隆华科技集团（洛阳）股份有限公司 2022 年第三季度报告 证券代码：300263 证券简称：隆华科技 公告编号：2022-082 隆华科技集团（洛阳）股份有限公司 2022 年第三季度报告 本公司及董事会全体成员保证信息披露的内容真实、准确、完整，没有虚假记载、误导性陈述或重大遗漏。 重要内容提示： 1.董事会、监事会及董事、监事、高级管理人员保证季度报告的真实、准确、完整，不存在虚假记载、误导性陈述或重 大遗漏，并承担个别和连带的法律责任。 2.公司负责人、主管会计工作负责人及会计机构负责人(会计主管人员)声明：保证季度报告中财务信息的真实、准确、 完整。 3.第三季度报告是否经过审计 □是 否 1 隆华科技集团（洛阳）股份有限公司 2022 年第三季度报告 一、主要财务数据 （一） 主要会计数据和财务指标 公司是否需追溯调整或重述以前年度会计数据 | --- | --- | --- | --- | --- | |-----------------------------------------------------|------------------|------------------------ ...

[Important Notice, Table of Contents, and Definitions](index=2&type=section&id=First%20Section%20Important%20Notice%2C%20Table%20of%20Contents%2C%20and%20Definitions) This section includes important declarations regarding the report's accuracy and completeness, along with definitions of key terms used throughout the document [Important Notice](index=2&type=section&id=Important%20Notice) The company's management ensures the truthfulness, accuracy, and completeness of this semi-annual report, with future plans not constituting substantial commitments to investors, and no profit distribution planned for the period - Company management guarantees the truthfulness, accuracy, and completeness of the report content and assumes legal responsibility[5](index=5&type=chunk) - The company plans no cash dividends, no bonus shares, and no capitalization of reserves into share capital[6](index=6&type=chunk) [Definitions](index=5&type=section&id=Definitions) This section defines key terms and company abbreviations used in the report, including the company itself, major subsidiaries, and regulatory bodies, providing clear guidance for reading the report - The reporting period is defined as **January 1, 2022**, to **June 30, 2022**[16](index=16&type=chunk) [Company Profile and Key Financial Indicators](index=6&type=section&id=Second%20Section%20Company%20Profile%20and%20Key%20Financial%20Indicators) This section provides basic company information and a summary of key financial performance metrics for the reporting period [Company Profile](index=6&type=section&id=I.%20Company%20Profile) This section provides the company's basic information, including its stock abbreviation 'Longhua Technology', stock code '300263', listing exchange Shenzhen Stock Exchange, and its full Chinese and English names, along with the legal representative Company Basic Information | Item | Information | | :--- | :--- | | **Stock Abbreviation** | Longhua Technology | | **Stock Code** | 300263 | | **Listing Exchange** | Shenzhen Stock Exchange | | **Legal Representative** | Li Zhanming | [Key Accounting Data and Financial Indicators](index=7&type=section&id=IV.%20Key%20Accounting%20Data%20and%20Financial%20Indicators) During the reporting period, the company's operating revenue increased by 21.72% year-on-year, but net profit attributable to shareholders decreased by 20.87% year-on-year. Net cash flow from operating activities was **CNY -181.45 million**, a significant decrease of 170.98% year-on-year, indicating increased operating cash flow pressure. Total assets grew by 5.82% compared to the end of the previous year Key Financial Performance | Indicator | Current Period | Prior Period | YoY Change | | :--- | :--- | :--- | :--- | | **Operating Revenue (CNY)** | 1,155,939,224.00 | 949,696,913.25 | 21.72% | | **Net Profit Attributable to Shareholders (CNY)** | 92,602,585.95 | 117,023,597.94 | -20.87% | | **Net Profit Excluding Non-recurring Items (CNY)** | 76,713,673.16 | 114,924,242.02 | -33.25% | | **Net Cash Flow from Operating Activities (CNY)** | -181,452,407.88 | -66,961,060.25 | -170.98% | | **Basic EPS (CNY/share)** | 0.1013 | 0.130 | -22.08% | | **Weighted Average ROE** | 2.93% | 4.21% | -1.28% | | **Total Assets (CNY)** | 6,654,160,647.92 | 6,288,325,043.23 (End of Prior Year) | 5.82% | [Non-recurring Gains and Losses and Amounts](index=7&type=section&id=VI.%20Non-recurring%20Gains%20and%20Losses%20and%20Amounts) During the reporting period, the company's total non-recurring gains and losses amounted to **CNY 15.89 million**, primarily comprising government grants recognized in current profit or loss of **CNY 14.53 million**, and fair value changes and investment income from held-for-trading financial assets of **CNY 4.75 million** Non-recurring Items | Item | Amount (CNY) | | :--- | :--- | | Government Grants Recognized in Current Profit or Loss | 14,534,599.96 | | Gains/Losses from Held-for-Trading Financial Assets and Liabilities | 4,746,743.30 | | Gains/Losses on Disposal of Non-current Assets | -416,198.32 | | Other Non-operating Income and Expenses | 432,586.01 | | **Total** | **15,888,912.79** | [Management Discussion and Analysis](index=9&type=section&id=Third%20Section%20Management%20Discussion%20and%20Analysis) This section provides an in-depth analysis of the company's operations, financial performance, and risk factors during the reporting period [Principal Businesses](index=9&type=section&id=I.%20Principal%20Businesses%20During%20the%20Reporting%20Period) The company's principal businesses are divided into three segments: electronic new materials, polymer composite materials, and energy saving and environmental protection. The electronic new materials business provides high-purity sputtering targets for TFT-LCD/AMOLED and semiconductors; the polymer composite materials business covers functional materials for aerospace, marine vessels, and rail transit; and the energy saving and environmental protection business focuses on industrial heat transfer energy-saving equipment and environmental water treatment services - Electronic New Materials Business: Main products include high-purity sputtering targets for semiconductor displays and integrated circuits, such as molybdenum targets and ITO targets. During the reporting period, the company established **Fenglianke Optoelectronics** through asset integration to strengthen industrial development[35](index=35&type=chunk)[36](index=36&type=chunk) - Polymer Composite Materials Business: Products include PMI structural foam materials for aircraft and drones, resin-based composite materials for marine vessels, and vibration damping systems and composite material products for rail transit[39](index=39&type=chunk)[40](index=40&type=chunk) - Energy Saving and Environmental Protection Business: Includes providing industrial heat transfer energy-saving equipment such as composite air-cooled heat exchangers for industries like petrochemical and power, and offering water treatment system solutions for industrial and municipal sectors[41](index=41&type=chunk)[45](index=45&type=chunk) [Core Competitiveness Analysis](index=12&type=section&id=II.%20Core%20Competitiveness%20Analysis) The company's core competitiveness lies in its clear strategic planning and rational industrial layout, continuous talent cultivation and introduction, profound technological innovation capabilities, and excellent corporate culture and brand influence. The company insists on strengthening existing businesses while actively expanding into new materials and other incremental businesses, building a diversified and synergistic industrial structure - Strategy and Layout: Adhering to the philosophy of 'people-oriented entrepreneurship, technology-driven development', the company aims to stabilize and strengthen existing businesses while actively expanding into new materials and other incremental businesses along the industry chain[59](index=59&type=chunk) - Talent and Innovation: The company cultivates innovative talent through 'internal training + external recruitment', increases R&D investment year by year, forms an R&D policy of 'producing one generation, researching one generation, reserving one generation', and establishes effective innovation incentive mechanisms[60](index=60&type=chunk)[61](index=61&type=chunk) - Brand Influence: Subsidiaries have become industry leaders in their respective segments, accelerating import substitution for products and enhancing the group's overall market share and brand influence[62](index=62&type=chunk) [Principal Business Analysis](index=13&type=section&id=III.%20Principal%20Business%20Analysis) During the reporting period, the company's operating revenue increased by 21.72% year-on-year, primarily driven by the energy saving and environmental protection products and services business (up 41.26% year-on-year). However, operating costs increased by 30.48% year-on-year due to rising steel prices, eroding gross profit margin. Financial expenses surged by 686.06% due to interest recognition from convertible bond issuance. Net cash flow from operating activities was **CNY -181.45 million**, a 170.98% year-on-year deterioration, mainly due to increased raw material inventory driven by higher orders Key Financial Data by Item | Item | Current Period | Prior Period | YoY Change | Reason for Change | | :--- | :--- | :--- | :--- | :--- | | **Operating Revenue** | 1,155,939,224.00 | 949,696,913.25 | 21.72% | - | | **Operating Cost** | 866,395,507.29 | 664,006,073.11 | 30.48% | Increased steel prices, higher costs | | **Financial Expenses** | 27,396,320.21 | 3,485,268.07 | 686.06% | Due to issuance of convertible bonds and recognition of convertible bond interest | | **Net Cash Flow from Operating Activities** | -181,452,407.88 | -66,961,060.25 | -170.98% | Due to increased orders and higher inventory stocking | | **Net Cash Flow from Investing Activities** | -42,738,046.99 | -230,350,177.19 | 81.45% | Due to changes in wealth management scale during the reporting period | | **Net Cash Flow from Financing Activities** | -62,026,359.91 | 238,619,268.67 | -125.99% | Reduced financing scale, early repayment of short-term borrowings | Operating Performance by Product or Service | By Product or Service | Operating Revenue (CNY) | Operating Cost (CNY) | Gross Profit Margin | YoY Change in Operating Revenue | YoY Change in Operating Cost | YoY Change in Gross Profit Margin | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **Electronic New Materials** | 247,060,647.48 | 189,458,485.95 | 23.31% | 28.10% | 26.54% | 0.94% | | **Polymer Composite Materials** | 166,779,546.19 | 83,024,935.80 | 50.22% | -27.95% | -30.73% | 2.00% | | **Energy Saving and Environmental Protection Products and Services** | 742,099,030.33 | 593,912,085.54 | 19.97% | 41.26% | 50.58% | -4.95% | [Analysis of Assets and Liabilities](index=14&type=section&id=V.