STSS(000825)2023-04-21 16:00Financial Performance - Revenue in 2022 decreased by 3.73% to 97.65 billion yuan compared to 2021 [12] - Net profit attributable to shareholders in 2022 dropped by 97.57% to 153.55 million yuan [12] - Operating cash flow in 2022 decreased by 67.58% to 5.11 billion yuan [12] - Total assets increased by 7.78% to 72.86 billion yuan at the end of 2022 [12] - Q4 2022 revenue was 23.94 billion yuan, with a net loss of 859.38 million yuan [15] - The company's total revenue for 2022 was 97.65 billion yuan, a decrease of 3.73% compared to 2021 [38] - Revenue from stainless steel products increased by 3.77% to 59.44 billion yuan, accounting for 60.86% of total revenue [40] - Revenue from ordinary steel products decreased by 8.08% to 25.32 billion yuan, accounting for 25.93% of total revenue [40] - Revenue from carbon steel billets decreased by 28.84% to 9.51 billion yuan, accounting for 9.74% of total revenue [40] - International revenue increased by 24.60% to 7.33 billion yuan, accounting for 7.51% of total revenue [40] - Domestic revenue decreased by 5.47% to 90.32 billion yuan, accounting for 92.49% of total revenue [40] - The company's gross profit margin for the steel industry was 3.04%, a decrease of 7.78 percentage points compared to the previous year [41] - Operating cash flow decreased by 67.58% to RMB 5.11 billion in 2022, primarily due to reduced company profits [57] - Investment cash flow increased by 49.29% to RMB 191.15 million, while financing cash flow surged by 63.99% to RMB 14.14 billion [57] - The net increase in cash and cash equivalents was RMB 1.99 billion, a significant improvement from the RMB 556.56 million decrease in 2021 [57] - Investment activities generated a net cash flow decrease of 232 million yuan, primarily due to increased engineering investments during the reporting period [58] - Financing activities generated a net cash flow increase of 13.415 billion yuan, mainly due to reduced dividends and loan repayments during the reporting period [58] - The company achieved a net profit of 145 million yuan, with total asset impairment provisions of 725 million yuan and depreciation and amortization of 3.275 billion yuan [58] - The company's monetary funds increased by 1.4% to 11.069 billion yuan, accounting for 15.19% of total assets [59] - Fixed assets decreased by 5.46% to 38.33 billion yuan, mainly due to depreciation during the reporting period [60] - Construction in progress increased by 3.67% to 4.81 billion yuan, primarily due to new engineering investments from the merger of Shandong Taigang Xin Hai Stainless Steel Co., Ltd [60] - The company's total investment during the reporting period was 7.154 billion yuan, a 136.51% increase compared to the same period last year [64] - The company invested 2.141 billion yuan in Taigang Xin Hai Company, acquiring a 51% stake [65] - The high-end cold-rolled oriented silicon steel project has a cumulative investment of 1.144 billion yuan, with a progress rate of 42.03% [66] - The Taigang Xin Hai 1.62 million tons high-end stainless steel alloy material project has a cumulative investment of 2.21 billion yuan, with a progress rate of 86.96% [66] - The initial investment cost for securities investment was 321.67 million yuan, with an ending book value of 169.6 million yuan, reflecting a cumulative fair value change loss of 152.07 million yuan [67] - The company's derivative investments for hedging purposes had an initial investment amount of 218.74 million yuan, with a cumulative fair value change loss of 42.69 million yuan [68] - The hedging ratio for the company's stainless steel spot sales revenue was 122%, with spot sales revenue increasing by 52.13 million yuan and corresponding futures account losses of 42.69 million yuan [68] - The company's derivative investments are funded with its own capital and are aimed at hedging against price fluctuations of raw materials and inventory, as well as exchange rate and interest rate risks [69] - The company has established a comprehensive risk control system for derivative investments, including market risk, liquidity risk, credit risk, operational risk, and legal risk [69] - The fair value of derivatives is determined based on quoted prices in active markets [69] - The company's independent directors have affirmed that the