司尔特(002538) - 2019 Q4 - 年度财报

Important Notice, Table of Contents, and Definitions The company's board ensures report accuracy, outlines the 2019 profit distribution plan, and highlights key risks including industry competition and raw material price fluctuations - The company's board of directors, supervisory board, and senior management guarantee the truthfulness, accuracy, and completeness of the report content, free from false records, misleading statements, or major omissions[3] - The company's 2019 profit distribution plan proposes a cash dividend of 0.8 yuan per 10 shares (tax inclusive) to all shareholders, based on 718,126,381 shares[3] - The report highlights risks such as industry competition, raw material price fluctuations, environmental and safety production issues, and restrictions on controlling shareholder rights[3] Company Profile and Key Financial Indicators This chapter provides the company's basic information, contact details, and disclosure channels, primarily presenting key financial data for 2019, showing operating revenue of 3.016 billion yuan (down 3.55%) and net profit attributable to shareholders of 238 million yuan (down 20.66%), with operating cash flow up 37.39% and significant non-recurring gains from land compensation Company Basic Information This section provides the company's registration information, stock code (002538), listing exchange (Shenzhen Stock Exchange), legal representative, and contact details Company Basic Information | Item | Content | | :--- | :--- | | Stock Abbreviation | Sierte | | Stock Code | 002538 | | Listing Exchange | Shenzhen Stock Exchange | | Company Name | Anhui Sierte Fertilizer Co., Ltd. | | Legal Representative | Jin Guoqing | Key Accounting Data and Financial Indicators In 2019, the company's operating revenue decreased by 3.55% to 3.016 billion yuan, and net profit attributable to shareholders decreased by 20.66% to 238 million yuan, with non-recurring items excluded net profit falling 49.55%, while net cash flow from operating activities grew 37.39% and total assets increased 14.07% Key Accounting Data and Financial Indicators | Indicator | 2019 | 2018 | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Operating Revenue (yuan) | 3,015,931,696.40 | 3,126,808,597.13 | -3.55% | | Net Profit Attributable to Shareholders of Listed Company (yuan) | 238,123,176.89 | 300,137,644.18 | -20.66% | | Net Profit Attributable to Shareholders of Listed Company Excluding Non-Recurring Gains and Losses (yuan) | 141,189,515.49 | 279,838,078.91 | -49.55% | | Net Cash Flow from Operating Activities (yuan) | 287,052,349.89 | 208,925,186.52 | 37.39% | | Basic Earnings Per Share (yuan/share) | 0.33 | 0.42 | -21.43% | | Total Assets (yuan) | 5,577,034,612.46 | 4,889,125,588.44 | 14.07% | | Net Assets Attributable to Shareholders of Listed Company (yuan) | 3,835,133,588.77 | 3,518,652,125.75 | 8.99% | Quarterly Key Financial Indicators In 2019, the company achieved its highest operating revenue of 949 million yuan and net profit attributable to shareholders of 97.73 million yuan in the third quarter, with operating cash flow turning positive in the second quarter and peaking at 202 million yuan in the third quarter Quarterly Key Financial Indicators | Indicator (yuan) | Q1 | Q2 | Q3 | Q4 | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue | 518,047,341.40 | 887,578,115.82 | 949,029,850.81 | 661,276,388.37 | | Net Profit Attributable to Shareholders of Listed Company | 43,055,431.72 | 59,671,090.57 | 97,730,902.61 | 37,665,751.99 | | Net Cash Flow from Operating Activities | -73,004,074.29 | 63,497,337.78 | 201,698,739.71 | 94,860,346.69 | Non-Recurring Gains and Losses Items and Amounts In 2019, the company's total non-recurring gains and losses amounted to 96.93 million yuan, significantly impacting net profit, primarily from 97.62 million yuan in non-current asset disposal gains (mainly land compensation) and 23.24 million yuan in government subsidies, partially offset by 11.08 million yuan in other non-operating expenses mainly due to donations Non-Recurring Gains and Losses Items and Amounts | Item | 2019 Amount (yuan) | Explanation | | :--- | :--- | :--- | | Gains and Losses from Disposal of Non-Current Assets | 97,621,674.31 | Primarily due to land acquisition compensation received during the reporting period | | Government Subsidies Included in Current Profit and Loss | 23,240,488.34 | Primarily due to amortization of deferred income and government subsidies related to daily operating activities | | Other Non-Operating Income and Expenses | -11,084,107.91 | Primarily due to external donations during the reporting period | | Total | 96,933,661.40 | - | Company Business Overview This chapter outlines the company's core business, industry position, and core competencies, highlighting Sierte's