LZCIC(SH:600423)2019-03-20 16:00Financial Performance - The company's net profit for 2018 was CNY 387,131,950.45, but the cumulative distributable profit was negative at CNY -423,596,890.16, leading to no profit distribution proposed for the year [5]. - The company's operating revenue for 2018 was approximately ¥2.01 billion, representing a 9.75% increase compared to ¥1.83 billion in 2017 [23]. - The net profit attributable to shareholders for 2018 was approximately ¥390.30 million, a significant increase of 534.11% from ¥61.55 million in 2017 [23]. - The basic earnings per share for 2018 was ¥0.90, reflecting a 500% increase from ¥0.15 in 2017 [25]. - The net cash flow from operating activities decreased by 91.42% to approximately ¥24.16 million, primarily due to a government subsidy of ¥330 million received in the previous year [26]. - The total assets at the end of 2018 were approximately ¥2.74 billion, a decrease of 14.39% from ¥3.20 billion at the end of 2017 [24]. - The net assets attributable to shareholders increased significantly to approximately ¥2.19 billion, up 5,566.08% from ¥38.63 million at the end of 2017 [24]. - The weighted average return on equity for 2018 was 166.95%, a decrease of 815.19 percentage points from 982.14% in 2017 [25]. - The company reported a total profit of 482 million RMB, with a net profit of 376 million RMB, and earnings per share of 0.90 RMB [46]. Operational Challenges - The company faced significant financial challenges, including a loss of CNY 478 million in operating profit and a provision for asset impairment of CNY 469 million in 2018 [8]. - The company is under judicial reorganization, with the court approving the reorganization plan on November 26, 2018, but the execution of the plan is still ongoing, posing risks of bankruptcy and delisting [8]. - The company has been under continuous risk of delisting due to negative net profits in 2015 and 2016, and its stock is still under risk warning as of 2018 [8]. - The company is facing operational risks related to potential relocation or shutdown due to its classification as a hazardous chemical production enterprise in a densely populated area [9]. - The company has not been able to secure favorable credit from financial institutions during the reorganization period, leading to financing difficulties [5]. - The company experienced two fire incidents in the diammonium system, leading to prolonged shutdowns and increased repair costs [39]. - The company is undergoing a judicial reorganization process, with the reorganization plan approved by the court on November 26, 2018 [43]. - The company is currently undergoing a judicial reorganization plan, which is still in the execution phase, creating uncertainties in production and operations [125]. Debt and Liabilities - The company has provided guarantees for loans amounting to CNY 21,758.02 million for Hunan Zhongcheng, which remains unpaid, and has settled CNY 10,917.32 million as part of a debt restructuring plan [7]. - The company recorded a debt restructuring gain of 1.22 billion RMB due to the execution of the reorganization plan [45]. - The company executed a debt restructuring plan, resulting in a repayment of 109.17 million to creditors [140]. - The company faced a debt of 154.70 million from Hunan Zhongcheng, which remains unpaid as of the report date [140]. - The company has been involved in multiple lawsuits, including a contract dispute with Xi'an Shangu Engineering Technology Co., with a principal debt of RMB 10.5 million, which has been adjudicated [152]. - The company has completed debt repayment related to several lawsuits, as confirmed by the management and approved by the Liuzhou Intermediate Court [154]. Shareholder and Capital Structure - The company expanded its total share capital to 798,695,026 shares as part of the equity adjustment plan [45]. - The restructuring plan includes a capital increase from 399.35 million shares to 798.70 million shares, with a debt conversion price set at 4.83 yuan per share [149]. - The largest shareholder, Liuhua Group, saw its ownership percentage decrease from 5.72% to 2.86% after the share conversion [176]. - The restructuring investor, Yuantong Company, increased its shareholding from 3.47% to 25.22%, becoming the controlling shareholder [177]. - The total number of ordinary shareholders increased from 27,527 to 29,583 during the reporting period [179]. - The total equity structure post-conversion shows that the combined shareholding of the four major stakeholders is 28.46% [178]. - The conversion of capital reserves improved the company's financial situation by increasing net assets per share and settling debts [176]. Environmental and Safety Management - The company reported a total pollutant discharge of 54.9 tons of ammonia nitrogen and 262.9 tons of chemical oxygen demand during the reporting period, exceeding the permitted limits [163]. - The company’s nitrogen fertilizer industry pollutant discharge limits were set at 26 tons of ammonia nitrogen, 208 tons of chemical oxygen demand, 663.11 tons of sulfur dioxide, 376.32 tons of nitrogen oxides, 195.26 tons of particulate matter, and 350 tons of ammonia for the year [163]. - The company’s actual emissions exceeded the permitted discharge limits for sulfur dioxide and ammonia nitrogen by 3.14% and 180% respectively [164]. - The company maintained a 98% operational rate for its environmental protection facilities during the reporting period [166]. - The company has established an emergency response plan for environmental incidents to minimize damage in case of accidents [167]. - The company is committed to enhancing safety and environmental management to mitigate responsibility risks associated with new regulations [128]. Research and Development - The company is engaged in research and development of new technologies, particularly in environmental protection, such as tail gas treatment and wastewater management [85]. - The company applied for 3 patents in 2018, including 1 core invention patent, and holds a total of 25 valid patents by the end of 2018 [90]. - The company has established a research and development organization with 157 R&D personnel, including 37 with senior titles [90]. Management and Governance - The company has maintained a stable management structure with no new appointments or departures reported during the period [190]. - The company’s chairman and general manager, Lu Shengyun, received a total remuneration of 179,500 RMB (17.95 million RMB) [190]. - The independent directors received total remuneration ranging from 2,500 RMB to 5,000 RMB, with no shareholding changes reported [190]. - The company did not conduct a board and supervisory committee re-election during the reporting period due to ongoing restructuring efforts [193]. - The company has maintained a stable management team to ensure the smooth execution of its restructuring plan [193].