Financial Performance - Revenue from epoxy wedge products increased by RMB 1.6 million or 11.5% to RMB 15.7 million for the six months ended June 30, 2023, compared to RMB 14.1 million for the same period in 2022[11] - Revenue from fiberglass grating products rose by RMB 0.6 million or 7.1% to RMB 9.9 million for the six months ended June 30, 2023, up from RMB 9.3 million for the same period in 2022[29] - Revenue from the sale of fiberglass products for the six months ended June 30, 2023, was RMB 25,613,000, an increase of 10% compared to RMB 23,341,000 for the same period in 2022[55] - For the six months ended June 30, 2023, the total revenue was RMB 25,613,000, an increase from RMB 23,341,000 for the same period in 2022, representing an increase of approximately 9.7%[59] - Local customers in mainland China generated revenue of RMB 21,466,000 for the six months ended June 30, 2023, up from RMB 17,886,000 in the same period last year, representing a growth of 20%[70] Profitability and Loss - The gross margin for epoxy wedge products decreased from 21.3% to 14.0%, a drop of approximately 7.3 percentage points, primarily due to significant increases in raw material costs[11] - The gross profit for the six months ended June 30, 2023, was RMB 5,209,000, compared to RMB 5,709,000 for the same period in 2022, indicating a decrease of about 8.8%[59] - The operating loss for the six months ended June 30, 2023, was RMB 916,000, compared to a loss of RMB 163,000 for the same period in 2022, reflecting a significant increase in losses[59] - The basic loss per share for the six months ended June 30, 2023, was RMB 0.23, compared to RMB 0.04 for the same period in 2022, indicating a worsening of financial performance[67] - The company reported a net loss attributable to shareholders of RMB 916,000 for the six months ended June 30, 2023, compared to a loss of RMB 163,000 for the same period in 2022[87] Expenses and Costs - Administrative expenses decreased by RMB 1.4 million or 24.3% to RMB 4.3 million for the six months ended June 30, 2023, down from RMB 5.7 million for the same period in 2022[12] - The cost of sales for the six months ended June 30, 2023, was RMB 20,404,000, compared to RMB 17,632,000 for the same period in 2022, representing an increase of about 15.6%[59] - The company’s distribution costs increased by approximately RMB 0.4 million or 53.9% to RMB 1.2 million for the six months ended June 30, 2023, primarily due to rising wages and salaries[102] Assets and Liabilities - As of June 30, 2023, trade receivables and notes receivable amounted to RMB 38,530 thousand, compared to RMB 41,161 thousand as of December 31, 2022, reflecting a decrease of approximately 6.4%[1] - The net amount of trade receivables and notes receivable was RMB 48,026 thousand as of June 30, 2023, down from RMB 50,315 thousand as of December 31, 2022, indicating a decline of about 4.5%[1] - Total assets decreased to RMB 80,974,000 as of June 30, 2023, from RMB 83,039,000 as of December 31, 2022, reflecting a decline of approximately 2.8%[48] - The group's net current assets were RMB 26,476,000 as of June 30, 2023, down from RMB 28,746,000 at the end of 2022, indicating a decrease of about 7.9%[48] - The group's total liabilities decreased to RMB 11,029,000 as of June 30, 2023, from RMB 12,178,000 as of December 31, 2022, representing a reduction of approximately 9.4%[48] Research and Development - Research and development costs for the six months ended June 30, 2023, were RMB 519,000, down from RMB 1,223,000 for the same period in 2022, showing a reduction of approximately 57.5%[59] - The board believes that R&D strength is crucial for the company's future growth, emphasizing the importance of continuous improvement in product technology[98] - The company plans to enhance its R&D capabilities by controlling raw materials, procuring new equipment, and hiring professional R&D personnel to develop more competitive high-quality products[98] Future Outlook - The company expects stronger performance in its fiberglass products in the coming years, driven by ongoing research and development efforts and alignment with China's macroeconomic stimulus measures[78] - The company is currently constructing a new factory in Inner Mongolia, with plans to start production and sales of industrial silica sand materials in the second half of 2024, which is expected to bring significant economic benefits[99] Shareholder Information - The company did not declare any interim dividend for the six months ended June 30, 2023, consistent with the previous year[86] - The board recommended not to declare any interim dividend for the six months ended June 30, 2023, consistent with the previous year[132] - The company has maintained a consistent number of issued and paid-up shares at 400,000,000 since the previous year[75] Market Position - The company has a strong customer base and believes it has a competitive advantage over local companies in the industry, positioning itself for future growth in the fiberglass grating market[124] - The company is actively involved in the development of industry standards and market trends in the fiberglass sector, particularly in regions along the Belt and Road Initiative[78]

Financial Performance - Total revenue for the three months ended March 31, 2023, was RMB 14,121,000, an increase of 7.8% compared to RMB 13,094,000 for the same period in 2022[7]. - The company reported a loss of RMB 644,000 for the three months ended March 31, 2023, compared to a loss of RMB 1,631,000 for the same period in 2022[11]. - For the three months ended March 31, 2023, the company reported a loss attributable to owners of the company of RMB 644,000, compared to a profit of RMB 126,000 for the same period in 2022, resulting in a basic loss per share of RMB 0.16[23]. - The company reported a total revenue of approximately RMB 14.1 million for the three months ended March 31, 2023, representing an increase of about RMB 1.0 million or 7.8% compared to the same period in 2022[59]. - The company recorded a gross profit of RMB 3.04 million for the three months ended March 31, 2023, compared to RMB 3.33 million in the same period of 2022[44]. - The company incurred an operating loss of RMB 0.13 million for the three months ended March 31, 2023, compared to an operating profit of RMB 0.41 million in the same period of 2022[44]. - The company reported a net loss of RMB 0.64 million for the three months ended March 31, 2023, compared to a net profit of RMB 0.13 million in the same period of 2022[44]. - The company’s basic and diluted loss per share was RMB (0.16) for the three months ended March 31, 2023, compared to RMB 0.03 in the same period of 2022[44]. Revenue Breakdown - Revenue from fiberglass products was RMB 14,121,000, with RMB 6,310,000 from fiberglass grating and RMB 7,811,000 from epoxy wedge strips[7]. - Local customers in China contributed RMB 11,499,000 to revenue, while overseas customers contributed RMB 2,622,000[14]. - Sales of fiberglass grating products amounted to RMB 6.31 million with a gross margin of 27.8% for the three months ended March 31, 2023, compared to RMB 4.01 million with a gross margin of 24.6% in the same period of 2022[48]. - Revenue from fiberglass grating products increased by approximately RMB 2.3 million or 57.2% to RMB 6.3 million for the three months ended March 31, 2023, compared to RMB 4.0 million for the same period in 2022[75]. - Revenue from epoxy wedge products decreased by approximately RMB 1.3 million or 14.0% to RMB 7.8 million for the three months ended March 31, 2023, compared to RMB 9.1 million for the same period in 2022[76]. Expenses and Costs - The total expenses for the period were RMB 644,000, with significant costs attributed to employee salaries and benefits totaling RMB 2,149,000[16]. - The company incurred a tax expense of RMB 439,000 for the three months ended March 31, 2023, compared to RMB 279,000 for the same period in 2022[19]. - Administrative expenses decreased by approximately RMB 0.3 million or 9.1% to RMB 2.5 million for the three months ended March 31, 2023, primarily due to reduced leasing expenses classified as cost of sales[62]. - Distribution costs increased by approximately RMB 0.2 million or 33.5% to RMB 0.7 million for the three months ended March 31, 2023, from RMB 0.5 million for the