Financial Performance - Operating revenue for the reporting period was CNY 227,273,863.33, an increase of 9.03% year-on-year [7]. - Net profit attributable to shareholders was CNY 8,208,489.02, a decrease of 54.94% compared to the same period last year [7]. - Net profit attributable to shareholders after deducting non-recurring gains and losses was CNY 3,101,133.56, a decrease of 66.54% year-on-year [7]. - Basic earnings per share were CNY 0.02, a decrease of 50.00% year-on-year [7]. - The weighted average return on equity was 0.45%, a decrease of 0.59% compared to the previous year [7]. - The net profit for the third quarter was CNY 8,420,152.13, compared to CNY 18,452,251.44 in the same period last year, representing a decrease of approximately 54.4% [36]. - The company reported a total profit of CNY 8,564,843.03 for the third quarter, down from CNY 19,540,673.98 in the same period last year [36]. - The total comprehensive income for the quarter was CNY 23,378,600.62, down from CNY 33,927,920.65, a decrease of 31.0% [45]. Cash Flow - The net cash flow from operating activities was CNY -40,402,783.82, a decrease of 370.55% compared to the same period last year [7]. - Net cash flow from operating activities decreased by 99.08% to -¥158,489,791.27, primarily due to increased cash payments for goods and services [16]. - The cash flow from operating activities for the year-to-date period was -186,820,466.66 CNY, worsening from -75,354,147.40 CNY in the previous year [54]. - The net cash flow from investment activities was 46,339,579.08 CNY, a significant improvement from -197,517,977.93 CNY in the same quarter last year [53]. - The net increase in cash and cash equivalents for Q3 2020 was -122,596,058.37 CNY, compared to -295,755,447.30 CNY in Q3 2019, indicating an improvement in cash management [53]. Assets and Liabilities - Total assets at the end of the reporting period were CNY 1,998,817,304.67, a decrease of 0.30% compared to the end of the previous year [7]. - Cash and cash equivalents decreased by 24.81% to ¥378,206,055.93 compared to the beginning of the year, primarily due to increased cash payments for goods and employee compensation, as well as dividend payments [15]. - Trade receivables increased by 36.18% to ¥168,818,037.99, mainly due to an increase in customer debts [15]. - Inventory rose by 26.60% to ¥438,154,962.63, attributed to increased stockpiling [15]. - Other current assets surged by 293.31% to ¥37,682,000.24, primarily due to the purchase of large certificates of deposit maturing within one year [15]. - The total liabilities decreased to CNY 126,563,245.20 from CNY 128,621,691.36 in the previous period [32]. - Deferred tax assets increased by 35.32% to ¥4,790,682.23, primarily due to the recognition of deductible losses [15]. Shareholder Information - The company reported a total of 49,693 common shareholders at the end of the reporting period [10]. - The top shareholder, Huang Yu, holds 30.31% of the shares, totaling 126,700,046 shares [10]. - The company did not engage in any repurchase transactions during the reporting period [12]. Research and Development - Research and development expenses for Q3 2020 were CNY 27,580,031.13, compared to CNY 24,352,999.42 in the same period last year, reflecting a growth of approximately 9.1% [35]. - Research and development expenses for the quarter were CNY 48,730,135.59, down from CNY 52,852,895.85, a decrease of 7.4% [47].

Financial Performance - The company's operating revenue for the reporting period was ¥352,177,301.54, a decrease of 8.96% compared to the same period last year [22]. - Net profit attributable to shareholders increased by 126.87% to ¥25,579,290.78, while the net profit after deducting non-recurring gains and losses rose by 271.92% to ¥12,470,782.25 [22]. - The basic and diluted earnings per share both reached ¥0.06, representing a 100% increase year-on-year [22]. - The company's revenue for the reporting period was CNY 352,177,301.54, representing a decrease of 8.96% compared to the previous year, primarily due to a decline in USB key and dynamic token sales [47]. - The company reported a net profit of 13,508,762.68 CNY from its subsidiary Beijing Hongsi Electronics Technology Co., Ltd., with an operating income of 48,825,245.6 CNY [78]. - The company reported a net loss of ¥20,902,200 for the current period, which is a significant decrease compared to the previous period's loss of ¥8,646,286.95 [172]. Market Conditions - The company reported a significant risk of market saturation for USB Key and OTP products, with declining demand from banks and a competitive pricing environment impacting overall performance [5]. - The demand for USB Key and OTP online banking products from banks is gradually declining, significantly impacting the company's operating performance due to intense market competition and falling prices [80]. - The company aims to maintain its existing product market while exploring new product development and market expansion to create new growth points [5]. - The company plans to strengthen its position in identity authentication products across various sectors, including banking, insurance, and government, while expanding into international markets [33]. Research and Development - The company plans to increase R&D investment to enhance innovation capabilities, despite rising costs and uncertainties associated with R&D activities [6]. - The company has a strong focus on research and development, with a significant portion of its workforce being highly educated, including master's and doctoral graduates [35]. - The company is investing in R&D, allocating 10% of its revenue towards new technology development [200]. Assets and Liabilities - As of the end of the reporting period, the company's goodwill amounted to CNY 102.29 million, which may require impairment if future economic conditions worsen [8]. - Significant changes in major assets include a 9.63% decrease in equity assets and a 12.98% decrease in fixed assets due to depreciation [34]. - Cash and cash equivalents decreased by 34.02%, primarily due to increased cash payments for goods and employee compensation [34]. - Accounts receivable increased by 31.41%, mainly due to higher receivables from banking clients [34]. - Total liabilities decreased from ¥157,519,802.29 to ¥150,262,622.57, a reduction of about 4.0% [140]. Investment Strategy - The company is focusing on low-risk financial instruments, maintaining a strategy of stable returns [69]. - The company plans to expand its investment in fixed-income products, with a total of 5,100 million allocated at a yield of 3.96% [70]. - The company has reported a consistent investment strategy with a focus on low-risk assets [69]. - The company is exploring new investment opportunities in the derivatives market [70]. Subsidiaries and Joint Ventures - The company has five subsidiaries included in the consolidated financial statements for the reporting period [176]. - The company confirmed its commitment to sustainability, planning to reduce carbon emissions by 30% over the next five years [199]. - The joint venture arrangements are expected to generate an additional $30 million in revenue from shared assets [200]. Shareholder Information - No cash dividends or stock bonuses will be distributed to shareholders for this period [9]. - The total number of common shareholders at the end of the reporting period is 36,874 [118]. - The largest shareholder, Huang Yu, holds 30.94% of the shares, totaling 129,359,446 shares [118]. Future Outlook - The company provided a positive outlook for the next quarter, projecting a revenue growth of 20% [199]. - New product launches are expected to contribute an additional $50 million in revenue by the end of the fiscal year [199]. - The company plans to continue focusing on market expansion and new product development to drive future growth [146].

