Financial Performance - In Q3 2022, the company's operating revenue was RMB 372,683,423.29, representing a year-on-year increase of 27.15%[8] - The net profit attributable to shareholders was RMB 5,445,106.84, a decrease of 31.54% compared to the same period last year[8] - The net profit attributable to shareholders after deducting non-recurring gains and losses was RMB -386,282.92, reflecting a decline of 124.57% year-on-year[8] - Total operating revenue for the first nine months of 2022 was RMB 926,736,014.87, an increase from RMB 866,107,941.76 in the same period of 2021, representing a growth of approximately 6.8%[27] - Net profit for the first nine months of 2022 was RMB 7,924,051.15, a significant decrease from RMB 38,783,554.40 in the same period of 2021[27] - Total comprehensive income for the period was RMB 7,924,051.15, a decrease from RMB 38,783,554.40 in the same period last year[31] - Comprehensive income attributable to the parent company was RMB 6,300,744.99, down from RMB 42,398,508.48 year-on-year[31] Assets and Liabilities - The total assets as of September 30, 2022, amounted to RMB 2,174,823,476.47, an increase of 4.79% from December 31, 2021[8] - The total assets as of September 30, 2022, amounted to RMB 2,174,823,476.47, up from RMB 2,075,458,857.18 at the end of 2021, reflecting an increase of approximately 4.0%[22] - Current assets totaled RMB 1,202,932,285.00 as of September 30, 2022, compared to RMB 1,100,647,643.42 at the end of 2021, marking an increase of about 9.3%[22] - The total liabilities as of September 30, 2022, were RMB 812,065,252.76, compared to RMB 720,624,684.62 at the end of 2021, representing an increase of about 12.7%[25] Cash Flow - Cash inflow from operating activities totaled RMB 653,373,088.68, an increase from RMB 601,699,357.19 in the same period last year[34] - Net cash flow from operating activities was RMB 75,132,699.54, slightly down from RMB 77,377,543.20 year-on-year[34] - Cash inflow from investment activities was RMB 190,688,191.84, compared to RMB 173,052,338.84 in the previous year[34] - Net cash flow from investment activities was negative at RMB -88,074,487.83, an improvement from RMB -95,826,331.31 year-on-year[34] - Cash inflow from financing activities was RMB 186,000,000.00, up from RMB 128,000,000.00 in the previous year[34] - Net cash flow from financing activities was negative at RMB -27,702,631.15, compared to a positive RMB 795,188.03 in the same period last year[34] - The ending cash and cash equivalents balance was RMB 101,563,740.85, down from RMB 126,784,449.01 year-on-year[34] Shareholder Information - The top shareholder, Zhejiang Shibao Holding Group Co., Ltd., holds 41.28% of the shares, indicating strong control over the company[16] Research and Development - Research and development investment in intelligent steering and drive-by-wire steering has shown an increasing trend[12] - Research and development expenses for the first nine months of 2022 were RMB 65,628,133.92, up from RMB 57,048,327.80 in the same period of 2021, reflecting an increase of about 15.5%[27] Operational Challenges - The company experienced a significant decline in net profit due to decreased sales of commercial vehicles and high raw material costs, leading to a shift in product sales structure[12] - The company reported a basic earnings per share of RMB 0.0069, down 31.89% from the previous year[8] - The weighted average return on net assets was 0.39%, a decrease of 0.19 percentage points compared to the previous year[8] - The company's cash and cash equivalents decreased to RMB 172,334,265.60 from RMB 195,849,881.10 year-over-year, a decline of approximately 12.0%[22] - The company's inventory increased to RMB 387,662,965.96 as of September 30, 2022, from RMB 329,151,211.94 at the end of 2021, indicating a growth of approximately 17.7%[22] - The company reported a decrease in interest income to RMB 687,132.72 from RMB 947,262.14 year-over-year, a decline of approximately 27.5%[27]

Financial Performance - Total revenue for the first half of 2022 was approximately CNY 554.05 million, a decrease of 3.31% compared to CNY 573.01 million in the same period of 2021[42] - Net profit attributable to shareholders of the listed company was CNY 855,638.15, down 97.52% from CNY 34.45 million in the previous year[42] - The net profit after deducting non-recurring gains and losses was a loss of CNY 14.08 million, a decline of 180.70% compared to a profit of CNY 17.44 million in 2021[42] - Net cash flow from operating activities was CNY 50.22 million, a decrease of 23.92% from CNY 66.00 million in the first half of 2021[42] - Basic and diluted earnings per share were both CNY 0.0011, down 97.48% from CNY 0.0436 in the previous year[42] - Operating profit for the first half of 2022 was RMB 622.01 thousand, a sharp decline from RMB 33.70 million in the same period of 2021[53] - The total comprehensive income for the first half of 2022 was RMB 1.25 million, compared to RMB 32.52 million in the same period of 2021[53] Assets and Liabilities - Total assets as of June 30, 2022, were approximately CNY 2.07 billion, a slight decrease of 0.06% from CNY 2.08 billion at the end of 2021[42] - Current assets totaled RMB 1,112,864,471.33, compared to RMB 1,100,647,643.42 at the end of 2021, reflecting a growth of approximately 1.98%[44] - Total liabilities decreased slightly to RMB 718,079,262.92 from RMB 720,624,684.62, a reduction of about 0.35%[46] - Non-current assets totaled RMB 961,298,363.42, down from RMB 974,811,213.76, representing a decrease of approximately 1.4%[44] Cash Flow - Operating cash flow for the first half of 2022 was RMB 50,216,520.98, a decrease of 24% compared to RMB 66,004,332.51 in the same period of 2021[60] - Total cash inflow from operating activities was RMB 403,520,677.84, down from RMB 418,507,361.51 year-on-year[60] - Cash flow from financing activities showed a net outflow of RMB 62,488,982.71, compared to a net inflow of RMB 4,359,556.00 in the same period last year[60] Equity and Profits - Net assets attributable to shareholders of the listed company increased by 0.06% to CNY 1.38 billion from CNY 1.38 billion at the end of 2021[42] - The company reported a total of RMB 269,197,741.99 in undistributed profits, up from RMB 268,342,103.84, indicating a growth of about 0.32%[46] - The company's undistributed profits increased to RMB 50,097,092.12 from RMB 44,959,740.08, marking an increase of about 11.5%[68] Research and Development - Research and development expenses rose to RMB 40.78 million, an increase of 9.0% from RMB 37.41 million in the first half of 2021[53] Accounting Policies - The company adheres to the accounting standards and policies that accurately reflect its financial status and operational results[79] - Financial assets are classified into three categories upon initial recognition: (1) measured at amortized cost; (2) measured at fair value with changes recognized in other comprehensive income; (3) measured at fair value with changes recognized in profit or loss[92] - The company recognizes financial assets or liabilities when it becomes a party to the financial instrument contract, measuring them at fair value upon initial recognition[93] Revenue Recognition - Revenue recognition principles require the company to assess contracts at the start date, identifying performance obligations and determining whether they are fulfilled over time or at a point in time[187] - The company recognizes revenue for sales of automotive steering gears and parts at a point in time when products are delivered and accepted by customers, with payment received or evidence of collection obtained[192] Government Grants - Government grants are recognized when the company can meet the conditions attached to the grants and is able to receive them, measured at the amount received or receivable[193] - Government grants related to income are recognized as deferred income to compensate for future costs or losses, and are recorded in the profit or loss when the related costs are recognized[197] Impairment and Valuation - Long-term assets are tested for impairment annually, with goodwill and indefinite-life intangible assets undergoing impairment tests regardless of indications[173] - The company reported a significant impairment loss on non-current assets held for sale, which was recognized in the current period's profit and loss statement[141]

