Financial Performance - The company's operating revenue for the current period is ¥175,743,649.57, representing a 1.23% increase compared to ¥173,614,130.99 in the same period last year[20]. - The net profit attributable to shareholders for the current period is -¥13,807,863.85, a decrease of 119.37% from -¥6,294,223.86 in the previous year[20]. - The net profit attributable to shareholders after deducting non-recurring gains and losses is -¥18,941,750.49, reflecting a decline of 185.84% compared to -¥6,626,778.21 last year[20]. - The net cash flow from operating activities improved by 18.28%, amounting to -¥83,279,324.76, compared to -¥101,905,706.48 in the previous year[20]. - Total assets at the end of the current period are ¥720,242,027.77, down 3.36% from ¥745,271,093.71 at the end of the previous year[20]. - The net assets attributable to shareholders decreased by 5.12%, totaling ¥545,617,700.13 compared to ¥575,078,795.99 at the end of the previous year[20]. - The company reported a total of ¥5,133,886.64 in non-recurring gains and losses for the current period, primarily from government subsidies and fair value changes of financial assets[25]. - The company reported a total investment of 40.5 million yuan in various financial instruments, with a total expected return of 84.82 million yuan[70]. - The company reported a total of 734.87 million CNY in related party transactions during the reporting period, with 37.28% of these transactions being with related parties[110]. Market and Operational Strategy - The company emphasizes the importance of adapting to rapid market changes and technological innovations to maintain competitive advantages in the software and information technology services industry[4]. - The company plans to increase investments in product research and development, customer service, and talent support to enhance market competitiveness[4]. - The company is committed to tracking market demands closely to ensure its products and services meet customer needs effectively[4]. - The company is focusing on data security solutions, anticipating growth due to the implementation of the Data Security Law[34]. - The company aims to transition from "small confidentiality" to "big security" by leveraging big data technologies for comprehensive network security solutions[36]. - The company is engaged in the research, production, and sales of cybersecurity products, adhering to the principle of "independent and controllable" to form a full range of cybersecurity products[28]. - The rapid advancement of the "信创" (Xinchuang) market is expected to further enhance the company's performance, driven by government policies promoting domestic core software and hardware development[32]. - The company is positioned to benefit from the increasing investment in cybersecurity due to the rising frequency of cyber threats and the government's focus on national security[30]. Seasonal Sales and Revenue Model - The company reported a significant seasonal sales pattern, with lower sales in the first half of the year due to budget management and procurement cycles of major clients, leading to potential seasonal losses[4]. - The company operates under a seasonal revenue model, with a significant portion of its income typically realized in the second half of the year[4]. - The company noted a seasonal sales pattern, with lower sales in the first half of the year due to client budgeting and procurement cycles[78]. Shareholder and Equity Management - The company plans not to distribute cash dividends or issue bonus shares for the reporting period[6]. - The company has committed to repurchase shares if the stock price falls below the latest audited net asset value per share for 20 consecutive trading days after the IPO[87]. - The total amount allocated for share repurchase will not exceed the net proceeds from the initial public offering[87]. - The controlling shareholder is required to increase their shareholding by at least RMB 5 million if the stock price remains below the latest audited net asset value per share after the repurchase plan expires[87]. - The company has committed to controlling costs and expenses effectively while strengthening internal control management[89]. - The company will distribute profits based on operational performance and actively adopt cash dividend distribution methods[89]. - The company has pledged not to transfer benefits to other entities or individuals under unfair conditions[90]. - The company has committed to not transferring or entrusting the management of its shares during the validity period of the confidential integration Class A qualification certificate[91]. Legal and Compliance Issues - The company reported a sales contract dispute involving a subsidiary with a claim amount of CNY 2.77 million, which has been withdrawn[95]. - Another subsidiary is pursuing a claim of CNY 9 million against a partner, with enforcement actions initiated on June 5, 2020[95]. - A labor arbitration case resulted in a ruling requiring the company to pay CNY 5.53 million, which remains unexecuted[95]. - The company is involved in a rental contract dispute seeking a total of CNY 13.81 million in refunds and damages[96]. - A breach of contract case against an individual resulted in a judgment for the company to receive CNY 3 million, with both parties having withdrawn their appeals[96]. - The company has not undergone any bankruptcy reorganization during the reporting period[94]. - The company has not faced any major litigation or arbitration matters during the reporting period[95]. Research and Development - Research and development investment increased by 38.07% to ¥55,222,873.80, up from ¥39,994,920.60 in the previous period, reflecting a commitment to enhancing product competitiveness[47]. - The company has established research centers in Beijing, Jinan, Nanjing, and Hangzhou to focus on technology and product development[78]. - The company is committed to continuous R&D investment to maintain competitive advantages in the rapidly evolving cybersecurity industry[78]. Financial Position and Assets - The total assets at the end of the reporting period amounted to ¥720,000,000, with cash and cash equivalents decreasing by 13.76% to ¥265,062,427.43[56]. - The company's total liabilities were CNY 174,637,633.26, slightly up from CNY 170,205,603.34 at the end of 2019[168]. - The total equity attributable to shareholders decreased to CNY 545,617,700.13 from CNY 575,078,795.99 at the end of 2019[168]. - Cash and cash equivalents decreased to CNY 265,062,427.43 from CNY 376,843,567.97 at the end of 2019, representing a decline of approximately 29.5%[166]. - The company has appointed new executives, including two vice presidents and a chief engineer, to support its operational needs[159]. Stock Incentive Plans - The company has implemented a stock option and restricted stock incentive plan approved by the board on March 11, 2020[99]. - The company approved the 2020 stock option and restricted stock incentive plan, authorizing the board to grant restricted stocks and options to eligible participants[100]. - The actual number of restricted stocks granted was 2,484,800 shares, with 191 participants in the incentive plan[103]. - The company distributed a cash dividend of 2.00 yuan per 10 shares and converted 6 shares for every 10 shares from capital reserves based on a total share capital of 132,766,280 shares[102]. - The company reported a total of 132,833,000 shares before the recent changes, with 50.68% being restricted shares[136]. Shareholder Structure - The total number of ordinary shareholders at the end of the reporting period was 11,069[145]. - Wei Dongxiao holds 29.30% of shares, totaling 62,913,101 shares, with 23,592,413 shares under lock-up[145]. - Chen Zhijiang holds 15.92% of shares, totaling 34,191,346 shares, with 9,412,415 shares under lock-up[145]. - The company’s stock performance and shareholder structure indicate a stable investment environment, with no significant fluctuations reported[148]. - The management team remains committed to maintaining transparency and shareholder engagement throughout the reporting period[157].

