FULONGMA(SH:603686)2022-04-11 16:00Financial Performance - In 2021, the company's operating revenue reached RMB 5.70 billion, a year-on-year increase of 4.75%[22]. - The net profit attributable to shareholders decreased by 23.13% to RMB 340.26 million, primarily due to the expiration of tax incentives and a decline in the gross margin of sanitation equipment[23]. - The net cash flow from operating activities fell by 86.19% to RMB 121.47 million, mainly due to a reduction in received payments[23]. - Basic earnings per share decreased by 22.64% to RMB 0.82, while the diluted earnings per share also fell by the same percentage[24]. - The total assets at the end of 2021 were RMB 5.59 billion, a year-on-year increase of 2.22%[22]. - The weighted average return on equity decreased to 11.65%, down 4.78 percentage points from the previous year[22]. Business Operations - The sanitation service business generated revenue of RMB 3.38 billion, an increase of 11.68%, accounting for 59.72% of total revenue[30]. - The sanitation equipment business revenue declined by 11.01% to RMB 2.11 billion, with a gross margin of 19.31%, down 6.40 percentage points[31]. - The company added new PPP project asset construction service revenue of RMB 149 million, representing 2.64% of total revenue[30]. - The company’s environmental service revenue reached 3.381 billion yuan in 2021, a year-on-year increase of 11.68%, with a gross margin of 23.29%, down 2.46 percentage points year-on-year[35]. - The company’s sanitation service operations covered 19 provinces and autonomous regions, serving nearly 64 million people with over 47,000 frontline employees[37]. Research and Development - The company completed 453 product optimization improvements in 2021 and announced 95 new products, including 28 new energy products[41]. - The company’s R&D efforts led to the completion of 11 patents, including 10 utility model patents and 1 design patent, focusing on autonomous innovation in solid waste disposal[38]. - Research and development expenses increased by 25.39% to 58 million RMB, indicating a focus on innovation[89]. - The company has a strong R&D capability, with a focus on electric, intelligent, and networked technologies, and has developed multiple self-researched leachate treatment and kitchen waste treatment equipment[80]. Market and Competitive Landscape - The company achieved a market share of 5.91% in the sanitation equipment sector, up 0.42 percentage points year-on-year, while the market share for innovative and high-end operational vehicles was 10.20%, down 0.70 percentage points[34]. - The sanitation service market has reached a marketization rate of over 70% in urban areas, indicating a shift from high growth to a focus on existing contracts[132]. - The competitive landscape of the sanitation service industry is evolving, with a market share of 11% held by the top 10 companies[131]. - The company is actively pursuing international markets and aims to introduce advanced foreign technologies to optimize its products[136]. Strategic Initiatives - The company plans to enhance production efficiency and quality by relocating its sanitation equipment production system to a new facility[31]. - The company aims to achieve a sales volume of new energy vehicles accounting for approximately 20% of total new car sales by 2025[57]. - The company is committed to high-quality development and strategic upgrades following its name change to Fulongma Group Co., Ltd. in December 2021[42]. - The company plans to establish a comprehensive waste management system, including the introduction of a waste classification system by 2025[57]. Environmental Responsibility - The company was listed as a key pollutant discharge unit in Fujian Province, highlighting its environmental responsibilities[196]. - The company’s wastewater treatment facility achieved compliance with discharge standards, with COD levels at 87 mg/L, below the limit of 450 mg/L[198]. - The company has implemented a self-monitoring plan for environmental compliance, ensuring regular testing of air and water pollutants[199]. - The company has upgraded its pollution control facilities to meet environmental protection requirements, ensuring effective operation and compliance[200]. Governance and Compliance - The company has established a robust governance structure, ensuring compliance with regulations and enhancing investor communication and transparency[160]. - The audit committee held 5 meetings during the reporting period, reviewing key financial reports including the 2021 Q1 and Q2 financial statements[177]. - The company has not been subject to penalties from securities regulatory agencies in the past three years[172]. - The internal control audit report received a standard unqualified opinion, indicating effective internal control practices[194]. Shareholder Engagement - The company plans to distribute at least 20% of the annual distributable profit as cash dividends over the next three years, prioritizing cash over stock dividends[185]. - The total number of shares held by directors and senior management at the end of the reporting period was 78,065,939, reflecting an increase of 469,450 shares during the year[165]. - The company reported a total of 170.95 million yuan allocated to the performance incentive fund for the year 2021, meeting the conditions for accrual[166]. - The company has established a performance evaluation mechanism for senior management, linking compensation to performance assessments conducted annually[191].