[Company Profile and Key Financial Indicators](index=6&type=section&id=%E5%85%AC%E5%8F%B8%E7%AE%80%E4%BB%8B%E5%92%8C%E4%B8%BB%E8%A6%81%E8%B4%A2%E5%8A%A1%E6%8C%87%E6%A0%87) This section outlines the company's basic information and key financial performance over the past three years [Company Basic Information](index=6&type=section&id=%E5%85%AC%E5%8F%B8%E4%BF%A1%E6%81%AF) Nanjing Iron & Steel Co., Ltd. (Nangang Share) is a Shanghai Stock Exchange-listed company with stock code 600282 - The company's Chinese name is Nanjing Iron & Steel Co., Ltd., with stock abbreviation Nangang Share and stock code **600282**[10](index=10&type=chunk)[14](index=14&type=chunk) [Key Accounting Data and Financial Indicators for the Past Three Years](index=7&type=section&id=%E8%BF%91%E4%B8%89%E5%B9%B4%E4%B8%BB%E8%A6%81%E4%BC%9A%E8%AE%A1%E6%95%B0%E6%8D%AE%E5%92%8C%E8%B4%A2%E5%8A%A1%E6%8C%87%E6%A0%87) In 2019, operating revenue grew 9.91% to 47.97 billion Yuan, but net profit fell 34.98% to 2.61 billion Yuan, mainly due to increased raw material costs 2017-2019 Key Accounting Data | Indicator | 2019 | 2018 | YoY Change (%) | 2017 | | :--- | :--- | :--- | :--- | :--- | | **Operating Revenue (Yuan)** | 47,970,483,148.92 | 43,646,788,888.30 | 9.91 | 37,600,664,145.81 | | **Net Profit Attributable to Shareholders (Yuan)** | 2,606,224,358.06 | 4,008,192,215.36 | -34.98 | 3,200,349,431.10 | | **Net Profit Attributable to Shareholders Excluding Non-recurring Items (Yuan)** | 2,349,309,400.64 | 3,947,172,833.45 | -40.48 | 3,074,183,971.14 | | **Net Cash Flow from Operating Activities (Yuan)** | 4,348,491,905.18 | 4,938,472,682.58 | -11.95 | 2,361,266,275.26 | | **Net Assets Attributable to Shareholders (Yuan)** | 16,776,789,408.57 | 15,378,951,063.71 | 9.09 | 11,575,266,229.42 | | **Total Assets (Yuan)** | 43,620,513,500.75 | 41,194,585,952.13 | 5.89 | 37,735,444,348.85 | 2017-2019 Key Financial Indicators | Key Financial Indicator | 2019 | 2018 | YoY Change | 2017 | | :--- | :--- | :--- | :--- | :--- | | **Basic Earnings Per Share (Yuan/share)** | 0.5888 | 0.9078 | -35.14% | 0.7856 | | **Weighted Average Return on Net Assets (%)** | 16.37 | 29.81 | Decreased by 13.44 percentage points | 36.80 | [2019 Quarterly Financial Data](index=8&type=section&id=2019%20%E5%B9%B4%E5%88%86%E5%AD%A3%E5%BA%A6%E4%B8%BB%E8%A6%81%E8%B4%A2%E5%8A%A1%E6%95%B0%E6%8D%AE) The company's 2019 performance showed a quarter-over-quarter decline, with significantly weaker profitability in the second half 2019 Quarterly Key Financial Data | Indicator (Yuan) | Q1 | Q2 | Q3 | Q4 | | :--- | :--- | :--- | :--- | :--- | | **Operating Revenue** | 11,815,832,282.21 | 12,279,266,555.77 | 12,635,848,366.78 | 11,239,535,944.16 | | **Net Profit Attributable to Shareholders** | 836,832,175.38 | 1,004,115,617.74 | 534,268,295.60 | 231,008,269.34 | | **Net Profit Attributable to Shareholders Excluding Non-recurring Items** | 773,510,034.58 | 914,018,993.84 | 455,362,632.65 | 206,417,739.57 | | **Net Cash Flow from Operating Activities** | 1,624,137,220.52 | -320,478,981.65 | 831,348,432.65 | 2,213,485,233.66 | [Non-recurring Gains and Losses](index=8&type=section&id=%E9%9D%9E%E7%BB%8F%E5%B8%B8%E6%80%A7%E6%8D%9F%E7%9B%8A%E9%A1%B9%E7%9B%AE) 2019 non-recurring gains and losses totaled 257 million Yuan, driven by fair value changes and investment income - In 2019, total non-recurring gains and losses amounted to **257 million Yuan**, primarily driven by **275 million Yuan** in investment income from the disposal of financial assets held for trading, derivatives, and other debt investments, along with **119 million Yuan** in entrusted investment gains/losses[20](index=20&type=chunk) [Company Business Overview](index=10&type=section&id=%E5%85%AC%E5%8F%B8%E4%B8%9A%E5%8A%A1%E6%A6%82%E8%A6%81) This section outlines the company's core business, operating model, industry landscape, and competitive advantages [Main Business, Operating Model, and Industry Situation](index=10&type=section&id=%E4%B8%BB%E8%A6%81%E4%B8%9A%E5%8A%A1%E3%80%81%E7%BB%8F%E8%90%A5%E6%A8%A1%E5%BC%8F%E5%8F%8A%E8%A1%8C%E4%B8%9A%E6%83%85%E5%86%B5) The company is a full-process steel enterprise with 10 million tons annual crude steel capacity, focusing on specialized plate and high-quality long products - The company is a full-process steel integrated enterprise with an annual crude steel production capacity of **10 million tons**, primarily engaged in new steel materials and synergistic development of information technology and e-commerce[22](index=22&type=chunk) - The company's main products are specialized plate and high-quality special steel long products, widely used in energy, marine engineering, and construction machinery industries, with **5.01 million tons** of medium and heavy plate produced in 2019[23](index=23&type=chunk) - In 2019, China's crude steel output reached **996 million tons**, a **8.3% year-over-year increase**, accounting for **53.3%** of global output; the domestic steel industry's total profit decreased by **30.90% year-over-year**, with sales profit margin falling to **4.43%**[29](index=29&type=chunk)[30](index=30&type=chunk)[31](index=31&type=chunk) [Core Competitiveness Analysis](index=13&type=section&id=%E6%A0%B8%E5%BF%83%E7%AB%9E%E4%BA%89%E5%8A%9B%E5%88%86%E6%9E%90) Core competitiveness stems from integrated state-owned and private advantages, strong products, leading innovation, stable