河钢股份(000709) - 2021 Q4 - 年度财报

Important Notice, Table of Contents, and Definitions Important Notice The board ensures the report's accuracy and proposes a cash dividend of 1.00 CNY per 10 shares based on repurchased-adjusted share capital 2021 Profit Distribution Plan | Item | Content | | :--- | :--- | | Distribution Basis | 10.34 billion shares (total share capital after repurchases) | | Cash Dividend per 10 Shares | 1.00 CNY (tax inclusive) | | Bonus Shares per 10 Shares | 0 shares | | Capitalization from Reserves | Not implemented | Definitions This section defines key terms and abbreviations used throughout the report, including company, regulatory, and affiliate entities - The report clarifies that "Company/This Company" refers to HBIS Co., Ltd., "HBIS Group" refers to the controlling shareholder HBIS Group Co., Ltd., and defines other major subsidiaries and affiliates[5] Company Profile and Key Financial Indicators Company Information This section provides the company's basic registration, contact, and disclosure information, including its stock abbreviation "HBIS Co." and code "000709" listed on the Shenzhen Stock Exchange Company Basic Information | Item | Content | | :--- | :--- | | Stock Abbreviation | HBIS Co. | | Stock Code | 000709 | | Listing Exchange | Shenzhen Stock Exchange | | Legal Representative | Wang Lanyu | | Company Website | http://www.hebgtgf.com | Key Accounting Data and Financial Indicators The company achieved strong 2021 performance with operating revenue up 38.98% to 149.63 billion CNY, net profit attributable to shareholders up 58.32% to 2.69 billion CNY, and operating cash flow up 91.30% to 14.70 billion CNY 2021 Key Financial Indicators | Indicator | 2021 | 2020 (Restated) | YoY Change | | :--- | :--- | :--- | :--- | | Operating Revenue (CNY) | 149,626,213,823.78 | 107,657,058,670.48 | 38.98% | | Net Profit Attributable to Shareholders (CNY) | 2,688,119,978.62 | 1,697,854,409.52 | 58.32% | | Net Cash Flow from Operating Activities (CNY) | 14,701,808,666.23 | 7,685,281,412.59 | 91.30% | | Basic Earnings Per Share (CNY/share) | 0.24 | 0.12 | 100.00% | | Weighted Average Return on Net Assets | 4.94% | 2.15% | Increased by 2.79 percentage points | | Total Assets (CNY) | 243,419,433,508.61 | 241,229,868,166.70 | 0.91% | Key Quarterly Financial Indicators The company's 2021 quarterly performance fluctuated, with Q3 operating revenue peaking at 46.72 billion CNY and Q4 net profit attributable to shareholders declining to 319 million CNY, with negative non-recurring net profit 2021 Quarterly Financial Data (Unit: CNY) | Indicator | Q1 | Q2 | Q3 | Q4 | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue | 33,033,207,507.16 | 41,997,416,050.39 | 46,716,268,893.90 | 27,879,321,372.33 | | Net Profit Attributable to Shareholders | 481,528,047.49 | 1,039,609,521.71 | 847,551,825.26 | 319,430,584.16 | | Net Profit Attributable to Shareholders (Excl. Non-recurring Items) | 476,366,537.79 | 1,033,620,668.78 | 844,682,227.75 | -171,995,064.83 | | Net Cash Flow from Operating Activities | 3,136,231,442.52 | 5,378,559,357.96 | 14,091,728,646.36 | -7,904,710,780.61 | Non-recurring Gains and Losses Items and Amounts In 2021, total non-recurring gains and losses significantly increased to 505 million CNY, primarily due to a turnaround in "other non-operating income and expenses" and higher government subsidies Non-recurring Gains and Losses Items (Unit: CNY) | Item | 2021 Amount | 2020 Amount | | :--- | :--- | :--- | | Government Subsidies | 250,703,828.56 | 83,185,826.31 | | Other Non-operating Income and Expenses | 398,972,418.70 | -10,358,048.51 | | Total | 505,445,609.13 | 79,143,003.13 | Management Discussion and Analysis Industry Overview and Main Business In 2021, China's crude steel output decreased by 3% to 1.033 billion tons; the company, a key player, has an annual capacity of 30 million tons of steel and leads in vanadium-titanium technology - In 2021, China's crude steel output decreased by 3% to 1.033 billion tons, steel product exports increased by 24.6% year-on-year, and industry profitability remained favorable[19] - The company has an annual production capacity of 30 million tons of high-quality steel products and 22,000 tons of vanadium products, widely used in high-end markets such as automotive, home appliances, and aerospace[20] Analysis of Core Competencies The company's core competencies include advanced equipment, a comprehensive product line, strong green development with Leigang Company achieving environmental