联化科技股份有限公司 2019 年第一季度报告全文 联化科技股份有限公司 2019 年第一季度报告 二〇一九年四月 1 联化科技股份有限公司 2019 年第一季度报告全文 第一节 重要提示 公司董事会、监事会及董事、监事、高级管理人员保证季度报告内容的真 实、准确、完整，不存在虚假记载、误导性陈述或者重大遗漏，并承担个别和 连带的法律责任。 所有董事均已出席了审议本次季报的董事会会议。 公司负责人王萍、主管会计工作负责人陈飞彪及会计机构负责人(会计主管 人员)许明辉声明：保证季度报告中财务报表的真实、准确、完整。 2 联化科技股份有限公司 2019 年第一季度报告全文 会计政策变更的原因及会计差错更正的情况 第二节 公司基本情况 一、主要会计数据和财务指标 公司是否需追溯调整或重述以前年度会计数据 √ 是 □ 否 追溯调整或重述原因 会计政策变更 | --- | --- | --- | --- | --- | |-----------------------------------------------------|------------------|-------------------|------- ...

联化科技股份有限公司 2018 年度报告全文 联化科技股份有限公司 2018 年度报告 二〇一九年四月 1 联化科技股份有限公司 2018 年度报告全文 第一节 重要提示、目录和释义 公司董事会、监事会及董事、监事、高级管理人员保证年度报告内容的真 实、准确、完整，不存在虚假记载、误导性陈述或重大遗漏，并承担个别和连 带的法律责任。 公司负责人王萍、主管会计工作负责人陈飞彪及会计机构负责人(会计主管 人员)许明辉声明：保证年度报告中财务报告的真实、准确、完整。 所有董事均已出席了审议本报告的董事会会议。 本报告中涉及的未来发展计划等前瞻性陈述属于计划性事项，不构成公司 对投资者的实质性承诺，敬请投资者注意投资风险。 本公司请投资者认真阅读本年度报告全文，并特别注意本报告第四节"经营 情况讨论与分析"中"九、公司未来发展的展望"部分的阐述。 公司经本次董事会审议通过的利润分配预案为：以未来实施分配方案时股 权登记日的公司总股本为基数，向全体股东每10股派发现金红利0.20元（含税）， 送红股 0 股（含税），不以公积金转增股本。 2 联化科技股份有限公司 2018 年度报告全文 目录 | --- | |---- ...

Financial Performance - Operating revenue for the current period was ¥786,649,414.36, down 18.80% year-on-year[7] - Net profit attributable to shareholders was a loss of ¥22,112,720.82, a decrease of 1,103.62% compared to the same period last year[7] - Basic earnings per share were -¥0.0239, a decline of 1,019.23% year-on-year[7] - Operating revenue for the year-to-date was ¥2,606,352,892.78, a decrease of 10.31% compared to the same period last year[16] - Net cash flow from operating activities dropped by 69.79% to ¥156,748,754.89, mainly due to reduced cash receipts from sales[16] - The company experienced a 52.90% decrease in income tax expenses to ¥21,958,866.87, due to a reduction in total profit[16] - The net profit attributable to shareholders for 2018 is expected to range from ¥20,134.12 million to ¥12,080.47 million, reflecting a decrease of 40% to 90% compared to the previous year[20] Assets and Liabilities - Total assets decreased by 9.90% to ¥7,796,258,978.23 compared to the end of the previous year[7] - Cash and cash equivalents decreased by 50.32% to ¥569,946,731.64 due to no fundraising activities in the current period[15] - Accounts receivable decreased by 46.07% to ¥37,556,656.68, primarily due to reduced sales settled through notes[15] - Other non-current assets decreased by 92.98% to ¥36,068,516.33, primarily due to the recovery of collateral for loans to a UK subsidiary[15] - The company’s derivative financial liabilities rose by 1023.39% to ¥5,977,388.85, resulting from unrealized losses on hedging instruments[15] - The fair value of financial derivatives increased to ¥5,445,302.10, with a total ending amount of ¥5,977,388.85[22] Shareholder Information - The total number of ordinary shareholders at the end of the reporting period was 24,429[11] - The largest shareholder, Mu Jinxiang, holds 27.49% of the shares, totaling 254,535,853 shares[11] - The company reported no significant changes in its shareholder structure or any repurchase transactions during the reporting period[12] Non-Operating Income and Expenses - Non-operating income included government subsidies amounting to ¥8,486,672.23[8] - Financial expenses increased by 34.92% to -¥27,755,058.28, mainly due to increased foreign exchange gains[16] - The company reported a significant increase in other income by 344.24% to ¥18,638,946.14, primarily from relocation compensation received[16] Operational Challenges and Future Outlook - The main subsidiaries, Jiangsu Lianhua and Yancheng Lianhua, experienced a shutdown for nearly 3.5 months starting from the end of April 2018, impacting profits in Q2 and Q3[20] - The company anticipates a recovery in performance in Q4 2018, returning to normal levels[20] Governance and Compliance - There were no violations regarding external guarantees during the reporting period[23] - There were no non-operating fund occupations by controlling shareholders or related parties during the reporting period[24] - The company did not engage in entrusted financial management during the reporting period[25] - No research, communication, or interview activities were conducted during the reporting period[26] Compensation and Performance Measures - The company remains committed to fulfilling its promises regarding stock incentives and performance measures[19] - The company’s compensation system is linked to the execution of performance recovery measures[19]

