*ST天山(300313) - 2019 Q2 - 季度财报

Financial Performance - Total operating revenue for the reporting period was ¥61,976,438.24, a decrease of 34.26% compared to ¥207,982,884.10 in the same period last year [24]. - Net profit attributable to shareholders was -¥18,613,088.81, representing a 99.00% decline from ¥13,630,970.92 in the previous year [24]. - Net cash flow from operating activities was -¥28,856,176.70, a decrease of 129.73% compared to -¥9,693,084.84 in the same period last year [24]. - Basic and diluted earnings per share were both -¥0.0595, a decline of 99.25% from ¥0.0578 in the previous year [24]. - Total assets at the end of the reporting period were ¥1,330,820,354.68, a decrease of 5.15% from ¥3,539,331,942.54 at the end of the previous year [24]. - Net assets attributable to shareholders were ¥190,109,879.89, down 9.04% from ¥2,169,808,216.95 at the end of the previous year [24]. - The company reported a non-operating income of ¥318,394.63, primarily from government subsidies and asset disposals [29]. - The company reported a net profit attributable to shareholders of -18.61 million yuan, reflecting a 99.00% year-on-year increase in losses [60]. - The total assets of the company as of June 30, 2019, were 1.33 billion yuan, a decrease of 5.15% year-on-year [60]. - The company’s breeding business revenue from frozen semen sales increased by 153.77% compared to the same period last year [60]. - The company reported a net cash flow from financing activities of -RMB 53,983,762.59, a decrease of 422.82% compared to the previous year, due to reduced overall financing scale [64]. - The company reported a net profit of -3,100.00 to -2,600.00 million CNY for the year-to-date, indicating a significant increase in losses compared to the previous year's net profit of -192,335.35 million CNY, reflecting a change of approximately 98.39% to 98.65% [100]. Legal and Regulatory Issues - The company is currently under investigation by the China Securities Regulatory Commission for suspected information disclosure violations, which may affect its operations [10]. - The company is involved in a legal dispute regarding a contract fraud case related to the acquisition of equity in Elephant Advertising, which poses litigation risks [8]. - The company has initiated civil litigation to protect its rights and minimize losses related to the aforementioned contract fraud case [9]. - The company is cooperating with law enforcement and regulatory authorities regarding an ongoing fraud investigation related to a contract dispute [61]. - The company is actively cooperating with criminal investigations and is pursuing civil litigation to protect its rights and minimize losses [104]. - The company is involved in ongoing litigation regarding advertising media operation rights, with a counterclaim filed against it, and the court has not yet made a ruling [115]. - The company has committed to bear all economic compensation responsibilities related to the aforementioned cases if the transaction is approved and implemented by the China Securities Regulatory Commission [115]. - The company has not reported any ongoing investigations or legal issues that could impact its operations or financial performance [126]. Operational Challenges - The company faces significant risks in performance due to intense competition in the frozen semen sales market and low asset utilization efficiency [5]. - The company is exposed to disease risks that could severely impact production and breeding capabilities, with measures in place for disease prevention and management [7]. - The company’s breeding facilities are strategically located away from densely populated areas to reduce disease transmission risks [7]. - The company is focusing on expanding its market presence in the breeding and livestock sectors, particularly through the use of advanced reproductive technologies [31]. - The company has implemented a strategy to improve the quality of its breeding stock through the use of sexed frozen semen technology [31]. - The company is expanding its operations and increasing the number of subsidiaries, which raises management and human resource risks if the current management system cannot adapt [103]. - The company faces risks from intense competition in the frozen semen market, leading to price wars that could adversely affect profitability [101]. Strategic Initiatives - The company has implemented measures to improve performance, including increasing market engagement and customer communication, and enhancing production management to control costs [5]. - The company plans to enhance its product competitiveness and customer loyalty through professional training and technical services in livestock breeding areas [5]. - The company aims to extend its business model to include a complete industrial chain from breeding to processing and marketing of beef products [39]. - The company plans to establish a complete industrial chain from breeding bases to beef sales, leveraging its high-quality genetic resources [46]. - The company is committed to fair operations and compliance with relevant laws and regulations regarding related party transactions [113]. - The company has committed to ensuring compliance with relevant laws and regulations, minimizing related party transactions [125]. - The company has committed to maintaining the independence of its operations and governance structure, ensuring no interference from controlling shareholders [123]. Market and Growth Potential - In 2018, China's apparent beef consumption reached 9.32 million tons, with a compound annual growth rate of 4.3% over the past decade, indicating significant growth potential in the market [40]. - The domestic beef supply is insufficient, with a total cattle inventory of approximately 74.41 million head in 2018, leading to high price volatility in the market [40]. - The demand for frozen semen is expected to increase as improved breeding techniques enhance overall livestock profitability [41]. - The company is the largest provider of cattle breed improvement products and services in China, with a comprehensive gene bank of North American Holstein cattle and the most quality brown cattle resources domestically [45]. - The company plans to expand its market presence in Southeast Asia, targeting a 10% market share within the next two years [118]. - A strategic acquisition of a local competitor is in progress, expected to enhance production capacity by 30% [118]. Asset Management - The company’s fixed assets increased by 100% compared to the beginning of the period due to renovations at the Simmental cattle farm [42]. - The company’s cash and cash equivalents decreased by 52.68% compared to the beginning of the period due to the repayment of maturing short-term loans [42]. - The company’s prepaid accounts increased by 1239.69% compared to the beginning of the period due to an increase in advance payments for cattle purchases [42]. - The company’s inventory grew by 60.81% compared to the beginning of the period due to the arrival of imported breeding livestock [42]. - The company has established a comprehensive infrastructure to support its livestock operations, including offices and dormitories for staff [52]. - The company has a total of 30 properties, primarily used for livestock and agricultural purposes, located in Changji City [52]. Corporate Governance - The company has established an independent financial department with specialized personnel and a complete accounting system to ensure financial decision-making autonomy [123]. - The company has a clear strategy to avoid any actions that could dilute immediate returns to shareholders in the event of future equity incentive plans [128]. - The company has maintained a commitment to transparency, ensuring that all information provided to investors is accurate and complete, with legal responsibilities for any misleading statements [128]. - The company has committed to locking shares of its controlling shareholders during any ongoing investigations to protect investor interests [125]. - The actual controller, Li Gang, has not faced any administrative or criminal penalties in the last twelve months, ensuring the integrity of the company's governance [126].