AURORA(SH:600666)2017-03-07 16:00Financial Performance - The company's operating revenue for 2016 was CNY 1,478,636,982.78, an increase of 28.48% compared to CNY 1,150,836,949.17 in 2015[21]. - Net profit attributable to shareholders increased by 54.79% to CNY 465,318,760.16 from CNY 300,612,304.36 in the previous year[21]. - The net cash flow from operating activities decreased by 137.32% to -CNY 103,474,227.74, primarily due to delayed sales receipts[21]. - Total assets rose by 17.32% to CNY 6,835,704,644.78 from CNY 5,826,514,984.41 in 2015[21]. - The basic earnings per share increased by 22.00% to CNY 0.61 from CNY 0.50 in 2015[22]. - The weighted average return on equity decreased by 0.15 percentage points to 19.82% compared to 19.97% in the previous year[22]. - Significant sales growth in 3D glass bending machines and precision processing equipment contributed to the revenue increase[23]. - The company experienced a substantial increase in sales in the second half of the year, particularly in Q3 and Q4[26]. - The net assets attributable to shareholders increased by 21.98% to CNY 2,579,711,254.55 from CNY 2,114,795,410.93 in 2015[21]. - The company achieved significant revenue growth, driven by increased sales of grinding and polishing equipment, with a notable increase in the number of units sold[32]. Capital Management - The board proposed no profit distribution for the year 2016, instead opting for a capital reserve conversion to increase share capital by 60% (6 shares for every 10 shares held), resulting in an increase of 460,247,340 shares, raising total shares to 1,227,326,240[2]. - The company submitted a proposal for a non-public issuance of A-shares, which was approved by the board and shareholders, indicating plans for capital raising[6]. - The company is actively pursuing market expansion through the non-public issuance of A-shares to fund new projects, including the industrialization of multi-color nano zirconia ceramic components[11]. - The company has committed to addressing feedback from the China Securities Regulatory Commission regarding its non-public issuance application, demonstrating compliance and proactive engagement with regulatory bodies[6]. - The company plans to leverage capital platforms for refinancing and project investments to expand profit margins[45]. Risk Management - The company is facing potential risks related to its future development strategies, as outlined in the report's risk disclosure section[5]. - The company has established a comprehensive risk management framework to address potential challenges in its operational and strategic initiatives[5]. - The company recognizes the competitive risks arising from fluctuating industry demand and plans to expand its market space by developing potential customers and new application areas[85]. - The company faces operational management risks due to its expanding business scale and aims to improve its management processes and internal controls[85]. - The company emphasizes the importance of quality control management to maintain its brand image and mitigate financial risks associated with accounts receivable and bad debts[86]. Research and Development - The company is focusing on R&D investments to enhance product offerings, including the successful mass production of the 3D glass bending machine[32]. - The company has made significant advancements in the research and development of zirconia ceramic components, preparing for mass production[44]. - Research and development expenses increased by 43.49% to ¥75,966,316.37, indicating a strong commitment to innovation[49]. - The total R&D investment amounted to ¥75,966,316.37, representing 5.14% of total revenue, with a year-on-year increase of 43.49%[64]. - The company maintained a workforce of 281 R&D personnel, representing 16.5% of the total workforce, emphasizing its commitment to innovation[64]. Inventory and Accounts Receivable - Accounts receivable increased by ¥740,640,834.20, a growth of 182.75%, due to outstanding payments for 3D glass bending machines and polishing equipment[36]. - Inventory rose by ¥150,400,023.98, a 21.26% increase, primarily due to an increase in stock of finished goods and semi-finished products[36]. - The total accounts receivable at the end of the reporting period accounted for approximately 80% of the accounts receivable aging structure being within one year[87]. Corporate Governance - The company has received standard unqualified audit opinions from Da Hua Accounting Firm, ensuring the accuracy and completeness of the financial report[4]. - The company has established a rectification team to address issues raised by the China Securities Regulatory Commission regarding compliance and disclosure practices[111]. - The company has committed to ongoing training for its board and management to enhance compliance and governance standards[113]. - The board of directors held 10 meetings during the year, with all directors participating in at least 5 shareholder meetings[175]. - The company has implemented measures to ensure compliance with information disclosure regulations, enhancing transparency and communication with stakeholders[176]. Shareholder Relations - The company plans to communicate actively with shareholders, especially minority shareholders, regarding profit distribution proposals[101]. - The company aims to distribute at least 10% of the current year's distributable profits in cash annually, with a cumulative distribution of at least 30% of the average annual distributable profits over the last three years[101]. - The company will complete the distribution of dividends (or shares) within two months after the shareholders' meeting approves the profit distribution plan[102]. - The company has extended the lock-up period for share compensation obligations until they are fully performed[100]. Market Trends and Opportunities - The demand for 3D curved glass is rising due to the growth of smartphones and wearable devices, with the 3D glass bending machine market entering an upward phase[34]. - The sapphire substrate market is transitioning from 2-inch to 4-inch substrates, with over 80% replacement, leading to a supply shortage for 4-inch substrates in the future[33]. - The company anticipates significant growth in the application of sapphire materials in camera lenses, fingerprint recognition, and wearable devices[78]. - The overall market for sapphire crystal materials and processing equipment is expected to expand, driven by lower manufacturing costs and increased production capacity[78]. Employee Development and Social Responsibility - The company emphasizes talent development and management, enhancing the skills of its workforce through targeted training programs[41]. - The company actively participates in social responsibility initiatives, promoting energy conservation and environmental protection[132]. - The company encourages employees to engage in public welfare activities, enhancing their sense of social responsibility[131]. - The company has a clear strategy for employee development, providing training and communication channels to align personal growth with corporate objectives[130].