SHANGGONG GROUP(SH:900924)2019-04-15 16:00Financial Performance - The company achieved a consolidated net profit of RMB 158,449,643.95 for the year 2018, with a net profit attributable to shareholders of RMB 140,828,047.20, representing a decrease of 28.69% compared to 2017[5]. - Operating revenue for 2018 was RMB 3,200,527,741.09, an increase of 4.42% from RMB 3,064,971,500.79 in 2017[22]. - The net cash flow from operating activities decreased by 32.20% to RMB 79,553,871.30 in 2018 from RMB 117,335,869.17 in 2017[22]. - The company's total assets increased by 11.90% to RMB 4,144,127,162.05 at the end of 2018, compared to RMB 3,703,515,071.60 at the end of 2017[22]. - The net assets attributable to shareholders rose by 3.15% to RMB 2,212,858,250.06 at the end of 2018, up from RMB 2,145,214,676.69 in 2017[22]. - Basic earnings per share decreased by 28.69% to RMB 0.2567 in 2018 from RMB 0.3600 in 2017[23]. - The weighted average return on net assets fell by 3.44 percentage points to 6.3561% in 2018, down from 9.8004% in 2017[23]. - The company did not distribute profits for 2018 due to negative distributable profits of RMB -110,993,832.78[5]. - The operating profit for the year was 200 million RMB, a decrease of 30.92%, mainly due to losses from Stoll and a reduction in compensation income from housing relocation[46]. - The net profit attributable to shareholders was 141 million RMB, down 28.69% year-on-year, with a 19.45% decline in net profit after excluding non-recurring gains and losses[46]. Revenue and Sales - In 2018, the company achieved total operating revenue of approximately 3.2 billion RMB, with a year-on-year growth of 10.5% in sales volume of sewing machinery[32]. - The company achieved a revenue of 3.2 billion RMB in 2018, representing a year-on-year growth of 4.42%, primarily driven by a 11.31% increase in sales of sewing and intelligent manufacturing equipment[46]. - The company achieved a sales target of 30 million RMB in the sofa and bag industry, with a 100% year-on-year growth in sales of DA and Baifu brand basic products[42]. Investments and Acquisitions - The company invested 130 million RMB to acquire a 65% stake in Tianjin Baoying Computer Machinery Co., which is expected to enhance its capabilities in software development and automatic sewing solutions[42]. - The company plans to invest 154 million RMB to establish an intelligent manufacturing base in Taizhou, Zhejiang, aimed at becoming the largest sewing machine production base in China[45]. - The company is constructing a smart product R&D center in Germany with an investment of 13.39 million euros, expected to be completed by the end of 2019[44]. - The company reported a net profit of 12,681 million RMB from Dukepu Aihua Co., with total assets of 191,230 million RMB and net assets of 87,448 million RMB[79]. Research and Development - The company’s R&D capabilities are being enhanced, with a focus on applying Industry 4.0 technologies to sewing equipment[35]. - Research and development expenses increased by 15.76% to CNY 97,647,657.57, representing 3.26% of total operating revenue[60]. - The total R&D investment, including capitalized expenses, reached CNY 104,415,686.51, with capitalized R&D accounting for 6.48% of total R&D expenditures[60]. - The company is committed to R&D, with ongoing projects including the development of various sewing machine controls and a cloud platform for garment customization[87]. Market Strategy and Expansion - The company is focusing on expanding its presence in the aerospace manufacturing sector, leveraging existing relationships with major clients[35]. - The company has implemented a multi-brand marketing strategy to strengthen its global market position in the sewing equipment sector[31]. - The company plans to significantly increase sales of mid-thick material machines in the bag and sofa categories in 2019, targeting substantial growth in KSL automation equipment sales as well[85]. - The company will continue to enhance its sales network in Southeast Asia, particularly in Vietnam, aiming to solidify its distributor network and increase local sales of the Baifu brand[85]. Financial Management and Compliance - The company has maintained compliance with all commitments made by its controlling shareholders and related parties during the reporting period[94]. - The company has not reported any major litigation or arbitration matters during the year[100]. - The company has not disclosed any significant related party transactions during the reporting period[102]. - The company has maintained compliance with environmental regulations and does not fall under the category of key pollutant discharge units[119]. Shareholder Structure and Governance - The total number of common shareholders at the end of the reporting period is 57,633, an increase from 55,234 at the end of the previous month[125]. - The largest shareholder, Shanghai Pukefei Investment Co., Ltd., holds 60,000,000 shares, representing 10.94% of the total shares, with a decrease of 789,457 shares during the reporting period[127]. - The company has no controlling shareholder or actual controller, as no single shareholder holds more than 30% of the shares[128]. - The board of directors consists of 9 members, including 3 independent directors, meeting the legal requirement of at least one-third independence[153]. Employee Management and Structure - The total number of employees in the parent company is 194, while the main subsidiaries employ 3,885, resulting in a total of 4,079 employees[147]. - The educational background of employees includes 814 with postgraduate or bachelor's degrees, 2,078 with associate degrees, and 1,187 with education below associate level[147]. - The company has implemented a performance assessment and compensation management system for employees during the reporting period[148]. - A training program was established to enhance the skills of young managers, including specialized training in sales and financial management[149].