南钢股份(600282) - 2019 Q4 - 年度财报

Company Profile and Key Financial Indicators This section outlines the company's basic information and key financial performance over the past three years Company Basic Information Nanjing Iron & Steel Co., Ltd. (Nangang Share) is a Shanghai Stock Exchange-listed company with stock code 600282 - The company's Chinese name is Nanjing Iron & Steel Co., Ltd., with stock abbreviation Nangang Share and stock code 600282[10][14] Key Accounting Data and Financial Indicators for the Past Three Years In 2019, operating revenue grew 9.91% to 47.97 billion Yuan, but net profit fell 34.98% to 2.61 billion Yuan, mainly due to increased raw material costs 2017-2019 Key Accounting Data | Indicator | 2019 | 2018 | YoY Change (%) | 2017 | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue (Yuan) | 47,970,483,148.92 | 43,646,788,888.30 | 9.91 | 37,600,664,145.81 | | Net Profit Attributable to Shareholders (Yuan) | 2,606,224,358.06 | 4,008,192,215.36 | -34.98 | 3,200,349,431.10 | | Net Profit Attributable to Shareholders Excluding Non-recurring Items (Yuan) | 2,349,309,400.64 | 3,947,172,833.45 | -40.48 | 3,074,183,971.14 | | Net Cash Flow from Operating Activities (Yuan) | 4,348,491,905.18 | 4,938,472,682.58 | -11.95 | 2,361,266,275.26 | | Net Assets Attributable to Shareholders (Yuan) | 16,776,789,408.57 | 15,378,951,063.71 | 9.09 | 11,575,266,229.42 | | Total Assets (Yuan) | 43,620,513,500.75 | 41,194,585,952.13 | 5.89 | 37,735,444,348.85 | 2017-2019 Key Financial Indicators | Key Financial Indicator | 2019 | 2018 | YoY Change | 2017 | | :--- | :--- | :--- | :--- | :--- | | Basic Earnings Per Share (Yuan/share) | 0.5888 | 0.9078 | -35.14% | 0.7856 | | Weighted Average Return on Net Assets (%) | 16.37 | 29.81 | Decreased by 13.44 percentage points | 36.80 | 2019 Quarterly Financial Data The company's 2019 performance showed a quarter-over-quarter decline, with significantly weaker profitability in the second half 2019 Quarterly Key Financial Data | Indicator (Yuan) | Q1 | Q2 | Q3 | Q4 | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue | 11,815,832,282.21 | 12,279,266,555.77 | 12,635,848,366.78 | 11,239,535,944.16 | | Net Profit Attributable to Shareholders | 836,832,175.38 | 1,004,115,617.74 | 534,268,295.60 | 231,008,269.34 | | Net Profit Attributable to Shareholders Excluding Non-recurring Items | 773,510,034.58 | 914,018,993.84 | 455,362,632.65 | 206,417,739.57 | | Net Cash Flow from Operating Activities | 1,624,137,220.52 | -320,478,981.65 | 831,348,432.65 | 2,213,485,233.66 | Non-recurring Gains and Losses 2019 non-recurring gains and losses totaled 257 million Yuan, driven by fair value changes and investment income - In 2019, total non-recurring gains and losses amounted to 257 million Yuan, primarily driven by 275 million Yuan in investment income from the disposal of financial assets held for trading, derivatives, and other debt investments, along with 119 million Yuan in entrusted investment gains/losses[20] Company Business Overview This section outlines the company's core business, operating model, industry landscape, and competitive advantages Main Business, Operating Model, and Industry Situation The company is a full-process steel enterprise with 10 million tons annual crude steel capacity, focusing on specialized plate and high-quality long products - The company is a full-process steel integrated enterprise with an annual crude steel production capacity of 10 million tons, primarily engaged in new steel materials and synergistic development of information technology and e-commerce[22] - The company's main products are specialized plate and high-quality special steel long products, widely used in energy, marine engineering, and construction machinery industries, with 5.01 million tons of medium and heavy plate produced in 2019[23] - In 2019, China's crude steel output reached 996 million tons, a 8.3% year-over-year increase, accounting for 53.3% of global output; the domestic steel industry's total profit decreased by 30.90% year-over-year, with sales profit margin falling to 4.43%[29][30][31] Core Competitiveness Analysis Core competitiveness stems from integrated state-owned and private advantages, strong products, leading innovation, stable customer relations, and favorable location - The company integrates the traditional advantages of state-owned enterprises with the flexible mechanisms of private enterprises, forming a "community of interests,事业, and destiny" through employee stock ownership and equity incentive plans[37] - The company possesses strong product capabilities in specialized plate and high-quality special