国瓷材料(300285) - 2019 Q1 - 季度财报

Part I Important Notice Important Notice The board, supervisory board, and senior management affirm the quarterly report's truthfulness, accuracy, and completeness, with all directors attending the review - The company's board of directors, supervisory board, and senior management guarantee the truthfulness, accuracy, and completeness of the quarterly report content[2] - All directors attended the board meeting that reviewed this quarterly report[2] - Company head Zhang Xi, chief accountant Xiao Qiang, and head of accounting department Wang Lianzhen declare that the financial statements are true, accurate, and complete[2] Part II Company Profile I. Key Accounting Data and Financial Indicators Q1 2019 saw strong financial performance with significant growth in total operating revenue and net profit, positively impacted by non-recurring gains Key Accounting Data and Financial Indicators for Q1 2019 | Indicator | Current Period (RMB) | Prior Period (RMB) | Change from Prior Period | | :--- | :--- | :--- | :--- | | Total Operating Revenue | 464,920,118.39 | 323,187,251.14 | 43.85% | | Net Profit Attributable to Shareholders of Listed Company | 119,826,303.57 | 75,325,559.14 | 59.08% | | Net Profit Attributable to Shareholders of Listed Company (Excluding Non-Recurring Gains and Losses) | 115,063,172.54 | 69,010,931.51 | 66.73% | | Net Cash Flow from Operating Activities | 71,780,036.03 | 70,874,846.60 | 1.28% | | Basic Earnings Per Share (RMB/share) | 0.19 | 0.13 | 46.15% | | Diluted Earnings Per Share (RMB/share) | 0.19 | 0.13 | 46.15% | | Weighted Average Return on Net Assets | 3.38% | 3.88% | -0.50% | | Period-End Indicators | End of Reporting Period (RMB) | End of Previous Year (RMB) | Change from End of Previous Year | | Total Assets | 4,498,909,629.83 | 4,378,182,398.86 | 2.76% | | Net Assets Attributable to Shareholders of Listed Company | 3,335,751,634.03 | 3,215,925,330.46 | 3.73% | Non-Recurring Gains and Losses Items and Amounts | Item | Amount from Year-Beginning to End of Reporting Period (RMB) | | :--- | :--- | | Government subsidies recognized in current profit and loss (excluding those closely related to the company's business and enjoyed at fixed or quantitative standards according to national uniform standards) | 5,431,662.05 | | Gains and losses from entrusted investment or asset management | 138,842.32 | | Other non-operating income and expenses apart from the above | 87,044.69 | | Less: Income tax impact | 848,632.36 | | Impact on minority interests (after tax) | 45,785.67 | | Total | 4,763,131.03 | II. Total Number of Shareholders and Shareholding of Top Ten Shareholders at Period-End The company had 10,716 common shareholders, with Zhang Xi as the largest, holding 23.10% of shares, some pledged - Total number of common shareholders at the end of the reporting period was 10,716 households[6] Shareholding of Top 10 Shareholders | Shareholder Name | Shareholder Nature | Shareholding Percentage | Number of Restricted Shares Held (shares) | Share Status | Pledged or Frozen Quantity (shares) | | :--- | :--- | :--- | :--- | :--- | :--- | | Zhang Xi | Domestic Natural Person | 23.10% | 148,355,708 | Pledged | 105,220,000 | | Dongying Aoyuan Industry and Trade Co., Ltd. | Domestic Non-State-Owned Legal Person | 6.14% | 39,458,232 | - | - | | Wang Hongjuan | Domestic Natural Person | 3.96% | 25,461,870 | - | - | | Hong Kong Securities Clearing Company Limited | Overseas Legal Person | 3.65% | 23,429,001 | - | - | | Industrial and Commercial Bank of China Co., Ltd. - Fullgoal Tianhui Selected Growth Mixed Securities Investment Fund (LOF) | Domestic Non-State-Owned Legal Person | 3.64% | 23,389,950 | - | - | | Zhuang Li | Domestic Natural Person | 3.43% | 22,026,430 | Pledged | 22,000,000 | | Shandong Guoci Functional Materials Co., Ltd. - Phase 1 Employee Stock Ownership Plan | Domestic Non-State-Owned Legal Person | 2.36% | 15,154,184 | - | - | | Zhang Bing | Domestic Natural Person | 2.20% | 14,105,388 | Pledged | 10,920,000 | | Si Liuqi | Domestic Natural Person | 1.71% | 10,959,004 | Pledged | 5,130,000 | | Xinyu Sairuixiang Investment Management Co., Ltd. | Domestic Non-State-Owned Legal Person | 