Financial Performance - The company's operating revenue for 2021 was approximately ¥14.78 billion, representing a 5.44% increase compared to ¥14.02 billion in 2020[18]. - The net profit attributable to shareholders for 2021 was approximately ¥4.48 billion, a significant increase of 119.58% from ¥2.04 billion in 2020[18]. - The net cash flow from operating activities reached approximately ¥4.77 billion, a remarkable increase of 1,154.19% compared to a negative cash flow of ¥452 million in 2020[18]. - The basic earnings per share for 2021 was ¥0.8505, up 74.07% from ¥0.4886 in 2020[18]. - Total assets at the end of 2021 amounted to approximately ¥25.27 billion, a 25.65% increase from ¥20.11 billion at the end of 2020[18]. - The net assets attributable to shareholders increased to approximately ¥9.34 billion, a 126.62% rise from ¥4.12 billion at the end of 2020[18]. - The company achieved an operating income of 14.778 billion CNY and a total profit of 5.339 billion CNY in 2021, marking the best performance in nearly a decade[67]. - The company reported a significant increase in lithium carbonate production, reaching 22,715 tons, a 67% increase from the previous year[82]. Market Position and Strategy - The company is positioned in a market where potassium fertilizer is crucial for crop yield and quality, with a growing need for potassium in China's agricultural sector[31]. - The company holds a significant market share in the potassium fertilizer sector, with over 30% in the national market and over 60% in the domestic potassium fertilizer market[68]. - The company plans to continue expanding its market presence and investing in new technologies, particularly in lithium carbonate production, which is expected to reach a capacity of 20,000 tons annually[102]. - The company is focusing on developing high-value-added products in the lithium battery supply chain, including lithium hydroxide and lithium battery anode materials[116]. - The company is actively pursuing mergers and acquisitions to strengthen its competitive edge in the market[146]. Research and Development - Research and development expenses increased significantly by 155.52% to ¥187.73 million in 2021, compared to ¥73.47 million in 2020, due to increased investment in research[91]. - The company is currently developing key technologies for the cold crystallization of potassium chloride, aiming to improve the recovery of large particles of sylvite and enhance product quality[92]. - The company is currently implementing several R&D projects aimed at enhancing potassium recovery and lithium extraction processes from salt lakes[95]. - The company has established a high-skilled talent training base and is actively conducting various training programs focusing on job skills and emergency response[177]. Environmental and Sustainability Initiatives - The company is committed to sustainability initiatives, aiming for a 40% reduction in carbon emissions by 2025[159]. - The company has implemented pollution control facilities, including bag filters and wastewater treatment systems, all of which are operating normally[196]. - The company has established emergency response plans for ecological environmental incidents, which have been filed with the local environmental authority[200]. Governance and Management - The company has established a comprehensive governance structure, ensuring independent operations in procurement, production, and sales[126]. - The company has a stable board of directors with terms running from 2021 to 2024, ensuring continuity in leadership[132]. - The company has a diverse board with members holding various roles, ensuring a range of perspectives in decision-making[132]. - The company has established an independent financial department and management system, ensuring self-accounting and self-profit and loss[130]. - The company’s governance changes reflect a strategic move to enhance operational efficiency and accountability within its leadership structure[136]. Challenges and Risks - The company reported a significant