Lier Chemical (SZ:002258)2024-03-22 16:00Financial Performance - In 2023, the company's operating revenue was approximately CNY 8.85 billion, with a net profit attributable to shareholders of CNY 1.11 billion, representing a decrease of 15% year-on-year [15]. - The total revenue for 2023 was approximately CNY 7.85 billion, a decrease of 22.55% compared to CNY 10.14 billion in 2022 [108]. - The pesticide segment generated CNY 7.10 billion, accounting for 90.41% of total revenue, down 23.00% from CNY 9.22 billion in 2022 [108]. - The company's gross profit for the pesticide segment was CNY 5.48 billion, representing 91.12% of total costs, a decrease of 11.59% from CNY 6.20 billion in 2022 [109]. - International sales contributed CNY 3.96 billion, making up 50.42% of total revenue, a decline of 35.73% from CNY 6.16 billion in 2022 [108]. - The company's cash flow from operating activities decreased by 24.82% to ¥7,118,647,765.84 in 2023, while net cash flow from operating activities dropped by 63.85% to ¥938,573,493.36 [131]. - The company reported a significant decrease in international sales by 35.73%, while domestic sales decreased by 2.14% [120]. - The company's total revenue from major subsidiaries in the pesticide production and sales sector was approximately ¥4,103,430,288.30 for Guang'an Lier and ¥1,275,561,929.91 for Jiashu Keda [145]. Market Conditions - The global demand for pesticides has decreased significantly due to high inventory levels and oversupply, impacting the market prices of agricultural products [19]. - The company has faced risks related to market competition, raw material supply fluctuations, and environmental regulations [23]. - The company is facing significant competitive pressure due to the expansion of domestic competitors, which may impact sales and profitability [174]. - Future growth in the global pesticide market is expected due to rising food demand and the rapid development of genetically modified crops [194]. Research and Development - The company plans to continue its research and development in new herbicides and expand its market presence in international markets [21]. - The company is committed to enhancing its research and development capabilities to address existing challenges such as intense competition and insufficient technical strength [45]. - Research and development investment amounted to CNY 340,795,478.34, which is 4.34% of operating revenue, an increase of 0.23% from the previous year [114]. - The number of R&D personnel increased to 514, representing 7.99% of the total workforce, up from 7.14% in the previous year [114]. - The company has established a strong R&D capability with advanced facilities and a team of experienced technical personnel, enhancing its core competitiveness [98]. - The company is focusing on new product development, with several projects aimed at increasing market competitiveness and creating new profit growth points [114]. - The company will continue to optimize its R&D processes to improve efficiency and reduce costs in the production of existing products [198]. Production and Capacity - The company has a production capacity of 60,200 tons for active ingredients with a utilization rate of 93.49% and 59,600 tons for formulations with a utilization rate of 99.70% [62]. - The company has a total of 82,000 tons capacity for chemical products (including intermediates) with a utilization rate of 43.27% [62]. - The company completed the construction of a 20,000 tons/year enzyme-based glyphosate project, which has commenced production [104]. - The company has seven production bases across China, ensuring a comprehensive supply chain for its main products, making it the largest producer of chlorinated pyridine pesticides in the country [80]. Strategic Partnerships - The company is the largest domestic producer of chloropyridine herbicides and has established stable strategic partnerships with top international agrochemical companies, exporting to over 30 countries [21]. - The company has established long-term strategic partnerships with multinational companies to promote the development of the refined glyphosate business globally, indicating significant future market opportunities [44]. - The company has established long-term strategic partnerships with major global agrochemical companies, including Corteva, BASF, Syngenta, and Sumitomo Chemical, ensuring a stable supply and good reputation among clients [80]. Environmental and Safety Measures - The company emphasizes environmental protection, achieving ISO14001 certification and implementing systematic management practices to enhance its environmental performance [81]. - The company is committed to enhancing environmental protection measures, which will increase investments in waste management and carbon emission control [176]. - The company has established a comprehensive safety management system to mitigate risks associated with production processes [177]. - The company has implemented a strict safety production responsibility system to mitigate risks and enhance operational safety [105]. Supply Chain and Procurement - The company emphasizes optimizing its supply chain management to reduce procurement costs and enhance supply chain resilience and security [45]. - The company operates under a centralized procurement model for bulk materials, ensuring stable material supply for production operations [45]. - The company has a comprehensive procurement system and processes to manage material procurement effectively [58]. - The average procurement price of major raw materials decreased significantly compared to the previous reporting period, with A raw material averaging 40,511.15 in the first half and 26,790.10 in the second half, a drop of approximately 33.8% [66]. - The company is actively optimizing procurement methods in response to upstream raw material market competition and overall economic challenges [66]. - The direct materials cost as a percentage of total costs decreased significantly from 69.06% in 2022 to 51.45% in 2023 [125]. - The company plans to optimize procurement channels and strengthen cost control to mitigate the impact of raw material price volatility [174]. Future Outlook - The company plans to complete the 10,000 tons/year precision glyphosate project at Jingzhou Sancaitang and implement the southern district project in 2024 [171]. - The company aims to strengthen marketing efforts, enhance cooperation with major clients, and expand market share [173]. - The company is actively expanding its product offerings and market presence, with significant growth potential in South America [94]. - The company aims to strengthen its international market presence while developing a diverse range of product formulations for the domestic market [194]. - In 2024, the company plans to secure funding through various channels, including bank loans, to support its ongoing development [199].