QCEC(SH:600218)2019-03-27 16:00Financial Performance - In 2018, the company's operating revenue was CNY 3,477,083,409.01, representing an increase of 8.87% compared to CNY 3,193,670,475.03 in 2017[20] - The net profit attributable to shareholders of the listed company for 2018 was CNY 39,683,114.72, a decrease of 35.46% from CNY 61,481,784.88 in 2017[20] - The net profit attributable to shareholders after deducting non-recurring gains and losses was CNY -14,815,838.36, a decline of 190.08% compared to CNY 16,446,583.29 in 2017[20] - The basic earnings per share for 2018 was CNY 0.11, down 35.29% from CNY 0.17 in 2017[21] - The weighted average return on net assets decreased to 2.06% in 2018 from 3.24% in 2017, a reduction of 1.18 percentage points[21] - The total assets at the end of 2018 were CNY 3,602,324,018.30, a decrease of 3.67% from CNY 3,739,680,865.45 at the end of 2017[20] Profit Distribution - The company did not distribute profits for 2018, retaining earnings for development needs[5] - The company has a profit distribution policy that emphasizes stable cash dividends, aiming for at least 20% of profits to be distributed as cash dividends when cash flow allows[68] - The company did not distribute profits in 2018 due to its current development stage and significant future capital expenditure plans[72] - Over the past three years, the company has distributed cash dividends amounting to 32% of the average annual distributable profit, in compliance with regulatory requirements[72] Market Challenges and Strategies - The company faced challenges due to increased production costs from rising raw material prices and labor costs, impacting gross profit margins[22] - The company plans to enhance product promotion efforts to address market competition and product upgrades[22] - The company anticipates continued price competition due to rising raw material costs and promotional activities in the industry[60] - The demand for high-end, environmentally friendly products is increasing as emission standards approach, leading the company to accelerate technology R&D and product upgrades[63] Research and Development - The company invested in technology research and development, product upgrades, and technical transformations to enhance product quality and market competitiveness[33] - Research and development expenses rose by 23.19% to ¥133,100,462.53, up from ¥108,044,752.16 in the previous year[45] - The company’s total R&D expenditure accounted for 3.83% of its operating revenue[46] Sales Performance - The actual sales of multi-cylinder engines were 316,400 units, a year-on-year decrease of 0.57%[34] - The sales of agricultural machinery engines decreased due to adjustments in national policies regarding agricultural subsidies[33] - The company maintained stable sales of automotive diesel engines compared to the previous year[33] - The industrial vehicle products continued to grow rapidly, while sales of engineering machinery products declined due to the implementation of non-road National III emission standards[33] Cash Flow and Investments - The net cash flow from operating activities improved by 97.90%, reaching CNY -2,981,883.38, compared to CNY -141,774,803.19 in 2017[20] - The net cash flow from investing activities surged by 494.02% to ¥194,135,540.17 from ¥32,681,796.11 year-on-year[48] - The company has invested ¥101,104,000 in various projects, with the low-emission commercial vehicle diesel engine project completed at 100%[59] Environmental Initiatives - The company invested over CNY 15 million in environmental protection initiatives, achieving 100% wastewater recycling and saving approximately 826,500 cubic meters of water in 2018[93] - The company has successfully implemented energy regeneration technologies, including the installation of two natural gas boilers, significantly reducing air pollutants[94] - The company has received several environmental accolades, including "Anhui Province Circular Economy Demonstration Enterprise" and "Anhui Province Water-Saving Enterprise"[94] Corporate Governance - The company has established communication channels for minority shareholders to express their opinions and concerns regarding profit distribution[72] - The board's profit distribution proposal requires approval from more than half of the board members and two-thirds of independent directors[70] - The company has maintained compliance with all regulatory requirements and has not faced any penalties from the China Securities Regulatory Commission[83] Shareholder Information - The largest shareholder, Anhui Quanchai Group Co., Ltd., holds 126,542,500 shares, representing 34.32% of the total shares[100] - The second largest shareholder, Tibet Dongfang Kaishuo Investment Co., Ltd., holds 3,387,600 shares, accounting for 0.92%[100] - The top ten shareholders do not have any associated relationships or concerted actions among them, except for the controlling shareholder[101] Employee and Management Information - The total number of employees in the parent company and major subsidiaries is 3,049, with 2,321 in the parent company and 728 in subsidiaries[115] - The company implements a performance-based salary system, with dynamic management of employee compensation to enhance motivation and responsibility[116] - The company emphasizes training for high-skilled and technical personnel to ensure competitive human resources[117] Audit and Internal Control - The audit committee reviewed the financial statements and confirmed they reflect the company's financial status and operating results accurately[135] - The company's internal control evaluation report is available on the Shanghai Stock Exchange website, indicating no significant deficiencies in internal control during the reporting period[131] - The audit report concluded that the financial statements were prepared in accordance with accounting standards and fairly represent the company's financial condition as of December 31, 2018[135]