Financial Performance - The company's operating revenue for Q1 2023 was ¥2,394,468,174.84, a decrease of 22.41% compared to the same period last year[4] - Net profit attributable to shareholders was ¥396,561,190.75, down 61.97% year-on-year[4] - The net cash flow from operating activities was ¥347,430,102.23, reflecting a decline of 42.92% compared to the previous year[4] - Basic and diluted earnings per share were both ¥0.0455, representing a decrease of 62.08% year-on-year[4] - The weighted average return on equity was 2.05%, a decrease of 4.83 percentage points from the previous year[4] - The company experienced a significant decline in sales volume and gross profit, impacting overall financial performance[7] - The net profit for Q1 2023 was CNY 381,460,623.90, a decrease of 63.5% compared to CNY 1,045,126,299.13 in Q1 2022[18] - Operating profit for Q1 2023 was CNY 477,206,214.04, down 61.2% from CNY 1,230,073,011.36 in the same period last year[18] - Total revenue from operating activities was CNY 1,914,538,269.42, a decline from CNY 2,202,926,260.42 in Q1 2022[22] - The company reported a decrease in total comprehensive income to CNY 370,228,317.28, compared to CNY 1,045,773,792.08 in the previous year[19] Assets and Liabilities - Total assets at the end of the reporting period were ¥24,037,510,067.91, a slight decrease of 0.27% from the end of the previous year[5] - The total assets as of March 31, 2023, were CNY 24,037,510,067.91, a slight decrease from CNY 24,102,627,180.48 at the end of 2022[16] - The total liabilities decreased to CNY 3,867,668,111.54 from CNY 4,339,408,910.04, indicating a reduction of about 10.8%[15] - The total liabilities amounted to 4,340,960,469.09 RMB, with a slight increase of 1,551,559.05 RMB from the previous reporting period[26] - The total current assets were reported at 9,718,871,752.72 RMB, consistent with the previous period[25] Shareholder Equity - Shareholders' equity attributable to the parent company increased by 2.21% to ¥19,541,572,552.22 compared to the end of the previous year[5] - The company's equity attributable to shareholders increased to CNY 19,541,572,552.22 from CNY 19,118,356,709.62, reflecting a growth of approximately 2.2%[16] - The total equity attributable to shareholders was 19,118,356,709.62 RMB, remaining stable compared to the previous period[26] Cash Flow and Expenses - Cash flow from operating activities netted CNY 347,430,102.23, down 42.9% from CNY 608,684,674.99 in Q1 2022[22] - The total amount of cash received from sales and services was CNY 1,831,836,825.36, down from CNY 2,150,617,492.61 in Q1 2022[20] - The company incurred financial expenses of CNY 4,888,913.82, a decrease from CNY 7,822,077.06 in the same quarter last year[18] - The company reported a significant reduction in tax expenses to CNY 95,123,195.45 from CNY 182,502,911.84 in the previous year[18] - The net cash flow from financing activities for Q1 2023 was -192,397,264.30 RMB, a significant decrease compared to 705,492,807.09 RMB in Q1 2022[23] - The total cash and cash equivalents at the end of Q1 2023 amounted to 4,521,617,841.20 RMB, down from 2,743,067,767.20 RMB at the end of Q1 2022[23] - The net increase in cash and cash equivalents for Q1 2023 was -23,240,242.97 RMB, contrasting with an increase of 1,062,070,010.26 RMB in Q1 2022[23] Inventory and Receivables - Accounts receivable increased to CNY 967,737,627.47 in Q1 2023 from CNY 777,990,967.77 in Q1 2022, reflecting a growth of about 24.4%[14] - Inventory as of March 31, 2023, was CNY 2,340,898,666.66, compared to CNY 2,076,049,121.12 in the previous year, marking an increase of approximately 12.7%[14] - The company's inventory stood at 2,076,049,121.12 RMB, unchanged from the previous reporting period[25] - The total amount of accounts receivable was reported at 777,990,967.77 RMB, remaining stable compared to the previous period[24] Research and Development - Research and development expenses increased to CNY 9,108,322.93, up 18.7% from CNY 7,666,274.21 in Q1 2022[18] Production Developments - The company is progressing with the development of a 1,000t/d photovoltaic glass panel production line, which has officially commenced production[11]

北京国枫律师事务所 关于四川和邦生物科技股份有限公司 申请公开发行可转换公司债券的 补充法律意见书之二 国枫律证字[2022]AN259-9 号 GRANDWAY 北京国枫律师事务所 Grandway Law Offices 北京市东城区建国门内大街 26 号新闻大厦７层 邮编:100005 电话（Tel）: 010-88004488/66090088 传真(Fax):010-66090016 北京国枫律师事务所 关于四川和邦生物科技股份有限公司 申请公开发行可转换公司债券的 补充法律意见书之二 国枫律证字[2022|AN259-9号 致:四川和邦生物科技股份有限公司（发行人） 根据本所与发行人签订的《律师服务协议书》,本所接受发行人委托,为发 行人本次发行项目提供专项法律服务。本所已根据相关法律、法规、规章和规范 性文件的规定并按照律师行业公认的业务标准、道德规范和勤勉尽责精神,对发 行人提供的文件和有关事实进行了查验,并就发行人本次公开发行可转债事宜出 具了《北京国枫律师事务所关于四川和邦生物科技股份有限公司申请公开发行可 转换公司债券的法律意见书》《北京国枫律师事务所关于四川和邦生物科技股份 有限公司申 ...

