海南瑞泽新型建材股份有限公司 2022 年第一季度报告 证券代码：002596 证券简称：海南瑞泽 公告编号：2022-023 海南瑞泽新型建材股份有限公司 2022 年第一季度报告 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.第一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 | 上年同期 | 本报告期比上年同期增减 | | --- | --- | --- | --- | | 营业收入（元） | 474,179,508.14 | 564,510,957.33 | -16.00% | | 归属于上市公司股东的净利润（元） | 4,095,569.45 | 2,480 ...

Financial Performance - The company reported a significant increase in revenue, achieving a total of 1.2 billion RMB for the year 2021, representing a growth of 15% compared to the previous year[15]. - The company's operating revenue for 2021 was ¥2,778,490,944.69, a decrease of 4.32% compared to ¥2,904,059,209.47 in 2020[23]. - The net profit attributable to shareholders for 2021 was -¥1,140,707,950.33, representing a significant decline of 2,852.91% from a profit of ¥41,436,412.54 in 2020[23]. - The net cash flow from operating activities was -¥25,756,481.73 in 2021, a decrease of 110.00% compared to ¥257,563,696.63 in 2020[23]. - The total assets at the end of 2021 were ¥5,565,104,929.89, down 14.49% from ¥6,507,987,939.78 at the end of 2020[23]. - The net assets attributable to shareholders decreased by 36.55% to ¥1,993,071,995.09 at the end of 2021 from ¥3,141,013,766.39 at the end of 2020[23]. - The company reported a basic and diluted earnings per share of -¥0.99 for 2021, a decline of 2,575.00% from ¥0.04 in 2020[23]. - The company experienced a negative net profit after deducting non-recurring gains and losses for the year, indicating ongoing operational challenges[23]. Market Expansion and Strategy - The company plans to expand its market presence by entering three new provinces in 2022, aiming for a 20% increase in market share[20]. - Future guidance indicates a projected revenue growth of 18% for 2022, driven by increased demand for concrete and cement products[20]. - The company is actively promoting the development of prefabricated construction to adapt to modern building trends, with production lines already installed[34]. - The company is preparing to enter the general industrial waste treatment market, which is currently underdeveloped in China, indicating significant future growth potential[79]. - The company plans to leverage the opportunities presented by the Hainan Free Trade Port construction to expand its municipal sanitation services[45]. Cost Management and Profitability - The gross profit margin improved to 30%, up from 28% in 2020, indicating better cost management and pricing strategies[15]. - The gross margin improved to 35%, up from 30% in the previous year, indicating better cost management[138]. - The gross profit margin for the concrete segment was 15.97%, down from 17.21% in the previous year[51]. - The gross profit margin fell to -23.98% in 2021 from -1.44% in 2020, primarily due to project delays and rising material and labor costs[54]. - The company is facing challenges from rising prices of raw materials such as limestone and coal, impacting its cement production cost competitiveness[40]. Research and Development - Research and development expenses increased by 25% year-on-year, focusing on new building materials and sustainable construction technologies[20]. - The company has completed several R&D projects, including the development of a high-performance concrete material suitable for tropical marine environments, which has won an annual innovation technology award[79]. - The company is exploring the use of sea sand in concrete production, which could enhance its material sourcing and industry influence if successful[78]. - R&D investment decreased by 31.16% from 33,814,783.24 CNY in 2020 to 23,277,004.99 CNY in 2021, representing 0.84% of operating revenue[80]. Operational Challenges - Accounts receivable increased by 10%, raising concerns about liquidity and collection efficiency, which the company aims to address in the coming year[4]. - The company is addressing high accounts receivable risks due to long construction and settlement cycles, particularly in the concrete and landscaping sectors[106]. - The company is facing potential risks related to macroeconomic conditions and industry policies, which could impact future performance[4]. - The concrete industry is facing increased financial pressure due to rising raw material costs and prolonged payment cycles, but long-term demand is expected to rise with major infrastructure projects[34]. Governance and Management - The company held 1 annual general meeting and 5 extraordinary general meetings during the reporting period, ensuring compliance with legal requirements for shareholder rights[115]. - The board of directors consists of 8 members, including 3 independent directors, meeting the legal requirement of one-third independence[116]. - The company has a robust governance structure with a clear separation of powers among the shareholders, board, and supervisory board[123]. - The company has established an independent financial department with strict financial management and decision-making processes, ensuring no shared bank accounts with actual controllers[123]. Environmental Responsibility - The company achieved a total emission of 265.27 tons of particulate matter, 43.17 tons of sulfur dioxide, and 477.71 tons of nitrogen oxides, all within the regulatory limits[194]. - The dust removal system at the kiln tail has an efficiency of 99%, with a 100% operational rate, ensuring effective interception of particulate emissions[195]. - The company invested no less than RMB 4 million annually in environmental protection facilities, including 44 dust removal devices and 2 desulfurization systems[197]. - The company has not faced any administrative penalties from environmental protection authorities during the reporting period[197]. Employee Management and Compensation - The total remuneration paid to directors, supervisors, and senior management during the reporting period amounted to 9.6104 million yuan[148]. - The company has a complete human resources management system, with all employees recruited through standardized procedures[121]. - The company emphasizes a fair and performance-based compensation policy, continuously improving its salary and performance mechanisms[167]. - The company has developed a talent reserve system aimed at nurturing future leaders and building an internal talent pipeline[170]. Social Responsibility - The company donated a total of RMB 1.691 million for rural construction, poverty alleviation, and charity education[200]. - The company actively participates in social responsibility initiatives, including job creation and community support[200]. - The company contributed RMB 14,000 in poverty alleviation funds to support disabled students and families in Qionghai[200].

[Main Financial Data](index=1&type=section&id=一%E3%80%81主要财务数据) In the first three quarters of 2021, the company's operating revenue increased by 10.83% year-on-year, but net profit turned from profit to loss, decreasing by 373.83% year-on-year, mainly due to increased operating costs, administrative expenses, and credit impairment losses, with net cash flow from operating activities also sharply decreasing by 83.08% year-on-year, indicating a significant deterioration in the company's profitability and cash flow position [Key Accounting Data and Financial Indicators](index=1&type=section&id=(一)主要会计数据和财务指标) During the reporting period, the company's profitability significantly declined in both the third quarter and the year-to-date, with third-quarter operating revenue decreasing by 17.14% year-on-year and a net loss attributable to shareholders of 53.94 million CNY, while year-to-date net loss attributable to shareholders expanded to 84.53 million CNY despite a 10.83% revenue increase Key Financial Indicators for Q1-Q3 2021 | Indicator | Year-to-Date | YoY Change (Year-to-Date) | | :--- | :--- | :--- | | Operating Revenue (CNY) | 1,909,458,636.04 | 10.83% | | Net Profit Attributable to Shareholders (CNY) | -84,531,481.31 | -373.83% | | Net Profit Attributable to Shareholders (Excluding Non-recurring Items) (CNY) | -104,662,654.11 | -1,239.82% | | Net Cash Flow from Operating Activities (CNY) | 25,219,366.18 | -83.08% | | Basic Earnings Per Share (CNY/share) | -0.07 | -333.33% | | Total Assets (CNY) | 6,469,111,170.45 | -0.60% (vs. End of Prior Year) | | Total Equity Attributable to Shareholders (CNY) | 3,044,397,662.10 | -3.08% (vs. End of Prior Year) | [Non-recurring Gains and Losses and Amounts](index=2&type=section&id=(二)非经常性损益项目和金额) Year-to-date, the company's total non-recurring gains and losses amounted to 20.13 million CNY, primarily from the reversal of impairment provisions for individually tested accounts receivable, government grants, and other non-operating income and expenses, which partially mitigated losses from core operations Non-recurring Gains and Losses Items (Year-to-Date) | Item | Amount (CNY) | | :--- | :--- | | Gains/Losses on Disposal of Non-current Assets | 3,731,464.93 | | Government Grants Recognized in Current P&L | 4,961,379.00 | | Reversal of Impairment Provisions for Individually Tested Accounts Receivable | 9,068,859.48 | | Other Non-operating Income and Expenses | 4,318,204.22 | | **Total** | **20,131,172.80** | [Analysis of Changes in Key Financial Indicators and Reasons](index=2&type=section&id=(三)主要会计数据和财务指标发生变动的情况及原因) The company's financial position significantly changed during the reporting period, with investment properties surging by 3058.66% due to properties being converted to rental or acquired as debt settlement, while operating profit and net profit turned negative year-on-year due to increased operating costs, administrative expenses, and credit impairment losses, and net cash flow from operating activities plummeted by 83.08% due to increased procurement and expense payments, indicating substantial funding pressure Key Balance Sheet Changes (2021-09-30 vs 2020-12-31) | Item | Change (%) | Reason for Change | | :--- | :--- | :--- | | Investment Properties | 3,058.66% | Increase due to properties converted to rental and acquired as debt settlement | | Construction in Progress | 79.97% | Increase in projects under construction and project investments | | Prepayments | 72.46% | Increase in prepaid material costs | | Short-term Borrowings | -54.19% | Repayment of short-term borrowings from financial institutions | Key Income Statement Changes (Jan-Sep 2021 vs Jan-Sep 2020) | Item | Change (%) | Reason for Change | | :--- | :--- | :--- | | Investment Income | 230.02% | Increase in investment income from associates | | Operating Profit | -188.94% | Increase in operating costs, administrative expenses, and impairment losses | | Total Profit | -175.06% | Increase in operating costs, administrative expenses, impairment losses, and decrease in penalty income | | Net Profit Attributable to Parent Company