[Definitions](index=5&type=section&id=Item%20I%20Definitions) This section provides a glossary of terms used throughout the report [Company Profile and Key Financial Indicators](index=5&type=section&id=Item%20II%20Company%20Profile%20and%20Key%20Financial%20Indicators) This section outlines the company's fundamental information and presents its key financial performance metrics over recent periods [Company Information](index=5&type=section&id=I.%20Company%20Information) This section provides basic corporate registration details, contact information, stock listing data, and disclosure channels for CSSC Science & Technology Co., Ltd | Item | Information | | :--- | :--- | | **Company Chinese Name** | 中船科技股份有限公司 | | **Company Chinese Abbreviation** | 中船科技 | | **Stock Abbreviation** | 中船科技 | | **Stock Code** | 600072 | | **Stock Exchange** | Shanghai Stock Exchange | | **Legal Representative** | Zhou Hui | [Key Accounting Data and Financial Indicators](index=6&type=section&id=VII.%20Key%20Accounting%20Data%20and%20Financial%20Indicators%20for%20the%20Past%20Three%20Years) In 2018, the company's operating revenue decreased by 23.44% to RMB 3.264 billion, primarily due to reduced land consolidation business and the parent company ceasing original marine equipment operations, while net profit attributable to shareholders increased by 115.09% to RMB 65.43 million, despite a significant decline in non-recurring net profit due to increased R&D and reduced investment income from associates and joint ventures Key Accounting Data for the Past Three Years (Unit: RMB) | Key Accounting Data | 2018 | 2017 | Change YoY (%) | 2016 | | :--- | :--- | :--- | :--- | :--- | | **Operating Revenue** | 3,264,373,125.15 | 4,263,628,598.18 | -23.44 | 5,304,151,934.91 | | **Net Profit Attributable to Shareholders of Listed Company** | 65,427,430.33 | 30,419,191.59 | 115.09 | -42,929,500.08 | | **Net Profit Attributable to Shareholders of Listed Company (Excluding Non-Recurring Items)** | -78,412,167.69 | 7,702,375.42 | Not Applicable | -141,964,704.34 | | **Net Cash Flow from Operating Activities** | -333,901,731.36 | -1,054,616,839.10 | Not Applicable | -702,114,914.05 | | **Net Assets Attributable to Shareholders of Listed Company** | 3,718,262,301.58 | 3,653,201,662.71 | 1.78 | 3,624,500,142.69 | | **Total Assets** | 10,527,625,393.33 | 10,945,048,146.16 | -3.81 | 11,177,662,074.36 | Key Financial Indicators for the Past Three Years | Key Financial Indicators | 2018 | 2017 | Change YoY (%) | 2016 | | :--- | :--- | :--- | :--- | :--- | | **Basic Earnings Per Share (RMB/share)** | 0.089 | 0.041 | 117.07 | -0.080 | | **Weighted Average Return on Net Assets (%)** | 1.78 | 0.84 | Increased by 0.94 percentage points | -1.52 | - The decrease in operating revenue was primarily due to a **RMB 642 million** reduction in land consolidation business income from subsidiary CSSC No. 9 Institute, and a **RMB 461 million** decrease in marine equipment business income as the parent company ceased original operations[19](index=19&type=chunk) [Quarterly Key Financial Data](index=8&type=section&id=IX.%202018%20Quarterly%20Key%20Financial%20Data) The company's 2018 quarterly performance showed significant fluctuations, with losses in Q2 and Q3, but a notable profit of RMB 62.79 million in Q4, reversing previous losses, though Q4 non-recurring net profit remained negative, indicating reliance on non-operating income 2018 Quarterly Key Financial Data (Unit: RMB) | Indicator | Q1 | Q2 | Q3 | Q4 | | :--- | :--- | :--- | :--- | :--- | | **Operating Revenue** | 579,830,015.16 | 866,761,893.34 | 809,611,973.38 | 1,008,169,243.27 | | **Net Profit Attributable to Shareholders of Listed Company** | 11,064,352.38 | -2,878,222.57 | -5,552,182.33 | 62,793,482.85 | | **Net Profit Attributable to Shareholders of Listed Company (Excluding Non-Recurring Items)** | 4,429,294.55 | -4,340,782.73 | -11,557,707.84 | -66,942,971.67 | | **Net Cash Flow from Operating Activities** | -349,663,071.71 | -213,161,647.16 | -213,178,164.79 | 442,101,152.30 | [Non-Recurring Gains and Losses Items and Amounts](index=8&type=section&id=X.%20Non-Recurring%20Gains%20and%20Losses%20Items%20and%20Amounts) In 2018, the company's total non-recurring gains and losses amounted to RMB 144 million, significantly impacting current profit, primarily driven by RMB 147 million from 'disposal gains/losses on non-current assets' due to a subsidiary's 21% equity transfer of Xuzhou Yangguang Company Non-Recurring Gains and Losses Items (Unit: RMB) | Non-Recurring Gains and Losses Item | 2018 Amount | 2017 Amount | 2016 Amount | | :--- | :--- | :--- | :--- | | **Disposal Gains/Losses on Non-Current Assets** | 146,810,093.43 | -2,906,826.56 | 24,311,559.19 | | **Government Grants Recognized in Current Profit/Loss** | 14,642,070.29 | 22,389,132.59 | 17,317,674.60 | | **Total** | **143,839,598.02** | **22,716,816.17** | **99,035,204.26** | [Business Overview](index=9&type=section&id=Item%20III%20Business%20Overview) This section provides a comprehensive overview of the company's principal businesses, operational models, and the industry landscape in which it operates [Principal Businesses, Business Model, and Industry Overview](index=9&type=section&id=I.%20Description%20of%20Principal%20Businesses%2C%20Business%20Model%2C%20and%20Industry%20Overview%20During%20the%20Reporting%20Period) The company's core business primarily involves engineering design, survey, general contracting, and land consolidation services by its wholly-owned subsidiary CSSC No. 9 Institute, supplemented by marine equipment business from CSSC Huahai, while transitioning to a holding platform company leveraging capital markets for industrial layout amidst a growing construction sector but a challenging, adjusting shipbuilding market - The company's core business is undertaken by its wholly-owned subsidiary **CSSC No. 9 Institute**, covering engineering design, survey, consulting, supervision, general contracting, and land consolidation services[25](index=25&type=chunk) - **CSSC No. 9 Institute** has established a '3+2' strategic layout: strengthening design consulting, optimizing general contracting, stabilizing investment and financing as three core businesses, and expanding into technology industrialization and smart factory digital platform construction as two new businesses[25](index=25&type=chunk) - The company released its **2018-2025 Development Strategic Plan**, outlining a transformation into a holding platform company, driving industrial layout through capital markets, and achieving diversified development with military-civilian integration as the main theme[26](index=26&type=chunk) [Analysis of Core Competencies](index=10&type=section&id=III.%20Analysis%20of%20Core%20Competencies%20During%20the%20Reporting%20Period) The company's core competencies lie in its leading position in marine engineering design, with over 60 years of experience and planning/designing over 90% of domestic shipbuilding and repair enterprises, alongside national leadership in hydraulic and underground engineering and large non-standard equipment design, supported by comprehensive Class A and Class 1 industry qualifications and 201 valid patents - The company holds a **leading position in marine engineering design**, having planned and designed over **90% of domestic shipbuilding and repair enterprises**[29](index=29&type=chunk) - It possesses a **nationally leading advantage in hydraulic and underground engineering**, including dock and pier design[31](index=31&type=chunk) - The company and its subsidiaries hold **comprehensive top-tier industry qualifications**, including Class A comprehensive engineering design, Class A comprehensive engineering survey, and Class 1 general contracting[31](index=31&type=chunk)[32](index=32&type=chunk)[33](index=33&type=chunk) - During the reporting period, the company held **201 valid patents** (**63 invention patents**), demonstrating technological advantages in areas such as luxury cruise interior outfitting and non-ship equipment development[33](index=33&type=chunk) [Management Discussion and Analysis](index=12&type=section&id=Item%20IV%20Management%20Discussion%20and%20Analysis) This section provides a detailed discussion and analysis of the company's operational performance, financial condition, and future outlook [Management Discussion and Analysis](index=12&type=section&id=I.%20Management%20Discussion%20and%20Analysis) In 2018, the company's operating revenue reached RMB 3.264 billion, a 23.44% year-on-year decrease, primarily due to a significant decline in land consolidation services from subsidiary CSSC No. 9 Institute due to business model changes and slow project execution, yet CSSC No. 9 Institute remained the core operating entity, contributing 95.89% of revenue and actively expanding domestic and international general contracting and design consulting projects, while the parent company largely completed the cleanup of legacy projects - The company's **2018 operating revenue** was **RMB 3.264 billion**, a **23.44% year-on-year decrease**, primarily due to a significant decline in land consolidation services[34](index=34&type=chunk) - Wholly-owned subsidiary **CSSC No. 9 Institute** is the core operating entity, achieving **RMB 3.13 billion in revenue in 2018**, accounting for **95.89% of the company's total revenue**[35](index=35&type=chunk) - **CSSC No. 9 Institute** successfully undertook several significant domestic and international projects, including the **Zhanjiang Port General Terminal EPC General Contracting** and **Cambodian Military Port Support Base Design Consulting**[35](index=35&type=chunk) [Key Operating Performance During the Reporting Period](index=13&type=section&id=II.