2022 年半年度报告 公司代码：600183 公司简称：生益科技 广东生益科技股份有限公司 2022 年半年度报告 1 / 190 2022 年半年度报告 重要提示 一、 本公司董事会、监事会及董事、监事、高级管理人员保证半年度报告内容的真实性、准确性、 完整性，不存在虚假记载、误导性陈述或重大遗漏，并承担个别和连带的法律责任。 二、 公司全体董事出席董事会会议。 三、 本半年度报告未经审计。 四、 公司负责人刘述峰、主管会计工作负责人何自强及会计机构负责人（会计主管人员）林道焕 声明：保证半年度报告中财务报告的真实、准确、完整。 五、 董事会决议通过的本报告期利润分配预案或公积金转增股本预案 不适用 六、 前瞻性陈述的风险声明 √适用 □不适用 报告涉及未来计划等前瞻性陈述，不构成公司对投资者的实质承诺，请投资者注意投资风险。 七、 是否存在被控股股东及其关联方非经营性占用资金情况 否 八、 是否存在违反规定决策程序对外提供担保的情况？ 否 九、 是否存在半数以上董事无法保证公司所披露半年度报告的真实性、准确性和完整性 否 十、 重大风险提示 本公司已在本报告中详细描述了存在风险事项，敬请查阅第三节"管理 ...

Financial Performance - The company achieved operating revenue of CNY 20.27 billion in 2021, representing a 38.04% increase compared to 2020[16]. - Net profit attributable to shareholders reached CNY 2.83 billion, up 68.38% from the previous year[16]. - The net profit after deducting non-recurring gains and losses was CNY 2.53 billion, reflecting a 57.45% increase year-on-year[16]. - The weighted average return on equity increased by 6.06 percentage points to 24.34% in 2021[17]. - Total assets at the end of 2021 amounted to CNY 24.43 billion, a 33.09% increase from the previous year[16]. - The company reported a net cash flow from operating activities of CNY 1.78 billion, a slight increase of 1.01% compared to 2020[16]. - The company achieved record sales and net profit, exceeding budget targets, with significant improvements in production capacity and inventory utilization[24]. - The company reported a significant increase in employee compensation liabilities, totaling approximately 732.83 million RMB, up 47.11% year-on-year[47]. - The company reported a revenue increase of 15% year-over-year, reaching $1.2 billion in Q3 2023[72]. - The company reported a significant increase in revenue, achieving a total of 1.5 billion in the last fiscal year, representing a growth of 20% year-over-year[73]. Dividend and Shareholder Information - The company plans to distribute a cash dividend of 6.00 CNY per 10 shares to all registered shareholders, pending approval at the 2021 annual general meeting[3]. - The company held four shareholder meetings in 2021, with all resolutions passed, ensuring compliance with legal and regulatory requirements[66]. - The total remuneration for all directors, supervisors, and senior management during the reporting period amounted to CNY 69.0543 million[82]. - The board approved a dividend payout of 0.5 per share, reflecting a commitment to returning value to shareholders[73]. Audit and Compliance - The company reported a standard unqualified audit opinion from Huaxing Accounting Firm, ensuring the accuracy and completeness of the financial report[2]. - The company has a commitment to transparency, with all annual report documents available at its office in Dongguan[13]. - The company’s total assets and liabilities were reported to be in compliance with the independence measures set by the controlling shareholders[66]. - The internal control audit report was disclosed on March 29, 2022, receiving a standard unqualified opinion[111]. Research and Development - The company is continuously investing in R&D and upgrading production capabilities to meet the increasing demand for high-layer, high-frequency, and packaging substrate materials[25]. - The total R&D expenditure for the period was approximately ¥964.47 million, accounting for 4.76% of the operating revenue[40]. - Significant R&D projects include the development of low-loss thermosetting resin for automotive 77GHz radar applications, aimed at improving PCB processing capabilities[43]. - The company is investing $50 million in R&D for new technologies aimed at enhancing product efficiency[72]. - The company is investing heavily in R&D, allocating 150 million for new technology development, which is a 10% increase from last year[73]. Market and Industry Trends - In 2021, the global electronic industry output value increased by 11% year-on-year, reaching $2,452 billion, with consumer electronics growing over 14%[25]. - The global PCB output value grew by 23.4% year-on-year in 2021, reaching $80.4 billion, driven by strong demand and rising commodity prices[25]. - The automotive electronics market saw a 12.1% year-on-year growth, with global EV sales reaching 6.5 million units, a 109% increase[25]. - The global copper-clad laminate (CCL) market is expected to grow significantly, driven by demand from 5G communication, data centers, and new energy markets[25]. Environmental Compliance - The company’s environmental monitoring indicates that major pollutants are within compliance limits, with specific metrics reported for wastewater and air emissions[113]. - The company’s wastewater discharge meets the Guangdong provincial standards, with specific pollutant concentrations reported[114]. - The company has implemented measures to ensure that all emissions are monitored and reported in compliance with environmental standards[120]. - The company has established a green factory management system in accordance with ISO14001 standards[166]. - The company has not faced any administrative penalties related to environmental issues during the reporting period[164]. Strategic Initiatives - The company is advancing its third five-year strategic development plan, with new facilities and projects underway to support growth[24]. - The company is exploring acquisition opportunities to enhance its product portfolio, with a budget of $100 million allocated for potential mergers[72]. - The company is considering strategic acquisitions to enhance its market position, with a budget of 500 million allocated for potential mergers and acquisitions[73]. - The company has established a performance incentive fund to link executive compensation with company performance, ensuring alignment with business development needs[108]. Employee Development - The company has established a multi-channel compensation structure to ensure fair and competitive salary adjustments based on profitability and market conditions[98]. - The company conducted 436 in-person training sessions and 333 online training sessions in 2021, focusing on management, quality control, and market development[100]. - The company employed 1,579 R&D personnel, representing 13.79% of the total workforce[42]. - In 2021, the average training hours per employee increased by 12% to 11.89 hours, with a total training volume of 34,524.55 hours[100]. Risk Management - The company has outlined potential risks in its future development in the management discussion and analysis section[5]. - The company emphasizes the importance of risk awareness in its forward-looking statements, advising investors to consider potential investment risks[4]. - The company faced challenges from rising raw material prices and supply chain disruptions due to the pandemic, but managed to mitigate these impacts effectively[23].

