赤峰黄金 2020 年年度报告 公司代码：600988 公司简称：赤峰黄金 赤峰吉隆黄金矿业股份有限公司 2020 年年度报告 1 / 226 赤峰黄金 2020 年年度报告 重要提示 一、本公司董事会、监事会及董事、监事、高级管理人员保证年度报告内容的真实、 准确、完整，不存在虚假记载、误导性陈述或重大遗漏，并承担个别和连带的法 律责任。 二、公司全体董事出席董事会会议。 三、中审众环会计师事务所（特殊普通合伙）为本公司出具了标准无保留意见的审 计报告。 四、公司负责人王建华、主管会计工作负责人赵强及会计机构负责人（会计主管人员） 杜慧声明：保证年度报告中财务报告的真实、准确、完整。 五、经董事会审议的报告期利润分配预案或公积金转增股本预案 因公司正处于发展阶段，国内的五龙矿业、吉隆矿业和瀚丰矿业正在实施"建 大矿、上规模"项目，国外的万象矿业正在实施"一体两翼"发展战略，探矿增储 和扩能改造需要大量资金投入，同时公司正在进行加纳毕比安尼金矿的并购，现金 需求较大，本年度拟不进行现金分红，也不进行资本公积转增股本。 六、前瞻性陈述的风险声明 √适用 □不适用 本报告中所涉及的未来计划、发展战略等前瞻性描述不 ...

[Company Profile and Key Financial Indicators](index=6&type=section&id=%E7%AC%AC%E4%BA%8C%E8%8A%82%20%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) Presents the company's profile and key financial performance indicators [Key Financial Data and Indicators](index=8&type=section&id=%E4%B8%83%E3%80%81%20%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 2018, the company's operating revenue decreased by 16.77% year-on-year, and net profit attributable to shareholders turned from profit to loss, recording -CNY 133 million, a significant decrease of 148.49% year-on-year; total assets increased by 61.92% due to the acquisition of Wanxiang Mining, and net cash flow from operating activities turned positive to CNY 387 million, with basic earnings per share at -CNY 0.09 2018 Annual Key Accounting Data | Key Accounting Data | 2018 (CNY) | 2017 (Adjusted) (CNY) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 2,153,115,454.58 | 2,587,008,634.46 | -16.77 | | Net Profit Attributable to Parent Company Shareholders | -133,047,305.33 | 274,356,737.49 | -148.49 | | Net Profit Attributable to Parent Company Shareholders Excluding Non-Recurring Gains/Losses | -161,340,475.77 | 256,420,055.89 | -162.92 | | Net Cash Flow from Operating Activities | 387,064,488.21 | -378,060,764.96 | N/A | | **Period-End Data** | **2018 End (CNY)** | **2017 End (Adjusted) (CNY)** | **YoY Change at Period End (%)** | | Net Assets Attributable to Parent Company Shareholders | 2,519,663,583.49 | 2,699,348,682.00 | -6.66 | | Total Assets | 7,748,234,889.97 | 4,785,259,116.06 | 61.92 | 2018 Annual Key Financial Indicators | Key Financial Indicators | 2018 | 2017 (Adjusted) | Change from Prior Period | | :--- | :--- | :--- | :--- | | Basic Earnings Per Share (CNY/share) | -0.09 | 0.19 | -147.37% | | Diluted Earnings Per Share (CNY/share) | -0.09 | 0.19 | -147.37% | | Weighted Average Return on Net Assets (%) | -5.05 | 10.73 | decreased by 15.78 percentage points | | Weighted Average ROE Excluding Non-Recurring Gains/Losses (%) | -6.13 | 10.03 | decreased by 16.16 percentage points | [Quarterly Financial Data](index=10&type=section&id=%E4%B9%9D%E3%80%81%202018%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 achieved profitability in the first three quarters, but incurred a significant loss of -CNY 218 million in net profit attributable to shareholders in the fourth quarter, leading to a full-year loss, while fourth-quarter operating revenue was the highest for the year 2018 Quarterly Financial Data | Indicator | Q1 (CNY) | Q2 (CNY) | Q3 (CNY) | Q4 (CNY) | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue | 473,717,788.81 | 525,045,811.19 | 532,786,073.27 | 621,565,781.31 | | Net Profit Attributable to Parent Company Shareholders | 31,113,674.45 | 31,141,420.20 | 22,450,695.38 | -217,753,095.36 | [Company Business Overview](index=12&type=section&id=%E7%AC%AC%E4%B8%89%E8%8A%82%20%E5%85%AC%E5%8F%B8%E4%B8%9A%E5%8A%A1%E6%A6%82%E8%A6%81) Outlines the company's main business, operating model, and industry conditions [Main Business, Operating Model, and Industry Overview](index=12&type=section&id=%E4%B8%80%E3%80%81%E6%8A%A5%E5%91%8A%E6%9C%9F%E5%86%85%E5%85%AC%E5%8F%B8%E6%89%80%E4%BB%8E%E4%BA%8B%E7%9A%84%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%E8%AF%B4%E6%98%8E) The company adopts a dual-driven development strategy of non-ferrous metal mining and comprehensive resource recycling, primarily involving gold and copper