Group 1 - The demand for AI servers has significantly increased, leading to strong growth in the demand for optical modules [1] - Quartz crystal resonators and oscillators are crucial for the stability and reliability of optical module performance [1] - In computing servers, stable clock signals are essential for operation, making quartz crystal oscillators key components for ensuring synchronization and high-speed data transmission [1] Group 2 - Quartz crystal oscillators are widely used in optical modules, computing servers, and other precision measurement devices [1] - The global quartz crystal market is expected to reach a scale of 53 billion USD by 2025 [1] - The global supply of quartz crystals is projected to remain insufficient until 2025 [1] Group 3 - Relevant concept stocks include Taijing Technology and Huilun Crystal [2]

Group 1 - The core stock price of Huineng Crystal (300460) closed at 11.68 yuan on August 19, 2025, with a slight increase of 0.52% and a turnover rate of 5.73% [1] - The company's latest quarterly performance report shows total revenue of 124 million yuan, a year-on-year decrease of 6.43%, and a net profit attributable to shareholders of 14.83 million yuan, down 61.26% year-on-year [1] - The company's liquidity ratios are as follows: current ratio at 1.129, quick ratio at 0.688, and debt-to-asset ratio at 62.38% [1] Group 2 - Huineng Crystal has made investments in 6 companies and participated in 10 bidding projects, indicating active engagement in business expansion [2] - The company holds 4 trademark registrations and 83 patents, showcasing its commitment to innovation and intellectual property [2] - Additionally, Huineng Crystal possesses 26 administrative licenses, reflecting its compliance and operational capabilities [2]

资金流向方面，今日主力资金净流出1127.74万元，占比成交额8.96%。其中，超大单净流出22.98万 元、占成交额0.18%，大单净流出1104.77万元、占成交额8.78%，中单净流出流出576.06万元、占成交 额4.58%，小单净流入1703.80万元、占成交额13.54%。 来源：金融界 惠伦晶体最新一期业绩显示，截至2025一季报，公司营业总收入1.24亿元、同比减少6.43%，归属净利 润1483.05万元，同比减少61.26%，扣非净利润2077.38万元，同比减少86.81%，流动比率1.129、速动比 率0.688、资产负债率62.38%。 天眼查商业履历信息显示，广东惠伦晶体科技股份有限公司，成立于2002年，位于东莞市，是一家以从 事仪器仪表制造业为主的企业。企业注册资本28080.4251万人民币，实缴资本16827.42万人民币。公司 法定代表人为赵剑华。 金融界消息 截至2025年7月31日收盘，惠伦晶体（300460）报收于10.79元，下跌2.18%，换手率 4.08%，成交量11.47万手，成交金额1.26亿元。 通过天眼查大数据分析，广东惠伦晶体科技股份有限公司共对外投 ...

Group 1: Stock Performance - Zhejiang Zhenyuan and Asia-Pacific Pharmaceutical both achieved a 2-day limit-up with increases of 10.01% and 9.98% respectively, driven by innovation in pharmaceuticals [2] - Chengdu XianDao saw a first board listing with a significant rise of 20.02%, attributed to innovative drug developments [2] - TaiJing Technology and YanHua Intelligent both recorded first board listings with increases of 9.97% and 9.94%, linked to Huawei's influence in robotics [5] Group 2: AI and Robotics - Nvidia's CEO suggested that Huawei's AI chips could potentially replace Nvidia's offerings, indicating a competitive shift in the AI chip market [4] - The domestic robotics industry is gaining traction with significant orders being awarded, highlighting its importance in national competition [7] Group 3: Market Trends - The light communication sector is expected to see sustained growth due to high demand in both domestic and international markets, with performance likely to continue improving [13] - The low-altitude economy is gaining attention, with a notable $1 billion procurement agreement signed for eVTOL aircraft, indicating growth potential in this sector [17] Group 4: Consumer and Retail - The Chinese government is implementing measures to boost consumer spending, which is expected to positively impact the retail sector [21] - Companies like Guoguang Chain and Hanshang Group have seen first board listings with increases of 9.98% and 9.97%, reflecting the positive sentiment in the retail market [23] Group 5: Solar and Food & Beverage - The price of polysilicon has increased by 12.4% week-on-week, indicating a rising trend in the solar industry [24] - The food and beverage sector is also benefiting from government initiatives aimed at enhancing consumer demand, with companies like Huangshi Group seeing a 10.10% increase [26]

Core Viewpoint - The company has corrected prior accounting errors and made retrospective adjustments to its financial reports, ensuring compliance with relevant accounting standards and disclosure rules [1][2]. Group 1 - The company held the sixth meeting of the fifth board of directors and the fifth meeting of the fifth supervisory board on April 28, 2025, where the proposal for correcting prior accounting errors was approved [1]. - The corrections and adjustments pertain to the company's periodic reports, which have been updated and are available on the official website [1][2]. - The updated financial reports include the corrected annual reports for 2022 and 2023, as well as the first quarter, half-year, and third quarter reports for 2024 [2].

[Core Financial Data](index=2&type=section&id=%E4%B8%80%E3%80%81%E4%B8%BB%E8%A6%81%E8%B4%A2%E5%8A%A1%E6%95%B0%E6%8D%AE) This section provides an overview of the company's key financial performance indicators, non-recurring gains and losses, and significant changes in financial metrics with their underlying causes [Overview of Key Financial Indicators](index=2&type=section&id=%EF%BC%88%E4%B8%80%EF%BC%89%20%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) In Q1 2024, operating revenue grew by 124.08% to 132 million yuan, and net loss attributable to shareholders narrowed significantly by 77.74% to 9.2 million yuan Key Financial Indicators for Q1 2024 | Indicator | Current Period (Yuan) | Prior Period (Yuan) | YoY Change | | :--- | :--- | :--- | :--- | | Operating Revenue | 132,298,289.01 | 59,041,160.28 | 124.08% | | Net Profit Attributable to Shareholders | -9,196,623.46 | -41,313,088.79 | 77.74% | | Net Profit Excluding Non-recurring Items | -11,120,099.55 | -42,224,770.03 | 73.66% | | Net Cash Flow from Operating Activities | 5,677,296.43 | 4,018,609.36 | 41.28% | | Basic Earnings Per Share (Yuan/share) | -0.03 | -0.1471 | 79.61% | | Total Assets (Period-end) | 1,734,885,527.63 | 1,782,210,443.43 (Prior Year-end) | -2.66% | | Owners' Equity Attributable to Shareholders (Period-end) | 815,192,399.58 | 888,850,227.80 (Prior Year-end) | -8.29% | [Analysis of Non-recurring Gains and Losses](index=2&type=section&id=%EF%BC%88%E4%BA%8C%EF%BC%89%20%E9%9D%9E%E7%BB%8F%E5%B8%B8%E6%80%A7%E6%8D%9F%E7%9B%8A%E9%A1%B9%E7%9B%AE%E5%92%8C%E9%87%91%E9%A2%9D) During the reporting period, total non-recurring gains and losses amounted to 1.923 million yuan, primarily from government subsidies, positively impacting current net profit Details of Non-recurring Gains and Losses | Item | Amount for Current Period (Yuan) | | :--- | :--- | | Government Subsidies Included in Current Profit/Loss | 2,243,768.24 | | Other Non-operating Income and Expenses | 20,312.06 | | Less: Income Tax Impact | 339,612.05 | | Less: Impact on Minority Interests (After Tax) | 992.16 | | **Total** | **1,923,476.09** | [Analysis of Significant Changes in Financial Indicators and Their Causes](index=3&type=section&id=%EF%BC%88%E4%B8%89%EF%BC%89%20%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%E5%8F%91%E7%94%9F%E5%8F%98%E5%8A%A8%E7%9A%84%E6%83%85%E5%86%B5%E5%8F%8A%E5%8E%9F%E5%9B%A0) Several financial indicators showed significant changes this period, with operating revenue surging due to increased sales, prepayments and notes payable rising, and sales and financial expenses decreasing due to reduced advertising and increased exchange gains - Operating revenue increased by **124.08%** year-on-year, primarily due to increased product sales[14](index=14&type=chunk) - Prepayments significantly increased by **382.29%** from the beginning of the period, mainly due to increased advance payments for raw materials[9](index=9&type=chunk) - Notes payable increased by **167.43%** from the beginning of the period, primarily due to the company's new domestic letters of credit[11](index=11&type=chunk) - Selling expenses decreased by **34.12%** year-on-year, mainly due to reduced advertising and service fees[16](index=16&type=chunk) - Financial expenses decreased by **31.75%** year-on-year, primarily due to increased exchange gains[17](index=17&type=chunk) [Shareholder Structure and Shareholding](index=3&type=section&id=%E4%BA%8C%E3%80%81%E8%82%A1%E4%B8%9C%E4%BF%A1%E6%81%AF) This section details the company's shareholder composition, including the total number of shareholders and the holdings of its top ten shareholders [Major Shareholder Holdings](index=3&type=section&id=%EF%BC%88%E4%B8%80%EF%BC%89%20%E6%99%AE%E9%80%9A%E8%82%A1%E8%82%A1%E4%B8%9C%E6%80%BB%E6%95%B0%E5%92%8C%E8%A1%A8%E5%86%B3%E6%9D%83%E6%81%A2%E5%A4%8D%E7%9A%84%E4%BC%98%E5%85%88%E8%82%A1%E8%82%A1%E4%B8%9C%E6%95%B0%E9%87%8F%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 29,533 common shareholders, with Xinjiang Huilun Equity Investment Partnership as the largest shareholder at 14.36%, acting in concert with controlling shareholder Zhao Jiqing, and the top three shareholders having pledged shares - As of the end of the reporting period, the company had **29,533** common shareholders[25](index=25&type=chunk) Top Ten Shareholders' Shareholding (Summary) | Shareholder Name | Shareholding Percentage (%) | Number of Shares Held | Pledged/Frozen Status | | :--- | :--- | :--- | :--- | | Xinjiang Huilun Equity Investment Partnership | 14.36% | 40,327,380 | Pledged/Frozen | | Zhao Jiqing | 5.34% | 15,000,000 | Pledged | | Shijin International Co., Ltd. | 3.23% | 9,079,723 | Pledged | | Hong Kong Tongying Investment Co., Ltd. | 1.97% | 5,531,238 | Not Applicable | | Dacheng CSI 360 Internet+ Big Data 100 Index Fund | 0.85% | 2,393,329 | Not Applicable | - The largest shareholder, Xinjiang Huilun Equity Investment Partnership (Limited Partnership), and the actual controller, Mr. Zhao Jiqing, are parties acting in concert[26](index=26&type=chunk) [Other Significant Matters](index=5&type=section&id=%E4%B8%89%E3%80%81%E5%85%B6%E4%BB%96%E9%87%8D%E8%A6%81%E4%BA%8B%E9%A1%B9) The company disclosed an ongoing significant equity change where controlling shareholder Xinjiang Huilun plans to transfer 10% of shares, potentially altering the controlling shareholder and actual controller, with the matter still in progress - Controlling shareholder Xinjiang Huilun signed a Share Transfer Intent Agreement with Huang Tiange on November 30, 2023, intending to transfer **10%** of the company's shares (**28,080,425** shares)[28](index=28&type=chunk) - This share transfer may lead to a change in the company's controlling shareholder and actual controller; as of the report disclosure date, the matter is progressing, and the transferee has paid a **50 million yuan** earnest deposit[28](index=28&type=chunk) [Financial Statements](index=5&type=section&id=%E5%9B%9B%E3%80%81%E5%AD%A3%E5%BA%A6%E8%B4%A2%E5%8A%A1%E6%8A%A5%E8%A1%A8) This section presents the company's consolidated financial statements, including the balance sheet, income statement, and cash flow statement [Consolidated Balance Sheet](index=5&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 March 31, 2024, total assets were 1.735 billion yuan, total liabilities 919 million yuan (debt-to-asset ratio 52.95%), and owners' equity attributable to parent company 815 million yuan, with current assets increasing due to higher accounts receivable and inventory Consolidated Balance Sheet Key Items (Unit: Yuan) | Item | Period-end Balance (2024-03-31) | Period-start Balance (2023-12-31) | | :--- | :--- | :--- | | **Total Assets** | **1,734,885,527.63** | **1,721,906,206.72** | | Total Current Assets | 640,219,836.87 | 604,184,208.24 | | Total Non-current Assets | 1,094,665,690.76 | 1,117,721,998.48 | | **Total Liabilities** | **918,599,523.12** | **896,200,036.13** | | Total Current Liabilities | 591,797,138.09 | 558,314,758.57 | | Total Non-current Liabilities | 326,802,385.03 | 337,885,277.56 | | **Total Owners' Equity** | **816,286,004.51** | **825,706,170.59** | | Total Owners' Equity