Financial Performance - Total revenue for Q1 2020 was ¥30,114,484.06, a decrease of 54.87% compared to ¥66,721,830.50 in the same period last year[8] - Net profit attributable to shareholders was -¥28,518,427.10, representing a decline of 125.72% from -¥12,634,655.44 year-on-year[8] - Basic and diluted earnings per share were both -¥0.22, a decrease of 120.00% compared to -¥0.10 in the previous year[8] - The company reported a net profit for Q1 2020 was a loss of CNY 28,518,427.10, compared to a loss of CNY 12,634,655.44 in Q1 2019, representing a significant increase in losses[39] - The company's total equity decreased to CNY 501,325,493.25 from CNY 511,399,787.61, reflecting a decline of 2.3%[37] - The total comprehensive income for the current period is -14,091,570.03, compared to 1,902,802.46 in the previous period[42] Cash Flow and Assets - The net cash flow from operating activities was -¥97,040,085.68, a slight increase in loss of 2.76% from -¥94,435,541.51 in the same period last year[8] - The company's cash and cash equivalents decreased to 273.59 million yuan from 376.84 million yuan, representing a decline of about 27.4%[30] - The net cash flow from investment activities was -5,258,273.41 CNY, an improvement of 88.62% compared to the previous period[18] - Cash and cash equivalents at the end of the period stand at 272,309,635.88, an increase from 177,076,927.30 in the previous period[45] - The company reported cash inflows from investment activities of 155,342,905.15, while cash outflows were 160,601,178.56, resulting in a net cash flow of -5,258,273.41 from investment activities[45] Assets and Liabilities - Total assets at the end of the reporting period were ¥660,275,323.54, down 11.40% from ¥745,271,093.71 at the end of the previous year[8] - The company's total assets decreased significantly, with a notable drop in prepaid expenses by 30.26% to 4,672,756.30 CNY[18] - The company's total liabilities decreased to 112.78 million yuan from 170.21 million yuan, a reduction of about 33.7%[32] - Total liabilities rose to CNY 74,900,568.91, compared to CNY 41,461,009.30 in the previous period, indicating a 80.5% increase[36] Shareholder Information - The total number of ordinary shareholders at the end of the reporting period was 6,272[12] - The largest shareholder, Wei Dongxiao, held 29.62% of the shares, totaling 39,320,688 shares[12] - The company has proposed an incentive plan to grant stock options and restricted stocks to 197 individuals[21] Research and Development - The company plans to enhance market development efforts and strengthen its R&D capabilities, focusing on five core technical competencies[19] - Research and development expenses for Q1 2020 were CNY 22,365,515.72, which is an increase of 23.5% compared to CNY 18,138,659.56 in the same period last year[38] - The company has incurred research and development expenses of 6,848,694.72, an increase of 24.1% from 5,518,523.24 in the previous period[41] Regulatory and Compliance - The company has received feedback from the China Securities Regulatory Commission regarding its private placement application and has responded to the feedback[21] - The company reported no violations regarding external guarantees during the reporting period[25] - There were no non-operating fund occupations by controlling shareholders or related parties during the reporting period[26] - The company has not undergone an audit for the first quarter report, which may affect the reliability of the financial data presented[53] Market Impact - The company's total revenue for Q1 2020 was 30,114,484.06 CNY, a decrease of 54.87% year-on-year due to delays in market sales caused by the COVID-19 pandemic[18] - The company aims to leverage the "new infrastructure" strategy to transform challenges into opportunities as the pandemic situation improves[19]

Fundraising and Financial Performance - The company plans to raise a total of up to 713 million yuan through a non-public offering of A-shares, with the number of shares not exceeding 26.566 million, accounting for 20% of the total share capital before the issuance[7] - The company’s financial report is guaranteed to be true, accurate, and complete by its board of directors and management, ensuring accountability for any misrepresentation[3] - The company reported a basic earnings per share of CNY 0.95 for 2019, up 196.88% from CNY 0.32 in 2018[19] - The company’s operating revenue for 2019 was CNY 602,819,863.90, representing a 69.32% increase compared to CNY 356,026,444.24 in 2018[19] - The net profit attributable to shareholders for 2019 was CNY 124,904,746.50, a significant increase of 194.34% from CNY 42,435,171.41 in 2018[19] - The net cash flow from operating activities reached CNY 84,137,039.74 in 2019, marking a remarkable increase of 723.18% compared to CNY 10,221,008.26 in 2018[19] - The total assets at the end of 2019 amounted to CNY 745,271,093.71, which is a 25.61% increase from CNY 593,302,013.96 at the end of 2018[19] Dividend Distribution - The company will distribute a cash dividend of 2 yuan per 10 shares (including tax) to all shareholders, based on a total of 132,766,280 shares, and will also increase capital by 6 shares for every 10 shares held[9] - The total cash dividend amount for the year is 26,553,256 CNY, which represents 21.26% of the net profit attributable to the company's ordinary shareholders[91] - The cash dividend for the current year is 100% of the distributable profit, which is 133,572,281.76 CNY[88] - The company has maintained a consistent cash dividend policy over the past three years, with total cash dividends distributed amounting to 60,526,806 CNY[91] - The cash dividend distribution plan is consistent with the company's articles of association and dividend management measures[88] Research and Development - The company has established research centers in Beijing, Jinan, Nanjing, and Hangzhou to focus on technology and product development, continuously increasing R&D investment to maintain competitive advantages[6] - The company has committed to increasing investments in product R&D, customer service, and talent support to enhance market competitiveness[4] - The company has a clear focus on innovation and technology development to meet customer demands and maintain market leadership[6] - R&D expenses rose by 51.39% to ¥106,597,264.64, reflecting the company's commitment to enhancing R&D efforts[56] - The number of R&D personnel increased to 380, accounting for 38.62% of the total workforce[57] Market and Operational Risks - The company acknowledges the seasonal risk in sales, with lower sales in the first half of the year