披露日期：2019 年 10 月 22 日 1 杭州华星创业通信技术股份有限公司 2019 年第三季度报告全文 杭州华星创业通信技术股份有限公司 2019 年第三季度报告 杭州华星创业通信技术股份有限公司 Hangzhou Huaxing Chuangye Communication Technology Co.,Ltd. 2019 年第三季度报告 证券代码：300025 证券简称：华星创业 第一节 重要提示 公司董事会、监事会及董事、监事、高级管理人员保证季度报告内容的真 实、准确、完整，不存在虚假记载、误导性陈述或者重大遗漏，并承担个别和 连带的法律责任。 所有董事均已出席了审议本次季报的董事会会议。 公司负责人朱定楷、主管会计工作负责人李振国及会计机构负责人(会计主 管人员)曹波兰声明：保证季度报告中财务报表的真实、准确、完整。 2 杭州华星创业通信技术股份有限公司 2019 年第三季度报告全文 第二节 公司基本情况 一、主要会计数据和财务指标 公司是否需追溯调整或重述以前年度会计数据 □ 是 √ 否 | | 本报告期末 | 上年度末 | | 本报告期末比上年度末增减 | | --- | --- | - ...

Revenue and Profitability - In the first half of 2019, the company's revenue from China Mobile and its subsidiaries accounted for 36.95% of total revenue, compared to 30.29% in 2018[7]. - Total revenue for the reporting period was ¥532,863,081.23, a decrease of 16.21% compared to the same period last year[27]. - Net profit attributable to shareholders was ¥3,444,733.07, representing a significant increase of 111.04% year-on-year[27]. - The company's operating revenue for the first half of 2019 was ¥132.34 million, a decrease of 22.8% compared to ¥171.36 million in the same period of 2018[154]. - The net profit for the first half of 2019 was ¥2.98 million, a significant recovery from a net loss of ¥47.23 million in the first half of 2018[155]. - The total comprehensive income for the first half of 2019 was ¥3.00 million, compared to a loss of ¥47.32 million in the same period of 2018[152]. - The company reported a net loss of 30,000 million yuan during the period, indicating a significant decline in profitability[170]. - The total revenue for the first half of 2019 was 741.39 million yuan, down from the previous year's figure[169]. Cash Flow and Financial Position - The company's cash flow from operating activities was negative at ¥-38,169,284.58, a decline of 1,926.69% compared to the previous year[27]. - The net cash flow from operating activities for the first half of 2019 was -38,169,284.58 CNY, a significant decline compared to 2,089,535.53 CNY in the same period of 2018, indicating a negative performance trend[159]. - Cash inflow from financing activities increased to 342,400,000.00 CNY in 2019 from 371,533,895.83 CNY in 2018, showing a decrease of about 7.5%[160]. - The ending cash and cash equivalents balance as of the end of the first half of 2019 was 112,756,680.02 CNY, compared to 96,570,252.91 CNY at the end of the first half of 2018, reflecting an increase of approximately 16.7%[160]. - The company reported a significant decrease in cash received from sales of goods and services, which fell to 521,911,283.27 CNY in 2019 from 769,528,211.87 CNY in 2018, a decline of about 32.3%[157]. Investments and Research & Development - The company invested RMB 22.20 million in R&D, a decrease of 27.64% year-on-year, reflecting the exclusion of certain subsidiaries from the consolidation[48]. - The company is committed to continuous research and development to keep up with technological advancements in the industry[76]. - The company plans to invest 100 million RMB in research and development for innovative technologies over the next fiscal year[191]. - The company has made significant investments in research and development, focusing on new technologies and products[166]. Operational Challenges and Risks - The company recognizes the risk of management challenges due to its rapid growth and extensive service coverage across the country[9]. - The company is aware of the risks associated with potential investment and acquisition projects not meeting expected returns[12]. - The company faces risks from market competition, as the third-party mobile communication technology service industry is highly competitive, potentially affecting profitability[76]. - The company has a financial receivable of 110.35 million RMB from 互联港湾 as of June 30, 2019, which poses a risk if the subsidiary does not perform well[78]. - The company provided guarantees for 26.49 million RMB of bank loans for 互联港湾, which could lead to financial liability if the subsidiary defaults[78]. Market Expansion and Strategic Initiatives - The company plans to actively explore other telecom operators and equipment suppliers to reduce reliance on major clients like China Mobile[8]. - The company is actively expanding into vertical industries for IoT business opportunities, developing applications for network optimization testing and smart warehousing[45]. - The company aims to enhance market expansion and product development in the upcoming quarters to drive future growth[1]. - The company is exploring potential mergers and acquisitions to enhance its market position and product offerings[166]. - Future guidance suggests a positive outlook for revenue growth, driven by new product launches and market expansion strategies[166]. Shareholder and Equity Information - The total number of shares before the change was 428,530,500, with 39,218,874 shares subject to restrictions, representing 9.15% of the total[120]. - After the change, the number of restricted shares decreased to 29,436,768, which is 6.87% of the total shares[120]. - The largest shareholder, Shanghai Fanyin Technology Co., Ltd., held 15.63% of the shares, totaling 66,975,040 shares[125]. - The company reported that 75% of the shares held by departing executives are subject to lock-up agreements[122]. Financial Reporting and Compliance - The semi-annual financial report has not been audited[85]. - The financial statements are prepared in accordance with the requirements of the enterprise accounting standards, reflecting the company's financial position and operating results accurately[181]. - There were no major asset disposals or fundraising activities during the reporting period[70]. - The company has no significant doubts regarding its ability to continue as a going concern for the next 12 months[180].