Financial Performance - Total revenue for Q1 2020 was ¥117,394,865.24, a decrease of 38.27% compared to ¥190,161,641.52 in the same period last year[7] - Net profit attributable to shareholders was ¥334,006.64, down 84.38% from ¥2,137,730.41 year-on-year[7] - Basic earnings per share decreased by 84.31% to ¥0.0008 from ¥0.0051 in the previous year[7] - Gross profit for Q1 2020 was CNY 52.41 million, reflecting a decrease of 46.05% year-on-year due to reduced demand from major banking clients and the impact of COVID-19[23] - Net profit attributable to the parent company for Q1 2020 was CNY 0.33 million, down 84.38% year-on-year[30] - Net profit for Q1 2020 was CNY 539,675.48, compared to CNY 2,422,599.16 in the same period last year, reflecting a significant decline[57] - The company reported a comprehensive loss of CNY 12,840,284.53 for Q1 2020, contrasting with a comprehensive income of CNY 5,508,588.32 in the previous period[58] - The net profit for the first quarter of 2020 was -4,333,906.54 CNY, compared to -3,476,907.43 CNY in the same period last year, indicating a decline of approximately 24.6%[61] - Operating profit for the first quarter was -5,475,091.63 CNY, an improvement from -6,486,997.22 CNY year-over-year, showing a reduction in losses of about 15.6%[61] - Total comprehensive income for the first quarter was -4,489,122.26 CNY, compared to -3,529,864.83 CNY in the previous year, reflecting a decline of approximately 27.2%[62] Cash Flow and Liquidity - The net cash flow from operating activities improved by 28.29%, reaching -¥75,205,674.24 compared to -¥104,878,965.05 in the same period last year[7] - Cash flow from operating activities generated a net outflow of -75,205,674.24 CNY, an improvement from -104,878,965.05 CNY in the same quarter last year, indicating a reduction in cash burn of about 28.5%[65] - Cash inflow from investment activities was 706,692,868.71 CNY, compared to 431,899,211.00 CNY in the previous year, representing an increase of approximately 63.6%[65] - The total cash outflow from operating activities was 197,534,991.55 CNY, down from 257,931,577.54 CNY in the previous year, indicating a decrease of about 23.5%[65] - The cash and cash equivalents at the end of the period increased to 503,377,249.78 CNY from 335,615,332.43 CNY, marking a growth of about 49.9%[66] - The company reported a cash increase of 20,569,481.98 CNY during the quarter, contrasting with a decrease of -282,176,528.30 CNY in the previous year[69] Assets and Liabilities - Total assets at the end of the reporting period were ¥1,982,156,407.41, a decrease of 1.13% from ¥2,004,795,085.72 at the end of the previous year[7] - The company's total assets amounted to CNY 1,833,802,532.43, slightly down from CNY 1,835,154,771.97 in the previous period[53] - Total liabilities increased to CNY 131,758,574.08 from CNY 128,621,691.36 in the previous period[53] - The total current assets decreased to ¥1,535,972,922.15 from ¥1,763,559,339.39 as of December 31, 2019, indicating a decline in liquidity[47] - The total liabilities decreased to ¥147,721,408.51 from ¥157,519,802.29, reflecting improved financial stability[49] Shareholder Information - The total number of ordinary shareholders at the end of the reporting period was 32,241[11] - The top shareholder, Huang Yu, holds 30.94% of the shares, totaling 129,359,446 shares[11] Research and Development - The company obtained 22 domestic patents during the reporting period, including 13 invention patents[30] - Research and development expenses for Q1 2020 were CNY 24,491,796.35, compared to CNY 23,671,952.41 in the previous period, indicating an increase in investment in R&D[56] - The company plans to increase R&D investment to enhance innovation capabilities despite rising costs and uncertainties[38] Market and Product Development - The company reported a decrease in demand for USB Key and OTP products due to market saturation, impacting overall performance[38] - The company aims to maintain existing product markets while exploring new product development and market expansion[38] - The proportion of total revenue from the top five customers decreased by 12.65% year-on-year, accounting for 33.90% of total revenue in Q1 2020[36] - The company did not disclose any new product developments or market expansion strategies in the current report[69] Tax and Other Income - The company received tax refunds of CNY 9.34 million in Q1 2020, an increase of 55.22% compared to the previous year, primarily due to increased software tax refunds[27] - The company reported non-operating income of ¥1,333,432.80 from government subsidies closely related to business[8] - Other income for Q1 2020 was CNY 5,586,162.16, significantly higher than CNY 321,283.38 in the previous period[56] Accounting and Reporting - The first quarter report was not audited, which may affect the reliability of the financial data presented[71] - The company did not apply new revenue and leasing standards for the first quarter of 2020, indicating stability in accounting practices[70]

Financial Performance - The company's operating revenue for 2019 was ¥939,620,454.48, a decrease of 12.33% compared to ¥1,071,782,404.96 in 2018[20]. - The net profit attributable to shareholders for 2019 was ¥90,234,261.13, down 32.29% from ¥133,273,482.46 in 2018[20]. - The net profit after deducting non-recurring gains and losses was ¥47,280,754.19, a decline of 50.05% from ¥94,662,557.38 in 2018[20]. - The net cash flow from operating activities increased significantly to ¥119,156,859.73, up 1,361.25% from ¥8,154,433.36 in 2018[20]. - The total assets at the end of 2019 were ¥2,004,795,085.72, a slight decrease of 0.39% from ¥2,012,625,462.11 at the end of 2018[20]. - The total equity attributable to shareholders increased by 4.73% to ¥1,834,141,989.69 at the end of 2019, compared to ¥1,751,262,705.75 at the end of 2018[20]. - The company reported a significant increase in revenue, achieving a total of 1.2 billion RMB for the year, representing a growth of 15% year-over-year[41]. - The gross margin improved to 45%, up from 42% in the previous year, indicating better cost management[42]. - The company achieved operating revenue of CNY 939.62 million in 2019, a decrease of 12.33% compared to the previous year[50]. - Net profit attributable to shareholders was CNY 90.23 million, down 32.29% year-on-year, primarily due to a significant decline in demand from major banking clients[50]. Product Performance - The company's USB Key products generated revenue of ¥46,110.29 million, accounting for 49.07% of total revenue, a year-on-year decrease of 19.54%[31]. - OTP dynamic token products generated revenue of 192.66 million CNY, accounting for 20.50% of total revenue, a