VEKEN TECHNOLOGY(SH:600152)2020-04-28 16:00Financial Performance - The net profit attributable to the parent company for 2019 was -64,080,936.68 CNY, with a net profit of -20,476,299.21 CNY on a parent company basis[5]. - The company's operating revenue for 2019 was CNY 1,645,001,121.19, representing a 2.64% increase compared to CNY 1,602,678,942.81 in 2018[19]. - The net profit attributable to shareholders for 2019 was a loss of CNY 64,080,936.68, a decrease of 217.41% from a profit of CNY 54,579,586.18 in 2018[19]. - The basic earnings per share for 2019 was -CNY 0.1520, a decline of 221.70% compared to CNY 0.1249 in 2018[19]. - The weighted average return on equity for 2019 was -4.65%, down 8.54 percentage points from 3.89% in 2018[19]. - The net cash flow from operating activities for 2019 was -CNY 60,375,774.88, compared to -CNY 17,225,792.59 in 2018[19]. - The total profit for the period was a loss of CNY 71.16 million, with a net profit attributable to shareholders of CNY -64.08 million, a decrease of 217.41% year-on-year[45]. - The company reported a net cash flow from operating activities of CNY -60.38 million, a significant decline compared to CNY -17.23 million in the previous year[50]. Corporate Governance and Compliance - The company has received a standard unqualified audit report from Lixin Zhonglian Accounting Firm[4]. - The company’s financial report is guaranteed to be true, accurate, and complete by its board of directors and management[8]. - The company has not engaged in non-operating fund occupation by controlling shareholders or related parties[7]. - The company has not violated decision-making procedures for providing guarantees[7]. - The company is committed to strengthening internal controls to mitigate investment, business, and operational risks[44]. - The company is enhancing internal control measures to mitigate investment, operational, and business risks, while adapting to new regulations and improving corporate governance[96]. Investment and Growth Strategies - The company plans to invest in Shenzhen Zhuoli Neng Electronics Co., Ltd. by acquiring 10% of its equity for ¥100 million, aiming to find new business growth points[34]. - The company aims to enhance its market competitiveness by strictly controlling product quality and improving production efficiency through automation[43]. - The company plans to raise funds through a private placement to expand its fully automated polymer lithium battery production line in Dongguan, addressing capacity bottlenecks and enhancing competitiveness in the consumer lithium-ion battery sector[94]. - The company plans to enhance its market position by focusing on high-growth markets such as electric tools, smart home devices, and electronic vaporizers[88]. - The company intends to optimize its customer structure by increasing the proportion of high-quality clients and expanding its 3C customer base[93]. - The company is pursuing industrial acquisitions to enhance market competitiveness, leveraging its financing and networking resources to achieve synergistic benefits[95]. Research and Development - The company has over 500 professionals dedicated to lithium-ion battery R&D and has applied for more than 100 related patents, including 25 invention patents and 15 utility model patents[36][37]. - The company is actively involved in research and development of new products and technologies to drive future growth[151]. - The company will invest in R&D to enhance lithium battery energy density and safety performance, aiming to establish an industry-leading research institute[92]. - The total R&D investment accounts for 4.17% of the operating revenue[62]. Environmental Management - The company has established a comprehensive environmental management system to ensure compliance with pollution prevention and environmental protection throughout its operations[156]. - The company reported actual emissions of 313.72 tons of COD and 31.37 tons of ammonia nitrogen, both within the permissible limits set by environmental standards[158]. - The company conducts regular training and emergency drills to enhance employees' awareness and skills in environmental protection and incident response[164]. - The company is focusing on energy efficiency and pollution reduction, investing in environmental protection equipment and technology upgrades[6]. Shareholder and Equity Management - The company did not distribute any cash dividends in 2019, 2018, and 2017, with net profits of -64,080,936.68 RMB, 54,579,586.18 RMB, and 16,628,209.18 RMB respectively[104]. - The company has committed to repurchasing a minimum of 2 million shares and a maximum of 8.81 million shares within 12 months starting from February 12, 2018[105]. - The total share capital of the company decreased from 440,931,640 shares to 420,920,087 shares due to the repurchase and cancellation of 18,641,553 shares related to unfulfilled performance commitments[172]. - The company repurchased and canceled a total of 1,370,000 shares of restricted stock due to the departure of nine incentive plan participants[173]. Market and Industry Trends - The global smartphone market saw a slight decline, with China's market shipment volume dropping by 7.5% to approximately 370 million units in 2019[31]. - The wearable device market is expected to see a shipment volume exceeding 222.9 million units globally in 2019, indicating strong growth potential for lithium-ion batteries in this segment[31]. - The small power lithium battery market in China saw a shipment volume of 14.7 GWh in 2019, with a market value exceeding $10 billion, maintaining a growth rate above 50% for two consecutive years[70]. - The company’s revenue from the lithium battery sector is projected to grow at a compound annual growth rate of 15% from 2019 to 2025, with market demand expected to rise from $37.4 billion in 2018 to $98 billion by 2025[68]. Related Party Transactions - The company engaged in related party transactions amounting to 21.64 million RMB for purchases and 861.16 million RMB for sales, representing 0.56% of the company's main business income[128]. - The company recorded a significant related party transaction of 2,107,429.41 RMB for wastewater treatment services, with a pricing difference of 10.80% compared to market rates[127]. - The company reported a related party transaction of 5,193,560.10 RMB for processing services, with a pricing difference of 26.61% compared to market rates[127]. Risks and Challenges - The company acknowledges risks related to investment project performance, macroeconomic fluctuations, and intensified industry competition, which could impact profitability[97][98]. - The company faces risks from price volatility in lithium-ion batteries, which could affect sales revenue and profit margins due to rapid changes in the consumer electronics market[100]. - The company attributed the failure to meet performance commitments primarily to overcapacity in the power lithium battery sector, which intensified competition in the consumer lithium battery market[109].