Company Overview - Zhejiang Dazhongnan Co., Ltd. has focused on the film market since its inception, undergoing three significant transformations, including the launch of BOPET film production in 2006 and entering the high-tech capacitor film sector in 2009 through the acquisition of Ningbo Wanxiang [3][4]. - The company has raised approximately ¥1.9 billion through two private placements in 2010 and 2011 to expand into new energy and materials sectors [3]. Core Competitive Advantages - The company boasts a production capacity exceeding 150,000 tons, with a diverse and high-quality product range [3]. - It has invested over ¥60 million in R&D, establishing a joint laboratory with the Chinese Academy of Sciences and Zhejiang University [3][4]. - Dazhongnan's brand recognition includes "Dazhongnan Packaging," a well-known brand in Zhejiang, and "Green Sea," a famous trademark in China [4]. Strategic Acquisitions - The acquisition of YouTang Network aligns with national policies encouraging mergers and acquisitions, enhancing the company's diversification strategy [4][5]. - YouTang Network's strengths include a strong market presence in mobile gaming and a capable management team with extensive industry experience [5]. Product Development - The company produces 60,000 tons of functional packaging films annually, with ongoing development of new products to enhance technical content and market competitiveness [6]. - It has successfully developed various specialized films, including ultra-thin CPP films and capacitor films, with production capacity reaching 12,000 tons [6][7]. Future Development Strategy - The company aims to differentiate its traditional products in a competitive market while transitioning towards high-tech sectors like new energy and materials [8]. - The strategic focus includes maintaining core business stability, leveraging new energy and materials as a growth pillar, and integrating cultural industries with the economy [8].

Group 1: Traditional Business Performance - The company's traditional business profits have been declining due to a sluggish market demand and intense competition, leading to significant price drops [1] - To improve profit margins, the company is focusing on product differentiation and enhancing the added value of traditional products, such as accelerating the development of new products like double-sided matte films [2] Group 2: New Product Development - The company has successfully achieved stable mass production of special products, gaining recognition from downstream customers [2] - The company is actively developing new products to gradually improve the operational situation of its traditional business [2] Group 3: Lithium Battery Project - The subsidiary, Green Sea New Energy, currently has a daily production capacity of 20,000 lithium batteries, with trial production of EV2.2Ah batteries reaching 60,000 units [3] - The main customers for these batteries are located in the Yangtze River Delta and Guangdong regions [3] Group 4: Market Strategy and Future Plans - The company is committed to maintaining its plastic packaging film business while actively pursuing industrial transformation and upgrading, shifting towards high-tech fields like new energy and new materials [4] - The company is also seeking diversification strategies and suitable investment opportunities to optimize its existing business and enhance its core competitiveness [4] Group 5: Compliance and Disclosure - The company adheres strictly to information disclosure regulations, ensuring that all disclosures are truthful, accurate, complete, timely, and fair, with no significant undisclosed information leaks [5]

Group 1: Lithium Battery Business - The company currently produces 3,000 units of 18650 cylindrical batteries per day, with a target to reach 100,000 units per day by May next year [1][2] - The production capacity of 300 million ampere-hours corresponds to 300,000 units per day, while 750 million ampere-hours corresponds to 800,000 units per day [2] - The current price for digital batteries is approximately 4.7-4.8 yuan per unit, with a cost estimate of 4.5-4.6 yuan per unit [2] Group 2: Battery Separator Production - The lithium battery separator is currently only partially in production, primarily for the digital battery sector [3] - The company is adjusting its production process to align with the shift towards wet coating technology for power batteries [3] Group 3: Game Development Business - The acquisition of YouTang Network was driven by industry growth potential and the capabilities of its management team [3] - Current game titles such as "The Last Days," "EVA: Soul Liberation," and "Pocket Monster" are performing better than expected [3] Group 4: Optical Film Project - The company has two optical film production lines, one imported from Germany and another from Japan, with the German line expected to start trial production in mid-December 2015 [4] - Adjustments have been made to key equipment configurations to address common issues [4] Group 5: Traditional Film Business - The traditional film business includes three segments: ultra-thin capacitor film, BOPET film, and CPP packaging film, with the latter facing challenges due to price drops [4][5] - The company aims to stabilize its capacitor film production while exploring high-tech plastic packaging films and diversifying into lithium battery separators and optical films [5]

