红棉股份(000523) - 2019 Q4 - 年度财报

Important Notice, Table of Contents, and Definitions This section provides crucial notices, the complete table of contents for the annual report, and definitions of key terms to ensure clear understanding Important Notice The Board of Directors, Supervisory Board, and senior management guarantee the truthfulness, accuracy, and completeness of the annual report, highlighting the progress of the Guangzhou headquarters' Chebei plot land reserve - Company Board of Directors, Supervisory Board, and senior management guarantee the truthfulness, accuracy, and completeness of the annual report content[5] - Investors are specifically reminded to pay attention to the progress of the Guangzhou headquarters' Chebei plot land reserve[7] 2019 Profit Distribution Plan | Indicator | Amount (incl. tax) | | :--- | :--- | | Cash dividend per 10 shares | 0.2 yuan | Table of Contents This section lists the complete directory structure of the annual report, covering all chapters from company profile to financial reports and reference documents Definitions This section defines common terms used in the report, including company names, related parties, stock exchanges, and key technical terms like MES, to ensure clear understanding of the report content - MES refers to Methyl Ester Sulfonate, a green surfactant derived from natural oils and fats[13] Company Profile and Key Financial Indicators This section provides the company's basic information, contact details, disclosure channels, registration changes, auditor information, and key financial performance metrics for the reporting period Company Information This section provides the company's basic registration information, including stock ticker, code, listing exchange, legal representative, registered and office addresses, website, and email Company Basic Information | Indicator | Content | | :--- | :--- | | Stock Abbreviation | Guangzhou Langqi | | Stock Code | 000523 | | Listing Exchange | Shenzhen Stock Exchange | | Legal Representative | Zhao Biqiu | | Registered Address | No. 128 Huangpu Avenue East, Tianhe District, Guangzhou | Contact Persons and Information This section lists the names, contact addresses, phone numbers, faxes, and email addresses of the company's Board Secretary and Securities Affairs Representative for investor communication Contact Information | Position | Name | Contact Number | | :--- | :--- | :--- | | Board Secretary | Wang Zhigang | 020-82162933 | | Securities Affairs Representative | Zhang Xiaomin | 020-82162933 or 020-82161128 ext. 6228 | Information Disclosure and Document Availability This section specifies the company's designated information disclosure media, the website of the China Securities Regulatory Commission, and the location where the annual report is available, ensuring transparency - The company's designated information disclosure media are "China Securities Journal" and "Securities Times"[18] - The website designated by the China Securities Regulatory Commission for publishing the annual report is http://www.cninfo.com.cn[18](index=18&type=chunk) Changes in Registration This section states that the company's organizational code and main business have not changed since listing, and details the history of changes in controlling shareholders, with Guangzhou Light Industry & Trade Group Co., Ltd. becoming the largest shareholder in 2005 - The company's main business has not changed since its listing[20] - On November 1, 2005, Guangzhou Light Industry & Trade Group Co., Ltd. became the company's largest shareholder[20] Other Relevant Information This section discloses information about the accounting firm engaged by the company, including its name, office address, and the names of the signing accountants - The company engaged Zhonghuan Certified Public Accountants (Special General Partnership) for auditing[21] - The signing accountants are Hu Hailin and Lu Maoan[21] Key Accounting Data and Financial Indicators This section presents the company's key accounting data and financial indicators for 2019 and the preceding two years, including operating revenue, net profit, and cash flow, noting retrospective adjustments due to business combinations under common control - The company needs to retrospectively adjust or restate prior-year accounting data due to business combinations under common control[21] Key Accounting Data and Financial Indicators (After Retrospective Adjustment) | Indicator | 2019 | 2018 (Adjusted) | YoY Change (Adjusted) | | :--- | :--- | :--- | :--- | | Operating Revenue (yuan) | 12,397,507,679.81 | 13,249,116,773.72 | -6.43% | | Net Profit Attributable to Shareholders of Listed Company (yuan) | 61,355,868.10 | 69,366,682.75 | -11.55% | | Net Profit Attributable to Shareholders of Listed Company After Non-recurring Gains and Losses (yuan) | 11,157,240.73 | 55,939,574.29 | -80.05% | | Net Cash Flow from Operating Activities (yuan) | -556,824,311.36 | -441,817,768.42 | 26.03% | | Basic Earnings Per Share (yuan/share) | 0.10 | 0.12 | -16.67% | | Diluted Earnings Per Share (yuan/share) | 0.10 | 0.12 | -16.67% | | Weighted Average Return on Net Assets | 2.68% | 2.10% | 0.58% | | Total Assets (yuan) | 8,892,656,755.31 | 7,718,807,847.17 | 15.21% | | Net Assets Attributable to Shareholders of Listed Company (yuan) | 1,908,622,578.88 | 2,244,402,019.28 | -14.96% | Differences in Accounting Data under Domestic and Overseas Accounting Standards The company reported no differences in net profit and net assets between financial reports prepared under international or overseas accounting standards and Chinese accounting standards during the reporting period - The company reported no differences in net profit and net assets under domestic and overseas accounting standards during the reporting period[24][25] Key Quarterly Financial Indicators This section lists the company's key quarterly financial indicators for 2019 and explains that differences from previously disclosed quarterly reports are due to the acquisition of Huatang Food and the retrospective adjustment of the consolidation scope Key Quarterly Financial Indicators for 2019 | Indicator | Q1 | Q2 | Q3 | Q4 | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue (yuan) | 3,252,981,887.76 | 3,611,865,635.59 | 3,370,198,397.77 | 2,162,461,758.69 | | Net Profit Attributable to Shareholders of Listed Company (yuan) | 14,178,461.16 | 11,970,938.36 | 15,956,229.36 | 19,250,239.22 | | Net