Financial Highlights Summary [Key Accounting Data and Financial Indicators](index=1&type=section&id=Item%20%28I%29.%20Key%20Accounting%20Data%20and%20Financial%20Indicators) The company demonstrated robust financial performance in Q3 and year-to-date 2021, with significant increases in operating revenue and net profit attributable to shareholders Core Financial Indicators for Q3 and First Three Quarters of 2021 | Indicator | Current Period (Q3) | YoY Change (%) | Year-to-Date (YTD) | YoY Change (%) | | :--- | :--- | :--- | :--- | :--- | | **Operating Revenue (RMB)** | 5,546,926,755.60 | 45.54 | 15,378,560,307.54 | 43.86 | | **Net Profit Attributable to Shareholders (RMB)** | 924,754,814.32 | 93.88 | 2,339,401,728.08 | 79.56 | | **Net Profit Attributable to Shareholders (Excluding Non-recurring Items) (RMB)** | 732,351,013.20 | 80.51 | 2,134,901,221.86 | 73.51 | | **Basic Earnings Per Share (RMB/share)** | 0.40 | 90.48 | 1.02 | 78.95 | | **Weighted Average Return on Net Assets (%)** | 7.62 | Increase 2.45 percentage points | 20.56 | Increase 6.18 percentage points | Key Balance Sheet Data as of September 30, 2021 | Indicator | End of Current Period | End of Previous Year | Change from Previous Year-End (%) | | :--- | :--- | :--- | :--- | | **Total Assets (RMB)** | 24,206,827,851.40 | 18,357,445,724.02 | 31.86 | | **Total Equity Attributable to Shareholders (RMB)** | 12,566,196,285.79 | 9,889,074,607.01 | 27.07 | [Non-recurring Gains and Losses](index=2&type=section&id=Item%20%28II%29.%20Non-recurring%20Gains%20and%20Losses%20and%20Amounts) In the first three quarters of 2021, the company's total non-recurring gains and losses amounted to approximately **205 million RMB**, primarily from **217 million RMB** in non-current asset disposal gains, significantly impacting current net profit Details of Non-recurring Gains and Losses for the First Three Quarters of 2021 | Item | Amount Year-to-Date (RMB) | | :--- | :--- | | Gains/Losses on Disposal of Non-current Assets | 216,513,950.22 | | Government Grants Recognized in Current Profit/Loss | 58,489,064.41 | | Fair Value Changes in Financial Assets, etc. | -25,978,015.77 | | **Total** | **204,500,506.22** | [Analysis of Key Financial Indicator Changes](index=3&type=section&id=Item%20%28III%29.%20Changes%20and%20Reasons%20for%20Key%20Accounting%20Data%20and%20Financial%20Indicators) The company's significant performance growth was driven by strong demand for copper-clad laminates, increased sales volume and prices, new capacity from Jiangxi and Shaanxi projects, and a **180 million RMB** asset disposal gain from government land acquisition - Revenue growth primarily resulted from increased sales volume and higher prices of copper-clad laminates[7](index=7&type=chunk) - Significant net profit growth was attributed to robust demand for copper-clad laminates, price adjustments in response to rising raw material costs, substantial increases in production and sales volume due to new project launches in Jiangxi and Shaanxi, and an approximately **180 million RMB** asset disposal gain from government land acquisition[7](index=7&type=chunk) - Total assets increased by **31.86%**, mainly due to funds raised from subsidiary IPOs, increased inventory and accounts receivable driven by business expansion, and a **1.084 billion RMB** land payment by a sub-subsidiary[7](index=7&type=chunk) Shareholder Information [Shareholding Structure](index=4&type=section&id=Item%20%28I%29.%20Total%20Common%20Shareholder%20Count%20and%20Top%20Ten%20Shareholders'%20Holdings) As of the reporting period end, the company had **155,465** common shareholders, with the top three, Guangdong Guangxin Holdings Group, Wai Wah Electronics, and Dongguan Guohong Investment, holding over **51%** combined, indicating a relatively concentrated equity structure - As of the reporting period end, the company had **155,465** common shareholders[8](index=8&type=chunk) Top Ten Shareholders' Holdings | Shareholder Name | Nature | Number of Shares Held (shares) | Shareholding Percentage (%) | | :--- | :--- | :--- | :--- | | Guangdong Guangxin Holdings Group Co., Ltd. | State-owned Legal Entity | 549,204,645 | 23.78 | | Wai Wah Electronics Co., Ltd. | Overseas Legal Entity | 326,283,920 | 14.13 | | Dongguan Guohong Investment Co., Ltd. | State-owned Legal Entity | 320,997,139 | 13.90 | | Hong Kong Securities Clearing Company Limited | Unknown | 112,805,187 | 4.88 | - Dongguan Guohong Investment Co., Ltd. and Dongguan Kexin Capital Industry Development Investment Co., Ltd. are parties acting in concert, while no such relationship exists among the top three shareholders[9](index=9&type=chunk) Quarterly Financial Statements [Consolidated Balance Sheet Analysis](index=5&type=section&id=Consolidated%20Balance%20Sheet) As of September 30, 2021, total assets reached **24.21 billion RMB**, a **31.86%** increase, driven by business expansion and subsidiary IPOs, with total liabilities at **9.89 billion RMB** - Total assets increased from **18.36 billion RMB** at the beginning of the year to **24.21 billion RMB**, a **31.86%** increase[5](index=5&type=chunk)[11](index=11&type=chunk) - Asset growth was primarily driven by increases in monetary funds (from **850 million RMB** to **2.512 billion RMB**), accounts receivable (from **4.888 billion RMB** to **6.713 billion RMB**), and inventory (from **2.519 billion RMB** to **3.440 billion RMB**)[10](index=10&type=chunk) - On the liability side, long-term borrowings significantly increased from **605 million RMB** to **1.473 billion RMB**, indicating increased long-term financing to support expansion[11](index=11&type=chunk) [Consolidated Income Statement Analysis](index=8&type=section&id=Consolidated%20Income%20Statement) In the first three quarters of 2021, the company achieved total operating revenue of **15.38 billion RMB**, up **43.86%**, and net profit attributable to shareholders of **2.34 billion RMB**, a **79.56%** increase, driven by strong revenue growth, improved gross margins, and approximately **217 million RMB** in asset disposal gains Comparison of Core Income Statement Data for the First Three Quarters of 2021 | Item | First Three Quarters of 2021 (RMB) | First Three Quarters of 2020 (RMB) | YoY Change | | :--- | :--- | :--- | :--- | | **Total Operating Revenue** | 15,378,560,307.54 | 10,690,001,192.32 | +43.86% | | **Total Operating Costs** | 12,785,515,584.67 | 9,061,195,743.48 | +41.10% | | **Operating Profit** | 2,794,805,029.17 | 1,607,603,744.61 | +73.85% | | **Net Profit Attributable to Shareholders** | 2,339,401,728.08 | 1,302,821,119.36 | +79.56% | - Asset disposal gains amounted to **217 million RMB**, compared to a **4.18 million RMB** loss in the prior year, representing a significant non-operating factor contributing to profit growth[15](index=15&type=chunk) [Consolidated Cash Flow Statement Analysis](index=11&type=section&id=Consolidated%20Cash%20Flow%20Statement) In the first three quarters of 2021, net cash from operating activities was **1.13 billion RMB**, stable year-over-year, while net cash used in investing activities was **1.25 billion RMB**, and net cash from financing activities was **1.75 billion RMB**, primarily from subsidiary IPOs and new borrowings Overview of Cash Flow Statement for the First Three Quarters of 2021 | Item | First Three Quarters of 2021 (RMB) | First Three Quarters of 2020 (RMB) | | :--- | :--- | :--- | | **Net Cash Flow from Operating Activities** | 1,128,373,137.40 | 1,138,578,441.88 | | **Net Cash Flow from Investing Activities** | -1,252,977,695.90 | -1,485,105,104.67 | | **Net Cash Flow from Financing Activities** | 1,751,895,229.74 | 12,848,851.58 | - Cash inflow from financing activities significantly increased to **2.233 billion RMB**, primarily due to **1.993 billion RMB** from investments by minority shareholders in subsidiaries, substantially higher than **178 million RMB** in the prior year[19](index=19&type=chunk) - Period-end cash and cash equivalents increased significantly to **2.442 billion RMB** from **818 million RMB** at the beginning of the period, indicating a healthy cash position[19](index=19&type=chunk) [Changes in Accounting Policies](index=17&type=section&id=Item%20%28III%29.