%20Key%20Operating%20Performance%20During%20the%20Reporting%20Period) During the reporting period, the company achieved RMB 3.264 billion in operating revenue and RMB 65.4274 million in net profit attributable to shareholders, with profit growth primarily driven by RMB 138 million in investment income from a subsidiary's equity transfer, while engineering general contracting constituted the main revenue at RMB 2.606 billion, land consolidation services significantly shrank to RMB 101 million, and R&D investment continuously increased by 28.47% [Analysis of Principal Business](index=13&type=section&id=%28I%29%20Analysis%20of%20Principal%20Business) In 2018, the company's principal business revenue decreased by 23.44% year-on-year, with operating costs down by 23.31%, primarily dragged by significant declines of 86.37% and 80.64% in land consolidation services and marine equipment revenue respectively, while engineering general contracting grew by 5.62%, and increased management and R&D expenses by 15.28% and 28.47% respectively indicated higher investment in compensation and research Key Income Statement Item Changes | Item | Current Period (RMB) | Prior Period (RMB) | Change (%) | | :--- | :--- | :--- | :--- | | **Operating Revenue** | 3,264,373,125.15 | 4,263,628,598.18 | -23.44 | | **Operating Cost** | 2,935,504,343.97 | 3,827,601,639.85 | -23.31 | | **Administrative Expenses** | 181,082,757.34 | 157,080,002.48 | 15.28 | | **R&D Expenses** | 98,409,899.30 | 76,603,076.68 | 28.47 | Principal Business by Product (Unit: RMB) | By Product | Operating Revenue | Operating Cost | Gross Margin (%) | Operating Revenue Change YoY (%) | | :--- | :--- | :--- | :--- | :--- | | **Engineering Design, Survey, Consulting, and Supervision** | 421,861,823.53 | 312,473,282.68 | 25.93 | -0.27 | | **Engineering General Contracting** | 2,606,485,238.52 | 2,401,019,211.71 | 7.88 | 5.62 | | **Land Consolidation Services** | 101,400,451.63 | 52,485,000.00 | 48.24 | -86.37 | | **Marine Equipment** | 110,634,971.32 | 149,133,165.50 | -34.80 | -80.64 | - The year-on-year decrease in land consolidation service revenue was primarily due to changes in business model and delayed demolition, while the reduction in marine equipment revenue resulted from the parent company ceasing to undertake this business since 2017 after the 2016 reorganization[41](index=41&type=chunk) [R&D Investment](index=16&type=section&id=4.%20R%26D%20Investment) In 2018, the company's R&D investment was fully expensed, totaling RMB 98.41 million, a 28.47% increase year-on-year, representing 3.01% of operating revenue, with 259 R&D personnel accounting for 14.63% of the total workforce 2018 R&D Investment Overview | Indicator | Value | | :--- | :--- | | **Expensed R&D Investment (RMB)** | 98,409,899.30 | | **Total R&D Investment (RMB)** | 98,409,899.30 | | **R&D Investment as % of Operating Revenue** | 3.01 | | **Number of Company R&D Personnel (Persons)** | 259 | | **R&D Personnel as % of Total Company Staff** | 14.63 | [Cash Flow Analysis](index=17&type=section&id=5.%20Cash%20Flow) In 2018, the company's cash flow improved; net cash flow from operating activities, though still negative, significantly increased year-on-year due to higher collections from subsidiary contracting businesses, while net cash flow from investing activities turned positive due to reduced investment payments, and net cash flow from financing activities decreased year-on-year due to increased loan repayments - Net cash flow from operating activities increased year-on-year, primarily due to **increased collections from subsidiary CSSC No. 9 Institute's contracting business**[48](index=48&type=chunk) - Net cash flow from investing activities increased year-on-year, primarily due to **reduced cash payments for investments by subsidiary CSSC No. 9 Institute** during the period[48](index=48&type=chunk) - Net cash flow from financing activities decreased year-on-year, primarily due to **increased loan repayments by subsidiary CSSC No. 9 Institute** during the period[48](index=48&type=chunk) [Explanation of Significant Profit Changes from Non-Principal Business](index=17&type=section&id=%28II%29%20Explanation%20of%20Significant%20Profit%20Changes%20from%20Non-Principal%20Business) The significant change in the company's 2018 profit was primarily driven by non-principal business activities, specifically the RMB 138 million investment income realized from subsidiary CSSC No. 9 Institute's transfer of its 21% equity in joint venture Xuzhou CSSC Yangguang Investment Development Co., Ltd., which was the main source of profit for the period - Subsidiary **CSSC No. 9 Institute's transfer of its 21% equity in joint venture Xuzhou CSSC Yangguang Investment Development Co., Ltd.**, realizing **RMB 138 million in investment income**, was the primary reason for the significant change in profit[49](index=49&type=chunk) [Analysis of Assets and Liabilities](index=17&type=section&id=%28III%29%20Analysis%20of%20Assets%20and%20Liabilities) As of year-end 2018, the company's total assets were RMB 10.528 billion, a 3.81% year-on-year decrease; on the asset side, notes receivable significantly increased by 273.92% while long-term receivables decreased by 16.94%; on the liability side, both short-term and long-term borrowings substantially decreased by 48.47% and 42.99% respectively, mainly due to subsidiary loan repayments and reclassification of some long-term borrowings to current maturities, while other payables and long-term payables significantly increased due to shareholder loans received by subsidiaries Key Balance Sheet Item Changes | Item Name | Current Period End (RMB) | Prior Period End (RMB) | Change (%) | Primary Reason | | :--- | :--- | :--- | :--- | :--- | | **Notes Receivable** | 65,149,930.36 | 17,423,544.95 | 273.92 | Increase in subsidiary's notes receivable | | **Long-Term Receivables** | 2,346,298,344.09 | 2,824,766,157.57 | -16.94 | Decrease in subsidiary's long-term receivables | | **Short-Term Borrowings** | 1,080,000,000.00 | 2,096,000,000.00 | -48.47 | Increase in subsidiary's short-term loan repayments | | **Long-Term Borrowings** | 1,260,000,000.00 | 2,210,000,000.00 | -42.99 | Reclassification of some long-term borrowings to current maturities | | **Other Payables** | 875,744,729.78 | 473,679,233.19 | 84.88 | Increase in shareholder loans received by subsidiaries | | **Long-Term Payables** | 633,883,200.00 | 200,000,000.00 | 216.94 | Increase in long-term shareholder loans received by subsidiaries | [Industry Operating Information Analysis](index=18&type=section&id=%28IV%29%20Industry%20Operating%20Information%20Analysis) In 2018, the company completed 990 projects totaling RMB 97.842 billion and had 144 ongoing projects totaling RMB 167.783 billion; among major ongoing projects, the Jiangke University project (BT model) was 95% complete, and the Fenghua Affordable Housing project (BT model) was 100% complete, with RMB 506 million in completed but unsettled inventory Completed and Accepted Projects During the Reporting Period (Unit: RMB 10,000) | Sub-Industry | Building Construction | Infrastructure Engineering | Specialized Engineering | Other | Total | | :--- | :--- | :--- | :--- | :--- | | **Number of Projects (Units)** | 4 | 13 | 11 | 962 | 990 | | **Total Amount** | 38,964 | 31,138 | 2,172 | 25,568 | 97,842 | Ongoing Projects During the Reporting Period (Unit: RMB 10,000) | Sub-Industry | Building Construction | Infrastructure Engineering | Specialized Engineering | Other | Total | | :--- | :--- | :--- | :--- | :--- | | **Number of Projects (Units)** | 8 | 19 | 9 | 108 | 144 | | **Total Amount** | 86,632 | 69,869 | 11,281 | 1.47 | 167,783.47 | - The balance of completed but unsettled inventory was **RMB 505.9408 million**[59](index=59&type=chunk) [Investment Status Analysis](index=21&type=section&id=%28V%29%20Investment%20Status%20Analysis) During the reporting period, the company's most significant investment activity was a major asset sale, with wholly-owned subsidiary CSSC No. 9 Institute publicly listing and completing the transfer of 21% equity in Xuzhou CSSC Yangguang Investment Development Co., Ltd. in December 2018, while also initiating pre-listing procedures for the transfer of 50% equity in Yangzhou Sanwan Investment Development Co., Ltd., maintaining a largely stable total external equity investment [Overall Analysis of External Equity Investments](index=21&type=section&id=1.%20Overall%20Analysis%20of%20External%20Equity%20Investments) As of year-end 2018, the company's total long-term equity investments in joint ventures and associates amounted to RMB 194 million, remaining largely consistent with the beginning of the period Long-Term Equity Investment Status (Unit: RMB) | Item | Period-End Balance | Period-Start Balance | Change (%) | | :--- | :--- | :--- | :--- | | **Joint Ventures** | 42,444,755.07 | 45,109,640.72 | -5.91 | | **Associates** | 151,301,981.86 | 148,717,352.32 | 1.74 | | **Total** | 193,746,736.93 | 193,826,993.04 | -0.04 | [Major Asset and Equity Sales](index=21&type=section&id=%28VI%29%20Major%20Asset%20and%20Equity%20Sales) During the reporting period, the company's wholly-owned subsidiary CSSC No. 9 Institute successfully transferred 21% equity in Xuzhou CSSC Yangguang Investment Development Co., Ltd., completed in December 2018, while also initiating and obtaining board and shareholder approval for the transfer of 50% equity in Yangzhou Sanwan Investment Development Co., Ltd - Wholly-owned subsidiary **CSSC No. 9 Institute completed the sale of 21% equity in Xuzhou CSSC Yangguang Investment Development Co., Ltd.** in **December 2018**[63](index=63&type=chunk) - The company has initiated and received approval for the public listing and transfer of **50% equity in Yangzhou Sanwan Investment Development Co., Ltd.**, with an appraisal base date of March 31, 2018, and a proposed transfer value of **RMB 456 million**[63](index=63&type=chunk)[64](index=64&type=chunk) [Analysis of Major Holding and Participating Companies](index=22&type=section&id=%28VII%29%20Analysis%20of%20Major%20Holding%20and%20Participating%20Companies) Wholly-owned subsidiary CSSC No. 9 Institute is the company's core asset and primary revenue source, achieving RMB 3.14 billion in operating revenue and RMB 108 million in net profit in 2018, while another wholly-owned subsidiary, CSSC Huahai Marine Equipment Co., Ltd., incurred a significant loss with a net profit of -RMB 90 million Financial Status of Major Holding and Participating Companies (Unit: RMB 10,000) | Investee Name | Shareholding (%) | Operating Revenue | Net Assets | Net Profit | | :--- | :--- | :--- | :--- | :--- | | **CSSC No. 9 Design and Research Institute Engineering Co., Ltd.** | 100.00 | 314,000 | 306,658 | 10,761 | | **CSSC Huahai Marine Equipment Co., Ltd.** | 100.00 | 6,565 | 14,926 | -9,042 | [Company's Future Development Outlook](index=22&type=section&id=III.