Financial Performance - The company's operating revenue for 2022 was approximately ¥4.77 billion, representing a year-over-year increase of 17.84% compared to ¥4.05 billion in 2021[16]. - The net profit attributable to shareholders for 2022 was approximately ¥485.57 million, a decrease of 9.44% from ¥536.17 million in 2021[16]. - The net profit attributable to shareholders after deducting non-recurring gains and losses was approximately ¥451.10 million, down 6.79% from ¥483.98 million in 2021[16]. - The net cash flow from operating activities for 2022 was approximately ¥628.73 million, an increase of 158.22% compared to ¥243.49 million in 2021[16]. - The total assets at the end of 2022 were approximately ¥6.43 billion, reflecting a 6.26% increase from ¥6.05 billion at the end of 2021[16]. - The net assets attributable to shareholders at the end of 2022 were approximately ¥5.71 billion, up 7.97% from ¥5.29 billion at the end of 2021[16]. - The weighted average return on equity decreased by 1.46 percentage points to 8.84%[1]. - The company reported a basic earnings per share of CNY 0.80, down 9.09% from CNY 0.88 in the previous year[1]. Dividend Policy - The company plans to distribute a cash dividend of 2.39 CNY per 10 shares, totaling approximately 145.90 million CNY (including tax) based on a total share capital of 610,479,037 shares as of December 31, 2022[2]. - The company has established a cash dividend policy, stating that the total cash dividends should not be less than 20% of the audited net profit attributable to shareholders in the current year[156]. - The cash dividend represents 19.36% of the net profit attributable to ordinary shareholders in the consolidated financial statements, which amounted to 536,168,573.50 RMB[161]. - The total dividend amount, including cash buybacks, is 268,605,244.78 RMB, accounting for 50.10% of the net profit attributable to ordinary shareholders[161]. - The company maintains a cash dividend policy where at least 40% of profits are distributed as cash dividends during the mature stage of development with significant capital expenditures[157]. - The company has not made any adjustments to its profit distribution policy during the reporting period[158]. Corporate Governance - The company has established a robust governance structure, holding three shareholder meetings during the reporting period to ensure transparency and protect shareholder rights[122]. - The company held 6 board meetings during the reporting period, with 9 current directors, including 3 independent directors, ensuring compliance with legal regulations[123]. - The company established a comprehensive performance evaluation system for senior management, linking compensation closely to performance, with core management holding shares in the company[125]. - The company maintained strict independence from its controlling shareholders and related parties in personnel, assets, finance, and operations, ensuring independent accounting and risk management[126]. - The company engaged in effective communication with investors through various channels, ensuring fair treatment of institutional and retail investors[126]. - The company emphasized environmental protection and social responsibility, increasing investment in environmental governance and supporting community welfare initiatives[126]. Risk Management - The company has outlined potential risks and corresponding countermeasures in the report, particularly in the section discussing future development[4]. - The company is addressing cyclical industry risks by closely monitoring macroeconomic conditions and downstream market demands, which significantly impact the fluorochemical sector[116]. - The company is facing a cyclical downturn in the fluorochemical industry, primarily due to oversupply and price declines[111]. - The company anticipates that the supply-demand relationship will improve as HFCs quota policies are implemented and industry capacity contracts during the downturn[111]. - The company is monitoring foreign exchange risks related to its export activities and will utilize financial instruments like forward contracts to mitigate these risks[120]. Environmental and Social Responsibility - The company invested 13.8011 million yuan in environmental protection during the reporting period[168]. - The total emissions of nitrogen oxides were 3.6193 tons, with a concentration of 11.627 mg/m³, well below the standard of 35 mg/m³[169]. - The total emissions of sulfur dioxide were 0.8513 tons, with a concentration of 2.683 mg/m³, below the standard of 50 mg/m³[169]. - The company has established an environmental protection mechanism and is classified as a key pollutant discharge unit[168]. - The company has implemented emergency response plans for environmental incidents, including comprehensive and specialized plans for hazardous chemical accidents and flood prevention[174]. - The company invested 2.8578 million yuan in social responsibility initiatives, benefiting 4,526 individuals through various charitable activities[183]. Research and Development - The company has invested in 28 R&D projects focusing on optimizing production processes and developing new products, including environmentally friendly refrigerants and fine chemicals[87]. - The company holds 96 authorized patents and has 43 pending patent applications, primarily in the fields of production processes and environmental technologies[87]. - Research and development expenses rose by 42.82% to CNY 38,310,662.41, reflecting increased investment in R&D projects[48]. Production Capacity and Operations - The company has a production capacity of 131,000 tons for anhydrous hydrofluoric acid (AHF), which helps in managing costs and enhancing profitability[26]. - The company has a production capacity of 65,000 tons for HFC-134a, 52,000 tons for HFC-125, 40,000 tons for HFC-32, and 10,000 tons for HFC-143a, making HFCs refrigerants the company's primary product[41]. - The company has a production capacity of 14,400 tons for HCFC-22, with 11,800 tons allocated for refrigerant production, accounting for 5.25% of the national production quota[37]. - The company has a production capacity of 35,600 tons for HCFC-141b, with 28,000 tons allocated for foaming agent production, representing 55.05% of the national production quota[38]. - The company is expanding AHF production capacity from 31,000 tons to 90,000 tons through ongoing projects[97]. Market Position and Strategy - The company is focusing on the integration of the industrial chain with investments in fluorinated refrigerants, fine chemicals, and polymers to foster new growth points[32]. - The company aims to become a leading manufacturer of refrigerants and fluorinated chemicals, with a focus on HFCs and fluoropolymer products[112]. - The company is committed to maintaining its market position in HFCs refrigerants while developing new environmentally friendly refrigerants and expanding into high-value products like fluoropolymers and fine chemicals[117]. Shareholder Engagement - The company ensures that minority shareholders have sufficient opportunities to express their opinions and that their legal rights are fully protected[159]. - The independent directors have fulfilled their responsibilities and played a significant role in the decision-making process regarding profit distribution[159]. - The company has committed to repurchase all newly issued shares within 3 trading days if any false statements or omissions are identified in the prospectus, with the repurchase price being the lower of the market price or the issuance price[194].

浙江三美化工股份有限公司 关于召开 2022 年度业绩说明会的公告 证券代码：603379 证券简称：三美股份 公告编号：2023-023 本公司董事会及全体董事保证本公告内容不存在任何虚假记载、误导性陈述 或者重大遗漏，并对其内容的真实性、准确性和完整性承担法律责任。 重要内容提示： 浙江三美化工股份有限公司（以下简称"公司"）于 2023 年 4 月 21 日发布 公司 2022 年年度报告，为便于广大投资者更全面深入地了解公司 2022 年度经营 成果、财务状况，公司计划于 2023 年 5 月 4 日下午 15:00-16:00 举行 2022 年度 业绩说明会，就投资者关心的问题进行交流。 一、说明会类型 本次投资者说明会以网络互动形式召开，公司将针对 2022 年度的经营成果 及财务指标的具体情况与投资者进行互动交流和沟通，在信息披露允许的范围内 就投资者普遍关注的问题进行回答。 二、说明会召开的时间、地点 会议召开时间：2023 年 05 月 04 日（星期四）下午 15:00-16:00 会 议 召 开 地 点 ： 上 海 证 券 交 易 所 上 证 路 演 中 心 （ 网 址 ： http: ...

