LECRON(SZ:300343)2020-06-01 16:00Financial Performance - The internet advertising business has significantly declined, leading to a substantial drop in revenue and profit, which is expected to impact overall company performance [7]. - The company reported a decrease in operating income compared to previous years, indicating potential risks in receivables recovery and increased bad debt risk [7]. - The company has not provided specific future performance guidance or outlook in the report [7]. - The company's operating revenue for 2019 was ¥3,513,747,937.12, a decrease of 2.38% compared to ¥3,599,465,997.37 in 2018 [24]. - The net profit attributable to shareholders for 2019 was -¥1,473,977,838.09, an improvement of 24.56% from -¥1,953,787,104.88 in 2018 [24]. - In Q4 2019, the company reported a net profit of -¥1,602,308,394.27, following a profit of ¥38,250,444.08 in Q3 2019 [25]. - The total assets at the end of 2019 were ¥3,286,654,453.34, down 18.88% from ¥4,051,649,624.16 at the end of 2018 [24]. - The net assets attributable to shareholders decreased by 62.84% to ¥852,852,057.49 at the end of 2019, compared to ¥2,295,193,949.10 at the end of 2018 [24]. - The basic and diluted earnings per share for 2019 were both -¥1.270, showing a 30.98% improvement from -¥3.31 in 2018 [24]. - The weighted average return on equity was -94.25% in 2019, a decline from -58.86% in 2018 [24]. - The company reported a net profit of CNY -147.57 million for 2019, a 22.23% improvement compared to CNY -189.76 million in 2018 [47]. - The company achieved a revenue of 3.514 billion yuan in 2019, a decrease of 2.38% compared to 2018 [63]. - The net cash flow from operating activities increased significantly by 352.88% to ¥113,309,083.24 in 2019, compared to -¥44,807,260.73 in 2018 [24]. - The company received government subsidies amounting to ¥16,194,532.49 in 2019, compared to ¥22,226,800.57 in 2018 [31]. Strategic Focus and Business Operations - The company continues to focus on its core business areas while exploring new strategies for market expansion and product development [7]. - The company plans not to distribute cash dividends, issue bonus shares, or increase share capital from reserves [8]. - The company has engaged Xinyong Zhonghe Accounting Firm for the audit of its 2019 financial statements, which issued a qualified opinion report [6]. - The company has appointed Dongwu Securities Co., Ltd. as its financial advisor for the period until December 31, 2019 [23]. - The company plans to focus on new materials and fine chemicals, particularly polyurethane new materials and biodegradable plastics, while withdrawing from capital-intensive internet marketing businesses [133]. - The company aims to enhance its product competitiveness by establishing a fourth-generation foaming agent project and a hydrofluoric acid project to fill raw material gaps in fluorine-containing new materials [140]. - The company is committed to enhancing its profitability and risk resistance through strategic investments and project implementations [134]. - The company is focused on expanding its product range and enhancing competitiveness through innovative research and development initiatives [95]. Research and Development - Research and development investment for 2019 amounted to ¥55,758,953.37, representing 1.47% of operating revenue, an increase from 0.77% in 2018 [113]. - The company is developing a new foam system that aims to reduce foam density and improve insulation performance, potentially increasing sales revenue by approximately ¥20 million [86]. - The company has developed low VOC polyurethane sealants, filling a domestic gap and enhancing competitiveness against multinational corporations [89]. - The company has completed various stages of product development, including market research, feasibility studies, and laboratory formulation, from March 2018 to May 2019 [89]. - The company is conducting extensive feasibility studies and market research to support the development of new products and technologies [95]. - The company has established a new materials R&D center in Shanghai and plans to enhance collaboration with renowned institutions to develop new technologies and products [147]. Market and Customer Insights - The internet segment contributed 64.18% of total revenue, while the chemical segment accounted for 35.82% [63]. - The company has developed a strong customer base in the fluorinated refrigerants business, maintaining long-term partnerships with major air conditioning manufacturers [59]. - The company maintained a customer retention rate of 47% in 2019, with a total of 245 customers [66]. - Domestic revenue accounted for 93.69% of total revenue, while international revenue was CNY 221,884,414.95, representing 6.31% [72]. Related Party Transactions and Governance - The company has committed to minimizing related party transactions and will adhere to fair market principles when unavoidable transactions occur, ensuring compliance with legal disclosure obligations [174]. - The company has pledged to maintain a clear separation in labor and personnel management systems from its controlling shareholders [171]. - The company will follow legal procedures for any unavoidable related party transactions, ensuring that they do not harm the interests of other shareholders [176]. - The company has established measures to avoid competition, ensuring that major shareholders do not engage in similar business activities through other entities [195]. - The company emphasizes that any related party transactions will be conducted at fair market prices to protect the rights of all shareholders [173]. Investment and Acquisitions - The company acquired 96.21% of Shandong Huazhong New Materials Co., Ltd. for a total consideration of CNY 665.76 million [42]. - The company acquired a 99.21% stake in Shandong Huaan New Materials Co., Ltd. for ¥663,759,500, with an expected return of ¥9,978,075.27 [122]. - The company is currently developing a new product line of trichloroethylene with a purity of ≥99.9%, which is in the pilot test stage [110]. - The company plans to establish a production capacity of 3,000 tons/year for PVDF (polyvinylidene fluoride) targeting the automotive and new energy battery sectors this year [145]. Environmental and Social Responsibility - The company aims to reduce energy consumption and hazardous waste generation through improved production processes, contributing to the healthy development of the polyurethane industry [104]. - The new products not only meet customer needs but also reduce volatile organic compound emissions, enhancing environmental protection [92]. - The project is expected to create local employment opportunities and contribute to increased tax revenue for the government [92].