Financial Performance - Total revenue for Q1 2019 was ¥233,023,763.31, a decrease of 28.63% compared to ¥326,508,828.22 in the same period last year[9] - Net profit attributable to shareholders was -¥7,394,080.66, improving by 41.16% from -¥12,567,169.37 year-on-year[9] - Basic and diluted earnings per share were both -¥0.0173, showing a 41.55% improvement from -¥0.0296 in the same period last year[9] - Operating revenue decreased by 28.63% compared to the same period last year, primarily due to the exclusion of Beijing Huilian Port Technology Co., Ltd., Zhuhai Yuanli Network Technology Development Co., Ltd., and Shanghai Kaiwen Information Technology Co., Ltd. from the consolidation scope[20] - Net profit attributable to the parent company increased by 41.16% compared to the same period last year, mainly due to the exclusion of loss-making subsidiaries from the consolidation scope[26] - Net loss for Q1 2019 was ¥7,775,825.09, an improvement from a net loss of ¥20,789,948.31 in Q1 2018[67] Cash Flow and Liquidity - Net cash flow from operating activities was -¥42,994,655.94, an improvement of 56.08% compared to -¥97,893,772.16 in the previous year[9] - Cash flow from operating activities increased by 56.08% compared to the same period last year, primarily due to reduced cash payments to employees and lower tax payments[28] - The company reported a decrease in cash flow from operating activities, indicating potential liquidity challenges moving forward[51] - Cash flow from operating activities showed a significant decrease, indicating potential challenges in operational efficiency[79] Assets and Liabilities - Total assets at the end of the reporting period were ¥1,982,445,032.94, a slight decrease of 0.35% from ¥1,989,419,739.46 at the end of the previous year[9] - Total current assets amounted to RMB 1,526.89 million, a slight decrease from RMB 1,543.44 million at the end of 2018[57] - Total liabilities as of March 31, 2019, were RMB 1,227.43 million, slightly up from RMB 1,226.90 million at the end of 2018[58] - The company's total assets amounted to ¥1,298,779,955.42, slightly down from ¥1,298,968,204.28 at the end of the previous period[64] - Total liabilities increased to ¥781,302,671.70 from ¥773,335,882.13, reflecting a rise of 1.3%[64] Investments and Expenses - Long-term equity investments increased by 54.09% due to investments in Xingyao Zhiju Investment Partnership[18] - Financial expenses decreased by 44.77% compared to the same period last year, mainly due to the exclusion of certain subsidiaries and a reduction in borrowings[20] - Investment income decreased by 1053.46% compared to the same period last year, primarily due to reduced profits from joint ventures accounted for using the equity method[21] - Research and development expenses for Q1 2019 were ¥10,905,856.33, down 26.0% from ¥14,733,009.02 in the previous year[65] Client Relationships and Market Position - The company has ongoing contracts with major clients, including a framework agreement with China Mobile for construction services valued at approximately 29.97 million yuan, with 70% of the contract executed[32] - In Q1 2019, sales revenue from China Mobile and its subsidiaries accounted for 40.70% of the company's total revenue, compared to 28.67% in Q1 2018 and 35.84% in Q1 2017[40] - The company is actively working to reduce its reliance on major clients by exploring other telecom operators and communication equipment suppliers[40] - The company is facing risks from market competition, with a fully competitive environment in the third-party mobile communication technology service industry[41] Strategic Initiatives and Future Outlook - The company is focusing on expanding its business scope while continuing to develop technology based on customer needs, particularly in 5G technology[39] - The company has initiated multiple 5G project developments, enhancing its big data intelligent application platform to support 5G network performance metrics collection and analysis[38] - The company plans to complete its 4G wireless indoor distribution automatic transfer platform system by the end of May 2019[39] - The company recognizes the risk of management challenges due to its rapid growth and extensive service coverage across the country[41] Miscellaneous - The first quarter report was not audited, which may affect the reliability of the financial data presented[88] - The company provided financial assistance of RMB 127.85 million to Internet Harbor, which was a controlled subsidiary until December 2018[51]