Profit Attributable to Shareholders of Listed Company After Non-recurring Gains and Losses (yuan) | 8,860,011.16 | 5,246,312.13 | 2,747,363.02 | -5,696,445.58 | | Net Cash Flow from Operating Activities (yuan) | 88,390,534.50 | -155,996,226.11 | 126,464,974.60 | -615,683,594.35 | - Quarterly financial indicator differences are primarily due to the acquisition of Huatang Food and retrospective adjustment of the consolidation scope[28] Non-recurring Gains and Losses and Amounts This section details the company's non-recurring gains and losses and their amounts for 2019 and the preceding two years, totaling 50.20 million yuan in non-recurring gains and losses for 2019 Non-recurring Gains and Losses and Amounts | Item | 2019 Amount (yuan) | 2018 Amount (yuan) | 2017 Amount (yuan) | | :--- | :--- | :--- | :--- | | Gains or losses from disposal of non-current assets | -136,464.44 | -56,526.09 | 17,445.98 | | Government grants recognized in current profit or loss | 15,241,812.31 | 24,150,701.81 | 26,130,793.91 | | Gains or losses from entrusted investments or asset management | 2,594,169.90 | 0.00 | 1,804,268.52 | | Net profit or loss of subsidiaries from the beginning of the period to the acquisition date under business combinations involving entities under common control | 34,353,645.22 | 0.00 | 0.00 | | Other non-operating income and expenses apart from the above | 6,990,023.00 | 1,900,388.46 | -447,781.52 | | Less: Income tax impact | 5,509,781.62 | 4,152,007.24 | 3,666,079.19 | | Minority interest impact (after tax) | 3,334,777.00 | 4,969,349.33 | 596,861.53 | | Total | 50,198,627.37 | 13,427,108.46 | 27,829,445.20 | Company Business Overview This section outlines the company's main business activities, significant asset changes, and core competencies, highlighting its transformation and brand portfolio Main Businesses Engaged by the Company During the Reporting Period The company's main business includes daily chemical product manufacturing, chemical raw material production and sales, with new food businesses like edible sugar and beverages added in 2019 through the acquisition of Huatang Food - The company's main business includes daily chemical product production, chemical raw material production, and sales[36] - In 2019, the acquisition of Huatang Food added new food businesses, including edible sugar and beverages[36] - The company owns "Langqi", "Gaofuli", "Hongmian", "Guangshi" and other daily chemical and food and beverage brand systems[36] - Qihua.com, as a deeply vertical resource integration platform for the chemical industry chain, develops e-commerce and daily chemical industrial internet platforms[36] Significant Changes in Major Assets During the reporting period, there were no significant changes in the company's equity investments, fixed assets, intangible assets, or construction in progress, and no major overseas assets - Equity investments, fixed assets, intangible assets, and construction in progress did not undergo significant changes[38] - The company does not have major overseas assets[39] Analysis of Core Competencies The company's core competencies are built on brand asset management, quality product manufacturing, and modern service industries, supported by strong brands, advanced production bases, and the Qihua.com e-commerce platform - The company has transformed from a traditional manufacturing enterprise into an advanced manufacturing company supported by internet and other advanced technologies, integrating industry and finance[39] - "Langqi" and "Gaofuli" were awarded "China Famous Trademarks", and after the acquisition, "Hongmian" and "Guangshi" became core food brands[39] - The company owns the internationally advanced Guangzhou Langqi Nansha Low-Carbon Industrial Park and has signed a strategic cooperation agreement with China Daily Chemical Research Institute to enhance technological capabilities[39] - Through the acquisition of Huatang Food, the company expanded its business scope; Huatang Food is a leading domestic refined sugar enterprise with brands like "Hongmian" and "Guangshi"[39][41] - Qihua.com is a leading deeply vertical resource integration platform for the chemical industry chain, offering one-stop services including trading, logistics, finance, technology, information, and data[41] - In 2019, the Daily Chemical Frontline platform, Daily Chemical Hub platform, and Qihua Chemical Encyclopedia software were recognized as Guangdong High-Tech Products[41] - During the reporting period, the company's core competencies expanded to include the research, production, application, and market sales of refined white sugar and other sugar products[41] Management Discussion and Analysis This section provides an in-depth analysis of the company's operational performance, financial position, investment activities, and future outlook, including key challenges and strategic responses Overview In 2019, despite an unfavorable external environment, the company achieved a 4.68% increase in civilian washing product sales revenue, with total operating revenue of 12.398 billion yuan (down 6.43%) and net profit attributable to the parent company of 61.36 million yuan (down 11.55%) - 2019 civilian washing product sales revenue increased by 4.68% year-on-year[44] 2019 Key Operating Performance | Indicator | Amount | | :--- | :--- | | Operating Revenue | 12.398 billion yuan | | YoY Change | -6.43% | | Net Profit Attributable to Parent Company Owners | 61.36 million yuan | | YoY Change | -11.55% | - The company, through the acquisition of Huatang Food, added food and beverage brands such as "Hongmian" and "Guangshi", and initiated their promotion and reshaping[44] - In 2019, nearly a hundred new product development projects were undertaken, with approximately one-third of the products launched, achieving expected sales targets[45] - Nansha Langqi's total output remained stable with an increase, Shaoguan Langqi's industrial cleaning agent business sales significantly increased year-on-year, and sulfonated product output grew year-on-year[47] - The company deepened its "cost reduction and efficiency improvement" project, with Nansha Langqi achieving nearly 10 million yuan in cost savings and a decrease in energy consumption per unit throughout the year[47] Analysis of Main Business In 2019, the company's operating revenue decreased by 6.43% to 12.398 billion yuan, mainly due to adjustments in the chemical raw material business and