Financial Performance - The company reported a total revenue of RMB 500 million for the first half of 2022, representing a year-on-year increase of 20%[16]. - The company reported operating revenue of RMB 159.63 million for the first half of the year, a decrease of 14.33% compared to the same period last year[23]. - Net profit attributable to shareholders was RMB 28.46 million, down 49.67% year-on-year[23]. - The net profit after deducting non-recurring gains and losses was RMB 6.16 million, a decline of 85.19% compared to the previous year[23]. - The company achieved a net cash flow from operating activities of RMB 49.41 million, an increase of 260.75% year-on-year, mainly due to a significant reduction in tax payments[26]. - The weighted average return on net assets decreased by 4.27 percentage points to 1.38% compared to the same period last year[23]. - The average selling price of the main product, ceramic medium filters, decreased by 15.38% compared to the previous year, contributing to the decline in revenue[26]. - Revenue from the top five customers accounted for 90.49% of total operating revenue, with the largest customer, Huawei, contributing 77.30%[100]. - The company reported total operating revenue of CNY 15,963.28 million, a year-on-year decrease of 14.33%, while the net profit attributable to shareholders was CNY 2,845.95 million, down 49.67%[109]. - The company's operating costs increased by 17.60% to CNY 120,800.07 million, primarily due to rising labor costs and increased equipment depreciation[109]. Research and Development - The company has invested RMB 50 million in research and development for new technologies in the first half of 2022, a 30% increase from the previous year[16]. - Research and development expenses accounted for 9.20% of operating revenue, an increase of 1.74 percentage points year-on-year[23]. - The company has developed over 150 types of dielectric ceramic powder formulas, with more than 60 already commercialized[54]. - The company has developed over 60 commercialized dielectric ceramic powder formulas with dielectric constants ranging from 4 to 130, suitable for applications in dielectric waveguide filters and resonators operating at frequencies below 18GHz[62]. - The company has a mature R&D team with over 20 years of experience in ceramic powder material sintering technology, enhancing its competitive edge[90]. - The company is focused on continuous high investment in R&D to meet the evolving demands of the communication industry for more efficient and stable filter devices[93]. - The company maintains a robust R&D process, with a focus on technological innovation and new product development, guided by market trends and customer needs[61]. Market and Industry Outlook - The company plans to expand its market presence in Southeast Asia, targeting a 10% market share by the end of 2023[16]. - The demand for microwave dielectric ceramic components is expected to grow significantly in the 5G communication sector, as they meet the requirements for miniaturization and lightweight design[39]. - The overall market outlook for microwave dielectric ceramic components remains positive, with significant opportunities arising from the shift towards 5G technology and infrastructure[46]. - The investment scale of China's 5G communication network is expected to exceed 1.2 trillion yuan, with a growth of over 60% compared to 4G[51]. - The company is strategically positioned to capitalize on the anticipated investment in communication equipment driven by the dual focus on macro and small base station construction[46]. Risks and Challenges - The company has identified potential risks related to supply chain disruptions and is actively working on mitigation strategies[16]. - The company faces risks related to market competition, particularly from traditional metal cavity filter manufacturers entering the ceramic dielectric filter market[103]. - The company is exposed to risks from concentrated accounts receivable, with 62.40% of accounts receivable attributed to Huawei and its affiliates[103]. - The ongoing COVID-19 pandemic has posed risks to the progress of 5G infrastructure construction, potentially affecting the company's operational performance[106]. - The company faced risks related to the cyclical nature of capital expenditures in the telecommunications industry, which could impact demand for its products[106]. Corporate Governance and Compliance - The company has ensured compliance with commitments regarding share transfer and management during the lock-up period, with no violations reported[155]. - The company has a long-term commitment to resolve related party transactions and competition issues, ensuring transparency and accountability[154]. - The company has committed to fulfilling the promises disclosed in the IPO prospectus, and if any losses occur due to non-fulfillment, it will bear compensation responsibilities[189]. - The financial accounting data provided by the company is confirmed to be true, accurate, and complete, with no false records or significant omissions[183]. - The company has not disclosed any significant environmental violations or penalties during the reporting period[147]. Product Development and Innovation - New product development includes the launch of a next-generation microwave dielectric ceramic filter, expected to enhance market competitiveness[16]. - The company is focused on developing new formulations and manufacturing techniques to improve the quality and performance of its microwave dielectric ceramic products[39]. - The company has successfully delivered high-performance dielectric waveguide filters to major clients such as Huawei, Datang Mobile, and Ericsson since 2015, establishing itself as one of the earliest mass producers in the industry[62]. - The company’s TEM dielectric filter features low loss, strong out-of-band suppression, and excellent temperature stability, contributing to its competitive edge in the market[65]. - The company has developed a high-performance dielectric resonator with a Q value significantly higher than that of metal resonators, achieving a Q value multiple times greater than that of comparable metal resonators[68].

