Baosteel(SH:600019)2020-04-28 16:00Financial Performance - The company's operating revenue for 2019 was RMB 291,594 million, a decrease of 4.42% compared to RMB 305,081 million in 2018[17]. - The net profit attributable to shareholders was RMB 12,423 million, down 42.08% from RMB 21,449 million in 2018[17]. - The net profit after deducting non-recurring gains and losses was RMB 11,060 million, a decline of 46.40% from RMB 20,634 million in 2018[17]. - The net cash flow from operating activities was RMB 29,504 million, a decrease of 35.25% compared to RMB 45,568 million in 2018[17]. - The basic earnings per share for 2019 was RMB 0.56, down 41.67% from RMB 0.96 in 2018[18]. - The weighted average return on equity decreased to 7.05%, down 5.63 percentage points from 12.68% in 2018[18]. - The company reported a total asset value of RMB 339,633 million at the end of 2019, an increase of 1.13% from RMB 335,850 million at the end of 2018[17]. - The company achieved a total profit of RMB 14.99 billion in 2019, maintaining a leading position among domestic peers despite challenges such as a sluggish automotive market and rising iron ore prices[26]. - The company reported a significant increase in investment cash flow, with a net outflow of 22.229 billion RMB, compared to a smaller outflow of 4.126 billion RMB in the previous year, marking a 438.8% increase[47]. - The company reported a net profit of CNY 7,895,809,057.59 for 2019, with an expected distributable profit of CNY 39,469,595,544.85 at year-end[94]. Dividend Policy - The company plans to distribute a cash dividend of 0.28 CNY per share, totaling approximately 6.24 billion CNY, which accounts for 50.20% of the net profit attributable to shareholders[5]. - The company emphasizes a long-term cash dividend policy, distributing no less than 50% of the audited net profit each year[5]. - The proposed cash dividend for 2019 is CNY 0.28 per share, totaling approximately CNY 6,236,848,905, which represents 50.20% of the net profit attributable to shareholders[94][95]. - The total cash dividend for 2019 is projected to be CNY 62.37 billion, a decrease from CNY 111.34 billion in 2018[95]. - The cash dividend per share has decreased from CNY 0.50 in 2018 to CNY 0.28 in 2019[96]. Acquisitions and Investments - The company completed the acquisition of 100% equity in Wuhan Iron and Steel Engineering Technology Group Co., Ltd. for 292 million CNY, enhancing its operational capabilities[8]. - The company increased its investment in UHQ Chemical Co., Ltd. by 200 million RMB to build a 50,000 tons/year needle coke project, raising its shareholding from 51% to 70.25%[30]. - The company established a joint venture with JFE Chemical Corporation to operate a 10,000 tons/year graphite anode material project with a registered capital of 260 million RMB, where the company contributed 130 million RMB for a 51% stake[30]. - The company completed equity investment projects totaling RMB 1.5 billion, a decrease of RMB 80 million compared to the previous year[76]. - The company has agreed to invest in the Desheng Nickel Project, retaining the right to acquire the project in the future[101]. Operational Challenges - The company faces significant risks due to the global economic downturn caused by the COVID-19 pandemic, impacting steel demand and profitability[7]. - The company reported a significant increase in operational challenges due to high supply pressures in the steel industry[7]. - The company operates four major manufacturing bases, with increasing environmental regulations posing challenges to production and costs[7]. - The company’s major manufacturing base is located in first-tier cities, which increases exposure to stringent environmental policies[7]. - The company is focused on environmental sustainability, achieving zero wastewater discharge at the Dongshan base and receiving the highest environmental protection award in China[28]. Research and Development - The company has developed high-end products such as new generation automotive high-strength steel and electrical steel, which are at the international advanced level[23]. - The company’s R&D efforts led to a 4.9 percentage point increase in the proportion of invention patents, reaching 92.89% in 2019[26]. - The company’s R&D investment rate was 3.0%, with 92.89% of patent applications being for inventions, highlighting its focus on technological innovation[36]. - The company launched eight new products, including high-grade steel for electric vehicle motors and ultra-high-strength steel for various applications[60]. - The company is investing 2 billion RMB in R&D for advanced manufacturing technologies, aiming to enhance production efficiency by 15%[194]. Environmental Management - The company is committed to achieving zero major environmental incidents and completing ultra-low emission transformation projects[89]. - The company has achieved "zero wastewater discharge" capability, becoming the first steel enterprise in China to reach this milestone[160]. - The company maintained a zero exceedance rate for all major pollutants across its operations, demonstrating effective environmental management practices[157]. - The company has implemented comprehensive pollution control measures, including projects for flue gas desulfurization and wastewater treatment, enhancing environmental compliance[160]. - The company’s overall approach to environmental management reflects a commitment to "full coverage, zero tolerance, strict law enforcement, and practical results" in pollution control efforts[153]. Shareholder Structure - The total share capital of the company is 22,274,460,375 shares, with 173,373,450 shares under limited circulation and 22,101,086,925 shares under unlimited circulation[168]. - China Baowu Steel Group holds 50.73% of the company's shares, a decrease of 0.02 percentage points from the end of 2018[176]. - The company has a clear ownership structure with no actual controller identified, ensuring transparency in governance[186]. - The report highlights the importance of state-owned enterprises in the company's shareholder composition, reflecting the strategic nature of its operations[184]. - The company has maintained stable relationships with its major shareholders, which is crucial for long-term strategic planning[184]. Executive Compensation and Governance - The total pre-tax compensation for the executives during the reporting period amounted to 2,227.94 million[192]. - The company is actively managing its executive compensation, with specific amounts disclosed for each executive, ensuring transparency[191]. - The company is committed to maintaining a diverse board, with a mix of experienced male and female directors[191]. - The company’s management team has extensive experience in financial management and corporate governance, enhancing operational efficiency[199]. - The company has a strong focus on stock incentive plans for its executives, reflecting a commitment to align management interests with shareholder value[200].