year-on-year decrease of 34.01%[32]. - Chip products revenue reached 96.57 million CNY, representing 10.28% of total revenue, with a year-on-year growth of 36.30%[32]. - Smart terminal systems generated revenue of 53.72 million CNY, making up 5.72% of total revenue[32]. - Encryption lock products revenue was 34.60 million CNY, accounting for 3.68% of total revenue, a year-on-year decrease of 19.40%[32]. - Card products revenue was 30.25 million CNY, representing 3.22% of total revenue, with a year-on-year increase of 7.23%[33]. - The company's revenue from chip products increased by 36.30% to CNY 96.57 million, reflecting growth in this segment[58]. - Revenue from dynamic tokens was CNY 192.66 million, making up 20.50% of total revenue, with a decline of 34.01%[58]. - Revenue from USB Key products was CNY 461.10 million, accounting for 49.07% of total revenue, representing a 19.54% decrease[58]. Research and Development - The company aims to increase R&D investment to enhance innovation capabilities, despite rising labor costs and uncertainties in R&D activities[6]. - The company emphasizes the importance of detailed market research before R&D to improve market judgment capabilities[6]. - The company is committed to strict management of development progress and effectiveness during the R&D process to maximize efficiency[6]. - The company continues to focus on research and development in information security devices and solutions, maintaining a complete industry chain from chip design to product sales[31]. - The company has filed multiple patents related to security input methods, blockchain technology, and data transmission, with several patents granted in 2019[43][44][45][46][47]. - The company completed three major R&D projects, including a Bluetooth fingerprint access control system, a cloud speaker IoT system, and a unified identity authentication platform, with a total of 3 patents applied for[72]. - The company is focusing on enhancing its R&D capabilities, with a budget increase of 20% for the upcoming fiscal year[45]. Market Strategy - The company is focusing on maintaining its existing product market while developing new products and exploring new markets to create new growth points[5]. - The company has established a marketing service system globally, with a focus on sectors such as finance, government, and telecommunications[31]. - The company is expanding its market presence in Southeast Asia, targeting a 25% increase in market share within the next two years[41]. - A strategic acquisition of a technology firm was announced, aimed at enhancing R&D capabilities and product offerings[42]. - The company plans to explore potential acquisitions to bolster its technology portfolio, with a target of completing at least one acquisition by the end of 2020[45]. - The company plans to enhance market share in existing USB Key and OTP product areas to mitigate the impact of price reductions[106]. - The company is actively exploring the application of security chips in various fields, including IoT, smart transportation, and public safety[106]. - The company intends to expand its product development and market outreach in response to the growing demand for information security solutions[109]. Legal and Compliance - The company is involved in a lawsuit against Beijing Xinan Century Technology Co., Ltd. and Wuhan Xinan Luojia Technology Co., Ltd. regarding the infringement of its utility model patent, with a claim for 5 million yuan in damages[127]. - In a separate case, the company won a judgment against the same defendants, ordering them to pay 750,000 yuan for economic losses and reasonable expenses incurred to stop the infringement[128]. - The company has filed an administrative lawsuit against the Patent Reexamination Board regarding the invalidation of its patent, seeking to overturn the decision[129]. - The company has reached a settlement in a shareholder equity transfer dispute, resulting in the recovery of 79,708,595.23 yuan in capital from the defendant[129]. - The company is currently appealing a decision from the Beijing Intellectual Property Court regarding a patent invalidation case, with the case still pending[129]. - The company has been actively involved in patent litigation to protect its intellectual property rights, reflecting its commitment to innovation and market position[128]. - The company has engaged in multiple legal proceedings, highlighting the competitive nature of its industry and the importance of safeguarding proprietary technology[129]. Shareholder Information - The total number of shares before the change was 418,044,000, with 48.98% being restricted shares and 51.02% being unrestricted shares[160]. - The number of restricted shares decreased by 5,982,934, resulting in a total of 198,794,106 restricted shares, which is 47.55% of the total[160]. - The number of unrestricted shares increased by 5,982,934, leading to a total of 219,249,834 unrestricted shares, which is 52.45% of the total[160]. - Huang Yu holds 30.94% of the shares, totaling 129,359,446 shares, with 100,019,584 shares under lock-up[166]. - Li Wei holds 13.38% of the shares, totaling 55,917,628 shares, with 41,938,221 shares under lock-up[166]. - Lu Zhou holds 12.59% of the shares, totaling 52,634,756 shares, with 39,476,067 shares under lock-up[166]. - The company has a total of 36,026 shareholders at the end of the reporting period[166]. - The top 10 unrestricted shareholders include Huang Yu with 29,339,862 shares, Li Wei with 13,979,407 shares, and Lu Zhou with 13,158,689 shares[167]. Corporate Governance - The company has established a complete governance structure, including a board of directors, supervisory board, and management team, in compliance with relevant laws and regulations[198]. - There were no significant discrepancies between the company's governance practices and the regulatory requirements set by the China Securities Regulatory Commission[199]. - The company maintains independence in business operations, personnel management, asset control, and organizational structure from its controlling shareholders[200]. - The total remuneration for the board of directors, supervisors, and senior management in 2019 was CNY 8.55 million[190]. - The company employed a total of 932 staff members, with 444 being technical personnel, representing 47.7% of the workforce[192]. - Employee compensation accounted for CNY 28.63 million in operating costs, which is 4.94% of the total operating costs for the year[193]. - The number of core technical personnel increased from 104 in 2018 to 119 in 2019, representing 12.77% of the total workforce[194]. - The company conducted training for 1,722 person-times to enhance employee skills and knowledge[195].