%20Adjustments%20to%20Financial%20Statements%20at%20the%20Beginning%20of%20the%20First%20Year%20of%20Adopting%20New%20Lease%20Standards%20from%202021) Effective January 1, 2021, the company adopted new lease standards, retrospectively adjusting financial statements to recognize approximately **80.83 million RMB** in right-of-use assets and **83.96 million RMB** in lease liabilities on the consolidated balance sheet, without affecting comparable period information - The company adopted new lease standards effective January 1, 2021, and adjusted its opening financial statements accordingly[34](index=34&type=chunk) - Upon initial adoption of the new standards, the consolidated statements saw an increase of **80.83 million RMB** in right-of-use assets, an increase of **83.96 million RMB** in lease liabilities (including current portion), and a total decrease of **2.58 million RMB** in owners' equity[27](index=27&type=chunk)[28](index=28&type=chunk)[30](index=30&type=chunk)

Financial Performance - The company's operating revenue for the first half of 2021 reached ¥9.83 billion, a 42.93% increase compared to ¥6.88 billion in the same period last year[19]. - Net profit attributable to shareholders was ¥1.41 billion, reflecting a 71.30% increase from ¥825.85 million in the previous year[19]. - The net profit after deducting non-recurring gains and losses was ¥1.40 billion, up 70.06% from ¥824.73 million year-on-year[19]. - Basic earnings per share increased to ¥0.62, a rise of 72.22% compared to ¥0.36 in the same period last year[20]. - The weighted average return on net assets rose to 12.94%, an increase of 3.73 percentage points from 9.21% in the previous year[20]. - The total assets of the company at the end of the reporting period were ¥22.57 billion, a 22.92% increase from ¥18.36 billion at the end of the previous year[19]. - The net cash flow from operating activities was ¥1.36 billion, representing a 50.70% increase from ¥905.69 million in the same period last year[19]. - The company achieved a revenue of 9.831634 billion yuan, representing a year-on-year increase of 42.93%[31]. - The gross profit margin for the copper-clad laminate segment improved to 29.30%, up from 27.29% in the previous year, indicating better cost management and pricing strategies[38]. - The company reported a total profit of CNY 1,674,815,076.62 for the first half of 2021, compared to CNY 1,030,018,320.58 in the same period of 2020, marking a growth of 62.5%[166]. Production and Sales - The company produced 57.2184 million square meters of various copper-clad laminates in the first half of 2021, an increase of 18.76% year-on-year[31]. - The production of semi-cured sheets reached 88.586 million meters, up 41.56% compared to the same period last year[31]. - The sales volume of various copper-clad laminates was 59.0657 million square meters, an increase of 34.12% year-on-year[31]. - The company capitalized on the booming copper-clad laminate market, resulting in significant growth in both sales quantity and price compared to the previous year[20]. - The company experienced a 61.56% increase in sales volume and prices of copper-clad laminates, which significantly contributed to revenue growth[36]. Research and Development - Research and development expenses totaled ¥432,964,567.93, accounting for 4.40% of operating revenue, reflecting the company's commitment to innovation[38]. - The company has developed a full range of high-frequency products and achieved mass application in various fields, including 5G antennas and automotive electronics[28]. - The company has established a national engineering technology research center for electronic circuit substrates, enhancing its technological capabilities[30]. - The company has initiated research and development for new products, aiming to enhance its competitive edge in the market, with a focus on innovation and sustainability[182]. Market Strategy and Expansion - The company successfully adjusted its market strategy and product structure in response to rising raw material prices, leading to increased sales volume and prices of its products[20]. - The company plans to continue expanding its market presence and enhancing product offerings in response to the growing demand in the electronics sector[36]. - The company is focused on expanding its market presence and enhancing product quality to mitigate competitive risks from larger firms in Japan, the US, and Taiwan[54]. - The company has outlined a strategic plan for potential mergers and acquisitions to bolster its market position, although no specific targets were mentioned[182]. Environmental Compliance and Sustainability - The company’s main pollutant emissions from its Wanjiang factory are within the monitored standards, including sulfur dioxide and nitrogen oxides[64]. - The company’s environmental compliance includes proper handling of wastewater and air emissions[64]. - The company is committed to maintaining environmental standards and improving operational efficiency through ongoing monitoring and compliance efforts[66]. - The company has implemented a comprehensive environmental management system across its factories, including the establishment of a dedicated environmental technology research center[98]. - The company has received recognition for excellent environmental management practices from local environmental authorities[121]. Financial Position and Liabilities - The company's total liabilities were RMB 9.31 billion, an increase from RMB 7.71 billion at the end of 2020, representing a rise of 19.66%[160]. - The company's equity attributable to shareholders rose to RMB 11.54 billion, up from RMB 9.89 billion at the end of 2020, marking an increase of 16.67%[160]. - The company maintains a stable debt structure and strong repayment capability, supported by sufficient cash flow from operations[155]. - The total number of shares increased from 2,290,820,090 to 2,302,474,347 due to the exercise of stock options, with 11,654,257 shares added during the reporting period[139]. Shareholder Information - The company held two shareholder meetings in 2021, with all resolutions passed successfully[58]. - The company did not distribute profits or increase capital reserves in the first half of 2021, with no dividends or stock bonuses declared[60]. - The company has granted stock options to executives, with a total of 11,900,796 stock options held at the beginning of the period, and 3,620,796 options available for exercise during the reporting period[147]. Risks and Challenges - The company faces risks related to raw material price fluctuations, particularly for copper, resin, and glass cloth, which can significantly impact production costs[54]. - Market competition remains a concern, with increasing demands for high integration, multifunctionality, and environmental standards in PCB technology, posing challenges to the company's competitive edge[54].

