[Important Notice, Table of Contents and Definitions](index=1&type=section&id=Important%20Notice%2C%20Table%20of%20Contents%20and%20Definitions) This section provides crucial disclaimers, outlines the report structure, and defines key terms for clarity [Important Notice](index=1&type=section&id=Important%20Notice) The board ensures the report's accuracy and highlights major operational risks, including intensified competition, market expansion challenges, technological innovation hurdles, and cost risks from raw material prices and exchange rate fluctuations, alongside the 2020 profit distribution plan - Company faces four main risks: - **Intense Industry Competition**: Petrochemical industry capacity continues to grow; the company needs to leverage PDH cost advantages, focus on polypropylene new materials, and develop hydrogen energy from by-product hydrogen to strengthen competitiveness[1](index=1&type=chunk) - **Market Expansion Difficulty**: Global economic downturn leads to weak downstream demand; the company will respond by adjusting product structure, strengthening R&D, and expanding overseas markets[2](index=2&type=chunk) - **Technological Innovation Risk**: Digestion and absorption of introduced international advanced technology exist; the company will collaborate with technology providers for improvements and strengthen independent R&D[4](index=4&type=chunk) - **Volatile Operating Costs**: LPG, the main raw material, frequently fluctuates due to international oil prices and other factors; the company will control risks through inventory management, hedging, and exchange rate locking[4](index=4&type=chunk) Profit Distribution Plan | Distribution Plan | Details | | :--- | :--- | | **Dividend Base** | 1,576,127,767 shares | | **Dividend Scheme** | Cash dividend of 2.31 yuan (tax inclusive) per 10 shares | | **Bonus Shares/Capitalization** | No bonus shares, no capitalization of capital reserves | [Definitions](index=6&type=section&id=Definitions) This chapter defines key terms and abbreviations used in the report, covering company entities, business terms like LPG, PDH, and polypropylene, project names, and macroeconomic concepts, providing a foundation for understanding the report content - Key business terms defined: - **LPG (Liquefied Petroleum Gas)**: Clean gaseous energy primarily composed of propane and butane[8](index=8&type=chunk) - **PDH (Propane Dehydrogenation)**: Process producing propylene from propane via catalytic dehydrogenation[8](index=8&type=chunk) - **PP (Polypropylene)**: Thermoplastic resin produced by polymerizing propylene monomer, a main chemical product of the company[9](index=9&type=chunk) [Company Profile and Key Financial Indicators](index=8&type=section&id=Company%20Profile%20and%20Key%20Financial%20Indicators) This section provides an overview of the company's basic information and a detailed analysis of its key financial performance and position [Company Information](index=8&type=section&id=Company%20Information) This chapter provides basic information about Donghua Energy Co., Ltd., including its stock ticker "Donghua Energy," stock code "002221," and contact details such as registered address, office address, website, and email Company Information | Item | Information | | :--- | :--- | | **Stock Abbreviation** | Donghua Energy | | **Stock Code** | 002221 | | **Listing Exchange** | Shenzhen Stock Exchange | | **Legal Representative** | Zhou Yifeng | | **Company Website** | www.chinadhe.com | [Key Accounting Data and Financial Indicators](index=9&type=section&id=Key%20Accounting%20Data%20and%20Financial%20Indicators) In 2020, the company's operating revenue decreased by 37.04% to 29.08 billion yuan, mainly due to the divestiture of LPG trading business; however, net profit attributable to shareholders increased by 9.63% to 1.21 billion yuan, and non-recurring net profit increased by 16.75% to 1.04 billion yuan, indicating improved profitability from its transformation to chemical manufacturing, while net operating cash flow was 885.30 million yuan, a decrease Key Financial Indicators | Key Financial Indicators | 2020 | 2019 | YoY Change | | :--- | :--- | :--- | :--- | | **Operating Revenue (yuan)** | 29,081,749,414.40 | 46,187,623,600.18 | -37.04% | | **Net Profit Attributable to Parent (yuan)** | 1,210,328,463.30 | 1,104,002,053.20 | 9.63% | | **Non-recurring Net Profit Attributable to Parent (yuan)** | 1,042,164,292.48 | 892,640,295.20 | 16.75% | | **Net Operating Cash Flow (yuan)** | 885,300,496.09 | 1,177,952,566.73 | -24.84% | | **Basic Earnings Per Share (yuan/share)** | 0.7677 | 0.6984 | 9.92% | | **Total Assets (yuan)** | 28,123,857,725.46 | 28,081,435,717.57 | 0.15% | | **Net Assets Attributable to Parent (yuan)** | 10,188,491,457.03 | 9,326,855,706.79 | 9.24% | [Key Quarterly Financial Indicators](index=10&type=section&id=Key%20Quarterly%20Financial%20Indicators) The company's 2020 quarterly financial data shows Q2 net profit attributable to parent peaking at 423.05 million yuan, while operating revenue was highest in Q1 at 9.34 billion yuan before declining sequentially, and net operating cash flow was strongest in Q4 at 1.53 billion yuan, reversing prior quarters' outflows or small inflows Indicators (yuan) | Indicator (yuan) | Q1 | Q2 | Q3 | Q4 | | :--- | :--- | :--- | :--- | :--- | | **Operating Revenue** | 9,337,175,814.07 | 7,112,384,465.34 | 7,279,886,196.50 | 5,352,302,938.49 | | **Net Profit Attributable to Parent** | 267,546,538.38 | 423,053,231.51 | 338,859,537.52 | 180,869,155.89 | | **Net Operating Cash Flow** | -829,243,437.44 | 154,284,566.67 | 26,741,988.85 | 1,533,517,378.01 | [Non-recurring Gains and Losses and Amounts](index=10&type=section&id=Non-recurring%20Gains%20and%20Losses%20and%20Amounts) In 2020, the company's non-recurring gains and losses totaled 168.16 million yuan, a decrease from 211.36 million yuan in 2019, primarily comprising 106.64 million yuan from fair value changes and investment income related to financial assets/liabilities, and 88.26 million yuan in government subsidies Item (yuan) | Item (yuan) | 2020 Amount | 2019 Amount | | :--- | :--- | :--- | | **Disposal Gains/Losses on Non-current Assets** | 619,178.88 | 18,128,459.97 | | **Government Subsidies** | 88,263,482.44 | 164,404,981.43 | | **Gains/Losses from Financial Assets/Liabilities at Fair Value** | 106,643,749.60 | 43,080,645.29 | | **Total** | 168,164,170.82 | 211,361,758.00 | [Company Business Overview](index=12&type=section&id=Company%20Business%20Overview) This section outlines the company's core business transformation, significant asset changes, and key competitive advantages [Main Business](index=12&type=section&id=Main%20Business) The company has successfully transformed from an LPG trader into the world's largest propane dehydrogenation (PDH) manufacturer, with core business segments now including PDH to propylene, polypropylene production, and comprehensive hydrogen utilization, adopting a flat management model and recognizing the long-term advantages of low-carbon PDH technology under "carbon neutrality" goals - Company has transformed into the world's largest propane dehydrogenation manufacturer, with multiple PDH and PP (polypropylene) facilities in Zhangjiagang and Ningbo, and new capacity planned in Maoming and Ningbo[21](index=21&type=chunk) - After divesting trading business, the company focuses on three core businesses: - **PDH to Propylene**: Producing propylene from propane[21](index=21&type=chunk) - **Polypropylene**: Polymerizing propylene into new polypropylene materials[21](index=21&type=chunk) - **Comprehensive Hydrogen Utilization**: Focusing on hydrogen as a clean energy application[21](index=21&type=chunk) [Significant Changes in Major Assets](index=13&type=section&id=Significant%20Changes%20in%20Major%20Assets) During the reporting period, the company's major assets underwent significant changes, with construction in progress increasing by 1.8 billion yuan due to ongoing investments in Ningbo Phase II & III and Maoming projects, while trading financial assets and notes receivable financing decreased by 534 million yuan and 614 million yuan respectively, reflecting adjustments in fund utilization and sales settlement methods Major Assets | Major Assets | Significant Change Explanation | | :--- | :--- | | **Construction in Progress** | Increased by 1.8 billion yuan from year-end to year-beginning, mainly due to increased investment in Ningbo Phase II & III and Maoming projects | | **Trading Financial Assets** | Decreased by 534 million yuan from year-end to year-beginning, mainly due to redemption of some wealth management products | | **Notes Receivable Financing** | Decreased by 614 million yuan from year-end to year-beginning, mainly due to reduced receipt of letters of credit for goods sold | - The company's main overseas asset is its wholly-owned subsidiary, "Donghua Energy (Singapore) International Trading Co., Ltd.," engaged in international LPG trading. As of the end of 2020, its total assets reached **5.99 billion yuan**, accounting for **58.76%** of the company's net assets, and it achieved a net profit of **277 million yuan** for the year[23](index=23&type=chunk) [Analysis of Core Competencies](index=13&type=section&id=Analysis%20of%20Core%20Competencies) The company's core competencies are rooted in its efficient flat management culture, a unique systemic advantage across the LPG value chain, strategic geographical positioning in the Yangtze River Delta and Pearl River Delta, and the significant cost and environmental benefits of its advanced PDH technology - Company's