Financial Performance - For the year ended December 31, 2021, the group's sales revenue was approximately RMB 547,976,000, an increase of about 23% compared to RMB 444,106,000 in the same period last year[15]. - The net profit attributable to equity holders of the company was approximately RMB 58,318,000, representing a growth of about 247% from RMB 16,827,000 in the previous year[15]. - Revenue for 2021 was RMB 547,976,000, an increase of 23.5% from RMB 444,106,000 in 2020[38]. - Other income for 2021 was RMB 124,176,000, a significant increase from a net loss of RMB 4,075,000 in 2020, mainly due to relocation compensation[41]. - The group experienced a net loss of RMB 49,195,000 after excluding relocation income, mainly due to impairment of construction projects and increased production costs leading to a decline in gross margin[43]. - Gross margin for 2021 decreased to 7.1% from 21.5% in 2020, primarily due to increased production costs and reduced overseas demand[38]. - The company incurred a projected loss of RMB 7,982,000 due to rising raw material prices affecting irrevocable sales contracts[38]. Production and Operations - The company has completed the relocation of production equipment related to succinic anhydride from its factories in Changzhou and Lianyungang to Dalian[15]. - The company completed the relocation and transformation of its Changzhou factory, enhancing automation and improving production processes to increase product competitiveness[18]. - The Dalian new factory project is a key focus for the company, with the first phase expected to begin trial production in 2022, expanding phthalic anhydride production capacity[27]. - The Lianyungang factory resumed production in 2021 but faced challenges due to unstable steam supply, with plans to improve operations in 2022 following the Dalian factory's production start[29]. - The company plans to relocate its production line to a new factory in Dalian, which is expected to restore normal production of phthalic anhydride[39]. - The company plans to resume production of phthalic anhydride at the new Dalian factory, which is expected to utilize self-generated steam for production[146]. Research and Development - The company emphasizes technological investment and innovation, having won several awards related to production technology, including first-class and second-class awards in the petrochemical industry[8]. - The company aims to leverage its strong R&D capabilities to drive rapid development in the future[8]. - The research and development bases are located in Changzhou and Shanghai, where the company continuously launches new products and technologies[8]. - The pharmaceutical division has made progress in the development of malic acid raw materials, which are set to be used in various medical applications, potentially increasing sales of high-value products[25]. - The company is committed to increasing R&D investment to drive technological innovation and product upgrades[32]. Environmental Management - The company has established a clean production audit report, achieving advanced domestic standards in pollution reduction and resource utilization efficiency[23]. - The company is committed to enhancing environmental management during the Changzhou factory's relocation, ensuring compliance with government standards for soil investigation and pollution cleanup[21]. - The company invested approximately RMB 9 million in environmental protection efforts in 2021[131]. - The company has implemented a new method for producing phthalic anhydride since 2018, significantly reducing greenhouse gas emissions[134]. - The company has established a dedicated environmental protection workshop to manage wastewater and solid waste effectively[130]. - The total greenhouse gas emissions amounted to 73,278 tons in 2021, slightly down from 75,808 tons in 2020, while emissions per unit of production increased to 2.61 tons per ton[137]. - The total wastewater discharged was 329,204 tons, a decrease from 384,199 tons in 2020 and 393,492 tons in 2019[137]. - The company has not reported any significant violations of environmental protection laws and regulations in 2021[131]. Corporate Governance - The company emphasizes high-quality corporate governance, believing it establishes a framework for effective management and enhances shareholder value[71]. - The board of directors confirmed their responsibility for the preparation of the financial statements for the fiscal year ending December 31, 2021[108]. - The company has adopted a standard code of conduct for securities trading, ensuring compliance among all directors[77]. - The board includes independent directors with significant experience in finance and investment banking, enhancing corporate governance[62]. - The company has established three board committees: the remuneration committee, audit committee, and nomination committee[72]. - The Audit Committee held five meetings in 2021, with a 100% attendance rate from all members, focusing on reviewing the financial reporting procedures and internal control systems of the group[89]. - The company has adopted a board diversity policy, recognizing the benefits of diverse perspectives and experiences among board members[99]. Employee Management - Employee costs totaled approximately RMB 64,859,000 for the year, an increase from RMB 55,946,000 in 2020, driven by higher average employee numbers and salaries[51]. - The employee turnover rate for males was 25% in 2021, an increase from 18% in 2020, while the turnover rate for females rose to 15% from 8%[154]. - The average training hours per employee was 69 hours in 2021, slightly up from 68 hours in 2020[156]. - The company has established a detailed social responsibility system covering employment regulations and social welfare[151]. Market and Sales - Domestic sales grew by approximately 27% in 2021, driven by adjustments in sales strategies and increased efforts in promoting products like tartaric acid and malic acid[19]. - Export sales accounted for approximately 33.7% of total revenue, a decrease from 35.6% in 2020, while domestic sales increased to 66.3% from 64.2%[45]. - The company is actively developing high-end end-user clients and expanding into international markets[35]. - The company will continue to focus on food additives while exploring new market segments and applications[36]. Financial Position - As of December 31, 2021, the total outstanding bank loans amounted to RMB 88,400,000, with RMB 86,900,000 due within one year[47]. - The debt-to-asset ratio increased to 27.1% as of December 31, 2021, up from 23.3% in 2020, mainly due to increased bank loans for the new factory[50]. - Cash and cash equivalents decreased to approximately RMB 58,178,000 from RMB 133,693,000 in 2020, primarily due to funding for the new factory[50]. - The company aims for a dividend payout ratio of 30% to 70% of the consolidated net profit attributable to shareholders[121]. Shareholder Information - As of December 31, 2021, the company's distributable reserves amounted to approximately RMB 517,198,000, an increase from RMB 511,932,000 in 2020[171]. - The company did not declare any interim dividends for the year, nor did it recommend a final dividend for the year ending December 31, 2021[168]. - The beneficial ownership structure indicates significant control by key individuals, with Mr. Rui and Ms. Leng both holding substantial shares[188]. - The company continues to maintain a diverse ownership structure with both domestic and foreign investments[188].