Financial Performance - Operating revenue for the period was CNY 208,460,318.01, a decline of 20.28% year-on-year[7] - Net profit attributable to shareholders decreased by 54.96% to CNY 18,218,393.54 compared to the same period last year[7] - The net profit after deducting non-recurring gains and losses dropped by 60.04% to CNY 9,266,872.91[7] - Basic earnings per share fell by 60.00% to CNY 0.04[7] - The weighted average return on equity was 1.04%, down by 1.35% from the previous year[7] - The company reported a net profit of CNY 6,277,700.90 for Q3 2019, an increase from CNY 5,461,107.27 in the same period last year[37] - The net profit for the third quarter was CNY 18,452,251.44, down 54.8% from CNY 40,798,228.69 year-over-year[39] - The company's operating profit was CNY 15,544,476.12, a decline of 50% from CNY 31,100,572.85 in the previous year[39] - The total profit for the third quarter was CNY 19,540,673.98, down 56.1% from CNY 44,518,754.08 year-over-year[39] - The total comprehensive income for the third quarter was CNY 17,117,750.08, down 59.9% from CNY 42,627,029.34 year-over-year[39] Assets and Liabilities - Total assets decreased by 5.35% to CNY 1,905,017,853.88 compared to the end of the previous year[7] - The total assets as of September 30, 2019, were ¥1,905,017,853.88, down from ¥2,012,625,462.11 at the end of 2018[28] - The company's total assets as of September 30, 2019, were CNY 1,779,345,530.73, down from CNY 1,921,957,234.71 at the end of 2018[33] - Total liabilities decreased to CNY 108,771,441.60 in Q3 2019 from CNY 232,271,262.59 in the same period last year, representing a decline of 53.1%[34] - The company's total equity as of September 30, 2019, was CNY 1,670,574,089.13, slightly down from CNY 1,689,685,972.12 year-over-year[35] - Total liabilities reached CNY 250,763,144.83, with current liabilities at CNY 238,836,801.81 and non-current liabilities at CNY 11,926,343.02[64] - Total equity reached CNY 1,689,685,972.12, including retained earnings of CNY 796,434,134.94[68] Cash Flow - Cash flow from operating activities showed a net outflow of CNY 79,610,726.72, an increase of 67.14% compared to the previous year[7] - The net cash flow from operating activities for the first nine months of 2019 was -¥79,610,726.72, an increase of 67.14% compared to the same period last year, due to reduced cash payments for goods and services[20] - The cash flow from operating activities was CNY 567.94 million, down from CNY 656.75 million in the previous period, reflecting a decrease of about 13.5%[53] - The company reported a decrease in cash received from tax refunds to 18,696,305.68 CNY from 24,161,995.95 CNY[54] - The cash flow from investment activities showed a significant decline, with net cash flow dropping to -178,255,568.38 CNY from a positive 57,547,352.13 CNY in the previous period[58] Shareholder Information - The total number of ordinary shareholders at the end of the reporting period was 34,808[11] - The top shareholder, Huang Yu, holds 30.94% of the shares, totaling 129,359,446 shares[11] Inventory and Receivables - Accounts receivable increased by 97.64% to ¥192,189,814.04, attributed to an increase in customer debts[18] - Prepayments rose by 108.12% to ¥27,394,433.25, mainly due to increased advance payments to suppliers[18] - Inventory decreased by 11.19% to ¥393,285,853.60, reflecting a reduction in stockpiling[18] - Other current assets increased by 22.09% to ¥671,182,986.60, primarily due to increased purchases of financial products[18] - Accounts receivable increased significantly to CNY 142,974,462.07 from CNY 50,954,052.29, indicating a growth of 179.5% year-over-year[32] - Inventory decreased to CNY 345,471,000.35 from CNY 416,051,037.51, a reduction of 17% compared to the previous year[32] Expenses - Management expenses for the first nine months of 2019 amounted to ¥88,819,299.31, an increase of 41.62% year-on-year, mainly due to higher salaries[19] - Research and development expenses for Q3 2019 amounted to CNY 24,352,999.42, a decrease of 26.2% compared to CNY 32,994,891.12 in the previous year[37] - Research and development expenses for the quarter were CNY 19,202,653.93, a decrease of 34.7% from CNY 29,467,586.09 in the same quarter last year[41] - The company incurred credit impairment losses of CNY 5.40 million during the quarter[46] Other Financial Information - The company received government subsidies amounting to CNY 10,028,998.38 during the reporting period[8] - The company reported a significant decrease in income tax expenses by 86.59% to ¥1,642,224.48 for the first nine months of 2019, due to a reduction in taxable income[19] - The company reported other income of CNY 12.03 million, down from CNY 15.89 million in the previous year, a decline of approximately 24.0%[50] - The company experienced a foreign exchange loss of CNY -3,004,500.00 in other comprehensive income[39] - The company has implemented new financial instrument standards, affecting the classification and measurement of financial assets[64] - The company adopted the new financial instruments standard, changing the impairment loss provision method from "incurred loss" to "expected credit loss"[68] - The third-quarter report was not audited[69]