derivative investments and risk control measures are in compliance with relevant laws and regulations and are beneficial for the company's long-term development [70] - The company did not engage in any speculative derivative investments during the reporting period [71] - The company did not use any raised funds during the reporting period [71] - The company did not sell any significant assets or equity during the reporting period [72] - The company implemented the Ministry of Finance's Accounting Standards Interpretation No. 15, resulting in an increase in operating costs and a decrease in R&D expenses by RMB 2.57 billion in the consolidated financial statements for 2022 [169] - The parent company's operating costs increased and R&D expenses decreased by RMB 2.276 billion in 2022 due to the same accounting policy change [169] - In 2021, the consolidated financial statements showed an increase in operating costs and a decrease in R&D expenses by RMB 2.58 billion, while the parent company's figures were RMB 2.318 billion [170] Dividend and Profit Distribution - The company's profit distribution plan is to distribute a cash dividend of 0.25 yuan per 10 shares (tax included) based on 5,731,717,796 shares, with no stock dividends or capital reserve conversion [2] - Cash dividend distribution: 0.25 yuan per 10 shares, totaling 143,292,944.90 yuan, accounting for 93.32% of net profit attributable to parent company shareholders [121] - Total distributable profit: 19,193,828,997.85 yuan, with cash dividends accounting for 100% of the total profit distribution [122] Corporate Governance and Shareholder Meetings - The company's stock is listed on the Shenzhen Stock Exchange with the stock code 000825 [7] - The company's registered and office address is No. 2, Jiancaoping Street, Jiancaoping District, Taiyuan City, Shanxi Province [7] - The company's website is http://tgbx.tisco.com.cn and the email address is tgbx@tisco.com.cn [7] - The company's annual report is disclosed on www.cninfo.com.cn and in media such as "China Securities Journal", "Securities Times", "Shanghai Securities News", and "Securities Daily" [9] - The company's unified social credit code is 91140000701011888X [10] - The company's annual report is prepared at the Securities and Investor Relations Management Department [9] - The company's auditor is Ernst & Young Hua Ming LLP, located at 17th Floor, 01-12, EY Building, No. 1 East Chang'an Avenue, Dongcheng District, Beijing [11] - The company has not changed its main business or controlling shareholder since its listing [10] - The 2021 Annual General Meeting had an investor participation rate of 69.44% and was held on May 19, 2022 [91] - The first interim shareholders' meeting of 2022 had an investor participation rate of 64.92% and was held on July 13, 2022 [92] - The second interim shareholders' meeting of 2022 had an investor participation rate of 64.54% and was held on October 18, 2022 [92] - Sheng Genghong, the chairman, was appointed on October 18, 2022, with a term ending on October 18, 2025 [93] - Li Jianmin, a director, received 220,000 shares as part of the restricted stock incentive plan on May 19, 2022 [93] - Shi Lairun, a director, received 220,000 shares as part of the restricted stock incentive plan on May 19, 2022 [93] - Chairman Wei Chengwen resigned on August 26, 2022, due to work arrangements, and no longer holds any position in the company [95] - Vice Chairman and General Manager Li Hua resigned on April 15, 2022, due to job adjustment [95] - Director Chai Zhiyong resigned on June 17, 2022, for personal reasons and no longer holds any position in the company [95] - Sheng Genghong was elected as Chairman and Director on October 18, 2022 [96] - Shang Jiajun was appointed as General Manager on April 16, 2022 [96] - Zhang Zhijun, the Board Secretary, received 200,000 restricted shares under the equity incentive plan on May 19, 2022 [94] - Wei Chengwen received and later repurchased 280,000 restricted shares under the equity incentive plan in 2022 [94] - Total shares held by directors and supervisors increased by 1,480,000 shares in 2022, with a net increase of 1,295,640 shares [94] - Li Hua, Chairman of the Board, has been serving as the Chairman and Party Secretary of Taiyuan Iron & Steel (Group) Co., Ltd. since July 2022 [98] - Shang