SHENGDA BIO-PHARM(SH:603079)2018-04-23 16:00Financial Performance - The company achieved a net profit of ¥57,171,587.11 in 2017, with a 10% statutory surplus reserve of ¥5,717,158.71, resulting in a total distributable profit of ¥171,752,857.90 for shareholders [5]. - The company reported an unallocated profit of ¥120,298,429.50 at the beginning of the year, contributing to the total distributable profit [5]. - The company's operating revenue for 2017 was CNY 508.56 million, an increase of 5.48% compared to CNY 482.15 million in 2016 [23]. - The net profit attributable to shareholders for 2017 was CNY 72.61 million, representing a growth of 19.16% from CNY 60.94 million in 2016 [23]. - The total assets at the end of 2017 reached CNY 985.98 million, a significant increase of 32.99% from CNY 741.37 million in 2016 [24]. - The net assets attributable to shareholders increased by 74.70% to CNY 768.71 million in 2017 from CNY 440.02 million in 2016 [24]. - The basic earnings per share for 2017 was CNY 1.09, up 6.86% from CNY 1.02 in 2016 [25]. - The cash flow from operating activities for 2017 was CNY 95.33 million, a 30.59% increase from CNY 73.00 million in 2016 [23]. - The company reported a non-recurring profit of CNY 8,894,078.40 in 2017, compared to CNY 8,419,577.73 in 2016, indicating a year-over-year increase of approximately 5.6% [30]. - The company achieved a total revenue of RMB 508.56 million in 2017, representing a year-on-year growth of 5.48% [50]. - The net profit attributable to shareholders reached RMB 72.61 million, marking a year-on-year increase of 19.16% [50]. Dividend Policy - A cash dividend of ¥2.75 per 10 shares (including tax) is proposed, along with a capital reserve conversion of 4 additional shares for every 10 shares held [5]. - The company has established a profit distribution policy, prioritizing cash dividends, with a minimum of 20% of distributable profits allocated for cash dividends annually [135]. - In 2017, the company proposed a cash dividend of 2.75 RMB per 10 shares and a capital reserve increase of 4 shares for every 10 shares held, subject to shareholder approval [140]. - The company distributed a total of 22 million RMB in cash dividends in 2017, representing 30.30% of the net profit attributable to ordinary shareholders [140]. - The company’s cash dividend distribution in 2016 was 60 million RMB, which accounted for 98.46% of the net profit attributable to ordinary shareholders [140]. - The company’s cash dividend distribution in 2015 was zero, indicating a potential reinvestment strategy during that year [140]. Market and Industry Position - The company’s main business remains the production, research, and sales of vitamins and biological preservatives, specifically biotin and folic acid, as well as natamycin and lactobacillus sakei [35]. - The vitamin industry is experiencing stable low-speed growth, with increasing demand from downstream sectors such as feed and food [41]. - The market for biotin and folic acid is expected to maintain steady growth, driven by emerging markets in food and beverage sectors [41]. - The company has established strong partnerships with major clients such as France's Andisou and Germany's Roman, enhancing its market position [43]. - The market share of the company's main product, biotin, has consistently ranked first globally, while its bio-preservatives, nisin and natamycin, also lead the market [44]. - The company has a global market share of approximately 30% in the biotin industry, being the largest producer and seller of biotin worldwide [125]. Risks and Compliance - The company faces significant risks including policy risk, market risk, operational risk, and price fluctuation risk, as detailed in the report [7]. - The company emphasizes the importance of investor risk awareness regarding forward-looking statements in the report [6]. - The company has not engaged in non-operational fund occupation by controlling shareholders or related parties [7]. - The company has not violated decision-making procedures for external guarantees [7]. - The company has committed to protecting investor interests and will compensate for losses caused by misleading information in the prospectus [148]. - The company has implemented strict environmental regulations, and any future tightening of these regulations may increase operational costs and impact profitability [129]. - The company is facing risks related to the volatility of raw material prices due to industry cycles, supply changes, and inflation [133]. Research and Development - The company has invested in R&D, establishing provincial-level technology centers and a professional team recognized under national talent programs [47]. - The company maintains a strong focus on R&D innovation, collaborating closely with universities and research institutions to enhance its technological capabilities [82]. - The company has several ongoing R&D projects, including new fermentation extraction technologies for folic acid and vitamin B5, currently in the small-scale testing phase [82]. - The company has implemented a project responsibility system for its R&D activities, incentivizing employees through bonuses linked to project outcomes [82]. - The company has received provincial-level scientific and technological achievement certificates for its new product developments, including the L-5-methyl tetrahydrofolate calcium project [83]. Operational Efficiency - The company employs a "sales-driven production" model, adjusting production plans based on sales forecasts, which enhances production efficiency [36]. - The company has improved production efficiency and reduced costs through process optimization and equipment upgrades, leading to increased output of biotin and folic acid [50]. - The company has established a comprehensive market forecasting and evaluation system to adapt to market changes effectively [36]. - The company has established a reserve supplier mechanism to ensure stable raw material supply amidst market fluctuations [95]. Shareholder Commitments - The company has committed to not transferring or entrusting the management of its shares for 36 months following the IPO [144]. - The company guarantees that there are no competitive activities from its controlled entities that could affect its business [146]. - The company will announce any share reduction plans three trading days in advance [145]. - The company has established a clear plan for shareholder reduction of holdings post-lock-up, ensuring compliance with relevant regulations [175]. - The company will publicly disclose reasons for any failure to adhere to share reduction commitments and apologize to shareholders [184].