Revenue and Profitability - The company's revenue for Q1 2022 was ¥326,553,622.31, representing a 34.64% increase compared to ¥242,538,839.02 in the same period last year[7]. - The net profit attributable to shareholders was a loss of ¥114,999,926.42, which is a 154.01% increase in loss compared to a loss of ¥45,273,468.89 in the previous year[7]. - The company's diluted earnings per share for Q1 2022 was -¥0.1439, reflecting a 153.79% increase in loss compared to -¥0.0567 in the same period last year[7]. - The net profit for Q1 2022 was a loss of CNY 118,454,561.07, worsening from a loss of CNY 40,830,887.79 in Q1 2021[41]. - The total comprehensive income attributable to the parent company was -$111.08 million, compared to -$42.96 million in the previous period[44]. - The basic earnings per share were -$0.1440, compared to -$0.0567 in the previous period, reflecting a decline in performance[44]. Cash Flow - The net cash flow from operating activities was ¥12,607,126.92, a significant improvement of 156.61% from -¥22,271,200.71 in the same period last year[7]. - The net cash flow from investing activities was -¥82,121,234.92, a decline of 222.08% compared to ¥67,267,226.70 in the previous year, mainly due to reduced purchases of financial products[17]. - Cash inflows from operating activities totaled $798.84 million, up from $590.85 million in the previous period, showing a positive trend in cash generation[48]. - The net cash flow from operating activities was $12.61 million, a recovery from a negative $22.27 million in the previous period[48]. - The net cash flow from investing activities was -$82.12 million, compared to a positive $67.27 million in the previous period, indicating increased investment outflows[51]. - The net cash flow from financing activities was -$10.72 million, compared to -$219.20 million in the previous period, showing a reduction in cash outflows[51]. - The cash and cash equivalents at the end of the period were $574.14 million, compared to $416.38 million at the end of the previous period, indicating improved liquidity[51]. Assets and Liabilities - The total assets at the end of the reporting period were ¥4,522,743,567.43, a decrease of 5.08% from ¥4,765,042,452.58 at the end of the previous year[7]. - Total current assets decreased from RMB 3,175,784,853.40 at the beginning of the year to RMB 2,903,119,209.42 at the end of the reporting period[29]. - Total liabilities decreased to CNY 973,236,264.32 in Q1 2022 from CNY 1,129,199,294.49 in Q1 2021, a reduction of approximately 13.8%[36]. - The company's equity attributable to shareholders decreased to CNY 3,549,214,610.48 in Q1 2022 from CNY 3,636,090,709.45 in Q1 2021, a decline of about 2.4%[36]. Expenses - Research and development expenses increased by 62.14% to ¥141,489,251.62, driven by higher personnel costs and related operational expenses[11]. - Total operating costs for Q1 2022 were CNY 469,726,863.40, up from CNY 316,736,767.15 in Q1 2021, indicating an increase of about 48.2%[41]. - Financial expenses surged by 1636.18% to ¥2,009,807.11, primarily due to foreign exchange losses[16]. - R&D expenses in Q1 2022 reached CNY 141,489,251.62, compared to CNY 87,264,379.60 in Q1 2021, reflecting a rise of approximately 62.2%[41]. Shareholder Information - Total number of common shareholders at the end of the reporting period was 35,256[21]. - The largest shareholder, Shen Jiya, holds 10.05% of shares, totaling 80,250,145 shares[21]. - The second largest shareholder, China Electronics Technology Group (Chengdu) Investment Fund Management Co., holds 7.01% of shares, totaling 55,984,059 shares[21]. - The company has a total of 15,938,436 shares held in the repurchase special account, accounting for 2.00% of the total share capital[24]. Other Activities - The company established the Beijing Green Alliance Public Welfare Foundation, incurring donation expenses of ¥8,000,000 during the reporting period[11]. - The company plans to establish a public welfare foundation with an investment of RMB 8 million[26]. - The company terminated a share transfer agreement for 40,000,000 shares originally planned to be sold at RMB 15.30 per share[26].

Financial Performance - The company's operating revenue for 2021 was ¥2,608,995,096.45, representing a 29.80% increase compared to ¥2,010,044,336.08 in 2020[29]. - The net profit attributable to shareholders for 2021 was ¥344,541,707.28, an increase of 14.42% from ¥301,128,591.09 in 2020[29]. - The net profit attributable to shareholders after deducting non-recurring gains and losses decreased by 8.64% to ¥235,867,508.01 in 2021 from ¥258,162,527.08 in 2020[29]. - The net cash flow from operating activities for 2021 was ¥75,871,779.87, a significant decrease of 82.99% compared to ¥446,115,488.46 in 2020[29]. - The total assets at the end of 2021 were ¥4,765,042,452.58, an increase of 8.94% from ¥4,373,868,083.68 at the end of 2020[29]. - The net assets attributable to shareholders at the end of 2021 were ¥3,636,090,709.45, up 3.99% from ¥3,496,691,687.45 at the end of 2020[29]. - The basic earnings per share for 2021 was ¥0.44, a 15.79% increase from ¥0.38 in 2020[29]. - The company's total revenue for the fiscal year 2021 was approximately ¥2,607,988,893.27, representing a year-on-year increase of 29.81%[110]. - The net profit attributable to shareholders for Q1 2021 was approximately -¥45,273,468.8, while the annual net profit for 2021 was approximately ¥374,833,924[104]. - Revenue from security products reached approximately ¥1,602,401,211.98, accounting for 61.42% of total revenue, with a year-on-year growth of 19.48%[108]. Market Position and Strategy - The company is positioned to benefit from the increasing demand for cybersecurity solutions driven by the growth of the digital economy and new technologies[43]. - The company holds a leading market share of 24.2% in the domestic anti-DDoS hardware security product market, according to IDC 2021[60]. - The company's WEB application firewall (WAF) system has a market share of 14.3%, ranking first in China's hardware WAF market[60]. - The company is recognized as a leading brand in the domestic cybersecurity industry and has participated in major national security projects, enhancing its market position[95]. - The company maintains a leading market share in the cybersecurity sector, consistently ranking first in market share or competitive strength in various reports[95]. - The company aims to expand and consolidate its leading position in the domestic information security industry, focusing on market strategy, technology R&D, and operational management to increase market share and brand image[156]. Product Development and Innovation - The company launched 12 new products in 2021, expanding its product categories to over 70, including solutions for cloud security, industrial security, and threat intelligence[53]. - The company has established eight laboratories dedicated to research in cloud computing security, industrial internet security, and data intelligence security, enhancing its core competitiveness[53]. - The company emphasizes independent research and development, with a strategy driven by customer needs and key technological innovations[55]. - The company launched several new products, including the Green Alliance Integrated Terminal Security Management System V6.0 and the Green Alliance Network Traffic Analysis System NTA V4.5, enhancing its competitive edge[135]. - The company is focusing on zero-trust solutions, integrating various technologies to enhance security capabilities and address diverse user scenarios[135]. Talent and Human Resources - The company faces risks related to the loss of core personnel, which could impact product development and necessitate