integrated phosphate and compound fertilizer value chain, diversified product portfolio including new fertilizers, and its significant industry standing amidst tightening environmental regulations, supported by its resource, technology, marketing, and geographical advantages Main Business and Industry Position The company's main business involves R&D, production, and sales of compound and specialty fertilizers, forming an integrated value chain from pyrite-based acid production to phosphate and compound fertilizers, with its monoammonium phosphate and pyrite-based acid output ranking among the top in the industry, while systemic environmental regulations ("Three Phosphates"整治) are driving industry consolidation - The company has established a complete integrated value chain from pyrite-based acid production to phosphate and compound fertilizer manufacturing and sales, leveraging its Maweishan pyrite mine in Xuancheng and Kaiyang phosphate mine in Guizhou[28] - The company's product portfolio comprises three main systems: soil-testing and customized fertilizers, functional fertilizers (e.g., slow/controlled-release fertilizers, water-soluble fertilizers), and new soil improvement products (e.g., bio-organic fertilizers, soil conditioners)[28] - 2019 marked the first year of nationwide systemic environmental remediation in the phosphorus chemical industry, with the Ministry of Ecology and Environment launching a special inspection and rectification campaign for "Three Phosphates," leading to reduced industry capacity and increased concentration[31] Significant Changes in Major Assets During the reporting period, the company's major assets underwent significant changes, with cash and cash equivalents decreasing due to bond and loan repayments, long-term equity investments increasing from capital injection into Guizhou Lufa Industrial Co., Ltd., and bonds payable substantially rising due to the issuance of 800 million yuan in convertible bonds Significant Changes in Major Assets | Major Assets/Liabilities | Explanation of Significant Change | | :--- | :--- | | Cash and Cash Equivalents | Decreased from the beginning of the period, mainly due to repayment of matured corporate bonds and interest, short-term bank loans, and temporary cash management of convertible bond funds | | Long-Term Equity Investments | Increased from the beginning of the period, mainly due to capital injection into Guizhou Lufa Industrial Co., Ltd. during the current period | | Bonds Payable | Increased from the beginning of the period, mainly due to the company's issuance of 800 million yuan in convertible bonds during the current period | Analysis of Core Competencies The company's core competencies include a complete integrated value chain from mining to finished products, strong R&D and innovation capabilities through university collaborations, an established marketing network, superior product quality, integrated agricultural services, a strategic location in a major fertilizer sales region, and a stable talent pool - Through upstream and downstream industrial integration, the company has formed a complete integrated value chain from pyrite-based acid production to phosphate and compound fertilizer manufacturing and sales, effectively controlling costs and enhancing risk resistance[36] - The company is a National High-Tech Enterprise with a National Enterprise Technology Center, and has established the "China Agricultural University-Sierte Soil Testing and Formula Fertilization Research Base" in collaboration with research institutions like China Agricultural University[36] - The company has developed a new "test, research, formulate, produce, supply, apply" integrated agricultural service mechanism, providing customized production and comprehensive services to reach the "last mile" of agricultural support[41] Management Discussion and Analysis In 2019, guided by "seeking progress while maintaining stability and innovative development," the company actively integrated upstream resources, such as the Maweishan pyrite mine's operation and increased stake in Guizhou Lufa, while vigorously developing new fertilizers like bio-organic fertilizers; financially, operating revenue was 3.016 billion yuan (down 3.55%) and net profit attributable to shareholders was 238 million yuan (down 20.66%), with revenue decline mainly due to monoammonium phosphate and export business downturns, and convertible bond issuance secured funding for new fertilizer projects, though risks like industry competition, capacity expansion, raw material price volatility, and controlling shareholder restructuring remain Annual Business Overview In 2019, the company focused on "seeking progress while maintaining stability and innovative development" by integrating upstream resources (Maweishan pyrite mine