LECRON(SZ:300343)2024-04-23 10:05Financial Performance - In 2023, the company's main revenue source, the fluorochemical industry, experienced a continuous price decline, leading to a significant drop in revenue and profit, consistent with overall industry performance [4]. - The lithium battery new materials, a key profit source, saw a substantial price drop, resulting in a noticeable decrease in gross margin, which offset the positive impact of increased sales volume [4]. - The company did not distribute cash dividends, issue bonus shares, or increase share capital from reserves in 2023 [6]. - The company’s revenue and profit decline was substantial, reflecting broader market trends in the fluorochemical and new energy vehicle industries [4]. - The company’s operating revenue for 2023 was ¥1,035,615,955.71, a decrease of 49.79% compared to ¥2,062,662,539.69 in 2022 [22]. - The net profit attributable to shareholders for 2023 was ¥12,715,177.07, representing a significant decline of 98.04% from ¥287,729,234.7 in 2022 [22]. - The net cash flow from operating activities decreased by 66.31% to ¥230,286,730.65 in 2023, down from ¥683,501,537.3 in 2022 [22]. - The basic earnings per share for 2023 was ¥0.0112, a drop of 98.02% compared to ¥0.68 in 2022 [22]. - The total non-operating income for the company in 2023 was CNY 37,090,555.70, a significant increase from CNY 5,714,557.26 in 2022, indicating improved financial health [32]. - The company reported a significant increase in the cost of sales for the fluorine-containing new materials segment, which rose by 46.10% year-on-year, while the cost for the polyurethane segment decreased by 33.31% [87]. Operational Challenges - The overall performance decline is attributed to the simultaneous release of new production capacity in the fluorochemical sector and inventory destocking across the lithium battery supply chain [4]. - The company has faced uncertainties regarding its ability to continue as a going concern, as indicated by the negative net profit figures over the recent accounting periods [26]. - The company has made adjustments to its financial statements due to accounting policy changes and corrections of prior period errors related to fraudulent activities in a subsidiary [25]. - The company has faced risks from policy changes, macroeconomic fluctuations, market demand shifts, and raw material price volatility, which could impact project construction and operations [145]. - Environmental risks are present due to potential pollution from production processes, necessitating the establishment of wastewater treatment and emission control facilities [146]. - Safety risks are associated with the company's operations in hazardous materials, requiring stringent management to prevent accidents [147]. Research and Development - Despite the challenges, the company's core competitiveness has improved due to increased R&D investment and deep industry engagement [4]. - The company emphasizes product research and development, with all products being independently developed and designed [67]. - The company has developed several patented technologies for the production and processing of fluorinated chemicals [66]. - The company aims to expand its production capacity for fourth-generation refrigerants and foaming agents to secure a leading position in the industry [136]. - The company is focusing on developing high-purity fluorinated ethane production processes, which are expected to enhance product competitiveness and create economic benefits [101]. - The company is actively pursuing market expansion opportunities in the chemical manufacturing sector [200]. Market Trends and Demand - The demand for refrigerants in China is projected to account for 40% of global demand, with the market expected to grow from 202 million tons in 2024 to 229 million tons by 2029, reflecting a compound annual growth rate of 2.5% [38]. - The total output of lithium batteries in China exceeded 940 GWh in 2023, with a year-on-year growth of 25%, and the industry total output value surpassed 1.4 trillion yuan [40]. - The demand for lithium battery-grade PVDF in China reached 68,000 tons in 2023, representing a year-on-year growth of over 55%, with lithium battery demand accounting for 72% of total production [41]. - The company is positioned to benefit from the increasing demand for air conditioning and refrigeration products driven by rising GDP and urbanization in China [38]. - The polyurethane industry is entering a phase of consolidation and enhancement, with a focus on high-value products and sustainable development driven by increasing market demands [62]. Governance and Compliance - The company emphasizes compliance in governance, information disclosure, and management of significant matters to protect minority investors' interests [141]. - The board of directors includes independent members to enhance decision-making and governance quality [152]. - The company has established a comprehensive internal control system to ensure effective risk management and operational oversight [155]. - The company maintains independence from its controlling shareholder in terms of assets, personnel, finance, and operations [156]. - The company has implemented targeted compliance training to enhance risk prevention awareness among employees [189]. Environmental Responsibility - The company strictly adheres to various environmental protection laws and standards in its daily operations [194]. - The company has obtained environmental impact assessments and approvals for multiple projects, including a 30,000 tons/year polyether project and a 20,000 tons/year polyester project [195]. - The company operates a wastewater treatment system that meets the standards set by the local environmental authorities [200]. - The company has invested in new technologies to reduce emissions and improve waste treatment processes [200]. - The company has a total of 240 emission points across its facilities, ensuring effective monitoring and compliance with environmental regulations [199].