steel long products, with several products, such as steel for cryogenic storage tanks and high-speed rail brake discs, filling domestic gaps or leading market share[38] - The company has established a "2+3+4" multi-level R&D platform and was recognized as an "Intelligent Manufacturing Pilot Demonstration" by the Ministry of Industry and Information Technology; as of the end of 2019, it held 840 valid authorized patents, including 351 invention patents[39][40] - The company has established stable cooperative relationships with renowned domestic and international enterprises such as PetroChina, Sinopec, and Caterpillar, with strategic and key customers accounting for over 30% and direct sales customers exceeding 60%; steel sales through the C2M e-commerce platform accounted for over 80% of total sales[41] Discussion and Analysis of Operations This section details the company's operational highlights, financial performance, asset and liability structure, industry information, and future plans Operational Highlights and Overall Situation In 2019, the company achieved strong production and sales, with 9.93 million tons of steel products sold and a 100.09% production-to-sales ratio, despite industry price declines - During the reporting period, the company's pig iron, crude steel, and steel product output were 9.90 million tons, 10.97 million tons, and 9.92 million tons, respectively, with steel product sales of 9.93 million tons and a production-to-sales ratio of 100.09%[43][46] - The company's products demonstrated strong competitiveness, with the decline in the comprehensive average selling price of steel products (3.99%) being less than the decline in the China Iron and Steel Association's comprehensive steel price index (6.64%)[44] - The company's capital structure optimized, with the asset-liability ratio decreasing by 2.19 percentage points year-over-year to 49.72% in 2019[45] - Despite a 2.632 billion Yuan increase in costs due to rising raw material prices, the company achieved a total cost reduction of 1.016 billion Yuan through various measures, including a 708 million Yuan reduction in process costs[47] - The company focused on building an industrial chain ecosystem, with subsidiaries such as Jinheng Technology, Gangbao Shares, and Xinzhi Chain achieving revenue and profit growth, and providing 540 million Yuan in financial empowerment to 35 customers through its supply chain finance platform[51][52] Main Business Analysis In 2019, main business revenue rose 9.88% to 47.83 billion Yuan, but operating costs surged 19.35% due to higher raw material prices, significantly lowering gross margin Major Changes in Income Statement and Cash Flow Statement Items | Item | Current Period (Yuan) | Prior Period (Yuan) | Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 47,970,483,148.92 | 43,646,788,888.30 | 9.91 | | Operating Cost | 41,600,911,936.67 | 34,868,638,855.39 | 19.31 | | R&D Expenses | 582,046,360.94 | 446,113,982.99 | 30.47 | | Financial Expenses | 275,504,358.40 | 391,122,984.01 | -29.56 | | Operating Profit | 4,056,048,890.81 | 6,038,186,295.17 | -32.83 | | Net Cash Flow from Investing Activities | -920,705,573.88 | -2,613,482,800.31 | 64.77 | Main Business by Industry Segment | Segment | Operating Revenue (Yuan) | Operating Cost (Yuan) | Gross Margin (%) | YoY Change in Operating Revenue (%) | YoY Change in Operating Cost (%) | YoY Change in Gross Margin | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Steel Business | 41,016,795,416.02 | 34,982,339,104.02 | 14.71 | 4.29 | 13.24 | Decreased by 6.74 percentage points | | Trade and Other Businesses | 6,809,445,016.01 | 6,533,371,414.50 | 4.05 | 62.22 | 67.75 | Decreased by 3.17 percentage points | Production and Sales Analysis (million tons) | Main Product | Production Volume | Sales Volume | Inventory Volume | YoY Change in Production Volume (%) | YoY Change in Sales Volume (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Plate | 5.0104 | 4.9859 | 0.2182 | 8.02 | 8.01 | | Bar | 3.4218 | 3.4494 | 0.0502 | 5.30 | 4.85 | | Total | 9.9206 | 9.9297 | 0.2980 | 8.17 | 8.07 | - Total R&D investment in 2019 was 1.823 billion Yuan, accounting for 3.80% of operating revenue; the company completed 63 new product developments and achieved breakthroughs in 15 key technologies, including nickel-saving 7Ni steel for LNG storage tanks[64][65] - Net cash flow from operating activities decreased by 11.95% year-over-year, primarily due to a 1.376 billion Yuan decrease in net profit; net cash flow from investing activities increased by 1.693 billion Yuan, mainly due to a higher base from increased capital in