HDXY(SZ:002002)2019-04-22 16:00Financial Performance - The company's operating revenue for 2018 was ¥6,044,700,259.24, a decrease of 7.58% compared to ¥6,540,626,308.65 in 2017[19]. - The net profit attributable to shareholders for 2018 was ¥610,912,665.53, down 39.21% from ¥1,004,882,891.14 in 2017[19]. - The net cash flow from operating activities increased by 64.27% to ¥1,429,961,949.29 in 2018, compared to ¥870,518,098.78 in 2017[19]. - The company's total assets at the end of 2018 were ¥14,141,946,396.53, a decrease of 1.36% from ¥14,337,649,856.16 at the end of 2017[19]. - The weighted average return on equity decreased to 10.31% in 2018 from 21.93% in 2017, reflecting a significant decline in profitability[19]. - The total cash dividend distributed to shareholders for the year 2018 amounted to ¥154,581,089.34, representing 25.30% of the net profit attributable to ordinary shareholders[156]. - The total cash dividend, including other methods such as share buybacks, reached ¥194,650,074.69, which is 100% of the distributable profit[157]. Business Expansion and Diversification - The company has expanded its main business to include the production and sales of hydrogen, following the establishment of a hydrogen energy research institute in December 2016[16]. - The company completed the acquisition of New Damao Rare Earth, increasing its main business to include rare earth products such as rare earth powder and carbonate[16]. - The company has diversified its operations to include electronic trading services and logistics following the acquisition of Plastic Exchange in January 2016[16]. - The company is developing a complete hydrogen energy industry chain, including production, storage, and application, with plans to build hydrogen refueling stations in Inner Mongolia[28]. - The company is actively developing environmentally friendly building materials, such as the three-in-one wall panel, to support new urbanization and various construction projects[30]. - The company is expanding its overseas market for soil conditioners and remediation services, aligning with the national "Belt and Road" initiative[31]. Research and Development - The company has established three R&D centers in Guangzhou, Yangzhou, and Wuhai, focusing on various product innovations[27]. - The company has increased its R&D investment by 12.99% to ¥186,243,249.86 in 2018, representing 3.08% of its operating revenue, up from 2.52% in 2017[97]. - The company has obtained a total of 69 authorized patents, including 7 invention patents and 62 utility model patents, with 33 patents currently under application[92]. - The company is focusing on the development of new products and technologies to ensure sustainable growth and enhance profitability[68]. Market and Industry Trends - The hydrogen energy industry is supported by national policies, with a focus on developing fuel cell vehicles and related infrastructure, indicating a significant market potential[34]. - The demand for PVC is expected to continue growing due to increased public rental housing construction and urban infrastructure projects[47]. - The soil remediation industry in China is in its early development stage, with its market value currently less than 1% of the total environmental industry, indicating significant growth potential[61]. - The central government allocated 405 billion yuan for pollution prevention in 2018, with expectations to reach 600 billion yuan in 2019, highlighting the financial support for soil remediation efforts[60]. Risk Management - The company has faced risks related to market environment, safety, and environmental protection, but no significant risks that would materially impact operations were reported[5]. - The company emphasizes the importance of risk awareness for investors regarding forward-looking statements in its annual report[5]. - The company is managing financial risks associated with its capital-intensive industry by optimizing its financial structure and improving fund utilization efficiency[144]. - The company is addressing human resource risks by focusing on the recruitment and training of experienced personnel to support its expanding business operations[143]. Shareholder and Corporate Governance - The company has committed to maintaining the independence of its operations post-restructuring, ensuring no misuse of company funds or guarantees provided[159]. - The company has implemented measures to ensure that its return on investment is not diluted, with commitments from directors and senior management to uphold these standards[161]. - The company has undertaken to comply with relevant laws and regulations to avoid any potential competition with its own business[161]. - The company has established a link between the implementation of its compensation measures and the remuneration system set by the remuneration committee[165]. Environmental and Safety Commitment - The company is committed to safety and environmental protection, with dedicated departments to ensure compliance with regulations and enhance safety management practices[143]. - The company is implementing a new technology for the recovery and utilization of waste gas from calcium carbide furnaces, aimed at improving energy efficiency and reducing CO2 emissions[95]. - The company has initiated a project to develop a soil conditioner that combines various new technologies to enhance market competitiveness[96]. Financial Activities and Capital Structure - The company is actively engaging in capital operations, including the issuance of convertible bonds and share repurchase plans, to strengthen its main business and improve its capital structure[141]. - The company has multiple financing agreements with various banks, indicating a diversified funding strategy[192]. - The company reported a total of 121,534.15 million raised through non-public share issuance, with 21.53% of the funds remaining unused[114]. Subsidiary Performance - The subsidiary Wuhai Chemical reported total assets of CNY 12,945.95 million and net profit of CNY 585.12 million[124]. - The subsidiary Plastic Exchange reported total assets of CNY 971.60 million and net profit of CNY 110.29 million[125].