兆新股份(002256) - 2019 Q4 - 年度财报

Section I Important Notice, Table of Contents and Definitions This section provides critical disclaimers from management, highlights the auditor's non-standard opinion, and addresses the company's delisting risk Important Notice Multiple directors and executives disclaim report accuracy due to unverified transactions, internal control flaws, and past illegal guarantees, leading to an auditor's disclaimer and delisting risk - Zhongqin Wanxin Certified Public Accountants issued a disclaimer of opinion on the company's audit report and an adverse opinion on its internal control attestation report[4][6] - The company faces a delisting risk warning after the annual report disclosure due to consecutive negative audited net profits in fiscal years 2018 and 2019[4] - Multiple directors, supervisors, and senior executives cannot guarantee the report's truthfulness, accuracy, or completeness, or express an opinion, disclaiming individual and joint legal liability[3][8][9] - The company plans no cash dividends, bonus shares, or capital increase from capital reserves[7] Section II Company Profile and Key Financial Indicators This section presents the company's key financial performance and position, highlighting significant declines in revenue and net profit for 2019 VI. Key Accounting Data and Financial Indicators In 2019, the company's operating performance significantly declined, with revenue down 28.55% and net loss attributable to shareholders expanding to -RMB 275 million, marking a second consecutive year of losses 2019 Key Financial Data | Indicator | 2019 | 2018 (Adjusted) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Operating Revenue (RMB) | 431,282,903.18 | 603,628,902.58 | -28.55% | | Net Profit Attributable to Listed Company Shareholders (RMB) | -275,183,761.51 | -200,695,240.10 | -37.12% | | Net Profit Attributable to Listed Company Shareholders (Excluding Non-recurring Items) (RMB) | -284,941,473.14 | -196,277,205.15 | -45.17% | | Net Cash Flow from Operating Activities (RMB) | 102,893,689.13 | 186,380,475.00 | -44.79% | | Basic Earnings Per Share (RMB/share) | -0.15 | -0.11 | -36.36% | | Weighted Average Return on Net Assets | -15.41% | -9.63% | -5.67% | | Total Assets (RMB) | 2,749,322,531.92 | 3,098,666,108.47 | -11.27% | | Net Assets Attributable to Listed Company Shareholders (RMB) | 1,648,295,395.61 | 1,928,894,714.92 | -14.55% | 2019 Quarterly Key Financial Indicators (RMB) | Indicator | Q1 | Q2 | Q3 | Q4 | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue | 84,886,775.92 | 121,820,838.10 | 121,811,667.72 | 102,763,621.44 | | Net Profit Attributable to Listed Company Shareholders | -25,892,105.15 | 4,081,746.11 | -7,818,248.36 | -245,555,154.11 | Section III Company Business Overview This section outlines the company's core business segments, including new energy, fine chemicals, and biodegradable materials, along with their respective operating models I. Main Businesses Engaged in During the Reporting Period The company's main businesses span new energy, fine chemicals, and biodegradable materials, with distinct operating models for each, including solar PV power generation, lithium salt processing, and authorized contract manufacturing - The company's main businesses are categorized into three types: new energy, fine chemicals, and biodegradable materials[32] - New energy business covers solar photovoltaic power generation, deep processing of lithium salt products, lithium extraction from salt lakes, energy storage, and new energy vehicle charging stations[32][33][34][35] Photovoltaic Power Station Status | Business | Scale | Status | | :--- | :--- | :--- | | Solar Photovoltaic Power Generation | 262.5 MW | Grid-connected and Under Construction | II. Significant Changes in Major Assets During the reporting period, the company's major assets underwent significant changes, with equity assets decreasing by RMB 184 million due to fair value changes and impairment, while fixed and intangible assets declined from depreciation and amortization Major Asset Changes | Major Asset | Period-End Amount (RMB 10,000) | Change from Period-Start (RMB 10,000) | Primary Reason | | :--- | :--- | :--- | :--- | | Equity Assets | 54,737.49 | -18,401.25 | Fair value changes of other non-current financial assets and impairment of long-term equity investments | | Fixed Assets | 139,925.65 | -7,737.92 | Depreciation | | Intangible Assets | 5,609.42 | -325.68 | Amortization | III. Core