Financial Performance - The company's operating revenue for the first half of 2020 was CNY 1,014,688,966.38, a decrease of 21.25% compared to CNY 1,288,432,884.75 in the same period last year[20]. - The net profit attributable to shareholders for the first half of 2020 was a loss of CNY 185,358,209.45, showing an improvement of 4.48% from a loss of CNY 194,060,900.56 in the previous year[23]. - The net cash flow from operating activities was a negative CNY 125,653,886.68, a decline of 232.29% compared to a positive cash flow of CNY 94,986,175.31 in the same period last year[23]. - The total assets at the end of the reporting period were CNY 4,912,573,463.12, down 9.31% from CNY 5,417,149,338.46 at the end of the previous year[23]. - The net assets attributable to shareholders decreased by 57.28% to CNY 133,850,397.45 from CNY 313,343,557.56 at the end of the previous year[23]. - The basic earnings per share for the first half of 2020 was -CNY 0.14, a slight improvement from -CNY 0.15 in the same period last year, reflecting a 6.67% increase[24]. - The weighted average return on net assets was -84.00%, an increase of 81.01 percentage points from -165.01% in the previous year[24]. - The company achieved operating revenue of 1.01 billion yuan, a decrease of 21.25% compared to the same period last year, primarily due to project delays caused by the pandemic[43]. - The net profit attributable to shareholders, excluding non-recurring gains and losses, decreased by 52.49% compared to the same period in 2019, primarily due to an increase in non-recurring gains and losses during the reporting period[25]. - The net cash flow from operating activities decreased by 232.29% compared to the same period in 2019, mainly due to reduced sales collections and a decline in overseas security service revenue[25]. - The basic earnings per share, excluding non-recurring gains and losses, decreased by 57.14% compared to the same period in 2019, mainly due to the decline in net profit excluding non-recurring gains and losses[25]. - The company reported a net loss of ¥185,358,209.45 for the period, compared to a net loss of ¥196,315,275.77 in the previous period, indicating an improvement of approximately 4.9%[181]. Revenue Breakdown - The international security comprehensive operation business generated revenue of 746 million yuan, significantly impacted by the pandemic, particularly in cash escort services in Hong Kong and Macau[36]. - The domestic smart city system integration business achieved revenue of 195 million yuan, affected by delays in bidding and construction due to the pandemic[38]. - The domestic smart security product manufacturing business generated revenue of 57 million yuan, with ongoing R&D investments in various security technology fields[42]. Operating Costs and Expenses - In the first half of 2020, operating costs decreased by 18.65% compared to the same period last year, primarily due to project delays caused by the pandemic[44]. - Sales expenses fell by 14.86% year-on-year, mainly due to reduced travel, entertainment, and advertising expenditures during the reporting period[44]. - Management expenses decreased by 7.75% compared to the previous year, attributed to personnel restructuring and cost-saving measures[44]. - Research and development expenses declined by 18.43% year-on-year, primarily due to reduced investment in R&D during the reporting period[44]. Cash Flow and Liquidity - The net cash flow from investment activities decreased by 433.94% year-on-year, primarily due to investments in establishing a joint venture[46]. - The net cash flow from financing activities increased by 265.51% compared to the previous year, mainly due to a reduction in cash used for debt repayment[46]. - As of the end of the reporting period, cash and cash equivalents amounted to ¥447,546,917.45, a decrease of 21.83% from the previous year[47]. - The company reported a total current assets of approximately CNY 2.46 billion as of June 30, 2020, down from CNY 2.93 billion at the end of 2019, representing a decrease of about 16%[163]. - Cash and cash equivalents decreased to approximately CNY 447.55 million from CNY 572.51 million, a decline of about 22%[163]. Debt and Liabilities - The total liabilities of the company as of June 30, 2020, amounted to approximately CNY 4.14 billion, slightly down from CNY 4.22 billion at the end of 2019[166]. - The company’s long-term borrowings increased to approximately CNY 434.78 million from CNY 354.83 million, reflecting a rise of about 22%[166]. - The debt-to-asset ratio increased to 97.28%, reflecting a 3.06% rise compared to the previous year[151]. - The company has signed debt settlement agreements totaling RMB 556,506,000 with bondholders, with RMB 164,000 under Plan A and RMB 556,342,000 under Plan B[99]. - The company is actively working to resolve existing debt issues and plans to accelerate asset sales to improve liquidity and ensure the repayment of the "16 Zhong'anxiao" bonds[158]. Shareholder and Equity Information - The actual controller holds 533,877,223 shares, accounting for 41.61% of the total share capital, with 479,098,000 shares pledged and subject to judicial freezing due to debt defaults[98]. - The company has not proposed any profit distribution or capital reserve increase plans for the half-year period[77]. - The total equity attributable to shareholders dropped from ¥313,343,557.56 to ¥133,850,397.45, a decline of about 57.3%[168]. - The company has committed to ensuring the independence of its operations post-restructuring, covering aspects such as personnel, assets, and finances[80]. Legal and Regulatory Issues - The company is under investigation by the China Securities Regulatory Commission for alleged violations of securities laws, with a total of 876 civil lawsuits related to securities false statements amounting to RMB 412,913,491.9972[121]. - The company is currently facing significant investor lawsuits, which could increase operational costs and negatively impact financial results[74]. - The company has initiated legal proceedings to confirm that the shares held in a special account for profit compensation do not belong to Zhongheng Huizhi, aiming to protect the rights of minority shareholders[88]. Future Outlook and Strategy - The company is focusing on enhancing its competitive edge by integrating system integration and smart manufacturing, while exploring product transformation and upgrades with 5G and AIOT technologies[42]. - The company is actively monitoring the high proportion of pledged and frozen shares held by the controlling shareholder and is urging them to take effective measures to resolve the compensation issues[88]. - The company has made commitments to avoid competition with its own subsidiaries for two years following major asset restructuring[80].

