FULIN. PM(300432)2024-08-23 11:37Supply Chain Management - The company reported significant reliance on lithium carbonate, which constitutes a large portion of the production cost for lithium iron phosphate materials, indicating a need for enhanced supply chain risk management[2]. - The company plans to strengthen its supply chain system to mitigate the impact of raw material price fluctuations, including establishing a linkage pricing mechanism and optimizing supplier relationships[2]. - The company is enhancing its supply chain management by establishing a diversified lithium supply system to mitigate risks associated with raw material price fluctuations[45]. - The company implements a qualified supplier management system for lithium battery cathode materials, ensuring strict procurement processes[26]. - Rising raw material costs, particularly for steel and lithium carbonate, pose significant challenges, prompting the company to strengthen its supply chain risk management[75]. Financial Performance - The company's operating revenue for the first half of 2024 reached ¥3,594,912,337.77, representing a 54.81% increase compared to ¥2,322,157,896.23 in the same period last year[13]. - Net profit attributable to shareholders was ¥131,756,982.85, a significant recovery from a loss of ¥323,067,938.89 in the previous year, marking a 140.78% increase[13]. - The basic earnings per share increased to ¥0.1079 from a loss of ¥0.2660, reflecting a 140.56% improvement[13]. - The company reported a net cash flow from operating activities of ¥238,657,264.38, a decrease of 31.62% compared to ¥349,023,035.50 in the previous year[13]. - The company's total assets at the end of the reporting period were ¥8,765,252,529.27, down 3.71% from ¥9,102,995,664.37 at the end of the previous year[13]. Research and Development - The company is aware of the risks associated with potential breakthroughs in battery technology that could affect the demand for lithium iron phosphate materials, and it aims to increase its research efforts in this area[3]. - The company continues to focus on the research, production, and sales of automotive engine components, intelligent electric control for new energy vehicles, and lithium battery positive electrode materials[20]. - The company has over 300 authorized patents and has established several engineering technology research centers, ensuring a strong foundation for technological innovation and product development[34]. - The company is focusing on the development of smart electric control systems and thermal management systems for new energy vehicles, aiming to upgrade its business from traditional precision processing to integrated electromechanical solutions[33]. - The company has accelerated its research and development efforts, focusing on new products such as electronic water pumps and precision reducers, to meet evolving market demands[45]. Market Trends and Opportunities - The transition from policy-driven to consumer-driven growth in the new energy vehicle market presents significant opportunities for the company[28]. - The automotive parts industry is experiencing a shift towards domestic substitution, with local companies gaining competitive advantages in electric, intelligent, and lightweight components[27]. - The company is positioned to benefit from the ongoing coexistence of fuel and new energy vehicles, providing continuous development space for automotive parts manufacturers[28]. - The domestic power battery industry is projected to reach a production scale of 10.83 million vehicles in 2024, representing a year-on-year growth of 31.9%[30]. - The company’s strategic focus on electric and intelligent vehicle trends is expected to drive steady growth and high-quality development in the new energy sector[33]. Environmental Compliance - The company has received environmental assessment approvals for its subsidiaries, indicating compliance with environmental regulations[93]. - The company is actively expanding its environmental monitoring capabilities to ensure compliance with pollution discharge standards[95]. - The company generated a total of 12,191 tons of industrial wastewater in the first half of 2024, all treated to meet the Class 3 standards of the "Comprehensive Discharge Standard for Wastewater" (GB8979-1996) before being discharged[97]. - The company has invested in two wastewater treatment plants and 44 waste gas incinerators at its Shaohong base to enhance environmental protection measures[100]. - The company is committed to reducing its environmental impact through effective pollution control measures and regular monitoring[97]. Corporate Governance and Shareholder Relations - The company emphasizes investor relations and aims to maintain investor confidence through various engagement activities, including performance briefings and roadshows[45]. - The company held its annual shareholder meeting on May 20, 2024, with a participation rate of 37.97%[80]. - The company plans not to distribute cash dividends, issue bonus shares, or increase share capital from capital reserves for the semi-annual period[82]. - The company has undergone changes in its board of directors, with new appointments and resignations occurring in early 2024[81]. - The company is committed to maintaining and safeguarding the interests of its shareholders[105]. Strategic Partnerships and Collaborations - The company has established long-term collaborative relationships with over 60 domestic and international automotive manufacturers, including BYD, SAIC, and General Motors, enhancing its market position[32]. - Jiangxi Shenghua has established a long-term strategic cooperation mechanism with CATL, committing to supply at least 140,000 tons of lithium iron phosphate annually from 2025 to 2027[125]. - The company has successfully completed two rounds of capital increases with CATL and Changjiang Chenda, raising a total of RMB 164 million for the expansion of lithium iron phosphate production[124]. - The strategic cooperation agreement with CATL highlights the recognition of the company's product development and supply capabilities in the lithium iron phosphate market[125]. - The company has established long-term strategic partnerships with numerous domestic and international OEMs, enhancing its market position and reducing operational risks[38]. Financial Management and Investments - The company plans to provide financial support of up to RMB 150 million to its subsidiary, Fulin New Energy, at an annual interest rate of 4.2% for a period not exceeding 12 months[117]. - The company completed a share buyback transaction for a total consideration of RMB 389.44 million, increasing its ownership in Jiangxi Shenghua from 56.27% to 96.27%[125]. - The company has not experienced any non-operating fund occupation by controlling shareholders or other related parties during the reporting period[106]. - The company has not engaged in any asset or equity acquisitions or sales during the reporting period, maintaining a conservative approach to expansion[113]. - The company has completed the registration of the first category of restricted stock under the 2021 incentive plan, with a grant price of 4.64 CNY per share and a total of 4.35 million shares granted, accounting for 0.59% of the total share capital[84]. Operational Efficiency - The company emphasizes the importance of maintaining a strong production capacity utilization rate amid market demand fluctuations, leveraging its technical strength and customer resources[3]. - The automotive parts business adopts a production model combining in-house manufacturing and outsourcing, enhancing production capacity and competitiveness[25]. - The company is actively expanding its production capacity in response to the growing demand for fast-charging lithium iron phosphate products, achieving full production and sales in the second quarter[40]. - The company's automotive parts segment has established annual production capacities of 500,000 units for electric drive reducers, 240,000 units for powertrains, and 930,000 sets for differentials, with additional capacities for various components including 9 million units for transmission solenoids[43]. - The company’s lithium iron phosphate (LFP) cathode material production capacity is currently 140,000 tons per year, with plans to build a new project for 150,000 tons of high-pressure lithium iron phosphate, which is being constructed in phases to optimize capacity utilization[44].