Financial Performance - Total revenue for the year was RMB 31,075.8 million[9] - Operating profit amounted to RMB 3,895.2 million[9] - Annual profit reached RMB 2,528.0 million[9] - Basic earnings per share were RMB 52.44[9] - Total operating revenue for 2019 reached RMB 31,075.8 million, a 42.0% increase from RMB 21,886.6 million in 2018[10] - Operating profit surged to RMB 3,895.2 million, reflecting a 505.3% increase compared to RMB 643.5 million in the previous year[10] - Annual profit for 2019 was RMB 2,528.0 million, a significant rise of 2,750.1% from RMB 88.7 million in 2018[10] - Basic earnings per share reached RMB 52.44, up 3,443.2% from RMB 1.48 in 2018[10] - The company maintained a capital return rate of 7.1% and an asset return rate of 3.4% for 2019, compared to 0.3% and 0.1% respectively in 2018[10] - The total operating expenses for the company in 2019 were RMB 27,532.7 million, an increase of 27.9% from RMB 21,527.2 million in 2018[52] - The total operating expenses for the year increased by RMB 6,005.5 million, representing a 27.9% year-on-year growth, reaching RMB 27,532.7 million[54] - The group’s operating profit for the year was RMB 3,895.2 million, up RMB 3,251.7 million or 505.3% from RMB 643.5 million in the previous year[58] - The annual profit for the group reached RMB 2,528.0 million, a substantial increase of RMB 2,439.3 million from RMB 88.7 million in the previous year[66] Assets and Equity - Total assets stood at RMB 76,101.8 million[9] - Total equity was RMB 36,910.3 million[9] - Total assets increased to RMB 76,101.8 million, a growth of 1.9% from RMB 74,687.0 million in 2018[68] - Total liabilities decreased to RMB 39,191.5 million, down 2.0% from RMB 40,009.6 million in 2018[68] - Total equity rose to RMB 36,910.3 million, reflecting a 6.4% increase from RMB 34,677.4 million in 2018[68] Revenue Growth - Domestic business revenue grew by 48.9% to RMB 24,159.9 million, while international business revenue increased by 22.2% to RMB 6,915.9 million[10] - The oilfield technical services segment achieved a revenue of RMB 15,030 million in 2019, representing a 53.5% increase from RMB 9,792.6 million in 2018[28] - The drilling services segment saw a revenue increase of 39.7%, reaching RMB 10,824.8 million in 2019, up from RMB 7,749.9 million in 2018[44] - The company reported a 48.9% increase in domestic revenue, amounting to RMB 24,159.9 million in 2019, up from RMB 16,225.5 million in 2018[47] - The international revenue for the company was RMB 6,915.9 million in 2019, reflecting a 22.2% increase from RMB 5,661.1 million in 2018[47] International Expansion - The company is actively expanding its international business in regions such as Asia-Pacific, Middle East, Americas, Europe, Africa, and Far East[5] - The company has enhanced its international operational management capabilities and strengthened its market expansion efforts, particularly in the Asia-Pacific and Middle East regions[18] - The company successfully promoted a series of proprietary technologies, including the BIODRILL A biodegradable drilling fluid system, contributing to green development in offshore oil fields[19] - The company has made significant breakthroughs in various regions, securing contracts for multiple drilling services and expanding its service offerings[18] - The company operates in over 40 countries and regions, providing integrated oilfield services across six major regions: Asia-Pacific, Middle East, Americas, Europe, Africa, and Far East[113] Technological Innovation - The company aims to leverage technological innovation as a core driver for high-quality global business development in the oilfield services market[15] - The company plans to accelerate the development of key core technologies and enhance its global operational management capabilities in 2020[15] - The company invested CNY 1.073 billion in technology research and development, an increase of 35.3% from CNY 793.75 million in 2018[177] - The company obtained 97 new patents in 2019, including 38 invention patents, marking a 6.6% increase from 91 patents in 2018[179] - The company conducted 172 internal control management training sessions in 2019, with 2,725 participants, reflecting a 8.5% increase in participants from 2018[152] Risk Management and Compliance - The company established a comprehensive risk management framework, conducting annual and quarterly risk assessments to identify and manage significant risks[88] - The internal control system was evaluated as effective, with no significant deficiencies identified in design or execution[87] - The company has strengthened its compliance system, ensuring adherence to laws and regulations, including labor and environmental laws[145] - The company has established a long-term mechanism for risk prevention, conducting special inspections to identify major operational risks[149] - The company has implemented a global management system aligned with international standards, enhancing its internal control capabilities[147] Employee Welfare and Training - The employee turnover rate decreased to 1.6% in 2019 from 2.6% in 2018, reflecting improved employee retention[131] - The company achieved a 100% coverage rate for social insurance and labor contract signing rate in 2019, ensuring employee welfare[131] - The company has enhanced employee welfare and training programs, promoting a diverse and safe work environment[145] - In 2019, the company conducted 409 anti-fraud training sessions, with a total of 16,141 participants, including over 310 from key sensitive positions[159] Environmental and Sustainable Development - The company received multiple awards for sustainable development, including recognition as an "Outstanding Sustainable Development Enterprise" by Sina Finance in 2019[14] - The company plans to prioritize the development of green and low-carbon technologies to strengthen its core competitiveness[78] - The company is committed to environmental protection and occupational health, emphasizing safety production as part of its operational strategy[199] - The company has been recognized for its corporate governance, being included in the Hang Seng Sustainable Development Index for eight consecutive years[81] Corporate Governance - The board of directors confirmed compliance with securities trading standards throughout 2019, ensuring adherence to regulatory requirements[82] - The company has three independent directors with extensive experience in finance, law, and financial reporting, who effectively fulfilled their responsibilities during the reporting period[85] - The board of directors has implemented a diversity policy to enhance governance and attract a wide range of talents[86] - The company’s governance functions are regularly reviewed to ensure compliance with corporate governance codes[90]