Financial Performance - The company’s operating revenue for 2019 was approximately ¥2.89 billion, a decrease of 20.20% compared to ¥3.63 billion in 2018[22]. - Net profit attributable to shareholders increased by 103.38% to approximately ¥66.86 million, primarily due to increased debt restructuring gains[23]. - The net profit attributable to shareholders after deducting non-recurring gains and losses improved by 87.59%, reaching approximately -¥219.79 million, driven by reduced asset impairment losses[23]. - Operating cash flow net amount increased by 208.69% to approximately ¥144.76 million, attributed to improved cash recovery efforts[23]. - Net assets attributable to shareholders grew by 45.99% to approximately ¥313.34 million, mainly due to debt restructuring gains[23]. - Basic and diluted earnings per share increased by 103.25% to ¥0.05, reflecting the impact of debt restructuring gains[24]. - The weighted average return on equity rose by 195.10% to 26.98%, driven by increased net profit from debt restructuring[27]. - The company achieved an operating revenue of CNY 2.89 billion in 2019, a decrease of 20.20% compared to the previous year[73]. - The net profit attributable to shareholders was CNY 66.86 million, reflecting the company's efforts to maintain operational capability amid challenges[73]. - The company's asset-liability ratio decreased by 2 percentage points compared to the previous year, indicating improved financial stability[67]. Risk Factors - The audit report issued by Dahua Certified Public Accountants was unqualified but included emphasis on significant uncertainties related to going concern[5]. - The company reported significant market, technical, and exchange rate risks in its operations, which are detailed in the report[8]. - The company emphasizes the importance of reading the detailed risk disclosures in the report to understand potential challenges[8]. - The company faces currency exchange risks due to foreign currency transactions in its international operations, which could impact its profitability[140]. - The company may encounter market risks due to intensified competition in its core business areas, which could affect its market share and operational expansion[141]. - The company recognizes technology risks associated with rapid advancements in cloud computing, big data, and artificial intelligence, which could impact its competitive edge if not addressed[144]. - The company is actively working to mitigate debt risks, as it faces significant repayment pressures and potential negative impacts on its operations if not managed effectively[146]. Business Operations - The company operates in the integrated smart systems, security operations, and smart hardware manufacturing sectors, providing comprehensive solutions across various industries[35]. - The company has integrated high-quality project resources from its subsidiaries in mainland China, focusing on three key areas: smart transportation, smart healthcare, and network information security[36]. - The smart transportation segment utilizes IoT, cloud computing, big data, and mobile internet technologies, enhancing traffic management capabilities and improving public safety and convenience[36]. - The smart healthcare solutions include hospital information systems, purification systems, and safety systems, successfully implemented in various hospitals and medical facilities[39]. - The network information security division provides comprehensive solutions for government and financial institutions, utilizing advanced data analysis and threat management systems[39]. - The international business segment focuses on security operations services across regions such as Hong Kong, Macau, Australia, and Thailand, providing logistics and security technology services[45]. - The security logistics business includes armed transport and management of cash and valuables, ensuring safety through stringent operational qualifications and protocols[45]. - The smart hardware manufacturing segment develops IoT sensors and smart home products, maintaining high product quality and establishing partnerships with major brands like Huawei and Vanke[40]. - The company has successfully applied its solutions in various projects, including smart city initiatives and public safety systems, demonstrating its capability in system integration[40]. Corporate Governance - The company did not meet the profit distribution conditions as per its articles of association for the year 2019, and thus proposed no profit distribution or capital reserve transfer to shareholders[6]. - The company has a cash dividend policy that requires positive distributable profits and operating cash flow, with a minimum of 30% of the average distributable profits over the last three years to be distributed as cash dividends[150]. - The company has faced significant litigation risks, including potential investor lawsuits and debt repayment issues, which could increase operational costs and impact financial results[147]. - The company has committed to maintaining the independence of its operations post-restructuring, ensuring no misuse of funds by controlling shareholders[159]. - The company has not proposed any cash profit distribution plans despite having positive profits available for distribution, indicating a focus on reinvestment or other uses of retained earnings[155]. - The company has a history of not distributing dividends for the past three years, reflecting a challenging financial environment[152]. - The company has made commitments to avoid related party transactions that could harm shareholder interests, adhering to market principles and fair pricing[159]. - The company is under investigation by the China Securities Regulatory Commission, which may lead to further financial and operational implications[147]. Research and Development - The company invested CNY 61,206,367.93 in research and development, accounting for 2.11% of total operating income[88]. - The number of R&D personnel is 290, representing 2.29% of the total workforce[91]. - The company has accumulated 248 patents, including 117 invention patents, and has developed multiple proprietary technologies and products[61]. Subsidiaries and Acquisitions - The company has a 100% ownership in several subsidiaries, including Zhong'an Xian Technology Co., Ltd., which reported total assets of approximately RMB 3.65 billion and a net loss of RMB 26.71 million[109]. - The company established several wholly-owned subsidiaries in Shanghai during the reporting period, including Shanghai Anjin Business Management Co., Ltd.[115]. - The company plans to transfer 41.18% equity of Zhong'an Xian Daming Technology Co., Ltd. to Tianfeng Securities after a three-year period following a capital increase of RMB 70 million[115]. - The company acquired 100% of Shanghai Lingxiao Enterprise Development Co., Ltd. for RMB 11,175,750, expanding its business scope to include construction decoration and property management[120]. - The company acquired 100% of Shenzhen Haoting Electronics Co., Ltd. for RMB 1.6 million, enhancing its capabilities in electronic product development and sales[120]. Market Outlook - The global private security service market was approximately $331 billion in 2018, with a projected growth rate of 6% until 2022[57]. - The smart city construction in China has progressed from 7.7% to 80% in cities at the starting and growing stages over two years, indicating significant growth potential[123]. - The company aims to enhance its industry competitiveness and solidify its position in integrated security operations and smart city system integration, focusing on core businesses such as intelligent transportation, smart healthcare, and cybersecurity[129]. - The company plans to deepen its domestic business while exploring international markets, particularly along the "Belt and Road" initiative, maintaining stable growth in international operations despite cash flow challenges[132]. - The company will strengthen its market share in security logistics, security technology, and manpower security, while enhancing operational efficiency through business informationization[133]. - The company is observing the ongoing impact of the pandemic on the security industry, particularly in overseas markets where the situation remains uncertain[128]. Legal and Compliance Issues - The company has ongoing significant litigation and arbitration matters, with details disclosed in multiple announcements throughout 2019[179]. - The company received multiple administrative penalty decisions from the China Securities Regulatory Commission on May 30, 2019[180]. - The company failed to fully repay the "16 Zhong'an Xian" bonds due on November 11, 2019, and is in active communication with bondholders regarding a resolution[182]. - The company has been listed as a dishonest executor due to a loan dispute with Huaxia Bank, but this is not expected to have a significant impact[182].