operation, increasing stake in Guizhou Lufa to 40%), issuing 800 million yuan in convertible bonds for new fertilizer projects, expanding "Internet+Agriculture" initiatives, steadily advancing sales, and developing circular economy and health industries - The company's Maweishan pyrite mine in Xuancheng City, Xuancheng District, with a 380,000 tons/year mining technical upgrade project, has entered formal production, which will effectively reduce raw material procurement costs[45] - The company completed an equity increase in its largest phosphate rock supplier, Guizhou Lufa, raising its stake to 40% to secure raw material supply[46] - The company successfully issued 800 million yuan in convertible corporate bonds, with proceeds allocated to constructing projects for 650,000 tons/year of new fertilizers and 400,000 tons/year of soil conditioners[47] Analysis of Main Business In 2019, the company's main business revenue was 3.016 billion yuan, a 3.55% year-on-year decrease, with chemical fertilizer revenue at 2.824 billion yuan, down 6.31%, primarily due to a 21.65% decline in monoammonium phosphate sales, while ternary compound fertilizer revenue slightly increased by 0.66%, and international market revenue sharply fell by 49.93% due to intense competition, resulting in a chemical fertilizer manufacturing gross margin of 20.93%, down 2.5 percentage points 2019 Operating Revenue by Category | Category | 2019 Operating Revenue (yuan) | % of Total Revenue | Year-on-Year Change | | :--- | :--- | :--- | :--- | | By Industry | | | | | Chemical Fertilizers | 2,824,286,176.96 | 93.65% | -6.31% | | By Product | | | | | Ternary Compound Fertilizers | 1,676,904,976.09 | 55.60% | 0.66% | | Monoammonium Phosphate | 957,845,917.03 | 31.76% | -21.65% | | By Region | | | | | Domestic Market | 2,828,260,558.71 | 93.78% | 2.77% | | International Market | 187,671,137.69 | 6.22% | -49.93% | Gross Margin by Industry/Product | Industry/Product | Operating Revenue (yuan) | Operating Cost (yuan) | Gross Margin | Gross Margin Year-on-Year Change | | :--- | :--- | :--- | :--- | :--- | | Chemical Fertilizers | 2,824,286,176.96 | 2,233,162,281.75 | 20.93% | -2.50% | | Ternary Compound Fertilizers | 1,676,904,976.09 | 1,324,188,253.22 | 21.03% | -1.11% | | Monoammonium Phosphate | 957,845,917.03 | 769,816,747.35 | 19.63% | -5.78% | - Sales to the top five customers accounted for 11.11% of total annual sales, while purchases from the top five suppliers accounted for 37.93% of total annual procurement, with 8.35% of that from related parties[68][70] Analysis of Non-Core Business In 2019, non-core business significantly impacted profit, with investment income at -32.25 million yuan primarily due to losses from associate Guizhou Lufa, fair value change gains of 10.52 million yuan from wealth management products and structured deposits, and non-operating expenses reaching 11.59 million yuan, mainly from external donations Non-Core Business Impact on Profit | Item | Amount (yuan) | % of Total Profit | Explanation of Cause | | :--- | :--- | :--- | :--- | | Investment Income | -32,254,507.69 | -11.00% | Primarily due to losses from associate Guizhou Lufa accounted for using the equity method | | Gains and Losses from Fair Value Changes | 10,521,890.41 | 3.59% | Primarily due to changes in the fair value of wealth management products and structured deposits at period-end | | Non-Operating Expenses | 11,588,579.32 | 3.95% | Primarily due to external donations during the current period | Analysis of Assets and Liabilities As of the end of 2019, the company's total assets were 5.577 billion yuan, with cash and cash equivalents decreasing from 12.67% to 4.27% of total assets due to debt repayment, long-term equity investments increasing from 8.09% to 10.07% due to capital injection into associates, and short-term borrowings decreasing from 9.41% to 4.38% of total liabilities Assets and Liabilities Status | Item | Amount at 2019 Year-End (yuan) | % of Total Assets | Amount at 2019 Year-Start (yuan) | % of Total Assets | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | | Cash and Cash Equivalents | 238,316,099.13 | 4.27% | 619,439,446.99 | 12.67% | -8.40% | | Long-Term Equity Investments | 561,496,928.64 | 10.07% | 395,332,942.93 | 8.09% | 1.98% | | Construction in Progress | 136,042,764.27 | 2.44% | 258,876,156.68 | 5.29% | -2.85% | | Short-Term Borrowings | 244,500,000.00 | 4.38% | 460,000,000.00 | 9.41% | -5.03% | Analysis of Investment Status During the reporting period, the company's investment activities significantly increased, with total investments reaching 1.43 billion yuan, a 4668.33% year-on-year growth, including a 200 million yuan capital injection into associate Guizhou Lufa Industrial Co., Ltd. (increasing stake to 40%), establishment of wholly-owned subsidiary Sierte