[Important Notice](index=3&type=section&id=Item%20I.%20Important%20Notice) The company's management guarantees the truthfulness, accuracy, and completeness of this quarterly report, which has been reviewed by all directors, though financial statements remain unaudited [Report Authenticity and Audit Status](index=3&type=section&id=1.1-1.4) The company's management assures the accuracy and completeness of the quarterly report, which is approved by the board but unaudited - The company's Board of Directors, Supervisory Board, and senior management ensure the truthfulness, accuracy, and completeness of the Q1 2014 report, free from false records, misleading statements, or major omissions[4](index=4&type=chunk) - Company head Chen Liang, chief accountant Zhang Yongliang, and head of accounting department Zhu Yuanping guarantee the truthfulness, accuracy, and completeness of the financial statements[6](index=6&type=chunk) - The financial statements in the company's Q1 2014 report are unaudited[7](index=7&type=chunk) [Company's Key Financial Data and Shareholder Changes](index=4&type=section&id=Item%20II.%20Company's%20Key%20Financial%20Data%20and%20Shareholder%20Changes) The company's first-quarter revenue decreased, net profit was a loss, and cash flow from operations turned negative, while shareholder structure remained stable with the largest shareholder's significant stake pledged [Key Financial Data](index=4&type=section&id=2.1%20Key%20Financial%20Data) In Q1 2014, the company's operating revenue decreased by 16.20% year-over-year, with net loss attributable to shareholders widening, and operating cash flow turning significantly negative Key Financial Data for Q1 2014 | Metric | Current Period (2014 Q1) | Prior Period (2013 Q1) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue (million USD) | 756.47 | 902.72 | -16.20% | | Net Profit Attributable to Shareholders (million USD) | -10.64 | -9.42 | N/A | | Net Profit Attributable to Shareholders (Excl. Non-recurring Items) (million USD) | -17.84 | -9.19 | N/A | | Net Cash Flow from Operating Activities (million USD) | -333.69 | 78.54 | -524.87% | | Basic Earnings Per Share (USD/share) | -0.0198 | -0.0175 | N/A | | Weighted Average ROE (%) | -1.3645% | -1.2257% | decreased by 0.1388 percentage points | | **Balance Sheet Items** | **End of Current Period** | **End of Prior Year** | **Change (%)** | | Total Assets (billion USD) | 6.85 | 7.02 | -2.41% | | Net Assets Attributable to Shareholders (million USD) | 772.65 | 785.08 | -1.58% | Non-recurring Gains and Losses for Q1 2014 | Item | Amount (million USD) | Description | | :--- | :--- | :--- | | Gains/Losses on Disposal of Non-current Assets | 6.54 | Gains/losses on disposal of fixed assets, intangible assets | | Government Grants Recognized in Current Profit/Loss | 3.00 | - | | Net Other Non-operating Income/Expenses | 0.06 | - | | Income Tax Impact | -2.40 | - | | Impact on Minority Interests (After Tax) | 0.0002 | - | | **Total** | **7.20** | - | [Shareholder Information](index=5&type=section&id=2.2%20Shareholder%20Count%2C%20Top%20Ten%20Shareholders%2C%20and%20Top%20Ten%20Shareholders%20with%20Unrestricted%20Shares%20as%20of%20Report%20Period%20End) As of the reporting period end, the company had 58,486 shareholders, with the largest shareholder, Heilongjiang Construction Group Co., Ltd., holding 33.34% of shares, approximately half of which are pledged - As of the end of the reporting period, the company had a total of **58,486 shareholders**[13](index=13&type=chunk) Top Ten Shareholder Holdings | Shareholder Name | Shareholder Type | Shareholding Percentage (%) | Total Shares Held | | :--- | :--- | :--- | :--- | | Heilongjiang Construction Group Co., Ltd. | State-owned | 33.34 | 178,979,763 | | Heilongjiang Provincial Investment Co., Ltd. | State-owned | 1.30 | 6,988,246 | | China FAW Group Co., Ltd. | State-owned Legal Entity | 0.45 | 2,420,000 | | Hong Jinhan | Domestic Individual | 0.39 | 2,105,400 | | Ge Tao | Unknown | 0.33 | 1,769,014 | - The largest shareholder, Heilongjiang Construction Group Co., Ltd., pledged **89,489,881 shares** of its holdings[13](index=13&type=chunk) [Significant Matters](index=6&type=section&id=Item%20III.%20Significant%20Matters) The company experienced significant changes in key financial statement items, including a substantial decrease in cash and an increase in prepayments, alongside updates on major investment matters [Analysis of Significant Changes in Key Financial Statement Items](index=6&type=section&id=3.1%20Significant%20Changes%20and%20Reasons%20for%20Key%20Financial%20Statement%20Items%20and%20Financial%20Indicators) This quarter saw major shifts in financial items: cash decreased significantly due to payments, prepayments increased from new projects, and operating cash flow sharply declined, while investing cash flow rose from asset disposals and financing cash flow fell due to reduced borrowing - Cash and cash equivalents decreased by **39.85%** from the end of the prior year, primarily due to increased payments for winter material procurement and various repayments[14](index=14&type=chunk)[15](index=15&type=chunk) - Prepayments increased by **41.01%** from the end of the prior year, mainly due to more new projects and increased advance payments for materials and mobilization from owners[14](index=14&type=chunk)[16](index=16&type=chunk) - Non-operating income surged by **20123.31%** year-over-year, primarily from **6.20 million USD** in net land compensation