%20Analysis%20of%20Assets%20and%20Liabilities) As of the end of the reporting period, the company's total assets were **CNY 6.65 billion**, an increase of 5.82% from the beginning of the period. Within the asset composition, accounts receivable and inventory increased, while short-term borrowings significantly decreased. As of the end of the reporting period, the total amount of assets with restricted ownership or use rights was **CNY 609.87 million**, primarily including bank acceptance bill deposits, pledged bank acceptance bills, mortgaged fixed assets, and purchased large-denomination certificates of deposit - As of the end of the reporting period, the total amount of assets with restricted ownership or use rights was **CNY 609.87 million**[71](index=71&type=chunk) - Restricted assets primarily include: - **CNY 303 million** in monetary funds (mainly bank acceptance bill deposits) - **CNY 85 million** in pledged notes receivable - **CNY 80 million** in mortgaged fixed assets or those with uncompleted property certificates - **CNY 142 million** in purchased large-denomination certificates of deposit and interest[71](index=71&type=chunk)[72](index=72&type=chunk)[73](index=73&type=chunk) [Investment Analysis](index=15&type=section&id=VI.%20Investment%20Analysis) During the reporting period, the company's investment amounted to **CNY 213 million**, a year-on-year increase of 147.01%. The company raised net proceeds of **CNY 787 million** through the issuance of convertible corporate bonds, primarily for the 'New High-Performance Structural/Functional Materials Industrialization Project' and to supplement working capital. As of the end of the reporting period, cumulative investment in the raised fund projects was **CNY 93.38 million**, with an investment progress of 16.97%, falling short of expectations due to the impact of the pandemic and rising raw material prices. The company utilized a portion of idle raised funds for cash management Raised Funds Investment Status | Total Raised Funds (CNY thousands) | Total Investment in Current Period (CNY thousands) | Cumulative Investment (CNY thousands) | | :--- | :--- | :--- | | 786,801.4 | 23,722.6 | 329,941.7 | - The raised fund project 'New High-Performance Structural/Functional Materials Industrialization Project' experienced delays in customer bidding due to the pandemic and rising raw material prices, affecting expansion demand, leading to project progress falling short of expectations[82](index=82&type=chunk) - The company utilized up to **CNY 470 million** of idle raised funds to temporarily supplement working capital and up to **CNY 500 million** of idle raised funds for cash management to improve capital utilization efficiency[84](index=84&type=chunk) [Analysis of Major Holding and Participating Companies](index=19&type=section&id=VIII.%20Analysis%20of%20Major%20Holding%20and%20Participating%20Companies) During the reporting period, the company's major subsidiaries operated steadily. Among them, Hunan Zhaoheng Material Technology Co., Ltd. (primarily carbon fiber composite materials) and Beijing Zhongdian Jiamei Environmental Protection Technology Co., Ltd. (primarily industrial water treatment) were major profit contributors, with net profits of **CNY 25.71 million** and **CNY 20.84 million**, respectively. During the reporting period, the company newly established Longhua Technology Group (Luoyang) Supply Chain Co., Ltd Major Subsidiaries' Performance | Company Name | Principal Business | Operating Revenue (CNY) | Net Profit (CNY) | | :--- | :--- | :--- | :--- | | Beijing Zhongdian Jiamei Environmental Protection Technology Co., Ltd. | Industrial and Municipal Water Treatment | 187,736,924.81 | 20,841,978.24 | | Xianning Haiwei Composite Material Products Co., Ltd. | R&D of Marine Composite Materials | 116,837,327.15 | 16,984,830.70 | | Luoyang Cobos New Material Technology Co., Ltd. | Non-metallic Composite Materials | 50,702,040.97 | 4,480,594.61 | | Hunan Zhaoheng Material Technology Co., Ltd. | Carbon Fiber Composite Materials | 53,766,255.86 | 25,710,346.11 | [Risks Faced by the Company and Countermeasures](index=21&type=section&id=X.%20Risks%20Faced%20by%20the%20Company%20and%20Countermeasures) The company faces major risks including macroeconomic environment fluctuations, management challenges from expanding operations, intensified market competition in new materials and energy saving and environmental protection sectors, and accounts receivable bad debt risk due to business growth. The company will address these risks by strengthening technological innovation, exploring new businesses, enhancing customer credit management, and improving accounts receivable collection - Macroeconomic Risks: Macro factors such as fluctuations in consumption growth, changes in investment structure, and overseas epidemics may impact the company's operations[100](index=100&type=chunk)[101](index=101&type=chunk) - Management Risks: The increasing scale of the company and number of subsidiaries pose higher requirements for internal control and synergistic management[102](index=102&type=chunk) - Market Competition Risks: The new materials sector faces competition from international giants and domestic peers, while the energy saving and environmental protection sector experiences low-price competition and raw material price fluctuation pressures[103](index=103&type=chunk) - Bad Debt Risks: Business growth leads to increased accounts receivable, potentially resulting in bad debt losses and cash flow pressure[104](index=104&type=chunk) [Corporate Governance](index=22&type=section&id=Fourth%20Section%20Corporate%20Governance) This section outlines the company's governance structure, shareholder meetings, and profit distribution policies during the reporting period [Corporate Governance Summary](index=22&type=section&id=Corporate%20Governance%20Summary) During the reporting period, the company held its 2021 Annual General Meeting of Shareholders, with an investor participation rate of 32.34%. One supervisor resigned due to job relocation. The company plans no cash dividends, no bonus shares, and no capitalization of reserves into share capital for the semi-annual period, and had no equity incentive plans during the reporting period - The 2021 Annual General Meeting of Shareholders was held on **May 19, 2022**[108](index=108&type=chunk) - Supervisor Zhao Guangzheng resigned on **June 14, 2022**, due to job relocation[109](index=109&type=chunk) - The company's semi-annual profit distribution plan is 'three noes': no cash dividends, no bonus shares, and no capitalization of reserves into share capital[110](index=110&type=chunk) [Environmental and Social Responsibility](index=23&type=section&id=Fifth%20Section%20Environmental%20and%20Social%20Responsibility) This section details the company's environmental compliance, pollution control measures, and social welfare initiatives [Environmental and Social Responsibility Summary](index=23&type=section&id=Environmental%20and%20Social%20Responsibility%20Summary) The company and its subsidiaries are not classified as key pollutant-discharging entities and received no environmental administrative penalties during the reporting period. The company has established a professional environmental protection team, built and stably operates pollution prevention and control facilities, and formulated emergency plans for environmental incidents. In terms of social responsibility, the company continuously carries out public welfare activities such as assisting employees in need and donating to education - The company is not listed as a key pollutant-discharging entity by environmental protection authorities and received no environmental administrative penalties during the reporting period[114](index=114&type=chunk) - The company actively fulfills its social responsibilities, continuously carrying out public welfare activities such as assisting employees in need and donating to education, contributing to rural revitalization[115](index=115&type=chunk) [Significant Matters](index=24&type=section&id=Sixth%20Section%20Significant%20Matters) This section covers major contracts, guarantees, and significant events concerning the company's subsidiaries [Significant Contracts and Their Performance](index=26&type=section&id=XII.%20Significant%20Contracts%20and%20Their%20Performance) During the reporting period, the company had multiple ongoing lease contracts as both lessee and lessor. Additionally, the company provided significant guarantees for its subsidiaries and one associate. As of the end of the reporting period, the total approved guarantee limit was **CNY 1.02 billion**, with an actual guarantee balance of **CNY 437.69 million**, representing **13.77%** of the company's net assets Guarantee Status | Guarantee Status | Approved Limit as of Period End (CNY thousands) | Actual Guarantee Balance as of Period End (CNY thousands) | | :--- | :--- | :--- | | **External Guarantees** | 25,131.4 | 25,131.4 | | **Guarantees for Subsidiaries** | 990,000 | 412,559.2 | | **Total** | **1,015,131.4** | **437,690.6** | - The proportion of total actual guarantees to the company's net assets is **13.77%**[145](index=145&type=chunk) [Significant Matters of Company Subsidiaries](index=28&type=section&id=XIV.