due to clients' budgeting and procurement processes, which may lead to seasonal losses[3] - The outbreak of COVID-19 has temporarily impacted the company's operational plans, and the company is taking measures to mitigate adverse effects[8] - The company is closely monitoring the impact of the pandemic on its operations and is actively working to minimize negative effects[8] - Zhongfu Security faces risks related to changes in tax incentives and government subsidies, which could impact profitability[80] - The company is also at risk from rapid technological advancements and the need to keep pace with industry developments to maintain competitive advantage[81] Cybersecurity Focus - The company is engaged in the development and sales of cybersecurity products and services, focusing on national security and compliance with domestic platforms[27] - The cybersecurity market in China is projected to reach approximately CNY 816 billion in 2020, reflecting a 24.00% growth compared to 2019[28] - The company has developed new security solutions based on domestic platforms and big data to meet the increasing demand for data security[27] - The cybersecurity sector contributed ¥602,607,292.49, accounting for 99.96% of total revenue, with a year-on-year growth of 69.43%[44] Shareholder and Governance Matters - Major shareholders, including Wei Dongxiao, plan to reduce their holdings, with Wei limiting annual sales to 10% of his total shares after the lock-up period, while Chen Zhijiang can sell up to 25% annually[95] - The company commits to avoiding any business activities that may compete with its main operations, ensuring no direct or indirect involvement in competitive businesses[98] - The company emphasizes compliance with financial regulations and the avoidance of related party transactions[103] - The company has established a performance evaluation and incentive mechanism for senior management, which effectively motivates their performance[190] - The governance structure of the company is compliant with relevant laws and regulations, ensuring fair treatment of investors[178] Audit and Financial Controls - The audit opinion for the financial statements was a standard unqualified opinion, indicating fair representation of the company's financial status as of December 31, 2019[197] - The company has not reported any material misstatements in its financial reports, with no significant deficiencies identified[192] - The audit identified revenue recognition as a key audit matter due to its significance in the financial statements and potential for misstatement[199] - The audit procedures included substantive testing of significant customer transactions to verify compliance with revenue recognition criteria[199] - The accounts receivable at the end of 2019 accounted for 37.73% of the total revenue for the year[200] Social Responsibility - The company emphasizes its commitment to social responsibility, actively participating in charitable activities and supporting educational initiatives[133] - The company actively participated in targeted poverty alleviation efforts, investing a total of CNY 519,900 (approximately USD 79,000) during the reporting period[136] - The company plans to continue its social responsibility initiatives in response to national calls for poverty alleviation[137] - The company has not been penalized for any violations of environmental protection laws during the reporting period[139]

Fundraising and Financial Plans - The company plans to raise a total of up to 713 million yuan through a non-public offering of A-shares, with the number of shares not exceeding 26.566 million, accounting for 20% of the total share capital before the issuance[7]. - The total amount for share repurchase will not exceed the net proceeds from the initial public offering[101]. - The company has received feedback on its non-public issuance of A-shares, which was approved by the board and shareholders[141]. - The total amount of funds raised in the initial public offering (IPO) was CNY 225.67 million, with CNY 216.32 million utilized by the end of 2019[70]. - The company plans to enhance operational efficiency and profitability through the effective management of raised funds[102]. Profit Distribution and Dividends - The profit distribution plan approved by the board is to distribute a cash dividend of 2 yuan (including tax) for every 10 shares, with a capital reserve conversion of 6 shares for every 10 shares[9]. - The cash dividend amount represents 21.26% of the net profit attributable to ordinary shareholders, which is 124,904,746.50 yuan for 2019[91]. - The cash dividend for 2019 is 100% of the total profit distribution amount, indicating a strong commitment to returning value to shareholders[90]. - The company has consistently maintained a cash dividend policy, with the total cash dividends over the past three years being 20,693,750 yuan in 2017, 13,283,300 yuan in 2018, and 26,553,256 yuan in 2019[91]. - The company’s cash dividend distribution plan for 2019 is subject to approval at the annual general meeting[91]. Research and Development - The company has established research centers in Beijing, Jinan, Nanjing, and Hangzhou, focusing on industry technology and product R&D, and has increased R&D investment to maintain competitive advantages[6]. - The company has committed to increasing investments in product R&D, customer service, and talent support to enhance market competitiveness[4]. - In 2019, the company's R&D expenses amounted to ¥106,597,264.64, representing a 51.39% increase from ¥70,412,918.77 in 2018[59]. - The number of R&D personnel increased to 380 in 2019, accounting for 38.62% of the total workforce, compared to 36.67% in 2018[59]. - The company plans to enhance its product offerings in cloud computing and big data, focusing on security technologies and integrated management systems[59]. Financial Performance - The company's operating revenue for 2019 was CNY 602,819,863.90, representing a 69.32% increase compared to CNY 356,026,444.24 in 2018[19]. - The net profit attributable to shareholders for 2019 was CNY 124,904,746.50, a significant increase of 194.34% from CNY 42,435,171.41 in 2018[19]. - The net cash flow from operating activities reached CNY 84,137,039.74, marking a remarkable increase of 723.18% compared to CNY 10,221,008.26 in 2018[19]. - The total assets at the end of 2019 amounted to CNY 745,271,093.71, which is a 25.61% increase from CNY 593,302,013.96 at the end of 2018[19]. - The company reported a basic earnings per share of CNY 0.95 for 2019, up 196.88% from CNY 0.32 in 2018[19]. Market and Industry Trends - The network security