STO(SZ:002468)2014-04-21 16:00Financial Performance - The company reported a total revenue of 1.5 billion CNY for the year 2013, reflecting a year-on-year growth of 15%[20]. - The company's operating revenue for 2013 was CNY 1,455,876,793.78, representing a year-on-year increase of 21.56% compared to CNY 1,197,642,765.61 in 2012[21]. - The net profit attributable to shareholders for 2013 was CNY 8,931,403.34, up 12.97% from CNY 7,905,829.64 in 2012[21]. - The cash flow from operating activities improved significantly, reaching CNY 103,952,486.45, a 335.97% increase from a negative cash flow of CNY -44,053,851.26 in 2012[21]. - The total assets at the end of 2013 were CNY 1,546,332,372.98, an increase of 8.92% from CNY 1,386,279,409.51 at the end of 2012[21]. - The net profit for 2013 was 111.02 million yuan, a decrease of 4.86% compared to 2012[35]. - The gross profit margin for 2013 was 14.22%, a decline of 0.40% year-on-year, primarily due to lower margins from Jiangxi Oudi's products[35]. - The company reported a significant increase in government subsidies, totaling CNY 15,713,500.00 in 2013, compared to CNY 22,277,659.32 in 2012[27]. Dividend and Capital Distribution - The company plans to distribute a cash dividend of 0.10 CNY per 10 shares and to increase capital by 2 shares for every 10 shares held[5]. - The company has implemented a cash dividend policy, distributing a total of RMB 2,764,800 in cash dividends for the year 2013, which is 30.96% of the net profit attributable to shareholders[108]. - The company plans to increase its share capital by 55,296,000 shares through capital reserve conversion for the year 2013, pending shareholder approval[106]. - The total distributable profit for the year is 9,329,857.23 yuan, with cash dividends accounting for 100% of the profit distribution[109]. Market and Operational Strategy - The company is focused on expanding its market presence and developing new technologies[11]. - The company is focusing on the development of lead-free products and expanding into new markets, particularly in the traditional plumbing valve market[29]. - The establishment of Jiangxi Oudi Copper Industry Co., Ltd. has stabilized the supply of raw materials and contributed to rapid revenue growth in 2013[30]. - The company has expanded its product line to include cast iron valves and is collaborating with European brands to penetrate the high-end hotel and building market[31]. - The company aims to transition towards providing comprehensive solutions for plumbing and heating systems, moving beyond just valve products[82]. - The company plans to invest in technological innovation and new product development to enhance product quality and adapt to market changes[83]. Research and Development - The company’s R&D expenditure in 2013 was CNY 22,985,465.94, representing a 42.32% increase from CNY 16,150,226.01 in 2012, accounting for 3.18% of net assets and 1.58% of operating income[48]. - The company applied for 14 new patents in 2013, including 5 invention patents, bringing the total to 71 patents held[63]. - The company has developed a high-temperature ball valve that meets the latest EU EN331 standards and has received DVGW certification[62]. - The company has received multiple patents for its energy-saving control products, meeting international standards in heating, cooling, and temperature control[118]. Risk Management - The company faces market risks, labor cost increases, exchange rate fluctuations, and raw material price volatility[11]. - The company engaged in financial derivative activities primarily for foreign exchange and copper trading to mitigate risks associated with currency fluctuations and raw material price volatility[74]. - The company has implemented strict internal controls for hedging activities, including regular audits and a rotation system to prevent errors and fraud[74]. - The company has implemented measures to mitigate investment risks through thorough feasibility studies and ongoing project evaluations[92]. Governance and Compliance - The company emphasizes the importance of accurate financial reporting and has declared the completeness of its financial statements[4]. - The company has appointed Lixin Certified Public Accountants as its auditing firm for the reporting period[19]. - The company has established a robust internal control system to enhance decision-making and risk management capabilities[112]. - The company has not been subject to any administrative penalties during the reporting period[120]. - The company has not engaged in related party transactions with its controlling shareholder, maintaining independence in business operations and decision-making[186]. Employee and Social Responsibility - The company provides comprehensive employee benefits, including social insurance and modern living conditions, to ensure employee welfare[113]. - The company actively participates in social welfare activities, including donations and support for local economic development[119]. - The company has established a charity foundation to assist employees and community members in need[119]. - The company has a training plan that includes professional skills and safety management training for employees[182]. Future Outlook - The company plans to achieve a revenue growth of over 25% in 2014 compared to the previous year[96]. - The profit target for 2014 is to increase total profit by over 300% compared to 2013[96]. - The company aims to become a leading supplier of global water and heating systems, emphasizing energy efficiency and environmental sustainability[94]. - The company anticipates challenges in the European market due to sluggish consumer demand and competitive pricing, while the North American market is expected to see sales growth supported by economic recovery[81].