Financial Performance - The company achieved a net profit of RMB 2,528,015,269 for the year 2019, with a net profit attributable to shareholders of RMB 2,502,238,023[5]. - The total undistributed profits available for distribution at the end of 2019 amounted to RMB 17,196,349,188, after distributing RMB 763,454,720 in cash dividends[5]. - The company plans to distribute a cash dividend of RMB 0.16 per share based on a total share capital of 4,771,592,000 shares[5]. - The company's operating revenue for 2019 was RMB 31,135.1 million, representing a 41.9% increase compared to RMB 21,945.9 million in 2018[22]. - The net profit attributable to shareholders for 2019 was RMB 2,502.2 million, a significant increase of 3,434.2% from RMB 70.8 million in 2018[22]. - The net cash flow from operating activities reached RMB 6,968.3 million, up 67.0% from RMB 4,172.4 million in the previous year[22]. - The basic earnings per share for 2019 was RMB 0.52, a substantial increase of 5,100.0% compared to RMB 0.01 in 2018[23]. - The weighted average return on equity for 2019 was 7.03%, an increase of 6.82 percentage points from 0.21% in 2018[24]. - The gross profit margin for the company improved by 7.9 percentage points, driven by high-quality development and effective risk management[67]. - Domestic revenue accounted for 77.8% of total revenue, with a year-on-year increase of 48.7%[67]. - International revenue rose to RMB 6,915.9 million, a 22.2% increase from RMB 5,661.1 million in 2018, representing 22.2% of total revenue[67]. Operational Highlights - The company operates in the oil and gas exploration and production sector, providing services across drilling, oilfield technology, marine services, and geophysical exploration[30]. - The drilling services business achieved revenue of RMB 10,841.6 million in 2019, a 39.6% increase from RMB 7,765.6 million in 2018[49]. - The oilfield technical services segment reported revenue of RMB 15,060.9 million, up 53.3% from RMB 9,822.3 million in 2018[54]. - The geophysical exploration and engineering survey services segment reported revenue of RMB 2,173.3 million, a 31.6% increase from RMB 1,651.5 million in 2018[59]. - The number of operating days for drilling platforms increased by 3,599 days to 14,737 days in 2019, representing a growth of 32.3%[51]. - The average daily revenue for self-elevating drilling platforms rose to USD 6.9 in 2019, a 6.2% increase from USD 6.5 in 2018[54]. - The fleet of owned vessels achieved a calendar day utilization rate of 94.3%, an increase of 4.1 percentage points year-on-year[57]. - The number of operating days for the owned fleet increased by 737 days to 30,986 days in 2019, a growth of 2.4%[57]. Strategic Focus and Development - The company maintained a focus on "technology development and internationalization," aiming for high-quality growth and improved profitability[41]. - The company plans to continue its strategic focus on technology and international development in 2020, adapting to macroeconomic and industry changes[48]. - The company has established a mature global service network and long-term relationships with major international and national oil companies, supporting its international operations[36]. - The company has a complete research and development system, with a team of experienced technical service experts, enabling it to provide high-end technical services[36]. - The company emphasized innovation, with significant advancements in proprietary technologies, including high-temperature logging and biodegradable drilling fluids, enhancing operational efficiency[47]. Risk Management - Major risks include market competition risks due to the incomplete recovery of the international oil and gas industry and health, safety, and environmental risks specific to the offshore oilfield service industry[8]. - The company has established a risk management organization to enhance risk identification and mitigation capabilities, focusing on high-quality development[104]. - The company has not reported any significant operating risks that have not been addressed through its risk management strategies[104]. Corporate Governance - The company has a long-term commitment to avoid any new competition with its parent company, ensuring no conflicts arise[107]. - The company has a significant presence in oil and gas exploration, production, and sales, as well as refining and chemical processing[160]. - The company continues to maintain a strong governance structure with independent directors actively involved in oversight[168]. - The board of directors confirmed compliance with the standards set forth in the Listing Rules Appendix 10 for the 12 months ending December 31, 2019[190]. - The chairman and CEO roles are clearly separated, with Qi Meisheng as chairman and Cao Shujie as CEO[200]. Social Responsibility - The company actively participated in poverty alleviation efforts, helping 80 households and 197 individuals escape poverty in 2019, achieving a poverty alleviation rate of 98.01%[147]. - The total amount spent on consumption poverty alleviation reached 3.1752 million yuan, supporting the income increase of impoverished communities[147]. - The company provided employment opportunities for 799 individuals from 87 impoverished counties, significantly improving their quality of life[148]. Future Outlook - The company anticipates capital expenditures of approximately RMB 4.8 billion in 2020, primarily for production base construction and equipment upgrades[97]. - The oilfield service market is expected to remain competitive in 2020, with a focus on cost control and operational efficiency improvements[96]. - The company aims to transition from a heavy asset model to a technology-driven approach, enhancing core competitiveness through green technology innovation[97]. - The company plans to pursue international development and enhance its global operational capabilities through both organic and inorganic growth strategies[95].