market in China is projected to reach USD 8.75 billion (approximately CNY 816 billion) in 2020, reflecting a year-on-year growth of 24.00%[28]. - The company is focused on developing network security products and services, with a comprehensive range of offerings including confidentiality protection and information security services[27]. - The company is actively developing new products to meet customer needs, particularly in the areas of intelligent inspection tools and confidentiality education training products[41]. - The company is focusing on the domestic security and confidentiality field, leveraging national cybersecurity strategies to enhance its competitive edge[33]. - The company aims to expand its market share in the "信创" (Xinchuang) industry, with rapid growth expected for its products based on domestic platforms[40]. Operational Challenges - The company acknowledges the seasonal risk in sales, with lower sales in the first half of the year and a significant portion of revenue realized in the second half, potentially leading to seasonal losses[4]. - The outbreak of COVID-19 has temporarily impacted the company's operational plans, and the company is taking measures to mitigate adverse effects[8]. - The company is closely monitoring the impact of the COVID-19 pandemic on its operations and is actively taking steps to minimize negative effects[8]. - The company anticipates seasonal fluctuations in sales, with lower revenue typically recorded in the first half of the year[84]. - The company experienced significant seasonal fluctuations, with lower sales in the first half of the year due to budget management practices of major clients[48]. Corporate Governance and Compliance - The company’s financial report is guaranteed to be true, accurate, and complete by its board and management, ensuring accountability for any misrepresentation[3]. - The company will ensure compliance with relevant laws and regulations regarding related party transactions[102]. - The governance structure of the company complies with relevant laws and regulations, ensuring independent operation from the controlling shareholder[178]. - The company actively engages with investors to ensure transparency and fair access to information[179]. - The company has maintained its management structure with no significant changes in the board and supervisory roles during the reporting period[164]. Shareholder Information - Major shareholder Wei Dongxiao plans to reduce his shareholding by no more than 10% of his total shares each year within two years after the lock-up period ends[95]. - Chen Zhijiang intends to reduce his shareholding by no more than 25% of his total shares each year within the same two-year period[95]. - The company has a total of 10 major shareholders, with the top 10 holding significant stakes, including 4.94% by Xiamen Zhongfu Puyi Investment Partnership[152]. - The total number of shareholders at the end of the reporting period was 5,189[151]. - The company’s board members are subject to a 75% lock-up on their shares during their tenure[147]. Social Responsibility - The company actively participated in social responsibility initiatives, contributing a total of 519,900 CNY for poverty alleviation efforts[136]. - The company plans to continue its commitment to social responsibility and contribute to the national poverty alleviation campaign[137]. - The company provided 20 million CNY in capital increase to its wholly-owned subsidiary, Zhongfu Safety Technology Co., Ltd., to support its rapid development[140]. - The company has not reported any issues or other circumstances regarding the use and disclosure of raised funds[74]. - The company has not experienced any non-operating fund occupation by controlling shareholders or related parties during the reporting period[104].

Financial Performance - Operating revenue for the reporting period was ¥129,022,244.42, representing a year-on-year increase of 90.58%[7] - Net profit attributable to shareholders was ¥20,025,336.61, a significant increase of 1,485.22% compared to the same period last year[7] - Basic earnings per share for the reporting period was ¥0.15, up 1,400.00% year-on-year[7] - The weighted average return on equity increased to 4.48%, up by 4.16 percentage points from the previous year[7] - The net profit after deducting non-recurring gains and losses was ¥18,445,714.33, an increase of 4,129.20% year-on-year[7] - Total operating revenue for Q3 2019 reached ¥129,022,244.42, a significant increase from ¥67,700,666.83 in the same period last year, representing an increase of approximately 90.4%[36] - Net profit for Q3 2019 was ¥20,025,336.61, compared to ¥1,263,252.92 in Q3 2018, marking a substantial growth of approximately 1,487.5%[38] - The total comprehensive income for the current period was ¥13,731,112.75, compared to a loss of ¥3,738,776.36 in the previous period, indicating a positive shift in overall financial performance[45] - The net profit for Q3 2019 was CNY 29,963,898.28, a significant recovery from a net loss of CNY -2,848,476.48 in the same period last year, indicating a turnaround in performance[48] Assets and Liabilities - Total assets at the end of the reporting period reached ¥601,031,438.87, an increase of 1.30% compared to the end of the previous year[7] - The company's cash and cash equivalents decreased by 32.29% to ¥215.62 million from ¥318.45 million due to payment of goods[17] - Total liabilities decreased significantly, with accounts payable dropping by 89.69% to ¥1.94 million from ¥18.79 million, mainly due to tax payments made during the period[17] - Total assets as of September 30, 2019, amounted to RMB 601,031,438.87, compared to RMB 593,302,013.96 at the end of 2018, showing a slight increase of about 1.2%[28] - Total liabilities were reported at RMB 142,297,073.38, a marginal increase from RMB 141,715,986.89 at the end of 2018[29] - The company's equity attributable to shareholders increased to RMB 458,734,365.49 from RMB 451,586,027.07, reflecting a growth of approximately 1.8%[29] Cash Flow - The net cash flow from operating activities for the year-to-date was -¥78,107,129.05, a decrease of 9.23% compared to the same period last year[7] - Cash flow from operating activities showed a net outflow of CNY -78,107,129.05, slightly worse than the outflow of CNY -71,509,991.68 in the previous year, indicating ongoing cash management challenges[50] - The company reported a net investment cash flow of ¥10.73 million, a decrease of 112.04% from ¥89.11 million in the previous year, due to reduced cash management of raised funds[17] - The company received CNY 73,000,000.00 from investment