Attributable to Parent Company | 815,192,399.58 | 824,389,023.04 | [Consolidated Income Statement](index=7&type=section&id=2%E3%80%81%E5%90%88%E5%B9%B6%E5%88%A9%E6%B6%A6%E8%A1%A8) In Q1 2024, operating revenue reached 132 million yuan, up 124.08%, with cost of sales at 109 million yuan, up 63.77%, improving gross margin; effective control over selling and financial expenses, combined with revenue growth, narrowed operating loss to 12.51 million yuan and net loss attributable to parent to 9.2 million yuan Consolidated Income Statement Key Items (Unit: Yuan) | Item | Amount for Current Period | Amount for Prior Period | | :--- | :--- | :--- | | I. Total Operating Revenue | 132,298,289.01 | 59,041,160.28 | | II. Total Operating Costs | 144,797,919.12 | 108,026,570.24 | | Including: Cost of Sales | 109,010,313.85 | 66,562,367.97 | | Selling Expenses | 5,216,724.13 | 7,919,079.53 | | Administrative Expenses | 13,980,762.12 | 14,772,680.80 | | Research and Development Expenses | 9,673,066.86 | 8,697,323.31 | | Financial Expenses | 6,524,534.33 | 9,560,136.86 | | III. Operating Profit | -12,509,415.40 | -41,325,535.33 | | V. Net Profit | -9,420,166.08 | -41,313,088.79 | | Net Profit Attributable to Owners of the Parent Company | -9,196,623.46 | -41,313,088.79 | | VIII. Basic Earnings Per Share | -0.03 | -0.1471 | [Consolidated Cash Flow Statement](index=9&type=section&id=3%E3%80%81%E5%90%88%E5%B9%B6%E7%8E%B0%E9%87%91%E6%B5%81%E9%87%8F%E8%A1%A8) During the period, net cash flow from operating activities was 5.68 million yuan, indicating improved core business cash generation; net cash outflow from investing activities was 12.99 million yuan, and from financing activities was 11.06 million yuan, resulting in a period-end cash and cash equivalents balance of 59.57 million yuan Consolidated Cash Flow Statement Key Items (Unit: Yuan) | Item | Amount for Current Period | Amount for Prior Period | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 5,677,296.43 | 4,018,609.36 | | Net Cash Flow from Investing Activities | -12,987,170.03 | -17,487,154.79 | | Net Cash Flow from Financing Activities | -11,063,660.48 | 71,978,939.07 | | Effect of Exchange Rate Changes on Cash and Cash Equivalents | 1,138,740.88 | -634,316.53 | | **Net Increase in Cash and Cash Equivalents** | **-17,234,793.20** | **57,876,077.11** | | **Cash and Cash Equivalents at End of Period** | **59,565,385.82** | **105,350,175.64** | [Audit Opinion](index=10&type=section&id=%EF%BC%88%E4%B8%89%EF%BC%89%20%E5%AE%A1%E8%AE%A1%E6%8A%A5%E5%91%8A) The company's Q1 2024 report is unaudited - The company's first-quarter report is unaudited[39](index=39&type=chunk)

[Important Notice, Table of Contents and Definitions](index=2&type=section&id=Item%201.%20Important%20Notice%2C%20Table%20of%20Contents%20and%20Definitions) This section provides essential disclaimers, outlines the report structure, and defines key terms for clarity [Important Notice](index=2&type=section&id=Important%20Notice) The board of directors, supervisory board, and senior management guarantee the truthfulness, accuracy, and completeness of this annual report, with the 2023 profit distribution plan proposing no cash dividends, bonus shares, or capital increase from provident funds - The company's 2023 profit distribution plan proposes no cash dividends, no bonus shares, and no capitalization of provident funds[3](index=3&type=chunk)[4](index=4&type=chunk) - Forward-looking statements regarding future plans and development strategies in this report do not constitute a substantive commitment to investors, who should be aware of investment risks[3](index=3&type=chunk) [Definitions](index=5&type=section&id=Definitions) This section defines key terms used in the report, including company entity abbreviations, the reporting period (January 1 to December 31, 2023), and technical terms like piezoelectric quartz crystal components, resonators, and oscillators - The reporting period is defined as January 1, 2023, to December 31, 2023[11](index=11&type=chunk) [Company Profile and Key Financial Indicators](index=6&type=section&id=Item%202.%20Company%20Profile%20and%20Key%20Financial%20Indicators) This section presents the company's fundamental information and a summary of its key financial performance and position [Company Information](index=6&type=section&id=I.%20Company%20Information) This section provides the company's basic business registration information, including stock abbreviation "Huilon Crystal", stock code 300460, legal representative Zhao Jiqing, and registered address and contact details Company Basic Information | Item | Information | | :--- | :--- | | Stock Abbreviation | Huilon Crystal | | Stock Code | 300460 | | Legal Representative | Zhao Jiqing | | Registered Address | No. 68 Huangjiang East Ring Road, Huangjiang Town, Dongguan City, Guangdong Province | [Key Accounting Data and Financial Indicators](index=7&type=section&id=V.%20Key%20Accounting%20Data%20and%20Financial%20Indicators) In 2023, the company's operating revenue increased by 19.55% to **398.43 million yuan**, but net profit attributable to shareholders remained negative at **-168.40 million yuan**, similar to the **-172.67 million yuan** loss in the previous year, while total assets decreased by 8.02% to **1.72 billion yuan**, and net cash flow from operating activities turned negative, significantly decreasing by 335.12% Key Financial Indicators | Key Financial Indicators | 2023 | 2022 (Adjusted) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Operating Revenue (yuan) | 398,433,193.73 | 333,283,222.78 | 19.55% | | Net Profit Attributable to Shareholders of Listed Company (yuan) | -168,400,731.40 | -172,669,062.11 | 2.47% | | Net Profit Attributable to Shareholders of Listed Company After Deducting Non-Recurring Gains and Losses (yuan) | -189,051,015.53 | -183,157,836.31 | -3.22% | | Net Cash Flow from Operating Activities (yuan) | -46,813,167.65 | 19,910,653.03 | -335.12% | | Basic Earnings Per Share (yuan/share) | -0.60 | -0.62 | 3.23% | | Weighted Average Return on Net Assets | -18.61% | -15.67% | -2.94% | | Total Assets (yuan) | 1,721,906,206.72 | 1,872,131,181.35 | -8.02% | | Net Assets Attributable to Shareholders of Listed Company (yuan) | 824,389,023.04 | 991,497,786.38 | -16.85% | - The company retrospectively adjusted prior-period accounting data due to the implementation of "Interpretation No. 16 of Accounting Standards for Business Enterprises" issued by the Ministry of Finance[17](index=17&type=chunk)[18](index=18&type=chunk) [Quarterly Key Financial Indicators](index=8&type=section&id=VI.%20Quarterly%20Key%20Financial%20Indicators) The company achieved slight net profits in the second and third quarters of 2023, but a significant loss of **142.09 million yuan** in the fourth quarter led to an overall annual loss, with operating cash flow also experiencing a substantial outflow of **88.07 million yuan** in the fourth quarter Quarterly Financial Performance | Indicator (yuan) | Q1 | Q2 | Q3 | Q4 | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue | 59,041,160.28 | 122,022,884.52 | 132,082,413.27 | 85,286,735.66 | | Net Profit Attributable to Shareholders of Listed Company | -41,313,088.79 | 7,867,437.11 | 7,138,752.18 | -142,093,831.90 | | Net Cash Flow from Operating Activities | 4,018,609.36 | 10,455,036.96 | 26,782,089.22 | -88,068,903.19 | [Non-Recurring Gains and Losses and Amounts](index=9&type=section&id=VIII.%20Non-Recurring%20Gains%20and%20Losses%20and%20Amounts) In 2023, the company's total non-recurring gains and losses amounted to **20.65 million yuan**, primarily from government grants (**17.33 million yuan**) and disposal gains/losses on non-current assets (**7.54 million yuan**) Non-Recurring Gains and Losses | Item (yuan) | 2023 Amount | 2022 Amount | | :--- | :--- | :--- | | Gains/Losses from Disposal of Non-Current Assets | 7,537,898.56 | 2,351.63 | | Government Grants Recognized in Current Profit/Loss | 17,328,693.78 | 9,288,061.18 | | **Total** | **20,650,284.13** | **10,488,774.20** | [Management Discussion and Analysis](index=10&type=section&id=Item%203.%20Management%20Discussion%20and%20Analysis) This section provides an in-depth analysis of the company's operational performance, financial condition, and future outlook [Industry Overview and Company Position](index=10&type=section&id=I.%20Industry%20Overview%20During%20the%20Reporting%20Period) The company operates in the quartz crystal component manufacturing industry, benefiting from national strategic support, and despite a global market decline in 2023 due to price and volume decreases, the industry is projected to grow at a **10.26% CAGR** to **$7.326 billion** by 2030, driven by emerging applications like 5G, automotive electronics, and IoT, with the company holding a leading domestic position in miniaturized and high-frequency products as a national "Little Giant" enterprise - According to QYResearch, the global quartz crystal component market is projected to reach **$7.326 billion** by 2030, with a compound annual growth rate of approximately **10.26%** from 2024 to 2030[35](index=35&type=chunk) - Automotive electronics, wearable devices, and IoT are expected to be the fastest-growing sub-markets, with projected compound annual growth rates of **12.26%**, **13.19%**, and **12.70%** respectively from 2024 to 2030[40](index=40&type=chunk)[41](index=41&type=chunk) - The company is a national "Specialized, Refined, Unique, and New" "Little Giant" enterprise, possessing domestic leading advantages in miniaturization (1210 size products already shipped), high-value-added products (TSX thermal crystals and TCXO oscillators shipments increased by **71%** year-on-year), and photolithography processes[44](index=44&type=chunk)[45](index=45&type=chunk)[46](index=46&type=chunk) [Main Business Activities](index=15&type=section&id=II.%20Main%20Business%20Activities%20During%20the%20Reporting%20Period) The company's main business involves R&D, production, and sales of quartz crystal components, including SMD resonators, TSX thermal crystals, and TCXO oscillators, with 2023 performance impacted by slower-than-expected global economic recovery and intensified industry competition, leading to an **18.73%** decrease in average product price and underutilized overall capacity, despite a **50.24%** increase in sales volume, as the company strategically expands into emerging industries like automotive electronics, IoT, and Beidou navigation - Key performance influencing factors include slower-than-expected global economic recovery, intense industry competition leading to product price decreases, and the company's overall production capacity not being fully utilized[58](index=58&type=chunk)[59](index=59&type=chunk) Electronic Components Sales Performance | Indicator | 2023 | Year-on-Year Change | | :--- | :--- | :--- | | Electronic Components Sales Volume | 1,050,170,000 units | +50.24% | | Average Price of Electronic Components | approximately 0.35 yuan | -18.73% | [Core Competitiveness Analysis](index=17&type=section&id=III.%20Core%20Competitiveness%20Analysis) The company's core competitiveness lies in its technological innovation, product development, mass production management, and platform certifications, having mastered photolithography for high-frequency, miniaturized crystal chips and achieved supply of SMD1210 products, while also enhancing mass production capabilities through intelligent and digital management, and notably being the first Chinese mainland crystal oscillator manufacturer to enter Qualcomm's automotive-grade chip certification reference design list, alongside certifications from MediaTek and other mainstream platforms, demonstrating significant first-mover advantage - Technology Advantage: Mastered photolithography process based on semiconductor technology, capable of producing high-fundamental frequency, miniaturized MHz crystal chips[60](index=60&type=chunk) - Product Advantage: Among the earliest in China to mass-produce miniaturized products such as SMD2520, SMD2016, and SMD1612, and has achieved supply of SMD1210[62](index=62&type=chunk) - Platform Certification Advantage: Obtained multiple platform certifications from Qualcomm, MediaTek, etc., being the only Chinese mainland enterprise listed in MediaTek's mobile phone chip reference design list and the first crystal oscillator manufacturer to enter Qualcomm's automotive-grade chip certification reference design list[48](index=48&type=chunk)[66](index=66&type=chunk)[67](index=67&type=chunk) [Analysis of Main Business](index=19&type=section&id=IV.