Financial Performance - The company's operating revenue for the first half of 2020 was ¥889,161,291.39, representing a 10.22% increase compared to ¥806,725,956.37 in the same period last year[9]. - The net profit attributable to shareholders of the listed company was -¥141,863,736.95, a decrease of 159.85% from ¥237,033,237.67 in the previous year[9]. - The net cash flow from operating activities was -¥45,001,756.73, down 127.51% from ¥163,587,326.07 in the same period last year[9]. - The basic earnings per share were -¥0.0712, a decline of 159.88% compared to ¥0.1189 in the previous year[9]. - Total assets at the end of the reporting period were ¥8,851,684,993.64, down 8.21% from ¥9,643,558,999.41 at the end of the previous year[9]. - The net assets attributable to shareholders of the listed company were ¥7,769,096,472.34, a decrease of 1.74% from ¥7,906,626,635.56 at the end of the previous year[9]. - The company reported a significant decrease in the weighted average return on net assets to 2.27%, down from 3.14% in the previous year[9]. - The company reported a significant increase in cash and cash equivalents, amounting to ¥970,306,933.95, representing 10.96% of total assets[28]. - The company reported a net profit of 27.16 million CNY for 2020, with a projected net profit of 956.37 million CNY for 2021 and 2.21 billion CNY for 2022[44]. Production and Sales - The production of potassium chloride reached 503,500 tons, an increase of 29.45% year-on-year, while sales volume increased by 37.66% to 530,400 tons[21]. - The company's potassium chloride production capacity is now 2 million tons per year, making it the second-largest potassium chloride producer in China[21]. - The company has a lithium carbonate project with an annual production capacity of 20,000 tons, with the first phase (10,000 tons) already in production[21]. - The company holds a mining license for 724.3493 square kilometers in the Chaharhan Salt Lake area, focusing on potassium chloride production as its core business[15]. - Approximately 80% of China's potassium chloride consumption is used for fertilizer production, with potassium chloride accounting for about 90% of potassium fertilizer application[15]. Market Outlook - The demand for potassium fertilizer is expected to grow due to rigid grain demand and the increasing planting area of economic crops[16]. - The company anticipates a stabilization and potential increase in potassium fertilizer prices after years of low pricing, influenced by the restructuring of the international potassium fertilizer market[16]. - The company faces challenges due to the high dependence on international potassium salt resources and transportation bottlenecks affecting sales[16]. Research and Development - Research and development expenses increased by 138.58% to CNY 579,334.55, driven by optimization projects in potassium production technology[22]. - The company plans to develop new products such as industrial potassium chloride and lithium series products, leveraging its resource conditions and market needs[37]. - The company aims to optimize its industrial structure by focusing on new energy materials, particularly lithium, utilizing waste brine from potash production[37]. Shareholder and Equity Information - The company plans not to distribute cash dividends or issue bonus shares for the reporting period[2]. - The company's major shareholders have fully pledged their shares, with the first three shareholders pledging 100% of their holdings, which poses significant risks[36]. - The company has a commitment to compensate shareholders for unmet performance targets from 2017 and 2018, totaling 413,344,449 shares, which remains a risk until share pledges are lifted[36]. - The total number of shares before the change was 1,993,779,522, with 76.25% being restricted shares and 23.75% being unrestricted shares[79]. Legal and Compliance Issues - The company is currently involved in multiple lawsuits, with a total amount involved in disputes reaching CNY 17,967,000[50]. - The company received a total claim amount of CNY 6,655,398.85 from 41 shareholders in a securities false statement liability dispute as of June 30, 2020[51]. - The company has identified non-operating fund occupation by the controlling shareholder and its affiliates amounting to 972.45 million CNY, which has been fully repaid[46]. Environmental and Social Responsibility - The company has implemented a new pollution permit management system, successfully renewing its pollution discharge permit in compliance with national requirements[76]. - The company actively participates in environmental monitoring, with quarterly supervision of air pollutants ensuring compliance with nitrogen oxides emission standards[76]. - The company has provided financial support of CNY 50,000 annually to each of the six administrative villages under the "1+1 Action Plan" for poverty alleviation, continuing this support for three consecutive years[70]. Financial Management and Strategy - The company has not reported any significant asset or equity disposals during the reporting period[31]. - The company is actively working with financial institutions to resolve the pledge issue and is taking measures to raise funds[43]. - The company has not conducted an audit for its semi-annual financial report[45]. - The company has not implemented any stock incentive plans or employee stock ownership plans during the reporting period[54]. Accounting and Financial Reporting - The company follows the accounting standards issued by the Ministry of Finance, ensuring that the financial reports are true and complete[126]. - The company has implemented a capital increase through the issuance of shares, with a total of 13,333.33 million shares issued at a price of RMB 15.00 per share[123]. - The company recognizes impairment losses for financial assets measured at amortized cost and debt instruments measured at fair value through other comprehensive income, including receivables and debt investments[137].

