HECHI CHEMICAL(000953)2019-03-11 16:00Financial Performance - The company's operating revenue for 2018 was CNY 231,109,272.85, an increase of 4.63% compared to CNY 220,881,635.31 in 2017[18]. - The net profit attributable to shareholders for 2018 was a loss of CNY 273,793,686.63, representing a decrease of 1,029.30% from a profit of CNY 29,462,410.92 in 2017[18]. - The net cash flow from operating activities improved by 84.25%, reaching a negative CNY 52,463,485.11 in 2018 compared to a negative CNY 333,003,552.25 in 2017[18]. - The total assets at the end of 2018 were CNY 387,181,828.94, a decrease of 52.66% from CNY 817,878,116.61 at the end of 2017[18]. - The net assets attributable to shareholders were negative CNY 249,803,735.89 at the end of 2018, a decline of 1,172.05% from CNY 23,301,439.92 at the end of 2017[18]. - The basic earnings per share for 2018 was -CNY 0.9311, a decrease of 1,029.24% from CNY 0.1002 in 2017[18]. - The company reported a significant increase in non-operating losses, with a total of CNY 279,868,579.46 in net profit excluding non-recurring gains and losses, a 163.61% increase from the previous year[18]. - The company reported a net loss of CNY 27.38 million in 2018, significantly impacted by increased asset impairment losses and a decline in debt restructuring gains and government subsidies compared to the previous year[34]. Revenue Breakdown - Urea products accounted for over 90% of the company's total operating revenue, while liquid carbon dioxide, liquid ammonia, and methanol contributed approximately 10%[27]. - The company recorded a decrease in urea revenue of 9.61% year-on-year, with urea sales amounting to CNY 196.58 million in 2018[39]. - The chemical industry segment generated CNY 216.48 million in revenue, accounting for 93.67% of total operating revenue, reflecting a 3.39% decrease from the previous year[39]. - The company's revenue for the fertilizer industry was approximately ¥196.58 million, with a year-over-year decrease of 5.99% in revenue and a gross margin decline of 6.01%[42]. Operational Challenges - The company faced continuous operational losses due to a decline in urea prices and rising production costs, leading to a decision to halt production and dispose of production facilities[34]. - Fixed asset impairment amounted to CNY 135.42 million due to long-term production line shutdowns[31]. - The company has a long-term suspension of its urea production line due to low product value and market competitiveness, leading to significant operational challenges[122]. - The company is facing major uncertainties regarding its ability to continue as a going concern due to financial losses and negative net assets[192]. Strategic Initiatives - The company plans to acquire a controlling stake in Chongqing Nansong Pharmaceutical Technology Co., Ltd. as part of its strategy for transformation and upgrading[36]. - The company plans to seek development opportunities and optimize its asset structure to achieve effective industrial transformation and sustainable growth[72]. - The company aims to enhance its operational status through mergers and acquisitions, focusing on dual business drivers: urea processing and pharmaceutical intermediates[72]. - The company is in the process of a major asset restructuring, planning to acquire control of Chongqing Nansong Pharmaceutical Technology Co., Ltd., while divesting its urea production-related assets[123]. Environmental Compliance - The company has established a wastewater treatment plant with a design capacity of 2,880 tons per day, which has been operating normally during the reporting period[116]. - The company has implemented various pollution control facilities, including a desulfurization system with a design capacity of 350,000 m³/h, all of which have been functioning properly[116]. - The company has a valid pollution discharge permit effective from December 2017 to December 2020, ensuring compliance with environmental regulations[117]. - The company has submitted a self-monitoring plan for environmental compliance, which includes regular monitoring of wastewater and air pollutants[119]. Governance and Compliance - The audit report issued by Zhongxing Caiguanghua CPA confirmed the company's financial status without any reservations, reflecting the company's financial condition and operating results accurately[85]. - The company has no current stock incentive plans or employee stock ownership plans in place[97]. - The company has not experienced any leakage of insider information during the reporting period[169]. - The company operates independently from its controlling shareholder in terms of business, personnel, assets, organization, and finance, ensuring complete operational autonomy[172]. Shareholder Information - The total number of ordinary shareholders at the end of the reporting period was 24,268, an increase from 23,508 at the end of the previous month[129]. - The largest shareholder, Ningbo Yinyi Holdings Co., Ltd., holds 29.59% of the shares, totaling 87,000,000 shares, which are pledged[129]. - The company has maintained its shareholding ratio at no less than 29.59% since the acquisition date, ensuring stability in its ownership structure[82]. Future Outlook - The company has not provided specific future outlook or performance guidance in the available documents[136]. - The company is actively conducting market research to adjust its product structure and enhance profitability amid industry challenges[73].