%20Analysis%20of%20Main%20Business) In 2023, the company's operating revenue reached **398.43 million yuan**, a 19.55% increase year-on-year, but net profit resulted in a loss of **168.40 million yuan**, with electronic components business revenue at **366.33 million yuan**, growing by 22.81% and accounting for **91.94%** of total revenue, and despite a global decline in crystal oscillator sales, the company's sales volume significantly increased by **50.24%**, enhancing market share, as the company actively responded to market challenges by intensifying sales efforts, strengthening brand promotion, and participating in industry standard setting Revenue Composition | Revenue Composition | 2023 Amount (yuan) | Proportion of Operating Revenue | Year-on-Year Change | | :--- | :--- | :--- | :--- | | **By Industry** | | | | | Electronic Components | 366,334,906.60 | 91.94% | 22.81% | | Software and Information Technology Services | 32,098,287.13 | 8.06% | -8.25% | | **By Product** | | | | | SMD | 362,564,618.61 | 91.00% | 23.11% | | **By Region** | | | | | Domestic Sales | 316,949,522.75 | 80.95% | 38.66% | | Overseas Sales | 81,483,670.98 | 19.05% | -24.61% | | **By Sales Model** | | | | | Direct Sales | 222,565,534.63 | 55.86% | 56.58% | | Distribution | 175,867,659.10 | 44.14% | -11.00% | - In 2023, electronic component sales volume increased by **50.24%** year-on-year, primarily due to the company's increased sales efforts, expanded sales network, and strategic layout in emerging application fields[76](index=76&type=chunk) Expense Analysis | Expense Item (yuan) | 2023 | 2022 | Year-on-Year Change | Explanation of Significant Change | | :--- | :--- | :--- | :--- | :--- | | Selling Expenses | 25,050,110.22 | 20,026,523.74 | 25.08% | Increase in sales organization, personnel, and promotional expenses | | Administrative Expenses | 62,384,367.26 | 49,603,927.53 | 25.76% | Reversal of equity incentive expenses and increased amortization of renovation costs | | Financial Expenses | 25,760,382.78 | 16,592,175.43 | 55.26% | Increase in interest expenses and decrease in exchange gains | [Research and Development Investment](index=23&type=section&id=4.%20Research%20and%20Development%20Investment) In 2023, the company's total R&D investment was **34.61 million yuan**, accounting for **8.69%** of operating revenue, a decrease from **12.13%** in 2022, with R&D projects focusing on high-frequency, miniaturized crystal oscillator products for 5G, automotive, and IoT fields, such as 5G SMD1210 76.8MHz crystals and high-spec automotive SMD3225 crystals, while the number of R&D personnel decreased from 162 to 121 R&D Investment Overview | Indicator | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | | R&D Investment Amount (yuan) | 34,609,841.55 | 40,413,205.17 | 35,465,110.10 | | R&D Investment as Percentage of Operating Revenue | 8.69% | 12.13% | 5.63% | - Key R&D projects include temperature-compensated crystal oscillators for GPS navigation modules, ultra-small general-purpose crystals for 5G, high-frequency differential crystal oscillators, and general-purpose automotive crystals, aiming to target high-end markets and meet demands in emerging fields[84](index=84&type=chunk)[86](index=86&type=chunk) [Cash Flow](index=27&type=section&id=5.%20Cash%20Flow) In 2023, net cash flow from operating activities was **-46.81 million yuan**, a significant year-on-year decrease of 335.12%, primarily due to reduced tax refunds received, while net cash outflow from investing activities narrowed by 68.42% to **26.37 million yuan** due to reduced payments for equipment and plant construction, and net cash inflow from financing activities significantly increased to **87.67 million yuan**, mainly driven by increased borrowings from financial institutions Cash Flow Summary | Item (yuan) | 2023 | 2022 | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | -46,813,167.65 | 19,910,653.03 | -335.12% | | Net Cash Flow from Investing Activities | -26,372,240.07 | -83,522,413.45 | 68.42% | | Net Cash Flow from Financing Activities | 87,669,424.99 | -1,004,558.85 | 8,827.16% | | Net Increase in Cash and Cash Equivalents | 14,779,957.00 | -62,933,012.56 | 123.49% | [Analysis of Assets and Liabilities](index=28&type=section&id=VI.%20Analysis%20of%20Assets%20and%20Liabilities) As of the end of 2023, the company's total assets were **1.72 billion yuan**, a year-on-year decrease of 8.02%, with fixed assets accounting for the largest proportion (**52.58%**) and inventory for **15.49%** of the asset structure, while liabilities saw a decrease in short-term borrowings and a significant increase in long-term borrowings, indicating a debt structure adjustment, and **1.001 billion yuan** of assets were restricted at year-end, primarily fixed assets, intangible assets, and construction in progress used as collateral for borrowings - As of the end of the reporting period, the company had **1.001 billion yuan** in restricted assets, primarily including fixed assets (**927 million yuan**), intangible assets (**25 million yuan**), and construction in progress (**34 million yuan**) used for finance leases and loan collateral[96](index=96&type=chunk) Asset and Liability Composition | Asset/Liability Item | Amount as of Dec 31, 2023 (yuan) | Proportion of Total Assets | Amount as of Jan 1, 2023 (yuan) | Proportion of Total Assets | | :--- | :--- | :--- | :--- | :--- | | Fixed Assets | 905,429,645.16 | 52.58% | 994,444,606.48 | 53.12% | | Inventory | 266,706,556.94 | 15.49% | 327,740,729.58 | 17.51% | | Short-term Borrowings | 243,548,888.88 | 14.14% | 365,876,110.90 | 19.54% | | Long-term Borrowings | 240,031,997.58 | 13.94% | 144,457,898.00 | 7.72% | [Analysis of Major Holding and Participating Companies](index=30&type=section&id=IX.%20Analysis%20of%20Major%20Holding%20and%20Participating%20Companies) During the reporting period, among the company's major subsidiaries, Huilon Crystal (Chongqing) Technology Co., Ltd. had the largest asset scale but incurred a significant net loss of **85.80 million yuan**, while Guangzhou Chuangxiangyun Technology Co., Ltd. achieved a net profit of **3.79 million yuan**, and the company also established a new South Korean sub-subsidiary and increased capital in its Shenzhen subsidiary to introduce an employee stock ownership platform Key Subsidiary Performance | Company Name | Total Assets (yuan) | Net Assets (yuan) | Operating Revenue (yuan) | Net Profit (yuan) | | :--- | :--- | :--- | :--- | :--- | | Huilon Crystal (Chongqing) Technology Co., Ltd. | 1,105,728,192.46 | 418,626,504.98 | 143,936,328.41 | -85,804,738.03 | | Guangzhou Chuangxiangyun Technology Co., Ltd. | 94,389,330.04 | 71,508,874.26 | 37,611,618.38 | 3,788,926.53 | [Outlook for Company's Future Development](index=31&type=section&id=XI.%20Outlook%20for%20Company's%20Future%20Development) The company aims to become a global advanced frequency component supplier, capitalizing on 5G, IoT, and domestic substitution opportunities, with key 2024 operational plans focusing on deepening R&D, improving sales systems, optimizing production, and innovating talent mechanisms, while facing primary risks including macroeconomic uncertainty, intensified market competition, product price volatility, management risks, exchange rate risks, accounts receivable collection, and slow inventory turnover - 2024 Operating Plan: 1. Deepen R&D, focusing on core processes and products; 2. Improve sales system, increasing delivery proportion to key accounts; 3. Establish an efficient planning and management system; 4. Strengthen automation, intelligence, and digitalization of production lines; 5. Implement talent innovation mechanisms[106](index=106&type=chunk) - The company faces primary risks including macroeconomic market risks, intensified market competition, product price volatility, management risks, exchange rate risks, accounts receivable collection risks, and slow inventory turnover risks[108](index=108&type=chunk)[110](index=110&type=chunk)[113](index=113&type=chunk)[114](index=114&type=chunk) [Corporate Governance](index=34&type=section&id=Item%204.%20Corporate%20Governance) This section details the company's governance structure, compliance, and management practices [Overview of Corporate Governance](index=34&type=section&id=I.%20Basic%20Status%20of%20Corporate%20Governance) During the reporting period, the company operated in strict compliance with laws and regulations such as the "Company Law" and "Securities Law", continuously improving its corporate governance structure and internal control system, with no significant discrepancies between its actual governance situation and relevant laws and regulations [Information on Directors, Supervisors and Senior Management](index=36&type=section&id=VII.%20Information%20on%20Directors%2C%20Supervisors%20and%20Senior%20Management) This section details the basic information, professional experience, shareholding changes, and remuneration of the company's directors, supervisors, and senior management, noting the resignation of Vice General Manager Mr. Weng Qiulin during the reporting period, with the total pre-tax remuneration for directors, supervisors, and senior management amounting to **4.11 million yuan** in 2023 - During the reporting period, Mr. Weng Qiulin, a senior management member, resigned from his position as Vice General Manager due to personal reasons[131](index=131&type=chunk)[132](index=132&type=chunk) Director, Supervisor, and Senior Management Remuneration | Name | Position | Total Pre-tax Remuneration from the Company (10,000 yuan) | | :--- | :--- | :--- | | Zhao Jiqing | Chairman | 30 | | Han Jiling | General Manager | 60 | | Jiang Jianwei | Vice General Manager | 77.24 | | **Total** | **--** | **410.65** | [Company Staff Information](index=47&type=section&id=XI.%20Company%20Staff%20Information) As of the end of 2023, the company had a total of 1,062 employees, including 612 production personnel and 254 technical personnel, and has established and implemented corresponding remuneration policies and training programs to support employee development and company strategic objectives Employee Professional Composition | Professional Category | Number of People | | :--- | :--- | | Production Personnel | 612 | | Sales Personnel | 56 | | Technical Personnel | 254 | | Financial Personnel | 17 | | Administrative Personnel | 123 | | **Total** | **1,062** | [Implementation of Company's Equity Incentive Plans, Employee Stock Ownership Plans or Other Employee Incentive Measures](index=48&type=section&id=XIII.%20Implementation%20of%20Company's%20Equity%20Incentive%20Plans%2C%20Employee%20Stock%20Ownership%20Plans%20or%20Other%20Employee%20Incentive%20Measures) The third vesting period of the company's 2020 restricted stock incentive plan was canceled and forfeited due to unmet company-level performance assessment requirements, while the company has established and implemented internal control systems covering all business segments, regularly supervised by the internal audit department, with no significant internal control deficiencies found during the reporting period - The third vesting period of the 2020 restricted stock incentive plan was canceled and forfeited for 28 incentive recipients, involving **2.055 million shares**, due to the company's failure to meet performance assessment requirements[166](index=166&type=chunk)[229](index=229&type=chunk) - The company's internal control evaluation report concluded that the company has maintained effective internal controls over financial reporting in all material aspects in accordance with the enterprise internal control standards system and relevant regulations, with no significant deficiencies found in internal controls over financial or non-financial reporting[180](index=180&type=chunk)[181](index=181&type=chunk) [Environmental and Social Responsibility](index=55&type=section&id=Item%205.