2020 年第一季度报告 公司代码：603002 公司简称：宏昌电子 宏昌电子材料股份有限公司 2020 年第一季度报告 1 / 21 2020 年第一季度报告 重要提示 . 一、 二、 公司基本情况 . 11Í 重要事项 . 四、 附录 . 目录 2 / 21 2020 年第一季度报告 单位：元 币种：人民币 一、 重要提示 1.1 公司董事会、监事会及董事、监事、高级管理人员保证季度报告内容的真实、准确、完整， 不存在虚假记载、误导性陈述或者重大遗漏，并承担个别和连带的法律责任。 1.2 公司全体董事出席董事会审议季度报告。 1.3 公司负责人林瑞荣、主管会计工作负责人萧志仁及会计机构负责人（会计主管人员）叶迪宁 保证季度报告中财务报表的真实、准确、完整。 1.4 本公司第一季度报告未经审计。 二、 公司基本情况 2.1 主要财务数据 | --- | --- | --- | --- | |------------------------------------------------|------------------|----------------------|------------------- ...

Financial Performance - The company's operating revenue for 2019 was RMB 1,635,597,484.38, a decrease of 9.33% compared to RMB 1,803,943,407.76 in 2018[22] - The net profit attributable to shareholders for 2019 was RMB 67,426,117.26, representing a significant increase of 66.46% from RMB 40,505,488.24 in 2018[22] - The net cash flow from operating activities decreased by 72.74% to RMB 37,375,540.53 in 2019, down from RMB 137,084,785.49 in 2018[22] - The total assets as of the end of 2019 were RMB 1,856,213,212.82, a decrease of 5.28% from RMB 1,959,752,264.88 at the end of 2018[22] - The net assets attributable to shareholders increased by 4.51% to RMB 1,160,139,579.06 at the end of 2019, compared to RMB 1,110,110,071.37 at the end of 2018[22] - The basic earnings per share for 2019 was RMB 0.12, an increase of 50.00% from RMB 0.08 in 2018[22] - The company achieved operating revenue of RMB 1.636 billion, a decrease of 9.33% year-on-year[62] - Net profit for the period was RMB 76.19 million, an increase of 52.36% year-on-year, with earnings per share of RMB 0.12[62] - The company reported a total asset value of RMB 1.856 billion, a decrease of 5.28% year-on-year, while equity attributable to shareholders increased by 4.51% to RMB 1.160 billion[62] Dividend Distribution - The company plans to distribute a cash dividend of RMB 0.63 per 10 shares, amounting to approximately RMB 38,707,937.10, which is 50.80% of the net profit attributable to shareholders[4] - The company distributed cash dividends amounting to 38,707,937.10 RMB in 2019, representing 50.80% of the net profit attributable to ordinary shareholders[131] - In 2018, the cash dividends distributed were 25,190,879.70 RMB, accounting for 50.37% of the net profit attributable to ordinary shareholders[131] - The company has a policy to distribute at least 30% of the annual distributable profit as cash dividends, provided cash flow is sufficient[130] - The company has a clear and complete decision-making process for cash dividend distribution, ensuring compliance with its articles of association[130] - The company did not propose a cash profit distribution plan for the reporting period despite having positive distributable profits[132] Operational Efficiency - The company has received a standard unqualified audit report from Tianzhi International Accounting Firm[4] - The company has not reported any non-operating fund occupation by controlling shareholders or related parties[4] - The company’s asset-liability ratio improved to 37.50%, a decrease of 5.86 percentage points year-on-year[62] - The company’s cash flow from operating activities decreased by 72.74% to RMB 37.38 million[63] - The company’s sales expenses increased by 26.64% to RMB 54.22 million, while R&D expenses decreased by 7.93% to RMB 22.25 million[63] Market and Product Development - The company primarily engages in the production and sales of electronic-grade epoxy resin, with no changes in its main business since establishment[34] - The company plans to continue expanding its market presence in the electronics and coatings sectors, leveraging its strong product characteristics[36] - The company achieved a production volume of 92,111.18 tons and a sales volume of 92,669.64 tons of epoxy resin, maintaining a balance between production and sales[51] - The company is planning to expand production capacity by 500 tons/year for high-frequency, high-speed 5G circuit board resin, with a total investment of RMB 30 million[60] - The company aims to enhance its product competitiveness by focusing on high-end, environmentally friendly products and customized solutions[91] - The company intends to maintain its leading position in the electronic and coating industries while expanding into environmentally friendly, specialty, and customized products[122] Research and Development - The company holds 24 authorized invention patents and has 80 non-patented technologies in use, showcasing its strong R&D capabilities[43] - The company has established a research and development center for electronic-grade epoxy resin in Guangdong Province, holding 24 invention patents by the end of 2019[96] - The total R&D investment amounted to CNY 98,024,799.26, accounting for 5.99% of total revenue[74] - The company had a total of 20 ongoing R&D projects, with 6 new products developed during the reporting period[75] - Research and development efforts include the application for four patents related to low dielectric, low loss properties for 5G copper-clad laminates[60] Environmental Responsibility - The company has committed to high environmental standards and aims to achieve harmonious environmental conditions around its operations[122] - The company has invested in pollution control facilities, ensuring compliance with environmental regulations[171] - The company has achieved zero discharge of process wastewater through advanced treatment systems[176] - The company has established emergency response plans for environmental incidents[178] - The company has been classified as a key pollutant discharge unit by environmental authorities, with specific emissions monitored[168] Strategic Initiatives - The company is planning a major asset restructuring to acquire 100% equity of Wuxi Hongren Electronic Materials Technology Co., Ltd.