JHM(SH:603078)2018-02-09 16:00Financial Performance - In 2017, the company achieved a net profit of ¥54,255,620.39, with a distributable profit of ¥48,830,058.35 after statutory surplus reserve allocation[6]. - The total distributable profit as of December 31, 2017, was ¥285,931,191.50, after deducting cash dividends of ¥18,000,000.00 paid during the year[6]. - The company's operating revenue for 2017 was CNY 354.28 million, an increase of 6.37% compared to CNY 333.06 million in 2016[24]. - Net profit attributable to shareholders decreased by 22.14% to CNY 53.68 million from CNY 68.94 million in the previous year[24]. - Basic earnings per share decreased by 37.71% to CNY 0.9543 from CNY 1.5321 in 2016[25]. - The weighted average return on equity dropped to 9.09%, a decrease of 10.50 percentage points from 19.59% in 2016[25]. - Gross margin decreased to 35.75%, down 6.58 percentage points compared to the previous year[63]. - The ultra-pure reagent business generated revenue of 236,765,527.36 yuan, up 5.70% year-on-year, with a gross margin of 33.71%, down 5.25 percentage points[63]. - The photoresist supporting reagent business reported revenue of 109,288,930.24 yuan, an increase of 5.68% year-on-year, with a gross margin of 40.16%, down 9.47 percentage points[63]. - The company reported a total of CNY 7.11 million in non-recurring gains for 2017, compared to CNY 5.83 million in 2016[31]. Dividend Policy - The company proposed a cash dividend of ¥3.00 per 10 shares, totaling ¥18,000,000.00, and a capital reserve conversion of 4 shares for every 10 shares, increasing the total share capital to 84,000,000 shares[6]. - A cash dividend of CNY 18,000,000.00 was distributed, representing 33.53% of the net profit attributable to shareholders for the year[137]. - The company implements an active profit distribution policy, prioritizing cash dividends, with a minimum cash distribution of 20% of distributable profits if no major investments are planned[130]. - In mature stages without major expenditures, the company aims for cash dividends to constitute at least 80% of the profit distribution[131]. - The company is committed to conducting at least one profit distribution annually, provided it has positive distributable profits[132]. Operational Model and Strategy - The operational model is based on "sales-driven production," aligning production with customer orders and contracts[34]. - The company adopts a "make-to-order" production model, aligning production plans with customer demand and inventory levels[36]. - The company aims to secure more orders from mainstream panel and semiconductor clients in 2018, focusing on product upgrades and new product development[56]. - The company aims to become a comprehensive supplier that provides integrated solutions based on customer production processes and technical requirements[94]. - The company has established a stable supplier relationship with downstream clients, which is crucial for maintaining high-quality product supply[42]. Market and Industry Position - The company is engaged in the production of ultra-pure reagents and photolithography supporting agents, essential for microelectronics and optoelectronics processes[13]. - The company operates in the semiconductor sector, focusing on integrated circuits and discrete devices, excluding LEDs[13]. - The wet electronic chemicals industry is closely tied to the rapid development of downstream sectors such as new energy, information communication, and consumer electronics, creating significant market opportunities[40]. - The global wet electronic chemicals market capacity was approximately RMB 20.8 billion in 2015, with an expected growth rate of 7% to 8% in the coming years[43]. - The company has successfully replaced imports in the high-end wet electronic chemicals sector, enhancing its competitive position[44]. Research and Development - The company primarily focuses on the R&D, production, and sales of ultra-pure reagents and related chemical products for the microelectronics industry[33]. - Research and development expenses increased by 8.50% to 16,129,958.57 yuan[59]. - The company emphasizes technological innovation and R&D to enhance its core competitiveness, focusing on four main directions: international technology trends, market-driven product development, forward-looking independent R&D, and industry-university-research cooperation[85][86]. - The company is investing in building a high-level R&D team and aims to establish a national-level technology center for wet electronic chemicals[117]. Risks and Challenges - The company has detailed potential industry and operational risks in the report, emphasizing the importance of investor awareness[9]. - The company faces risks related to fluctuations in the prices of key raw materials, which could impact production and operations[122]. - The company faces risks related to unpredictable future technology updates, particularly in the wet electronic chemicals sector, which requires continuous innovation to meet evolving downstream market demands[123]. - Environmental risks are present due to the production process, which, despite being low in pollution, still generates some waste, leading to increased costs for compliance with stricter regulations[126]. Corporate Governance and Shareholder Relations - The board of directors is responsible for proposing profit distribution plans while considering the company's operational needs and investor returns[133]. - The company emphasizes the protection of shareholder rights and actively engages with investors[164]. - The company has committed to social responsibility, including donations to the Red Cross Society[164]. - The company has not disclosed any major related party transactions during the reporting period[158]. Shareholder Structure - The company's stock code is 603078, and it is listed on the Shanghai Stock Exchange[20]. - The top shareholder, Yin Fuhua, holds 16,451,350 shares, representing 27.42% of the total shares[176]. - Jiangyin Jiehua Investment Co., Ltd. is the second-largest shareholder with 4,953,150 shares, accounting for 8.26%[176]. - The company has a total of 10 major shareholders, with the smallest among them, Chen Yongqin, holding 2,025,000 shares, or 3.38%[176]. - The shares held by the top ten shareholders are subject to lock-up agreements, with the earliest expiration in September 2020[178].