Securities code: Suzhou Veichi Electric Co.Ltd(688698) securities abbreviation: Suzhou Veichi Electric Co.Ltd(688698) announcement No.: 2022017
Suzhou Veichi Electric Co.Ltd(688698)
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 legal responsibility for the authenticity, accuracy and integrity of its contents according to law.
Important content tips: \uf020 profit distribution plan: the company will distribute a cash dividend of 1.76 yuan (including tax) for every 10 shares of A-Shares this year. No capital reserve shall be converted into share capital and no bonus shares shall be given. \uf020 this profit distribution is based on the total share capital registered on the date of equity distribution, and the specific date will be specified in the announcement of equity distribution implementation. \uf020 if the total share capital of the company changes before the equity registration date of equity distribution, it is proposed to maintain the total amount of distribution unchanged, adjust the distribution proportion per share accordingly, and make a separate announcement on the specific adjustment. \uf020 the proportion of cash dividends in this year is lower than 30%. Brief reasons: the company is in the growth stage and has a large capital demand. The retained undistributed profits of the company are planned to be used for R & D investment, business development and daily operation of working capital demand and profit distribution in the future years, so as to 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 Daxin Certified Public Accountants (special general partnership): as of December 31, 2021, the net profit of Suzhou Veichi Electric Co.Ltd(688698) (hereinafter referred to as “the company”) attributable to the shareholders of the listed company in 2021 was 12674494812 yuan. According to the resolution of the board of directors, the company plans to distribute profits based on the total share capital registered on the date of equity distribution in 2021. The profit distribution plan is as follows: the company plans to distribute a cash dividend of 1.76 yuan (including tax) for every 10 shares to all shareholders. As of December 31, 2021, the total share capital of the company is 180 million shares. Based on this calculation, the total cash dividend to be distributed is 3168000000 yuan (including tax). The amount of cash dividend distributed by the company in this year accounts for 25.00% of the net profit attributable to shareholders of listed companies in the consolidated statements of the company in 2021. In this year, no capital reserve will be converted into share capital and no bonus shares will be given. If the total share capital of the company changes in the remaining undistributed profits, the company plans to maintain the total amount of distribution unchanged and adjust the amount of distribution per share accordingly. In case of subsequent changes in the total share capital, the specific adjustment will be announced separately.
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
The company attaches importance to the reasonable return on investment to investors and formulates profit distribution policies in strict accordance with the requirements of relevant laws and regulations. According to the Suzhou Veichi Electric Co.Ltd(688698) articles of Association (hereinafter referred to as the “articles of association”) and the shareholder dividend return plan for the first three years after listing, the profit distributed by the company in cash every year shall not be less than 10% of the distributable profit realized in that year. Considering the company’s current industry development and the company’s future capital demand, the company proposes this profit distribution plan for 2021, which not only protects the legitimate rights and interests of investors, but also takes into account the company’s sustainable and stable development needs.
In 2021, the net profit attributable to the shareholders of the listed company was 12674494812 yuan, the accumulated undistributed profit of the parent company was 19613327157 yuan, and the total cash dividend to be distributed by the company was 3168000000 yuan, accounting for less than 30% of the net profit attributable to the shareholders of the listed company this year. The specific reasons are described below.
(I) industry situation and characteristics of listed companies
The company’s main business is the R & D, production and sales of products such as frequency converter, servo system and control system. With China’s manufacturing industry entering the era of intelligent manufacturing and industrial digitization, the industrial automation industry is in a stage of rapid development. Industrial automation products are widely used in many fields, with a wide variety of products, complex processes and strong professionalism. There are significant differences in products in different fields. Different customers in the same field have different requirements for similar industrial automation products, and the product design needs to be constantly updated according to the changes of customers’ process and technical requirements. Therefore, the company needs to maintain high R & D investment in order to continuously launch new products with stronger functions, better quality and higher efficiency.
(II) development stage and business model of listed companies
The company has been focusing on the field of electrical transmission and industrial control. It is an important supplier in China’s industrial automation industry. The company adopts the differentiation strategy of deep cultivation in the field of low-voltage frequency converter and subdivided industries. After years of experience in technology research and development and product promotion, the company has made in-depth layout in many subdivided fields such as lifting, mining equipment, rail transit, high-efficiency energy, intelligent equipment, plastic and photovoltaic water lifting, which can provide various system solutions or customized products for each subdivided industry.