customer relations, and favorable location - The company integrates the traditional advantages of state-owned enterprises with the flexible mechanisms of private enterprises, forming a "community of interests,事业, and destiny" through employee stock ownership and equity incentive plans[37](index=37&type=chunk) - The company possesses strong product capabilities in specialized plate and high-quality special steel long products, with several products, such as steel for cryogenic storage tanks and high-speed rail brake discs, filling domestic gaps or leading market share[38](index=38&type=chunk) - The company has established a "2+3+4" multi-level R&D platform and was recognized as an "Intelligent Manufacturing Pilot Demonstration" by the Ministry of Industry and Information Technology; as of the end of 2019, it held **840 valid authorized patents**, including **351 invention patents**[39](index=39&type=chunk)[40](index=40&type=chunk) - The company has established stable cooperative relationships with renowned domestic and international enterprises such as PetroChina, Sinopec, and Caterpillar, with strategic and key customers accounting for over **30%** and direct sales customers exceeding **60%**; steel sales through the C2M e-commerce platform accounted for over **80%** of total sales[41](index=41&type=chunk) [Discussion and Analysis of Operations](index=15&type=section&id=%E7%BB%8F%E8%90%A5%E6%83%85%E5%86%B5%E8%AE%A8%E8%AE%BA%E4%B8%8E%E5%88%86%E6%9E%90) This section details the company's operational highlights, financial performance, asset and liability structure, industry information, and future plans [Operational Highlights and Overall Situation](index=15&type=section&id=%E7%BB%8F%E8%90%A5%E4%BA%AE%E7%82%B9%E4%B8%8E%E6%80%BB%E4%BD%93%E6%83%85%E5%86%B5) In 2019, the company achieved strong production and sales, with 9.93 million tons of steel products sold and a 100.09% production-to-sales ratio, despite industry price declines - During the reporting period, the company's pig iron, crude steel, and steel product output were **9.90 million tons**, **10.97 million tons**, and **9.92 million tons**, respectively, with steel product sales of **9.93 million tons** and a production-to-sales ratio of **100.09%**[43](index=43&type=chunk)[46](index=46&type=chunk) - The company's products demonstrated strong competitiveness, with the decline in the comprehensive average selling price of steel products (**3.99%**) being less than the decline in the China Iron and Steel Association's comprehensive steel price index (**6.64%**)[44](index=44&type=chunk) - The company's capital structure optimized, with the asset-liability ratio decreasing by **2.19 percentage points** year-over-year to **49.72%** in 2019[45](index=45&type=chunk) - Despite a **2.632 billion Yuan** increase in costs due to rising raw material prices, the company achieved a total cost reduction of **1.016 billion Yuan** through various measures, including a **708 million Yuan** reduction in process costs[47](index=47&type=chunk) - The company focused on building an industrial chain ecosystem, with subsidiaries such as Jinheng Technology, Gangbao Shares, and Xinzhi Chain achieving revenue and profit growth, and providing **540 million Yuan** in financial empowerment to **35 customers** through its supply chain finance platform[51](index=51&type=chunk)[52](index=52&type=chunk) [Main Business Analysis](index=18&type=section&id=%E4%B8%BB%E8%90%A5%E4%B8%9A%E5%8A%A1%E5%88%86%E6%9E%90) In 2019, main business revenue rose 9.88% to 47.83 billion Yuan, but operating costs surged 19.35% due to higher raw material prices, significantly lowering gross margin Major Changes in Income Statement and Cash Flow Statement Items | Item | Current Period (Yuan) | Prior Period (Yuan) | Change (%) | | :--- | :--- | :--- | :--- | | **Operating Revenue** | 47,970,483,148.92 | 43,646,788,888.30 | 9.91 | | **Operating Cost** | 41,600,911,936.67 | 34,868,638,855.39 | 19.31 | | **R&D Expenses** | 582,046,360.94 | 446,113,982.99 | 30.47 | | **Financial Expenses** | 275,504,358.40 | 391,122,984.01 | -29.56 | | **Operating Profit** | 4,056,048,890.81 | 6,038,186,295.17 | -32.83 | | **Net Cash Flow from Investing Activities** | -920,705,573.88 | -2,613,482,800.31 | 64.77 | Main Business by Industry Segment | Segment | Operating Revenue (Yuan) | Operating Cost (Yuan) | Gross Margin (%) | YoY Change in Operating Revenue (%) | YoY Change in Operating Cost (%) | YoY Change in Gross Margin | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **Steel Business** | 41,016,795,416.02 | 34,982,339,104.02 | 14.71 | 4.29 | 13.24 | Decreased by 6.74 percentage points | | **Trade and Other Businesses** | 6,809,445,016.01 | 6,533,371,414.50 | 4.05 | 62.22 | 67.75 | Decreased by 3.17 percentage points | Production and Sales Analysis (million tons) | Main Product | Production Volume | Sales Volume | Inventory Volume | YoY Change in Production Volume (%) | YoY Change in Sales Volume (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Plate | 5.0104 | 4.9859 | 0.2182 | 8.02 | 8.01 | | Bar | 3.4218 | 3.4494 | 0.0502 | 5.30 | 4.85 | | Total | 9.9206 | 9.9297 | 0.2980 | 8.17 | 8.07 | - Total R&D investment in 2019 was **1.823 billion Yuan**, accounting for **3.80%** of operating revenue; the company completed **63 new product developments** and achieved breakthroughs in **15 key technologies**, including