1.63% | 10,500,000 | Pledged | 3,900,000 | Shareholding of Top 10 Unrestricted Shareholders | Shareholder Name | Number of Unrestricted Shares Held (shares) | Share Type | | :--- | :--- | :--- | | Dongying Aoyuan Industry and Trade Co., Ltd. | 39,458,232 | RMB Ordinary Shares | | Zhang Xi | 23,657,440 | RMB Ordinary Shares | | Hong Kong Securities Clearing Company Limited | 23,429,001 | RMB Ordinary Shares | | Industrial and Commercial Bank of China Co., Ltd. - Fullgoal Tianhui Selected Growth Mixed Securities Investment Fund (LOF) | 23,389,950 | RMB Ordinary Shares | | Xinyu Sairuixiang Investment Management Co., Ltd. | 10,500,000 | RMB Ordinary Shares | | China Merchants Bank Co., Ltd. - Fullgoal Tianhe Stable Selection Mixed Securities Investment Fund | 10,390,198 | RMB Ordinary Shares | | Huaxia Bank Co., Ltd. - Desheng Selected Stock Securities Investment Fund | 8,400,000 | RMB Ordinary Shares | | Industrial and Commercial Bank of China Co., Ltd. - E Fund ChiNext ETF | 6,370,954 | RMB Ordinary Shares | | Bank of China Co., Ltd. - Fullgoal Reform Power Mixed Securities Investment Fund | 6,000,000 | RMB Ordinary Shares | | Zha Genlou | 5,714,368 | RMB Ordinary Shares | III. Changes in Restricted Shares Total restricted shares slightly decreased, with major shareholders still holding significant amounts due to private placement and executive restrictions Changes in Restricted Shares | Shareholder Name | Restricted Shares at Beginning of Period (shares) | Shares Released from Restriction This Period (shares) | Shares Added to Restriction This Period (shares) | Restricted Shares at End of Period (shares) | Reason for Restriction | Proposed Release Date | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Zhang Xi | 124,698,268 | - | - | 124,698,268 | Private Placement Restriction, Executive Restriction | Private placement restricted shares to be released on April 1, 2019; executive restricted shares to be recalculated on January 1, 2020 | | Wang Hongjuan | 25,461,870 | - | - | 25,461,870 | New Share Issuance Restriction | June 7, 2021 | | Zhuang Li | 22,026,430 | - | - | 22,026,430 | Private Placement Restriction | April 1, 2019 | | Shandong Guoci Functional Materials Co., Ltd. - Phase 1 Employee Stock Ownership Plan | 15,154,184 | - | - | 15,154,184 | Private Placement Restriction | April 1, 2019 | | Zhang Bing | 10,579,041 | - | 349,547 | 10,928,588 | Executive Restriction | January 1, 2020 (recalculated) | | Si Wenjie | 9,670,202 | - | - | 9,670,202 | New Share Issuance Restriction | June 7, 2021 | | Si Liuqi | 8,219,253 | - | - | 8,219,253 | Executive Restriction | January 1, 2020 (recalculated) | | Song Xibin | 7,318,251 | - | 181,749 | 7,500,000 | Executive Restriction | January 1, 2020 (recalculated) | | Wang Lishan | 2,498,151 | - | - | 2,498,151 | New Share Issuance Restriction | June 7, 2021 | | Chen Xin | 2,228,466 | - | - | 2,228,466 | New Share Issuance Restriction | June 7, 2021 | | Other | 6,284,926 | 953,948 | - | 5,330,978 | Other | Executed according to relevant regulations | | Total | 234,139,042 | 953,948 | 531,296 | 233,716,390 | -- | -- | Part III Significant Matters I. Significant Changes in Key Financial Data and Indicators During the Reporting Period and Reasons Significant changes occurred in balance sheet items like prepayments and long-term borrowings, and income statement items such as revenue and expenses Changes in Balance Sheet Items | Statement Item | Period-End Amount (RMB) | Period-Beginning Amount (RMB) | Change Rate | Reason for Change | | :--- | :--- | :--- | :--- | :--- | | Prepayments | 43,554,214.96 | 25,206,940.39 | 73% | Increase in prepayments for raw materials | | Other Receivables | 11,641,094.49 | 7,730,536.80 | 51% | Increase in deposits and petty cash | | Long-Term Equity Investments | 7,615,281.32 | 4,622,874.96 | 65% | Investment in Yichang Huahao, registered capital contributed in installments | | Construction in Progress | 168,335,664.99 | 128,194,379.73 | 31% | Increased investment in fundraising projects | | Long-Term Borrowings | 71,500,000.00 | 107,200,000.00 | -33% | Repayment of bank loans | | Deferred Income | 65,243,427.70 | 43,775,953.84 | 49% | Increase in government subsidies received | Changes in Income Statement Items | Statement Item | Current Period (RMB) | Prior Period (RMB) | Change Rate | Reason for Change | | :--- | :--- | :--- | :--- | | Operating Revenue | 464,920,118.39 | 323,187,251.14 | 44% | Increase in production and sales volume of electronic materials segment and expansion of consolidation scope | | Taxes and Surcharges | 5,886,172.06 | 3,141,601.46 | 87% | Increase in sales revenue | | Selling Expenses | 21,927,410.23 | 8,507,560.00 | 158% | Aierchuang and Digital Oral included in consolidation scope, leading to a corresponding increase in selling expenses | | Administrative Expenses | 25,660,000.30 | 15,386,829.88 | 67% | Expansion of consolidation scope | | R&D Expenses | 27,975,663.95 | 16,798,622.83 | 67% | Increase in R&D investment, expansion of consolidation scope | | Financial Expenses | 7,725,194.98 | 11,591,663.96 | -33% | Repayment of bank loans, reduction in interest expenses | | Asset Impairment Losses | 7,260,290.74 | -2,368,440.72 | 407% | Increase in receivables, increase in provision for bad debts | | Other Income | 2,602,577.98 | 7,462,912.40 | -65% | Decrease in government subsidies recognized as other income | | Investment Income | 131,248.69 | 2,312,766.07 | -94% | Aierchuang included in consolidation scope in May 2018 | | Non-Operating Income | 3,089,251.48 | 430,835.79 | 617% | Increase in government subsidies | | Income Tax Expense | 17,893,214.35 | 12,209,693.58 | 47% | Increase in sales revenue, increase in taxable income | II. Business Review and Outlook Business developed well with significant revenue and profit growth, annual plans on track, and identified risks with countermeasures 2.1 Specific Factors Driving Changes in Business Revenue During the Reporting Period The company achieved strong Q1 business growth, with operating revenue up 43.85% and net profit up 59.08% - In Q1 2019, the company achieved operating revenue of RMB 464.92 million, a year-on-year increase of 43.85%[15] - Net profit attributable to shareholders of the listed company reached RMB 119.83 million, a year-on-year increase of 59.08%[15] 2.2 Significant Signed Orders and Progress No major new orders were signed, but the company holds approximately RMB 520 million in ongoing dispersed orders - The company holds approximately RMB 520 million in ongoing dispersed orders[15] 2.3 Significant Changes or Adjustments to the Company's Products or Services During the Reporting Period The company expanded its consolidation scope to include three new subsidiaries in the reporting period - Consolidation scope expanded to include Shenzhen Aierchuang Technology Co., Ltd., Liaoning Aierchuang Digital Oral Technology Co., Ltd., and Shandong Guoci Electronic Technology Development Co., Ltd.[15] 2.4 Execution of Annual Operating Plan During the Reporting Period The 2019 annual operating plan progressed as scheduled, resulting in strong Q1 operating performance - The company's 2019 annual operating plan remained largely unchanged and progressed in an orderly manner during the reporting period[15] - Q1 operating revenue grew by 43.85%, and net profit attributable to shareholders of the listed company grew by 59.08%[15] 2.5 Significant Risk Factors Adversely Affecting the Company's Future Operations, Major Difficulties, and Proposed Countermeasures The company faces risks from M&A, raw material prices, product quality, project implementation, and exchange rates, with mitigation strategies in place - Risk: M&A and goodwill impairment risk, potentially leading to goodwill impairment due to integration uncertainties and underperforming results. Countermeasures: Improve due diligence, establish risk management mechanisms, actively integrate, and enhance subsidiaries' independent operational management capabilities[15][16] - Risk: Raw material price fluctuation risk, potentially squeezing profit margins. Countermeasures: Strengthen communication with suppliers, expand business channels, control procurement costs; strive to increase product selling prices; comprehensively promote lean production to reduce costs and increase efficiency[17] - Risk: Product quality risk, potentially leading to customer loss and reputational