Financial Performance - For the fiscal year ending December 31, 2024, the company reported stable growth in revenue, net profit, and cash flow, indicating a strong performance in the high-end pearlescent materials, artificial mica, and new energy materials sectors[7]. - In the fiscal year 2024, the company achieved revenue of approximately RMB 1,648.8 million, a year-on-year increase of about 55.0%[16]. - The net profit for fiscal year 2024 was approximately RMB 320.3 million, reflecting a year-on-year growth of about 50.2%[16]. - EBITDA for fiscal year 2024 was approximately RMB 612.9 million, an increase of about 65.9% compared to approximately RMB 369.6 million for the fiscal year 2023[17]. - Total revenue increased from approximately RMB 1,064.1 million in FY2023 to approximately RMB 1,648.8 million in FY2024, representing a year-on-year growth of about 55.0%[33]. - Revenue from the China operations accounted for approximately 80.8% of total revenue in FY2024, up from 90.3% in FY2023, with an increase from approximately RMB 960.9 million to approximately RMB 1,332.2 million, a growth of about 38.6%[33]. - Revenue from the Korea operations rose to approximately RMB 316.6 million in FY2024, representing 19.2% of total revenue, compared to approximately RMB 103.1 million and 9.7% in FY2023[33]. - Sales of pearlescent pigment products increased from approximately RMB 964.0 million in FY2023 to approximately RMB 1,528.3 million in FY2024, an increase of about RMB 564.3 million or approximately 58.5%[38]. - Sales of natural mica-based pearlescent pigments rose by approximately RMB 312.6 million, or about 78.2%, compared to FY2023[38]. - Sales of synthetic mica-based pearlescent pigments increased by approximately RMB 80.1 million, or about 18.3%, compared to FY2023[38]. - Sales of glass flake-based pearlescent pigments grew by approximately RMB 62.8 million, or about 79.1%, compared to FY2023[38]. - Sales of mica functional fillers increased from approximately RMB 83.8 million in FY2023 to approximately RMB 92.8 million in FY2024, a growth of about RMB 9.0 million or approximately 10.8%[39]. - The company reported a charitable donation of approximately RMB 0.1 million for the fiscal year 2024[116]. Strategic Initiatives - The company successfully launched the second phase of the seven-color pearlescent project with an annual production capacity of 30,000 tons and initiated the 100,000-ton artificial mica project in Tonglu, marking significant capacity expansion[8]. - The strategic acquisition of Merck Group's global surface solutions business is expected to enhance the company's technological and market resources, further driving international market penetration[8]. - The integration of the Korean pearlescent materials company CQV has led to significant synergies in market channels, product development, and supply chain management, improving operational performance[10]. - The company aims to implement a "Materials + Innovation + Full Scene" strategy, focusing on green manufacturing, advanced materials, and intelligent applications to achieve new heights in business growth[12]. - The company plans to continue expanding its market presence and product offerings, focusing on synthetic mica-based products and enhancing production capabilities through technological improvements[35]. - The company plans to allocate RMB 330.8 million from the net proceeds of its global offering for the acquisition of global surface solutions business, with the transaction value set at €665 million[51]. - The company will continue to evaluate the use of net proceeds to align with changing market conditions and ensure business growth[54]. - The company plans to enhance R&D investment and establish a global collaborative R&D mechanism in areas such as synthetic mica and new energy materials[62]. - The company aims to integrate global sales channels and optimize supply chain costs to improve product reach and efficiency[63]. - The company is focused on six key areas to enhance global sales scale and gross margin, including technology integration and brand influence[65]. - The company will deepen the integration of global surface solutions business, enhancing product competitiveness through collaboration and resource integration[62]. - The company plans to continuously expand and improve its full range of product offerings to enhance market competitiveness[66]. - The company aims to optimize supply chain costs through refined management to improve operational efficiency and reduce costs[67]. - The company will increase R&D investment to enhance technological integration and innovation capabilities, focusing on upgrading products in the cosmetics active ingredients and industrial functional products sectors[67]. Awards and Recognition - The company received the "Best Social Responsibility Case Award" at the Frankfurt Central European ESG Best Practices Conference, highlighting its commitment to sustainable development[12]. - The company received multiple industry awards, including the "Best Social Responsibility Case Award" at the first Frankfurt Central European Enterprises ESG Best Practices Conference[30]. Corporate Governance - The company emphasizes corporate governance as a key driver for sustainable development and value creation[144]. - The board of directors is committed to maintaining high standards of corporate governance to ensure shareholder returns and manage business risks effectively[149]. - The company has adopted the corporate governance code as the basis for its governance practices, ensuring compliance throughout the fiscal year 