LFBC(SZ:002513)2019-10-16 16:00Financial Performance - The company's operating revenue for the first half of 2019 was ¥788,218,646.32, a decrease of 14.17% compared to ¥918,372,635.56 in the same period last year[17]. - The net profit attributable to shareholders was ¥21,864,800.60, down 28.97% from ¥30,783,765.61 in the previous year[17]. - The net cash flow from operating activities was ¥85,117,077.24, representing a decline of 47.74% compared to ¥162,860,422.42 in the same period last year[17]. - Basic earnings per share decreased by 33.33% to ¥0.06 from ¥0.09 in the previous year[17]. - Total assets at the end of the reporting period were ¥3,138,573,356.24, down 11.01% from ¥3,526,869,987.07 at the end of the previous year[17]. - The net assets attributable to shareholders increased by 1.22% to ¥1,677,328,889.38 from ¥1,657,103,930.93 at the end of the previous year[17]. - The company achieved operating revenue of 788.22 million yuan, a decrease of 14.17% compared to the same period last year[37]. - The net profit attributable to shareholders was 21.86 million yuan, down 28.97% year-on-year[37]. - The company reported a net cash decrease of ¥8,701,051.74, an improvement of 89.09% compared to the previous period[42]. - The company expects a net profit of CNY 2,200,000 to CNY 3,000,000 for the first three quarters of 2019, compared to a net loss of CNY 3,522,590 in the same period of 2018[62]. Business Operations - The main business of the company includes agricultural chemicals and pharmaceuticals, focusing on the production and sales of fungicides, insecticides, herbicides, and fine chemical intermediates[25]. - The pharmaceutical segment includes the development and sales of drugs for Alzheimer's, tumors, and infections, with key products such as Donepezil Hydrochloride Tablets and Compound Cantharidin Capsules[25]. - The company employs a "sales-driven production" model, where the sales department submits monthly sales plans to the production department to align production with market demand[27]. - The procurement strategy focuses on cost reduction and stable supply, utilizing competitive bidding for raw materials and establishing long-term partnerships with suppliers[27]. - The company’s domestic sales target agricultural enterprises and pesticide distributors, while international sales are conducted through self-export and domestic trading companies[27]. - The pharmaceutical business is managed by a wholly-owned subsidiary, Ark Pharmaceutical, which is responsible for the production and sales of various pharmaceutical products[26]. - The company has a diverse product portfolio in the pharmaceutical sector, including 14 different drugs approved for various therapeutic uses[26]. - The agricultural chemical business is primarily operated by the parent company and its wholly-owned subsidiaries, ensuring a streamlined operational structure[26]. Market and Sales Strategy - The company’s agricultural chemical business is adjusting product and sales structures based on market supply and demand[29]. - The company is actively expanding its market presence through academic promotion meetings and strengthening partnerships with national pharmaceutical distribution companies[39]. - The company plans to expand its market presence by entering two new provinces in China by the end of 2019, aiming for a 25% increase in market share[78]. - New product development includes the launch of a biodegradable pesticide, expected to contribute an additional 100 million yuan in revenue in 2020[75]. - The company is investing 50 million yuan in R&D for innovative agricultural solutions, focusing on sustainable practices[76]. Research and Development - The company emphasizes research and development in both agricultural and pharmaceutical sectors to enhance product offerings and market competitiveness[25]. - Research and development efforts are ongoing, with clinical filings completed and stability tests in progress for new products[39]. - The company has established partnerships with renowned research institutions to enhance its pharmaceutical R&D capabilities[32]. Risk Management - The company faces various risks including market competition, safety and environmental risks, and exchange rate fluctuations[5]. - The company’s safety and environmental compliance measures have been strengthened following regulatory pressures, improving risk management capabilities[38]. - The company faces risks from fluctuations in raw material prices, including liquid chlorine, coke, methanol, and sulfur, which can impact economic benefits[65]. - The pharmaceutical business is subject to industry policy risks, including the implementation of basic drug systems and procurement policies, which affect the operating environment[65]. - New drug development poses significant risks, including technical and commercial risks, which may adversely affect revenue if new drugs fail to gain approval or market acceptance[65]. Financial Health and Investments - The construction in progress increased by 42.03% compared to the beginning of the year, due to increased investment in engineering projects[30]. - Cash and cash equivalents decreased by 70.67% compared to the beginning of the year, primarily due to reduced funds[30]. - Accounts receivable notes decreased by 71.91% compared to the beginning of the year, attributed to changes in settlement methods[30]. - The company has committed to distributing no less than 20% of the distributable profit as cash dividends when conditions are met[80]. - The company has not distributed cash dividends or bonus shares for the half-year period, indicating a focus on reinvestment[70]. Legal and Regulatory Matters - The company is under investigation by the China Securities Regulatory Commission for potential information disclosure violations, which could lead to stock suspension or delisting risks[66]. - The company has not completed performance commitments for the years 2015, 2016, and 2017, with net profit targets set at 74.72 million, 90.36 million, and 109.17 million yuan respectively[72]. - The company is awaiting the conclusion of the China Securities Regulatory Commission's investigation, which may impact its financial statements[85]. - The company has signed agreements for equity transfer and debt compensation with strategic investors, although these arrangements are currently on hold due to the ongoing investigation[84]. Environmental Compliance - The company emphasizes environmental protection and has developed clean production and circular economy practices to ensure compliance with environmental standards[64]. - The company has established a comprehensive safety production system to mitigate risks associated with the production of agricultural chemicals[64]. - The company has a total wastewater discharge of 289.56 tons, with COD emissions at 20.32 tons, which are compliant with discharge standards[109]. - The company has implemented emergency response plans for environmental incidents to minimize potential damage to personnel and property[116]. - The company has established a self-monitoring plan for environmental compliance, with monthly water quality tests and quarterly air quality assessments[117]. Shareholder and Equity Matters - The total number of ordinary shareholders at the end of the reporting period is 17,065[131]. - Jiangsu Suhua Group holds 20.09% of shares, totaling 68,334,137 shares[131]. - The total number of shares outstanding is 340,086,278, with 254,413,270 shares classified as unrestricted, representing 74.81% of the total[126]. - The company has not experienced any changes in its controlling shareholder or actual controller during the reporting period[134]. - The total number of restricted shares at the end of the period is 25,687,071, with 60,002,787 shares released during the period[128].