NSWRC(SH:600165)2021-04-26 16:00Financial Performance - In 2020, the company's operating revenue was CNY 119,114,953.74, a decrease of 55.18% compared to CNY 265,756,858.64 in 2019[22] - The net profit attributable to shareholders was CNY 20,906,030.80, a significant recovery from a loss of CNY 44,952,125.08 in 2019[22] - The net assets attributable to shareholders increased by 6.29% to CNY 956,151,389.74 at the end of 2020, compared to CNY 899,553,326.37 at the end of 2019[22] - Total assets rose by 48.35% to CNY 3,334,571,091.58 in 2020, up from CNY 2,247,718,828.91 in 2019[22] - The company reported a net cash flow from operating activities of CNY -41,059,918.36, an improvement from CNY -47,799,953.98 in 2019[22] - Basic earnings per share for 2020 was CNY 0.031, compared to a loss of CNY 0.066 in 2019, marking a significant recovery[23] - The weighted average return on equity increased to 2.316% in 2020 from -5.019% in 2019, indicating improved profitability[23] - In Q4 2020, the company reported a net profit attributable to shareholders of CNY 29,596,804.21, a turnaround from losses in the previous three quarters[24] - The total revenue for Q3 2020 was CNY 69,556,352.51, showing a strong performance compared to earlier quarters[24] - Non-recurring gains for 2020 amounted to CNY 17,068,484.37, significantly impacting the overall financial results[26] Operational Challenges - The company did not implement profit distribution or capital reserve transfer to share capital for the year 2020 due to accumulated losses[5] - The company has disclosed potential risks in its future plans, urging investors to be cautious[6] - The company experienced non-operating fund occupation by controlling shareholders and related parties[7] - The company is focused on enhancing its financial stability and addressing operational challenges in the upcoming periods[6] - The company faced challenges in 2020, achieving only 44.4% of its sales target for activated carbon products due to price drops and reduced orders from the pandemic[80] - The ongoing COVID-19 pandemic continues to impact the company's operations, particularly in regions like Europe and the United States, posing risks to production and business activities[83] Investments and Subsidiaries - The company’s subsidiary, Huahui Environmental, completed a private placement raising up to CNY 200 million, increasing its registered capital from CNY 169.12 million to CNY 369.12 million[31] - Huahui Environmental holds 20 patents, including 4 invention patents, enhancing its competitive edge in the activated carbon market[29] - The company completed the transfer of a 10% stake in its subsidiary, Hengli New Materials, for CNY 100 million, with the total registered capital of Hengli New Materials now fully paid at CNY 1 billion[32] - The company acquired 100% equity of Ningxia Tianfu, enhancing its core competitiveness[73] - Huahui Environmental acquired 100% equity of Ningxia Tianfu for RMB 80 million, which is now included in the consolidated financial statements[75] Revenue and Cost Structure - The gross profit margin for the chemical raw materials and chemical products manufacturing segment was 13.20%, an increase of 11.58 percentage points year-on-year[42] - The company received government subsidies amounting to CNY 562.20 million, an increase from the previous year[36] - The company reported a decrease in sales volume of activated carbon by 30.43% year-on-year, with production volume down by 33.07%[44] - The company’s trading business revenue decreased, contributing to the overall decline in operating income[40] - The price of raw materials such as coal and tar significantly impacts the company's operating costs, accounting for 59.91% of product costs[67] Research and Development - Total R&D investment reached ¥23,109,904.33, accounting for 19.40% of operating revenue, with capitalized R&D expenses making up 95.82% of the total[50][51] - Research and development expenses amounted to 7.9 million RMB, focusing on projects like the preparation of acetone adsorption activated carbon[64] - The company has obtained 4 invention patents and 16 utility model patents during the reporting period, with 10 additional patents filed[64] Governance and Compliance - The audit report for the year was issued with a standard unqualified opinion by the accounting firm Xinyong Zhonghe[5] - The company has established a cash dividend policy that prioritizes cash distributions to protect the rights of investors, ensuring transparency and operational feasibility in profit distribution decisions[86] - The company has committed to not engaging in competitive business activities that could harm the interests of its subsidiaries and minority shareholders[88] - The company guarantees that it will not misuse its controlling shareholder status to disadvantage its subsidiaries or engage in unnecessary related-party transactions[88] - The company has outlined a commitment to adhere to legal and regulatory requirements in any related-party transactions, ensuring fairness and market pricing[88] Legal Matters - The company is involved in significant litigation, seeking RMB 157 million in compensation from Xu Xiaochun for unfulfilled performance commitments[96] - The company has ongoing arbitration cases, including a claim for RMB 8 million plus interest at an annual rate of 5.0025%[99] - The company has faced a series of legal proceedings related to the enforcement of arbitration awards, with the latest developments occurring in early 2019[99] - The company has filed a lawsuit with the Ningxia High Court regarding the performance compensation case from 2017[89] Social Responsibility - The company actively participated in social responsibility initiatives, donating over CNY 30,000 to charity and purchasing poverty alleviation products worth over CNY 20,000 in 2020[112] - The company visited and provided assistance to 61 employees in need, distributing CNY 48,000 in relief funds during the reporting period[112] - The company has upgraded its environmental protection facilities to meet new industry standards, ensuring compliance with air pollutant emission standards[113] Shareholder Information - The total number of ordinary shareholders increased from 34,240 to 37,899 during the reporting period[118] - The largest shareholder, Shanghai Zhongneng Enterprise Development (Group) Co., Ltd., holds 200,000,000 shares, accounting for 29.20% of total shares[120] - The company reported that the controlling shareholder, Shanghai Zhongneng, has no known relationships with the other nine shareholders, ensuring independent governance[123] Management and Workforce - The company has a total of 971 employees, with 27 in the parent company and 944 in major subsidiaries[138] - The workforce consists of 708 production personnel, 21 sales personnel, 117 technical personnel, 18 financial personnel, and 72 administrative personnel[138] - The company conducted 254 training sessions in 2020, achieving a completion rate of 100% with a total of 3,394 training participants[140] Audit and Internal Control - The internal control audit firm has been retained for 23 years, indicating a long-term relationship[95] - The company has established a mechanism for internal control self-evaluation, which is disclosed in the annual report[149] - The audit committee confirmed that the 2019 financial report accurately reflects the company's financial status and recommended the reappointment of the auditing firm[147]