Financial Performance - In the first half of 2019, the company achieved operating revenue of RMB 13,552.1 million, a year-on-year increase of 66.7%[12]. - The net profit for the same period was RMB 986.4 million, compared to a loss of RMB 363.3 million in the previous year, marking a significant turnaround[12]. - The group's operating revenue for the first half of 2019 increased by RMB 5,424.2 million, a growth of 66.7% year-on-year[23]. - The group reported an operating profit of RMB 1,601.1 million, a turnaround from an operating loss of RMB 239.8 million in the same period last year[30]. - Basic earnings per share for the first half of 2019 were RMB 20.39, compared to a loss per share of RMB 7.86 in the same period last year[37]. - The group reported a profit before tax of RMB 1,382,122,000, with income tax expenses of RMB 395,767,000 for the period[118]. - The total comprehensive income for the period amounted to RMB 939,943 thousand, compared to a total comprehensive loss of RMB 287,932 thousand in the previous year[73]. Revenue Segmentation - The drilling services segment reported revenue of RMB 4,489.2 million, an increase of 49.5% compared to RMB 3,003.5 million in the same period last year[13]. - The oilfield technical services revenue surged to RMB 6,624.2 million, marking a 95.0% increase from RMB 3,396.6 million in the previous year[16]. - The marine services segment's revenue grew by 15.9% to RMB 1,440.2 million, driven by increased operational volume of owned and chartered vessels[25]. - The geophysical acquisition and engineering survey services segment achieved a revenue of RMB 998.5 million, a significant increase of 105.6% year-on-year[21]. - The ship service business revenue increased by 15.9% to RMB 1,440.2 million, with external chartered vessels contributing RMB 391.4 million[18]. Operational Efficiency - The total operating days for drilling platforms in the first half of 2019 were 6,913 days, representing a year-on-year increase of 33.8% from 5,166 days[14]. - The average daily revenue for self-elevating drilling platforms increased by 19.3% to USD 6.8 thousand per day, while semi-submersible platforms saw a 3.4% increase to USD 15.1 thousand per day[15]. - The platform calendar day utilization rate improved by 12.5 percentage points to 76.6% due to a reduction in standby days[200]. - The company has 52 platforms in operation and management, with 32 operating in Chinese waters and 10 in international regions[200]. Investment and Capital Expenditures - Capital expenditures for the first half of 2019 were RMB 1,003.6 million, an increase of RMB 408.3 million or 68.6% compared to RMB 595.3 million in the same period last year[44]. - The company plans to focus capital expenditures on upgrading drilling platforms and acquiring oilfield technology service equipment[46]. - The company has capital commitments of RMB 1,227,727,000 as of June 30, 2019, significantly increased from RMB 392,658,000 as of December 31, 2018[154]. Technological Advancements - The company's technical segment revenue share increased to 49%, reflecting a strong focus on technology-driven innovation[7]. - The group achieved significant technological advancements, including the development of new high-temperature isolation agents and the registration of trademarks for innovative logging tools[17]. - The technical research and development efforts are market-driven, leading to the transformation and application of multiple research outcomes[7]. - The company has made significant breakthroughs in green technology, including the EFDT formation spectral analysis technology and biodegradable drilling fluid systems[194]. Market Expansion - The company plans to continue focusing on domestic and international exploration and development investments while managing risks effectively[9]. - The company is actively expanding its overseas business while maintaining a leading position in the domestic offshore market[194]. - The group successfully secured multiple contracts in international markets, including a two-year cementing and workover service contract in Indonesia[17]. - The company has successfully entered new markets, including high-end drilling services in New Zealand and a three-year drilling service contract in Indonesia[200]. Financial Position and Assets - As of June 30, 2019, total assets were RMB 75,423.1 million, an increase of RMB 736.1 million or 1.0% from RMB 74,687.0 million at the end of 2018[38]. - The company's net current assets increased to RMB 5.17 billion from RMB 4.70 billion as of December 31, 2018, with the current ratio rising from 1.28 to 1.30[62]. - The debt-to-equity ratio improved to 49% as of June 30, 2019, down from 50% at the end of 2018[63]. - The total liabilities amounted to RMB 40,144,432 thousand, with current liabilities at RMB 17,097,438 thousand, showing a slight increase from RMB 17,011,043 thousand[75]. Legal and Compliance Matters - The company has ongoing legal proceedings against Equinor regarding contract disputes, with claims amounting to USD 15,238,596[66]. - The company is involved in a legal case against Equinor regarding compensation for losses due to the illegal termination of a contract, with no further court litigation initiated as of the reporting date[85]. - The company was recognized for its compliance and investor relations, being listed in the A-share listed companies' IR interaction activity ranking[9]. Sustainability and Environmental Focus - The company emphasized green development and sustainable practices, achieving breakthroughs in various environmental technologies[7]. - The company is actively pursuing green development initiatives, including the construction of two LNG-powered supply vessels[18]. - The company emphasizes sustainable development and low-carbon environmental protection in its operational strategies[194].

[Important Notice](index=3&type=section&id=Item%20I.%20Important%20Notice) The board, supervisory board, and senior management guarantee the report's truthfulness, accuracy, and completeness, assuming legal responsibility [Report Declaration](index=3&type=section&id=Report%20Declaration) The company's board of directors, supervisory board, and senior management guarantee the truthfulness, accuracy, and completeness of this quarterly report, assuming legal responsibility - The company's board of directors, supervisory board, directors, supervisors, and senior management guarantee the truthfulness, accuracy, and completeness of the quarterly report, assuming individual and joint legal responsibility[3](index=3&type=chunk) - This first quarter report is **unaudited**[3](index=3&type=chunk) [Company Profile](index=3&type=section&id=Item%20II.