recoveries, a decrease from CNY 260,000,000.00 in the previous year, indicating reduced liquidity from investments[54] Expenses - Research and development expenses rose by 68.60% to ¥67.56 million from ¥40.07 million, attributed to increased employee compensation[17] - The company's sales expenses increased by 40.42% to ¥61.51 million from ¥43.81 million, mainly due to growth in personnel and travel expenses[17] - The company’s management expenses increased by 39.17% to ¥79.84 million from ¥57.37 million, primarily due to rising compensation and corporate management fees[17] - The company reported a significant increase in sales expenses, which rose to ¥61,511,038.73 from ¥43,805,773.09, an increase of approximately 40.4%[44] - The financial expenses showed a net income of -¥1,539,934.66, compared to -¥1,256,690.08 in the previous period, indicating a slight increase in financial costs[44] Shareholder Information - The company reported a total of 5,374 common shareholders at the end of the reporting period[10] - The top shareholder, Wei Dongxiao, holds 29.60% of the shares, totaling 39,320,688 shares[10] Government Support - The company received government subsidies amounting to ¥3,632,457.75 during the reporting period[8] Corporate Actions - The company terminated the acquisition of 99% equity in Wuhan Jiantong Information Technology Co., Ltd., following conditional approval from the China Securities Regulatory Commission[18] - The company increased its wholly-owned subsidiary, Shandong Zhongfu Safety Technology Co., Ltd., by RMB 20 million, raising its registered capital to RMB 50 million[19] - The company approved a chip procurement agreement with Shandong Fangcun Microelectronics Technology Co., Ltd. for a maximum amount of RMB 18 million, with a cumulative signed procurement agreement amount of RMB 75,825 so far[19] Market Strategy - The company is focusing on expanding its market presence and enhancing its product offerings, as indicated by the increase in R&D spending and overall revenue growth[36] - The company plans to expand its market presence and invest in new technologies, although specific figures were not disclosed[60]

Financial Performance - Total operating revenue for the first half of 2019 was CNY 173,614,130.99, representing a 61.55% increase compared to CNY 107,464,783.88 in the same period last year[18]. - The net profit attributable to shareholders was a loss of CNY 6,294,223.86, which is a 25.83% increase in loss compared to a loss of CNY 5,002,029.28 in the previous year[18]. - The basic and diluted earnings per share were both negative CNY 0.05, reflecting a 25.00% increase in loss compared to negative CNY 0.04 in the previous year[18]. - The company achieved operating revenue of CNY 174 million, a year-on-year increase of 61.55%[34]. - The net profit attributable to shareholders was CNY -6.29 million, a decrease of 25.83% year-on-year[34]. - The company reported a significant increase in sales expenses, which reached CNY 37,432,077.77, up from CNY 27,120,337.46, indicating higher marketing efforts[137]. - The net loss for the first half of 2019 was CNY 6,294,223.86, compared to a net loss of CNY 5,002,029.28 in the first half of 2018, reflecting a deterioration in profitability[138]. Cash Flow and Liquidity - The net cash flow from operating activities was a negative CNY 101,905,706.48, reflecting a 22.82% increase in cash outflow compared to a negative CNY 82,974,753.90 in the same period last year[18]. - Cash and cash equivalents dropped significantly from CNY 318,451,022.47 to CNY 197,437,765.14, a decrease of approximately 38%[128]. - The total cash flow net increase for the first half of 2019 was CNY -122,266,482.33, worsening from CNY -84,508,415.16 in the previous year[145]. - The cash inflow from sales of goods and services was CNY 173,175,123.40, significantly higher than CNY 101,479,920.05 in the same period of 2018, marking an increase of approximately 70.5%[143]. Assets and Liabilities - The total assets at the end of the reporting period were CNY 553,627,791.41, a decrease of 6.69% from CNY 593,302,013.96 at the end of the previous year[18]. - The net assets attributable to shareholders decreased by 3.22% to CNY 437,025,076.99 from CNY 451,586,027.07 at the end of the previous year[18]. - Total liabilities decreased to CNY 116,602,714.42 from CNY 141,715,986.89, a decline of about 17.7%[130]. - The company's equity attributable to shareholders decreased from CNY 451,586,027.07 to CNY 437,025,076.99, a reduction of approximately 3.2%[130]. Investment and Research - The company plans to enhance investment in product research and development, customer service, and talent support to maintain market competitiveness[4]. - Research and development investment increased by 59.97% to RMB 39,994,920.60, focusing on data collection, analysis, and protection technologies[38]. - The company is focused on building a high-quality R&D team to enhance its core competitiveness in security and confidentiality technologies[35]. Asset Restructuring - The company has received conditional approval for a major asset restructuring involving the acquisition of 99% equity in Wuhan Jiantong Information Technology Co., Ltd.[5]. - The company is advancing the acquisition of JianTong Information, with the restructuring plan conditionally approved by the China Securities Regulatory Commission on April 28, 2019[35]. Shareholder Information - The total number of shareholders at the end of the reporting period was 5,232[114]. - Wei Dongxiao held 29.60% of the shares, totaling 39,320,688 shares, with no changes during the reporting period[114]. - The company has a total of 68,575,851 shares, with 744,000 shares under restricted conditions[112]. Legal Matters - The company is involved in a civil lawsuit with Ding Chunlong and five other individuals, which has been withdrawn by Ding Chunlong[82]. - The company is seeking compensation of 300,000 RMB from Ding Chunlong for breach of contract, with a court ruling ordering him to pay this amount[83]. - The company has ongoing litigation with Beijing Jinqiao Ruike Technology Co., Ltd. for a sales contract dispute, claiming 300,000 RMB in damages[83]. Financial Reporting and Compliance - The half-year financial report has not been audited, indicating a need for further financial scrutiny[79]. - The financial statements are prepared in accordance with the enterprise accounting standards, reflecting the company's financial position, operating results, and cash flows accurately[179]. - The company has not reported any significant changes in accounting policies or estimates during the reporting period[179].