Financial Performance - The company's operating revenue for the reporting period was ¥1,819,703,478.42, a decrease of 6.07% compared to the same period last year [19]. - The net profit attributable to shareholders was ¥9,145,422.83, representing a significant decline of 94.57% year-over-year [19]. - The net profit after deducting non-recurring gains and losses was ¥68,111,773.36, down 60.13% from the previous year [19]. - The net cash flow from operating activities was ¥96,227,096.14, a decrease of 62.07% compared to the same period last year [19]. - The total assets at the end of the reporting period were ¥7,777,803,834.79, reflecting a decline of 10.11% from the end of the previous year [19]. - The company's gross profit margin for the industrial sector was 34.71%, a decrease of 2.38% year-on-year [62]. - The company's liquidity ratios showed a significant decline, with the current ratio decreasing by 102.78% to 136.67% and the quick ratio decreasing by 78.14% to 76.11% compared to the end of the previous year [172]. - The EBITDA interest coverage ratio fell by 43.84% to 7.2, primarily due to production halts for environmental inspections, resulting in an 83.95% decrease in earnings before interest, taxes, depreciation, and amortization (EBITDA) [172]. - The company reported a total comprehensive income of CNY -8,904,268.54 for the first half of 2018, contrasting sharply with CNY 176,787,119.23 in the same period last year [192]. - Basic earnings per share fell to CNY 0.01 from CNY 0.20, reflecting the decline in net profit [192]. Investment and Cash Flow - The total cash inflow from investment activities was ¥452,480,177.86, significantly higher than ¥25,344,579.10 in the previous period [200]. - The net cash flow from financing activities was -¥700,031,846.58, contrasting with a positive cash flow of ¥1,245,999,828.80 in the previous period [200]. - The total cash and cash equivalents at the end of the period amounted to ¥653,899,144.08, down from ¥1,377,868,224.63 at the beginning of the period [200]. - Cash outflow for operating activities totaled ¥1,907,239,482.11, compared to ¥1,547,094,604.35 in the previous period, indicating increased operational expenses [199]. - The company received tax refunds totaling ¥95,046,248.72, compared to ¥27,924,808.67 in the previous period, showing improved tax recovery [199]. Business Operations and Strategy - The company operates in the fine chemical industry, focusing on the production of intermediates and active pharmaceutical ingredients [11]. - The company is involved in contract development and manufacturing, providing services for the production of pharmaceuticals and intermediates [11]. - The company has established strategic partnerships with several international pharmaceutical giants, enhancing its competitive position in the pharmaceutical sector [29]. - The company aims to enhance its value chain through integration, self-development, and mergers in the functional chemicals sector [30]. - The company has maintained a significant market position in the pesticide sector, with the top five companies controlling approximately 70% of the market [28]. - The company has developed a customized production model, collaborating with core clients on project development to enhance its market responsiveness [46]. Research and Development - Research and development investment increased by 22.66% year-on-year, totaling 98,256,996.72 yuan [58]. - As of June 2018, the company holds 51 domestic invention patents and has 34 invention patents pending, showcasing its commitment to innovation [41]. - The company has been recognized as a key high-tech enterprise under the National Torch Program and has received global supplier technology innovation awards in the pesticide industry [40]. Environmental Management - The report discusses the company's commitment to safety, health, and environmental management systems [10]. - The company has established wastewater treatment facilities with capacities of 1000t/d, 3500t/d, 2500t/d, 4000t/d, 1000t/d, and 500t/d across its subsidiaries [135]. - The total COD emissions from the company were 12.716 tons, with a concentration of 213.43 mg/L, well below the limit of 500 mg/L [131]. - The company has implemented RTO tail gas incineration systems and solid waste incineration facilities to manage emissions effectively [135]. - The company has established comprehensive pollution control measures, including noise control and waste management, to minimize environmental impact [135]. Risks and Challenges - The company faces significant risks from macroeconomic fluctuations, particularly as its overseas business revenue is substantial, with potential impacts from economic slowdowns in North America and Europe [89]. - Environmental protection regulations are becoming stricter, which may increase the company's expenditures on pollution control and could lead to penalties if compliance is not met [90]. - Currency exchange rate fluctuations pose a risk to the company's export-oriented business, and measures are in place to mitigate this through contractual agreements