Financial Performance - Revenue for the six months ended June 30, 2021, was RMB 246,356,000, an increase from RMB 219,947,000 in the same period of 2020, representing a growth of approximately 12%[5] - Gross profit for the period was RMB 34,090,000, down from RMB 49,972,000 in the previous year, indicating a decline of about 32%[5] - Profit attributable to equity holders of the company was RMB 242,000, compared to RMB 15,178,000 in the same period last year, reflecting a significant decrease[3] - Basic and diluted earnings per share were RMB 0.000 and RMB 0.029 respectively, showing a decline in profitability[4] - Total comprehensive income for the period was RMB 20,000, down from RMB 14,978,000 in the previous year[6] - The company reported a net loss from operations of RMB 888,000, compared to a profit of RMB 20,429,000 in the previous year[5] - For the six months ended June 30, 2021, the company's operating cash flow was a net outflow of RMB 16,012,000, compared to a net inflow of RMB 29,078,000 in the same period of 2020[14] - The company reported a significant increase in sales in mainland China, reaching RMB 158,221,000, up 26.73% from RMB 124,848,000 in 2020[25] - The net profit attributable to equity holders for the same period was approximately RMB 242,000, a decrease of about 98% from RMB 15,178,000 in the previous year[54] Assets and Liabilities - Total assets as of June 30, 2021, amounted to RMB 889,050,000, an increase from RMB 847,329,000 at the end of 2020[10] - Total liabilities increased to RMB 249,709,000 from RMB 197,414,000, indicating a rise of approximately 26%[10] - Cash and bank deposits decreased to RMB 57,226,000 from RMB 134,343,000, a decline of about 57%[8] - The total non-current assets, excluding deferred tax assets, amounted to RMB 466,355,000 as of June 30, 2021, compared to RMB 412,137,000 as of December 31, 2020[26] - Trade receivables increased to RMB 56,890,000 as of June 30, 2021, from RMB 52,389,000 as of December 31, 2020, indicating a growth of 8.5%[40] - Trade payables increased to RMB 38,170,000 as of June 30, 2021, compared to RMB 28,000,000 as of December 31, 2020[49] - The debt-to-asset ratio as of June 30, 2021, was 28.1%, an increase from 23.3% as of December 31, 2020[79] Cash Flow and Investments - The net cash used in investing activities was RMB 129,111,000, compared to RMB 20,936,000 in the same period of 2020, indicating increased investment in property, plant, and equipment[14] - Cash and cash equivalents decreased to approximately RMB 57,226,000 as of June 30, 2021, down from RMB 133,693,000 as of December 31, 2020, primarily due to funding needs for the new factory[79] - The company has authorized but not contracted capital commitments of RMB 106,696,000 as of June 30, 2021, compared to RMB 6,547,000 as of December 31, 2020[52] - The company has capital commitments of approximately RMB 106,696,000 for the construction of a new factory in Dalian, China, expected to be funded through cash flow and/or bank financing[79] Operational Developments - The company has plans for market expansion and new product development, although specific details were not disclosed in the report[2] - The company plans to continue focusing on the production and sales of organic acid products, with an emphasis on enhancing overall group efficiency[24] - The company is preparing for the registration and verification of the apple acid raw material project, which is expected to enhance product value[58] - The company continues to advance the application for the new feed additive project PQQ.Na2, with expert review recently completed[58] - The company has faced significant production cost increases due to the rising market price of its main raw material, causing a decline in gross margin[54] - The company is adjusting its sales strategy to strengthen domestic market sales in response to decreased demand in major export regions due to the pandemic[55] - The Dalian new factory project is a key focus for the company, with construction progressing rapidly and all necessary permits obtained by June 30, 2021[60] - The company has transitioned its Changzhou base from a chemical enterprise to a light industry enterprise, with the first phase of the factory being dismantled as per the relocation agreement[61][62] - Lianyungang Changmao has resumed production as a non-chemical enterprise, completing the dismantling of chemical facilities by June 30, 2021[63] - Despite a decline in net profit in the first half of 2021, production and sales have remained stable, with the company focusing on technological innovation and product upgrades[65] - The company aims to accelerate the construction of the Dalian base, which will serve as a major production hub for high-end food additives and new materials[65] - Continuous investment in R&D is planned to enhance the development of new products, including biodegradable materials and pharmaceutical excipients[66] - The company is committed to improving safety and environmental standards, aiming to become a resource-saving and environmentally friendly enterprise[68] Employee and Governance - The total employee cost for the six months ended June 30, 2021, was approximately RMB 30,330,000, an increase from RMB 25,360,000 for the same period in 2020, attributed to salary increases[80] - As of June 30, 2021, the company employed a total of 424 employees, down from 448 employees as of June 30, 2020[80] - The company