Securities code: Kede Numerical Control Co.Ltd(688305) securities abbreviation: Kede Numerical Control Co.Ltd(688305) Announcement No.: 2022016 Kede Numerical Control Co.Ltd(688305)
Announcement on 2021 profit distribution plan
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 legal responsibility for the authenticity, accuracy and integrity of its contents according to law.
Important content tips:
Kede Numerical Control Co.Ltd(688305) (hereinafter referred to as "the company") plans not to distribute cash dividends, bonus shares or convert capital reserve into share capital in 2021. The undistributed profits will be used to promote the sustainable development of the company and meet the needs of daily production and operation and project investment of the company.
The profit distribution plan has been deliberated and approved at the 22nd Meeting of the second board of directors and the 21st Meeting of the second board of supervisors of the company. It can be implemented only after it is submitted to the 2021 annual general meeting of shareholders of the company for deliberation and approval.
As the company is in the development stage of rapid growth of business scale and orders and gradual expansion of production capacity, considering that the net operating cash flow of the company in 2021 is negative, combined with the current capital situation and the needs of actual operation and development of the company, according to the provisions of relevant laws and regulations and the articles of association, after careful research and discussion, the company proposes that the company will not carry out profit distribution in 2021.
1、 Contents of profit distribution plan
Audited by Lixin Certified Public Accountants (special general partnership), as of December 31, 2021, the company's profit available for distribution at the end of the period was 10425070368 yuan. Considering that the net operating cash flow of the company in 2021 is negative, and in combination with the current capital situation and the needs of the actual operation and development of the company, it is proposed that the company will not distribute cash dividends, bonus shares or convert capital reserve into share capital in 2021. The undistributed profits will be used to promote the sustainable development of the company and meet the needs of the company's daily production and operation and project investment.
This profit distribution plan needs to be submitted to the 2021 annual general meeting of shareholders of the company for deliberation.
2、 Reasons for no profit distribution in 2021
Audited by Lixin Certified Public Accountants (special general partnership), as of December 31, 2021, the company's profit available for distribution at the end of the period was 10425070368 yuan. Considering that the net operating cash flow of the company in 2021 is negative, combined with the current capital situation and the needs of actual operation and development of the company, it is proposed that the company will not carry out profit distribution in 2021. The specific reasons are as follows:
(I) industry situation and characteristics of the company
The company is a scientific and innovative enterprise engaged in the R & D, production, sales and service of five axis linkage CNC machine tools and their key functional components and high-end CNC systems. Five axis linkage numerical control technology is one of the important standards to measure the manufacturing capacity and technical level of complex and precision parts in a country. It is mainly used in key industries such as aviation, aerospace, nuclear, electronics, shipbuilding, weapons, energy, automobile, mold and cutting tools, especially aviation, aerospace and military industries. There is urgent demand for localization, the stock needs to be updated urgently and the market growth can be expected. At present, the localization rate of China's high-end CNC machine tools is less than 10%, and the market space for localization is large.
(II) development stage of the company and its own business model
The company has the core technology of independent research and development of five axis linkage CNC machine tools, high-grade CNC systems and key functional components, and has formed four general five axis technology platforms (vertical machining, horizontal machining, gantry and horizontal milling) and two special five axis technology platforms (blade machine and tool grinding). The company's five axis CNC machine tools have been widely used in aviation, aerospace, mechanical equipment, automobiles, military ships, nuclear power, molds, cutting tools and other fields.
At present, the company is in the stage of rapid development, subject to capacity constraints, and the growth of revenue scale is limited. In July 2021, the company successfully landed on the science and innovation board and expanded its production capacity to a certain extent by using the raised funds. The output in 2021 increased by 56.44% compared with the previous year. The company's main development objectives in the short term: first, rapidly expand production capacity to meet the demand for high-end CNC machine tools in the Chinese market; Second, continue to invest in R & D to maintain the market competitiveness and innovation of products.
(III) profitability and capital demand of the company
In 2021, the company achieved operating income of RMB 253588900, net profit attributable to shareholders of listed companies of RMB 728669 million, net profit attributable to shareholders of listed companies after deducting non recurring profits and losses of RMB 263151 million, gross profit margin of main business of 43.14%, and operating cash flow of RMB - 653373 million. In 2022, the company will continue to invest in R & D, maintain the market competitiveness and innovation of products, accelerate the construction of raised investment projects, increase output and quickly realize order delivery.
(IV) reasons why the company does not distribute profits
The company is in the development stage of rapid growth of business scale and orders and gradual expansion of production capacity. Considering that the net operating cash flow of the company in 2021 is negative, combined with the current capital situation and actual business development needs of the company, according to relevant laws and regulations and the articles of association, after careful research and discussion, it is proposed that the company will not carry out profit distribution in 2021.
(V) the exact purpose of retained undistributed profits and the estimated income of the company
The undistributed profits will be used to promote the sustainable development of the company and meet the needs of the company's daily production and operation and project investment.
3、 Decision making procedures performed by the company
(I) convening, deliberation and voting of the board meeting
The 22nd Meeting of the second board of directors held on April 7, 2022 deliberated and approved the proposal on the company's profit distribution plan for 2021. The board of directors deliberated and agreed that the company would not distribute cash dividends, bonus shares or convert capital reserve into share capital in 2021. The undistributed profits would be used to promote the sustainable development of the company and meet the needs of the company's daily production and operation and project investment, And agreed to submit the profit distribution plan to the 2021 annual general meeting of shareholders of the company for deliberation.
(II) opinions of independent directors
The company's profit distribution plan for 2021 fully considers the current development stage of the company, the current capital situation and the development needs of actual production and operation in the future, The relevant contents and decision-making procedures do not violate the relevant provisions of the guidelines for the supervision of listed companies No. 3 - cash dividends of listed companies (revised in 2022), the guidelines for the supervision of listed companies on the science and Innovation Board of Shanghai Stock Exchange No. 1 - standardized operation and the articles of association, which is conducive to the sustainable development of the company and does not damage the interests of the company and all shareholders, especially small and medium-sized shareholders. As an independent director of the company, we unanimously agree on the contents of the profit distribution plan for 2021 proposed by the company. (III) opinions of the board of supervisors
The company held the 21st Meeting of the second session of the board of supervisors on April 7, 2022, and deliberated and passed the proposal on the company's profit distribution plan for 2021. After deliberation, the board of supervisors believed that the company's profit distribution plan for 2021 fully considered the company's current capital situation and the needs of actual business development.
As the net operating cash flow of the company in 2021 is negative, and the company is in the development stage of rapid growth of business scale and orders and gradual expansion of production capacity, undistributed profits are conducive to promoting the sustainable development of the company and meeting the needs of daily production and operation and project investment of the company. The 2021 annual profit distribution plan of the company does not violate relevant laws and regulations and the relevant provisions of the articles of association, and does not damage the interests of the company and all shareholders, especially the minority shareholders. Therefore, it is agreed that the 2021 annual profit distribution plan of the company will not distribute cash dividends, bonus shares or increase share capital with capital reserve.
4、 Relevant risk tips
The formulation of this profit distribution plan fully considers the company's future capital needs and the needs of actual operation and development, which is conducive to the sustainable development of the company and will not have a significant impact on the company's operating cash flow, normal operation and long-term development.
This 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. Please invest rationally and pay attention to risks.
It is hereby announced.
Kede Numerical Control Co.Ltd(688305) board of directors April 11, 2022