and financial derivatives [92]. - New product development carries risks, particularly in the pharmaceutical sector where some products are still in clinical research, potentially affecting market launch and expectations [94]. Shareholder Information - The total number of common shareholders at the end of the reporting period was 26,206 [152]. - The largest shareholder, Mu Jinxiang, holds 27.49% of the shares, totaling 254,535,853 shares, which are pledged [152]. - The company has not experienced any changes in its controlling shareholder or actual controller during the reporting period [154]. - The top ten shareholders do not have any related party relationships or concerted actions among them [153]. Corporate Governance - The board of directors has confirmed that all members attended the meeting to review the report [5]. - The company has not engaged in any related party transactions during the reporting period [116]. - There were no asset or equity acquisitions or sales during the reporting period [117]. - The company has approved external guarantees totaling CNY 5,000,000, with an actual guarantee amount of CNY 2,000,000 during the reporting period [125].

Financial Performance - The company's revenue for Q1 2018 was ¥992,607,753.03, representing an increase of 18.12% compared to ¥840,305,274.63 in the same period last year[9] - Net profit attributable to shareholders was ¥61,556,060.47, a decrease of 24.87% from ¥81,935,409.61 year-on-year[9] - Basic earnings per share decreased by 30.00% to ¥0.07 from ¥0.10 in the same period last year[9] - Operating revenue rose by 18.12% to ¥992,607,753.03, with industrial business increasing by 39.81% compared to the same period last year[16] - The company expects net profit attributable to shareholders for the first half of 2018 to range from ¥11,792.52 million to ¥16,846.45 million, reflecting a decrease of up to 30%[19] Cash Flow - The net cash flow from operating activities was ¥28,427,063.04, down 71.52% from ¥99,807,075.50 in the previous year[9] - Net cash flow from operating activities decreased by 71.52% to ¥28,427,063.04, primarily due to increased cash payments for goods and services[17] - Investment cash flow net amount was -¥159,206,734.19, a decrease of 142.63% due to increased payments for fixed assets and intangible assets[17] Assets and Liabilities - Total assets at the end of the reporting period were ¥8,440,058,283.56, a decrease of 2.46% from ¥8,652,579,701.77 at the end of the previous year[9] - The net assets attributable to shareholders increased by 1.42% to ¥5,689,141,826.64 from ¥5,609,728,805.63 at the end of the previous year[9] - Short-term loans increased by 1532.55% to ¥309,176,444.72 due to an increase in borrowings during the reporting period[16] - The company reported a significant increase in financial derivative liabilities by 497.21% to ¥3,177,673.79, attributed to foreign exchange fluctuations[16] - The company reported a 79.07% decrease in interest payable to ¥9,579,119.93, primarily due to the payment of interest on debts from the previous year[16] Shareholder Information - The total number of ordinary shareholders at the end of the reporting period was 27,173[12] - The largest shareholder, Mu Jinxiang, holds 27.49% of the shares, amounting to 254,535,853 shares, with some shares pledged[12] Other Income and Expenses - The company reported non-operating income and expenses totaling -¥744,401.09 for the period[10] - Other comprehensive income increased by 673.67% to ¥1,967,922.71, influenced by exchange rate fluctuations affecting foreign currency translation differences[16] - The company received tax refunds of ¥45,222,001.54, an increase of 127.95% due to higher export tax rebates during the reporting period[16] Commitments - The company has no overdue commitments from controlling shareholders or related parties during the reporting period[18]

Financial Performance - The company reported significant growth in revenue, with a year-on-year increase of 15% in 2017[16]. - The company's operating revenue for 2017 was ¥4,107,388,628.81, representing a 32.53% increase compared to ¥3,099,309,742.81 in 2016[21]. - The net profit attributable to shareholders for 2017 was ¥201,341,173.02, a decrease of 23.69% from ¥263,852,074.01 in 2016[21]. - The gross profit margin for 2017 was reported at 35%, reflecting improved operational efficiency[16]. - The company anticipates a revenue growth target of 10-15% for the upcoming fiscal year[16]. - The total profit amounted to CNY 255.84 million, a decrease of 17.54% year-on-year, and the net profit attributable to shareholders was CNY 201.34 million, down 23.69%[57]. - The company reported a basic earnings per share of ¥0.22 for 2017, down 31.25% from ¥0.32 in 2016[21]. - The weighted