JHSY(SZ:002597)2019-08-29 16:00Financial Performance - The company's operating revenue for the first half of 2019 was CNY 1,977,990,127.01, a decrease of 12.32% compared to CNY 2,255,996,853.00 in the same period last year[23]. - The net profit attributable to shareholders of the listed company was CNY 401,322,499.43, down 26.07% from CNY 542,862,726.62 year-on-year[23]. - The net profit after deducting non-recurring gains and losses was CNY 383,155,060.61, a decrease of 25.33% compared to CNY 513,144,707.92 in the previous year[23]. - The basic earnings per share decreased by 25.00% to CNY 0.72, down from CNY 0.96 in the previous year[23]. - The diluted earnings per share also fell by 26.04% to CNY 0.71, compared to CNY 0.96 in the same period last year[23]. - The weighted average return on net assets was 10.05%, down from 15.05% year-on-year, a decrease of 5.00%[23]. - The total operating cost decreased by 10.32% to ¥1,324,204,178.23 from ¥1,476,586,658.87 year-on-year[56]. - Revenue from bulk chemicals was 750 million RMB, a decline of 15.40% year-on-year, primarily due to falling prices[50]. - Revenue from food additives increased to 967 million RMB, reflecting a growth of 4.13% driven by higher sales volume[50]. Cash Flow and Investments - The net cash flow from operating activities increased by 10.27% to CNY 381,517,482.79, compared to CNY 345,980,439.77 in the same period last year[23]. - The company reported a total investment income of 18,167,438.82, with a tax impact of 3,240,956.55[29]. - The company's cash and cash equivalents increased to ¥1,802,143,084.52, representing 31.20% of total assets, up from 26.00% in the previous year[64]. - The company has raised a total of CNY 59,003 million through public offerings, with CNY 3,945.81 million invested during the reporting period and a cumulative investment of CNY 44,624.42 million[76]. - The company has utilized idle raised funds to purchase wealth management products amounting to CNY 12,000 million, with a remaining balance of CNY 3,194.92 million in the special account for raised funds[81]. Business Strategy and Operations - The main business remains unchanged, focusing on the R&D, production, and sales of basic and fine chemical products, including food additives and bulk chemicals[34]. - The company has developed a vertical integration strategy across multiple industrial chains, targeting high-quality markets such as food and beverage, healthcare, and high-end manufacturing[34]. - The company is focusing on diversifying its product offerings, aiming to increase its core product clusters to five and explore one to two new business segments[49]. - The company is expanding its product line and reducing production costs through horizontal and vertical extensions of its industrial chain[40]. - The company is actively pursuing market expansion through the application of sweeteners in various products, including fruit products and beverages[51]. Research and Development - The company has established a "Chemical Process and Core Technology Research and Development Center" in collaboration with universities to enhance its technological capabilities[39]. - Research and development investment increased by 77.52% to ¥79,472,678.72 from ¥44,767,766.44 year-on-year[56]. - The company has achieved a leading position in the production yield and cost levels of acesulfame and ethyl maltol through continuous technological innovation[39]. Environmental and Safety Management - The company is committed to safety and environmental management, conducting regular safety training and emergency drills[52]. - The company emphasizes the importance of environmental protection and has established a comprehensive system for environmental governance, ensuring compliance with increasingly stringent regulations[95]. - The company has implemented a comprehensive environmental protection and governance system to ensure compliance with pollution discharge standards[132]. - The company has established three wastewater treatment facilities with a total capacity of 8,400 tons per day, ensuring effective wastewater treatment[133]. - The company has not experienced any incidents of exceeding wastewater discharge standards during the reporting period[133]. Shareholder and Governance - The company plans not to distribute cash dividends or issue bonus shares[7]. - The company has successfully completed the election of a new board of directors and supervisory board, ensuring a smooth transition for future governance[55]. - The company approved a total guarantee amount of CNY 15,000,000 during the reporting period, with no actual guarantees provided to subsidiaries[122]. - The company has approved the implementation of the first phase of its core employee stock ownership plan[111]. - The company’s major shareholder, Anhui Jinrui Investment Group Co., Ltd., holds 44.83% of the shares, totaling 250,487,223 shares[169]. Market Challenges and Risks - The overall chemical industry is facing challenges due to macroeconomic downturns and trade tensions, impacting bulk chemical prices[35]. - The company faces risks related to macroeconomic fluctuations, particularly affecting the demand for basic chemical products, which could impact sales and profitability[95]. - There is a risk of product price decline due to decreased demand for basic chemical products and intensified market competition, which could affect overall profitability[98]. - The company is transitioning towards fine chemicals to lower costs and enhance internal governance capabilities to counteract price decline risks[98].