xuefeng Sci-Tech(group)(SH:603227)2019-06-06 16:00Financial Performance - In 2018, the company's operating revenue reached ¥2,034,283,672.98, a year-on-year increase of 59.75% compared to ¥1,273,440,579.27 in 2017[21]. - The net profit attributable to shareholders was ¥51,775,391.80 in 2018, representing a significant increase of 180.47% from ¥18,460,465.71 in 2017[21]. - The net profit after deducting non-recurring gains and losses was ¥30,548,581.94, up 50.04% from ¥20,359,690.77 in the previous year[21]. - The net cash flow from operating activities improved to ¥1,386,192.51, a turnaround from a negative cash flow of ¥70,641,753.11 in 2017[21]. - The basic earnings per share increased to ¥0.079, reflecting a growth of 182.14% compared to ¥0.028 in 2017[22]. - The company's total assets rose to ¥3,046,142,023.18, marking a 15.28% increase from ¥2,642,430,570.58 at the end of 2017[21]. - The gross profit margin increased by 19.20%, contributing to a gross profit increase of ¥5,777.10 million due to higher operating revenue[24]. - The company reported a significant increase in service revenue by ¥34,777.17 million, a growth of 55.99% driven by market expansion efforts[24]. - Non-recurring gains totaled ¥21,226,809.86 in 2018, compared to a loss of ¥1,899,225.06 in 2017, indicating improved financial performance[27]. - The weighted average return on equity rose to 4.28%, up from 1.63% in 2017, reflecting better utilization of equity capital[24]. Dividend Policy - The company plans to distribute a cash dividend of RMB 0.3 per 10 shares, totaling RMB 19.761 million, based on a total share capital of 65.87 million shares as of December 31, 2018[5]. - For the fiscal year 2018, the company distributed a cash dividend of 0.30 RMB per share, amounting to a total of 19,761,000 RMB, representing 38.17% of the net profit attributable to ordinary shareholders[140]. - In 2018, the company implemented a cash dividend policy, planning to distribute at least 30% of the annual distributable profit as cash dividends, contingent on profitability and cash flow[139]. Operational Risks and Compliance - The company reported no significant operational risks that could materially affect its production and operations during the reporting period[7]. - The company has received a standard unqualified audit report from Da Hua Certified Public Accountants[4]. - The company has not engaged in any non-operational fund occupation by controlling shareholders or related parties[7]. - The company has not violated any decision-making procedures in providing guarantees to external parties[7]. - The company’s financial report has been confirmed for its authenticity and completeness by its management team[3]. - The company has ensured compliance with all legal and regulatory requirements regarding share transfers and disclosures[145]. - The company has not encountered any issues with fund occupation or overdue receivables during the reporting period[146]. - The company has not made any changes to accounting policies or estimates that would affect the financial statements[146]. - The company has maintained a commitment to transparency and compliance in all its financial dealings and reporting[145]. Industry Trends and Developments - The overall performance of the civil explosive industry showed an upward trend in 2018, with major economic indicators and product output increasing, although at a slower growth rate compared to the previous year[32]. - The civil explosive industry is experiencing a gradual resolution of excess capacity, with on-site mixed explosive production capacity accounting for 28% of total industrial explosive production capacity[32]. - The civil explosives industry achieved a total profit of 6.284 billion yuan in 2018, representing a year-on-year growth of 17.04%, although the growth rate decreased by 11.7 percentage points compared to 2017[80]. - The industry produced 4.2774 million tons of industrial explosives in 2018, with a year-on-year increase of 8.61%, while the sales volume reached 4.2869 million tons, up 8.41% year-on-year[80]. - The company aims to strengthen its core business in civil explosives while expanding into the energy sector for sustainable development[32]. - The company is recognized as a national high-tech enterprise, focusing on technological innovation and collaboration with universities and research institutions[35]. Research and Development - The company added 4 new utility model patents during the reporting period, enhancing its technological capabilities[44]. - Research and development expenses amounted to CNY 13.60 million, with a year-on-year increase of 221.16%[64]. - The company capitalized 82.72% of its R&D investments, totaling CNY 11.25 million[65]. - The company plans to continue increasing R&D investments in 2019, focusing on smart manufacturing and automation technologies[66]. - The company is actively pursuing technology transfer projects, including a production line for detonators in Pakistan, which utilizes proprietary technology[67]. Inventory and Asset Management - The company reported a 35.86% increase in accounts receivable, totaling approximately ¥516.26 million, due to increased settlements with customers using bills of exchange[33]. - Inventory increased by 65.68% to approximately ¥165.06 million, primarily due to unsold agricultural products acquired by a subsidiary[33]. - The company's construction in progress rose by 650.40% to approximately ¥238.83 million, driven by investments in a new natural gas transportation pipeline project[33]. - The company's total assets increased, with fixed assets net amounting to approximately ¥885.97 million, representing 29.08% of total assets[33]. Social Responsibility and Community Engagement - The company invested 1.1 million RMB in poverty alleviation efforts, helping 211 registered poor households to achieve poverty alleviation[156]. - The company implemented various poverty alleviation measures, including public service enhancement and skills training, resulting in 167 individuals from registered poor households gaining employment[157]. - The company is committed to social responsibility and actively participates in local poverty alleviation initiatives[155]. - The company plans to continue its poverty alleviation efforts in 2019, focusing on local agricultural and aquaculture support[155]. Governance and Management - The company has established a governance structure that complies with the requirements of the Company Law and the Securities Law, ensuring clear responsibilities among decision-making, supervisory, and management bodies[196]. - The board of directors consists of 9 members, including 3 independent directors, meeting legal requirements for composition[199]. - The company maintains a clear separation from its controlling shareholder in personnel, assets, finance, and operations, ensuring independent business capabilities[196]. - The management team has effectively implemented board resolutions and ensured smooth daily operations throughout the reporting period[196]. Market Strategy and Future Outlook - The company is in a growth phase, with ongoing fundraising projects and plans to adjust dividend distribution ratios based on future capital expenditure needs[139]. - The company plans to sell 91,500 tons of industrial explosives and 14 million detonators in 2019, focusing on increasing market share and optimizing production capacity[133]. - The company aims to enhance its digital transformation efforts, with a budget allocation of 30 million CNY for technology upgrades[182]. - The company is expanding its market presence in Central Asia, targeting a 25% increase in market share within the next two years[182].