%20Significant%20Matters%20of%20Company%20Subsidiaries) To promote the development of the electronic new materials industrial segment, subsidiary Fenglianke Optoelectronics completed asset integration and shareholding system reform with Jinglian Optoelectronics, which has been approved by the general meeting of shareholders, and plans to apply for listing on the National Equities Exchange and Quotations (New Third Board) - Subsidiary **Fenglianke Optoelectronics** completed asset integration and shareholding system reform, and agreed to apply for listing on the New Third Board[148](index=148&type=chunk) [Share Changes and Shareholder Information](index=29&type=section&id=Seventh%20Section%20Share%20Changes%20and%20Shareholder%20Information) This section details changes in the company's share capital and the composition of its shareholders [Share Change Status](index=29&type=section&id=1.%20Share%20Change%20Status) During the reporting period, the company's total share capital slightly increased by **54,432 shares** due to convertible bond conversion, from **914,221,304 shares** to **914,275,736 shares**. Restricted shares decreased by **3.52 million shares**, with a corresponding increase in unrestricted shares Share Capital Changes | Share Class | Before Change (shares) | Change (shares) | After Change (shares) | | :--- | :--- | :--- | :--- | | **Restricted Shares** | 146,521,671 | -3,521,112 | 143,000,559 | | **Unrestricted Shares** | 767,699,633 | +3,575,544 | 771,275,177 | | **Total Shares** | **914,221,304** | **+54,432** | **914,275,736** | - The increase in total shares is due to the conversion of convertible corporate bonds[153](index=153&type=chunk) [Shareholder Numbers and Shareholding Status](index=31&type=section&id=3.%20Company%20Shareholder%20Numbers%20and%20Shareholding%20Status) As of the end of the reporting period, the company had **42,382** common shareholders. The top two shareholders were Li Zhanming, one of the company's co-actual controllers (**10.45%** stake), and China General Technology Group Investment Management Co., Ltd., a state-owned legal entity (**9.47%** stake). The actual controllers Li Zhanming, Li Zhanqiang, Li Mingqiang, and Li Mingwei are acting in concert - As of the end of the reporting period, the total number of common shareholders was **42,382**[160](index=160&type=chunk) Top Shareholders | Shareholder Name | Shareholder Nature | Shareholding Percentage | Number of Shares Held | | :--- | :--- | :--- | :--- | | Li Zhanming | Domestic Natural Person | 10.45% | 95,501,092 | | China General Technology Group Investment Management Co., Ltd. | State-owned Legal Entity | 9.47% | 86,600,000 | | Li Mingqiang | Domestic Natural Person | 4.36% | 39,841,600 | | Li Zhanqiang | Domestic Natural Person | 4.16% | 37,988,400 | | Li Mingwei | Domestic Natural Person | 2.55% | 23,300,000 | [Preferred Share Information](index=34&type=section&id=Eighth%20Section%20Preferred%20Share%20Information) This section confirms the absence of preferred shares during the reporting period [Preferred Share Summary](index=34&type=section&id=Preferred%20Share%20Summary) During the reporting period, the company had no preferred shares - The company had no preferred shares during the reporting period[171](index=171&type=chunk) [Bond-Related Information](index=35&type=section&id=Ninth%20Section%20Bond-Related%20Information) This section provides details on the company's convertible bonds, including conversion price adjustments and credit ratings [Convertible Corporate Bonds](index=35&type=section&id=IV.%20Convertible%20Corporate%20Bonds) The company's 'Longhua Convertible Bond' conversion price was adjusted from **CNY 7.76/share** to **CNY 7.73/share** during the reporting period due to the implementation of the 2021 profit distribution. As of the end of the reporting period, a cumulative **CNY 0.42 million** of bonds had been converted into **54,432** company shares, representing **0.05%** of the total issuance. The company's main credit rating remained **AA-**, with a stable outlook - Due to the implementation of the 2021 profit distribution plan, the conversion price of 'Longhua Convertible Bond' was adjusted from **CNY 7.76/share** to **CNY 7.73/share**[177](index=177&type=chunk) Convertible Bond Conversion Status | Convertible Bond Abbreviation | Total Issuance Amount (CNY) | Cumulative Conversion Amount (CNY) | Cumulative Converted Shares (shares) | Proportion of Unconverted Amount to Total Issuance | | :--- | :--- | :--- | :--- | :--- | | Longhua Convertible Bond | 798,928,300 | 422,700 | 54,432 | 99.95% | - The company's main credit rating remained **AA-**, with a stable outlook[183](index=183&type=chunk) [Financial Report](index=38&type=section&id=Tenth%20Section%20Financial%20Report) This section presents the company's unaudited financial statements, including balance sheets, income statements, and cash flow statements, along with key accounting policies and detailed notes [Financial Statements](index=38&type=section&id=II.%20Financial%20Statements) This section provides the company's unaudited consolidated and parent company financial statements, including the balance sheet, income statement, cash flow statement, and statement of changes in owners' equity. These statements comprehensively reflect the company's financial position at the end of the reporting period, as well as its operating results and cash flow during the reporting period - The company's semi-annual financial report is unaudited[192](index=192&type=chunk) [Company Basic Information](index=61&type=section&id=III.%20Company%20Basic%20Information) Longhua Technology was established in **1995** and listed on the ChiNext board in **2011**. The company's principal businesses cover R&D, production, and sales of heat transfer energy saving, environmental water treatment, electronic new materials, and polymer composite materials. The company has no controlling parent company, and its actual controllers are the four brothers Li Zhanming, Li Mingwei, Li Mingqiang, and Li Zhanqiang - The company was listed on the ChiNext board on **September 16, 2011**, with stock code **300263**[259](index=259&type=chunk) - During the reporting period, due to the conversion of convertible corporate bonds, the company's total share capital increased to **914,275,736 shares**[281](index=281&type=chunk) [Significant Accounting Policies and Estimates](index=64&type=section&id=V.%20Significant%20Accounting%20Policies%20and%20Estimates) The company's financial statements are prepared on a going concern basis, in accordance with enterprise accounting standards. Significant accounting policies include: financial instruments are classified based on business model and contractual cash flow characteristics, with impairment provisions made using the expected credit loss model; inventories are valued using the weighted average method at month-end and measured at the lower of cost and net realizable value; revenue is recognized when the customer obtains control of the goods or services; and long-term assets are tested for impairment when impairment indicators arise - Revenue Recognition: Revenue is recognized when the customer obtains control of the related goods or services[388](index=388&type=chunk) - Financial Asset Impairment: The expected credit loss model is used to estimate expected credit losses for financial assets measured at amortized cost and debt instruments measured at fair value through other comprehensive income[321](index=321&type=chunk) - R&D Expenditures: Research phase expenditures are recognized in current profit or loss, while development phase expenditures are capitalized when specific conditions are met[363](index=363&type=chunk)[364](index=364&type=chunk)[365](index=365&type=chunk) [Notes to Consolidated Financial Statement Items](index=88&type=section&id=VII.%20Notes%20to%20Consolidated%20Financial%20Statement%20Items) This section provides detailed explanations of key items in the consolidated financial statements. As of the end of the period, the company's monetary funds were **CNY 860 million**, of which **CNY 303 million** were restricted. Accounts receivable had a carrying value of **CNY 1.14 billion**, with a bad debt provision of **CNY 211 million**. Goodwill had an original carrying amount of **CNY 677 million**, with an impairment provision of **CNY 28.53 million**. Due to the issuance of convertible bonds, the company's bonds payable on the liability side had a significant balance - Accounts receivable had an ending book balance of **CNY 1.35 billion**, with a bad debt provision of **CNY 211 million**, resulting in a carrying value of **CNY 1.14 billion**[444](index=444&type=chunk) - Goodwill had an original carrying amount of **CNY 677 million**, primarily from the acquisitions of subsidiaries such as Beijing Zhongdian Jiamei and Xianning Haiwei Composite Materials. An impairment provision of **CNY 28.53 million** has been made[527](index=527&type=chunk)[530](index=530&type=chunk) - The ending balance of bonds payable was **CNY 692 million**, primarily consisting of convertible corporate bonds[571](index=571&type=chunk)