core competencies include: - **Management Culture Advantage**: Flat management, efficient decision-making[24](index=24&type=chunk) - **Systemic Advantage**: Formed a complete industrial chain in LPG trading, shipping, storage, and PDH deep processing, utilizing futures instruments to control risks[24](index=24&type=chunk) - **Geographical Advantage**: Production bases strategically located in the Yangtze River Delta and Pearl River Delta, covering approximately **70%** of China's PP end-consumption market and facing ASEAN[25](index=25&type=chunk) - **Technology and Cost Advantage**: PDH process is short, capital-efficient, low energy consumption, clean, and environmentally friendly, aligning with energy saving, emission reduction, and carbon neutrality trends[25](index=25&type=chunk) [Management Discussion and Analysis](index=15&type=section&id=Management%20Discussion%20and%20Analysis) This section provides a comprehensive review of the company's operational performance, including business overview, detailed analysis of main and non-main businesses, and changes in asset and investment status [Operating Overview](index=15&type=section&id=Operating%20Overview) In 2020, despite the pandemic and complex external environment, the company focused on its core business and steadily advanced strategic transformation, achieving robust production and sales in chemical plants, significant progress in hydrogen energy utilization, and orderly construction of new projects, while the divestiture of trading assets improved financial structure and increased the chemical segment's revenue and gross profit contribution - Chemical plant operations were stable, with robust production and sales. In 2020, the two production bases produced a total of **1.17 million tons** of propylene and **915,900 tons** of polypropylene, including a large quantity of medical non-woven fabric special materials for epidemic prevention[27](index=27&type=chunk) - Hydrogen energy comprehensive utilization yielded significant benefits, achieving **139 million yuan** in sales revenue in 2020, a **36.47%** year-on-year increase. The company actively participates in the construction of hydrogen energy industrial chains in the Yangtze River Delta and Pearl River Delta, and plans to build ammonia synthesis facilities to explore more applications[28](index=28&type=chunk) - New project construction progressed smoothly: Ningbo Phase II PDH project commenced operation in February 2021; Ningbo Phase III PP project entered trial production in April 2021; Maoming Phase I project has started construction, key equipment ordered, and port shoreline approved[31](index=31&type=chunk)[32](index=32&type=chunk)[33](index=33&type=chunk) - Transformation through trading asset divestiture showed initial results. During the reporting period, total revenue decreased by **37.04%**, but the chemical segment's sales revenue proportion increased to **27.95%**, and the chemical product sales gross profit contribution significantly rose from **60.04%** in 2018 to **90.83%**[34](index=34&type=chunk) [Main Business Analysis](index=19&type=section&id=Main%20Business%20Analysis) In 2020, the company's main business structure significantly changed; LPG revenue decreased by 42.61% due to trading business divestiture, leading to a 37.04% total revenue decline, yet the chemical segment performed strongly with polypropylene and propylene gross margins increasing by 11.24 and 6.15 percentage points respectively, while warehousing revenue doubled, and R&D expenses surged by 2300.80% reflecting increased innovation investment, with cash flows from operating activities decreasing by approximately 35% due to trading business contraction Operating Revenue Composition (yuan) | Operating Revenue Composition (yuan) | 2020 | % of Total Revenue | 2019 | % of Total Revenue | YoY Change | | :--- | :--- | :--- | :--- | :--- | :--- | | **Polypropylene** | 6,587,450,036.69 | 22.65% | 7,945,147,312.44 | 17.20% | -17.09% | | **Propylene** | 1,391,516,782.80 | 4.79% | 1,252,542,067.98 | 2.71% | 11.10% | | **Liquefied Petroleum Gas** | 20,631,770,483.97 | 70.94% | 35,951,635,640.44 | 77.84% | -42.61% | | **Warehousing** | 155,291,198.47 | 0.53% | 75,115,580.51 | 0.16% | 106.74% | Main Product Gross Margin | Main Product Gross Margin | 2020 | 2019 | YoY Change | | :--- | :--- | :--- | :--- | | **Polypropylene** | 28.13% | 16.89% | +11.24% | | **Propylene** | 19.86% | 13.71% | +6.15% | | **Liquefied Petroleum Gas** | 1.03% | 2.08% | -1.05% | Expense Items (yuan) | Expense Item (yuan) | 2020 | 2019 | YoY Change | Significant Change Explanation | | :--- | :--- | :--- | :--- | :--- | | **Selling Expenses** | 104,548,998.34 | 194,913,588.82 | -46.36% | Transportation costs reclassified to cost of goods sold under new revenue standards | | **R&D Expenses** | 95,017,806.79 | 3,957,756.53 | 2,300.80% | Company increased R&D investment | Key Cash Flow Statement Items (yuan) | Key Cash Flow Statement Item (yuan) | 2020 | 2019 | YoY Change | | :--- | :--- | :--- | :--- | | **Net Cash Flow from Operating Activities** | 885,300,496.09 | 1,177,952,566.73 | -24.84% | | **Net Cash Flow from Investing Activities** | -1,054,019,999.91 | 343,613,156.22 | -406.75% | | **Net Cash Flow from Financing Activities** | -1,026,594,590.75 | -871,948,782.65 | 17.74% | | **Net Increase in Cash and Cash Equivalents** | -1,267,536,394.11 | 609,979,425.42 | -307.80% | [Non-Main Business Analysis](index=25&type=section&id=Non-Main%20Business%20Analysis) In 2020, the company's non-main business profit contribution primarily stemmed from 82.36 million yuan in investment income, 30.73 million yuan in fair value change gains, and 52.62 million yuan in non-operating income, while also recognizing 29.31 million yuan in asset impairment, mainly for chemical product storage tanks Item (yuan) | Item (yuan) | Amount | % of Total Profit | Reason for Formation | | :--- | :--- | :--- | :--- | | **Investment Income** | 82,364,320.55 | 5.30% | Mainly from wealth management products and futures contracts | | **Fair Value Change Gains/Losses** | 30,725,903.48 | 1.98% | Mainly from futures contracts and unexpired wealth management products | | **Asset Impairment** | -29,305,752.87 | -1.89% | Mainly impairment provision for chemical product storage tanks | | **Non-operating Income** | 52,623,656.23 | 3.39% | Mainly government awards received during the period | | **Other Income** | 45,351,650.08 | 2.92% | Mainly government subsidies and tax refunds related to daily operations | [Analysis of Assets and Liabilities](index=25&type=section&id=Analysis%20of%20Assets%20and%20Liabilities) As of year-end 2020, total assets were 28.12 billion yuan, largely unchanged from the beginning of the year, but asset structure shifted significantly, with construction in progress increasing by 1.8 billion yuan to 14.26% of total assets, and long-term borrowings rising by 2.58 billion yuan to 15.34% to meet project funding needs, while 11.91 billion yuan of assets were restricted, primarily for loan collateral and deposits Key Asset and Liability Items (yuan) | Key Asset and Liability Item (yuan) | Dec 31, 2020 | % of Total Assets | Jan 1, 2020 | % of Total Assets | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | | **Construction in Progress** | 4,009,947,440.65 | 14.26% | 2,210,155,356.53 | 7.87% | +6.39% | | **Long-term Borrowings** | 4,315,031,763.15 | 15.34% | 1,735,016,779.29 | 6.18% | +9.16% | - As of the end of the reporting period, the company had a total of **11.91 billion yuan** in restricted assets, primarily including: - **Monetary Funds**: **2.01 billion yuan** (mainly various deposits)[62](index=62&type=chunk) - **Fixed Assets**: **5.83 billion yuan** (loan collateral)[62](index=62&type=chunk) - **Construction in Progress**: **3.33 billion yuan** (loan collateral)[62](index=62&type=chunk) - **Intangible Assets**: **597 million yuan** (loan collateral)[62](index=62&type=chunk) [Analysis of Investment Status](index=27&type=section&id=Analysis%20of%20Investment%20Status) In 2020, the company's total investment was 1.93 billion yuan, a 16.58% year-on-year decrease, primarily focused on significant non-equity projects, particularly the Ningbo and Maoming alkane resource comprehensive utilization projects, with 1.73 billion yuan invested in Ningbo Phase II & III and Maoming Phase I, alongside capital injections into subsidiaries and the use of raised funds for committed projects Significant Non-equity Investment Projects | Significant Non-equity Investment Project | Investment Method | Current Period Investment (yuan) | Cumulative Investment as of Period End (yuan) | Project Progress | | :--- | :--- | :--- | :--- | :--- | | **Ningbo Alkane Resource Comprehensive Utilization (Phase II)** | Self-built | 600,899,569.05 | 1,759,329,826.88 | 90.00% | | **Ningbo Alkane Resource Comprehensive Utilization (Phase III)** | Self-built | 890,104,946.33 | 1,573,407,246.47 | 80.00% | | **Maoming Alkane Resource Comprehensive Utilization (Phase I)** | Self-built | 232,584,962.38 | 232,585,463.38 | - | - The company's 2015 non-public offering raised a total of **2.88 billion yuan**, with **1.94 billion yuan** cumulatively used as of the end of the reporting period, leaving **945 million yuan** unused, primarily held in special fundraising accounts[70](index=70&type=chunk) [Significant Matters](index=36&type=section&id=Significant%20Matters) This section details the company's profit distribution plan, significant related-party transactions, and major contracts, particularly focusing on guarantees provided to subsidiaries [Profit Distribution