2024[149]. - The board consists of a balanced mix of executive and independent non-executive directors, ensuring strong independence and effective decision-making[153]. - The company has established a board independence assessment mechanism to enhance effectiveness and identify areas for improvement[160]. - The chairman and CEO roles are currently held by the same individual, which the board believes benefits the company's strategic development[157]. - The board has consistently met the requirement of having at least three independent non-executive directors, ensuring compliance with listing rules[158]. - The company actively engages in partnerships with research institutions to accelerate innovation and product development[148]. - The board holds regular meetings, with a minimum of four meetings per year, to ensure active participation and oversight[156]. - The board has reviewed the implementation and effectiveness of the board independence assessment mechanism for the fiscal year 2024, and the results are satisfactory[161]. - The non-executive directors, including independent non-executive directors, have a specific term of three years, with reappointment possible after the term expires[162]. - The audit committee consists of three independent non-executive directors, with the main responsibilities including reviewing financial data and internal control systems[173]. - The remuneration committee held one meeting in the fiscal year 2024 to review the remuneration policies for executive directors and senior management[178]. - The company's remuneration policy aims to ensure that employee compensation is determined based on skills, knowledge, responsibilities, and contributions to the company[178]. - The training courses organized for all directors in the fiscal year 2024 covered a wide range of relevant topics, including directors' duties and corporate governance updates[168]. - The audit committee held two meetings to review the interim and annual financial performance and reports for the fiscal year 2024[173]. - The company encourages all directors to participate in relevant training courses, with costs covered by the company[166]. - The board has established three committees: the audit committee, remuneration committee, and nomination committee, each with specific written terms of reference[171]. - The remuneration for non-executive and independent non-executive directors is determined based on their participation and responsibilities within the company[178]. - The Nomination Committee held one meeting in the fiscal year 2024 to review the board's structure, number, and composition, as well as the independence of non-executive directors[182]. - The company aims to achieve measurable goals under the board diversity policy, including at least one female board member and at least one-third of the board members being independent non-executive directors[186]. - The current board composition analysis shows 10 male members and 1 female member, with 4 independent non-executive directors[187]. - The gender ratio among employees indicates that 26.20% are female and 73.80% are male, with the board currently having 9% female representation[190]. - The company plans to appoint at least one female director to improve gender diversity on the board[190]. - The board diversity policy emphasizes the importance of a diverse board for maintaining competitive advantage and will be reviewed annually[184]. - The Nomination Committee is responsible for evaluating the qualifications of candidates for board positions based on established criteria[192]. - The company recognizes the benefits of a diverse board and aims to maintain a balanced perspective related to business growth[184]. - The board diversity policy includes considerations of gender, age, cultural and educational background, professional qualifications, skills, knowledge, and industry experience[184]. - The nomination committee recommended the appointment of a new executive director, Mr. Lin Guangshui, and an independent non-executive director, Professor Chen Fadong, for the fiscal year 2024[198]. - The nomination committee will review the board nomination policy in a timely manner to ensure its effectiveness[199]. - The board has reviewed the company's corporate governance policies and practices, including training and continuous professional development for directors and senior management[200]. Shareholder Information - As of December 31, 2024, the company's cash and bank balances were approximately RMB 3,411.4 million, an increase from RMB 3,203.5 million as of December 31, 2023[79]. - The company's total borrowings increased to approximately RMB 1,729.0 million as of December 31, 2024, compared to RMB 327.0 million as of December 31, 2023[79]. - The company's debt-to-asset ratio rose to approximately 34.3% as of December 31, 2024, up from 17.6% as of December 31, 2023[81]. - The company's net asset value was approximately RMB 4,353.1 million as of December 31, 2024, compared to RMB 4,085.1 million as of December 31, 2023[82]. - The company has decided not to declare any final dividends for the fiscal year 2024, consistent with the previous fiscal year[75]. - As of December 31, 2024, the company issued convertible bonds totaling RMB 300 million and USD 40 million, with an initial conversion price of HKD 7.6 per share[85]. - If the convertible bonds are fully converted, the company will issue 43,815,789 shares and 40,789,474 shares, representing approximately 3.54% and 3.29% of the total issued shares as of December 31, 2024, respectively[89]. - The company has capital commitments