2021 general manager’s work report
2021 is a year for Suzhou Thvow Technology Co.Ltd(002564) to survive in difficulties. The company implements the strategic deployment of Shanghai Electric Group Company Limited(601727) group “steady progress, integrity and innovation, and unswervingly promote the group to achieve high-quality development”, actively overcome difficulties and promote the orderly development of all work.
1、 Work completion in 2021
(I) main business indicators of the company.
In 2021, the company achieved a total operating revenue of 6.807 billion yuan, a decrease of 11.74% over the same period of last year; The operating profit was -856 million yuan, an increase of 48.78% over the same period last year; The total profit was -858 million yuan, an increase of 48.77% over the same period last year; The net profit attributable to shareholders of listed companies was -693 million yuan, an increase of 40.21% over the same period of last year, and the net outflow of operating cash flow was 615 million yuan.
1. During the reporting period, all business segments of the company generally maintained normal operation. The high-end equipment business maintained growth and the national defense construction business increased steadily. However, the overall business income scale of the company decreased because the sales revenue of the new energy business of the company’s energy engineering sector did not meet expectations.
During the reporting period, the operating revenue of CNAC power was 4.338 billion yuan, that of Zhang Huaji was 2.548 billion yuan, and that of Hongqi shipyard was 187 million yuan. Affected by the rush of wind power installation, the construction cost (such as equipment price, construction and installation fee, etc.) of China machine power has increased significantly. The owner is cautious about the commencement of investment projects and delays the commencement time; Due to the continuous sharp rise of silicon material price and module price of photovoltaic project, the company has slowed down the progress of the project in order to control the project cost. The above factors led to the lower than expected sales revenue of the company’s new energy business during the reporting period.
2. During the reporting period, the company strengthened the collection of accounts receivable and actively collected them. The total original value of accounts receivable at the end of the period decreased compared with that at the beginning of the period.
During the reporting period, all business segments of the company increased the collection of funds and achieved certain results. However, due to the long subsidy issuance cycle of new energy power stations and the rise of coal prices in thermal power stations, the capital pressure of power stations is large, resulting in the delay of EPC project payment collection time, the aging of accounts receivable and the increase of bad debt reserves. At the same time, due to the change of the company’s income structure, the contract assets of the company’s wind power projects with long construction cycle have increased, and the provision for impairment of contract assets has increased accordingly.
3. Provision for partial goodwill impairment
In view of the fact that the income of the company’s important subsidiary in the energy engineering sector was lower than expected and the amount of provision for credit impairment and asset impairment increased, the management made careful analysis and conducted a preliminary impairment test on the goodwill generated by the acquisition of China machinery power. After evaluation and audit by the evaluation institution and audit institution hired by the company, it was determined that the amount of provision for impairment of goodwill was 194196500 yuan.
To sum up, in 2021, the company’s expenses were under control. Although the comprehensive gross profit increased, which could cover the company’s period expenses and R & D expenses, the company’s energy engineering segment revenue was lower than expected, and the amount of credit impairment provision and asset impairment provision increased, resulting in losses.
(II) main business measures
1. Operation of the three main businesses
(1) Energy engineering service business
During the reporting period, China machine power strengthened the organization and leadership of key projects, attached great importance to and made careful deployment, and promoted the orderly implementation of various projects. Through Shanghai Electric Group Company Limited(601727) brand advantages, optimize the supplier system, adopt the procurement mode of centralized procurement and framework agreement, and continue to implement the management requirements of “cost reduction and efficiency increase”. Liaoning Anlian cogeneration expansion project was signed. The project is planned to be jointly implemented by China machine power in collaboration with several industrial groups under Shanghai Electric Group Company Limited(601727) company. It adopts three-dimensional digital design and will realize digital handover for the first time. Dongguan Zhongtang gas turbine cogeneration project, which was independently designed and EPC contracted for the first time, won a phased victory. Unit 1 completed 168 hour full load test run, officially handed over and put into commercial operation.
(2) High end equipment manufacturing business
During the reporting period, Zhang Huaji continued to carry out customer industry extension and product transformation and upgrading around the needs of market customers. The transformation of product structure from “large and comprehensive” to “special and heavy” has been successful, and the strategic deployment of transformation from conventional ordinary carbon steel tower to PTA industry special equipment, high-efficiency heat exchanger, duplex steel, stainless steel and other high value-added products has been realized. Major breakthroughs have been made in the market development of new products. Some products of vanadium steel forging and welding hydrogenation reactor, Po reactor of propylene oxide project, Hengli Petrochemical Co.Ltd(600346) oxidation reactor project and crystallizer project have been delivered, and preliminary preparations have been made for developing the market of wound tube heat exchanger and starting the manufacture of methanol synthesis tower. During the reporting period, the downstream chemical equipment market of petrochemical industry developed rapidly, and the prosperity of small and medium-sized chemical equipment market provided good market support for the stable development of Zhanghua machinery.
