Tianyang HotMelt Adhesives(SH:603330)2020-04-27 16:00Financial Performance - The company's operating revenue for 2019 was CNY 659,067,332.32, representing a 17.52% increase compared to CNY 560,823,120.00 in 2018[21]. - The net profit attributable to shareholders decreased by 51.70% to CNY 16,989,011.79 from CNY 35,174,937.19 in the previous year[21]. - The basic earnings per share dropped by 50.00% to CNY 0.16, down from CNY 0.32 in 2018[22]. - The total assets increased by 9.70% to CNY 1,072,856,430.20 at the end of 2019, compared to CNY 977,958,104.07 at the end of 2018[21]. - The net cash flow from operating activities for 2019 was CNY 45,796,041.30, an increase of 8.81% from CNY 42,086,771.23 in 2018[21]. - The company reported a total non-recurring loss of approximately -4.35 billion, compared to a profit of 4.15 billion in 2018[29]. - The company's revenue from non-operating income was approximately 590.39 million in 2019, indicating a significant contribution to overall financial performance[29]. - The company achieved operating revenue of CNY 659.07 million, a year-on-year increase of 17.52%[58]. - Net profit attributable to shareholders was CNY 16.99 million, down 51.70% year-on-year, while the net profit excluding non-recurring gains and losses decreased by 31.23% to CNY 21.34 million[58]. - The total revenue for the company reached ¥646,412,065.79, an increase of 15.89% compared to the previous year[64]. Dividend Distribution - The company plans to distribute a cash dividend of 0.73 CNY per 10 shares, totaling 7,971,600 CNY, and will increase its total share capital to 152,880,000 shares through a capital reserve conversion of 4 shares for every 10 shares held[5]. - In 2019, the cash dividend payout ratio was 46.92% of the net profit attributable to ordinary shareholders, which was 16,989,011.79 RMB[138]. - The company has a commitment to distribute no less than 30% of the distributable profit as cash dividends each year, as per the commitment made on September 27, 2017[140]. - In 2018, the cash dividend was 2.26 RMB per 10 shares, with a total payout of 17,628,000 RMB, representing 50.12% of the net profit attributable to ordinary shareholders[138]. - In 2017, the cash dividend was 2.58 RMB per 10 shares, with a total payout of 15,480,000 RMB, representing 50.96% of the net profit attributable to ordinary shareholders[138]. - The company has not proposed any cash profit distribution plan for the reporting period despite having positive distributable profits[139]. Risks and Challenges - The company faces significant risks including economic slowdown due to the COVID-19 pandemic, accounts receivable risks, raw material price fluctuations, and potential declines in gross margin[7]. - The company emphasizes that forward-looking statements regarding future plans and strategies do not constitute a commitment to investors, highlighting the importance of investment risk awareness[6]. - The company is addressing accounts receivable risks by strengthening customer credit investigations and management, and has initiated legal actions for overdue accounts[132]. - The cost of raw materials, which constitutes over 80% of production costs for hot melt adhesives, is subject to significant price fluctuations influenced by oil prices and exchange rates[132]. - The company anticipates challenges in capacity expansion if market growth does not meet expectations, potentially affecting projected earnings[133]. - The company is investing in safety and environmental compliance to mitigate risks associated with regulatory changes and operational safety[133]. Market and Product Development - The company is focused on expanding its product offerings in the hot melt adhesive sector, which includes various types of adhesives such as EVA and PUR[11]. - The company is expanding its product line to include environmentally friendly hot melt wall fabrics and reactive adhesives, targeting a growing market demand[32]. - The adhesive market is projected to grow at a compound annual growth rate (CAGR) of 5.3% globally from 2017 to 2022, with the Asia-Pacific region leading at 5.7%[35]. - The company plans to shift its sales strategy to focus on distributors, enhancing its market reach and operational efficiency[34]. - The company aims to embrace online sales channels, including live streaming, to integrate online and offline marketing efforts[34]. - The company is actively expanding its market share in the automotive interior sector, despite a 4.08% decline in sales volume in 2019 due to market downturns[41]. - The company is focusing on developing adhesive solutions for the rapidly growing electronic components market driven by 5G applications[44]. - The company is recognized as a key high-tech enterprise under the National Torch Program and has established a research team primarily composed of PhD and master's researchers[48]. Environmental and Compliance Efforts - The company is committed to replacing solvent-based adhesives with high-performance, environmentally friendly alternatives, aligning with stricter environmental regulations[36]. - The company has established an emergency response plan for environmental incidents, last updated in June 2019[177]. - Online monitoring systems for wastewater and air emissions have been installed to ensure compliance with environmental regulations[177]. - The company has implemented comprehensive pollution control measures, achieving compliance with air quality standards[174]. - The company has actively engaged in employee training to enhance skills and promote growth[171]. - Environmental management practices have been recognized by various stakeholders, reflecting the company's commitment to sustainability[171]. Legal and Regulatory Matters - The company is currently involved in multiple lawsuits, with claims totaling 9,865,418.09 RMB against Zhejiang Yuhui Sunshine Energy Co., Ltd. for overdue payments[152]. - The company has a pending claim of 1,271,191.89 RMB against Jian Kai Sunshine New Energy Technology Co., Ltd. for unpaid debts[152]. - The company has reported a total of 3,000,000.00 RMB in claims against Zhongdian Electric (Shanghai) Technology Co., Ltd. due to business transactions[152]. - The company has reported a total of 1,700,692.00 RMB in claims against Yangzhou Runbang New Energy Development Co., Ltd. for unpaid debts[152]. - The company has a total guarantee amount of RMB 126,000,404.27, which accounts for 20.68% of the company's net assets[166]. - The company provided guarantees totaling RMB 164,500,404.27 to subsidiaries during the reporting period[166]. Research and Development - The company has initiated several R&D projects in 2019, including the development of a copolyamide hot melt adhesive for metal and PVC bonding, and a low-temperature resistant modified polyester hot melt adhesive[90][91]. - The company has developed a new strategy to enhance its research and development capabilities, focusing on optimizing product processes and improving performance in practical applications[90]. - Research and development expenses amounted to 18,423,174.03 CNY, representing 2.80% of total revenue[75]. - The company has obtained 10 domestic patents in 2019, including 5 invention patents and 5 utility model patents, bringing the total to 92 authorized patents by the end of the reporting period[48]. Shareholder Information - The total number of ordinary shares increased from 78,000,000 to 109,200,000 after a capital reserve conversion of 4 shares for every 10 shares held[184]. - The earnings per share decreased from 0.32 RMB to 0.16 RMB following the share increase[188]. - The net asset value per share slightly decreased from 5.73 RMB to 5.58 RMB after the share increase[188]. - The total number of ordinary shareholders increased from 9,951 to 11,497 during the reporting period[190]. - The largest shareholder, Li Zhelong, holds 36.10% of the shares, with a total of 39,422,565 shares, of which 19,667,492 shares are pledged[192]. - The second-largest shareholder, Li Mingjian, holds 15.02% of the shares, totaling 16,400,475 shares, with 7,280,000 shares pledged[192].