Financial Performance - Operating revenue for the reporting period was ¥9,055,210.82, representing a year-on-year increase of 27.00%[8]. - Net profit attributable to shareholders was -¥56,456,727.84, a decrease of 44.58% compared to the same period last year[8]. - Basic earnings per share were -¥0.28, down 40.00% year-on-year[8]. - The net loss for the quarter was CNY 56,826,359.75, worsening from a net loss of CNY 39,048,050.92 in the same period last year[44]. - The net profit for the current period is ¥24,853,217.85, down 23.93% from ¥32,648,392.14 in the previous period[60]. - The total operating profit for the current period is -56,082,137.00, compared to -51,970,777.09 in the previous period, indicating continued operational challenges[49]. - The total comprehensive income for the current period is 24,539,786.12, down from 30,226,364.05 in the previous period[56]. Cash Flow and Liquidity - The net cash flow from operating activities was ¥158,710,249.58, a decrease of 3.93% compared to the previous year[8]. - The net cash flow from operating activities is -¥176,383,360.31, worsening from -¥44,043,898.03 in the previous period[65]. - The total cash and cash equivalents at the end of the period were 146,789,485.71 yuan, down from 331,732,044.63 yuan, indicating a significant decrease in liquidity[70]. - The company reported a decrease in cash flow from operating activities, indicating potential liquidity challenges[44]. - The company incurred cash outflows of 958,991,921.17 yuan for operating activities, up from 625,608,918.53 yuan, reflecting increased operational expenses[69]. Assets and Liabilities - Total assets at the end of the reporting period reached ¥2,072,400,451.72, an increase of 2.86% compared to the end of the previous year[8]. - The total liabilities increased to ¥1,456,476,315.24 from ¥1,378,725,547.46, reflecting an increase of approximately 5.6%[36]. - The company's total assets decreased to CNY 1,722,027,487.98 from CNY 2,009,743,654.42[40]. - Total liabilities were reported at CNY 1,202,727,883.95, down from CNY 1,500,407,201.68[40]. - The company's total equity increased slightly to CNY 519,299,604.03 from CNY 509,336,452.74[40]. - Total equity attributable to shareholders reached CNY 636,126,644.42, with retained earnings of CNY 231,326,182.23[75]. Investments and Acquisitions - The company acquired two subsidiaries during the reporting period, resulting in a gain of ¥8,750,381.51 from the difference between investment cost and fair value of identifiable net assets[10]. - The company plans to acquire an additional 65% stake in Mianxi He Ran and 44.5% in Mianxi Fu Long for a total cash consideration of RMB 15,666.97 million[22]. - The company completed the acquisition of 35% and 50.5% stakes in Mianxi He Ran and Mianxi Fu Long, respectively, through a debt settlement arrangement[20]. - Long-term equity investments reached RMB 69,144,760.00, marking a 100% increase due to the acquisition of a stake in Beijing Bowen Hanxiang Technology Training Co., Ltd.[17]. Financial Management and Expenses - The company reported a 38.37% increase in financial expenses to RMB 32,517,413.93, primarily due to increased interest expenses from asset-backed securities[19]. - Financial expenses rose to 12,494,377.27 from 10,004,436.69, primarily driven by interest expenses which increased to 12,139,876.61 from 10,113,871.60[49]. - The company reported a significant increase in short-term borrowings, rising to CNY 483,569,243.22 from CNY 375,035,586.30[40]. - The company reported a significant increase in fixed assets, which rose to ¥701,908,561.08 from ¥404,725,161.27, marking an increase of approximately 73%[35]. Shareholder Information - The total number of shareholders at the end of the reporting period was 17,921[13]. - The top shareholder, Zhao Yibo, holds 27.93% of the shares, with 42,949,009 shares pledged[13].

Section I Important Notes, Table of Contents, and Definitions This section provides crucial disclaimers, the full table of contents, and definitions of key terms used throughout the report for clarity [Important Notes](index=2&type=section&id=Important%20Notes) The Board of Directors, Supervisory Board, and senior management guarantee the report's accuracy, highlighting operational risks and stating no plans for cash dividends or bonus shares - The company's Board of Directors, Supervisory Board, and senior management guarantee the truthfulness, accuracy, and completeness of the semi-annual report, free from false records, misleading statements, or major omissions, and assume legal responsibility[3](index=3&type=chunk) - All directors attended the Board of Directors meeting to review this report[4](index=4&type=chunk) - The company plans not to distribute cash dividends, bonus shares, or convert capital reserves into share capital[5](index=5&type=chunk) [Table of Contents](index=3&type=section&id=Table%20of%20Contents) This section lists the report's complete table of contents, covering twelve main chapters from important notes to financial reports, providing an overall structural overview for investors - The report's table of contents includes twelve main chapters, covering comprehensive information on company operations, finance, governance, and significant matters[8](index=8&type=chunk) [Definitions](index=4&type=section&id=Definitions) This section defines common terms used in the report, including company abbreviations, controlling shareholders, major subsidiaries, regulatory bodies, currency units, and core businesses, ensuring clear understanding of the report's content - Key terms such as "the Company", "Huatong Heat", "Controlling Shareholder", and "Huatong Xingyuan" are clearly defined in the report[10](index=10&type=chunk) - "Heating" is defined as a social service providing heat for production and daily life, while "Reporting Period" refers to January 1, 2020, to June 30, 2020[10](index=10&type=chunk) Section II Company Profile and Key Financial Indicators This section introduces the company's basic information, contact details, and presents key accounting data and financial indicators for the reporting period [Company Profile](index=5&type=section&id=Company%20Profile) Beijing Huayuan Yitong Heat Technology Co Ltd (stock abbreviation: Huatong Heat, stock code: 002893) is listed on the Shenzhen Stock Exchange, with Li He as its legal representative - The company's stock abbreviation is "Huatong Heat", stock code "002893", listed on the Shenzhen Stock Exchange[12](index=12&type=chunk) - The company's legal representative is Li He[12](index=12&type=chunk) [Contact Person and Information](index=5&type=section&id=Contact%20Person%20and%20Information) Xie Lingyu serves as the Board Secretary and Zhao Jingfeng as the Securities Affairs Representative, both located at 5th Floor, Building 4, Zone 3, No 186 South Fourth Ring West Road, Fengtai District, Beijing, with contact details including phone, fax, and email provided - Xie Lingyu is the Board Secretary, and Zhao Jingfeng is the Securities Affairs Representative[13](index=13&type=chunk) - The company's contact address is 5th Floor, Building 4, Zone 3, No 186 South Fourth Ring West Road, Fengtai District, Beijing[13](index=13&type=chunk) [Other Information](index=5&type=section&id=Other%20Information) During the reporting period, there were no changes to the company's registered address, office address, website, email, or information disclosure newspaper and designated website, remaining consistent with the 2019 annual report - The company's registered address, office address, website, and email remained unchanged during the reporting period[14](index=14&type=chunk) - The information disclosure newspaper and designated website remained unchanged during the reporting period[15](index=15&type=chunk) [Key Accounting Data and Financial Indicators](index=6&type=section&id=Key%20Accounting%20Data%20and%20Financial%20Indicators) In the first half of 2020, the company's operating revenue increased by 3.06% to **587 million Yuan**, and net profit attributable to shareholders increased by 18.24% to **83.36 million Yuan**, while net cash flow from operating activities decreased by 60.14% due to subsidiary acquisitions and intercompany payments, with basic and diluted earnings per share both increasing by 20.59% 2020 Semi-Annual Key Accounting Data and Financial Indicators | Indicator | Current Reporting Period (Yuan) | Prior Year Period (Yuan) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Operating Revenue | 586,999,322.55 | 569,585,296.12 | 3.06% | | Net Profit Attributable to Listed Company Shareholders | 83,360,131.01 | 70,498,858.19 | 18.24% | | Net Profit Attributable to Listed Company Shareholders (Excluding Non-recurring Gains and Losses) | 81,882,573.18 | 67,304,027.05 | 21.66% | | Net Cash Flow from Operating Activities | -335,093,609.89 | -209,249,494.06 | -60.14% | | Basic Earnings Per Share (Yuan/share) | 0.41 | 0.341 | 20.59% | | Diluted Earnings Per Share (Yuan/share) | 0.41 | 0.34 | 20.59% | | Weighted Average Return on Net Assets | 12.73% | 11.05% | 1.68% | | Total Assets (Period-end) | 1,877,437,424.63 | 2,014,852,191.88 | -6.82% | | Net Assets Attributable to Listed Company Shareholders (Period-end) | 669,118,378.45 | 636,126,644.42 | 5.19% | - Net cash flow from operating activities decreased by **60.14%** year-on-year, primarily due to changes in the consolidation scope from the acquisition of Qianxi Fulong and Qianxi Heran, and the payment of intercompany balances with former related parties during the reporting period[16](index=16&type=chunk) [Differences in Accounting Data under Domestic and International Accounting Standards](index=6&type=section&id=Differences%20in%20Accounting%20Data%20under%20Domestic%20and%20International%20Accounting%20Standards) During the reporting period, the company reported no differences in net profit and net assets between financial statements prepared under International Accounting Standards or foreign accounting standards and those prepared under Chinese Accounting Standards - During the reporting period, the company reported no differences in net profit and net assets between financial statements disclosed under International Accounting Standards and those under Chinese Accounting Standards[17](index=17&type=chunk) - During the reporting period, the company reported no differences in net profit and net assets between financial statements disclosed under foreign accounting standards and those under Chinese Accounting Standards[18](index=18&type=chunk) [Non-recurring Gains and Losses and Amounts](index=6&type=section&id=Non-recurring%20Gains%20and%20Losses%20and%20Amounts) The company's non-recurring gains and losses totaled **1.4776 million Yuan** during the reporting period, primarily comprising non-current asset disposal gains/losses, government grants, and other non-operating income/expenses, with non-current asset disposal being negative and government grants positive 2020 Semi-Annual Non-recurring Gains and Losses and Amounts | Item | Amount (Yuan) | Explanation | | :--- | :--- | :--- | | Non-current asset disposal gains and losses | -682,696.80 | Disposal of scrapped, unusable fixed assets | | Government grants recognized in current profit or loss | 285,000.00 | | | Other non-operating income and expenses apart from the above | 22,690.86 | | | Other profit and loss items meeting the definition of non-recurring gains and losses | 2,114,169.04 | | | Less: Income tax impact | 261,905.27 | | | Minority interest impact (after tax) | -300.00 | | | Total | 1,477,557.83 | -- | - During the reporting period, the company did not classify any non-recurring gains and losses as recurring gains and losses[21](index=21&type=chunk) Section III Business Overview This section outlines the company's main businesses, significant changes in major assets, and an analysis of its core competitiveness [Company's Main Businesses During the Reporting Period](index=8&type=section&id=Company%27s%20Main%20Businesses%20During%20the%20Reporting%20Period) The company's main businesses are heat supply and energy-saving technology services, focusing on R&D, investment, and renovation in energy-saving heating, positioning itself as a specialized energy service provider and a pioneer in urban community "heating investment and operation" models, actively exploring other business areas and participating in industry standard setting - The company's main businesses are heat supply (providing heating and domestic hot water) and energy-saving technology services (renovating heating facilities, improving flue gas desulfurization and denitrification systems, etc)[24](index=24&type=chunk) - Adhering to the philosophy of "focusing on energy saving, green heating", the company is committed to energy-saving technology R&D, investment, and renovation, and has been recognized as a Beijing municipal-level enterprise technology center[24](index=24&type=chunk) - The company is a pioneer in the urban community "heating investment and operation" model and one of the first heating enterprises in Beijing to implement energy performance contracting services, participating in the formulation of multiple national and Beijing municipal industry