has established an employee incentive plan linked to achieving a target profit of at least RMB 40,000,000 for the year ending December 31, 2022[80] - The company has complied with the corporate governance code as per the listing rules during the reporting period[116] - The company’s board of directors has adopted a standard code for securities trading conduct, with no known violations reported during the period[117] Shareholder Information - Hong Kong Newborn Venture Capital Limited holds 135,000,000 foreign shares, representing approximately 39.30% of the total issued foreign shares of 343,500,000[101] - Hong Kong Biochemical High-Tech Investment Limited owns 67,500,000 foreign shares, accounting for about 19.65% of the total issued foreign shares[101] - Early Service Limited has a stake in 66,000,000 foreign shares, which is approximately 19.21% of the total issued foreign shares[101] - Lin Mao holds 2,620,000 H shares, representing about 1.43% of the total issued H shares of 183,700,000[101] - Shanghai Technology Venture Investment Co., Ltd. controls 62,500,000 foreign shares, which is approximately 18.20% of the total issued foreign shares[103] - As of June 30, 2021, the company had a total of 529,700,000 issued shares, comprising 183,700,000 H shares, 2,500,000 domestic shares, and 343,500,000 foreign shares[111] - The company did not purchase, sell, or redeem any of its listed securities during the six months ending June 30, 2021[111] - The company’s foreign shares are valued in Renminbi and are issued to the initiators, with a par value of RMB 0.10 per share[112] - The company’s H shares were listed on the Hong Kong Stock Exchange's main board on June 28, 2013, after being transferred from the Growth Enterprise Market[112] - There were no arrangements made for directors or their family members to hold any shares or debt securities of the company during the reporting period[109] - The company’s legal advisors have indicated that foreign shareholders should have the same rights and obligations as domestic shareholders[114]

Financial Performance - The company's sales revenue for the year ended December 31, 2020, was approximately RMB 444.1 million, a decrease of about 10% compared to RMB 494.6 million in the previous year[14]. - Net profit attributable to equity holders of the company was approximately RMB 16.8 million, down about 71% from RMB 58.3 million in the previous year[14]. - In 2020, the company's revenue was RMB 444,106,000, a decrease of 10.2% from RMB 494,580,000 in 2019, with a gross margin of 23.2%, down from 27.3%[37]. - The company recorded a net profit attributable to equity holders of approximately RMB 16,827,000 for the year ended December 31, 2020, a significant decrease from RMB 58,299,000 in 2019[42]. - Exports accounted for approximately 36% of the company's revenue in 2020, down from 47% in 2019, while domestic sales represented 64%, up from 53%[44]. Impact of COVID-19 - The company faced significant negative impacts on foreign trade sales and new business development due to the COVID-19 pandemic[14]. - The company faced a significant decline in sales due to reduced demand in major export regions like Europe and the US, with shipping costs rising to three to four times previous levels[17]. Production and Operations - The company plans to relocate relevant equipment to a new factory in Dalian due to the inability to produce certain products in Changzhou[15]. - The main production line for food additives has been largely relocated to the second phase of the Changzhou factory, ensuring no impact on future production capacity[15]. - The production line for phthalic anhydride was halted in June 2020, leading to increased production costs due to the need for external procurement of raw materials[17]. - The company is actively relocating the phthalic anhydride production line to a new facility in Dalian, aiming to transition from chemical to light industrial production[25]. - The company plans to build a new factory in Dalian, Liaoning Province, to relocate production lines from Changzhou and Lianyungang, aiming to restore normal production of phthalic anhydride[38]. Research and Development - The company is advancing the development of new feed additive PQQ, with positive feedback received from the Ministry of Agriculture during the second review meeting[21]. - The company has expanded its pharmaceutical excipients project, completing the application for L-potassium tartrate and L-tartaric acid as pharmaceutical excipients[22]. - The raw material drug project is underway, with the production line built and awaiting provincial regulatory approval for national drug application[23]. - The company is focusing on technological innovation and product upgrades, investing in the development of new feed additives and pharmaceutical excipients[30]. Environmental and Safety Measures - Environmental investments have been increased, with electronic monitoring systems installed to ensure compliance with pollution discharge standards[20]. - The company aims to balance product quality improvement with cost control and environmental protection, implementing energy-saving measures and pollution reduction initiatives[125]. - The company has implemented measures to ensure effective operation of equipment to reduce emissions and has engaged independent environmental monitoring firms to ensure compliance with national standards[131]. - The company’s Changzhou