Shareholders | -373.83% | Increase in operating costs, administrative expenses, impairment losses, and decrease in non-operating income | Key Cash Flow Statement Changes (Jan-Sep 2021 vs Jan-Sep 2020) | Item | Change (%) | Reason for Change | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | -83.08% | Increase in payments for goods purchased, employee salaries, and expenses | | Net Cash Flow from Investing Activities | -52.35% | Increase in investments in construction projects, PPP projects, and associates | | Net Cash Flow from Financing Activities | -194.43% | Decrease in borrowings obtained | [Shareholder Information](index=4&type=section&id=二%E3%80%81股东信息) As of the end of the reporting period, the company had 62,169 common shareholders, with the top three shareholders collectively holding over 30% of the shares, and a significant portion of shares held by major shareholders were pledged or frozen, with some shareholders acting in concert - As of the end of the reporting period, the company had **62,169** common shareholders[15](index=15&type=chunk) Top Three Shareholders' Holdings and Pledged/Frozen Status | Shareholder Name | Holding Percentage (%) | Number of Shares Held | Number of Shares Pledged | Number of Shares Frozen | | :--- | :--- | :--- | :--- | :--- | | Zhang Hailin | 12.19% | 139,920,000 | 139,920,000 | 16,260,000 | | Feng Huoling | 11.29% | 129,510,000 | 60,924,000 | - | | Sanya Daxing Group Co., Ltd. | 8.29% | 95,132,742 | 95,130,000 | 95,132,742 | - Major shareholders Zhang Hailin, Zhang Yilin, and Feng Huoling are acting in concert, with Zhang Hailin and Zhang Yilin jointly controlling Sanya Daxing Group Co., Ltd. and Sanya Houde Investment Management Co., Ltd., indicating a highly concentrated equity structure[16](index=16&type=chunk) [Other Important Matters](index=5&type=section&id=三%E3%80%81其他重要事项) During the reporting period, the company had no other important matters requiring disclosure - The company had no other important matters requiring disclosure in this reporting period[17](index=17&type=chunk) [Quarterly Financial Statements](index=6&type=section&id=四%E3%80%81季度财务报表) This section provides the unaudited consolidated financial statements for the third quarter of 2021, including the balance sheet, income statement, and cash flow statement, and explains adjustments made to the opening financial statements due to the initial adoption of new lease accounting standards, recognizing right-of-use assets and lease liabilities [Consolidated Balance Sheet](index=6&type=section&id=1%E3%80%81合并资产负债表) As of September 30, 2021, the company's total assets were 6.469 billion CNY, a slight decrease of 0.60% from the end of the previous year; total liabilities were 3.353 billion CNY, an increase of 1.83% from the end of the previous year; and total equity attributable to the parent company was 3.044 billion CNY, a decrease of 3.08% from the end of the previous year, with an asset-liability ratio of 51.83% Key Balance Sheet Items (2021-09-30) | Item | Amount (CNY) | | :--- | :--- | | Total Assets | 6,469,111,170.45 | | Total Liabilities | 3,352,969,030.47 | | Total Equity Attributable to Parent Company | 3,044,397,662.10 | [Consolidated Income Statement (Year-to-Date)](index=8&type=section&id=2%E3%80%81合并年初到报告期末利润表) From January to September 2021, the company achieved total operating revenue of 1.909 billion CNY, a year-on-year increase of 10.83%, but total operating costs reached 1.889 billion CNY, a year-on-year increase of 18.79%, with operating costs and administrative expenses growing particularly fast, ultimately leading to an operating loss of 65.08 million CNY and a net loss of 82.45 million CNY Key Income Statement Items (Jan-Sep 2021) | Item | Current Period Amount (CNY) | | :--- | :--- | | Total Operating Revenue | 1,909,458,636.04 | | Total Operating Costs | 1,889,281,320.87 | | Operating Profit | -65,078,412.13 | | Net Profit | -82,448,169.75 | | Net Profit Attributable to Parent Company Owners | -84,531,481.31 | [Consolidated Cash Flow Statement (Year-to-Date)](index=10&type=section&id=3%E3%80%81合并年初到报告期末现金流量表) From January to September 2021, the company's net cash flow from operating activities was 25.22 million CNY, a significant year-on-year decrease of 83.08%, with net cash outflow from investing activities of 223.32 million CNY and net cash outflow from financing activities of 92.46 million CNY, resulting in a net decrease in cash and cash equivalents of 290.56 million CNY, with the ending balance falling to 117 million CNY Key Cash Flow Statement Items (Jan-Sep 2021) | Item | Current Period Amount (CNY) | | :--- | :--- | | Net Cash Flow from Operating Activities | 25,219,366.18 | | Net Cash Flow from Investing Activities | -223,319,202.87 | | Net Cash Flow from Financing Activities | -92,456,439.05 | | Net Increase in Cash and Cash Equivalents | -290,556,275.74 | [Explanation of Financial Statement Adjustments](index=12&type=section&id=(二)财务报表调整情况说明) The company adopted new lease accounting standards effective January 1, 2021, and in accordance with the standards, the consolidated balance sheet at the date of initial application was adjusted to recognize right-of-use assets and lease liabilities, with no retrospective adjustment to prior period comparative data - The company first adopted new lease accounting standards effective **January 1, 2021**, and adjusted relevant items in the opening financial statements[29](index=29&type=chunk)[33](index=33&type=chunk) Impact of Initial Adoption of New Lease Standards (2021-01-01) | Adjusted Item | Adjustment Amount (CNY) | | :--- | :--- | | Right-of-Use Assets | +17,504,940.80 | | Lease Liabilities | +17,504,940.80 | [Audit Report](index=15&type=section&id=(三)审计报告) The financial statements in this quarterly report are unaudited - The company's 2021 third-quarter report is unaudited[34](index=34&type=chunk)

Financial Performance - The company's operating revenue for the first half of 2021 was ¥1,296,722,787.05, representing a 31.86% increase compared to ¥983,442,340.50 in the same period last year[19]. - The net profit attributable to shareholders of the listed company was -¥30,593,473.35, a decrease of 419.53% from ¥9,574,547.10 in the previous year[19]. - The net cash flow from operating activities was -¥65,785,481.22, down 157.20% from ¥115,013,825.74 in the same period last year[19]. - The basic earnings per share were -¥0.0267, a decline of 421.69% compared to ¥0.0083 in the previous year[19]. - The total comprehensive income for the first half of 2021 was -¥28,876,901.36, compared to ¥14,429,978.61 in the first half of 2020[160]. - The company reported a net profit of 475 million, which is a decrease of 4.6% year-over-year[174]. - The total comprehensive income for the period decreased by 19.53% compared to the previous year, amounting to 29.1 million yuan[181]. Assets and Liabilities - Total assets at the end of the reporting period were ¥6,488,327,633.68, a slight decrease of 0.30% from ¥6,507,987,939.78 at the end of the previous year[19]. - The total liabilities amounted to CNY 3,319,916,782.35, slightly up from CNY 3,292,669,714.16, indicating a marginal increase of about 0.8%[151]. - Long-term borrowings rose to ¥1,202,228,769.09, making up 18.53% of total assets, an increase of 2.29% from the previous year[48]. - The total liabilities at the end of the period were 5,892.42 million yuan, reflecting a stable financial position[182]. Cash Flow - The company's cash flow from operating activities showed a net outflow of CNY -65,785,481.22, a decline of 157.20% compared to the previous year[39]. - Total cash inflow from operating activities was 1,391,425,573.12 CNY, while cash outflow was 1,457,211,054.34 CNY, resulting in a net cash flow deficit[168]. - The ending balance of cash and cash equivalents was 122,408,105.41 CNY, down from 247,875,054.17 CNY in the previous period[168]. Market and Operations - The company operates 10 concrete mixing stations and 26 production lines in Hainan Province, with a designed capacity of 7.8 million cubic meters, holding a significant market share in the concrete business[29]. - The company is actively investing in prefabricated construction to adapt to modern building trends, driven by government initiatives in Hainan Province[28]. - The municipal sanitation market is expanding, with increasing investment in environmental pollution control, which is expected to boost demand for the company's services[29]. - The company has diversified its operations across four main sectors: concrete, cement, landscaping, and municipal sanitation, allowing for operational synergy and resource integration[32]. Risks and Challenges - The company faces risks including high accounts receivable, liquidity risks, and significant goodwill impairment risks[4]. - The landscaping sector faces challenges due to government regulations on real estate, impacting growth potential in the short term[29]. - The company faces risks from macroeconomic fluctuations and industry policies, particularly in the cement and concrete sectors, which could adversely affect demand[62]. Investments and Development - The company plans to expand its market presence and invest in new product development to drive future growth[173]. - The company has initiated a stock option incentive plan to enhance management motivation and align interests with shareholders, granting 19.23 million stock options at a price of 5.86 per share[71]. - Research and development expenses increased by 66.96% to CNY 18,837,736.15, reflecting the company's commitment to innovation[39]. Environmental Compliance - Jin Gang Cement's particulate matter emissions were 127.361 tons, well below the regulatory limit of 305.5124 tons, indicating compliance with environmental standards[79]. - The company has invested no less than RMB 4 million annually in environmental protection facilities, including 42 dust removal devices and 3 desulfurization systems[84]. - Jin Gang Cement's denitrification system has achieved over 60% efficiency, operating at a 100% normal running rate throughout the year[80]. Shareholder Information - The total number of shares before the recent changes was 1,147,580,518, with a reduction of 25,226,937 shares, resulting in a new total of 1,122,353,581 shares[131]. - The largest shareholder, Feng Hualing, holds 129,510,000 shares, representing 11.29% of total shares[138]. - Total number of common shareholders at the end of the reporting period is 65,877[137]. Legal and Regulatory Matters - The company reported a total of 22 new litigation cases in the first half of 2021, with a total amount involved of 34.87 million yuan[93]. - There were no non-operating fund occupations by controlling shareholders or related parties during the reporting period[89]. - The semi-annual financial report was not audited[91].

