HSSM(SZ:002290)2019-04-29 16:00Financial Performance - The company's operating revenue for 2018 was CNY 1,734,274,869.50, representing a 21.14% increase compared to CNY 1,431,589,639.38 in 2017[21]. - The net profit attributable to shareholders for 2018 was CNY 62,835,914.74, a significant increase of 2,549.92% from CNY 2,371,237.76 in 2017[21]. - The net profit after deducting non-recurring gains and losses was CNY 43,529,006.55, up 324.47% from a loss of CNY 19,062,855.75 in 2017[21]. - The basic earnings per share for 2018 was CNY 0.26, a 2,500.00% increase from CNY 0.01 in 2017[21]. - The total assets at the end of 2018 were CNY 3,381,619,720.82, reflecting a 4.51% increase from CNY 3,235,589,700.76 at the end of 2017[21]. - The net assets attributable to shareholders at the end of 2018 were CNY 1,241,868,484.57, a 2.79% increase from CNY 1,208,158,049.43 at the end of 2017[21]. - The company reported a net cash flow from operating activities of -CNY 83,966,839.71, a 90.66% improvement from -CNY 1,011,611,478.95 in 2017[21]. - The weighted average return on equity for 2018 was 5.14%, up from 0.20% in 2017[21]. - The company achieved a consolidated revenue of CNY 173,427.49 million, representing a year-on-year increase of 21.14%[40]. - Operating profit rose to CNY 9,587.78 million, a significant increase of 407.62% compared to the previous year[40]. - Net profit attributable to shareholders reached CNY 6,283.59 million, marking a substantial year-on-year increase of 2549.92%[40]. Revenue Breakdown - In 2018, the company's total revenue for the four quarters was approximately CNY 1.73 billion, with the highest revenue in Q4 at CNY 490.34 million[26]. - The revenue from the home appliance composite materials sector was CNY 1,577,830.88 million, accounting for 90.98% of total revenue, with a year-on-year growth of 19.30%[43]. - The financial services segment, specifically commercial factoring, generated revenue of CNY 138,156.34 million, up 56.79% year-on-year, representing 7.97% of total revenue[43]. - Domestic business contributed CNY 1,474,919.05 million, which is 85.05% of total revenue, with a year-on-year increase of 17.76%[44]. - Export revenue was CNY 241,068.17 million, reflecting a year-on-year growth of 48.76% and accounting for 13.90% of total revenue[44]. Challenges and Risks - The company faces risks including potential sales shortfalls and fluctuations in raw material prices, which may impact future performance[6]. - The company faced challenges due to the overall economic slowdown and increased competition in the home appliance market[38]. - The company faces risks related to potential underperformance in sales of appliance exterior materials due to domestic overcapacity and product homogeneity, as well as trade barriers affecting overseas exports[82]. - The company’s main raw materials constitute a significant portion of production costs, and fluctuations in raw material prices could further pressure profit margins[82]. - The company’s stock is under risk warning due to an audit report that could lead to suspension of listing if issues are not resolved[84]. Dividend Policy - The company plans not to distribute cash dividends or issue bonus shares for the year[8]. - The company has not distributed cash dividends or conducted capital reserve transfers in the past three years, including 2018[88]. - The company did not distribute cash dividends for the fiscal year 2018, despite having a positive net profit available for common shareholders[90]. - The cash dividend distribution in 2017 was the only instance in the last three years, with no dividends declared in 2016 and 2018[90]. - The company plans to distribute cash dividends of no less than 40% of the annual profit during the 2018-2020 period[95]. - The company has committed to distributing at least 10% of the distributable profit as cash dividends if it achieves profitability in a given year[94]. Corporate Governance - The company has established a comprehensive corporate governance structure to protect shareholder rights[140]. - The company has made commitments to avoid and reduce related party transactions to protect the interests of minority shareholders[93]. - The company has established measures to prevent any potential competition with its controlling shareholders[93]. - The actual controller and shareholders have fulfilled their commitments during the reporting period, ensuring compliance with relevant regulations[92]. - The company maintains independence from its controlling shareholder in business, personnel, assets, and finance, ensuring a complete and independent operational system[196]. - The board of directors consists of 9 members, including 3 independent directors, ensuring compliance with legal requirements[193]. Environmental Compliance - The company has established wastewater and waste gas treatment facilities that are operating normally, ensuring compliance with environmental regulations[145]. - The company has developed an emergency response plan for environmental incidents, which has been reviewed and practiced[147]. - The company has publicly disclosed its environmental information for 2018 in external communication channels[148]. - Suzhou Zhongke Innovative Materials Co., Ltd. is classified as a key pollutant discharge unit by the environmental protection department[143]. - The total emissions of COD, SS, ammonia nitrogen, and total phosphorus from Suzhou Zhongke are 4.26 tons, 2.4 tons, and 0.36 tons respectively, with no exceedance of discharge standards[143]. Shareholder Information - The total number of shares outstanding is 242,712,330, with 32.31% being restricted shares and 67.69% being unrestricted shares[160]. - The company reported a total of 20,815 shareholders at the end of the reporting period, with significant holdings by Shenzhen Zhongke Chuang Asset Management Co., Ltd. (32.00%) and Zhao Dongming (21.75%)[162]. - The company has not issued any new securities or conducted any share buybacks during the reporting period[162]. - The company’s major shareholders include Zhao Dongming, who holds 52,784,550 shares, and Shenzhen Zhongke Chuang Asset Management Co., Ltd., which holds 51,429,633 shares[164]. Management and Personnel - The total number of employees in the company is 828, with 204 in the parent company and 624 in major subsidiaries[186]. - The company has a training system that includes new employee orientation, safety training, and professional knowledge training, aimed at enhancing employee skills and capabilities[189]. - The company has established a dynamic compensation mechanism based on performance assessments, ensuring fair distribution of rewards[187]. - The company’s board of directors consists of experienced professionals with diverse backgrounds in finance and management[175]. Legal and Compliance Issues - The company is involved in a significant lawsuit, with a court ruling requiring payment of 218.625 million yuan in equity transfer fees, plus interest calculated at an annual rate of 12% from April 18, 2014[110]. - The company has not faced any bankruptcy reorganization matters during the reporting period[110]. - The company is currently unable to obtain financial activity and internal control information from its subsidiaries due to legal issues, impacting its financial reporting[96]. - The company has suspended new business for its commercial factoring subsidiary and established a collection team to recover receivables[99].