Shinhoo Canned parent company - Dayuan Pump annual report: five years revenue doubled!


Recently, the parent company of Shinhoo Canned -- Dayuan Pumping Co., LTD. (603757) disclosed on the website of Shanghai Stock Exchange the following contents from the annual report of the board of directors management discussion:

In 2020, as the end year of the company's 2016-20205 development strategic planning cycle, the company has always maintained strategic focus and insisted on professional development in the face of the double superimposed impact of the global novel coronavirus outbreak and the once-in-a-century major changes. Facing the large market of downstream pump industry of 100 billion level, adhere to innovation-driven and high-quality development, and successfully achieve the annual business plan. During the reporting period, the company achieved operating revenue of 1.413 billion yuan, a year-on-year growth of 24.52%, significantly higher than the general level of the whole industry [According to the relevant statistical data of China General Machinery Industry Association, from January to December 2020, 1,255 pump and vacuum equipment sample enterprises achieved a total of 178.104 billion yuan of main business revenue. Year-on-year growth was 0.81%.] . In the past five years' development planning period, the company has successfully achieved the target of doubling its operating revenue [compared with the company's operating revenue in 2015, the cumulative increase reached 121.82% in 2020] Market share, industry position and brand influence have been significantly improved.

During the reporting period, the net profit attributable to shareholders of listed companies reached 213 million yuan, with a year-on-year growth of 25.05%, and the net profit attributable to shareholders of listed companies after deducting non-recurring gains and losses reached 201 million yuan, with a year-on-year growth of 32.30%. In 2020, the management of the company will continue to implement the concept of sustainable development, which combines the long-term period of the enterprise with the near-current development goals, and increase the investment and layout of innovative businesses, rather than blindly pursuing the maximization of short-term investment returns. During the reporting period, the company's R&D expenses amounted to RMB 57.195,800, up 24.96% year on year, and the ratio of total R&D investment to current revenue was 4.05%. At the same time, the company is known to be one of the enterprises with the most comprehensive business layout among the enterprises with the same standardized model in the same industry. At the same time, the company carries out layout in three business segments, namely, the civil water pump market, the household consumer market and the industrial market. Each business segment has clear organizational boundaries and independent operation and development. The current management input and output status of the company are basically in line with the long-term strategic planning setting of the company, which is conducive to the expansion of the support organization, business innovation and the realization of the long-term goal of greater market share. In the future, with the expansion of the revenue scale of each business segment, the management efficiency index is expected to be continuously improved and promoted.

During the reporting period, the company's profitability further improved, achieving a weighted average return on equity of 17.88%, a year-on-year increase of 1.74 percentage points. While insisting on creating value for shareholders, the company focuses on reasonable returns for investors. In the 2020 annual profit distribution plan formulated by the Board of directors, the ratio of the total cash dividend to be distributed by the company and the net profit attributable to the shareholders of the listed company reached 78.53%. The structure of the company's assets and liabilities remained stable, and the reported asset-liability ratio was 20.95% at the end of the period, indicating that the quality of the company's assets remained good. The company has reasonable and sufficient liquidity, and the balance of cash and cash equivalents at the end of the period is 606 million yuan.

In addition, in order to further improve the corporate governance structure, improve the incentive and restraint mechanism of the company, and form a good and balanced value distribution system, the company also formulated and implemented the 2020 Restricted Stock Incentive Plan during the reporting period, so as to fully mobilize the enthusiasm of the company's directors, senior managers and core backbone personnel. To open the company's next five-year strategic planning cycle to lay a solid foundation of human resources.

During the reporting period, the operating development of each business segment of the company is as follows:

Civil water pump business segment revenue growth accelerated, the overall business scale to a new level, bucking the trend to improve market share, competitive advantage gradually emerged.

During the reporting period, the revenue scale of civil water pump business segment first broke 700 million yuan, with a year-on-year growth of 23.06%, and the growth center moved significantly upward. The company has a complete product line of civil pumps, including submersible pumps, well pumps, land pumps and other series of products, and the company has been to commercial pumps and other categories of products horizontal expansion. During the reporting period, the submersible pump products, which are positioned as the middle and high-end market and have a high gross profit rate, achieved a year-on-year growth of 23.71%. With the continuous recognition of this kind of products by customers, the future growth space is expected to be further opened.

As a comprehensive civil water pump brand provider with complete product categories in the same industry, our company has complete product advantages which can effectively reduce the agency cost of downstream dealers and improve their distribution efficiency. In addition, the company also carries out in-depth "enabling dealer" activities to establish a closer upstream and downstream collaborative relationship and promote the balanced improvement of value in the whole value chain of Dayuan brand. During the reporting period, the business segment of civil water pump insists on focusing on the domestic market and expanding its brand influence in multiple global markets. The development level of each market is relatively balanced, with strong risk resistance ability. In the future, the company will continue to increase the investment in production automation and intelligent technology in this business segment. With the expansion of business development scale, the company is expected to continue to expand the relative competitive advantage at the cost end.

