天龙股份(603266) - 2017 Q4 - 年度财报

Definitions This section provides essential definitions of terms, legal entities, and reporting periods used throughout the report for clarity Definitions of Common Terms This chapter provides definitions of common terms used in the report, including company name, relevant laws and regulations, stock exchange, controlling shareholder, subsidiaries, and the reporting period, to aid reader comprehension - The Company, Company, Tianlong Co., Ltd. refers to Ningbo Tianlong Electronics Co., Ltd[12] - Antai Holdings refers to Zhejiang Antai Holdings Group Co., Ltd., the Company's initiator and controlling shareholder[12] - Reporting Period refers to January-December 2017[12] Company Profile and Key Financial Indicators This section outlines the company's fundamental information, contact details, stock specifics, and a summary of its key financial performance over the past three years Basic Company Information Discloses basic company information including Chinese name, abbreviation, foreign name, and legal representative - Company's Chinese name: Ningbo Tianlong Electronics Co., Ltd., abbreviation: Tianlong Co., Ltd[14] - Legal Representative: Hu Jianli[14] Contact Persons and Information Provides names, contact addresses, phone numbers, faxes, and email addresses for the Board Secretary and Securities Affairs Representative - Board Secretary: Yu Jianfeng, Contact Number: 0574-58999899[15] - Securities Affairs Representative: Zhu Younan, Email: tlinfo@ptianlong.com[15] Company Registration and Office Information Introduces the company's registered address, office address, postal code, and website - Company's registered and office address: Building 3, No. 116 Batang Road, Ningbo Hangzhou Bay New Zone, Postal Code 315336[16] - Company Website: http://www.ptianlong.com[16](index=16&type=chunk) Information Disclosure Channels Lists the company's designated information disclosure media and website, and the location for annual report availability - Designated information disclosure media include China Securities Journal, Shanghai Securities News, Securities Times, Securities Daily[17] - Designated website for annual report publication is the SSE website http://www.sse.com.cn/[17](index=17&type=chunk) Stock Information Provides information on the company's stock type, listing exchange, abbreviation, and code - Company's stock is A-shares, listed on the Shanghai Stock Exchange, stock abbreviation: Tianlong Co., Ltd., stock code: 603266[18] Audit and Sponsor Institution Information Discloses information on the accounting firm engaged by the company and the sponsor institution fulfilling continuous supervision duties during the reporting period - The company engaged Tianjian Certified Public Accountants (Special General Partnership) for auditing[19] - The sponsor institution fulfilling continuous supervision duties during the reporting period was UBS Securities Co., Ltd[19] Key Financial Data and Indicators for the Past Three Years Summarizes the company's key accounting data and financial indicators for the past three years, explaining reasons for changes in some indicators Key Accounting Data for the Past Three Years (Unit: Yuan) | Main Accounting Data | 2017 | 2016 | Change from Prior Period (%) | 2015 | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue | 856,933,382.27 | 805,800,846.20 | 6.35 | 703,313,116.54 | | Net Profit Attributable to Shareholders of Listed Company | 78,477,167.94 | 81,057,609.82 | -3.18 | 67,236,497.93 | | Net Cash Flow from Operating Activities | 100,993,010.18 | 51,176,870.97 | 97.34 | 79,615,283.24 | | Net Assets Attributable to Shareholders of Listed Company | 806,291,676.72 | 432,217,969.63 | 86.55 | 351,057,430.57 | | Total Assets | 1,031,252,203.06 | 732,023,824.12 | 40.88 | 611,428,914.00 | Key Financial Indicators for the Past Three Years | Main Financial Indicators | 2017 | 2016 | Change from Prior Period (%) | 2015 | | :--- | :--- | :--- | :--- | :--- | | Basic Earnings Per Share (Yuan/Share) | 0.80 | 1.08 | -25.93 | 0.90 | | Basic Earnings Per Share Excluding Non-Recurring Gains and Losses (Yuan/Share) | 0.67 | 1.04 | -35.58 | 0.85 | | Weighted Average Return on Net Assets (%) | 10.45 | 20.70 | -10.25 percentage points | 21.18 | - Net cash flow from operating activities increased by 97.34% year-on-year, primarily due to better control over accounts receivable and inventory in 2017[23] - Net assets attributable to shareholders of the listed company and total assets significantly increased year-on-year, mainly due to the company's initial public offering of 25 million shares and annual profit in 2017[23] - Basic earnings per share excluding non-recurring gains and losses decreased by 35.58% year-on-year, primarily impacted by rising material prices, exchange rates, and increased fixed asset investment, with year-end EPS calculated based on 100 million shares compared to 75 million shares in the prior period[24] Explanation of Differences in Accounting Standards between Domestic and Overseas The company did not disclose differences in net profit and net assets attributable to shareholders of the listed company in financial reports prepared under both International Accounting Standards or overseas accounting standards and Chinese Accounting Standards Key Quarterly Financial Data for 2017 Provides the company's quarterly operating revenue, net profit attributable to shareholders of the listed company, net profit after deducting non-recurring gains and losses, and net cash flow from operating activities for 2017 Key Quarterly Financial Data for 2017 (Unit: Yuan) | Indicator | Q1 (Jan-Mar) | Q2 (Apr-Jun) | Q3 (Jul-Sep) | Q4 (Oct-Dec) | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue | 217,036,238.01 | 192,525,377.54 | 212,934,385.55 | 234,437,381.17 | | Net Profit Attributable to Shareholders of Listed Company | 20,874,981.11 | 24,768,532.39 | 18,640,514.91 | 14,193,139.53 | | Net Cash Flow from Operating Activities | 69,205.81 | 40,664,080.57 | 43,657,420.70 | 16,602,303.10 | Analysis of Non-Recurring Gains and Losses Details the company's non-recurring gains and losses items and amounts for the past three years, with a total of 12,393,040.81 yuan in 2017 Non-Recurring Gains and Losses Items and Amounts (Unit: Yuan) | Non-Recurring Gains and Losses Item | 2017 Amount | 2016 Amount | 2015 Amount | | :--- | :--- | :--- | :--- | | Gains and Losses from Disposal of Non-Current Assets | 496,147.26 | -107,355.80 | -1,685,451.50 | | Government Subsidies Included in Current Profit and Loss (Excluding those closely related to the company's normal operations) | 8,653,947.78 | 2,744,170.15 | 6,077,203.14 | | Gains and Losses from Entrusted Investment or Asset Management | 4,841,094.52 | - | - | | Total | 12,393,040.81 | 2,765,641.66 | 3,604,310.60 | - Total