Financial Performance - The company's operating revenue for Q3 2022 was CNY 1,199,272,857.41, representing a year-on-year increase of 23.54%[4] - The net profit attributable to shareholders for the same period was CNY 117,708,982.93, up 15.98% compared to the previous year[4] - The net profit attributable to shareholders after deducting non-recurring gains and losses increased by 33.66% year-on-year, totaling CNY 116,987,682.07[4] - Total operating revenue for the first three quarters of 2022 reached ¥3,768,143,775.51, a significant increase of 37.5% compared to ¥2,738,821,996.93 in the same period of 2021[15] - Net profit for Q3 2022 was ¥461,728,475.61, representing a 90.0% increase from ¥242,980,284.85 in Q3 2021[16] - Total comprehensive income for Q3 2022 was ¥461,725,746.66, compared to ¥242,960,295.82 in Q3 2021, reflecting strong growth[17] Earnings and Shareholder Information - The basic earnings per share for the year-to-date period was CNY 0.76, reflecting a 90.00% increase year-on-year[4] - Basic and diluted earnings per share for Q3 2022 were both ¥0.76, up from ¥0.40 in Q3 2021[17] - The company reported a total of 21,390 common shareholders at the end of the reporting period[9] - The top shareholder, Hu Rongda, holds 37.83% of the shares, totaling 230,913,959 shares[9] Assets and Liabilities - The total assets at the end of the reporting period reached CNY 6,414,603,121.92, a 6.01% increase from the end of the previous year[5] - As of September 30, 2022, the company's total assets amounted to RMB 6,414,603,121.92, an increase from RMB 6,051,148,356.58 at the end of 2021, reflecting a growth of approximately 6%[12][14] - The company's total liabilities decreased to RMB 736,128,958.99 from RMB 762,777,536.01, showing a reduction of about 3.5%[14] - The total equity attributable to shareholders increased to RMB 5,678,474,162.93 from RMB 5,288,370,820.57, marking an increase of approximately 7.4%[14] Cash Flow - The net cash flow from operating activities for the year-to-date period increased by 169.44% year-on-year, amounting to CNY 598,794,811.41[4] - Cash flow from operating activities for the first three quarters of 2022 was ¥2,921,995,958.27, up 54.8% from ¥1,887,278,295.71 in the same period of 2021[18] - Net cash flow from operating activities in Q3 2022 was ¥598,794,811.41, a substantial increase from ¥222,239,854.47 in Q3 2021[19] - The company reported a net cash inflow from investment activities of ¥1,158,965,137.97 in Q3 2022, a turnaround from a net outflow of -¥1,199,188,025.73 in Q3 2021[19] Costs and Expenses - Total operating costs for the first three quarters of 2022 were ¥3,170,178,937.53, up 32.2% from ¥2,398,628,857.26 in the first three quarters of 2021[15] - R&D expenses in Q3 2022 amounted to ¥26,314,646.13, an increase of 32.0% compared to ¥19,955,443.97 in Q3 2021[16] - The company’s tax expenses for Q3 2022 were ¥150,632,648.64, compared to ¥86,940,021.07 in Q3 2021, indicating increased profitability[16] Inventory and Receivables - Accounts receivable decreased to RMB 441,733,243.32 from RMB 636,633,697.92, representing a decline of approximately 31%[12] - The company's inventory decreased to RMB 453,491,649.59 from RMB 502,806,589.86, reflecting a decline of about 9.8%[12] - The company reported a significant reduction in other receivables, which fell to RMB 23,939,032.96 from RMB 64,907,016.88, a decrease of approximately 63%[12] Cash and Cash Equivalents - The company's cash and cash equivalents reached RMB 3,400,122,437.60, significantly up from RMB 1,612,620,164.27 in the previous year, indicating an increase of about 110%[12] - The total cash and cash equivalents increased by $1,803,425,273.33, compared to a decrease of $1,051,682,863.04 in the prior year[20] - The ending balance of cash and cash equivalents reached $3,371,162,437.60, up from $1,432,451,656.62 in the previous period[20] - The impact of exchange rate changes on cash and cash equivalents was $67,604,002.20, contrasting with -$7,581,997.71 in the prior year[20]

Financial Performance - The company reported a total revenue of 1.2 billion CNY for the first half of 2022, representing a year-on-year increase of 15%[1]. - The company's operating revenue for the first half of 2022 was CNY 2,568,870,918.10, representing a year-on-year increase of 45.29%[16]. - The net profit attributable to shareholders for the same period was CNY 344,019,492.68, a significant increase of 143.14% compared to the previous year[16]. - The net profit attributable to shareholders after deducting non-recurring gains and losses was CNY 318,209,142.40, reflecting a year-on-year growth of 119.25%[16]. - The net cash flow from operating activities increased by 317.97% to CNY 354,319,812.09, primarily due to increased cash received from sales of goods and services[18]. - Basic earnings per share for the first half of 2022 were CNY 0.57, a 147.83% increase from CNY 0.23 in the same period last year[17]. - The company's total comprehensive income for the first half of 2022 was approximately ¥332.80 million, compared to ¥89.75 million in the same period of 2021[123]. - The company's financial expenses showed a significant increase, with a net financial cost of approximately -¥64.52 million in the first half of 2022, compared to -¥2.25 million in the same period of 2021[122]. Market Expansion and Strategy - The company plans to expand its market presence in Southeast Asia, targeting a 25% market share by the end of 2023[1]. - New product launches are expected to contribute an additional 200 million CNY in revenue by Q4 2022[1]. - The company is focusing on expanding its production capacity and market presence in response to the growing demand for fluorinated chemicals in various industries[24]. - The company is considering strategic acquisitions to bolster its competitive position, with potential targets identified in the tech sector[91]. - A new marketing strategy is being implemented, aiming to improve customer engagement and retention by 25%[91]. Research and Development - Research and development expenses increased by 30% to 150 million CNY, focusing on innovative chemical products[1]. - Research and development investments increased by 40%, focusing on innovative technologies to enhance product offerings[91]. - The company holds 81 authorized patents and has 52 patent applications pending, focusing on new refrigerants and fine chemical products[43]. Sustainability and Environmental Commitment - The company has committed to sustainability initiatives, aiming for a 50% reduction in carbon emissions by 2025[1]. - The company is committed to green production and has implemented energy-saving management plans to eliminate high-energy-consuming equipment[82]. - The company has implemented energy-saving measures, including the use of high-efficiency materials and advanced control systems, to further reduce energy consumption and carbon emissions[82]. - The company has established a comprehensive safety management system and emergency response teams to mitigate safety and environmental risks associated with its operations[56]. Risks and Challenges - The management highlighted potential risks including raw material price fluctuations and regulatory changes impacting operations[1]. - The company is sensitive to product price fluctuations, and ongoing supply-demand imbalances may lead to sustained price declines, adversely affecting performance[58]. - The company has faced trade protectionism challenges, with investigations initiated by the US, India, and Argentina against its HFC refrigerants, posing risks to its export operations[61]. Shareholder and Financial Management - The company has implemented an employee stock ownership plan, with 6.58 million shares transferred at a price of 12.53 CNY per share[67]. - The company plans to implement a stock buyback program, purchasing shares at a price not exceeding the audited net asset value per share from the previous fiscal year[92]. - The company commits to a cash dividend to all shareholders, not exceeding 20% of the previous year's audited net profit attributable to shareholders, if stock price stabilization measures are not taken[86]. - The company has established a long-term commitment to maintaining compliance with stock distribution requirements post-repurchase[90]. Production Capacity and Product Offerings - The production capacity for HFCs refrigerants includes 65,000 tons for HFC-134a, 52,000 tons for HFC-125, 40,000 tons for HFC-32, and 10,000 tons for HFC-143a, making HFCs the company's primary product[25]. - The company has a production capacity of 131,000 tons for anhydrous hydrofluoric acid (AHF), which is essential for the production of fluorinated refrigerants and other fluorine-based products[27]. - The company’s AHF production capacity utilization rate remains high, providing a cost advantage as AHF accounts for approximately 30% of the production cost of fluorinated refrigerants[34]. Compliance and Governance - The financial statements were approved by the board of directors on August 24, 2022[138]. - The company has not reported any violations or penalties involving its directors, supervisors, senior management, or controlling shareholders during the reporting period[96]. - The company has not engaged in any non-operating fund occupation by controlling shareholders or related parties during the reporting period[95]. Economic and Industry Context - The overall industrial added value in China grew by 3.4% year-on-year in the first half of 2022, indicating a recovery in the economy[22]. - The company operates in the fluorochemical industry, which is cyclical and closely related to macroeconomic factors and the demand from downstream industries such as real estate, air conditioning, refrigeration, and automotive[57].

