Financial Performance - The company's operating revenue for 2019 was approximately CNY 1.44 billion, a 41.33% increase compared to CNY 1.02 billion in 2018[29]. - Net profit attributable to shareholders for 2019 reached approximately CNY 342.18 million, reflecting a 51.96% increase from CNY 225.17 million in 2018[29]. - The basic earnings per share for 2019 was CNY 0.8876, up 51.96% from CNY 0.5841 in 2018[30]. - The net cash flow from operating activities for 2019 was approximately CNY 193.26 million, a significant increase of 195.57% compared to CNY 65.39 million in 2018[29]. - The company's total assets at the end of 2019 were approximately CNY 2.66 billion, a 57.73% increase from CNY 1.69 billion at the end of 2018[29]. - The company achieved operating revenue of 1,442.45 million RMB in 2019, representing a year-on-year growth of 41.33%[104]. - Operating profit reached 395.01 million RMB, an increase of 51.62% compared to the previous year[104]. - Net profit attributable to shareholders was 342.18 million RMB, up 51.96% year-on-year[104]. Shareholder Returns - The company plans to distribute a cash dividend of RMB 1.70 per 10 shares, totaling RMB 70,205,265.33, and will increase its share capital by 4.5 shares for every 10 shares held, resulting in an increase of 185,837,467 shares[6]. - The net profit attributable to ordinary shareholders for 2019 was RMB 342.18 million, with a dividend payout ratio of 20.52%[188]. - The company's profit distribution policy was enhanced in December 2018, outlining plans for dividends from 2018 to 2020[185]. - The company has a cash dividend policy aimed at providing stable returns to shareholders while expanding production and operational goals for long-term investment returns[182]. Market Position and Strategy - The company operates in the specialized equipment manufacturing sector within the broader manufacturing industry, focusing on hydraulic technology research and product development[59]. - The company plans to continue focusing on hydraulic technology research and the development of hydraulic products, including hydraulic demolition tools and components[45]. - The company is focusing on product differentiation and aims to enhance its market share in light and medium hydraulic breakers while advancing heavy hydraulic breaker R&D[97]. - The company plans to strengthen its marketing efforts by expanding its customer base and enhancing brand recognition in both domestic and international markets[99]. - The company intends to deepen cooperation with well-known domestic excavator manufacturers and expand partnerships with domestic engineering machinery sales networks to enhance market presence[172]. Research and Development - The company emphasizes talent development as a core strategy, focusing on recruiting skilled professionals in precision hydraulic component design and manufacturing[157]. - The company prioritizes technological innovation, planning to increase R&D investment to enhance product competitiveness and expand its product range[160]. - The company has established a dedicated product R&D team to cater to international market demands, enhancing product design and development for various countries and customer groups[163]. - The company plans to enhance its R&D capabilities by upgrading existing product technologies to improve efficiency, extend service life, and enhance energy-saving and environmental protection effects[166]. Operational Efficiency - The company improved its cost structure, with revenue growth outpacing the increase in operating costs[31]. - The company emphasizes cost control by monitoring raw material price fluctuations and adjusting procurement strategies accordingly[98]. - The production plan is adjusted based on last year's sales and market conditions, with weekly coordination meetings held to address procurement, production, and sales issues[57]. - The company has established stable relationships with key raw material suppliers to ensure the quality and timely supply of materials[56]. Industry Trends - The domestic hydraulic breaker market is fragmented, with over a hundred brands, but the concentration is expected to increase as leading domestic companies expand their market presence[69]. - The hydraulic breaker industry is experiencing a trend towards becoming a standard configuration for excavators, driven by the increasing emphasis from excavator manufacturers[71]. - The domestic market for hydraulic breakers has seen a rapid increase in demand since 2000, with domestic brands gaining market share and improving competitiveness, leading to a significant decline in the market share of foreign brands[69]. - The high-end hydraulic components market in China is characterized by a structural shortage, with a heavy reliance on imports, although recent developments indicate a gradual improvement in domestic production capabilities[75]. Risks and Challenges - The company reported no significant risks that could materially affect its operations during the reporting period[10]. - The company recognizes the risk of macroeconomic fluctuations affecting product demand, as its performance is closely tied to fixed asset investment levels[177]. - The company faces competition risks in the hydraulic breaker and component market, which is still in a growth phase, potentially impacting product promotion and profitability[178]. - The company has built an experienced R&D team over the past decade, but it must continue to enhance technology development to maintain its competitive edge[179].

Financial Performance - Net profit attributable to shareholders of the listed company was ¥257,722,006.01, reflecting a growth of 47.28% year-on-year[17]. - Operating revenue for the period was ¥1,067,952,988.94, representing a 42.44% increase compared to the same period last year[17]. - Basic earnings per share rose to ¥0.6685, marking a 47.28% increase compared to the previous year[19]. - The total comprehensive income attributable to the parent company for the first three quarters of 2019 was ¥257,722,006.01, compared to ¥174,984,421.30 in the same period of 2018, marking a 47.2% increase[62]. - Net profit for Q3 2019 was ¥76,045,960.79, compared to ¥52,990,350.79 in Q3 2018, reflecting a 44% increase[57]. - The total profit for Q3 2019 was ¥70,525,777.63, compared to ¥39,434,878.57 in Q3 2018, representing an increase of 79.0%[64]. Assets and Liabilities - Total assets at the end of the reporting period reached ¥1,873,374,553.23, an increase of 11.00% compared to the end of the previous year[17]. - The company’s total assets increased to ¥1,512,460,417.16 from ¥1,375,822,067.83 year-over-year[53]. - Total liabilities decreased to ¥644,261,728.98 from ¥665,080,158.63, a reduction of about 3%[44]. - Current liabilities decreased to ¥605,801,345.92 from ¥635,435,760.76, a reduction of about 5%[44]. - The company’s capital stock rose by 48.00% to RMB 385,510,400.00, resulting from the conversion of capital reserves[30]. Cash Flow - Net cash flow from operating activities amounted to ¥135,071,230.48, a significant increase of 488.35% year-on-year[17]. - The company's cash flow from operating activities for the first three quarters of 2019 was ¥770,787,579.09, an increase from ¥514,044,214.62 in the same period of 2018[68]. - Operating cash inflow totaled CNY 789,132,557.90, an increase from CNY 529,630,007.22 in the previous period, reflecting a growth of approximately 49.2%[70]. - Cash inflow from financing activities amounted to CNY 343,149,984.15, up from CNY 252,208,890.00, representing an increase of approximately 36.1%[72]. - Net cash flow from financing activities was CNY 10,404,869.52, a significant decrease from CNY 194,104,693.18, reflecting a decline of about 94.6%[72]. Shareholder Information - The total number of shareholders at the end of the reporting period was 7,199[25]. - The top shareholder, Feng Xiao Hong, holds 25.00% of the shares, totaling 96,370,854 shares[25]. Revenue and Costs - Operating costs increased by 47.08% to RMB 614,530,698.12, corresponding to the rise in sales[30]. - Total operating revenue for Q3 2019 reached ¥324,839,378.81, a 32% increase from ¥246,178,426.89 in Q3 2018[53]. - Total operating costs for Q3 2019 were ¥243,176,922.46, up 31% from ¥184,987,347.69 in Q3 2018[53]. Other Financial Metrics - The weighted average return on net assets increased by 3.55 percentage points to 22.38%[19]. - The company reported a government subsidy of ¥7,540,181.92 for the year-to-date period[24]. - The company reported a significant increase in other income by 525.99% to RMB 7,540,181.92, mainly due to increased government subsidies[30]. - The company reported a significant increase in deferred tax assets to ¥7,487,516.99 from ¥5,756,553.45, an increase of about 30%[44].