amounting to approximately RMB 5,873.1 million as of December 31, 2024, compared to RMB 275.1 million as of December 31, 2023[95]. - The capital commitments include the renovation and expansion of the first phase of the production plant, construction of the second phase of the production plant, and the establishment of a new research and development center[95]. - The company plans to finance the above commitments through internal resources and external financing[95]. - The company applied for the listing and trading of 73,026,316 shares related to the convertible bonds issued on December 30, 2022, and 81,578,947 shares related to the convertible bonds issued on November 8, 2023[90]. - As of December 31, 2024, the total issued shares will increase to 1,282,685,921 after the full conversion of the A batch convertible bonds[91]. - The company’s major shareholder, Guangxi Investment Group Co., Ltd., holds 123,638,000 shares, representing 9.97% of the total issued shares as of December 31, 2024[92]. - The company’s public shareholders hold 654,713,803 shares, which is 52.85% of the total issued shares as of December 31, 2024[91]. - The company’s chairman and CEO, Mr. Su, holds 427,057,948 shares, representing 34.47% of the total issued shares as of December 31, 2024[92]. - Mr. Su holds a total of 301,155,800 shares, representing 24.31% of the company's equity[129]. - Mr. Jin holds 24,241,200 shares, representing 1.96% of the company's equity[129]. - Mr. Hu holds 19,285,200 shares, representing 1.56% of the company's equity[129]. - The total equity interests of the directors and key executives in the company are disclosed in accordance with the Securities and Futures Ordinance[131]. - The company has no other equity interests or short positions held by directors and key executives as of December 31, 2024[131]. - The interests of Mr. Su are primarily through controlled corporations, including Guangxi Hongzun Investment Group[132]. - Mr. Su is the sole director of several investment companies, indicating concentrated control over equity interests[132]. - The company maintains compliance with the Securities and Futures Ordinance regarding the disclosure of interests[131]. - The ownership structure includes various partnerships and investment entities linked to the directors[132]. - The report emphasizes the importance of transparency in the ownership and control of the company's shares[131]. - As of December 31, 2024, major shareholders include Hongzun International with 301,155,800 shares (24.31%) and Guangxi Energy Holdings with 107,178,000 shares (8.65%) [133]. Operational Efficiency - Cost of goods sold increased by approximately 44.7% from RMB 528.0 million in FY2023 to RMB 764.1 million in FY2024, driven by a 35.9% increase in sales volume of pearlescent pigments to approximately 25,404 tons[42]. - Gross profit rose by approximately 65.4% from RMB 528.3 million in FY2023 to RMB 873.7 million in FY2024, with a gross margin of approximately 53.0%, up 3.3% from the previous fiscal year[43]. - Other income and losses decreased significantly from RMB 28.0 million in FY2023 to approximately RMB 2.4 million in FY2024, primarily due to increased foreign exchange losses of approximately RMB 28.4 million[44]. - Financing costs surged by approximately 130.3% from RMB 51.4 million in FY2023 to RMB 118.4 million in FY2024, mainly due to increased bank loans and interest expenses from convertible bonds[48]. - Net profit for FY2024 was approximately RMB 320.3 million, a 50.2% increase from RMB 213.3 million in FY2023, with net profit margins of approximately 19.4% and 20.0% respectively[50]. - Sales expenses increased by approximately 52.1% from RMB 62.8 million in FY2023 to RMB 95.5 million in FY2024, attributed to increased sales and transportation costs[46]. - Administrative and other operating expenses rose by approximately 39.1% from RMB 188.6 million in FY2023 to RMB 262.4 million in FY2024, driven by professional service fees for potential acquisitions and increased employee costs[47]. - The company actively manages inventory to stabilize product supply and cash flow, while also developing new products to meet market demand[120]. - The company maintains effective communication with customers to meet their demands and provide high-quality services[99]. - The company regularly reviews employee compensation and benefits to attract and retain talent, participating in relevant retirement plans in China, South Korea, and Hong Kong[102]. - The company has established good relationships with reputable suppliers and conducts regular fair assessments of them[100]. Compliance and Risk Management - The company confirmed compliance with applicable laws and regulations, including the Cayman Islands laws and listing rules, with no known violations[121]. - The group has established an energy-saving culture and implemented various measures to reduce carbon emissions in its operations[122]. - The company has not committed to using any financial instruments to hedge foreign currency risks in the fiscal year 2024, as the board believes these risks are manageable[96]. - There were no related party transactions constituting connected transactions or continuing connected transactions for the fiscal year 2024[113]. - The board has not been aware of any significant transactions or arrangements in which directors or their related entities had a substantial interest during the fiscal year 2024[125]. - There were no significant events affecting the group that required disclosure after December 31, 2024, up to the date of the report[117].
环球新材国际(06616) - 2024 - 年度财报