[61] - The company is in the process of negotiating land compensation with the government, with an estimated fair value of the land reserve between RMB 520 million and RMB 620 million[56] - The company will establish strategic alliances with upstream suppliers to control procurement costs and enhance market competitiveness[119] - The company has implemented a series of management systems to enhance its R&D capabilities, including procedures for design development and intellectual property management[96] Customer and Market Engagement - The company has nearly 3,000 customers, with transactions occurring with about 1,000 of them during the reporting period, enhancing its market responsiveness[42] - The company’s core competitive advantage lies in its early entry into the epoxy resin market in China and its established brand value among domestic and international clients[42] - The company’s operational model emphasizes direct sales and a flexible pricing mechanism based on raw material costs, allowing for quick market adaptation[40] - The company’s sales strategy considers market demand, competition, and customer relationships to determine pricing, allowing for adjustments based on market conditions[110] Shareholder Information - As of the end of the reporting period, the total number of ordinary shareholders was 33,410, down from 34,921 at the end of the previous month[195] - The largest shareholder, EPOXY BASE INVESTMENT HOLDING LTD., holds 253,702,000 shares, representing 41.29% of the total shares, with 16,500,000 shares pledged[198] - The total number of ordinary shares after the recent changes is 614,411,700, with 99.28% being freely tradable[187] Miscellaneous - The company has not reported any major litigation or arbitration matters during the reporting period[140] - The company has not disclosed any significant related party transactions or changes in related party transactions during the reporting period[147] - The company has not engaged in any asset or equity acquisitions or sales during the reporting period[149] - The company has not reported any significant contracts or their performance during the reporting period[151]

Financial Performance - Operating revenue for the period from January to September was CNY 1,204,120,956.90, down 9.47% year-on-year[17] - Net profit attributable to shareholders for the same period was CNY 45,013,149.01, a decrease of 6.47% compared to the previous year[17] - Basic and diluted earnings per share were both CNY 0.07, down 12.50% from the previous year[17] - The company reported a net loss of CNY 17,245.83 from the disposal of non-current assets during the period[20] - The company recorded a 103.24% increase in other income to ¥8,144,828.90, mainly from government subsidies related to operating activities[29] - The company reported a net profit margin improvement, with retained earnings increasing from ¥338,436,067.88 to ¥358,258,337.19, an increase of approximately 5.4%[49] - The company reported a total profit of ¥26,222,363.06 for Q3 2019, compared to ¥15,453,751.96 in Q3 2018, reflecting a growth of 69.5%[60] - The total comprehensive income for Q3 2019 was ¥23,932,466.81, compared to ¥13,505,003.85 in Q3 2018, indicating a significant increase[63] Cash Flow - The net cash flow from operating activities for the first nine months was negative CNY 54,127,306.94, a decline of 153.75% year-on-year[17] - Operating cash inflow totaled CNY 1,400,456,365.55, a decrease from CNY 1,461,942,621.49 in the previous period[76] - Operating cash outflow amounted to CNY 1,454,583,672.49, compared to CNY 1,361,242,360.16 previously, resulting in a net cash flow from operating activities of -CNY 54,127,306.94[76] - Investment activities generated a net cash flow of -CNY 3,999,634.15, significantly improved from -CNY 105,563,560.33 in the prior period[76] - Financing activities resulted in a net cash flow of CNY 6,180,495.88, a recovery from -CNY 51,939,867.88 previously[81] - The company received CNY 3,847,520.28 in tax refunds, a significant increase from CNY 236,382.93 previously[78] - The company paid CNY 32,424,192.31 in dividends and interest, down from CNY 43,037,226.48 in the previous period[80] Assets and Liabilities - Total assets at the end of the reporting period were CNY 1,760,212,760.94, a decrease of 10.18% compared to the end of the previous year[17] - Total liabilities decreased from ¥849,642,193.51 to ¥630,166,520.62, a reduction of approximately 25.8%[45] - Current liabilities decreased from ¥801,878,470.25 to ¥591,044,354.17, a decline of about 26.2%[45] - Non-current liabilities decreased from ¥47,763,723.26 to ¥39,122,166.45, a decrease of approximately 18.2%[45] - Cash and cash equivalents decreased from ¥265,476,452.81 to ¥209,064,883.55, a reduction of about 21.2%[47] - Accounts receivable decreased from ¥293,781,839.15 to ¥207,234,315.00, a decline of approximately 29.5%[47] - Inventory levels fell by 48.60% to ¥86,109,078.68, driven by increased market demand for epoxy resin[29] Shareholder Information - The total number of shareholders at the end of the reporting period was 34,950[26] - The largest shareholder, EPOXY BASE INVESTMENT HOLDING LTD., held 253,702,000 shares, accounting for 41.29% of the total shares[26] Future Outlook - The company anticipates uncertainties in future market prices and sales conditions, urging investors to be aware of investment risks[34] - The company plans to focus on market expansion and new product development in the upcoming quarters[49] Research and Development - Research and development expenses for Q3 2019 were ¥7,154,725.90, an increase of 8.1% from ¥6,619,994.07 in Q3 2018[60] - Research and development expenses increased to ¥5,487,761.51 in Q3 2019 from ¥4,328,477.26 in Q3 2018, marking an increase of about 26.8%[67]

