Group 1: Company Development Plans - The company aims to integrate and develop existing phosphate rock resources to achieve qualitative leaps in its core phosphate fertilizer business [3] - The company acquired mining rights for 4.5602 square kilometers at Mingniwan and 8.38 square kilometers at Yongwen, with total resource reserves of 36.9945 million tons [3] - The Yongwen mine has a production capacity of 300,000 tons per year, with reserves estimated at 10.43 million tons and an average grade of 30.96% [3] Group 2: Current Production and Operations - The Mingniwan mine is expected to achieve an annual production capacity of 800,000 to 1,200,000 tons, while the Yongwen mine is in the planning stage [4] - The company’s sulfur iron mine has an annual production capacity of 380,000 tons, with 50,952.57 tons of sulfur iron mined in the first half of 2021 [4] - The company’s sulfuric acid self-sufficiency rate is currently at 85%, with a production capacity of 1.15 million tons [5] Group 3: Market Outlook and Pricing - The company anticipates stable prices for phosphate fertilizers due to tightening global supply and increasing environmental regulations [5] - The company has the capacity to produce both powdered and granular monoammonium phosphate, allowing it to meet both domestic and international market demands [5] Group 4: Phosphogypsum Management - The company produces approximately 230,000 tons of phosphogypsum annually, with plans to utilize it in environmentally friendly construction materials [5] - The company has established partnerships for the production of new building materials using phosphogypsum, with significant local consumption projected [5] Group 5: Future Plans and Innovations - The company is exploring the development of new energy materials, particularly lithium iron phosphate for electric vehicle batteries, which requires high-quality phosphate rock [6] - The company is conducting research and discussions regarding the production of industrial-grade and food-grade phosphoric acid [6] Group 6: Shareholder Restructuring - The major shareholder is currently undergoing a restructuring process under court supervision, which has not affected the company's daily operations [6]

安徽省司尔特肥业股份有限公司 2022 年第三季度报告 证券代码：002538 证券简称：司尔特 公告编号：2022-55 安徽省司尔特肥业股份有限公司 2022 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、主要财务数据 （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 | 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） | 625,373,155.83 | -45.98% | 3,616,656,018.52 | 9.31% ...

安徽省司尔特肥业股份有限公司 2022 年半年度报告全文 安徽省司尔特肥业股份有限公司 2022 年半年度报告 股票简称：司尔特 股票代码：002538 披露时间：2022 年 8 月 20日 1 安徽省司尔特肥业股份有限公司 2022 年半年度报告全文 第一节 重要提示、目录和释义 公司计划不派发现金红利，不送红股，不以公积金转增股本。 2 | 第一节 | 重要提示、目录和释义 | 2 | | --- | --- | --- | | 第二节 | 公司简介和主要财务指标 | 6 | | 第三节 | 管理层讨论与分析 | 9 | | 第四节 | 公司治理 | 22 | | 第五节 | 环境和社会责任 | 24 | | 第六节 | 重要事项 | 31 | | 第七节 | 股份变动及股东情况 | 38 | | 第八节 | 优先股相关情况 | 43 | | 第九节 | 债券相关情况 | 44 | | 第十节 | 财务报告 | 45 | 安徽省司尔特肥业股份有限公司 2022 年半年度报告全文 备查文件目录 （一）载有董事长签名的 2022 年半年度报告。 （二）载有公司法定代表人、主管会计工作负责人及会计机构负责人签 ...

Financial Performance - The company reported a significant increase in revenue, with total revenue reaching 1.5 billion CNY, representing a year-on-year growth of 15%[14]. - The company reported a net profit of 300 million CNY for the year, reflecting a 10% increase compared to the previous year[14]. - The company's operating revenue for 2021 was approximately ¥3.99 billion, representing a 5.23% increase compared to ¥3.79 billion in 2020[19]. - The net profit attributable to shareholders for 2021 was approximately ¥456.61 million, a significant increase of 54.87% from ¥294.82 million in 2020[19]. - The company reported a total revenue of 25,860.6 million CNY for the year 2021, reflecting a significant increase compared to the previous year[157]. - The company reported a significant increase in revenue, achieving a total of 1.5 billion CNY for the fiscal year, representing a 20% growth compared to the previous year[167]. Dividend Distribution - The company plans to distribute a cash dividend of 2.60 CNY per 10 shares (including tax) to all shareholders[3]. - The cash dividend accounted for 100% of the total profit distribution amount, with no shares issued as stock dividends[192]. - The company’s profit distribution policy aligns with its articles of association and shareholder resolutions[192]. Market Expansion and Strategy - The company is focusing on expanding its market presence, particularly in the southwestern region of China, aiming for a 20% increase in market share by 2023[14]. - The company is actively expanding its sales model by connecting directly with professional cooperatives and large-scale farmers as land transfer accelerates[51]. - The company is expanding its market presence, targeting new regions in Southeast Asia, with an investment of 100 million CNY allocated for market entry strategies[167]. - A strategic acquisition of a local competitor is in progress, which is anticipated to enhance market share by 10%[167]. Research and Development - The company has invested 100 million CNY in research and development for new fertilizer products, targeting a launch of two new product lines in 2022[14]. - The company is committed to enhancing product quality and service levels to improve core competitiveness and accelerate innovation for transformation[38]. - The company is committed to enhancing its research and development capabilities to innovate new products[161]. - Research and development expenses increased by 5.45% to CNY 104.66 million, reflecting the company's commitment to innovation[86]. Acquisitions and Partnerships - The company is exploring potential acquisitions to diversify its product portfolio and enhance its competitive edge in the market[14]. - The company has established a strategic partnership with a leading agricultural technology firm to enhance its product offerings and improve distribution efficiency[14]. - The company acquired 60% of Guizhou Lufa Industrial Co., ensuring stable supply of phosphate ore, which is crucial for production[69]. - The company successfully acquired a 60% stake in Guizhou Lufan, enhancing its market position[181]. Sustainability and Environmental Commitment - The company is committed to sustainability and plans to increase the production of organic fertilizers by 30% over the next two years[14]. - The company has been recognized as a "Green Factory" by the Anhui Provincial Economic and Information Technology Department for its commitment to environmental sustainability[71]. - The company signed a carbon trading agreement to purchase 3,036 tons of carbon emission rights to offset its carbon footprint[72]. - The company is committed to environmental protection and may face increased costs if stricter regulations are implemented[131]. Operational Efficiency - The company has implemented cost-control measures that resulted in a 5% reduction in operational expenses[14]. - The company has established an independent and efficient supply chain system, ensuring streamlined operations[47]. - The company has a designed capacity of 2.25 million tons for compound fertilizers and monoammonium phosphate, with a capacity utilization rate of 80.08%[52]. - The company has implemented maintenance and technical upgrades during the off-season for fertilizer sales, ensuring operational efficiency[59]. Governance and Management - The company has established a complete independent governance structure, ensuring compliance with relevant laws and regulations, and enhancing operational standards[137]. - The company has a total of 9 board members, including 3 independent directors, meeting the legal requirements for board composition[140]. - The company has a diverse board of directors and management team, with various members holding positions since 2016 to 2022[156]. - The company has emphasized the importance of internal control and performance evaluation in its management practices, as highlighted in the annual report[177]. Financial Health and Cash Flow - The company's cash flow from operating activities showed a drastic decline, with a net cash flow of approximately ¥21.96 million, down 98.10% from ¥1.15 billion in 2020[19]. - The company reported a significant decline in net cash flow from operating activities, which was CNY 22 million, down 98.10% year-on-year[68]. - The company has a total of 300,000 tons of phosphate mining capacity under construction, which is expected to enhance its production capabilities[54]. - The company has a total of 2,950 employees, with 1,312 in production, 319 in sales, and 479 in technical roles[186].

安徽省司尔特肥业股份有限公司 2021 年第三季度报告 证券代码：002538 证券简称：司尔特 公告编号：2021-90 安徽省司尔特肥业股份有限公司 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。 一、主要财务数据 (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 | 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） | 1,157,689,850.93 | -14.41% | 3,308,771,612.67 | 0.03% | | 归属于上市公司股东 的净利润（元） | 134,644,932.82 | 100.64% | 386,966,608.08 | 92.44% ...

安徽省司尔特肥业股份有限公司 2020 年年度报告全文 安徽省司尔特肥业股份有限公司 ANHUI SIERTE FERTILIZER INDUSTRY LTD.,COMPANY 安徽省宁国经济技术开发区 ANHUI NINGGUO ECONOMIC & TECH DEVELOPMENT ZONE 安徽省司尔特肥业股份有限公司 2020 年年度报告 股票简称：司尔特 股票代码：002538 披露时间：2021 年 4 月 29 日 1 安徽省司尔特肥业股份有限公司 2020 年年度报告全文 第一节重要提示、目录和释义 公司董事会、监事会及董事、监事、高级管理人员保证年度报告内容的真实、准确、完 整，不存在虚假记载、误导性陈述或重大遗漏，并承担个别和连带的法律责任。 公司负责人金国清、主管会计工作负责人姚静及会计机构负责人(会计主管人员)姚静声 明：保证本年度报告中财务报告的真实、准确、完整。 本报告中所涉及的未来计划、发展战略等前瞻性描述，不代表公司盈利预测，不构成公 司对投资者的实质承诺，投资者及相关人士均应对此保持足够的风险认识，并且应当理解计 划、预测与承诺之间的差异。请投资者注意投资风险。 公司存在行业 ...