same period in 2022[77]. - The company’s financial costs increased to RMB 0.078 million for the three months ended March 31, 2023, compared to RMB 0.006 million in the same period of 2022[44]. Research and Development - Research and development costs for the period were RMB 256,000, a decrease from RMB 450,000 in the same period last year[16]. - The company plans to enhance its R&D capabilities by controlling raw materials, procuring new equipment, and hiring professional R&D personnel to produce more competitive high-quality products[28]. Market and Strategy - The company continues to focus on its fiberglass business, with no significant changes in operational strategy reported[6]. - The management expects steady growth in the overall fiberglass market in China in the coming years, driven by the material's advantages over traditional materials[27]. - The company aims to strengthen its market presence and product offerings to capture moderate growth in the fiberglass grating market in the future[30]. - The company has over 10 years of industry experience and a continuously expanding customer base, which positions it favorably compared to local competitors in the fiberglass market[30]. - The company is currently constructing a new factory in Inner Mongolia, aiming to start production and sales of industrial silica sand materials in the second half of 2024, which is expected to bring significant economic benefits[46]. Governance and Compliance - The company has complied with all applicable code provisions of the corporate governance code as set out in the GEM Listing Rules during the three months ended March 31, 2023[71]. - The company has established an audit committee consisting of three independent non-executive directors to oversee compliance and governance[72]. - The audit committee reviewed the unaudited performance for the three months ending March 31, 2023[89]. - The committee's main responsibilities include overseeing financial reporting procedures and internal controls[89]. - The company has adopted the GEM Listing Rules as the code of conduct for directors' dealings in the company's securities[88]. Dividends and Other Income - The company did not declare any dividends for the three months ended March 31, 2023, consistent with the same period in 2022[21]. - The company reported other income of RMB 8,000 for the three months ended March 31, 2023, compared to RMB 2,478,000 for the same period in 2022[36]. - The company did not purchase, sell, or redeem any of its listed securities during the three months ended March 31, 2023[86].

Financial Performance - For the nine months ended September 30, 2023, the company's revenue was RMB 36,252,000, a decrease of 8.9% compared to RMB 39,605,000 for the same period in 2022[8]. - The gross profit for the nine months ended September 30, 2023, was RMB 7,161,000, down 30.0% from RMB 10,386,000 in the previous year[8]. - The operating loss for the nine months ended September 30, 2023, was RMB 379,000, compared to an operating profit of RMB 2,348,000 for the same period in 2022[8]. - The net loss for the nine months ended September 30, 2023, was RMB 1,602,000, compared to a profit of RMB 776,000 in the same period last year[8]. - Basic and diluted loss per share for the nine months ended September 30, 2023, was RMB 0.40, compared to earnings of RMB 0.19 per share in the previous year[8]. - The company reported total other income of RMB 81,000 for the nine months ended September 30, 2023, down from RMB 1,742,000 in the same period of 2022[8]. - The company reported a net loss attributable to owners of the company of RMB 1,602,000 for the nine months ended September 30, 2023, compared to a profit of RMB 776,000 for the same period in 2022[22]. - Basic loss per share for the nine months ended September 30, 2023, was RMB 0.40, compared to earnings of RMB 0.19 per share for the same period in 2022[22]. - The company recorded a net loss of approximately RMB 16 million for the nine months ended September 30, 2023, compared to a net profit of approximately RMB 8 million for the same period in 2022[43]. Revenue Breakdown - The revenue from fiberglass products for the three months ended September 30, 2023, was RMB 10,639,000, down 34.5% from RMB 16,264,000 in the same period of 2022[15]. - Revenue from fiberglass grating products decreased by 15.9% from approximately RMB 183 million for the nine months ended September 30, 2022, to approximately RMB 154 million for the nine months ended September 30, 2023[40]. - Revenue from epoxy wedge products slightly decreased by 2.0% from approximately RMB 213 million to approximately RMB 208 million for the same periods[40]. - The revenue from overseas markets decreased by approximately 24.5% to about RMB 6.4 million for the nine months ended September 30, 2023, compared to RMB 8.5 million in the same period of 2022[37]. - Domestic market sales decreased by approximately 4.1% to about RMB 29.9 million for the nine months ended September 30, 2023, accounting for approximately 82.3% of total sales, an increase of 3.7 percentage points from 78.6% in the same period of 2022[37]. Cost and Expenses - Administrative expenses for the nine months ended September 30, 2023, were RMB 6,093,000, a decrease of 30.4% from RMB 8,768,000 in the previous year[8]. - Distribution costs increased by 32.8% from approximately RMB 15 million to approximately RMB 20 million due to rising wages and salaries[42]. - Administrative expenses decreased by 30.5% from approximately RMB 88 million to approximately RMB 61 million, mainly due to reduced rental expenses classified as cost of sales[42]. - The total cost of inventory for the nine months ended September 30, 2023, was RMB 25,984,000, a decrease from RMB 27,962,000 for the same period in 2022[17]. - Research and development costs for the nine months ended September 30, 2023, amounted to RMB 805,000, down from RMB 1,554,000 for the same period in 2022[17]. - The company incurred finance costs of RMB 213,000 for the nine months ended September 30, 2023, compared to RMB 46,000 for the same period in 2022[17]. - The income tax expense for the nine months ended September 30, 2023, was RMB 1,010,000, a decrease from RMB 1,526,000 for the same period in 2022[19]. Strategic Initiatives - The company plans to continue its focus on research and development of fiberglass products and industrial silica sand materials in China[11]. - The company plans to commence production and sales of industrial silica sand materials in the second half of 2024, anticipating significant economic benefits from this initiative[35]. - The company is currently constructing a new factory in Inner Mongolia to support its silica sand business segment, responding to the increasing domestic demand for silica sand materials[35]. - The company aims to enhance product recognition and competitiveness through improved product technology and R&D capabilities, which are deemed crucial for future growth[33]. - The financial results indicate a need for strategic reassessment to improve profitability and operational efficiency moving forward[8]. Shareholder Information - Major shareholder Li Yubao holds 40.9% of the company's shares, amounting to 163.6 million shares[45]. - Other major shareholders include LFS and LFB, each holding 30.9% of the company's shares, totaling 123.6 million shares[50]. - The board confirmed that there were no interests held by directors or their close associates in any business that competes directly or indirectly with the group as of September 30, 2023[54]. Governance and Compliance - The company has adopted the GEM Listing Rules regarding the code of conduct for directors' securities transactions, and all directors complied with these standards during the nine months ended September 30, 2023[55]. - The board believes that the company has complied with all applicable code provisions of the Corporate Governance Code as set out in Appendix 15 of the GEM Listing Rules for the nine months ended September 30, 2023[56]. - The Audit Committee, established on December 16, 2016, consists of three independent non-executive directors and is responsible for reviewing and supervising financial reporting procedures and internal controls[58]. - The unaudited results for the nine months ended September 30, 2023, have been reviewed by the Audit Committee[58].