Financial Performance - The company's operating revenue for the first half of 2019 reached ¥743,113,610.13, representing a 47.56% increase compared to ¥503,602,321.15 in the same period last year[16]. - The net profit attributable to shareholders of the listed company was ¥181,676,045.22, up 48.92% from ¥121,994,070.51 year-on-year[16]. - The net cash flow from operating activities increased significantly by 119.87%, amounting to ¥77,273,834.00 compared to ¥35,144,693.07 in the previous year[16]. - The total assets of the company at the end of the reporting period were ¥1,882,393,368.45, reflecting an 11.54% increase from ¥1,687,653,395.99 at the end of the previous year[16]. - The net assets attributable to shareholders of the listed company increased by 12.72% to ¥1,152,611,970.90 from ¥1,022,573,237.36 at the end of the previous year[16]. - The basic earnings per share for the first half of 2019 was ¥0.4713, a 48.96% increase from ¥0.3164 in the same period last year[18]. - The weighted average return on net assets rose to 16.32%, an increase of 2.80 percentage points compared to 13.52% in the previous year[18]. - The company reported a non-recurring gain of ¥1,276,199.54 from government subsidies closely related to its normal business operations[19]. - The total non-recurring profit and loss amounted to ¥1,456,922.54 after accounting for various adjustments, including a tax impact of -¥257,103.97[21]. Market and Industry Insights - The company specializes in hydraulic technology, focusing on the research, development, production, and sales of hydraulic products, including hydraulic demolition tools and components[23]. - The main products include hydraulic breakers, hydraulic pumps, hydraulic motors, and multi-way control valves, which are essential for hydraulic engineering machinery[24]. - The company has developed over 20 series of hydraulic breakers, categorized into light, medium, and heavy types, showcasing a strong product range[25]. - Hydraulic pumps, motors, and valves produced by the company are classified as high-pressure, high-flow hydraulic components, indicating advanced technology and manufacturing complexity[30]. - In the first half of 2019, excavator sales reached 137,207 units, representing a year-on-year growth of 14.2%, which significantly boosted the market sales of hydraulic breaking hammers and other attachments[44]. - The domestic hydraulic breaking hammer market has seen a rapid rise in demand since 2000, with domestic brands significantly increasing their market share due to improved technology and product quality[46]. - The hydraulic breaking hammer industry is experiencing continuous growth, with domestic companies focusing on high-quality, cost-effective products to expand their market share both domestically and internationally[49]. - The global hydraulic breaking hammer market is dominated by about 30 major manufacturers, with a high concentration in Europe, Japan, and South Korea[45]. - The hydraulic components industry in China has developed a specialized production system, but there is a structural surplus of ordinary hydraulic components and a shortage of high-end hydraulic components[50]. - High-end hydraulic components are primarily used in major technical equipment across various industries, with significant reliance on imports due to insufficient domestic production capabilities[51]. Operational Strategies - The procurement strategy involves selecting multiple suppliers based on factors such as reputation, delivery speed, and quality, ensuring a reliable supply chain for raw materials[33]. - The company has established a stable partnership with key raw material suppliers, ensuring the quality and timely supply of materials[34]. - The company employs a combined sales model of direct sales and distribution, enhancing market coverage and reducing sales and after-sales maintenance costs[38]. - The company conducts regular evaluations of existing suppliers on aspects such as supply quality and credit, ensuring a reliable supply chain[34]. - The company has implemented a production plan based on last year's sales and market conditions, allowing for timely adjustments to production schedules[35]. - The company provides training and technical support to distributors, enhancing their service capabilities and ensuring timely supply[38]. - The company is focusing on enhancing its marketing efforts, particularly in the hydraulic parts aftermarket, to expand market share and increase sales to large clients[65]. - The company is investing in R&D for new products, including multi-axis industrial robots and hard alloy products, to strengthen its technological capabilities[66]. - The company has established a dedicated R&D team for new product lines, aiming to become a leading technology innovation center in the hydraulic products sector[66]. Financial Position and Equity - The company's total liabilities amounted to approximately ¥729.78 million, up from ¥665.08 million, reflecting an increase of about 9.7%[109]. - The total equity attributable to shareholders increased to approximately ¥1.15 billion from ¥1.02 billion, showing a growth of about 12.7%[109]. - The company's capital reserve decreased to approximately ¥144.68 million from ¥269.71 million, indicating a decline of about 46.3%[109]. - The total share capital increased from 260,480,000 shares to 385,510,400 shares after a capital reserve conversion, resulting in an increase of 125,030,400 shares[94]. - The company distributed cash dividends of RMB 2.00 per 10 shares, totaling RMB 52,096,000.00 (including tax)[96]. - The diluted earnings per share for the year 2018 is calculated to be RMB 0.58 based on the new total share capital[96]. - The largest shareholder, Feng Xiao Hong, holds 96,370,854 shares, representing 25.00% of the total shares[97]. - The second-largest shareholder, Song Yu Xuan, holds 72,286,573 shares, representing 18.75% of the total shares[97]. - The company has a total of 125,772,790 unrestricted circulating shares after the share changes[94]. - The shareholding structure indicates that Feng Xiao Hong and Song Yu Xuan are related parties, with a family relationship[101]. Corporate Governance and Compliance - The company has established a board of directors and various committees to oversee major decision-making processes[154]. - The ultimate controlling shareholder of the company is the Song family[154]. - The company has commitments from major shareholders not to transfer or manage their shares for 36 months post-IPO[80]. - The company will take measures to stabilize its stock price if it falls below the net asset value per share within 36 months post-IPO[81]. - The company has not conducted any mergers or acquisitions as of the report date[75]. - The company has not changed its accounting firm during the reporting period and has reappointed Ruihua Certified