average return on equity for 2017 was 3.68%, a decrease of 2.57% from 6.25% in 2016[21]. Dividend Policy - The company plans to distribute a cash dividend of 1.00 RMB per 10 shares to all shareholders, with no bonus shares issued[8]. - The cash dividend payout ratio for 2017 was 45.99%, compared to 35.09% in 2016 and 15.70% in 2015, indicating an increasing trend in profit distribution[157]. - The total distributable profit for the company was RMB 1,577,256,443.03, with cash dividends accounting for 100% of the profit distribution[157]. - The company has maintained a consistent cash dividend policy that aligns with its articles of association and shareholder resolutions[153]. Market and Business Strategy - Future development plans include expanding into new markets and enhancing product offerings through research and development initiatives[8]. - The company aims to increase its production capacity by 20% in the next fiscal year to meet rising demand[16]. - A focus on developing new chemical intermediates is expected to drive revenue growth in the pharmaceutical sector[16]. - The company is exploring strategic acquisitions to enhance its market position and expand its product portfolio[16]. - The company aims to expand its market presence by leveraging its technological innovation and quality management capabilities in the pesticide sector[34]. - The company aims to enhance its value chain through integration, self-development, and mergers, focusing on the mid-to-late stages of the industry chain to increase the technical content and difficulty of its offerings[37]. Research and Development - The company’s R&D investment for 2017 was ¥199,924,095.03, representing a 24.10% increase from ¥161,104,064.99 in 2016[85]. - The company has made significant advancements in various technical fields, including catalytic oxidation and microchannel reaction technology, enhancing its core technological capabilities[45]. - The company will focus on enhancing R&D capabilities in the agricultural sector, leveraging its established advantages and integrating advanced technologies[130]. Sustainability and Environmental Practices - The company is committed to improving its sustainability practices, aiming for a 30% reduction in carbon emissions by 2025[16]. - The company is committed to sustainable development, focusing on green chemistry and circular economy initiatives to maintain its leading position in the fine chemicals industry[125]. - The company has implemented measures to ensure that all emissions are within the regulatory limits, demonstrating commitment to environmental sustainability[200]. Acquisitions and Partnerships - The company has established strategic partnerships with several international pharmaceutical giants, enhancing its competitive position in the market[35]. - The company successfully completed its first overseas acquisition, which is considered a strategic key event for the pesticide division[56]. - The acquisition of Fine Industries Limited is strategically significant for the company, facilitating new product development and enhancing customer relationships[131]. Operational Efficiency - The company is committed to continuous investment in engineering equipment upgrades to maintain its competitive edge and improve production efficiency and environmental management[48]. - The company has established a stable partnership model in the pharmaceutical sector, focusing on providing cost-competitive cGMP production services[43]. - The company has focused on talent development, attracting top talent from leading universities and experienced management personnel[65]. Risk Management - The company faces significant risks from macroeconomic fluctuations, particularly as its overseas business revenue is substantial, which could adversely affect profitability if economic growth slows in key regions like North America and Europe[139]. - The company is exposed to foreign exchange risks due to its export-oriented business and increasing foreign currency transactions, which could significantly impact operating performance[146]. - The company acknowledges the risk of new product development, particularly in the pharmaceutical sector, where new products may not meet market expectations due to being in clinical research stages[145]. Financial Management - The company raised nearly CNY 1.1 billion through a private placement to support core business development and enhance capital strength[66]. - The company’s long-term borrowings increased to ¥932,187,282.99, attributed to financing for the acquisition of a UK subsidiary[93]. - The company has not experienced any changes in the use of raised funds, with a total of ¥109.64 million raised and ¥36.63 million utilized by the end of the reporting period[107].

