绿能慧充(600212) - 2019 Q4 - 年度财报

Definitions Definitions This section defines key terms used in the report, including company names, controlling shareholders, related parties, and the reporting period, to ensure clarity - The Company, this Company, Jiangquan Industrial refers to Shandong Jiangquan Industrial Co, Ltd[16] - Jinghong Yicheng, Controlling Shareholder refers to Shenzhen Jinghong Yicheng Industrial Development Co, Ltd[16] - Reporting Period refers to the period from January 1, 2019, to December 31, 2019[16] Company Profile and Key Financial Indicators Company Information This section provides the company's basic registration information, including its Chinese name, abbreviation, foreign name and its abbreviation, and legal representative - The company's Chinese name is Shandong Jiangquan Industrial Co, Ltd, abbreviated as Jiangquan Industrial[14] - The company's legal representative is Zhao Tongyu[14] Contact Persons and Methods This section lists the names, contact addresses, telephone numbers, fax numbers, and email addresses of the company's Board Secretary and Securities Affairs Representative - The Board Secretary is Zhang Qian, and the Securities Affairs Representative is Chen Juan[15] - The contact address for both is No 6, Sanjiang Road, Jiangquan Industrial Park, Luozhuang District, Linyi City, Shandong Province[15] Basic Information Overview This section presents the company's registered address, office address, postal code, and email, and defines commonly used terms in the report - The company's registered address is East of Longtan Road, Luozhuang Town, Luozhuang District, Linyi City, and the office address is No 6, Sanjiang Road, Jiangquan Industrial Park, Luozhuang District, Linyi City, Shandong Province[16] - The controlling shareholder is Shenzhen Jinghong Yicheng Industrial Development Co, Ltd[16] Information Disclosure and Document Location This section specifies the designated media and website for the company's information disclosure, as well as the location where the annual report is available for inspection - The company's selected information disclosure media are China Securities Journal and Shanghai Securities News[17] - The designated website of the China Securities Regulatory Commission for publishing the annual report is www.sse.com.cn[17](index=17&type=chunk) Company Stock Profile This section provides basic information about the company's stock, including the stock type, listing exchange, stock abbreviation, and stock code - The company's stock type is A-share, listed on the Shanghai Stock Exchange[18] - The stock abbreviation is Jiangquan Industrial, and the stock code is 600212[18] Other Relevant Information This section discloses information about the accounting firm engaged by the company, including its name, office address, and the names of the signing accountants - The domestic accounting firm engaged by the company is Hexin Certified Public Accountants (Special General Partnership)[19] - The signing accountants are Li Xuehua and Chen Zongqiang[19] Key Accounting Data and Financial Indicators for the Last Three Years This section summarizes the company's key accounting data and financial indicators for the past three years (2017-2019), showing consecutive losses in 2018 and 2019, leading to a significant decline in total and net assets and a delisting risk warning - The company's net profit has been negative for two consecutive fiscal years (2018, 2019), and its stock trading will be subject to a "delisting risk warning" starting from April 27, 2020[7] - The company's 2019 net profit attributable to shareholders of the listed company was -RMB 351.61 million, an increased loss compared to the previous year[23][24] - Net assets and total assets attributable to shareholders of the listed company decreased by 60.18% and 56.14% respectively, compared to the end of the previous year[23] Key Accounting Data In 2019, the company's operating revenue increased by 6.57% year-on-year, but both net profit attributable to shareholders and net profit excluding non-recurring items were negative, with losses widening significantly compared to 2018 2019 Key Accounting Data | Indicator | 2019 (RMB) | 2018 (RMB) | 2017 (RMB) | YoY Change (%) | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue | 261,171,078.43 | 245,065,271.02 | 251,732,422.90 | 6.57 | | Net Profit Attributable to Shareholders | -351,609,433.29 | -171,973,788.49 | 12,585,233.59 | N/A | | Net Profit Attributable to Shareholders (Excluding Non-recurring Items) | -355,193,048.40 | -174,123,849.55 | 20,539,323.50 | N/A | | Net Cash Flow from Operating Activities | -1,815,122.68 | -10,963,054.90 | -4,518,502.96 | N/A | | Net Assets Attributable to Shareholders (Year-end) | 232,360,667.10 | 583,506,147.03 | 755,020,186.24 | -60.18 | | Total Assets (Year-end) | 269,878,547.40 | 615,368,612.91 | 795,755,423.93 | -56.14 | Key Financial Indicators In 2019, the company's basic earnings per share and weighted average return on net assets were both negative, with the loss margin widening significantly year-on-year, mainly due to losses from an associate company, impairment of long-term equity investments, and credit impairment losses on receivables 2019 Key Financial Indicators | Indicator | 2019 | 2018 | 2017 | YoY Change (%) | | :--- | :--- | :--- | :--- | :--- | | Basic Earnings Per Share (RMB/share) | -0.6871 | -0.3361 | 0.0246 | N/A | | Diluted Earnings Per Share (RMB/share) | -0.6871 | -0.3361 | 0.0246 | N/A | | Basic EPS after Excluding Non-recurring Items (RMB/share) | -0.6941 | -0.3403 | 0.0401 | N/A | | Weighted Average Return on Net Assets (%) | -86.24 | -25.7 | 1.68 | Decreased by 60.54 p.p. | | Weighted Average ROE after Excluding Non-recurring Items (%) | -87.12 | -26.03 | 2.73 | Decreased by 61.09 p.p. | - The loss in the current period was mainly due to losses from the shutdown of an associate company, resulting in an investment loss of RMB 169.98 million and long-term equity investment impairment of RMB 151.35 million; additionally, credit impairment losses on receivables amounted to RMB 22.48 million, collectively increasing the loss by RMB 343.80 million[23] Differences in Accounting Data under Domestic and Foreign Accounting Standards This section states that there are no differences in net profit and net assets attributable to shareholders between financial reports disclosed under international or foreign accounting standards and those under Chinese accounting standards - The company has no differences in accounting