Haixia Environmental Protection(SH:603817)2021-04-08 16:00Financial Performance - The company reported a total distributable profit of RMB 496,835,531.33 as of December 31, 2020, with a proposed cash dividend of RMB 0.58 per share, resulting in a total cash dividend distribution of RMB 26,100,314.60[5]. - The cash dividend payout ratio for the year was 20.07%, based on a total share capital of 450,005,424 shares[5]. - The company's operating revenue for 2020 was CNY 732.80 million, representing a 14.40% increase compared to CNY 640.55 million in 2019[24]. - The net profit attributable to shareholders for 2020 was CNY 130.04 million, a slight decrease of 0.08% from CNY 130.14 million in 2019[24]. - The basic earnings per share for 2020 was CNY 0.2890, a decrease of 0.07% compared to CNY 0.2892 in 2019[24]. - The total profit for the year was CNY 153.99 million, an increase of 3.58% year-on-year[54]. - The net cash flow from operating activities increased by 41.71% to CNY 316.33 million in 2020 from CNY 223.23 million in 2019[24]. - The total assets at the end of 2020 were CNY 4.51 billion, reflecting a 13.56% increase from CNY 3.97 billion at the end of 2019[24]. - The company's inventory rose by 1,858.81 million yuan to 3,490.05 million yuan, mainly due to increased stock of raw materials and finished products[43]. - The company's long-term equity investments increased by 3,940.28 million yuan to 12,109.28 million yuan, primarily due to investments in a joint venture[43]. Operational Capacity and Projects - The company operates 22 wastewater treatment plants with a designed treatment capacity of 1.7 million tons per day, and an actual treatment capacity of 1.165 million tons per day[31]. - The company has invested in a sludge disposal project with a processing capacity of 150 tons per day, utilizing aerobic fermentation technology[32]. - The company has a garbage leachate treatment project in Fuzhou with a processing capacity of 2,600 tons per day, employing advanced treatment technologies[31]. - The project in Jin'an District has a planned processing capacity of 1 million tons/year for construction waste, while the second phase aims for 500,000 tons/year[33]. - The hazardous waste disposal project is designed to handle 38,000 tons/year of industrial and medical hazardous waste[34]. - The company processed 34.17 million tons of wastewater, a year-on-year increase of 14.97%[49]. - The company has a daily production capacity of 4,428.9 million tons of reclaimed water, with a utilization volume of 11.608 billion tons[42]. - The company’s wastewater treatment capacity reached 42,676.09 million tons/year with a utilization rate of 80.52%[87]. Financial Management and Investments - The company is under continuous supervision by its sponsor, with the supervision period lasting until the raised funds from the convertible bonds are fully utilized[21]. - The company has ongoing capital expenditures totaling ¥1,141,299,200.00, with significant investments in various PPP projects, including ¥61,983,984.01 for the Fuzhou Floating Village Wastewater Treatment Plant Phase II[89]. - The company reported a 41.24% increase in income tax expenses, totaling 30.44 million yuan, primarily due to the profitability of the newly acquired Fujian Liyang Environmental Co., Ltd.[72]. - The company’s long-term equity investments increased by 48.23% to 121.09 million yuan, mainly due to investments in affiliated companies[81]. - The company’s financial expenses increased by 16.06% to 62.58 million yuan, mainly due to financing through loans and short-term financing notes[72]. Compliance and Governance - The company has received a standard unqualified audit opinion from the accounting firm Xinyong Zhonghe[4]. - The company’s board of directors and supervisory board have confirmed the authenticity and completeness of the annual report[7]. - The company has not violated any decision-making procedures regarding external guarantees[7]. - The company has not reported any instances of more than half of the directors being unable to guarantee the authenticity of the annual report[7]. - The company has committed to ensuring that the prospectus for its initial public offering (IPO) does not contain false records, misleading statements, or significant omissions[128]. - The company guarantees to compensate investors for losses incurred due to any false records or misleading statements in the IPO prospectus, with compensation procedures starting within 3 working days of the regulatory authority's recognition[129]. Market and Industry Trends - The company aims to enhance its core competitiveness in environmental governance by expanding its business from traditional wastewater treatment to comprehensive water environment management[31]. - The water environment governance industry is characterized by stability in demand, with less sensitivity to economic cycles[38]. - The company’s wastewater treatment capacity is expected to expand in response to increasing regulatory requirements and population growth[39]. - The company is adapting to industry trends that favor integrated solutions over traditional project-based competition, enhancing its competitive edge[98]. - The company is actively investing in new technologies and expanding its market presence through strategic acquisitions and partnerships[92][97]. Risks and Challenges - The company has outlined potential risks in its future development strategies, which are detailed in the "Discussion and Analysis of Operating Conditions" section[8]. - The company faces risks related to delayed price adjustments for wastewater treatment services, which could lead to decreased profitability if operational costs rise without timely compensation[108]. - The company acknowledges the risk of declining capacity utilization rates due to new projects not reaching full operational capacity initially, which may impact overall profit margins[109]. - The company has a large accounts receivable balance, typically taking 2-3 months to collect, which may lead to cash flow challenges despite a low risk of bad debts[109]. Shareholder Commitments and Stock Management - The company has established a three-year dividend plan (2020-2022) to ensure the continuity and stability of its profit distribution policy[113]. - The company will not reduce its holdings of Haixia Environmental shares by more than 10% within 12 months after the lock-up period ends[120]. - The company will ensure that the price of any shares sold after the lock-up period will not be lower than the initial issue price, adjusted for any corporate actions[120]. - The company has committed to fair and reasonable pricing principles in related party transactions to protect the rights of non-related shareholders[136]. - The company will disclose any share repurchase plans and must comply with relevant laws and regulations[124]. Environmental Compliance - The company is committed to adhering to environmental regulations and standards set by local authorities[171]. - The company has maintained compliance with environmental regulations, with no pollution incidents reported during the reporting period[177]. - The company has implemented strict monitoring of pollutants, ensuring real-time data is available to environmental authorities[180]. - The report includes detailed pollutant discharge data for various treatment plants, highlighting compliance and areas for improvement[172].