Ecological Agriculture, and acquisition of 100% equity in Xuancheng Huaxin Health Examination Clinic, alongside substantial investments in bank wealth management products using both raised and自有 funds - The company injected 200 million yuan into associate Guizhou Lufa Industrial Co., Ltd., increasing its stake to 40.00% to secure phosphate rock supply[89] - The company acquired 100% equity in Xuancheng Huaxin Health Examination Clinic Co., Ltd. for 30.50 million yuan to advance its health industry strategic layout[89] - In 2019, the company raised 781 million yuan net from issuing convertible corporate bonds, primarily for projects producing 650,000 tons/year of new fertilizers and 400,000 tons/year of soil conditioners, with some idle proceeds used for cash management[93][95] Company's Future Development Outlook The company anticipates the compound fertilizer industry will evolve towards green, scaled, and specialized development with increased concentration, and its strategy will focus on "scale, resources, high-end, informatization, and modernization" by continuing its ecological formula fertilizer path; the 2020 operating plan includes strengthening capital operations, vigorously developing bio-organic fertilizers, establishing efficient supply chains, ensuring successful completion of fundraising projects, and improving corporate governance, while acknowledging risks such as industry development, capacity expansion, raw material price volatility, environmental policies, safety production, and controlling shareholder ownership disputes - The future compound fertilizer industry will develop towards cost reduction, efficiency improvement, quality enhancement, emission reduction, and green, scaled, specialized, and intelligent directions, with further increases in industry concentration[109] - The company's 2020 operating plan includes strengthening capital operations, vigorously developing bio-organic fertilizers, establishing an efficient supply chain, ensuring timely completion of fundraising projects, improving corporate governance, and strengthening the executive team[112][113][114] - The main risks faced by the company include industry development risks, market sales risks due to capacity expansion, raw material price fluctuation risks, environmental protection policy risks, safety production risks, and risks related to controlling shareholder rights restrictions and ownership disputes[117][118][119][122] Significant Events This chapter discloses significant corporate governance and operational matters for the year, including the 2019 profit distribution plan of 0.8 yuan per 10 shares, normal fulfillment of commitments by the company and related parties, the controlling shareholder's 25.35% stake being fully pledged and frozen and entering restructuring, a change in accounting firm, changes in the scope of consolidation due to new and acquired subsidiaries, and related party transactions with Guizhou Lufa and the acquisition of Xuancheng Huaxin Health Examination Profit Distribution and Capital Reserve Conversion The company's 2019 profit distribution plan proposes a cash dividend of 0.8 yuan per 10 shares (tax inclusive), with no bonus shares or capital reserve conversions, and cash dividends have been consistently paid over the past three years, with the 2019 amount representing 24.13% of net profit attributable to shareholders Profit Distribution History | Dividend Year | Dividend per 10 Shares (yuan) (tax inclusive) | Cash Dividend Amount (yuan) | Ratio of Net Profit Attributable to Ordinary Shareholders of the Listed Company in Consolidated Financial Statements | | :--- | :--- | :--- | :--- | | 2019 | 0.8 | 57,450,110.48 | 24.13% | | 2018 | 1.0 | 71,812,028.30 | 23.93% | | 2017 | 1.5 | 107,718,042.45 | 50.58% | Integrity Status of Controlling Shareholder and Actual Controller During the reporting period, all shares (representing 25.35% of total share capital) held by the company's controlling shareholder, Guogou Industrial Holdings Co., Ltd., were successively frozen and rotationally frozen by multiple courts, and on November 5, 2019, the Hefei Intermediate People's Court ruled to accept the restructuring application of Industrial Holdings and its parent company Guogou Investment Co., Ltd. and other related entities, while the actual controller's Guogou Investment Co., Ltd. also had multiple debt defaults - The controlling shareholder, Industrial Holdings, had all 182,050,800 shares (representing 25.35% of the total share capital) frozen by the courts[122][147] - On November 5, 2019, the Hefei Intermediate People's Court in Anhui Province ruled to accept the restructuring application of the controlling shareholder, Industrial Holdings, and several enterprises under its actual controller[122][148] Significant Related Party Transactions During