%20Company%20Profile) This section provides an overview of the company's key financial data, non-recurring gains and losses, shareholder information, and operating performance review [Key Financial Data](index=3&type=section&id=2.1%20Key%20Financial%20Data) Q1 2019 saw stable assets, **72.3%** operating revenue growth, net profit turning profitable, and significantly improved operating cash flow Overview of Key Financial Data for Q1 2019 | Indicator | End of Reporting Period / Current Period (million yuan) | Beginning of Reporting Period / Prior Year Period (million yuan) | Change (%) / Change (percentage points) | | :--- | :--- | :--- | :--- | | **Balance Sheet** | | | | | Total Assets | 75,972.5 | 76,157.8 (adjusted at period-beginning) | -0.2% | | Net Assets Attributable to Shareholders of Listed Company | 34,507.1 | 34,524.2 (adjusted at period-beginning) | -0.0% | | **Income Statement** | | | | | Operating Revenue | 5,907.8 | 3,427.9 | 72.3% | | Net Profit Attributable to Shareholders of Listed Company | 31.0 | -651.1 | N/A (turned profitable) | | Net Profit Attributable to Shareholders of Listed Company (Excluding Non-Recurring Gains/Losses) | -47.1 | -903.3 | N/A (reduced losses) | | Weighted Average Return on Net Assets (%) | 0.1 | -1.9 | Increased 2.0 percentage points | | Basic Earnings Per Share (yuan/share) | 0.01 | -0.14 | N/A (turned profitable) | | **Cash Flow Statement** | | | | | Net Cash Flow from Operating Activities | -5.3 | -847.9 | N/A (decreased outflow) | - Due to the initial adoption of new leasing standards, only the data at the beginning of the reporting period in the table has been adjusted[4](index=4&type=chunk) [Non-Recurring Gains and Losses](index=3&type=section&id=Non-Recurring%20Gains%20and%20Losses%20Items%20and%20Amounts) Q1 2019 non-recurring gains and losses totaled **78.05 million yuan**, mainly from wealth management product income and non-operating income Non-Recurring Gains and Losses Items and Amounts for Q1 2019 | Item | Amount for Current Period (yuan) | | :--- | :--- | | Gains/Losses from Disposal and Scrapping of Non-Current Assets | -9,117,773 | | Government Subsidies Included in Current Period's Gains/Losses | 13,546,495 | | Income from Wealth Management Products Included in Current Period's Gains/Losses | 69,445,435 | | Other Non-Operating Income and Expenses Apart from the Above | 16,238,629 | | Income Tax Impact | -12,061,118 | | **Total** | **78,051,668** | [Shareholder Information](index=4&type=section&id=2.2%20Total%20Number%20of%20Shareholders%2C%20Top%20Ten%20Shareholders%2C%20and%20Top%20Ten%20Circulating%20Shareholders%20%28or%20Non-Restricted%20Shareholders%29%20at%20Period-End) The company had **65,113 shareholders** at period-end, with China National Offshore Oil Corporation (**50.53%**) and HKSCC Nominees Limited (**37.90%**) as the top two - As of the end of the reporting period, the total number of shareholders was **65,113**[7](index=7&type=chunk) Top Ten Shareholders' Holdings | Shareholder Name | Number of Shares Held at Period-End (shares) | Proportion (%) | Share Status | Quantity | Shareholder Nature | | :--- | :--- | :--- | :--- | :--- | :--- | | China National Offshore Oil Corporation | 2,410,849,300 | 50.53 | None | 0 | State-owned Legal Person | | HKSCC Nominees Limited | 1,808,351,728 | 37.90 | None | 0 | Other | | China Securities Finance Corporation Limited | 140,604,876 | 2.95 | None | 0 | State-owned Legal Person | | Central Huijin Asset Management Co., Ltd. | 29,883,000 | 0.63 | None | 0 | State-owned Legal Person | | Hong Kong Securities Clearing Company Limited | 6,731,466 | 0.14 | None | 0 | Other | - The shares held by HKSCC Nominees Limited are held on behalf of others[9](index=9&type=chunk) [Operating Performance Review](index=5&type=section&id=2.4%20Operating%20Performance%20Review) Q1 2019 operating revenue surged **72.3%** due to market recovery and increased E&P investment, leading to significantly improved profitability and increased workloads across all service segments - In Q1 2019, the oilfield services market showed signs of recovery with increased upstream exploration and development investment, though market competition remained intense[10](index=10&type=chunk) Key Operating Performance for Q1 2019 | Indicator | Q1 2019 (million yuan) | Year-on-Year Growth (%) | | :--- | :--- | :--- | | Operating Revenue | 5,907.8 | 72.3 | | Total Profit | 168.5 | N/A (loss in prior year period) | | Net Profit | 38.6 | N/A (loss in prior year period) | - Excluding the impact of exchange losses and asset disposal gains, total profit was **274.5 million yuan**, a year-on-year increase of **833.4 million yuan**[10](index=10&type=chunk)[11](index=11&type=chunk) [Overall Operating Overview](index=5&type=section&id=Overall%20Operating%20Overview) The company achieved significant market expansion and refined management, with double-digit growth in drilling rig operations and utilization, and steady increases in marine and oilfield technical services workloads - The group continuously enhanced refined management, achieving significant domestic and international market expansion results[10](index=10&type=chunk) - Both jack-up and semi-submersible drilling rig operations increased significantly, with calendar day utilization showing **double-digit growth**[10](index=10&type=chunk) - Workloads across all business lines for marine support and oilfield technical services maintained a steady increase[10](index=10&type=chunk) [Drilling Services](index=6&type=section&id=Drilling%20Services) Drilling services operations and utilization significantly increased, with total operating days up **45.6%** to **3,312 days** and calendar day utilization up **15.9 percentage points** to **74.7%** Key Operating Data for Drilling Services | Indicator | March 31, 2019 | March 31, 2018 | Change (%) / (percentage points) | | :--- | :--- | :--- | :--- | | Operating Days (days) | 3,312 | 2,275 | 45.6% | | Jack-up Rig Operating Days | 2,521 | 1,817 | 38.7% | | Semi-submersible Rig Operating Days | 791 | 458 | 72.7% | | Calendar Day Utilization Rate | 74.7% | 58.8% | Increased 15.9 percentage points | | Jack-up Rig Calendar Day Utilization Rate | 77.8% | 63.1% | Increased 14.7 percentage points | | Semi-submersible Rig Calendar Day Utilization Rate | 66.4% | 46.3% | Increased 20.1 percentage points | - Five modular drilling rigs operating in the Gulf of Mexico worked **360 days** in the current period, an increase of **270 days** year-on-year, with calendar day utilization increasing by **60.0 percentage points**[16](index=16&type=chunk) [Marine Support Services](index=6&type=section&id=Marine%20Support%20Services%28Owned%20Fleet%20%29) Owned fleet operating days increased **5.4%** to **7,716 days**, with calendar day utilization up **7.2 percentage points** to **95.3%**, reaching a new high, and chartered vessel operations also significantly increased Key Operating Data for Marine Support Services (Owned Fleet) | Indicator | March 31, 2019 | March 31, 2018 | Change (%) / (percentage points) | | :--- | :--- | :--- | :--- | | Operating Days (days) | 7,716 | 7,319 | 5.4% | | Calendar Day Utilization Rate | 95.3% | 88.1% | Increased 7.2 percentage points | | Multi-purpose Vessel Operating Days | 323 | 132 | 144.7% | | Multi-purpose Vessel Calendar Day Utilization Rate | 89.7% | 36.7% | Increased 53.0 percentage points | - Owned fleet calendar day utilization increased by **7.2 percentage points** year-on-year to **95.3%**, reaching a new high in recent years[16](index=16&type=chunk) - The group's chartered vessel operations also significantly increased in the current period, totaling **3,301 days**, a year-on-year increase of **45.5%**[16](index=16&type=chunk) [Geophysical Prospecting and Engineering Survey Services](index=7&type=section&id=Geophysical%20Prospecting%20and%20Engineering%20Survey%20Services) Subsea cable operations substantially increased by **5,266.7%**, while 2D and 3D acquisition operations temporarily declined due to equipment adjustments and maintenance Key Operating Data for Geophysical Prospecting and Engineering Survey Services | Indicator | March 31, 2019 | March 31, 2018 | Change (%) | | :--- | :--- | :--- | :--- | | 2D Acquisition (km) | 8,086 | 9,803 | -17.5 | | 3D Acquisition (sq km) | 5,949 | 8,364 | -28.9 | | Subsea Cable (sq km) | 322 | 6 | 5,266.7 | - 2D and 3D acquisition operations experienced a temporary year-on-year decline, primarily due to the group's timely adjustment of equipment layout, work area transfers, and factory maintenance to meet subsequent robust market demand[16](index=16&type=chunk) [Significant Events](index=7&type=section&id=Item%20III.