Original(SH:603991)2022-04-26 16:00Financial Performance - The net profit attributable to the parent company's shareholders for 2021 was -53.43 million RMB, indicating a loss compared to the previous year[6]. - The parent company achieved a net profit of -4.86 million RMB, with a total distributable profit at the end of the year amounting to 39.46 million RMB[6]. - The company will not distribute profits or increase capital reserves due to the negative net profit for the year, in line with its articles of association[6]. - The company achieved operating revenue of CNY 128.14 million in 2021, a decrease of 58.84% compared to the previous year[22]. - The net profit attributable to shareholders was CNY -53.43 million, representing a decline of 11.13% year-over-year[30]. - The net profit attributable to shareholders, excluding non-recurring gains and losses, was CNY -56.64 million, down 9.01% from the previous year[30]. - The total assets decreased by 24.92% to CNY 429.25 million at the end of 2021 compared to the end of 2020[22]. - The company reported a significant decrease in net assets attributable to shareholders, down 14.40% to CNY 317.59 million at the end of 2021 compared to the end of 2020[22]. - The cash flow from operating activities was CNY 110.30 million, an increase of 64.65% compared to 2020[22]. Market and Industry Challenges - The company faced challenges from increased competition in the industry and adverse effects from international commodity price rises and sporadic COVID-19 outbreaks[30]. - The overall growth of the cable materials market in 2021 did not exceed 2%, indicating a slow growth rate due to macroeconomic weakness and manufacturing capacity reduction[32]. - The prices of key raw materials, such as EVA and PE resins, increased by over 50% during the year, significantly raising production costs for the company[32]. - The company faced substantial repayment pressure and refinancing difficulties, leading to insufficient operating cash flow and a reduction in revenue[32]. Operational Adjustments - The company focused on adjusting its customer structure, targeting high-quality clients while reducing business volume from low-margin clients[30]. - The company implemented measures to strengthen internal management and control costs to mitigate the decline in net profit[30]. - The company optimized its customer structure by focusing on high-margin clients, resulting in a noticeable decline in operating income compared to the previous year[34]. - The company implemented measures to enhance liquidity, including locking in procurement costs and extending supplier payment terms[34]. Research and Development - The company applied for 82 invention patents and 2 utility model patents, with 35 invention patents granted as of December 31, 2021, showcasing its strong R&D capabilities[39]. - The company developed low-smoke halogen-free flame-retardant materials for 5G optical cables, which have been recognized by major optical cable manufacturers and are now in mass production[41]. - The company collaborated with Shanghai Cable Research Institute to develop cable materials for third-generation nuclear power plants, achieving international leading technical performance[41]. - The company is positioned as a leading enterprise in the domestic market for environmentally friendly low-smoke halogen-free polyolefin materials used in electric cables, focusing on high-end applications[79]. Governance and Compliance - The company has established a governance structure that complies with relevant laws and regulations, ensuring the protection of shareholder rights and interests[120]. - The company actively engages with investors through various channels to enhance communication and maintain investor rights[121]. - The company has a strong emphasis on corporate governance, with independent directors playing a crucial role in oversight[131]. - The company received administrative penalties from the Shenzhen Securities Regulatory Bureau on January 6, 2022, including corrective measures and warning letters for certain individuals[142]. Risk Management - The company emphasizes the importance of risk awareness regarding forward-looking statements in the report[7]. - The report includes a detailed description of potential risks faced by the company in the management discussion and analysis section[9]. - The company faces risks related to the potential loss of core technical personnel and the leakage of proprietary technology, which could impact its R&D capabilities[111]. - The company is exposed to risks from fluctuations in raw material prices, particularly those linked to petroleum products, which could affect operational stability[112]. Employee and Management Structure - The total number of employees in the parent company and major subsidiaries is 132, with 78 in production, 7 in sales, 14 in technology, 4 in finance, and 29 in administration[153]. - The company has a training program focused on enhancing professional skills for technical and sales personnel, as well as leadership training for core positions[156]. - The company established a competitive and equitable salary system, adjusting salaries annually based on market levels[155]. - The company plans to continue attracting high-end talent to strengthen its technical team in response to market demands[69]. Environmental Compliance - The company has implemented effective pollution control measures, ensuring that emissions comply with national regulations, but stricter future environmental standards may increase operational costs[116]. - The company adhered to environmental regulations and did not face any penalties for violations during the reporting period[166]. - The company’s production processes generated minimal pollutants, and all environmental monitoring results were compliant with regulations[167]. Strategic Focus - The company aims to enhance its market presence through strategic partnerships and potential acquisitions in the future[132]. - The company plans to enhance its product structure and expand into new business areas, particularly in the electrical equipment and power markets, while also exploring international market opportunities[109]. - The company is positioned to benefit from the national policies promoting the development of 5G and smart communication networks, which present numerous opportunities for the polymer materials market[77].