Financial Performance - The company's operating revenue for 2020 was approximately ¥1.90 billion, a decrease of 5.70% compared to ¥2.02 billion in 2019[11]. - The net profit attributable to shareholders for 2020 was approximately ¥228.89 million, down 25.75% from ¥308.26 million in 2019[11]. - The net profit after deducting non-recurring gains and losses was approximately ¥194.26 million, a decline of 47.41% from ¥369.40 million in 2019[11]. - The net cash flow from operating activities was negative at approximately -¥174.47 million, a significant decrease of 162.99% compared to ¥276.99 million in 2019[11]. - The total assets at the end of 2020 were approximately ¥8.68 billion, a decrease of 10.02% from ¥9.64 billion at the end of 2019[12]. - The net assets attributable to shareholders at the end of 2020 were approximately ¥7.92 billion, a slight increase of 0.13% from ¥7.91 billion at the end of 2019[12]. - The basic earnings per share for 2020 were ¥0.11, down 26.67% from ¥0.15 in 2019[12]. - The diluted earnings per share for 2020 were also ¥0.11, reflecting the same percentage decrease as basic earnings[12]. - The weighted average return on equity for 2020 was 2.93%, down from 4.05% in 2019[12]. - The company reported total revenue of CNY 1,903,487,125.77 for the year, with a significant increase in sales in the fourth quarter reaching CNY 716,737,098.51[14]. - The net profit attributable to shareholders for the fourth quarter was CNY 183,790,057.37, showing a recovery from a net loss of CNY 269,286,986.55 in the first quarter[14]. - The net cash flow from operating activities in the fourth quarter was CNY 56,679,011.28, indicating a positive cash flow after negative cash flows in the first three quarters[14]. - The revenue from potassium chloride was 1.826 billion yuan, accounting for 95.94% of total revenue, which represents a 7.68% decrease from the previous year[25][26]. - The company achieved a gross margin of 32.49% in the manufacturing sector, with a notable decrease of 25.95% compared to the previous year[26]. - The company reported a total of 221,221.35 thousand yuan in revenue for the year 2020[87]. - The total operating revenue for 2020 was 1,529,207,777.28 CNY, compared to 1,288,437,603.84 CNY in 2019, representing an increase of approximately 18.7%[197]. - The net profit for 2020 was 228,887,517.00 CNY, down from 308,259,358.85 CNY in 2019, indicating a decrease of about 25.8%[198]. - The total profit for 2020 was 307,438,778.23 CNY, compared to 407,373,840.90 CNY in 2019, reflecting a decline of approximately 24.5%[198]. Investments and Projects - The company has established a lithium carbonate project with an annual production capacity of 20,000 tons, which has begun contributing to sales and profitability in 2020[18]. - The company has successfully launched the first phase of its lithium carbonate project, with an annual production capacity of 10,000 tons, contributing to improved profitability in 2020[22]. - The company is focusing on resource utilization and has plans to develop magnesium and sodium resources in the future[22]. - The company has committed to developing industrial potassium chloride, food-grade potassium chloride, potassium sulfate, and sodium sulfate to enhance product value[52]. - The company aims to utilize waste brine from potassium fertilizer production to develop lithium carbonate as part of its resource integration strategy[52]. - New energy storage materials will be a key focus for the company, leveraging resources from the Chaka Salt Lake and Dalangtan Salt Lake for lithium product development[52]. - The company has completed the acceptance of the "Hot Melt Potassium Optimization Project" and successfully conducted experiments for the "Magnesium-based Functional Materials Project" in 2020[23]. - The company has a total of ¥295,788,715.12 in restricted assets, including cash and fixed assets[44]. Production and Capacity - The company has become the second-largest producer of potassium chloride in China, with an annual production capacity of 2 million tons[22]. - The company reported a 12% year-on-year increase in global lithium salt production, reaching approximately 413,600 tons (LCE equivalent) in 2020[21]. - In 2020, the company produced 111.51 million tons of potassium fertilizer, a 2.97% increase year-on-year, and 4,429.83 tons of lithium carbonate, marking a significant production increase of 142.38%[23][27]. - The sales volume of potassium fertilizer reached 2,013.35 tons, with a production volume of 111.51 million tons, indicating a stable operational performance despite market challenges[27]. - The company has a stable potassium fertilizer production capacity and plans its production based on sales conditions and future price trends[18]. Financial Management and Governance - The company has no discrepancies between financial reports prepared under international and Chinese accounting standards for the reporting period[13]. - The company has committed to maintaining an independent governance structure and effective internal control systems post-major