Financial Performance - For the six months ended June 30, 2023, the company reported total revenue of RMB 25,613,000, an increase of 9.7% compared to RMB 23,341,000 for the same period in 2022[28]. - Gross profit for the six months ended June 30, 2023, was RMB 5,209,000, down 8.8% from RMB 5,709,000 in the previous year[28]. - The company recorded a net loss of RMB 916,000 for the six months ended June 30, 2023, compared to a net loss of RMB 163,000 for the same period in 2022[28]. - Operating cash flow for the six months ended June 30, 2023, was RMB 1,359,000, a decrease from RMB 1,832,000 in the previous year[40]. - The company reported a basic and diluted loss per share of RMB (0.23) for the six months ended June 30, 2023, compared to RMB (0.04) for the same period in 2022[28]. - The group reported a pre-tax profit of RMB 4,375,000 for the six months ended June 30, 2023, compared to RMB 5,202,000 for the same period in 2022, indicating a decrease of 15.9%[47]. - The total other income and net gains for the six months ended June 30, 2023, amounted to RMB 43,000, down from RMB 997,000 in the same period of 2022, reflecting a decrease of 95.7%[45]. - The group recorded a consolidated revenue of approximately RMB 25.6 million for the six months ended June 30, 2023, an increase of approximately RMB 2.3 million or 9.7% compared to the same period in 2022[92]. Revenue Breakdown - Revenue from fiberglass grating was RMB 9,938,000 for the six months ended June 30, 2023, compared to RMB 9,279,000 for the same period in 2022, reflecting a growth of 7.1%[45]. - The revenue from epoxy wedge strips increased significantly to RMB 15,675,000 for the six months ended June 30, 2023, up from RMB 14,062,000 in the same period of 2022, representing an increase of 11.5%[45]. - Revenue from local customers in mainland China reached RMB 21,466,000 for the six months ended June 30, 2023, an increase from RMB 17,886,000 in the same period of 2022[63]. - Domestic market sales increased by approximately 20.0% to about RMB 21.5 million, accounting for approximately 83.8% of total sales for the six months ended June 30, 2023, up from 76.6% in the same period of 2022[92]. Expenses and Costs - The company’s distribution costs increased to RMB 1,233,000 for the six months ended June 30, 2023, compared to RMB 801,000 in the previous year[28]. - Administrative expenses decreased to RMB 4,288,000 for the six months ended June 30, 2023, from RMB 5,668,000 in the same period of 2022[28]. - The group incurred a cost of inventory of RMB 18,197,000 for the six months ended June 30, 2023, compared to RMB 16,844,000 for the same period in 2022, representing an increase of 8%[47]. - Research and development costs for the six months ended June 30, 2023, were RMB 519,000, a decrease of 57.5% from RMB 1,223,000 for the same period in 2022[47]. - The total employee cost for the six months ended June 30, 2023, included approximately RMB 4.4 million in director remuneration, down from RMB 5.2 million for the same period in 2022[109]. Assets and Liabilities - Total assets as of June 30, 2023, were RMB 73,043,000, down from RMB 75,399,000 as of December 31, 2022[30]. - The company's net assets decreased to RMB 69,945,000 as of June 30, 2023, from RMB 70,861,000 at the end of 2022[30]. - The company’s total liabilities were RMB 21,496,000 as of June 30, 2023, slightly up from RMB 21,310,000 as of December 31, 2022[80]. - The total trade and other receivables amounted to RMB 50,339,000 as of June 30, 2023, down from RMB 51,584,000 as of December 31, 2022[71]. - The net amount of trade receivables and bills receivable, after deducting expected credit loss provisions, was RMB 48,026,000 as of June 30, 2023[71]. - The company had trade payables of RMB 2,532,000 and bills payable of RMB 10,023,000 as of June 30, 2023, totaling RMB 12,555,000[80]. Corporate Governance - The company has complied with all applicable corporate governance codes as per GEM listing rules for the six months ended June 30, 2023[8]. - The audit committee has reviewed the unaudited results for the six months ended June 30, 2023, ensuring financial reporting and risk management procedures are in place[9]. - The company has adopted the GEM listing rules regarding directors' dealings in securities, confirming compliance during the reporting period[12]. - The company is led by a board of directors consisting of both executive and independent non-executive members, ensuring diverse governance[23]. - The company has not engaged in any competitive business activities that could conflict with its operations during the reporting period[6]. - The company has confirmed that there were no significant acquisitions or disposals during the reporting period[18]. Future Plans and Developments - The group is currently constructing a new factory in Inner Mongolia to prepare for the production and sale of industrial silica sand, expected to commence in the second half of 2024[100]. - The group plans to enhance its R&D capabilities by controlling raw material sources, procuring new equipment, and hiring professional R&D personnel[89]. - The group aims to improve product recognition through technological advancements while maintaining effective cost control to enhance competitiveness[89]. Miscellaneous - The company did not declare any interim dividend for the six months ended June 30, 2023, consistent with the previous year[1]. - The group has no bank borrowings as of June 30, 2023, and relies on cash generated from operating activities for funding[104]. - The group had 70 employees as of June 30, 2023, an increase from 65 employees as of December 31, 2022[109]. - The group has not engaged in any acquisitions or disposals of subsidiaries or associates during the six months ended June 30, 2023[109]. - The group has not used any financial instruments to hedge foreign exchange risks as of June 30, 2023, although management monitors the exposure and may consider hedging significant risks if necessary[111]. - The group has no assets pledged as of June 30, 2023, which remains unchanged from December 31, 2022[108]. - The group does not anticipate any significant adverse impact from foreign exchange risks on its general operations[111]. - The group has not purchased, sold, or redeemed any listed securities during the six months ended June 30, 2023[129]. - The group has no other significant matters to report as of the report date following June 30, 2023[112].

