星源材质(300568) - 2020 Q2 - 季度财报

Important Notice, Table of Contents, and Definitions This semi-annual report for Shenzhen Senior Technology Material Co., Ltd. covers H1 2020, with management assuring its accuracy and completeness - This report is the 2020 semi-annual report of Shenzhen Senior Technology Material Co., Ltd., covering January 1 to June 30, 2020, with management assuring its truthfulness, accuracy, and completeness[2][6] Company Profile and Key Financial Indicators This section provides an overview of the company's basic information, key financial performance indicators, and details on non-recurring gains and losses for the reporting period Company Profile Shenzhen Senior Technology Material Co., Ltd. (stock code: 300568) is a company listed on the Shenzhen Stock Exchange, with Chen Xiufeng as its legal representative Company Basic Information | Item | Content | | :--- | :--- | | Stock Abbreviation | Senior Material | | Stock Code | 300568 | | Listing Exchange | Shenzhen Stock Exchange | | Chinese Name | 深圳市星源材质科技股份有限公司 | | Legal Representative | 陈秀峰 | Key Accounting Data and Financial Indicators During the reporting period, the company's operating revenue decreased by 3.39% year-on-year, and net profit attributable to shareholders significantly declined by 58.44%, though net cash flow from operating activities increased by 159.25%, indicating strong cash recovery Key Financial Indicators for H1 2020 | Indicator | Current Period | Prior Period | YoY Change | | :--- | :--- | :--- | :--- | | Operating Revenue (RMB) | RMB 340.91 million | RMB 352.87 million | -3.39% | | Net Profit Attributable to Shareholders (RMB) | RMB 71.36 million | RMB 171.70 million | -58.44% | | Non-recurring Net Profit Attributable to Shareholders (RMB) | RMB 53.94 million | RMB 90.35 million | -40.30% | | Net Cash Flow from Operating Activities (RMB) | RMB 259.21 million | RMB 99.98 million | 159.25% | | Basic Earnings Per Share (RMB/share) | 0.17 RMB/share | 0.89 RMB/share | -80.90% | | Weighted Average Return on Net Assets | 2.61% | 10.64% | -8.03% | | Total Assets (RMB) | RMB 5.43 billion | RMB 5.33 billion | 1.87% (Period-end vs. Prior Year-end) | | Net Assets Attributable to Shareholders (RMB) | RMB 2.88 billion | RMB 2.47 billion | 16.54% (Period-end vs. Prior Year-end) | Non-recurring Gains and Losses During the reporting period, the company's total non-recurring gains and losses amounted to RMB 17.42 million, primarily from government grants and reversal of impairment provisions for receivables Details of Non-recurring Gains and Losses for H1 2020 | Item | Amount (RMB) | | :--- | :--- | | Government Grants Recognized in Current Profit/Loss | RMB 12.73 million | | Reversal of Impairment Provisions for Receivables Subject to Separate Impairment Testing | RMB 8.15 million | | Gains/Losses on Disposal of Non-current Assets | RMB 41330.55 | | Other Non-operating Income and Expenses | RMB 76201.82 | | Less: Income Tax Impact | RMB 2.89 million | | Less: Impact on Minority Interests (After Tax) | RMB 685168.56 | | Total | RMB 17.42 million | Company Business Overview This section outlines the company's principal business, significant asset changes, and core competitive advantages in the lithium-ion battery separator industry Principal Business The company is a national high-tech enterprise specializing in R&D, production, and sales of lithium-ion battery separators, offering dry, wet, and coated membranes for new energy vehicles and energy storage, operating on a build-to-order and direct sales model - The company is the lead drafter of national standards for lithium-ion battery separators, with products including dry, wet, and coated membranes used in new energy vehicles, energy storage, and power tools[18] - The company's core operating model is 'build-to-order', employing a five-step R&D approach, primarily using direct sales, and providing customized production for strategic clients like LG Chem[18][19] - Globally, lithium battery separator market share is shifting towards Chinese enterprises; the domestic market faces overcapacity in low-end products and insufficient supply in mid-to-high-end, favoring leading companies with technological advantages[19][20] Significant Changes in Major Assets During the reporting period, several balance sheet items saw significant