Financial Performance - The company’s operating revenue for 2022 was approximately ¥13.04 billion, representing a year-on-year increase of 30.55% compared to ¥9.99 billion in 2021[21]. - The net profit attributable to shareholders for 2022 was approximately ¥3.81 billion, a 26.12% increase from ¥3.02 billion in 2021[21]. - The basic earnings per share for 2022 was ¥0.4377, reflecting a growth of 22.33% compared to ¥0.3578 in 2021[22]. - The company's total assets at the end of 2022 reached approximately ¥24.10 billion, a 34.48% increase from ¥17.92 billion at the end of 2021[21]. - The net cash flow from operating activities for 2022 was approximately ¥2.64 billion, a decrease of 19.15% compared to ¥3.27 billion in 2021[21]. - The weighted average return on equity for 2022 was 22.47%, a decrease of 1.32 percentage points from 23.79% in 2021[22]. - The net assets attributable to shareholders at the end of 2022 were approximately ¥19.12 billion, a 34.21% increase from ¥14.25 billion at the end of 2021[21]. - The company achieved a revenue of 13.04 billion RMB in 2022, representing a growth of 30.55% compared to the previous year[61]. - The net profit attributable to shareholders was 3.81 billion RMB, an increase of 26.12% year-on-year[61]. Dividends and Share Capital - The proposed cash dividend for 2022 is CNY 0.45 per share (including tax), totaling CNY 392,632,352.96, which accounts for 10.31% of the net profit attributable to shareholders[5]. - The total share capital as of December 31, 2022, is 8,831,250,228 shares, with 106,086,829 shares held in the company's repurchase account[5]. Projects and Investments - The company has ongoing projects including an annual production of 8GW photovoltaic packaging materials and products, a 10GW ultra-high-efficiency monocrystalline silicon wafer project, and a 500,000-ton glyphosate project, which may impact future performance if they do not meet expected benefits[9]. - The company is investing in a new project to produce 500,000 tons of glyphosate annually, reinforcing its position as the largest global supplier of glyphosate[33]. - The company is investing in a 10GW N-type ultra-high-efficiency monocrystalline silicon wafer project, enhancing its position in the photovoltaic industry[57]. - The company plans to invest approximately 16.7 billion RMB in a new 500,000 tons/year glyphosate production line in Guang'an[119]. - The company is actively developing a 1 million tons/year phosphate mining project, with construction progressing as planned and initial sales of engineering ore achieved[52]. Market and Product Development - The company is actively involved in the development of new products and technologies, particularly in the renewable energy sector[9]. - The company has expanded its product offerings to include photovoltaic glass and silicon wafers, contributing to revenue growth[21]. - The company is expanding its agricultural product offerings, including glyphosate and biopesticides, which are expected to enhance its market position in the agricultural sector[52]. - The company is actively developing new products in the biopesticide sector and collaborating with major industry players for product registration and development[98]. Operational Challenges - The company faced production disruptions for over 20 days due to extreme high temperatures and drought in Sichuan, impacting the output and increasing unit costs of key products[31]. - The company reported that its product gross margin is significantly affected by sales price fluctuations, which can lead to performance volatility[9]. Environmental and Social Responsibility - The company has invested approximately 12,968.07 million RMB in environmental protection during the reporting period[168]. - The company has implemented a comprehensive environmental management system compliant with ISO 14001:2015 standards[175]. - The company has not experienced any environmental incidents or administrative penalties during the reporting period[179]. - The company donated a total of 250,000 RMB to the Sichuan Provincial Poverty Alleviation Foundation for emergency rescue capacity enhancement projects in Wutongqiao and surrounding towns[182]. - The company contributed 20,000 RMB to the Sichuan Women and Children Foundation to support children in difficult situations in Leshan City[181]. Governance and Management - The governance structure of the company adheres to relevant laws and regulations, ensuring effective checks and balances among the board, supervisory board, and management[135]. - The company has not faced significant differences in governance compared to regulatory requirements[135]. - The board of directors emphasized the importance of sustainability initiatives, committing to reduce carbon emissions by 40% by 2025[138]. - The company has a structured approach to remuneration, ensuring transparency and accountability in compensation decisions[142]. - The company has approved a three-year shareholder return plan for 2022-2024, indicating a commitment to returning value to shareholders[145]. Future Outlook - The management team highlighted the successful integration of recent acquisitions, which is expected to enhance overall profitability by 5% in the upcoming fiscal year[138]. - The company provided a positive outlook for 2023, projecting a revenue growth of 25% driven by new product launches and market expansion[138]. - The company plans to expand its market presence in Southeast Asia, targeting a 10% market share by the end of 2023[138].