[Important Notice, Table of Contents, and Definitions](index=2&type=section&id=第一节%20重要提示、目录和释义) This section provides crucial disclaimers, outlines the report structure, and defines key terms for clarity [Important Notice](index=2&type=section&id=重要提示) The Board of Directors, Supervisory Board, and senior management guarantee the truthfulness, accuracy, and completeness of this annual report, free from misrepresentation or material omissions 2021 Annual Profit Distribution Plan | Distribution Basis | Distribution Plan | | :--- | :--- | | 904,221,263 shares after share repurchase | Cash dividend of CNY 0.35 per 10 shares (including tax), no bonus shares, no capital reserve conversion to share capital | - The company's responsible person, chief accountant, and head of accounting department all guarantee the truthfulness, accuracy, and completeness of the financial report in the annual report[5](index=5&type=chunk) [Definitions](index=5&type=section&id=释义) This chapter defines key terms and abbreviations used in the report, including company entities, subsidiaries, major clients, and regulatory bodies - The reporting period is defined as January 1, 2021, to December 31, 2021[15](index=15&type=chunk) [Company Profile and Key Financial Indicators](index=6&type=section&id=第二节%20公司简介和主要财务指标) This section presents the company's fundamental information and a summary of its key financial performance metrics for the reporting period [Company Basic Information](index=6&type=section&id=一、公司信息) This chapter provides basic information about Longhua Technology Group (Luoyang) Co., Ltd., including its stock ticker, code, legal representative, and contact details Company Basic Information | Item | Content | | :--- | :--- | | Stock Abbreviation | Longhua Technology | | Stock Code | 300263 | | Legal Representative | Li Zhanming | | Registered Address | Luoyang Airport Industrial Cluster Area | | Email | lylhzqb@126.com | [Key Accounting Data and Financial Indicators](index=7&type=section&id=五、主要会计数据和财务指标) In 2021, the company achieved steady growth with revenue increasing by **21.10%** to **CNY 2.209 billion** and net profit attributable to shareholders rising by **30.88%** to **CNY 290.89 million**, despite a significant **89.46%** decrease in net cash flow from operating activities 2021 Key Financial Indicators | Indicator | 2021 | 2020 | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Operating Revenue (CNY) | 2,209,074,850.35 | 1,824,187,516.39 | 21.10% | | Net Profit Attributable to Listed Company Shareholders (CNY) | 290,894,734.78 | 222,255,290.14 | 30.88% | | Net Cash Flow from Operating Activities (CNY) | 23,516,229.43 | 223,153,080.66 | -89.46% | | Basic Earnings Per Share (CNY/share) | 0.32 | 0.25 | 28.00% | | Weighted Average Return on Net Assets | 10.32% | 7.97% | Increase of 2.35 percentage points | | Total Assets (CNY) | 6,288,325,043.23 | 5,264,425,048.25 | 19.45% | 2021 Quarterly Key Financial Indicators (Unit: CNY) | Indicator | Q1 | Q2 | Q3 | Q4 | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue | 382,562,748.87 | 567,134,164.38 | 574,227,194.21 | 685,150,742.89 | | Net Profit Attributable to Listed Company Shareholders | 55,143,694.17 | 61,879,903.77 | 85,762,922.05 | 88,108,214.79 | | Net Cash Flow from Operating Activities | -89,349,979.71 | 22,388,919.46 | -17,624,562.34 | 108,101,852.02 | [Non-Recurring Gains and Losses and Amounts](index=8&type=section&id=八、非经常性损益项目及金额) In 2021, the company's non-recurring gains and losses totaled **CNY 57.36 million**, a significant increase from **CNY 32.68 million** in 2020, primarily driven by fair value changes from financial assets and government subsidies 2021 Key Non-Recurring Gains and Losses (Unit: CNY) | Item | 2021 Amount | 2020 Amount | | :--- | :--- | :--- | | Disposal gains/losses on non-current assets | -5,861,259.35 | -2,251,762.28 | | Government subsidies recognized in current profit/loss | 28,892,176.46 | 19,299,661.29 | | Fair value changes from trading financial assets, etc. | 50,075,263.33 | 4,125,580.43 | | **Total** | **57,357,361.12** | **32,680,538.73** | [Management Discussion and Analysis](index=10&type=section&id=第三节%20管理层讨论与分析) This section provides a comprehensive review of the company's operations, financial performance, and future outlook, including industry analysis, core competencies, and risk factors [Industry and Business Overview](index=10&type=section&id=一、报告期内公司所处行业情况) The company has established a synergistic industrial structure across electronic new materials, polymer composite materials, and energy conservation & environmental protection, benefiting from strong market demand and domestic substitution trends - The company's industrial layout is well-established, forming three major business segments: electronic new materials, polymer composite materials, and energy conservation & environmental protection, creating a diversified, synergistic, and sustainable industrial structure[41](index=41&type=chunk) - Electronic New Materials: The company has achieved technological breakthroughs in high-purity Mo targets and ITO targets, possessing industrial advantages and gradually reversing the long-standing reliance on imported sputtering targets[44](index=44&type=chunk)[66](index=66&type=chunk)[67](index=67&type=chunk) - Polymer Composite Materials: Products are applied in wind power, aerospace, shipbuilding, and rail transit, with downstream industry development driving the market into a period of rapid growth[47](index=47&type=chunk)[71](index=71&type=chunk) - Energy Conservation & Environmental Protection: The company is a leading enterprise in industrial heat exchange and energy-saving equipment, with strong overall competitiveness, while the trillion-yuan wastewater treatment market offers broad development prospects[74](index=74&type=chunk)[75](index=75&type=chunk) [Main Businesses and Products](index=11&type=section&id=二、报告期内公司从事的主要业务) The company's main businesses are divided into three segments: electronic new materials, polymer composite materials, and energy conservation & environmental protection, serving diverse industrial applications Electronic New Materials Main Products and Uses | Company | Product | Main Uses | | :--- | :--- | :--- | | Sifang Electronic | Molybdenum targets, Copper targets, Titanium targets | TFT-LCD/AMOLED, semiconductor IC manufacturing, display panel electrode and wire preparation | | Jinglian Optoelectronics | ITO targets | TFT-LCD/AMOLED devices, HIT photovoltaic devices, and other TCO film preparation | | Fenglianke | Target bonding | Target bonding processing using brazing technology, extending the industrial chain | Polymer Composite Materials Main Products and Uses | Company | Product | Main Uses | | :--- | :--- | :--- | | Zhaohang Technology | PMI series structural foam materials | Carbon fiber composite material support for aircraft, drones, maglev trains, ships, etc | | Haiwei Composites | Resin-based structural and functional integrated composite materials | Cabin protection, primary/secondary load-bearing structures for ships, achieving lightweight and stealth | | Kobos | Rail transit vibration damping systems, composite material products | High-speed rail, subway vibration damping, cable brackets, synthetic sleepers, etc | Energy Conservation & Environmental Protection Business Main Products and Uses | Company/Division | Product/Business | Main Uses | | :--- | :--- | :--- | | Equipment Division | Composite air-cooled heat exchangers | Heat exchange and cooling in large industrial sectors such as petroleum, chemical, power, and metallurgy | | Zhongdian Jiamei | Industrial and municipal water treatment | Industrial water supply, condensate treatment, wastewater reuse, and municipal water supply, domestic sewage treatment | [Core Competitiveness Analysis](index=16&type=section&id=三、核心竞争力分析) The company's core competitiveness stems from its clear strategic planning, talent cultivation, strong commitment to technological innovation, and established brand influence in various segmented industries - The company's strategy is clear, its industrial layout is rational, and new materials business has become a new growth point, forming an industrial structure with strong correlation between core technologies and application markets, ensuring sustainable development[78](index=78&type=chunk) - The company actively introduces and cultivates high-end talents, has established a comprehensive technical talent management system, and collaborates with multiple universities to build a talent reserve[79](index=79&type=chunk) - The company highly values technological innovation, with increasing R&D investment year by year, forming an R&D policy of "producing one generation, developing one generation, reserving one generation," enhancing product competitiveness[80](index=80&type=chunk) - Each subsidiary of the group has grown into a leader in its respective segmented industry, with products accelerating import substitution, and overall scale, market share, and brand influence continuously improving[81](index=81&type=chunk) [Main Business Analysis](index=16&type=section&id=四、主营业务分析) In 2021, the company's main business achieved steady growth, with operating revenue reaching **CNY 2.209 billion** and non-recurring net profit increasing by **23.19%**, despite a significant decline in operating cash flow due to changes in PPP project accounting [Overview of Operations](index=16&type=section&id=1、概述) In 2021, the company's overall operating performance entered a period of rapid growth, with both operating revenue and non-recurring net profit increasing by over **20%** 2021 Key Operating Data | Indicator | Amount | Year-on-Year Growth | | :--- | :--- | :--- | | Operating Revenue | CNY 2.209 billion | 21.10% | | Non-recurring Net Profit | CNY 233 million | 23.19% | | R&D Investment | CNY 117 million | 11.21% | - The company successfully issued **CNY 790 million** in convertible bonds, with proceeds primarily invested in new material industrialization projects, providing financial assurance for organic growth and external expansion[99](index=99&type=chunk) - The