premise of fundsecurity and liquidity, it will invest part of its idle self-owned funds inbanks' wealth management products with certain returns. Regardingmanagement of raised funds, some idle raised funds will be properlyused for cash management to increase capital ef?ciency on the prem-ise of not affecting the construction of fundraising projects and the safe-ty of raised funds.
Reasonably planning capital stockand increasing capital utilization rate
In 2024, the Company will continue to strengthen optimization of the ?nancial management and improve its operational ef?ciency, including:
(1) promoting industry-?nance integration, strengthening informatization construction of ?nancial management, optimizing the forward-looking and
process management of planned expenditures, and providing more accurate ?nancial support for the management to make predictions;
(2) in terms of accounts receivable turnover ratio, enhancing the credit evaluation mechanism, optimizing credit policies, developing favorable collec-
tion procedures, doing a good job in the management of payment collection and accounts receivable for orders, and continuing to optimize itscash ?ow;
(3) for inventory turnover ratio, strengthening delicacy management of the supply chain, continuously improving inventory management, and achieving
quick market penetration in compliance with the sales model "focusing on distribution, supported by direct selling".
Optimizing financial management capability and improving internal operational efficiency
Financial management capability affects the Company's daily operational ef?ciency and overallbusiness performance. As of 2023, the Company's overall asset-liability ratio was 6.09%; the bal-ance of accounts receivable was RMB 59 million and the turnover rate of accounts receivable was
4.21; the inventory balance was RMB 131 million, and the inventory turnover was 1.01.
Optimizing nancial management to improve protability and operational efciencyOptimizing nancial management to improve protability and operational efciency
As of the end of 2023, the balance of theCompany’s monetary fund was approx-imately RMB 449.2977 million, and thebalance of held-for-trading financial as-sets was RMB 1,213.8994 million.
2024 Action Plan for "Improving Quality, Increasing Efficiency and Rewarding"
Optimizingcorporategovernance andenhancing theawareness of"the critical few"The Company attaches great importance to soundness andeffectiveness of the corporate governance structure. Atpresent, It has built a corporate governance structure thatcenters on the general meetings of shareholders, the Board ofDirectors, special committees, the Board of Supervisors andsenior management to provide organizational and institutionalguarantees for its efficient, stable and standardizedoperations.
In 2023, the Company convened and held 2 general meetings of shareholders, 10 meetingsof the Board of Directors, and 6 meetings of the Board of Supervisors. It disclosed 4 periodicreports, made 31 interim announcements, held 3 performance brie?ngs, conducted 256 in-vestor surveys, and left 112 SSE E-interactive messages, with a response rate of 100%.
In 2024, the Company will continue to optimize corporate governance, strengthen investor communication, and pro-tect the legitimate rights and interests of all shareholders. The speci?c priorities and plans are as follows:
In 2024, with ESG (environmental, social and governance) as the focus of management, the Company will promotethe ESG mechanism, where the Board of Directors is the main responsible body: The ESG working group is built un-der the Board of Directors. The Company will gradually build/improve the ESG management system, promote ESGpractice, and drive its long-term sustainable development.
Promote improvement of the internal governance mechanism
At present, the Company has implemented the reform requirements for the independent director system, and built anindependent director working group to ensure that independent directors can keep abreast of its development and opera-tions in a timely manner through monthly regular meetings of independent directors and irregular communications.In 2024, the Company will actively provide comprehensive and convenient conditions for independent directors to performtheir duties in different forms such as in-person meetings, ?eld inspections, and special reports on key issues, in order totruly protect the independent directors’ right to know and make it convenient for the independent directors to work on sitefor at least 15 days every year.
Implement reform requirements for independent directors
To strengthen the professionalism of directors, supervisors, senior executives and other relevant personnel, in 2023, theCompany organized and participated in 19 special training sessions of exchanges and more than 20 special training ses-sions of the associations of listed companies. Internally, it organized directors, supervisors and senior executives to takepart in 5 special training sessions. The training mainly covered information disclosure, compliance operations, investorrelationship management, major events, prevention of insider trading risks, and corporate management's public opinionsand PR responses, with an attendance rate of 100%.In 2024, the Company will continue to strengthen the awareness of "the critical few", depth and frequency of daily learningand training:
(1) Actively urge relevant personnel to participate in the regular training organized by regulatory authorities;
(2) Make full use of the resources of regulatory platforms such as the China Securities Regulatory Commission and
Shanghai Stock Exchange to organize relevant personnel to participate in online and of?ine training;
(3) Promptly send the Corporate Governance Monthly prepared by the Of?ce of the Board of Directors to relevant person-
nel to ensure that "the few critical" understand the latest laws and regulations, continuously increase the awareness of"improving quality, increasing ef?ciency and rewarding", and continuously better the operations management. The Cor-porate Governance Monthly includes multiple modules, including industry information, policies, systems, typical cases,corporate governance and market value analysis.
Increase the normative consciousness of directors, supervisors and senior executives
Optimizing corporate governance and enhancing the awareness of "the critical few"
2024 Action Plan for "Improving Quality, Increasing Efficiency and Rewarding"
Improveinformationdisclosure andbuild a multi-level investorcommunicationmechanismThe Company consistently attaches great importanceto information disclosure. It conscientiously performsits information disclosure obligations to truthfully,accurately, completely, timely and effectively discloseits regular reports, interim announcements andother material information in strict compliance withthe Listing Rules for Stocks on the Shanghai StockExchange Science and Technology Innovation Board, itsInformation Disclosure Affairs Management System andother relevant regulations.
