NFC(SZ:000758)2019-04-22 16:00Financial Performance - The company's operating revenue for 2018 was ¥14,802,064,398.94, a decrease of 4.05% compared to ¥15,427,363,380.28 in 2017[23]. - Net profit attributable to shareholders was ¥119,725,590.77, down 40.43% from ¥200,980,863.92 in the previous year[23]. - The net profit after deducting non-recurring gains and losses was ¥61,914,155.75, a decline of 60.27% compared to ¥155,841,009.31 in 2017[23]. - The net cash flow from operating activities increased by 70.11% to ¥2,742,843,022.50 from ¥1,612,418,583.15 in 2017[23]. - Total assets at the end of 2018 were ¥25,273,727,481.22, reflecting a 12.13% increase from ¥22,538,977,643.70 at the end of 2017[23]. - The company reported a basic earnings per share of ¥0.0608, down 40.45% from ¥0.1021 in 2017[23]. - The weighted average return on equity was 2.31%, a decrease of 1.63% from 3.94% in the previous year[23]. - The company achieved a cash dividend payout ratio of 100% of its distributable profits in 2018, with total distributable profits amounting to 814,892,440.42 yuan[147]. Business Operations - The company has expanded its main business scope to include the development of non-ferrous metal resources, primarily focusing on aluminum and zinc[20]. - The company operates in the mining industry, specifically in the non-ferrous metal mining sector, with a focus on zinc and rare earth resources[40]. - As of December 31, 2018, the company holds mining rights for three mines and 16 exploration rights, with total metal resources of 383.52 thousand tons of zinc and 163.2 thousand tons of lead[42]. - The company acquired a 51% stake in the Indonesian Darui lead-zinc mine in September 2018, which is expected to significantly increase its lead-zinc resource reserves[41]. - The average zinc grade at the Darui mine is 10.73%, with total zinc resources estimated at 227.15 thousand tons as of December 31, 2018[43]. - The company's international engineering contracting business accounted for over 30% of its audited revenue in 2018, with a total business volume of 1.12 trillion RMB in China's overseas contracting[44]. - The company aims to enhance its international competitiveness by expanding into emerging markets and diversifying its project portfolio[48]. - The company has accumulated over 30 years of experience in international engineering contracting and over 10 years in non-ferrous resource development, establishing a strong brand presence[49]. Risk Management - The company acknowledges multiple risks in its international engineering contracting business, including cyclical downturns in resource development and ongoing losses in equipment manufacturing[5]. - The company has a comprehensive risk management strategy to address potential environmental and safety production risks[5]. - The company is enhancing its risk management system to cover all business areas and ensure compliance with legal and policy changes[133]. - The company has established a comprehensive risk control mechanism, addressing over 1,500 hazardous sources with implemented control measures[57]. Environmental and Safety Compliance - The company is enhancing its environmental protection measures in response to increasing regulatory pressures, including improving pollution control projects[135]. - The company has been actively conducting environmental hazard inspections and training to mitigate risks associated with its operations[138]. - The company has committed to enhancing environmental protection awareness and compliance with relevant laws and regulations[168]. - The company invested a total of 40.79 million yuan in safety production throughout the year, enhancing its safety management system and training programs[57]. - The company has taken measures to stop discharging tailings and has completed vegetation restoration work on the tailings pond[168]. Challenges and Market Conditions - The company experienced a significant drop in zinc prices, approximately 20%, due to a tightening demand environment in the industrial metal sector[37]. - The macroeconomic outlook indicates continued pressure on non-ferrous metal prices due to domestic economic slowdown and trade conflicts, with a potential demand boost from proactive fiscal policies in 2019[125]. - The zinc market is expected to shift from shortage to surplus in 2019, with unclear demand from downstream industries such as real estate and infrastructure[126]. - The company faces challenges such as increased competition and economic pressures in emerging markets, necessitating a focus on enhancing its resource integration and financing capabilities[48]. Investments and Acquisitions - The company made a significant equity investment of ¥1,363,061,700.00 in PT Dairi Prima Mineral, acquiring a 51% stake[110]. - The company plans to focus on resource development and expand controllable resources in lead and zinc mining, leveraging the "Belt and Road" initiative[74]. - The company is focused on improving safety and environmental protection measures to support high-quality development[134]. Corporate Governance - The company emphasizes the importance of accurate and complete financial reporting, with key executives affirming the integrity of the annual report[4]. - The company operates under the supervision of the State-owned Assets Supervision and Administration Commission and the China Securities Regulatory Commission[11]. - The company has not experienced any changes in its controlling shareholder since its listing[20]. - The company has engaged Da Hua Certified Public Accountants for auditing services during the reporting period[21]. Legal Matters - The company reported a total of 98 ongoing litigation cases, with a total amount involved of approximately RMB 360.05 million[163]. - The company is involved in a lawsuit with a total amount of 10,000,000 CNY related to a letter of credit dispute, with no provision for liabilities formed[164]. - The company has been fined 200,000 CNY for environmental violations related to tailings discharge[167]. - A significant fine of 1,938,690 CNY was imposed on the company for failing to timely transport desulfurization gypsum to an environmentally compliant site[167].