Financial Performance - The company's operating revenue for the first half of 2019 was CNY 778,376,945.44, a decrease of 7.09% compared to CNY 837,771,235.64 in the same period last year[22]. - The net profit attributable to shareholders of the listed company was CNY 21,190,750.70, down 39.05% from CNY 34,769,035.78 year-on-year[22]. - The net profit after deducting non-recurring gains and losses was CNY 14,400,408.84, a decline of 56.09% compared to CNY 32,795,004.87 in the previous year[22]. - The net cash flow from operating activities was negative at CNY -174,147,031.15, a significant decrease from CNY 21,359,573.55 in the same period last year, representing a decline of 915.31%[22]. - Basic earnings per share for the first half of 2019 were CNY 0.03, a decrease of 50.00% compared to CNY 0.06 in the same period last year[23]. - The diluted earnings per share were also CNY 0.03, reflecting the same 50.00% decline year-on-year[23]. - The weighted average return on net assets was 1.89%, down 1.23 percentage points from 3.12% in the previous year[23]. - The company reported a significant decrease in short-term borrowings from CNY 45,000,000.00 to CNY 40,000,000.00, a reduction of about 11.1%[121]. Assets and Liabilities - The total assets at the end of the reporting period were CNY 1,704,235,975.68, down 13.04% from CNY 1,959,752,264.88 at the end of the previous year[22]. - The net assets attributable to shareholders of the listed company were CNY 1,106,113,773.51, a slight decrease of 0.36% from CNY 1,110,110,071.37 at the end of the previous year[22]. - The company’s cash and cash equivalents decreased by 46.23% to 232,974,912.18 RMB, primarily due to increased payments for raw materials[51]. - The company’s inventory decreased by 37.33% to 104,977,470.95 RMB, reflecting a reduction in raw materials, work-in-progress, and finished goods[51]. - The company’s liabilities included a significant increase in short-term bank loans, rising by 575% to 54,000,000.00 RMB[53]. - Total liabilities decreased from CNY 849,642,193.51 to CNY 598,122,202.17, a reduction of about 29.6%[121]. Operational Highlights - The company achieved a production volume of 43,649.90 tons and sales volume of 45,050.66 tons of epoxy resin in the first half of 2019, maintaining a balance between production and sales[41]. - The average selling price of epoxy resin was 17,239.33 RMB/ton (excluding tax), a decrease of 10.23% compared to 19,204.16 RMB/ton in the same period last year[41]. - The company maintains a direct sales model, closely aligning with market demand and providing high-quality technical services[36]. - The company has a strong technical service capability, providing timely support and training to clients post-delivery[37]. - The company utilizes a DCS automated control system in production, enhancing efficiency and product quality[37]. Risks and Challenges - The company faces risks from significant increases in fixed assets leading to potential profit declines due to depreciation as the Zhuhai plant commences production[58]. - Fluctuations in raw material prices and changes in downstream industry demand pose risks to the growth and profit levels of the epoxy resin industry[58]. - The company is subject to increased safety and environmental regulations, which may raise operational costs and compliance risks[58]. - The international economic environment presents uncertainties, including trade protectionism and currency fluctuations, impacting the epoxy resin industry[58]. Environmental and Social Responsibility - The company has centralized the production of products with waste gas emissions to its Zhuhai plant, resulting in no waste gas emissions from the Guangzhou plant[84]. - The Zhuhai plant has implemented three sets of waste gas treatment devices and a wastewater treatment station, ensuring compliance with environmental standards[88]. - The company has achieved zero discharge of process wastewater through its saltwater treatment system, which recycles industrial salt and reuses condensate water[88]. - The company has established a complete environmental monitoring system, with quarterly emissions monitoring conducted by a qualified third-party testing company[88]. - The company has provided a total of CNY 12.5 million in educational assistance to 7 outstanding students from impoverished families[80]. Shareholder Information - The total number of shares after the recent changes is 614,411,700, with 99.28% being unrestricted circulating shares[96]. - The largest shareholder, EPOXY BASE INVESTMENT HOLDING LTD., holds 253,702,000 shares, representing 41.29% of total shares[104]. - Total number of common shareholders at the end of the reporting period is 36,613[101]. Corporate Governance - The company has not disclosed any significant related party transactions or changes in related party transactions during the reporting period[68]. - The company has fulfilled commitments to avoid competition with its actual controllers, ensuring compliance with competitive regulations[61]. - The company appointed Tianzhi International Accounting Firm for the 2019 audit services as per the shareholders' meeting resolution[62]. - There are no significant litigation or arbitration matters reported during the reporting period[64].