additional resources for recruitment and training[8]. - The company emphasizes the importance of maintaining a stable core employee base through stock ownership plans and performance-based compensation systems[11]. - The company has implemented a talent development strategy to enhance employee training and retention, aiming to cultivate a skilled workforce for future growth[11]. - The number of R&D personnel increased by 33.30% year-on-year to 1,237, accounting for 27.97% of the total workforce[130]. - Total R&D investment reached ¥535,858,750.17, representing 20.54% of operating revenue, an increase from 18.18% in the previous year[132]. Risk Management - The company acknowledges the risks associated with expanding into overseas markets, including local operating environments, policies, regulations, and foreign exchange fluctuations[12]. - The company's annual report highlights the need for investors to be aware of the risks associated with seasonal revenue fluctuations and the potential impact on overall profitability[6]. - The company is subject to a 10% corporate income tax rate due to its qualification as a key software enterprise under national policies, which could be adversely affected by future changes in tax incentives[7]. Governance and Compliance - The company has held multiple shareholder meetings during the reporting period to ensure compliance with governance standards and protect shareholder interests[167]. - The company has no controlling shareholder or actual controller, ensuring independence in operations, assets, and finances[173]. - The board of directors held 11 meetings during the reporting period, adhering to established rules for effective decision-making[168]. - The supervisory board consists of 3 members, including 1 employee supervisor, and held 8 meetings in the reporting period to oversee financial and operational compliance[169]. - The company maintains a transparent information disclosure system, ensuring timely and accurate communication with all shareholders[170]. Cash Flow and Investments - Operating cash inflow totaled CNY 2,669,360,797.66, an increase of 23.26% compared to CNY 2,165,690,143.34 in 2020[136]. - Net cash flow from operating activities decreased by 82.99% to CNY 75,871,779.87 from CNY 446,115,488.46 in the previous year[139]. - Investment cash inflow increased by 15.51% to CNY 3,456,070,912.09, while investment cash outflow decreased by 15.58% to CNY 3,153,816,933.52[136]. - The net increase in cash and cash equivalents was CNY 66,037,517.42, compared to a decrease of CNY 421,201,161.22 in the previous year, marking an 11.20% improvement[136]. Awards and Recognition - The company was awarded the "2021 Excellent Application Case in Industrial Information Security" and "2021 Excellent Member Unit" by the Industrial Information Security Industry Development Alliance[68]. - The company’s data desensitization system won the "2021 Annual Network Innovation Product" award at the China Digitalization Conference[66]. - The company has received multiple awards in 2021, including the "2021 Annual Cloud Security Solution Award" and "2021 Annual Anti-Fraud Solution Award" for its innovative solutions[84]. - The company was recognized as a Representative Vendor in the Gartner 2021 Market Guide for Security Threat Intelligence Products and Services, being the only domestic vendor mentioned in the intelligence subscription service category[77].

Financial Performance - The company's revenue for Q3 2021 was ¥460,218,049.96, representing a 17.08% increase year-over-year, while the revenue for the first nine months reached ¥1,232,032,506.68, up 30.67% compared to the same period last year[3] - Total operating revenue for the third quarter reached ¥1,232,032,506.68, an increase of 30.7% compared to ¥942,859,525.61 in the same period last year[33] - Total operating costs amounted to ¥1,331,962,081.64, up from ¥1,006,559,796.15, reflecting a year-over-year increase of 32.3%[33] - The company reported a net loss from operating profit of ¥36,074,827.37, contrasting with a profit of ¥3,945,890.99 in the same quarter last year[33] - The net profit for the period was -30,458,058.63, compared to -8,050,150.92 in the previous period, indicating a significant increase in losses[36] - The basic and diluted earnings per share were both -0.0389, a decline from -0.0098 in the previous period[39] - The total comprehensive income attributable to the parent company was -28,243,614.64, compared to -9,920,955.90 in the previous period[36] Cash Flow and Liquidity - The company's cash flow from operating activities for the first nine months was ¥20,010,518.89, reflecting a significant decline of 90.09% year-over-year[3] - Cash flow from operating activities generated a net amount of 20,010,518.89, down from 202,022,074.06 in the previous period[41] - The company reported a total operating cash inflow of 1,801,931,094.63, an increase from 1,452,989,231.89 in the previous period[41] - Total cash inflow from investment activities was 2,769,571,661.65, compared to 1,339,995,326.07 in the previous period, showing a substantial increase[43] - The net cash flow from investment activities was 112,573,689.70, a recovery from a negative cash flow of -913,292,330.48 in the previous period[43] - Cash and cash equivalents at the end of the period totaled 385,381,055.59, compared to 259,356,938.67 in the previous period[43] - The company's cash and cash equivalents decreased to approximately RMB 472.49 million from RMB 636.85 million, representing a decline of 25.7%[22] Assets and Liabilities - Total assets as of September 30, 2021, were ¥3,977,186,971.63, a decrease of 9.07% from the end of the previous year[3] - Total assets decreased to ¥3,977,186,971.63 from ¥4,373,868,083.68, representing a decline of 9%[29] - The company's total equity attributable to shareholders decreased by 7.94% to ¥3,219,143,957.18 compared to the end of the previous year[3] - The company's total equity decreased to ¥3,218,300,297.18 from ¥3,496,013,868.97, reflecting a decline of 8%[29] - Total liabilities decreased to ¥758,886,674.45 from ¥877,854,214.71, a reduction of 13.5%[29] - Non-current liabilities increased to ¥111,109,606.80, up from ¥53,914,475.73, marking a rise of 105.5%[29] - Current liabilities increased from ¥823,939,738.98 to ¥849,164,333.40, reflecting a rise of ¥25,224,594.42[54] Research and Development - The company's R&D expenses for the first nine months increased to ¥332,675,536.31, a rise of 38.54% compared to the same period last year, indicating a focus on innovation[10] - Research and development expenses were ¥332,675,536.31, compared to ¥240,126,653.05 in the previous year, indicating a significant increase of 38.4%[33] Shareholder Information - The top 10 shareholders hold a total of 15,938,436 shares in the company's repurchase account, accounting for 2.00% of the total share capital[17] - The company has a significant shareholder, Shen Jiyi, holding 10.38% of the shares, totaling 82,858,645 shares[16] - The company is undergoing a share transfer agreement involving 40 million shares, which will change the ownership structure but will not affect the controlling shareholder status[19] - The company has identified consistent action among certain shareholders, including China Electronics Fund and Cybersecurity Fund, indicating potential strategic alignment[17] Inventory and Other Income - The company reported a significant increase in inventory, which rose by 93.18% to ¥125,134,138.74, attributed to increased raw material stock and ongoing project deliveries[7] - The company recorded a substantial increase in other income, which rose by 39.57% to ¥60,611,062.45, primarily due to increased VAT refunds on software products[10]