[Company Overview and Financial Summary](index=1&type=section&id=Company%20Overview%20and%20Financial%20Summary) This section provides an overview of the company's financial performance and key shareholder information [Key Financial Data and Indicators](index=1&type=section&id=Key%20Financial%20Data%20and%20Indicators) The company experienced a significant decline in Q1 2022 performance, with operating revenue down 44.69% and net profit down 50.89%, while operating cash flow turned positive Key Financial Metrics (Q1 2022) | Indicator | Current Period | Year-over-Year Change (%) | | :--- | :--- | :--- | | Operating Revenue | 61,991,234.93 RMB | -44.69% | | Net Profit Attributable to Shareholders of Listed Company | 18,490,605.67 RMB | -50.89% | | Net Profit Attributable to Shareholders of Listed Company After Non-Recurring Items | 3,993,493.13 RMB | -85.59% | | Net Cash Flow from Operating Activities | 30,495,237.99 RMB | Not Applicable | | Basic Earnings Per Share (RMB/share) | 0.05 RMB | -61.54% | | Total R&D Investment | 6,668,698.56 RMB | -15.55% | | R&D Investment as Percentage of Operating Revenue | 10.76% | Increased by 3.71 percentage points | - **Revenue and Net Profit Decline**: Primarily due to reduced sales revenue from the company's major customers in the current period[10](index=10&type=chunk) - **Significant Decline in Non-Recurring Net Profit**: Mainly attributed to a substantial decrease in net profit compared to the prior year, coupled with a significant increase in investment income from trading financial assets[10](index=10&type=chunk) - **Improvement in Operating Cash Flow**: Primarily due to a substantial reduction in taxes and fees paid in the current period[10](index=10&type=chunk) Non-Recurring Gains and Losses Items | Non-Recurring Gains and Losses Item | Current Period Amount (RMB) | | :--- | :--- | | Government Grants Included in Current Profit/Loss | 10,628,439.96 | | Fair Value Changes and Investment Income from Trading Financial Assets/Liabilities | 6,584,762.67 | | Other Non-Operating Income and Expenses | -154,717.29 | | Income Tax Impact | -2,561,372.80 | | **Total** | **14,497,112.54** | [Shareholder Information](index=4&type=section&id=Shareholder%20Information) As of the reporting period end, the company had 11,371 common shareholders, with the top three holding over 64% and key individuals controlling a significant stake - At the end of the reporting period, the company had **11,371** common shareholders[13](index=13&type=chunk) Top Shareholders | Shareholder Name | Number of Shares Held | Shareholding Percentage (%) | | :--- | :--- | :--- | | Zhangjiagang Canqin Enterprise Management Co., Ltd. | 147,423,252 | 36.86 | | Zhangjiagang Jujing Enterprise Management Partnership (Limited Partnership) | 95,326,744 | 23.83 | | Zhangjiagang Huici Enterprise Management Partnership (Limited Partnership) | 14,999,995 | 3.75 | | Harbor Technology Investment Co., Ltd. | 13,750,000 | 3.44 | | Zhu Tianzhong | 11,400,009 | 2.85 | - The company's controlling shareholder is Zhangjiagang Canqin Enterprise Management Co., Ltd., with actual controllers Zhu Tianzhong, Zhu Qi, and Zhu Hui, who collectively control a significant portion of the company through direct and indirect holdings[16](index=16&type=chunk) [Quarterly Financial Statements](index=6&type=section&id=Quarterly%20Financial%20Statements) This section presents the company's consolidated financial statements for the quarter [Consolidated Balance Sheet](index=6&type=section&id=Consolidated%20Balance%20Sheet) As of March 31, 2022, total assets were 2.209 billion RMB, with high liquidity and low liabilities, while shareholder equity increased by 1.06% Consolidated Balance Sheet Summary | Item | March 31, 2022 (RMB) | December 31, 2021 (RMB) | Change (%) | | :--- | :--- | :--- | :--- | | **Total Assets** | **2,208,867,417.68** | **2,201,746,367.89** | **0.32%** | | Cash and Cash Equivalents | 697,154,364.25 | 