COTRAN(SZ:300731)2022-04-08 16:00Financial Performance - The company's operating revenue for 2021 was CNY 568,414,718.40, representing an increase of 85.15% compared to CNY 306,998,366.86 in 2020[25]. - The net profit attributable to shareholders for 2021 was a loss of CNY 12,747,816.68, a decrease of 147.86% from a profit of CNY 26,634,653.33 in 2020[25]. - The net profit after deducting non-recurring gains and losses was a loss of CNY 18,076,021.39 in 2021, compared to a profit of CNY 16,873,274.48 in 2020, marking a decline of 207.13%[25]. - The company's cash flow from operating activities was negative CNY 1,209,947.46 in 2021, a decrease of 102.34% from CNY 51,609,525.33 in 2020[26]. - The total assets at the end of 2021 were CNY 962,680,374.08, a decrease of 1.69% from CNY 979,274,694.87 at the end of 2020[26]. - The net assets attributable to shareholders decreased by 3.46% to CNY 581,963,996.86 at the end of 2021 from CNY 602,811,369.02 at the end of 2020[26]. - The basic earnings per share for 2021 was -CNY 0.10, compared to CNY 0.22 in 2020, reflecting a decline of 145.45%[26]. - The weighted average return on equity was -2.16% in 2021, down from 4.70% in 2020, indicating a significant decrease[26]. - The company reported quarterly revenues of CNY 143,320,982.24, CNY 157,314,366.62, CNY 151,699,808.44, and CNY 116,079,561.10 for Q1 to Q4 respectively in 2021[28]. - The company experienced a significant loss in Q4 2021, with a net profit attributable to shareholders of -CNY 36,322,733.73, compared to profits in the earlier quarters[28]. Market and Industry Trends - The company expanded its business into thermal management systems, including liquid cooling plates for new energy vehicles and energy storage systems, in response to the national "carbon peak and carbon neutrality" goals[38]. - The company’s main revenue source is high-performance special rubber sealing materials, which are in high demand across various sectors including telecommunications and automotive[33]. - By the end of 2021, China had built and put into operation 1.425 million 5G base stations, with over 650,000 new stations constructed in the previous year[37]. - The total electricity consumption in China for 2021 was 8.31 trillion kWh, reflecting a year-on-year growth of 10.3%[37]. - The company is positioned to benefit from the rapid growth of the high-end rubber sealing materials market, driven by domestic firms gradually replacing imports[35]. - The market for high-performance rubber products is expected to grow significantly, driven by technological advancements and increasing application areas[35]. - The global automotive battery thermal management system market reached RMB 4.1 billion in 2020 and is expected to grow to RMB 19.7 billion by 2026, with a compound annual growth rate (CAGR) of 25.2%[39]. Cost and Procurement Challenges - The company experienced a decline in gross margin due to rising raw material costs, leading to increased procurement expenses[5]. - The company's overall product gross margin decreased compared to the previous year due to significant increases in raw material prices, including rubber, copper, and aluminum[42]. - The procurement of metal materials accounts for 53.78% of total procurement, with average prices increasing from 11.13 yuan/kg in the first half to 13.36 yuan/kg in the second half, reflecting a significant price rise due to domestic policies and international conditions[49]. - Rubber materials saw an average price increase of 11.03% year-on-year, with the average price rising from 17.93 yuan/kg to 19.38 yuan/kg[49]. - The average price of electrolytic aluminum and copper increased by 33.41% and 40.52% respectively in 2021 compared to 2020, impacting overall material costs significantly[49]. Research and Development - The company aims to enhance its R&D capabilities to improve product quality and performance, addressing the gap with international standards[34]. - The company has applied for 21 patents related to waterproof and dustproof protection products, indicating strong R&D capabilities and a focus on innovation[50]. - The number of R&D personnel increased by 50.00% from 88 in 2020 to 132 in 2021[85]. - R&D expenditure amounted to ¥41,467,433.12 in 2021, representing 7.30% of total revenue, a slight decrease from 7.71% in 2020[86]. - The company is developing a high-performance waterproof sealing product for 5G base stations, with expected market demand driving future revenue growth[83]. - A long-life sealing strip for rail transit vehicles is under development, aiming for a lifespan exceeding 10 years, which is anticipated to enhance revenue[83]. - The company plans to develop a fireproof and waterproof sealing product for electrical equipment, targeting performance comparable to imported products[83]. - A high thermal conductivity gel is being developed to meet the increasing cooling demands of electronic components, with potential applications in new energy vehicles[84]. - The