Financial Performance - The company's operating revenue for the first half of 2021 was approximately ¥771.81 million, representing a 40.39% increase compared to ¥549.76 million in the same period last year[26]. - The net profit attributable to shareholders of the listed company was approximately ¥8.42 million, a significant turnaround from a loss of ¥30.88 million in the previous year, marking a 127.25% improvement[26]. - The net cash flow from operating activities was approximately ¥162.28 million, which is a 19.07% increase from ¥136.29 million in the same period last year[26]. - The basic earnings per share for the reporting period was ¥0.0108, compared to a loss of ¥0.0387 per share in the same period last year, reflecting a 127.91% increase[26]. - The company reported a net profit of approximately -¥3.12 million after deducting non-recurring gains and losses, an improvement of 93.55% from -¥48.48 million in the previous year[26]. - The weighted average return on net assets was 0.25%, a significant increase from -0.92% in the same period last year, reflecting a 1.17% improvement[26]. - The gross profit margin for security products decreased by 8.83% to 68.52%, while the gross profit margin for security services decreased by 10.92% to 66.68%[74]. - The company reported a significant increase in financial expenses, with a year-on-year change of 11,393.80% due to increased exchange losses[73]. - The total cash and cash equivalents decreased by ¥39,201,232.01, an improvement of 89.52% compared to the previous year[73]. - The company’s investment income was ¥12,465,467.98, showing a negative change of -562.06%[79]. Assets and Liabilities - Total assets at the end of the reporting period were approximately ¥3.97 billion, a decrease of 9.15% from ¥4.37 billion at the end of the previous year[26]. - The net assets attributable to shareholders of the listed company were approximately ¥3.22 billion, down 7.97% from ¥3.50 billion at the end of the previous year[26]. - The company’s accounts receivable decreased to ¥503,710,812.26, representing a decline of 1.33% year-on-year[81]. - The company’s inventory increased to ¥108,616,475.49, reflecting a rise due to increased raw material stocking and project delivery[81]. - The total liabilities decreased from 877,854,214.71 to 756,445,727.24, a reduction of approximately 13.8%[194]. - Current liabilities decreased from 823,939,738.98 to 647,293,616.52, representing a decline of about 21.4%[194]. - Owner's equity decreased from 3,496,013,868.97 to 3,217,125,528.57, a decrease of approximately 8.0%[197]. - The capital reserve increased from 1,389,930,421.73 to 1,392,343,529.93, a growth of about 0.2%[197]. Shareholder Information - The total number of shareholders at the end of the reporting period was 23,613, with the largest shareholder holding 10.38% of the shares[164]. - The largest shareholder, Shen Jiya, holds 82,858,645 shares, representing 10.38% of the total shares[164]. - The company has a share repurchase account holding 24,176,436 shares, which accounts for 3.03% of the total share capital[167]. - The company plans to use its own funds between RMB 1.8 billion and RMB 3.6 billion for share repurchase purposes[159]. - The total number of shares before the recent change was 798,138,173, with a total of 209,700 shares reduced, resulting in a new total of 798,347,873 shares[156]. - The number of restricted shares decreased from 65,247,390 (8.17%) to 64,012,861 (8.02%), a reduction of 1,234,529 shares[156]. - The number of unrestricted shares increased from 732,890,783 (91.83%) to 734,335,012 (91.98%), an increase of 1,444,229 shares[156]. Corporate Governance and Strategy - The company plans not to distribute cash dividends or issue bonus shares for the reporting period[7]. - The company has implemented an employee stock ownership plan and stock incentive plan to retain core technical personnel and management, linking their compensation to performance[108]. - The company has adjusted its 2021 stock incentive plan, reducing the number of incentive recipients from 195 to 192 and the number of restricted shares from 3.408 million to 3.362 million[118]. - The company has experienced a risk of core personnel turnover, which could impact product development and necessitate additional recruitment efforts[108]. - The company is actively monitoring and assessing risks associated with overseas market expansion, including local regulations and currency fluctuations[109]. Market Position and Innovation - The company focuses on information security, providing a range of products and services including security research, security products, security solutions, and security services[35]. - The company has established eight laboratories dedicated to various fields of security research, enhancing its core competitiveness and technological innovation[36]. - The company emphasizes customer-driven product development and continuous innovation to meet market demands[40]. - The company launched 14 categories and 28 commercial products during the reporting period, focusing on security protection, auditing, management, and assessment to support channel business expansion[55]. - The company was recognized as a top supplier in the APT detection market in China, highlighting its competitive position in the cybersecurity industry[46]. - The company has been awarded multiple honors, including the "Outstanding Technical Support Unit" by the National Information Security Vulnerability Database in 2020[46]. - The company has developed a comprehensive security solution for various sectors, including government, finance, telecommunications, energy, transportation, education, and healthcare[47]. - The company has adopted a "Smart Security 3.0" concept to guide its technology product innovation and align with national cybersecurity development strategies[55]. - The company is focusing on enhancing partner quality and optimizing its organizational structure to support its channel strategy transformation[55]. Regulatory and Compliance - The implementation of new cybersecurity regulations, such as the "Cybersecurity Law" and "Data Security Law," is expected to drive growth in the information security industry[51]. - The company is eligible for a reduced corporate income tax rate of 10% under national tax incentives for key software enterprises, which could be adversely affected by future policy changes[104]. - No significant environmental issues or administrative penalties reported during the period[122]. - No major lawsuits or arbitration matters occurred during the reporting period[132]. - The company did not engage in any significant related-party transactions during the reporting period[133]. Research and Development - Research and development investment increased to ¥183,277,781.27, reflecting a growth of 21.54% compared to the previous year[73]. - The company is actively involved in research on emerging security fields such as cloud security, IoT security, and blockchain security[35]. - The company has achieved CMMI Level 5 certification, indicating high software capability maturity[44].