Financial Performance - The company's operating revenue for 2018 was ¥1,363,927,579.23, a decrease of 3.64% compared to ¥1,415,404,853.57 in 2017 [26]. - The net profit attributable to shareholders was ¥10,934,429.94, a significant recovery from a loss of ¥133,448,775.12 in 2017, marking an improvement of 108.19% [26]. - The company's total assets decreased by 33.88% to ¥1,989,419,739.46 from ¥3,008,886,666.41 in 2017 [26]. - The company achieved a weighted average return on equity of 1.46%, recovering from -16.35% in 2017 [26]. - The company's revenue for the year was 1,363.93 million yuan, a decrease of 3.64% year-on-year, while the net profit attributable to shareholders increased by 108.19% to 10.93 million yuan [47]. - The company reported a total operating revenue of ¥1,363,927,579.23 in 2018, a decrease of 3.64% compared to ¥1,415,404,853.57 in 2017 [60]. - The company's net profit for 2018 was -46,059,865.17 CNY, resulting in a total distributable profit of -80,754,744.84 CNY as of December 31, 2018 [121]. Revenue Sources and Client Dependency - In 2018, the company's sales revenue from China Mobile and its subsidiaries accounted for 30.29% of total operating income, down from 38.86% in 2017 and 54.58% in 2016, indicating a diversification effort [8]. - The company acknowledges the risk of reliance on major clients, particularly China Mobile, and is working to expand its customer portfolio [8]. - The top five customers accounted for 66.48% of total annual sales, with the largest customer contributing approximately ¥413 million, or 30.29% of total sales [71]. - The total revenue from the top five customers amounted to ¥970,387,795.25, representing 68.56% of the company's total revenue [72]. Cost Management and Financial Stability - The company reported a total operating cost of approximately ¥1.15 billion, an increase of 4.66% year-over-year, with direct costs accounting for 76.28% of total operating costs [66]. - Sales expenses decreased by 20.29% to ¥46,489,883.19, while management expenses decreased by 23.67% to ¥81,194,673.52, reflecting the company's cost control efforts [74]. - The company is focused on optimizing its asset and liability structure to reduce operational and financial risks [54]. - The company has a structured approach to managing its guarantees, with specific terms and conditions outlined for each [152]. Technology and Innovation - The company is actively developing new technologies and products to keep pace with industry advancements and maintain competitive advantages [11]. - The company is actively training for NB-IOT and 5G technologies to prepare for future business demands [36]. - The company developed a big data intelligent application platform for network optimization, enhancing its functionality to meet customer needs for refined centralized operation and maintenance [51]. - The company aims to enhance its 5G network capabilities by increasing support for big data intelligent applications, which will include the collection and analysis of foundational indicators for 5G networks [102]. Management and Organizational Changes - The company is focusing on enhancing its management capabilities to address risks associated with rapid growth and expanding service areas [10]. - The company has experienced a significant turnover in management, with several key positions being vacated, including the General Manager and independent directors [196]. - The company underwent a change in control on November 19, 2018, with Shanghai Fanyin Technology Co., Ltd. becoming the new controlling shareholder [188]. - The company held its fifth extraordinary general meeting on December 14, 2018, completing the board and supervisory board elections [175]. Investment and Acquisition Strategy - The company plans to exit underperforming projects, such as Interlink Bay, to mitigate future risks, with a receivable of 12.785 million yuan and a guarantee of 3.119 million yuan related to this subsidiary [14]. - The company has identified investment and acquisition risks, particularly in relation to projects that do not align with its future strategic goals [111]. - The company expanded its consolidation scope by acquiring 100% of Hangzhou Mingxun for ¥5 million and 100% of Huaxing Myanmar for $50,000 [68]. Shareholder and Dividend Policy - The company does not plan to distribute cash dividends or issue bonus shares for the year [15]. - The company has not distributed any cash dividends or bonus shares for the fiscal year ending December 31, 2017, with a total distributable profit of -34,694,879.67 yuan [118]. - The company’s total cash dividends over the last three years have been 11,998,855.74 CNY in 2016, with no distributions in 2017 and 2018 [122]. Market Competition and Risks - The company operates in a highly competitive environment, which poses risks to its profitability and market position [7]. - The company recognizes the risk of market competition in the mobile communication technology service industry, which is characterized by numerous small-scale competitors [105]. - The company is aware of the investment and acquisition risks due to industry uncertainties and is taking measures to address these challenges [13]. Asset Management and Financial Health - The company's total assets decreased by CNY 34.78 million due to the sale of its stake in Hunan Interconnect Bay, but management stability was not significantly affected [95]. - The company’s cash and cash equivalents decreased by 49.57% compared to the beginning of the period, primarily due to the repayment of bank loans [40]. - The company reported a net decrease in cash and cash equivalents of ¥143,379,323.00, a decline of 1,217.75% compared to the previous year [79].