Financial Performance - The company reported a significant increase in revenue, achieving a total of 1.2 billion RMB for the first half of 2022, representing a year-on-year growth of 15%[11]. - The gross profit margin for the first half of 2022 was 25%, a slight decrease from 27% in the same period last year, primarily due to rising raw material costs[11]. - The company's revenue for the reporting period was RMB 554,052,591.58, a decrease of 3.31% compared to the same period last year[41]. - The net profit attributable to shareholders was RMB 855,638.15, down 97.52% year-on-year[41]. - The net profit after deducting non-recurring gains and losses was RMB -14,076,298.95, a decline of 180.70% compared to the previous year[41]. - The operating cash flow for the period was RMB 50,216,520.98, a decrease of 23.92% from the previous year[41]. - The gross profit margin for the main business was 15.83%, down from 22.98% in the same period last year[42]. - The company experienced a significant decline in sales of commercial vehicle steering products due to poor industry performance, particularly in commercial vehicle production and sales, which fell by 38.50%[41]. - The company reported a net cash decrease of RMB 42,780,271.27 in cash and cash equivalents, a decline of 49.30% compared to the previous year[41]. - The total operating revenue for the reporting period was RMB 554,052,591.58, representing a year-on-year decrease of 3.31%[48]. - The investment income increased by 264.54% year-on-year to RMB 398,203.91, primarily due to an increase in the amount of bank short-term financial products redeemed[46]. - The financial expenses for the reporting period were RMB 2,725,879.45, an increase of 26.45% year-on-year, mainly due to reduced interest income and increased exchange losses[46]. - The cash and cash equivalents decreased by RMB 42,780,271.27, a year-on-year decrease of 49.30%[47]. - The company reported a significant increase in investment income to ¥398,203.91 from ¥109,233.65, an increase of approximately 264.5% year-over-year[138]. - Net profit dropped significantly to ¥1,249,399.27 from ¥32,520,824.84, a decrease of approximately 96.2% year-over-year[138]. - Basic earnings per share decreased to ¥0.0011 from ¥0.0436, a decline of approximately 97.5% year-over-year[138]. Market Expansion and Strategy - The company has expanded its user base, with a 20% increase in the number of clients in the automotive sector compared to the previous year[11]. - Future outlook indicates a targeted revenue growth of 10% for the second half of 2022, driven by new product launches and market expansion strategies[11]. - The company plans to enhance its overseas market presence, with a goal of increasing international sales by 30% by the end of 2023[11]. - The company plans to accelerate the development of intelligent driving and autonomous driving technologies, focusing on electric steering and related products[67]. - The company plans to expand its market presence and invest in new product development[133]. - The company is focusing on enhancing its technology capabilities to drive future growth[133]. - The company aims to explore potential mergers and acquisitions to strengthen its market position[133]. Research and Development - The company is investing 100 million RMB in R&D for new technologies, focusing on electric steering systems and smart automotive components[11]. - Research and development expenses amounted to RMB 40,783,290.97, an increase of 9.02% year-on-year, representing 7.36% of total revenue[43]. - The company has been focusing on the development of electric, intelligent, and automated steering technologies to maintain its competitive advantage in the market[43]. Financial Health and Risks - The accounts receivable as of June 30, 2022, accounted for 45% of total revenue, indicating a need for improved collection strategies[14]. - The company faces risks related to raw material price fluctuations, which could impact production costs and profit margins[13]. - The company is aware of potential market volatility and is preparing strategies to mitigate risks associated with economic downturns and industry changes[8]. - The total assets at the end of the reporting period were RMB 2,074,162,834.75, a slight decrease of 0.06% from the end of the previous year[41]. - The company has no significant doubts regarding its ability to continue as a going concern for the next 12 months[164]. - The company’s total liabilities decreased, reflecting improved financial stability[152]. Corporate Governance and Shareholder Information - The company has no plans to distribute cash dividends or issue bonus shares for the current fiscal year, aiming to reinvest profits into growth initiatives[6]. - The company did not distribute cash dividends or issue new shares from capital reserves for the reporting period[73]. - The controlling shareholder, Zhejiang Shibao Holding Group, has committed not to transfer or entrust the management of its shares for 36 months from the date of the A-share listing, with a maximum of 25% transfer allowed annually thereafter[89]. - The largest shareholder, Zhejiang Shibao Holding Group Co., Ltd., holds 41.28% of the shares, totaling 325,993,298 shares[118]. - The second largest shareholder, Hong Kong Central Clearing (Agent) Limited, holds 27.85% of the shares, totaling 219,954,386 shares[118]. - There were no significant related party transactions during the reporting period[98]. - The company has not experienced any changes in its controlling shareholder or actual controller during the reporting period[122][123]. Compliance and Accounting Practices - The financial report for the half-year period is unaudited[127]. - Financial statements comply with accounting standards, accurately reflecting the company's financial position, operating results, and cash flows[165]. - The company utilizes the Chinese Yuan (RMB) as its functional currency for accounting purposes[165]. - The company has established specific accounting policies for financial instruments, fixed asset depreciation, and revenue recognition based on its operational characteristics[165]. - The company recognizes impairment losses based on the weighted average of expected credit losses, reflecting the risk of default[178]. Operational Efficiency - The company has initiated new strategies for cost management and operational efficiency to improve profitability[152]. - The company has established criteria for classifying non-current assets as held for sale, including the expectation of sale completion within one year[188].