Group 1: Industry Outlook and Market Trends - The overall market outlook for 2021 is positive, driven by the effectiveness of vaccines in the US and Europe, with expectations of economic recovery in the second half of the year [2] - The demand for 5G communications and laptops is strong in the first half of the year, while the second half will see increased demand in automotive, consumer electronics, and home appliances [2] - Raw material prices have surged due to supply-demand imbalances, particularly in copper foil and glass cloth, with no signs of easing in the near term [2][3] Group 2: Company Strategy and Development Plans - The company's strategic shift from "expanding and strengthening" to "strengthening and expanding" aims to enhance gross margins and technology while targeting a 30% increase in production capacity over the next five years [3][4] - The company is focusing on high-end materials and product upgrades to mitigate industry cycle risks, with plans to develop packaging substrates in stages [3][4] - A diversified supply chain is being established to ensure reliable sourcing of high-end materials, which are predominantly controlled by suppliers in the US, Japan, and Taiwan [4] Group 3: Cost Management and Pricing Strategy - The company has identified early signs of rising material costs and has attempted to lock in prices, but limited supplier inventory has constrained procurement [4][5] - The processing fee for copper foil has increased from $2.5 per kg to $5.8-6 per kg, significantly impacting overall costs [4] - The company is balancing short-term and long-term cost pressures by communicating with customers to manage expectations regarding price increases [4][5] Group 4: Product Development and Market Positioning - The company is committed to high-end product development, particularly in flexible printed circuit boards (FPCs), despite current profitability challenges due to oversupply in the market [5][6] - Progress has been made in obtaining certifications for high-speed materials used in network communications and servers, with significant advancements in the server product line [5][6] - The company is actively pursuing opportunities in automotive electronics, with a focus on high-reliability products for electric vehicles and advanced driver-assistance systems [6][7] Group 5: Research and Development Initiatives - R&D reforms initiated in 2018 have focused on project funding, evaluation, and internal sharing of results, leading to improved outcomes [7][8] - The company is expanding its capabilities in HDI (High-Density Interconnect) products and is actively pursuing certifications for new platforms [8][9] - Future growth is anticipated as the company transitions from a focus on volume to a focus on high-margin, high-tech products [9][10]

[Definitions](index=4&type=section&id=Section%201.%20Definitions) This section provides definitions of key terms used throughout the report [Company Profile and Key Financial Indicators](index=4&type=section&id=Section%202.%20Company%20Profile%20and%20Key%20Financial%20Indicators) This section provides an overview of the company's basic information and a summary of its key financial performance over the past three years [Company Information and Contact Details](index=4&type=section&id=I.%20Company%20Information) This chapter provides the company's basic business registration information, including its Chinese and English names, legal representative, registered and office addresses, website, and contact details for the Board Secretary - The company's full name is Guangdong Shengyi Technology Co., Ltd. (SHENGYI TECHNOLOGY CO.,LTD.), stock code is **600183**, listed on the Shanghai Stock Exchange[9](index=9&type=chunk)[14](index=14&type=chunk) [Key Accounting Data and Financial Indicators for the Past Three Years](index=5&type=section&id=VII.%20Key%20Accounting%20Data%20and%20Financial%20Indicators%20for%20the%20Past%20Three%20Years) The company achieved steady growth in 2020, with operating revenue increasing by **10.92%** and net profit attributable to shareholders by **16.00%**, while total assets expanded to **18.36 billion yuan** Key Accounting Data for the Past Three Years (Unit: Yuan) | Indicator | 2020 | 2019 | YoY Change (%) | 2018 | | :--- | :--- | :--- | :--- | :--- | | **Operating Revenue** | 14,687,341,460.15 | 13,241,085,241.08 | 10.92 | 11,981,081,734.45 | | **Net Profit Attributable to Parent Company Shareholders** | 1,680,510,160.48 | 1,448,767,198.85 | 16.00 | 1,000,468,630.58 | | **Net Profit Attributable to Parent Company Shareholders (Excluding Non-recurring Items)** | 1,605,771,350.27 | 1,393,661,498.51 | 15.22 | 924,798,068.77 | | **Net Cash Flow from Operating Activities** | 1,757,967,491.81 | 1,692,374,380.93 | 3.88 | 1,337,205,019.46 | | **Net Assets Attributable to Parent Company Shareholders (Year-end)** | 9,889,074,607.01 | 8,833,910,412.23 | 11.94 | 6,402,503,408.72 | | **Total Assets (Year-end)** | 18,357,445,724.02 | 15,534,907,870.03 | 18.17 | 12,885,924,860.59 | Key Financial Indicators for the Past Three Years | Indicator | 2020 | 2019 | YoY Change (%) | 2018 | | :--- | :--- | :--- | :--- | :--- | | **Basic Earnings Per Share (Yuan/Share)** | 0.74 | 0.66 | 12.12 | 0.47 | | **Diluted Earnings Per Share (Yuan/Share)** | 0.72 | 0.66 | 9.09 | 0.47 | | **Weighted Average Return on Net Assets (%)** | 18.28 | 19.67 | Decrease by 1.39 percentage points | 16.39 | [Key Quarterly Financial Data for 2020](index=7&type=section&id=IX.%20Key%20Quarterly%20Financial%20Data%20for%202020) The company's operations showed a quarter-over-quarter improvement in 2020, with operating revenue increasing from **3.07 billion yuan** in Q1 to **3.99 billion yuan** in Q4 2020 Quarterly Financial Data (Unit: Yuan) | Indicator | Q1 | Q2 | Q3 | Q4 | | :--- | :--- | :--- | :--- | :--- | | **Operating Revenue** | 3,071,837,888.45 | 3,806,893,561.83 | 3,811,269,742.04 | 3,997,340,267.83 | | **Net Profit Attributable to Parent Company Shareholders** | 339,269,165.27 | 486,582,007.33 | 476,969,946.76 | 377,689,041.12 | | **Net Profit Attributable to Parent Company Shareholders (Excluding Non-recurring Items)** | 342,748,701.29 | 481,980,089.53 | 405,704,037.59 | 375,338,521.86 | | **Net Cash Flow from Operating Activities** | 572,569,553.19 | 333,118,633.84 | 232,890,254.85 | 619,389,049.93 | [Non-recurring Gains and Losses](index=7&type=section&id=X.%20Non-recurring%20Gains%20and%20Losses%20and%20Amounts) In 2020, the company's non-recurring gains and losses totaled **74.74 million yuan**, primarily from government subsidies and gains from subsidiary acquisitions 2020 Key Non-recurring Gains and Losses (Unit: Yuan) | Item | 2020 Amount | | :--- | :--- | | Government Subsidies Included in Current Profit and Loss | 61,119,243.01 | | Gains from Business Combinations | 40,646,900.71 | | Gains and Losses from Disposal of Non-current Assets | -16,839,382.47 | | Net Other Non-operating Income and Expenses | -11,133,907.54 | | **Total** | **74,738,810.21** | [Business Overview](index=8&type=section&id=Section%203.%20Business%20Overview) This section outlines the company's core business, operating model, and competitive advantages in the industry [Main Business and Operating Model](index=8&type=section&id=I.