the Huatang Food acquisition, while operating costs decreased by 7.14% - 2019 operating revenue was 12.398 billion yuan, a year-on-year decrease of 6.43%, primarily due to adjustments in the chemical raw material business and the acquisition of Huatang Food[48] - Operating cost was 11.796 billion yuan, a year-on-year decrease of 7.14%[48] 2019 Key Expense Information | Expense Type | 2019 Amount (yuan) | YoY Change | Explanation of Significant Change | | :--- | :--- | :--- | :--- | | Selling Expenses | 226,379,161.41 | 7.88% | Increased investment in sales promotion, transportation, brand promotion, and market development expenses | | Administrative Expenses | 133,837,291.05 | 15.50% | Increased loading and unloading fees and personnel expenses | | Financial Expenses | 136,434,078.53 | 52.42% | Increased financing costs due to rising loan interest rates | | R&D Expenses | 39,946,757.02 | 37.77% | Increased R&D personnel salaries and R&D project material costs | - 2019 R&D investment totaled 325 million yuan, primarily for the development of new environmentally friendly surfactants, functional and green daily chemical products, and energy-saving production technologies[48] - Net cash flow from operating activities was -556.82 million yuan, mainly due to changes in the external operating environment, extended payment terms to customers, and increased labor costs[52][77] - Inventory increased, primarily due to tight raw material supply and rising procurement costs, leading the company to stock up in advance[52] - Prepayments increased, mainly due to tight raw material supply, rising procurement costs, and the requirement for advance payments for major raw material purchases[52] 2019 Operating Revenue Composition (by Industry) | Industry | Amount (yuan) | Proportion of Operating Revenue | YoY Change | | :--- | :--- | :--- | :--- | | Chemical Raw Materials and Chemical Products Manufacturing, Daily Necessities Retail | 11,182,563,338.98 | 90.20% | -6.50% | | Sugar Industry and Food, Beverage Retail | 1,174,133,253.07 | 9.47% | -6.92% | | Other | 40,811,087.76 | 0.33% | 46.15% | 2019 Operating Revenue Composition (by Product) | Product | Amount (yuan) | Proportion of Operating Revenue | YoY Change | | :--- | :--- | :--- | :--- | | Industrial Products | 10,058,912,806.79 | 81.14% | -7.52% | | Civilian Products | 1,123,554,309.95 | 9.06% | 4.68% | | Sugar Products and Food, Beverage Retail Products | 1,174,133,253.07 | 9.47% | -6.92% | | Other | 40,907,310.00 | 0.33% | 8.47% | 2019 Operating Revenue Composition (by Region) | Region | Amount (yuan) | Proportion of Operating Revenue | YoY Change | | :--- | :--- | :--- | :--- | | Domestic Sales | 11,989,886,313.10 | 96.71% | -5.68% | | Export Sales | 407,621,366.71 | 3.29% | -14.03% | - During the reporting period, the company acquired Huatang Food, adding sugar manufacturing and food retail businesses, which contributed to an increase in net profit[65] 2019 Huatang Food Operating Performance | Indicator | Amount (yuan) | | :--- | :--- | | Operating Revenue | 1,181,261,491.19 | | Net Profit | 34,353,645.22 | - Sales to the top five customers accounted for 24.96% of the total annual sales[68] - Purchases from the top five suppliers accounted for 35.17% of the total annual purchases[68] Analysis of Non-Core Business Non-core businesses significantly impacted total profit, with investment income accounting for 25.51%, non-operating income for 51.23% (mainly demolition compensation), and non-operating expenses for 42.45% (mainly demolition compensation expenses) Impact of Non-Core Business on Total Profit | Item | Amount (yuan) | Proportion of Total Profit | Explanation of Formation Reason | | :--- | :--- | :--- | :--- | | Investment Income | 20,030,377.26 | 25.51% | Profit from investment projects | | Asset Impairment | -6,892,023.81 | -8.78% | Increase in accounts receivable and inventory | | Non-operating Income | 40,224,814.03 | 51.23% | Primarily demolition compensation income | | Non-operating Expenses | 33,331,255.47 | 42.45% | Primarily demolition compensation expenses | Asset and Liability Status At the end of 2019, the company's total assets increased by 15.21% year-on-year, while net assets attributable to shareholders decreased by 14.96%, with significant increases in short-term and long-term borrowings primarily for loan payments Significant Changes in Asset and Liability Composition at Year-End 2019 | Item | 2019 Year-End Amount (yuan) | Proportion of Total Assets | 2019 Year-Beginning Amount (yuan) | Proportion of Total Assets | Change in Proportion | | :--- | :--- | :--- | :--- | :--- | :--- | | Total Assets | 8,892,656,755.31 | 100% | 7,718,807,847.17 | 100% | 15.21% | | Net Assets Attributable to Shareholders of Listed Company | 1,908,622,578.88 | 21.46% | 2,244,402,019.28 | 29.08% | -14.96% | | Short-term Borrowings | 2,324,895,173.71 | 26.14% | 1,433,378,182.33 | 18.57% | 7.57% | | Long-term Borrowings | 184,717,948.72 | 2.08% | 0 | 0% | 2.08% | - Short-term and long-term borrowings increased, primarily used for loan payments[80] - The company adopted new financial instrument standards for the first time, impacting the classification and measurement of financial assets[80] - There were no asset rights restrictions at the end of the reporting period[84] Investment Status The company's investment amount for the reporting period was 42.96 million yuan, a 114.81% increase year-on-year, primarily driven by the 429 million yuan cash acquisition of 100% equity in Guangzhou Huatang Food Co., Ltd., which generated 34.35 million yuan in investment profit or loss Reporting Period Investment Amount | Indicator | Amount (yuan) | YoY Change | | :--- | :--- | :--- | | Reporting Period Investment Amount | 42,962,320.00 | 114.81% | - The company cash-acquired 100% equity in Guangzhou Huatang Food Co., Ltd. for 429 million yuan, with equity transfer completed[86] - This investment generated a profit or loss of 34.35 million yuan for the current period[86] - The company had no securities investments, derivative investments, or use of raised funds during the reporting period[89][90][91] Significant Asset and Equity Sales The company sold the land plot at No. 128 Huangpu Avenue East, Tianhe District, Guangzhou, for 216 million yuan to revitalize assets, and publicly listed and transferred 25% equity in Jiangsu Qiheng Agrochemical Technology Co., Ltd. for 203 million yuan, with a transferee identified - The