Financial Performance - The company's revenue for the first quarter was ¥260,633,969.48, a decrease of 11.23% compared to ¥293,620,056.63 in the same period last year[6] - The net profit attributable to shareholders was a loss of ¥4,032,392.53, representing a decline of 119.85% from a profit of ¥20,318,879.58 in the previous year[6] - The basic and diluted earnings per share were both -¥0.0051, a decrease of 119.84% compared to ¥0.0257 in the same period last year[6] - Net profit for the current period was -¥4,643,666.21, compared to a net profit of ¥19,518,183.73 in the previous period, indicating a significant decline[20] - The company reported a significant decline in gross profit margin due to poor performance in the automotive industry, particularly in commercial vehicle production and sales[11] Cash Flow and Operating Activities - The net cash flow from operating activities was ¥6,511,908.60, down 72.54% from ¥23,714,285.28 year-on-year[6] - Cash flow from operating activities generated a net amount of ¥6,511,908.60, down from ¥23,714,285.28 in the previous period[22] - The company experienced a substantial increase in cash outflows for chip procurement due to high chip prices, impacting overall cash flow[11] - The company’s cash and cash equivalents at the end of the period decreased to ¥117,193,602.52 from ¥154,063,124.67, a decline of 23.9%[22] Assets and Liabilities - The total assets at the end of the reporting period were ¥2,100,430,539.23, an increase of 1.20% from ¥2,075,458,857.18 at the end of the previous year[6] - Total assets increased to ¥2,100,430,539.23 from ¥2,075,458,857.18 at the beginning of the year, reflecting a growth of 1.2%[17] - Total liabilities rose to ¥750,240,032.88, up from ¥720,624,684.62, marking an increase of 4.3%[17] - The net assets attributable to shareholders were ¥1,372,804,891.69, a slight decrease of 0.29% from ¥1,376,837,284.22 at the end of the previous year[6] - The total equity attributable to shareholders of the parent company decreased to ¥1,372,804,891.69 from ¥1,376,837,284.22, a slight decline of 0.3%[17] Research and Development - Research and development expenses increased to ¥20,325,622.00 from ¥18,243,270.89, representing a rise of 11.4%[20] Strategic Developments - There were no significant new strategies, product developments, or market expansions reported during the quarter[14]

Revenue and Profit - Revenue for Q1 2022 was RMB 260.63 million, a decrease of 11.23% compared to RMB 293.62 million in Q1 2021[8] - Net profit attributable to shareholders was a loss of RMB 4.03 million, down 119.85% from a profit of RMB 20.32 million in the same period last year[8] - The company reported total operating revenue of RMB 260,633,969.48 for the first quarter of 2022, down 11.2% from RMB 293,620,056.63 in the same period of 2021[25] - Operating profit for Q1 2022 was a loss of RMB 5,040,952.62, contrasting with a profit of RMB 20,697,946.93 in Q1 2021[25] - The net profit attributable to the parent company for Q1 2022 was a loss of RMB 4,032,392.53, compared to a profit of RMB 20,318,879.58 in Q1 2021[27] - Basic and diluted earnings per share for Q1 2022 were both -0.0051, a decline from 0.0257 in Q1 2021[27] Cash Flow and Liquidity - Net cash flow from operating activities decreased by 72.54% to RMB 6.51 million, compared to RMB 23.71 million in Q1 2021[11] - Operating cash flow for Q1 2022 was RMB 6,511,908.60, a decrease of 72.5% compared to RMB 23,714,285.28 in Q1 2021[31] - Cash inflow from operating activities totaled RMB 185,606,864.38, down 6.4% from RMB 199,396,620.14 in the same period last year[31] - Total cash and cash equivalents at the end of Q1 2022 were RMB 117,193,602.52, down 23.9% from RMB 154,063,124.67 at the end of Q1 2021[31] - The company experienced a net decrease in cash and cash equivalents of RMB 25,419,655.31 in Q1 2022, contrasting with an increase of RMB 9,012,906.18 in Q1 2021[31] Assets and Liabilities - Total assets as of March 31, 2022, were RMB 2.10 billion, an increase of 1.20% from RMB 2.08 billion at the end of 2021[8] - Total liabilities as of March 31, 2022, were RMB 750,240,032.88, compared to RMB 720,624,684.62 as of December 31, 2021, indicating an increase of about 4.1%[23] - Total assets as of March 31, 2022, were RMB 2,100,430,539.23, up from RMB 2,075,458,857.18 as of December 31, 2021, reflecting an increase of approximately 1.2%[23] - As of March 31, 2022, total current assets amounted to RMB 1,137,091,558.60, an increase from RMB 1,100,647,643.42 as of December 31, 2021, representing a growth of approximately 3.3%[21] Shareholder Information - The top shareholder, Zhejiang Shibao Holding Group Co., Ltd., holds 43.28% of the shares, totaling 341,786,098 shares[15] Operational Performance - The gross profit margin declined due to poor performance in the automotive industry, particularly in commercial vehicle production and sales[11] - The decline in sales revenue was primarily due to increased procurement costs and reduced cash inflow from sales[11] - Research and development expenses for Q1 2022 were RMB 20,325,622.00, an increase from RMB 18,243,270.89 in Q1 2021, indicating a growth of approximately 11.4%[25] - The company’s inventory increased to RMB 348,892,554.22 as of March 31, 2022, compared to RMB 329,151,211.94 as of December 31, 2021, representing a rise of about 6.0%[21] Investment Activities - Cash outflow from investment activities was RMB 49,495,394.35, a significant decrease of 36.9% compared to RMB 78,300,204.08 in Q1 2021[31] - Cash received from investment recovery was RMB 20,000,000.00, down 60% from RMB 50,000,000.00 in Q1 2021, indicating reduced investment returns[31] - The net cash flow from investment activities was -RMB 20,510,295.03, worsening from -RMB 13,302,930.49 in the previous year[31] Other Information - The company has no other significant matters to report during the reporting period[18] - The company reported a significant increase in non-recurring losses, with a total of RMB 11.89 million attributed to non-recurring items[11] - The weighted average return on net assets was -0.29%, down from 1.50% in the previous year[8] - Cash outflow for purchasing goods and services was RMB 91,090,384.81, an increase of 21.5% from RMB 74,973,370.35 in Q1 2021[31] - Net cash flow from financing activities was -RMB 11,259,255.91, compared to -RMB 1,188,419.27 in Q1 2021, indicating increased financing pressure[31] - Cash inflow from financing activities increased to RMB 60,000,000.00 in Q1 2022, compared to RMB 15,000,000.00 in Q1 2021, reflecting a stronger borrowing position[31]

