Hengtong(SH:600226)2021-04-29 16:00Financial Performance - The company reported a net profit attributable to shareholders of -942,258,861.83 CNY for the year 2020, with a parent company net profit of -1,007,340,511.81 CNY[5]. - The company's operating revenue for 2020 was approximately RMB 555.66 million, a decrease of 31.00% compared to 2019[30]. - The net profit attributable to shareholders of the listed company in 2020 was approximately RMB -942.26 million, compared to RMB -655.87 million in 2019[30]. - The net cash flow from operating activities for 2020 was RMB 46.54 million, an improvement from RMB -78.22 million in 2019[30]. - The total assets at the end of 2020 were approximately RMB 3.05 billion, down 26.66% from 2019[30]. - The net assets attributable to shareholders of the listed company decreased by 25.78% to approximately RMB 2.63 billion at the end of 2020[30]. - The basic earnings per share for 2020 was -0.30 yuan, compared to -0.21 yuan in 2019[30]. - The weighted average return on net assets for 2020 was -31.00%, a decline from -16.62% in 2019[30]. - The company reported a net loss of approximately RMB 942.26 million for the year 2020, compared to a net loss of about RMB 655.87 million in 2019[158]. - The company has not conducted any profit distribution for the fiscal year 2020, which is in line with its current financial situation[5]. Audit and Compliance - The company faced a non-standard audit opinion from Tianjian Accounting Firm regarding its 2020 financial statements, indicating potential issues with financial reporting[11]. - The company’s internal control effectiveness was audited and received a negative opinion, highlighting potential weaknesses in governance[11]. - The company has committed to ensuring the accuracy and completeness of the information provided during the transaction process[183]. - The company has established a commitment to disclose any related party transactions in accordance with legal requirements, ensuring transparency and protection of investor interests[168]. Related Party Transactions - The company had a total of 37,812.46 million CNY in receivables from related parties, with 32,100 million CNY of this amount recovered as of the report date[7]. - The company confirmed that the funds occupied by Shen Peijin and related parties were primarily due to prepayments for project investments[199]. - The total amount of funds occupied by the controlling shareholder and its related parties decreased by RMB 8,212.46 million during the reporting period, resulting in a year-end balance of RMB 25,360 million[199]. - The company has resolved all issues related to fund occupation as of the report disclosure date[199]. Business Operations and Strategy - The company plans to continue focusing on core business areas and improving operational efficiency in the upcoming year[30]. - The company aims to enhance its market presence through a professional and systematic sales network covering global markets[42]. - The company is actively involved in the development of new products and technologies through partnerships with universities and research institutions[42]. - The company plans to enhance collaboration with research institutions to improve the technological content and added value of its veterinary and feed additive products[136]. - The company aims to achieve negative growth in the use of chemical fertilizers and pesticides as part of its commitment to sustainable agriculture[98]. Market Trends and Industry Insights - The veterinary and feed additive business is closely linked to the livestock industry's development, with a significant increase in demand for feed additives in 2020 due to the recovery of pig production capacity[42]. - The company anticipates a steady increase in demand for animal nutrition amino acids driven by rising global protein needs[45]. - The overall market for veterinary drugs and feed additives is expected to expand due to the recovery of the livestock industry post-African swine fever[136]. - The company is focusing on agricultural technology innovation, including bio-pesticides and smart agriculture, as part of its strategic initiatives[98]. Shareholder Actions and Commitments - The company initiated a share buyback program with a total fund of no less than RMB 100 million and no more than RMB 200 million, with a buyback period of 12 months starting from July 15, 2020[160]. - The company proposes not to distribute profits or increase capital reserves for the fiscal year 2020, pending shareholder approval[156]. - The major shareholder has pledged to avoid any business activities that may compete with the company, ensuring no conflicts arise in the future[168]. - The controlling shareholder commits to maintain a shareholding that exceeds the combined shareholding of other shareholders and their concerted actors for 36 months post-transaction completion[180]. Research and Development - The company recorded a significant increase in R&D expenses, rising by 187.47% to CNY 176.76 million[64]. - The company is investing heavily in R&D, with a budget increase of 20% aimed at developing innovative technologies[97]. - The biotechnology segment focused on amino acid feed additives, enhancing product technology and efficiency[60]. Challenges and Risks - The company faced significant challenges, including a loss of employees and a substantial decrease in business scale, leading to a bad debt provision of CNY 466.09 million[54]. - The company has acknowledged the risks associated with forward-looking statements and has advised investors to be cautious[6]. - The company faces risks related to strategic transformation, internet security, investment, market competition, and environmental regulations[149].