LONCIN(SH:603766)2020-04-27 16:00Financial Performance - The company's operating revenue for 2019 was CNY 1,065,040.97 million, a decrease of 4.94% compared to 2018[26]. - The net profit attributable to shareholders for 2019 was CNY 62,284.72 million, down 32.25% from the previous year[26]. - The net cash flow from operating activities was CNY 110,628.92 million, reflecting a decline of 20.23% year-on-year[26]. - The basic earnings per share for 2019 was CNY 0.30, a decrease of 31.82% compared to 2018[26]. - The weighted average return on equity decreased to 9.35%, down 4.83 percentage points from 2018[26]. - The total assets at the end of 2019 were CNY 1,313,115.85 million, an increase of 9.59% from the end of 2018[26]. - The net profit attributable to the parent company was 623 million yuan, a decline of 32.25%, while the net profit after deducting non-recurring items was 472 million yuan, down 36.21%[66]. - The comprehensive gross profit margin improved by 0.81 percentage points to 19.32%[66]. Dividend Policy - The proposed cash dividend is CNY 1.00 per 10 shares, totaling CNY 205,354,185.00, which accounts for 32.97% of the net profit attributable to shareholders in 2019[6]. - The company has a cash dividend policy that mandates a minimum of 10% of the distributable profit to be paid as cash dividends each year[184]. - The company did not distribute any dividends in 2018, focusing instead on share repurchase[184]. - The total number of shares for cash dividend calculation in 2019 is 2,053,541,850[185]. - The company has not proposed any cash profit distribution plan for the reporting period despite having positive distributable profits[187]. - The cash dividend distribution policy is subject to the company's annual profit status and future funding plans[184]. - The company has not engaged in cash buybacks that count towards cash dividends[187]. Audit and Compliance - The company has received a standard unqualified audit report from Xinyong Zhonghe Accounting Firm[5]. - The company’s financial report has been declared accurate and complete by its management[5]. - The company has confirmed that there are no violations in decision-making procedures for external guarantees[9]. - The company adjusted its financial reporting to comply with new financial instrument standards effective January 1, 2019, impacting various asset classifications[197]. - The company has complied with the revised financial statement formats issued by the Ministry of Finance in 2019, ensuring accurate reporting for the fiscal year[200]. Market and Industry Position - The company operates in the machinery manufacturing industry, focusing on motorcycles, engines, and new energy vehicles[36]. - The motorcycle industry in China achieved a total sales volume of 17.13 million units in 2019, a year-on-year increase of approximately 10%[44]. - The company ranked second in total production and sales volume in the motorcycle industry and first in export revenue[44]. - The company is actively upgrading to new energy commercial vehicles, having obtained production qualifications for plug-in hybrid models in October 2019[48]. - The market for large-displacement motorcycles in China is expected to grow, with only 3% penetration in 2019, indicating significant future potential[44]. - The company anticipates continued industry leadership in the motorcycle and engine business, driven by consumer trends towards larger displacement motorcycles[148]. Research and Development - The company has developed a range of UAV products based on the VX-2 platform, including the XV-3, XV-5, and XV-6 models[62]. - The company holds a total of 1,920 patents, including 277 invention patents, with 289 new patents added during the reporting period[63]. - The company has established a "Group Technology Center + Division Engineering Research Institute" R&D structure with over 1,200 R&D personnel[52]. - Research and development expenses totaled 307.09 million RMB, representing a 26.45% increase compared to the previous year[91]. - Total R&D investment reached 381.38 million RMB, which is 3.58% of the operating revenue[92]. - The company launched 20 major R&D projects during the reporting period, with 7 projects in motorcycles and engines successfully launched[93]. Cash Flow and Investments - The company achieved operating cash inflow of 1.11 billion yuan during the reporting period[66]. - Net cash flow from operating activities decreased by CNY 280.60 million, a decrease of 20.23%, primarily due to reduced export tax rebates and increased tax payments[80]. - Net cash flow from investing activities decreased by CNY 1,101.99 million, a decrease of 795.07%, mainly due to increased purchases of government bonds and payments related to acquisitions[80]. - Net cash flow from financing activities increased by CNY 1,471.84 million, a growth of 171.47%, primarily due to new financing borrowings and reduced payments for bank acceptance guarantees[80]. - The company’s investment activities resulted in a net cash outflow of 1,240.60 million RMB, primarily due to increased purchases of government bonds and payments related to acquisitions[96]. Risks and Challenges - The company emphasizes the importance of objective conditions for future plans and strategies, warning investors of potential risks[7]. - The company’s future development may face risks as detailed in the report's fourth section[9]. - The company faces risks from macroeconomic changes, with 32.53% of revenue dependent on its top five customers, indicating a reliance risk[179]. - As of now, the controlling shareholder has pledged 99.94% of its shares, raising concerns about its ability to meet obligations[181]. Subsidiaries and Acquisitions - The company has a total of 27 subsidiaries, contributing to its diversified business strategy[118]. - The company completed the acquisition of Jinye Machinery on April 9, 2019, and it has been included in the consolidated financial statements since May 2019[110]. - The company acquired a 66% stake in Zunyi Jinye Machinery Foundry Co., Ltd. for a total consideration of RMB 429 million[110]. - The company established a wholly-owned subsidiary in Vietnam with a total investment not exceeding USD 12 million to enhance global operations[112].