TIANMA TECH(SH:603668)2020-02-27 16:00Financial Performance - The company's operating revenue for 2019 was approximately CNY 2.43 billion, representing a 41.72% increase compared to CNY 1.71 billion in 2018 [25]. - Net profit attributable to shareholders decreased by 26.01% to CNY 56.85 million from CNY 76.84 million in the previous year [25]. - The net cash flow from operating activities increased significantly by 202.52% to CNY 745.60 million, up from CNY 246.46 million in 2018 [25]. - The company's total assets grew by 23.49% to CNY 2.73 billion, compared to CNY 2.21 billion at the end of 2018 [25]. - The weighted average return on equity decreased to 5.35%, down 3.15 percentage points from 8.50% in 2018 [25]. - The company reported a significant increase in expenses related to the special aquatic feed segment, totaling CNY 71.20 million, which was an increase of CNY 7.46 million year-over-year [25]. - The company experienced a decline in basic earnings per share, which fell by 30.77% to CNY 0.18 from CNY 0.26 in 2018 [25]. - The net profit attributable to shareholders after deducting non-recurring gains and losses was CNY 42.58 million, a decrease of 33.98% from CNY 64.49 million in 2018 [25]. - The company reported a total of CNY 19.40 million in government subsidies recognized as non-recurring gains in 2019, compared to CNY 6.65 million in 2018 [28]. - The company's cash and cash equivalents decreased by CNY 205.73 million, a reduction of 37.22%, primarily due to the acquisition of Fujian Hualong Group Feed Co., Ltd. [55]. Strategic Developments - The company implemented a strategic focus on expanding its feed segment and entering the special aquatic product distribution and aquatic food sectors [25]. - The acquisition of 72% of Hualong Group's shares allowed the company to enter the livestock and poultry feed sector, contributing 31.03% to total revenue in 2019 [35]. - The company completed the acquisition of 90% of Xilong Food, enhancing its position in the seafood sales and food business, which represented 12.82% of total revenue in 2019 [35]. - The company aims to create the world's largest grilled eel platform, with its "Eel Hall" brand gaining consumer recognition [35]. - The company is expanding its animal health product series in Southeast Asia, aligning with its "Belt and Road" development strategy [37]. - The company aims to enhance procurement efficiency and reduce operational risks through its centralized procurement strategy, which is designed to maximize overall benefits [43]. - The company plans to enhance its technological development by establishing national-level research platforms and recruiting high-level talent, including postdoctoral researchers [126]. - The company intends to expand its business vertically and horizontally across the entire agricultural value chain, from raw material trading to food processing [122]. Research and Development - The company has launched 29 diverse animal health products, focusing on ecological formulations and nutritional health [37]. - The company has achieved significant technological advancements in its feed products, with some receiving national patents and awards [38]. - The company has developed 6 patented feed products for seedling stage fish, including specialized feeds for various fish species, contributing to its innovation in aquaculture [40]. - The company has received recognition for its contributions to the development of high-quality duck feed, achieving awards for its innovative projects in the industry [41]. - The company has established strategic partnerships with several universities and research institutions, enhancing its research and development direction and talent cultivation [61]. - The company invested 67.61 million CNY in research and development, which accounted for 2.78% of total operating revenue [100]. Market and Industry Trends - The global demand for animal-based food products is projected to double by 2050, with fish and dairy products expected to see a twofold increase [54]. - The overall market for aquatic product processing in China remains underdeveloped, with processing rates significantly below the global average, indicating substantial growth potential [54]. - The production of special aquatic feed in China increased from 752,400 tons in 2006 to 1,746,800 tons in 2018, with a compound annual growth rate of 7.3%, surpassing the industry average growth rate of approximately 5% during the same period [52]. - The company reported a 3.9% growth in the agricultural and sideline food processing industry in 2019, with stable aquatic product output around 64.5 million tons [67]. Corporate Governance and Compliance - The company has committed to not engaging in any business that competes with its listed operations, ensuring no direct or indirect competition from related parties [145]. - The commitment to avoid related party transactions is based on fair and reasonable principles, ensuring that any necessary transactions are conducted at market prices [146]. - The company has outlined specific measures to ensure compliance with legal and regulatory requirements regarding related party transactions [146]. - The company has maintained a good integrity status without any adverse credit issues during the reporting period [156]. - The company has no significant litigation or arbitration matters during the reporting period [156]. Social Responsibility and Environmental Initiatives - The company reported a total of 86.79 million RMB invested in poverty alleviation efforts during the reporting period [184]. - The company engaged in special poverty alleviation efforts, including donations totaling 1.4 million RMB to various charitable organizations [184]. - The company has prioritized hiring graduates from impoverished areas and registered impoverished individuals [187]. - The company emphasizes environmental protection as a key part of its sustainable development strategy, implementing various energy-saving measures [192]. - The company invested approximately 22.33 million yuan in the construction of three new wastewater treatment systems, which will meet the Class I discharge standards upon completion [193]. Financial Management and Investments - The total amount of convertible bonds issued by the company was CNY 305 million, with a face value of CNY 100 per bond [198]. - The company converted CNY 301,976,000 worth of convertible bonds into shares during the reporting period, resulting in 41,024,100 shares being issued [199]. - The company has a plan to issue convertible bonds and has committed to measures to offset any dilution of immediate returns [150]. - The company has a share reduction plan where, after the lock-up period, it can reduce its holdings by no more than 15% of the total shares held each year for two years [149].