XINLUN(SZ:002341)2016-03-07 16:00Financial Performance - The company's operating revenue for 2015 was ¥1,024,098,645.28, a decrease of 24.08% compared to ¥1,348,972,672.16 in 2014[6]. - The net profit attributable to shareholders was -¥106,615,187.76, representing a decline of 222.43% from a profit of ¥87,084,354.10 in the previous year[6]. - The net cash flow from operating activities was ¥129,720,781.04, down 20.43% from ¥163,025,531.16 in 2014[6]. - The basic earnings per share for 2015 was -¥0.2855, a decrease of 222.43% from ¥0.2332 in 2014[6]. - The weighted average return on equity was -7.13%, down from 5.74% in the previous year[6]. - In 2015, the company achieved a total revenue of CNY 1,024.10 million, a significant decrease of 24.08% compared to CNY 1,348.97 million in 2014[49]. - The net profit attributable to the parent company was CNY -106.62 million, marking a substantial increase in loss of approximately CNY 194 million compared to a profit of CNY 87.08 million in the previous year[49]. - The company's gross profit margin for purification products was 25.23%, while for functional materials it was 31.66%, reflecting a year-on-year increase of 12.12%[58]. - The purification engineering segment saw a revenue decline of 44.48%, dropping to CNY 241.59 million from CNY 435.16 million in 2014[56]. - The functional materials segment experienced a remarkable growth of 170.05%, with revenue rising to CNY 169.95 million from CNY 62.93 million in the previous year[56]. Business Strategy and Transformation - The company reported a transformation towards new materials, indicating potential risks in technology digestion and market expansion[4]. - The company plans to continuously expand its business scale and improve product technology levels in the new materials sector over the next 1-2 years[29]. - The company has successfully expanded into new materials, including electronic functional materials and high-performance fiber materials, with a new production base completed in Q4 2015[28]. - The company anticipates significant market growth in the cleanroom industry driven by increasing quality standards in the pharmaceutical and food sectors[28]. - The company plans to continue its transformation towards high-value industries, despite the transitional challenges faced in 2015[49]. - The company is focusing on the new materials industry, which is highlighted as a key area for development in China's 2015-2025 strategic plan, aiming to reduce reliance on imports and enhance core competitiveness[112]. - The company aims to enhance its profitability and risk resistance by integrating high-quality enterprises within the new materials industry chain through strategic mergers and acquisitions[113]. - The company is establishing a super clean washing center in Wuhan to enhance service quality and customer engagement, aligning with its strategic development plan[107]. Investments and Acquisitions - The company invested 20 million yuan in a 10% stake in Shanghai Songjiang Caohua Jing Microfinance Co., Ltd. during the reporting period[30]. - The company acquired 51% of Suzhou EGIS Electronics Co., Ltd. for 1.1794 million yuan, which is now a subsidiary included in the consolidated financial statements[64]. - The establishment of a new subsidiary, New Lian Technology (Japan) Co., Ltd., was approved with a registered capital of 700 million yen, of which the company contributed approximately 26.32 million yuan[65]. - The company completed the acquisition of 51% of Suzhou Yiges Electronics Co., Ltd. for RMB 1.1794 million, which has been included in the consolidated financial statements since February 2015[148]. - The company acquired 100% of Shenzhen Huazhengding Technology Co., Ltd. for RMB 1, with the net assets of Huazhengding Technology reported at -RMB 339,814.77 as of April 30, 2015, and it has been included in the consolidated financial statements since June 2015[150][151]. - The company invested RMB 10 million to establish a wholly-owned subsidiary, Wuhan Clean Easy Ultra Clean Technology Co., Ltd., which has been included in the consolidated financial statements since July 2015[152]. Research and Development - The company holds 138 patents, including 35 invention patents, and has established a national-level electronic functional materials laboratory[34]. - Research and development investment increased, with 301 R&D personnel, representing 15.26% of the workforce, up from 288 personnel in the previous year[74]. - R&D investment amounted to ¥50,395,116.20, a decrease of 7.25% compared to the previous year, with R&D investment as a percentage of revenue increasing to 4.92% from 4.03%[75]. - The company’s investment in electronic functional materials accounted for over 40% of total R&D investment, indicating a strategic focus on this area[75]. Financial Management and Dividends - The company plans not to distribute cash dividends, issue bonus shares, or increase capital from reserves[5]. - The company implemented a stable profit distribution policy, maintaining a cash dividend policy that aligns with the company's articles of association and shareholder resolutions[128]. - In 2015, the company reported a loss of 106,615,187.76 RMB, resulting in no cash dividends being distributed[135]. - The company did not propose any cash dividend distribution plan for the fiscal year 2015 due to operating losses[135]. - The company has a three-year shareholder return plan (2014-2016) emphasizing cash dividends, ensuring continuity and stability in profit distribution[128]. Operational Challenges - The company experienced a significant decline in traditional business profitability, impacting overall financial performance due to industry downturns and increased operational costs[80]. - The company has faced operational management risks in the new materials project due to its lack of experience in the precision coating sector, necessitating the establishment of a robust quality control system[121]. - Market expansion risks are present as the company introduces products that are domestically produced for the first time, with a focus on leveraging existing customer relationships to build market reputation[123]. Legal and Compliance - The company is involved in multiple lawsuits, with a total amount of 1,252,286.8 thousand yuan claimed in disputes related to sales contracts and construction projects[157]. - The company has reported a total of 477.65 thousand yuan in litigation related to a construction contract dispute with Wuhan Yatu Digital Video Technology Co., Ltd.[156]. - The company has ongoing litigation with Jiangxi Saiwei LDK Solar Technology Co., Ltd., with a claim amount of 119.4 thousand yuan[157]. - The company has not reported any penalties or rectification measures during the reporting period[159]. Market Position and Customer Engagement - The company has established strategic partnerships with major clients such as Foxconn, Samsung, and BASF to meet market demands[37]. - The company’s user data showed a significant increase in customer engagement, although specific numbers were not disclosed[93]. - The company continues to focus on expanding its market presence through strategic partnerships and collaborations[162].