[Important Notice](index=3&type=section&id=%E4%B8%80%E3%80%81%20%E9%87%8D%E8%A6%81%E6%8F%90%E7%A4%BA) - The Board of Directors, Board of Supervisors, and all directors, supervisors, and senior management guarantee the truthfulness, accuracy, and completeness of this quarterly report's content, with no false records, misleading statements, or major omissions[8](index=8&type=chunk) - The company's legal representative, chief accounting officer, and head of the accounting department guarantee the truthfulness, accuracy, and completeness of the financial statements[9](index=9&type=chunk) - The company's first quarter report for 2019 is unaudited[10](index=10&type=chunk) [Company Profile](index=3&type=section&id=%E4%BA%8C%E3%80%81%20%E5%85%AC%E5%8F%B8%E5%9F%BA%E6%9C%AC%E6%83%85%E5%86%B5) [Key Financial Data](index=3&type=section&id=2.1%20%E4%B8%BB%E8%A6%81%E8%B4%A2%E5%8A%A1%E6%95%B0%E6%8D%AE) The company's performance declined sharply in Q1 2019, with net profit attributable to shareholders plummeting by 80.62% year-over-year Key Financial Indicators for Q1 2019 | Indicator | Q1 2019 | Q1 2018 | YoY Change (%) | | :--- | :--- | :--- | :--- | | **Operating Revenue (RMB)** | 368,543,959.00 | 373,499,165.74 | -1.33% | | **Net Profit Attributable to Shareholders (RMB)** | 3,861,487.30 | 19,928,285.20 | -80.62% | | **Net Profit Attributable to Shareholders (Excluding Non-recurring Items) (RMB)** | -2,332,863.01 | 19,625,770.55 | -111.89% | | **Net Cash Flow from Operating Activities (RMB)** | -107,336,462.35 | 75,230,699.97 | -242.68% | | **Basic Earnings Per Share (RMB/Share)** | 0.01 | 0.03 | -66.67% | | **Weighted Average Return on Equity (%)** | 0.35% | 1.80% | Decreased by 1.45 percentage points | Details of Non-recurring Gains and Losses | Item | Amount for the Period (RMB) | Description | | :--- | :--- | :--- | | Government Grants | 7,352,252.27 | Government subsidy income | | Gains/Losses from Entrusted Investments | 19,131.51 | Investment income from bank wealth management products | | Other Non-operating Income and Expenses | -66,667.00 | Donation expenses | | Gains/Losses on Disposal of Non-current Assets | -17,245.83 | Loss on disposal of scrapped fixed assets | | Income Tax Impact | -1,093,120.64 | - | | **Total** | **6,194,350.31** | - | [Shareholder Information](index=4&type=section&id=2.2%20%E8%82%A1%E4%B8%9C%E6%83%85%E5%86%B5) As of the end of the reporting period, the company had 32,930 shareholders, with the largest shareholder holding a 41.29% stake - As of the end of Q1 2019, the total number of shareholders was **32,930**[14](index=14&type=chunk) Top Five Shareholders | Shareholder Name | Number of Shares Held (Shares) | Percentage (%) | | :--- | :--- | :--- | | EPOXY BASE INVESTMENT HOLDING LTD. | 253,702,000 | 41.29 | | Zheng Hong | 3,364,300 | 0.55 | | Li Jiandong | 2,984,800 | 0.49 | | Societe Generale | 2,795,050 | 0.45 | | Liu Zhangang | 2,500,577 | 0.41 | [Significant Matters](index=5&type=section&id=%E4%B8%89%E3%80%81%20%E9%87%8D%E8%A6%81%E4%BA%8B%E9%A1%B9) [Analysis of Significant Changes in Key Financial Indicators](index=5&type=section&id=3.1%20%E5%85%AC%E5%8F%B8%E4%B8%BB%E8%A6%81%E4%BC%9A%E8%AE%A1%E6%8A%A5%E8%A1%A8%E9%A1%B9%E7%9B%AE%E3%80%81%E8%B4%A2%E5%8A%A1%E6%8C%87%E6%A0%87%E9%87%8D%E5%A4%A7%E5%8F%98%E5%8A%A8%E7%9A%84%E6%83%85%E5%86%B5%E5%8F%8A%E5%8E%9F%E5%9B%A0) Profitability declined significantly due to compressed product-material price spreads, while financial expenses and short-term debt pressure increased - The core reason for the sharp decline in performance was the sluggish epoxy resin market in Q1, continuing from Q4 2018, with insufficient downstream demand, lower product selling prices compared to the same period last year, and **compressed price spreads between products and main raw materials**[21](index=21&type=chunk) Key Changes in Balance Sheet Items | Account Name | Variance (%) | Reason for Change | | :--- | :--- | :--- | | Short-term Borrowings | -88.89% | Repayment of short-term bank loans | | Advances from Customers | 273.67% | Increased customer prepayments | | Non-current Liabilities Due within One Year | 562.50% | Increased long-term bank loans due within one year | Key Changes in Income Statement Items | Account Name | Variance (%) | Reason for Change | | :--- | :--- | :--- | | Financial Expenses | 511.04% | Increased bank interest expenses | | Asset Impairment Loss | -230.91% | Reversal of inventory write-down provision made at the beginning of the period | | Other Income | 1,405.64% | Increased government subsidies related to operating activities | | Investment Income | -91.66% | Decreased interest income from wealth management products | | Income Tax Expense | -50.49% | Decreased total profit due to lower product gross margins | Key Changes in Cash Flow Statement Items | Account Name | Variance (%) | Reason for Change | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | -242.68% | Decreased cash collection from sales and increased payments for raw materials | | Net Cash Flow from Investing Activities | 95.84% | Reduced payments for the Zhuhai Hongchang plant construction project | | Net Cash Flow from Financing Activities | 336.97% | Increased bank borrowings | [Commitments](index=7&type=section&id=3.3%20%E6%8A%A5%E5%91%8A%E6%9C%9F%E5%86%85%E8%B6%85%E6%9C%9F%E6%9C%AA%E5%B1%A5%E8%A1%8C%E5%AE%8C%E6%AF%95%E7%9A%84%E6%89%BF%E8%AF%BA%E4%BA%8B%E9%A1%B9) The commitment to avoid horizontal competition by the actual controller was strictly fulfilled during the reporting period - The commitment made by the company's actual controller and related parties to avoid horizontal competition was **promptly and strictly fulfilled** during the reporting period[26](index=26&type=chunk) [Appendix](index=8&type=section&id=%E5%9B%9B%E3%80%81%20%E9%99%84%E5%BD%95) [Financial Statements](index=8&type=section&id=4.1%20%E8%B4%A2%E5%8A%A1%E6%8A%A5%E8%A1%A8) This appendix contains the unaudited consolidated and parent company financial statements for the first quarter of 2019 [Consolidated Balance Sheet](index=8&type=section&id=%E5%90%88%E5%B9%B6%E8%B5%84%E4%BA%A7%E8%B4%9F%E5%80%BA%E8%A1%A8) As