data under domestic and foreign accounting standards[25] Key Quarterly Financial Data for 2019 In 2019, quarterly operating revenue was relatively stable, but net profit attributable to shareholders remained negative, with the largest loss occurring in the fourth quarter 2019 Key Quarterly Financial Data | Indicator | Q1 (Jan-Mar) | Q2 (Apr-Jun) | Q3 (Jul-Sep) | Q4 (Oct-Dec) | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue (RMB) | 61,692,328.00 | 66,856,403.55 | 60,095,938.20 | 72,526,408.68 | | Net Profit Attributable to Shareholders (RMB) | -40,066,799.87 | -103,866,027.39 | -84,853,998.30 | -122,822,607.73 | | Net Profit Attributable to Shareholders (Excluding Non-recurring Items) (RMB) | -40,088,598.18 | -107,253,483.44 | -84,894,712.34 | -122,956,254.44 | | Net Cash Flow from Operating Activities (RMB) | -3,731,915.26 | 2,692,295.61 | -9,484,670.59 | 8,709,167.56 | Non-recurring Profit and Loss Items and Amounts In 2019, the company's total non-recurring profit and loss amounted to RMB 3.58 million, primarily from government subsidies and fair value change gains, while gains on disposal of non-current assets were negative 2019 Non-recurring Profit and Loss Items and Amounts | Non-recurring Profit and Loss Item | 2019 Amount (RMB) | 2018 Amount (RMB) | 2017 Amount (RMB) | | :--- | :--- | :--- | :--- | | Gains/Losses on Disposal of Non-current Assets | -900.90 | -52,756.16 | 20,178.17 | | Government Subsidies Included in Current Profit or Loss | 3,404,880.46 | 2,010,239.56 | - | | Fair value gains/losses from holding and disposing of trading financial assets/liabilities, derivative financial assets/liabilities, and investment income from other debt investments, excluding effective hedging related to normal business operations | 93,575.34 | - | 1,844,508.48 | | Other Non-operating Income and Expenses | 86,060.21 | 192,577.66 | -9,818,776.56 | | Total | 3,583,615.11 | 2,150,061.06 | -7,954,089.91 | Items Measured at Fair Value This section states that the company had no items measured at fair value during the reporting period - The company had no items measured at fair value during the reporting period[30] Other This section states that the company has no other matters to disclose for the reporting period - The company has no other matters to disclose for the reporting period[30] Business Overview Description of Main Business, Operating Model, and Industry Situation during the Reporting Period The company's main businesses include power generation and dedicated railway line transportation, with power generation profits declining due to rising raw material prices, while railway transportation revenue and profit saw slight growth - The company's main businesses include power generation and dedicated railway line transportation[31] - The power generation business was affected by rising upstream raw material prices, resulting in a decrease in profit compared to the previous year[31] - The railway transportation business benefited from increased freight volume in the industrial park, leading to a slight increase in revenue and profit compared to the previous year[32] Explanation of Significant Changes in the Company's Main Assets during the Reporting Period This section states that there were no significant changes in the company's main assets during the reporting period - There were no significant changes in the company's main assets during the reporting period[33] Analysis of Core Competitiveness during the Reporting Period During the reporting period, the company's controlling shareholder changed from Oriental Capital to Shenzhen Jinghong Yicheng Industrial Development Co, Ltd, and the actual controller changed to Xu Yiming - On November 22, 2019, the company's controlling shareholder changed from Oriental Capital to Shenzhen Jinghong Yicheng Industrial Development Co, Ltd[33] - The company's Board of Directors, Board of Supervisors, and management team have successfully completed their transition[33] - The current Board of Directors and management will continue to actively explore new business opportunities to create new profit growth points for the company[33] Management Discussion and Analysis Management Discussion and Analysis In 2019, the company faced a complex macroeconomic and external environment, with key tasks including the smooth transition of the board and management, ensuring stable operations of existing businesses, and addressing changes in actual control - In 2019, the company faced a complex external environment and strategic transformation challenges[35] - Key tasks included the smooth transition of the board and management, ensuring stable operations of existing businesses, and addressing changes in actual control and the judicial auction of some shares of the former controlling shareholder[35][36][37] - The company's controlling shareholder changed to Shenzhen Jinghong Yicheng Industrial Development Co, Ltd, and the actual controller changed to Xu Yiming[38] Key Operating Activities during the Reporting Period During the reporting period, the company achieved operating revenue of RMB 261 million, a year-on-year increase of 6.57%, but suffered significant losses in operating profit and net profit, with net profit attributable to shareholders at -RMB 352 million - The company achieved total operating revenue of RMB 261.17 million, a year-on-year increase of 6.57%[39] - The company's operating profit was -RMB 351.69 million, net profit was -RMB 351.61 million, and net profit attributable to shareholders was -RMB 351.61 million[39] - Losses from the associate company Shandong Huayu Alloy Materials Co, Ltd, and impairment of long-term equity investments collectively reduced the current period's profit by RMB 321 million[58] Analysis of Main Business Operations In 2019, the company's operating revenue grew by 6.57%, but operating costs increased by 18.84% due to increased electricity sales, railway transport volume, and rising raw material prices for power generation - Operating revenue for the current period increased by 6.57% year-on-year, mainly due to increased electricity sales and railway transport volume[42] - Operating costs for the current period increased by 18.84% year-on-year, mainly due to the corresponding increase in costs with revenue growth and rising prices of major raw materials for power production[43] - Investment income for the current period decreased by RMB 106.41 million year-on-year, mainly due to increased losses from the investee company[43] Analysis of Changes in