Fujian Yuanli Active Carbon (300174)2024-04-15 13:13Revenue and Financial Performance - Revenue for 2023 reached 2.015 billion RMB, with revenue recognition identified as a key audit matter due to its significant impact on the company's financial performance[1] - Revenue for 2023 reached 2,015,453,297.86 yuan, a year-on-year increase of 3.30%[159] - Net profit attributable to shareholders of the listed company in 2023 was 237,145,288.03 yuan, a year-on-year increase of 5.65%[159] - Total assets at the end of 2023 were 3,951,679,262.57 yuan, an increase of 7.98% compared to the end of 2022[159] - Net cash flow from operating activities in 2023 was 270,640,269.93 yuan, a year-on-year increase of 6.00%[159] - Revenue in the fourth quarter of 2023 was 537,304,740.97 yuan, the highest among all quarters[163] - Net profit attributable to shareholders in the second quarter of 2023 was 68,473,240.77 yuan, the highest among all quarters[163] - Government subsidies recognized in 2023 amounted to 4,219,299.09 yuan[165] - Non-recurring gains and losses in 2023 totaled 418,113.38 yuan[165] - The weighted average return on net assets in 2023 was 7.92%, a decrease of 3.10 percentage points compared to 2022[159] - The company's equity attributable to shareholders at the end of 2023 was 3,110,908,734.36 yuan, an increase of 11.33% compared to the end of 2022[159] Cost Structure and Operating Costs - The cost of materials for sodium silicate products accounted for 69.37% of the total operating costs in 2023, a slight increase from 67.62% in 2022[6] - Energy costs for sodium silicate products decreased by 1.95% in 2023 compared to 2022, accounting for 18.11% of total operating costs[6] - The total cost for sodium silicate products in 2023 was 541.2 million RMB, showing a slight increase from 482.34 million RMB in 2022[6] - The cost of materials for silica gel products decreased by 2.32% in 2023, accounting for 52.31% of total operating costs[6] - Energy costs for silica gel products increased by 2.98% in 2023, representing 30.28% of total operating costs[6] - The total cost for silica gel products in 2023 was 110.14 million RMB, a decrease from 140.1 million RMB in 2022[6] - Material costs for activated carbon accounted for 50.35% of total operating costs, a year-on-year increase of 0.62%[40] - Energy costs for activated carbon decreased by 0.89% year-on-year, accounting for 20.29% of total operating costs[40] - Manufacturing expenses for activated carbon decreased by 0.72% year-on-year, accounting for 9.34% of total operating costs[40] Subsidiaries and Acquisitions - The company established a wholly-owned subsidiary, Yuanli New Energy Carbon Materials (Nanping) Co., Ltd., on January 4, 2023, which is now included in the consolidated financial statements[6] - The company acquired a factory and land use rights from a related party for RMB 48.98 million (excluding VAT) in March 2023[7] - The company's wholly-owned subsidiary acquired 100% equity of Fujian Nanping Yuanhe Water Glass Co., Ltd. for RMB 180 million in November 2023, making it a wholly-owned subsidiary[7] - The company's subsidiary, Fujian Nanping Yuanhe Water Glass Co., Ltd., became a wholly-owned subsidiary of San Yuan Circular Technology Co., Ltd. through an RMB 180 million equity transfer[90] - The company established a new subsidiary, Yuanli New Energy Carbon Materials (Nanping) Co., Ltd., on January 4, 2023, which is now included in the consolidated financial statements[135] R&D and Innovation - The company's R&D expenses increased by 10.64% year-on-year to RMB 71.91 million in 2023[13] - The number of R&D personnel decreased by 4.31% to 200 in 2023, accounting for 10.48% of total employees[12] - The company is developing new products such as high-adsorption bamboo-based physical granular carbon and hard carbon for sodium-ion battery anodes, with some projects already in mass production[11] - The company is researching carbon capture technology to reduce the carbon footprint of its products, with the project currently in the pilot stage[11] - The company completed the development of new processes for producing activated carbon from rice husks and improving the concentration and purity of phosphate wastewater, which are expected to enhance competitiveness[14] - The company is advancing the development and industrialization of new energy storage carbon materials such as supercapacitor activated carbon, biomass hard carbon, and porous