LEHUI International(SH:603076)2018-04-26 16:00Financial Performance - The company's operating revenue for 2017 was CNY 831.50 million, a decrease of 12.57% compared to CNY 951.01 million in 2016[21]. - Net profit attributable to shareholders was CNY 67.19 million, down 12.38% from CNY 76.68 million in the previous year[21]. - The net cash flow from operating activities decreased by 46.36% to CNY 72.99 million from CNY 136.08 million in 2016[21]. - The company's total assets increased by 22.63% to CNY 1,529.55 million compared to CNY 1,247.31 million at the end of 2016[21]. - The weighted average return on equity decreased by 7.34 percentage points to 15.43% from 22.77% in 2016[23]. - Basic earnings per share fell by 16.79% to CNY 1.14 from CNY 1.37 in 2016[22]. - The net profit attributable to shareholders after deducting non-recurring gains and losses was CNY 55.99 million, a decrease of 12.32% from CNY 63.86 million in 2016[21]. - The company reported a significant increase in net assets attributable to shareholders, rising by 105.65% to CNY 771.38 million from CNY 375.10 million in 2016[21]. Dividend Policy - The company plans to distribute a cash dividend of RMB 3 per 10 shares, totaling RMB 22.35 million based on a total share capital of 74.5 million shares as of December 31, 2017[5]. - In 2017, the net profit attributable to ordinary shareholders was RMB 67.19 million, with a dividend payout ratio of 33.27%[110]. - No profit distribution was made in 2016, and the cumulative undistributed profits will be shared by new and old shareholders[109]. - The company has not made any adjustments to its cash dividend policy during the reporting period[109]. - The company has committed to a three-year dividend return plan approved in the 2016 extraordinary general meeting[109]. - There were no share buybacks or capital reserve transfers during the reporting period[110]. - The company has a commitment from major shareholders to not transfer or manage their shares for 36 months post-IPO[112]. - The company’s major shareholders are subject to a lock-up period that extends if the stock price falls below the issue price[114]. - The company has established a policy of cash dividends for profitable years, ensuring shareholder returns[114]. - The remaining undistributed profits will be carried forward for future distribution among shareholders[109]. - The company plans to distribute cash dividends amounting to at least 30% of the average distributable profit over the past three years if there are no significant investment plans or cash expenditures[115]. Audit and Compliance - The company has reported a standard unqualified audit opinion from Zhonghua Certified Public Accountants[8]. - The company’s financial report is guaranteed to be true, accurate, and complete by its responsible personnel[8]. - The company has engaged Zhonghua Certified Public Accountants for its auditing services[19]. - The company has retained Zhonghua Accounting Firm for a five-year audit engagement at a fee of CNY 700,000[124]. - The company has not encountered any significant accounting errors during the reporting period[123]. - The company has not made any changes to its accounting policies that would significantly impact its financial statements[123]. - The company disclosed its internal control self-assessment report for the year 2017 on April 27, 2018, on the Shanghai Stock Exchange website[199]. - There were no significant deficiencies in internal control reported for the reporting period[199]. Market and Industry Analysis - The decline in revenue was primarily attributed to a sluggish domestic beer market, leading to reduced demand for equipment[23]. - The beer industry in China is expected to gradually recover, with a potential increase in demand for brewing equipment as large breweries consolidate production[70]. - The craft beer segment is growing rapidly at approximately 40%, indicating a shift towards high-end products in the beer market[71]. - The beverage industry showed a cumulative production of 18,051.2 million tons in 2017, with a year-on-year growth of 4.6%, although growth rates are slowing[73]. - The dairy product industry is projected to see significant growth, with liquid milk consumption expected to reach 39.56 kg per capita by 2024, driving demand for dairy equipment[75]. - The fermentation industry experienced an average annual growth rate of 18% during the 12th Five-Year Plan period, indicating significant growth potential driven by advancements in genetic technology and life sciences[76]. Strategic Investments and Global Expansion - The company operates in over 40 countries, focusing on the design, manufacturing, and installation of beer and beverage equipment[32]. - The company has established subsidiaries in India, the USA, and Mexico, and acquired German company Packtec, marking a significant step in its global strategy[41]. - The company plans to establish a new packaging machinery company in Nanjing, leveraging German technology to enhance its manufacturing capabilities[43]. - The company is investing in a craft beer service platform project to capitalize on the growing demand for craft beer in China[44]. - In 2017, the company made several strategic investments totaling $2 million in the USA, $5 million in Mexico, and $3 million in India to enhance its global market presence and service capabilities[77]. - The company acquired 100% of Packtec for €4 million to strengthen its strategic layout in the liquid food equipment market, with the acquisition completed in March 2018[79]. Environmental Responsibility - The company has established a robust environmental management system and has implemented energy-saving and emission-reduction technologies[141]. - The company has completed the ISO 14001 environmental certification audit in December 2017, demonstrating commitment to environmental management[147]. - The company has established a wastewater treatment station and multiple air pollution control devices, ensuring compliance with environmental regulations[146]. - In 2017, the total wastewater volume was 4,542 m³, with chemical oxygen demand at 50 mg/L and total nickel at 0.05 mg/L, adhering to the wastewater discharge standards[145]. - The company has not engaged in any environmental violations or illegal activities during the reporting period, adhering strictly to national environmental laws[147]. Shareholder Structure and Governance - The company completed its initial public offering (IPO) of 18.65 million shares at a price of RMB 19.71 per share, increasing total share capital from 55.85 million to 74.5 million shares[153]. - The largest shareholder, Ningbo Lehui Investment Holding Co., Ltd., holds 17,500,000 shares, representing 23.49% of the total shares[159]. - The company has a significant number of restricted shares, with 17,500,000 shares held by Ningbo Lehui Investment Holdings, which will become tradable in November 2020[162]. - The shareholding structure includes 49.44% held by domestic non-state-owned legal persons and 50.56% held by domestic natural persons[150]. - The company has a clear governance structure with defined roles for directors and senior management, ensuring effective oversight[171]. - The company maintains complete operational independence from its controlling shareholder, Ningbo Lehui Investment Holding Co., Ltd.[187]. Employee and Management Practices - The total number of employees in the parent company is 613, while the total number of employees in major subsidiaries is 387, resulting in a combined total of 1,000 employees[180]. - The professional composition includes 574 production personnel, 41 sales personnel, 166 technical personnel, 21 financial personnel, and 198 administrative personnel, totaling 1,000[180]. - The company has established a salary system that links employee income to the benefits they create for the company, implementing a floating assessment system[181]. - The training plan includes courses for new employees, management skills for grassroots supervisors, and specialized technical skills, aimed at enhancing employee capabilities[183]. - The company emphasizes the importance of talent cultivation and has developed a comprehensive training system tailored to different departments and positions[182].