SHEN TONG TECHNOLOGY(SH:605228)2022-08-22 16:00Financial Performance - The company's operating revenue for the first half of 2022 was ¥592,171,663.79, a decrease of 10.51% compared to ¥661,688,061.15 in the same period last year[19]. - The net profit attributable to shareholders for the first half of 2022 was ¥18,428,385.87, down 64.14% from ¥51,394,770.70 in the previous year[19]. - The net profit attributable to shareholders after deducting non-recurring gains and losses was ¥10,419,457.03, a decline of 77.34% compared to ¥45,991,561.12 in the same period last year[19]. - The net cash flow from operating activities was ¥36,840,199.09, a decrease of 60.87% from ¥94,155,486.17 in the previous year[19]. - Basic earnings per share decreased by 69.23% to CNY 0.04 compared to CNY 0.13 in the same period last year[20]. - Diluted earnings per share also decreased by 69.23% to CNY 0.04 from CNY 0.13 year-on-year[20]. - The weighted average return on equity fell by 2.55 percentage points to 1.26% from 3.81% in the previous year[20]. - The company reported a significant decline in demand due to the impact of the COVID-19 pandemic on downstream customers[20]. - The company reported a total profit of RMB 18,509,630.75, down 67.7% from RMB 57,352,436.19 in the first half of 2021[118]. - The financial expenses showed a net income of RMB -3,370,763.69, compared to RMB -2,007,605.43 in the previous year, indicating a higher financial cost[117]. Assets and Liabilities - The net assets attributable to shareholders at the end of the reporting period were ¥1,443,645,872.85, an increase of 2.58% from ¥1,407,370,586.62 at the end of the previous year[19]. - Total assets at the end of the reporting period were ¥2,086,771,962.20, reflecting a growth of 3.38% from ¥2,018,586,791.22 at the end of the previous year[19]. - The company's cash and cash equivalents decreased by 43.23% to ¥204,903,526.82 from ¥360,944,024.68 in the previous year, mainly due to expenditures on financial products[45]. - The total current assets increased from ¥1,105,357,794.08 to ¥1,132,752,282.97, an increase of about 2.1%[112]. - Total liabilities increased from ¥641,748,011.12 to ¥643,126,089.35, an increase of about 0.2%[110]. - The total owner's equity at the end of the current period is approximately ¥1.44 billion, indicating a growth from the previous period[132]. Research and Development - The company has successfully developed new technologies such as a lightweight polycarbonate window and a new motor stator skeleton technology to meet the trend of automotive electrification[29]. - The company is focusing on the development of intelligent automotive technologies, including a 3D facial recognition algorithm and a multifunctional smart door lock[38]. - The company has established stable partnerships with major automotive manufacturers, including SAIC-GM and BMW, enhancing its profitability and risk resistance[32]. - The company holds a total of 448 patents, including 53 invention patents, indicating strong technological capabilities[35]. - The company's research and development expenses increased by 20.57% to ¥36,375,577.59 from ¥30,170,230.53 in the previous year[43]. Market and Industry Trends - The company anticipates that the total automotive sales in China for 2022 will reach approximately 27 million units, a year-on-year increase of about 3%[28]. - The government has implemented policies to stimulate consumption, including a halving of the vehicle purchase tax, which is expected to further boost market activity[27]. - In June, the automotive industry saw production and sales recover, with production reaching 2.499 million vehicles and sales at 2.502 million vehicles, representing a month-on-month increase of 29.7% and 34.4% respectively[27]. Operational Challenges - The company has faced challenges such as raw material price increases and supply chain disruptions, impacting its operational performance[37]. - The company is under pressure from intense market competition, particularly from foreign and joint-venture firms with greater market share[53]. - The company is exposed to raw material price volatility, particularly for plastic particles, which significantly affect production costs[54]. - The company’s gross margin is at risk due to the competitive pricing pressures from automotive manufacturers[55]. Corporate Governance and Compliance - Liu Jianqiang resigned as the supervisor and chairman of the supervisory board due to personal reasons, with Wu Jinli elected as a new supervisor and Zhang Xi elected as the chairman of the supervisory board[61][62]. - The company has completed the necessary legal procedures for its shareholder meetings, ensuring compliance with relevant regulations[60]. - The company has implemented a restricted stock incentive plan for 2021, with relevant announcements made on December 25, 2021, and subsequent adjustments and grants disclosed in early 2022[64][65]. Shareholder and Equity Management - The company distributed a cash dividend of ¥0.70 per 10 shares, totaling ¥29,718,500.00, based on a total share capital of 424,550,000 shares[40]. - The top five customers accounted for 71.89% of the company's total revenue, indicating a high customer concentration risk[54]. - The company has established measures to ensure the fulfillment of commitments related to compensating diluted immediate returns[75]. - The company will publicly disclose reasons for not taking stabilization measures if applicable, and apologize to shareholders and public investors[75]. Financial Reporting and Accounting Policies - The company adheres to the accounting standards set by the Ministry of Finance, ensuring the financial statements reflect a true and complete picture of its financial status[144]. - The company’s financial statements are prepared based on the principle of continuous operation[141]. - The company recognizes investment income based on cash dividends declared by the invested entity[177]. - The company uses a perpetual inventory system for inventory management[174].