mining, processing, and the recycling of non-ferrous metals from waste residues and discarded electrical appliances - The company's main business involves non-ferrous metal mining and comprehensive resource recycling, with primary products including gold, silver, and electrolytic copper[25](index=25&type=chunk) - In 2018, the company acquired Laos Wanxiang Mining, adding copper mining and smelting operations, and plans to restart gold mining production, with cathode copper products sold exclusively to Trafigura Pte Ltd[25](index=25&type=chunk)[26](index=26&type=chunk) - The comprehensive resource recycling business has broad prospects and is a nationally encouraged industry, with subsidiaries Xiongfeng Environmental handling non-ferrous metal smelting waste and Guangyuan Technology processing discarded electrical and electronic products[27](index=27&type=chunk)[28](index=28&type=chunk)[29](index=29&type=chunk) [Core Competitiveness Analysis](index=14&type=section&id=%E4%B8%89%E3%80%81%E6%8A%A5%E5%91%8A%E6%9C%9F%E5%86%85%E6%A0%B8%E5%BF%83%E7%AB%9E%E4%BA%89%E5%8A%9B%E5%88%86%E6%9E%90) The company's core competitiveness lies in its resources, technology, and management, including high-grade domestic gold mines, extensive exclusive exploration rights for the Sepon copper-gold mine in Laos, multiple patented technologies, and an experienced international management team - **Resource Advantages**: Domestically, the company holds gold reserves of approximately **55.75 tons** with high ore grades, while the acquired Sepon copper-gold mine in Laos is one of the largest mines in the country, possessing **1,247 square kilometers** of exclusive exploration and mining rights[32](index=32&type=chunk)[33](index=33&type=chunk) - **Technological Advantages**: Subsidiary Xiongfeng Environmental possesses **12 national invention patents** and multiple proprietary technologies, and the Sepon copper-gold mine utilizes internationally advanced mining production technologies[33](index=33&type=chunk) - **Management Advantages**: The operating management team is highly experienced, and the acquisition of the Laos Sepon mine is expected to provide access to internationally advanced management models and talent, paving the way for the company's sustainable development[34](index=34&type=chunk) [Management Discussion and Analysis](index=16&type=section&id=%E7%AC%AC%E5%9B%9B%E8%8A%82%20%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) Discusses and analyzes the company's operating performance [Management Discussion and Analysis](index=16&type=section&id=%E4%B8%80%E3%80%81%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) In 2018, the company faced operational challenges including gold mine resource bottlenecks, declining production and sales, and insufficient operating rates in the comprehensive resource recycling business, leading to its first loss since the 2012 restructuring, with a net profit of -CNY 133 million, despite completing the acquisition of Laos Wanxiang Mining and implementing internal organizational reforms - In 2018, the company achieved operating revenue of **CNY 2.153 billion**, a year-on-year decrease of **16.77%**, and net profit attributable to parent company shareholders of **-CNY 133 million**, marking its first loss since the 2012 restructuring[35](index=35&type=chunk) - The loss was primarily due to reduced gold production and sales, insufficient operating rates at Xiongfeng Environmental, a goodwill impairment provision of **CNY 120 million**, and an impairment provision for available-for-sale financial assets of **CNY 50 million**[35](index=35&type=chunk) - The company acquired **100%** of MMG Laos shares (holding **90%** of Wanxiang Mining equity) for **USD 275 million**, gaining the Laos Sepon copper-gold mine, which increased resource reserves and diversified metal types[35](index=35&type=chunk) - The company implemented internal organizational reforms, establishing three business divisions: domestic mining, international