[Definitions](index=4&type=section&id=Section%201%20Definitions) This section provides definitions and explanations of key terms, company abbreviations, and related parties used throughout the report - The chapter defines company abbreviations, related parties, project names, and professional terminology, essential for report comprehension[9](index=9&type=chunk) [Company Profile and Key Financial Indicators](index=5&type=section&id=Section%202%20Company%20Profile%20and%20Key%20Financial%20Indicators) [Company Information and Key Financial Indicators](index=5&type=section&id=Company%20Information%20and%20Key%20Financial%20Indicators) The company achieved explosive H1 2021 performance, with revenue up **60.18%** and net profit surging **1930.72%**, driven by product price increases and operational efficiency 2021 Half-Year Key Financial Data | Indicator | Current Period (Jan-Jun) | Prior Year Period | YoY Change (%) | | :--- | :--- | :--- | :--- | | **Operating Revenue** | 3.913 billion yuan | 2.443 billion yuan | 60.18% | | **Net Profit Attributable to Shareholders** | 0.914 billion yuan | 0.045 billion yuan | 1,930.72% | | **Net Profit Attributable to Shareholders (Excluding Non-Recurring Items)** | 0.910 billion yuan | 0.034 billion yuan | 2,561.04% | | **Net Cash Flow from Operating Activities** | 1.333 billion yuan | -0.122 billion yuan | N/A | | **Basic Earnings Per Share (yuan/share)** | 0.1082 | 0.0052 | 1,980.77% | | **Weighted Average Return on Net Assets (%)** | 7.92% | 0.40% | increased by 7.52 percentage points | - Core drivers of significant performance growth: - **Product price increases**: Major products like soda ash, glass, glyphosate, and glycine saw substantial price hikes due to industry consolidation and demand growth - **Production optimization**: Upgrades to the glycine project improved capacity utilization and cost control, enhancing product competitiveness and profitability[18](index=18&type=chunk) [Management Discussion and Analysis](index=7&type=section&id=Section%203%20Management%20Discussion%20and%20Analysis) [Industry and Main Business Overview](index=7&type=section&id=3.1%20Report%20Period%20Industry%20and%20Main%20Business%20Overview) The company, a platform based on salt and natural gas resources, operates in chemicals, agriculture, and new materials, benefiting from high industry prosperity and advancing new energy projects - The company has formed four major business segments: soda ash, glyphosate/glycine, methionine, and glass/photovoltaic products[21](index=21&type=chunk) Main Business Capacity and Projects Under Construction | Business Type | Project | Capacity/Scale | | :--- | :--- | :--- | | **Existing Business** | Sodium Carbonate/Ammonium Chloride | 1.1 million tons/year | | | Glycine | 0.15 million tons/year | | | Glyphosate | 0.05 million tons/year | | | Glass/Smart Specialty Glass | 0.465 million tons/year | | **Projects Under Construction** | Methionine Project | 0.07 million tons/year (in trial production) | | | Chongqing Photovoltaic Encapsulation Material Project | Phase I: 1000 tons/day PV glass panel line, 900 tons/day back panel line, 2 GW module line | | | Panzhihua Photovoltaic Glass Project | 60 million square meters/year PV encapsulation material line and 2 GW module line | - Favorable industry trends: - **Glyphosate**: The industry entered a normal profit range with sustained price increases, driven by environmental regulations, pandemic-induced capacity reduction, and expanding downstream demand[24](index=24&type=chunk) - **Soda Ash**: Prices reached a new high due to increased demand from photovoltaic glass expansion under "carbon neutrality" goals, while environmental and energy consumption controls limited capacity growth[26](index=26&type=chunk) - **Glass**: Capacity is strictly limited, but demand from photovoltaic and construction sectors is rising, indicating a positive long-term outlook for the industry[28](index=28&type=chunk) [Discussion and Analysis of Operations](index=12&type=section&id=3.2%20Discussion%20and%20Analysis%20of%20Operations) The company experienced robust sales and enhanced profitability for its main products, with significant price increases, substantial revenue growth, and increased investment in photovoltaic projects YoY Change in Average Prices of Main