MAE(SZ:002009)2022-04-18 16:00Important Notice, Table of Contents, and Definitions This section provides essential preliminary information, the report's structure, and key terminology definitions Company Profile and Key Financial Indicators This chapter presents the company's basic information and key financial indicators for 2021, highlighting significant revenue and net profit growth, primarily from the lithium battery recycling business Key Accounting Data and Financial Indicators In 2021, the company achieved significant performance growth with revenue up 5.19% and net profit attributable to shareholders increasing by 146.77%, while operating cash flow decreased by 40.84% | Indicator | 2021 | 2020 | Year-on-year Change | | :--- | :--- | :--- | :--- | | Operating Revenue (CNY) | 3,778,545,928.40 | 3,592,247,899.91 | 5.19% | | Net Profit Attributable to Shareholders (CNY) | 150,647,126.91 | 61,048,134.05 | 146.77% | | Net Profit Attributable to Shareholders (Excluding Non-Recurring Items) (CNY) | 87,609,812.59 | 4,563,570.18 | 1,819.76% | | Net Cash Flow from Operating Activities (CNY) | 91,246,755.77 | 154,250,253.66 | -40.84% | | Basic Earnings Per Share (CNY/share) | 0.41 | 0.16 | 156.25% | | Weighted Average Return on Net Assets | 7.55% | 2.86% | Increased by 4.69 percentage points | | Total Assets (CNY) | 6,223,484,635.26 | 5,921,892,908.06 | 5.09% | | Net Assets Attributable to Shareholders (CNY) | 2,076,363,507.31 | 1,932,061,290.66 | 7.47% | Quarterly Key Financial Indicators The company's 2021 quarterly operating revenue showed steady growth, peaking in Q3, while net profit attributable to shareholders significantly declined in Q4, with non-recurring net profit turning to a loss | Indicator (Unit: CNY) | Q1 | Q2 | Q3 | Q4 | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue | 726,154,951.44 | 933,089,566.01 | 1,096,318,856.30 | 1,022,982,554.65 | | Net Profit Attributable to Shareholders | 40,287,460.11 | 37,569,063.23 | 68,738,323.01 | 4,052,280.56 | | Net Profit Attributable to Shareholders (Excluding Non-Recurring Items) | 36,655,695.19 | 27,885,010.30 | 62,522,773.25 | -39,453,666.15 | | Net Cash Flow from Operating Activities | 30,374,062.04 | -52,469,398.95 | 50,322,337.09 | 63,019,755.59 | Non-Recurring Gains and Losses Items and Amounts In 2021, the company's non-recurring gains and losses totaled 63.04 million CNY, an increase from the previous year, primarily driven by non-current asset disposal gains, government subsidies, and fair value changes in financial assets | Item (Unit: CNY) | 2021 Amount | 2020 Amount | | :--- | :--- | :--- | | Non-current asset disposal gains and losses | 31,531,971.00 | 56,414,072.83 | | Government subsidies included in current profit and loss | 24,925,899.78 | 44,721,290.56 | | Fair value changes and disposal gains/losses of financial assets | 29,705,272.73 | 11,006,996.74 | | Other non-operating income and expenses | -12,258,590.29 | 3,894,004.60 | | Total | 63,037,314.32 | 56,484,563.87 | Management Discussion and Analysis This chapter analyzes the company's industry environment, core businesses, operating results, and future outlook, highlighting the lithium battery recycling business as the primary growth driver Industry Overview In 2021, the company's various industries experienced positive development, driven by the growth of new energy vehicles, the rapid expansion of lithium battery recycling, and policy support for renewable resources - In 2021, China's new energy vehicle production and sales both increased by 1.6 times, with market penetration reaching 13.4%, boosting demand in the intelligent equipment industry28 - The Chinese lithium battery market is projected to exceed 1,450 GWh in shipments by 2025, with the theoretical market size for recycled waste lithium batteries reaching 94.32 billion CNY by 2026, indicating rapid industry growth3132 - Policy guidance aims for steel industry utilization of scrap steel resources to exceed 300 million tons by 2025, driving continuous growth in the renewable resource processing equipment industry36 Principal Businesses and Operating Results The company's four core business segments—intelligent equipment, lithium battery recycling, recycling equipment, and heavy machinery—achieved revenue and profit growth in 2021, with lithium battery recycling