Financial Performance - The company's operating revenue for 2020 was CNY 2,010,044,336.08, representing a 20.28% increase compared to CNY 1,671,091,024.50 in 2019[18]. - The net profit attributable to shareholders for 2020 was CNY 301,128,591.09, a 32.94% increase from CNY 226,510,778.11 in 2019[18]. - The net profit after deducting non-recurring gains and losses was CNY 258,162,527.08, which is a 40.50% increase compared to CNY 183,752,082.59 in 2019[18]. - The net cash flow from operating activities for 2020 was CNY 446,115,488.46, up 28.93% from CNY 346,015,579.01 in 2019[18]. - The basic earnings per share for 2020 was CNY 0.38, reflecting a 35.71% increase from CNY 0.28 in 2019[18]. - The total assets at the end of 2020 were CNY 4,373,868,083.68, a 7.14% increase from CNY 4,082,277,759.29 at the end of 2019[18]. - The net assets attributable to shareholders at the end of 2020 were CNY 3,496,691,687.45, which is a 3.36% increase from CNY 3,383,111,965.57 at the end of 2019[18]. - The weighted average return on equity for 2020 was 8.68%, an increase of 1.69% from 6.99% in 2019[18]. - The company reported a comprehensive diluted earnings per share of CNY 0.3772 after accounting for changes in share capital[18]. - The company reported a net profit attributable to shareholders of RMB 301,128,591.09 for the year 2020[149]. Cash Flow and Investments - The net cash flow from operating activities for 2020 was ¥446,115,488.46, an increase of 28.93% year-on-year[100]. - The net cash flow from investment activities decreased by 261.48% in 2020, primarily due to increased purchases of financial products[100]. - The net cash flow from financing activities decreased by 37.84% in 2020, mainly due to reduced external loans and share repurchases[100]. - The company reported an investment income of ¥39,960,623.60, accounting for 11.99% of total profit[102]. - The total investment amount for the reporting period was CNY 2,500,000, a significant decrease of 93.10% compared to CNY 36,240,000 in the previous year[111]. - The company reported a surplus of CNY 44,091.82 from fundraising, attributed to interest income and fees, which will be used to supplement working capital[124]. Revenue Breakdown - Revenue from security products was 1,341.18 million yuan, a 22.21% increase year-on-year; revenue from security services was 643.34 million yuan, up 18.09%[64]. - Revenue from the information security sector was ¥2,009,113,621.75, accounting for 99.95% of total revenue, with a year-on-year growth of 20.32%[77]. - Revenue from security products was ¥1,341,182,435.33, making up 66.72% of total revenue, and increased by 22.21% compared to the previous year[81]. - The North China region saw a significant revenue decline of 45.44%, with revenue dropping to ¥308,794,803.49 from ¥565,930,348.54[77]. - The Southwest region experienced a remarkable growth of 174.41%, with revenue increasing to ¥284,234,617.18 from ¥103,581,639.96[77]. Research and Development - The company has established eight laboratories focusing on various aspects of cybersecurity, enhancing its research capabilities in cloud computing and IoT security[31]. - The company emphasizes independent research and development, with a focus on customer needs and technological innovation[33]. - Research and development expenses for 2020 amounted to ¥357,200,258.01, representing a 14.75% increase compared to 2019[94]. - The company invested ¥365,434,139.82 in R&D in 2020, which is 18.18% of its operating revenue[96]. - The number of R&D personnel increased to 928 in 2020, representing 27.28% of the total workforce[96]. Market Position and Strategy - The company maintains a leading market share of 14.8% in the Asia-Pacific intrusion detection and prevention hardware market, ranking first among Chinese manufacturers[36]. - The company's Web Application Firewall (WAF) achieved the highest market share in China according to IDC's 2020 report[37]. - The company has signed multiple benchmark projects with global telecom operators and Fortune 500 companies for its Anti-DDoS System (ADS), maintaining the number one market share in Greater China for six consecutive years[37]. - The company is focusing on research and development in the new infrastructure sector, including cloud security and 5G security solutions[70]. - The company is strengthening its partner ecosystem and channel cooperation to enhance market reach[64]. Corporate Governance and Compliance - The company has no significant discrepancies between financial reports prepared under international and Chinese accounting standards[22][23]. - The company has not reported any non-operating fund occupation by controlling shareholders or related parties during the reporting period[160]. - The company did not face any delisting situations after the annual report disclosure[166]. - There were no significant litigation or arbitration matters during the reporting period[167]. - The company did not experience any penalties or rectification situations during the reporting period[168]. Social Responsibility and Community Engagement - The company actively fulfills its social responsibilities and maintains shareholder rights, providing timely and accurate information disclosure[194]. - The company donated network information security materials to Wuhan People's Hospital and provided comprehensive information security services during the pandemic[199]. - The company offered free technical support to all hospitals in epidemic areas and assisted in equipment inspection and upgrades[199]. - The company provided 24/7 free emergency response services to the healthcare sector, ensuring cybersecurity during the pandemic[199]. - The company proposed a "Five Defenses" security solution for the healthcare industry, focusing on health information platforms and remote medical services[199]. Dividend Distribution - The company plans to distribute a cash dividend of CNY 0.78 per 10 shares (including tax) to all shareholders[4]. - The cash dividend distribution plan for 2020 is set at RMB 0.78 per 10 shares, totaling approximately RMB 60,386,807.29[152]. - The cash dividend amount represents 100% of the total distributable profit for the year, which is RMB 1,213,639,216.86[149]. - The total cash dividend, including other methods, amounts to RMB 189,621,879.17, fully utilizing the distributable profits[149]. - The cash dividends for the last three years have shown a consistent payout trend, with a total cash dividend of RMB 156,305,539.00 distributed over the period[153].

Financial Performance - The company's revenue for Q1 2021 was ¥242,538,839.02, representing a 47.04% increase compared to ¥164,952,473.04 in the same period last year[9] - The net profit attributable to shareholders was -¥45,273,468.89, an improvement of 25.36% from -¥60,656,463.33 year-on-year[9] - The basic earnings per share were -¥0.0567, an improvement of 25.39% from -¥0.0760 in the same period last year[9] - The company achieved operating revenue of CNY 242.54 million in Q1 2021, a year-on-year increase of 47.04%[28] - The net loss attributable to shareholders was CNY 45.27 million, a decrease in loss of 25.36% compared to the previous year[28] - The company reported a total comprehensive loss of CNY -43,173,188.02 for Q1 2021, compared to a loss of CNY -55,302,207.68 in the previous year, marking an improvement of about 22%[67] Cash Flow - The net cash flow from operating activities was -¥22,271,200.71, a decline of 324.39% compared to -¥5,247,818.41 in the previous year[9] - The company’s cash flow from investing activities showed a net inflow of CNY 67.27 million, a significant improvement compared to the previous year[27] - Cash inflow from operating activities totaled ¥590,849,191.56, compared to ¥398,711,339.76 in the previous period, indicating a 48.3% increase[77] - The company reported a net cash inflow from investment activities of ¥67,267,226.70, a significant recovery from a net outflow of ¥288,625,627.93 in the previous period[82] - The net cash flow from operating activities was -$16.31 million, a significant decrease from $119.72 million in the previous period[86] - Cash inflow from investment activities totaled $463.14 million, compared to $50.21 million last year, indicating a substantial increase[86] Assets and Liabilities - The total assets at the end of the reporting period were ¥3,919,484,949.83, down 10.39% from ¥4,373,868,083.68 