A-grade, significant technological innovation, and a strategic geographical advantage in the Beijing-Tianjin-Hebei region - The company possesses the world's first "sub-molten salt method high-efficiency vanadium extraction clean production line," leading globally in vanadium-titanium smelting technology[21] - The company has achieved significant results in green transformation, with Leigang Company being recognized as an environmental A-grade performance enterprise, setting a benchmark for the industry[23] - Located in North China, surrounding Beijing-Tianjin and bordering the Bohai Sea, the company will benefit from continuous development opportunities brought by Beijing-Tianjin-Hebei coordinated development and Xiongan New Area construction[25] Main Business Analysis In 2021, the company achieved strong operating results with 149.6 billion CNY in revenue and 2.7 billion CNY in net profit, driven by advancements in production, marketing, technology, and integrated operations 2021 Key Production and Operation Data | Indicator | 2021 Output/Amount | | :--- | :--- | | Iron Production | 25.31 million tons | | Steel Production | 25.68 million tons | | Steel Product Production | 25.21 million tons | | Operating Revenue | 149.6 billion CNY | | Total Profit | 3.7 billion CNY | | Net Profit Attributable to Parent | 2.7 billion CNY | - The company fully launched a "marketing center + regional company" marketing model reform, forming an integrated marketing system that enhanced its market influence[28] - The company developed nearly a hundred new products, with many filling domestic gaps or achieving import substitution, and high-end products applied in key projects such as "Hualong One" and Winter Olympics venues[29] Revenue and Cost In 2021, operating revenue grew 38.98%, with steel industry revenue up 35.44%; plates were the main product revenue source, while wire rods and strips saw the largest growth of 110.62%; North and East China were key markets, and the steel industry's gross profit margin was 11.08% 2021 Operating Revenue Composition (Unit: CNY) | Category | 2021 Amount | % of Operating Revenue | YoY Change | | :--- | :--- | :--- | :--- | | By Industry | | | | | Steel Industry | 139,171,537,944.81 | 93.02% | 35.44% | | By Product | | | | | Plates | 101,828,156,083.90 | 68.06% | 48.19% | | Bars and Sections | 17,746,430,617.56 | 11.86% | 7.43% | | By Region | | | | | North China | 95,274,340,991.40 | 63.68% | 31.31% | | East China | 35,165,679,020.09 | 23.50% | 56.33% | 2021 Key Segment Gross Profit Margin | Category | Operating Revenue (CNY) | Operating Cost (CNY) | Gross Profit Margin | YoY Change in Gross Profit Margin | | :--- | :--- | :--- | :--- | :--- | | Steel Industry | 139,171,537,944.81 | 123,751,780,444.12 | 11.08% | -0.79% | | Plates | 101,828,156,083.90 | 89,009,461,282.02 | 12.59% | 0.06% | | North China | 95,274,340,991.40 | 84,230,942,893.45 | 11.59% | -1.15% | - Sales to the company's top five customers accounted for 58.79% of total annual sales, with the largest customer, HBIS Group Co., Ltd., accounting for 49.06%; purchases from the top five suppliers accounted for 65.85% of total annual purchases, with the largest supplier, HBIS Group Co., Ltd., accounting for 60.95%, indicating a high degree of related party transactions with the controlling shareholder[42][43] Expenses The company's expense structure changed significantly, with selling expenses down 68.60% due to business model changes, while administrative, financial, and R&D expenses increased by 25.02%, 16.11%, and 31.20% respectively 2021 Period Expenses (Unit: CNY) | Expense Item | 2021 | 2020 | YoY Change | Significant Change Explanation | | :--- | :--- | :--- | :--- | :--- | | Selling Expenses | 88,792,991.02 | 282,799,913.66 | -68.60% | Business model change | | Administrative Expenses | 3,272,479,362.19 | 2,617,617,015.79 | 25.02% | | | Financial Expenses | 5,851,683,500.29 | 5,039,950,629.79 | 16.11% | | | R&D Expenses | 3,700,740,784.42 | 2,820,729,671.94 | 31.20% | | R&D Investment In 2021, R&D investment totaled 3.701 billion CNY, up 31.20%, focusing on high-end technologies to enhance product competitiveness and achieve import substitution, with an increased proportion of highly educated R&D personnel R&D Investment Overview | Indicator | 2021 | 2020 | Change Percentage | | :--- | :--- | :--- | :--- | | R&D Investment Amount (CNY) | 3,700,740,784.42 | 2,820,729,671.94 | 31.20% | | R&D Investment as % of Operating Revenue | 2.47% | 2.62% | -0.15% | | Number of R&D Personnel (persons) | 477 | 494 | -3.44% | Cash Flow The company's 2021 cash flow significantly improved, with operating cash flow surging 91.30% to 14.70 billion CNY, investing cash flow turning positive with a 5.40 billion CNY net inflow, and overall cash and cash equivalents increasing by 10.26 billion CNY Key Cash Flow Statement Items (Unit: CNY) | Item | 2021 | 2020 | YoY Change | | :--- | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 14,701,808,666.23 | 7,685,281,412.59 | 91.30% | | Net Cash Flow from Investing Activities | 5,400,017,687.97 | -12,655,750,912.34 | -142.67% | | Net Cash Flow from Financing Activities | -9,790,683,188.59 | 7,379,662,587.28 | -232.67% | | Net Increase in Cash and Cash Equivalents | 10,256,322,646.60 | 2,404,600,034.12 | 326.53% | Analysis of Assets and Liabilities As of 2021 year-end, total assets were 243.42 billion CNY, with fixed assets decreasing to 54.91% and construction in progress increasing to 8.71%, reflecting a significant project construction phase Key Balance Sheet Items Change Analysis | Item | 2021 Year-end Amount (CNY) | % of Total Assets | 2021 Beginning Amount (CNY) | % of Total Assets | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | | Cash and Cash Equivalents | 35,016,461,423.12 | 14.39% | 28,419,897,297.11 | 11.78% | 2.61% | | Fixed Assets | 133,650,011,960.28 | 54.91% | 148,507,538,030.83 | 59.12% | -4.21% | | Construction in Progress | 21,212,527,252.42 | 8.71% | 13,953,232,969.09 | 5.78% | 2.93% | | Short-term Borrowings | 67,592,324,073.26 | 27.77% | 61,817,984,446.34 | 25.63% | 2.14% | - Of the cash and cash equivalents at period-end, 10.88 billion CNY were restricted funds, primarily for bank acceptance bill deposits, letter of credit deposits, and frozen funds[54] Analysis of Investment Status The company made significant equity investments totaling 5.69 billion CNY, including a 5 billion CNY capital increase in Leigang Company and establishing two new joint ventures with 51% stakes 2021 Significant Equity Investments | Investee Company | Investment Method | Investment Amount (CNY) | Shareholding Percentage | | :--- | :--- | :--- | :--- | | Leigang Company | Capital Increase | 5,000,000,000.00 | 51.00% | | HBIS Group Finance Company | Capital Increase | 294,000,000.00 | 49.00% | | Handan Energy Steel Co., Ltd. | New Establishment | 255,000,000.00 | 51.00% | | Handan Huafeng Energy Co., Ltd. | New Establishment | 142,800,000.00 | 51.00% | Analysis of Major Holding and Participating Companies All major subsidiaries were profitable in 2021, with Handan Baosteel Company contributing 671 million CNY in net profit, and the company established two new controlled subsidiaries Major Subsidiaries' 2021 Operating Performance (Unit: CNY) | Company Name | Operating Revenue | Operating Profit | Net Profit | | :--- | :--- | :--- | :--- | | Leigang Company | 24,318,602,898.04 | 553,380,195.53 | 499,272,292.35 | | Handan Baosteel Company | 35,803,069,658.60 | 889,305,208.31 | 670,687,418.21 | | Medium-Thick Plate Company | 14,621,090,230.50 | 108,022,443.46 | 94,927,028.64 | Outlook on Company's Future Development The company plans to produce 25.68 million tons of iron and 26.36 million tons of crude steel in 2022, focusing on enhancing steel business efficiency and profitability while addressing environmental, cost, financial, and pandemic risks 2022 Operating Plan | Product | Planned Output | | :--- | :--- | | Iron | 25.68 million tons | | Crude Steel | 26.36 million tons | | Steel Products | 25.10 million tons | | Vanadium Slag | 0.17 million tons | - The main risks faced by the company include: - Environmental Risk: National "carbon peak and carbon neutrality" goals and strict environmental requirements in the Beijing-Tianjin-Hebei region - Cost Risk: High prices for major raw materials such as iron ore and coking coal - Financial Risk: High asset-liability ratio, and potential impact of national credit policy adjustments on interest expenses - Epidemic Risk: Recurring domestic epidemics may affect normal production and operations[69][70][71][72] Corporate Governance Overview of Corporate Governance The company maintains a sound corporate governance structure, revising nine internal systems and conducting self-inspection and rectification in 2021 to enhance compliance and governance standards - The company's corporate governance structure is sound, with clear responsibilities and effective checks and balances among the general meeting of shareholders, board of directors, supervisory board, and management[74] - In 