LOPAL(SH:603906)2021-03-26 16:00Dividend and Capital Distribution - The company plans to distribute a cash dividend of 1.77 CNY per 10 shares (including tax) and to increase capital by 4 shares for every 10 shares held[6]. - In 2020, the company distributed a cash dividend of 1.77 RMB per 10 shares, totaling 60,950,120.98 RMB, which is 30.05% of the net profit attributable to shareholders[168]. Financial Performance - The company's operating revenue for 2020 was ¥1,914,598,750.77, an increase of 11.77% compared to ¥1,712,963,224.81 in 2019[27]. - The net profit attributable to shareholders for 2020 was ¥202,826,646.36, representing a significant increase of 59.20% from ¥127,406,046.37 in 2019[27]. - The net cash flow from operating activities reached ¥305,464,155.50 in 2020, up 23.44% from ¥247,468,295.97 in 2019[27]. - The company's total assets increased by 36.24% to ¥2,955,909,162.14 at the end of 2020, compared to ¥2,169,687,372.78 at the end of 2019[27]. - Basic earnings per share for 2020 were ¥0.67, a 59.52% increase from ¥0.42 in 2019[28]. - The weighted average return on equity rose to 14.15% in 2020, an increase of 4.35 percentage points from 9.80% in 2019[28]. - The company reported a net profit of ¥58,871,020.41 in Q4 2020, with total revenue for the quarter at ¥544,370,534.43[30]. Audit and Compliance - The company has received a standard unqualified audit report from Zhongtianyun Accounting Firm[5]. - The company has confirmed no non-operating fund occupation by controlling shareholders or related parties[8]. - The company has not violated decision-making procedures for external guarantees[8]. - The company has confirmed that all board members attended the board meeting[5]. - The company’s internal control audit was conducted by Zhongtianyun Accounting Firm, with a remuneration of 100,000 RMB[191]. - The company has engaged Zhongtianyun Accounting Firm for three years, with an audit fee of 785,000 RMB for the current year[196]. Business Operations and Strategy - The company is focused on the development of environmentally friendly fine chemicals for automotive applications, including lubricants and engine coolants[38]. - The company has adopted a direct sales model for group clients and e-commerce channels, alongside third-party logistics for nationwide distribution[44]. - The company launched several model markets in Jiangsu and Shandong to enhance sales and improve the quality of its dealer network, aiming to replicate this model nationwide[56]. - The company invested in advertising across major platforms, including CCTV and high-speed rail, to enhance brand recognition, with plans for continued brand investment in 2021[59]. - The establishment of the Smart Operations Center in August 2020 allows for precise control and scheduling of production and logistics, improving service efficiency[60]. - The company’s new testing and evaluation platform, launched in October 2020, supports extensive internal and external testing services, enhancing its R&D capabilities[61]. - The company is expanding its focus into hydrogen and new energy sectors, aligning with industry trends towards renewable energy solutions[63]. - The company plans to actively extend its layout in the new energy sector, aligning with industry trends and future developments[65]. Research and Development - The company’s R&D expenses amounted to 72,261,807.66 RMB, up 7.89% from the previous year[66]. - The company has established strong product R&D capabilities and a nationwide sales network, positioning itself as a leading player in the automotive exhaust treatment industry[102]. - The company is committed to increasing R&D investment to meet market demands for energy conservation and emission reduction[99]. - The company has established a research and development strategy focused on enhancing independent innovation capabilities, resulting in 35 invention patents, 22 design patents, and 38 utility model patents as of December 31, 2020[105]. Market and Industry Trends - The market for automotive cooling liquids is expected to grow significantly due to the rapid increase in new energy vehicles in China[45]. - The company’s diesel engine exhaust treatment fluid is essential for diesel vehicles to meet the National VI emission standards, leading to significant market demand growth as these standards are implemented[48]. - In 2020, despite the challenges posed by the COVID-19 pandemic, the company maintained a rapid growth in business volume, particularly in the urea solution product line, which benefited from stricter environmental regulations[55]. - The demand for automotive lubricants is expected to grow rapidly due to the increasing number of vehicles and rising living standards in China[143]. Risks and Challenges - The company has detailed potential risks in the report, which can be found in the section discussing operational conditions[10]. - The company faces market competition risks in the automotive chemical products sector, particularly from multinational and state-owned enterprises[155]. - The company is exposed to raw material price fluctuation risks, as direct material costs significantly impact gross margin[157]. Shareholder Commitments and Governance - The company’s major shareholders, including Shi Junfeng and Zhu Xianglan, have committed to not transferring or managing their shares for 36 months post-IPO, ensuring stability in shareholding[1]. - The company has set a minimum selling price for shares post-lockup period, which cannot be lower than the IPO price, to protect investor interests[1]. - The company will announce any share reductions five trading days in advance, ensuring transparency in the market[2]. - The commitments are designed to protect the company and its investors from potential losses due to premature share sales[1]. - The overall strategy aims to enhance corporate governance and ensure long-term stability for the company post-IPO[2]. Subsidiaries and Investments - The company has established several wholly-owned subsidiaries, including Jiangsu Kelasu Environmental Technology Co., Ltd.[16]. - The company established a wholly-owned subsidiary, Jiangsu Botan Hydrogen Energy Technology Co., Ltd., with an investment of 100 million RMB to develop hydrogen fuel cell catalyst business[65]. - The company set up Jiangsu Lithium Source Battery Materials Co., Ltd. in August and Sichuan Lithium Source New Materials Co., Ltd. in October to expand production capacity for lithium iron phosphate battery materials and ternary cathode materials[65]. - The company acquired 70% of Jiangsu Ruifeng New Energy Technology Co., Ltd. for a cash consideration of 302.91 million RMB, approved by the board on June 27, 2018, and by the shareholders on July 13, 2018[180]. Financial Position and Cash Flow - The company reported a significant increase in cash and cash equivalents, totaling 909,297,579.74 CNY, which is 71.52% higher than the previous year[86]. - The company’s total assets increased by 71.52% compared to the previous year, with significant growth in cash and cash equivalents[86]. - The company reported a net cash flow from financing activities of 457,346,585.28 CNY, a significant improvement compared to the previous year[86]. - The company’s investment activities generated a net cash flow of -393,324,790.86 RMB, indicating a significant decrease compared to the previous year[66]. Production Capacity and Costs - The lubricating oil production capacity is designed at 100,000 tons with a utilization rate of 54.32%, while the diesel engine exhaust treatment liquid has a capacity of 220,000 tons and a utilization rate of 113.60%[121]. - The average price change for key raw materials showed a decrease of 14.39% for base oil and 21.74% for ethylene glycol, impacting the company's operating costs positively[126]. - The company has implemented a futures hedging strategy to mitigate risks associated with price fluctuations of ethylene glycol, a key raw material for its main products[128]. - The company has seen an increase in prepayments for major raw materials, including base oil and ethylene glycol, indicating a rise in production costs[2]. Future Outlook - The company plans to enhance its product quality and performance in the lubricating oil industry, driven by increasing environmental awareness and automotive standards[143]. - The company aims to become a leading international green chemical group by focusing on technology, scale, and management advantages[150]. - The company will continue to invest in R&D and global technical cooperation to enhance its market competitiveness[151]. - The company plans to strengthen brand promotion and ensure continuous sales growth across its product categories[151]. - The company plans to complete the construction of its new production capacity by December 2021, despite delays caused by the COVID-19 pandemic[121].