Securities code: Jilin Liyuan Precision Manufacturing Co.Ltd(002501) securities abbreviation: ST Liyuan Announcement No.: 2022020 Jilin Liyuan Precision Manufacturing Co.Ltd(002501) 2021 annual report summary
1、 Important note: the summary of this annual report comes from the full text of the annual report. In order to fully understand the company’s operating results, financial status and future development plan, investors should carefully read the full text of the annual report in the media designated by the CSRC. In addition to the following directors, other directors attended the meeting of the board of directors to consider the annual report in person
Name of director not present in person position of director not present in person reason for not attending the meeting name of the entrusted person
Tips on non-standard audit opinions □ applicable √ not applicable to the profit distribution plan of ordinary shares or the plan of converting accumulation fund into share capital in the reporting period considered by the board of directors □ applicable √ not applicable. The company plans not to distribute cash dividends, bonus shares or convert accumulation fund into share capital. Preferred stock profit distribution plan for the reporting period adopted by the board of directors □ applicable √ not applicable II. Basic information of the company 1. Company profile
Stock abbreviation ST Liyuan stock code Jilin Liyuan Precision Manufacturing Co.Ltd(002501)
Shenzhen Stock Exchange
Contact person and contact information secretary of the board of directors securities affairs representative
Name: Yu Haibin, Zhao Jinxin, Wang zhande
Office address: No. 5729, Xining Road, Longshan District, Liaoyuan City, Jilin Province
Fax 04373166501
Tel: 04373166501
E-mail [email protected]. [email protected].
2. Introduction to main business or products during the reporting period
(I) industry of the company during the reporting period
The company is mainly engaged in the manufacturing of aluminum profiles, deep-processing products and rail transit equipment parts, and its industry is aluminum profiles industry and rail transit equipment parts manufacturing industry. According to the industry classification guidelines for listed companies (revised in 2012) issued by the CSRC, the industry category of the company belongs to the CSRC is manufacturing industry, and the industry of the company belongs to non-ferrous metal smelting and rolling processing industry.
Business scope: production and sales of aluminum alloy precision machined parts and aluminum profile deep-processing parts; Aluminum alloy parts for petrochemical, electronic and electrical appliances, aviation, aerospace, navigation, automobile and car; R & D and manufacturing of aluminum alloy rail vehicles, car heads, car bodies and containers; Production and sales of aluminum alloy profiles, bars and pipes (including seamless pipes); Manufacturing all kinds of aluminum products and aluminum doors and windows; Production and sales of tempered glass, insulating glass, laminated glass, bulletproof glass and fireproof glass (physical process); Operate the export business of the self-produced products and related technologies of the enterprise (except for the commodities restricted or prohibited by the state); Operate the import and export business of raw and auxiliary materials, mechanical equipment, instruments and meters, spare parts and related technologies required for production and scientific research of the enterprise (except those limited or prohibited by the state); Operate the enterprise’s incoming processing and “three supplies and one compensation” business (the above business items: those prohibited by laws, regulations and decisions of the State Council shall not be operated; the licensed business items shall be operated with valid licenses or approval documents) (the projects that need to be approved according to law can only be operated with the approval of relevant departments)
China is a large country in aluminum industry, and its aluminum processing output and consumption have ranked first in the world for many consecutive years. According to the data of China nonferrous metal processing industry association, the national aluminum profile output was about 20.59 million tons in 2021, with a year-on-year increase of 2.3%, including 13.8 million tons of building aluminum profile, accounting for 67.02% of aluminum profile output, and 6.79 million tons of industrial aluminum profile, accounting for 32.98% of aluminum profile output.
1. Characteristics and uses of aluminum
Aluminum has many excellent characteristics, such as low density, bright surface, light weight, easy processing, high specific strength, good impact resistance, corrosion resistance, good conductivity, good formability, weldability, corrosion resistance, recyclability and so on. Although the discovery and production of aluminum are relatively late compared with steel and copper, it has been more and more widely used because of its rich reserves, simple smelting process and excellent performance. At present, aluminum has been widely used in building structure, transportation, photovoltaic, electronic power, mechanical equipment, durable consumption and other fields. It is not only the main basic material for manufacturing development, but also an important supporting material for high-tech development and national defense construction. It is the most widely used non-ferrous metal in the field of bulk commodities.
All kinds of aluminum products are widely used in various fields of the national economy: aluminum profiles for construction in infrastructure construction; Cecep Solar Energy Co.Ltd(000591) battery panel frame, support and other materials for photovoltaic power generation; Radiator made of aluminum profile and aluminum alloy for 5g base station; The structural parts of the front and body of the rail car in transportation, as well as the carrying parts such as seats and partition doors inside the train, container containers, automobile bumpers, automobile instrument panel beams and brackets, and battery shells of new energy electric vehicles; Shell and other aluminum alloy parts in the field of electronic and electrical products.
