GITI TIRE CORP(SH:600182)2021-04-22 16:00Financial Performance - The net profit of GITI Tire's parent company for 2020 was CNY 79.50 million, with a legal reserve of CNY 7.95 million deducted, resulting in a distributable profit of CNY 262.71 million by the end of 2020[6]. - The company reported a retained earnings of CNY 218.02 million at the beginning of 2020, after distributing CNY 26.86 million during the year[6]. - GITI Tire's financial statements are prepared in accordance with accounting standards, reflecting the company's financial position and operational results accurately[5]. - The company's operating revenue for 2020 was ¥2,803,047,211.18, a decrease of 8.70% compared to ¥3,070,118,188.23 in 2019[23]. - Net profit attributable to shareholders was ¥59,636,247.45, down 31.35% from ¥86,865,756.40 in the previous year[23]. - Basic earnings per share decreased by 31.35% to ¥0.1754 from ¥0.2555 in 2019[24]. - The weighted average return on equity fell to 6.02%, a decrease of 3.20 percentage points from 9.22% in 2019[24]. - Cash flow from operating activities increased by 59.54% to ¥395,214,216.10, compared to ¥247,726,639.86 in 2019[23]. - Total assets at the end of 2020 were ¥2,951,795,566.60, a decrease of 2.80% from ¥3,036,740,635.60 in 2019[23]. - The company reported a significant increase in cash and cash equivalents, rising by 44.88% to ¥334 million from ¥231 million at the beginning of the year[33]. - The company’s net assets attributable to shareholders increased by 3.37% to ¥1,006,618,897.65 from ¥973,842,650.20 in 2019[23]. - The company achieved operating revenue of 2.803 billion RMB in 2020, a decrease of 8.70% year-on-year[41]. - Operating costs were 2.213 billion RMB, down 11.28% compared to the previous year[41]. - Net profit for the year was 125 million RMB, reflecting a decline of 30.87% year-on-year[41]. - The gross profit margin for the main business (tires) was 20.44%, an increase of 2.13 percentage points from the previous year[45]. Dividends and Profit Distribution - A cash dividend of CNY 0.55 per share (including tax) is proposed, totaling CNY 18.70 million, based on a total share capital of 340 million shares[6]. - The company plans to carry forward the remaining distributable profits to future years, with no capital reserve conversion or stock distribution planned for 2020[6]. - The company has not proposed a cash profit distribution plan for the reporting period despite having positive distributable profits[91]. Internal Controls and Audit Opinions - The audit report from Yongtuo Accounting Firm expressed a qualified opinion regarding the financial statements, indicating potential issues that investors should be aware of[5]. - The internal control audit report issued by Yongtuo Accounting Firm provided a negative opinion on the effectiveness of internal controls[9]. - The audit identified key audit matters, particularly regarding the completeness of related party relationships and transactions[165]. - The audit report emphasizes the importance of evaluating management's accounting policy choices and estimates[171]. - The audit confirmed that the related party transactions for the year 2020 followed the company's internal management processes and were approved at various levels[199]. Related Party Transactions - GITI Tire has not engaged in any non-operational fund occupation by controlling shareholders or related parties[9]. - The company has not violated decision-making procedures for external guarantees[9]. - The company continues to rely on related party transactions for procurement and sales, which are deemed necessary for its operations[104]. - The company has strengthened the management of related party transactions to minimize potential impacts on business independence[107]. - The company has implemented changes in accounting policies, specifically adopting the new revenue recognition standards effective January 1, 2020[97]. - The company has faced challenges in obtaining shareholder approval for related party transactions, which has led to ongoing discussions with minority shareholders[96]. - The company has engaged external agencies to audit the execution of related party transactions[107]. - The audit confirmed that the procurement of fixed assets from related parties adhered to fair trading and market principles, with no significant price differences from third-party evaluations[192]. Market Conditions and Industry Challenges - The overall market for tires faced significant challenges due to the COVID-19 pandemic, leading to a decline in global sales revenue[58]. - The tire industry in China is facing significant pressure due to economic downturns, trade tensions, and environmental regulations, leading to increased industry concentration[60]. - The company anticipates a stabilization and steady growth in tire market demand due to improved economic conditions and government consumption promotion policies[32]. - The domestic tire manufacturing industry is facing increased competition due to economic downturns and stricter environmental policies, leading to a more challenging operating environment[82]. - The company recognizes the risk of international trade barriers impacting exports, particularly due to ongoing trade disputes and anti-dumping measures in various markets[84]. Research and Development - Research and development expenses increased by 144.71% to 19.5 million RMB, indicating a focus on innovation[42]. - The company is committed to increasing R&D investments to improve product performance and meet rising consumer demands for safety and environmental standards[78]. - The company is focusing on upgrading its product structure and enhancing intelligent manufacturing capabilities to improve core competitiveness in the tire industry[60]. Environmental Management - The company has implemented environmental management practices, achieving ISO14001 and ISO45001 certifications[113]. - The company operates two 65-ton coal-fired boilers, with SO2 emissions measured at 166.12 mg/m3, well below the standard limit of 400 mg/m3[116]. - The actual total emissions of NOX were 161.84 mg/m3, also below the limit of 400 mg/m3[117]. - The company reported a total of 2.58 mg/m3 of dust emissions from the rubber mixing process, significantly lower than the standard of 12 mg/m3[119]. - Wastewater treatment facilities are in place, with COD levels at 16.211 mg/l, below the limit of 300 mg/l[120]. Shareholder Information - The total number of common shareholders at the end of the reporting period was 27,669, an increase from 27,414 at the end of the previous month[130]. - The largest shareholder, Giti Tire (China) Investment Co., Ltd., held 151,070,000 shares, representing 44.43% of the total shares, with no changes during the reporting period[132]. - The company does not have any preferred shareholders with restored voting rights at the end of the reporting period[130]. - The controlling shareholder is Giti Tire (China) Investment Co., Ltd., which focuses on investments in the tire industry and related sectors[134]. Employee and Management Information - The total number of employees in the parent company and major subsidiaries is 3,220, with 40 in the parent company and 3,180 in subsidiaries[145]. - The company has established a performance-based salary system that aligns employee compensation with business performance and market competitiveness[146]. - Total remuneration for all directors, supervisors, and senior management during the reporting period amounted to 3.1363 million yuan[143]. - The company maintains a diverse board with members holding various positions in other companies, enhancing governance and oversight[142]. Strategic Initiatives - The company plans to adjust its product structure to mitigate the impact of declining sales in various regions[39]. - The company aims to enhance production efficiency and control costs while adjusting sales prices and product structures to improve domestic market share[82]. - The company is focused on developing a learning-oriented team to meet future demands through comprehensive training programs[148].