CHINA HI-TECH(SH:600730)2018-04-25 16:00Financial Performance - In 2017, the company achieved a net profit attributable to shareholders of RMB 49,508,802.02, a decrease of 91.21% compared to RMB 563,502,629.80 in 2016[4]. - The company's operating revenue for 2017 was RMB 289,431,250.47, representing a significant increase of 399.64% from RMB 57,927,904.95 in 2016[19]. - The basic earnings per share for 2017 was RMB 0.08, down 91.67% from RMB 0.96 in 2016[20]. - The company reported a diluted earnings per share of RMB 0.08 for 2017, consistent with the basic earnings per share[20]. - The company reported a total non-recurring profit of ¥99,057,277.85 for the year, compared to ¥695,766,530.81 in 2016[25]. - The company reported a significant decrease in EBITDA, with a value of ¥175,711,052.23 in 2017, down 80.16% from ¥885,472,988.67 in 2016 due to high investment income from subsidiary disposals in the previous year[181]. - The company’s total revenue for 2017 was ¥289,431,250.47, with real estate revenue accounting for ¥254,908,115.33, representing 88.07% of total revenue[196]. Assets and Liabilities - The total assets of the company decreased by 19.84% to RMB 3,612,321,357.57 at the end of 2017, compared to RMB 4,506,628,488.69 at the end of 2016[19]. - The company’s net assets attributable to shareholders increased by 3.74% to RMB 2,019,682,003.48 at the end of 2017, compared to RMB 1,946,797,461.36 at the end of 2016[19]. - Cash and cash equivalents decreased by 52.27% to ¥948,410,557.63, down from ¥1,986,878,898.45[55]. - The company reported a 99.04% decrease in advance receipts to ¥2,533,417.20 from ¥263,467,718.53, due to project sales realization[56]. - The company’s total financing amount at the end of the reporting period is 1.339 billion RMB, with a weighted average interest rate of 5.70%[63]. - The debt-to-asset ratio improved to 43.44% in 2017 from 56.15% in 2016, a reduction of 12.71% due to the repayment of corporate bonds and bank loans[181]. Cash Flow - The net cash flow from operating activities for 2017 was negative RMB 248,516,970.18, a decline of 231.80% from RMB 188,552,470.63 in 2016[19]. - The net cash flow from investing activities fell by 157.29% to -¥305,268,849.87, mainly due to the previous year's recovery of investments from the disposal of Shenzhen Renrui[54]. - Financing activities generated a net cash flow of -¥510,170,570.45, a decline of 174.59% compared to the previous year, attributed to the issuance of ¥800 million in corporate bonds last year[54]. Dividends and Shareholder Returns - The company proposed a cash dividend of RMB 0.61 per 10 shares, totaling RMB 35,786,016.12 to be distributed to shareholders[4]. - In 2017, the company distributed cash dividends of 0.61 yuan per 10 shares, totaling approximately 35.79 million yuan, which represents 72.28% of the net profit attributable to ordinary shareholders[83]. Business Strategy and Expansion - The company has expanded its business into the education sector, indicating a strategic shift towards new growth areas[31]. - The company established new wholly-owned subsidiaries to expand into education services and content development, including Gaoke Jiangsu Education Development Co., Ltd. and Gaoke Guorong Jiangsu Education Technology Co., Ltd.[39]. - The company completed the acquisition of a 51% stake in Guangxi Yingteng Education Technology Co., Ltd., becoming its controlling shareholder, to enhance its presence in the education technology sector[39]. - The company is actively seeking new profit growth points while maintaining stable operations in traditional businesses, focusing on innovation and collaboration[40]. - The company aims to integrate high-quality educational resources through mergers, joint ventures, and collaborations, focusing on four business segments: education services, education technology, education content, and education asset management[77][78]. Risks and Challenges - The company faced significant risks as outlined in the report, which may impact future performance[6]. - The company faces risks including policy changes that may impact the education sector, intensified market competition, and challenges in integrating acquired businesses[79]. - The company reported a decline of 84.85% in trade revenue, amounting to 137.33 million yuan, as it shifted its strategic focus away from trade operations[44]. Governance and Compliance - The company is committed to strengthening its governance and internal controls to ensure compliance and healthy operations[78]. - The company has no significant discrepancies with the requirements set by the China Securities Regulatory Commission regarding corporate governance[163]. - The board is committed to ensuring compliance with regulatory requirements and maintaining high standards of corporate governance[142]. Employee and Management - The company’s management team consists of highly qualified professionals, with 63% holding master's degrees or higher, and 32% being international talents, supporting its strategic initiatives[38]. - The company has a diverse board of directors with backgrounds in education, finance, and technology, enhancing its strategic decision-making capabilities[142]. - The company has established a training management system to enhance employees' business knowledge and professional skills[153]. Legal Matters - The company faced a lawsuit regarding a housing pre-sale contract dispute, with the first instance ruling in favor of the company, dismissing all claims from the plaintiffs[94]. - The company is currently appealing against the judgments related to housing quality disputes[98]. - The company faced a total of 43 lawsuits related to securities false statements, with 38 cases claiming a total compensation of CNY 7,901,516.01[100]. Investments and Financial Products - The company has invested RMB 30 million in a joint online Chinese education platform with Pearson (Beijing) Cultural Development Co., Ltd. and Iumsol from South Korea, with RMB 15 million already paid[109]. - The total amount of guarantees provided by the company, including those to subsidiaries, is RMB 104,021,897.50, which accounts for 5.07% of the company's net assets[112]. - The company has allocated 168 million RMB to broker wealth management products, with an outstanding balance of 30 million RMB[114]. Market and Industry Trends - The real estate sector is undergoing regulatory changes, focusing on increasing supply and optimizing the supply structure, with a shift towards a rental housing market[31]. - The education industry is projected to grow significantly, with a total scale of around ¥2 trillion, driven by favorable policies and rising consumer demand[32].