WSBE(SH:600421)2018-04-27 16:00Financial Performance - The net profit attributable to shareholders for 2017 was -8,396,589.73 RMB, a decrease of 361.57% compared to the previous year[5]. - The operating revenue for 2017 was 28,767,309.13 RMB, representing a 2.09% increase from 2016[20]. - The net cash flow from operating activities was -2,649,978.61 RMB, indicating a worsening cash flow situation compared to -1,665,157.62 RMB in 2016[20]. - The total assets decreased by 15.46% to 53,948,082.19 RMB at the end of 2017, down from 63,809,868.88 RMB in 2016[20]. - The net assets attributable to shareholders decreased by 32.31% to 5,992,977.55 RMB at the end of 2017[20]. - The basic earnings per share for 2017 was -0.04 RMB, a decline of 300% from 0.02 RMB in 2016[20]. - The weighted average return on net assets was -180.36%, a decrease of 224.64 percentage points compared to 44.28% in 2016[20]. - The company’s main subsidiary, Shanghai Aobai, generated sales revenue of ¥28,767,309.13 for the year, which was a 2.09% increase from the previous year[31][33]. - The cost of sales increased by 15.88% to ¥27,509,851.00, indicating rising operational costs[33]. - Management expenses surged by 73.80% to ¥8,069,369.79, reflecting increased operational overheads[33]. - The company reported a significant increase in management expenses, rising by 73.80% to 8,069,369.79 due to provisions for employee severance compensation[39]. - The company reported a total operating revenue for the current period reached ¥28,767,309.13, an increase of 2.1% compared to ¥28,177,079.73 in the previous period[123]. - Total operating costs increased significantly to ¥37,307,886.91, up 20.5% from ¥30,956,425.06 in the previous period[123]. - Operating profit turned negative at -¥9,611,342.66, compared to a profit of ¥3,782,809.70 in the previous period[123]. - Net profit for the current period was -¥10,355,947.28, a decline from a profit of ¥3,128,016.88 in the previous period[124]. Cash Flow and Financing - The operating cash flow was positive in Q1 at ¥1,177,087.03 but turned negative in Q2 and Q4, ending the year with a net cash flow from operating activities of -¥2,649,978.61[22][33]. - The company’s investment activities generated a net cash flow of ¥1,588,476.59, a significant decrease of 84.49% compared to the previous year[33]. - The financing activities resulted in a net cash inflow of ¥3,010,000.00, reversing from a net outflow of -¥11,190,000.00 in the previous year, showing improved financing conditions[33]. - The company’s cash flow from investing activities decreased by 84.49% to 1,588,476.59, primarily due to the disposal of assets in the previous year[40]. - The net cash flow from financing activities was 3,010,000.00 RMB, a recovery from -11,190,000.00 RMB in the previous year, showing improved financing conditions[130]. - The ending cash and cash equivalents balance increased to 2,393,696.39 RMB from 445,198.41 RMB, demonstrating a positive liquidity position[130]. - The total cash inflow from operating activities was 129.69 RMB, a significant decrease from 2,067,578.34 RMB in the previous year, indicating a drop in sales revenue[132]. - The company incurred 2,193,031.38 RMB in other operating cash payments, a substantial increase from 619,117.64 RMB in the previous year, reflecting higher operational expenses[132]. Operational Changes and Strategic Decisions - The company decided to cease operations at Shanghai Aobai due to environmental pressures and a lack of new orders, indicating a strategic shift towards seeking new business opportunities[30]. - The company plans to seek financial support from major shareholders to maintain normal operations and is considering leasing or selling assets from the Shanghai Aobai facility[46]. - The company is actively exploring new business opportunities and potential acquisitions to normalize operations after the shutdown of its main subsidiary[46]. - The company plans to lease out the assets of the Shanghai Aobai plant and may consider selling these assets to realize their value[50]. - The company has committed to seeking financial support from its shareholders and actual controllers to maintain normal operations in 2018[50]. - The company has committed to developing new business or acquiring operational businesses to normalize its operations following the cessation of Aobai's production[151]. Regulatory and Compliance Issues - There is an ongoing investigation by the China Securities Regulatory Commission regarding potential violations of information disclosure laws[8]. - The company is under investigation by the China Securities Regulatory Commission (CSRC) for alleged false information disclosure, with potential administrative penalties pending[56]. - The company is facing risks of suspension of listing due to potential administrative penalties from the CSRC[55]. - The company has been under investigation by the China Securities Regulatory Commission for information disclosure violations since December 2014[85]. Shareholder and Governance Information - The total number of ordinary shareholders at the end of the reporting period was 11,104, an increase from 9,303 at the end of the previous month[67]. - Zhejiang Hengshun Investment Co., Ltd. held 38,136,775 shares, representing 19.50% of the total shares[69]. - Wuhan New Generation Technology Co., Ltd. held 34,234,261 shares, accounting for 17.50% of the total shares[69]. - Shanghai Tianji Investment Co., Ltd. increased its holdings by 16,387,767 shares, totaling 24,381,487 shares, which is 12.46% of the total[69]. - The top ten shareholders collectively hold a significant portion of the company's shares, with the largest shareholder holding nearly 20%[69]. - The company has not reported any restrictions on share reductions for major shareholders[76]. - The company has not experienced any changes in its controlling shareholder or actual controller during the reporting period[75]. - The board and supervisory committee's election process has been postponed to ensure continuity in governance[79]. - The company maintained strict compliance with corporate governance standards, ensuring fair treatment of all shareholders[93]. Employee and Management Information - The total remuneration for the board of directors and senior management during the reporting period amounted to 51.43 million RMB[79]. - The company has a total of 74 employees, with 8 in the parent company and 66 in major subsidiaries[87]. - The employee composition includes 25 production personnel, 5 sales personnel, 14 technical personnel, 7 financial personnel, and 23 administrative personnel[87]. - The company has implemented a structured salary system that favors key positions in research, management, and production[88]. - The company has established a training program that combines internal and external training to support employee growth and corporate development[89]. - The remuneration for directors and supervisors is determined by the shareholders' meeting, while senior management remuneration is decided by the board of directors based on performance[83]. Audit and Internal Control - The internal control self-assessment report was disclosed, indicating no significant deficiencies during the reporting period[100]. - The company engaged an external auditor to review its internal control assessment, which confirmed effective financial reporting controls[100]. - The management is responsible for assessing the company's ability to continue as a going concern and must disclose any related uncertainties[111]. - The audit identified fixed asset impairment as a key audit matter due to the significant judgment involved in assessing recoverable amounts[109]. Asset and Liability Management - The company’s total liabilities decreased significantly, with accounts payable dropping by 78.15% to 1,207,029.01 due to reduced procurement activities[42]. - The company’s accounts receivable decreased by 23.97% to 5,490,769.07, attributed to increased cash collection efforts following the shutdown of Shanghai Aobai[42]. - The total current assets increased significantly from ¥23,965.02 to ¥209,797.43, a growth of over 875%[120]. - The total liabilities decreased from ¥41,214,192.72 to ¥36,172,535.47, representing a decrease of approximately 12.5%[117]. - Owner's equity decreased from ¥22,595,676.16 to ¥17,775,546.72, a decline of around 21.5%[118]. - The total equity attributable to the parent company decreased to -419,023,771.79 RMB, indicating a deterioration in the company's financial health[134].