新农股份(002942) - 2023 Q4 - 年度财报

Report Summary and Key Financial Indicators Company Profile Zhejiang Xinnong Chemical Co., Ltd. (stock code: 002942) is a Shenzhen-listed company specializing in the R&D, production, and sales of chemical pesticides and intermediates - The company is a chemical enterprise listed on the Shenzhen Stock Exchange, stock code 002942, primarily engaged in the R&D, production, and sales of chemical pesticides[15] Core Financial Data In 2023, the company's performance significantly declined, with revenue decreasing by 34.22% to 821 million yuan and net profit attributable to shareholders turning from profit to loss at -25 million yuan Key Financial Indicators | Indicator | 2023 | 2022 | YoY Change | | :--- | :--- | :--- | :--- | | Operating Revenue (yuan) | 821,032,278.60 | 1,248,167,151.74 | -34.22% | | Net Profit Attributable to Parent (yuan) | -25,374,268.50 | 101,397,042.30 | -125.02% | | Non-recurring Net Profit Attributable to Parent (yuan) | -43,594,379.46 | 91,855,675.41 | -147.46% | | Net Cash Flow from Operating Activities (yuan) | 90,476,478.57 | 138,071,733.77 | -34.47% | | Basic Earnings Per Share (yuan/share) | -0.17 | 0.66 | -125.76% | | Weighted Average Return on Net Assets | -2.21% | 8.79% | -11.00 percentage points | | Total Assets (yuan) | 1,476,010,746.37 | 1,640,799,914.94 | -10.04% | | Net Assets Attributable to Parent (yuan) | 1,121,841,233.36 | 1,171,255,911.40 | -4.22% | Quarterly Financial Performance The company's 2023 performance showed a quarterly decline, turning to loss in Q3 and significantly widening in Q4, while operating cash flow improved in the latter half Quarterly Financial Indicators | Financial Indicator (yuan) | Q1 | Q2 | Q3 | Q4 | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue | 275,296,537.41 | 209,537,984.85 | 176,637,399.08 | 159,560,357.26 | | Net Profit Attributable to Parent | 10,792,398.23 | 14,847,010.13 | -3,529,677.55 | -47,483,999.31 | | Non-recurring Net Profit Attributable to Parent | 3,253,361.65 | 13,396,428.82 | -7,298,608.89 | -52,945,561.04 | | Net Cash Flow from Operating Activities | -54,289,133.02 | 39,615,374.33 | 25,822,523.87 | 79,327,713.39 | Dividend Distribution Plan The board proposed a 2023 profit distribution plan of a cash dividend of 2 yuan (tax inclusive) per 10 shares, based on total shares minus repurchased shares - The company's 2023 profit distribution plan proposes a cash dividend of 2 yuan (tax inclusive) per 10 shares, based on 153,209,930 shares after deducting repurchased shares[4] Management Discussion and Analysis Industry Overview and Company Positioning In 2023, the domestic pesticide market faced intensified competition due to oversupply, driving a shift towards green pesticides and favoring integrated, R&D-capable companies, with the company's core product, Thiazinc, maintaining strong market competitiveness - In 2023, domestic pesticide market competition intensified, leading to oversupply and an expected increase in industry concentration[36] - Policies encourage the development of efficient, safe, and environmentally friendly pesticide varieties and formulations, with highly toxic and high-residue pesticides gradually exiting the market[36] - The company's core product, Thiazinc, is an independently developed fungicide with high market recognition and strong competitiveness in bacterial disease control[38] Main Business and Products The company's main business covers the entire pesticide industry chain, from intermediates to formulations, with core products including Thiazinc fungicides and Chlorpyrifos/Triazophos insecticides; however, capacity utilization was generally low in 2023, and overseas sales accounted for 20.97% of total revenue Production Capacity and Utilization | Main Product | Designed Capacity | Capacity Utilization Rate | Capacity Under Construction | | :--- | :--- | :--- | :--- | | Formulations | 9,000 tons/year | 72.27% | 20,000 tons/year | | Technical Concentrates | 11,000 tons/year | 58.59% | 700 tons/year | | Intermediates | 28,800 tons/year | 31.51% | 6,500 tons/year | - The company's proprietary Thiazinc series formulations are estimated to hold an 11-13% market share in bacterial disease control[54] - Overseas sales revenue in 2023 was 172 million yuan, accounting for 20.97% of total revenue, indicating a relatively small scale[59] Core Competencies The company's core competencies include strong technological innovation, an integrated industrial chain, differentiated product advantages, a robust brand and market presence, and excellent safety and environmental management - The company possesses a comprehensive R&D system, recognized as a National High-Tech Enterprise and National Intellectual Property Advantage Enterprise, with 150 accumulated patents (including 58 invention patents) as of the reporting period end[60][61] - The company adopts an integrated 'intermediate-technical concentrate-formulation' industrial chain model, effectively reducing transaction costs and ensuring product quality and stable supply[62] - The core product, Thiazinc, is a proprietary patented product with uniqueness and high recognition in bacterial disease control, having received multiple national and provincial science and technology awards[65] - The company has established a sales network covering over 20 provinces nationwide and maintains long-term strategic partnerships with international agrochemical companies like BASF, Corteva, and Bayer[69] Operating Results Analysis In 2023, the company's operating performance significantly declined due to industry downturn and price drops, but its formulation business showed resilience, increasing its revenue contribution despite overall revenue decrease Overall Operating Review The company actively responded to the agrochemical industry downturn by implementing differentiated strategies for formulations and industrial products, increasing R&D investment to 7.10% of revenue, and achieving zero safety and environmental incidents - Facing industry downturn, the company implemented a 'win by professionalism, system for future' strategy, prioritizing a differentiated approach led by the formulation business and a 'cost-performance' strategy for industrial products[74][76] - R&D expenses in 2023 totaled 58.33 million yuan, accounting for 7.10% of operating revenue[78] Revenue and Cost Analysis In 2023, total revenue decreased by 34.22% to 821 million yuan, with intermediates and technical concentrates experiencing significant declines in both revenue and gross margin due to market downturn and price drops Revenue and Gross Margin by Product | By Product | Operating Revenue (yuan) | YoY Revenue Change | Gross Margin | YoY Gross Margin Change | | :--- | :--- | :--- | :--- | :--- | | Formulations | 356,752,379.12 | -7.80% | 47.12% | -3.40 percentage points | | Technical Concentrates | 185,215,529.83 | -29.97% | -11.94% | -17.31 percentage points | | Intermediates | 256,564,409.37 | -54.28% | 9.11% | -7.83 percentage points | - Prices for technical concentrates and intermediate products showed a downward trend during the reporting period, primarily due to industry downturn and oversupply[85] Expense Analysis Sales and administrative expenses remained stable in 2023, while financial expenses decreased due to reduced foreign exchange gains, and R&D expenses saw a 16.96% year-on-year decrease Key Expense Items | Expense Item | 2023 (yuan) | 2022 (yuan) | YoY Change | Main Change Explanation | | :--- | :--- | :--- | :--- | :--- | | Selling Expenses | 56,570,979.94 | 57,520,825.67 | -1.65% | No significant change | | Administrative Expenses | 96,546,522.89 | 91,129,118.33 | 5.94% | No significant change | | Financial Expenses | -4,037,649.98 | -12,766,428.95 | Not applicable | Primarily due to impact of USD exchange rate fluctuations on exchange gains | | R&D Expenses | 58,328,564.13 | 70,237,536.36 | -16.96% | No significant change | R&D Investment In 2023, total R&D investment was 60.28 million yuan, representing 7.34% of operating revenue, an increase from the previous year, with R&D efforts focused on process optimization, cost reduction, and new product development R&D Investment Overview | R&D Investment | 2023 | 2022 | Change Percentage | | :--- | :--- | :--- | :--- | | R&D Investment Amount (yuan) | 60,283,381.65 | 70,237,536.36 | -14.17% | | R&D Investment as % of Revenue | 7.34% | 5.63% | 1.71 percentage points | | Number of R&D Personnel (persons) | 174 | 178 | -2.25% | | R&D Personnel as % of Total Staff | 14.68% | 12.35% | 2.33 percentage points | Cash Flow Analysis In 2023, net cash flow from operating activities decreased by 34.47% due to lower sales, while net cash outflow from financing activities significantly reduced due to decreased dividend distribution - Net cash flow from operating activities was 90,476,478.57 yuan, a 34.47% year-on-year decrease, primarily due to reduced cash received from sales of goods and services[96][97] - Net cash outflow from financing activities decreased year-on-year, mainly due to a reduction in dividend distribution for the current year[97][98] Assets and Liabilities Status As of 2023 year-end, total assets decreased by 10.04% to 1.476 billion yuan, while total liabilities decreased by 24.57% to 354 million yuan, improving the asset-liability ratio to 24.00% and reflecting a more stable financial structure - As of 2023 year-end, the company's total assets were 1.476 billion yuan, a 10.04% year-on-year decrease; total liabilities were 354 million yuan, a 24.57% year-on-year