Workflow
国联水产(300094) - 2017 Q4 - 年度财报

Important Notice, Table of Contents, and Definitions Important Notice The company's Board of Directors ensures the annual report's accuracy and completeness, highlighting key operational risks and the 2017 profit distribution plan of no dividends or bonus shares - The company highlighted three core operational risks: - Food quality and safety risk: mitigated by establishing a '2211' electronic supervision model and promoting BAP 4-star certification - Raw material supply and price fluctuation risk: addressed by optimizing centralized procurement and strengthening global market analysis - Risk of slower-than-expected progress in shrimp industrialized aquaculture: managed by cautious expansion, enhanced R&D, and talent acquisition578 - The company's 2017 profit distribution plan proposes no cash dividends, bonus shares, or capital reserve conversions11 Table of Contents The report covers twelve chapters including company profile, business overview, management discussion and analysis, significant events, share changes, corporate governance, and financial reports Definitions This section defines key terms and abbreviations used throughout the report, including company and subsidiary names, regulatory bodies, relevant laws, and the reporting period Company Profile and Key Financial Indicators Company Basic Information Zhanjiang Guolian Aquatic Products Co., Ltd. (Stock Abbreviation: Guolian Aquatic, Stock Code: 300094) is registered in Zhanjiang Economic and Technological Development Zone, with Li Zhong as its legal representative Key Accounting Data and Financial Indicators In 2017, the company achieved strong performance growth with revenue up 56.25% to 4.096 billion yuan and net profit attributable to shareholders up 53.42% to 144.13 million yuan, despite a negative operating cash flow of -381.77 million yuan due to increased raw material purchases 2017 Key Financial Data | Indicator | 2017 | 2016 | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Operating Revenue (yuan) | 4,095,806,660.34 | 2,621,366,941.32 | 56.25% | | Net Profit Attributable to Shareholders (yuan) | 144,132,610.64 | 93,944,585.43 | 53.42% | | Net Profit Attributable to Shareholders (Excluding Non-recurring Items) (yuan) | 138,786,917.33 | 98,534,946.33 | 40.85% | | Net Cash Flow from Operating Activities (yuan) | -381,767,222.42 | -212,926,569.51 | -79.30% | | Basic Earnings Per Share (yuan/share) | 0.18 | 0.12 | 50.00% | | Weighted Average Return on Net Assets | 7.66% | 5.30% | 2.36% | | Balance Sheet Indicators | 2017 Year-End | 2016 Year-End | Year-on-Year Change | | Total Assets (yuan) | 3,932,109,674.26 | 3,088,429,886.98 | 27.32% | | Net Assets Attributable to Shareholders (yuan) | 1,948,892,124.00 | 1,814,493,082.44 | 7.41% | 2017 Quarterly Key Financial Indicators (yuan) | Indicator | Q1 | Q2 | Q3 | Q4 | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue | 840,170,754.79 | 943,451,925.06 | 1,230,829,237.25 | 1,081,354,743.24 | | Net Profit Attributable to Shareholders | 18,338,605.88 | 52,518,042.17 | 41,383,071.77 | 31,892,890.82 | - Total non-recurring gains and losses in 2017 amounted to 5.3457 million yuan, primarily from government subsidies28 Company Business Overview Main Business Activities During the Reporting Period The company's core business is a full industry chain operation centered on shrimp products, encompassing breeding, feed, farming, R&D, processing, and sales, with processing and sales being the primary drivers of growth - The company adopts a full industry chain operational model covering breeding, feed, farming, processing, and sales, with water product processing and sales as its core business3133 - Key drivers for 2017 performance growth include: - Domestic consumption upgrade: Favorable policies (new Food Safety Law, VAT reform) and market demand (innovative seafood ingredient applications) created advantageous conditions - High growth in main business scale: Channel penetration in domestic and international markets, increased direct sales proportion, particularly significant growth in direct sales to major US clients like Walmart - Explosive growth in e-commerce business: Deep cooperation with platforms like JD Fresh and Yiguo Fresh led to e-commerce revenue growth of 326% to 142 million yuan33343536 Industry Analysis and Company Position The aquatic industry has vast market potential but