[Important Notice](index=2&type=section&id=Item%201.%20Important%20Notice) The company's management guarantees the truthfulness, accuracy, and completeness of this report's content and financial statements - The company's Board of Directors, Supervisory Board, and all directors, supervisors, and senior management guarantee the truthfulness, accuracy, and completeness of this report's content, free from false records, misleading statements, or material omissions[3](index=3&type=chunk) - The company's principal officer, head of accounting, and head of accounting department declare that the financial statements in this quarterly report are true, accurate, and complete[3](index=3&type=chunk) [Company Profile](index=3&type=section&id=Item%202.%20Company%20Profile) This section outlines the company's key financial data, performance indicators, and shareholder information [Key Accounting Data and Financial Indicators](index=3&type=section&id=I.%20Key%20Accounting%20Data%20and%20Financial%20Indicators) Q1 2021 saw revenue decline 10.42%, net profit rise 48.84%, operating cash flow turn negative, and total assets grow 12.95% Key Financial Indicators for Q1 2021 | Metric | Current Period | Prior Year Period | Year-over-Year Change | | :--- | :--- | :--- | :--- | | Operating Revenue (RMB) | 768,634,765.51 | 858,085,174.68 | -10.42% | | Net Profit Attributable to Shareholders (RMB) | 90,513,693.17 | 60,812,826.53 | 48.84% | | Net Cash Flow from Operating Activities (RMB) | -253,025,068.19 | 554,097,911.70 | -145.66% | | Basic Earnings Per Share (RMB/share) | 0.13 | 0.085 | 52.94% | | Weighted Average Return on Net Assets | 2.19% | 1.57% | Increased by 0.62 percentage points | | Total Assets (RMB) | 6,888,092,684.35 | 6,098,421,829.77 | 12.95% (Compared to Year-End Prior Period) | | Net Assets Attributable to Shareholders (RMB) | 4,162,561,944.13 | 4,072,046,596.17 | 2.22% (Compared to Year-End Prior Period) | - During the reporting period, total non-recurring gains and losses amounted to **RMB 9.59 million**, primarily from government grants[8](index=8&type=chunk) [Shareholder Information](index=4&type=section&id=II.%20Total%20Number%20of%20Shareholders%20and%20Top%20Ten%20Shareholders%27%20Holdings%20at%20Period-End) As of period-end, the company had 35,757 common shareholders, with the largest shareholder's majority stake pledged and frozen - As of the end of the reporting period, the total number of common shareholders was **35,757**[10](index=10&type=chunk) Top Three Shareholders' Holdings | Shareholder Name | Shareholding Percentage | Number of Shares Held | Share Status | | :--- | :--- | :--- | :--- | | Guogou Industrial Holding Co., Ltd. | 25.35% | 182,050,800 | Pledged 179,530,000 shares, Frozen 182,050,800 shares | | Ningguo City Agricultural Production Materials Co., Ltd., Anhui Province | 11.41% | 81,951,500 | - | | Ningguo Zhitong Industrial Investment Center (Limited Partnership) | 4.98% | 35,800,009 | - | - Shareholder Ningguo Agricultural Materials Co. and Mr. Jin Guoqing, the company's Chairman, constitute a concerted action relationship[11](index=11&type=chunk) [Significant Events](index=6&type=section&id=Item%203.%20Significant%20Events) This section details significant financial changes, commitment fulfillment, fundraising progress, and entrusted financial management [Analysis of Major Financial Data Changes](index=6&type=section&id=I.%20Changes%20and%20Reasons%20for%20Major%20Financial%20Data%20and%20Indicators%20During%20the%20Reporting%20Period) Q1 financial data showed significant changes in other non-current assets, payables, operating profit, and operating cash flow Changes and Reasons for Major Financial Indicators | Item | Change Percentage | Explanation of Change | | :--- | :--- | :--- | | Other Non-current Assets | 3223.78% | Primarily due to payment for the acquisition of 60% equity in Lufa | | Operating Profit | 52.94% | Primarily due to increased product gross margin | | Net Cash Flow from Operating Activities | -145.66% | Primarily due to increased payments for active inventory procurement of raw materials | | Net Cash Flow from Financing Activities | 263.52% | Primarily due to increased loans | [Fulfillment of Commitments](index=7&type=section&id=III.%20Unfulfilled%20Commitments%20by%20Controlling%20Shareholder%2C%20Shareholders%2C%20Related%20Parties%2C%20Acquirers%2C%20and%20the%20Company%20During%20the%20Reporting%20Period) During the reporting period, the company had no overdue unfulfilled commitments from related parties - The company had no overdue unfulfilled commitments during the reporting period[16](index=16&type=chunk) [Progress of Proceeds from Fundraising](index=7&type=section&id=V.%20Progress%20of%20Fundraising%20Investment%20Projects) The company raised RMB 781 million via convertible bonds in 2019, with RMB 164.21 million used and RMB 649.77 million remaining - In 2019, the company raised **RMB 781 million** through the issuance of convertible bonds[19](index=19&type=chunk) - As of March 31, 2021, **RMB 164.21 million** of the proceeds had been used, with a balance of **RMB 649.77 million**[19](index=19&type=chunk) [Entrusted Financial Management](index=8&type=section&id=VIII.%20Entrusted%20Financial%20Management) The company invested RMB 1 billion in bank wealth management products, with RMB 940 million unmatured and no overdue amounts Entrusted Financial Management (Unit: RMB 10,000) | Source of Funds | Amount Incurred | Unmatured Balance | Overdue Unrecovered Amount | | :--- | :--- | :--- | :--- | | Proceeds from Fundraising | 50,000 | 50,000 | 0 | | Own Funds | 50,000 | 44,000 | 0 | | **Total** | **100,000** | **94,000** | **0** | [Financial Statements](index=9&type=section&id=Item%204.%20Financial%20Statements) This section presents the company's consolidated and parent financial statements, including balance sheet, income statement, and cash flow [Financial Statements](index=9&type=section&id=I.%20Financial%20Statements) This chapter provides the company's consolidated and parent company balance sheets, income statements, and cash flow statements for the first quarter of 2021 [Consolidated Balance Sheet](index=9&type=section&id=1.%20Consolidated%20Balance%20Sheet) As of March 31, 2021, total assets were RMB 6.89 billion, total liabilities RMB 2.64 billion, and parent equity RMB 4.16 billion Key Items from Consolidated Balance Sheet (Unit: RMB) | Item | March 31, 2021 | December 31, 2020 | Change | | :--- | :--- | :--- | :--- | | Total Assets | 6,888,092,684.35 | 6,098,421,829.77 | +12.95% | | Total Liabilities | 2,639,024,947.24 | 1,940,372,435.92 | +36.01% | | Total Equity Attributable to Parent Company Owners | 4,162,561,944.13 | 4,072,046,596.17 | +2.22% | [Consolidated Income Statement](index=14&type=section&id=3.%20Consolidated%20Income%20Statement) In Q1 2021, revenue was RMB 768.63 million, operating profit RMB 110.77 million, and net profit RMB 90.51 million Key Items from Consolidated Income Statement (Unit: RMB) | Item | Current Period Amount | Prior Period Amount | Change | | :--- | :--- | :--- | :--- | | Total Operating Revenue | 768,634,765.51 | 858,085,174.68 | -10.42% | | Total Operating Costs | 669,937,594.87 | 788,179,819.03 | -14.99% | | Operating Profit | 110,771,134.27 | 72,428,988.77 | +52.94% | | Net Profit Attributable to Parent Company Shareholders | 90,513,693.17 | 60,812,826.53 | +48.84% | [Consolidated Cash Flow Statement](index=19&type=section&id=5.%20Consolidated%20Cash%20Flow%20Statement) Q1 2021 operating cash flow was -RMB 253.03 million, investing cash flow turned positive, and financing cash flow increased 263.52% Key Items from Consolidated Cash Flow Statement (Unit: RMB) | Item | Current Period Amount | Prior Period Amount | Change | | :--- | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | -253,025,068.19 | 554,097,911.70 | -145.66% | | Net Cash Flow from Investing Activities | 25,983,431.12 | -110,516,211.34 | -123.51% | | Net Cash Flow from Financing Activities | 185,176,191.66 | 50,940,079.45 | +263.52% | | Net Increase in Cash and Cash Equivalents | -41,865,445.41 | 494,521,779.81 | -108.47% | [Explanation of Financial Statement Adjustments](index=23&type=section&id=II.%20Explanation%20of%20Financial%20Statement%20Adjustments) The company adopted new lease standards from January 1, 2021, but no adjustments were required due to short-term lease operations - The company adopted new lease standards from January 1, 2021, and chose not to recognize right-of-use assets and lease liabilities for its short-term lease business, thus requiring no adjustment to opening balances[53](index=53&type=chunk) [Audit Report](index=24&type=section&id=III.%20Audit%20Report) This quarterly report has not been audited - The company's Q1 2021 report is unaudited[55](index=55&type=chunk)