company sold the land plot at No. 128 Huangpu Avenue East, Tianhe District, Guangzhou, for 216 million yuan, which helps revitalize assets and optimize asset structure[94] - The company publicly listed and transferred 25% equity in Jiangsu Qiheng Agrochemical Technology Co., Ltd. for 203 million yuan, with Jiangsu Luye Agrochemical Co., Ltd. identified as the transferee[97] Analysis of Major Holding and Participating Companies This section analyzes the operational performance of the company's major subsidiaries and associates, highlighting Guangzhou Huatang Food Co., Ltd.'s significant contribution to revenue and net profit after its acquisition, and the development of other entities like Guangdong Qihua Chemical Trading Center Co., Ltd Major Holding and Participating Companies' Operating Performance (2019) | Company Name | Company Type | Main Business | Operating Revenue (yuan) | Net Profit (yuan) | | :--- | :--- | :--- | :--- | :--- | | Shaoguan Langqi Co., Ltd. | Subsidiary | Production and sales of washing powder and other cleaning products | 68,785,486.87 | -5,257,797.77 | | Guangzhou Langqi Daily Necessities Co., Ltd. | Subsidiary | Production and sales of surfactants and other chemical products | 135,714,142.24 | 2,486,496.14 | | Guangzhou Bafete Trading Co., Ltd. | Subsidiary | Wholesale and retail trade | 255,674,532.63 | 266,211.02 | | Guangzhou Daily Chemical Industry Research Institute Co., Ltd. | Subsidiary | Chemical science research, manufacturing: daily chemicals, chemical products | 6,822,306.39 | 1,160,443.55 | | Liaoning Langqi Industrial Co., Ltd. | Subsidiary | Production and sales of surfactants and washing products | 0.00 | -924,739.98 | | Guangdong Qihua Chemical Trading Center Co., Ltd. | Subsidiary | Operation of chemical trading market, property leasing, warehousing management, etc. | 3,780,181,563.88 | 1,086,954.63 | | Guangzhou Huatang Food Co., Ltd. | Subsidiary | Production and sales of sugar and other food products | 1,181,261,491.19 | 34,353,645.22 | | Guangzhou Qining Chemical Co., Ltd. | Associate | Production of surfactants, sales of own products | 103,210,433.57 | -16,549,948.04 | | Jiangsu Qiheng Agrochemical Technology Co., Ltd. | Associate | Production and sales of agrochemical products | 324,579,681.39 | 9,284,610.96 | - The cash acquisition of Guangzhou Huatang Food Co., Ltd. made it a wholly-owned subsidiary, significantly increasing the company's operating revenue and net profit[102] - Guangdong Qihua Chemical Trading Center Co., Ltd. integrates resources through a B2P model, creating 9 major product matrices to form a win-win ecosystem with full platform resource synergy and empowerment[104] - Huatang Food produced 140,000 tons of processed sugar in 2019 and plans to launch a 150,000 tons/year refined sugar low-carbon production technology upgrade project in May 2020 to improve production efficiency[104] Structured Entities Controlled by the Company The company did not control any structured entities during the reporting period - The company did not control any structured entities during the reporting period[105] Outlook on Company's Future Development The company aims to become a leader in China's green industry by focusing on brand asset management, quality product manufacturing, and modern service industries, while addressing challenges like intense competition and evolving channel structures - The daily chemical industry faces intense competition in new product development, with e-commerce channel sales doubling their proportion[106] - The company's future development strategy is to become a leader in China's green industry and an advocate for environmental friendliness, energy conservation, and low carbon[106] - In brand asset management, 2020 will focus on "rooting in the nine cities of the Greater Bay Area across all business formats, focusing on core towns in Guangdong and Hainan, and expanding nationally through vertical and horizontal integration"[107] - In quality product manufacturing, the company will accelerate transformation and upgrading, strengthen refined management, and build a digital, flexible, efficient, high-quality, and cost-optimized supply chain[107] - In modern service industries, the company will deepen the Qihua.com platform ecosystem, continuously expand business, strengthen risk prevention and cost control, and enhance profitability[107] - 2020 plans include: adhering to profit orientation, improving capital operation quality, strengthening risk control, accelerating innovation achievement transformation, lean production and strong management, and stimulating employee innovation[107][109][110] - The company faces risks such as weak profitability, production safety and environmental protection, low capacity utilization, and the land reserve of the Tianhe District plot[111][112][113] - Regarding the risk of the Tianhe District plot land reserve, the company has established a working group to actively promote headquarters relocation and land reserve work, striving to obtain the incentive payment within the stipulated timeframe[113] Reception of Research, Communication, Interview, and Other Activities The company did not engage in any research, communication, or interview activities during the reporting period - The company did not engage in any research, communication, or interview activities during the reporting period[114] Significant Matters This section covers important corporate actions including profit distribution, commitment fulfillment, related party transactions, and other significant events impacting the company's operations and financial position Profit Distribution of Ordinary Shares and Capital Reserve Conversion to Share Capital The company's 2019 profit distribution plan proposes a cash dividend of 0.20 yuan (including tax) per 10 shares, with no bonus shares or capital reserve conversion, and has consistently implemented cash dividends over the past three years - The company's 2019 profit distribution plan proposes a cash dividend of 0.20 yuan (including tax) per 10 shares, with no bonus shares and no capital reserve conversion to share capital[117][120] Cash Dividends for Ordinary Shares in the Last Three Years | Dividend Year | Cash Dividend Amount (incl. tax, yuan) | Net Profit Attributable to Shareholders of Listed Company (yuan) | Cash Dividend Amount as % of Net Profit | | :--- | :--- | :--- | :--- | | 2019 | 12,550,662.50 | 61,355,868.10 | 20.46% | | 