impact on profits due to the bankruptcy of its indirect subsidiary, resulting in a total loss of ¥515 million[113]. - The company’s reliance on imported potassium fertilizer remains high, with a self-sufficiency rate around 50%[35]. - Geopolitical tensions have led to sanctions on Belarusian potassium fertilizer, causing prices to rise and creating potential supply shortages[37]. Future Outlook - Future guidance indicates a focus on increasing production capacity and improving operational efficiency to meet growing market demand[146]. - The company plans to stabilize its potassium industry by optimizing resource extraction methods and expanding potassium fertilizer production capacity[116]. - The company anticipates that the supply of lithium carbonate will remain tight in 2022, as the increase in production capacity is expected to lag behind the growing demand[53].

Key Financial Data This section presents the company's key financial performance indicators and balance sheet items for the reporting period [Key Accounting Data and Financial Indicators](index=1&type=section&id=(I)%20Key%20Accounting%20Data%20and%20Financial%20Indicators) The company's Q3 2021 and YTD financial performance indicates decreased operating revenue but substantial growth in net profit and owner's equity | Indicator | Current Period (Q3 2021) (CNY) | YoY Change Current Period | Year-to-Date (YTD 2021) (CNY) | YoY Change Year-to-Date | | :------------------------------------------------------------- | :----------------------------- | :------------------------ | :---------------------------- | :---------------------- | | Operating Revenue | 4,636,376,880.02 | -27.44% | 10,798,597,233.12 | -32.58% | | Net Profit Attributable to Shareholders | 1,600,840,326.40 | 117.56% | 3,715,329,590.96 | 75.41% | | Net Profit Attributable to Shareholders Excluding Non-Recurring Items | 1,829,595,043.67 | 172.49% | 3,931,096,114.88 | 85.64% | | Net Cash Flow from Operating Activities | —— | —— | 4,481,759,497.18 | -10,598.75% | | Basic Earnings Per Share (CNY/share) | 0.2947 | 64.54% | 0.6839 | 32.69% | | Diluted Earnings Per Share (CNY/share) | 0.2947 | 64.54% | 0.6839 | 32.69% | | Weighted Average Return on Net Assets | 22.61% | 308.16% | 61.19% | -550.26% | | **Balance Sheet Indicators** | **End of Current Period (CNY)**| **End of Prior Year (CNY)**| **Change from Prior Year-End**| | | Total Assets | 25,815,904,473.22 | 20,109,814,550.88 | 28.37% | | | Owner's Equity Attributable to Shareholders | 8,631,325,878.19 | 4,119,277,848.68 | 109.53% | | [Non-Recurring Gains and Losses Items and Amounts](index=1&type=section&id=(II)%20Non-Recurring%20Gains%20and%20Losses%20Items%20and%20Amounts) During the reporting period, total non-recurring gains and losses were negative, primarily due to subsidiary Yanhu Energy's provisions for illegal mining income and revenue | Item | Current Period Amount (CNY) | Year-to-Date Amount (CNY) | Explanation | | :---------------------------------------------------------------------------------------------------------------------------------- | :-------------------------- | :------------------------ | :---------------------------------------------------------------------------------------------------------- | | Gains/Losses from Disposal of Non-Current Assets (including write-back of asset impairment provisions) | -69,893.10 | -69,893.10 | | | Government Subsidies Recognized in Current Profit/Loss (excluding those closely related to normal operations, compliant with national policies, and continuously enjoyed at fixed or quantitative standards) | 13,296,111.78 | 25,603,173.43 | | | Enterprise Restructuring Expenses, such as employee resettlement and integration costs | -28,230,914.11 | -28,230,914.11 | | | Gains/Losses from Contingent Events Unrelated to Normal Business Operations | 742,617.49 | | | | Other Non-Operating Income and Expenses Apart from the Above | -12,678,778.21 | -6,037,769.05 | | | Other Profit/Loss Items Meeting the Definition of Non-Recurring Gains/Losses | -284,810,280.69 | -284,810,280.69 | Primarily due to subsidiary Yanhu Energy's provision for illegal mining income and revenue during the reporting period | | Less: Income Tax Impact | -74,588,617.12 | -71,096,517.02 | | | Minority Shareholder Equity Impact (After Tax) | -8,407,802.45 | -6,682,642.58 | | | Total | -228,754,717.27 | -215,766,523.92 | -- | - Total non-recurring gains and losses were **negative**, primarily due to subsidiary Yanhu Energy's provision for illegal mining income and revenue[4](index=4&type=chunk) [Reasons for Changes in Key Accounting Data and Financial Indicators](index=2&type=section&id=(III)%20Reasons%20for%20Changes%20in%20Key%20Accounting%20Data%20and%20Financial%20Indicators) This section details significant changes in balance sheet, income statement, and cash flow statement items, driven by factors like reduced trade revenue, increased profit, debt recovery, and asset disposal [Analysis of Balance Sheet Item Changes](index=2&type=section&id=1.%20Analysis%20of%20Significant%20Changes%20in%20Balance%20Sheet%20Items) | Balance Sheet Item | Period-End Balance (CNY) | Period-Beginning Balance (CNY) | Change (%) | Reason | | :-------------------------------------------------- | :----------------------- | :----------------------------- | :--------- | :----------------------------------------------------------------------------------------------------- | | Monetary Funds | 6,176,284,050.89 | 2,069,706,334.15 | 198.41% | Main reasons detailed in the cash flow statement | | Notes Payable | 223,556,910.24 | 70,332,137.77 | 217.86% | Primarily due to an increase in notes payable issued during the reporting period | | Employee Remuneration Payable | 446,175,065.51 | 690,951,578.68 | -35.43% | Primarily due to the payment of performance bonuses accrued in the prior year during the reporting period | | Taxes Payable | 563,128,451.42 | 394,333,982.01 | 42.80% | Primarily due to increased tax expenses resulting from main product revenue during the reporting period | | Interest Payable | 276,900,645.96 | 109,066,424.17 | 153.88% | Primarily due to the accrual of retained debt interest | | Other Payables | 1,039,561,446.87 | 650,032,150.78 | 59.92% | Primarily due to subsidiary Yanhu Energy's provision for illegal mining income and revenue during the reporting period | | Special Reserve | 283,327,982.76 | 205,213,987.23 | 38.06% | Primarily due to increased provision for safety production expenses during the reporting period | | Total Owner's Equity Attributable to Parent Company | 8,631,325,878.19 | 4,119,277,848.68 | 109.53% | Primarily due to increased profit during the reporting period, leading to an increase in owner's equity attributable to the parent company | - Monetary funds at period-end increased by **198.41%**, primarily due to increased cash flow[5](index=5&type=chunk) - Total owner's equity attributable to the parent company increased by **109.53%**, mainly due to increased profit during the reporting period[6](index=6&type=chunk) [Analysis of Income Statement Item Changes](index=3&type=section&id=2.%20Analysis%20of%20Significant%20Changes%20in%20Income%20Statement%20Items) | Income Statement Item | YTD Amount (Jan-Sep) (CNY) | Prior Year YTD Amount (Jan-Sep) (CNY) | Change (%) | Reason Analysis | | :------------------------------------------------------------------------- | :------------------------- | :------------------------------------ | :--------- | :---------------------------------------------------------------------------------------------------------- | | Operating Revenue | 10,798,597,233.12 | 16,017,714,011.99 | -32.58% | Primarily due to a decrease in trade revenue and chemical product sales compared to the prior year | | Operating Cost | 5,551,220,548.40 | 12,882,283,866.23 | -56.91% | Primarily due to a decrease in trade revenue and chemical product sales compared to the prior year | | Credit Impairment Losses | 9,290,966.01 | -11,004,144.69 | -184.43% | Primarily due to the reversal of credit impairment losses accrued in the prior year during the reporting period | | Asset