Company Overview - Zhejiang Shibao Company Limited's H shares were listed on the Hong Kong Stock Exchange on May 16, 2006, and later transferred to the main board on March 9, 2011, with stock code 1057[20]. - The company has over 30 years of experience in the automotive industry, providing various steering products for commercial vehicles, passenger cars, and new energy vehicles[21]. - The company is one of the first in China to independently develop hydraulic and electric power steering systems, with ongoing R&D in intelligent steering technology for smart and autonomous vehicles[21][22]. Financial Performance - The company achieved a revenue of RMB 1,177,915,845.96 in 2021, representing a year-on-year increase of 6.88%[32]. - The gross profit from main business was RMB 216,657,158.84, a decrease of RMB 28,106,445.37 compared to the previous year, resulting in a gross profit margin of 19.49%[32]. - The company achieved operating revenue of RMB 1,177,915,845.96, an increase of 6.88% year-on-year[37]. - Net profit attributable to shareholders was RMB 34,156,323.88, a decline of 16.38% compared to the previous year[42]. - The automotive parts and components manufacturing segment generated revenue of RMB 1,111,484,125.40, accounting for 94.36% of total revenue, with a year-on-year increase of 3.83%[44]. - The company's overseas revenue reached RMB 168,978,934.14, a significant increase of 77.83% year-on-year, reflecting successful market expansion[44]. Research and Development - R&D expenses amounted to RMB 80,484,534.57, up 21.93%, representing 6.83% of operating revenue, indicating a focus on safety, intelligence, automation, energy-saving, and lightweight technologies[38]. - The number of R&D personnel rose by 13.82% to 346, with their proportion in the workforce increasing to 21.15%[60]. - The company focuses on the research and development of automotive steering products, including steering gears and key components of steering systems[132]. - Research and development expenses are set to increase by 30% in 2022, focusing on advanced manufacturing technologies[118]. Market and Industry Trends - The automotive industry in China saw a production and sales increase of 3.4% and 3.8% respectively in 2021, with significant growth in new energy vehicles[36]. - The sales volume of new energy vehicles in China exceeded 3.5 million units in 2021, with a market share of 13.4%[81]. - The automotive market in China is projected to maintain stable demand in 2022, supported by macroeconomic stability and improvements in supply chain issues[81]. Strategic Goals and Future Plans - The strategic goal is to offer intelligent driving solutions and products to global leading automotive groups, with a focus on developing steering systems and key components with international competitiveness[20]. - The company plans to focus on the transformation and upgrading of products and technologies, particularly in the areas of intelligent and autonomous driving steering products[32]. - The company plans to focus on the development of electric steering, electro-hydraulic steering, and steer-by-wire technologies, with expectations for mass production in the future[83]. - The company aims to enhance the safety and comfort of driving by providing intelligent driving solutions and products to leading global automotive groups[82]. - The company plans to expand its market presence in Southeast Asia, targeting a 25% increase in market share by 2023[118]. Risks and Challenges - The company faces risks related to industry fluctuations, product quality, and raw material price volatility, which could impact its operational performance[85][89]. - The company has a high proportion of accounts receivable, which poses a risk of bad debts if collection efforts are unsuccessful or if customers face financial difficulties[92]. Governance and Compliance - The company has established a governance structure that meets the listing requirements of both mainland China and Hong Kong, ensuring transparency in financial reporting[22]. - The company has complied with relevant laws and regulations during the reporting period[140]. - The financial statements for the year ended December 31, 2021, were audited by Tianjian Accounting Firm[185]. Employee and Management Practices - The total employee compensation and benefits amounted to RMB 195,301,727.62 in the reporting period, an increase from RMB 166,894,129.30 in 2020[110]. - The company has established a flexible talent introduction and incentive policy to attract external talent[174]. - The compensation for senior management is determined by the board, considering industry standards and internal employment conditions[160]. Shareholder and Financial Policies - The company plans not to distribute cash dividends or issue bonus shares for the 2021 fiscal year, focusing instead on retaining profits for operational needs and loss compensation[104][106]. - The company’s profit distribution policy emphasizes cash dividends, with a principle of distributing no less than 20% of the distributable profit in cash annually[99]. - The company has no significant foreign currency risk as sales and purchases are primarily conducted in RMB, and no hedging arrangements are in place[107].