Financial Performance - The company's operating revenue for Q1 2021 was ¥564,510,957.33, representing a 75.65% increase compared to ¥321,381,932.22 in the same period last year[7]. - The net profit attributable to shareholders was ¥2,480,037.86, a significant turnaround from a loss of ¥15,158,045.67 in the previous year, marking a 116.36% improvement[7]. - The net profit after deducting non-recurring gains and losses was ¥284,414.78, compared to a loss of ¥23,958,544.24, reflecting a 101.19% increase[7]. - Total revenue for Q1 2021 reached ¥564.51 million, a 75.65% increase compared to ¥321.38 million in Q1 2020, primarily due to increased sales of ready-mixed concrete[17]. - Operating costs rose to ¥458.88 million, an 85.27% increase from ¥247.69 million in the same period last year, driven by higher revenue and rising material prices[17]. - The company reported a significant decrease in financial expenses by 37.96%, down to ¥18.47 million from ¥29.77 million, due to lower comprehensive financing costs[18]. - The gross profit margin for the current period was approximately 3.5%, reflecting improved operational efficiency[46]. - The company reported a basic and diluted earnings per share of CNY 0.0022, compared to a loss per share of CNY 0.0132 in the previous year[47]. Cash Flow and Assets - The company's cash flow from operating activities showed a net outflow of ¥128,032,445.16, a decline of 456.39% from a positive cash flow of ¥35,925,043.51 in the previous year[7]. - Cash received from sales and services amounted to ¥649.21 million, a 37.18% increase from ¥473.27 million in Q1 2020, reflecting higher operating income[20]. - Cash paid for purchasing goods and services increased by 111.55% to ¥604.58 million, up from ¥285.79 million, due to rising operating costs[20]. - Cash and cash equivalents dropped significantly to CNY 216,864,808.72 from CNY 469,567,080.54, representing a decrease of about 53.8%[36]. - The company's total assets at the end of the reporting period were ¥6,339,040,137.44, down 2.60% from ¥6,507,987,939.78 at the end of the previous year[7]. - The company's current assets decreased to CNY 2,910,518,044.86 from CNY 3,207,543,751.40, reflecting a decline of approximately 9.2%[36]. - The total cash outflow from investing activities was -129,655,968.41 CNY, compared to -98,047,060.11 CNY in the same period last year[54]. Shareholder Information - The number of ordinary shareholders at the end of the reporting period was 63,719, with the top ten shareholders holding significant stakes, including Zhang Hailin with 12.19%[10]. - The company reported a total equity of CNY 3,217,890,066.27, slightly up from CNY 3,215,318,225.62[39]. - Total equity amounted to RMB 3,689,116,085.91 as of the end of the first quarter of 2021[66]. Investments and Projects - The company recognized a 1,448.93% increase in investment properties, totaling ¥80,348,793.35, due to the addition of rental properties[15]. - The company is actively engaged in multiple infrastructure projects across various regions, indicating a strong market expansion strategy[25]. - The cumulative revenue recognized for the ongoing projects reached 58,099.43 million yuan, with a current period revenue recognition of 2,536.49 million yuan[25]. - The company reported a cumulative completion of engineering progress for the PPP projects amounting to 84,675.85 million yuan, with a current period revenue recognition of 2,418.16 million yuan[25]. Compliance and Governance - The company has no significant contracts with major discrepancies affecting contract amounts by more than 30%[27]. - There were no instances of entrusted financial management or non-compliance with external guarantees during the reporting period[28][29]. - The company did not engage in any non-operating fund occupation by controlling shareholders or related parties during the reporting period[30]. - The first quarter report was not audited[67].

Financial Performance - The company's operating revenue for 2020 was CNY 2,904,059,209.47, representing a 12.70% increase compared to CNY 2,576,779,523.54 in 2019[16] - The net profit attributable to shareholders in 2020 was CNY 41,436,412.54, a significant turnaround from a loss of CNY 411,920,421.25 in 2019, marking a 110.06% improvement[16] - The net cash flow from operating activities increased by 9.65% to CNY 257,563,696.63 in 2020, compared to CNY 234,897,526.84 in 2019[16] - Basic earnings per share for 2020 were CNY 0.0360, a recovery from a loss of CNY 0.36 per share in 2019, reflecting a 110.00% increase[17] - Total assets at the end of 2020 amounted to CNY 6,507,987,939.78, up 5.63% from CNY 6,160,992,143.84 at the end of 2019[17] - The net assets attributable to shareholders increased by 0.94% to CNY 3,141,013,766.39 at the end of 2020, compared to CNY 3,111,819,194.85 at the end of 2019[17] Dividends and Shareholder Returns - The company plans to distribute a cash dividend of CNY 0.1 per 10 shares, totaling CNY 114,758,051.80 based on 1,147,580,518 shares[4] - The company distributed cash dividends of RMB 11,475,805.18 for the year 2020, which is 27.69% of the net profit attributable to ordinary shareholders[135] - The total number of shares for the 2020 dividend distribution was 1,147,580,518, with a payout of RMB 0.1 per 10 shares[136] - The cash dividend amount for 2020 represents 100% of the total profit distribution[136] Business Strategy and Expansion - The company aims to expand its business in the "big infrastructure," "big ecology," and "big tourism" sectors, reflecting a strategic focus on diversified growth[26] - The company is leveraging the Hainan Free Trade Port policy to explore market opportunities and expand its concrete business[35] - The company plans to invest CNY 125 million for a 25% stake in Sanya International Cruise Development Co., aiming to expand into the cruise tourism industry[46] - The company will focus on expanding its municipal sanitation and waste disposal services, increasing market share through enhanced cooperation and bidding efforts[119] Industry Trends and Market Conditions - The construction materials industry is expected to maintain stable production and pricing, with improved economic benefits anticipated in the coming years[29] - The demand for construction materials, including cement and concrete, has slightly increased due to infrastructure and real estate investments, despite the challenges posed by the COVID-19 pandemic[28] - The environmental sanitation industry is experiencing high growth, with government policies emphasizing waste classification and rural environment improvement, indicating strong future market potential[31] - The landscaping and greening industry is experiencing growth driven by increased government investment and the rise of tourism projects, enhancing demand for related services[29] Operational Efficiency and Cost Management - The company implemented cost control measures and improved operational efficiency to mitigate the impact of the COVID-19 pandemic[43] - The company actively expanded raw material procurement channels to mitigate the impact of rising costs on gross margins[57] - The company plans to enhance customer credit management and improve receivables collection to reduce impairment risks[64] Risks and Challenges - The company has faced risks including high accounts receivable, liquidity risks, and potential impairment of goodwill, which are discussed in detail in the report[4] - The company faces risks from macroeconomic fluctuations affecting demand for concrete and cement, with strategies to adapt to market conditions[123] - The company has a high level of accounts receivable, which poses liquidity risks, and will enhance its receivables management to mitigate this[124] Corporate Governance and Compliance - The company has fulfilled all commitments made by its controlling shareholders and related parties during the reporting period[138] - The company has committed to ensuring compliance with national and local laws regarding business operations, tax, land use, environmental protection, and labor, with no significant administrative penalties since its establishment[140] - The company has established a framework for timely disclosure of related party transactions to protect the interests of its shareholders[142] Social Responsibility and Community Engagement - The company has actively participated in social responsibility initiatives, including donations for COVID-19 relief and support for vulnerable groups[194] - The company has provided a total of CNY 24,000 in scholarships to 12 impoverished college students and employed 6 registered poor households, contributing CNY 99,600 to employment assistance[200] - The company has made significant investments in environmental protection, ensuring all pollution discharge indicators comply with relevant regulations and standards[197]