[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) The company's board of directors, supervisory board, and all senior management guarantee the truthfulness, accuracy, and completeness of this quarterly report - The company's board of directors, supervisory board, and all senior management guarantee the truthfulness, accuracy, and completeness of this quarterly report, free from false records, misleading statements, or material omissions, and assume corresponding legal responsibilities[4](index=4&type=chunk) [Company Overview](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 for 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) In the first three quarters of 2020, the company achieved significant revenue growth of **40.48%**, with core business profitability improving as net profit excluding non-recurring items surged by **82.38%** and operating cash flow increased by **292.46%** Key Financial Indicators for the First Three Quarters of 2020 | Indicator | Year-to-Date as of Report Period End | Year-to-Date Change vs. Prior Year Period | | :--- | :--- | :--- | | Operating Revenue (RMB) | 3,307,863,556.44 | 40.48% | | Net Profit Attributable to Shareholders (RMB) | 201,082,951.47 | 0.31% | | Net Profit Attributable to Shareholders Excluding Non-Recurring Gains/Losses (RMB) | 187,167,170.36 | 82.38% | | Net Cash Flow from Operating Activities (RMB) | 754,277,078.98 | 292.46% | | Basic Earnings Per Share (RMB/share) | 0.28 | 0.00% | | Weighted Average Return on Net Assets | 5.14% | -0.45% | Non-Recurring Gains and Losses for the First Three Quarters of 2020 | Item | Year-to-Date Amount as of Report Period End (RMB) | Explanation | | :--- | :--- | :--- | | Government Grants | 16,280,153.25 | Primarily due to amortization of deferred income and receipt of government grants related to daily operations | | Funds Occupancy Fees Collected from Non-Financial Enterprises | 3,178,162.70 | - | | Net Other Non-Operating Income and Expenses | -2,447,140.42 | - | | **Total** | **17,011,175.53** | - | [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%B8%9C%E6%8C%81%E8%82%A1%E6%83%85%E5%86%B5%E8%A1%A8) As of Q3 2020, the company had **36,704** common shareholders, with the largest shareholder, Guogou Industrial Holdings Co., Ltd., holding **25.35%** of shares, nearly all of which are pledged and frozen, indicating potential control instability, while the Chairman and the second-largest shareholder form a concerted action relationship - As of the end of the reporting period, the company had a total of **36,704** common shareholders[12](index=12&type=chunk) Top Ten Shareholders' Holdings | Shareholder Name | Shareholding Percentage | Number of Shares Held | Share Status | | :--- | :--- | :--- | :--- | | Guogou Industrial Holdings Co., Ltd. | 25.35% | 182,050,800 | Pledged, Frozen | | Ningguo City Agricultural Production Materials Co., Ltd., Anhui Province | 11.41% | 81,951,500 | - | | Ningguo Zhitong Industrial Investment Center (Limited Partnership) | 4.99% | 35,800,009 | - | | Ningguo Economic and Technological Development Zone Construction Investment Co., Ltd., Anhui Province | 4.86% | 34,933,900 | - | | Jin Guoqing | 3.42% | 24,560,000 | - | - The **182,050,800** shares held by the largest shareholder, Guogou Industrial Holdings Co., Ltd., are all frozen, with **179,530,000** shares pledged[12](index=12&type=chunk) [Significant Matters](index=7&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 financial changes, strategic project progress, and the utilization of raised funds and entrusted wealth management activities [Analysis of Changes in Key Financial Data and Reasons](index=7&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) During the reporting period, the company experienced significant financial changes, including a **218.26%** increase in monetary funds and **114.52%** in accounts receivable, a **40.48%** rise in operating revenue, a **99.94%** drop in asset disposal gains, and a substantial improvement in operating cash flow Changes in Key Financial Indicators and Reasons | Item | Change Percentage | Reason for Change | | :--- | :--- | :--- | | **Assets and Liabilities Items** | | | | Monetary Funds | 218.26% | Due to increased sales collection during the reporting period | | Accounts Receivable | 114.52% | Due to increased credit sales during the reporting period | | Inventories | -48.71% | Due to decreased finished goods and raw material inventories | | **Profit Items** | | | | Operating Revenue | 40.48% | Due to increased sales during the reporting period | | Gains from Asset Disposal | -99.94% | Due to disposal of old factory land in the prior year period | | Net Profit Excluding Non-Recurring Gains/Losses | 82.38% | Due to increased sales during the reporting period | | **Cash Flow Items** | | | | Net Cash Flow from Operating Activities | 292.46% | Due to increased sales collection during the reporting period | | Net Cash Flow from Investing Activities | -75.13% (absolute change) | Due to increased purchases of bank wealth management products during the reporting period | | Net Cash Flow from Financing Activities | -100.34% | Due to convertible bond issuance for financing in the prior year period | [Progress of Significant Matters](index=8&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 steadily advanced several strategic projects during the reporting period, including the successful commissioning of the upstream pyrite project to secure raw material supply, nationwide promotion of the 'Tian Nong Wang' e-commerce platform, and smooth construction of monoammonium phosphate and new fertilizer projects, all aimed at enhancing competitiveness, capacity, and overall profitability - Upstream Pyrite Project: The Maweishan pyrite mine successfully commenced production and stable mining operations in May 2020, with an estimated annual output of approximately **120,000 tons**[20](index=20&type=chunk) - 'Internet+Agriculture' Initiative: The company's 'Tian Nong Wang' e-commerce platform, after stable operation in Anhui, is now being promoted nationwide[21](index=21&type=chunk) - Capacity Expansion Project: The **150,000-ton/year** powdered monoammonium phosphate renovation project is expected to be completed and operational by January 2021, ensuring raw material supply for compound fertilizer production[21](index=21&type=chunk)[22](index=22&type=chunk) - New Product Development: Funds raised from convertible bonds are being used to construct projects for **650,000 tons/year** of new fertilizers and **400,000 tons/year** of soil conditioners, promoting large-scale development of bio-organic and other new fertilizers[23](index=23&type=chunk) [Use of Raised Funds](index=10&type=section&id=%E4%BA%94%E3%80%81%E5%8B%9F%E9%9B%86%E8%B5%84%E9%87%91%E6%8A%95%E8%B5%84%E9%A1%B9%E7%9B%AE%E8%BF%9B%E5%B1%95%E6%83%85%E5%86%B5) In April 2019, the company successfully raised **RMB 781 million** net through convertible bond issuance, with **RMB 139.5 million** cumulatively used and a remaining balance of **RMB 679.9 million** as of September 30, 2020, including funds for wealth management products, all managed in dedicated accounts - In April 2019, the company publicly issued **RMB 800 million** in convertible corporate bonds, with actual net proceeds of **RMB 781 million**[27](index=27&type=chunk) - As of September 30, 2020, **RMB 139.5 million** of the raised funds had been used, with an account balance of **RMB 679.9 million** (including unexpired wealth management products)[27](index=27&type=chunk) [Entrusted Wealth Management](index=10&type=section&id=%E5%85%AB%E3%80%81%E5%A7%94%E6%89%98%E7%90%86%E8%B4%A2) During the reporting period, the company utilized idle raised funds and its own capital for entrusted wealth management, investing a total of **RMB 1.2 billion** in low-risk bank wealth management products, with an outstanding balance of **RMB 980 million** at period-end and no overdue unrecovered amounts Overview of Entrusted Wealth Management (Unit: RMB) | Source of Funds | Amount of Entrusted Wealth Management Transactions | Unexpired Balance | Overdue Unrecovered Amount | | :--- | :--- | :--- | :--- | | Raised Funds | 700,000,000 | 500,000,000 | 0 | | Own Capital | 500,000,000 | 480,000,000 | 0 | | **Total** | **1,200,000,000** | **980,000,000** | **0** | [Financial Statements](index=12&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, for the reporting period [Financial Statements](index=12&type=section&id=%E4%B8%80%E3%80%81%E8%B4%A2%E5%8A%A1%E6%8A%A5%E8%A1%A8) This chapter provides the company's consolidated and parent company balance sheets, income statements, and cash flow statements as of September 30, 2020, comprehensively reflecting its financial position, operating results, and cash flows for the reporting period [Consolidated Balance Sheet](index=12&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 September 30, 2020, the company's total assets were **RMB 5.939 billion**, a **6.48%** increase from year-end, and net assets attributable to shareholders were **RMB 3.979 billion**, up **3.75%**, indicating steady growth in asset scale and shareholder equity Key Items from Consolidated Balance Sheet (Unit: RMB) | Item | September 30, 2020 | December 31, 2019 | | :--- | :--- | :--- | | Total Assets | 5,938,508,694.33 | 5,577,034,612.46 | | Total Liabilities | 1,877,695,550.46 | 1,661,796,383.20 | | Total Equity Attributable to Parent Company Owners | 3,978,880,991.69 | 3,835,133,588.77 | [Consolidated Income Statement](index=17&type=section&id=3%E3%80%81%E5%90%88%E5%B9%B6%E6%9C%AC%E6%8A%A5%E5%91%8A%E6%9C%9F%E5%88%A9%E6%B6%A6%E8%A1%A8) For Q3 2020, the company reported **RMB 1.353 billion** in operating revenue, up **42.52%**, but net profit attributable to shareholders decreased by **31.34%** to **RMB 67 million**; for the first three quarters, cumulative operating revenue was **RMB 3.308 billion**, up **40.48%**, with net profit attributable to shareholders of **RMB 201 million**, largely flat year-over-year Key Items from Consolidated Income Statement (Unit: RMB) | Item | Jan-Sep 2020 | Jan-Sep 2019 | | :--- | :--- | :--- | | Total Operating Revenue | 3,307,863,556.44 | 2,354,655,308.03 | | Operating Profit | 248,121,014.24 | 256,692,617.94 | | Total Profit | 245,613,720.51 | 246,542,527.51 | | Net Profit Attributable to Parent Company Owners | 201,082,951.47 | 200,457,424.90 | [Consolidated Cash Flow Statement](index=27&type=section&id=7%E3%80%81%E5%90%88%E5%B9%B6%E5%B9%B4%E5%88%9D%E5%88%B0%E6%8A%A5%E5%91%8A%E6%9C%9F%E6%9C%AB%E7%8E%B0%E9%87%91%E6%B5%81%E8%A1%A8) In the first three quarters of 2020, the company's cash flow significantly improved, with net cash flow from operating activities surging by **292.46%** to **RMB 754 million** due to increased sales collection, while net cash outflows from investing and financing activities were **RMB 233 million** and **RMB 1.52 million**, respectively, bringing the period-end cash and cash equivalents balance to **RMB 756 million** Key Items from Consolidated Cash Flow Statement (Unit: RMB) | Item | Jan-Sep 2020 | Jan-Sep 2019 | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 754,277,078.98 | 192,192,003.20 | | Net Cash Flow from Investing Activities | -233,400,470.54 | -938,783,211.78 | | Net Cash Flow from Financing Activities | -1,524,709.33 | 447,277,380.68 | | Net Increase in Cash and Cash Equivalents | 519,351,899.11 | -299,313,827.90 | [Explanation of Financial Statement Adjustments](index=31&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) Effective January 1, 2020, the company adjusted its accounting policies in accordance with new revenue standards, primarily reclassifying 'Advances from Customers' to 'Contract Liabilities' and 'Other Current Liabilities,' which is a presentation adjustment with no impact on opening retained earnings or net assets - The company adopted new revenue standards for the first time, adjusting relevant items in the opening financial statements for 2020 to reflect the cumulative impact of the accounting policy change[83](index=83&type=chunk) Consolidated Balance Sheet Adjustments (January 1, 2020) | Account Title | Before Adjustment (RMB) | Adjustment Amount (RMB) | After Adjustment (RMB) | | :--- | :--- | :--- | :--- | | Advances from Customers | 141,722,516.82 | -141,722,516.82 | - | | Contract Liabilities | - | 130,343,112.31 | 130,343,112.31 | | Other Current Liabilities | - | 11,379,404.51 | 11,379,404.51 | [Audit Report](index=37&type=section&id=%E4%B8%89%E3%80%81%E5%AE%A1%E8%AE%A1%E6%8A%A5%E5%91%8A) The company's 2020 third-quarter report was not audited by an accounting firm - The company's third-quarter report is unaudited[85](index=85&type=chunk)

[Important Notice](index=2&type=section&id=Item%201.%20Important%20Notice) This section confirms the accuracy and completeness of the quarterly report, with all directors attending the review meeting [Board of Directors' Statement](index=2&type=section&id=Board%20of%20Directors%27%20Statement) The company's management and board ensure the truthfulness, accuracy, and completeness of this quarterly report, assuming legal responsibility - Management guarantees this report contains no false statements, misleading representations, or material omissions[4](index=4&type=chunk) - Jin Guoqing, the person in charge of the company, Fang Jun, the person in charge of accounting, and Fang Jun, the head of the accounting department, declare that the financial statements are true, accurate, and complete[4](index=4&type=chunk) [Company Profile](index=3&type=section&id=Item%202.%20Company%20Profile) This section details the company's key financial performance for the quarter and provides an overview of its shareholder structure [Key Accounting Data and Financial Indicators](index=3&type=section&id=Key%20Accounting%20Data%20and%20Financial%20Indicators) Q1 2020 saw strong performance growth, with operating revenue up **65.64%** and net profit up **41.24%**, alongside a significant **859.00%** increase in operating cash flow Q1 2020 Key Financial Indicators | Indicator | Current Period (RMB) | Prior Year Period (RMB) | YoY Change | | :--- | :--- | :--- | :--- | | Operating Revenue | 858,085,174.68 | 518,047,341.40 | 65.64% | | Net Profit Attributable to Shareholders of Listed Company | 60,812,826.53 | 43,055,431.72 | 41.24% | | Net Cash Flow from Operating Activities | 554,097,911.70 | -73,004,074.29 | 859.00% | | Basic Earnings Per Share (RMB/share) | 0.085 | 0.060 | 41.67% | | Weighted Average Return on Net Assets | 1.57% | 1.22% | 0.35% | | Total Assets (RMB) | 5,736,012,425.64 | 5,577,034,612.46 | 2.85% (vs. end of prior year) | | Net Assets Attributable to Shareholders of Listed Company (RMB) | 3,895,971,272.69 | 3,835,133,588.77 | 1.59% (vs. end of prior year) | - During the reporting period, the company's total non-recurring gains and losses amounted to **RMB 4.1784 million**, primarily from government subsidies and fees collected from non-financial enterprises for fund occupation[9](index=9&type=chunk) [Shareholder Information](index=4&type=section&id=Shareholder%20Information) At period-end, the company had **46,037** common shareholders; the largest, Guogou Industrial Holding Co., Ltd., held **25.35%** of shares, mostly pledged and frozen - The total number of common shareholders at the end of the reporting period was **46,037** households[11](index=11&type=chunk) Top Three Shareholders' Holdings | Shareholder Name | Shareholding Ratio | Number of Shares Held | Share Status | | :--- | :--- | :--- | :--- | | Guogou Industrial Holding Co., Ltd. | 25.35% | 182,050,800 | Pledged 179,530,000 shares, Frozen 182,050,800 shares | | Anhui Ningguo Agricultural Production Materials Co., Ltd. | 11.41% | 81,951,500 | - | | Jin Guoqing | 3.42% | 24,560,000 | - | - Ningguo Agricultural Production Materials Co., Ltd. and Mr. Jin Guoqing constitute a concerted action relationship, with Mr. Jin Guoqing being the largest shareholder of Ningguo Agricultural Production Materials Co., Ltd. and serving as the company's chairman[12](index=12&type=chunk) [Significant Events](index=6&type=section&id=Item%203.%20Significant%20Events) This section details major financial changes driven by sales growth, the company's entrusted wealth management activities, and confirms the absence of other significant undisclosed matters [Analysis of Major Financial Data Changes](index=6&type=section&id=Analysis%20of%20Major%20Financial%20Data%20Changes) Company financial indicators saw significant changes driven by increased sales, leading to substantial growth in cash, operating revenue, and net operating cash flow, alongside increased investment in wealth management Major Financial Indicator Changes and Reasons | Item | Change Rate | Explanation of Change | | :--- | :--- | :--- | | **Balance Sheet Items** | | | | Cash and Cash Equivalents | 207.79% | Due to increased sales collection in current period | | Accounts Receivable | 55.50% | Due to increased credit sales in current period | | **Income Statement Items** | | | | Operating Revenue | 65.64% | Due to increased sales in current period | | Operating Cost | 78.62% | Due to increased sales in current period | | Investment Income | -257.46% | Due to decreased profit from Lufa Industrial in current period | | **Cash Flow Statement Items** | | | | Net Cash Flow from Operating Activities | 859.00% | Due to increased sales collection in current period | | Net Cash Flow from Investing Activities | -179.18% | Due to increased purchase of wealth management products in current period | [Entrusted Wealth Management](index=8&type=section&id=Entrusted%20Wealth%20Management) The company purchased **RMB 900 million** in bank wealth management products using raised and own funds, with **RMB 800 million** outstanding and no overdue products Entrusted Wealth Management (Unit: RMB 10,000) | Specific Type | Source of Funds | Amount of Entrusted Wealth Management Transacted (RMB 10,000) | Outstanding Balance (RMB 10,000) | Overdue Unrecovered Amount (RMB 10,000) | | :--- | :--- | :--- | :--- | :--- | | Bank Wealth Management Products | Raised Funds | 70,000 | 60,000 | 0 | | Bank Wealth Management Products | Own Funds | 20,000 | 20,000 | 0 | | **Total** | | **90,000** | **80,000** | **0** | [Disclosure of Other Significant Matters](index=7&type=section&id=Disclosure%20of%20Other%20Significant%20Matters) The company reported no significant event progress, overdue commitments, securities investments, illegal guarantees, or controlling shareholder fund occupation during the period - The company had no significant event progress, share repurchases, or overdue unfulfilled commitments during the reporting period[17](index=17&type=chunk) - The company had no securities investments, derivatives investments, illegal external guarantees, or controlling shareholder fund occupation during the reporting period[18](index=18&type=chunk)[21](index=21&type=chunk) - The company did not engage in any research, communication, or interview activities during the reporting period[22](index=22&type=chunk) [Financial Statements](index=9&type=section&id=Item%204.%20Financial%20Statements) This section presents the company's unaudited consolidated and parent company financial statements for Q1 2020, including balance sheets, income statements, and cash flow statements [Financial Statement Details](index=9&type=section&id=Financial%20Statement%20Details) This section provides the company's unaudited Q1 2020 consolidated and parent company financial statements, reflecting significant revenue and profit growth and improved operating cash flow [Consolidated Balance Sheet](index=9&type=section&id=Consolidated%20Balance%20Sheet) As of March 31, 2020, total assets were **RMB 5.736 billion** (up **2.85%**), total liabilities **RMB 1.760 billion**, and parent equity **RMB 3.896 billion** Consolidated Balance Sheet Key Items (March 31, 2020) | Item | Amount (RMB) | Change vs. End of Prior Year | | :--- | :--- | :--- | | Total Assets | 5,736,012,425.64 | 2.85% | | Total Liabilities | 1,759,747,548.16 | 5.90% | | Total Equity Attributable to Parent Company Owners | 3,895,971,272.69 | 1.59% | [Consolidated Income Statement](index=14&type=section&id=Consolidated%20Income%20Statement) In Q1 2020, total operating revenue reached **RMB 858 million** (up **65.64%**), and net profit attributable to parent owners was **RMB 60.81 million** (up **41.24%**) Consolidated Income Statement Key Items (January-March 2020) | Item | Current Period Amount (RMB) | Prior Period Amount (RMB) | | :--- | :--- | :--- | | Total Operating Revenue | 858,085,174.68 | 518,047,341.40 | | Operating Profit | 72,428,988.77 | 52,514,833.09 | | Total Profit | 71,431,461.39 | 52,571,568.18 | | Net Profit Attributable to Parent Company Owners | 60,812,826.53 | 43,055,431.72 | [Consolidated Cash Flow Statement](index=19&type=section&id=Consolidated%20Cash%20Flow%20Statement) Q1 2020 net operating cash flow significantly reversed to **RMB 554 million** from **-RMB 73 million**, driven by sales collection, with investing cash outflow at **RMB 111 million** Consolidated Cash Flow Statement Key Items (January-March 2020) | Item | Current Period Amount (RMB) | Prior Period Amount (RMB) | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 554,097,911.70 | -73,004,074.29 | | Net Cash Flow from Investing Activities | -110,516,211.34 | -39,585,340.64 | | Net Cash Flow from Financing Activities | 50,940,079.45 | 74,078,676.94 | | Net Increase in Cash and Cash Equivalents | 494,521,779.81 | -38,510,737.99 | [Audit Status](index=23&type=section&id=Audit%20Status) The company's Q1 2020 report is unaudited - The company's first-quarter report is unaudited[49](index=49&type=chunk)