%20Significant%20Events) This section details significant changes in financial statement items, progress of important legal matters, and the company's performance outlook [Analysis of Significant Changes in Key Financial Statement Items and Indicators](index=7&type=section&id=3.1%20Significant%20Changes%20and%20Reasons%20for%20the%20Company%27s%20Key%20Financial%20Statement%20Items%20and%20Financial%20Indicators) Operating revenue, investment income, and short-term borrowings significantly increased, while asset disposal gains and trading financial assets substantially decreased, reflecting industry recovery and financing activities - Operating revenue increased by **72.3%** year-on-year to **5,907.8 million yuan**, primarily influenced by industry recovery and increased upstream exploration investment[18](index=18&type=chunk) - Investment income increased by **278.0%** year-on-year to **140.6 million yuan**, mainly due to good performance of joint ventures and increased income from wealth management and money market funds[23](index=23&type=chunk) - Short-term borrowings increased by **71.7%** from the beginning of the year to **2,356.7 million yuan**, primarily due to an additional **150 million USD** in short-term borrowings[30](index=30&type=chunk) [Income Statement Item Changes](index=7&type=section&id=Income%20Statement%20Item%20Changes) Operating revenue and cost grew with workload, sales expenses rose, investment income increased, while asset disposal gains and fair value change gains decreased, and income tax expense surged due to profitability Major Income Statement Item Changes | Item | Q1 2019 (million yuan) | Q1 2018 (million yuan) | Change (million yuan) | Growth (%) | Primary Reason | | :--- | :--- | :--- | :--- | :--- | :--- | | Operating Revenue | 5,907.8 | 3,427.9 | 2,479.9 | 72.3 | Industry recovery, increased workload | | Operating Cost | 5,233.6 | 3,587.9 | 1,645.7 | 45.9 | Increased workload, increased cost input | | Selling Expenses | 6.8 | 2.7 | 4.1 | 151.9 | Increased sales volume | | Asset Impairment Losses | 0.9 | 2.0 | -1.1 | -55.0 | Decreased inventory impairment provision | | Other Income | 13.5 | 19.4 | -5.9 | -30.4 | Decreased government subsidies | | Investment Income | 140.6 | 37.2 | 103.4 | 278.0 | Good performance of joint ventures, increased wealth management income | | Gains from Changes in Fair Value | -21.5 | 19.5 | -41.0 | -210.3 | Redemption of money market funds and maturity of floating-rate wealth management products | | Gains from Asset Disposal | -0.2 | 219.8 | -220.0 | N/A | No disposal of large equipment | | Non-Operating Income | 11.9 | 33.5 | -21.6 | -64.5 | Decreased insurance claims | | Non-Operating Expenses | 4.5 | 7.3 | -2.8 | -38.4 | Decreased compensation for equipment dropped in well | | Income Tax Expense | 129.9 | 32.4 | 97.5 | 300.4 | Increased company profitability | [Balance Sheet Item Changes](index=9&type=section&id=Balance%20Sheet%20Item%20Changes) Trading financial assets decreased, short-term borrowings increased, contract liabilities and other current liabilities rose, long-term borrowings decreased, and other comprehensive income decreased, driven by financing and operational changes Major Balance Sheet Item Changes (Period-End vs. Period-Beginning) | Item | March 31, 2019 (million yuan) | January 1, 2019 (million yuan) | Change (million yuan) | Growth (%) | Primary Reason | | :--- | :--- | :--- | :--- | :--- | :--- | | Trading Financial Assets | 600.3 | 1,749.7 | -1,149.4 | -65.7 | Wealth management maturity and money market fund redemption | | Short-term Borrowings | 2,356.7 | 1,372.6 | 984.1 | 71.7 | Increased **150 million USD** in short-term borrowings | | Contract Liabilities | 219.7 | 154.4 | 65.3 | 42.3 | Received mobilization fees | | Taxes Payable | 536.1 | 768.1 | -232.0 | -30.2 | Decreased VAT payable | | Other Current Liabilities | 415.9 | 202.1 | 213.8 | 105.8 | Increased deferred output VAT | | Long-term Borrowings | 486.2 | 787.6 | -301.4 | -38.3 | Repaid principal of **42 million USD** and **9 million yuan** | | Other Comprehensive Income | -198.5 | -150.5 | -48.0 | N/A | Impact of exchange rate fluctuations | [Cash Flow Statement Item Changes](index=10&type=section&id=Cash%20Flow%20Statement%20Item%20Changes) Operating cash outflow significantly decreased, while investing and financing cash flows turned into significant inflows, driven by increased cash from services, investment recovery, and borrowings Major Cash Flow Statement Item Changes (Current Period vs. Prior Year Period) | Item | Q1 2019 (million yuan) | Q1 2018 (million yuan) | Change (million yuan) | Change Type | Primary Reason | | :--- | :--- | :--- | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | -5.3 | -847.9 | 842.6 | Decreased outflow | Cash received for providing labor and services increased by **1,930.9 million yuan** | | Net Cash Flow from Investing Activities | 155.7 | -3,731.5 | 3,887.2 | Increased inflow | Cash from investment recovery increased by **1,401.4 million yuan**, and cash paid for investments decreased by **2,977.1 million yuan** | | Net Cash Flow from Financing Activities | 320.7 | -521.3 | 842.0 | Increased inflow | Cash received from borrowings increased by **1,019.1 million yuan** | | Effect of Exchange Rate Changes on Cash and Cash Equivalents | -30.4 | -136.1 | 105.7 | Decreased outflow | Impact of exchange rate fluctuations | [Progress of Significant Events](index=10&type=section&id=3.2%20Analysis%20of%20Progress%2C%20Impact%2C%20and%20Solutions%20for%20Significant%20Events) Ongoing litigation between COM and Equinor Petroleum AS concerns the COSLInnovator drilling rig contract termination and COSLPromoter cost compensation, with both parties having filed appeals - COSL Offshore Management AS (COM) filed a lawsuit against Statoil Petroleum AS (now Equinor Petroleum AS) for the termination of the COSLInnovator drilling rig operating contract, alleging unlawful termination