The accumulated competitive advantages and brand influence of household shield pump in the domestic market continue to expand, boosting the comprehensive share of the domestic market to further improve, in the overseas market to seize the opportunity of the arrival of the product upgrade cycle, the shipment of the next generation of high efficiency and energy saving pump products significantly accelerated.

On the supply side, the company produced all kinds of household shield pumps over 3.91 million units, with a year-on-year growth of 36.11%, showing full advantages in scale and efficiency. During the reporting period, the company further improved the product line layout. On the basis of the original pumps for wall mounted furnaces, pipeline circulation pumps and household mechanical pumps, the company successfully achieved mass production of pumps for zero cold water gas water heaters, successfully upgraded pumps for heat pumps (air source and ground source), and meanwhile increased the project approval and technical reserve of pumps for other household appliances. The company develops new products based on the downstream highly reusable customer network and sales channels, which will greatly reduce the development risk of new products and shorten the marketing cycle. Over the years, the company focuses on technological innovation and product research and development, and actively participates in the formulation of technical standards in the industry, and has a clear technological lead in the industry. During the report period, Hefei Xinhu won the "Anhui Province Patent Gold Medal", "13th Five-Year" national pump industry standardization advanced unit and other honorary titles.

At the market end, the company has divided the market segments from the level of marketing organization, combined with the implementation of the management by objectives system, and activated the marketing team to the greatest extent. Household shield pump achieved balanced development in domestic and overseas markets, and the gross profit achieved in overseas markets accounted for more than 50% of the total gross profit achieved in this business segment, and the market anti-risk ability was further enhanced. Among them, at the present stage, the company's shipments of the next generation of high-efficiency and energy-saving pump products, which are mainly for overseas markets, increased by 68.91% year-on-year, and the realized revenue accounted for 25.85% of the total overseas revenue of this business segment. The company's energy-saving pump products are still in the early stage of market development, overseas market share is still less than 5%. In the future, under the requirement of the trend of carbon neutrality and carbon peak, the domestic market has increasing requirements for energy-saving technology, and the new market under the demand of product upgrading and replacement will have considerable space for development

Industrial shielding pump capacity recovered steadily, pump standardization, serialization work made remarkable progress.

In addition to the traditional petrochemical market, the demand of clean energy markets represented by photovoltaic and nuclear power is growing rapidly. In the first half of 2020, the novel coronavirus pandemic had a significant negative impact on both the upstream and downstream of the business segment. H1(from January to June 2020) recognized revenue of -28.66% year-on-year. Entering the second half of 2020, with the normalization of the supply chain, the company's delivery capacity was quickly repaired, and the annual revenue of industrial shielding pumps was 116 million yuan, with a positive annual growth of 14.28%. Looking ahead to 2021, as the COVID-19 pandemic is effectively controlled globally and economic recovery gains momentum, the business segment will be further relieved of the pressure factors on both sides of supply and demand.

During the reporting period, the company adhered to the market positioning of middle and high-end route and the competitive strategy of high fighting, and continued to promote the design, research and development and production of products in accordance with the API685 standard, which is the high-level requirement of the industry, so that the standardization and serialization level of conventional pumps can be effectively improved, which is conducive to strengthening the company's brand awareness in the industrial pump market. And improve subsequent overall production and operation efficiency. In addition, the business sector on the one hand through the internal expansion of the team, improve the ability of independent research and development design, on the other hand through the external relationship with domestic scientific research institutions represented by Top9 university background, accelerate the company in the field of large-scale custom pump technology and product breakthroughs. At present, the demand from the downstream clean energy market represented by nuclear power, photovoltaic, wind power, etc. grows rapidly. In the reporting period, the corresponding revenue of the company has accounted for more than 15% of the total sales revenue of the business segment. With the gradual maturity and normalization of the application of the shield pump technology in the above clean energy industry, the huge potential demand of the related market is expected to accelerate the reality transformation.

During the reporting period, the company's products and applications in other industrial supporting markets also became more mature. Among them, the shipment of supporting pumps for the semiconductor and electronics industry accelerated, the small batch production of supporting pumps for medical instruments has been realized, and the ground transformer pumps have initially entered the customer markets such as the State Grid.

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Vehicle pump business development into a new stage, market planning objectives further clear, product line layout further perfect; Give full play to professional advantages, industry influence and brand awareness quickly formed.

During the reporting period, the vehicle pump business segment has been independently operated under the current organizational framework. The first generation of high-pressure liquid cooling pump products applied to the hydrogen energy vehicle market (fuel cell) has been ready for mass production. Meanwhile, the company has developed low-voltage liquid cooling pump products for the pure electric vehicle market (lithium battery), which are still in the internal verification stage. In 2020, the company has entered the supplier system of many vehicle or fuel cell reactor manufacturers, and won the "Annual Golden Globe Award for Innovative Technology", "Top50 hydrogen fuel cell industry Chain" and other awards issued by the industrial Research Institute of High-tech Industry (GGII), a professional consulting organization in the industry, rapidly forming the industry influence and brand awareness.

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