nickel-saving 7Ni steel for LNG storage tanks[64](index=64&type=chunk)[65](index=65&type=chunk) - Net cash flow from operating activities decreased by **11.95% year-over-year**, primarily due to a **1.376 billion Yuan** decrease in net profit; net cash flow from investing activities increased by **1.693 billion Yuan**, mainly due to a higher base from increased capital in Baizhong Environment in the prior year; net cash flow from financing activities decreased by **590 million Yuan**, primarily due to a year-over-year increase in cash dividends[68](index=68&type=chunk)[69](index=69&type=chunk) [Asset and Liability Analysis](index=27&type=section&id=%E8%B5%84%E4%BA%A7%E3%80%81%E8%B4%9F%E5%80%BA%E6%83%85%E5%86%B5%E5%88%86%E6%9E%90) As of 2019-end, total assets reached 43.62 billion Yuan, up 5.89% YoY, with optimized debt structure and a reduced asset-liability ratio Major Changes in Balance Sheet Items | Item Name | Current Period End (Yuan) | Prior Period End (Yuan) | Change (%) | Main Reason | | :--- | :--- | :--- | :--- | :--- | | **Cash and Cash Equivalents** | 4,265,437,976.64 | 3,067,338,382.07 | 39.06 | Increased cash reserves | | **Financial Assets Held for Trading** | 1,821,553,153.54 | 0.00 | Not applicable | Reclassification under new financial instruments standards | | **Construction in Progress** | 2,356,990,285.41 | 1,204,818,693.84 | 95.63 | Construction of environmental protection and energy-saving projects | | **Short-term Borrowings** | 3,436,057,270.37 | 4,897,255,186.15 | -29.84 | Debt structure adjustment | | **Advances from Customers** | 3,580,255,819.98 | 2,357,118,134.61 | 51.89 | Increase in long-term steel product orders | | **Long-term Borrowings** | 845,200,820.84 | 76,000,000.00 | 1,012.11 | New medium and long-term borrowings | | **Bonds Payable** | 1,026,522,045.55 | 0.00 | 100 | Issuance of medium-term notes | - As of the end of the reporting period, the company's total restricted assets amounted to **6.343 billion Yuan**, a significant decrease from **9.182 billion Yuan** at the end of the previous year, with notes receivable and cash and cash equivalents being the primary restricted assets[74](index=74&type=chunk) [Industry Operating Information Analysis](index=31&type=section&id=%E8%A1%8C%E4%B8%9A%E7%BB%8F%E8%90%A5%E6%80%A7%E4%BF%A1%E6%81%AF%E5%88%86%E6%9E%90) In 2019, the company's steel manufacturing and sales were primarily hot-rolled steel, with advanced steel materials showing gross margin resilience Steel Manufacturing and Sales by Finished Product Form (million tons) | Category | Production Volume (Current Year) | Sales Volume (Current Year) | Operating Revenue (10,000 Yuan/Current Year) | Gross Margin (Current Year/%) | Gross Margin (Prior Year/%) | | :--- | :--- | :--- | :--- | :--- | :--- | | **Sections** | 0.3635 | 0.3681 | 164,154.54 | 16.48 | 16.09 | | **Plates and Strips** | 5.5722 | 5.5480 | 2,249,098.07 | 16.62 | 24.82 | | **Other** | 3.9849 | 4.0135 | 1,482,495.18 | 12.96 | 18.30 | Special Steel Product Manufacturing and Sales | Product Name | Sales Volume (tons/Current Year) | Sales Volume (tons/Prior Year) | Operating Revenue (10,000 Yuan/Current Year) | Gross Margin (%/Current Year) | Gross Margin (%/Prior Year) | | :--- | :--- | :--- | :--- | :--- | :--- | | Advanced Steel Materials | 1,372,552.07 | 1,317,272.59 | 683,197.63 | 13.72 | 12.95 | Iron Ore Supply Situation (million tons) | Supply Source | Supply Volume (Current Year) | Supply Volume (Prior Year) | Expenditure (million Yuan/Current Year) | | :--- | :--- | :--- | :--- | | **Self-supplied** | 0.9890 | 0.9104 | 840.48 | | **Domestic Procurement** | 1.9442 | 1.1997 | 1,363.31 | | **Foreign Import** | 13.5643 | 11.6552 | 9,839.72 | [Investment Status Analysis](index=33&type=section&id=%E6%8A%95%E8%B5%84%E7%8A%B6%E5%86%B5%E5%88%86%E6%9E%90) External equity investments totaled 85.70 million Yuan, mainly in new materials and overseas sales, alongside significant non-equity investments in environmental and tech upgrades - During the reporting period, the company's total external equity investments amounted to **85.6959 million Yuan**, primarily including investments in Keller New Materials and Indonesian Lantan Company[82](index=82&type=chunk) - The company's significant non-equity investments primarily focused on environmental protection and technological transformation projects, including resource comprehensive utilization power generation, sintering machine flue gas desulfurization and denitrification, and stockyard enclosure renovation, funded by raised capital and self-financing[84](index=84&type=chunk) [Discussion and Analysis of Company's Future Development](index=37&type=section&id=%E5%85%AC%E5%8F%B8%E6%9C%AA%E6%9D%A5%E5%8F%91%E5%B1%95%E7%9A%84%E8%AE%A8%E8%AE%BA%E4%B8%8E%E5%88%86%E6%9E%90) The company aims to become a globally competitive advanced materials intelligent manufacturer, targeting 10.15 million tons of steel products and 48.1 billion Yuan in 2020 revenue - The company's development strategy is to build an industrial chain ecosystem centered on new steel materials, striving to become a globally competitive advanced materials intelligent manufacturer[89](index=89&type=chunk) 2020 Operating Targets | Indicator | Target | | :--- | :--- | | **Pig Iron Output** | 10.50 million tons | | **Crude Steel Output** | 11.60 million tons | | **Steel Product Output** | 10.15 