changes, including a substantial 889.10% increase in prepayments due to raw material purchases, a 139.62% rise in notes payable from increased bill settlements, and a 100% decrease in bonds payable due to the full redemption of 'Senior Convertible Bonds' Balance Sheet Major Item Significant Changes | Item | YoY Change | Main Reason | | :--- | :--- | :--- | | Prepayments | +889.10% | Increase in prepayments for raw material purchases | | Advances from Customers | +3,764.20% | Increase in customer payments received for goods | | Taxes Payable | +523.30% | Increase in unpaid corporate income tax and VAT | | Other Payables | +182.71% | Increase in restricted stock repurchase obligations | | Notes Payable | +139.62% | Increase in bill settlement business | | Bonds Payable | -100% | Full redemption of "Senior Convertible Bonds" | | Accounts Payable | -30.02% | Decrease in equipment and engineering payments owed by subsidiaries | Analysis of Core Competencies The company's core competencies include leading R&D, strong market position, comprehensive solution capabilities, product leadership, brand reputation, and efficient management, reinforced by global R&D, deep client partnerships, and extensive technical services - R&D Advantage: The company has established multiple R&D platforms, including a National and Local Joint Engineering Research Center, and set up research institutes in the US and Japan, achieving a global R&D layout. As of the end of the reporting period, the company and its controlled subsidiaries had applied for 319 patents, with 129 authorized[24][25] - Market Advantage: The company boasts an excellent client base, covering numerous renowned domestic battery manufacturers like CATL, BYD, and Gotion High-tech; internationally, it supplies in bulk to LG Chem (Korea), Samsung SDI, and Murata (Japan)[27] - Overall Solution Advantage: The company possesses capabilities ranging from raw material formula screening, microporous preparation technology, independent design of complete sets of equipment, to rapid response to customized client needs and full technical service[28][29][30][31] - Brand and Management Advantage: The company has established a leading brand position with "SENIOR Senior Material" and possesses an experienced management team, having obtained multiple management system certifications including ISO9001 and IATF16949[33][34] Management Discussion and Analysis This section discusses the company's operating performance, financial condition, investment activities, and key risks with corresponding countermeasures Overview In H1 2020, influenced by the COVID-19 pandemic and market conditions, the company's operating performance declined, with total operating revenue down 3.39% to RMB 341 million and net profit attributable to parent down 58.44% to RMB 71.36 million, yet lithium-ion battery separator sales grew 45.28% to 222 million square meters, and key projects progressed, gradually releasing capacity 2020 H1 Performance Overview | Indicator | Amount (RMB million) | YoY Change | | :--- | :--- | :--- | | Total Operating Revenue | 340.91 | -3.39% | | Operating Profit | 81.74 | -24.84% | | Net Profit Attributable to Parent | 71.36 | -58.44% | | Non-recurring Net Profit Attributable to Parent | 53.94 | -40.30% | - During the reporting period, the company's lithium-ion battery separator sales reached 221.79 million square meters, a 45.28% year-on-year increase[35] - The company's 'Annual Production of 360 million Sqm Wet Process Separator Project' in Changzhou, Jiangsu, is largely complete and supplying clients like CATL and Murata; the 'Super Coating Plant' project is progressing well, supplying EVE Energy and BYD[35][36] Analysis of Principal Business During the reporting period, the company's principal business revenue slightly decreased by 3.39%, while operating costs rose 11.28%, leading to a gross margin decline; domestic revenue grew 24.84%, but overseas revenue fell 13.82%, with overseas gross margin dropping 17.77 percentage points, as R&D investment increased by 73.07% Major Financial Data YoY Change | Item | Current Period (RMB) | YoY Change | Main Reason for Change | | :--- | :--- | :--- | :--- | | Operating Revenue | RMB 340.91 million | -3.39% | - | | Operating Cost | RMB 187.50 million | 11.28% | - | | Financial Expenses | RMB 10.36 million | -48.54% | Decrease in interest expenses | | R&D Investment | RMB 20.68 million | 73.07% | Increased R&D in wet and coated processes | | Net Cash Flow from Operating Activities | RMB 259.21 million | 159.25% | Increase in cash received from sales of goods | Regional Business Performance | Region | Operating Revenue (RMB) | YoY Change in Operating Revenue | Gross Margin | YoY Change in Gross Margin | | :--- | :--- | :--- | :--- | :--- | | Overseas | RMB 111.01 million | -13.82% | 44.35% | -17.77% | | Domestic | RMB 229.07 million | 24.84% | 45.24% | 8.30% | - During the reporting period, the company's lithium-ion battery separator new energy material capacity utilization rate was 75.35%, with a production volume of 275.02 million square meters[42] Analysis of Non-principal Business During the reporting period, non-principal business positively impacted total profit, with government grants under "Other Income" amounting to RMB 12.73 million, representing 15.56% of total profit, making it a significant influencing factor Non-principal Business Profit/Loss | Item | Amount (RMB) | Proportion of Total Profit | Reason for Formation | | :--- | :--- | :--- | :--- | | Other Income | RMB 12.73 million | 15.56% | Primarily government grants related to ordinary business activities | | Gains/Losses from Fair Value Changes | RMB 1.89 million | 2.30% | Primarily fair value changes of financial assets held for trading | | Non-operating Income | RMB 645421.18 | 0.79% | Primarily compensation income | Analysis of Assets and Liabilities As of the period-end, the company's total assets were RMB 5.43 billion, with fixed assets and construction in progress accounting for 34.98% and 28.38% respectively, indicating an ongoing capacity expansion phase; RMB 380 million of assets were restricted, primarily for loan collateral Period-end Major Asset Composition | Asset Item | Period-end Amount (RMB) | Proportion of Total Assets | | :--- | :--- | :--- | | Fixed Assets | RMB 1.90 billion | 34.98% | | Construction in Progress | RMB 1.54 billion | 28.38% | | Cash and Cash Equivalents | RMB 400.62 million | 7.38% | | Accounts Receivable | RMB 378.65 million | 6.97% | - As of the period-end, the company had RMB 380 million in restricted assets, including RMB 47.98 million in deposits, and RMB 244 million in fixed assets and RMB 88.97 million in intangible assets pledged for loans[48] Analysis of Investment Status During the reporting period, the company primarily undertook significant non-equity investments, focusing on the "Annual Production of 360 Million Sqm Wet Process Separator Project" and "Super Coating Plant Project," with a combined investment of RMB 206 million in the current period; concurrently, the company actively utilized idle raised funds and its own funds for entrusted wealth management, totaling RMB 660 million Major Non-equity Investment Project Progress | Project Name | Amount Invested in Current Period (RMB) | Cumulative Investment as of Period-end (RMB) | Project Progress | Cumulative Income as of Period-end (RMB) | | :--- | :--- | :--- | :--- | :--- | | Annual Production of 360 Million Sqm Lithium-ion Battery Wet Process Separator Project | RMB 93.08 million | RMB 2.01 billion | 84.70% | RMB 12.97 million | | Super Coating Plant Project | RMB 112.91 million | RMB 890.62 million | 25.46% | RMB 0.00 | - The company's 2019 non-public stock offering raised a total of RMB 859 million, with RMB 136 million invested in the current period, and a cumulative investment of RMB 716 million, primarily for the 'Annual Production of 1 billion Sqm Lithium-ion Battery Coated Separator Project'[53][54][55] - During the reporting period, the company used idle raised funds and its own funds for entrusted wealth management, with amounts of RMB 350 million and RMB 310 million, respectively[58] Risks and Countermeasures The company faces risks from intensified market competition, policy changes, customer dependence, exchange rate fluctuations, new capacity digestion challenges, and single business structure, which it plans to mitigate by expanding into mid-to-high-end markets, developing new applications, acquiring new clients, utilizing financial instruments, and diversifying products - Market and Client Risks: market competition intensification may lead to price declines; new energy vehicle subsidy