Public Accountants for the 2019 audit[84]. - There were no major lawsuits or arbitration matters during the reporting period, indicating a stable legal environment for the company[86]. - The company does not belong to key pollutant discharge units and has complied with environmental protection standards during the reporting period[91]. - The company has no significant doubts regarding its ability to continue as a going concern for the next 12 months[159]. Accounting and Financial Reporting - The financial statements are prepared based on the going concern principle and comply with the relevant accounting standards, reflecting the company's financial position and operating results accurately[161]. - The company recognizes foreign exchange differences arising from foreign currency monetary items in other comprehensive income or current profit and loss, depending on the context[180]. - The company classifies financial assets into three categories: amortized cost, fair value through other comprehensive income, and fair value through profit or loss[184]. - Financial assets measured at amortized cost are managed with the objective of collecting contractual cash flows, which consist solely of payments of principal and interest[184]. - The company measures expected credit losses for receivables based on the entire expected life of the financial asset[200]. - The company categorizes receivables into different groups based on credit risk characteristics for assessing expected credit losses[196]. - The company applies a simplified approach for measuring expected credit losses for trade receivables and contract assets without significant financing components[197].

2019 年第一季度报告 公司代码：603638 公司简称：艾迪精密 烟台艾迪精密机械股份有限公司 2019 年第一季度报告 1 / 19 2019 年第一季度报告 í 二、 11Í 四、 目录 | --- | |----------------| | | | 重要提示 . | | 公司基本情况 . | | 重要事项 . | | 附录 . | 2 / 19 2019 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 公司负责人宋飞、主管会计工作负责人钟志平及会计机构负责人（会计主管人员）钟志平保 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 2018 was approximately ¥1.02 billion, representing a 59.15% increase compared to ¥641.33 million in 2017[23]. - Net profit attributable to shareholders for 2018 was approximately ¥225.17 million, a 61.20% increase from ¥139.69 million in 2017[23]. - The basic earnings per share for 2018 was ¥0.86, up 56.36% from ¥0.55 in 2017[24]. - The weighted average return on equity increased to 24.17% in 2018, up 6.07 percentage points from 18.10% in 2017[24]. - The net cash flow from operating activities for 2018 was approximately ¥65.39 million, a decrease of 46.82% compared to ¥122.95 million in 2017[23]. - Total assets at the end of 2018 were approximately ¥1.69 billion, a 72.36% increase from ¥979.13 million at the end of 2017[23]. - The net assets attributable to shareholders at the end of 2018 were approximately ¥1.02 billion, reflecting a 21.58% increase from ¥841.09 million at the end of 2017[23]. - The company achieved operating revenue of 1,020.65 million RMB, a year-on-year increase of 59.15%[91]. - Operating profit reached 260.53 million RMB, reflecting a growth of 61.29% compared to the previous year[91]. - Net profit attributable to shareholders was 225.17 million RMB, up 61.20% year-on-year[91]. Dividend Policy - The company plans to distribute cash dividends of RMB 2.00 per 10 shares, totaling RMB 52,096,000.00, and to increase capital by 4.8 shares for every 10 shares held, resulting in a total increase of 125,030,400 shares[4]. - In 2018, the company approved a cash dividend of RMB 2.00 per 10 shares, totaling RMB 52,096,000 (including tax), representing 23.14% of the net profit attributable to ordinary shareholders[181]. - The company has committed to a stable dividend policy, ensuring long-term returns for shareholders while expanding its operational goals[176]. - The company’s total cash dividends distributed over the past three years were RMB 52,800,000 in 2016, RMB 44,000,000 in 2017, and RMB 52,096,000 in 2018[181]. - The company’s net profit attributable to ordinary shareholders for 2018 was RMB 225,174,133.27, with a dividend payout ratio of 23.14%[181]. Audit and Compliance - The company received a standard unqualified audit report from Ruihua Certified Public Accountants[4]. - The board of directors and senior management have guaranteed the accuracy and completeness of the annual report[4]. - The current auditor, Ruihua Certified Public Accountants, has an audit fee of CNY 742,000 and has been engaged for 6 years[195]. - There are no significant lawsuits or arbitration matters reported for the year[196]. - The company has no outstanding court judgments or significant overdue debts[198]. - The company has confirmed that its prospectus for the IPO does not contain any false records or misleading statements[190]. Operational Risks and Management - The company reported no significant risks that could materially affect its operations during the reporting period[4]. - The company has confirmed that there are no non-operational fund occupations by controlling shareholders or related parties[4]. - The company has outlined potential risks in its operations, which can be found in the section discussing operational conditions[4]. - The company recognizes the risk of macroeconomic fluctuations affecting product demand, as its performance is closely tied to fixed asset investment levels[172]. - The company faces competition risks in the hydraulic breaker and component market, which is still in its growth phase, potentially impacting product promotion[173]. Product and Market Development - The company is primarily engaged in the research, development, production, and sales of hydraulic technology and products, including hydraulic demolition tools and components[33]. - The company has developed over 20 series of hydraulic breakers, including light, medium, and heavy types[36]. - Hydraulic breakers are widely used in construction, municipal engineering, mining, metallurgy, and transportation sectors[35]. - The company emphasizes a stable supply chain by establishing long-term relationships with multiple suppliers to ensure quality and timely delivery of raw materials[48]. - The sales strategy combines direct sales and distribution through dealers, enhancing market coverage and reducing costs[50]. - The company has successfully exported products to over 60 countries, expanding its brand recognition globally[73]. - The company plans to enhance its R&D capabilities and product differentiation to capture market share in the hydraulic breaker segment[85]. Research and Development - The company reported a significant increase in R&D expenses by 61.67%, indicating a commitment to innovation and product development[92]. - The company has increased its investment in R&D, with 190 personnel dedicated to this area, representing 12.58% of total employees[111]. - The company emphasizes