Jiangnan Water(SH:601199)2020-08-26 16:00Financial Performance - The company's operating revenue for the first half of 2020 was CNY 395.25 million, a decrease of 13.45% compared to CNY 456.68 million in the same period last year[20]. - Net profit attributable to shareholders for the first half of 2020 was CNY 91.54 million, down 19.69% from CNY 113.99 million year-on-year[20]. - The basic earnings per share decreased by 16.67% to CNY 0.10 from CNY 0.12 in the previous year[20]. - The net cash flow from operating activities was CNY 173.66 million, a decline of 24.51% compared to CNY 230.05 million in the same period last year[20]. - The net profit after deducting non-recurring gains and losses was CNY 81.72 million, a decrease of 25.52% compared to CNY 109.72 million in the same period last year[20]. - The company reported a total revenue of 395,250.40 million yuan, a decline of 13.45% year-on-year[46]. - Net profit for the period was 8,858.87 million yuan, down 23.28% compared to the previous year[46]. - The company completed a water supply volume of 11,951.05 million cubic meters, achieving 45.97% of the annual plan, a decrease of 5.99% compared to the previous year[45]. - The company reported a total comprehensive income for the first half of 2020 of approximately ¥47.24 million, down from ¥56.94 million in the same period of 2019[138]. Assets and Liabilities - Total assets decreased by 10.95% to CNY 4.32 billion from CNY 4.86 billion at the end of the previous year[21]. - The company's cash and cash equivalents decreased by 35.38% to CNY 829.42 million due to the exclusion of a subsidiary from consolidation and new long-term investments[21]. - Trade receivables dropped by 73.79% to CNY 37.97 million, attributed to the implementation of new revenue recognition standards[21]. - Total liabilities decreased to ¥1,400,090,798.09 from ¥1,890,330,176.90, a reduction of 26%[127]. - Total equity attributable to shareholders increased slightly to ¥2,924,643,039.20 from ¥2,909,508,004.13, reflecting a growth of 0.5%[127]. Investments and Equity - Long-term equity investments rose by 77.98% to CNY 367,614,169.11 due to a change in accounting method and new investments[22]. - The company made a significant equity investment of CNY 100 million in Jiangyin Beikong Yucheng Environmental Industry Investment Partnership in May 2020[60]. - The company's equity investments increased by CNY 161.07 million, a growth of 77.78% compared to the end of the previous year, primarily due to a CNY 100 million investment in Jiangyin Beikong Yucheng Environmental Industry Investment Partnership[59]. Operational Highlights - The company operates under a 30-year exclusive water supply franchise agreement with the Jiangyin municipal government[29]. - The company has a daily sewage treatment capacity of 35,000 tons at its subsidiaries, handling industrial and domestic wastewater[32]. - The company has been recognized as a "5A-level enterprise" in water supply services by the China Water Supply Service Promotion Alliance[37]. - The company focuses on urban sewage treatment improvements, with policies promoting quality enhancement and efficiency in wastewater management[35]. - The company completed sewage treatment of 310.62 million cubic meters, a decrease of 6.4% from the previous year[46]. Research and Development - Research and development expenses increased by 52.69% to CNY 1,108,574.67 as the company further developed project research[22]. - The company has developed 8 utility model patents and 14 software copyrights, enhancing its intellectual property advantages[48]. - The company has initiated a three-year implementation plan for the "Smart Water 2.0" project to enhance information technology in the water industry[40]. Financial Risks and Strategies - The company is facing operational risks due to increased costs from energy conservation, structural adjustments, and rising electricity prices, impacting water supply business growth[74]. - Financial risks are considered low, but the company anticipates increased funding needs due to project expansions and market outreach[75]. - The company plans to enhance internal controls and implement a "smart water" project to improve operational efficiency and reduce costs[74]. Compliance and Governance - The company has not proposed any profit distribution or capital reserve increase for the first half of 2020, with no dividends or stock bonuses planned[80]. - The company appointed Gongzheng Tianye Accounting Firm as the auditor for the 2020 financial statements on May 15, 2020[83]. - There are significant litigation matters reported, including a case involving Jiangyin Municipal Engineering Company with a claim amount of RMB 9,049,419.09[84]. Market Position and Future Plans - The company aims to expand its market reach and extend its industrial chain by entering the wastewater sector, creating an integrated water supply and drainage service[75]. - The company plans to issue asset-backed securities with a scale of up to 800 million yuan to support its operational development[47]. - The company has identified potential acquisition targets to further strengthen its market position[154]. Accounting Policies - The company adheres to the accounting standards, ensuring that financial statements accurately reflect its financial position, operating results, changes in equity, and cash flows[175]. - The company recognizes the income, expenses, and cash flows of newly acquired subsidiaries from the acquisition date to the reporting date[182]. - The company applies specific accounting policies for asset and liability measurement during mergers, including goodwill recognition for non-same control mergers[179].