Financial Performance - Operating revenue for the period reached CNY 968,756,624.62, representing an 87.63% increase year-on-year[9] - Net profit attributable to shareholders decreased by 132.53% to CNY 2,203,295.02 compared to the same period last year[9] - The company reported a net profit of CNY 170,667,768.41 for the year-to-date, a decrease of 28.68% compared to the same period last year[9] - The company expects a net profit attributable to shareholders to decrease by 30.00% to 0.00% for the year 2017, influenced by increased equity incentive costs[21] Assets and Liabilities - Total assets increased by 40.21% to CNY 8,414,373,743.21 compared to the end of the previous year[9] - Cash and cash equivalents increased by 293.02% to ¥1,680,563,017.49 due to increased fundraising[17] - The total assets increased significantly, with accounts receivable rising by 148.72% to ¥86,636,578.94 due to clients switching to bill settlements[17] - Short-term borrowings decreased by 76.22% to ¥30,903,604.33 as a result of loan repayments during the reporting period[17] Cash Flow - The net cash flow from operating activities increased by 121.91% to CNY 265,154,362.54[9] - The net cash flow from investing activities was -¥663,368,745.92, primarily due to acquisitions of subsidiaries in the UK and Hubei[19] Shareholder Information - The number of ordinary shareholders at the end of the reporting period was 30,846[13] - The largest shareholder, Mu Jinxiang, holds 27.49% of the shares, totaling 254,535,853 shares[13] - The company did not engage in any repurchase transactions during the reporting period[14] Earnings and Costs - Basic earnings per share fell by 126.00% to CNY 0.0026[9] - The weighted average return on net assets was 0.06%, down by 2.47% from the previous year[9] - The company reported a 30.66% increase in operating costs, totaling ¥2,000,312,920.79, driven by higher sales revenue[17] Other Financial Changes - Financial expenses showed a significant change, with a gain of -164.70% due to exchange rate fluctuations resulting in substantial foreign exchange gains[19] - The goodwill increased significantly by 10,720.67% to ¥638,189,323.71 due to the acquisition of a UK subsidiary[17] - The company raised capital through a new share issuance, increasing capital reserves by 131.17% to ¥2,130,157,342.08[17]

Financial Performance - The company reported a significant increase in revenue, achieving a total of 1.5 billion RMB for the first half of 2017, representing a year-on-year growth of 20%[15]. - The company's revenue for the reporting period was ¥1,937,333,564.43, representing a 9.32% increase compared to ¥1,772,235,828.31 in the same period last year[20]. - Total operating revenue for the first half of 2017 was CNY 1,937,333,564.43, an increase of 9.3% compared to CNY 1,772,235,828.31 in the same period of 2016[199]. - The industrial business revenue reached CNY 1,674,603,500.00, up 10.95% compared to the same period last year[62]. - The company achieved a total revenue of CNY 1,937,333,564.43 in the first half of 2017, representing a year-on-year increase of 9.32%[62]. - Net profit attributable to shareholders decreased by 31.54% to ¥168,464,473.39 from ¥246,069,664.31 year-on-year[20]. - Net profit for the first half of 2017 was CNY 176,559,013.14, a decrease of 29.3% from CNY 249,793,494.79 in the previous year[199]. - The net profit attributable to the parent company was CNY 168,464,473.39, down from CNY 246,069,664.31, representing a decline of 31.5%[200]. - Total profit decreased by 27.70% to CNY 21,285,820.00, while the net profit attributable to shareholders fell by 31.54% to CNY 16,846,450.00[62]. - The company reported a total comprehensive income of CNY 176,787,119.23 for the first half of 2017, compared to CNY 249,793,494.79 in the previous year[200]. Investment and R&D - The company plans to invest 200 million RMB in R&D for new product development, focusing on innovative chemical solutions and technologies[15]. - Research and development investment increased by 24.84% to CNY 80,102,175.73, reflecting the company's commitment to innovation[62]. - The company is actively pursuing a strategy of enhancing customer cooperation and expanding market presence, particularly in the agricultural and pharmaceutical sectors[57]. - The company has completed the acquisition of a leading European custom chemical service provider, enhancing its international development strategy[59]. - The company has committed to invest 56,000,000 CNY in the TMEDA project, with 28.05% of the project completed[85]. Market Expansion and Strategy - User data showed an increase in active clients by 15%, reaching a total of 1,200 clients, which reflects the company's expanding market presence[15]. - The company has initiated a market expansion strategy targeting Southeast Asia, aiming to capture a 10% market share by the end of 2018[15]. - The company is exploring potential acquisitions to enhance its product portfolio and market reach, with a budget of 300 million RMB allocated for this purpose[15]. - The company aims to enhance its value chain