The Company also attaches great importance to the investor relationship manage-ment, and develops multi-platform and multi-level investor communication chan-nels through statutory information disclosure, collective performance brie?ngs, itsof?cial website, Motorcomm's of?cial account, roadshows/reverse roadshows, etc.,to facilitate the investors' understanding of the Company.In 2024, the Company will continue to enhance the transparency of corporate infor-mation, adhere to the basic principles of conciseness, clarity and easiness-to-un-derstand, protect the rights and interests of minority shareholders, and optimizeinformation disclosure and investor relationship management as follows:
Further explore and diverse presentation and dissemination forms of the Company's information disclosure, ?exibly demon-strate the Company's operating conditions, R&D progress and product status to the investors in diverse manners, and highlightkey information points to reduce the investors' reading burden:
(1) Make more attempts to use pictures, texts and charts to explain the Company's operating conditions in periodic reports;
(2) Continue to do a good job in making periodic reports "comprehensible through one picture", and vividly present and interpret
the Company's performance and operating conditions;
(3) Present information in the form of PPT + videos through data charts and scenarios in performance brie?ngs and investor
research activities, to make the information more intuitive and comprehensible;
(4) Disclose corporate ESG reports, to present performance and ful?llment of social responsibilities to the investors in an all-
round manner.
Increase the readability of information disclosure
On the basis of the statutory information disclosure media, the Company will provide more platforms for communicating andexchanging with the investors through the of?cial website, of?cial accounts and so on. It will set up places for displaying its de-velopment histories, diversifying the channels for the investors to obtain information, effectively conveying its value, and buildingmarket con?dence:
(1) Use the of?cial account "Motorcomm" to disseminate information such as the Company's latest developments and cut-
ting-edge industry developments to the investors in a timely manner;
(2) Optimize the "Investor Relations" column on the Company's of?cial website, which will comprise of ?ve sub-columns: inves-
tor education, corporate announcements, stock information, investor contact, and investor relations, to protect the investors'right to know and maintain close communication with the investors.
Make the information more accessible
In 2024, the Company will arrange a range of investor relations activities to promote the establishment of long-term stable andtrustworthy relationships with the investors:
(1) Hold at least 3 performance brie?ngs through platforms such as the "SSE Roadshow Center";
(2) Organize and undertake no less than 300 investor research activities of different types, and disclose the research activity re-
cords in a timely manner;
(3) Promptly respond to the investors' questions on the SSE E-interactive Platform;
(4) Maintain adequate communications with the investors through investor hotline and public email, etc.
Strengthen investor communications
Enterprise development process display
Improve information disclosure and build a multi-level investor communication mechanism
2024 Action Plan for "Improving Quality, Increasing Efficiency and Rewarding"
The management andshareholders will shareburdens and bene?ts,to actively conveyvalue of the CompanyIn 2024, the Company will continue improving the business managementmodel, continuously optimize the remuneration and incentive system,further strengthen the benefit sharing mechanism between the man-agement and shareholders, and actively guide "few critical" to assumecorresponding responsibilities for promoting the Company's long-termstable development.
Others
The Company will continue to focus on the principal business, improve the operations, and earnestly ful?ll the respon-sibilities and obligations as a listed company through favourable operations management, standardized corporate gov-ernance, and positive investor returns, repay the investors for their trust, maintain the Company's good market image,and facilitate steady and healthy development of the capital market.The Company's planning, development strategy and other forward-looking statements involved in this Report are notfait accompli, and do not constitute a substantial commitment of the Company to investors. .The investors are herebyreminded of paying attention to related risks.In case of any discrepancy between the English translation and the original Chinese version, the latter shall prevail!
The remuneration of the Company's senior executives consists of basic pay and performance pay. In 2024, the Company will activelyfurther optimize the management remuneration mechanism and introduce a long-term incentive mechanism to promote deepintegration of the interests among the management and shareholders.Establish and improve the Company's long-term incentive and restraint mechanisms, to attract and retain outstanding talents.Effectively combine the interests of shareholders, the Company and the core team so that all parties will pay attention to long-termdevelopment of the Company and ensure realization of the Company's development strategy and business objectives.
Establish a normalized equity incentive mechanism, and maintain consistencyamong the interests of the management and the shareholders
The Company attaches great importance to paying appropriate returns on investment to shareholders and has drawn up the Share-holder Dividend and Return Plan for Three Years after Listing of the Company. On the premise of satisfying the conditions for cashdividends, the Company will give priority to pro?t distribution with cash dividends, maintain the continuity and stability of the pro?tdistribution policies, and take into account its long-term interests, the overall interests of all shareholders and its sustainable devel-opment.
Pay equal attention to the development of the Company and the interests ofshareholders, and give priority to distributing cash dividends to the investors
Within 3 years from the date of listing of the Company's stocks, when the closing price of the Company's stocks over 20 consecutivetrading days is lower than the Company's latest audited net asset per share, and the Company, its actual controller, persons acting inconcert, directors (excluding independent directors) and senior executives meet the conditions for repurchase or increase of holdingsunder laws, administrative regulations, normative documents, etc., the Company and relevant entities will implement relevant meas-ures to stabilize stock prices.In 2024, the Company will establish a stock price stabilization mechanism according to the capital market conditions, clarify oversigni?cant decline in short-term stock prices, fall below the issue price, or the net asset per share as an initiation condition, establishcorresponding trigger mechanism, and take corresponding stock price stabilization measures such as stock repurchase, to stabilizestock prices and enhance investor con?dence.
Actively deliver the Company's value, enhance investor confidence andpromote value return
The management and shareholders will share burdens and benets, to actively convey value of the CompanyThe management and shareholders will share burdens and benets, to actively convey value of the Company
Tel：021-50561032 Fax：021-50561703E-mail：ytwdz@motor-comm.comAdress：Building No. 18, Lane 388, Shengrong Road, Pudong New District, Shanghai Room 202, 78 Jinshan East Road, Suzhou Hi-tech Zone