is highly fragmented, with the company standing as one of China's largest shrimp processing and sales enterprises, effectively mitigating seasonality through global procurement - The aquatic product industry has vast market capacity, with fishery output value projected to reach 1.4 trillion yuan by 2020, but the industry remains highly fragmented with no dominant players yet3738 - The company is one of China's largest listed aquatic product enterprises and the largest shrimp processing and sales company. Its US subsidiary, SSC, ranked seventh among major US shrimp importers in 2017, entering the top ten41 Core Competitiveness Analysis The company's core strengths lie in its global procurement and marketing networks, growing premium customer base, integrated supply chain with high-standard quality management, and robust product R&D capabilities - The company's core competencies include: - Global network: Procurement network extends to North and South America, Australia, Southeast Asia; sales network covers mainstream markets and expands to Egypt, Saudi Arabia - High-quality customer base: International clients include supermarkets like Walmart and Safeway, and restaurant chains like Carnival and Applebees; domestic clients include Haidilao and Xiabuxiabu - Full industry chain and quality management: Pioneered a 360-degree ecological industry chain model, implemented '2211' electronic supervision, and obtained international certifications like HACCP, BRC, BAP 4-star - R&D capability: Possesses two R&D bases in Shanghai and Zhanjiang, collaborating closely with large catering chains to promptly meet customer demands444546 Management Discussion and Analysis Overview In 2017, the company focused on its core business, achieving 56.25% revenue growth to 4.096 billion yuan and 53.42% net profit growth to 144.13 million yuan, driven by optimized supply chain, factory farming, and expanded channels 2017 Operating Performance | Indicator | 2017 Amount (yuan) | Year-on-Year Growth | | :--- | :--- | :--- | | Total Operating Revenue | 4,095,806,660.34 | 56.25% | | Operating Profit | 161,656,767.43 | 72.15% | | Total Profit | 163,083,323.09 | 56.16% | | Net Profit Attributable to Shareholders | 144,132,610.64 | 53.42% | - Operational highlights across business segments: - Aquatic product processing and sales: Overall increase in direct sales proportion in domestic and international markets. Domestic catering sales revenue grew 190%, e-commerce sales reached 146 million yuan, up 326%. US SSC Company revenue was 1.809 billion yuan, up 55.28% - Breeding and aquaculture: Steady progress in shrimp industrialized aquaculture projects, strengthening team building and technological R&D - Feed business: Adhered to a 'small but refined' strategy, deeply synergistic with industrialized aquaculture, with sales revenue of 246 million yuan, up 4%5253545759 Main Business Analysis During the reporting period, the company's main business revenue reached 4.09 billion yuan, a 57.06% increase, primarily driven by processing and sales, with foreign markets showing significant growth and raw materials constituting the largest portion of operating costs 2017 Operating Revenue Composition (by Product) | Product | 2017 Revenue (yuan) | Proportion of Operating Revenue | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Processing and Sales Business | 3,792,218,269.32 | 92.59% | 64.62% | | Feed Business | 245,592,357.21 | 6.00% | 4.07% | | Breeding Business | 29,921,375.50 | 0.73% | -26.03% | | Aquaculture Business | 22,506,760.10 | 0.55% | -6.96% | 2017 Operating Revenue Composition (by Region) | Region | 2017 Revenue (yuan) | Proportion of Operating Revenue | Year-on-Year Change | | :--- | :--- | :--- | :--- | | International | 3,068,674,930.11 | 74.92% | 68.94% | | Domestic | 1,021,563,832.02 | 24.94% | 29.67% | - In 2017, sales to the top five clients accounted for 32.10% of total annual sales, and purchases from the top five suppliers accounted for 19.79% of total annual purchases. The company has no related party relationships with its top five clients or suppliers7073 2017 Expense Overview | Expense Item | 2017 (yuan) | 2016 (yuan) | Year-on-Year Change | Explanation of Significant Change | | :--- | :--- | :--- | :--- | :--- | | Selling Expenses | 156,673,288.65 | 118,559,987.26 | 32.15% | Operating revenue growth led to increased related expenses | | Administrative Expenses | 95,747,092.15 | 76,515,172.22 | 25.13% | - | | Financial Expenses | 107,289,151.00 | -5,130,737.79 | 2,191.11% | Increased loans led to higher interest expenses, and USD depreciation resulted in significant exchange losses | R&D Investment Over Past Three Years | Indicator | 2017 | 2016 | 2015 | | :--- | :--- | :--- | :--- | | R&D Investment Amount (yuan) | 118,000,000.00 | 68,100,000.00 | 37,485,000.00 | | R&D Investment as % of Operating Revenue | 2.88% | 2.60% | 1.81% | - Net cash flow from operating activities was -381.77 million yuan, a significant difference from the 144.13 million yuan net profit, primarily due to a substantial 714 million yuan increase in inventory from increased purchases8184 Assets and Liabilities As of year-end 2017, total assets grew 27.32% to 3.932 billion yuan, with inventory significantly increasing to 51.75% of assets, while short-term borrowings rose to 972.48 million yuan to support operations, and 314 million yuan in assets were restricted Major Balance Sheet Item Changes | Item | 2017 Year-End Amount (yuan) | Proportion of Total Assets | 2016 Year-End Amount (yuan) | Proportion of Total Assets | Explanation of Change | | :--- | :--- | :--- | :--- | :--- | :--- | | Monetary Funds | 209,097,863.26 | 5.32% | 122,162,532.60 | 3.96% | Controlled credit sales to accelerate collections | | Inventory | 2,034,812,969.21 | 51.75% | 1,350,497,784.76 | 43.73% | Increased sales and inventory preparation | | Construction in Progress | 102,165,141.86 | 2.60% | 47,873,772.85 | 1.55% | Impact of new factory construction in progress | | Short-term Borrowings | 972,481,691.77 | 24.73% | 705,892,749.44 | 22.86% | Increased financing to supplement working capital | - As of the end of the reporting period, the company had 314 million yuan in restricted assets, including monetary funds, accounts receivable, fixed assets, intangible assets, and construction in progress, primarily used for letter of credit margins and pledged/mortgaged borrowings88 Investment Analysis During the reporting period, the company primarily engaged in non-equity investments, focusing on new factory and aquaculture projects with a total investment of 98.54 million yuan, while initial public offering funds were fully utilized and bond proceeds were allocated to working capital Significant Non-Equity Investments During the Reporting Period (yuan) | Project Name | Investment Method | Amount Invested in Current Period | Cumulative Actual Investment as of Period End | Project Progress | | :--- | :--- | :--- | :--- | :--- | | Guolian Aquatic New Factory | Self-built | 41,601,777.26 | 47,757,852.85 | 6.05% | | Breeding Company Aquaculture Workshop Industrialization Project | Self-built | 56,936,419.13 | 94,924,350.38 | 19.78% | - The company's initial public offering fundraising projects have been completed, with remaining funds of 430,300 yuan used to supplement working capital. In 2017, 238 million yuan was raised through corporate bond issuance, which has been used to supplement the company's operating working capital92240 Significant Asset and Equity Disposals The company planned and executed the sale of a 30% stake in Zhanjiang Guofa Investment Development Co., Ltd. for 219.37 million yuan, expected to generate approximately 74 million yuan in net profit for 2018 without impacting core business continuity - On January 3, 2018, the company sold a 30% equity stake in its associate real estate development company, Zhanjiang Guofa Investment Development Co., Ltd., for 219.366 million yuan, expected to generate approximately 74 million yuan in net profit for 2018100 Analysis of Major Holding and Associate Companies Key subsidiaries performed well, with US SSC Company generating 1.809 billion yuan in revenue, Guangdong Guomei Aquatic Food Co., Ltd. contributing 62.86 million yuan in net profit, and Guangzhou Guolian Aquatic E-commerce Co., Ltd. achieving 146.31 million yuan in revenue from explosive e-commerce growth 2017 Major Subsidiary Operating Performance (yuan) | Company Name | Main Business | Operating Revenue | Operating Profit | Net Profit | | :--- | :--- | :--- | :--- | :--- | | Guangdong Guomei Aquatic Food Co., Ltd. | Aquatic Products | 757,032,958.29 | 63,970,575.59 | 62,858,109.15 | | US SSC Company | Seafood and Meat | 1,809,332,106.40 | 4,945,294.95 | 2,893,377.15 | | Guangzhou Guolian Aquatic E-commerce Co., Ltd. | Aquatic Product Sales | 146,307,500.49 | 2,960,527.60 | 2,960,655.09 | | Zhanjiang Guolian Feed Co., Ltd. | Aquatic Compound Feed | 245,793,307.71 | 7,672,057.44 | 6,580,564.59 | | Zhanjiang Guolian Aquatic Breeding Technology Co., Ltd. | Aquatic Breeding | 33,378,349.60 | -19,524,648.52 | -19,691,746.45 | Outlook on Company's Future Development The company aims to become a globally influential marine food enterprise, transforming into a full industry chain and globalized provider of premium aquatic protein and catering food solutions, with plans for continued high growth in domestic and international sales, supply chain strengthening, and operational efficiency improvements in 2018 - Core of the company's five-year strategic plan: - Industrial layout: Upstream development of industrialized aquaculture, midstream shift towards deep processing and intelligent manufacturing, downstream focus on B-end catering clients and expansion of e-commerce channels - Regional layout: Deepen presence in the two core markets of China and the US, improve supply chain systems in Southeast Asia and South America - Business model: Transition to a 'solution provider' offering value-added services such as supply chain management and dish R&D106107 - Key work plans for 2018 include: - Business growth: Improve export profit margins, accelerate domestic market regional layout and model innovation - Supply chain strengthening: Deeply explore the potential of the Southeast Asian market, enhance automation levels in processing - Industrialized aquaculture: Continuously increase R&D investment and attract high-end talent - Operational management: Comprehensively improve supply chain coordination, cost control capabilities, and management efficiency - Information technology construction: Establish an integrated information management platform and promote MES system application109110111112113114115 Significant Events Ordinary Share Profit Distribution and Capital Reserve Conversion During the reporting period, the company implemented its 2016 profit distribution plan, paying a cash dividend of 0.1 yuan per 10 shares, while proposing no dividends, bonus shares, or capital reserve conversions for 2017 to support ongoing operations and future development - The 2017 profit distribution plan proposes no profit distribution, as the company is in a period of transformation and upgrading, requiring retained funds for operational development121124 - Company's profit distribution over the past three years: - 2016: Cash dividend of 0.1 yuan per 10 shares - 2015: Cash dividend of 0.56 yuan per 10 shares, 12 bonus shares per 10 shares from capital reserve - 2015 H1: Cash dividend of 0.30 yuan per 10 shares122 Implementation of Equity Incentive Plans, Employee Stock Ownership Plans, or Other Employee Incentive Measures The company implemented its 2017 restricted stock incentive plan, granting 5.47 million restricted shares to 65 recipients, while canceling 6.9129 million stock options from the 2013 plan due to unmet exercise conditions - The company completed the registration of 5.47 million restricted shares granted to 65 incentive recipients136 - Due to unmet exercise conditions, the company canceled 6,912,900 stock options from the 2013 first-phase stock option incentive plan136 Explanation of Other Significant Matters During the reporting period, the company issued 240 million yuan in corporate bonds at a 6.2% coupon rate, advanced its 2017 non-public stock offering, and signed strategic cooperation agreements with Shanghai Yiguo and Honghu Municipal People's Government to expand business partnerships - The company successfully issued the first tranche of its 2017 corporate bonds, with an actual issuance size of 240 million yuan and a coupon rate of 6.2%153 - The company is advancing its non-public stock offering and has entered the feedback response stage with the CSRC153 - The company signed a 'Strategic Cooperation Agreement' with Shanghai Yiguo E-commerce Co., Ltd., planning comprehensive cooperation in resources, R&D, production, branding, and capital154 Share Changes and Shareholder Information Share Capital Changes During the reporting period, the company's total share capital increased from 778 million to 784 million shares due to the implementation of a restricted stock incentive plan, adding 5.47 million shares, which also affected restricted and unrestricted share counts - During the