Financial Performance - The company's operating revenue for 2021 was ¥3,438,539,047.58, representing a 49.78% increase compared to ¥2,295,745,792.80 in 2020[17] - The net profit attributable to shareholders in 2021 was ¥171,634,188.69, a significant increase of 121.59% from ¥77,455,520.89 in 2020[17] - The net profit after deducting non-recurring gains and losses was ¥170,212,638.81, which is a 243.73% increase from ¥49,519,517.01 in 2020[17] - The basic earnings per share for 2021 was ¥0.3576, up 121.56% from ¥0.1614 in 2020[17] - The total assets at the end of 2021 were ¥2,795,621,357.39, an increase of 11.07% from ¥2,517,077,655.44 at the end of 2020[17] - The net assets attributable to shareholders at the end of 2021 were ¥1,506,884,863.34, reflecting a 14.62% increase from ¥1,314,654,276.08 at the end of 2020[17] - The net cash flow from operating activities for 2021 was ¥176,198,161.50, a slight increase of 2.87% from ¥171,289,842.94 in 2020[17] - The weighted average return on equity for 2021 was 12.20%, up from 6.07% in 2020[17] - The company reported a quarterly revenue of ¥951,008,510.21 in Q4 2021, with a net profit of ¥29,286,634.63 for the same quarter[21] - The company reported a net loss of 8,357,754.74 in non-current asset disposal, with a fixed asset net loss of 380,709.22 for the current period[22] Market and Industry Insights - The company achieved a significant increase in revenue and production volume, ranking second among members of the China Rubber Industry Association's Carbon Black Branch[27] - The carbon black industry experienced stable growth in market demand, with a notable increase in revenue and profitability in the first three quarters of 2021, despite a decline in the fourth quarter due to reduced tire market demand and rising raw material prices[27] - The company is focusing on expanding its market by developing high-grade conductive carbon black and pigment carbon black, aiming to reduce reliance on imports[27] - The company’s main business includes the production and sales of carbon black, white carbon black, and coal tar products, positioning itself as a key player in the domestic carbon black industry[30] - The company’s carbon black products are primarily used in the rubber industry, particularly in tire production, which significantly contributes to the automotive industry[31] Research and Development - The company has invested a total of 143.64 million yuan in research and development during the reporting period, with 79 patents granted, including 11 invention patents[37] - The company has transitioned high-dispersion white carbon black from the research phase to mass production, achieving breakthroughs in this project[38] - The company is developing special carbon black products, including pigment carbon black and conductive carbon black, which are expected to enhance product offerings and market competitiveness[60] - The company has implemented a strategic shift towards smart manufacturing, leveraging technologies such as big data and AI for operational efficiency[42] Environmental and Sustainability Initiatives - The company invested 1.5 billion yuan in pollution prevention facilities by the end of 2021, achieving ultra-low emission standards for pollutants[162] - The company’s wastewater treatment facility has a reuse rate of over 95%, significantly reducing freshwater consumption[161] - The company has implemented a comprehensive air pollution control strategy, including low-nitrogen combustion technology and SCR treatment processes[162] - The company has a carbon emission control strategy, aiming to reduce direct and indirect carbon emissions through innovative environmental technologies and green procurement strategies[167] - The company emphasizes sustainable development and social responsibility as part of its long-term strategy[81] Corporate Governance - The company has established a modern corporate governance structure to protect the rights of all shareholders, particularly minority shareholders[171] - The board of directors consists of 9 members, including 3 independent directors, accounting for one-third of the total board[88] - The company maintains independence from its controlling shareholder in business, personnel, assets, organization, and finance, ensuring autonomous operations[92] - The company has implemented a strict information disclosure management system, ensuring timely and accurate information dissemination to investors[91] - The company emphasizes cash dividend distribution to shareholders, reflecting its commitment to providing reasonable returns on investment[173] Employee Management and Development - The total number of employees at the end of the reporting period is 1,349, with 977 in production, 67 in sales, 134 in technology, 18 in finance, and 153 in administration[130] - The company has implemented a new comprehensive compensation system, with fixed salary accounting for 54%, variable salary for 26%, and other allowances for 20%[131] - In 2021, the company planned 44 training sessions with a completion rate of 100%, training 12,424 employees at a cost of 285,055.94 yuan[132] - The company has established a training platform and equipped new training rooms to enhance employee skill development[132] - The company has a structured salary framework divided into six sequences and sixteen levels, promoting career development[131] Financial Management and Risk - The company maintains a debt-to-asset ratio of 46.10%, indicating a stable financial position but still facing potential repayment risks[84] - The company has not engaged in any major asset or equity sales during the reporting period, indicating stability in its asset management[75] - The company has not utilized any fundraising during the reporting period, reflecting a conservative financial strategy[74] - The company has a comprehensive internal control system to enhance risk prevention and control capabilities[172] Shareholder Engagement - The annual shareholders' meeting had a participation rate of 28.13% on May 11, 2021, with all proposals approved[99] - The first extraordinary shareholders' meeting of 2021 had a participation rate of 22.40% on June 25, 2021, with all resolutions passed[99] - The company has established a performance evaluation and incentive mechanism for senior management, linking their compensation directly to performance metrics[145] Safety and Compliance - The company has implemented a comprehensive safety management system, establishing 58 safety management regulations and 31 safety operation procedures[187] - The company has set a safety management goal of zero major accidents and zero occupational disease incidence for 2021, successfully achieving these targets[187] - The company conducts regular safety training, requiring new employees to undergo at least 72 hours of training and existing employees to complete a minimum of 20 hours annually[192] - The company has developed emergency response plans and conducts at least one comprehensive or specialized drill each year to improve emergency response skills[193]

龙星化工股份有限公司 2021 年第三季度报告 一、主要财务数据 证券代码：002442 证券简称：龙星化工 公告编号：2021-051 龙星化工股份有限公司 2021 年第三季度报告 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。 3.第三季度报告是否经过审计 □ 是 √ 否 (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 □ 是 √ 否 | | 本报告期 | 本报告期比上年同期增 | 年初至报告期末 | 年初至报告期末比上年 | | --- | --- | --- | --- | --- | | | | 减 | | 同期增减 | | 营业收入（元） | 809,149,541.57 | 31.75% | 2,487,530,537.37 | 57.16% ...

