I. Discussion and analysis of the operating situation
In the first half of this year, in the face of the sudden epidemic of the new Crown Pneumonia, the company has always maintained its strength, grasped the opportunity to take an active role in the strict and strict grasp of the epidemic prevention and control, and methodically push forward to the resumption of work to achieve the production, the development and implementation of the company's "strive for excellence" action plan, the formation of an atmosphere among the member companies to catch up with us and strive for excellence, and the main operating indicators to reach the first. The company has formulated and implemented the action program of "striving for excellence", and formed a good atmosphere among member companies to catch up with each other and strive to be the first, and the main business indicators have reached and exceeded the expected level.
During the reporting period, the company accomplished operating revenue of 178.717 billion yuan, up 11.62% year-on-year; total profit of 2.806 billion yuan, up 0.26% year-on-year; net profit attributable to motherland of 1.616 billion yuan, up 0.91% year-on-year; and net profit attributable to motherland of 1.367 billion yuan after deduction of non-compliance, up 3.09% year-on-year.
The highlights of the work mainly include the following aspects:
(a) Epidemic prevention and control to play a role. The company's health care system insisted on fighting at the front line of epidemic prevention and control, and its three hospitals*** selected and sent 10 medical personnel to assist Wuhan and made a safe triumph. Materiel International and Materiel Yunshang urgently deployed epidemic prevention materials such as masks and protective clothing, and provided material protection to the best of their ability. Mutual Assets Metals, Mutual Assets Yuan Tong, Mutual Assets Logistics, Zhongda Industry, Mutual Assets Ronglei, etc. exerted their supply chain and professional advantages, mobilized resources such as steel, cables and automobiles as quickly as possible, and organized logistic channels to contribute to the national fight against the epidemic. During the epidemic, MSS Changle made every effort to ensure the supply of vegetables to the Group's headquarter and relevant member companies. The relevant member companies effectively implemented the policy of reducing and exempting operating rent, reducing and exempting a total of 656 tenants, and reducing and exempting 18,749,000 yuan of rent.
(2) seize the opportunity to achieve significant results. In the face of increased instability in the supply chain, shrinking domestic demand, overseas markets, part of the commercial activities of the stagnation of the predicament, the members of the company seize the market opportunities, turning crisis into opportunity, proactive stabilization of the business, expanding the market, grasp the order, and achieved significant results. 1-6 months the group realized the total amount of imports and exports (including re-exports) 4.576 billion U.S. dollars, up 26.26% year-on-year. The Group grasped the opportunities of new infrastructure, big infrastructure and catching up with the project schedule after the resumption of construction, and increased the docking efforts with large-scale central enterprises and state-owned enterprises, winning and shortlisting 71 distribution and distribution projects*** from January to June, with a combined total of more than 2 million tons of steel and cement, an increase of nearly double the year-on-year growth rate. Materiel International seized the opportunity of domestic and international demand and price inversion to develop the steel import business, while non-ferrous metals and other cultivated varieties also achieved substantial growth. Materiel Cloud Business seized the opportunity of the outbreak of "house economy" during the epidemic, utilized "live broadcasting with goods" to enhance the operation capability of the online platform, and took the lead in promoting the signing of a strategic cooperation agreement with the Moutai Group. Material Logistics built nine "golden channels of logistics" to effectively solve the problems of delayed harbor, delayed transportation and stormy storage. The Tianshan Aluminum Industry invested by the Toonan Fund successfully borrowed the shell of New Territories Pump Industry (002532) to realize reorganization and listing. The finance company made full use of the window period of interest rate downturn, actively integrated all kinds of financial resources, and made every effort to ensure the supply of funds. In the first half of the year, the Group issued four issues of ultra-short-term financing with a coupon rate of 1.8%-2.45%, totaling 5.5 billion yuan, effectively reducing the cost of funds for member companies. CUIPPC seized the market of Sinopec, China Metallurgy, provincial power grids and other large customers, and the single-month sales of cables in April reached a record high of 367 million yuan.
(C) Mode of innovation to achieve results. The current combination of escorting the steady development of the main industry, in order to avoid the risk of commodity price fluctuations at the same time, effectively guarantee the stable development of the operation. The company has deepened its high value-added site delivery model, with business volume increasing by about 64% year-on-year. Material Chemical optimized its vertical supply chain business model, newly landed Huaxin polyester project, and Zhoushan Lianghai soybean crushing project significantly improved its efficiency. The optimization of shareholding structure of Zhejiang Oil Center was basically completed, and the platform effect continued to appear, with 1,620 member enterprises, and the trade volume and trade value increased by 63.82% and 32.31% respectively from January to June. CU Futures vigorously expanded its institutional clients, with the margin scale increasing by about 65% year-on-year. The finance company established the innovative "Debt Loan Pass" product, providing 3.2 billion yuan of low-interest rate capital support for supply chain business.
