ST Yabang issued an announcement on the evening of April 11. As of now, the company’s Lianyungang branch has completed preparations for safety, environmental protection, fire protection and other related aspects before resuming production in accordance with the production resumption approval requirements of the Lianyungang municipal government department. Production officially resumed on April 9; the company’s subsidiary Lianyungang Yabang Heating Co., Ltd. has officially resumed steam supply production.
It is understood that the total 2019 operating income of ST Yabang Lianyungang Branch and Lianyungang Yabang Heating Co., Ltd., which resumed production this time, accounted for ST Yabang’s 2019 audited business 31.78% of revenue. As of now, ST Yabang’s subsidiaries that are producing normally include Lianyungang Branch, Lianyungang Yabang Heating Co., Ltd., Lianyungang Seko Waste Disposal Co., Ltd., and Ningxia Yadong Chemical Co., Ltd. The total operating income in 2019 accounted for the company’s 2019 audited 53.75% of operating income.
Public information shows that ST Yabang is mainly engaged in the sales and service of dyes and dye intermediates. It is an expert factory in the production of anthraquinone structural dyes in China. Focusing on the fine chemical industry, the company has successively entered solvent dyes, pesticides and other industries through industrial mergers and acquisitions to meet multi-level customer needs and achieve diversified development of the company.
ST Yabang’s main production capacity has been suspended for environmental protection rectification in accordance with government requirements since April 28, 2018. In 2019, after the “March 21” major accident in Xiangshui, Yancheng, the chemical industry carried out in-depth safety and environmental protection improvement and rectification work. ST Yabang’s three main subsidiaries and branches that resumed production in October 2018 once again suspended production for safety and environmental protection rectification.
ST Yabang’s announcement on May 8, 2019 showed that in order to further actively respond to the government’s call for environmental protection and safe production, and at the same time combine its own safety hazard inspection needs, improve the level of safety and environmental protection management , to achieve green and healthy development of enterprises. After the company’s research and decision, the company’s Lianyungang Branch, its subsidiaries Jiangsu Huaer Chemical Co., Ltd., and Lianyungang Yabang Acid Manufacturing Co., Ltd. will completely suspend production from now on to carry out major inspections and rectifications of potential safety hazards. The above three companies carried out safety and environmental protection standards improvement and transformation in 2018, and completed the standard improvement and rectification on October 12, 2018, obtained government approval for production resumption, and resumed production.
ST Yabang introduced in the 2020 semi-annual report that on January 17, 2020, Lianyungang Branch and Jiangsu Huaer Chemical Co., Ltd. had completed rectification and passed Guannan County The company will conduct on-site inspections by six departments and apply for review by relevant municipal departments. The company will strictly follow the production resumption process requirements and resume production after obtaining approval from the municipal government. The company’s other suspended enterprises have completed their own rectifications and will submit applications for resumption of production to relevant departments as soon as possible to strive for an early resumption of production.
On the evening of January 6 this year, ST Yabang announced that on January 6, the company received the “About “Notice of Agreeing to the Resumption of Production of Jiangsu Huaer Chemical Co., Ltd.”, agreeing in principle to the resumption of production of Huaer Chemical Co., Ltd. The 2018 operating income of Jiangsu Huaer Chemical Co., Ltd., a subsidiary that resumed production, accounted for 35.60% of the company’s 2018 audited operating income; the 2019 operating income accounted for 27.05% of the company’s 2019 audited operating income.
ST Yabang stated in the latest announcement disclosed on the evening of April 11 that the company’s other suspended enterprises will also actively fulfill the production resumption approval procedures in accordance with government requirements and strive to resume production as soon as possible. . The specific time for resumption of production has not yet been determined, and there is a certain degree of uncertainty.
In fact, the suspension of production of subsidiaries and branches has had a large negative impact on ST Yabang’s operating performance. On January 25 this year, ST Yabang released a pre-loss announcement for 2020 annual performance. The company’s net profit is expected to be a loss of about 565 million yuan. Compared with the same period last year, the loss increased by 366 million yuan, and the loss increased by 184% year-on-year. Excluding non-net profit, the loss is expected to be about 570 million yuan. Compared with the same period last year, the loss increased by 358 million yuan, and the loss increased by 168% year-on-year.
According to reports, the main reasons affecting ST Yabang’s 2020 performance loss are: First, the company’s eight subsidiaries and branches have suspended production in accordance with the requirements of government departments since April 2018. Safety and environmental protection improvement and rectification were carried out. As of the end of the reporting period, the main production capacity was still in a state of suspension.
The above factors have caused the company’s operating rate to be seriously insufficient in the current period, sales revenue to have dropped, production shutdown expenses, equipment impairment, etc. to increase significantly, resulting in a sharp decline in the company’s performance in 2020. Second, based on the results of the company’s impairment test on the asset group related to goodwill at the end of the period, it is expected that the impairment loss of goodwill assets in this period will be approximately 128 million yuan. The specific data can only be confirmed after review by the audit agency and evaluation agency.
In order to resolve the major adverse impact on the company caused by the long-term suspension of production of subsidiaries and branches, ST Yabang is also actively thinking of ways. ST Yabang stated in its previously disclosed 2020 semi-annual report that the company’s main production capacity is concentrated in Lianyungang Chemical Industry Park, and long-term suspension of production will have a major adverse impact on the company.
In order to mitigate the risks brought by a single production base, the company sent a professional team to actively investigate the business environment at home and abroad and seek opportunities to develop a second production base. At the same time, the company also pays attention to external advantageous resources and plans to transfer production capacity, diversify risks and supplement performance through industrial mergers and acquisitions. </p
