SGC(SH:603269)2019-04-09 16:00Financial Performance - The company's operating revenue for 2018 was CNY 603,746,269.82, representing a 6.80% increase compared to CNY 565,325,055.77 in 2017[21]. - The net profit attributable to shareholders for 2018 was CNY 33,187,722.33, a decrease of 12.38% from CNY 37,874,954.45 in the previous year[21]. - The net cash flow from operating activities was negative CNY 7,490,824.44, a decline of 117.38% compared to CNY 43,111,806.60 in 2017[22]. - The total assets at the end of 2018 were CNY 1,420,112,122.83, an increase of 14.39% from CNY 1,241,428,309.10 in 2017[22]. - The net assets attributable to shareholders increased by 3.49% to CNY 649,924,081.99 at the end of 2018, up from CNY 628,021,250.35 in 2017[22]. - The basic earnings per share for 2018 were CNY 0.36, down 21.74% from CNY 0.46 in 2017[23]. - The weighted average return on equity decreased to 5.20% in 2018, down 1.82 percentage points from 7.02% in 2017[23]. - The company reported a decrease in net profit excluding non-recurring gains and losses to CNY 28,700,329.01, down 18.02% from CNY 35,009,539.85 in 2017[22]. - The company achieved operating revenue of ¥603,746,269.82, an increase of 6.8% compared to the previous year[50]. - Net profit attributable to shareholders decreased by 12.38% to ¥33,187,722.33, primarily due to lower gross margins on certain large projects and increased selling expenses[50]. - The company reported a significant decline in net cash flow from operating activities, down 117.38% to -¥7,490,824.44, attributed to increased payments for goods[57]. - Operating costs increased by 8.85% to ¥426,085,581.25, primarily due to higher revenue leading to increased costs[57]. - The gross profit margin for the main business decreased by 1.36 percentage points to 29.27% due to lower margins on large projects[61]. Market and Business Strategy - The company focuses on the research, design, manufacturing, and installation of industrial cooling towers, with applications in petrochemical, metallurgy, and power industries[34]. - The production model is based on "sales-driven production," where production plans are aligned with sales orders[37]. - The sales strategy involves direct sales through project bidding, with a structured process for contract negotiation and execution[39]. - The company plans to enhance its international market presence by establishing subsidiaries in Indonesia and the United States with total investments of up to $372 million[51]. - The company has completed the registration of its subsidiaries in Indonesia and the United States, enhancing its operational footprint[52]. - The company aims for "internal development + external expansion" strategy, focusing on technological innovation and broadening its cooling tower business for key industries like petrochemicals, metallurgy, and power[101]. - The company is exploring potential acquisitions to enhance its product portfolio, with a budget of 500 million RMB allocated for this purpose[134]. - The company plans to expand its market presence in Southeast Asia, targeting a 25% market share by the end of the year[132]. Research and Development - The company has developed a new series of environmentally friendly cooling towers, achieving a water-saving rate of over 50% for the B model, compared to 20%-30% for the A model[52]. - The company holds 110 patents and has received recognition for multiple high-tech products in energy-saving and water-saving technologies[48]. - The company’s R&D investment is currently insufficient, relying heavily on imitation rather than innovation due to inadequate intellectual property protection and chaotic market competition[44]. - Research and development expenses decreased by 6.86% to ¥14,455,154.37, reflecting a reduction in material costs for certain projects[57]. - New product development initiatives are underway, with an investment of 50 million allocated for R&D in advanced cooling technologies[185]. Environmental Compliance - The company has committed to environmental protection measures, including a 15-meter high exhaust stack for emissions treatment, ensuring compliance with standards[154]. - The company has implemented noise pollution control measures, including vibration pads and soundproof windows, to ensure noise levels meet regulatory standards[154]. - The company has a waste management strategy that includes recycling plastic and steel waste, with hazardous waste handled by qualified units[154]. - The company’s environmental compliance efforts are supported by a range of treatment technologies, including activated carbon adsorption and thermal combustion systems[156]. - The company has established a total of three active carbon adsorption systems for treating non-methane total hydrocarbons, with a processing capacity of 24,000 m³/h[155]. Shareholder and Governance - The company plans to distribute a cash dividend of CNY 1.09 per 10 shares, totaling CNY 9,970,230.00[5]. - The cash dividend policy is aligned with regulations and aims to protect the rights of shareholders, especially minority investors[107]. - The company has committed to not transferring or entrusting the management of shares held prior to the IPO for 12 months from the date of listing[114]. - Major shareholders have pledged to hold their shares long-term and will not reduce their holdings below the IPO price during the specified lock-up period[116]. - The company will take legal responsibility for any false statements or omissions in the prospectus, including potential buyback obligations if conditions are not met[118]. - The company has established a commitment to transparency and accountability to investors regarding share transactions[118]. - The company will face penalties for unauthorized share reductions, including forfeiture of dividends equivalent to the amount gained from such actions[116]. - The company has outlined specific conditions under which it will repurchase shares if regulatory authorities determine non-compliance with listing conditions[118]. - The company has committed to ensuring the authenticity and completeness of its prospectus, taking legal responsibility for any false statements or omissions[120]. - The controlling shareholders, Jin Aoda and Wu Zhuping, pledged to repurchase shares if any misleading information in the prospectus leads to investor losses[120]. Employee and Management - The total number of employees in the parent company and major subsidiaries is 482, with 280 in the parent company and 202 in subsidiaries[195]. - Employee composition includes 227 production staff, 108 sales personnel, 53 technical staff, and 12 financial staff[195]. - The company emphasizes a fair and competitive compensation policy to motivate employees and support their career development[196]. - The total remuneration for all senior management personnel amounts to 5,624.02 thousand yuan for the reporting period[182]. - The management emphasized the importance of maintaining compliance with regulatory standards to avoid potential penalties[137]. Future Outlook - The company provided a positive outlook for the next quarter, projecting a revenue increase of 10% to 1.32 billion RMB[130]. - The company is committed to reducing operational costs by 5%, aiming for a more efficient cost structure[136]. - The management team highlighted the importance of sustainability, committing to a 40% reduction in carbon emissions by 2025[186]. - The company provided guidance for 2019, projecting a revenue growth of 10% to 12%, aiming for a total revenue between 1.65 billion and 1.68 billion[187].