[Important Notice](index=2&type=section&id=Item%201.%20Important%20Notice) The company's board of directors, supervisory board, and senior management guarantee the truthfulness, accuracy, and completeness of this quarterly report, free from false records, misleading statements, or major omissions, and assume legal responsibility - The company's board of directors, supervisory board, and senior management guarantee the truthfulness, accuracy, and completeness of this quarterly report, free from false records, misleading statements, or major omissions, and assume legal responsibility[3](index=3&type=chunk) - All directors attended the board meeting to review this quarterly report[4](index=4&type=chunk) - Company负责人 Zhang Hailin, chief accountant Wu Yueliang, and head of accounting department Zhang Guiyang declare that the financial statements in the quarterly report are true, accurate, and complete[4](index=4&type=chunk) [Company Profile](index=3&type=section&id=Item%202.%20Company%20Profile) [Key Accounting Data and Financial Indicators](index=3&type=section&id=Key%20Accounting%20Data%20and%20Financial%20Indicators) As of Q3 2020, total assets and net assets attributable to shareholders showed slight growth, with current period revenue up **25.92%** and net profit up **98.79%**, while year-to-date cumulative figures and operating cash flow decreased significantly Key Accounting Data and Financial Indicators (Consolidated) | Indicator | End of Current Period (RMB) | End of Prior Year (RMB) | Change (%) | | :--- | :--- | :--- | :--- | | Total Assets | 6,283,776,402.47 | 6,160,992,143.84 | 1.99% | | Net Assets Attributable to Shareholders | 3,130,447,199.18 | 3,111,819,194.85 | 0.60% | | Indicator | Current Period (RMB) | Current Period vs Prior Year Change (%) | Year-to-Date (RMB) | Year-to-Date vs Prior Year Change (%) | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue | 739,459,323.31 | 25.92% | 1,722,901,663.81 | -5.25% | | Net Profit Attributable to Shareholders | 21,295,298.23 | 98.79% | 30,869,845.33 | -45.45% | | Net Profit Attributable to Shareholders (Excluding Non-Recurring Items) | 19,317,262.05 | 52.18% | 9,182,376.86 | -79.77% | | Net Cash Flow from Operating Activities | 34,041,175.10 | -90.96% | 149,055,000.84 | -55.66% | | Basic Earnings Per Share (RMB/share) | 0.02 | 100.00% | 0.03 | -40.00% | | Diluted Earnings Per Share (RMB/share) | 0.02 | 100.00% | 0.03 | -40.00% | | Weighted Average Return on Net Assets | 0.68% | 0.38% | 0.99% | -0.59% | Non-Recurring Gains and Losses Items and Amounts | Item | Year-to-Date Amount (RMB) | Explanation | | :--- | :--- | :--- | | Gains/Losses from Disposal of Non-Current Assets | -257,884.98 | | | Government Subsidies Included in Current Profit/Loss | 3,296,703.72 | | | Reversal of Impairment Provisions for Receivables and Contract Assets Subject to Separate Impairment Testing | 9,500,000.00 | Recovery of individually provided accounts receivable, reversal of corresponding bad debt provisions | | Other Non-Operating Income and Expenses Apart from the Above | 11,847,770.71 | Mainly government awards and compensation | | Less: Income Tax Impact | 2,699,267.98 | | | Minority Interest Impact (After Tax) | -147.00 | | | Total | 21,687,468.47 | -- | [Total Shareholders and Top Ten Holdings at Period End](index=4&type=section&id=Total%20Shareholders%20and%20Top%20Ten%20Holdings%20at%20Period%20End) As of the end of the reporting period, the company had **71,605** common shareholders, with key shareholders including Zhang Hailin, Feng Huoling, Sanya Daxing Group, and Zhang Yilin, who are acting in concert, and some shares are pledged - Total common shareholders at period end: **71,605**[11](index=11&type=chunk) Top 10 Shareholders' Holdings | Shareholder Name | Shareholder Nature | Shareholding Ratio | Number of Shares Held (Shares) | Number of Restricted Shares Held (Shares) | Pledge or Freeze Status (Share Status/Number) | | :--- | :--- | :--- | :--- | :--- | :--- | | Zhang Hailin | Domestic Natural Person | 12.18% | 139,920,000 | 111,740,325 | Pledged/135,590,800 | | Feng Huoling | Domestic Natural Person | 11.27% | 129,510,000 | 0 | Pledged/60,924,000 | | Sanya Daxing Group Co., Ltd. | Domestic Non-State-Owned Legal Person | 8.28% | 95,132,742 | 0 | Pledged/95,130,000 | | Zhang Yilin | Domestic Natural Person | 4.63% | 53,249,900 | 0 | Pledged/53,249,900 | | Xu Zhanyuan | Domestic Natural Person | 2.66% | 30,594,019 | 9,238,382 | | | Deng Yandong | Domestic Natural Person | 2.00% | 22,937,745 | 8,787,730 | | | China International Capital Corporation Limited | State-Owned Legal Person | 1.68% | 19,346,846 | 0 | | | Li Zhijie | Domestic Natural Person | 1.31% | 15,058,074 | 0 | | | Liang Zhaojian | Domestic Natural Person | 1.08% | 12,368,832 | 0 | | | Sanya Houde Investment Management Co., Ltd. | Domestic Non-State-Owned Legal Person | 0.96% | 11,061,948 | 0 | Pledged/11,040,000 | - Zhang Hailin, Zhang Yilin, and Feng Huoling are acting in concert; Zhang Hailin and Zhang Yilin are brothers, Feng Huoling is their brother-in-law; Sanya Daxing Group Co., Ltd. and Sanya Houde Investment Management Co., Ltd. are controlled by Zhang Hailin and Zhang Yilin[12](index=12&type=chunk) [Significant Events](index=6&type=section&id=Item%203.%20Significant%20Events) [Changes and Reasons for Key Financial Data and Indicators](index=6&type=section&id=Changes%20and%20Reasons%20for%20Key%20Financial%20Data%20and%20Indicators) During the reporting period, the company experienced significant changes across its balance sheet, income statement, and cash flow statement, driven by business development, accounting policy adjustments, and specific transactions like subsidiary disposals and increased borrowings Balance Sheet Item Changes (Partial) | Item | September 30, 2020 (RMB) | December 31, 2019 (RMB) | Change Rate (%) | Reason for Change | | :--- | :--- | :--- | :--- | :--- | | Trading Financial Assets | - | 10,680,800.00 | -100.00% | Mainly due to the cancellation of performance compensation shares of former shareholders of Guangdong Lurun | | Receivables Financing | 4,273,184.34 | 23,855,782.43 | -82.09% | Mainly due to a decrease in bank acceptance bill balance | | Prepayments | 39,451,586.02 | 15,259,634.17 | 158.54% | Mainly due to an increase in prepaid material costs | | Other Receivables | 210,940,325.13 | 140,518,755.90 | 50.12% | Mainly due to an increase in performance bonds paid and receivables from equity transfer | | Inventories | 433,054,174.87 | 325,772,085.07 | 32.93% | Mainly due to an increase in unsettled engineering projects | | Contract Assets | 212,130,565.40 | - | 100.00% | Mainly due to changes in accounting policies, reclassified from original accounts receivable to this item | | Assets Held for Sale | - | 72,229,997.55 | -100.00% | Mainly due to the company's disposal of subsidiary equity | | Construction in Progress | 49,274,039.25 | 29,570,629.66 | 66.63% | Mainly due to increased investment in environmental sanitation projects | | Prepayments Received | - | 31,878,284.05 | -100.00% | Mainly due to changes in accounting standards, reclassified to contract liabilities, resulting in a decrease | | Contract Liabilities | 24,970,483.61 | - | 100.00% | Mainly due to changes in accounting standards, reclassified from original prepayments received to this item | | Non-Current Liabilities Due Within One Year | 197,434,091.95 | 473,075,967.76 | -58.27% | Mainly due to a decrease in long-term payables due within one year | | Long-Term Borrowings | 1,404,732,555.28 | 879,498,711.21 | 59.72% | Mainly due to an increase in long-term bank borrowings obtained | | Long-Term Payables | 119,758,539.69 | 38,415,935.95 | 211.74% | Mainly due to an increase in long-term payables due within one year | Income Statement Item Changes (Year-to-Date) | Item | Jan-Sep 2020 (RMB) | Jan-Sep 2019 (RMB) | Change Rate (%) | Reason for Change | | :--- | :--- | :--- | :--- | :--- | | Investment Income | 4,761,213.34 | -1,080,909.60 | 540.48% | Mainly due to an increase in investment income from associates | | Gains/Losses from Asset Disposal | 949,628.52 | 14,137,050.27 | -93.28% | Mainly due to a decrease in gains from disposal of fixed assets | Cash Flow Statement Item Changes (Year-to-Date) | Item | Jan-Sep 2020 (RMB) | Jan-Sep 2019 (RMB) | Change Rate (%) | Reason for Change | | :--- | :--- | :--- | :--- | :--- | | Cash Paid for Investments | - | 276,600,000.00 | -100.00% | Mainly due to a decrease in payments for equity acquisition from former shareholders of Guangdong Lurun | | Cash Received from Investments | 10,000.00 | 469,099,989.36 | -100.00% | Mainly due to a decrease in cash received from non-public issuance of shares | | Cash Received from Borrowings | 659,049,566.64 | 879,010,000.00 | -25.02% | Mainly due to a decrease in short-term borrowings obtained | | Cash Received Related to Other Financing Activities | - | 71,561,709.60 | -100.00% | Mainly due to a decrease in cash received from finance leases and shareholder loans | | Cash Paid Related to Other Financing Activities | 100,748,496.98 | 149,809,968.60 | -32.75% | Mainly due to a decrease in payments for other borrowings and finance leases | [Progress, Impact, and Solutions for Significant Events](index=7&type=section&id=Progress%2C%20Impact%2C%20and%20Solutions%20for%20Significant%20Events) The company addressed share repurchase and cancellation, saw its bond issuance approval expire, strategically expanded into the cruise tourism industry, benefited from Hainan Free Trade Port tax incentives, and secured new environmental sanitation and landscaping projects - Equity incentive plan: The company plans to repurchase and cancel **1.439 million restricted shares** granted to 81 incentive recipients who failed to meet the third unlocking conditions due to not achieving 2019 performance targets[19](index=19&type=chunk) - Corporate bonds: The original approval for public issuance of corporate bonds with a total face value not exceeding **RMB 930 million** has expired and become invalid, as it could not be implemented within 12 months due to changes in capital market conditions[21](index=21&type=chunk) - Cruise tourism industry layout: Wholly-owned subsidiary Ruize Tourism established wholly-owned subsidiary Ruize Cruise, and jointly with Sanya Zhongqin Shipping Services Co., Ltd., established Sansha Hongyang Cruise Development Co., Ltd. (Ruize Cruise holds **30%** equity) to integrate regional and industrial advantages for cruise tourism comprehensive projects[21](index=21&type=chunk)[22](index=22&type=chunk) - Tax incentives: Production enterprises in the company's concrete segment, such as Hainan Ruize Shuanglin Building Materials Co., Ltd., qualify as encouraged industries in the Hainan Free Trade Port, enjoying a **15%** corporate income tax preferential rate, positively impacting future performance[22](index=22&type=chunk) Projects Awarded During the Reporting Period | Project Name | Awarded Company | Awarded Amount/Service Period | Impact | | :--- | :--- | :--- | :--- | | Xinhui District Main Urban Area Environmental Sanitation Integration and Market-Oriented Operation Project | Guangdong Lurun Environmental Technology Co., Ltd. | Total bid price RMB 1,565,226,046.67, service period 8 years | Conducive to expanding municipal environmental sanitation business scale and regional reach, positively impacting company operating performance | | Chencun Town 2020-2023 Village (Community) Greening Management and Road Cleaning Project | Guangdong Lurun Environmental Technology Co., Ltd. | RMB 39,866,588.28, contract performance period until August 31, 2023 | Same as above | | Longbiao Town 2020-2023 Municipal Main Road Environmental Sanitation and Greening Integration and Waste Collection and Transportation Operation Project (Section 3) | Guangdong Lurun Environmental Technology Co., Ltd. | RMB 11,862,400/year, total RMB 35,587,200 for three years, service period 3 years | Same as above | [Unfulfilled Commitments by Related Parties](index=10&type=section&id=Unfulfilled%20Commitments%20by%20Related%20Parties) During the reporting period, there were no overdue unfulfilled commitments by the company's controlling shareholder, shareholders, related parties, acquirers, or the company itself - The company had no overdue unfulfilled commitments by its controlling shareholder, shareholders, related parties, acquirers, or the company itself during the reporting period[26](index=26&type=chunk) [Financial Asset Investments](index=10&type=section&id=Financial%20Asset%20Investments) During the reporting period, the company had no securities or derivative investments - The company had no securities investments during the reporting period[27](index=27&type=chunk) - The company had no derivative investments during the reporting period[28](index=28&type=chunk) [Progress of Fund-Raising Investment Projects](index=10&type=section&id=Progress%20of%20Fund-Raising%20Investment%20Projects) During the reporting period, the company had no fund-raising investment projects - The company had no fund-raising investment projects during the reporting period[29](index=29&type=chunk) [Forecast of 2020 Operating Performance](index=10&type=section&id=Forecast%20of%202020%20Operating%20Performance) The company did not issue any warnings or explanations regarding projected losses or significant changes in its 2020 operating performance - The company did not issue any warnings or explanations regarding projected losses or significant changes in its 2020 operating performance compared to the previous year[29](index=29&type=chunk) [Significant Daily Operating Contracts](index=10&type=section&id=Significant%20Daily%20Operating%20Contracts) The company continued to advance several significant daily operating contracts in ecological landscaping, tourism poverty alleviation infrastructure, PPP projects, and environmental sanitation engineering, with substantial contract values and ongoing revenue recognition and collections Progress of Significant Daily Operating Contracts (Partial) | Contract Party Name | Contract Subject | Total Contract Amount (RMB 10,000) | Contract Performance Progress | Sales Revenue Recognized (Current Period & Cumulative, RMB 10,000) | Accounts Receivable Collection (RMB 10,000) | | :--- | :--- | :--- | :--- | :--- | :--- | | Sanya Xindaxing Landscape Ecology Co., Ltd. | Sinan County Haojiawan Ancient Village Tourism Poverty Alleviation Infrastructure Construction Project | 35,600 | Cumulative project progress completed RMB 29,638.27 million, currently under construction | Current period revenue 0, cumulative revenue 28,775.02 | Cumulative collection 980 | | Sanya Xindaxing Landscape Ecology Co., Ltd. | Luodian County Tourism Infrastructure Construction PPP Project | 69,000 | Cumulative project progress completed RMB 44,609 million, currently under construction | Current period revenue 5,093.58, cumulative revenue 40,848.67 | Cumulative collection 44,948.81 | | Sanya Xindaxing Landscape Ecology Co., Ltd. | Yongjiang Comprehensive Improvement and Utilization Project PPP Project | 84,675.85 | Completed and accepted, settlement procedures in progress, cumulative project progress completed RMB 11,555.66 million | Current period revenue 291.77, cumulative revenue 10,548.42 | Cumulative collection 9,134.86 | | Heshan Lusheng Environmental Engineering Co., Ltd. | Heshan Mashan Landfill Reduction PPP Project | 49,300 | Service period completed 2 years and 5 months (cooperation period 20 years) | Current period revenue 757.5, cumulative revenue 2,356.86 | Cumulative collection 550 | | Guangdong Lurun Environmental Technology Co., Ltd. | Zhaoqing Duanzhou District Environmental Sanitation Cleaning and Maintenance Service New Area Project | 6,438 | Service period completed 3 years and 6 months (cooperation period 8 years and 9 months) | Current period revenue 2,700.33, cumulative revenue 12,150.74 | Cumulative collection 11,716.22 | | Guangdong Lurun Environmental Technology Co., Ltd. | Zhuhai Doumen District Water Bureau Jing'an Urban Area and Xinquing Area Drainage Pipe Network Desilting and Inspection Project Procurement | 6,173 | Service period completed 332 calendar days (contract period 180 calendar days) | Current period revenue 1,127, cumulative revenue 3,153 | Cumulative collection 1,012 | - During the reporting period, there were no significant discrepancies in the progress of major contracts that affected the contract amount by more than **30%**[31](index=31&type=chunk) [Wealth Management](index=12&type=section&id=Wealth%20Management) During the reporting period, the company had no wealth management activities - The company had no wealth management activities during the reporting period[32](index=32&type=chunk) [Illegal External Guarantees](index=13&type=section&id=Illegal%20External%20Guarantees) During the reporting period, the company had no illegal external guarantees - The company had no illegal external guarantees during the reporting period[33](index=33&type=chunk) [Non-Operating Funds Occupied by Controlling Shareholder and Related Parties](index=13&type=section&id=Non-Operating%20Funds%20Occupied%20by%20Controlling%20Shareholder%20and%20Related%20Parties) During the reporting period, there were no non-operating funds occupied by the controlling shareholder or its related parties from the listed company - The company had no non-operating funds occupied by its controlling shareholder or related parties during the reporting period[34](index=34&type=chunk) [Investor Relations Activities Registration](index=13&type=section&id=Investor%20Relations%20Activities%20Registration) During the reporting period, the company did not engage in any investor relations activities such as research visits, communications, or interviews - The company did not engage in any investor relations activities such as research visits, communications, or interviews during the reporting period[35](index=35&type=chunk) [Financial Statements](index=14&type=section&id=Item%204.