兰石重装(603169) - 2024 Q2 - 季度财报

Definitions Company Profile and Key Financial Indicators Company Information This chapter provides basic corporate information for Lanzhou LS Heavy Equipment Co., Ltd. (referred to as 'LS Heavy Equipment'), including its Chinese and English names, legal representative, board secretary contact details, and registered and office addresses - The company's legal representative is Guo Fuyong[7] Key Accounting Data and Financial Indicators During the reporting period, the company's operating revenue increased by 12.80% year-on-year, but net profit attributable to shareholders significantly decreased by 39.11%, primarily due to changes in product sales structure and intense competition in the traditional energy equipment market leading to a decline in gross profit margin, while net cash flow from operating activities also decreased by 18.75% Key Accounting Data for H1 2024 | Indicator | Current Period (Jan-Jun) | Prior Period | YoY Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 2.492 billion yuan | 2.210 billion yuan | 12.80% | | Net Profit Attributable to Shareholders of Listed Company | 70 million yuan | 115 million yuan | -39.11% | | Net Profit Attributable to Parent Company Excluding Non-recurring Items | 58 million yuan | 96 million yuan | -39.06% | | Net Cash Flow from Operating Activities | 87 million yuan | 108 million yuan | -18.75% | | Basic Earnings Per Share (Yuan/share) | 0.0535 | 0.0879 | -39.14% | | Weighted Average Return on Net Assets (%) | 2.20% | 3.59% | Decreased by 1.39 percentage points | - The company stated that the 39.11% year-on-year decrease in net profit attributable to the parent company was primarily due to changes in product sales structure and intense competition in the traditional energy equipment market, leading to a decline in the comprehensive gross profit margin of sales products[9] Non-recurring Gains and Losses Items and Amounts During the reporting period, the company's total non-recurring gains and losses amounted to 11.5381 million yuan, primarily comprising government subsidies recognized in current profit or loss of 8.0853 million yuan and reversal of impairment provisions for receivables subject to separate impairment testing of 2.92 million yuan Non-recurring Gains and Losses Items for H1 2024 | Non-recurring Gains and Losses Item | Amount (Yuan) | | :--- | :--- | | Gains or Losses from Disposal of Non-current Assets | -188,969.03 | | Government Subsidies Recognized in Current Profit or Loss | 8,085,333.08 | | Reversal of Impairment Provisions for Receivables Subject to Separate Impairment Testing | 2,920,000.00 | | Net Other Non-operating Income and Expenses | 3,478,347.40 | | Total | 11,538,101.14 | Management Discussion and Analysis Industry and Main Business Overview The company specializes in the energy and chemical equipment industry, with businesses spanning equipment manufacturing, technical services, EPC general contracting, and new metal materials; traditional energy equipment demand benefited from energy security policies, while new energy equipment became a new growth point under the 'dual carbon' goals, with the company adopting a make-to-order customized business model and holding a leading market position and significant competitive advantages in various sub-segments Industry Overview Main Business, Products, and Business Model Product Market Position and Competitive Advantages - The company's business is divided into four major segments: equipment manufacturing, technical services, EPC general contracting, and new metal materials[12] - The company's main business covers the R&D, design, manufacturing, service, and EPC general contracting of traditional energy and chemical equipment (refining, coal chemical), new energy equipment (nuclear, hydrogen, photovoltaic thermal, energy storage), industrial intelligent equipment, and energy-saving and environmental protection equipment, as well as the R&D, manufacturing, and sales of new metal materials[18] - The company operates on a 'make-to-order' model, arranging design, procurement, and production based on customer orders, with product production cycles typically ranging from 3 to 12 months and an average comprehensive order execution cycle of 6 to 18 months[27][32] Performance Driving Factors Company performance growth is primarily driven by four factors: market, innovation, transformation, and management, with new orders increasing by 15.81% year-on-year, especially in EPC general contracting and international business, while innovation led to 475 million yuan in technology commercialization