SOPO(SH:600746)2018-09-26 16:00Financial Performance - The company's operating revenue for the first half of 2018 was ¥270,409,801.74, a decrease of 33.33% compared to ¥405,597,156.64 in the same period last year[17]. - The net profit attributable to shareholders of the listed company was -¥2,700,070.35, representing a decline of 104.46% from ¥60,472,190.71 in the previous year[17]. - The net cash flow from operating activities was ¥27,995,771.77, down 39.32% from ¥46,135,902.31 in the same period last year[17]. - The total assets at the end of the reporting period were ¥599,892,944.76, a decrease of 7.63% from ¥649,419,877.02 at the end of the previous year[17]. - The net assets attributable to shareholders of the listed company decreased by 7.60% to ¥465,114,783.10 from ¥503,370,520.47 at the end of the previous year[17]. - The basic earnings per share for the first half of 2018 was -¥0.0088, a decline of 104.46% compared to ¥0.1973 in the same period last year[18]. - The weighted average return on net assets was -0.5445%, a decrease of 13.4311 percentage points from 12.8866% in the previous year[18]. - Operating revenue decreased by 33.33% to ¥270,409,801.74 from ¥405,597,156.64 due to a decline in sales volume and prices of main products[35]. - Management expenses decreased by 55.14% to ¥9,496,008.72 from ¥21,170,255.74, primarily due to depreciation related to the shutdown of the chlor-alkali facility in the previous year[35]. - Financial expenses increased by 229.73% to ¥763,109.38 from ¥231,437.23, mainly due to increased exchange losses[35]. - Investment cash flow turned negative at -¥187,576,010.29, a significant increase of 780.66% compared to -¥21,299,476.23, mainly due to increased purchases of bank wealth management products[35]. - The company’s cash and cash equivalents decreased by 89.80% to ¥26,275,002.50 from ¥257,628,114.97, primarily due to investments in bank wealth management products[37]. - Accounts receivable increased by 146.16% to ¥35,903,353.96 from ¥14,585,574.75, mainly due to payments received for a project from the previous year[39]. - The company anticipates continued losses in the upcoming reporting period due to rising raw material prices and declining sales volume and prices[40]. - Unappropriated profits decreased by 44.60% to ¥49,033,232.38 from ¥88,504,001.53, mainly due to cash dividends paid to shareholders and losses during the reporting period[39]. Production and Operations - The company primarily engages in the production and sales of ADC blowing agents, bleaching powder products, and XPE foam new materials, with over 40 specialized formulations developed[23]. - The production of ADC blowing agents has seen a significant decline in output due to environmental inspections, with production load adjustments leading to a notable decrease compared to the same period last year[30]. - The company has successfully developed an environmentally friendly composite new product for PVC wallpaper, which has received market recognition and is expected to achieve mass production[28]. - The XPE foam material has been successfully trial-produced and is currently undergoing market promotion and user development, indicating strong market potential[25]. - The company completed 55% of its annual production plan for high-value-added composite products in the first half of the year, despite overall production declines[30]. - The company has implemented a "low-cost" procurement strategy using the 1688 online bidding platform to reduce costs and ensure transparent procurement[31]. - The company has achieved a 100% control rate for accident hazards and a 100% timely rectification rate for safety hazards, with zero fatalities reported in the first half of the year[33]. - The company is adjusting its 40,000 Nm³/h air separation project to switch from steam to electric drive in response to environmental regulations, with the project undergoing re-filing in July[33]. - The company has obtained 5 authorized patents and has 6 additional patents under application, focusing on technological innovation in ADC blowing agent production[27]. - The company has established stable cooperative relationships with key quality customers, enhancing its marketing strategy amidst a challenging market environment[31]. Environmental Management - The company plans to enhance its environmental management and invest in cleaner production technologies as part of its strategic focus on green chemistry[42]. - The company has invested 2 million in environmental protection measures, including the upgrade of rainwater and wastewater separation systems[63]. - The wastewater treatment facility has a capacity of 3600 tons per day, ensuring compliance with local pollution discharge standards[64]. - The actual discharge of COD was 11.83 tons, significantly below the permitted limit of 360 tons, demonstrating effective pollution control[62]. - The company has implemented comprehensive measures to reduce emissions, including the installation of online monitoring systems for wastewater and air pollutants[70]. - The company has conducted emergency response drills for environmental incidents, receiving recognition from local authorities for its preparedness[69]. - The company has achieved a 100% compliance rate with environmental discharge standards, reflecting its commitment to sustainable operations[61]. - The company reported a significant reduction in pollutant emissions compared to the same period last year due to low production load in the first half of 2018[71]. - The bleaching powder production facility was fully shut down in April 2018, leading to the cancellation of the "bleaching powder tail gas discharge outlet"[72]. Shareholder and Corporate Governance - The company has not proposed any profit distribution plan or capital reserve transfer to increase share capital for the reporting period[5]. - The largest shareholder, Jiangsu Suope Group Co., Ltd., holds 167,954,942 shares, accounting for 54.81% of the total