Dividend Distribution - The company plans to distribute a cash dividend of 1.70 CNY per 10 shares, totaling approximately 103.78 million CNY based on a total share capital of 610,479,037 shares as of December 31, 2021[4]. - The company has no plans for capital reserve transfers to increase share capital in the current dividend distribution proposal[4]. - The company plans to distribute cash dividends of 1.10 CNY per 10 shares, totaling approximately 67.15 million CNY based on a total share count of 610,479,037 shares as of December 31, 2020[199]. - The cash dividend policy stipulates that the total cash dividends should not be less than 20% of the audited net profit attributable to shareholders of the listed company for the year[194]. - In the case of a mature company without significant capital expenditure, the cash dividend proportion should be at least 80% of the profit distribution[195]. - The company emphasizes the importance of reasonable returns to investors while ensuring sustainable development[194]. - The company will consider cash or stock dividends, with a preference for cash[194]. - The board of directors must propose the profit distribution plan, which requires approval from more than half of the directors[197]. - The company retains undistributed profits primarily for investments related to business operations, asset purchases, and enhancing R&D capabilities[197]. - The company will communicate with shareholders, especially minority shareholders, to gather opinions on profit distribution plans[197]. - The company’s profit distribution policy can be adjusted if there are significant changes in the operating environment or if deemed necessary by the board[198]. Financial Performance - The company's operating revenue for 2021 was CNY 4,048,445,944.19, representing a year-on-year increase of 48.80% compared to CNY 2,720,728,128.47 in 2020[20]. - The net profit attributable to shareholders for 2021 was CNY 536,168,573.50, a significant increase of 141.69% from CNY 221,845,912.48 in 2020[20]. - The net profit attributable to shareholders after deducting non-recurring gains and losses reached CNY 483,980,617.11, up 218.33% from CNY 152,036,673.13 in 2020[20]. - The net cash flow from operating activities decreased by 53.16% to CNY 243,488,177.90 from CNY 519,775,864.19 in 2020, primarily due to a significant increase in the prices of HFCs refrigerant products[21]. - The company's total assets at the end of 2021 were CNY 6,051,148,356.58, reflecting a 12.78% increase from CNY 5,365,526,243.35 at the end of 2020[20]. - The net assets attributable to shareholders increased by 6.14% to CNY 5,288,370,820.57 at the end of 2021 from CNY 4,982,218,202.57 at the end of 2020[20]. - Basic earnings per share for 2021 were CNY 0.88, a 144.44% increase compared to CNY 0.36 in 2020[21]. - The weighted average return on net assets for 2021 was 10.30%, an increase of 5.82 percentage points from 4.48% in 2020[21]. Risk Management - The company emphasizes the importance of risk awareness regarding forward-looking statements, which may differ significantly from actual future results[5]. - The company has detailed potential risks and corresponding countermeasures in the management discussion and analysis section of the report[6]. - The company has not reported any non-operational fund occupation by controlling shareholders or their affiliates[6]. - The company has not violated decision-making procedures in providing guarantees to external parties[6]. - The company maintains a commitment to transparency and accuracy in its financial reporting, as stated by its management[7]. Research and Development - The company holds 71 authorized patents, including 25 invention patents, with 3 invention patents and 11 utility model patents added during the reporting period[41]. - The company has initiated 32 R&D projects focusing on new refrigerants, foaming agents, and lithium battery materials, aligning with its strategic development plan[41]. - The company has invested in 32 R&D projects focusing on optimizing production processes and developing new products such as high-purity hydrogen fluoride and new refrigerants[111]. - The company employs a production model that integrates production, supply, and sales, allowing for timely adjustments based on market conditions[54]. Market and Industry Trends - The company is positioned in the chemical raw materials and products manufacturing industry, focusing on fluorinated refrigerants, foaming agents, and hydrogen fluoride[105]. - The company is actively extending its downstream industrial chain to utilize existing HCFCs capacity for non-ODS applications, ensuring sustainable development amid regulatory pressures[155]. - The company is committed to enhancing its environmental management practices and investing in pollution reduction technologies to comply with stricter regulations[148]. - The company is focusing on the development of new environmentally friendly refrigerants and foaming agents, as well as fluoropolymers and fluorochemicals to enhance its product portfolio and reduce cyclical risk exposure[150]. Corporate Governance - The company has established a performance evaluation system for senior management, linking compensation to performance and ensuring alignment with company growth[164]. - The company maintains independence from its controlling shareholders in terms of personnel, assets, finance, and operations, ensuring independent accounting and risk management[165]. - The company actively engages with investors through various communication channels, ensuring fair treatment of institutional and retail investors[166]. - The company emphasizes environmental protection and social responsibility, investing in clean production and community support initiatives[167]. Management and Personnel - The company has a management team with extensive experience in various sectors, including real estate and pharmaceuticals, indicating a diverse skill set[176]. - The current management includes individuals with significant tenure, such as Hu Qixiang, who has been with the company since 2012, showcasing stability in leadership[176]. - The company has a total of 1,722 employees, with 811 in the parent company and 911 in major subsidiaries[191]. - The professional composition includes 957 production personnel, 123 sales personnel, 210 technical personnel, 70 financial personnel, 185 administrative personnel, and 177 logistics personnel[191]. Regulatory Environment - The Ministry of Ecology and Environment announced a phased reduction plan for HCFCs, aiming for a 35% reduction by 2020 and a complete phase-out by 2030, excluding maintenance and special uses[95]. - The EU's F-gas regulation mandates a 55% reduction in HFCs by 2021-2023, with a target of 79% reduction by 2030[96]. - The Kigali Amendment to the Montreal Protocol, effective from January 1, 2019, sets a timeline for HFCs reduction, including a 10% reduction by 2019 and 85% by 2036 for developed countries[97]. - The Ministry of Ecology and Environment prohibits new projects for producing controlled ozone-depleting substances as refrigerants, foaming agents, and other uses[98].