mining, and non-mining, and recruited several professional management and technical personnel[36](index=36&type=chunk) [Key Operating Performance During the Reporting Period](index=17&type=section&id=%E4%BA%8C%E3%80%81%E6%8A%A5%E5%91%8A%E6%9C%9F%E5%86%85%E4%B8%BB%E8%A6%81%E7%BB%8F%E8%90%A5%E6%83%85%E5%86%B5) In 2018, the company's main business revenue was CNY 2.11 billion, with comprehensive resource recycling accounting for 68.67% and non-ferrous metal mining for 31.33%; both revenue and costs decreased year-on-year due to lower gold production and sales and a decline in Xiongfeng Environmental's performance, while total assets significantly increased by 61.92% due to the MMG Laos acquisition, with overseas assets comprising 52.71% [Main Business Analysis](index=17&type=section&id=(%E4%B8%80)%20%E4%B8%BB%E8%90%A5%E4%B8%9A%E5%8A%A1%E5%88%86%E6%9E%90) In 2018, operating revenue decreased by 16.77% year-on-year, and operating costs decreased by 11.24%; the gross margin for mining decreased by 20.7 percentage points due to significantly higher costs, while the gross margin for comprehensive resource recycling slightly decreased by 2.29 percentage points, with sales expenses increasing by 75.51% due to expanded consolidation scope and R&D expenses decreasing by 42.14% due to reduced investment by Xiongfeng Environmental Main Business by Industry | Industry | Operating Revenue (CNY) | Operating Cost (CNY) | Gross Margin (%) | YoY Change in Operating Revenue (%) | YoY Change in Operating Cost (%) | Change in Gross Margin | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Mining | 661,298,996.81 | 474,379,651.51 | 28.27 | 14.87 | 61.47 | decreased by 20.70 percentage points | | Comprehensive Resource Recycling | 1,449,363,974.74 | 1,225,875,357.16 | 15.42 | -26.34 | -24.29 | decreased by 2.29 percentage points | Main Product Production and Sales | Main Product | Production Volume | Sales Volume | YoY Change in Production Volume (%) | YoY Change in Sales Volume (%) | | :--- | :--- | :--- | :--- | :--- | | Mined Gold (g) | 1,517,086.47 | 1,510,286.47 | -26.22 | -26.56 | | Refined Silver (kg) | 362,954.53 | 355,751.04 | 2.94 | 2.30 | | Lead (t) | 9,951.87 | 10,708.78 | -37.89 | -28.88 | | Palladium (g) | 20,145.68 | 23,997.00 | -98.13 | -97.84 | | Electrolytic Copper (t) | 6,643.07 | 5,906.04 | N/A | N/A | Key Expense Changes | Expense Item | Current Period (CNY) | Prior Period (CNY) | Change (%) | | :--- | :--- | :--- | :--- | | Selling Expenses | 3,417,147.58 | 1,946,990.03 | 75.51 | | Administrative Expenses | 192,710,444.49 | 162,738,464.58 | 18.42 | | R&D Expenses | 47,931,310.00 | 82,837,835.85 | -42.14 | [Asset and Liability Analysis](index=30&type=section&id=(%E4%B8%89)%20%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 the end of 2018, the company's total assets reached CNY 7.748 billion, a 61.92% year-on-year increase primarily due to the consolidation of CHJIN Laos, leading to significant increases in fixed assets, intangible assets, and inventories; on the liability side, provisions surged due to LXML's future mine closure environmental expenditures, and long-term payables substantially increased due to acquisition-related trade financing, resulting in the asset-liability ratio rising from 41.98% to 63.52% - Due to the consolidation of CHJIN Laos Holdings Limited, the company's total assets, fixed assets, intangible assets, and inventories all experienced significant growth[65](index=65&type=chunk)[66](index=66&type=chunk) Balance Sheet Key Item Changes | Item Name | Current Period End (CNY) | Prior Period End (CNY) | Change (%) | Main Reason | | :--- | :--- | :--- | :--- | :--- | | Total Assets | 7,748,234,889.97 | 4,785,259,116.06 | 61.92 | Increased consolidation scope | | Fixed Assets | 3,077,180,222.00 | 1,579,505,501.11 | 94.82 | Increased consolidation scope | | Intangible Assets | 1,168,045,554.61 | 333,322,500.83 | 250.43 | Increased consolidation scope | | Long-term Payables | 1,293,593,398.80 | 0 | N/A | Acquisition-related trade financing and sale-leaseback | | Provisions | 1,736,132,159.33 | 391,600.00 | 443,243.25 | LXML's estimated future mine closure environmental expenditures | [Industry Operating Information Analysis](index=33&type=section&id=(%E5%9B%9B)%20%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) During the reporting period, the company's non-ferrous metal mining business saw gold gross margin at 37.99%, a year-on-year decrease of 10.98 percentage points, while the newly added electrolytic copper business had a gross margin of 12.37%; the company owns three domestic gold mines (Jilong, Huatai, Wulong) with a combined mineable reserve of approximately 3.1 million tons, and the overseas Sepon copper-gold mine possesses abundant copper and gold resources and reserves Non-ferrous Metal Product Profitability | Product Type | Operating Revenue (CNY) | Operating Cost (CNY) | Gross Margin (%) | YoY Change in Gross Margin (%) | | :--- | :--- | :--- | :--- | :--- | | Gold | 409,224,779.56 | 253,771,037.61 | 37.99 | -10.98 | | Electrolytic Copper | 250,632,469.66 | 219,617,704.95 | 12.37 | 100.00 | Domestic Self-Owned Gold Mines Basic Information (as of 2018 End) | Mine Name | Mineable Reserves (10,000 tons) | Grade (g/t) | Remaining Mineable Years | | :--- | :--- | :--- | :--- | | Jilong Mining | 34.36 | 15.41 | 3 years | | Huatai Mining | 214.96 | 7.43 | 11 years | | Wulong Mining | 60.81 | 7.21 | 6 years | - As of the end of 2017, overseas subsidiary LXML's Sepon copper-gold mine had copper mineral resources of **24.4 million tons** (grade **2.0%**) and gold mineral resources of **11.0 million tons** (grade **3.6 g/t**)[73](index=73&type=chunk)[75](index=75&type=chunk)[76](index=76&type=chunk) [Investment Status Analysis](index=37&type=section&id=(%E4%BA%94)%20%E6%8A%95%E8%B5%84%E7%8A%B6%E5%86%B5%E5%88%86%E6%9E%90) The most significant investment activity during the reporting period was the acquisition of 100% of MMG Laos Holdings Limited's issued shares for USD 275 million, with the transaction completed on November 30, 2018, and MMG Laos and its subsidiaries consolidated into the company's scope from December onwards - In 2018, the company completed the acquisition of **100%** of MMG Laos's issued shares for **USD 247.5 million** (settlement payment, **90%** of total), with MMG Laos holding **90%** equity in LXML, the operator of the Laos Sepon copper-gold mine[80](index=80&type=chunk) [Analysis of Major Holding and Participating Companies](index=38&type=section&id=(%E4%B8%83)%20%E4%B8%BB%E8%A6%81%E6%8E%A7%E8%82%A1%E5%8F%82%E8%82%A1%E5%85%AC%E5%8F%B8%E5%88%86%E6%9E%90) During the reporting period, among major subsidiaries, Jilong Mining and Guangyuan Technology were profitable, with net profits of CNY 20.62 million and CNY 45.02 million respectively, while Huatai Mining and Wulong Gold incurred losses; Xiongfeng Environmental achieved a net profit of CNY 88.93 million, and the newly consolidated LXML recorded a net loss of CNY 10.97 million for December 2018 alone Major Subsidiary Operating Performance in 2018 | Subsidiary Name | Main Business | Operating Revenue (CNY 10,000) | Net Profit (CNY 10,000) | | :--- | :--- | :--- | :--- | | Jilong Mining | Gold Mining and Processing | 17,667.49 | 2,062.45 | | Huatai Mining | Gold Mining and Processing | 4,803.58 | -762.18 | | Wulong Gold | Gold Mining and Processing | 18,510.04 | -5,658.44 | | Xiongfeng Environmental | Comprehensive Resource Recycling | 134,515.66 | 8,892.95 | | Guangyuan Technology | Waste Electrical Appliance Processing | 14,548.85 | 4,502.38 | | LXML (Dec) | Copper-Gold Mining | 25,121.75 | -1,096.65 | [Future Development and Operating Plan](index=40&type=section&id=(%E4%B8%89)%20%E7%BB%8F%E8%90%A5%E8%AE%A1%E5%88%92) The company plans to achieve operating revenue of CNY 6.803 billion and net profit of CNY 320 million in 2019, requiring approximately CNY 4 billion in funding to be raised through various financing methods; key