[Definitions](index=5&type=section&id=%E7%AC%AC%E4%B8%80%E8%8A%82%20%E9%87%8A%E4%B9%89) [Definitions of Common Terms](index=5&type=section&id=%E5%B8%B8%E7%94%A8%E8%AF%8D%E8%AF%AD%E9%87%8A%E4%B9%89) This chapter defines common terms and abbreviations used in the report, including company entities, key related parties, business models (EPC, EOD), and financial units, ensuring accurate report interpretation - The reporting period is from **January 1, 2025, to June 30, 2025**[15](index=15&type=chunk) - Defines the company and its various subsidiaries and affiliates, such as Beijing Xinxin, Zhuozhuo Yongye, and Dingrun Jiade[14](index=14&type=chunk) - Explains business models such as **EPC (Engineering, Procurement, and Construction)** and **EOD (Ecological-Oriented Development)**[14](index=14&type=chunk) [Company Profile and Key Financial Indicators](index=6&type=section&id=%E7%AC%AC%E4%BA%8C%E8%8A%82%20%E5%85%AC%E5%8F%B8%E7%AE%80%E4%BB%8B%E5%92%8C%E4%B8%BB%E8%A6%81%E8%B4%A2%E5%8A%A1%E6%8C%87%E6%A0%87) [I. Company Information](index=6&type=section&id=%E4%B8%80%E3%80%81%E5%85%AC%E5%8F%B8%E4%BF%A1%E6%81%AF) This section provides the company's basic registration information, including its Chinese name, abbreviation, foreign name, and legal representative, confirming the full name as Shanghai Taihe Water Technology Development Co., Ltd - The company's Chinese name is Shanghai Taihe Water Technology Development Co., Ltd., abbreviated as **Taihe Water**[16](index=16&type=chunk) - The legal representative is **He Xin**[16](index=16&type=chunk) [II. Contact Person and Information](index=6&type=section&id=%E4%BA%8C%E3%80%81%E8%81%94%E7%B3%BB%E4%BA%BA%E5%92%8C%E8%81%94%E7%B3%BB%E6%96%B9%E5%BC%8F) This section lists the name, contact address, phone, fax, and email of the company's Board Secretary for investor and stakeholder communication - The Board Secretary is **He Yufei**, with the contact address at Lanyun Cultural Center, Lane 899, Panlong Road, Qingpu District, Shanghai[17](index=17&type=chunk) [III. Overview of Basic Information Changes](index=6&type=section&id=%E4%B8%89%E3%80%81%E5%9F%BA%E6%9C%AC%E6%83%85%E5%86%B5%E5%8F%98%E6%9B%B4%E7%AE%80%E4%BB%8B) This section details the company's basic information, including registered address, office address, website, and email, noting no changes during the reporting period - The company's registered address is Room 1957, No. 19, Lane 38, Caoli Road, Fengjing Town, Jinshan District, Shanghai, and its office address is Lanyun Cultural Center, Lane 899, Panlong Road, Qingpu District, Shanghai[18](index=18&type=chunk) - There were **no changes** to the company's basic information during the reporting period[18](index=18&type=chunk) [IV. Overview of Information Disclosure and Document Storage Location Changes](index=6&type=section&id=%E5%9B%9B%E3%80%81%E4%BF%A1%E6%81%AF%E6%8A%AB%E9%9C%B2%E5%8F%8A%E5%A4%87%E7%BD%AE%E5%9C%B0%E7%82%B9%E5%8F%98%E6%9B%B4%E6%83%85%E5%86%B5%E7%AE%80%E4%BB%8B) This section discloses the company's selected information disclosure newspapers, the website for semi-annual reports, and the report storage location, confirming no changes during the reporting period - The company's information disclosure newspapers include **"China Securities Journal"** and **"Shanghai Securities News"**, with reports published on **http://www.sse.com.cn**[19](index=19&type=chunk) - There were **no changes** to information disclosure and document storage locations during the reporting period[19](index=19&type=chunk) [V. Company Stock Overview](index=6&type=section&id=%E4%BA%94%E3%80%81%E5%85%AC%E5%8F%B8%E8%82%A1%E7%A5%A8%E7%AE%80%E5%86%B5) This section provides the company's stock exchange, stock abbreviation, stock code, and previous abbreviation, clarifying that the company's stock has been subject to delisting risk warning - The company's stock type is **A-shares**, listed on the **Shanghai Stock Exchange**, with stock abbreviation **"*ST Taihe"** and stock code **605081**, previously **"Taihe Water"**[20](index=20&type=chunk) [VII. Key Accounting Data and Financial Indicators](index=7&type=section&id=%E4%B8%83%E3%80%81%E5%85%AC%E5%8F%B8%E4%B8%BB%E8%A6%81%E4%BC%9A%E8%AE%A1%E6%95%B0%E6%8D%AE%E5%92%8C%E8%B4%A2%E5%8A%A1%E6%8C%87%E6%A0%87) This section presents the company's key accounting data and financial indicators for H1 2025, showing significant year-on-year declines in operating revenue and net profit, and reductions in total assets and net assets, primarily due to macroeconomic factors and bad debt provisions Key Accounting Data (H1 2025 vs. Prior Year Period) | Key Accounting Data | Current Period (Jan-Jun) (CNY) | Prior Year Period (CNY) | Change from Prior Year Period (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 33,050,870.88 | 75,145,432.78 | -56.02 | | Total Profit | -55,935,657.19 | -19,780,222.02 | -182.79 | | Net Profit Attributable to Shareholders of Listed Company | -57,076,621.40 | -19,964,410.37 | -185.89 | | Net Profit Attributable to Shareholders of Listed Company (Excluding Non-Recurring Items) | -53,098,238.89 | -18,299,209.09 | -190.17 | | Net Cash Flow from Operating Activities | -39,341,583.81 | -39,187,976.49 | -0.39 | | **Current Period End vs. Prior Year End** | | | | | Net Assets Attributable to Shareholders of Listed Company | 917,491,743.73 | 974,568,365.13 | -5.86 | | Total Assets | 1,342,393,178.73 | 1,525,768,444.25 | -12.02 | Key Financial Indicators (H1 2025 vs. Prior Year Period) | Key Financial Indicators | Current Period (Jan-Jun) | Prior Year Period | Change from Prior Year Period (%) | | :--- | :--- | :--- | :--- | | Basic Earnings Per Share (Yuan/share) | -0.50 | -0.18 | -177.78 | | Diluted Earnings Per Share (Yuan/share) | -0.50 | -0.18 | -177.78 | | Basic Earnings Per Share (Excluding Non-Recurring Items) (Yuan/share) | -0.47 | -0.16 | -193.75 | | Weighted Average Return on Net Assets (%) | -6.03 | -1.54 | Decrease by 4.49 percentage points | | Weighted Average Return on Net Assets (Excluding Non-Recurring Items) (%) | -5.61 | -1.41 | Decrease by 4.2 percentage points | - Operating revenue **decreased by 56.02% year-on-year**, primarily due to macroeconomic environment impacts and fewer new engineering projects[23](index=23&type=chunk) - Net profit attributable to shareholders of the listed company and net profit excluding non-recurring items **declined**, mainly due to decreased revenue and bad debt provisions for credit losses[23](index=23&type=chunk) [(I) Key Accounting Data](index=7&type=section&id=(I).%20Key%20Accounting%20Data) This section details the company's H1 2025 key accounting data, including operating revenue, total profit, net profit, net cash flow from operating activities, net assets, and total assets, comparing them to the prior year, revealing significant financial deterioration Key Accounting Data (H1 2025 vs. Prior Year Period) | Key Accounting Data | Current Period (Jan-Jun) (CNY) | Prior Year Period (CNY) | Change from Prior Year Period (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 33,050,870.88 | 75,145,432.78 | -56.02 | | Total Profit | -55,935,657.19 | -19,780,222.02 | -182.79 | | Net Profit Attributable to Shareholders of Listed Company | -57,076,621.40 | -19,964,410.37 | -185.89 | | Net Profit Attributable to Shareholders of Listed Company (Excluding Non-Recurring Items) | -53,098,238.89 | -18,299,209.09 | -190.17 | | Net Cash Flow from Operating Activities | -39,341,583.81 | -39,187,976.49 | -0.39 | | **Current Period End vs. Prior Year End** | | | | | Net Assets Attributable to Shareholders of Listed Company | 917,491,743.73 | 974,568,365.13 | -5.86 | | Total Assets | 1,342,393,178.73 | 1,525,768,444.25 | -12.02 | [(II) Key Financial Indicators](index=7&type=section&id=(II).%20Key%20Financial%20Indicators) This section lists the company's H1 2025 key financial indicators, including basic EPS, diluted EPS, basic EPS excluding non-recurring items, and weighted average ROE, all showing a deteriorating trend, reflecting a severe decline in profitability Key Financial Indicators (H1 2025 vs. Prior Year Period) | Key Financial Indicators | Current Period (Jan-Jun) | Prior Year Period | Change from Prior Year Period (%) | | :--- | :--- | :--- | :--- | | Basic Earnings Per Share (Yuan/share) | -0.50 | -0.18 | -177.78 | | Diluted Earnings Per Share (Yuan/share) | -0.50 | -0.18 | -177.78 | | Basic Earnings Per Share (Excluding Non-Recurring Items) (Yuan/share) | -0.47 | -0.16 | -193.75 | | Weighted Average Return on Net Assets (%) | -6.03 | -1.54 | Decrease by 4.49 percentage points | | Weighted Average Return on Net Assets (Excluding Non-Recurring Items) (%) | -5.61 | -1.41 | Decrease by 4.2 percentage points | - Basic earnings per share and basic earnings per share excluding non-recurring items **decreased**, primarily due to lower revenue and bad debt provisions for credit losses[24](index=24&type=chunk) [IX. Non-Recurring Gains and Losses Items and Amounts](index=7&type=section&id=IX.%20Non-Recurring%20Gains%20and%20Losses%20Items%20and%20Amounts) This section lists the company's H1 2025 non-recurring gains and losses items and their amounts, totaling **-3,978,382.51 Yuan**, primarily including non-current asset disposal gains/losses, government subsidies, fair value change gains/losses, and other non-operating income/expenses Non-Recurring Gains and Losses Items and Amounts (H1 2025) | Non-Recurring Gains and Losses Items | Amount (CNY) | | :--- | :--- | | Gains or losses from disposal of non-current assets | -38,510.83 | | Government grants recognized in current profit or loss | 504,039.92 | | Gains or losses from changes in fair value of financial assets and liabilities held by non-financial enterprises, and gains or losses from disposal of financial assets and liabilities | -2,765,457.78 | | Reversal of impairment provisions for accounts receivable subject to separate impairment testing | 795,433.74 | | Other non-operating income and expenses apart from the above | -2,497,069.79 | | Other gains and losses that meet the definition of non-recurring items | 47,573.51 | | Less: Income tax impact | -8,870.86 | | Minority interest impact (after tax) | 33,262.14 | | Total | -3,978,382.51 | [Management Discussion and Analysis](index=9&type=section&id=%E7%AC%AC%E4%B8%89%E8%8A%82%20%E7%AE%A1%E7%90%86%E5%B1%82%E8%AE%A8%E8%AE%BA%E4%B8%8E%E5%88%86%E6%9E%90) [I. Industry and Main Business Overview During the Reporting Period](index=9&type=section&id=I.%20Industry%20and%20Main%20Business%20Overview%20During%20the%20Reporting%20Period) This section details the opportunities and challenges in the water environment governance industry, along with the company's operational strategies and development in its core water ecological restoration and drinking water businesses. The industry benefits from national policy support but faces macroeconomic downturn and intensified market competition. The company adheres to a "preserve existing, increase new, seek change" strategy, deepening technology in water ecological restoration and expanding products and channels in drinking water - The water environment governance industry is supported by national ecological civilization policies but faces multiple challenges, including global economic uncertainty, domestic economic restructuring, local fiscal pressure, and intensified market competition[30](index=30&type=chunk)[31](index=31&type=chunk) - The company adheres to a **"preserve existing, increase new, seek change"** development strategy, focusing on water ecological restoration and the big health consumer sector[32](index=32&type=chunk) - The company's core technology for water ecological restoration is the **"algae-eating insect-guided eutrophic water ecological restoration method"**, building a stable ecosystem through algae-eating insects, submerged plants, and aquatic animals[33](index=33&type=chunk) - The drinking water business centers on **Heilongjiang Baiquan natural soda water**, offering products like **390ml, 520ml, 4.5L, and pH 8.8**, expanding online sales via Taobao, Douyin, Pinduoduo, WeChat mini-programs, and JD.com, while actively pursuing OEM collaborations and unmanned retail cabinet locations[35](index=35&type=chunk)[37](index=37&type=chunk) [(I) Industry Situation During the Reporting Period](index=9&type=section&id=(I).%20Industry%20Situation%20During%20the%20Reporting%20Period) The water environment governance industry receives policy support under national ecological civilization initiatives, but macroeconomic uncertainty, local fiscal pressures, and intensifying market competition pose challenges, requiring continuous technological innovation to meet demand - National policies such as the **"14th Five-Year Plan"** and **"Opinions on Comprehensively Promoting the Construction of Beautiful China"** provide development opportunities for the water environment governance industry[30](index=30&type=chunk) - The industry faces challenges including global economic growth uncertainty, domestic economic restructuring, local government fiscal pressure, and intensified market competition[31](index=31&type=chunk) - **Technological innovation** is key to industry development, with urgent market demand for efficient, green, and sustainable governance technologies[31](index=31&type=chunk) [(II) Company's Business Operations During the Reporting Period](index=9&type=section&id=(II).%20Company's%20Business%20Operations%20During%20the%20Reporting%20Period) The company's business is divided into water environment ecological construction and maintenance, and drinking water sales. The water environment business centers on "algae-eating insect" technology to build stable underwater ecosystems. The drinking water business features natural soda water, expanding market reach through multiple online and offline channels, and plans to focus on customized water and unmanned retail - The company's water environment ecological construction and maintenance business focuses on improving eutrophic water environments through bio-ecological synergy technology, covering lakes, urban rivers, and landscape waters[33](index=33&type=chunk) - The core technical route is the **"algae-eating insect-guided eutrophic water ecological restoration method"**, utilizing algae-eating insects to consume algae and detritus, and building a stable underwater forest system with submerged plants and photosynthetic bacteria[33](index=33&type=chunk) - The main product of the drinking water business is **"TAIHESHUI" natural soda water**, sourced from the Heilongjiang Baiquan Natural Soda Water Protection Area, characterized by its natural weak alkalinity with a **pH value ≥ 8.5**[35](index=35&type=chunk)[37](index=37&type=chunk) - Online channels for drinking water have been strengthened on Taobao, Douyin, and Pinduoduo, with new additions including WeChat mini-programs and JD.com's self-operated platform; offline channels are expanding through OEM collaborations and market promotion[37](index=37&type=chunk) [1. Water Environment Ecological Construction and Maintenance Business](index=9&type=section&id=1.%20Water%20Environment%20Ecological%20Construction%20and%20Maintenance%20Business) The company is an innovative practitioner in water environment ecological restoration, improving water bodies through the "algae-eating insect-guided eutrophic water ecological restoration method" to build stable insect-plant symbiotic aquatic ecosystems, achieving water self-purification - The company specializes in improving eutrophic water environments through bio-ecological synergy technology, with business covering lakes, urban rivers, and landscape waters[33](index=33&type=chunk) - The core technology uses **"algae-eating insects"** as a pioneer species, effectively reducing algae and detritus, and improving water transparency[33](index=33&type=chunk) - By planting submerged plants, introducing photosynthetic bacteria, and other aquatic animals, a stable underwater forest system centered on submerged plants is built, forming an **insect-plant symbiotic aquatic ecosystem**[33](index=33&type=chunk) [2. Drinking Water Business](index=10&type=section&id=2.%20Drinking%20Water%20Business) The company's drinking water business centers on Heilongjiang Baiquan natural soda water, with a rich product line, expanding market reach through multiple online platforms and offline OEM collaborations, and plans to focus on customized water and unmanned retail in the future - Natural soda water produced by wholly-owned subsidiary Heilongjiang Haihe Beverage Co., Ltd. originates from the **natural soda water protection area in western Baiquan County, Qiqihar City, Heilongjiang Province**, featuring pure and transparent water quality rich in various beneficial trace elements[35](index=35&type=chunk) - The **"TAIHESHUI"** brand currently offers four classic products: **390ml, 520ml, 4.5L, and pH 8.8**, meeting diverse consumption needs[37](index=37&type=chunk) - Online channels have expanded to **Taobao Tmall flagship store, Douyin enterprise store, Pinduoduo store**, and newly added **WeChat mini-programs and JD.com's self-operated platform**, while offline channels engage in OEM collaborations with multiple enterprises[37](index=37&type=chunk) - Future strategy will focus on **customized water services** and actively expand into emerging channels such as **unmanned retail cabinet locations**[37](index=37&type=chunk) [II. Discussion and Analysis of Operations](index=12&type=section&id=II.%20Discussion%20and%20Analysis%20of%20Operations) During the reporting period, the company's operating performance was affected by macroeconomic conditions, industrial policies, market competition, and local fiscal factors, leading to a significant decline in new orders and operating revenue, and an expanded net loss. The company will continue to focus on its core water ecological governance business, strengthening technology R&D and operational management to address challenges - The company's operating revenue was **CNY 33.05 million**, a **56.02% year-on-year decrease**; net profit attributable to shareholders of the listed company was **-CNY 57.08 million**, a **185.89% year-on-year decrease**[38](index=38&type=chunk) - The decline in performance was primarily due to complex macroeconomic conditions, industry policy adjustments, intense market competition, and poor local fiscal conditions, resulting in lower-than-expected new orders and extended collection cycles[38](index=38&type=chunk) - The company's core customers are mostly local governments and large private enterprise groups, and the economic downturn has led to difficulties in customer capital turnover and increased collection challenges[38](index=38&type=chunk) - The company will adhere to its core business positioning in water ecological governance, strengthen technology R&D and service capability building, optimize business layout, and enhance operational management[38](index=38&type=chunk) [III. Analysis of Core Competitiveness During the Reporting Period](index=12&type=section&id=III.