Financial Performance - The company's operating revenue for the first half of 2021 was CNY 1,678,380,995.80, representing a 73.28% increase compared to CNY 968,616,510.39 in the same period last year[22]. - The net profit attributable to shareholders was CNY 123,299,040.55, a significant increase of 4,586.51% from CNY 2,630,934.23 in the previous year[22]. - The net cash flow from operating activities was CNY 26,628,392.70, improving by 119.01% compared to a negative cash flow of CNY -140,043,907.05 in the same period last year[22]. - Basic earnings per share rose to CNY 0.2569, up 4,570.91% from CNY 0.0055 in the previous year[22]. - The company reported a significant increase in net profit after deducting non-recurring gains and losses, reaching CNY 124,813,278.05, a 9,418.91% increase from CNY 1,311,214.31 in the previous year[22]. - The weighted average return on net assets was 8.94%, up from 0.21% in the previous year, indicating improved profitability[22]. - The company achieved a revenue of 1,678.38 million yuan, a 73.28% increase compared to the same period last year, with a net profit of 123.30 million yuan, up 4586.51% year-on-year[35]. - Domestic sales revenue increased by 74.79% year-on-year, while international sales revenue grew by 58.20%[35]. Assets and Liabilities - Total assets at the end of the reporting period were CNY 2,710,587,803.34, an increase of 7.69% from CNY 2,517,077,655.44 at the end of the previous year[22]. - The company's net assets attributable to shareholders increased by 9.93% to CNY 1,445,170,403.45 from CNY 1,314,654,276.08 at the end of the previous year[22]. - The company's total liabilities included short-term borrowings of ¥540,081,189.55, which accounted for 19.92% of total liabilities[50]. - The company's total liabilities rose to CNY 1,265,417,399.89 from CNY 1,202,423,379.36, marking an increase of approximately 5.24%[152]. - The total current liabilities amounted to CNY 1,256,206,397.14, compared to CNY 1,192,129,376.52, indicating an increase of approximately 5.37%[152]. Research and Development - The company invested 45.97 million yuan in research and development during the reporting period, with a total of 70 patents granted, including 11 invention patents[37]. - Research and development expenses amounted to ¥45,966,086.30, up 31.06% from ¥35,073,574.72, attributed to increased material costs[41]. - The company has allocated resources for research and development of new products, aiming to enhance its competitive edge in the market[182]. Environmental Responsibility - The company utilizes a closed-loop system for energy efficiency, integrating tar processing, carbon black production, and waste gas treatment[37]. - Longxing Chemical invested CNY 48 million in May 2010 to build a 3600m3/d water treatment plant, achieving a water reuse rate of over 95%[74]. - The company has established a real-time monitoring system for emissions, with data uploaded to environmental authorities, ensuring no exceedance of emission standards[74]. - Longxing Chemical's dust removal efficiency can reach 99.99% through negative pressure collection and bag dust removal measures[74]. - The company has not faced any administrative penalties for environmental issues, indicating compliance with regulations[78]. Corporate Governance - The company has established a modern corporate governance structure, ensuring effective checks and balances among the shareholders' meeting, board of directors, supervisory board, and management[80]. - The company emphasizes the protection of minority shareholders' rights, implementing separate voting for significant matters affecting their interests[83]. - The company has a comprehensive internal control system to enhance risk prevention and control capabilities[83]. Shareholder and Equity Management - The company does not plan to distribute cash dividends or issue bonus shares for this reporting period[6]. - A stock incentive plan was approved, granting 9.68 million restricted shares at a price of ¥2.77 per share to 176 individuals[70]. - The total number of shares after the change is 489,680,000, with restricted shares accounting for 2.23% of the total[126]. - The company has implemented a stock incentive plan that requires adherence to the 2021 restrictions[134]. Market Position and Production - The company primarily engages in the production and sales of carbon black, white carbon black, and coal tar products, positioning itself as a key player in the domestic carbon black industry[30]. - The company produced 232,600 tons of carbon black in the first half of 2021, accounting for 9.30% of the total production of 2.5 million tons by 34 member companies, ranking second among them[35]. - The company maintains a production and sales rate of 100.73%, with carbon black sales volume at 234,300 tons[35]. Community Engagement and Social Responsibility - The company has actively participated in community development and charitable activities, reflecting its commitment to social responsibility[94]. - The company conducts regular occupational health checks for employees engaged in hazardous work environments[86]. - The company actively engages in vocational skills training to promote employee development and enhance overall corporate growth[87].