Financial Performance - The net profit attributable to shareholders was -CNY 109,700,810.87, a decrease of 10.59% compared to -CNY 99,195,559.00 in the same period last year[11]. - Operating revenue declined by 20.07% to CNY 483,727,966.28, mainly due to slow project development impacted by the pandemic[11]. - Total operating revenue decreased by 20.07% to ¥483,727,966.28 compared to ¥605,153,578.14 in the same period last year, primarily due to the impact of the pandemic on business operations[19]. - The company reported a total net profit of 3.7836 million CNY for the years 2015-2017, achieving only 28.86% of the cumulative performance commitment, resulting in a shortfall of 9.3252 million CNY[44]. - The net profit of Thailand Wei'an for the years 2016-2018 was 25.91788 million THB, which is 4.19377 million THB below the cumulative performance commitment, achieving 86.07% of the target[45]. Asset and Liability Changes - Total assets decreased by 4.71% to CNY 5,161,749,433.15 from CNY 5,417,149,338.46 at the end of the previous year[11]. - The company's total assets amounted to 5.1617 billion CNY, a decrease from 5.4171 billion CNY as of December 31, 2019[55]. - The total equity attributable to shareholders decreased from ¥313,343,557.56 to ¥180,140,342.91, representing a decline of about 42.5%[60]. - The total current liabilities increased from ¥2,176,153,093.39 to ¥2,195,212,966.59, reflecting a growth of approximately 0.9%[65]. - The company's current assets totaled 2.6994 billion CNY, down from 2.9317 billion CNY at the end of 2019[55]. Cash Flow and Management - The net cash flow from operating activities decreased by 450.83% to -CNY 225,976,663.50, attributed to reduced sales collections due to the pandemic[11]. - Cash received from sales and services dropped by 27.08% to ¥640,118,936.86 from ¥877,807,740.43, mainly due to decreased sales collections[19]. - The company reported cash inflows from operating activities totaling CNY 658,309,513.26, a decrease of 30.3% compared to CNY 944,087,851.15 in Q1 2019[80]. - The ending balance of cash and cash equivalents was CNY 336,098,262.53, down from CNY 393,636,713.28 at the beginning of the period[84]. - The company is focused on maintaining a strong cash position to support future growth initiatives and potential acquisitions[100]. Shareholder and Equity Information - The total number of shareholders at the end of the reporting period was 70,560, with the largest shareholder holding 41.15% of the shares[12]. - 中恒汇志's major shareholder's shares have been frozen, affecting 98.89% of their holdings, but this has not yet impacted the company's control or operations[23]. - 中恒汇志 committed to compensate for the profit shortfall of 中安消技术有限公司, with a total of 176,751,344 shares required for compensation due to unmet performance targets from 2014 to 2016[41]. - The original shareholders of Shenzhen Keso need to compensate the company with a total cash amount of 36.038 million CNY, of which 2.8602 million CNY has already been compensated, leaving a balance of 33.1778 million CNY[44]. - The original shareholders of Thailand Wei'an are required to provide a cash compensation of 181.0981 million THB to the company[47]. Operational Adjustments and Commitments - The company has engaged a professional institution to conduct asset impairment testing as part of the profit compensation agreement[43]. - 中恒汇志 pledged to avoid competition with 中安消's main business for two years post-major asset restructuring, ensuring no conflicts of interest[33]. - 中恒汇志's commitment to not occupy 中安消技术's funds and to comply with legal regulations was reaffirmed[33]. - The company is actively adjusting its financial statements in accordance with new revenue and leasing standards, which has affected various asset and liability accounts[87]. - The company is actively pursuing legal action to protect the rights of minority shareholders regarding the compensation shares[43].

