[Important Notice](index=3&type=section&id=Item%20I.%20Important%20Notice) This section confirms the accuracy and completeness of the quarterly report by the company's management and notes its unaudited status - The company's board of directors, supervisory board, and senior management ensure the truthfulness, accuracy, and completeness of this quarterly report, free from false records, misleading statements, or major omissions, and bear corresponding legal responsibilities[3](index=3&type=chunk) - This company's Q1 2021 report has not been audited[3](index=3&type=chunk) [Company Overview](index=3&type=section&id=Item%20II.%20Company%20Overview) This section provides an overview of the company's key financial performance for Q1 2021 and details its shareholder structure [Key Financial Data](index=3&type=section&id=Item%202.1%20Key%20Financial%20Data) In Q1 2021, the company achieved operating revenue of **RMB 258 million**, a **51.69%** year-on-year increase; net profit attributable to shareholders was **RMB 59.44 million**, up **43.47%**; net cash flow from operating activities surged by **1977.44%**, driven by strong sales growth and enhanced collection management 2021 Q1 Key Financial Indicators | Indicator | Current Period | Prior Year Period | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue (RMB) | 257,509,227.67 | 169,760,496.11 | 51.69% | | Net Profit Attributable to Shareholders (RMB) | 59,444,815.51 | 41,432,424.97 | 43.47% | | Net Profit Attributable to Shareholders (Excluding Non-recurring Items) (RMB) | 57,345,989.83 | 40,720,623.28 | 40.83% | | Basic Earnings Per Share (RMB/share) | 0.38 | 0.36 | 5.56% | | Net Cash Flow from Operating Activities (RMB) | 69,291,462.28 | 3,335,421.81 | 1,977.44% | | R&D Investment as % of Operating Revenue (%) | 9.65% | 5.76% | Increased by 3.88 percentage points | - Non-recurring gains and losses totaled **RMB 2.0988 million**, primarily including **RMB 1.4486 million** in government subsidies and **RMB 1.2650 million** in fair value changes of financial assets held for trading[6](index=6&type=chunk)[7](index=7&type=chunk) [Shareholder Information](index=5&type=section&id=Item%202.2%20Total%20Shareholders%2C%20Top%20Ten%20Shareholders%2C%20and%20Top%20Ten%20Shareholders%20with%20Unrestricted%20Shares%20at%20Period-End) As of the end of the reporting period, the company had **16,891** shareholders; the top two shareholders, ZTE New Communications Co., Ltd. and Huangshi Rongke Innovation Investment Fund Center (Limited Partnership), held **27.91%** and **14.13%** respectively, both being restricted shares - As of the end of the reporting period, the company had **16,891** common stock shareholders[8](index=8&type=chunk) Top Ten Shareholders' Shareholding | Shareholder Name | Shareholding (%) | Number of Shares Held (shares) | | :--- | :--- | :--- | | ZTE New Communications Co., Ltd. | 27.91 | 43,218,677 | | Huangshi Rongke Innovation Investment Fund Center (Limited Partnership) | 14.13 | 21,873,364 | | Beijing Rongtong Gaoke Capital Management Center (Limited Partnership) | 7.03 | 10,887,050 | | Shenzhen Jinghedao Investment Management Partnership (Limited Partnership) | 3.49 | 5,399,448 | | Yue Hongwei | 3.32 | 5,140,869 | [Significant Events](index=7&type=section&id=Item%20III.%20Significant%20Events) This section analyzes major changes in the company's financial statement items and key indicators during the reporting period [Analysis of Significant Changes in Key Financial Statement Items and Indicators](index=7&type=section&id=Item%203.1%20Analysis%20of%20Significant%20Changes%20in%20Key%20Financial%20Statement%20Items%20and%20Indicators) During the reporting period, several financial indicators changed significantly; inventory increased by **37.92%** due to business expansion; short-term borrowings were cleared and notes payable decreased by **83.66%** due to loan repayment; revenue growth led to increased costs and expenses, with sales and R&D expenses surging by **185.22%** and **153.81%** respectively; operating cash flow soared by **1977.44%** due to increased sales collection, while investing cash flow saw significant outflow from wealth management purchases and expansion investments Balance Sheet Key Item Changes and Reasons | Item | Change (%) | Reason for Change | | :--- | :--- | :--- | | Financial Assets Held for Trading | Not applicable | Primarily due to an increase in bank structured deposits | | Notes Receivable | 95.03% | Primarily due to increased sales business, leading to a corresponding increase in notes receivable | | Prepayments | 178.24% | Primarily due to increased business, leading to a corresponding increase in prepayments | | Inventory | 37.92% | Primarily due to increased production capacity, leading to the company increasing its stock | | Short-term Borrowings | -100.00% | Primarily due to the company repaying loans | | Notes Payable | -83.66% | Primarily due to notes maturing | | Contract Liabilities | 64.74% | Primarily due to increased sales business, leading to a corresponding increase in contract liabilities | Income Statement Key Item Changes and Reasons | Item | Change (%) | Reason for Change | | :--- | :--- | :--- | | Operating