Huading Nylon(SH:601113)2020-06-19 16:00Financial Performance - In 2018, the company achieved a net profit of RMB 234,221,575.49, with a total distributable profit of RMB 558,575,084.33 after accounting for statutory surplus reserves and previous year distributions [5]. - The company's operating revenue for 2018 reached ¥6,602,916,492.78, representing a 132.97% increase compared to ¥2,834,192,637.54 in 2017 [20]. - Net profit attributable to shareholders was ¥260,999,626.61, a significant increase of 178.58% from ¥93,688,826.30 in the previous year [20]. - The basic earnings per share for 2018 was ¥0.25, up 127.27% from ¥0.11 in 2017 [22]. - The company achieved a total operating revenue of CNY 6,602,916,492.78 in 2018, an increase of 132.97% compared to the previous year, while net profit rose by 165.27% to CNY 279,333,391.85 [57]. - The company reported a significant increase in sales expenses, totaling CNY 998,132,302.56, which is a rise of 1,849.32% year-on-year [68]. - The company reported a net profit increase of 56.28% year-on-year, reaching CNY 659.71 million [92]. Dividend and Share Capital - The board proposed a cash dividend of RMB 0.7 per 10 shares, totaling RMB 81,315,156.93 for the year, with no bonus shares or capital reserve conversion planned [5]. - The company’s total share capital is 1,161,645,099 shares, which serves as the basis for the dividend distribution [5]. Acquisition and Business Expansion - The company completed the acquisition of cross-border e-commerce "Tongtuo Technology" in 2018, initiating a dual-main business model [22]. - The company has expanded its business through the acquisition of Shenzhen Tongtuo Technology Co., Ltd., a cross-border e-commerce firm, enhancing its global sales capabilities [35]. - The company completed the acquisition of 100% equity in Shenzhen Tongtuo Technology Co., Ltd. on April 3, 2018, enhancing its position in the e-commerce sector [53]. - The company entered a dual-main business model after acquiring Tongtuo Technology, significantly boosting sales revenue and overall profitability [70]. Assets and Liabilities - The total assets at the end of 2018 amounted to ¥9,645,697,001.43, a 100.36% increase from ¥4,814,089,113.98 at the end of 2017 [20]. - As of December 31, 2018, the company's total assets reached CNY 9,645,697,001.43, with equity attributable to the parent company at CNY 5,706,057,100.30, and a debt-to-asset ratio of 39.76% [57]. - The company reported goodwill of ¥1,617,425,804.03, a substantial increase of 5,346.77% from ¥29,695,155.61, primarily due to the acquisition of Tongtuo Technology [87]. - Total liabilities amounted to ¥3,835,497,790.41, a slight decrease of 0.27% from ¥1,924,739,803.60 [89]. Cash Flow and Working Capital - The net cash flow from operating activities for 2018 was ¥323,467,462.64, reflecting a 73.93% increase compared to ¥185,980,590.53 in 2017 [20]. - The company's cash and cash equivalents at the end of the period were ¥1,473,622,131.95, a 19.1% increase from the previous period [86]. - The company's operating working capital balance was CNY 1.36 billion, with a need to maintain at least 20% as a safety reserve, equating to CNY 272 million [99]. Inventory and Procurement - The company utilizes a small-batch, high-frequency procurement model to optimize inventory turnover and reduce capital occupation [37]. - The average inventory for nylon civil silk manufacturers was about 17 days in 2018, indicating stable inventory levels [145]. - The accounts payable increased to ¥1,629,888,064.18, up 67.45% from ¥973,373,994.52, driven by higher domestic material procurement [88]. Research and Development - Total R&D investment amounted to ¥109,039,472.97, representing 1.65% of total operating revenue [83]. - The company has established a provincial-level technology center for nylon filament, leading to the development of multiple industry standards [49]. - The company’s R&D team has improved product competitiveness and profitability, focusing on cost control and quality enhancement [166]. Market and Sales Strategy - The company aims to capitalize on the growing potential of emerging markets in Southeast Asia, India, the Middle East, and South America for future expansion [45]. - The company’s sales strategy includes leveraging multiple third-party e-commerce platforms and its own platform to reach overseas consumers [39]. - The company enhanced its brand presence by developing its own brands like KOOGEEK and DODOCOOL, aiming for top rankings in various e-commerce channels [64]. Economic Environment and Industry Trends - The overall economic environment remains challenging, but the nylon industry has shown good growth, with high operating rates in 2018 [52]. - The cross-border e-commerce transaction scale is expected to reach 2.16 trillion yuan in 2020, with an annual growth rate of approximately 34% [46]. - The cross-border e-commerce industry is supported by China's strong manufacturing base, which provides a rich supply chain resource [44].