Products, Jan-Jun 2021 | Product | Average Price Jan-Jun 2021 | YoY Growth | | :--- | :--- | :--- | | Glycine | 14,833.73 yuan/ton | 33.70% | | Glyphosate | 30,173.51 yuan/ton | 51.53% | | Raw Glass | 2,155.39 yuan/ton | 61.09% | | Sodium Carbonate | 1,510.49 yuan/ton | 18.83% | Analysis of Major Financial Statement Item Changes | Item | Change (%) | Main Reason | | :--- | :--- | :--- | | **Operating Revenue** | 60.18% | Increase in product volume and price | | **Selling Expenses** | -81.25% | Sales freight reclassified to operating costs | | **Net Cash Flow from Operating Activities** | N/A | Significant increase in sales revenue, strong operating performance | | **Net Cash Flow from Investing Activities** | -334.15% | Increased investment expenditures for photovoltaic projects | | **Net Cash Flow from Financing Activities** | -409.99% | Increased repayment of bank loans and share repurchases | Performance of Major Holding and Investee Companies | Company Name | Role | Net Profit (yuan) | | :--- | :--- | :--- | | Hebang Agrochemical | Subsidiary | 383,046,099.39 | | Wujun Glass | Subsidiary | 256,760,723.79 | | Hebang Salt Mine | Subsidiary | 26,715,526.41 | | Israel S.T.K. | Subsidiary | -22,213,630.27 | | Shuncheng Salt Products | Associate Company | 7,516,533.94 | - Key risks faced by the company include: - **Market price fluctuation risk**: Company products are highly market-driven, and price volatility directly impacts performance - **Risk of underperforming projects under construction**: Methionine and photovoltaic projects may not achieve expected benefits, posing uncertainty to performance growth[47](index=47&type=chunk) [Corporate Governance](index=17&type=section&id=Section%204%20Corporate%20Governance) [Corporate Governance Status](index=17&type=section&id=4.1%20Corporate%20Governance%20Status) The company maintained a stable governance structure, held its 2020 annual general meeting, saw board and management changes, and extended its first employee stock ownership plan - Mr. Song Keli, a company director, and Mr. Wang Yaxi, a deputy general manager, retired; Ms. Qin Xueling was elected as a new director by the general meeting of shareholders[49](index=49&type=chunk) - The first phase of the company's employee stock ownership plan was extended by 24 months, until November 1, 2022[53](index=53&type=chunk) [Environmental and Social Responsibility](index=18&type=section&id=Section%205%20Environmental%20and%20Social%20Responsibility) [Environmental Information](index=18&type=section&id=5.1%20Environmental%20Information) The company and its subsidiaries are key polluters, but prioritize environmental protection with robust management systems, compliance with EIA for projects, and emergency response plans - The company and its subsidiaries, Hebang Agrochemical and Wujun Glass, are designated as national and municipal key polluting units, primarily for wastewater (ammonia nitrogen, COD) and exhaust gas (sulfur dioxide, nitrogen oxides, particulate matter)[54](index=54&type=chunk) - The company has equipped comprehensive wastewater and exhaust gas treatment facilities, achieved ultra-low emissions for boiler flue gas, implemented environmental impact assessments for all projects, and obtained environmental management system certifications[57](index=57&type=chunk)[58](index=58&type=chunk) - The company and its subsidiaries have revised and filed their Emergency Response Plans for Environmental Incidents, conducting regular training and drills[59](index=59&type=chunk) [Significant Matters](index=22&type=section&id=Section%206%20Significant%20Matters) [Overview of Significant Matters](index=22&type=section&id=6.1%20Overview%20of%20Significant%20Matters) The company and related parties fulfilled commitments, with no major litigation or illegal guarantees, and conducted routine related-party transactions, while optimizing structure through asset transfers and subsidiary capital increases - The company's controlling shareholder, Hebang Group, and actual controller, Mr. He Zhenggang, continue to fulfill their long-term commitment to avoid horizontal competition[66](index=66&type=chunk) - Routine related-party transactions primarily involve purchasing industrial salt from Shuncheng Salt Products and coal from Jixiang Coal and Shoubao Coal, adhering