LK(SH:600388)2023-03-17 16:00Financial Performance - Basic earnings per share for 2022 was CNY 0.75, a decrease of 6.25% compared to CNY 0.80 in 2021[34] - Diluted earnings per share for 2022 was CNY 0.68, down 6.85% from CNY 0.73 in 2021[34] - The weighted average return on equity for 2022 was 11.18%, a decrease of 2.15 percentage points from 13.33% in 2021[34] - The net profit attributable to shareholders for 2022 was CNY 804,285,914.70, a decrease of 6.52% from CNY 860,348,555.40 in 2021[50] - The net cash flow from operating activities for 2022 was CNY 834,552,421.08, down 31.24% from CNY 1,213,764,912.23 in 2021[50] - The company reported a decrease in the basic earnings per share after deducting non-recurring gains and losses to CNY 0.61, down 6.15% from CNY 0.65 in 2021[34] - The company reported a net profit margin of approximately 9.8% based on its net profit of RMB 17,076.73 million from total revenue of RMB 174,123.30 million[92] Dividend Distribution - The company plans to distribute a cash dividend of CNY 1.8 per 10 shares, including tax[4] - The total amount of cash dividends distributed is 192,863,605.14 RMB, accounting for 23.98% of the net profit attributable to ordinary shareholders in the consolidated financial statements[185] - The company declared a cash dividend of 1.8 RMB per 10 shares, totaling 192,863,605.14 RMB, which represents 23.98% of the net profit attributable to ordinary shareholders in the consolidated financial statements[185] Government Subsidies and Non-Operating Income - The company received government subsidies amounting to CNY 103,493,198.09 in 2022, down from CNY 121,818,061.97 in 2021[38] - The net profit attributable to shareholders for 2022 included non-operating income of CNY 150,274,687.33, compared to CNY 163,977,849.31 in 2021[39] Internal Control and Governance - The company completed the rectification of internal control deficiencies during the reporting period, ensuring effective operation of internal controls[21] - The company has taken effective measures to strengthen internal control management and ensure the effectiveness of internal controls since the restructuring of the board in June 2022[117] - The company has established a governance structure to enhance decision-making efficiency and quality, including the formation of various committees[102] - The company has engaged in ongoing discussions regarding potential mergers and acquisitions to expand its market presence[132] - The company has been actively adjusting its governance structure to enhance operational efficiency and decision-making processes[140] Market and Sector Developments - The company has initiated a dual-driven development strategy focusing on "environmental protection + new energy" following the acquisition by Zijin Mining[66] - The company is actively pursuing market opportunities in the flue gas treatment sector due to the anticipated increase in coal power projects in China[59] - The company aims to expand its market presence in non-electric flue gas treatment and enhance its capabilities in soil remediation and water treatment projects[112] - The company is positioned to benefit from the "dual carbon" initiative, with significant market opportunities in energy storage, wind power, and photovoltaics, although it anticipates increased competition and potential profit volatility[99] New Energy Initiatives - New energy projects are underway, including clean energy, energy storage cells, and battery systems, with significant projects in Heilongjiang, Serbia, and Guyana[66] - The company has initiated its layout in the new energy sector, with the first 5GWh lithium iron phosphate energy storage cell project underway, and a joint venture with Honeycomb Energy for a 2GWh energy storage PACK project[68] - In 2022, the new energy sector saw rapid development, with China adding 933.8MW/1,911.0MWh of new energy storage projects in the first three quarters, a year-on-year increase of 113%[75] - By the end of 2022, the cumulative installed capacity of operational energy storage projects in China reached 50GW, with a significant increase in domestic energy storage bidding volume by 355.5% month-on-month in October[77] - The wind and solar power industries experienced substantial growth, with an expected addition of over 120GW of new installed capacity in 2022, representing a year-on-year increase of approximately 17%[77] Environmental Business Performance - The environmental business has remained stable overall since 2022, with strong competitiveness in air pollution control, achieving significant contracts in coal power, steel, and coking industries, and successfully signing multiple overseas export projects[68] - The company has maintained its leading position in the air pollution control industry, with its products consistently ranking first in sales for over a decade[83] - The non-electricity sector is currently the main battlefield for flue gas governance, with over 60% of steel production capacity in China having completed ultra-low emission transformations[81] Technological Advancements - The company has developed effective low-carbon environmental technology for solid waste disposal, which can reduce CO2 emissions by over 37,000 tons annually when using 5% sludge in a 660MW coal-fired power plant[148] - The company has implemented a series of technological breakthroughs to support carbon capture and utilization, as well as waste disposal[149] - The implementation of carbon capture and utilization technologies in waste incineration plants aims to minimize energy consumption and reduce NOx emissions[159] - The company’s projects in construction and metallurgy are estimated to reduce CO2 emissions by over 1.5 million tons annually through advanced dust and nitrogen oxide control technologies[176] Employee and Management Initiatives - The company has optimized its organizational structure and implemented a talent empowerment initiative, focusing on leadership potential and enhancing human resource management efficiency[73] - The employee stock ownership plan has been implemented in ten phases from 2014 to 2023, involving a total of 2,543 employees across various phases[188] - The company has a robust training program aimed at enhancing employee skills and leadership capabilities, focusing on various professional development areas[195] Challenges and Regulatory Issues - The company has faced administrative regulatory measures from the Fujian Securities Regulatory Bureau, including a warning letter issued on November 14, 2022[154] - The company has not disclosed a separate social responsibility report or ESG report for the year[150] - The company experienced a board reorganization, resulting in the departure of several directors and senior management personnel[153] Strategic Focus - The company emphasizes the importance of advanced technology and efficient management to survive and thrive in the increasingly competitive environmental protection industry[94] - The company is committed to high-quality development in waste incineration power generation and hazardous waste disposal, focusing on operational management and process optimization[112]