SGP(SH:603586)2020-07-27 16:00Financial Performance - The company's operating revenue for the first half of 2020 was approximately ¥675.58 million, a decrease of 14.75% compared to ¥792.43 million in the same period last year[20]. - The net profit attributable to shareholders for the first half of 2020 was approximately ¥87.97 million, down 14.55% from ¥102.95 million in the previous year[20]. - Basic earnings per share for the first half of 2020 were ¥0.44, down 8.33% from ¥0.48 in the same period last year[21]. - The operating profit for the same period was 106 million yuan, down 10.56% year-on-year[50]. - The total amount of non-recurring gains and losses for the reporting period is approximately 13.55 million, with a tax impact of -3.17 million[25]. - The total comprehensive income for the first half of 2020 was approximately ¥87.96 million, compared to ¥102.95 million in the same period of 2019, reflecting a decrease of 14.5%[120]. - The company reported a net profit of -118,754,088.00 for the current period, compared to a profit in the previous period, highlighting a challenging financial environment[136]. Cash Flow and Assets - The net cash flow from operating activities increased by 122.99% to approximately ¥201.50 million, primarily due to a reduction in cash paid for raw materials as a result of decreased production volume[20]. - The total assets at the end of the reporting period were approximately ¥2.63 billion, a decrease of 6.21% from ¥2.81 billion at the end of the previous year[20]. - Cash inflow from investment activities increased to CNY 667,913,493.97 in H1 2020, compared to CNY 462,378,007.49 in H1 2019, marking a growth of approximately 44.4%[128]. - The cash and cash equivalents at the end of H1 2020 stood at CNY 861,401,327.67, up from CNY 806,431,408.62 at the end of H1 2019, reflecting an increase of approximately 6.8%[128]. - Current assets totaled CNY 1,215,231,810.95 as of June 30, 2020, a decrease of 16.63% from CNY 1,457,527,100.72 at the end of 2019[116]. - The company's total revenue for the first half of 2020 was approximately ¥437 million, a decrease of 21.2% compared to ¥555 million in the same period of 2019[123]. Market and Operations - The company primarily engages in the research, production, and sales of friction materials and braking products, with a focus on automotive brake components, including over 6,400 types of brake pads and 4,100 types of brake discs[28]. - The company operates mainly in the foreign aftermarket (AM) market, which is the primary source of sales revenue and profit, with most products sold as ODM products to clients with their own brands[34]. - The company has established a procurement strategy that includes "inventory-based procurement" for bulk commodities and "order-based procurement" for hardware and packaging materials, ensuring cost optimization[29]. - The company has signed framework sales contracts with most clients, typically for one to five years, allowing for phased order placements based on client needs[35]. - The company’s OEM market clients are primarily automotive manufacturers, with production specifications determined by the clients[36]. Environmental and Social Responsibility - The company donated a total of RMB 1.73 million for poverty alleviation, including RMB 1 million to the Le Ling Charity Association and RMB 530,000 for medical assistance to 16 individuals[75]. - The company’s subsidiary, Jinan Golden Qilin Brake System Co., Ltd., was listed as a key pollutant discharge unit by the Jinan Ecological Environment Bureau[79]. - The company reported particulate matter emissions of 3.38 tons and volatile organic compounds (VOCs) emissions of 1.63 tons during the reporting period[79]. - The company has implemented various environmental protection measures, including the use of dust collectors and UV photolysis systems[81]. - The company completed the environmental protection self-inspection for the "Annual Production of 3.3 Million Sets of Automotive Brake Pads Technical Renovation Project" and received approval for solid waste inspection in May 2020[82]. Shareholder and Governance - No profit distribution or capital reserve fund increase is planned for the half-year period, with no dividends or stock bonuses proposed[65]. - The company has committed to not engage in any competitive activities that could harm its interests or those of its subsidiaries[67]. - Shareholders have committed to not transfer their shares for a period of 36 months following the company's successful listing[67]. - The company has established a lock-up period for shareholders, during which they cannot sell their shares, ensuring stability post-IPO[67]. - The company has committed to ensuring the accuracy and completeness of its prospectus and related disclosures, with legal liability for any false statements or omissions[68]. Risks and Challenges - The company has outlined potential risks in its operations, which are detailed in the discussion and analysis section of the report[6]. - The company faces risks related to product quality, export business, raw material price fluctuations, and exchange rate losses[59][60]. - The COVID-19 pandemic has caused temporary impacts on production and operations, with the extent of the impact depending on the progress and duration of pandemic control measures[61]. - Global automotive sales are expected to decline by 22% to 70.3 million units in 2020 due to the COVID-19 pandemic, with U.S. sales dropping by 26.6% to 12.5 million units[38]. Research and Development - The company has developed 249 brake material formulas and possesses a proprietary friction material formula system, enhancing its R&D capabilities[44]. - The company reported a significant increase in research and development expenses by 2.86% to CNY 25,499,886.22[51]. - The company has 249 friction material formulas, indicating a strong capability in product development and customization[28]. Financial Management - The company has committed to strict self-discipline regarding the consumption behavior of its directors and senior management, ensuring no misuse of company assets[69]. - The company will implement measures to ensure the effective execution of its compensation measures linked to performance[69]. - The company has reappointed Lixin Certified Public Accountants as its financial audit institution for the year 2020, with the management authorized to negotiate audit service fees based on market conditions[71]. - The company has established a stock incentive plan, ensuring that all disclosures are accurate and complete, with no misleading statements or omissions[70].