factory received ISO 14000 certification, reflecting its commitment to environmental management and pollution prevention[125]. - In 2020, the company invested over RMB 25 million in environmental protection, focusing on waste treatment and pollution control upgrades[126]. Governance and Management - The management team includes experienced professionals with over 20 years of accounting and financial management experience, enhancing the company's financial oversight[68]. - The independent directors bring extensive academic and industry experience, contributing to the company's strategic direction and governance[60][61]. - The company has a robust management structure with a focus on improving production management and safety standards, evidenced by awards received for excellence in production[64]. - The board includes members with diverse backgrounds in engineering, finance, and academia, enhancing the company's strategic capabilities[60][61]. - The board confirmed the preparation of financial statements on a going concern basis, with reasonable assumptions and disclosures[74]. Shareholding Structure - As of December 31, 2020, Mr. Rui Xinsheng holds 2,500,000 domestic shares (100%) and 135,000,000 foreign shares (39.30%) of the company, along with 3,820,000 H shares (2.08%)[173]. - The company has a significant ownership structure with key individuals holding substantial stakes in both domestic and foreign shares[177]. - The report indicates that the company is actively managing its shareholding structure among its directors and related parties[175]. - The company has a diverse shareholding base, with significant foreign investment represented in its capital structure[177]. Employee and Community Engagement - Total employee costs for the year ended December 31, 2020, were approximately RMB 55,946,000, down from RMB 65,477,000 in 2019, attributed to a decrease in average employee numbers[49]. - The company has a strong emphasis on employee development and recognition, fostering a culture of innovation and productivity[64]. - The company made charitable donations totaling RMB 140,000 in 2020, a decrease from RMB 190,000 in 2019[157]. - The company donated 5,000 masks to the government of Chunjiang Town in March 2020 as part of its community support efforts[157]. Compliance and Risk Management - The company has established anti-corruption and anti-bribery control procedures and conducts annual internal audits related to social responsibility[156]. - The board is committed to ongoing monitoring and review of the company's risk management framework and emerging risks[108]. - The company has a policy in place to ensure timely and equal disclosure of insider information to relevant parties[113]. - The internal audit department was formed to continuously evaluate the effectiveness of the internal control system, reporting findings to the board[112].

Financial Performance - Revenue for the six months ended June 30, 2020, was RMB 219,947 thousand, a decrease of 26.2% compared to RMB 297,891 thousand for the same period in 2019[3] - Gross profit for the same period was RMB 49,972 thousand, down 47.4% from RMB 94,855 thousand in 2019[3] - Operating profit decreased to RMB 20,429 thousand, a decline of 58.4% from RMB 49,116 thousand in the previous year[3] - Net profit for the period was RMB 14,976 thousand, representing a 64.7% decrease from RMB 42,299 thousand in 2019[3] - Basic and diluted earnings per share were RMB 0.029, down from RMB 0.080 in the same period last year[3] - The pre-tax profit for the six months ended June 30, 2020, was RMB 20,489,000, a decrease of 58.0% compared to RMB 48,778,000 for the same period in 2019[32] - The income tax expense for the current period was RMB 5,513,000, down 14.9% from RMB 6,479,000 in the previous year[30] - Basic earnings per share for the six months ended June 30, 2020, was RMB 15,178,000, compared to RMB 42,528,000 for the same period in 2019[32] - For the six months ended June 30, 2020, the company's sales revenue was approximately RMB 219,947,000, a decrease of about 26% compared to RMB 297,891,000 in the same period last year[54] - The net profit attributable to equity holders for the same period was approximately RMB 15,178,000, down about 64% from RMB 42,528,000 in the previous year[54] Assets and Liabilities - Total assets as of June 30, 2020, amounted to RMB 756,655 thousand, an increase from RMB 737,739 thousand at the end of 2019[5] - Total equity attributable to equity holders of the company was RMB 647,738 thousand, down from RMB 661,692 thousand at the end of 2019[5] - Trade receivables increased to RMB 82,390 thousand from RMB 64,131 thousand in 2019, indicating a rise of 28.5%[5] - Cash and bank deposits decreased to RMB 107,718 thousand from RMB 120,216 thousand, a decline of 10.4%[5] - Total liabilities increased to RMB 108,497 thousand from RMB 75,425 thousand, reflecting a rise of 43.8%[7] - The debt-to-asset ratio as of June 30, 2020, was 14.3%, compared to 10.2% at the end of 2019[76] Cash Flow - For the six months ended June 30, 2020, the operating cash generated was RMB 29,273,000, a decrease of 60.2% compared to RMB 73,519,000 in 2019[12] - The net cash used in investing activities was RMB 20,936,000, an increase of 63.5% from RMB 12,801,000 in the previous year[12] - The cash and cash equivalents as of June 30, 2020, were RMB 107,318,000, a decrease of 8.9% from RMB 119,316,000 at the beginning of