TIANMA TECH(SH:603668)2018-04-26 16:00Financial Performance - The company's operating revenue for 2017 was ¥1,136,350,115.22, representing a 34.69% increase compared to ¥843,663,373.78 in 2016[24] - The net profit attributable to shareholders for 2017 was ¥90,860,161.82, a 13.16% increase from ¥80,293,463.34 in 2016[24] - The net cash flow from operating activities increased by 181.33% to ¥90,865,315.43 in 2017, compared to ¥32,299,033.03 in 2016[24] - The total assets of the company at the end of 2017 were ¥1,658,029,219.63, an increase of 68.53% from ¥983,832,616.84 at the end of 2016[24] - The net assets attributable to shareholders increased by 80.37% to ¥821,296,629.03 at the end of 2017, compared to ¥455,336,467.36 at the end of 2016[24] - The basic earnings per share for 2017 was ¥0.31, a decrease of 13.89% from ¥0.36 in 2016[25] - The basic earnings per share (EPS) after deducting non-recurring gains and losses was CNY 0.28, a decrease of 12.50% compared to CNY 0.32 in the previous year[26] - The weighted average return on equity (ROE) decreased by 7.12 percentage points to 12.01% from 19.13% in the previous year[26] - The company's cash and cash equivalents increased by 35,491,240 yuan, a growth of 250.03% year-on-year, primarily due to increased sales receipts[44] - The company's inventory rose by 19,779,730 yuan, an increase of 110.59%, attributed to anticipated order growth and stockpiling of key raw materials[44] - The company's fixed assets increased by 13,241,850 yuan, a rise of 63.89%, due to the completion of construction projects and asset acquisitions[44] - The company reported a net profit of 1,295.74 million CNY from Fujian Tianma Feed Co., Ltd., while Hainan Tianma Biotechnology Co., Ltd. incurred a net loss of 5.33 million CNY[84] Dividend and Share Capital - The company plans to distribute a cash dividend of ¥0.65 per 10 shares, totaling ¥19,292,000.00, subject to shareholder approval[8] - The company distributed a cash dividend of 0.8 RMB per 10 shares, totaling 16,960,000 RMB for the year 2016, with a remaining undistributed profit of 164,631,597.13 RMB[105] - For the year 2017, the proposed cash dividend is 0.65 RMB per 10 shares, amounting to 19,292,000 RMB, with an undistributed profit of 214,253,505.68 RMB[105] - The company plans to increase its share capital by 84,800,000 shares through a capital reserve conversion, with a ratio of 4 shares for every 10 shares held[105] - The company approved the public issuance of 53 million shares at a price of RMB 6.21 per share, increasing total share capital to 212 million shares[147] - A cash dividend of RMB 0.80 per 10 shares was distributed, totaling RMB 16.96 million, and a capital reserve conversion of 84.8 million shares was executed, raising total share capital to 296.8 million shares[147] Market Position and Strategy - The company is a leading producer of special aquatic feed, with its core product, eel feed, maintaining the highest sales volume in the country[36] - The company plans to continue expanding its market presence in the domestic special aquatic feed sector, which is one of the most complete in the industry[36] - The company aims to become the largest supplier in the special aquatic feed industry globally, supported by a comprehensive production and sales network along China's coastal regions[92] - The company plans to establish 10 to 14 segmented business units by the end of 2018 to enhance its sales network across coastal regions of China[98] - The company will actively pursue a "going out" strategy in response to the Belt and Road Initiative, focusing on strategic industry layouts in Southeast Asia and Taiwan[94] - The company is planning to expand its market presence in Southeast Asia, targeting a 25% market share in the region by 2020[112] Research and Development - The company invested over 37 million yuan in the research and development of high-efficiency feed products for species such as eel, soft-shelled turtle, and grouper[52] - The total R&D investment was 37,144,039.06 yuan, accounting for 3.27% of operating income[74] - Research and development expenses increased by 30% in 2017, totaling 300 million RMB, to enhance product offerings and technological advancements[113] - The company will increase its R&D investment to maintain its technological leadership in the special aquatic feed industry, with a focus on developing 20 invention patents in 2018[96] - The company has established strategic partnerships with universities and research institutions to enhance its R&D capabilities in special aquatic feed[46] Operational Efficiency - The company has established a "center + subsidiary" operational model, with eight wholly-owned subsidiaries and one controlling subsidiary, ensuring effective management across procurement, production, R&D, finance, and marketing[39] - Over 90% of the company's raw material procurement is conducted through a centralized purchasing model, which includes key ingredients like fish meal and soybean meal, optimizing cost and quality control[40] - The company has implemented an order-based production model, requiring clients to provide feed demand information at least three days in advance, facilitating efficient production planning[40] - The production capacity was significantly enhanced with the launch of ten new production lines for special aquatic feed, all reaching full production status by September 2017[53] Corporate Governance - The company has established a performance evaluation and incentive mechanism for senior management based on the completion of annual operational indicators[197] - The board of directors has set up four specialized committees: Strategic Decision-Making Committee, Compensation and Assessment Committee, Audit Committee, and Nomination Committee, to enhance corporate governance[191] - The company strictly adheres to the regulations of the China Securities Regulatory Commission and the Shanghai Stock Exchange regarding corporate governance, with no unresolved governance issues[193] - All directors attended 100% of board meetings, with a total of 8 meetings held during the year[195] Social Responsibility - The company donated CNY 500,000 to support poverty alleviation efforts in Dingxi City, Gansu Province[132] - The company allocated CNY 14.85 million for the basic security of impoverished disabled individuals during the reporting period[132] - The company established the "Tianma Scholarship" at Xiamen University to assist outstanding impoverished students[132] - The company has a long-term assistance mechanism with the government to enhance economic development capabilities in impoverished areas[136] - The company prioritizes hiring graduates from impoverished areas and offers preferential pricing policies to support local farmers[136] Risks and Challenges - The company faces risks from market competition and fluctuations in raw material prices, particularly fishmeal, which constitutes over 90% of its main business costs[100] - The company has faced risks from natural disasters affecting downstream industries, which could impact product demand and overall business performance[101] - The integration trend in the aquaculture feed industry is expected to increase due to intensified competition and structural reforms in agriculture, leading to higher industry concentration[90] Employee Management - The total number of employees in the parent company is 252, while the total number of employees in major subsidiaries is 206, resulting in a combined total of 458 employees[181] - The company has implemented a comprehensive salary structure that includes performance-based wages, annual salaries for middle and senior management, and special talent agreements[182] - The company organizes annual training plans based on personnel knowledge structure and departmental training needs to enhance employee skills[183] - The company has established a robust human resources management system to protect employee rights and provide a conducive working environment[138]