Industry Overview - The traditional plastic film packaging industry is facing overcapacity and declining profit margins, prompting the company to enhance management, reduce production costs, and improve product quality [1] - The company has established a stable market share and good reputation in the traditional plastic film sector prior to its transformation and acquisition of YouTang Network [1] New Product Development - The company has launched three major projects: lithium battery separators, optical films, and high-temperature ultra-thin capacitor films [2] - The lithium battery separator project is in the trial production phase, with expected operational readiness by June 30, 2015, and an annual production capacity of 50,000 tons [2] - The optical film project includes two production lines, with one line expected to begin trial production by October 31, 2015, and the other by June 30, 2016, with an annual capacity of 8,000 tons [2] - The high-temperature ultra-thin capacitor film project has one line already in operation since March 2014, while the second line is in trial production [3] Battery Project Progress - The company is extending its lithium battery ion membrane business into downstream applications, with 3C lithium batteries entering small-scale supply [3] - The development of the more demanding power battery project is still in the R&D and testing phase [3] YouTang Network Operations - The game "The Great Master" launched in mainland China at the end of 2014, with operational data exceeding expectations [3] - The game has also launched in Taiwan, South Korea, Singapore, and Malaysia in 2015, with performance meeting forecasts [3] - Future product launches include several titles currently in development, with potential changes during the implementation process [3] Future Development Strategy - The company aims to differentiate traditional products in a highly competitive market while maintaining its core business [4] - The strategy includes focusing on new energy materials as a key pillar, leveraging cultural gaming to drive growth, and seeking new economic and profit growth points [4]

Group 1: Market Performance and Challenges - The demand for traditional capacitor films has declined, particularly in the home appliance market, while the demand for high-voltage power applications remains strong [1] - The decline in performance is attributed to two main reasons: slow domestic market recovery and overproduction in the film industry, leading to decreased profitability [1] - The company is undergoing a transition period, with existing projects not meeting expected capacity and efficiency [2] Group 2: Product Development and Future Prospects - The company has introduced two production lines for optical films, with one line already in trial production since May 31, 2016, and the other currently being installed [2] - The lithium battery separator project, with an annual production capacity of 60 million square meters, has two production lines operational, and products are entering the market [2] - Profit forecasts remain uncertain due to market volatility, with specific predictions to be provided in regular company reports [2] Group 3: Competitive Advantages and Strategic Shifts - The company is leveraging its experience in traditional film production to transition into high-tech fields such as new energy and new materials [2] - Collaboration with educational institutions and research organizations is being strengthened to enhance R&D in functional membrane materials [3] - The acquisition of YouTang Network aims to diversify operations and explore new profit growth points, with expectations for profit increases in the second half of the year [3]

Group 1: Lithium Battery Division - The company has partially launched lithium battery separators, primarily used in digital battery applications [1] - The current production capacity for batteries is between 60,000 to 80,000 units per day, with a focus on improving quality [3] - The 2.2AH power battery has completed trial production and passed national quality inspections [2] Group 2: Optical Film Production - Optical films are mainly used in high-end LCD displays, with two production lines in operation [2] - One production line, imported from Germany, is set to commence production by June 30, 2016 [2] - The second line, equipped with Japanese technology, is currently in the installation phase [2] Group 3: Nanofiber Membrane Development - The nanofiber membrane project is under development, with samples produced and currently undergoing testing [2] - The project is led by a provincial key research institute, indicating a high level of technical complexity [2] Group 4: Corporate Strategy and R&D - The company aims to expand its focus on new materials and renewable energy, enhancing its R&D investments [3][4] - Collaborations with institutions like the Chinese Academy of Sciences and Zhejiang University are established for advanced polymer research [4] - Plans for mergers and acquisitions are in place to strengthen the company's market position and diversify operations [4] Group 5: Financial and Regulatory Updates - The company is awaiting regulatory approval for its capital increase project, with a focus on timely implementation post-approval [5] - The 2015 profit distribution plan has been approved and will be executed within two months of the shareholders' meeting [5]

Company Overview - Zhejiang Dazhongnan Co., Ltd. is engaged in the research, production, and sales of plastic film products and new energy materials, including BOPP film, BOPET film, and lithium batteries [1] - The company has three major production bases located in Zhuji, Hangzhou, and Ningbo, with over 120 R&D personnel [1] - The company has diversified its operations by fully acquiring YouTang Network and is focusing on innovation and industry-academia-research collaboration [1] Production Capacity and Projects - The optical film project includes two production lines: one imported from Germany, operational since June 30, 2016, and another from Japan, currently in installation [2] - The lithium battery project has seen an investment of CNY 84.24 million, with a progress rate of 10.59% and trial production of 2.2AH batteries completed [2] - Daily production capacity for batteries is currently 40,000 to 60,000 units, with a target of 80,000 to 100,000 units [2] Film Business Performance - The film business consists of three segments: - Ningbo produces ordinary and high-temperature ultra-thin capacitor film with an annual capacity of 18,000 tons, ranking among the top in China [2] - Hangzhou produces BOPET film with an annual capacity of 90,000 tons, showing significant performance improvement [2] - Zhuji produces CPP film with an annual capacity of 37,000 tons, leading the industry [2] Research and Development - The company emphasizes collaboration with universities and research institutions for high-performance polymer film technology [2] - The development of nanofiber membranes is ongoing, with pilot samples produced and currently undergoing testing [2] - Key testing focuses for lithium batteries include lifespan and safety, with current standards being met [2] Corporate Governance - The company adheres to strict information disclosure regulations, ensuring the accuracy and completeness of disclosed information [3]

