厦工股份(600815) - 2018 Q4 - 年度财报

Company Profile and Key Financial Indicators Company Information and Contact Details Xiamen XGMA Machinery Co., Ltd. is a construction machinery manufacturer listed on the Shanghai Stock Exchange under stock code 600815 - Key company information includes its Chinese name "Xiamen XGMA Machinery Co., Ltd.", stock abbreviation "XGMA", stock code "600815", and legal representative Zhang Zhenbin[12][17] Key Accounting Data and Financial Indicators for the Past Three Years In 2018, the company's operating performance severely declined, with revenue down 36.21% and net profit attributable to parent company shareholders turning into a significant loss of 731.19 million Yuan, resulting in negative net assets at year-end Key Accounting Data for the Past Three Years | Major Accounting Data | 2018 | 2017 | YoY Change (%) | 2016 | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue (Yuan) | 2,837,897,217.00 | 4,448,565,471.91 | -36.21% | 3,241,039,805.84 | | Net Profit Attributable to Parent Company Shareholders (Yuan) | -731,193,504.53 | 124,632,272.96 | -686.68% | -2,689,882,940.78 | | Net Profit Attributable to Parent Company Shareholders (Excluding Non-recurring Items, Yuan) | -844,749,736.12 | -348,857,037.71 | N/A | -2,718,890,958.09 | | Net Cash Flow from Operating Activities (Yuan) | 477,550,347.19 | 545,576,288.64 | -12.47% | 146,378,462.87 | | Net Assets Attributable to Parent Company Shareholders (Yuan) | -185,411,457.33 | 546,391,832.92 | -133.93% | 385,019,930.82 | | Total Assets (Yuan) | 5,102,113,676.80 | 6,417,192,816.15 | -20.49% | 7,663,001,235.87 | Key Financial Indicators for the Past Three Years | Major Financial Indicators | 2018 | 2017 | YoY Change (%) | 2016 | | :--- | :--- | :--- | :--- | :--- | | Basic EPS (Yuan/share) | -0.76 | 0.13 | N/A | -2.80 | | Basic EPS (Excluding Non-recurring Items, Yuan/share) | -0.88 | -0.36 | N/A | -2.84 | | Weighted Average ROE (%) | -405.12 | 26.76 | N/A | -155.45 | | Weighted Average ROE (Excluding Non-recurring Items, %) | -468.03 | -74.91 | N/A | -157.12 | Key Quarterly Financial Data for 2018 | Item | Q1 | Q2 | Q3 | Q4 | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue (Million Yuan) | 951 | 761 | 555 | 571 | | Net Profit Attributable to Parent Company Shareholders (Million Yuan) | 15 | -68 | -53 | -625 | Company Business Overview Main Business, Operating Model, and Industry Overview The company is a key national construction machinery enterprise, offering a full range of products. The highly cyclical industry, closely linked to the macro economy, maintained strong growth in 2018 due to infrastructure investment and environmental upgrades - The company's main business products cover a series of construction machinery including loaders, excavators, forklifts, road machinery, tunneling machinery, and environmental machinery, widely used in construction, mining, agriculture, forestry, and water conservancy[32] - The construction machinery industry is closely related to the domestic and international macro economy, belonging to a highly cyclical industry. In 2018, driven by national policies such as increased infrastructure investment, the Belt and Road Initiative, supply-side reform, and environmental upgrades, the industry continued to maintain a strong growth momentum[33] Core Competitiveness Analysis The company's core competitiveness includes a rich product series, R&D advantages, a comprehensive marketing network, and the established "XGMA" brand, with progress in intelligent machinery - The company's core competencies include: - Extensive Product Portfolio: Offering over a dozen series of complete machines, including loaders and excavators - Technological R&D Advantage: Operating a national-level technology center and collaborating with universities and research institutes, achieving breakthroughs in intelligent electro-hydraulic control systems - Comprehensive Marketing Network: Boasting over 150 dealers and nearly 200 sales and service