Huarui Precision(SH:688059)2025-04-28 11:40Financial Performance - The company's operating revenue for 2024 was CNY 759,057,280.46, a decrease of 4.43% compared to CNY 794,270,615.82 in 2023[22]. - The net profit attributable to shareholders for 2024 was CNY 106,959,100.94, down 32.26% from CNY 157,906,595.78 in 2023[22]. - The basic earnings per share for 2024 were CNY 1.73, a decrease of 32.42% from CNY 2.56 in 2023[23]. - The company's operating revenue decreased by 4.43% year-on-year, amounting to ¥759,057,280.46, primarily due to macroeconomic fluctuations[90]. - The cost of sales increased by 6.10% year-on-year, reaching ¥459,538,994.69, indicating rising operational costs[92]. - Operating costs increased by 6.10% year-on-year, mainly due to rising fixed costs such as depreciation and labor[93]. - The gross margin for turning tools was 42.65%, down 5.41 percentage points year-on-year, while milling tools had a gross margin of 49.45%, down 1.98 percentage points[96][97]. - The company reported a significant increase in revenue, achieving a total of $1.2 billion, representing a 15% year-over-year growth[146]. Cash Flow and Dividends - The company plans to distribute a cash dividend of 6 RMB per 10 shares, totaling approximately 37.35 million RMB, representing a cash dividend ratio of 34.92%[5]. - The net cash flow from operating activities increased by 4,576.64% to CNY 117,659,877.69 in 2024, primarily due to improved management of accounts receivable[24]. - The company plans to distribute cash dividends amounting to no less than 10% of the distributable profit for the year, or a cumulative cash distribution of no less than 30% of the average annual distributable profit over the last three years post-IPO[173]. - The company aims for a minimum cash dividend proportion of 80% for mature stages without major capital expenditures, 40% with major expenditures, and 20% for growth stages with major expenditures[174]. - Cumulative cash dividends over the last three fiscal years amount to 139,643,495.20 RMB, with an average cash dividend payout ratio of 97.24%[183]. Share Capital and Equity - The company intends to increase its total share capital by 4 shares for every 10 shares held, resulting in an increase of approximately 24.90 million shares, raising the total share capital to about 87.16 million shares[6]. - The company confirmed share-based payment expenses of 1,577,990.78 RMB for the 2022 restricted stock incentive plan, which did not meet the company-level vesting conditions[188]. - A total of 1,232,000 restricted stocks were granted under the 2022 incentive plan, with 406,550 shares becoming vested during the reporting period[186]. - The company’s total share capital as of March 31, 2025, is projected to be 62,257,112 shares before the proposed capital increase[180]. Research and Development - The research and development expenditure as a percentage of operating revenue was 6.69% in 2024, down from 7.66% in 2023[23]. - The company has developed 54 unique hard alloy substrate grades, enhancing product series coverage by 9 grades for CNC blades and 53 grades for overall tools[54]. - The company has successfully developed 17 types of nano-coating materials and 32 coating processes, with 16 types applicable to CNC blades and 9 types to overall tools[55]. - The company is focusing on enhancing the high-speed cutting performance of CNC blades to meet the increasing demand for efficient processing from customers[51]. - The company is actively researching cutting tools for emerging fields such as aerospace and robotics, aiming to address the challenges posed by new materials and precision requirements[51]. - The company has invested a total of 153,180,135.00 RMB in research and development over the last three fiscal years, accounting for 7.11% of cumulative revenue[183]. Market and Industry Position - The cutting tool industry market size in China reached 46.4 billion yuan in 2022, representing a growth of 44.25% compared to 2016[48]. - The company ranked second in the production of hard alloy CNC blades among domestic enterprises in 2023, third in 2022, and third in 2021[49]. - The global cutting tool market is projected to reach $39 billion by 2022, with a compound annual growth rate (CAGR) of approximately 2.7% from 2016 to 2022[127]. - The CNC machine tool penetration rate in China increased from 28.83% in 2013 to 44.85% in 2021, showing significant growth potential compared to over 60% in developed countries[130]. Governance and Compliance - The board of directors and management have confirmed the accuracy and completeness of the annual report[3]. - The company has not disclosed any special arrangements regarding corporate governance[8]. - The company is committed to timely and accurate information disclosure, adhering to legal and regulatory standards[138]. - The company has implemented a stock incentive plan to retain and motivate key personnel, which has shown positive results in shareholding changes[145]. - The company plans to hold its annual shareholder meeting to discuss key governance and operational matters[156]. Operational Risks and Management - The company has outlined various operational risks and corresponding mitigation strategies in the report[3]. - The company emphasizes the importance of understanding the risks associated with forward-looking statements made in the report[7]. - The company faces risks related to the loss of key distributors, which could adversely affect short-term operational performance[84]. - The company is exposed to risks from fluctuations in raw material prices, particularly tungsten carbide powder and cobalt, which could impact profitability if costs rise significantly[84]. Employee and Workforce - The company has 143 R&D personnel, accounting for 13.57% of the total workforce, with a total R&D personnel compensation of RMB 27.39 million, an increase from RMB 25.75 million in the previous period[74]. - The educational background of employees includes 4 with PhDs, 35 with master's degrees, 237 with bachelor's degrees, and 778 with associate degrees or below[166]. - The company emphasizes employee welfare, organizing various health and recreational activities, and providing support for employees in need[196]. Environmental and Social Responsibility - The company has effectively treated waste generated during production, meeting discharge standards for wastewater, waste gas, noise, and solid waste[200]. - The company does not belong to the key pollutant discharge units as per environmental protection department announcements[199]. - The company has invested 1.2702 million yuan in environmental protection during the reporting period[198].