Securities code: Lihuayi Weiyuan Chemical Co.Ltd(600955) securities abbreviation: Lihuayi Weiyuan Chemical Co.Ltd(600955) Announcement No.: 2022017
Lihuayi Weiyuan Chemical Co.Ltd(600955)
Announcement on the company’s profit distribution plan for 2021
The board of directors and all directors of the company guarantee that there are no false records, misleading statements or major omissions in the contents of this announcement, and bear individual and joint liabilities for the authenticity, accuracy and completeness of its contents.
Important content tips:
Cash dividend of RMB 3.91 per 10 shares
The profit distribution is based on the total share capital registered on the equity distribution registration date, and the specific date will be specified in the equity distribution implementation announcement.
The profit distribution plan can only be implemented after being submitted to the 2021 annual general meeting of shareholders of the company for deliberation and approval.
The proportion of cash dividends in this year is 10%. The retained undistributed profits will be mainly used to meet the daily business needs, support the working capital needs of new project construction, future investment planning and long-term development, and provide a reliable guarantee for the smooth implementation of the company’s medium and long-term development strategy and sustainable and healthy development. 1、 Contents of profit distribution plan
Audited by ShineWing Certified Public Accountants (special general partnership), the net profit of the parent company in 2021 was 214960979850 yuan, the profit available for distribution to shareholders of the parent company in that year was 193464881865 yuan, plus the undistributed profit of the parent company at the beginning of the period was 102530934437 yuan, and the cumulative profit available for distribution of the parent company in this year was 295995816302 yuan, The cumulative distributable profit attributable to the shareholders of the parent company this year is 296018100169 yuan.
According to the relevant provisions of the articles of association and considering the capital demand of the company’s fixed asset investment in 2022,
As of December 31, 2021, the total share capital of the company is 550000000 shares. Based on this calculation, a total cash dividend of 21505000000 yuan will be distributed. The proportion of cash dividend in this year is 10%. The retained undistributed profits will be mainly used to meet the daily operation needs and support the working capital needs of new project construction, future investment planning and long-term development, Provide reliable guarantee for the smooth implementation of the company’s medium and long-term development strategy and sustainable and healthy development.
In 2021, the company will not give bonus shares and convert capital reserve into share capital.
The profit distribution plan needs to be submitted to the general meeting of shareholders for deliberation. 2、 Description of cash dividend ratio less than 30% in this year
During the reporting period, the net profit attributable to the shareholders of the listed company was 214971290346 yuan, and the total cash dividend to be distributed by the company was 21505000000 yuan, accounting for 10% of the net profit attributable to the shareholders of the listed company this year, less than 30%. The specific reasons are as follows:
(I) industry situation and characteristics of the company
The company has always focused on the business of new chemical materials and built polycarbonate and its upstream and downstream industrial chain. It is one of the enterprises with the most complete upstream and downstream coverage of China’s polycarbonate industrial chain. At present, the production capacity of phenol, acetone, bisphenol A, polycarbonate and isopropanol is 440000 tons, 260000 tons, 240000 tons, 130000 tons and 100000 tons respectively. It is the largest phenol and acetone production enterprise in China and has good market competitiveness.
Phenol industry: in China, the downstream of phenol is mainly distributed in bisphenol A, phenolic resin, cyclohexanone, pharmaceutical intermediates and many other fields. From 2017 to 2021, with the continuous development of downstream industries, China’s phenol consumption showed an increasing trend year by year. In recent years, due to the rapid development of downstream polycarbonate industry and the increment of downstream liquid epoxy resin in wind power demand, the consumption of phenol in downstream bisphenol a industry has increased significantly, becoming the largest consumption field of phenol. In addition, the downstream phenolic resin industry is developing towards centralization and scale. During the year, many manufacturers newly installed phenolic resin devices, which further stimulated the increase of phenol demand. At present, China is a country with relatively strong downstream demand for phenol in the world, and its consumption is expected to further increase in 2022.
Acetone industry: China’s acetone downstream is relatively scattered, including bisphenol A, MMA, acetone hydrogen alcohol, isopropanol, isopropylamine, MIBK, solvent, etc. affected by the expansion of downstream bisphenol A, MMA and isopropanol industries, the annual acetone consumption is about 2525000 tons, an increase of 22% over last year. In addition, in terms of import, China’s acetone import volume in 2021 is 622600 tons, and it is estimated that China’s acetone import volume in 2022 may be around 480000 tons.
Bisphenol a industry: the consumption of bisphenol A in China is increasing year by year, and the development of downstream epoxy resin and polycarbonate goes hand in hand. From 2017 to 2021, the consumption of bisphenol A in China showed an increasing trend year by year, and the compound growth rate of demand in recent five years was 11.70%. Main influencing factors: the capacity of polycarbonate industry downstream of bisphenol A continues to expand, and the compound growth rate of polycarbonate capacity has reached 21.6% in recent five years, which has become the main driving force for the growth of bisphenol a demand. In addition, the demand for bisphenol A in the downstream epoxy resin industry has also continued to increase, and the development of the wind power industry with terminal demand has highlighted the tight encirclement. In 2020, due to the centralized rush loading of wind power projects, the consumption of epoxy resin has doubled, thus driving the demand for bisphenol A in epoxy resin. It is expected that the consumption of bisphenol A in China will continue to rise in 2022.
Isopropanol industry: in 2021, the downstream industries of isopropanol in China are mainly concentrated in ink, herbicide, electronic cleaning, coating, pharmaceutical intermediates, etc. With the outbreak of public health events in 2020, the export volume and price of isopropanol reached a new high in recent years. Due to the pressure of raw material cost, some downstream of isopropanol choose to find alternatives. In 2021, due to the rational correction of isopropanol price, the demand of some downstream industries gradually recovered. The growth point of downstream demand for isopropanol in the future is mainly used in disinfectant industry and electronic cleaning industry.