million tons | | **Operating Revenue** | 48.1 billion Yuan | | **Fixed Asset Investment** | 1.95 billion Yuan | - The company faces key risks including economic risks from the COVID-19 pandemic, market risks from high inventory and intensified competition, and increased environmental costs due to ultra-low emission upgrades[97](index=97&type=chunk)[98](index=98&type=chunk)[99](index=99&type=chunk) [Significant Matters](index=40&type=section&id=%E9%87%8D%E8%A6%81%E4%BA%8B%E9%A1%B9) This section covers the company's profit distribution plan, significant related party transactions, and other major corporate actions [Profit Distribution Plan](index=40&type=section&id=%E5%88%A9%E6%B6%A6%E5%88%86%E9%85%8D%E6%88%96%E8%B5%84%E6%9C%AC%E5%85%AC%E7%A7%AF%E9%87%91%E8%BD%AC%E5%A2%9E%E9%A2%84%E6%A1%88) The 2019 profit distribution plan proposes a 3.00 Yuan cash dividend per 10 shares (incl. tax), representing a high 50.73% payout ratio of net profit - The company's 2019 profit distribution plan proposes a cash dividend of **3.00 Yuan per 10 shares** (including tax), with no capital reserve conversion to share capital; this plan is subject to shareholder approval[104](index=104&type=chunk) Dividend Distribution Plans for the Past Three Years | Dividend Year | Cash Dividend per 10 Shares (Yuan) (incl. tax) | Cash Dividend Amount (Yuan) | Ratio to Net Profit Attributable to Shareholders (%) | | :--- | :--- | :--- | :--- | | **2019** | 3.00 | 1,322,246,537.10 | 50.73 | | **2018** | 3.00 | 1,326,694,997.10 | 33.10 | | **2017** | 0.50 | 220,448,872.85 | 6.89 | [Significant Related Party Transactions](index=59&type=section&id=%E9%87%8D%E5%A4%A7%E5%85%B3%E8%81%94%E4%BA%A4%E6%98%93) Routine related party transactions occurred with the parent company and subsidiaries, while a significant non-routine share issuance to acquire two subsidiaries' equity is progressing - Routine related party transactions primarily include sales of water, electricity, steam, and slag to related parties, as well as procurement of iron ore, oxygen, nitrogen, and argon from related parties, with transaction pricing based on market principles[132](index=132&type=chunk)[134](index=134&type=chunk)[137](index=137&type=chunk) - The company plans to issue shares to its controlling shareholder, Nanjing Ganglian, to acquire its **38.72% equity stake** in Nangang Development and **38.72% equity stake** in Jinjiang Furnace Materials, which upon completion will make these companies wholly-owned subsidiaries of the listed company; this matter is currently in progress[140](index=140&type=chunk) [Other Significant Matters](index=70&type=section&id=%E5%85%B6%E4%BB%96%E9%87%8D%E5%A4%A7%E4%BA%8B%E9%A1%B9) The company completed a share repurchase for equity incentives, continued incentive plans, issued medium-term notes, and modified fundraising investment projects - The company completed its share repurchase program, repurchasing a total of **21,980,000 shares** for a total payment of **74,990,042.00 Yuan**, intended for equity incentives[155](index=155&type=chunk) - The company continued to advance multiple equity incentive plans, with **7,151,800 new shares** issued due to exercise during the reporting period, and **21.98 million stock options** newly granted; equity incentive amortization expense was **12.1949 million Yuan**[156](index=156&type=chunk)[157](index=157&type=chunk) - In 2019, the company successfully issued two tranches of medium-term notes, each with a total issuance amount of **500 million Yuan**, a 3-year term, and coupon rates of **5.5%** and **5.35%**, respectively[158](index=158&type=chunk)[159](index=159&type=chunk) - The company modified certain fundraising investment projects, adding environmental protection and intelligent development projects such as sintering machine flue gas denitrification and desulfurization, and industrial internet construction projects[160](index=160&type=chunk) [Share Capital Changes and Shareholder Information](index=81&type=section&id=%E6%99%AE%E9%80%9A%E8%82%A1%E8%82%A1%E4%BB%BD%E5%8F%98%E5%8A%A8%E5%8F%8A%E8%82%A1%E4%B8%9C%E6%83%85%E5%86%B5) This section details changes in the company's share capital and provides an overview of its shareholder structure [Share Capital Changes](index=81&type=section&id=%E6%99%AE%E9%80%9A%E8%82%A1%E8%82%A1%E6%9C%AC%E5%8F%98%E5%8A%A8%E6%83%85%E5%86%B5) Total share capital increased from 4.422 billion to 4.429 billion shares due to stock option exercise, adding 7,151,800 unrestricted tradable shares - During the reporting period, due to the exercise of equity incentives, the company's total share capital increased by **7,151,800 shares**, reaching **4,429,468,457 shares** at period-end[183](index=183&type=chunk) [Shareholder Information](index=82&type=section&id=%E8%82%A1%E4%B8%9C%E6%83%85%E5%86%B5) As of 2019-end, the company had 123,443 common shareholders, with the controlling shareholder and concerted parties holding 43.27% of shares, some pledged - As of the end of the reporting period, the company had **123,443 shareholders**[188](index=188&type=chunk) Top Ten Shareholders' Shareholding | Shareholder Name | Shares Held at Period End (shares) | Percentage (%) | Share Status | | :--- | :--- | :--- | :--- | | Nanjing Nangang Iron & Steel United Co., Ltd. | 1,795,351,958 | 40.53 | Pledged | | Hong Kong Securities Clearing Company Limited | 178,399,245 | 4.03 | Unrestricted | | Huarong Ruitong Equity Investment Management Co., Ltd. | 134,000,000 | 3.03 | Unrestricted | | Nanjing Iron & Steel United Co., Ltd. | 121,167,491 | 2.74 | Unrestricted | | National Social Security Fund Council 418 Portfolio | 50,095,667 | 1.13 | Unrestricted | | Nanjing Iron & Steel Co., Ltd. - 2015 Employee Stock Ownership Plan | 43,160,000 | 0.97 | Unrestricted | - The company's controlling shareholder is Nanjing Nangang Iron & Steel United Co., Ltd., and the ultimate actual controller is Mr. Guo Guangchang[193](index=193&type=chunk)[195](index=195&type=chunk) [Directors, Supervisors, Senior Management, and Employees](index=90&type=section&id=%E8%91%A3%E4%BA%8B%E3%80%81%E7%9B%91%E4%BA%8B%E3%80%81%E9%AB%98%E7%BA%A7%E7%AE%A1%E7%90%86%E4%BA%BA%E5%91%98%E5%92%8C%E5%91%98%E5%B7%A5%E6%83%85%E5%86%B5) This section details shareholding changes and remuneration of directors, supervisors, and senior management, along with employee structure and training initiatives [D&S&SM Shareholding Changes and Remuneration](index=90&type=section&id=%E8%91%A3%E7%9B%91%E9%AB%98%E6%8C%81%E8%82%A1%E5%8F%98%E5%8A%A8%E5%8F%8A%E6%8A%A5%E9%85%AC) Several directors, supervisors, and senior management increased shareholdings due to equity incentive plans, with total remuneration from the company reaching 18.64 million Yuan - During the reporting period, several directors, supervisors, and senior management increased their shareholdings due to the exercise of equity incentives, with President Zhu Ruirong increasing his holdings by **810,000 shares** and Executive Vice President Yao Yongkuan by **645,000 shares**[202](index=202&type=chunk) - As of the end of the reporting period, the total remuneration actually received by all directors, supervisors, and senior management from the company amounted to **18.64 million Yuan**[215](index=215&type=chunk) [Employee Information](index=100&type=section&id=%E5%91%98%E5%B7%A5%E6%83%85%E5%86%B5) As of the reporting period end, the company and its main subsidiaries employed 10,161 staff, with production personnel at 73.5% Employee Professional Structure | Professional Category | Number of Employees | | :--- | :--- | | **Production Personnel** | 7,473 | | **Sales Personnel** | 162 | | **Technical Personnel** | 821 | | **Financial Personnel** | 104 | | **Administrative Personnel** | 1,601 | | **Total** | 10,161 | - The company implements a remuneration system linked to efficiency and job contribution, and offers diversified incentive measures for core talents, including equity incentives, annual salaries, and allowances[219](index=219&type=chunk) [Corporate Governance](index=102&type=section&id=%E5%85%AC%E5%8F%B8%E6%B2%BB%E7%90%86) This section provides an overview of the company's corporate governance structure and its effective operation [Corporate Governance Overview](index=102&type=section&id=%E5%85%AC%E5%8F%B8%E6%B2%BB%E7%90%86%E7%9B%B8%E5%85%B3%E6%83%85%E5%86%B5%E8%AF%B4%E6%98%8E) The company has a sound corporate governance structure with clear responsibilities for shareholders, board, supervisors, and management, ensuring scientific decision-making and effective supervision - The company has established a sound corporate governance structure, with clear division of responsibilities among the General Meeting of Shareholders, Board of Directors, Supervisory Committee, and management, operating strictly according to decision-making authority and procedures[223](index=223&type=chunk) - During the reporting period, the four special committees under the Board of Directors—Strategy, Audit, Remuneration and Appraisal, and Nomination—actively fulfilled their duties, providing recommendations for the Board's scientific decision-making without raising any dissenting opinions[229](index=229&type=chunk) - The company disclosed its 2019 Internal Control Evaluation Report, and Tianheng Certified Public Accountants issued a standard unqualified internal control audit report[232](index=232&type=chunk)[233](index=233&type=chunk) [Financial Report and Audit Opinion](index=106&type=section&id=%E8%B4%A2%E5%8A%A1%E6%8A%A5%E5%91%8A%E4%B8%8E%E5%AE%A1%E8%AE%A1%E6%84%8F%E8%A7%81) This section presents the audit opinion on the financial statements and details significant accounting policy changes [Audit Opinion](index=106&type=section&id=%E5%AE%A1%E8%AE%A1%E6%84%8F%E8%A7%81) Tianheng Certified Public Accountants issued a standard unqualified audit opinion on the company's 2019 financial statements, affirming their fair presentation - The auditing firm, Tianheng Certified Public Accountants, issued a **standard unqualified audit opinion** on the company's 2019 financial statements[236](index=236&type=chunk) - A key audit matter for this period's financial statements was "Inventory Impairment Provision"; as of the end of 2019, the company's inventory balance was **6.266 billion Yuan**, with an inventory impairment provision balance of **385 million Yuan**[238](index=238&type=chunk)[239](index=239&type=chunk) [Significant Accounting Policy Changes](index=143&type=section&id=%E9%87%8D%E8%A6%81%E4%BC%9A%E8%AE%A1%E6%94%BF%E7%AD%96%E5%8F%98%E6%9B%B4) Effective January 1, 2019, the company adopted revised new financial instruments standards, reclassifying financial assets and retrospectively adjusting opening balances - The company adopted the new financial instruments standards effective **January 1, 2019**, and