Financial Performance - Total revenue for Q1 2019 was ¥66,721,830.50, representing a 69.17% increase compared to ¥39,439,577.78 in the same period last year[7] - Net profit attributable to shareholders was -¥12,634,655.44, a decrease of 47.33% from -¥8,575,978.13 year-on-year[7] - Basic and diluted earnings per share were both -¥0.10, down 42.86% from -¥0.07 in the same period last year[7] - The net profit for Q1 2019 was a loss of CNY 11,788,401.60, compared to a loss of CNY 6,406,445.39 in Q1 2018, reflecting a deterioration in profitability[41] - The total comprehensive income for Q1 2019 was ¥1,902,802.46, a recovery from a loss of ¥2,158,149.11 in the same quarter last year[46] Cash Flow and Liquidity - Net cash flow from operating activities was -¥94,435,541.51, which is a 39.93% decline from -¥67,486,471.67 in the previous year[7] - The company's cash and cash equivalents decreased by 44.17% to CNY 177.80 million as of March 31, 2019, primarily due to funds management and investment in financial products[18] - Cash and cash equivalents decreased to CNY 139,757,903.74 as of March 31, 2019, down from CNY 223,088,259.08 at the end of 2018, a decline of 37.3%[37] - The net cash flow from operating activities was negative at CNY -94.44 million, worsening by 39.93% compared to the previous year[18] - Cash outflow from investing activities totaled CNY 64,982,994.11, significantly higher than CNY 1,178,979.21 in Q1 2018, indicating increased investment activity[51] Assets and Liabilities - Total assets at the end of the reporting period were ¥553,037,999.71, an increase of 12.21% from ¥492,881,447.58 at the end of the previous year[7] - Total assets as of March 31, 2019, were CNY 493,122,220.38, slightly up from CNY 488,686,012.27 at the end of 2018, an increase of 0.9%[40] - Total liabilities decreased to CNY 59,251,800.11 in Q1 2019 from CNY 59,164,781.35 in Q1 2018, a marginal decrease of 0.15%[39] - The company's equity attributable to shareholders was CNY 451,586,027.07, remaining stable compared to the previous year[53] Shareholder Information - The total number of ordinary shareholders at the end of the reporting period was 5,705[10] - The largest shareholder, Wei Dongxiao, holds 29.60% of the shares, amounting to 39,320,688 shares[10] - The company did not engage in any repurchase transactions among the top 10 shareholders during the reporting period[11] Research and Development - Research and development expenses increased by 57.78% to CNY 18.14 million, reflecting the company's commitment to enhancing its R&D capabilities[18] - Research and development expenses increased to ¥5,518,523.24, up from ¥3,565,353.80, reflecting the company's commitment to innovation[45] Operational Challenges - The company continues to face challenges with increasing losses due to expanded operational scale and heightened R&D and marketing expenditures[19] - The company experienced a 100% decline in investment income, with no income reported compared to CNY 735,495.10 in the previous period[18] Strategic Moves - The company plans to issue shares and pay cash to acquire 99% of Wuhan Jiantong Information Technology Co., Ltd. from five individuals, with the transaction being a key strategic move in the cybersecurity industry[20] - The company has increased the registered capital of its wholly-owned subsidiary, Shandong Zhongfu Safety Technology Co., Ltd., by RMB 20 million, bringing the total to RMB 50 million to support its rapid development[22] Legal Matters - The company received a civil lawsuit regarding the transfer of shares in Wuhan Jiantong Information Technology Co., Ltd., but the court allowed the plaintiff to withdraw the case[22] Fund Management - The total amount of raised funds is CNY 22,566.90 million, with CNY 779.84 million invested in the current quarter[26] - Cumulative investment of raised funds amounts to CNY 18,795.96 million, with a cumulative change in purpose of raised funds at 0.00%[26] Compliance and Governance - There are no overdue commitments from actual controllers, shareholders, related parties, or acquirers during the reporting period[24] - The company has not reported any non-operating fund occupation by controlling shareholders or related parties during the reporting period[29] - The first quarter report for 2019 was not audited[58] - The board of directors is chaired by Wei Dongxiao[59]

Financial Performance - The company's operating revenue for 2018 was ¥356,026,444.24, representing a 26.64% increase compared to ¥281,123,191.83 in 2017[18]. - The net profit attributable to shareholders for 2018 was ¥42,435,171.41, a decrease of 12.72% from ¥48,617,587.35 in 2017[18]. - The net profit attributable to shareholders after deducting non-recurring gains and losses was ¥27,054,751.16, down 30.87% from ¥39,136,663.91 in 2017[18]. - The net cash flow from operating activities decreased by 63.72% to ¥10,221,008.26 from ¥28,173,272.80 in 2017[18]. - The total assets at the end of 2018 were ¥593,302,013.96, an increase of 8.53% from ¥546,687,257.49 at the end of 2017[18]. - The net assets attributable to shareholders increased by 9.93% to ¥451,586,027.07 from ¥410,779,748.57 at the end of 2017[18]. - The company's operating revenue for 2018 reached CNY 356 million, representing a year-on-year growth of 26.64%[35]. - The net profit attributable to shareholders was CNY 42.44 million, a decrease of 12.72% compared to the previous year[35]. - The revenue from security protection products increased by CNY 52.34 million, a growth of 33.88%[35]. - The total non-recurring gains and losses for 2018 amounted to ¥15,380,420.25, compared to ¥9,480,923.44 in 2017[24]. Cash Dividend and Shareholder Returns - The company reported a profit distribution plan to distribute cash dividends of 1.00 RMB per 10 shares (including tax) based on 132,833,000 shares[7]. - In 2018, the company proposed a cash dividend of CNY 1.00 per 10 shares, totaling CNY 13,283,300, which accounts for 31.30% of the net profit attributable to shareholders[94]. - The cash dividend for 2017 was CNY 2.50 per 10 shares, totaling CNY 20,693,750, representing 42.56% of the net profit attributable to shareholders[94]. - The cash dividend for 2016 was CNY 24,480,000, which accounted for 50.63% of the net profit attributable to shareholders[94]. - The company has consistently maintained a positive profit distribution policy over the past three years, with cash dividends totaling CNY 13,283,300 in 2018[94]. - The cash dividend distribution plan for 2018 is subject to approval at the annual shareholders' meeting[96]. Asset Restructuring and Acquisitions - The company is pursuing a major asset restructuring to acquire 99% of Wuhan Jiantong Information Technology Co., which is crucial for its strategy in the cybersecurity industry, despite facing regulatory hurdles[6]. - The company has received legal notifications regarding a civil lawsuit related to the asset acquisition, which introduces uncertainty into the restructuring process[6]. - The company signed a deal to acquire 55% of Nanjing Fuxin Technology Co., Ltd. at zero consideration, which is not expected to impact overall operations or performance[53]. - The