东岳集团2023年报

CONTENTS CHAIRMAN’S STATEMENT 9MANAGEMENT DISCUSSION AND ANALYSIS 18DIRECTORS’AND SENIOR MANAGEMENT’S PROFILE 24REPORT OF THE DIRECTORS CORPORATE GOVERNANCE REPORTS ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT INDEPENDENT AUDITOR’S REPORT 131 CONSOLIDATED STATEMENT OF PROFIT OR LOSS ANDOTHER COMPREHENSIVE INCOME 140CONSOLIDATED STATEMENT OF FINANCIAL POSITION CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 142 CONSOLIDATED STATEMENT OF CASH FLOWS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 146 264CORPORATE INFORMATION CHAIRMAN’S STATEMENT ZHANG JIANHONGChairman 2023 2023 is a challenging year for the industry with significant changes inthe operating environment. Due to the rapid growth in productioncapacity and the weaker-than-expected downstream demand, theprices of various major fluorosilicon chemical products recorded steepdeclines, resulting in a less optimistic market view. Facing such marketdownturn, the Group fully utilized its operating advantage and quicklyadjusted its business strategy to cope with the changes. As a result,amid severe market volatility, the Group maintained stable operationand strong competitiveness in the industry. CHAIRMAN’S STATEMENT RESULTS REVIEW I.Prudent Operation amid Market Changes During the period under review, due to significant marketchanges the prices of various fluorosilicon chemical productsrecorded a substantial decline, resulting in a profit marginsqueeze. In response to these changes, the Group’smanagement quickly formulated business strategies to maintainprudent operations, reinforce“internal strength”, reduce costsand explore potential developments. The Group’s economies ofscale, advanced technology, well-established production chainand outstanding management helped the Group maintainstrong competitiveness in the industry. During the year, despitesevere market pressure, the Group’s production remainedstable. Some major products achieved growth in bothproduction and sales volume to help uplift the Group’s marketshare. During the period under review, although the Grouprecorded a significant decline on revenue and profit due tonegative market factors, the Group’s business strategy of“prudent operation for sustainable development”could helpthe Group weather the industry downturn and sufficientlyprepare the Group for the potential opportunities upon industryrecovery in the future. CHAIRMAN’S STATEMENT II.Seizing market opportunities to cope with industrydownturn During the year, despite the sluggish downstream demand,some of the Group’s major products still recorded an increase insales volume, thanks to the Group’s acute market sense, whichenabled the Group to adjust its strategies quick enough to copewith the changes in business environment. During the periodunder review, some products of the Group recorded significantchanges in supply and demand. Therefore, in addition to theexisting customers and markets, the Group proactively explorednew breakthrough and growth potential by strengthening thedevelopment and marketing of other application markets.Through these efforts, more than 100 new market users weredeveloped and some product sales volume even reached recordhigh. Pioneering with proactive sales strategy enabled theGroup to surpass all competitions and further uplift the marketshare of the Group’s products. III.Remarkable achievement in technological innovation 101148816202222117127935,099,0006.45% Despite the substantial decline on the financial performance forthe year, the Group continued to base on the fluorosiliconchemical industry chain as the foundation and maintained itsinvestment in research and development. During the year, theGroup had 101 new product grades added with a batch of newhigh-end materials entering into the market as trial samples orat the initial stage with small supply, which contributed as afoundation for the Group to improve its industrial strength andcompetitive edge. In addition, the completion of 148 projects inrelation to new renovation and expansion, energy saving andemissions reduction, automation upgrade and qualityenhancement, coupled with the achievement on technologicalbreakthroughs, contributed to cost reduction and efficiencyimprovement of the Group. Besides, 81 new patents wereauthorized. At present, the Group has a total of 620 patents, 22standards were published, including 2 national standards, 2industry standards, 1 local standard and 17 group standards. Todate, a total of 127 various standards were published by theGroup. The Group’s R&D expense during the period underreview was approximately RMB935,099,000, accounting for6.45% of the revenue. CHAIRMAN’S STATEMENT IV.Safeguarding stable operation by safe and environmental-friendly production A The Group has always committed to high standards ofenvironmental-friendly production to ensure stable operation.During the year, the Group further enhanced its managementsystem for safe and environmental-friendly production, andstrengthened the obj