%20Discussion%20and%20Analysis%20of%20the%20Company%27s%20Future%20Development) The company plans to achieve approximately RMB 3.55 billion in operating revenue in 2019, continuing to advance its development strategy through M&A projects like acquiring 100% equity of Haiying Enterprise Group to optimize industrial structure, while subsidiary CSSC No. 9 Institute will focus on strengthening design consulting, optimizing general contracting, stabilizing investment and financing, and expanding into technology industrialization and smart factory digital platform construction, recognizing multiple risks including business structure transformation, policy, project management, and financial aspects [Industry Landscape and Trends](index=22&type=section&id=%28I%29%20Industry%20Landscape%20and%20Trends) In terms of macroeconomics, China's economy in 2019 will maintain steady progress with supply-side structural reform as the main theme; regarding industry trends, the global new shipbuilding market presents both opportunities and challenges, with an estimated transaction volume of around 70 million deadweight tons, while the construction industry will continue to promote industrial modernization and transformation, with EPC general contracting led by design units becoming a major trend - Global new shipbuilding orders are estimated at approximately **70 million DWT** in 2019, with China's shipbuilding completion volume around **35 million DWT** and new orders around **30 million DWT**[68](index=68&type=chunk) - The construction industry will continue to drive transformation and upgrading, with **EPC general contracting led by design units** gradually becoming the main trend in industry development[68](index=68&type=chunk) [Company Development Strategy](index=23&type=section&id=%28II%29%20Company%20Development%20Strategy) Based on its published '2018-2025 Development Strategic Plan Outline,' the company aims to become a diversified development platform for high-tech and new industries under CSSC Group, striving to establish a leading position in its principal business sectors through active industrial layout and diversified development to maximize company and shareholder value - The company's strategic goal is to build a **diversified development platform for high-tech and new industries** under **CSSC Group**, forming a management and control platform with multiple industries of certain scale[69](index=69&type=chunk) [Operating Plan](index=23&type=section&id=%28III%29%20Operating%20Plan) In 2019, the company plans to achieve approximately RMB 3.55 billion in operating revenue, with key initiatives including promoting the share issuance to acquire 100% equity of Haiying Enterprise Group for restructuring; subsidiary CSSC No. 9 Institute will focus on its '3+2' strategic layout, adjusting production organization to strengthen design, optimize general contracting, stabilize investment and financing, and advance technology industrialization and smart factory digital platform construction; subsidiary CSSC Huahai will concentrate on securing orders, improving management, increasing profits, and leveraging military qualifications to undertake military projects - **2019 operating target** is approximately **RMB 3.55 billion in operating revenue**[70](index=70&type=chunk) - Plans to vigorously promote the **major related-party transaction of issuing shares to acquire 100% equity of Haiying Enterprise Group Co., Ltd.** to optimize industrial structure[70](index=70&type=chunk) - **CSSC No. 9 Institute** will prioritize advancing **technology industrialization** and **smart factory digital platform construction** as two 'new' industries[71](index=71&type=chunk) [Potential Risks](index=24&type=section&id=%28IV%29%20Potential%20Risks) The company faces key risks including business structure transformation risk due to tightening national policies on PPP projects and SOE participation in real estate development, policy risk from macroeconomic changes significantly impacting PPP and other projects, engineering project management risk due to uncertainties in new model project implementation, and financial risk from substantial advance payments and loan guarantees in BT and EPC projects, leading to financial and liquidity pressures - **Business structure transformation risk**: Strict national control and supervision over **PPP projects** and **SOE participation in real estate development** impact the company's future business acquisition[72](index=72&type=chunk) - **Policy risk**: Regulatory documents issued by the Ministry of Finance, SASAC, and other departments impose higher requirements on **PPP projects**, and macroeconomic policies significantly impact the company's future development[72](index=72&type=chunk) - **Financial risk**: Advance payment projects like **BT, EPC, and PPP** generate substantial advance payments and loan guarantees, leading to certain financial risks and liquidity pressures for the company[72](index=72&type=chunk) [Significant Matters](index=25&type=section&id=Item%20V%20Significant%20Matters) This section details important events and actions undertaken by the company during the reporting period, including profit distribution, fulfillment of commitments, major related-party transactions, significant contracts, and social responsibility initiatives [Profit Distribution Plan](index=25&type=section&id=I.%20Ordinary%20Share%20Profit%20Distribution%20or%20Capital%20Reserve%20to%20Share%20Capital%20Increase%20Plan) The company's board proposed a 2018 profit distribution plan to distribute a cash dividend of RMB 0.2 (tax inclusive) per 10 shares to all shareholders based on a total share capital of 736 million shares, totaling RMB 14.725 million in cash, representing 22.50% of net profit attributable to shareholders, with no capital reserve conversion to share capital for the year; this plan awaits shareholder approval Dividend Distribution Plans for the Past Three Years | Dividend Year | Dividend Per 10 Shares (RMB, Tax Inclusive) | Cash Dividend Amount (RMB, Tax Inclusive) | Ratio of Cash Dividend to Net Profit Attributable to Ordinary Shareholders of Listed Company in Consolidated Statements (%) | | :--- | :--- | :--- | :--- | | **2018** | 0.2 | 14,724,997.66 | 22.50 | | **2017** | 0 | 0 | 0 | | **2016** | 0 | 0 | 0 | [Fulfillment of Commitments](index=25&type=section&id=II.%20Fulfillment%20of%20Commitments) During the reporting period, the company and its controlling shareholder CSSC Group strictly fulfilled all commitments related to major asset restructuring, including resolving horizontal competition and related-party transactions; regarding profit forecast compensation commitments, 7 companies under CSSC No. 9 Institute assessed by income approach and 3 projects assessed by hypothetical development method all met or exceeded their original cumulative net profit forecasts for 2018 - **CSSC Group's commitments** made during the major asset restructuring, including resolving **horizontal competition, related-party transactions, property defects, asset value guarantees, and profit forecast compensation**, were **strictly fulfilled** during the reporting period[77](index=77&type=chunk)[78](index=78&type=chunk) 2018 Profit Forecast Achievement (Unit: RMB 10,000) | Valuation Method | Commitment Party | 2018 Profit Forecast | 2018 Actual Profit | Difference | | :--- | :--- | :--- | :--- | :--- | | **Income Approach (7 Companies Total)** | CSSC Group | 1,720.81 | 2,593.30 | 872.49 | | **Hypothetical Development Method (3 Projects Cumulative)** | CSSC Group | 11,933.45 | 12,324.14 | 390.69 | [Significant Related-Party Transactions](index=31&type=section&id=XIV.%20Significant%20Related-Party%20Transactions) During the reporting period, the company engaged in multiple significant related-party transactions; in ordinary operations, it conducted approximately RMB 1.136 billion in goods purchase/sale and service provision transactions with intra-group affiliates and other related parties, while in fund movements, the company provided RMB 880 million in funds to related parties and received RMB 276 million from them as of period-end - The total amount of **related-party transactions related to ordinary operations was substantial**, with **provision of services** (contracting, survey, design, consulting) being the main component, and transactions with **Jiangnan Shipyard (Group) reaching RMB 495 million**[97](index=97&type=chunk)[99](index=99&type=chunk) - Wholly-owned subsidiary **CSSC Huahai provided a RMB 300 million entrusted loan to Jiangnan Dairuis**, and **CSSC No. 9 Institute made a capital increase to its controlled subsidiary CSSC Industrial Building Company**, both constituting related-party transactions that have completed the necessary approval procedures[94](index=94&type=chunk)[95](index=95&type=chunk) [Significant Contracts and Their Performance](index=38&type=section&id=XV.%20Significant%20Contracts%20and%20Their%20Performance) During the reporting period, the company's total external guarantees amounted to RMB 532 million, representing 14.31% of its net assets, all provided to guaranteed parties with debt-to-asset ratios exceeding 70%; the company won the Zhanjiang Port Xiashan Port Area General Terminal EPC General Contracting Project with a bid amount of approximately RMB 501 million, and also had RMB 600 million in unexpired entrusted loans - Wholly-owned subsidiary **CSSC No. 9 Institute won the EPC (Design, Procurement, Construction) general contracting project for Zhanjiang Port Xiashan Port Area General Terminal Engineering**, with a total bid amount of **RMB 500,706,130.32**[111](index=111&type=chunk) External Guarantee Status (Unit: RMB) | Item | Amount | | :--- | :--- | | **Total Guarantee Balance at Period End (A+B)** | 532,000,000.00 | | **Ratio of Total Guarantee to Company's Net Assets (%)** | 14.31% | | **Debt Guarantee Amount Provided to Guaranteed Parties with Debt-to-Asset Ratio Exceeding 70% (D)** | 532,000,000.00 | [Social Responsibility](index=41&type=section&id=XVII.