Jiajun, General Manager, has been serving as a member of the Standing Committee of the Party Committee of Taiyuan Iron & Steel (Group) Co., Ltd. since March 2021 [98] - Zhang Xiaodong, Director, has been serving as the Chairman of Huabao (Shanghai) Equity Investment Fund Management Co., Ltd. since January 2022 [98] - Li Jianmin, Director, has been serving as the Chief Engineer of Taiyuan Iron & Steel (Group) Co., Ltd. since July 2017 [98] - Shi Lairun, Director, has been serving as the Equipment and Energy Director of the company since January 2019 [99] - Wang Qingjie, Director, has been serving as the Party Secretary and Chairman of Baosteel Desheng Stainless Steel Co., Ltd. since January 2021 [99] - Mao Xinping, Independent Director, has been serving as the Director of the Collaborative Innovation Center for Steel Common Technology at Beijing University of Science and Technology since October 2019 [99] - Liu Xinquan, Independent Director, has been serving as the President of the Enterprise Legal Affairs Branch of the China Iron and Steel Association since April 2014 [99] - Wang Dongsheng, Independent Director, has been serving as the Director of the Public Finance Teaching and Research Office at the Accounting School of Shanxi University of Finance and Economics since September 2013 [99] - Zhang Zhijun, Board Secretary, has been serving as the Director of the Business Finance Department of the company since October 2021 [100] - Total pre-tax compensation for directors and supervisors in 2022 amounted to 440.31 million yuan [106] - Li Hua, Vice Chairman, received a pre-tax compensation of 102.04 million yuan [105] - Shi Lairun, Director and Equipment & Energy Director, received a pre-tax compensation of 114.09 million yuan [105] - Zhang Zhijun, Board Secretary, received a pre-tax compensation of 85.94 million yuan [105] - The company held a total of 13 board meetings in 2022, with all directors attending either in person or via teleconference [107][108] - Sheng Genghong, Chairman, attended 3 board meetings, with 1 in person and 2 via teleconference [109] - Li Jianmin, Director, attended 13 board meetings, with 4 in person and 9 via teleconference [109] - Wang Dong, Independent Director, attended 3 board meetings, with 1 in person and 2 via teleconference [109] - No directors raised objections to company matters during the reporting period [110] - Directors' suggestions were adopted by the company, reflecting their active participation and adherence to legal and regulatory requirements [110] - The company's main operating target for 2022 is to produce 12.69 million tons of steel, including 4.5 million tons of stainless steel, and to sell 11.93 million tons of steel products, including 4.07 million tons of stainless steel products [112] - The company's fixed asset investment budget for 2022 is 4.91724 billion yuan, with a capital budget of 4.40466 billion yuan, focusing on intelligent upgrades and green transformation projects [112] - The company's total number of employees at the end of the reporting period is 15,123, including 14,024 from the parent company and 1,099 from major subsidiaries [115] - The company's employee composition includes 12,190 production personnel, 397 sales personnel, 1,981 technical personnel, 90 financial personnel, and 465 administrative personnel [115] - The company's employee education levels include 600 postgraduates, 3,049 undergraduates, 4,801 college graduates, 531 secondary school graduates, and 6,142 high school graduates and below [115] - The company's 2022 financial report audit fee is 1.8 million yuan, and the internal control audit fee is 400,000 yuan [113] - The company's 2021 financial statements were prepared in accordance with the new accounting standards and were deemed accurate and complete [112] - The company's 2022 internal audit plan was reviewed and approved, with a focus on strengthening internal audit work [112] - The company's 2022 management performance and compensation plan was approved, establishing a performance-oriented evaluation and incentive mechanism [113] - The company's 2022 restricted stock incentive plan was approved, aiming to promote sustainable and healthy development [113] - Total labor outsourcing hours: 6,930,890.88 hours, with total compensation paid: 364,639,704.41 yuan [118] - Restricted