Financial Performance - The company's revenue for Q1 2021 reached ¥820,419,968.84, representing a 74.04% increase compared to ¥471,393,619.53 in the same period last year[8] - Net profit attributable to shareholders was ¥80,059,480.55, a significant increase of 6,290.75% from ¥1,252,739.32 year-on-year[8] - The net profit after deducting non-recurring gains and losses was ¥81,062,956.73, up 7,619.39% from ¥1,050,121.22 in the previous year[8] - Basic earnings per share rose to ¥0.1668, reflecting a 6,315.38% increase from ¥0.0026 in the previous year[8] - Operating revenue grew by 74.04% year-on-year, driven by a booming market and increased sales prices[19] - Net profit surged by 6290.75% compared to the previous period, primarily due to a significant increase in total profit[19] - Total operating revenue for Q1 2021 reached ¥820,419,968.84, a significant increase of 74% compared to ¥471,393,619.53 in the same period last year[40] - Net profit for Q1 2021 was ¥80,059,480.55, compared to ¥1,252,739.32 in Q1 2020, indicating a substantial growth[42] Cash Flow and Liquidity - The net cash flow from operating activities improved to ¥11,952,706.49, a turnaround from a negative cash flow of -¥83,385,391.75 in the same period last year, marking a 114.33% increase[8] - Cash flow from operating activities increased by 114.33% year-on-year, attributed to reduced cash outflows for purchases and increased cash inflows from sales[19] - Cash and cash equivalents decreased by 48.76% year-on-year, primarily due to increased repayments of bank loans[19] - Cash flow from operating activities generated a net inflow of CNY 11,952,706.49, a turnaround from a net outflow of CNY 83,385,391.75 in the prior year[50] - The company reported a net increase in cash and cash equivalents of 28,157,603.71, contrasting with a decrease of -57,421,171.67 in the previous year[54] Assets and Liabilities - Total assets at the end of the reporting period were ¥2,642,570,632.73, an increase of 4.99% from ¥2,517,077,655.44 at the end of the previous year[8] - The company's current assets totaled CNY 1,560,950,068.30, up from CNY 1,409,204,768.85 at the end of 2020, indicating an increase of about 10.76%[32] - Total liabilities as of March 31, 2021, were CNY 1,247,864,697.42, compared to CNY 1,202,423,379.36 at the end of 2020, showing an increase of approximately 3.77%[34] - The company's total liabilities decreased by 39.91% for non-current liabilities due within one year, as long-term borrowings due were not exceeding one year[17] Shareholder Information - The total number of ordinary shareholders at the end of the reporting period was 29,521[11] - The top shareholder, Liu Jiangshan, holds 20.40% of the shares, amounting to 97,897,902 shares[11] - Net assets attributable to shareholders increased to ¥1,394,705,935.31, up 6.09% from ¥1,314,654,276.08 at the end of the previous year[8] - The company's equity attributable to shareholders reached CNY 1,394,705,935.31, up from CNY 1,314,654,276.08, reflecting a growth of about 6.09%[35] Research and Development - Research and development expenses rose by 39.17% year-on-year, reflecting increased investment in R&D[19] - Research and development expenses for Q1 2021 were ¥5,017,551.16, compared to ¥3,605,326.93 in Q1 2020, marking an increase of approximately 39%[41] Tax and Other Financial Obligations - The company reported a 462.96% increase in tax payments, reflecting higher tax obligations due to increased revenue[19] - The company reported no overdue commitments from controlling shareholders or related parties during the reporting period[22] - There were no significant contracts or external guarantees reported during the period[26][27] Other Financial Metrics - The weighted average return on equity was 5.91%, a significant increase from 0.10% in the same period last year[8] - The company incurred a credit impairment loss of ¥5,039,364.38 during the quarter[46] - Other comprehensive income after tax for Q1 2021 was ¥253.66, compared to a loss of ¥25.16 in the same period last year[42]

Financial Performance - The company's operating revenue for 2020 was ¥2,295,745,792.80, a decrease of 18.18% compared to 2019[6]. - The net profit attributable to shareholders was ¥77,455,520.89, representing a significant increase of 302.97% year-over-year[6]. - The net profit attributable to shareholders after deducting non-recurring gains and losses was ¥49,519,517.01, up 522.78% from the previous year[6]. - The net cash flow from operating activities was ¥171,289,842.94, down 59.49% compared to 2019[6]. - The basic earnings per share increased to ¥0.1614, a rise of 303.50% from the previous year[6]. - Total assets at the end of 2020 were ¥2,517,077,655.44, a decrease of 5.46% from the end of 2019[6]. - The net assets attributable to shareholders increased by 6.26% to ¥1,314,654,276.08 at the end of 2020[6]. - The company reported a significant increase in quarterly net profit, with the fourth quarter net profit reaching ¥56,231,649.26[6]. - Non-recurring gains included government subsidies amounting to ¥15,900,057.05, which accounted for 20.53% of the net profit[6]. - The company's total operating costs decreased to approximately CNY 1.96 billion, down from CNY 2.44 billion in the previous year, with a cost structure shift where raw materials accounted for 88.69% of total costs[62]. Market Position and Industry Risks - The company maintains a strong competitive position as one of the top ten global players in the carbon black industry, but faces risks from potential adverse changes in national industrial policies[12]. - The company is heavily reliant on the tire manufacturing industry, which poses a risk due to potential market volatility in this sector[9]. - The primary raw materials for carbon black production account for approximately 80% of production costs, making the company vulnerable to price fluctuations in coal tar, anthracene oil, and ethylene tar[10]. - The company’s main customers are large domestic and international tire manufacturers, leading to a high customer concentration risk[9]. Environmental and Safety Initiatives - The company has made significant investments in environmental protection measures, which may lead to increased operational costs if new regulations are introduced[13]. - The company emphasizes safety management in production due to the flammable nature of raw materials and high-temperature processes, which poses operational risks[14]. - The company has achieved a dust removal efficiency of 99.99% in its dust control measures[157]. - The company invested 48 million CNY in a wastewater treatment facility, achieving a water reuse rate of over 95%[158]. - By the end of 2020, the company had invested 190 million CNY in pollution control facilities, achieving ultra-low emission standards for pollutants[158]. - The actual emissions in 2020 were 3.5 tons of particulate matter, 31.63 tons of SO2, and 92.08 tons of NOx, all below the permitted limits[159]. - The company has established a comprehensive safety management system, achieving zero major accidents and zero occupational disease incidence in 2020[146]. Research and Development - The company invested 94 million CNY in research and development during the reporting period, with a total of 70 patents granted, including 10 invention patents[42]. - The company developed new high-structure products in collaboration with tire manufacturers, enhancing its product offerings[49]. - The company aims to improve product quality and reduce costs to enhance market competitiveness, focusing on N115 and N774 carbon black products[68]. - The company has established a partnership with a leading university for collaborative research, which is expected to yield innovative solutions in the industry[196]. Corporate Governance and Shareholder Relations - The company has established a modern corporate governance structure to protect the rights and interests of shareholders and creditors[131]. - The company emphasizes the protection of minority shareholders' rights and conducts separate voting for significant matters affecting their interests[132]. - The company has maintained a consistent accounting policy without significant changes compared to the previous year[102]. - The company has not experienced any non-operating fund occupation by controlling shareholders or related parties during the reporting period[101]. - The company completed the restructuring of its board of directors and supervisory board, with new members appointed[165]. Future Outlook and Strategic Plans - The company plans to achieve international brand recognition and become a world-class carbon black supplier[91]. - The company has set a revenue guidance of 1.8 billion yuan for the next fiscal year, projecting a growth rate of 20%[196]. - New product development includes the launch of a high-performance carbon black product, expected to contribute an additional 200 million yuan in revenue[196]. - The company plans to expand its market presence in Southeast Asia, targeting a 25% market share within the next three years[196]. - A strategic acquisition of a local competitor is in progress, which is anticipated to enhance production capacity by 30%[196]. Social Responsibility - The company has actively engaged in social responsibility initiatives and maintains a focus on product quality, safety production, and environmental protection[127]. - The company donated RMB 500,000 to support COVID-19 prevention efforts in Shihezi City[163].

