SKSHU(SH:603737)2020-04-09 16:00Financial Performance - The company's operating revenue for 2019 was CNY 5,972,263,435.78, representing a 66.64% increase compared to CNY 3,584,016,773.57 in 2018[20] - The net profit attributable to shareholders of the listed company reached CNY 406,143,739.38, an increase of 82.55% from CNY 222,488,028.71 in the previous year[20] - The net profit after deducting non-recurring gains and losses was CNY 356,633,984.00, up 89.06% from CNY 188,635,334.28 in 2018[20] - The net cash flow from operating activities was CNY 399,892,555.24, a 49.92% increase compared to CNY 266,731,620.44 in 2018[20] - The total assets at the end of 2019 were CNY 5,675,296,091.06, reflecting a 79.28% increase from CNY 3,165,604,967.53 at the end of 2018[21] - The net assets attributable to shareholders of the listed company were CNY 1,724,914,433.56, a 29.18% increase from CNY 1,335,331,407.00 at the end of 2018[21] - Basic earnings per share for 2019 were CNY 2.18, an increase of 83.19% compared to CNY 1.19 in 2018[22] - The weighted average return on equity rose to 23.61%, an increase of 5.3 percentage points from 18.31% in 2018[22] Dividend and Capital Plans - The company plans to distribute a cash dividend of CNY 6.60 per 10 shares, totaling CNY 122,909,141.52, which is 30.26% of the net profit for the year[5] - The company intends to increase its total share capital by 74,490,389 shares through capital reserve conversion, resulting in a new total of 260,716,361 shares[5] - The company plans to distribute at least 20% of its distributable profits as cash dividends annually, contingent on profitability and cash flow conditions[146] - In mature stages without significant capital expenditures, the cash dividend proportion should be at least 80% of the profit distribution; if there are major expenditures, it should be at least 40%[147] Market and Industry Insights - In 2019, the total output of the paint industry in China was 24.388 million tons, a year-on-year increase of 2.6% from 23.7707 million tons in 2018[35] - The main business revenue for the paint industry in 2019 was 313.232 billion yuan, a slight decrease of 0.6% compared to 315.011 billion yuan in the previous year[35] - The total profit for the paint industry reached 22.953 billion yuan in 2019, reflecting a year-on-year growth of 9.4% from 20.980 billion yuan in 2018[35] - The ongoing urbanization in China and government policies on old community renovations are expected to create new market opportunities for the paint industry[36] Research and Development - The company has over 1,500 R&D and technical personnel, with 27 new graduates from chemical and related fields recruited in 2019[42] - The company invested a total of 130.33 million yuan in R&D in 2019, accounting for 2.18% of consolidated revenue[104] - The company submitted 31 patent applications in 2019, including 3 utility model patents and 6 invention patents[104] - The company is focusing on the development of water-based and UV coatings, with a gradual increase in the proportion of water-based products[102] Risk Management - The company has outlined various risks and countermeasures in its report, emphasizing the importance of investor awareness regarding investment risks[7] - The company is exposed to raw material price volatility, with over 90% of its main business costs tied to materials like emulsions and resins, and will enhance price trend analysis to manage this risk[140] - The company has implemented strict credit policies for large real estate developers to manage accounts receivable risks, ensuring timely collection[141] Corporate Governance and Compliance - The company has received a standard unqualified audit report from its accounting firm, ensuring the accuracy and completeness of the financial report[4] - The company has committed to reducing related party transactions and ensuring they are conducted at fair market prices[162] - The company has established a performance commitment period for the target company from 2018 to 2020, with specific profit targets set for each year[162] Social Responsibility and Environmental Commitment - The company has initiated various public welfare activities, enhancing its brand image and social responsibility[59] - The company is committed to ensuring compliance with environmental protection standards in its operations[200] - The company has implemented pollution prevention facilities to meet environmental discharge standards[200] - The company invested a total of RMB 667.91 million in poverty alleviation efforts during the reporting period[195] Strategic Partnerships and Market Expansion - The company signed strategic cooperation agreements with top 10 domestic real estate companies, enhancing its market share in the real estate sector[56] - The company is expanding its e-commerce presence, collaborating with platforms like Tmall and JD, and has seen significant sales growth in the online market[57] - The company has established long-term partnerships with universities and research institutions, enhancing its R&D capabilities[42] Product Development and Innovation - The company launched 102 new products and optimized 159 existing products in 2019, enhancing its product line significantly[55] - The company developed a "六位一体" (six-in-one) green building solution, integrating paint, insulation, waterproofing, flooring, substrates, and construction services[55] - The company is committed to environmental development, focusing on providing eco-friendly and healthy paint products[104] Financial Management - The company has a plan to ensure compliance with legal requirements regarding the issuance of shares and investor compensation in case of losses due to false prospectus[157] - The company has established a cash management framework to ensure daily operations and fund safety while allowing for the rolling use of funds[183] - The company has no overdue guarantees provided to debtors with asset-liability ratios exceeding 70%[180]