Financial Performance - Total revenue for Q1 2018 was CNY 39,439,577.78, representing a 16.61% increase compared to CNY 33,821,297.70 in the same period last year[7]. - Net profit attributable to shareholders was a loss of CNY 8,575,978.13, a decrease of 564.82% from a loss of CNY 1,289,971.15 in the previous year[7]. - Basic and diluted earnings per share were both negative CNY 0.14, a decrease of 600.00% from negative CNY 0.02 in the previous year[7]. - Operating profit turned negative at ¥-6,505,689.62, down from a profit of ¥536,798.57 in the prior period[46]. - The total comprehensive income for the period was a loss of ¥8,575,978.13, compared to a loss of ¥1,289,971.15 in the prior period[47]. Cash Flow - The net cash flow from operating activities was a negative CNY 67,486,471.67, which is a decline of 79.75% compared to negative CNY 37,545,275.62 in the same period last year[7]. - Cash flow from operating activities showed a net outflow of ¥67,486,471.67, worsening from a net outflow of ¥37,545,275.62[51]. - The net increase in cash and cash equivalents was -¥22,680,782.60, an improvement from -¥51,579,602.73 in the previous period[56]. - The ending balance of cash and cash equivalents was ¥149,750,619.05, compared to ¥34,982,211.73 in the previous period[56]. Assets and Liabilities - Total assets at the end of the reporting period were CNY 492,881,447.58, down 9.84% from CNY 546,687,257.49 at the end of the previous year[7]. - The company's total equity decreased from ¥410,779,748.57 to ¥402,203,770.44, a decrease of about 2.1%[40]. - Total current assets decreased from ¥476,077,697.43 to ¥425,501,011.71, a reduction of about 10.6%[38]. - Total liabilities decreased from ¥135,907,508.92 to ¥90,677,677.14, reflecting a decline of approximately 33.3%[40]. Investments and Projects - The company plans to invest RMB 20 million in the Zhongke Xinguang Network Security Risk Venture Capital Fund, focusing on cybersecurity projects[26]. - The company has committed to several investment projects, including a comprehensive protection solution with a total investment of RMB 90.67 million, of which 47.19% has been completed[31]. - The company has also initiated the construction of a research and development center with a total investment of RMB 45.67 million, with 39.48% completed[31]. - The company is acquiring 100% equity of Wuhan Jiantong Information Technology Co., Ltd. through a share issuance and cash payment[24]. Operational Changes - The company is undergoing a major asset restructuring to acquire 100% equity of Wuhan Jiantong Information Technology Co., Ltd., which is subject to shareholder and regulatory approvals[14]. - The company has not reported any significant changes in its core technology team or major risks affecting future operations[23]. - The company has not encountered any overdue commitments from actual controllers, shareholders, or related parties during the reporting period[28]. Government and Regulatory Factors - The company received government subsidies amounting to CNY 3,006,557.60 during the reporting period[8]. - The company faces risks related to tax incentives and government subsidies, which could impact profitability if policies change[9]. Market and Competitive Position - The company emphasizes the importance of technological advancement and innovation to maintain competitive advantage in the rapidly evolving information security industry[10]. - Operating costs rose to 13.06 million RMB, reflecting a 54.77% increase due to higher sales revenue[21]. - The company reported a significant increase in sales expenses, which rose to ¥12,533,254.13 from ¥7,070,921.31, reflecting a 77% increase[46].

