Yangtze River Business Daily News ● Yangtze River Business Daily reporter Huang Cong

With a loss of 28.1192 million yuan in the first half of the year alone, Focuslight began to cut salaries.

On September 27, Focuslight (688167. SH) announced that the company recently received an application for salary reduction from Liu Xingsheng, chairman and general manager, and some directors and managers (including foreigners). The announcement stressed that "they offered to take a pay cut".

The specific salary reduction is as follows: Liu Xingsheng's salary will be reduced by 30%; The remuneration of some management personnel (including foreigners) such as directors and deputy general managers Tian Ye has been reduced by 10% to 20%.

Some people in the industry said that when the company's efficiency encounters problems, the company's chairman can take the lead in reducing salaries to improve morale, but the collective salary reduction of senior executives, although the announcement says that it is "taking the initiative to reduce salaries", but it is difficult to say how much is really voluntary.

It should be noted that as of the end of the first half of 2024, Focuslight's monetary funds reached 1.098 billion yuan, and short-term and long-term borrowings were 7.5516 million yuan and 368 million yuan, respectively, and the company's cash on hand was not tight.

While the company's executives are cutting their salaries, Focuslight's shareholders are desperately reducing their holdings and cashing out.

Incomplete statistics from the Yangtze River Business Daily reporter found that since 2022, Focuslight Technology's shareholder SDIC Hi-Tech has frequently reduced its holdings, with a total of 577 million yuan in cash.

Are they all "offering salary cuts"?

Focuslight is principally engaged in the R&D, production and sales of high-power semiconductor laser components and raw materials ("photonic generation") and laser optical components ("controlled photonics") in the upstream of the photonics industry, and is currently expanding its photonic application modules, modules and subsystems business in the midstream of the photonics industry ("Providing Photonic Application Solutions").

In view of the global economic situation and the industry situation in which the company is located, considering that the company is in a state of loss in the first two quarters of 2024 due to mergers and acquisitions of overseas target assets and other reasons, in order to actively respond to market challenges, realize the integration of early mergers and acquisitions as soon as possible, optimize the cost structure, and enhance the company's competitiveness, they took the initiative to reduce salaries.

Focuslight said that this move is the responsibility of Chairman Liu Xingsheng, some directors and managers of the company and all employees of the company to jointly meet the current business challenges after the merger, and also demonstrates their firm confidence in the company's future development and their determination to advance and retreat together with the company.

According to the announcement, the target of Focuslight's salary cut involves Liu Xingsheng; Directors, deputy general managers Tian Ye and other important management personnel of the company (including foreigners).

The specific salary reduction is as follows: Liu Xingsheng's salary will be reduced by 30%; The remuneration of some management personnel (including foreigners) such as directors and deputy general managers Tian Ye has been reduced by 10% to 20%.

Focuslight Technology said that the salary adjustment will take effect from the next month after the disclosure of this announcement, and will continue until the company achieves two consecutive quarters of positive net profit attributable to shareholders of listed companies after deducting non-recurring gains and losses, and the maximum salary reduction period is 12 months.

In addition to salary adjustments, Focuslight introduced that the company will continue to promote measures to reduce costs and increase efficiency, increase market expansion and other measures to improve the company's operational efficiency and market competitiveness in an all-round way, and ultimately achieve a significant improvement in operating performance and profitability.

It should be pointed out that Liu Xingsheng's total pre-tax remuneration (hereinafter referred to as "salary") from the company in 2022 will be 763,400 yuan, and the salary in 2023 will be 1.1161 million yuan, an increase of 46.2%.

Therefore, according to the calculation of the salary in 2023, after Liu Xingsheng's salary cut of 30% this time, it will still reach 780,000 yuan in 2024, which is higher than the level in 2022.

In comparison, Tianye's salary in 2022 and 2023 will be 557,200 yuan and 680,600 yuan respectively, and the salary will reach 544,500 yuan after a 20% salary cut in 2024, which is lower than the level in 2022.

