SONGFA(SH:603268)2021-10-27 16:00Main Financial Data Key Accounting Data and Financial Indicators In Q3 2021 and year-to-date, the company experienced a significant decline in several core financial metrics, with revenue slightly decreasing and net profit attributable to shareholders turning from profit to a substantial loss, worsening key ratios like EPS and ROE Key Financial Data for Q3 2021 and Year-to-Date | Item | Current Period (Q3 2021) | Year-to-Date (YTD 2021) | | :--- | :--- | :--- | | Operating Revenue | 98.3809 million yuan (-15.60% YoY) | 283.8939 million yuan (-0.94% YoY) | | Net Profit Attributable to Shareholders of Listed Company | -12.0935 million yuan (-306.89% YoY) | -22.0935 million yuan (-410.23% YoY) | | Net Profit Attributable to Shareholders of Listed Company (Excluding Non-recurring Items) | -12.6634 million yuan (-339.10% YoY) | -23.6452 million yuan (-680.81% YoY) | | Net Cash Flow from Operating Activities | Not Applicable | -26.7910 million yuan (-188.14% YoY) | | Basic Earnings Per Share (yuan/share) | -0.10 (-300.00% YoY) | -0.18 (-400.00% YoY) | Key Balance Sheet Data at Period End | Item | End of Current Period (2021-09-30) | End of Prior Year (2020-12-31) | Change (%) | | :--- | :--- | :--- | :--- | | Total Assets | 1,105.8541 million yuan | 1,124.2368 million yuan | -1.64% | | Shareholders' Equity Attributable to Shareholders of Listed Company | 648.5098 million yuan | 670.2042 million yuan | -3.24% | Non-recurring Gains and Losses Items and Amounts Year-to-date, the company's total non-recurring gains and losses amounted to 1.5517 million yuan, primarily driven by government grants recognized in current profit and loss totaling 2.5082 million yuan Details of Non-recurring Gains and Losses Items (Year-to-Date) | Item | Amount (yuan) | | :--- | :--- | | Gains/Losses from Disposal of Non-current Assets | 61,545.35 | | Government Grants Recognized in Current Profit and Loss | 2,508,189.51 | | Other Non-operating Income and Expenses | -558,058.21 | | Other Gains and Losses Meeting the Definition of Non-recurring Items | 17,526.78 | | Less: Income Tax Impact | 269,235.12 | | Less: Impact on Minority Interests (After Tax) | 208,287.88 | | Total | 1,551,680.43 | Analysis of Changes in Key Financial Indicators The significant decline in the company's profit metrics and EPS is primarily due to the 'Double Reduction Policy' impacting its subsidiary 'Tihu Brothers', while the deterioration in operating cash flow is attributed to increased international shipping costs and delayed order deliveries due to the pandemic - The company's net profit, non-recurring net profit, and EPS significantly decreased year-on-year (ranging from -306.89% to -680.81%), primarily due to the 'Double Reduction Policy' in the education sector impacting the profitability of its controlled subsidiary 'Tihu Brothers'8 - Net cash flow from operating activities decreased by 188.14% year-on-year, mainly due to increased international shipping costs and global pandemic-related port operational issues, leading to delayed order deliveries and extended working capital cycles, while supplier payments and expenses remained due on time8 Shareholder Information Total Number of Shareholders and Top Ten Shareholders' Holdings As of the reporting period end, the company had 5,510 common shareholders, with the top two shareholders, Hengli Group Co., Ltd. and Lin Daofan, collectively holding over 52%; notably, some shares held by Lin Daofan and all shares held by Liu Zhuangchao are pledged and frozen, respectively, and Lin Daofan (Director and General Manager) and Lin Qiulan (Deputy General Manager) are father and daughter - As of the end of the reporting period, the company had 5,510 common shareholders10 Top 10 Shareholders' Holdings | Shareholder Name | Shareholding Ratio (%) | Number of Shares Held | Share Status | | :--- | :--- | :--- | :--- | | Hengli Group Co., Ltd. | 30.14 | 37,428,000 | None | | Lin Daofan | 22.26 | 27,644,000 | Pledged 19,300,000 | | Liu Zhuangchao | 5.95 | 7,392,000 | Frozen 7,392,000 | | Zhang Lihong | 1.66 | 2,055,079 | None | | Lin Qiulan | 1.42 | 1,764,000 | None | - Shareholder Lin Daofan (Company Director and General Manager) and Lin Qiulan (Company Deputy General Manager) are father and daughter10 Other Reminders Significant Risk Warning The company specifically warns investors about significant risks from the 'Double Reduction Policy', which severely impacted its controlled subsidiary Tihu Brothers (online education technology services), leading to a sharp decline in its Q1-Q3 revenue and profit; despite active transformation efforts, market uncertainties suggest future earnings may not meet expectations - The company explicitly states that the 'Double Reduction