Recently, Lier Chemical Co., Ltd. (hereinafter referred to as "Lier Chemical") held the 2023 annual results briefing, the company's chairman Yin Yingsui, independent director Ma Yi, deputy general manager/secretary of the board of directors Liu Jun, financial director/financial director Yan Xuan attended the meeting, and replied to the questions of investors, the details of the Q&A are as follows:
1. At present, the company has 7 production bases such as Mianyang and Guang'an, in addition to Nantong, Yueyang and Hebi, how does the company consider the differentiation and positioning of the 4 bases in Mianyang, Guang'an, Jingzhou and Jinshi?
Answer: The company will carry out product layout according to the resource matching situation of each base, so as to make the products have strong competitiveness.
2. Why does the company not distribute profits this year?
A: Since 2023, the inventory of major agrochemical enterprises in the world has been high, and the new production capacity of the industry has been gradually released, resulting in extremely fierce market competition, especially the significant decline in the price of glufosinate-ammonium of the company's main product, which has brought greater pressure to the company's operating performance and reduced the net operating cash flow accordingly. At the same time, according to the development strategic plan, some of the company's projects also need a certain amount of capital expenditure and a corresponding increase in working capital, in the face of the uncertainty brought about by fierce market competition, in order to maintain a stable financial structure, the company needs to reserve a certain amount of funds. In addition, the company's total accumulated cash dividends from 2021 to 2023 are 664,490,114.00 yuan, accounting for 126.86% of the distributable profit for the three years. Therefore, the company will not pay cash dividends this year to support the company's various business development and provide financial guarantee for the company's long-term and steady development.
3. Two years ago, the company's executives reduced their holdings of the company at a high level. At a time when the company's stock price is at a low level, why are executives reluctant to increase their stake in the company to boost investor confidence? Does it mean that executives lack confidence in the company's future?
A: Thank you for your suggestion, we will give positive feedback to the company, at the same time, the company's management is still full of confidence in the company's development prospects, and is making every effort to do a good job in operation to ensure the company's sustainable and stable development.
4. In recent years, corporate social responsibility and ESG issues have attracted much attention, and it was found that our company's performance in the industry is average, and the ESG rating of SynTao Green Finance is B, which is not very ideal. How do companies view their current ESG rating performance and do they have plans to take concrete steps to improve their ESG performance, especially in terms of corporate social responsibility.
A: The company actively learns and pays attention to the level and effectiveness of ESG governance, and attaches great importance to corporate governance, environmental protection and social responsibility. The company will also continue to improve its level of environmental protection, social responsibility and corporate governance in combination with its own development. Thank you for your interest in the company.
5. What sub-projects will be completed and put into use this year, and what products can be produced on a large scale? In addition, is the L-homoserine and glufosinate-ammonium construction projects in Guang'an base still progressing in an orderly manner?
A: The important projects to be completed by the company in 2024 have been disclosed in the "2024 business plan" of the 2023 annual report, and in addition, the company's Guang'an base has not yet carried out L-homoserine and glufosinate-ammonium projects.
6. What is the number of employees in the company?What is the total amount of employee compensation (including bonuses) in 2023?Is the management's income linked to performance, and what is the management's income in 2022 and 2023?
A: As of the end of 2023, the company has 6,435 employees. The income of the company's management is directly linked to the company's performance, so the management's remuneration in 2023 is significantly lower than that in 2022, and the relevant information has been disclosed in the 2022 and 2023 annual reports.
7. In the 2023 annual report, the amount of long-term loans has increased significantly compared with the previous year, and it is not stated in the financial notes, please explain the reasons. 2. In the income statement of the 2023 annual report, the total income of taxes and surcharges is much smaller than that in 2022, and the taxes and surcharges are larger than those in 2022, why?
Answer: Regarding the increase in the amount of long-term borrowings at the end of 2023, it is mainly due to the increase in fixed asset loans and medium and long-term working capital loans for the construction of some base projects in that year; the company's taxes and surcharges in 2023 increased slightly by 5.9% year-on-year, mainly due to the increase in the company's tax payment of relevant real estate and other taxes in accordance with the provisions of the tax law with the successive commissioning of some bases;
8. How is the company's private placement?
Answer: Affected by matters related to the equity reform of the controlling shareholder, the company's issuance of shares to specific targets is still in the stage of pending the approval procedure of state-owned shareholders.
9. The company's 23-year-old largest customer's purchase amount and purchase volume have decreased significantly, is it due to the customer's increase in the purchase of your company's other competitors?