company is working on a direct cooling heat dissipation system for new energy power systems, aiming to optimize thermal management solutions[84]. Strategic Initiatives and Future Outlook - The company plans to negotiate with major clients to adjust sales prices in response to rising raw material costs while enhancing cost control measures[5]. - Future plans and forecasts are subject to uncertainties related to policy environment and market conditions[8]. - The company aims to enhance its profitability in 2022 through extensive groundwork in technology and product development, capacity building, and new customer acquisition[60]. - The company plans to expand its market presence in the new energy sector through both organic growth and strategic acquisitions[40]. - The company has implemented a dual-driven growth model focusing on both organic growth and external expansion to capture new opportunities in the new energy and semiconductor materials sectors[58]. - The company is focused on expanding its market presence and enhancing its product offerings through ongoing research and development initiatives[175]. Governance and Management - The company has established a governance structure compliant with relevant laws and regulations, ensuring effective decision-making processes[135]. - The board of directors consists of 7 members, including 3 independent directors, ensuring compliance with legal requirements and fair representation of minority shareholders[137]. - The supervisory board includes 3 members, with oversight responsibilities to protect the interests of the company and its shareholders[138]. - The company has implemented a performance evaluation and incentive mechanism to foster a fair and efficient work environment for its management team[139]. - The company strictly adheres to legal regulations and disclosure management systems, ensuring timely and accurate information dissemination to all shareholders[140]. - The company maintains independence from its controlling shareholders in terms of assets, personnel, finance, and operations, with no shared bank accounts or financial resources[142]. - The company has established an independent financial accounting department and a complete accounting system, ensuring independent financial decision-making[143]. Employee and Compensation Practices - The total remuneration paid to directors, supervisors, and senior management during the reporting period was CNY 6,175,732.55, covering 18 individuals including those who have left the company[163]. - The independent directors received an annual remuneration of CNY 80,000 (including tax) for 2021[163]. - The remuneration for non-independent directors, supervisors, and senior management is based on a combination of base salary, annual performance bonuses, and various allowances[163]. - The company follows a performance management system to determine the annual performance bonus based on set performance indicators[163]. - The company has a total of 18 directors, supervisors, and senior management personnel, including those who have left the company, during the reporting period[163]. - The company emphasizes fair compensation management and has developed a salary system based on competitive strategies and performance orientation[184]. Investment and Acquisitions - The company acquired subsidiaries Ruitek and Deriyuan to provide thermal management system products, which are widely used in consumer electronics, traditional appliances, and new energy vehicles[42]. - The company has established partnerships with major clients such as Huawei, ZTE, and Ericsson in the telecommunications sector[55]. - The company approved the acquisition of a stake in Anhui Microelectronics Longjiang Semiconductor Materials Co., Ltd. during the board meeting on March 23, 2021[166]. - The company is involved in acquiring part of the equity of Anhui Microelectronics and Jiangnan Semiconductor Materials Co., Ltd.[177]. - The company has completed the acquisition of a stake in Wuxi Kuncheng, with the project funded by reallocating resources from the high-performance special rubber sealing material project[109]. Risk Management - The company recognizes risks from macroeconomic factors, including the ongoing global pandemic, and will adjust market strategies accordingly[129]. - The company faces competition and market demand fluctuations in the telecommunications and new energy sectors, necessitating continuous product development and innovation[129]. - The company anticipates significant capital expenditures for production line construction and R&D, which may pose risks due to uncertainties in new product development[130]. - The company will monitor raw material price fluctuations to mitigate impacts on production costs and maintain gross margins[130]. - The company faces operational and human resource risks due to the expansion of its business scale, requiring enhanced management capabilities and talent development strategies[131].