LHM(SZ:002535)2020-05-26 16:00Financial Performance - The company's operating revenue for 2019 was CNY 1,046,576,210, a decrease of 49.26% compared to the previous year[23]. - The net profit attributable to shareholders was a loss of CNY 1,991,331,700, representing a decline of 1,495.26% year-over-year[23]. - The net cash flow from operating activities was a negative CNY 976,117,433, down 294.41% from the previous year[23]. - The total assets at the end of 2019 were CNY 4,958,920,530, a decrease of 34.05% compared to the end of 2018[23]. - The company's net assets attributable to shareholders decreased by 71.69% to CNY 787,185,539[24]. - The first quarter of 2019 saw an operating revenue of CNY 181,354,644, while the fourth quarter revenue dropped to CNY 109,147,111[28]. - The net profit attributable to shareholders in the fourth quarter was a significant loss of CNY 1,996,682,442.56[28]. - The company reported a total of CNY 579,576,895.91 in non-recurring losses for 2019[30]. - The company reported total revenue of CNY 1,046.58 million, a decrease of 49.26% year-over-year[44]. - The net profit attributable to shareholders was CNY -199.13 million, indicating significant losses during the reporting period[44]. Business Operations - The coal mining machinery and comprehensive service business remains the core segment, focusing on customized equipment production and technical services[33]. - The company has expanded its business model from equipment sales to providing comprehensive services for coal mine operators, enhancing operational efficiency[34]. - The coal machinery and comprehensive service segment generated revenue of CNY 691.28 million, down 20.89% from the previous year, with a gross margin of 8.93%[44]. - The iron casting business saw revenue drop to CNY 287.26 million, a decline of 73.62%, with a negative gross margin of -6.69%[45]. - The military products segment achieved revenue of CNY 41.01 million, reflecting a growth of 34.79% year-over-year, with a gross margin of 43.01%[45]. - The company completed the transfer of equity in Pingdingshan Donglian Mining Machinery Manufacturing Co., Ltd. during the reporting period[44]. - The company reduced its construction in progress by CNY 176 million during the reporting period[37]. - The company has established strategic partnerships with several large military industrial groups, enhancing its growth potential in military products[45]. - The company is focusing on its core business by divesting non-core or low-profit subsidiaries to improve profitability[45]. Financial Management and Governance - The company has established a comprehensive governance structure and management system, but faces risks if its current management cannot adapt to industry changes[12]. - The independent auditor issued a disclaimer of opinion on the company's 2019 financial report, indicating potential concerns regarding financial accuracy[5]. - The company has a registered capital of 1.2 billion RMB, reflecting its substantial investment in the coal machinery sector[19]. - The company emphasizes the importance of risk awareness among investors regarding future performance predictions and plans[6]. - The company has not disclosed specific future performance guidance, indicating a cautious approach to market expectations[6]. - The company plans not to distribute cash dividends, issue bonus shares, or increase capital through reserves[7]. - The company has established a profit distribution policy that aims for a minimum cash dividend of 20% of the distributable profit after covering losses and legal reserves[96]. - The company has not proposed any cash dividend distribution plan despite having positive distributable profits for the reporting period[104]. - The company has conducted five cash dividend distributions since its listing, with the total cash dividends distributed from 2010 to 2014 amounting to approximately 12.5 million yuan[100]. Market and Industry Outlook - The company expects stable demand for coal machinery equipment in the medium to long term, despite short-term pressure in the coal machinery industry due to the COVID-19 pandemic[84]. - In 2019, China's total energy consumption was approximately 4.86 billion tons of standard coal, with coal consumption accounting for about 57.7%[85]. - The company aims to ensure rapid growth in its main coal machinery business and increase revenue from military-civilian integration products in 2020[88]. - The company plans to enhance product quality and market share in newly developed markets while maintaining its advantages in existing regions[88]. Environmental and Social Responsibility - The company completed the desulfurization renovation of the sintering machine head, ensuring particulate matter concentration is reduced to below 20 mg/Nm³ and sulfur dioxide concentration to below 50 mg/Nm³[156]. - A new bag filter with an air volume of 110,000 m³/h was installed at the tail of the sintering machine, maintaining particulate matter concentration below 20 mg/Nm³[157]. - The company has implemented a fully enclosed transformation for the sintering, pelletizing, and coal spraying material fields, reducing unorganized emissions of particulate matter by approximately 80 tons annually[157]. - The company has constructed 44 standardized pig iron storage sheds to reduce unorganized emissions from the pig iron yard[158]. - The company has installed 10 sets of automatic online monitoring systems for flue gas, achieving full automatic monitoring of major discharge outlets[158]. - The company has achieved a significant reduction of 200 tons in unorganized emissions from the iron tapping area after environmental improvements[158]. - The company has completed over 40,000 square meters of greening area and 85,000 square meters of lighting projects within the factory area[158]. - The company strictly adheres to environmental protection regulations, ensuring both organized and unorganized emissions meet standards[159]. - The company invested ¥26.55 million in poverty alleviation efforts, including training 120 individuals in vocational skills[154]. - The company provided financial assistance of ¥1.6 million to support 2 impoverished students[154]. Management and Personnel - The company experienced a management change with the resignation of CFO and deputy general manager Cao Qingping on April 29, 2019, due to work adjustments[185]. - Guo Xiansheng, the chairman, has extensive experience in various leadership roles within the company and related entities[186]. - Han Luyun, a director, has held multiple positions within the company, contributing to its financial management[187]. - Guo Chuan, the general manager, has a background in management and has served in various capacities within the company[188]. - Zhao Zhengbin, a director and vice general manager, has a diverse background in management and has held significant roles in other companies[189]. Legal and Compliance Issues - Linzhou Heavy Machinery has been under investigation by the China Securities Regulatory Commission for suspected violations of securities laws, which has led to an inability to express an opinion on the financial statements[110]. - The company has not reported any non-operating fund occupation by controlling shareholders or their affiliates during the reporting period[109]. - The company’s financial report for 2019 received a disclaimer of opinion from the auditor due to unresolved issues related to the investigation[110]. - The total amount of guarantees provided by the company to its actual controllers and related parties is capped at 500 million CNY[108]. - The company has committed to ensuring that at least 70% of the funds obtained from guarantees will be used for its operations[108].