A: The customer's purchase amount will be affected by various factors such as purchase quantity and price.
10. The market share of the main products is not disclosed in the 2023 annual report, but it has been disclosed in previous years, can you disclose the latest market share of the company's main products?
Answer: The company has further increased the market share of its main products compared with previous years by increasing marketing efforts and actively exploring customers.
11. Does the company consider repurchasing shares?
A: As a state-owned enterprise, the company needs to go through a certain approval process for measures such as buyback. In addition, the rise and fall of the stock price and the company's operating performance is closely related, at present, affected by unfavorable factors such as intensified market competition, the company's performance has declined to a certain extent, the company's management is actively working to do a good job in operation, we believe that once the company's performance has improved, the capital market will also have a positive response.
12. How will the company face the further intensification of market competition?
Answer: The company actively responds to the current market competition, maximizes the competitiveness of the company's glufosinate-ammonium products, and at the same time, accelerates the construction progress and market layout of the glufosinate-ammonium project.
13. How much will the sales volume in 2023 increase compared with 2022?How much will the average price of the main products decrease compared with 2022?What is the market occupancy rate of the company's main products?
Answer: The production, sales and selling price of different products are important trade secrets of the company, which is inconvenient to disclose, please understand. At the same time, the market share of the company's main products increased in 23 compared with 22.
14. When will the 10,000-ton glufosinate-ammonium project in Jingzhou Sancaitang North District and the Lier Bio-Homoserine Project in Jinshi City be completed and put into operation this year?
A: According to the company's 2024 work plan, Jingzhou Sancaitang's 10,000 tons/year glufosinate-ammonium project and Lier Bio's homoserine project are expected to be completed in the second half of this year, and the company is making full progress.
15. The company's products are exported to the United States for a large proportion, how does the company manage the risk of Sino-US trade disputes on the company's operation?
A: While doing a good job in the U.S. market, the company is also actively developing other markets.
16. The company has invested a huge amount of production capacity under construction, if it cannot be successfully financed, can the company's existing funds meet the needs of the production capacity under construction? In the current form, has the return on investment of the relevant production capacity under construction been expected to have undergone significant changes? According to the current price, what is the expected rate of return on the relevant production capacity under construction? How long is the return on investment cycle expected to take?
At the same time, the company's overall financial position is good and the asset-liability ratio is not high, and the reputation of domestic banks and financial institutions is good, and there is sufficient credit line, which can ensure the smooth implementation of the company's strategic projects.
17. In the context of the company's overcapacity faced by the entire industry last year, did the company's independent directors play a professional supervisory role and conducted an in-depth and independent feasibility assessment of the rationality of the new projects?
Answer: In 2023, I fully understood the company's production and operation through on-site investigation, review of materials, participation in meetings, video or telephone reports, etc., and carried out key supervision and verification of the construction of major projects. Before making a resolution on the major matters to be decided by the company, I carefully reviewed the information provided by the company in advance, inquired with the relevant personnel of the company to understand the specific situation, exercised voting rights independently, objectively and prudently, actively and effectively performed the duties of an independent director, and conscientiously safeguarded the interests of the company and all shareholders.
18. The price of glufosinate-ammonium has fallen below 60,000 yuan, is the company the leader of this round of price war, through price reduction to clear the backward production capacity of the market, or passively follow competitors to reduce prices? At the same time, according to the data, the overall export of pesticide products in January and February this year increased by more than 10% compared with the same period last year, is the company's export situation also consistent with big data? Is the export price higher than the price of domestic products?
Answer: The company actively responds to the current market competition, maximizes the competitiveness of the company's glufosinate-ammonium products, and at the same time, comprehensively does a good job in marketing, deeply strengthens cooperation with large customers, actively expands customer resources, and continues to expand market share.
19. What is the company's current production capacity of glufosinate-ammonium and refined glufosinate-ammonium, and what do you think about the continuous decline in the price of glufosinate-ammonium in the near future?
Answer: glufosinate ammonium and refined glufosinate ammonium is the company's core products, affected by the competition is still severe, the price of glufosinate ammonium has declined compared with the beginning of the year, but it is expected that in the future, after a certain period of capacity optimization and integration pains, the development space of leading enterprises with competitive advantages will be further improved. ............................................................ Please indicate in the following format for reprinting: Article source: Company announcementEditor: Peng Leyao Review: Zhai Yiting Producer: Zheng Hongyan