Baizhong Environment in the prior year; net cash flow from financing activities decreased by 590 million Yuan, primarily due to a year-over-year increase in cash dividends[68][69] Asset and Liability Analysis As of 2019-end, total assets reached 43.62 billion Yuan, up 5.89% YoY, with optimized debt structure and a reduced asset-liability ratio Major Changes in Balance Sheet Items | Item Name | Current Period End (Yuan) | Prior Period End (Yuan) | Change (%) | Main Reason | | :--- | :--- | :--- | :--- | :--- | | Cash and Cash Equivalents | 4,265,437,976.64 | 3,067,338,382.07 | 39.06 | Increased cash reserves | | Financial Assets Held for Trading | 1,821,553,153.54 | 0.00 | Not applicable | Reclassification under new financial instruments standards | | Construction in Progress | 2,356,990,285.41 | 1,204,818,693.84 | 95.63 | Construction of environmental protection and energy-saving projects | | Short-term Borrowings | 3,436,057,270.37 | 4,897,255,186.15 | -29.84 | Debt structure adjustment | | Advances from Customers | 3,580,255,819.98 | 2,357,118,134.61 | 51.89 | Increase in long-term steel product orders | | Long-term Borrowings | 845,200,820.84 | 76,000,000.00 | 1,012.11 | New medium and long-term borrowings | | Bonds Payable | 1,026,522,045.55 | 0.00 | 100 | Issuance of medium-term notes | - As of the end of the reporting period, the company's total restricted assets amounted to 6.343 billion Yuan, a significant decrease from 9.182 billion Yuan at the end of the previous year, with notes receivable and cash and cash equivalents being the primary restricted assets[74] Industry Operating Information Analysis In 2019, the company's steel manufacturing and sales were primarily hot-rolled steel, with advanced steel materials showing gross margin resilience Steel Manufacturing and Sales by Finished Product Form (million tons) | Category | Production Volume (Current Year) | Sales Volume (Current Year) | Operating Revenue (10,000 Yuan/Current Year) | Gross Margin (Current Year/%) | Gross Margin (Prior Year/%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Sections | 0.3635 | 0.3681 | 164,154.54 | 16.48 | 16.09 | | Plates and Strips | 5.5722 | 5.5480 | 2,249,098.07 | 16.62 | 24.82 | | Other | 3.9849 | 4.0135 | 1,482,495.18 | 12.96 | 18.30 | Special Steel Product Manufacturing and Sales | Product Name | Sales Volume (tons/Current Year) | Sales Volume (tons/Prior Year) | Operating Revenue (10,000 Yuan/Current Year) | Gross Margin (%/Current Year) | Gross Margin (%/Prior Year) | | :--- | :--- | :--- | :--- | :--- | :--- | | Advanced Steel Materials | 1,372,552.07 | 1,317,272.59 | 683,197.63 | 13.72 | 12.95 | Iron Ore Supply Situation (million tons) | Supply Source | Supply Volume (Current Year) | Supply Volume (Prior Year) | Expenditure (million Yuan/Current Year) | | :--- | :--- | :--- | :--- | | Self-supplied | 0.9890 | 0.9104 | 840.48 | | Domestic Procurement | 1.9442 | 1.1997 | 1,363.31 | | Foreign Import | 13.5643 | 11.6552 | 9,839.72 | Investment Status Analysis External equity investments totaled 85.70 million Yuan, mainly in new materials and overseas sales, alongside significant non-equity investments in environmental and tech upgrades - During the reporting period, the company's total external equity investments amounted to 85.6959 million Yuan, primarily including investments in Keller New Materials and Indonesian Lantan Company[82] - The company's significant non-equity investments primarily focused on environmental protection and technological transformation projects, including resource comprehensive utilization power generation, sintering machine flue gas desulfurization and denitrification, and stockyard enclosure renovation, funded by raised capital and self-financing[84] Discussion and Analysis of Company's Future Development The company aims to become a globally competitive advanced materials intelligent manufacturer, targeting 10.15 million tons of steel products and 48.1 billion Yuan in 2020 revenue - The company's development strategy is to build an industrial chain ecosystem centered on new steel materials, striving to become a globally competitive advanced materials intelligent manufacturer[89] 2020 Operating Targets | Indicator | Target | | :--- | :--- | | Pig Iron Output | 10.50 million tons | | Crude Steel Output | 11.60 million tons | | Steel Product Output | 10.15 million tons | | Operating Revenue | 48.1 billion Yuan | | Fixed Asset Investment | 1.95 billion Yuan | - The company faces key risks including economic risks from the COVID-19 pandemic, market risks from high inventory and intensified competition, and increased environmental costs