Huafu(SZ:002042)2022-04-27 16:00Financial Performance - The company's operating revenue for 2021 was ¥16,708,437,212.10, representing a 17.40% increase compared to ¥14,231,727,949.61 in 2020[27]. - The net profit attributable to shareholders for 2021 was ¥569,742,293.45, a significant turnaround from a loss of ¥444,230,430.81 in 2020, marking a 228.25% increase[27]. - The net profit attributable to shareholders after deducting non-recurring gains and losses was ¥352,080,653.04, compared to a loss of ¥754,531,371.57 in the previous year, reflecting a 146.66% improvement[27]. - The basic earnings per share for 2021 was ¥0.38, a recovery from a loss of ¥0.31 per share in 2020, indicating a 222.58% increase[27]. - The total assets at the end of 2021 amounted to ¥20,138,185,868.88, which is a 14.36% increase from ¥17,610,075,576.16 at the end of 2020[27]. - The net assets attributable to shareholders increased by 24.67% to ¥7,009,197,204.12 from ¥5,622,219,847.15 in 2020[30]. - The net cash flow from operating activities for 2021 was ¥719,880,146.08, a decrease of 13.09% from ¥828,351,709.37 in 2020[27]. - The weighted average return on equity for 2021 was 9.24%, a significant improvement from -7.31% in 2020, reflecting a 16.55% increase[27]. Revenue and Sales Growth - The company achieved a total revenue of 16.71 billion yuan in 2021, representing a year-on-year growth of 17.4%[46]. - The main business in the cotton spinning industry accounted for 99.00% of total revenue, with revenue of approximately ¥16.60 billion, up 17.23% from ¥14.16 billion in 2020[52]. - The overseas sales of the main business reached approximately ¥2.18 billion, accounting for 13.07% of total revenue, with a year-on-year increase of 68.54%[55]. - The company achieved a significant increase in online sales, which rose by 2,985.82% to approximately ¥93.96 million in 2021[55]. - The sock products segment saw a revenue increase of 79.88%, reaching approximately ¥269.06 million in 2021[52]. Market Strategy and Expansion - The company plans to actively build a domestic market supply chain based on internal circulation, targeting the growing Chinese apparel market[46]. - The company aims to expand its market share in domestic and non-US international markets while enhancing its core yarn business[46]. - The company recognizes the importance of the domestic market and plans to deepen its engagement with local brands and e-commerce platforms[147]. - The company is focused on expanding its market presence and enhancing its product offerings through strategic initiatives[174]. Innovation and Development - The company is focusing on digital transformation and upgrading its supply chain through value-added services[46]. - The company has established a digital platform for industrial integration, enhancing its competitive advantage in the smart factory construction[52]. - The company is focused on innovation in product development, emphasizing functional technology, fast response, and sustainable practices[148]. - The company developed new functional products, including antibacterial and moisture-wicking textiles, which are expected to enhance product sales and profit margins[88]. Financial Management and Governance - The company has implemented a transparent performance evaluation and incentive mechanism for its directors and managers[157]. - The company has maintained compliance with the corporate governance standards set by the China Securities Regulatory Commission[157]. - The total remuneration for the board of directors, supervisors, and senior management during the reporting period amounted to CNY 1,106.66 million[180]. - The company has been actively expanding its governance structure with qualified independent directors to enhance oversight[182]. Risks and Challenges - The management has outlined potential risks in the report, which investors are encouraged to review in the sections on management discussion and future outlook[6]. - The company anticipates potential risks from raw material price fluctuations, particularly cotton, which accounts for over 60% of total costs[147]. - The company expects to face uncertainties in order demand due to the ongoing impacts of the COVID-19 pandemic and geopolitical tensions[147]. Cash Flow and Investments - The net cash flow from investing activities worsened significantly, with a net outflow of ¥814,644,867.30, an increase of 125.29% from the previous year's outflow of ¥361,595,133.22, primarily due to increased investment projects[96]. - The net cash flow from financing activities improved, showing a net inflow of ¥438,032,209.54, compared to a net outflow of ¥304,123,802.65 in the previous year, attributed to increased fundraising[96]. - Investment income contributed ¥216,569,209.30, accounting for 31.25% of total profit, primarily from cotton futures, dividends, and financial products[97]. Subsidiaries and Market Contributions - Shenzhen Huafu Import and Export Co., Ltd. contributed a net profit of approximately 258.70 million CNY, accounting for over 10% of the company's total net profit[123]. - Zhejiang Huafu Color Spinning Co., Ltd. reported a net profit of approximately 87.76 million CNY, with total assets of approximately 3.24 billion CNY[123]. - The company has established new subsidiaries, including Zhejiang A-Da Internet Technology Co., Ltd. and Shanghai Qingcheng Fashion Life Products Co., Ltd., contributing to its market expansion[65].