%20Description%20of%20Main%20Business%2C%20Operating%20Model%2C%20and%20Industry%20Situation%20During%20the%20Reporting%20Period) The company's main business involves designing, producing, and selling copper clad laminates (CCL), prepregs, and printed circuit boards (PCB), widely used in various electronic products - The company's core products are **copper clad laminates** and **printed circuit boards**, applied in high-growth areas such as **5G antennas**, **communication base stations**, **servers**, **automotive electronics**, and **mobile terminals**, gaining high recognition from leading manufacturers in various industries[23](index=23&type=chunk) - The company emphasizes establishing **'win-win' strategic partnerships** with upstream and downstream partners, fostering collaborative growth and value transfer across the supply chain through technical exchange and joint development[23](index=23&type=chunk)[24](index=24&type=chunk) [Core Competitiveness Analysis](index=9&type=section&id=III.%20Analysis%20of%20Core%20Competitiveness%20During%20the%20Reporting%20Period) The company's core competitiveness stems from its strong brand, experienced management, and continuous technological innovation, particularly in high-value-added products - **Brand Advantage**: The company has obtained multiple international safety certifications, including US UL, UK BSI, and German VDE, and holds industry influence as a convener of the IEC working group and a core member of several domestic industry associations[26](index=26&type=chunk) - **Technological Advantage**: The company's 'National Engineering Research Center for Electronic Circuit Substrates' has passed acceptance, focusing on engineering research and development of key common technologies in the industry, continuously launching high-value-added new products[26](index=26&type=chunk) [Management Discussion and Analysis](index=9&type=section&id=Section%204.%20Management%20Discussion%20and%20Analysis) This section provides a detailed review of the company's operational performance, financial position, and future outlook [Operational Review](index=9&type=section&id=I.%20Management%20Discussion%20and%20Analysis) In 2020, the company successfully navigated the pandemic and trade disputes, capitalizing on **5G**, consumer electronics, and automotive electronics demand, while achieving technological breakthroughs and strengthening group synergy - The company successfully navigated the impact of the pandemic and trade disputes, seizing market opportunities in **5G base stations**, **consumer electronics**, and **automotive electronics**, achieving both order and price increases[28](index=28&type=chunk) - Significant technological breakthroughs were achieved: **high-speed materials** gained recognition from renowned end customers, and **automotive millimeter-wave 77GHz radar-related technologies** made breakthroughs, expanding future market reserve space[28](index=28&type=chunk) - **2020 marked the 'first year' of group-wide operations**, with the effective functioning of seven major business management centers, including marketing, operations, quality control, and R&D, preparing the group for leapfrog development[29](index=29&type=chunk) [Key Operating Data](index=11&type=section&id=II.%20Key%20Operating%20Performance%20During%20the%20Reporting%20Period) In 2020, the company's main products saw increased production and sales, with operating revenue growing by **10.92%** to **14.69 billion yuan**, driven by strong performance from subsidiaries 2020 Key Product Production and Sales | Main Product | Unit | Production Volume | Sales Volume | Production Volume YoY Change (%) | Sales Volume YoY Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Copper Clad Laminate | 10,000 sq. meters | 10,382.84 | 10,253.58 | 12.99 | 10.01 | | Prepreg | 10,000 meters | 14,010.31 | 13,829.70 | 13.12 | 11.72 | | Printed Circuit Board | 10,000 sq. meters | 82.20 | 81.12 | 1.88 | 4.01 | - Selling expenses decreased by **37.68%** year-on-year, primarily due to the adoption of new revenue recognition standards, reclassifying transportation costs as contract fulfillment costs to operating costs[31](index=31&type=chunk) - Investment income increased by **199.68%** year-on-year, mainly due to the acquisition of Guangdong Lusheng Environmental Protection Co., Ltd. and its inclusion in the consolidated scope, with the difference between the fair value and book value of the originally held equity recognized as investment income[31](index=31&type=chunk) [Revenue and Cost Analysis](index=12&type=section&id=2.%20Revenue%20and%20Cost%20Analysis) In 2020, main business revenue grew by **10.45%** to **14.41 billion yuan**, with CCL and prepreg showing improved gross margin, while PCB gross margin declined despite higher revenue growth Main Business by Industry Segment | Industry Segment | Operating Revenue (Yuan) | Gross Margin (%) | Operating Revenue YoY Change (%) | Gross Margin YoY Change | | :--- | :--- | :--- | :--- | :--- | | Copper Clad Laminate and Prepreg | 10,848,914,471.21 | 25.54 | 8.46 | Increase by 0.78 percentage points | | Printed Circuit Board | 3,558,356,290.28 | 26.05 | 16.99 | Decrease by 2.87 percentage points | Main Business by Region | Region | Operating Revenue (Yuan) | Gross Margin (%) | Operating Revenue YoY Change (%) | Gross Margin YoY Change | | :--- | :--- | :--- | :--- | :--- | | Domestic Sales | 12,591,214,302.87 | 26.34 | 16.98 | Increase by 0.35 percentage points | | Export Sales | 1,816,056,458.62 | 21.00 | -20.37 | Decrease by 3.51 percentage points | [R&D Investment](index=13&type=section&id=4.%20R%26D%20Investment) In 2020, R&D investment totaled **710.77 million yuan**, accounting for **4.84%** of revenue, with a focus on next-generation high-speed communication materials and automotive radar technologies 2020 R&D Investment Overview | Indicator | Value | | :--- | :--- | | Total R&D Investment (Yuan) | 710,765,835.44 | | R&D Investment as % of Operating Revenue (%) | 4.84 | | Number of R&D Personnel (Persons) | 1,394 | | R&D Personnel as % of Total Employees (%) | 12.89 | - R&D direction closely follows market trends, primarily investing in key technological areas such as **next-generation high-speed communication**, **smart mobile terminals**, **high-density packaging**, **data centers**, and **intelligent automotive radar**, to translate technological accumulation into market competitive advantages[42](index=42&type=chunk) [Analysis of Assets and Liabilities](index=15&type=section&id=%28III%29%20Analysis%20of%20Assets%20and%20Liabilities) As of year-end 2020, total assets reached **18.36 billion yuan**, with significant increases in accounts receivable financing (**+63.76%**) and short-term borrowings (**+41.97%**), while accounts payable surged by **2246.47%** due to subsidiary operations Key Balance Sheet Changes (Unit: Yuan) | Item Name | Current Period End Balance | Prior Period End Balance | Change (%) | Main Reason | | :--- | :--- | :--- | :--- | :--- | | Accounts Receivable Financing | 1,117,900,970.17 | 682,643,071.88 | 63.76 | Bank acceptance bills received exceeded endorsements and matured amounts | | Goodwill | 97,430,929.04 | 0.00 | N/A | Acquisition of Guangdong Lusheng Environmental Protection and inclusion in consolidated scope | | Short-term Borrowings | 2,157,170,932.62 | 1,519,481,480.54 | 41.97 | Increased due to daily operating needs | | Notes Payable | 136,780,774.18 | 5,829,207.16 | 2,246.47 | Increase in notes issued by subsidiary Shengyi Electronics for goods payment | | Other Payables | 224,049,176.94 | 92,034,483.39 | 143.44 | Consolidation of Guangdong Lusheng acquisition and payment of remaining equity transaction balance | | Minority Interests | 754,245,938.12 | 519,706,646.60 | 45.13 | Consolidation of Guangdong Lusheng acquisition, recognizing minority interests | [Industry Operating Information Analysis](index=18&type=section&id=%28IV%29%20Industry%20Operating%20Information%20Analysis) The company's core business, copper clad laminate manufacturing, accounts for **73.87%** of total revenue, with the company ranking **second globally** in rigid CCL sales in 2019 - The company holds a **strong market position** in its core business, ranking **second globally** in rigid copper clad laminate sales in 2019[48](index=48&type=chunk) [Investment Status Analysis](index=19&type=section&id=%28V%29%20Investment%20Status%20Analysis) During the reporting period, the company's most significant equity investment was the acquisition of a **27%** stake in Guangdong Lusheng Environmental Protection, making it the largest shareholder and consolidating it - The company, through its subsidiary Shengyi Capital, acquired a **27% equity stake** in Guangdong Lusheng Environmental Protection for **143 million yuan** in cash, achieving control and consolidation, reflecting the company's strategy to seek stable income outside its main business[50](index=50&type=chunk) [Analysis of Major Holding and Participating Companies](index=20&type=section&id=%28VII%29%20Analysis%20of%20Major%20Holding%20and%20Participating%20Companies) The company's key subsidiaries, including Suzhou Shengyi, Shaanxi Shengyi, and Shengyi Electronics, are major contributors to production and revenue, while new bases are in investment phase 2020 Key Subsidiary Financial Data (Unit: Yuan) | Company Name | Total Assets | Net Assets | Operating Revenue | Net Profit | | :--- | :--- | :--- | :--- | :--- | | Suzhou Shengyi | 2,004,445,077.29 | 1,366,498,926.67 | 2,444,611,288.84 | 191,907,635.92 | | Shaanxi Shengyi | 2,455,090,193.14 | 1,660,733,880.20 | 1,996,602,891.39 | 130,906,809.19 | | Shengyi Electronics | 4,546,351,529.85 | 1,916,737,000.86 | 3,633,501,932.99 | 442,319,120.75 | | Jiangsu Shengyi | 692,055,914.99 | 428,031,442.08 | 154,671,546.43 | -34,816,605.36 | | Jiangxi Shengyi | 1,352,711,254.07 | 981,413,651.63 | 802,692,199.88 | -13,913,374.26 | [Company's Future Development, Strategy, and Risks](index=23&type=section&id=III.%20Discussion%20and%20Analysis%20of%20the%20Company%27s%20Future%20Development) The company anticipates future PCB market growth from **5G** and automotive electronics, maintaining a strategy focused on core CCL business while diversifying income through investments, but faces raw material price and competition risks - Future Growth Drivers: **5G** and its resulting **IoT**, **AI applications**, and the increased technical requirements and PCB usage driven by **new energy vehicles**[56](index=56&type=chunk) - Company Development Strategy: Focus on the core **copper clad laminate business** to become the global manufacturer with the most comprehensive competitive advantages; avoid vertical integration of the industrial chain; diversify income through investments[57](index=57&type=chunk) - Key Risk Warnings: **Price fluctuations and supply-demand imbalances of raw materials** (copper, resin, glass fiber cloth); **intensified industry competition**, especially in technology, scale, and cost[60](index=60&type=chunk) [Significant Matters](index=24&type=section&id=Section%205.%20Significant%20Matters) This section details the company's profit distribution plan, equity incentive schemes, related party transactions, and social responsibility initiatives [Profit Distribution Plan](index=24&type=section&id=I.%20Ordinary%20Share%20Profit%20Distribution%20or%20Capital%20Reserve%20to%20Share%20Capital%20Plan) The company has a consistent cash dividend policy, with the 2020 plan proposing a cash dividend of **4.00 yuan per 10 shares**, totaling approximately **916.33 million yuan** Dividend Distribution Plans for the Past Three Years | Dividend Year | Dividend Per 10 Shares (Yuan) (Tax Incl.) | Cash Dividend Amount (Yuan) (Tax Incl.) | Ratio to Net Profit Attributable to Parent Company Shareholders (%) | | :--- | :--- | :--- | :--- | | 2020 | 4.0 | 916,328,036.00 | 54.53 | | 2019 | 4.0 | 910,476,536.00 | 62.84 | | 2018 | 3.5 | 742,293,190.80 | 74.19 | [Equity Incentive Plan](index=29&type=section&id=XIII.%20Company%20Equity%20Incentive%20Plan) During the reporting period, the company continued to implement its 2019 stock option incentive plan, completing the grant registration of reserved options and the first exercise period of initially granted options - In 2020, the company implemented the **first exercise period** of the **2019 stock option incentive plan's initial grant** and completed the grant registration of reserved stock options[75](index=75&type=chunk) [Significant Related Party Transactions](index=30&type=section&id=XIV.%20Significant%20Related%20Party%20Transactions) The company's significant related party transactions in the reporting period primarily involved raw material procurement from Jiangsu Lianrui New Material and the acquisition of Guangdong Lusheng Environmental Protection shares - Routine Related Party Transactions: Primarily the procurement of raw materials from associate company Jiangsu Lianrui New Material Co., Ltd., amounting to **68.89 million yuan**[77](index=77&type=chunk) - Significant Equity Acquisition Related Party Transaction: The company acquired a portion of Guangdong Lusheng Environmental Protection Co., Ltd.'s equity, which constituted a related party transaction and has been disclosed in announcements[80](index=80&type=chunk) [Social Responsibility and Environmental Information](index=36&type=section&id=XVII.%20Work%20on%20Actively%20Fulfilling%20Social%20Responsibilities) The company actively fulfills social responsibilities, participating in public welfare, and transparently discloses detailed environmental information, including pollutant discharge, prevention facilities, and emergency plans for its key production bases - The company disclosed detailed environmental information for multiple key pollutant-discharging units, including types, standards, concentrations, and total amounts of wastewater, exhaust gas, and hazardous waste emissions, as well as investment and operation of pollution prevention facilities, demonstrating a **high level of environmental management**[90](index=90&type=chunk)[112](index=112&type=chunk)[121](index=121&type=chunk) - The company and its major subsidiaries have all prepared and filed **emergency response plans for environmental incidents** and formulated **self-monitoring environmental plans**, regularly disclosing monitoring information[124](index=124&type=chunk)[125](index=125&type=chunk) [Changes in Ordinary Shares and Shareholder Information](index=57&type=section&id=Section%206.%20Changes%20in%20Ordinary%20Shares%20and%20Shareholder%20Information) This section details changes in the company's ordinary share capital and provides an overview of its shareholder structure and top shareholders [Changes in Ordinary Share Capital](index=57&type=section&id=I.