carbon, aligning with national policies supporting the new energy industry[196] Shareholders and Equity - The total number of ordinary shareholders at the end of the reporting period is 12,820[31] - The largest shareholder, Wang Yan'an, holds 16.59% of the shares, totaling 60,685,476 shares[31] - Fujian San'an Group Co., Ltd. holds 6.02% of the shares, totaling 22,023,180 shares[31] - Quanzhou Shenghui Investment Co., Ltd., a wholly-owned subsidiary of Fujian San'an Group, holds 2.77% of the shares, totaling 10,134,000 shares[31] - Beijing Dingyun Technology Development Co., Ltd. holds 1.76% of the shares, totaling 6,429,100 shares[31] - The company's repurchase account holds 4,100,000 shares, accounting for 1.12% of the total shares[31] - The company's total equity incentive grants amounted to 1,719,197 shares, with 1,375,197 shares already vested and 404,000 shares remaining to be vested[43] - Guan Weiyuan, former director and general manager, retired on February 27, 2023, and sold 40,000 shares of vested equity incentives[43] - Zhou Xiaolan, former supervisor, resigned on September 15, 2023, and no longer holds any position in the company[43] - Xiang Jianhong, former independent director, resigned on November 27, 2023, after serving for six consecutive years[43] Corporate Governance and Leadership - The company held three temporary shareholders' meetings in 2023, with participation rates of 23.97%, 24.38%, and 24.56% respectively[25] - The company's board of directors appointed Xu Wenxian as the new General Manager on February 27, 2023, following the retirement of the previous General Manager[35] - Xie Lixin was elected as the Chairman of the Supervisory Committee on September 15, 2023[35] - Zhou Ying was elected as an independent director on November 27, 2023, following the departure of the previous independent director due to term limits[35] - The company's current chairman and general manager, Xu Wenxian, holds multiple executive positions across various subsidiaries and has extensive experience in finance and management[46] - Li Libin, director and vice president, oversees sales and operations in several subsidiaries, including Yuanli Yihaijiali (Fujian) and Yuanli New Energy Carbon Materials[46] - The company's independent directors, including Liang Liping, Zhou Ying, and Liu Junshao, bring diverse expertise in finance, taxation, and academia to the board[46] - Xie Lixin, chairman of the supervisory board, also serves as a supervisor in Yuanli New Energy and Yuanhe Water Glass[46] - Wang Limei, supervisor, holds multiple supervisory roles in subsidiaries such as Nanping Yuanli, Shanghai Xinjinhu, and Manzhouli Yuanli[46] - Chi Xinjie, CFO, manages financial operations across key subsidiaries, including Yuanli Yihaijiali (Fujian) and Yuanli New Energy Carbon Materials[46] Compensation and Incentives - Chairman and General Manager Xu Wenxian received a total pre-tax compensation of 1.4076 million yuan[53] - Director and Deputy General Manager Li Libin received a total pre-tax compensation of 1.1099 million yuan[53] - Independent directors Liang Liping and Liu Junshao each received a total pre-tax compensation of 50,000 yuan[53] - Independent director Zhou Ying received a total pre-tax compensation of 4,200 yuan[53] - Chairman of the Supervisory Board Xie Lixin received a total pre-tax compensation of 146,800 yuan[53] - Supervisor Wang Limei received a total pre-tax compensation of 113,600 yuan[53] - Supervisor Sun Daibin received a total pre-tax compensation of 111,200 yuan[53] - Deputy General Manager Yao Shilin received a total pre-tax compensation of 570,900 yuan[53] - CFO Chi Xinjie received a total pre-tax compensation of 252,900 yuan[53] - Board Secretary Luo Cong received a total pre-tax compensation of 291,500 yuan[53] - The company's total restricted shares held by senior management at the beginning of the period were 384,000, with 384,000 shares unlocked during the reporting period[88] Board and Committee Activities - The company held 7 board meetings in 2023, with the 16th meeting specifically reviewing the Q3 2023 report[57] - All directors attended 9 board meetings during the reporting period, with 7 in-person and 2 via teleconference[58] - The Audit Committee held 4 meetings in 2023, reviewing financial reports, internal controls, and audit plans[64] - The company's directors actively participated in decision-making and provided suggestions that were adopted