%20Work%20on%20Actively%20Fulfilling%20Social%20Responsibilities) The company actively fulfills its social responsibilities, participating in targeted poverty alleviation in Heqing County, Yunnan Province, investing RMB 281,100 in industrial poverty alleviation and agricultural product procurement; it organized blood donation and urban-rural pairing assistance, prioritizes employee rights with comprehensive compensation, benefits, and training systems, and disclosed pollution discharge and treatment facility operations for its invested subsidiaries Longxue Pipe Industry and Jiangnan Pipe Industry - The company actively participated in **targeted poverty alleviation in Heqing County, Yunnan Province**, investing **RMB 281,100** during the reporting period to support pig farming projects and purchase local agricultural products[112](index=112&type=chunk)[113](index=113&type=chunk)[114](index=114&type=chunk) - The company prioritizes **employee responsibility**, establishing supplementary provident fund and annuity systems, and conducting various employee care and cultural/sports activities[117](index=117&type=chunk) - The company disclosed pollution discharge information for **key polluting invested subsidiaries** (**Longxue Pipe Industry, Jiangnan Pipe Industry**) regarding **exhaust gas, wastewater, solid waste, and noise**, along with the construction and operation of pollution control facilities and relevant environmental permits[119](index=119&type=chunk)[120](index=120&type=chunk)[121](index=121&type=chunk)[125](index=125&type=chunk) [Share Changes and Shareholder Information](index=45&type=section&id=Item%20VI%20Ordinary%20Share%20Changes%20and%20Shareholder%20Information) This section details changes in the company's ordinary share capital and provides information on its shareholders and actual controller [Changes in Ordinary Share Capital](index=45&type=section&id=I.%20Changes%20in%20Ordinary%20Share%20Capital) During the reporting period, the company's total ordinary share capital and share structure remained unchanged, with a total share capital of 736,249,883 shares, of which 135,471,113 shares held by controlling shareholder CSSC Group are restricted shares due to A-share subscription, with a 36-month lock-up period expiring on November 4, 2019 - During the reporting period, the company's **total ordinary share capital and share structure remained unchanged**[131](index=131&type=chunk) Changes in Restricted Shares (Unit: Shares) | Shareholder Name | Restricted Shares at Year Start | Restricted Shares Released This Year | Restricted Shares at Year End | Reason for Restriction | Release Date | | :--- | :--- | :--- | :--- | :--- | :--- | | **CSSC Group** | 135,471,113 | 0 | 135,471,113 | A-share subscription, committed not to transfer for 36 months | November 4, 2019 | [Shareholders and Actual Controller Information](index=46&type=section&id=III.%20Shareholders%20and%20Actual%20Controller%20Information) As of year-end 2018, the company had 79,432 ordinary shareholders; the controlling shareholder is China State Shipbuilding Corporation Limited, holding a combined direct and indirect stake of 41.28% through concerted parties, while other top ten shareholders, excluding the controlling shareholder, each held less than 5% - As of the end of the reporting period, the company had **79,432 shareholders**[133](index=133&type=chunk) Top Five Shareholders' Shareholding | Shareholder Name | Shares Held at Period End (Shares) | Proportion (%) | Nature | | :--- | :--- | :--- | :--- | | **China State Shipbuilding Corporation Limited** | 275,204,726 | 37.38 | State-owned Legal Person | | **Jiangnan Shipyard (Group) Co., Ltd.** | 28,727,521 | 3.90 | State-owned Legal Person | | **Beijing Hengyu Tianze Fund Sales Co., Ltd. - Hengyu Tianze Ying·Ying No. 1 Private Investment Fund** | 21,608,920 | 2.93 | Unknown | | **Shanghai International Group Asset Management Co., Ltd.** | 12,607,879 | 1.71 | Unknown | | **Guangxi Railway Development Phase II Investment Fund Partnership (Limited Partnership)** | 11,062,385 | 1.50 | Unknown | - The company's **controlling shareholder and ultimate actual controller** are both **China State Shipbuilding Corporation Limited**[137](index=137&type=chunk)[139](index=139&type=chunk) [Directors, Supervisors, Senior Management, and Employees](index=50&type=section&id=Item%20VIII%20Directors%2C%20Supervisors%2C%20Senior%20Management%2C%20and%20Employees) This section provides information on the company's directors, supervisors, senior management, and employees, including their shareholdings, remuneration, and overall workforce structure [Changes in Shareholding and Remuneration of Directors, Supervisors, and Senior Management](index=50&type=section&id=I.%20Changes%20in%20Shareholding%20and%20Remuneration) During the reporting period, all current and former directors, supervisors, and senior management did not hold company shares, nor were there any changes in shareholding; in 2018, the company paid a total pre-tax remuneration of RMB 6.9851 million to directors, supervisors, and senior management, with some directors and supervisors not receiving remuneration from the company due to their positions in related parties - During the reporting period, **all directors, supervisors, and senior management did not hold company shares**[143](index=143&type=chunk)[144](index=144&type=chunk) - The total pre-tax remuneration received from the company during the reporting period amounted to **RMB 6.9851 million**[144](index=144&type=chunk) [Employee Information](index=56&type=section&id=VI.%20Employee%20Information%20of%20Parent%20Company%20and%20Major%20Subsidiaries) As of the end of the reporting period, the company had a total of 1,564 employees, with technical personnel being the largest group at 990; employees with bachelor's degrees or higher accounted for over 75% of the total, and the company implements a market-oriented compensation policy linking remuneration to performance, while providing comprehensive training programs to enhance professional capabilities Employee Professional Composition | Professional Category | Number of Persons | | :--- | :--- | | **Production Personnel** | 262 | | **Sales Personnel** | 53 | | **Technical Personnel** | 990 | | **Financial Personnel** | 43 | | **Administrative Personnel** | 216 | | **Total** | 1,564 | - The company implements a **market-oriented compensation policy**, linking all employee performance-based remuneration to performance appraisals, and contributes to **'five insurances and one housing fund' and enterprise annuity** as required[160](index=160&type=chunk) - The company formulated and implemented **annual training programs** covering topics such as accounting standards, capital operations, and project management, to **enhance employees' professional capabilities**[161](index=161&type=chunk)[162](index=162&type=chunk) [Corporate Governance](index=57&type=section&id=Item%20IX%20Corporate%20Governance) This section describes the company's corporate governance framework, including the roles and operations of its key governing bodies and its internal control systems [Overview of Corporate Governance](index=57&type=section&id=I.%20Explanation%20of%20Corporate%20Governance%20Related%20Matters) During the reporting period, the company continuously improved its corporate governance structure in strict accordance with the 'Company Law' and other regulations; the Shareholders' Meeting, Board of Directors, Board of Supervisors, and management team operated with clear responsibilities and in a standardized manner, successfully completing the re-election of the Eighth Board of Directors and Board of Supervisors with personnel composition meeting regulatory requirements, and there were no significant discrepancies between the company's actual governance and regulatory provisions - The company's **corporate governance structure is well-established**, with the **Shareholders' Meeting, Board of Directors, Board of Supervisors, and management team** each performing their duties with **clear responsibilities**, in compliance with regulatory requirements[163](index=163&type=chunk) - During the reporting period, the **re-election of the Eighth Board of Directors and Board of Supervisors was successfully completed**, with personnel composition meeting legal and regulatory requirements[163](index=163&type=chunk) [Internal Control Evaluation](index=59&type=section&id=VIII.%20Whether%20Internal%20Control%20Self-Evaluation%20Report%20is%20Disclosed) The company disclosed its 2018 Internal Control Self-Evaluation Report and Internal Control Audit Report, concluding that as of December 31, 2018, the company maintained effective internal controls over financial reporting in all material respects, with no significant deficiencies found in internal controls over financial or non-financial reporting - The company disclosed its **'2018 Internal Control Evaluation Report'**, concluding that the company has maintained **effective internal controls over financial reporting in all material respects**[170](index=170&type=chunk) - The company found **no significant deficiencies in internal controls over financial reporting or non-financial reporting**[170](index=170&type=chunk) - The company also disclosed the **'2018 Internal Control Audit Report'** issued by **ShineWing Certified Public Accountants (Special General Partnership)**[171](index=171&type=chunk) [Financial Report](index=61&type=section&id=Item%20X%20Financial%20Report) This section presents the company's audited financial statements for the reporting period, including the audit report, financial statements, basis of preparation, and detailed notes to the consolidated financial statements [Audit Report](index=61&type=section&id=I.%20Audit%20Report) ShineWing Certified Public Accountants (Special General Partnership) issued a standard unqualified audit opinion on the company's 2018 financial statements, concluding that the financial statements fairly presented the company's financial position and operating results in all material respects, with key audit matters being 'provision for doubtful accounts receivable' and 'revenue recognition using the percentage-of-completion method' - The auditing firm is **ShineWing Certified Public Accountants (Special General Partnership)**, which issued a **standard unqualified audit opinion**[3](index=3&type=chunk)[173](index=173&type=chunk) - Key audit matters include: - **Provision for doubtful accounts receivable**: Involves significant management judgment in assessing recoverability - **Revenue recognition using the percentage-of-completion method**: Involves significant management judgment and estimation in recognizing engineering general contracting revenue[175](index=175&type=chunk)[176](index=176&type=chunk)[178](index=178&type=chunk) [Financial Statements](index=65&type=section&id=II.%20Financial%20Statements) This section includes the company's 2018 consolidated and parent company balance sheets, income statements, cash flow statements, and statements of changes in owners' equity [Basis of Financial Statement Preparation](index=83&type=section&id=IV.%20Basis%20of%20Financial%20Statement%20Preparation) The company's financial statements are prepared on a going concern basis, comply with enterprise accounting standards, and fairly and completely reflect the company's financial position and operating results - Financial statements are prepared on a **going concern basis**[211](index=211&type=chunk) [Notes to Consolidated Financial Statement Items](index=100&type=section&id=VII.%20Notes%20to%20Consolidated%20Financial%20Statement%20Items) This section provides detailed explanations of the composition and changes in major accounts within the consolidated financial statements, including monetary funds, receivables, inventories, fixed assets, borrowings, and related-party transactions [Corporate Bonds Related Information](index=191&type=section&id=Item%20XI%20Corporate%20Bonds%20Related%20Information) This section provides information regarding the company's corporate bonds - During the reporting period, the company had **no corporate bond related information**[534](index=534&type=chunk) [Reference Documents Catalog](index=192&type=section&id=Item%20XII%20Reference%20Documents%20Catalog) This section lists all documents available for reference