With its stable performance, light and beautiful appearance, environmental protection and safety, energy conservation and emission reduction, recyclability and other excellent properties, aluminum profile has been developed into more new application fields with the continuous progress of technology, and has become the metal material with the fastest demand growth in the process of economic development. In the past 20 years, the growth rate of China’s aluminum consumption has been higher than that of GDP. The per capita aluminum consumption level of developed countries has reached 39 kg / year, but it still keeps a good trend of increasing year by year. Aluminum has broad application and development prospects and is an important basic raw material and strategic material.
Aluminum has the characteristics of low density, easy recovery and good processing performance. While maintaining good performance, it has relatively low cost compared with precious metals such as copper, and its environmental protection performance and cost performance are outstanding. In recent years, the manufacturing of mechanical equipment components made of aluminum instead of steel and aluminum instead of copper has continued to grow.
In recent years, benefiting from China’s infrastructure investment and the rapid development of automobile, photovoltaic, rail transit, consumer electronics and appliances, the production and sales of China’s industrial aluminum profiles have maintained a rapid growth rate. However, compared with the demand ratio of more than 70% in European and American countries, China’s industrial aluminum profiles still have huge development space.
As a rapidly developing basic material, aluminum alloy can meet the needs of lightweight development of transportation, mechanical equipment, power engineering and other industries. It will play an important role in reducing carbon emissions, reducing energy consumption, promoting environmental protection and circular economy.
2. Industry specific business model
In terms of aluminum profile processing, the pricing mode of “aluminum ingot price + processing fee” is generally adopted by enterprises in the industry. This pricing mode determines that the profit of aluminum processing enterprises is relatively independent of the fluctuation of aluminum price. The aluminum industry chain is mainly composed of four parts: bauxite mining, alumina production, electrolytic aluminum production and aluminum processing and manufacturing. The pricing of the first three parts is directly related to the spot price of aluminum, but the prevailing product pricing mode in the aluminum processing industry is “aluminum ingot price + processing fee”. Therefore, the strength of technical equipment, downstream demand of products, industry competition structure and cost control ability are the decisive factors for its profit prospects. In terms of rail transit equipment manufacturing, it is mainly affected by the early progress of rail engineering, and the order cycle is long. Generally speaking, after negotiating the purchase intention of rail vehicles, it is necessary to wait for Party A to complete the preliminary preparation, design scheme, infrastructure construction and other links before starting the production of rail vehicle head and body structural parts, with a generally long interval.
3. Regional, cyclical and seasonal characteristics of the industry
(1) Obvious regional characteristics
After more than 20 years of rapid development, China’s aluminum profile industry has basically formed three industrial clusters in South China (Guangdong), East China (Jiangsu, Zhejiang and Shandong) and Northeast China (Liaoning), gathering more than 80% of China’s aluminum profile enterprises, forming a huge cluster effect. Among them, enterprises in Guangdong are the pioneers in China’s aluminum profile industry. Their products are mainly construction profiles, accounting for about 40% of the total output in China. They are the largest aluminum profile industry cluster in China. In Shandong, Liaoning, Jilin and other places, relevant enterprises have a high starting point and have industrial supporting advantages. They are the rising stars of China’s aluminum profile industry.
(2) Periodicity and seasonality of the industry
There are many downstream industries in the industrial aluminum profile industry, and there is no obvious periodicity and seasonality. Building aluminum profile has certain periodicity due to the cyclical fluctuation of downstream real estate and construction industry. At the same time, due to the influence of seasonal factors on the downstream real estate and construction industry, the production and sales of building aluminum profiles also have obvious seasonal characteristics in the first quarter. Generally, the output and sales volume in the first quarter are low. In terms of rail transit equipment manufacturing, to a certain extent, it is affected by the cycle of engineering construction industry, and the first half of the year is generally off-season.
