FENGYUAN(SZ:002805)2019-04-18 16:00Financial Performance - The company's operating revenue for 2018 was CNY 264,810,857.30, a decrease of 17.48% compared to CNY 320,909,160.88 in 2017[15]. - The net profit attributable to shareholders for 2018 was CNY 16,308,895.72, down 56.97% from CNY 37,901,717.49 in 2017[15]. - The net profit attributable to shareholders after deducting non-recurring gains and losses was CNY 11,044,834.11, a decline of 65.96% from CNY 32,446,740.74 in 2017[15]. - The basic earnings per share for 2018 was CNY 0.17, a decrease of 56.41% from CNY 0.39 in 2017[15]. - The company's total revenue for the trade sector was approximately ¥95.59 million, a decrease of 31.97% year-over-year, with a gross margin of 23.17%, down 3.39% from the previous year[43]. - In the pharmaceutical sector, revenue was about ¥54.14 million, down 21.83% year-over-year, with a gross margin of 25.94%, a decrease of 3.43% compared to last year[43]. - The rare earth sector reported revenue of approximately ¥44.34 million, a decline of 30.60% year-over-year, with a gross margin of 22.10%, down 1.09% from the previous year[44]. - The glass sector saw revenue increase by 9.55% year-over-year to about ¥27.17 million, but the gross margin fell to 6.33%, down 12.76% from last year[44]. - The company reported a significant increase in revenue from other products, which rose by 291.80% year-over-year to approximately ¥27.47 million, with a gross margin of 21.78%[44]. Cash Flow and Assets - The net cash flow from operating activities increased by 232.05% to CNY 79,357,782.53, compared to CNY 23,899,243.37 in 2017[15]. - The total assets at the end of 2018 were CNY 782,614,890.14, an increase of 4.15% from CNY 751,457,603.71 at the end of 2017[16]. - The net assets attributable to shareholders at the end of 2018 were CNY 580,382,414.84, up 1.72% from CNY 570,570,961.90 at the end of 2017[16]. - The company's total cash inflow from operating activities decreased by 30.89% to ¥248,202,687.81, while cash outflow decreased significantly by 49.64% to ¥168,844,905.28[55]. - The net cash flow from investment activities improved by 76.12%, with outflows totaling ¥34,992,697.58 compared to ¥146,505,409.72 in the previous year[55]. - The company reported a significant increase in cash and cash equivalents, with a net increase of 741.12% to ¥33,916,794.87[55]. - Fixed assets increased by 13.77% to ¥334,946,216.21, attributed to increased investment in fixed assets and the completion of the lithium iron phosphate production line[59]. - The proportion of cash and cash equivalents to total assets rose from 3.00% in 2017 to 8.08% in 2018, reflecting improved liquidity[59]. Production and Technology - The company has established a production line for lithium battery cathode materials with an annual capacity of 15,000 tons, with the first phase of lithium iron phosphate production line already in normal production[26]. - The company has developed key technologies in oxalic acid production, including low-temperature oxidation technology and the use of ancient dragon acid mother liquor as a raw material[29]. - The company is focusing on high energy density and high safety products in the lithium battery materials sector, aiming to improve product performance and service quality[27]. - The production line for lithium iron phosphate with an annual capacity of 3,000 tons was ready for normal production by December 31, 2018[37]. - The trial production line for ternary materials with an annual capacity of 2,000 tons has entered the trial production phase[37]. - The company has established strategic partnerships with various research institutions to enhance its R&D capabilities and maintain its competitive edge in the new energy materials industry[31]. Market and Demand - The demand for high-nickel ternary materials is expected to grow significantly in the coming years, with the market for high-nickel 811 battery cells set to launch in 2019[33]. - The lithium battery sector is experiencing rapid growth, with China's new energy vehicle sales reaching 1.256 million units in 2018, a year-on-year increase of 62%[81]. - The demand for oxalic acid in the rare earth industry is expected to increase as domestic production capacity is released and overseas mining resumes, potentially boosting exports significantly[73]. - The pharmaceutical industry is projected to double its total production capacity in 2019, leading to a substantial increase in oxalic acid demand, particularly for Vitamin B6 production[73]. - The new applications of oxalic acid in the electronic industry, such as in supercapacitors and electronic ceramics, are anticipated to create significant future demand, with an estimated total demand of 20,000 tons per year for supercapacitors alone[77]. Shareholder and Governance - The company plans to distribute a cash dividend of CNY 0.33 per 10 shares to all shareholders, based on a total of 96,913,800 shares[4]. - The company has a cash dividend policy that has remained consistent, with a total cash dividend of 6,783,966.00 yuan distributed in 2017, representing 17.90% of the net profit attributable to ordinary shareholders[92]. - The company will increase its total share capital from 96,913,800 shares to 145,370,700 shares by issuing 5 additional shares for every 10 shares held[96]. - The company reported a shareholding ratio of 58.06% before the issuance, with a lock-up period of 36 months post-listing[102]. - The company has a plan to reduce 100% of its holdings within two years after the lock-up period, with the reduction price not lower than the latest audited net asset per share[106]. - The company emphasizes that any reduction actions must not violate commitments made in the public offering and listing documents[107]. - The company has established a performance assessment mechanism for senior management to ensure alignment with shareholder interests and industry standards[171]. - There are no reported penalties from regulatory bodies against the current or former board members and executives in the last three years, reflecting good governance practices[171]. Environmental and Social Responsibility - The company has implemented a wastewater treatment facility that has achieved closed-loop circulation since August 2017, eliminating external discharge[143]. - The company has constructed two SCR denitrification devices and various air pollution control facilities, which are operating normally[143]. - The company actively engages in social responsibility initiatives, including employment opportunities for college graduates and community support activities[140]. - The company has a robust environmental monitoring system in place, with real-time data uploaded to the Shandong Province Pollution Source Monitoring Information Sharing System[144]. - The company adheres to environmental protection regulations and integrates energy conservation and emission reduction into daily operations[140]. - The company has developed an emergency response plan for environmental incidents, regularly updated and practiced according to actual conditions and regulations[144]. Internal Control and Audit - The company maintained a robust internal control system, ensuring the accuracy of financial reporting and compliance with regulations[191]. - The audit report indicates that the accuracy and completeness of the fixed assets and construction in progress are critical for the financial statements[199]. - The company conducted various audit procedures, including on-site inspections of significant production equipment and reviewing the usage of fixed assets[200]. - The internal control evaluation report indicated that 100% of the total assets and operating income were included in the evaluation scope[190]. - The company received a standard unqualified audit opinion from Da Xin Accounting Firm on April 17, 2019, confirming that the financial statements fairly reflect the company's financial position and operating results for 2018[197].