[Important Notice](index=2&type=section&id=%E7%AC%AC%E4%B8%80%E8%8A%82%20%E9%87%8D%E8%A6%81%E6%8F%90%E7%A4%BA) This section confirms the report's accuracy and completeness, with key personnel taking responsibility for financial statements [Board of Directors' Statement](index=2&type=section&id=%E7%AC%AC%E4%B8%80%E8%8A%82%20%E9%87%8D%E8%A6%81%E6%8F%90%E7%A4%BA) The Board, Supervisory Board, and senior management collectively assure the report's accuracy and completeness, with key executives verifying financial statements - The company's Board of Directors, Supervisory Board, and all senior management collectively guarantee the truthfulness, accuracy, and completeness of the report content, assuming joint and several legal liability[4](index=4&type=chunk) - Company head Wei Liang, chief accountant Li Ying, and head of accounting department Zhou Wenjie declare that the financial statements in the quarterly report are true, accurate, and complete[5](index=5&type=chunk) [Company Profile](index=3&type=section&id=%E7%AC%AC%E4%BA%8C%E8%8A%82%20%E5%85%AC%E5%8F%B8%E5%9F%BA%E6%9C%AC%E6%83%85%E5%86%B5) This section provides an overview of the company's key financial performance and shareholder structure during the reporting period [Key Accounting Data and Financial Indicators](index=3&type=section&id=%E4%B8%80%E3%80%81%E4%B8%BB%E8%A6%81%E4%BC%9A%E8%AE%A1%E6%95%B0%E6%8D%AE%E5%92%8C%E8%B4%A2%E5%8A%A1%E6%8C%87%E6%A0%87) Q1-Q3 2020 saw revenue decline by 26.15% and net profit by 12.00%, while Q3 net profit grew 22.39% despite a 16.17% revenue drop, with operating cash flow turning negative Key Financial Indicators for Q3 and YTD 2020 | Indicator | Current Period (Q3) | YoY Change in Current Period | YTD (Q1-Q3) | YoY Change YTD | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue (CNY) | 614.16 million | -16.17% | 1.58 billion | -26.15% | | Net Profit Attributable to Shareholders of Listed Company (CNY) | 18.59 million | 22.39% | 21.08 million | -12.00% | | Net Cash Flow from Operating Activities (CNY) | -4.77 million | -102.90% | -144.82 million | -140.02% | | Basic Earnings Per Share (CNY/share) | 0.0387 | 22.47% | 0.0439 | -12.02% | | Weighted Average Return on Net Assets | 1.49% | 0.28% | 1.69% | -0.22% | Non-Recurring Gains and Losses YTD | Item | Amount (CNY) | Explanation | | :--- | :--- | :--- | | Government subsidies recognized in current profit/loss | 3.67 million | Primarily energy-saving and environmental protection project subsidies, significantly impacting performance | | Other non-operating income and expenses | -1.11 million | Primarily cash donations for epidemic in current period | | **Total** | **2.14 million** | - | [Shareholder Information](index=4&type=section&id=%E4%BA%8C%E3%80%81%E6%8A%A5%E5%91%8A%E6%9C%9F%E6%9C%AB%E8%82%A1%E4%B8%9C%E6%80%BB%E6%95%B0%E5%8F%8A%E5%89%8D%E5%8D%81%E5%90%8D%E8%82%A1%E4%BB%A5%E6%8C%81%E8%82%A1%E6%83%85%E5%86%B5%E8%A1%A8) The company has 30,242 common shareholders, with Liu Jiangshan as the largest at 20.40%, and no pledges or freezes among top ten shareholders, including the actual controller's brother - As of the end of the reporting period, the company had **30,242 common shareholders**[12](index=12&type=chunk) Top Three Shareholders' Holdings | Shareholder Name | Shareholder Nature | Shareholding Percentage | Number of Shares Held | | :--- | :--- | :--- | :--- | | Liu Jiangshan | Domestic Natural Person | 20.40% | 97,897,902 | | Bohai International Trust Co., Ltd. - Jixing No. 3 Single Fund Trust | Other | 15.13% | 72,629,372 | | Yu Jumei | Domestic Natural Person | 6.85% | 32,885,550 | - Among the top ten shareholders, Liu Heshan is the brother of the actual controller Liu Jiangshan, but both parties have declared they do not constitute persons acting in concert; the company is unaware of any other related party relationships or concerted actions among the remaining top ten shareholders[13](index=13&type=chunk) [Significant Events](index=6&type=section&id=%E7%AC%AC%E4%B8%89%E8%8A%82%20%E9%87%8D%E8%A6%81%E4%BA%8B%E9%A1%B9) This section details significant changes in financial data and other material events during the reporting period, along with their underlying causes [Analysis of Changes in Key Financial Data and Reasons](index=6&type=section&id=%E4%B8%80%E3%80%81%E6%8A%A5%E5%91%8A%E6%9C%9F%E4%B8%BB%E8%A6%81%E8%B4%A2%E5%8A%A1%E6%95%B0%E6%8D%AE%E3%80%81%E8%B4%A2%E5%8A%A1%E6%8C%87%E6%A0%87%E5%8F%91%E7%94%9F%E5%8F%98%E5%8A%A8%E7%9A%84%E6%83%85%E5%86%B5%E5%8F%8A%E5%8E%9F%E5%9B%A0) Significant financial data changes include decreased monetary funds and construction in progress, reduced notes payable and long-term borrowings, increased credit impairment losses and non-operating expenses, and a substantial outflow in operating cash flow Balance Sheet Key Item Changes (vs. End of Last Year) | Item | Change Percentage | Primary Reason | | :--- | :--- | :--- | | Monetary Funds | -40.74% | Return of acceptance deposits due in current period | | Construction in Progress | -90.71% | Environmental protection equipment capitalized upon reaching operational status | | Notes Payable | -55.54% | Notes payable matured in current period | | Long-term Borrowings | -80.54% | Repayment of long-term borrowings in current period | Income Statement Key Item Changes (YTD YoY) | Item | Change Percentage | Primary Reason | | :--- | :--- | :--- | | Credit Impairment Losses | 358.61% | Increased credit impairment provisions in current period | | Non-operating Expenses | 672.17% | Epidemic donations in current period, etc | Cash Flow Statement Key Item Changes (YTD YoY) | Item | Change Percentage | Primary Reason | | :--- | :--- | :--- | | Cash received from other financing activities | 