technology innovation as a key competitive advantage, planning to increase R&D investment to expand its product range[153]. - The company has established a dedicated product R&D team to cater to international market demands, focusing on targeted product design and development to enhance competitiveness[156]. - The company is committed to increasing R&D efforts for new products and technologies to ensure strong competitiveness in the international market[156]. Market Trends and Competition - The hydraulic industry is experiencing a shift towards high-end products, which have higher profit margins compared to standard hydraulic products[141]. - The domestic hydraulic breaking hammer market has seen a rapid increase in demand since 2000, with domestic brands gaining substantial market share due to improved technology and product quality[60]. - The market for hydraulic breaking hammers is characterized by low concentration, with hundreds of brands competing, and domestic brands have significantly increased their market presence[61]. - The global hydraulic breaking hammer market is dominated by approximately 30 manufacturers, with major brands including Rammer, Atlas Copco, and Montabert, primarily concentrated in Europe and North America[59]. - Domestic hydraulic breaking hammer manufacturers have improved their competitiveness, achieving a significant increase in market share and brand influence in recent years[61]. Financial Position and Assets - The company's total assets reached ¥1,600,000,000, with a notable increase in fixed assets due to enhanced investment in equipment and infrastructure[120]. - Cash and cash equivalents rose by 86.27% to ¥122,592,027.13 from ¥65,814,428.94 year-over-year[118]. - Accounts receivable increased by 71.85% to ¥182,917,994.86 from ¥106,442,910.80 due to higher sales volume[120]. - Inventory surged by 119.50% to ¥367,151,327.16 from ¥167,267,955.12, reflecting expanded sales scale[120]. - Short-term borrowings increased significantly by 2,746.31% to ¥284,631,072.00 from ¥10,000,000.00, driven by increased procurement needs[120].

Financial Performance - The company's operating revenue for 2018 was approximately CNY 1.02 billion, representing a 59.15% increase compared to CNY 641.33 million in 2017[23]. - Net profit attributable to shareholders for 2018 was approximately CNY 225.17 million, a 61.20% increase from CNY 139.69 million in 2017[23]. - The basic earnings per share for 2018 was CNY 0.86, up 56.36% from CNY 0.55 in 2017[24]. - The weighted average return on equity for 2018 was 24.17%, an increase of 6.07 percentage points from 18.10% in 2017[24]. - The net cash flow from operating activities for 2018 was CNY 65.39 million, a decrease of 46.82% compared to CNY 122.95 million in 2017[23]. - The total assets at the end of 2018 were approximately CNY 1.69 billion, a 72.36% increase from CNY 979.13 million at the end of 2017[23]. - The net assets attributable to shareholders at the end of 2018 were approximately CNY 1.02 billion, reflecting a 21.58% increase from CNY 841.09 million at the end of 2017[23]. - The company achieved operating revenue of 1,020.65 million RMB, a year-on-year increase of 59.15%[94]. - Operating profit reached 260.53 million RMB, reflecting a growth of 61.29% compared to the previous year[94]. - Net profit attributable to shareholders was 225.17 million RMB, up 61.20% year-on-year[94]. - The net profit attributable to shareholders after deducting non-recurring gains and losses was 223.48 million RMB, an increase of 63.65% from the same period last year[94]. Dividends and Share Capital - The company plans to distribute cash dividends of RMB 2.00 per 10 shares, totaling RMB 52,096,000.00, and to increase capital by 4.8 shares for every 10 shares held, resulting in a total increase of 125,030,400 shares[4]. - As of December 31, 2018, the total share capital will increase to 385,510,400 shares after the capital increase[4]. - The cash dividends distributed in 2018 represented 23.14% of the net profit attributable to ordinary shareholders, which was RMB 225,174,133.27[175]. - The cash dividends distributed in 2017 accounted for 31.50% of the net profit attributable to ordinary shareholders, amounting to RMB 139,687,208.00[175]. - The cash dividends for 2016 constituted 66.50% of the net profit attributable to ordinary shareholders, which was RMB 79,394,018.87[175]. - The company has committed to a dividend policy that aims to provide stable returns to shareholders while considering business development goals[170]. - The company has established a future dividend return plan for 2018-2020 to further enhance its profit distribution policy[173]. Audit and Compliance - The company received a standard unqualified audit report from Ruihua Certified Public Accountants[4]. - The board of directors and senior management have guaranteed the accuracy and completeness of the annual report[4]. - The company has ensured compliance with all legal and regulatory requirements regarding its IPO and subsequent operations[182]. - There are no significant lawsuits or arbitration matters reported for the year[190]. - The company has no major related party transactions or changes in its employee incentive plans[194]. - The company has not encountered any risks of suspension or termination of its listing[190]. - There are no outstanding debts or unfulfilled court judgments against the company or its major stakeholders[190]. Market and Industry Analysis - The hydraulic breaker market is expected to grow as urban infrastructure projects and construction activities continue to expand in China[64]. - The hydraulic breaker industry is projected to experience growth rates above the industry average as domestic companies enhance their service and product quality[67]. - The domestic hydraulic breaker market has seen a rapid rise in demand since 2000, with local brands increasing their market share due to improved product quality and competitive pricing[62]. - The market for hydraulic breakers is currently fragmented, with over a hundred brands, leading to low industry concentration and many small manufacturers lacking strong R&D capabilities[62]. - The global hydraulic breaker market is dominated by around 30 major manufacturers, with a high concentration of production in Finland, Sweden, France, Germany, Japan, South Korea, and China[58]. - High-end hydraulic components in China are still heavily reliant on imports, with local production struggling to meet demand, particularly in sectors like aerospace and heavy machinery[70]. - The domestic high-end hydraulic component market is gradually improving, with a few companies achieving breakthroughs and beginning to challenge foreign monopolies[70]. - Government policies in recent years are expected to support the development of the high-end hydraulic component industry, potentially reducing