[Important Notice, Table of Contents, and Definitions](index=2&type=section&id=Section%201%20Important%20Notice%2C%20Table%20of%20Contents%2C%20and%20Definitions) The company's board ensures report accuracy, outlines the 2019 profit distribution plan, and highlights key risks including industry competition and raw material price fluctuations - The company's board of directors, supervisory board, and senior management guarantee the truthfulness, accuracy, and completeness of the report content, free from false records, misleading statements, or major omissions[3](index=3&type=chunk) - The company's 2019 profit distribution plan proposes a cash dividend of **0.8 yuan per 10 shares** (tax inclusive) to all shareholders, based on 718,126,381 shares[3](index=3&type=chunk) - The report highlights risks such as industry competition, raw material price fluctuations, environmental and safety production issues, and restrictions on controlling shareholder rights[3](index=3&type=chunk) [Company Profile and Key Financial Indicators](index=6&type=section&id=Section%202%20Company%20Profile%20and%20Key%20Financial%20Indicators) This chapter provides the company's basic information, contact details, and disclosure channels, primarily presenting key financial data for 2019, showing **operating revenue of 3.016 billion yuan** (down 3.55%) and **net profit attributable to shareholders of 238 million yuan** (down 20.66%), with **operating cash flow up 37.39%** and significant non-recurring gains from land compensation [Company Basic Information](index=6&type=section&id=I.%20Company%20Information) This section provides the company's registration information, stock code (002538), listing exchange (Shenzhen Stock Exchange), legal representative, and contact details Company Basic Information | Item | Content | | :--- | :--- | | **Stock Abbreviation** | Sierte | | **Stock Code** | 002538 | | **Listing Exchange** | Shenzhen Stock Exchange | | **Company Name** | Anhui Sierte Fertilizer Co., Ltd. | | **Legal Representative** | Jin Guoqing | [Key Accounting Data and Financial Indicators](index=7&type=section&id=VI.%20Key%20Accounting%20Data%20and%20Financial%20Indicators) In 2019, the company's operating revenue decreased by **3.55% to 3.016 billion yuan**, and net profit attributable to shareholders decreased by **20.66% to 238 million yuan**, with non-recurring items excluded net profit falling **49.55%**, while net cash flow from operating activities grew **37.39%** and total assets increased **14.07%** Key Accounting Data and Financial Indicators | Indicator | 2019 | 2018 | Year-on-Year Change | | :--- | :--- | :--- | :--- | | **Operating Revenue (yuan)** | 3,015,931,696.40 | 3,126,808,597.13 | -3.55% | | **Net Profit Attributable to Shareholders of Listed Company (yuan)** | 238,123,176.89 | 300,137,644.18 | -20.66% | | **Net Profit Attributable to Shareholders of Listed Company Excluding Non-Recurring Gains and Losses (yuan)** | 141,189,515.49 | 279,838,078.91 | -49.55% | | **Net Cash Flow from Operating Activities (yuan)** | 287,052,349.89 | 208,925,186.52 | 37.39% | | **Basic Earnings Per Share (yuan/share)** | 0.33 | 0.42 | -21.43% | | **Total Assets (yuan)** | 5,577,034,612.46 | 4,889,125,588.44 | 14.07% | | **Net Assets Attributable to Shareholders of Listed Company (yuan)** | 3,835,133,588.77 | 3,518,652,125.75 | 8.99% | [Quarterly Key Financial Indicators](index=8&type=section&id=VIII.%20Quarterly%20Key%20Financial%20Indicators) In 2019, the company achieved its highest operating revenue of **949 million yuan** and net profit attributable to shareholders of **97.73 million yuan** in the third quarter, with operating cash flow turning positive in the second quarter and peaking at **202 million yuan** in the third quarter Quarterly Key Financial Indicators | Indicator (yuan) | Q1 | Q2 | Q3 | Q4 | | :--- | :--- | :--- | :--- | :--- | | **Operating Revenue** | 518,047,341.40 | 887,578,115.82 | 949,029,850.81 | 661,276,388.37 | | **Net Profit Attributable to Shareholders of Listed Company** | 43,055,431.72 | 59,671,090.57 | 97,730,902.61 | 37,665,751.99 | | **Net Cash Flow from Operating Activities** | -73,004,074.29 | 63,497,337.78 | 201,698,739.71 | 94,860,346.69 | [Non-Recurring Gains and Losses Items and Amounts](index=8&type=section&id=IX.%20Non-Recurring%20Gains%20and%20Losses%20Items%20and%20Amounts) In 2019, the company's total non-recurring gains and losses amounted to **96.93 million yuan**, significantly impacting net profit, primarily from **97.62 million yuan** in non-current asset disposal gains (mainly land compensation) and **23.24 million yuan** in government subsidies, partially offset by **11.08 million yuan** in other non-operating expenses mainly due to donations Non-Recurring Gains and Losses Items and Amounts | Item | 2019 Amount (yuan) | Explanation | | :--- | :--- | :--- | | **Gains and Losses from Disposal of Non-Current Assets** | 97,621,674.31 | Primarily due to land acquisition compensation received during the reporting period | | **Government Subsidies Included in Current Profit and Loss** | 23,240,488.34 | Primarily due to amortization of deferred income and government subsidies related to daily operating activities | | **Other Non-Operating Income and Expenses** | -11,084,107.91 | Primarily due to external donations during the reporting period | | **Total** | 96,933,661.40 | - | [Company Business Overview](index=11&type=section&id=Section%203%20Company%20Business%20Overview) This chapter outlines the company's core business, industry position, and core competencies, highlighting Sierte's integrated phosphate and compound fertilizer value chain, diversified product portfolio including new fertilizers, and its significant industry standing amidst tightening environmental regulations, supported by its resource, technology, marketing, and geographical advantages [Main Business and Industry Position](index=11&type=section&id=I.%20Main%20Business%20Activities%20of%20the%20Company%20During%20the%20Reporting%20Period) The company's main business involves R&D, production, and sales of compound and specialty fertilizers, forming an integrated value chain from pyrite-based acid production to phosphate and compound fertilizers, with its monoammonium phosphate and pyrite-based acid output ranking among the top in the industry, while systemic environmental regulations ("Three Phosphates"整治) are driving industry consolidation - The company has established a complete integrated value chain from pyrite-based acid production to phosphate and compound fertilizer manufacturing and sales, leveraging its Maweishan pyrite mine in Xuancheng and Kaiyang phosphate mine in Guizhou[28](index=28&type=chunk) - The company's product portfolio comprises three main systems: soil-testing and customized fertilizers, functional fertilizers (e.g., slow/controlled-release fertilizers, water-soluble fertilizers), and new soil improvement products (e.g., bio-organic fertilizers, soil conditioners)[28](index=28&type=chunk) - 2019 marked the first year of nationwide systemic environmental remediation in the phosphorus chemical industry, with the Ministry of Ecology and Environment launching a special inspection and rectification campaign for "Three Phosphates," leading to reduced industry capacity and increased concentration[31](index=31&type=chunk) [Significant Changes in Major Assets](index=13&type=section&id=II.%20Significant%20Changes%20in%20Major%20Assets) During the reporting period, the company's major assets underwent significant changes, with cash and cash equivalents decreasing due to bond and loan repayments, long-term equity investments increasing from capital injection into Guizhou Lufa Industrial Co., Ltd., and bonds payable substantially rising due to the issuance of **800 million yuan** in convertible bonds Significant Changes in Major Assets | Major Assets/Liabilities | Explanation of Significant Change | | :--- | :--- | | **Cash and Cash Equivalents** | Decreased from the beginning of the period, mainly due to repayment of matured corporate bonds and interest, short-term bank loans, and temporary cash management of convertible bond funds | | **Long-Term Equity Investments** | Increased from the beginning of the period, mainly due to capital injection into Guizhou Lufa Industrial Co., Ltd. during the current period | | **Bonds Payable** | Increased from the beginning of the period, mainly due to the company's issuance of **800 million yuan** in convertible bonds during the current period | [Analysis of Core Competencies](index=14&type=section&id=III.