(3) National defense construction business
During the reporting period, Hongqi shipyard improved the safety production standard, promoted the safety and environmental management level, improved the system, improved the internal control management level, controlled costs, reduced costs and increased efficiency, achieved results, consolidated the foundation, strengthened management and ensured the normal and standardized operation of the enterprise.
(4) Order status
As of December 31, 2021, the company’s main business orders in hand totaled 27.65 billion yuan, including 24.82 billion yuan for power engineering and clean energy engineering, 2.75 billion yuan for pressure vessel equipment, and 90 million yuan for national defense construction and other businesses. Among the orders in hand for power engineering and clean energy engineering, thermal power orders are 6.51 billion yuan, wind power orders are 9.26 billion yuan, photovoltaic orders are 7.38 billion yuan, power transmission and transformation orders are 1.27 billion yuan, and other orders are 390 million yuan. Wind power and photovoltaic orders account for 67.0% of all orders in hand in the company’s main business.
2. Take budget management as the starting point and implement cost reduction and efficiency increase
Suzhou Thvow Technology Co.Ltd(002564) the headquarters and subordinate core business enterprises implement a comprehensive budget management system. According to the goal of “living within our means, overall balance and slight surplus”, do a good job in budget management. Tianwo headquarters holds fund balance meeting every month, and subordinate enterprises report fund budget every month. Over the past year, the capital budget has brought results for enterprises at all levels to improve management. 3. Take the promotion of science and technology as the starting point and do a good job in talent construction.
During the reporting period, the company held a science and technology conference. Make it clear that scientific and technological personnel are the core competitiveness of enterprises in the future. It is emphasized that enterprises should create a good atmosphere for scientific researchers, and scientific research projects should adhere to two directions: market competitiveness and enterprise profit, so as to truly bring value to enterprises. Set up a scientific research project fund of 1 million yuan to reward scientific research teams that have achieved remarkable results and brought benefits. During the reporting period, one scientific research project was signed with Suzhou Thvow Technology Co.Ltd(002564) and assessed by China machinery power, Zhang Huaji and Hongqi shipyard respectively.
4. Further strengthen the coordinated development with Shanghai Electric Group Company Limited(601727) group
(1) Continuously optimize the business collaboration mode.
The design, development, construction and other businesses of CIMC power will further optimize the coordination mode, form a perfect operation mechanism in project initiation, project implementation, design implementation and other aspects, and control risks.
(2) Strengthen talent exchange. Some professionals of Shanghai Electric Group Company Limited(601727) group will be introduced to fill the positions of legal affairs and finance of tianwo headquarters, and the technical management backbone with rich experience in project development and project implementation will be absorbed to fill the positions of China machine power. The availability of these talents will play an important role in further improving the management level and market expansion ability of Suzhou Thvow Technology Co.Ltd(002564) , CIMC power.
2、 Working ideas for 2022
In 2022, the main tone of Suzhou Thvow Technology Co.Ltd(002564) work was “scientific management, standardized operation, reshaping image and starting business again”. Strive to achieve a substantial increase in sales compared with 2021 and truly achieve sustainable turnaround. Focus on the following aspects:
1. Fully promote major asset restructuring
On February 11, the company issued a major asset restructuring plan. The restructuring plan consists of issuing shares to purchase assets and raising supporting funds through non-public issuance of shares. Among them, Suzhou Thvow Technology Co.Ltd(002564) intends to purchase 100.00% equity of Shanghai Boiler Works Co., Ltd. held by Shanghai Electric Group Company Limited(601727) by issuing shares from the controlling shareholder . Meanwhile, in order to improve the integration performance of this transaction, Suzhou Thvow Technology Co.Ltd(002564) plans to raise matching funds from the non-public offering of shares of Shanghai Lixin, the related party of the controlling shareholder. This reorganization is conducive to give full play to the synergy between the underlying assets and Suzhou Thvow Technology Co.Ltd(002564) and realize the business upgrading and transformation of listed companies. After the completion of this reorganization, Suzhou Thvow Technology Co.Ltd(002564) will focus on the two business segments of “new power design and system solutions, energy and chemical high-end equipment manufacturing and services”, form a “one body and two wings”, take intelligent technology and core equipment as the guide, and strive to become an internationally renowned and China’s first-class energy low-carbon and efficient utilization system solution service provider. Among them, the new power design and system solutions sector will continue to focus on China machine power, rely on its own professional qualification advantages and rich project experience, continue to strengthen its system solution ability in the field of new energy projects, give full play to the collaborative advantages of China machine power design ability and high-efficiency power station boiler equipment technology of Shanghai Boiler Plant, and layout in more application scenarios such as “light coal” complementarity and “fire storage” joint commissioning. The high-end equipment manufacturing and service sector of energy and chemical industry takes the above boiler plants as the main body, relies on the core technology and industry advantages, and cooperates with Suzhou Thvow Technology Co.Ltd(002564) and subordinate enterprises to provide technologically leading, low-carbon and efficient complete sets of energy, chemical and industrial equipment and comprehensive solutions for downstream power, chemical, thermal, steel, nonferrous metals, municipal environmental protection and other industries. Through this reorganization, Shanghai Electric Group Company Limited(601727) business assets have been optimized, which is conducive to actively respond to and grasp the challenges and opportunities of industrial structure adjustment under the strategic goal of “double carbon”.