and Capital Reserve Capitalization](index=36&type=section&id=Profit%20Distribution%20and%20Capital%20Reserve%20Capitalization) The company's 2020 profit distribution plan proposes a cash dividend of 2.31 yuan (tax inclusive) per 10 shares, totaling an estimated 364.09 million yuan, representing 30.08% of net profit attributable to parent, which aligns with the future three-year (2021-2023) shareholder return plan's commitment to distribute no less than 30% of distributable profit annually, with the company consistently providing cash dividends and share repurchases over the past three years Dividend Situation (yuan) | Dividend Year | Cash Dividend Amount (yuan) | % of Net Profit Attributable to Parent | Share Repurchase Amount (yuan) | Total Cash Dividend (incl. Repurchase) | % of Net Profit Attributable to Parent | | :--- | :--- | :--- | :--- | :--- | :--- | | **2020** | 364,085,514.18 | 30.08% | 0.00 | 364,085,514.18 | 30.08% | | **2019** | 332,562,958.84 | 30.12% | 197,069,022.91 | 529,631,981.75 | 47.97% | | **2018** | 59,103,428.78 | 5.48% | 402,933,291.91 | 462,036,720.69 | 42.84% | - The company formulated the "Shareholder Return Plan for the Next Three Years (2021-2023)," committing to distribute no less than **30%** of the annual distributable profit in cash, provided the company is profitable and has positive accumulated undistributed profits[87](index=87&type=chunk) [Significant Related-Party Transactions](index=42&type=section&id=Significant%20Related-Party%20Transactions) During the reporting period, the company engaged in multiple daily operational transactions with related parties, primarily selling LPG to Matheson Energy and its subsidiaries for over 3.8 billion yuan based on cost-plus pricing, providing port and storage leasing services to Matheson Energy for approximately 123 million yuan, and transferring equity in subsidiary Qinzhou Donghua to Matheson Energy (Maoming) Co., Ltd. for 28.90 million yuan - The company conducted large-scale related-party transactions with Matheson Energy and its subsidiaries, controlled by the same ultimate beneficial owner, primarily involving the sale of liquefied petroleum gas and provision of storage services[108](index=108&type=chunk) Related Party Transactions (yuan) | Related Party | Related Transaction Type | Transaction Content | Transaction Amount (yuan) | | :--- | :--- | :--- | :--- | | **Matheson Energy (Nanjing)** | Sales | Liquefied Petroleum Gas | 2,369,704,800 | | **MATHESON ENERGY PTE LTD** | Sales | Liquefied Petroleum Gas | 1,152,915,100 | | **Matheson Energy (Maoming)** | Sales | Liquefied Petroleum Gas | 289,472,800 | | **Matheson Energy (various subsidiaries)** | Services | Storage Services | 123,286,600 | - The company transferred equity in subsidiary Qinzhou Donghua to related party Matheson Energy (Maoming) Co., Ltd. for **28.90 million yuan**, resulting in a transaction gain/loss of approximately **307,100 yuan**[110](index=110&type=chunk) [Major Contracts and Their Performance](index=45&type=section&id=Major%20Contracts%20and%20Their%20Performance) During the reporting period, the company had no significant entrustment, contracting, or leasing matters; major guarantees were primarily provided to subsidiaries to support their operations and project construction, with approved guarantee limits totaling 18.04 billion yuan and actual outstanding guarantees of 10.92 billion yuan as of year-end, representing 107.19% of the company's net assets, with no instances of irregular external guarantees Guarantee Situation (yuan) | Guarantee Situation (yuan) | Amount | | :--- | :--- | | **Total Approved Guarantee Limit for Subsidiaries within Reporting Period** | 14,885,000,000 | | **Total Actual Guarantees for Subsidiaries within Reporting Period** | 7,770,930,000 | | **Total Approved Guarantee Limit for Subsidiaries at End of Reporting Period** | 18,035,000,000 | | **Total Actual Outstanding Guarantees for Subsidiaries at End of Reporting Period** | 10,920,930,000 | - The company's total actual guarantees represent **107.19%** of its net assets, with the amount exceeding **50%** of net assets being **5.83 billion yuan**[120](index=120&type=chunk) [Share Changes and Shareholder Information](index=54&type=section&id=Share%20Changes%20and%20Shareholder%20Information) This section details changes in the company's share capital and provides an overview of its shareholder structure, including major shareholders and ultimate control [Share Changes](index=54&type=section&id=Share%20Changes) During the reporting period, the company's total share capital changed due to the repurchase and cancellation of restricted shares from departed incentive recipients, reducing the total shares from 1,649,782,824 to 1,649,022,824, with 760,000 shares cancelled, leading to a decrease in restricted shares and a corresponding increase in unrestricted shares - Due to the repurchase and cancellation of restricted shares granted to 15 departed incentive recipients that had not yet been lifted, the company's total share capital decreased by **760,000 shares**[135](index=135&type=chunk)[141](index=141&type=chunk) [Shareholders and Ultimate Control](index=58&type=section&id=Shareholders%20and%20Ultimate%20Control) As of the end of the reporting period, the company had 33,356 common shareholders, with the top two being Donghua Petroleum (Changjiang) Co., Ltd. and Unocal Changjiang Co., Ltd., both controlled by the ultimate beneficial owners Mr. Zhou Yifeng and Ms. Wang Mingxiang, holding over 27% combined, while Mr. Zhou Yifeng directly held 9.25% as the third largest shareholder, and there were no changes in the controlling shareholder or ultimate beneficial owner during the period Major Shareholder Information | Shareholder Name | Shareholder Nature | Shareholding Percentage | Number of Shares Held | | :--- | :--- | :--- | :--- | | **Donghua Petroleum (Changjiang) Co., Ltd.** | Overseas Legal Person | 19.73% | 325,360,000 | | **Zhou Yifeng** | Domestic Natural Person | 9.25% | 152,610,440 | | **Unocal Changjiang Co., Ltd.** | Overseas Legal Person | 7.96% | 131,296,700 | | **Gongqingcheng Shengbang Investment Management Co., Ltd.** | Other | 5.91% | 97,472,712 | - The company's ultimate beneficial owners are Mr. Zhou Yifeng and Ms. Wang Mingxiang. They control the company through direct shareholding and by controlling Donghua Petroleum (Changjiang) Co., Ltd. and Unocal Changjiang Co., Ltd[144](index=144&type=chunk)[147](index=147&type=chunk)[148](index=148&type=chunk) [Directors, Supervisors, Senior Management, and Employees](index=65&type=section&id=Directors%2C%20Supervisors%2C%20Senior%20Management%2C%20and%20Employees) This section provides details on the shareholding changes of directors, supervisors, and senior management, as well as an overview of the company's employee structure [Changes in Shareholdings of Directors, Supervisors, and Senior Management](index=65&type=section&id=Changes%20in%20Shareholdings%20of%20Directors%2C%20Supervisors%2C%20and%20Senior%20Management) During the reporting period, there were no increases or decreases in the shareholdings of the company's current directors, supervisors, and senior management, with Chairman Zhou Yifeng's year-end shareholding remaining at 152,610,440 shares - During the reporting period, the shareholdings of the company's current directors, supervisors, and senior management remained stable, with no active increases or decreases[153](index=153&type=chunk)[154](index=154&type=chunk) [Company Employee Information](index=70&type=section&id=Company%20Employee%20Information) As of the end of the reporting period, the company had 1,903 employees, with production personnel constituting the largest group at 1,148 (60.3%), and employees with college degrees or higher totaling 1,178 (61.9%), providing strong talent support for the company's development Professional Composition (number of people) | Professional Composition | Number (people) | | :--- | :--- | | **Production Personnel** | 1,148 | | **Sales Personnel** | 41 | | **Technical Personnel** | 250 | | **Financial Personnel** | 70 | | **Administrative Personnel** | 394 | | **Total** | **1,903** | [Corporate Governance](index=72&type=section&id=Corporate%20Governance) This section outlines the company's corporate governance structure and its internal control effectiveness [Basic Corporate Governance Status](index=72&type=section&id=Basic%20Corporate%20Governance%20Status) The company has established a sound corporate governance structure in strict accordance with relevant laws and regulations, including the General Meeting of Shareholders, Board of Directors, Board of Supervisors, and management, complemented by four specialized committees, with its governance practices aligning with regulatory requirements and no significant discrepancies, and the company's operations were standardized through 3 General Meetings, 11 Board Meetings, and 6 Supervisory Board Meetings during the reporting period - The company's corporate governance structure is sound, with standardized operations of the three boards, robust internal control systems, and independence from the controlling shareholder in personnel, assets, organization, business, and finance[166](index=166&type=chunk)[168](index=168&type=chunk) [Internal Control Evaluation Report](index=76&type=section&id=Internal%20Control%20Evaluation%20Report) Based on the Board of Directors' self-assessment report and the accounting firm's standard unqualified internal control attestation report, the company effectively maintained internal controls related to financial statements in