company plans to issue shares and pay cash to acquire 99% of Wuhan Jiantong Information Technology Co., Ltd., with the transaction details disclosed on March 29, 2018[138]. Research and Development - The company plans to increase investments in product research and development, customer service, and talent support to maintain its competitive edge in the rapidly evolving software and information technology services market[4]. - The company launched a series of security products and solutions supporting domestic operating systems, focusing on national security and customer needs[26]. - Research and development expenses rose by CNY 23.27 million, a year-on-year increase of 49.36%[36]. - The number of R&D personnel rose to 253, with R&D expenses accounting for 19.78% of total revenue[57]. - The company aims to enhance operational efficiency and profitability by actively promoting the construction of fundraising investment projects[104]. Market and Competitive Environment - The company faced significant seasonal sales fluctuations, with lower sales in the first half of the year due to clients' budget management and procurement schedules, potentially leading to seasonal losses[4]. - The company emphasizes the importance of adapting to market changes and technological innovations to meet customer demands and sustain its market position[4]. - The company operates in a highly competitive environment, necessitating continuous monitoring of industry trends and innovations to avoid losing its competitive advantage[4]. - The company reported a significant increase in customer demand driven by national laws and policies related to cybersecurity[27]. - The company aims for continuous rapid growth by deepening vertical and expanding horizontally, ensuring a strong market development system[82]. Financial Management and Investments - The company has committed to invest CNY 9,067 million in information security projects, with a cumulative investment of CNY 6,473.47 million, achieving 102.11% of the expected benefits[71]. - The company plans to utilize up to 80 million CNY of temporarily idle raised funds for cash management, investing in short-term principal-protected bank financial products[73]. - The company has a financial product with a return of 3.00% for a period of 91 days, recovering 4.17 million[130]. - The financial management strategy focuses on low-risk, principal-protected products to ensure capital safety[130]. - The company reported a total of 31,700 million CNY in deposits for the year 2018[131]. Governance and Compliance - The company’s financial report is guaranteed to be true, accurate, and complete by its board of directors and management[3]. - The company has not faced any penalties or rectification issues during the reporting period[110]. - The company’s independent directors confirmed the legality and effectiveness of the incentive plan and its beneficiaries[112]. - The company maintains independent operations from its controlling shareholder, ensuring no interference in decision-making[178]. - The company’s information disclosure practices comply with legal regulations, ensuring fair access to information for all shareholders[183]. Internal Control and Audit - The audit opinion for the financial statements was a standard unqualified opinion, issued on March 28, 2019[197]. - The company confirmed that there were no major defects in financial reporting, with zero instances reported for both financial and non-financial reports[192]. - The company’s internal control evaluation report was disclosed on March 30, 2019, with no major deficiencies noted[191]. - The audit procedures included testing key internal controls related to revenue recognition and confirming significant customer transactions[199]. - The company’s provision for bad debts was assessed based on credit risk characteristics and aging analysis[200].

Financial Performance - Operating revenue for the reporting period was CNY 67,700,666.83, an increase of 35.45% year-on-year [7]. - Net profit attributable to shareholders was CNY 1,263,252.92, a decrease of 48.00% compared to the same period last year [7]. - The net profit attributable to shareholders after deducting non-recurring gains and losses was CNY 436,151.50, down 81.18% year-on-year [7]. - Basic earnings per share were CNY 0.01, down 50.00% year-on-year [7]. - The company reported a total comprehensive income of CNY 1,263,252.92 for Q3 2018, compared to CNY 2,429,290.55 in the same period last year [43]. - The net profit for Q3 2018 was a loss of CNY 3,738,776.36, compared to a net profit of CNY 8,777,129.02 in Q3 2017, representing a significant decline [50]. - The total profit for Q3 2018 was a loss of CNY 244,902.73, compared to a profit of CNY 9,348,014.32 in Q3 2017 [49]. Assets and Liabilities - Total assets at the end of the reporting period were CNY 499,075,519.57, a decrease of 8.71% compared to the end of the previous year [7]. - The company's current assets totaled RMB 425,730,992.09, down from RMB 476,077,697.43, indicating a decrease of about 10.6% [33]. - The total liabilities decreased from RMB 135,907,508.92 to RMB 101,511,676.10, representing a reduction of approximately 25.3% [35]. - The company's equity attributable to shareholders decreased from RMB 410,779,748.57 to RMB 397,563,843.47, a decline of about 3.2% [35]. Cash Flow - The net cash flow from operating activities was CNY -71,509,991.68, a decrease of 65.75% compared to the same period last year [7]. - The company's operating cash flow for the current period was -41,971,496.91 CNY, compared to -32,858,228.95 CNY in the previous period, indicating a decline in operational efficiency [56]. - The total cash outflow from operating activities was 186,745,986.56 CNY, compared to 127,647,644.99 CNY in the previous period, highlighting increased operational costs [56]. - The net cash flow from investment activities was 90,619,465.64 CNY, a recovery from -123,178,688.59 CNY in the previous period, suggesting improved investment performance [57]. Shareholder Information - The total number of ordinary shareholders at the end of the reporting period was 9,676 [11]. - The largest shareholder, Wei Dongxiao, held 29.59% of the shares, totaling 39,320,688 shares [11]. Operational Metrics - Total sales revenue for the first nine months of 2018 was ¥179,792,505.46, a 41.50% increase compared to the same period in 2017 [20]. - Research and development expenses increased by 36.72% to ¥40,072,891.81 due to higher employee compensation [20]. - The company reported an investment income of ¥2,509,396.54, a significant increase of 842,207.63% from the previous year [20]. - The company's sales expenses increased to CNY 43,805,773.09 from CNY 30,747,546.34, reflecting a rise of 42.4% year-over-year [49]. Dividend and Stock Information - The company reported a cash dividend distribution plan for 2017, proposing a cash dividend of RMB 2.50 per 10 shares, totaling approximately RMB 206,937,500 based on a total share capital of 82,775,000 shares [26]. - The company plans to repurchase and cancel 40,000 shares of restricted stock due to the departure of three incentive plan participants [22].