At present, the company is in the stage of rapid development. With the expansion of the company’s operating income year by year, the company also needs to increase capital investment to improve product competitiveness and technical barriers and obtain more market share.
(III) profitability and capital demand of listed companies
In 2021, the company achieved an operating revenue of 818875 million yuan, an increase of 43.10% over the same period last year; The net profit attributable to the shareholders of the listed company was 1267449 million yuan, an increase of 44.76% over the same period last year. In recent years, the profitability of the company has been continuously improved and the overall financial situation has been improved. The company has retained sufficient funds to meet the needs of R & D investment, business development and working capital, and fully ensure the stable operation and healthy development of the company. (IV) reasons for the low level of cash dividends of listed companies, the exact purpose of retained undistributed profits and the expected income
Based on the consideration of rewarding shareholders and promoting the steady development of the company, the board of directors put forward the profit distribution plan for 2021. The undistributed profits of the company in 2021 will be transferred to the next year, which is planned to be used for R & D investment, business development and daily operation of working capital demand and profit distribution in subsequent years, so as to provide a reliable guarantee for the smooth implementation of the company’s medium and long-term development strategy and sustainable and healthy development. The relevant income level is affected by the macroeconomic situation, changes in asset quality, asset interest rate and other factors.
In the future, the company will always pay attention to the return of investors in the form of cash dividends, comprehensively consider various factors related to profit distribution in strict accordance with relevant laws and regulations and the articles of association, share the achievements of the company’s development with investors, and better safeguard the long-term interests of all shareholders.
3、 Decision making procedures performed by the company
(I) convening, deliberation and voting of the board meeting
The company held the 21st Meeting of the first board of directors on April 15, 2022, deliberated and passed the proposal on the company’s profit distribution plan in 2021, agreed to the profit distribution plan and submitted the plan to the company’s 2021 annual general meeting for deliberation.
(II) opinions of independent directors
All independent directors of the company believe that the profit distribution plan of the company in 2021 fully considers various factors such as the company’s profitability, cash flow status and capital demand, and takes into account the reasonable return of shareholders and the normal operation and sustainable development of the company; There are situations that are not conducive to the healthy and stable operation of the company and harm the interests of small and medium-sized shareholders.
Therefore, we unanimously agree to the proposal on the company’s profit distribution plan in 2021 and agree to submit the distribution plan to the company’s 2021 annual general meeting for deliberation.
All independent directors of the company express the following independent opinions on the rationality of the company’s cash dividend ratio of less than 30% in 2021: from the situation and characteristics of the company’s industry, the company’s main business is the R & D, production and sales of products such as frequency converter, servo system and control system. The company’s industrial automation industry is in a stage of rapid development. It is necessary to maintain high R & D investment in order to continuously launch products with stronger functions New products with better quality and higher efficiency.
From the company’s development stage and its own business model, the company is currently in a rapid development stage. With the expansion of the company’s operating income year by year, the company also needs to increase capital investment to improve product competitiveness and technical barriers, improve market share and make full preparations for future performance growth.
In recent years, the company’s profitability has been continuously improved and its overall financial situation has been improving. The retained undistributed profits of the company in 2021 will be used for the company’s product R & D, expanding production and operation capital demand and future annual profit distribution, providing reliable support for the company’s medium and long-term development strategy, which will help to ensure the long-term development of the company and will not infringe the interests of all shareholders, especially small and medium-sized shareholders.
(III) opinions of the board of supervisors
The company held the 15th meeting of the first session of the board of supervisors on April 15, 2021, which deliberated and approved the proposal on the company’s profit distribution plan for 2021. The board of supervisors considered that the company’s profit distribution plan for 2021 fully considered various factors such as the company’s profitability, cash flow status and capital demand, and there was no damage to the interests of the majority of shareholders, especially the interests of minority shareholders, which was in line with the current operation situation of the company, It is conducive to the sustainable, stable and healthy development of the company. Agree to this profit distribution plan and submit it to the 2021 annual general meeting of shareholders of the company for deliberation.
4、 Relevant risk tips
(I) this profit distribution plan combines the company’s development stage, future capital demand and other factors, and will not have an adverse impact on the company’s operating cash flow, nor will it affect the company’s normal operation and long-term development.
(II) the company’s 2021 profit distribution plan can only be implemented after being submitted to the company’s 2021 annual general meeting for deliberation and approval. Please pay attention to the investment risks.
It is hereby announced.
Suzhou Veichi Electric Co.Ltd(688698) board of directors April 15, 2022