Revenue Performance - Revenue for the three months ended March 31, 2023, was RMB 14,121,000, an increase of 7.8% compared to RMB 13,094,000 for the same period in 2022[20] - Total revenue for the three months ended March 31, 2023, was RMB 14,121,000, an increase of 7.8% from RMB 13,094,000 in the same period of 2022[43] - For the three months ended March 31, 2023, revenue from local customers in China (excluding Hong Kong) was RMB 11,499,000, an increase of 11.0% from RMB 10,359,000 in the same period of 2022[52] - Revenue from overseas customers totaled RMB 2,622,000, a decrease from RMB 2,735,000 in the same period of 2022, with significant contributions from the UK (RMB 1,373,000) and other regions (RMB 1,249,000)[52] - Revenue from fiberglass products was RMB 14,121,000, with RMB 6,310,000 from fiberglass grating and RMB 7,811,000 from epoxy wedge strips[43] - Revenue from fiberglass grating products increased by approximately RMB 2.3 million or 57.2% to RMB 6.3 million for the three months ended March 31, 2023, compared to RMB 4.0 million for the same period in 2022[103] Profitability and Loss - Gross profit for the same period was RMB 3,039,000, down 8.6% from RMB 3,325,000 in the previous year[20] - The company reported a loss of RMB 644,000 for the three months ended March 31, 2023, compared to a profit of RMB 126,000 in the same period last year[20] - The operating loss for the three months ended March 31, 2023, was RMB 127,000, compared to an operating profit of RMB 411,000 in the same period last year[20] - The company reported a basic and diluted loss per share of RMB (0.16) for the three months ended March 31, 2023, compared to earnings of RMB 0.03 per share in the previous year[20] - The company’s total comprehensive loss for the period was RMB 644,000, reflecting the operational challenges faced[48] - The company reported a net loss of approximately RMB 0.6 million for the three months ended March 31, 2023, compared to a net profit of approximately RMB 0.1 million in the same period of 2022, mainly due to the absence of rental income following the sale of investment properties in November 2022[100] Expenses and Cost Management - Administrative expenses decreased by RMB 0.3 million or 9.1% to RMB 2.5 million for the three months ended March 31, 2023, primarily due to reduced leasing expenses classified as cost of sales[10] - The company incurred a tax expense of RMB 439,000 for the three months ended March 31, 2023, compared to RMB 279,000 for the same period in 2022[29] - Employee benefits for the period were RMB 456,000, slightly down from RMB 471,000 in the same period of 2022[32] - Total employee costs, including directors' remuneration, were RMB 2,149,000 for the three months ended March 31, 2023, down from RMB 2,518,000 in the same period of 2022[67] - The company's distribution costs increased by approximately RMB 0.2 million or 33.5% to RMB 0.7 million for the three months ended March 31, 2023, primarily due to increased wages and salaries[82] Research and Development - Research and development costs included employee costs of approximately RMB 201,000, down from RMB 377,000 in the previous year[28] - The company aims to enhance product recognition through improved technology and effective cost control, emphasizing the importance of R&D for future growth[9] - The company plans to strengthen its R&D capabilities by controlling raw materials, procuring new equipment, and hiring professional R&D personnel[9] - Research and development costs for the three months ended March 31, 2023, were RMB 256,000, a decrease from RMB 450,000 in the same period of 2022[67] Market and Strategic Focus - The company continues to focus on the research, development, and sales of fiberglass products in China[33] - The company anticipates steady growth in the overall fiberglass market in China in the coming years, driven by the increasing understanding and maturity of fiberglass as a material[77] - The board believes that the company has a competitive advantage over local competitors, allowing for further market and product expansion to capture moderate growth in the fiberglass grating market[78] - The company is committed to promoting its products along the Belt and Road Initiative countries, expecting stronger performance in fiberglass products in the coming years[99] - The company plans to leverage the growing domestic demand for silica sand materials driven by developments in the glass, construction, and petrochemical industries[55] Production and Future Plans - The company is constructing a new factory in Inner Mongolia to prepare for the production and sale of industrial silica sand, expected to commence in the second half of 2024, which is anticipated to bring significant economic benefits[55] - The increase in domestic sales orders was attributed to the lifting of COVID-19 related restrictions in China starting December 2022[103] - Gross margin for epoxy wedge products fell from 25.7% in the three months ended March 31, 2022, to 16.5% in the same period of 2023, a decline of approximately 9.2 percentage points attributed to increased raw material costs[56] - Gross profit margin rose by approximately 3.2 percentage points from 24.6% for the three months ended March 31, 2022, to 27.8% for the same period in 2023, mainly due to a decrease in revenue from lower-margin overseas markets[103]

Financial Performance - The company recorded a total revenue of approximately RMB 62.3 million for the year ended December 31, 2022, representing a decrease of about 20.8% compared to the same period in 2021[3]. - The net profit for the year ended December 31, 2022, was approximately RMB 2.6 million, a turnaround from a net loss of approximately RMB 2.0 million for the year ended December 31, 2021[3]. - Total sales revenue for the year ended December 31, 2022, was approximately RMB 62.3 million, down from RMB 78.6 million for the year ended December 31, 2021[24]. - The company achieved a net profit of approximately RMB 2.6 million for the year ended December 31, 2022, compared to a net loss of approximately RMB 2.0 million for the year ended December 31, 2021, marking a turnaround[37]. - The overall sales revenue for the company in 2022 was RMB 62,287,000, with a gross margin of 25.1%, down from RMB 78,624,000 and a gross margin of 26.7% in 2021[180]. Market Performance - Domestic market sales decreased slightly by 0.6% to approximately RMB 51.4 million, while the domestic market accounted for about 82.5% of total sales, an increase of 16.8 percentage points from 65.7% in the previous year[16]. - Sales revenue from products exported to the United States decreased by approximately 80.3% compared to 2021, primarily due to import tariffs and adverse economic impacts from the COVID-19 pandemic[4]. - Revenue from fiberglass grating products decreased by approximately RMB 12.3 million or 29.9% to about RMB 28.9 million for the year ended December 31, 2022, primarily due to a decline in overseas market sales[17]. - Revenue from epoxy wedge products decreased by approximately RMB 3.9 million to about RMB 33.4 million for the year ended December 31, 2022, mainly due to a reduction in sales orders from Chinese wind turbine blade manufacturers[19]. - Sales to the U.S. market decreased by approximately 80.3% to about RMB 2.5 million for the year ended December 31, 2022, primarily due to increased import tariffs imposed by the U.S. government[25]. - Sales to the U.K. market decreased by approximately 13.1% to about RMB 7.1 million for the year ended December 31, 2022, mainly due to reduced sales orders from key customers amid a sluggish global economy[25]. Cost Management - The company aims to maintain effective cost control and enhance competitiveness by improving research and development capabilities through better material sourcing and hiring professional R&D personnel[9]. - Distribution costs decreased by approximately RMB 2.2 million or 51.0% to about RMB 2.1 million for the year ended December 31, 2022, primarily due to reduced clearance fees and lower sales personnel costs[27]. - Administrative expenses decreased by approximately RMB 4.0 million or 27.1% to about RMB 10.8 million for the year ended December 31, 2022, mainly due to a reduction in inventory write-downs and R&D expenses[27]. Strategic Initiatives - The company is constructing a factory in Inner Mongolia