245.44% | Increased bank acceptance deposits due in current period | | Cash paid for dividends, profits, or interest | -64.42% | Cash dividends distributed in same period last year | [Other Significant Events](index=7&type=section&id=%E4%BA%8C%E3%80%81%E9%87%8D%E8%A6%81%E4%BA%8B%E9%A1%B9%E8%BF%9B%E5%B1%95%E6%83%85%E5%86%B5%E5%8F%8A%E5%85%B6%E5%BD%B1%E5%93%8D%E5%92%8C%E8%A7%A3%E5%86%B3%E6%96%B9%E6%A1%88%E7%9A%84%E5%88%86%E6%9E%90%E8%AF%B4%E6%98%8E) The company reported no share repurchases, unfulfilled commitments, securities investments, illegal guarantees, or non-operating fund occupation by controlling shareholders, nor did it provide performance forecasts or conduct investor relations activities - During the reporting period, the company had no overdue unfulfilled commitments from actual controllers, shareholders, or related parties[20](index=20&type=chunk) - The company did not engage in securities investments, derivative investments, or entrusted wealth management during the reporting period[21](index=21&type=chunk)[22](index=22&type=chunk)[23](index=23&type=chunk) - The company had no illegal external guarantees or non-operating occupation of funds by controlling shareholders during the reporting period[24](index=24&type=chunk)[25](index=25&type=chunk) [Financial Statements](index=9&type=section&id=%E7%AC%AC%E5%9B%9B%E8%8A%82%20%E8%B4%A2%E5%8A%A1%E6%8A%A5%E8%A1%A8) This section presents the company's consolidated and parent company financial statements, including balance sheets, income statements, and cash flow statements, along with accounting policy adjustments [Consolidated Financial Statements](index=9&type=section&id=1%E3%80%81%E5%90%88%E5%B9%B6%E8%B5%84%E4%BA%A7%E8%B4%9F%E5%80%BA%E8%A1%A8) As of Q3 2020, consolidated total assets decreased by 9.04%, total liabilities by 18.36%, while net assets attributable to parent increased by 1.70%, with revenue down 26.15% and net profit down 12.00%, and operating cash flow turning negative Consolidated Balance Sheet Summary (September 30, 2020 vs. December 31, 2019) | Item | September 30, 2020 (CNY) | December 31, 2019 (CNY) | Change | | :--- | :--- | :--- | :--- | | Total Assets | 2.42 billion | 2.66 billion | -9.04% | | Total Liabilities | 1.16 billion | 1.43 billion | -18.36% | | Equity Attributable to Owners of Parent | 1.26 billion | 1.24 billion | 1.70% | Consolidated Income Statement Summary (January-September 2020 vs. January-September 2019) | Item | January-September 2020 (CNY) | January-September 2019 (CNY) | Change | | :--- | :--- | :--- | :--- | | Total Operating Revenue | 1.58 billion | 2.14 billion | -26.15% | | Net Profit Attributable to Owners of Parent | 21.08 million | 23.95 million | -12.00% | | Basic Earnings Per Share (CNY/share) | 0.0439 | 0.0499 | -12.02% | Consolidated Cash Flow Statement Summary (January-September 2020 vs. January-September 2019) | Item | January-September 2020 (CNY) | January-September 2019 (CNY) | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | -144.82 million | 361.83 million | | Net Cash Flow from Investing Activities | -45.68 million | -93.28 million | | Net Cash Flow from Financing Activities | 193.09 million | -235.50 million | [Parent Company Financial Statements](index=12&type=section&id=2%E3%80%81%E6%AF%8D%E5%85%AC%E5%8F%B8%E8%B5%84%E4%BA%A7%E8%B4%9F%E5%80%BA%E8%A1%A8) Parent company's total assets decreased by 7.60% and total liabilities by 20.04% as of Q3 2020, with Q1-Q3 revenue down 26.58% and net profit down 7.06%, and operating cash flow turning negative Parent Company Balance Sheet Summary (September 30, 2020 vs. December 31, 2019) | Item | September 30, 2020 (CNY) | December 31, 2019 (CNY) | Change | | :--- | :--- | :--- | :--- | | Total Assets | 1.98 billion | 2.14 billion | -7.60% | | Total Liabilities | 747.83 million | 935.26 million | -20.04% | | Total Owners' Equity | 1.23 billion | 1.21 billion | 2.04% | Parent Company Income Statement Summary (January-September 2020 vs. January-September 2019) | Item | January-September 2020 (CNY) | January-September 2019 (CNY) | Change | | :--- | :--- | :--- | :--- | | Operating Revenue | 1.41 billion | 1.91 billion | -26.58% | | Net Profit | 24.65 million | 26.53 million | -7.06% | Parent Company Cash Flow Statement Summary (January-September 2020 vs. January-September 2019) | Item | January-September 2020 (CNY) | January-September 2019 (CNY) | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | -133.88 million | 343.02 million | | Net Cash Flow from Investing Activities | -9.90 million | -62.44 million | | Net Cash Flow from Financing Activities | 72.35 million | -330.73 million | [Explanation of Financial Statement Adjustments](index=27&type=section&id=%E4%BA%8C%E3%80%81%E8%B4%A2%E5%8A%A1%E6%8A%A5%E8%A1%A8%E8%B0%83%E6%95%B4%E6%83%85%E5%86%B5%E8%AF%B4%E6%98%8E) The company adopted new revenue recognition standards from January 1, 2020, reclassifying "Advances from Customers" to "Contract Liabilities" in opening financial statements, with no impact on total assets, liabilities, or net assets - The company adopted the new revenue recognition standard for the first time starting **January 1, 2020**, and adjusted relevant items in the opening financial statements for the year[61](index=61&type=chunk) Consolidated Balance Sheet Opening Balance Adjustments | Item | Before Adjustment (December 31, 2019) | After Adjustment (January 1, 2020) | Adjustment Amount | | :--- | :--- | :--- | :--- | | Advances from Customers | 17.40 million | 0.00 | -17.40 million | | Contract Liabilities | 0.00 | 17.40 million | 17.40 million | [Audit Report](index=33&type=section&id=%E4%B8%89%E3%80%81%E5%AE%A1%E8%AE%A1%E6%8A%A5%E5%91%8A) The company's third-quarter report for 2020 is unaudited - The company's third-quarter report is **unaudited**[69](index=69&type=chunk)