the year[12] - Cash and cash equivalents totaled RMB 107,318,000 as of June 30, 2020, a decrease of 10.0% from RMB 119,316,000 at the end of 2019[38] Market Performance - Revenue from the China market was RMB 124,848,000, a decrease of 15.6% compared to RMB 147,912,000 in 2019[23] - Revenue from Europe dropped by 38.3% to RMB 40,534,000 from RMB 65,639,000 in the previous year[23] - Export sales accounted for approximately 43% of total revenue, down from 50% in the same period last year, while domestic sales increased to 57%[73] Employee and Cost Management - As of June 30, 2020, the total employee cost for the first half of the year was approximately RMB 25,360,000, a decrease of 32.3% compared to RMB 37,424,000 for the same period in 2019[79] - The company employed a total of 448 employees as of June 30, 2020, down from 460 employees a year earlier[79] - The company has established an employee incentive plan that will distribute 5% of profits exceeding a target profit of RMB 40,000,000 for the year ending December 31, 2022[79] Corporate Governance and Structure - The company did not recommend any dividend distribution for the six months ended June 30, 2020, consistent with the previous year[33] - The company has not reported any major changes in its corporate structure during the reporting period[82] - The company has complied with the corporate governance code as per the listing rules during the reporting period[113] - The company’s board of directors includes both executive and independent non-executive directors, with attendance affected by the COVID-19 pandemic[113] Strategic Initiatives - The company has initiated the development of a new feed additive, PQQ, and is working on obtaining the necessary approvals for its production[59] - The company has expanded its product line to include pharmaceutical excipients, completing the application for L-potassium tartrate as a pharmaceutical excipient[61] - The company is actively seeking a new production base to expand its production scale and enhance its competitive edge[55] - The company has increased its environmental protection investments and completed the construction of an emergency rainwater pool to meet new environmental requirements[58] - The company is focusing on energy efficiency and cost reduction in response to increased energy procurement costs due to changes in production processes[57] - The raw material drug production line is nearly completed and awaiting provincial regulatory approval for national drug application submission[62] - The company plans to relocate production lines to a new base, focusing on high-end food additives, pharmaceutical excipients, and raw materials to enhance economic benefits[65] - The company is actively pursuing an A-share listing, having submitted a counseling application to the Jiangsu Securities Regulatory Bureau[70] - The company emphasizes technological innovation, aiming to accelerate the development of new products such as PQQ feed additives and raw materials[66] - The company is committed to enhancing safety and environmental standards, focusing on clean production and pollution prevention[67] - The company aims to expand its market presence by developing high-end customers and enhancing brand recognition through improved product quality and service[69] Shareholding and Equity - The company’s major shareholders include Mr. Rui Xinsheng, who holds 2,500,000 domestic shares (100%) and 135,000,000 foreign shares (39.30%)[85] - Ms. Leng Yixin, a major shareholder, also holds 2,500,000 domestic shares (100%) and 135,000,000 foreign shares (39.30%)[87] - Mr. Yu Xiaoping holds 66,000,000 foreign shares (19.21%) and 2,620,000 H shares (1.43%) as of June 30, 2020[85] - The company has a total of 135,000,000 foreign shares, representing approximately 39.30% of the issued capital[97] - The total issued shares of the company as of June 30, 2020, include 343,500,000 foreign shares and 183,700,000 H shares[103][104] - The total issued capital includes both domestic and foreign shares, with specific percentages outlined for each category[97] - The company continues to maintain transparency in its equity disclosures as required by regulatory standards[104] - The company’s foreign shares can be converted into overseas listed foreign shares upon obtaining necessary approvals from regulatory authorities[111]

Financial Performance - In 2019, the group's sales revenue was approximately RMB 494.58 million, a decrease of about 22.6% compared to RMB 639.12 million in the previous year[13]. - The net profit attributable to equity holders of the group was approximately RMB 58.30 million, an increase of 15.4% from RMB 50.53 million in the previous year[13]. - The company's revenue for 2019 was RMB 494,580,000, a decrease from RMB 639,120,000 in 2018, primarily due to reduced sales volume[33]. - The gross profit margin improved to 27.3% in 2019 from 20.3% in 2018, attributed to cost-saving measures and production efficiency improvements[33]. - The net profit attributable to equity holders was approximately RMB 58,299,000 in 2019, an increase from RMB 50,525,000 in 2018, driven by higher gross margins and improved operational efficiency[36]. - Sales and administrative expenses decreased to RMB 75,025,000 in 2019 from RMB 78,723,000 in 2018, partly due to a two-month production halt at the Changzhou plant[34]. - Export sales accounted for approximately 47% of total revenue in 2019, slightly