Cogobuy Announces 2021 Annual Results

HONG KONG, March 31, 2022 — (PRNewswire) —  Cogobuy Group ("Cogobuy" or the "Company", stock code: 400.HK; with its subsidiaries (the "Group")), a technology services company focusing on serving the global chip industry and artificial intelligence ("AI") and internet of things ("IoT", together "AIoT") ecosystem, is pleased to announce its unaudited consolidated results for the Year ended December 31, 2021 ("2021" or the "Year").

Financial Highlights of the Full Year of 2021

The continued expansion of 5G development and application scenarios has caused demand for chips to surge, significantly increasing and supporting the Group's revenue. The chip business achieved a higher growth during the Year. The Company's net profit and revenue both increased significantly, with net profit growing faster than revenue. As of December 31, 2021, the Group's net profit was approximately RMB 412.4 million, a YoY increase of 120.0%; revenue was approximately RMB 9,452.4 million, a YoY increase of 52.8%; gross profit was approximately RMB 933.4 million, a YoY increase of 33.6%. The increase in gross profit margin was mainly attributable to the change in the Company's sales mix. The services provided by the Group cover areas with higher gross profit margins, including V2X, smart homes, AI surveillance and other markets. During the Year, the Group's profit attributable to equity shareholders of the Company was RMB 296.2 million, a significant YoY increase of 140.4%; the Company's cash and bank balances including short-term bank deposits and pledged deposits was RMB 519.3 million. The Group's bank loans were RMB 405.3 million. Basic common shares outstanding were 1,412,766,732, weighted average number of ordinary shares for the purpose of diluted earnings per share were 1,393,448,000.

Following technology's trend towards the creation of a 5G industry ecosystem and widespread digital transformation, the Group has formed a "Comtech and IngDan" platform to better serve the "Chips-Devices-Cloud" ecosystem along the entire AIoT industry chain, with the goal of supporting long term, sustainable income for the Group. "Comtech" focuses on the application design and distribution of IC chips to AIoT enterprises in China. Meanwhile, "IngDan" focuses on the R&D and sales of proprietary products, as well as customized application design, which include related support services for modules, devices, and cloud, to further develop AIoT module customized solutions. Through the two business platforms, the Group is creating a closed loop of "Chips-Devices-Cloud" ecosystem along the AIoT value chain, and provides services for the five main AIoT verticals: V2X, Smart Home, Robotics, Smart Manufacturing, and Smart Medical, so as to promote the comprehensive and sustainable development of the Group.

Strong Growth Momentum of the Chip Business

5G's large-scale and rapid development is further driving the comprehensive application of chips. In 2021 global chip sales volume was 1.15 trillion pieces, with a YoY increase of 26.2% to US$555.9 billion. The Semiconductor Industry Association (SIA) predicts global chip sales will increase by 8.8% in 2022.[1] Comtech's chip business also benefited directly and grew rapidly, with a significant YoY increase of 93.3% in revenue. "Comtech" maintains connection with over 50% of global high-end chip suppliers and many leading domestic chip companies, allowing it to serve over a hundred global high-end chip suppliers upstream, and ten thousands of AIoT hardware companies downstream, while also providing chip application development solutions and sales services. As 5G continues to empower digital transformation across many industries, the demand for chips will continue to drive rapid growth for the Group's chip business.

Participated in the building of OpenHarmony ecosystem and Launched the First OpenHarmony Product

During the Year, "Comtech" became a platinum-level donor to the OpenAtom Foundation, and committed to creating an independent and controllable OpenHarmony industrial ecosystem and industry standards with technology giants such as Huawei. OpenHarmony promotes information security and the independent and controllable core technology industries in China, and facilitates the standardization of AIoT and technology applications in various industries. OpenHarmony is a core operating system software incubated and operated by the OpenAtom Foundation, which is widely used in various smart devices and will become the mainstream standard for AIoT in the future. The Group actively participated in the building of OpenHarmony ecosystem, and continuously improved the Group's AIoT application technology services, leading to new opportunities for the Group's business.

During the Reporting Period, the Group successfully launched the first Smart BMS battery management system based on a combination of domestic chips and OpenHarmony solutions, which are mainly used in the smart battery products of new energy vehicles, electric motorcycles, and the industrial power system. As a result, the performance and safety of power batteries are now greatly improved and further diversified communication transmission functions and cloud real-time data management have been implemented, to further achieve lower power consumption and better intelligent applications. This first product laid the foundation for the integration of the Group's chips application and OpenHarmony solutions, helping the Group to develop the AIoT industry chain market.

Spin-off and Separate Listing of "Comtech" on A Shares

The Company obtained approval from The Hong Kong Stock Exchange Limited for the spin-off and separate listing of "Comtech" on A shares in Mainland China, which will further expand the Group's development in the domestic capital market. As the domestic chip market gains strong support from national policies, "Comtech" is preparing for the A share listing. After the completion of the Proposed A Share Listing, the Company will remain the ultimate controlling shareholder of "Comtech", and its financial results will still be consolidated into the Company, which will facilitate the sustainable growth of the Group's performance. Moreover, in order to give investors a clearer understanding of the main business of "Comtech" and "Cogobuy Group", the Company plans to change its name from "Cogobuy Group" to "Ingdan Inc.". The proposed name change of the Company has been approved by the Board and will be subject to shareholders' approval at the annual general meeting in June 2022.

Strengthening the Layout of iPaaS Services

The applications of 5G and AI are only becoming more extensive, and the demand for digital innovation and transformation in various industries is rising, which further promotes the accelerated development of "Chips-Devices-Cloud" with AIoT application technologies. The technology integration of iPaaS (Integration Platform as a Service) has become one of the most important parts of digital transformation. The iPaaS platform service automates business processes and makes it easier to share data across applications. According to IndustryARC Report, the global iPaaS market is expected to reach US$6.1 billion in 2025, representing a CAGR of 36.4% from 2020 to 2025.[2] The Group has long recognized the opportunities and provided iPaaS services such as technology integration solutions, marketing solutions and distribution services to core technology suppliers in the "Chips-Devices-Cloud" ecosystem along the AIoT value chain through the two business platforms of "Comtech" and "IngDan". These iPaaS services covers five main AIoT verticals: V2X, Smart Home, Robotics, Smart Manufacturing, and Smart Medical, helping the Group capture the blue ocean market of iPaaS in China.

The Group actively deployed in the five main AIoT verticals and continues to explore opportunities in the iPaaS market. During the Year, the Group worked with different AIoT suppliers to formulate various solutions for chips and technology integration, and successfully built high-end equipment in different fields. These include 4K video endoscopes and ultrasound diagnostic systems for high-end medical equipment in the smart medical field, intelligent security systems for smart city construction, and a WIFI-BT wireless solution that empowers the intelligent transformation of TV, achieving intelligence and high efficiency for various industries. By leveraging its technological expertise in integrating upstream and downstream industrial supply chain resources, the Group has empowered the implementation of more iPaaS projects, and laid a solid foundation to further expand the Group's domestic iPaaS service market, which brings strong growth momentum for the Group.

V2X is one of the most important application scenarios in the implementation of 5G and AIoT, and it has driven a significant increase in demand for automotive semiconductors. According to the report by Omdia, semiconductor chips used in EV are 2.9 times more prevalent than those of traditional internal combustion EVs, and the automotive semiconductor industry will grow at a CAGR of 12.3% by 2025. <

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