outlets globally - Brand Advantage: The "XGMA" brand, with over 60 years of history, has been recognized as a "China Well-known Trademark"[35][36][37] Management Discussion and Analysis Operating Performance Review Despite a booming industry, the company's 2018 sales of 7,448 units decreased by 6.30%, leading to a 36.22% revenue decline to 2.837 billion Yuan and a significant net loss of 731 million Yuan attributable to parent company shareholders - Despite high industry prosperity, with loader sales up 22.02% and excavator sales up 44.99% in 2018, the company's sales of various construction machinery products decreased by 6.30% to 7,448 units, underperforming the industry[39] - During the year, the company implemented several internal reforms, including product line integration, marketing channel restructuring, enhanced risk control, improved quality systems, optimized inventory management, accelerated informatization, and organizational structure optimization[40][41][42][43] Key Operating Data for 2018 | Indicator | 2018 | YoY Change | | :--- | :--- | :--- | | Operating Revenue (Billion Yuan) | 2.837 | -36.22% | | Total Profit (Billion Yuan) | -0.682 | - | | Net Profit Attributable to Parent Company Shareholders (Billion Yuan) | -0.731 | - | | Net Accounts Receivable (Billion Yuan) | 1.750 | -19.14% | | Net Inventory (Billion Yuan) | 1.318 | +2.10% | | Gross Margin (%) | 11.77 | Increased by approx. 1 percentage point | Main Business Analysis In 2018, main business revenue and costs significantly declined, with earthmoving machinery revenue down 3.81% and tunneling machinery revenue nearly halved. Domestic market revenue fell 38.64%, while income tax expense surged 398.64% due to deferred tax asset write-offs, contributing to the large loss. R&D investment was 1.79% of revenue Key Income Statement and Cash Flow Statement Item Changes | Item | Current Period Amount (Billion Yuan) | Prior Period Amount (Billion Yuan) | Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 2.838 | 4.449 | -36.21 | | Operating Cost | 2.504 | 3.971 | -36.94 | | Asset Impairment Loss | 0.128 | -0.041 | -414.47 | | Investment Income | 0.0000378 | 0.129 | -99.97 | | Net Cash Flow from Operating Activities | 0.478 | 0.546 | -12.47 | | Net Cash Flow from Investing Activities | 0.041 | 0.984 | -95.83 | Main Business by Product | By Product | Operating Revenue (Billion Yuan) | Operating Cost (Billion Yuan) | Gross Margin (%) | YoY Change in Operating Revenue (%) | | :--- | :--- | :--- | :--- | :--- | | Earthmoving Machinery | 1.162 | 1.013 | 12.77 | -3.81 | | Tunneling Machinery | 0.400 | 0.289 | 27.87 | -49.98 | | Other Construction Machinery | 0.303 | 0.278 | 8.24 | -16.58 | | Parts | 0.150 | 0.134 | 10.83 | -6.89 | | Materials and Others | 0.749 | 0.735 | 1.80 | -57.74 | R&D Investment Overview | Item | Amount | | :--- | :--- | | R&D Expenses Capitalized in Current Period (Yuan) | 50,843,261.93 | | Total R&D Investment (Yuan) | 50,843,261.93 | | Total R&D Investment as % of Operating Revenue | 1.79% | | Number of R&D Personnel | 193 | | R&D Personnel as % of Total Employees | 12.33 | Assets and Liabilities Analysis As of year-end 2018, total assets were 5.102 billion Yuan, down 20.49%, with significant declines in notes receivable and deferred tax assets. Total liabilities reached 5.140 billion Yuan, exceeding 100% debt-to-asset ratio, and restricted assets totaled 302 million Yuan Changes in Key Assets and Liabilities | Item | Current Period End Balance (Million Yuan) | Prior Period End Balance (Million Yuan) | Change (%) | Main Reason | | :--- | :--- | :--- | :--- | :--- | | Notes Receivable | 61.94 | 263.12 | -76.46 | Increased bill discounting in current period | | Prepayments | 118.63 | 328.48 | -63.88 | Subsidiary settled prepayments from prior period | | Deferred Income Tax Assets | 89.28 | 562.15 | -84.12 | Parent company wrote off deferred income tax assets in current period | | Other Non-current Assets | 5.44 | 26.36 | -79.34 | Subsidiary