%20Analysis%20of%20Core%20Competitiveness%20During%20the%20Reporting%20Period) The company's core competitiveness lies in its unique technological advantages, industry brand recognition, independent cultivation capabilities for core materials, and natural soda water source advantages. Specifically, the "eutrophic water ecological restoration method" and improved Vallisneria spiralis technology have been recognized by institutions such as the Ministry of Water Resources, providing stable support for business expansion - The company possesses a core technology system based on its independently developed **"eutrophic water ecological restoration method"**, including **8 water ecological element construction methods (12 domestic invention patents)** and **72 utility model patents**[39](index=39&type=chunk) - Domesticated algae-eating insects effectively consume algae and detritus, improving water transparency; improved submerged plants (evergreen dwarf Vallisneria spiralis and improved spiny Vallisneria spiralis) offer advantages such as **non-flowering, low/high temperature resistance, efficient nitrogen and phosphorus absorption**, and asexual reproduction[39](index=39&type=chunk)[40](index=40&type=chunk) - The company's established **insect-plant symbiotic system** offers advantages such as ecological energy saving, significant effects, lower costs, long-lasting action, and wide applicability[41](index=41&type=chunk) - The company has gained recognition from institutions such as the Ministry of Water Resources for its technological advantages, including being selected for the **"Xiong'an New Area Water Resource Guarantee Capacity Technical Support Recommended Shortlist"** as both **Category A and Category B technologies**[42](index=42&type=chunk) - Core materials (algae-eating insects, Vallisneria spiralis, and microorganisms) are cultivated independently, with standardized breeding bases established in multiple regions nationwide to ensure material quality and supply[43](index=43&type=chunk) - The soda water business relies on the **Heilongjiang Baiquan County Natural Soda Water Protection Area**, where the water source is weakly alkaline small-molecule cluster water, rich in various trace elements[44](index=44&type=chunk) [1. Technological Advantages](index=12&type=section&id=1.%20Technological%20Advantages) The company possesses a core technology system in water environment ecological governance, including the "eutrophic water ecological restoration method" and multiple patents, building efficient and stable insect-plant symbiotic aquatic ecosystems through domesticated algae-eating insects and improved submerged plants (e.g., Vallisneria spiralis) to achieve water self-purification - The company has built a full-chain technology system centered on its independently developed **"eutrophic water ecological restoration method"**, covering biological regulation, ecological restoration, and long-term maintenance, holding **8 water ecological element construction methods (12 domestic invention patents)** and **72 utility model patents**[39](index=39&type=chunk) - Domesticated algae-eating insects feed on blue-green algae, detritus, suspended particles, and harmful bacteria, effectively reducing algae in water bodies and improving water transparency[39](index=39&type=chunk) - The improved Vallisneria spiralis has advantages such as **non-flowering, seedless, dwarf, low/high temperature resistance, salt tolerance, and evergreen throughout the seasons**, efficiently absorbing nitrogen and phosphorus nutrients, producing nascent oxygen, and achieving asexual reproduction[40](index=40&type=chunk) - By introducing, adjusting, and perfecting algae-eating insects, submerged plants, and other aquatic organisms, a stable **insect-plant symbiotic aquatic ecosystem** is formed, enabling self-purification of eutrophic water bodies[41](index=41&type=chunk) [2. Brand Advantages](index=13&type=section&id=2.%20Brand%20Advantages) The company has established a professional advantage in water ecological restoration and construction through its core technology system, gaining recognition from institutions such as the Ministry of Water Resources, thereby enhancing its market reputation National Institutional Recognition | No. | Recognition Status | Year of Recognition | Evaluating Unit | Content of Recognition | | :--- | :--- | :--- | :--- | :--- | | 1 | "Water Ecological Field" Category A (Cutting-edge Leading) Technology in "Xiong'an New Area Water Resource Guarantee Capacity Technical Support Recommended Shortlist" | 2019 | Science and Technology Promotion Center of Ministry of Water Resources, Haihe River Water Conservancy Commission of Ministry of Water Resources, China Water Resources and Hydropower Planning and Design General Institute of Ministry of Water Resources, China International Engineering Consulting Corporation | Lake and reservoir governance technology solutions combined with wetland governance and industrial adjustment models | | 2 | "Water Ecological Field" Category B (Mature and Practical) Technology in "Xiong'an New Area Water Resource Guarantee Capacity Technical Support Recommended Shortlist" | 2019 | Science and Technology Promotion Center of Ministry of Water Resources, Haihe River Water Conservancy Commission of Ministry of Water Resources, China Water Resources and Hydropower Planning and Design General Institute of Ministry of Water Resources, China International Engineering Consulting Corporation | Algae-eating insect-guided water body ecological restoration technology | [3. Advantages of Independent Cultivation of Core Materials](index=13&type=section&id=3.%20Advantages%20of%20Independent%20Cultivation%20of%20Core%20Materials) The company acquires core materials (algae-eating insects, Vallisneria spiralis, microorganisms, etc.) through independent cultivation, establishing standardized breeding bases in multiple regions nationwide to ensure stable material quality and meet project demands, thereby supporting rapid business expansion - The core materials required for the company's business (algae-eating insects, Vallisneria spiralis, and microorganisms) are obtained through **independent cultivation**[43](index=43&type=chunk) - Standardized breeding bases are established in multiple regions nationwide to ensure stable material quality and meet project demands in different areas[43](index=43&type=chunk) [4. Soda Water Source Advantages](index=13&type=section&id=4.%20Soda%20Water%20Source%20Advantages) The core advantage of the company's drinking water business lies in its natural soda water source, originating from the Heilongjiang Baiquan County Natural Soda Water Protection Area, featuring pure water quality, rich in trace elements, and characterized by weakly alkaline small-molecule cluster water - The company relies on the **Heilongjiang Baiquan County Natural Soda Water Protection Area** to build its core barrier[44](index=44&type=chunk) - The water source is naturally filtered through deep rock layers, forming **weakly alkaline small-molecule cluster water**, rich in various trace elements, which helps neutralize the body's acidic environment and promote metabolism and absorption[44](index=44&type=chunk) [IV. Major Operating Conditions During the Reporting Period](index=14&type=section&id=IV.%20Major%20Operating%20Conditions%20During%20the%20Reporting%20Period) During the reporting period, the company's operations were affected by multiple unfavorable factors, leading to significant declines in operating revenue and profit. The asset and liability structure changed significantly, with decreases in cash, accounts receivable, and accounts payable, and increases in prepayments and other receivables. Investment-wise, the amount of investment increased substantially, mainly due to equity acquisitions, while financial assets measured at fair value decreased. The company also established and deregistered several subsidiaries - Operating revenue **decreased by 56.02% year-on-year**, primarily due to the macroeconomic environment and declining demand in the water environment governance industry, leading to fewer new orders[46](index=46&type=chunk) - Total profit and net profit attributable to shareholders of the listed company **declined significantly**, mainly due to decreased revenue and bad debt provisions for credit losses[22](index=22&type=chunk)[23](index=23&type=chunk) - Cash and bank balances at period-end **decreased by 42.89%** compared to the beginning of the period, primarily due to payments for goods and services in the current period[50](index=50&type=chunk) - Prepayments at period-end **increased by 194.42%** compared to the beginning of the period, primarily due to increased prepayments to suppliers in the current period[51](index=51&type=chunk) - Investment amount during the reporting period was **CNY 25.755 million**, a **100.00% year-on-year increase**, mainly for equity investments[55](index=55&type=chunk) - Financial assets measured at fair value had a period-end balance of **CNY 71,862,242.22**, a **3.71% decrease** from the beginning of the period, mainly due to fair value change losses of **-CNY 2,765,457.78** on stock investments[57](index=57&type=chunk) - During the reporting period, **Shanghai Yunlan Technology Development Co., Ltd.** and **Beijing Ranjing Technology Co., Ltd.** were newly established, while **Guangdong Taihe Water Environment Technology Co., Ltd., Jiangxi Taihe Water Environment Technology Development Co., Ltd., and Chongren County Bahe Ecological Technology Co., Ltd.** were deregistered[63](index=63&type=chunk) [(I) Main Business Analysis](index=14&type=section&id=(I).%20Main%20Business%20Analysis) This section analyzes changes in the company's main business financial statement items, showing decreases in both operating revenue and cost, reduced selling and R&D expenses, and increased administrative and financial expenses, reflecting declining market demand, intensified competition, and shifts in internal cost structure Financial Statement Items Change Analysis Table (H1 2025 vs. Prior Year Period) | Item | Current Period (CNY) | Prior Year Period (CNY) | Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 33,050,870.88 | 75,145,432.78 | -56.02 | | Operating Cost | 35,165,993.27 | 43,611,747.23 | -19.37 | | Selling Expenses | 6,970,422.56 | 10,201,714.87 | -31.67 | | Administrative Expenses | 42,322,641.77 | 36,681,849.10 | 15.38 | | Financial Expenses | 1,799,019.82 | -858,514.64 | 309.55 | | R&D Expenses | 3,317,885.57 | 4,543,507.27 | -26.98 | | Net Cash Flow from Operating Activities | -39,341,583.81 | -39,187,976.49 | -0.39 | | Net Cash Flow from Investing Activities | -37,680,495.68 | 32,473,149.23 | -216.04 | | Net Cash Flow from Financing Activities | -2,982,059.85 | -3,102,795.35 | 3.89 | - Operating revenue **decreased by 56.02%**, primarily due to the macroeconomic environment and declining demand in the water environment governance industry, leading to fewer new orders[46](index=46&type=chunk) - Administrative expenses **increased by 15.38%**, mainly due to higher depreciation expenses and employee compensation[47](index=47&type=chunk) - Financial expenses **increased by 309.55%**, primarily due to decreased interest income and increased amortization of unrecognized financing expenses[47](index=47&type=chunk) [1. Analysis Table of Changes in Financial Statement Items](index=14&type=section&id=1.%20Analysis%20Table%20of%20Changes%20in%20Financial%20Statement%20Items) This section presents a detailed table of the company's main financial statement items, including current period figures, prior year figures, and change percentages, with explanations for each variation, revealing significant shifts in revenue, profit, expenses, and cash flow Financial Statement Items Change Analysis Table (H1 2025 vs. Prior Year Period) | Item | Current Period (CNY) | Prior Year Period (CNY) | Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 33,050,870.88 | 75,145,432.78 | -56.02 | | Operating Cost | 35,165,993.27 | 43,611,747.23 | -19.37 | | Selling Expenses | 6,970,422.56 | 10,201,714.87 | -31.67 | | Administrative Expenses | 42,322,641.77 | 36,681,849.10 | 15.38 | | Financial Expenses | 1,799,019.82 | -858,514.64 | 309.55 | | R&D Expenses | 3,317,885.57 | 4,543,507.27 | -26.98 | | Net Cash Flow from Operating Activities | -39,341,583.81 | -39,187,976.49 | -0.39 | | Net Cash Flow from Investing Activities | -37,680,495.68 | 32,473,149.23 | -216.04 | | Net Cash Flow from Financing Activities | -2,982,059.85 | -3,102,795.35 | 3.89 | - Net cash flow from investing activities **changed by -216.04%**, primarily due to the recovery of time deposits and investment income in the prior year period[47](index=47&type=chunk) [(III) Analysis of Assets and Liabilities](index=14&type=section&id=(III).%20Analysis%20of%20Assets%20and%20Liabilities) This section analyzes changes in the company's period-end assets and liabilities. Cash, accounts receivable, and accounts payable significantly decreased, while prepayments, other receivables, productive biological assets, and right-of-use assets substantially increased, reflecting adjustments in the company's procurement, capital turnover, and asset structure Changes in Assets and Liabilities (Period-End vs. Prior Year-End) | Item Name | Current Period End (CNY) | % of Total Assets (Current Period End) | Prior Year End (CNY) | % of Total Assets (Prior Year End) | Change from Prior Year End (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Cash and Bank Balances | 107,488,785.91 | 8.01 | 188,229,802.82 | 12.34 | -42.89 | | Accounts Receivable | 415,508,074.27 | 30.95 | 585,085,036.52 | 38.35 | -28.98 | | Prepayments | 2,083,763.42 | 0.16 | 707,761.69 | 0.05 | 194.42 | | Other Receivables | 23,083,335.51 | 1.72 | 7,786,713.79 | 0.51 | 196.45 | | Productive Biological Assets | 6,073,504.79 | 0.45 | 3,916,475.31 | 0.26 | 55.08 | | Right-of-Use Assets | 71,041,102.60 | 5.29 | 51,399,407.48 | 3.37 | 38.21 | | Accounts Payable | 155,052,038.53 | 11.55 | 277,668,105.29 | 18.20 | -44.16 | | Other Payables | 20,040,427.02 | 1.49 | 9,493,117.66 | 0.62 | 111.10 | - Cash and bank balances at period-end **decreased by 42.89%** compared to the beginning of the period, primarily due to payments for goods and services in the current period[50](index=50&type=chunk) - Prepayments at period-end **increased by 194.42%** compared to the beginning of the period, primarily due to increased prepayments to suppliers in the current period[51](index=51&type=chunk) - Other receivables at period-end **increased by 196.45%** compared to the beginning of the period, primarily due to employee advances for petty cash in the current period[53](index=53&type=chunk) - Accounts payable at period-end **decreased by 44.16%** compared to the beginning of the period, primarily due to payments for materials in the current period[53](index=53&type=chunk) [1. Asset and Liability Status](index=15&type=section&id=1.%20Asset%20and%20Liability%20Status) This section details the company's period-end asset and liability book values, their proportion of total assets, and their change percentages from the prior year-end, with explanations for major variations, reflecting dynamic shifts in the company's asset and liability structure Changes in Assets and Liabilities (Period-End vs. Prior Year-End) | Item Name | Current Period End (CNY) | % of Total Assets (Current Period End) | Prior Year End (CNY) | % of Total Assets (Prior Year End) | Change from Prior Year End (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Cash and Bank Balances | 107,488,785.91 | 8.01 | 188,229,802.82 | 12.34 | -42.89 | | Notes Receivable | 3,490,938.26 | 0.26 | 3,849,746.48 | 0.25 | -9.32 | | Accounts Receivable | 415,508,074.27 | 30.95 | 585,085,036.52 | 38.35 | -28.98 | | Prepayments | 2,083,763.42 | 0.16 | 707,761.69 | 0.05 | 194.42 | | Other Receivables | 23,083,335.51 | 1.72 | 7,786,713.79 | 0.51 | 196.45 | | Inventories | 123,083,275.34 | 9.17 | 104,224,698.45 | 6.83 | 18.09 | | Contract Assets | 113,664,887.14 | 8.47 | 127,825,409.74 | 8.38 | -11.08 | | Non-current Assets Due Within One Year | 1,411,373.71 | 0.11 | 1,758,936.40 | 0.12 | -19.76 | | Other Current Assets | 14,210,384.95 | 1.06 | 9,736,514.47 | 0.64 | 45.95 | | Long-term Receivables | 1,457,302.55 | 0.11 | 1,400,180.21 | 0.09 | 4.08 | | Other Non-current Financial Assets | 71,862,242.22 | 5.35 | 74,627,700.00 | 4.89 | -3.71 | | Fixed Assets | 292,372,132.50 | 21.78 | 243,741,087.57 | 15.97 | 19.95 | | Construction in Progress | 34,545,424.30 | 2.57 | 56,275,764.61 | 3.69 | -38.61 | | Productive Biological Assets | 6,073,504.79 | 0.45 | 3,916,475.31 | 0.26 | 55.08 | | Right-of-Use Assets | 71,041,102.60 | 5.29 | 51,399,407.48 | 3.37 | 38.21 | | Intangible Assets | 25,890,690.71 | 1.93 | 26,296,096.63 | 1.72 | -1.54 | | Goodwill | 12,999,819.89 | 0.97 | 11,379,373.17 | 0.75 | 14.24 | | Long-term Deferred Expenses | 12,573,822.03 | 0.94 | 15,018,712.14 | 0.98 | -16.28 | | Deferred Income Tax Assets | 8,601,412.63 | 0.64 | 10,297,766.77 | 0.67 | -16.47 | | Other Non-current Assets | 950,906.00 | 0.07 | 2,211,260.00 | 0.14 | -57.00 | | Short-term Borrowings | 26,204,055.56 | 1.95 | 28,958,277.78 | 1.90 | -9.51 | | Accounts Payable | 155,052,038.53 | 11.55 | 277,668,105.29 | 18.20 | -44.16 | | Contract Liabilities | 24,314,107.25 | 1.81 | 31,870,270.64 | 2.09 | -23.71 | | Employee Benefits Payable | 5,382,611.20 | 0.40 | 13,728,625.70 | 0.90 | -60.79 | | Taxes Payable | 72,723,803.15 | 5.42 | 75,071,570.26 | 4.92 | -3.13 | | Other Payables | 20,040,427.02 | 1.49 | 9,493,117.66 | 0.62 | 111.10 | | Non-current Liabilities Due Within One Year | 22,689,227.92 | 1.69 | 20,382,488.41 | 1.34 | 11.32 | | Other Current Liabilities | 14,822,881.08 | 1.10 | 18,578,821.21 | 1.22 | -20.22 | | Lease Liabilities | 54,373,502.41 | 4.05 | 49,283,431.31 | 3.23 | 10.33 | | Provisions | 10,221,588.59 | 0.76 | 10,949,283.27 | 0.72 | -6.65 | | Deferred Income Tax Liabilities | 11,492,295.72 | 0.86 | 10,446,434.41 | 0.68 | 10.01 | | Other Non-current Liabilities | 6,895,734.51 | 0.51 | 6,895,734.51 | 0.45 | 0.00 | [(IV) Analysis of Investment Status](index=16&type=section&id=(IV).