Income Statement and Cash Flow Statement Items In 2019, operating revenue grew by 6.57%, but operating costs increased by 18.84%, mainly due to increased electricity sales, railway transport volume, and rising raw material prices for power generation Key Changes in Income Statement and Cash Flow Statement | Item | Current Period (RMB) | Prior Period (RMB) | Change (%) | Reason for Change | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue | 261,171,078.43 | 245,065,271.02 | 6.57 | Increased electricity sales and railway transport volume | | Operating Costs | 246,081,949.97 | 207,062,837.32 | 18.84 | Increased revenue and rising prices of power raw materials | | Investment Income | -169,711,310.28 | -63,298,809.49 | N/A | Increased losses from investee company | | Asset Impairment Loss | -151,346,125.26 | -13,584,000.00 | N/A | Impairment of long-term equity investment due to associate company's production halt | | Net Cash Flow from Operating Activities | -1,815,122.68 | -10,963,054.90 | N/A | Relative increase in cash inflows from operating activities | | Net Cash Flow from Investing Activities | -51,863,842.47 | -2,382,097.26 | N/A | Increased purchases of fixed assets and bank wealth management products | Revenue and Cost Analysis In 2019, revenue from both the power industry and railway transportation business increased, but the gross margin of the power industry declined due to rising raw material prices Main Business by Industry | Industry | Operating Revenue (RMB) | Operating Costs (RMB) | Gross Margin (%) | Revenue YoY Change (%) | Operating Cost YoY Change (%) | Gross Margin YoY Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Power Industry | 206,313,504.74 | 200,702,948.99 | 2.72 | 15.22 | 34.47 | Decreased by 13.93 p.p. | | Railway Transportation | 53,465,445.19 | 44,949,761.51 | 15.93 | 15.52 | 22.03 | Decreased by 4.49 p.p. | | Agricultural Product Trade | 466,703.59 | 326,578.97 | 30.02 | -96.97 | -98.16 | Increased by 45.12 p.p. | Production and Sales Volume | Main Product | Unit | Production Volume | Sales Volume | Production Volume YoY Change (%) | Sales Volume YoY Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Electricity Sales | 10,000 kWh | 33,287.00 | 30,681.24 | 8.24 | 9.38 | | Railway Transportation | 10,000 tons | 406.51 | 406.51 | 9.09 | 9.09 | | Agricultural Product Trade | tons | 201.52 | 76.7 | -97.66 | -99.11 | - Sales to the top five customers amounted to RMB 243.48 million, accounting for 93.23% of total annual sales; purchases from the top five suppliers amounted to RMB 148.96 million, accounting for 83.09% of total annual purchases[54] Expenses In 2019, selling expenses increased by 14.01% YoY mainly due to higher employee compensation, while administrative expenses decreased by 9.00% YoY primarily due to reduced housing rental and travel expenses Expense Changes | Item | Current Period (RMB) | Prior Period (RMB) | Change (%) | Reason for Change | | :--- | :--- | :--- | :--- | :--- | | Selling Expenses | 831,461.18 | 729,312.11 | 14.01 | Increased employee compensation expenses | | Administrative Expenses | 22,190,456.60 | 24,385,364.89 | -9.00 | Decreased housing rental and travel expenses | | Financial Expenses | -486,456.88 | -267,942.41 | N/A | Increased interest income from deposits | R&D Investment This section states that the company had no R&D investment during the reporting period - The company had no R&D investment during the reporting period[56] Cash Flow In 2019, net cash flow from operating activities increased by RMB 9.15 million compared to the previous year, mainly due to an increase in cash inflows from operating activities Cash Flow Changes | Item | Current Period (RMB) | Prior Period (RMB) | Change (%) | Reason for Change | | :--- | :--- | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | -1,815,122.68 | -10,963,054.90 | N/A | Relative increase in cash inflows from operating activities | | Net Cash Flow from Investing Activities | -51,863,842.47 | -2,382,097.26 | N/A | Increased purchases of fixed assets and bank wealth management products | Explanation of Significant Profit Changes Caused by Non-Main Business Operations The company's associate, Shandong Huayu Alloy Materials Co, Ltd, incurred huge losses due to a production halt, leading the company to recognize an investment loss of -RMB 170 million and book a long-term equity investment impairment provision of RMB 151 million - The company recognized an investment loss of -RMB 169,975,967.81 due to the losses of its associate, Shandong Huayu Alloy Materials Co, Ltd[58] - The company made a provision for impairment of long-term equity investment in Shandong Huayu Alloy Materials Co, Ltd amounting to RMB 151,346,125.26[58] - These two items combined reduced the current period's profit by RMB 321,322,093.07[58] Analysis of Assets and Liabilities At the end of 2019, the company's total assets and net assets attributable to shareholders decreased by 56.14% and 60.18% respectively, mainly due to losses in the current period Changes in Assets and Liabilities | Item | Current Period-End (RMB) | % of Total Assets | Prior Period-End (RMB) | % of Total Assets | Change (%) | Explanation | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Cash and Cash Equivalents | 57,063,281.99 | 21.14 | 110,742,026.29 | 18 | -48.47 | Purchase of fixed assets, bank wealth management products | | Trading Financial Assets | 15,093,575.34 | 5.59 | - | 0 | N/A | Purchase of bank wealth management products | | Accounts Receivable | 4,880,184.81 | 1.81 | 28,545,901.32 | 4.64 | -82.9 | Increased collections, provision for bad debts | | Prepayments | 5,301,602.26 | 1.96 | 1,864,435.34 | 0.3 | 184.35 | Increased prepayment for national railway freight | | Other Receivables | 8,527,098.72 | 3.16 | 47,886.80 | 0.01 | 17,706.78 | Increased freight charges paid on behalf of others | | Long-term Equity Investments | 0 | 0 | 321,322,093.07 | 52.22 | -100 | Investment loss, impairment provision | | Construction in Progress | 27,338,067.76 | 10.13 | - | 0 | N/A | Construction of freight yard coal shed | | Total Assets | 269,878,547.40 | 100 | 615,368,612.91 | 100 | -56.14 | Loss in the current period | | Accounts Payable | 18,594,341.88 | 6.89 | 11,682,363.43 | 1.9 | 59.17 | Increased payables for national railway freight and purchases | | Retained Earnings | -848,493,499.93 | -314.4 | -496,884,066.64 | -80.75 | N/A | Loss in the current period | | Total Liabilities and Equity | 269,878,547.40 | 100 | 615,368,612.91 | 100 | -56.14 | Loss