reliance on imports[71]. Product Development and R&D - The company has developed a strong technical system with independent intellectual property rights, focusing on high-end hydraulic components[74]. - The company emphasizes product quality and has a competitive price advantage compared to both domestic and foreign products[75]. - The company plans to strengthen R&D in heavy hydraulic breakers to improve durability and impact capacity[88]. - The company is committed to continuous product innovation and enhancing its R&D capabilities to lead in the hydraulic product field[93]. - The total R&D expenditure accounted for 3.95% of the operating revenue, with 190 R&D personnel representing 12.58% of the total workforce[112]. - The company recognizes a shortage of skilled professionals in the hydraulic industry, which hampers innovation and development[143]. - The company has established a dedicated product R&D team targeting international market demands to enhance product design and development, aiming to improve service levels and customer satisfaction[150]. Operational Strategy - The procurement strategy involves selecting multiple suppliers based on quality and reliability, ensuring stable material supply and quality[48]. - The production plan is adjusted monthly based on order status and market changes, demonstrating flexibility in operations[49]. - The sales model combines direct sales and distribution through dealers, enhancing market coverage and reducing costs[50]. - The company aims to maintain its leading position in the hydraulic industry by focusing on continuous innovation, capacity enhancement, and improving management efficiency over the next two to three years[151]. - The company will enhance its marketing and after-sales service systems, participating in influential exhibitions to increase brand visibility and market impact[149]. - The company is committed to improving its ERP system and sales network information to optimize production and sales planning, thereby reducing operational costs and increasing investment returns[162]. Risks and Challenges - The company reported no significant risks that could materially affect its operations during the reporting period[4]. - The company has outlined potential risks in its operations, which can be found in the section discussing possible risks[4]. - The company recognizes the risk of macroeconomic fluctuations affecting product demand, as its performance is closely tied to fixed asset investment levels[164]. - The company faces competition risks in the hydraulic breaker and component market, which is still in its growth phase, potentially impacting product promotion and profitability[165]. - The company emphasizes the importance of continuous technological innovation to maintain its competitive edge and prevent adverse effects on future development[168].

Financial Performance - Operating revenue for the first nine months reached CNY 749,780,748.04, a 59.44% increase year-on-year[6] - Net profit attributable to shareholders rose by 70.76% to CNY 174,984,421.30 for the first nine months[6] - Revenue for the third quarter reached ¥749,780,748.04, a 59.44% increase compared to ¥470,253,791.40 in the previous period, driven by strong market demand[12] - The company reported a net profit margin improvement, with net profit for the first nine months reaching ¥221,472,047.62, compared to ¥161,189,541.92 in the previous year[20] - Net profit for Q3 2018 reached ¥52.99 million, compared to ¥34.37 million in Q3 2017, marking a year-over-year increase of 54.3%[25] - The total profit for Q3 2018 was approximately ¥39.43 million, compared to ¥21.94 million in Q3 2017, representing an increase of 80.0%[28] Assets and Liabilities - Total assets increased by 51.32% to CNY 1,481,668,950.52 compared to the end of the previous year[6] - The company's total liabilities increased to ¥509,295,641.88 from ¥138,042,019.00, primarily due to the rise in short-term borrowings[17] - The total assets of the company reached ¥1,200,269,856.10, up from ¥816,837,325.33 at the beginning of the year, marking a growth of 46.9%[20] - The total liabilities increased to ¥409,750,022.67 from ¥98,630,960.57, a significant rise of 315.5%[20] Cash Flow - Cash flow from operating activities decreased by 53.32% to CNY 22,957,821.28 compared to the same period last year[6] - The net cash flow from operating activities decreased by 53.32% to ¥22,957,821.28, down from ¥49,181,024.50, mainly due to increased procurement and customer settlements via notes[12] - Operating cash inflow for the first nine months of 2018 was CNY 529,630,007.22, an increase from CNY 388,033,728.99 in the same period last year, representing a growth of approximately 36.4%[29] - The company reported a net increase in cash and cash equivalents of CNY -50,071.34, contrasting with an increase of CNY 18,751,448.05 in the same period last year[30] Investments and Expenses - R&D expenses surged by 114.69% to ¥32,466,717.48, up from ¥15,122,334.55, indicating a significant investment in new product development[12] - Research and development expenses for the quarter were ¥10,279,221.61, up 80.5% from ¥5,686,254.48 in the same period last year[23] - Research and development expenses for the first nine months of 2018 were ¥20.36 million, significantly higher than ¥8.07 million in the same period last year, showing an increase of 152.5%[27] - Operating costs rose to ¥417,811,816.68, reflecting a 56.02% increase from ¥267,789,583.44, primarily due to increased sales volume[12] Shareholder Information - The total number of shareholders reached 6,501 by the end of the reporting period[8] - Basic and diluted earnings per share increased by 12.17% to CNY 0.6718[7] - Basic earnings per share for Q3 2018 were ¥0.2034, up from ¥0.1953 in Q3 2017, representing a growth of 10.7%[25] Inventory and Receivables - Accounts receivable increased by 97.79% to CNY 142,238,903.61 due to sales growth[10] - Inventory surged by 84.58% to CNY 308,735,653.96 to meet market demand[10] - The company reported a significant increase in accounts receivable, which reached ¥168,973,703.33, up from ¥106,442,910.80, indicating higher sales volume[15] - Accounts receivable rose to ¥113,915,243.63 from ¥96,768,502.87, indicating a 17.7% increase[19] - Inventory levels surged to ¥206,520,340.58, compared to ¥97,147,607.95 at the start of the year, reflecting a 112.5% increase[19]