Competitiveness Analysis The company's core competencies are rooted in technological innovation, brand strength, market reach, operational management, and cost control, supported by patents and industry standards participation - The company's core competitive advantages are in technological innovation, brand, market, operational management, and cost[50] - In technological innovation, the company holds 40 authorized patents (including 25 invention patents) and has participated as a primary drafting unit in multiple national and industry standards[51] - Regarding brand, the company holds honors such as 'China Well-known Trademark' and 'Guangdong Famous Trademark'[52][53] Section IV Management Discussion and Analysis This section provides an in-depth review of the company's operational performance, business segments, investment activities, and future outlook, alongside associated risks I. Overview In 2019, the company's overall operating performance declined significantly, with total operating revenue falling by 28.55% and net loss attributable to shareholders expanding by 37.12% to -RMB 275 million, primarily due to factory relocation and financing challenges 2019 Operating Performance Overview | Indicator | 2019 Amount (RMB) | Year-on-Year Change | | :--- | :--- | :--- | | Total Operating Revenue | 431,282,903.18 | -28.55% | | Net Profit Attributable to Listed Company Shareholders | -275,183,761.51 | -37.12% | - The performance decline was primarily influenced by factory relocation, an unimproved financing environment, and underperforming associate companies[59] II. Main Business Analysis The company's main business revenue significantly decreased, with fine chemicals revenue down 37.18% due to factory relocation and a shift to contract manufacturing, and photovoltaic power generation revenue down 8.76% 2019 Operating Revenue Composition (By Industry) | Industry | Operating Revenue (RMB) | Proportion of Total Revenue | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Fine Chemical Industry | 183,029,004.99 | 42.44% | -37.18% | | New Materials Industry | 36,803,404.40 | 8.53% | 21.34% | | Photovoltaic Power Generation Industry | 211,450,493.79 | 49.03% | -8.76% | | Photovoltaic Power Generation Equipment Industry | 0.00 | 0.00% | -100.00% | - The decline in fine chemical industry production and sales was primarily due to factory relocation and a shift to an outsourced contract manufacturing model[68][74] - Sales to the top five customers accounted for 32.19% of total annual sales[75] V. Investment Status Analysis The company significantly altered its 2015 private placement funds, with 95.97% of the RMB 1.521 billion originally earmarked for photovoltaic projects and acquisitions being reallocated, primarily to supplement working capital due to policy changes and financing difficulties - The total proceeds from the 2015 non-public offering were RMB 1.521 billion, with RMB 1.46 billion (or 95.97% of the total) having its use changed as of the reporting period end[96] - Multiple original photovoltaic projects and equity acquisition projects were terminated due to policy changes (new PV policies), lower-than-expected investment returns, and company financing difficulties, with most remaining funds permanently used to supplement working capital[101][102][109] IX. Outlook on the Company's Future Development The company plans to transition its photovoltaic business to asset management, maintain caution in lithium battery materials, expand fine chemicals into daily consumer products, and grow biodegradable materials, while facing risks from economic uncertainty, policy changes, technological substitution, price volatility, and liquidity - Future development strategy includes transforming the PV business into 'management output and O&M expert', maintaining caution in upstream lithium battery material investments, expanding fine chemicals into daily chemical and beauty products, and increasing market share for biodegradable materials[116][117][118][119] - Key risks include changes in industrial policies (PV tariff subsidy reductions, lithium battery industry policy adjustments), technological substitution risk, raw material and product price fluctuation risk, intensified market competition risk, and liquidity risk[125][126][127][128][129] Section V Significant Matters This section details critical issues including the non-standard audit opinion, major accounting error corrections, significant litigation, and the integrity