damage. Countermeasures: Establish a quality management committee, promote advanced quality management tools, strengthen quality culture construction, and enhance quality supervision and guidance[17] - Risk: Fundraising project implementation risk, potentially leading to lower-than-expected returns due to insufficient management and marketing capabilities or market changes. Countermeasures: Strengthen internal controls, improve management systems; increase market expansion efforts to absorb capacity[17][18] - Risk: Exchange rate fluctuation risk, potentially weakening product international competitiveness. Countermeasures: Adopt various foreign exchange settlement methods to reduce exchange losses; renegotiate product prices with customers when exchange rate changes reach a certain level[18] III. Progress of Significant Matters, Their Impact, and Analysis of Solutions The company established a new subsidiary and completed its 2018 equity distribution plan, including cash dividends and bonus shares - On March 13, 2019, the company invested in and established its wholly-owned subsidiary, Shandong Guoci Electronic Technology Development Co., Ltd.[19] - The 2018 equity distribution plan was completed on April 3, 2019, involving a cash dividend of RMB 1.00 per 10 shares and a 5-share bonus issue per 10 shares[19] V. Comparison Table of Raised Funds Utilization Total raised funds of RMB 787.87 million were largely invested, with some project delays and reallocation of funds for acquisitions Utilization of Raised Funds | Committed Investment Project | Whether Project Changed | Total Committed Raised Funds Investment (RMB 10,000) | Adjusted Total Investment (RMB 10,000) | Amount Invested in Current Period (RMB 10,000) | Cumulative Investment as of Period-End (RMB 10,000) | Investment Progress as of Period-End | Cumulative Benefits Achieved as of Period-End (RMB 10,000) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | 1. Annual Production of 3,500 Tons of Nano-Composite Zirconia Materials Project | Yes | 38,393.5 | 30,508.5 | 3,995.79 | 25,788 | 84.53% | 17,429.82 | | 2. Annual Production of 5,000 Tons of High-Purity Ultrafine Alumina Materials Project | Yes | 35,393.5 | 5,280.58 | - | 5,280.58 | 100.00% | 4,421.41 | | 3. Research Center Upgrade Project | No | 5,000 | 5,000 | 545.79 | 4,328.53 | 86.57% | 0 | | 4. Payment for Acquisition of Yixing Wangzi Ceramics Co., Ltd. | No | - | 30,112.92 | - | 30,975.39 | 102.86% | 15,728.17 | | 5. Payment for Remaining Equity of Jiangsu Jinsheng 100% | No | - | 7,885 | - | 7,885 | 100.00% | 2,074.63 | | Total | -- | 78,787 | 78,787 | 4,541.58 | 74,257.5 | -- | 39,654.03 | - The construction period for the Research Center Upgrade Project was extended, and the Nano-Composite Zirconia Project is progressing gradually based on market orders[24] - Due to market changes, the remaining raised funds of RMB 309.75 million from the original 'Annual Production of 5,000 Tons of High-Purity Ultrafine Alumina Materials Project' were used to partially pay for the acquisition of 100% equity in Yixing Wangzi Ceramics Co., Ltd.[24][25] - A portion of raised funds, RMB 78.85 million, was used to pay the remaining price for the acquisition of 100% equity in Jiangsu Jinsheng[25] - The company continues to use RMB 59 million of idle raised funds to temporarily supplement working capital, for a period not exceeding 12 months[28] Part IV Financial Statements 1. Consolidated Balance Sheet As of March 31, 2019, total consolidated assets reached RMB 4.499 billion, showing a 2.76% increase from year-end 2018 Key Consolidated Balance Sheet Data (March 31, 2019 vs December 31, 2018) | Item | March 31, 2019 (RMB) | December 31, 2018 (RMB) | | :--- | :--- | :--- | | Total Assets | 4,498,909,629.83 | 4,378,182,398.86 | | Total Current Assets | 1,688,837,212.55 | 1,622,934,311.43 | | Total Non-Current Assets | 2,810,072,417.28 | 2,755,248,087.43 | | Total Liabilities | 890,213,440.26 | 894,535,264.22 | | Total Owners' Equity | 3,608,696,189.57 | 3,483,647,134.64 | | Total Owners' Equity Attributable to Parent Company | 3,335,751,634.03 | 3,215,925,330.46 | 2. Parent Company Balance Sheet As of March 31, 2019, parent company total assets were RMB 3.867 