all material aspects as of December 31, 2020, in accordance with the Basic Norms for Enterprise Internal Control, with no material or significant deficiencies found in financial or non-financial reporting during the period - The company's internal control evaluation report concludes effectiveness, with no material deficiencies found in financial and non-financial reporting[179](index=179&type=chunk) - The accounting firm issued a **standard unqualified attestation report** on the company's 2020 internal controls, consistent with the Board of Directors' self-assessment report[182](index=182&type=chunk) [Financial Report](index=80&type=section&id=Financial%20Report) This section presents the independent audit opinion on the financial statements and provides a summary of the company's key financial performance and position [Audit Report](index=80&type=section&id=Audit%20Report) Suya Jincheng Certified Public Accountants issued a standard unqualified audit opinion on the company's 2020 financial statements, affirming that they fairly present the company's financial position, operating results, and cash flows in all material respects, while identifying inventory existence and revenue recognition as two key audit matters - The audit opinion type is **standard unqualified opinion**[184](index=184&type=chunk) - Key audit matters are: - **Inventory Existence**: The authenticity of inventory significantly impacts financial statements due to the company's leased warehouses and third-party storage arrangements[187](index=187&type=chunk)[188](index=188&type=chunk) - **Revenue Recognition**: The company's diverse business models present an inherent risk of manipulating revenue recognition timing to achieve specific targets[190](index=190&type=chunk) [Financial Statements](index=83&type=section&id=Financial%20Statements) The financial statements present the company's financial position as of year-end 2020 and its full-year operating results, showing total assets of 28.12 billion yuan, total liabilities of 17.92 billion yuan, and total equity attributable to parent of 10.19 billion yuan, with full-year operating revenue of 29.08 billion yuan, net profit attributable to parent of 1.21 billion yuan, and net cash flow from operating activities of 885.30 million yuan Consolidated Balance Sheet Key Items (yuan) | Consolidated Balance Sheet Key Item (yuan) | Dec 31, 2020 | Dec 31, 2019 | | :--- | :--- | :--- | | **Total Assets** | 28,123,857,725.46 | 28,081,435,717.57 | | **Total Liabilities** | 17,916,226,914.23 | 18,741,061,586.55 | | **Total Equity Attributable to Parent Company Owners** | 10,188,491,457.03 | 9,326,855,706.79 | Consolidated Income Statement Key Items (yuan) | Consolidated Income Statement Key Item (yuan) | 2020 | 2019 | | :--- | :--- | :--- | | **Total Operating Revenue** | 29,081,749,414.40 | 46,187,623,600.18 | | **Operating Profit** | 1,505,828,017.55 | 1,377,172,163.79 | | **Total Profit** | 1,554,271,492.91 | 1,440,139,804.75 | | **Net Profit** | 1,212,471,779.15 | 1,106,939,357.98 | | **Net Profit Attributable to Parent Company Shareholders** | 1,210,328,463.30 | 1,104,002,053.20 | Consolidated Cash Flow Statement Key Items (yuan) | Consolidated Cash Flow Statement Key Item (yuan) | 2020 | 2019 | | :--- | :--- | :--- | | **Net Cash Flow from Operating Activities** | 885,300,496.09 | 1,177,952,566.73 | | **Net Cash Flow from Investing Activities** | -1,054,019,999.91 | 343,613,156.22 | | **Net Cash Flow from Financing Activities** | -1,026,594,590.75 | -871,948,782.65 | [Reference Documents](index=240&type=section&id=Reference%20Documents) This section lists the documents available for inspection, including signed financial statements, the original audit report, and all statutory disclosure documents from the reporting period, kept at the company's Board of Directors office - This chapter lists the reference documents available for inspection, including financial statements signed by responsible persons, the original audit report, and all statutory disclosure documents from the reporting period, kept at the company's Board of Directors office[596](index=596&type=chunk)

Financial Performance - Net profit attributable to shareholders was ¥338,859,537.52, a decrease of 10.21% year-on-year[3]. - Operating revenue for the period was ¥7,279,886,196.50, down 35.81% compared to the same period last year[3]. - The basic earnings per share were ¥0.2150, reflecting a decline of 9.97% year-on-year[3]. - The weighted average return on equity was 3.40%, down 0.76% from the previous year[3]. - The company reported a net profit excluding non-recurring gains and losses of ¥310,152,201.46, an increase of 20.24% year-on-year[3]. - The company's revenue for the reporting period was 23.729 billion yuan, a decrease of 36.14% compared to the same period last year, primarily due to the divestment of the LPG domestic distribution business[16]. - The net profit attributable to the parent company was 1.029 billion yuan, an increase of 1.88% year-on-year, demonstrating resilience despite the pandemic's impact[16]. - Total operating revenue for Q3 2020 was CNY 7,279,886,196.50, a decrease of approximately 35.5% compared to CNY 11,340,387,917.45 in the same period last year[36]. - Net profit for Q3 2020 was CNY 339,713,788, compared to CNY 378,235,864 in Q3 2019, reflecting a decrease of about 10.2%[38]. - The total profit for Q3 2020 was CNY 412,093,531.33, down from CNY 507,737,771.10 in the previous year, a decline of approximately 18.8%[38]. - The company reported a total comprehensive income of CNY 986,542,833.80, down from CNY 1,046,303,091.06 in the previous period[46]. Assets and Liabilities - Total assets at the end of the reporting period reached ¥28,918,710,345, an increase of 2.98% compared to the end of the previous year[3]. - The total liabilities amounted to CNY 18,925,303,988.46, slightly up from CNY 18,741,061,586.55 year-over-year[33]. - The total equity attributable to shareholders of the parent company was CNY 9,977,168,650.41, up from CNY 9,326,855,706.79, marking an increase of about 6.9%[33]. - The company reported a total of 9,563,721,051.08 CNY in short-term loans, remaining unchanged from the previous period[58]. - The total liabilities reached 16,187,383,791.56 CNY, with current liabilities comprising a significant portion of this total[58]. - The company has a total of 1,735,016,779.29 CNY in long-term loans, indicating a stable long-term financing structure[58]. - The total assets amounted to 28,081,435,717.57 CNY, with current assets totaling 16,833,801,557.36 CNY[57]. - The company has maintained a strong liquidity position with a cash balance increase of 43,556,448.83 CNY during the quarter[55]. Cash Flow - The net cash flow from operating activities was ¥26,741,988.85, a significant decrease of 97.64%[3]. - The company reported a decrease in operating cash flow of 2.141 billion yuan, a decline of 143.42%, mainly due to increased accounts receivable[15]. - The net cash flow from operating activities for the third quarter was -648,216,881.92 CNY, a decrease from 1,492,848,941.04 CNY in the previous year[50]. - Cash received from the sale of goods and services was 24,916,414,005.01 CNY, down from 38,881,513,081.57 CNY year-over-year, representing a decline of approximately 36%[50]. - The total cash inflow from operating activities was 25,370,630,450.91 CNY, compared to 39,029,873,523.90 CNY in the previous year, indicating a decrease of about 35%[51]. - The net cash flow from investing activities was -1,327,129,740.76 CNY, worsening from -407,693,186.69 CNY in the same period last year[52]. - The net cash flow from financing activities was 632,492,741.16 CNY, a significant improvement from -2,646,568,749.41 CNY in the previous year[52]. Shareholder Information - The total number of shareholders at the end of the reporting period was 42,626[6]. - The largest shareholder, Donghua Petroleum (Yangtze) Co., Ltd., held 19.73% of the shares[6]. - The company did not engage in any repurchase transactions during the reporting period[9]. Investment and Development - The company achieved hydrogen sales revenue of 54.1468 million yuan during the reporting period, with total sales revenue of 95.1436 million yuan for the first three quarters[16]. - The construction of the Maoming Phase I and Ningbo Phase II and III projects is progressing as planned, with significant milestones achieved[17]. - The company has plans for market expansion and new product development, although specific details were not disclosed in the report[36]. - Research and development expenses increased to CNY 5,553,965.77 in Q3 2020, up from CNY 1,922,841.72 in Q3 2019, indicating a significant investment in innovation[37]. - Research and development expenses increased to CNY 7,822,206.57 from CNY 6,944,008.33, reflecting a growth of 12.6%[43]. Other Financial Metrics - The gross profit margin increased to 7.51%, up 2.05% year-on-year, indicating improved profitability post-LPG business divestment[16]. - The company’s derivative financial assets increased by 19.699 million yuan, a growth of 59.94%, attributed to gains from futures fair value changes[12]. - The company’s other comprehensive income decreased by 44.4691 million yuan, a decline of 75.83%, primarily due to foreign currency translation adjustments[14]. - The company has no securities or derivative investments during the reporting period[21][22]. - The company has not undergone an audit for the third quarter report[64]. - The implementation of new revenue and leasing standards began on January 1, 2020, affecting financial reporting[63].

