The content of Dashengda (603687)’s 2020 semi-annual board of directors’ operating review is as follows:
1. Discussion and analysis of operating conditions
In the first half of 2020, A sudden new coronavirus epidemic has caused an unprecedented impact on our country's economy. Under the strong leadership of the Party Central Committee, although my country's COVID-19 epidemic has recurred in some areas, it has been generally brought under control, and the focus has gradually shifted to economic construction. The economy is also obviously in the process of recovery, and is stable and improving. The basic pattern has not changed.
Facing the changes in the international and domestic economic environment brought about by the COVID-19 epidemic, all employees of the company, under the leadership of the board of directors and management, are united to overcome the difficulties and continue to focus on the main business of packaging. , to further promote the transformation and upgrading of enterprises. In the first half of 2020, the company's operating income was 574,837,097.79 yuan, a year-on-year decrease of 5.70%; the net profit attributable to shareholders of listed companies was 102,978,665.43 yuan, a year-on-year increase of 42.28%. During the reporting period, the company achieved steady recovery and stability run. Throughout the first half of 2020, we mainly did the following work:
(1) Winning the battle against the epidemic and realizing the safe and orderly resumption of production of enterprises
In the first half of 2020, in the face of In response to the sudden COVID-19 epidemic, the company has demonstrated its ability to respond quickly to emergencies, its good management and control capabilities to ensure safe and stable production operations, and its strong adaptability to adapt to rapid changes in market and social needs. The company has taken timely and effective prevention and control measures, and none of its employees has been infected, ensuring the safe and stable operation of production. In February, when the epidemic was most severely affected, the company actively responded to the government's call and resumed work ahead of schedule to produce packaging for medical supplies in response to epidemic prevention needs, making every effort to meet the production needs of epidemic prevention and control supplies and important customers. Regarding the investment projects in Hanchuan, Hubei, the company has taken strict protective measures and exerted a strict, precise, detailed and practical management style to ensure the safety of all employees and the smooth resumption of work on the projects invested with raised funds.
(2) Embrace the digital economy and promote enterprise digitalization, platformization, and intelligence
In the first half of 2020, the company continued to promote lean digitalization projects and ERP upgrade projects to promote enterprise digitalization, Platform-based and intelligent. At present, the IoT systems introduced by the company in Zhiwang, Taiwan Trade, and Nianli factories are in normal operation and are being implemented simultaneously in various factories. The company uses big data to promote new management and manage enterprises with modern and technological ideas. With the introduction of modern and digital technology, the past extensive management thinking that relied on experience, feelings, and moods has been transformed. Based on data, we can achieve standardized handling, well-founded management, and confident decision-making, with a modern and technological approach. To manage enterprises, improve production capacity, improve efficiency, and increase per capita output.
(3) Issuing the company’s convertible bonds to provide sufficient cash flow for the company’s subsequent development
On April 30, 2020, the company’s application for the public issuance of convertible bonds was approved by the China Securities Regulatory Commission. It was approved by the review committee and listed on the Shanghai Stock Exchange on July 23. The issuance of convertible bonds raised about 550 million yuan for the company. On the one hand, this fund can promote the construction of the company's investment projects and accelerate the company's regional layout and transformation and upgrading; on the other hand, it effectively supplements the company's cash flow. , laying a cash foundation for the company's subsequent development and strategic layout.
(4) Strengthen talent cultivation and improve system construction
The company continues to improve the company's human resources system by establishing a multi-channel talent introduction mechanism and improving employees' self-improvement mechanism. system to meet the company's demand for human resources for its leap-forward development. Increase efforts in talent cultivation and provide targeted and professional training based on the company's strategy. At the same time, the company's human resources management department continues to optimize the human resources management system and processes on the basis of full consideration of internal development and external competition, and sort out the relationship between the human resources lines of the group headquarters and each branch company. In addition, the company strengthens employee care and party building culture to enhance employee happiness.
