GMTech Released its Third Quarter Report of 2018, Net Profit Continued to grow

On October 26, GMTech released its third quarter report of 2018. In the first half of the year, the revenue has reached 812 million yuan and its net profit has growth by 27.5% to 127 million yuan. Focusing on 5G and the Internet of Things (IoT), GMTech’s business optimization has continued to advance. The net profit margin has hit a three-year high, operational performance have remained stable, and the  admission rate and the reporting rate of Fuzhou Institute of Technology (FIT) have also reached a record high.

Gross margin increases and business optimization continues to advance

GMTech has been actively adjusting its business structure. Income from enterprises sector with low gross margin has decreased by 38.19%, and education and government businesses with high gross margin have increased by 21.03% and 17.08% respectively. The gross margin of the IoT related businesses has increased to 30.96% and the consolidated gross margin has increased to 37.83% (up by 6.36 pp compared to the last year).

The operational performance is stable, and yields have reached a new high of three years

In the third quarter of 2018, the three major expenditures have dropped significantly (-21.45% in sales expenses, -13.11% in management expenses and -13.28% in financial expenses). Net profit margin has risen to 14.19% of the current period from 5.90% in the third quarter of 2016. The net profit margin has reached a new high of nearly three years, and its profitability has continued to rise. The quick ratio has increased by 0.63 compared to last year, and the asset liability ratio has dropped to 31.24%.

Education sector continues to accelerate

In the third quarter, the income of education business has increased by 21.03% compared with the same period last year, and the gross margin is as high as 86.94%, increased by 2.9pp compared with the same period last year. In the academic year of 2018-2019, the enrollment of FIT has been successfully completed. A total of 2827 freshmen were enrolled, including 1800 undergraduates with an enrollment rate of 100% and 20 undergraduate majors in total. The acceptance rate and enrollment rate all have reached a record high. The strength and influence of the school have been highly recognized by the students and parents, and the quality of students has been greatly improved compared with previous years. 

FIT has been entitled as the "Fuzhou Entrepreneurship and Innovation Demonstration Center" by the Fuzhou Municipal Government, which will strongly promote the development of the collaborative innovation mode of "lecturer+ engineer+ technical shareholder" in FIT and the construction of the goal to establish a high-level applied technology university with distinct industrial characteristics. In The 8th China College Students Intelligent Design Competition, FIT won the first prize competed with 103 teams from Tsinghua University, Peking University and other universities.

Create a new niche in computing biology

The Guomai Biology has signed a cooperation agreement with the Quanzhou Municipal Government to jointly build the National Demonstration Center for Gene Technology Application, using computational biotechnology to construct a database for the genetic analysis of complex disease and building a health and medical artificial intelligence platform with data in Quanzhou area.

Awarded "The Headquarter-Level Cooperative Client of ICBC"

GMTech has signed the "head-to-head" cooperation agreement with ICIBC, and has become one of the 100 head-to-head cooperative clients of ICBC in China, highlighting the high recognition of ICBC for the operation status and future development of GMTech. The signing of the "Headquarter-to-Headquarter" cooperation agreement further strengthens and deepens the strategic partnership between the company and ICBC on the basis of mutual benefit and common development, which is conducive to promoting the financial cooperation in the industrial chain between the two sides, broadening financing channels, reducing financing costs, improving financing efficiency and serving the public, providing financial support to the company's IoT, 5G, education services and other business development, and thus having a positive role in the company's future business development.

GMTech increases holdings to show confidence in its future development

Based on the confidence of the company's future development prospects, Guomai Corp. plans to increase holdings of GMTech by 3%-6%.