recovered land transfer fees in current period | | Non-current Liabilities Due Within One Year | 0.00 | 5.00 | -100.00 | Repaid in current period | Key Restricted Assets at Period End | Item | Book Value at Period End (Yuan) | Reason for Restriction | | :--- | :--- | :--- | | Cash and Cash Equivalents - Other Cash and Bank Balances | 51,281,471.28 | Deposits, Employee Housing Reform Funds | | Fixed Assets - Buildings | 230,703,428.35 | Litigation Preservation Guarantee | | Intangible Assets - Land Use Rights | 17,762,079.73 | Litigation Preservation Guarantee | | Investment Properties - Buildings | 2,211,581.31 | Litigation Preservation Guarantee | | Total | 301,958,560.67 | / | Future Development and Risk Analysis The company expects slower growth in the construction machinery industry in 2019, focusing on intelligent and green upgrades and strategic transformation. Its 2019 plan aims to overcome challenges through reforms and quality improvements, while acknowledging risks like economic uncertainty, market competition, rising costs, debt management, and severe going concern issues - Company development strategy: Accelerate the upgrade of construction machinery business, focusing on core products like loaders and excavators, strengthening competitiveness in intelligent directions, and actively implementing strategic transformation to explore new growth points[76] - The core of the 2019 operating plan is "Facing Crisis, Breaking Through to Rebirth", with specific measures including: deepening reforms to energize the team, rebuilding channels to enhance marketing, reshaping classics to improve product quality, IT-led strengthening of digital foundations, leveraging the "Double Hundred Action" to initiate mixed-ownership reform, and strengthening risk control[77][79][80][81][82] - The main risks faced by the company include: - Uncertainty in the external economic environment - Market risk: Intense competition and significant impact of lawsuits on the marketing system - Cost risk: Rising raw material and labor costs, and exchange rate fluctuations - Receivables management risk: Large total accounts receivable and high collection difficulty - Going concern risk: Current liabilities exceeding current assets, severe capital shortage, facing reorganization application, and risk of reorganization failure[84][85][86][87] Significant Matters Profit Distribution and Commitments Due to negative undistributed profits in 2018, the board proposed no profit distribution or capital reserve capitalization. The controlling shareholder committed to avoiding horizontal competition and minimizing related-party transactions - Given the company's negative undistributed profits for 2018, no profit distribution or capital reserve capitalization will be carried out for the year[5][90] - Controlling shareholder Xiamen Haiyi Group Co., Ltd. committed to avoiding horizontal competition with the listed company and ensuring the fairness and impartiality of related-party transactions[94] Non-Standard Audit Opinion Explanation and Bankruptcy Reorganization The auditor issued a modified unqualified opinion with an emphasis of matter on going concern uncertainty due to continuous losses, negative net assets, high debt, and a creditor's reorganization application. The board has implemented measures to maintain operations - The audit opinion type is an "unqualified opinion with an emphasis of matter paragraph"[198] - The emphasis of matter paragraph explicitly states significant uncertainty regarding the company's going concern ability due to: continuous losses in net profit (excluding non-recurring items), year-end current liabilities exceeding current assets by 757 million Yuan, negative owners' equity attributable to parent company of 185 million Yuan, a debt-to-asset ratio of 100.74%, and a creditor's application for company reorganization[200] - On April 2, 2019, creditor Xiamen Yuming Machinery Co., Ltd. applied to the court for the company's reorganization