Financial Performance - The company's operating revenue for the first half of 2018 reached RMB 503.60 million, representing a 64.21% increase compared to RMB 306.69 million in the same period last year[17]. - The net profit attributable to shareholders for the first half of 2018 was RMB 121.99 million, a 79.14% increase from RMB 68.10 million in the previous year[17]. - The basic earnings per share for the first half of 2018 was RMB 0.4683, up 15.97% from RMB 0.4038 in the same period last year[17]. - The company reported a net profit after deducting non-recurring gains and losses of RMB 121.94 million, which is an 82.59% increase from RMB 66.78 million in the previous year[17]. - The diluted earnings per share for the first half of 2018 was RMB 0.4683, consistent with the basic earnings per share[18]. - The total comprehensive income for the first half of 2018 was ¥81,507,412.36, compared to ¥36,149,704.32 in the same period last year, indicating a growth of 125.0%[113]. - The company's operating status is good, with sales revenue of main products increasing year by year, reaching RMB 503.60 million, a 64.21% increase compared to the previous year[64]. Cash Flow and Financial Position - The net cash flow from operating activities was RMB 35.14 million, a decrease of 12.31% compared to RMB 40.08 million in the previous year[17]. - Cash flow from operating activities decreased by 12.31% to RMB 35.14 million, attributed to increased material procurement and higher acceptance payment ratios[64]. - The company reported a net cash outflow from investing activities of ¥120,083,922.44, compared to a net outflow of ¥53,485,453.75 in the previous year[116]. - Cash and cash equivalents increased to RMB 124,181,969.20 from RMB 65,814,428.94, representing an increase of 88.5%[102]. - The company's total liabilities increased to ¥357,623,488.69 from ¥98,630,960.57, marking a significant rise of 262.5%[107]. Assets and Liabilities - The total assets at the end of the reporting period were RMB 1.37 billion, an increase of 39.52% from RMB 979.13 million at the end of the previous year[17]. - The total assets of the company's subsidiary, Yantai Aidi Hydraulic Technology Co., Ltd., amounted to RMB 426.15 million, with a net profit of RMB 40.49 million for the first half of 2018[68]. - The company's fixed assets amounted to RMB 423,916,769.57, up from RMB 363,588,827.95, showing an increase of 16.6%[102]. - The company's total current assets were RMB 602,092,070.35 as of June 30, 2018, an increase of 65.6% from RMB 363,615,151.48 at the beginning of the period[102]. Market and Product Development - The main business involves the research, development, production, and sales of hydraulic technology and products, including hydraulic demolition tools and components[21]. - The company has developed over 20 series of hydraulic breakers, categorized into light, medium, and heavy types, showcasing a strong product range[24]. - The company is focusing on product differentiation and enhancing its market share in lightweight and medium hydraulic breakers, while also improving heavy hydraulic breaker R&D[64]. - The company has improved its production technology and product quality since 2005, enhancing its competitiveness in the hydraulic breaker market[44]. - The hydraulic breaker technology has advanced with new product launches, expanding its application fields and increasing market demand driven by urbanization and infrastructure projects[56]. Shareholder and Capital Management - The total number of shares increased from 118,579,990 to 175,498,385 due to a capital reserve conversion of 56,918,395 shares[82]. - Major shareholders are allowed to reduce their holdings by no more than 5% of their total shares each year, with a minimum price not lower than the issue price[75]. - The company distributed 52,800.00 million RMB to shareholders, which represents a decrease in profit allocation compared to the previous period[129]. - The company has committed to not transferring or selling shares held by major shareholders for a period of 36 months post-IPO[75]. Risk Management and Compliance - The company did not face any significant risks that could materially affect its operations during the reporting period[5]. - The company has fulfilled its commitment to not interfere with operational management or infringe on company interests[75]. - There were no significant lawsuits or arbitration matters during the reporting period[78]. - The company retained Ruihua Certified Public Accountants for the 2018 audit, with no changes in the accounting firm during the reporting period[77]. Research and Development - The company has increased its R&D expenditure by 135.13% to RMB 22.19 million, emphasizing the importance of innovation in hydraulic products[64]. - The company incurs all research and development expenses in the current period, without distinguishing between research phase and development phase expenditures[193]. Accounting Policies and Financial Reporting - The financial statements comply with the enterprise accounting standards, ensuring transparency and accuracy in financial reporting[142]. - The company’s accounting period runs from January 1 to December 31, aligning with standard fiscal practices[143]. - The company assesses the impairment of financial assets on each balance sheet date, recognizing impairment losses when there is objective evidence of impairment[164].

Financial Performance - The company's operating revenue for 2017 was RMB 641,329,293.31, representing a 60.31% increase compared to RMB 400,060,859.88 in 2016[20] - The net profit attributable to shareholders for 2017 was RMB 139,687,208.00, a 75.94% increase from RMB 79,394,018.87 in the previous year[20] - The net profit after deducting non-recurring gains and losses was RMB 136,558,330.26, up 74.51% from RMB 78,254,066.33 in 2016[20] - Cash flow from operating activities reached RMB 122,953,535.32, reflecting a 73.26% increase compared to RMB 70,965,283.14 in 2016[20] - Total assets at the end of 2017 amounted to RMB 979,132,301.37, a 47.60% increase from RMB 663,352,344.59 at the end of 2016[20] - The net assets attributable to shareholders increased to RMB 841,090,282.37, which is a 66.61% rise from RMB 504,832,786.18 in 2016[20] - Basic earnings per share increased by 34.76% to CNY 0.8106 in 2017 compared to CNY 0.6015 in 2016[21] - The weighted average return on equity rose to 18.10% in 2017, an increase of 0.97 percentage points from 17.13% in 2016[21] - Total revenue for the fourth quarter reached CNY 171,075,501.91, with net profit attributable to shareholders at CNY 37,213,705.20[23] - The company reported a net cash flow from operating activities of CNY 73,772,510.82 in the fourth quarter, a significant increase from previous quarters[23] Dividend and Shareholder Information - The company plans to distribute a cash dividend of RMB 2.50 per 10 shares, totaling RMB 44,000,000.00, and to increase capital stock by 84,480,000 shares[5] - The company approved a cash dividend of RMB 3.00 per share for the 2016 fiscal year, totaling RMB 52.8 million, to provide stable returns to shareholders[127] - The company plans to distribute a cash dividend of RMB 2.50 per share for the 2017 fiscal year, totaling RMB 44 million, along with a capital reserve increase of 4.8 shares