Financial Performance - Revenue for the reporting period increased by 5.64% to CNY 327,880,544.25 year-on-year[9] - Net profit attributable to shareholders was a loss of CNY 4,973,664.73, down 24.77% compared to the same period last year[9] - Net profit attributable to shareholders after deducting non-recurring gains and losses was a loss of CNY 5,369,526.37, a decrease of 14.31% year-on-year[9] - Basic and diluted earnings per share were both CNY -0.0116, down 24.73% year-on-year[9] - The company's operating revenue has shown slight growth compared to the previous year, although the gross margin has slightly decreased due to intensified market competition and adjustments in business operations[53] - Total operating revenue for Q3 2018 was CNY 327.88 million, an increase of 5.8% compared to CNY 310.39 million in the same period last year[67] - Net loss for Q3 2018 was CNY 14.00 million, compared to a net loss of CNY 1.08 million in Q3 2017, indicating a significant decline in profitability[69] - The company recorded a total profit of -¥5,895,912.91 for the current period, an improvement from -¥11,552,635.27 in the previous period[73] - The total comprehensive income attributable to the parent company is -¥36,243,504.25, compared to ¥21,920,613.56 in the previous period, indicating a shift in financial performance[78] Assets and Liabilities - Total assets decreased by 14.95% to CNY 2,558,968,435.42 compared to the end of the previous year[9] - Cash and cash equivalents decreased by 60.29% compared to the beginning of the period, primarily due to loan repayments, payment of goods, and distribution of 2017 year-end bonuses[20] - The company's total assets amounted to 2,558,968,435.42 yuan, down from 3,008,886,666.41 yuan at the beginning of the year[61] - Current liabilities totaled CNY 816.33 million, an increase from CNY 762.92 million, marking a rise of 7.0%[66] - The total liabilities decreased to CNY 963.94 million from CNY 987.79 million, a decrease of 2.9%[66] - The company's retained earnings showed a negative balance of CNY -61.34 million, worsening from CNY -34.69 million in the previous period[66] Cash Flow - Cash flow from operating activities for the year-to-date increased by 372.76% to CNY 77,167,651.77[9] - Net cash flow from operating activities increased by 372.76% compared to the same period last year, due to accelerated collection of accounts receivable[37] - Cash flow from operating activities shows a net increase of ¥77,167,651.77, a significant improvement from -¥28,291,149.57 in the previous period[83] - Cash inflow from investment activities totaled ¥505,101,063.93, compared to ¥483,882,497.85 in the previous period, indicating a growth of about 4.5%[87] - Net cash flow from investment activities was ¥35,620,662.79, a recovery from a net outflow of ¥201,006,836.61 in the previous year[87] - Cash inflow from financing activities was ¥427,539,300.00, slightly lower than ¥463,556,700.00 in the previous period[87] - The company reported a total cash outflow from financing activities of ¥554,522,142.43, compared to ¥297,195,048.96 in the previous period, indicating a significant increase in cash outflows[87] Shareholder Information - The company reported a total of 25,723 common shareholders at the end of the reporting period[13] - The top shareholder, Cheng Xiaoyan, holds 11.71% of the shares, totaling 50,200,000 shares[13] - The company did not conduct any repurchase transactions among the top 10 shareholders during the reporting period[14] Investments and Transactions - The company plans to transfer 14.75% of its shares to Shanghai FanYin Technology Co., Ltd., with a total of 63,192,042 shares involved[39] - The company intends to sell 51% of its stake in a subsidiary for 200 million yuan, but the transaction was terminated due to non-payment[43] - The company completed the transfer of 100% equity in Zhuhai Yuanli Network Technology Co., Ltd. for 46 million yuan, with 33.5 million yuan received to date[44] - The company plans to transfer 34% equity of Huliang Port to Hangzhou Dacheng Technology Co., Ltd. for a price of 133,333,333 yuan, pending shareholder approval[46] - As of October 9, 2018, the company has received an intention payment of 50 million yuan from Hangzhou Dacheng Technology[48] - The company forecasts a net profit attributable to shareholders of 1 to 6 million yuan for the year, indicating a turnaround from previous losses, primarily due to the equity transfer agreement[53] Operational Costs and Expenses - Total operating costs for Q3 2018 were CNY 354.10 million, up from CNY 309.33 million, representing an increase of 14.5% year-over-year[67] - Operating costs decreased to ¥62,111,211.42 from ¥70,179,588.06, resulting in a cost reduction of approximately 11.5%[72] - Total comprehensive income for the current period is -¥1,270,317.24, compared to -¥11,305,433.16 in the previous period, showing a notable recovery[74] - Research and development expenses decreased to ¥2,577,587.54 from ¥3,082,762.93, reflecting a reduction of approximately 16.3%[72] - Financial expenses increased to ¥25,264,866.85 from ¥23,652,049.09 in the previous period, with interest expenses rising to ¥31,300,567.49[80] Miscellaneous - The company did not purchase any bank wealth management products in the third quarter of 2018[50] - The company has not engaged in any non-compliance external guarantees during the reporting period[54] - There were no non-operating fund occupations by controlling shareholders or related parties during the reporting period[55] - The report for the third quarter was not audited, which may affect the reliability of the financial data presented[88]