by the company[60] - The Remuneration and Appraisal Committee approved the company's 2020 restricted stock incentive plan and adjusted grant prices[64] - The Strategic Committee reviewed and approved the acquisition of 100% equity in Fujian Nanping Yuanhe Water Glass Co., Ltd[66] - The company's independent directors fulfilled their duties effectively, providing independent opinions to protect shareholders' interests[60] - The Audit Committee reviewed the 2023 Q1, Q2, and Q3 financial reports and fund usage reports[64] - The Nomination Committee approved the appointment of Xu Wenxian as General Manager and Zhou Ying as independent director candidate[64][66] Employee and Labor Information - The company's total number of employees at the end of the reporting period is 1,907, with 1,521 production personnel, 54 sales personnel, 217 technical personnel, 23 financial personnel, and 92 administrative personnel[73] - The company's education level distribution includes 205 employees with a bachelor's degree or above and 1,702 employees with an associate degree or below[73] - The company's total labor outsourcing hours are 155,256 hours, with a total payment of 5,165,752.79 RMB[79] Dividends and Profit Distribution - The company plans to distribute a cash dividend of 0.50 RMB per share (tax included) for the year 2022, totaling 17,965,993 RMB[79] - The company's 2022 annual equity distribution was completed on July 10, 2023, with a cash dividend of 1 RMB per share (tax included), totaling 36,175,286 RMB[83] - The company has approved a profit distribution plan of 1 yuan cash dividend per 10 shares (tax included) and no stock dividend or capital reserve transfer[119] Environmental and Safety Compliance - The company is not listed as a key pollutant discharge unit by environmental protection authorities and has not received any environmental penalties during the reporting period[100] - The company has implemented a series of clean and energy-saving production technologies, contributing to both economic benefits and environmental goals[100] - No major safety production accidents occurred during the reporting period, with safety management being normalized across all production units and subsidiaries[101] Market and Industry Trends - The global activated carbon market is projected to reach $9.32 billion by 2025, with a compound annual growth rate (CAGR) of 8.89%, and the market size is expected to increase to 3.5 million tons[192] - China is the world's largest producer of wood-based activated carbon, but most domestic companies are small-scale with annual production ranging from hundreds to thousands of tons[192] - The company's sodium silicate products are primarily used in the production of precipitated silica, which accounts for nearly 80% of the total silica production capacity, with over 70% used in tire and rubber products[192] - The company extended its sodium silicate product line to silica gel production through the acquisition of Sanyuan Recycling in September 2021[192] - The company's main products, including wood-based activated carbon, are classified as encouraged industries under the "Industrial Structure Adjustment Guidance Catalog (2024)" issued by the National Development and Reform Commission[193] - The company's wood-based activated carbon business benefits from policies promoting deep processing of forest products and the development of energy-efficient and resource-saving technologies[193] - The "Industrial Structure Adjustment Guidance Catalog (2024)" lists traditional wood-based activated carbon production as outdated technology, which is expected to drive industry consolidation and increase the company's market share[195] Procurement and Supply Chain - The company's procurement of wood-based raw materials accounted for 15.81% of total procurement, with an average price of 1,143.98 in the first half of the year and 1,055.67 in the second half[199] - Sodium silicate raw material procurement accounted for 25.48% of total procurement, with an average price of 990.30 in the first half of the year and 950.55 in the second half[199] - Silica gel raw material procurement accounted for 4.29% of total procurement, with an average price of 590.20 in the first half of the year and 533.10 in the second half[199] - Energy procurement costs account for over 30% of the total production cost[199] Related Party Transactions - The top five customers accounted for 21.18% of total annual