Huading Nylon(SH:601113)2022-06-22 16:00Financial Performance - The company reported a loss for the year 2019, with no cash dividends or stock bonuses proposed due to financial conditions [5]. - The company's operating revenue for 2019 was approximately ¥8.56 billion, representing a year-over-year increase of 29.71% compared to ¥6.60 billion in 2018 [24]. - The net profit attributable to shareholders of the listed company in 2019 was approximately -¥1.34 billion, a significant decrease of 613.87% from ¥260.99 million in 2018 [24]. - The basic earnings per share for 2019 was -¥1.17, a decline of 568.00% compared to ¥0.25 in 2018 [25]. - The weighted average return on equity for 2019 was -25.63%, a decrease of 30.94 percentage points from 5.31% in 2018 [25]. - The total assets at the end of 2019 were approximately ¥7.75 billion, down 19.66% from ¥9.65 billion at the end of 2018 [24]. - The net profit attributable to shareholders after deducting non-recurring gains and losses was approximately -¥698.44 million in 2019, a decrease of 611.37% from ¥136.58 million in 2018 [24]. - The company reported a net asset attributable to shareholders of approximately ¥4.42 billion at the end of 2019, a decrease of 22.45% from ¥5.71 billion at the end of 2018 [24]. - The total profit was -1.25 billion RMB, a year-on-year decrease of 447.22% [61]. - The company recorded a significant increase in sales expenses, which rose by 70.13% to 1,698,136,905.37 yuan, attributed to increased sales revenue [77]. Shareholder and Legal Issues - The controlling shareholder, Sanding Holdings, occupied funds totaling ¥590,500,009, which have not been returned as of the report date [7]. - The company faces a lawsuit from creditors demanding repayment of debts totaling ¥199,975,000 due to alleged illegal borrowing or guarantees [9]. - The company is under investigation by the China Securities Regulatory Commission for suspected violations of information disclosure laws, with ongoing inquiries [10]. - The company has been placed under additional risk warnings due to the controlling shareholder's fund occupation, affecting its stock status [10]. - The company emphasizes the importance of investors being aware of risks and encourages rational investment decisions [10]. Operational Insights - The company operates under a dual business model, focusing on both civil nylon filament and cross-border e-commerce [32]. - The company has not provided specific future performance guidance or outlook in the report, indicating potential uncertainties [6]. - The company has not disclosed any new product developments or technological advancements in the report [6]. - The report does not mention any market expansion or acquisition strategies for the upcoming year [6]. - The company has established a comprehensive ERP system for managing procurement activities, including inventory management and supplier management, ensuring efficient operations [43]. E-commerce and Market Strategy - The company’s cross-border e-commerce segment utilizes multiple platforms such as eBay and Amazon, employing a buyout self-operated model to sell quality Chinese products directly to overseas consumers [39]. - The company has over 550,000 SKUs across various categories, including 3C electronics and home outdoor products, supported by a deep collaborative ecosystem with thousands of quality suppliers [39]. - The company has established a "pan-channel" sales strategy, covering various product categories and utilizing platforms like eBay, Amazon, and AliExpress [49]. - The logistics system includes domestic warehouses in Shenzhen and Dongguan, as well as overseas warehouses in the US, France, the UK, and Germany, optimizing delivery solutions based on user orders [51]. - The company collaborates with over 100 logistics channels to enhance delivery efficiency and customer experience, employing a mix of third-party logistics and self-operated models [51]. Research and Development - Research and development expenses totaled 129,277,901.29 yuan, accounting for 1.51% of total revenue [78]. - The company has established a strong R&D team and has set industry standards for various nylon products, including 4 industry standards and 2 "Zhejiang Manufacturing" group standards [107]. - The company plans to invest CNY 64.5 million in establishing a big data subsidiary and partnership for the textile industry, with a 25% equity stake in the new company [123]. - The company is focusing on developing differentiated and functional fibers, aiming to enhance quality and innovation in the chemical fiber industry [106]. Supply Chain and Procurement - The company adopts a procurement model that includes annual contracts for domestic materials, with monthly procurement controlled within ±10% of the contract amount, mitigating raw material price fluctuation risks [34]. - The company’s procurement strategy focuses on maintaining supply-demand balance through small batch, high-frequency orders to optimize inventory turnover [43]. - The company’s procurement of raw materials, specifically nylon chips, was approximately 12.91 million tons, with raw material costs accounting for about 80% of total costs [115]. - The company has implemented measures to mitigate raw material price fluctuation risks, including long-term agreements with suppliers and domestic sourcing strategies [116]. Challenges and Market Conditions - The average operating rate for nylon civil silk in 2019 was 72.4%, down 7 percentage points from 80% in 2018, due to weak demand [94]. - The average inventory of nylon civil silk increased significantly to 24.6 days in 2019, compared to 17 days in the same period of 2018 [95]. - The average price of nylon civil silk in 2019 decreased compared to 2018, with prices fluctuating throughout the year [100]. - The overall capacity of the nylon 6 industry chain continues to expand, with a projected growth rate of 6.33% for nylon filament capacity in 2020, while consumption is expected to grow at 5.53% [188]. Future Outlook - The company plans to continue expanding its cross-border e-commerce business, leveraging major platforms for BtoC sales [76]. - The company aims to enhance brand reputation and customer satisfaction by implementing a quality-leading strategy [191]. - The company intends to develop differentiated and multifunctional new fiber products to increase market share and profitability [197]. - The company is committed to reducing raw material and product inventory to lower capital occupation and minimize price drop risks [200].