2018 | 12,550,662.50 | 69,366,682.75 | 18.09% | | 2017 | 10,458,885.42 | 46,870,516.79 | 22.31% | Profit Distribution and Capital Reserve Conversion to Share Capital for the Current Reporting Period The profit distribution plan for the current reporting period proposes a cash dividend of 0.20 yuan (including tax) per 10 shares, with no bonus shares or capital reserve conversion, totaling 12.55 million yuan in cash dividends, representing 100% of distributable profit Profit Distribution Plan for the Current Reporting Period | Indicator | Value | | :--- | :--- | | Number of bonus shares per 10 shares (shares) | 0 | | Dividend per 10 shares (yuan) (incl. tax) | 0.2 | | Number of shares converted from capital reserve per 10 shares (shares) | 0 | | Share capital base for distribution plan (shares) | 627,533,125 | | Cash dividend amount (yuan) (incl. tax) | 12,550,662.50 | | Total cash dividend amount (incl. other methods) (yuan) | 12,550,662.50 | | Distributable profit (yuan) | 279,325,617.02 | | Proportion of total cash dividend to total profit distribution | 100% | Fulfillment of Commitments The company's controlling shareholder, Guangzhou Light Industry & Trade Group Co., Ltd., and senior management personnel have fulfilled their commitments regarding share reduction and increase, with the Light Industry Group completing its share increase plan and executives adhering to their non-reduction commitments - The company's senior management personnel committed not to reduce their holdings of company shares during their tenure and are fulfilling this commitment normally[121][123] - The controlling shareholder, Guangzhou Light Industry & Trade Group Co., Ltd., has completed its commitment to increase its holdings of company shares[125] - Jiangsu Qiheng Agrochemical Technology Co., Ltd. and its shareholder Wang Jian have fulfilled the investment compensation agreement, and the company has received the compensation payment[125] Non-Operating Fund Occupation by Controlling Shareholder and Its Related Parties The company reported no non-operating fund occupation by its controlling shareholder or related parties during the reporting period - The company reported no non-operating fund occupation by its controlling shareholder or related parties during the reporting period[129] Explanation by the Board of Directors, Supervisory Board, and Independent Directors (if any) on the Accounting Firm's "Non-Standard Audit Report" for the Current Reporting Period The company reported no "non-standard audit report" issued by the accounting firm during the reporting period - The company reported no "non-standard audit report" issued by the accounting firm during the reporting period[129] Explanation of Changes in Accounting Policies, Accounting Estimates, and Accounting Methods Compared to the Previous Year's Financial Report Effective January 1, 2019, the company adopted new financial instrument standards, revising financial asset classification and measurement, introducing the "expected credit loss" model, and also implemented revised non-monetary asset exchange and debt restructuring standards, along with financial statement format changes - The company adopted new financial instrument standards effective January 1, 2019, changing the classification and measurement of financial assets and introducing the "expected credit loss" model[129][138][139] - The company implemented the revised non-monetary asset exchange standards and debt restructuring standards, but these had no impact on financial position and operating results[144] - The company revised the financial statement format as required by the Ministry of Finance, adjusting the presentation of some items, but without affecting total shareholder equity or net profit[147] Explanation of Significant Accounting Error Corrections Requiring Retrospective Restatement During the Reporting Period The company reported no significant accounting error corrections requiring retrospective restatement during the reporting period - The company reported no significant accounting error corrections requiring retrospective restatement during the reporting period[148] Explanation of Changes in Consolidation Scope Compared to the Previous Year's Financial Report The scope of consolidated financial statements changed this year, with Guangzhou Huatang Food Co., Ltd. newly included in the consolidation - Guangzhou Huatang Food Co., Ltd. was newly included in the scope of consolidated financial statements this year[149] Appointment and Dismissal of Accounting Firms The company currently engages Zhonghuan Certified Public Accountants (Special General Partnership) as its domestic accounting firm, with an audit fee of 0.8745 million yuan, having served for two consecutive years, and no changes were made during the reporting period - The company currently engages Zhonghuan Certified Public Accountants (Special General Partnership) as its domestic accounting firm[153] Accounting Firm Information | Indicator | Value | | :--- | :--- | | Domestic accounting firm remuneration (ten thousand yuan) | 87.45 | | Consecutive years of domestic accounting firm audit service | 2 | | Names of domestic accounting firm's certified public accountants | Hu Hailin, Lu Maoan | - No changes were made to the accounting firm during the reporting period, nor were internal control audit accounting firms, financial advisors, or sponsors engaged[153] Facing Suspension and Termination of Listing After Annual Report Disclosure The company did not face suspension or termination of listing after the annual report disclosure during the reporting period - The company did not face suspension or termination of listing after the annual report disclosure during the reporting period[154] Bankruptcy and Reorganization Related Matters The company did not experience any bankruptcy or reorganization related matters during the reporting period - The company did not experience any bankruptcy or reorganization related matters during the reporting period[154] Significant Litigation and Arbitration Matters The company had no significant litigation or arbitration matters during the current reporting period - The company had no significant litigation or arbitration matters during the current reporting period[155] Penalties and Rectification The company reported no penalties or rectification situations during the reporting period - The company reported no penalties or rectification situations during