due to ultra-low emission upgrades[97][98][99] Significant Matters This section covers the company's profit distribution plan, significant related party transactions, and other major corporate actions Profit Distribution Plan The 2019 profit distribution plan proposes a 3.00 Yuan cash dividend per 10 shares (incl. tax), representing a high 50.73% payout ratio of net profit - The company's 2019 profit distribution plan proposes a cash dividend of 3.00 Yuan per 10 shares (including tax), with no capital reserve conversion to share capital; this plan is subject to shareholder approval[104] Dividend Distribution Plans for the Past Three Years | Dividend Year | Cash Dividend per 10 Shares (Yuan) (incl. tax) | Cash Dividend Amount (Yuan) | Ratio to Net Profit Attributable to Shareholders (%) | | :--- | :--- | :--- | :--- | | 2019 | 3.00 | 1,322,246,537.10 | 50.73 | | 2018 | 3.00 | 1,326,694,997.10 | 33.10 | | 2017 | 0.50 | 220,448,872.85 | 6.89 | Significant Related Party Transactions Routine related party transactions occurred with the parent company and subsidiaries, while a significant non-routine share issuance to acquire two subsidiaries' equity is progressing - Routine related party transactions primarily include sales of water, electricity, steam, and slag to related parties, as well as procurement of iron ore, oxygen, nitrogen, and argon from related parties, with transaction pricing based on market principles[132][134][137] - The company plans to issue shares to its controlling shareholder, Nanjing Ganglian, to acquire its 38.72% equity stake in Nangang Development and 38.72% equity stake in Jinjiang Furnace Materials, which upon completion will make these companies wholly-owned subsidiaries of the listed company; this matter is currently in progress[140] Other Significant Matters The company completed a share repurchase for equity incentives, continued incentive plans, issued medium-term notes, and modified fundraising investment projects - The company completed its share repurchase program, repurchasing a total of 21,980,000 shares for a total payment of 74,990,042.00 Yuan, intended for equity incentives[155] - The company continued to advance multiple equity incentive plans, with 7,151,800 new shares issued due to exercise during the reporting period, and 21.98 million stock options newly granted; equity incentive amortization expense was 12.1949 million Yuan[156][157] - In 2019, the company successfully issued two tranches of medium-term notes, each with a total issuance amount of 500 million Yuan, a 3-year term, and coupon rates of 5.5% and 5.35%, respectively[158][159] - The company modified certain fundraising investment projects, adding environmental protection and intelligent development projects such as sintering machine flue gas denitrification and desulfurization, and industrial internet construction projects[160] Share Capital Changes and Shareholder Information This section details changes in the company's share capital and provides an overview of its shareholder structure Share Capital Changes Total share capital increased from 4.422 billion to 4.429 billion shares due to stock option exercise, adding 7,151,800 unrestricted tradable shares - During the reporting period, due to the exercise of equity incentives, the company's total share capital increased by 7,151,800 shares, reaching 4,429,468,457 shares at period-end[183] Shareholder Information As of 2019-end, the company had 123,443 common shareholders, with the controlling shareholder and concerted parties holding 43.27% of shares, some pledged - As of the end of the reporting period, the company had 123,443 shareholders[188] Top Ten Shareholders' Shareholding | Shareholder Name | Shares Held at Period End (shares) | Percentage (%) | Share Status | | :--- | :--- | :--- | :--- | | Nanjing Nangang Iron & Steel United Co., Ltd. | 1,795,351,958 | 40.53 | Pledged | | Hong Kong Securities Clearing Company Limited | 178,399,245 | 4.03 | Unrestricted | | Huarong Ruitong Equity Investment Management Co., Ltd. | 134,000,000 | 3.03 | Unrestricted | | Nanjing Iron & Steel United Co., Ltd. | 121,167,491 | 2.74 | Unrestricted | | National Social Security Fund Council 418 Portfolio | 50,095,667 | 1.13 | Unrestricted | | Nanjing Iron & Steel Co., Ltd. - 2015 Employee Stock Ownership Plan | 43,160,000 | 0.97 | Unrestricted | - The company's controlling shareholder is Nanjing Nangang Iron & Steel United Co., Ltd., and the ultimate actual controller is Mr. Guo Guangchang[193][195] Directors, Supervisors, Senior Management, and Employees This section details shareholding changes and remuneration of