%20Analysis%20of%20Core%20Competencies) The company's core competencies include a complete integrated value chain from mining to finished products, strong R&D and innovation capabilities through university collaborations, an established marketing network, superior product quality, integrated agricultural services, a strategic location in a major fertilizer sales region, and a stable talent pool - Through upstream and downstream industrial integration, the company has formed a complete integrated value chain from pyrite-based acid production to phosphate and compound fertilizer manufacturing and sales, effectively controlling costs and enhancing risk resistance[36](index=36&type=chunk) - The company is a National High-Tech Enterprise with a National Enterprise Technology Center, and has established the "China Agricultural University-Sierte Soil Testing and Formula Fertilization Research Base" in collaboration with research institutions like China Agricultural University[36](index=36&type=chunk) - The company has developed a new "test, research, formulate, produce, supply, apply" integrated agricultural service mechanism, providing customized production and comprehensive services to reach the "last mile" of agricultural support[41](index=41&type=chunk) [Management Discussion and Analysis](index=16&type=section&id=Section%204%20Management%20Discussion%20and%20Analysis) In 2019, guided by "seeking progress while maintaining stability and innovative development," the company actively integrated upstream resources, such as the Maweishan pyrite mine's operation and increased stake in Guizhou Lufa, while vigorously developing new fertilizers like bio-organic fertilizers; financially, operating revenue was **3.016 billion yuan** (down 3.55%) and net profit attributable to shareholders was **238 million yuan** (down 20.66%), with revenue decline mainly due to monoammonium phosphate and export business downturns, and convertible bond issuance secured funding for new fertilizer projects, though risks like industry competition, capacity expansion, raw material price volatility, and controlling shareholder restructuring remain [Annual Business Overview](index=16&type=section&id=I.%20Overview) In 2019, the company focused on "seeking progress while maintaining stability and innovative development" by integrating upstream resources (Maweishan pyrite mine operation, increasing stake in Guizhou Lufa to **40%**), issuing **800 million yuan** in convertible bonds for new fertilizer projects, expanding "Internet+Agriculture" initiatives, steadily advancing sales, and developing circular economy and health industries - The company's Maweishan pyrite mine in Xuancheng City, Xuancheng District, with a **380,000 tons/year** mining technical upgrade project, has entered formal production, which will effectively reduce raw material procurement costs[45](index=45&type=chunk) - The company completed an equity increase in its largest phosphate rock supplier, Guizhou Lufa, raising its stake to **40%** to secure raw material supply[46](index=46&type=chunk) - The company successfully issued **800 million yuan** in convertible corporate bonds, with proceeds allocated to constructing projects for **650,000 tons/year** of new fertilizers and **400,000 tons/year** of soil conditioners[47](index=47&type=chunk) [Analysis of Main Business](index=18&type=section&id=II.%20Analysis%20of%20Main%20Business) In 2019, the company's main business revenue was **3.016 billion yuan**, a **3.55%** year-on-year decrease, with chemical fertilizer revenue at **2.824 billion yuan**, down **6.31%**, primarily due to a **21.65%** decline in monoammonium phosphate sales, while ternary compound fertilizer revenue slightly increased by **0.66%**, and international market revenue sharply fell by **49.93%** due to intense competition, resulting in a chemical fertilizer manufacturing gross margin of **20.93%**, down **2.5 percentage points** 2019 Operating Revenue by Category | Category | 2019 Operating Revenue (yuan) | % of Total Revenue | Year-on-Year Change | | :--- | :--- | :--- | :--- | | **By Industry** | | | | | Chemical Fertilizers | 2,824,286,176.96 | 93.65% | -6.31% | | **By Product** | | | | | Ternary Compound Fertilizers | 1,676,904,976.09 | 55.60% | 0.66% | | Monoammonium Phosphate | 957,845,917.03 | 31.76% | -21.65% | | **By Region** | | | | | Domestic Market | 2,828,260,558.71 | 93.78% | 2.77% | | International Market | 187,671,137.69 | 6.22% | -49.93% | Gross Margin by Industry/Product | Industry/Product | Operating Revenue (yuan) | Operating Cost (yuan) | Gross Margin | Gross Margin Year-on-Year Change | | :--- | :--- | :--- | :--- | :--- | | **Chemical Fertilizers** | 2,824,286,176.96 | 2,233,162,281.75 | 20.93% | -2.50% | | **Ternary Compound Fertilizers** | 1,676,904,976.09 | 1,324,188,253.22 | 21.03% | -1.11% | | **Monoammonium Phosphate** | 957,845,917.03 | 769,816,747.35 | 19.63% | -5.78% | - Sales to the **top five customers accounted for 11.11%** of total annual sales, while purchases from the **top five suppliers accounted for 37.93%** of total annual procurement, with **8.35%** of that from related parties[68](index=68&type=chunk)[70](index=70&type=chunk) [Analysis of Non-Core Business](index=23&type=section&id=III.%20Analysis%20of%20Non-Core%20Business) In 2019, non-core business significantly impacted profit, with investment income at **-32.25 million yuan** primarily due to losses from associate Guizhou Lufa, fair value change gains of **10.52 million yuan** from wealth management products and structured deposits, and non-operating expenses reaching **11.59 million yuan**, mainly from external donations Non-Core Business Impact on Profit | Item | Amount (yuan) | % of Total Profit | Explanation of Cause | | :--- | :--- | :--- | :--- | | **Investment Income** | -32,254,507.69 | -11.00% | Primarily due to losses from associate Guizhou Lufa accounted for using the equity method | | **Gains and Losses from Fair Value Changes** | 10,521,890.41 | 3.59% | Primarily due to changes in the fair value of wealth management products and structured deposits at period-end | | **Non-Operating Expenses** | 11,588,579.32 | 3.95% | Primarily due to external donations during the current period | [Analysis of Assets and Liabilities](index=24&type=section&id=IV.%20Analysis%20of%20Assets%20and%20Liabilities) As of the end of 2019, the company's total assets were **5.577 billion yuan**, with cash and cash equivalents decreasing from **12.67% to 4.27%** of total assets due to debt repayment, long-term equity investments increasing from **8.09% to 10.07%** due to capital injection into associates, and short-term borrowings decreasing from **9.41% to 4.38%** of total liabilities Assets and Liabilities Status | Item | Amount at 2019 Year-End (yuan) | % of Total Assets | Amount at 2019 Year-Start (yuan) | % of Total Assets | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | | **Cash and Cash Equivalents** | 238,316,099.13 | 4.27% | 619,439,446.99 | 12.67% | -8.40% | | **Long-Term Equity Investments** | 561,496,928.64 | 10.07% | 395,332,942.93 | 8.09% | 1.98% | | **Construction in Progress** | 136,042,764.27 | 2.44% | 258,876,156.68 | 5.29% | -2.85% | | **Short-Term Borrowings** | 244,500,000.00 | 4.38% | 460,000,000.00 | 9.41% | -5.03% | [Analysis of Investment Status](index=25&type=section&id=V.%20Analysis%20of%20Investment%20Status) During the reporting period, the company's investment activities significantly increased, with total investments reaching **1.43 billion yuan**, a **4668.33%** year-on-year growth, including a **200 million yuan** capital injection into associate Guizhou Lufa Industrial Co., Ltd. (increasing stake to **40%**), establishment of wholly-owned subsidiary Sierte Ecological Agriculture, and acquisition of **100%** equity in Xuancheng Huaxin Health Examination Clinic, alongside substantial investments in bank wealth management products using both raised and自有 funds - The company injected **200 million yuan** into associate Guizhou Lufa Industrial Co., Ltd., increasing its stake to **40.00%** to secure phosphate rock supply[89](index=89&type=chunk) - The company acquired **100%** equity in Xuancheng Huaxin Health Examination Clinic Co., Ltd. for **30.50 million yuan** to advance its health industry strategic layout[89](index=89&type=chunk) - In 2019, the company raised **781 million yuan** net from issuing convertible corporate bonds, primarily for projects producing **650,000 tons/year** of new fertilizers and **400,000 tons/year** of soil conditioners, with some idle proceeds used for cash management[93](index=93&type=chunk)[95](index=95&type=chunk) [Company's Future Development Outlook](index=34&type=section&id=IX.%20Outlook%20for%20the%20Company%27s%20Future%20Development) The company anticipates the compound fertilizer industry will evolve towards green, scaled, and specialized development with increased concentration, and its strategy will focus on "scale, resources, high-end, informatization, and modernization" by continuing its ecological formula fertilizer path; the 2020 operating plan includes strengthening capital operations, vigorously developing bio-organic fertilizers, establishing efficient supply chains, ensuring successful completion of fundraising projects, and improving corporate governance, while acknowledging risks such as industry development, capacity expansion, raw material price volatility, environmental policies, safety production, and controlling shareholder ownership disputes - The future compound fertilizer industry will develop towards cost reduction, efficiency improvement, quality enhancement, emission reduction, and green, scaled, specialized, and intelligent directions, with further increases in industry concentration[109](index=109&type=chunk) - The company's 2020 operating plan includes strengthening capital operations, vigorously developing bio-organic fertilizers, establishing an efficient supply chain, ensuring timely completion of fundraising projects, improving corporate governance, and strengthening the executive team[112](index=112&type=chunk)[113](index=113&type=chunk)[114](index=114&type=chunk) - The main risks faced by the company include industry development risks, market sales risks due to capacity expansion, raw material price fluctuation risks, environmental protection policy risks, safety production risks, and risks related to controlling shareholder rights restrictions and ownership disputes[117](index=117&type=chunk)[118](index=118&type=chunk)[119](index=119&type=chunk)[122](index=122&type=chunk) [Significant Events](index=38&type=section&id=Section%205%20Significant%20Events) This chapter discloses significant corporate governance and operational matters for the year, including the 2019 profit distribution plan of **0.8 yuan per 10 shares**, normal fulfillment of commitments by the company and related parties, the controlling shareholder's **25.35%** stake being fully pledged and frozen and entering restructuring, a change in accounting firm, changes in the scope of consolidation due to new and acquired subsidiaries, and related party transactions with Guizhou Lufa and the acquisition of Xuancheng Huaxin Health Examination [Profit Distribution and Capital Reserve Conversion](index=38&type=section&id=I.