SHENGDA BIO-PHARM(SH:603079)2019-03-18 16:00Financial Performance - In 2018, the company achieved a net profit of CNY 51,682,463.67, with a proposed cash dividend of CNY 1.20 per 10 shares[6]. - The total distributable profit for shareholders in 2018 was CNY 196,267,075.20 after accounting for legal surplus reserves and previous distributions[6]. - The company plans to allocate 10% of the net profit to statutory surplus reserves, amounting to CNY 5,168,246.37[6]. - The company's operating revenue for 2018 was approximately ¥492.71 million, a decrease of 3.12% compared to ¥508.56 million in 2017[23]. - The net profit attributable to shareholders was approximately ¥44.54 million, down 38.65% from ¥72.61 million in the previous year[23]. - The basic earnings per share decreased by 48.72% to ¥0.40 from ¥0.78 in 2017[25]. - The total assets increased by 27.05% to approximately ¥1.25 billion, primarily due to the acquisition of Tongliao Huanghe Long[25]. - The net cash flow from operating activities was approximately ¥88.69 million, a decrease of 6.97% from ¥95.33 million in 2017[24]. - The company reported a total output of 1,036.86 tons across all products, with a total sales volume of 1,006.88 tons[117]. - The company's total revenue for the reporting period was CNY 492,325,092.47, representing a year-on-year increase of 33.53%[120]. Market Position and Strategy - The company has a leading global market position, being the largest supplier of biotin with approximately 30% market share globally[51]. - The company plans to enhance its leading position in the biotin market through the successful implementation of a project to produce 200 tons of biotin intermediates annually[130]. - The company aims to enhance its market share in the vitamin and biopreservation sectors by focusing on environmentally friendly production methods and expanding its customer relationships[133]. - The company is focusing on becoming a comprehensive solution provider in the biopreservation sector by collaborating with universities and research institutions[133]. - The company plans to develop new products such as "clean label" series and natural preservatives to meet market demands for safety and natural ingredients[136]. Research and Development - The company is investing RMB 200 million in research and development for new technologies in feed additives and bio-preservatives[22]. - The total R&D expenditure was ¥21.39 million, accounting for 4.34% of total revenue, with 125 R&D personnel[76]. - The company has completed seven patent applications, with five patents granted, enhancing its research and development capabilities[59]. - The company has established long-term cooperative research relationships with universities and research institutions, enhancing its R&D capabilities[51]. - The company has ongoing research projects focused on the development of new technologies for biotin and folic acid, currently in pilot testing stages[91]. Risk Management - Major risks faced by the company include policy risk, market risk, operational risk, and price fluctuation risk[8]. - The company emphasizes the importance of investor risk awareness regarding forward-looking statements in the report[7]. - The company anticipates continued price pressure on biotin due to a competitive market and environmental factors affecting supply[110]. - The company aims to mitigate price volatility risks by increasing environmental investments and expanding production capacity[139]. Dividend Policy - The company plans to distribute cash dividends of 1.20 RMB per 10 shares for the year 2018, which is 20% of the distributable profit, subject to shareholder approval[147]. - The cash dividend distribution policy states that in the absence of major capital expenditures, at least 80% of profits should be distributed as cash dividends during mature stages of development[144]. - The company has a three-year shareholder return plan (2018-2020) that prioritizes cash dividends, with a minimum of 20% of distributable profits allocated for dividends in certain conditions[143]. - The company’s asset-liability ratio exceeded 70% in the reporting year, which may affect future dividend distributions[143]. Acquisitions and Investments - The company completed the acquisition of Tongliao Shengda Bioengineering Co., Ltd., holding a 75% stake, which was renamed in December 2018[12]. - The company acquired 61.67% of Tongliao Huanghe Long Biological Engineering Co., Ltd. for cash and increased its capital by 80 million RMB, resulting in a 75% ownership stake[50]. - The company invested CNY 121,124,958.02 in equity investments during the reporting period, including CNY 98,287,600.00 for acquiring a controlling stake in Tongliao Huanghelong[124]. Production and Capacity - The company achieved a production capacity utilization rate close to 100% for lactic acid bacteria, with a production increase of 35.81% year-on-year[59]. - The company’s lactic acid bacteria production capacity is 500 tons/year, with a utilization rate of 99.60%[100]. - The company has a designed capacity of 160 tons/year for biotin, with a utilization rate of 54.80%[100]. - The company reported a production capacity increase of 60 tons/year for biotin due to the successful commissioning of a new project[101]. Customer Relations and Sales - The sales strategy is customer-centric, providing personalized services to meet customer needs and strengthen strategic partnerships with key clients[38]. - The company reported that sales to its top five customers accounted for 38.33%, 40.50%, 37.48%, and 32.03% of total revenue in 2015, 2016, 2017, and 2018 respectively, indicating a high customer concentration risk[140]. - The company maintains strategic agreements for raw material procurement, with significant quantities such as 1,707.15 tons of sugar and 1,299.00 tons of glucose[103]. Sustainability and Compliance - The management emphasized a focus on sustainability and innovation as key drivers for future growth[22]. - The company has implemented a three-in-one management system focusing on environmental protection, safety, and quality, which has improved product quality[58]. - The company operates in the food manufacturing industry, specifically in the production of food and feed additives, aligning with national policies promoting green and safe production[84].