[Important Notice, Table of Contents, and Definitions](index=2&type=section&id=%E7%AC%AC%E4%B8%80%E8%8A%82%20%E9%87%8D%E8%A6%81%E6%8F%90%E7%A4%BA%E3%80%81%E7%9B%AE%E5%BD%95%E5%92%8C%E9%87%8A%E4%B9%89) This section provides important disclaimers, the report's table of contents, and key definitions - The company's Board of Directors, Supervisory Board, and senior management guarantee the truthfulness, accuracy, and completeness of this semi-annual report, with no false records, misleading statements, or major omissions[3](index=3&type=chunk) - The company plans **not to distribute cash dividends, bonus shares, or convert capital reserves into share capital for the first half of 2020**[3](index=3&type=chunk) [Company Profile and Key Financial Indicators](index=6&type=section&id=%E7%AC%AC%E4%BA%8C%E8%8A%82%20%E5%85%AC%E5%8F%B8%E7%AE%80%E4%BB%8B%E5%92%8C%E4%B8%BB%E8%A6%81%E8%B4%A2%E5%8A%A1%E6%8C%87%E6%A0%87) This chapter presents the company's profile and an overview of its key financial performance and position 2020 Semi-Annual Key Financial Indicators | Indicator | Current Period (CNY) | Prior Period (Adjusted) (CNY) | YoY Change (Adjusted) | | :--- | :--- | :--- | :--- | | Operating Revenue | 23.35 billion | 20.84 billion | 12.01% | | Net Profit Attributable to Shareholders of Listed Company | 363.57 million | 643.83 million | -43.53% | | Net Profit Attributable to Shareholders of Listed Company (Excluding Non-recurring Gains and Losses) | 231.61 million | 619.33 million | -62.60% | | Net Cash Flow from Operating Activities | 1.49 billion | 507.17 million | 193.95% | | Basic Earnings Per Share (CNY/share) | 0.1908 | 0.3315 | -42.44% | | Weighted Average Return on Net Assets | 3.78% | 7.88% | -4.10% | | **Indicator** | **As of Current Period End (CNY)** | **As of Prior Year End (Adjusted) (CNY)** | **YoY Change (Adjusted)** | | Total Assets | 27.05 billion | 24.52 billion | 10.33% | | Net Assets Attributable to Shareholders of Listed Company | 9.68 billion | 9.40 billion | 3.01% | 2020 Semi-Annual Non-recurring Gains and Losses Items | Item | Amount (CNY) | | :--- | :--- | | Gains/Losses on Disposal of Non-current Assets | -196.87 thousand | | Government Grants Recognized in Current Period Profit/Loss | 82.09 million | | Fair Value Changes and Disposal Gains/Losses of Trading/Derivative Financial Instruments | 61.90 million | | Other Non-operating Income and Expenses | 2.41 million | | Less: Income Tax Impact | 14.23 million | | Less: Impact on Minority Interests (After Tax) | 13.92 thousand | | **Total** | **131.97 million** | [Company Business Overview](index=9&type=section&id=%E7%AC%AC%E4%B8%89%E8%8A%82%20%E5%85%AC%E5%8F%B8%E4%B8%9A%E5%8A%A1%E6%A6%82%E8%A6%81) This chapter outlines the company's core copper processing business, its operating model, and key competitive advantages [Principal Business](index=9&type=section&id=3.1%20%E4%B8%BB%E8%A6%81%E4%B8%9A%E5%8A%A1) This section details the company's primary copper processing activities, products, and stable operating model - The company is **one of the world's largest and most competitive copper processing enterprises**, primarily engaged in the R&D, production, manufacturing, and sales of copper tube, copper rod, and other products[18](index=18&type=chunk) - The company's operating model is **sales-driven production**, with a profitability model of earning stable **raw material price plus processing fees**; no significant changes occurred in principal business or operating model during the reporting period[18](index=18&type=chunk) [Key Asset Information](index=9&type=section&id=3.2%20%E4%B8%BB%E8%A6%81%E8%B5%84%E4%BA%A7%E6%83%85%E5%86%B5) This section reviews the company's key assets, including increases in construction in progress and significant