LFBC(SZ:002513)2018-08-20 16:00Financial Performance - The company's operating revenue for the first half of 2018 was ¥918,372,635.56, representing a 7.86% increase compared to ¥851,468,078.03 in the same period last year[17]. - The net profit attributable to shareholders decreased by 49.33% to ¥30,783,765.61 from ¥60,755,677.37 year-on-year[17]. - The net profit after deducting non-recurring gains and losses fell by 58.72% to ¥24,128,617.22 compared to ¥58,449,380.64 in the previous year[17]. - Basic and diluted earnings per share both decreased by 50% to ¥0.09 from ¥0.18 year-on-year[17]. - The agricultural business achieved sales revenue of 822.09 million yuan, an increase of 15% year-on-year, but net profit decreased by 42.94% to 9.18 million yuan[37]. - The pharmaceutical business reported sales revenue of 96.28 million yuan, a decline of 29.51% year-on-year, with net profit dropping by 51.64% to 21.60 million yuan[38]. - The company's revenue for the reporting period reached ¥918,372,635.56, representing a year-on-year increase of 7.86% compared to ¥851,468,078.03 in the same period last year[40]. - The cost of sales increased by 17.37% to ¥702,269,607.76, up from ¥598,350,882.99 in the previous year[40]. - The pharmaceutical business saw a significant decline in revenue, dropping 31.47% to ¥93,609,595.17 from ¥136,598,940.83 in the previous year[41]. - The agricultural chemical business generated ¥810,635,130.22, accounting for 88.27% of total revenue, with a year-on-year growth of 14.52%[41]. Assets and Liabilities - The total assets at the end of the reporting period were ¥4,122,804,296.32, a 2.24% increase from ¥4,032,403,531.87 at the end of the previous year[17]. - The net assets attributable to shareholders increased by 1.21% to ¥2,563,847,537.43 from ¥2,533,185,235.40 at the end of the previous year[17]. - The company's total assets as of the end of the reporting period were CNY 3,752,883,886.34, compared to CNY 3,713,190,404.15 at the beginning of the year[153]. - Total liabilities increased to CNY 1,217,386,303.85 from CNY 1,190,652,145.12, indicating a rise of 2.0%[153]. - Cash and cash equivalents at the end of the period were CNY 206,429,986.88, slightly up from CNY 200,830,957.72[151]. - The company’s total liabilities decreased by 3,307,065.82 CNY during the period[182]. Cash Flow - The net cash flow from operating activities increased by 13.56% to ¥162,860,422.42 from ¥143,417,256.02 in the same period last year[17]. - The net cash flow from operating activities was ¥162,860,422.42, an increase of 13.56% from ¥143,417,256.02 in the previous year[40]. - The company reported a total cash inflow from operating activities of 612,100,683.97 yuan, while cash outflow was 397,090,711.08 yuan, resulting in a net cash inflow of 215,009,972.89 yuan[167]. - The ending balance of cash and cash equivalents was 23,746,118.91 yuan, down from 115,213,331.33 yuan in the previous period[169]. Business Operations - The main business activities include agricultural chemicals and pharmaceuticals, focusing on the production and sales of fungicides, insecticides, herbicides, and fine chemical intermediates[25]. - The agricultural chemicals segment is divided into two main categories: phosgene products and organophosphorus products, with a range of pesticides and intermediates produced[25]. - The company employs a "sales-driven production" model, where the sales department submits monthly sales plans to the production department to align production with market demand[27]. - The procurement strategy focuses on cost reduction and stable supply, utilizing competitive bidding for raw materials and establishing long-term partnerships with suppliers[27]. - The company exports its agricultural products primarily through self-operated exports and domestic trading companies, conducting regular market research to understand international market dynamics[27]. - The company emphasizes the importance of maintaining inventory levels and production capacity to meet both domestic and international sales demands[27]. Environmental Compliance - The company emphasizes the importance of environmental protection and has been developing clean production and circular economy practices to mitigate ecological risks[60]. - The company has incurred a penalty of CNY 600,000 due to environmental violations, including a fine of CNY 150,000 for VOC emissions and CNY 500,000 for other infractions[87]. - The company has reported a significant reduction in wastewater discharge due to the implementation of three MVR environmental desalination units, achieving a daily wastewater treatment capacity exceeding 850 tons[82]. - The company has implemented a comprehensive environmental remediation plan, which has been reported to local environmental authorities[116]. - The company has established an environmental remediation leadership group to oversee and ensure compliance with environmental regulations[115]. - The company has achieved compliance with wastewater discharge standards, reflecting its commitment to environmental protection[108]. Risks and Challenges - The company faces various risks including market competition, safety and environmental risks, and raw material price fluctuations in its agricultural chemical business[4]. - The decline in performance is attributed to production losses due to environmental rectification and adverse impacts from pharmaceutical policies and market changes affecting Ark Pharmaceutical[59]. - Approximately two-thirds of the company's agricultural business revenue comes from exports, making it vulnerable to exchange rate fluctuations, particularly against the US dollar[61]. - The company faces risks related to raw material price volatility, as key materials are influenced by energy, transportation, and national policies[61]. - The pharmaceutical sector is impacted by industry policy risks, including the implementation of basic drug systems and procurement policies that affect the operating environment[62]. - New drug research and development poses significant risks, including technical and commercial uncertainties that could affect future revenue[63]. Corporate Governance - The company plans not to distribute cash dividends or issue bonus shares[5]. - The company has committed to not engaging in any competitive activities with its subsidiaries and controlling shareholders[70]. - The company guarantees that it will not utilize its shareholder status to harm the interests of the company and its shareholders[72]. - The company will not request any form of guarantee from Jiangsu Lanfeng Biochemical Co., Ltd. for its controlled companies[73]. - The company aims to avoid and reduce related party transactions and will comply with regulatory requirements[75]. - The company has outlined a strategy to maintain independent operations and decision-making processes[75]. Shareholder Information - The total number of ordinary shareholders at the end of the reporting period is 16,219[130]. - Jiangsu Suhua Group holds 20.09% of shares, totaling 68,334,137 shares, with 39,000,000 shares pledged[130]. - Wang Yu, an individual shareholder, holds 9.88% of shares, totaling 33,610,001 shares, with 9,816,590 shares pledged[130]. - The total number of restricted shares at the end of the period is 85,673,008[127]. - The largest shareholder, Jiangsu Suhua Group, has not changed its shareholding during the reporting period[130]. Research and Development - Key pharmaceutical products include Donepezil Hydrochloride Tablets for Alzheimer's treatment and various anti-infection and anti-tumor medications, with specific indications listed for each product[26]. - The company has established partnerships with renowned research institutions to enhance its pharmaceutical R&D capabilities[32]. - The company has a diverse product portfolio in the pharmaceutical sector, including treatments for cardiovascular diseases and cancer, with specific products aimed at various health conditions[26]. Legal Matters - The company is actively working to resolve issues related to the repayment commitments and is in communication with relevant authorities[78]. - The company is pursuing legal action against Wang Yu and related parties to recover the misappropriated funds amounting to approximately CNY 336.86 million as of June 30, 2018[80]. - The company has ongoing litigation involving a total of CNY 1.35 million related to a sales contract dispute, which has been resolved through mediation[84]. - The company has reported a pending lawsuit with a claim amount of CNY 4.33 million, which is currently under review[85].