of March 31, 2019, total assets and liabilities decreased by 8.05% and 18.99% respectively from the beginning of the year Key Items of Consolidated Balance Sheet (Unit: RMB) | Item | March 31, 2019 | December 31, 2018 | Change (%) | | :--- | :--- | :--- | :--- | | **Total Assets** | **1,802,057,860.46** | **1,959,752,264.88** | **-8.05%** | | Cash and Cash Equivalents | 306,146,925.84 | 433,246,954.62 | -29.34% | | Notes and Accounts Receivable | 746,270,738.85 | 724,996,903.22 | +2.93% | | Inventories | 119,697,374.88 | 167,514,515.50 | -28.54% | | **Total Liabilities** | **688,158,225.29** | **849,642,193.51** | **-18.99%** | | Short-term Borrowings | 5,000,000.00 | 45,000,000.00 | -88.89% | | Notes and Accounts Payable | 551,758,628.31 | 709,755,194.50 | -22.26% | | **Equity Attributable to Parent Company** | **1,113,899,635.17** | **1,110,110,071.37** | **+0.34%** | [Consolidated Income Statement](index=13&type=section&id=%E5%90%88%E5%B9%B6%E5%88%A9%E6%B6%A6%E8%A1%A8) In Q1 2019, operating profit and net profit attributable to the parent company fell sharply by 75.40% and 80.62% YoY, respectively Key Items of Consolidated Income Statement (Unit: RMB) | Item | Q1 2019 | Q1 2018 | Change (%) | | :--- | :--- | :--- | :--- | | Total Operating Revenue | 368,543,959.00 | 373,499,165.74 | -1.33% | | Total Operating Costs | 370,030,753.00 | 350,291,459.68 | +5.63% | | Operating Profit | 5,884,589.78 | 23,925,550.40 | -75.40% | | Total Profit | 5,800,676.95 | 23,845,120.40 | -75.67% | | Net Profit | 3,861,487.30 | 19,928,285.20 | -80.62% | [Consolidated Cash Flow Statement](index=16&type=section&id=%E5%90%88%E5%B9%B6%E7%8E%B0%E9%87%91%E6%B5%81%E9%87%8F%E8%A1%A8) Net cash flow from operating activities turned negative to -RMB 107 million, a significant deterioration from the previous year Key Items of Consolidated Cash Flow Statement (Unit: RMB) | Item | Q1 2019 | Q1 2018 | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | -107,336,462.35 | 75,230,699.97 | | Net Cash Flow from Investing Activities | -2,852,679.50 | -68,523,411.76 | | Net Cash Flow from Financing Activities | 1,267,331.01 | -534,795.46 | | Net Increase in Cash and Cash Equivalents | -109,537,545.20 | 5,447,375.07 |

Financial Performance - In 2018, the company's operating revenue reached RMB 1,803,943,407.76, representing a 45.82% increase compared to RMB 1,237,094,651.51 in 2017[25] - The net profit attributable to shareholders was RMB 50,007,535.73, a decrease of 36.26% from RMB 78,449,430.19 in the previous year[25] - The net profit after deducting non-recurring gains and losses was RMB 40,505,488.24, down 46.60% from RMB 75,853,717.32 in 2017[25] - Basic earnings per share for 2018 were RMB 0.08, a decrease of 38.46% compared to RMB 0.13 in 2017[28] - The weighted average return on net assets was 4.45%, down 2.94 percentage points from 7.39% in the previous year[28] - The company reported a revenue for the reporting period of RMB 1.804 billion, with a net profit attributable to shareholders of RMB 50.0075 million, reflecting a decrease of 36.26% compared to the previous year[60] Cash Flow and Assets - The net cash flow from operating activities increased significantly to RMB 137,084,785.49, a 295.81% rise from RMB 34,633,915.84 in 2017[27] - The total assets at the end of 2018 were RMB 1,959,752,264.88, an 18.68% increase from RMB 1,651,264,012.33 in 2017[27] - The net assets attributable to shareholders were RMB 1,110,110,071.37, showing a slight increase of 1.09% from RMB 1,098,115,586.92 in 2017[27] - The company’s asset-liability ratio increased to 43.35%, up 9.85 percentage points from the previous year[67] - The cash and cash equivalents at the end of the period are ¥433,246,954.62, representing 22.11% of total assets, a 98.01% increase from the previous period[90] Production and Sales - The company achieved a production volume of approximately 97,500 tons and a sales volume of about 96,200 tons, representing year-on-year increases of 29.48% and 23.25% respectively[60] - The production volume of epoxy resin was 97,541.65 tons, while sales volume reached 96,159.54 tons, indicating a year-on-year increase of 29.48% and 23.25%, respectively[77] - The company’s Zhuhai plant commenced production in May 2018, achieving stable product quality and meeting customer demands[61] - The company’s Zhuhai plant achieved a capacity utilization rate of 100% in 2018, while the Guangzhou plant had a utilization rate of 50%[111] Research and Development - The company holds 22 authorized invention patents and has 6 patents under review, with 76 non-proprietary technologies developed and applied[49] - The company has initiated 15 research projects during the reporting period, with 4 new products developed and 9 projects in the pilot stage[61] - The total R&D expenditure for the period is ¥81,487,774.31, which is 4.52% of operating revenue[85] - The company has 74 R&D personnel, accounting for 22.49% of the total workforce[85] Market and Industry - The company primarily engages in the production and sales of electronic-grade epoxy resin, with no changes in its main business since establishment[37] - The company’s epoxy resin products are utilized across various industries, including electronics, coatings, and composite materials, highlighting their versatility[41] - The domestic epoxy resin market is characterized by a concentration of production capacity and a shift towards specialized, high-value products, with a need for improved product variety and quality[97] - The global epoxy resin production capacity was approximately 4.6 million tons per year in 2018, with the top three companies (Dow Chemical, Taiwan's Nan Ya Plastics, and Momentive Specialty Chemicals) accounting for one-third of the total capacity[97] Environmental and Social Responsibility - The company emphasizes safety and environmental protection, implementing strict monitoring and training programs to ensure compliance[60] - The company invested RMB 5,603.38 million in environmental protection, accounting for 3.11% of operating revenue[127] - The company