BIO-CHEM(SH:603360)2021-08-23 16:00Financial Performance - The company's operating revenue for the first half of 2021 was approximately RMB 475.19 million, representing a 19.48% increase compared to RMB 397.70 million in the same period last year[19]. - The net profit attributable to shareholders for the first half of 2021 was approximately RMB 123.12 million, a decrease of 3.79% from RMB 127.96 million in the previous year[19]. - The net profit attributable to shareholders after deducting non-recurring gains and losses was approximately RMB 120.23 million, down 4.70% from RMB 126.17 million in the same period last year[19]. - The net cash flow from operating activities for the first half of 2021 was approximately RMB 92.71 million, a decrease of 3.93% compared to RMB 96.50 million in the previous year[19]. - The total assets at the end of the reporting period were approximately RMB 1.49 billion, an increase of 4.04% from RMB 1.43 billion at the end of the previous year[19]. - The net assets attributable to shareholders at the end of the reporting period were approximately RMB 920.01 million, a decrease of 6.91% from RMB 988.28 million at the end of the previous year[19]. - The basic earnings per share for the first half of 2021 were RMB 0.47, down 4.08% from RMB 0.49 in the same period last year[17]. - The weighted average return on net assets for the first half of 2021 was 12.16%, an increase of 0.09 percentage points compared to 12.07% in the previous year[17]. - The gross profit margin for the industrial biocide business remained high at 45.63%[36]. Cash Flow and Investments - The company’s cash flow from operating activities decreased by 3.93% to CNY 92.71 million[39]. - The company plans to invest CNY 483 million in the Songmu Island Phase III project, with CNY 251.83 million already invested as of June 2021[46]. - The company reported a total cash inflow from financing activities of approximately ¥588.78 million, significantly higher than ¥330.00 million in the same period of 2020[117]. - The total cash outflow from financing activities was ¥594,739,537.19, compared to ¥299,538,567.27, an increase of 98.7%[120]. - The company received ¥398,485,572.00 in borrowings, a substantial increase from ¥30,000,000.00 in the previous period[120]. Market Position and Operations - The company's sales revenue from isothiazolinone industrial biocide raw materials accounted for 98.22% of total consolidated revenue, providing stable cash flow and directly impacting overall profitability and performance[28]. - The total production capacity of the company exceeds 30,000 tons, making it the largest producer of isothiazolinone industrial biocide raw materials in Asia, with plans to exceed 40,000 tons by the end of 2021[29]. - The company has established stable long-term partnerships with major clients such as Dow Chemical and Lanxess, enhancing its competitive advantage in the market[22]. - The company employs a direct sales model, primarily targeting industrial biocide solution providers and traders, ensuring efficient market reach[25]. - The company has established a strong market position with a high market share, benefiting from nearly 20 years of experience in the isothiazolinone industrial biocide market[33]. Research and Development - The company has been recognized as a high-tech enterprise since October 2011, holding multiple invention patents and continuously improving its R&D capabilities[31]. - The company’s R&D expenses increased by 35.74% to CNY 14.41 million, reflecting ongoing innovation efforts[39]. - Research and development expenses for the first half of 2021 were ¥14,409,271.65, compared to ¥10,615,482.28 in the same period last year, representing a 35.5% increase[109]. Environmental and Safety Compliance - The company maintains a strong focus on safety and environmental protection, ensuring compliance with national and local environmental standards[32]. - The company emphasized the importance of environmental protection, facing increased costs due to stricter regulations, which may impact profitability[48]. - Safety production risks are highlighted due to the use of hazardous chemicals, with ongoing efforts to enhance safety training and internal controls[49]. - The company has invested in high-standard environmental protection facilities and personnel to comply with regulations[48]. - The company reported a total of 27.6 tons of chemical oxygen demand (COD) discharged, which is compliant with environmental standards[63]. Shareholder and Governance - A new board of directors and senior management team was elected in April 2021, indicating a leadership change[56]. - The company has committed to respecting the control position of Dalian Baiao Chemical Co., Ltd. by its major shareholder, Sanxin Investment, which will hold shares as a financial investor without seeking control of the company[76]. - The company plans to grant a total of 5.82 million restricted stocks to 64 incentive objects, with an initial grant of 5.52 million shares and a reserved 300,000 shares, at a price of 7.36 CNY per share[59]. - The company has not reported any major litigation or arbitration matters during the reporting period[79]. - The total number of shares after the recent changes is 261,346,400, with 5,461,000 shares being reduced from the unrestricted circulating shares[83]. Risks and Challenges - The report includes a risk statement indicating that future plans and industry trends do not constitute a commitment to investors, highlighting the importance of investment risk awareness[3]. - The company faces industry policy risks related to environmental and safety regulations, which could affect continuous production[50]. - Currency fluctuation risks are significant as international sales constitute a large portion of total revenue, primarily settled in USD[51]. Financial Reporting and Accounting Policies - The company’s financial statements were approved by the board of directors on August 24, 2021[132]. - The company has not identified any significant doubts regarding its ability to continue as a going concern for the next 12 months[136]. - The company’s accounting policies are tailored to its operational characteristics, particularly in areas such as accounts receivable and inventory valuation[137]. - The company recognizes goodwill when the acquisition cost exceeds the fair value of identifiable net assets acquired[146].