in the current period | Analysis of Industry-Specific Operational Information The company's power generation business, which uses waste gas as raw material, is unique and not directly comparable to the traditional power industry - The company's power generation business utilizes waste gas from upstream steel and coking enterprises, making it unique and not directly comparable to the traditional power industry[62][64] 2019 Electricity Volume and Price | Operating Region/Generation Type | Power Generation (10,000 kWh) | Electricity Sales (10,000 kWh) | Electricity Price (RMB/MWh) | Generation YoY (%) | Sales YoY (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Other (Waste Gas Power Generation) | 33,287.00 | 30,681.24 | 572.2 | 8.24 | 9.38 | - The company's current total installed capacity is 50 MW[66] Investment Status Analysis This section states that the company had no significant equity investments, non-equity investments, or financial assets measured at fair value during the reporting period - The company had no significant equity investments, non-equity investments, or financial assets measured at fair value during the reporting period[69] Sale of Major Assets and Equity This section states that the company did not sell any major assets or equity during the reporting period - The company did not sell any major assets or equity during the reporting period[69] Analysis of Major Holding and Participating Companies The company's wholly-owned subsidiaries, Shanghai Nongren Network Technology Development Co, Ltd and Shenzhen Dasheng Agricultural Product Supply Chain Co, Ltd, did not conduct any actual business in 2019 - The company's wholly-owned subsidiaries, Shanghai Nongren Network Technology Development Co, Ltd and Shenzhen Dasheng Agricultural Product Supply Chain Co, Ltd, did not conduct any actual business in 2019[69][70] - The associate company, Shandong Huayu Alloy Materials Co, Ltd, achieved a net profit of -RMB 856.06 million in 2019, mainly due to significant losses from production suspension[71] Information on Structured Entities Controlled by the Company This section states that the company did not control any structured entities during the reporting period - The company did not control any structured entities during the reporting period[72] Company's Discussion and Analysis of Future Development In 2019, national electricity consumption grew by 4.5% year-on-year, while the utilization hours of thermal power equipment decreased - In 2019, total electricity consumption in society was 7,225.5 billion kWh, a year-on-year increase of 4.5%[72] - In 2019, the average utilization hours of thermal power equipment at power plants of 6,000 kW and above nationwide was 4,293 hours, a year-on-year decrease of 85 hours[72] - The company's 2020 development strategy is to optimize its business structure and improve the quality of the listed company, including shutting down or divesting unprofitable or poorly performing businesses and actively exploring new business transformation directions[73] Industry Landscape and Trends In 2019, national electricity consumption grew by 4.5% year-on-year, but the average utilization hours of thermal power equipment decreased - In 2019, total electricity consumption in society was 7,225.5 billion kWh, a year-on-year increase of 4.5%[72] - In 2019, the average utilization hours of thermal power equipment at power plants of 6,000 kW and above nationwide was 4,293 hours, a year-on-year decrease of 85 hours[72] - The company's thermal power business was affected by rising raw material prices from upstream enterprises, while the railway transportation business saw an increase in revenue due to increased freight volume in the industrial park[72] Company Development Strategy The company's development strategy for 2020 is to optimize its business structure and improve the quality of the listed company - The company's development strategy for 2020 is to optimize its business structure and improve the quality of the listed company[73] - Optimize the company's existing business structure, shut down or divest some unprofitable or poorly performing businesses, strengthen company management, and control costs and expenses[73] - Continue to actively explore new business transformation directions to enhance the asset quality and sustainable development capabilities of the listed company[73] Business Plan In 2020, the new board of directors and management will leverage the support of the controlling shareholder to optimize the existing business structure, actively promote business transformation, and manage risks effectively - The new board of directors and management will leverage the support of the controlling shareholder to optimize the existing business structure, actively promote business transformation, and manage risks effectively[74] - Continue to manage the existing thermal power and railway transportation businesses well, striving to improve their profitability[74] - Actively explore new business transformation directions by introducing high-quality assets to expand new profit growth points and improve the listed company's operating performance[74] Potential Risks The main risks facing the company include fluctuations in raw material prices and supply risks for power production (affected by the pandemic), cost pressures from increasingly strict environmental policies, and the uncertainty of the continued operation of its associate, Shandong Huayu - Raw material price fluctuation risk: The price of gas fuel required for the company's power production is subject to market fluctuations, which has a significant impact on operating performance[75] - Raw material supply risk: Due to the COVID-19 pandemic, adjustments in the production pace of upstream enterprises may affect the company's raw material supply[75] - Environmental risk: National environmental policies are becoming increasingly stringent, and new environmental investments will increase the company's operating cost pressure[75] - Risk of uncertain continued operation of associate company: Shandong Huayu has suspended production, and the plan for resuming production is unclear; the company has already made a full impairment provision[75] Other This section states that the company has no other matters to disclose regarding future development discussion and analysis for the reporting period - The company has no other matters to disclose regarding future development discussion and analysis for the reporting period[76] Explanation of