Dunhuang Seed(SH:600354)2015-03-19 16:00Financial Performance - In 2014, Gansu Dunhuang Seed Co., Ltd. reported a net profit of -255,650,386.95 RMB, with a net profit attributable to shareholders of -324,057,597.63 RMB[7]. - The company's accumulated undistributed profits at the end of the reporting period amounted to -850,981,571.04 RMB, leading to no profit distribution for the year[7]. - The company faced significant losses in 2014, with a parent company's loss of -451,577,971.61 RMB[7]. - In 2014, the company's operating revenue was CNY 1,255,860,454.79, a decrease of 33.01% compared to CNY 1,874,811,756.60 in 2013[25]. - The net profit attributable to shareholders was a loss of CNY 324,057,597.63 in 2014, compared to a profit of CNY 17,337,411.97 in 2013[25]. - The total assets decreased by 10.19% to CNY 3,686,225,621.04 at the end of 2014 from CNY 4,104,677,568.99 at the end of 2013[25]. - The company reported an asset impairment loss of CNY 223,000,000 in 2014, an increase of CNY 179,000,000 compared to the previous year[31]. - The basic earnings per share for 2014 was -CNY 0.724, compared to CNY 0.039 in 2013[25]. - The company reported a net profit of -107.76 million RMB for Hebei Dunhuang Seed Industry Co., Ltd. and -564.7 million RMB for Wuhan Dunhuang Seed Industry Co., Ltd.[65]. - The company’s subsidiary, Gansu Dunhuang Seed Industry Co., Ltd., reported a net profit of 226.50 million RMB from fruit and vegetable processing[65]. Operational Changes - The company adjusted its seed production area significantly in 2014 to manage inventory and reduce risks due to oversupply in the corn hybrid seed market[31]. - The oilseed business was halted due to continuous losses and unfavorable market conditions, leading to significant impairment provisions[31]. - The company decided to exit the oil processing business starting in 2015, resulting in an asset impairment loss of CNY 132 million and a total loss of CNY 191 million for the oil segment, with revenue decreasing by CNY 246 million, a decline of 62% compared to the previous year[34]. - The seed industry faced a significant reduction in production area from 133,600 acres to 105,000 acres, leading to a sales volume drop from 70.66 million kg to 53.39 million kg, a decrease of 24.4%[34]. - The total revenue for the seed segment, excluding the leading variety company, was CNY 255 million, down CNY 82 million, a decline of 35.8%, with an inventory impairment loss of CNY 41 million reported[34]. Research and Development - The company focused on enhancing its R&D capabilities and promoting its proprietary seed varieties to improve competitiveness[31]. - The total R&D expenses for the period amounted to 755.42 million RMB, representing 0.60% of the operating revenue and 0.59% of the net assets[44]. - The company established an academic expert workstation to enhance R&D capabilities and has initiated the approval process for over ten hybrid combinations, which are now in national and provincial testing[67]. - The company has received approval for five national and provincial technology innovation and production support projects, bolstering its research and breeding efforts[67]. Market Strategy - The strategic focus for 2014 was on "focusing on the main business and strengthening the seed industry" amidst challenging market conditions[31]. - The company aims to focus on strengthening its seed industry as a stable and rapidly growing pillar of its business[66]. - The company has established a growing marketing network and system to support its seed industry strategy[66]. - The company is actively pursuing mergers and acquisitions to strengthen its market position and diversify its product offerings[60]. - The company plans to invest a total of 1.3 billion RMB in the "Tomato Deep Processing Project," with 768 million RMB allocated for purchasing production rights and 500 million RMB for establishing a subsidiary with an annual processing capacity of 32,000 tons[60]. Financial Management - The company has maintained compliance with its commitments regarding the use of raised funds and has not violated any related agreements[88]. - The company has committed to a cash dividend policy and plans to establish a shareholder return plan for the next three years (2014-2016)[80]. - The company has not engaged in any major contracts outside of its normal operations during the reporting period[87]. - The company has no entrusted financial management or loan activities for the reporting period[56]. Governance and Compliance - The company has a clear governance structure with a dedicated compensation and evaluation committee responsible for determining the remuneration of directors and senior management[117]. - The board of directors operates in accordance with the Company Law and relevant regulations, with all decisions made within the authority defined by the company's articles of association[126]. - The company has implemented a strict insider information management system, ensuring no violations of insider trading occurred during the reporting period[127]. - The independent directors did not raise any objections to the board resolutions or other matters during the reporting period[130]. Future Outlook - Future outlook remains positive, with the company anticipating a robust demand for its products driven by market expansion and technological advancements[60]. - The company plans to enhance its capital structure by converting retained earnings into additional capital, aiming to stabilize financial performance[172]. - The company anticipates a recovery in profitability in 2015, projecting a 20% increase in revenue driven by new product launches[172]. - The company is focusing on expanding its market presence through strategic partnerships and collaborations in the agricultural sector[172].