in the functional chemicals sector through integration, self-development, and potential mergers[31]. - The company has established strategic partnerships with major international pharmaceutical companies, enhancing its competitive position in the market[30]. Operational Efficiency - The gross profit margin improved to 35%, up from 30% in the same period last year, indicating better cost management and pricing strategies[15]. - The company has implemented new operational strategies to improve efficiency, resulting in a 10% reduction in production costs[15]. - The company has established a comprehensive international management system, integrating safety, quality, environmental protection, and project management[49]. - The company has made significant investments in engineering equipment upgrades, improving solvent recovery efficiency and environmental management[43]. Financial Position and Assets - Total assets increased by 43.39% to ¥8,604,941,131.13 from ¥6,001,074,836.48 at the end of the previous year[20]. - The net assets attributable to shareholders rose by 27.25% to ¥5,535,155,233.21 from ¥4,349,775,312.06 at the end of the previous year[20]. - The company reported a significant increase in cash and cash equivalents, totaling CNY 1,839,945,951.38, which is 21.38% of total assets, up from 6.63% the previous year[72]. - Current assets reached CNY 3,836,777,828.97, a significant increase from CNY 2,116,947,530.22, marking a growth of about 81.0%[190]. - Total liabilities rose to CNY 3,017,433,827.60, up from CNY 1,607,041,993.85, indicating an increase of around 87.7%[191]. Risks and Challenges - The company faces risks related to regulatory changes in the chemical industry, and has outlined measures to mitigate these risks in its operational strategy[7]. - The company faces risks from macroeconomic fluctuations, particularly in overseas markets, which could adversely affect profitability[95]. - The company is exposed to safety production risks due to the nature of its chemical products and has established a dedicated safety management department[99]. - The company acknowledges the risk of new product development, particularly in the pharmaceutical sector, where some products are still in clinical research stages[100]. - The company is implementing measures to mitigate foreign exchange risks due to its export-oriented business and increasing foreign currency transactions[102]. Shareholder and Stock Information - The company has not distributed cash dividends or bonus shares for the half-year period[107]. - The company has a total of 16.227 million restricted stock options granted under its 2014 incentive plan, accounting for 2.028% of the total share capital, with a grant price of 7.17 yuan per share[115]. - The company has completed the repurchase and cancellation of 105,000 restricted stocks due to the departure of three incentive targets[116]. - Major shareholder Mu Jinxiang holds 27.49% of the shares, totaling 254,535,853 shares, with 127,267,926 shares under lock-up[159]. - The company’s management team underwent several changes, including the appointment of Andreas Winterfeldt as president on June 7, 2017[168].

Financial Performance - The company's operating revenue for Q1 2017 was ¥840,305,274.63, a decrease of 8.55% compared to ¥918,827,569.15 in the same period last year[9] - The net profit attributable to shareholders was ¥81,935,409.61, down 22.73% from ¥106,035,620.81 year-on-year[9] - Basic earnings per share were ¥0.10, a decline of 23.08% from ¥0.13 in the same period last year[9] - Operating revenue decreased by 8.55% to ¥840,305,274.63, with industrial business revenue declining by 3.55%[15] - The company expects net profit attributable to shareholders for the first half of 2017 to range from ¥17,224.88 million to ¥24,606.97 million, reflecting a decrease of up to 30% compared to the previous year[18] - The company anticipates that the main business will improve in the first half of 2017, with a net profit change (excluding non-recurring gains and losses) expected to range from 0% to 30%[18] Cash Flow - The net cash flow from operating activities decreased by 54.71%, amounting to ¥99,807,075.50 compared to ¥220,352,809.67 in the previous year[9] - Net cash flow from operating activities fell by 54.71% to ¥99,807,075.50, mainly due to reduced cash payments for goods and services compared to the previous year[15] - Net cash flow from investing activities worsened by 60.24% to -¥65,618,089.65, driven by increased payments for fixed assets and intangible assets[15] - Net cash flow from financing activities improved significantly to ¥1,259,838,966.84, a change of -431.23% due to funds raised during the reporting period[15] Assets and Liabilities - Total assets increased by 22.16% to ¥7,330,632,949.96 from ¥6,001,074,836.48 at the end of the previous year[9] - Net assets attributable to shareholders rose by 27.14% to ¥5,530,432,404.36 from ¥4,349,775,312.06 at the end of the previous year[9] - Cash and cash equivalents increased by 302.89% to ¥1,722,758,300.98 due to funds raised during the reporting