standards[24](index=24&type=chunk) [Significant Changes in Major Assets](index=8&type=section&id=Significant%20Changes%20in%20Major%20Assets) During the reporting period, the company's major assets underwent significant changes, with fixed assets, intangible assets, construction in progress, and goodwill substantially increasing due to the acquisition of Qianxi Fulong and Qianxi Heran, while monetary funds, other receivables, and inventories decreased Significant Changes in Major Assets | Major Asset | Explanation of Significant Change | | :--- | :--- | | Fixed Assets | Increased by **77.74%** at period-end compared to period-start, mainly due to the acquisition of Qianxi Fulong and Qianxi Heran during the reporting period, resulting in a change in the consolidation scope | | Intangible Assets | Increased by **1,248.06%** at period-end compared to period-start, mainly due to the acquisition of Qianxi Fulong and Qianxi Heran during the reporting period, recognizing franchise contract rights as an intangible asset | | Construction in Progress | Increased by **377.15%** at period-end compared to period-start, mainly due to the acquisition of Qianxi Fulong and Qianxi Heran during the reporting period, resulting in a change in the consolidation scope | | Monetary Funds | Decreased by **86.11%** at period-end compared to period-start, mainly because most property owners pay heating fees before the heating season, leading to higher monetary funds at the beginning of the period | | Other Receivables | Decreased by **67.91%** at period-end compared to period-start, mainly because during the reporting period, the company adjusted the performance earnest money paid for Heran Limited equity acquisition to long-term equity investment accounting through litigation | | Inventories | Decreased by **58.08%** at period-end compared to period-start, mainly due to the company strengthening internal control and precise management of retained natural gas | | Goodwill | Increased by **4,792.23%** at period-end compared to period-start, mainly due to the acquisition of Qianxi Fulong and Qianxi Heran during the reporting period, recognizing the difference between investment consideration and the fair value share of identifiable net assets as goodwill at the consolidated level | | Other Non-current Assets | Increased by **120.38%** at period-end compared to period-start, mainly due to an increase in prepaid engineering costs | [Core Competitiveness Analysis](index=9&type=section&id=Core%20Competitiveness%20Analysis) The company's core competitiveness lies in its extensive intangible asset portfolio, including **19 registered trademarks**, **61 patents**, and **44 software copyrights**, alongside various heating operation qualifications, safety production certifications, energy service registrations, high-tech enterprise certifications, engineering construction qualifications, and franchise rights, forming comprehensive technical and market barriers - The company and its controlled subsidiaries collectively own **19 registered trademarks** across multiple categories (e.g., 37, 38, 39, 40, 42), with exclusive rights valid until 2023-2030[27](index=27&type=chunk)[28](index=28&type=chunk) - The company and its subsidiaries collectively hold **61 patents**, including invention patents and utility model patents, covering various technical fields such as ground source heat pumps, heating network control, and boiler energy saving, all of which are maintained[28](index=28&type=chunk)[29](index=29&type=chunk)[30](index=30&type=chunk)[31](index=31&type=chunk) - The company and its controlled subsidiaries collectively possess **44 software copyrights**, involving boiler linkage control, climate compensation monitoring, remote meter reading, indoor temperature monitoring, and energy management systems, all originally acquired[32](index=32&type=chunk)[33](index=33&type=chunk)[34](index=34&type=chunk) - The company holds heating operation qualifications and licenses in Beijing, Heilongjiang Province, and Hebei Province, along with multiple safety production standardization certificates and construction safety production licenses[34](index=34&type=chunk)[35](index=35&type=chunk) - The company and its subsidiaries Huatong Xingyuan, Huatong Limited, and Huayi Longda are all listed in the National Development and Reform Commission and Ministry of Finance's registered energy service companies list[36](index=36&type=chunk) - Huatong Xingyuan, Huayi Longda, and Huatong Heat have all obtained high-tech enterprise certificates, valid until 2021-2022, enjoying tax incentives[36](index=36&type=chunk)[37](index=37&type=chunk) - The company holds exclusive central heating franchise rights in Pinggu District, Beijing, and Qianxi County, Tangshan City, valid until 2039-2043[37](index=37&type=chunk)[38](index=38&type=chunk)[39](index=39&type=chunk) - The company has obtained quality management, environmental management, occupational health and safety management, and energy management system certification certificates[40](index=40&type=chunk) Section IV Management Discussion and Analysis This section provides an overview of the company's operations, a detailed analysis of its main and non-main businesses, asset and liability status, investment activities, and the risks faced along with corresponding countermeasures [Overview](index=18&type=section&id=Overview) In the first half of 2020, the company actively responded to the pandemic challenges, maintaining a strategy of both organic and inorganic growth, achieving stable operating performance with **587 million Yuan** in operating revenue (up 3.06%) and **83.36 million Yuan** in net profit attributable to shareholders (up 18.24%), while continuously advancing smart heating, focusing on R&D, expanding business through capital operations, and optimizing internal management and employee training - In the first half of 2020, the company achieved operating revenue of **586.9993 million Yuan**, operating profit of **92.4158 million Yuan**, and total profit of **92.0408 million Yuan**, largely consistent with the prior year period[43](index=43&type=chunk) - Net profit attributable to listed company shareholders was **83.3601 million Yuan**, an increase of **18.24%** compared to the prior year period[43](index=43&type=chunk) - The company achieved good results in energy saving, consumption reduction, and heat efficiency improvement through information system upgrades and technological innovation, maintaining stable main business operations[44](index=44&type=chunk) - As of the end of the reporting period, the company had obtained **19 trademarks**, **61 patents**, and **44 software copyrights**, continuously strengthening technical innovation and R&D collaboration with universities[45](index=45&type=chunk) - The company actively explored a second growth track by acquiring heating service businesses and franchise rights in Qianxi County, Tangshan City, Hebei Province, and a portion of equity in Beijing Bowen Hanxiang Technology Training Co Ltd[46](index=46&type=chunk) - The company continuously optimized internal management, improved comprehensive budgeting, strengthened expense control, and implemented regular employee training to enhance overall quality and brand image[47](index=47&type=chunk) [Main Business Analysis](index=18&type=section&id=Main%20Business%20Analysis) The company's main business is heat production and supply, with operating revenue increasing by **3.06%** in the first half of 2020, primarily driven by heating services and energy-saving technology services, while financial expenses rose by **45.86%** due to ABS issuance and interest, and income tax expenses decreased by **53.68%** due to high-tech enterprise preferential tax rates, and net cash flow from operating activities significantly declined by **60.14%** due to subsidiary acquisitions and intercompany payments Year-on-Year Changes in Key Financial Data | Indicator | Current Reporting Period (Yuan) | Prior Year Period (Yuan) | Year-on-Year Change | Reason for Change | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue | 586,999,322.55 | 569,585,296.12 | 3.06% | | | Operating Cost | 453,765,267.93 | 431,740,042.98 | 5.10% | | | Selling Expenses | 2,480,933.09 | 3,064,656.24 | -19.05% | | | Administrative Expenses | 33,253,203.57 | 38,478,937.50 | -13.58% | | | Financial Expenses | 19,669,425.53 | 13,485,247.14 | 45.86% | The company issued new long-term borrowings from ABS at the end of April 2019, leading to an increase in interest during the current reporting period | | Income Tax Expenses | 10,674,694.57 | 23,047,836.63 | -53.68% | The company obtained a national high-tech enterprise certificate in October 2019, applying a preferential tax rate for corporate income tax | | R&D Investment | 24,715,119.49 | 25,171,123.47 | -1.81% | | | Net Cash Flow from Operating Activities | -335,093,609.89 | -209,249,494.06 | -60.14% | Acquisition of Qianxi Fulong and Qianxi Heran during the reporting period changed the consolidation scope, and payments were made for intercompany balances with former related parties of Qianxi Fulong and Qianxi Heran | | Net Cash Flow from Financing Activities | 37,765,134.42 | 73,164,854.31 | -48.38% | Mainly due to the company's ABS issuance at the end of April 2019 | Operating Revenue Composition | Item | Current Reporting Period Amount (Yuan) | Proportion of Operating Revenue | Prior Year Period Amount (Yuan) | Proportion of Operating Revenue | Year-on-Year Change | | :--- | :--- | :--- | :--- | :--- | :--- | | Total Operating Revenue | 586,999,322.55 | 100% | 569,585,296.12 | 100% | 3.06% | | **By Industry** | | | | | | | Heat Production and Supply | 586,999,322.55 | 100.00% | 569,585,296.12 | 100.00% | 3.06% | | **By Product** | | | | | | | Heating Services | 575,541,685.67 | 98.05% | 559,375,608.60 | 98.21% | 2.89% | | Energy-saving Technology Services | 11,457,636.88 | 1.95% | 10,209,687.52 | 1.79% | 12.22% | | **By Region** | | | | | | | North China | 580,937,140.32 | 98.97% | 564,146,351.34 | 99.05% | 2.98% | | Northeast China | 6,062,182.23 | 1.03% | 5,438,944.78 | 0.95% | 11.46% | - The gross profit margin for heat production and supply business was **22.70%**, a year-on-year decrease of **1.50%**[54](index=54&type=chunk) [Non-Main Business Analysis](index=20&type=section&id=Non-Main%20Business%20Analysis) During the reporting period, the company had no non-main business analysis content [Analysis of Assets and Liabilities](index=20&type=section&id=Analysis%20of%20Assets%20and%20Liabilities) At the end of the reporting period, the company's total assets decreased by **6.82%** year-on-year, while net assets attributable to shareholders increased by **5.19%**, with fixed assets, construction in progress, intangible assets, and goodwill significantly rising due to subsidiary acquisitions, and monetary funds and long-term borrowings fluctuating due to increased operating borrowings and ABS loan repayments Significant Changes in Asset Composition | Item | Amount at Current Period-end (Yuan) | Proportion of Total Assets | Amount at Prior Year Period-end (Yuan) | Proportion of Total Assets | Change in Proportion | Explanation of Significant Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Monetary Funds | 90,098,052.40 | 4.80% | 137,492,638.80 | 8.70% | -3.90% | Mainly due to financing from the issuance of "Shouchuang-Huatong Heat Residential Heating Fee Receivable Asset-Backed Special Plan" at the end of the prior year period, resulting in higher monetary funds at that time | | Fixed Assets | 719,341,008.51 | 38.32% | 385,610,588.88 | 24.39% | 13.93% | Mainly due to the acquisition of Qianxi Fulong Company during the reporting period, changing the consolidation scope and increasing fixed assets | | Construction in Progress | 92,955,124.14 | 4.95% | 38,479,156.68 | 2.43% | 2.52% | Mainly due to the acquisition of Qianxi Fulong Company during the reporting period, changing the consolidation scope and increasing construction in progress | | Short-term Borrowings | 505,569,243.22 | 26.93% | 395,000,000.00 | 24.99% | 1.94% | Increase in operating borrowings during the current reporting period | | Long-term Borrowings | 117,844,700.00 | 6.28% | 173,426,666.67 | 10.97% | -4.69% | Mainly due to the repayment of the first tranche of ABS borrowings during the current reporting period | | Intangible Assets | 48,732,222.69 | 2.60% | 3,537,529.70 | 0.22% | 2.38% | Mainly due to the acquisition of Qianxi Fulong and Qianxi Heran during the reporting period, recognizing franchise contract rights as an intangible asset | | Goodwill | 37,530,081.21 | 2.00% | 767,136.21 | 0.05% | 1.95% | Mainly due to the acquisition of Qianxi Fulong and Qianxi Heran during the reporting period, recognizing the difference between investment consideration and the fair value share of identifiable net assets as goodwill at the consolidated level | | Other Non-current Assets | 89,779,823.87 | 4.78% | 158,554,769.62 | 10.03% | -5.25% | Performance earnest money for Heran Limited equity acquisition was paid in the prior year period | Financial Assets Measured at Fair Value | Item | Beginning Balance (Yuan) | Amount Purchased in Current Period (Yuan) | Amount Sold in Current