%20Analysis%20of%20Investment%20Status) During the reporting period, the company's external equity investment amount significantly increased, primarily through acquisitions, including Beijing Zhongke Yanyun Technology Co., Ltd., Heilongjiang Haihe Beverage Co., Ltd., and Nanchang Zhongchun Agricultural Technology Co., Ltd. Concurrently, the period-end balance of financial assets measured at fair value (stocks and private equity funds) decreased, with stock investments incurring fair value change losses Changes in Investment Amount During the Reporting Period | Investment Amount During Reporting Period (CNY 10,000) | Investment Amount in Prior Year Period (CNY 10,000) | Change (%) | | :--- | :--- | :--- | | 2,575.50 | 0.00 | 100.00% | - Significant equity investments during the reporting period included the acquisition of **55% equity in Beijing Zhongke Yanyun Technology Co., Ltd. (CNY 22 million)**, **100% equity in Heilongjiang Haihe Beverage Co., Ltd. (CNY 66 million)**, and **85% equity in Nanchang Zhongchun Agricultural Technology Co., Ltd. (CNY 25.755 million)**[56](index=56&type=chunk) Financial Assets Measured at Fair Value (Period-End vs. Period-Beginning) | Asset Category | Period-Beginning Balance (CNY) | Fair Value Change Gains/Losses for Current Period (CNY) | Period-End Balance (CNY) | | :--- | :--- | :--- | :--- | | Stocks | 23,189,700.00 | -2,765,457.78 | 20,424,242.22 | | Private Equity Funds | 51,438,000.00 | | 51,438,000.00 | | Total | 74,627,700.00 | -2,765,457.78 | 71,862,242.22 | - The company holds **4.83% equity in Guoyue Jun'an No. 4 (Taizhou) Equity Investment Partnership (Limited Partnership)**, **21.28% equity in Jiaxing Xiaoxiang Equity Investment Partnership (Limited Partnership)**, and shares in the **Ziyang Airport Economic Zone Industrial New City PPP Private Equity Investment Fund**[59](index=59&type=chunk) [1. Overall Analysis of External Equity Investments](index=16&type=section&id=1.%20Overall%20Analysis%20of%20External%20Equity%20Investments) During the reporting period, the company's external equity investment amount significantly increased, reaching **CNY 25.755 million**, a **100% increase** from the prior year, indicating a notable rise in the company's investment and M&A activity Changes in Investment Amount During the Reporting Period | Investment Amount During Reporting Period (CNY 10,000) | Investment Amount in Prior Year Period (CNY 10,000) | Change (%) | | :--- | :--- | :--- | | 2,575.50 | 0.00 | 100.00% | [(1). Significant Equity Investments](index=17&type=section&id=(1).%20Significant%20Equity%20Investments) The company made several significant equity investments during the reporting period, including acquiring **55% equity in Beijing Zhongke Yanyun Technology Co., Ltd.**, **100% equity in Heilongjiang Haihe Beverage Co., Ltd.**, and **85% equity in Nanchang Zhongchun Agricultural

Important Notices, Table of Contents, and Definitions [Important Notices](index=2&type=section&id=%E9%87%8D%E8%A6%81%E6%8F%90%E7%A4%BA) The company's management guarantees the truthfulness, accuracy, and completeness of the semi-annual report and assumes legal responsibility - The company's Board of Directors, Supervisory Committee, and senior management guarantee the truthfulness, accuracy, and completeness of the semi-annual report and assume legal responsibility[4](index=4&type=chunk) - The company's person in charge, He Guoying, the person in charge of accounting, Liu Suxia, and the head of the accounting department, Sun Yanping, declare that the financial report in this semi-annual report is true, accurate, and complete[4](index=4&type=chunk) - The company **does not plan to distribute cash dividends, issue bonus shares, or convert capital reserves into share capital**[5](index=5&type=chunk) [Table of Contents](index=3&type=section&id=%E7%9B%AE%E5%BD%95) This section lists the overall structure of the report, including major chapters and their starting page numbers [List of Documents for Inspection](index=4&type=section&id=%E5%A4%87%E6%9F%A5%E6%96%87%E4%BB%B6%E7%9B%AE%E5%BD%95) This section specifies the types and locations of the company's reference documents during the reporting period - The reference documents include financial statements signed and sealed by the legal representative, the person in charge of accounting, and the head of the accounting department[9](index=9&type=chunk) - The reference documents include the original audit report sealed by the accounting firm and signed and sealed by the certified public accountants[10](index=10&type=chunk) - The location for the above documents is the company's Securities Affairs Department[12](index=12&type=chunk) [Definitions](index=4&type=section&id=%E9%87%8A%E4%B9%89) This section provides definitions of frequently used terms in the report to ensure accurate understanding - "Company, This Company, Parent Company, Huasi Shares" refers to Huasi Holdings Co, Ltd[14](index=14&type=chunk) - "Reporting Period" refers to the period from January 1, 2025, to June 30, 2025[14](index=14&type=chunk) - Definitions for multiple subsidiaries and affiliated companies are listed, such as Beijing Garment Company, Jingnan Fur City, and Ruiling Group Co, Ltd[14](index=14&type=chunk) Company Profile and Key Financial Indicators [Company Profile](index=6&type=section&id=%E4%B8%80%E3%80%81%E5%85%AC%E5%8F%B8%E7%AE%80%E4%BB%8B) Huasi Holdings Co, Ltd, stock code 002494, is listed on the Shenzhen Stock Exchange with He Guoying as the legal representative Company Basic Information | Indicator | Content | | :--- | :--- | | Stock Abbreviation | Huasi Shares | | Stock Code | 002494 | | Listing Stock Exchange | Shenzhen Stock Exchange | | Chinese Name | 华斯控股股份有限公司 | | Legal Representative | He Guoying | [Contact Persons and Methods](index=6&type=section&id=%E4%BA%8C%E3%80%81%E8%81%94%E7%B3%BB%E4%BA%BA%E5%92%8C%E8%81%94%E7%B3%BB%E6%96%B9%E5%BC%8F) The company's Board Secretary is Xi Huining and the Securities Affairs Representative is Xu Yaping Contact Information | Position | Name | Contact Address | Phone | Fax | Email | | :--- | :--- | :--- | :--- | :--- | :--- | | Board Secretary | Xi Huining | Shangcun Town, Suning County, Hebei Province | 03175090055 | 03175115789 | huasi@huasigufen.com | | Securities Affairs Representative | Xu Yaping | Shangcun Town, Suning County, Hebei Province | 03175090055 | 03175115789 | huasi@huasigufen.com | [Other Information](index=6&type=section&id=%E4%B8%89%E3%80%81%E5%85%B6%E4%BB%96%E6%83%85%E5%86%B5) There were no changes to the company's contact information, information disclosure, or document storage locations during the reporting period - The company's registered address, office address, postal code, website, and email address remained unchanged during the reporting period[18](index=18&type=chunk) - The stock exchange website and media names for disclosing the semi-annual report, as well as the location for the report, remained unchanged during the reporting period[19](index=19&type=chunk) [Key Accounting Data and Financial Indicators](index=7&type=section&id=%E5%9B%9B%E3%80%81%E4%B8%BB%E8%A6%81%E4%BC%9A%E8%AE%A1%E6%95%B0%E6%8D%AE%E5%92%8C%E8%B4%A2%E5%8A%A1%E6%8C%87%E6%A0%87) The company's operating revenue decreased, net profit turned from a gain to a loss, while net cash flow from operating activities improved significantly Key Accounting Data and Financial Indicators (Year-on-Year Change) | Indicator | Current Reporting Period (Yuan) | Same Period Last Year (Yuan) | Change from Same Period Last Year | | :--- | :--- | :--- | :--- | | Operating Revenue | 154,943,770.15 | 256,192,735.41 | -39.52% | | Net Profit Attributable to Shareholders | -9,270,402.10 | 6,853,684.99 | -235.26% | | Net Profit Attributable to Shareholders (Excluding Non-recurring Items) | -10,153,523.18 | 6,475,512.18 | -256.80% | | Net Cash Flow from Operating Activities | -10,681,884.52 | -46,436,804.36 | 77.00% | | Basic Earnings Per Share (Yuan/share) | -0.0248 | 0.0183 | -235.52% | | Diluted Earnings Per Share (Yuan/share) | -0.0248 | 0.0183 | -235.52% | | Weighted Average Return on Equity | -0.76% | 0.56% | -1.32% | | **End-of-Period Indicators** | **End of Current Period (Yuan)** | **End of Last Year (Yuan)** | **Change from End of Last Year** | | Total Assets | 1,544,133,186.05 | 1,619,327,993.17 | -4.64% | | Net Assets Attributable to Shareholders | 1,219,640,101.94 | 1,229,567,781.24 | -0.81% | [Differences in Accounting Data under Domestic and Foreign Accounting Standards](index=7&type=section&id=%E4%BA%94%E3%80%81%E5%A2%83%E5%86%85%E5%A4%96%E4%BC%9A%E8%AE%A1%E5%87%86%E5%88%99%E4%B8%8B%E4%BC%9A%E8%AE%A1%E6%95%B0%E6%8D%AE%E5%B7%AE%E5%BC%82) There were no discrepancies in net profit or net assets between financial reports prepared under Chinese and international/foreign accounting standards - The company had no discrepancies in net profit and net assets between financial reports disclosed under international accounting standards and Chinese accounting standards during the reporting period[22](index=22&type=chunk) - The company had no discrepancies in net profit and net assets between financial reports disclosed under foreign accounting standards and Chinese accounting standards during the reporting period[23](index=23&type=chunk) [Non-recurring Profit and Loss Items and Amounts](index=7&type=section&id=%E5%85%AD%E3%80%81%E9%9D%9E%E7%BB%8F%E5%B8%B8%E6%80%A7%E6%8D%9F%E7%9B%8A%E9%A1%B9%E7%9B%AE%E5%8F%8A%E9%87%91%E9%A2%9D) Non-recurring profit and loss for the period totaled 883,121.08 Yuan, mainly from asset disposals and government grants Non-recurring Profit and Loss Items and Amounts | Item | Amount (Yuan) | | :--- | :--- | | Gain/Loss on Disposal of Non-current Assets | 9,761.16 | | Government Grants Included in Current Profit or Loss | 1,199,727.17 | | Other Non-operating Income and Expenses | -149,193.40 | | Less: Income Tax Effect | 177,171.99 | | Minority Interest Effect (After Tax) | 1.86 | | Total | 883,121.08 | - Income from withholding individual income tax handling fees of 7,521.44 Yuan was classified as a recurring item because it complies with national policies and occurs continuously[26](index=26&type=chunk) Management Discussion and Analysis [Principal Business Activities During the Reporting Period](index=9&type=section&id=%E4%B8%80%E3%80%81%E6%8A%A5%E5%91%8A%E6%9C%9F%E5%86%85%E5%85%AC%E5%8F%B8%E4%BB%8E%E4%BA%8B%E7%9A%84%E4%B8%BB%E8%A6%81%E4%B8%9A%E5%8A%A1) The company engages in the fur industry value chain and is actively expanding into new markets and sales channels to address industry challenges - The company's industry is classified under "C19 Leather, Fur, Feather and Its Products Manufacturing," specifically "C393 Fur Tanning and Products Manufacturing," commonly known as the fur industry[29](index=29&type=chunk) - The company's main business includes the production and sale of fur clothing, accessories, fabrics, and pelts, as well as management services for the fur raw material market, property, and commercial complexes[30](index=30&type=chunk) - In the first half of 2025, China's fur clothing export value was **199 million USD**, a decrease of **79.03%** from the same period in 2024, but the export unit price rose by **3.92%**[31](index=31&type=chunk) [Industry Overview](index=9&type=section&id=%E8%A1%8C%E4%B8%9A%E6%A6%82%E5%86%B5) The textile and apparel industry showed stable growth in H1 2025, with steady domestic demand and resilient foreign trade - In the first half of 2025, the textile and apparel industry maintained a stable and positive trend, with steady growth in domestic consumption and resilience in foreign trade[28](index=28&type=chunk) - In the first half of the year, China's textile and apparel exports totaled **143.98 billion USD**, a year-on-year increase of **0.8%**; textile exports were **70.52 billion USD** (+1.8%), while apparel exports were **73.46 billion USD** (-0.2%)[29](index=29&type=chunk) - In the first half of the year, the operating revenue of large-scale textile enterprises decreased by **3%** year-on-year, total profit decreased by **9.4%**, and the operating profit margin was **3%**, down 0.2 percentage points from the same period last year[29](index=29&type=chunk) [Company's Main Business and Products](index=10&type=section&id=%E5%85%AC%E5%8F%B8%E4%B8%BB%E8%A6%81%E4%B8%9A%E5%8A%A1%E5%8F%8A%E4%BA%A7%E5%93%81) The company focuses on the fur fashion industry, with a complete value chain and a diverse business system - The company focuses on the fur fashion industry, forming a diversified business system that integrates fur product design, R&D, manufacturing, sales, and the development of upstream and downstream industry platforms and property management[32](index=32&type=chunk) - The company is actively exploring new markets by establishing a wholly-owned subsidiary in Xinjiang to open up the fur clothing sales market there[33](index=33&type=chunk) - The company is re-planning its e-commerce and brand live-streaming platforms, leveraging the live-streaming sales model to enhance brand influence and product sales[33](index=33&type=chunk) - Main products include clothing (whole-pelt, fur-fabric, woven, fashion), fur accessories, fur pelts, fur fabrics, as well as processing fees and other business income[33](index=33&type=chunk)[34](index=34&type=chunk)[35](index=35&type=chunk) [Company's Main Business Models](index=11&type=section&id=%E5%85%AC%E5%8F%B8%E4%B8%BB%E8%A6%81%E7%BB%8F%E8%90%A5%E6%A8%A1%E5%BC%8F) The company's business model integrates R&D, global procurement, order-driven production, and multi-channel sales under its proprietary brands - As a national high-tech enterprise, the company has an independent R&D center, the "Hebei Provincial Fur Engineering Technology Research Center"[35](index=35&type=chunk) - The company has established stable global procurement channels, combining a "company-base-farmer" model domestically with international auctions to allocate resources[36](index=36&type=chunk) - The company's production is primarily order-driven, adopting a make-to-order model with a process that includes R&D, tanning, dyeing, and garment production[36](index=36&type=chunk) - Sales models include OBM (Original Brand Manufacturer), OEM (Original Equipment Manufacturer), and ODM (Original Design Manufacturer), with the OBM model utilizing offline direct stores and online e-commerce channels[38](index=38&type=chunk) - The company's own brands, such as "Huasi" and "Yijiaqi," are themed "luxury, elegance, uniqueness, and fashion," with "Yijiaqi" having received honors like "China Famous Trademark"[38](index=38&type=chunk) [Core Competitiveness Analysis](index=13&type=section&id=%E4%BA%8C%E3%80%81%E6%A0%B8%E5%BF%83%E7%AB%9E%E4%BA%89%E5%8A%9B%E5%88%86%E6%9E%90) The company's core competitiveness lies in its complete industry chain, resource procurement, R&D capabilities, and regional advantages - The company has built a complete industry chain from fur trading and processing to apparel design and sales, forming core competitive advantages in upstream resources, R&D, technology, production scale, sales channels, and product quality[40](index=40&type=chunk) - The company has professional experience in raw pelt inspection and strong capabilities in comprehensive utilization and development, establishing a five-level classification standard to homogenize non-standard raw materials[40](index=40&type=chunk)[41](index=41&type=chunk) - The company's "Hebei Provincial Fur Engineering Technology Research Center" is a leader in fur R&D and design, having developed internationally advanced processes like "multi-color dyeing on a single pelt" and new fur fabric products[42](index=42&type=chunk) - The company is located in Suning County, Hebei Province, known as the "Fur Capital of China," which is a major fur trade hub and price formation center with abundant labor resources[43](index=43&type=chunk) [Analysis of Main Business Operations](index=14&type=section&id=%E4%B8%89%E3%80%81%E4%B8%BB%E8%90%A5%E4%B8%9A%E5%8A%A1%E5%88%86%E6%9E%90) Revenue declined due to reduced income from investment property sales, while OBM business and domestic sales showed significant growth Year-on-Year Changes in Key Financial Data | Indicator | Current Reporting Period (Yuan) | Same Period Last Year (Yuan) | YoY Change | Reason for Change | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue | 154,943,770.15 | 256,192,735.41 | -39.52% | Primarily due to a decrease in income from the transfer of investment properties compared to the same period last year | | Operating Costs | 107,998,288.31 | 188,040,872.57 | -42.57% | Primarily due to the decrease in operating revenue, leading to a reduction in costs | | Selling Expenses | 32,903,623.29 | 25,343,781.58 | 29.83% | Primarily due to the addition of the Xinjiang subsidiary in Q4 last year, resulting in increased advertising and store expenses | | Finance Costs | 1,439,140.08 | 1,226,915.24 | 17.30% | Primarily due to an increase in foreign exchange gains and losses caused by currency fluctuations | | Net Cash Flow from Operating Activities | -10,681,884.52 | -46,436,804.36 | 77.00% | Primarily due to a decrease in payments for goods and services, various taxes, and other operating expenses | | Net Cash Flow from Investing Activities | 33,027,701.18 | -22,280,079.73 | -248.24% | Primarily due to an increase from matured time deposits during the reporting period | | Net Cash Flow from Financing Activities | -42,956,686.30 | -10,092,058.76 | 325.65% | Primarily due to a decrease in the net amount of bank borrowings compared to the same period last year | Operating Revenue Breakdown (by Industry) | Industry | Current Period Amount (Yuan) | % of Operating Revenue | Prior Period Amount (Yuan) | % of Operating Revenue | YoY Change | | :--- | :--- | :--- | :--- | :--- | :--- | | OBM | 119,117,508.49 | 76.88% | 100,340,400.91 | 39.17% | 18.71% | | ODM | 19,185,011.86 | 12.38% | 26,316,285.85 | 10.27% | -27.10% | | OEM | 1,342,089.54 | 0.87% | 1,169,440.31 | 0.46% | 14.76% | | Other Business Income | 15,299,160.26 | 9.87% | 128,366,608.34 | 50.10% | -88.08% | Operating Revenue Breakdown (by Product) | Product | Current Period Amount (Yuan) | % of Operating Revenue | Prior Period Amount (Yuan) | % of Operating Revenue | YoY Change | | :--- | :--- | :--- | :--- | :--- | :--- | | Fur Pelts | 16,693,016.81 | 10.77% | 13,815,773.59 | 5.39% | 20.83% | | Fur Clothing | 71,500,523.41 | 46.15% | 49,696,002.32 | 19.40% | 43.88% | | Commercial Complex Business | 30,010,304.16 | 19.37% | 35,637,295.84 | 13.91% | -15.79% | | Other Business Income | 15,299,160.26 | 9.87% | 128,366,608.34 | 50.10% | -88.08% | Operating Revenue Breakdown (by Region) | Region | Current Period Amount (Yuan) | % of Operating Revenue | Prior Period Amount (Yuan) | % of Operating Revenue | YoY Change | | :--- | :--- | :--- | :--- | :--- | :--- | | Export Sales | 15,944,023.33 | 10.29% | 18,208,090.84 | 7.11% | -12.43% | | Domestic Sales | 123,700,586.56 | 79.84% | 109,618,036.23 | 42.79% | 12.85% | | Other Business Income | 15,299,160.26 | 9.87% | 128,366,608.34 | 50.10% | -88.08% | - The company has **12 directly-operated stores** with a total area of 8,439 square meters, with no new openings or closures during the reporting period[50](index=50&type=chunk) [Other Information Required by the Textile and Apparel Industry Information Disclosure Guidelines](index=17&type=section&id=%E5%9B%9B%E3%80%81%E7%BA%BA%E7%BB%87%E6%9C%8D%E8%A3%85%E7%9B%B8%E5%85%B3%E8%A1%8C%E4%B8%9A%E4%BF%A1%E6%81%AF%E6%8A%AB%E9%9C%B2%E6%8C%87%E5%BC%95%E8%A6%81%E6%B1%82%E7%9A%84%E5%85%B6%E4%BB%96%E4%BF%A1%E6%81%AF) Online sales revenue surged, while inventory turnover days remained high, and inventory balance increased Capacity Information | Indicator | Current Reporting Period | Same Period Last Year | | :--- | :--- | :--- | | Total Capacity | 50000 | 50000 | | Capacity Utilization Rate | 14.01% | 13.71% | YoY Change in Operating Revenue by Sales Channel | Sales Channel | YoY Change in Operating Revenue (%) | | :--- | :--- | | Online Sales | 2,236.69% | | Direct Sales | 46.39% | | Distribution Sales | -30.56% | Breakdown of Selling Expenses | Item | Current Period Amount (Yuan) | Prior Period Amount (Yuan) | | :--- | :--- | :--- | | Salaries and Related Expenses | 13,612,761.09 | 12,883,837.64 | | Store Expenses | 9,652,045.48 | 5,284,999.97 | | Total | 32,903,623.29 | 25,343,781.58 | - The company collaborates with the third-party sales platform Douyin (TikTok), with a transaction amount of **3,827,125.61 Yuan** and a return rate of **67.51%** during the reporting period[56](index=56&type=chunk) Inventory Information | Main Product | Inventory Turnover Days | Inventory Quantity | Inventory Age | YoY Change in Inventory Balance | | :--- | :--- | :--- | :--- | :--- | | Fur Clothing | 939 | 26,046 | 1 | 39.67% | - The company's own brands include "Yijiaqi," "Yishangdi," and "Huasi Maisha," with main products being apparel sold primarily in North China, Northeast China, and Russia[57](index=57&type=chunk) [Analysis of Non-Core Business](index=19&type=section&id=%E4%BA%94%E3%80%81%E9%9D%9E%E4%B8%BB%E8%90%A5%E4%B8%9A%E5%8A%A1%E5%88%86%E6%9E%90) Non-core business activities had a minor impact on total profit and are not considered sustainable Impact of Non-Core Business on Total Profit | Item | Amount (Yuan) | % of Total Profit | Reason for Formation & Sustainability | | :--- | :--- | :--- | :--- | | Non-operating Income | 58,759.01 | -0.53% | Not sustainable | | Non-operating Expenses | 207,952.41 | -1.87% | Not sustainable | | Credit Impairment Loss | 506,437.37 | -4.57% | Not sustainable | [Analysis of Assets and Liabilities](index=19&type=section&id=%E5%85%AD%E3%80%81%E8%B5%84%E4%BA%A7%E5%8F%8A%E8%B4%9F%E5%80%BA%E7%8A%B6%E5%86%B5%E5%88%86%E6%9E%90) The company reduced short-term borrowings and increased long-term borrowings, while a portion of its cash and assets are restricted Significant Changes in Asset Composition | Item | End of Current Period (Yuan) | % of Total Assets | End of Last Year (Yuan) | % of Total Assets | Change in Proportion | Reason for Significant Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Inventory | 458,017,886.71 | 29.66% | 436,686,623.73 | 26.97% | 2.69% | | | Short-term Borrowings | 57,039,900.00 | 3.69% | 180,145,000.00 | 11.12% | -7.43% | Primarily due to a reduction in short-term borrowings during the reporting period | | Long-term Borrowings | 83,058,100.00 | 5.38% | | | 5.38% | Primarily due to an increase in long-term borrowings during the reporting period | - At the end of the period, **11,769,751.00 Yuan** of cash and cash equivalents were frozen by the court[62](index=62&type=chunk) - Fixed assets of **52,782,140.65 Yuan** and investment properties of **279,110,013.35 Yuan** were pledged as collateral for a maximum mortgage guarantee of **401.85 million Yuan** to the Agricultural Bank of China[62](index=62&type=chunk) [Investment Analysis](index=20&type=section&id=%E4%B8%83%E3%80%81%E6%8A%95%E8%B5%84%E7%8A%B6%E5%86%B5%E5%88%86%E6%9E%90) The company did not engage in any significant investment activities during the reporting period - The company had no securities investments during the reporting period[64](index=64&type=chunk) - The company had no derivative investments during the reporting period[65](index=65&type=chunk) - The company had no use of raised funds during the reporting period[66](index=66&type=chunk) [Sale of Major Assets and Equity](index=21&type=section&id=%E5%85%AB%E3%80%81%E9%87%8D%E5%A4%A7%E8%B5%84%E4%BA%A7%E5%92%8C%E8%82%A1%E6%9D%83%E5%87%BA%E5%94%AE) No major assets or equity were sold during the reporting period - The company did not sell any major assets during the reporting period[67](index=67&type=chunk) - The company did not sell any major equity during the reporting period[68](index=68&type=chunk) [Analysis of Major Subsidiaries and Investees](index=21&type=section&id=%E4%B9%9D%E3%80%81%E4%B8%BB%E8%A6%81%E6%8E%A7%E8%82%A1%E5%8F%82%E8%82%A1%E5%85%AC%E5%8F%B8%E5%88%86%E6%9E%90) There was no information on significant subsidiaries or investees to be disclosed for the reporting period - There was no information on significant subsidiaries or investees to be disclosed for the reporting period[68](index=68&type=chunk) [Structured Entities Controlled by the Company](index=21&type=section&id=%E5%8D%81%E3%80%81%E5%85%AC%E5%8F%B8%E6%8E%A7%E5%88%B6%E7%9A%84%E7%BB%93%E6%9E%84%E5%8C%96%E4%B8%BB%E4%BD%93%E6%83%85%E5%86%B5) The company did not control any structured entities during the reporting period - The company did not control any structured entities during the reporting period[69](index=69&type=chunk) [Risks and Countermeasures](index=21&type=section&id=%E5%8D%81%E4%B8%80%E3%80%81%E5%85%AC%E5%8F%B8%E9%9D%A2%E4%B8%B4%E7%9A%84%E9%A3%8E%E9%99%A9%E5%92%8C%E5%BA%94%E5%AF%B9%E6%8E%AA%E6%96%BD) The company faces macroeconomic, exchange rate, and raw material price risks, which it addresses through market expansion and financial hedging - The company faces **macroeconomic risks** from geopolitical factors and global economic uncertainty, which could lead to a decline in domestic textile and apparel export orders[70](index=70&type=chunk) - The company's export sales are mainly settled in USD, exposing it to **exchange rate fluctuation risks**[70](index=70&type=chunk) - The company's main raw materials are special fur animal pelts, and **fluctuations in raw material prices** will significantly impact product costs[70](index=70&type=chunk) - The company will mitigate risks by strengthening brand building, diversifying market layout, using forward foreign exchange contracts, enhancing inventory management, and increasing R&D efforts[71](index=71&type=chunk) [Development and Implementation of Market Value Management System and Valuation Enhancement Plan](index=22&type=section&id=%E5%8D%81%E4%BA%8C%E3%80%81%E5%B8%82%E5%80%BC%E7%AE%A1%E7%90%86%E5%88%B6%E5%BA%A6%E5%92%8C%E4%BC%B0%E5%80%BC%E6%8F%90%E5%8D%87%E8%AE%A1%E5%88%92%E7%9A%84%E5%88%B6%E5%AE%9A%E8%90%BD%E5%AE%9E%E6%83%85%E5%86%B5) The company has established a market value management system but has not disclosed a valuation enhancement plan - The company approved the "Huasi Holdings Co, Ltd Market Value Management System" at the third meeting of the sixth Board of Directors on April 15, 2025[72](index=72&type=chunk) - The company has not disclosed a valuation enhancement plan[72](index=72&type=chunk) [Implementation of the "Dual Improvement in Quality and Returns" Action Plan](index=22&type=section&id=%E5%8D%81%E4%B8%89%E3%80%81%22%E8%B4%A8%E9%87%8F%E5%9B%9E%E6%8A%A5%E5%8F%8C%E6%8F%90%E5%8D%87%22%E8%A1%8C%E5%8A%A8%E6%96%B9%E6%A1%88%E8%B4%AF%E5%BD%BB%E8%90%BD%E5%AE%9E%E6%83%85%E5%86%B5) The company has not disclosed an announcement regarding the "Dual Improvement in Quality and Returns" action plan - The company has not disclosed an announcement regarding the "Dual Improvement in Quality and Returns" action plan[73](index=73&type=chunk) Corporate Governance, Environment, and Society [Changes in Directors, Supervisors, and Senior Management](index=22&type=section&id=%E4%B8%80%E3%80%81%E5%85%AC%E5%8F%B8%E8%91%A3%E4%BA%8B%E3%80%81%E7%9B%91%E4%BA%8B%E3%80%81%E9%AB%98%E7%BA%A7%E7%AE%A1%E7%90%86%E4%BA%BA%E5%91%98%E5%8F%98%E5%8A%A8%E6%83%85%E5%86%B5) Supervisor Han Xiaobo resigned for personal reasons during the reporting period - Supervisor Han Xiaobo resigned for personal reasons on April 15, 2025[74](index=74&type=chunk) [Profit Distribution and Capitalization of Capital Reserve for the Reporting Period](index=23&type=section&id=%E4%BA%8C%E3%80%81%E6%9C%AC%E6%8A%A5%E5%91%8A%E6%9C%9F%E5%88%A9%E6%B6%A6%E5%88%86%E9%85%8D%E5%8F%8A%E8%B5%84%E6%9C%AC%E5%85%AC%E7%A7%AF%E9%87%91%E8%BD%AC%E5%A2%9E%E8%82%A1%E6%9C%AC%E6%83%85%E5%86%B5) The company does not plan to distribute profits or increase share capital for the semi-annual period - The company plans **not to distribute cash dividends, issue bonus shares, or convert capital reserves into share capital** for the semi-annual period[75](index=75&type=chunk) [Implementation of Equity Incentive Plans, Employee Stock Ownership Plans, or Other Employee Incentive Measures](index=23&type=section&id=%E4%B8%89%E3%80%81%E5%85%AC%E5%8F%B8%E8%82%A1%E6%9D%83%E6%BF%80%E5%8A%B1%E8%AE%A1%E5%88%92%E3%80%81%E5%91%98%E5%B7%A5%E6%8C%81%E8%82%A1%E8%AE%A1%E5%88%92%E6%88%96%E5%85%B6%E4%BB%96%E5%91%98%E5%B7%A5%E6%BF%80%E5%8A%B1%E6%8E%AA%E6%96%BD%E7%9A%84%E5%AE%9E%E6%96%BD%E6%83%85%E5%86%B5) The company had no equity incentive plans or other employee incentive measures during the reporting period - The company had no equity incentive plans, employee stock ownership plans, or other employee incentive measures and their implementation during the reporting period[76](index=76&type=chunk) [Environmental Information Disclosure](index=23&type=section&id=%E5%9B%9B%E3%80%81%E7%8E%AF%E5%A2%83%E4%BF%A1%E6%81%AF%E6%8A%AB%E9%9C%B2%E6%83%85%E5%86%B5) The company is not on the list of enterprises required to disclose environmental information and is committed to clean production - The listed company and its main subsidiaries are not included in the list of enterprises required to disclose environmental information by law[77](index=77&type=chunk) - The company adheres to the principle of "safety first, environmental protection priority" and achieves clean emissions through energy conservation and emission reduction to build an efficient and environmentally friendly clean production enterprise[78](index=78&type=chunk) [Social Responsibility](index=23&type=section&id=%E4%BA%94%E3%80%81%E7%A4%BE%E4%BC%9A%E8%B4%A3%E4%BB%BB%E6%83%85%E5%86%B5) The company fulfills its social responsibilities by protecting stakeholder interests, valuing human resources, and prioritizing environmental protection - The company considers protecting the interests of shareholders, especially minority shareholders, and safeguarding the legal rights of creditors as its most fundamental social responsibility[77](index=77&type=chunk) - The company has formulated human resource policies conducive to sustainable development and emphasizes employee quality and subsequent training and education[77](index=77&type=chunk) - The company believes that creating a "first-class service" model is the foundation of its business and survival[77](index=77&type=chunk) Important Matters [Commitments by the Company's Actual Controller, Shareholders, Related Parties, Acquirers, and the Company that were Fulfilled During the Reporting Period or Remained Unfulfilled by the End of the Reporting Period](index=24&type=section&id=%E4%B8%80%E3%80%81%E5%85%AC%E5%8F%B8%E5%AE%9E%E9%99%85%E6%8E%A7%E5%88%B6%E4%BA%BA%E3%80%81%E8%82%A1%E4%B8%9C%E3%80%81%E5%85%B3%E8%81%94%E6%96%B9%E3%80%81%E6%94%B6%E8%B4%AD%E4%BA%BA%E4%BB%A5%E5%8F%8A%E5%85%AC%E5%8F%B8%E7%AD%89%E6%89%BF%E8%AF%BA%E7%9B%B8%E5%85%B3%E6%96%B9%E5%9C%A8%E6%8A%A5%E5%91%8A%E6%9C%9F%E5%86%85%E5%B1%A5%E8%A1%8C%E5%AE%8C%E6%AF%95%E5%8F%8A%E6%88%AA%E8%87%B3%E6%8A%A5%E5%91%8A%E6%9C%9F%E6%9C%AB%E8%B6%85%E6%9C%9F%E6%9C%AA%E5%B1%A5%E8%A1%8C%E5%AE%8C%E6%AF%95%E7%9A%84%E6%89%BF%E8%AF%BA%E4%BA%8B%E9%A1%B9) The controlling shareholder has strictly fulfilled all commitments regarding share sale restrictions and avoidance of competition - The controlling shareholder, actual controller, and chairman, He Guoying, committed during the initial public offering not to transfer or entrust others to manage his directly or indirectly held shares within 36 months of the stock listing, and not to transfer more than 25% of his total shares annually while serving as a director, supervisor, or senior manager[80](index=80&type=chunk) - He Guoying committed that the non-publicly offered shares he subscribed to would be locked for 36 months from the listing date after the issuance[80](index=80&type=chunk) - Mr He Guoying issued a "Letter of Commitment to Avoid Competition" to the company, promising not to engage in businesses or activities that constitute or could potentially constitute competition with the company, and to strive to reduce related-party transactions[80](index=80&type=chunk) - **All commitments were fulfilled on time**[80](index=80&type=chunk) [Non-operational Fund Occupation by the Controlling Shareholder and Other Related Parties](index=25&type=section&id=%E4%BA%8C%E3%80%81%E6%8E%A7%E8%82%A1%E8%82%A1%E4%B8%9C%E5%8F%8A%E5%85%B6%E4%BB%96%E5%85%B3%E8%81%94%E6%96%B9%E5%AF%B9%E4%B8%8A%E5%B8%82%E5%85%AC%E5%8F%B8%E7%9A%84%E9%9D%9E%E7%BB%8F%E8%90%A5%E6%80%A7%E5%8D%A0%E7%94%A8%E8%B5%84%E9%87%91%E6%83%85%E5%86%B5) There was no non-operational fund occupation by the controlling shareholder or other related parties during the reporting period - The company had no non-operational fund occupation by the controlling shareholder and other related parties during the reporting period[81](index=81&type=chunk) [Irregular External Guarantees](index=25&type=section&id=%E4%B8%89%E3%80%81%E8%BF%9D%E8%A7%84%E5%AF%B9%E5%A4%96%E6%8B%85%E4%BF%9D%E6%83%85%E5%86%B5) The company had no irregular external guarantees during the reporting period - The company had no irregular external guarantees during the reporting period[82](index=82&type=chunk) [Appointment and Dismissal of Accounting Firms](index=25&type=section&id=%E5%9B%9B%E3%80%81%E8%81%98%E4%BB%BB%E3%80%81%E8%A7%A3%E8%81%98%E4%BC%9A%E8%AE%A1%E5%B8%88%E4%BA%8B%E5%8A%A1%E6%89%80%E6%83%85%E5%86%B5) The company's semi-annual financial report was not audited - The company's semi-annual report was not audited[83](index=83&type=chunk) [Explanation by the Board of Directors and Supervisory Committee on the "Non-standard Audit Report" for the Current Period](index=25&type=section&id=%E4%BA%94%E3%80%81%E8%91%A3%E4%BA%8B%E4%BC%9A%E3%80%81%E7%9B%91%E4%BA%8B%E4%BC%9A%E5%AF%B9%E4%BC%9A%E8%AE%A1%E5%B8%88%E4%BA%8B%E5%8A%A1%E6%89%80%E6%9C%AC%E6%8A%A5%E5%91%8A%E6%9C%9F%22%E9%9D%9E%E6%A0%87%E5%87%86%E5%AE%A1%E8%AE%A1%E6%8A%A5%E5%91%8A%22%E7%9A%84%E8%AF%B4%E6%98%8E) There was no non-standard audit report for the current reporting period - There was no non-standard audit report for the current reporting period[84](index=84&type=chunk) [Explanation by the Board of Directors on the "Non-standard Audit Report" from the Previous Year](index=25&type=section&id=%E5%85%AD%E3%80%81%E8%91%A3%E4%BA%8B%E4%BC%9A%E5%AF%B9%E4%B8%8A%E5%B9%B4%E5%BA%A6%22%E9%9D%9E%E6%A0%87%E5%87%86%E5%AE%A1%E8%AE%A1%E6%8A%A5%E5%91%8A%22%E7%9B%B8%E5%85%B3%E6%83%85%E5%86%B5%E7%9A%84%E8%AF%B4%E6%98%8E) There was no non-standard audit report for the current reporting period - There was no non-standard audit report for the current reporting period[84](index=84&type=chunk) [Bankruptcy and Reorganization Matters](index=25&type=section&id=%E4%B8%83%E3%80%81%E7%A0%B4%E4%BA%A7%E9%87%8D%E6%95%B4%E7%9B%B8%E5%85%B3%E4%BA%8B%E9%A1%B9) No bankruptcy or reorganization matters occurred during the reporting period - No bankruptcy or reorganization matters occurred during the reporting period[84](index=84&type=chunk) [Litigation Matters](index=25&type=section&id=%E5%85%AB%E3%80%81%E8%AF%89%E8%AE%BC%E4%BA%8B%E9%A1%B9) The company had no major litigation or arbitration matters during the reporting period - The company had no major litigation or arbitration matters during this reporting period[85](index=85&type=chunk) [Penalties and Rectifications](index=25&type=section&id=%E4%B9%9D%E3%80%81%E5%A4%84%E7%BD%9A%E5%8F%8A%E6%95%B4%E6%94%B9%E6%83%85%E5%86%B5) There were no penalties or rectifications during the reporting period - There were no penalties or rectifications during the reporting period[85](index=85&type=chunk) [Integrity Status of the Company, its Controlling Shareholder, and Actual Controller](index=25&type=section&id=%E5%8D%81%E3%80%81%E5%85%AC%E5%8F%B8%E5%8F%8A%E5%85%B6%E6%8E%A7%E8%82%A1%E8%82%A1%E4%B8%9C%E3%80%81%E5%AE%9E%E9%99%85%E6%8E%A7%E5%88%B6%E4%BA%BA%E7%9A%84%E8%AF%9A%E4%BF%A1%E7%8A%B6%E5%86%B5) There were no integrity issues concerning the company, its controlling shareholder, or actual controller during the reporting period - There were no integrity issues concerning the company, its controlling shareholder, or actual controller during the reporting period[86](index=86&type=chunk) [Major Related-Party