%20Environmental%20and%20Social%20Responsibility) This section outlines the company's commitment and actions regarding environmental protection and social welfare [Environmental and Social Responsibility Overview](index=55&type=section&id=I.%20Significant%20Environmental%20Issues) The company is not a key pollutant discharge unit designated by environmental authorities and has obtained ISO14001 and other environmental management certifications, while in terms of social responsibility, it focuses on protecting the rights of shareholders, employees, suppliers, and customers, operates legally and compliantly, and actively participates in social welfare, contributing to rural revitalization by providing employment opportunities - The company is not a key pollutant discharge unit and received no administrative penalties for environmental issues during the reporting period[184](index=184&type=chunk) - The company provided employment to over 50 individuals in regions such as Guizhou and Sichuan through job creation and cooperation with vocational colleges, consolidating poverty alleviation achievements[187](index=187&type=chunk) [Significant Matters](index=57&type=section&id=Item%206.%20Significant%20Matters) This section reports on major events and transactions that significantly impacted the company during the reporting period [Significant Related Party Transactions](index=60&type=section&id=XIV.%20Significant%20Related%20Party%20Transactions) During the reporting period, the company engaged in purchase and sales transactions with its joint venture Shaanxi Huihua Electronics and utilized financing lease services from related party Anhui Zhengqi Financial Leasing Co., Ltd., and additionally, the company plans to transfer a **40%** equity stake in its subsidiary Chuangxiangyun to related party Dongguan Huichuang Industrial Investment Partnership (Limited Partnership) to implement employee incentives - The company intends to transfer its **40%** equity stake in Chuangxiangyun to the employee stock ownership platform Dongguan Huichuang Industrial Investment Partnership (Limited Partnership); as of the report disclosure date, the industrial and commercial change has been completed, but the transfer payment has not yet been made[207](index=207&type=chunk)[219](index=219&type=chunk) [Significant Guarantees](index=62&type=section&id=2.%20Significant%20Guarantees) As of the end of the reporting period, the company's total actual guarantee balance for its subsidiaries amounted to **443.61 million yuan**, representing **53.81%** of the company's net assets, primarily supporting the financing needs of its subsidiaries Guangzhou Chuangxiangyun and Chongqing Huilon Subsidiary Guarantee Information | Indicator | Amount (10,000 yuan) | | :--- | :--- | | Total Actual Guarantee Balance for Subsidiaries at End of Reporting Period | 44,360.55 | | Proportion of Total Actual Guarantees to Company's Net Assets | 53.81% | [Explanation of Other Significant Matters](index=64&type=section&id=XVI.%20Explanation%20of%20Other%20Significant%20Matters) The company's controlling shareholder, Xinjiang Huilon, signed a "Share Transfer Intent Agreement" on November 30, 2023, to transfer **10%** of its shares in the company, which may lead to a change in the company's controlling shareholder and actual controller, and the company also adjusted the equity structure of two subsidiaries (Guangzhou Chuangxiangyun, Shenzhen Huilon) to introduce employee stock ownership platforms - Controlling shareholder Xinjiang Huilon intends to transfer **10%** of the company's shares, which may lead to a change in the company's controlling shareholder and actual controller; as of the report disclosure date, this matter is still in progress[218](index=218&type=chunk) - Subsidiary Shenzhen Huilon introduced an employee stock ownership platform and increased capital, after which the company's shareholding percentage will decrease from **100%** to **65%**[219](index=219&type=chunk) [Share Changes and Shareholder Information](index=66&type=section&id=Item%207.%20Share%20Changes%20and%20Shareholder%20Information) This section provides details on changes in the company's share capital and information regarding its shareholders [Share Change Information](index=66&type=section&id=I.%20Share%20Change%20Information) During the reporting period, the company's total share capital increased from 280,624,251 shares to 280,804,251 shares due to the completion of vesting and listing of **180,000 shares** from the second batch of the second vesting period of the 2020 restricted stock incentive plan - The company's total share capital increased by **180,000 shares** due to equity incentive exercise, with the total share capital at period-end being **280,804,251 shares**[223](index=223&type=chunk)[224](index=224&type=chunk) [Shareholder and Actual Controller Information](index=69&type=section&id=III.%20Shareholder%20and%20Actual%20Controller%20Information) As of the end of 2023, the company had **30,247** common shareholders, with Xinjiang Huilon Equity Investment Partnership (Limited Partnership) as the controlling shareholder holding **14.36%**, and Mr. Zhao Jiqing as the actual controller directly holding **5.34%**, with the controlling shareholder and actual controller acting in concert Top Shareholders | Shareholder Name | Shareholding Percentage | Number of Shares Held at End of Reporting Period | | :--- | :--- | :--- | | Xinjiang Huilon Equity Investment Partnership (Limited Partnership) | 14.36% | 40,327,380 | | Zhao Jiqing | 5.34% | 15,000,000 | | Shijin International Co., Ltd. | 3.23% | 9,079,723 | [Preferred Shares Information](index=74&type=section&id=Item%208.%20Preferred%20Shares%20Information) This section provides an overview of the company's preferred shares [Preferred Shares Overview](index=74&type=section&id=Preferred%20Shares%20Overview) During the reporting period, the company had no preferred shares [Bond Information](index=75&type=section&id=Item%209.%20Bond%20Information) This section provides an overview of the company's bond-related matters [Bond Overview](index=75&type=section&id=Bond%20Overview) During the reporting period, the company had no bond-related matters [Financial Report](index=76&type=section&id=Item%2010.%20Financial%20Report) This section contains the audited financial statements and related notes for the reporting period [Audit Report](index=76&type=section&id=I.%20Audit%20Report) Da Hua Certified Public Accountants (Special General Partnership) issued a standard unqualified audit opinion on the company's 2023 financial statements, concluding that the financial statements fairly presented the company's financial position and operating results in all material respects, with key audit matters including revenue recognition, allowance for doubtful accounts, and inventory and impairment provisions - The audit opinion type is a standard unqualified opinion[249](index=249&type=chunk) - Key audit matters include: 1. Revenue recognition; 2. Allowance for doubtful accounts; 3. Inventory and impairment provisions[252](index=252&type=chunk) [Financial Statements](index=81&type=section&id=II.%20Financial%20Statements) This section includes the company's 2023 consolidated and parent company balance sheets, income statements, cash flow statements, and statements of changes in owners' equity [Consolidated Balance Sheet](index=81&type=section&id=1.%20Consolidated%20Balance%20Sheet) As of December 31, 2023, the company's total assets were **1.72 billion yuan**, a decrease of 8.02% from the beginning of the year; total liabilities were **896.20 million yuan**, a slight increase from the beginning of the year; and total owners' equity attributable to the parent company was **824.39 million yuan**, a decrease of 16.85% from the beginning of the year, with an asset-liability ratio of **52.05%** Consolidated Balance Sheet Summary | Item (yuan) | Dec 31, 2023 | Jan 1, 2023 | | :--- | :--- | :--- | | Total Assets | 1,721,906,206.72 | 1,872,131,181.35 | | Total Liabilities | 896,200,036.13 | 880,633,394.97 | | Total Owners' Equity Attributable to Parent Company | 824,389,023.04 | 991,497,786.38 | [Consolidated Income Statement](index=86&type=section&id=3.%20Consolidated%20Income%20Statement) In 2023, the company achieved total operating revenue of **398.43 million yuan**, a 19.55% increase year-on-year, however, due to total operating costs reaching **552.12 million yuan**, the company's operating profit was **-197.61 million yuan**, resulting in a net profit attributable to parent company shareholders of **-168.40 million yuan**, marking the second consecutive year of loss Consolidated Income Statement Summary | Item (yuan) | 2023 | 2022 | | :--- | :--- | :--- | | Total Operating Revenue | 398,433,193.73 | 333,283,222.78 | | Total Operating Costs | 552,120,540.03 | 478,540,339.84 | | Operating Profit | -197,607,599.22 | -197,344,144.97 | | Net Profit | -168,833,583.85 | -172,669,062.11 | | Net Profit Attributable to Parent Company Shareholders | -168,400,731.40 | -172,669,062.11 | [Consolidated Cash Flow Statement](index=89&type=section&id=5.%20Consolidated%20Cash%20Flow%20Statement) In 2023, the company's net cash flow from operating activities was **-46.81 million yuan**, a significant year-on-year deterioration, while net cash outflow from investing activities was **26.37 million yuan**, and net cash inflow from financing activities was **87.67 million yuan**, resulting in a final net increase in cash and cash equivalents of **14.78 million yuan** Consolidated Cash Flow Summary | Item (yuan) | 2023 | 2022 | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | -46,813,167.65 | 19,910,653.03 | | Net Cash Flow from Investing Activities | -26,372,240.07 | -83,522,413.45 | | Net Cash Flow from Financing Activities | 87,669,424.99 | -1,004,558.85 | | Net Increase in Cash and Cash Equivalents | 14,779,957.00 | -62,933,012.56 | [Notes to Financial Statements](index=103&type=section&id=V.%20Significant%20Accounting%20Policies%20and%20Estimates) The notes section elaborates on the company's accounting policies, accounting estimates, and changes therein, noting the company's implementation of "Interpretation No. 16 of Accounting Standards for Business Enterprises" and a change in accounting estimate for the provision for doubtful accounts, increasing the provision ratio for certain aged accounts receivable to more fairly reflect its financial position - Starting from 2023, the company implemented the accounting treatment in "Interpretation No. 16 of Accounting Standards for Business Enterprises" regarding the non-application of initial recognition exemption for deferred income tax related to assets and liabilities arising from single transactions, and retrospectively adjusted 2022 data[492](index=492&type=chunk) - The company changed its accounting estimate for the allowance for doubtful accounts, increasing the provision ratio for accounts receivable aged 1-3 years, which resulted in an increase of **17.42 million yuan** in the allowance for doubtful accounts[494](index=494&type=chunk)[495](index=495&type=chunk)

关于前期会计差错更正暨追溯调整涉及定期报告更新的提示性公告 本公司及董事会全体成员保证信息披露的内容真实、准确、完整，没有虚 假记载、误导性陈述或重大遗漏。 广东惠伦晶体科技股份有限公司(以下简称"公司")于 2025 年 4 月 28 日 召开第五届董事会第六次会议、第五届监事会第五次会议，审议通过了《关于前 期会计差错更正及追溯调整的议案》。 证券代码：300460 证券简称：惠伦晶体 公告编号：2025-043 具体前期会计差错更正及追溯调整涉及定期报告更新的内容详见公司于 2024 年 4 月 29 日 于 公 司 指 定 信 息 披 露 媒 体 巨 潮 资 讯 网 (http://www.cninfo.com.cn)上刊登的《关于前期会计差错更正暨追溯调整的公 告》(公告编号：2025-036)。 广东惠伦晶体科技股份有限公司 广东惠伦晶体科技股份有限公司董事会 2025 年 7 月 15 日 更新后的公司《2022 年年度报告》（更正后）、《2022 年年度报告摘要》（更 正后）、《2023 年年度报告》（更正后）、《2023 年年度报告摘要》（更正后）、《2024 年第一季度报告》（更正后）、《 ...