period[15] - Accounts receivable rose by 31.12% to ¥45,673,090.97, attributed to an increase in received notes compared to the previous year[15] - Other receivables surged by 193.11% to ¥77,655,735.64, primarily due to guarantee payments related to corporate acquisitions[15] - Short-term borrowings increased by 164.07% to ¥343,177,068.00, reflecting a rise in borrowing during the reporting period[15] Shareholder Information - The total number of ordinary shareholders at the end of the reporting period was 19,396[12] - The largest shareholder, Mu Jinxiang, holds 28.13% of the shares, totaling 254,535,853 shares[12] Return on Investment - The weighted average return on net assets was 1.60%, down from 2.53% in the previous year[9] - The company reported non-operating income and expenses totaling -¥406,441.61 for the period[10]

Financial Performance - The company's operating revenue for 2016 was approximately ¥3.10 billion, a decrease of 22.67% compared to ¥4.01 billion in 2015[26]. - The net profit attributable to shareholders for 2016 was approximately ¥263.85 million, down 58.65% from ¥638.07 million in 2015[26]. - The net profit after deducting non-recurring gains and losses was approximately ¥215.11 million, a decline of 66.30% compared to ¥638.34 million in 2015[26]. - The net cash flow from operating activities was approximately ¥547.80 million, a decrease of 15.01% from ¥644.58 million in 2015[26]. - The basic earnings per share for 2016 was ¥0.32, down 58.44% from ¥0.77 in 2015[26]. - The total assets at the end of 2016 were approximately ¥6.00 billion, a decrease of 5.42% from ¥6.35 billion at the end of 2015[26]. - The net assets attributable to shareholders increased by 5.10% to approximately ¥4.35 billion at the end of 2016, compared to ¥4.14 billion at the end of 2015[26]. - The weighted average return on net assets for 2016 was 6.25%, down 10.36% from 16.61% in 2015[26]. - The total revenue for 2016 was ¥3,099,309,742.81, a decrease of 22.67% compared to ¥4,007,786,872.33 in 2015[85]. - The main business revenue decreased by 23.78% to ¥3,041,689,294.28, accounting for 98.14% of total revenue[85]. - The pharmaceutical segment revenue increased by 6.59% to ¥505,031,033.21, representing 16.29% of main business revenue[85]. - The pesticide segment revenue decreased by 29.55% to ¥1,941,935,440.07, accounting for 62.66% of main business revenue[85]. - The gross profit margin for the main business was 37.65%, down from 42.54% in 2015, reflecting a decrease of 4.89%[89]. Dividend Policy - The company reported a cash dividend of 1.00 yuan per 10 shares (including tax) to all shareholders, with no bonus shares issued[15]. - The total cash dividend for 2016 is CNY 90,477,765.60, which represents 100% of the total distributable profit of CNY 1,605,767,886.24[150]. - The cash dividend per 10 shares is CNY 1.00 (including tax)[150]. - The net profit attributable to ordinary shareholders for 2016 is CNY 263,852,074.01, with a dividend payout ratio of 34.29%[150]. - In 2015, the cash dividend was CNY 100,129,358.64, with a net profit of CNY 638,072,408.23 and a payout ratio of 15.69%[150]. - The company has not proposed a cash dividend distribution plan for the current reporting period despite having positive distributable profits[150]. - The company is in a growth phase and has significant capital expenditure plans, with a minimum cash dividend ratio of 20% required during profit distribution[150]. Market and Competitive Position - The company faces significant macroeconomic risks, particularly from potential slowdowns in North America and Europe, which could adversely affect profitability[8]. - The company has a strong competitive position in the domestic market, especially in custom production, but faces risks from increased competition and potential market share loss[9]. - The company’s overseas business revenue is significant, making it vulnerable to international market fluctuations[9]. - The pesticide sector, where the company operates, is highly concentrated, with the top 10 companies holding approximately 80% of the market share[39]. - The pharmaceutical industry is expected to see increased mergers and acquisitions, with a focus on R&D investment and outsourcing services[40]. - The functional chemicals market in China is projected to become the largest globally by 2025, capturing 35% of the market share[44]. - The company has maintained a strong position in the pesticide custom processing sector, becoming a preferred partner for major agricultural clients[45]. - The company’s core strategy emphasizes differentiation and alliances to strengthen its competitive edge in the chemical and technology solutions market[50]. - The company has established strategic partnerships with several international pharmaceutical giants, enhancing its market position in the pharmaceutical CDMO sector[47]. Innovation and R&D - The company is focused on continuous innovation in product development, although there are risks associated with new pharmaceutical products still in clinical research[13]. - The company has received multiple