Transactions](index=26&type=section&id=%E5%8D%81%E4%B8%80%E3%80%81%E9%87%8D%E5%A4%A7%E5%85%B3%E8%81%94%E4%BA%A4%E6%98%93) No major related-party transactions occurred during the reporting period - The company had no related-party transactions related to daily operations during the reporting period[87](index=87&type=chunk) - The company had no related-party transactions involving the acquisition or sale of assets or equity during the reporting period[88](index=88&type=chunk) - There were no related-party credit or debt transactions during the reporting period[90](index=90&type=chunk) - The company had no other major related-party transactions during the reporting period[93](index=93&type=chunk) [Major Contracts and Their Performance](index=26&type=section&id=%E5%8D%81%E4%BA%8C%E3%80%81%E9%87%8D%E5%A4%A7%E5%90%88%E5%90%8C%E5%8F%8A%E5%85%B6%E5%B1%A5%E8%A1%8C%E6%83%85%E5%86%B5) The company had no major contracts, guarantees, or wealth management activities during the reporting period - The company had no custody arrangements during the reporting period[94](index=94&type=chunk) - The company had no major guarantees during the reporting period[97](index=97&type=chunk) - The company had no entrusted wealth management during the reporting period[98](index=98&type=chunk) - The company had no other major contracts during the reporting period[99](index=99&type=chunk) [Explanation of Other Major Matters](index=27&type=section&id=%E5%8D%81%E4%B8%89%E3%80%81%E5%85%B6%E4%BB%96%E9%87%8D%E5%A4%A7%E4%BA%8B%E9%A1%B9%E7%9A%84%E8%AF%B4%E6%98%8E) There were no other major matters requiring explanation during the reporting period - There were no other major matters requiring explanation during the reporting period[100](index=100&type=chunk) [Major Matters Concerning Company Subsidiaries](index=27&type=section&id=%E5%8D%81%E5%9B%9B%E3%80%81%E5%85%AC%E5%8F%B8%E5%AD%90%E5%85%AC%E5%8F%B8%E9%87%8D%E5%A4%A7%E4%BA%8B%E9%A1%B9) There were no major matters concerning company subsidiaries during the reporting period - There were no major matters concerning company subsidiaries during the reporting period[101](index=101&type=chunk) Share Capital Changes and Shareholder Information [Share Capital Changes](index=28&type=section&id=%E4%B8%80%E3%80%81%E8%82%A1%E4%BB%BD%E5%8F%98%E5%8A%A8%E6%83%85%E5%86%B5) The company's total share capital and the structure of restricted and unrestricted shares remained unchanged during the reporting period Share Capital Changes | Item | Pre-change Quantity (shares) | Pre-change Ratio | Change (+, -) | Post-change Quantity (shares) | Post-change Ratio | | :--- | :--- | :--- | :--- | :--- | :--- | | I. Restricted Shares | 90,540,280 | 24.00% | 0 | 90,540,280 | 24.00% | | II. Unrestricted Shares | 286,770,438 | 76.00% | 0 | 286,770,438 | 76.00% | | III. Total Shares | 377,310,718 | 100.00% | 0 | 377,310,718 | 100.00% | - During the reporting period, the company's total share count, restricted shares, and unrestricted shares remained unchanged[103](index=103&type=chunk) [Securities Issuance and Listing](index=29&type=section&id=%E4%BA%8C%E3%80%81%E8%AF%81%E5%88%B8%E5%8F%91%E8%A1%8C%E4%B8%8E%E4%B8%8A%E5%B8%82%E6%83%85%E5%86%B5) The company had no securities issuance or listing activities during the reporting period - The company had no securities issuance or listing activities during the reporting period[104](index=104&type=chunk) [Number of Shareholders and Shareholding Information](index=29&type=section&id=%E4%B8%89%E3%80%81%E5%85%AC%E5%8F%B8%E8%82%A1%E4%B8%9C%E6%95%B0%E9%87%8F%E5%8F%8A%E6%8C%81%E8%82%A1%E6%83%85%E5%86%B5) At the end of the period, the company had 26,217 common shareholders, with the controlling shareholder holding a 31.99% stake - At the end of the reporting period, the total number of common shareholders was **26,217**[105](index=105&type=chunk) Shareholding of Shareholders with over 5% or Top 10 Shareholders | Shareholder Name | Shareholder Type | Shareholding Ratio | Shares Held at Period End (shares) | Number of Restricted Shares (shares) | Number of Unrestricted Shares (shares) | | :--- | :--- | :--- | :--- | :--- | :--- | | He Guoying | Domestic Natural Person | 31.99% | 120,720,374 | 90,540,280 | 30,180,094 | | Nomura Orient International Securities - Shanghai Textile (Group) Co, Ltd - Nomura Orient International Sunrise No. 1 Single Asset Management Plan | Other | 1.74% | 6,581,354 | 0 | 6,581,354 | | BARCLAYS BANK PLC | Foreign Legal Entity | 0.90% | 3,398,553 | 0 | 3,398,553 | | Xuanyuan Private Equity Investment Management (Guangdong) Co, Ltd - Xuanyuan Kexin No. 122 Private Securities Investment Fund | Other | 0.87% | 3,267,800 | 0 | 3,267,800 | | Wu Yiming | Domestic Natural Person | 0.61% | 2,300,000 | 0 | 2,300,000 | | China Construction Bank Co, Ltd - Nuoan Multi-Strategy Equity Securities Investment Fund | Other | 0.57% | 2,146,300 | 0 | 2,146,300 | | CITIC Securities Asset Management (Hong Kong) Limited - Client Funds | Foreign Legal Entity | 0.52% | 1,964,397 | 0 | 1,964,397 | | Shanghai Zhuchi Asset Management Co, Ltd - Zhuchi New Income Private Securities Investment Fund Phase 10 | Other | 0.51% | 1,926,600 | 0 | 1,926,600 | | Shanghai Yingshui Investment Management Co, Ltd - Yingshui Changfeng No. 19 Private Securities Investment Fund | Other | 0.50% | 1,887,800 | 0 | 1,887,800 | | Teng Rongsong | Domestic Natural Person | 0.46% | 1,740,800 | 0 | 1,740,800 | - As of the end of the reporting period, the company's special securities account for share repurchase held **4,227,600 shares**, accounting for **1.12%** of the total share capital[106](index=106&type=chunk) [Changes in Shareholdings of Directors, Supervisors, and Senior Management](index=32&type=section&id=%E5%9B%9B%E3%80%81%E8%91%A3%E4%BA%8B%E3%80%81%E7%9B%91%E4%BA%8B%E5%92%8C%E9%AB%98%E7%BA%A7%E7%AE%A1%E7%90%86%E4%BA%BA%E5%91%98%E6%8C%81%E8%82%A1%E5%8F%98%E5%8A%A8) There were no changes in the shareholdings of directors, supervisors, and senior management during the reporting period - There were no changes in the shareholdings of the company's directors, supervisors, and senior management during the reporting period[108](index=108&type=chunk) [Changes in Controlling Shareholder or Actual Controller](index=32&type=section&id=%E4%BA%94%E3%80%81%E6%8E%A7%E8%82%A1%E8%82%A1%E4%B8%9C%E6%88%96%E5%AE%9E%E9%99%85%E6%8E%A7%E5%88%B6%E4%BA%BA%E5%8F%98%E6%9B%B4%E6%83%85%E5%86%B5) The company's controlling shareholder and actual controller remained unchanged during the reporting period - The company's controlling shareholder did not change during the reporting period[109](index=109&type=chunk) - The company's actual controller did not change during the reporting period[109](index=109&type=chunk) [Preferred Stock Information](index=33&type=section&id=%E5%85%AD%E3%80%81%E4%BC%98%E5%85%88%E8%82%A1%E7%9B%B8%E5%85%B3%E6%83%85%E5%86%B5) The company had no preferred stock during the reporting period - The company had no preferred stock during the reporting period[110](index=110&type=chunk) Bond-related Matters [Bond-related Matters](index=34&type=section&id=%E5%80%BA%E5%88%B8%E7%9B%B8%E5%85%B3%E6%83%85%E5%86%B5) The company had no bond-related matters during the reporting period - The company had no bond-related matters during the reporting period[112](index=112&type=chunk) Financial Report [Audit Report](index=35&type=section&id=%E4%B8%80%E3%80%81%E5%AE%A1%E8%AE%A1%E6%8A%A5%E5%91%8A) The company's semi-annual financial report was not audited - The company's semi-annual financial report was not audited[114](index=114&type=chunk) [Financial Statements](index=35&type=section&id=%E4%BA%8C%E3%80%81%E8%B4%A2%E5%8A%A1%E6%8A%A5%E8%A1%A8) This section provides the company's consolidated and parent company financial statements for the first half of 2025 Key Data from Consolidated Balance Sheet (End of Period) | Item | Closing Balance (Yuan) | | :--- | :--- | | Total Assets | 1,544,133,186.05 | | Total Liabilities | 345,757,322.15 | | Total Equity Attributable to Parent Company | 1,219,640,101.94 | | Total Equity | 1,198,375,863.90 | Key Data from Consolidated Income Statement (Current Period) | Item | Current Period Amount (Yuan) | | :--- | :--- | | Total Operating Revenue | 154,943,770.15 | | Operating Profit | -10,942,913.22 | | Total Profit | -11,092,106.62 | | Net Profit | -9,270,692.33 | | Net Profit Attributable to Parent Company Shareholders | -9,270,402.10 | | Basic Earnings Per Share (Yuan/share) | -0.0248 | Key Data from Consolidated Cash Flow Statement (Current Period) | Item | Current Period Amount (Yuan) | | :--- | :--- | | Net Cash Flow from Operating Activities | -10,681,884.52 | | Net Cash Flow from Investing Activities | 33,027,701.18 | | Net Cash Flow from Financing Activities | -42,956,686.30 | | Net Increase in Cash and Cash Equivalents | -17,269,114.85 | [Company's Basic Information](index=52&type=section&id=%E4%B8%89%E3%80%81%E5%85%AC%E5%8F%B8%E5%9F%BA%E6%9C%AC%E6%83%85%E5%86%B5) Huasi Holdings Co, Ltd is a fur industry company controlled by He Guoying, with 18 subsidiaries included in its consolidation scope - Huasi Holdings Co, Ltd, formerly Hebei Huatong Industrial Co, Ltd, had a total share capital and registered capital of **377,310,718.00 Yuan** as of June 30, 2025, after several capital changes[155](index=155&type=chunk) - The company's registered and head office addresses are both in Shangcun Town, Suning County, Hebei Province, and the actual controller is He Guoying[155](index=155&type=chunk) - The company operates in the fur industry, with main products and services including apparel manufacturing, R&D, sales, fur tanning, import/export, park management, brand management, and property management[156](index=156&type=chunk) - A total of **18 subsidiaries** were included in the consolidation scope for the current period, and the financial statements were approved for issuance by the Board of Directors on August 27, 2025[157](index=157&type=chunk)[158](index=158&type=chunk) [Basis of Preparation of Financial Statements](index=56&type=section&id=%E5%9B%9B%E3%80%81%E8%B4%A2%E5%8A%A1%E6%8A%A5%E8%A1%A8%E7%9A%84%E7%BC%96%E5%88%B6%E5%9F%BA%E7%A1%80) The financial statements are prepared in accordance with Chinese accounting standards and on a going concern basis - The company prepares its financial statements based on actual transactions and events, in accordance with the "Enterprise Accounting Standards" issued by the Ministry of Finance and the CSRC's "Information Disclosure and Compilation Rules for Companies Offering Securities to the Public No 15 - General Provisions on Financial Reports" (2023 Revision)[159](index=159&type=chunk) - The company has assessed its ability to continue as a going concern for the 12 months from the end of the reporting period and found no material uncertainties, thus preparing the financial statements on a going concern basis[160](index=160&type=chunk) [Significant Accounting Policies and Estimates](index=56&type=section&id=%E4%BA%94%E3%80%81%E9%87%8D%E8%A6%81%E4%BC%9A%E8%AE%A1%E6%94%BF%E7%AD%96%E5%8F%8A%E4%BC%9A%E8%AE%A1%E4%BC%B0%E8%AE%A1) This section details the key accounting policies and estimates used, which comply with enterprise accounting standards - The company determines specific accounting policies and estimates based on its production and operation characteristics, mainly reflected in inventory valuation, bad debt provision for receivables, depreciation of fixed assets, amortization of intangible assets, measurement of investment properties, and revenue recognition[161](index=161&type=chunk) - The financial statements prepared by the company comply with the requirements of the Enterprise Accounting Standards and provide a true and complete view of the company's financial position, operating results, and cash flows for the reporting period[162](index=162&type=chunk) - The company has implemented "Interpretation No 17 of the Enterprise Accounting Standards," "Interim Provisions on Accounting for Enterprise Data Resources," and "Interpretation No 18 of the Enterprise Accounting Standards," but their adoption had no material impact on the financial statements for this reporting period[103](index=103&type=chunk)[335](index=335&type=chunk)[336](index=336&type=chunk)[337](index=337&type=chunk) [Taxes](index=104&type=section&id=%E5%85%AD%E3%80%81%E7%A8%8E%E9%A1%B9) The company is subject to various taxes, including VAT and corporate income tax, with a preferential 15% income tax rate as a high-tech enterprise Main Taxes and Tax Rates | Tax Type | Tax Basis | Tax Rate | | :--- | :--- | :--- | | Value-Added Tax (VAT) | Domestic sales of goods, processing, repair services, general trade imports, tangible movable property leasing | 13% | | Value-Added Tax (VAT) | Sales of real estate, transfer of land use rights, import of raw hides, sales of goods | 9% | | Value-Added Tax (VAT) | Provision of modern taxable services, financial loan services | 6% | | Value-Added Tax (VAT) | Provision of real estate operating lease services (simplified taxation) | 5% | | Value-Added Tax (VAT) | Sales of used fixed assets | 9% | | Urban Maintenance and Construction Tax | Actual paid turnover tax | 7%, 5% | | Corporate Income Tax | Taxable income | Varies by entity | | Education Surcharge | Actual paid turnover tax | 3% | | Local Education Surcharge | Actual paid turnover tax | 2% | - Huasi Holdings Co, Ltd has been qualified as a high-tech enterprise for a three-year period, entitling it to a preferential national income tax rate of **15%**[341](index=341&type=chunk) [Notes to Consolidated Financial Statements](index=105&type=section&id=%E4%B8%83%E3%80%81%E5%90%88%E5%B9%B6%E8%B4%A2%E5%8A%A1%E6%8A%A5%E8%A1%A8%E9%A1%B9%E7%9B%AE%E6%B3%A8%E9%87%8A) This section provides detailed notes on the items in the consolidated financial statements, highlighting key balances and changes Cash and Cash Equivalents | Item | Closing Balance (Yuan) | Opening Balance (Yuan) | | :--- | :--- | :--- | | Cash on Hand | 954,065.39 | 576,916.09 | | Bank Deposits | 134,471,689.25 | 152,280,277.95 | | Other Cash Equivalents | 16,572,559.40 | 17,446,734.85 | | Total | 151,998,314.04 | 170,303,928.89 | | Of which: Total funds held overseas | 2,673,644.78 | 12,816,146.15 | | Of which: Frozen bank deposits | 11,769,751.00 | 11,769,751.00 | Accounts Receivable | Item | Closing Book Balance (Yuan) | Closing Bad Debt Provision (Yuan) | Closing Book Value (Yuan) | | :--- | :--- | :--- | :--- | | Total | 59,339,975.20 | 26,220,040.11 | 33,119,935.09 | Inventory | Item | Closing Book Balance (Yuan) | Closing Inventory Write-down (Yuan) | Closing Book Value (Yuan) | | :--- | :--- | :--- | :--- | | Raw Materials | 2,599,559.95 | 404,641.95 | 2,194,918.00 | | Finished Goods | 130,241,496.63 | 5,129,395.69 | 125,112,100.94 | | Work in Progress | 380,157,459.92 | 49,446,592.15 | 330,710,867.77 | | Total | 512,998,516.50 | 54,980,629.79 | 458,017,886.71 | Short-term Borrowings | Item | Closing Balance (Yuan) | Opening Balance (Yuan) | | :--- | :--- | :--- | | Secured Loans | 57,000,000.00 | 140,000,000.00 | | Accrued Interest Payable | 39,900.00 | 145,000.00 | | Total | 57,039,900.00 | 180,145,000.00 | Long-term Borrowings | Item | Closing Balance (Yuan) | Opening Balance (Yuan) | | :--- | :--- | :--- | | Secured Loans | 83,000,000.00 | | | Accrued Interest Payable | 58,100.00 | | | Total | 83,058,100.00 | | Operating Revenue and Costs | Item | Current Period Revenue (Yuan) | Current Period Costs (Yuan) | Prior Period Revenue (Yuan) | Prior Period Costs (Yuan) | | :--- | :--- | :--- | :--- | :--- | | Main Business | 139,644,609.89 | 94,548,567.98 | 127,826,127.07 | 95,821,266.35 | | Other Business | 15,299,160.26 | 13,449,720.33 | 128,366,608.34 | 92,219,606.22 | | Total | 154,943,770.15 | 107,998,288.31 | 256,192,735.41 | 188,040,872.57 | R&D Expenditure [R&D Expenditure](index=145&type=section&id=%E7%A0%94%E5%8F%91%E6%94%AF%E5%87%BA) The company's R&D expenditure for the period was 4,088,159.98 Yuan, all of which was expensed R&D Expenditure Breakdown | Item | Current Period Amount (Yuan) | Prior Period Amount (Yuan) | | :--- | :--- | :--- | | Personnel Costs | 1,336,739.00 | 1,171,406.00 | | Raw Materials, Fuel, and Others | 2,751,420.98 | 2,650,929.24 | | Total | 4,088,159.98 | 3,822,335.24 | | Of which: Expensed R&D Expenditure | 4,088,159.98 | 3,822,335.24 | Changes in the Scope of Consolidation [Changes in Consolidation Scope for Other Reasons](index=145&type=section&id=1%E3%80%81%E5%85%B6%E4%BB%96%E5%8E%9F%E5%9B%A0%E7%9A%84%E5%90%88%E5%B9%B6%E8%8C%83%E5%9B%B4%E5%8F%98%E5%8A%A8) The company's scope of consolidation did not change during the reporting period - The company's scope of consolidation did not change during the reporting period[547](index=547&type=chunk) Interests in Other Entities [Interests in Subsidiaries](index=145&type=section&id=1%E3%80%81%E5%9C%A8%E5%AD%90%E5%85%AC%E5%8F%B8%E4%B8%AD%E7%9A%84%E6%9D%83%E7%9B%8A) The company has 18 subsidiaries engaged in various businesses, with most being wholly-owned - The company has **18 subsidiaries**, including Suning County Jingnan Fur City Co, Ltd, Beijing Huasi Garment Co, Ltd, and Hebei Huasi Life Shopping Plaza Trading Co, Ltd[549](index=549&type=chunk)[550](index=550&type=chunk) - The subsidiaries' business activities are diverse, covering leather market development, trade services, shopping mall management, auctions, breeding, technology development, and internet sales[549](index=549&type=chunk)[550](index=550&type=chunk) - Most subsidiaries are **100% directly owned**, while some are indirectly held or acquired through business combinations not under common control[549](index=549&type=chunk)[550](index=550&type=chunk) Government Grants [Liability Items Involving Government Grants](index=147&type=section&id=2%E3%80%81%E6%B6%89%E5%8F%8A%E6%94%BF%E5%BA%9C%E8%A1%A5%E5%8A%A9%E7%9A%84%E8%B4%9F%E5%80%BA%E9%A1%B9%E7%9B%AE) The closing balance of deferred income related to government grants was 15,740,707.61 Yuan Liability Items Involving Government Grants | Account | Opening Balance (Yuan) | New Grants (Yuan) | Recognized in Non-operating Income (Yuan) | Transferred to Other Income (Yuan) | Other Changes (Yuan) | Closing Balance (Yuan) | Asset/Income Related | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Deferred Income | 9,630,765.61 | 7,000,000.00 | | 890,058.00 | | 15,740,707.61 | Asset-related | [Government Grants Recognized in Current Profit or