2. Possible risks
1. Risk of raw material price fluctuations
The company’s main raw material for producing corrugated boxes and cardboard is base paper. During the reporting period, The cost of inner base paper accounts for more than 70% of the cost of corrugated boxes and is the company's most important operating cost. Changes in base paper prices will have a greater impact on the company's operating results. As a large number of small and medium-sized paper mills are forced to limit production or shut down under environmental pressure, and the country further restricts the import of waste paper, the supply side of raw paper will continue to be under tremendous pressure, the relationship between supply and demand may still be imbalanced, and the price of raw paper may still rise. If the price of base paper fluctuates significantly in the future, it will put certain pressure on the company's base paper procurement costs, which may in turn have a negative impact on the company's production, operations and cash flow.
2. Management risks caused by the company’s rapid growth
According to the company’s national regional development strategy, in recent years, the company has established offices in Hangzhou, Zhejiang, Meishan, Sichuan, Yancheng, Jiangsu, Suzhou, Jiangsu, Xinjiang and other places have a number of large-scale comprehensive packaging factories that have been put into operation. With the expansion of the company's business and scale, especially after the implementation of the investment project with raised funds, the company will face challenges in management model, talent reserve, market development and corporate culture integration caused by cross-regional operations. If the company's management level and talent reserve cannot meet the needs of the rapid expansion of the company's scale, and the organizational model and management system fail to be adjusted and improved in time with the expansion of the company's scale, the company's market competitiveness may be weakened.
3. Risks of increased market competition
The entry threshold for primary corrugated box manufacturers is low, and the downstream industry is wide. A large number of small carton factories rely on local demand to survive, and the industry There are many small and medium-sized carton factories at the bottom, forming an extremely fragmented industry structure. Judging from the composition of manufacturers in the corrugated box industry, the "small, scattered, and chaotic" situation has existed for a long time, with low industry concentration, insufficient integration, and disorderly competition. The products of low-end corrugated carton manufacturers in the industry are seriously homogeneous, and the price competition in the low-end corrugated carton market is fierce. The company mainly operates mid-to-high-end corrugated boxes for leading companies in the food and beverage, home appliance, daily chemical and other industries. Mid-to-high-end corrugated box companies with a certain scale and strength in the industry have one of their main goals of further expanding their production and sales scale and increasing their market share. , the market competition is fierce. In addition, under the trend of consumption upgrading, customers have put forward higher requirements for the order response ability, carton performance and appearance of supporting carton manufacturers, and competition in the mid-to-high-end carton market continues to intensify. In summary, increased market competition will bring certain risks to the company's future production and operations. If the company cannot effectively improve its competitiveness, it will lead to a decline in future profitability.
4. Risk of macroeconomic cycle fluctuations
The company is in the packaging industry, and the downstream of the packaging industry involves all walks of life in the national economy, including electronic information, microcomputer manufacturing, Communications, machinery and electrical equipment manufacturing, automobile and auto parts manufacturing, food and beverage, furniture and daily chemical industry
etc. Therefore, the supply and demand situation of the packaging industry is closely related to the demand situation of downstream industries. Affected by the national macroeconomic development situation and the growth rate of the national economy, the business volume of enterprises in many downstream industries of the company shows a certain degree of volatility, which may have an impact on the company. Adversely affecting demand for corrugated packaging products and services.
5. Risks of the new coronavirus epidemic
3. Analysis of core competitiveness during the reporting period
(1) Quality brand and listed company platform advantages
Since its establishment more than 10 years ago, the company has focused on the development of the corrugated packaging industry. It has formed a complete product quality system covering quality, environmental protection, safety and other aspects, and has won a series of honors. The company is one of the "China's leading packaging enterprises" and "China's paper packaging development and production base" recognized by the China Packaging Federation. It has been selected as one of the "China's Top 100 Packaging Enterprises" and "China's Top 50 Paper Packaging Enterprises" by the China Packaging Federation. ", the "Shengda" trademark is a well-known trademark in China and a famous brand product in Zhejiang Province. The company's brand has become one of the important advantages in acquiring customer resources.