non-recurring gains and losses in 2017 amounted to 12,393,040.81 yuan, primarily comprising government subsidies and wealth management income from raised funds[28][29] Fair Value Measurement Items The company had no items measured at fair value during the reporting period Business Overview This section describes the company's core business, operating model, industry landscape, and analyzes its key competitive advantages Main Business, Operating Model, and Industry Overview The company primarily engages in precision mold development and manufacturing, and precision plastic parts production and sales, serving automotive, electrical appliance, and consumer electronics sectors. Its operating model is 'production based on sales,' with procurement influenced by upstream raw material price fluctuations. The company holds a high competitive position in plastic parts manufacturing, with mold development capability as a core competency - The company's main business is precision mold development and manufacturing, and precision plastic parts production and sales, with products categorized into automotive, electrical appliance, and consumer electronics[32] - The operating model is 'production based on sales,' and prices of main raw material plastic pellets are significantly affected by crude oil price fluctuations[32][33] - The company is in a high competitive tier within the plastic parts manufacturing industry, with core competitiveness in product synchronous design and precision mold development capabilities[38] - Automotive production and sales growth slowed in 2017, but China's automotive industry still has significant development potential; the electrical appliance industry maintained stable growth[36][37] Significant Changes in Major Assets No significant changes occurred in the company's major assets during the reporting period Analysis of Core Competencies The company's core competencies include technological and R&D advantages (22 invention patents, 73 utility model patents), mold development, design, and manufacturing expertise, nationwide regional layout, an experienced management team, a rich product line, and stable high-quality customer resources - The company holds 22 invention patents and 73 utility model patents, mastering key technologies such as mold flow analysis, CAD/CAM/CAE design, and precision injection molding[41] - The company possesses strong mold development, design, and manufacturing capabilities, directly participating in customer product synchronous development[41] - The company has established a nationwide strategic layout with production bases in the Yangtze River Delta, Pearl River Delta, Beijing-Tianjin, Central China, Southwest, and Northeast regions[42] - The company's product lines cover three major areas: automotive, electrical appliances, and consumer electronics, with exploration into medical and aerospace fields, effectively diversifying operational risks[43] Management Discussion and Analysis This section reviews the company's operational performance in 2017, analyzes key financial data, and discusses future development strategies, operating plans, and potential risks 2017 Business Overview and Key Initiatives In 2017, the company achieved operating revenue of 857 million yuan, a 6.35% year-on-year increase, but net profit attributable to the parent company decreased by 3.18%, mainly due to rising material prices, exchange rates, and increased fixed asset investment. During the reporting period, the company steadily advanced fundraising projects, strengthened production management, technological innovation, and management mechanisms, while focusing on shareholder returns Key Operating Performance in 2017 | Indicator | Amount (10,000 Yuan) | Year-on-Year Change (%) | | :--- | :--- | :--- | | Operating Revenue | 85,693.34 | 6.35 | | Net Profit Attributable to Shareholders of Listed Company | 7,847.72 | -3.18 | - The company successfully listed on January 10, 2017, with fundraising projects steadily progressing; by the end of the reporting period, 123.0493 million yuan of raised funds had been invested[45] - The company rigorously managed production, focusing on cost control, expense reduction, and energy saving, while strengthening technical management, holding 22 invention patents and 73 utility model patents by the end of 2017[45][46] - The company completed its 2016 profit distribution, paying a cash dividend of 2.5 yuan (tax inclusive) per 10 shares, with cash dividends accounting for 30.84% of net profit attributable to the parent company[47] Analysis of Key Operating Data During the reporting period, the company's operating revenue increased by 6.35% year-on-year, but net profit decreased by 3.18%. Growth in automotive plastic parts and mold sales revenue was the main driver. Gross profit margin declined due to rising raw material prices. Net cash flow from operating activities surged by 97.34%, while investment cash flow saw a significant outflow due to wealth management product purchases, and financing cash flow experienced a substantial inflow from IPO proceeds (I) Main Business Revenue and Cost Analysis The company's main business revenue increased by 6.35% year-on-year, primarily driven by automotive parts business expansion and mold sales growth. Operating costs increased by 10.41% with revenue. Gross profit margins across product lines generally declined, with mold gross profit margin decreasing by 10.39 percentage points Analysis of Changes in Income Statement and Cash Flow Statement Items (Unit: Yuan) | Item | Current Period Amount | Prior Period Amount | Change Ratio (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 856,933,382.27 | 805,800,846.20 | 6.35 | | Operating Cost | 621,355,491.35 | 562,785,957.76 | 10.41 | | Financial Expenses | 2,953,292.77 | 1,837,820.84 | 60.70 | | Net Cash Flow from Operating Activities | 100,993,010.18 | 51,176,870.97 | 97.34 | | Net Cash Flow from Investing Activities | -246,935,612.43 | -53,557,543.70 | -361.07 | | Net Cash Flow from Financing Activities | 207,548,504.16 | -5,039,170.54 | 4,218.70 | | R&D Expenses | 34,582,126.94 | 32,471,614.88 | 6.50 | - Operating revenue growth was primarily driven by a 5.59% increase in automotive parts sales revenue (accounting for 67.54% of operating revenue) and a 36.30% increase in mold sales revenue[51] - Financial expenses increased by 60.70%, mainly due to increased exchange losses from RMB appreciation[51] Changes in Gross Profit Margin by Main Product | Product Category | 2017 Gross Profit Margin (%) | Gross Profit Margin Change from Prior Year (%) | | :--- | :--- | :--- | | Automotive Plastic Parts | 27.88 | -2.32 percentage points | | Electrical Appliance Plastic Parts | 27.58 | -0.45 percentage points | | Consumer Electronics Plastic Parts | 28.62 | -1.28 percentage points | | Molds | 20.42 | -10.39 percentage points | - Sales to the top five customers accounted for 61.65% of total annual sales, while purchases from the top five suppliers accounted for 26.60% of total annual purchases[60] (II) Changes in Non-Core Business Profit Significant changes in non-core business profit are mainly reflected in non-recurring gains and losses items, such as government subsidies and wealth management income from raised funds - Changes in non-core business profit primarily refer to non-recurring gains and losses items, such as government subsidies and wealth management income from raised funds[65] (III) Analysis of Asset and Liability Structure At the end of the reporting period, the company's total assets increased by 40.88% year-on-year, and net assets attributable to shareholders of the listed company increased by 86.55%, mainly due to IPO proceeds. Short-term borrowings within current liabilities significantly decreased by 100%, while other current assets substantially increased due to the purchase of bank wealth management products Changes in Major Assets and Liabilities (Unit: Yuan) | Item Name | Current Period End Amount | Proportion of Total Assets at Current Period End (%) | Prior Period End Amount | Proportion of Total Assets at Prior Period End (%) | Change Ratio of Current Period End Amount vs. Prior Period End Amount (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Cash and Bank Balances | 116,804,213.51 | 11.33 | 57,002,222.39 | 7.79 | 104.91 | | Prepayments | 12,885,843.74 | 1.25 | 4,517,386.41 | 0.62 | 185.25 | | Other Receivables | 2,972,007.84 | 0.29 | 7,286,882.53 | 1.00 | -59.21 | | Other Current Assets | 159,562,544.92 | 15.47 | 7,668,929.43 | 1.05 | 1,980.64 | | Construction in Progress | 14,770,066.12 | 1.43 | 5,110,857.04 | 0.70 | 188.99 | | Short-term Borrowings | 0.00 | 0.00 | 90,000,000.00 | 12.29 | -100.00 | | Notes Payable | 28,462,435.79 | 2.76 | 18,470,527.54 | 2.52 | 54.10 | | Capital Reserve | 338,190,518.80 | 32.79 | 42,565,082.04 | 5.81 | 694.53 | - Cash and bank balances, other current assets, and capital reserve significantly increased, mainly due to the company receiving proceeds from share issuance and purchasing bank wealth management products[67] - Short-term borrowings decreased by 100%, due to the company repaying working capital loans[67] - Total restricted assets at period-end amounted to 30,933,276.35 yuan, primarily comprising bank acceptance bill deposits, letter of credit deposits, and notes receivable pledged to banks[68] (IV) Industry Operating Information Analysis The company operates in the plastic parts manufacturing industry, with products mainly used in automotive, electrical appliance, and consumer electronics sectors. Industry concentration is low, and the company invests heavily in R&D, holding multiple patents. The production model is 'production based on sales,' and fluctuations in plastic pellet prices, the main raw material, significantly impact costs 1 Industry Policies and Position The plastic processing industry is a pillar of China's national economy, driven by 'plastic replacing steel' and 'plastic replacing wood' trends, expected to maintain high-speed development. Industry concentration is low, making it difficult to accurately assess the company's position in the plastic parts sub-industry - The plastic processing industry is a pillar of the national economy, driven by 'plastic replacing steel' and 'plastic replacing wood' trends, projected to maintain an average annual market growth rate of 15% during the '13th Five-Year Plan' period[35] - The top ten enterprises in China's plastic processing industry account for only 5% of the market share, indicating low industry concentration[35][70] 2 Products, R&D, and Production Process The company's main products are automotive, electrical appliance, and consumer electronics plastic parts, with plastic pellets as raw materials. The company has 420 R&D personnel, accounting for 23.97% of total employees, and by the end of 2017, held 22 invention patents and 73 utility model patents, continuously conducting R&D on technologies such as internal mold extraction, ejection, threaded sleeve return, integrated injection molding for new-generation automotive window motors, and two-color injection molding Main Products and Influencing Factors | Product | Main Downstream Application Areas | Main Price Influencing Factors | | :--- | :--- | :--- | | Automotive Plastic Parts | Automotive sector | Raw material prices, product structure, product lifecycle | | Electrical Appliance Plastic Parts | Electrical appliance sector, mainly circuit breaker structural parts and panels | Raw material prices, product structure, product lifecycle | | Consumer Electronics Plastic Parts | Consumer electronics sector, mainly printers | Raw material prices, product structure, product lifecycle | | Molds | Automotive, electrical appliance, consumer electronics sectors | Raw material prices, product structure, product lifecycle | - The company has 420 full-time R&D and technical personnel, accounting for 23.97% of total employees, possessing capabilities for synchronous development with major customers and independent design and development[72] - The company has obtained 22 invention patents and 73 utility model patents, and is actively engaged in R&D for technologies such as internal mold extraction, ejection, threaded sleeve return, integrated injection molding for new-generation automotive window motors, and two-color injection molding[72][73][74] 3 Raw Material Procurement and Price Fluctuations The company's main raw materials are plastic pellets (PA, PP, PBT, PC, etc.), with procurement primarily based on customer demand. In 2017, the average unit prices for PA, PBT, and PC procurement increased, while PP decreased, with raw material price fluctuations directly impacting operating costs Main Raw Material Procurement and Price Changes | Raw Material | Procurement Volume (tons) | Price Change Status | Impact of Price Fluctuations on Operating Costs | | :--- | :--- | :--- | :--- | | Plastic Pellets PA | 5,645.21 | Average procurement unit price increased by approximately 1.50% year-on-year | Rising procurement prices led to increased operating costs | | Plastic Pellets PP | 4,844.61 | Average procurement unit price decreased by approximately 0.64% year-on-year | Decreasing procurement prices led to decreased operating costs | | Plastic Pellets PBT | 1,987.49 | Average procurement unit price increased by approximately 0.66% year-on-year | Rising procurement prices led to increased operating costs | | Plastic Pellets PC | 1,486.19 | Average procurement unit price increased by approximately 12.05% year-on-year | Rising procurement prices led to increased operating costs | - Prices of the company's main raw