BIWIN Storage Technology Company LimitedFY 2024 "Enhance Quality, Boost Efficiency, and
Maximize Returns" Strategic Plan
To thoroughly enact the directives of the Central Economic Work Conferenceand the Central Financial Work Conference, actively heed the Political Bureau of theCentral Committee's call to invigorate the capital market and bolster investorconfidence, and to uphold an investor-centric philosophy, BIWIN Storage TechnologyCompany Limited (hereafter referred to as "the Company") has developed the"Enhance Quality, Boost Efficiency, and Maximize Returns" strategic plan for thefiscal year 2024. This plan was reviewed and approved at the 18th meeting of thethird session of the Board of Directors on April 29, 2024.The objective of this strategy is to drive the continual improvement of theCompany’s operations and governance standards, while proactively delivering returnsto investors. By further enhancing operational efficiency, strengthening marketcompetitiveness, and safeguarding investor interests, the Company aims to make apositive impact on the stability of the capital market and the high-quality growth ofthe economy. Key initiatives include:
I. Focusing on Operations to Enhance Core Competitiveness
Since its establishment, the Company has specialized in the storage sector,centering on the semiconductor memory industry chain. It has developed an integratedbusiness model encompassing both R&D and testing. The Company has continuallyfortified its core capabilities across several domains, including development ofstorage solutions, IC design of main control chips, wafer-level advanced packagingand testing, and development of storage chip testing equipment. In the field of storagesolutions, the Company has continuously built product competitiveness in terms ofperformance, power consumption, reliability, and capacity to meet the demands ofleading customers both domestically and internationally. In IC design, the Company’sinaugural master control chip, noted for its superior performance, has successfullycompleted post-fabrication testing and is now gearing up for mass production. Inadvanced packaging and testing, the Company’s wafer-level project has been
officially established in the Dongguan Songshan Lake High-Tech Zone. For storagechip testing equipment, the Company has independently developed a comprehensiverange of testing devices and algorithms, thereby creating a holistic chip testingsolution. The implementation of these projects and capabilities is set to significantlyenhance the Company’s ability to empower end-users and contribute to industrydevelopment.In 2024, the Company aims to capitalize on the upward trajectory of the industry,achieve significant market and performance breakthroughs, and enhance operationalperformance. With the mission "Storage Empowers Everything," we are dedicated tobecoming a world-class leader in storage solutions and advanced packaging andtesting.
1. Capitalizing on Industry Growth Cycles for Market and PerformanceBreakthroughsAs the storage industry rebounds in 2024, the Company will seize marketopportunities, aiming to penetrate top-tier customers by enhancing productcompetitiveness and expanding customer reach, thereby driving revenue growth in themobile, PC, and server sectors. We will also strategically allocate resources in thesmart wearables and industrial vehicle sectors to refine our product offerings andaspire to become a dominant market player. Concurrently, the Company will focus onoptimizing production delivery and increasing efficiency to foster performancegrowth.
2. Deepening the Industry Chain to Boost Profitability
In 2024, the Company plans to scale up the mass production of our proprietarymaster control chips, thereby improving product competitiveness. We will expand thescope and operational efficiency of our advanced packaging and testing facilities,leveraging economies of scale to enhance cost competitiveness. Additionally, we willincrease the deployment of our in-house chip testing equipment, reducing testing costsand generating new revenue streams.
3. Enhancing Our Consumer Brand Presence
In 2024, the Company will escalate efforts to build its consumer brand,consistently introducing innovative products that compete effectively in the industry,
thereby enhancing our market presence and increasing profitability.