at the end of the previous year[9] - The total liabilities decreased to ¥695,132,714.19 from ¥877,854,214.71, reflecting a decline of about 21%[51] - The total equity attributable to shareholders decreased to ¥3,225,238,247.34 from ¥3,496,691,687.45, a decline of approximately 8%[54] - Total assets decreased to CNY 3,380,925,080.93 from CNY 3,673,404,267.90, a decline of about 8%[61] - Total liabilities decreased to CNY 182,441,278.30 from CNY 233,155,418.85, a reduction of approximately 22%[61] Shareholder Information - The total number of ordinary shareholders at the end of the reporting period was 22,808[12] - The largest shareholder, Shen Jiyi, held 10.38% of the shares, totaling 82,858,645 shares[12] Operational Efficiency - The company reported a significant increase in prepaid expenses, rising by 171.26% to CNY 50.24 million due to increased payments to suppliers[24] - Inventory increased by 43.04% to CNY 92.65 million, attributed to higher raw material purchases and costs of ongoing projects[24] - The company’s accounts payable decreased by 44.47% to CNY 130.59 million, indicating settlement of supplier payments[24] - Total operating costs for Q1 2021 were CNY 316,736,767.15, up from CNY 243,539,842.63, indicating a rise of about 30%[64] Research and Development - Research and development expenses for Q1 2021 were CNY 87,264,379.60, up from CNY 67,870,241.13, indicating an increase of approximately 28%[64] - Research and development expenses rose to ¥44,741,140.59, up from ¥35,782,198.08, reflecting a 25% increase in investment in innovation[72] Government Support - The company received government subsidies amounting to ¥477,294.21 during the reporting period[9] Future Outlook - The company expects to continue facing losses in the first half of the year due to seasonal sales characteristics, with performance concentrated in the second half[37]

[Important Notice](index=2&type=section&id=%E7%AC%AC%E4%B8%80%E8%8A%82%20%E9%87%8D%E8%A6%81%E6%8F%90%E7%A4%BA) [Content of Important Notice](index=2&type=section&id=%E9%87%8D%E8%A6%81%E6%8F%90%E7%A4%BA%E5%86%85%E5%AE%B9) The company's management ensures the truthfulness, accuracy, and completeness of this quarterly report, with all directors attending the review meeting - Company management guarantees the truthfulness, accuracy, and completeness of this quarterly report, free from false statements, misleading representations, or material omissions[3](index=3&type=chunk) - All directors attended the board meeting that reviewed this quarterly report[4](index=4&type=chunk) - The company's principal officer, head of accounting, and head of accounting department guarantee the truthfulness, accuracy, and completeness of the financial statements in the quarterly report[4](index=4&type=chunk) [Company Profile](index=3&type=section&id=%E7%AC%AC%E4%BA%8C%E8%8A%82%20%E5%85%AC%E5%8F%B8%E5%9F%BA%E6%9C%AC%E6%83%85%E5%86%B5) [Key Accounting Data and Financial Indicators](index=3&type=section&id=%E4%B8%80%E3%80%81%E4%B8%BB%E8%A6%81%E4%BC%9A%E8%AE%A1%E6%95%B0%E6%8D%AE%E5%92%8C%E8%B4%A2%E5%8A%A1%E6%8C%87%E6%A0%87) The company reported a 14.11% Q3 revenue increase but a 28.66% decline in net profit, with year-to-date revenue up 8.93% and net profit turning to a loss, while operating cash flow surged 884.37% Key Financial Indicators (Year-over-Year Change) | Indicator | Current Period (Q3) | Year-to-Date (YTD) | | :--- | :--- | :--- | | Operating Revenue (RMB) | 393,095,342.84 (+14.11%) | 942,859,525.61 (+8.93%) | | Net Profit Attributable to Shareholders (RMB) | 23,027,951.02 (-28.66%) | -7,856,137.49 (-671.60%) | | Net Cash Flow from Operating Activities (RMB) | 65,734,408.42 (-42.86%) | 202,022,074.06 (+884.37%) | | Basic Earnings Per Share (RMB/share) | 0.0289 (-28.29%) | -0.0098 (-653.85%) | | Total Assets (RMB) | 3,868,496,587.38 (-5.24% vs Year-Beginning) | - | | Net Assets Attributable to Shareholders (RMB) | 3,284,795,045.86 (-2.91% vs Year-Beginning) | - | Non-Recurring Gains and Losses (Year-to-Date) | Item | Amount (RMB) | | :--- | :--- | | Gains/Losses from Entrusted Investments or Asset Management | 24,778,035.98 | | Government Grants Recognized in Current Period P&L | 4,033,984.42 | | **Total** | **26,209,145.61** | - The company classified software product VAT refunds (**RMB 38,996,385.92**) as recurring gains and losses[11](index=11&type=chunk) [Shareholder Information](index=4&type=section&id=%E4%BA%8C%E3%80%81%E6%8A%A5%E5%91%8A%E6%9C%9F%E6%9C%AB%E8%82%A1%E4%B8%9C%E6%80%BB%E6%95%B0%E5%8F%8A%E5%89%8D%E5%8D%81%E5%90%8D%E8%82%A1%E4%B8%9C%E6%8C%81%E8%82%A1%E6%83%85%E5%86%B5%E8%A1%A8) As of the reporting period end, the company had 22,174 common shareholders, with Shen Jiye as the largest at 10.38%, and two concerted party groups among the top ten - Total common shareholders at the end of the reporting period were **22,174**[12](index=12&type=chunk) Top Five Shareholders' Holdings | Shareholder Name | Holding Percentage | Number of Shares Held | | :--- | :--- | :--- | | Shen Jiye | 10.38% | 82,858,645 | | Qidi Technology Services Co., Ltd. | 8.28% | 66,065,553 | | CETC (Chengdu) Network Security Equity Investment Fund Partnership (Limited Partnership) | 7.01% | 55,984,059 | | CETC Electronic Information Industry Investment Fund (Tianjin) Partnership (Limited Partnership) | 6.90% | 55,097,548 | | Leiyan Investment Co., Ltd. | 4.24% | 33,864,988 | - Concerted party relationships exist between Shen Jiye and Yi'an Baocheng, and among CEC Fund, Net Security Fund, and CETC Investment Holdings Co., Ltd[15](index=15&type=chunk) [Changes in Restricted Shares](index=5&type=section&id=%E4%B8%89%E3%80%81%E9%99%90%E5%94%AE%E8%82%A1%E4%BB%BD%E5%8F%98%E5%8A%A8%E6%83%85%E5%86%B5) Total restricted shares decreased from 72.29 million to 68.55 million, mainly due to the lifting of major asset restructuring restrictions and changes in executive lock-up shares Summary of Changes in Restricted Shares | Shareholder Name/Item | Restricted Shares at Beginning of Period | Released from Restriction This Period | Added to Restriction This Period | Restricted Shares at End of Period | | :--- | :--- | :--- | :--- | :--- | | **Total** | **72,289,084** | **3,981,117** | **237,033** | **68,545,000** | | Shen Jiye | 62,143,984 | 0 | 0 | 62,143,984 | | Wang Jianguo | 1,342,664 | 1,342,664 | 0 | 0 | | Ruan Xiaoxun | 1,269,470 | 1,269,470 | 0 | 0 | - Restricted shares from major asset restructuring held by multiple shareholders were lifted on **September 30, 2020**[16](index=16&type=chunk)[18](index=18&type=chunk) [Significant Events](index=7&type=section&id=%E7%AC%AC%E4%B8%89%E8%8A%82%20%E9%87%8D%E8%A6%81%E4%BA%8B%E9%A1%B9) [Significant Changes in Financial Data and Reasons](index=7&type=section&id=%E4%B8%80%E3%80%81%E6%8A%A5%E5%91%8A%E6%9C%9F%E4%B8%BB%E8%A6%81%E8%B4%A2%E5%8A%A1%E6%95%B0%E6%8D%AE%E3%80%81%E8%B4%A2%E5%8A%A1%E6%8C%87%E6%A0%87%E5%8F%91%E7%94%9F%E9%87%8D%E5%A4%A7%E5%8F%98%E5%8A%A8%E7%9A%84%E6%83%85%E5%86%B5%E5%8F%8A%E5%8E%9F%E5%9B%A0) Significant financial changes include decreased cash and increased financial assets due to wealth management, higher inventory and fixed assets from project investments, reduced short-term borrowings, and improved operating cash flow offset by increased investment outflows Key Balance Sheet Changes and Reasons (Year-to-Date) | Item | Change Percentage | Primary Reason | | :--- | :--- | :--- | | Cash and Cash Equivalents | -71.32% | Due to the company using idle funds to purchase wealth management products | | Financial Assets Held for Trading | 173.51% | Due to the company using idle funds to purchase wealth management products | | Inventories | 153.18% | Due to increased costs of unaccepted construction projects and the new revenue standard | | Fixed Assets | 104.91% | Due to