material plastic pellets are significantly affected by upstream crude oil price fluctuations, with a notable impact on product costs[32][78] 4 Product Sales Status The company's products are sold directly to customers without intermediaries, with sales models including consignment, domestic direct sales, and international direct sales. In 2017, the gross profit margin for the plastic parts manufacturing industry was 27.11%, a year-on-year decrease of 2.72 percentage points - The company's products are sold directly to customers, with sales models including consignment, domestic direct sales, and international direct sales[79] Main Business Performance of Plastic Parts Manufacturing Industry | Sub-industry | Operating Revenue (10,000 Yuan) | Operating Cost (10,000 Yuan) | Gross Profit Margin (%) | Gross Profit Margin Change from Prior Year (%) | | :--- | :--- | :--- | :--- | :--- | | Plastic Parts Manufacturing Industry | 84,251.12 | 61,409.22 | 27.11 | -2.72 | 5 Environmental Protection and Safety Status The company and its subsidiaries are not classified as key polluting units, generating only small amounts of waste gas and noise during production. During the reporting period, the company strictly adhered to environmental regulations, with no major safety production accidents or environmental violations. Environmental investment in 2017 was 603,400 yuan, accounting for 0.07% of operating revenue - The company and its subsidiaries are not listed as key polluting units by environmental protection authorities and strictly comply with national environmental protection laws and regulations[163] - Environmental investment in 2017 amounted to 603,400 yuan, accounting for 0.07% of operating revenue[84] (V) Overall Analysis of External Equity Investments As of the end of the reporting period, the company's external equity investments included 9 wholly-owned or controlling subsidiaries, 1 sub-subsidiary, 2 branches, and 2 associate companies - The company's external equity investments include 9 wholly-owned or controlling subsidiaries, 1 sub-subsidiary, 2 branches, and 2 associate companies[85] (VI) Significant Asset and Equity Sales The company had no significant asset or equity sales during the reporting period (VII) Operating Performance of Major Holding and Associate Companies Details financial data such as registered capital, total assets, net assets, and net profit for the company's major holding and associate subsidiaries, covering 9 subsidiaries including Shanghai Tianhai, Jiangsu Yihang, and Dongguan Tianlong Financial Data of Major Holding and Associate Companies (Unit: 10,000 Yuan) | Company Abbreviation | Registered Capital (10,000 Yuan) | Total Assets (10,000 Yuan) | Net Assets (10,000 Yuan) | Net Profit (10,000 Yuan) | | :--- | :--- | :--- | :--- | :--- | | Shanghai Tianhai | 3,293.36 | 16,187.93 | 9,839.74 | 1,538.34 | | Jiangsu Yihang | 2,500.00 | 13,823.43 | 7,915.84 | 1,763.50 | | Dongguan Tianlong | 145 USD | 7,259.82 | 4,064.79 | 1,505.94 | | Fuzhou Tianlong | 660.00 | 1,339.93 | 944.49 | 250.78 | | Sanhe Tianlong | 100 USD | 1,369.63 | 1,369.63 | -69.48 | | Tianlong Mold | 600.00 | 1,767.83 | 1,367.86 | -125.08 | | Changchun Tianlong | 3,500.00 | 5,555.11 | 2,830.79 | 108.88 | | Langfang Tianlong | 2,500.00 | 5,746.79 | 3,604.42 | 697.90 | | Chengdu Tianlong | 3,000.00 | 3,076.56 | 2,221.40 | -405.87 | (VIII) Structured Entities The company had no controlled structured entities during the reporting period Company's Future Development Outlook The company will focus on the 'continuous improvement, steady growth' strategy, deeply exploring existing market potential, addressing high-end customer needs, strengthening high-value-added product development, continuously improving development and manufacturing technologies, and actively expanding into emerging application areas such as medical devices, aerospace, new energy, and intelligent driving, while also seeking external growth opportunities through M&A (I) Industry Development Landscape and Trends The plastic products industry is transitioning from high-speed to medium-speed stable growth, with future focus on functionalization, lightweighting, ecological design, and micro-molding technologies. The automotive industry's growth is slowing but still has development potential. The mold industry will prioritize strengthening, improving product precision and lifespan, to meet the demands of strategic emerging industries like automotive, home appliances, and medical - The plastic processing industry is transitioning from high-speed to medium-speed stable growth, with future development directions in functionalization, lightweighting, ecological design, and micro-molding[89] - Automotive production and sales growth slowed in 2017, and is expected to continue a slow growth trend in 2018[90][91] - The mold industry will focus on strengthening, improving product precision and lifespan, to meet the demands of downstream industries such as automotive, home appliances, and medical[91][92] (II) Company Development Strategy and Measures The company adheres to the 'continuous improvement, steady growth' strategy, achieved by deeply exploring existing market potential, closely monitoring high-end customer needs, strengthening high-value-added product development, continuously improving development and manufacturing technologies, and expanding into emerging application areas such as medical devices, aerospace, new energy, and intelligent driving - The company's development strategy is 'continuous improvement, steady growth,' focusing on precision mold development, design, and precision injection molding[93] - Strategic measures include deeply exploring the potential of existing product markets, closely monitoring high-end customer needs, strengthening high-value-added product development, and continuously improving development and manufacturing technologies[93] - Actively expanding into high-end markets such as medical devices and aerospace, and focusing on emerging fields like new energy, intelligent driving, and connected vehicles[94] (III) 2018 Operating Plan The company's 2018 operating plan includes market expansion (leveraging existing customers, seeking cooperation with large multinational enterprises, entering medical/aerospace sectors), product development (enhancing synchronous development capabilities, focusing on high-end customer needs, timely attention to consumer electronics), technology development (establishing R&D centers, introducing advanced technologies, hiring experts), human resources (improving employee quality, perfecting incentive mechanisms), and M&A plans (focusing on emerging fields like new energy and intelligent driving) - Market expansion plan: deeply explore the potential of existing customers, seek cooperation with more large