and claiming compensation[38](index=38&type=chunk)[39](index=39&type=chunk) - Following the Oslo District Court's judgment on May 15, 2018, both Equinor and COM have filed appeals with the Norwegian Court of Appeal[38](index=38&type=chunk)[39](index=39&type=chunk) - COM also claimed **15,238,596 USD** from Statoil for costs incurred to meet requirements for the COSLPromoter drilling rig and losses during the reduced day rate period[39](index=39&type=chunk) [Performance Forecast and Outlook](index=11&type=section&id=3.4%20Warning%20and%20Explanation%20of%20Potential%20Cumulative%20Net%20Loss%20or%20Significant%20Change%20Compared%20to%20Prior%20Year%20Period%20from%20Year-Beginning%20to%20End%20of%20Next%20Reporting%20Period) The company expects ample workload in Q2 and aims for better year-on-year operating performance through refined management and cost control - In Q1 2019, domestic exploration and development demand further increased, leading to significant year-on-year growth in workloads across the company's main business segments, achieving operating revenue of **5.91 billion yuan** and net profit of **39 million yuan**, representing substantial performance growth compared to Q1 2018[39](index=39&type=chunk) - The company expects to maintain a relatively ample workload in Q2 and will continue to enhance refined management and strengthen control over incremental variable costs resulting from increased operations[39](index=39&type=chunk) - The company will continue to strive for better year-on-year operating performance through various initiatives[39](index=39&type=chunk) [Appendix](index=12&type=section&id=Item%20IV.%20Appendix) This section includes the company's unaudited Q1 2019 financial statements and explanations of new accounting standards adjustments [Financial Statements](index=12&type=section&id=4.1%20Financial%20Statements) This section presents the company's unaudited consolidated and parent company balance sheets, income statements, and cash flow statements for Q1 2019, detailing financial position and operating results - Financial statements include consolidated and parent company balance sheets, income statements, and cash flow statements[41](index=41&type=chunk)[43](index=43&type=chunk)[45](index=45&type=chunk)[46](index=46&type=chunk)[48](index=48&type=chunk)[49](index=49&type=chunk) - All financial statements are **unaudited**[43](index=43&type=chunk)[46](index=46&type=chunk)[48](index=48&type=chunk)[49](index=49&type=chunk) [Consolidated Balance Sheet](index=12&type=section&id=Consolidated%20Balance%20Sheet) As of March 31, 2019, consolidated total assets were **75.97 billion yuan**, liabilities **41.31 billion yuan**, and shareholders' equity **34.66 billion yuan**, with current and non-current asset breakdowns Key Consolidated Balance Sheet Data (March 31, 2019) | Item | Amount (yuan) | | :--- | :--- | | Total Assets | 75,972,545,958 | | Total Current Assets | 22,543,996,873 | | Total Non-Current Assets | 53,428,549,085 | | Total Liabilities | 41,313,036,986 | | Total Current Liabilities | 17,837,772,936 | | Total Non-Current Liabilities | 23,475,264,050 | | Total Shareholders' Equity | 34,659,508,972 | [Parent Company Balance Sheet](index=13&type=section&id=Parent%20Company%20Balance%20Sheet) As of March 31, 2019, parent company total assets were **62.78 billion yuan**, liabilities **23.78 billion yuan**, and shareholders' equity **39.00 billion yuan**, with current and non-current asset breakdowns Key Parent Company Balance Sheet Data (March 31, 2019) | Item | Amount (yuan) | | :--- | :--- | | Total Assets | 62,782,654,976 | | Total Current Assets | 20,324,720,816 | | Total Non-Current Assets | 42,457,934,160 | | Total Liabilities | 23,780,550,375 | | Total Current Liabilities | 14,471,014,280 | | Total Non-Current Liabilities | 9,309,536,095 | | Total Shareholders' Equity | 39,002,104,601 | [Consolidated Income Statement](index=14&type=section&id=Consolidated%20Income%20Statement) In Q1 2019, consolidated total operating revenue was **5.91 billion yuan** (**72.3%** increase), with net profit of **38.62 million yuan** (turning profitable), and net profit attributable to parent company shareholders at **30.95 million yuan** Key Consolidated Income Statement Data (Q1 2019) | Item | Q1 2019 (yuan) | Q1 2018 (yuan) | | :--- | :--- | :--- | | Total Operating Revenue | 5,907,777,887 | 3,427,873,140 | | Total Operating Cost | 5,879,059,225 | 4,361,556,179 | | Operating Profit | 161,163,573 | -637,704,224 | | Total Profit | 168,501,891 | -611,552,363 | | Net Profit | 38,618,241 | -643,988,131 | | Net Profit Attributable to Parent Company Shareholders | 30,952,844 | -651,134,585 | | Basic Earnings Per Share (yuan/share) | 0.0065 | -0.1365 | [Parent Company Income Statement](index=16&type=section&id=Parent%20Company%20Income%20Statement) In Q1 2019, parent company operating revenue was **4.55 billion yuan**, and net profit was **437.71 million yuan**, achieving substantial profitability and significantly improving from prior year losses Key Parent Company Income Statement Data (Q1 2019) | Item | Q1 2019 (yuan) | Q1 2018 (yuan) | | :--- | :--- | :--- | | Operating Revenue | 4,549,404,036 | 2,751,054,232 | | Operating Profit | 492,226,097 | -129,875,648 | | Total Profit | 499,490,135 | -104,069,501 | | Net Profit | 437,713,227 | -118,791,204 | [Consolidated Cash Flow Statement](index=16&type=section&id=Consolidated%20Cash%20Flow%20Statement) In Q1 2019, consolidated operating cash flow was **-5.30 million yuan** (decreased outflow), investing cash flow was **155.69 million yuan** (net inflow), and financing cash flow was **320.72 million yuan** (net inflow) Key Consolidated Cash Flow Statement Data (Q1 2019) | Item | Q1 2019 (yuan) | Q1 2018 (yuan) | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | -5,304,362 | -847,924,632 | | Net Cash Flow from Investing Activities | 155,691,790 | -3,731,502,133 | | Net Cash Flow from Financing Activities | 320,721,836 | -521,307,936 | | Net Increase in Cash and Cash Equivalents | 440,665,006 | -5,236,841,247 | [Parent Company Cash Flow Statement](index=17&type=section&id=Parent%20Company%20Cash%20Flow%20Statement) In Q1 2019, parent company operating cash flow was **80.90 million yuan** (improved outflow), investing cash flow was **622.37 million yuan** (net inflow), and financing cash flow was **-434.84 million yuan** (increased outflow) Key Parent Company Cash Flow Statement Data (Q1 2019) | Item | Q1 2019 (yuan) | Q1 2018 (yuan) | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 80,898,014 | -824,694,703 | | Net Cash Flow from Investing Activities | 622,372,944 | -3,338,224,684 | | Net Cash Flow from Financing Activities | -434,841,129 | -281,250,767 | | Net Increase in Cash and Cash Equivalents | 263,956,636 | -4,528,994,800 | [Explanation of New