Chengdu subsidiary's office building being reclassified to fixed assets | | Development Expenditures | 2348.25% | Due to increased capitalization of R&D expenses for new projects | | Short-term Borrowings | -74.37% | Due to repayment of bank loans in this period | | Advances from Customers | -96.04% | Reclassified to contract liabilities due to implementation of new revenue standard | Key Cash Flow Statement Changes and Reasons (Year-to-Date) | Item | Change Percentage | Primary Reason | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 884.37% | Due to significant increase in business collections this period | | Net Cash Flow from Investing Activities | -62.44% | Due to increased purchases of wealth management products compared to the same period last year | | Cash Paid for Other Financing Activities | 309.28% | Due to payment of domestic guarantee for foreign loan margin this period | [Investor Relations Activities](index=8&type=section&id=%E5%85%AB%E3%80%81%E6%8A%A5%E5%91%8A%E6%9C%9F%E5%86%85%E6%8E%A5%E5%BE%85%E8%B0%83%E7%A0%94%E3%80%81%E6%B2%9F%E9%80%9A%E3%80%81%E9%87%87%E8%AE%BF%E7%AD%89%E6%B4%BB%E5%8A%A8%E7%99%BB%E8%AE%B0%E8%A1%A8) The company held a conference call with institutional investors on August 31, 2020, with details publicly disclosed - The company held a conference call on **August 31, 2020**, for institutional investors, with details disclosed on Juchao Information Network[29](index=29&type=chunk) [Financial Statements](index=9&type=section&id=%E7%AC%AC%E5%9B%9B%E8%8A%82%20%E8%B4%A2%E5%8A%A1%E6%8A%A5%E8%A1%A8) [Financial Statements](index=9&type=section&id=%E4%B8%80%E3%80%81%E8%B4%A2%E5%8A%A1%E6%8A%A5%E8%A1%A8) This section provides the company's consolidated and parent financial statements for Q3 2020, highlighting a year-to-date net loss, Q3 profitability, and strong operating cash flow [Consolidated Balance Sheet](index=9&type=section&id=1%E3%80%81%E5%90%88%E5%B9%B6%E8%B5%84%E4%BA%A7%E8%B4%9F%E5%80%BA%E8%A1%A8) As of September 30, 2020, total assets were RMB 3.87 billion (down 5.24% from year-end) and total liabilities RMB 585 million (down 16.47%), reflecting significant cash reduction and financial asset increase due to wealth management Key Consolidated Balance Sheet Items | Item | September 30, 2020 (RMB) | December 31, 2019 (RMB) | | :--- | :--- | :--- | | **Total Assets** | **3,868,496,587.38** | **4,082,277,759.29** | | Cash and Cash Equivalents | 347,702,385.44 | 1,212,246,678.92 | | Financial Assets Held for Trading | 1,259,220,397.26 | 460,396,222.22 | | **Total Liabilities** | **584,700,044.32** | **699,970,283.09** | | **Total Equity Attributable to Parent Company Shareholders** | **3,284,795,045.86** | **3,383,111,965.57** | [Consolidated Income Statement for the Current Period (Q3)](index=14&type=section&id=3%E3%80%81%E5%90%88%E5%B9%B6%E6%9C%AC%E6%8A%A5%E5%91%8A%E6%9C%9F%E5%88%A9%E6%B6%A6%E8%A1%A8) In Q3 2020, operating revenue grew 14.11% to RMB 393 million, but net profit attributable to parent shareholders declined 28.66% to RMB 23.03 million, primarily due to increased costs and R&D expenses Consolidated Income Statement (2020 Q3 vs 2019 Q3) | Item | 2020 Q3 (RMB) | 2019 Q3 (RMB) | | :--- | :--- | :--- | | Total Operating Revenue | 393,095,342.84 | 344,480,502.99 | | Operating Profit | 29,747,107.29 | 29,732,958.12 | | Net Profit Attributable to Parent Company Shareholders | 23,027,951.02 | 32,278,766.14 | | Basic Earnings Per Share | 0.0289 | 0.0403 | [Consolidated Income Statement from Year-Beginning to End of Reporting Period (YTD)](index=18&type=section&id=5%E3%80%81%E5%90%88%E5%B9%B6%E5%B9%B4%E5%88%9D%E5%88%B0%E6%8A%A5%E5%91%8A%E6%9C%9F%E6%9C%AB%E5%88%A9%E6%B6%A6%E8%A1%A8) For the first three quarters of 2020, cumulative operating revenue grew 8.93% to RMB 943 million, but net profit attributable to parent shareholders significantly declined to a loss of RMB 7.86 million Consolidated Income Statement (2020 YTD vs 2019 YTD) | Item | 2020 YTD (RMB) | 2019 YTD (RMB) | | :--- | :--- | :--- | | Total Operating Revenue | 942,859,525.61 | 865,571,043.79 | | Operating Profit | 3,945,890.99 | -3,983,736.76 | | Net Profit Attributable to Parent Company Shareholders | -7,856,137.49 | -1,018,162.11 | | Basic Earnings Per Share | -0.0098 | -0.0013 | [Consolidated Cash Flow Statement from Year-Beginning to End of Reporting Period (YTD)](index=22&type=section&id=7%E3%80%81%E5%90%88%E5%B9%B6%E5%B9%B4%E5%88%9D%E5%88%B0%E6%8A%A5%E5%91%8A%E6%9C%AB%E7%8E%B0%E9%87%91%E6%B5%81%E9%87%8F%E8%A1%A8) For the first three quarters of 2020, net operating cash flow surged 884.37% to RMB 202 million due to increased collections, while net investing cash outflow was RMB 913 million, mainly for wealth management products, and financing outflow was RMB 37 million Consolidated Cash Flow Statement (2020 YTD vs 2019 YTD) | Item | 2020 YTD (RMB) | 2019 YTD (RMB) | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 202,022,074.06 | 20,522,901.16 | | Net Cash Flow from Investing Activities | -913,292,330.48 | -562,240,095.14 | | Net Cash Flow from Financing Activities | -37,201,201.02 | -42,984,345.28 | | Net Increase in Cash and Cash Equivalents | -751,719,053.89 | -579,730,458.30 | [Explanation of Financial Statement Adjustments](index=25&type=section&id=%E4%BA%8C%E3%80%81%E8%B4%A2%E5%8A%A1%E6%8A%A5%E8%A1%A8%E8%B0%83%E6%95%B4%E6%83%85%E5%86%B5%E8%AF%B4%E6%98%8E) Effective January 1, 2020, the company adopted the new revenue standard, retrospectively adjusting opening balances of accounts receivable, inventories, advances from customers, contract liabilities, and retained earnings, with retained earnings decreasing by approximately RMB 44.21 million - The company first adopted the new revenue standard on **January 1, 2020**, and retrospectively adjusted its opening financial statements[90](index=90&type=chunk) Key Consolidated Balance Sheet Adjustments at Year-Beginning | Item | Before Adjustment (RMB) | After Adjustment (RMB) | Adjustment Amount (RMB) | | :--- | :--- | :--- | :--- | | Accounts Receivable | 726,775,476.02 | 649,266,923.72 | -77,508,552.30 | | Inventories | 52,705,318.57 | 86,007,708.54 | 33,302,389.97 | | Advances from Customers | 94,930,969.43 | 12,108,488.67 | -82,822,480.76 | | Contract Liabilities | 0 | 74,487,346.67 | 74,487,346.67 | | Retained Earnings | 1,094,494,803.56 | 1,050,288,641.23 | -44,206,162.33 | [Audit Report](index=31&type=section&id=%E4%B8%89%E3%80%81%E5%AE%A1%E8%AE%A1%E6%8A%A5%E5%91%8A) This quarterly report remains unaudited - The company's third-quarter report is **unaudited**[109](index=109&type=chunk)

Financial Performance - The company's operating revenue for the first half of 2020 was ¥549,764,182.77, representing a 5.50% increase compared to ¥521,090,540.80 in the same period last year[23]. - The net profit attributable to shareholders of the listed company was -¥30,884,088.51, an improvement of 7.25% from -¥33,296,928.25 in the previous year[23]. - The net cash flow from operating activities was ¥136,287,665.64, a significant increase of 244.18% compared to -¥94,527,094.03 in the same period last year[23]. - The company reported a net profit after deducting non-recurring gains and losses of -¥48,479,631.80, which is a slight decrease of 0.15% compared to -¥48,408,932.07 in the previous year[23]. - The company reported a total comprehensive loss of CNY 31,023,595.93 for the first half of 2020, compared to a loss of CNY 37,543,667.48 in the same period of 2019, showing a reduction in comprehensive losses[189]. - The net profit for the first half of 2020 was a loss of CNY 30,959,162.75, compared to a loss of CNY 33,500,017.14 in the same period of 2019, showing an improvement in losses[189]. Assets and Liabilities - Total assets at the end of the reporting period were ¥3,815,889,960.24, down 6.53% from ¥4,082,277,759.29 at the end of the previous year[23]. - The net assets attributable to shareholders of the listed company decreased by 2.25% to ¥3,306,939,475.35 from ¥3,383,111,965.57 at the end of the previous year[23]. - Cash and cash equivalents at the end of the reporting period were ¥803,594,531.29, making up 21.06% of total assets, down by 8.64% from the previous year due to increased investment in financial products[67]. - Total liabilities decreased from ¥699,970,283.09 to ¥509,830,048.50, a decline of about 27.2%[172]. - The company's equity attributable to shareholders decreased from ¥3,383,111,965.57 to ¥3,306,939,475.35, a reduction of approximately 2.3%[175]. Research and Development - The company's R&D investment decreased by 8.31% to CNY 150.80 million, impacted by the pandemic and social security reductions[56]. - Research and development expenses for the first half of 2020 amounted to CNY 149,512,905.34, compared to CNY 147,325,794.83 in the same period of 2019, reflecting a slight increase in investment in R&D[186]. - The company is focusing on integrating advanced technologies like big data and artificial intelligence into its security research and product development[38]. Market Position and Strategy - The Chinese cybersecurity market is projected to reach USD 8.75 billion in 2020, with a year-on-year growth of 24.0%[33]. - The company maintains a strong customer base in government, telecommunications, finance, energy, and education sectors, reducing operational and financial risks[43]. - The company has established five laboratories focusing on various aspects of cybersecurity, enhancing its core competitiveness and innovation capabilities[32]. - The company aims to optimize its sales and operational systems to improve customer satisfaction and operational efficiency[33]. Cash Flow and Investments - The company invested ¥1,265,000,000.00 in financial assets during the reporting period, with ¥920,000,000.00 sold, resulting in an investment income of ¥16,448,024.50[71]. - The total cash inflow from investment activities was approximately ¥1.02 billion, compared to ¥1.19 billion in the same period of 2019[200]. - The company received a VAT refund of CNY 19,523,999.88 related to software products, as per the Ministry of Finance and the State Administration of Taxation's policy[28]. Employee and Operational Risks - The company faces risks related to the loss of core personnel, which could impact product development and require significant resources for recruitment and training[88]. - The company has implemented measures to retain core employees, including stock incentive plans and performance assessment systems[88]. - The COVID-19 pandemic has caused delays in client operations, impacting the company's business activities and financial performance[90]. Corporate Governance - The company has not distributed cash dividends or bonus shares for the half-year period, nor has it increased capital through reserves[95]. - There were no significant legal disputes or penalties during the reporting period, indicating a stable operational environment[100][101]. - The company has not engaged in any major related-party transactions during the reporting period, ensuring transparency in its operations[103].

Financial Performance - Total revenue for Q1 2020 was ¥164,952,473.04, a decrease of 13.74% compared to ¥191,219,053.87 in the same period last year[9]. - Net profit attributable to shareholders was -¥60,656,463.33, representing a decline of 149.22% from -¥24,338,924.96 year-on-year[9]. - Basic and diluted earnings per share were both -¥0.0760, a decrease of 150.00% from -¥0.0304 in the same period last year[9]. - The company's operating revenue for the reporting period was ¥164,952,473.04, a year-on-year decrease of 13.74%[25]. - The net profit attributable to shareholders was -¥60,656,463.33, a year-on-year decline of 149.22%[25]. - The total profit (loss) for the current period is -61,120,356.11, compared to -24,888,869.83 in the previous period, indicating worsening financial performance[64]. Cash Flow and Liquidity - The net cash flow from operating activities improved by 95.60%, amounting to -¥5,247,818.41 compared to -¥119,402,216.01 in the previous year[9]. - The company’s cash and cash equivalents decreased by 45.82% from -¥476,150,662.92, indicating a significant cash flow challenge[24]. - The company reported a decrease in cash and cash equivalents to ¥927.26 million as of March 31, 2020, down from ¥1,212.25 million at the end of 2019, representing a decline of approximately 23.5%[43]. - Operating cash inflow totaled CNY 398,711,339.76, up from CNY 292,287,966.87 in the previous period, representing an increase of approximately 36.4%[75]. - Cash inflow from investment activities was CNY 50,224,653.38, significantly down from CNY 479,709,262.53 in the previous period, a decrease of approximately 89.5%[75]. - The cash and cash equivalents at the end of the period amounted to CNY 753,090,524.92, compared to CNY 472,165,522.05 at the end of the previous period, an increase of approximately 59.5%[77]. Assets and Liabilities - Total assets at the end of the reporting period were ¥3,893,208,388.95, down 4.63% from ¥4,082,277,759.29 at the end of the previous year[9]. - The total liabilities decreased to CNY 562,829,086.70 from CNY 699,970,283.09, reflecting a reduction of approximately 19.6%[49]. - The total equity attributable to shareholders decreased to CNY 3,331,376,697.96 from CNY 3,383,111,965.57, a decline of about 1.53%[51]. - The total assets of the company stood at $4.08 billion, with current assets totaling approximately $2.97 billion[83]. - The total liabilities were reported at $699.97 million, with current liabilities accounting for $662.44 million[83]. Investments and Expenses - The financial assets increased by 57.47% from ¥460,396,222.22 to ¥725,000,000.00 due to idle funds being used for investment[21]. - The company experienced a significant increase in development expenses, rising by 736.89% to ¥21,736,112.89 due to ongoing projects[21]. - Research and development expenses increased to 67,870,241.13, up from 65,133,561.45, reflecting a focus on innovation[64]. - The total operating costs for the current period are 243,539,842.63, compared to 238,181,010.69 in the previous period, showing a slight increase[64]. Shareholder Information - The total number of ordinary shareholders at the end of the reporting period was 18,327[13]. - The top shareholder, Shen Jiyi, held 10.38% of the shares, totaling 82,858,645 shares[13]. - There are no overdue commitments from major shareholders or related parties during the reporting period[37]. Regulatory and Market Risks - The company is at risk of potential adverse impacts from changes in tax incentive policies affecting its performance[29]. - The company is actively monitoring and assessing risks associated with overseas market expansion, including local operating environments and regulatory changes[30]. - The company is facing risks related to talent retention, particularly in high-end cybersecurity personnel, which could impact product development if key personnel leave[30]. Miscellaneous - The company received government subsidies amounting to ¥925,893.29 during the reporting period[11]. - The company reported a non-operating income of ¥8,721,181.34 from entrusted investment management[9]. - The company has established wholly-owned subsidiaries in Hong Kong, the United States, Japan, Singapore, and the United Kingdom to expand its international market presence[30]. - The company adopted the new revenue recognition standards starting January 1, 2020, as per the revised accounting standards[91]. - The first quarter report was not audited[92].