Revenue | 51.69% | Primarily due to sales business growth | | Sales Expenses | 185.22% | Primarily due to increased sales revenue, leading to a corresponding increase in sales expenses | | Administrative Expenses | 129.29% | Primarily due to increased intermediary fees, maintenance fees, and other administrative expenses | | R&D Expenses | 153.81% | Primarily due to an increase in R&D personnel and direct R&D investment | | Financial Expenses | 222.25% | Primarily due to increased interest income from purchasing time deposits with idle raised funds | Cash Flow Statement Key Item Changes and Reasons | Item | Change (%) | Reason for Change | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 1,977.44% | Primarily due to increased sales collection | | Net Cash Flow from Investing Activities | 15,075.18% | Primarily due to purchasing structured deposits with idle raised funds and increased investment in expansion | | Net Cash Flow from Financing Activities | -479.19% | Primarily due to increased repayment of short-term borrowings | [Appendix](index=10&type=section&id=Item%20IV.%20Appendix) This section includes the company's unaudited financial statements, details on the first-time adoption of new lease standards, and the audit report status [Financial Statements](index=10&type=section&id=Item%204.1%20Financial%20Statements) This section provides the company's unaudited detailed financial statements for Q1 2021, including consolidated and parent company balance sheets, income statements, and cash flow statements - The appendix includes consolidated and parent company balance sheets as of March 31, 2021[18](index=18&type=chunk)[20](index=20&type=chunk) - The appendix includes consolidated and parent company income statements for Q1 2021[23](index=23&type=chunk)[27](index=27&type=chunk) - The appendix includes consolidated and parent company cash flow statements for Q1 2021[28](index=28&type=chunk)[32](index=32&type=chunk) [Adjustments for First-time Adoption of New Lease Standards from 2021](index=22&type=section&id=Item%204.2%20Adjustments%20to%20Opening%20Financial%20Statements%20for%20First-time%20Adoption%20of%20New%20Lease%20Standards%20from%202021) Effective January 1, 2021, the company adopted new lease standards; this accounting policy change resulted in adjustments to the opening financial statements, primarily recognizing **RMB 27.48 million** in right-of-use assets and corresponding **RMB 10.89 million** in non-current liabilities due within one year and **RMB 16.58 million** in lease liabilities in the consolidated balance sheet - The company first adopted the new lease standards on January 1, 2021, and adjusted relevant items in the opening financial statements for the year[35](index=35&type=chunk) Impact of New Lease Standards on Consolidated Balance Sheet as of January 1, 2021 | Statement Item | Adjustment Amount (RMB) | Impact | | :--- | :--- | :--- | | Right-of-use Assets | +27,476,960.36 | Asset increase | | Non-current Liabilities Due Within One Year | +10,894,541.96 | Liability increase | | Lease Liabilities | +16,582,418.40 | Liability increase | [Audit Report](index=27&type=section&id=Item%204.4%20Audit%20Report) This quarterly report is unaudited - This quarterly financial report is unaudited[42](index=42&type=chunk)

Financial Performance - The company achieved total operating revenue of CNY 1,120,070,051.43 in 2020, representing a year-on-year increase of 36.62%[18]. - Net profit attributable to shareholders reached CNY 274,485,010.11, a significant increase of 90.46% compared to the previous year[18]. - The company's total assets grew to CNY 3,213,764,109.01, marking a 303.26% increase year-on-year[18]. - The net assets attributable to shareholders increased by 515.03% to CNY 2,733,523,311.97 by the end of 2020[18]. - The gross profit margin for the year was 43.52%, an increase of 6.49 percentage points compared to the previous year[63]. - Revenue from energy storage products reached CNY 1,044,627,376.19, with a year-on-year increase of 40.31%[64]. - The total profit for the year was CNY 311.94 million, with a year-on-year increase of 89.82%[52]. - The company reported a net profit attributable to the parent company of CNY 27,448.50 million, up 90.46% year-on-year[60]. - The company reported a significant increase in revenue, achieving a total of 1.5 billion in 2020, representing a year-over-year growth of 25%[177]. Dividend Policy - The company plans to distribute a cash dividend of RMB 5.50 per 10 shares, totaling approximately RMB 85.16 million, representing a cash dividend payout ratio of 31.03%[4]. - For the fiscal year 2020, the company proposed a cash dividend of RMB 5.50 per 10 shares, totaling RMB 85,164,493.15, which represents 31.03% of the net profit attributable to shareholders[92]. - The company has not distributed dividends in the years 2018 and 2019, indicating a focus on reinvestment during those periods[92]. - The company has a stable profit distribution policy, prioritizing cash dividends, with a minimum cash dividend amounting to 10% of the distributable profit[90]. Risk Management - The company has faced various operational risks, which are detailed in the report's section