reporting period, the company's total share capital increased to 783,845,620 shares due to the grant of 5.47 million restricted shares157 Shareholders and Actual Controller Information As of the end of the reporting period, the company had 21,149 shareholders, with Xinyu Guotong Investment Management Co., Ltd. as the controlling shareholder (32.49% stake) and Mr. Li Zhong as the actual controller, with the top two shareholders having related party relationships Top Five Shareholders' Shareholding | Shareholder Name | Shareholder Type | Shareholding Percentage | Shares Held at Period End | Pledge or Freeze Status | | :--- | :--- | :--- | :--- | :--- | | Xinyu Guotong Investment Management Co., Ltd. | Domestic Non-State-Owned Legal Person | 32.49% | 254,658,712 | Pledged 227,256,797 | | Guanlian International Investment Co., Ltd. | Overseas Legal Person | 14.58% | 114,314,112 | Pledged 61,000,000 | | Li Zhong | Domestic Natural Person | 2.29% | 17,938,605 | Pledged 16,938,700 | | Li Guotong | Domestic Natural Person | 1.50% | 11,748,000 | Pledged 11,748,000 | | Chen Han | Domestic Natural Person | 1.50% | 11,748,000 | Pledged 11,748,000 | - The company's controlling shareholder is Xinyu Guotong Investment Management Co., Ltd., and the actual controller is Li Zhong166167 Directors, Supervisors, Senior Management, and Employees Shareholding Changes and Remuneration of Directors, Supervisors, and Senior Management During the reporting period, some directors, supervisors, and senior management increased their shareholdings through the equity incentive plan, with the total remuneration paid to 16 such individuals in 2017 amounting to 4.9477 million yuan, and company founders also receiving compensation from shareholder entities - During the reporting period, several senior management personnel increased their shareholdings by a total of 1.95 million shares through the 2017 restricted stock incentive plan174190 - In 2017, the total pre-tax remuneration paid by the company to its directors, supervisors, and senior management (16 individuals in total) was 4.9477 million yuan188 Employee Information As of the end of the reporting period, the company had 3,779 employees, with production personnel constituting the largest group at 2,825, and the majority of employees holding vocational or lower education degrees, supported by a performance-linked compensation and training system Employee Professional Composition | Professional Category | Number of People | | :--- | :--- | | Production Personnel | 2,825 | | Sales Personnel | 153 | | Technical Personnel | 371 | | Financial Personnel | 57 | | Administrative Personnel | 373 | | Total | 3,779 | Corporate Governance Overview of Corporate Governance During the reporting period, the company operated in strict compliance with relevant laws and regulations, maintaining a sound corporate governance structure with independence from its controlling shareholder in business, assets, personnel, organization, and finance, aligning with regulatory requirements - The company's corporate governance status complies with relevant normative documents from the China Securities Regulatory Commission and Shenzhen Stock Exchange196213 - The company is independent of its controlling shareholder in five aspects: business, assets, personnel, organization, and finance, possessing autonomous operating capabilities in the market197198214215216 Internal Control Evaluation Report The company conducted a self-assessment of its internal controls, covering 100% of consolidated assets and operating revenue, and found no material or significant deficiencies in financial or non-financial reporting internal controls during the reporting period - According to the internal control evaluation report, the company found no material or significant deficiencies in financial or non-financial reporting during the reporting period233234 Corporate Bonds Information Corporate Bond Basic Information and Proceeds Usage The company issued the '17 Guoshui 01' corporate bond on July 31, 2017, with a 240 million yuan issuance size, 3-year term, and 6.20% coupon rate, with all net proceeds used to supplement working capital as committed Corporate Bond Basic Information | Bond Abbreviation | Bond Code | Issue Date | Maturity Date | Bond Balance (10k yuan) | Interest Rate | | :--- | :--- | :--- | :--- | :--- | :--- | | 17 国水 01 | 112560 | 2017年07月31日 | 2020年08月03日 | 