SPEG(SH:600679)2023-06-13 16:00Financial Performance - Shanghai Phoenix reported a net profit attributable to shareholders of 12,267,270.98 yuan for 2018, a decrease of 84.03% compared to 76,824,140.01 yuan in 2017[5]. - The company's operating revenue for 2018 was 761,521,415.91 yuan, down 46.68% from 1,428,081,358.55 yuan in 2017[23]. - The net cash flow from operating activities was -25,751,928.49 yuan, a decline of 164.13% compared to 40,153,104.85 yuan in 2017[23]. - Basic earnings per share decreased to 0.030 yuan in 2018, down 84.29% from 0.191 yuan in 2017[24]. - The total assets of the company at the end of 2018 were 1,760,400,517.49 yuan, a decrease of 7.31% from 1,899,202,158.03 yuan at the end of 2017[23]. - The company's net assets attributable to shareholders were 1,330,839,098.94 yuan at the end of 2018, a slight decrease of 0.56% from 1,338,377,473.85 yuan in 2017[23]. - The weighted average return on net assets was 0.912% in 2018, down 4.99 percentage points from 5.903% in 2017[24]. - The company reported a total of RMB 20.88 million in non-recurring gains in 2018, with significant contributions from government subsidies and other non-operating income[28]. - The company achieved operating revenue of CNY 761.52 million, a decrease of 46.68% year-on-year[40]. - Operating costs amounted to CNY 622.01 million, down 48.93% compared to the previous year[40]. - The net profit attributable to the parent company was CNY 12.27 million, reflecting a significant decline of 84.03% year-on-year[41]. Market and Industry Context - The bicycle industry in China faced challenges, with total production declining by 17.1% to 73.2 million units in 2018, while electric bicycle production increased by 5.8% to 32.8 million units[33]. - The company experienced a 14.9% decline in revenue for large-scale bicycle enterprises, totaling RMB 43.81 billion, and a 24.4% drop in profit to RMB 1.12 billion in the first eleven months of 2018[33]. - The company faced external challenges, including tariffs imposed by the US and EU on Chinese bicycles and components, impacting export opportunities[34]. - The company emphasized its brand advantage, with the "Phoenix" brand recognized as a famous trademark in China, contributing significantly to its competitive edge[35]. - The company plans to enhance brand awareness through various promotional activities, including sponsorships and participation in exhibitions, to strengthen the Phoenix brand as a key intangible asset[67]. - The company aims to upgrade its product structure by increasing investment in R&D, focusing on health and leisure-oriented bicycles, and expanding into new product categories such as children's bikes and electric vehicles[67]. - The company will improve its marketing channels by transitioning from traditional sales methods to a focus on high-end mountain bikes and online sales, aligning with the "Belt and Road" initiative for international market expansion[68]. - The company faces significant market risks due to intense competition in the bicycle industry, exacerbated by economic pressures and the impact of shared bicycle services on traditional sales[69]. Research and Development - The company has invested in R&D, enhancing its capabilities in new product development and technology application, which is expected to improve its market position[35]. - R&D expenses increased by 44.95% to CNY 6.51 million, indicating a focus on product innovation[50]. - Research and development expenses were reported at ¥4,491,258.58, highlighting the company's commitment to innovation[83]. - The company reported a significant increase in research and development expenses to CNY 6,510,109.64 from CNY 4,491,258.58, an increase of 45.0%[169]. Cash Flow and Investments - The net cash flow from investing activities dropped to -111,472,325.42, representing a decrease of 307.97% from 53,598,981.02 in the same period last year[52]. - The net cash flow from financing activities was -38,950,118.53, down 41.84% from -66,965,643.68 year-over-year[52]. - The company has invested CNY 11.4 million to establish a joint venture with Tianjin Fujida Group and Jiangsu Meile Investment, holding a 30% stake[56]. - A total of CNY 7 million was invested to set up Jiangsu Fengzhuo Metal Products Co., with the company holding a 70% stake[56]. - The company has invested 63.29 million RMB in bank wealth management products, with an outstanding balance of 4.68 million RMB[98]. - The expected annualized return on bank wealth management products ranges from 3% to 3.12%[99]. - The company fully recovered 32.11 million RMB from a bank wealth management product managed by Pudong Development Bank[99]. Governance and Compliance - The report includes a standard unqualified audit opinion from the accounting firm[4]. - The company has retained the auditing firm for five years, with an audit fee of ¥954,000.00 for the current year[85]. - The company strictly adheres to the requirements of the Company Law and Securities Law, enhancing information disclosure and internal control systems to improve governance and transparency[139]. - The board of directors and supervisory board operate independently, ensuring no interference from controlling shareholders in major decisions[140]. - The audit committee held 3 meetings during the reporting period, monitoring financial reporting and external audit processes[145]. - The internal control self-assessment report has been disclosed, indicating no significant deficiencies in internal control during the reporting period[148]. - The company has established performance evaluation standards and incentive mechanisms for senior management based on the implementation of annual objectives[152]. Legal and Regulatory Matters - The company is involved in significant litigation, including a claim for ¥68,151,082.53 related to overdue payments from a business partner[87]. - The company is facing a total claim amount of ¥56,780,000.00 in a lawsuit involving its subsidiary related to loan agreements[87]. - The company has initiated legal proceedings against OFO for overdue receivables, with a civil judgment obtained in December 2018[154]. Employee and Management Information - The total number of employees in the parent company and major subsidiaries was 661, with 349 in production, 56 in sales, 58 in technology, 26 in finance, and 172 in administration[134]. - The company actively seeks to establish a fair, transparent, and reasonable performance evaluation and incentive mechanism for directors and senior management[135]. - The company plans to enhance employee training by collaborating with various professional institutions to improve management and professional skills[136]. - Mr. Ding Shansheng retired due to age, and Ms. Yu Li was elected as the employee representative supervisor[133]. Shareholder Information - The total number of ordinary shareholders increased from 44,867 to 45,059 during the reporting period[109]. - The largest shareholder, Shanghai Jinshan District State-owned Assets Supervision and Administration Commission, holds 117,354,739 shares, representing 29.18% of the total shares[111]. - Jiangsu Meile Investment Co., Ltd. had a reduction of 4,619,980 shares, holding a total of 39,339,505 shares, which is 9.78% of the total[111]. - The company did not report any changes in the total number of ordinary shares or share capital structure during the reporting period[106]. Asset and Liability Management - The company’s total assets were CNY 1.76 billion, with total liabilities of CNY 360.68 million as of December 31, 2018[41]. - The company’s total liabilities decreased by 12.16% to 123,275,505.26, primarily due to reduced accounts payable[54]. - The company’s deferred tax assets increased by 216.72% to 22,941,995.82, indicating a rise in recognized deferred tax assets[54]. - The company reported accounts receivable and notes receivable combined at ¥227,742,402.67, with accounts receivable previously at ¥221,807,943.67 and notes receivable at ¥5,934,459.00[83]. - The total accounts payable and notes payable combined reached ¥180,664,783.90, with accounts payable at ¥165,164,783.90 and notes payable at ¥15,500,000.00[83].