Baoli New(SZ:300116)2021-04-19 16:00Financial Performance - The company achieved operating revenue of 141 million yuan, a decrease of 74.16% year-on-year, and a net profit of -177 million yuan, a decrease of 163.80% year-on-year[4]. - The company’s operating revenue for 2020 was ¥140,504,993.97, a decrease of 74.16% compared to ¥543,815,130.85 in 2019[42]. - The net profit attributable to shareholders for 2020 was -¥170,795,598.86, down 157.95% from ¥294,722,969.63 in 2019[42]. - The net cash flow from operating activities was -¥352,205,283.73, a significant decline of 57,110.86% compared to -¥615,626.59 in 2019[42]. - The total assets at the end of 2020 were ¥775,156,565.87, a decrease of 37.94% from ¥1,249,074,024.55 at the end of 2019[42]. - The net assets attributable to shareholders at the end of 2020 were ¥397,395,768.95, down 29.55% from ¥564,115,681.15 at the end of 2019[42]. - The company reported a basic earnings per share of -¥0.04 for 2020, a decline of 157.14% from ¥0.07 in 2019[42]. - The company reported a total revenue of 2,112 million yuan for the year 2020[160]. - The net profit attributable to the company was -805.3 million yuan, indicating a significant loss[160]. Reasons for Decline - The main reasons for the decline in revenue and profit include high fixed costs due to underutilized capacity, expected credit losses on receivables, and inventory impairment losses of approximately 10 million yuan[4]. - The company reported a negative gross margin due to high fixed costs and underutilized capacity, leading to significant operating losses during the reporting period[85]. - In 2020, the company faced challenges in market expansion and cost control due to the impact of the pandemic, resulting in lower capacity utilization and higher unit costs[23]. Strategic Initiatives - After the completion of the restructuring plan, the company restructured its board on June 3, 2020, with Gao Baoqing appointed as the new chairperson and general manager, bringing extensive experience in the lithium battery industry[5]. - The company is focusing on the development of lithium iron phosphate batteries and plans to enhance its production capabilities through the acquisition of a PACK factory and investment in a 2GWh lithium battery project[6]. - The company plans to establish a new energy research institute to focus on key technology development and innovation in advanced battery technology[55]. - The company is actively expanding its market presence, having participated in the Jiangsu International New Energy Electric Vehicle and Parts Trade Fair in October 2020 to promote its new brand and products[56]. - The company is committed to optimizing its strategic layout and enhancing its competitiveness in the lithium battery market despite the challenges posed by the pandemic and market competition[6]. Market Trends - The lithium-ion battery industry continues to grow rapidly, with significant increases in production and sales in both electric vehicle and energy storage markets, indicating a positive outlook for the industry[6]. - The market potential for lithium iron phosphate batteries is significant, especially in the energy storage and low-speed electric vehicle markets[54]. - The new national standard for electric bicycles, implemented in April 2019, favors lithium batteries due to weight restrictions, further driving market demand for lithium battery electric bicycles[58]. - The electric two-wheeler market is anticipated to maintain high growth rates due to the implementation of new national standards and the rise of shared economy models[63]. - The company is positioned in the downstream of the lithium-ion battery industry chain, primarily producing lithium iron phosphate cells and battery packs[56]. Risks and Challenges - The company faces risks related to the judicial disposal of shares held by major shareholders, which could lead to passive reductions in shareholding[8]. - The company faces risks related to the implementation of the new national standard for electric bicycles, which may lead to a temporary decline in demand for electric bicycle batteries[19]. - The transition from lead-acid batteries to lithium batteries in the electric two-wheeler market may not proceed as expected due to price sensitivity among consumers[20]. - The competitive landscape is intensifying with domestic and international players like Samsung SDI and LG Chem entering the energy storage market, alongside traditional lead-acid battery companies transitioning to lithium batteries[25]. - The company is at risk of being unable to adapt to industry changes due to its reliance on a single product line, which could hinder its competitive resilience[22]. Shareholder and Legal Matters - The company received a court ruling allowing the forced auction of 108,500,000 shares of Jianrui Woneng stock to settle debts, which represents a significant legal development[10]. - As of the report date, major shareholder Li Yao holds 257,750,290 shares, accounting for 6.02% of the total share capital, all of which are judicially frozen[10]. - Li Yao has a performance commitment to compensate the company up to 5.2 billion RMB due to unmet profit targets from the acquisition of Watma, with 1.109 billion RMB already paid[14]. - The company has initiated a share repurchase plan for shares held by Li Yao, which are subject to judicial restrictions, creating uncertainty in execution[12]. - The company has committed to repurchasing shares at a nominal price of 1 RMB as part of the performance compensation agreement with Li Yao[14]. Production and Capacity - The company has resumed production with a capacity of 3GWh at its subsidiary Inner Mongolia Anding New Energy Co., Ltd[90]. - The company has established PACK factories in Huizhou, Wuxi, and Dongguan, leveraging synergies between PACK and cell production to drive sales[81]. - The company plans to expand its capacity for lithium iron phosphate soft pack and square batteries to meet diverse market demands[71]. - The company has made progress in the electric two-wheeler market by sending samples to most manufacturers, but there remains uncertainty in entering mainstream customer supply chains[23]. - The company has reported that the market replacement of lead-acid batteries with lithium batteries in light electric vehicles is progressing slower than anticipated[20]. Research and Development - The company is developing new products, including a 6.7 Ah battery cell with a target of 2,000 cycles at 1C, which has entered the pilot test phase[116]. - The company has achieved ISO9001 quality system certification and several other certifications, indicating a commitment to quality management[90]. - The company has committed to maintaining high product quality as a core competitive advantage and is continuously optimizing its quality management system[171]. - The company is committed to enhancing its core competitiveness through technology-driven strategies and optimizing its R&D system[170]. Corporate Governance - The company has undergone a management restructuring and is focusing on optimizing resources and enhancing production and sales teams[23]. - The management team, led by CEO Gao Baoqing, has extensive industry experience and has restructured the organization to enhance operational efficiency[80]. - The company has restructured its board and management team to improve decision-making and operational efficiency[91]. - The company has implemented the IATF16949:2016 system standard training and internal auditor training to enhance operational efficiency and support high-quality development[171]. Investment and Funding - The company has not distributed any cash dividends or implemented capital reserve transfers to increase share capital in the reporting period, with a net profit of -170,795,598.86 CNY[177]. - The company has committed to an investment project for the production and R&D of 20,000 S-type aerosol automatic fire extinguishing devices, with a total investment of CNY 9,400 million, achieving 89.69% completion as of January 17, 2017[136]. - The company has allocated CNY 3,990 million for the establishment of the Jianrui Fire Marketing Center, achieving 95.62% completion by December 31, 2015[138]. - The company has utilized all funds allocated for fixed asset investment in the aerosol fire extinguishing device project, with remaining funds redirected to working capital[139]. - The company has engaged in strategic acquisitions to enhance its market position and expand its business operations[143].