Financial Performance - The company reported a significant increase in revenue for the first half of 2022, with total revenue reaching 1.2 billion RMB, representing a 15% year-over-year growth[7]. - The net profit for the first half of 2022 was 150 million RMB, which is a 10% increase compared to the same period last year[7]. - The company's operating revenue for the reporting period was ¥30,242,102,319.11, representing a 15.66% increase compared to the previous year[12]. - The net profit attributable to shareholders was ¥1,636,110,429.11, showing a decrease of 44.06% year-on-year[12]. - The net profit after deducting non-recurring gains and losses was ¥1,595,824,621.39, which is a 32.79% increase compared to the previous year[12]. - The company achieved a revenue of RMB 30.242 billion and a net profit attributable to shareholders of RMB 1.636 billion for the reporting period[52]. - The total comprehensive income for the first half of 2022 was ¥1.64 billion, down from ¥3.21 billion in the same period last year[181]. - The total operating revenue for the first half of 2022 reached ¥30.24 billion, a 15.9% increase from ¥26.15 billion in the same period of 2021[180]. Market Expansion and Strategy - The company has outlined its future outlook, projecting a revenue growth of 20% for the full year 2022, driven by new product launches and market expansion strategies[7]. - The company is planning to expand its market presence in Southeast Asia, targeting a 15% market share in the region within the next two years[7]. - A strategic acquisition of a local competitor is in progress, which is anticipated to enhance production capacity by 30%[7]. - The company aims to establish a diversified industrial chain with a core platform and multiple new energy and material sectors, enhancing its competitive edge[28]. - The company is expanding its market presence, with domestic sales primarily focused on the local market and exports to over 30 countries, including South Korea and Turkey[48]. Research and Development - The company has committed to investing 100 million RMB in research and development for innovative technologies over the next year[7]. - Research and development investment rose by 45.52% to ¥981,603,944.53, driven by an increase in R&D projects and personnel[74]. - The company has established a national-level advanced functional fiber innovation center, enhancing its capabilities in developing differentiated functional fibers[32]. - The company is investing in new projects, including biodegradable materials and chemical new materials, with significant production capacity planned for various products[31]. Environmental and Safety Initiatives - The company is actively building an ESG management system focused on green and safe development, exploring high-quality development paths through energy conservation and carbon reduction[63]. - The company has established a comprehensive safety production information management platform called "Hongyun," which integrates major hazard monitoring and safety risk zoning systems[62]. - The company has implemented a waste gas treatment facility that meets stringent emission standards for particulate matter and sulfur dioxide[115]. - The company has achieved a CO2 reduction of approximately 2 million tons per year through the innovative use of heat pump systems in the refining ethylene unit[123]. - The company has established a complete closed-loop recycling system in the Lianyungang Shenghong Petrochemical Industrial Park, focusing on energy, material, and waste recycling[123]. Financial Position and Investments - Total assets at the end of the reporting period were ¥151,336,304,170.37, an increase of 14.65% from the end of the previous year[12]. - The net assets attributable to shareholders were ¥32,124,845,240.09, reflecting a 16.33% increase compared to the previous year[12]. - The total liabilities of the company were ¥119,000,000,000, reflecting a significant increase from the previous year[176]. - The company's cash interest coverage ratio was 3.2395, showing a decrease of 2.77% compared to the previous year[173]. - The company reported a net cash outflow from investment activities of ¥16.83 billion, slightly improved