asset transaction completion[38]. - The company ensures financial independence by establishing a separate financial department and independent accounting systems, with no shared bank accounts with controlling entities[39]. - The company has undertaken to bear any social insurance and housing fund obligations for its subsidiary, ensuring no financial loss to the listed company[40]. - The company has established a commitment to fair pricing and market principles in any necessary related party transactions[39]. - The company has committed to timely disclosure of any significant legal or financial issues that may arise prior to the completion of the asset transfer[41]. - The company has implemented a new revenue recognition policy effective January 1, 2020, in accordance with the revised accounting standards[91]. - The company has appointed Tianheng Accounting Firm as its auditor for the 2020 financial year, with an audit fee of 2,300 thousand yuan[93]. - The company has established a comprehensive environmental emergency mechanism to ensure the effectiveness of its response plans[125]. - The company has implemented effective environmental measures, achieving a normal operation rate of over 95% for pollution control facilities[121]. - The company has adhered to the "three simultaneous" management system for environmental facilities in new, modified, or expanded construction projects[121]. Shareholder and Market Activities - The company plans to complete the "Thermal Potassium Production Process Optimization Project" by December 2021, with 50% of the research work already completed[35]. - The company has extended the deadline for resolving guarantees related to its associate company, Jilong Copper Industry, until June 30, 2021[51]. - The company is actively monitoring and urging major shareholders to resolve their pledged share issues to fulfill performance compensation commitments[51]. - The company has received commitments from Lu Yuan Century to assume all liabilities related to the asset sale, ensuring no additional debts will be incurred during the restructuring process[80]. - The company has committed to distributing at least 30% of the average distributable profit over any three consecutive years in cash dividends[82]. - The company has not distributed any cash dividends in 2020, 2019, and 2018, with cash dividends amounting to 0.00, representing 0.00% of the net profit attributable to ordinary shareholders for those years[68][69][71]. - The company has not engaged in any significant asset or equity sales during the reporting period[48]. - The company has not disclosed any significant undisclosed information during the earnings call, indicating transparency in communication[67]. Legal and Regulatory Issues - The company has been publicly reprimanded for issues including false records in periodic reports and failure to disclose the 2019 annual performance forecast[99]. - The company has faced legal challenges regarding the payment of 2,381 million yuan related to a share transfer agreement, with ongoing execution disputes[97]. - The company has been under investigation for suspected violations of information disclosure regulations, but has not faced administrative penalties as of the latest report[100]. - The company is actively managing its legal and regulatory risks to mitigate potential impacts on its operations and financial health[99]. - The company has faced public criticism and penalties from regulatory authorities due to the aforementioned issues[101]. Employee and Training Initiatives - The total number of employees in the company is 1,603, with 1,195 in production, 227 in technical roles, and 5 in sales[157]. - The company has implemented a performance-based salary system for middle management and a piece-rate wage system for production staff[159]. - The company conducted five large-scale training sessions for middle and senior management, focusing on compliance, corporate governance, and industry outlook, effectively improving internal control and operational standards[160]. - The company organized training for production management personnel at the salt lake production base to enhance management skills and ensure production targets are met[161]. - The company provided specialized training for technical staff on potassium fertilizer production processes, improving theoretical knowledge and production skills[161]. Environmental and Social Responsibility - The company provided 300,000 RMB in funding to support the development of collective economies in six administrative villages as part of its poverty alleviation efforts in 2020[124]. - A total of 30,000 RMB was invested in six poverty alleviation projects, contributing to the overall poverty alleviation strategy[124]. - The company plans to continue its poverty alleviation initiatives by leveraging collective economic organizations and providing stable employment opportunities for impoverished populations[125]. - The company has committed to ongoing environmental monitoring and timely reporting of pollution data to relevant authorities[125].