to market pricing principles[69](index=69&type=chunk) - To integrate internal resources, the company gratuitously transferred its glyphosate production line and related operating assets and liabilities to its wholly-owned subsidiary, Hebang Agrochemical, with a net asset transfer of **500 million yuan** recorded in Hebang Agrochemical's capital reserve[76](index=76&type=chunk) - Subsidiary Wujun Glass introduced investors through capital increase, reducing the company's stake from 100% to **88.38%**, while maintaining its status as a controlling subsidiary[44](index=44&type=chunk) [Share Changes and Shareholder Information](index=26&type=section&id=Section%207%20Share%20Changes%20and%20Shareholder%20Information) [Share Changes and Shareholder Information](index=26&type=section&id=7.1%20Share%20Changes%20and%20Shareholder%20Information) The company's total share capital and structure remained unchanged, with 157,767 shareholders at period-end, and Sichuan Hebang Investment Group Co., Ltd. as the controlling shareholder - During the reporting period, the company's total share capital and share structure remained unchanged[77](index=77&type=chunk) Top Five Shareholders as of the End of the Reporting Period | Shareholder Name | Number of Shares Held | Proportion (%) | | :--- | :--- | :--- | | Sichuan Hebang Investment Group Co., Ltd. | 2,493,195,803 | 28.23 | | Sichuan Provincial Salt Industry General Company | 700,626,010 | 7.93 | | He Zhenggang | 412,632,000 | 4.67 | | Hong Kong Securities Clearing Company Limited | 349,301,857 | 3.96 | | Western Profit Fund - Industrial Bank - Huaxin International Trust - Huaxin Trust · Huizhi Investment No. 77 Collective Fund Trust Plan | 199,870,334 | 2.26 | [Preferred Share Information](index=28&type=section&id=Section%208%20Preferred%20Share%20Information) There is no preferred share information for the company during this reporting period - There is no preferred share information for the company during this reporting period[81](index=81&type=chunk) [Bond Information](index=28&type=section&id=Section%209%20Bond%20Information) There is no information regarding corporate bonds, company bonds, or non-financial enterprise debt financing instruments for the company during this reporting period - There is no information regarding corporate bonds, company bonds, or non-financial enterprise debt financing instruments for the company during this reporting period[81](index=81&type=chunk) [Financial Report](index=29&type=section&id=Section%2010%20Financial%20Report) [Financial Statements](index=29&type=section&id=10.1%20Financial%20Statements) This section includes the company's unaudited H1 2021 consolidated and parent company balance sheets, income statements, cash flow statements, and statements of changes in equity - The report includes consolidated and parent company balance sheets, income statements, cash flow statements, and statements of changes in owners' equity[83](index=83&type=chunk)[86](index=86&type=chunk)[89](index=89&type=chunk)[96](index=96&type=chunk)[101](index=101&type=chunk) [Notes to Financial Statements](index=50&type=section&id=10.2%20Notes%20to%20Financial%20Statements) Notes detail the company's background, financial statement preparation basis, significant accounting policies, and major consolidated financial statement items, including new lease standard adoption and related party disclosures - The company adopted new lease standards from January 1, 2021, adjusting opening retained earnings and related statement items without restating comparable periods, resulting in an increase of **23.7386 million yuan** in right-of-use assets and **22.6870 million yuan** in lease liabilities at the beginning of the period[193](index=193&type=chunk)[194](index=194&type=chunk)[195](index=195&type=chunk) - The company and its main subsidiaries (Hebang Salt Mine, Hebang Agrochemical, Wujun Glass, Yongjiang Industrial) are subject to a reduced corporate income tax rate of **15%** due to Western Development tax incentives[200](index=200&type=chunk)[201](index=201&type=chunk) - As of the end of the reporting period, the total book value of assets with restricted ownership or use rights amounted to **1.143 billion yuan**, primarily fixed and intangible assets pledged for bank loans[336](index=336&type=chunk)