Financial Performance - The company's operating revenue for 2017 was ¥281,123,191.83, representing a 30.21% increase compared to ¥215,903,751.65 in 2016[17] - The net profit attributable to shareholders for 2017 was ¥48,617,587.35, a slight increase of 0.55% from ¥48,354,007.18 in 2016[17] - The net profit attributable to shareholders after deducting non-recurring gains and losses decreased by 14.22% to ¥39,136,663.91 from ¥45,625,720.54 in 2016[17] - The net cash flow from operating activities increased by 41.86% to ¥28,173,272.80 from ¥19,860,044.65 in 2016[17] - The total assets at the end of 2017 were ¥546,687,257.49, a significant increase of 128.92% from ¥238,816,574.39 at the end of 2016[17] - The net assets attributable to shareholders at the end of 2017 were ¥410,779,748.57, up 163.32% from ¥156,002,591.36 at the end of 2016[17] - The basic earnings per share for 2017 were ¥0.67, down 15.19% from ¥0.79 in 2016[17] - The diluted earnings per share for 2017 were also ¥0.67, reflecting the same decline of 15.19% from ¥0.79 in 2016[17] - The weighted average return on equity for 2017 was 16.56%, a decrease of 18.63 percentage points from 35.19% in 2016[17] Revenue Growth - In Q1 2017, the company's operating revenue was approximately CNY 33.82 million, which increased to CNY 140.26 million in Q4 2017, showing a significant growth trend[19] - The net profit attributable to shareholders was negative CNY 1.29 million in Q1 2017, but rose to CNY 39.44 million by Q4 2017, indicating a strong recovery[19] - The net cash flow from operating activities turned positive in Q4 2017, reaching CNY 71.32 million, after being negative in the first three quarters[19] - The company received government subsidies amounting to CNY 8.21 million in 2017, compared to CNY 4.40 million in 2016, reflecting increased support[23] - The company's operating revenue reached 281 million yuan, representing a year-on-year growth of 30.21%[40] - The information security industry accounted for ¥280,381,330.60, or 99.74% of total revenue, with a year-on-year growth of 30.41%[46] - Revenue from information security confidentiality products was ¥154,502,773.21, making up 54.96% of total revenue, with a growth of 13.70%[46] Research and Development - Research and development expenses amounted to 45.14 million yuan, reflecting a year-on-year increase of 41.17%[40] - The company increased R&D investment to CNY 45,135,704.78 in 2017, representing 16.06% of operating revenue, up from 14.81% in 2016[58] - The number of R&D personnel rose to 204, accounting for 37.23% of total employees, compared to 40.38% in 2016[58] - The company is focusing on developing information security products, with several projects completed and planned for implementation in 2018[57] - The company has a strong focus on R&D, with dedicated centers for key technology research and product development, ensuring continuous technological advancement[88] Market Position and Strategy - The company launched a series of security and confidentiality products based on domestic operating systems, enhancing its competitive edge in the market[28] - The electronic business license market is expected to grow significantly, with the company being a leading supplier in this sector[30] - The company has achieved a leading market share in the electronic business license carrier market, indicating strong market positioning[30] - The company is actively involved in the integration of confidential information systems, holding the highest level of qualification for such projects in China[30] - The company is positioned to benefit from the national strategy of domestic substitution in specialized fields, which is expected to drive stable growth in performance[29] Financial Management and Governance - The company has strengthened its internal governance and supervision mechanisms to enhance morale and cohesion, laying a solid foundation for future performance[42] - The company has established a robust internal governance structure to mitigate operational management risks associated with business expansion[88] - The company has engaged Da Hua Accounting Firm for auditing services, with a fee of 500,000 RMB for the reporting period[107] - The company has no non-operating fund occupation by controlling shareholders or related parties during the reporting period[104] - The company has not faced any bankruptcy reorganization matters during the reporting period[108] Shareholder and Dividend Information - The company plans to distribute a cash dividend of ¥2.50 per 10 shares, totaling ¥206,937.50 based on 82,775,000 shares[5] - The cash dividend represents 42.56% of the net profit attributable to the company's ordinary shareholders for the year 2017, which was 48,617,587.35 yuan[97] - The company has a history of cash dividend distribution, with previous distributions of 4.00 yuan per 10 shares in 2016 and 6.25 yuan per 10 shares in 2015[95] - The company is committed to maintaining a minimum cash dividend ratio of 20% during its growth phase, with significant capital expenditure plans[94] Employee and Management Structure - The total number of employees is 548, with 178 in the parent company and 370 in major subsidiaries[169] - The workforce includes 204 R&D personnel, 130 technical staff, and 118 sales personnel, indicating a strong focus on research and sales[169] - The educational background of employees shows 