Financial Performance - For the year ended December 31, 2020, the company's revenue was approximately RMB 706,558,000, an increase of about 13.18% compared to 2019[16]. - The net profit for the year was approximately RMB 2,057,000, a significant recovery from a net loss of approximately RMB 48,213,000 in 2019[16]. - Basic and diluted earnings per share for the year were approximately RMB 0.0013, compared to a loss of approximately RMB 0.0923 per share in 2019[17]. - The company's revenue for the year ended December 31, 2020, was approximately RMB 706,558,000, an increase of about 13.18% compared to RMB 624,288,000 for the year ended December 31, 2019[27]. - Gross profit rose from approximately RMB 84,058,000 (gross margin of 13.46%) for the year ended December 31, 2019, to approximately RMB 99,499,000 (gross margin of 14.08%) for the year ended December 31, 2020[28]. - The company reported a total profit of approximately RMB 1,163,000 for the year ended December 31, 2020, compared to a loss of approximately RMB 47,670,000 in the previous year[37]. - The net loss attributable to the parent company decreased from approximately RMB 47,948,000 in 2019 to a net profit of approximately RMB 650,000 in 2020, resulting in a profit margin of 0.30% for 2020 compared to -7.68% in 2019[38]. - The increase in revenue was primarily due to higher sales prices and a significant rise in engineering income during the year[27]. Operational Strategy - The company plans to focus on the development strategy centered around "products + engineering + agricultural services + trade" in 2021[20]. - The company aims to enhance its overall operational capacity and competitive advantage through structural adjustments and concentrated efficiency[20]. - The company will actively expand its engineering business in southern Xinjiang and inland areas while developing agricultural service business nationwide[20]. - The company aims to strengthen its competitive advantage by focusing on four main business areas: products, engineering, agricultural services, and trade[44]. - The company has been focusing on digital agriculture and agricultural service business layouts[143]. Market and Industry Outlook - The company sees significant market opportunities due to the large market capacity and broad market prospects in the agricultural sector[19]. - The national plan includes the construction of 10 million mu of high-standard farmland and the development of 15 million mu of efficient water-saving irrigation in 2021[18]. - The company plans to construct 10 million mu of high-standard farmland and develop 15 million mu of efficient water-saving irrigation in 2021, aiming to enhance food security[42]. Financial Position and Ratios - As of December 31, 2020, the group's outstanding bank loans amounted to RMB 53,059,000, an increase from RMB 30,000,000 in 2019[45]. - The current ratio and quick ratio as of December 31, 2020, were approximately 2.09 and 0.93, respectively, showing a slight decrease from the previous year[47]. - The capital debt ratio as of December 31, 2020, was 9.31%, up from 5.28% in 2019, primarily due to increased bank loans[52]. - The company has not encountered any liquidity issues during the year ended December 31, 2020, and plans to utilize cash generated from operations for funding[52]. Corporate Governance - The board of directors recommended no final dividend for the year ending December 31, 2020, consistent with the previous year[65]. - The company has complied with corporate governance codes, although it previously did not meet the requirement for independent non-executive directors[69]. - The company has established three committees (Remuneration, Nomination, and Audit) to oversee various aspects of its operations[75]. - The board believes that having four independent non-executive directors provides a reasonable balance and safeguards the interests of the group and its shareholders[70]. - The company has adopted a standard code of conduct for securities trading, confirming compliance by all directors for the year ending December 31, 2020[94]. - The company has confirmed compliance with the relevant regulations under Chapter 14A of the Listing Rules regarding related party transactions[184]. Related Party Transactions - The company has entered into a total procurement agreement with its major shareholder Tianye Holdings, effective from January 1, 2021, to December 31, 2023, for the procurement of PVC resin, with prices determined based on market rates[179]. - The total sales agreement with Tianye Holdings, effective from January 1, 2021, to December 31, 2023, stipulates that Tianye Holdings will purchase products manufactured by the company, including drip irrigation belts and PVC/PE pipes, with prices based on market rates[179]. - The annual rent for the lease agreement with Tianye Holdings for factory premises is set at RMB 1,327,000, effective from July 1, 2020, to June 30, 2023[180]. - The company’s related party transactions have been reviewed and confirmed to be conducted on normal commercial terms[184]. Employee and Management Information - The company employed a total of 528 employees as of December 31, 2020, a slight decrease from 530 in 2019[57]. - The company incurred approximately RMB 8,381,000 in expenses related to employee retirement benefit plans for the year ended December 31, 2020[58]. - The company has a management team with extensive experience in finance and engineering, contributing to its operational capabilities[139]. - The company’s senior management compensation is determined based on operational performance and individual performance, with all senior management salaries remaining below RMB 1,000,000[188]. Shareholder Information - The company has a total of 519,521,560 shares issued, including domestic shares and H shares[161]. - Tianye Company holds 202,164,995 domestic shares, accounting for approximately 63.75% of the total issued domestic shares and 38.91% of the total issued share capital[165]. - Xinjiang Tianye (Group) Co., Ltd. holds 111,721,926 domestic shares, representing about 35.23% of the total issued domestic shares and 21.51% of the total issued share capital[165]. - Changmao Holdings Limited holds 14,407,000 H shares, which is approximately 7.12% of the total issued H shares and 2.77% of the total issued share capital[171]. - The company confirms that all directors and supervisors have signed service contracts with a fixed term of three years, which can be renewed upon shareholder approval[155]. Compliance and Risk Management - The board confirmed the effectiveness of the internal control system, with no significant deficiencies reported in risk management or compliance during the year[105]. - The group complied with all relevant laws and regulations with no significant violations or non-compliance reported for the year ended December 31, 2020[199]. - The company has faced various risks and uncertainties, which are discussed in detail in the management discussion and analysis section of the annual report[143].
天业节水(00840) - 2020 - 年度财报