the reporting period, the company engaged in two types of significant related party transactions: routine operations included purchasing phosphate rock from associate Guizhou Lufa Industrial Co., Ltd. for 202 million yuan, and asset acquisition involved wholly-owned subsidiary Xinhong Health acquiring 100% equity in Xuancheng Huaxin Health Examination Clinic Co., Ltd. for 30.50 million yuan, which constituted a related party transaction Significant Related Party Transactions | Related Party | Type of Related Party Transaction | Content of Related Party Transaction | Amount Incurred in Current Period (yuan) | | :--- | :--- | :--- | :--- | | Guizhou Lufa Industrial Co., Ltd. | Purchase of Goods | Purchase of raw materials and sale of phosphate rock | 202,159,500 | | Xuancheng Dongchen Health Industry Management Co., Ltd. and Fang Wanpeng | Asset Acquisition | Acquisition of 100% equity in Xuancheng Huaxin Health Examination Clinic Co., Ltd. | 30,500,000 | Social Responsibility Performance The company actively fulfilled its social responsibilities, donating 10 million yuan through the Ningguo City Charity Association to disaster-stricken Ningguo City, Anhui Province, following Typhoon Lekima in August 2019, with Chairman Jin Guoqing personally contributing 1 million yuan, and the report also details the company's environmental protection efforts as a key pollutant-discharging entity, including pollutant emission data, operation of pollution control facilities, and emergency response plans for environmental incidents - In August 2019, in response to Typhoon Lekima, the company donated 10 million yuan in cash to Ningguo City, its location, and the chairman personally donated 1 million yuan[167] - The company and its subsidiaries are listed as key pollutant-discharging entities by environmental protection authorities, and the report details the emission concentrations, total amounts, and compliance standards for major pollutants (e.g., fluoride, sulfur dioxide, COD) from each branch[170][171][173] Share Changes and Shareholder Information This chapter discloses changes in the company's share capital structure and major shareholder information, noting a slight increase in total share capital from 718,120,283 shares to 718,126,381 shares due to convertible bond conversions, with 44,696 shareholders at period-end, and the top two shareholders being Guogou Industrial Holdings Co., Ltd. (25.35%) and Anhui Ningguo Agricultural Production Materials Co., Ltd. (11.41%), while the controlling shareholder's entire stake is pledged and frozen Share Change Status During the reporting period, the company's total share capital changed due to the conversion of "Sierte Convertible Bonds," increasing from 718,120,283 shares to 718,126,381 shares, a net increase of 6,098 shares, with minor adjustments between restricted and unrestricted shares due to executive shareholding changes - Due to convertible bond conversions, the company's total share capital increased from 718,120,283 shares to 718,126,381 shares, an increase of 6,098 shares[187][188] Shareholders and Actual Controller Information As of the end of 2019, the company had 44,696 shareholders, with Guogou Industrial Holdings Co., Ltd. as the controlling shareholder (25.35% stake) and Mr. Yuan Qihong as the actual controller, while Anhui Ningguo Agricultural Production Materials Co., Ltd. was the second largest shareholder (11.41% stake), and all shares held by the controlling shareholder were pledged and frozen Top Shareholders | Shareholder Name | Shareholder Nature | Shareholding Ratio | Number of Shares Held at Period-End | Share Status | | :--- | :--- | :--- | :--- | :--- | | Guogou Industrial Holdings Co., Ltd. | Domestic Non-State-Owned Legal Person | 25.35% | 182,050,800 | Pledged/Frozen | | Anhui Ningguo Agricultural Production Materials Co., Ltd. | Domestic Non-State-Owned Legal Person | 11.41% | 81,951,500 | Pledged | | Jin Guoqing | Domestic Natural Person | 3.42% | 24,560,000 | - | - The controlling shareholder, Guogou Industrial Holdings Co., Ltd., had all 182,050,800 shares held in the company pledged and frozen[195] Convertible Corporate Bonds Related Information This chapter details the company's "Sierte Convertible Bonds" issued in 2019, noting that the conversion price was adjusted from 6.25 yuan/share to 6.15 yuan/share due to the 2018 equity distribution, with a cumulative 6,098 shares converted from October 14, 2019, to year-end, representing a minimal portion of the total issuance, and also listing the top ten convertible bondholders at period-end Conversion Price Adjustment Due to the company's 2018 equity distribution (a dividend of 1.00 yuan per 10 shares), the conversion price of "Sierte Convertible Bonds" was adjusted from an initial 6.25 yuan/share to 6.15 yuan/share, effective May 