Accounting Standards Adjustments](index=18&type=section&id=4.2%20Adjustments%20to%20Relevant%20Financial%20Statement%20Items%20at%20the%20Beginning%20of%20the%20First%20Year%20of%20Initial%20Application%20of%20New%20Financial%20Instruments%2C%20New%20Revenue%20and%20New%20Leasing%20Standards) The company initially adopted new leasing standards, adjusting Q1 2019 balance sheet items, primarily impacting right-of-use assets, lease liabilities, and other related accounts - The company initially adopted new leasing standards, adjusting relevant financial statement items as of **January 1, 2019**[51](index=51&type=chunk)[53](index=53&type=chunk) - Adjustments primarily impacted right-of-use assets, lease liabilities, prepayments, inventories, notes and accounts payable, non-current liabilities due within one year, deferred tax assets/liabilities, and undistributed profits[51](index=51&type=chunk)[52](index=52&type=chunk)[53](index=53&type=chunk)[54](index=54&type=chunk) [Consolidated Balance Sheet Adjustments](index=19&type=section&id=Consolidated%20Balance%20Sheet%20Adjustments) Consolidated total assets increased by **1.47 billion yuan**, liabilities by **1.48 billion yuan**, and parent company net assets decreased by **5.71 million yuan** due to new leasing standards, primarily adding right-of-use assets and lease liabilities Major Consolidated Balance Sheet Adjustments (January 1, 2019) | Item | December 31, 2018 (yuan) | January 1, 2019 (yuan) | Adjustment Amount (yuan) | | :--- | :--- | :--- | :--- | | Total Assets | 74,687,004,562 | 76,157,798,536 | 1,470,793,974 | | Right-of-Use Assets | N/A | 1,480,884,837 | 1,480,884,837 | | Total Liabilities | 40,009,598,701 | 41,486,105,110 | 1,476,506,409 | | Lease Liabilities | N/A | 1,088,795,411 | 1,088,795,411 | | Total Shareholders' Equity Attributable to Parent Company | 34,529,875,879 | 34,524,163,444 | -5,712,435 | [Parent Company Balance Sheet Adjustments](index=20&type=section&id=Parent%20Company%20Balance%20Sheet%20Adjustments) Parent company total assets increased by **1.37 billion yuan**, liabilities by **1.37 billion yuan**, and shareholders' equity increased by **2.64 million yuan** due to new leasing standards, primarily adding right-of-use assets and lease liabilities Major Parent Company Balance Sheet Adjustments (January 1, 2019) | Item | December 31, 2018 (yuan) | January 1, 2019 (yuan) | Adjustment Amount (yuan) | | :--- | :--- | :--- | :--- | | Total Assets | 61,919,540,075 | 63,294,177,265 | 1,374,637,190 | | Right-of-Use Assets | N/A | 1,383,927,715 | 1,383,927,715 | | Total Liabilities | 23,321,465,291 | 24,693,457,547 | 1,371,992,256 | | Lease Liabilities | N/A | 994,432,873 | 994,432,873 | | Total Shareholders' Equity | 38,598,074,784 | 38,600,719,718 | 2,644,934 | [Explanation of Retrospective Adjustments](index=21&type=section&id=4.3%20Explanation%20of%20Retrospective%20Adjustments%20to%20Prior%20Period%20Comparative%20Data%20Upon%20Initial%20Application%20of%20New%20Financial%20Instruments%20and%20New%20Leasing%20Standards) Initial adoption of new financial instruments and leasing standards does not involve retrospective adjustments to prior period comparative data - The initial adoption of new financial instruments and new leasing standards does **not involve retrospective adjustments** to prior period comparative data[55](index=55&type=chunk) [Audit Report](index=21&type=section&id=4.4%20Audit%20Report) This quarterly report is unaudited - This quarterly report is **unaudited**[55](index=55&type=chunk)

Financial Performance - Total revenue for 2018 was RMB 21,886.6 million, an increase from RMB 17,458.6 million in 2017, representing a growth of 25.4%[8] - Operating profit for 2018 was RMB 643.5 million, compared to RMB 706.3 million in 2017, reflecting a decrease of 8.9%[8] - Annual profit for 2018 was RMB 88.7 million, up from RMB 80.9 million in 2017, indicating a growth of 9.6%[8] - Basic earnings per share for 2018 were RMB 1.48, a significant increase of 64.4% from RMB 0.90 in 2017[8] - The net profit for 2018 was RMB 88.7 million, representing a 9.6% increase from RMB 80.9 million in 2017[10] - The group's total operating revenue for 2018 increased by RMB 4,428.1 million to RMB 21,886.6 million, representing a growth of 25.4% year-on-year[44] - The international market contributed RMB 5,661.1 million to total revenue, accounting for 25.9% of the group's operating income, an increase of 1.1 percentage points year-on-year[49] Assets and Equity - Total assets as of 2018 amounted to RMB 74,687.0 million, with total equity at RMB 34,677.4 million[7] - The total equity at the end of 2018 was RMB 34,677.4 million, remaining stable compared to RMB 34,687.5 million at the end of 2017[10] - Total assets as of December 31, 2018, were RMB 74,687.0 million, a 1.0% increase from RMB 73,941.3 million at the end of 2017[67] Debt and Capital Return - The capital return rate for 2018 was 0.3%, up from 0.2% in 2017[8] - The debt-to-equity ratio for 2018 was 49.8%, an increase from 44.9% in 2017[8] Business Segments Performance - Domestic business revenue for 2018 was RMB 16,225.5 million, while international business revenue was RMB 5,661.1 million[8] - The drilling services segment generated revenue of RMB 7,749.9 million, up 22.2% from RMB 6,340.9 million, due to increased platform utilization and operational volume[45] - The oilfield services business achieved revenue of RMB 9,792.6 million in 2018, a 40.0% increase from RMB 6,995.6 million in 2017[29] - The ship service business generated revenue of RMB 2,698.1 million in 2018, up 10.7% from RMB 2,437.8 million in 2017[32] - The geophysical exploration and engineering survey services revenue decreased by 2.3% to RMB 1,646.0 million in 2018 from RMB 1,684.3 million in 2017[37] Operational Efficiency - The number of operating days for drilling platforms increased to 11,138 days in 2018, up by 2,141 days or 23.8% compared to 8,997 days in 2017[25] - The utilization rate of available days for drilling platforms improved to 72.5% in 2018, an increase of 12.9 percentage points from 59.6% in 2017[25] - The average daily revenue for self-elevating drilling platforms decreased to $6.5 million in 2018, down 8.5% from $7.1 million in 2017[27] - The average daily revenue for semi-submersible drilling platforms also declined to $17.3 million in 2018, a decrease of 15.2% from $20.4 million in 2017[27] Market Expansion and Strategy - The company aims to expand its international market presence, particularly in the Asia-Pacific, Middle East, Americas, Europe, Africa, and Far East regions[4] - The company plans to continue its international development strategy and enhance its global market capabilities in 2019[19] - The company aims to enhance its core competitiveness through technological development and international