%20Changes%20in%20Ordinary%20Share%20Capital) During the reporting period, the company's total share capital increased by **14,628,750 shares** due to the exercise of stock options under the 2019 incentive plan - In 2020, the company's total share capital increased by **14,628,750 shares** due to the exercise of stock options under the incentive plan[149](index=149&type=chunk)[150](index=150&type=chunk) [Shareholders and Actual Controller Information](index=58&type=section&id=III.%20Shareholders%20and%20Actual%20Controller%20Information) As of year-end 2020, the company had **133,419 shareholders**, with the top three being Guangdong Guangxin Holdings (**22.11%**), Dongguan Guohong Investment (**15.02%**), and Weihua Electronics (**14.24%**), and no single controlling shareholder or actual controller Top Three Shareholders' Shareholding | Shareholder Name | Shareholding Ratio (%) | | :--- | :--- | | Guangdong Guangxin Holdings Group Co., Ltd. | 22.11 | | Dongguan Guohong Investment Co., Ltd. | 15.02 | | Weihua Electronics Co., Ltd. | 14.24 | - The company's equity structure is **dispersed**, with no single shareholder holding **30% or more**, thus there is **no controlling shareholder or actual controller**[157](index=157&type=chunk)[159](index=159&type=chunk)[161](index=161&type=chunk) [Preferred Shares Information](index=63&type=section&id=Section%207.%20Preferred%20Shares%20Information) This section confirms that the company has no preferred shares during the reporting period [Preferred Shares Information](index=63&type=section&id=Preferred%20Shares%20Information) During the reporting period, the company had no preferred shares - The company has **no preferred shares**[163](index=163&type=chunk) [Directors, Supervisors, Senior Management, and Employees](index=64&type=section&id=Section%208.%20Directors%2C%20Supervisors%2C%20Senior%20Management%2C%20and%20Employees) This section provides details on the shareholding changes and compensation of directors, supervisors, and senior management, as well as an overview of the company's employee structure and training [Changes in Shareholding and Remuneration of Directors, Supervisors, and Senior Management](index=64&type=section&id=I.%20Shareholding%20Changes%20and%20Remuneration) During the reporting period, several directors, supervisors, and senior management increased their shareholdings due to stock option exercises, with total pre-tax remuneration for the group reaching **50.47 million yuan** Shareholding Changes and Remuneration of Selected Directors, Supervisors, and Senior Management | Name | Position | Year-end Shareholding | Change in Shares | Total Remuneration (10,000 Yuan) | | :--- | :--- | :--- | :--- | :--- | | Liu Shufeng | Chairman | 3,690,740 | 504,204 | 1,297.45 | | Chen Renxi | Director, General Manager | 1,521,250 | 375,000 | 1,301.29 | | Dong Xiaojun | Deputy General Manager | 801,539 | 140,000 | 452.31 | | Tang Fuyun | Board Secretary | 120,000 | 120,000 | 406.68 | | He Ziqiang | Chief Accountant | 1,447,165 | 300,000 | 464.20 | | Zeng Yaode | Chief Engineer | 624,858 | 300,000 | 494.61 | [Employee Information](index=73&type=section&id=VI.%20Employee%20Information%20of%20Parent%20Company%20and%20Major%20Subsidiaries) As of the reporting period end, the company had **10,818 employees**, with production personnel at **64.4%** and technical personnel at **22.3%**, and **46.96%** holding college degrees or higher, supported by performance-linked compensation and training Employee Professional Composition | Professional Category | Number of Persons | Proportion (%) | | :--- | :--- | :--- | | Production Personnel | 6,966 | 64.4 | | Technical Personnel | 2,411 | 22.3 | | Sales Personnel | 171 | 1.6 | | Administrative Personnel | 504 | 4.7 | | Other | 766 | 7.0 | | **Total** | **10,818** | **100.0** | - The company's compensation policy reflects **'first-class talent, first-class performance, first-class remuneration,'** tilting compensation resources towards **'value contributors'** and **'strugglers'**[180](index=180&type=chunk) [Corporate Governance](index=74&type=section&id=Section%209.%20Corporate%20Governance) This section describes the company's corporate governance structure, including the roles of its various bodies and the results of its internal control audit [Overview of Corporate Governance](index=74&type=section&id=I.%20Explanation%20of%20Corporate%20Governance%20Related%20Matters) During the reporting period, the company continuously improved its corporate governance structure in strict compliance with laws and regulations, ensuring standardized operations of its shareholder general meeting, board of directors, supervisory board, and management - The company's corporate governance structure is **sound**, with the shareholder general meeting, board of directors, supervisory board, and management operating in a **standardized manner**, complying with relevant laws and regulations[184](index=184&type=chunk)[185](index=185&type=chunk) [Internal Control Audit Report](index=77&type=section&id=IX.%20Explanation%20of%20Internal%20Control%20Audit%20Report%20Related%20Matters) The company disclosed its internal control self-assessment report and internal control audit report, with the accounting firm issuing a **standard unqualified opinion** on the company's 2020 internal controls - The company's internal control audit report received a **standard unqualified opinion**, indicating that the company's internal controls were **effective in all material respects**[194](index=194&type=chunk) [Corporate Bonds Information](index=77&type=section&id=Section%2010.%20Corporate%20Bonds%20Information) This section confirms that the company has no corporate bonds during the reporting period [Corporate Bonds Information](index=77&type=section&id=Corporate%20Bonds%20Information) During the reporting period, the company had no corporate bonds - The company has **no outstanding corporate bonds**[194](index=194&type=chunk) [Financial Report](index=78&type=section&id=Section%2011.%20Financial%20Report) This section presents the company's audited financial statements, including the auditor's opinion, key financial data, and significant accounting policy changes [Audit Report](index=78&type=section&id=I.%20Audit%20Report) Huaxing Certified Public Accountants (Special General Partnership) issued a **standard unqualified audit opinion** on the company's 2020 financial statements, affirming their fair presentation - The audit opinion is a **standard unqualified opinion**, indicating that the financial statements are **true and fair**[196](index=196&type=chunk) - Key Audit Matters (KAMs) include **impairment provisions for accounts receivable** and **inventory**, reflecting the significance and complexity of these accounting estimates on the financial statements[198](index=198&type=chunk)[199](index=199&type=chunk)[200](index=200&type=chunk) [Financial Statement Summary](index=82&type=section&id=II.