made corresponding adjustments to the financial statement format; this accounting policy change only adjusted opening retained earnings or other comprehensive income, without retrospective adjustment of comparative statements[332](index=332&type=chunk) Impact of New Financial Instruments Standards on Opening Financial Position | Item | Before Adjustment (Yuan) | After Adjustment (Yuan) | Adjustment Amount (Yuan) | | :--- | :--- | :--- | :--- | | **Financial Assets Held for Trading** | 0 | 1,404,850,999.41 | 1,404,850,999.41 | | **Financial Assets Measured at Fair Value Through Profit or Loss** | 172,096,879.41 | 0 | -172,096,879.41 | | **Notes Receivable** | 5,595,253,891.07 | 0 | -5,595,253,891.07 | | **Receivables Financing** | 0 | 5,595,253,891.07 | 5,595,253,891.07 | | **Available-for-sale Financial Assets** | 445,331,691.00 | 0 | -445,331,691.00 | | **Other Equity Instrument Investments** | 0 | 353,404,809.36 | 353,404,809.36 | | **Other Comprehensive Income** | 16,840,501.20 | 35,464,102.47 | 18,623,601.27 | | **Retained Earnings** | 8,055,774,551.02 | 8,125,856,416.57 | 70,081,865.55 |

Financial Performance - Net profit attributable to shareholders was CNY 3.44 billion, representing a growth of 67.95% year-on-year[7]. - Operating revenue for the period was CNY 33.64 billion, up 24.27% from the same period last year[7]. - The net cash flow from operating activities was CNY 4.35 billion, an increase of 110.98% compared to the previous year[7]. - Basic earnings per share rose to CNY 0.7775, a 67.49% increase year-on-year[7]. - Net profit rose by 93.68% to ¥196,682.35 million, primarily due to an increase in total profit[15]. - Cash flow from operating activities increased by 110.98% to ¥228,700.64 million, attributed to the rise in net profit[15]. - Net profit for Q3 was ¥1,302,389,462.24, representing a 49.7% increase compared to ¥869,524,348.85 in the previous year[33]. - The company reported a total profit of ¥1,719,878,790.87 for Q3, up from ¥987,847,090.21 year-over-year, reflecting strong operational performance[34]. - Total operating revenue for the year-to-date (January to September) reached ¥33,641,499,467.30, compared to ¥27,071,737,757.22 in the same period last year, marking a 24.5% growth[32]. Assets and Liabilities - Total assets at the end of the reporting period reached CNY 42.30 billion, an increase of 12.09% compared to the end of the previous year[7]. - Total assets increased to ¥19,115,485,606.04, up from ¥13,992,912,987.55 at the beginning of the year[24]. - Current liabilities rose to CNY 21.91 billion, compared to CNY 21.17 billion in the previous year, reflecting an increase of about 3.5%[25]. - Total liabilities reached CNY 23.04 billion, compared to CNY 22.18 billion, which is an increase of approximately 3.9%[26]. - Shareholders' equity rose to CNY 19.25 billion from CNY 15.56 billion, reflecting an increase of about 23.3%[26]. - Long-term borrowings increased to CNY 859.90 million from CNY 718.76 million, representing a rise of about 19.6%[30]. Cash Flow and Investments - Cash and cash equivalents significantly increased to CNY 4.52 billion from CNY 1.60 billion, marking a growth of approximately 182.5%[28]. - The company reported a net cash outflow from financing activities of CNY 3,430,392,878.95, compared to a net inflow of CNY 1,389,192,684.91 in the same period last year[45]. - Cash inflow from financing activities totaled CNY 7,492,216,635.60, down 23.2% from CNY 9,762,703,781.44 in the previous year[45]. - Investment income grew by 210.15% to ¥5,608.64 million, reversing losses from the previous year[15]. - The company has a remaining balance of ¥1,274,466,052.80 in raised funds, which have not yet been utilized for investment projects[19]. Research and Development - R&D expenses surged by 191.25% to ¥16,745.86 million, reflecting the company's commitment to technological innovation and increased investment in research[15]. - Research and development expenses increased significantly to ¥76,948,030.24, compared to ¥11,426,051.83 in the same quarter last year, indicating a focus on innovation[33]. - Research and development expenses increased significantly to ¥43.44 million, compared to only ¥3.18 million in the same quarter last year[37]. Market and Strategic Focus - The company has not disclosed any new product developments or market expansion strategies in this report[6]. - The company plans to continue expanding its environmental and energy-saving projects, reflecting its strategic focus on sustainability[19]. - The company plans to continue expanding its market presence and investing in new technologies to drive future growth[34]. Shareholder Information - The total number of shareholders reached 137,623 at the end of the reporting period[9]. - The largest shareholder, Nanjing Steel Group, holds 40.61% of the shares, with 1.80 billion shares pledged[9].