sales, with sales to related parties among the top five customers accounting for 8.26% of total annual sales[8] - The top five suppliers accounted for 25.56% of total annual procurement, with no procurement from related parties among the top five suppliers[9] - The company's subsidiary, Yuanhe Chemical, sold sodium silicate to EWS for RMB 165.6684 million, accounting for 27.78% of similar transactions[169] - Yuanhe Chemical provided steam to EWS for RMB 4.4696 million, accounting for 45.06% of similar transactions[169] - Yuanhe Chemical sold solid sodium silicate to Tongsheng Chemical for RMB 5.119 million, accounting for 0.86% of similar transactions[169] - Nanping Yuanli and Yuanhe Chemical purchased labor services from Jialian Chemical for RMB 5.3929 million, accounting for 98.66% of similar transactions[169] - The company's actual controller, Lu Yuanjian, had a debt balance of RMB 98 million at the end of the period, with an interest rate of 4.9%[172] Legal and Compliance - The company reported no significant litigation, arbitration, or bankruptcy-related matters during the reporting period[137][138] - The company confirmed no penalties or rectifications during the reporting period[139] - The internal control evaluation report was fully disclosed on April 16, 2024, covering 100% of the company's total assets and operating income[93] - No significant defects were identified in the financial report, with 0 major defects and 0 important defects reported[96] Strategic Initiatives and Future Plans - The company's main business continues to grow, driven by its environmental-first strategy and competitive advantages[118] - The company is developing new energy carbon-based materials to optimize its product structure and create new growth opportunities[118] - The company is implementing capacity expansion plans to convert technological and cost advantages into economies of scale[118] - The company is using flexible market, product, and sales strategies to strengthen market development and maintain its leading position[118] - The company is focusing on reducing financial leverage to enhance risk resistance and sustainable development capabilities[118] - The company's fundraising is primarily used for the construction of activated carbon production lines in the Nanping Industrial Park to expand capacity and optimize product structure[119] - The company plans to leverage its circular industrial park to innovate and improve energy efficiency, aiming to produce low-cost, high-quality silica gel products for both domestic and international markets[192] Product and Market Performance - Revenue from activated carbon reached 1.256 billion yuan, with a gross margin of 27.41%, a year-on-year decrease of 2.10%[36] - Revenue from silicate products was 754.2 million yuan, with a gross margin of 13.07%, a year-on-year decrease of 2.28%[36] - Domestic revenue in China was 1.729 billion yuan, with a gross margin of 20.36%, a year-on-year decrease of 3.30%[36] - Overseas revenue was 286.5 million yuan, with a gross margin of 32.78%, a year-on-year increase of 5.27%[36] - Sales of sodium silicate (solid) increased by 13.28% year-on-year, reaching 603.87 million yuan[36] - Inventory of sodium silicate decreased by 63.30% year-on-year due to increased sales[39] - The company fulfilled a long-term water glass supply contract with EWS, totaling 16.566 million yuan, with full payment received by January 2024[40] Financial Commitments and Guarantees - The company's approved guarantee limit for subsidiaries is RMB 800 million, with an actual guarantee balance of RMB 247.5 million[183] - The company did not engage in any significant asset or equity acquisitions, sales, or joint investments during the reporting period[171] - The company did not have any significant deposits, loans, credit, or other financial transactions with related financial companies[173][174] - The company did not have any significant entrusted cash asset management or entrusted loans during the reporting period[184][186] - The company did not have any significant non-recurring gains or losses during the reporting period[189] Industry and Policy Impact - The company's main products, including wood-based activated carbon, are classified as encouraged industries under the "Industrial Structure Adjustment Guidance Catalog (2024)" issued by the National Development and Reform Commission[193] - The company's wood-based activated carbon business