multinational enterprises, and attempt to enter the medical device and aerospace plastic parts manufacturing sectors[95] - Product development plan: enhance synchronous development capabilities for high-end automotive customers, continuously improve the quality of electrical appliance products, and improve mold development capabilities for high-end application areas[95][96] - Technology development plan: establish a unified R&D center, increase R&D investment, introduce advanced technical equipment, and engage domestic and international experts for guidance[96] - M&A plan: actively seek potential acquisition targets globally, with a focus on emerging fields such as new energy, intelligent driving, and connected vehicles[96] (IV) Key Operating Risk Warnings The company faces challenges such as intensified market competition, fluctuations in the downstream automotive industry, raw material price volatility, loss of core technology and talent, management risks from expanding operations, and internal management risks - Market competition risk: The precision plastic parts manufacturing market is increasingly competitive, and the company still lags behind internationally renowned manufacturers in technology, talent, equipment, and R&D investment[98] - Downstream industry risk: The company's operating performance is affected by fluctuations in downstream industries such as automotive and electrical appliances; a slowdown in the automotive market may lead to decreased production and sales[98] - Raw material price fluctuation risk: Plastic pellet prices are influenced by crude oil prices, which may cause fluctuations in main business costs and affect the stability of operating performance[99] - Core technology and talent loss risk: Industry talent competition is intensifying; failure to effectively stabilize the talent team or improper management may negatively impact the company's development[99][100] Explanation of Non-Disclosure According to Standards The company did not fail to disclose information according to standards due to inapplicability of standard provisions or special reasons such as state secrets or commercial secrets Significant Matters This section details important corporate events, including profit distribution plans, fulfillment of commitments, related party transactions, and significant contracts Profit Distribution and Capital Reserve Conversion Plan The company has formulated an active profit distribution policy, prioritizing cash dividends, with a cash dividend ratio of no less than 20% of distributable profit when there are no major investment plans. The 2017 profit distribution plan proposes a cash dividend of 2.5 yuan (tax inclusive) per 10 shares and a capital reserve conversion of 4 shares per 10 shares, increasing the total share capital to 140 million shares - The company's profit distribution policy adheres to the principle of equal rights for equal shares and actively rewarding investors, prioritizing cash dividends[102] - In the absence of major investment plans or significant cash expenditures, the single-year cash dividend will not be less than 20% of the distributable profit for the year[103] 2017 Profit Distribution Plan | Dividend Year | Dividend per 10 Shares (Yuan) (Tax Inclusive) | Shares Converted per 10 Shares (Shares) | Cash Dividend Amount (Tax Inclusive) | Proportion of Net Profit Attributable to Ordinary Shareholders of Listed Company in Consolidated Financial Statements (%) | | :--- | :--- | :--- | :--- | :--- | | 2017 | 2.50 | 4 | 25,000,000 | 31.86 | - The 2017 profit distribution plan proposes a cash dividend of 2.5 yuan (tax inclusive) per 10 shares and a capital reserve conversion of 4 shares per 10 shares, increasing the total share capital to 140 million shares after conversion[106] Fulfillment of Commitments The company's actual controllers, controlling shareholders, and directors, supervisors, and senior management all strictly fulfilled various commitments related to the initial public offering during the reporting period, including share lock-up, stock price stabilization, information disclosure authenticity, shareholding and reduction intentions, dividends, resolution of horizontal competition, related party transactions, and land title defects - Actual controllers Hu Jianli and Zhang Xiujun committed to a share lock-up period of 36 months from the listing date, extended by 6 months if the stock price falls below the offering price[111][112] - Controlling shareholder Antai Holdings committed to a share lock-up period of 36 months from the listing date, extended by 6 months if the stock price falls below the offering price, and the reduction price will not be lower than the offering price[114] - The company, controlling shareholders, and directors, supervisors, and senior management committed to initiating stock price stabilization measures such as share repurchases and share increases when stock price stabilization conditions are triggered[117][118][120][122] - Actual controllers and controlling shareholders committed to resolving horizontal competition and minimizing related party transactions, while ensuring the fairness of related party transactions[129][130] - Actual controllers Hu Jianli and Zhang Xiujun committed to bearing all losses incurred by Dongguan Tianlong due to defects in leased properties or relocation[132] Fund Occupation and Debt Clearance Status The company had no non-operating fund occupation by controlling shareholders or their related parties during the reporting period Explanation of Audit Report Opinion The company received a standard unqualified audit report from Tianjian Certified Public Accountants (Special General Partnership) - Tianjian Certified Public Accountants (Special General Partnership) issued a standard unqualified audit report for the company[6] Explanation of Changes in Accounting Policies and Estimates The company changed its accounting policies in accordance with the Ministry of Finance's newly issued 'Accounting Standard for Business Enterprises No. 42 – Non-current Assets Held for Sale, Disposal Groups and Discontinued Operations' and the revised 'Accounting Standard for Business Enterprises No. 16 – Government Grants,' and implemented the 'Notice of the Ministry of Finance on Revising and Issuing the Format of Financial Statements for General Enterprises,' retrospectively adjusting 2016 operating income, expenses, and asset disposal gains - The company adopted 'Accounting Standard for Business Enterprises No. 42 – Non-current Assets Held for Sale, Disposal Groups and Discontinued Operations' from May 28, 2017, and the revised 'Accounting Standard for Business Enterprises No. 16 – Government Grants' from June 12, 2017, applying the prospective application method[133] - The company implemented the 'Notice of the Ministry