Financial Performance - Total operating revenue for the first half of 2018 was ¥635,931,629.37, representing a 1.26% increase compared to ¥628,039,351.20 in the same period last year[26]. - Net profit attributable to shareholders was a loss of ¥31,205,491.04, a decrease of 220.68% from a profit of ¥25,858,215.37 in the previous year[26]. - Net profit attributable to shareholders after deducting non-recurring gains and losses was a loss of ¥32,541,745.37, down 245.38% from ¥22,384,689.00 in the same period last year[26]. - Basic earnings per share were -¥0.07, compared to ¥0.06 in the same period last year, reflecting a decrease of 216.67%[26]. - Diluted earnings per share were also -¥0.07, down 216.67% from ¥0.06 in the previous year[26]. - The company reported a significant decrease in goodwill, down to CNY 212,245,186.93, a reduction of 5.67% due to impairment provisions[67]. - The company expects a net profit loss of between 38 million to 33 million yuan for the period from the beginning of the year to the next reporting period, representing a decrease of 273.74% to 250.88% compared to the same period last year[88]. - The basic earnings per share are projected to be between -0.0887 to 0.051 yuan, indicating a decline of 273.92% to 250.98% year-over-year[88]. - The significant loss is primarily attributed to a substantial decline in net profit from the subsidiary, Interlink Bay, due to increased depreciation and amortization costs, as well as a decrease in sales prices in the IDC business[88]. Cash Flow and Liquidity - The net cash flow from operating activities improved to ¥2,089,535.53, a significant recovery from a negative cash flow of ¥56,229,221.72 in the previous year, marking a 103.72% increase[26]. - The company’s cash and cash equivalents decreased by 51.90% due to repayment of bank loans and interest payments[41]. - The company’s cash and cash equivalents decreased from CNY 287,931,059.67 to CNY 138,494,153.55, a reduction of approximately 51.8%[163]. - The cash and cash equivalents at the end of the period were 96,570,252.91 CNY, down from 204,902,426.47 CNY at the end of the previous year[187]. - The company incurred a net cash outflow from investing activities of -8,686,744.18 CNY, an improvement from -113,382,674.31 CNY in the previous year[186]. - The net cash outflow from financing activities was -154,914,777.31 CNY, compared to a net inflow of 128,892,579.96 CNY in the same period last year[187]. - The total cash inflow from financing activities was 371,533,895.83 CNY, compared to 466,367,415.38 CNY in the previous year[186]. - The operating cash inflow from the main business activities totaled 827,015,446.07 CNY, compared to 754,076,908.31 CNY in the previous year, reflecting a positive trend[185]. Assets and Liabilities - The company's total assets at the end of the reporting period were CNY 2,858,457,392.80, a decrease of 5.00% compared to the end of the previous year[27]. - The net assets attributable to shareholders decreased by 4.12% to CNY 710,855,222.80 compared to the end of the previous year[27]. - The company's total assets decreased from CNY 3,008,886,666.41 at the beginning of the year to CNY 2,858,457,392.80 by June 30, 2018, representing a decline of approximately 4.97%[167]. - Current assets totaled CNY 2,008,207,409.96, down from CNY 2,142,051,389.30, indicating a decrease of about 6.26%[163]. - Total liabilities decreased from CNY 2,208,691,907.78 to CNY 2,105,332,856.27, a reduction of about 4.69%[166]. - The company's equity decreased from CNY 800,194,758.63 to CNY 753,124,536.53, indicating a decline of approximately 5.87%[167]. Client Dependency and Market Position - The company remains heavily reliant on China Mobile, with sales to this major client accounting for 26.30% of total revenue in the first half of 2018, down from 38.86% in 2017[8]. - The company is actively seeking to diversify its client base to reduce dependency on major customers, particularly China Mobile[8]. - The company is one of the top three third-party mobile communication technology service providers in the industry, with a strong competitive advantage in network optimization services[40]. - The company secured contracts for wireless network optimization services in four provinces, enhancing its competitive position in the market[48]. Research and Development - The company is actively preparing for 5G business development and has adjusted its internal management structure to respond to changes in demand[37]. - The company has developed a signaling and data analysis system to enhance network optimization capabilities, integrating big data analysis for improved efficiency[43]. - R&D investment for the period was CNY 30.68 million, a slight decrease of 1.93% from the previous year[59]. - The company is actively working on research and development of new technologies and products to meet market demands and enhance its competitive edge[94]. Risks and Challenges - The company faces risks related to market competition, management, technology updates, and the retention of professional technical personnel[10][12]. - The company acknowledges the risks associated with potential acquisitions and emphasizes the importance of proper integration and management post-acquisition[97]. - The company is focused on improving management practices to adapt to changes in personnel and business scale, mitigating management risks[93]. - The company's traditional businesses, including network optimization and maintenance, have maintained stable operations with revenue remaining roughly flat compared to last year, although gross margins have decreased due to intensified market competition[88]. Shareholder Information - The total number of ordinary shareholders at the end of the reporting period is 26,371[146]. - The largest shareholder, Cheng Xiaoyan, holds 50,200,000 shares, representing 11.71% of total shares[146]. - The total number of restricted shares at the end of the period is 39,180,799, with 90,450 shares newly restricted during the period[144]. - The total shares held by directors and senior management at the end of the period is 52,241,066, with an increase of 120,600 shares during the period[156]. - The company has not conducted any repurchase agreements among its top shareholders during the reporting period[148]. Miscellaneous - The company did not plan to distribute cash dividends or issue bonus shares for the reporting period[14]. - There were no significant lawsuits or arbitration matters during the reporting period[107]. - The half-year financial report was not audited[104]. - The company has no stock incentive plans or employee shareholding plans in place during the reporting period[110]. - The company did not engage in any major related party transactions during the reporting period[111].