Financial Performance - Operating revenue decreased by 17.35% to CNY 2.26 billion for the first nine months compared to the same period last year[6] - Net profit attributable to shareholders decreased by 84.19% to CNY 2.63 million for the first nine months compared to the same period last year[6] - Basic earnings per share decreased by 82.61% to CNY 0.004[7] - The company reported a net profit of CNY 268,962,558.01, slightly up from CNY 266,328,610.53, indicating a growth of 1.0%[19] - Net profit for Q3 2018 was -25,215,610.98 CNY, compared to a profit of 129,306.38 CNY in Q2 2018[28] - The company reported a net profit of -¥57,768.69 for the third quarter, a significant recovery from -¥18,631,563.51 in the same quarter last year[31] Cash Flow - Net cash flow from operating activities improved to CNY -776 million, a significant reduction from CNY -1.29 billion in the same period last year[6] - The net cash flow from operating activities for the first nine months was -¥776,002,883.66, an improvement compared to -¥1,285,102,919.10 in the previous year[35] - The net cash flow from investment activities is $131,041,818.27, a substantial recovery from a net outflow of $384,558,233.25 in the prior year[37] - Cash inflow from operating activities was $139,137,546.50, down from $284,472,593.47 year-over-year, indicating a decrease in operational cash generation[37] Assets and Liabilities - Total assets increased by 3.86% to CNY 11.37 billion compared to the end of the previous year[6] - Total liabilities rose to CNY 7,334,777,715.22, up from CNY 6,882,294,060.59, indicating an increase of 6.5%[19] - Current liabilities totaled CNY 4,836,950,547.37, an increase of 10.1% from CNY 4,392,281,464.48[19] - Cash and cash equivalents balance decreased to ¥1,412,422,271.26 from ¥1,471,820,646.42[17] Shareholder Information - The total number of shareholders reached 80,569 by the end of the reporting period[8] - China Shipbuilding Industry Group Co., Ltd. holds 37.38% of the shares, making it the largest shareholder[8] Research and Development - Research and development expenses rose by 63.58% to ¥41,346,655.57 due to increased R&D projects at subsidiaries[10] - Research and development expenses increased to 21,214,832.61 CNY in Q3 2018, up from 8,899,879.55 CNY in Q2 2018, indicating a focus on innovation[27] Investment Activities - Investment income decreased by 33.85% to ¥61,026,235.91 due to reduced profits from joint ventures[10] - Cash received from investment income increased by 128.68% to ¥104,919,500.11 due to higher interest from entrusted loans[11] - The company plans to publicly transfer 21% equity of a subsidiary, which is expected to positively impact annual profits[12] Other Financial Metrics - The company incurred total operating expenses of ¥2,675,760,298.97 in the first nine months, down from ¥3,128,574,753.77 in the same period last year[35] - The company’s total comprehensive income for Q3 2018 was -24,158,474.13 CNY, compared to -3,470,768.20 CNY in Q2 2018[29] - The company’s management expenses were 43,803,852.55 CNY in Q3 2018, slightly up from 41,821,271.77 CNY in Q2 2018[27]

Financial Performance - The company's operating revenue for the first half of 2018 was CNY 1,446,591,908.50, a decrease of 22.36% compared to CNY 1,863,269,509.29 in the same period last year[20]. - The net profit attributable to shareholders for the first half of 2018 was CNY 8,186,129.81, down 38.98% from CNY 13,414,822.22 in the previous year[20]. - Basic earnings per share for the first half of 2018 were CNY 0.011, down 38.89% from CNY 0.018 in the same period last year[21]. - The weighted average return on net assets decreased by 0.15 percentage points to 0.22% compared to 0.37% in the previous year[21]. - The company reported a significant reduction in costs related to ship accessories, attributed to a major asset restructuring completed in 2016[41]. - The total operating cost for the company was RMB 1.259 billion, resulting in a gross profit margin of 12.54%, which is an increase of 2.73 percentage points compared to the previous year[37]. - The company reported a net profit for the first half of 2018 was a loss of CNY 4,533,060.50, compared to a profit of CNY 7,363,156.20 in the previous year[123]. Cash Flow and Assets - The net cash flow from operating activities was negative CNY 562,824,718.87, an improvement from negative CNY 893,039,772.13 in the same period last year[20]. - The total assets at the end of the reporting period were CNY 10,899,223,980.23, a decrease of 0.42% from CNY 10,945,048,146.16 at the end of the previous year[20]. - The company’s cash and cash equivalents decreased to ¥1,419,529,688.88 from ¥1,471,820,646.42, representing a decline of approximately 3.5%[115]. - Accounts receivable decreased to ¥756,198,171.90 from ¥1,182,733,730.85, a reduction of about 36%[115]. - The company reported a significant reduction in accounts receivable, which decreased to CNY 63,887,446.55 from CNY 126,649,539.06, a drop of 49.7%[120]. Business Operations and Strategy - The main business activities include design consulting, engineering contracting, and urbanization construction, with a focus on expanding into non-ship engineering sectors[27]. - The company aims to strengthen its design capabilities, expand its general contracting business, and stabilize its financing operations[30]. - The shipbuilding market has shown signs of recovery, but challenges such as financing difficulties and profitability issues persist[30]. - The company has established a diversified business model that extends from design consulting to comprehensive project management and capital operations[29]. - The company is actively promoting the operation of platform companies to revitalize assets and strengthen industry research[28]. - The company is focusing on technological industrialization and digital platforms to enhance operational services[27]. Project and Revenue Insights - The company achieved a total revenue of RMB 1.447 billion during the reporting period, with its wholly-owned subsidiary, China Shipbuilding Industry Corporation (CSIC) No. 9 Institute, contributing RMB 1.397 billion, accounting for 96.55% of total revenue[35]. - The company has successfully undertaken several significant projects, including the design and construction of the Zhangjiajie Taiwan Style Town project and the 1200T gantry crane project for the Fuchuan Yifan New Energy Offshore Equipment Base[35]. - The overseas design consulting business of CSIC No. 9 Institute has also seen significant success, with projects in Cambodia and Myanmar being secured during the reporting period[35]. - The company reported a total of 639 new projects with a total value of 1.64141 billion RMB during the reporting period[47]. - The total number of ongoing projects is 367, with a total value of CNY 1,164,025,239.00, indicating a strong project pipeline[44]. Cost Management - The total cost for the current period is CNY 1,258,892,977.60, a decrease of 24.78% compared to CNY 1,674,919,181.93 in the same period last year[40]. - The proportion of subcontracting costs in engineering total increased to 71.30%, up from 47.34% year-on-year, reflecting a rise in completed EPC projects[41]. - The cost of land acquisition decreased by 96.59% to CNY 1,363,762.19 from CNY 39,976,151.00 in the previous year, due to slower progress in certain projects[41]. Related Party Transactions - The company reported a total of 288,629,187.26 RMB in related party transactions, accounting for 19.95% of similar transactions[73]. - The company engaged in related party transactions with Guangzhou Wenchong Shipyard Co., Ltd. for 6,713,793.10 RMB, representing 0.53% of similar transactions[72]. - The company emphasized the independence of its decision-making in related party transactions to protect shareholder interests[75]. - The company maintained a focus on fair pricing in related party transactions, adhering to market rates[75]. Environmental and Social Responsibility - The company has committed to continue implementing poverty alleviation projects focusing on education, healthcare, and living conditions improvement[89]. - The wastewater discharge from the subsidiary Longxue Pipe Industry was approximately 6,088 tons, which did not exceed the annual discharge limit[91]. - Environmental protection measures are in place, including the construction of a wastewater treatment station and noise reduction facilities[96]. Governance and Compliance - The company has renewed its appointment of Xinyong Zhonghe Accounting Firm for the 2018 financial audit, with fees set at 600,000 RMB for financial audit and 250,000 RMB for internal control audit[68]. - The integrity status of the company and its controlling shareholder, China Shipbuilding Group, is reported to be good during the reporting period[70]. - The company has not proposed any profit distribution or capital reserve transfer plans for the half-year period[65].

