LFBC(SZ:002513)2022-05-09 16:00Business Focus and Strategy - The company reported a significant shift in its main business focus from "pharmaceutical health + agrochemical" to solely agrochemical products after the divestiture of Ark Pharmaceutical in 2020[19]. - The company plans not to distribute cash dividends or issue bonus shares, indicating a focus on reinvestment[5]. - The company completed a change in controlling ownership and adjusted its development strategy to enhance safety and environmental protection investments, laying a solid foundation for future recovery[33]. - The company aims to strengthen its core business in agrochemicals and phosgene products while pursuing continuous production process improvements and automation to enhance production efficiency[34]. - The company plans to extend its industrial chain around the new materials industry and establish a new materials industry cluster, supported by setting up industrial and merger funds to accelerate growth[35]. Financial Performance - The company's operating revenue for 2021 was ¥1,443,932,144.80, representing a 7.60% increase compared to ¥1,341,970,891.91 in 2020[21]. - The net profit attributable to shareholders was -¥491,191,923.36, a significant decrease of 3,413.59% from ¥14,823,557.29 in 2020[21]. - The net cash flow from operating activities was ¥11,796,557.54, down 90.81% from ¥128,305,653.14 in the previous year[21]. - The total assets at the end of 2021 were ¥1,727,949,962.51, a decrease of 25.23% from ¥2,311,049,219.02 at the end of 2020[21]. - The net assets attributable to shareholders decreased by 42.53% to ¥666,636,974.20 from ¥1,159,910,073.71 in 2020[21]. Market and Competition - The global pesticide market is projected to reach $66.703 billion in 2023, with a compound annual growth rate of 3% from 2018 to 2023[32]. - The company faced challenges due to the ongoing impact of the COVID-19 pandemic, rising international shipping costs, and inflationary pressures on raw material prices[31]. - The company is a major domestic producer of fungicides and has pioneered the development of methyl thiophanate, positioning itself as a key player in the fungicide market[36]. - The agricultural chemical industry is undergoing consolidation, with major multinational companies controlling over 60% of the global market share, indicating a competitive landscape for domestic companies[100]. Production and Operations - The company experienced a significant increase in production costs due to rising prices of upstream raw materials, including chlor-alkali and phosphorus chemicals, and high international shipping costs, leading to a negative gross margin for the reporting period[33]. - The company had to shift from self-manufacturing to external procurement for key intermediates like methyl chloroformate and ethyl chloroformate, resulting in a substantial increase in production costs[33]. - The company faced temporary production halts in September 2021 due to local government mandates in response to power supply shortages, adversely affecting overall production operations[33]. - The company is focused on continuous improvement in production technology, achieving a product purity of over 98% for certain products[49]. Research and Development - The company is investing in new product development and market expansion, particularly in the pesticide sector[52]. - Research and development expenses decreased by 18.71% year-on-year, totaling ¥12,916,551.27 in 2021[76]. - The number of R&D personnel decreased by 2.11% to 93 in 2021, while the proportion of R&D personnel in the total workforce increased to 6.62%[79]. Governance and Compliance - The company has established a robust internal control system to ensure effective management and oversight[115]. - There are no significant discrepancies between the company's governance practices and regulatory requirements[117]. - The company has faced multiple penalties for governance issues, indicating a need for improved compliance and transparency in financial reporting[133]. - The company has committed to ensuring the independence of its management team, including the general manager and financial personnel, who will not hold positions in other companies controlled by the shareholders[178]. Environmental Responsibility - The company has implemented a comprehensive air pollution control strategy, achieving stable compliance with emission standards for various production processes[163]. - The company has made significant investments in environmental protection technologies, leading to a continuous reduction in pollutant emissions[165]. - The wastewater treatment facility has a processing capacity of 3000 tons per day, utilizing a multi-step treatment process to meet discharge standards[162]. - The company has established a hazardous waste temporary storage facility with an area of 1584 square meters and a maximum storage capacity of approximately 2000 tons[165]. Shareholder Relations - The company has maintained a stable dividend distribution policy, ensuring that at least 20% of the annual distributable profits are allocated as cash dividends to shareholders[170]. - The company actively engages with shareholders through various communication channels, including investor hotlines and public meetings[169]. - The company has committed to distributing at least 20% of the annual distributable profits in cash dividends when conditions are met[181].