decrease[99][314] - The asset-liability ratio at year-end was 24.00%, a decrease from 28.62% at the beginning of the period, indicating an improved financial structure[759] - The book value of restricted assets at year-end was 16.90 million yuan, primarily consisting of bank acceptance bill and forward foreign exchange settlement and sales deposits, a significant decrease from 52.74 million yuan at the beginning of the period[102][103] Future Outlook and Risks The company anticipates accelerated green transformation and consolidation in the pesticide industry, focusing on a differentiated strategy led by formulations and Thiazinc, while addressing market competition, raw material price volatility, and safety/environmental risks Development Strategy and 2024 Operating Plan The company's development strategy focuses on differentiation, with formulations as the lead, combining innovation and imitation, and synergistic development of chemical and biological pesticides, supported by a 2024 plan to optimize marketing, enhance R&D, strengthen QEHS, and build professional teams - Company strategy: Focus on differentiation, with formulations as the lead, combining innovation and imitation, and an integrated model of synergistic development of chemical and biological pesticides[142] - 2024 plan: Continue to focus on 6+1 core crops, improve channel management, expand strategic products, and accelerate new product development in chemical pesticides and biological formulations[143][144] Key Risks and Countermeasures The company faces key risks including market competition, raw material price volatility, safety and environmental pressures, and operational management challenges from expansion, which it addresses through continuous technical upgrades, procurement control, increased safety/environmental investment, and improved management structures - Key risks include market competition, raw material price fluctuations, production safety, environmental protection, and operational management risks[147][148][149][150][151] Corporate Governance and Internal Control Corporate Governance Structure The company operates in strict compliance with laws and regulations, maintaining a sound corporate governance structure with independent assets, personnel, finance, organization, and operations, ensuring effective checks and balances - The company's corporate governance structure is sound, compliant with laws and regulations, and maintains independence from the controlling shareholder in terms of assets, personnel, finance, organization, and operations[155][157] Directors, Supervisors, and Senior Management During the reporting period, the company experienced a change in senior management with the resignation of the former Vice General Manager and CFO, Mr. He Hongyun, and the appointment of Ms. Ding Zhenzhen as the new CFO - During the reporting period, Vice General Manager and CFO He Hongyun resigned, and the company appointed Ding Zhenzhen as the new CFO[164] Internal Control The company continuously improved its internal control system, and as of December 31, 2023, maintained effective internal controls over financial reporting in all material aspects, with no significant deficiencies identified by the board or auditors - The company's board of directors believes that the internal control design is sound and effectively implemented, with no significant deficiencies[197] - The accounting firm issued a standard unqualified audit opinion on the effectiveness of the company's internal controls over financial reporting as of December 31, 2023[202] Environmental, Social Responsibility, and Other Significant Matters Environmental Protection The company and its subsidiaries are key pollutant discharge units, adhering to environmental regulations; however, subsidiary Jiangsu Xinnong received a 190,000 yuan fine for wastewater discharge exceedance, which has since been rectified - The company and its subsidiaries, Xinnong Co., Xinnong Technology, and Jiangsu Xinnong, are all designated as key pollutant discharge units by environmental protection authorities[205] - During the reporting period, subsidiary Jiangsu Xinnong was fined 190,000 yuan for exceeding wastewater total nitrogen discharge limits and has completed rectification[224] Social Responsibility The company actively fulfills its social responsibilities, including legal compliance, protecting stakeholder rights, ensuring employee welfare, maintaining supplier/customer relations, and engaging in public welfare, consistently providing cash dividends since listing and achieving zero safety accidents in 2023 - The company prioritizes investor returns, having distributed cash dividends annually since its listing, with cumulative distributed profits totaling 289.2 million yuan[227] - All