Financial Performance - Operating revenue decreased by 47.71% to CNY 125,826,935.68 from CNY 240,636,811.71 year-on-year[10] - Net profit attributable to shareholders decreased significantly to CNY -25,737,241.11, compared to CNY 2,073,788.24 in the same period last year, representing a decline of 1,341.07%[10] - The net profit for the first quarter of 2014 was CNY -24,516,226.52, a significant decrease of 635.10% compared to the same period last year, mainly due to reduced total profit and increased income tax expenses[16] - The operating profit for the first quarter of 2014 was CNY -25,766,605.11, reflecting a decrease of 327.29% year-on-year, primarily attributed to reduced profits from real estate[16] - Net profit for the current period is CNY -24,516,226.52, compared to a net profit of CNY 4,581,629.31 in the previous period[30] - Basic earnings per share for the current period is CNY -0.0403, compared to CNY 0.0033 in the previous period[30] Cash Flow - Cash flow from operating activities showed a negative net amount of CNY -12,020,351.39, down 104.82% from CNY 249,633,029.44 in the previous year[10] - The net cash flow from operating activities for the first quarter of 2014 was CNY -12,020,351.39, a decline of 104.82% compared to the previous year, mainly due to decreased income from real estate operations and increased expenditures[16] - Cash flow from operating activities shows a net outflow of CNY -12,020,351.39, a significant decline from a net inflow of CNY 249,633,029.44 in the previous period[35] - The net cash flow from financing activities was -165,419,664.22 RMB, compared to a positive cash flow of 38,594,017.17 RMB in the previous period, indicating a significant decline in financing activities[36] - The cash flow from investment activities for the first quarter of 2014 was CNY 15,723,272.05, a significant increase of 120.13% year-on-year, mainly due to the recovery of investment costs and income from the construction of the Haohe River[16] Assets and Liabilities - Total assets increased by 4.39% to CNY 6,236,316,676.71 compared to the end of the previous year[10] - The total liabilities as of March 31, 2014, were CNY 4,919,961,519.79, up from CNY 4,633,443,270.00 at the beginning of the year[23] - Total liabilities amount to CNY 1,455,976,652.87, an increase from CNY 1,104,289,012.26 in the previous period[27] - The total equity attributable to the parent company's owners as of March 31, 2014, was CNY 1,277,983,152.60, down from CNY 1,303,720,393.71 at the beginning of the year[23] - Total equity stands at CNY 1,165,183,210.90, slightly up from CNY 1,159,103,237.30 in the previous period[27] Shareholder Information - The number of shareholders totaled 46,923 at the end of the reporting period[12] - The largest shareholder, Nantong Technology Industry Investment Development Co., Ltd., holds 18.84% of the shares, totaling 120,231,604 shares[12] Operating Costs and Expenses - The company reported a significant decrease in operating costs by 43.44% to CNY 102,323,347.89, correlating with the drop in revenue[15] - Financial expenses decreased by 41.87% to CNY 10,748,867.04, attributed to reduced borrowings and corresponding interest expenses[15] - Total operating costs for the current period are CNY 155,826,445.89, down 37.0% from CNY 247,157,844.59 in the previous period[29] Investment Income - The total investment income for the first quarter of 2014 was CNY 4,232,905.10, an increase compared to the previous year, primarily due to increased investment dividends[16] - The company reported an investment income of CNY 4,232,905.10, compared to CNY 490,822.26 in the previous period[30] Inventory and Prepayments - Prepayments increased by 48.56% to CNY 293,929,964.95 due to increased project payments by subsidiaries[15] - The inventory as of March 31, 2014, was CNY 3,218,759,935.46, an increase from CNY 2,994,779,999.58 at the beginning of the year[21]

Financial Performance - The company reported a net profit of ¥10,032,343.66 for the year 2013, with a total distributable profit of ¥234,898,169.10 after accounting for previous profits and dividends [7]. - The company did not declare a cash dividend for 2013 as the distributable profit per share was only ¥0.01, below the required minimum of ¥0.05 [7]. - The company’s operating revenue for 2013 was CNY 1,021,625,828.26, a decrease of 26.88% compared to 2012 [26]. - Net profit attributable to shareholders was CNY 2,779,358.41, down 93.08% from the previous year [26]. - The company reported a net cash flow from operating activities of CNY -149,690,279.58, indicating a significant decline in cash generation [26]. - The basic earnings per share decreased to CNY 0.004, down 93.33% from CNY 0.06 in 2012 [24]. - The company reported a net profit of 81.85 million RMB from its real estate subsidiary, Jiangsu Zhihua, with total revenue of 577.79 million RMB [56]. - The company reported a net profit of 2,779,358.41 in 2013, with a profit margin of 0% [84]. - The company reported a significant increase in accounts payable, which rose to CNY 918,253,380.46 from CNY 609,257,285.54, an increase of approximately 50.7% [145]. Dividend and Shareholder Information - The company will not issue bonus shares or increase capital reserves due to its current profit situation [8]. - The company has revised its cash dividend policy to ensure sustainable development while considering shareholder returns, with a minimum cash dividend ratio of 20% for growth-stage companies with significant capital expenditures [81]. - The total number of shares outstanding at the end of the reporting period was 637,928,488 [91]. - The company