Financial Performance - Operating revenue decreased by 20.20% year-on-year to approximately ¥2.89 billion, primarily due to the previous year's disposal of investment properties which increased other business income[23]. - Net profit attributable to shareholders increased by 103.38% year-on-year to approximately ¥66.86 million, mainly due to increased gains from debt restructuring[24]. - Net profit attributable to shareholders after deducting non-recurring gains and losses improved by 87.59% year-on-year, driven by increased debt restructuring gains and decreased asset impairment losses[24]. - Net cash flow from operating activities increased by 208.69% year-on-year to approximately ¥144.76 million, attributed to improved cash recovery and reduced cash flow impact from ST[24]. - Net assets attributable to shareholders increased by 45.99% year-on-year to approximately ¥313.34 million, primarily due to gains from debt restructuring[24]. - Basic and diluted earnings per share increased by 103.25% year-on-year to ¥0.05, mainly due to increased gains from debt restructuring[28]. - Weighted average return on equity increased by 195.10 percentage points to 26.98%, driven by increased net profit from debt restructuring[28]. - The company’s total assets amounted to CNY 5.42 billion, with net assets of CNY 313.34 million[72]. - The company's debt ratio decreased by 2 percentage points compared to the previous year, indicating improved financial stability[72]. Business Operations - The company operates in the integrated smart systems, security operations, and smart hardware manufacturing sectors, providing comprehensive solutions across various industries including finance, healthcare, and transportation[37]. - The company has integrated quality project resources from its subsidiaries in mainland China, focusing on three key areas: smart transportation, smart healthcare, and network information security[38]. - The smart transportation segment utilizes IoT, cloud computing, and big data technologies, successfully implemented in projects such as the Jinsha Bus Hub and Chengdu South Railway Station[38]. - The smart healthcare solutions include hospital information systems and safety systems, applied in projects like the Hong Kong Chinese University and Shaoyang Central Hospital[39]. - The network information security segment provides comprehensive solutions for institutions like government and banks, with successful applications in projects such as the "Smart Lanshan" cloud computing center[41]. - The company has established a strong international presence, providing security services in regions like Hong Kong, Macau, Australia, and Thailand, enhancing its strategic layout in the security industry[43]. - The international business includes cash management and logistics services, utilizing over 130 armored vehicles and 600 protective firearms for secure transportation[47]. - The company’s security technology services offer customized solutions, including electronic security systems and CCTV monitoring, leveraging its advanced capabilities in system integration[47]. - The smart hardware manufacturing segment focuses on IoT sensors and smart home products, maintaining high product quality and collaborating with renowned brands like Huawei[42]. Risk Management - The company reported major risks including market, technology, and exchange rate risks, which are detailed in the operational discussion section[10]. - The company emphasizes the importance of reading the detailed risk disclosures in the report[9]. - The company faces risks including exchange rate fluctuations, market competition, and potential litigation due to its significant debt levels[134][141]. Shareholder and Governance - The company did not meet the profit distribution conditions for 2019 and proposed no profit distribution or capital reserve transfer to shareholders[8]. - The company has established a cash dividend policy, stating that the cumulative cash distribution over the last three years should not be less than 30% of the average distributable profit for those years, provided certain conditions are met[145]. - The company has committed to maintaining the continuity and stability of its profit distribution policy, with specific conditions outlined for cash distribution[145]. - The company has not executed any cash dividend measures in 2019 due to previous losses and the need for operational development[145]. - The company’s actual control and shareholder commitments include avoiding competition with its main business for two years post-major asset restructuring[153]. - The company has committed to ensuring independence in personnel, assets, finance, and operations following the completion of its restructuring[153]. - The controlling shareholder, Zhongheng Huizhi, voluntarily extended the lock-up period for its shares multiple times, with the latest extension set to end on December 31, 2020, covering a total of 527,977,838 shares[156]. Subsidiaries and Investments - The company has developed 248 patent technologies, including 117 invention patents, 77 utility model patents, and 54 design patents as of December 31, 2019[58]. - The company has established a new subsidiary, Shenzhen Haon IoT Technology Co., Ltd., with a registered capital of ¥5 million, holding 100% ownership[110]. - The company completed a capital increase of ¥70 million for its subsidiary Zhong'an Xiaodaming Technology Co., Ltd., raising its registered capital to ¥170 million[109]. - The company has ongoing rental agreements with various entities, generating rental income of 57,609.96 RMB and 16,170.84 RMB from different properties[185]. Future Outlook - The company aims to enhance its competitive edge in security operations and smart city system integration[123]. - The company plans to focus on smart transportation, smart healthcare, and cybersecurity in the domestic market[123]. - The company is committed to becoming a global leader in security operations and smart city system integration[123]. - The company plans to strengthen internal growth and deepen its main business, focusing on international market expansion and maintaining brand influence in Hong Kong, Macau, and Thailand[126]. - The company aims to enhance its market share in human security, security technology, and security logistics, while accelerating the electronic management of international business[127]. Audit and Compliance - The audit report issued by Dahua Certified Public Accountants was unqualified but included emphasis on significant uncertainties related to going concern[7]. - The company retained Da Hua Accounting Firm for the 2019 financial audit, with a fee of 1.6 million RMB, ensuring continuity in audit services[168]. - The internal control audit will also be conducted by Da Hua Accounting Firm, with a fee of 1 million RMB[168]. - The company has been penalized by the China Securities Regulatory Commission, receiving multiple administrative penalty decisions[174].

Financial Performance - Net profit attributable to shareholders of the listed company was CNY -288,184,466.85, a decrease of 167.09% from CNY -107,896,701.27 in the same period last year[19]. - Basic earnings per share for the period were CNY -0.22, a decline of 175.00% compared to CNY -0.08 in the previous year[19]. - The weighted average return on net assets was -408.51%, a decrease of 403.41% from -5.10% in the same period last year[19]. - Net cash flow from operating activities for the year-to-date was CNY 22,831,358.43, down 92.18% from CNY 291,834,180.62 in the same period last year[19]. - Operating revenue for the year-to-date was CNY 1,929,077,368.48, a decline of 33.78% compared to CNY 2,913,042,606.17 in the previous year[19]. - The company's net loss attributable to shareholders reached ¥-96,947,183.88, compared to a profit of ¥214,638,351.44 in the previous year[72]. - The net profit for the first three quarters of 2019 was CNY -221,393,076.43, compared to a profit of CNY 31,410,021.74 in the same period of 2018[79]. - The total comprehensive income for Q3 2019 was a loss of ¥63,135,919.65, compared to a gain of ¥33,022,575.31 in Q3 2018[88]. Assets and Liabilities - Total assets at the end of the reporting period were CNY 5,539,560,489.55, a decrease of 1.12% compared to the end of the previous year[17]. - Total