the reporting period[156] Integrity Status of the Company, Its Controlling Shareholder, and Actual Controller The company reported no issues regarding the integrity status of the company, its controlling shareholder, or actual controller during the reporting period - The company reported no issues regarding the integrity status of the company, its controlling shareholder, or actual controller during the reporting period[157] Implementation of Company Equity Incentive Plans, Employee Stock Ownership Plans, or Other Employee Incentive Measures The company's first employee stock ownership plan was lifted from restrictions and became tradable on January 29, 2019, with 879,900 shares sold and 1,947,961 shares remaining during the reporting period - The company's first employee stock ownership plan, comprising 2,827,861 shares, was lifted from restrictions and became tradable on January 29, 2019[157] - During the reporting period, the employee stock ownership plan sold 879,900 shares, with 1,947,961 shares remaining[157] Significant Related Party Transactions The company engaged in significant related party transactions during the reporting period, including procurement of raw materials and sales of chemical products, as well as asset and equity acquisitions/disposals, notably the termination of Guangzhou Baihua Flavor & Fragrance acquisition and the completion of Guangzhou Huatang Food acquisition 2019 Key Related Party Procurement | Related Party | Related Transaction Content | Amount for Current Period (ten thousand yuan) | Proportion of Similar Transactions | | :--- | :--- | :--- | :--- | | Guangzhou Baihua Flavor & Fragrance Co., Ltd. | Procurement of various flavor and fragrance raw materials | 574.68 | 12.58% | | Guangzhou Qining Chemical Co., Ltd. | Procurement of sulfonic acid, methyl ester sulfonate, etc. | 8,527.1 | 0.88% | | Jiangsu Qiheng Agrochemical Technology Co., Ltd. | Procurement of trichloroacetyl chloride, ethyl chloride, etc. | 4,633.97 | 0.48% | | Foshan Sanshui Feima Packaging Co., Ltd. | Procurement of plastic bottles, plastic caps, etc. | 643.36 | 10.71% | | Guangzhou Renyin Packaging Materials Co., Ltd. | Procurement of plastic packaging bags, shrink film, etc. | 540.74 | 9.00% | | Guangzhou Renmin Printing Factory Co., Ltd. | Procurement of cartons, self-adhesive labels, small bags, labels, etc. | 1,203.83 | 20.05% | 2019 Key Related Party Sales and Labor Services Provided | Related Party | Related Transaction Content | Amount for Current Period (ten thousand yuan) | Proportion of Similar Transactions | | :--- | :--- | :--- | :--- | | Guangzhou Qining Chemical Co., Ltd. | Sales of alkylbenzene, sulfur, and other raw materials | 9,092.99 | 1.73% | | Guangzhou Chemical Import & Export Co., Ltd. | Sales of washing powder and other products | 2,798.01 | 4.31% | | Guangzhou Baihua Flavor & Fragrance Co., Ltd. | Provision of fuel and power support services | 123.37 | 79.18% | | Guangzhou Qitian International Logistics Co., Ltd. | Provision of technical consulting services | 3,405.96 | 94.49% | - The company terminated the acquisition of 97.42% equity in Guangzhou Baihua Flavor & Fragrance Co., Ltd. and continued to advance the acquisition of 100% equity in Guangzhou Huatang Food Co., Ltd[173][175] - The acquisition of Huatang Food increased the company's net profit, with Huatang Food's operating revenue of 1.181 billion yuan and net profit of 34.35 million yuan in 2019[175] Significant Contracts and Their Fulfillment The company had no trust or contracting arrangements during the reporting period, but engaged in leasing activities that generated revenue, and provided guarantees for subsidiaries totaling 35 million yuan at the end of the period - The company had no trust or contracting arrangements during the reporting period[180][181] - Subsidiary Nansha Langqi Co., Ltd. signed a housing lease contract with Guangzhou Baihua Flavor & Fragrance Co., Ltd., with an annual rent of approximately 2.49 million yuan[182] - The company signed a housing lease contract with Guangzhou Baihua Flavor & Fragrance Co., Ltd., with an annual rent of approximately 1.15 million yuan[182] Company Guarantees for Subsidiaries | Name of Guaranteed Party | Guarantee Limit (ten thousand yuan) | Actual Guarantee Amount (ten thousand yuan) | Guarantee Type | Guarantee Period | Fulfilled | | :--- | :--- | :--- | :--- | :--- | :--- | | Guangzhou Qihua Co., Ltd. | 11,000 | 3,500 | Joint and several liability guarantee | 3 years | No | - The company had no entrusted wealth management, entrusted loans, or other significant contracts during the reporting period[188][189] Social Responsibility Performance The company actively fulfills its social responsibilities by safeguarding shareholder and creditor rights, promoting environmental protection, protecting consumer and supplier interests, and ensuring employee welfare, while also engaging in public welfare activities - The company maintains and protects the legitimate rights and interests of shareholders and investors by establishing and improving governance systems and internal control systems[190] - The company was awarded the national "Green Factory" title, and 8 products were recognized as "National Green Design Products" by the Ministry of Industry and Information Technology[193] - The company adheres to market orientation, establishes a product standard system stricter than national standards, and enhances brand awareness through online and offline brand communication models[194][195] - The company has established supplier management systems and processes, strengthening supplier evaluation and procurement supervision to maintain a high-quality supplier system[195] - The company strictly complies with labor laws, has established a standardized employee social security management system, and focuses on talent development and compensation incentives[196][197] - The company actively participates in public welfare, conducting charity donation activities and donating funds to poverty-stricken villages[199] - The company did not carry out targeted poverty alleviation work in the reporting year and currently has no subsequent targeted poverty alleviation plans[200] Pollutant Emission Status of Major Subsidiaries | Company Name | Main Pollutants and Characteristic Pollutants | Emission Method | Emission Concentration | Applicable Emission Standard | Total Emissions | Approved Total Emissions | Exceeding Standard