Financial Performance - Total operating revenue for the first half of 2018 was CNY 635,931,629.37, representing a 1.26% increase compared to CNY 628,039,351.20 in the same period last year[26]. - Net profit attributable to shareholders was a loss of CNY 31,205,491.04, a decrease of 220.68% from a profit of CNY 25,858,215.37 in the previous year[26]. - Net profit attributable to shareholders after deducting non-recurring gains and losses was a loss of CNY 32,541,745.37, down 245.38% from CNY 22,384,689.00 in the same period last year[26]. - Basic earnings per share were reported at -CNY 0.07, a decline of 216.67% compared to CNY 0.06 in the same period last year[26]. - Operating revenue increased by 1.26% year-on-year, with network optimization business revenue rising by 10.96% to ¥363,444,600[38]. - Operating costs increased by 22.71% year-on-year to CNY 547.92 million, leading to an operating loss of CNY 45.91 million, a decline of 203.28% compared to the previous year[58]. - The net profit attributable to shareholders was CNY -31.21 million, down 220.68% year-on-year, primarily due to increased depreciation and financial expenses related to the M7 data center and virtual private network projects[58]. - The total comprehensive loss for the period was CNY -47,321,291.48, compared to a comprehensive income of CNY 39,136,601.74 in the previous year[176]. Cash Flow and Liquidity - The net cash flow from operating activities improved to CNY 2,089,535.53, a significant recovery from a negative cash flow of CNY 56,229,221.72 in the previous year, marking a 103.72% increase[26]. - The company reported a net cash outflow from financing activities of CNY -154.91 million, a decrease of 220.19% year-on-year, primarily due to reduced bank borrowings[60]. - The cash inflow from operating activities totaled CNY 827,015,446.07, an increase of 9.7% compared to CNY 754,076,908.31 in the previous period[183]. - The ending cash and cash equivalents balance was CNY 96,570,252.91, down from CNY 204,902,426.47 in the previous period[185]. - The company's cash and cash equivalents decreased significantly from CNY 287,931,059.67 to CNY 138,494,153.55, a drop of about 51.85%[162]. Assets and Liabilities - The company's total assets at the end of the reporting period were ¥2,858,457,392.80, a decrease of 5.00% compared to the end of the previous year[27]. - Total liabilities decreased from CNY 2,208,691,907.78 to CNY 2,105,332,856.27, a decline of about 4.69%[165]. - The total equity decreased from CNY 800,194,758.63 to CNY 753,124,536.53, a reduction of about 5.87%[166]. - The company's retained earnings decreased from CNY 276,690,661.02 to CNY 245,485,169.98, a decline of approximately 11.27%[166]. - The total liabilities at the end of the period were 6,122,900,000 RMB[198]. Customer Dependency and Market Position - The company remains heavily reliant on China Mobile, with sales to this customer accounting for 26.30% of total revenue in the first half of 2018, down from 38.86% in 2017[8]. - The company is actively seeking to diversify its customer base to reduce dependency on major clients like China Mobile[8]. - The company faces risks related to market competition, with many small players in the third-party mobile communication technology service industry[6]. - The company remains one of the top three third-party mobile communication technology service providers in the industry[40]. Research and Development - The company is focusing on research and development to keep up with technological advancements and maintain its competitive edge[10]. - R&D investment for the period was CNY 30.68 million, a slight decrease of 1.93% compared to the previous year[60]. - The company is actively training in Nb-IOT and 5G technologies to prepare for future business demands[37]. - The company has developed a signaling and data analysis system to enhance network optimization efficiency through big data analysis[44]. - The company obtained two invention patents during the reporting period, indicating progress in innovation[54]. Shareholder and Equity Information - The company has a total of 428,530,562 shares, with 90.88% being unrestricted shares and 9.12% being restricted shares[138]. - The largest shareholder, Cheng Xiaoyan, holds 11.71% of shares, totaling 50,200,000 shares, which are pledged[144]. - The second-largest shareholder, Qu Zhensheng, holds 4.54% with 19,445,766 shares, of which 14,584,324 are subject to trading restrictions[144]. - The company has not undergone any changes in its controlling shareholder during the reporting period[147]. - The company has not issued any preferred shares during the reporting period[151]. Operational and Strategic Developments - The company is actively participating in the deployment and testing of 5G networks, aiming to accumulate experience in wireless signal coverage and engineering optimization[50]. - The company won bids for network optimization services in four provinces, enhancing its competitive position in the market[49]. - The company plans to enhance management levels to adapt to changes in personnel and business scale to mitigate management risks[91]. - The company is actively developing new technologies and products to keep pace with industry advancements and maintain competitive advantages[92]. Miscellaneous - No cash dividends or stock bonuses will be distributed to shareholders for this period[14]. - The company has not engaged in any significant equity or non-equity investments during the reporting period[73]. - The company has not experienced any major litigation or arbitration matters during the reporting period[104]. - The company has not implemented any employee incentive plans or stock ownership plans during the reporting period[107].

