Zhejiang Longsheng Group Co., Ltd. (hereinafter referred to as “Zhejiang Longsheng”)) recently announced that the company will receive 14502.54 RMB due to the relocation of the Daoxu factory. Ten thousand yuan in government incentive and subsidy funds. On December 30, 2019, the company received a chemical enterprise exit incentive subsidy fund of 125.0254 million yuan allocated from the fiscal zero balance account of the Daoxu People’s Government of Shangyu District, Shaoxing City. On February 26, 2020, the company received The balance of the chemical enterprise exit incentive subsidy fund allocated by the Daoxu People’s Government of Shangyu District, Shaoxing City is 20 million yuan from the fiscal zero balance account.
In addition, according to the “Policy Opinions on Supporting Leading Enterprises in the Chemical Industry to Become Bigger and Stronger” of the Hangzhou Bay Shangyu Economic and Technological Development Zone Management Committee, the company received a letter from Shangyu City, Shaoxing City on February 25. The district Hangzhou Bay Comprehensive Management Office allocated 400 million yuan in funds to realize the policy of making leading enterprises in the chemical industry bigger and stronger.
In addition to the above two government subsidies, since January 2, 2020, the last announcement date, the company and its subsidiaries within the scope of consolidated statements have received other sporadic government subsidies. A total of 3.7618 million yuan. In view that since January 2, 2020, the company has received a total of 423.7618 million yuan in government subsidies, accounting for 10.30% of the company’s 2018 audited net profit attributable to owners of the parent company.
Zhejiang Longsheng said that according to the relevant provisions of the “Accounting Standards for Business Enterprises No. 16 – Government Subsidies”, the company will include the above-mentioned government subsidies received in total at 423.7618 million yuan, of which: included in other income 403.7618 million yuan, including 20 million yuan in non-operating income and 0 yuan in deferred income.
It is understood that Daoxu is the place where Zhejiang Longsheng sprouted and started. Zhejiang Longsheng moved into the Hangzhou Bay Shangyu Economic and Technological Development Zone to achieve “one-park” development. It marks that Daoxu, a major chemical town, will bid farewell to chemical production. Shangyu chemical industry has basically realized the “one-park” development of Hangzhou Bay Development Zone, taking a decisive step in building a world-class green chemical industry cluster. At that time, Ruan Weixiang, chairman of Zhejiang Longsheng, said that the closure of the Daoxu factory was a way to eliminate inefficient production capacity and optimize the industrial layout. With the overall relocation of production into the park, the advantages of Longsheng’s intensive development and circular economy will become more obvious.
Public information shows that Zhejiang Longsheng started with auxiliaries, and then turned to dyes and intermediates. After years of development, it has grown into the world’s largest textile chemical production and service leader. At present, The business scope spans dyes, intermediates, inorganic chemicals, real estate and investment.
At present, Zhejiang Longsheng has a dye production capacity of 300,000 tons and an auxiliary production capacity of 100,000 tons globally, including 140,000 tons of domestic disperse dyes, 60,000 tons of reactive dyes, and overseas German companies It has reached 24,000 tons of dyes, 100,000 tons of auxiliaries, and holds 20,000 tons of Indian KIRI reactive dyes. The scale of production capacity ranks first in the world and it is the de facto leader in pricing in the industry.
Oriental Securities analyst Zhao Chen said that Zhejiang Longsheng, as the global leader in the dye industry, has a strong industry threshold, not only in terms of funds, channels, etc., but more importantly The company has long-term accumulation in safety production management, recycling production, pollution reduction and emission reduction, and has reached the industry-leading level. In the chemical industry, the fine chemical industry is one of the industries with the most stringent production safety requirements. From observation, Zhejiang Longsheng can take advantage of this advantage in the long term to continuously expand its leading advantage in the intermediate business and develop greater market space. In addition, the company’s development in the field of fine chemicals is also promising. In the past two years, Zhejiang Longsheng has fully enjoyed the high prosperity of dyes and intermediate products, and will have more sufficient capital to develop other segmented products in the future.
The latest financial report shows that in the first three quarters of 2019, Zhejiang Longsheng achieved operating income of 16.62 billion yuan, a year-on-year increase of 14.1%, and net profit attributable to the parent company was 3.882 billion yuan, a year-on-year increase of 22.13% , the net profit attributable to the parent after deducting non-profit items was 3.380 billion yuan, a year-on-year increase of 9.85%, of which net cash flow from operating activities was 4.241 billion yuan, a year-on-year increase of 51 times; in the third quarter of 2019, Zhejiang Longsheng achieved operating income of 6.974 billion yuan, a year-on-year increase 29.17%, a month-on-month increase of 42.97%, net profit attributable to the parent company was 1.351 billion yuan, a year-on-year increase of 2.30%, a month-on-month increase of 6.43%, both hitting a single-quarter record high.
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