Financial Performance - The company's operating revenue for the first half of 2020 was ¥968,616,510.39, a decrease of 31.34% compared to ¥1,410,666,068.76 in the same period last year[19]. - The net profit attributable to shareholders was ¥2,630,934.23, down 69.98% from ¥8,762,558.59 year-on-year[19]. - The net cash flow from operating activities was -¥140,043,907.05, a decline of 170.91% compared to ¥197,497,826.05 in the previous year[19]. - The basic earnings per share decreased by 69.95% to ¥0.0055 from ¥0.0183 in the same period last year[19]. - Domestic sales revenue decreased by 25.85% to ¥907.53 million, while international sales revenue dropped by 67.30% to ¥61.09 million[42]. - The gross profit margin for carbon black was 11.55%, down from the previous year[43]. - The total operating costs decreased by 33.32% to ¥832.68 million, primarily due to lower raw material prices[40]. - The company reported a net profit margin improvement, with retained earnings increasing from CNY 295,684,274.53 to CNY 298,315,208.76, an increase of about 0.9%[134]. - The total profit for the first half of 2020 was CNY 4.05 million, a decrease of 64.2% from CNY 11.21 million in the same period of 2019[141]. Assets and Liabilities - Total assets at the end of the reporting period were ¥2,561,362,877.49, down 3.80% from ¥2,662,487,831.67 at the end of the previous year[19]. - The company's asset-liability ratio stood at 51.59%, indicating a stable financial policy and reasonable debt repayment capability[63]. - Total liabilities decreased from CNY 1,425,274,367.42 to CNY 1,321,521,556.77, a reduction of approximately 7.3%[133]. - Owner's equity increased from CNY 1,237,213,464.25 to CNY 1,239,841,320.72, a slight increase of about 0.2%[134]. - The total equity attributable to the parent company at the end of the reporting period was CNY 1,239 million, showing a decrease of CNY 3,600 million compared to the previous period[156]. Research and Development - The company invested 35.07 million yuan in research and development during the reporting period, with a total of 31 patents granted, including 10 invention patents[33]. - The company has achieved breakthroughs in high-dispersion white carbon black, which has been accepted by tire manufacturers[34]. - The company invested ¥3.51 million in R&D to optimize product performance and reduce production costs[38]. - Research and development expenses amounted to ¥35.07 million, a decrease of 37.53% compared to ¥56.14 million in the previous year[40]. Environmental and Regulatory Compliance - The company faced an administrative penalty of CNY 450,000 for environmental violations related to air pollution control facilities[75]. - The company completed corrective actions for environmental issues by March 16, 2020, including sealing chimney leaks and conducting sampling in a closed environment[76]. - The company has invested significantly in environmental protection measures, ensuring compliance with national policies and enhancing risk resilience[65]. - The company has implemented a negative pressure collection and bag dust removal system, achieving a dust removal rate of 99.99%[96]. Market Position and Strategy - The company continues to focus on the production and sales of carbon black and coal tar products, maintaining its position as a key player in the domestic carbon black industry[27]. - The company’s products are recognized by well-known domestic and international tire manufacturers, with exports concentrated in Europe and Southeast Asia[34]. - The company plans to enhance production efficiency and optimize product structure in response to market demand fluctuations[64]. - The company anticipates a revenue growth of 15% for the next fiscal year, driven by new product launches and market expansion strategies[187]. Shareholder and Equity Information - The total number of shares is 480,000,000, with 99.91% being unrestricted shares[111]. - The company’s major shareholder reduced their holdings by 13,440,000 shares, accounting for 2.8% of total equity[104]. - The total number of common shareholders at the end of the reporting period was 26,801[113]. - Liu Jiangshan holds 20.40% of the shares, amounting to 97,897,902 common shares[114]. Cash Flow and Liquidity - The company's cash and cash equivalents decreased from 395,401,043.61 RMB at the end of 2019 to 300,365,208.50 RMB by June 30, 2020, a decline of approximately 24%[131]. - The ending balance of cash and cash equivalents was 65,854,288.89 CNY, down from 72,782,788.58 CNY, reflecting a decrease in liquidity[150]. - The total cash outflow for operating activities was 974,728,694.98 CNY, compared to 1,235,407,085.31 CNY in the previous period, showing a reduction in operational expenses[153]. Risk Management - The company faced significant risks due to raw material price fluctuations, with coal tar, anthracene oil, and ethylene tar accounting for approximately 80% of production costs[63]. - The company has identified major risks and countermeasures in its future operations, which are detailed in the report[5]. - The company has recognized a credit loss provision of 10 million RMB based on expected credit losses for its financial assets, reflecting prudent risk management practices[192]. Corporate Governance - The financial report for the first half of 2020 was not audited[129]. - The financial report for the first half of 2020 was approved by the board of directors on August 19, 2020[168]. - The company has evaluated its ability to continue as a going concern for the next 12 months and found no significant doubts regarding its sustainability[171].