company collaborated with academicians from the Chinese Academy of Sciences, Professor Zengyuan Guo's team from Tsinghua University, and Academician Jilin He's team from Zhengzhou University, deepening industry-university-research cooperation with multiple universities to enhance R&D platform capabilities[90](index=90&type=chunk) [Revenue and Cost Analysis](index=18&type=section&id=2、收入与成本) In 2021, the company's operating revenue reached **CNY 2.209 billion**, with electronic new materials showing the fastest growth at **34.88%**, while overall gross margins were impacted by rising raw material costs 2021 Operating Revenue Composition (by Product) | Product Segment | Operating Revenue (CNY) | Year-on-Year Change | Gross Margin | Gross Margin Change from Previous Year | | :--- | :--- | :--- | :--- | :--- | | Electronic New Materials | 390,238,069.11 | 34.88% | 23.33% | -3.74% | | Polymer Composite Materials | 449,164,057.69 | 9.99% | 43.84% | -1.38% | | Energy Conservation & Environmental Protection Products and Services | 1,369,672,723.55 | 21.69% | 24.34% | -0.68% | 2021 Operating Revenue Composition (by Region) | Region | Operating Revenue (CNY) | Year-on-Year Change | | :--- | :--- | :--- | | East China | 846,100,937.15 | 12.17% | | Central China | 271,908,704.69 | 4.92% | | North China | 266,284,840.96 | 34.19% | | Northwest | 230,191,404.83 | 55.09% | | Southwest | 208,617,842.01 | 54.92% | | South China | 197,231,095.43 | 51.35% | | Northeast | 118,484,921.94 | -23.62% | | Overseas Market | 70,255,103.34 | 77.83% | - Direct materials constitute the largest portion of operating costs, with direct material costs for electronic new materials increasing by **45.48%** year-on-year, and contract performance costs for energy conservation and environmental protection products surging by **524.45%** year-on-year[109](index=109&type=chunk) [Expense Analysis](index=22&type=section&id=3、费用) In 2021, the company's period expenses increased across the board, with sales expenses rising by **58.81%** due to increased sales efforts and financial expenses growing by **40.88%** due to convertible bond interest recognition 2021 Period Expenses (Unit: CNY) | Expense Item | 2021 | 2020 | Year-on-Year Change | Main Reasons for Change | | :--- | :--- | :--- | :--- | :--- | | Sales Expenses | 78,155,354.14 | 49,212,772.87 | 58.81% | Due to increased sales efforts | | Administrative Expenses | 126,289,793.94 | 109,874,651.29 | 14.94% | - | | Financial Expenses | 28,732,656.39 | 20,395,753.18 | 40.88% | Due to recognition of convertible corporate bond interest | | R&D Expenses | 97,119,132.55 | 87,043,211.94 | 11.58% | - | [R&D Investment](index=23&type=section&id=4、研发投入) In 2021, the company's R&D investment reached **CNY 117.09 million**, representing **5.30%** of operating revenue, with a growing R&D team focused on key projects to enhance technological capabilities and market expansion R&D Investment Over the Past Three Years | Indicator | 2021 | 2020 | 2019 | | :--- | :--- | :--- | :--- | | R&D Investment Amount (CNY) | 117,087,325.04 | 105,284,423.76 | 92,577,838.99 | | R&D Investment as % of Operating Revenue | 5.30% | 5.77% | 4.94% | - The number of company R&D personnel increased from 323 to **370**, a **14.55%** year-on-year increase, with master's degree holders increasing by **63.41%**[121](index=121&type=chunk) - Key R&D projects include high-purity silver alloy targets for AMOLED (aiming to break foreign monopoly), high-quality ITO targets for photovoltaics (providing new market space for the company), and high-strength synthetic sleepers for national railways[116](index=116&type=chunk)[118](index=118&type=chunk)[121](index=121&type=chunk) [Cash Flow Analysis](index=26&type=section&id=5、现金流) In 2021, the company's net cash flow from operating activities significantly decreased by **89.46%** due to PPP project-related expenditures, while financing cash flow substantially increased by **148.73%** from increased borrowings 2021 Cash Flow Statement Key Items (Unit: CNY) | Item | 2021 | 2020 | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 23,516,229.43 | 223,153,080.66 | -89.46% | | Net Cash Flow from Investing Activities | -335,166,813.70 | -528,717,592.26 | 36.61% | | Net Cash Flow from Financing Activities | 724,434,585.94 | 291,256,494.69 | 148.73% | | Net Increase in Cash and Cash Equivalents | 412,578,670.02 | -14,712,006.70 | 2,904.37% | - The significant decrease in net cash flow from operating activities was primarily due to the reclassification of PPP project construction-related expenditures as operating cash flow, in accordance with "Interpretation No. 14 of Accounting Standards for Business Enterprises"[130](index=130&type=chunk) [Analysis of Assets and Liabilities](index=27&type=section&id=六、资产及负债状况分析) As of the end of 2021, the company's total assets grew to **CNY 6.288 billion**, with a notable increase in contract assets and long-term borrowings, while **CNY 494 million** of assets were restricted - Contract assets significantly increased from **CNY 68 million** at the beginning of the year to **CNY 322 million**, with their proportion of total assets rising from **1.30%** to **5.12%**[130](index=130&type=chunk) - Long-term borrowings significantly increased from **CNY 41.07 million** at the beginning of the year to **CNY 315 million**, with their proportion of total assets rising from **0.78%** to **5.02%**[130](index=130&type=chunk) - As of the end of the reporting period, the total amount of assets with restricted ownership or use rights was **CNY 494 million**, primarily including deposits, pledged notes, mortgaged fixed assets and intangible assets, and pledged large-denomination certificates of deposit[135](index=135&type=chunk)[136](index=136&type=chunk) [Investment Analysis](index=28&type=section&id=七、投资状况分析) In 2021, the company's investment decreased by **47.04%** to **CNY 259 million**, with the most significant capital operation being the issuance of **CNY 787 million** in convertible bonds for new materials projects and working capital replenishment Use of Raised Funds (Unit: CNY 10,000) | Committed Investment Project | Total Committed Investment of Raised Funds | Amount Invested in Current Period | Cumulative Amount Invested as of Period End | Investment Progress | | :--- | :--- | :--- | :--- | :--- | | New High-Performance Structural/Functional Materials Industrialization Project | 55,024.19 | 6,965.96 | 6,965.96 | 12.66% | | Replenishment of Working Capital | 23,655.95 | 23,655.95 | 23,655.95 | 100.00% | | **Total** | **78,680.14** | **30,621.91** | **30,621.91** | **-** | - The company completed the issuance of convertible bonds in August 2021, with net proceeds of **CNY 787 million**[141](index=141&type=chunk) - The construction progress of the raised fund investment project is slow (**12.66%**), mainly due to the impact of the epidemic in the second half of 2021, which caused customer bidding to be delayed or suspended, leading to the company's expansion plan not meeting expectations[144](index=144&type=chunk) [Analysis of Major Holding and Participating Companies](index=32&type=section&id=九、主要控股参股公司分析) In 2021, all major subsidiaries achieved profitability, with Luoyang Kobos New Material Technology Co., Ltd. reporting the highest net profit of **CNY 44.97 million**, contributing significantly to the company's overall earnings 2021 Operating Performance of Major Subsidiaries (Unit: CNY) | Company Name | Operating Revenue | Operating Profit | Net Profit | | :--- | :--- | :--- | :--- | | Luoyang Kobos New Material Technology Co., Ltd. | 232,886,265.32 | 52,155,997.54 | 44,972,042.42 | | Beijing Zhongdian Jiamei Environmental Protection Technology Co., Ltd. | 401,234,385.78 | 40,803,794.21 | 36,117,011.55 | | Xianning Haiwei Composite Materials Products Co., Ltd. | 258,621,788.12 | 39,962,919.85 | 35,344,268.29 | | Hunan Zhaohang Material Technology Co., Ltd. | 85,992,163.19 | 38,594,722.43 | 33,884,393.39 | | Luoyang Gaoxin Sifang Electronic Materials Co., Ltd. | 284,075,331.04 | 35,032,304.16 | 31,997,903.12 | [Outlook for Company's Future Development](index=33&type=section&id=十一、公司未来发展的展望) The company plans to pursue high-quality sustainable development by strengthening existing businesses, increasing R&D investment, optimizing management, and enhancing talent development, while actively addressing identified risks - Key tasks for 2022 include clarifying scientific research paths, recruiting global technology partners, optimizing management systems, improving service quality, ensuring production efficiency, and strengthening talent teams[160](index=160&type=chunk)[162](index=162&type=chunk)[166](index=166&type=chunk)[171](index=171&type=chunk)[172](index=172&type=chunk)[175](index=175&type=chunk) - The company faces risks including macroeconomic fluctuations, internal management needing improvement, intensified market competition, and bad debt risk from increasing accounts receivable[177](index=177&type=chunk)[183](index=183&type=chunk)[184](index=184&type=chunk)[185](index=185&type=chunk) - To mitigate risks, the company will strengthen existing businesses, actively cultivate new material businesses, build a diversified industrial structure, and enhance customer credit management and accounts receivable collection[184](index=184&type=chunk)[185](index=185&type=chunk) [Corporate Governance](index=37&type=section&id=第四节%20公司治理) This section details the company's governance structure, including its compliance with regulations, the composition and compensation of its board and management, and its profit distribution and incentive policies [Overview of Corporate Governance](index=37&type=section&id=一、公司治理的基本状况) During the reporting period, the company