status of the controlling shareholder V. Explanations by the Board of Directors, Supervisory Board, and Independent Directors (if any) on the Accounting Firm's "Non-Standard Audit Report" for the Current Period The board, supervisory board, and independent directors explained the 'disclaimer of opinion' audit report, citing insufficient evidence for impairment, suspicious factoring transactions, unresolved litigation, and the board's inability to guarantee financial statement accuracy - Reason for disclaimer of opinion 1: Insufficient basis for the RMB 50 million impairment provision for the long-term equity investment in Qinghai Jintai Potash Fertilizer[145] - Reason for disclaimer of opinion 2: A 2017 domestic non-recourse accounts receivable factoring business by a subsidiary was deemed by auditors to lack commercial substance, with financing funds effectively originating from Zhaoxin Co., Ltd[146] - Reason for disclaimer of opinion 3: The company is involved in multiple debt defaults, lawsuits, and investment performance compensation matters without final conclusions[146] - Reason for disclaimer of opinion 4: The company's board of directors cannot guarantee the truthfulness, accuracy, or completeness of the financial statements and notes provided[147] VII. Explanation of Major Accounting Error Corrections Requiring Retrospective Restatement During the Reporting Period The company retrospectively restated prior period accounting errors, including additional asset impairment for a halted PV project and reversal of unearned government subsidies for another, impacting 2017 and 2018 financial statements - Pre-period error correction and impairment testing for a halted photovoltaic project of subsidiary Huzhou Yongju[155] - Pre-period error correction for subsidiary Hefei Shengri's recognition of national subsidy electricity revenue despite not obtaining subsidy quotas[156] Impact of Accounting Error Corrections on 2017 Financial Statement Items | Statement Item | Before Adjustment (RMB) | After Adjustment (RMB) | Adjustment Amount (RMB) | | :--- | :--- | :--- | :--- | | Operating Revenue | 654,119,343.75 | 646,897,719.45 | -7,221,624.31 | XII. Significant Litigation and Arbitration Matters The company is involved in 12 significant lawsuits and arbitration cases as a defendant or respondent, primarily concerning bill disputes, lease contracts, and construction contracts, totaling approximately RMB 104 million with an estimated potential liability of RMB 46.91 million - During the reporting period, the company was involved in 12 lawsuits/arbitrations as a defendant/respondent, with a total amount involved of approximately RMB 104 million, potentially forming liabilities of RMB 46.91 million[162] XIV. Integrity Status of the Company and Its Controlling Shareholder, Actual Controller The controlling shareholder, Mr. Chen Yongdi, faces severe integrity issues, with nearly all his shares pledged and judicially frozen, and his controlled entity, Caihong Group, having entered bankruptcy proceedings - Controlling shareholder Mr. Chen Yongdi's shares in the company are 99.92% pledged and 100% judicially frozen[164] - Caihong Group, a shareholder holding over 5% (controlled by Mr. and Mrs. Chen Yongdi), has entered bankruptcy proceedings[164] Section VI Share Changes and Shareholder Information This section details the company's share capital structure, including changes in restricted and unrestricted shares, and provides an overview of major shareholders and the controlling shareholder's status I. Share Change Status The company's total share capital remained unchanged at 1.88 billion shares, but restricted shares decreased by 145.89 million due to expiration of lock-up periods and executive departures, increasing unrestricted shares accordingly Share Change Status (Shares) | Share Type | Before This Change | After This Change | Change Amount | | :--- | :--- | :--- | :--- | | Restricted Shares | 633,040,131 | 487,154,600 | -145,885,531 | | Unrestricted Shares | 1,249,371,741 | 1,395,257,272 | +145,885,531 | | Total Share Capital | 1,882,411,872 | 1,882,411,872 | 0 | - Controlling shareholder Mr. Chen Yongdi voluntarily committed to extend the lock-up period for his 486 million restricted shares, originally expiring on May 30, 2019, for another year until May 29, 2020[138][201] III. Shareholder and Actual Controller Information As of the reporting period, the company had 90,297 common shareholders, with controlling