orders, and transformation efforts yielded positive results in new energy equipment and international market expansion New Orders in H1 2024 | Category | New Order Amount | YoY Growth | | :--- | :--- | :--- | | Total | 4.5 billion yuan | 15.81% | | EPC General Contracting | 1.592 billion yuan | 456% | | Industrial Intelligence | 307 million yuan | 17.61% | | International Business | 247 million yuan | 175% | - Innovation-driven: In the first half, 140 technological innovation projects were advanced, resulting in 28 technology commercialization achievements and 475 million yuan in commercialization orders, with R&D investment totaling 64.6388 million yuan[44] - Transformation-driven: The company has made positive progress in four directions: new energy (nuclear, hydrogen, energy storage), green intelligent manufacturing, integrated supply chain services, and internationalization[45][46] Analysis of Core Competencies The company's core competencies include leading manufacturing capabilities with a 'five bases + mobile factory' layout, proactive industrial布局 in new energy sectors like nuclear, hydrogen, and storage, strong technological innovation with 1,306 technical professionals and 379 patents, comprehensive professional qualifications, unique integrated supply chain advantages, and a strong brand built over 70 years - The company has completed its 'five bases + mobile factory' capacity layout in Lanzhou, Qingdao, Xinjiang, Jiayuguan, and Guangdong, with leading equipment manufacturing capabilities in China[48][49] - In the new energy sector, the company has initially completed a 'nuclear-hydrogen-photovoltaic-storage' full industry chain layout, with products covering upstream, midstream, and downstream nuclear energy, hydrogen 'production, storage, transportation, and utilization,' and key links in photovoltaic energy storage[50] - The company has 1,306 professional engineering technicians, holds a cumulative total of 379 patents, participated in the revision of 8 national standards during the reporting period, and obtained 9 authorized invention patents[51][52] - The company is the only domestic enterprise with full industry chain coverage, simultaneously possessing front-end design institutes, core equipment manufacturing capabilities, raw material supply capabilities, and integrated EPC services[55] Discussion and Analysis of Operations In H1 2024, the company achieved a total industrial output value of 3.18 billion yuan, up 40.77%, and operating revenue of 2.492 billion yuan, up 12.80%, but net profit decreased by 39.11% to 69.9117 million yuan, while securing new orders of approximately 4.5 billion yuan, an increase of 15.81% Operating Performance in H1 2024 | Indicator | Amount | YoY Growth | | :--- | :--- | :--- | | Total Industrial Output Value | 3.18 billion yuan | 40.77% | | Operating Revenue | 2.492 billion yuan | 12.80% | | Net Profit | 69.9117 million yuan | -39.11% | | New Orders | approx. 4.5 billion yuan | 15.81% | - In the first half, 28 technology commercialization achievements were made, with a commercialization value of 475 million yuan and total R&D investment of 64.6388 million yuan[60] - The company participated in establishing the CNNC Science and Technology Innovation Fund in collaboration with CNNC Group, aiming to strengthen its nuclear energy equipment business and accelerate its strategic transformation into new energy[61] Analysis of Key Operating Conditions This chapter analyzes the financial status during the reporting period, showing increases in operating costs, selling, general, and administrative expenses, and financial expenses, while R&D expenses decreased by 26.84%; monetary funds and construction in progress significantly increased, while notes receivable and taxes payable decreased, with total restricted assets valued at approximately 873 million yuan Main Business Analysis During the reporting period, the company's operating revenue increased by 12.80%, but operating costs grew faster at 18.17%; selling, general, and financial expenses all increased by over 16%, while R&D expenses decreased by 26.84%; other income significantly increased by 155.29%, mainly due to VAT input tax deduction policies Analysis of Major Financial Statement Item Changes | Item | Current Period Amount (Yuan) | Prior Period Amount (Yuan) | Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 2,492,440,954.05 | 2,209,707,216.92 | 12.80 | | Operating Cost | 2,165,594,669.80 | 1,832,595,413.64 | 18.17 | | Selling Expenses | 44,433,085.75 | 36,540,264.98 | 21.60 | | Administrative Expenses | 84,636,686.11 | 