Financial Performance - Total revenue for Q1 2018 was CNY 326,508,828.22, representing a 16.13% increase compared to CNY 281,165,318.52 in the same period last year[9]. - Net profit attributable to shareholders was CNY -12,567,169.37, a decrease of 425.07% from CNY 3,865,945.13 in the previous year[9]. - The company reported a basic earnings per share of CNY -0.03, a decrease of 400.00% from CNY 0.01 in the same period last year[9]. - The company reported a net loss of CNY 45.07 million, compared to a loss of CNY 34.69 million in the previous period[82]. - The company's operating profit for Q1 2018 was a loss of CNY 19,413,126.90, compared to a profit of CNY 11,325,519.11 in the previous year[85]. - The total profit for Q1 2018 was a loss of CNY 19,407,382.30, down from a profit of CNY 13,819,545.25 in Q1 2017[85]. Cash Flow and Liquidity - Net cash flow from operating activities was CNY -97,893,772.16, a decline of 104.46% compared to CNY -47,878,776.32 in the same period last year[9]. - The company reported a cash inflow from operating activities of CNY 390,444,010.74 in Q1 2018, compared to CNY 348,566,260.79 in the previous year[92]. - The ending balance of cash and cash equivalents was 107,121,831.61 CNY, down from 281,872,773.10 CNY year-over-year[94]. - The company’s cash and cash equivalents decreased by 146,274,256.35 CNY during the period, contrasting with an increase of 36,144,011.27 CNY in the previous year[94]. Assets and Liabilities - Total assets at the end of the reporting period were CNY 2,908,799,530.34, down 3.33% from CNY 3,008,886,666.41 at the end of the previous year[9]. - Total liabilities decreased to CNY 2.13 billion from CNY 2.21 billion, a reduction of about 3.6%[78]. - The company's total equity decreased to CNY 561.32 million from CNY 571.69 million, a decline of approximately 1.9%[82]. Operational Efficiency - Operating costs rose by 42.44% year-on-year, primarily due to increased depreciation costs from the completion of the Jiuxianqiao M7 data center and virtual private network connection project[37]. - The company's inventory increased by 29.83% compared to the beginning of the period, due to many unfinished projects that do not meet revenue recognition criteria[28]. - The company’s financial expenses increased by 57.15% year-on-year, primarily due to interest expenses from the Jiuxianqiao M7 data center and virtual private network connection project[37]. Market Position and Strategy - The company relies heavily on China Mobile, with sales to this customer accounting for 28.67% of total revenue in Q1 2018, down from 38.86% in 2017[13]. - The company is facing risks from intense market competition in the third-party mobile communication technology service industry[12]. - The company plans to pursue investment and acquisition strategies for external expansion, while being cautious about the integration of acquired businesses[17]. - The company is aware of the risks associated with its strategic plans and has developed countermeasures in areas such as business expansion and product development[61]. Research and Development - The company is actively developing new technologies and products to keep pace with industry advancements and maintain competitive advantages[15]. - The company has initiated several important R&D projects, including the NB-IoT network testing system and 4G network fault monitoring, with significant progress reported in the design and development phases[51][53]. - The company is actively participating in the 5G network pilot deployment and optimization, aiming to enhance its service capabilities in the emerging market[51]. Client Contracts and Agreements - The company signed significant contracts with China Mobile, including a framework contract for optical fiber distribution systems worth approximately RMB 33.47 million[47]. - Xinzhong Communication signed contracts with China Mobile Group for indoor WLAN integration services totaling approximately 32.47 million CNY, 63.62 million CNY, and 143.51 million CNY for different provinces, all under normal execution[48][49][50]. - Huaxing Chuangye signed a framework agreement with China Mobile Group for wireless network optimization services with a total contract value of approximately 78.7 million CNY and 43.83 million CNY for different projects, all under normal execution[49].

Revenue and Profitability - In 2017, the company's revenue from China Mobile and its subsidiaries accounted for 38.86% of total revenue, down from 54.58% in 2016[8]. - The company's operating revenue for 2017 was ¥1,415,404,853.57, representing an increase of 8.04% compared to ¥1,310,119,642.06 in 2016[24]. - The net profit attributable to shareholders was a loss of ¥133,448,775.12, a decrease of 277.97% from a profit of ¥74,983,019.44 in 2016[24]. - The total revenue for 2017 was ¥1,415,404,853.57, representing an increase of 8.04% compared to ¥1,310,119,642.06 in 2016[51]. - Revenue from the communication services sector decreased by 12.57% to ¥1,145,398,786.94, while internet services generated ¥270,006,066.63, accounting for 19.08% of total revenue[51]. - The company reported a net profit of -37,726,875.70 yuan for 2017, resulting in a total distributable profit of -34,694,879.67 yuan as of December 31, 2017[111]. - The company did not distribute any cash dividends or bonus shares in 2017, maintaining a cash dividend payout ratio of 0.00%[111]. Financial Performance and Assets - The company's total assets at the end of 2017 were ¥3,008,886,666.41, a decrease of 1.56% from ¥3,056,547,825.23 at the end of 2016[24]. - The company reported a significant decline in net assets attributable to shareholders, which fell by 17.17% to ¥741,394,974.03 from ¥895,127,760.19 in 2016[24]. - The company's long-term equity investments decreased by 97.35% due to the impairment of receivables related to the acquisition of Interlink Harbor[33]. - The company’s goodwill decreased to 212,245,186.93 yuan, representing 7.05% of total assets, down from 13.03% in the previous year, reflecting a 5.98% reduction[74]. - The company reported a total of ¥115,787,488.67 in non-recurring gains and losses for 2017, compared to a loss of ¥109,167.86 in 2016[30]. Client Dependency and Risk Management - The company faces risks related to reliance on major clients, particularly China Mobile, which significantly impacts revenue[8]. - The company is expanding its client base beyond China Mobile to mitigate risks associated with client dependency[8]. - The company recognizes the importance of retaining skilled technical personnel to maintain its competitive edge in the industry[12]. - The company is committed to improving management levels to adapt to its rapid growth and mitigate associated risks[9]. Investment and Growth Strategy - The company plans to continue its investment and acquisition strategy to achieve external expansion, emphasizing careful selection of targets and thorough due diligence[13]. - The company plans to actively participate in the 5G network deployment and optimization, aiming to accumulate experience for future applications[41]. - The company is pursuing a dual strategy of organic growth and external expansion through mergers, acquisitions, and equity investments[96]. - The company is exploring potential acquisitions to enhance its product portfolio, with a budget of 5,000 million allocated for this purpose[139]. Research and Development - The company is actively developing new technologies and products to keep pace with industry advancements and maintain competitive advantages[10]. - Research and development investment for 2017 was ¥69,270,259.20, which is 4.89% of the operating revenue[67]. - Research and development expenses increased by 20% to support new technology initiatives, totaling 1,500 million[140]. Operational Efficiency and Management - The rapid growth of the company has increased management demands across decision-making, implementation, human resources, and risk control[9]. - The company has established a performance evaluation system for senior management, which influences remuneration adjustments based on annual performance[190]. - The management team emphasized a commitment to sustainability and corporate social responsibility in future business strategies[184]. Market Presence and Expansion - The company has expanded its service coverage to over 30 provinces and municipalities, establishing long-term partnerships with telecom operators[37]. - The company is focusing on expanding its base station leasing, Wi-Fi leasing, and railway network construction businesses in 2018[98]. - The company plans to expand its market presence in Southeast Asia, targeting a 10% market share by the end of the next fiscal year[139]. Shareholder and Governance Matters - The company has not made any adjustments to its profit distribution policy during the reporting period[108]. - The company ensures equal treatment of all investors and protects the rights of minority shareholders during shareholder meetings[200]. - The company has a well-defined salary policy that adjusts salaries annually based on market conditions and internal needs[194]. Compliance and Regulatory Matters - The company has maintained compliance with all regulatory requirements, with no instances of non-standard audit reports during the reporting period[119]. - The company did not report any penalties from regulatory authorities for its directors and supervisors during the reporting period[189]. - The company has not engaged in any related party transactions during the reporting period[129].

