ZHmag(SZ:300224)2019-03-25 16:00Financial Performance - The company achieved total operating revenue of CNY 1,679,955,420.97 in 2018, representing a year-on-year increase of 40.89%[27]. - The net profit attributable to shareholders was CNY -81,560,746.82, a decline of 180.28% compared to the previous year[27]. - The net cash flow from operating activities was CNY 136,308,463.37, an increase of 146.54% year-on-year[27]. - The total assets at the end of 2018 were CNY 3,749,627,537.27, a decrease of 2.52% from the end of 2017[27]. - The company reported a significant decline in basic and diluted earnings per share, both at CNY -0.10, down 183.33% from the previous year[27]. - The company's net profit decreased by 180.28% year-on-year, resulting in a loss of CNY 8,156.07 million[57]. - The total distributable profit for the year was 470,797,886.11 yuan, with no cash dividends distributed, resulting in a cash dividend ratio of 0.00%[143]. - The profit distribution plan for 2018 proposed no profit distribution or capital reserve increase, with undistributed profits carried forward to the next year[143]. Goodwill and Impairment - The goodwill from the acquisition of 81.5321% of Shanghai Dajun amounted to CNY 26,884.27 million, with impairment provisions of CNY 14,866.81 million recorded in 2018, leaving a remaining book value of CNY 1,822.95 million[10]. - The company recognized goodwill impairment losses of CNY 14,866.81 million, which reduced the net profit for the period by CNY 12,636.78 million[41]. - The company plans to enhance support for its new energy vehicle motor drive system business to mitigate the risk of goodwill impairment and aims to become a leading supplier in the global new energy vehicle industry[10]. Market and Industry Position - The new energy vehicle industry is recognized as a strategic emerging industry in China, with long-term government support expected, although short-term uncertainties remain[8]. - The company aims to maintain a stable supply of raw materials through strategic cooperation with upstream suppliers and flexible pricing mechanisms with downstream customers[7]. - The company is focused on leveraging its technological advantages and industry position to support the growth of Shanghai Dajun and improve its competitive capabilities in the market[8]. - The company plans to continue expanding its market presence in the new energy vehicle sector, leveraging its technological capabilities and partnerships with major automotive manufacturers[40]. - The company is focusing on seven strategic markets, including automotive EPS and new energy vehicles, to strengthen its market position and expand internationally[56]. - The company aims to establish itself as a leading supplier in the domestic electric vehicle motor drive system industry while enhancing its market competitiveness globally[130]. Research and Development - The company’s R&D capabilities are recognized as a national-level enterprise technology center, focusing on continuous innovation and market expansion[49]. - The total R&D expenditure for the year was 111,690,609.77 CNY, accounting for 6.65% of operating revenue, a decrease from 8.11% in the previous year[79]. - The company has added 32 new patents in 2018, bringing the total to 233 patents by the end of the year[58]. Production and Sales - The company reported a significant increase in sales volume for its new energy vehicle motor drive system, with a substantial growth compared to 2017, although the gross profit margin faced a sharp decline due to subsidy cuts and rising raw material prices[8]. - The sales volume of new energy vehicle motor drive systems was 123,160 units, representing a year-on-year growth of 99.18%[68]. - The company achieved a significant increase in the production of pure electric vehicles, with production and sales reaching 986,000 units, reflecting a year-on-year growth of 47.9% and 50.8%[44]. - Revenue from high-performance NdFeB permanent magnet materials and components increased by 47.86% year-on-year, totaling CNY 1,126,557,859.18, accounting for 67.06% of total revenue[64]. - Revenue from the new energy vehicle motor drive system grew by 28.55% year-on-year, amounting to CNY 553,397,561.79, which represents 32.94% of total revenue[64]. Financial Management and Strategy - The company’s financial report emphasizes the importance of accurate and complete financial disclosures, ensuring accountability from its management team[5]. - The company has implemented strategies to manage the risks associated with fluctuations in rare earth material prices, including optimizing inventory management and strengthening strategic partnerships with suppliers[7]. - The company’s cash dividend policy has been transparent and compliant with regulations, ensuring the protection of minority shareholders' rights[140]. - The company has committed to using all raised funds for its main business operations, with a plan to disclose the usage within 6 months of fund receipt[148]. - The company has not reported any issues or other situations regarding the use and disclosure of raised funds[116]. Subsidiaries and International Expansion - The company established a wholly-owned subsidiary in South Korea to enhance customer response and optimize market development[61]. - The company has set up a new subsidiary, Jeonghai Magnetic Materials Korea Co., Ltd., to enhance its overseas market presence and promote internationalization of technology and products[123]. - The company is set to accelerate its market expansion efforts, particularly in the international market, by establishing a North American subsidiary[132]. Compliance and Governance - The company has maintained compliance with all regulatory commitments without any violations reported[152]. - The company has not faced any penalties or rectification issues during the reporting period, reflecting compliance with regulations[163]. - The company’s management team has committed to serving until the completion of the profit compensation obligations as per the agreement[147]. - All commitments made by the company’s shareholders and management regarding share transfer restrictions and competitive activities have been strictly adhered to, with no violations reported[148].