Guomai Technology (GMTech) released its annual report of 2018 on April 25thand first quarterly (Q1) report of 2019 on April 26th. The company made a yearly revenue of 982 million yuan (approximately 145 million US dollars) with a net profit of 130 million yuan (approximately 19 million US dollars) in 2018. Focusing on the 5G mobile technology and Internet of Things (IoT), the company has been optimizing its business structure, which has led to a growing gross margin and an increasing net profit margin. In Q1 2019, GMTech’s net profit increased by 1073% quarter on quarter, marking a turning point of the sales growth. In the future, the company will accelerate the planning of 5G mobile communications and push forward the application of IoT.
Focusing on the development of 5G and IoT
Guomai has restructured its scope of business, getting rid of business with low gross margin, as an effort to concentrate its human resources and financial and technological power to plan and develop the core business of 5G and IoT. After taking the above-mentioned measure, the firm has considerably enhanced its ability to generate profit. Its gross margin reached 58% in Q1 2019 and net profit increased by 1073% quarter on quarter. Its three expenses (expenses of management, sales and financial affairs) has decreased by 15.95% year on year, and the debt ratio has dropped to 28%, showing the Guomai’s stable financial condition and meticulous management capability.
Meanwhile, Fuzhou Institute of Technology’s (FIT) pattern of industry-education-research integration provides support for both Guomai’s strategic development and its own disciplinary development. The company has so far launched 20 high-tech research projects, a result of its strengthened research capacity. FIT has also advanced in the research path with a total of 64 laboratories for various purposes. The institute’s ongoing projects amount to 76, an increase of 29% year over year, and it has published 79 papers, an increase of 84% year on year.
The stable and strong research and development (R&D) ability has laid a solid foundation for Guomai’s coming 5G business. In November 2018, the firm built a 5G lab for mobile service providers and participated in the trial runs of 5G service, unveiling future network plans.
Financial Capital: A Driving Force for Future Growth
GMTech has earned the recognition and support of a number of state-owned financial institutions by its sound development and asset condition and stable debt structure. It has signed Agreement on Headquarter to Headquarter Cooperationwith Industrial and Commercial Bank of China (ICBC), making it one of the 100 major clients of ICBC headquarter. Guomai has also reached an agreement with Bank of Communication (BOCOM), which makes the company one of the 5 private enterprises that have strategic cooperation with BOCOM Fujian branch. Undoubtedly, Guomai’s efforts to strengthen its strategic partnership with financial institutions will help the firm obtain more funds with high efficiency and less cost, facilitating its future growth about which both the company itself and Guomai Group are confident. Until now, Guomai Group has increased its share of the company by 4.4%.
5G Plans: Breaking New Ground
With a high gross margin ratio, Network planning and design is at the front end of the network industry. Since the company acquired Guomai Design, the compound annual growth rate (CAGR) of its design department’s income has gone up to 19% in the past 10 years, and the CAGR of the net profit has risen to 39%. At present, Guomai’s planning and design services are available in many provinces, such as Fujian, Heilongjiang, and Guangdong. In the future, the company will accelerate the development of its 5G service by various means. It will, by controlling the risk and using opportunities presented by going public, seek excellent partners in different fields, especially in the field of network planning and design, to achieve a win-win situation and sustainable development. In doing so, Guomai’s deployment for the 5G industry chain will be bettered, its status in the market will be elevated, and its comprehensive competitiveness will be enhanced.
Industry-education Integration: A Push for IoT Development
FIT offers programs in the fields of IoT industry, cloud computing and big data. Combining its programs, talent-cultivation and research with Guomai’s strategy for IoT development, the institute has become Guomai’s research and innovation center for IoT application and talent cultivation and also its platform for innovation projects. Through deep integration with Guomai, FIT has given the company 3 edges over others:
1. An industrial innovation platform based on industry-education-research integration
Deeply rooted in the industry, Guomai guides FIT in fundamental researches, and helps to bring more technological innovation by nurturing the consistent research and development ability of FIT. It helps Guomai overcome the difficulty of making breakthroughs in multiple areas, and solved the problem of FIT’s lack of focus on fundamental researches.
2. A talent pool of “lecturers + engineers + shareholders with technical skills”
Guomai has been recruiting talented people that are able to industry leaders. These people, if hired, will have a good research environment provided by FIT and be informed of precise industry trends by the company, and they’ll also enjoy an effective incentive system. At the same time, they will need to design their courses using real and first hand examples in order to foster more people with practical skills. In this way, Guomai and FIT can truly attract, keep, fully motivate and cultivate talented people.
3. Effective research and application scenario
The application of science and technology cannot be done without putting people first. FIT, which provides services like IoT and healthcare with an experimental scenario of 10,000, would help the company build a fast and efficient feedback system to optimize current solutions, and yield a mature application model for the society to duplicate and use extensively.
For instance, in the beginning of 2019, Guomai initiated the “University-supported Warm Elderly Care with Artificial Intelligence (AI)” project, using AI to boost efficiency of nursing care and helping senior citizens live a more active life by encouraging youths to interact with them.