Grace(SH:603256)2022-08-29 16:00Financial Performance - The company reported no profit distribution or capital reserve transfer to increase share capital for the first half of 2022[6]. - The financial report for the first half of 2022 has not been audited, ensuring the accuracy and completeness of the financial data presented[5]. - The company's operating revenue for the first half of the year was ¥339,169,117.38, a decrease of 13.94% compared to the same period last year[23]. - Net profit attributable to shareholders was ¥33,882,499.68, down 50.80% year-over-year[23]. - The net profit after deducting non-recurring gains and losses was ¥28,641,342.93, reflecting a decline of 56.50% compared to the previous year[23]. - Basic earnings per share decreased by 50.00% to ¥0.04, while diluted earnings per share also fell by the same percentage[23]. - The weighted average return on equity dropped by 2.39 percentage points to 2.20%[23]. - The company received government subsidies amounting to ¥3,961,738.82, which contributed positively to its financial performance[24]. - The company achieved operating revenue of 339.17 million yuan, a decrease of 13.94% year-on-year[85]. - Net profit for the period was 33.88 million yuan, down 50.80% compared to the previous year, with earnings per share of 0.04 yuan[85]. - Total assets as of June 30, 2022, amounted to 2.673 billion yuan, an increase of 8.26% year-on-year[85]. - The company reported a weighted average return on equity of 2.20%, a decrease of 2.39% year-on-year[85]. Risks and Challenges - The company has outlined several risks in its report, which are detailed in the management discussion and analysis section[8]. - The company faces risks related to concentrated raw material suppliers, which could impact operational stability if major suppliers experience adverse changes[105]. - The price volatility of electronic yarn, which constitutes approximately 50%-60% of production costs, poses a risk to profit stability[106]. - The company faces high customer concentration risk, as its electronic cloth is primarily used in the production of copper-clad laminates, which are dominated by large enterprises[110]. - Intense industry competition may lead to price declines, posing risks to profit levels and overall performance[112]. - The ongoing trade friction between the US and China has resulted in increased tariffs on imported raw materials, which could adversely affect the company's operations[115]. - The company is at risk of profit decline due to significant increases in fixed asset depreciation and amortization following the establishment of its wholly-owned subsidiary[117]. - The company is exposed to exchange rate fluctuations, which could impact product pricing and profitability, necessitating measures to maintain acceptable risk levels[118]. - The COVID-19 pandemic has introduced uncertainties, affecting production and logistics, and leading to a slowdown in demand for consumer electronics[119]. Market Trends - The demand for electronic yarn in China is expected to reach approximately 932,000 tons by 2023, reflecting a significant growth trend[39]. - The PCB market in China is projected to grow to 86.4 billion yuan by 2026, driven by increasing demand for high-frequency and high-speed communication applications[49]. - The electronic fabric market faced oversupply conditions in the first half of 2022, leading to a decrease in prices and sales volume due to various economic factors[45]. - The electronic yarn price has decreased year-over-year, indicating a decline in market conditions compared to the first half of 2021[45]. - The company anticipates continued growth in the consumer electronics market, driven by technological innovations and increasing consumer demand[75]. - The company emphasizes the importance of multi-device connectivity and the growing market for electronic accessories, which is expected to drive further market development[76]. Corporate Governance - The company appointed Cai Ruizhen as an independent director on January 24, 2022, following the resignation of Ma Guozhu, which reduced the proportion of independent directors below one-third[123]. - The company has committed to not engaging in any business activities that may compete with its own operations, ensuring the protection of shareholder interests[146]. - The controlling shareholder, Wang Wenyang, and his daughter Grace Tsu Han Wong, have pledged not to engage in any competitive business activities during their tenure as actual controllers of the company[148]. - There are no undisclosed related party transactions during the reporting period, and any unavoidable transactions will be conducted on a fair and equitable basis[149]. - The company has committed to fair pricing in any related party transactions, adhering to market standards[149]. - The controlling shareholders will not utilize their positions to harm the interests of the company or its shareholders[149]. Environmental Compliance - The company reported that all wastewater discharges met standards, with COD at 178.00 mg/L, well below the limit of 500 mg/L[131]. - The company achieved a noise measurement of 55.70 dB at the southern boundary, which is within the daytime limit of 60 dB[132]. - The company’s waste disposal compliance rate is 100%, with hazardous waste properly managed and reported to the local environmental authority[131]. - The company’s boiler emissions for SO2 were below 2.00 mg/L, significantly lower than the limit of 10 mg/L[131]. - The company’s environmental management practices have been in compliance with national and local regulations throughout the first half of 2022[131]. - The company has implemented a self-monitoring program for pollutant emissions, ensuring compliance with environmental regulations through daily inspections and third-party testing[137]. - The company has not faced any administrative penalties related to environmental issues during the reporting period[138]. - The company actively engages in pollution prevention and environmental protection, achieving full compliance with wastewater and waste gas discharge standards[140]. - The company has adopted energy-saving management practices and implemented clean production methods to reduce carbon emissions, in line with Shanghai's carbon management regulations[141]. Shareholder Information - The total number of shares increased from 877,800,000 to 884,370,000 due to the issuance of 6,570,000 restricted shares[184]. - The proportion of restricted shares increased from 84.51% to 84.62% after the issuance[180]. - The total number of shareholders reached 21,015 by the end of the reporting period[185]. - The largest shareholder, Far East International Limited, holds 658,405,037 shares, representing 74.45% of total shares[188]. - The company has no changes in the number of restricted shares held by the top ten shareholders during the reporting period[185]. - The company’s actual controller is Mr. Wang Wenyang and his daughter Grace Tsu Han Wong, who control several major shareholders[191]. - The company completed the registration of the new shares on January 21, 2022, with the issuance verified by KPMG[184]. - The increase in restricted shares is part of the company's incentive plan for 2021[184]. - The proportion of foreign capital holdings decreased from 84.51% to 83.88% after the issuance[180]. - The top ten restricted shareholders hold a total of 719,000,000 shares, with the largest shareholder, Yuan Yi International Limited, holding 658,405,037 shares[192]. Credit Facilities and Liabilities - The total guarantee amount reached RMB 1,210,000,000, accounting for 76.64% of the company's net assets[168]. - As of June 30, 2022, the subsidiary Huangshi Honghe has utilized RMB 547,155,413.12 of the RMB 700,000,000 comprehensive credit facility from Bank of China[173]. - The company approved a comprehensive credit facility of up to RMB 460,000,000 from China Construction Bank, with RMB 35,156,086.07 utilized as of June 30, 2022[173]. - The company has applied for a comprehensive credit facility of up to RMB 50,000,000 from Fubon Bank, which has not been utilized as of June 30, 2022[176]. Legal and Regulatory Matters - There were no significant lawsuits or arbitration matters during the reporting period[170]. - The company did not provide guarantees for shareholders, actual controllers, or their related parties[171]. - There were no significant related party transactions during the reporting period[162]. - The company has not experienced any non-standard audit opinions in the previous annual report[169]. - There were no major contracts or their performance issues during the reporting period[179]. - The company has not engaged in any bankruptcy reorganization matters[170].