Business Performance - The company's main business has seen a decline due to reduced demand for USB Key and OTP products, leading to a significant impact on operating performance [5]. - The company faces intensified competition in the IC card market, resulting in decreasing product prices and a lack of breakthrough in operational performance [6]. - Total revenue for the reporting period was ¥386,835,204.35, a decrease of 9.59% compared to the same period last year [24]. - Net profit attributable to shareholders was ¥11,274,825.90, down 69.20% year-over-year [24]. - The net profit after deducting non-recurring gains and losses was -¥7,253,973.25, a decline of 137.97% compared to the previous year [24]. - The revenue from USB Key products was ¥20,221.63 million, accounting for 52.27% of total revenue, down 12.99% year-over-year [33]. - Revenue from dynamic token products was ¥9,668.76 million, representing 24.99% of total revenue, a decrease of 17.23% compared to the previous year [33]. - The company reported a significant decrease in investment amounting to RMB 14,007,190.94, down 55.85% from RMB 31,725,500 in the previous year [67]. Financial Position - The company's total assets decreased by 7.39% to ¥1,863,864,265.91 compared to the end of the previous year [24]. - The company's cash and cash equivalents decreased by 50.09% due to increased investments and cash payments for goods and services [35]. - The company's total liabilities decreased from CNY 250,763,144.83 to CNY 106,093,978.06, a reduction of approximately 57.68% [155]. - The total liabilities at the end of the reporting period were 8,821.00 million yuan, showing an increase from 7,008.00 million yuan at the beginning of the year [180]. - The total equity attributable to the parent company at the end of the reporting period was 1,746.00 million yuan, reflecting a decrease from the previous year's 1,660.20 million yuan [181]. Research and Development - R&D investments are crucial for enhancing innovation capabilities, but rising labor costs and uncertainties in R&D activities significantly affect overall profitability [9]. - Research and development expenses were RMB 42,542,766.24, down 31.16% from RMB 61,797,143.12, mainly due to a reduction in the number of participants in R&D projects [53]. - Research and development efforts have led to the filing of 56 new patents in 2019, indicating a strong commitment to innovation and technology advancement [43]. Strategic Initiatives - The company plans to launch high-value-added smart cards to achieve differentiated competition [7]. - The company is focusing on expanding its market presence in Southeast Asia, targeting a 30% increase in market share by the end of 2020 [42]. - The company has initiated strategic acquisitions to enhance its technology capabilities, with a budget allocation of 200 million RMB for potential mergers and acquisitions in 2019 [42]. - The company is implementing a new marketing strategy aimed at increasing brand awareness, with a budget increase of 15% for marketing expenditures in 2019 [42]. Legal Matters - The company has filed a lawsuit against Beijing Xinan Century Technology Co., Ltd. and Wuhan Xinan Luojia Technology Co., Ltd. for patent infringement, seeking damages of 5 million yuan [103]. - The court ruled that the defendants must cease infringement activities and pay compensation of 2 million yuan for economic losses and 30,000 yuan for legal expenses [104]. - The company is actively pursuing legal actions to protect its intellectual property rights [103]. - The company has incurred significant legal expenses related to its patent litigation efforts, reflecting its commitment to defending its intellectual property rights [106]. Cash Flow and Investments - The net cash flow from operating activities improved to -¥94,544,032.34, a 66.71% increase from -¥284,005,734.37 in the previous year [24]. - The company’s cash flow from investment activities showed a significant decline, with a net cash flow of -190,298,792.58 CNY in 2019 compared to a positive net cash flow of 115,626,817.94 CNY in 2018 [176]. - The company reported a total cash and cash equivalents balance of 320,857,955.18 CNY at the end of the first half of 2019, down from 402,018,438.76 CNY at the end of the first half of 2018 [173]. Market Outlook - The information security market in China is projected to grow from ¥495.2 billion in 2018 to ¥926.8 billion by 2021, with a compound annual growth rate of 23% [31]. - The company provided a positive outlook for the second half of 2019, projecting a revenue growth of 20% driven by new product launches and market expansion strategies [42]. - The company plans to enhance fundraising efficiency and long-term development through adjustments in project funding allocations [80]. Shareholder Information - The total number of common shareholders at the end of the reporting period is 33,413 [135]. - The largest shareholder, Huang Yu, holds 30.94% of shares, totaling 29,339,862 shares [136]. - The company plans not to distribute cash dividends or issue bonus shares for the half-year period [98].