Policy', issued in July 2021, significantly impacted the core business of its controlled subsidiary Tihu Brothers, which provides technical services to online education institutions12 Performance of Controlled Subsidiary Tihu Brothers in Q1-Q3 2021 | Metric | Amount | Year-on-Year Change | | :--- | :--- | :--- | | Main Business Revenue | 6.6220 million yuan | -89.06% | | Net Profit | -11.6112 million yuan | -129.10% | - The company warns that Tihu Brothers' business transformation involves complex product development and requires time to build market demand, leading to significant uncertainty regarding future earnings, urging investors to be aware of investment risks12 Quarterly Financial Statements Type of Audit Opinion The financial statements for this quarter are unaudited - The company's Q3 2021 financial statements are unaudited413 Financial Statements This section presents the unaudited consolidated balance sheet, income statement, and cash flow statement, indicating a slight decrease in total assets and shareholder equity, an increase in liabilities, a shift from profit to loss, and a negative operating cash flow, reflecting a tightening overall cash position Consolidated Balance Sheet As of September 30, 2021, total assets were 1.106 billion yuan, a 1.64% decrease from the beginning of the year, while total liabilities increased by 11.24% to 431 million yuan, driven by higher short-term and long-term borrowings, and shareholders' equity attributable to the listed company decreased by 3.24% to 649 million yuan Key Items from Consolidated Balance Sheet | Item (Unit: yuan) | 2021-09-30 | 2020-12-31 | | :--- | :--- | :--- | | Total Assets | 1,105,854,139.85 | 1,124,236,799.05 | | Total Liabilities | 431,426,384.74 | 387,844,252.01 | | Total Equity Attributable to Parent Company Shareholders | 648,509,834.43 | 670,204,231.09 | | Minority Interests | 25,917,920.68 | 66,188,315.95 | Consolidated Income Statement In Q1-Q3 2021, operating revenue was 284 million yuan, largely flat year-on-year, but a 44.76% surge in operating costs led to operating profit turning from a 25.85 million yuan gain to a 27.39 million yuan loss, resulting in a net loss attributable to parent company shareholders of 22.09 million yuan compared to a 7.12 million yuan profit in the prior year Key Items from Consolidated Income Statement (Q1-Q3 2021 vs Q1-Q3 2020) | Item (Unit: yuan) | 2021 Jan-Sep | 2020 Jan-Sep | | :--- | :--- | :--- | | Total Operating Revenue | 283,893,905.09 | 286,601,240.70 | | Total Operating Costs | 320,341,519.48 | 263,334,938.38 | | Operating Profit | -27,388,719.24 | 25,854,557.81 | | Total Profit | -27,897,475.45 | 26,536,176.20 | | Net Profit Attributable to Parent Company Shareholders | -22,093,508.61 | 7,121,654.27 | Consolidated Cash Flow Statement In Q1-Q3 2021, net cash flow from operating activities significantly deteriorated to -26.79 million yuan from a 30.39 million yuan inflow in the prior year, primarily due to increased cash paid for goods, while net cash from investing activities was a 9.40 million yuan inflow and financing activities resulted in a 5.75 million yuan outflow, with ending cash and cash equivalents at 12.71 million yuan, a 23.54 million yuan decrease from the beginning of the period Key Items from Consolidated Cash Flow Statement (Q1-Q3 2021 vs Q1-Q3 2020) | Item (Unit: yuan) | 2021 Jan-Sep | 2020 Jan-Sep | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | -26,790,989.36 | 30,394,581.22 | | Net Cash Flow from Investing Activities | 9,397,461.60 | 1,507,254.91 | | Net Cash Flow from Financing Activities | -5,754,988.79 | -68,086,643.18 | | Net Increase in Cash and Cash Equivalents | -23,539,494.66 | -36,666,981.99 | | Ending Balance of Cash and Cash Equivalents | 12,713,814.78 | 33,427,165.40 | Adjustments for First-time Adoption of New Lease Standards Effective January 1, 2021, the company adopted new lease standards, retrospectively adjusting the financial statements as of the adoption date, primarily decreasing 'Fixed Assets' by 33.77 million yuan while increasing 'Right-of-Use Assets' by the same amount, and recognizing new 'Lease Liabilities' of 19.69 million yuan with corresponding adjustments to 'Non-current Liabilities Due Within One Year' and 'Long-term Payables' - The company first adopted the new lease standards effective January 1, 2021, and made corresponding adjustments to its opening financial statements25 Key Adjustment Items under New Lease Standards (2021-01-01) | Adjustment Item | Adjustment Amount (yuan) | | :--- | :--- | | Fixed Assets | -33,767,205.98 | | Right-of-Use Assets | +33,767,205.98 | | Non-current Liabilities Due Within One Year | -9,924,554.67 | | Lease Liabilities | +19,694,684.12 | | Long-term Payables | -9,770,129.45 |