30, 2019 - Due to the implementation of the 2018 equity distribution, the conversion price of "Sierte Convertible Bonds" was adjusted from 6.25 yuan/share to 6.15 yuan/share[209] Cumulative Conversion Status "Sierte Convertible Bonds" entered the conversion period on October 14, 2019, and as of December 31, 2019, a cumulative 37,600 yuan had been converted into 6,098 company shares, representing 0.00% of the total shares issued before conversion began, with the unconverted amount representing nearly 100% of the total issuance Cumulative Convertible Bond Conversion | Convertible Bond Abbreviation | Total Issued (units) | Cumulative Converted Shares (shares) | Unconverted Amount (yuan) | % of Unconverted Amount to Total Issued Amount | | :--- | :--- | :--- | :--- | :--- | | Sierte Convertible Bonds | 8,000,000 | 6,098 | 799,962,400.00 | 100.00% | Directors, Supervisors, Senior Management, and Employees This chapter discloses the basic information of the company's governance and employee structure, noting a stable board, supervisory board, and senior management team, with one independent director change due to term expiration, a total workforce of 2,978 employees, predominantly production personnel, and a well-established compensation and training system supporting the company's development strategy Compensation of Directors, Supervisors, and Senior Management The compensation for the company's directors, supervisors, and senior management is reviewed by the Remuneration and Assessment Committee and approved by the Board of Directors or Shareholders' Meeting, with the total remuneration paid to key management personnel in 2019 amounting to 3.0532 million yuan, including 981,100 yuan in pre-tax remuneration for Chairman Jin Guoqing - In 2019, the total remuneration paid by the company to key management personnel (directors, supervisors, and senior executives) was 3.0532 million yuan[233][235] Company Employee Information As of the end of the reporting period, the company had a total of 2,978 employees, with production personnel being the largest group at 1,627 individuals (54.6% of the total), followed by technical and administrative staff, and the vast majority of employees (2,781 individuals) holding college degrees or lower Employee Professional Composition | Professional Composition | Number of People (persons) | | :--- | :--- | | Production Personnel | 1,627 | | Sales Personnel | 352 | | Technical Personnel | 516 | | Financial Personnel | 33 | | Administrative Personnel | 450 | | Total | 2,978 | Corporate Governance This chapter describes the company's governance structure and operations, confirming a sound corporate governance framework compliant with regulatory requirements across shareholder meetings, board and supervisory board operations, relationship with the controlling shareholder, and information disclosure, maintaining independence in business, personnel, assets, organization, and finance, and holding one annual and two extraordinary general meetings during the reporting period Independence of the Company from its Controlling Shareholder The company maintains complete independence from its controlling shareholder in business, personnel, assets, organization, and finance, possessing independent operations and autonomous management capabilities, a sound corporate governance structure, and no instances of illegal interference by the controlling shareholder in company decisions or operations - The company is completely separate from its shareholders in terms of business, personnel, assets, organization, and finance, possessing independent business operations and the ability to autonomously develop and operate in the market, with a complete supply, production, and sales system[249] Internal Control Evaluation Report Based on the company's board self-assessment report and the internal control attestation report issued by Rongcheng Certified Public Accountants, the company maintained effective internal controls over financial reporting in all material respects as of December 31, 2019, with no significant or material internal control deficiencies identified during the reporting period - The internal control attestation report concluded that as of December 31, 2019, the company maintained effective internal controls over financial reporting in all material respects, in accordance with the "Basic Standards for Enterprise Internal Control" and relevant regulations[268] - During the reporting period, the company found no significant or material deficiencies related to financial or non-financial reporting[266][267] Corporate Bonds Related Information This chapter discloses information on the company's outstanding corporate bonds, noting that "14 Sierte 01" matured and was fully repaid in October 2019, while "15 Sierte Bond" remains outstanding with