[Key Financial and Operational Analysis](index=2&type=section&id=Item%20I.%20Key%20Financial%20Data) [Overview of Core Financial Indicators](index=2&type=section&id=Item%20%28I%29.%20Major%20Accounting%20Data%20and%20Financial%20Indicators) YTD revenue grew 41.46% to 1.704 million CNY net profit; Q3 recorded a 0.877 million CNY net loss, total assets slightly decreased Summary of Core Financial Indicators | Indicator | Current Period (Q3) | YoY Change | YTD | YoY Change | | :--- | :--- | :--- | :--- | :--- | | **Operating Revenue (CNY)** | 155,566,615.76 | 17.78% | 442,961,653.10 | 41.46% | | **Net Profit Attributable to Shareholders (CNY)** | -877,178.63 | -112.29% | 1,704,178.16 | 106.48% | | **Net Profit Attributable to Shareholders (Excl. Non-recurring Items) (CNY)** | -18,345,083.60 | -378.18% | -23,276,983.79 | 45.67% | | **Net Cash Flow from Operating Activities (CNY)** | N/A | N/A | 69,310,330.73 | 68.00% | | **Basic Earnings Per Share (CNY/share)** | -0.0031 | -112.20% | 0.0061 | 106.51% | | **Total Assets (CNY)** | 1,745,218,935.02 | -2.08% (vs. end of prior year) | | | | **Total Equity Attributable to Shareholders (CNY)** | 826,093,201.20 | -7.06% (vs. end of prior year) | | | [Non-recurring Gains and Losses Analysis](index=2&type=section&id=Item%20%28II%29.%20Non-recurring%20Gains%20and%20Losses%20Items%20and%20Amounts) YTD non-recurring gains and losses totaled 24.981 million CNY, primarily from government subsidies, with core business still facing profitability pressure - Net profit attributable to shareholders (excluding non-recurring gains and losses) for the year-to-date period was **-23,276,983.79 CNY**, indicating weak core business profitability and current profits largely relying on non-recurring items like government subsidies[5](index=5&type=chunk)[6](index=6&type=chunk) Non-recurring Gains and Losses Items and Amounts | Item | YTD Amount (CNY) | Description | | :--- | :--- | :--- | | Government subsidies included in current profit/loss | 29,353,231.84 | Primary component | | Other non-operating income/expenses and fair value changes | 37,747.70 | | | Less: Income tax impact | 4,408,825.43 | | | **Total** | **24,981,161.95** | | [Analysis of Financial Indicator Changes](index=3&type=section&id=Item%20%28III%29.%20Changes%20and%20Reasons%20for%20Major%20Accounting%20Data%20and%20Financial%20Indicators) Revenue growth was driven by recovering demand in consumer electronics and communications markets, while significant balance sheet changes reflect increased prepayments, notes payable, and long-term payables due to business activities - Operating revenue increased by **41.46%** year-over-year, primarily due to a rebound in terminal demand for consumer electronics and communication sectors, leading to increased orders compared to the same period last year[9](index=9&type=chunk) - Net cash flow from operating activities increased by **68%** year-over-year, mainly attributed to increased cash received from sales of goods[9](index=9&type=chunk) - Significant balance sheet changes include: - **Prepayments** increased by **438.65%** from the beginning of the year due to increased prepayments for goods to suppliers[9](index=9&type=chunk) - **Notes payable** increased by **267.01%** from the beginning of the year due to increased use of bank acceptance bills for supplier payments[9](index=9&type=chunk) - **Long-term payables** increased by **727.91%** from the beginning of the year due to increased lease payments from sale-leaseback transactions[9](index=9&type=chunk) [Shareholder Structure Analysis](index=3&type=section&id=Item%20II.%20Shareholder%20Information) [Major Shareholder Holdings](index=3&type=section&id=Item%20%28I%29.%20Total%20Number%20of%20Common%20Shareholders%2C%20Number%20of%20Preferred%20Shareholders%20with%20Restored%20Voting%20Rights%20and%20Top%20Ten%20Shareholders%27%20Holdings) As of the reporting period end, the company had 37,677 common shareholders, with significant combined holdings by Xinjiang Huilun Equity Investment Partnership and actual controller Zhao Jiqing, and the top three shareholders having pledged shares - The total number of common shareholders at the end of the reporting period was **37,677** accounts[11](index=11&type=chunk) Top Ten Shareholders' Holdings | Shareholder Name | Holding Percentage | Number of Shares Held | Pledged/Frozen Status | | :--- | :--- | :--- | :--- | | Xinjiang Huilun Equity Investment Partnership (Limited Partnership) | 14.36% | 40,327,380 | Pledged 19,803,200 shares, Frozen 933,402 shares | | Zhao Jiqing | 5.34% | 15,000,000 | Pledged 4,750,000 shares | | Shijin International Co., Ltd. | 3.23% | 9,079,723 | Pledged 5,000,000 shares | - The largest shareholder, Xinjiang Huilun Equity Investment Partnership (Limited Partnership), and the company's actual controller, Mr Zhao Jiqing, are parties acting in concert[12](index=12&type=chunk) [Other Significant Matters](index=4&type=section&id=Item%20III.%20Other%20Significant%20Matters) [Disclosure of Significant Matters](index=4&type=section&id=Item%20III.%20Other%20Significant%20Matters) No other significant matters required disclosure during the reporting period - The company had no other significant matters applicable or requiring disclosure in this reporting period[13](index=13&type=chunk) [Quarterly Financial Statements](index=5&type=section&id=Item%20IV.%20Quarterly%20Financial%20Statements) [Consolidated Balance Sheet Analysis](index=5&type=section&id=1.%20Consolidated%20Balance%20Sheet) At period-end, total assets were 1.745 billion CNY, slightly down from year-start, with total liabilities at 918 million CNY, and significant increases in inventory, accounts receivable, notes payable, and long-term payables reflecting operational and financing changes Consolidated Balance Sheet Highlights | Major Balance Sheet Item | Period-End Balance (CNY) | Change from Beginning of Period | | :--- | :--- | :--- | | **Total Assets** | **1,745,218,935.02** | **-2.08%** | | Inventory | 338,431,601.97 | +26.90% | | Accounts Receivable | 178,307,429.50 | +27.11% | | **Total Liabilities** | **917,703,600.78** | **+2.40%** | | Short-term Borrowings | 225,516,888.88 | -7.40% | | Notes Payable | 87,678,554.76 | +267.01% | | Long-term Borrowings | 171,373,871.99 | -28.60% | | Long-term Payables | 25,000,000.00 | +727.91% | | **Total Equity** | **827,515,334.24** | **-7.05%** | [Consolidated Income Statement Analysis](index=7&type=section&id=2.%20Consolidated%20Income%20Statement%20from%20Beginning%20of%20Year%20to%20End%20of%20Reporting%20Period) YTD operating revenue reached 443 million CNY, up 41.46% due to market recovery; despite rising costs and expenses, a 138.45% increase in other income, mainly government subsidies, led to a net profit attributable to shareholders of 1.704 million CNY, reversing last year's loss Consolidated Income Statement Highlights | Major Income Statement Item | Current Period Amount (CNY) | Prior Period Amount (CNY) | YoY Change | | :--- | :--- | :--- | :--- | | **Total Operating Revenue** | **442,961,653.10** | **313,146,458.07** | **+41.46%** | | **Total Operating Costs** | **472,011,709.01** | **361,270,966.96** | **+30.66%** | | Operating Costs | 360,950,304.20 | 257,016,541.78 | +40.44% | | R&D Expenses | 27,938,467.78 | 23,903,214.13 | +16.88% | | Financial Expenses | 22,224,975.97 | 16,708,489.80 | +33.02% | | Other Income | 29,353,231.84 | 12,309,874.52 | +138.45% | | **Operating Profit** | **-2,314,928.12** | **-31,089,535.27** | **Turnaround to Profit** | | **Net Profit Attributable to Shareholders** | **1,704,178.16** | **-26,306,899.50** | **Turnaround to Profit** | [Consolidated Cash Flow Statement Analysis](index=9&type=section&id=3.%20Consolidated%20Cash%20Flow%20Statement%20from%20Beginning%20of%20Year%20to%20End%20of%20Reporting%20Period) YTD net cash flow from operating activities significantly increased by 68% to 69.31 million CNY due to higher sales receipts, while investing activities resulted in a 9.93 million CNY net outflow and financing activities a 65.99 million CNY net outflow Consolidated Cash Flow Statement Highlights | Cash Flow Statement Item | Current Period Amount (CNY) | Prior Period Amount (CNY) | Change | | :--- | :--- | :--- | :--- | | **Net Cash Flow from Operating Activities** | **69,310,330.73** | **41,255,735.54** | **+68.00%** | | **Net Cash Flow from Investing Activities** | **-9,925,138.58** | **-21,949,448.07** | **Net Outflow Decreased** | | **Net Cash Flow from Financing Activities** | **-65,988,889.25** | **-70,177,841.86** | **Net Outflow Decreased** | | **Net Increase in Cash and Cash Equivalents** | **-5,311,466.65** | **-49,451,986.85** | **Net Decrease Narrowed** | | **Cash and Cash Equivalents at Period-End** | **71,488,712.37** | **71,537,692.09** | **Largely Unchanged** | [Audit Opinion](index=10&type=section&id=Item%20%28III%29.%20Audit%20Report) This quarterly report is unaudited - The company's 2024 third-quarter report is unaudited[22](index=22&type=chunk)

