FSSS(SH:600399)2019-03-28 16:00Financial Performance - The company reported a net profit of ¥2,618,921,456.31 for the year 2018, with a provision for surplus reserve of ¥668,414.36, resulting in a cumulative undistributed profit of ¥6,015,729.26 at the end of the year[6]. - The company plans not to distribute profits or increase capital reserves for the year 2018 due to insufficient distributable profits and a negative net profit after excluding non-recurring gains and losses[6]. - The company's operating revenue for 2018 was CNY 5,847,731,734.98, an increase of 17.32% compared to CNY 4,984,304,965.53 in 2017[33]. - The net profit attributable to shareholders in 2018 was CNY 2,607,308,283.68, a significant increase of 294.93% from a loss of CNY 1,337,585,276.28 in 2017[33]. - The basic earnings per share for 2018 was CNY 2.01, compared to a loss of CNY 1.03 per share in 2017, marking a 295.15% increase[34]. - The company reported a net cash flow from operating activities of CNY -124,172,658.42 in 2018, a decrease of 118.50% from CNY 671,135,719.31 in 2017[33]. - The company completed a restructuring plan in December 2018, which significantly improved its financial condition, with a total of CNY 2,826,000,000 included in the 2018 financial data due to debt exemption and net gains from the restructuring[34]. - The company reported a net profit of approximately 2.62 billion RMB for 2018, with no profit distribution planned due to insufficient distributable profits[102]. Restructuring and Compliance - The company underwent a restructuring process approved by the Fushun Intermediate People's Court, which was completed on December 27, 2018, enhancing its sustainable development capabilities[12]. - The company confirmed the resolution of risks related to asset misstatement and the ability to continue as a going concern after implementing internal control improvements and restructuring[14]. - The company has eliminated the joint guarantee responsibility for the financing of its controlling shareholder, Northeast Special Steel Group, due to the approval of a restructuring plan[13]. - The company completed internal control rectification work related to accounting errors, ensuring compliance with regulatory requirements[14]. - The company successfully completed its bankruptcy reorganization in 2018, reducing its debt ratio from 117% to below 50%, significantly lower than the industry average[133]. - The reorganization plan was approved by the court on November 22, 2018, marking the end of the reorganization process[133]. - The company has completed rectification measures as mandated by the Liaoning Regulatory Bureau of the China Securities Regulatory Commission regarding internal control and accounting issues[145]. - The company is under investigation by the China Securities Regulatory Commission for failing to disclose periodic reports within the statutory deadline, which may result in administrative penalties[145]. Market and Industry Context - The domestic special steel industry continues to grow rapidly, with a persistent shortage of high-end product supply[43]. - The domestic special steel industry faces a supply contradiction, with an oversupply of low-end products and a lack of high-tech products to meet the demands of high-end manufacturing[95]. - The international economic environment remains complex, with trade disputes potentially impacting market demand and leading to risks of oversupply in the low-end product segment[99]. - The domestic special steel industry is experiencing increased competition and is working towards higher industry concentration driven by national policies and market forces[100]. Research and Development - Research and development expenses amounted to 287 million RMB in 2018, reflecting a 57.40% increase compared to the previous year[53]. - The company was awarded 5 national research projects in 2018, with a total of 41 ongoing projects[45]. - The company has a total of 1,036 R&D personnel, accounting for 12.57% of the total workforce[68]. - The company aims to enhance its capabilities in providing raw materials for key industries such as aerospace and national defense through increased investment in R&D for high-end special steel products[96]. Environmental Responsibility - In 2018, the company discharged 360,000 tons of wastewater, with a chemical oxygen demand of 5.45 tons, sulfur dioxide emissions of 192.06 tons, nitrogen oxides emissions of 180.41 tons, and particulate matter emissions of 168.48 tons[189]. - The company has one wastewater discharge outlet and 140 air discharge outlets, all of which meet environmental standards after treatment[189]. - The company has installed online monitoring equipment at its wastewater treatment plant and some coal-fired boilers to ensure compliance with environmental regulations[189]. - The company has not reported any major environmental protection incidents in 2018, indicating good operational status of its pollution control facilities[190]. - The company emphasizes the importance of environmental protection and has established emergency response plans for environmental incidents[193]. Social Responsibility - The company allocated 410,000 RMB for poverty alleviation projects, helping 81 registered impoverished individuals to escape poverty[184]. - The company has established a poverty alleviation work team consisting of seven experienced employees to assist in targeted poverty alleviation efforts[179]. - The company plans to continue its poverty alleviation initiatives, focusing on promoting local agricultural products and enhancing brand recognition[187]. - The company has conducted 12 visits to understand the living conditions of impoverished households and to analyze poverty alleviation methods[181]. - The company has organized various meetings to ensure effective communication and implementation of poverty alleviation strategies[181]. Related Party Transactions - The company engaged in various related party transactions, including purchasing materials worth 121,993,786.65 and accepting processing services valued at 2,588,497.21[155]. - The company’s related party transactions are authorized and beneficial for reducing operational costs[160]. - The company’s strategic focus includes expanding its product range and maintaining independence despite related party transactions[162]. - The total value of materials purchased from related parties was 21,378,918.21, showcasing the company's reliance on its network[155]. - The company’s related party transactions did not have a significant impact on its financial position[168].