CORUN(SH:600478)2018-05-28 16:00Financial Performance - The company's total distributable profit for 2017 was -73,051,640.96 RMB, resulting in a cumulative undistributed profit of -154,380,289.07 RMB by the end of 2017, leading to no profit distribution for the year [5]. - The company's operating revenue for 2017 was ¥1,565,058,882.24, a decrease of 7.95% compared to ¥1,700,155,918.75 in 2016 [21]. - The net profit attributable to shareholders was ¥22,015,648.54, a significant recovery from a loss of ¥211,608,133.35 in 2016 [21]. - The cash flow from operating activities was negative at -¥24,382,431.89, an improvement from -¥192,633,497.54 in the previous year [21]. - The total assets increased by 28.90% to ¥6,738,428,966.08 from ¥5,227,667,030.54 in 2016 [21]. - The company's net assets attributable to shareholders rose by 58.99% to ¥2,078,214,456.79 compared to ¥1,307,129,988.06 in 2016 [21]. - Basic earnings per share improved to ¥0.016 from a loss of ¥0.152 in 2016 [22]. - The weighted average return on equity increased to 1.59%, up 16.78 percentage points from -15.19% in 2016 [22]. - The company's financial expenses rose by 239.52% to ¥86,574,796.96 due to increased financing scale and costs [24]. - The company reported a significant increase in prepayments, which rose by 1,124.11% to ¥144,839,558.77, reflecting increased technical service fees [23]. Audit and Compliance - The company received a standard unqualified audit report from Da Xin Accounting Firm, ensuring the accuracy and completeness of the financial report [4]. - The company's financial report is subject to the provisions of the Company Law and the Company’s Articles of Association due to the negative cumulative undistributed profits [5]. - The company has not engaged in any non-operational fund occupation by controlling shareholders or related parties during the reporting period [7]. - The company has not provided any guarantees in violation of regulatory decision-making procedures [7]. - The company has complied with the new accounting standards issued by the Ministry of Finance, which took effect on January 1, 2017 [90]. - The company did not report any significant internal control deficiencies during the reporting period [175]. - The internal control audit report issued by DaXin Accounting Firm confirmed the effectiveness of the company's financial reporting internal controls as of December 31, 2017 [175]. Market and Industry - The company is focused on the development of energy-saving and new energy vehicle components, with a complete industrial chain established in the hybrid power sector [32]. - The market for new energy vehicles in China saw a growth of over 50% in 2017, with production and sales reaching approximately 794,000 and 777,000 units respectively [34]. - The company aims to capitalize on the projected growth in the hybrid vehicle market, which is expected to reach 20% market share by 2025 according to national policies [33]. - The company has established partnerships with major automotive manufacturers, including Toyota and Geely, to enhance its market presence [32]. Risks and Challenges - The company has indicated that it faces various risks in its future development, which are detailed in the section discussing operational conditions [7]. - The company faces operational management risks due to rapid business expansion and the need for higher standards in talent and resource management [80]. - Increased global competition in the energy-saving and new energy vehicle sector poses a risk, prompting the company to invest more in research and maintain product competitiveness [80]. - Fluctuations in the prices of key raw materials, such as electrolytic nickel and alloy powder, could significantly impact production costs and profit margins [81]. - The company is vulnerable to policy risks, as changes in government support for the new energy vehicle industry could affect its operations [81]. Shareholder and Capital Structure - The company completed a non-public offering of 78,616,350 shares, raising a total of RMB 749,999,979, with a net amount of RMB 731,826,756.47 after expenses [46]. - The total number of ordinary shares increased from 1,391,070,330 to 1,469,686,680 after the issuance of new shares, representing a 5.65% increase [120]. - The controlling shareholder, Keli Yuan Group, increased its stake in the company by purchasing 14,993,192 shares for a total of approximately RMB 130.05 million, fulfilling its commitment to buy back shares worth between RMB 100 million and RMB 400 million [111]. - The company has not proposed any cash dividend distribution plans for the past three years, indicating a focus on reinvestment rather than shareholder returns [86]. Research and Development - Research and development expenses totaled ¥237,819,618.34, an increase of 65.96% compared to the previous year, accounting for 15.19% of operating revenue [59]. - The company has 532 domestic patents and 6 international patents, with its powertrain system technology reaching an internationally leading level [37]. - The company aims to enhance the research and development of HEV nickel-hydrogen battery packs and expand the market for plug-in hybrid buses, aiming to lower production costs and improve efficiency [78]. Governance and Management - The company has seen changes in its management team, with several new appointments including Liu Yi as the operations director and Zhang Wei as the strategic planning director [152]. - The company’s governance structure was reinforced with the appointment of new independent directors and management personnel [152]. - The company emphasizes value management to enhance core competitiveness and maintain good communication with investors and media [79]. - The company held one annual general meeting and four extraordinary general meetings during the reporting period, with a total of 349,262,112 shares (25.11%) represented at the first extraordinary meeting [163]. Environmental and Social Responsibility - The company reported a significant focus on environmental protection, achieving a reduction in energy consumption per unit of production, with electricity usage down by 2.25 kWh/m² and water usage down by 50.34 kg/m² for nickel foam production [116]. - The company actively respects and protects the rights of stakeholders, including employees and creditors, to promote sustainable development [162].