CTS(SZ:000551)2021-03-22 16:00Financial Performance - The company reported a profit distribution plan to distribute a cash dividend of 1.00 RMB per 10 shares to all shareholders, based on a total of 400,080,405 shares[4]. - The company's operating revenue for 2020 was approximately ¥3.21 billion, a decrease of 0.74% compared to 2019[16]. - The net profit attributable to shareholders for 2020 was approximately ¥116.67 million, an increase of 3.34% from 2019[16]. - The net profit after deducting non-recurring gains and losses was approximately ¥95.40 million, a decrease of 3.21% compared to 2019[16]. - The net cash flow from operating activities for 2020 was approximately ¥206.10 million, down 27.07% from 2019[16]. - The total assets at the end of 2020 were approximately ¥5.00 billion, an increase of 7.80% from the end of 2019[16]. - The net assets attributable to shareholders at the end of 2020 were approximately ¥1.92 billion, up 6.93% from the end of 2019[16]. - The company reported a basic earnings per share of ¥0.29 for 2020, an increase of 3.57% from 2019[16]. - In 2020, the company achieved operating revenue of 3.213 billion yuan, a year-on-year decrease of 0.74%, while total profit reached 226 million yuan, an increase of 4.99%[70]. - The net profit attributable to the parent company was 116.67 million yuan, up 3.34% year-on-year, with a return on net assets of 6.31%[70]. - The total assets at the end of the reporting period were 5 billion yuan, a year-on-year increase of 7.80%[70]. - The company reported a retained earnings balance of 323.82 million yuan at the end of 2020, after accounting for the cash dividend distribution[166]. Business Transformation and Focus - The company has undergone significant business transformation since its listing in 1994, shifting its main business focus to advanced manufacturing in clean environmental protection and high-voltage porcelain insulators[15]. - The company operates in the advanced manufacturing sector, specifically in environmental equipment manufacturing and precision machinery[15]. - The company has maintained its core business in clean environmental engineering and high-voltage porcelain insulators without significant changes[25]. - The company is positioned in the clean environmental equipment and engineering industry, aligning with national policies promoting green development and sustainable practices[36]. - The company is focusing on the clean environmental equipment and engineering industry, driven by national policies promoting green development and ecological protection[135]. Shareholder and Governance - The company’s major shareholder has changed multiple times, with the current controlling shareholder being Chuangyuan Investment since 2008[15]. - The company has a total of 11 directors, all of whom participated in the board meeting to review the annual report[4]. - The board of directors confirmed that all financial reports in the annual report are true, accurate, and complete, with no significant omissions[4]. - The company has engaged with investors through 129 interactions on the Shenzhen Stock Exchange's investor platform during the reporting period[158]. - The actual controller, shareholders, and related parties have fulfilled their commitments during the reporting period, including a shareholding increase commitment by Chuangyuan Investment, which involved a minimum increase of 10 million yuan and a maximum of 50 million yuan[168]. - Chuangyuan Investment has cumulatively increased its shareholding by 5,782,053 shares, accounting for 1.45% of the total share capital, with a total investment of approximately 30.54 million yuan[169]. Research and Development - The company has a dedicated financial company and several subsidiaries involved in various sectors, including environmental engineering and precision manufacturing[15]. - The company is focused on developing new products and technologies, particularly in the fields of environmental protection and energy efficiency[27]. - The company plans to deepen the integration of production, education, and research, enhancing its technological innovation capabilities and competitive advantages[45]. - The company’s R&D investment for the reporting period was 161 million yuan, an increase of 8.58% year-on-year, with a total of 480 valid patents held[77]. - Jiangsu Sujing applied for and was granted 57 patents in 2020, including 5 invention patents, marking a breakthrough in international PCT patents[51]. - The company has established a stable and innovative R&D team, increasing investment in industry-university-research collaboration to enhance talent cultivation[55]. Market Presence and Strategy - The company has a strong presence in the air purification and energy-saving equipment sector, serving key national projects and exporting to over 40 countries[25]. - The company aims to expand its market reach by leveraging its technological advancements and strong customer relationships in both domestic and international markets[30]. - The company aims to achieve a revenue target of 215 billion yuan and a production volume of 22.6 billion units in the bearing industry by 2025, with year-on-year growth rates of 15.5% and 