634,927,452.98 | 9.80% | | Trading Financial Assets | 807,492,056.47 | 845,472,156.95 | -4.49% | | Accounts Receivable | 80,575,410.78 | 101,825,919.51 | -20.87% | | Inventories | 141,423,537.05 | 132,840,082.61 | 6.46% | | **Total Liabilities** | **140,263,469.17** | **154,769,040.56** | **-9.37%** | | Accounts Payable | 76,718,915.76 | 92,324,494.14 | -16.90% | | **Equity Attributable to Shareholders of Listed Company** | **2,068,603,948.51** | **2,046,977,327.33** | **1.06%** | [Consolidated Income Statement](index=8&type=section&id=Consolidated%20Income%20Statement) In Q1 2022, operating revenue declined by 44.69% to 61.99 million RMB, leading to a 50.89% drop in net profit attributable to parent company shareholders Consolidated Income Statement Summary | Item | Q1 2022 (RMB) | Q1 2021 (RMB) | Change (%) | | :--- | :--- | :--- | :--- | | **Total Operating Revenue** | **61,991,234.93** | **112,083,970.78** | **-44.69%** | | Operating Cost | 43,443,846.53 | 61,479,603.93 | -29.34% | | R&D Expenses | 6,668,698.56 | 7,896,422.67 | -15.55% | | Investment Income | 4,631,787.68 | 1,315,657.28 | 252.06% | | Fair Value Change Gains | 2,019,821.96 | 619,728.77 | 225.92% | | **Operating Profit** | **21,750,595.05** | **43,757,714.58** | **-50.29%** | | **Net Profit Attributable to Parent Company Shareholders** | **18,490,605.67** | **37,655,218.80** | **-50.89%** | | **Basic Earnings Per Share (RMB/share)** | **0.05** | **0.13** | **-61.54%** | [Consolidated Cash Flow Statement](index=10&type=section&id=Consolidated%20Cash%20Flow%20Statement) In Q1 2022, net cash flow from operating activities significantly improved to 30.50 million RMB, and investment activities turned positive, increasing cash and cash equivalents to 695 million RMB Consolidated Cash Flow Statement Summary | Item | Q1 2022 (RMB) | Q1 2021 (RMB) | | :--- | :--- | :--- | | **Net Cash Flow from Operating Activities** | **30,495,237.99** | **-6,311,236.79** | | Cash Received from Sales of Goods and Services | 90,151,760.36 | 105,747,253.88 | | Taxes and Fees Paid | 2,988,205.90 | 39,401,645.78 | | **Net Cash Flow from Investing Activities** | **30,976,155.56** | **-53,604,035.90** | | Cash Received from Investment Recovery | 1,035,000,000.00 | 572,046,252.57 | | Cash Paid for Investments | 995,000,077.56 | 602,046,252.57 | | **Net Cash Flow from Financing Activities** | **0.00** | **-220,396.32** | | **Net Increase in Cash and Cash Equivalents** | **61,450,369.03** | **-60,117,207.65** | | **Cash and Cash Equivalents at Period End** | **694,966,474.89** | **264,345,000.44** |

Financial Performance - The company reported a revenue of CNY 333.58 million in 2021, a decrease of 67.99% compared to CNY 1.04 billion in 2020[27]. - Net profit attributable to shareholders was CNY 87.50 million, down 67.15% from CNY 266.33 million in the previous year[27]. - The net profit after deducting non-recurring gains and losses was CNY 32.13 million, a decline of 92.02% compared to CNY 402.62 million in 2020[27]. - The company achieved operating revenue of CNY 333,582,985.63, a decrease of 67.99% compared to the previous year[126]. - The gross profit margin for the main business was 36.65%, down 18.22 percentage points year-on-year[128]. - The sales revenue of the company's main product, the filter, decreased by 70.58% in 2021 compared to 2020[109]. - The company's main business revenue decreased by 68.04% compared to the previous year, with a significant drop in filter products' revenue by 70.58%[137]. - The company faced significant risks due to international trade tensions, with sales to Huawei accounting for 68.50% of total revenue in 2021[123]. Dividend and Profit Distribution - The company plans to distribute a cash dividend of 0.80 RMB per 10 shares, totaling 32 million RMB, which represents 36.57% of the net profit attributable to shareholders for 2021[7]. - The company has not proposed any capital reserve fund transfers to increase share