liabilities increased to ¥5,549,138,393.70 from ¥5,387,388,388.40, marking an increase of approximately 3%[72]. - The total equity attributable to shareholders was negative at ¥-2,569,382,725.34, compared to ¥-2,281,198,258.49 in the previous year, indicating a worsening financial position[72]. - The company's current assets totaled ¥2,653,811,941.90, down from ¥2,716,994,241.99 in the previous year, indicating a decline of approximately 2.3%[67]. - Total current liabilities were ¥4,948,520,268.52, an increase from ¥4,789,158,839.73, reflecting a growth of approximately 3.3%[72]. - Total current assets amounted to ¥2,716,994,241.99, remaining unchanged from the previous period[111]. - Total non-current assets were ¥2,885,032,497.85, consistent with the prior reporting period[114]. Cash Flow - Cash received from operating activities decreased by 79.79% to ¥208,648,238.06 from ¥1,032,316,588.62, primarily due to reduced turnover funds[26]. - The total cash inflow from operating activities for the first three quarters of 2019 was CNY 2,448,396,379.16, a decrease of 26% compared to CNY 3,309,553,563.02 in the same period of 2018[100]. - The cash outflow from investing activities in the first three quarters of 2019 was CNY 298,543,587.26, compared to CNY 456,942,278.33 in the same period of 2018[102]. - The net cash flow from financing activities for the first three quarters of 2019 was CNY 34,597,511.18, a recovery from a negative cash flow of CNY -1,090,282,561.79 in the previous year[102]. - The total cash and cash equivalents at the end of the period were CNY 303,103,359.19, an increase from CNY 256,095,222.20 at the end of the same period in 2018[102]. Shareholder Information - The total number of shareholders at the end of the reporting period was 77,732, with the largest shareholder holding 41.15% of the shares[21]. - The actual controller and his concerted actors held a total of 533,877,223 shares, accounting for 41.61% of the total share capital[23]. - The controlling shareholder's shares have been judicially frozen, affecting 98.89% of their holdings, but this has not impacted the company's control or operations[29]. - The total number of shares to be compensated by Zhongheng Huizhi due to unfulfilled profit commitments is 176,751,344 shares, which are currently frozen due to legal issues[51]. Operational Changes and Commitments - The company has committed to reducing and regulating related party transactions, ensuring fair pricing and compliance with legal obligations[44]. - The company is under a commitment to avoid competition with its controlling shareholders for two years post-major asset restructuring[44]. - The company has decided to abandon plans to integrate Shanghai Wei'an and its subsidiaries into the listed company structure to avoid competition[55]. - The company has committed to ensuring the independence of its operations post-restructuring, including personnel and financial aspects[49]. Investment and Subsidiaries - The company established two new subsidiaries, Shanghai Ling'an Technology Development Co., Ltd. and Shanghai Linghai Technology Development Co., Ltd., each with an investment of RMB 1 million[41]. - The company reported a cumulative purchase amount of RMB 2.574 million from Shenzhen Haon Safety Technology Co., Ltd. during Q3 2019[39]. - The company has a long-term investment in equity amounting to ¥5,238,514,395.37, indicating a strong investment strategy[120].

Financial Performance - The company's operating revenue for the first half of 2019 was CNY 1,288,432,884.75, a decrease of 40.75% compared to CNY 2,174,678,852.45 in the same period last year[21]. - The net profit attributable to shareholders of the listed company was a loss of CNY 194,060,900.56, compared to a loss of CNY 96,156,025.70 in the same period last year, representing a decline of 101.82%[21]. - The net cash flow from operating activities was CNY 94,986,175.31, down 77.74% from CNY 426,799,003.72 in the previous year[23]. - The basic earnings per share for the first half of 2019 were CNY -0.15, compared to CNY -0.07 in the same period last year, reflecting a decline of 114.29%[23]. - The weighted average return on net assets was -165.01%, a decrease of 160.48 percentage points compared to -4.53% in the previous year[23]. - The company reported a net profit of CNY -93,085,309.39 after deducting non-recurring gains and losses, which is an improvement of 30.40% compared to CNY -133,739,223.48 in the same period last year[23]. - The company's revenue for the first half of 2019 was 1.288 billion yuan, with a net profit of -194 million yuan, impacted by liquidity shortages and other adverse factors[36]. Assets and Liabilities - The total assets at the end of the reporting period were CNY 5,552,277,809.16, a decrease of 0.89% from CNY 5,602,026,739.84 at the end of the previous year[23]. - The net assets attributable to shareholders of the listed company were CNY -33,984,465.25, a decrease of 115.83% from CNY 214,638,351.44 at the end of the previous year[23]. - Total liabilities increased to ¥5,498,719,793.65 from ¥5,387,388,388.40, marking an increase of approximately 2.0%[179]. - The company's total assets decreased to ¥5,552,277,809.16 from ¥5,602,026,739.84, reflecting a decline of about 0.9%[179]. Operational Challenges - The company faces significant debt risk, with overdue loans and bond principal amounts being high, leading to substantial repayment pressure[70]. - The company has been under a delisting risk warning due to consecutive losses in 2017 and 2018, and if the net profit for 2019 remains negative, the stock may be suspended from trading[71]. - The company has acknowledged potential risks related to exchange rate fluctuations, which could affect export pricing competitiveness and lead to direct foreign exchange gains or losses[68]. - The company has a significant risk of litigation due to ongoing investigations and potential investor lawsuits, which could increase operational costs[70]. - The company has a risk of operational challenges due to large capital investments and long project cycles in its smart city system integration business[68]. Revenue Streams - The domestic smart city system integration business generated revenue of 301 million yuan during the reporting period, focusing on core areas such as smart healthcare and intelligent transportation[36]. - The international security comprehensive operation business achieved revenue of 896 million yuan, with efforts to enhance electronic security research and development[38]. - The domestic smart security product manufacturing business reported revenue of 76 million yuan, with a focus on high-quality product development and market expansion in the IoT sector[40]. Risk Management and Compliance - The company has detailed the potential risks in the report, urging investors to pay attention to investment risks[8]. - The company is actively working on measures to mitigate debt risks through various strategies[69]. - The company is under investigation by the China Securities Regulatory Commission for suspected violations of securities laws[117]. - The company has received a total of 135 civil litigation notifications from the Shanghai Financial Court, with a total claim amount of RMB 158,057,554.94 related to securities false statement liability disputes[121]. Corporate Governance - The company has committed to reducing and standardizing related party transactions to protect the interests of shareholders[78]. - The company has committed to ensure the independence of the listed company in terms of personnel, assets, finance, organization, and business after the completion of the restructuring[80]. - The company has decided to abandon plans to include certain subsidiaries in the listed company structure to avoid potential competition issues[89]. - The company plans to expand its board from 7 to 9 members, including 6 non-independent directors and 3 independent directors[136]. Future Outlook - Future outlook indicates a cautious approach due to market conditions and potential economic challenges[195]. - The company is focusing on enhancing its financial performance through cost management and operational efficiency[195]. - The company is exploring new product development and market expansion strategies to drive growth[195].