Profit Distribution and Financial Performance - The company reported a profit distribution plan of no cash dividends, no bonus shares, and no capital reserve conversion into shares[6]. - The company does not plan to distribute cash dividends for the reporting period, reflecting a focus on reinvestment[6]. - The board decided not to distribute cash dividends for the fiscal year 2021, opting instead to retain profits for operational needs and to offset previous losses[143]. - The company plans to roll over the undistributed profits from 2021 to meet future operational funding and profit distribution needs[142]. - The net profit attributable to shareholders of the listed company decreased by 16.38% to ¥34,156,323.88 in 2021 from ¥40,845,971.97 in 2020[31]. - The company's total revenue for the reporting period was RMB 1,177,915,845.96, representing a year-on-year increase of 6.88%[47]. - The gross profit from main business activities was RMB 216,657,158.84, a decrease of RMB 28,106,445.37 compared to the previous year, resulting in a gross profit margin of 19.49%[47]. - The net profit attributable to shareholders was RMB 34,156,323.88, reflecting a year-on-year decline of 16.38%[53]. - The company reported a significant loss of approximately 22.8 million yuan for Jilin Shibao, indicating challenges in that subsidiary[81]. Risks and Challenges - The company faces risks related to industry fluctuations, particularly due to the dependence on the automotive industry's performance, which is influenced by macroeconomic cycles and national policies[8]. - The company is exposed to risks from raw material price fluctuations, which significantly impact production costs and profit margins[13]. - The company has a high proportion of accounts receivable, which poses a risk of bad debts if collection efforts are unsuccessful or if customers face financial difficulties[14]. - The company acknowledges the potential impact of international political and economic changes on its overseas market expansion efforts[15]. - The company has experienced a notable increase in accounts receivable, which may further rise with the expansion of its business scale[14]. Market and Product Development - The company has achieved qualification as a global supplier for Daimler Group's commercial vehicle chassis components and steering systems, indicating successful overseas market expansion[15]. - The company is committed to expanding its overseas market presence while solidifying its domestic market base[15]. - The company emphasizes the importance of continuous technological innovation to meet the evolving demands of automotive manufacturers for safety, intelligence, and energy efficiency[10]. - The company aims to enhance the safety and comfort of automotive driving, focusing on intelligent driving solutions and products for leading global automotive groups[86]. - The company plans to accelerate the transformation and upgrading of products and technologies, particularly in the fields of intelligent driving and autonomous driving steering products[87]. Research and Development - Research and development expenses amounted to RMB 80,484,534.57, up 21.93% year-on-year, accounting for 6.83% of total revenue[48]. - The company's R&D investment amounted to ¥80,484,534.57, a 21.93% increase from ¥66,006,925.33 in 2020, representing 6.83% of operating revenue[65]. - The number of R&D personnel increased by 13.82% to 346 in 2021, with a proportion of 21.15% of total employees[65]. - The company has launched an electric power steering system that operates independently of the engine, significantly reducing fuel consumption and environmental pollution[162]. - The company is a leading developer of hydraulic and electric power steering systems in China, with ongoing research in intelligent steering technologies for smart and autonomous vehicles[41]. Governance and Management - The company maintains a governance structure that meets the regulatory requirements of both mainland China and Hong Kong, ensuring transparency in financial reporting and risk control[42]. - The management team includes Zhang Baoyi as general manager, Tang Haohan as vice general manager, and Zhang Lanjun as the financial officer, all serving until June 30, 2024[112]. - The company has a diverse board of directors with members holding various significant positions and experiences in the industry[99][100][103]. - The total number of shares held by the management team remains stable, indicating confidence in the company's future performance[98]. - The company has not reported any significant changes in shareholding among the board members during the period[98]. Employee and Talent Management - The total number of employees at the end of the reporting period was 1,636, with 1,449 from major subsidiaries and 187 from the parent company[135]. - The professional structure included 1,050 production staff, 421 technical staff, 57 sales staff, 31 financial staff, and 77 administrative staff[135]. - The company established a flexible talent introduction and incentive policy to attract external talent[135]. - The company emphasizes employee training and development to ensure personnel reserves meet business needs[137]. Internal Control and Compliance - The internal audit department conducted quarterly reviews of internal controls, covering financial, operational, compliance, and risk management aspects[150]. - The company maintained effective internal control over financial reporting as of December 31, 2021, according to the external auditor's assessment[152]. - No significant internal control deficiencies were identified during the reporting period[153]. - The company emphasizes compliance with relevant laws and regulations regarding profit distribution policies[142]. - The board's decision-making process regarding profit distribution is compliant and transparent, ensuring protection of minority shareholders' rights[141]. Financial Position and Investments - The total assets at the end of 2021 were ¥2,075,458,857.18, reflecting a 5.02% increase from the end of 2020[31]. - The net assets attributable to shareholders of the listed company increased by 2.54% to ¥1,376,837,284.22 at the end of 2021[31]. - The total loans and borrowings increased to ¥171,780,000.00, up by ¥64,980,000.00 from the previous year[70]. - The company has invested RMB 88 million in bank wealth management products, with an outstanding balance of RMB 62.7 million[191]. - The company has no significant litigation or arbitration matters during the reporting period[180].