from a net outflow of ¥17.91 billion in the same period last year[186]. Shareholder and Corporate Governance - The company plans not to distribute cash dividends or issue bonus shares for the half-year period[109]. - The second employee stock ownership plan was approved on April 28, 2022, and is currently in the stock purchase phase[111]. - The company has a total of 112,209 shareholders, with a significant concentration among the top shareholders[153]. - The company is under the control of a single actual controller, indicating a unified decision-making structure among major shareholders[155]. - The company has experienced changes in its board and supervisory personnel, with several resignations and appointments in early 2022[109]. Risks and Challenges - The management has identified potential risks, including market volatility and supply chain disruptions, and has developed countermeasures to mitigate these risks[2]. - The company faces risks from macroeconomic fluctuations, which could affect its operating performance[103]. - The company is subject to industry policy risks, particularly regarding safety, environmental protection, and energy conservation regulations[104]. - Currency exchange rate fluctuations pose a risk to the company's operations, affecting foreign currency transactions and procurement activities[105]. - The company is exposed to risks related to environmental pollution and safety due to the nature of its operations, which involve hazardous materials[107].

Important Notice [Important Notice](index=2&type=section&id=第一节%20重要提示) The company's board, supervisory board, and key financial officers guarantee the report's truthfulness, accuracy, and completeness - The company's board of directors, supervisory board, and all directors, supervisors, and senior management guarantee the **truthfulness, accuracy, and completeness** of the quarterly report, with no false records, misleading statements, or major omissions[2](index=2&type=chunk) - Company head Miao Hangen, head of accounting work Qiu Hairong, and head of accounting department Hu Guiyang declare that they guarantee the **truthfulness, accuracy, and completeness** of the financial statements in the quarterly report[2](index=2&type=chunk) Company Overview [Key Accounting Data and Financial Indicators](index=3&type=section&id=一、主要会计数据和财务指标) The company achieved strong Q1 2021 performance with **52.77%** revenue growth, **205.29%** net profit increase, and **26.52%** total asset growth Key Accounting Data and Financial Indicators | Indicator | Current Period | Prior Year Period | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Operating Revenue (CNY) | 6,464,986,395.63 | 4,231,724,571.57 | 52.77% | | Net Profit Attributable to Shareholders (CNY) | 601,449,137.38 | 197,012,200.61 | 205.29% | | Net Profit Attributable to Shareholders (Excluding Non-recurring Items) (CNY) | 629,106,566.76 | 85,080,903.95 | 639.42% | | Net Cash Flow from Operating Activities (CNY) | 486,652,870.21 | -767,573,864.33 | 163.40% | | Basic Earnings Per Share (CNY/share) | 0.12 | 0.05 | 140.00% | | Weighted Average Return on Net Assets | 3.37% | 1.40% | Increased by 1.97 percentage points | | **Indicator** | **Period-End** | **Prior Year-End** | **Year-on-Year Change** | | Total Assets (CNY) | 79,621,107,072.63 | 62,933,612,564.34 | 26.52% | | Net Assets Attributable to Shareholders (CNY) | 19,359,631,780.99 | 17,545,469,389.50 | 10.34% | - During the reporting period, non-recurring gains and losses totaled **-27.66 million Yuan**, primarily due to changes in fair value of derivative financial instruments[4](index=4&type=chunk) [Shareholder Information](index=4&type=section&id=二、报告期末股东总数及前十名股东持股情况表) As of the reporting period end, the company had **53,457** common shareholders, with Jiangsu Shenghong Technology Co., Ltd. as the largest at **57.26%** - As of the end of the reporting period, the company had a total of **53,457** common shareholders[6](index=6&type=chunk) Shareholder Information | Shareholder Name | Shareholder Nature | Shareholding Percentage | Number of Shares Held | | :--- | :--- | :--- | :--- | | Jiangsu Shenghong Technology Co., Ltd. | Domestic Non-State-Owned Legal Entity | 