Apple Group(SH:603020)2019-04-03 16:00Financial Performance - The company's operating revenue for 2018 was approximately CNY 2.50 billion, representing a year-over-year increase of 7.52% compared to CNY 2.32 billion in 2017[22]. - The net profit attributable to shareholders for 2018 was CNY 110.16 million, a decrease of 23.59% from CNY 144.17 million in 2017[22]. - The basic earnings per share for 2018 was CNY 0.3442, down 23.59% from CNY 0.4505 in 2017[23]. - The company's total assets increased by 8.62% to CNY 2.40 billion at the end of 2018, compared to CNY 2.20 billion at the end of 2017[22]. - The net cash flow from operating activities for 2018 was negative CNY 36.56 million, compared to positive CNY 47.10 million in 2017[22]. - The weighted average return on equity for 2018 was 5.71%, a decrease of 2.03 percentage points from 7.74% in 2017[24]. - The company reported a total of CNY 3.10 million in non-recurring gains and losses for 2018, significantly lower than CNY 11.66 million in 2017[28]. - The gross profit margin decreased by 1.61 percentage points to 17.15% compared to the previous year[89]. - The gross profit margin for the flavor and fragrance segment decreased by 5.61 percentage points to 36.01%[65]. - The company's gross profit margin for the fragrance segment was 40.62%, which decreased by 3.18 percentage points year-on-year[89]. Dividend Policy - The company plans to distribute a cash dividend of RMB 1.10 per 10 shares, totaling RMB 35,200,000, based on a total share capital of 320,000,000 shares as of December 31, 2018[4]. - The company has implemented a cash dividend policy, distributing at least 20% of the annual distributable profits as cash dividends, with a minimum of 80% during mature phases without major capital expenditures[121]. - In 2018, the company distributed a cash dividend of 1.10 RMB per 10 shares, amounting to 35.2 million RMB, representing 31.95% of the net profit attributable to shareholders[122]. - The company committed to distributing cash dividends of no less than 20% of the annual distributable profits for the next three years[127]. Corporate Governance - The company has established a commitment to disclose any changes in shareholding by its directors and senior management during their tenure[125]. - The company has established a legal commitment to avoid any competition with its subsidiaries from the controlling shareholder and related enterprises[126]. - The company will ensure equal exercise of shareholder rights and obligations without seeking undue benefits from its controlling position[127]. - The company will take legal responsibility for any losses caused by violations of commitments made by the controlling shareholder[127]. - The company has outlined a plan for potential share repurchases and other recognized methods to stabilize its stock price[127]. - The company has established strict confidentiality measures to protect its core technologies, but faces risks related to the potential leakage of proprietary formulas[112]. - The company has implemented a series of governance rules to ensure compliance and effective operation of the board, supervisory board, and shareholders' meetings[197]. - The board of directors consists of 9 members, including 3 independent directors, complying with legal and regulatory requirements[198]. - The company held 5 board meetings during the reporting period, all in accordance with relevant regulations[199]. Risk Management - The report includes a detailed description of the risks faced by the company, which investors should pay attention to[7]. - The company emphasizes the importance of investment risk awareness regarding forward-looking statements in the report[5]. - The company faces risks related to food safety and quality, which could impact sales if significant issues arise in the industry[106]. - The company is exposed to market competition risks due to the increasing presence of international companies in the domestic flavor and fragrance market[108]. - The company has taken measures to mitigate risks from raw material price fluctuations, but remains vulnerable to changes in macroeconomic conditions and supply-demand dynamics[116]. - The company has a high supplier concentration risk, with over 60% of food ingredient costs attributed to the largest supplier, primarily involving dairy products[114]. - The company has a comprehensive safety management system in place, but acknowledges the possibility of safety incidents due to equipment or operational failures[117]. Research and Development - The company continues to focus on research and development in fragrance and food ingredient technologies, which are central to its competitive advantage[32]. - Research and development expenses rose by 22.01% to CNY 29,629,313.94, accounting for 1.19% of total operating revenue[73]. - The