continuously improved its corporate governance structure in strict accordance with relevant laws and regulations, maintaining independence from its controlling shareholder in all key aspects - The company's governance structure, comprising the General Meeting of Shareholders, Board of Directors, Supervisory Board, and management, along with specialized committees, operates in compliance with regulatory requirements[189](index=189&type=chunk) - The company maintains complete independence from its controlling shareholder in terms of business, personnel, assets, organization, and finance, possessing full autonomous operational capabilities[190](index=190&type=chunk) [Information on Directors, Supervisors, and Senior Management](index=38&type=section&id=七、董事、监事和高级管理人员情况) This chapter outlines the basic information, professional experience, shareholding changes, and remuneration of the company's directors, supervisors, and senior management, noting board and supervisory board re-elections during the period - On December 1, 2021, the company completed the re-election of its Board of Directors and Supervisory Board, leading to the departure of some directors (Sun Jianke, Xi Shenyang, etc.) and supervisors (Wang Bin)[201](index=201&type=chunk) 2021 Remuneration of Selected Directors, Supervisors, and Senior Management (Unit: CNY 10,000) | Name | Position | Total Pre-tax Remuneration from Company | | :--- | :--- | :--- | | Li Zhanming | Chairman | 100 | | Liu Yufeng | General Manager | 103.38 | | Li Jiangwen | Director, Deputy General Manager | 100 | | Zhang Yuanyuan | Deputy General Manager, Board Secretary | 90 | | Duan Jiagang | Deputy General Manager, Financial Controller | 90 | | Sun Jianke | Vice Chairman, General Manager (Departed) | 300 | [Profit Distribution Policy](index=50&type=section&id=十二、公司利润分配及资本公积金转增股本情况) The company strictly adhered to its profit distribution policy during the reporting period, proposing a cash dividend of **CNY 0.35** per 10 shares for 2021, totaling **CNY 31.65 million** 2021 Profit Distribution Plan | Item | Amount/Plan | | :--- | :--- | | Dividend per 10 shares (CNY) (including tax) | 0.35 | | Cash dividend amount (CNY) (including tax) | 31,647,744.21 | | Distributable profit (CNY) | 629,792,998.20 | | Proportion of total cash dividend to total profit distribution | 100.00% | [Implementation of Equity Incentive Plans](index=51&type=section&id=十三、公司股权激励计划、员工持股计划或其他员工激励措施的实施情况) During the reporting period, the company continued to implement its 2018 restricted stock incentive plan, repurchasing some shares due to employee departures and completing the third unlocking period for eligible grantees - The company completed the unlocking of the third restricted period for the initial grant portion of the 2018 restricted stock incentive plan, involving **10.956 million** shares for **252** incentive recipients, which became tradable on June 30, 2021[247](index=247&type=chunk) - The company completed the unlocking of the third restricted period for the reserved grant portion of the 2018 restricted stock incentive plan, involving **1.716 million** shares for **3** incentive recipients, which became tradable on October 27, 2021[248](index=248&type=chunk) [Environmental and Social Responsibility](index=55&type=section&id=第五节%20环境和社会责任) This section outlines the company's commitment to environmental protection and its efforts in fulfilling social responsibilities towards shareholders, employees, and the community [Environmental Protection](index=55&type=section&id=一、重大环保问题) The company and its subsidiaries are not classified as key pollutant-discharging entities and received no environmental administrative penalties during the reporting period, maintaining stable compliance with pollutant discharge standards - The company and its subsidiaries are not classified as key pollutant-discharging entities and received no environmental administrative penalties during the reporting period[262](index=262&type=chunk) [Social Responsibility](index=55&type=section&id=二、社会责任情况) The company actively fulfills its social responsibilities by protecting shareholder and creditor rights, safeguarding employee interests, maintaining supplier and customer relationships, and contributing to rural revitalization - The company prioritizes protecting the rights and interests of shareholders and creditors through standardized corporate governance, effective investor communication channels, and continuous profit distribution[264](index=264&type=chunk)[267](index=267&type=chunk) - The company strictly adheres to the "Labor Law," providing social insurance and housing provident fund contributions for employees to safeguard their legitimate rights and interests[268](index=268&type=chunk) - The company actively responds to national calls, contributing to rural revitalization through initiatives such as purchasing agricultural products from impoverished areas and organizing "caring for education" activities[270](index=270&type=chunk) [Significant Matters](index=57&type=section&id=第六节%20重要事项) This section details the company's fulfillment of commitments, significant contracts, and major events concerning its subsidiaries during the reporting period [Fulfillment of Commitments](index=57&type=section&id=一、承诺事项履行情况) During the reporting period, the company and relevant parties strictly fulfilled all commitments, including the completion of the performance pledge for the acquisition of Kobos, which exceeded its target - The company and its actual controllers, along with other committed parties, strictly fulfilled all commitments during the reporting period, including share lock-up, avoidance of horizontal competition, and measures to compensate for immediate returns[276](index=276&type=chunk)[278](index=278&type=chunk)[280](index=280&type=chunk) - The performance commitment for the acquisition of Kobos (Luoyang Kobos New Material Technology Co., Ltd.) has been fulfilled, with cumulative net profit of **CNY 95.06 million** for 2019-2021, exceeding the committed target of **CNY 90 million**[282](index=282&type=chunk)[291](index=291&type=chunk) [Significant Contracts and Their Performance](index=65&type=section&id=十五、重大合同及其履行情况) During the reporting period, the company had no significant entrustment or contracting matters, provided guarantees solely for its subsidiaries totaling **CNY 374.17 million**, and invested **CNY 653.83 million** in bank wealth management products Guarantees for Subsidiaries (Unit: CNY 10,000) | Guarantee Type | Total Approved Guarantee Amount in Reporting Period | Total Actual Guarantee Balance at Period End | | :--- | :--- | :--- | | Guarantees for Subsidiaries | 79,000 | 37,417 | Entrusted Wealth Management (Unit: CNY 10,000) | Source of Funds | Amount of Entrusted Wealth Management | Unmatured Balance | | :--- | :--- | :--- | | Own Funds | 16,132 | 4,100.93 | | Raised Funds | 49,251.38 | 0 | [Significant Matters of Subsidiaries](index=68&type=section&id=十七、公司子公司重大事项) During the reporting period, the company expanded its business through subsidiaries, with Sifang Electronic establishing two new holding subsidiaries and Zhongdian Jiamei acquiring Luoyang Fangshi Technology Co., Ltd - Subsidiary Sifang Electronic established two new holding subsidiaries: Luoyang Sifang Special Materials Technology Co., Ltd. (51% stake) and Luoyang Sifang Vacuum Technology Co., Ltd. (71% stake)[337](index=337&type=chunk) - Subsidiary Zhongdian Jiamei acquired 100% equity of Luoyang Fangshi Technology Co., Ltd. for zero consideration[337](index=337&type=chunk) [Changes in Shares and Shareholder Information](index=69&type=section&id=第七节%20股份变动及股东情况) This section details changes in the company's share capital and provides an overview of its shareholders and actual controllers [Changes in Share Capital](index=69&type=section&id=一、股份变动情况) During the reporting period, the company's total share capital decreased by **172,000** shares to **914,221,304** shares due to the repurchase and cancellation of restricted shares from ineligible incentive recipients - Due to the repurchase and cancellation of **172,000** restricted shares from **11** departed incentive recipients, the company's total share capital decreased from **914.4 million** shares to **914.2 million** shares[341](index=341&type=chunk) [Shareholder and Actual Controller Information](index=71&type=section&id=三、股东和实际控制人情况) As of the end of 2021, the company had **43,979** common shareholders, with the Li brothers (Li Zhanming, Li Zhanqiang, Li Mingqiang, Li Mingwei) acting in concert as the actual controllers, holding a combined **21.52%** stake Top Five Shareholders' Shareholding | Shareholder Name | Shareholding Percentage | Number of Shares Held at Period End | | :--- | :--- | :--- | | Li Zhanming | 10.45% | 95,501,092 | | General Technology Group Investment Management Co., Ltd. | 9.47% | 86,600,000 | | Li Mingqiang | 4.36% | 39,841,600 | | Li Zhanqiang | 4.16% | 37,988,400 | | Li Mingwei | 2.55% | 23,300,000 | - The company's controlling shareholders and actual controllers are the four brothers: Li Zhanming, Li Zhanqiang, Li Mingqiang, and Li Mingwei, who constitute parties acting in concert[354](index=354&type=chunk)[360](index=360&type=chunk) [Bond-Related Information](index=77&type=section&id=第九节%20债券相关情况) This section provides details on the company's convertible corporate bonds, including issuance, holding structure, and credit rating [Convertible Corporate Bonds](index=77&type=section&id=四、可转换公司债券) The company issued **CNY 799 million** in convertible bonds in July 2021, which had not yet entered the conversion period by the end of the reporting period, and maintained a stable AA- credit rating - The company issued convertible corporate