Financial Performance - Operating revenue for the current period was ¥579,830,015.16, a decrease of 11.38% year-on-year[6] - Net profit attributable to shareholders of the listed company was ¥4,429,294.55, representing a significant increase of 128.83% compared to the same period last year[6] - Basic earnings per share rose to ¥0.015, an increase of 275.00% from ¥0.004 in the previous year[6] - The weighted average return on net assets increased to 30.2%, up by 21.4 percentage points from the previous year[6] - The company reported an increase in sales revenue to ¥915,924,649.88, up 51.47% compared to the previous period[12] - The company recorded an investment income of ¥11,439,320.16, which is a 120.27% increase from the previous year[12] - The company reported a significant increase in employee compensation payable, rising to ¥47,232,175.48 from ¥6,233,414.83, an increase of 657.73%[12] - The company reported a decrease in government subsidies received, with other operating income falling to ¥942,782.25, down 82.38% from the previous period[12] Assets and Liabilities - Total assets at the end of the reporting period reached ¥10,976,350,764.80, an increase of 0.29% compared to the end of the previous year[6] - The total liabilities increased to ¥6,629,833,235.98 from ¥6,602,281,464.48, a rise of 0.42%[17] - The company's total assets as of March 31, 2018, amounted to CNY 3,862,848,537.02, a decrease from CNY 3,923,071,973.85 at the beginning of the year[22] - Total liabilities decreased to CNY 252,189,862.68 from CNY 315,908,086.22, reflecting a reduction of approximately 20.1%[22] - The company's equity attributable to shareholders increased to CNY 3,610,658,674.34 from CNY 3,607,163,887.63, showing a slight growth[22] Cash Flow - The company reported a net cash flow from operating activities of -¥349,663,071.71, an improvement from -¥653,521,966.32 in the previous year[6] - Cash and cash equivalents at the end of Q1 2018 were CNY 298,522,561.50, down from CNY 304,712,189.07 at the beginning of the year[20] - The net cash flow from operating activities was CNY -349,663,071.71, an improvement from CNY -653,521,966.32 in the previous year[33] - Cash and cash equivalents at the end of the period were CNY 1,191,303,652.88, down from CNY 1,500,662,606.19 at the end of the previous year[33] - The net increase in cash and cash equivalents was -$7,886,291.99, an improvement from -$204,120,863.61 last period[36] Shareholder Information - The number of shareholders at the end of the reporting period was 86,545[8] - The largest shareholder, China Shipbuilding Industry Group Co., Ltd., held 37.38% of the shares[8] Receivables and Prepayments - The increase in accounts receivable was 54.25%, attributed to an increase in bank acceptance bills received by a subsidiary[11] - Prepayments increased by 30.13%, due to higher advance payments made to subcontractors by a subsidiary[11] - The company's prepayments increased to ¥1,247,681,452.26, up 30.2% from ¥958,825,137.55[16] - Accounts receivable decreased to ¥987,253,709.96 from ¥1,182,733,730.85, representing a reduction of 16.5%[16] - Accounts receivable decreased to CNY 81,230,078.80 from CNY 126,649,539.06, indicating a reduction of approximately 35.8%[20] Operating Costs - Total operating costs for Q1 2018 were CNY 594,305,521.64, down 10.5% from CNY 664,549,472.11 year-over-year[25] - The company's operating revenue for Q1 2018 was CNY 19,285,942.53, a decrease of 70.7% compared to CNY 65,802,530.80 in the same period last year[28] - The company incurred an asset impairment loss of CNY 748,137.10, significantly lower than CNY 5,330,654.77 in the previous year[28]

Financial Performance - The net profit attributable to shareholders for 2017 was ¥30,419,191.59, a significant recovery from a loss of ¥42,929,500.08 in 2016, marking an improvement of over 170%[5]. - Total operating revenue for 2017 was ¥4,263,628,598.18, representing a decrease of 19.62% compared to ¥5,304,151,934.91 in 2016[20]. - The net profit attributable to shareholders rose significantly, with the parent company reducing its loss to CNY 37.25 million from CNY 122.55 million in the previous year, a decrease in loss of CNY 85.30 million[23]. - In 2017, the basic earnings per share increased to CNY 0.041 from a loss of CNY 0.080 in 2016, marking a significant recovery[22]. - The company reported a net profit of CNY 22.72 million from non-recurring gains in 2017, compared to CNY 99.04 million in 2016[28]. - The company achieved a total contract amount of RMB 6.295 billion during the reporting period, with an annual revenue of RMB 4.264 billion and a net profit attributable to shareholders of RMB 30.42 million[45]. - The company reported a total of 994 projects completed, with 55,433 million RMB in total value, indicating a strong project pipeline[69]. - The total revenue for the year reached approximately 52,039,721.40 million, with a significant contribution from various subsidiaries[123]. Assets and Liabilities - The net assets attributable to shareholders increased slightly by 0.79% to ¥3,653,201,662.71 at the end of 2017 from ¥3,624,500,142.69 at the end of 2016[21]. - The total assets decreased by 2.08% to ¥10,945,048,146.16 at the end of 2017, down from ¥11,177,662,074.36 at the end of 2016[21]. - The company’s total equity investment decreased from ¥21,039,067.20 to ¥15,141,616.70, a reduction of ¥5,897,450.50, impacting profits by ¥1,904,002.14[33]. - Cash and cash equivalents decreased by 39.64% to ¥1,471,820,646.42, down from ¥2,438,533,258.52 in the previous period[62]. - Accounts receivable decreased by 22.60% to ¥1,182,733,730.85, compared to ¥1,528,141,003.89 last period, due to increased collection of project payments[62]. - Inventory increased by 13.97% to ¥1,414,359,007.86, up from ¥1,241,041,577.40, attributed to unbilled subcontracting projects[62]. - Short-term borrowings increased by 32.57% to ¥2,096,000,000.00, compared to ¥1,581,000,000.00 in the previous period[63]. Cash Flow - The cash flow from operating activities showed a negative net amount of ¥1,054,616,839.10, worsening from a negative cash flow of ¥702,114,914.05 in 2016[21]. - The company reported a net cash flow from operating activities of -RMB 1.055 billion, indicating a 50.21% increase in cash outflow compared to the previous year[48]. - The net cash flow from investing activities increased as there were no significant land payment and construction expenses this period[60]. - The net cash flow from financing activities decreased as there were no fundraising activities this period, unlike the previous year[60]. Business Strategy and Operations - The company is transitioning to a holding platform model, enhancing asset management and investment operations, focusing on engineering design and total contracting services[30]. - The company aims to expand its business into non-ship engineering sectors, including civil construction and overseas projects, as part of its strategic transformation[30]. - The company has diversified its business model to cover the entire construction industry chain, from design consulting to project management and total contracting[32]. - The company is actively involved in the Belt and Road Initiative and urbanization projects, contributing to the overall stability of the construction industry[33]. - The company is committed to integrating advanced technologies such as BIM and energy-saving measures into its project designs, promoting sustainable development[39]. - The company is focusing on new development directions such as elderly care, healthcare, education, and green development, reflecting a strategic shift in response to market changes[67]. - The company plans to enhance its market competitiveness through innovation in technology, business models, and management systems[85]. Research and Development - Research and development expenditure increased by 48.29% to RMB 76.77 million, reflecting the company's commitment to innovation[48]. - The company has increased its patent holdings to 175, a 19% growth compared to 2016, enhancing its competitive edge in various engineering fields[39]. - Total R&D expenditure amounted to ¥76,772,589.50, representing 1.80% of total revenue, with 285 R&D personnel accounting for 15.02% of the total workforce[58]. - The company is exploring strategic acquisitions to bolster its technological capabilities and market share[123]. Governance and Management - The company has a clear policy for the appointment and remuneration of its directors and senior management, reflecting its commitment to corporate governance[164]. - The total pre-tax compensation for the board members and senior management during the reporting period amounted to 8.8236 million CNY[157]. - The company has maintained a consistent approach to governance and management changes, ensuring continuity in leadership roles[165]. - The board of directors held 14 meetings during the year, with 12 conducted via communication methods[179]. - The audit committee confirmed that the financial statements comply with accounting standards and accurately reflect the company's financial status[180]. Risks and Challenges - The company has outlined potential risks in its operations, which investors are advised to review in detail[7]. - The company faces potential risks related to policy changes affecting long-term projects under BT, EPC, and PPP models[86]. - The company operates in a cyclical industry closely tied to macroeconomic conditions, which could adversely affect business scale and profitability if economic conditions decline[87]. - Cost fluctuation risks are present due to the long construction cycles of projects, where material and equipment prices can significantly impact profitability[89]. Shareholder Information - The total number of ordinary shareholders at the end of the reporting period was 83,607, down from 86,545 at the end of the previous month[146]. - The largest shareholder, China Shipbuilding Industry Group Co., Ltd., holds 275,204,726 shares, representing 37.38% of the total shares[148]. - The total number of shares held by the top five shareholders is 354,105,368, which is approximately 49.99% of the total shares[148]. - The report highlights that there are no related party transactions among the top shareholders, ensuring transparency in ownership[148]. Legal Matters - The company has filed a lawsuit against Beijing Zhongguancun Development Construction Co., Ltd. for unpaid project payments totaling RMB 90,502,168.36[110]. - The company has initiated legal proceedings to recover RMB 44,556,782.00 in material costs due to contract disputes with Shanghai Yingzhou[110]. - There are no major litigation or arbitration matters reported for the current year[109].