本公司及董事会全体成员保证信息披露的内容真实、准确、完整，没有虚假记载、误导性陈述或重 大遗漏。 重要内容提示： 1.董事会、监事会及董事、监事、高级管理人员保证季度报告的真实、准确、完整，不存在虚假记载、 误导性陈述或重大遗漏，并承担个别和连带的法律责任。 2.公司负责人、主管会计工作负责人及会计机构负责人(会计主管人员)声明：保证季度报告中财务信息 的真实、准确、完整。 浙江大东南股份有限公司 2022 年第三季度报告 证券代码：002263 证券简称：大东南 公告编号：2022-023 浙江大东南股份有限公司 2022 年第三季度报告 公司是否需追溯调整或重述以前年度会计数据 □是 否 | | 本报告期 | 本报告期比上年同期 | 年初至报告期末 | 年初至报告期末比上 | | --- | --- | --- | --- | --- | | | | 增减 | | 年同期增减 | | 营业收入（元） | 372,161,560.02 | -20.62% | 1,210,006,589.06 | -3.66% | | 归属于上市公司股东 | 41,575,811.74 | -32.69% | 98,325, ...

Financial Performance - The company's operating revenue for the first half of 2022 was ¥837,845,029.04, representing a 6.44% increase compared to ¥787,118,001.76 in the same period last year[20]. - The net profit attributable to shareholders decreased by 39.10% to ¥56,750,019.01 from ¥93,192,631.23 year-on-year[20]. - The net profit after deducting non-recurring gains and losses fell by 43.58% to ¥50,882,459.31 compared to ¥90,177,522.45 in the previous year[20]. - Basic earnings per share decreased by 40.00% to ¥0.03 from ¥0.05 year-on-year[20]. - Operating costs increased by 14.25% to ¥709,028,520.42 from ¥620,620,434.31, impacting overall profitability[37]. - The gross margin for the plastic packaging industry was reported at 15.37%, reflecting a decrease of 5.78% compared to the previous year[41]. - The total profit for the first half of 2022 was ¥68,108,935.72, a decline of 33.8% compared to ¥102,852,528.05 in the first half of 2021[121]. - The company's operating profit for the first half of 2022 was ¥67,343,230.02, a decrease of 34.5% from ¥102,813,692.52 in the first half of 2021[121]. Cash Flow and Liquidity - The net cash flow from operating activities increased by 34.70% to ¥47,974,285.26 from ¥35,614,862.18 in the same period last year[20]. - The company reported a substantial increase in net cash and cash equivalents, rising by 215.60% to ¥92,473,210.42 from ¥29,300,614.86, mainly due to increased financing activities[37]. - The company's cash and cash equivalents increased to ¥1,041,725,140.77 as of June 30, 2022, up from ¥943,831,930.35 at the beginning of the year, representing an increase of approximately 10.4%[112]. - The company reported a net cash inflow from financing activities of ¥46,642,859.21, a significant improvement from a net outflow of ¥1,666,896.89 in the first half of 2021[128]. - The company's cash flow from operating activities was positively impacted by an increase in sales revenue, with cash received from sales reaching ¥759,342,099.54, up from ¥732,821,123.33 in the previous year[126]. Assets and Liabilities - Total assets at the end of the reporting period were ¥2,979,872,847.76, a 0.62% increase from ¥2,961,545,794.85 at the end of the previous year[20]. - The total current assets amounted to ¥1,568,198,621.90, an increase from ¥1,494,610,261.03, representing a growth of approximately 4.9%[112]. - Current liabilities totaled CNY 214,181,075.74, down 14.4% from CNY 249,910,855.14 at the start of the year[114]. - The company's fixed assets decreased from CNY 1,392,048,083.95 at the beginning of the year to CNY 1,336,665,968.50 by June 30, 2022, reflecting a decline of approximately 4%[113]. Research and Development - The company is focusing on high-end new materials, increasing R&D investment, and expanding differentiated product output to enhance market competitiveness[33]. - Research and development expenses decreased by 8.47% to ¥29,897,481.48 from ¥32,665,584.50, indicating a potential reduction in innovation spending[37]. - The company has filed for 44 national patents, indicating a strong commitment to innovation and technology advancement[34]. Market and Competition - The company faces intensified market competition in the packaging materials industry, particularly in the polyester film sector, which may lead to a decline in net profit[54]. - The company is actively expanding its market presence and enhancing customer relationships to drive growth[33]. - Domestic sales (excluding Hong Kong and Taiwan) accounted for 93.92% of total revenue, increasing by 7.40% year-on-year[41]. Safety and Compliance - Safety production risks are present due to the nature of the company's operations involving high temperatures and automated equipment[55]. - The company emphasizes safety management and has established a safety committee to oversee safety protocols and reduce the likelihood of accidents[55]. - The company has not reported any significant environmental violations or penalties during the reporting period[64]. Shareholder Information - The company plans not to distribute cash dividends or issue bonus shares[5]. - Total ordinary shares held by shareholders at the end of the reporting period reached 85,756,000[98]. - The largest shareholder, Zhuji Water Affairs Group Co., Ltd., holds 27.91% of the shares, totaling 524,158,020 shares[99]. Legal Matters - The company faced a lawsuit involving a debt of CNY 22,999,142.87, with a ruling requiring the company to bear half of the compensation responsibility[76]. - The company reported a litigation amount of 2.14 million yuan due to false statements, requiring compensation to affected investors[77]. Financial Reporting - The semi-annual financial report has not been audited[72]. - The financial statements were prepared in accordance with the accounting standards issued by the Ministry of Finance, ensuring compliance and accuracy[150]. - The financial report was approved by the board of directors on August 23, 2022, ensuring governance and oversight[149].