for every 10 shares held[127] - The company reported a cash dividend of 2.50 RMB per 10 shares for the year 2017, totaling 44 million RMB, which represents 31.50% of the net profit attributable to ordinary shareholders[128] - In 2016, the company distributed a cash dividend of 3.00 RMB per 10 shares, amounting to 52.8 million RMB, accounting for 66.50% of the net profit attributable to ordinary shareholders[128] Market and Industry Insights - The company specializes in hydraulic technology, focusing on the development and production of hydraulic demolition tools and components[29] - The main product line includes hydraulic breakers, hydraulic pumps, and multi-way control valves, essential for construction and mining operations[29] - The company aims to expand its market presence in construction, municipal engineering, and mining sectors[29] - The hydraulic industry faces high technical barriers, particularly in producing key components like cylinders and control valves, which are dominated by a few companies[94] - The domestic hydraulic breaker market has seen a significant rise in demand since 2000, with many foreign brands losing market share to domestic manufacturers due to increased competition[49] - The global hydraulic breaker market is dominated by about 30 major manufacturers, with high concentration in Europe, Japan, and Korea, while the domestic market remains fragmented with many small players[47][49] Research and Development - The company has a strong technical capability with a proprietary technology system in high-pressure hydraulic components, breaking the long-standing foreign brand monopoly[58] - The company plans to enhance product differentiation and increase market share in lightweight and medium hydraulic breakers[65] - The company aims to strengthen R&D in high-end hydraulic components to reduce reliance on imports and improve market competitiveness[64] - Research and development expenses totaled ¥24,945,263.01, representing 3.89% of total operating income, with a 43.93% increase from the previous year[86] - The company is focusing on increasing marketing efforts and expanding its sales network to boost market share[66] Operational and Production Insights - The company produced 9,544 hydraulic hammers, with a sales volume of 9,573, indicating a production increase of 86.88% compared to the previous year[78] - The company's production plan is adjusted monthly based on order status and market changes, ensuring responsiveness to market demands[37] - The company has established stable relationships with multiple suppliers to ensure the quality and timely supply of raw materials, including steel, sealing parts, and standard components[36] - The company employs a sales model primarily based on distributors, which helps to quickly build a wide-reaching sales network and improve market share while reducing sales and after-sales maintenance costs[39] Financial Position and Cash Flow - The net cash flow from financing activities surged to ¥140,340,116.60, a significant increase of 590.48% due to funds raised from the company's IPO[87] - The company reported a net cash flow from investing activities of -¥255,205,906.80, indicating a 208.91% increase in cash outflow due to new factory construction and equipment purchases[87] - Cash and cash equivalents increased by 29.80% to 65,814,428.94, accounting for 6.72% of total assets[89] - Accounts receivable rose by 49.50% to 71,914,707.41, representing 7.34% of total assets, driven by increased sales volume[89] - Inventory increased by 28.27% to 167,267,955.12, making up 17.08% of total assets, reflecting higher sales volume[89] Governance and Compliance - The company has a governance structure that includes a shareholders' meeting, board of directors, supervisory board, and management team[179] - The audit report confirmed that the financial statements fairly represent the company's financial position and operating results in accordance with accounting standards[189] - The company has not faced any penalties from securities regulatory agencies in the past three years[174] - The company has not reported any significant litigation or arbitration matters during the reporting period[137] Future Plans and Strategies - The company plans to enhance its talent acquisition strategy, focusing on recruiting top talent in precision hydraulic component design and manufacturing[105] - The company intends to segment the global market further and establish a regional responsibility system to improve sales volume and international influence[118] - The company plans to enhance its ERP system and strengthen the informatization of its sales network to optimize procurement, warehousing, and production processes, thereby reducing costs and improving ROI[119] - The management team emphasized the importance of sustainability initiatives, aiming for a 30% reduction in carbon emissions by 2025[169]

[Important Notice](index=3&type=section&id=Item%201.%20Important%20Notice) The company's management affirms the truthfulness and completeness of this unaudited quarterly report and its financial statements [Board Statement and Audit Status](index=3&type=section&id=1.1%20Board%20of%20Directors%2C%20Supervisory%20Board%2C%20and%20Senior%20Management%20Statement) The board and management confirm the accuracy and completeness of the unaudited quarterly report and its financial statements - Company management confirmed the truthfulness, accuracy, and completeness of this quarterly report and assumes individual and joint legal responsibility[7](index=7&type=chunk) - This quarterly financial report is unaudited[7](index=7&type=chunk) [Company Profile](index=3&type=section&id=Item%202.%20Company%20Profile) The company reported strong financial growth in Q1 2018, with significant revenue and net profit increases, alongside changes in asset and shareholder structures [Key Financial Data](index=3&type=section&id=2.1%20Key%20Financial%20Data) The company achieved strong Q1 2018 performance with significant revenue and net profit growth, despite negative and expanding operating cash flow Financial Performance Indicators | Indicator | Current Period | Prior Year Period | Year-over-Year Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue (CNY) | 216,849,112.37 | 139,070,244.92 | 55.93% | | Net Profit Attributable to Shareholders (CNY) | 51,059,328.47 | 30,627,899.69 | 66.71% | | Net Profit Attributable to Shareholders Excluding Non-recurring Items (CNY) | 50,941,402.28 | 30,246,111.13 | 68.42% | | Basic EPS (CNY/share) | 0.29 | 0.19 | 52.63% | | Weighted Average ROE (%) | 5.89% | 4.47% | Increased 1.42 percentage points | | Net Cash Flow from Operating Activities (CNY) | -10,553,403.61 | -5,113,111.04 | -106.4% | Asset Indicators | Asset Indicator | End of Reporting Period (CNY) | End of Prior Year (CNY) | Change (%) | | :--- | :--- | :--- | :--- | | Total