Financial Performance - Total revenue for the first half of 2018 was CNY 107,464,783.88, representing an increase of 18.24% compared to CNY 90,885,754.62 in the same period last year[18]. - Net profit attributable to shareholders was a loss of CNY 5,002,029.28, a decrease of 178.80% from a profit of CNY 6,347,838.47 in the previous year[18]. - The net cash flow from operating activities was a negative CNY 82,974,753.90, worsening by 119.30% compared to a negative CNY 37,835,494.66 in the same period last year[18]. - Basic earnings per share were CNY -0.04, down 166.67% from CNY 0.06 in the previous year[18]. - The total operating income for the first half of 2018 was CNY 107,464,783.88, an increase of 18.5% compared to CNY 90,885,754.62 in the same period last year[133]. - The total operating costs increased to CNY 126,236,055.12, up from CNY 92,419,767.48, reflecting a significant rise in expenses[133]. - The company reported a significant increase in other income by 34.62% to CNY 13.47 million, attributed to government subsidies received[41]. - The company reported a total of CNY 32,410,440.83 in comprehensive income, contributing to the overall equity growth[158]. Assets and Liabilities - Total assets decreased by 12.82% to CNY 476,585,092.78 from CNY 546,687,257.49 at the end of the previous year[18]. - The company's total current assets decreased from CNY 476,077,697.43 at the beginning of the period to CNY 407,166,626.74 at the end of the period, representing a decline of approximately 14.5%[124]. - Accounts receivable increased from CNY 109,979,032.11 to CNY 129,200,536.46, reflecting a growth of about 17.3%[124]. - Total liabilities decreased from CNY 119,427,508.92 to CNY 71,997,217.24, a reduction of about 39.5%[125]. - The company's total assets decreased from CNY 546,687,257.49 to CNY 476,585,092.78, a decline of approximately 12.8%[125]. - The cash and cash equivalents decreased by 36.35% to CNY 147.98 million, mainly due to dividend payments and supplier payments[41]. Strategic Focus and Market Position - The company focuses on information security products and services, aiming to be a leader in the overall solution for information security and confidentiality in China[24]. - The company is actively developing new products in the electronic business license and digital identity certification sectors, which have significant growth potential[29]. - The company aims to integrate core technologies in security, domestic encryption, and big data to enhance its competitive edge in the information security sector[29]. - The company is positioned to benefit from the expanding market for security inspection products as compliance and self-assessment practices become more prevalent[28]. - The demand for information security and confidentiality services continues to grow, driven by national policies emphasizing cybersecurity[26]. Research and Development - The company has accumulated 47 patents and 98 software copyrights as of the end of the reporting period, indicating strong research and development capabilities[32]. - Research and development expenses increased by 38.39% year-on-year to CNY 2.37 million, reflecting the company's commitment to enhancing core competitiveness through innovation[36]. - The company is expanding its research and development capabilities by utilizing resources in Beijing and Nanjing[58]. - The company has established research centers in Jinan and Nanjing to focus on technology and product development, ensuring alignment with market demands[70]. Corporate Governance and Shareholder Information - The company plans not to distribute cash dividends or issue bonus shares[6]. - The total number of ordinary shareholders at the end of the reporting period was 9,110, with major shareholders holding significant stakes, including Wei Dongxiao at 29.69% and Chen Zhijiang at 19.61%[108]. - The company has implemented an employee stock incentive plan, granting restricted stock at a price of 12.49 yuan per share to 27 individuals[83]. - The company has not experienced any major litigation or arbitration matters during the reporting period[80]. Investment and Financial Management - The company is in the process of acquiring 100% equity of Wuhan Jiantong Information Technology Co., Ltd., with the asset restructuring plan approved by shareholders[38]. - The company plans to use up to RMB 80 million of temporarily idle raised funds for cash management, purchasing short-term principal-protected bank wealth management products[60]. - The total amount of entrusted wealth management during the reporting period was RMB 26 million, with an unexpired balance of RMB 8 million[61]. - The company has committed RMB 4 million in bank wealth management products with an expected annualized return of 3.60%[61]. Risks and Challenges - The company faced significant challenges in cash flow and profitability, indicating a need for strategic adjustments moving forward[5]. - The company anticipates potential risks related to tax incentives and government subsidies, which could impact profitability if policies change[70]. - Seasonal sales patterns are evident, with lower sales in the first half of the year due to budget management practices of major clients, potentially leading to seasonal losses[71]. Compliance and Accounting - The company adheres to the enterprise accounting standards, ensuring that financial statements accurately reflect its financial position, operating results, and cash flows for the reporting period[170]. - The accounting period is defined as January 1 to December 31 each year[171]. - The company uses Renminbi as its functional currency for accounting purposes[172].