showing the most significant performance | Business Segment | 2021 Sales Revenue (CNY 10,000) | Year-on-year Change | 2021 Gross Margin | Year-on-year Change | | :--- | :--- | :--- | :--- | :--- | | Intelligent Equipment | 156,952.50 | +2.69% | 16.54% | -3.19% | | Lithium Battery Recycling | 89,614.05 | +214.07% | 35.68% | +13.24% | | Recycling Equipment | 45,280.16 | +12.88% | 17.72% | +2.44% | | Heavy Machinery | 75,195.39 | -31.25% | 9.56% | -7.59% | - New orders for the intelligent equipment business totaled 1.63 billion CNY, with new energy vehicle projects accounting for 67%, serving major clients including Great Wall Motor, Volkswagen, BYD, Li Auto, and Tesla52 - Tianqi Jintaige, the core subsidiary in lithium battery recycling, continues to expand capacity, initiated the layout of lithium iron phosphate battery recycling, and established recycling channels with FAW and JD Technology545556 - The company implemented its first equity incentive plan, granting 8.75 million restricted shares to 46 management and core employees, with performance targets of net profits not less than 130 million CNY, 230 million CNY, 330 million CNY, and 450 million CNY for 2021-2024 respectively6061 Analysis of Core Competencies The company's core competencies stem from its "automotive full lifecycle" strategic layout, continuous R&D innovation, leading lithium battery recycling capacity, robust supply chain, and efficient management - The company's strategic layout around the automotive full lifecycle, from intelligent equipment to equipment maintenance and from fuel vehicle dismantling to power battery recycling, fosters synergistic effects64 - Tianqi Jintaige, the core subsidiary in the lithium battery recycling segment, boasts industry-leading capacity and plans to expand to 100,000 tons of waste lithium battery processing capacity by the end of 2023 (including 50,000 tons of ternary and 50,000 tons of lithium iron phosphate)67 Analysis of Main Business This section analyzes the company's 2021 revenue, costs, expenses, R&D, and cash flow, highlighting the lithium battery recycling business as the primary driver of revenue growth and increased R&D investment Revenue and Cost In 2021, the intelligent equipment division contributed the largest share of operating revenue (41.54%), but the lithium battery recycling division saw the fastest growth, with revenue surging by 214.07% and its share rising to 23.72% | By Industry | Operating Revenue (CNY) | Proportion of Total Revenue | Year-on-year Change | Gross Margin | Gross Margin Year-on-year Change | | :--- | :--- | :--- | :--- | :--- | :--- | | Intelligent Equipment Division | 1,569,524,991.34 | 41.54% | 2.69% | 16.54% | -3.19% | | Lithium Battery Recycling Division | 896,140,503.00 | 23.72% | 214.07% | 35.68% | 13.24% | | Heavy Machinery Division | 751,953,859.86 | 19.90% | -31.25% | 9.56% | -7.59% | | Recycling Equipment Division | 452,801,563.25 | 11.98% | 12.88% | 17.72% | 2.44% | - The company's top five customers accounted for 15.88% of total annual sales, and the top five suppliers accounted for 9.04% of total annual purchases, indicating low customer and supplier concentration8384 Expenses During the reporting period, the company's four major expenses showed significant changes, with sales expenses decreasing due to new accounting standards, while management and R&D expenses increased | Expense Item | 2021 (CNY) | 2020 (CNY) | Year-on-year Change | Main Reason for Change | | :--- | :--- | :--- | :--- | :--- | | Sales Expenses | 65,027,115.73 | 104,183,980.77 | -37.58% | Transportation costs reclassified to cost under new revenue standard | | Administrative Expenses | 226,295,657.60 | 200,132,198.87 | 13.07% | Amortization expense from restricted stock incentive plan | | Financial Expenses | 77,488,661.58 | 87,551,360.96 | -11.49% | Decrease in interest expense due to reduced short-term borrowings | | Research and Development Expenses | 199,106,226.37 | 147,288,210.50 | 35.18% | Increased R&D investment by core subsidiary Tianqi Jintaige | Research and Development Investment In 2021, the company's total R&D investment reached 231 million CNY, a 30.75% increase, primarily focused on intelligent equipment and lithium battery recycling technologies to enhance core competitiveness | Indicator | 2021 | 2020 | Change