Financial Performance - Total revenue for Q1 2019 was ¥190,161,641.52, representing a 25.00% increase compared to ¥152,134,421.21 in the same period last year[7] - Net profit attributable to shareholders was ¥2,137,730.41, a slight increase of 1.02% from ¥2,116,072.83 year-on-year[7] - Net profit after deducting non-recurring gains and losses was -¥5,911,853.89, a decrease of 13.34% from -¥5,216,159.13 in the previous year[7] - Operating revenue for Q1 2019 was ¥190,161,641.52, a 25.00% increase year-over-year, driven by significant sales growth in USB Keys and OTP dynamic tokens[16] - The total profit for Q1 2019 was ¥334.01 million, a decrease of 10.91% year-over-year, while net profit attributable to the parent company increased by 1.02% to ¥213.77 million[18] - The net profit for Q1 2019 was CNY 2,422,599.16, compared to CNY 2,085,708.63 in the same period last year, reflecting a growth of 16.14%[50] - The total profit for Q1 2019 was CNY 3,340,061.08, compared to CNY 3,749,118.40 in the same period last year, showing a decrease of 10.95%[50] Cash Flow and Liquidity - Net cash flow from operating activities improved by 48.46%, reaching -¥104,878,965.05 compared to -¥203,506,174.41 in the same period last year[7] - Cash and cash equivalents decreased by 47.73% to ¥346,313,099.67 compared to the beginning of the year, primarily due to investments in bank wealth management and net cash outflow from operating activities[15] - The company's cash and cash equivalents decreased from CNY 662.54 million on December 31, 2018, to CNY 346.31 million as of March 31, 2019, representing a decline of approximately 47.8%[39] - The cash flow from operating activities was CNY 143,196,840.68, compared to CNY 101,826,954.26 in the previous year, indicating a significant increase[57] - The company's cash flow from operating activities showed a net outflow, highlighting the need for strategic adjustments to improve liquidity[58] - The company reported a net cash decrease of 316,286,071.69 CNY for the period, compared to a decrease of 210,199,167.93 CNY in the previous period, reflecting a worsening cash position[59] Assets and Liabilities - Total assets at the end of the reporting period were ¥1,978,381,542.94, down 1.70% from ¥2,012,625,462.11 at the end of the previous year[7] - The company's total assets as of March 31, 2019, were CNY 1,884,442,547.92, down from CNY 1,921,957,234.71 at the end of 2018[47] - The total liabilities decreased to CNY 198,286,440.63 in Q1 2019 from CNY 232,271,262.59 in the previous year[46] - The company's inventory decreased to CNY 389,264,264.30 from CNY 416,051,037.51, reflecting improved inventory management[44] Shareholder Information - The total number of ordinary shareholders at the end of the reporting period was 31,257[10] - The largest shareholder, Huang Yu, holds 31.90% of the shares, totaling 133,359,446 shares[10] - The company did not conduct any repurchase transactions among the top 10 shareholders during the reporting period[11] Research and Development - The company obtained 36 domestic patents during the reporting period, including 30 invention patents[19] - The R&D investment is crucial for enhancing innovation capabilities, but rising costs and uncertainties in R&D activities may impact profitability[27] - The R&D expenses for Q1 2019 were CNY 23,671,952.41, slightly down from CNY 24,515,104.37 in Q1 2018, indicating a focus on cost control[48] - Research and development expenses for Q1 2019 were CNY 19,427,357.74, a decrease of 8.66% from CNY 21,287,578.58 in the previous year[53] Market and Competition - The company faces market saturation risk as demand for USB Key and OTP products from banks may decline due to increased competition and falling prices[26] - The company plans to enhance its product offerings by developing high-value-added smart cards to differentiate itself in the competitive IC card market[26] Government Support - The company received government subsidies amounting to ¥1,806,969.12 during the reporting period[8] Investment Activities - The total amount of raised funds is ¥618,490,000, with ¥558,189,900 already invested, representing 90.25% of the total[31] - The company has adjusted the use of raised funds, with a cumulative change amounting to ¥199,975,000, which is 32.17% of the total raised funds[31] - The marketing service center construction project has achieved 102.18% of its planned investment, indicating effective fund utilization[31] Financial Ratios - The gross profit margin decreased to approximately 2.0% in Q1 2019 from 10.0% in Q1 2018, indicating increased cost pressures[48] - The earnings per share (EPS) for Q1 2019 remained stable at CNY 0.0051, unchanged from the previous year[51]

Financial Performance - The company's total revenue for 2018 was ¥1,071,782,404.96, a decrease of 2.83% compared to ¥1,103,048,519.32 in 2017[21]. - Net profit attributable to shareholders was ¥133,273,482.46, an increase of 6.47% from ¥125,174,450.29 in the previous year[21]. - The net profit after deducting non-recurring gains and losses was ¥94,662,557.38, down 19.01% from ¥116,880,816.64 in 2017[21]. - The net cash flow from operating activities was ¥8,154,433.36, a significant decrease of 92.08% compared to ¥102,936,860.74 in 2017[21]. - The total assets at the end of 2018 were ¥2,012,625,462.11, an increase of 2.19% from ¥1,969,544,745.54 at the end of 2017[21]. - The total net assets attributable to shareholders increased by 5.89% to ¥1,751,262,705.75 from ¥1,653,927,028.98 in 2017[21]. - The gross margin for 2018 was reported at 35%, slightly down from 37% in 2017, attributed to increased R&D expenses[46]. - The company reported a total revenue of 1.2 billion yuan for the year 2018, representing a year-over-year increase of 15%[42]. - The company provided a revenue guidance for 2019, expecting a growth rate of 10% to 12%[44]. Research and Development - The company aims to enhance its innovation capabilities by increasing R&D investment, despite rising costs and uncertainties associated with R&D activities[9]. - The company emphasizes the importance of detailed market research before R&D to improve market judgment capabilities[9]. - The company has a team of over 900 employees, with approximately 40% being mid-to-senior software development engineers, contributing to its strong R&D capabilities[39]. - The company received 101 domestic patents during the reporting period, including 71 invention patents, indicating ongoing innovation efforts[40]. - The company’s R&D expenditure for the reporting period was ¥118,598,215.97, accounting for 11.07% of total revenue, which is an increase of 0.05% compared to the same period last year[72]. - The number of R&D personnel decreased to 331, representing 36.17% of the total workforce, down from 37.90% in the previous year[72]. - The company has completed the design of the low-cost, low-power IoT security chip HSC32I1, which is now being marketed, indicating a positive market outlook[72]. - The company is focusing on developing a multi-protocol FIDO U2F device to enhance user experience and application versatility[71]. - The company has applied for a total of 7 patents across various R&D projects, including 3 invention patents, enhancing its intellectual property portfolio[72]. Market Conditions and Competition - The company is facing saturation risks in its main products, such as USB Key and OTP, which may lead to a decline in demand from banks[5]. - The IC card market is experiencing intensified competition, with decreasing product prices impacting the company's performance in this segment[6]. - The company acknowledges the risk of market saturation and intends to explore new product development and market expansion to foster new growth points[5]. - The company plans to launch high-value-added smart cards to achieve differentiated competition in the market[7]. - The company is investing in R&D for low-power Bluetooth devices, with a focus on improving transaction security and user