overseas holdings - Construction in Progress increased due to the implementation of relevant copper processing construction and technical renovation projects[19](index=19&type=chunk) Major Overseas Assets Information | Asset Name | Location | Asset Scale (CNY million) | Proportion of Company's Net Assets | Net Profit for the Period (CNY million) | | :--- | :--- | :--- | :--- | :--- | | Hailiang Copper Trading Co., Ltd. (Hong Kong) | Hong Kong, China | 389.65 million | 10.83% | 3.76 million | | Hailiang (Vietnam) Copper Industry Co., Ltd. | Vietnam | 165.17 million | 8.01% | 3.22 million | | LOYAL HAILIANG COPPER (THAILAND) CO., LTD. | Thailand | 169.69 million | 4.88% | 3.11 million | [Core Competencies](index=10&type=section&id=3.3%20%E6%A0%B8%E5%BF%83%E7%AB%9E%E4%BA%89%E5%8A%9B) This section highlights the company's core strengths in talent, management, risk control, R&D, and supply chain leverage - Company's core competencies include: - **Talent Aggregation Capability**: Attracting and retaining talent through an inclusive culture, career platform, and comprehensive incentive mechanisms - **Refined Management Capability**: Regarded as a benchmark in the industry, with key production and financial indicators leading peers - **Robust Risk Control System**: Adhering to the philosophy of "**only earn processing fees and avoid copper market speculation**", effectively mitigating copper price and exchange rate risks - **Strong Equipment and Process R&D Capability**: Possessing a national-level "Enterprise Technology Center" and a postdoctoral research workstation - **Strong Upstream and Downstream Bargaining Power**: Leveraging global presence and economies of scale to integrate global procurement and sales supply chain resources[22](index=22&type=chunk)[23](index=23&type=chunk)[24](index=24&type=chunk)[25](index=25&type=chunk)[26](index=26&type=chunk) [Management Discussion and Analysis](index=12&type=section&id=%E7%AC%AC%E5%9B%9B%E8%8A%82%20%E7%BB%8F%E8%90%A5%E6%83%85%E5%86%B5%E8%AE%A8%E8%AE%BA%E4%B8%8E%E5%88%86%E6%9E%90) This chapter discusses the company's operational performance, strategic responses to challenges, and key business developments [Overview](index=12&type=section&id=4.1%20%E6%A6%82%E8%BF%B0) This section provides an overview of the company's performance and strategic initiatives amidst challenging market conditions 2020 Semi-Annual Operating Performance | Indicator | Value | YoY Growth | | :--- | :--- | :--- | | Sales Volume of Non-ferrous Metal Processed Materials | 399.4 thousand tons | 8.77% | | Operating Revenue | 23.35 billion CNY | 12.01% | | Total Profit | 451 million CNY | -40.75% | | Net Profit Attributable to Shareholders of Listed Company | 364 million CNY | -43.53% | - The company's key initiatives during the reporting period include: - **Epidemic Prevention and Control**: Leveraging multi-base advantages both domestically and internationally to flexibly arrange global production and sales, achieving sales growth - **Intelligent Manufacturing**: Multiple intelligent projects, such as "High-Precision Environmentally Friendly Copper and Copper Alloy Pipe Fittings," are being implemented as planned - **Globalization Strategy**: Accelerating the Texas production line project in the US and the integration and transformation project of HME Company in Europe - **Platform Construction**: Building upon its large-scale non-ferrous metal manufacturing capabilities, promoting the development of a large logistics platform and expanding bulk commodity trading business[27](index=27&type=chunk)[29](index=29&type=chunk) [Analysis of Principal Business](index=13&type=section&id=4.2%20%E4%B8%BB%E8%90%A5%E4%B8%9A%E5%8A%A1%E5%88%86%E6%9E%90) This section analyzes the drivers of operating revenue, changes