In 2021, the global PC production capacity continued to grow, but the growth rate slowed down. From a regional perspective, Asia is still the most active region of supply and demand. China is still the most important production capacity base in Asia, and the production capacity has further increased. The production of some projects was delayed during the year, and the growth rate has slowed significantly. The compound growth rate of production capacity in 20172021 was 21.6%, down 4.4 percentage points from the compound growth rate in 20162020. In 2022, China’s large-scale projects were put into operation more intensively than expected, continuing to promote the growth of global production capacity. In the past five years, PC production capacity in China has increased rapidly, with a cumulative increase of 20 percentage points in the proportion of global production capacity. By 2021, the proportion will reach 36%, with a year-on-year increase of 5 percentage points. There is no new production capacity in other parts of the world. (II) development stage of the company and its own business model
The company’s main products are phenol, acetone, bisphenol A, polycarbonate, isopropanol and polycarbonate modified alloy products. The raw materials mainly include pure benzene, propylene, dimethyl carbonate, etc.
After years of careful management of polycarbonate materials under the brand of “Lihua yiweiyuan”, through low-key and pragmatic style, precise and fair price adjustment, strict and standardized channel control and careful after-sales service, the sales price, product circulation and industry popularity have been greatly improved.
In terms of raw material procurement, most of the main raw materials are bulk commodities, which can be purchased by enterprises through factories or from traders. The company is rich in chemical resources around, and establishes long-term cooperative relations with raw material suppliers with relatively stable supply. Purchasing nearby can reduce the cost of raw materials and enhance the company’s resistance to the risk of potential price fluctuation of raw materials to a certain extent.
In terms of product sales, direct selling and trader modes coexist in the industry. The direct selling mode is to sell directly to downstream factories for Chinese downstream factory customers. The trader mode is that the enterprise cooperates with the trader, and the production enterprise sells to the trader and then sells to the downstream factory.
(III) profitability and capital demand of the company
1. Profitability of the company in recent three years
Unit: yuan currency: RMB
Main financial indicators 20212020 2019
Operating income 963461598864438639917737399269377741
Net profit attributable to shareholders of the listed company 21497129003467151065320121241261761
Net profit attributable to shareholders of listed company after deducting non recurring profit and loss of 213113922551707096 Zhejiang Entive Smart Kitchen Appliance Co.Ltd(300911) 9039059500
2. Future capital demand of the company
According to the actual operation of the company, in order to promote the smooth implementation of the company’s strategic objectives and production and operation plans, the company needs to invest a lot of funds in project construction, new technology research and development, new market development, daily production and operation, etc.
(IV) reasons for the low level of cash dividends of the company
At present, the company is still in a period of rapid development. The company’s project construction, new technology research and development and new market development still have a large demand for funds. For the long-term development of the company, the profit distribution plan of the company is in line with the actual situation of the company, which is conducive to the long-term development of the company. It not only meets the cash dividends and returns to investors, but also ensures the capital needs of the subsequent development of the enterprise.
(V) the exact purpose of retained undistributed profits and the estimated income of the company
The undistributed profits realized by the company in 2021 will be used for the working capital and project construction required for daily production and operation, so as to meet the needs of the company’s normal production and operation for capital and rapid development. The company has always attached importance to the return to investors in the form of cash dividends. The profit distribution plan proposed in this period is conducive to maximizing the long-term interests of the company and shareholders and maintaining the healthy and stable development of the company. 3、 Decision making procedures performed by the company
(I) convening, deliberation and voting of the board meeting
The company held the seventh meeting of the second board of directors on March 1, 2022, and deliberated and adopted the
On the proposal of the company’s profit distribution plan in 2021, there were 7 affirmative votes, 0 negative votes and 0 abstention votes. The profit distribution plan needs to be submitted to the company’s 2021 annual general meeting for deliberation.
(II) opinions of independent directors
According to the specific provisions of relevant laws and regulations such as the company law, the securities law, the guidelines for the supervision of listed companies No. 3 – cash dividends of listed companies (announcement [2022] No. 3 of China Securities Regulatory Commission) and in combination with the actual situation of the company, we believe that this profit distribution plan complies with the provisions of laws, regulations and the articles of association. This profit distribution plan is an important decision made based on the company’s current operating conditions, financial conditions, capital needs and the company’s future development, and fully reflects the company’s focus on the return to investors, so that investors can share the company’s operating results.
(III) opinions of the board of supervisors
The company held the fourth meeting of the second board of supervisors on March 1, 2022, deliberated and adopted the proposal on the company’s profit distribution plan in 2021, with 3 affirmative votes, 0 negative votes and 0 abstention votes. The profit distribution plan needs to be submitted to the company’s 2021 annual general meeting for deliberation.
After careful review, the board of supervisors believes that the profit distribution plan meets the requirements of relevant laws and regulations and the relevant provisions of the articles of association, does not harm the interests of the company and shareholders, and meets the development needs of the company. 3、 Relevant risk tips
The company’s cash flow and long-term operating profit of the current period will not be affected by factors such as the company’s cash flow composition and long-term operating plan, which will not affect the company’s normal development of the current period.
The profit distribution plan must be submitted to the 2021 annual general meeting for approval. Please pay attention to the investment risks.
It is hereby announced.
Lihuayi Weiyuan Chemical Co.Ltd(600955) board of directors March 1, 2022