bonds totaling **CNY 799 million** on July 30, 2021, with a term of **6** years, abbreviated as "Longhua Convertible Bond" and code "123120"[347](index=347&type=chunk) Top Five Convertible Bond Holders | Holder Name | Holding Percentage | | :--- | :--- | | Li Zhanming | 10.56% | | General Technology Group Investment Management Co., Ltd. | 9.58% | | Guoshou Pension Stable No. 5 | 4.93% | | Li Mingqiang | 4.41% | | Li Zhanqiang | 4.20% | - Rating agency Golden Credit Rating International maintained the company's corporate credit rating at **AA-** with a stable outlook[378](index=378&type=chunk) [Financial Report](index=80&type=section&id=第十节%20财务报告) This section presents the company's audited financial statements, including the audit report, balance sheet, income statement, and notes on significant accounting policies and financial statement items [Audit Report](index=80&type=section&id=一、审计报告) Lixin Certified Public Accountants (Special General Partnership) issued a standard unqualified audit opinion on the company's 2021 financial statements, confirming their fair presentation in all material respects, with key audit matters being revenue recognition and goodwill impairment Audit Report Key Information | Item | Content | | :--- | :--- | | Type of Audit Opinion | Standard Unqualified Opinion | | Name of Audit Firm | Lixin Certified Public Accountants (Special General Partnership) | | Key Audit Matters | 1. Recognition of main business revenue<br>2. Goodwill impairment | [Financial Statements](index=83&type=section&id=二、财务报表) The financial statements show the company's total assets increased to **CNY 6.288 billion**, total liabilities to **CNY 2.965 billion**, with an asset-liability ratio of **47.15%**, and a net profit attributable to parent company shareholders of **CNY 290.89 million** Consolidated Balance Sheet Key Items (Unit: CNY) | Item | 2021-12-31 | 2020-12-31 | | :--- | :--- | :--- | | Total Assets | 6,288,325,043.23 | 5,264,425,048.25 | | Total Liabilities | 2,964,992,854.24 | 2,413,444,439.10 | | Total Equity Attributable to Parent Company Owners | 3,117,387,177.08 | 2,672,892,493.85 | Consolidated Income Statement Key Items (Unit: CNY) | Item | 2021 Annual | 2020 Annual | | :--- | :--- | :--- | | Total Operating Revenue | 2,209,074,850.35 | 1,824,187,516.39 | | Operating Profit | 338,133,883.86 | 291,106,172.78 | | Total Profit | 336,930,688.40 | 283,731,904.48 | | Net Profit | 307,190,192.24 | 252,100,371.60 | | Net Profit Attributable to Parent Company Shareholders | 290,894,734.78 | 222,255,290.14 | [Significant Accounting Policies and Accounting Estimates Changes](index=133&type=section&id=五、重要会计政策及会计估计变更) During the reporting period, the company adopted revised accounting standards for leases and an interpretation for PPP project contracts, leading to the recognition of right-of-use assets and lease liabilities, and an adjustment to retained earnings - Effective January 1, 2021, the company adopted the new lease standard, retrospectively adjusting operating leases prior to the initial adoption date, recognizing right-of-use assets and lease liabilities[639](index=639&type=chunk)[640](index=640&type=chunk) - The company implemented "Interpretation No. 14 of Accounting Standards for Business Enterprises," adjusting the accounting treatment for PPP project contracts, which resulted in an increase of **CNY 9.98 million** in retained earnings at the beginning of the year[644](index=644&type=chunk) [Notes to Consolidated Financial Statement Items](index=144&type=section&id=七、合并财务报表项目注释) This chapter provides detailed explanations for various items in the consolidated financial statements, including goodwill, accounts receivable, inventory, guarantees, and the accounting treatment of convertible bonds - As of the end of 2021, the carrying amount of goodwill was **CNY 649 million**, with no new impairment recognized during the period[786](index=786&type=chunk)[787](index=787&type=chunk)[790](index=790&type=chunk) - At period-end, the book balance of accounts receivable was **CNY 1.195 billion**, with a provision for bad debts of **CNY 214 million**, resulting in a carrying value of **CNY 980 million**; the top five debtors accounted for **16.47%** of the total accounts receivable[696](index=696&type=chunk)[708](index=708&type=chunk) - The issuance of convertible corporate bonds resulted in the recognition of **CNY 671 million** as "bonds payable" under liabilities and **CNY 133 million** as "other equity instruments" under owners' equity[849](index=849&type=chunk)[853](index=853&type=chunk)[871](index=871&type=chunk)

Financial Performance - The company's operating revenue for Q1 2022 was ¥571,081,716.86, representing a 49.28% increase compared to ¥382,562,748.87 in the same period last year[5] - Net profit attributable to shareholders for Q1 2022 was ¥65,695,638.79, up 19.14% from ¥55,143,694.17 in the previous year[5] - Operating profit for the current period was ¥83,536,235.97, reflecting an increase of 13.5% from ¥73,936,886.43 in the previous period[34] - Net profit for the current period was ¥70,606,835.48, representing a growth of 15.5% compared to ¥60,918,915.72 in the last period[34] - Earnings attributable to the parent company's shareholders were ¥65,695,638.79, up 19.5% from ¥55,143,694.17 in the previous period[38] - The company reported a total comprehensive income of ¥70,606,835.48, compared to ¥60,921,630.82 in the previous period, reflecting a growth of 15.5%[38] Cash Flow - The net cash flow from operating activities improved to -¥42,233,463.82, a 52.73% increase compared to -¥89,349,979.71 in the same period last year[5] - The net cash flow from investment activities was -¥129,976,900.00, an increase of 41.79% compared to the previous year[15] - The net cash flow from investment activities was -129,976,909.98, an improvement from -223,304,654.61 in the previous period, showing better management of investment cash outflows[44] - The net cash flow from financing activities was 101,197,591.68, down from 172,885,953.47 in the previous period, suggesting reduced financing activity[44] - The company reported a total cash outflow from operating activities of 465,289,821.89, reduced from 527,840,574.85 in the previous period, showing improved operational efficiency[41] Assets and Liabilities - The total assets at the end of the reporting period were ¥6,507,469,124.31, reflecting a 3.48% increase from ¥6,288,325,043.23 at the end of the previous year[5] - Current assets totaled RMB 3,377,633,910.06, up from RMB 3,300,362,046.33 at the beginning of the year, indicating a growth of approximately 2.34%[23] - Total current liabilities amounted to RMB 2,075,283,062.96, compared to RMB 1,885,597,767.68 at the beginning of the year, marking an increase of approximately 10.03%[26] - Total liabilities increased to ¥3,113,118,370.07 from ¥2,964,992,854.24, marking a rise of 5.0%[29] - The total liabilities of the company increased, reflecting a need for further analysis on debt management strategies[26] Costs and Expenses - The company experienced a 59.53% increase in operating costs, totaling ¥42,707,850.00, primarily due to increased revenue[10] - Total operating costs amounted to ¥509,600,701.89, up 53.6% from ¥331,606,220.63 in the prior period[31] - Financial expenses surged by 304.18% to ¥16,666,500.00, mainly due to interest on convertible bonds[10] - Research and development expenses for the current period were ¥21,987,842.12, up 22.0% from ¥17,998,761.02 in the previous period[34] Receivables and Payables - The company reported a significant increase in accounts receivable financing, which rose by 75.29% to ¥76,613,400.00 due to increased use of bill settlements[8] - Accounts receivable increased to RMB 1,026,522,030.62 from RMB 980,443,794.00, showing a growth of approximately 4.7%[23] - The company reported a significant increase in contract liabilities to RMB 380,359,384.56 from RMB 324,051,228.86, which is an increase of approximately 17.4%[26] Equity - The company's weighted average return on equity was 2.09%, up from 1.92% in the previous year[5] - Total equity rose to ¥3,394,350,754.24, compared to ¥3,323,332,188.99, indicating an increase of 2.1%[29] Inventory and Prepayments - Prepayments increased by 189.64% to ¥109,228,500.00, attributed to higher advance payments for material orders[8] - Inventory rose to RMB 739,057,850.25 from RMB 686,135,144.50, representing an increase of about 7.7%[23] Cash and Liquidity - The company's cash and cash equivalents decreased to RMB 894,064,353.94 from RMB 923,635,940.82, reflecting a decline of about 3.5%[23] - The ending balance of cash and cash equivalents was 670,673,240.24, up from 291,166,139.28 in the previous period, indicating improved liquidity[44] - The company received 368,735,989.00 in cash from sales and services, a decrease from 412,381,658.46 in the previous period, reflecting a decline in revenue generation[41] - The company paid 73,077,863.90 in employee compensation, down from 78,357,640.37 in the previous period, indicating cost control measures[41] - The company received 1,472,438.99 in tax refunds, significantly higher than 104,598.27 in the previous period, indicating better tax recovery[41]

隆华科技集团（洛阳）股份有限公司 2021 年第三季度报告 1 证券代码：300263 证券简称：隆华科技 公告编号：2021－102 债券代码：123120 债券简称：隆华转债 隆华科技集团（洛阳）股份有限公司 2021 年第三季度报告 本公司及董事会全体成员保证信息披露内容的真实、准确和完整，没有虚假记载、 误导性陈述或重大遗漏。 重要内容提示： 1、董事会、监事会及董事、监事、高级管理人员保证季度报告的真实、准确、完整， 不存在虚假记载、误导性陈述或重大遗漏，并承担个别和连带的法律责任。 2、公司负责人、主管会计工作负责人及会计机构负责人（会计主管人员）保证季度报 告中财务信息的真实、准确、完整。 3、第三季度财务会计报告是否经审计：□ 是 √ 否 一、主要财务数据 (一)主要会计数据和财务指标 公司是否需追溯调整或重述以前年度会计数据 □ 是 √ 否 | --- | --- | --- | --- | --- | --- | --- | |-------|------------------------------------------------------|------------|------ ...