Financial Performance - Operating revenue for the period was ¥297,588,735.07, reflecting a decline of 15.83% year-on-year[3] - Net profit attributable to shareholders was ¥186,750,504.44, an increase of 62.26% compared to the same period last year[3] - Basic earnings per share were ¥0.0937, up 62.39% year-on-year, while diluted earnings per share were the same[3] - The weighted average return on equity was 2.35%, an increase of 55.42% compared to the previous year[3] - The company reported a net profit of CNY 4,228,974,810.29, an increase from CNY 4,183,877,350.67, showing a growth of about 1.08%[25] - The company reported a net profit for the third quarter of ¥186,750,504.44, up 62.2% from ¥115,093,881.53 in the previous year[31] - The total comprehensive income for the quarter was ¥186,750,504.44, compared to ¥115,093,881.53 in the same period last year, marking a growth of 62.2%[32] - The net profit for the quarter was CNY 45,097,459.62, a decrease of approximately 87% compared to CNY 352,127,119.20 in the previous year[38] - The company’s total profit for the quarter was CNY 87,053,662.91, down from CNY 419,798,311.36 in the same period last year, reflecting a decline of approximately 79.3%[37] Assets and Liabilities - Total assets at the end of the reporting period amounted to ¥8,840,542,248.55, a decrease of 8.33% compared to the end of the previous year[3] - Current assets totaled CNY 2,408,370,820.13, down from CNY 2,702,119,122.48, indicating a decrease of about 10.87%[22] - Long-term equity investments were reported at CNY 2,149,252,769.76, a decrease from CNY 2,421,799,564.95, representing a decline of approximately 11.25%[23] - Total liabilities decreased to CNY 883,126,405.85 from CNY 1,736,932,363.85, reflecting a significant reduction of approximately 49.1%[24] - Total liabilities increased to ¥946,322,027.01 from ¥625,021,810.84, reflecting a growth of 51.5% year-over-year[28] - Total equity decreased to ¥13,980,906,348.87 from ¥14,173,495,441.44, a decline of 1.4% compared to the previous year[28] Cash Flow - Net cash flow from operating activities was -¥186,145,406.88, a significant decrease of 1,489.58% compared to the previous year[3] - Cash and cash equivalents increased by 854.74% to ¥783,839,328.21 due to funds received from the controlling shareholder[10] - Operating cash flow net amount increased by 408.82% to ¥900,516,760.82 driven by increased sales collections[10] - The total cash inflow from operating activities was 2,178,301,018.83 yuan, compared to 1,057,720,353.62 yuan in the previous period, indicating a 105.5% increase[43] - The net cash flow from operating activities was 900,516,760.82 yuan, up from 176,983,113.03 yuan in the previous period[44] - The company reported cash inflow from investment activities of 492,210,000.00 yuan, compared to 20,281,740.20 yuan in the previous period[45] Shareholder Information - The total number of ordinary shareholders at the end of the reporting period was 18,312[6] - The largest shareholder, Tibet Cangge Venture Investment Group Co., Ltd., held 43.08% of the shares, totaling 858,892,678 shares[6] Government and Non-Operating Activities - The company received government subsidies amounting to ¥4,598,934.92 during the reporting period[4] - Non-operating income and expenses totaled -¥132,973,714.82, indicating significant losses from non-recurring items[4] - The company has not engaged in any securities or derivative investments during the reporting period[14] - The company has confirmed no non-operating fund occupation by controlling shareholders during the reporting period[14] Operational Developments - The company is focusing on the development of lithium carbonate projects and has not provided written materials regarding its progress[15] - There are ongoing discussions about the major shareholder's stock repurchase and cancellation progress, but no written materials have been provided[16] - The company is planning to sell 5.88% of its stake in Jilong Copper Industry, with no written materials available on the progress[17] - The company is addressing the removal of "non-standard" opinions and has not provided written updates on this matter[18] - The company is assessing the impact of the regulatory investigation on the major shareholder and actual controller on its operations[20] Research and Development - Research and development expenses were ¥573,645.38, an increase from ¥412,388.05 year-over-year[30] - Research and development expenses for the quarter were CNY 1,152,979.93, compared to CNY 655,212.19 in the same period last year, reflecting an increase of approximately 75.8%[37] Regulatory and Compliance - The company has implemented new revenue and leasing standards starting from 2020, which required adjustments to the financial statements[49] - The company has not undergone an audit for the Q3 report, which may affect investor confidence[57]