has established an online monitoring system for waste gas emissions to ensure compliance with pollutant discharge standards[186] - The company actively participates in social responsibility initiatives, including long-term partnerships with suppliers and customers[177] Dividend and Profit Distribution - The company plans to distribute a cash dividend of RMB 0.41 per 10 shares, amounting to approximately RMB 25,190,879.70, which is 50.37% of the net profit attributable to shareholders[6] - The profit distribution policy stipulates that at least 30% of the annual distributable profit must be distributed as cash dividends if conditions are met[142] - The company reported a net profit attributable to ordinary shareholders of approximately 50.01 million CNY in 2018, representing a profit distribution ratio of 50.37%[146] Risks and Challenges - The company faces challenges from environmental regulations and rising compliance costs, which may lead to the elimination of non-compliant competitors in the industry[99] - The company is exposed to risks from fluctuations in raw material prices and changes in downstream industry demand, particularly in the epoxy resin sector[137] - The company faced risks related to significant increases in fixed assets leading to potential profit declines due to depreciation[137] Corporate Governance - The company has implemented a mechanism for independent directors to gather opinions from minority shareholders regarding profit distribution proposals[141] - The company has maintained compliance with regulatory requirements regarding the disclosure of its actual controller's identity[158] - There were no significant litigation or arbitration matters reported for the year[158]

Financial Performance - Operating revenue for the first nine months reached CNY 1,330,112,838.59, a 62.79% increase year-on-year[6] - Net profit attributable to shareholders was CNY 48,128,858.96, reflecting a growth of 30.82% compared to the same period last year[6] - Basic earnings per share increased by 33.33% to CNY 0.08 compared to CNY 0.06 in the previous year[6] - The company anticipates continued growth in revenue and profit margins driven by production expansion and market demand[15] - Total operating revenue for Q3 2018 reached ¥492,341,602.95, a significant increase of 64.5% compared to ¥299,431,619.59 in Q3 2017[26] - The total profit for the first nine months of 2018 was ¥57,458,017.94, an increase of 32.0% compared to ¥43,517,786.58 in the first nine months of 2017[27] Cash Flow - Cash flow from operating activities surged by 117.69% to CNY 100,700,261.33 for the first nine months[6] - Cash flow from operating activities for the first nine months of 2018 was ¥100.70 million, up 117.5% from ¥46.26 million in the same period last year[34] - Total cash inflow from operating activities reached CNY 1,373,443,162.97, compared to CNY 856,450,478.62 in the previous year, indicating a year-over-year increase of approximately 60.5%[36] - Cash outflow from operating activities was CNY 1,370,705,786.68, up from CNY 802,015,557.40, reflecting a 71.1% increase year-over-year[36] Assets and Liabilities - Total assets increased by 14.18% to CNY 1,885,462,428.88 compared to the end of the previous year[6] - Total liabilities increased by 55.50% to ¥626,640,273.04, primarily due to higher accounts payable related to material purchases[14] - Current liabilities rose to CNY 721,994,307.76, compared to CNY 547,948,025.41, indicating a significant increase of about 31.63%[19] - Owner's equity totaled CNY 1,107,958,648.16, slightly up from CNY 1,098,115,586.92, indicating a growth of about 0.79%[20] Shareholder Information - The total number of shareholders reached 35,783 by the end of the reporting period[10] - The largest shareholder, EPOXY BASE INVESTMENT HOLDING LTD., holds 41.29% of the shares[11] Research and Development - Research and development expenses for Q3 2018 were ¥6,619,994.07, an increase of 16.0% from ¥5,705,706.49 in Q3 2017[26] Non-Recurring Items - Non-recurring gains and losses totaled CNY 8,365,577.09 for the first nine months[9] - Government subsidies recognized amounted to CNY 9,986,873.29 for the first nine months[8] Inventory and Receivables - Accounts receivable rose by 49.38% to ¥308,930,871.08 driven by increased sales and customer bank acceptance bills[13] - Inventory increased by 34.59% to ¥161,373,500.27 reflecting higher stock levels at Zhuhai Hongchang[13]

Financial Performance - The company's operating revenue for the first half of 2018 reached ¥837,771,235.64, representing a 61.84% increase compared to ¥517,653,449.04 in the same period last year[20]. - The net profit attributable to shareholders was ¥34,769,035.78, a significant increase of 99.07% from ¥17,465,832.43 in the previous year[20]. - The net cash flow from operating activities was ¥21,359,573.55, a substantial increase of 9,386.47% compared to ¥225,158.35 in the same period last year[20]. - The basic earnings per share rose to ¥0.06, doubling from ¥0.03 in the previous year, indicating a 100% increase[21]. - The company reported a net profit margin of approximately 19% based on the half-year results[92]. - Operating profit for the current period was ¥41,984,842.76, up 160.2% from ¥16,142,351.83 in the previous period[95]. - The total profit for the current period was ¥42,004,265.99, an increase of 103.5% from ¥20,573,058.47 in the previous period[95]. - The total comprehensive income for the current period was ¥34,815,861.94, compared to ¥17,370,537.98 in the previous period, reflecting a growth of 100.1%[95]. Assets and Liabilities - The total assets of the company at the end of the reporting period were ¥1,733,804,842.25, reflecting a 5.00% increase from ¥1,651,264,012.33 at the end of the previous year[20]. - Total liabilities reached ¥639,632,712.69, compared to ¥553,148,425.41, representing an increase of approximately 16%[89]. - Current liabilities totaled ¥583,797,374.36, compared to ¥547,948,025.41, indicating an increase of about 6%[89]. - Non-current liabilities rose to ¥55,835,338.33 from ¥5,200,400.00, showing a significant increase[89]. - The company has significant assets pledged, including fixed assets valued at ¥63,338,404.24 and intangible assets at ¥25,092,313.36 for bank loan collateral[43]. Production and Sales - The company produced 45,710 tons of epoxy resin and sold 43,590 tons in the first half of 2018, maintaining stable product quality[35]. - The company expects a production increase of over 30% for the full year 2018 compared to 75,300 tons in 2017, estimating annual revenue to rise by approximately 50%[36]. - The company’s sales model is direct to customers, allowing for quick adjustments to pricing based on raw material costs[26]. - The company’s production is primarily planned based on sales forecasts, ensuring efficient manufacturing processes[26]. Research and Development - R&D expenditure increased by 206.63% to CNY 41.54 million, reflecting a focus on new product development[38]. Environmental Compliance - The company has maintained compliance with environmental regulations, avoiding the need for large-scale remediation costs[35]. - The company is listed as a key pollutant discharge unit by the environmental protection department in Guangzhou for 2018[60]. - The total emissions of SO2 during the reporting period were 0.0158 tons, with no exceedance of discharge standards[60]. - The total emissions of NOx during the reporting period were 0.3608 tons, with no exceedance of discharge standards[60]. - The company invested RMB 840,000 to optimize VOC emission control by adding an activated carbon adsorption device and modifying the operation of existing equipment to further reduce VOC emissions[61]. - All five VOC control facilities operated effectively during the reporting period, with emissions meeting regulatory standards and no exceedances reported[62]. Shareholder Information - The total amount of guarantees provided by the company, excluding those to subsidiaries, is CNY 245 million, which accounts for 22.39% of the company's net assets[59]. - The company has not proposed any profit distribution or capital reserve increase for the half-year period[49]. - The total owner's equity at the end of the reporting period is RMB 1,070,719,355.86, an increase from RMB 996,892,377.72 at the end of the previous period, reflecting a growth of approximately 7.37%[112]. Capital Structure - The company's registered capital is RMB 300 million, with a total of 300 million shares issued at a par value of RMB 1 per share[118]. - The ownership structure includes BVI Hongchang holding 70% of the shares, while other investors hold the remaining 30%[118]. - The company has undergone significant changes in its capital structure since its establishment, including multiple rounds of investment and capital increases[114]. Financial Reporting and Compliance - The financial statements comply with the requirements of the enterprise accounting standards, reflecting the company's financial position and operating results accurately[125]. - The company confirmed its ability to continue as a going concern for the next 12 months, with no significant doubts regarding its operational capability[124]. - The consolidated financial statements include all subsidiaries controlled by the company, including Hong Kong Hongchang and Zhuhai Hongchang[123].

Financial Performance - Operating revenue rose by 48.85% to CNY 373,499,165.74 year-on-year[8] - Net profit attributable to shareholders increased by 109.43% to CNY 19,928,285.20 compared to the same period last year[8] - Basic earnings per share increased by 113.33% to CNY 0.032 per share[8] - The operating profit for the period was ¥26,239,287.45, compared to ¥9,430,445.79 in the previous year, indicating a year-over-year increase of 77.8%[32] - The total comprehensive income for the period was ¥19,792,627.11, up from ¥9,491,986.85 in the previous year, representing an increase of 108.5%[30] Cash Flow - Cash flow from operating activities surged by 266.18% to CNY 75,230,699.97 year-to-date[8] - The net cash flow from operating activities was ¥75,230,699.97, a substantial rise from ¥20,544,927.29 in the same quarter of the previous year, reflecting an increase of approximately 267.5%[35] - Cash inflow from operating activities totaled CNY 492,050,588.47, up from CNY 264,160,868.60, reflecting a growth of 86.3% year-over-year[37] - Cash outflow from operating activities was CNY 445,974,811.44, compared to CNY 240,030,734.16, representing an increase of 86.0%[37] - The net decrease in cash and cash equivalents for the period was CNY 12,081,539.52, an improvement from a decrease of CNY 47,120,871.32 in the same quarter last year[38] Assets and Liabilities - Total assets increased by 3.52% to CNY 1,709,398,867.32 compared to the end of the previous year[8] - Total liabilities as of March 31, 2018, were CNY 465,983,759.60, slightly down from CNY 468,085,474.75 at the start of the year[27] - Total equity increased to CNY 1,095,109,618.13 as of March 31, 2018, from CNY 1,072,617,365.13 at the beginning of the year[27] - Accounts receivable decreased by 44.38% to ¥115,024,215.70 from ¥206,804,220.82, attributed to increased bill discounting and endorsements[3] - Inventory increased by 40.74% to ¥168,740,471.02 from ¥119,896,289.13, reflecting higher stock levels of raw materials and finished goods[3] Shareholder Information - The total number of shareholders reached 34,891 at the end of the reporting period[10] - The largest shareholder, Epoxy Base Investment Holding Ltd., holds 41.29% of the shares[12] Expenses and Financials - Operating costs rose to ¥323,731,167.57, up 46.17% from ¥221,468,385.12, primarily due to increased unit costs of products[16] - Financial expenses increased by 109.05% to ¥174,230.19, influenced by reduced bank interest income and increased exchange losses[16] - The company reported a significant increase in income tax expenses, which rose by 106.73% to ¥3,916,835.20, reflecting higher gross profit margins[17] - Other payables decreased by 74.45% to ¥24,043,256.06 from ¥94,103,856.57, due to payments made for construction projects[3] Investment Activities - Investment income surged by 628.00% to ¥229,530.14 from ¥31,528.77, due to higher interest income from financial products[17] - The company incurred an asset impairment loss of ¥1,567,585.62 in Q1 2018, compared to ¥384,672.00 in the same period last year, reflecting an increase of 308.5%[32] Company Developments - The company has not disclosed any new product developments or market expansion strategies in this report[4]