Financial Performance - The company's revenue for Q3 2021 reached ¥970,725,417.73, representing a year-over-year increase of 36.27%[4] - Net profit attributable to shareholders for the same period was ¥101,488,730.50, a significant increase of 150.80% compared to the previous year[4] - The net profit after deducting non-recurring gains and losses was ¥87,528,728.04, reflecting a substantial increase of 276.33% year-over-year[4] - The basic earnings per share for Q3 2021 was ¥0.17, an increase of 142.86% year-over-year[4] - Net profit for Q3 2021 was RMB 242,980,284.85, representing an increase of 14.0% compared to RMB 213,000,190.05 in Q3 2020[17] - The total profit for Q3 2021 was RMB 329,920,305.92, an increase from RMB 284,396,134.47 in Q3 2020[17] Assets and Liabilities - Total assets at the end of the reporting period amounted to ¥5,856,212,944.67, up 9.15% from the end of the previous year[5] - The total liabilities of the company reached CNY 693,445,220.20, compared to CNY 383,308,040.78, which is an increase of approximately 81.1%[14] - The company's equity attributable to shareholders increased to CNY 5,162,767,724.47 from CNY 4,982,218,202.57, reflecting a growth of about 3.6%[15] - As of September 30, 2021, the total assets of the company amounted to CNY 5,856,212,944.67, an increase from CNY 5,365,526,243.35 at the end of 2020, representing a growth of approximately 9.14%[15] Cash Flow - The company reported a net cash flow from operating activities of ¥222,239,854.47, which decreased by 52.69% compared to the same period last year[4] - Cash inflow from operating activities totaled RMB 2,005,464,806.11 for the first three quarters of 2021, compared to RMB 1,870,568,710.95 in the same period of 2020[19] - Total cash inflow from operating activities was $1,783,224,951.64, an increase of 27.3% from $1,400,778,976.28 in the previous year[20] - Cash and cash equivalents decreased to CNY 1,481,016,859.77 from CNY 2,485,422,534.92, reflecting a decline of about 40.4% year-over-year[12] - Cash and cash equivalents at the end of the period totaled $1,432,451,656.62, down from $2,521,900,145.96 at the end of the previous year[21] Expenses - Total operating costs increased to RMB 2,398,628,857.26, up 27.0% from RMB 1,889,713,696.95 year-over-year[16] - Research and development expenses for the first three quarters of 2021 were RMB 19,955,443.97, slightly up from RMB 18,150,806.56 in the previous year[16] - Sales expenses decreased significantly to RMB 41,046,965.62 from RMB 133,893,635.43 year-over-year, indicating improved cost management[16] - Cash paid for taxes amounted to $83,921,603.78, a decrease of 20.0% compared to $104,898,522.84 in the same period last year[20] - Cash paid to employees increased to $144,910,222.51, up from $134,914,079.33, reflecting a growth of 7.4%[20] Market and Operations - The increase in revenue and profit was primarily driven by rising product sales prices[7] - The company noted potential impacts from the implementation of HFCs reduction plans under the Montreal Protocol, which could significantly affect its operations[10] - The company has not reported any new product developments or market expansions in this quarter[10] - The company aims to continue expanding its market presence and investing in new technologies to drive future growth[18] Non-Recurring Items - Non-recurring gains for the period totaled ¥13,960,002.46, with significant contributions from fair value changes of financial assets[6] - The company reported a financial income of RMB 7,639,692.12 in Q3 2021, a notable improvement from a financial expense of RMB 18,958,647.52 in Q3 2020[16]

[Definitions](index=4&type=section&id=%E7%AC%AC%E4%B8%80%E8%8A%82%20%E9%87%8A%E4%B9%89) This chapter defines and explains professional terms and company entity abbreviations used in the report, providing a foundation for understanding its content [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) This section provides an overview of the company's basic information and presents its key financial data and indicators over recent periods [Company Basic Information](index=6&type=section&id=%E4%B8%80%E3%80%81%E5%85%AC%E5%8F%B8%E4%BF%A1%E6%81%AF) This chapter provides the company's basic business registration information, contact details, information disclosure channels, and stock overview | Item | Information | | :--- | :--- | | **Company Chinese Name** | Zhejiang Sanmei Chemical Co., Ltd. | | **Company Abbreviation** | Sanmei Chemical | | **Stock Exchange** | Shanghai Stock Exchange | | **Stock Ticker** | Sanmei Chemical | | **Stock Code** | 603379 | [Key Accounting Data and Financial Indicators for the Past Three Years](index=7&type=section&id=%E4%B8%83%E3%80%81%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 2020, the company's performance significantly declined, with operating revenue decreasing by **30.85%** year-on-year and net profit attributable to parent company shareholders sharply decreasing by **65.65%**, primarily due to a substantial drop in HFCs refrigerant prices Key Accounting Data (RMB) | Key Accounting Data | 2020 | 2019 | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | **Operating Revenue** | 2,720,728,128.47 | 3,934,602,748.32 | -30.85 | | **Net Profit Attributable to Shareholders of Listed Company** | 221,845,912.48 | 645,907,364.48 | -65.65 | | **Net Profit Attributable to Shareholders of Listed Company (Excluding Non-recurring Items)** | 152,036,673.13 | 587,358,276.87 | -74.12 | | **Net Cash Flow from Operating Activities** | 519,775,864.19 | 659,777,619.54 | -21.22 | | **Net Assets Attributable to Shareholders of Listed Company** | 4,982,218,202.57 | 4,952,554,435.04 | 0.60 | | **Total Assets** | 5,365,526,243.35 | 5,357,936,471.27 | 0.14 | Key Financial Indicators | Key Financial Indicators | 2020 | 2019 | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | **Basic Earnings Per Share (RMB/share)** | 0.36 | 1.10 | -67.27 | | **Weighted Average Return on Net Assets (%)** | 4.48 | 15.47 | Decrease of 10.99 percentage points | - During the reporting period, the company's operating revenue, net profit, non-recurring net profit, and operating cash flow all declined year-on-year, primarily due to a significant decrease in HFCs refrigerant product prices[18](index=18&type=chunk) [Key Quarterly Financial Data for 2020](index=8&type=section&id=%E4%B9%9D%E3%80%812020%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) In 2020, the company's operating revenue and net profit attributable to parent company shareholders showed a quarterly decline, with net profit significantly lower in the fourth quarter and non-recurring net profit turning negative, indicating increased operational pressure by year-end 2020 Quarterly Financial Data (RMB) | Indicator | Q1 | Q2 | Q3 | Q4 | | :--- | :--- | :--- | :--- | :--- | | **Operating Revenue** | 703,534,935.70 | 717,026,869.75 | 712,329,592.14 | 587,836,730.88 | | **Net Profit Attributable to Shareholders of Listed Company** | 99,889,637.66 | 72,793,871.77 | 40,466,781.82 | 8,695,621.23 | | **Net Profit Attributable to Shareholders of Listed Company (Excluding Non-recurring Items)** | 90,474,133.03 | 56,128,082.08 | 23,258,284.34 | -17,823,826.32 | | **Net Cash Flow from Operating Activities** | 248,400,483.42 | 178,458,077.66 | 42,931,173.59 | 49,986,129.52 | [Non-recurring Gains and Losses Items and Amounts](index=8&type=section&id=%E5%8D%81%E3%80%81%E9%9D%9E%E7%BB%8F%E5%B8%B8%E6%80%A7%E6%8D%9F%E7%9B%8A%E9%A1%B9%E7%9B%AE%E5%92%8C%E9%87%91%E9%A2%9D) In 2020, the company's total non-recurring gains and losses amounted to **69.81 million RMB**, primarily from government subsidies and fair value changes and investment income from held-for-trading financial assets 2020 Non-recurring Gains and Losses Items (RMB) | Non-recurring Gains