FSSS(SH:600399)2020-03-30 16:00Financial Performance - The company reported a net profit of RMB 305,533,701.07 for the year 2019, with an allocation of RMB 30,553,370.11 to surplus reserves, resulting in a cumulative undistributed profit of RMB 280,080,823.57 by the end of 2019[6]. - The company does not plan to distribute profits or increase capital reserves for the year 2019[6]. - In 2019, the company's operating revenue was approximately CNY 5.74 billion, a decrease of 1.82% compared to 2018[25]. - The net profit attributable to shareholders was approximately CNY 302 million, representing a significant decline of 88.42% year-on-year[25]. - The net cash flow from operating activities reached approximately CNY 1.05 billion, an increase of 945.62% compared to the previous year[25]. - The basic earnings per share were CNY 0.15, down 92.54% from CNY 2.01 in 2018[28]. - The total assets of the company increased by 7.73% to approximately CNY 8.55 billion by the end of 2019[25]. - The net assets attributable to shareholders rose by 7.34% to approximately CNY 4.48 billion[25]. - The company achieved a net profit of approximately CNY 128 million in Q4 2019, showing a recovery trend[29]. - The company reported a significant reduction in manufacturing costs, with a 4.17% decrease in operating costs compared to the previous year[44]. - The gross margin for the steel industry was 16.69%, an increase of 2.38 percentage points from the previous year, despite a 2.34% decrease in revenue[45]. - The company reported a significant increase in revenue, achieving a total of 60 million in the latest fiscal year, representing a growth of 15% year-over-year[112]. Regulatory and Compliance Issues - The company faced regulatory scrutiny from the China Securities Regulatory Commission (CSRC) due to suspected violations of information disclosure laws, which may expose the company to risks of claims from minority shareholders[7]. - The company has been penalized by the China Securities Regulatory Commission for failing to disclose periodic reports on time, resulting in fines and warnings for the company and its executives[132]. - The company is under scrutiny for its financial practices and compliance with regulatory requirements, impacting its operational strategies moving forward[132]. Subsidiary Operations and Risks - The company’s subsidiary, AVIC Special Materials, transitioned from bankruptcy liquidation to a settlement process, with a court ruling on December 27, 2019, allowing for a six-year repayment plan[10]. - Another subsidiary, Northeast Special Steel Group Electromechanical Engineering Co., Ltd., is undergoing bankruptcy liquidation, which may impact the company's supply chain and operations[10]. - The company has taken measures to mitigate risks associated with the potential cessation of operations of its important supplier, the Electromechanical Engineering subsidiary[10]. - The company is facing risks including potential claims from minority shareholders due to past regulatory investigations[89]. Research and Development - The company invested CNY 302 million in R&D in 2019, focusing on high-end alloys and special steel materials for industries such as aerospace and nuclear power[37]. - The company was awarded 7 national research projects in 2019, with a total of 41 ongoing projects[37]. - The company plans to focus on high-temperature alloys, ultra-high-strength steel, and high-end tool steel in its future R&D efforts to meet the needs of high-end manufacturing industries[87]. - 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 and technological upgrades[87]. Environmental and Social Responsibility - The company monitored and ensured that all wastewater and air emissions met environmental standards, with wastewater discharge at 838,000 tons in 2019[168]. - The company completed several pollution control projects to improve the working environment, including dust control enhancements in steel production facilities[169]. - The company emphasizes social responsibility, focusing on high-quality products and services while engaging in community support and environmental protection[167]. - The company allocated RMB 42,000 for poverty alleviation funds, providing assistance to 1000 RMB per year for each impoverished household[161]. Strategic Planning and Future Outlook - The company plans to achieve steel production of 620,000 to 700,000 tons and steel product output of 490,000 to 540,000 tons in 2020, with key products targeted at 430,000 to 480,000 tons[88]. - The projected revenue for 2020 is between 5.5 billion to 6.5 billion RMB, with a net profit forecast of 250 million to 350 million RMB[88]. - The company is planning to expand its market presence in Southeast Asia, targeting a 25% increase in market share within the next two years[116]. - The company has committed to maintaining a stable profit distribution policy while focusing on sustainable development[99]. Legal Matters - The company is involved in a lawsuit regarding a contract dispute, seeking payment of overdue electricity fees amounting to RMB 251,279.16, with the case currently under review[119]. - Another lawsuit involves a claim for overdue electricity fees of RMB 400,000, with the court ruling in favor of the company, and the case is currently in execution[119]. - The company is appealing a court decision to pay RMB 607,040.32 related to a sales contract dispute, with the case currently under review[122]. - A lawsuit is ongoing where the company is required to confirm a debt of RMB 409,979,743.38, with the case awaiting judgment from the higher court[122]. Shareholder and Management Information - The total number of ordinary shareholders at the end of the reporting period was 89,072, an increase from 85,167 at the end of the previous month[177]. - The largest shareholder, Northeast Special Steel Group Co., Ltd., holds 576,876,444 shares, representing 29.25% of total shares[177]. - The company has not experienced any changes in the total number of ordinary shares or share capital structure during the reporting period[176]. - The total pre-tax remuneration for senior management during the reporting period amounted to 554.77 million yuan[194].