57.26% | 2,768,225,540 | | Shenghong (Suzhou) Group Co., Ltd. | Domestic Non-State-Owned Legal Entity | 6.93% | 334,821,428 | | Jiangsu Wujiang Silk Group Co., Ltd. | State-Owned Legal Entity | 6.68% | 322,972,453 | | Suzhou Wujiang Oriental State-Owned Capital Investment and Operation Co., Ltd. | State-Owned Legal Entity | 2.77% | 134,104,200 | | Hong Kong Securities Clearing Company Limited | Foreign Legal Entity | 2.41% | 116,575,852 | - Shenghong (Suzhou) Group Co., Ltd. indirectly controls Jiangsu Shenghong Technology Co., Ltd., forming a concerted party[8](index=8&type=chunk) Significant Events [Analysis of Significant Changes in Financial Data](index=6&type=section&id=一、报告期主要财务数据、财务指标发生变动的情况及原因) Assets and liabilities increased due to project investments and financing, while revenue grew **52.77%** and investment income declined **324.92%** Financial Data Changes (Assets & Liabilities) | Statement Item | Change (%) | Reason for Change | | :--- | :--- | :--- | | Cash and Cash Equivalents | 49.65% | Primarily due to increased bank deposits in the current period | | Construction in Progress | 36.47% | Primarily due to increased project investments in the current period | | Long-term Borrowings | 60.65% | Primarily due to increased special borrowings in the current period | | Bonds Payable | 377.28% | Primarily due to the issuance of convertible corporate bonds in the current period | Financial Data Changes (Income & Cash Flow) | Statement Item | Change (%) | Reason for Change | | :--- | :--- | :--- | | Operating Revenue | 52.77% | Primarily due to increased sales revenue in the current period | | Research and Development Expenses | 100.49% | Primarily due to increased R&D projects in the current period | | Investment Income | -324.92% | Primarily due to changes in derivative investment gains and losses | | Net Cash Flow from Operating Activities | 163.40% | Primarily due to increased operating gross profit in the current period | [Progress of Significant Events](index=7&type=section&id=二、重要事项进展情况及其影响和解决方案的分析说明) The company successfully issued A-share convertible bonds with funds fully raised and adopted new lease accounting standards from January 1, 2021 - The company's public issuance of A-share convertible corporate bonds has been approved by the CSRC, and all raised funds have been received[12](index=12&type=chunk) - The company adopted the Ministry of Finance's newly revised 'Accounting Standard for Business Enterprises No. 21 – Leases' starting from January 1, 2021[13](index=13&type=chunk) [Financial Asset Investments](index=8&type=section&id=四、金融资产投资) The company holds **84.21 million Yuan** in 'Sunong Bank' shares and incurred a **44.81 million Yuan** loss from derivative investments for hedging and risk avoidance - The company holds domestic stock 'Sunong Bank' with a period-end book value of **84.21 million Yuan**, incurring a fair value change loss of **3.72 million Yuan** during the reporting period[16](index=16&type=chunk) Derivative Investment Performance | Derivative Investment Type | Period-End Investment Amount (CNY in millions) | Actual Gain/Loss in Current Period (CNY in millions) | | :--- | :--- | :--- | | Commodity Derivatives | 128.53 | -42.09 | | Foreign Exchange Derivatives | 15.13 | -2.75 | | Interest Rate Swaps | 0.28 | 0.03 | | **Total** | **143.94** | **-44.81** | - Independent directors believe the company's derivative investments are for cost locking and hedging exchange rate and interest rate risks, aligning with risk management principles, with sound internal controls, and no harm to shareholder interests[20](index=20&type=chunk) [Progress of Raised Funds Investment Projects](index=9&type=section&id=五、募集资金投资项目进展情况) The company raised approximately **9.55 billion Yuan** for the 'Shenghong Refining and Chemical 16 Million Tons Integrated Project,' which is progressing as planned - The company raised funds through three financing rounds (2019 green corporate bonds, 2020 non-public stock offering, 2021 convertible bonds), primarily for the construction of the 'Shenghong Refining and Chemical **16 Million Tons** Integrated Project'[21](index=21&type=chunk)[23](index=23&type=chunk)[24](index=24&type=chunk) - As of the