(4) Key projects are being pushed forward. The company has signed a contract with Haiyan Economic Development Zone, Zhejiang Province for a public thermal power project and a biomass project in Jinhua's Jinyi Metropolitan New Area, and its subsidiary, Xinjia Aisi Thermal Power, has won the Second Prize for Scientific and Technological Progress in Zhejiang Province. CUIPPC Cable Intelligent Manufacturing Base Project is the first major project resumed in Deqing, which has obtained 460 mu of land certificates and construction planning permits, and completed the pile foundation construction of auxiliary rooms for special cable workshop. All 32 owned shield machines of the Property Investment and Leasing Urban Rail Transit Integration Service Project have been signed with project users, and a total of 19 operating lease projects have been realized. CUHK Jinshi successfully acquired the top-ranking pension apartment Yongbaihui, adding weight to the overall layout of the pension business in Hangzhou. Property Health Jinhua People's Hospital held the opening ceremony of its new hospital on June 16th. The construction of 200,000 tons of sewage treatment project in Tongxiang of the material environment to speed up, Chengdu Xindu Jinhai sewage treatment project basically completed the upgrading and transformation and meet the standards of discharge.
(E) Business management continues to improve. The company established a perfect business objectives to stimulate member companies to learn from and catch up with the enthusiasm. The company has successfully completed the bidding for the top-level design of the group's "14th Five-Year Plan" and digital transformation, which was won by a consortium of Ali and Accenture. Formally launched the construction of the Financial ****Help Center with Deloitte Consulting Management. The supply chain big data center construction (Phase I) project was successfully launched and continuously optimized for operation.
In addition, the Group's headquarter made a comprehensive revision of the system related to corporate governance system, with 39 new or revised and improved systems***.
(6) Capital operation accelerated. The spin-off and listing of the A-share of Material Industry and Environmental Energy, the in-depth promotion of the "Second Mixed Reform", and the optimization of the stock and the establishment of new increments of 10 member companies have been initiated. Continuously strengthen investor relations management, held a voluntary performance briefing to further convey the company's supply chain integration service model, market development space and other intrinsic value information.
(7) Risk management and control have been continuously strengthened. We have organized a number of special inspections of our member companies' current combined business, logistics management, supply chain projects, use of funds, and special inspections of the implementation of corrective actions in bidding and bulk material procurement inspections, to further enhance the standardization of our operations.
Second, the risks that may face
1. Supply chain integration services
In the first half of the year, the sudden new coronary pneumonia epidemic formed a huge impact on the global economy, and the current situation of the global epidemic is still continuing to ferment, dragging the global economy into recession. Epidemic also brought unprecedented impact on China's economy, the first half of China's GDP growth rate fell by 1.6% year-on-year, especially in the first quarter due to the impact of production stoppages and shutdowns, GDP fell by 6.8% year-on-year.
From the perspective of the global supply chain, the geopolitical uncertainty brought about by the U.S.-China trade friction has led to the direct transfer of industries that were originally intended to be transferred from the eastern part of China to the western part of the country to the Southeast Asian countries, and the risk concerns caused by the epidemic on the over-concentration of the global supply chain have also accelerated the diversification and decentralization of the global supply chain, and the future may show the pattern of multicenter.
It is both a risk and an opportunity for CIG Yangtze's supply chain integration services, as the decline in economic growth, fluctuations in demand, and loosening of policies will all bring uncertainty to the company's future earnings.
Countermeasures: In the face of the impact of the new crown epidemic, the contraction of external demand and the stagnation of some business activities, CUIPPC has resolutely implemented the central government's "six stabilizers" and "six guarantees" and the provincial government's decision-making and deployment, and has always maintained its strength, grasped the opportunities, and taken positive actions. The company has taken a series of measures to stabilize the business, expand the market, seize opportunities and prevent risks, and has achieved stage-by-stage results.
2, financial risk
2020 the second half of the global epidemic development and international trade and economic form there is still a large uncertainty, still facing a complex and severe situation and a series of instability, macroeconomic downward pressure, financial market risk increases, financial business operation is more difficult to further strengthen the market research and control of risk prevention.