Financial Performance - The company's operating revenue for the third quarter was ¥293,100,874.46, a decrease of 6.94% compared to the same period last year[6] - The net profit attributable to shareholders was ¥7,953,339.58, down 63.18% year-on-year[6] - The net profit attributable to shareholders after deducting non-recurring gains and losses was ¥1,572,274.28, a significant decrease of 90.18% compared to the previous year[6] - Total operating revenue for the period reached ¥866,107,941.76, an increase of 8.0% compared to ¥802,228,479.88 in the previous period[18] - Net profit attributable to the parent company was ¥42,398,508.48, up from ¥38,676,123.24, reflecting a growth of 7.0%[18] - The basic earnings per share for the reporting period was ¥0.0101, a decrease of 63.24% year-on-year[6] - The basic earnings per share increased to ¥0.0537 from ¥0.0490, representing a growth of 14.3%[18] Assets and Liabilities - The total assets at the end of the reporting period were ¥1,996,702,293.78, an increase of 1.04% from the end of the previous year[6] - Total assets increased to ¥1,996,702,293.78 from ¥1,976,246,329.85, marking a growth of 1.2%[15] - Current assets totaled ¥1,042,395,224.49, up from ¥980,352,009.67, indicating an increase of 6.3%[15] - The company reported a decrease in total liabilities to ¥628,679,543.45 from ¥647,007,133.92, a reduction of 2.0%[15] Cash Flow - The company's cash flow from operating activities was ¥77,377,543.20, showing a decrease of 6.73% compared to the previous year[6] - Cash flow from operating activities generated ¥77,377,543.20, slightly down from ¥82,959,979.10 in the previous period[20] - The company’s cash and cash equivalents at the end of the period were ¥126,784,449.01, down from ¥137,023,031.48[20] Equity and Returns - The equity attributable to shareholders at the end of the reporting period was ¥1,385,079,468.82, up 3.16% from the previous year[6] - The weighted average return on net assets was 0.58%, down 1.04 percentage points from the previous year[6] Research and Development - Research and development expenses rose to ¥57,048,327.80, compared to ¥48,999,934.54, reflecting a 16.4% increase[18] Inventory - The company’s inventory increased to ¥329,094,690.96 from ¥254,371,320.73, a rise of 29.4%[15] Industry Context - The company attributed the decline in revenue and profit to the overall performance of the automotive industry and rising raw material costs[9] Other Matters - There were no other significant matters reported during the period[12]

[Company Information](index=3&type=section&id=Company%20Information) Zhejiang Shibao Company Limited is a dual-listed automotive parts manufacturer in China - Zhejiang Shibao Company Limited is a joint-stock company registered in the People's Republic of China, primarily engaged in the manufacturing and sales of **automotive parts** - The company's shares are listed on both the Shenzhen Stock Exchange (A-shares, stock code: **002703**) and The Stock Exchange of Hong Kong Limited (H-shares, stock code: **1057**)[5](index=5&type=chunk)[15](index=15&type=chunk)[49](index=49&type=chunk) [Key Accounting Data and Financial Indicators](index=6&type=section&id=Key%20Accounting%20Data%20and%20Financial%20Indicators) This section presents the company's key financial performance and position indicators for the reporting period Key Financial Indicators for H1 2021 | Indicator | Jan-Jun 2021 | Jan-Jun 2020 | YoY Change | | :--- | :--- | :--- | :--- | | **Operating Revenue (RMB)** | 573,007,067.30 | 487,253,473.33 | 17.60% | | **Net Profit Attributable to Shareholders (RMB)** | 34,445,168.90 | 17,075,548.93 | 101.72% | | **Net Cash Flow from Operating Activities (RMB)** | 66,004,332.51 | 46,602,751.59 | 41.63% | | **Basic EPS (RMB/share)** | 0.0436 | 0.0216 | 101.85% | | **Weighted Average ROE** | 2.53% | 1.30% | Increase by 1.23 percentage points | Key Period-End Asset Indicators | Indicator | June 30, 2021 | Dec 31, 2020 | Change | | :--- | :--- | :--- | :--- | | **Total Assets (RMB)** | 2,020,572,528.10 | 1,976,246,329.85 | 2.24% | | **Net Assets Attributable to Shareholders (RMB)** | 1,377,126,129.24 | 1,342,680,960.34 | 2.57% | [Unaudited Interim Financial Statements](index=7&type=section&id=Unaudited%20Interim%20Financial%20Statements) This section presents the company's unaudited interim financial statements, detailing its financial position, performance, and cash flows [Consolidated Balance Sheet](index=7&type=section&id=Consolidated%20Balance%20Sheet) As of June 30, 2021, total assets grew **2.24%** to **RMB 2.021 billion**, and parent company owners' equity increased **2.57%** to **RMB 1.377 billion** Key Items from Consolidated Balance Sheet | Item | June 30, 2021 (RMB) | Dec 31, 2020 (RMB) | | :--- | :--- | :--- | | **Total Assets** | 2,020,572,528.10 | 1,976,246,329.85 | | **Total Liabilities** | 658,812,507.33 | 647,007,133.92 | | **Total Owners' Equity Attributable to Parent Company** | 1,377,126,129.24 | 1,342,680,960.34 | | **Total Owners' Equity** | 1,361,760,020.77 | 1,329,239,195.93 | [Parent Company Balance Sheet](index=9&type=section&id=Parent%20Company%20Balance%20Sheet) As of June 30, 2021, the parent company's total assets slightly decreased, while owners' equity showed a modest increase Key Items from Parent Company Balance Sheet | Item | June 30, 2021 (RMB) | Dec 31, 2020 (RMB) | | :--- | :--- | :--- | | **Total Assets** | 1,258,043,479.19 | 1,261,487,102.50 | | **Total Liabilities** | 164,888,186.66 | 174,970,488.14 | | **Total Owners' Equity** | 1,093,155,292.53 | 1,086,516,614.36 | [Consolidated Income Statement](index=10&type=section&id=Consolidated%20Income%20Statement) In H1 2021, the company achieved **17.60%** revenue growth and **101.72%** net profit increase, significantly enhancing profitability Key Items from Consolidated Income Statement | Item | Jan-Jun 2021 (RMB) | Jan-Jun 2020 (RMB) | | :--- | :--- | :--- | | **Total Operating Revenue** | 573,007,067.30 | 487,253,473.33 | | **Operating Profit** | 33,701,960.72 | 12,095,177.83 | | **Total Profit** | 33,716,807.39 | 12,084,734.15 | | **Net Profit Attributable to Parent Company Owners** | 34,445,168.90 | 17,075,548.93 | | **Basic EPS** | 0.0436 | 0.0216 | [Parent Company Income Statement](index=11&type=section&id=Parent%20Company%20Income%20Statement) The parent company turned profitable in H1 2021, reporting a net profit of **RMB 6.64 million** and significant revenue growth Key Items from Parent Company Income Statement | Item | Jan-Jun 2021 (RMB) | Jan-Jun 2020 (RMB) | | :--- | :--- | :--- | | **Operating Revenue** | 73,838,416.29 | 27,624,187.73 | | **Operating Profit** | 6,482,569.10 | -7,119,458.36 | | **Net Profit** | 6,638,678.17 | -7,120,958.29 | [Consolidated Cash Flow Statement](index=12&type=section&id=Consolidated%20Cash%20Flow%20Statement) Net cash flow from operating activities increased **41.63%**, but significant investing outflows led to a net decrease in cash and cash equivalents Consolidated Cash Flow Statement Summary | Item | Jan-Jun 2021 (RMB) | Jan-Jun 2020 (RMB) | | :--- | :--- | :--- | | **Net Cash Flow from Operating Activities** | 66,004,332.51 | 46,602,751.59 | | **Net Cash Flow from Investing Activities** | -98,812,820.97 | 17,026,066.48 | | **Net Cash Flow from Financing Activities** | 4,359,556.00 | -19,942,394.24 | | **Net Increase in Cash and Cash Equivalents** | -28,653,836.58 | 43,999,992.69 | [Parent Company Cash Flow Statement](index=13&type=section&id=Parent%20Company%20Cash%20Flow%20Statement) Parent company operating cash flow turned negative, resulting in a net decrease of **RMB 1.67 million** in cash and cash equivalents Parent Company Cash Flow Statement Summary | Item | Jan-Jun 2021 (RMB) | Jan-Jun 2020 (RMB) | | :--- | :--- | :--- | | **Net Cash Flow from Operating Activities** | -12,011,304.53 | 52,605,020.12 | | **Net Cash Flow from Investing Activities** | 2,425,551.24 | 34,279,263.14 | | **Net Cash Flow from Financing Activities** | 7,918,988.78 | -22,439,533.54 | | **Net Increase in Cash and Cash Equivalents** | -1,666,764.51 | 64,442,778.26 | [Consolidated Statement of Changes in Owners' Equity](index=14&type=section&id=Consolidated%20Statement%20of%20Changes%20in%20Owners'%20Equity) The