Loss](index=147&type=section&id=3%E3%80%81%E8%AE%A1%E5%85%A5%E5%BD%93%E6%9C%9F%E6%8D%9F%E7%9B%8A%E7%9A%84%E6%94%BF%E5%BA%9C%E8%A1%A5%E5%8A%A9) Government grants recognized in other income for the current period amounted to 309,669.17 Yuan Government Grants Recognized in Current Profit or Loss | Account | Current Period Amount (Yuan) | Prior Period Amount (Yuan) | | :--- | :--- | :--- | | Other Income | 309,669.17 | 735,971.21 | Risks Related to Financial Instruments [Risks Arising from Financial Instruments](index=147&type=section&id=1%E3%80%81%E9%87%91%E8%9E%8D%E5%B7%A5%E5%85%B7%E4%BA%A7%E7%94%9F%E7%9A%84%E5%90%84%E7%B1%BB%E9%A3%8E%E9%99%A9) The company manages credit, liquidity, and market risks through established policies and monitoring procedures - The company's main financial instruments include cash, equity investments, borrowings, receivables, and payables, exposing it to **credit risk, liquidity risk, and market risk** (exchange rate and interest rate risk)[552](index=552&type=chunk) - The company manages credit risk by establishing credit policies, continuously monitoring receivables, and diversifying bank deposits[554](index=554&type=chunk)[555](index=555&type=chunk) Book Balance and Expected Credit Loss of Relevant Assets | Item | Book Balance (Yuan) | Impairment Provision (Yuan) | | :--- | :--- | :--- | | Receivables Financing | 1,687,737.30 | | | Accounts Receivable | 59,339,975.20 | 26,220,040.11 | | Other Receivables | 5,846,803.44 | 3,925,439.22 | | Long-term Receivables (including current portion) | 1,866,885.00 | 1,866,885.00 | | Total | 68,741,400.94 | 32,012,364.33 | Undiscounted Contractual Cash Flows of Financial Liabilities and Off-Balance Sheet Guarantees by Remaining Maturity | Item | Within 1 Year (Yuan) | 1-5 Years (Yuan) | Over 5 Years (Yuan) | Total (Yuan) | | :--- | :--- | :--- | :--- | :--- | | Short-term Borrowings | 57,039,900.00 | | | 57,039,900.00 | | Accounts Payable | 54,259,232.41 | | | 54,259,232.41 | | Other Payables | 65,585,277.94 | | | 65,585,277.94 | | Other Current Liabilities | 1,711,163.30 | | | 1,711,163.30 | | Lease Liabilities (including current portion) | 4,126,430.64 | 9,344,313.85 | | 13,470,744.49 | | Long-term Borrowings | | 83,058,100.00 | | 83,058,100.00 | | Total | 182,722,004.29 | 92,402,413.85 | | 275,124,418.14 | - The company is exposed to exchange rate risk mainly related to USD, HKD, DKK, and EUR, but the risk is not significant due to the low proportion of foreign currency business in its asset, liability, and revenue structure[558](index=558&type=chunk)[559](index=559&type=chunk) - The company's interest rate risk mainly arises from bank borrowings and is managed by continuously monitoring interest rate levels and adjusting the ratio of fixed to floating rate contracts[560](index=560&type=chunk)[561](index=561&type=chunk) Disclosure of Fair Value [Fair Value of Assets and Liabilities Measured at Fair Value at Period End](index=150&type=section&id=1%E3%80%81%E4%BB%A5%E5%85%AC%E5%85%81%E4%BB%B7%E5%80%BC%E8%AE%A1%E9%87%8F%E7%9A%84%E8%B5%84%E4%BA%A7%E5%92%8C%E8%B4%9F%E5%80%BA%E7%9A%84%E6%9C%9F%E6%9C%AB%E5%85%AC%E5%85%81%E4%BB%B7%E5%80%BC) The total fair value of assets measured on a recurring basis was 1,687,737.30 Yuan, all classified as Level 3 Fair Value of Assets and Liabilities Measured at Fair Value at Period End | Item | Level 1 Fair Value (Yuan) | Level 2 Fair Value (Yuan) | Level 3 Fair Value (Yuan) | Total (Yuan) | | :--- | :--- | :--- | :--- | :--- | | I. Recurring Fair Value Measurements | | | | | | (III) Other Equity Instrument Investments | | | 1,687,737.30 | 1,687,737.30 | | Total Assets Measured at Fair Value on a Recurring Basis | | | 1,687,737.30 | 1,687,737.30 | Related Parties and Related Party Transactions [Information on the Company's Subsidiaries](index=151&type=section&id=1%E3%80%81%E6%9C%AC%E4%BC%81%E4%B8%9A%E7%9A%84%E5%AD%90%E5%85%AC%E5%8F%B8%E6%83%85%E5%86%B5) Details of the company's subsidiaries are provided in Note VIII (I) Interests in Subsidiaries - Details of the company's subsidiaries are provided in Note VIII (I) Interests in Subsidiaries[565](index=565&type=chunk) [Information on the Company's Joint Ventures and Associates](index=151&type=section&id=2%E3%80%81%E6%9C%AC%E4%BC%81%E4%B8%9A%E5%90%88%E8%90%A5%E5%92%8C%E8%81%94%E8%90%A5%E4%BC%81%E4%B8%9A%E6%83%85%E5%86%B5) Details of the company's significant joint ventures or associates are provided in Note VIII (II) Interests in Joint Arrangements or Associates - Details of the company's significant joint ventures or associates are provided in Note VIII (II) Interests in Joint Arrangements or Associates[566](index=566&type=chunk) [Other Related Parties](index=151&type=section&id=3%E3%80%81%E5%85%B6%E4%BB%96%E5%85%B3%E8%81%94%E6%96%B9%E6%83%85%E5%86%B5) The company's actual controller, He Guoying, is an other related party with a 31.99% shareholding Information on the Company's Parent Company | Related Party Name | Relationship | Shareholding Amount (10,000 Yuan) | Shareholding Ratio | Ultimate Controlling Party | | :--- | :--- | :--- | :--- | :--- | | He Guoying | Actual Controller | 12,072.0374 | 31.99% | Yes | [Related Party Transactions](index=151&type=section&id=4%E3%80%81%E5%85%B3%E8%81%94%E4%BA%A4%E6%98%93%E6%83%85%E5%86%B5) Remuneration for key management personnel totaled 866,700.00 Yuan during the reporting period Key Management Personnel Remuneration | Item | Current Period Amount (Yuan) | Prior Period Amount (Yuan) | | :--- | :--- | :--- | | Key Management Personnel Compensation | 866,700.00 | 880,300.00 | Commitments and Contingencies [Significant Commitments](index=151&type=section&id=1%E3%80%81%E9%87%8D%E8%A6%81%E6%89%BF%E8%AF%BA%E4%BA%8B%E9%A1%B9) The company has no significant commitments to disclose - The company has no significant commitments to disclose[569](index=569&type=chunk) [Contingencies](index=152&type=section&id=2%E3%80%81%E6%88%96%E6%9C%89%E4%BA%8B%E9%A1%B9) The company is involved in a pending lawsuit regarding a dispute over processing fees and has provisioned for potential liabilities - The company is involved in a pending lawsuit with Hebei Xitang Garment Co, Ltd, concerning a dispute over garment processing fees[570](index=570&type=chunk) - The first-instance judgment ordered Huasi Shares to pay the plaintiff **11,566,881.56 Yuan** plus interest; the company has appealed, and the case is pending a final verdict[571](index=571&type=chunk) - As of the period end, the company has prudently provisioned **5,690,877.49 Yuan** as an estimated liability for the pending litigation in accordance with accounting standards[571](index=571&type=chunk) - The company has no other significant contingencies to disclose[572](index=572&type=chunk) Post-Balance Sheet Events [Explanation of Other Post-Balance Sheet Events](index=152&type=section&id=1%E3%80%81%E5%85%B6%E4%BB%96%E8%B5%84%E4%BA%A7%E8%B4%9F%E5%80%BA%E8%A1%A8%E6%97%A5%E5%90%8E%E4%BA%8B%E9%A1%B9%E8%AF%B4%E6%98%8E) The company has no significant post-balance sheet events to disclose - As of the approval date of the financial report, the company has no significant undisclosed post-balance sheet events[573](index=573&type=chunk) Other Important Matters [Other](index=152&type=section&id=1%E3%80%81%E5%85%B6%E4%BB%96) The company has no other important matters to disclose - As of the approval date of the financial report, the company has no other important undisclosed matters to explain[574](index=574&type=chunk) Notes to the Parent Company's Financial Statements [Accounts Receivable](index=153&type=section&id=1%E3%80%81%E5%BA%94%E6%94%B6%E8%B4%A6%E6%AC%BE) The parent company's accounts receivable had a book value of 97,293,496.05 Yuan at the period end Parent Company Accounts Receivable by Bad Debt Provision Method | Category | Closing Book Balance (Yuan) | Closing Bad Debt Provision (Yuan) | Closing Book Value (Yuan) | | :--- | :--- | :--- | :--- | | Individually Assessed for Bad Debt | 20,937,908.44 | 20,937,908.44 | | | Collectively Assessed for Bad Debt | 100,687,291.46 | 3,393,795.41 | 97,293,496.05 | | Total | 121,625,199.90 | 24,331,703.85 | 97,293,496.05 | - The amount of accounts receivable actually written off during the reporting period was **73,554.93 Yuan**[586](index=586&type=chunk)[587](index=587&type=chunk) [Other Receivables](index=155&type=section&id=2%E3%80%81%E5%85%B6%E4%BB%96%E5%BA%94%E6%94%B6%E6%AC%BE) The parent company's other receivables are primarily composed of funds due from related parties Parent Company Other Receivables by Nature | Nature of Funds | Closing Book Balance (Yuan) | Opening Book Balance (Yuan) | | :--- | :--- | :--- | | Related Party Funds | 302,740,405.19 | 306,139,481.44 | | Deposits and Guarantees | 253,800.00 | 309,600.00 | | Third-party Transactions and Others | 3,014,041.38 | 2,478,416.62 | | Less: Bad Debt Provision | -2,140,994.53 | -2,154,502.98 | | Total | 303,867,252.04 | 306,772,995.08 | Parent Company Other Receivables by Aging | Aging | Closing Book Balance (Yuan) | | :--- | :--- | | Within 1 year (inclusive) | 6,437,678.56 | | 1 to 2 years | 143,599,960.00 | | 2 to 3 years | 141,529,991.39 | | Over 3 years | 14,440,616.62 | | Total | 306,008,246.57 | Top Five Debtors of Parent Company Other Receivables | Debtor Name | Nature of Funds | Closing Balance (Yuan) | % of Total Other Receivables | Closing Bad Debt Provision (Yuan) | | :--- | :--- | :--- | :--- | :--- | | First | Intra-group related party | 199,000,090.24 | 65.03% | | | Second | Intra-group related party | 56,867,642.15 | 18.58% | | | Third | Intra-group related party | 46,869,019.00 | 15.32% | | | Fourth | Court-frozen funds | 2,448,416.62 | 0.80% | 1,958,733.30 | | Fifth | Petty cash | 300,000.00 | 0.10% | | | Total | | 305,485,168.01 | 99.83% | 1,958,733.30 | [Long-term Equity Investments](index=158&type=section&id=3%E3%80%81%E9%95%BF%E6%9C%9F%E8%82%A1%E6%9D%83%E6%8A%95%E8%B5%84) The parent company's long-term equity investments consist entirely of investments in subsidiaries and remained unchanged Parent Company Long-term Equity Investments | Item | Closing Book Balance (Yuan) | Closing Impairment Provision (Yuan) | Closing Book Value (Yuan) | | :--- | :--- | :--- | :--- | | Investments in Subsidiaries | 426,668,313.50 | | 426,668,313.50 | | Total | 426,668,313.50 | | 426,668,313.50 | - The closing balance of the parent company's investments in subsidiaries was **426,668,313.50 Yuan**, with no change during the reporting period[609](index=609&type=chunk)[610](index=610&type=chunk) [Operating Revenue and Costs](index=159&type=section&id=4%E3%80%81%E8%90%A5%E4%B8%9A%E6%94%B6%E5%85%A5%E5%92%8C%E8%90%A5%E4%B8%9A%E6%88%90%E6%9C%AC) The parent company's operating revenue was 111,616,627.97 Yuan, primarily driven by fur clothing and pelt sales Parent Company Operating Revenue and Costs | Item | Current Period Revenue (Yuan) | Current Period Costs (Yuan) | Prior Period Revenue (Yuan) | Prior Period Costs (Yuan) | | :--- | :--- | :--- | :--- | :--- | | Main Business | 96,583,515.21 | 71,429,368.43 | 66,166,251.85 | 51,340,596.15 | | Other Business | 15,033,112.76 | 13,361,628.70 | 121,354,767.14 | 87,523,947.09 | | Total | 111,616,627.97 | 84,790,997.13 | 187,521,018.99 | 138,864,543.24 | Parent Company Operating Revenue Breakdown (by Business Type) | Business Type | Operating Revenue (Yuan) | | :--- | :--- | | Fur Pelts | 29,761,680.60 | | Fur Fabrics | 85,725.83 | | Fur Accessories | 1,036,871.92 | | Fur Clothing | 49,601,616.06 | | Fashion Apparel | 569,026.60 | | Commercial Complex Business (excluding leasing) | 6,564,940.70 | | Processing Income | 2,345,895.76 | | Other Income | 1,002,346.56 | Parent Company Operating Revenue Breakdown (by Region) | Region | Operating Revenue (Yuan) | | :--- | :--- | | Domestic | 79,481,813.02 | | International | 11,486,291.01 | [Investment Income](index=160&type=section&id=5%E3%80%81%E6%8A%95%E8%B5%84%E6%94%B6%E7%9B%8A) The parent company had no investment income in the current period, compared to 16,680,000.00 Yuan in the prior period Parent Company Investment Income | Item | Current Period Amount (Yuan) | Prior Period Amount (Yuan) | | :--- | :--- | :--- | | Long-term Equity Investment Income under Cost Method | | 16,680,000.00 | | Total | | 16,680,000.00 | Supplementary Information [Details of Current Non-recurring Profit and Loss](index=161&type=section&id=1%E3%80%81%E5%BD%93%E6%9C%9F%E9%9D%9E%E7%BB%8F%E5%B8%B8%E6%80%A7%E6%8D%9F%E7%9B%8A%E6%98%8E%E7%BB%86%E8%A1%A8) Non-recurring profit and loss for the period totaled 883,121.08 Yuan, mainly from asset disposals and government grants Details of Current Non-recurring Profit and Loss | Item | Amount (Yuan) | | :--- | :--- | | Gain/Loss on Disposal of Non-current Assets | 9,761.16 | | Government Grants Included in Current Profit or Loss | 1,199,727.17 | | Other Non-operating In

Part I Important Notice, Table of Contents, and Definitions [Important Notice](index=2&type=section&id=Important%20Notice) The board, supervisory board, and senior management guarantee the annual report's truthfulness and completeness, with the company planning no cash dividends or bonus shares - The company's board of directors, supervisory board, and senior management guarantee the truthfulness, accuracy, and completeness of the annual report content[4](index=4&type=chunk) - Company head Guo Shaozeng, chief accountant Gao Hong, and accounting department head Gao Hong declare the financial report is true, accurate, and complete[4](index=4&type=chunk) - The company plans not to distribute cash dividends, bonus shares, or convert capital reserves into share capital[6](index=6&type=chunk) [Table of Contents](index=3&type=section&id=Table%20of%20Contents) This section outlines the annual report's ten main chapters, covering company operations, finance, governance, and social responsibility, along with reference documents - The report's table of contents includes ten main chapters, covering various aspects of the company's operations, finance, governance, and social responsibility[8](index=8&type=chunk) - Reference documents include signed and sealed financial statements, original audit reports, and publicly disclosed documents[10](index=10&type=chunk) [Definitions](index=5&type=section&id=Definitions) This section defines key terms used in the report, including regulatory bodies, company entities, financial units, and the reporting period, for clarity - Definitions cover regulatory bodies, exchanges, the company and its main subsidiaries, controlling shareholders, and key transaction parties[12](index=12&type=chunk) - The reporting period is defined as January 1, 2021, to December 31, 2021[12](index=12&type=chunk) Part II Company Profile and Key Financial Indicators [I. Company Information](index=6&type=section&id=I.%20Company%20Information) Kingland Technology Co., Ltd. (stock code 000711) is legally represented by Guo Shaozeng, with its registered office in Harbin and main office in Beijing Company Basic Information | Indicator | Content | | :--- | :--- | | Stock Abbreviation | Kingland Technology | | Stock Code | 000711 | | Listing Exchange | Shenzhen Stock Exchange | | Chinese Name | 京蓝科技股份有限公司 | | Legal Representative | Guo Shaozeng | | Registered Address | Nangang Economic and Technological Development Zone, Harbin, Heilongjiang Province | | Office Address | 4th Floor, Building B, Hongyuan Headquarters Plaza, Fengtai District, Beijing | | Company Website | http://www.kinglandgroup.com | | Email | securities@kinglandgroup.com | [II. Contact Person and Contact Information](index=6&type=section&id=II.%20Contact%20Person%20and%20Contact%20Information) Guo Shaozeng serves as the company's board secretary, sharing the same contact details as the company's main office Board Secretary Contact Information | Name | Guo Shaozeng | | :--- | :--- | | Contact Address | 4th Floor, Building B, Hongyuan Headquarters Plaza, Fengtai District, Beijing | | Phone | 010-64700268 | | Fax | 010-64700268 | | Email | securities@kinglandgroup.com | [III. Information Disclosure and Document Availability](index=6&type=section&id=III.%20Information%20Disclosure%20and%20Document%20Availability) The annual report is disclosed on Juchao Information Network and major securities newspapers, with physical copies available at the Board Secretary's Office - The company's annual report disclosure website is Juchao Information Network (http://www.cninfo.com.cn)[16](index=16&type=chunk) - Disclosure media include China Securities Journal, Securities Times, and Shanghai Securities News[16](index=16&type=chunk) - The company's annual report is available at the Board Secretary's Office[16](index=16&type=chunk) [IV. Registration Change Status](index=7&type=section&id=IV.%20Registration%20Change%20Status) The company's main business has diversified from high-tech to ecological environmental protection and soil remediation, with its controlling shareholder, Beijing Yangshu Lantian Investment Center, holding 16.68% of shares - The company's main business has undergone multiple transformations, from high-tech, tourism, real estate, and information technology, finally shifting to ecological environmental protection in 2016-2017, and expanding to soil remediation in 2018[17](index=17&type=chunk) - The controlling shareholder has changed multiple times; as of the end of the reporting period, Beijing Yangshu Lantian Investment Center (Limited Partnership) holds **16.68%** of the company's shares[17](index=17&type=chunk) [V. Other Relevant Information](index=7&type=section&id=V.%20Other%20Relevant%20Information) Zhongxingcai Guanghua Certified Public Accountants audited the company, with Huatai United Securities Co., Ltd. serving as financial advisor until December 31, 2021 Accounting Firm Information | Indicator | Content | | :--- | :--- | | Name | Zhongxingcai Guanghua Certified Public Accountants (Special General Partnership) | | Office Address | 24th Floor, Block A, Wantong Building, No. 2 Fuchengmenwai Street, Xicheng District, Beijing | | Signing Accountants | Li Xiaofei, Gao Tao | - The company appointed Huatai United Securities Co., Ltd. as its financial advisor, with the continuous supervision period ending on December 31, 2021[18](index=18&type=chunk) [VI. Key Accounting Data and Financial Indicators](index=8&type=section&id=VI.