down from 49% in 2018, while domestic sales represented 53%[38]. Production and Operational Improvements - The group implemented differentiated sales strategies and improved production management, maintaining a stable market share despite a decrease in overall sales[14]. - The group achieved significant improvements in the production of succinic anhydride by replacing benzene with butane, reducing production costs and enhancing energy efficiency[14]. - The group focused on energy conservation and emission reduction, implementing automation and intelligent upgrades to production lines[14]. - The group’s production facilities underwent upgrades in late 2019, impacting sales volume during the fourth quarter[13]. - The company focused on creating value for customers and benefits for itself, implementing refined management and 5S management system to improve productivity[16]. Product Development and Market Strategy - The main product, L(+)-tartaric acid, has received FDA certification, enhancing its market competitiveness[7]. - The group plans to continue developing functional nutritional health products, extending its product chain[7]. - The company is developing a new feed additive, PQQ, with expert approval received for its economic viability, aiming for rapid market entry[19]. - The company expanded its pharmaceutical excipients product line by adding three new varieties, enhancing product value and sales efforts[20]. - The raw material drug project is supported by national policies, aiming to upgrade existing products and improve economic benefits[21]. - The company plans to accelerate technological innovation and product upgrades, focusing on new products like PQQ and pharmaceutical excipients[27]. - The Lianyungang facility is a key development project aimed at leveraging production capacity and enhancing competitiveness in high-end markets[28]. Environmental and Safety Initiatives - The company invested in environmental protection, achieving AEO customs certification to enhance trade competitiveness and reduce customs inspection rates[17]. - The company’s Changzhou factory received ISO 14001 certification, demonstrating its commitment to environmental management and pollution prevention[127]. - The Lianyungang project includes a wastewater treatment system with a daily capacity of 1,000 tons, ensuring compliance with environmental standards[22]. - Total wastewater discharged in 2019 was 393,492 tons, a decrease from 451,557 tons in 2018, indicating a reduction of approximately 12.9%[134]. - Total greenhouse gas emissions in 2019 were 71,565 tons, down from 99,940 tons in 2018, representing a reduction of about 28.5%[134]. - The company implemented a new method for producing maleic anhydride, significantly reducing greenhouse gas emissions[131]. - The company’s Jiangsu factory was recognized as a water-saving enterprise, achieving a notable decrease in water usage per unit of product[138]. - The company’s hazardous waste per unit of production decreased from 0.06 tons/ton in 2018 to 0.04 tons/ton in 2019, a reduction of approximately 33.3%[134]. Governance and Management - The management team includes experienced professionals with notable achievements in the biochemical industry, contributing to the company's strategic direction[49][50][52][53]. - The company maintains a commitment to high-quality corporate governance, believing it establishes a framework for effective management and enhances shareholder value[68]. - The board includes independent non-executive directors with extensive experience in finance and engineering, contributing to the company's strategic oversight[55][56]. - The company has a strong focus on continuous improvement and innovation in biochemistry and immobilized cell technology, with several awards for technological advancements[64]. - The board's diverse expertise supports the company's strategic decision-making and long-term growth objectives[55][56][64]. - The board confirmed the responsibility for preparing the financial statements for the fiscal year ending December 31, 2019, ensuring they reflect the group's financial position accurately[105]. Employee and Community Engagement - The total number of employees as of December 31, 2019, was 461, down from 479 in 2018[43]. - Training expenses for employees increased to RMB 350,000 in 2019 from RMB 186,000 in 2018, with 97% of employees receiving training[148]. - The company donated RMB 190,000 to the Changzhou Charity Federation in 2019, an increase from RMB 140,000 in 2018[155]. - The company maintains strict adherence to labor laws, with no reported violations regarding child labor in 2019[146]. - The company has over 100 qualified suppliers, with annual evaluations of their performance to ensure compliance with social responsibility commitments[149]. Shareholder Information - The proposed final dividend for the year ending December 31, 2019, is RMB 0.055 per share, totaling approximately RMB 29,134,000, an increase from RMB 26,485,000 in 2018[160]. - The company's distributable reserves as of December 31, 2019, amounted to approximately RMB 470,558,000, up from RMB 416,392,000 in 2018[161]. - The ownership structure indicates significant concentration among a few major shareholders, with the top three holding over 78% of the foreign shares[184]. - The company has not established any arrangements for directors or executives to hold shares or debt securities during the year[183].