%20Financial%20Statements) [Financial Statements](index=14&type=section&id=Financial%20Statements) This section presents the company's consolidated and parent company balance sheets, income statements, and cash flow statements, covering the current reporting period and year-to-date, highlighting adjustments in asset structure, liabilities, and profit/cash flow variances [Consolidated Balance Sheet](index=14&type=section&id=Consolidated%20Balance%20Sheet) As of September 30, 2020, consolidated total assets were **RMB 6.284 billion**, a **1.99%** increase from year-end, with notable changes in accounts receivable, contract assets, long-term borrowings, and long-term payables Consolidated Balance Sheet Key Items (September 30, 2020 vs December 31, 2019) | Item | September 30, 2020 (RMB) | December 31, 2019 (RMB) | | :--- | :--- | :--- | | Cash and Cash Equivalents | 350,049,307.07 | 362,977,994.19 | | Accounts Receivable | 1,691,182,459.94 | 1,978,128,454.30 | | Contract Assets | 212,130,565.40 | - | | Total Current Assets | 3,127,114,451.62 | 3,072,897,867.94 | | Long-Term Borrowings | 1,404,732,555.28 | 879,498,711.21 | | Long-Term Payables | 119,758,539.69 | 38,415,935.95 | | Total Liabilities | 3,078,834,043.88 | 2,976,321,739.09 | | Total Equity Attributable to Parent Company Owners | 3,130,447,199.18 | 3,111,819,194.85 | | Total Assets | 6,283,776,402.47 | 6,160,992,143.84 | [Parent Company Balance Sheet](index=17&type=section&id=Parent%20Company%20Balance%20Sheet) As of September 30, 2020, parent company total assets were **RMB 4.377 billion**, showing growth from year-end, with significant changes in cash, other receivables, and long-term borrowings Parent Company Balance Sheet Key Items (September 30, 2020 vs December 31, 2019) | Item | September 30, 2020 (RMB) | December 31, 2019 (RMB) | | :--- | :--- | :--- | | Cash and Cash Equivalents | 2,961,912.34 | 51,879,283.68 | | Other Receivables | 697,341,148.76 | 328,353,878.71 | | Long-Term Equity Investments | 3,577,962,542.72 | 3,574,253,308.29 | | Total Assets | 4,376,505,071.27 | 4,113,458,678.88 | | Other Payables | 549,900,567.44 | 296,685,183.18 | | Non-Current Liabilities Due Within One Year | 125,898,133.33 | 415,269,907.18 | | Long-Term Borrowings | 276,000,000.00 | 58,000,000.00 | | Total Liabilities | 1,079,919,764.64 | 779,612,687.09 | | Total Owners' Equity | 3,296,585,306.63 | 3,333,845,991.79 | [Consolidated Income Statement for the Current Period](index=19&type=section&id=Consolidated%20Income%20Statement%20for%20the%20Current%20Period) In Q3 2020, consolidated total operating revenue was **RMB 739.46 million**, up **25.92%** year-on-year, with net profit attributable to parent company owners at **RMB 21.30 million**, a **98.79%** increase, influenced by higher credit impairment losses and income tax expenses Consolidated Income Statement Key Items for the Current Period (Q3 2020 vs Q3 2019) | Item | Current Period Amount (RMB) | Prior Period Amount (RMB) | | :--- | :--- | :--- | | Total Operating Revenue | 739,459,323.31 | 587,232,262.88 | | Total Operating Costs | 664,217,991.26 | 562,338,398.30 | | Investment Income | 3,949,518.19 | -343,586.38 | | Credit Impairment Losses | -38,962,049.17 | -3,088,920.67 | | Total Profit | 44,701,514.78 | 22,369,281.04 | | Income Tax Expense | 23,778,189.22 | 10,869,592.92 | | Net Profit | 20,923,325.56 | 11,499,688.12 | | Net Profit Attributable to Parent Company Owners | 21,295,298.23 | 10,712,712.93 | | Basic Earnings Per Share | 0.02 | 0.01 | [Parent Company Income Statement for the Current Period](index=22&type=section&id=Parent%20Company%20Income%20Statement%20for%20the%20Current%20Period) In Q3 2020, parent company operating revenue was **RMB 7.11 million**, resulting in a net loss of **RMB 4.73 million**, a narrower loss compared to the prior year, with investment income and credit impairment losses significantly impacting profitability Parent Company Income Statement Key Items for the Current Period (Q3 2020 vs Q3 2019) | Item | Current Period Amount (RMB) | Prior Period Amount (RMB) | | :--- | :--- | :--- | | Operating Revenue | 7,107,315.58 | 6,285,582.06 | | Financial Expenses | 10,547,225.63 | 11,797,560.83 | | Investment Income | 3,949,794.10 | -344,252.62 | | Credit Impairment Losses | -861,473.08 | 2,516,793.11 | | Net Profit | -4,733,310.31 | -4,969,270.88 | | Basic Earnings Per Share | -0.0041 | -0.0043 | [Consolidated Income Statement Year-to-Date](index=24&type=section&id=Consolidated%20Income%20Statement%20Year-to-Date) As of September 2020, consolidated total operating revenue was **RMB 1.723 billion**, down **5.25%** year-on-year, with net profit attributable to parent company owners at **RMB 30.87 million**, a **45.45%** decrease, primarily due to a significant increase in credit impairment losses Consolidated Income Statement Key Items Year-to-Date (Jan-Sep 2020 vs Jan-Sep 2019) | Item | Current Period Amount (RMB) | Prior Period Amount (RMB) | | :--- | :--- | :--- | | Total Operating Revenue | 1,722,901,663.81 | 1,818,362,653.35 | | Total Operating Costs | 1,590,313,294.74 | 1,711,632,714.58 | | Investment Income | 4,761,213.34 | -1,080,909.60 | | Credit Impairment Losses | -77,026,868.64 | -35,521,017.18 | | Operating Profit | 73,169,332.37 | 94,648,651.03 | | Total Profit | 82,486,198.80 | 93,857,369.66 | | Income Tax Expense | 47,132,894.63 | 35,132,739.58 | | Net Profit | 35,353,304.17 | 58,724,630.08 | | Net Profit Attributable to Parent Company Owners | 30,869,845.33 | 56,586,092.59 | | Basic Earnings Per Share | 0.03 | 0.050 | [Parent Company Income Statement Year-to-Date](index=27&type=section&id=Parent%20Company%20Income%20Statement%20Year-to-Date) As of September 2020, parent company operating revenue was **RMB 13.46 million**, resulting in a net loss of **RMB 25.02 million**, a shift from profit to loss, mainly driven by a substantial decrease in investment income Parent Company Income Statement Key Items Year-to-Date (Jan-Sep 2020 vs Jan-Sep 2019) | Item | Current Period Amount (RMB) | Prior Period Amount (RMB) | | :--- | :--- | :--- | | Operating Revenue | 13,455,984.77 | 20,173,511.23 | | Administrative Expenses | 14,168,847.05 | 7,470,717.11 | | Financial Expenses | 33,561,713.09 | 40,565,971.13 | | Investment Income | 4,412,867.20 | 199,197,106.26 | | Operating Profit | -26,958,137.24 | 184,461,106.66 | | Net Profit | -25,018,844.16 | 188,602,769.56 | | Basic Earnings Per Share | -0.02 | 0.160 | [Consolidated Cash Flow Statement Year-to-Date](index=29&type=section&id=Consolidated%20Cash%20Flow%20Statement%20Year-to-Date) As of September 2020, consolidated net cash flow from operating activities was **RMB 149.06 million**, a **55.66%** year-on-year decrease, with significant reductions in both investing and financing cash inflows Consolidated Cash Flow Statement Key Items Year-to-Date (Jan-Sep 2020 vs Jan-Sep 2019) | Item | Current Period Amount (RMB) | Prior Period Amount (RMB) | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 149,055,000.84 | 336,188,042.95 | | Subtotal Cash Inflows from Investing Activities | 6,384,716.28 | 28,226,011.26 | | Cash Paid for Acquisition of Fixed Assets, Intangible Assets, and Other Long-Term Assets | 122,885,718.49 | 355,336,615.09 | | Cash Paid for Investments | - | 276,600,000.00 | | Net Cash Flow from Investing Activities | -146,583,230.16 | -603,710,603.83 | | Cash Received from Investments | 10,000.00 | 469,099,989.36 | | Cash Received from Borrowings | 659,049,566.64 | 879,010,000.00 | | Net Cash Flow from Financing Activities | -31,401,945.99 | 483,621,815.40 | | Net Increase in Cash and Cash Equivalents | -28,930,175.31 | 216,099,254.52 | [Parent Company Cash Flow Statement