72,378,087.94 | 16.94 | | Financial Expenses | 75,035,332.84 | 64,185,062.96 | 16.90 | | R&D Expenses | 62,998,178.66 | 86,108,662.34 | -26.84 | | Other Income | 25,149,223.93 | 9,851,351.06 | 155.29 | Analysis of Assets and Liabilities As of the end of the reporting period, the company's total assets were 12.94 billion yuan, a 3.21% increase from the end of the previous year; monetary funds increased by 37.79% due to higher payments received and borrowings, and construction in progress surged by 313.69% due to increased investment in the intelligent superalloy production line project, while long-term borrowings increased by 54.02% due to new acquisition loans Major Changes in Assets and Liabilities | Item Name | Current Period End Amount (Yuan) | Prior Period End Amount (Yuan) | Change (%) | Primary Reason | | :--- | :--- | :--- | :--- | :--- | | Monetary Funds | 1,810,228,939.71 | 1,313,790,425.43 | 37.79 | Increased payments received and borrowings | | Notes Receivable | 76,615,992.27 | 217,194,306.77 | -64.72 | Notes matured and settled | | Construction in Progress | 33,383,056.89 | 8,069,523.45 | 313.69 | Increased investment in intelligent superalloy production line project | | Taxes Payable | 30,370,442.86 | 76,220,550.68 | -60.15 | Decreased VAT payable | | Long-term Borrowings | 1,624,732,000.00 | 1,054,900,000.00 | 54.02 | Increased acquisition loans | | Non-current Liabilities Due Within One Year | 336,693,681.39 | 497,059,917.49 | -32.26 | Repayment of long-term borrowings and long-term payables due within one year | - As of the end of the reporting period, the company's total book value of major restricted assets was 873 million yuan, primarily including monetary funds, notes receivable, fixed assets, and intangible assets used for bank guarantees, bill pledges, and loan collateral[68] Analysis of Major Holding and Joint Stock Companies During the reporting period, Qingdao Company, Heavy Industry Company, and Superalloy Company were the main contributors to operating revenue and net profit among the company's major holding subsidiaries, with Qingdao Company achieving 500.28 million yuan in operating revenue and 18.4714 million yuan in net profit, and Superalloy Company achieving 373.2115 million yuan in operating revenue and 13.349 million yuan in net profit, while Xinjiang Company incurred a small loss Operating Performance of Major Holding Subsidiaries (Unit: Million yuan) | Company Name | Total Assets at Period End | Net Assets at Period End | Operating Revenue | Net Profit | | :--- | :--- | :--- | :--- | :--- | | Qingdao Company | 1,104.1115 | 297.9000 | 500.2809 | 18.4714 | | Xinjiang Company | 753.4720 | 151.4073 | 62.8452 | -0.9526 | | Heavy Industry Company | 658.1523 | 187.3871 | 170.8301 | 13.2427 | | Heat Exchange Company | 890.2375 | 268.4128 | 226.7976 | 5.4962 | | Ruize Petrochemical | 341.3549 | 302.4195 | 24.7190 | 9.6570 | | Superalloy Company | 1,039.2978 | 618.9865 | 373.2115 | 13.3490 | Other Disclosures The company faces risks from macroeconomic fluctuations, intensified market competition, financial challenges, goodwill impairment, and operational management, with mitigation strategies including increased R&D, product value enhancement, optimized financing, accelerated cash turnover, strengthened accounts receivable collection, standardized integration of acquired entities, and continuous optimization of management systems - The company faces major risks including: - Macroeconomic fluctuation risk: A downturn in downstream industries may adversely affect the company's performance - Intensified market competition risk: In the long run, the company faces the risk of declining market share - Financial risk: Significant interest-bearing debt poses repayment risk; growing accounts receivable present bad debt risk - Goodwill impairment risk: As of the end of the reporting period, the company's goodwill was 263 million yuan, and if acquired entities fail to meet expected earnings, it could adversely impact profit or loss - Operational management risk: Expanding business scale and scope demand higher management capabilities[72][73][74][75][76] Corporate Governance Changes in Directors, Supervisors, and Senior Management During the reporting period, the company experienced several significant changes in its senior management, with Zhang Pulin and Wu Xianghui resigning as Chairman and Vice Chairman, respectively, Guo Fuyong elected as the new Chairman and resigning as General Manager, and Che Shengwen appointed as Director and General Manager, alongside the departure of an independent director and a deputy