policy changes may impact downstream demand; high dependence on major clients like LG Chem and CATL[67][68][69] - Operating and Financial Risks: new capacity (e.g., Changzhou wet process separator and super coating plant projects) may not be timely absorbed; relatively singular principal business and product structure; rising raw material (PP, PE) costs and exchange rate fluctuations may impact profitability[71][72][73][74] - Technology and Management Risks: technological advancements and product substitution in the lithium battery industry; business scale growth may lead to accounts receivable bad debt risk; core technology leakage and loss of key technical personnel[75][76][77] Significant Events This section details significant events including ongoing litigation, the equity incentive plan, major contracts, and other important corporate developments Litigation Matters During the reporting period, the company was involved in multiple lawsuits with Celgard, primarily concerning patent infringement, trade secrets, and unfair competition; some cases have been adjudicated, with Celgard's lawsuit against the company dismissed, while the company's lawsuits against Celgard are ongoing Major Litigation Matters | Basic Litigation Information | Amount Involved (RMB million) | Litigation Progress | Trial Outcome and Impact | | :--- | :--- | :--- | :--- | | Celgard sues company for patent infringement, etc | RMB 0.00 | Adjudicated | Celgard's lawsuit against the company was dismissed | | Company sues Celgard and others for unfair competition | RMB 5.50 million | Ongoing litigation | None yet | | Company sues Celgard and others for patent infringement | RMB 50.00 million | Adjudicated | Seizure and freezing of respondent's assets, limited to RMB 20 million | | Celgard sues company for alleged trade secret infringement, etc | RMB 0.00 | Ongoing litigation | None yet | Equity Incentive Plan The company implemented a restricted stock incentive plan in 2020; after adjustments, 3.253 million restricted shares were granted to 128 incentive recipients on May 27, 2020, with the shares listed on June 8, 2020 - The company implemented the 2020 restricted stock incentive plan, with 128 incentive recipients initially granted 3.253 million shares[87] - The grant date for this incentive plan was May 27, 2020, and the listing date for the granted restricted shares was June 8, 2020[87] Significant Contracts and Their Performance During the reporting period, the company provided significant guarantees to subsidiaries; as of the period-end, the total approved guarantee limit for subsidiaries was RMB 7.9 billion, with an actual guarantee balance of RMB 959 million, accounting for 33.33% of the company's net assets Summary of Guarantees to Subsidiaries | Item | Amount (RMB million) | | :--- | :--- | | Total Approved Guarantee Limit for Subsidiaries within Reporting Period | 200.00 | | Total Approved Guarantee Limit for Subsidiaries as of Period-end | 7900.00 | | Total Actual Guarantee Balance for Subsidiaries as of Period-end | 958.90 | | Proportion of Total Actual Guarantees to Company's Net Assets | 33.33% | Other Significant Matters During the reporting period, significant matters included signing a strategic cooperation agreement with Northvolt and initiating a plan to issue up to RMB 1 billion in convertible corporate bonds to unspecified investors, with the application accepted by SZSE on July 27 - The company signed a strategic cooperation agreement with European battery manufacturer Northvolt[105] - The company plans to issue convertible corporate bonds to unspecified investors, with a total fundraising amount not exceeding RMB 1 billion, and the application was accepted by the Shenzhen Stock Exchange on July 27, 2020, and remains under review as of the report disclosure date[105] Share Changes and Shareholder Information This section presents the company's share capital changes and provides detailed information on its shareholder structure and major shareholders Share Capital Changes During the reporting period, the company's total share capital significantly increased from 230 million shares to 449 million shares, primarily due to 17.005 million shares from convertible bond conversions, 3.253 million shares from restricted stock issuance, and 198 million shares from capital reserve