Financial Performance - Operating revenue decreased by 28.25% to CNY 2,729,727,810.83 for the first nine months compared to the same period last year[6] - Net profit attributable to shareholders decreased by 8.78% to CNY 16,664,430.09 for the first nine months compared to the same period last year[6] - Basic and diluted earnings per share decreased by 39.47% to CNY 0.023[7] - The company reported a net loss for the first nine months of 2017, with total revenue of CNY 2,729,727,810.83, down 28.25% from CNY 3,804,468,969.08 in the same period last year[23] - The net profit for Q3 2017 was 129,306.38, a significant decrease compared to 23,888,071.04 in the previous year, reflecting a decline of approximately 99.5%[25] - The total profit for Q3 2017 was 3,727,469.96, down from 31,191,538.81 in the previous year, representing a decline of approximately 88.0%[25] - The total comprehensive income attributable to the parent company for Q3 2017 was -249,189.32, compared to 66,912,139.39 in the previous year, indicating a substantial decline[26] Cash Flow - Net cash flow from operating activities was negative at CNY -1,285,102,919.10 for the first nine months[6] - Cash inflow from operating activities totaled ¥1,843,471,834.67, down 41.7% from ¥3,159,529,101.51 in the previous year[32] - Cash outflow from operating activities was ¥3,128,574,753.77, a decrease of 11.6% compared to ¥3,538,770,227.19 in the same period last year[32] - The net cash flow from operating activities for the first nine months of 2017 was -¥1,285,102,919.10, worsening from -¥379,241,125.68 in the same period last year[33] - Net cash flow from investment activities was negative CNY 384,558,233.25, compared to negative CNY 4,672,902.64 in the same period last year[36] - The company experienced a net decrease in cash and cash equivalents of CNY 455,230,346.90 for the period, compared to a decrease of CNY 132,736,778.47 in the same period last year[36] Assets and Liabilities - Total assets increased by 5.12% to CNY 11,749,896,123.84 compared to the end of the previous year[6] - Total liabilities decreased by 33.19% in cash used for debt repayment to ¥1,061,000,000.00 from ¥1,588,000,000.00[12] - Total liabilities reached CNY 7,706,159,185.73, compared to CNY 7,144,412,004.84 at the start of the year, indicating an increase of 7.83%[17] - Non-current assets totaled CNY 5,430,035,916.21, up from CNY 4,451,075,997.00, representing a growth of 21.93%[16] - Current liabilities amounted to CNY 5,066,963,318.02, an increase from CNY 4,634,605,279.16, reflecting a rise of 9.34%[16] Shareholder Information - Total number of shareholders reached 89,640 by the end of the reporting period[8] - The largest shareholder, China Shipbuilding Industry Group, holds 37.38% of the shares[9] Other Financial Metrics - The company reported a significant increase in financial expenses, totaling 156,256,840.12 for the first nine months, compared to 85,767,073.52 in the same period last year, an increase of about 82.2%[25] - The company reported a significant increase in tax payments, totaling CNY 53,260,904.69, compared to CNY 20,841,274.23 in the previous year, reflecting an increase of approximately 155.5%[35] - The company reported a non-operating income of CNY 15,936,184.95 for the first nine months[7] Future Outlook - The company anticipates potential significant changes in cumulative net profit compared to the previous year, indicating a warning of possible losses[12] - The company plans to focus on market expansion and new product development to improve future performance[23] - The company has not disclosed any new product developments or market expansion strategies in this report[6]

Financial Performance - The company's operating revenue for the first half of 2017 was approximately ¥1.86 billion, a decrease of 23.28% compared to ¥2.43 billion in the same period last year[21]. - The net profit attributable to shareholders was approximately ¥13.41 million, a significant improvement from a loss of ¥10.63 million in the previous year[21]. - The net cash flow from operating activities was negative at approximately -¥893 million, worsening from -¥39.49 million in the same period last year[21]. - The total assets at the end of the reporting period were approximately ¥11.27 billion, an increase of 0.84% from ¥11.18 billion at the end of the previous year[21]. - The net assets attributable to shareholders increased by 0.56% to approximately ¥3.64 billion from ¥3.62 billion at the end of the previous year[21]. - Basic earnings per share improved to ¥0.018 from a loss of ¥0.022 in the same period last year[22]. - The weighted average return on net assets increased to 0.37% from -0.52% in the previous year, reflecting a positive trend[22]. - Total revenue for the main business was approximately RMB 1.86 billion, with a year-on-year decrease of 23.29%[44]. - The company reported a significant increase in costs related to engineering materials, which rose to CNY 83.68 million, up from CNY 31.48 million, marking a 3.6% increase in cost proportion[48]. - The company reported a net profit of RMB 4,779 million for the first half of 2017, with total revenue reaching RMB 161,045 million[72]. Revenue Breakdown - The decrease in operating revenue was primarily due to a 26.03% decline in land consolidation business revenue and a 25.57% decline in engineering contracting business revenue[23]. - The revenue from engineering design, consulting, and supervision was approximately RMB 168.19 million, down 6.86% year-on-year, with a gross margin of 7.45%[44]. - The revenue from general contracting was approximately RMB 1.08 billion, down 25.57% year-on-year, with a gross margin of 8.53%[44]. - The land consolidation service revenue was approximately RMB 359.06 million, down 26.03% year-on-year, with a gross margin of 21.82%[44]. - The company’s revenue from its main business segments includes various engineering and consulting services, contributing to its overall financial performance[72]. Operational Changes - The company completed asset divestiture and personnel restructuring at the end of 2016, leading to a reduction in management expenses by approximately ¥10.25 million[23]. - The main business focus has shifted to engineering design, surveying, consulting, and supervision, with a strategic transformation towards becoming an international engineering company centered on design[29]. - The company is actively expanding its business into civil construction, urban planning, and overseas markets, moving away from traditional shipbuilding and marine engineering[31]. - The company has implemented a business model that extends from design consulting to comprehensive project management, enhancing its service offerings[31]. - The company is pursuing new engineering qualifications related to municipal, road, and bridge projects to align with market trends[34]. Market and Competitive Landscape - The domestic engineering contracting market remains competitive, with issues of excessive competition and low-price bidding affecting profitability[32]. - The company is adapting to national strategies such as "Belt and Road" and "New Urbanization," aiming to leverage its strengths in engineering design and project management[33]. - The company is actively pursuing various PPP projects, including urban complex construction and community relocation housing projects[43]. - The company has achieved significant professional qualifications, including comprehensive engineering design and consulting licenses across 21 industries, enhancing its competitive edge in the market[35]. Financial Position and Cash Flow - Cash and cash equivalents at the end of the period decreased by 49.42% to approximately ¥1.23 billion, down from ¥2.44 billion in the previous period[59]. - The net cash flow from financing activities improved to approximately ¥391 million, a significant increase from a net outflow of ¥64 million in the previous year[58]. - The company reported a significant increase in employee compensation payable by 660.73% to CNY 85,495,502.89[60]. - The company’s financial expenses increased by 66.36% to approximately ¥110.81 million, primarily due to increased interest expenses at a subsidiary[57]. - The company has a total of 2 properties without real estate certificates, which could impact operational usage if not resolved[84]. Related Party Transactions and Governance - The actual controller, shareholders, and related parties of the company committed to minimizing or avoiding related transactions with China Shipbuilding Technology[83]. - Related transactions must adhere to normal commercial behavior standards and follow fair market principles[83]. - The company has established a legal responsibility to compensate other shareholders for any losses resulting from non-compliance with share transfer commitments[84]. - The company has engaged multiple asset management firms to ensure adherence to the lock-up agreements and protect shareholder interests[84]. - The report indicates that there were no significant changes in previously disclosed temporary announcements, reflecting stability in ongoing projects[93]. Future Outlook and Strategic Initiatives - Future expansion plans include increasing service offerings in design and consulting, with projected revenues of ¥3,878,301.88 from these initiatives[91]. - The company aims to enhance market presence through strategic partnerships and acquisitions, targeting a revenue increase of 10% in the next fiscal year[91]. - The group plans to expand its market presence and invest in new technologies to enhance production efficiency[97]. - The company is focusing on strategic acquisitions to strengthen its competitive position in the maritime industry[97]. - The company plans to continue its poverty alleviation initiatives, focusing on education, healthcare, and infrastructure improvements in Yunnan[108].