Assets (CNY) | 1,113,916,654.06 | 979,132,301.37 | 13.77% | | Net Assets Attributable to Shareholders (CNY) | 892,911,806.92 | 841,090,282.37 | 6.16% | - Total non-recurring gains and losses for the reporting period amounted to **CNY 117,926.19**, primarily from net non-operating income and expenses[9](index=9&type=chunk) [Shareholder Ownership](index=5&type=section&id=2.2%20Shareholder%20Information%20at%20Period-End) As of the reporting period end, the company had 6,680 shareholders, with the top three holding 62.5% of shares, including some pledged by major shareholders - As of the end of the reporting period, the company had a total of **6,680 shareholders**[9](index=9&type=chunk) Shareholder Information | Shareholder Name | Shareholding Percentage (%) | Share Status | | :--- | :--- | :--- | | FENG XIAO HONG | 25.00% | Pledged **4.1 million** shares | | SONG YU XUAN | 18.75% | None | | Yantai Xiangyu Investment Co., Ltd. | 18.75% | Pledged **5.95 million** shares | | Yantai Haoyin Investment Center (Limited Partnership) | 4.87% | None | [Significant Events](index=6&type=section&id=Item%203.%20Significant%20Events) The company experienced significant financial changes driven by market conditions and operational expansion, with no other major events or unfulfilled commitments [Analysis of Significant Changes in Financial Statement Items and Indicators](index=6&type=section&id=3.1%20Analysis%20of%20Major%20Financial%20Statement%20Changes) Significant changes in financial statement items reflect market improvements and operational expansion, with increased assets and liabilities, higher revenues and expenses, and altered cash flow patterns Balance Sheet Items | Balance Sheet Item | Change (%) | Reason | | :--- | :--- | :--- | | Accounts Receivable | 81.69% | Favorable market conditions, increase in accounts receivable with reasonable payment terms | | Inventories | 26.41% | Favorable market conditions, increased raw material procurement | | Construction in Progress | 31.39% | Increased infrastructure investment | | Short-term Borrowings | 400.00% | Increased loans to support expanded production | | Accounts Payable | 52.49% | Increased procurement, leading to higher accounts payable | Income Statement Items | Income Statement Item | Change (%) | Reason | | :--- | :--- | :--- | | Operating Revenue | 55.93% | Sustained favorable market conditions, increased sales volume | | Administrative Expenses | 66.68% | Continued increase in R&D investment | | Financial Expenses | 133.86% | Exchange rate fluctuations in the market | | Taxes and Surcharges | -38.83% | Increased VAT refunds led to a reduction in surtaxes | Cash Flow Statement Items | Cash Flow Statement Item | Change (%) | Reason | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | -106.40% | Increased procurement, and major customers primarily settle with bills | | Net Cash Flow from Investing Activities | -95.87% | Increased investment in infrastructure | | Net Cash Flow from Financing Activities | -83.60% | Due to approximately CNY 290 million in IPO proceeds in January 2017 | [Other Significant Events](index=7&type=section&id=3.2%20Progress%20and%20Impact%20of%20Significant%20Events) The company reported no significant event progress, overdue unfulfilled commitments, or adverse profit forecasts during the period - No significant event progress, overdue unfulfilled commitments, or major performance change warnings were reported during the period[13](index=13&type=chunk) [Appendix: Financial Statements](index=8&type=section&id=Item%204.%20Appendix) This appendix provides the consolidated and parent company financial statements, including balance sheets, income statements, and cash flow statements [Consolidated Balance Sheet](index=8&type=section&id=4.1%20Consolidated%20Balance%20Sheet) As of March 31, 2018, total assets reached CNY 1.11 billion, with liabilities significantly increasing to CNY 221 million, while equity attributable to parent company owners grew to CNY 893 million Consolidated Balance Sheet | Item | Period-end Balance (CNY) | Year-beginning Balance (CNY) | | :--- | :--- | :--- | | **Total Assets** | **1,113,916,654.06** | **979,132,301.37** | | Total Current Assets | 459,205,401.31 | 363,615,151.48 | | Total Non-current Assets | 654,711,252.75 | 615,517,149.89 | | **Total Liabilities** | **221,004,847.14** | **138,042,019.00** | | Total Current Liabilities | 200,090,812.47 | 116,060,584.56 | | Total Non-current Liabilities | 20,914,034.67 | 21,981,434.44 | | **Total Owners' Equity** | **892,911,806.92** | **841,090,282.37** | [Consolidated Income Statement](index=12&type=section&id=4.1%20Consolidated%20Income%20Statement) Q1 2018 saw total operating revenue reach CNY 217 million, driving operating profit to CNY 59.41 million and net profit attributable to parent company shareholders to CNY 51.06 million Consolidated Income Statement | Item | Current Period Amount (CNY) | Prior Period Amount (CNY) | | :--- | :--- | :--- | | I. Total Operating Revenue | 216,849,112.37 | 139,070,244.92 | | II. Total Operating Costs | 157,791,262.85 | 103,698,586.90 | | III. Operating Profit | 59,405,542.40 | 35,371,658.02 | | IV. Total Profit | 59,544,279.10 | 35,820,821.03 | | V. Net Profit | 51,059,328.47 | 30,627,899.69 | | Net Profit Attributable to Parent Company Shareholders | 51,059,328.47 | 30,627,899.69 | | VII. Total Comprehensive Income | 51,059,328.47 | 30,627,899.69 | | VIII. Basic EPS (CNY/share) | 0.29 | 0.19 | [Consolidated Cash Flow Statement](index=16&type=section&id=4.1%20Consolidated%20Cash%20Flow%20Statement) Q1 2018 saw negative operating cash flow of CNY -10.55 million, investing cash outflow of CNY 43.63 million, and financing cash inflow of CNY 39.70 million, resulting in a period-end cash balance of CNY 40.78 million Consolidated Cash Flow Statement | Item | Current Period Amount (CNY) | Prior Period Amount (CNY) | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | -10,553,403.61 | -5,113,111.04 | | Net Cash Flow from Investing Activities | -43,627,222.02 | -22,273,697.57 | | Net Cash Flow from Financing Activities | 39,703,474.99 | 242,123,893.77 | | Net Increase in Cash and Cash Equivalents | -14,920,677.66 | 214,671,206.20 | | Period-end Cash and Cash Equivalents Balance | 40,775,995.10 | 263,596,490.35 | [Parent Company Financial Statements](index=10&type=section&id=Parent%20Company%20Balance%20Sheet) Parent company financial statements, including balance sheet, income statement, and cash flow, show trends consistent with consolidated reports but exclude subsidiary data - Parent company statement data (balance sheet, income statement, cash flow statement) are provided, reflecting the financial status of the company's headquarters, with trends largely consistent with consolidated reports[18](index=18&type=chunk)[25](index=25&type=chunk)[29](index=29&type=chunk)