risks include commodity price fluctuations, safety production and environmental risks, and high customer concentration in gold sales, which the company plans to mitigate through cost management, hedging, strengthening safety and environmental systems, and diversifying sales channels 2019 Operating Plan | Indicator | Planned Amount (CNY Billion) | | :--- | :--- | | Operating Revenue | 6.803 | | Operating Cost | 5.735 | | Net Profit | 0.320 | - The company faces key risks including commodity price fluctuation risk, safety production and environmental risk, and high customer concentration risk in its gold business[90](index=90&type=chunk)[91](index=91&type=chunk)[93](index=93&type=chunk) [Significant Events](index=43&type=section&id=%E7%AC%AC%E4%BA%94%E8%8A%82%20%E9%87%8D%E8%A6%81%E4%BA%8B%E9%A1%B9) Covers significant events impacting the company [Profit Distribution and Capital Reserve to Share Capital Conversion](index=43&type=section&id=%E4%B8%80%E3%80%81%E6%99%AE%E9%80%9A%E8%82%A1%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) Due to the negative net profit attributable to parent company shareholders in 2018 and significant cash needs for development, the board decided not to distribute cash dividends or convert capital reserves into share capital for 2018, continuing the trend of no cash dividends for the past three years (2016-2018) - Due to negative net profit attributable to parent company shareholders in 2018 and significant cash needs, the company proposes no cash dividend distribution or capital reserve to share capital conversion[3](index=3&type=chunk) Dividend Distribution Plans for the Past Three Years | Dividend Year | Cash Dividend Per 10 Shares (CNY, pre-tax) | Total Cash Dividend (CNY, pre-tax) | Ratio to Net Profit Attributable to Parent Company Shareholders (%) | | :--- | :--- | :--- | :--- | | 2018 | 0 | 0 | 0 | | 2017 | 0 | 0 | 0 | | 2016 | 0 | 0 | 0 | [Changes in Accounting Policies, Estimates, and Correction of Errors](index=51&type=section&id=%E4%BA%94%E3%80%81%E5%85%AC%E5%8F%B8%E5%AF%B9%E4%BC%9A%E8%AE%A1%E6%94%BF%E7%AD%96%E3%80%81%E4%BC%9A%E8%AE%A1%E4%BC%B0%E8%AE%A1%E5%8F%98%E6%9B%B4%E6%88%96%E9%87%8D%E5%A4%A7%E4%BC%9A%E8%AE%A1%E5%B7%AE%E9%94%99%E6%AD%A3%E5%8E%9F%E5%9B%A0%E5%92%8C%E5%BD%B1%E5%93%8D%E7%9A%84%E5%88%86%E6%9E%90%E8%AF%B4%E6%98%8E) During the reporting period, the company made two significant accounting adjustments: changing depreciation and amortization estimates for LXML's fixed and intangible assets due to the acquisition to better reflect future operations, and correcting prior period accounting errors related to the financial presentation and impairment provisions of subsidiary Wulong Gold's exploration rights as required by regulators - Due to the acquisition of MMG Laos, the company changed the accounting estimates for depreciation and amortization of subsidiary LXML's fixed assets and intangible assets[104](index=104&type=chunk) - As required by the Inner Mongolia Securities Regulatory Bureau, the company corrected prior period accounting errors related to the financial statement presentation and impairment provision for subsidiary Wulong Gold's exploration rights[105](index=105&type=chunk) [Equity Incentive Plan](index=53&type=section&id=%E5%8D%81%E4%B8%89%E3%80%81%E5%85%AC%E5%8F%B8%E8%82%A1%E6%9D%83%E6%BF%80%E5%8A%B1%E8%AE%A1%E5%88%92%E3%80%81%E5%91%98%E5%B7%A5%E6%8C%81%E8%82%A1%E8%AE%A1%E5%88%92%E6%88%96%E5%85%B6%E4%BB%96%E5%91%98%E5%B7%A5%E6%BF%80%E5%8A%B1%E6%8E%AA%E6%96%BD%E7%9A%84%E6%83%85%E5%86%B5%E5%8F%8A%E5%85%B6%E5%BD%B1%E5%93%8D) During the reporting period, the company adjusted and partially canceled its 2016 stock option incentive plan, with option quantities and exercise prices adjusted due to capital reserve to share capital conversion, and a total of 30.9 million stock options corresponding to the first and second exercise periods canceled due to exercise price exceeding market price and failure to meet 2017 performance targets - Due to capital reserve