%20Profit%20Distribution%20of%20Ordinary%20Shares%20and%20Capital%20Reserve%20Conversion%20to%20Share%20Capital) The company's 2019 profit distribution plan proposes a cash dividend of **0.8 yuan per 10 shares** (tax inclusive), with no bonus shares or capital reserve conversions, and cash dividends have been consistently paid over the past three years, with the 2019 amount representing **24.13%** of net profit attributable to shareholders Profit Distribution History | Dividend Year | Dividend per 10 Shares (yuan) (tax inclusive) | Cash Dividend Amount (yuan) | Ratio of Net Profit Attributable to Ordinary Shareholders of the Listed Company in Consolidated Financial Statements | | :--- | :--- | :--- | :--- | | **2019** | 0.8 | 57,450,110.48 | 24.13% | | **2018** | 1.0 | 71,812,028.30 | 23.93% | | **2017** | 1.5 | 107,718,042.45 | 50.58% | [Integrity Status of Controlling Shareholder and Actual Controller](index=45&type=section&id=XIV.%20Integrity%20Status%20of%20the%20Company%2C%20its%20Controlling%20Shareholder%2C%20and%20Actual%20Controller) During the reporting period, all shares (representing **25.35%** of total share capital) held by the company's controlling shareholder, Guogou Industrial Holdings Co., Ltd., were successively frozen and rotationally frozen by multiple courts, and on November 5, 2019, the Hefei Intermediate People's Court ruled to accept the restructuring application of Industrial Holdings and its parent company Guogou Investment Co., Ltd. and other related entities, while the actual controller's Guogou Investment Co., Ltd. also had multiple debt defaults - The controlling shareholder, Industrial Holdings, had all **182,050,800 shares** (representing **25.35%** of the total share capital) frozen by the courts[122](index=122&type=chunk)[147](index=147&type=chunk) - On November 5, 2019, the Hefei Intermediate People's Court in Anhui Province ruled to accept the restructuring application of the controlling shareholder, Industrial Holdings, and several enterprises under its actual controller[122](index=122&type=chunk)[148](index=148&type=chunk) [Significant Related Party Transactions](index=46&type=section&id=XVI.%20Significant%20Related%20Party%20Transactions) During the reporting period, the company engaged in two types of significant related party transactions: routine operations included purchasing phosphate rock from associate Guizhou Lufa Industrial Co., Ltd. for **202 million yuan**, and asset acquisition involved wholly-owned subsidiary Xinhong Health acquiring **100%** equity in Xuancheng Huaxin Health Examination Clinic Co., Ltd. for **30.50 million yuan**, which constituted a related party transaction Significant Related Party Transactions | Related Party | Type of Related Party Transaction | Content of Related Party Transaction | Amount Incurred in Current Period (yuan) | | :--- | :--- | :--- | :--- | | **Guizhou Lufa Industrial Co., Ltd.** | Purchase of Goods | Purchase of raw materials and sale of phosphate rock | 202,159,500 | | **Xuancheng Dongchen Health Industry Management Co., Ltd. and Fang Wanpeng** | Asset Acquisition | Acquisition of 100% equity in Xuancheng Huaxin Health Examination Clinic Co., Ltd. | 30,500,000 | [Social Responsibility Performance](index=51&type=section&id=XVIII.%20Social%20Responsibility%20Performance) The company actively fulfilled its social responsibilities, donating **10 million yuan** through the Ningguo City Charity Association to disaster-stricken Ningguo City, Anhui Province, following Typhoon Lekima in August 2019, with Chairman Jin Guoqing personally contributing **1 million yuan**, and the report also details the company's environmental protection efforts as a key pollutant-discharging entity, including pollutant emission data, operation of pollution control facilities, and emergency response plans for environmental incidents - In August 2019, in response to Typhoon Lekima, the company donated **10 million yuan** in cash to Ningguo City, its location, and the chairman personally donated **1 million yuan**[167](index=167&type=chunk) - The company and its subsidiaries are listed as key pollutant-discharging entities by environmental protection authorities, and the report details the emission concentrations, total amounts, and compliance standards for major pollutants (e.g., fluoride, sulfur dioxide, COD) from each branch[170](index=170&type=chunk)[171](index=171&type=chunk)[173](index=173&type=chunk) [Share Changes and Shareholder Information](index=57&type=section&id=Section%206%20Share%20Changes%20and%20Shareholder%20Information) This chapter discloses changes in the company's share capital structure and major shareholder information, noting a slight increase in total share capital from **718,120,283 shares to 718,126,381 shares** due to convertible bond conversions, with **44,696 shareholders** at period-end, and the top two shareholders being Guogou Industrial Holdings Co., Ltd. (**25.35%**) and Anhui Ningguo Agricultural Production Materials Co., Ltd. (**11.41%**), while the controlling shareholder's entire stake is pledged and frozen [Share Change Status](index=57&type=section&id=I.%20Share%20Change%20Status) During the reporting period, the company's total share capital changed due to the conversion of "Sierte Convertible Bonds," increasing from **718,120,283 shares to 718,126,381 shares**, a net increase of **6,098 shares**, with minor adjustments between restricted and unrestricted shares due to executive shareholding changes - Due to convertible bond conversions, the company's total share capital increased from **718,120,283 shares to 718,126,381 shares**, an increase of **6,098 shares**[187](index=187&type=chunk)[188](index=188&type=chunk) [Shareholders and Actual Controller Information](index=60&type=section&id=III.%20Shareholders%20and%20Actual%20Controller%20Information) As of the end of 2019, the company had **44,696 shareholders**, with Guogou Industrial Holdings Co., Ltd. as the controlling shareholder (**25.35%** stake) and Mr. Yuan Qihong as the actual controller, while Anhui Ningguo Agricultural Production Materials Co., Ltd. was the second largest shareholder (**11.41%** stake), and all shares held by the controlling shareholder were pledged and frozen Top Shareholders | Shareholder Name | Shareholder Nature | Shareholding Ratio | Number of Shares Held at Period-End | Share Status | | :--- | :--- | :--- | :--- | :--- | | **Guogou Industrial Holdings Co., Ltd.** | Domestic Non-State-Owned Legal Person | 25.35% | 182,050,800 | Pledged/Frozen | | **Anhui Ningguo Agricultural Production Materials Co., Ltd.** | Domestic Non-State-Owned Legal Person | 11.41% | 81,951,500 | Pledged | | **Jin Guoqing** | Domestic Natural Person | 3.42% | 24,560,000 | - | - The controlling shareholder, Guogou Industrial Holdings Co., Ltd., had all **182,050,800 shares** held in the company pledged and frozen[195](index=195&type=chunk) [Convertible Corporate Bonds Related Information](index=66&type=section&id=Section%208%20Convertible%20Corporate%20Bonds%20Related%20Information) This chapter details the company's "Sierte Convertible Bonds" issued in 2019, noting that the conversion price was adjusted from **6.25 yuan/share to 6.15 yuan/share** due to the 2018 equity distribution, with a cumulative **6,098 shares** converted from October 14, 2019, to year-end, representing a minimal portion of the total issuance, and also listing the top ten convertible bondholders at period-end [Conversion Price Adjustment](index=66&type=section&id=I.%20Historical%20Adjustments%20to%20Conversion%20Price) Due to the company's 2018 equity distribution (a dividend of **1.00 yuan per 10 shares**), the conversion price of "Sierte Convertible Bonds" was adjusted from an initial **6.25 yuan/share to 6.15 yuan/share**, effective May 30, 2019 - Due to the implementation of the 2018 equity distribution, the conversion price of "Sierte Convertible Bonds" was adjusted from **6.25 yuan/share to 6.15 yuan/share**[209](index=209&type=chunk) [Cumulative Conversion Status](index=66&type=section&id=II.%20Cumulative%20Conversion%20Status) "Sierte Convertible Bonds" entered the conversion period on October 14, 2019, and as of December 31, 2019, a cumulative **37,600 yuan** had been converted into **6,098 company shares**, representing **0.00%** of the total shares issued before conversion began, with the unconverted amount representing nearly **100%** of the total issuance Cumulative Convertible Bond Conversion | Convertible Bond Abbreviation | Total Issued (units) | Cumulative Converted Shares (shares) | Unconverted Amount (yuan) | % of Unconverted Amount to Total Issued Amount | | :--- | :--- | :--- | :--- | :--- | | **Sierte Convertible Bonds** | 8,000,000 | 6,098 | 799,962,400.00 | 100.00% | [Directors, Supervisors, Senior Management, and Employees](index=68&type=section&id=Section%209%20Directors%2C%20Supervisors%2C%20Senior%20Management%2C%20and%20Employees) This chapter discloses the basic information of the company's governance and employee structure, noting a stable board, supervisory board, and senior management team, with one independent director change due to term expiration, a total workforce of **2,978 employees**, predominantly production personnel, and a well-established compensation and training system supporting the company's development strategy [Compensation of Directors, Supervisors, and Senior Management](index=73&type=section&id=IV.