SHEN TONG TECHNOLOGY(SH:605228)2021-04-28 16:00Financial Performance - In 2020, Shentong Technology achieved a net profit attributable to shareholders of 117,863,853.00 RMB, with a cumulative distributable profit of 187,829,397.42 RMB as of December 31, 2020[5]. - The company's operating revenue for 2020 was approximately ¥1.49 billion, a decrease of 6.53% compared to ¥1.59 billion in 2019[22]. - Net profit attributable to shareholders was approximately ¥117.86 million, reflecting a 3.00% increase from ¥114.43 million in 2019[22]. - The net profit after deducting non-recurring gains and losses was approximately ¥103.61 million, down 3.76% from ¥107.66 million in 2019[22]. - The company's total assets at the end of 2020 were approximately ¥1.92 billion, an increase of 4.02% from ¥1.84 billion at the end of 2019[22]. - Basic earnings per share for 2020 were ¥0.35, a 2.94% increase from ¥0.34 in 2019[23]. - The weighted average return on equity decreased to 12.80%, down 1.42 percentage points from 14.22% in 2019[23]. - The company's gross margin decreased by 2.54% due to the reclassification of sales-related warehousing and transportation costs to operating costs[51]. - The company reported a decrease in inventory to RMB 262,538,834.28 from RMB 271,919,874.49, which is a decline of approximately 3.5%[174]. - The net cash flow from operating activities increased by 54.43% to approximately ¥235.11 million, compared to ¥152.25 million in 2019[22]. Dividend Policy - The proposed cash dividend for 2020 is 0.85 RMB per 10 shares, totaling 35,700,000.00 RMB to be distributed to all shareholders[5]. - The company has a cash dividend policy that prioritizes stable and sustainable returns to investors, with a minimum cash distribution of 10% of distributable profits if no major investments are planned[81]. - In mature stages without significant capital expenditures, the company aims for cash dividends to constitute at least 80% of profit distribution[81]. - The company’s profit distribution plan for 2020 is subject to approval at the annual general meeting[86]. - The company has committed to maintaining a share repurchase policy that complies with legal and transparent conditions[85]. Research and Development - The company has a total of 336 patents, including 32 invention patents, 298 utility model patents, and 6 design patents, showcasing its strong R&D capabilities[39]. - The total R&D investment amounted to 55,011,745.21 yuan, representing 3.70% of the operating income[56]. - The company aims to enhance its R&D investment to optimize product structure and upgrade products, focusing on high-tech, high-value-added products[72]. - Research and development expenses were CNY 55,011,745.21 in 2020, down from CNY 70,302,973.89 in 2019, suggesting a potential shift in R&D focus[181]. Market and Competition - The company operates in the automotive parts sector, focusing on interior and exterior decorative components and engine peripheral parts[12]. - The automotive market in 2020 saw a total sales volume of 25,311,000 vehicles, with a year-on-year decline of 1.9%[63]. - The company is exposed to market competition risks due to a large number of domestic automotive parts manufacturers and the need for continuous technological investment[76]. - The company plans to expand its market presence in both domestic and international markets, particularly targeting the Japanese and European markets, while also entering the new energy vehicle market[72]. Corporate Governance - The company has established a comprehensive governance structure, including a board of directors with 9 members, of which 3 are independent directors[150]. - The company emphasizes compliance with laws and regulations, ensuring the protection of shareholder rights[111]. - The company has implemented strict management of insider information to prevent stock price fluctuations due to leaks[155]. - The company has established strict procedures for managing related party transactions and has not provided any external guarantees since its establishment[97]. Financial Health - The company's total liabilities decreased to RMB 935,466,283.60 from RMB 978,253,540.66, a reduction of approximately 4.4%[175]. - Shareholders' equity increased to RMB 981,263,942.16 from RMB 864,476,885.37, reflecting a growth of about 13.5%[175]. - The company’s retained earnings increased to RMB 326,459,139.95 from RMB 217,644,111.24, representing a growth of approximately 49.9%[175]. - The company reported a significant reduction in sales expenses to CNY 30,560,523.84 in 2020 from CNY 73,246,657.22 in 2019, indicating cost-cutting measures[181]. Operational Efficiency - The company employs a "sales-driven production" model, aligning production plans with monthly sales forecasts based on customer orders[36]. - The company has implemented strict supplier evaluation procedures, dynamically assessing supplier performance annually based on product quality and delivery times[32]. - The company has invested in advanced production equipment, including large-scale injection molding machines and various welding technologies, enhancing production efficiency[37]. - The company will implement lean production and automation strategies to improve operational efficiency and reduce costs[73]. Shareholder Relations - The company has committed to protecting the rights of minority shareholders in any profit distribution adjustments[86]. - The board must fully consider the opinions of minority shareholders and independent directors when adjusting profit distribution policies[86]. - The company must provide online voting options for minority shareholders during the general meeting to facilitate their participation[86]. - The company has established a structured decision-making process for profit distribution, involving the board and shareholders[83]. Compliance and Internal Controls - The company has committed to strengthening financial internal controls and preventing major shareholders from misappropriating company funds[98]. - The company did not report any major deficiencies in internal control during the reporting period[155]. - The audit report confirmed that the financial statements fairly reflect the company's financial position as of December 31, 2020[158]. - The company has no penalties from securities regulatory agencies in the past three years, indicating a clean compliance record[141].