LECRON(SZ:300343)2018-08-29 16:00Acquisitions and Integration - The company successfully acquired four internet companies: Shanghai Xinhhe for CNY 132.2 million, Shanghai Lindong and Shanghai Jichuang for CNY 173.15 million, and Shanghai Aotou for CNY 64.807 million, resulting in a goodwill of CNY 326.97107 million as of June 30, 2018[6]. - The management acknowledges the risk of integration challenges due to the lack of experience in internet marketing management after transitioning from the chemical industry[5]. - The company has developed a comprehensive integration plan for business, assets, finance, and personnel to stabilize core teams across subsidiaries[5]. - The company aims to enhance its market presence through strategic acquisitions and integration of internet marketing capabilities[5]. - The company faces integration risks due to the significant differences between the chemical and internet marketing industries, which may affect management effectiveness post-acquisition[71]. - The company plans to enhance integration efforts across subsidiaries, including regular financial checks and professional training to improve operational capabilities[72]. Financial Performance - Total revenue for the reporting period was ¥1,583,069,868.63, representing a 53.32% increase compared to ¥1,032,547,812.83 in the same period last year[21]. - Net profit attributable to shareholders decreased by 24.26% to ¥98,774,881.17 from ¥130,405,398.50 year-on-year[21]. - Net cash flow from operating activities turned negative at -¥80,333,870.98, a decline of 126.56% compared to ¥302,516,002.88 in the previous year[21]. - Basic and diluted earnings per share decreased by 23.04% to ¥0.170 from ¥0.2209[21]. - Total assets decreased by 1.71% to ¥5,965,391,505.16 from ¥6,069,102,302.41 at the end of the previous year[21]. - The company reported a significant increase in revenue, achieving a total of 1.5 billion RMB for the first half of 2018, representing a year-on-year growth of 20%[83]. - The company provided a positive outlook for the second half of 2018, projecting a revenue growth of 25%[85]. Cash Flow and Liquidity - Cash and cash equivalents decreased by 41.21% to CNY 204,867,611.30, mainly due to repayment of loans to controlling shareholders[39]. - The company reported a net cash outflow from operating activities of CNY 80,333,870.98, a decrease of 126.56% compared to the previous year[44]. - The ending balance of cash and cash equivalents was 135,518,579.25 CNY, down from 474,091,464.07 CNY in the previous period, showing a significant reduction in liquidity[172]. Accounts Receivable and Inventory - The company reported a significant increase in accounts receivable due to the rapid growth following the acquisitions, with potential risks of delayed payments from clients in the automotive industry[7]. - Accounts receivable decreased by 60.54% to CNY 97,300,668.45, primarily due to the collection of matured notes[39]. - Inventory increased by 54.33% due to the rise in contract service costs and raw material reserves[31]. - The total amount of accounts receivable increased to approximately CNY 1.78 billion, accounting for 29.86% of total assets, up from 21.47% in the previous year[56]. Research and Development - The company is focused on developing new technologies and products in the polyurethane sector to meet diverse customer needs[29]. - The company has introduced several innovative polyurethane formulations that meet international standards through its R&D efforts[33]. - The company reported a significant increase in research and development expenses, which rose by 23.43% to approximately CNY 12.07 million compared to CNY 9.78 million in the previous year[51]. Compliance and Governance - The company is committed to ensuring the accuracy and completeness of its financial reports as stated by its management[4]. - The company operates under the Shenzhen Stock Exchange's guidelines for internet marketing businesses, ensuring compliance with disclosure requirements[5]. - The company has committed to maintaining compliance with promises made during asset restructuring, ensuring no violations occurred during the reporting period[80]. - The company has implemented a restricted stock incentive plan, approved on May 26, 2018, to enhance governance and motivate key personnel[108]. Shareholder Information - The total number of ordinary shareholders at the end of the reporting period is 21,446[138]. - The largest shareholder, Li Hongguo, holds 23.66% of the shares, totaling 34,917,101 shares, with 115,243,000 shares pledged[138]. - The company plans to release 25% of the restricted shares held by executives annually during their tenure[135]. Legal Matters - The company reported a significant legal dispute involving a construction contract with Dalian Albin Group, with a claim amount of RMB 7,631,187 (approximately 763.12 million) pending resolution[101]. - The company is actively pursuing legal remedies to recover the claimed construction fees from Dalian Albin Group[102]. Future Outlook - New product launches are expected to contribute an additional 300 million RMB in revenue by the end of 2018[86]. - The company is expanding its market presence in Southeast Asia, targeting a 10% market share by 2020[87]. - Future guidance indicates a target of 2 billion RMB in revenue for the full year 2018, reflecting a 20% increase from 2017[83].