Financial Performance - The company's operating revenue for 2019 was CNY 1,671,091,024.50, representing a 24.24% increase compared to CNY 1,345,040,751.20 in 2018[21] - The net profit attributable to shareholders of the listed company was CNY 226,510,778.11, a growth of 34.77% from CNY 168,070,150.66 in the previous year[21] - The net cash flow from operating activities reached CNY 346,015,579.01, marking a significant increase of 304.79% compared to CNY 85,480,342.50 in 2018[21] - The basic earnings per share for 2019 was CNY 0.28, up 33.33% from CNY 0.21 in 2018[21] - Total assets at the end of 2019 amounted to CNY 4,082,277,759.29, reflecting a 6.53% increase from CNY 3,831,930,529.20 at the end of 2018[21] - The net assets attributable to shareholders of the listed company were CNY 3,383,111,965.57, an increase of 8.82% from CNY 3,108,855,355.32 in 2018[21] - The company reported a diluted earnings per share of CNY 0.28, consistent with the basic earnings per share[21] - The weighted average return on equity was 6.99%, an increase from 5.61% in the previous year[21] - The company achieved operating revenue of ¥1,671,091,024.50, representing a year-on-year growth of 24.24%[69] - Net profit attributable to shareholders reached ¥226,510,778.11, with a year-on-year increase of 34.77%[69] - The net profit after deducting non-recurring gains and losses was ¥183,752,082.59, reflecting a growth of 50.31% year-on-year[69] - The company's total revenue for 2019 was 1,669,855,141.32 CNY, representing a year-on-year increase of 24.31% compared to 2018[78] Cash Dividends - The company plans to distribute a cash dividend of CNY 0.60 per 10 shares to all shareholders[6] - The company distributed a cash dividend of 0.60 yuan per 10 shares, totaling 47,887,059.66 yuan, which represents 21.14% of the net profit attributable to shareholders for 2019[135] - The net profit attributable to shareholders for 2019 was 226,510,778.11 yuan, with distributable profits available for shareholders amounting to 1,078,465,737.48 yuan[136] - The cash dividend payout ratio for 2018 was 28.58%, with a total cash dividend of 48,031,672.05 yuan[139] - The total cash dividend for 2019 accounted for 100% of the profit distribution total[136] - The company has maintained a consistent cash dividend distribution policy over the past three years, with cash dividends of 48,188,225.76 yuan in 2017, 48,031,672.05 yuan in 2018, and 47,887,059.66 yuan in 2019[139] - The company's cash dividend policy has been confirmed to align with its articles of association and relevant regulations[136] Market Position and Strategy - The company maintained a leading market share in several security products, including the Anti-DDoS System (ADS), which ranked first in the Greater China region according to Frost & Sullivan[36] - The company has invested in emerging security fields such as industrial control security and cloud security, anticipating increased demand in these areas in 2020[40] - The company launched the Intelligent Security Operation Platform (ISOP), which has been widely adopted across various industries, enhancing its security management capabilities[41] - The company has established a leading market share in the cybersecurity industry, participating in numerous national security projects and standards[61] - The company is committed to continuous innovation and has increased R&D investment to meet evolving security demands[64] - The company plans to enhance its market strategy and internal operations to expand its security operations business and increase market share in the information security industry[124] - In product development, the company will focus on market opportunities in areas such as data security and cloud security, applying advanced technologies like big data analysis and artificial intelligence[124] Research and Development - The company has published several industry reports in 2019, including the "2019 DDoS Attack Situation Report" and "2019 IoT Security Annual Report," showcasing its commitment to ongoing research in security trends[43] - The company completed several R&D projects, including the TVM-V3.0.1 platform and the WVSS-V6.0.3.2 system, with all projects achieving 100% completion[94] - Research and development (R&D) expenses rose by 14.90% to CNY 311,291,935.65, with R&D investment accounting for 20.20% of total revenue[91] - The number of R&D personnel increased to 811, representing 27.58% of the total workforce[91] - The company is actively researching and applying cutting-edge technologies such as big data analysis and artificial intelligence to improve its security products[53] Operational Challenges - The company experienced a quarterly revenue of CNY 805,519,980.71 in Q4 2019, contributing significantly to the annual growth[22] - The net profit attributable to shareholders after deducting non-recurring gains and losses was -33,118,250.77 CNY, compared to -15,290,681.30 CNY in the previous period, indicating a decline[24] - The net cash flow from operating activities was -119,402,216.01 CNY, a significant decrease from 24,875,121.98 CNY in the prior period[24] - The company’s cash flow from operating activities showed a significant negative shift, indicating potential liquidity challenges[24] - The COVID-19 pandemic has impacted the company's operations, with clients delaying resumption of work, which may affect financial performance[130] Assets and Liabilities - The company's intangible assets increased by 22.99% compared to the beginning of the period, primarily due to the capitalization of software copyrights[51] - The company's inventory rose by 32.95% compared to the beginning of the period, driven by increased raw material purchases and costs associated with unverified construction projects[51] - The company’s total liabilities decreased, with short-term borrowings showing a significant reduction, indicating improved liquidity management[100] - The company’s short-term borrowings decreased by 2.91%, from 239,000,628.25 CNY at the beginning of the year to 134,706,906.97 CNY at year-end, representing 3.30% of total assets[100] - The company’s fixed assets decreased by 0.54%, from 119,474,294.63 CNY at the beginning of the year to 104,903,176.28 CNY at year-end, accounting for 2.57% of total assets[100] Shareholder and Investor Relations - The company emphasizes shareholder rights and actively returns value to investors through cash dividends, ensuring timely and accurate information disclosure[195] - The company has not experienced any violations of the commitments made by the investors[145] - The company has not faced any major litigation or arbitration matters during the reporting period[162] - The company has not experienced any penalties or rectification situations during the reporting period[163] Corporate Governance - The company appointed Deloitte Touche Tohmatsu Certified Public Accountants LLP as the auditor for the 2019 fiscal year, with an audit fee of 1.3 million RMB[158] - The financial statement format was revised in accordance with the Ministry of Finance's guidelines, but it did not impact the company's total assets, total liabilities, net profit, or other comprehensive income[153] - The company adopted new financial instrument standards effective January 1, 2019, with no significant impact on accounting policies for financial liabilities[149] Employee and Social Responsibility - The company offers supplementary medical and accident insurance for employees, enhancing medical coverage beyond statutory benefits[196] - Strategic partnerships with universities like Harbin Institute of Technology and Northeast University are established to foster talent in the information security industry[196] - The company has not initiated any targeted poverty alleviation efforts in the reporting year and has no subsequent plans[199] - The company and its subsidiaries are not classified as key pollutant discharge units by environmental protection authorities[200]