in product and regional sales, and key financial expense trends Major Financial Data YoY Change | Item | Current Period (CNY) | Prior Period (CNY) | YoY Change | Primary Reason for Change | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue | 23.35 billion | 20.84 billion | 12.01% | - | | Administrative Expenses | 397.16 million | 302.02 million | 31.50% | Time difference in consolidation scope for European HME project | | Financial Expenses | 118.68 million | 219.62 million | -45.96% | Decrease in interest expenses | | Net Cash Flow from Operating Activities | 1.49 billion | 507.17 million | 193.95% | Adjustment of procurement settlement methods, extended payment cycles | | Net Cash Flow from Investing Activities | -96.98 million | -1.54 billion | 93.70% | Investment payment for acquisition of European HME project in prior period | | Net Cash Flow from Financing Activities | 18.08 million | 1.39 billion | -98.70% | Decrease in bank loan increase compared to prior period | Operating Revenue Composition and Change | Category | Business/Product | Revenue (CNY) | Proportion of Total Revenue | YoY Change | | :--- | :--- | :--- | :--- | :--- | | **Industry** | Copper Processing Industry | 15.21 billion | 65.13% | 0.66% | | | Raw Materials and Other Trading | 8.01 billion | 34.31% | 42.38% | | **Product** | Copper Tube | 12.17 billion | 52.11% | -6.20% | | | Copper Rod | 2.54 billion | 10.86% | 48.20% | | **Region** | Domestic Sales | 13.42 billion | 57.47% | 0.26% | | | Overseas Sales | 9.93 billion | 42.53% | 33.08% | [Analysis of Non-Principal Business](index=16&type=section&id=4.3%20%E9%9D%9E%E4%B8%BB%E8%90%A5%E4%B8%9A%E5%8A%A1%E5%88%86%E6%9E%90) This section examines the impact of non-principal business activities, such as investment income and government grants, on total profit Non-Principal Business Profit and Loss | Item | Amount (CNY) | Proportion of Total Profit | Reason for Formation | | :--- | :--- | :--- | :--- | | Investment Income | 62.22 million | 13.79% | Primarily investment income from equity method accounting for associates and losses from disposal of foreign exchange derivatives | | Fair Value Change Gains/Losses | 25.33 million | 5.61% | Primarily fair value change gains from foreign exchange derivative financial instruments | | Non-operating Income | 64.32 million | 14.26% | Primarily various government grants and liquidated damages | [Analysis of Assets and Liabilities](index=16&type=section&id=4.4%20%E8%B5%84%E4%BA%A7%E5%8F%8A%E8%B4%9F%E5%80%BA%E7%8A%B6%E5%86%B5%E5%88%86%E6%9E%90) This section details changes in the company's asset and liability structure, including cash, borrowings, and restricted assets - Significant changes in asset and liability structure: - **Cash and Cash Equivalents**: Increased by **4.96 percentage points**, primarily due to increased bill settlement for procurement payments, reducing cash outflow[36](index=36&type=chunk)[37](index=37&type=chunk) - **Long-term Borrowings**: Increased by **3.81 percentage points**, primarily due to the conversion of loans for the KME acquisition project into long-term M&A loans[36](index=36&type=chunk)[37](index=37&type=chunk) - **Notes Payable**: Increased by **4.54 percentage points**, primarily due to adjustments in procurement settlement methods, increasing bill settlement[36](index=36&type=chunk)[37](index=37&type=chunk) Restricted Assets as of Period End | Item | Book Value at Period End (CNY) | Reason for Restriction | | :--- | :--- | :--- | | Cash and Cash Equivalents | 1.74 billion | Used for letter of credit issuance, financing guarantees, and bank acceptance bills | | Notes Receivable | 10.23 million | Used for pledge to issue bank acceptance bills | | Accounts Receivable | 22.07 million | Used for factoring