%20Key%20Accounting%20Data%20and%20Financial%20Indicators) In 2021, the company reported 901 million yuan in revenue, a **9.49% decrease**, and a net loss of **1.483 billion yuan**, a **38.18% reduction** in loss, with total assets and net assets declining 2021 Key Accounting Data and Financial Indicators | Indicator | 2021 | 2020 (Adjusted) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Operating Revenue (Yuan) | 900,915,302.39 | 995,410,211.62 | -9.49% | | Net Profit Attributable to Listed Company Shareholders (Yuan) | -1,483,433,591.44 | -2,399,698,095.52 | 38.18% | | Net Profit Attributable to Listed Company Shareholders Excluding Non-Recurring Gains and Losses (Yuan) | -1,500,866,940.58 | -2,440,142,895.01 | 38.49% | | Net Cash Flow from Operating Activities (Yuan) | 57,336,149.76 | 60,169,476.13 | -4.71% | | Basic Earnings Per Share (Yuan/Share) | -1.45 | -2.34 | 38.03% | | Diluted Earnings Per Share (Yuan/Share) | -1.45 | -2.34 | 38.03% | | Weighted Average Return on Net Assets | -102.25% | -69.79% | -45.85% | | Total Assets (Yuan) | 8,736,630,706.68 | 9,671,022,194.26 | -9.66% | | Net Assets Attributable to Listed Company Shareholders (Yuan) | 671,442,154.41 | 2,229,544,945.43 | -69.88% | - In 2020, Zhongke Dingzhi inflated operating revenue by **163 million yuan** and total profit by **66.3637 million yuan**, leading to retrospective adjustments for 2020 and 2021 related accounts[19](index=19&type=chunk) [VII. Differences in Accounting Data Under Domestic and International Accounting Standards](index=8&type=section&id=VII.%20Differences%20in%20Accounting%20Data%20Under%20Domestic%20and%20International%20Accounting%20Standards) The company reported no differences in net profit or net assets between domestic and international accounting standards during the period - The company's financial reports for the reporting period show no differences in net profit and net assets when disclosed under International Accounting Standards versus Chinese Accounting Standards[21](index=21&type=chunk) - The company's financial reports for the reporting period show no differences in net profit and net assets when disclosed under overseas accounting standards versus Chinese Accounting Standards[22](index=22&type=chunk) [VIII. Key Quarterly Financial Indicators](index=9&type=section&id=VIII.%20Key%20Quarterly%20Financial%20Indicators) The company's Q4 2021 operating revenue was 296 million yuan, with a significant net loss of **1.14 billion yuan** attributable to shareholders 2021 Key Quarterly Financial Indicators (Unit: Yuan) | Indicator | Q1 | Q2 | Q3 | Q4 | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue | 123,776,572.64 | 308,991,006.78 | 172,621,917.30 | 295,525,805.67 | | Net Profit Attributable to Listed Company Shareholders | -89,977,974.67 | -129,955,623.36 | -123,619,631.80 | -1,139,880,361.61 | | Net Profit Attributable to Listed Company Shareholders Excluding Non-Recurring Gains and Losses | -92,192,480.65 | -133,323,575.79 | -100,528,419.47 | -1,174,822,464.67 | | Net Cash Flow from Operating Activities | -30,124,848.00 | 45,560,641.93 | 42,843,299.49 | -942,943.66 | - In the fourth quarter, net profit attributable to listed company shareholders and net profit after deducting non-recurring gains and losses both showed significant losses, at **-1.14 billion yuan** and **-1.175 billion yuan**, respectively[24](index=24&type=chunk) [IX. Non-Recurring Gains and Losses Items and Amounts](index=9&type=section&id=IX.%20Non-Recurring%20Gains%20and%20Losses%20Items%20and%20Amounts) Total non-recurring gains and losses in 2021 were **17.4333 million yuan**, mainly from asset disposal, government subsidies, and fair value changes 2021 Non-Recurring Gains and Losses Items and Amounts (Unit: Yuan) | Item | 2021 Amount | | :--- | :--- | | Disposal Gains and Losses on Non-Current Assets | 985,974.70 | | Government Subsidies Included in Current Profit and Loss | 3,789,662.23 | | Capital Occupation Fees Received from Non-Financial Enterprises Included in Current Profit and Loss | 14,209,351.44 | | Debt Restructuring Gains and Losses | 2,539,422.52 | | Reversal of Impairment Provisions for Receivables Subject to Individual Impairment Testing | 402,453.51 | | Fair Value Change Gains and Losses | 26,641,195.32 | | Other Non-Operating Income and Expenses Apart from the Above | -30,783,028.08 | | Less: Income Tax Impact | 31,162.13 | | Impact on Minority Interests (After Tax) | 320,520.37 | | Total | 17,433,349.14 | - Total non-recurring gains and losses in 2021 amounted to **17.4333 million yuan**, with fair value change gains and losses at **26.6412 million yuan**[25](index=25&type=chunk)[26](index=26&type=chunk) Part III Management Discussion and Analysis [I. Industry Overview During the Reporting Period](index=11&type=section&id=I.%20Industry%20Overview%20During%20the%20Reporting%20Period) The company operates in soil remediation, ecological water conservancy, and landscape environment sectors, all benefiting from policy support and market growth, despite facing various industry barriers [I. Soil Remediation Industry Analysis](index=11&type=section&id=I.%20Soil%20Remediation%20Industry%20Analysis) The soil remediation industry, driven by environmental policies, offers significant market potential but is characterized by high technical, qualification, funding, and management barriers - The soil remediation industry reduces soil pollutant concentrations to acceptable levels using physical, chemical, or biological methods[28](index=28&type=chunk) - The 'Soil Pollution Prevention and Control Law of the People's Republic of China,' effective January 1, 2019, clarifies responsibilities and promotes industry development[29](index=29&type=chunk) - Industry barriers include high technical thresholds, stringent multi-domain qualification requirements, large project capital investment with long payback periods, and a shortage of professional management talent[30](index=30&type=chunk)[31](index=31&type=chunk)[32](index=32&type=chunk)[33](index=33&type=chunk) [II. Ecological Water Conservancy Industry Analysis](index=12&type=section&id=II.%20Ecological%20Water%20Conservancy%20Industry%20Analysis) The ecological water conservancy industry, a growing interdisciplinary field, benefits from increasing national investment and social capital, with water-saving irrigation poised for a trillion-yuan market during the '14th Five-Year Plan' - The ecological water conservancy industry is an interdisciplinary field combining water conservancy engineering and ecological protection, studying water cycles, ecological carrying capacity, engineering ecological effects, and system management[37](index=37&type=chunk)[38](index=38&type=chunk) - The state highly values water conservancy construction, continuously expanding investment and introducing social capital for quasi-public and commercial water conservancy projects[40](index=40&type=chunk)[41](index=41&type=chunk)[44](index=44&type=chunk) - China's agricultural water use efficiency is low, creating vast market space for water-saving irrigation, with the ecological water conservancy industry market size projected to reach **trillions of yuan** during the '14th Five-Year Plan' period[45](index=45&type=chunk)[46](index=46&type=chunk) [III. Landscape Environment Industry Analysis](index=13&type=section&id=III.%20Landscape%20Environment%20Industry%20Analysis) The landscape environment industry, encompassing design, construction, and maintenance, is moving towards integrated, cross-regional, and resource-efficient ecological landscaping to enhance environmental quality - The landscape environment industry integrates design, planning, construction, and management art to create beneficial environments, primarily including landscape design, engineering construction, and greening maintenance[47](index=47&type=chunk) - Industry trends include integrated operations and cross-regional competition, with leading enterprises gaining larger market shares and increasing industry concentration[49](index=49&type=chunk) - Resource-efficient ecological landscaping is a future development direction, emphasizing ecological principles and the concepts of 'water saving, energy saving, and consumption reduction' to improve the ecological environment[50](index=50&type=chunk) - Soil remediation industry benefits from 'Soil Pollution Prevention and Control Law' policies, clarifying responsibilities, but faces technical, qualification, funding, and management barriers[29](index=29&type=chunk)[30](index=30&type=chunk)[31](index=31&type=chunk)[32](index=32&type=chunk)[33](index=33&type=chunk) - Ecological water conservancy industry sees expanding investment and social capital participation due to national emphasis, with urgent water-saving irrigation demand and a projected trillion-yuan market during the '14th Five-Year Plan'[40](index=40&type=chunk)[41](index=41&type=chunk)[44](index=44&type=chunk)[45](index=45&type=chunk)[46](index=46&type=chunk) - Landscape environment industry is evolving towards integrated operations, cross-regional competition, and resource-efficient ecological landscaping, leading to increased industry concentration[49](index=49&type=chunk)[50](index=50&type=chunk) [II. Company's Main Businesses During the Reporting Period](index=14&type=section&id=II.%20Company's%20Main%20Businesses%20During%20the%20Reporting%20Period) The company focuses on comprehensive soil environmental governance, ecological water conservancy, ecological environment, and smart ecology, primarily operating through general contracting and EPC project models - The company's business segments include comprehensive soil environmental governance, ecological water conservancy, ecological environment, and smart ecology, forming a positive synergy[51](index=51&type=chunk) - Comprehensive soil environmental governance is undertaken by Zhongke Dingzhi, providing full-process system services such as contaminated soil and groundwater remediation[51](index=51&type=chunk) - Ecological water conservancy business is undertaken by Kingland Muhe, offering integrated solutions for watershed ecological restoration, irrigation district water-saving systems, and wastewater treatment[52](index=52&type=chunk) - Ecological environment business is undertaken by Northern Landscape and others, providing services such as landscape engineering construction, landscape design, greening maintenance, and seedling cultivation and sales[53](index=53&type=chunk) - The company's primary operating models are general contracting and EPC projects, generating profits through progress payments and final settlements[53](index=53&type=chunk) [III. Core Competitiveness Analysis](index=15&type=section&id=III.%20Core%20Competitiveness%20Analysis) The company's core competitiveness stems from its mission, values, and strategy to be a leading ecological environment service provider, supported by over 300 patents, high-value qualifications, strategic alignment, and an experienced management team - The company's mission is 'Green Mountains, Clear Waters, Blue Skies, and a Century-Long Chinese Dream,' with 'Benevolence Like Water, Perseverance, and Virtue' as its core values[54](index=54&type=chunk) - The company's development strategy is to become a leading international 'ecological environment planning, investment, construction, and operation service provider'[54](index=54&type=chunk) - The company possesses core technologies in soil remediation, water treatment, and agricultural waste recycling, with over **300 national patents** and high-value qualifications such as Environmental Engineering Professional Contracting Grade A and Landscape Architecture Engineering Design Grade A[54](index=54&type=chunk) - The company's main businesses are in national strategic investment areas, with vast market potential in soil remediation and smart water conservancy, where the company holds leading advantages and competitive barriers[55](index=55&type=chunk) - The company's management and core team have over **10 years of experience** in ecological and information technology fields, possessing strong industry resource integration capabilities[55](index=55&type=chunk) [IV. Main Business Analysis](index=16&type=section&id=IV.%20Main%20Business%20Analysis) The company's diversified strategy focuses on four ecological business segments; 2021 revenue was 901 million yuan, down **9.49%**, with soil remediation growing **14.90%**, while expenses decreased and R&D increased [1. Overview](index=16&type=section&id=1.%20Overview) The company pursues a diversified strategy, combining organic growth and external expansion across four ecological business segments, with subsidiaries specializing in soil remediation, ecological water conservancy, and environmental services - The company combines organic growth with external expansion, focusing on four major business segments: industrial ecology, ecological water conservancy, ecological environment, and smart ecology[57](index=57&type=chunk) - Zhongke Dingzhi primarily engages in soil and groundwater remediation, offering 'water-soil co-governance' one-stop environmental remediation solutions, and actively participates in national/provincial-level scientific research projects[57](index=57&type=chunk)[58](index=58&type=chunk) - Kingland Muhe, positioned as an agricultural steward and ecological expert, provides integrated water ecosystem solutions for projects such as efficient water saving and water source construction[58](index=58&type=chunk) - The ecological environment segment, undertaken by Northern Landscape and Kingland Environmental Technology, provides services such as landscape engineering construction and design, and increases investment in core soil remediation technology development[59](index=59&type=chunk) [2. Revenue and Costs](index=17&type=section&id=2.%20Revenue%20and%20Costs) In 2021, total operating revenue was 901 million yuan, down **9.49%**, with soil remediation revenue up **14.90%** to 791 million yuan, while total operating costs decreased by **35.06%** 2021 Operating Revenue Composition (Unit: Yuan) | By Industry | 2021 Amount | Proportion of Operating Revenue | 2020 Amount | Proportion of Operating Revenue | Year-on-Year Change | | :--- | :--- | :--- | :--- | :--- | :--- | | Total Operating Revenue | 900,915,302.39 | 100% | 995,410,211.62 | 100% | -9.49% | | Ecological Water-Saving Operation Services | 88,541,888.21 | 9.83% | 225,519,519.92 | 22.66% | -60.74% | | Soil Remediation Operation Services | 791,257,202.15 | 87.83% | 688,652,906.71 | 69.18% | 14.90% | 2021 Operating Cost Composition (Unit: Yuan) | Industry Category | 2021 Amount | Proportion of Operating Cost | 2020 Amount | Proportion of Operating Cost | Year-on-Year Change | | :--- | :--- | :--- | :--- | :--- | :--- | | Ecological Water-Saving Operation Services | 135,452,726.34 | 19.48% | 421,206,683.23 | 39.33% | -67.84% | | Soil Remediation Operation Services | 542,801,138.58 | 78.05% | 452,829,189.52 | 42.29% | 19.87% | - Operating revenue in East China increased by **67.32%** year-on-year, South China by **151.65%**, and Southwest China by **237.57%**[61](index=61&type=chunk) - During the reporting period, the company deregistered Zhongke Dingzhi (Yichun) Environmental Sanitation Services Co., Ltd., reducing the scope of consolidation by one entity[67](index=67&type=chunk) [3. Expenses](index=20&type=section&id=3.%20Expenses) In 2021, selling and administrative expenses decreased by **52.06%** and **44.89%** respectively due to efficiency, while R&D expenses increased by **39.74%** 2021 Major Expense Changes (Unit: Yuan) | Item | 2021 | 2020 | Year-on-Year Change | Explanation of Significant Change | | :--- | :--- | :--- | :--- | :--- | | Selling Expenses | 44,718,420.30 | 93,275,196.77 | -52.06% | Due to company's staff reduction and efficiency improvement, and cost cutting | | Administrative Expenses | 171,502,359.42 | 311,186,989.24 | -44.89% | Due to company's staff reduction and efficiency improvement, and cost cutting | | Financial Expenses | 654,528,411.97 | 638,639,261.89 | 2.49% | | | R&D Expenses | 38,967,224.02 | 27,886,486.05 | 39.74% | Due to increased R&D investment by the company | [4. R&D Investment](index=21&type=section&id=4.%20R%26D%20Investment) R&D investment in 2021 reached **38.9672 million yuan**, a **39.74% increase**, focusing on soil remediation and water-saving irrigation technologies, despite a decrease in R&D personnel 2021 R&D Investment Status | Indicator | 2021 | 2020 | Change Ratio | | :--- | :--- | :--- | :--- | | R&D Investment Amount (Yuan) | 38,967,224.02 | 27,886,486.05 | 39.74% | | R&D Investment as % of Operating Revenue | 4.33% | 2.80% | 1.53% | | Number of R&D Personnel (Persons) | 73 | 120 | -39.17% | - The company undertakes multiple national-level scientific research projects in soil remediation, such as coking site pollution control, pesticide industry site odor removal, complex organic pollution site remediation, and heavy metal pollution control in old industrial bases in Northeast China[72](index=72&type=chunk)[73](index=73&type=chunk)[74](index=74&type=chunk)[75](index=75&type=chunk) - In water-saving irrigation, the company develops solar-powered automatic control gates, nano-modified PE pipes, and drip irrigation tape application formulas to enhance product performance and market competitiveness[75](index=75&type=chunk)[76](index=76&type=chunk) [5. Cash Flow](index=26&type=section&id=5.