ETS(002545)2023-08-22 16:00Business Cycle and Reporting - The company operates on a 12-month business cycle, using it as a standard for the liquidity classification of assets and liabilities[1]. - The company's reporting currency is Renminbi (RMB), while subsidiaries in Hong Kong, Laos, and Hongfeng Lime Company use US dollars[2]. Accounting Policies - The accounting treatment for business combinations under common control measures the acquired assets and liabilities at their original book value, with adjustments made for differences in accounting policies[3]. - For business combinations not under common control, the acquisition cost is measured at fair value, with any excess recognized as goodwill[4]. - The consolidated financial statements are prepared based on the financial statements of the parent and subsidiaries, eliminating internal transactions and calculating minority interests[4]. - The company confirms its joint ventures and jointly controlled operations by recognizing assets and liabilities held separately or proportionately[7]. - The company’s investment accounting policies are aligned with relevant accounting standards, ensuring accurate recognition of investment income and other comprehensive income[83]. Financial Instruments and Assets - Cash and cash equivalents are defined as cash on hand and deposits that are readily available for payment, with cash equivalents being short-term investments with low risk of value changes[8]. - Foreign currency transactions are recorded at the spot exchange rate at the time of the transaction, with monetary items translated at the month-end rate[9]. - Financial instruments include cash, equity investments (excluding long-term equity investments), trading financial assets, receivables, payables, bank loans, and equity[10]. - Financial assets are classified into three categories based on the business model and cash flow characteristics, affecting their subsequent measurement[12]. - The company measures financial assets at amortized cost using the effective interest method after initial recognition[21]. - Financial liabilities are classified into those measured at fair value with changes recognized in profit or loss, financial guarantee contract liabilities, and those measured at amortized cost[25]. - The company recognizes gains or losses from financial liabilities measured at fair value in profit or loss, excluding those related to hedge accounting[26]. - Impairment losses for financial assets measured at amortized cost are recognized based on expected credit losses, including notes receivable, accounts receivable, and other receivables[39]. - The expected credit loss is calculated as the present value of cash shortfalls, considering the risk of default[40]. - The company assesses whether credit risk has significantly increased since initial recognition to determine the appropriate impairment provision[41]. - Accounts receivable are grouped based on aging and related party status to assess credit risk[46]. - The company uses a combination of individual and group assessments to evaluate credit risk for financial assets[42]. - Financial assets are derecognized when the contractual rights to cash flows have expired or have been transferred[34]. - The company reports financial assets and liabilities separately on the balance sheet without offsetting[33]. - The company measures expected credit losses based on the credit risk characteristics of financial assets, considering historical default loss experience and current economic conditions[50]. - Financial assets are classified into groups based on credit risk characteristics, including low-risk commercial acceptance bills from state-owned enterprises and large state-owned enterprises[50]. - The company recognizes impairment losses for financial assets based on expected credit losses over the entire duration of the asset[53]. Inventory and Fixed Assets - Inventory is classified into categories such as raw materials, work in progress, and finished goods, with valuation methods including weighted average cost and individual cost methods[58]. - The company uses a perpetual inventory system for inventory management[60]. - Long-term equity investments are initially recognized based on the method of acquisition, with costs determined by the fair value of assets transferred and liabilities assumed[64]. - The company assesses impairment of long-term equity investments based on the fair value of identifiable net assets of the acquired entity[65]. - Fixed assets are recognized at cost, with depreciation calculated using the average useful life method and workload method for specific assets[87]. - The depreciation rates for fixed assets vary, with buildings depreciated over 25-30 years at rates of 3.17%-4% and machinery over 10 years at rates of 9.5%-10%[87]. - The company’s construction in progress includes costs related to building or repairing fixed assets, with borrowing costs capitalized until the assets are ready for use[88]. Financial Performance - The company's operating revenue for the first half of 2023 was ¥1,677,757,165.88, a decrease of 13.22% compared to ¥1,933,338,893.97 in the same period last year[132]. - The net profit attributable to shareholders for the first half of 2023 was ¥362,394,129.07, down 25.25% from ¥484,820,771.35 in the previous year[132]. - The net cash flow from operating activities increased by 31.71% to ¥627,070,285.28, compared to ¥476,115,276.98 in the same period last year[132]. - Basic earnings per share for the first half of 2023 were ¥0.2913, a decrease of 25.25% from ¥0.3897 in the previous year[132]. - Total assets at the end of the reporting period were ¥12,524,343,812.61, a decrease of 3.93% from ¥13,036,170,304.55 at the end of the previous year[132]. - The net assets attributable to shareholders at the end of the reporting period were ¥8,346,225,303.43, down 1.31% from ¥8,456,598,624.49 at the end of the previous year[132]. - The company reported a diluted earnings per share of ¥0.2913, reflecting a 25.25% decline compared to the previous year[132]. - The weighted average return on equity for the first half of 2023 was 4.27%, down from 5.93% in the same period last year, a decrease of 1.66%[132]. Market Position and Strategy - The company maintains a leading position in the steel structure market, particularly in power plant steel structures and communication towers[139]. - The company has a strong market presence in the petrochemical energy steel structure and civil steel structure sectors, ranking among the top in the industry[140]. - The company is actively expanding into new markets such as new energy steel structures and industrial storage steel structures[166]. - The company maintains a leading position in the electric power and broadcasting industries, focusing on strategic sectors[171]. - The company has a strong competitive advantage in the potassium fertilizer industry, responding to national strategies by exporting potassium chloride to China[172]. - The company plans to continue focusing on international market expansion and new product development strategies to enhance future growth[197]. Government Subsidies and Non-Recurring Gains - The company received government subsidies amounting to ¥4,807,589.86, which are closely related to its normal business operations[135]. - The total amount of non-recurring gains and losses, after tax effects, was ¥2,866,779.20 - ¥2,504,412.67 = ¥362,366.53[135]. - The company has not identified any other non-recurring gains and losses beyond those reported[137]. Employee Compensation and Expenses - The company’s employee compensation includes various benefits and is recognized as liabilities during the accounting period[142]. - The company’s management expenses increased by 12.44% to approximately ¥57.75 million, reflecting higher operational costs[183]. - The company’s financial expenses decreased significantly by 80.38% to approximately ¥3.48 million, mainly due to increased deposit interest[186]. Potassium Chloride Production - The company’s potassium chloride production reached approximately 320,000 tons, with sales volume around 340,000 tons, achieving a basic balance between production and sales[167]. - The company has a potassium chloride resource reserve of approximately 400 million tons in Laos, indicating a strong resource base for future production[175]. - The company has enhanced its production capacity to 1 million tons of potassium chloride per year, making it the largest Chinese enterprise in Laos in terms of production scale[167]. - The company’s potassium fertilizer products have gained popularity in Southeast Asia since the launch of large particle potassium fertilizer in the second half of 2016[174].