%20Compensation%20of%20Directors%2C%20Supervisors%2C%20and%20Senior%20Management) The compensation for the company's directors, supervisors, and senior management is reviewed by the Remuneration and Assessment Committee and approved by the Board of Directors or Shareholders' Meeting, with the total remuneration paid to key management personnel in 2019 amounting to **3.0532 million yuan**, including **981,100 yuan** in pre-tax remuneration for Chairman Jin Guoqing - In 2019, the total remuneration paid by the company to key management personnel (directors, supervisors, and senior executives) was **3.0532 million yuan**[233](index=233&type=chunk)[235](index=235&type=chunk) [Company Employee Information](index=75&type=section&id=V.%20Company%20Employee%20Information) As of the end of the reporting period, the company had a total of **2,978 employees**, with production personnel being the largest group at **1,627 individuals** (**54.6%** of the total), followed by technical and administrative staff, and the vast majority of employees (**2,781 individuals**) holding college degrees or lower Employee Professional Composition | Professional Composition | Number of People (persons) | | :--- | :--- | | **Production Personnel** | 1,627 | | **Sales Personnel** | 352 | | **Technical Personnel** | 516 | | **Financial Personnel** | 33 | | **Administrative Personnel** | 450 | | **Total** | **2,978** | [Corporate Governance](index=77&type=section&id=Section%2010%20Corporate%20Governance) This chapter describes the company's governance structure and operations, confirming a sound corporate governance framework compliant with regulatory requirements across shareholder meetings, board and supervisory board operations, relationship with the controlling shareholder, and information disclosure, maintaining independence in business, personnel, assets, organization, and finance, and holding one annual and two extraordinary general meetings during the reporting period [Independence of the Company from its Controlling Shareholder](index=78&type=section&id=II.%20Independence%20of%20the%20Company%20from%20its%20Controlling%20Shareholder%20in%20Business%2C%20Personnel%2C%20Assets%2C%20Organization%2C%20and%20Finance) The company maintains complete independence from its controlling shareholder in business, personnel, assets, organization, and finance, possessing independent operations and autonomous management capabilities, a sound corporate governance structure, and no instances of illegal interference by the controlling shareholder in company decisions or operations - The company is completely separate from its shareholders in terms of business, personnel, assets, organization, and finance, possessing independent business operations and the ability to autonomously develop and operate in the market, with a complete supply, production, and sales system[249](index=249&type=chunk) [Internal Control Evaluation Report](index=82&type=section&id=IX.%20Internal%20Control%20Evaluation%20Report) Based on the company's board self-assessment report and the internal control attestation report issued by Rongcheng Certified Public Accountants, the company maintained effective internal controls over financial reporting in all material respects as of December 31, 2019, with no significant or material internal control deficiencies identified during the reporting period - The internal control attestation report concluded that as of December 31, 2019, the company maintained effective internal controls over financial reporting in all material respects, in accordance with the "Basic Standards for Enterprise Internal Control" and relevant regulations[268](index=268&type=chunk) - During the reporting period, the company found no significant or material deficiencies related to financial or non-financial reporting[266](index=266&type=chunk)[267](index=267&type=chunk) [Corporate Bonds Related Information](index=85&type=section&id=Section%2011%20Corporate%20Bonds%20Related%20Information) This chapter discloses information on the company's outstanding corporate bonds, noting that "14 Sierte 01" matured and was fully repaid in October 2019, while "15 Sierte Bond" remains outstanding with a year-end balance of **608,200 yuan**, and the company maintains a good credit standing with a stable AA rating, showing significant improvements in current and quick ratios due to reduced current liabilities, though the interest coverage ratio decreased [Corporate Bond Basic Information](index=86&type=section&id=I.%20Corporate%20Bond%20Basic%20Information) During the reporting period, the company had two corporate bonds: "14 Sierte 01" matured and was repaid on October 21, 2019, while "15 Sierte Bond" is due on November 18, 2020, with a year-end balance of **608,200 yuan** and a coupon rate of **4.98%** Corporate Bond Basic Information | Bond Abbreviation | Bond Code | Maturity Date | Year-End Bond Balance (10,000 yuan) | Interest Rate | | :--- | :--- | :--- | :--- | :--- | | **14 Sierte 01** | 112230 | 2019年10月21日 | 0 | 6.50% | | **15 Sierte Bond** | 112295 | 2020年11月18日 | 60.82 | 4.98% | [Key Solvency Financial Indicators](index=87&type=section&id=VIII.%20Key%20Accounting%20Data%20and%20Financial%20Indicators%20for%20the%20Company%27s%20Last%202%20Years%20as%20of%20the%20End%20of%20the%20Reporting%20Period) As of the end of 2019, the company's solvency indicators changed, with current and quick ratios significantly increasing to **290.82% and 190.56%** respectively, primarily due to reduced current liabilities, while the asset-liability ratio slightly rose to **29.28%**, EBITDA decreased by **10.32%**, and the interest coverage ratio fell from **8.83 times to 6.6 times** Key Solvency Financial Indicators | Item | 2019 | 2018 | Period-on-Period Change Rate | | :--- | :--- | :--- | :--- | | **EBITDA (10,000 yuan)** | 51,122.89 | 57,005.73 | -10.32% | | **Current Ratio** | 290.82% | 186.84% | 103.98% | | **Asset-Liability Ratio** | 29.28% | 26.65% | 2.63% | | **Quick Ratio** | 190.56% | 118.89% | 71.67% | | **Interest Coverage Ratio** | 6.6 | 8.83 | -25.25% | [Financial Report](index=89&type=section&id=Section%2012%20Financial%20Report) This chapter presents the audited 2019 financial report, for which Rongcheng Certified Public Accountants (Special General Partnership) issued a standard unqualified audit opinion, with key audit matters being revenue recognition and inventory impairment; this year, the company adopted new financial instrument standards, retrospectively adjusting the classification and measurement of financial assets, primarily reclassifying some notes receivable to financial assets held for collection, and the financial statements comprehensively detail the company's assets, liabilities, profit, cash flow, and owner's equity [Audit Report](index=89&type=section&id=I.%20Audit%20Report) Rongcheng Certified Public Accountants (Special General Partnership) audited the company's 2019 financial statements and issued a standard unqualified audit opinion, concluding that the financial statements fairly present the company's financial position and operating results in all material respects, with key audit matters being revenue recognition and inventory impairment - The auditing firm issued a standard unqualified audit opinion, stating that the financial statements fairly present the company's financial position, operating results, and cash flows for 2019[291](index=291&type=chunk) - Key audit matters for this period's financial statement audit were revenue recognition and inventory impairment[293](index=293&type=chunk)[294](index=294&type=chunk)[297](index=297&type=chunk) [Changes in Consolidation Scope](index=117&type=section&id=III.%20Company%20Basic%20Information) During the reporting period, the company's scope of consolidation changed, adding two subsidiaries: Xuancheng Huaxin Health Examination Clinic Co., Ltd. through a business combination not under common control, and the newly established Anhui Sierte Ecological Agriculture Technology Co., Ltd., while one subsidiary, Anhui Xinhong Health Management Co., Ltd., was deregistered - During the reporting period, the company added a new subsidiary, Xuancheng Huaxin Health Examination Clinic Co., Ltd., through a business combination not under common control[350](index=350&type=chunk) - During the reporting period, the company established a new wholly-owned subsidiary, Anhui Sierte Ecological Agriculture Technology Co., Ltd.[350](index=350&type=chunk) - During the reporting period, the company deregistered its wholly-owned subsidiary, Anhui Xinhong Health Management Co., Ltd.[350](index=350&type=chunk) [Changes in Significant Accounting Policies and Estimates](index=118&type=section&id=V.%20Significant%20Accounting%20Policies%20and%20Estimates) In 2019, the company adopted new financial instrument standards issued by the Ministry of Finance, adjusting the recognition, classification, and measurement of financial instruments, primarily reclassifying eligible bank acceptance bills from "Notes Receivable" to the new "Receivables Financing" item, measured at fair value, using retrospective adjustment without restating comparative financial statement data - The company adopted new financial instrument standards effective January 1, 2019, retrospectively adjusting the classification and measurement (including impairment) of financial instruments[554](index=554&type=chunk)[555](index=555&type=chunk) - The change in accounting policy resulted in the split of "Notes and Accounts Receivable" on the balance sheet into "Notes Receivable," "Accounts Receivable," and the new "Receivables Financing" item[553](index=553&type=chunk) - At the beginning of the year, **68.74 million yuan** of notes receivable in the consolidated financial statements were reclassified to receivables financing[558](index=558&type=chunk)