to prepare for the silicon sand business, with production and sales expected to commence in the second half of 2024, which is anticipated to bring significant economic benefits[13]. - The company plans to enhance product recognition through improved technology and actively seeks new business growth points by extending the upstream supply chain and developing higher quality and environmentally friendly new materials[6]. - The company remains cautiously optimistic about its long-term business prospects and aims for stable and effective development in 2023[6]. Governance and Management - The board is responsible for overseeing the company's business and affairs, receiving monthly financial and operational data to assess performance[87]. - The management team is responsible for overall business operations and compliance, with a focus on strategic development and major decision-making[74]. - The board consists of six directors, with three executive directors and three independent non-executive directors, ensuring a balance of skills and experience[89]. - The board has established a mechanism to ensure independent opinions and advice are available, enhancing decision-making processes[90]. - The company has adopted a diversity policy for board members, considering factors such as gender, age, cultural background, and professional experience[92]. Risk Management - The management has established policies to manage foreign exchange risks primarily related to transactions denominated in currencies other than RMB, with minimal impact on operations[68]. - The risk management committee monitors sanctions risks and export controls, ensuring compliance with internal procedures[108]. - The company has established a risk management procedure that includes annual risk identification and analysis, assessing the consequences and likelihood of risks[159]. - The board is responsible for risk management and has authorized the senior management to conduct risk identification and monitoring procedures[135]. Employee Relations - The company aims to attract and retain suitable employees by offering performance-based bonuses and various employee benefits, including retirement benefits and training support[69]. - The company has a structured approach to evaluate employee performance, which influences salary adjustments and promotions[69]. - Employee feedback mechanisms include performance evaluations, in-job training, and regular meetings to ensure employee welfare and development[198]. Environmental, Social, and Governance (ESG) - The company has implemented measures to enhance its environmental, social, and governance (ESG) performance, focusing on air pollution, greenhouse gas emissions, and waste generation[185]. - The board of directors is responsible for assessing and determining the company's ESG-related risks and ensuring effective management systems are in place[176]. - The company aims to reduce volatile organic compound emissions by using low-styrene resins in its manufacturing processes[191]. - The company actively engages with stakeholders to identify and address key ESG issues[179]. - The importance of ESG issues is rated high for the company's development and stakeholders, indicating a strong focus on these areas[200].

Financial Performance - For the year ended December 31, 2022, the total revenue was RMB 62,287,000, a decrease of 20.8% compared to RMB 78,624,000 in 2021[20]. - Gross profit for the year was RMB 15,622,000, down 25.8% from RMB 21,022,000 in the previous year[20]. - Operating profit increased to RMB 4,329,000, compared to RMB 1,240,000 in 2021, representing a growth of 249.6%[20]. - The net profit for the year was RMB 2,615,000, a significant recovery from a loss of RMB 2,043,000 in 2021[20]. - Basic and diluted earnings per share for 2022 were RMB 0.65, compared to a loss per share of RMB 0.51 in 2021[20]. - The company reported a net loss of RMB 2,043 thousand for the year, with total comprehensive income amounting to RMB 9,089 thousand[22]. - The company reported a profit attributable to owners of the company of RMB 2,615,000 for the year ended December 31, 2022, compared to a loss of RMB 2,043,000 in 2021[81]. Assets and Liabilities - Total assets as of December 31, 2022, were RMB 75,399,000, slightly up from RMB 73,506,000 in 2021[21]. - The company's net assets increased to RMB 70,861,000 from RMB 68,246,000 in the previous year, reflecting a growth of 3.8%[21]. - The company’s total assets as of December 31, 2022, were RMB 111,785 thousand, with total liabilities of RMB 40,924 thousand[45]. - Trade payables decreased from RMB 11,379,000 in 2021 to RMB 3,649,000 in 2022, a reduction of approximately 68%[130]. - The total trade payables and notes payable decreased from RMB 15,762,000 in 2021 to RMB 12,622,000 in 2022, a decline of about 20%[130]. Cash Flow - Cash and cash equivalents rose to RMB 13,655,000, compared to RMB 8,220,000 in 2021, indicating a 66.5% increase[21]. - The company’s cash and cash equivalents increased to RMB 67,261 thousand as of December 31, 2022, compared to RMB 64,646 thousand at the beginning of the year[22]. Revenue Breakdown - Revenue from local customers in China was RMB 51,366,000, a slight decrease of 0.6% from RMB 51,675,000 in 2021[48]. - Revenue from overseas customers in the United States dropped significantly to RMB 2,470,000 from RMB 12,522,000, representing a decline of 80.3%[48]. - The revenue from external customers accounting for 10% or more of total revenue was RMB 60,294,000 in 2022[50]. - The company’s revenue from external customers in China was RMB 33,374,000, while in Hong Kong it was RMB 176,000 for the year ended December 31, 2022[96]. Cost and Expenses - The total cost of inventory for the year was RMB 44,112,000, a decrease from RMB 57,650,000 in the previous year, representing a reduction of approximately 23.5%[76]. - Employee benefits expenses amounted to RMB 10,880,000, while total expenses for the year were RMB 14,105,000[98]. - The cost of inventory included employee benefits of RMB 3,905,000, down from RMB 5,522,000 in 2021, indicating a decrease of approximately 29.5%[101]. Research and Development - The company is focused on research and development of fiberglass products and industrial silica sand materials, aiming for market expansion[7]. - The company incurred research and development costs of RMB 1,872 thousand, with a reversal of inventory write-downs amounting to RMB 556 thousand[45]. - Research and development costs amounted to RMB 1,872,000, down from RMB 4,834,000 in 2021, indicating a decrease of about 61.2%[76]. - The company plans to enhance its R&D capabilities by controlling raw materials, procuring new equipment, and hiring professional R&D personnel[167]. Market and Sales - The glass fiber business generated a profit of RMB 3,935 thousand, contributing to a total profit of RMB 2,615 thousand after accounting for losses from unallocated expenses[45]. - The company recognized a decrease in sales of glass fiber grating from RMB 41,188 thousand in 2021 to RMB 28,853 thousand in 2022, reflecting a decline of 30%[38]. - Domestic market sales decreased slightly by 0.6% to approximately RMB 51.4 million, accounting for about 82.5% of total sales, an increase of 16.8 percentage points from the previous year[171]. - Sales to the U.S. market dropped approximately 80.3% to about RMB 2.5 million, primarily due to increased import tariffs imposed by the U.S. government[175]. Strategic Initiatives - The group has updated its reportable segments to include (i) fiberglass business and (ii) silica sand business, indicating a strategic shift in resource allocation[69]. - The group plans to regularly review the development of its silica sand business, which requires business model iteration and more resources[69]. - The group is constructing a plant in Inner Mongolia to prepare for the silica sand business, with production and sales expected to start in the second half of 2024, potentially bringing significant economic benefits[196]. Environmental and Compliance - The company is committed to minimizing any negative environmental impacts during production and has not violated any relevant environmental laws in China[195]. - The company is actively collecting market trend data and participating in drafting industry standards to stay updated on global fiberglass industry developments[194].