Percentage | | :--- | :--- | :--- | :--- | | R&D Investment Amount (CNY) | 230,863,541.70 | 176,569,894.95 | 30.75% | | R&D Investment as % of Operating Revenue | 6.11% | 4.92% | Increased by 1.19 percentage points | | Number of R&D Personnel | 393 | 405 | -2.96% | - Key R&D projects include 5G-based collaborative AGV platforms, intelligent conveying equipment technology, electronic-grade nickel carbonate, and lithium iron phosphate battery recycling technology, aiming to overcome technical challenges and enhance market competitiveness8889 Cash Flow In 2021, net cash flow from operating activities decreased by 40.84% to 91.25 million CNY, while net cash flow from investing activities significantly improved to 0.98 million CNY due to a lower base from a major acquisition in the prior period | Item (Unit: CNY) | 2021 | 2020 | Year-on-year Change | | :--- | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 91,246,755.77 | 154,250,253.66 | -40.84% | | Net Cash Flow from Investing Activities | 980,653.44 | -320,469,201.26 | 100.31% | | Net Cash Flow from Financing Activities | -9,349,634.74 | 46,692,292.53 | -120.02% | | Net Increase in Cash and Cash Equivalents | 76,322,458.19 | -126,495,842.13 | 160.34% | Outlook for Future Development The company plans to deepen its intelligent equipment business and accelerate the high-speed development of its lithium battery recycling business, while also addressing identified risks such as economic volatility and market competition - Intelligent Equipment Business: Focus on the new energy vehicle market, expand into overseas markets, and integrate with 5G and industrial IoT technologies to provide smart industrial services115 - Lithium Battery Recycling Business: Accelerate capacity expansion and technological upgrades, establish new waste lithium iron phosphate battery recycling projects, and build a nationwide recycling system through collaborations with partners like JD115 - The company faces key risks including fluctuations in raw material and non-ferrous metal prices, intensifying industry competition, accounts receivable recovery risks, and internal management challenges119120121122 Corporate Governance This chapter outlines the company's governance structure and practices, including its independence from the controlling shareholder, compliance with regulations, and the implementation of an equity incentive plan Basic Status of Corporate Governance During the reporting period, the company continuously improved its corporate governance structure and internal control systems in strict compliance with relevant laws and regulations, ensuring independence from its controlling shareholder - The company possesses an independent and complete business system and autonomous operating capabilities, maintaining independence from its controlling shareholder in business, personnel, assets, organization, and finance127131 - During the reporting period, the company held one annual general meeting, four extraordinary general meetings, and twelve board meetings, with all convening, holding, and voting procedures being legal and compliant127128134151 Profit Distribution The company's 2021 profit distribution plan proposes a cash dividend of 0.30 CNY (tax inclusive) per 10 shares, totaling 11.38 million CNY, reflecting a balance between development stage, profitability, and future capital needs - 2021 Profit Distribution Plan: A cash dividend of 0.30 CNY (tax inclusive) per 10 shares, with no bonus shares or capital reserve conversion to share capital168169 - The 2020 profit distribution plan, which involved a cash dividend of 0.49 CNY (tax inclusive) per 10 shares, has been fully implemented167 Equity Incentive and Employee Stock Ownership Plans During the reporting period, the company implemented its 2021 restricted stock incentive plan, granting 8.75 million shares to 46 individuals, while its 2016 employee stock ownership plan was fully divested and terminated - On September 3, 2021, the company granted 8.75 million restricted shares to 46 incentive recipients at a price of 5.96 CNY/share, with the shares listed on November 10, 2021171 - The company's first phase of the 2016 employee stock ownership plan was fully divested and terminated on December 15, 2021, with a total of 2,307,600 shares sold, representing 0.61% of the company's