stock incentive plan: 3,653,000 shares granted at 3.69 yuan per share, accounting for 0.641% of total shares at the grant date [123] - Restricted stock repurchase: 1,060,000 shares repurchased at 3.69 yuan per share plus bank deposit interest, reducing total shares from 5,732,777,796 to 5,731,717,796 [124] - Senior management restricted stock grants: 1,480,000 shares granted, with 1,200,000 shares held at year-end [125] - The restricted stock incentive plan has a lock-up period of 24 months and a release period of 36 months, with release ratios of 33%, 33%, and 34% over three batches [126] - The performance targets for the first release period in 2022 include a ROE of at least 10%, a compound growth rate of profit (excluding non-recurring gains/losses) of at least 35% compared to 2020, and an EVA improvement of at least 1.91 billion yuan compared to 2020 [127] - The performance targets for the second release period in 2023 include a ROE of at least 11%, a compound growth rate of profit (excluding non-recurring gains/losses) of at least 25% compared to 2020, and an EVA improvement of at least 2.14 billion yuan compared to 2020 [127] - The performance targets for the third release period in 2024 include a ROE of at least 12%, a compound growth rate of profit (excluding non-recurring gains/losses) of at least 25% compared to 2020, and an EVA improvement of at least 2.98 billion yuan compared to 2020 [127] - The company established and revised 19 internal control systems in 2022, bringing the total number of systems to 248 [130] - The company completed the integration of its Russian subsidiary and the merger of its Liaoning sales company with Shenyang Taiyuan Stainless Steel Processing and Sales Co., Ltd [132] - The company completed the acquisition of Taiyuan XinHai Company through a non-consolidated business combination [132] - The company's internal control evaluation report covered 100% of its total assets and operating revenue [133] - No significant or material defects were identified in the company's financial or non-financial reporting internal controls for 2022 [134] - The company maintained effective financial reporting and internal control as of December 31, 2022, with a standard unqualified opinion from the internal control audit report [135] - The company completed its corporate governance self-inspection and implemented improvements, including revising the "Board Secretary Work System" and "Articles of Association" in 2022 [136] - The company revised the "Management Team Compensation Incentive and Performance Evaluation Measures" and established the "2022 Management Team Performance Responsibility Agreement" [137] - The company and its subsidiaries are classified as key pollutant discharge units by environmental protection authorities [138] - The company adheres to environmental laws and regulations, including the "Environmental Protection Law" and "Energy Conservation Law," and complies with specific emission standards for steel and coking industries [139] - The company obtained and updated its pollutant discharge permits, with the latest permit valid from December 20, 2022, to December 19, 2027 [141] - Taiyuan Stainless Steel's total emissions in 2022: particulate matter 1949.34 tons, sulfur dioxide 614.61 tons, nitrogen oxides 2838.5 tons [142] - Taiyuan Stainless Steel's environmental protection investment in 2022: 543.35 million yuan, environmental protection tax paid: 9.17 million yuan [147] - Tianjin Taiyuan Stainless Steel Pipe's environmental protection tax paid in 2022: 1.06 million yuan [147] - Taiyuan Stainless Steel's wastewater treatment system: A2O + bioenzyme process, achieving special emission limits and local government standards [144] - Taiyuan Stainless Steel's exhaust gas treatment: SCR denitrification, limestone-gypsum desulfurization, and wet electrostatic precipitation for ultra-low emissions [144] - Tianjin Taiyuan Stainless Steel Pipe's exhaust gas treatment: natural gas as clean fuel, low-nitrogen burners, and multi-stage waste heat recovery [144] - Taiyuan Stainless Steel's noise control measures: low-noise equipment, vibration damping, soundproof rooms, and noise barriers [144] - Taiyuan Stainless Steel's emergency environmental event plan: filed with local environmental authorities in June 2021 [146] - Tianjin Tai