13% respectively[145]. - The company plans to invest 300 billion yuan in the construction of ultra-high voltage projects during the 14th Five-Year Plan period, with the total length of lines expected to increase from 28,352 kilometers in 2019 to 40,825 kilometers[142]. - The company will focus on capital operations to enhance market share and scale by acquiring high-quality enterprises related to its main business[147]. - The company plans to enhance its market presence and product offerings through strategic initiatives and technological advancements[88]. Risk Management and Compliance - The company emphasizes the importance of risk awareness regarding forward-looking statements made in the annual report[4]. - The company has implemented a comprehensive internal control system and annual self-evaluation to enhance risk management and operational efficiency[58]. - The company has engaged in a related transaction with Chuangyuan New Materials, purchasing ceramic microcrystalline abrasives for a total amount of 4.2711 million RMB, which is not exceeding the approved limit of 8 million RMB[183]. - The company has implemented measures to address potential risks from macroeconomic policies, exchange rates, and raw material costs[154]. Environmental and Social Responsibility - The company aims to achieve a 25% reuse rate of reclaimed water in major cities by 2025, in line with national environmental goals[37]. - The company is committed to supporting the national goal of carbon neutrality and has aligned its business strategies with environmental regulations[36]. - The company recognizes the importance of carbon neutrality and aims to align its strategies with national goals for ecological and environmental improvement[140]. - The company anticipates increased market demand for environmental monitoring and air quality management equipment due to new regulations on VOCs[136]. - The company is preparing for enhanced wastewater treatment capabilities, with national goals for water resource utilization set for 2025[138]. Subsidiaries and Investments - The company has a strong presence in the high-voltage porcelain insulator market through its subsidiaries, Suzhou Electric Porcelain and Gaoke Electric Porcelain, focusing on the production of insulators for ultra-high voltage transmission lines and urban rail transit[29]. - The company’s subsidiary, Jiangsu Sujing, is recognized as a national key high-tech enterprise and a leading supplier in air purification and energy-saving solutions[37]. - The total assets of Jiangsu Sujing, a subsidiary, amounted to 1,903,536,781.69 CNY, with a net profit of 89,591,247.71 CNY[124]. - Suzhou Electric Porcelain, another subsidiary, reported total assets of 1,057,137,811.30 CNY and a net profit of 61,070,281.17 CNY[124]. - The company completed the acquisition of 55% of Shanghai Beifen, enhancing its capabilities in energy-saving and environmental protection[82]. Production and Operations - The company employs a sales-driven production model, with procurement of raw materials based on production plans, and utilizes direct sales and bidding strategies to secure domestic and international orders[30]. - The precision bearing segment, represented by its subsidiary Suzhou Bearings, specializes in needle bearings and rolling elements, contributing to the company's diverse product offerings[31]. - The company emphasizes quality control and has established a comprehensive inspection system to ensure product standards in its porcelain insulator manufacturing[29]. - The environmental engineering segment includes advanced wastewater treatment and air pollution control technologies, addressing the needs of industries such as chemicals, electronics, and food processing[27]. - The company’s products are widely recognized for their quality and reliability, establishing a strong brand presence in the industry[30]. Financial Transactions and Investments - The company invested 30,000,000.00 CNY in a financial services company, representing a 10% stake[115]. - The financial company received approval from the China Banking and Insurance Regulatory Commission for capital increase and adjustment of equity structure on July 12, 2020[116]. - The financial company increased its registered capital from 300 million RMB to 600 million RMB, with the company contributing 30 million RMB, maintaining a 10% ownership stake[194]. - The financial services agreement with the financial company allows for a maximum annual loan amount of 1.1 billion RMB and a maximum annual interest of 50 million RMB[188]. - The company’s financial transactions with the financial company are deemed to have manageable risks, with no significant deficiencies in risk control identified[191]. Challenges and Market Conditions - Approximately 17% of the company's revenue comes from export markets, which face significant uncertainty due to the ongoing COVID-19 pandemic[153]. - The company has established long-term partnerships with key suppliers to mitigate risks associated with raw material price fluctuations[155]. - The company will closely monitor national infrastructure policies to adjust its product structure and enhance market competitiveness[152].