KELONG FINE CHEMICAL(SZ:300405)2022-04-22 16:00Supply Chain and Raw Materials - The company reported a significant reliance on major suppliers for raw materials, particularly ethylene oxide, which is sensitive to price fluctuations linked to crude oil and ethylene prices[5]. - The company plans to enhance strategic cooperation with domestic ethylene oxide suppliers to ensure timely supply and reduce costs, mitigating the impact of raw material price volatility[5]. - The company faces significant risks related to the supply and price volatility of key raw materials, particularly ethylene oxide, which is sensitive to fluctuations in crude oil and ethylene prices[117]. - The company has strengthened strategic cooperation with major domestic ethylene oxide suppliers to ensure timely supply and reduce costs, mitigating the impact of raw material price fluctuations[117]. Financial Performance - The company reported a revenue of RMB 1.2 billion for the fiscal year 2021, representing a year-over-year growth of 15%[23]. - The company's operating revenue for 2021 was ¥1,088,769,165.02, representing a 17.22% increase compared to ¥928,804,730.28 in 2020[31]. - The net profit attributable to shareholders in 2021 was ¥11,924,424.26, a significant turnaround from a loss of ¥60,737,320.22 in 2020, marking a 119.63% improvement[31]. - The company achieved total operating revenue of ¥1,089,409,600.63, an increase of 17.23% compared to the previous year[67]. - The company reported a significant increase in revenue, achieving a total of 1.5 billion RMB for the year, representing a growth of 20% compared to the previous year[190]. Market Expansion and Strategy - The company aims to expand its international market presence while maintaining stable relationships with existing domestic clients, focusing on new product promotion in powder superplasticizers and environmental catalyst fields[7]. - The company plans to expand its market presence by entering the Southeast Asian region, targeting a 20% increase in market share by 2025[23]. - The company is actively expanding its international market presence and promoting new products such as powder superplasticizers and denitration catalysts in the environmental sector[117]. - The company plans to expand its market presence in Southeast Asia, targeting a 10% market share within the next two years[190]. Research and Development - The company is investing RMB 50 million in R&D for new chemical products, focusing on sustainable and eco-friendly solutions[23]. - The company has established a strategic alliance with research institutions, enhancing its R&D capabilities in epoxy ethane derivatives and construction additives[62]. - The company is committed to enhancing its research and development capabilities to drive innovation in its product lines[140]. - Investment in new product development increased by 30%, focusing on innovative chemical solutions to enhance market competitiveness[191]. Environmental and Safety Compliance - The company is committed to increasing investments in safety and environmental protection to address risks associated with the handling of hazardous materials and compliance with new regulations[13]. - The company is exposed to safety and environmental risks due to the hazardous nature of its primary raw materials and production processes, necessitating increased investment in safety and environmental protection[119]. - The company has received multiple environmental impact assessments and approvals for projects, including a 50,000-ton thermoplastic polyester elastomer project and a 100,000-ton high-performance concrete polycarboxylic acid water reducer project[175]. - The company has implemented a real-time monitoring system for domestic wastewater discharge to ensure compliance[174]. Corporate Governance - The company has established a fifth board of directors consisting of nine members, including three independent directors, to enhance governance and decision-making processes[124]. - The company maintains independence from its controlling shareholders in terms of assets, personnel, finance, and operations, with no instances of fund occupation or competition[129]. - The company has a transparent performance evaluation and incentive mechanism for directors and senior management, ensuring compliance with legal standards[126]. - The independent directors ensured that their duties were performed without influence from major shareholders or related parties[153]. Strategic Partnerships and Acquisitions - A strategic partnership has been established with a leading solar energy firm to develop photovoltaic materials, expected to contribute an additional RMB 200 million in revenue by 2024[24]. - The company has initiated a merger with a local competitor, which is anticipated to enhance its market position and operational capabilities[24]. - The company plans to acquire equity in Sichuan Hengze Building Materials Co., Ltd. through a combination of issuing shares and cash payments[185]. - The company is planning strategic acquisitions to bolster its competitive position in the market[134]. Operational Efficiency and Cost Management - The company aims to achieve a reduction in production costs by 10% through the implementation of advanced manufacturing technologies in 2022[23]. - The company is implementing cost management strategies to maximize project efficiency and has completed the relocation of its old factory to improve production capacity and safety[72]. - The company aims to reduce operational costs by 15% through improved efficiency measures and technology upgrades[190]. Employee and Management Structure - The total number of employees at the end of the reporting period was 698, with 434 in the parent company and 264 in major subsidiaries[157]. - The company hired 12 professionals in 2021 to enhance its management and technical capabilities, including one doctoral candidate focused on fine chemical research[73]. - The company has a training plan for 2022 focusing on enhancing the skills of middle and senior management, as well as production staff[160]. - The company’s management team consists of experienced professionals with backgrounds in chemical engineering and business management, ensuring effective leadership[139]. Shareholder and Financial Management - The company has proposed a profit distribution plan, distributing a cash dividend of 0.30 yuan per 10 shares and a capital reserve increase of 3 shares per 10 shares[13]. - The company reported a cash dividend of RMB 0.30 per 10 shares (including tax), totaling RMB 6,674,074.68[161]. - The company plans to increase its total share capital to 289,209,903 shares by issuing 3 additional shares for every 10 shares held[162]. - The company has established a remuneration decision-making process based on operational performance and budget execution[145]. Risk Management - The company acknowledges risks related to intensified market competition in the polycarboxylate superplasticizer sector, which may affect profitability and accounts receivable[7]. - The company faces management risks associated with its strategic transformation and the complexity of its expanding organizational structure[8]. - The company has undergone a strategic transformation to adapt to market changes, which has increased management complexity and requires ongoing adjustments to meet capital market demands[118]. Product Development and Innovation - The company is focusing on the development of new concrete additives to meet the increasing demand driven by infrastructure expansion in China[41]. - The company is actively involved in the development of denitration catalysts for various industries, including coal-fired power plants and cement production, indicating diversification in its product offerings[54]. - The company has developed a comprehensive application technology system for polycarboxylic acid superplasticizers, supported by extensive application data across multiple regions[63].