Financial Performance - In 2017, the company's operating revenue reached RMB 1,237,094,651.51, representing a year-on-year increase of 35.96% compared to RMB 909,889,780.26 in 2016[22]. - The net profit attributable to shareholders of the listed company was RMB 78,449,430.19, a significant increase of 194.05% from RMB 26,679,217.72 in the previous year[22]. - The basic earnings per share for 2017 was RMB 0.13, up 225.00% from RMB 0.04 in 2016[23]. - The total assets of the company at the end of 2017 amounted to RMB 1,651,264,012.33, reflecting a 9.3% increase from RMB 1,510,760,456.36 in 2016[22]. - The net assets attributable to shareholders of the listed company increased by 6.79% to RMB 1,098,115,586.92 at the end of 2017[22]. - The weighted average return on equity increased to 7.39% in 2017, up from 2.64% in 2016, marking an increase of 4.75 percentage points[23]. - The overall financial performance indicates a strong upward trend in revenue and profitability, positioning the company favorably for future growth[25]. - The company achieved operating revenue of 1.24 billion RMB, an increase of 35.96% year-on-year[48]. - Net profit reached 78.45 million RMB, representing a year-on-year growth of 194.05%[48]. Cash Flow and Assets - The company reported a net cash flow from operating activities of RMB 34,633,915.84, a decrease of 35.97% compared to RMB 54,093,171.59 in the previous year[22]. - The company's cash and cash equivalents decreased from 435.14 million RMB at the beginning of the year to 218.80 million RMB by the end of the year[193]. - Accounts receivable rose significantly from 271.98 million RMB at the beginning of the year to 390.17 million RMB by year-end, indicating increased sales activity[193]. - Inventory levels increased from 52.83 million RMB to 119.90 million RMB, suggesting a buildup of stock possibly in anticipation of future demand[193]. - The total current assets increased from 987.22 million RMB to 1,028.67 million RMB, indicating a positive liquidity position[193]. Production and Market Strategy - The company primarily engages in the production and sales of electronic-grade epoxy resin, which has remained unchanged since its establishment[31]. - The company plans to expand its market presence and enhance product development in response to growing demand in the electronics and coatings sectors[33]. - The company’s product categories include liquid epoxy resin, flame-retardant epoxy resin, solid epoxy resin, and solvent-based epoxy resin, each serving different industrial applications[32]. - The company aims to enhance product competitiveness and promote sustainable development based on customer demand and market competition[47]. - The company has established a research and development center for electronic-grade epoxy resin, holding 21 invention patents by the end of 2017[80]. Research and Development - Research and development expenses increased by 23.80% to 40.70 million RMB, reflecting a commitment to innovation[51]. - The company has initiated 21 research projects during the reporting period, with 6 new projects added, resulting in the development of 2 new products[46]. - The number of R&D personnel was 74, making up 22.49% of the total workforce[63]. - The company launched 2 new products during the reporting period and filed for 1 invention patent[64]. Risk Management and Compliance - The company emphasizes the importance of risk awareness regarding forward-looking statements in its annual report, advising investors to consider investment risks[6]. - Risks include potential profit decline due to significant fixed asset increases from the new high-tech chemical project, which may lead to higher depreciation costs[103]. - Increased safety and environmental regulations pose additional operational pressures and risks related to the handling of hazardous chemicals[104]. - The company has no significant integrity issues reported for its controlling shareholders or actual controllers[116]. Shareholder Engagement and Governance - The company has established a cash dividend policy, aiming for a minimum of 30% of distributable profits to be distributed as cash dividends annually[109]. - In 2017, the company distributed cash dividends of 0.64 RMB per share, with a payout ratio of 50.12%[110]. - The company emphasizes the importance of engaging with minority shareholders regarding profit distribution proposals to ensure transparency and inclusivity[108]. - The company has implemented a second phase of the restricted stock incentive plan, with key shareholders receiving a total of 2,520,000 restricted shares contingent on performance assessments[152]. Environmental and Social Responsibility - The company has focused on safety and environmental protection, implementing measures to reduce emissions and improve monitoring[46]. - The company has invested 3.5 million RMB in environmental protection measures, including the installation of a new VOC treatment system[133]. - The company has actively participated in social responsibility initiatives, including disaster recovery efforts in Zhuhai[131]. Market Dynamics - The average domestic epoxy resin price was around RMB 14,400 per ton in the first half, which rose to approximately RMB 27,000 per ton by December 2017 due to supply-demand improvements and rising raw material costs[45]. - The domestic epoxy resin market is characterized by a concentration of production capacity and a shift towards specialized, high-value products[75]. - The electronic and electrical sectors are the primary application areas for epoxy resin, with strong demand expected from automotive electronics and new energy vehicles[73].