capital or stock dividends for the year[7]. Audit and Governance - The company has received a standard unqualified audit report from its accounting firm, ensuring the accuracy of its financial statements[6]. - The board of directors and supervisory board members have confirmed the authenticity and completeness of the annual report[4]. - The company has a clear commitment to transparency, with all board members present for the meeting to approve the report[6]. - The company does not have any special arrangements for corporate governance that would affect its operations[8]. - The company has established a strong governance framework with a dedicated supervisory board, enhancing accountability and oversight[188]. Research and Development - Research and development expenses accounted for 9.38% of revenue, an increase of 5.36 percentage points from 4.02% in 2020[27]. - The total R&D investment for the current year is ¥31,294,988.53, a decrease of 25.21% compared to the previous year's ¥41,843,325.10[87]. - The company completed 14 major R&D projects during the reporting period, achieving good progress in areas such as AF large dielectric and multiplexer design and development[97]. - The company has developed 73 invention patents and 81 utility model patents, indicating a strong focus on innovation[86]. - The company is focusing on R&D in microwave dielectric ceramic materials and components, with projects aimed at 5G communication and IoT[122]. Market Position and Customer Relationships - The company has established a customer base of hundreds, including major clients such as Huawei, Ericsson, and China Mobile, and has become a core supplier for Huawei since 2019[39]. - Revenue from the top five customers accounted for 87.35% of total revenue, with Huawei alone contributing 68.50%[111]. - The company's sales to its largest customer, Huawei and its controlled entities, accounted for 68.50% of total revenue, exceeding 50%[145]. - The company maintains stable cooperation with major clients such as Huawei and Ericsson, closely aligning with their market demands[106]. Production and Operational Efficiency - The company employs a "make-to-order" production model, ensuring that production is aligned with actual customer orders, which helps maintain quality and efficiency[43]. - The utilization rate of production capacity for microwave dielectric ceramic components was only 9.18% in 2021, primarily due to reduced orders related to 5G base station construction[118]. - The company has a high level of automation in its production processes, which reduces reliance on personnel skills and enhances production efficiency[79]. Risks and Challenges - The company has outlined potential risks in its management discussion and analysis section, advising investors to pay attention[5]. - The company faces risks from potential raw material price fluctuations, particularly for silver paste, PCB boards, and ceramic powders, which could impact production costs and gross margins[113]. - The company faces risks of further performance decline if the domestic 5G base station construction progresses slower than expected or if market competition intensifies[109]. - The ongoing COVID-19 pandemic has negatively impacted the progress of 5G infrastructure construction, potentially affecting the company's performance[124]. Future Outlook and Strategic Goals - The company aims to strengthen its position in the 5G base station filter market, anticipating increased demand in the coming years[171]. - The company is focused on developing miniaturized RF components to meet the demands of low-power and high-reliability applications[174]. - The company has a strategic goal to become a leader in the global electronic ceramics industry, capitalizing on opportunities in 5G communication and IoT[170]. - The company is actively developing new customers and products in the aerospace and national defense sectors, showing positive growth trends[73].