Kehua Holdings(SH:603161)2021-04-15 16:00Financial Performance - The net profit attributable to shareholders for 2020 was RMB 20,862,718, with undistributed profits amounting to RMB 400,405,614.94 as of December 31, 2020[5]. - The proposed cash dividend is RMB 1.26 per 10 shares, totaling a maximum of RMB 16,808,400, which represents 80.57% of the net profit attributable to shareholders for 2020[5]. - In 2020, the company's operating revenue was approximately CNY 1.62 billion, a slight decrease of 0.07% compared to 2019[24]. - The net profit attributable to shareholders decreased by 74.69% year-on-year, amounting to CNY 20.86 million[24]. - The basic earnings per share dropped to CNY 0.16, down 74.19% from CNY 0.62 in 2019[26]. - The net cash flow from operating activities decreased by 64.95%, totaling CNY 121.52 million[27]. - The company's total assets increased by 17.69% year-on-year, reaching CNY 3.99 billion at the end of 2020[25]. - The weighted average return on equity fell to 1.61%, a decrease of 4.92 percentage points from 2019[26]. - The company reported a total comprehensive income of CNY 19,531,850.56 for 2020, down from CNY 82,425,913.35 in 2019[195]. - The company’s contract liabilities increased to CNY 264,390.96 from CNY 96,467.00 in the previous year, indicating a growth of 174.36%[194]. Operational Challenges - The company faced increased raw material costs, particularly for nickel and other precious metals, impacting profitability[26]. - The company reported negative net profits in the second and third quarters due to rising material prices and decreased gross margins[30]. - The automotive industry in China saw a decline in passenger vehicle production and sales by 6.5% and 6% respectively in 2020, while commercial vehicle production and sales increased by 20% and 18.7%[37]. - The company’s manufacturing gross margin was 14.54%, with a slight decrease of 2.52 percentage points compared to the previous year[56]. - The revenue from turbo shells and their assembly parts decreased by 6.31%, with costs declining by 1.18%, indicating a lower capacity utilization due to new production line implementation[58]. Research and Development - The company invested CNY 59,960.40 million in R&D during the reporting period, with 2 patent applications submitted and 11 patents granted[52]. - The company has established a robust R&D system, utilizing advanced technologies such as 3D printing and UGNX software to enhance product development efficiency and quality[43]. - The company is focusing on technological development and innovation as a core competitive advantage, continuously optimizing its core technologies[99]. - Research and development expenses for 2020 were CNY 59,960,396.55, a decrease of 3.95% from CNY 62,451,566.29 in 2019[194]. Governance and Compliance - The report includes a standard unqualified audit opinion from Rongcheng Accounting Firm[4]. - The company has confirmed that all board members attended the board meeting, ensuring accountability for the report's accuracy[8]. - The company has implemented a series of governance structures and rules to protect shareholder rights and ensure compliance with legal regulations[131]. - The company has established a detailed talent expansion plan to meet the needs of business scale expansion and strategic planning implementation[102]. - The company is committed to improving its governance structure and internal management systems to enhance overall operational efficiency[99]. Environmental Responsibility - The company has invested in environmental protection measures, including the installation of activated carbon adsorption devices to reduce emissions[131]. - The company has established an environmental emergency response plan, which was approved by local environmental authorities and is valid for three years[136]. - The company’s wastewater discharge for total nitrogen was reported at 2.54 mg/L, which is below the standard limit of 10 mg/L[138]. - The company has successfully implemented pollution control facilities in compliance with national regulations, ensuring normal operation as of the report date[134]. Shareholder Relations - The company maintained communication with minority shareholders through various channels, ensuring their rights were protected[111]. - The profit distribution plan has been approved by the board and will be submitted for shareholder meeting approval[112]. - The company has committed to maintaining shareholder communication and transparency regarding profit distribution[114]. - The company has not engaged in any share buybacks during the reporting period[113]. Market Position and Strategy - The company specializes in the R&D, production, and sales of key components for turbochargers, including turbine housings and intermediate housings, and has established stable strategic partnerships with major manufacturers like Garrett and BorgWarner[35]. - The implementation of stricter emission standards in China is expected to drive demand for turbochargers, providing new market opportunities for the company[39]. - The company aims to expand its market share both domestically and internationally, leveraging its competitive advantages and existing relationships with international clients[98]. - The company is exploring mergers and acquisitions in the industry to enhance its competitiveness and expand its product offerings[97].