Emissions | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Guangzhou Langqi Daily Necessities Co., Ltd. | Wastewater, COD, Ammonia Nitrogen | Discharged to municipal pipeline after treatment | ≤ 500mg/L | "Water Pollutant Discharge Limits" (DB44/26-2001) Second Stage Level 3 Standard | 51400 tons/year | / | None | | Guangzhou Langqi Daily Necessities Co., Ltd. | Waste gas, Sulfur Dioxide, Nitrogen Oxides, Particulates, Oil Fumes | Discharged to atmosphere after treatment | Sulfur Dioxide ≤ 300mg/m3, Nitrogen Oxides ≤ 200mg/m3, Particulates ≤ 120mg/m3 | "Boiler Air Pollutant Emission Standard" (DB44/65-2010) Coal-fired A Zone Standard, etc. | 33120 million standard cubic meters/year | Sulfur Dioxide: 8.64 tons/year; Nitrogen Oxides: 13.39 tons/year; Particulates: 60.48 tons/year | None | | Guangzhou Huatang Food Co., Ltd. | COD; Ammonia Nitrogen | Intermittent discharge | Ammonia Nitrogen: 0.92 (mg/l) / COD: 76.19 (500ml/l) | Second Stage Level 3 Standard | COD: 736.3T / Ammonia Nitrogen: 9.16T | COD: 1560T / Ammonia Nitrogen: 46.8T | None | | Shaoguan Langqi Co., Ltd. | COD | Beijiang_HB010000 | 17.8mg\L | <130 mg\L | 3.4062 tons | 8.57 tons/year | No | - The company and its subsidiaries' pollution prevention and control facilities operate normally, and emissions comply with laws, regulations, and regulatory requirements[208] - The company and its subsidiaries have prepared emergency response plans for environmental incidents as required and commissioned third-party environmental monitoring agencies for monitoring[212][213] Explanation of Other Significant Matters The company terminated the acquisition of 97.42% equity in Guangzhou Baihua Flavor & Fragrance Co., Ltd. but completed the acquisition of 100% equity in Guangzhou Huatang Food Co., Ltd., and signed a land reserve compensation agreement for its Guangzhou headquarters' Tianhe District Chebei plot for 2.156 billion yuan - The company terminated the acquisition of 97.42% equity in Guangzhou Baihua Flavor & Fragrance Co., Ltd[215] - The acquisition of 100% equity in Guangzhou Huatang Food Co., Ltd. has been completed, and 55% of the total acquisition price (236.29 million yuan) has been paid[215] - The company publicly listed and transferred 25% equity in Jiangsu Qiheng Agrochemical Technology Co., Ltd. for 202.9975 million yuan, and has received the first installment of 60.90 million yuan for the equity transfer[217] - The company signed a land reserve compensation agreement with Guangzhou Land Development Center for its Guangzhou headquarters' Tianhe District Chebei plot, with a compensation amount of 2.156 billion yuan[217] - The first installment of land compensation, totaling 431.30 million yuan, has been received[217] Significant Matters of Company Subsidiaries On December 30, 2019, the company's wholly-owned subsidiary, Huatang Food, received a project support fund of 14 million yuan from the Guangzhou Municipal Bureau of Industry and Information Technology for provincial-level technical transformation incentives - Wholly-owned subsidiary Huatang Food received a project support fund of 14 million yuan from the Guangzhou Municipal Bureau of Industry and Information Technology[218] - This fund is for the 2019 provincial-level incentives for industrial enterprise technical transformation[218] Share Changes and Shareholder Information This section details changes in the company's share capital, including restricted and unrestricted shares, and provides an overview of its shareholders and actual controller Share Change Status In 2019, the company's restricted shares decreased by 92,061,468 shares, with a corresponding increase in unrestricted shares, primarily due to the lifting of restrictions on shares held by Guangzhou State-owned Assets Development Holding Co., Ltd. and the first employee stock ownership plan Share Change Status (Unit: shares) | Category | Number Before Change | Proportion Before Change | Increase/Decrease in Current Change (＋,－) | Number After Change | Proportion After Change | | :--- | :--- | :--- | :--- | :--- | :--- | | I. Restricted Shares | 92,647,457 | 14.76% | -92,061,468 | 585,989 | 0.09% | | II. Unrestricted Shares | 534,885,668 | 85.24% | 92,061,468 | 626,947,136 | 99.91% | | III. Total Shares | 627,533,125 | 100.00% | 0 | 627,533,125 | 100.00% | - Restricted shares held by Guangzhou State-owned Assets Development Holding Co., Ltd. and the company's first employee stock ownership plan, totaling 92,084,058 shares, were lifted from restrictions and became tradable on January 29, 2019[224] - Due to Mr. Fu Yongguo's departure, 75% (199,830 shares) of his 266,440 shares became locked[227] - Mr. Zhao Biqiu, newly appointed Chairman, had 75% (750 shares) of his 1,000 shares locked[227] - Mr. Wang Yingjie's 87,359 shares changed from 75% locked to fully locked due to his departure[227] Securities Issuance and Listing Status The company did not issue any securities (excluding preferred shares) during the reporting period, and there were no significant changes in its total share capital, shareholder structure, or internal employee shares - The company did not issue any securities (excluding preferred shares) during the reporting period[231] - There were no significant changes in the company's total share capital, shareholder structure, or asset and liability structure[233] - The company had no internal employee shares during the reporting period[233] Shareholders and Actual Controller Information As of the end of the reporting period, the company had 41,678 ordinary shareholders, with Guangzhou Light Industry & Trade Group Co., Ltd. as the controlling shareholder (31.04% stake) and Guangzhou State-owned Assets Development Holding Co., Ltd. holding 14.22%, while the actual controller is the Guangzhou Municipal People's Government State-owned Assets Supervision and Administration Commission - As of the end of the reporting period, the total number of ordinary shareholders was 41,678[234] Shareholding of Shareholders Holding 5% or More or Top 10 Shareholders | Shareholder Name | Shareholder Nature | Shareholding Ratio | Number of Shares Held at End of Reporting Period (shares) | Number of Unrestricted Shares Held (shares) | | :--- | :--- | :--- | :--- | :--- | | Guangzhou Light Industry & Trade Group Co., Ltd. | State-owned Legal Person | 31.04% | 194,783,485 | 194,783,485 | | Guangzhou State-owned Assets Development Holding Co., Ltd. | State-owned Legal Person | 