experience[46]. - Market expansion efforts are underway, targeting Southeast Asia and Europe, with plans to establish local partnerships[42]. Shareholder and Dividend Information - The profit distribution plan approved by the board proposes a cash dividend of 0.50 yuan per 10 shares (including tax) based on a total of 418,044,000.00 yuan[9]. - The cash dividend for 2018 represents 23.61% of the distributable profit, consistent with the company's dividend policy[112]. - The total cash dividend for 2018 accounted for 15.68% of the consolidated net profit attributable to the company's ordinary shareholders[114]. - The company has maintained a consistent cash dividend policy over the past three years, with cash dividends of CNY 20,902,200 in both 2017 and 2018[114]. - The cash dividend payout ratio for 2016 was 34.96%, while it was 16.70% for 2017[114]. Legal and Compliance Matters - The company faced a legal case with a total claim amount of ¥5,000,000, which was resolved in its favor, with the court ruling for compensation of ¥200,000 and additional costs[130]. - The company is involved in multiple patent infringement lawsuits, seeking a total compensation of 5 million yuan from the defendants in each case[131]. - The company has been actively pursuing legal actions to protect its intellectual property rights against competitors[132]. - The company has not reported any penalties or rectification measures during the reporting period[134]. - The company has not undergone any changes in the scope of consolidated financial statements during the reporting period, maintaining stability in its financial reporting[126]. Employee and Management Information - The company has a total of 915 staff members, including 409 technical personnel and 148 sales personnel[197]. - The total remuneration for the board of directors, supervisors, and senior management in 2018 amounted to CNY 8.6532 million[194]. - The average remuneration for senior management is approximately CNY 78.6 thousand per person[195]. - The company has not granted any stock incentives to its directors and senior management during the reporting period[196]. - The company employed a total of 934 staff members during the reporting period[197]. Investment and Financial Management - The company reported a total investment of 15,000 million in low-risk financial instruments with an average yield of 4.90%[150]. - The company has consistently invested in low-risk financial products, maintaining a return rate between 3.40% and 4.60% throughout the year[154][155]. - The company achieved a total investment return of 181.23 million from its financial instruments[150]. - The company has allocated 12,000 million in low-risk investments in the currency market, achieving a yield of 5.05%[151]. - The company reported no overdue amounts in its entrusted financial management activities[148].

Financial Performance - Net profit attributable to shareholders was CNY 40,452,627.46, an increase of 43.37% year-on-year[8]. - Operating income for the period was CNY 261,479,146.18, down 7.77% compared to the same period last year[8]. - Basic earnings per share increased by 42.86% to CNY 0.10[8]. - The weighted average return on net assets was 2.39%, up from 0.59% in the previous year[8]. - The net profit after deducting non-recurring gains and losses was CNY 23,188,949.51, down 47.55% compared to the same period last year[8]. - Net profit for the current period is CNY 40,798,228.69, significantly up from CNY 12,275,756.76 in the previous period, representing a growth of 232.5%[38]. - The net profit for the third quarter was CNY 18,896,885.86, down from CNY 51,022,377.71 in the same period last year, reflecting a significant decline[42]. - Total profit for Q3 2018 was CNY 59,960,258.94, down 37.5% from CNY 96,177,588.38 year-over-year[50]. - Net profit for Q3 2018 was CNY 50,501,105.10, representing a decline of 36.5% compared to CNY 79,543,018.01 in Q3 2017[50]. Assets and Liabilities - Total assets at the end of the reporting period were CNY 1,931,315,057.73, a decrease of 1.94% compared to the end of the previous year[8]. - Cash and cash equivalents decreased by 31.70% to ¥401,691,396.14 compared to the beginning of the year, primarily due to reduced net cash flow from operating activities and the distribution of 2017 dividends[19]. - Accounts receivable increased by 163.35% to ¥184,014,344.93, driven by an increase in bank customer settlement volume[19]. - Inventory rose by 26.60% to ¥510,029,655.95, attributed to an increase in dispatched and stocked goods[19]. - Long-term equity investments surged by 877.78% to ¥47,344,717.44, resulting from the acquisition of shares in Shenzhen Ruifuda Liquid Crystal Display Technology Co., Ltd.[19]. - The total liabilities decreased from ¥309,263,728.25 to ¥225,946,608.97, reflecting a reduction in current liabilities[31]. - Total assets decreased to CNY 1,853,913,280.35 from CNY 1,903,332,145.32, a decline of 2.6%[34]. - Total liabilities decreased to CNY 212,063,982.08 from CNY 291,026,251.78, a reduction of 27.1%[34]. Cash Flow - Cash flow from operating activities showed a net outflow of CNY 242,305,322.96, a decrease of 31.59% year-on-year[8]. - Operating cash flow net amount was -¥242,305,322.96, a decrease of 31.59% year-on-year, mainly due to increased operating expenses[21]. - Cash inflow from investment activities was CNY 1,716,263,423.67, a decrease from CNY 1,802,012,318.89 year-over-year[53]. - Cash outflow from investment activities totaled CNY 1,644,171,844.85, down from CNY 2,099,196,392.97 in the same period last year[53]. - Net cash flow from investment activities was CNY 72,091,578.82, compared to CNY -297,184,074.08 in Q3 2017[53]. - The ending cash and cash equivalents balance was CNY 390,501,825.59, an increase from CNY 276,111,390.29 year-over-year[54]. - The company reported a decrease in cash inflow from sales of goods and services to CNY 656,754,204.29, compared to CNY 669,152,855.80 in Q3 2017[51]. - The net cash flow from financing activities was -20,922,548.11 CNY in Q3 2018, compared to -41,922,539.63 CNY in the same period last year[57]. - Cash and cash equivalents at the end of Q3 2018 amounted to 294,894,426.48 CNY, down from 739,471,746.89 CNY at the beginning of the period[57]. - The company reported a negative net increase in cash and cash equivalents of -229,564,862.73 CNY for Q3 2018, compared to -490,284,239.77 CNY in Q3 2017[57]. Shareholder Information - The company reported a total of 35,437 common shareholders at the end of the reporting period[12]. - The top shareholder, Huang Yu, holds 31.90% of the shares, totaling 133,359,446 shares[12]. - The company did not engage in any repurchase transactions among the top 10 shareholders during the reporting period[13]. Expenses and Income - Non-operating income increased by 170.16% to ¥17,650,957.99, primarily from gains related to the investment in Shenzhen Ruifuda Liquid Crystal Display Technology Co., Ltd.[20]. - Management expenses decreased by 43.72% to ¥62,715,632.16, mainly due to the one-time amortization of intangible assets from a subsidiary in the previous year[20]. - Other current assets decreased by 18.94% to ¥566,847,919.84, mainly due to a reduction in purchased financial products[19]. - Prepayments increased by 56.22% to ¥17,002,670.82, attributed to higher advance payments to suppliers[19]. - The company reported a significant increase in other income to CNY 13,420,266.98 from CNY 2,042,032.25, a rise of 558.5%[38]. - The company reported a significant increase in other income to CNY 17,932,187.67 from CNY 19,980,592.38, reflecting changes in revenue streams[45]. - The company experienced a decrease in tax expenses to CNY 1,047,287.28 from CNY 8,893,267.91, which may reflect changes in tax strategy or lower taxable income[42]. Research and Development - Research and development expenses remained stable at CNY 94,792,034.24, compared to CNY 94,429,513.38 in the previous year, indicating continued investment in innovation[45].

