Company Overview

Focus on the management of product assembly, quality control and various related supporting facilities

Since last year, the world has been ravaged by the COVID-19 epidemic, and various industries have been affected. The Company's first priority is to maintain the health and safety of employees. On the other hand, it seeks to uphold the commitments made to customers, delivery schedules and the achievement of operational goals. Within the same period of time, we also encountered the impact of the continuous appreciation of the New Taiwan dollar, which added additional difficulty to overall operations. In the face of this severe and changeable external environment, the Company was weighed down by policy tasks and the overall operating plan was challenged, but fortunately the Company has since its establishment been accumulating profound manufacturing experience. Every time our team is tested, it is always able to persist in overcoming the challenges encountered. What we rely on is the support of shareholders, as well as the hard work of all employees and supplier partners who have all come together to perform their duties and responsibilities. In the end, in this changing environment, both revenue and profitability exhibited bright performances, enabling us to attain outstanding operating results that live up to the high expectations of shareholders.

In 2020, the Company's notebook computer hinge shipments amounted to approximately 74,448,000 pcs, an increase of approximately 12.89% compared to the previous year, and still occupying the leading position in the world. In addition, shipments of LCD hinges increased by approximately 12.62% compared with the previous year, reaching 16,872,000 pcs. In 2020, notebook hinges accounted for approximately 26% of its main revenue; LCD hinge about 21%; and MIM (metal injection molding) products accounted for about 15%. The Company's consolidated revenue for 2020 was NT$15.233 billion, an increase of approximately 29% from NT$11.819 billion in the previous year. The consolidated gross profit margin was 24%, which was the same as the previous year. Operating net profit was 18%, a slight increase of approximately 2% compared to the previous year, net profit after tax was NT$1.673 billion, an increase of 29% from the previous year's NT$1.298 billion, and basic after-tax earnings per share was NT$9.05, an increase of 25% from NT$7.25 in the previous year.

R&D Overview

2020 was a year in which the Company leaped forward to another level in research and development. In addition to continuously expanding the development of new technologies and maintaining its leading position in technology, the Company is more actively engaged in the development of automation processes. integrating its various single-process automation equipment. Then, starting from the beginning of product R&D, the Company began considering how to upgrade the its original labor-intensive processes into fully automatic mechanized production processes, overcoming the limitations of technologies previously used, and striving to streamline work stations in process production. Meanwhile, in terms of product functions, the Company sought to lead the industry and gain the recognition of customers. Therefore, in 2020, the Company greatly increased its investment in various automation equipment in terms of both software and hardware. These commitments are made in hopes that through the innovations of company engineers, the labor-intensive production approach of the traditional manufacturing industry can be gradually phased out and ultimately replaced by lights-out, fully automated manufacturing.

The Company has achieved success in vertical integration. In addition to the assembly production process of general products, various individual parts also play an important role in reducing costs. Whether it is the MIM process or the precision machining of turning and milling machine products, the Company's focus is to reduce costs at each stage of research and development. The research and development of each process is also undertaken with automated production and management as the goal. By transitioning originally outsourced related processes to in-house production, various processes are coordinated with each other from the early stage of research and development so that the manufacturing cost for each part is lower than external procurement costs, enabling SHIN ZU SHING to become a leader in various precision processing industries.

Patent certification has always been an important part of the Company's R&D planning. Even as the company strives to maximize profits, it still upholds this important task. The Company spares no effort in investing in various novel research and actively requires all engineers to give full play to innovative ideas, and the products involved in the technology researched and developed are not limited to the industries currently in operation. These R&D efforts are made in hopes to open up this industrial chain to the outside, and extend hinge applications to various industries. Furthermore, application for domestic and foreign patent certification in a timely manner will support and facilitate the future expansion of the company's product chain, thereby expanding the scope of business operated and increasing profits.

Overview of 2021 Business Plan

Looking forward to the future, due to the impact of the COVID-19 epidemic, the economic development of various industries around the world has undergone subtle changes, and the demand for labor has become more intense. In view of these circumstances, the Company's management team will not only develop the business steadily, but also make more active efforts in the future to diversify business layout. By taking the initiative to develop automated manufacturing processes for existing operations, reduce manpower requirements, and utilize precision machining technologies for various parts, the Company seeks to reduce costs and increase profitability. The Company will also apply its research and development equipment and precision processing technology to diversify business layout, fully utilizing the capabilities of talents is has been nurturing over the years, locate the factors that affect cost the most, actively develop and manufacture various production or inspection equipment, or form strategic alliances to reduce procurement costs, thereby maximizing profits and expanding scope of business into new industries.

At the management level, it has established a sound accountant and board of directors structure, attached importance to the internal control system, and rationalized, systematized the Company's internal processes while enhancing transparency. From a people-oriented approach and following RBA norms, the Company continuously recruits outstanding talents, invests in R&D and innovation, creates a benign organizational culture through organizational reorganization and various trainings, strengthens employee functions and team leadership, execution and professionalism, and enhances core competitiveness of employees.