Period (Yuan) | Ending Balance (Yuan) | | :--- | :--- | :--- | :--- | :--- | | Trading Financial Assets | 0.00 | 504,090,000.00 | 500,080,000.00 | 4,010,000.00 | | Other Non-current Financial Assets | 10,000,000.00 | 5,208,154.00 | 0.00 | 15,208,154.00 | | Total | 10,000,000.00 | 509,298,154.00 | 500,080,000.00 | 19,218,154.00 | - As of the end of the reporting period, information on restricted asset rights is detailed in Section XI, "VII, 81, Assets with Restricted Ownership or Use Rights"[60](index=60&type=chunk) [Investment Analysis](index=22&type=section&id=Investment%20Analysis) During the reporting period, the company's investment amount significantly increased by **2738.23%**, primarily through equity acquisitions of Qianxi Heran and Qianxi Fulong, expanding its heating service business and securing franchise rights in Qianxi County, while also acquiring a portion of Zhonghe Yian's equity and planning to enter the education sector through Longda Culture to implement a diversified strategic deployment Investment Amount During the Reporting Period | Investment Amount in Current Period (Yuan) | Investment Amount in Prior Year Period (Yuan) | Change Percentage | | :--- | :--- | :--- | | 283,822,854.00 | 10,000,000.00 | 2,738.23% | - The company acquired **35%** equity in Qianxi Heran (investment of **41.65 million Yuan**) and **50.50%** equity in Qianxi Fulong (investment of **80.295 million Yuan**) through equity acquisition, obtaining heating franchise rights in Qianxi County, which also involved litigation[63](index=63&type=chunk)[64](index=64&type=chunk) - The company's wholly-owned subsidiary, Huayi Longda, paid cash to acquire **65%** equity in Qianxi Heran (**75.6797 million Yuan**) and **44.5%** equity in Qianxi Fulong (**80.99 million Yuan**) from Zhonghe Yian (Beijing) Human Resources Service Co Ltd, further consolidating control over Qianxi's heating business[64](index=64&type=chunk)[128](index=128&type=chunk) - During the reporting period, the company had no significant ongoing non-equity investments, financial assets measured at fair value, financial asset investments, use of raised funds, or significant non-raised fund investment projects[66](index=66&type=chunk)[67](index=67&type=chunk)[68](index=68&type=chunk)[69](index=69&type=chunk)[70](index=70&type=chunk) [Significant Asset and Equity Disposals](index=25&type=section&id=Significant%20Asset%20and%20Equity%20Disposals) During the reporting period, the company did not dispose of any significant assets or equity - The company did not dispose of significant assets during the reporting period[71](index=71&type=chunk) - The company did not dispose of significant equity during the reporting period[72](index=72&type=chunk) [Analysis of Major Holding and Participating Companies](index=25&type=section&id=Analysis%20of%20Major%20Holding%20and%20Participating%20Companies) The company's major holding subsidiaries include Huatong Xingyuan, Huayi Longda, Shenyang Jianyuan, Qianxi Fulong, and Qianxi Heran, as well as the newly established Longda Culture, with the acquisitions of Qianxi Fulong and Qianxi Heran being strategically important for the company's layout in Hebei and for energy saving and emission reduction, while the establishment of Longda Culture marks the company's entry into the cultural education sector Major Subsidiaries and Participating Companies with Net Profit Impact Exceeding 10% | Company Name | Company Type | Main Business | Registered Capital (Yuan) | Total Assets (Yuan) | Net Assets (Yuan) | Operating Revenue (Yuan) | Operating Profit (Yuan) | Net Profit (Yuan) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Beijing Huatong Xingyuan Heating Energy-saving Technology Co Ltd | Subsidiary | Energy-saving services | 10,000,000.00 | 398,922,686.69 | 82,969,800.94 | 11,457,636.88 | 3,159,583.46 | 3,107,970.02 | | Beijing Huayi Longda Technology Development Co Ltd | Subsidiary | Heating services, investment management | 10,000,000.00 | 548,216,051.48 | 68,282,668.66 | 4,249,568.45 | -2,429,092.23 | -2,276,681.94 | | Shenyang Jianyuan Heating Co Ltd | Subsidiary | Heating services | 10,000,000.00 | 34,839,893.40 | 10,944,627.61 | 6,062,182.23 | 182,127.46 | 148,917.97 | | Qianxi Fulong Heat Technology Co Ltd | Subsidiary | Heating services, pipeline services | 100,000,000.00 | 316,508,335.57 | -16,927,113.52 | 745,353.61 | -4,173,696.84 | -2,906,067.16 | | Qianxi Heran Energy-saving Technology Co Ltd | Subsidiary | Energy-saving services | 60,000,000.00 | 152,646,849.99 | 115,554,292.99 | 0.00 | -68,399.85 | -42,083.06 | - The acquisitions of Qianxi Fulong and Qianxi Heran had a net profit impact of **-2,906,067.16 Yuan** and **-42,083.06 Yuan** respectively, but secured heating qualifications and franchise rights in Qianxi County, Tangshan City, Hebei Province, which is beneficial for strengthening the company's strategic layout in Hebei and applying energy-saving and environmental protection technologies[73](index=73&type=chunk)[74](index=74&type=chunk) - The newly established Longda (Beijing) Technology Culture Development Co Ltd had a net profit impact of **-9,103.12 Yuan**, aiming to develop cultural and artistic services, open a second growth track, and enhance the company's competitiveness[74](index=74&type=chunk) [Structured Entities Controlled by the Company](index=26&type=section&id=Structured%20Entities%20Controlled%20by%20the%20Company) During the reporting period, the company had no structured entities under its control - The company had no structured entities under its control during the reporting period[75](index=75&type=chunk) [Forecast of Operating Performance for January-September 2020](index=26&type=section&id=Forecast%20of%20Operating%20Performance%20for%20January-September%202020) The company did not issue any warnings or explanations regarding expected losses or significant changes in operating performance for January-September 2020 - The company did not make any forecasts for its operating performance for January-September 2020[75](index=75&type=chunk) [Risks Faced by the Company and Countermeasures](index=26&type=section&id=Risks%20Faced%20by%20the%20Company%20and%20Countermeasures) The company faces risks from changes in industrial policy, uncertainty of fiscal subsidies, raw material price fluctuations, technological obsolescence, production safety, lower-than-expected returns on external investments, and acquisition integration challenges; to mitigate these, the company strengthens safety management, optimizes performance and compensation systems, improves internal controls, formulates investment and M&A strategies, and enhances post-acquisition integration - The company faces risks from changes in industrial policy, with heating tariffs subject to government regulation, and changes in energy prices and labor costs potentially creating operational pressure[75](index=75&type=chunk) - Fiscal subsidies pose a risk; if the subsidy mechanism is not adjusted in time or is canceled, and heating prices are not market-driven, it will adversely affect profitability[76](index=76&type=chunk) - Fluctuations in raw material (natural gas) prices may put pressure on the company's cash flow, and changes in fuel subsidy policies will affect profitability[77](index=77&type=chunk) - Risks of technological obsolescence and the application of new technologies may lead to the company's technologies losing their leading edge and reduced market competitiveness[78](index=78&type=chunk) - Heating enterprises face production safety risks related to hot water boiler operation and natural gas pipeline transportation[79](index=79&type=chunk) - External investments (such as Qianxi heating business, education and training industry) may carry risks of lower-than-expected returns[80](index=80&type=chunk) - Acquisitions of Qianxi Heran, Qianxi Fulong, and Bowen Hanxiang may face integration risks, and if integration is not as expected, it will adversely affect operating performance and shareholder interests[81](index=81&type=chunk) - The company ensures production safety by establishing an all-staff safety management network, electronic monitoring, automatic alarm systems, and regular inspection systems[82](index=82&type=chunk)[83](index=83&type=chunk) - The company has established a comprehensive performance evaluation system and compensation mechanism to enhance employee motivation[84](index=84&type=chunk) - The company mitigates management risks by improving internal control systems, standardizing operational frameworks, revising management policies, and enhancing the quality of its management team[84](index=84&type=chunk) - The company formulates investment and M&A strategic plans, strengthens risk control at all stages of M&A, and closely monitors and adjusts acquired projects to reduce investment and integration risks[84](index=84&type=chunk) Section V Significant Matters This section details significant events during the reporting period, including shareholder meetings, profit distribution plans, commitment fulfillment, accounting firm appointments, litigation, media scrutiny, penalties, integrity status, equity incentive plans, related party transactions, and subsidiary matters [Information on Annual and Extraordinary General Meetings Held During the Reporting Period](index=29&type=section&id=Information%20on%20Annual%20and%20Extraordinary%20General%20Meetings%20Held%20During%20the%20Reporting%20Period) During the reporting period, the company held three extraordinary general meetings and one annual general meeting, approving multiple proposals, with investor participation rates consistently above **53%** Shareholder Meetings During the Reporting Period | Meeting Session | Meeting Type | Investor Participation Rate | Date Held | Disclosure Date | | :--- | :--- | :--- | :--- | :--- | | 2020 First Extraordinary General Meeting | Extraordinary General Meeting | 54.17% | April 03, 2020 | April 07, 2020 | | 2019 Annual General Meeting | Annual General Meeting | 54.03% | May 20, 2020 | May 21, 2020 | | 2020 Second Extraordinary General Meeting | Extraordinary General Meeting | 53.42% | June 22, 2020 | June 23, 2020 | - There were no requests from preferred shareholders with restored voting rights to convene an extraordinary general meeting during the reporting period[88](index=88&type=chunk) [Profit Distribution and Capital Reserve Conversion to Share Capital During the Reporting Period](index=29&type=section&id=Profit%20Distribution%20and%20Capital%20Reserve%20Conversion%20to%20Share%20Capital%20During%20the%20Reporting%20Period) The company plans not to distribute cash dividends, bonus shares, or convert capital reserves into share capital for the semi-annual period - The company plans not to distribute cash dividends, bonus shares, or convert capital reserves into share capital for the semi-annual period[88](index=88&type=chunk) [Commitments Fulfilled and Overdue Unfulfilled by Controlling Shareholder, Shareholders, Related Parties, Acquirers, and the Company During and as of the End of the Reporting Period](index=29&type=section&id=Commitments%20Fulfilled%20and%20Overdue%20Unfulfilled%20by%20Controlling%20Shareholder%2C%20Shareholders%2C%20Related%20Parties%2C%20Acquirers%2C%20and%20the%20Company%20During%20and%20as%20of%20the%20End%20of%20the%20Reporting%20Period) During the reporting period, the company had no commitments from its controlling shareholder, shareholders, related parties, acquirers, or the company itself that were fulfilled or overdue and unfulfilled as of the end of the reporting period - During the reporting period, the company had no commitments from its controlling shareholder, shareholders, related parties, acquirers, or the company itself that were fulfilled or overdue and unfulfilled as of the end of the reporting period[89](index=89&type=chunk) [Appointment and Dismissal of Accounting Firms](index=30&type=section&id=Appointment%20and%20Dismissal%20of%20Accounting%20Firms) The company's semi-annual report was unaudited, and no accounting firm was appointed or dismissed during the reporting period - The company's semi-annual report was unaudited[91](index=91&type=chunk) [Board of Directors' and Supervisory Board's Explanations on "Non-Standard Audit Report" for the Current Period](index=30&type=section&id=Board%20of%20Directors%27%20and%20Supervisory%20Board%27s%20Explanations%20on%20%22Non-Standard%20Audit%20Report%22%20for%20the%20Current%20Period) During the reporting period, the company's Board of Directors and Supervisory Board had no explanations regarding a "non-standard audit report" for the current period [Board of Directors' Explanations on "Non-Standard Audit Report" for the Previous Year](index=30&type=section&id=Board%20of%20Directors%27%20Explanations%20on%20%22Non-Standard%20Audit%20Report%22%20for%20the%20Previous%20Year) During the reporting period, the company's Board of Directors had no explanations regarding a "non-standard audit report" for the previous year [Bankruptcy and Reorganization Matters](index=30&type=section&id=Bankruptcy%20and%20Reorganization%20Matters) During the reporting period, the company did not experience any bankruptcy or reorganization matters - The company did not experience any