capitalization Share Capital Changes | Item | Before This Change | Increase/Decrease in This Change | After This Change | | :--- | :--- | :--- | :--- | | Restricted Shares | 85,206,495 shares | +73,139,560 shares | 158,346,055 shares | | Unrestricted Shares | 145,200,686 shares | +145,048,302 shares | 290,248,988 shares | | Total Shares | 230,407,181 shares | +218,187,862 shares | 448,595,043 shares | - The primary reasons for the increase in total shares were: - Convertible bond conversion: +17.005 million shares - Restricted share issuance: +3.253 million shares - Capital reserve capitalization: +197.93 million shares[108] Shareholder Numbers and Shareholding As of the period-end, the company had 22,352 common shareholders, with controlling shareholder Chen Xiufeng as the largest at 20.33% ownership; the top ten shareholders include various investment funds and state-owned legal entities, in addition to the controlling shareholder's brother Top Five Shareholders' Shareholding | Shareholder Name | Shareholder Type | Shareholding Percentage | Number of Shares Held | | :--- | :--- | :--- | :--- | | Chen Xiufeng | Domestic Natural Person | 20.33% | 91,210,351 shares | | Shenzhen Yuanzhi Fuhai M&A Equity Investment Fund Partnership | Other | 3.48% | 15,600,802 shares | | Jiangsu Qiequan Yida Rongjing Equity M&A Investment Fund | Domestic Non-state-owned Legal Person | 3.23% | 14,480,145 shares | | Changzhou Dongfang Industrial Guidance Venture Capital Co., Ltd. | State-owned Legal Person | 3.16% | 14,160,141 shares | | Guangdong Hengkuo Investment Management Co., Ltd. | State-owned Legal Person | 3.14% | 14,080,140 shares | - Controlling shareholder Chen Xiufeng and sixth-largest shareholder Chen Liang are brothers; Shenzhen Suyuan Holding Group Co., Ltd. is the executive partner of Shenzhen Suyuan Investment Enterprise (Limited Partnership)[117] Convertible Corporate Bonds This section details the redemption and delisting of the company's convertible bonds, including conversion amounts and their impact on share capital Convertible Bond Redemption and Delisting During the reporting period, the company's 'Senior Convertible Bonds' were fully redeemed and delisted from the SZSE on March 30, 2020, after the share price triggered the conditional redemption clause, leading the company to exercise its redemption right - The company's stock price triggered the 'Senior Convertible Bonds' conditional redemption clause (closing price at or above 130% of the current conversion price for at least 15 of 30 consecutive trading days)[122] - The company decided to early redeem all outstanding 'Senior Convertible Bonds', which were delisted from the SZSE on March 30, 2020[122] - Prior to delisting, 'Senior Convertible Bonds' had accumulated conversions of RMB 453 million, totaling 17.012 million shares, representing 8.86% of the company's total share capital before conversion began[123] Directors, Supervisors, and Senior Management This section provides an overview of the shareholding changes and personnel movements among the company's directors, supervisors, and senior management Shareholding and Personnel Changes of Directors, Supervisors, and Senior Management During the reporting period, shareholdings of directors, supervisors, and senior management increased due to capital reserve capitalization, alongside several personnel changes including the resignation of a supervisor, a deputy general manager, and a deputy general manager concurrently serving as board secretary - Chairman Chen Xiufeng's period-end shareholding increased to 91,210,351 shares, and Vice Chairman and General Manager Chen Liang's to 13,883,105 shares, primarily due to the 2019 equity distribution implementation[127] Major Personnel Changes | Name | Position Held | Type | Date | Reason | | :--- | :--- | :--- | :--- | :--- | | Wang Dahong | Supervisor | Resignation | 2020年01月02日 | Personal reasons | | Zhang Sheng | Deputy General Manager | Resignation | 2020年01月16日 | Work adjustment reasons | | Zhou Guoxing | Deputy General Manager, Board Secretary | Resignation | 2020年02月10日 | Personal reasons | Financial Report This section presents the company's comprehensive financial statements, detailed notes, related party transactions, share-based payments, and post-balance sheet events Financial Statements This section