[Important Notes, Table of Contents, and Definitions](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%E3%80%81%E7%9B%AE%E5%BD%95%E5%92%8C%E9%87%8A%E4%B9%89) [Important Notes](index=2&type=section&id=%E9%87%8D%E8%A6%81%E6%8F%90%E7%A4%BA) The company attributes its significant 2022 performance decline to market downturns and underutilized new production capacity - The significant performance decline and losses are mainly attributed to two factors: - **Market Impact**: A downturn in the consumer electronics and communications markets led to a drop in both volume and price for the company's main products, with shipments of piezoelectric quartz crystal components decreasing by **25.66% YoY**[3](index=3&type=chunk) - **Internal Impact**: Despite ongoing capacity expansion, the average capacity utilization of new production lines (e.g., the Chongqing project) was only **47%** in 2022[3](index=3&type=chunk) - The company plans no cash dividend, bonus shares, or capitalization of public reserves[6](index=6&type=chunk) [Table of Contents](index=4&type=section&id=%E7%9B%AE%E5%BD%95) The report follows a standard structure, covering corporate information, financial analysis, governance, and other key disclosures [Definitions](index=6&type=section&id=%E9%87%8A%E4%B9%89) This section defines key terms used in the report, including company names, reporting period, and core technical products [Company Profile and Key Financial Indicators](index=7&type=section&id=%E7%AC%AC%E4%BA%8C%E8%8A%82%20%E5%85%AC%E5%8F%B8%E7%AE%80%E4%BB%8B%E5%92%8C%E4%B8%BB%E8%A6%81%E8%B4%A2%E5%8A%A1%E6%8C%87%E6%A0%87) [Company Information and Contact Details](index=7&type=section&id=%E5%85%AC%E5%8F%B8%E4%BF%A1%E6%81%AF%E4%B8%8E%E8%81%94%E7%B3%BB%E6%96%B9%E5%BC%8F) This section provides the company's basic corporate and contact information, including its stock code and key personnel [Key Accounting Data and Financial Indicators](index=8&type=section&id=%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's 2022 financial performance deteriorated sharply, with revenue declining and net profit turning to a significant loss | Indicator | 2022 | 2021 | YoY Change | | :--- | :--- | :--- | :--- | | **Operating Revenue (CNY)** | 333,283,222.78 | 629,860,484.03 | -47.09% | | **Net Profit Attributable to Shareholders (CNY)** | -172,669,062.11 | 104,074,374.85 | -265.91% | | **Net Profit Attributable to Shareholders (Non-recurring Items Excluded) (CNY)** | -183,157,836.31 | 100,212,658.85 | -282.77% | | **Net Cash Flow from Operating Activities (CNY)** | 19,910,653.03 | 132,474,977.07 | -84.97% | | **Basic Earnings Per Share (CNY/Share)** | -0.6153 | 0.3961 | -255.34% | | **Weighted Average Return on Equity** | -15.67% | 10.88% | -26.55% | | **Total Assets (CNY)** | 1,872,131,181.35 | 1,981,073,033.64 | -5.50% | | **Net Assets Attributable to Shareholders (CNY)** | 991,497,786.38 | 1,188,196,248.34 | -16.55% | | Quarter | Q1 | Q2 | Q3 | Q4 | | :--- | :--- | :--- | :--- | :--- | | **Operating Revenue (CNY)** | 113,296,733.78 | 117,768,579.73 | 91,042,310.62 | 11,175,598.65 | | **Net Profit Attributable to Shareholders (CNY)** | -1,020,181.71 | 3,167,465.20 | -1,164,472.34 | -173,651,873.26 | - Non-recurring gains and losses in 2022 totaled **CNY 10.49 million**, primarily from government subsidies (CNY 9.29 million) and other non-operating income/expenses (CNY 4.15 million)[24](index=24&type=chunk)[25](index=25&type=chunk) [Management Discussion and Analysis](index=11&type=section&id=%E7%AC%AC%E4%B8%89%E8%8A%82%20%E7%AE%A1%E7%90%86%E5%B1%82%E8%AE%A8%E8%AE%BA%E4%B8%8E%E5%88%86%E6%9E%90) [Industry Situation and Company Position](index=11&type=section&id=%E4%B8%80%E3%80%81%E6%8A%A5%E5%91%8A%E6%9C%9F%E5%86%85%E5%85%AC%E5%8F%B8%E6%89%80%E5%A4%84%E8%A1%8C%E4%B8%9A%E6%83%85%E5%86%B5) The quartz crystal component industry benefits from national policies, with the company holding a leading domestic position - The industry benefits from national strategic plans, such as the "14th Five-Year Plan," which accelerates the deployment of 5G, IoT, Industrial Internet, and IoV, promoting the core electronic components industry[28](index=28&type=chunk)[29](index=29&type=chunk)[30](index=30&type=chunk) - The global quartz crystal component market is projected to grow from **$4.34 billion** in 2021 to **$5.68 billion** by 2028, at a CAGR of approximately **4.14%**, with automotive electronics, wearables, and IoT as the fastest-growing segments[34](index=34&type=chunk)[35](index=35&type=chunk) - The company is a national "Little Giant" enterprise, leading domestically in the mass production of small-sized MHz products and high-value-added TSX and TCXO products, with combined shipments reaching **167 million units** in 2022, up **0.68% YoY**[37](index=37&type=chunk)[38](index=38&type=chunk) - The company has mastered photolithography processes based on semiconductor technology, making it one of the few global manufacturers capable of mass-producing high-frequency 76.8MHz 1612-size thermal crystals certified by Qualcomm[39](index=39&type=chunk) [Principal Business and Operating Model](index=14&type=section&id=%E4%BA%8C%E3%80%81%E6%8A%A5%E5%91%8A%E6%9C%9F%E5%86%85%E5%85%AC%E5%8F%B8%E4%BB%8E%E4%BA%8B%E7%9A%84%E4%B8%BB%E8%A6%81%E4%B8%9A%E5%8A%A1) The company develops and sells quartz crystal components, with 2022 performance impacted by market downturns and low capacity utilization - The company's main products are SMD resonators, TCXO oscillators, and TSX thermal crystals, widely used in communications, automotive electronics, and consumer electronics[41](index=41&type=chunk)[42](index=42&type=chunk)[43](index=43&type=chunk) - The operating model involves centralized procurement, production-to-order manufacturing, and a sales model combining distribution and direct sales[44](index=44&type=chunk)[45](index=45&type=chunk)[46](index=46&type=chunk) - The 2022 performance decline was mainly due to: - Weak market demand leading to lower product prices and volumes, with total shipments of approximately **699 million units**, a **25.66% YoY** decrease[47](index=47&type=chunk) - The average capacity utilization of the Chongqing subsidiary's investment project was only about **47%**[47](index=47&type=chunk) [Core Competitiveness Analysis](index=16&type=section&id=%E4%B8%89%E3%80%81%E6%A0%B8%E5%BF%83%E7%AB%9E%E4%BA%89%E5%8A%9B%E5%88%86%E6%9E%90) The company's core strengths lie in its advanced technology, product development, mass production capabilities, and first-mover market advantage - **Technology and Process Advantage**: Mastery of photolithography for MHz applications enables both miniaturization and high base frequency, overcoming the limitations of traditional mechanical grinding[49](index=49&type=chunk) - **Product Development Advantage**: Early domestic mass producer of miniaturized products like SMD2520, SMD2016, and SMD1612, with SMD1210 now available, alongside high-value products like TSX thermal crystals and TCXO oscillators[50](index=50&type=chunk) - **Mass Production and Supply Chain Advantage**: Mass production capability for mid-to-high-end products positions the company favorably for domestic substitution, driving local collaboration and breakthroughs in upstream materials like ultra-small bases and temperature-compensated ICs[51](index=51&type=chunk) - **First-Mover Market Advantage**: Strong partnerships with leading customers across various sectors enable timely and precise responses to product iteration demands, securing market opportunities[52](index=52&type=chunk) [Analysis of Main Business Operations](index=17&type=section&id=%E5%9B%9B%E3%80%81%E4%B8%BB%E8%90%A5%E4%B8%9A%E5%8A%A1%E5%88%86%E6%9E%90) In 2022, revenue and net profit declined significantly, though the company advanced in smart manufacturing and R&D investment [Overview](index=17&type=section&id=4.1%20%E6%A6%82%E8%BF%B0) Despite poor 2022 results, the company advanced in smart manufacturing, increased R&D spending, and expanded into new markets - In 2022, the company was recognized as a "Dongguan Smart Manufacturing Demonstration Project," and its Chongqing subsidiary was named a "Chongqing Smart Factory"[55](index=55&type=chunk) - Despite the performance decline, R&D expenses increased by **7.69% YoY** to **CNY 31.32 million**, raising the R&D-to-revenue ratio to **9.40%**[56](index=56&type=chunk) - The company is expanding into emerging industries, having introduced products to automakers like BYD and GAC Motor, with mass shipments to BYD already underway[57](index=57&type=chunk)[58](index=58&type=chunk) [Revenue and Costs](index=19&type=section&id=4.2%20%E6%94%B6%E5%85%A5%E4%B8%8E%E6%88%90%E6%9C%AC) Revenue fell 47.09% to CNY 333 million, with the core electronic components business seeing its gross margin turn negative | Category | 2022 Revenue (CNY) | % of Total Revenue | YoY Change | | :--- | :--- | :--- | :--- | | **By Industry** | | | | | Electronic Components | 298,298,435.46 | 89.50% | -50.50% | | Software and IT Services | 34,984,787.32 | 10.50% | 28.28% | | **By Product** | | | | | SMD | 294,087,690.26 | 88.24% | -50.60% | | **By Region** | | | | | Mainland China | 232,599,780.51 | 69.79% | -19.37% | | Hong Kong, China | 33,404,729.93 | 10.02% | -66.69% | | By Industry | Operating Revenue (CNY) | Operating Cost (CNY) | Gross Margin | Gross Margin YoY Change | | :--- | :--- | :--- | :--- | :--- | | Electronic Components | 298,298,435.46 | 332,916,337.47 | -11.61% | -58.83% | - Due to the industry cycle and weak consumer electronics demand, the production-to-sales ratio declined in 2022, leading to a **67.41% YoY** increase in year-end inventory[63](index=63&type=chunk) [Expenses](index=22&type=section&id=4.3%20%E8%B4%B9%E7%94%A8) Management expenses decreased due to the reversal of share-based payment fees, while financial expenses fell on higher exchange gains | Expense Item | 2022 (CNY) | 2021 (CNY) | YoY Change | Reason for Significant Change | | :--- | :--- | :--- | :--- | :--- | | Selling Expenses | 20,026,523.74 | 18,658,142.85 | 7.33% | Increased marketing and promotion fees | | Administrative Expenses | 49,603,927.53 | 69,898,722.23 | -29.03% | Reversal of share-based payment fees as performance targets were not met | | Financial Expenses | 16,592,175.43 | 18,899,390.15 | -12.21% | Increased foreign exchange gains | | R&D Expenses | 31,317,615.65 | 29,080,447.00 | 7.69% | Increased R&D projects and investment | [R&D Investment](index=22&type=section&id=4.4%20%E7%A0%94%E5%8F%91%E6%8A%95%E5%85%A5) R&D investment increased to 12.13% of revenue, focusing on high-frequency, miniaturized products for emerging markets | Indicator | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | | **R&D Investment (CNY)** | 40,413,205.17 | 35,465,110.10 | 30,415,775.66 | | **R&D Investment as % of Revenue** | 12.13% | 5.63% | 7.84% | | **Number of R&D Personnel** | 162 | 165 | - | | **R&D Personnel as % of Total** | 18.31% | 16.02% | - | - Key R&D projects include SMD1612 76.8MHz thermal crystals for Qualcomm platform phones, TCXOs for GPS modules, SMD1210 76.8MHz crystals for 5G, and high-spec SMD3225 crystals for automotive use, aiming to fill domestic gaps and enter high-end markets[70](index=70&type=chunk) [Cash Flow](index=25&type=section&id=4.5%20%E7%8E%B0%E9%87%91%E6%B5%81) Operating cash flow plummeted due to lower sales collections, while investment and financing cash flows also saw significant changes | Item | 2022 (CNY) | 2021 (CNY) | YoY Change | | :--- | :--- | :--- | :--- | | **Net