Situations and Reasons for Non-disclosure According to Standards Due to Inapplicability, National Secrets, Commercial Secrets, or Other Special Reasons The company's main businesses are power generation and railway transportation, with the power generation business being unique due to its use of waste gas as raw material, making it different from the traditional power industry and thus not applicable for comparative disclosure under industry standards - The company's power generation business utilizes waste gas from upstream steel and coking enterprises, and due to the special nature of this power source and the circular economy model of upstream and downstream enterprises in the industrial park, it is not comparable to the traditional power industry[76] - Therefore, the company does not apply industry standards for disclosure[76] Significant Events Profit Distribution Plan for Common Shares or Capitalization of Capital Reserve The company has formulated and revised its cash dividend policy and shareholder return plan, but due to a negative distributable profit to shareholders in 2019, no profit distribution or capitalization of capital reserve was implemented - In 2019, the company's net profit attributable to the parent company was -RMB 351.61 million, and the profit available for distribution to shareholders was -RMB 848.49 million[5] - Given the accumulated losses, the company's profit distribution plan for 2019 is: no profit distribution and no capitalization of capital reserve[5] - The company has formulated the "Shandong Jiangquan Industrial Co, Ltd Future Three-Year (2020-2022) Shareholder Return Plan"[79] Fulfillment of Commitments The controlling shareholder, Shenzhen Jinghong Yicheng Industrial Development Co, Ltd, has committed to resolving horizontal competition, reducing related-party transactions, and maintaining the company's independence, all of which were strictly fulfilled during the reporting period - The controlling shareholder, Jinghong Yicheng, has committed that there is currently no horizontal competition with the listed company arising from engaging in the same or similar businesses[82] - Jinghong Yicheng has committed to minimizing and avoiding unnecessary related-party transactions with the listed company and will adhere to the principles of fairness, impartiality, and openness[82] - Jinghong Yicheng has committed that after the completion of this equity change, the listed company will continue to maintain a complete procurement, production, and sales system, own independent intellectual property rights, and be completely separate in terms of personnel, assets, finance, business, and organization[82][83] Fund Occupation and Debt Clearing Progress during the Reporting Period This section states that there were no instances of non-operating fund occupation by the controlling shareholder and its related parties during the reporting period - There were no instances of non-operating fund occupation by the controlling shareholder and its related parties during the reporting period[7] Company's Explanation on the "Non-standard Opinion Audit Report" from the Accounting Firm This section states that the company did not receive a non-standard opinion audit report from its accounting firm during the reporting period - The company did not receive a non-standard opinion audit report from its accounting firm during the reporting period[85] Analysis and Explanation of Changes in Accounting Policies, Accounting Estimates, or Correction of Major Accounting Errors and Their Impact In 2019, the company made several accounting policy changes, including revisions to the financial statement format and the adoption of new financial instrument standards, which affected the presentation of financial statement items for 2018 but had no impact on the financial position and operating results of prior years - The company revised the format of its 2019 general corporate financial statements according to a notice from the Ministry of Finance, splitting items such as "Notes Receivable and Accounts Receivable" and adding "Receivables Financing"[85] - The company adopted the new financial instrument standards from January 1, 2019, without retrospective adjustment to the comparative statements of the previous year, which does not affect the financial position and operating results of prior years[86] - The company adopted "Accounting Standards for Business Enterprises No 7 - Non-monetary Asset Exchange" from June 10, 2019, and "Accounting Standards for Business Enterprises No 12 - Debt Restructuring" from June 17, 2019[87] Appointment and Dismissal of Accounting Firms The company reappointed Hexin Certified Public Accountants (Special General Partnership) as its financial and internal control audit firm for 2019, with a one-year term and audit fees of RMB 350,000 and RMB 150,000, respectively - The company reappointed Hexin Certified Public Accountants (Special General Partnership) as its audit firm for 2019, responsible for financial audit work[90] - The firm was also appointed as the company's internal control audit firm for a one-year term[90] Accounting Firm Remuneration | Firm Type | Name | Remuneration (RMB) | | :--- | :--- | :--- | | Domestic Accounting Firm | Hexin Certified Public Accountants (Special General Partnership) | 350,000 | | Internal Control Audit Firm | Hexin Certified Public Accountants (Special General Partnership) | 150,000 | Situation of Facing Suspension of Listing Risk This section states that the company did not face the risk of suspension of listing during the reporting period - The company did not face the risk of suspension of listing during the reporting period[92] Situation and Reasons for Facing Termination of Listing This section states that the company did not face termination of listing and provides no reasons during the reporting period - The company did not face termination of listing and provides no reasons during the reporting period[92] Matters Related to Bankruptcy and Reorganization This section states that there were no matters related to bankruptcy and reorganization during the reporting period - There were no matters related to bankruptcy and reorganization during the reporting period[92] Major Litigation and Arbitration Matters This section states that there were no major litigation or arbitration matters during the reporting year - There were no major litigation or arbitration matters during the reporting year[92] Penalties and Rectification of the Listed Company, its