BUSEN(SZ:002569)2020-04-29 16:00Financial Performance - As of December 31, 2019, the cumulative net loss of Busen was RMB 149.26 million, with negative cash flow from operating activities for three consecutive years[4]. - The company's operating revenue for 2019 was CNY 359,122,422.13, representing a 12.28% increase compared to CNY 319,858,237.37 in 2018[17]. - The net profit attributable to shareholders in 2019 was CNY 44,484,237.79, a significant turnaround from a loss of CNY 192,822,170.84 in 2018, marking a 123.07% improvement[17]. - The net profit attributable to shareholders after deducting non-recurring gains and losses was CNY -25,221,525.28, an improvement of 44.80% from CNY -45,688,757.50 in 2018[17]. - The net cash flow from operating activities improved to CNY -11,853,424.23 in 2019, a 75.02% increase from CNY -47,450,462.61 in 2018[17]. - The basic earnings per share for 2019 was CNY 0.32, compared to a loss of CNY 1.38 per share in 2018, reflecting a 123.07% increase[17]. - The total assets at the end of 2019 were CNY 616,300,769.61, a decrease of 6.49% from CNY 659,072,236.64 at the end of 2018[17]. - The net assets attributable to shareholders increased by 13.54% to CNY 338,957,519.88 at the end of 2019, up from CNY 298,544,974.38 at the end of 2018[17]. - The company reported a net loss of CNY 2,522,150.00 after deducting non-recurring gains and losses, which is an improvement of 44.80% year-on-year[35]. - The company achieved a total operating revenue of CNY 359,122,422.13 in 2019, representing a year-on-year growth of 12.28%[35]. Shareholder and Dividend Policy - The company plans not to distribute cash dividends, issue bonus shares, or increase share capital from reserves[5]. - In 2019, the cash dividend amount was 0.00, with a net profit attributable to shareholders of 44,484,237.79, resulting in a cash dividend ratio of 0.00%[89]. - The company did not distribute any cash dividends or increase share capital from capital reserves in the past three years, including the reporting period[88]. Business Strategy and Market Position - The company plans to invest ¥10 million to establish a wholly-owned subsidiary for clothing business and ¥3 million for a financial technology subsidiary, aiming to strengthen its clothing business and expand into financial technology[30]. - The company aims to raise ¥300 million for a new investment fund focused on big data and smart retail, with an initial investment of ¥28 million[30]. - The company emphasizes the importance of brand building and innovation in the clothing industry, supported by favorable government policies[26]. - The company continues to enhance its product quality, design, and supply chain management to meet consumer demands for high-quality and fashionable men's clothing[26]. - The company is actively exploring e-commerce opportunities and has established partnerships with major third-party e-commerce platforms[28]. - The company is adapting to the new retail landscape by integrating online and offline sales channels to enhance overall competitiveness[29]. - The company plans to enhance R&D investment and strengthen independent innovation capabilities, focusing on the men's clothing market and improving product competitiveness[77]. - The company aims to upgrade its clothing business and expand into the fashion new retail industry, leveraging existing resources to create a "new men's clothing" brand[78]. - The company will adopt an online and offline integrated new retail model to accelerate its fashion industry layout and enhance e-commerce sales[81]. Legal and Compliance Issues - The company is currently involved in litigation with claims totaling approximately RMB 65 million, which could adversely affect its cash flow and operations[84]. - The company has been under investigation for alleged criminal activities related to the falsification of documents and unauthorized guarantees[122]. - The company has received a civil judgment that allows it to pursue recovery from Tianma Bearing Group for any amounts paid to Deqing Financial[123]. - The company has been cooperating with law enforcement regarding the ongoing investigations[122]. - The company has disclosed the litigation details and its implications in its annual report[123]. - The company is currently involved in multiple lawsuits, but the impact on future profits remains uncertain[123]. - The company has stated that it has no financial transactions with the plaintiff in the recent lawsuit, indicating a potential defense against the claims made[126]. Corporate Governance - The company maintains an independent financial accounting system and continues to operate independently without shared bank accounts with related parties[93]. - The company guarantees the independence of its business operations and has no direct or indirect competition with other enterprises controlled by the actual controller[95]. - The company committed to avoiding related party transactions and ensuring fair treatment of minority shareholders[96]. - The company guarantees compliance with relevant laws and regulations, ensuring the protection of shareholder rights[97]. - The actual controller of the company will not transfer shares within the next 12 months, ensuring stability in ownership[98]. - The company will not engage in substantial competition with its own subsidiaries, maintaining a focus on its core business[99]. - The company has a structured compensation decision process involving a remuneration and assessment committee[182]. - The company has a diverse board with members holding various positions in other companies, enhancing its governance structure[182]. Employee and Operational Insights - The total number of employees in the company is 1,152, with 913 in the parent company and 239 in major subsidiaries[186]. - The professional composition includes 553 production personnel, 265 sales personnel, 98 technical personnel, 28 financial personnel, and 208 administrative personnel[186]. - The company emphasizes performance evaluation and aims to improve employee efficiency through a structured incentive policy, including fixed salaries, performance bonuses, and benefits[188]. - In 2019, the company implemented a comprehensive training program covering basic knowledge, professional skills, management enhancement, and vocational qualities[189]. Market Challenges and Risks - The company faces risks from policy changes, macroeconomic fluctuations, and industry cyclicality, which could impact its operations[83]. - The company is under pressure from inventory issues due to the macroeconomic environment, and it plans to improve internal management to mitigate this risk[84]. - The competitive landscape in the domestic men's clothing market is intensifying, with increasing concentration among leading brands[76]. - The overall performance of the clothing industry is showing a steady improvement, with a clear trend towards online and offline retail integration[76].