Countermeasures: First, closely track the market situation and changes in financial regulatory policies, strengthen industry analysis and research and regulatory policy trends, and promote the sound development of financial business. Secondly, we will accelerate the digital transformation of financial services, strengthen the top-level design of digital systems, and comprehensively enhance the risk monitoring, prevention and control capabilities of financial services. Thirdly, we will do a good job in the "14th Five-Year Plan" of the financial business, clarify the strategic orientation and business positioning, further promote the integration of production and financing, and play a greater role in empowering the Group's supply chain integration service business.
3. High-end industrial risk
Wire and cable, ordinary cable products industry threshold is not high, the price advantage is not obvious, facing the pressure of technological innovation and service upgrades; environmental protection and public utility business, sewage treatment, domestic waste, biomass incineration power generation, steam, compressed air, etc., by the impact of downstream customers' business downturn, the supply of the supply also exists in the stage of excess risk.
These are the main reasons why the company has been so successful.
Countermeasures: wire and cable business should be increased in rail transportation, energy, coal mining, petrochemical and other special cable R & D investment and capacity investment, the formation of differentiated competitive advantages; environmental protection utility needs to strengthen technological innovation, reduce product costs, so as to alleviate the procurement costs of downstream customers, to achieve a win-win situation for the enterprise benefit and social benefits.
C. Analysis of core competitiveness during the reporting period
The Company's long-term steady development is mainly due to its leading industry position, innovative business model, continuous optimization of the management system and mechanism, and relatively strong ability to obtain resources.
Advantage of industry position: the company has been continuously listed in the Fortune 500 since 2011, and ranked 210th in 2020, is the leader of China's supply chain integration services, is a large state-owned enterprise group under the province of Zhejiang, and is the only listed company in the domestic peer group to be selected as one of the Goldman Sachs New Pretty 50.In September 2018, the company was selected as "National Supply Chain Integration Service Leader" through the joint selection of eight ministries and commissions, such as the Ministry of Commerce and the Ministry of Industry and Information Technology. In September 2018, the company was selected as a "National Pilot Enterprise for Supply Chain Innovation and Application" by eight ministries and commissions, including the Ministry of Commerce and the Ministry of Industry and Information Technology. The company's strong position in the industry has enabled it to form a more complete and large upstream and downstream supply chain, and it has been able to reach benign cooperation with national commodity giants, and owns a long-term stable and powerful distribution network system, thus forming a competitive upstream bargaining power, downstream distribution power, and supply chain integration service capability.
Business model advantage: in recent years, the company has transformed from a traditional trader earning the difference between purchase and sale prices to a supply chain integration service provider, and is committed to becoming an industrial ecological organizer, adhering to the supply chain thinking, doing industry chain integration, and constructing a "supply chain +" industrial ecosystem with a unique competitive advantage, so that the company's net asset value is higher than that of comparable listed companies in the same industry. The company's return on net assets is in a leading position among comparable listed companies in the same industry. The company builds an integrated service platform around the main bodies, links and elements upstream and downstream of the industrial chain. Based on a large number of high-quality customer resources, the company takes the distribution network and logistics network in important economic fields as the layout, links business flow, logistics, capital flow and information flow, builds a business pattern of interaction between production and financing, and promotes the in-depth docking between supply and demand with its industry advantages of logistics intelligence, pan-financialization and internetization, With its industry advantages of logistics intelligence, pan-financialization and Internetization, it promotes the deep docking of supply and demand and the organic integration of industrial capital and commercial capital, with strong customer stickiness and traffic realization ability.
Advantage of management system and mechanism: As an enterprise selected as one of the "12 Sample Enterprises of State-owned Enterprises Reform", the company has long insisted on management reform and innovation, and its decision-making is both scientific and efficient, with an innovative attitude, which has brought more new opportunities to the company. after realizing the overall listing in 2015, the company stimulated the vitality of its employees through employee shareholding and the "second mixing reform", and also through refinancing. After the overall listing in 2015, the company has stimulated the vitality of employees through employee shareholding and the "second hybrid reform", cultivated professional operation and development capabilities through refinancing and strategic restructuring of stock assets, and modernized its governance system and standardized its operation and management.
Advantage of resource acquisition: The company is the first local circulation enterprise in China to obtain AAA credit rating from China Chengxin and Dagong International, which is conducive to obtaining bank financing and loans, and obtaining the advantage of relatively low-cost funds. As a mega enterprise headquartered in Hangzhou, the capital of e-commerce and radiating the Yangtze River Delta, the company's geographic location advantage provides a good foundation for industrial layout. As a Fortune 500 company, a listed company, and a state-owned enterprise, the company has market reputation and good government-enterprise relations, and has a strong ability to optimize the allocation of domestic and international resources, including obtaining major projects, solving large capital needs, and carrying out regional synergistic operations.