expansion strategies[16] - The company plans to continue expanding its market presence and enhancing its technical capabilities to improve profitability[76] Sustainability and Corporate Governance - The company is committed to sustainable development, balancing economic, social, and environmental growth[3] - The company has been recognized for its sustainable development efforts, being included in the Hang Seng Sustainable Development Index for seven consecutive years[15] - The company committed to adhering to the ten principles advocated by the UN Global Compact[105] - The sustainability report for 2018 covers performance in economic, environmental, and social aspects from January 1 to December 31, 2018[105] - The company emphasizes compliance with laws and regulations, ensuring the protection of employee rights and promoting fair competition, which contributes to its sustainable development goals[131] Risk Management and Safety - The company has implemented a comprehensive risk management system, focusing on major risks and enhancing its ability to respond to potential threats, ensuring overall stability in 2018[134] - The company has developed a comprehensive QHSE management system, aligning with international standards and enhancing operational safety[187] - The safety performance statistics showed 21 safety production accidents in 2018, an increase from 9 in 2017[191] - The OSHA recordable incident rate for 2018 was 0.08, compared to 0.06 in 2017, indicating a slight increase in incidents[191] Research and Development - The company invested CNY 79.375 million in R&D, an increase from CNY 63.415 million in 2017, representing a growth of approximately 25.5%[168] - The company obtained 91 new patents in 2018, including 42 invention patents, compared to 74 patents in 2017, indicating a 22.9% increase in total patents granted[169] - The company undertook 197 R&D projects in 2018, reflecting its commitment to enhancing technology supply quality and efficiency[169] Employee and Social Responsibility - The employee turnover rate was 2.6% in 2018, slightly higher than 2.2% in 2017[119] - The company maintained a 100% social insurance coverage rate for its employees in 2018[119] - The company participated in various social welfare activities, including poverty alleviation and community support, reflecting its commitment to corporate social responsibility[127]

Financial Performance - Operating revenue for the first nine months was RMB 13,718.4 million, an increase of 16.5% compared to the same period last year[6]. - The net profit attributable to shareholders of the listed company for the reporting period was RMB -763.8 million, worsening from RMB -502.9 million year-on-year[7]. - The weighted average return on net assets decreased by 0.30 percentage points to -0.80%[7]. - The net profit for the same period was RMB -263.1 million, indicating a loss[12]. - Total revenue for Q3 2018 reached ¥5,578,352,285, an increase of 19.6% compared to ¥4,662,614,813 in Q3 2017[63]. - Net profit for Q3 2018 was ¥100,185,699, down 54.5% from ¥220,394,489 in Q3 2017[63]. - Net profit for the first nine months of 2018 was RMB 1,235,357,354, up 48.1% from RMB 834,264,406 in the same period last year[67]. - Total profit for Q3 2018 was RMB 586,360,235, an increase of 26.7% from RMB 462,633,911 in Q3 2017[67]. Assets and Liabilities - Total assets at the end of the reporting period were RMB 73,887.3 million, a decrease of 0.1% compared to the beginning of the period[6]. - The total liabilities of the company stood at CNY 39.56 billion, compared to CNY 39.25 billion at the beginning of the year, reflecting an increase of about 0.8%[58]. - The company's equity attributable to shareholders decreased to CNY 34.19 billion from CNY 34.56 billion at the beginning of the year, a decline of approximately 1.1%[58]. - The company's cash and cash equivalents decreased to CNY 4.31 billion from CNY 9.08 billion at the beginning of the year, representing a decline of approximately 52.5%[56]. - Trade and accounts receivable increased to RMB 9,985.6 million, up RMB 3,647.4 million or 57.5% from RMB 6,338.2 million at the beginning of the year, influenced by industry conditions and customer approval processes[32]. - Inventory increased to RMB 1,543.9 million, an increase of RMB 395.4 million or 34.4% from RMB 1,148.5 million at the beginning of the year, due to increased production materials in line with operational volume[34]. - The company reported a significant increase in other current assets, rising to CNY 3.41 billion from CNY 2.18 billion, an increase of approximately 56.2%[56]. Cash Flow - Net cash flow from operating activities was RMB -758.2 million, a significant decrease from RMB 1,109.8 million in the same period last year[6]. - The net cash outflow from operating activities was RMB 758.2 million, an increase of RMB 1,868.0 million compared to the previous year, primarily due to higher cash payments for goods and services[47]. - The net cash outflow from investing activities was RMB 2,545.7 million, an increase of RMB 4,625.4 million year-on-year, mainly due to a decrease in cash recovered from investment activities[48]. - The net cash outflow from financing activities was RMB 1,714.9 million, a decrease of RMB 2,968.0 million compared to the previous year, primarily due to reduced cash payments for debt repayment[49]. - Cash flow from investment activities showed a net outflow of -2,664,583,236, compared to a net inflow of 5,032,024,472 in the previous period[73]. - The total cash outflow from financing activities was 1,139,217,693, significantly lower than the previous period's 6,236,433,259[73]. Shareholder Information - The total number of shareholders at the end of the reporting period was 66,807[10]. - The largest shareholder, China National Offshore Oil Corporation, held 50.53% of the shares[10]. Research and Development - Research and development expenses for the first nine months of 2018 amounted to RMB 396.6 million, up RMB 105.3 million or 36.1% compared to the same period last year[19]. - Research and development expenses increased to ¥161,650,867, representing a 53.9% rise from ¥105,001,094 in Q3 2017[63]. - Research and development expenses increased to RMB 391,395,456 for the first nine months, a 39.3% rise compared to RMB 281,414,210 in the previous year[67]. Market Conditions and Future Outlook - The oilfield services industry continues to face intense competition, with service prices remaining low, which poses significant challenges for the company's operations[53]. - The company anticipates a potential net loss for the year, driven by project delays and increased costs due to environmental regulations[53]. - The company plans to enhance market expansion efforts and improve equipment utilization rates to counteract cost pressures[53].