It should be mentioned that Liu Xingsheng is also the actual controller of Focuslight, with a current shareholding ratio of 13.27%.

In 2022 and 2023, Focuslight will pay a total of 65.87 million yuan in dividends, and Liu Xingsheng will receive about 8.7 million yuan. Tianye has only obtained 101,200 shares through equity incentives, with dividends of about 74,000 yuan in two years.

Some people in the industry said that when the company's efficiency encounters problems, the company's chairman takes the lead in reducing salaries to improve morale, but the collective salary reduction of senior executives, although the announcement says that it is "taking the initiative to reduce salaries", but it is difficult to say how much is really voluntary.

The stock price has been breaking for half a year

At present, is Focuslight's business under great pressure?

At present, Focuslight focuses on three major application directions: automotive applications, pan-semiconductor manufacturing processes, and medical and health care, and provides upstream core components and midstream photonic application solutions to different customers.

From 2020 to 2022, Focuslight's operating income was 360 million yuan, 476 million yuan and 552 million yuan respectively, an increase of 7.43%, 32.21% and 15.98% year-on-year respectively. The net profit was 34.87 million yuan, 67.7616 million yuan and 127 million yuan respectively, an increase of 143.35%, 94.33% and 87.56% year-on-year respectively.

However, in 2023, Focuslight's operating income will reach 561 million yuan, a year-on-year increase of 1.69%; The net profit reached 90.5461 million yuan, a year-on-year decrease of 28.76%, and the company fell into the dilemma of increasing revenue but not increasing profits.

Entering 2024, Focuslight Technology even fell into a loss, and the company achieved operating income of 311 million yuan in the first half of the year, a year-on-year increase of 29.85%; The net profit was -28.1192 million yuan, a year-on-year decrease of 206.71%.

Focuslight said that the company's revenue growth in the first half of the year was less than expected. Due to the continuous intensification of competition in the fiber laser market, the sales unit price of prefabricated gold-tin aluminum nitride substrate materials decreased significantly compared with the same period last year, and the company reduced shipments in the face of losses due to price pressure, and at the same time, with the continuous increase in the power of fiber laser pump source chips, a new generation of prefabricated gold-tin thin film aluminum nitride substrate materials are still in the process of introduction, due to the above two factors, the number of shipments of prefabricated gold-tin aluminum nitride substrate materials has declined sharply compared with the same period last year.

At the same time, Focuslight Technology introduced that although the company's laser optical components revenue increased, the increase was mainly due to the merger and acquisition of Switzerland Focuslight, and the overall laser optical components revenue did not meet expectations, mainly due to the double-digit growth in the shipment volume of fast-axis collimator (FAC) products, but due to continuous downward pressure on prices, revenue decreased year-on-year.

It should be noted that as of the end of the first half of 2024, Focuslight's monetary funds reached 1.098 billion yuan, and short-term and long-term borrowings were 7.5516 million yuan and 368 million yuan, respectively, and the company's cash on hand was not tight.

At a time when the company's executives are cutting salaries, Focuslight's shareholders are desperately reducing their holdings and cashing out.

On September 28, Focuslight Technology released an announcement on the results of shareholders' centralized bidding to reduce their shareholdings, showing that Zhang Tong, a shareholder of the company, reduced his holdings by 803,000 shares and cashed out 34.2105 million yuan, and the number of shares held after the reduction was 0, which was a clearance reduction.

Moreover, incomplete statistics from the Yangtze River Business Daily reporter found that since 2022, Focuslight Technology's shareholder SDIC Hi-Tech has frequently reduced its holdings, with a total of 577 million yuan in cash.

It is worth noting that in the secondary market, the issue price of Focuslight Technology was 78.69 yuan per share, and the opening price on the first day was 210 yuan per share.

As of the close of trading on September 27, Focuslight's share price was 48.04 yuan per share, down about 77% from the opening price and down about 39% from the issue price. And since April 2024, the company's stock price has been in a state of breakdown, which has lasted for about half a year.

Visual China Diagram

Editor-in-charge: ZB