total share capital177 Environmental and Social Responsibility This chapter details the company's environmental and social responsibility performance, including pollutant emissions, administrative penalties for environmental issues, and efforts in investor protection and community engagement Significant Environmental Issues Several of the company's subsidiaries are designated as key polluting units, with pollution control facilities generally operating effectively, though two subsidiaries received administrative penalties for environmental violations - Several of the company's subsidiaries are designated as key polluting units, with major pollutants including wastewater (COD, ammonia nitrogen, etc.) and exhaust gas (sulfuric acid mist, particulate matter, etc.)185186 | Company or Subsidiary Name | Reason for Penalty | Penalty Result | | :--- | :--- | :--- | | Tongling Tianqi Lantian Machinery Equipment Co., Ltd. | Failure to collect and treat volatile gases from spray painting operations | Ordered to rectify and fined 99,581 CNY | | Jiangsu Tianqi Heavy Industry Co., Ltd. | Exhaust gas treatment facilities not operating as required; nighttime noise exceeding standards, etc. | Ordered to rectify and fined 285,545 CNY | Significant Matters This chapter discloses various significant matters during the reporting period, including the fulfillment of commitments, related party transactions, major contracts, and other important corporate actions Fulfillment of Commitments The controlling shareholder's commitments regarding avoiding horizontal competition and standardizing related party transactions are being fulfilled, while some subsidiaries' performance commitments were not met, potentially triggering equity repurchase clauses - Subsidiary Tianqi Lizhi achieved cumulative non-recurring net profit of 32.27 million CNY from 2019-2021, fulfilling its performance commitment of not less than 30 million CNY198 - Subsidiary Tianqi Heavy Industry's audited net profit for 2021 was -24.65 million CNY, failing to meet the committed target of not less than 65 million CNY, which triggered a clause allowing the transferee to request the company to acquire its equity199 - Subsidiary Tianqi Lidi Group's cumulative non-recurring net profit for 2020-2021 was -197.76 million CNY, significantly below the committed target, potentially triggering a clause allowing investors to request the company to repurchase their equity200 Significant Related Party Transactions During the reporting period, the company engaged in approximately 251 million CNY in routine related party transactions, primarily for subcontracting engineering projects, and a share repurchase by an associate company is still ongoing - Total routine related party transactions in 2021 amounted to 251.28 million CNY, with the largest single transaction being a subcontracting project to Wuxi Tiancheng Heavy Steel Engineering Co., Ltd. for 227.99 million CNY209210211 - The share repurchase by associate company Shenzhen Qiantai is still in progress, with 98 million CNY of the repurchase payment outstanding as of the end of the reporting period, and a supplementary agreement has been signed to clarify the payment plan and guarantee conditions217218 Significant Contracts and Their Performance During the reporting period, the company signed multiple significant sales contracts, primarily in the automotive intelligent equipment business, with major clients including Li Auto, Great Wall Motor, BYD, and Volkswagen, totaling over 580 million CNY | Customer Name | Contract Subject | Contract Amount (CNY 10,000) | | :--- | :--- | :--- | | Chongqing Li Auto | X01 General Assembly Main Line | 16,385 | | Chongqing Li Auto | General Assembly Main Conveying Equipment Project | 18,950 (pre-tax) | | Spotlight Automotive Ltd. | General Assembly Workshop Non-standard Conveying Equipment | 5,650 | | Changsha BYD Auto | General Assembly Line 1 Production Line | 10,600 | | Volkswagen (Anhui) | General Assembly Workshop Door Conveying Line Project | 8,986.97 | Changes in Share Capital and Shareholder Information This chapter discloses the company's share capital changes and shareholder information, including the increase in total share capital due to an equity incentive plan and the holdings of the controlling shareholder Changes in Share