due to its inability to repay due debts. Whether this application will be accepted and if the company will enter reorganization remains highly uncertain[102] Significant Litigation and Arbitration Matters The company faced multiple significant sales contract lawsuits with dealers, suing to recover billions in receivables. Most cases are in enforcement or trial stages, highlighting severe collection issues Partial Significant Litigation Cases (Sales Contract Disputes) | Defendant (Partial) | Principal Amount Sued (Million Yuan) | Case Progress | Year-end Receivables Balance (Million Yuan) | | :--- | :--- | :--- | :--- | | Inner Mongolia XGMA Machinery Co., Ltd. | 245 | Under Enforcement | 225 | | Changchun XGMA Shunda Machinery Co., Ltd. et al. | 261 | First Instance Judgment | 240 | | Sichuan Jieli Machinery Equipment Co., Ltd. et al. | 439 | Mediation | 363 | | Xinjiang XGMA Machinery Sales Co., Ltd. | 155 | Under Enforcement | 133 | | Hefei Runtong Construction Machinery Co., Ltd. | 148 | Under First Instance Review | 131 | | Hubei Runda Construction Machinery Co., Ltd. | 146 | Under First Instance Review | 135 | Significant Related-Party Transactions The company had frequent related-party transactions with Haiyi Group, including 141 million Yuan in purchases from Xiamen XGMA Bridge Box Co., Ltd. and significant deposit/loan activities with Xiamen Haiyi Group Finance Co., Ltd., with a year-end loan balance of 240 million Yuan Key Related-Party Purchases and Sales (2018) | Related Party | Transaction Content | Amount (Yuan) | | :--- | :--- | :--- | | Xiamen XGMA Bridge Box Co., Ltd. | Purchase of Goods | 140,566,418.75 | | Xiamen Yinhua Machinery Co., Ltd. | Purchase of Goods | 31,335,712.96 | | Xiamen Haiyi Logistics Co., Ltd. | Acceptance of Services | 11,163,042.93 | | Xiamen King Long Automobile Logistics Co., Ltd. | Acceptance of Services | 10,709,367.87 | Related-Party Deposit and Loan Business (Year-end 2018) | Related Party | Item | Balance/Amount (Yuan) | | :--- | :--- | :--- | | Xiamen Haiyi Group Finance Co., Ltd. | Deposit Balance | 242,156,564.49 | | Xiamen Haiyi Group Finance Co., Ltd. | Interest Income for Current Period | 3,912,929.81 | | Xiamen Haiyi Group Finance Co., Ltd. | Loan Balance | 240,000,000.00 | | Xiamen Haiyi Group Finance Co., Ltd. | Interest Expense for Current Period | 14,229,909.28 | Share Changes and Shareholder Information Shareholders and Actual Controller Information The company's share capital structure remained unchanged, with 43,869 shareholders at year-end 2018. Xiamen Haiyi Group Co., Ltd. is the controlling shareholder (40.98%), and Xiamen Municipal People's Government State-owned Assets Supervision and Administration Commission is the actual controller Top Two Shareholders' Shareholding | Shareholder Name | Shares Held at Period End | Percentage (%) | Nature | | :--- | :--- | :--- | :--- | | Xiamen Haiyi Group Co., Ltd. | 393,022,859 | 40.98 | State-owned Legal Person | | Xiamen XGMA Heavy Industry Co., Ltd. | 69,993,067 | 7.30 | State-owned Legal Person | - The company's controlling shareholder is Xiamen Haiyi Group Co., Ltd., and the actual controller is the Xiamen Municipal People's Government State-owned Assets Supervision and Administration Commission[160][161][162] Directors, Supervisors, Senior Management, and Employees Changes in Shareholdings and Remuneration of Directors, Supervisors, and Senior Management Shareholdings of directors, supervisors, and senior management remained unchanged. Several executives received related-party remuneration. Key positions like Chairman and Board Secretary saw changes, including the former Chairman's retirement - During the reporting period, the shareholdings of the company's directors, supervisors, and senior management remained stable, with no increases or decreases. The total pre-tax remuneration received from the company was 2.5296 million Yuan[167][169] - The company experienced several senior management changes during the reporting