Impairment Losses | -100,861,352.88 | -406,377,424.36 | -75.18% | Primarily due to Yanhu Energy Co. accruing inventory impairment provisions in the prior year | | Investment Income | 129,227,167.60 | -100,697,523.41 | -228.33% | Primarily due to the reversal of excess losses from the disposal of a subsidiary in the current reporting period | | Other Income | 24,717,882.43 | 101,173,328.88 | -75.57% | Primarily due to a decrease in government subsidies received compared to the prior year | | Non-Operating Expenses | 386,727,392.73 | 97,513,307.65 | 296.59% | Primarily due to subsidiary Yanhu Energy's provision for illegal mining income and revenue during the reporting period | | Income Tax Expense | 815,386,991.92 | 458,648,165.64 | 77.78% | Primarily due to increased profit during the reporting period compared to the prior year, leading to higher income tax expenses | - Operating revenue decreased by **32.58%** year-on-year, primarily due to reduced trade revenue and chemical product sales[7](index=7&type=chunk) - Investment income increased by **228.33%** year-on-year, mainly due to the reversal of excess losses from subsidiary disposal[7](index=7&type=chunk) [Analysis of Cash Flow Statement Item Changes](index=3&type=section&id=3.%20Analysis%20of%20Significant%20Changes%20in%20Cash%20Flow%20Statement%20Items) | Cash Flow Statement Item | YTD Amount (Jan-Sep) (CNY) | Prior Year YTD Amount (Jan-Sep) (CNY) | Change (%) | Reason Analysis | | :------------------------------------------------------------------------------------- | :------------------------- | :------------------------------------ | :--------- | :---------------------------------------------------------------------------------------------------------- | | Other Cash Received Related to Operating Activities | 587,364,007.96 | 291,136,615.60 | 101.75% | Primarily due to the receipt of repaid debts during the reporting period | | Various Taxes Paid | 1,319,118,050.51 | 3,057,695,532.93 | -56.86% | Primarily due to the payment of overdue taxes from prior years in the same period last year | | Net Cash Flow from Operating Activities | 4,481,759,497.18 | -42,688,493.08 | -10598.75% | Primarily due to increased cash receipts from product sales and reduced cash expenditures compared to the prior period | | Net Cash Received from Disposal of Fixed Assets, Intangible Assets, and Other Long-Term Assets | 10,257.05 | 2,588,280,122.44 | -100.00% | Primarily due to cash received from the disposal of chemical, magnesium, and Haina asset packages in the prior year | | Other Cash Received Related to Investing Activities | 741,777,743.48 | 1,033,301.30 | 71687.17% | Primarily due to gains from the disposal of subsidiary shares during the reporting period | | Cash Paid for Acquisition of Fixed Assets, Intangible Assets, and Other Long-Term Assets | 528,692,929.87 | 305,528,686.69 | 73.04% | Primarily due to increased payments for subsidiary Lan Ke Lithium's 20,000-ton lithium carbonate project during the reporting period | | Other Cash Paid Related to Investing Activities | 1,023,246,693.44 | 1,103,689.24 | 92611.49% | Primarily due to the purchase of wealth management products with idle funds during the reporting period | | Net Cash Flow from Investing Activities | -809,251,622.78 | 2,288,431,047.81 | -135.36% | Primarily due to cash received from the disposal of chemical, magnesium, and Haina asset packages in the prior year | | Net Cash Flow from Financing Activities | 206,662,594.51 | -368,721,335.66 | -156.05% | Primarily due to subsidiary Lan Ke Lithium receiving investment funds from minority shareholders during the reporting period | - Net cash flow from operating activities was **4.482 billion CNY**, a significant improvement from the prior year, primarily due to increased cash receipts from product sales and reduced cash expenditures[7](index=7&type=chunk) - Net cash flow from investing activities was **-809 million CNY**, a **135.36%** year-on-year decrease, mainly due to cash received from asset package disposal in the prior year and