Cash Flow from Operating Activities** | 19,910,653.03 | 132,474,977.07 | -84.97% | | **Net Cash Flow from Investing Activities** | -83,522,413.45 | -770,578,806.82 | 89.16% | | **Net Cash Flow from Financing Activities** | -1,004,558.85 | 708,536,851.96 | -100.14% | | **Net Increase in Cash and Cash Equivalents** | -62,933,012.56 | 69,696,520.43 | -190.30% | - The significant discrepancy between net operating cash flow (CNY 19.91 million) and net profit (-CNY 173 million) is mainly due to large non-cash expenses, including depreciation and amortization (CNY 111 million) and impairment provisions (CNY 58.61 million)[74](index=74&type=chunk) [Non-Main Business Operations](index=25&type=section&id=%E4%BA%94%E3%80%81%E9%9D%9E%E4%B8%BB%E8%90%A5%E4%B8%9A%E5%8A%A1%E6%83%85%E5%86%B5) Non-main business activities significantly impacted profits, driven by asset impairment losses of CNY 58.61 million | Item | Amount (CNY) | % of Total Profit | Explanation | | :--- | :--- | :--- | :--- | | Investment Income | -1,061,508.61 | 0.55% | Operating losses of joint ventures | | Asset Impairment | -58,613,523.22 | 30.34% | Impairment of goodwill, equipment, inventory, and accounts receivable | | Non-operating Income | 4,393,703.54 | -2.27% | Compensation income, etc | [Analysis of Assets and Liabilities](index=26&type=section&id=%E5%85%AD%E3%80%81%E8%B5%84%E4%BA%A7%E5%8F%8A%E8%B4%9F%E5%80%BA%E7%8A%B6%E5%86%B5%E5%88%86%E6%9E%90) Total assets decreased by 5.50%, with a significant shift from construction in progress to fixed assets after project completion - The asset structure changed significantly, with a large decrease in construction in progress and a large increase in fixed assets, mainly due to the capitalization of installed and adjusted machinery and equipment[78](index=78&type=chunk) | Item | Year-end 2022 Amount (CNY) | % of Total Assets | Year-start 2022 Amount (CNY) | % of Total Assets | Change in Proportion | | :--- | :--- | :--- | :--- | :--- | :--- | | Fixed Assets | 994,444,606.48 | 53.12% | 844,304,214.65 | 42.62% | 10.50% | | Construction in Progress | 39,642,859.06 | 2.12% | 243,395,390.41 | 12.29% | -10.17% | | Short-term Borrowings | 365,876,110.90 | 19.54% | 232,087,510.23 | 11.72% | 7.82% | - As of the reporting period end, **CNY 553 million** of the company's assets were restricted, primarily fixed assets (CNY 457 million) and intangible assets (CNY 22 million) used as collateral for financing leases and loans[81](index=81&type=chunk) [Analysis of Investment](index=27&type=section&id=%E4%B8%83%E3%80%81%E6%8A%95%E8%B5%84%E7%8A%B6%E5%86%B5%E5%88%86%E6%9E%90) Total investment for the period was CNY 216 million, a sharp 72.64% decrease, with no major equity investments made - The investment amount for the reporting period was **CNY 216 million**, a significant decrease of **72.64%** from CNY 790 million in the previous year[82](index=82&type=chunk) - The company engaged in forward foreign exchange purchase transactions for hedging purposes to lock in the cost of raw materials settled in JPY, resulting in an actual loss of **CNY 227,200** during the period[85](index=85&type=chunk) [Analysis of Major Subsidiaries and Affiliates](index=29&type=section&id=%E4%B9%9D%E3%80%81%E4%B8%BB%E8%A6%81%E6%8E%A7%E8%82%A1%E5%8F%82%E8%82%A1%E5%85%AC%E5%8F%B8%E5%88%86%E6%9E%90) The Chongqing production subsidiary reported a net loss of CNY 45.79 million, while the Hong Kong sales subsidiary was profitable | Company Name | Main Business | Total Assets (CNY) | Net Assets (CNY) | Operating Revenue (CNY) | Net Profit (CNY) | | :--- | :--- | :--- | :--- | :--- | :--- | | H.K. TFC INDUSTRIAL CO., LIMITED | Sales | 42,306,248.78 | 26,411,557.70 | 36,740,259.67 | 15,075,689.71 | | Guangzhou Chuangxiangyun Technology Co., Ltd. | Production, Sales, Service | 82,925,251.33 | 67,719,947.73 | 34,984,787.32 | 1,761,730.65 | | TFC Communication (Chongqing) Co., Ltd. | Production, Sales | 1,047,478,828.93 | 361,875,691.22 | 106,199,085.60 | -45,789,090.51 | [Future Outlook](index=30&type=section&id=%E5%8D%81%E4%B8%80%E3%80%81%E5%85%AC%E5%8F%B8%E6%9C%AA%E6%9D%A5%E5%8F%91%E5%B1%95%E7%9A%84%E5%B1%95%E6%9C%9B) The company plans to deepen management reform and business innovation in 2023 while acknowledging several key operational risks - **2023 Business Plan**: - **Management Reform**: Optimize organizational structure and adopt scientific assessment systems like KPI and OKR[94](index=94&type=chunk)[96](index=96&type=chunk) - **Business Innovation**: Spin off business units for independent accounting to foster multi-product line development[94](index=94&type=chunk)[96](index=96&type=chunk) - **Internal Optimization**: Launch a "decluttering" initiative to streamline internal systems and products[94](index=94&type=chunk)[96](index=96&type=chunk) - **Platform Building**: Develop a Shenzhen sales platform to leverage product platform effects[94](index=94&type=chunk)[96](index=96&type=chunk) - **Employee Incentives**: Introduce employee stock ownership platforms in select wholly-owned subsidiaries[94](index=94&type=chunk)[96](index=96&type=chunk) - **Key Risk Disclosures**: - **Macroeconomic Risk**: A global economic downturn could impact consumer electronics and other industries, affecting the company's performance[97](index=97&type=chunk)[99](index=99&type=chunk)[100](index=100&type=chunk)[101](index=101&type=chunk)[102](index=102&type=chunk) - **Price Fluctuation Risk**: Increased market competition could lead to further product price declines, impacting gross margins[97](index=97&type=chunk)[99](index=99&type=chunk)[100](index=100&type=chunk)[101](index=101&type=chunk)[102](index=102&type=chunk) - **Market Competition Risk**: Lagging behind market demand in technological R&D could put the company at a disadvantage[97](index=97&type=chunk)[99](index=99&type=chunk)[100](index=100&type=chunk)[101](index=101&type=chunk)[102](index=102&type=chunk) - **Investment Project Risk**: New depreciation and amortization could reduce profits, and project benefits may not meet expectations[97](index=97&type=chunk)[99](index=99&type=chunk)[100](index=100&type=chunk)[101](index=101&type=chunk)[102](index=102&type=chunk) - **Inventory and Accounts Receivable Risk**: Large year-end balances of inventory and accounts receivable pose risks of slow turnover and collection[97](index=97&type=chunk)[99](index=99&type=chunk)[100](index=100&type=chunk)[101](index=101&type=chunk)[102](index=102&type=chunk) [Corporate Governance](index=34&type=section&id=%E7%AC%AC%E5%9B%9B%E8%8A%82%20%E5%85%AC%E5%8F%B8%E6%B2%BB%E7%90%86) [Overview of Corporate Governance](index=34&type=section&id=%E4%B8%80%E3%80%81%E5%85%AC%E5%8F%B8%E6%B2%BB%E7%90%86%E7%9A%84%E5%9F%BA%E6%9C%AC%E7%8A%B6%E5%86%B5) The company's governance practices comply with relevant laws and regulations, ensuring operational independence from its controlling shareholder - The company's actual governance practices do not materially differ from the laws, regulations, and normative documents issued by the CSRC and Shenzhen Stock Exchange[106](index=106&type=chunk) - The company is independent from its controlling shareholder in terms of business, personnel, assets, organization, and finance, possessing a complete and independent business and operational capability[106](index=106&type=chunk)[111](index=111&type=chunk) [Directors, Supervisors, and Senior Management](index=36&type=section&id=%E4%B8%83%E3%80%81%E8%91%A3%E4%BA%8B%E3%80%81%E7%9B%91%E4%BA%8B%E5%92%8C%E9%AB%98%E7%BA%A7%E7%AE%A1%E7%90%86%E4%BA%BA%E5%91%98%E6%83%85%E5%86%B5) This section details the background, remuneration, and changes of key management personnel during the reporting period - During the reporting period, there were changes in the company's directors, supervisors, and senior management, including the election of Director Deng Youqiang and Supervisor Qin Yuzhen, and the departure of Supervisor Cai Fengqiong and Senior Manager Li Zongjie[117](index=117&type=chunk) | Name | Position | Pre-tax Remuneration from the Company (CNY 10,000) | | :--- | :--- | :--- | | Zhao Jiqing | Chairman | 27.35 | | Han Jiling | General Manager | 54.55 | | Jiang Jianwei | Deputy General Manager | 64.72 | | Deng Youqiang | Director, CFO | 25.18 | | Pan Yihua | Director, Board Secretary | 21.97 | | **Total** | -- | **398.4** | [Employee Situation](index=47&type=section&id=%E5%8D%81%E4%B8%80%E3%80%81%E5%85%AC%E5%8F%B8%E5%91%98%E5%B7%A5%E6%83%85%E5%86%B5) At year-end, the company had 885 employees, with production and technical staff forming the largest professional groups | Professional Composition | Number of People | | :--- | :--- | | Production Personnel | 342 | | Sales Personnel | 49 | | Technical Personnel | 277 | | Finance Personnel | 19 | | Administrative Personnel | 198 | | **Total** | **885** | [Equity Incentive Plan](index=49&type=section&id=%E5%8D%81%E4%B8%89%E3%80%81%E5%85%AC%E5%8F%B8%E8%82%A1%E6%9D%83%E6%BF%80%E5%8A%B1%E8%AE%A1%E5%88%92) The second vesting period of the 2020 restricted stock plan was executed, while the third was forfeited due to unmet performance targets - In October 2022, the conditions for the second vesting period of the 2020 restricted stock incentive plan were met, allowing 29 eligible participants to vest 2.1 million shares, with 28 individuals ultimately vesting a total of 1.8 million shares[163](index=163&type=chunk) - As the company's 2022 performance did not meet the requirements for the third vesting period of the 2020 restricted stock incentive plan, previously accrued share-based payment expenses for this period were reversed[685](index=685&type=chunk) [Internal Control](index=52&type=section&id=%E5%8D%81%E5%9B%9B%E3%80%81%E6%8A%A5%E5%91%8A%E6%9C%9F%E5%86%85%E7%9A%84%E5%86%85%E9%83%A8%E6%8E%A7%E5%88%B6%E5%88%B6%E5%BA%A6%E5%BB%BA%E8%AE%BE%E5%8F%8A%E5%AE%9E%E6%96%BD%E6%83%85%E5%86%B5) The company maintained effective internal controls over key operational areas, with no material weaknesses identified in its self-assessment - The company has established internal control systems covering all major operational and management aspects, including management of subsidiaries, investments, related-party transactions, and information