gains and **3.00 million USD** in government special fund subsidies[15](index=15&type=chunk)[16](index=16&type=chunk) - Net cash flow from operating activities decreased by **524.87%** year-over-year, mainly due to large repayments received in the prior period and increased payments for deposits in the current period[14](index=14&type=chunk)[17](index=17&type=chunk) - Net cash flow from investing activities significantly increased year-over-year, primarily due to the recovery of **213 million USD** in financial assistance and interest, and gains from land disposal in the current period[14](index=14&type=chunk)[17](index=17&type=chunk) - Net cash flow from financing activities decreased by **290.04%** year-over-year, mainly due to reduced bank borrowings and increased loan repayments in the current period[14](index=14&type=chunk)[18](index=18&type=chunk) [Progress of Significant Matters](index=7&type=section&id=3.2%20Analysis%20of%20Progress%2C%20Impact%2C%20and%20Solutions%20for%20Significant%20Matters) During the reporting period, the company disclosed updates regarding its long-term equity investment in Heilongjiang Daqi Highway Co., Ltd - The company disclosed the progress of matters related to its long-term equity investment in Heilongjiang Daqi Highway Co., Ltd. (Daqi Company)[19](index=19&type=chunk) [Financial Statements Appendix](index=9&type=section&id=Item%20IV.%20Financial%20Statements%20Appendix) This section provides detailed consolidated and parent company financial statements, including balance sheets, income statements, and cash flow statements for the reporting period [Consolidated Balance Sheet](index=9&type=section&id=Consolidated%20Balance%20Sheet) As of March 31, 2014, the company's total assets were 6.85 billion USD, a 2.41% decrease from the year-start, with total liabilities at 6.06 billion USD, showing a relatively stable but high proportion of current liabilities Key Items from Consolidated Balance Sheet (Unit: USD) | Item | Period-end Balance (2014-03-31) | Year-start Balance (2013-12-31) | | :--- | :--- | :--- | | **Total Assets** | **6.85 billion** | **7.02 billion** | | Total Current Assets | 5.55 billion | 5.73 billion | | Total Non-current Assets | 1.30 billion | 1.28 billion | | **Total Liabilities** | **6.06 billion** | **6.22 billion** | | Total Current Liabilities | 5.38 billion | 5.58 billion | | Total Non-current Liabilities | 683.72 million | 638.15 million | | **Total Owners' Equity** | **782.85 million** | **793.38 million** | | Total Owners' Equity Attributable to Parent Company | 772.65 million | 785.08 million | [Consolidated Income Statement](index=13&type=section&id=Consolidated%20Income%20Statement) In Q1 2014, the company's operating revenue was 756.47 million USD, a 16.20% year-over-year decrease, resulting in an operating loss of 14.10 million USD and a net loss attributable to parent company owners of 10.64 million USD, widening from the prior year Key Items from Consolidated Income Statement (Unit: USD) | Item | Current Period (2014 Q1) | Prior Period (2013 Q1) | | :--- | :--- | :--- | | Total Operating Revenue | 756.47 million | 902.72 million | | Total Operating Costs | 770.56 million | 907.75 million | | Operating Profit | -14.10 million | -5.03 million | | Total Profit | -4.49 million | -5.34 million | | Net Profit | -8.79 million | -9.39 million | | Net Profit Attributable to Parent Company Owners | -10.64 million | -9.42 million | [Consolidated Cash Flow Statement](index=16&type=section&id=Consolidated%20Cash%20Flow%20Statement) In Q1 2014, the company's cash flow significantly deteriorated, with operating activities showing a net outflow of 333.69 million USD, investing activities a net inflow of 219.95 million USD, and financing activities a net outflow of 147.09 million USD, leading to a net decrease of 260.83 million USD in cash and cash equivalents Consolidated Cash Flow Statement Summary (Unit: USD) | Item | Current Period (2014 Q1) | Prior Period (2013 Q1) | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | -333.69 million | 78.54 million | | Net Cash Flow from Investing Activities | 219.95 million | -498,838.65 | | Net Cash Flow from Financing Activities | -147.09 million | 77.40 million | | Net Increase in Cash and Cash Equivalents | -260.83 million | 155.44 million | [Parent Company Financial Statements](index=11&type=section&id=Parent%20Company%20Financial%20Statements) The parent company's Q1 2014 financial performance showed a net loss, with significant cash outflows from operations and financing, partially offset by investing activities Parent Company Key Financial Data (Q1 2014) | Metric | Period-end/Current Period Amount (USD) | | :--- | :--- | | **Balance Sheet (Period-end)** | | | Total Assets | 2.997 billion | | Total Liabilities | 2.338 billion | | Total Owners' Equity | 658.57 million | | **Income Statement (Current Period)** | | | Operating Revenue | 82.31 million | | Net Profit | -3.76 million | | **Cash Flow Statement (Current Period)** | | | Net Cash Flow from Operating Activities | -166.98 million | | Net Cash Flow from Investing Activities | 213.27 million | | Net Cash Flow from Financing Activities | -118.56 million |