Capital During the reporting period, the company's total share capital increased from 371 million shares to 379 million shares due to the implementation of the restricted stock incentive plan, with restricted shares increasing from 0.15% to 2.46% of the total - The company's total share capital increased by 8.75 million shares due to the implementation of the 2021 restricted stock incentive plan, reaching 379,299,434 shares at the end of the period245 Shareholders and Actual Controller Information As of the end of 2021, the company had 36,157 shareholders, with the actual controller Huang Weixing and his concerted parties holding a combined 28.64% of the shares | Shareholder Name | Shareholding Percentage | Number of Shares Held | | :--- | :--- | :--- | | Huang Weixing | 16.45% | 62,389,317 | | Wuxi Tianqi Investment Holding Co., Ltd. | 11.20% | 42,465,172 | | SDIC UBS New Energy Mixed Fund | 1.54% | 5,822,719 | | Bai Kaijun | 1.33% | 5,032,362 | | Wuxi Weifu High-Technology Group | 1.24% | 4,710,000 | - The company's actual controller, Huang Weixing, and his concerted parties collectively hold 28.64% of the company's shares676 Preferred Shares Information The company had no preferred shares during the reporting period - The company had no preferred shares during the reporting period264 Bonds Information The company had no bonds during the reporting period - The company had no bonds during the reporting period267 Financial Report This chapter presents the audited 2021 financial report, including the audit opinion, key audit matters, and complete financial statements with detailed accounting policies and notes Audit Report Tianjian Certified Public Accountants (Special General Partnership) issued a standard unqualified audit opinion on the company's 2021 financial statements, identifying revenue recognition and impairment of accounts receivable as key audit matters - The audit opinion type is a standard unqualified opinion269271 - Key audit matters are: - Revenue Recognition: Operating revenue is a key performance indicator, and there is an inherent risk of management inappropriately recognizing revenue to achieve specific targets273275 - Impairment of Accounts Receivable: Accounts receivable are material, and impairment involves significant management judgment276 Financial Statements The financial statements show that as of the end of 2021, the company's total assets were 6.22 billion CNY, total liabilities were 4.03 billion CNY, and net assets attributable to the parent company were 2.08 billion CNY Consolidated Balance Sheet As of December 31, 2021, the company's total assets were 6.22 billion CNY, a 5.09% increase from the beginning of the period, with total liabilities at 4.03 billion CNY and net assets attributable to the parent company at 2.08 billion CNY | Item (Unit: CNY) | December 31, 2021 | December 31, 2020 | | :--- | :--- | :--- | | Total Assets | 6,223,484,635.26 | 5,921,892,908.06 | | Total Liabilities | 4,024,999,662.87 | 3,838,283,187.43 | | Total Equity Attributable to Parent Company Shareholders | 2,076,363,507.31 | 1,932,061,290.66 | Consolidated Income Statement In 2021, the company achieved total operating revenue of 3.78 billion CNY, a 5.19% increase, resulting in a total profit of 170 million CNY and net profit attributable to parent company shareholders of 151 million CNY | Item (Unit: CNY) | 2021 Annual | 2020 Annual | | :--- | :--- | :--- | | Total Operating Revenue | 3,778,545,928.40 | 3,592,247,899.91 | | Operating Profit | 182,135,732.72 | 102,583,656.16 | | Total Profit | 169,617,370.05 | 106,293,983.55 | | Net Profit Attributable to Parent Company Shareholders | 150,647,126.91 | 61,048,134.05 | Consolidated Cash Flow Statement In 2021, net cash flow from operating activities was 91 million CNY, a 40.84% decrease, while net cash flow from investing activities significantly improved to 0.98 million CNY, and net cash flow from financing activities was -9.35 million CNY | Item (Unit: CNY) | 2021 Annual | 2020 Annual | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 91,246,755.77 | 154,250,253.66 | | Net Cash Flow from Investing Activities | 980,653.44 | -320,469,201.26 | | Net Cash Flow from Financing Activities | -9,349,634.74 | 46,692,292.53 | | Cash and Cash Equivalents at End of Period | 580,616,968.49 | 504,294,510.30 |