loans | | **Total** | **1.78 billion** | - | [Analysis of Investment Activities](index=18&type=section&id=4.5%20%E6%8A%95%E8%B5%84%E7%8A%B6%E5%86%B5%E5%88%86%E6%9E%90) This section reviews the company's investment activities, including financial derivatives and the utilization of raised funds - Investment amount for the reporting period was **CNY 251 million**, a significant decrease of **77.46%** compared to **CNY 1.11 billion** in the prior year[40](index=40&type=chunk) - The company engaged in forward foreign exchange derivative investments for hedging purposes, with an actual gain of **CNY 46.91 million** for the reporting period[44](index=44&type=chunk) Overall Use of Raised Funds (CNY million) | Item | Amount | | :--- | :--- | | Total Raised Funds | 517.80 million | | Total Raised Funds Invested in Current Period | 25.06 million | | Total Raised Funds Accumulated Investment | 374.75 million | [Analysis of Major Controlled and Invested Companies](index=25&type=section&id=4.6%20%E4%B8%BB%E8%A6%81%E6%8E%A7%E8%82%A1%E5%8F%82%E8%82%A1%E5%85%AC%E5%8F%B8%E5%88%86%E6%9E%90) This section provides an overview of the operational performance of the company's major controlled and invested entities Major Subsidiaries and Invested Companies Operating Performance (CNY) | Company Name | Type | Operating Revenue | Operating Profit | Net Profit | | :--- | :--- | :--- | :--- | :--- | | Guangdong Hailiang Copper Industry Co., Ltd. | Subsidiary | 1.84 billion | 52.28 million | 49.47 million | | Shanghai Hailiang Copper Industry Co., Ltd. | Subsidiary | 5.85 billion | 87.08 million | 66.06 million | | Hailiang Copper Trading Co., Ltd. (Hong Kong) | Subsidiary | 10.22 billion | 37.34 million | 37.64 million | | Hailiang Group Finance Co., Ltd. | Invested Company | 224.34 million | 146.47 million | 112.88 million | - Due to the impact of domestic and international epidemics, a decline in downstream customer sales and processing fees led to a significant decrease in net profit for subsidiaries such as Hailiang (Anhui) Copper Industry, Hailiang Otto Copper Tube (Guangdong), and Hailiang (Vietnam) Copper Industry compared to the prior year[56](index=56&type=chunk) [Risks Faced by the Company and Countermeasures](index=26&type=section&id=4.7%20%E5%85%AC%E5%8F%B8%E9%9D%A2%E4%B8%B4%E7%9A%84%E9%A3%8E%E9%99%A9%E5%92%8C%E5%BA%94%E5%AF%B9%E6%8E%AA%E6%96%BD) This section identifies key risks such as price volatility, market competition, and the pandemic, along with mitigation strategies - The company faces major risks including: - **Copper Price Fluctuation Risk**: Mitigated through "sales-driven production" and hedging tools - **Exchange Rate Risk**: Exchange rate risk is locked in through financial instruments such as foreign exchange forwards - **Market Risk**: Weak global economy and slowing domestic growth intensify market competition - **Accounts Receivable Bad Debt Risk**: Managed through a comprehensive credit evaluation and collection system - **Human Resources Risk**: Labor shortages and rising costs may constrain scale expansion - **M&A Integration Risk**: Uncertainty exists in the cultural and management integration with the KME Group - **COVID-19 Pandemic Risk**: The pandemic may recur, causing continuous impact on the global economy and company operations[57](index=57&type=chunk)[58](index=58&type=chunk)[59](index=59&type=chunk)[60](index=60&type=chunk) [Significant Matters](index=29&type=section&id=%E7%AC%AC%E4%BA%94%E8%8A%82%20%E9%87%8D%E8%A6%81%E4%BA%8B%E9%A1%B9) This chapter covers significant corporate governance and operational matters, including commitments, equity plans, and related party transactions [Commitments](index=29&type=section&id=5.1%20%E6%89%BF%E8%AF%BA%E4%BA%8B%E9%A1%B9) This section confirms the