Financial Performance - The company's operating revenue for the first half of 2020 was ¥16,449,560,279.41, a decrease of 36.29% compared to the same period last year[14]. - Net profit attributable to shareholders was ¥690,599,769.89, an increase of 9.08% year-on-year[14]. - The net cash flow from operating activities was -¥674,958,870.77, a decline of 286.59% compared to the previous year[14]. - The total assets at the end of the reporting period were ¥27,437,461,990.58, down 2.29% from the end of the previous year[14]. - The net assets attributable to shareholders increased by 7.62% to ¥10,037,650,378.64[14]. - The company's operating revenue for the reporting period was approximately ¥16.45 billion, a decrease of 36.29% compared to ¥25.82 billion in the same period last year, primarily due to the impact of the pandemic and the divestiture of the LPG domestic distribution business[40]. - The company's total revenue for the first half of 2020 was approximately ¥16.27 billion, a decrease of 36.32% compared to the same period last year[43]. - The gross profit margin for liquefied petroleum gas sales was 2.37%, down by 0.07% year-on-year, with sales revenue decreasing by 39.97%[43]. - The revenue from chemical products was approximately ¥4.61 billion, with a gross profit margin of 19.97%, reflecting a year-on-year decrease of 24.73%[43]. - The company reported a significant decrease in investment amounting to ¥642.79 million, a decline of 53.21% compared to the previous year[50]. - The company reported a total of ¥10.4 billion in restricted assets, primarily due to bank guarantees and loan collateral[49]. Strategic Initiatives - The company plans to focus on the propane-propylene-polypropylene industrial route and enhance its competitive advantage in the polypropylene market[3]. - The company aims to expand its product structure to meet the demand for essential products, particularly in the healthcare sector, amid ongoing market challenges[5]. - The company will strengthen its research and development of high-end products to gain a first-mover advantage in the new materials industry[5]. - The company aims to establish a world-class olefin industry ecosystem in collaboration with local governments and financial institutions[19]. - The company plans to invest over CNY 40 billion in the green chemical industry base in the Greater Bay Area, with the first phase expected to be completed by June 2022, adding 1.6 million tons/year of propylene and polypropylene capacity[20]. - The company plans to focus on high-end composite new materials as a key development direction, with a comprehensive R&D plan to enhance product structure and competitiveness[37]. - The company aims to transform into a green chemical producer and high-quality hydrogen energy supplier, enhancing its product line and extending its industrial chain[28]. - The company plans to optimize production processes and control operating costs while developing new product grades to increase profit margins[30]. - The company is in the process of divesting its LPG trade assets, with the goal of maximizing asset efficiency and reducing financial burdens[23]. - The company plans to exit LPG international and domestic trade businesses, reallocating resources towards the Maoming and Ningbo integrated application industrial bases[105]. Research and Development - The company has established a dedicated R&D center in 2018, focusing on new product development and enhancing market share[28]. - The company has established a dedicated R&D team of approximately 50 people, with 5 at headquarters and 20 each at Zhangjiagang and Ningbo bases, focusing on new product development and technology reserves[36]. - The company has successfully developed key products including Y381H and S2040 for medical materials, and Y1500H for mask meltblown layer materials, while also exploring high-end new materials[37]. - The company's R&D investment significantly decreased by 96.19% to ¥2.27 million from ¥59.58 million in the previous year, mainly due to delays in some R&D projects caused by the pandemic[40]. Market and Sales - During the first half of 2020, the company produced 560,400 tons of propylene and 421,500 tons of polypropylene, achieving sales revenue of CNY 4.605 billion[20]. - The hydrogen energy segment generated sales revenue of CNY 40.9968 million, with stable growth in hydrogen sales from Zhangjiagang and Ningbo facilities[21]. - The company’s LPG trade and distribution business faced significant fluctuations due to the pandemic, but showed recovery in the second quarter of 2020[23]. - The company has exported products to India, Vietnam, Pakistan, and South Africa since March 2020, while prioritizing domestic supply[35]. - The company achieved a 292.83% increase in revenue from warehousing services, rising to ¥65.26 million from ¥16.61 million in the previous year[42]. Financial Management - The company has received bank credit facilities totaling RMB 28.771 billion, of which RMB 15.547 billion has been utilized[141]. - The company maintains a credit rating of AA+ with a stable outlook from United Credit Ratings[128]. - The liquidity ratio at the end of the reporting period is 104.50%, an increase of 0.51% compared to the end of the previous year[138]. - The debt-to-asset ratio decreased to 63.35%, down by 3.39% from the previous year[138]. - The EBITDA interest coverage ratio improved to 4.99, representing a 22.91% increase compared to the same period last year[138]. - The company has strictly adhered to the bond issuance prospectus, ensuring timely and full payment of interest and disclosing relevant information to protect bondholders' rights[142]. - The company has completed the interest payment for the first phase of its corporate bonds as of the report date[123]. - The company’s bond proceeds have been fully utilized for debt repayment, optimizing the debt structure, and supplementing working capital[127]. Corporate Governance - The company’s annual shareholder meeting had a participation rate of 43.02%, reflecting shareholder engagement in corporate governance[74]. - The company does not plan to distribute cash dividends or issue bonus shares for the half-year period, indicating a focus on reinvestment[74]. - The company has implemented an employee stock incentive plan, granting a total of 29,820,000 shares at a price of 5.51 yuan per share[83]. - The company has no penalties or rectification situations reported during the reporting period[82]. - The company maintains a good integrity status, with no significant debts or court judgments unfulfilled[82]. Legal Matters - No significant litigation or arbitration matters reported during the reporting period[79]. - The company filed a lawsuit against Haian Xinfeng Liquefied Gas Co., Ltd. for compensation of losses amounting to 3 million yuan due to contract breaches, but the court dismissed the case[80]. Environmental and Social Responsibility - The company has established a comprehensive environmental management system and complies with environmental regulations, ensuring all emissions are within standards[102]. Related Party Transactions - The total amount of related party transactions during the reporting period was CNY 226,602.13 thousand, with no transactions exceeding the approved limits[87]. - The sales of liquefied petroleum gas to related parties amounted to CNY 140,026.10 thousand, accounting for 61.79% of similar transactions[85]. - The company confirmed that all related party transactions were conducted at market prices, ensuring compliance with pricing principles[85]. Financial Instruments and Accounting Policies - The financial statements are prepared in accordance with the accounting standards, reflecting the company's financial position and operating results accurately[178]. - The company follows the equity method for accounting for mergers under common control and the purchase method for mergers not under common control[184]. - The company recognizes goodwill when the merger cost exceeds the fair value of identifiable net assets acquired[185].