on "Risk Factors"[3]. - The company has a comprehensive risk management strategy outlined in the report[3]. - The company emphasizes that forward-looking statements in the report do not constitute substantive commitments to investors[5]. - The company has implemented measures to mitigate risks related to core technology leakage through confidentiality agreements and patent applications[54]. - The company faces risks related to the supply of key raw materials, with a notable increase in prices expected in Q1 2021 due to tight supply-demand conditions in the lithium battery industry[55]. - The company is exposed to risks from potential changes in industry policies, particularly regarding energy storage subsidies in key markets[57]. Research and Development - Research and development expenses accounted for 6.48% of operating revenue, a decrease of 0.86 percentage points from the previous year[20]. - The company has engaged Tianjian Accounting Firm for auditing services, ensuring compliance and accuracy in financial reporting[17]. - The company has invested significantly in R&D to enhance its core technologies, including battery management systems and energy storage system integration[38]. - The company has 233 R&D personnel, which constitutes 29.68% of the total workforce, an increase from 24.41% in the previous year[46]. - Research and development (R&D) expenses amounted to ¥72,623,204.71, representing a 20.65% increase compared to the previous year, while the R&D expenses as a percentage of operating income decreased from 7.34% to 6.48%[50]. - The company has received multiple awards in 2020, including the "Best Energy Storage Battery Supplier" at the China International Energy Storage Conference[29]. Market Expansion and Strategy - The company plans to continue expanding its market presence both domestically and internationally, leveraging the positive trends in the global energy storage market[21]. - The global energy storage market is projected to grow at a compound annual growth rate (CAGR) of 37%, with installed capacity expected to reach 13.8 GW/29.4 GWh by 2023[37]. - The company aims to provide integrated energy storage solutions for various applications, including residential, commercial, and grid-level storage[30]. - The company plans to enhance its lithium battery storage products focusing on safety, longevity, and reliability, aiming to become a leading provider of lithium-ion battery storage systems globally[87]. - The company is currently developing a high-capacity lithium battery system for data centers, with an investment of ¥609.70 million, which is in the testing phase[44]. Corporate Governance - The company has established a comprehensive governance structure to protect the rights of shareholders and creditors, ensuring timely and accurate information disclosure[131]. - The company has implemented a training management system to improve employee quality and organizational efficiency[194]. - The board of directors consists of 11 members, including 4 independent directors, which complies with relevant regulations[197]. - The company has established specialized committees within the board, including a strategy committee and an audit committee, which operate effectively[198]. - The company has a robust employee rights protection system, including comprehensive social insurance coverage and regular health check-ups[132]. Environmental Compliance - The company has successfully implemented an environmental management system that meets the ISO14001:2015 standard, ensuring compliance with national environmental laws and regulations[139]. - The company’s wastewater treatment capacity is currently 10 tons per day, and wastewater discharge complies with the "Battery Industry Pollutant Discharge Standards" (GB30484-2013) requirements[137]. - The company has not experienced any environmental pollution incidents during the reporting period and has not faced penalties for violating environmental laws[139]. - The company’s solid waste is fully utilized or properly disposed of, adhering to relevant pollution control standards[139]. Shareholder Information - The company has a total of 14,707 ordinary shareholders at the end of the reporting period, down from 16,891 at the end of the previous month[154]. - Major shareholders include ZTE Communications Co., Ltd. with 27.91% and Huangshi Rongke Innovation Investment Fund Center with 14.13%[155]. - The company reported a total of 43,218,677 restricted shares held by ZTE New Communications Co., Ltd., which will be tradable on January 2, 2024[159]. - The company has a significant investment in ZTE Corporation, holding 22.44% of its shares as of the report date[164]. Audit and Compliance - The company has received a standard unqualified audit report from Tianjian Accounting Firm[3]. - The company has no major litigation or arbitration matters during the reporting period, indicating a stable legal standing[119]. - The company has no major accounting errors or changes in accounting policies that would affect the financial statements significantly[117]. - The company assumes legal responsibility for the accuracy and completeness of the IPO prospectus and related documents[96].