4. Expanding Globally and Actively Going International
In 2024, the Company will pursue a proactive globalization strategy in itsoverseas operations, deepening collaborations with globally renowned clients such asHP, Acer, Google, Meta, Motorola, and HMD. By actively developing acomprehensive global sales, production, and delivery network, we aim to surpassregional OEM markets with superior product competitiveness and optimal localizedservice, continuously growing our global market share and enhancing brand influence.II. Enhancement of Technological Innovation CapabilitiesThe company will bolster R&D investments across several domains, includingstorage solutions, chip design, and advanced packaging and testing equipment, aimingto continuously foster new productive forces and achieve high-quality development.Over the years 2021-2023, the company’s R&D expenditures were 106.8710 millionYuan, 126.3967 million Yuan, and 249.9804 million Yuan, constituting 4.10%, 4.23%,and 6.96% of the operating income, respectively. As of December 31, 2023, thecompany has secured a total of 307 domestic and international patents and 27software copyrights, comprising 95 invention patents, 148 utility model patents, and64 design patents. In 2023 alone, the company filed for 84 new invention patents,received approval for 56, and was granted 1 new integrated circuit layout design.In 2024, the company will continue to escalate its R&D efforts, with R&Dexpenditures in the first quarter 97.7075 million Yuan, representing a year-over-yearincrease of 217.62%. In 2024, the company will push forward with the massproduction of its proprietary master control chips and focus on enhancing productcompetitiveness; it will promote the expansion and technological innovation of theHuizhou advanced memory packaging and testing base, further improving automationlevels to support the growth of the company's business and the continuousenhancement of product competitiveness; it will also expedite the construction of theDongguan wafer-level advanced packaging and testing project, striving for earlyproduction to strengthen the company's core competitiveness in the advancedpackaging and testing field. By implementing these cutting-edge technology projects,the company fulfills its mission of "Storage Empowers Everything."
III. Enhancing Financial Management to Boost Efficiency andEffectivenessSince its inception, the company has placed a high priority on rigorous financialmanagement as a foundation for enhancing operational efficiency and quality.In 2024, the company intends to intensify its financial management practices,with a particular focus on managing accounts receivable and inventory moreeffectively. This effort aims to enhance operational efficiency and strengthen theoversight of fund utilization. Additionally, the company will establish anencompassing risk management system to further solidify its comprehensive riskmanagement capabilities. These initiatives are designed to elevate the enterprise’score competitiveness, optimize operational management, and improve operationalquality and profitability. By doing so, the company seeks to navigate marketfluctuations and challenges, boost its operational performance, and thereby generateincreased value for its shareholders.
IV. Enhancing Corporate Governance for High-Quality DevelopmentThe company has consistently prioritized the robustness of its corporategovernance structure and the effectiveness of its internal controls. In 2023, it eagerlyembraced regulatory reforms, accelerating the adoption of institutional changes. Thisincluded revising and creating internal controls such as the "Independent DirectorsWork System," "Financial Assistance Provision Management System," "ExternalGuarantees Management System," "External Investment Management System," and"Insider Information Management System." These efforts are aimed at enhancing thestandardization of operations and the scientific rigor of decision-making processes,thereby protecting shareholder interests.For 2024, we are committed to further strengthening our internal controlframework, continuously refining our internal control management systems, andenhancing our risk early warning and response mechanisms to ensure robust andcompliant operations.
1. We will persist in refining our governance structure to guarantee that allshareholders can fully exercise their rights. This ensures that the Board of Directors,
including its specialized committees, the Supervisory Board, independent directors,and management team, fulfill their roles diligently to effectively protect the interestsof both the company and its minority shareholders.
2. The company plans to implement a dynamic regulatory tracking and feedbackmechanism to systematically gather and analyze the latest regulatory policies andlegal statutes from the capital markets. This information will be timely communicatedto major shareholders, directors, management, and relevant departments.
3. We will continue to reinforce communication with key stakeholders,monitoring their commitment to their responsibilities. We aim to strengthen theirsense of duty and commitment. Additionally, we will arrange no fewer than fourtraining sessions each year, organizing ongoing participation in training sessions heldby regulatory bodies such as the Stock Exchange and the Securities and FuturesCommission. By regularly updating these stakeholders with the latest regulatory andsupervisory developments, we enhance their understanding of relevant laws andprofessional knowledge pertaining to the capital markets. This initiative is designed toboost their self-regulation and compliance awareness, collectively advancing ourcompany’s standardized operations.