Business Strategy and Development - The company plans to focus on the propane-propylene-polypropylene industrial chain to strengthen its competitive advantage in the polypropylene market[2]. - The company will enhance its research and development of high-end products in the new materials industry to gain a first-mover advantage[3]. - The company aims to develop the hydrogen energy industry to reduce costs associated with propylene and polypropylene production[2]. - The company will adjust its product structure to increase production of essential products for the healthcare industry[3]. - The company is committed to improving its technological capabilities through independent and collaborative research and development[3]. - The company is actively participating in the hydrogen energy industry chain construction in the Yangtze River Delta and Pearl River Delta regions[17]. - The company plans to invest over 40 billion RMB in a comprehensive utilization project in Maoming, which is expected to produce 4.5 million tons of propylene and 3.5-4 million tons of polypropylene annually upon completion[17]. - The company is constructing the world's largest propylene and polypropylene production base in Maoming, with the first phase of the project officially starting construction in March 2020[26]. - The company plans to continue increasing R&D investment to develop competitive high-end polypropylene products, with ongoing research into various new materials[38]. - The company is focusing on extending its industrial chain into the hydrogen energy and new materials industries, positioning itself as a practitioner of strategic emerging industries[116]. Financial Performance - The company's operating revenue for 2019 was ¥46,187,623,600.18, a decrease of 5.63% compared to ¥48,942,864,332.39 in 2018[12]. - The net profit attributable to shareholders for 2019 was ¥1,104,002,053.20, reflecting a growth of 2.37% from ¥1,078,441,579.13 in 2018[12]. - The net profit after deducting non-recurring gains and losses was ¥892,640,295.20, up by 3.17% from ¥865,202,344.36 in the previous year[12]. - The net cash flow from operating activities decreased significantly by 50.97% to ¥1,177,952,566.73 from ¥2,402,702,138.77 in 2018[12]. - The total assets at the end of 2019 were ¥28,081,435,717.57, an increase of 4.83% compared to ¥26,786,883,619.04 at the end of 2018[12]. - The net assets attributable to shareholders increased by 11.19% to ¥9,326,855,706.79 from ¥8,388,557,388.69 in 2018[12]. - The basic earnings per share for 2019 was ¥0.6984, representing a growth of 5.15% from ¥0.6642 in 2018[12]. - The diluted earnings per share also increased by 5.45% to ¥0.6984 from ¥0.6623 in the previous year[12]. - The weighted average return on equity for 2019 was 12.46%, down from 13.20% in 2018[12]. - The company reported non-recurring gains of ¥213,239,234.77 for 2019, compared to ¥159,354,675.88 in 2018[16]. Cash Management and Dividends - A cash dividend of 2.11 RMB per 10 shares (including tax) will be distributed to all shareholders, based on a total of 1,576,127,767 shares[4]. - The cash dividend amount for 2019 represents 30.12% of the net profit attributable to ordinary shareholders, which was RMB 1,104,002,053.20[74]. - Over the past three years, the total cash dividends distributed were RMB 529,631,981.75, accounting for 47.97% of the net profit attributable to ordinary shareholders in 2019[74]. - The company has increased the cash dividend distribution policy from a minimum of 3% to 30% of the distributable profit for the current year[72]. - The company has a stable and reasonable dividend decision-making mechanism to enhance shareholder returns[72]. - The cash dividend distribution plan is subject to approval at the annual general meeting[77]. Risks and Challenges - The company acknowledges risks related to intense industry competition and potential overcapacity if downstream market demand does not increase[2]. - The company faces financial risks due to fluctuations in raw material prices influenced by various factors, including international oil prices[3]. - The company emphasizes the importance of effective cash management to mitigate foreign currency risks associated with its procurement processes[4]. Operational Efficiency and Management - The company will closely monitor international crude oil market changes to adjust its operational strategies accordingly[4]. - The company has established a dedicated R&D center to enhance market share and brand value, focusing on new materials and technologies[24]. - The company has implemented an employee stock ownership plan approved in June 2017, aimed at incentivizing employees[89]. - The company has a structured remuneration decision process involving the board of directors and the remuneration and assessment committee[150]. - The company has a comprehensive organizational structure with clear responsibilities and effective checks and balances among the board, supervisory board, and management[161]. Environmental and Social Responsibility - The company has established a comprehensive safety management system, ensuring that safety issues have a veto power in all processes, and has introduced international safety monitoring standards[108]. - The company has maintained compliance with national and local environmental protection laws, with all emissions below the required standards, and has not faced any penalties for environmental violations[108]. - The company has developed a corporate culture that emphasizes integrity, fairness, and respect for stakeholders, ensuring a good relationship with banks, suppliers, employees, and customers[108]. - The company has established a dedicated environmental management plan and monitoring system, with annual reports on workplace health and safety conditions[108]. Investments and Acquisitions - The company has completed a significant equity investment of CNY 300,000,000.00 in Ningbo Meishan Free Trade Port Area Donghua Silicon Valley, achieving a 100% ownership stake[46]. - The company has ongoing major non-equity investments totaling CNY 1,462,511,007.17, with expected returns of CNY 1,058,420,000.00[48]. - The company has not engaged in any asset or equity acquisitions during the reporting period[94]. - The company has not made any significant external investments or acquisitions during the reporting period[190]. Shareholder and Governance - The company has a significant share repurchase program, with 72,895,057 shares repurchased as of September 19, 2019, which do not participate in profit distribution[77]. - The company’s stock repurchase was conducted in compliance with relevant laws and regulations, ensuring transparency and accountability[128]. - The company has a total of 12 directors and senior management personnel listed with their respective remuneration details[151]. - The company has a total of 1,804 employees, with 1,690 in major subsidiaries and 114 in the parent company[156]. - The company has a long-term commitment to avoid competing businesses, effective since February 20, 2008, and is currently fulfilling this commitment[78].

Financial Performance - The company's operating revenue for Q1 2020 was ¥9,337,175,814.07, a decrease of 32.70% compared to ¥13,874,046,170.79 in the same period last year[3] - Net profit attributable to shareholders was ¥267,546,538.38, down 23.68% from ¥350,570,331.13 year-on-year[3] - Basic earnings per share decreased by 23.32% to ¥0.1697 from ¥0.2213 in the same period last year[3] - Revenue for the reporting period decreased by ¥4.54 billion, a decline of 32.70%, mainly due to reduced sales volume caused by the pandemic[10] - The total comprehensive income for Q1 2020 was ¥276,708,765.20, compared to ¥331,092,549.81 in Q1 2019[38] - The net profit for the first quarter of 2020 was CNY 26,352,087.58, a decrease of 32.4% compared to CNY 38,979,267.73 in the same period last year[40] - Operating profit for the first quarter was CNY 34,998,616.78, down 32.5% from CNY 51,834,856.88 year-over-year[40] Cash Flow and Assets - The net cash flow from operating activities was -¥829,243,437.44, representing a significant decline of 596.09% compared to -¥119,129,606.59 in the previous year[3] - Cash flow from operating activities showed a net outflow of CNY -829,243,437.44, worsening from CNY -119,129,606.59 in the prior year[43] - Cash and cash equivalents at the end of the period were CNY 4,431,469,651.72, down from CNY 6,758,471,449.18 at the end of the previous year[44] - The company's cash and cash equivalents decreased to CNY 6,094,297,763.43 from CNY 8,525,563,671.73 at the end of 2019, representing a decline of approximately 28.5%[29] - The total current assets decreased to CNY 15,876,263,105.37 from CNY 16,833,801,557.36, reflecting a decline of about 5.7%[29] - The company's total liabilities decreased from CNY 18,741,061,586.55 to CNY 17,592,802,079.68, a decline of approximately 6.1%[31] Shareholder Information - The top ten shareholders held a total of 19.72% of shares, with Donghua Petroleum (Yangtze) Co., Ltd. being the largest shareholder with 325,360,000 shares[6] - The company did not engage in any repurchase transactions among the top ten shareholders during the reporting period[7] Government and Subsidies - The company reported government subsidies amounting to ¥17,310,877.11 during the reporting period[4] Projects and Developments - The construction of the Ningbo Phase II and III projects, which include a 660,000 tons/year PDH unit and two 400,000 tons/year PP units, is expected to be completed by the end of Q3 2020[17] - The Maoming Phase I project has a total investment of CNY 1,661,736,000, aiming to build two 1 million tons/year PDH units and four 500,000 tons/year PP units, expected to create nearly 1,000 jobs upon completion in June 2022[19] - The company has begun exporting medical non-woven fabric materials to countries such as India and Vietnam since March, responding to global demand[16] Research and Development - The company’s research and development expenses decreased by ¥1.15 million, a decline of 46.80%, due to reduced R&D spending during the reporting period[10] - Research and development expenses for Q1 2020 were ¥1,301,941.16, down 47.3% from ¥2,447,172.63 in the same period last year[36] - The new propane dehydrogenation technology developed in collaboration with Honeywell UOP has nearly doubled the single-pass conversion rate, reduced energy consumption by 30%, and decreased the footprint of the facility by 25%[20] Financial Management - The company has engaged in wealth management with a total of CNY 156,675,000 in entrusted financial management, with CNY 119,475,000 remaining unexpired[26] - The company reported cash inflow from investment activities of CNY 2,163,976,141.07, compared to CNY 2,097,281,064.67 in the previous year[43] Compliance and Regulations - The company has no reported violations regarding external guarantees or non-operating fund occupation by controlling shareholders during the reporting period[27] - The company did not apply the new revenue and leasing standards for the first quarter of 2020[47] - The first quarter report was not audited[48]

东华能源股份有限公司 2019 年第三季度报告全文 东华能源股份有限公司 2019 年第三季度报告 2019 年 10 月 1 东华能源股份有限公司 2019 年第三季度报告全文 第一节 重要提示 公司董事会、监事会及董事、监事、高级管理人员保证季度报告内容的真 实、准确、完整，不存在虚假记载、误导性陈述或者重大遗漏，并承担个别和 连带的法律责任。 所有董事均已出席了审议本次季报的董事会会议。 公司负责人周一峰、主管会计工作负责人方涛及会计机构负责人(会计主管 人员)代维双声明：保证季度报告中财务报表的真实、准确、完整。 2 东华能源股份有限公司 2019 年第三季度报告全文 第二节 公司基本情况 一、主要会计数据和财务指标 公司是否需追溯调整或重述以前年度会计数据 | --- | --- | --- | --- | --- | |-----------------------------------------------------|--------------------------------|-------------------------|-------------------|-------- ...