directors, supervisors, and senior management, along with employee structure and training initiatives D&S&SM Shareholding Changes and Remuneration Several directors, supervisors, and senior management increased shareholdings due to equity incentive plans, with total remuneration from the company reaching 18.64 million Yuan - During the reporting period, several directors, supervisors, and senior management increased their shareholdings due to the exercise of equity incentives, with President Zhu Ruirong increasing his holdings by 810,000 shares and Executive Vice President Yao Yongkuan by 645,000 shares[202] - As of the end of the reporting period, the total remuneration actually received by all directors, supervisors, and senior management from the company amounted to 18.64 million Yuan[215] Employee Information As of the reporting period end, the company and its main subsidiaries employed 10,161 staff, with production personnel at 73.5% Employee Professional Structure | Professional Category | Number of Employees | | :--- | :--- | | Production Personnel | 7,473 | | Sales Personnel | 162 | | Technical Personnel | 821 | | Financial Personnel | 104 | | Administrative Personnel | 1,601 | | Total | 10,161 | - The company implements a remuneration system linked to efficiency and job contribution, and offers diversified incentive measures for core talents, including equity incentives, annual salaries, and allowances[219] Corporate Governance This section provides an overview of the company's corporate governance structure and its effective operation Corporate Governance Overview The company has a sound corporate governance structure with clear responsibilities for shareholders, board, supervisors, and management, ensuring scientific decision-making and effective supervision - The company has established a sound corporate governance structure, with clear division of responsibilities among the General Meeting of Shareholders, Board of Directors, Supervisory Committee, and management, operating strictly according to decision-making authority and procedures[223] - During the reporting period, the four special committees under the Board of Directors—Strategy, Audit, Remuneration and Appraisal, and Nomination—actively fulfilled their duties, providing recommendations for the Board's scientific decision-making without raising any dissenting opinions[229] - The company disclosed its 2019 Internal Control Evaluation Report, and Tianheng Certified Public Accountants issued a standard unqualified internal control audit report[232][233] Financial Report and Audit Opinion This section presents the audit opinion on the financial statements and details significant accounting policy changes Audit Opinion Tianheng Certified Public Accountants issued a standard unqualified audit opinion on the company's 2019 financial statements, affirming their fair presentation - The auditing firm, Tianheng Certified Public Accountants, issued a standard unqualified audit opinion on the company's 2019 financial statements[236] - A key audit matter for this period's financial statements was "Inventory Impairment Provision"; as of the end of 2019, the company's inventory balance was 6.266 billion Yuan, with an inventory impairment provision balance of 385 million Yuan[238][239] Significant Accounting Policy Changes Effective January 1, 2019, the company adopted revised new financial instruments standards, reclassifying financial assets and retrospectively adjusting opening balances - The company adopted the new financial instruments standards effective January 1, 2019, and made corresponding adjustments to the financial statement format; this accounting policy change only adjusted opening retained earnings or other comprehensive income, without retrospective adjustment of comparative statements[332] Impact of New Financial Instruments Standards on Opening Financial Position | Item | Before Adjustment (Yuan) | After Adjustment (Yuan) | Adjustment Amount (Yuan) | | :--- | :--- | :--- | :--- | | Financial Assets Held for Trading | 0 | 1,404,850,999.41 | 1,404,850,999.41 | | Financial Assets Measured at Fair Value Through Profit or Loss | 172,096,879.41 | 0 | -172,096,879.41 | | Notes Receivable | 5,595,253,891.07 | 0 | -5,595,253,891.07 | | Receivables Financing | 0 | 5,595,253,891.07 | 5,595,253,891.07 | | Available-for-sale Financial Assets | 445,331,691.00 | 0 | -445,331,691.00 | | Other Equity Instrument Investments | 0 | 353,404,809.36 | 353,404,809.36 | | Other Comprehensive Income | 16,840,501.20 | 35,464,102.47 | 18,623,601.27 | | Retained Earnings | 8,055,774,551.02 | 8,125,856,416.57 | 70,081,865.55 |