increased acquisition of fixed assets and wealth management products this period[8](index=8&type=chunk) - Net cash flow from financing activities was **207 million CNY**, primarily due to subsidiary Lan Ke Lithium receiving investment funds from minority shareholders[8](index=8&type=chunk) Shareholder Information This section provides an overview of the company's shareholder structure, including the total number of common shareholders and the top ten shareholders' holdings [Common Shareholders and Top Ten Shareholders' Holdings](index=4&type=section&id=(I)%20Total%20Number%20of%20Common%20Shareholders,%20Preferred%20Shareholders%20with%20Restored%20Voting%20Rights,%20and%20Top%20Ten%20Shareholders'%20Holdings) As of the reporting period, the company had 285,673 common shareholders, with Qinghai Provincial State-owned Assets Investment Management Co. holding the largest stake at 13.86%, largely pledged - Total common shareholders at the end of the reporting period: **285,673**[9](index=9&type=chunk) | Shareholder Name | Shareholder Type | Shareholding (%) | Number of Shares Held | Number of Restricted Shares Held | Pledge, Mark, or Freeze Status | Quantity | | :---------------------------------------------------------------------------- | :---------------------------- | :--------------- | :-------------------- | :------------------------------- | :----------------------------- | :---------- | | Qinghai Provincial State-owned Assets Investment Management Co., Ltd. | State-owned Legal Person | 13.86% | 753,068,895 | | Pledged | 753,000,000 | | Sinochem Group Co., Ltd. | State-owned Legal Person | 10.52% | 571,578,484 | | | | | ICBC Financial Asset Investment Co., Ltd. | State-owned Legal Person | 7.48% | 406,276,871 | | | | | China Development Bank | Domestic Non-State-owned Legal Person | 7.40% | 402,200,881 | | | | | Postal Savings Bank of China Co., Ltd. Qinghai Branch | Domestic Non-State-owned Legal Person | 6.20% | 336,750,156 | | | | | China Construction Bank Co., Ltd. Qinghai Branch | State-owned Legal Person | 6.02% | 326,949,337 | | | | | Bank of China Co., Ltd. Qinghai Branch | Domestic Non-State-owned Legal Person | 5.21% | 283,312,196 | | | | | Agricultural Bank of China Co., Ltd. Qinghai Branch | Domestic Non-State-owned Legal Person | 3.82% | 207,769,728 | | | | | Qinghai Salt Lake Industry Co., Ltd. Bankruptcy Enterprise Asset Disposal Special Account | Domestic Non-State-owned Legal Person | 2.83% | 153,628,322 | | | | | China Cinda Asset Management Co., Ltd. | State-owned Legal Person | 2.19% | 119,205,067 | | | | - Qinghai Provincial State-owned Assets Investment Management Co., Ltd. holds **13.86%** of shares, with **753,000,000 shares** pledged[9](index=9&type=chunk) Other Significant Matters This section details any other significant events or matters impacting the company during the reporting period - There are no other significant matters for this reporting period[10](index=10&type=chunk) Quarterly Financial Statements This section includes the company's consolidated balance sheet, income statement, and cash flow statement for the quarter, along with adjustments for new lease standards [Consolidated Balance Sheet](index=5&type=section&id=1.%20Consolidated%20Balance%20Sheet) As of September 30, 2021, total assets reached **25.82 billion CNY**, up **28.37%** from year-end, with owner's equity attributable to the parent company growing **109.53%** to **8.63 billion CNY** due to increased profit - As of September 30, 2021, total assets were **25.82 billion CNY**, a **28.37%** increase from year-end 2020[3](index=3&type=chunk)[14](index=14&type=chunk) - Owner's equity attributable to the parent company was **8.63 billion CNY**, a **109.53%** increase from year-end 2020, primarily due to increased profit during the reporting period[3](index=3&type=chunk)[6](index=6&type=chunk)[14](index=14&type=chunk) - Total current assets were **13.44 billion CNY**, and total non-current assets were **12.38 billion CNY**[12](index=12&type=chunk) [Consolidated Income Statement from Year-Beginning to End of Reporting Period](index=8&type=section&id=2.