Financial Performance - Revenue for the six months ended June 30, 2019, was RMB 297,891,000, a decrease of 6.5% from RMB 317,307,000 in the same period of 2018[3] - Gross profit increased to RMB 94,855,000, representing a gross margin of 31.8%, compared to RMB 59,876,000 and a margin of 18.9% in 2018[3] - Operating profit surged to RMB 49,116,000, up 215.5% from RMB 15,550,000 in the previous year[3] - Net profit for the period was RMB 42,299,000, a significant increase of 204.5% compared to RMB 13,905,000 in 2018[3] - Total comprehensive income for the period was RMB 42,301,000, compared to RMB 13,905,000 in the same period last year[3] - Basic and diluted earnings per share increased to RMB 0.080, up from RMB 0.027 in 2018[3] - The net profit before tax for the first half of 2019 was RMB 48,778,000, compared to RMB 15,133,000 in the same period of 2018, representing a significant increase[42] - The income tax expense for the first half of 2019 was RMB 6,479,000, compared to RMB 1,228,000 in 2018, reflecting a higher profit level[40] - Basic earnings per share for the first half of 2019 were RMB 0.080, based on a profit attributable to equity holders of approximately RMB 42,528,000[42] - The company reported a profit of RMB 42,528 thousand for the period, contributing to retained earnings of RMB 402,692 thousand as of June 30, 2019[54] Assets and Liabilities - Total assets as of June 30, 2019, were RMB 737,012,000, slightly up from RMB 732,018,000 at the end of 2018[8] - Total liabilities decreased to RMB 90,329,000 from RMB 101,151,000 in the previous year[11] - The total non-current assets as of June 30, 2019, were RMB 400,068,000, slightly down from RMB 406,671,000 at the end of 2018[34] - As of June 30, 2019, the company's trade receivables amounted to RMB 72,034 thousand, a decrease of 27% from RMB 98,672 thousand as of December 31, 2018[48] - Trade payables increased to RMB 14,648 thousand as of June 30, 2019, compared to RMB 10,535 thousand at the end of 2018, reflecting a 39% increase[56] - The company’s total equity reserves reached RMB 592,948 thousand as of June 30, 2019, an increase from RMB 540,574 thousand at the end of 2018[54] Cash Flow - Cash and bank deposits increased to RMB 96,544,000 from RMB 85,098,000 in 2018[6] - Operating cash generated for the six months ended June 30, 2019, was RMB 73,519 thousand, a significant increase of 128.5% compared to RMB 32,229 thousand in 2018[16] - Net cash generated from operating activities for the same period was RMB 63,168 thousand, up from RMB 31,480 thousand in 2018, reflecting a growth of 100.5%[16] - Cash used in investing activities amounted to RMB 12,801 thousand, slightly improved from RMB 13,936 thousand in the previous year[16] - Cash flow from financing activities showed a net outflow of RMB 38,373 thousand, compared to RMB 26,225 thousand in 2018, indicating an increase in financing costs[16] - The total cash and cash equivalents as of June 30, 2019, reached RMB 93,394 thousand, up from RMB 60,071 thousand in 2018, representing a growth of 55.4%[16] - The company reported a decrease in interest paid, which was RMB 551 thousand compared to RMB 756 thousand in the previous year, reflecting a reduction of 27.2%[16] Sales and Market Performance - Total sales revenue for the first half of 2019 was RMB 297,891,000, a decrease of 6.1% compared to RMB 317,307,000 in the same period of 2018[33] - Sales in mainland China amounted to RMB 147,912,000, down 6.8% from RMB 158,712,000 in 2018[33] - Sales in Europe increased significantly to RMB 65,639,000, up 30.9% from RMB 50,104,000 in 2018[33] - Sales in the Asia-Pacific region decreased to RMB 58,517,000, down 29.5% from RMB 82,973,000 in 2018[33] - Approximately 50% of the group’s sales revenue comes from exports, with the same percentage reported for the six months ended June 30, 2018[78] Corporate Governance and Ownership - The company complies with the corporate governance code and has adhered to the relevant provisions during the six months ending June 30, 2019[135] - The company has adopted a standard code for securities trading by directors, with no known non-compliance during the reporting period[136] - The ownership structure includes significant stakes held by major shareholders, indicating a concentrated ownership model[103] - The company is actively involved in managing its equity structure, with significant stakes held by its executives and their families[92] - The company continues to monitor and report on its equity interests in compliance with regulatory requirements[90] Strategic Initiatives and Development - The company is focusing on the development of pharmaceutical excipients, with new projects including DL-tartaric acid and L-potassium tartrate[65] - The company is advancing the research and development of raw materials, specifically sodium pantothenate, and preparing for GMP certification[66] - The company is working on the new vitamin PQQ project, with ongoing applications for feed additive approvals and production process research[67] - The company plans to enhance its production capacity at the Lianyungang site, which is expected to provide a competitive advantage in high-end food, pharmaceuticals, and new materials industries[72] - The company aims to accelerate technological innovation and product upgrades to enhance competitiveness in the high-end product market[70] - The company has implemented automation and smart upgrades in production lines to improve labor productivity and reduce costs[62] - The group plans to enhance its production capabilities with capital commitments of approximately RMB 7,232,000 for improvements to production lines as of June 30, 2019[83] - The group has no significant investments or capital asset plans as of June 30, 2019[86] - The group will continue to focus on developing high-end customers and expanding into international markets through collaboration on new products and technologies[74] - The group aims to improve its existing product competitiveness while exploring new market areas and applications in food additives and pharmaceutical excipients[74] - The group has implemented a clean production initiative to enhance its environmental performance and resource efficiency[73]

