Lily Group(SH:603823)2022-08-25 16:00Financial Performance - The company's operating revenue for the first half of 2022 was CNY 1,387,108,064.77, representing a 12.08% increase compared to CNY 1,237,595,954.37 in the same period last year[17]. - The net profit attributable to shareholders decreased by 5.30% to CNY 148,807,892.89 from CNY 157,131,249.92 year-on-year[17]. - Basic earnings per share decreased by 6.00% to CNY 0.47 from CNY 0.50 in the same period last year[18]. - The total profit for the first half of 2022 was CNY 185,483,927.32, a decrease of 9.79% from CNY 205,612,670.71 in the same period of 2021[124]. - The total comprehensive income for the first half of 2022 was CNY 154,821,425.02, a decrease of 10.67% from CNY 173,375,845.84 in the same period of 2021[125]. - The company reported a decrease in minority shareholders' profit to CNY 5,964,823.53 from CNY 16,253,998.12 in the previous year[125]. - The company reported a net cash outflow from investment activities of -123,252,058.42 RMB in H1 2022, slightly worse than -120,457,486.02 RMB in H1 2021[131]. - The total cash outflow for the company in H1 2022 was -185,183,592.11 RMB, worsening from -35,384,009.99 RMB in H1 2021, indicating increased financial strain[132]. Cash Flow and Liquidity - The net cash flow from operating activities turned negative at CNY -7,438,277.17, compared to a positive CNY 85,122,871.55 in the previous year[17]. - The company's cash flow from operating activities showed a net outflow of CNY 7,438,277.17, a significant change from the previous year's inflow of CNY 85,122,871.55[38]. - Cash and cash equivalents decreased to RMB 186,918,963.73 from RMB 395,743,146.96, representing a decline of approximately 52.8%[115]. - The company's cash and cash equivalents at the end of H1 2022 stood at 167,106,562.13 RMB, down from 364,881,166.18 RMB at the end of H1 2021, a decrease of approximately 54.2%[131]. - Cash outflow from operating activities rose to 753,084,288.59 RMB in H1 2022, compared to 623,127,536.10 RMB in H1 2021, marking an increase of about 20.9%[130]. Assets and Liabilities - The total assets increased by 4.81% to CNY 3,630,869,181.10 from CNY 3,464,294,671.59 at the end of the previous year[17]. - Accounts receivable increased by 46.62% to CNY 704,121,153.65, attributed to increased sales in the second quarter[40]. - Total liabilities increased to CNY 883,075,577.87 from CNY 834,910,592.75, representing a rise of 5.8%[121]. - The company's total assets as of June 30, 2022, were CNY 2,765,753,568.32, compared to CNY 2,646,569,494.27 at the beginning of the year, indicating a growth of 4.5%[121]. Research and Development - The company has invested over 40 million in experimental equipment for R&D, with a laboratory area exceeding 5,000 square meters[30]. - Research and development expenses for the first half of 2022 were CNY 44,201,069.88, slightly down from CNY 45,020,967.73 in the same period last year[123]. - The company is focusing on enhancing its technological capabilities to improve operational efficiency and product offerings[143]. Environmental and Safety Measures - The company has implemented high-standard environmental protection measures, including RTO engineering and anaerobic waste gas treatment[32]. - The company has established safety production management systems to mitigate risks associated with the handling of hazardous chemicals[52]. - The company has committed to enhancing its environmental protection management and ensuring compliance with pollution discharge standards[62]. - Baihehua has installed online monitoring systems for wastewater and part of the gas emissions, ensuring compliance with environmental standards[71]. Shareholder and Corporate Governance - The company has committed to a long-term share lock-up period of 36 months post-IPO, during which no shares will be transferred or managed by others[84]. - The controlling shareholder, Baihehua Holdings, plans to maintain its controlling position and may consider limited share reductions after the lock-up period, with a maximum of 10% of shares held being sold annually[89]. - The company has ensured that neither it nor its controlling shareholders will engage in any business that competes with its operations during their tenure as shareholders[90]. - The company has committed to measures to compensate for the dilution of immediate returns from the public offering of shares[92]. Market and Competitive Landscape - The company faces risks from intense market competition in the organic pigment industry, which is characterized by a high number of small enterprises and severe product homogeneity[46]. - The company’s performance is directly linked to the economic cycles of downstream industries such as inks, coatings, and plastics, which may lead to periodic demand fluctuations[48]. - The company plans to continue expanding its market presence and investing in new product development to drive future growth[120]. Related Party Transactions - The company expects 2022 annual related party transactions to include sales of pigments amounting to CNY 720 million and sales of intermediates amounting to CNY 60 million[94]. - The total amount of related party transactions reached RMB 312,984,955.78 in the first half of 2022[96]. - The company has committed to avoid and reduce related party transactions, ensuring fair pricing in any unavoidable transactions[92]. Financial Instruments and Accounting Policies - The group’s financial instruments are classified based on their characteristics, with specific criteria for recognition and measurement[182]. - The group recognizes gains or losses from financial assets measured at fair value through other comprehensive income, with specific conditions for initial measurement and subsequent recognition[184]. - The group applies the effective interest method to recognize interest income, with adjustments for credit impairment on financial assets[185].