2021, the company revised nine internal systems and completed self-inspection and rectification for the special action on listed company governance, in accordance with regulatory requirements[74][112] Information on Directors, Supervisors, and Senior Management Changes occurred in the company's directors, supervisors, and senior management during the period, with former chairman Liu Jian resigning, and the report details current executives' backgrounds, experiences, and remuneration, including those with roles in related parties - During the reporting period, former Chairman Liu Jian, Director Tian Xin, Director Zhu Huaming, and former Employee Supervisor Zhang Jianzhong resigned due to work reasons[79][81] Total Pre-tax Remuneration for Selected Senior Executives in 2021 (Unit: Ten Thousand CNY) | Name | Position | Total Remuneration | | :--- | :--- | :--- | | Xu Bin | General Manager | 106.28 | | Jia Guosheng | Deputy General Manager | 84.5 | | Li Maoguang | Deputy General Manager | 85.5 | | Chang Guangshen | Director, Chief Accountant | 73.37 | | Zhu Huaming | Chairman of Supervisory Board | 78.03 | Performance of Board of Directors and Special Committees In 2021, the Board of Directors held 10 meetings, with good attendance, and its special committees actively fulfilled their duties, reviewing major proposals including investments and audits - The Board of Directors held 10 meetings throughout the year, with all directors diligently performing their duties and raising no objections to company matters[91][92][93] - The Audit Committee held 5 meetings, reviewing matters such as the annual audit plan, reappointment of audit firms, and quarterly financial reports[95] Internal Control The company's 2021 internal control self-assessment found effective implementation with no material deficiencies, covering 97.10% of consolidated assets and 96.22% of revenue, and the accounting firm issued an unqualified internal control audit report - The company's internal control self-assessment report concluded that effective internal controls over financial reporting were maintained in all material respects, with no material or significant deficiencies found[106][109] - The accounting firm issued a standard unqualified internal control audit report, consistent with the board's self-assessment report[110][111] Environmental and Social Responsibility Significant Environmental Issues The company and its major subsidiaries are key pollutant emitters; Leigang Company achieved environmental A-grade, but Tangshan Medium-Thick Plate Company received significant administrative penalties for multiple environmental violations - All of the company's subsidiaries and branches have established comprehensive pollution control facilities, and Leigang Company has been recognized as an environmental A-grade performance enterprise[117] - During the reporting period, subsidiary Tangshan Medium-Thick Plate Company received administrative penalties totaling over ten million CNY and had its pollutant discharge permit revoked due to various reasons, including unactivated dust collectors, failure to implement heavy pollution weather controls, exceeding online monitoring limits, and evading supervision for atmospheric pollutant discharge[122][123][124][125] Significant Matters Fulfillment of Commitments The controlling shareholder, HBIS Group, is fulfilling long-term commitments from asset restructuring, including avoiding horizontal competition and resolving land and property title issues - HBIS Group committed to resolving horizontal competition issues with the listed company through asset injection, entrusted management, and other means, and this commitment is currently being fulfilled[128] Significant Related Party Transactions In 2021, the company conducted large-scale daily related party transactions totaling 159.19 billion CNY, primarily for raw material procurement and product sales, with significant transactions involving the ultimate controlling party, HBIS Group - The actual amount of daily related party transactions in 2021 was 159.19 billion CNY, accounting for 98.79% of the approved limit; transactions primarily involved the purchase and sale of goods, and the provision and acceptance of services[150][151] Key Transactions with HBIS Group Co., Ltd. (Ultimate Controlling Party) (Unit: Ten Thousand CNY) | Transaction Type | Transaction Content | Transaction Amount | | :--- | :--- | :--- | | Purchase of Goods | Coal, Steel Products, Iron Concentrate | 2,286,704.04 | | Sale of