Shuifa Energas(SH:603318)2019-04-26 16:00Financial Performance - The net profit attributable to the parent company for 2018 was RMB 4,382,002.52, while the net profit for the parent company was RMB 16,718,473.21[5]. - The total distributable profit for the year was RMB 79,391,621.79, after accounting for legal surplus reserves and previous year's cash dividends[5]. - The company reported a revenue of 422.63 million yuan in 2018, a decrease of 25.07% compared to 2017[22]. - Net profit attributable to shareholders was 4.38 million yuan, down 92.01% year-on-year, primarily due to reduced revenue and increased financing costs[24]. - The net cash flow from operating activities was -68.93 million yuan, a decline of 283.71% compared to the previous year[24]. - Basic earnings per share were 0.0109 yuan, a decrease of 92.73% from 0.15 yuan in 2017[23]. - The gross profit margin fell to 28.34% in 2018 from 35.10% in 2017, driven by a decrease in high-margin distributed consulting business and increased material costs[46]. - The company reported a 33.11% decrease in cash and cash equivalents, amounting to a reduction of 156.1 million RMB, primarily due to investments in financial products and project payments[36]. - The company's prepaid expenses increased by 216.23%, totaling an increase of 78.4 million RMB, mainly due to a significant rise in prepaid goods[36]. - The company's construction in progress rose by 43.07%, with an increase of 159.9 million RMB, attributed to the substantial investment in the Ordos Phase I LNG liquefaction plant[36]. Dividend Policy - The company proposed no cash dividends, no bonus shares, and no capital reserve transfer to increase share capital for the 2018 fiscal year due to tight cash flow and significant funding needs for business development[5]. - The company did not distribute cash dividends for the fiscal year 2018 due to tight cash flow and significant funding needs for business development[120]. - The company’s available profit for distribution in 2018 was minimal, leading to the decision to retain earnings for future operational needs[125]. - The company’s profit distribution plan for 2018 was not proposed due to the low profitability level[125]. - The company’s commitment to maintaining shareholder interests includes retaining earnings for future growth rather than immediate distribution[125]. Operational Strategy - The company is committed to a stable and healthy development of operations, considering its current profit levels and cash flow situation[5]. - The company has outlined its future strategies and development plans, although these do not constitute a commitment to investors[6]. - The company is focusing on improving management practices and optimizing production processes to enhance overall competitiveness[45]. - The company aims to enhance customer satisfaction by providing timely feedback and support, ensuring a focus on quality and service[41]. - The company plans to enhance its gas equipment manufacturing core competitiveness and expand high-end equipment product development capabilities[112]. Risk Management - The company has acknowledged potential risks in its future development plans, which are detailed in the report[8]. - The company faces operational risks due to high initial investments in distributed energy stations and potential cash flow issues[117]. - The tightening domestic financial situation led to increased financing difficulties, impacting the company's capital structure[117]. - The company has committed to avoiding any related party transactions that could harm the interests of other shareholders[132]. Research and Development - The company has developed 17 software copyrights and holds 46 patents related to core products and technologies, demonstrating its strong R&D capabilities[37]. - The company’s R&D expenses were CNY 17.80 million, showing a slight decrease of 0.50% compared to the previous year[48]. - Research and development expenses totaled CNY 17,803,128.22, accounting for 4.21% of total revenue, with 30 R&D personnel representing 5.95% of the total workforce[60]. Market Position and Industry Trends - The company is positioned as an early entrant in the distributed energy sector, with a comprehensive technical support capability for project feasibility studies and engineering design[38]. - The national plan aims to increase the share of natural gas in primary energy consumption from 5.9% in 2015 to approximately 10% by 2020 and 15% by 2030[34]. - The domestic natural gas market is experiencing rapid growth due to urbanization and environmental pressures, necessitating increased imports to meet demand[77]. - The company’s gas equipment manufacturing sector is expected to benefit from the increasing share of natural gas in China's energy consumption, projected to reach over 10% by 2020[87]. Corporate Governance - The company has maintained a focus on ensuring the accuracy and completeness of its financial reports, as stated by its board and management[7]. - The company has committed to ensuring the reasonable and legal use of raised funds, with established management and disclosure systems[137]. - The company has committed to a profit distribution policy that aligns with regulatory requirements, ensuring stable returns for investors[138]. - The company has engaged in communication and cooperation with suppliers to achieve mutual benefits[171]. Shareholder Structure - The total number of ordinary shareholders at the end of the reporting period was 14,418, an increase from 10,920 at the end of the previous month[178]. - The top ten shareholders hold a total of 44.26% of the shares, with Dalian Pasi Investment Co., Ltd. holding 178,500,000 shares[179]. - The company completed a share transfer agreement on December 10, 2018, where 120,950,353 shares, representing 29.99% of the total share capital, were transferred to Shui Fa Zhong Xing Group[187]. - After the share transfer, Shui Fa Zhong Xing Group became the largest shareholder, holding 29.99% of the company's total shares, while Pai Si Investment held 14.27%[188]. Audit and Compliance - The report includes a standard unqualified audit opinion from the accounting firm, ensuring the reliability of the financial statements[4]. - The company appointed Deloitte Touche Tohmatsu Certified Public Accountants LLP as the new auditor for the 2018 fiscal year, with an audit fee of RMB 880,000[147]. - The internal control audit will also be conducted by Deloitte Touche Tohmatsu Certified Public Accountants LLP, with a fee of RMB 220,000[147]. - The company has no major litigation or arbitration matters during the reporting period[150].