ongoing fulfillment of commitments by the controlling shareholder and actual controller - Commitments made by controlling shareholder Hailiang Group Co., Ltd. and actual controller Mr. Feng Hailiang regarding avoiding horizontal competition, reducing and regulating related party transactions, and share lock-up are being fulfilled normally on a long-term basis[63](index=63&type=chunk)[64](index=64&type=chunk) [Equity Incentive Plan](index=32&type=section&id=5.2%20%E8%82%A1%E6%9D%83%E6%BF%80%E5%8A%B1%E8%AE%A1%E5%88%92) This section details the progress of the company's first phase of restricted stock and employee stock ownership plans - The company's first phase employee stock ownership plan cumulatively purchased **12.52 million shares** of the company's stock through the secondary market, with the lock-up period ending on November 12, 2019; as of **June 30, 2020**, a total of **7.51 million shares** have been sold, with **5.01 million shares** remaining[74](index=74&type=chunk) [Significant Related Party Transactions](index=35&type=section&id=5.3%20%E9%87%8D%E5%A4%A7%E5%85%B3%E8%81%94%E4%BA%A4%E6%98%93) This section discloses significant related party transactions, primarily focusing on mutual guarantee arrangements - The company provided a total of **CNY 1 billion** in guarantees to its controlling shareholder, Hailiang Group Co., Ltd[77](index=77&type=chunk)[78](index=78&type=chunk) - Controlling shareholder Hailiang Group Co., Ltd. provided multiple loan guarantees to the company and its various subsidiaries, including those denominated in CNY, USD, and EUR[78](index=78&type=chunk) Financial Service Transactions with Hailiang Group Finance Co., Ltd. | Item | Balance at Period End (CNY) | | :--- | :--- | | Cash and Cash Equivalents Deposited | 2.91 billion | | Borrowed from Related Parties (USD) | 37.55 million | [Significant Contracts and Their Performance](index=38&type=section&id=5.4%20%E9%87%8D%E5%A4%A7%E5%90%88%E5%90%8C%E5%8F%8A%E5%85%B6%E5%B1%A5%E8%A1%8C%E6%83%85%E5%86%B5) This section outlines significant contracts, including external and subsidiary guarantees, and entrusted wealth management activities Major Guarantee Information (CNY million) | Guarantee Type | Approved Guarantee Limit as of Period End | Actual Guarantee Balance as of Period End | | :--- | :--- | :--- | | External Guarantees (to Controlling Shareholder) | 100.00 million | 100.00 million | | Guarantees to Subsidiaries | 374.79 million | 153.89 million | | **Total** | **474.79 million** | **253.89 million** | - The actual total guarantee amount accounts for **26.23%** of the company's net assets[92](index=92&type=chunk) - The company used idle raised funds from convertible bonds for entrusted wealth management in bank financial products totaling **CNY 149.90 million**, with an outstanding balance of **CNY 41 million** at period end[94](index=94&type=chunk) [Share Changes and Shareholder Information](index=46&type=section&id=%E7%AC%AC%E5%85%AD%E8%8A%82%20%E8%82%A1%E4%BB%BD%E5%8F%98%E5%8A%A8%E5%8F%8A%E8%82%A1%E4%B8%9C%E6%83%85%E5%86%B5) This chapter details changes in the company's share capital and provides an overview of its shareholder structure - During the reporting period, due to "Hailiang Convertible Bonds" entering the conversion period, a cumulative total of **1,032 shares** were converted, increasing the company's total share capital from **1.952 billion shares** to **1.952 billion shares**[103](index=103&type=chunk)[104](index=104&type=chunk) - Controlling shareholder Hailiang Group gratuitously donated **100 million shares** of its unrestricted circulating shares in the company to Zhejiang Hailiang Charity Foundation, with the transfer completed on January 14, 2020[104](index=104&type=chunk)[105](index=105&type=chunk) Top