Financial Performance - Operating revenue for 2018 increased by 22.14% year-on-year, primarily due to increased income from the disposal of investment properties[27]. - Net profit attributable to shareholders of the listed company decreased by 169.47% year-on-year, mainly due to increased asset impairment losses and rising operational costs[28]. - Net profit attributable to shareholders after deducting non-recurring gains and losses decreased by 147.85% year-on-year, primarily due to increased asset impairment losses[28]. - Net cash flow from operating activities increased by 114.20% year-on-year, mainly due to cost control and reduced transactions[31]. - Net assets attributable to shareholders decreased by 90.10% year-on-year, primarily due to increased asset impairment losses[31]. - Total assets decreased by 39.44% year-on-year, mainly due to reduced bank loans and significant impairment provisions for goodwill and inventory[31]. - Basic and diluted earnings per share decreased by 170.18% year-on-year, primarily due to increased asset impairment losses[32]. - Weighted average return on equity decreased by 139.18% year-on-year, mainly due to the decline in net profit[33]. - The company reported a net profit of -1,872,775,274.30 yuan in Q4 2018, indicating a substantial loss in the final quarter[36]. - The company achieved a revenue of 3.626 billion RMB in 2018, with a net profit attributable to shareholders of -1.981 billion RMB, indicating a continuous loss due to liquidity shortages and other adverse factors[86]. Audit and Compliance - The company received an unqualified audit report from Dahua Certified Public Accountants, with emphasis on certain matters related to going concern[5]. - The company’s financial report is guaranteed to be true, accurate, and complete by the responsible persons including the CEO and accounting head[4]. - The board of directors proposed no profit distribution for the year 2018 due to not meeting the conditions outlined in the company's articles of association[6]. - The company has a cash dividend policy that requires positive distributable profits and operating cash flow, which it did not meet in recent years[175]. Risks and Challenges - The company reported significant market risks, technical risks, and exchange rate risks that could impact future operations[8]. - The company faces exchange rate risks due to foreign currency settlements by its subsidiaries, which could impact export pricing and profitability[163]. - Market competition is intensifying, posing risks to the company's business and services despite its competitive advantages[164]. - The company operates in a technology-intensive industry, and any misjudgment in market trends or R&D directions could affect its competitiveness[165]. - The company has experienced consecutive losses in 2017 and 2018, which may lead to a delisting risk if the net profit remains negative in 2019[168]. Strategic Focus and Business Development - The company is transitioning its strategy from "external mergers and acquisitions" to "internal development," focusing on three major divisions: Intelligent Transportation, Smart Healthcare, and Cybersecurity[43]. - The company plans to enhance its technological innovation and expand its business scope, particularly in electronic security and logistics services[88]. - The company aims to explore strategic partnerships with major platform enterprises to expand its business scale in the IoT sector[112]. - The company is focusing on transforming its business model from a labor-oriented service to a technology and service integration model in the security sector[88]. - The company aims to enhance its competitive edge in integrated security services and smart city systems, focusing on smart transportation, healthcare, and cybersecurity domestically[149]. Asset Management and Financial Health - The company has a strong asset base, with overseas assets amounting to approximately 4.046 billion RMB, representing 72.23% of total assets[78]. - The company has established a comprehensive quality management system to ensure project quality, enhancing its competitive advantage in the system integration sector[79]. - The company is actively maintaining existing financing collaborations while exploring new financing channels to meet the funding needs for business growth and mitigate debt risks[160]. - The company is focusing on enhancing cash flow by intensifying the collection of accounts receivable and addressing abnormal projects through various recovery methods[160]. Subsidiaries and Investments - The company’s subsidiaries provide security technology services, with the Australian subsidiary operating a 365-day monitoring center, serving over 14,000 commercial and residential units[66]. - The company established a new subsidiary, Zhong An Xian (Suzhou) Technology Co., Ltd., with an investment of RMB 90 million in April 2018[142]. - The total assets of Zhong An Xian International Holdings Limited reached RMB 1.61 billion, with a net profit of -RMB 57 million[139]. - The company’s subsidiary, Shenzhen Haoen Security Technology Co., Ltd., reported total assets of RMB 217.78 million and a net profit of -RMB 5.96 million[137]. Legal and Regulatory Matters - The company has a compensation obligation for the net profit of the acquired assets, with specific amounts outlined for different periods[186]. - The company has faced challenges in fulfilling profit forecasts, leading to the freezing of shares intended for compensation due to legal issues[186]. - The controlling shareholder committed to reducing and standardizing related party transactions, adhering to fair pricing principles[181]. - The company promised to avoid competition with its own business for two years post-major asset restructuring, ensuring compliance with market regulations[181].

