2022-03-16-深交所-深纺织Ｂ_2021年年度报告（英文版）_263页_1mb

Shenzhen Textile (Holdings) Co., Ltd. 2021 Annual Report Summary

Core Content Overview

This document is the 2021 Annual Report of Shenzhen Textile (Holdings) Co., Ltd., providing comprehensive information on the company's operations, financial performance, and strategic direction. The report includes definitions of key terms, company profile, financial highlights, management discussion and analysis, and other relevant sections such as corporate governance and risk factors.

Main Financial Highlights

• Operating Income: RMB 2,293,747,892.06 in 2021, an increase of 8.76% year-on-year.
• Net Profit Attributable to Shareholders: RMB 61,162,384.25 in 2021, a 64.12% increase compared to 2020.
• Net Profit After Non-Recurring Gains/Losses: RMB 40,650,013.22 in 2021, a 124.78% increase from 2020.
• Net Cash Flow from Operations: RMB -4,436,980.35 in 2021, a -329.78% decline compared to 2020.
• Basic Earnings Per Share (EPS): RMB 0.12 in 2021, up by 71.43% from 2020.
• Weighted Average ROE: 2.19% in 2021, up from 1.36% in 2020.
• Gross Assets: RMB 5,496,647,107.83 at the end of 2021, an increase of 10.61% year-on-year.
• Net Assets Attributable to Shareholders: RMB 2,816,795,889.89 at the end of 2021, up by 1.83% from 2020.

Key Financial Performance Drivers

• The polarizer market was generally stable and improved in 2021, with the company optimizing its order structure, leading to a steady increase in average gross profit margin.
• The company reduced rent costs in 2020 to support tenants during the pandemic, resulting in a significant increase in rent income in 2021.
• The Line 7 project, which focuses on super large-size TV polarizers, was completed in mid-July 2021 and entered the ramp-up phase, laying the foundation for increased production capacity and profitability in 2022.

Main Business and Products

• The company's primary business includes LCD polarizers, property management, and high-end textiles and garments.
• It has 7 mass production lines for polarizers, covering TN, STN, TFT, OLED, 3D, dye sheet, and touch screen optical film.
• These products are used in TV, notebook computers, navigation systems, monitors, vehicles, industrial controls, smartphones, wearables, 3D glasses, sunglasses, and other applications.
• The company has established relationships with major panel manufacturers such as Huaxing Optoelectronics, BOE, Sharp, LGD, Shenzhen Tianma, and Huike.

Business Model and Competitive Advantages

• The company has transitioned to a customer-centric, joint R&D, and comprehensive service model.
• Technology Advantages:
  • SAPO Photoelectric is the first domestic high-tech company to enter the polarizer R&D and production sector.
  • It has over 20 years of experience in the polarizer industry and owns 115 invention patents, with 89 authorized, including 36 domestic invention patents and 72 domestic utility model patents.
  • It has developed 4 national standards and 2 industrial standards.
  • The company has innovation platforms, including the Guangdong Engineering Technology Research Center, Shenzhen Polarizing Materials and Technology Engineering Laboratory, and Shenzhen Enterprise Technology Center.
• Talent Advantages:
  • The company has a senior management team and technical staff with strong technical capabilities, long-term experience, and international vision.
  • It has technical cooperation with Nitto Denko Corporation, a global leader in polarizer manufacturing.
  • It has implemented market-oriented reforms, employee promotion systems, and incentive mechanisms to enhance employee development and core competitiveness.
• Market Advantages:
  • The company has a strong domestic market position, especially in large-size polarizer markets.
  • It benefits from national policy support and localization advantages.
  • It has established a rapid response mechanism and stable supply chain to increase market share.
• Quality Advantages:
  • The company adheres to the quality policy of "Satisfying customer demands and pursuing excellent quality."
  • It has implemented modern quality management systems, including ISO9001, ISO14001, OHSAS18000, and QCO80000.
  • Its products have been tested by SGS and meet environmental protection and safety standards.

Risk Factors

• The company faces macroeconomic risks, market competition risks, and raw material risks.
• These risks are detailed in Section III, XI: Risks facing the Company and countermeasures.
• The net profit after non-recurring gains/losses was negative in 2019, and the auditor's report from the previous year indicated uncertainty regarding the company's going concern ability.

Non-Recurring Gains and Losses

• The company reported non-recurring gains and losses for the years 2021, 2020, and 2019.
• Non-current asset disposal gain/loss: RMB -961,982.35 in 2021.
• Government subsidies: RMB 19,643,379.33 in 2021, excluding those closely related to its main business.
• Other non-business income and expenditures: RMB 19,964,046.87 in 2021.
• Tax impact: RMB -6,025,891.12 in 2021.
• Minor shareholders' equity impact: RMB 13,096,494.74 in 2021.
• Total non-recurring gains and losses: RMB 20,512,371.03 in 2021.

Strategic Outlook

• The company plans to further optimize its product structure and customer structure.
• It aims to improve internal management, upgrade production technology, and enhance production efficiency and product quality.
• The company will also broaden procurement channels to reduce production costs and strengthen market competitiveness.

Corporate Governance and Compliance

• The report is prepared in both Chinese and English, with the Chinese version taking precedence in case of discrepancies.
• The Board of Directors and Supervisory Committee confirmed the authenticity and completeness of the report.
• The financial report was prepared by Grant Thornton International Ltd (Special General Partnership), with Zhen Zhifang and Liu Duoqi as the signatories.

Conclusion

The Shenzhen Textile (Holdings) Co., Ltd. has demonstrated strong financial performance in 2021, with significant increases in operating income and net profit. The company is a leading player in the polarizer industry, with a diverse product portfolio and a robust business model focused on customer needs and technological innovation. It also faces various risks, including market competition and raw material availability, which are outlined in the report. The company's core competitiveness is built on technological innovation, talent development, market position, and quality management, and it is actively working to enhance its market share and production capacity in the coming years.