Three Shareholders' Shareholding Information | Shareholder Name | Shareholder Nature | Shareholding Percentage | Shares Held as of Period End (Shares) | | :--- | :--- | :--- | :--- | | Hailiang Group Co., Ltd. | Domestic Non-state-owned Legal Person | 40.01% | 781,026,875 | | Z&P ENTERPRISES LLC | Overseas Legal Person | 10.92% | 213,213,964 | | Zhejiang Hailiang Charity Foundation | Domestic Non-state-owned Legal Person | 5.14% | 100,408,200 | [Preferred Shares Information](index=51&type=section&id=%E7%AC%AC%E4%B8%83%E8%8A%82%20%E4%BC%98%E5%85%88%E8%82%A1%E7%9B%B8%E5%85%B3%E6%83%85%E5%86%B5) This chapter confirms the absence of preferred shares during the reporting period - The company had no preferred shares during the reporting period[115](index=115&type=chunk) [Convertible Corporate Bonds Information](index=52&type=section&id=%E7%AC%AC%E5%85%AB%E8%8A%82%20%E5%8F%AF%E8%BD%AC%E6%8D%A2%E5%85%AC%E5%8F%B8%E5%80%BA%E7%9B%B8%E5%85%B3%E6%83%85%E5%86%B5) This chapter provides information on the company's convertible bonds, including conversion price adjustments and conversion status - Due to the implementation of the 2019 annual equity distribution, the conversion price of "Hailiang Convertible Bonds" was adjusted from **CNY 9.83/share** to **CNY 9.76/share** effective **June 12, 2020**[116](index=116&type=chunk) Convertible Bond Accumulated Conversion Information | Convertible Bond Abbreviation | Total Issuance Amount (CNY) | Accumulated Conversion Amount (CNY) | Accumulated Converted Shares (Shares) | Proportion of Unconverted Amount to Total Issuance Amount | | :--- | :--- | :--- | :--- | :--- | | Hailiang Convertible Bonds | 3.15 billion | 10.20 thousand | 1,032 | 100.00% | - China Chengxin International Credit Rating Co., Ltd. maintained the company's corporate credit rating at **AA**, with a stable outlook, and the bond credit rating at **AA**[121](index=121&type=chunk) [Directors, Supervisors, and Senior Management Information](index=55&type=section&id=%E7%AC%AC%E4%B9%9D%E8%8A%82%20%E8%91%A3%E4%BA%8B%E3%80%81%E7%9B%91%E4%BA%8B%E3%80%81%E9%AB%98%E7%BA%A7%E7%AE%A1%E7%90%86%E4%BA%BA%E5%91%98%E6%83%85%E5%86%B5) This chapter confirms no changes in the shareholdings or composition of the company's directors, supervisors, and senior management - There were no changes in the shareholdings or composition of the company's directors, supervisors, and senior management during the reporting period[122](index=122&type=chunk)[123](index=123&type=chunk) [Corporate Bonds Information](index=56&type=section&id=%E7%AC%AC%E5%8D%81%E8%8A%82%20%E5%85%AC%E5%8F%B8%E5%80%BA%E7%9B%B8%E5%85%B3%E6%83%85%E5%86%B5) This chapter confirms the absence of outstanding or defaulted corporate bonds publicly issued and listed on stock exchanges - The company has no corporate bonds publicly issued and listed on stock exchanges that are outstanding or have failed to be fully redeemed as of the approval date of the semi-annual report[124](index=124&type=chunk) [Financial Report](index=57&type=section&id=%E7%AC%AC%E5%8D%81%E4%B8%80%E8%8A%82%20%E8%B4%A2%E5%8A%A1%E6%8A%A5%E5%91%8A) This chapter presents the unaudited semi-annual financial statements and notes, including accounting policy changes due to new revenue standards - The company's 2020 semi-annual financial report is unaudited[126](index=126&type=chunk) [Financial Statements](index=57&type=section&id=11.1%20%E8%B4%A2%E5%8A%A1%E6%8A%A5%E8%A1%A8) This section provides the consolidated and parent company financial statements, reflecting changes in assets, liabilities, and cash flows [Consolidated Balance Sheet](index=57&type=section&id=11.1.1%20%E5%90%88%E5%B9%B6%E8%B5%84%E4%BA%A7%E8%B4%9F%E5%80%BA%E8%A1%A8) This section presents the consolidated balance sheet, detailing the company's