Financial Performance - The company's operating revenue for the first half of 2018 reached ¥21.62 billion, an increase of 27.50% compared to ¥16.96 billion in the same period last year[18]. - The net profit attributable to shareholders for the first half of 2018 was ¥2.29 billion, representing an increase of 89.42% from ¥1.21 billion in the previous year[18]. - The net cash flow from operating activities was ¥1.63 billion, up 147.78% from ¥656.65 million in the same period last year[18]. - Basic earnings per share for the first half of 2018 were ¥0.5179, a 69.84% increase compared to ¥0.3049 in the same period last year[19]. - The company achieved a net profit of 2.288 billion yuan, an increase of 89.42% year-on-year[33]. - The operating revenue for the period was 21.622 billion yuan, reflecting a year-on-year growth of 27.50%[39]. - The net profit for the period was approximately ¥2.76 billion, reflecting a year-on-year growth of 124.72%[47]. - The company reported a total comprehensive income of ¥2,722,179,869.87, compared to ¥1,171,174,099.58 in the previous period, indicating a substantial growth[154]. Assets and Liabilities - The total assets as of June 30, 2018, amounted to ¥40.84 billion, an increase of 8.23% from ¥37.74 billion at the end of the previous year[18]. - The company's asset-liability ratio decreased from 58.77% at the beginning of the year to 56.14% by the end of the reporting period, a reduction of 2.64 percentage points[35]. - The company's total liabilities reached CNY 22.93 billion, an increase from CNY 22.18 billion, which is a growth of about 3.4%[148]. - The company's total equity attributable to shareholders increased by 0.22% to CNY 4,418,791,757.00 from CNY 4,408,977,457.00[51]. - The company's long-term borrowings increased by 15.07% to CNY 827,075,000.00 compared to CNY 718,762,000.00 in the previous period[51]. Operational Efficiency - The production volumes for pig iron, crude steel, and steel products were 4.8197 million tons, 5.2206 million tons, and 4.7295 million tons, respectively, with year-on-year increases of 8.31%, 10.43%, and 12.53%[39]. - The average profit per ton of steel reached 637.28 yuan, an increase of 113.62% year-on-year[34]. - The comprehensive energy consumption per ton of steel decreased by 16.4 kg of standard coal, while self-generated electricity increased by 110 million kWh, reaching a self-generation ratio of 55.1%[45]. - The company’s cash flow from operating activities increased by 147.78% to approximately ¥1.63 billion, driven by the rise in net profit[47]. Research and Development - The company developed 47 new products during the reporting period, including weather-resistant steel for Bombardier's monorail project, breaking foreign monopolies[40]. - The company’s R&D expenditure increased by 46.04% to ¥716 million, reflecting a commitment to innovation[47]. - The company established the South Steel-Britain Research Institute in collaboration with the University of Leicester, focusing on new materials, intelligent manufacturing, and energy conservation[40]. Market and Economic Risks - The company faces economic risks due to global uncertainties and trade tensions, impacting the steel industry's performance[59]. - Market risks include price volatility of steel products and raw materials, which could affect profitability stability[60]. - The company is exposed to foreign exchange risks due to a higher volume of imports than exports, leading to a significant net foreign exchange risk exposure[61]. - Financial tightening policies have increased financing costs, prompting the company to explore both domestic and international financing channels[62]. - Environmental risks are heightened due to stricter emission standards and increased environmental costs, necessitating enhanced pollution control measures[63]. Corporate Governance and Compliance - The company did not propose any profit distribution or capital reserve transfer to shareholders for the first half of 2018[4]. - There were no non-operating fund occupations by controlling shareholders or related parties during the reporting period[6]. - The company emphasizes the importance of risk awareness regarding forward-looking statements in the report[5]. - The company has committed to maintaining its existing business structure and will not establish or expand any business that competes with Nanjing Steel Group under normal circumstances[68]. - The company has established a priority right for Nanjing Steel Co. to acquire any competing business at market or cost price if any commitments are violated[68]. Environmental Responsibility - The company strictly adheres to environmental protection laws, managing major pollutants such as wastewater, waste gas, and solid waste, with a total wastewater discharge of 871 tons in the first half of 2018[100]. - The company achieved a nitrogen oxide emission of 232 tons, which is below the standard limit of 300 mg/m³, indicating compliance with environmental regulations[102]. - The company has implemented measures for solid waste utilization, with all solid waste being recycled for production purposes[100]. - The company achieved a 100% compliance rate for pollutant discharge during the reporting period, with zero environmental pollution incidents[106]. Shareholder Structure and Equity - The total number of shares increased from 4,408,977,457 to 4,418,791,757, with an increase of 9,814,300 shares during the reporting period[114]. - The top shareholder, Nanjing Nangang Steel Union Co., Ltd., holds 1,795,351,958 shares, accounting for 40.63% of total shares, with all shares pledged[120]. - The company has a total of 136,077 common shareholders as of the end of the reporting period[118]. - The company raised 3.75 billion RMB for capital increase in Nanjing Steel Development through a joint investment with China Construction Bank and Nanjing Steel Union[121]. Financial Management - The company's credit rating was upgraded from AA to AA+ with a stable outlook, while the "11 Nanjing Steel Bonds" maintained a AAA rating[136]. - The company's cash and cash equivalents increased to RMB 4.843 billion, up from RMB 2.748 billion at the beginning of the period[146]. - The company maintained a loan repayment rate of 100% throughout the reporting period[139]. - The company has not reported any major litigation or arbitration matters during the reporting period[78].