to share capital conversion, the number of stock options under the 2016 equity incentive plan was adjusted from **25.75 million** to **51.50 million**, and the exercise price was adjusted from **CNY 18.90/share** to **CNY 9.45/share**[513](index=513&type=chunk) - A total of **30.9 million** stock options corresponding to the first and second exercise periods were canceled due to unmet exercise conditions (share price below exercise price) and failure to meet performance targets[513](index=513&type=chunk) [Share Changes and Shareholder Information](index=63&type=section&id=%E7%AC%AC%E5%85%AD%E8%8A%82%20%E6%99%AE%E9%80%9A%E8%82%A1%E8%82%A1%E6%9C%AC%E5%8F%98%E5%8A%A8%E5%8F%8A%E8%82%A1%E4%B8%9C%E6%83%85%E5%86%B5) Details changes in ordinary shares and shareholder information [Ordinary Share Capital Changes](index=63&type=section&id=%E4%B8%80%E3%80%81%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) During the reporting period, the company's total share capital remained unchanged at 1,426,381,496 shares, but the share structure changed as 205,697,446 restricted shares from a non-public offering became unrestricted tradable shares, making all company shares unrestricted tradable shares - On April 17, 2018, **205,697,446** restricted shares from the company's non-public offering became tradable, resulting in all company shares being unrestricted tradable shares[131](index=131&type=chunk) Share Change Status | Share Class | Quantity Before Change | Change (Increase/Decrease) | Quantity After Change | | :--- | :--- | :--- | :--- | | I. Restricted Shares | 205,697,446 | -205,697,446 | 0 | | II. Unrestricted Tradable Shares | 1,220,684,050 | +205,697,446 | 1,426,381,496 | | III. Total Ordinary Shares | 1,426,381,496 | 0 | 1,426,381,496 | [Shareholders and Actual Controller](index=66&type=section&id=%E4%B8%89%E3%80%81%E8%82%A1%E4%B8%9C%E5%92%8C%E5%AE%9E%E9%99%85%E6%8E%A7%E5%88%B6%E4%BA%BA%E6%83%85%E5%86%B5) As of the end of 2018, the company had 106,457 shareholders; the actual controller, Zhao Meiguang, held 30.27% of shares, with the vast majority of his holdings (424 million shares) pledged, and several natural person shareholders among the top ten also had pledged shares Top Five Shareholders' Holdings (as of 2018 End) | Shareholder Name | Shares Held at Period End | Percentage (%) | Pledged or Frozen Status (Shares) | | :--- | :--- | :--- | :--- | | Zhao Meiguang | 431,731,982 | 30.27 | 424,265,000 | | Tan Xiongyu | 84,724,968 | 5.94 | 84,724,968 | | Li Xiaohui | 33,605,650 | 2.36 | 33,605,650 | | Liu Yongfeng | 30,265,900 | 2.12 | 30,265,900 | | Shenzhen Qianhai Qilin Xinlong Investment Enterprise (Limited Partnership) | 20,073,248 | 1.41 | 0 | - The company's controlling shareholder and actual controller is Mr Zhao Meiguang[137](index=137&type=chunk)[139](index=139&type=chunk) [Directors, Supervisors, Senior Management, and Employees](index=71&type=section&id=%E7%AC%AC%E5%85%AB%E8%8A%82%20%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) Provides information on the company's directors, supervisors, senior management, and employees [Changes in Holdings and Remuneration of Directors, Supervisors, and Senior Management](index=71&type=section&id=%E4%B8%80%E3%80%81%E6%8C%81%E8%82%A1%E5%8F%98%E5%8A%A8%E6%83%85%E5%86%B5%E5%8F%8A%E6%8A%A5%E9%85%AC%E6%83%85%E5%86%B5) During the reporting period, the company's directors, supervisors, and senior management underwent re-election, with several changes in personnel; the total pre-tax remuneration for current and former members was CNY 7.8167 million, with Chairman Lv Xiaozhao receiving CNY 1.274 million, and only Supervisor Han Kun increased his holdings by 6,000 shares through the secondary market Remuneration of Selected Directors, Supervisors, and Senior Management (2018) | Name | Position | Total Pre-tax Remuneration from Company (CNY 10,000) | | :--- | :--- | :--- | | Lv Xiaozhao | Chairman | 127.40 | | Wang Jianhua | Director | 26.70 | | Gao Bo | Director, General