4 with PhDs, 45 with Master's degrees, and 304 with Bachelor's degrees, reflecting a highly educated workforce[170] - The company has established a competitive compensation system based on industry standards and performance, ensuring fairness and market competitiveness[171] - The company has a diverse management team with backgrounds in various sectors, including technology and finance[162][163] Risk Management - The company is facing risks related to tax incentives and government subsidies, which could impact profitability if policies change[86] - The company has maintained transparency and integrity in its information disclosure practices[133] - The company has not disclosed any strategic investments or mergers during the reporting period[156] Corporate Social Responsibility - The company has actively participated in social responsibility initiatives, providing support to nearly 100 impoverished students[132] - The company has complied with environmental protection laws and has not faced any penalties during the reporting period[135]

Financial Performance - Operating revenue for the period reached ¥49,982,212.42, up 38.02% compared to the same period last year[7] - Net profit attributable to shareholders decreased to ¥2,429,290.55, a decline of 69.63% year-over-year[7] - Net profit attributable to shareholders after deducting non-recurring gains and losses was ¥2,317,410.81, down 56.23% from the previous year[7] - Basic earnings per share were ¥0.03, a decrease of 76.92% compared to the same period last year[7] - The weighted average return on equity was 0.67%, down 6.27% year-over-year[7] - Total operating revenue for the third quarter reached ¥49,982,212.42, an increase from ¥36,213,470.60 in the previous period[37] - Net profit for the quarter was ¥2,429,290.55, a decrease from ¥8,000,067.80 in the same period last year[38] - Earnings per share (EPS) for the quarter was ¥0.03, down from ¥0.13 in the previous year[39] - The total profit for the third quarter was CNY 9,348,014.32, a decline of 41.0% from CNY 15,874,744.06 in the same quarter last year[46] - The company reported a gross profit margin of approximately 1.16% for the quarter[37] Assets and Liabilities - Total assets increased to ¥453,843,310.25, a 90.04% increase compared to the previous year[7] - The total liabilities of the company were CNY 87,874,639.79, up from CNY 82,813,983.03, showing a slight increase of about 6.3%[31] - The company's total assets reached ¥438,500,116.64, up from ¥235,143,479.18 year-on-year[38] - Total liabilities decreased to ¥60,880,542.29 from ¥72,173,802.62 year-on-year[38] Cash Flow - The company reported a net cash flow from operating activities of -¥43,143,030.44, a decrease of 2.02% compared to the previous year[7] - The company reported a cash flow from operating activities net loss of CNY 43,143,030.44, slightly worse than the loss of CNY 42,289,810.66 in the previous year[53] - The net cash flow from operating activities was -32,858,228.95 CNY, compared to -44,609,191.51 CNY in the previous period, showing an improvement of approximately 26.5%[55] - Total cash inflow from financing activities was 259,560,000.00 CNY, significantly higher than 5,000,000.00 CNY in the previous period[56] - The net cash flow from financing activities was 219,665,179.48 CNY, a substantial increase from -42,679,418.76 CNY in the previous period[56] - The cash inflow from operating activities totaled 94,789,416.04 CNY, down from 107,388,597.72 CNY in the previous period, reflecting a decrease of approximately 11.5%[55] Shareholder Information - The total number of ordinary shareholders at the end of the reporting period was 11,451[11] - The company issued 1,175,000 restricted stocks under the incentive plan, with a vesting period of 12, 24, and 36 months[19] - The company has executed its cash dividend policy without any issues during the reporting period[24] Investments and Expenses - The company invested ¥10,000,000 in establishing a joint venture in the information security sector, holding an 18.18% stake[19] - The company reported a 30.06% increase in cash paid to employees, totaling ¥64,313,496.91, due to an increase in personnel and related expenses[18] - The company’s financial expenses decreased by 167.21% to -¥358,755.00, resulting from increased cash and reduced loans[17] - The company’s income tax expense decreased by 83.76% to ¥570,885.30, due to tax rate changes benefiting key software enterprises[17] - The company recorded a financial expense of CNY -241,549.09, compared to CNY -7,694.69 in the previous year, indicating a significant improvement in financial costs[49] Inventory and Receivables - Accounts receivable rose by 64.45% to ¥87,729,697.74, mainly due to new receivables not yet due according to contract terms[17] - Inventory increased by 84.50% to ¥22,786,069.77, attributed to the rise in raw materials and work-in-progress for production[17] - Other payables surged by 1828.28% to ¥20,512,163.81, reflecting new obligations related to the stock incentive plan[17] Future Outlook - The company plans to focus on market expansion and new product development in the upcoming quarters[36] - The company has not indicated any significant changes in net profit expectations for the upcoming reporting period[24]

