JHM(SH:603078)2019-03-19 16:00Financial Performance - In 2018, the company achieved a net profit of ¥41,836,042.05, with a distributable profit of ¥37,652,437.84 after statutory surplus reserve allocation[5]. - The total distributable profit available to shareholders as of December 31, 2018, was ¥305,583,629.34, after deducting cash dividends of ¥18,000,000.00 paid during the year[5]. - The company proposed a cash dividend of ¥1.50 per 10 shares, totaling ¥12,600,000.00, and a capital reserve conversion of 3 shares for every 10 shares, increasing the total share capital to 109,200,000 shares[5]. - The company's operating revenue for 2018 was ¥383.68 million, an increase of 8.30% compared to ¥354.28 million in 2017[20]. - The net profit attributable to shareholders decreased by 25.62% to ¥39.92 million from ¥53.68 million in 2017[20]. - The basic earnings per share for 2018 was ¥0.4753, down 30.27% from ¥0.6816 in 2017[21]. - The weighted average return on equity decreased to 5.29% from 9.09% in 2017, a reduction of 3.8 percentage points[21]. - The gross profit margin decreased to 30.59%, down by 4.55 percentage points year-on-year[52]. - Net profit attributable to shareholders was 39.92 million yuan, a decline of 25.62% from the previous year[56]. Cash Flow and Assets - The net cash flow from operating activities increased by 100.54% to ¥72.88 million from ¥36.34 million in 2017[20]. - Total assets at the end of 2018 were ¥1,008.81 million, a 14.32% increase from ¥882.45 million at the end of 2017[20]. - The company reported a significant increase in cash and cash equivalents, totaling 260,634,884.05 yuan, up 70.02% from the previous year[77]. - The inventory level rose to 29,402,173.96 yuan, reflecting a 48.75% increase year-on-year[77]. Operational Strategy - The company primarily engages in the R&D, production, and sales of ultra-pure reagents and related chemical products for microelectronics[28]. - The production model is based on "sales-driven production," aligning procurement and manufacturing with customer orders[29]. - The company has implemented a strict supplier selection process to ensure the quality and price of raw materials, maintaining a stable procurement pricing model that is generally determined monthly[30]. - The sales strategy focuses on direct sales to end customers in the downstream electronics industry, emphasizing high-quality standards and long-term partnerships[32]. - The company aims to become a comprehensive supplier by providing integrated solutions tailored to customer production processes and technical requirements[33]. Research and Development - The company has established a stable cooperative relationship with Nanjing University for joint research and development[42]. - The company holds 61 patents, including 22 invention patents and 38 utility model patents[42]. - Research and development expenses rose by 22.93% to CNY 19.83 million, indicating a focus on product technology enhancement[58]. - The company aims to enhance its R&D capabilities by building a high-level engineering technology team and establishing a national-level technology center[125]. Market and Industry Trends - The wet electronic chemicals industry is characterized by rapid product updates and high functional value, driven by the fast-paced development of downstream industries such as new energy and information communication[36]. - The global consumption of electronic chemicals has maintained an annual growth rate of over 8% since the 1990s, with the market capacity expected to reach approximately 20.8 billion yuan in 2015, growing at a rate of 7% to 8% in the coming years[37]. - Future development in the wet electronic chemicals sector is promising, supported by national strategic initiatives in new energy and advanced materials[38]. - The company is focusing on increasing the proportion of high-value-added wet electronic chemicals for the semiconductor and flat panel display industries[51]. Risk Management - The company has detailed potential industry and operational risks in the report, advising investors to review the relevant sections for more information[7]. - The company faces risks from raw material price fluctuations, which could impact production and operations[129]. - The company is exposed to competition risks as more firms may enter the wet electronic chemical market due to its growth potential[130]. Shareholder and Profit Distribution - The company maintains a cash dividend policy, distributing at least 20% of distributable profits as cash dividends if no major investment plans arise[134]. - The company emphasizes a stable profit distribution policy, prioritizing cash dividends, especially during mature development stages[135]. - The company actively engages with minority shareholders to gather their opinions on profit distribution matters[137]. - The company has not proposed a cash profit distribution plan for the last three years, which restricts it from issuing new shares or convertible bonds[138]. Corporate Governance and Compliance - The company is committed to ensuring the accuracy and completeness of the financial report, as stated by its management[4]. - The audit report issued by Lixin Certified Public Accountants confirmed the financial statements without reservations[4]. - The company has not faced any risks of suspension from listing during the reporting period[166]. - The company has pledged to adhere to the latest regulations from the China Securities Regulatory Commission regarding compensation measures and stock incentive plans[160].