of Finance on Revising and Issuing the Format of Financial Statements for General Enterprises,' retrospectively adjusting 2016 non-operating income by a reduction of 321,114.85 yuan, non-operating expenses by a reduction of 428,470.65 yuan, and asset disposal gains by a reduction of 107,355.80 yuan[134] Appointment of Accounting Firm The company re-appointed Tianjian Certified Public Accountants (Special General Partnership) as its 2017 audit firm, with an audit fee of 800,000 yuan and an audit tenure of 6 years - The company re-appointed Tianjian Certified Public Accountants (Special General Partnership) as its 2017 audit firm[136] - Domestic accounting firm remuneration is 800,000 yuan, with an audit tenure of 6 years[136] Risk of Suspension of Listing The company does not face the risk of suspension of listing Risk of Termination of Listing The company does not face the risk of termination of listing Bankruptcy and Reorganization Matters The company had no bankruptcy and reorganization matters during the reporting period Significant Litigation and Arbitration Matters During the reporting period, the company had two significant litigation and arbitration matters: the lease contract dispute between Beijing Tianlong Yihang Automotive Parts Co., Ltd. and Beijing Zhonghai Xingye Safety Glass Co., Ltd. has been fully executed and closed, and the equipment purchase and sales contract dispute between Tianlong Co., Ltd. and Ningbo Daai Machinery Co., Ltd. has also been settled through a civil mediation statement - The lease contract dispute between Beijing Tianlong Yihang Automotive Parts Co., Ltd. and Beijing Zhonghai Xingye Safety Glass Co., Ltd., involving 3 million yuan, was ruled in 2016 and fully executed and closed in 2017[138][140] - The equipment purchase and sales contract dispute between Tianlong Co., Ltd. and Ningbo Daai Machinery Co., Ltd., involving 439,600 yuan, was settled through a civil mediation statement on March 31, 2017[139][141] Penalties and Rectification Status During the reporting period, the company, its directors, supervisors, senior management, controlling shareholders, and actual controllers were not penalized by securities regulatory agencies Explanation of Integrity Status During the reporting period, the company, its controlling shareholders, and actual controllers had no adverse integrity issues such as failure to comply with effective court judgments or significant overdue debts - During the reporting period, the company, its controlling shareholders, and actual controllers had no adverse integrity issues such as failure to comply with effective court judgments or significant overdue debts[142] Equity Incentive and Employee Stock Ownership Plans The company had no equity incentive plans, employee stock ownership plans, or other employee incentive measures during the reporting period Significant Related Party Transactions During the reporting period, the company engaged in related party transactions related to daily operations, including leasing properties to related parties, paying utility fees on behalf of related parties, and leasing properties from related parties. All these transactions were conducted at market prices and did not meet the conditions for Board of Directors' review Related Party Transactions Related to Daily Operations (Unit: Yuan) | Related Party | Related Party Transaction Type | Related Party Transaction Content | Related Party Transaction Amount | | :--- | :--- | :--- | :--- | | Antai Holdings | Other Outflows | Leasing Property | 763,932.00 | | Ningbo Huiheng Electronics Co., Ltd. | Other Inflows | Leasing Out Property | 1,222,149.52 | | Ningbo Huiheng Electronics Co., Ltd. | Other | Paying Utility Fees on Behalf of Related Party | 83,924.42 | - All related party transactions were conducted at market prices and did not meet the conditions for Board of Directors' review[144] Fulfillment of Significant Contracts During the reporting period, the company and its subsidiaries leased 18 properties or sites for operations, production, offices, and employee dormitories, and leased out 4 idle properties. The company provided guarantees to subsidiaries, mainly for supplier payment contracts and bill pool business. The company used raised funds to purchase principal-protected bank wealth management products, with an outstanding balance of 152 million yuan at period-end (I) Leasing Matters At the end of the reporting period, the company and its subsidiaries leased a total of 18 properties or sites for operational, production, office, and employee dormitory purposes, and leased out 4 idle properties. Related party leases (leasing property from Antai Holdings, leasing out to Ningbo Huiheng Electronics) were all transacted at market prices - The company and its subsidiaries leased a total of 18 properties or sites for operational, production, office, and employee dormitory purposes[148] - The company and its subsidiaries leased out a total of 4 idle properties[148] - The company's lease of certain properties from Antai Holdings for canteens and employee dormitories, and the company's lease of idle factory buildings to Ningbo Huiheng Electronics Co., Ltd., were all transacted at market prices[149] (II) Guarantees At the end of the reporting period, the company's total guarantee balance for subsidiaries was 5.943 million yuan, accounting for 0.74% of the company's net assets. Guarantees were mainly used for applying for longer payment terms from suppliers and for group bill pool business. No guarantee default liabilities occurred during the reporting period Company Total Guarantee Amount (Unit: Yuan) | Indicator | Amount | | :--- | :--- | | Total Guarantee Balance for Subsidiaries at Period-End (B) | 5,943,038.49 | | Total Guarantee Amount (A+B) | 5,943,038.49 | | Proportion of Total Guarantee Amount to Company's Net Assets (%) | 0.74 | - Guarantees for subsidiaries were mainly used to apply for longer payment terms from suppliers and to obtain credit for issuing new notes payable through group bill pool operations[152] - No guarantee default liabilities actually occurred for subsidiaries during the reporting period[152] (III) Entrusted Wealth Management During the reporting period, the company used raised funds to entrust banks to purchase principal-protected wealth management products, with a transaction amount of 169 million yuan and an outstanding balance of 152 million yuan at period-end, all approved through legal procedures Overall Entrusted Wealth Management Status (Unit: Yuan) | Type | Source of Funds | Transaction Amount | Outstanding Balance | Overdue Unrecovered Amount | | :--- | :--- | :--- | :--- | :--- | | Principal-Protected Bank Wealth Management Products | Raised Funds | 169,000,000 | 152,000,000 | 0 | - All entrusted wealth management products were