and Losses Item | 2020 Amount | | :--- | :--- | | Government subsidies recognized in current profit or loss | 45,720,798.99 | | Fair value changes and investment income from held-for-trading financial assets and liabilities | 57,917,514.05 | | Other non-operating income and expenses | -11,104,372.54 | | Income tax impact | -23,269,746.45 | | **Total** | **69,809,239.35** | [Business Overview](index=9&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) This section outlines the company's main business activities, operational model, and the industry landscape, along with an analysis of its core competencies [Description of Main Business, Operating Model, and Industry Situation During the Reporting Period](index=9&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 primarily deals in fluorocarbon chemicals (fluorine refrigerants, fluorine blowing agents) and inorganic fluorine products, operating under an integrated production, supply, and sales model with direct sales as the main channel. In 2020, the HFCs refrigerant industry experienced a downturn due to overcapacity, while HCFCs products maintained relatively stable prices due to quota reductions, with HCFC-141b blowing agent's profitability significantly increasing year-on-year - The company primarily engages in the R&D, production, and sales of fluorocarbon chemicals and inorganic fluorine products, with fluorine refrigerants (HFCs and HCFCs) as core products mainly used in air conditioning, refrigeration, and automotive systems[24](index=24&type=chunk) - The company adopts an "integrated production, supply, and sales with timely adjustment of output and sales" production model, primarily using direct sales combined with distribution, and implements competitive bidding for procurement based on a "Qualified Supplier List"[29](index=29&type=chunk)[30](index=30&type=chunk)[31](index=31&type=chunk) - In 2020, the HFCs refrigerant industry faced intensified oversupply, leading to low prices and a significant decline in profitability, while HCFCs products, supported by quota reductions and stable demand, saw stable price fluctuations, with HCFC-141b blowing agent maintaining high prices throughout the year and significantly increasing profitability year-on-year[33](index=33&type=chunk)[35](index=35&type=chunk) [Analysis of Core Competencies During the Reporting Period](index=13&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 competencies include superior product quality and brand advantage, participation in national standard setting, a rich product portfolio and marketing strength with high export proportion, green and efficient production processes with cost advantages from self-produced AHF, and an experienced, cohesive management team - The company boasts excellent product quality and a strong brand image, with "Sanmei" being a "Zhejiang Famous Trademark," and has participated as a primary drafter in the formulation and revision of **7 national standards**[38](index=38&type=chunk) - The company possesses a rich product portfolio to meet diverse customer needs, leveraging its quota advantage in HCFC-141b blowing agent (over **50% of national quota**) for market leadership, with products sold across six continents and a high proportion of export sales[39](index=39&type=chunk) - The company emphasizes technological innovation, self-producing catalysts for its main products HFC-134a and HFC-125, and possesses **131,000 tons of AHF production capacity**, meeting its own production needs and effectively mitigating raw material price increase risks[40](index=40&type=chunk) [Management Discussion and Analysis](index=14&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) This section provides a comprehensive discussion and analysis of the company's operational performance, key financial changes, and future development plans, along with identified risks [Discussion and Analysis of Operations](index=14&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 2020, the company's performance significantly declined year-on-year due to the dual impact of the COVID-19 pandemic and a downturn in the HFCs refrigerant industry, with operating revenue falling by **30.85%** to **2.72 billion RMB** and net profit attributable to parent company shareholders decreasing by **65.65%** to **222 million RMB**. HFCs refrigerant profitability sharply decreased, while HCFC-141b, a quota-controlled product, saw a substantial increase in profitability, partially mitigating the overall decline. The company ensured stable development through marketing strategy adjustments, enhanced safety and environmental management, and major project advancements 2020 Operating Performance | Indicator | 2020 | Year-on-Year Change | | :--- | :--- | :--- | | **Operating Revenue** | 2.72 billion RMB | -30.85% | | **Total Profit** | 295 million RMB | -64.42% | | **Net Profit Attributable to Parent Company Shareholders** | 222 million RMB | -65.65% | - The company's primary product, HFCs refrigerants, experienced year-on-year declines in price, production, and sales volume due to industry capacity release and pandemic impacts, leading to a significant drop in profitability and being the main reason for the company's overall performance decline, while HCFCs products (especially HCFC-141b) saw high prices and significantly improved profitability due to quota reductions and supply tightening[43](index=43&type=chunk)[44](index=44&type=chunk) Production, Sales, and Price Changes of Main Products | Main Product | Year-on-Year Change in Production Volume | Year-on-Year Change in Export Sales Volume | Year-on-Year Change in Average Selling Price | | :--- | :--- | :--- | :--- | | **Fluorine Refrigerants** | -7.11% | -11.48% | -29.68% | | **Fluorine Blowing Agents** | -44.00% | -32.29% | +19.67% | | **Hydrogen Fluoride** | +0.21% | +17.77% | -12.96% | [Key Operating Conditions 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) During the reporting period, the gross margin of fluorine refrigerants in the company's main business decreased by **20.6 percentage points** due to a sharp price drop, while fluorine blowing agents' gross margin increased by **8.8 percentage points** due to tighter supply and rising prices. Selling expenses significantly decreased by **79.5%** as freight costs were reclassified to operating costs under new revenue standards. Net cash flow from investing activities shifted from **-1.08 billion RMB** to **446 million RMB**, mainly due to reduced purchases of wealth management products. Net cash flow from financing activities changed from **1.36 billion RMB** to **-201 million RMB**, primarily due to last period's receipt of raised funds and current period's cash dividends Changes in Key Income Statement and Cash Flow Statement Items | Item | Current Period Amount (RMB) | Prior Period Amount (RMB) | Change (%) | | :--- | :--- | :--- | :--- | | **Operating Revenue** | 2,720,728,128.47 | 3,934,602,748.32 | -30.85 | | **Operating Cost** | 2,309,664,722.32 | 2,762,887,435.30 | -16.40 | | **Selling Expenses** | 49,158,583.84 | 239,841,993.26 | -79.50 | | **Net Cash Flow from Operating Activities** | 519,775,864.19 | 659,777,619.54 | -21.22 | | **Net Cash Flow from Investing Activities** | 446,341,458.27 | -1,082,773,947.07 | Not Applicable | | **Net Cash Flow from Financing Activities** | -200,511,592.05 | 1,357,394,678.19 | -114.77 | Main Business by Product | Product Segment | Operating Revenue (RMB) | Operating Cost (RMB) | Gross Margin (%) | Year-on-Year Change in Gross Margin | | :--- | :--- | :--- | :--- | :--- | | **Fluorine Refrigerants** | 1,900,867,698.04 | 1,731,751,409.95 | 8.90 | Decrease of 20.6 percentage points | | **Fluorine Blowing Agents** | 373,927,513.79 | 171,975,091.90 | 54.01 | Increase of 8.8 percentage points | | **Hydrogen Fluoride** | 