24,000 | 6.20% | - The proceeds from this bond issuance, 237.84 million yuan, have been used to supplement the company's operating working capital, consistent with the prospectus commitments240 Key Accounting Data and Financial Indicators for the Past 2 Years as of Reporting Period End As of year-end 2017, the company's solvency indicators showed improvement, with EBITDA significantly increasing by 118.43% and interest coverage ratio rising from 2.69 to 3.8, indicating enhanced ability to cover interest expenses, while the asset-liability ratio increased to 50.44% Key Solvency Financial Indicators | Item | 2017 | 2016 | Period-on-Period Change Rate | | :--- | :--- | :--- | :--- | | EBITDA (10k yuan) | 26,577.98 | 12,167.56 | 118.43% | | Asset-Liability Ratio | 50.44% | 41.25% | 9.19% | | Interest Coverage Ratio | 3.8 | 2.69 | 41.26% | | Loan Repayment Rate | 100.00% | 100.00% | 0.00% | | Interest Payment Rate | 100.00% | 100.00% | 0.00% | Financial Report Audit Report Ruihua Certified Public Accountants issued a standard unqualified audit opinion on the company's 2017 financial statements, highlighting key audit matters related to allowance for doubtful accounts and inventory impairment provisions due to significant management estimates - The auditing firm is Ruihua Certified Public Accountants (Special General Partnership), which issued a standard unqualified audit opinion254256 - Key audit matters include 'allowance for doubtful accounts' and 'inventory impairment provisions', primarily because these items significantly impact financial statements and involve critical management judgments258259262 Financial Statements The financial statements present the company's financial position as of December 31, 2017, and its operating results and cash flows for the year, including consolidated balance sheets, income statements, cash flow statements, and statements of changes in owners' equity, along with parent company equivalents Consolidated Balance Sheet Summary (yuan) | Item | Period-End Balance | Period-Beginning Balance | | :--- | :--- | :--- | | Total Assets | 3,932,109,674.26 | 3,088,429,886.98 | | Total Liabilities | 1,983,217,550.26 | 1,273,936,804.54 | | Total Owners' Equity Attributable to Parent Company | 1,948,892,124.00 | 1,814,493,082.44 | Consolidated Income Statement Summary (yuan) | Item | Current Period Amount | Prior Period Amount | | :--- | :--- | :--- | | Total Operating Revenue | 4,095,806,660.34 | 2,621,366,941.32 | | Operating Profit | 161,656,767.43 | 93,895,676.63 | | Total Profit | 163,083,323.09 | 104,436,802.04 | | Net Profit | 144,132,610.64 | 93,944,585.43 | Consolidated Cash Flow Statement Summary (yuan) | Item | Current Period Amount | Prior Period Amount | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | -381,767,222.42 | -212,926,569.51 | | Net Cash Flow from Investing Activities | -141,269,609.89 | -45,175,179.77 | | Net Cash Flow from Financing Activities | 647,172,886.67 | 257,090,984.54 | | Net Increase in Cash and Cash Equivalents | 97,280,083.84 | 12,599,253.17 | Notes to Consolidated Financial Statement Items This section details the composition and changes of major consolidated financial statement items, including accounts receivable with a book value of 746 million yuan and 59.08 million yuan in bad debt provisions, inventory with a book value of 2.035 billion yuan and 48.08 million yuan in impairment provisions, and short-term borrowings of 972.48 million yuan - At year-end, accounts receivable balance was 805 million yuan, with 59.0784 million yuan in bad debt provisions, resulting in a book value of 746 million yuan491 - At year-end, inventory balance was 2.083 billion yuan, with 48.077 million yuan in impairment provisions, resulting in a book value of 2.035 billion yuan506507 - At year-end, short-term borrowings totaled 972.48 million yuan, including 550 million yuan in secured and guaranteed borrowings and 255 million yuan in pledged borrowings533 - The company issued 240 million yuan in corporate bonds ('17 Guoshui 01') in 2017, with a year-end book balance of 238 million yuan for bonds payable546547 Reference Documents Catalog Reference Documents Catalog This section lists the reference documents available for inspection, including original signed financial statements, audit reports, and all publicly disclosed documents from the reporting period, kept at the company's securities department