Financial Performance - Operating revenue for 2018 was CNY 3,626,490,672.52, an increase of 22.14% compared to CNY 2,969,164,707.63 in 2017[29]. - Net profit attributable to shareholders decreased by 169.47% to CNY -1,980,671,975.57, primarily due to increased asset impairment losses and rising operational costs[30]. - Net cash flow from operating activities increased by 114.20% to CNY 46,894,725.98, attributed to cost control and reduced transactions[33]. - Total assets decreased by 39.44% to CNY 5,602,026,739.84, mainly due to reduced bank loans and significant impairment provisions[33]. - Basic and diluted earnings per share fell by 170.18% to CNY -1.54, reflecting increased asset impairment losses[34]. - The weighted average return on equity dropped by 139.18% to -168.12%, driven by the decline in net profit[35]. - The net assets attributable to shareholders decreased by 90.10% to CNY 214,638,351.44, primarily due to increased asset impairment losses[33]. - The company reported a net profit of CNY -1,872,775,274.30 in Q4 2018, significantly impacting annual results[38]. - Non-recurring gains and losses totaled CNY -208,877,986.57 for 2018, with significant contributions from asset impairment provisions[41]. - The company achieved a revenue of 3.626 billion RMB in 2018, with a net profit attributable to shareholders of -1.981 billion RMB, indicating a challenging financial year due to liquidity issues and regulatory investigations[89]. Audit and Compliance - The audit report issued by Dahua Certified Public Accountants was unqualified but included emphasis on matters related to going concern[7]. - The company has appointed Dahua Certified Public Accountants as its auditing firm for the reporting period[25]. - The company is under investigation by the China Securities Regulatory Commission, which may lead to administrative penalties and potential investor lawsuits[153]. - The company has not yet received a conclusion notice from the regulatory authority regarding its investigation status[153]. - The company received administrative penalties and market entry bans from the China Securities Regulatory Commission (CSRC) in 2018 and 2019, with ongoing procedures for appeals[197][198]. - The controlling shareholder received administrative regulatory measures from the Shanghai Securities Regulatory Bureau, requiring corrective actions to be reported by July 31, 2018[198]. Business Strategy and Operations - The company is transitioning its strategy from "external mergers and acquisitions" to "internal development," focusing on core business areas through the establishment of three major divisions: Intelligent Transportation, Smart Healthcare, and Cybersecurity[45]. - The Intelligent Transportation division integrates technologies such as IoT and big data to enhance traffic management, with successful applications in various projects including the Chengdu Public Transport Upgrade[45]. - The Smart Healthcare division aims to create a comprehensive solution for modern medical environments, successfully implemented in projects like the Hong Kong University Shenzhen Hospital[46]. - The Cybersecurity division provides solutions for government and financial institutions, enhancing digital security through advanced data analysis and threat management systems[49]. - The company aims to enhance its competitive edge by deepening its core businesses in security operations and smart city integration, while also expanding into intelligent transportation, smart healthcare, and cybersecurity[136]. - The company plans to strengthen its overseas market presence, particularly in human security, security technology, and logistics, while also exploring new business opportunities[139]. - The company is committed to optimizing resource allocation and compliance management to improve operational efficiency and enhance collaboration among subsidiaries[143]. Market and Industry Trends - The global private security services market was approximately 331 billion USD in 2018, with a projected growth rate of 6% annually until 2022[75]. - The smart city market in China is expected to exceed 10 trillion RMB in 2019 and reach 25 trillion RMB by 2022, driven by advancements in IoT and cloud computing[74]. - The global security services market is expected to reach $167.12 billion by 2025, driven by the increasing adoption of high-quality security systems utilizing IoT and AI technologies[135]. - In 2018, China released 11 standards for smart city construction, indicating a rapid advancement in the sector, with the company focusing on integrating resources across regions in China[134]. Risks and Challenges - The company faced various risks including market, technology, and exchange rate risks, which are detailed in the report[10]. - The company faces exchange rate risks due to foreign currency settlements in its overseas operations, which could impact its profitability[149]. - Market competition is intensifying, posing challenges to the company's business and service offerings despite its competitive advantages[150]. - The company recognizes the risk of technological advancements outpacing its R&D capabilities, which could affect its market competitiveness[151]. - The company faced operational risks due to significant investments in smart city system integration, long project cycles, and complex risk categories, which may be affected by macro policies and liquidity issues[152]. Shareholder and Debt Issues - The company did not meet the profit distribution conditions as per its articles of association for the year 2018, and thus proposed no profit distribution or capital reserve transfer to shareholders[8]. - The cash dividend policy requires positive distributable profits and operating cash flow, with a minimum of 30% of the average distributable profits over the last three years to be distributed in cash[160]. - The company has not distributed dividends for 2017 and 2018 due to losses, with a net profit of -¥735 million in 2017 and -¥1.98 billion in 2018[161]. - The company has a significant debt scale, which poses risks of creditor lawsuits if it fails to meet repayment obligations[153]. - The company’s stock is under delisting risk due to consecutive losses in 2017 and 2018, with a warning of potential suspension if 2019 results remain negative[156]. - As of the end of the reporting period, the company has overdue loans and bond principal totaling 1,250 million yuan[200]. - The company issued bonds amounting to 1.1 billion yuan in 2016, but has announced an inability to fulfill early repayment obligations due to significant amounts involved[199]. Research and Development - The company is actively involved in product research and development, focusing on IoT sensors and smart home products, contributing to the establishment of national safety standards[52]. - The company holds 232 patents, including 111 invention patents, and has developed a production capacity of over 10 million units annually across its manufacturing subsidiaries[82]. - R&D expenses totaled ¥64,136,952.37, accounting for 1.77% of operating revenue[111]. Legal Matters - The company has ongoing litigation matters, including disputes related to Tianjin Zhongqichuang equity transfer and various engineering contract disputes[192]. - The company is actively pursuing cash compensation from original shareholders of subsidiaries that did not meet performance commitments[179]. - The company is conducting asset impairment testing to determine the final number of shares Zhongheng Huizhi must compensate based on the results[175].