end of the reporting period, the Shenghong Refining and Chemical **16 Million Tons** Integrated Project is under construction as per schedule[25](index=25&type=chunk) [Other Significant Matters](index=10&type=section&id=六、其他重要事项) The company did not forecast H1 2021 performance, held **632.63 million Yuan** in bank wealth management products, and reported no major contracts or irregular guarantees - The company did not provide an operating performance forecast for January-June 2021[26](index=26&type=chunk) - The company used its own funds for entrusted wealth management, with an outstanding balance of **632.63 million Yuan**, all in bank wealth management products[27](index=27&type=chunk) - During the reporting period, the company had no significant daily operating contracts, irregular external guarantees, non-operating fund occupation by controlling shareholders, or investor relations activities[26](index=26&type=chunk)[29](index=29&type=chunk) Financial Statements [Financial Statements](index=12&type=section&id=一、财务报表) This section provides the company's core Q1 2021 financial statements, including consolidated and parent company balance sheets, income statements, and cash flow statements [Consolidated Balance Sheet](index=12&type=section&id=1、合并资产负债表) As of March 31, 2021, total assets reached **79.62 billion Yuan** (**+26.52%**), liabilities **55.25 billion Yuan** (**+36.82%**), and parent equity **19.36 billion Yuan** Consolidated Balance Sheet | Item | March 31, 2021 (CNY) | December 31, 2020 (CNY) | | :--- | :--- | :--- | | Total Assets | 79,621,107,072.63 | 62,933,612,564.34 | | Total Liabilities | 55,253,894,558.17 | 40,385,753,069.62 | | Total Equity Attributable to Parent Company Owners | 19,359,631,780.99 | 17,545,469,389.50 | | Total Liabilities and Equity | 79,621,107,072.63 | 62,933,612,564.34 | [Consolidated Income Statement](index=17&type=section&id=3、合并利润表) Q1 2021 total operating revenue reached **6.46 billion Yuan** (**+52.77%**), with net profit attributable to parent shareholders **601.45 million Yuan** (**+205.29%**) Consolidated Income Statement | Item | Current Period (CNY) | Prior Period (CNY) | | :--- | :--- | :--- | | I. Total Operating Revenue | 6,464,986,395.63 | 4,231,724,571.57 | | II. Total Operating Costs | 5,764,337,391.94 | 4,148,857,837.86 | | III. Operating Profit | 701,521,227.34 | 159,862,528.07 | | Net Profit Attributable to Parent Company Shareholders | 601,449,137.38 | 197,012,200.61 | | Basic Earnings Per Share | 0.12 | 0.05 | [Consolidated Cash Flow Statement](index=21&type=section&id=5、合并现金流量表) Q1 2021 operating cash flow improved to **486.65 million Yuan**, with **7.18 billion Yuan** net outflow from investing and **13.57 billion Yuan** net inflow from financing Consolidated Cash Flow Statement | Item | Current Period (CNY) | Prior Period (CNY) | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 486,652,870.21 | -767,573,864.33 | | Net Cash Flow from Investing Activities | -7,177,224,223.34 | -2,254,068,258.07 | | Net Cash Flow from Financing Activities | 13,573,239,386.78 | 3,783,760,123.10 | | Period-End Cash and Cash Equivalents Balance | 19,711,265,697.90 | 5,214,382,313.89 | [Explanation of Financial Statement Adjustments](index=24&type=section&id=二、财务报表调整情况说明) The company adopted new lease accounting standards from January 1, 2021, adjusting opening financial statements by recognizing **1.93 billion Yuan** in 'right-of-use assets' and reducing 'fixed assets' by **1.27 billion Yuan** - The company first adopted new lease accounting standards from 2021, adjusting relevant accounts in the financial statements as of January 1, 2021[49](index=49&type=chunk)[51](index=51&type=chunk) Financial Statement Adjustments | Adjustment Item | Adjustment Amount (CNY) | | :--- | :--- | | **Assets** | | | Fixed Assets | -1,267,260,867.20 | | Right-of-Use Assets | +1,929,540,866.76 | | **Liabilities** | | | Non-current Liabilities Due Within One Year | +34,229,802.26 | | Lease Liabilities | +913,399,142.39 | | Long-term Payables | -285,348,945.09 | [Audit Report](index=28&type=section&id=三、审计报告) The company's Q1 2021 report is unaudited - The company's first quarter report is unaudited[54](index=54&type=chunk)