Financial Performance - The company's operating revenue for 2019 was CNY 2,018,557,840, representing a decrease of 24.70% compared to the previous year[21]. - The net profit attributable to shareholders for 2019 was CNY 308,259,358, a decline of 63.74% year-on-year[22]. - The net cash flow from operating activities was CNY 276,995,557, down 68.81% from the previous year[22]. - The basic earnings per share for 2019 was CNY 0.15, a decrease of 65.12% compared to the previous year[22]. - Total assets at the end of 2019 were CNY 9,643,558,990, an increase of 8.29% from the end of 2018[22]. - The gross profit margin for potassium chloride was 57.73%, reflecting a decrease of 10.78% compared to the previous year[49]. - The company reported a significant decrease in net profit from non-recurring items, totaling CNY -61,140,287.42 for 2019[28]. - The weighted average return on equity for 2019 was 4.72%, down from 18.12% in 2018[22]. - The total revenue for 2019 was 2,063,000,000.00 CNY, a decrease of 28.89% compared to 2018[60]. Investment and Assets - The book value of long-term equity investment in Tibet Julong Copper Industry Co., Ltd. was RMB 2,556.7642 million, accounting for 26.74% of total assets and 32.64% of net assets[6]. - The company has a potassium salt mining right covering 724.3493 square kilometers in the Chaka Salt Lake area, focusing on potassium chloride production and sales[31]. - The company holds mining rights over 724.3493 square kilometers in the Qarhan Salt Lake, which is one of the largest soluble potassium magnesium salt deposits in China[39]. - The company has established a complete potassium fertilizer production system, with production capacity continuously increasing over nearly a decade[32]. - The company has seen a 19.63% increase in fixed assets compared to the beginning of the year, mainly due to the completion of the first phase of a 20,000 tons/year lithium carbonate project[38]. - The company acquired a 37% stake in Tibet Julong Copper Industry Co., Ltd. for CNY 2,590,000,000, resulting in an investment loss of CNY 168,200,435.05[71]. Corporate Governance and Compliance - The company has not complied with relevant systems regarding the prevention of fund occupation by controlling shareholders and related parties, indicating significant internal control deficiencies[7]. - The company’s effective internal control has been compromised, which affects the reliability of financial reporting and related information[7]. - The company has acknowledged the need for better management of its financial practices to enhance transparency and accountability[131]. - The company is actively working to improve its governance and compliance practices to prevent future regulatory issues[131]. - The company has committed to strengthening corporate governance and internal control systems to ensure sustainable growth[86]. - The company has pledged to minimize related party transactions and ensure fair pricing in unavoidable transactions[100]. Risks and Challenges - Tibet Julong Copper Industry has overdue liabilities of RMB 3 billion and has not recognized overdue credit losses, raising significant doubts about its ability to continue as a going concern[7]. - The company is facing transportation bottlenecks due to the distance between production areas in Qinghai and Xinjiang and consumption areas in East and Central China[36]. - The company is facing risks from potential declines in potassium fertilizer prices due to market concentration[81]. - The company is assessing the impact of declining lithium prices on its operations, which is a critical factor for future profitability[90]. - The company has reported that there are significant receivables from related parties, including 159.57 million CNY from Yantai Huahai International Trade Co., Ltd.[110]. Research and Development - Research and development expenses increased significantly by 1,463.47% to 1,676,915.91 CNY, representing 0.08% of total revenue[59]. - The company plans to invest 100 million CNY in R&D for new technologies in the next fiscal year[199]. - The number of R&D personnel increased by 154.55% to 28, reflecting a strategic focus on innovation[59]. Social Responsibility and Environmental Impact - The company provided financial support of 300,000 CNY to six impoverished villages, contributing 50,000 CNY annually to each village as part of the "1+1" initiative[153]. - The company has committed to ongoing support for poverty alleviation projects, focusing on projects that are urgent and easily measurable for effectiveness[158]. - The company is not classified as a key pollutant discharge unit by the environmental protection department[159]. - In 2019, the company achieved a normal operation rate of over 95% for its pollution control facilities[159]. - The company has implemented a comprehensive pollution discharge permit management system and has renewed its discharge permits[160]. Shareholder and Equity Information - The company has established a lock-up period of 36 months for shares acquired through the asset purchase, with an automatic extension if stock prices fall below the issuance price[102]. - The total number of shares remains at 1,993,779,522[168]. - Major shareholders include Tibet Cangge Chuangye Investment Group Co., Ltd. with 43.08% and Sichuan Yonghong Industrial Co., Ltd. with 19.42%[172]. - The company reported a total of 27,761 common shareholders at the end of the reporting period[172]. - The company has not implemented any share buyback or reduction during the reporting period[169]. Legal and Regulatory Issues - The company is involved in a lawsuit with a claimed amount of 236 million RMB, which is currently under appeal[124]. - The company has been warned and fined by the China Securities Regulatory Commission for various compliance issues[128]. - The company is under investigation by the China Securities Regulatory Commission for failing to disclose information in a timely manner, which may lead to further penalties[131]. - The company has faced significant administrative penalties from regulatory authorities, including warnings and fines, due to non-compliance with disclosure obligations[129].