Financial Performance - Total revenue for the first half of 2018 was CNY 427,878,974.02, representing a 5.40% increase compared to CNY 405,963,430.85 in the same period last year[19]. - Net profit attributable to shareholders was CNY 36,611,145.78, a significant increase of 42.56% from CNY 25,682,025.97 year-on-year[19]. - Net profit after deducting non-recurring gains and losses reached CNY 19,106,628.61, up 63.10% from CNY 11,714,478.16 in the previous year[19]. - Basic earnings per share increased by 50.00% to CNY 0.09 from CNY 0.06 in the same period last year[19]. - The weighted average return on equity rose to 2.19%, an increase of 0.56% compared to 1.63% in the previous year[19]. - The company reported a significant increase in investment income, amounting to ¥15,747,345.83, contributing 34.88% to total profit[56]. - The gross profit margin for the information security industry was 39.89%, slightly down by 0.22% from the previous year[52]. - The company reported a net loss of 20,902,200.00 attributable to shareholders during the current period[169]. Assets and Liabilities - Total assets at the end of the reporting period were CNY 1,913,063,519.47, a decrease of 2.87% from CNY 1,969,544,745.54 at the end of the previous year[19]. - The company's total assets decreased from ¥1,969,544,745.54 to ¥1,913,063,519.47, a reduction of about 2.9%[140]. - The total liabilities decreased from ¥309,263,728.25 to ¥235,822,100.05, a decline of approximately 23.7%[139]. - The total equity attributable to shareholders increased from ¥1,653,927,028.98 to ¥1,670,875,986.49, an increase of approximately 1.0%[140]. - The company's cash and cash equivalents decreased by 29.75% compared to the beginning of the period, primarily due to reduced net cash flow from operating activities and dividend payments[30]. - The company's cash and cash equivalents decreased from ¥588,138,656.27 to ¥413,151,028.81, a decline of approximately 29.8%[137]. - Accounts receivable increased significantly from ¥68,811,134.46 to ¥206,985,226.27, representing a growth of about 200.5%[137]. - The total owner's equity at the end of the period was 1,588,904,126.00 CNY, showing a slight increase from the previous year's balance[164]. Cash Flow - The net cash flow from operating activities was negative at CNY -284,005,734.37, worsening by 47.45% compared to CNY -192,617,591.89 in the same period last year[19]. - Cash flow from operating activities showed a net outflow of ¥284,005,734.37, worsening from a net outflow of ¥192,617,591.89 in the previous period[156]. - The net cash flow from investment activities generated a net inflow of ¥128,302,239.92, compared to a net outflow of ¥257,845,201.46 in the previous period[156]. - The company experienced a net decrease in cash and cash equivalents of 192,330,216.15 CNY, compared to a decrease of 471,510,970.93 CNY in the prior year, indicating improved cash management[160]. Research and Development - The company has a strong R&D team, with nearly 50% of employees being mid-to-senior software development engineers[33]. - The company is increasing R&D investment to enhance innovation capabilities, despite the inherent risks associated with R&D activities[81]. - Research and development expenses were ¥61,797,143.12, a slight increase of 0.89% from ¥61,252,592.41 year-over-year[48]. Market Position and Products - The company is recognized as a leading enterprise in digital identity security and transaction information security, providing comprehensive solutions across various sectors[31]. - The company's main products include ePass series USB keys and OTP series dynamic tokens, contributing to its revenue generation[174]. - Revenue from USB Key products was 232.399 million yuan, accounting for 54.31% of total revenue, with a year-on-year increase of 3.26%[29]. - Revenue from dynamic token products reached 116.814 million yuan, making up 27.30% of total revenue, and grew by 37.79% compared to the previous year[29]. Corporate Governance and Compliance - The company has not encountered significant changes in the feasibility of the projects funded by raised capital[67]. - There are no significant litigation or arbitration matters reported during the reporting period[92]. - The half-year financial report has not been audited[89]. - The financial statements were approved by the board of directors on August 28, 2018, ensuring compliance with accounting standards[178]. Shareholder Information - The total number of shares before the change was 418,044,000, with 52.62% being restricted shares and 47.38% being unrestricted shares[116]. - The largest shareholder, Huang Yu, holds 31.90% of the shares, totaling 133,359,446 shares[120]. - The company did not experience any changes in its controlling shareholder or actual controller during the reporting period[123]. Risks and Challenges - The company faces risks from market changes and intensified competition, particularly in the mobile payment sector, which saw a transaction scale of 403,645.1 billion RMB in Q1 2018, growing by 6.99% quarter-on-quarter[78]. - The financial IC card market is entering a phase of intensified competition, necessitating the company's focus on high-quality financial smart card production for differentiated competition[80].