Financial Performance - Net profit attributable to shareholders rose by 83.62% to CNY 1.01 billion year-on-year[6] - Operating revenue grew by 21.90% to CNY 10.37 billion compared to the same period last year[6] - Basic earnings per share increased by 65.01% to CNY 0.2286[6] - Net profit rose by 125.47% year-on-year to 69,087.90 million RMB, primarily due to the increase in total profit[12] - The company's operating revenue for Q1 2018 was CNY 12,478,339,492.68, a 56.9% increase from CNY 7,995,043,207.66 in the same period last year[30] - Net profit for Q1 2018 reached CNY 1,027,830,541.21, up 282.5% from CNY 268,444,000.18 in Q1 2017[30] - The total profit for Q1 2018 was CNY 1,045,393,597.22, a significant rise from CNY 357,298,574.20 in Q1 2017, marking a 193.5% increase[30] - The company reported a total comprehensive income of CNY 1,027,648,381.21 for Q1 2018, compared to CNY 268,444,000.18 in Q1 2017[31] Cash Flow - Net cash flow from operating activities increased by 62.44% to CNY 340.99 million[6] - Cash generated from operating activities increased by 62.44% year-on-year to 13,107.91 million RMB, attributed to the rise in net profit and changes in operating receivables and payables[12] - The cash inflow from operating activities was CNY 8,094,513,160.56, up from CNY 5,967,116,798.79 in the previous year, representing a 35.6% increase[34] - The net cash flow from operating activities for Q1 2018 was ¥340,994,895.65, an increase from ¥209,915,823.66 in the previous period, reflecting a growth of approximately 62.4%[35] - Total cash inflow from operating activities was ¥10,989,095,474.14, slightly down from ¥11,130,470,546.66, indicating a decrease of about 1.3%[36] - The cash outflow for operating activities was ¥10,920,499,049.31, slightly lower than ¥11,123,313,579.43 in the previous period, showing a decrease of approximately 1.8%[36] Assets and Liabilities - Total assets increased by 7.38% to CNY 40.52 billion compared to the end of the previous year[6] - The total assets increased to 40,519.80 million RMB, up from 37,735.44 million RMB at the beginning of the year[20] - The company's total assets as of March 31, 2018, amounted to CNY 30,038,302,909.25, compared to CNY 28,990,679,510.88 at the beginning of the year, indicating a growth of 3.6%[24][25] - The total liabilities increased to CNY 20,128,153,584.35 from CNY 20,108,178,567.19, showing a slight increase of 0.1%[25] - The company's equity attributable to shareholders rose to CNY 9,910,149,324.90, up from CNY 8,882,500,943.69, representing an increase of 11.6%[25] Shareholder Information - The total number of shareholders reached 154,350 at the end of the reporting period[9] - The largest shareholder, Nanjing Nangang Steel Union Co., Ltd., holds 40.72% of the shares[9] Expenses and Costs - Management expenses increased by 52.64% year-on-year to 9,562.48 million RMB, mainly due to rising R&D expenditures and labor costs[12] - Total operating costs for Q1 2018 were CNY 8,971,509,628.68, up from CNY 7,982,778,958.74, reflecting a year-over-year increase of 12.4%[27] - The financial expenses decreased to CNY 79,935,543.08 in Q1 2018 from CNY 160,811,510.47 in Q1 2017, a reduction of 50.3%[30] - The company's sales expenses decreased to CNY 56,974,502.84 from CNY 63,988,400.09, a decline of 10.5%[30] Investment and Development - The company plans to expand its market presence and invest in new product development to enhance competitiveness[12] - The company has implemented a stock option incentive plan for 40 individuals, including directors and key management personnel, to align interests and drive performance[13] Fair Value Changes - The fair value change loss was 11,701.64 million RMB, a decrease of 130.62% year-on-year, due to changes in the fair value of trading financial assets from the previous year[12] - The company experienced a fair value loss of CNY 27,337,820.00 in Q1 2018, compared to a gain of CNY 35,237,459.80 in the same period last year[30] Cash and Cash Equivalents - The company's cash and cash equivalents rose by 82.22% year-on-year to 225,953.71 million RMB, primarily due to the preparation for the repayment of bonds and the maturity of financial products[12] - Cash and cash equivalents increased significantly to CNY 3,073,527,376.83 from CNY 1,598,974,626.28, marking an increase of 92.3%[23] - The total cash and cash equivalents at the end of the period increased to ¥484,344,503.54 from ¥54,473,591.77, marking a substantial rise[37] - The company paid ¥6,241,557.02 in dividends and interest, down from ¥10,656,199.07, indicating a reduction of about 41.5%[37] Accounts Receivable and Inventory - Accounts receivable grew to CNY 3,751,682,163.55 from CNY 2,140,185,284.42, reflecting a substantial increase of 75.3%[23] - Inventory decreased to CNY 1,764,381,332.60 from CNY 2,915,728,712.38, a decline of 39.3%[24]