bankruptcy or reorganization matters during the reporting period[92](index=92&type=chunk) [Litigation Matters](index=30&type=section&id=Litigation%20Matters) The company was involved in multiple litigation matters during the reporting period, including a significant lawsuit with Sanming Xiaofei that was executed through equity offset, and several contract disputes and property damage compensation cases with Wangfu Property, Chuanglian Company, small property owners, Shenyang Junhui Company, Shenyang Henglian Company, and Han Chao, some of which are still pending or in execution - The significant lawsuit between the company's wholly-owned subsidiary Huayi Longda and Sanming Xiaofei, involving **120 million Yuan**, was executed and completed through Sanming Xiaofei offsetting performance earnest money and related fees with partial equity in Qianxi Heran and Qianxi Fulong[93](index=93&type=chunk) - The company, as plaintiff, has a contract dispute with Wangfu Property involving **29.55 million Yuan**, currently in the first instance with no judgment yet[94](index=94&type=chunk) - The company, as plaintiff, has an archive management software dispute with Chuanglian Company involving **130,000 Yuan**, where the court ruled to terminate the contract, refund **100,000 Yuan**, and pay **30,000 Yuan** in liquidated damages, and is currently in execution[94](index=94&type=chunk) - The company has accumulated **27 million Yuan** in litigation cases for unpaid heating fees from small property owners, which are beneficial for the company to recover outstanding payments[94](index=94&type=chunk) - Shenyang Jianyuan has engineering contract disputes with Shenyang Junhui Company and Shenyang Henglian Company, with some cases dismissed or judged, and others still pending or in execution[94](index=94&type=chunk)[95](index=95&type=chunk) - The lawsuit between the company, as defendant, and Chuanke Pump Industry regarding pump payments has been concluded, with the court ruling that the company is not required to pay for unqualified pumps and can return them, while paying for qualified pumps and interest[95](index=95&type=chunk) [Media Scrutiny](index=32&type=section&id=Media%20Scrutiny) During the reporting period, the company was not subject to widespread media scrutiny - The company was not subject to widespread media scrutiny during the reporting period[96](index=96&type=chunk) [Penalties and Rectifications](index=33&type=section&id=Penalties%20and%20Rectifications) During the reporting period, the company had no penalties or rectifications - The company had no penalties or rectifications during the reporting period[97](index=97&type=chunk) [Integrity Status of the Company, its Controlling Shareholder, and Actual Controller](index=33&type=section&id=Integrity%20Status%20of%20the%20Company%2C%20its%20Controlling%20Shareholder%2C%20and%20Actual%20Controller) During the reporting period, the company, its controlling shareholder, and actual controller did not have any unfulfilled effective court judgments or large overdue debts - During the reporting period, there was no non-operating occupation of funds of the listed company by the controlling shareholder and its related parties[107](index=107&type=chunk) [Implementation of Equity Incentive Plans, Employee Stock Ownership Plans, or Other Employee Incentive Measures](index=33&type=section&id=Implementation%20of%20Equity%20Incentive%20Plans%2C%20Employee%20Stock%20Ownership%20Plans%2C%20or%20Other%20Employee%20Incentive%20Measures) During the reporting period, the company implemented the repurchase and cancellation of its 2018 Restricted Stock and Stock Option Incentive Plan, involving some restricted shares and stock options, and adjusted the number and price of related equity to reflect unmet performance targets and personnel changes - The company repurchased and canceled **2,012,800** restricted shares from its 2018 Restricted Stock and Stock Option Incentive Plan at repurchase prices of **6.86 Yuan/share** and **7.06 Yuan/share** plus bank deposit interest, due to position adjustments or resignations of some incentive recipients and the failure to meet the unlocking conditions for 2019 performance[98](index=98&type=chunk)[100](index=100&type=chunk) - The company canceled **725,140** stock options from its 2018 Restricted Stock and Stock Option Incentive Plan due to resignations or position adjustments of some incentive recipients and the failure to meet the exercise conditions for 2019 performance[99](index=99&type=chunk) - The company adjusted the number and price of related equity under the 2018 Restricted Stock and Stock Option Incentive Plan, resulting in **1.90632 million** initially granted restricted shares at a repurchase price of **5.20 Yuan/share**, and **351,000** reserved restricted shares at a repurchase price of **5.35 Yuan/share**[101](index=101&type=chunk) - The adjusted number of initially granted stock options is **653,016** at an exercise price of **10.60 Yuan/share**, and reserved stock options is **177,450** at an exercise price of **10.78 Yuan/share**[101](index=101&type=chunk) [Significant Related Party Transactions](index=34&type=section&id=Significant%20Related%20Party%20Transactions) During the reporting period, the company had no related party transactions related to daily operations, asset or equity acquisitions/disposals, joint external investments, or related party creditor-debtor relationships - The company had no related party transactions related to daily operations during the reporting period[102](index=102&type=chunk) - The company had no related party transactions involving asset or equity acquisitions/disposals during the reporting period[103](index=103&type=chunk) - The company had no related party transactions involving joint external investments during the reporting period[104](index=104&type=chunk) - The company had no related party creditor-debtor relationships during the reporting period[105](index=105&type=chunk) - The company had no other significant related party transactions during the reporting period[106](index=106&type=chunk) [Non-Operating Funds Occupied by Controlling Shareholder and Related Parties from the Listed Company](index=34&type=section&id=Non-Operating%20Funds%20Occupied%20by%20Controlling%20Shareholder%20and%20Related%20Parties%20from%20the%20Listed%20Company) During the reporting period, there was no non-operating occupation of funds of the listed company by the controlling shareholder and its related parties - During the reporting period, there was no non-operating occupation of funds of the listed company by the controlling shareholder and its related parties[107](index=107&type=chunk) [Significant Contracts and Their Performance](index=34&type=section&id=Significant%20Contracts%20and%20Their%20Performance) The company had multiple leasing contracts during the reporting period, primarily for office premises, with high total rents, and also had external guarantees and entrusted wealth management, with total external guarantees accounting for **30.79%** of net assets and an outstanding entrusted wealth management balance of **4.01 million Yuan** - The company had no trusteeship or contracting arrangements during the reporting period[108](index=108&type=chunk)[109](index=109&type=chunk)[110](index=110&type=chunk) Leasing Information | Lessor Name | Lessee Name | Leased Asset Description | Lease Start Date | Lease End Date | Rent (Yuan/month) | Related Party | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Beijing Century Starry Sky Film Investment Co Ltd | Huatong Heat | 5th Floor, Building 4, Zone 3, No 186 South Fourth Ring West Road, Fengtai District, Beijing, building area 1816.54㎡ | May 01, 2017 | April 30, 2022 | 295,041.35 | No | | Kerry (Shenyang) Real Estate Development Co Ltd | Huatong Heat | Unit 2606, 26th Floor, Block A, Enterprise Plaza, No 121 Qingnian Street, Shenhe District, Shenyang City, building area 495.76㎡ | October 01, 2019 | July 31, 2021 | 46,849.32 | No | | Beijing Huarui Xingmao Real Estate Consulting Co Ltd | Huatong Heat | Room 03, 16th Floor, Building 2, Huamao Center, No 79 Jianguo Road, Chaoyang District, Beijing, building area 264.23㎡ | May 01, 2019 | May 31, 2020 | 114,965.23 | No | | Chifeng Heran Energy-saving Technology Co Ltd | Qianxi Fulong | West of Tuanjie Road, Qianxi County Finance Sixth Hospital | July 01, 2016 | Indefinite | 0.00 | No | - During the reporting period, the company had no leasing projects whose profit or loss impact reached **10%** or more of the company's total profit for the reporting period[111](index=111&type=chunk) External Guarantees by the Company and its Subsidiaries | Guarantor Name | Guaranteed Amount (10,000 Yuan) | Actual Guaranteed Amount (10,000 Yuan) | Guarantee Type | Guarantee Period | Fulfilled | Related Party Guarantee | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Beijing ShouChuang Financing Guarantee Co Ltd | 20,000 | 20,000 | Joint and several liability guarantee | From the effective date of the "Guarantee Agreement" until two years after the expiration of the debt performance period under the main contract | No | No | | Beijing Huatong Xingyuan Heating Energy-saving Technology Co Ltd | 600 | 600 | Joint and several liability guarantee | 2019.10.28-2021.10.27 | No | No | | Total Actual Guaranteed Balance at Period-end | 20,600 | 20,600 | | | | | | Proportion of Total Actual Guaranteed Amount to Company's Net Assets | 30.79% | | | | | | - During the reporting period, the company had no irregular external guarantees[115](index=115&type=chunk) Entrusted Wealth Management | Specific Type | Entrusted Wealth Management Amount Incurred (10,000 Yuan) | Outstanding Balance (10,000 Yuan) | Overdue Unrecovered Amount (10,000 Yuan) | | :--- | :--- | :--- | :--- | | Brokerage Wealth Management Products | 3,000 | 0 | 0 | | Bank Wealth Management Products | 47,409 | 401 | 0 | | Total | 50,409 | 401 | 0 | - The company had no other significant contracts during the reporting period[117](index=117&type=chunk) [Social Responsibility](index=37&type=section&id=Social%20Responsibility) The company and its subsidiaries are designated key polluting units by environmental protection authorities, having installed and operated dust removal, desulfurization, and denitrification equipment, completed environmental impact assessments and emergency plans, and continued to fulfill poverty alleviation agreements by donating materials to impoverished villages to support stable poverty eradication - The company and its subsidiaries are designated key polluting units by environmental protection authorities, with main pollutants including particulate matter, SO₂, NOx, and nitrogen oxides[118](index=118&type=chunk)[119](index=119&type=chunk) - The company has installed and is operating dust removal, desulfurization, and denitrification equipment, and has also carried out low-nitrogen modifications to boiler burners[119](index=119&type=chunk) - The company has completed multiple construction project environmental impact assessments and other environmental protection administrative permits, and has prepared emergency plans for environmental incidents and self-monitoring plans[120](index=120&type=chunk)[121](index=121&type=chunk)[122](index=122&type=chunk) - The company continues to fulfill its paired assistance agreements with Laojungou Village, Dayingzi Township, Linxi County, Chifeng City, Inner Mongolia, and Xiaozhuang Village, Wulonggou Township, Laiyuan County, Baoding City, Hebei Province[123](index=123&type=chunk) - Before the 2020 Spring Festival, the company donated quilts and bedding to elderly residents over 60 and impoverished villagers in Xiaozhuang Village, Wulonggou Township, Laiyuan County, Baoding City, Hebei Province[124](index=124&type=chunk) - In the second half of 2020, the company will continue to overcome the impact of the pandemic and assist impoverished villages in achieving stable poverty eradication[125](index=125&type=chunk) [Significant Matters of Company Subsidiaries](index=39&type=section&id=Significant%20Matters%20of%20Company%20Subsidiaries) The company's subsidiary Huayi Longda acquired **35%** equity in Qianxi Heran and **50.5%** equity in Qianxi Fulong through equity offset, and further paid cash to acquire **65%** equity in Qianxi Heran and **44.5%** equity in Qianxi Fulong from Zhonghe Yian, totaling **157 million Yuan**; additionally, its second-tier wholly-owned subsidiary Longda Culture acquired and invested in Beijing Bowen Hanxiang Technology Training Co Ltd, holding a total of **19.5477%** equity for **69.14476 million Yuan**, marking the company's entry into the education sector - The company's wholly-owned subsidiary Huayi Longda, through court mediation, offset **120 million Yuan** in performance earnest money and related fees owed by Sanming Xiaofei with **35%** equity in Qianxi Heran and **50.5%** equity in Qianxi Fulong[127](index=127&type=chunk) - Huayi Longda paid **156.6697 million Yuan** in cash to acquire **65%** equity in Qianxi Heran and **44.5%** equity in Qianxi Fulong from Zhonghe Yian, after which the company will wholly control Qianxi Heran and Qianxi Fulong[128](index=128&type=chunk) - The company's second-tier