V. Strengthening Investor Communications
The Company upholds the core principles of openness and transparency and hasdeveloped a comprehensive and effective investor communication framework. Thisframework is designed to ensure that investors receive timely and accurateinformation about the Company's operational status and strategic direction. Werigorously adhere to financial reporting disclosure standards, consistently issuingdetailed, unbiased, and equitable annual, semi-annual, and quarterly reports. Thesereports comprehensively reflect the Company's operational performance and strategicinitiatives. Building upon this foundation, we have intensified our engagement withinvestors, hosting three earnings briefing sessions in 2023, where our managementteam provided a thorough analysis of the Company’s performance trends and growthtrajectories.
To provide investors with a more tangible and profound understanding of theCompany's technological prowess and competitive edge, we meticulously organizedfive site visits to the Huizhou Packaging and Testing Manufacturing Center in 2023,
welcoming over 60 investment institutions. Furthermore, attentive to investorinquiries, we established a dedicated service hotline, handling over 260 investor callsthroughout the year, addressing their queries and concerns regarding various companymatters. Moreover, we actively addressed over 70 questions posed by investors on ourinteractive platform, achieving comprehensive, multilevel real-time communication.
In the fiscal year 2024, the Company will stringently adhere to all applicablelaws, regulations, and directives from regulatory authorities. We will rigorouslyenforce our information disclosure policies to ensure that disclosures are accurate,complete, timely, and equitable. Through a multitude of channels, including publicannouncements, investor meetings, performance briefings, site visits, SSEe-interactions, phone, and email, the Company will hold no fewer than threeperformance briefings, timely arrange for senior executives to participate in thesebriefings, and discuss issues of widespread investor interest. In addition to traditionalcommunication channels, the Company will also more organize offline investorresearch activities, inviting directors, management, and relevant business heads to joininvestor events. Through both onsite and online interactions, we aim to establish amore transparent and close communication relationship with investors, effectivelysafeguarding their rights to information and oversight, conveying the Company's corevalues and future strategic positioning, and enhancing investor confidence.VI. Enhancing Investor ReturnsTo embody our "investor confidence" philosophy as a publicly listed companyand protect the interests of all shareholders, we are steadfast in our confidence in thecompany's future growth, recognition of our corporate value, and our commitment tofulfilling our social responsibilities. Thus, we have implemented a share repurchaseprogram and plan to cancel these repurchased shares. As of the announcement date,the company has cumulatively repurchased 703,464 shares through centralizedcompetitive bidding, representing 0.1635% of the total share capital, with fundstotaling RMB 19.9976803 million Yuan excluding expenses such as stamp duties andtrading commissions.In 2024, the company will consider long-term shareholder returns, proactivelyimplementing buybacks and dividends, judiciously utilizing methods such as sharerepurchases and cash dividends to share the fruits of development with investors, and
enhancing the sense of value investors receive in alignment with our operationalperformance.VII. Strengthening Alignment of Management and ShareholderInterestsThe 2024 Equity Incentive Plan sets forth performance evaluation requirementsthat include market capitalization management targets (with a target of achieving abusiness revenue of no less than RMB 5 billion Yuan in 2024, and the company's totalmarket capitalization reaching or exceeding RMB 20 billion Yuan on any consecutive20 trading days during the year), establishing a robust long-term incentive andaccountability framework that closely aligns the interests of our management and keyoperational teams with those of our shareholders. This ensures a shared commitmentto the company’s success, fostering a unity of interests and mutual benefits, therebyenhancing the company's overall value. Moving forward, we will continually refineour management compensation strategies to further solidify the balance ofresponsibilities, rights, and obligations among management members. This willenhance the operational targets' influence on performance, boosting the drive,initiative, and innovativeness of our management team while safeguarding theinterests of the company and all shareholders.The company remains committed to continuously evaluating and implementingspecific measures for "Enhance Quality, Boost Efficiency, and Maximize Returns."We strive to fulfill our duties as a listed company through strong performance, strictcorporate governance, and proactive investor returns, thereby repaying investor trustand maintaining the long-term stability of our stock price.
Notice is hereby given.
Board of Directors of BIWIN Storage Technology Company Limited
April 30, 2024