Financial Performance - The company's operating revenue for 2021 was ¥1,673,681,589.09, representing a 10.91% increase compared to ¥1,509,076,837.25 in 2020[22]. - The net profit attributable to shareholders for 2021 was ¥243,263,795.22, a 37.49% increase from ¥176,937,119.86 in 2020[22]. - The net profit attributable to shareholders after deducting non-recurring gains and losses was ¥236,352,218.41, up 37.42% from ¥171,987,295.57 in 2020[22]. - Basic earnings per share for 2021 increased by 44.44% to ¥0.13 from ¥0.09 in 2020[22]. - The diluted earnings per share increased by 44.44% to CNY 0.13 from CNY 0.09 in the previous year[23]. - The weighted average return on equity rose to 9.63%, up from 7.64% in the previous year, an increase of 1.99%[23]. - Total assets at the end of 2021 were CNY 2,961,545,794.85, representing a 9.06% increase from CNY 2,715,614,830.53 at the end of 2020[23]. - Net assets attributable to shareholders increased by 10.11% to CNY 2,648,331,061.01 from CNY 2,405,067,265.79 in the previous year[23]. - The company reported a net profit attributable to shareholders of CNY 88,306,107.55 in Q4 2021, a significant increase compared to previous quarters[26]. - The company achieved operating revenue of CNY 1,673.68 million, a year-on-year increase of 10.91%[47]. Cash Flow and Financial Position - The net cash flow from operating activities decreased by 45.50% to ¥179,584,641.75 from ¥329,522,138.38 in 2020[22]. - Operating cash inflow decreased by 2.20% to ¥1,484,781,243.02, while cash outflow increased by 9.80% to ¥1,305,196,601.27, resulting in a net cash flow of ¥179,584,641.75, down 45.50% year-on-year[69]. - Investment cash inflow dropped significantly by 99.90% to ¥90,217.88, primarily due to the absence of cash recovery from investments compared to the previous year[71]. - Financing cash inflow rose by 15.97% to ¥257,850,761.98, with net cash flow from financing activities increasing by 84.74% to ¥52,060,647.83[70]. - Cash and cash equivalents increased by ¥220,607,981.49, but the net increase decreased by 48.10% compared to the previous year[71]. - Total assets at the end of 2021 amounted to ¥943,831,930.35, with cash and cash equivalents accounting for 31.87% of total assets, up from 26.62% at the beginning of the year[72]. - Inventory increased by 35.43% to ¥226,882,943.89, attributed to year-end raw material stocking[72]. - Short-term borrowings rose by 39.83% to ¥41,512,401.20, reflecting increased financing needs[73]. - The company reported a significant increase in accounts receivable, which rose to ¥95,238,373.30, representing 3.22% of total assets[72]. Business Strategy and Market Position - The company has shifted its main business focus from traditional plastic films to new materials, aligning with national strategic development plans[33]. - The high-function film industry is expected to grow at over 20% annually from 2021 to mid-2023, indicating strong market potential[33]. - The company is positioned in the new materials industry, which is expected to have a market scale of trillions in the future[38]. - The company aims to enhance its core competitiveness by focusing on high-tech research and development, production, and sales of films and new materials, emphasizing innovation and energy optimization[83]. - In 2022, the company plans to accelerate the development of differentiated products and improve market competitiveness, with a focus on technical innovation and quality supervision[84]. - The company is actively pursuing market expansion strategies, including potential mergers and acquisitions to strengthen its competitive position[99]. Research and Development - The company has developed a joint laboratory with the Chinese Academy of Sciences and Zhejiang University to enhance its R&D capabilities[40]. - Research and development expenses increased by 28.55% to ¥37,823,120.42 compared to the previous year[64]. - R&D investment increased by 28.55% to ¥37,823,120.51 in 2021, representing 2.26% of operating revenue, up from 1.95% in 2020[67]. - The company completed several new product development projects, including MLCC release polyester film and new matte high elongation polyester film, aimed at enhancing product competitiveness[65]. - The company successfully