At present, the company is carrying out due diligence, audit, evaluation and other work required by the reorganization according to the scheduled plan, striving to obtain the approval, approval and review of relevant regulatory authorities required by the reorganization as soon as possible, and will perform the internal decision-making process and subsequent information disclosure procedures in accordance with the requirements of relevant laws and regulations. At the same time, the company actively organizes technical and business exchanges between subordinate enterprises such as China machine power and Zhanghua machinery and shangguo plant, so as to enhance mutual understanding between enterprises of both sides, give full play to the advantages of different enterprises in different fields such as design qualification, process R & D and equipment manufacturing, and pave the way for further collaborative cooperation in the future. In order to ensure the expected results of this reorganization, the company is actively studying the implementation plans of the restructured company’s organizational structure, business cooperation, personnel exchange and capital plan, so as to ensure that the reorganization can be effectively implemented after being approved. The company will also actively track the industry trends, timely evaluate the impact of policy changes and Technological Development in the “double carbon” field, and adjust the company’s business strategy accordingly, so as to keep up with the industry trend, improve the company’s competitiveness, enable Suzhou Thvow Technology Co.Ltd(002564) to participate in market competition with a new look, stronger competitive advantages and comprehensive strength, and strive to create more value for investors.
2. Actively seize the new energy market
Seize the good opportunity of the new energy market, seize the market and form a sustainable profit model. Build a Suzhou Thvow Technology Co.Ltd(002564) regional and large-scale new energy strategy, and connect the national sustainable development strategy of “carbon peaking and carbon neutralization”.
3. Comprehensively improve standardized operation
Further strengthen system construction, standardize operation management, form the management concept of “management stresses system, work stresses process and work stresses principle”, run through a series of work of system construction, implementation supervision and system inspection, test the effectiveness of the system through practice, further strengthen the control of internal control, capital, business and information construction, and improve the standardized operation ability and level of listed companies.
4. Strengthen the construction of talent team
Guided by the employment standard of “loyalty first, attitude first and ability first”, identify the core employees in the enterprise, optimize the incentive mechanism, especially the incentive policy for technical talents, which should be implemented and effective, build a platform for those who want to work and support those who can work.
5. Improve safety management level
Strengthen the benchmarking work with Shanghai Electric Group Company Limited(601727) affiliated enterprises, promote the construction of “standardized team” and issue relevant standards. Further solidify the top-level design of the standardization of safety and environmental protection risk management and control in the field of engineering projects, continue to promote the implementation of the guide for graded management and control of safety and environmental risks of Shanghai Electric Group Company Limited(601727) engineering projects and the management measures for operation inspection of safety and environmental risk management and control standards of Shanghai Electric Group Company Limited(601727) engineering projects, and establish a benchmark project of safety production standardization of engineering construction projects.
Although 2021 has passed, Suzhou Thvow Technology Co.Ltd(002564) still has a long way to go. 2022 is a year of opportunities and challenges for Suzhou Thvow Technology Co.Ltd(002564) . The reform of the company is of great significance to further strengthen, optimize, expand and consolidate the business of listed companies, and promote the high-quality development of listed companies Suzhou Thvow Technology Co.Ltd(002564) all employees will work hard to achieve all work goals in 2022 and create a new situation of Suzhou Thvow Technology Co.Ltd(002564) steady development.
Suzhou Thvow Technology Co.Ltd(002564) General Manager: Yu Zhengqing March 25, 2022
