QUNXING(SZ:002575)2020-06-22 16:00Financial Performance - The company’s operating revenue for 2019 was ¥35,042,746.61, representing an increase of 83.99% compared to ¥19,045,648.30 in 2018[18]. - The net profit attributable to shareholders for 2019 was -¥189,300,218.46, a decrease of 2,834.84% from ¥6,921,812.73 in 2018[18]. - The net profit after deducting non-recurring gains and losses was -¥141,208,412.42, a decline of 8,353.61% from -¥1,670,391.55 in 2018[19]. - The net cash flow from operating activities decreased by 39.21% to ¥11,484,935.99 from ¥18,892,112.07 in 2018[19]. - The total assets at the end of 2019 were ¥906,444,338.98, a slight decrease of 0.12% from ¥907,498,001.19 at the end of 2018[19]. - The net assets attributable to shareholders decreased by 19.76% to ¥721,082,472.09 from ¥898,623,676.50 at the end of 2018[19]. - The company reported a basic earnings per share of -¥0.32 for 2019, compared to ¥0.01 in 2018, reflecting a decrease of 3,300.00%[19]. - The company achieved a total operating revenue of 35,042,746.61 CNY in 2019, representing an increase of 83.99% compared to 19,045,648.30 CNY in 2018[49]. - The net profit attributable to shareholders was -18,930.02 CNY for 2019, indicating a significant loss[45]. - Revenue from technology innovation services and digital economy business reached 2,435.03 CNY in 2019, reflecting the initial success of the new development strategy[45]. - The revenue from consulting services was 13,237,129.91 CNY, accounting for 37.77% of total revenue, with a gross margin of 66.54%[53]. - Rental income increased by 244.62% to 7,249,554.79 CNY, contributing 20.69% to total revenue[50]. - The company’s operating costs decreased by 17.28% to 12,875,072.10 CNY in 2019, compared to 15,565,577.71 CNY in 2018[58]. Internal Control and Audit - The company reported significant internal control deficiencies, impacting the accuracy and completeness of financial data, particularly regarding non-operating fund occupation by actual controllers and related parties[3]. - The company has received an audit report with a disclaimer of opinion from Da Hua Accounting Firm, indicating concerns over financial reporting[4]. - The company’s board of directors acknowledged the non-standard audit report issued by Da Hua Accounting Firm, reflecting the actual situation of the company[109]. - The board will take effective measures to address the issues raised in the audit report to protect the interests of investors[109]. - The independent directors support the board's efforts to resolve the issues highlighted in the audit report[111]. - The actual controller's lack of regulatory awareness has led to violations of internal control systems, resulting in non-operating fund occupation[198]. - The company will enhance internal audit capabilities and ensure adherence to internal control systems to maintain financial data integrity[191]. Business Strategy and Expansion - The company has expanded its business scope to include high-tech projects, cultural and leisure services, and software development, among others[16]. - The company has positioned itself as a "full industry chain service provider for technological innovation" in response to the development of China's technology innovation industry[31]. - The company aims to create a comprehensive technology innovation service system, focusing on "information + consulting + capital" across various sectors[32]. - The company is actively promoting the integration of advanced technologies like big data and AI into traditional industries, enhancing overall innovation and productivity[35]. - The company is focusing on transforming its main business towards digital economy and consulting services, which has led to increased revenue in these areas[51]. - The company has focused on expanding its product offerings in digital finance, blockchain technology, and smart agriculture[64]. - The company has identified the digital economy as a key area for future growth, aligning with trends in new infrastructure and data marketization[90]. - The company is likely to explore new product development and technological advancements as part of its growth strategy[171]. Governance and Compliance - The company has committed to maintaining independence in operations and governance, ensuring no direct or indirect competition with its controlling shareholders[101]. - The company has established a comprehensive human resources management system but faces risks in attracting high-quality talent necessary for future development[91]. - The company has implemented a cash dividend policy that aligns with its articles of association and shareholder resolutions, ensuring clarity and compliance in decision-making processes[96]. - The company emphasizes investor relations management, with the board secretary designated as the responsible person for investor relations[196]. - The company has committed to fair and timely information disclosure to ensure all shareholders receive relevant information[196]. - The company has established specialized committees within the board to promote standardized operations and sustainable development[195]. - The supervisory board consists of three members, including two employee representatives, ensuring compliance and protection of shareholder interests[195]. Risks and Challenges - The company faces various risks including business upgrade risks, new business expansion risks, and market competition risks, which are detailed in the report[5]. - The company emphasizes the importance of risk awareness for investors regarding future development statements and potential discrepancies with actual performance[5]. - The company has experienced a risk of business upgrades due to investments in technology services, digital economy, and industrial incubation, which are subject to market fluctuations and competition[91]. - The company is exposed to market competition risks in the technology service sector, prompting it to optimize its business model and enhance innovation capabilities[92]. Shareholder and Management Changes - The company has experienced a turnover in key management positions, with several directors and supervisors leaving in 2019[168]. - The company’s management changes may impact future strategic decisions and operational continuity[168]. - The new chairman, Fan Xiaodong, has over 20 years of experience in corporate operations and financial management, previously serving in senior roles at Michelin and Sinopec[171]. - The company has appointed new management personnel, including a new general manager and deputy general manager, indicating a strategic shift in leadership[171]. - The total remuneration for directors, supervisors, and senior management during the reporting period amounted to CNY 251.03 million[181]. - The company has a total of 189 employees receiving salaries during the reporting period[183]. - The company’s management team remains stable, with no new shares issued or significant changes in ownership among current executives[166]. Related Party Transactions - The company reported a total of 1,196.7 million yuan in related party transactions, with 733.96 million yuan (60.80%) related to sales to affiliated parties[122]. - The company engaged in a related party transaction involving the provision of technical services valued at 462.78 million yuan, representing 43.07% of the approved transaction amount[122]. - The company has no significant guarantees or entrusted cash asset management activities during the reporting period[131][132]. Non-Operating Fund Occupation - The actual controller has committed to returning a total of 12,000.00 CNY in cash by the end of 2020 to address non-operating fund occupation[46]. - The total amount of non-operating funds occupied by the actual controller and its related parties reached CNY 276.76 million as of December 31, 2019[107]. - The company received a repayment of CNY 50 million from the actual controller for non-operating funds occupied as of June 19, 2020[107]. - The company will maintain close communication with the actual controller regarding the repayment of occupied funds[107]. - The company plans to strengthen compliance awareness and improve governance structures to prevent future fund occupation incidents[190]. Audit and Financial Reporting - The company executed new financial instrument standards starting January 1, 2019, impacting the recognition and measurement of financial instruments[112]. - There were no significant accounting errors that required retrospective restatement during the reporting period[113]. - The company has not made any profit forecasts for assets or projects during the reporting period[105]. - The company has not engaged in any major asset or equity sales during the reporting period[84][85].