Financial Performance - The net assets attributable to shareholders decreased by 70.40% compared to the end of the previous year, primarily due to losses in net profit and an increase in minority shareholders' equity[11]. - Operating revenue for the current period was 605,153,578.14 RMB, a decrease of 60.34% compared to 1,525,752,742.68 RMB in the same period last year[11]. - The net profit attributable to shareholders was -99,195,559.00 RMB, representing a decline of 72.01% compared to -57,669,419.56 RMB in the previous year[11]. - The weighted average return on net assets decreased by 57.40 percentage points to -60.10% from -2.70% in the same period last year[11]. - The basic and diluted earnings per share were both -0.08 RMB, a decrease of 0.04 RMB compared to -0.04 RMB in the previous year[11]. - The total comprehensive loss for Q1 2019 was CNY -131,052,982.68, compared to CNY -68,337,167.82 in Q1 2018, reflecting an increase in overall losses[78]. - The net loss attributable to the parent company for Q1 2019 was CNY -99,318,269.59, compared to a net loss of CNY -57,669,419.56 in the same period last year, indicating a deterioration in performance[78]. Cash Flow - The net cash flow from operating activities increased by 26,357.22% to 64,412,671.97 RMB, compared to -245,314.16 RMB in the same period last year[11]. - Cash inflows from operating activities for Q1 2019 totaled CNY 944,087,851.15, slightly down from CNY 967,133,110.64 in Q1 2018[87]. - The net cash flow from financing activities was -61,636,847.93 RMB, compared to -668,295,920.37 RMB in the previous period, indicating a reduction in cash outflow[91]. - Total cash inflow from operating activities was 232,421,836.64 RMB, while cash outflow was 204,557,869.09 RMB, resulting in a net cash flow of 27,863,967.55 RMB[95]. Shareholder Information - The total number of shareholders at the end of the reporting period was 85,712[14]. - The largest shareholder, Shenzhen Zhongheng Huizhi Investment Co., Ltd., held 41.15% of the shares, totaling 527,977,838 shares, which are currently frozen[14]. - The total amount of frozen shares held by the controlling shareholder reached 527,977,838 shares, accounting for 41.15% of the total share capital[26]. - The company plans to distribute a total of 176,751,344 shares as compensation to shareholders based on their holdings, excluding shares held by Zhongheng Huizhi due to restructuring[30]. Assets and Liabilities - The company reported a total asset value of 5,526,640,430.98 RMB, a decrease of 1.35% from 5,602,026,739.84 RMB at the end of the previous year[11]. - Total liabilities as of March 31, 2019, were CNY 5,373,177,772.81, slightly down from CNY 5,387,388,388.40 at the end of 2018[65]. - The company's total equity decreased to CNY 153,462,658.17 as of March 31, 2019, from CNY 214,638,351.44 at the end of 2018[65]. - The company reported an accumulated loss of CNY 2,380,639,238.67 as of March 31, 2019, compared to a loss of CNY 2,281,198,258.49 at the end of 2018[65]. Investment and Financing Activities - The company received cash from minority shareholders' capital increase amounting to ¥70,000,000.00, marking a 100% increase[20]. - The company has proposed to increase the total guarantee amount to no more than HKD 660 million to optimize its financing structure[36]. - A financing application of HKD 420 million has been submitted to a Singapore bank, with various subsidiaries providing guarantees and collateral for the financing[36]. - The company paid 50,713,294.98 RMB in debt repayment during the financing activities[91]. Legal and Compliance Matters - The company has filed a civil lawsuit to confirm that the shares held in a special account for compensation do not belong to Zhongheng Huizhi, but to the registered shareholders[31]. - The company is committed to reducing and regulating related party transactions to ensure fair operation and compliance with legal regulations[39]. - The company has ensured compliance with laws and regulations, committing not to occupy funds from Zhonganxiaojishu Co., Ltd.[39]. - The company is actively monitoring the situation regarding the freezing of shares held by the controlling shareholder and is taking measures to ensure compliance with compensation obligations[49]. Research and Development - Research and development expenses increased by 39.18% to ¥14,654,084.43 due to increased investment by the company's subsidiaries[20]. - Research and development expenses for Q1 2019 were ¥14,654,084.43, an increase from ¥10,529,150.44 in Q1 2018, indicating a focus on innovation[76].

Financial Performance - Operating revenue increased by 38.35% to CNY 2,913,042,606.17 for the period from January to September[6] - Net profit attributable to shareholders was a loss of CNY 107,896,701.27, an improvement of 23.41% compared to the previous year[6] - Basic earnings per share improved by 27.27% to -0.08 CNY[6] - The company reported a net loss of ¥408,422,984.19, a 35.90% increase in losses compared to the previous year[12] - Total operating revenue for Q3 2018 was ¥738,363,753.72, a decrease of 3.1% compared to ¥768,601,109.27 in Q3 2017[40] - The total profit (loss) for the first nine months of 2018 was -¥82,052,686.96, an improvement from -¥104,202,544.37 in the same period last year[46] - The net profit (loss) for Q3 2018 was -¥10,577,699.68, compared to -¥35,654,084.82 in the same quarter last year, indicating a significant reduction in losses[46] Cash Flow - Net cash flow from operating activities surged by 2,738.11% to CNY 291,834,180.62 due to the recovery of funds from Beijing Qichuang[7] - The cash flow from operating activities increased by 479.15% to ¥1,032,316,588.62, mainly from the recovery of funds[13] - Total cash inflow from operating activities reached ¥3,309,553,563.02, while cash outflow was ¥3,017,719,382.40, resulting in a net cash inflow of ¥291,834,180.62[49] - The net cash flow from financing activities was -¥1,090,282,561.79, indicating a cash outflow primarily due to debt repayments and other financing activities[50] Assets and Liabilities - Total assets decreased by 20.28% to CNY 7,374,233,453.65 compared to the end of the previous year[6] - Cash and cash equivalents decreased by 57.90% to ¥569,390,109.81 due to increased debt repayment and project investment cycles[12] - The company's total liabilities decreased to CNY 5,245,015,721.87 from CNY 7,081,908,511.16, indicating a decrease of around 26%[35] - The company's short-term borrowings decreased significantly to CNY 1,167,979,842.22 from CNY 2,372,405,484.97, a reduction of about 50.8%[34] Shareholder Information - The company had a total of 91,695 shareholders at the end of the reporting period[9] - The largest shareholder, Shenzhen Zhongheng Huizhi Investment Co., Ltd., held 41.15% of the shares, which are currently frozen[9] - 98.89% of the shares held by the controlling shareholder are frozen, which poses a risk of further freezing or disposal due to litigation[19] - The actual controller, Mr. Tu Guoshen, and his concerted actors hold a total of 533,877,223 shares, accounting for 41.61% of the total share capital[18] Regulatory and Compliance Issues - The company is under investigation by the China Securities Regulatory Commission for alleged violations of securities laws[16] - The company has not fulfilled its share compensation obligations as per the performance commitment, leading to uncertainty regarding the implementation of the compensation[19] - The company has committed to not transferring or entrusting the management of shares for 36 months following the end of the cash subscription transaction[23] Operational Changes - The company has undergone a board restructuring, reducing the number of board members from 9 to 7[14] - The company has decided to abandon plans to incorporate Shanghai Weida and its subsidiaries into the listed company structure to avoid potential competition[28] - The company guarantees that after the restructuring, it will maintain independence in personnel, assets, finance, and business[23]