[Cover and Important Notice](index=1&type=section&id=Cover%20and%20Important%20Notice) [Important Notice](index=2&type=section&id=Section%201%20Important%20Notice) The Board, Supervisory Board, and senior management guarantee the report's truthfulness and completeness, with financial statements confirmed by key officers - All directors attended the board meeting reviewing this quarterly report, and management guaranteed its truthfulness and completeness[2](index=2&type=chunk) [Company Profile](index=3&type=section&id=Section%202%20Company%20Profile) [Key Accounting Data and Financial Indicators](index=3&type=section&id=I.%20Key%20Accounting%20Data%20and%20Financial%20Indicators) In the first three quarters of 2020, the company's operating revenue slightly increased by 2.28%, but net profit attributable to parent company shareholders significantly declined by 87.19%; Q3 single-quarter net profit grew 77.70%, mainly due to non-recurring gains and losses, while total assets decreased by 8.33% from year-end Key Financial Indicators for Q3 2020 | Indicator | Year-to-Date (Jan-Sep) | YoY Change | Current Period (Q3) | YoY Change | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue (RMB) | 1,186,750,026.46 | 2.28% | 297,588,735.07 | -15.83% | | Net Profit Attributable to Parent Company Shareholders (RMB) | 45,097,459.62 | -87.19% | 204,516,218.47 | 77.70% | | Net Profit Attributable to Parent Company Shareholders, Excluding Non-Recurring Items (RMB) | 94,869,609.02 | -69.55% | 72,945,768.64 | -40.32% | | Net Cash Flow from Operating Activities (RMB) | 900,516,760.82 | 408.82% | -186,145,406.88 | -1,489.58% | | Basic EPS (RMB/share) | 0.0226 | -87.91% | 0.1026 | 77.82% | | Weighted Average ROE | 0.57% | -87.73% | 2.57% | 70.21% | - From the beginning of the year to the end of the reporting period, the company's non-recurring gains and losses totaled **-49.77 million RMB**, primarily due to fund occupation fees from non-financial enterprises and other non-operating income/expenses, significantly impacting net profit[4](index=4&type=chunk) [Shareholder Information](index=4&type=section&id=II.%20Total%20Shareholders%20and%20Top%20Ten%20Shareholders%27%20Holdings%20at%20Period-End) As of the end of the reporting period, the company had 18,312 common shareholders; the top three shareholders, Tibet Zangge Venture Capital Group, Sichuan Yonghong Industrial, and Xiao Yongming, are parties acting in concert, holding a combined **73.37%** of shares, with nearly all their holdings pledged and frozen - At the end of the reporting period, the company had **18,312** common shareholders[6](index=6&type=chunk) Top Three Shareholders' Holdings and Pledged/Frozen Status | Shareholder Name | Holding Percentage | Number of Shares Held | Share Status | Pledged/Frozen Quantity | | :--- | :--- | :--- | :--- | :--- | | Tibet Zangge Venture Capital Group Co., Ltd. | 43.08% | 858,892,678 | Pledged/Frozen | 858,892,678 | | Sichuan Yonghong Industrial Co., Ltd. | 19.42% | 387,228,181 | Pledged/Frozen | 387,228,181 | | Xiao Yongming | 10.87% | 216,803,365 | Pledged/Frozen | 216,803,365 | - Tibet Zangge Venture Capital Group Co., Ltd., Sichuan Yonghong Industrial Co., Ltd., and Xiao Yongming are parties acting in concert[7](index=7&type=chunk) [Significant Events](index=6&type=section&id=Section%203%20Significant%20Events) [Analysis of Major Financial Data Changes](index=6&type=section&id=I.%20Changes%20and%20Reasons%20for%20Major%20Financial%20Data%20and%20Indicators%20in%20the%20Reporting%20Period) During the reporting period, the company's financial position changed significantly, with cash and cash equivalents increasing by **854.74%** due to recovery of controlling shareholder's funds, short-term borrowings decreasing by **87.95%** from loan repayments, and investment income plummeting by **4190.89%** due to losses from an associate, while operating cash flow surged by **408.82%** Balance Sheet Major Item Changes and Reasons | Item | Change Rate | Primary Reason | | :--- | :--- | :--- | | Cash and Cash Equivalents | 854.74% | Received funds occupied by controlling shareholder | | Other Receivables | -96.28% | Recovered funds occupied by controlling shareholder | | Short-term Borrowings | -87.95% | Repaid bank loans | | Accounts Payable | -53.82% | Paid suppliers for goods | Income Statement Major Item Changes and Reasons | Item | Change Rate | Primary Reason | | :--- | :--- | :--- | | Operating Costs | 97.43% | Freight and miscellaneous expenses reclassified to operating costs under new revenue standards | | Selling Expenses | -86.49% | Freight and miscellaneous expenses reclassified out of selling expenses under new revenue standards | | Investment Income | -4190.89% | Recognized investment loss in associate Julong Copper under equity method | | Non-operating Expenses | 2545.80% | Recognized tax late payment fees for the first half of the year | Cash Flow Statement Major Item Changes and Reasons | Item | Change Rate | Primary Reason | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 408.82% | Increased sales collection, recovered funds occupied by controlling shareholder | | Net Cash Flow from Investing Activities | 198.60% | Proceeds from disposal of equity in associates | [Progress of Significant Events](index=7&type=section&id=II.%20Analysis%20of%20Progress%2C%20Impact%2C%20and%20Solutions%20for%20Significant%20Events) During the reporting period, the company disclosed three significant events: the sale of a 6.22% stake in Tibet Julong Copper Co., Ltd., the investigation of its controlling shareholder and actual controller by the China Securities Regulatory Commission, and the announcement of a share repurchase plan via centralized bidding - The company advanced several significant matters during the reporting period, including: - Disposal of **6.22%** equity in Tibet Julong Copper Co., Ltd. (disclosed July 14, 2020) - Investigation initiated by the CSRC into the controlling shareholder and actual controller (disclosed September 11, 2020) - Launch of a share repurchase plan via centralized bidding (disclosed October 23, 2020)[14](index=14&type=chunk) [Overdue Unfulfilled Commitments](index=7&type=section&id=III.%20Overdue%20Unfulfilled%20Commitments%20by%20Relevant%20Parties%20Including%20Actual%20Controller%2C%20Shareholders%2C%20Related%20Parties%2C%20Acquirers%2C%20and%20the%20Company%20During%20the%20Reporting%20Period) The company's controlling shareholder, Zangge Investment, Yonghong Industrial, and actual controller Xiao Yongming, failed to fully meet performance commitments from the 2016-2018 asset restructuring, with overdue share repurchase compensation arrangements primarily due to the pledged status of their shares, which the company is actively addressing - Performance commitments and compensation arrangements from the asset restructuring are overdue and unfulfilled[15](index=15&type=chunk) - The primary reason for the overdue unfulfillment is that most of the company's shares held by the compensation obligors (major shareholders) are pledged[16](index=16&type=chunk) - The company and compensation obligors are taking measures such as asset disposal and communication with financial institutions to raise funds for releasing pledged shares, but the required amount is substantial and still needs time[17](index=17&type=chunk)[18](index=18&type=chunk) [Investor Relations Activities](index=9&type=section&id=XI.%20Registration%20Form%20for%20Research%2C%20Communication%2C%20Interview%20and%20Other%20Activities%20During%20the%20Reporting%20Period) In Q3 2020, the company actively engaged with investors through various channels, focusing on lithium carbonate project progress, major shareholder share repurchase and pledge issues, Julong Copper matters, and overall production and operation status - Key concerns frequently raised by investors include: - Progress and production/sales of the lithium carbonate project - Issues related to the major shareholder's (controlling shareholder) share repurchase and cancellation, share pledges, and fund occupation - Development progress and guarantee issues of associate Julong Copper - The company's potassium chloride production and operation status and future development plans - Progress in addressing "non-standard" audit opinions and removing "ST/PT" designations[24](index=24&type=chunk)[25](index=25&type=chunk)[29](index=29&type=chunk) [Financial Statements](index=15&type=section&id=Section%204%20Financial%20Statements) This section provides the company's unaudited consolidated and parent company financial statements for Q3 2020, including the balance sheet, income statement, and cash flow statement, along with explanations for the first-time adoption of new revenue standards [Consolidated Balance Sheet](index=15&type=section&id=1.