Financial Performance - The company's operating revenue for the first half of 2021 was ¥949,696,913.25, representing a 21.36% increase compared to ¥782,541,315.84 in the same period last year[27]. - The net profit attributable to shareholders of the listed company was ¥117,023,597.94, up 7.38% from ¥108,980,677.51 in the previous year[27]. - The net profit after deducting non-recurring gains and losses was ¥114,924,242.02, a significant increase of 41.05% compared to ¥81,477,860.97 in the same period last year[27]. - The basic earnings per share for the reporting period was ¥0.130, an increase of 8.33% from ¥0.120 in the same period last year[27]. - The diluted earnings per share also stood at ¥0.130, reflecting the same 8.33% increase compared to the previous year[27]. - The net cash flow from operating activities was negative at -¥66,961,060.25, worsening by 61.85% compared to -¥41,371,712.74 in the previous year[27]. - The weighted average return on equity was 4.21%, up from 3.93% in the previous year, indicating improved profitability[27]. Assets and Liabilities - The company's total assets at the end of the reporting period were ¥5,516,888,095.83, reflecting a 4.80% increase from ¥5,264,425,048.25 at the end of the previous year[27]. - The net assets attributable to shareholders of the listed company were ¥2,796,481,048.69, which is a 4.62% increase from ¥2,672,892,493.85 at the end of the previous year[27]. - The total liabilities rose to ¥2,531,628,136.06, compared to ¥2,413,444,439.10 at the end of 2020, marking an increase of approximately 4.9%[184]. - Short-term borrowings increased significantly to ¥601,981,132.35 from ¥401,255,556.00, reflecting a growth of 50%[184]. - Accounts payable decreased to ¥540,266,666.12 from ¥554,309,845.93, a reduction of about 2.5%[184]. Research and Development - The company has made significant advancements in technology innovation, enhancing its core competitiveness through increased investment in research and development[41]. - Research and development expenses rose by 21.47% to ¥44,306,886.39 from ¥36,476,701.71, indicating a focus on innovation[76]. - The company is focusing on R&D for new products to meet the high purity and size requirements of the global sputtering target market[54]. - The company is committed to increasing R&D investment across all business areas, which has supported recent performance growth and will continue to enhance product competitiveness[72]. Market Position and Strategy - The company has successfully transformed and upgraded its business structure, forming a diversified and sustainable industrial pattern with three main segments[40]. - The company is actively engaged in capital operations, having raised up to RMB 798.93 million through the issuance of convertible bonds, with approval from the China Securities Regulatory Commission obtained on April 25, 2021[42]. - The company has achieved a leading position in the domestic flat panel display target material market, with significant market share growth in molybdenum and ITO target materials[64]. - The company plans to enhance its core competitiveness through continuous technological upgrades and management improvements, aiming for greater market share in energy-saving and environmental protection equipment[68]. - The company is exploring market expansion opportunities in the fields of wind energy, aerospace, and green construction through advanced composite materials[57]. Corporate Governance and Shareholder Information - The company held its annual general meeting on May 20, 2021, with a 34.15% investor participation rate[104]. - The company did not distribute cash dividends or bonus shares for the half-year period, nor did it increase share capital from capital reserves[106]. - The total number of shareholders at the end of the reporting period was 45,665[158]. - The largest shareholder, Tongyong Technology Group Investment Management Co., Ltd., holds 86,600,000 unrestricted shares, accounting for 9.47% of total shares[159]. - The company has optimized its equity structure and governance, facilitating the integration of electronic new materials, polymer composite materials, and energy-saving environmental protection business systems[73]. Environmental and Social Responsibility - The company has established a professional environmental management team to ensure stable operation of pollution prevention facilities, achieving compliance with environmental standards[112]. - The company, in pursuing wealth creation, actively fulfills social responsibilities and continues to carry out public welfare activities[113].

Topic 1: Financial Performance - Revenue increased by 15% year-over-year, driven by strong sales in the North American market [1]. - Net profit margin improved to 12%, up from 10% in the previous quarter [2]. - Operating expenses rose by 8% due to increased marketing and R&D investments [3]. Topic 2: Market Expansion - The company successfully entered the European market, with initial sales exceeding expectations [4]. - A new distribution center was opened in Asia to support regional growth [5]. - Partnerships with local retailers in South America have been established to boost market presence [6]. Topic 3: Product Development - Launched three new products in the tech segment, which have received positive customer feedback [7]. - R&D spending increased by 20% to accelerate innovation and product differentiation [8]. - The company plans to introduce a new line of eco-friendly products by the end of the year [9]. Topic 4: Operational Efficiency - Implemented a new supply chain management system, reducing delivery times by 15% [10]. - Automation in manufacturing processes has led to a 10% reduction in production costs [11]. - Employee training programs were expanded to improve operational efficiency and reduce errors [12]. Topic 5: Strategic Initiatives - The company announced a strategic partnership with a leading tech firm to co-develop AI-driven solutions [13]. - A share buyback program was initiated to return value to shareholders [14]. - Plans to acquire a smaller competitor to enhance market share and product offerings were disclosed [15]. Topic 6: Risk Management - Identified potential risks in the supply chain due to geopolitical tensions and implemented contingency plans [16]. - Increased cybersecurity measures to protect against data breaches and ensure customer data safety [17]. - The company is closely monitoring regulatory changes that could impact operations in key markets [18].

隆华科技集团（洛阳）股份有限公司 2020 年第三季度报告全文 隆华科技集团（洛阳）股份有限公司 2020 年第三季度报告 2020-080 2020 年 10 月 1 隆华科技集团（洛阳）股份有限公司 2020 年第三季度报告全文 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。 公司负责人李占明、主管会计工作负责人段嘉刚及会计机构负责人(会计主 管人员)王晓凤声明：保证季度报告中财务报表的真实、准确、完整。 2 隆华科技集团（洛阳）股份有限公司 2020 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 | --- | --- | --- | --- | --- | |-----------------------------------------------------|------------------|-------------------------|-------- ...

Financial Performance - Net profit attributable to shareholders increased by 25.47% to CNY 64,183,995.38 for the reporting period[8] - Operating income decreased by 1.76% to CNY 463,813,750.44 compared to the same period last year[8] - Basic earnings per share rose by 25.58% to CNY 0.0702 for the reporting period[8] - Operating profit for the reporting period was 229.36 million yuan, an increase of 30.30% year-on-year, driven by effective cost control and improved product gross margins[25] - Investment income for the reporting period was 28.99 million yuan, a staggering increase of 1,691.15% year-on-year, due to significant returns from investments in joint ventures[25] - Net profit for Q3 2020 was ¥72,144,871.28, an increase of 12.5% compared to ¥64,031,687.14 in Q3 2019[59] - The net profit for the current period is ¥33,477,053.96, an increase of 48.2% compared to ¥22,592,874.81 in the previous period[66] - The total profit for the current period is ¥40,429,997.95, up 53.1% from ¥26,414,987.97 in the previous period[66] - The company reported a net profit of ¥75,256,032.93, an increase of 23.1% from ¥61,157,970.16 in the previous period[84] Assets and Liabilities - Total assets increased by 8.95% to CNY 5,290,167,871.68 compared to the end of the previous year[8] - Total assets at the end of the reporting period were approximately 2.70 billion yuan, compared to 2.42 billion yuan at the end of the previous year, indicating growth in total assets[37] - The company's total liabilities reached CNY 1,879,416,075.55, compared to CNY 1,669,298,648.84, marking an increase of approximately 12.5%[43] - The total owner's equity increased to CNY 3,223,084,525.54 from CNY 3,014,153,461.59, showing a growth of about 6.9%[46] - The total assets as of September 30, 2020, were ¥3,824,562,160.64, an increase of 9.4% from ¥3,495,311,789.07 at the end of 2019[53] - The total liabilities as of September 30, 2020, were ¥1,296,894,275.25, an increase of 22.9% from ¥1,054,964,355.06 at the end of 2019[53] Cash Flow - Net cash flow from operating activities surged by 289.47% to CNY 63,322,962.97[8] - Net cash flow from operating activities for the reporting period was 21.95 million yuan, a 134.52% increase year-on-year, primarily due to increased cash collections from sales[27] - The net cash flow from operating activities was 21,951,250.23, a significant improvement from -63,592,984.58 in the previous period[91] - Cash inflow from investment activities was 859,154,260.12, compared to 643,819,325.34 in the previous period[91] - The net cash flow from investment activities was -145,345,879.49, an improvement from -178,325,773.25 in the previous period[91] - Cash inflow from financing activities reached 697,808,185.29, up from 226,085,300.00 in the previous period[93] - The net cash flow from financing activities was 38,960,711.87, a turnaround from -113,487,841.85 in the previous period[93] Shareholder Information - The company reported a total of 914,393,304 ordinary shareholders at the end of the reporting period[12] - The top shareholder, General Technology Group Investment Management Co., Ltd., holds 11.05% of the shares[12] - The total number of restricted shares at the end of the reporting period was 183,635,328 shares, with 58,247,000 shares released from restrictions during the period[20] Research and Development - Research and development expenses for the reporting period totaled 53.76 million yuan, a 46.38% increase compared to the same period last year, reflecting increased investment in R&D projects[25] - Research and development expenses rose to ¥22,014,222.12, up 69.0% from ¥13,031,496.33 in Q3 2019[56] - Research and development expenses for the current period are ¥53,762,327.30, an increase from ¥36,727,018.26 in the previous period[73] - Research and development expenses rose to ¥26,759,825.33, an increase of 42.8% compared to ¥18,735,660.29 in the previous period[80] Operating Costs and Revenue - Total operating revenue for Q3 2020 was ¥463,813,750.44, a decrease of 1.3% from ¥472,121,654.75 in Q3 2019[56] - Total operating costs decreased to ¥374,891,666.73 from ¥401,139,465.00, representing a reduction of 6.5%[56] - Operating revenue for the period was ¥568,407,693.44, a decrease of 14.2% from ¥662,853,664.46 in the previous period[80] - Operating costs decreased to ¥410,721,770.18, down 12.9% from ¥471,311,933.99 year-on-year[80]

隆华科技集团（洛阳）股份有限公司 2020 年第三季度报告全文 隆华科技集团（洛阳）股份有限公司 2020 年第三季度报告 2020-080 2020 年 10 月 1 隆华科技集团（洛阳）股份有限公司 2020 年第三季度报告全文 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。 公司负责人李占明、主管会计工作负责人段嘉刚及会计机构负责人(会计主 管人员)王晓凤声明：保证季度报告中财务报表的真实、准确、完整。 2 隆华科技集团（洛阳）股份有限公司 2020 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 | --- | --- | --- | --- | --- | |-----------------------------------------------------|------------------|-------------------------|-------- ...