wholly-owned subsidiary Longda Culture acquired and invested in Beijing Bowen Hanxiang Technology Training Co Ltd for **69.14476 million Yuan**, holding a total of **19.5477%** equity, thereby entering the education and training sector[129](index=129&type=chunk) Section VI Share Changes and Shareholder Information This section details the company's share capital changes, securities issuance, shareholder numbers, and shareholding structure, including information on major shareholders and changes in controlling shareholder or actual controller [Share Change Information](index=41&type=section&id=Share%20Change%20Information) During the reporting period, the company's total share capital increased from **159.7 million shares** to **205 million shares**, primarily due to the repurchase and cancellation of some restricted shares followed by the implementation of the 2019 equity distribution, which involved converting capital reserves into shares at a rate of **3 shares for every 10 shares**, impacting earnings per share and net assets per share - The company repurchased and canceled **2,012,800** restricted shares, reducing the total share capital from **159,749,200** shares to **157,736,400** shares[133](index=133&type=chunk)[138](index=138&type=chunk) - The company implemented its 2019 equity distribution, converting capital reserves into shares at a rate of **3 shares for every 10 shares** for all shareholders, increasing the total share capital from **157,736,400** shares to **205,057,320** shares[133](index=133&type=chunk)[138](index=138&type=chunk) Share Change Information | Category | Number of Shares Before Change (shares) | Proportion Before Change | Capital Reserve Conversion (shares) | Other (shares) | Subtotal (shares) | Number of Shares After Change (shares) | Proportion After Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | I. Restricted Shares | 74,640,862 | 46.72% | 21,810,207 | -1,940,172 | 19,870,035 | 94,510,897 | 46.09% | | II. Unrestricted Shares | 85,108,338 | 53.28% | 25,510,713 | -72,628 | 25,438,085 | 110,546,423 | 53.91% | | III. Total Shares | 159,749,200 | 100.00% | 47,320,920 | -2,012,800 | 45,308,120 | 205,057,320 | 100.00% | - Share changes resulted in basic and diluted earnings per share increasing by **20.59%** year-on-year, while net assets per share attributable to ordinary shareholders decreased by **18.05%** compared to the end of the previous year[140](index=140&type=chunk) Restricted Share Change Information | Shareholder Name | Restricted Shares at Period-start (shares) | Restricted Shares Increased in Current Period (shares) | Restricted Shares Released in Current Period (shares) | Restricted Shares at Period-end (shares) | Reason for Restriction | | :--- | :--- | :--- | :--- | :--- | :--- | | Zhao Yibo | 44,050,266 | 13,215,080 | 0 | 57,265,346 | Pre-IPO individual restricted shares | | Chen Xiuming | 24,847,255 | 7,454,177 | 0 | 32,301,432 | Senior management lock-up shares | | Li He | 653,068 | 60,720 | 0 | 713,788 | Senior management lock-up shares; equity incentive restricted shares | | Shi Xiujie | 591,466 | 76,040 | 0 | 667,506 | Senior management lock-up shares; equity incentive restricted shares | | Lu Hongguang | 318,490 | -39,653 | 0 | 278,837 | Senior management lock-up shares; equity incentive restricted shares | | Gao Qinghong | 312,000 | -109,200 | 0 | 202,800 | Senior management lock-up shares | | Zou Yingchun | 249,600 | -87,360 | 0 | 162,240 | Equity incentive restricted shares | | Chen Heying | 205,200 | -71,820 | 0 | 133,380 | Equity incentive restricted shares | | Other Restricted Shareholders | 2,413,650 | -1,022,325 | 0 | 1,391,325 | Senior management lock-up shares; equity incentive restricted shares | | Total | 74,640,862 | 19,870,035 | 0 | 94,510,897 | -- | [Securities Issuance and Listing Information](index=43&type=section&id=Securities%20Issuance%20and%20Listing%20Information) During the reporting period, the company had no securities issuance or listing activities [Number of Shareholders and Shareholding Information](index=43&type=section&id=Number%20of%20Shareholders%20and%20Shareholding%20Information) At the end of the reporting period, the company had **18,793** ordinary shareholders, with Zhao Yibo holding **27.93%** as the controlling shareholder and Chen Xiuming holding **19.84%** among the top ten ordinary shareholders, both having a significant portion of their shares pledged, and the company is unaware of any associated relationships or concerted actions among the top ten shareholders - At the end of the reporting period, the total number of ordinary shareholders was **18,793**[145](index=145&type=chunk) Shareholding Information of Ordinary Shareholders Holding 5% or More or Top 10 Ordinary Shareholders | Shareholder Name | Shareholder Nature | Shareholding Percentage | Number of Ordinary Shares Held at Period-end (shares) | Number of Restricted Ordinary Shares Held (shares) | Number of Unrestricted Ordinary Shares Held (shares) | Pledged or Frozen Status (Number) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Zhao Yibo | Domestic Natural Person | 27.93% | 57,265,346 | 57,265,346 | 0 | Pledged: 39,364,000 | | Chen Xiuming | Domestic Natural Person | 19.84% | 40,688,705 | 32,301,432 | 8,387,273 | Pledged: 23,249,200 | | Zhongshan General Technology Venture Capital Center (Limited Partnership) | Domestic Non-state-owned Legal Person | 4.71% | 9,657,133 | 0 | 9,657,133 | | | Karamay Kunlun Chaoyang Venture Capital Fund Partnership (Limited Partnership) | Domestic Non-state-owned Legal Person | 3.41% | 6,994,963 | 0 | 6,994,963 | | | Xiang Yanru | Domestic Natural Person | 1.01% | 2,079,870 | 0 | 2,079,870 | | | Tao Xiangyu | Domestic Natural Person | 0.99% | 2,037,429 | 0 | 2,037,429 | | | Yao Yuxin | Domestic Natural Person | 0.83% | 1,694,277 | 0 | 1,694,277 | | | Beijing Keqiao Growth Venture Capital Center (Limited Partnership) | Domestic Non-state-owned Legal Person | 0.71% | 1,446,279 | 0 | 1,446,279 | | | Wang Yingjun | Domestic Natural Person | 0.50% | 1,026,168 | 0 | 1,026,168 | | | Yang Yong | Domestic Natural Person | 0.50% | 1,016,579 | 0 | 1,016,579 | | - The company is unaware of any associated relationships or whether the top ten shareholders are acting in concert[146](index=146&type=chunk) - Shareholders Xiang Yanru and Yao Yuxin hold some shares through client credit trading guarantee securities accounts[147](index=147&type=chunk) - The company's top 10 ordinary shareholders and top 10 unrestricted ordinary shareholders did not engage in agreed repurchase transactions during the reporting period[148](index=148&type=chunk) [Changes in Controlling Shareholder or Actual Controller](index=45&type=section&id=Changes%20in%20Controlling%20Shareholder%20or%20Actual%20Controller) During the reporting period, there were no changes in the company's controlling shareholder or actual controller - The company's controlling shareholder did not change during the reporting period[149](index=149&type=chunk) - The company's actual controller did not change during the reporting period[149](index=149&type=chunk) Section VII Preferred Shares Information This section confirms that the company had no preferred shares during the reporting period [Preferred Shares Information](index=46&type=section&id=Preferred%20Shares%20Information) During the reporting period, the company had no preferred shares - The company had no preferred shares during the reporting period[152](index=152&type=chunk) Section VIII Convertible Corporate Bonds Information This section confirms that the company had no convertible corporate bonds during the reporting period [Convertible Corporate Bonds Information](index=47&type=section&id=Convertible%20Corporate%20Bonds%20Information) During the reporting period, the company had no convertible corporate bonds - The company had no convertible corporate bonds during the reporting period[155](index=155&type=chunk) Section IX Information on Directors, Supervisors, and Senior Management This section details the shareholding changes and personnel changes of the company's directors, supervisors, and senior management during the reporting period [Shareholding Changes of Directors, Supervisors, and Senior Management](index=48&type=section&id=Shareholding%20Changes%20of%20Directors%2C%20Supervisors%2C%20and%20Senior%20Management) During the reporting period, the total shareholding of the company's directors, supervisors, and senior management increased, with significant increases for Chairman Zhao Yibo and Director Chen Xiuming, while the number of restricted shares for some senior executives changed due to adjustments in the equity incentive plan Shareholding Changes of Directors, Supervisors, and Senior Management | Name | Position | Shares Held at Period-start (shares) | Shares Increased in Current Period (shares) | Shares Decreased in Current Period (shares) | Shares Held at Period-end (shares) | Restricted Shares Granted at Period-end (shares) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Zhao Yibo | Chairman | 44,050,266 | 13,215,080 | 0 | 57,265,346 | 0 | | Chen Xiuming | Director | 33,129,673 | 10,241,262 | 2,682,230 | 40,688,705 | 0 | | Li He | Director, General Manager | 801,424 | 209,227 | 104,000 | 906,651 | 135,200 | | Lu Hongguang | Director, Deputy General Manager | 337,987 | 70,196 | 104,000 | 304,183 | 135,200 | | Xie Lingyu | Director, Board Secretary | 156,000 | 23,400 | 78,000 | 101,400 | 101,400 | | Ma Yan | Director, CFO | 156,000 | 23,400 | 78,000 | 101,400 | 101,400 | | Tang Wenzhi | Director | 226,200 | 42,900 | 83,200 | 185,900 | 108,160 | | Sun Hongjiang | Former Chairman of Supervisory Board | 290,511 | 87,153 | 0 | 377,664 | 0 | | Total | -- | 79,148,061 | 23,912,618 | 3,129,430 | 99,931,249 | 581,360 | [Changes in Company Directors, Supervisors, and Senior Management](index=49&type=section&id=Changes%20in%20Company%20Directors%2C%20Supervisors%2C%20and%20Senior%20Management) During the reporting period, Supervisory Board Chairman Sun Hongjiang and Supervisors Li Yutong and Wei Xing resigned due to personal reasons or work adjustments, while Liu Haiqing was elected as Chairman of the Supervisory Board, and Wang Xiaolong and Yu Zihan were elected as Supervisors Changes in Company Directors, Supervisors, and Senior Management | Name | Position Held | Type | Date | Reason | | :--- | :--- | :--- | :--- | :--- | | Sun Hongjiang | Former Chairman of Supervisory Board | Resignation | February 04, 2020 | Resigned as Chairman and Supervisor of the Second Supervisory Board due to personal reasons | | Li Yutong | Former Supervisor | Resignation | April 23, 2020 | Resigned as company Supervisor due to work adjustment | | Liu Haiqing | Chairman of Supervisory Board | Election | April 23, 2020 | Elected as Supervisor and Chairman of the Second Supervisory Board | | Wei Xing | Former Supervisor | Resignation | June 03, 2020 | Resigned as company Supervisor due to work adjustment | | Wang Xiaolong | Supervisor | Election | May 20, 2020 | Elected as Supervisor of the Second Supervisory Board | | Yu Zihan | Supervisor | Election | July 17, 2020 | Elected as Supervisor of the Second Supervisory Board | Section X Corporate Bonds Information This section confirms that the company has no corporate bonds publicly issued and listed on a stock exchange that are not yet due or have not been fully redeemed as of the approval date of the semi-annual report [Corporate Bonds Information](index=50&type=section&id=Corporate%20Bonds%20Information) The company has no corporate bonds publicly issued and listed on a stock exchange that are not yet due or have not been fully redeemed as of the approval date of the semi-annual report - The company has no corporate bonds publicly issued and listed on a stock exchange that are not yet due or have not been fully redeemed as of the approval date of the semi-annual report[161](index=161&type=chunk) Section XI Financial Report This section presents the company's unaudited semi-annual financial statements, including balance sheets, income statements, cash flow statements, and statements of changes in owners' equity for both consolidated and parent company levels, along with detailed notes on significant accounting policies, taxation, and various financial statement items [Audit Report](index=51&type=section&id=Audit%20Report) The company's semi-annual financial report was unaudited - The company's semi-annual financial report was unaudited[163](index=163&type=chunk) [Financial Statements](index=51&type=section&id=Financial%20Statements) This section provides the company's consolidated and parent company balance sheets, income statements, cash flow statements, and statements of changes in owners' equity for the first half of 2020, comprehensively presenting the company's financial position, operating results, and cash flow situation - The consolidated balance sheet shows that as of June 30, 2020, the company's total assets were **1,877,437,424.63 Yuan**, total liabilities were **1,203,334,670.21 Yuan**, and total owners' equity was **674,102,754.42 Yuan**[165](index=165&type=chunk)[168](index=168&type=chunk) - The consolidated income statement shows that for the first half of 2020, total operating