14.22% | 89,256,197 | 89,256,197 | | Zheng Lihui | Domestic Natural Person | 0.92% | 5,800,000 | 5,800,000 | | Wu Yanhan | Domestic Natural Person | 0.80% | 5,038,100 | 5,038,100 | | Cheng Yumin | Domestic Natural Person | 0.71% | 4,426,100 | 4,426,100 | | Wang Zhixu | Domestic Natural Person | 0.64% | 3,989,200 | 3,989,200 | | Jiang Wenbi | Domestic Natural Person | 0.46% | 2,904,200 | 2,904,200 | | Guangzhou Langqi Industrial Co., Ltd. - Phase 1 Employee Stock Ownership Plan | Other | 0.31% | 1,947,961 | 1,947,961 | | Lin Qiuhuai | Domestic Natural Person | 0.31% | 1,915,675 | 1,915,675 | | Luo Datong | Domestic Natural Person | 0.29% | 1,835,660 | 1,835,660 | - The company's controlling shareholder is Guangzhou Light Industry & Trade Group Co., Ltd., and the actual controller is the Guangzhou Municipal People's Government State-owned Assets Supervision and Administration Commission[241][245] - The company's top 10 ordinary shareholders and top 10 unrestricted ordinary shareholders did not engage in agreed repurchase transactions during the reporting period[240] Other Legal Person Shareholders Holding Over 10% Guangzhou State-owned Assets Development Holding Co., Ltd. is a legal person shareholder holding over 10% of the company's shares, primarily engaged in asset management, proprietary investment, and investment management services Other Legal Person Shareholders Holding Over 10% | Legal Person Shareholder Name | Legal Representative/Head of Unit | Date of Establishment | Registered Capital | Main Business or Management Activities | | :--- | :--- | :--- | :--- | :--- | | Guangzhou State-owned Assets Development Holding Co., Ltd. | Wang Haibin | September 26, 1989 | 6,526,197,357 yuan | Proprietary investment; enterprise financial consulting services; enterprise headquarters management; investment consulting services; enterprise management services (excluding licensed business projects); investment management services; wholesale trade of goods (excluding licensed and approved goods); retail trade of goods (excluding licensed and approved goods); participation in the establishment of venture capital enterprises and venture capital management consulting institutions; venture capital; asset management (excluding licensed and approved projects); equity investment; equity investment management | Restrictions on Share Reduction by Controlling Shareholder, Actual Controller, Reorganization Party, and Other Committed Entities The company reported no restrictions on share reduction by its controlling shareholder, actual controller, reorganization party, or other committed entities during the reporting period - The company reported no restrictions on share reduction by its controlling shareholder, actual controller, reorganization party, or other committed entities during the reporting period[248] Preferred Share Related Information This section confirms that the company had no preferred shares during the reporting period No Preferred Shares in the Reporting Period The company had no preferred shares during the reporting period - The company had no preferred shares during the reporting period[250] Convertible Corporate Bonds Related Information This section confirms that the company had no convertible corporate bonds during the reporting period No Convertible Corporate Bonds in the Reporting Period The company had no convertible corporate bonds during the reporting period - The company had no convertible corporate bonds during the reporting period[253] Directors, Supervisors, Senior Management, and Employees This section details the shareholding changes, appointments, remuneration, and overall employment situation of the company's directors, supervisors, senior management, and employees Shareholding Changes of Directors, Supervisors, and Senior Management The shareholdings of the company's directors, supervisors, and senior management remained generally stable during the reporting period, with some changes in status or quantity due to departures or new appointments, but the total number of shares held at period-end remained unchanged Shareholding Changes of Directors, Supervisors, and Senior Management (Unit: shares) | Name | Position | Employment Status | Shares Held at Beginning of Period | Shares Increased in Current Period | Shares Decreased in Current Period | Shares Held at End of Period | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Fu Yongguo | Former Chairman | Resigned | 266,440 | 0 | 0 | 266,440 | | Zhao Biqiu | Chairman | Current | 1,000 | 0 | 0 | 1,000 | | Chen Jianbin | Vice Chairman, General Manager | Current | 165,720 | 0 | 0 | 165,720 | | Fu Rongwu | Director | Current | 20,280 | 0 | 0 | 20,280 | | Li Yun | Supervisor | Current | 2,400 | 0 | 0 | 2,400 | | Chen Tao | Deputy General Manager, Chief Engineer | Current | 165,480 | 0 | 0 | 165,480 | | Chen Wen | Deputy General Manager | Current | 24,520 | 0 | 0 | 24,520 | | Cheng Zhibin | Deputy General Manager | Current | 2,400 | 0 | 0 | 2,400 | | Wang Yingjie | Former Head of Finance, CFO | Resigned | 87,359 | 0 | 0 | 87,359 | | Wang Zhigang | Board Secretary | Current | 16,600 | 0 | 0 | 16,600 | | Total | -- | -- | 752,199 | 0 | 0 | 752,199 | Changes in Company Directors, Supervisors, and Senior Management During the reporting period, the company experienced several changes in its directors, supervisors, and senior management, including Ms. Shi Hongfang's departure as Supervisory Board Chairman, Mr. Liu Weihong's succession, Mr. Fu Yongguo's resignation as Chairman, Mr. Zhao Biqiu's election, and Ms. Li Yanmei's appointment as CFO following Mr. Wang Yingjie's retirement - Ms. Shi Hongfang served as Chairman of the Supervisory Board and employee supervisor, then resigned due to work reasons[257][259] - Mr. Fu Yongguo resigned from his positions as company director and chairman due to work reasons[259] - Mr. Zhao Biqiu was elected as company director and chairman[259] - Mr. Liu Weihong was elected as Chairman of the Supervisory Board and employee supervisor[259] - Mr. Wang Yingjie resigned as Head of Finance and CFO due to statutory retirement age, and Ms. Li Yanmei succeeded him[259] Employment Status This section details the professional backgrounds, key work experiences, and internal and external positions of the company's current directors, supervisors, and senior management, highlighting their close ties with the controlling shareholder, Guangzhou Light Industry & Trade Group Co.,