%20Financial%20Statements) The financial statements show strong performance in 2020, with total assets growing to **18.36 billion yuan**, operating revenue increasing by **10.92%** to **14.69 billion yuan**, and net profit attributable to parent company shareholders rising by **16.00%** to **1.68 billion yuan** Consolidated Income Statement Summary (Unit: Yuan) | Item | 2020 Annual | 2019 Annual | | :--- | :--- | :--- | | Total Operating Revenue | 14,687,341,460.15 | 13,241,085,241.08 | | Operating Profit | 2,090,078,816.81 | 1,804,902,923.07 | | Total Profit | 2,082,831,709.27 | 1,805,073,237.46 | | Net Profit | 1,800,202,825.79 | 1,563,393,933.92 | | Net Profit Attributable to Parent Company Shareholders | 1,680,510,160.48 | 1,448,767,198.85 | Consolidated Cash Flow Statement Summary (Unit: Yuan) | Item | 2020 Annual | 2019 Annual | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 1,757,967,491.81 | 1,692,374,380.93 | | Net Cash Flow from Investing Activities | -1,832,894,439.73 | -1,566,424,225.68 | | Net Cash Flow from Financing Activities | -215,433,625.61 | -173,114,952.42 | | Net Increase in Cash and Cash Equivalents | -232,422,621.58 | -50,289,327.74 | [Significant Accounting Policy Changes](index=134&type=section&id=44.%20Changes%20in%20Significant%20Accounting%20Policies%20and%20Accounting%20Estimates) Effective January 1, 2020, the company adopted the revised 'Revenue' accounting standard, primarily impacting financial statement presentation through reclassification of certain items without significant effect on financial position or operating results - The company adopted the **new revenue standard** effective January 1, 2020, adjusting relevant items in the opening financial statements, primarily for **reclassification of accounts**[313](index=313&type=chunk) Impact of New Revenue Standard on Opening Consolidated Balance Sheet (Unit: Yuan) | Item | Before Adjustment (2019-12-31) | After Adjustment (2020-01-01) | Change Amount | | :--- | :--- | :--- | :--- | | Advances from Customers | 5,448,063.35 | 0.00 | -5,448,063.35 | | Contract Liabilities | 0.00 | 4,821,295.00 | 4,821,295.00 | | Other Current Liabilities | 0.00 | 626,768.35 | 626,768.35 | [Changes in Consolidation Scope](index=200&type=section&id=VIII.%20Changes%20in%20Consolidation%20Scope) During the reporting period, the company's consolidation scope changed due to the acquisition of a **43.65%** stake in Guangdong Lusheng Environmental Protection, gaining control and recognizing **97.43 million yuan** in goodwill, and the establishment of a new wholly-owned subsidiary - The company acquired a **27% equity stake** in Guangdong Lusheng Environmental Protection for **143 million yuan** in cash, achieving control and consolidation when combined with its original equity holding, with a total consolidation cost of **231 million yuan**, resulting in goodwill of **97.43 million yuan**[489](index=489&type=chunk)[490](index=490&type=chunk)[491](index=491&type=chunk) - The company established a new wholly-owned subsidiary, Jiujiang Hongjie Real Estate Development Co., Ltd., with a registered capital of **60 million yuan**, included in the consolidated scope from its establishment[495](index=495&type=chunk) [Reference Documents](index=235&type=section&id=Section%2012.%20Reference%20Documents) This section lists the documents available for reference, supporting the information presented in the report

Financial Performance - Net profit attributable to shareholders rose by 24.99% to RMB 1,302,821,119.36 for the year-to-date period[5] - Operating revenue for the year-to-date period increased by 12.88% to RMB 10,690,001,192.32 compared to the same period last year[5] - Basic earnings per share increased by 18.75% to RMB 0.57 compared to the same period last year[5] - Total operating revenue for the first three quarters of 2020 was ¥10,690,001,192.32, compared to ¥9,470,041,407.82 in the same period of 2019, reflecting a growth of 12.87%[23] - Net profit for Q3 2020 was ¥504,502,791.77, compared to ¥445,330,996.89 in Q3 2019, representing a growth of 13.25%[24] - The net profit attributable to the parent company's shareholders for Q3 2020 was approximately ¥476.97 million, compared to ¥413.45 million in Q3 2019, reflecting an increase of around 15.4%[26] Assets and Liabilities - Total assets increased by 16.14% to RMB 18,042,367,367.33 compared to the end of the previous year[5] - The company's total liabilities increased significantly, with a notable rise in deferred tax liabilities by 113.66% to ¥27,799,810.60, linked to the acquisition and asset evaluations.[12] - Total liabilities reached ¥7.82 billion, compared to ¥6.18 billion, which is an increase of approximately 26.7%[19] - The total liabilities as of Q3 2020 were ¥3,237,286,348.62, up from ¥2,823,510,363.93 in the previous year, showing a year-over-year increase of 14.66%[21] - The company's total liabilities were ¥6,822,963,390.77, reflecting a stable financial position[34] Cash Flow - The net cash flow from operating activities decreased by 18.81% to RMB 1,138,578,441.88 year-to-date[5] - Cash flow from financing activities showed a net inflow of ¥12,848,851.58, a significant improvement compared to a net outflow of ¥382,449,808.80 in the previous year.[15] - The net cash flow from operating activities for Q3 2020 was ¥1,138,578,441.88, a decrease of 18.7% compared to ¥1,402,298,213.94 in Q3 2019[29] - The net cash flow from financing activities was -¥378,427,224.43, an improvement from -¥473,971,751.54 in Q3 2019[32] Shareholder Information - The company reported a total of 181,761 shareholders at the end of the reporting period[7] - The top three shareholders hold a combined 51.39% of the total shares: Guangdong Guangxin Holdings Group (22.12%), Dongguan Guohong Investment Co., Ltd. (15.02%), and Weihua Electronics Co., Ltd. (14.25%)[7] Investments and Acquisitions - Derivative financial assets reached ¥90,150.00, primarily due to the acquisition of Guangdong Lusheng Environmental Protection Co., Ltd. by the wholly-owned subsidiary Dongguan Shengyi Capital Investment Co., Ltd.[10] - Investment income surged by 217.51% to ¥69,111,175.16, resulting from the fair value difference of equity investments following the acquisition of Guangdong Lusheng Environmental Protection Co., Ltd.[13] - The goodwill balance reached ¥104,550,995.91, resulting from the acquisition of Guangdong Lusheng Environmental Protection Co., Ltd., where the acquisition cost exceeded the fair value of identifiable net assets.[11] Current Assets and Inventory - Current assets rose to ¥9.66 billion, up from ¥8.71 billion, marking an increase of about 10.9% year-over-year[19] - Inventory increased significantly to ¥2.66 billion, compared to ¥2.10 billion, reflecting a growth of approximately 26.7%[19] - Other current assets increased by 90.37% to ¥199,525,029.06, mainly due to an increase in input VAT credits.[10] Operating Costs and Expenses - Total operating costs for Q3 2020 were ¥3,278,997,424.84, up from ¥2,969,704,198.03 in Q3 2019, reflecting a year-over-year increase of 10.41%[23] - Research and development expenses in Q3 2020 amounted to ¥186,772,823.37, an increase from ¥162,358,322.72 in Q3 2019, indicating a focus on innovation[23] - The company's operating costs for Q3 2020 were approximately ¥1.49 billion, compared to ¥1.45 billion in Q3 2019, representing an increase of about 2.9%[26] Other Income and Gains - Non-operating income for the year-to-date period included government subsidies amounting to RMB 38,864,210.89[6] - Other income increased by 139.65% to ¥37,225,552.37, primarily due to an increase in government subsidies recognized as current profits.[13] - The company recorded a total of RMB 71,265,909.17 in non-recurring gains and losses for the third quarter[6]