Financial Performance - For the three months ended September 30, 2022, the company reported revenue of RMB 16,264,000, a decrease of 19.7% compared to RMB 20,255,000 for the same period in 2021[4] - Gross profit for the same period was RMB 4,677,000, representing a gross margin of 28.7%, down from RMB 5,928,000 and a gross margin of 29.3% in the prior year[4] - The company achieved a net profit of RMB 939,000 for the three months ended September 30, 2022, compared to a net loss of RMB 54,000 in the same period last year[4] - For the nine months ended September 30, 2022, total revenue was RMB 39,605,000, a decrease of 28.1% from RMB 55,074,000 in the same period of 2021[4] - The company reported a basic and diluted earnings per share of RMB 0.23 for the three months ended September 30, 2022, compared to a loss per share of RMB 0.01 in the same period last year[4] - The pre-tax profit for the nine months ended September 30, 2022, was RMB 7,645,000, a decrease of 22.0% from RMB 9,786,000 for the same period in 2021[16] - The company recorded key management personnel compensation of RMB 1,445 thousand for the nine months ended September 30, 2022, compared to RMB 1,060 thousand for the same period in 2021[26] - The group recorded a net profit of approximately RMB 776,000 for the nine months ended September 30, 2022, compared to a net profit of approximately RMB 525,000 for the same period in 2021[51] Sales and Revenue Breakdown - For the three months ended September 30, 2022, the sales of fiberglass products amounted to RMB 16,264,000, a decrease of 19.7% compared to RMB 20,255,000 for the same period in 2021[14] - The sales of epoxy wedge products for the nine months ended September 30, 2022, were RMB 21,259,000, down 18.5% from RMB 26,101,000 for the same period in 2021[14] - The total revenue from rental income of investment properties for the nine months ended September 30, 2022, was RMB 1,433,000, with no rental income reported for the same period in 2021[15] - For the nine months ended September 30, 2022, the revenue from fiberglass grating products decreased by 36.3% to approximately RMB 183.5 million from RMB 288.1 million for the same period in 2021[38] - Revenue from epoxy wedge products decreased by approximately RMB 48 million or 18.6% to approximately RMB 213 million for the nine months ended September 30, 2022, from approximately RMB 261 million for the same period in 2021[40] - Sales to the Chinese market decreased by approximately 10.1% to about RMB 311.3 million for the nine months ended September 30, 2022, from approximately RMB 346.1 million for the same period in 2021[46] - Sales to the U.S. market decreased by approximately 78.6% to about RMB 21.7 million for the nine months ended September 30, 2022, from approximately RMB 97.6 million for the same period in 2021[46] Cost and Expenses - The company incurred research and development costs of RMB 1,554,000 for the nine months ended September 30, 2022, down 60.3% from RMB 3,908,000 for the same period in 2021[16][17] - The financial costs, including bank loan interest, decreased to RMB 36,000 for the nine months ended September 30, 2022, from RMB 170,000 for the same period in 2021, a reduction of 78.8%[16] - Distribution costs decreased by approximately RMB 1.9 million or 56.0% to approximately RMB 1.5 million for the nine months ended September 30, 2022, from approximately RMB 3.4 million for the same period in 2021[48] - Administrative expenses decreased by approximately RMB 0.3 million or 3.3% to approximately RMB 8.8 million for the nine months ended September 30, 2022, from approximately RMB 9.1 million for the same period in 2021[49] Market and Future Outlook - The company continues to focus on research and development of fiberglass products, which is its main business in China[12] - The company expects the overall fiberglass market in China to steadily rise in the future, driven by the material's excellent performance as a relatively new alternative to traditional materials[29] - The company remains cautiously optimistic about its long-term business prospects while closely monitoring the latest developments of the COVID-19 pandemic and its overall impact on the industry[35] - The company anticipates that the international political landscape, particularly U.S.-China relations, will face greater challenges, which may affect its operations[33] - The company will seek to explore new revenue sources to mitigate business risks in light of the ongoing pandemic[35] Corporate Governance and Compliance - The company confirmed compliance with the corporate governance code as per GEM Listing Rules during the nine months ended September 30, 2022[69] - The Audit Committee was established on December 16, 2016, consisting of three independent non-executive directors[70] - The Audit Committee's main responsibilities include reviewing financial reporting procedures and internal controls[70] - The group reviewed its unaudited performance for the nine months ended September 30, 2022[70] Shareholder Information - As of September 30, 2022, Mr. Li holds 163,600,000 shares, representing 40.9% of the company's equity[55] - Major shareholders include LFS and LFB, each holding 123,600,000 shares, accounting for 30.9% of the company's equity[61] - The company did not enter into any related party transactions that require disclosure under GEM Listing Rules during the nine months ended September 30, 2022[64] - No purchases, sales, or redemptions of the company's listed securities were made by the company or its subsidiaries during the nine months ended September 30, 2022[65] Other Notable Information - The company has not disclosed specific future outlook or guidance for the upcoming quarters in the report[4] - The company operates through its wholly-owned subsidiary, Nantong Meigu Composite Materials Co., Ltd., located in Jiangsu Province, China[8] - The financial results for the nine months ended September 30, 2022, are unaudited but have been reviewed by the company's audit committee[10] - The company has maintained consistent accounting policies in preparing its financial statements for the current period[9] - The company did not declare any interim dividend for the nine months ended September 30, 2022, consistent with the same period in 2021[23] - Nantong Meigu agreed to sell 100% equity of its wholly-owned subsidiary Nantong Derhui Precision Equipment Technology Co., Ltd. for a total consideration of RMB 31,000,000[52] - The Chinese government's dynamic zero-COVID policy has significantly impacted economic activities, with GDP growth only reaching 3% for the nine months ended September 30, 2022, down from 9.8% in the same period of 2021[32]