358,323,449.31 | 323,382,567.36 | 9.75 | Decrease of 6.31 percentage points | - In 2020, total R&D investment amounted to **25.25 million RMB**, representing **0.93% of operating revenue**, and was entirely expensed[62](index=62&type=chunk) Changes in Key Balance Sheet Items | Item Name | Current Period End Amount (RMB) | Prior Period End Amount (RMB) | Change (%) | Explanation of Change | | :--- | :--- | :--- | :--- | :--- | | **Monetary Capital** | 2,485,422,534.92 | 1,751,124,789.71 | 41.93 | Increase in wealth management products classified as bank deposits | | **Held-for-trading Financial Assets** | 972,385,520.96 | 1,442,554,839.74 | -32.59 | Decrease in wealth management products classified as held-for-trading financial assets | | **Accounts Receivable** | 224,565,193.91 | 348,919,471.21 | -35.64 | Due to decrease in operating revenue | | **Construction in Progress** | 99,174,512.55 | 33,922,780.61 | 192.35 | Due to increased investment in construction in progress | | **Share Capital** | 610,479,037.00 | 436,056,455.00 | 40.00 | Due to capital reserve conversion to share capital | [Discussion and Analysis of the Company's Future Development](index=33&type=section&id=%E4%B8%89%E3%80%81%E5%85%AC%E5%8F%B8%E5%85%B3%E4%BA%8E%E5%85%AC%E5%8F%B8%E6%9C%AA%E6%9D%A5%E5%8F%91%E5%B1%95%E7%9A%84%E8%AE%A8%E8%AE%BA%E4%B8%8E%E5%88%86%E6%9E%90) The company anticipates an end to HFCs capacity expansion, leading to improved market supply-demand dynamics. Its long-term goal is to become a global leader in fluorine products, with short-term plans to innovate marketing and increase direct sales to end markets. The 2021 operating plan includes strengthening team building, prioritizing safety and environmental work, advancing major projects (e.g., LiFSI), focusing on technological innovation, and increasing market share. Key risks identified include safety and environmental concerns, industry cyclical fluctuations, new product substitution, production quota tightening, and pandemic-related foreign trade impacts - Company Development Strategy: To become a global leader in fluorine products, focusing on developing HFCs refrigerants, blowing agents, fluoropolymers, and fine fluorine chemicals, and establishing production capabilities and market foundation for fourth-generation refrigerants and blowing agents[113](index=113&type=chunk) - 2021 Operating Plan: - Strengthen management team building and improve incentive mechanisms[114](index=114&type=chunk) - Prioritize safety and environmental work to ensure normal production and operations[115](index=115&type=chunk) - Advance major projects, focusing on the construction of the Lithium bis(fluorosulfonyl)imide (LiFSI) project[116](index=116&type=chunk) - Emphasize technological innovation to enhance new product R&D capabilities - Proactively seize market opportunities and increase market share - Key risks faced by the company include: - **Safety and Environmental Risks**: Production processes involve high hazards and pollution[117](index=117&type=chunk) - **Industry Cyclical Fluctuation Risks**: The fluorochemical industry is highly correlated with macroeconomic conditions and downstream industry prosperity[119](index=119&type=chunk) - **New Product Substitution Risks**: HFCs products face the risk of being replaced by new environmentally friendly refrigerants like fourth-generation HFOs[120](index=120&type=chunk) - **Production Quota Tightening Risks**: Both HCFCs and HFCs products face reduction and phase-out schedules mandated by the Montreal Protocol[121](index=121&type=chunk) - **Pandemic and Foreign Trade Risks**: A high proportion of product exports makes the company susceptible to global pandemics, trade protectionism, and geopolitical influences[123](index=123&type=chunk) [Significant Matters](index=39&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) This section details the company's profit distribution plan, fulfillment of commitments, significant related-party transactions, and major contracts, including wealth management activities [Ordinary Share Profit Distribution or Capital Reserve Conversion Plan](index=39&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) The company has established a profit distribution policy that prioritizes investor returns and maintains continuous stability, with annual cash dividends not less than **20%** of the net profit attributable to parent company shareholders. The 2020 profit distribution plan proposes a cash dividend of **1.10 RMB (tax inclusive) per 10 shares**, totaling **67.15 million RMB**, representing **30.27%** of the net profit attributable to parent company shareholders for the year - The company's 2020 profit distribution plan proposes a cash dividend of **1.10 RMB (tax inclusive) per 10 shares**, with no bonus shares or capital reserve conversion to share capital[3](index=3&type=chunk) Dividend Distribution Plans for the Past Three Years | Dividend Year | Dividend Per 10 Shares (RMB, tax inclusive) | Shares Converted Per 10 Shares | Cash Dividend Amount (RMB, tax inclusive) | Ratio to Net Profit Attributable to Parent Company Shareholders (%) | | :--- | :--- | :--- | :--- | :--- | | **2020** | 1.10 | 0 | 67,152,694.07 | 30.27 | | **2019** | 4.50 | 4 | 196,225,404.75 | 30.38 | | **2018** | 0 | 0 | 0 | 0 | [Fulfillment of Commitments](index=41&type=section&id=%E4%BA%8C%E3%80%81%E6%89%BF%E8%AF%BA%E4%BA%8B%E9%A1%B9%E5%B1%A5%E8%A1%8C%E6%83%85%E5%86%B5) During the reporting period, the company, its actual controllers, shareholders, and other related parties strictly fulfilled all commitments made during the initial public offering, including share lock-up, share price stability, non-competition, and related-party transactions, with no breaches observed - The company, actual controllers Hu Rongda and Hu Qixiang, and other committing parties have timely and strictly fulfilled all commitments made during or continuing into the reporting period[129](index=129&type=chunk) [Significant Related-Party Transactions](index=58&type=section&id=%E5%8D%81%E5%9B%9B%E3%80%81%E9%87%8D%E5%A4%A7%E5%85%B3%E8%81%94%E4%BA%A4%E6%98%93) During the reporting period, the company engaged in related-party transactions related to its ordinary operations, primarily involving the procurement of raw materials and acceptance of services from related parties, and providing loans to an associate company. In 2020, actual purchases of goods/acceptance of services from related parties amounted to **402 million RMB**, and sales of goods/provision of services to related parties amounted to **24.54 million RMB** - In 2020, the company's estimated ordinary related-party transaction limits were: purchases of **487.5 million RMB** and sales of **121 million RMB**, with an additional purchase limit of **47 million RMB** later approved. Actual full-year purchases totaled **402 million RMB**, and sales were **24.54 million RMB**[156](index=156&type=chunk) - In 2019, the company provided a loan of **65 million RMB** to its associate company, Morita New Materials. During the reporting period, repayments of **4.64 million RMB** and interest of **1.23 million RMB** were received, with the outstanding loan balance at period-end being **60.36 million RMB**[159](index=159&type=chunk) [Significant Contracts and Their Fulfillment](index=60&type=section&id=%E5%8D%81%E4%BA%94%E3%80%81%E9%87%8D%E5%A4%A7%E5%90%88%E5%90%8C%E5%8F%8A%E5%85%B6%E5%B1%A5%E8%A1%8C%E6%83%85%E5%86%B5) During the reporting period, the company had no significant entrustment, contracting, leasing, or guarantee matters. The company managed cash assets by purchasing bank wealth management products using idle self-owned funds and raised funds. The amount of idle self-owned funds used was **1.86 billion RMB**, and idle raised funds used was **896 million RMB** Overall Wealth