billion, a 1.86% increase from year-end 2018 Key Parent Company Balance Sheet Data (March 31, 2019 vs December 31, 2018) | Item | March 31, 2019 (RMB) | December 31, 2018 (RMB) | | :--- | :--- | :--- | | Total Assets | 3,866,646,246.01 | 3,796,019,724.03 | | Total Current Assets | 737,765,377.50 | 659,881,045.92 | | Total Non-Current Assets | 3,128,880,868.51 | 3,136,138,678.11 | | Total Liabilities | 825,548,740.55 | 885,912,727.56 | | Total Owners' Equity | 3,041,097,505.46 | 2,910,106,996.47 | 3. Consolidated Income Statement In Q1 2019, the company's consolidated total operating revenue was RMB 465 million, a 43.85% year-on-year increase, with net profit attributable to parent owners up 59.08% Key Consolidated Income Statement Data (Q1 2019 vs Q1 2018) | Item | Amount for Current Period (RMB) | Amount for Prior Period (RMB) | | :--- | :--- | :--- | | Total Operating Revenue | 464,920,118.39 | 323,187,251.14 | | Operating Profit | 140,026,140.52 | 90,480,827.65 | | Total Profit | 142,942,269.28 | 90,860,350.03 | | Net Profit | 125,049,054.93 | 78,650,656.45 | | Net Profit Attributable to Parent Company Owners | 119,826,303.57 | 75,325,559.14 | | Basic Earnings Per Share | 0.19 | 0.13 | | Diluted Earnings Per Share | 0.19 | 0.13 | 4. Parent Company Income Statement In Q1 2019, the parent company's operating revenue was RMB 227 million, a 35.53% year-on-year increase, with net profit up 131.57% Key Parent Company Income Statement Data (Q1 2019 vs Q1 2018) | Item | Amount for Current Period (RMB) | Amount for Prior Period (RMB) | | :--- | :--- | :--- | | Operating Revenue | 226,964,821.43 | 167,458,318.68 | | Operating Profit | 138,107,691.78 | 64,183,762.55 | | Total Profit | 140,846,620.52 | 64,275,753.35 | | Net Profit | 130,990,508.99 | 56,569,845.29 | | Basic Earnings Per Share | 0.20 | 0.09 | | Diluted Earnings Per Share | 0.20 | 0.09 | 5. Consolidated Cash Flow Statement In Q1 2019, the company's net cash flow from operating activities was RMB 71.78 million, with significant outflows from investing and financing activities Key Consolidated Cash Flow Statement Data (Q1 2019 vs Q1 2018) | Item | Amount for Current Period (RMB) | Amount for Prior Period (RMB) | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 71,780,036.03 | 70,874,846.60 | | Net Cash Flow from Investing Activities | -81,686,366.53 | -85,445,977.55 | | Net Cash Flow from Financing Activities | -18,043,897.62 | -94,368,824.63 | | Effect of Exchange Rate Changes on Cash and Cash Equivalents | -418,746.77 | -416,235.49 | | Net Increase in Cash and Cash Equivalents | -28,368,974.89 | -109,356,191.07 | | Cash and Cash Equivalents at Period-End | 206,441,420.15 | 331,005,998.55 | 6. Parent Company Cash Flow Statement In Q1 2019, the parent company's net cash flow from operating activities was RMB 90.35 million, with outflows from investing and financing Key Parent Company Cash Flow Statement Data (Q1 2019 vs Q1 2018) | Item | Amount for Current Period (RMB) | Amount for Prior Period (RMB) | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 90,346,833.51 | 53,153,722.69 | | Net Cash Flow from Investing Activities | -25,760,450.48 | -94,661,133.46 | | Net Cash Flow from Financing Activities | -68,347,785.38 | -79,670,898.97 | | Effect of Exchange Rate Changes on Cash and Cash Equivalents | -295,238.42 | -443,527.28 | | Net Increase in Cash and Cash Equivalents | -4,056,640.77 | -121,621,837.02 | | Cash and Cash Equivalents at Period-End | 123,874,877.50 | 272,743,762.90 | II. Explanation of Financial Statement Adjustments The company made no adjustments to its financial statements or comparative data due to the initial adoption of new accounting standards - The company did not adjust its opening financial statements in the reporting period due to the initial adoption of new financial instrument standards, new revenue standards, or new lease standards[51] - The company did not retrospectively adjust prior period comparative data in the reporting period due to the initial adoption of new financial instrument standards or new lease standards[51] III. Audit Report The company's first quarterly report for 2019 is unaudited - The company's first quarterly report is unaudited[51]