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].

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].