Management Status (10,000 RMB) | Type | Fund Source | Amount Incurred | Unmatured Balance | | :--- | :--- | :--- | :--- | | Bank Wealth Management Products | Idle Self-owned Funds | 185,650 | 78,050 | | Bank Wealth Management Products | Idle Raised Funds | 89,600 | 37,860 | [Ordinary Share Changes and Shareholder Information](index=80&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) This section details changes in ordinary share capital, including the impact of capital reserve conversions, and provides an overview of the company's shareholders and actual controllers [Ordinary Share Capital Change](index=80&type=section&id=%E4%B8%80%E3%80%81%20%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, due to the listing and circulation of some initial public offering restricted shares and the implementation of the 2019 capital reserve conversion plan (**4 shares for every 10 shares**), the company's total share capital increased from **436 million shares** to **610 million shares**. The proportion of restricted shares decreased from **86.30%** to **68.38%** Share Change Table (Shares) | Share Type | Quantity Before This Change | Quantity After This Change | Proportion After Change (%) | | :--- | :--- | :--- | :--- | | **I. Restricted Shares** | 376,322,694 | 417,418,254 | 68.38 | | **II. Unrestricted Tradable Shares** | 59,733,761 | 193,060,783 | 31.62 | | **III. Total Ordinary Shares** | 436,056,455 | 610,479,037 | 100.00 | - The primary reason for the increase in total share capital was the implementation of the 2019 capital reserve conversion plan, which converted **4 shares for every 10 shares** held by all shareholders[203](index=203&type=chunk) [Shareholders and Actual Controllers](index=84&type=section&id=%E4%B8%89%E3%80%81%20%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 the reporting period, the company had a total of **23,942 ordinary shareholders**. The top two shareholders, Hu Rongda and Hu Qixiang (father and son), collectively held **53.88%** of shares directly, serving as the company's actual controllers. Shareholding concentration among the top ten shareholders was relatively high Top Five Shareholders' Shareholding | Shareholder Name | Shares Held at Period-End | Proportion (%) | Number of Restricted Shares Held | | :--- | :--- | :--- | :--- | | Hu Rongda | 225,229,140 | 36.89 | 225,229,140 | | Hu Qixiang | 103,738,226 | 16.99 | 103,738,226 | | Wuyi Sanmei Investment Co., Ltd. | 48,937,288 | 8.02 | 48,937,288 | | Zhan Linxi | 26,342,589 | 4.32 | 0 | | Wuyi Meisizhuoyuan Investment Management Partnership (Limited Partnership) | 25,010,624 | 4.10 | 0 | - The company's actual controllers are Hu Rongda and Hu Qixiang (father and son), who collectively hold **61.91%** of the company's shares through direct holdings and control of Wuyi Sanmei Investment Co., Ltd[215](index=215&type=chunk)[217](index=217&type=chunk)[541](index=541&type=chunk) [Directors, Supervisors, Senior Management, and Employees](index=90&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) This section covers the shareholdings and remuneration of directors, supervisors, and senior management, changes in their positions, and the overall employee structure [D&O Shareholding and Remuneration](index=90&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 shareholdings of the company's directors, supervisors, and senior management increased due to capital reserve conversion to share capital. In 2020, the total pre-tax remuneration paid to all directors, supervisors, and senior management was **6.20 million RMB**, with Chairman and General Manager Hu Qixiang's remuneration being **761,400 RMB** - The primary reason for changes in shareholdings of directors, supervisors, and senior management during the reporting period was the implementation of the **2019 capital reserve conversion to share capital**[227](index=227&type=chunk) Remuneration of Selected Directors, Supervisors, and Senior Management (10,000 RMB) | Name | Position | Total Pre-tax Remuneration Received from the Company During the Reporting Period | | :--- | :--- | :--- | | Hu Qixiang | Chairman, General Manager | 76.14 | | Zhan Linxi | Director, Executive Deputy General Manager | 69.34 | | Shi Fuqiang | Chief Financial Officer | 66.63 | | **Total** | / | **620.01** | [Changes in the Company's Directors, Supervisors, and Senior Management](index=93&type=section&id=%E5%9B%9B%E3%80%81%E5%85%AC%E5%8F%B8%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%8F%98%E5%8A%A8%E6%83%85%E5%86%B5) During the reporting period, Mr. Hu Faxiang resigned as the company's director and deputy general manager due to work reasons - Hu Faxiang resigned from his positions as director and deputy general manager due to work reasons[234](index=234&type=chunk) [Employee Information](index=93&type=section&id=%E4%BA%94%E3%80%81%E8%BF%91%E4%B8%89%E5%B9%B4%E5%8F%97%E8%AF%81%E5%88%B8%E7%9B%91%E7%AE%A1%E6%9C%BA%E6%9E%84%E5%A4%84%E7%BD%9A%E7%9A%84%E6%83%85%E5%86%B5%E8%AF%B4%E6%98%8E) As of the end of the reporting period, the company had a total of **1,704 employees**. Production personnel constituted the largest professional group with **927 individuals**, while employees with college degrees or above totaled **489**, accounting for **28.7%** of the total Employee Professional Structure | Professional Category | Number of People | | :--- | :--- | | Production Personnel | 927 | | Sales Personnel | 123 | | Technical Personnel | 235 | | Financial and Audit Personnel | 67 | | Administrative Personnel | 174 | | Logistics Personnel | 178 | | **Total** | **1,704** | [Corporate Governance](index=94&type=section&id=%E7%AC%AC%E4%B9%9D%E8%8A%82%20%E5%85%AC%E5%8F%B8%E6%B2%BB%E7%90%86) This section describes the company's corporate governance structure, its compliance with regulations, and the effectiveness of its internal control systems [Explanation of Corporate Governance Related Matters](index=94&type=section&id=%E4%B8%80%E3%80%81%20%E5%85%AC%E5%8F%B8%E6%B2%BB%E7%90%86%E7%9B%B8%E5%85%B3%E6%83%85%E5%86%B5%E8%AF%B4%E6%98%8E) During the reporting period, the company's governance structure complied with relevant laws and regulations, with clear responsibilities and standardized operations for the general meeting of shareholders, board of directors, supervisory board, and senior management. The company maintained "five separations" from its controlling shareholder in terms of personnel, assets, finance, organization, and business, and strictly adhered to information disclosure requirements - The company's corporate governance structure is sound, complying with the "Guidelines for Corporate Governance of Listed Companies," and operates in a standardized manner across shareholders, directors, supervisors, senior management, controlling shareholders, and information disclosure[239](index=239&type=chunk) [Explanation of Matters Related to Internal Control Audit Report](index=97&type=section&id=%E4%B9%9D%E3%80%81%20%E5%86%85%E9%83%A8%E6%8E%A7%E5%88%B6%E5%AE%A1%E8%AE%A1%E6%8A%A5%E5%91%8A%E7%9A%84%E7%9B%B8%E5%85%B3%E6%83%85%E5%86%B5%E8%AF%B4%E6%98%8E) The company disclosed its 2020 Internal Control Self-Assessment Report, and Lixin Certified Public Accountants issued a standard unqualified internal control audit report, indicating that the company's internal controls were effective in all material aspects - Lixin Certified Public Accountants (Special General Partnership) audited the company's 2020 internal control situation and issued a standard unqualified internal control audit report[250](index=250&type=chunk) [Financial Report](index=99&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) This section presents the company's audited financial statements, including the auditor's opinion, key financial summaries, and significant accounting policies and estimates [Audit