Year-to-Date](index=31&type=section&id=Parent%20Company%20Cash%20Flow%20Statement%20Year-to-Date) As of September 2020, parent company net cash flow from operating activities was **-RMB 59.00 million**, a narrower loss, with significant reductions in both investing and financing cash inflows Parent Company Cash Flow Statement Key Items Year-to-Date (Jan-Sep 2020 vs Jan-Sep 2019) | Item | Current Period Amount (RMB) | Prior Period Amount (RMB) | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | -59,001,738.53 | -85,260,751.76 | | Subtotal Cash Inflows from Investing Activities | 5,000,000.00 | 225,174,197.56 | | Net Cash Flow from Investing Activities | 5,000,000.00 | -58,455,329.99 | | Cash Received from Investments | - | 464,999,989.36 | | Cash Received from Borrowings | 250,000,000.00 | 50,000,000.00 | | Net Cash Flow from Financing Activities | 7,193,811.62 | 141,773,833.90 | | Net Increase in Cash and Cash Equivalents | -46,807,926.91 | -1,942,247.85 | [Explanation of Financial Statement Adjustments](index=33&type=section&id=Explanation%20of%20Financial%20Statement%20Adjustments) The company adopted new revenue recognition standards from 2020, adjusting initial financial statements by reclassifying accounts receivable to contract assets and prepayments to contract liabilities, reflecting the impact of new accounting policies on revenue and contract obligations [Adjustments for New Revenue and Lease Standards from 2020](index=33&type=section&id=Adjustments%20for%20New%20Revenue%20and%20Lease%20Standards%20from%202020) Effective January 1, 2020, the company adjusted its consolidated and parent company balance sheets under new revenue standards, reclassifying **RMB 234.50 million** from accounts receivable to contract assets and **RMB 31.88 million** from prepayments to contract liabilities in the consolidated statement Consolidated Balance Sheet Adjustments (December 31, 2019 vs January 1, 2020) | Item | December 31, 2019 (RMB) | January 1, 2020 (RMB) | Adjustment (RMB) | | :--- | :--- | :--- | :--- | | Accounts Receivable | 1,978,128,454.30 | 1,743,624,732.49 | -234,503,721.81 | | Contract Assets | - | 234,503,721.81 | 234,503,721.81 | | Prepayments Received | 31,878,284.05 | 0.00 | -31,878,284.05 | | Contract Liabilities | - | 31,878,284.05 | 31,878,284.05 | Parent Company Balance Sheet Adjustments (December 31, 2019 vs January 1, 2020) | Item | December 31, 2019 (RMB) | January 1, 2020 (RMB) | Adjustment (RMB) | | :--- | :--- | :--- | :--- | | Prepayments Received | 149,085.51 | 0.00 | -149,085.51 | | Contract Liabilities | - | 149,085.51 | 149,085.51 | [Audit Report](index=39&type=section&id=Audit%20Report) The company's 2020 third-quarter report is unaudited - The company's third-quarter report is unaudited[82](index=82&type=chunk)

Financial Performance - The company's operating revenue for the first half of 2020 was CNY 983,442,340.50, a decrease of 20.12% compared to CNY 1,231,130,390.47 in the same period last year[17]. - The net profit attributable to shareholders of the listed company was CNY 9,574,547.10, down 79.13% from CNY 45,873,379.66 in the previous year[17]. - The net profit after deducting non-recurring gains and losses was CNY -10,134,885.19, a decline of 131.00% compared to CNY 32,693,783.51 in the same period last year[17]. - The basic earnings per share decreased by 79.09% to CNY 0.0083 from CNY 0.0397 in the same period last year[17]. - Total revenue for the reporting period was CNY 983,442,340.50, representing a decrease of 20.12% year-on-year, primarily due to the impact of the pandemic[45]. - The company reported a total of CNY 1,173,437,984.40 in restricted assets, primarily due to borrowings secured against fixed assets, intangible assets, and accounts receivable[59]. - The company reported a total comprehensive income for the period of 9,574,547.10 CNY, reflecting a decrease compared to the previous period[188]. - The total comprehensive income for the first half of 2020 was CNY 45,873,379.66, with a decrease of CNY 9,233,324.45 in profit distribution[194]. Cash Flow and Liquidity - The net cash flow from operating activities was CNY 115,013,825.74, an increase of 385.60% from CNY -40,271,359.08 in the previous year[17]. - The company’s cash and cash equivalents decreased by 127.28%, resulting in a net decrease of CNY 100,120,271.12 during the reporting period[46]. - The company’s cash and cash equivalents were impacted by CNY 44,075,437.79 in frozen funds due to guarantees[59]. - The cash inflow from investment activities included 5,000,000.00 CNY from the disposal of subsidiaries[184]. - The cash outflow for repaying debts was 113,600,000.00 CNY, indicating significant debt management efforts[184]. Assets and Liabilities - Total assets at the end of the reporting period were CNY 6,121,589,646.81, a decrease of 0.64% from CNY 6,160,992,143.84 at the end of the previous year[17]. - The total liabilities of the company were CNY 2,938,645,034.69, slightly down from CNY 2,976,321,739.09, a decrease of about 1.27%[166]. - The company's equity attributable to shareholders was CNY 3,109,151,900.95, a marginal decrease from CNY 3,111,819,194.85[167]. - The company's long-term borrowings increased by 11.62% to CNY 1,279,136,464.00, indicating a shift in financing strategy[55]. - The total approved guarantee amount at the end of the reporting period is CNY 212,076.68 million, with an actual guarantee balance of CNY 138,433.34 million, accounting for 44.52% of the company's net assets[115]. Operational Highlights - The company has maintained its core business operations without significant changes, focusing on concrete production, new dry cement production, and municipal services[24]. - The company has diversified its operations into four main sectors: concrete, cement, landscaping, and municipal sanitation, allowing for synergistic development[28]. - The company secured a contract for the "Belt and Road" Traditional Chinese Medicine project with a total bid of CNY 101,333,423.89, with a duration of 1080 calendar days[36]. - The municipal sanitation segment achieved revenue of CNY 280,719,485.23, a 7.13% increase compared to the same period last year[43]. - The company has established a strong brand presence in the Hainan province and the Guangdong-Hong Kong-Macao Greater Bay Area, enhancing its market reputation[29]. Challenges and Risks - The company faced risks due to the COVID-19 pandemic, which led to a decline in demand for its concrete and cement businesses, closely tied to fixed asset investments[74]. - The company is addressing liquidity risks by establishing a centralized fund management center to optimize capital allocation and reduce financial costs[76]. - Major construction projects are experiencing delays, which could impact future cash flows; the company is working to expedite project completion and settlement processes[77]. - The company has a high level of accounts receivable, which poses a risk to cash flow; it aims to improve collection efforts and manage receivables more effectively[76]. Research and Development - The company emphasizes research and development, collaborating with universities to improve product quality and competitiveness[30]. - Research and development expenses decreased by 27.12% to CNY 11,283,106.68, reflecting a reduction in investment in this area[46]. - The company has a strong focus on innovation, continuously optimizing its production processes and product offerings[30]. Shareholder and Equity Information - The company did not distribute cash dividends or issue new shares during the reporting period, indicating a focus on retaining earnings for reinvestment[81]. - The total number of ordinary shareholders at the end of the reporting period was 77,094[147]. - The largest shareholder, Zhang Hailin, holds 13.01% of the shares, totaling 149,463,000 shares, with a decrease of 1,200,000 shares during the reporting period[147]. - The company reported a commitment to achieve a net profit of no less than 188 million RMB for the year 2020[145]. Environmental and Social Responsibility - The company is committed to sustainable development and has implemented a stable management team to ensure efficient operations[29]. - The company has invested 6 million yuan in environmental protection technology upgrades from 2018 to 2019[130]. - The company provided educational funding of RMB 60,000 to support students in poverty-stricken areas, including RMB 15,000 for improving educational facilities and RMB 45,000 for assisting impoverished students[134]. - The company plans to continue supporting national poverty alleviation efforts and engage in various public welfare activities in the future[136].