shareholder Mr. Chen Yongdi holding 26.26% of shares, almost entirely pledged and frozen, and his controlled entity, Caihong Group, in bankruptcy, indicating significant financial and legal risks at the controlling shareholder level Top Two Shareholders' Holdings and Share Status | Shareholder Name | Shareholding Percentage | Number of Shares Held | Share Status | | :--- | :--- | :--- | :--- | | Chen Yongdi | 26.26% | 494,406,779 | Pledged 99.92%, Frozen 100% | | Shenzhen Caihong Venture Capital Group Co., Ltd. | 13.79% | 259,504,859 | Pledged, Frozen, Entered Bankruptcy Proceedings | Section IX Directors, Supervisors, Senior Management, and Employees This section outlines the composition and changes within the company's board of directors, supervisory board, and senior management, along with general employee information II. Changes in the Company's Directors, Supervisors, and Senior Management The company experienced frequent changes in its senior management during and after the reporting period, with multiple key executives including the chairman, general manager, and board secretary departing, indicating management instability - Multiple senior executives, including the company's chairman, general manager, vice chairman, board secretary, and supervisor, experienced changes during and after the reporting period[219] Section X Corporate Governance This section details the company's corporate governance structure, focusing on internal control deficiencies and the auditor's adverse opinion on internal controls IX. Internal Control Evaluation Report The company's internal control evaluation report identified three significant financial reporting internal control deficiencies, leading the accounting firm to issue an adverse opinion on the effectiveness of internal controls - The company's internal control self-evaluation report identified three material weaknesses in financial reporting internal controls[250][255] - Material weaknesses include: suspected fictitious factoring transactions, design deficiencies in fundraising approval processes, and insufficient basis for impairment provisions on certain investment projects[250][251] - The accounting firm issued an adverse opinion on the effectiveness of the company's financial reporting internal controls as of December 31, 2019[256] Section XII Financial Report This section presents the company's audited financial statements for 2019, including the auditor's disclaimer of opinion and detailed financial performance and position data I. Audit Report Zhongqin Wanxin Certified Public Accountants issued a disclaimer of opinion on the company's 2019 financial statements, citing issues with investment impairment, factoring business substance, unresolved litigation, and the board's inability to guarantee financial statement accuracy - The audit opinion type is a 'disclaimer of opinion'[261] - The basis for the disclaimer of opinion aligns with the board's explanations in 'Section V Significant Matters,' involving long-term equity investment impairment, factoring business commercial substance, and unresolved litigation[263][264][265] II. Financial Statements In 2019, the company's total assets were RMB 2.75 billion, total liabilities RMB 1.08 billion, and net profit attributable to parent company shareholders was a loss of RMB 275 million, marking a second consecutive year of losses, with operating cash flow decreasing by 44.79% Consolidated Balance Sheet Key Data (RMB) | Item | December 31, 2019 | December 31, 2018 | | :--- | :--- | :--- | | Total Assets | 2,749,322,531.92 | 3,098,666,108.47 | | Total Liabilities | 1,076,597,712.23 | 1,143,110,550.81 | | Total Equity Attributable to Parent Company Owners | 1,648,295,395.61 | 1,928,894,714.92 | Consolidated Income Statement Key Data (RMB) | Item | 2019 | 2018 | | :--- | :--- | :--- | | Total Operating Revenue | 431,282,903.18 | 603,628,902.58 | | Operating Profit | -267,486,278.25 | -210,353,950.69 | | Total Profit | -268,798,615.54 | -214,470,798.19 | | Net Profit Attributable to Parent Company Owners | -275,183,761.51 | -200,695,240.10 | Consolidated Cash Flow Statement Key Data (RMB) | Item | 2019 | 2018 | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 102,893,689.13 | 186,380,475.00 | | Net Cash Flow from Investing Activities | 6,157,396.25 | -234,865,363.70 | | Net Cash Flow from Financing Activities | -130,820,171.55 | -590,993,606.63 | | Net Increase in Cash and Cash Equivalents | -21,769,086.17 | -639,478,495.33 |