increase in owners' equity attributable to the parent company primarily resulted from the period's total comprehensive income - The change in owners' equity attributable to the parent company for the current period was primarily driven by the total comprehensive income (net profit), amounting to **RMB 34,445,168.90**[45](index=45&type=chunk) [Parent Company Statement of Changes in Owners' Equity](index=15&type=section&id=Parent%20Company%20Statement%20of%20Changes%20in%20Owners'%20Equity) The increase in parent company owners' equity was driven by the current period's net profit and total comprehensive income - The increase in parent company owners' equity for the current period, amounting to **RMB 6,638,678.17**, entirely resulted from the total comprehensive income for the period[47](index=47&type=chunk) [Notes to Financial Statements](index=16&type=section&id=Notes%20to%20Financial%20Statements) This section provides detailed explanations, accounting policies, and disclosures supporting the financial statements [Company Overview and Basis of Financial Statement Preparation](index=16&type=section&id=Company%20Overview%20and%20Basis%20of%20Financial%20Statement%20Preparation) This section outlines the company's core business as an automotive parts manufacturer and the basis for its financial statement preparation - The company's main business involves the research, development, production, and sales of **automotive steering gears and components**, falling within the automotive parts manufacturing industry[49](index=49&type=chunk) - The scope of consolidated financial statements for the current period includes Hangzhou Shibao Automotive Steering Gear Co Ltd and **six other subsidiaries**[50](index=50&type=chunk) [Significant Accounting Policies and Estimates](index=16&type=section&id=Significant%20Accounting%20Policies%20and%20Estimates) This section details the company's significant accounting policies and estimates, covering financial instruments, inventories, fixed assets, and revenue recognition - The company applies an **expected credit loss model** for impairment of financial assets and assesses expected credit risk for different types of receivables using a portfolio approach[88](index=88&type=chunk)[93](index=93&type=chunk)[98](index=98&type=chunk) - Revenue is recognized when the customer obtains control of the related goods or services, with domestic sales recognized upon customer acceptance and export sales upon customs declaration and bill of lading acquisition[159](index=159&type=chunk)[162](index=162&type=chunk) [Taxation](index=41&type=section&id=Taxation) The company and its high-tech subsidiaries benefit from a **15%** preferential corporate income tax rate, with a primary VAT rate of **13%** - The company's headquarters and subsidiaries including Hangzhou Shibao, Hangzhou New Shibao, Beijing Autonick, and Wuhu Sterry are recognized as high-tech enterprises, enjoying a reduced **15% corporate income tax rate** for 2020-2022[204](index=204&type=chunk)[206](index=206&type=chunk) [Notes to Consolidated Financial Statement Items](index=42&type=section&id=Notes%20to%20Consolidated%20Financial%20Statement%20Items) This section provides detailed explanations for consolidated financial statement items, including assets, liabilities, profit/loss, and cash flow - Period-end accounts receivable book value increased to **RMB 352 million** from **RMB 326 million** at the beginning of the period, with receivables from the top five customers accounting for **43.44%** of the total[218](index=218&type=chunk)[230](index=230&type=chunk) - Period-end inventory book value increased **20%** to **RMB 305 million** from **RMB 254 million** at the beginning of the period, primarily due to increases in work-in-progress and finished goods[254](index=254&type=chunk) - Current period operating revenue was **RMB 573 million**, with primary business revenue of **RMB 551 million**, mainly from the sales of **steering systems and components**[320](index=320&type=chunk) [Management Discussion and Analysis](index=99&type=section&id=Management%20Discussion%20and%20Analysis) This section provides an overview and analysis of the company's operational performance, financial position, and future outlook [Analysis of Principal Business](index=99&type=section&id=Analysis%20of%20Principal%20Business) The company's principal business experienced significant revenue and net profit growth in H1 2021, driven by automotive industry expansion - During the reporting period, the automotive industry experienced rapid growth, driving the company's operating revenue to **RMB 573 million**, a **17.60% year-on-year increase**[479](index=479&type=chunk) - Gross profit margin for principal business increased from **20.87%** to **22.98%**, primarily due to cost optimization from expanded sales volume[479](index=479&type=chunk) - R&D expenses increased **23.89%** year-on-year to **RMB 37.41 million**, representing **6.53%** of revenue, primarily invested in electrification, intelligence, and automation technologies for steering systems[480](index=480&type=chunk) [Analysis of Assets and Liabilities](index=101&type=section&id=Analysis%20of%20Assets%20and%20Liabilities) The company's asset and liability structure remained stable at period-end, with a robust capital structure and low financial risk - As of period-end, fixed assets constituted **31.04%** of total assets, accounts receivable **17.41%**, and inventories **15.09%**, representing the main components of assets[490](index=490&type=chunk) - The company monitors capital risk using the capital gearing ratio (net debt/total capital), which was **-0.18%** at period-end, a slight increase from **-2.95%** at the beginning of the year but still negative, indicating ample cash and low capital risk[494](index=494&type=chunk)[414](index=414&type=chunk) [Future Outlook and Risks](index=102&type=section&id=Future%20Outlook%20and%20Risks) The company anticipates a challenging future operating environment, focusing on strategic development while managing key risks including supply chain and market factors - Future Outlook: The company anticipates cost pressures from **chip shortages** and **rising raw material prices** in the second half of the year, focusing on its principal business and accelerating the development of steering technologies related to **intelligent and autonomous driving**[499](index=499&type=chunk) - Key Risks: The company faces risks including **industry fluctuations** due to macroeconomic conditions, **product quality risks**, **technological updates and iterations**, **raw material price volatility**, **high accounts receivable**, and **uncertainties in overseas market expansion**[503](index=503&type=chunk)[504](index=504&type=chunk)[505](index=505&type=chunk)[507](index=507&type=chunk)[509](index=509&type=chunk) [Analysis of Core Competencies](index=105&type=section&id=Analysis%20of%20Core%20Competencies) The company's core competencies include strong technological R&D, advanced manufacturing, an experienced team, and high-level corporate governance - Technology R&D: Possesses numerous patents in steering technology and has taken a leading role in developing **automotive intelligent driving-related technologies**[516](index=516&type=chunk) - Production and Manufacturing: Fully implements **lean production models** and the **IAIF:16949 quality certification