Gofar Stock(SH:600538)2022-03-28 16:00Financial Performance - The net profit attributable to shareholders for 2020 was CNY 3,200,573.27, with a cumulative profit available for distribution at the end of 2020 being CNY -435,757,212.81[5] - The company's capital reserve at the end of 2020 was CNY 735,508,718.82[5] - The company will not distribute profits or increase capital reserves for the year 2020 due to negative cumulative undistributed profits[5] - The company's operating revenue for 2020 was CNY 267,699,833.56, representing a 6.59% increase compared to CNY 251,153,525.23 in 2019[19] - The net profit attributable to shareholders decreased by 44.56% to CNY 3,200,573.27 from CNY 5,772,938.14 in the previous year[19] - The net cash flow from operating activities improved significantly to CNY 26,844,785.64, compared to a negative cash flow of CNY -5,442,980.17 in 2019[19] - The total assets increased by 42.09% to CNY 1,065,713,192.47 at the end of 2020, up from CNY 750,047,508.16 in 2019[19] - The company's net assets attributable to shareholders rose by 30.79% to CNY 844,417,226.94 from CNY 645,608,650.70 in the previous year[19] - Basic earnings per share decreased by 41.67% to CNY 0.007 in 2020, down from CNY 0.012 in 2019[20] - The weighted average return on net assets was 0.49%, a decrease of 0.41 percentage points from 0.90% in 2019[20] - The company reported a significant increase in net profit after deducting non-recurring gains, reaching CNY 1,667,096.30, compared to a loss of CNY -10,728,072.87 in 2019[19] - The fourth quarter of 2020 saw the highest quarterly revenue of CNY 86,358,044.86, contributing to a recovery in profitability[23] Acquisitions and Investments - The company completed the acquisition of Gaosheng Biology, which contributed to the increase in total assets and net assets[21] - The acquisition of Gaosong Biological was completed on December 23, 2020, and its balance sheet was included in the consolidated financial statements, although its income statement was not[29] - The company acquired 99.9779% of Gaosheng Biological for a total transaction amount of 355.6932 million RMB, with cash consideration of 158.1597 million RMB and share consideration of 197.5336 million RMB[46] - The company completed the acquisition of GaoSheng Bio, enhancing its sustainable development capabilities and entering the in vitro diagnostic industry[53] - The company has established a joint venture, Shanghai Hanhu Bio-pharmaceutical Co., Ltd., with a registered capital of RMB 30 million, in which the company holds a 15% stake[167] - The company acquired an additional 50% stake in Guangdong Gaosong Forensic Technology Co., Ltd., increasing its ownership to 100% and changing the company's name to Guangdong Gaosong Information Technology Co., Ltd.[182] Operational Risks and Management - There were no significant risks that materially affected the company's operations during the reporting period[6] - The company has not engaged in non-operational fund occupation by controlling shareholders or related parties[6] - The company has not violated decision-making procedures for external guarantees[6] - The company has detailed various operational risks and corresponding countermeasures in the report[6] - The integration of GaoSheng Bio's management and financial systems is ongoing, with plans to optimize internal controls and improve management levels in 2021[54] - The company aims to enhance internal control systems to ensure legal and compliant operations[126] - The company will optimize management and control systems to improve operational efficiency and decision-making processes[130] Market and Industry Trends - The pharmaceutical industry is characterized by inelastic demand, with limited cyclical fluctuations, and the company benefits from strong regional distribution capabilities[39] - The ongoing national medical reform and cost control measures are pressuring pharmaceutical companies to shift towards high-quality development[45] - The medical industry is expected to grow due to economic recovery and increased health awareness post-COVID-19, despite challenges from price procurement policies[119] - The forensic DNA testing industry is experiencing rapid growth, with judicial identification cases increasing approximately 7.85 times from 2005 to 2018, with a CAGR of 17.91%[122] Social Responsibility and Environmental Impact - The company emphasizes maintaining shareholder rights and has established a comprehensive internal control system to protect the interests of all shareholders[185] - The company actively engages in social responsibility initiatives, particularly in response to the COVID-19 pandemic[186] - The company has implemented a clean production and energy management strategy to enhance its environmental responsibility[186] - The company donated a total of 150,000 bottles of 100ML ethanol disinfectant to various hospitals for COVID-19 prevention efforts[186] - The company reported a total wastewater discharge of 42,164 tons in 2020, with biochemical oxygen demand (BOD) emissions of 105.41 kg and chemical oxygen demand (COD) emissions of 421.64 kg[188] Shareholder and Dividend Policies - The company has a commitment from shareholders regarding the lock-up period for newly issued shares, which lasts for 12 months from the completion of the issuance[148] - The cash dividend policy stipulates that the company should distribute at least 30% of the average distributable profit over the last three years if there are positive retained earnings[145] - The company has not proposed any cash profit distribution plans despite having positive profits available for distribution to ordinary shareholders[147] - The cash dividend distribution is contingent upon the company having positive retained earnings and not planning significant investments or cash expenditures[145] Financial Reporting and Audit - The company received a standard unqualified audit report from Tianjian Accounting Firm[4] - The company appointed Tianjian Accounting Firm for the 2020 financial statement audit, with an audit fee of RMB 400,000[161] - The company executed the new revenue recognition standard starting January 1, 2020, impacting the financial statements without adjusting prior periods[158] - The company has no significant accounting errors or changes in accounting policies that would affect the financial statements[159] Research and Development - Research and development expenses decreased by 33.66% compared to the previous year, amounting to 50,134 RMB[59] - The company’s research and development expenses totaled CNY 50,133.53, accounting for 0.02% of total revenue, with a decrease in R&D investment compared to the previous year[69][70] Customer and Sales Performance - The company has established a stable customer base with 7 direct stores and 58 franchise stores in the North Bay area[35] - The company achieved operating revenue of 268 million RMB in 2020, with pharmaceutical manufacturing sales accounting for 15.11% and pharmaceutical distribution sales for 74.27% of total sales[31] - The sales revenue for ethanol disinfectant in 2020 amounted to 22.67 million yuan[100] - The company’s revenue from ophthalmic drugs (Pearl Eye Drops) decreased by 44.4% compared to the previous year, with a gross margin of 69.84%[104] - The revenue from gastrointestinal drugs (Gastrointestinal Ning Granules) decreased by 15.18%, with a gross margin of -39.27%[104]