principal-protected bank wealth management products and were all approved through legal procedures[157][158][161] (IV) Other Significant Contracts The company had no other significant contracts during the reporting period Other Significant Matters The company had no other significant matters during the reporting period Fulfillment of Social Responsibilities The company did not disclose its poverty alleviation efforts or social responsibility work. The company and its subsidiaries are not classified as key polluting units, strictly comply with environmental laws and regulations, and had no environmental violations - The company and its subsidiaries are not listed as key polluting units by environmental protection authorities and strictly comply with national environmental protection laws and regulations[163] - During the reporting period, the company and its subsidiaries did not receive administrative penalties from environmental protection authorities for environmental violations[163] Convertible Corporate Bonds The company had no convertible corporate bonds during the reporting period Changes in Ordinary Shares and Shareholder Information This section covers the company's share capital changes, securities issuance, and provides detailed information on its shareholders and actual controllers Changes in Ordinary Share Capital In 2017, the company's initial public offering of 25 million A-shares increased total share capital from 75 million shares to 100 million shares. This change significantly increased net assets attributable to shareholders of the listed company but diluted earnings per share Changes in Ordinary Share Capital (Unit: Share) | Category | Quantity Before This Change | Increase/Decrease in This Change (+,-) New Share Issuance | Quantity After This Change | | :--- | :--- | :--- | :--- | | I. Restricted Shares | 75,000,000 | 0 | 75,000,000 | | II. Unrestricted Tradable Shares | 0 | 25,000,000 | 25,000,000 | | III. Total Ordinary Shares | 75,000,000 | 25,000,000 | 100,000,000 | - The company listed on January 10, 2017, with an initial public offering of 25 million shares, increasing total share capital from 75 million shares to 100 million shares[169] - The change in share capital led to the dilution of basic earnings per share and net assets per share in 2017; if calculated based on pre-issuance share capital, EPS and net assets per share would be higher[170] Changes in Restricted Shares (Unit: Share) | Shareholder Name | Restricted Shares at Year-End | Reason for Restriction | Date of Lifting Restriction | | :--- | :--- | :--- | :--- | | Zhejiang Antai Holdings Group Co., Ltd. | 49,065,000 | IPO Lock-up | January 11, 2020 | | Zhang Yihua | 11,340,000 | IPO Lock-up | January 11, 2020 | | Ningbo Junrui Investment Partnership (Limited Partnership) | 6,000,000 | IPO Lock-up | January 11, 2020 | Securities Issuance and Listing Status The company issued 25 million RMB ordinary shares (A-shares) on December 28, 2016, at an offering price of 14.63 yuan/share, and listed on the Shanghai Stock Exchange on January 10, 2017. This issuance increased the company's registered capital and total shares, significantly reducing the asset-liability ratio Securities Issuance Status (Unit: Share) | Type of Stock and Derivative Securities | Issuance Date | Issuance Price (or Interest Rate) | Issuance Quantity | Listing Date | Quantity Approved for Listing and Trading | | :--- | :--- | :--- | :--- | :--- | :--- | | RMB Ordinary Shares (A-shares) | December 28, 2016 | 14.63 | 25,000,000 | January 10, 2017 | 25,000,000 | - After the public offering, the company's registered capital increased from 75 million yuan to 100 million yuan, and total shares increased from 75 million shares to 100 million shares[174] - The asset-liability ratio at period-end decreased from 39.21% at the beginning of the period to 20.27%, mainly due to IPO proceeds[174] Shareholder and Actual Controller Information As of the end of the reporting period, the company had 8,214 ordinary shareholders. The controlling shareholder is Zhejiang Antai Holdings Group Co., Ltd., and the actual controllers are Hu Jianli and Zhang Xiujun. Among the top ten shareholders, Zhejiang Antai Holdings Group Co., Ltd. held 49.07%, Zhang Yihua held 11.34%, and Ningbo Junrui Investment Partnership (Limited Partnership) held 6% - As of the end of the reporting period, the total number of ordinary shareholders was 8,214[175] Top Ten Shareholders' Shareholding Status (Unit: Share) | Shareholder Name | Shares Held at Period-End | Proportion (%) | Number of Restricted Shares Held | Share Status | Quantity | | :--- | :--- | :--- | :--- | :--- | :--- | | Zhejiang Antai Holdings Group Co., Ltd. | 49,065,000 | 49.07 | 49,065,000 | Pledged | 23,625,000 | | Zhang Yihua | 11,340,000 | 11.34 | 11,340,000 | None | 0 | | Ningbo Junrui Investment Partnership (Limited Partnership) | 6,000,000 | 6.00 | 6,000,000 | Pledged | 4,355,000 | - Zhejiang Antai Holdings Group Co., Ltd. is the company's controlling shareholder, and actual controllers Hu Jianli and Zhang Xiujun jointly hold 54.47% of the company's equity[181] Detailed Information on Controlling Shareholder and Actual Controllers The controlling shareholder is Zhejiang Antai Holdings Group Co., Ltd., with legal representative Hu Jianli. The actual controllers are Hu Jianli and Zhang Xiujun, with Hu Jianli serving as the company's Chairman and General Manager, and Zhang Xiujun as Antai Holdings' General Manager - Controlling Shareholder: Zhejiang Antai Holdings Group Co., Ltd., registered capital 50 million yuan, business scope includes industrial investment, wholesale and retail of plastic raw materials[182] - Actual Controllers: Hu Jianli (Chairman and General Manager) and Zhang Xiujun (Antai Holdings General Manager), both without permanent residency abroad[184] Other Major Corporate Shareholders The company had no other corporate shareholders holding more than 10% of shares during the reporting period Share Reduction Restrictions The company had no explanation regarding share reduction restrictions during the reporting period Preferred Shares Information This section confirms the absence of preferred shares during the reporting period Preferred Shares Status The company had no preferred shares during the reporting period Directors, Supervisors, Senior Management, and Employees This section provides information on the shareholdings and remuneration of directors, supervisors, and senior management, their appointments, and the company's overall employee structure and training initiatives Shareholding and Remuneration of Directors, Supervisors, and Senior Management During the reporting period, the shareholdings of the company's directors, supervisors, and senior management remained unchanged. The total pre-tax remuneration actually