Financial Performance - For the year ended December 31, 2018, the group's sales revenue was approximately RMB 639,120,000, a slight increase from RMB 630,841,000 in the previous year[13]. - The net profit attributable to equity holders of the company was approximately RMB 50,525,000, a significant increase from RMB 3,382,000 in the previous year[13]. - The company recorded revenue of RMB 639,120,000 in 2018, a slight increase from RMB 630,841,000 in 2017, with a gross margin of 20.3% compared to 11.9% in 2017[34]. - The net profit attributable to equity holders was approximately RMB 50,525,000 in 2018, significantly up from RMB 3,382,000 in 2017, driven by improved gross margins and cost control measures[38]. - Other income decreased to RMB 4,018,000 in 2018 from RMB 12,784,000 in 2017, primarily due to a one-time government subsidy recognized in the previous year[35]. - The company has a total outstanding bank loan of RMB 39,311,000 as of December 31, 2018, with an average interest rate of 3.8%[41]. - The company's distributable reserves increased to approximately RMB 416,392,000 as of December 31, 2018, up from RMB 350,946,000 in 2017[160]. - The company reported a proposed final dividend of RMB 0.05 per share for the year ending December 31, 2018, totaling approximately RMB 26,485,000[158]. Operational Challenges - The company faced greater operational pressure due to domestic supply-side reforms and ongoing safety and environmental pressures[13]. - The full subsidiary, Lianyungang Changmao, faced production suspension and restructuring due to local government policies, presenting new challenges for the company's development[13]. - The company has faced negative economic impacts due to the forced shutdown of its Lianyungang facility, which was affected by safety and environmental regulations[23]. Innovation and Development - The company emphasized innovation and development, achieving significant progress in production, operation, research and development, and management[13]. - The company believes that its strong R&D capabilities will promote rapid development[7]. - The company is committed to technological innovation, focusing on the rapid development of new products such as L-Malic Acid raw materials and new feed additives[28]. - The company plans to continue developing functional nutritional health products while extending its product chain[7]. - The company has developed pharmaceutical excipients, achieving an increase in production and sales of products like Aspartame and Malic Acid, with plans to expand the product range further[19]. - The company is actively advancing the research and development of L-Malic Acid raw materials, aiming to become the first domestic supplier upon approval[20]. Environmental Initiatives - The company has increased its investment in environmental protection, implementing energy-saving measures and pollution reduction initiatives, including the installation of a regenerative thermal oxidizer (RTO) for tail gas treatment[17]. - The company implemented a clean production approach, resulting in a reduction of harmful waste generation to 1,787 tons in 2018, up from 1,043 tons in 2017[131]. - Total wastewater generated in 2018 was 451,557 tons, an increase of 21.8% from 370,614 tons in 2017[131]. - Total greenhouse gas emissions in 2018 were 99,940 tons, a decrease of 12.1% from 113,632 tons in 2017[131]. - Total electricity consumption in 2018 was 43,289,057 kWh, down 27.2% from 59,498,280 kWh in 2017[141]. - Total water usage in 2018 was 636,216 tons, a decrease of 36.4% from 998,837 tons in 2017[141]. - The company’s hazardous waste generation per unit of production increased to 0.06 tons/ton in 2018 from 0.03 tons/ton in 2017[131]. - The company’s packaging materials accounted for less than 2% of production costs in 2018[140]. Employee Management - The total employee cost for the year was approximately RMB 69,859,000, slightly up from RMB 69,044,000 in 2017[45]. - The company employed a total of 479 employees as of December 31, 2018, down from 577 in 2017[45]. - The incentive bonuses granted to directors and employees amounted to RMB 1,809,000 for the year, compared to none in 2017[45]. - Training expenses for employees increased to RMB 186,000 in 2018, with 98% of employees receiving training[146]. - The average employee count decreased, contributing to a reduction in employee-related costs[45]. - The company emphasizes employee training in safety and operational procedures, with monthly training sessions conducted[146]. Corporate Governance - The company has a robust governance structure with independent directors ensuring transparency and accountability in its operations[55][56][61]. - The board of directors held four meetings during the year ending December 31, 2018, with attendance rates for members as follows: Executive Directors 100%, Non-Executive Directors 75%-100%, Independent Non-Executive Directors 25%-100%[72]. - The company has established a remuneration committee to ensure formal and transparent procedures for developing and overseeing the remuneration policy for directors and senior management, with one meeting held in 2018[82]. - The audit committee consists of four independent non-executive directors, ensuring compliance with listing rules and effective oversight of financial reporting[83]. - The company has adopted a standard code of conduct for securities trading, with one instance of non-compliance reported by a non-executive director's spouse during a restricted period[73]. - The board of directors confirmed their responsibility for preparing the financial statements for the fiscal year ending December 31, 2018, ensuring they reflect the group's financial position accurately[104]. - The company has adopted a risk management policy to guide its internal control systems[109]. - The internal audit mechanism is designed to monitor the overall financial condition and prevent significant asset loss[110]. Shareholding Structure - As of December 31, 2018, the company had significant shareholdings, including 135,000,000 foreign shares held by Hong Kong Newborn Ventures, representing approximately 39.30% of foreign shares[168]. - The company’s shareholding structure includes various categories of shares, with specific percentages outlined for transparency[170]. - The company has a total of 529,700,000 shares issued as of December 31, 2018, consisting of 183,700,000 H shares and 343,500,000 foreign shares[197]. - The largest supplier accounted for 22% of the total purchases in 2018, up from 20% in 2017, while the top five suppliers collectively represented 54% of total purchases[196]. - The largest customer contributed 5% to total sales in 2018, down from 8% in 2017, with the top five customers accounting for 21% of total sales[196]. Risk Management - The board conducted a review of the risk management and internal control systems, finding them sufficient and effective for the year 2018[107]. - The board is responsible for setting strategies, business objectives, and risk appetite, ensuring effective risk management[107]. - No significant risks related to bribery were identified in 2018, and no corruption incidents were reported[152].