[Financial Performance](index=2&type=section&id=Performance) [Financial Summary](index=2&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) The company reported a 28.1% year-on-year revenue decline to RMB 39.6 million for the nine months ended September 30, 2022, while net profit increased by 47.8% Condensed Consolidated Statement of Profit or Loss (For the nine months ended September 30) | Indicator | 2022 (RMB thousands) | 2021 (RMB thousands) | Year-on-year Change | | :--- | :--- | :--- | :--- | | Revenue | 39,605 | 55,074 | -28.1% | | Gross Profit | 10,386 | 14,487 | -28.3% | | Operating Profit | 2,348 | 2,075 | +13.2% | | Profit for the Period | 776 | 525 | +47.8% | | Basic Earnings Per Share (RMB cents) | 0.19 | 0.13 | +46.2% | - As of September 30, 2022, the company's total equity was **RMB 69.022 million**, a slight increase from **RMB 68.246 million** at the beginning of 2022[5](index=5&type=chunk) [Notes to the Condensed Consolidated Financial Statements](index=4&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) This section details the basis of financial statement preparation, highlighting the company's core fiberglass product business and declining sales across key product categories - The Group's principal business is the research, development, production, and sale of fiberglass products in China, primarily through its indirect wholly-owned subsidiary, Nantong Meigu Composite Materials Co., Ltd[7](index=7&type=chunk)[11](index=11&type=chunk) Revenue by Product Category (For the nine months ended September 30) | Product Category | 2022 Revenue (RMB thousands) | 2021 Revenue (RMB thousands) | Year-on-year Change | | :--- | :--- | :--- | :--- | | Fiberglass Grating Products | 18,346 | 28,813 | -36.3% | | Epoxy Wedge Products | 21,259 | 26,101 | -18.6% | | Phenolic Grating Products | – | 160 | -100% | | **Total** | **39,605** | **55,074** | **-28.1%** | - The Directors do not recommend the payment of any interim dividend for the nine months ended September 30, 2022[24](index=24&type=chunk) - Diluted earnings per share were the same as basic earnings per share due to no potential dilutive ordinary shares during the period[26](index=26&type=chunk) [Management Discussion and Analysis](index=11&type=section&id=Management%20Discussion%20and%20Analysis) [Business Review and Outlook](index=11&type=section&id=Review%20and%20Outlook) Management attributes the 28.1% revenue decline to China's zero-COVID policy and global uncertainties, outlining strategies for cost control, technology, and market expansion - For the first nine months of 2022, China's dynamic zero-COVID policy led to economic stagnation, with GDP growth rate decreasing from **9.8%** in the same period last year to **3.0%**[31](index=31&type=chunk) - Internationally, Sino-US relations face greater challenges, with the US tightening restrictions on high-tech exports to China, potentially further impacting the business environment[33](index=33&type=chunk) - Future strategies will focus on more active participation in project bidding, improving product technology to control costs, recruiting talent to support R&D and market expansion, and seeking new revenue sources to mitigate risks[33](index=33&type=chunk) [Operating Results Analysis](index=13&type=section&id=Operating%20Results%20Analysis) This section analyzes the 28.1% revenue decrease driven by product sales declines, offset by cost controls and new rental income, leading to net profit growth Sales Performance - Epoxy wedge products became the largest revenue source, accounting for **53.7%** of total revenue, with their revenue decreasing by **18.6%** year-on-year to **RMB 21.3 million**; although annual sales declined, third-quarter sales increased by **30.8%** quarter-on-quarter[39](index=39&type=chunk) - Fiberglass grating product revenue significantly decreased by **36.3%** year-on-year to **RMB 18.3 million**, mainly due to increased prices from rising raw material and transportation costs, leading to a drop in demand[38](index=38&type=chunk) Sales Revenue by Region (For the nine months ended September 30) | Region | 2022 (RMB thousands) | 2021 (RMB thousands) | Year-on-year Change | | :--- | :--- | :--- | :--- | | China | 31,129 | 34,612 | -10.1% | | United States | 2,069 | 9,664 | -78.6% | | United Kingdom | 5,058 | 6,143 | -17.7% | | Other | 1,349 | 4,655 | -71.0% | - The average selling price of fiberglass grating products increased by **51.2%** year-on-year, but sales volume sharply decreased by **57.9%**; the average selling price of epoxy wedge products decreased by **17.1%** due to price renegotiation after bidding, with sales volume slightly decreasing by **1.7%**[41](index=41&type=chunk)[42](index=42&type=chunk) Cost and Expense Analysis - Distribution costs significantly decreased by **56.0%** year-on-year to **RMB 1.5 million**, primarily due to reduced salaries and customs declaration fees[48](index=48&type=chunk) - Administrative expenses decreased by **3.3%** year-on-year to **RMB 8.8 million**, mainly due to reduced research and development expenses[49](index=49&type=chunk) - Finance costs significantly decreased by **72.9%** year-on-year to **RMB 46 thousands**, primarily due to repayment of bank loans during the year[50](index=50&type=chunk) Profitability and Significant Matters - Net profit for the first nine months increased to **RMB 0.776 million** (compared to **RMB 0.525 million** in the same period last year), primarily attributable to (i) recognition of rental income from investment properties leased in December 2021; and (ii) the Group's efforts to reduce distribution costs[51](index=51&type=chunk) - On July 19, 2022, the company agreed to sell 100% equity interest in its wholly-owned subsidiary, Nantong Derhui Precision Equipment Technology Co., Ltd., for a total consideration of **RMB 31 million**, with the transaction not yet completed at the end of this reporting period[52](index=52&type=chunk) [Shareholder Information and Corporate Governance](index=18&type=section&id=Shareholder%20Information%20and%20Corporate%20Governance) [Directors' and Major Shareholders' Interests](index=18&type=section&id=Directors'%20and%20Major%20Shareholders'%20Interests) This section details the shareholdings of directors and major shareholders, identifying Mr. Li Yubao as the ultimate controlling shareholder with a 40.9% indirect interest - Chairman Mr. Li Yubao is deemed to be interested in **163.6 million shares**, representing **40.9%** of the company's total share capital, and is the ultimate controlling shareholder of the company[55](index=55&type=chunk) Major Shareholder Holdings (As of September 30, 2022) | Shareholder Name | Capacity/Nature of Interest | Number of Shares Held | Percentage | | :--- | :--- | :--- | :--- | | LFS (Note 1) | Interest in controlled corporation | 123,600,000 | 30.9% | | LFB (Note 1) | Beneficial owner | 123,600,000 | 30.9% | | Yunhong (Note 2) | Beneficial owner | 40,000,000 | 10.0% | | Mr. Wu Dong (Note 2) | Interest in controlled corporation | 40,000,000 | 10.0% | | Mr. Huang Xuechao | Beneficial owner | 58,880,000 | 14.7% | | Mr. Yan Qixu | Beneficial owner | 27,920,000 | 7.0% | [Compliance and Governance](index=21&type=section&id=Compliance%20and%20Governance) The company affirmed compliance with GEM Listing Rules' corporate governance codes, with the Audit Committee reviewing the unaudited quarterly results - The company has complied with the Corporate Governance Code set out in Appendix 15 to the GEM Listing Rules for the nine months ended September 30, 2022[69](index=69&type=chunk) - The Audit Committee, comprising three independent non-executive Directors, has reviewed the Group's unaudited results for the nine months ended September 30, 2022[71](index=71&type=chunk) - During the period, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities[66](index=66&type=chunk)