major production bases have established comprehensive safety management systems, with no safety production accidents occurring throughout 2023[233][235][238] Other Significant Matters During the reporting period, the company fulfilled commitments, had no major litigation or related-party transactions, changed accounting policies due to new regulations, extended the '1,000 tons/year Pyraclostrobin' project, and both the company and Taizhou Xinnong were re-certified as high-tech enterprises - The company's fundraising project, 'Annual Production of 1,000 tons of Pyraclostrobin and By-product 430 tons of Sodium Chloride Project,' had its expected usable date extended due to process optimization and debugging[274] - Both the company and its wholly-owned subsidiary, Taizhou Xinnong Technology Co., Ltd., were re-certified as High-Tech Enterprises, valid for three years, entitling them to a preferential corporate income tax rate of 15%[274][275] Share Changes and Shareholder Information Share Changes During the reporting period, the company's total share capital remained at 156 million shares, with a structural change in restricted and unrestricted shares due to the former supervisor's departure and subsequent release of his shares from restrictions - Total share capital remained unchanged at 156,000,000 shares during the reporting period, with a structural change between restricted and unrestricted shares due to a senior executive's departure[278] Major Shareholder Information As of the reporting period end, the company had 9,383 shareholders, with Zhejiang Xinhui Investment Co., Ltd. as the controlling shareholder (54.50%), and the Xu Qunhui, Xu Yuexing, Pan Yuyan family as the actual controllers, collectively holding 64.31% of shares Top Shareholders | Shareholder Name | Shareholder Nature | Shareholding Percentage | Number of Shares Held at Period End | | :--- | :--- | :--- | :--- | | Zhejiang Xinhui Investment Co., Ltd. | Domestic Non-State-owned Legal Person | 54.50% | 85,020,000 | | Xu Qunhui | Domestic Natural Person | 5.06% | 7,897,500 | | Pan Yuyan | Domestic Natural Person | 3.50% | 5,460,000 | | Hu Hong | Domestic Natural Person | 2.31% | 3,599,700 | | Guotai Juxin Value Advantage Mixed | Fund | 1.95% | 3,045,900 | - The company's actual controllers are Xu Qunhui, Xu Yuexing, and Pan Yuyan, with Xu Yuexing and Pan Yuyan being a married couple and Xu Qunhui's parents[284][288] Financial Report and Audit Opinion Audit Report Zhonghui Certified Public Accountants (Special General Partnership) issued a standard unqualified audit opinion on the company's 2023 financial statements, confirming fair presentation in all material aspects, with revenue recognition identified as a key audit matter - The auditing firm issued a standard unqualified audit opinion[296] - A key audit matter was 'revenue recognition from main operations' due to its material amount and inherent risk of management override[297][298] Significant Accounting Policy Changes During the reporting period, the company changed its accounting policies in accordance with 'Interpretation No. 16 of Accounting Standards for Business Enterprises' issued by the Ministry of Finance, primarily concerning deferred income tax related to single transactions, with retrospective adjustments made to relevant financial statement items - The company adopted 'Interpretation No. 16 of Accounting Standards for Business Enterprises' issued by the Ministry of Finance starting January 1, 2023, and retrospectively adjusted deferred income tax arising from related transactions[253][507] Notes to Major Items in Consolidated Financial Statements Financial statement notes indicate decreases in accounts receivable and inventory, with bad debt provision reversals and inventory/fixed asset impairment provisions reflecting asset quality management pressures, while non-recurring gains partially offset operating losses - Accounts receivable balance at period-end was 91.19 million yuan, a significant decrease from 147 million yuan at the beginning of the period; 2.65 million yuan in bad debt provisions were reversed this period[521][527] - Inventory book value at period-end was 102 million yuan, a decrease from 155 million yuan at the beginning of the period; 11.57 million yuan in inventory impairment provisions were recognized this period, mainly for finished goods[557][559] - Fixed asset impairment provisions of 6.74 million yuan were recognized this period, primarily for machinery and equipment no longer expected to be in use[569][573] - Total non-recurring gains and losses for the current period amounted to 18.22 million yuan, primarily comprising 9.36 million yuan in government grants and 12.40 million yuan in financial asset investment-related gains/losses[818]