Financial Performance - The company's operating revenue for the first half of 2019 was ¥25,818,099,522.83, representing a 21.62% increase compared to ¥21,227,720,473.75 in the same period last year[9]. - The net profit attributable to shareholders of the listed company was ¥633,091,446.18, a decrease of 8.70% from ¥693,397,436.62 in the previous year[9]. - The net profit attributable to shareholders after deducting non-recurring gains and losses was ¥540,576,510.89, down 4.14% from ¥563,940,208.73 year-on-year[9]. - The total revenue for the first half of 2019 reached RMB 25,818,099,522.83, representing a year-on-year increase of 21.62%[27]. - The net profit attributable to the parent company was RMB 63,309.14 million, a decrease of 8.70% compared to the same period last year[25]. - The company reported a significant increase in warehouse service revenue by ¥9,559,500, representing a growth of 135.56% due to the acquisition of Guangxi Tiansheng Port Co., Ltd.[30]. - The company reported a total of CNY 1,701,726.03 in financial assets at the end of the reporting period[41]. - The company reported a total operating cash inflow of CNY 5,451,817,005.14, which is an increase from CNY 4,286,084,436.36 in the previous year, reflecting a growth of approximately 27%[151]. Assets and Liabilities - The total assets at the end of the reporting period were ¥26,024,975,334.25, a decrease of 2.84% from ¥26,786,883,619.04 at the end of the previous year[9]. - The net assets attributable to shareholders of the listed company increased by 5.59% to ¥8,857,591,045.16 from ¥8,388,557,388.69 at the end of the previous year[9]. - Cash and cash equivalents at the end of the reporting period were ¥7,672,826,120.48, accounting for 29.48% of total assets[34]. - The company's total current assets decreased from 16.629 billion RMB at the end of 2018 to 15.368 billion RMB by June 30, 2019, representing a decline of approximately 7.6%[134]. - Total liabilities decreased from 18.365 billion RMB at the end of 2018 to 17.155 billion RMB, a decline of about 6.6%[136]. - The company's total equity increased from 8.422 billion RMB at the end of 2018 to 8.870 billion RMB, an increase of approximately 5.3%[136]. Cash Flow - The net cash flow from operating activities was ¥361,731,392.37, showing a slight increase of 2.83% compared to ¥351,778,440.03 in the same period last year[9]. - The cash flow from operating activities showed a net inflow of CNY 361,731,392.37, slightly up from CNY 351,778,440.03 in the previous year, indicating a marginal increase of about 3%[150]. - The total cash inflow from investment activities was CNY 1,082,988,308.91, significantly lower than CNY 3,601,847,507.46 in the first half of 2018, indicating a decrease of about 70%[151]. - The net cash flow from financing activities was negative CNY 88,925,969.37, contrasting with a positive cash flow of CNY 570,649,173.93 in the same period last year, marking a decline of approximately 115%[152]. Market and Production - The company produced 560,000 tons of propylene and 470,000 tons of polypropylene during the reporting period, with chemical product sales reaching 6.12 billion yuan, a 10.4% increase compared to the same period in 2018[15]. - LPG sales accounted for 75.25% of total revenue, with sales amounting to RMB 19,428,756,378.43, reflecting a growth of 24.90% year-on-year[28]. - The company achieved LPG import volume of approximately 1.43 million tons and re-export sales volume of approximately 4.04 million tons in the first half of 2019[26]. - The company is actively participating in the hydrogen energy industry chain construction in the Yangtze River Delta and Pearl River Delta regions[25]. Strategic Initiatives - The company plans not to distribute cash dividends or issue bonus shares for the reporting period[2]. - The company aims to become the largest supplier of high-purity low-cost hydrogen in China, leveraging its PDH projects and hydrogen production capabilities[23]. - The company is developing a smart LPG terminal IoT platform to enhance safety and efficiency in the LPG retail sector, potentially transforming the competitive landscape[24]. - The company plans to reduce LPG trading volume and gradually exit the LPG international and domestic trading sectors to focus on deep processing and retail[25]. Risk Management - The company faces risks such as intense industry competition, increased market expansion difficulties, rising operating costs, and exchange rate fluctuations[2]. - The company actively manages risks related to macroeconomic fluctuations by expanding its customer base and increasing chemical exports[57]. - The company has established a comprehensive safety management system to mitigate risks associated with the production and storage of flammable products[57]. - The company is exposed to LPG procurement price volatility due to international oil prices and geopolitical factors, and it aims to enhance market analysis and procurement decision-making[58]. Shareholder and Capital Structure - The company has a total share count of 1,649,782,824 shares, with 91.99% being unrestricted shares and 8.01% being restricted shares[91]. - The largest shareholder, Donghua Petroleum (Longjiang) Co., Ltd., holds 19.72% of the shares, totaling 325,360,000 shares, with 218,460,000 shares pledged[99]. - The company has implemented a restricted stock incentive plan, granting a total of 29,820,000 shares at an issuance price of RMB 5.51 per share, increasing registered capital by RMB 29,820,000[66]. - The company has not reported any significant changes in the feasibility of the revised projects[49]. Compliance and Governance - The company has maintained good integrity status, with no significant debts or unfulfilled court judgments reported during the period[65]. - The company has not experienced any major litigation or arbitration matters during the reporting period[62]. - The company has not undergone any bankruptcy restructuring during the reporting period[62]. - The company adheres to the accounting standards and ensures that financial statements reflect the true financial condition and operating results[178].

Financial Performance - The company's operating revenue for Q1 2019 was ¥13,874,046,170.79, representing a 52.03% increase compared to ¥9,125,919,326.47 in the same period last year[3]. - The net profit attributable to shareholders was ¥350,570,331.13, a 2.56% increase from ¥341,817,381.17 year-on-year[3]. - The net profit attributable to shareholders after deducting non-recurring gains and losses was ¥308,477,792.26, showing a slight decrease of 0.48% from ¥309,975,326.82[3]. - Basic earnings per share increased by 4.88% to ¥0.2213 from ¥0.2110 in the same period last year[3]. - The company's operating revenue increased by 474,812.68 million yuan, a growth of 52.03% compared to the same period last year, primarily due to expanded sales volume[12]. - The company reported a significant increase in financing activities, with net cash flow from financing activities rising by 97,519.51 million yuan, a growth of 313.28%[12]. - The total comprehensive income attributable to the parent company was ¥330,312,238.26, compared to ¥304,944,282.05 in the same period last year[30]. Cash Flow and Liquidity - The net cash flow from operating activities improved significantly, with a net outflow of ¥119,129,606.59, a 63.40% reduction from the previous year's outflow of ¥325,478,851.54[3]. - Cash flow from operating activities totaled ¥14,262,190,991.58, significantly higher than ¥9,468,393,341.33 in the prior year[33]. - The company reported a net cash outflow from operating activities of ¥119,129,606.59, an improvement from a net outflow of ¥325,478,851.54 in the same quarter last year[33]. - Cash and cash equivalents increased to CNY 8.67 billion from CNY 8.50 billion, reflecting a rise of approximately 2.0%[19]. - Cash and cash equivalents at the end of the period amounted to CNY 878,681,559.07, down from CNY 990,590,540.27 at the end of the previous period[36]. Assets and Liabilities - Total assets at the end of the reporting period were ¥27,821,322,930.63, up 3.86% from ¥26,786,883,619.04 at the end of the previous year[3]. - The company's total liabilities reached CNY 19.09 billion, up from CNY 18.37 billion, indicating an increase of about 3.9%[20]. - The company's current assets totaled CNY 17.06 billion, up from CNY 16.63 billion, indicating a growth of about 2.6%[19]. - Total liabilities reached CNY 18,365,262,661.35, with current liabilities at CNY 13,752,281,862.67[39]. - The company's total derivative financial assets decreased by 850.42 million yuan, a decline of 34.90%, due to the settlement of forward foreign exchange contracts[10]. Shareholder Information - The total number of ordinary shareholders at the end of the reporting period was 28,036, with the largest shareholder holding 19.72% of the shares[6]. - The net assets attributable to shareholders increased by 3.70% to ¥8,698,668,579.78 from ¥8,388,557,388.69[3]. - The company's equity attributable to shareholders rose to CNY 8.70 billion from CNY 8.39 billion, reflecting an increase of approximately 3.7%[21]. Government and Other Income - The company received government subsidies amounting to ¥36,863,987.16 during the reporting period[4]. - The company's other income rose by 1,960.27 million yuan, a growth of 204.89%, mainly due to increased tax refunds recognized during the reporting period[12]. Expenses and Costs - The company's financial expenses increased by 5,166.45 million yuan, a growth of 57.34%, mainly due to increased short-term financing and reduced foreign exchange gains[12]. - Operating costs for Q1 2019 were ¥13,455,431,594.84, an increase of 54.5% from ¥8,698,718,051.09 in the previous year[26]. - The company reported a decrease in financial expenses to ¥11,172,759.94 from ¥25,628,435.42, indicating improved cost management[29]. Research and Development - Research and development expenses amounted to ¥2,447,172.63, indicating ongoing investment in innovation[26]. - Research and development expenses were not explicitly detailed but are part of the overall operational costs[29]. Changes in Accounting Standards - The company adopted new financial accounting standards effective January 1, 2019, adjusting "available-for-sale financial assets" to "other equity instrument investments" and "financial assets at fair value through profit or loss" to "trading financial assets"[44].

