XINLI FINANCE(SH:600318)2018-04-12 16:00Financial Performance - In 2017, the company reported a net profit attributable to shareholders of -308,722,141.22 CNY, a decrease of 289.80% compared to the previous year[5]. - The company's operating revenue for 2017 was 633,236,981.90 CNY, representing a decline of 21.95% from 811,302,964.12 CNY in 2016[18]. - Basic earnings per share for 2017 were -0.64 CNY, a decline of 288.24% compared to 0.34 CNY in 2016[19]. - The net profit for the year was CNY 15,599.52 million for 德润融资租赁, CNY 6,926.02 million for 德善小额贷款, and CNY 5,241.95 million for 德合典当[45]. - The company reported a significant decline in net profit attributable to shareholders, down 289.80% to 3.09 billion yuan due to goodwill impairment provisions[41]. - The total comprehensive income for the year was a loss of CNY 178,575,192.31, compared to a profit of CNY 297,235,333.85 in 2016[187]. Cash Flow and Assets - The net cash flow from operating activities increased by 11.15% to 439,958,355.13 CNY in 2017, compared to 395,828,207.97 CNY in 2016[18]. - The net cash flow from operating activities was negative in Q1 at CNY -243,028,895.86, but positive in Q2 at CNY 146,441,261.04[20]. - The net cash flow from investment activities decreased by 238.70% to -CNY 407,272,770.11, mainly due to investments in 中安金融资产管理股份有限公司[57]. - The total assets of the company at the end of 2017 were 6,347,004,830.55 CNY, an increase of 2.68% from 6,181,503,419.82 CNY in 2016[18]. - Cash and cash equivalents increased from CNY 392,688,853.41 to CNY 439,574,727.48, an increase of about 11.9%[180]. - Total liabilities increased from CNY 3,658,702,368.61 to CNY 4,032,372,455.51, representing a growth of about 10.2%[182]. Risk Management - The company faces various risks including market risk, credit risk, and liquidity risk, which are managed through various measures[6]. - The company has implemented strict credit risk management procedures, including due diligence and dynamic monitoring of debtors[72]. - The company is committed to enhancing risk management capabilities and improving asset quality to ensure stable development in the context of high-quality economic growth[68]. - The company has established a comprehensive risk management system utilizing advanced technology to improve risk control[70]. Subsidiaries and Business Segments - The company’s subsidiary, Dexin Guarantee, has been actively expanding its financing guarantee services, contributing to local economic development[26]. - The company’s small loan subsidiary, Dexin Small Loan, focuses on small and micro enterprises, with a registered capital of CNY 330 million[28]. - Dehe Pawn, a subsidiary, ranked first in multiple categories including "Integrity Management Advanced Enterprise" and "Top Ten Tax Contributors" in Anhui Province for 2016[31]. - Dezhong Financial, a subsidiary, operates a P2P online lending information intermediary service, launched in June 2014, and is the first state-owned internet finance enterprise in Anhui[35]. Regulatory and Compliance Issues - The company received an administrative regulatory measure from the China Securities Regulatory Commission for not following its bad debt provision policy[99]. - The company received an investigation notice from the China Securities Regulatory Commission on March 30, 2017, due to suspected violations of the Securities Law[100]. - The company was penalized by the Anhui Securities Regulatory Bureau on September 18, 2017, for inflating revenue and profits in the 2015 annual report[100]. - The company implemented training for its board, supervisors, and executives on relevant laws and regulations to enhance compliance awareness[101]. Shareholder and Equity Information - The company distributed a cash dividend of 1.00 RMB per 10 shares for the fiscal year 2016, totaling approximately 24,200,000 RMB (including tax)[75]. - The company’s major shareholder, Xinli Investment, plans to increase its stake in the company by no less than CNY 100 million and no more than CNY 200 million within six months from May 2, 2017[80]. - The total number of ordinary shares increased from 242,000,000 to 484,000,000 shares following a capital reserve conversion[124]. - The top ten shareholders held a total of 111,063,907 shares, representing 22.95% of the total shares[128]. Future Outlook and Strategic Plans - The company plans to innovate financial service products and improve service methods to expand its service areas for agriculture[68]. - The company is considering strategic acquisitions to enhance its service offerings, with a budget of 500 million CNY for potential deals[142]. - Future guidance indicates a focus on digital transformation, with an investment of 200 million CNY in digital platforms[143]. - The company plans to expand its market presence by entering three new regions in 2018, aiming for a 10% increase in market share[165]. Corporate Governance - The company conducted 19 board meetings during the year, with a high attendance rate among directors, ensuring effective governance[157]. - The company has established a comprehensive information disclosure system to ensure transparency and compliance with regulations[154]. - The board of directors consists of five members, including two independent directors, meeting legal requirements[153]. - The company has implemented internal control measures, with no significant deficiencies reported during the evaluation period[161].