financial position as of **June 30, 2020** Consolidated Balance Sheet Major Items (CNY) | Item | June 30, 2020 (CNY) | December 31, 2019 (CNY) | | :--- | :--- | :--- | | **Total Assets** | **27.05 billion** | **24.52 billion** | | Cash and Cash Equivalents | 5.85 billion | 4.09 billion | | Accounts Receivable | 4.23 billion | 4.39 billion | | Inventories | 4.02 billion | 4.30 billion | | **Total Liabilities** | **17.01 billion** | **14.76 billion** | | Short-term Borrowings | 4.60 billion | 4.52 billion | | Notes Payable | 3.20 billion | 1.79 billion | | Bonds Payable | 2.54 billion | 2.47 billion | | **Total Owners' Equity** | **10.04 billion** | **9.76 billion** | [Consolidated Income Statement](index=63&type=section&id=11.1.2%20%E5%90%88%E5%B9%B6%E5%88%A9%E6%B6%A6%E8%A1%A8) This section presents the consolidated income statement, showing the company's revenue, costs, and net profit for H1 2020 Consolidated Income Statement Major Items (CNY) | Item | 2020 Semi-Annual (CNY) | 2019 Semi-Annual (CNY) | | :--- | :--- | :--- | | Total Operating Revenue | 23.40 billion | 20.90 billion | | Total Operating Costs | 23.11 billion | 20.23 billion | | Total Profit | 451.17 million | 761.48 million | | Net Profit | 373.77 million | 653.39 million | | Net Profit Attributable to Parent Company Owners | 363.57 million | 643.83 million | [Consolidated Cash Flow Statement](index=67&type=section&id=11.1.3%20%E5%90%88%E5%B9%B6%E7%8E%B0%E9%87%91%E6%B5%81%E9%87%8F%E8%A1%A8) This section presents the consolidated cash flow statement, highlighting cash flows from operating, investing, and financing activities Consolidated Cash Flow Statement Major Items (CNY) | Item | 2020 Semi-Annual (CNY) | 2019 Semi-Annual (CNY) | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 1.49 billion | 507.17 million | | Net Cash Flow from Investing Activities | -96.98 million | -1.54 billion | | Net Cash Flow from Financing Activities | 18.08 million | 1.39 billion | | Net Increase in Cash and Cash Equivalents | 1.41 billion | 363.03 million | [Notes to Financial Statements](index=78&type=section&id=11.2%20%E8%B4%A2%E5%8A%A1%E6%8A%A5%E8%A1%A8%E9%99%84%E6%B3%A8) This section provides detailed notes to the financial statements, covering accounting policies, significant items, and related party disclosures - The company began implementing the "Accounting Standard for Business Enterprises No. 14 - Revenue" (Cai Kuai [2017] No. 22) issued by the Ministry of Finance from **January 1, 2020**, using **transfer of control** as the criterion for revenue recognition, and adjusted the cumulative impact of initial adoption on retained earnings and related statement items at the beginning of the period[206](index=206&type=chunk) Impact of New Revenue Standard Implementation on Initial Consolidated Balance Sheet (CNY) | Statement Item | Before Adjustment (December 31, 2019) (CNY) | Impact Amount (CNY) | After Adjustment (January 1, 2020) (CNY) | | :--- | :--- | :--- | :--- | | Inventories | 4.30 billion | -446.41 million | 3.85 billion | | Contract Assets | 0.00 | 446.41 million | 446.41 million | | Advances from Customers | 405.02 million | -405.02 million | 0.00 | | Contract Liabilities | 0.00 | 405.02 million | 405.02 million | [Reference Documents Catalog](index=179&type=section&id=%E7%AC%AC%E5%8D%81%E4%BA%8C%E8%8A%82%20%E5%A4%87%E6%9F%A5%E6%96%87%E4%BB%B6%E7%9B%AE%E5%BD%95) This chapter lists the reference documents available for inspection, including signed financial statements and public disclosures - Reference documents include: - Financial statements signed and sealed - Originals of all publicly disclosed documents and announcements during the reporting period - The 2020 semi-annual report signed by the legal representative[449](index=449&type=chunk)