Bishuiyuan has been investigated by two institutions： the company has continuously deepened the research on microporous filtration membrane, nanofiber and ultrafiltration membrane, and is committed to
() The Record Form of Investor Relations Activities was released on October 21st, and the company was investigated by two institutions on October 18th, 2024. The types of institutions are fund companies and securities companies. The main contents of investor relations activities are introduced:
Q: What are the reasons for the company’s losses in the first half of the year?
A: There are two main reasons. First, because the company’s business has certain seasonal characteristics, it generally pays more in the second half of the year, especially in the fourth quarter. Therefore, the base in the first half of the year, including the first three quarters, is not high as a whole, so some items with great influence on the amount are easy to cause obvious fluctuations; Second, Yunnan Water, the company’s shareholding company, suffered a large loss in the first half of the year, with a net profit loss of 740 million in the first half of the year. We hold 24.02% of Yunnan Water, which has a great impact on our income statement. At present, our management has paid close attention to these problems and is actively taking measures to meet these challenges. As the major shareholder of Yunnan Water, we will actively exercise our shareholder rights and work together with all parties to improve the governance and management level of the company.
Q: What is the order status of the company in the first half of this year?
A: On the whole, orders in the first half of the year increased compared with the same period last year. In the first half of this year, the company added 128 new EPC orders, with a total order of nearly 4.9 billion yuan, an increase of 2.4 billion yuan over the same period last year, with an increase of nearly 96%. The total investment in BOT and BOO orders was 1.2 billion yuan, an increase of 1.15 billion yuan or 23 times over the same period of last year. It can be seen that the company’s orders in the first half of this year have a relatively large growth compared with the same period last year. The company’s main business is gradually improving.
Q: How do companies determine revenue for BOT and EPC orders?
A: The company’s business mainly includes engineering, equipment sales, operation, and other related services. Usually, the income of engineering is confirmed according to the construction progress, and the construction period is about one year. If the project is large, the time will be longer. The waterworks will usually purchase equipment in the later stage of construction, and then we will have equipment sales income. After the waterworks enter the operation period, they will charge operating fees regularly, such as water charges or management fees.
Q: The company’s accounts receivable are increasing. How will the company solve the problem of increasing accounts receivable? Is the company currently involved in debt conversion?
A: In the first half of 2024, the company’s accounts receivable amounted to 11.7 billion, a slight increase of 6% over the end of last year. Overall, the growth rate of receivables is still slightly lower than that of the main business. This also reflects the company’s management’s attention to the pressure drop of two funds (accounts receivable and contract assets). In the first half of this year, the company’s orders achieved rapid growth, including the number and amount of orders for our main business EPC and BOT. On the other hand, we also accelerated the collection of accounts receivable through internal and external cooperation. Internally, we have formulated the measures for the management of accounts receivable and the detailed rules for the punishment and punishment of bad debt pressure drop, set up the accounts receivable management and collection team, and set the annual target and break it down into various units, regularly supervise the progress, and solidly promote the pressure drop of the two funds. This year, we have also formulated new targets and incentive measures, and also improved the work of clearing accounts receivable and debts in an all-round way by improving the internal management system, improving employees’ risk awareness and collection skills. At the same time, the company cooperates with the government’s debt-conversion scheme, and we also have some projects and accounts receivable to be solved by debt-conversion. We are also actively paying attention to policy trends, strengthening communication and cooperation with customers according to different situations of each project, and speeding up the recovery of accounts receivable. In addition, judging from the formation of accounts receivable, with more and more projects entering the operation period, the income situation will be more stable. On the one hand, our income and profitability will increase, on the other hand, the fees in this part will be more stable, and the future cash flow, including accounts receivable, is also believed to be improved.
Q: The company’s R&D investment is increasing year by year. Is there any actual technological breakthrough?
A: The company has made remarkable progress in research and development. The company actively responded to the national "double carbon" target strategy, focused on the applied basic research in the technical field of membrane industry chain, and constantly increased investment in scientific and technological research and development with scientific and technological innovation as the engine, achieving a major breakthrough in the original technology of high-end membrane industry and continuing to lead the forefront of the industry. In promoting the substitution of domestic application, the company successfully participated in the bid for the integrated project of seawater comprehensive utilization in Huanghua City, which innovatively combined photovoltaic and energy storage systems to realize "green electricity to make green water" and became a practical landing case of self-developed dual-membrane seawater desalination integration technology. In addition, the company continued to provide high-performance seawater desalination reverse osmosis membrane products for China Power Construction Zhoushan Seawater Desalination Plant, realizing domestic substitution. At the same time, Bishuiyuan products have performed well in the seawater desalination project in Gwadar Port, Pakistan, and have been highly recognized by the owners. In improving the level of intelligent manufacturing, the company’s membrane equipment manufacturing capacity has been significantly improved. The self-developed V-MBR equipment was upgraded rapidly, and the cost was reduced by 25%. In addition, the company also vigorously promoted the intelligent upgrading of membrane production line, and designed and built a fully automatic membrane component production line integrating green, low-carbon and digital intelligent management and control. Through automatic and intelligent technical transformation, the production speed of conventional reverse osmosis membrane has been increased to 20 m/min. In 2023, the sales volume of serialized industrial membrane components independently manufactured by the company doubled compared with 2022. These achievements fully demonstrated the company’s innovative ability and strength in research and development, and laid a solid foundation for the company’s future development.
Q: Just now you mentioned that the company also has lithium extraction business in salt lake. Would you please give a brief introduction to the lithium extraction business in salt lake?
A: The company firmly adheres to the development strategy of going hand in hand with both sides. On the one hand, it continuously optimizes traditional industries, on the other hand, it deeply cultivates strategic emerging industries, devotes itself to stimulating new quality productivity, and makes every effort to build a dynamic new development pattern. Focusing on the cutting-edge technologies in the fields of lithium extraction from salt lake, chemical materials in salt lake, separation and concentration of materials and new materials, the company has successfully launched special membrane products, adsorption materials, supporting processes and system equipment through independent research and development, which has fully penetrated the technical path of lithium extraction from salt lake in the whole industrial chain and has been successfully applied to many projects. At the same time, the company continues to deepen the research on microporous filtration membrane, nanofiber and ultrafiltration membrane, and is committed to developing innovative products such as microbial enrichment membrane and protein separation and concentration membrane, forming a series and diversified product line, and gradually realizing the strategic goal of "technological autonomy, industrial scale and pilot industrialization". In 2023, we also achieved remarkable transformation of scientific and technological achievements in this respect, and won the bid for several projects in succession. This year, we are also continuing to expand more applications including salt lake recycling and industrial zero discharge;
Details of participating institutions are as follows:
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