4. Latest industry related policies and impacts
In recent years, relevant national authorities have issued a series of guiding policies to promote the development of aluminum alloy materials, especially the manufacturing industry of medium and high-end materials. The 14th five year plan for national economic and social development of the people’s Republic of China and the outline of long-term objectives for 2035, the classification of strategic emerging industries (2018), the development plan of new energy vehicle industry (20212035), energy saving and new energy vehicle technology roadmap 2.0 and a series of national policies and plans list aluminum alloy as a key development field, and highlight the lightweight and high-strength aluminum alloy of vehicles High performance aluminum profile and other development directions. With the implementation and promotion of China’s “the Belt and Road”, “new infrastructure” construction, “carbon peak, carbon neutral” and other strategic goals, modern aluminum processing enterprises that pursue high-tech integration, high brand value and high product added value will usher in development opportunities. (II) main businesses of the company during the reporting period
1. Basic information of the company’s main business
The company is mainly engaged in the R & D, production and sales of aluminum profiles, deep-processing products and rail transit equipment components. Products can be divided into industrial aluminum profiles, architectural aluminum profiles and various aluminum profile deep-processing products, rail transit equipment, etc. Among them, industrial aluminum profiles are customized according to customers’ specifications and quality standards. The products are mainly parts and components of terminal products such as transportation, Cecep Solar Energy Co.Ltd(000591) photovoltaic, electronic and electrical appliances, durable consumer goods, electromechanical power equipment and so on; Building aluminum profiles are mainly used to assemble door and window frames, curtain wall systems and interior decoration materials used in buildings. The company focuses on the production of high-grade building aluminum profiles with complex surface treatment; Aluminum profile deep-processing products are further processed into finished or semi-finished products for customers through cutting, CNC processing, welding, grinding and surface treatment according to customer needs; Rail transit equipment shall provide large parts of the front and body according to the requirements of customers.
(1) Procurement mode
The main raw materials of the company are aluminum ingots and aluminum rods. In terms of arranging production and procurement, the company adopts the method of “ordering production by sales and ordering by production”, and purchases from suppliers in the form of continuous batch according to customer orders and production and operation plans. The company’s procurement mode is as follows:
1) Purchase pricing method
The main raw materials of the company are aluminum ingots and aluminum rods. Aluminum ingots purchased by the company are mainly determined on the basis of authoritative non-ferrous metal market prices, including spot aluminum prices of non-ferrous metals in Shanghai Yangtze River, metal aluminum prices in Shanghai Futures Exchange, etc. When purchasing aluminum rods, the company will add part of the processing fee of aluminum rods as the purchase price of aluminum rods on the basis of the price of aluminum ingots.
The company’s aluminum ingot purchase pricing method: mainly based on the authoritative market prices such as the spot aluminum price of Shanghai Changjiang nonferrous metals or the standard aluminum price of Shanghai Futures Exchange, and considering the factors such as transportation cost, the aluminum ingot purchase price is adjusted slightly to determine the aluminum ingot purchase price. Generally, the contract stipulates that the settlement shall be based on the price on the day of payment or the average price over a period of time (no more than one month).
The purchase pricing method of aluminum rods of the company: the company purchases electrolytic aluminum from electrolytic aluminum manufacturers and entrusts them to process it into aluminum rods. The pricing method is “electrolytic aluminum price + processing fee”, in which the price of electrolytic aluminum is determined by referring to the monthly weighted average price of non-ferrous aluminum spot in Shanghai Yangtze River.
The purchase pricing of other raw and auxiliary materials is carried out through bidding, price comparison, selection of designated suppliers, etc.
2) Payment settlement method
The company’s aluminum profile processing business generally prepays the payment to the supplier some time before the purchase or on the order date. After the actual delivery, it is settled according to the actual arrival quantity and price. (2) Production mode
The company adopts the production mode of “setting production according to sales”. The company signs a framework agreement on product sales with downstream customers every year. When the agreement is implemented, the company will formulate a production plan and organize its implementation according to the orders confirmed by customers.
The company adopts different production methods for different types of products: (1) for general semi-finished products and common products, the company adopts mass production in order to improve production efficiency and reduce process cost; (2) According to the requirements of different customers for different components and specifications of products, the company adopts the mode of multi variety and small batch production to adapt to the rapid changes of the market and the personalized needs of customers.
(3) Sales model
The company’s products are sold by a combination of direct selling (directly sold by the company to end customers) and authorized distribution (sold by the company to dealers themselves). Among them, industrial materials and deep-processing materials are basically sold through direct sales, and some construction materials are also directly sold to downstream large door and window and curtain wall enterprises, such as Shenyang Yuanda. Direct selling is conducive to establishing long-term and stable customer channels, effectively improving product sales prices, effectively meeting customers’ personalized needs and maximizing benefits. Some building materials are sold to scattered end users through dealers. The distribution mode is conducive to give full play to the advantages of dealers’ local sales network, improve the capital operation efficiency of the company and maximize the scale. The cooperation content, technical parameters, delivery time, price and quality bid of rail transit equipment shall be determined through bidding and technical exchange
