SHENGDA BIO-PHARM(SH:603079)2021-04-12 16:00Financial Performance - The company achieved a net profit of ¥185,934,043.74 for the year 2020, with a proposed cash dividend of ¥3.50 per 10 shares[5]. - The total distributable profit for shareholders amounted to ¥364,263,418.80 after accounting for legal reserves and previous undistributed profits[5]. - The company's operating revenue for 2020 was CNY 867,314,752.90, representing a 67.06% increase compared to CNY 519,149,812.48 in 2019[24]. - Net profit attributable to shareholders reached CNY 197,438,340.00, a significant increase of 319.81% from CNY 47,030,263.35 in the previous year[24]. - The net profit after deducting non-recurring gains and losses was CNY 209,677,853.43, up 435.31% from CNY 39,169,538.73 in 2019[24]. - Cash flow from operating activities amounted to CNY 333,201,875.02, an increase of 469.05% compared to CNY 58,553,623.65 in 2019[24]. - Total assets at the end of 2020 were CNY 1,700,868,888.94, a 10.98% increase from CNY 1,532,589,639.49 at the end of 2019[24]. - Net assets attributable to shareholders increased to CNY 1,304,637,334.49, reflecting a 47.61% growth from CNY 883,814,552.72 in 2019[24]. - Basic earnings per share increased by 290.00% to CNY 1.17 in 2020 compared to CNY 0.30 in 2019[25]. - Diluted earnings per share rose by 277.42% to CNY 1.17 in 2020 from CNY 0.31 in 2019[25]. Market and Industry Trends - In 2020, China's food additive industry saw a compound annual growth rate (CAGR) of 6.3% in production volume, increasing from 9.47 million tons in 2014 to 12 million tons in 2018[40]. - The sales revenue of the food additive industry grew from 93.5 billion yuan to 116 billion yuan during the same period, reflecting a CAGR of 6.0%[40]. - The demand for biological preservatives is driven by the stable growth of the downstream food industry, which includes meat, dairy, and convenience foods[41]. - The market for biological preservatives is expected to grow significantly as traditional chemical preservatives face increasing regulatory scrutiny and consumer preference shifts towards "no chemical preservatives" products[42]. - The application range of biological preservatives is expanding, with only 25% of the potential market currently utilized, indicating significant growth opportunities[43]. - The vitamin market in food and beverage applications is growing at an estimated rate of 5%, outpacing the pharmaceutical (2%-3%) and feed (1%-2%) sectors[44]. - The health supplement market in China has grown from 69.5 billion yuan in 2010 to 178.5 billion yuan in 2019, with a CAGR of approximately 11.05%[45]. - The functional beverage market is projected to reach 175.6 billion yuan by 2024, driven by increasing consumer health awareness[46]. - China's feed production increased from 64.2 million tons in 2005 to 293.55 million tons in 2020, with a CAGR of 9.97%[48]. Risks and Challenges - The company faces significant risks including product price fluctuations, raw material price volatility, high customer concentration, and exchange rate fluctuations[8]. - The company’s sales to its top five customers accounted for 31.12% of total revenue in 2020, indicating a high customer concentration risk[131]. - The company is implementing measures to mitigate raw material price fluctuations, which significantly impact production costs[130]. - The company’s export revenue constituted 56.53% of its main business income in 2020, exposing it to foreign exchange risks due to reliance on USD for transactions[131]. Research and Development - The company has a strong focus on R&D, with advanced technologies in the extraction and production of biopreservation agents and vitamins, leading to improved production efficiency and reduced costs[58][60]. - The company is currently developing new technologies for vitamin B5 and folic acid, both at the small trial stage[98]. - The company is conducting research on a new high-purity biotin synthesis route, currently in the medium trial stage[98]. - The company received 4 authorized invention patents during the reporting period, enhancing its innovation capabilities[100]. - The company maintains strategic partnerships with research institutions to drive technological innovation and product development[97]. Production and Capacity - The company achieved a production capacity of 1,000 tons of lactic acid bacteria in 2020, which has been completed and put into use[106]. - The production capacity utilization rates for biotin, folic acid, lactic acid bacteria, and natamycin were 65.03%, 59.02%, 49.50%, and 68.79% respectively[108]. - The company is expanding its production capacity for biopreservation agents to meet market demand, as it has been operating at full capacity and had to turn away some customers[120]. - The company has established a supplier reserve mechanism to ensure stable raw material supply amidst market fluctuations[109]. Profit Distribution and Shareholder Returns - The company has established a shareholder return plan for the next three years (2018-2020), prioritizing cash dividends, with a minimum cash distribution of 20% of the distributable profit for the year[134]. - In 2020, the company distributed a cash dividend of 3.50 RMB per 10 shares, with a payout ratio of 30.35% of the net profit attributable to ordinary shareholders[137]. - The company plans to adopt a differentiated cash dividend scheme based on its development stage and capital expenditure arrangements, with a minimum cash dividend ratio of 80% for mature stages without major expenditures[135]. - The company has not proposed a cash profit distribution plan for the reporting period despite having positive distributable profits[139]. - The company has a clear and structured decision-making process for profit distribution, ensuring the protection of minority shareholders' rights[136]. Corporate Governance and Compliance - The company has committed to avoiding any competition with its subsidiaries and will not engage in any business that competes directly or indirectly with its main operations[144]. - The company has established a 36-month lock-up period for shares held by major shareholders post-IPO, with automatic extensions under certain conditions[167]. - The company will ensure that any business opportunities that compete with its operations will be reported and offered to the company[188]. - The company will publicly explain any failure to fulfill its commitments regarding share reduction and apologize to shareholders[177]. - The company has retained Tianjian Accounting Firm as its auditor for the 2020 fiscal year, with an audit fee of 1 million RMB[194]. Related Party Transactions - The company will not engage in public refinancing if it fails to fulfill its commitments[185]. - The company has committed to avoiding unnecessary related party transactions during the period of actual control[190]. - The total expected amount for related party transactions in 2020 is 18.45 million RMB, with actual expenses incurred totaling 10.3739 million RMB[197]. - The company has no major litigation or arbitration matters reported for the current year[195]. - The company reported no significant changes in related party transactions during the fiscal year 2020[200].