Report](index=99&type=section&id=%E4%B8%80%E3%80%81%20%E5%AE%A1%E8%AE%A1%E6%8A%A5%E5%91%8A) Lixin Certified Public Accountants (Special General Partnership) issued a standard unqualified audit opinion on the company's 2020 financial statements. The auditors identified revenue recognition as a key audit matter due to its material amount and inherent risk of being recognized in incorrect periods - The auditing firm is Lixin Certified Public Accountants (Special General Partnership), which issued a standard unqualified audit opinion[253](index=253&type=chunk)[254](index=254&type=chunk) - The key audit matter is revenue recognition. Procedures performed by the auditors included evaluating internal controls, performing analytical procedures, verifying revenue recognition timing, conducting detailed and cut-off tests, and confirming accounts receivable[256](index=256&type=chunk)[257](index=257&type=chunk) [Financial Statements](index=102&type=section&id=%E4%BA%8C%E3%80%81%20%E8%B4%A2%E5%8A%A1%E6%8A%A5%E8%A1%A8) The financial statements show that as of the end of 2020, the company's total assets were **5.37 billion RMB**, equity attributable to parent company shareholders was **4.98 billion RMB**, and the asset-liability ratio was **7.14%**. In 2020, operating revenue reached **2.72 billion RMB**, a year-on-year decrease of **30.85%**; net profit attributable to parent company shareholders was **222 million RMB**, a year-on-year decrease of **65.65%**. Net cash flow from operating activities was **520 million RMB**, a year-on-year decrease of **21.22%** Consolidated Balance Sheet Summary (RMB) | Item | December 31, 2020 | December 31, 2019 | | :--- | :--- | :--- | | **Total Current Assets** | 4,192,226,326.81 | 4,186,781,218.91 | | **Total Non-current Assets** | 1,173,299,916.54 | 1,171,155,252.36 | | **Total Assets** | 5,365,526,243.35 | 5,357,936,471.27 | | **Total Current Liabilities** | 355,088,151.73 | 372,445,237.67 | | **Total Non-current Liabilities** | 28,219,889.05 | 29,519,583.05 | | **Total Liabilities** | 383,308,040.78 | 401,964,820.72 | | **Total Equity Attributable to Parent Company Owners** | 4,982,218,202.57 | 4,952,554,435.04 | Consolidated Income Statement Summary (RMB) | Item | 2020 | 2019 | | :--- | :--- | :--- | | **Total Operating Revenue** | 2,720,728,128.47 | 3,934,602,748.32 | | **Total Operating Cost** | 2,511,061,731.42 | 3,143,468,195.22 | | **Operating Profit** | 284,780,279.78 | 822,406,201.14 | | **Total Profit** | 294,641,846.10 | 828,209,594.50 | | **Net Profit** | 221,573,216.81 | 645,297,435.62 | | **Net Profit Attributable to Parent Company Shareholders** | 221,845,912.48 | 645,907,364.48 | Consolidated Cash Flow Statement Summary (RMB) | Item | 2020 | 2019 | | :--- | :--- | :--- | | **Net Cash Flow from Operating Activities** | 519,775,864.19 | 659,777,619.54 | | **Net Cash Flow from Investing Activities** | 446,341,458.27 | -1,082,773,947.07 | | **Net Cash Flow from Financing Activities** | -200,511,592.05 | 1,357,394,678.19 | | **Net Increase in Cash and Cash Equivalents** | 734,605,099.64 | 907,143,153.76 | [Significant Accounting Policies and Estimates](index=121&type=section&id=%E4%BA%94%E3%80%81%20%E9%87%8D%E8%A6%81%E4%BC%9A%E8%AE%A1%E6%94%BF%E7%AD%96%E5%8F%8A%E4%BC%9A%E8%AE%A1%E4%BC%B0%E8%AE%A1) The company adopted the new revenue recognition standard from January 1, 2020, adjusting opening retained earnings and related financial statement items for the cumulative effect of contracts not yet completed at the date of initial application. This accounting policy change did not have a significant impact on the company's financial position or operating results - The company adopted the new revenue recognition standard (Cai Kuai [2017] No. 22) issued by the Ministry of Finance starting from **January 1, 2020**, and adjusted its accounting policies accordingly[145](index=145&type=chunk)[357](index=357&type=chunk)[358](index=358&type=chunk) Impact of New Revenue Standard Adoption on Consolidated Balance Sheet Balances as of January 1, 2020 (RMB) | Affected Balance Sheet Item | Adjustment Amount | | :--- | :--- | | Advances from Customers | -45,062,939.16 | | Contract Liabilities | 41,351,688.20 | | Other Current Liabilities | 3,711,250.96 |

Financial Performance - Operating revenue rose by 19.49% to CNY 840,680,933.11 year-on-year[3] - Net profit attributable to shareholders decreased by 36.42% to CNY 63,512,237.74 compared to the same period last year[3] - Total operating revenue for Q1 2021 was CNY 840,680,933.11, an increase of 19.5% compared to CNY 703,534,935.70 in Q1 2020[16] - Net profit for Q1 2021 was CNY 63,512,237.74, a decrease of 36.4% from CNY 99,951,456.11 in Q1 2020[17] - Total profit for Q1 2021 was CNY 83,082,585.44, a decline of 35.5% compared to CNY 128,834,711.93 in Q1 2020[17] - Operating profit for Q1 2021 was CNY 120,010,033.38, a decrease of 9.6% from CNY 132,751,393.20 in Q1 2020[16] - The total comprehensive income for Q1 2021 was CNY 33,615,828.93, compared to CNY 67,642,590.12 in Q1 2020, indicating a decrease of approximately 50%[19] Cash Flow - Net cash flow from operating activities dropped significantly by 96.72% to CNY 8,143,402.08[3] - Cash inflow from operating activities in Q1 2021 was CNY 625,512,313.64, down from CNY 672,943,578.40 in Q1 2020, reflecting a decline of about 7%[20] - The net cash flow from operating activities for Q1 2021 was CNY 8,143,402.08, significantly lower than CNY 248,400,483.42 in Q1 2020, representing a decrease of approximately 97%[21] - Cash outflow from investing activities in Q1 2021 totaled CNY 1,365,754,490.58, compared to CNY 674,198,856.56 in Q1 2020, indicating an increase of about 102%[21] - The net cash flow from investing activities for Q1 2021 was -CNY 570,223,899.58, contrasting with a positive CNY 201,953,553.33 in Q1 2020[21] - The company reported a cash flow from operating activities net amount of CNY 81,796,272.96 in Q1 2021, down from CNY 236,133,829.25 in Q1 2020, indicating a decline of approximately 65%[23] Assets and Liabilities - Total assets increased by 2.09% to CNY 5,477,886,602.36 compared to the end of the previous year[3] - Total assets as of March 31, 2021, amounted to $5,477,886,602.36, compared to $5,365,526,243.35 at the end of 2020, showing a slight increase[11] - The company’s total liabilities as of March 31, 2021, were $401,428,593.62, up from $355,088,151.73, reflecting an increase in current liabilities[12] - Total liabilities increased to ¥429,633,288.63 from ¥383,308,040.78, representing a growth of approximately 12.1% year-over-year[13] - Total equity attributable to shareholders rose to ¥5,048,253,313.73, up from ¥4,982,218,202.57, indicating an increase of about 1.3%[13] - Cash and cash equivalents decreased to ¥1,747,384,185.62 from ¥2,345,125,667.25, a decline of approximately 25.5%[14] - Current liabilities totaled ¥921,830,961.27, up from ¥760,007,403.14, which is an increase of around 21.3%[15] Expenses - Operating costs rose to $699,979,485.29, a 30.98% increase from $534,419,413.90, mainly driven by higher sales volume and material price increases[9] - Research and development expenses increased by 41.05% to $6,681,438.98 from $4,736,876.87, reflecting a rise in R&D activities[9] - The company reported a 72.16% decrease in selling expenses to $12,455,150.66 from $44,746,093.15, attributed to the reclassification of transportation costs[9] - Other income increased by 83.04% to $3,116,225.18 from $1,702,516.46, mainly due to an increase in government subsidies[9] - Financial expenses improved, with a decrease in foreign exchange losses, resulting in a financial expense of -$15,495,267.04 compared to -$23,343,243.00[9] Shareholder Information - The number of shareholders reached 22,188, with the top shareholder holding 36.99% of the shares[6]