Financial Performance - Operating revenue for the reporting period was ¥654,282,871.07, representing a decrease of 41.37% year-on-year[5] - Net profit attributable to shareholders of the listed company was ¥1,935,651.46, a significant recovery from a loss of ¥16,089,356.66 in the same period last year[5] - Operating revenue decreased by 41.37% to ¥654,282,871.07 from ¥1,116,034,091.09, attributed to reduced project income from a subsidiary[12] - Operating costs decreased by 43.86% to ¥579,668,297.40 from ¥1,032,602,900.31, resulting from lower project settlement costs[12] - Investment income decreased by 80.03% to ¥5,193,232.41 from ¥26,005,277.79 due to reduced income from entrusted loans by a subsidiary[12] - Operating profit turned negative at -¥5,073,368.63 compared to a profit of ¥6,006,304.74 in the previous period[23] - Net profit for the period was -¥3,594,137.63, down from a profit of ¥2,246,665.02 in the same period last year[24] - The company recorded a total comprehensive income of -¥3,105,407.01, compared to ¥2,238,165.02 in the previous year[24] Cash Flow - The net cash flow from operating activities was -¥653,521,966.32, compared to -¥125,045,231.28 in the previous year, indicating a worsening cash flow situation[5] - Cash flow from operating activities showed a net outflow of -¥653,521,966.32, compared to -¥125,045,231.28 in the previous year[30] - Total cash inflow from operating activities was 89,017,462.03 RMB, down from 129,732,427.58 RMB year-over-year, reflecting a decrease of approximately 31.4%[34] - Cash outflow from operating activities totaled 192,284,201.02 RMB, slightly increased from 184,422,261.76 RMB in the previous year[34] - The net cash flow from financing activities was 137,205,593.65 RMB, a recovery from -502,199,220.58 RMB in the same period last year[31] - The company experienced a net decrease in cash and cash equivalents of -928,709,061.61 RMB, compared to -699,066,707.43 RMB in the previous year[31] Assets and Liabilities - Total assets at the end of the reporting period reached ¥11,421,231,068.02, an increase of 2.18% compared to the end of the previous year[5] - Current assets totaled CNY 6,445,667,763.62, down from CNY 6,726,586,077.36, indicating a decrease of about 4.16%[17] - Total liabilities amounted to CNY 7,386,158,574.51, compared to CNY 7,144,412,004.84 at the start of the year, representing an increase of approximately 3.39%[18] - The company reported a total equity of CNY 4,035,072,493.51, slightly up from CNY 4,033,250,069.52, showing a marginal increase of 0.04%[18] - The company’s total liabilities to equity ratio stands at approximately 1.83, indicating a leveraged position[18] Shareholder Information - The number of shareholders at the end of the reporting period was 84,106[8] - The largest shareholder, China Shipbuilding Industry Group Company, held 37.38% of the shares, totaling 275,204,726 shares[8] Other Financial Metrics - The weighted average return on net assets decreased by 0.032 percentage points to 0.088%[5] - Basic and diluted earnings per share remained at ¥0.004[5] - The company incurred financial expenses of ¥26,328,355.52, down from ¥33,714,822.94, a decrease of approximately 21.9%[23] - The company raised 393,668,000.00 RMB through financing activities, compared to 338,668,000.00 RMB in the previous year, marking an increase of approximately 16.2%[31]

Financial Performance - The company's net profit attributable to shareholders for 2016 was -42,929,500.08 RMB, a significant decrease compared to a profit of 98,707,682.19 RMB in 2015[3] - Operating revenue for 2016 was 5,304,151,934.91 RMB, representing a year-on-year increase of 1.44% from 5,228,798,270.73 RMB in 2015[20] - The total assets of the company at the end of 2016 were 11,177,662,074.36 RMB, an increase of 34.60% from 8,304,533,907.76 RMB in 2015[20] - The company's cash flow from operating activities was -702,114,914.05 RMB, showing an improvement from -1,791,862,356.08 RMB in 2015[20] - The net assets attributable to shareholders increased by 77.98% to 3,624,500,142.69 RMB at the end of 2016, compared to 2,036,451,074.38 RMB at the end of 2015[20] - The basic earnings per share for 2016 was -0.080 yuan, a significant decrease compared to 0.163 yuan in 2015[21] - The net profit attributable to shareholders in 2016 decreased significantly, primarily due to a reduction in investment income from the sale of a subsidiary, which was 161.73 million yuan in 2015[22] - The total revenue for the fourth quarter of 2016 was approximately 1.50 billion yuan, with a net profit attributable to shareholders of -61.20 million yuan[24] - The company reported a non-operating loss of 134.65 million yuan in the fourth quarter, indicating significant financial challenges[24] Cash Flow and Dividends - The company does not plan to implement cash dividends or capital reserve transfers for the 2016 fiscal year[3] - The board of directors has approved the profit distribution plan, which is subject to shareholder meeting approval[3] - The cash dividend distribution for 2015 was RMB 7,176,443.79, which represented 31.96% of the net profit attributable to shareholders[85] - The company has not made any changes to its cash dividend policy during the reporting period[83] - The company implemented a cash dividend policy, distributing a total cash dividend of RMB 7,176,443.79 to shareholders based on a total share capital of 478,429,586 shares, with a payout of RMB 0.15 per 10 shares[83] Asset Restructuring and Business Focus - The company completed a major asset restructuring in 2016, leading to a shift in its main business focus and the establishment of new subsidiaries[31] - The company is transitioning towards a holding company model, focusing on asset management and investment following the successful completion of its asset restructuring[31] - The company completed the acquisition of 100% equity in China Shipbuilding Industry Corporation's subsidiary, China Shipbuilding Ninth Design and Research Institute, and purchased 20% equity in Changshu Jusha[68] - The company issued 135,471,113 shares at a price of RMB 11.99 per share to acquire 100% equity of China Shipbuilding Industry Corporation's subsidiary, with an asset value of RMB 1,624,298,649.46[34] - The company completed all work related to the major asset restructuring and supporting financing by the end of the reporting period[108] Operational Challenges and Risks - The company has acknowledged the presence of significant risks in its operations, as detailed in the report[6] - The company faced significant losses primarily due to a sharp decline in investment income and increased employee severance benefits following the disposal of certain assets[43] - The company is facing financial risks due to significant receivables and potential delays in client payments, impacting cash flow[81] - The company is promoting an engineering general contracting model to address issues in project management and improve overall project quality and responsibility[67] Revenue and Market Expansion - The company successfully signed overseas design consulting contracts worth RMB 42.46 million, representing a 132% increase compared to the previous year[42] - The company is focusing on the domestic and international market integration, driven by national strategies like "Belt and Road" and "New Urbanization"[76] - The company plans to gradually exit the traditional shipbuilding parts manufacturing industry due to declining orders and revenue[48] - The company aims to achieve an annual revenue of 5.5 billion RMB in 2017, focusing on steady development and quality improvement[79] - The company is targeting the luxury cruise ship market, where interior costs can account for over 60% of the total ship price[77] Research and Development - The total R&D expenditure for the year was 51.77 million yuan, which accounted for 0.98% of the operating income; the number of R&D personnel was 303, making up 12.31% of the total workforce[57] - Research and development expenses decreased by 36.26% to approximately ¥51.77 million from ¥81.23 million year-over-year[45] - The company has allocated $3 million for research and development in advanced shipbuilding technologies[103] Shareholder and Governance Structure - The company has a long-term commitment to prevent any competitive actions that could harm its interests due to its controlling position[86] - The company has established a policy to compensate shareholders with cash if the shares are insufficient to cover any profit shortfalls as per the asset evaluation report[87] - The company has commitments from major shareholders to not transfer their shares for specified periods, ensuring stability in shareholding[153] - The company has no significant changes in controlling shareholders during the reporting period[156] - The company continues to prioritize compliance and governance through its independent directors and supervisory board[163] Employee and Community Engagement - The total number of employees in the parent company and major subsidiaries is 1,775, with 1,700 in major subsidiaries[169] - The company has established a supplementary provident fund and annuity system for employees, ensuring their rights and benefits are protected[133] - The company actively participates in community welfare activities, including donations to local schools and support for underprivileged families, demonstrating its commitment to social responsibility[133] - The company donated RMB 600,000 to the China Shipbuilding Industry Group's poverty alleviation fund, with an additional contribution of RMB 139,300 from all employees, focusing on supporting the development of industries and infrastructure in Heqing County, Yunnan Province[128] Legal and Compliance Issues - The company is involved in a significant lawsuit regarding a contract dispute, claiming RMB 44,556,782.00 in damages[97] - The company has ongoing litigation with Guangzhou Construction Engineering Co., Ltd. for approximately RMB 16.8 million in project payments[99] - The company has incurred a liability of RMB 3,761.57 million related to a lawsuit involving multiple parties[99] Financial Audits and Reports - The company has issued a standard unqualified audit report for the fiscal year 2016[2] - The audit report concluded that the financial statements fairly represent the company's financial position and results for the year ended December 31, 2016[193] - The internal control audit by Xinyong Zhonghe Accounting Firm has a fee of RMB 250,000[96]