RED SUN(SZ:000525)2021-04-29 16:00Financial Performance - The company's operating revenue for 2020 was CNY 4,021,995,202.84, a decrease of 12.84% compared to CNY 4,614,454,469.63 in 2019[16]. - The net profit attributable to shareholders for 2020 was CNY -153,813,433, representing an improvement of 54.77% from CNY -340,045,478 in 2019[16]. - The net cash flow from operating activities decreased by 84.21% to CNY 231,238,358 in 2020, down from CNY 1,464,507,711 in 2019[16]. - The basic earnings per share for 2020 was CNY -0.265, a 54.78% improvement from CNY -0.586 in 2019[16]. - Total assets at the end of 2020 were CNY 11,542,748,100, a decrease of 16.37% from CNY 13,801,586,700 at the end of 2019[16]. - The company reported a total non-operating income of CNY 112,279,013.06 in 2020, significantly higher than CNY 29,918,198.24 in 2019[22]. - The company achieved significant breakthroughs in the development of new green pesticides, including the completion of small-scale production trials for a new compound and obtaining national registration and patents[64]. - The company reported a total revenue of 19,229.36 million in the financial year 2020[146]. Internal Control and Compliance - The company reported a significant internal control deficiency, leading to a negative opinion in the internal control audit report by the accounting firm, which raises concerns about financial reporting accuracy[5]. - The board of directors has acknowledged the audit report with a reserved opinion, indicating understanding of the issues raised and agreeing to take corrective actions[130]. - The company is currently under investigation by the China Securities Regulatory Commission for suspected violations of information disclosure laws, which may impact its operations[5]. - The company is actively cooperating with the ongoing investigation by the China Securities Regulatory Commission regarding alleged information disclosure violations[132]. - The company has not disclosed any significant undisclosed information during investor communications[115]. Shareholder and Capital Structure - The company has a registered capital of RMB 100 million, with its shares listed on the Shenzhen Stock Exchange under the stock code 000525[11]. - The largest shareholder, Nanjing First Pesticide Group Co., Ltd., holds 45.10% of the shares, totaling 261,926,431 shares, with a decrease of 4,277,600 shares during the reporting period[195]. - The second largest shareholder, Hongtaiyang Group Co., Ltd., holds 8.00% of the shares, totaling 46,459,663 shares, with a decrease of 7,065,373 shares during the reporting period[195]. - The actual controller, Yang Shuhai, holds 1.40% of the shares, totaling 8,136,454 shares, with no change during the reporting period[195]. - The company did not distribute cash dividends in 2019, reporting a net profit of -340.05 million yuan[119]. - The company reported a net profit of -153.81 million yuan for 2020, with no cash dividends proposed for the year[120]. Research and Development - The company has established a comprehensive R&D, procurement, production, and sales system, allowing for independent operational activities[41]. - The company aims to enhance its competitive edge by increasing R&D investment in proprietary pesticides while outsourcing to improve profitability[27]. - The company increased R&D expenses by 3,394.08 million yuan, focusing on core business and advancing new product technology development[62]. - The number of R&D personnel decreased by 9.21% to 651, while the proportion of R&D personnel in total staff fell to 20.38% from 21.12%[90]. - The company has a total of 651 technical personnel and holds over 500 national patents, with more than 80% being invention patents[51]. Market and Industry Position - The company operates in the chemical manufacturing industry, specifically in the production of pesticides, which are crucial for agricultural productivity[25]. - The global crop protection market is expected to reach $66.703 billion in 2023, with a compound annual growth rate (CAGR) of 3% from 2018 to 2023[26]. - China's pesticide exports reached 2.395 million tons in 2020, a year-on-year increase of 29.3%, with export value at $11.68 billion, up 14.6%[29]. - The company is positioned as a leading player in the green pesticide sector, focusing on research and manufacturing of intermediates, with a strong emphasis on international trade and agricultural supply chains[31]. - The company’s core product categories include herbicides, insecticides, fungicides, and animal nutrition, targeting both domestic and international markets[32]. Financial Challenges and Risks - The company faces risks related to rising raw material costs and intensified market competition, as well as specific risks in the agricultural chemical industry, including cross-border business challenges[112]. - The company is currently facing a liquidity crisis due to external economic pressures and has implemented measures to recover occupied funds from related parties[131]. - The company has a significant amount of unpaid debts, with some cases still in the execution process[144]. - The company is currently navigating through multiple legal challenges that could influence its financial outlook and strategic decisions[144]. - The company is exposed to exchange rate risks due to fluctuations in the RMB/USD exchange rate, which may affect its competitiveness in exports[113]. Environmental Compliance and Sustainability - The company is classified as a key pollutant discharge unit by environmental protection authorities[175]. - The total discharge of COD was 0844 tons, with a concentration of 29.66 g/L, complying with local standards[175]. - The company has implemented continuous monitoring systems for emissions to ensure compliance with environmental standards[176]. - The company is focused on reducing its environmental footprint through improved waste management and emission reduction strategies[176]. - The company has established a three-level water pollution risk prevention system, ensuring that wastewater is fully collected during emergency situations and processed at a wastewater treatment plant, preventing direct discharge into the environment[181]. Legal and Regulatory Issues - The company is involved in multiple legal disputes, including a sales contract dispute with a claim of 2,136.6 million currently in the second instance[145]. - The company has confirmed debts totaling 1,566.13 million in a sales contract dispute, which is currently awaiting bankruptcy proceedings[145]. - The company has a pending claim of 39.81 million in another contract dispute, which is also in the second instance[145]. - The company faced a penalty from the Shenzhen Stock Exchange for failing to disclose information regarding the freezing of shares in a timely manner[149]. - The company has a history of financial disputes that may affect its future operations and market perception[144].