revenue was **586,999,322.55 Yuan**, net profit was **81,366,145.87 Yuan**, and net profit attributable to parent company owners was **83,360,131.01 Yuan**[173](index=173&type=chunk)[175](index=175&type=chunk) - The consolidated cash flow statement shows that for the first half of 2020, net cash flow from operating activities was **-335,093,609.89 Yuan**, net cash flow from investing activities was **-253,335,989.69 Yuan**, and net cash flow from financing activities was **37,765,134.42 Yuan**[185](index=185&type=chunk)[186](index=186&type=chunk) [Consolidated Balance Sheet](index=51&type=section&id=Consolidated%20Balance%20Sheet) As of June 30, 2020, the company's consolidated total assets amounted to **1.877 billion Yuan**, with current assets of **542 million Yuan** and non-current assets of **1.335 billion Yuan**, while total liabilities were **1.203 billion Yuan**, including current liabilities of **854 million Yuan** and non-current liabilities of **349 million Yuan**, and owners' equity attributable to the parent company was **669 million Yuan** Consolidated Balance Sheet Key Data | Item | June 30, 2020 (Yuan) | December 31, 2019 (Yuan) | | :--- | :--- | :--- | | Total Assets | 1,877,437,424.63 | 2,014,852,191.88 | | Total Current Assets | 542,027,057.30 | 1,185,760,168.32 | | Total Non-current Assets | 1,335,410,367.33 | 829,092,023.56 | | Total Liabilities | 1,203,334,670.21 | 1,378,725,547.46 | | Total Current Liabilities | 854,122,056.22 | 1,024,986,937.87 | | Total Non-current Liabilities | 349,212,613.99 | 353,738,609.59 | | Total Owners' Equity Attributable to Parent Company | 669,118,378.45 | 636,126,644.42 | | Total Owners' Equity | 674,102,754.42 | 636,126,644.42 | [Parent Company Balance Sheet](index=54&type=section&id=Parent%20Company%20Balance%20Sheet) As of June 30, 2020, the parent company's total assets amounted to **1.739 billion Yuan**, with current assets of **960 million Yuan** and non-current assets of **778 million Yuan**, while total liabilities were **1.168 billion Yuan**, including current liabilities of **880 million Yuan** and non-current liabilities of **287 million Yuan**, and total owners' equity was **571 million Yuan** Parent Company Balance Sheet Key Data | Item | June 30, 2020 (Yuan) | December 31, 2019 (Yuan) | | :--- | :--- | :--- | | Total Assets | 1,738,685,470.81 | 2,009,743,654.42 | | Total Current Assets | 96

Financial Performance - The company's operating revenue for Q1 2020 was ¥581,980,692.45, representing a 3.35% increase compared to ¥563,107,016.62 in the same period last year[7] - Net profit attributable to shareholders was ¥123,528,356.46, up 9.59% from ¥112,715,689.10 year-on-year[7] - The net profit after deducting non-recurring gains and losses was ¥122,629,254.44, reflecting a 9.34% increase from ¥112,156,298.86 in the previous year[7] - Basic and diluted earnings per share decreased by 15.96% to ¥0.79 from ¥0.94 year-on-year[7] - Total operating revenue for Q1 2020 was CNY 581,980,692.45, an increase of 3.3% compared to CNY 563,107,016.62 in Q1 2019[33] - Net profit for Q1 2020 reached CNY 123,528,356.46, representing a 12.0% increase from CNY 109,730,202.59 in Q1 2019[35] - The company reported a total comprehensive income of CNY 123,528,356.46 for Q1 2020, compared to CNY 112,715,689.10 in Q1 2019, an increase of 9.4%[40] Cash Flow - The net cash flow from operating activities was -¥228,918,446.14, a decline of 10.66% compared to -¥206,867,978.13 in the same period last year[7] - Net cash flow from investing activities decreased by 110.06% year-over-year, mainly due to project deposit payments made during the reporting period[14] - Net cash flow from financing activities increased by 116.64% compared to the same period last year, as the company repaid a significant amount of short-term loans in the previous year[14] - The net cash flow from operating activities for Q1 2020 was -CNY 228,918,446.14, worsening from -CNY 206,867,978.13 in Q1 2019[43] - Investment activities generated a net cash outflow of -CNY 52,953,644.95 in Q1 2020, compared to -CNY 25,208,437.37 in the previous year[43] - The net cash flow from financing activities was 12,499,301.68 CNY, a recovery from -74,588,847.82 CNY in the previous period, showing improved financing conditions[47] Assets and Liabilities - Total assets at the end of the reporting period were ¥1,877,572,963.17, down 6.81% from ¥2,014,852,191.88 at the end of the previous year[7] - The company's total assets decreased to CNY 1,879,229,006.68 as of March 31, 2020, down from CNY 2,009,743,654.42 at the end of 2019[30] - The company's total liabilities decreased to CNY 1,247,658,959.65, down from CNY 1,500,407,201.68 at the end of 2019[31] - The total liabilities amounted to 1,378,725,547.46 CNY, consistent with the previous period, reflecting stable financial obligations[50] Shareholder Equity - Net assets attributable to shareholders increased by 19.85% to ¥762,411,196.88 from ¥636,126,644.42 at the end of the previous year[7] - The company's equity attributable to shareholders rose to CNY 762,411,196.88, up from CNY 636,126,644.42 at the end of 2019, reflecting a growth of 19.8%[30] Expenses - Total operating costs for Q1 2020 were CNY 436,008,921.49, up from CNY 416,352,063.74 in the same period last year, reflecting a year-on-year increase of 4.0%[34] - Financial expenses rose by 94.72% year-over-year, attributed to increased interest expenses from the issuance of a specific asset-backed plan[14] - Research and development expenses increased by 104.24% compared to the same period last year, reflecting a significant increase in investment in R&D projects[14] - Financial expenses rose to CNY 10,822,288.18 in Q1 2020, up from CNY 5,169,263.71 in Q1 2019, indicating a significant increase of 109%[39] Inventory and Receivables - Accounts receivable increased by 48.69% from December 31, 2019, to March 31, 2020, mainly due to the recognition of fuel subsidies during the heating period, with the government not fully disbursing the funds[14] - Inventory decreased by 59.63% from December 31, 2019, to March 31, 2020, as the company reduced its natural gas reserves following the end of the 2019-2020 heating season[14] Taxation - Tax payable increased by 175.79% from December 31, 2019, to March 31, 2020, primarily due to the accrual of corporate income tax for the first quarter[14] - Deferred income tax liabilities rose by 46.64% from December 31, 2019, to March 31, 2020, due to temporary differences arising from recognized fuel subsidy income not yet received[14] Accounting Changes - The company implemented new revenue and leasing standards starting January 1, 2020, which may impact future financial reporting and performance metrics[51] - The company reported a significant adjustment in accounting practices due to the new revenue recognition standards effective from January 1, 2020, impacting the classification of advance payments[55] - The first quarter report for 2020 was not audited, indicating that the figures may be subject to change upon final audit[56]

Financial Performance - The company's operating revenue for 2019 was approximately ¥919.53 million, a decrease of 4.81% compared to ¥966.02 million in 2018[29]. - The net profit attributable to shareholders for 2019 was approximately ¥47.26 million, an increase of 10.60% from ¥42.73 million in 2018[29]. - The net cash flow from operating activities increased by 33.18% to approximately ¥205.24 million in 2019, compared to ¥154.10 million in 2018[29]. - The total assets at the end of 2019 were approximately ¥2.01 billion, reflecting a growth of 9.06% from ¥1.85 billion at the end of 2018[29]. - The net assets attributable to shareholders at the end of 2019 were approximately ¥636.13 million, a slight increase of 1.68% from ¥625.63 million at the end of 2018[29]. - The basic earnings per share for 2019 was ¥0.30, down 16.67% from ¥0.36 in 2018[29]. - The weighted average return on equity for 2019 was 7.56%, an increase from 6.85% in 2018[29]. - The company reported a total revenue of 1.2 billion RMB for the year 2019, representing a year-over-year increase of 15%[55]. - The gross margin for the year was reported at 35%, a slight increase from 33% in the previous year, indicating improved operational efficiency[56]. - The company achieved operating revenue of 920 million yuan and a net profit of 47.26 million yuan, representing a year-on-year growth of 10.6%[69]. Cash Flow and Investments - The company reported a significant cash outflow in the first quarter of 2019, with a net cash flow from operating activities of approximately -¥206.87 million[33]. - Operating cash inflow decreased by 2.49% to ¥1,017,677,354.90, while operating cash outflow decreased by 8.67% to ¥812,440,975.16, resulting in a net cash flow from operating activities of ¥205,236,379.74, up 33.18%[89]. - Investment cash inflow surged by 184.85% to ¥1,214,477,408.75, while investment cash outflow increased by 162.98% to ¥1,416,623,633.55, leading to a net cash flow from investment activities of -¥202,146,224.80[89]. - Financing cash inflow rose by 16.34% to ¥731,123,015.68, with financing cash outflow increasing by 14.70% to ¥613,719,817.83, resulting in a net cash flow from financing activities of ¥117,403,197.85, up 25.72%[89]. Dividend Distribution - The company plans to distribute cash dividends of 1 RMB per 10 shares and increase capital by 3 shares for every 10 shares held[15]. - In 2019, the company distributed cash dividends of 1.00 RMB per 10 shares, totaling 15,974,920 RMB, which represents 33.80% of the net profit attributable to shareholders[111]. - The proposed dividend plan includes a cash dividend of RMB 1.00 per 10 shares and a capital reserve increase of 3 shares for every 10 shares held, based on a total share capital of 159,749,200 shares[116]. - The cash dividend amount is fully distributed from the company's distributable profits, with no other forms of cash dividends such as share buybacks[116]. - The company plans to maintain a cash dividend policy where the cash dividend proportion should reach at least 80% during profit distribution when in a mature development stage without significant capital expenditure arrangements[126]. Technological Innovation and R&D - The company emphasizes ongoing technological innovation to maintain competitive advantages in the heating industry[11]. - The company has developed multiple core technologies in energy-saving heating, including flue gas waste heat recovery and intelligent heating control systems, contributing to national energy conservation efforts[41][42]. - The company has a strong focus on research and development, as evidenced by its extensive patent portfolio and ongoing innovation efforts[51]. - The company has invested 50 million RMB in R&D for new technologies aimed at improving energy efficiency, with expected completion by Q3 2020[55]. - The company has a diverse portfolio of patents related to energy efficiency and environmental sustainability, aligning with market trends towards greener technologies[51]. Market Expansion and Strategic Initiatives - The company plans to expand its market presence by entering three new provinces in 2020, aiming for a 20% increase in market share[55]. - The company is exploring potential acquisitions of smaller tech firms to enhance its product offerings and technological capabilities[55]. - A strategic partnership with a leading technology firm is expected to boost the company's innovation capabilities and market reach[56]. - The company aims to enhance its product offerings and market presence through continuous technological advancements and strategic initiatives[52]. Regulatory and Compliance - The company has received a high-tech enterprise certificate, allowing a reduced corporate income tax rate of 15% from 2019 to 2021[15]. - The company emphasizes compliance with legal regulations and internal procedures regarding related party transactions to protect its interests[130]. - The company has established a commitment to transparency in disclosing related party transactions in accordance with relevant laws and regulations[128]. Social Responsibility and Community Engagement - The company actively engaged in social responsibility initiatives, including poverty alleviation programs in rural areas[73]. - The company is committed to environmental protection and adheres to the emission standards set by the relevant authorities, with a total emission of 1687.6 tons per year[177]. - The company is dedicated to providing a good working environment and benefits for its employees, promoting mutual growth[173]. - The company has established partnerships with specific villages to ensure effective poverty alleviation strategies[174]. Risks and Challenges - The company faces risks related to government pricing policies for heating, which can directly affect profitability if not adjusted timely[5]. - The company has experienced pressure on profitability due to stable residential heating prices amidst rising fuel costs[6]. - The company faced challenges due to the COVID-19 pandemic, impacting heating service operations and financial pressures, but plans to enhance management efficiency and digital transformation[104].