a year-end balance of 608,200 yuan, and the company maintains a good credit standing with a stable AA rating, showing significant improvements in current and quick ratios due to reduced current liabilities, though the interest coverage ratio decreased Corporate Bond Basic Information During the reporting period, the company had two corporate bonds: "14 Sierte 01" matured and was repaid on October 21, 2019, while "15 Sierte Bond" is due on November 18, 2020, with a year-end balance of 608,200 yuan and a coupon rate of 4.98% Corporate Bond Basic Information | Bond Abbreviation | Bond Code | Maturity Date | Year-End Bond Balance (10,000 yuan) | Interest Rate | | :--- | :--- | :--- | :--- | :--- | | 14 Sierte 01 | 112230 | 2019年10月21日 | 0 | 6.50% | | 15 Sierte Bond | 112295 | 2020年11月18日 | 60.82 | 4.98% | Key Solvency Financial Indicators As of the end of 2019, the company's solvency indicators changed, with current and quick ratios significantly increasing to 290.82% and 190.56% respectively, primarily due to reduced current liabilities, while the asset-liability ratio slightly rose to 29.28%, EBITDA decreased by 10.32%, and the interest coverage ratio fell from 8.83 times to 6.6 times Key Solvency Financial Indicators | Item | 2019 | 2018 | Period-on-Period Change Rate | | :--- | :--- | :--- | :--- | | EBITDA (10,000 yuan) | 51,122.89 | 57,005.73 | -10.32% | | Current Ratio | 290.82% | 186.84% | 103.98% | | Asset-Liability Ratio | 29.28% | 26.65% | 2.63% | | Quick Ratio | 190.56% | 118.89% | 71.67% | | Interest Coverage Ratio | 6.6 | 8.83 | -25.25% | Financial Report This chapter presents the audited 2019 financial report, for which Rongcheng Certified Public Accountants (Special General Partnership) issued a standard unqualified audit opinion, with key audit matters being revenue recognition and inventory impairment; this year, the company adopted new financial instrument standards, retrospectively adjusting the classification and measurement of financial assets, primarily reclassifying some notes receivable to financial assets held for collection, and the financial statements comprehensively detail the company's assets, liabilities, profit, cash flow, and owner's equity Audit Report Rongcheng Certified Public Accountants (Special General Partnership) audited the company's 2019 financial statements and issued a standard unqualified audit opinion, concluding that the financial statements fairly present the company's financial position and operating results in all material respects, with key audit matters being revenue recognition and inventory impairment - The auditing firm issued a standard unqualified audit opinion, stating that the financial statements fairly present the company's financial position, operating results, and cash flows for 2019[291] - Key audit matters for this period's financial statement audit were revenue recognition and inventory impairment[293][294][297] Changes in Consolidation Scope During the reporting period, the company's scope of consolidation changed, adding two subsidiaries: Xuancheng Huaxin Health Examination Clinic Co., Ltd. through a business combination not under common control, and the newly established Anhui Sierte Ecological Agriculture Technology Co., Ltd., while one subsidiary, Anhui Xinhong Health Management Co., Ltd., was deregistered - During the reporting period, the company added a new subsidiary, Xuancheng Huaxin Health Examination Clinic Co., Ltd., through a business combination not under common control[350] - During the reporting period, the company established a new wholly-owned subsidiary, Anhui Sierte Ecological Agriculture Technology Co., Ltd.[350] - During the reporting period, the company deregistered its wholly-owned subsidiary, Anhui Xinhong Health Management Co., Ltd.[350] Changes in Significant Accounting Policies and Estimates In 2019, the company adopted new financial instrument standards issued by the Ministry of Finance, adjusting the recognition, classification, and measurement of financial instruments, primarily reclassifying eligible bank acceptance bills from "Notes Receivable" to the new "Receivables Financing" item, measured at fair value, using retrospective adjustment without restating comparative financial statement data - The company adopted new financial instrument standards effective January 1, 2019, retrospectively adjusting the classification and measurement (including impairment) of financial instruments[554][555] - The change in accounting policy resulted in the split of "Notes and Accounts Receivable" on the balance sheet into "Notes Receivable," "Accounts Receivable," and the new "Receivables Financing" item[553] - At the beginning of the year, 68.74 million yuan of notes receivable in the consolidated financial statements were reclassified to receivables financing[558]