Manager | 88.00 | | Zhao Qiang | Director, CFO | 72.00 | | Total | / | 781.67 | [Employee Information](index=78&type=section&id=%E5%85%AD%E3%80%81%E6%AF%8D%E5%85%AC%E5%8F%B8%E5%92%8C%E4%B8%BB%E8%A6%81%E5%AD%90%E5%85%AC%E5%8F%B8%E7%9A%84%E5%91%98%E5%B7%A5%E6%83%85%E5%86%B5) As of the end of the reporting period, the company and its major subsidiaries had a total of 3,546 employees, with production personnel accounting for the largest proportion at 2,318; in terms of education, the majority of employees (2,415) had high school education or below; the company implements a performance-linked remuneration policy and provides training programs including pre-job training, on-the-job training, and academic education for professional technical personnel Employee Professional Composition | Professional Category | Number of Employees | | :--- | :--- | | Production Personnel | 2,318 | | Sales Personnel | 20 | | Technical Personnel | 714 | | Financial Personnel | 49 | | Administrative Personnel | 445 | | **Total** | **3,546** | [Corporate Bonds Information](index=85&type=section&id=%E7%AC%AC%E5%8D%81%E8%8A%82%20%E5%85%AC%E5%8F%B8%E5%80%BA%E5%88%B8%E7%9B%B8%E5%85%B3%E6%83%85%E5%86%B5) Outlines information related to the company's corporate bonds [Corporate Bonds Basic Information](index=85&type=section&id=%E4%B8%80%E3%80%81%E5%85%AC%E5%8F%B8%E5%80%BA%E5%88%B8%E5%9F%BA%E6%9C%AC%E6%83%85%E5%86%B5) The company has one outstanding corporate bond, "17 Huangjin Bond," issued in 2017, with a balance of CNY 700 million, a coupon rate of 5.50%, and a maturity date of February 27, 2022; during the reporting period, the company timely completed its 2019 interest payment "17 Huangjin Bond" Basic Information | Bond Abbreviation | Code | Issue Date | Maturity Date | Bond Balance (CNY 100 Million) | Interest Rate (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | 17 Huangjin Bond | 136985 | 2017-02-27 | 2022-02-27 | 7.00 | 5.50 | [Use of Proceeds and Rating](index=86&type=section&id=%E4%B8%89%E3%80%81%E5%85%AC%E5%8F%B8%E5%80%BA%E5%8B%9F%E9%9B%86%E8%B5%84%E9%87%91%E4%BD%BF%E7%94%A8%E6%83%85%E5%86%B5) The CNY 696 million proceeds from "17 Huangjin Bond" were fully used to supplement the company's working capital in 2017, with no change in use; in the June 2018 follow-up credit rating, the bond's credit rating remained AA+, and the issuer's long-term credit rating remained AA, with a stable outlook - The **CNY 696 million** proceeds were fully utilized in 2017 to supplement the company's working capital, consistent with the prospectus's stated purpose[169](index=169&type=chunk) - The June 2018 follow-up rating results: the bond's credit rating remained **AA+**, and the issuer's long-term credit rating remained **AA**, with a stable outlook[170](index=170&type=chunk) [Financial Report](index=90&type=section&id=%E7%AC%AC%E5%8D%81%E4%B8%80%E8%8A%82%20%E8%B4%A2%E5%8A%A1%E6%8A%A5%E5%91%8A) Presents the company's financial report, including audit opinion and statements [Audit Report](index=90&type=section&id=%E4%B8%80%E3%80%81%E5%AE%A1%E8%AE%A1%E6%8A%A5%E5%91%8A) Zhongshen Zhonghuan Certified Public Accountants issued a standard unqualified audit opinion on the company's 2018 financial statements, stating that the financial statements fairly presented the company's financial position and operating results in all material respects, with key audit matters being "goodwill impairment" and "inventory impairment provision" - The auditing firm is Zhongshen Zhonghuan Certified Public Accountants (Special General Partnership), which issued a **standard unqualified audit opinion**[180](index=180&type=chunk) - Key audit matters include: - **Goodwill Impairment**: As of year-end, goodwill balance was **CNY 483 million**, and the impairment test process was complex and involved significant judgments[182](index=182&type=chunk) - **Inventory Impairment Provision**: As of year-end, inventory book value was **CNY 2.043 billion**, and the adequacy of inventory impairment