company has established a comprehensive training program for technical talent, including annual recruitment from colleges and specialized training for different levels of staff[194]. - The company has developed a high-quality technical team, but faces risks related to potential loss of key technical personnel, which could hinder innovation and business development[113]. - The company emphasizes the importance of continuous technological advancement to maintain its competitive edge in the flavor and fragrance industry[111]. Market Position and Strategy - The company maintains a business model focused on "sales-driven production" for its fragrance and food ingredient segments, ensuring alignment with customer demand[32]. - The company has established strategic partnerships with globally recognized enterprises for sourcing products and raw materials, enhancing its supply chain resilience[41]. - The company has a strong competitive advantage in the food flavoring and ingredient manufacturing sector, supported by a professional sales team of over 100 personnel[50]. - The company has established a significant presence in the domestic market, with 9.74% of total assets being overseas assets amounting to approximately 233 million RMB[47]. - The company aims to enhance market share by localizing production and replacing imported raw materials, focusing on business expansion in niche markets[103]. - The product structure of flavors and fragrances is being optimized, with fragrance products growing faster than flavor products[101]. - International flavor and fragrance companies are increasing investments in China, establishing world-class R&D centers and production facilities, intensifying competition in the domestic market[100]. Environmental Management - The company has achieved ISO14001:2015 certification for environmental management, but stricter future environmental regulations may impact operations[109]. - The company has a wastewater treatment capacity of 300 tons per day and employs a sludge dewatering system[154]. - The company achieved over 99.9% organic matter removal rate through its low-temperature plasma waste gas treatment system[154]. - The company reported a total COD emission of 5.58 tons, with a discharge concentration of 100 mg/l, well below the standard of 500 mg/l[152]. - Ammonia nitrogen emissions were recorded at 0.39 tons, with a discharge concentration of 7 mg/l, significantly lower than the 45 mg/l standard[152]. - The company effectively managed smoke emissions at 53.46 kg, with a concentration of 1.9 mg/m3, under the 20 mg/m3 limit[152]. - Nitrogen oxides emissions totaled 754.55 kg, with a concentration of 134 mg/m3, below the 150 mg/m3 threshold[152]. - Sulfur dioxide emissions were 1,093.79 kg, with a concentration of 3 mg/m3, far below the 100 mg/m3 limit[152]. - The company has established an emergency response plan for environmental incidents, which was approved and registered with the local environmental authority[156]. Shareholder Information - The largest shareholder, Wei Zhonghao, holds 113,220,000 shares, representing 35.38% of the total shares[168]. - Shanghai Xinyu Investment Management Co., Ltd. is the second largest shareholder with 28,800,000 shares, accounting for 9.00%[168]. - The top three shareholders include Shanghai Yile Industrial Co., Ltd. with 13,320,000 shares, which is 4.16% of the total[169]. - The total number of shares held by the top ten unrestricted shareholders amounts to 166,402,060 shares[169]. - The company does not have any other shareholders holding more than 10% of the shares[175]. - The total remuneration for Wei Zhonghao during the reporting period was not disclosed, but he maintained his shareholding of 113,220,000 shares[180]. - The company has no strategic investors or general legal entities becoming top ten shareholders due to new share placements[170]. - There are no restrictions on share reductions applicable to the company[175]. Legal and Compliance - The company has retained the auditing firm for 11 years, with an audit fee of CNY 900,000 for the year[135]. - There were no major lawsuits or arbitration matters during the reporting period[136]. - The company maintained a good integrity status, with no significant debts or court judgments unmet during the reporting period[136]. - The company has not reported any significant changes in accounting policies or estimates during the reporting period[132]. - The company has not granted any stock incentives to its directors and senior management during the reporting period, indicating a focus on operational performance rather than equity compensation[186]. - The company received a warning from the China Securities Regulatory Commission regarding a short-term trading violation by a director, which was acknowledged as an operational error[189].