developed ultra-thin capacitor films with a thickness of 2.0 microns, meeting or exceeding national standards[66]. Risk Management - The company emphasizes the importance of risk awareness for investors regarding operational goals and performance commitments[6]. - The company has detailed potential risk factors affecting future development in the management discussion section[6]. - The company faces risks from intensified market competition, which may lead to decreased net profits and impact operational performance[86]. - Fluctuations in raw material prices due to global economic conditions and oil supply-demand changes pose a risk to the company's profitability and procurement strategies[86]. - The company emphasizes safety production management to mitigate risks associated with high-temperature production processes and automated equipment[87]. Corporate Governance - The company maintains a complete and independent operational structure, ensuring no interference from controlling shareholders in decision-making processes[92]. - The company has established a robust internal control system and governance structure, complying with relevant laws and regulations[90]. - The board of directors includes specialized committees such as the audit, nomination, compensation, and strategy committees to enhance decision-making[90]. - The company has a clear and independent business operation plan, with self-sufficient financial accounting and personnel management systems[92]. - The company emphasizes fair and timely information disclosure to protect the rights of all shareholders[91]. - The governance structure of the company aligns with legal and regulatory requirements, ensuring no significant discrepancies[91]. Shareholder Relations - The company conducted multiple investor communications, including a conference call on December 1, 2021, with participation from nine institutional investors discussing operational strategies and future plans[88]. - The annual shareholder meeting on May 20, 2021, had an investor participation rate of 28.02%[94]. - The first extraordinary shareholder meeting in 2021 was held on September 8, with a participation rate of 27.96%[94]. - The company has not reported any objections from directors regarding company matters during the reporting period[110]. Legal Matters - The company is involved in a lawsuit concerning a loan agreement amounting to 36 million yuan (approximately $5.5 million) with Ningbo Haodao Xinzhi Investment Partnership[144]. - The first-instance judgment ruled against the claims of Ningbo Haodao, stating that the guarantee was ineffective, but the company must bear 50% of the guarantee fault compensation responsibility[146]. - The total amount involved in the litigation is 41.97 million yuan (approximately $6.4 million), which has not formed a provision for liabilities[145]. - The company has actively pursued legal action to confirm the invalidity of the guarantee contract related to the loan of 24 million yuan (approximately $3.7 million)[148]. - The litigation process has been ongoing since 2018, with multiple appeals filed by both parties[146]. Employee Management - The total number of employees at the end of the reporting period was 722, with 102 in the parent company and 620 in major subsidiaries[117]. - The professional composition includes 406 production personnel, 29 sales personnel, 184 technical personnel, 19 financial personnel, and 84 administrative personnel[117]. - The company emphasizes the importance of employee training, establishing a systematic training framework focusing on new employee onboarding and skill enhancement[120]. - The company aims to provide competitive and fair compensation, including benefits such as social insurance and team activities to attract and retain talent[119]. Environmental and Social Responsibility - The company emphasizes social responsibility and aims to build trust with investors while pursuing harmonious development with society[130]. - The company has not conducted any poverty alleviation or rural revitalization work during the reporting year[133]. - There were no administrative penalties related to environmental issues during the reporting period, and the company is not classified as a key pollutant discharge unit[130].