A Message From The Chairman

A Message From The Chairman

Tommy Tsai

Chairman & CEO of Senao Networks, Inc.

The COVID-19 in 2020 has changed everyone’s lifestyle. Streaming media such as work from home or video learning, have promoted the multiplication of information transmission and driven trends of Network Communication products and technology development growingly; Global Supply Chain has also been influenced by the China–United States trade war ceaselessly and has gradually evolved as Tech war. In this case, the new economic model also derives from correlated high tech industries, like information communication; moreover, it impacts the orbit of economic globalization; as 5G scales up through commercialization, the network communication technology continues to be advanced. In addition, it increases the demand for bandwidth and transmission speed.

Facing the challenge from the COVID-19 pandemic, market competition, and transformation of product technology, SNI speeds up the progress of transformation, engaged in horizontal expansion and vertical integration for all product lines; for horizontal expansion, SNI has developed an editable 100G Ethernet switch and network surveillance server, new generation of wireless transfer technology 802.11ax (Wi-Fi 6E) wireless Access Point (AP), cloud enterprise network system and equipment, as well as other new niche products, etc., and establishes high-speed networks and millimeter-wave laboratories for new application technology, while in vertical integration, SNI maintains integration of key components, including antennas, metal stamping parts, power supplies, etc. For the existing power supply, SNI targets to develop ones with features that performed better for POE switches. In 2020, power supplies were for sales as well; besides, the metal stamping part also contributes itself to the company revenue. SNI keeps expanding new markets for peripheral components, fining tune on product portfolios, and making every effort in added value rising for products. The revenue is anticipated to drive back and restore to the growth momentum that was supposed to be there.

SNI intends to express in-depth thanks and being grateful for the trust, support, and assistance rendered by all colleagues, customers, suppliers, investors, and other stakeholders. SNI successfully fulfilled and accomplished R&D processes and shipments from putting a wide range of advanced network equipment into mass production, the new niche product line, with profit maintained as well every year, regardless of the effect of the COVID-19 pandemic, rapidly changeable politics and economics overall, altered technologies and the tension of market competition became tighter in 2020. SNI's revenue in 2020 came up with NT$7,766,451,000, with a gross profit margin of 21.55%, net profit per share of 7.67, where the profit remains in growth if external factors are removed. SNI will keep accelerating the R&D process for new product line, expanding production capacity and moderating quality, scaling up cooperation with distributor channels, thus driving the momentum for shipments, optimizing performance in production and utilization to the utmost, and introducing digital transformation to enhance daily operational efficiency effectively, targeting to make a profit equivalent to the equity.

Looking into 2021, SNI is planning for implementation in four directions, that is, "Planning and materials preparation with key suppliers by strategies", "Strategy on optimizing product portfolio and maintaining vertical integration", "pulling out all the stops for Wi-Fi 6 products and Multi-G high-speed Network Switch Markets", and "Constant development of Data Center Switch Technology and Products". In the product R&D stage, SNI implements maturing the design cost and mass production; in the product production stage, SNI improves quality and yield rate on the production line. It is optimizing product portfolios by emphasizing products with high gross profit and active vertically integrated effect, intending to push the proportion of revenue on those product lines with higher gross profit margins forward a bit higher, and continuing the investment in antennas, power supplies, and critical components of stamping shells product through a strategy of vertical integration. In the 5G era, SNI drives the trend of building wireless and wired network products, remains the ground of targeting to invest in a specific technology, including Software Stack containing Edge Computing in compliance with OCP (Open Compute Project) architecture, developing network computing products that satisfy the needs of 5G mobile communication, proof-of-concept products of mmWave industry on the ARM architecture, and putting into efforts in the R&D process of new niche products for the higher added value of products, so as to face with the business opportunities behind economy rebound after the slowdown of the pandemic.

The COVID-19 pandemic continuously causes threats and risks to the overall operation of SNI remains in 2020. However, with the epidemic prevention plan and the relevant team developed and established, SNI has taken the whole situation under control well. A wide range of prevention and control measures were taken to protect the health and safety of all colleagues and the environment where they work. Besides, SNI had thoughtful cooperation on materials preparation according to developed strategies with upstream suppliers, provided customers with reasonable and appropriate countermeasures and solutions, assuring the impact on operation and production breaking off is to minimize, which improving the capability of responding to COVID-19 pandemic impacted operation, thereby convincing relevant stakeholders to a great extent, and providing reliable products and services ceaselessly.

As a corporate citizen, SNI is dedicated to shaping herself a socially friendly company, anticipating a positive effect driving from dimensions including economy, environment, and society. In the moment that the profit and performance keep growth, SNI has performed corporate social responsibilities specifically by being a participant in social welfare and community activities, keeping promotion of various projects, and the achievement came fruitfully, including the introduction of RBA code of conduct, being supportive for visually impaired masseur services, incentive programs of childbirth and childcare valued at NT$320,000, improved energy efficiency of DIP exhaust fan saving the electricity bills by NT$220,000 roughly, SNI received the Outstanding Green Purchase Enterprise Award from the Department of Environmental Protection of Taoyuan City in four consecutive years, Redes Zone’s 2020 Media Review 10/10 Award for its EnGenius ECW260 products, and WinMag’s 2020 Editor's Choice 9.1 Award and MKB Best Choice Award for its EnGenius Cloud products. It also donates Honghua Childcare House with 420kg of rice, also seeking solutions for the wireless network in the quarantine dormitory in Singapore, etc. SNI achievements around a wide range of projects makes it an honor to be approved by all circles in society and the Government; by promoting these projects, the company is able to improve the competency of its employees and gain valuable experience. SNI continues to work with stakeholders along with its employees, suppliers, and the community to promote various projects and implement corporate social responsibility, making a good contribution to good life permanently.

SNI will carry out CSR policies through its internal Corporate Social Responsibility Committee and promote CSR-related initiatives. Moreover, it will optimize the operation of the committee, propose the 2nd plan on the organization and duty division as four subordinated committees to raise the efficiency of communication among related business, and continuously promote corporate social responsibility and related affairs, as well as its “SNI Green Infinity Plan” in 2020. Thereafter SNI will link the Green Infinity Plan with the United Nation’s SDGs to facilitate the "2030 SNI Smart Inclusion Plan". The dedicated mindset of constant development from a wide range of aspects including Green economy innovation, cleaning production, society infusion, sustainable operation, risk management, and production accountability, introducing the way of thinking on Green and sustainability into SNI operational strategies and converting them to actions to be dedicated to the creation of a LOHAS enterprise, thereby fulfilling its responsibilities as a global citizen and creating sustainable value for SNI.

Chairman