Financial Performance - The company's revenue for Q1 2020 was ¥471,393,619.53, representing a decrease of 31.74% compared to ¥690,581,947.27 in the same period last year[8]. - Net profit attributable to shareholders was ¥1,252,739.32, down 21.01% from ¥1,585,978.49 year-on-year[8]. - The company's total revenue decreased by 31.74% to ¥471,393,619.53 compared to the previous period, primarily due to reduced sales volume and pricing impacts from the pandemic[17]. - Net profit for Q1 2020 was CNY 1,252,739.32, compared to CNY 1,585,978.49 in the same period last year, representing a decline of approximately 21%[40]. - The total comprehensive income for the first quarter of 2020 was -2,934,277.53 CNY, compared to 7,074,265.18 CNY in the same period last year[45]. Cash Flow - The net cash flow from operating activities was negative at -¥83,385,391.75, a decline of 194.11% compared to ¥88,601,105.13 in the same period last year[8]. - The net cash flow from operating activities turned negative at -¥83,385,391.75, a decrease of 194.11% compared to the previous year, largely due to pandemic-related impacts[17]. - Cash inflow from operating activities was 562,051,605.50 CNY, down from 853,781,722.60 CNY year-on-year, representing a decrease of approximately 34%[47]. - Cash outflow from operating activities totaled 645,436,997.25 CNY, compared to 765,180,617.47 CNY in the previous year, indicating a reduction of about 15.7%[48]. - The cash flow from investment activities was -12,836,961.70 CNY, an improvement from -30,145,244.53 CNY in the previous year, indicating a reduction in cash outflow[48]. Assets and Liabilities - Total assets at the end of the reporting period were ¥2,518,637,018.53, a decrease of 5.40% from ¥2,662,487,831.67 at the end of the previous year[8]. - Total current assets decreased from CNY 1,426,682,767.23 on December 31, 2019, to CNY 1,310,514,898.98 on March 31, 2020, representing a decline of approximately 8.1%[30]. - Total liabilities decreased from CNY 1,425,274,367.42 to CNY 1,280,174,440.11, a reduction of about 10.2%[32]. - The company's total liabilities decreased to CNY 881,489,763.00 from CNY 935,259,665.84[39]. - The company's long-term borrowings decreased from CNY 37,444,343.06 to CNY 18,936,764.34, a significant reduction of about 49.5%[32]. Shareholder Information - The company reported a total of 28,840 common shareholders at the end of the reporting period[11]. - Liu Jiangshan was the largest shareholder, holding 20.40% of the shares, equivalent to 97,897,902 shares[11]. - The company did not conduct any repurchase transactions among the top 10 shareholders during the reporting period[12]. Income and Expenses - Operating costs fell by 34.94% to ¥401,946,877.28, mainly due to inventory write-backs[17]. - Other income increased by 119.31% to ¥2,479,441.23, attributed to VAT refunds related to resource utilization[17]. - The company reported a significant increase in income tax expenses by 1755.95% to ¥1,572,281.52, due to adjustments from high-tech qualifications in the previous period[17]. - Research and development expenses for Q1 2020 were CNY 3,605,326.93, compared to CNY 3,890,551.92 in the previous period[39]. - The company reported a decrease in financial expenses to CNY 11,817,466.32 from CNY 12,866,057.60 year-on-year[39]. Changes in Accounting Standards - The company has implemented new revenue and lease standards starting in 2020, with no retrospective adjustments made[59]. - Prepayments decreased by 98.65% to ¥234,373.15, as the company reclassified these amounts under contract liabilities following new revenue recognition standards[16].

Financial Performance - The company's operating revenue for 2019 was ¥2,805,930,355.05, a decrease of 9.07% compared to ¥3,085,736,795.45 in 2018[22]. - The net profit attributable to shareholders for 2019 was ¥19,221,241.82, representing an 85.52% decline from ¥132,720,900.80 in 2018[22]. - The net profit attributable to shareholders after deducting non-recurring gains and losses was ¥7,951,425.74, down 92.78% from ¥110,060,033.36 in 2018[22]. - The basic earnings per share for 2019 was ¥0.0400, a decrease of 85.53% compared to ¥0.2765 in 2018[22]. - The total revenue for the year was 280,593.04 million yuan, a decrease of 9.07% compared to the previous year, while net profit fell by 85.52% to 1,922.12 million yuan[44]. - The company reported a significant drop in quarterly net profit, with a loss of ¥4,732,825.17 in Q4 2019, following profits in the first three quarters[26]. - The company received government subsidies totaling ¥13,694,453.40 in 2019, which accounted for 71.25% of the net profit, indicating a substantial impact on the financial results[29]. Market Dependency and Risks - The company is highly dependent on the automotive tire industry, which poses a risk to market demand for carbon black[9]. - The company faces risks from fluctuations in raw material prices, particularly due to environmental policies and adjustments in the steel and coking industries[8]. - The carbon black market is heavily influenced by macroeconomic conditions, with potential price suppression if demand from downstream tire manufacturers decreases[8]. - The company is positioned among the top ten in the international market, but potential adverse changes in national industrial policies could negatively affect its development[9]. - The company emphasizes the importance of monitoring market competition and customer concentration risks, as these factors could affect profitability[9]. Production and Sales - The company primarily engages in the production and sales of carbon black, which is essential for the rubber industry, particularly in tire manufacturing[32]. - The company produced 44.93 million tons of carbon black in 2019, accounting for 10.14% of the total production of the industry association, which produced 443 million tons, a decrease of 1.93% year-on-year[38]. - The company achieved a sales volume of 45.66 million tons of carbon black, resulting in a production and sales rate of 101.62%[44]. - The company's carbon black sales revenue was CNY 2,589,238,104.15, a decrease of 9.85% compared to the previous year[51]. - Domestic sales revenue decreased by 3.08% to CNY 2,481,920,541.59, while foreign sales revenue dropped by 38.28% to CNY 324,009,813.46[51][54]. Research and Development - The company invested 112.12 million yuan in research and development during the reporting period, with a total of 30 patents granted, including 10 invention patents[40]. - Research and development expenses amounted to CNY 11,212.09 million, focusing on new product development and optimization of product performance[45]. - The company aims to develop new carbon black varieties to penetrate the high-end market and improve existing product quality to enhance competitiveness[63]. - The company plans to optimize its product structure and increase profit margins through the development of new products and production processes[63]. Environmental and Social Responsibility - The company has made significant investments in environmental protection measures, which may lead to increased operational costs if new standards are implemented[9]. - The company invested CNY 35.5 million in environmental protection facilities, achieving a dust removal efficiency of 99.99%[143]. - The company has a total sulfur dioxide (SO2) emission of 173.08 tons, which is below the permitted limit of 1158.8 tons[143]. - The company has invested CNY 48 million in a wastewater treatment plant, achieving a water reuse rate of over 95%[144]. - The company actively participates in community development and charitable activities, reflecting its commitment to social responsibility[137]. Governance and Management - The company has established a modern corporate governance structure to protect the rights of shareholders and creditors[123]. - The company maintains a commitment to timely and accurate information disclosure to ensure investor rights[125]. - The company has established a comprehensive employee performance evaluation and incentive mechanism to enhance management motivation and attract talent[191]. - The board of directors consists of three independent directors, accounting for over one-third of the total board members, ensuring compliance with legal and regulatory requirements[192]. - The company maintains independence from its controlling shareholder in operations and decision-making[189]. Financial Position - The company's end-of-period debt-to-asset ratio was 53.53%, indicating a stable financial policy and a certain level of debt repayment capability[9]. - Total assets at the end of 2019 were ¥2,662,487,831.67, down 8.61% from ¥2,913,300,463.04 at the end of 2018[22]. - The net assets attributable to shareholders at the end of 2019 were ¥1,237,213,464.25, a decrease of 2.28% from ¥1,266,127,614.85 at the end of 2018[22]. - The company reported an asset impairment of -¥7,430,172.16, accounting for 32.37% of total profit[70]. Employee Relations - The company adheres to labor laws and has established a comprehensive employee rights protection system, ensuring legal rights for all employees[129]. - Employees are entitled to various types of leave, including maternity leave and annual leave, with overtime pay and holiday wages in accordance with national policies[129]. - The company actively engages in vocational training and career development, collaborating with educational institutions to enhance employee skills[130]. - The company provides free accommodation and meals for employees, ensuring a comfortable living and dining experience[131].