had 48,409 shareholders at the end of the reporting period, with the top two shareholders holding 18.84% and 18.76% respectively [95]. - The company has maintained a stable shareholder structure with no changes due to stock distribution or allotment during the reporting period [95]. Financial Audit and Reporting - The company’s financial report was audited by Ruihua Certified Public Accountants, which issued a standard unqualified opinion [7]. - The company emphasizes the importance of accurate and complete financial reporting, with management taking responsibility for the report's content [5]. - The company maintained effective internal control over financial reporting as confirmed by the audit conducted by Ruihua, ensuring reliability and completeness of financial information [129]. - The company has implemented a responsibility system for major errors in annual report disclosures to enhance transparency and accountability [131]. Operational Performance and Strategy - The company’s total undistributed profits will be used to supplement working capital to alleviate financial pressure [7]. - The company has outlined potential risks in its future plans and development strategies, which are detailed in the board report [9]. - The company aims to reduce losses in the machine tool sector by CNY 30 million in 2014, targeting a further reduction of CNY 40 million [31]. - The company has initiated a mid-to-long-term product development plan for 2014-2016, focusing on optimizing designs and improving quality [32]. - The company completed the relocation of several production facilities to enhance operational efficiency and ensure smooth production transitions [33]. - The company is committed to improving employee productivity through a revised compensation distribution system, linking pay to performance and departmental outcomes [72]. Research and Development - The company’s R&D expenditure increased significantly by 535.21% to CNY 40,704 million, reflecting a strong commitment to innovation [42]. - The company has established multiple research institutes and partnerships, including a joint laboratory with Tsinghua University, to enhance its R&D capabilities [52]. - The company developed several new products, including the MCH63 precision horizontal machining center, which filled a domestic technology gap [52]. - The company launched 9 new products, including VGC2000 gantry milling machine and LG24 hub vehicle, during the reporting period [44]. Market and Industry Context - The machine tool business faces market risks due to domestic market fluctuations and weak demand, prompting the company to adopt a high-end development strategy [78]. - The real estate sector is exposed to policy risks, with potential government regulations impacting market demand and project sales in 2014 [79]. - In 2013, the national commodity housing sales amounted to 8.1428 trillion yuan, a year-on-year increase of 26.3% [60]. - The company recognizes the need for strategic transformation and market expansion, particularly in response to urbanization trends in third and fourth-tier cities [60]. Cost Management and Efficiency - The average price reduction achieved through supplier negotiations was 2.11%, resulting in cost savings of CNY 4.06 million [33]. - The company completed a major cost reduction initiative, resulting in a total cost reduction of CNY 15.5 million and a cash flow increase of approximately CNY 1.35 million from interest income [37]. - The company plans to reduce production costs by over 20 million yuan in 2014 compared to 2013, with procurement costs expected to decrease by over 10 million yuan [69]. - The company aims to control the loss limit to within 60 million yuan in 2014 while enhancing cost management and efficiency [70]. Corporate Governance - The company has improved its corporate governance structure in accordance with national laws and regulations, achieving positive results in internal control and information disclosure [119]. - The company has actively implemented the "Special Governance Activities for Listed Companies" since 2007, leading to enhanced governance operations [120]. - The board of directors held 13 meetings in the reporting period, with 4 conducted in person and 9 via communication methods [124]. - Independent directors did not raise any objections to the board's proposals during the reporting period [124]. Employee and Workforce Management - The total number of employees in the parent company is 874, while the main subsidiaries have 698 employees, resulting in a total of 1,572 employees [115]. - The company has a diverse workforce with a significant number of employees in production and technical roles, indicating a strong operational capacity [115]. - The company has established a tiered training system to enhance employee skills and business capabilities, ensuring healthy growth for both employees and the enterprise [116]. - The company offers benefits such as "five insurances and one fund," paid leave, and paid training for its employees [115]. Financial Position and Assets - The total assets at the end of 2013 reached CNY 5,974,314,653.44, an increase of 32.22% year-on-year [26]. - The company’s total current assets of CNY 4,256,634,731.15 as of December 31, 2013, an increase from CNY 3,306,061,995.26 at the beginning of the year, reflecting a growth of approximately 28.7% [139]. - Cash and cash equivalents reached CNY 730,195,123.45, up from CNY 370,916,928.78, indicating a significant increase of about 96.7% [139]. - The company’s long-term borrowings surged by 396.40% to 1.26 billion RMB, indicating increased financing activities [51].