Financial Performance - The company's operating revenue for 2018 was CNY 48,942,864,332.39, representing a 49.77% increase compared to CNY 32,678,284,770.73 in 2017[11]. - The net profit attributable to shareholders for 2018 was CNY 1,078,441,579.13, a slight increase of 1.45% from CNY 1,062,978,080.85 in 2017[11]. - The net profit after deducting non-recurring gains and losses was CNY 865,202,344.36, which is a decrease of 4.25% compared to CNY 903,623,404.97 in 2017[11]. - The net cash flow from operating activities for 2018 was CNY 2,402,702,138.77, an increase of 12.26% from CNY 2,140,332,131.01 in 2017[11]. - The total assets at the end of 2018 were CNY 26,786,883,619.04, reflecting a 19.61% increase from CNY 22,394,424,651.68 at the end of 2017[11]. - The net assets attributable to shareholders at the end of 2018 were CNY 8,388,557,388.69, up 10.04% from CNY 7,623,527,825.82 at the end of 2017[11]. - The basic earnings per share for 2018 was CNY 0.6642, a 1.22% increase from CNY 0.6562 in 2017[11]. - The diluted earnings per share for 2018 was CNY 0.6623, which is a 1.36% increase from CNY 0.6534 in 2017[11]. - The company reported a non-recurring gain of CNY 213,239,234.77 in 2018, an increase from CNY 159,354,675.88 in 2017, reflecting a significant rise in non-operating income[15]. - In 2018, the total revenue reached approximately 48.94 billion yuan, representing a year-on-year growth of 49.77%[22]. - The net profit attributable to shareholders was 1.08 billion yuan, an increase of 1.45% compared to the previous year[22]. Cash Flow and Investments - The company’s cash and cash equivalents increased by CNY 4.145 billion compared to the beginning of the period, primarily due to increased trade scale[19]. - The company’s inventory rose by CNY 710 million, attributed to increased procurement during the reporting period[19]. - The company’s receivables increased by CNY 844 million, driven by higher sales revenue during the reporting period[19]. - The net cash flow from investment activities improved significantly, reaching CNY 414,585,665.86, a 121.68% increase year-on-year[41]. - The total investment amount for the reporting period reached ¥1,509,879,170.95, a significant increase of 263.57% compared to ¥415,291,328.32 in the previous year[48]. - The company completed a 100% acquisition of Guangxi Tiansheng Port Co., Ltd. for ¥506,600,000.00, with an expected return of ¥30,559,290.2[48]. - The company invested ¥429,126,402.90 in the Ningbo Propane Resource Comprehensive Utilization Project, with a cumulative actual investment of ¥523,482,111.80[50]. Market Position and Operations - The company achieved a trade volume of approximately 10.7 million tons in 2018, positioning itself among the top in the global LPG trade[17]. - The company has established itself as the largest LPG importer and distributor in China for six consecutive years, maintaining its leading position in the industry[17]. - The company is actively developing hydrogen energy solutions, with the first commercial hydrogen refueling station in Jiangsu province now operational[18]. - The company is focusing on enhancing its international trade capabilities through various strategies, including expanding import and re-export trade[22]. - The company aims to strengthen its supply chain by integrating upstream, midstream, and downstream operations, enhancing resource utilization[21]. - The company is committed to innovation in high-value products and new catalysts, driving sustainable development in the LPG deep processing industry[21]. Risks and Challenges - The company faces risks including intense industry competition, increased operational costs, and challenges in market expansion[2]. - The company’s gross profit margin for 2018 was impacted by a significant increase in operating costs, with costs for liquefied petroleum gas sales rising by 58.41% to ¥35,529,918,524.39[31]. - The company has identified approximately 300 safety hazards and completed rectifications on time, enhancing safety management practices[26]. Research and Development - The company’s R&D expenses for 2018 were ¥13,092,777.89, reflecting the establishment of a dedicated R&D center[37]. - The number of R&D personnel increased to 5, representing 0.30% of the total workforce[40]. - The company applied for 3 national invention patents related to new materials in 2018[39]. Corporate Governance and Compliance - The company has not experienced significant changes in asset measurement attributes during the reporting period[49]. - The company has not reported any significant accounting errors that require retrospective restatement during the reporting period[82]. - The company has no significant discrepancies with the regulatory requirements set by the China Securities Regulatory Commission regarding corporate governance[167]. - The company has established a complete environmental management system, achieving compliance with national and local environmental protection laws, with all pollutant emissions meeting standards[124]. Shareholder and Dividend Information - The company plans to distribute a cash dividend of CNY 0.37 per 10 shares, totaling CNY 402,933,291.91 for the year 2018[3]. - The cash dividend amount in 2018 was CNY 59,103,428.78, accounting for 5.48% of the net profit attributable to ordinary shareholders[74]. - The total cash dividend, including other methods, reached CNY 462,036,720.69, which is 42.84% of the net profit attributable to ordinary shareholders[74]. - The company has significant capital expenditure plans and aims for a minimum cash dividend ratio of 20% during profit distribution[75]. Employee and Management Structure - The company has a total of 1,620 employees, with 1,031 in production, 91 in sales, and 191 in technical roles[160]. - The company has implemented a labor contract system and provides various social security benefits, including medical and pension insurance[161]. - The company has a training program that includes professional and corporate culture training to enhance employee efficiency and loyalty[163]. Future Outlook and Strategic Goals - In 2019, the company aims to become the world's leading integrated operator of alkane resources and secure global pricing power for LPG[66]. - The company plans to establish itself as the largest propane supply chain producer in China and the largest global producer of polyolefin new materials, with a focus on projects in Zhangjiagang and Ningbo[66]. - The company plans to continue executing the 2017 restricted stock incentive plan as per the established guidelines[135].

东华能源股份有限公司 2018 年第三季度报告正文 证券代码：002221 证券简称：东华能源 公告编号：2018-133 东华能源股份有限公司 2018 年第三季度报告正文 1 东华能源股份有限公司 2018 年第三季度报告正文 第一节 重要提示 公司董事会、监事会及董事、监事、高级管理人员保证季度报告内容的真 实、准确、完整，不存在虚假记载、误导性陈述或者重大遗漏，并承担个别和 连带的法律责任。 所有董事均已出席了审议本次季报的董事会会议。 公司负责人周一峰、主管会计工作负责人方涛及会计机构负责人(会计主管 人员)代维双声明：保证季度报告中财务报表的真实、准确、完整。 2 东华能源股份有限公司 2018 年第三季度报告正文 第二节 公司基本情况 一、主要会计数据和财务指标 公司是否需追溯调整或重述以前年度会计数据 对公司根据《公开发行证券的公司信息披露解释性公告第 1 号——非经常性损益》定义界定的非经常性损益项目，以及把《公 开发行证券的公司信息披露解释性公告第 1 号——非经常性损益》中列举的非经常性损益项目界定为经常性损益的项目，应 说明原因 □ 适用 √ 不适用 □ 是 √ 否 | | 本报告期末 ...