Goods | Vanadium Products, Steel Billets and Steel Products, Utilities, etc. | 2,181,925.08 | - The company, together with Hebei Steel Industry Transformation and Upgrading Fund, jointly increased capital in Leigang Company, and together with HBIS Group, jointly increased capital in HBIS Group Finance Company[157] Significant Litigation and Arbitration Matters The company is involved in a significant ongoing lawsuit with Asia Union (Hong Kong) International Investment Co., Ltd. for 762 million CNY and recognized 5.66 million CNY in trusteeship fees from managing HBIS Group assets - The company was sued by Asia Union (Hong Kong) International Investment Co., Ltd. for a contract dispute, involving an amount of 761.56 million CNY; after the first instance ruling dismissed the case, the plaintiff appealed, and the Hebei Provincial High Court ruled for a retrial[137] - The company managed equity and assets of related parties such as Xuansteel Group, Wuyang Iron & Steel, and Tangshan Stainless Steel under trusteeship, recognizing 5.66 million CNY in trusteeship fee income in 2021[159][160] Share Changes and Shareholder Information Share Changes and Shareholder Information As of 2021 year-end, total share capital remained unchanged at 10.62 billion shares; Handan Iron & Steel Group is the controlling shareholder with 39.73%, and the top three shareholders, all HBIS Group subsidiaries, collectively hold 61.25% - The company's total share capital remained unchanged during the reporting period, totaling 10,618,607,852 shares[164] Top Three Shareholders' Shareholding | Shareholder Name | Shareholding Percentage | Number of Shares Held | | :--- | :--- | :--- | | Handan Iron & Steel Group Co., Ltd. | 39.73% | 4,218,763,010 | | Tangshan Iron & Steel Group Co., Ltd. | 17.45% | 1,853,409,753 | | Chengde Iron & Steel Group Co., Ltd. | 4.07% | 432,063,701 | - The company's actual controller is the Hebei Provincial People's Government State-owned Assets Supervision and Administration Commission[174] Bond-Related Information Bond Information As of period-end, the company had 5 outstanding bonds totaling 7.4 billion CNY, including a green bond, all listed on the Shenzhen Stock Exchange, with proceeds used as committed for environmental projects and working capital Overview of Outstanding Bonds | Bond Abbreviation | Bond Code | Maturity Date | Bond Balance (CNY) | Interest Rate | | :--- | :--- | :--- | :--- | :--- | | 18 HBIS G1 | 111071 | 2023-03-26 | 700,000,000.00 | 5.42% | | 19 HBIS 01 | 112999 | 2024-11-26 | 1,500,000,000.00 | 4.08% | | 19 HBIS 02 | 149011 | 2024-12-12 | 1,500,000,000.00 | 4.11% | | 20HBIS01 | 149099 | 2025-04-20 | 1,500,000,000.00 | 3.38% | | 20HBIS02 | 149181 | 2025-07-30 | 1,500,000,000.00 | 4.20% | - All bond proceeds have been used as planned, with no instances of non-compliant use[180][185] Financial Report Audit Report Zhongxingcai Guanghua Certified Public Accountants issued a standard unqualified audit opinion on the 2021 financial statements, with steel product and billet revenue recognition identified as a key audit matter - The audit opinion type is a standard unqualified opinion[189] - A key audit matter is "revenue recognition for steel products and billets," for which auditors performed procedures including internal control testing, contract examination, confirmations, fair value analysis, and cut-off testing[191] Main Financial Statements As of 2021 year-end, total assets were 243.42 billion CNY, total liabilities 182.53 billion CNY, and total equity attributable to the parent was 51.04 billion CNY, with 149.63 billion CNY in total operating revenue and 2.69 billion CNY in net profit Consolidated Balance Sheet Summary (2021-12-31) | Item | Amount (CNY) | | :--- | :--- | | Total Assets | 243,419,433,508.61 | | Total Liabilities | 182,527,663,181.04 | | Total Equity Attributable to Parent Company Owners | 51,036,297,850.42 | Consolidated Income Statement Summary (2021) | Item | Amount (CNY) | | :--- | :--- | | Total Operating Revenue | 149,626,213,823.78 | | Operating Profit | 3,269,016,975.75 | | Total Profit | 3,667,989,394.45 | | Net Profit Attributable to Parent Company Shareholders | 2,688,119,978.62 | Consolidated Cash Flow Statement Summary (2021) | Item | Amount (CNY) | | :--- | :--- | | Net Cash Flow from Operating Activities | 14,701,808,666.23 | | Net Cash Flow from Investing Activities | 5,400,017,687.97 | | Net Cash Flow from Financing Activities | -9,790,683,188.59 | | Net Increase in Cash and Cash Equivalents | 10,256,322,646.60 |