general manager Major Changes in Directors, Supervisors, and Senior Management in H1 2024 | Name | Position Before Change | Position/Status After Change | | :--- | :--- | :--- | | Zhang Pulin | Chairman | Resigned | | Wu Xianghui | Vice Chairman | Resigned | | Guo Fuyong | General Manager | Chairman | | Che Shengwen | Deputy General Manager | Director, General Manager | Environmental and Social Responsibility Environmental Information During the reporting period, the company prioritized environmental protection, ensuring all wastewater, exhaust gas, and noise monitoring results met emission standards, legally disposing of 45.31 tons of hazardous waste and 734.92 tons of general industrial solid waste, and implementing energy-saving modifications to the Lanzhou base's 5 furnace to reduce carbon emissions and improve thermal efficiency - The company conducted 4 environmental monitoring sessions and 1 radiation workplace environmental monitoring session, with all results meeting standards[82] - To reduce carbon emissions, the company carried out energy-saving modifications on its 5 furnace, resulting in flue gas emission temperatures below 150℃ and improved thermal efficiency after the upgrade[83] Social Responsibility The company actively fulfills its social responsibilities by dispatching 8 village-based cadres to participate in rural revitalization efforts, providing assistance through Party organization building, human settlement environment improvement, labor transfer, and developing characteristic industries, while also engaging in public welfare activities such as donating 500,000 yuan to the Jishishan disaster area and organizing employee blood donations and tree planting - The company dispatched 8 village-based cadres, facilitated the transfer of 218 laborers, and developed characteristic planting industries such as prickly ash and honeysuckle[84][85] - The company donated 500,000 yuan to the Jishishan disaster area, and its subsidiary CNNC Jiahua donated 100,000 yuan to the Jiayuguan City Education Development Foundation[85] Significant Matters Major Litigation and Arbitration Matters During the reporting period, the company was involved in multiple major litigation and arbitration cases, primarily concerning sales and engineering contract disputes with counterparties such as Qinghua Energy, Inner Mongolia Qinghua, Shandong Kerui, Panjin Pengchili, and Lannengtou (Gansu) Energy Chemical, actively pursuing outstanding payments through legal channels, with some cases entering enforcement or bankruptcy liquidation, and partial recoveries made Overview of Selected Major Litigation and Arbitration Matters (Unit: Million yuan) | Counterparty | Litigation Type | Amount Involved | Progress | | :--- | :--- | :--- | :--- | | Lannengtou (Gansu) Energy Chemical | Litigation | 656.9302 | Awaiting Judgment | | Panjin Pengchili Petrochemical | Litigation | 164.2781 | Counterparty guarantor entered bankruptcy liquidation, company has filed claims | | Shanghai Qirui Energy Technology | Litigation | 120.3645 | First-instance judgment supported the company for 108 million yuan, defendant has appealed | | Shandong Guangyue Chemical | Litigation | 84.8149 | Entered enforcement stage | | Shandong Shenchi Petrochemical | Litigation | 69.2819 | Counterparty repaying in installments as per settlement agreement | | Shijiazhuang Changyou Bioenergy | Litigation | 71.5574 | 0.1707 million yuan recovered through enforcement | Major Related Party Transactions During the reporting period, the company engaged in various daily related party transactions, with actual transactions totaling 259 million yuan in H1 2024 (157 million yuan in purchases, 102 million yuan in sales), remaining within the annual estimated limit of 1.125 billion yuan, and the EPC general contracting project for the controlling shareholder Lanzhou LS Group's green hydrogen production, storage, and utilization integrated pilot demonstration project has largely been completed and entered the joint commissioning phase - In H1 2024, actual related party transactions totaled 259 million yuan, including 157 million yuan in related party purchases and 102 million yuan in related party sales, not exceeding the initial annual estimated limit of 1.125 billion yuan[97] - The company undertook the EPC general contracting for the controlling shareholder Lanzhou LS Group's green hydrogen production, storage, and utilization integrated pilot demonstration project, which has now entered the equipment joint commissioning phase[98] Explanation of Progress in Use of Raised Funds The company raised 1.2999 