Financial Performance - In 2021, China Harmony Auto achieved new car sales of 40,791 units, representing a year-on-year growth of 11.5%, surpassing the industry average growth rate[27]. - The total revenue for 2021 was RMB 18.4 billion, an increase of 22.0% compared to the previous year, with new car sales revenue contributing RMB 15.6 billion, up 21.1%[27]. - The net profit for 2021, after excluding non-recurring items, reached RMB 757 million, marking a significant year-on-year increase of 49.6%[27]. - The net cash generated from operating activities was RMB 776 million, indicating a stable financial position[27]. - The gross profit for 2021 was RMB 1,751.3 million, up 34.8% from RMB 1,298.8 million in 2020[51]. - The gross margin improved to 9.7% in 2021, compared to 8.8% in 2020, with new car sales gross margin at 4.3%[51]. - The company's revenue for 2021 was RMB 17,981.1 million, an increase of 21.9% compared to RMB 14,746.9 million in 2020[49]. - New car sales revenue reached RMB 15,609.7 million, growing by 21.1% from the previous year[49]. - The company's net cash from operating activities was RMB 776.1 million in 2021[59]. - Capital expenditures for 2021 amounted to RMB 522.7 million, primarily for new sales network establishment[61]. Sales and Market Trends - The sales volume in the second half of 2021 decreased by 16.5% to 18,344 units, while the first half saw a growth of 53.6%[43]. - The sales of BMW (including Mini) showed resilience with a year-on-year growth of 11.4% despite semiconductor shortages[43]. - The demand for ultra-luxury brands drove significant sales increases, with Ferrari, Rolls-Royce, Bentley, and Maserati achieving year-on-year growths of 94.3%, 36.7%, 126.9%, and 35.4% respectively[43]. - Electric vehicle sales in China surged by 169% in 2021, contrasting with a 4% decline in fuel vehicle sales[40]. - The penetration rate of electric vehicles in China rose from 5% in 2019 to 17% by the end of 2021[40]. - The overall retail market sales in China for 2021 reached 20,145,868 units, with a year-on-year growth of 4.4%[39]. Business Strategy and Expansion - The company plans to focus on core business operations, emphasizing luxury and ultra-luxury brand 4S store operations, while supporting investments in new energy vehicle manufacturing and after-sales services[29]. - The strategic focus for 2022 includes enhancing the positioning as a "full luxury and ultra-luxury automobile dealer group" and expanding into potential growth areas[29]. - The company plans to continue focusing on the luxury and ultra-luxury car market, optimizing brand structure and expanding the distribution network[35]. - The company added 5 new retail outlets, including 2 Ferrari, 2 Lexus, and 1 Lamborghini store, while also obtaining authorization for 4 additional outlets[28]. - The company aims to enhance operational efficiency through a flat organizational structure and performance-based reforms[34]. Corporate Governance - The company is committed to high standards of corporate governance and has complied with the relevant rules of the Hong Kong Stock Exchange[77]. - The company established three committees: Audit Committee, Remuneration Committee, and Nomination Committee to oversee specific affairs[92]. - The Audit Committee held four meetings during the year ending December 31, 2021, to review interim and annual financial performance and reports[96]. - The Remuneration Committee conducted two meetings in the year ending December 31, 2021, to review the remuneration of executive directors and senior management[98]. - The Nomination Committee is responsible for reviewing the composition of the board and providing recommendations for appointments and succession planning[100]. - The board currently consists of 7 male directors and 1 female director, reflecting the company's commitment to board diversity[100]. - The company emphasizes the importance of continuous professional development for directors to ensure informed contributions to the board[91]. - The company has adopted a board diversity policy to support its strategic goals and sustainable development[100]. Employee and Talent Management - Employee count increased to 4,551 as of December 31, 2021, from 4,206 in 2020, primarily due to business expansion[73]. - Employee costs for 2021 were approximately RMB 464.1 million, up from RMB 352.8 million in 2020[73]. - The company values employee relationships, providing competitive salaries and a superior working environment to retain talent and enhance productivity[178]. - The company has a stock option plan established in June 2015, aimed at attracting and retaining talented employees by offering them the opportunity to purchase shares[192]. - The company granted stock options for a total of 20 million shares to eligible employees in December 2019, further incentivizing employee performance[193]. Risk Management and Compliance - The company faced significant risks and uncertainties during the year, which were discussed in the management discussion and analysis section of the annual report[153]. - The board believes that the current risk management and internal control systems are effective and sufficient, and has accepted the improvement suggestions from the internal control consultant[120]. - The internal audit department plays a crucial role in monitoring the company's internal governance and conducts regular audits of all branches and subsidiaries[122]. - The company has established a three-tier risk control structure to implement its internal control and risk management policies[122]. - The company has no significant management contracts in place for the year ending December 31, 2021, indicating a focus on internal management[188]. Shareholder Relations - Shareholders holding at least 10% of the company's paid-up capital have the right to request a special general meeting within two months of submitting a written request[127]. - Shareholders are encouraged to submit written inquiries to the board, as the company typically does not handle verbal or anonymous inquiries[130]. - The company emphasizes the importance of effective communication with shareholders to enhance investor relations and understanding of business performance and strategy[132]. - The annual general meeting will be held with the presence of the board chairman and committee chairs to address shareholder inquiries[132]. - The company has adopted a dividend policy but does not have a preset dividend rate, allowing the board to propose dividends based on financial conditions[132]. Supplier Relationships - The company maintains long-term stable relationships with major automotive suppliers such as BMW, Maserati, Lexus, Land Rover, and Ferrari, ensuring stable development in automotive sales[177]. - The company collaborates with 31 domestic non-original automotive equipment and parts suppliers, emphasizing a fair and transparent selection process for suppliers[177]. - The company regularly reviews supplier performance to ensure high standards and to eliminate underperforming suppliers[177]. - The company's procurement from the top five suppliers accounted for approximately 88.1% of total procurement, with the largest supplier contributing 50.3%[174]. New Energy Vehicle Initiatives - The company has been actively involved in the development of new energy electric vehicles, utilizing funds raised from share placements for manufacturing[157]. - The company plans to allocate about 35% of the proceeds from a previous placement to invest in opportunities within the new energy vehicle sector[159]. - The company is closely monitoring macroeconomic conditions and industry policies that may impact the automotive sector[167][169].
和谐汽车(03836) - 2021 - 年度财报