Financial Performance - Revenue for the six months ended June 30, 2022, was RMB 23,341 thousand, a decrease of 32.9% compared to RMB 34,819 thousand for the same period in 2021[4] - Gross profit for the six months ended June 30, 2022, was RMB 5,709 thousand, down 33.5% from RMB 8,559 thousand in the previous year[4] - The net loss attributable to owners for the six months ended June 30, 2022, was RMB 163 thousand, compared to a profit of RMB 579 thousand in the same period of 2021[4] - The company reported a basic and diluted loss per share of RMB (0.04) for the six months ended June 30, 2022, compared to earnings of RMB 0.14 in the same period of 2021[4] - The pre-tax profit for the six months ended June 30, 2022, was RMB 5,202,000, a decrease of 14.5% from RMB 6,111,000 for the same period in 2021[20] - The company did not recommend any interim dividend for the six months ended June 30, 2022, consistent with the decision for the same period in 2021[26] - The group recorded a net loss of approximately RMB 163,000 for the six months ended June 30, 2022, compared to a net profit of approximately RMB 579,000 for the same period in 2021, mainly due to a significant revenue decrease of approximately 33.0%[69] Cash Flow and Assets - Operating cash flow for the six months ended June 30, 2022, was RMB 1,832 thousand, a significant improvement from a cash outflow of RMB 6,972 thousand in the previous year[9] - Total assets as of June 30, 2022, were RMB 71,242 thousand, a slight decrease from RMB 73,506 thousand as of December 31, 2021[6] - Current liabilities decreased to RMB 29,403 thousand as of June 30, 2022, from RMB 31,912 thousand at the end of 2021[6] - Cash and cash equivalents increased to RMB 9,566 thousand as of June 30, 2022, compared to RMB 8,220 thousand at the beginning of the period[9] - Non-current assets totaled RMB 36,673 thousand as of June 30, 2022, slightly down from RMB 37,073 thousand at the end of 2021[6] - Trade receivables as of June 30, 2022, amounted to RMB 36,571 thousand, down from RMB 42,845 thousand as of December 31, 2021, representing a decrease of approximately 14.5%[31] - The net amount of trade receivables and bills receivable, after deducting expected credit loss provisions, was RMB 47,655 thousand as of June 30, 2022, compared to RMB 46,133 thousand as of December 31, 2021[32] - Total trade and other payables as of June 30, 2022, was RMB 27,177 thousand, a decrease from RMB 29,853 thousand as of December 31, 2021, reflecting a reduction of approximately 9.0%[34] Revenue Breakdown - For the six months ended June 30, 2022, the total revenue from the sale of fiberglass products was RMB 23,341,000, a decrease of 32.9% compared to RMB 34,819,000 for the same period in 2021[17] - The revenue from fiberglass grating products for the six months ended June 30, 2022, was RMB 9,279,000, down 53.0% from RMB 19,730,000 in the previous year[17] - Domestic market sales decreased by approximately 21.0% from RMB 226 million in 2021 to RMB 179 million for the six months ended June 30, 2022, with the domestic market accounting for 76.6% of total sales[52] - As of June 30, 2022, sales of epoxy wedge products accounted for approximately 60.3% of the total revenue, generating revenue of RMB 141 million, a decrease of RMB 867,000 or 5.8% compared to RMB 149 million for the same period in 2021[57] - Sales to the U.S. market decreased by approximately 76.6% to RMB 1.3 million, primarily due to increased tariffs and adverse impacts of the COVID-19 pandemic on the U.S. economy[66] Cost and Expenses - The company incurred employee costs of RMB 4,715,000 for the six months ended June 30, 2022, down 14.4% from RMB 5,513,000 in the previous year[20] - The company’s total tax expense for the six months ended June 30, 2022, was RMB 624,000, a decrease from RMB 905,000 in the same period of 2021[23] - Administrative expenses increased by approximately RMB 1.1 million or 24.9% to RMB 5.7 million for the six months ended June 30, 2022, mainly due to increased employee costs and rental expenses[67] - The total employee cost for the six months ending June 30, 2022, was approximately RMB 5.2 million, down from RMB 6.1 million for the same period in 2021[80] Market Outlook and Strategy - The company anticipates steady growth in the overall fiberglass market in China, driven by the material's advantages over traditional materials[45] - The company plans to enhance product recognition through improved technology and will hire senior talent to achieve its R&D and market expansion goals[49] - The economic environment remains uncertain, with challenges expected in the second half of 2022 due to ongoing COVID-19 impacts and geopolitical tensions[48] - The company will actively participate in bidding for potential projects in both domestic and overseas markets to mitigate business risks[49] - The company expects to explore new revenue sources to reduce business risks amid the uncertain economic landscape[51] Shareholder Information - As of June 30, 2022, Mr. Li held 163,600,000 shares, representing 40.9% of the company's equity[82] - Major shareholders include LFS and LFB, each holding 123,600,000 shares, which is 30.9% of the company's equity[87] - Mr. Wu holds 40,000,000 shares in the company, accounting for 10.0% of the total issued shares[88] Corporate Governance - The company has adopted the GEM Listing Rules regarding the code of conduct for directors' securities transactions, and all directors confirmed compliance during the six-month period[97] - The company believes it has complied with all applicable corporate governance codes as per GEM Listing Rules Appendix 15 during the six months ended June 30, 2022[98] - The Audit Committee, established on December 16, 2016, reviewed the unaudited results for the six months ended June 30, 2022[99]