Financial Performance - In 2013, the company achieved a net profit attributable to the parent company of CNY 17,217,450.50, with the parent company's net profit at CNY 3,481,598.76[7]. - The basic earnings per share for 2013 was CNY 0.0321, a decrease of 3.31% compared to CNY 0.0332 in 2012[26]. - The net profit attributable to shareholders was CNY 17.22 million, down 3.42% from CNY 17.83 million in the previous year[32]. - The company reported a significant revenue decline of CNY 849.26 million due to a major flood in the province that halted construction projects for approximately two months[26]. - The company's operating revenue for 2013 was approximately CNY 5.65 billion, a decrease of 13.06% compared to CNY 6.50 billion in 2012[32]. - The company achieved operating revenue of CNY 5,653.74 million, exceeding the target of CNY 5,500 million, but net profit decreased to CNY 181.04 million, down from the target of CNY 280 million[45]. - The company reported a significant reduction in operating costs, with a decrease of 13.26% in operating expenses compared to the previous year[34]. - The company’s financial report received a standard unqualified audit opinion from Zhongshen Yatai Certified Public Accountants[6]. Cash Flow and Assets - The net cash flow from operating activities increased by 109.37%, reaching CNY 13.93 million, compared to a negative cash flow of CNY 148.57 million in 2012[32]. - The total assets at the end of 2013 were CNY 7.02 billion, an increase of 14.88% from CNY 6.11 billion at the end of 2012[32]. - The company’s cash and cash equivalents increased by 91.47% to CNY 658.53 million, driven by better project cash inflows and increased financing lease amounts[50]. - The company’s investment activities generated a net cash outflow of CNY 58.30 million, a significant decrease of 903.16% year-on-year, mainly due to increased financial support to the project command[44]. - The company’s cash flow from financing activities increased by 153.25% to CNY 382.97 million, driven by expanded financing needs due to project funding delays[44]. Shareholder and Dividend Information - The company proposed a cash dividend of CNY 0.10 per 10 shares, totaling CNY 5,368,076.58, based on a total share capital of 536,807,658 shares[7]. - The accumulated undistributed profits at the end of the reporting period amounted to CNY 137,960,738.93, with CNY 20,113,532.51 available for distribution to the parent company[7]. - In the past three years, the company has consistently distributed dividends, with a cash dividend of 0.10 yuan per 10 shares in 2013, representing 31.18% of the net profit attributable to shareholders[62]. - The total number of shareholders at the end of the reporting period was 59,941, an increase from 58,528 five trading days prior[95]. - The largest shareholder, Heilongjiang Construction Group Co., Ltd., holds 33.34% of the shares, totaling 178,979,763 shares, with 89,489,881 shares pledged[95]. Market and Operational Strategy - The company is actively expanding its market presence through collaborations on various infrastructure projects, including partnerships with local governments and enterprises[33]. - The company aims to extend its reach into high-end markets and improve cooperation with central enterprises to drive growth[32]. - The company is focused on nurturing large enterprises with domestic and international competitiveness and influence[100]. - The company plans to achieve a main business revenue of 5,500 million yuan and a net profit of 200 million yuan in 2014, with new contract orders not less than 6,500 million yuan[59]. - The company is facing various risks including market shrinkage, intensified competition, and rising costs of labor and materials[61]. Governance and Compliance - The company has maintained compliance with the Company Law and relevant regulations from the China Securities Regulatory Commission regarding corporate governance[128]. - The company strictly adheres to information disclosure obligations, ensuring timely and accurate information is available to all shareholders[126]. - The governance structure ensures that all shareholders, especially minority shareholders, have equal rights and obligations[123]. - The company has established a comprehensive internal control system to ensure compliance and risk management, which includes a dedicated internal control leadership group[146]. - The independent directors did not raise any objections regarding company matters during the reporting period[140]. Human Resources and Training - The company reported a total of 751 senior title personnel, an increase of 15% compared to the previous year[116]. - The total number of employees in the parent company is 83, while the main subsidiaries employ 4,761, resulting in a total of 4,844 employees[117]. - The company organized 74 training sessions out of a planned 92, achieving an 80% completion rate, with a total of 3,347 participants trained[120]. - The company has established a performance evaluation and incentive mechanism linked to overall business performance for senior management[125]. - The company is focused on expanding its core technical team to support business development[116]. Future Outlook - The company plans to continue its market expansion and product development strategies in the upcoming year[182]. - Future guidance suggests a targeted revenue increase of 10% for the upcoming fiscal year[107]. - The company anticipates a positive outlook for 2014, with projected revenue growth driven by increased project contracts[107]. - The company is exploring new market expansion opportunities to drive future growth[184]. - The company plans to significantly increase its capital expenditure on fixed assets and key equipment to enhance operational efficiency[60].