provides the company's consolidated and parent company financial statements for H1 2020, showing total assets of RMB 5.43 billion, total liabilities of RMB 2.55 billion, operating revenue of RMB 341 million, and net profit of RMB 65.46 million as of June 30, 2020 Consolidated Balance Sheet Summary (2020-06-30) | Item | Amount (RMB) | | :--- | :--- | | Total Assets | RMB 5.43 billion | | Total Current Assets | RMB 1.65 billion | | Total Non-current Assets | RMB 3.78 billion | | Total Liabilities | RMB 2.55 billion | | Total Owners' Equity | RMB 2.88 billion | Consolidated Income Statement Summary (H1 2020) | Item | Amount (RMB) | | :--- | :--- | | Total Operating Revenue | RMB 340.91 million | | Total Operating Costs | RMB 273.27 million | | Total Profit | RMB 81.82 million | | Net Profit | RMB 65.46 million | | Net Profit Attributable to Owners of the Parent Company | RMB 71.36 million | Notes to Consolidated Financial Statements This section details key consolidated financial statement items, including RMB 401 million in cash and cash equivalents (RMB 47.98 million restricted), RMB 379 million in accounts receivable (RMB 32.05 million bad debt provision), RMB 1.541 billion in construction in progress for major projects, and share capital increasing from 230 million to 449 million shares due to conversions, issuance, and capitalization - Accounts receivable period-end balance was RMB 411 million, with bad debt provisions of RMB 32.05 million, resulting in a book value of RMB 379 million; accounts receivable within 1 year accounted for approximately 75%[250][251][256] - Construction in progress period-end book value was RMB 1.541 billion, primarily comprising the 'Annual Production of 360 million Sqm Wet Process Separator Project' (RMB 957 million) and the 'Annual Production of 1 billion Sqm Coated Separator Project' (RMB 515 million)[280] - During the reporting period, the company's share capital increased from 230.41 million shares to 448.60 million shares, primarily due to convertible bond conversions, restricted share issuance, and capital reserve capitalization[322] Related Parties and Related Party Transactions The company's joint controlling shareholders are brothers Chen Xiufeng and Chen Liang; a significant related party transaction involved Chen Xiufeng providing a RMB 300 million loan guarantee to the company, which has been fulfilled, and total key management remuneration was RMB 2.95 million - The company's joint controlling shareholders are brothers Chen Xiufeng (20.33% shareholding) and Chen Liang (3.09% shareholding)[379] - Total remuneration for key management personnel in the current period was RMB 2.95 million, an increase from RMB 2.19 million in the prior year[383] Share-based Payments The company implemented an equity-settled share-based payment plan during the reporting period, granting 3.253 million restricted shares, with a total expense of RMB 3.27 million recognized and correspondingly recorded in capital reserves - The total equity instruments granted by the company in the current period amounted to 3.253 million shares[385] - Total equity-settled share-based payment expense recognized in the current period was RMB 3.27 million, with the cumulative amount recognized in capital reserves also being RMB 3.27 million[386][387] Events After the Balance Sheet Date After the balance sheet date, the company advanced a significant financing plan, with its application to issue up to RMB 1 billion in convertible corporate bonds to unspecified investors accepted by SZSE on July 27, 2020, and currently under review - The company plans to issue convertible corporate bonds to unspecified investors, with a total fundraising amount not exceeding RMB 1 billion[391] - The issuance application was accepted by the Shenzhen Stock Exchange on July 27, 2020, and remains under review as of the report disclosure date[391] Documents for Reference This section lists all documents available for reference, including the signed semi-annual report, financial statements, and publicly disclosed announcements - Documents for reference include the semi-annual report signed by the chairman, financial statements bearing the signatures and seals of the company's head and chief accountant, and original copies of all publicly disclosed documents during the reporting period[417]