received by all directors, supervisors, and senior management was 4.1974 million yuan Shareholding and Remuneration of Directors, Supervisors, and Senior Management (Unit: Share, 10,000 Yuan) | Name | Position | Shares Held at Year-Start | Shares Held at Year-End | Change in Shares During the Year | Total Pre-tax Remuneration Received from Company During Reporting Period (10,000 Yuan) | | :--- | :--- | :--- | :--- | :--- | :--- | | Hu Jianli | Chairman and General Manager | 0 | 0 | 0 | 41 | | Shen Zhaohui | Director and Deputy General Manager | 525,000 | 525,000 | 0 | 99.17 | | Zhang Yihua | Director | 11,340,000 | 11,340,000 | 0 | 45.99 | | Zhang Yuxin | Director | 1,357,500 | 1,357,500 | 0 | 65.2 | | Yu Zhongcan | CFO | 487,500 | 487,500 | 0 | 46.92 | | Yu Jianfeng | Deputy General Manager and Board Secretary | 487,500 | 487,500 | 0 | 46.92 | | Total | / | 14,197,500 | 14,197,500 | 0 | 419.74 | - During the reporting period, the shareholdings of the company's directors, supervisors, and senior management remained unchanged[189] Appointment Status of Directors, Supervisors, and Senior Management Discloses the appointment status of the company's directors, supervisors, and senior management in shareholder entities and other entities, with Hu Jianli serving as Executive Director at Antai Holdings and as director or supervisor in companies such as US Burteck - Hu Jianli currently serves as Chairman and General Manager of Tianlong Co., Ltd., and concurrently holds multiple subsidiary positions such as Executive Director and General Manager of Shanghai Tianhai, Chairman of Fuzhou Tianlong, and Chairman of Dongguan Tianlong[191] - Hu Jianli serves as Executive Director at the shareholder entity Zhejiang Antai Holdings Group Co., Ltd[193] - Several directors, supervisors, and senior management hold concurrent positions in other entities, such as Zhang Yihua as Associate Professor at Nanjing University of Aeronautics and Astronautics, and Ren Hao as Professor at Tongji University[191][194][195] Remuneration Decision and Payment for Directors, Supervisors, and Senior Management Remuneration for directors, supervisors, and senior management is determined by the Board's Remuneration and Assessment Committee based on position value, market orientation, and performance evaluation results, and has been actually paid. The total remuneration actually received by all directors, supervisors, and senior management during the reporting period was 4.1974 million yuan - Remuneration for directors, supervisors, and senior management is formulated by the Board's Remuneration and Assessment Committee based on position value and market orientation, and is linked to performance[196] - The total remuneration actually received by all directors, supervisors, and senior management at the end of the reporting period was 4.1974 million yuan[196] Changes in Directors, Supervisors, and Senior Management No changes occurred in the company's directors, supervisors, and senior management during the reporting period Penalties Received in the Past Three Years The company has not been penalized by securities regulatory agencies in the past three years during the reporting period Employee Status and Remuneration Training The company has a total of 1,752 employees, with production personnel accounting for the largest proportion. The company has established a comprehensive remuneration, welfare, and performance appraisal system, and places high importance on talent development, formulating training plans to enhance employee quality and technical skills Employee Professional Structure | Professional Category | Number of Personnel in Category | | :--- | :--- | | Production Personnel | 925 | | Sales Personnel | 52 | | Technical Personnel | 420 | | Financial Personnel | 33 | | Administrative Personnel | 322 | | Total | 1,752 | - The company has established a comprehensive remuneration and welfare system and performance appraisal system, implementing a competitive remuneration strategy, and actively exploring long-term incentive mechanisms[199] - The company places high importance on talent development, organizing 5 training sessions for middle and senior management in 2017, and will continue to cultivate key personnel in precision mold development and design, injection molding process engineers, and middle and senior management in 2018[200] - Total labor outsourcing hours during the reporting period were 12,969.5 hours, with total remuneration paid of 253,400.5 yuan[201][202] Corporate Governance This section describes the company's governance structure, the performance of its board and supervisory committees, and its commitment to independence and internal control Corporate Governance Structure and Operation The company has established a sound corporate governance system in accordance with laws and regulations such as the 'Company Law' and 'Securities Law,' including the operating mechanisms of the General Meeting of Shareholders, Board of Directors, Board of Supervisors, and their special committees. During the reporting period, all institutions operated independently and effectively, with no major violations or irregularities - The company has established a sound corporate governance system, including the 'Articles of Association,' 'Rules of Procedure for General Meetings of Shareholders,' 'Rules of Procedure for Board Meetings,' and 'Rules of Procedure for Board of Supervisors Meetings'[203] - During the reporting period, the company's General Meeting of Shareholders, Board of Directors, and Board of Supervisors all operated independently and effectively, with no major violations or irregularities[203][204] - The company and its controlling shareholder are independent in terms of personnel, assets, finance, organizational structure, and business operations, and the controlling shareholder did not interfere with the company's decision-making and operating activities[205] - The company strictly fulfills its information disclosure obligations, disclosing information in a timely, accurate, and complete manner through designated media and websites, and strengthening investor relations management[205] General Meeting of Shareholders Convening Status During the reporting period, the company held 1 General Meeting of Shareholders, combining on-site meetings with online voting. All proposals were approved, and the convening and holding procedures were legal and effective - During the reporting period, the company held 1 General Meeting of Shareholders, combining on-site meetings with online voting[207] - All proposals reviewed were approved, and the convening and holding procedures complied with relevant laws, regulations, and the company's articles of association[207] Board of Directors' Performance of Duties During the reporting period, the company held