period, including the election of Zhang Zhenbin as the new Chairman, the appointment of Chen Tiansheng as President, and Wang Guangwu as Board Secretary[175] Employee Information As of year-end, the company had 2,453 employees, with production personnel (1,169) and those with junior college education or below (1,602) forming the largest groups. Compensation is performance-based, supported by a dual-channel career development system Employee Professional Composition and Educational Background | Category | Number of Employees | | :--- | :--- | | Professional Composition | | | Production Personnel | 1,169 | | Sales Personnel | 220 | | Technical Personnel | 193 | | Total | 2,453 | | Educational Background | | | Postgraduate | 58 | | Undergraduate | 448 | | Junior College | 345 | | Below Junior College | 1,602 | | Total | 2,453 | Corporate Governance Corporate Governance Overview The company operated strictly under relevant laws, continuously improving its governance structure. All four Board committees performed their duties, and the Board of Supervisors had no objections. An internal control self-assessment report was also disclosed - The company strictly adheres to relevant laws and regulations, improving its corporate governance structure to ensure timely, accurate, and fair information disclosure[182] - The Board's Audit Committee, Nomination Committee, and Remuneration and Assessment Committee all held meetings during the reporting period to review matters such as financial report audits, senior management appointments, and remuneration[187][188][189] - The company has disclosed its "2018 Internal Control Evaluation Report" and diligently managed investor relations[191][194] Financial Report Audit Report The auditor issued a "modified unqualified opinion with an emphasis of matter" on the 2018 financial report, highlighting significant going concern uncertainty due to continuous losses, negative net assets, and a reorganization application. Accounts receivable impairment was a key audit matter - The audit opinion type is an "unqualified opinion with an emphasis of matter paragraph"[198] - The emphasis of matter paragraph explicitly states significant uncertainty regarding the company's going concern ability due to: continuous losses in net profit (excluding non-recurring items), year-end current liabilities exceeding current assets by 757 million Yuan, negative owners' equity attributable to parent company of 185 million Yuan, a debt-to-asset ratio of 100.74%, and a creditor's application for company reorganization[200] - A key audit matter is "allowance for doubtful accounts on accounts receivable". The auditor considers this matter material, and its determination involves significant management accounting estimates and judgments[201] Key Financial Statements Financial statements show severe deterioration: year-end 2018 consolidated balance sheet reported total assets of 5.102 billion Yuan and total liabilities of 5.140 billion Yuan, resulting in negative owners' equity. The consolidated income statement showed 2.838 billion Yuan in revenue and a net loss of 682.33 million Yuan Consolidated Balance Sheet Summary (December 31, 2018) | Item | Balance at Period End (Yuan) | | :--- | :--- | | Total Assets | 5,102,113,676.80 | | Total Current Assets | 3,889,195,028.75 | | Total Non-current Assets | 1,212,918,648.05 | | Total Liabilities | 5,139,850,679.94 | | Total Current Liabilities | 4,645,795,893.68 | | Total Non-current Liabilities | 494,054,786.26 | | Total Owners' Equity | -37,737,003.14 | | Owners' Equity Attributable to Parent Company | -185,411,457.33 | Consolidated Income Statement Summary (2018) | Item | Current Period Amount (Yuan) | | :--- | :--- | | Total Operating Revenue | 2,837,897,217.00 | | Total Operating Cost | 3,088,834,267.34 | | Operating Profit | -204,580,355.27 | | Total Profit | -183,898,855.82 | | Net Profit | -682,326,753.08 | | Net Profit Attributable to Parent Company Shareholders | -731,193,504.53 |