Directors, Supervisors, Senior Management, Controlling Shareholder, Actual Controller, and Acquirer On August 6, 2019, the Shanghai Stock Exchange publicly censured the company's former controlling shareholder, Shenzhen Dasheng Agriculture Group Co, Ltd, for failing to increase its shareholding as per the publicly disclosed plan and for untimely risk disclosure - On August 6, 2019, the Shanghai Stock Exchange issued a disciplinary action decision (2019) No 61, publicly censuring Shenzhen Dasheng Agriculture Group Co, Ltd[92] - The reasons for the censure include failure to increase shareholding as per the publicly disclosed plan and untimely disclosure of risks related to the freezing of its main bank accounts and held shares, which prevented the implementation of the share increase plan[92] Explanation of the Integrity Status of the Company, its Controlling Shareholder, and Actual Controller during the Reporting Period During the reporting period, the company, its controlling shareholder, and actual controller had no adverse integrity issues such as failure to comply with effective court judgments or large outstanding debts - During the reporting period, the company, its controlling shareholder, and actual controller had no adverse integrity issues such as failure to comply with effective court judgments or large outstanding debts[93] Company's Equity Incentive Plans, Employee Stock Ownership Plans, or Other Employee Incentive Measures and Their Impact This section states that the company had no equity incentive plans, employee stock ownership plans, or other employee incentive measures during the reporting period - The company had no equity incentive plans, employee stock ownership plans, or other employee incentive measures during the reporting period[94][95] Major Related-Party Transactions During the reporting period, the company had routine related-party transactions with its associate, Shandong Huayu Alloy Materials Co, Ltd, including the procurement of chemical raw materials, provision of transportation services, and sale of purified water, totaling RMB 172,200 - The company signed an agreement with Shandong Huayu Alloy Materials Co, Ltd, with an estimated amount of routine related-party transactions of approximately RMB 15 million for 2019[95] 2019 Routine Related-Party Transactions | Related Party | Transaction Type | Transaction Content | Transaction Amount (RMB) | | :--- | :--- | :--- | :--- | | Shandong Huayu Alloy Materials Co, Ltd | Purchase of Goods | Chemical Raw Materials | 11,069.31 | | Shandong Huayu Alloy Materials Co, Ltd | Provision of Services | Transportation Services | 154,465.62 | | Shandong Huayu Alloy Materials Co, Ltd | Sale of Goods | Purified Water | 6,667.19 | | Total | / | / | 172,202.12 | Major Contracts and Their Performance During the reporting period, the company engaged in entrusted wealth management, mainly structured deposits, with a total transaction amount of RMB 45 million and an outstanding balance of RMB 15 million at the period-end, all of which have been recovered with returns upon maturity - The company's entrusted wealth management type was structured deposits, with a transaction amount of RMB 45,000,000 and an outstanding balance of RMB 15,000,000[100] Individual Entrusted Wealth Management Details | Entrusted Wealth Management Type | Amount (RMB) | Start Date | End Date | Actual Gain or Loss (RMB) | Annualized Return Rate (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Structured Deposit | 20,000,000 | 2019-7-19 | 2019-10-21 | 177,698.63 | 3.45 | | Structured Deposit | 10,000,000 | 2019-7-30 | 2019-10-30 | 86,958.9 | 3.45 | | Structured Deposit | 15,000,000 | 2019-10-23 | 2020-01-23 | 93,575.34 | 3.3 | Explanation of Other Major Matters During the reporting period, the shares held by the company's former controlling shareholder, Dasheng Group, were judicially auctioned, and Shenzhen Jinghong Yicheng Industrial Development Co, Ltd, won the bid, becoming the new controlling shareholder with Xu Yiming as the actual controller - The Shenzhen Intermediate People's Court of Guangdong Province conducted an online public auction of 65,667,070 shares of the company held by Dasheng Group[106] - Shenzhen Jinghong Yicheng Industrial Development Co, Ltd, won the bid with the highest offer and completed the transfer registration on November 22, 2019[106][108] - Jinghong Yicheng became the company's controlling shareholder, and Xu Yiming became the company's actual controller[108] - The company's Board of Directors, Board of Supervisors, and senior management completed their re-election[108] Active Fulfillment of Social Responsibilities The company emphasizes its social responsibilities, including protecting employees' legal rights, providing a healthy and safe working environment, and establishing and implementing quality, environmental, and occupational health and safety management systems - The company strictly implements the "Labor Contract Law," protects the legal rights of employees, pays various social insurances for employees on time and in full, and organizes regular employee health check-ups[109] - The company's thermal power plant is a key pollutant-discharging unit in Linyi City, and the emission concentrations and total amounts of major pollutants (sulfur dioxide, nitrogen oxides, soot particles) all meet national standards, with no instances of exceeding standards[110][111] - The company has formulated the "Jiangquan Industrial Thermal Power Plant Emergency Plan for Sudden Environmental Pollution Incidents" and the "Jiangquan Industrial Thermal Power Plant Self-Monitoring Plan" to ensure environmental safety[114][116] Information on Convertible Corporate Bonds This section states that there were no matters related to convertible corporate bonds during the reporting period - There were no matters related to convertible corporate bonds during the reporting period[117] Changes in Common Stock and Shareholder Information Changes in Common Stock Capital During the reporting period, the total number of common shares and the share capital structure of the company remained unchanged, and there were no changes in restricted shares - During the reporting period, the total number of common shares and the share capital structure of the company remained unchanged[118] - There were no changes in the company's restricted shares during the reporting period[119] Securities Issuance and Listing This section states that there were no securities issuance and listing activities during the