(2) Customer brand and resource advantages
Customer value determines supplier value. The brand and competitiveness of companies in the paper packaging industry depend more on the brand awareness and market of corporate customers. status and having a group of high-quality customers is one of the company's most important advantages.
The company's long-term cooperative customers include beer, beverages, tobacco, electronics, home appliances, furniture, machinery, express logistics, chemicals, services and other industries with high concentration. The cooperative enterprises include Panasonic, Samsung Electronics, Bosch (BOSCH), Wahaha, Nongfu Shanquan, China Resources Beer, Robam Electric Co., Ltd. (002508), Supor (002032), SF Express and other Fortune 500 companies, China Top 500 companies and leading companies in specific industries.
The above-mentioned brand customer resource advantages provide guarantee for the company to continuously develop new customers and the company's sales scale to continue to increase. On the one hand, the company leverages the influence of brand customers in various industries to further expand and strengthen the company's brand advantages and develop more high-quality customers. On the other hand, most brand customers have large packaging needs and have strict evaluation standards for carton suppliers. They tend to maintain long-term and stable cooperative relationships with qualified carton suppliers. The company's provision of packaging service orders is conducive to maintaining the continuity and stability of income.
(3) Lean production and intelligent advantages
Over the years, the company has developed a strict lean production management system, which controls the cardboard production lines and printing systems of each factory and workshop. Standardized management of lines, molding workshops, warehousing and logistics, etc., quantitative assessment of equipment utilization, per capita production and efficiency and other indicators, horizontal comparison of indicators of each factory and workshop every month, and maximization of efficiency through continuous efficiency optimization. Minimizing losses highlights the company's cost competitiveness.
In order to promote lean production and the construction of intelligent factories, the company has jointly developed an Internet of Things system for paper packaging production lines since 2015, relying on the ERP platform to build a resource and environment-based basic database, covering the main production processes. Collect data in real time and feed it back to the production control end, which can finely coordinate the entire process from order placement, production planning, material deployment, process management, equipment management, delivery management, logistics distribution to receipt confirmation. The company's main printing equipment and back-end equipment are configured according to the requirements of "integration of informatization and informatization", with a high degree of automation, and the relevant data interfaces meet the requirements of the Internet of Things. The coverage of the Internet of Things not only improves the quality and efficiency of production, but also achieves faster order response through reasonable scheduling and lean production, making customer-centered flexible production possible.
(4) Advantages of advanced production technology and technology research and development
In terms of production technology, the company has the world's most advanced German BHS2800 high-speed corrugated cardboard production line, which integrates printing, slotting, and forming. , the world's most advanced Swedish EMBA carton linkage line that integrates packaging and packaging. It has the world's most advanced printing machines and post-printing processing equipment, and masters multiple printing processes such as watermarking, offset printing, and pre-printing. It can meet the needs of all types of cartons, color boxes, Production and processing of paper pallets, etc.
The company is a national high-tech enterprise and the "China Paper Products R&D Center" awarded by the China Packaging Federation. It has a provincial enterprise technology center, a provincial industrial design center, a provincial key enterprise research institute, a provincial Level enterprise design institute. The company's affiliated technology research and development center has domestically advanced standardized laboratories, a batch of domestically advanced paper packaging R&D and testing equipment, and is equipped with an experienced and professional R&D team. In recent years, the company has achieved fruitful research and development results. As of the end of the reporting period, it had obtained 14 invention patents, 110 utility model patents, 1 appearance patent and 13 software copyrights.
(5) Management team and talent advantages
The company has brought together a series of talents in carton manufacturing, printing technology, and quality control. The company's management team is stable. Most of the key management personnel, core technical personnel and main business backbones have served in the company for more than 10 years. They have obvious advantages in carton technology, industry experience and management experience. Most of the company's key management personnel, core technical personnel, and business backbones hold equity in the company, which is in line with the company's strategic planning and business development goals. The company has established a good talent training mechanism, and its experienced management team and outstanding talents have laid a solid foundation for the company's sustained and stable development.