shares[84]. - The second-largest shareholder, Shanghai Juzhang Investment Management Co., Ltd., increased its holdings by 2,266,700 shares, totaling 4,860,372 shares or 1.59%[84]. - The company appointed a new general manager, Mark He, and a new secretary of the board, Fan Guolin, following the resignation of the previous general manager and secretary[76]. - The company has not disclosed any significant accounting errors that require retrospective restatement during the reporting period[75]. - The company has not experienced any changes in the controlling shareholder or actual controller during the reporting period[88]. - The company has not reported any new strategic investors or general corporations becoming among the top 10 shareholders[87]. Related Party Transactions - The total amount of related party transactions reached CNY 10,985,311.55, accounting for 95.31% of the market price for raw materials such as water and steam[52]. - The company reported related party transactions of CNY 4,689,656.28 for purchasing auxiliary materials, representing 29.66% of the market price[52]. - The company recognized CNY 44,070,341.76 in related party transactions for purchasing raw materials, which accounted for 53.56% of the market price[52]. - The company made a payment of CNY 17,307,780 for the transfer agreement of the hydrazine production line during the reporting period[54]. - The company reported a related party transaction amount of CNY 649,896.09 for the sale of by-products, which is 4.5% of the market price[53]. - The company recorded a related party transaction of CNY 38,461.54 for the sale of chemical products, representing 0.02% of the market price[53]. - The company had a beginning balance of CNY 1,677,075.88 and incurred a transaction amount of CNY 7,924,737.23 with related parties, resulting in an ending balance of CNY 1,566,050.42[57]. - The company reported a related party transaction amount of CNY 6,800,000.00 during the period, with a balance of CNY 6,754,027.62 at the end[57]. - The company engaged in related party transactions for service fees totaling CNY 1,019,302.70, which accounted for 9.32% of the market price[52]. - The company recorded a related party transaction of CNY 235,754.70 for cleaning services, representing 100% of the market price[52]. Accounting Policies and Financial Reporting - There were no changes in accounting policies, estimates, or methods compared to the previous accounting period[75]. - The total number of shares and capital structure remained unchanged during the reporting period[80]. - The financial statements are prepared based on the going concern principle, indicating no significant issues affecting the company's ability to continue operations for at least 12 months[108]. - The company adheres to the accounting standards set by the Ministry of Finance, ensuring the financial statements reflect a true and complete picture of its financial status[109]. - The accounting period for the company runs from January 1 to December 31 each year[110]. - The company uses RMB as its functional currency for accounting purposes[112]. - The company has a 12-month operating cycle for classifying assets and liabilities[111]. - The company has established policies for recognizing and measuring financial asset impairments, including criteria for significant declines in value[118]. - The company recognizes the difference between the book value of transferred financial assets and the consideration received as profit or loss for the current period[119]. - The company uses a combination of aging analysis and percentage of balance methods to assess bad debt provisions for receivables, with specific percentages ranging from 5.1% for receivables within one year to 50% for those over three years[124]. - The company applies straight-line depreciation for fixed assets, with varying useful lives and depreciation rates depending on the asset category[137]. - The company reviews the useful life and amortization method of intangible assets at the end of each fiscal year[142]. - The company recognizes investment losses and adjusts the carrying value of long-term equity investments based on the share of net losses and other comprehensive income from the investee[134]. - The company capitalizes borrowing costs directly attributable to the acquisition or production of qualifying assets, ceasing capitalization once the asset is ready for use[140]. - The company conducts impairment tests on long-term assets, including equity investments and fixed assets, at least annually or when there are indications of impairment[146]. - The company recognizes government grants as income when the conditions for receiving the grants are met and the grants are received or receivable[161]. Cash Flow and Liquidity - The company's cash and bank deposits decreased from CNY 223,977,972.41 at the beginning of the period to CNY 25,875,002.50 at the end of the period, representing a decline of approximately 88.4%[169]. - The total accounts receivable at the end of the period was CNY 11,635,209.34, with a bad debt provision of CNY 1,938,977.98, indicating a provision ratio of 16.66%[176]. - The total prepayments at the end of the period amounted to CNY 8,847,306.43, an increase from CNY 6,328,698.33 at the beginning of the period, reflecting a growth of approximately 40%[181]. - The company reported a significant increase in bank acceptance notes from CNY 14,585,574.75 at the beginning of the period to CNY 35,903,353.96 at the end, marking an increase of approximately 146.5%[172]. - The company has no deferred tax assets or liabilities that are applicable, indicating a straightforward tax situation[168]. - The company has not made any significant changes to its accounting policies or estimates during the reporting period, ensuring consistency in financial reporting[168]. - The company reported no significant tax incentives applicable during the period, maintaining a standard tax rate of 25% for corporate income tax[168].