Financial Performance - Operating revenue for the reporting period was CNY 7,130,288.09, down 45.17% year-on-year[8] - Net profit attributable to shareholders was a loss of CNY 39,048,050.92, a decrease of 20.40% compared to the same period last year[8] - Basic earnings per share were -CNY 0.24, reflecting an increase of 11.11% compared to the previous year[8] - The weighted average return on equity was -6.11%, a decrease of 0.80% year-on-year[8] - Total operating revenue for Q3 2019 was CNY 7,130,288.09, a decrease of 45% compared to CNY 13,004,432.04 in the same period last year[41] - Net profit for Q3 2019 was a loss of CNY 39,048,050.92, compared to a loss of CNY 34,511,763.13 in Q3 2018, reflecting a decline in profitability[42] - The total comprehensive income for the period was CNY -39,048,050.92, compared to CNY -32,431,066.89 in the previous year[43] - The net loss for Q3 2019 was CNY 37,469,299.44, compared to a net loss of CNY 31,656,634.74 in Q3 2018, reflecting a deterioration of 18.4%[46] - The company's total revenue from January to the end of the reporting period was CNY 576,715,584.21, a slight decrease from CNY 590,099,139.21 in the previous year[47] Assets and Liabilities - Total assets at the end of the reporting period were CNY 1,680,801,145.92, a decrease of 9.02% compared to the end of the previous year[8] - Current assets decreased to CNY 712,250,890.78 from CNY 995,568,333.24, indicating a decline of approximately 28.5%[32] - Total liabilities decreased to CNY 1,059,905,861.05 from CNY 1,209,688,011.40, a reduction of about 12.4%[33] - Non-current assets increased to CNY 968,550,255.14 from CNY 851,953,848.27, an increase of about 13.7%[32] - Total assets as of September 30, 2019, were CNY 1,677,647,865.98, down from CNY 1,822,203,314.17 at the end of 2018[39] - Total liabilities decreased to CNY 1,184,833,528.51 from CNY 1,328,078,060.11, showing a reduction in financial obligations[38] - The company's equity attributable to shareholders was CNY 620,895,284.87, slightly down from CNY 625,627,271.89 at the end of 2018[39] Cash Flow - The net cash flow from operating activities was CNY 165,205,596.03, an increase of 5.41% year-on-year[8] - Cash and cash equivalents decreased by 66.60% to ¥173,872,113.38 from ¥520,523,784.53 due to seasonal collection of heating fees[16] - The net cash flow from operating activities was -173,448,122.70 CNY, compared to 156,343,002.23 CNY in the previous period, indicating a significant decline in operational cash generation[61] - Cash inflow from financing activities was 326,485,285.00 CNY, compared to 10,000,000.00 CNY in the previous period, reflecting a strong increase in financing[62] - The ending cash and cash equivalents balance was 331,732,044.63 CNY, down from 391,242,579.02 CNY year-over-year[62] Shareholder Information - The total number of shareholders at the end of the reporting period was 20,888[12] - The largest shareholder, Zhao Yibo, holds 27.69% of the shares, amounting to 44,050,266 shares, with 32,717,000 shares pledged[12] Government Subsidies and Other Income - The company received government subsidies amounting to CNY 1,724,119.48 during the reporting period[9] - The company reported a significant increase in other income by 94.61% to ¥22,625,538.82 from ¥11,626,382.53 due to government subsidies[17] - The company reported other income of CNY 21,786,354.12, which is an increase from CNY 10,540,669.26 in the previous period, indicating a growth of about 106.0%[53] Expenses - Management expenses increased by 30.49% to ¥55,739,183.17 from ¥42,714,833.35 mainly due to the recognition of stock option expenses[17] - Financial expenses rose by 45.01% to ¥23,500,454.89 from ¥16,206,585.52 due to increased interest expenses from the asset-backed securities issuance[17] - The company reported a financial expense of CNY 10,004,436.69 in Q3 2019, significantly higher than CNY 5,332,784.18 in Q3 2018, marking an increase of 87.5%[44] Investment Activities - The company plans to acquire 70% of HeRan Energy Co., Ltd. through its subsidiary, with a transaction price of ¥47,600,000[19][20] - The company received a restructuring inquiry from the Shenzhen Stock Exchange, requesting additional information regarding the acquisition[21] - The company reported a total investment payment of 849,565,507.47 CNY, significantly higher than 173,200,000.00 CNY in the previous period[61]

Financial Performance - The company's operating revenue for the reporting period was RMB 569,585,296.12, a decrease of 1.30% compared to the same period last year [30]. - Net profit attributable to shareholders increased by 39.16% to RMB 70,498,858.19, compared to RMB 50,659,834.09 in the previous year [30]. - The net profit after deducting non-recurring gains and losses was RMB 67,304,027.05, reflecting a growth of 35.28% year-on-year [30]. - The basic earnings per share rose by 30.95% to RMB 0.55, up from RMB 0.42 in the same period last year [30]. - Total assets decreased by 14.44% to RMB 1,580,776,909.96 compared to the end of the previous year [30]. - The net assets attributable to shareholders increased by 5.13% to RMB 657,711,439.79 [30]. - Cash flow from operating activities improved by 26.14%, with a net outflow of RMB 209,249,494.06, compared to RMB 283,318,632.45 in the previous year [30]. - The company reported a significant decrease in prepayments from CNY 14,735,388.40 to CNY 5,181,857.32, a decline of approximately 64.8% [141]. - The company reported a profit distribution of 12,000,000.00 to shareholders during the current period [170]. Investment and Acquisition Plans - The company is currently undergoing a due diligence process for a potential acquisition of a 70% stake in He Ran Energy Co., which may constitute a major asset restructuring [17]. - The company plans to acquire 70% of HeRan Limited, marking its entry into the Inner Mongolia market and expanding its heating methods to include urban centralized heating [49]. - The company plans to acquire 70% equity of HeRan Energy Co., Ltd. from Sanming Sha County Xiaofei Enterprise Management Service Partnership for a cash and debt assumption deal [113]. - The company is actively seeking acquisition opportunities in the energy-saving sector and exploring new energy heating methods to enhance profitability [81]. Operational Efficiency and Cost Management - The company reported a decrease in operating costs by 8.66% to CNY 431.77 million, attributed to energy efficiency improvements and better internal cost management [53]. - The company has implemented energy-saving technologies, leading to a reduction in operational costs and an increase in profits from government subsidies for low-nitrogen modifications [73]. - The company aims to enhance management efficiency and control costs while implementing performance management and energy-saving production strategies [81]. - The company has established performance assessment indicators and incentive measures to monitor energy usage and improve operational efficiency [111]. Risks and Challenges - The company faces risks related to government pricing policies, which can directly affect profitability if fuel prices rise without corresponding adjustments in heating fees [8]. - The company is subject to risks from potential changes in fiscal subsidy policies that could adversely affect profitability if not adjusted to market conditions [9]. - The company faces risks from changes in industry policies, particularly regarding heating pricing and government subsidies, which could impact profitability [74]. - The company relies heavily on natural gas as a raw material, and fluctuations in gas prices could affect cash flow and profitability if subsidy policies change [75]. Technological Innovation and Development - The company has a strong focus on technological innovation but faces risks of losing competitive advantages due to rapid advancements in energy technologies [13]. - The company has focused on energy-saving technology research and development, aiming to enhance energy efficiency and environmental quality [38]. - The company is committed to continuous technological innovation to maintain its competitive edge in the heating industry [76]. Shareholder and Management Changes - The company’s board of directors saw several changes, including the election of new directors and the resignation of others during the reporting period [134]. - Li He was appointed as the general manager on August 27, 2019, following a board meeting [133]. - The total number of shareholders at the end of the reporting period was 19,260 [124]. Compliance and Regulatory Matters - The company adheres to the Beijing DB11/139-2015 emission standards for boiler air pollutants, ensuring compliance with environmental regulations [110]. - The company has not experienced any major litigation or arbitration matters during the reporting period [88]. - There were no violations regarding external guarantees during the reporting period, reflecting compliance with regulatory standards [107]. Cash Flow and Liquidity - The company's operating cash flow for the first half of 2019 was negative at -¥209.25 million, an improvement from -¥283.32 million in the first half of 2018 [160]. - The ending balance of cash and cash equivalents was 121,595,971.37 CNY, down from 510,925,875.59 CNY at the beginning of the period, indicating liquidity challenges [164]. - The company’s cash and cash equivalents decreased by 389,329,904.22 CNY during the period, highlighting ongoing liquidity pressures [164]. Environmental and Social Responsibility - The company has implemented energy-saving measures to control gas, water, and electricity consumption during heating services [111]. - The company’s environmental protection facilities are operating well, and the main pollutants emitted are within national environmental protection requirements [111]. - The company has not yet initiated targeted poverty alleviation efforts and has no plans for such initiatives in the near future [112].

Financial Performance - The company's revenue for Q1 2019 was CNY 563,107,016.62, representing a 1.56% increase compared to CNY 554,470,351.10 in the same period last year[7]. - Net profit attributable to shareholders was CNY 112,715,689.10, a 31.57% increase from CNY 85,670,492.87 year-over-year[7]. - Basic earnings per share increased by 32.39% to CNY 0.94 from CNY 0.71 in the previous year[7]. - The net profit for the first half of 2019 is expected to be between 6,585.77 million and 7,598.97 million RMB, representing a year-on-year increase of over 50%[17]. - The net profit for the first half of 2018 was 5,065.98 million RMB, indicating a significant growth trajectory[18]. - The net profit for Q1 2019 reached CNY 109,730,202.59, compared to CNY 83,296,761.01 in Q1 2018, marking an increase of about 31.9%[37]. - The net profit for the current period is ¥110,573,448.53, up from ¥86,802,076.42 in the previous period, representing an increase of about 27.5%[40]. - The total profit for the current period is ¥149,788,467.82, compared to ¥115,728,697.11 in the previous period, indicating a growth of approximately 29.4%[40]. Assets and Liabilities - The total assets decreased by 16.95% to CNY 1,534,286,860.16 from CNY 1,847,522,181.51 at the end of the previous year[7]. - As of March 31, 2019, total assets amounted to 1,534,286,860.16 RMB, down from 1,847,522,181.51 RMB at the end of 2018[27]. - The company's total assets decreased to CNY 1,529,006,586.01 as of March 31, 2019, down from CNY 1,822,203,314.17 at the end of 2018, reflecting a decline of approximately 16.1%[34]. - Current assets decreased to 695,969,214.17 RMB from 995,568,333.24 RMB at the end of 2018[27]. - Total liabilities as of March 31, 2019, were 802,205,784.51 RMB, compared to 1,209,688,011.40 RMB at the end of 2018[28]. - Total liabilities decreased to CNY 936,563,562.04 from CNY 1,328,078,060.11, representing a decline of approximately 29.5%[33]. - The total liabilities were ¥1,067,542,135.63, remaining stable compared to the previous year[51]. - Total liabilities amounted to CNY 1,328,078,060.11, with current liabilities at CNY 1,192,105,928.76[53]. Shareholders' Equity - The net assets attributable to shareholders increased by 15.55% to CNY 722,894,903.95 from CNY 625,627,271.89 at the end of the previous year[7]. - The company's equity attributable to shareholders increased to 722,894,903.95 RMB from 625,627,271.89 RMB at the end of 2018[29]. - Shareholders' equity totaled CNY 494,125,254.06, reflecting a decrease of CNY 14,368,374.62 compared to the previous period[54]. - The total equity attributable to shareholders of the parent company was CNY 625,627,271.89, a decrease of CNY 17,560,753.04[54]. Cash Flow - Cash flow from operating activities improved by 16.79%, with a net outflow of CNY 206,867,978.13 compared to CNY 248,599,668.64 in the previous year[7]. - The cash flow from operating activities shows a net outflow of ¥206,867,978.13, an improvement from a net outflow of ¥248,599,668.64 in the previous period[44]. - The cash flow from investing activities resulted in a net outflow of ¥25,208,437.37, slightly better than the previous period's outflow of ¥26,881,393.22[45]. - The cash flow from financing activities recorded a net outflow of ¥74,733,354.48, worsening from a net outflow of ¥17,184,502.78 in the previous period[45]. - The net cash flow from operating activities was -¥202,071,183.09, an improvement from -¥246,606,098.45 in the previous year, indicating a 18% reduction in cash outflow[48]. - The total cash and cash equivalents at the end of the period stand at ¥212,776,913.55, compared to ¥91,762,516.89 at the end of the previous period, showing a significant increase[45]. - The total cash and cash equivalents at the end of the period was ¥209,566,748.47, down from ¥510,925,875.59 at the beginning of the period, reflecting a decrease of 59%[49]. Operational Efficiency - The company has implemented energy-saving technologies, leading to a decrease in operational costs and improved energy efficiency[18]. - The gross profit margin improved, with total operating costs decreasing to CNY 421,801,235.79 from CNY 445,192,872.18, a reduction of about 5.2%[35]. - The company reported a significant increase in research and development expenses to CNY 1,084,702.94 from CNY 916,434.62, an increase of about 18.3%[35]. - The company has shown a decrease in sales expenses to ¥776,330.08 from ¥682,183.81, reflecting a strategic focus on cost management[39]. Government Subsidies - Other income increased by 120.74% year-over-year, attributed to increased government subsidies[15]. - The company received government subsidies for low-nitrogen transformation, contributing to increased profits[18]. - The company reported other income of ¥5,465,806.71, up from ¥2,478,517.50 in the previous period, marking an increase of approximately 120.1%[39]. Shareholder Information - The number of ordinary shareholders at the end of the reporting period was 17,853[11]. - The company has not reported any overdue commitments from major shareholders or related parties during the reporting period[20]. - There were no violations regarding external guarantees during the reporting period[19].