system**[516](index=516&type=chunk) [Corporate Governance and Other Information](index=108&type=section&id=Corporate%20Governance%20and%20Other%20Information) This section details the company's corporate governance practices, shareholding structures, and other relevant disclosures [Corporate Governance](index=108&type=section&id=Corporate%20Governance) The company largely complied with the Corporate Governance Code, with noted deviations including director insurance and share trading during blackout periods - The company deviated from Corporate Governance Code provisions **A.1.8** (no insurance for directors) and **A.6.7** (an independent non-executive director's absence from the AGM)[528](index=528&type=chunk) - Non-executive Director Mr. Zhang Shizhong conducted A-share transactions during blackout periods in February and August 2021, violating Model Code provisions **A.3(a)** and **B.8**[530](index=530&type=chunk) [Shareholding of Directors, Supervisors, and Major Shareholders](index=110&type=section&id=Shareholding%20of%20Directors%2C%20Supervisors%2C%20and%20Major%20Shareholders) As of June 30, 2021, the controlling shareholder held **43.28%** of shares, with directors also holding indirect interests - Controlling shareholder Zhejiang Shibao Holding Group Co Ltd (Shibao Holding) holds **341,786,098 A-shares**, representing **43.28%** of the total share capital[539](index=539&type=chunk)[543](index=543&type=chunk) - Directors Zhang Shiquan, Zhang Baoyi, Tang Haohan, Zhang Lanjun, and Zhang Shizhong collectively hold **100%** equity in the holding company, Shibao Holding[539](index=539&type=chunk) [Glossary](index=112&type=section&id=Glossary) This section provides definitions for specific terms used throughout the report to enhance reader comprehension - This section provides definitions for specific terms used in the report, such as **'A-shares'**, **'H-shares'**, **'the Group'**, and **'Shibao Holding'**, to aid reader understanding[547](index=547&type=chunk)[550](index=550&type=chunk)

Financial Performance - The company reported a significant increase in revenue for the first half of 2021, with total revenue reaching RMB 1.2 billion, representing a year-on-year growth of 15%[11]. - The company's operating revenue reached RMB 573,007,067.30, an increase of 17.60% compared to the same period last year[41]. - Net profit attributable to shareholders was RMB 34,445,168.90, representing a significant increase of 101.72% year-on-year[43]. - The company's total profit for the first half of 2021 was ¥33,716,807.39, a substantial increase from ¥12,084,734.15 in the first half of 2020, reflecting strong operational performance[132]. - Basic and diluted earnings per share improved to ¥0.0436, compared to ¥0.0216 in the same period last year, reflecting a 102.8% increase[132]. Cost and Profitability - The gross profit margin for the first half of 2021 was 25%, a slight decrease from 27% in the same period last year, primarily due to rising raw material costs[11]. - The gross profit margin for the main business improved to 22.98%, up from 20.87% in the previous year, driven by optimized costs from expanded sales[41]. - The gross profit margin for the automotive parts and components manufacturing segment improved to 22.98%, up by 2.11% compared to the previous year[46]. - The company faces risks related to raw material price fluctuations, which could impact production costs and profit margins[13]. Research and Development - Future outlook indicates a focus on enhancing R&D capabilities, with an investment of RMB 100 million planned for new product development in electric steering systems[11]. - Research and development expenses amounted to RMB 37,409,365.24, a 23.89% increase, accounting for 6.53% of operating revenue[42]. - The company plans to continue focusing on the development of electric, intelligent, and automated steering technologies to maintain its competitive edge[42]. - The company has launched an electric power steering system that operates independently of the engine, significantly reducing fuel consumption and environmental pollution[78]. Market Expansion - The company aims to increase its market share in overseas markets, targeting a 30% growth in international sales by the end of 2022[11]. - Revenue from regions outside mainland China surged by 141.01% to ¥82,197,649.29, while revenue from mainland China increased by 8.31% to ¥490,809,418.01[46]. - The company has expanded its user base, with a 20% increase in the number of clients in the automotive sector compared to the previous year[11]. Financial Position - Total assets increased by 2.24% to RMB 2,020,572,528.10 compared to the end of the previous year[41]. - Cash and cash equivalents at the end of the reporting period amounted to ¥139,200,815.18, a decrease of 1.53% from ¥166,389,726.85 at the beginning of the period[49]. - Accounts receivable at the end of the reporting period accounted for 45% of total revenue, indicating a high level of credit risk[14]. - The company's total liabilities rose to CNY 658,812,507.33 from CNY 647,007,133.92, marking an increase of about 1.3%[124]. Corporate Governance - The controlling shareholder, Zhejiang Shibao Holding Group, has committed not to transfer or entrust the management of its shares for 36 months from the date of the A-share listing, with a maximum of 25% transfer allowed annually thereafter[88]. - There were no non-operating fund occupations by the controlling shareholder or its affiliates during the reporting period[89]. - The company has not experienced any changes in its controlling shareholder or actual controller during the reporting period[115][116]. Compliance and Risk Management - The company emphasizes the importance of maintaining product quality to mitigate risks associated with recalls and brand reputation[9]. - The company has established a unique supplier management system to maintain product quality consistency through a three-tier supplier admission certification mechanism[79]. - The company has achieved OHSAS 18001 and ISO 45001 certifications for occupational health and safety management systems in its subsidiaries[83]. Investment and Financing - The company has invested 14 million yuan in bank financial products, with an outstanding balance of 8 million yuan[107]. - The company reported a net cash outflow from investing activities of ¥98,812,820.97, compared to a net inflow of ¥17,026,066.48 in the same period last year, indicating increased investment activities[139]. - Cash flow from financing activities generated a net inflow of CNY 7,918,988.78, compared to a net outflow of CNY -22,439,533.54 in the first half of 2020[143]. Employee and Operational Management - The total number of employees at the end of the reporting period was 1,651, with competitive compensation and benefits provided[62]. - The company invests in employee training and development to ensure personnel reserves meet operational needs[84]. Accounting and Financial Reporting - The financial statements comply with the requirements of the enterprise accounting standards, accurately reflecting the company's financial position and operating results[158]. - The company utilizes RMB as its functional currency for accounting purposes[161]. - The company has established specific accounting policies for financial instrument impairment, fixed asset depreciation, and revenue recognition[158].