provision had a significant impact on the financial statements[184](index=184&type=chunk) [Financial Statement Summary](index=95&type=section&id=%E4%BA%8C%E3%80%81%E8%B4%A2%E5%8A%A1%E6%8A%A5%E8%A1%A8) In 2018, the company's total assets significantly increased to CNY 7.748 billion, driven primarily by increases in fixed assets, intangible assets, and inventories from acquisitions; total liabilities also substantially rose to CNY 4.922 billion, mainly from acquisition-related long-term payables and provisions; full-year operating revenue was CNY 2.153 billion, a year-on-year decrease, and net profit turned from profit to loss at -CNY 114 million; net cash flow from operating activities was CNY 387 million, while investing activities resulted in a net outflow of CNY 1.007 billion due to acquisitions, and financing activities generated a net inflow of CNY 721 million Consolidated Balance Sheet Summary (2018-12-31) | Item | Amount (CNY) | | :--- | :--- | | **Assets** | | | Total Current Assets | 2,759,544,653.62 | | Total Non-current Assets | 4,988,690,236.35 | | **Total Assets** | **7,748,234,889.97** | | **Liabilities and Owners' Equity** | | | Total Current Liabilities | 1,122,905,374.33 | | Total Non-current Liabilities | 3,798,822,224.85 | | **Total Liabilities** | **4,921,727,599.18** | | Total Equity Attributable to Parent Company Shareholders | 2,519,663,583.49 | | **Total Liabilities and Owners' Equity** | **7,748,234,889.97** | Consolidated Income Statement Summary (2018) | Item | Amount (CNY) | | :--- | :--- | | I. Total Operating Revenue | 2,153,115,454.58 | | II. Total Operating Costs | 2,279,908,052.12 | | III. Operating Profit | -93,072,324.71 | | IV. Total Profit | -92,281,070.40 | | V. Net Profit | -113,601,999.41 | | Net Profit Attributable to Parent Company Shareholders | -133,047,305.33 | Consolidated Cash Flow Statement Summary (2018) | Item | Amount (CNY) | | :--- | :--- | | Net Cash Flow from Operating Activities | 387,064,488.21 | | Net Cash Flow from Investing Activities | -1,007,386,321.98 | | Net Cash Flow from Financing Activities | 721,442,909.81 | | Net Increase in Cash and Cash Equivalents | 94,497,232.28 | [Notes to Consolidated Financial Statements](index=150&type=section&id=%E4%B8%83%E3%80%81%E5%90%88%E5%B9%B6%E8%B4%A2%E5%8A%A1%E6%8A%A5%E8%A1%A8%E9%A1%B9%E7%9B%AE%E6%B3%A8%E9%87%8A) The notes to the financial statements provide detailed explanations of the composition and changes in each accounting item; goodwill impairment testing resulted in a CNY 122 million impairment provision for goodwill from the acquisition of Xiongfeng Environmental, while goodwill from Guangyuan Technology's acquisition was not impaired; inventory impairment provisions totaled CNY 662 million at year-end, primarily for work-in-progress and consumable inventories; the company's consolidation scope expanded to include MMG Laos and its subsidiaries due to the acquisition, significantly increasing asset and liability scales - Due to the acquisition of MMG Laos, the consolidation scope expanded to include the company and its subsidiaries, leading to significant changes in the balance sheet[475](index=475&type=chunk) Goodwill Impairment Provision Status | Investee Name | Beginning Balance (CNY) | Current Period Provision (CNY) | Ending Balance (CNY) | | :--- | :--- | :--- | :--- | | Chenzhou Xiongfeng Environmental Technology Co Ltd | 0 | 121,899,678.10 | 121,899,678.10 | | Anhui Guangyuan Technology Development Co Ltd | 0 | 0 | 0 | Inventory Impairment Provision Status | Item | Beginning Balance (CNY) | Current Period Increase (CNY) | Ending Balance (CNY) | | :--- | :--- | :--- | :--- | | Raw Materials | 3,106,983.01 | 22,531.26 | 558,439.16 | | Merchandise Inventory | 2,664,897.03 | 3,849,778.02 | 5,509,526.34 | | Work-in-Progress | 153,968.63 | 530,625,350.46 | 530,574,013.98 | | Consumable Inventories | 0 | 125,058,162.55 | 125,017,819.01 | | **Total** | **5,925,848.67** | **659,555,822.29** | **661,659,798.49** |