Financial Performance - Operating revenue for the reporting period was CNY 310,385,483.48, an increase of 14.14% year-on-year[8]. - Net profit attributable to shareholders was a loss of CNY 3,986,338.98, a decrease of 151.37% compared to the same period last year[8]. - Basic earnings per share were CNY -0.0093, a decline of 146.50% year-on-year[8]. - The company reported a net profit excluding non-recurring gains and losses of CNY -4,697,483.37, a decrease of 171.23% year-on-year[8]. - Net profit attributable to the parent company decreased by 38.65% year-on-year, influenced by increased borrowing costs and competitive pressures in traditional mobile communication services[29]. - Investment income decreased by 91.52% year-on-year, mainly due to reduced profits from associated enterprises[30]. - The company reported a decrease in gross profit margin due to rising costs, impacting overall profitability[52]. - Net profit for Q3 2017 was CNY -1,077,180.73, a significant decline from CNY 6,741,350.38 in Q3 2016, indicating a negative growth of 116%[53]. - The net profit attributable to shareholders of the parent company was CNY -3,986,338.98, compared to CNY 7,760,795.39 in the previous year[53]. - The total profit for Q3 2017 was approximately ¥79.06 million, a significant improvement compared to a loss of ¥10.91 million in the same period last year, marking a turnaround of over 800%[65]. Cash Flow and Liquidity - The net cash flow from operating activities was CNY -28,291,149.57, an increase of 79.35% compared to the same period last year[8]. - Cash and cash equivalents decreased by 55.91% compared to the beginning of the period, primarily due to expenditures on engineering construction, payment for equity acquisitions, dividends, and year-end bonuses[19]. - The cash inflow from investment activities was ¥269.78 million, a substantial increase from ¥97.10 million in the previous year, indicating a strategic focus on investment growth[69]. - The net cash flow from operating activities was -¥28.29 million, an improvement from -¥137.04 million year-over-year, indicating a reduction in cash outflow by about 79.3%[68]. - Cash flow from financing activities generated a net inflow of ¥43.03 million, a significant increase from a mere ¥255,309.52 in the same period last year[69]. - The company incurred a total of ¥575.78 million in cash outflows from financing activities, which included debt repayments and interest payments[72]. Assets and Liabilities - Total assets at the end of the reporting period were CNY 3,008,763,993.30, a decrease of 1.56% compared to the end of the previous year[8]. - The total current assets decreased from CNY 2,112,501,169.84 to CNY 2,020,633,188.56, a reduction of approximately 4.3%[44]. - The total liabilities decreased from CNY 2,078,610,301.38 to CNY 2,019,600,655.51, a decline of approximately 2.8%[46]. - The company's long-term investments decreased from CNY 77,696,987.99 to CNY 54,309,832.82, a reduction of about 30.2%[45]. - Fixed assets increased by 171.38% compared to the beginning of the period, attributed to the completion and commissioning of the Jiuxianqiao M7 data center[22]. - The total owner's equity increased slightly from CNY 977,937,523.85 to CNY 989,163,337.79, an increase of approximately 1.2%[47]. Shareholder Information - The total number of ordinary shareholders at the end of the reporting period was 35,376[12]. - The largest shareholder, Cheng Xiaoyan, held 11.71% of the shares, totaling 50,200,000 shares, which are pledged[12]. - The company did not engage in any repurchase transactions among the top 10 shareholders during the reporting period[13]. - The company's cash dividend policy complies with the company's articles of association and shareholder resolutions[38]. - The company distributed a cash dividend of RMB 0.28 per share, totaling approximately RMB 11.99 million, as approved in the 2016 annual general meeting[36]. Future Outlook - Future outlook includes potential market expansion and new product development, although specific figures were not provided in the report[53]. - The company plans to focus on expanding its market presence and enhancing product development in the upcoming quarters[60].