reporting period, the total number of common shares and shareholder structure remained unchanged, and there were no internal employee shares - There were no securities issuance activities by the company during the reporting period[119] - The total number of common shares and the shareholder structure of the company remained unchanged[119] - The company has no existing internal employee shares[119] Shareholders and Actual Controller Information As of the end of the reporting period, the total number of common shareholders was 38,732 Top Ten Shareholders at the End of the Reporting Period | Shareholder Name | Shares Held at Period-End (Shares) | Percentage (%) | Share Status | Quantity (Shares) | | :--- | :--- | :--- | :--- | :--- | | Shenzhen Jinghong Yicheng Industrial Development Co, Ltd | 65,667,070 | 12.83 | None | - | | Zhangjiagang Bonded Zone Fanchuang Industrial Development Co, Ltd | 5,250,000 | 1.03 | None | - | | Zhu Yuwen | 4,639,000 | 0.91 | None | - | | Zheng Wenbao | 3,510,500 | 0.69 | None | - | | Shenzhen Dasheng Agriculture Group Co, Ltd | 2,736,128 | 0.53 | Frozen | 2,736,128 | - As of the end of the reporting period, the total number of common shareholders was 38,732[119] Controlling Shareholder and Actual Controller Information Shenzhen Jinghong Yicheng Industrial Development Co, Ltd, became the company's controlling shareholder through a judicial auction, holding 12.83% of the shares, with its legal representative being Xu Yiming - Controlling Shareholder: Shenzhen Jinghong Yicheng Industrial Development Co, Ltd, with a registered capital of RMB 500 million and a shareholding ratio of 12.83%[123] - Jinghong Yicheng acquired the company's shares through a public auction on October 18, 2019, and completed the transfer registration on November 22, 2019, becoming the controlling shareholder[123][126] - Actual Controller: Xu Yiming, a Chinese citizen with residency rights in other countries or regions, currently serves as the chairman of Shenzhen Jinghong Yicheng Industrial Development Co, Ltd[125][126] Other Corporate Shareholders with More Than 10% Shareholding This section states that there were no other corporate shareholders with more than a 10% shareholding during the reporting period - There were no other corporate shareholders with more than a 10% shareholding during the reporting period[127] Explanation of Restricted Share Reduction This section states that there were no restricted share reductions during the reporting period - There were no restricted share reductions during the reporting period[128] Information on Preferred Shares Information on Preferred Shares This section states that there were no matters related to preferred shares during the reporting period - There were no matters related to preferred shares during the reporting period[130] Directors, Supervisors, Senior Management, and Employees Shareholding Changes and Remuneration During the reporting period, there were no changes in the shareholdings of current and former directors, supervisors, and senior management, and the total actual remuneration received by all directors, supervisors, and senior management was RMB 1.876 million - During the reporting period, the number of shares held by current and former directors, supervisors, and senior management was 0, with no increase or decrease[132] - At the end of the reporting period, the total actual remuneration received by all directors, supervisors, and senior management was RMB 1.876 million[138] Positions of Current and Former Directors, Supervisors, and Senior Management during the Reporting Period This section discloses the positions held by current and former directors, supervisors, and senior management in shareholder entities and other organizations, showing that some individuals hold positions in the controlling shareholder or its affiliated companies - Deng Yuanping serves as the Investment Director at Shenzhen Jinghong Yicheng Industrial Development Co, Ltd[135] - Wei Yuwei serves as a Supervisor at Shenzhen Jinghong Yicheng Industrial Development Co, Ltd[135] - Several former directors, supervisors, and senior management members hold positions at the former controlling shareholder, Orient Bangxin Financial Holding Co, Ltd, and its affiliated companies[136][137] Remuneration of Directors, Supervisors, and Senior Management The remuneration of directors and supervisors is determined by the shareholders' meeting, while the remuneration of senior management is determined by the Remuneration and Appraisal Committee of the Board of Directors - The remuneration of directors and supervisors is determined by the company's shareholders' meeting, while the remuneration of senior management is determined by the Remuneration and Appraisal Committee of the Board of Directors[138] - The basis for determining remuneration is the completion of annual work objectives and business plans, taking into account industry income levels[138] - At the end of the reporting period, the total actual remuneration received by all directors, supervisors, and senior management was RMB 1.876 million[138] Changes in Company Directors, Supervisors, and Senior Management The ninth session of the company's Board of Directors and Board of Supervisors underwent an early re-election due to a change in actual control, resulting in changes to several directors, supervisors, and senior management members, with the new management team now in place - The ninth session of the company's Board of Directors and Board of Supervisors underwent an early re-election due to a change in actual control[141] - Zhao Tongyu was elected as Chairman, Zhai Baoxing was appointed as General Manager, Mao Liyan was appointed as Chief Financial Officer, and Zhang Qian was appointed as Board Secretary[139][140] - Several former chairmen, directors, independent directors, chairmen of the supervisory board, supervisors, general managers, and chief financial officers resigned due to the re-election or work-related reasons[140] Explanation of Penalties from Securities Regulatory Authorities in the Last Three Years This section states that the company has not been penalized by securities regulatory authorities in the last three years - The company has not been penalized by securities regulatory authorities in the last three years[141] Employee Information of the Parent Company and Major Subsidiaries The company has a total of 499 employees, with 497 at the parent company and 2 at major subsidiaries Employee Professional Composition | Category | Number of Employees | | :--- | :--- | | Production Staff | 341 | | Sales Staff | 2 | | Technical Staff | 34 | | Financial Staff | 29 | | Administrative Staff | 93 | | Total | 499 | - The company has a total of 499 employees, with 497 at the parent company and 2 at major subsidiaries[142] - The company has established a layered and categorized training system to improve the quality of its workforce and enhance its core competitiveness and independent innovation capabilities[144] Other This section states that the company has no other employee-related matters to disclose for the reporting period - The company has no other employee-related matters to disclose for the reporting period[145] Corporate Governance Corporate Governance Related Information During the reporting period, the company continued to improve its corporate governance structure, with clear responsibilities and standardized operations for the shareholders' meeting, board of directors, board of supervisors, and management - The company has continuously improved its corporate governance structure and standardized its operations and information disclosure obligations in accordance with the "Company Law," "Securities Law," and relevant laws and regulations from the China Securities Regulatory Commission's Shandong Bureau and the Shanghai Stock Exchange[147] - The company has achieved "five independences" from its controlling shareholder in terms of personnel, assets, finance, organization, and business[147] - The company's Board of Directors has established specialized committees such as the Remuneration and Appraisal Committee, Audit Committee, Nomination Committee, and Strategy Committee, and independent directors are able to perform their duties diligently and independently[147] Brief Introduction to Shareholders' Meetings In 2019, the company held a total of three shareholders' meetings, including two extraordinary general meetings and one annual general meeting, with all resolutions publicly disclosed on the designated website 2019 Shareholders' Meetings | Meeting Session | Date | Index of Resolution Publication on Designated Website | Disclosure Date of Resolution | | :--- | :--- | :--- | :--- | | 2019 First Extraordinary General Meeting | 2019-02-15 | www.sse.com.cn | 2019-02-16 | | 2018 Annual General Meeting | 2019-05-30 | www.sse.com.cn | 2019-05-31 | | 2019 Second Extraordinary General Meeting | 2019-12-13 | www.sse.com.cn | 2019-12-14 | Directors' Performance of Duties During the reporting period, the company held 10 board meetings, including 2 in-person meetings, 7 by communication, and 1 combining both methods - The number of board meetings held during the year was 10[149] - Among them, there were 2 in-person meetings, 7 meetings held by communication, and 1 meeting combining both methods[149][150] - No director failed to attend two consecutive board meetings in person[149] Important Opinions and Suggestions from Board Committees during the Reporting Period, with Disclosure of Specifics if Disagreements Exist During the reporting period, the specialized committees of the company's Board of Directors faithfully performed their duties, with the Nomination Committee carefully reviewing the qualifications of director candidates, the Audit Committee communicating fully with the company and its annual auditors, and the Remuneration and Appraisal Committee effectively supervising executive compensation - The Board's Nomination Committee carefully reviewed the qualifications of nominated candidates for director and independent director positions, strictly adhering to decision-making procedures[150] - The Board's Audit Committee fully communicated with the company and its annual auditors during the appointment of the audit firm and the preparation of periodic reports, effectively fulfilling its audit supervision function[150] - The Board's Remuneration and Appraisal Committee effectively supervised the annual remuneration of the company's directors and senior management[150] Explanation of Risks Identified by the Board of Supervisors This section states that the company's Board of Supervisors did not identify any risks within the company during the reporting period - The company's Board of Supervisors did not identify any risks within the company during the reporting period[151] Explanation of the Company's Inability to Guarantee Independence and Maintain Autonomous Operation in Business, Personnel, Assets, Organization, and Finance with its Controlling Shareholder This section states that the company is able to maintain independence from its controlling shareholder in terms of business, personnel, assets, organization, and finance, and there are no situations where independence or autonomous operation cannot be guaranteed - The company has achieved "five independences" from its controlling shareholder in terms of business, personnel, assets, organization, and finance[147] Evaluation and Incentive Mechanisms for Senior Management during the Reporting Period, and Their Establishment and Implementation The company implements an organizational performance management system centered on objective-based assessment, where the performance of senior management is evaluated based on the achievement of the company's mid-to-long-term strategic goals and annual objectives - The company implements an organizational performance management system centered on objective-based assessment[151] - The performance of senior management is determined based on the achievement of annual objectives, which are aligned with the company's mid-to-long-term strategic goals[151] - The Board's Remuneration and Appraisal Committee is responsible for setting the assessment standards for the company's senior management and conducting the assessments[151] Whether to Disclose the Internal Control Self-Evaluation Report The company has prepared and disclosed the "2019 Annual Internal Control Report," and the Board of Directors believes that the company has maintained effective internal control over financial reporting in all material respects, with no material weaknesses found in non-financial reporting internal controls - The company has prepared and disclosed the "2019 Annual Internal Control Report"[152] - The Board of Directors believes that the company has maintained effective internal control over financial reporting in all material respects, in accordance with the requirements of the enterprise internal control standard system and related regulations[155] - The company has not ident