Financial Performance - The company's operating revenue for 2018 was CNY 966,018,469.25, representing a 5.56% increase compared to CNY 915,122,262.52 in 2017[27]. - The net profit attributable to shareholders for 2018 was CNY 42,732,482.97, a decrease of 18.16% from CNY 52,213,113.77 in 2017[27]. - The net profit after deducting non-recurring gains and losses was CNY 34,649,227.68, down 30.53% from CNY 49,878,065.06 in the previous year[27]. - The net cash flow from operating activities increased by 39.91% to CNY 154,099,411.14 from CNY 110,143,381.55 in 2017[27]. - The total assets at the end of 2018 were CNY 1,847,522,181.51, an increase of 8.72% from CNY 1,699,335,463.63 at the end of 2017[27]. - The net assets attributable to shareholders increased by 5.42% to CNY 625,627,271.89 from CNY 593,443,572.69 in 2017[27]. - The basic earnings per share for 2018 was CNY 0.36, a decrease of 33.33% from CNY 0.54 in 2017[27]. - The weighted average return on equity was 6.85%, down from 11.00% in the previous year, reflecting a decrease of 4.15%[27]. - The company reported a significant increase in revenue, achieving a total of 1.2 billion RMB for the fiscal year, representing a growth of 15% year-over-year[55]. - The company reported a total revenue of 24,464,709.8 for its subsidiary, Yuantong Energy Saving, with a net profit of 4,223,729.91[105]. Dividend and Profit Distribution - The company has implemented a profit distribution plan, proposing a cash dividend of 2.00 yuan per 10 shares and a capital reserve increase of 3 shares for every 10 shares held[14]. - The cash dividend for 2018 was set at 2.00 RMB per 10 shares, totaling 24,596,000 RMB, which represents 57.56% of the net profit attributable to shareholders[114]. - The company plans to maintain a cash dividend policy where the minimum proportion of cash dividends should reach 80% during profit distribution if it is in a mature stage without significant capital expenditure arrangements[120]. - In the past three years, the cumulative cash dividends distributed by the company should not be less than 30% of the average annual distributable profits achieved during that period[120]. Market and Operational Strategy - The company has successfully acquired 100% equity of Shenyang Jianyuan Heating Co., marking its entry into the Northeast market, which is expected to positively impact its operational results[35]. - The company is expanding its market presence by entering three new provinces, aiming to increase its market share by 10% in these regions[55]. - A strategic acquisition of a local competitor was completed, which is expected to enhance the company's technological capabilities and increase market penetration by 15%[56]. - The company plans to enhance its smart management capabilities and expand the application of its intelligent heating systems in 2019[107]. - The company aims to leverage its listing platform to promote market expansion through investments and acquisitions, enhancing its competitive advantage in the national heating market[107]. Technological Innovation and R&D - The company has been proactive in technological innovation, but there is a risk of losing competitive advantage due to rapid advancements in energy technology and materials[11]. - The company holds 15 registered trademarks, 62 patents, and 60 software copyrights, indicating a strong commitment to innovation and technology[37]. - The company has developed several new technologies, including an energy management online monitoring platform and a new heat pump system[57]. - The company has invested 200 million RMB in R&D for new energy-saving technologies, aiming to launch two new products by the end of the next fiscal year[55]. - The company has reported a commitment to continuous innovation, with several patents filed for advanced heating and monitoring systems[52]. Regulatory and Compliance Risks - The company is subject to regulatory risks, including potential changes in tax incentives that could adversely affect its financial performance[13]. - The company has established a decision-making system for related party transactions to protect its interests[121]. - The company aims to maintain compliance with legal and regulatory requirements in all its operations[121]. - The company has not reported any major contracts or significant events related to its subsidiaries during the reporting period[153][159]. Safety and Environmental Management - The company has a strong focus on safety management to mitigate risks associated with boiler operations and gas transportation, which are critical for operational stability[9]. - The company emphasizes energy conservation and environmental protection, adhering to the ISO14001 environmental management system and continuously improving its environmental management practices[155][157]. - The company has maintained a zero-accident safety record throughout the year, achieving re-certification for safety production standards[70]. Shareholder and Governance Matters - The company has a stock price stabilization plan that activates if the stock price falls below the net asset value for 20 consecutive trading days[122]. - The controlling shareholder has committed to not engaging in any competing business activities, ensuring no conflict of interest[121]. - The company has a total of 15 board members and supervisors listed in the report[200]. - The company’s management structure includes a mix of independent and executive directors[200]. - The total remuneration for the board of directors and senior management during the reporting period was fully paid as per regulations[198].

Financial Performance - Operating revenue for the period was CNY 13,004,432.04, an increase of 17.48% year-on-year[8] - Net profit attributable to shareholders was a loss of CNY 32,431,066.89, a decrease of 23.51% compared to the same period last year[8] - The net profit attributable to shareholders after deducting non-recurring gains and losses was a loss of CNY 33,156,622.75, a decrease of 22.01% year-on-year[8] - Basic earnings per share were -CNY 0.27, a decrease of 42.55% year-on-year[8] - The weighted average return on net assets was -5.31%, a decrease of 5.43% compared to the previous year[8] - The estimated net profit attributable to shareholders for 2018 is expected to range from 36.55 million to 60.05 million CNY, reflecting a change of -30.00% to 15.00% compared to 2017's net profit of 52.21 million CNY[18] Asset Management - Total assets decreased by 18.24% to CNY 1,389,445,725.48 compared to the end of the previous year[8] - Other current assets increased by 134.05% compared to the beginning of the year due to an increase in short-term financial products[16] - Construction in progress increased by 90.15% compared to the beginning of the year due to new heating construction investment projects[16] - Prepayments decreased by 55.67% compared to the beginning of the year due to lower pre-collection of heating fees during the peak collection period[16] Cash Flow - The net cash flow from operating activities was CNY 156,726,444.25, an increase of 0.84% compared to the same period last year[8] Compliance and Governance - The company has no violations regarding external guarantees during the reporting period[19] - There are no non-operating fund occupations by controlling shareholders or related parties during the reporting period[20] Financial Management - The total amount of entrusted financial management is 223.2 million CNY, with an unexpired balance of 93.2 million CNY[22] - All entrusted financial management is sourced from the company's own funds, with no overdue amounts[22] Company Activities - The company did not engage in any research, communication, or interview activities during the reporting period[23] External Factors - The increase in depreciation due to the low-nitrogen transformation of boiler equipment mandated by the Beijing government in 2017 is cited as a reason for the performance fluctuation[18]

Financial Performance - The company's operating revenue for the first half of 2018 was approximately CNY 577.09 million, representing a 7.21% increase compared to CNY 538.31 million in the same period last year[29]. - The net profit attributable to shareholders decreased by 34.36% to CNY 50.66 million from CNY 77.18 million year-on-year[29]. - The basic earnings per share dropped by 51.16% to CNY 0.42 from CNY 0.86 in the previous year[29]. - The net cash flow from operating activities was negative at CNY -283.32 million, worsening by 24.26% compared to CNY -228.01 million in the same period last year[29]. - Total assets decreased by 20.01% to CNY 1.36 billion from CNY 1.70 billion at the end of the previous year[29]. - The net assets attributable to shareholders increased by 6.52% to CNY 632.14 million from CNY 593.44 million at the end of the previous year[29]. - The weighted average return on net assets fell to 8.06%, down by 9.46% from 17.52% in the previous year[29]. - The company reported a non-operating income of CNY 1.03 million from entrusted investment or asset management[34]. - The company received government subsidies amounting to CNY 49,479.17, which are closely related to its business operations[33]. Cost and Pricing Challenges - The company reported a significant reliance on natural gas as a primary raw material, which constitutes a high proportion of total costs, impacting cash flow during the heating season due to procurement expenses[9]. - The company is subject to government pricing policies for heating services, which can affect profitability if fuel prices rise without corresponding adjustments in heating charges[8]. - The company has emphasized the importance of government subsidies in mitigating the impact of fluctuating fuel prices on its operations, which could be affected by future policy changes[9]. - The company acknowledges the potential risks associated with changes in industry policies and regulations that could impact operational costs and pricing strategies[6]. - The company faces risks related to changes in industry policies, which can directly impact heating pricing and profitability[84]. - The company is exposed to financial subsidy risks, particularly regarding the stability of heating prices amid rising fuel costs[85]. - The company's raw material costs are significantly affected by natural gas prices, which constitute a large portion of total costs[86]. Operational and Strategic Initiatives - The company has implemented a compensation mechanism for fuel subsidies in response to rising energy prices, which is crucial for maintaining profitability in the heating sector[8]. - The company has emphasized technological innovation and development in heating technology, maintaining a competitive edge in the industry, but faces risks of losing this advantage due to rapid advancements in energy technologies[12]. - The company has established strategic partnerships with several well-known real estate and property companies, enhancing its brand advantage in the heating sector[42]. - The company has developed advanced energy-saving technologies, including a high-efficiency low-temperature flue gas condensation heat recovery technology, which won a national invention award[40]. - The company holds 51 patents and 15 registered trademarks, showcasing its commitment to innovation in energy-saving technologies[41]. - The company has implemented energy management projects that are exempt from business tax and VAT for the first three years of operation, with a 50% reduction in corporate income tax for the next three years[7]. - The company plans to control costs and improve management efficiency to maintain stable business growth while effectively controlling expenses[7]. - The company aims to accelerate technological innovation by applying advanced energy-saving technologies to enhance profitability and industry leadership[7]. - The company is focusing on expanding into external markets with energy-saving potential and strong profitability[7]. Market and Expansion Activities - The company successfully acquired 100% equity of Shenyang Jianyuan Heating Co., Ltd., marking its entry into the Shenyang market and expanding its strategic layout in Northeast China[50]. - The company's heating area reached 27 million square meters as of June 30, 2018[50]. - The company has no significant plans for new product development or market expansion mentioned in the report[24]. - The company plans to focus on new product development and market expansion strategies in the upcoming quarters[163]. Financial Management and Investments - The total amount of raised funds is CNY 217,614,500, with a net amount of CNY 217,614,500 after deducting issuance costs[69]. - The company has committed to invest CNY 10,000,000 in the heating operation expansion project, with 100% of the investment completed[72]. - The energy-saving renovation project has a committed investment of CNY 8,000,000, with 100% of the investment completed[72]. - The research and development center project has a committed investment of CNY 1,000,000, with no investment completed[72]. - The company has committed CNY 2,761,450 for working capital, with 100% of the investment completed[72]. - The company has not invested any of the raised funds during the reporting period[69]. - There were no changes in the use of raised funds during the reporting period[69]. - The company has not engaged in any securities or derivative investments during the reporting period[66][67]. Shareholder and Equity Information - The total number of ordinary shareholders at the end of the reporting period is 19,368[139]. - Major shareholder Zhao Yibo holds 28.24% of the shares, totaling 33,884,820 shares[139]. - Major shareholder Chen Xiuming holds 22.25% of the shares, totaling 26,705,610 shares[139]. - The total number of shares is 120,000,000, with 75% being limited sale shares[136]. - The number of shares held by domestic natural persons is 68,745,510, accounting for 57.29%[136]. - The number of shares held by domestic legal persons is 21,254,490, accounting for 17.71%[136]. - The company has not experienced any changes in its controlling shareholder during the reporting period[141]. - There are no preferred shares in the company during the reporting period[144]. - The company’s board members and senior management did not change their shareholdings during the reporting period[146]. - The company has not conducted any repurchase transactions among the top shareholders during the reporting period[140]. Risk Management and Compliance - The company is exposed to risks related to safety in production, particularly concerning boiler operations and gas transportation, which are critical for operational stability[10]. - The company emphasizes safety production management due to risks associated with high-temperature water boiler operations and natural gas transportation[88]. - The company acknowledges the risk of seasonal business fluctuations, with revenue primarily concentrated in the first and fourth quarters[90]. - The company has not experienced any major litigation or arbitration matters during the reporting period[106]. - The company has no significant related party transactions during the reporting period[109]. - The company has not undergone any bankruptcy restructuring during the reporting period[105]. - The company reported no external guarantees during the reporting period, with a total approved guarantee amount of 0[119]. - The total approved guarantee amount for subsidiaries was 1,450,000, with an actual guarantee balance of 70,000 at the end of the reporting period[119]. - The actual total guarantee amount accounted for 0.11% of the company's net assets[119]. - The company has no violations regarding external guarantees during the reporting period[120]. - The company does not belong to the key pollutant discharge units as per environmental protection department announcements[122]. - The company implements effective measures to control gas, water, and electricity consumption in its heating service operations[125]. Community Engagement and Social Responsibility - The company actively participates in the "Ten Thousand Enterprises Help Ten Thousand Villages" poverty alleviation initiative[127]. - The company has established connections with two poverty-stricken villages and developed assistance plans[129].