Financial Performance - The company's operating revenue for 2019 was ¥2,576,779,523.54, representing a decrease of 17.44% compared to ¥3,120,970,092.69 in 2018[17]. - The net profit attributable to shareholders of the listed company in 2019 was -¥411,920,421.25, a decline of 437.29% from ¥122,124,985.37 in 2018[17]. - The net profit attributable to shareholders after deducting non-recurring gains and losses was -¥414,228,466.48, down 414.64% from ¥131,650,276.24 in the previous year[17]. - Basic and diluted earnings per share dropped to -¥0.36, a decrease of 400% from ¥0.12 in the previous year[18]. - The weighted average return on equity fell to -12.19%, down 16.30% from 4.11% in the previous year[18]. - Total assets decreased by 6.19% to ¥6,160,992,143.84 compared to the end of the previous year[18]. - Net assets attributable to shareholders increased by 1.14% to ¥3,111,819,194.85 compared to the end of the previous year[18]. - The company reported a net profit attributable to shareholders of -¥468,506,513.84 in Q4, significantly impacted by the goodwill impairment[22]. - The company recorded a significant loss in net profit of ¥411,105,709.28, largely due to goodwill impairment losses of ¥287,402,675.21[107]. Business Operations - The company has undergone several acquisitions, including the restructuring of Jin Gang Cement and the acquisition of Jiangxi Lurun and Jiangmen Lushun, expanding its business into municipal sanitation services[15]. - The main business now includes ready-mixed concrete, cement, landscaping, and municipal sanitation services[15]. - The company's revenue primarily comes from the sales of ready-mixed concrete and cement, landscaping business, municipal sanitation services, and sanitation engineering, with a reported loss due to impairment provisions for receivables and goodwill[32]. - The landscaping industry is facing short-term development bottlenecks due to operational pressures on real estate developers and long approval processes for municipal projects, leading to longer receivables recovery periods[33]. - The environmental sanitation service industry is experiencing growth driven by increased government investment in urban sanitation and the ongoing urbanization process, with a focus on public health management[35]. - The company’s subsidiary, Guangdong Lurun, has established a full industry chain in environmental sanitation services, becoming a leading brand in the Guangdong-Hong Kong-Macao Greater Bay Area[37]. - The company has seen a decrease in fixed assets primarily due to depreciation and disposal, while cash and cash equivalents increased due to additional long-term borrowings[38]. Strategic Initiatives - The company plans not to distribute cash dividends, issue bonus shares, or increase share capital from reserves[6]. - The company has implemented cost reduction and efficiency improvement measures, including energy-saving technology upgrades and integration of procurement, production, and sales processes[36]. - The company plans to publicly issue bonds not exceeding RMB 1 billion, with a maximum term of 5 years, to improve its financial structure and meet funding needs[50]. - The company received approval from the China Securities Regulatory Commission to issue bonds totaling up to RMB 930 million, which will be initiated based on external financing conditions and operational status[51]. - The company aims to strengthen credit screening for concrete sales customers and improve collection efforts on accounts receivable[74]. - The company plans to enhance resource integration and risk control for Guangdong Lurun to mitigate the impact of goodwill impairment on profits[74]. Market Conditions - In 2019, the national cement production reached 2.33 billion tons, a year-on-year increase of 6.1%, while the ready-mixed concrete production was 255 million cubic meters, up 14.5% year-on-year[32]. - The company holds a market share of approximately 35% in the ready-mixed concrete business in Hainan Province, with a designed production capacity of 7.8 million cubic meters across 10 mixing stations and 26 production lines[36]. - The concrete industry is expected to maintain reasonable growth due to ongoing infrastructure projects and urban renewal initiatives[136]. - The municipal sanitation market is expanding due to rising urban waste generation and increased government focus on public health[140]. - The landscaping industry faces challenges such as high accounts receivable and cash flow issues, but government standards are expected to drive growth[138]. Research and Development - The company has established a research station focused on tropical landscape, enhancing its R&D capabilities with a team of 20 researchers and 9 academicians[43]. - The company emphasizes innovation and has formed partnerships with universities to improve product quality and competitiveness[42]. - The total R&D investment was ¥30,466,330.20, which is a decrease of 38.80% compared to ¥49,782,398.51 in 2018, with R&D investment accounting for 1.18% of operating revenue[104]. - The company submitted two invention patent applications in 2019 and was granted three new patents, enhancing its intellectual property portfolio[102]. Financial Management - The company has ongoing projects with a total estimated investment of CNY 462 million and CNY 863 million, with significant progress reported as of December 31, 2019[82]. - The company reported a total of ¥1,296,710,835.61 in restricted assets, including cash deposits and accounts receivable pledged as collateral[115]. - The company reported a net cash flow from operating activities of ¥234,897,526.84, a decrease of 7.82% compared to the previous year[106]. - The net increase in cash and cash equivalents was ¥156,829,128.28, a significant improvement from a net decrease of ¥216,135,358.15 in the previous year, reflecting a 172.56% change[107]. - The company has committed to optimizing its debt structure and expanding financing channels to mitigate liquidity risks[149]. Shareholder Relations - The company has adhered to the regulations regarding cash dividends as per its articles of association and shareholder resolutions[157]. - The company has a three-year shareholder return plan (2017-2019) that guides its profit distribution strategy[156]. - The company has ensured that minority shareholders have had opportunities to express their opinions and protect their legal rights[157]. - The company has maintained a clear and transparent decision-making process regarding its cash dividend policy[157]. Related Party Transactions - The company reported a related party transaction amounting to 1,014.89 million CNY for landscaping services, representing 4.77% of similar transaction amounts[195]. - The approved transaction limit for landscaping services was set at 5,000 million CNY, with no transactions exceeding this limit[195]. - The company disclosed its related party transactions in accordance with regulatory requirements on the designated information disclosure platform[195][197].

Financial Performance - The company's operating revenue for Q1 2020 was ¥321,381,932.22, a decrease of 40.40% compared to ¥539,190,213.24 in the same period last year[7]. - The net profit attributable to shareholders was a loss of ¥15,158,045.67, representing a decline of 148.06% from a profit of ¥31,538,970.87 in the previous year[7]. - The net profit attributable to shareholders after deducting non-recurring gains and losses was a loss of ¥23,958,544.24, a decrease of 226.83% compared to a profit of ¥18,889,644.07 last year[7]. - Total operating revenue for Q1 2020 was ¥321,381,932.22, a decrease of 40.40% compared to ¥539,190,213.24 in Q1 2019, primarily due to the impact of the pandemic and delayed resumption of work[18]. - Operating profit for Q1 2020 was a loss of CNY 9,212,436.76, compared to a profit of CNY 45,737,386.35 in Q1 2019[44]. - The company reported a net loss of CNY 13,252,702.71 for Q1 2020, compared to a net profit of CNY 30,954,435.91 in the same period last year, indicating a significant decline in profitability[44]. Cash Flow and Liquidity - The net cash flow from operating activities improved to ¥35,925,043.51, a significant increase of 139.17% from a negative cash flow of ¥91,706,328.07 in the previous year[7]. - Cash received from operating activities decreased by 50.13% to ¥31,652,336.89 in Q1 2020 from ¥63,475,700.51 in Q1 2019, mainly due to a reduction in cash guarantees received[20]. - Cash paid for purchasing goods and services decreased by 42.03% to ¥285,788,738.68 in Q1 2020 from ¥493,030,877.66 in Q1 2019, attributed to the pandemic's impact[20]. - Cash inflow from operating activities totaled CNY 505,805,778.45, a decrease from CNY 617,737,961.16 in the previous year[51]. - The cash flow from operating activities showed a net outflow of 13,987,607.68 CNY for the current period, an improvement from the previous outflow of 49,337,914.38 CNY[55]. - The company paid 21,864,403.15 CNY in dividends and interest, compared to 25,487,426.06 CNY in the previous period, indicating a reduction in cash outflow for financing[53]. Assets and Liabilities - Total assets at the end of the reporting period were ¥6,139,751,416.25, a slight decrease of 0.34% from ¥6,160,992,143.84 at the end of the previous year[7]. - The company's total liabilities decreased by 0.34% compared to the previous year, indicating a stable financial position despite the revenue decline[7]. - Long-term borrowings increased by 60.66% to ¥184,200,000.00 in Q1 2020 from ¥114,650,000.00 in Q1 2019, indicating a rise in bank loans[22]. - Total liabilities decreased slightly to CNY 2,973,282,245.74 from CNY 2,976,321,739.09[37]. - The company's total equity decreased to CNY 3,166,469,170.51 from CNY 3,184,670,404.75[37]. - The company reported a total liability of CNY 2,976,321,739.09, with current liabilities at CNY 1,988,045,118.34 and non-current liabilities at CNY 988,276,620.75[60]. Inventory and Cost Management - The company reported an increase in inventory to ¥415,507,141.80, a rise of 27.55% from ¥325,772,085.07, attributed to increased raw materials and construction projects[16]. - Operating costs decreased by 40.44% to ¥247,688,283.91 in Q1 2020 from ¥415,876,547.84 in Q1 2019, reflecting the decline in revenue[18]. - The company is focusing on cost control measures, as indicated by the reduction in operating costs despite a decline in revenue[43]. Other Financial Metrics - The weighted average return on equity was -0.49%, down from 0.88% in the same period last year, reflecting the impact of the net loss[7]. - Basic and diluted earnings per share were both reported at -0.0132, compared to 0.03 in the same quarter last year[45]. - The company recorded a profit from investment of CNY 669,468.22, compared to a loss of CNY 246,297.59 in the previous year[47]. - The total comprehensive income for the period was CNY -13,252,702.71, compared to CNY 30,954,435.91 in the same period last year[45]. - The company incurred financial expenses of CNY 9,435,417.62, down from CNY 13,960,291.20 in the previous year[47]. Changes in Accounting and Reporting - The company has undergone a change in accounting policy, resulting in the reclassification of prepayments to contract liabilities, which may affect future cash flow reporting[16]. - The company has not engaged in any repurchase transactions during the reporting period, indicating a focus on maintaining liquidity[12]. - The company has not undergone an audit for the first quarter report[64].