disclosure[166](index=166&type=chunk)[168](index=168&type=chunk)[170](index=170&type=chunk)[171](index=171&type=chunk)[174](index=174&type=chunk) - According to the internal control self-assessment report, which covered 100% of assets and revenue in the consolidated statements, no material or significant deficiencies were found in financial or non-financial reporting[188](index=188&type=chunk)[189](index=189&type=chunk) [Environmental and Social Responsibility](index=58&type=section&id=%E7%AC%AC%E4%BA%94%E8%8A%82%20%E7%8E%AF%E5%A2%83%E5%92%8C%E7%A4%BE%E4%BC%9A%E8%B4%A3%E4%BB%BB) [Environmental and Social Responsibility](index=58&type=section&id=%E7%8E%AF%E5%A2%83%E4%B8%8E%E7%A4%BE%E4%BC%9A%E8%B4%A3%E4%BB%BB) The company complies with environmental regulations, protects stakeholder interests, and actively engages in social welfare and poverty alleviation - The company and its subsidiaries are not classified as major polluting entities and received no environment-related administrative penalties during the reporting period[192](index=192&type=chunk) - The company actively fulfills its social responsibilities, including protecting the rights of shareholders, employees, customers, and suppliers, and participating in public relations and social welfare initiatives[193](index=193&type=chunk)[194](index=194&type=chunk) - The company actively participates in poverty alleviation and rural revitalization, donating goods and funds worth over **CNY 130,680** to charities and schools in 2022, and employing 226 people from impoverished areas in Yunnan, Guizhou, and Sichuan[195](index=195&type=chunk) [Significant Matters](index=60&type=section&id=%E7%AC%AC%E5%85%AD%E8%8A%82%20%E9%87%8D%E8%A6%81%E4%BA%8B%E9%A1%B9) [Significant Related-Party Transactions](index=63&type=section&id=%E5%8D%81%E5%9B%9B%E3%80%81%E9%87%8D%E5%A4%A7%E5%85%B3%E8%81%94%E4%BA%A4%E6%98%93) The company engaged in a CNY 50 million financing lease transaction with a related party, exceeding the approved limit | Related Party | Transaction Type | Transaction Amount (CNY 10,000) | Approved Limit (CNY 10,000) | Exceeded Limit | | :--- | :--- | :--- | :--- | :--- | | Anhui Zhengqi Financial Leasing Co., Ltd. | Financing Lease Service | 5,000 | 10,000 | Yes | [Significant Guarantees](index=64&type=section&id=2%E3%80%81%E9%87%8D%E5%A4%A7%E6%8B%85%E4%BF%9D) The company provided guarantees totaling CNY 183 million for its subsidiaries, representing 18.43% of its net assets | Indicator | Amount (CNY 10,000) | | :--- | :--- | | Approved guarantee limit for subsidiaries during the period | 80,000 | | Actual guarantees provided to subsidiaries during the period | 18,275.32 | | Outstanding guarantee balance for subsidiaries at period-end | 18,275.32 | | Ratio of total actual guarantees to company's net assets | 18.43% | [Changes in Share Capital and Shareholders](index=67&type=section&id=%E7%AC%AC%E4%B8%83%E8%8A%82%20%E8%82%A1%E4%BB%BD%E5%8F%98%E5%8A%A8%E5%8F%8A%E8%82%A1%E4%B8%9C%E6%83%85%E5%86%B5) [Changes in Share Capital](index=67&type=section&id=%E4%B8%80%E3%80%81%E8%82%A1%E4%BB%BD%E5%8F%98%E5%8A%A8%E6%83%85%E5%86%B5) Total share capital increased by 1.62 million shares due to the vesting of restricted stocks under the 2020 incentive plan - Due to the listing and circulation of the first batch of vested shares from the second vesting period of the 2020 restricted stock incentive plan, the company's total share capital increased by **1,620,000 shares** to **280,624,251 shares**[231](index=231&type=chunk) [Shareholders and Ultimate Controller](index=70&type=section&id=%E4%B8%89%E3%80%81%E8%82%A1%E4%B8%9C%E5%92%8C%E5%AE%9E%E9%99%85%E6%8E%A7%E5%88%B6%E4%BA%BA%E6%83%85%E5%86%B5) The ultimate controller is Mr. Zhao Jiqing, and the controlling shareholder has a significant portion of its shares pledged | Shareholder Name | Shareholder Type | Shareholding Ratio | Shares Held at Period-end | Pledged/Frozen Status | | :--- | :--- | :--- | :--- | :--- | | Xinjiang Huilun Equity Investment Partnership (Limited Partnership) | Domestic Non-state-owned Legal Entity | 14.37% | 40,327,380 | Pledged 31,803,200 | | Zhao Jiqing | Domestic Natural Person | 5.35% | 15,000,000 | - | | Anhui Zhidao Investment Co., Ltd. | Domestic Non-state-owned Legal Entity | 4.97% | 13,950,000 | - | - The controlling shareholder, Xinjiang Huilun, and the ultimate controller, Zhao Jiqing, are parties acting in concert[240](index=240&type=chunk) [Information on Preferred Shares](index=75&type=section&id=%E7%AC%AC%E5%85%AB%E8%8A%82%20%E4%BC%98%E5%85%88%E8%82%A1%E7%9B%B8%E5%85%B3%E6%83%85%E5%86%B5) [Preferred Shares](index=75&type=section&id=%E4%BC%98%E5%85%88%E8%82%A1) The company had no preferred shares during the reporting period - The company had no preferred shares during the reporting period[248](index=248&type=chunk) [Information on Bonds](index=76&type=section&id=%E7%AC%AC%E4%B9%9D%E8%8A%82%20%E5%80%BA%E5%88%B8%E7%9B%B8%E5%85%B3%E6%83%85%E5%86%B5) [Bonds](index=76&type=section&id=%E5%80%BA%E5%88%B8) The company had no bonds outstanding during the reporting period - The company had no bond-related matters during the reporting period[250](index=250&type=chunk) [Financial Report](index=77&type=section&id=%E7%AC%AC%E5%8D%81%E8%8A%82%20%E8%B4%A2%E5%8A%A1%E6%8A%A5%E5%91%8A) [Audit Report](index=77&type=section&id=%E4%B8%80%E3%80%81%E5%AE%A1%E8%AE%A1%E6%8A%A5%E5%91%8A) The auditor issued a standard unqualified opinion, highlighting revenue recognition and inventory provision as key audit matters - The audit opinion is a **standard unqualified opinion**[252](index=252&type=chunk) - Key audit matters include: 1. **Revenue Recognition**: As revenue is a key performance indicator, there is an inherent risk of management manipulating the timing of revenue recognition to meet specific targets[255](index=255&type=chunk)[256](index=256&type=chunk) 2. **Adequacy and Completeness of Inventory Write-down Provision**: Due to the material amount of inventory, the provision for write-downs involves significant management judgment[259](index=259&type=chunk) [Financial Statements](index=81&type=section&id=%E4%BA%8C%E3%80%81%E8%B4%A2%E5%8A%A1%E6%8A%A5%E8%A1%A8) This section presents the complete financial statements, showing total assets of CNY 1.87 billion and a net loss of CNY 173 million | Key Items from Consolidated Balance Sheet | Dec 31, 2022 (CNY) | | :--- | :--- | | Total Assets | 1,872,131,181.35 | | Total Liabilities | 880,633,394.97 | | Total Equity Attributable to Parent Company | 991,497,786.38 | | Key Items from Consolidated Income Statement | 2022 (CNY) | | :--- | :--- | | Total Operating Revenue | 333,283,222.78 | | Total Operating Costs | 478,540,339.84 | | Total Profit | -193,199,813.93 | | Net Profit | -172,669,062.11 | | Key Items from Consolidated Cash Flow Statement | 2022 (CNY) | | :--- | :--- | | Net Cash Flow from Operating Activities | 19,910,653.03 | | Net Cash Flow from Investing Activities | -83,522,413.45 | | Net Cash Flow from Financing Activities | -1,004,558.85 | [Company Basic Information](index=103&type=section&id=%E4%B8%89%E3%80%81%E5%85%AC%E5%8F%B8%E5%9F%BA%E6%9C%AC%E6%83%85%E5%86%B5) The company is a high-tech enterprise specializing in quartz crystal components, with six wholly-owned subsidiaries - The company's main business is quartz crystal components, with key products including SMD resonators, TSX thermal crystals, and TCXO oscillators[310](index=310&type=chunk) - A total of 6 wholly-owned subsidiaries were included in the scope of the consolidated financial statements for the period[312](index=312&type=chunk) [Significant Accounting Policies and Estimates](index=104&type=section&id=%E4%BA%94%E3%80%81%E9%87%8D%E8%A6%81%E4%BC%9A%E8%AE%A1%E6%94%BF%E7%AD%96%E5%8F%8A%E4%BC%9A%E8%AE%A1%E4%BC%B0%E8%AE%A1) This section details the accounting policies for key areas like revenue recognition and financial instruments, including recent changes - **Revenue Recognition**: Revenue is recognized when the customer obtains control of the related goods or services, typically upon customer sign-off for domestic sales and upon completion of customs clearance for overseas sales[466](index=466&type=chunk)[470](index=470&type=chunk) - **Financial Instrument Impairment**: Impairment of financial assets measured at amortized cost is based on expected credit losses, with a simplified approach for accounts receivable, measuring the loss provision at an amount equal to lifetime expected credit losses[371](index=371&type=chunk)[372](index=372&type=chunk) - **R&D Expenditures**: Research-phase expenditures are expensed as incurred, while development-phase expenditures are capitalized if specific criteria are met[440](index=440&type=chunk)[441](index=441&type=chunk)[442](index=442&type=chunk) - **Changes in Accounting Policies**: The company has amended its accounting policies regarding the "sale of products before fixed assets reach their intended use" and the "judgment of onerous contracts" in accordance with Interpretations No. 15 and No. 16 of the Accounting Standards for Business Enterprises[481](index=481&type=chunk) [Notes to Consolidated Financial Statement Items](index=143&type=section&id=%E4%B8%83%E3%80%81%E5%90%88%E5%B9%B6%E8%B4%A2%E5%8A%A1%E6%8A%A5%E8%A1%A8%E9%A1%B9%E7%9B%AE%E6%B3%A8%E9%87%8A) Key balance sheet items include significant provisions for bad debt, inventory write-downs, and goodwill impairment | Item | Year-end Gross Book Value (CNY) | Impairment/Write-down Provision (CNY) | Net Book Value (CNY) | | :--- | :--- | :--- | :--- | | Accounts Receivable | 129,334,963.25 | 22,019,512.49 | 107,315,450.76 | | Inventory | 366,356,557.81 | 38,615,828.23 | 327,740,729.58 | | Fixed Assets | 1,797,325,889.31 | 55,298,997.25 | 994,444,606.48 | | Goodwill | 204,093,223.96 | 199,959,254.34 | 4,133,969.62 | - Restricted cash and cash equivalents at year-end amounted to **CNY 73.52 million**, primarily serving as deposits for letters of credit, cash pools, and forward foreign exchange contracts[489](index=489&type=chunk) - The goodwill impairment test indicated that the recoverable amount of the asset group related to Guangzhou Chuangxiangyun Technology Co., Ltd. was lower than its carrying amount, resulting in a goodwill impairment provision of **CNY 3.21 million** for the period[594](index=594&type=chunk)[599](index=599&type=chunk)