%20Consolidated%20Balance%20Sheet) As of September 30, 2020, total assets were **8.84 billion RMB**, down **8.33%** from year-end, with cash and cash equivalents significantly increasing to **783.84 million RMB** due to fund recovery, while total liabilities decreased by **49.16%** to **883.13 million RMB** primarily from short-term loan repayments, and equity attributable to parent company shareholders slightly increased by **0.64%** to **7.96 billion RMB** Consolidated Balance Sheet Key Items (Unit: RMB) | Item | September 30, 2020 | December 31, 2019 | Change | | :--- | :--- | :--- | :--- | | Cash and Cash Equivalents | 783,839,328.21 | 82,099,616.50 | +854.74% | | Other Receivables | 47,842,955.77 | 1,284,588,774.03 | -96.28% | | Short-term Borrowings | 50,000,000.00 | 415,000,000.00 | -87.95% | | **Total Assets** | **8,840,542,248.55** | **9,643,558,999.41** | **-8.33%** | | **Total Liabilities** | **883,126,405.85** | **1,736,932,363.85** | **-49.16%** | | **Equity Attributable to Parent Company Shareholders** | **7,957,415,842.70** | **7,906,626,635.56** | **+0.64%** | [Consolidated Income Statement](index=20&type=section&id=3.%20Consolidated%20Income%20Statement%20for%20the%20Current%20Reporting%20Period%20%26%205.%20Consolidated%20Income%20Statement%20from%20Year-Beginning%20to%20Period-End) For the first three quarters of 2020, operating revenue was **1.19 billion RMB**, up **2.28%**, but net profit attributable to parent company shareholders plummeted **87.19%** to **45.10 million RMB** due to a **155.74 million RMB** investment loss; Q3 single-quarter revenue declined **15.83%** to **297.59 million RMB**, yet net profit attributable to parent company shareholders surged **77.70%** to **204.52 million RMB** due to credit impairment reversals and investment gains Consolidated Income Statement Key Data (Year-to-Date, Unit: RMB) | Item | Jan-Sep 2020 | Jan-Sep 2019 | YoY Change | | :--- | :--- | :--- | :--- | | Operating Revenue | 1,186,750,026.46 | 1,160,288,525.20 | 2.28% | | Investment Income | -155,736,795.19 | 3,806,919.97 | -4190.89% | | Net Profit Attributable to Parent Company Shareholders | 45,097,459.62 | 352,127,119.20 | -87.19% | Consolidated Income Statement Key Data (Q3, Unit: RMB) | Item | Q3 2020 | Q3 2019 | YoY Change | | :--- | :--- | :--- | :--- | | Operating Revenue | 297,588,735.07 | 353,562,568.83 | -15.83% | | Net Profit Attributable to Parent Company Shareholders | 204,516,218.47 | 115,093,881.53 | 77.70% | [Consolidated Cash Flow Statement](index=30&type=section&id=7.%20Consolidated%20Cash%20Flow%20Statement%20from%20Year-Beginning%20to%20Period-End) In the first three quarters of 2020, net cash flow from operating activities significantly improved to **900.52 million RMB**, up **408.82%**, driven by increased sales collection and recovery of controlling shareholder funds; net cash flow from investing activities turned positive to **52.24 million RMB** due to disposal of associate equity, while financing activities saw a net outflow of **251.01 million RMB** primarily for loan repayments, with cash and cash equivalents increasing to **783.84 million RMB** at period-end Consolidated Cash Flow Statement Key Data (Year-to-Date, Unit: RMB) | Item | Jan-Sep 2020 | Jan-Sep 2019 | YoY Change | | :--- | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 900,516,760.82 | 176,983,113.03 | 408.82% | | Net Cash Flow from Investing Activities | 52,237,044.60 | -52,980,867.23 | 198.60% | | Net Cash Flow from Financing Activities | -251,014,093.71 | -144,581,183.34 | -73.61% | | Net Increase in Cash and Cash Equivalents | 701,739,711.71 | -20,578,937.54 | - | | Cash and Cash Equivalents at Period-End | 783,839,328.21 | 39,766,053.22 | - | [Audit Report](index=40&type=section&id=III.%20Audit%20Report) The company's 2020 third-quarter report is unaudited - The company's third-quarter report is unaudited[65](index=65&type=chunk)