Financial Performance - Total revenue for the first half of 2017 was CNY 90,885,754.62, representing a 7.48% increase compared to CNY 84,557,679.33 in the same period last year[17]. - Net profit attributable to shareholders was CNY 6,347,838.47, a significant increase of 45.61% from CNY 4,359,530.06 year-on-year[17]. - The net profit after deducting non-recurring gains and losses decreased by 17.78% to CNY 3,245,407.50 from CNY 3,947,137.98 in the previous year[17]. - Basic and diluted earnings per share increased by 42.86% to CNY 0.10 from CNY 0.07 in the previous year[17]. - The company's total revenue for the reporting period was CNY 57,982,920.03, with a year-on-year increase of 29.69%[50]. - The gross profit margin for information security products was 89.57%, reflecting an increase of 2.01% compared to the previous year[50]. - The total comprehensive income for the first half of 2017 was CNY 6,347,838.47, compared to CNY 4,359,530.06 in the previous year, reflecting a growth of 45.5%[162]. Cash Flow and Assets - The net cash flow from operating activities improved to -CNY 37,835,494.66, a 12.83% reduction in losses compared to -CNY 43,403,088.54 in the same period last year[17]. - The company's cash and cash equivalents increased by 153.68% to ¥272,625,252.31, primarily due to funds raised from the IPO[47]. - Cash and cash equivalents at the end of the period amounted to RMB 272,625,252.31, representing 63.77% of total assets, an increase of 18.77% from the previous year[55]. - The company's total assets at the end of the reporting period reached CNY 427,492,110.99, marking a 79.00% increase from CNY 238,816,574.39 at the end of the previous year[17]. - The total amount of cash received from borrowings decreased by 40.00% to CNY 3,000,000.00, primarily due to reduced bank loans[48]. - The company's cash flow from operating activities showed a net outflow of CNY 37,835,494.66, an improvement from a net outflow of CNY 43,403,088.54 in the same period last year[167]. Investments and R&D - Research and development investment rose to ¥18,065,176.89, marking a 26.18% increase compared to the previous year[46]. - The company has made significant investments in research and development, focusing on products such as the computer terminal confidentiality inspection system and electronic business license client security products, which have become new growth points for performance[74]. - The company has committed to invest CNY 9,067.00 million in the information security protection solution project, with CNY 1,559.90 million already invested[62]. - The company has obtained 9 new patent authorizations and 5 software copyright certificates during the reporting period[39]. - The company holds 40 patents and 75 software copyrights, reflecting its strong research and development capabilities[33]. Market Position and Strategy - The company focuses on information security, with a mission to become a leading provider of network and information security solutions in China[25]. - The company is actively expanding its market presence in the security and confidentiality sector, ensuring a leading position in the industry[41]. - The company is positioned to benefit from the national strategy for domestic substitution in the confidential information sector, which is expected to lead to stable revenue growth in the coming years[26]. - The company plans to expand its market presence in Southeast Asia, targeting a 10% market share by the end of 2018[88]. - A strategic acquisition of a local tech firm is anticipated to enhance the company's product offerings and customer base[89]. Risks and Challenges - The company faces risks including technological advancements and substitution risks, seasonal risks, and personnel turnover risks[4]. - The company experiences significant seasonal sales distribution, with lower sales in the first half of the year and higher sales in the second half, potentially leading to seasonal losses[75]. - The corporate income tax rate is set at 15% due to its status as a high-tech enterprise, and any adverse changes in tax incentives could impact profitability[77]. - The company has received government subsidies, but the amount is uncertain and fluctuations could affect net profit[77]. Shareholder and Governance - The company plans not to distribute cash dividends or issue bonus shares[5]. - The actual controller and major shareholders have committed to not transferring shares for specified periods, ensuring stability in shareholding[82]. - The company aims to maintain long-term stock holdings by its major shareholders, with a commitment to limit annual share reductions to no more than 10% of their total holdings after the lock-up period[84]. - The annual shareholders' meeting had an investor participation rate of 84.51%[80]. - The company has not engaged in any major related party transactions during the reporting period[104]. Compliance and Reporting - The company reported no discrepancies between financial results under international and Chinese accounting standards during the reporting period[18]. - The financial report was approved on August 25, 2017, by the company's board of directors[194]. - The financial statements are prepared based on the assumption of going concern, with no significant doubts about the company's ability to continue operations[197]. - The financial statements comply with the requirements of the enterprise accounting standards, reflecting the company's financial position and operating results accurately[199].