billion yuan net from a private placement in 2021, with 1.059 billion yuan cumulatively invested as of the reporting period, representing an 81.47% investment progress; during the period, 176 million yuan (including interest) of surplus funds from the 'Xuandong Energy EPC Project' were reallocated to the new 'Intelligent Superalloy Production Line Project,' while some projects experienced delays due to owner-side reasons or process optimization Use of Raised Funds (As of End of Reporting Period) | Indicator | Amount (Million yuan) | | :--- | :--- | | Net Amount of Raised Funds | 1,299.9100 | | Total Cumulative Investment | 1,058.9818 | | Cumulative Investment Progress | 81.47% | | Amount Invested This Year | 17.1787 | | Total Amount with Changed Purpose | 246.3134 | - The company closed the 'Xuandong Energy 500,000 tons/year Hazardous Waste Coal Tar Upgrading EPC Project' and reallocated the surplus 175.5841 million yuan (including interest) to establish the new 'Intelligent Superalloy Production Line Project'[106] - The company temporarily used up to 210 million yuan of idle raised funds to supplement working capital; as of the end of the reporting period, 40 million yuan had been repaid, leaving a working capital supplement balance of 170 million yuan[109] Share Changes and Shareholder Information Shareholder Information During the reporting period, the company's total share capital and equity structure remained unchanged; as of the end of the period, controlling shareholder Lanzhou LS Group Co., Ltd. held 41.19% of shares, with 443 million shares pledged, and Lanzhou LS Group Lantuo Agricultural Equipment Co., Ltd. was a wholly-owned subsidiary of the controlling shareholder among the top ten shareholders Top Ten Shareholders' Shareholding | Shareholder Name | Number of Shares Held (Shares) | Percentage (%) | Share Status | | :--- | :--- | :--- | :--- | | Lanzhou LS Group Co., Ltd. | 538,053,898 | 41.19 | Pledged 443,000,000 | | Hunan Valin Xiangtan Iron and Steel Co., Ltd. | 78,377,508 | 6.00 | None | | Lanzhou LS Group Lantuo Agricultural Equipment Co., Ltd. | 64,008,298 | 4.90 | None | | CITIC Guoan Industrial Group Co., Ltd. | 17,000,000 | 1.30 | Pledged 12,830,159 | Preferred Shares Information Preferred Shares Information During the reporting period, the company had no preferred shares - This section's content is 'Not Applicable'[113] Bonds Information Bonds Information During the reporting period, the company had no corporate bonds, enterprise bonds, non-financial enterprise debt financing instruments, or convertible corporate bonds - This section's content is 'Not Applicable'[113] Financial Report Financial Statements This chapter includes the company's unaudited H1 2024 consolidated and parent company financial statements, specifically the balance sheet, income statement, cash flow statement, and statement of changes in owners' equity - As of June 30, 2024, the company's consolidated total assets were 12.94 billion yuan, total liabilities were 9.511 billion yuan, and owners' equity attributable to the parent company was 3.211 billion yuan[114][115][116] - From January to June 2024, the company achieved total operating revenue of 2.492 billion yuan, total profit of 70.33 million yuan, net profit of 68.94 million yuan, of which net profit attributable to parent company shareholders was 69.91 million yuan[119][120][121] Significant Accounting Policies and Estimates This chapter details the company's accounting policies and estimates for financial statement preparation, including a 12-month operating cycle, financial instrument classification and expected credit loss impairment, inventory valuation using the moving weighted average method with lower of cost or net realizable value, long-term equity investment accounting based on control, and revenue recognition when customers obtain control of goods or services, with EPC general contracting revenue recognized based on performance progress - The company defines a 12-month operating cycle and uses it as the standard for classifying assets and liabilities as current or non-current[139] - Revenue recognition: Revenue from product sales and design services is recognized at a point in time; revenue from EPC general contracting services is recognized over time based on the proportion of costs incurred to the total estimated costs (input method)[209][210] - Financial instrument impairment: Impairment accounting is performed and loss provisions are recognized for financial assets measured at amortized cost, contract assets, and similar items, based on expected credit losses[164]