%20Consolidated%20Income%20Statement%20from%20Year-Beginning%20to%20End%20of%20Reporting%20Period) As of September 2021, total operating revenue was **10.80 billion CNY**, down **32.58%** YoY; net profit was **4.13 billion CNY**, up **90.79%**; and net profit attributable to the parent was **3.72 billion CNY**, up **75.41%** - Year-to-date total operating revenue was **10.80 billion CNY**, a **32.58%** year-on-year decrease[3](index=3&type=chunk)[15](index=15&type=chunk) - Year-to-date net profit attributable to the parent company was **3.72 billion CNY**, a **75.41%** year-on-year increase[3](index=3&type=chunk)[17](index=17&type=chunk) - Year-to-date net profit was **4.13 billion CNY**, compared to **2.17 billion CNY** in the prior period, representing approximately **90.79%** year-on-year growth[16](index=16&type=chunk) [Consolidated Cash Flow Statement from Year-Beginning to End of Reporting Period](index=10&type=section&id=3.%20Consolidated%20Cash%20Flow%20Statement%20from%20Year-Beginning%20to%20End%20of%20Reporting%20Period) As of September 2021, net cash flow from operating activities significantly improved to **4.48 billion CNY**; investing activities had a net outflow of **809 million CNY** due to asset purchases and wealth management; and financing activities generated **207 million CNY** from minority shareholder investments - Net cash flow from operating activities was **4.48 billion CNY**, a significant improvement from **-42.69 million CNY** in the prior year[3](index=3&type=chunk)[19](index=19&type=chunk) - Net cash flow from investing activities was **-809 million CNY**, primarily due to increased acquisition of fixed assets and wealth management products[8](index=8&type=chunk)[19](index=19&type=chunk) - Net cash flow from financing activities was **207 million CNY**, primarily due to subsidiary Lan Ke Lithium receiving investment funds from minority shareholders[8](index=8&type=chunk)[19](index=19&type=chunk) [Adjustments to Financial Statements at the Beginning of the First Year of Adopting New Lease Standards from 2021](index=12&type=section&id=1.%20Adjustments%20to%20Financial%20Statements%20at%20the%20Beginning%20of%20the%20First%20Year%20of%20Adopting%20New%20Lease%20Standards%20from%202021) Effective 2021, the company adopted new lease standards, adjusting opening financial statements for items like fixed assets, right-of-use assets, and lease liabilities, resulting in an **18.75 million CNY** increase in both total assets and liabilities | Item | Dec 31, 2020 (CNY) | Jan 01, 2021 (CNY) | Adjustment Amount (CNY) | | :------------------------------------ | :----------------- | :----------------- | :---------------------- | | Fixed Assets | 7,176,902,333.06 | 7,173,409,754.68 | -3,492,578.38 | | Right-of-Use Assets | | 22,244,303.54 | 22,244,303.54 | | Total Non-Current Assets | 12,980,518,144.70 | 12,999,269,869.86 | 18,751,725.16 | | Total Assets | 20,109,814,550.88 | 20,128,566,276.04 | 18,751,725.16 | | Non-Current Liabilities Due Within One Year | 310,096,694.13 | 314,098,937.03 | 4,002,242.90 | | Lease Liabilities | | 17,648,762.32 | 17,648,762.32 | | Long-Term Payables | 1,151,693,659.92 | 1,148,794,379.86 | -2,899,280.06 | | Total Non-Current Liabilities | 9,743,839,224.71 | 9,758,588,706.97 | 14,749,482.26 | | Total Liabilities | 14,844,113,259.32 | 14,862,864,984.48 | 18,751,725.16 | | Total Owner's Equity | 5,265,701,291.56 | 5,265,701,291.56 | | | Total Liabilities and Owner's Equity | 20,109,814,550.88 | 20,128,566,276.04 | 18,751,725.16 | - New lease standards resulted in a **22.24 million CNY** increase in right-of-use assets and a **17.65 million CNY** increase in lease liabilities[21](index=21&type=chunk) - After adjustments, both total assets and total liabilities increased by **18.75 million CNY**[22](index=22&type=chunk) [Audit Report](index=14&type=section&id=(III)%20Audit%20Report) The company's Q3 2021 report is unaudited - The company's Q3 report is **unaudited**[22](index=22&type=chunk)