recognitions as a high-tech enterprise and has established a multi-level R&D platform, enhancing its technological innovation capabilities[57]. - As of December 2016, the company holds 44 domestic invention patents and 30 utility model patents, with additional patents pending, showcasing its commitment to innovation[59]. - The company has made significant investments in engineering equipment upgrades, improving solvent recovery efficiency and production management through advanced technologies[61]. - The company has developed nearly 100 projects in 2016, with over ten entering the pilot testing stage, particularly in the pesticide R&D sector[76]. - The company has made significant progress in the development of new products in the functional chemicals sector, leveraging its existing technical advantages[77]. - The company will continue to increase R&D investment, focusing on integrating technology platforms and enhancing collaboration with partners to optimize production processes and reduce costs[127]. Environmental and Safety Management - Environmental protection has become a core competitive advantage, with the company investing in pollution control and compliance with stringent regulations[11]. - The company emphasizes the importance of safety production, having established a dedicated safety management department to mitigate risks associated with hazardous materials[12]. - The company is committed to adhering to high environmental standards, which may increase operational costs due to stricter regulations[11]. - The company has implemented a comprehensive environmental management system, achieving effective monitoring and reduction of pollutants[185]. - The company has established emergency response plans to ensure safety and environmental protection during chemical production[186]. - The company’s subsidiaries have developed independent tail gas treatment facilities to manage emissions effectively[183]. - The company invested approximately 154 million RMB in environmental protection in 2016[182]. - The company established wastewater treatment facilities with capacities of 1000t/d, 3600t/d, 4000t/d, 600t/d, 500t/d, 2500t/d, and 1000t/d across various subsidiaries[183]. Operational Risks - The company has multiple subsidiaries, which increases management complexity and potential risks due to geographical distance from headquarters[14]. - The company has implemented a robust internal control system across its subsidiaries to manage operational risks[14]. - Management risks arise from the geographical separation of subsidiaries from headquarters, complicating oversight and potentially affecting operational efficiency[140]. - The company faces risks from macroeconomic fluctuations that could impact its profitability, especially in overseas markets[134]. - The company operates in a highly competitive environment, with risks from both established and emerging competitors in the fine chemicals sector[135]. - The company must comply with stringent environmental regulations, which pose additional operational risks[136]. - Safety production risks are highlighted, with the company facing potential accidents due to the nature of its chemical products and production processes, impacting operational performance[138]. Strategic Development - The company aims to enhance its value chain through integration and potential mergers, focusing on innovation and intellectual property protection[48]. - The company has established a unique operational model focusing on major clients, utilizing customized production and self-marketing to drive rapid business growth[51]. - The company has implemented a customer-oriented business model, enhancing customized production and self-production and sales, which has driven rapid business growth[65]. - The company has expanded its marketing channels through self-production and sales, which has helped accumulate high-quality customers and enhance its core competitiveness[66]. - The company aims for a revenue growth rate of no less than 15% in its industrial business for 2017, based on 2016 figures[125]. - The company plans to advance key projects, including the commercial production of the Taizhou Lianhua project in 2017, and aims to complete the construction of the 400-ton LT822 project within the same year[126]. - The company aims to enhance its internationalization efforts by building a professional management team to support its global development strategy[130]. - The company will implement a comprehensive supply chain management system to improve operational efficiency and responsiveness[132]. Shareholder Information - Major shareholder Mu Jinxiang holds 30.50% of the shares, totaling 254,535,853[200]. - Zhang Youzhi's shares decreased by 780,000, bringing his total to 29,000,182, representing 3.47% of the shares[200]. - The number of shareholders increased from 18,462 to 19,354 during the reporting period[200]. - The company completed the registration of changes in business operations and obtained a new business license from the Zhejiang Provincial Administration for Industry and Commerce[195].