Financial Performance - Operating revenue for the reporting period was approximately ¥732.65 million, down 12.12% year-on-year, with a year-to-date revenue of approximately ¥2.14 billion, a decrease of 6.72%[7] - Net profit attributable to shareholders was approximately ¥15.19 million, a decline of 56.34% year-on-year, with year-to-date net profit of approximately ¥23.95 million, down 75.56%[7] - Basic earnings per share were ¥0.0316, a decrease of 56.41% year-on-year[7] - Operating profit decreased by CNY 84,616,600, a reduction rate of 71.84%, mainly due to a decline in gross profit[17] - Total profit decreased by CNY 84,196,500, a reduction rate of 71.67%, primarily due to a decrease in gross profit[17] - Total operating revenue decreased to ¥732.65 million from ¥833.67 million, a decline of approximately 12.1% year-over-year[39] - Net profit fell to ¥15.19 million compared to ¥34.79 million in the previous period, representing a decline of approximately 56.4%[40] - Operating profit decreased to ¥22.15 million from ¥42.43 million, a drop of around 47.9% year-over-year[40] - Net profit for the period was ¥23,954,066.99, a significant decline of 75.55% from ¥98,024,209.92 in the same period last year[48] - Basic and diluted earnings per share were both ¥0.0499, compared to ¥0.2042 in the previous year, reflecting a decrease of 75.56%[49] - The company reported a total comprehensive income of ¥23,953,240.97, down 75.55% from ¥98,027,562.46 in the previous period[49] Cash Flow - The net cash flow from operating activities was approximately ¥164.33 million, an increase of 127.87% compared to the same period last year[7] - Net cash flow from operating activities increased by CNY 145,946,800, an increase rate of 67.61%, mainly due to a reduction in cash outflows from operating activities[17] - Cash inflow from financing activities decreased by CNY 277,929,900, a reduction rate of 35.17%, primarily due to a decrease in bank loan repayments[18] - Total cash inflow from operating activities was CNY 2,566,327,237.39, while cash outflow was CNY 2,204,501,466.44, resulting in a net cash inflow of CNY 361,825,770.95[56] - Cash flow from investing activities showed a net outflow of CNY 93,280,654.19, compared to a net outflow of CNY 45,419,480.74 in the previous year[57] Assets and Liabilities - Total assets at the end of the reporting period were approximately ¥2.77 billion, a decrease of 4.94% compared to the end of the previous year[7] - Total liabilities decreased from CNY 1,647,172,848.19 to CNY 1,527,462,415.94, a decline of around 7.3%[31] - Owner's equity decreased from CNY 1,266,127,614.85 to CNY 1,241,951,824.00, a reduction of about 1.9%[32] - Current liabilities decreased from CNY 1,600,407,181.74 to CNY 1,498,564,633.94, a reduction of about 6.4%[31] - Non-current liabilities decreased from CNY 46,765,666.45 to CNY 28,897,782.00, a decrease of approximately 38.2%[31] - Cash and cash equivalents increased from CNY 94,495,020.96 to CNY 151,488,693.46, an increase of approximately 60.4%[34] - Accounts receivable decreased from CNY 549,006,380.81 to CNY 443,184,010.03, a decline of about 19.3%[34] - Inventory decreased from CNY 254,153,966.29 to CNY 225,107,818.07, a reduction of approximately 11.4%[34] Investments and Expenditures - Prepayments increased by ¥36.45 million, a rise of 221.04%, mainly due to increased advance payments for raw materials[15] - Construction in progress increased by ¥62.50 million, a rise of 433.49%, primarily due to new investments in environmental protection equipment[15] - Cash outflow from investment activities increased by CNY 47,184,900, an increase rate of 99.17%, primarily due to the addition of environmental protection equipment[17] - Research and development expenses were reduced to ¥3.75 million from ¥7.77 million, a decrease of about 51.8%[39] - Research and development expenses were ¥11,539,290.94, a decrease of 23.29% from ¥15,002,854.76 in the prior year[46] Shareholder Information - The total number of shareholders at the end of the reporting period was 24,764, with the top ten shareholders holding a combined 55.12% of shares[11] Other Information - Government subsidies recognized in the current period amounted to approximately ¥3.70 million, accounting for 15.46% of net profit, significantly impacting performance[8] - The company plans to focus on market expansion and new product development to improve future performance[46] - The third quarter report has not been audited[71] - The company has implemented new financial instrument standards or new lease standards since 2019, with retrospective adjustments to prior comparative data not applicable[72]