%20Cash%20Flow) In 2021, net cash flow from operating activities was **57.3361 million yuan**, down **4.71%**, while investing activities turned positive, and financing activities significantly decreased due to loan repayments 2021 Cash Flow Status (Unit: Yuan) | Item | 2021 | 2020 | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Subtotal Cash Inflow from Operating Activities | 1,040,045,451.03 | 1,567,203,809.99 | -33.64% | | Subtotal Cash Outflow from Operating Activities | 982,709,301.27 | 1,507,034,333.86 | -34.79% | | Net Cash Flow from Operating Activities | 57,336,149.76 | 60,169,476.13 | -4.71% | | Subtotal Cash Inflow from Investing Activities | 40,325,008.46 | 37,246,064.01 | 8.27% | | Subtotal Cash Outflow from Investing Activities | 25,279,772.27 | 171,942,435.63 | -85.30% | | Net Cash Flow from Investing Activities | 15,045,236.19 | -134,696,371.62 | 111.17% | | Subtotal Cash Inflow from Financing Activities | 1,038,385,972.18 | 1,944,661,089.67 | -46.60% | | Subtotal Cash Outflow from Financing Activities | 1,245,022,604.40 | 1,848,043,526.36 | -32.63% | | Net Cash Flow from Financing Activities | -206,636,632.22 | 96,617,563.31 | -313.87% | | Net Increase in Cash and Cash Equivalents | -134,255,246.27 | 22,090,667.82 | -707.75% | - The decrease in net cash flow from operating activities was mainly due to a significant decline in operating revenue, but the company intensified collection efforts[78](index=78&type=chunk) - The positive shift in net cash flow from investing activities was primarily due to reduced purchases of fixed assets, intangible assets, other long-term assets, and investments[79](index=79&type=chunk) - The significant decrease in net cash flow from financing activities was mainly due to the repayment of some matured loans during the period[79](index=79&type=chunk) - The company's core business focuses on industrial ecology, ecological water conservancy, ecological environment, and smart ecology, providing full project cycle integrated solutions[57](index=57&type=chunk) 2021 Operating Revenue Composition (Unit: Yuan) | By Industry | 2021 Amount | Proportion of Operating Revenue | 2020 Amount | Proportion of Operating Revenue | Year-on-Year Change | | :--- | :--- | :--- | :--- | :--- | :--- | | Total Operating Revenue | 900,915,302.39 | 100% | 995,410,211.62 | 100% | -9.49% | | Ecological Water-Saving Operation Services | 88,541,888.21 | 9.83% | 225,519,519.92 | 22.66% | -60.74% | | Landscape Environmental Technology Services | 7,486,261.81 | 0.83% | 60,328,661.70 | 6.06% | -87.59% | | Soil Remediation Operation Services | 791,257,202.15 | 87.83% | 688,652,906.71 | 69.18% | 14.90% | | Other Industries | 13,629,950.22 | 1.51% | 20,909,123.29 | 2.10% | -34.81% | 2021 Major Expenses (Unit: Yuan) | Item | 2021 | 2020 | Year-on-Year Change | Explanation of Significant Change | | :--- | :--- | :--- | :--- | :--- | | Selling Expenses | 44,718,420.30 | 93,275,196.77 | -52.06% | Due to company's staff reduction and efficiency improvement, and cost cutting | | Administrative Expenses | 171,502,359.42 | 311,186,989.24 | -44.89% | Due to company's staff reduction and efficiency improvement, and cost cutting | | R&D Expenses | 38,967,224.02 | 27,886,486.05 | 39.74% | Due to increased R&D investment by the company | 2021 Cash Flow Status (Unit: Yuan) | Item | 2021 | 2020 | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 57,336,149.76 | 60,169,476.13 | -4.71% | | Net Cash Flow from Investing Activities | 15,045,236.19 | -134,696,371.62 | 111.17% | | Net Cash Flow from Financing Activities | -206,636,632.22 | 96,617,563.31 | -313.87% | [V. Non-Core Business Analysis](index=27&type=section&id=V.%20Non-Core%20Business%20Analysis) Non-core businesses significantly impacted 2021 profit, with **921 million yuan** in asset impairment losses, representing **56.55%** of total profit, and **26.6412 million yuan** from fair value changes, both unsustainable 2021 Impact of Non-Core Business on Total Profit (Unit: Yuan) | Item | Amount | Proportion of Total Profit | Explanation of Cause | Sustainability | | :--- | :--- | :--- | :--- | :--- | | Investment Income | -1,162,294.80 | 0.07% | Investment in associates | Yes | | Fair Value Change Gains and Losses | 26,641,195.32 | -1.64% | Performance guarantee share settlement | No | | Asset Impairment | -921,022,485.07 | 56.55% | Impairment of goodwill, inventories, and accounts receivable | No | | Non-Operating Income | 839,215.89 | -0.05% | | No | | Non-Operating Expenses | 31,019,382.66 | -1.90% | | No | - Asset impairment losses amounted to **921 million yuan**, accounting for **56.55%** of total profit, primarily due to impairment of goodwill, inventories, and accounts receivable, which is not sustainable[81](index=81&type=chunk) - Fair value change gains and losses amounted to **26.6412 million yuan**, resulting from performance guarantee share settlement, which is not sustainable[81](index=81&type=chunk) [VI. Analysis of Assets and Liabilities](index=27&type=section&id=VI.%20Analysis%20of%20Assets%20and%20Liabilities) At year-end 2021, total assets were **8.737 billion yuan**, down **9.66%**, with notable changes in cash, fixed assets, and debt, and **1.32 billion yuan** in fair value financial assets, while some assets are restricted 2021 Year-End Significant Changes in Asset Composition (Unit: Yuan) | Item | 2021 Year-End Amount | Proportion of Total Assets | 2021 Beginning-of-Year Amount | Proportion of Total Assets | Proportion Change | Explanation of Significant Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Cash and Cash Equivalents | 98,575,149.66 | 1.13% | 321,412,946.15 | 3.31% | -2.18% | Due to the combined impact of cash flows from operating, investing, and financing activities | | Contract Assets | 2,763,992,124.37 | 31.64% | 2,940,657,649.19 | 30.25% | 1.39% | Mainly due to impairment of contract assets | | Fixed Assets | 349,982,970.32 | 4.01% | 414,091,713.16 | 4.26% | -0.25% | Mainly due to the combined impact of fixed asset purchases and depreciation | | Short-Term Borrowings | 1,598,093,696.74 | 18.29% | 1,649,970,966.15 | 16.97% | 1.32% | Mainly due to changes in financing structure | | Contract Liabilities | 660,637,343.91 | 7.56% | 613,379,042.15 | 6.31% | 1.25% | Mainly due to an increase in advance payments for project progress | | Bonds Payable | 136,050,000.00 | 1.56% | 260,772,000.00 | 2.68% | -1.12% | Repayment of matured bonds | 2021 Year-End Assets and Liabilities Measured at Fair Value (Unit: Yuan) | Item | Beginning Balance | Fair Value Change Gains and Losses for the Period | Accumulated Fair Value Changes Recognized in Equity | Ending Balance | | :--- | :--- | :--- | :--- | :--- | | Trading Financial Assets | | 26,641,195.32 | | 26,641,195.32 | | Other Equity Instrument Investments | 1,367,480,064.70 | | -74,101,043.89 | 1,293,379,020.81 | | Subtotal Financial Assets | 1,367,480,064.70 | 26,641,195.32 | -74,101,043.89 | 1,320,020,216.13 | - The company's assets are subject to restrictions such as mortgages, pledges, and freezes; details are provided in the financial report notes[87](index=87&type=chunk) [VII. Investment Analysis](index=29&type=section&id=VII.%20Investment%20Analysis) The company's 2021 investment was **390,000 yuan**, a **99.69% decrease**, with no major new investments, and some previously funded projects failing to meet expectations or being closed 2021 Investment Amount Changes | Indicator | Investment Amount for the Reporting Period (Yuan) | Investment Amount for the Same Period Last Year (Yuan) | Change Rate | | :--- | :--- | :--- | :--- | | Investment Amount | 390,000.00 | 127,424,300.00 | -99.69% | - The company's raised funds were primarily used for transaction consideration, intermediary fees, smart ecological cloud platform, smart sprinkler production, efficient water-saving new material R&D, smart efficient agricultural water-saving projects, and supplementing Muhe's working capital[93](index=93&type=chunk) - The project for annual production of **600 large smart sprinklers** and the smart efficient agricultural water-saving project did not achieve planned progress or expected returns[93](index=93&type=chunk) - The efficient water-saving new material R&D and pilot production project was closed due to market demand and actual investment indicating difficulty in achieving expected benefits[94](index=94&type=chunk) - The company previously used idle raised funds to temporarily supplement working capital, which has since been fully repaid or permanently converted to working capital[94](index=94&type=chunk)[95](index=95&type=chunk) [VIII. Significant Asset and Equity Sales](index=32&type=section&id=VIII.%20Significant%20Asset%20and%20Equity%20Sales) The company did not engage in any significant asset or equity sales during the reporting period - The company did not sell any significant assets during the reporting period[98](index=98&type=chunk) - The company did not sell any significant equity during the reporting period[99](index=99&type=chunk) [IX. Analysis of Major Holding and Participating Companies](index=33&type=section&id=IX.%20Analysis%20of%20Major%20Holding%20and%20Participating%20Companies) Major subsidiaries Kingland Muhe and Northern Landscape reported net losses of **668 million yuan** and **229 million yuan** respectively in 2021, while the deregistration of Zhongke Dingzhi (Yichun) had minimal impact Financial Status of Major Holding Subsidiaries (Unit: Yuan) | Company Name | Company Type | Registered Capital | Total Assets | Net Assets | Operating Revenue | Operating Profit | Net Profit | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Kingland Muhe Water-Saving Equipment Co., Ltd. | Subsidiary | 1.04 billion | 4,741,488,425.91 | 1,205,257,530.63 | 101,857,502.55 | -668,307,044.59 | -667,923,142.91 | | Kingland Northern Landscape (Tianjin) Co., Ltd. | Subsidiary | 109 million | 1,951,077,172.20 | -609,730,443.67 | 7,486,261.81 | -220,258,579.49 | -228,586,246.03 | - During the reporting period, the company deregistered Zhongke Dingzhi (Yichun) Environmental Sanitation Services Co., Ltd., which did not significantly impact production, operations, or performance[102](index=102&type=chunk) [X. Information on Structured Entities Controlled by the Company](index=35&type=section&id=X.%20Information%20on%20Structured%20Entities%20Controlled%20by%20the%20Company) The company did not control any structured entities during the reporting period - The company did not control any structured entities during the reporting period[103](index=103&type=chunk) [XI. Outlook on the Company's Future Development](index=35&type=section&id=XI.%20Outlook%20on%20the%20Company's%20Future%20Development) Facing external challenges, the company leverages core technologies and a diversified 'solution + investment and operation' strategy across four ecological business segments, with plans for rural revitalization, market expansion, and strategic partnerships, while addressing organizational and financial risks - The company faces external challenges such as economic development pressure from international and domestic uncertainties, rising construction costs, and order disruptions[103](index=103&type=chunk) - The company's internal strengths include core technologies, over **300 national patents**, multiple high-value qualifications, and an 'industry-university-research' collaboration model[104](index=104&type=chunk) - The company's development strategy is to maintain diversification, adopting a 'solution + investment and operation' model, focusing on four major business segments, aiming to become a leading international ecological environment service provider[105](index=105&type=chunk) - Operating plans include developing rural revitalization industries (e.g., soil remediation, water-saving irrigation), strengthening management, expanding markets, and introducing strategic investors (e.g., Xinjiang Water Conservancy Investment Holding Co., Ltd.)[105](index=105&type=chunk)[106](index=106&type=chunk)[107](index=107&type=chunk) - The company faces risks from organizational adjustments, intensified industry competition, and funding, with countermeasures including improving the industrial chain, resource integration, accounts receivable collection, industrial fund cooperation, and capital market refinancing[108](index=108&type=chunk) [XII. Activities such as Research, Communication, and Interviews During the Reporting Period](index=36&type=section&id=XII.%20Activities%20such%20as%20Research,%20Communication,%20and%20Interviews%20During%20the%20Reporting%20Period) The company did not engage in any research, communication, or interview activities during the reporting period - The company did not engage in any activities such as research, communication, or interviews during the reporting period[109](index=109&type=chunk) Part IV Corporate Governance [I. Basic Status of Corporate Governance](index=37&type=section&id=I.%20Basic%20Status%20of%20Corporate%20Governance) The company strictly adheres to laws and regulations, continuously improving its corporate governance and internal control systems to ensure standardized operations and protect shareholder rights, with no significant discrepancies from regulatory requirements - The company strictly adheres to laws and regulations such as the 'Company Law' and 'Securities Law,' continuously improving its corporate governance structure and internal control system[111](index=111&type=chunk) - The company strengthens the responsibilities of the general meeting of shareholders, board of directors, supervisory board, and management, ensuring the right to know, participate, and vote for all shareholders[111](index=111&type=chunk) - The company strictly implements information disclosure rules, ensuring truthfulness, accuracy, completeness, timeliness, and fairness, and actively enhances communication with investors[112](index=112&type=chunk) - The actual state of corporate governance has no significant discrepancies with laws and regulations[112](index=112&type=chunk) [II. Company's Independence from Controlling Shareholder and Actual Controller in Terms of Assets, Personnel, Finance, Organization, and Business](index=37&type=section&id=II.%20Company's%20Independence%20from%20Controlling%20Shareholder%20and%20Actual%20Controller%20in%20Terms%20of%20Assets,%20Personnel,%20Finance,%20Organization,%20and%20Business) The company maintains full independence from its controlling shareholder and actual controller across business, personnel, assets, finance, and organization, ensuring autonomous operations and no horizontal competition - The company's business is completely independent of the controlling shareholder, actual controller, and their affiliates, operating autonomously with no horizontal competition[113](index=113&type=chunk) - The company's personnel are independent, and senior management does not hold positions other than director in the controlling shareholder's entities[113](index=113&type=chunk) - The company's assets are independent, complete, and clearly owned, not being gratuitously occupied or controlled by the controlling shareholder, actual controller, or their affiliates[113](index=113&type=chunk) - The company's finances are independent, with a sound and independent financial accounting system, independent taxation, and accounting personnel not holding concurrent positions in the controlling shareholder's entities[113](index=113&type=chunk)[114](index=114&type=chunk) - The company's organizations are independent, with the board of directors, supervisory board, and other internal organizations operating independently and exercising management rights autonomously[114](index=114&type=chunk) [III. Horizontal Competition](index=38&type=section&id=III.%20Horizontal%20Competition) The company did not experience any horizontal competition during the reporting period - The company did not experience any horizontal competition during the reporting period[115](index=115&type=chunk) [IV. Information on Annual General Meetings and Extraordinary General Meetings Held During the Reporting Period](index=38&type=section&id=IV.%20Information%20on%20Annual%20General%20Meetings%20and%20Extraordinary%20General%20Meetings%20Held%20During%20the%20Reporting%20Period) In 2021, the company held 11 extraordinary and 1 annual general meeting, deliberating on articles of association, board elections, and related party transactions, with all resolutions promptly disclosed - During the 2021 reporting period, the company held **11 extraordinary general meetings** and **1 annual general meeting**[115](index=115&type=chunk)[116](index=116&type=chunk)[117](index=117&type=chunk) - Meeting deliberations included revisions to the articles of association, re-election of the board of directors, and related party transactions; all meetings were convened according to prescribed procedures and resolutions were disclosed[115](index=115&type=chunk)[116](index=116&type=chunk)[117](index=117&type=chunk) [V. Information on Directors, Supervisors, and Senior Management](index=40&type=section&id=V.%20Information%20on%20Directors,%20Supervisors,%20and%20Senior%20Management) The company's board, supervisory board, and senior management saw multiple changes, with current leadership including Chairman Guo Shaozeng, and total remuneration for the period amounting to **4.9949 million yuan** - During the reporting period, there were multiple changes among the company's directors, supervisors, and senior management, including the departure of directors Jiang Lizhe, Liu Xin, Chen Fangqing, Zhu Jiang; supervisors Meng Chen, Yang Dehui; and the termination of senior management Guo Yuanyuan, Liu Xin, Tian Xiaonan[122](index=122&type=chunk)[123](index=123&type=chunk)[124](index=124&type=chunk) - The current Chairman and President is Guo Shaozeng, Executive Vice President is Han Zhiquan, Vice Presidents include Han Shiying, Wang Haidong, Feng Yulu, Li Guirong, Dong Chunyu, and the Chief Financial Officer is Gao Hong[125](index=125&type=chunk)[126](index=126&type=chunk)[127](index=127&type=chunk)[128](index=128&type=chunk)[129](index=129&type=chunk)[130](index=130&type=chunk) - Some directors, supervisors, and senior management hold concurrent positions in other entities, such as Guo Shaozeng at Rongtong Capital and Qingshanghui, and Yan Tao at Wanhui Investment[130](index=130&type=chunk)[131](index=131&type=chunk) 2021 Remuneration of Directors, Supervisors, and Senior Management (Unit: 10,000 Yuan) | Name | Position | Employment Status | Total Pre-Tax Remuneration from the Company | | :--- | :--- | :--- | :--- | | Yang Rengui | Chairman | Departed | 60 | | Yan Tao | Director | Appointed/Dismissed | 0 | | Jiang Lizhe | Director, Executive President | Departed | 11.11 | | Han Zhiquan | Director, Executive Vice President | Current | 62.88 | | Liu Xin | Director, Vice President, Board Secretary | Departed | 27.56 | | Hao Xin | Director, President | Departed | 96.55 | | Chen Fangqing | Independent Director | Departed | 0 | | Nie Xingkai | Independent Director | Departed | 12 | | Zhu Jiang | Independent Director | Departed | 12 | | Zhou Jianmin | Independent Director | Current | 0 | | Yin Zhoucheng | Chairman of Supervisory Board | Departed | 6 | | Meng Chen | Supervisor | Departed | 0 | | Yang Dehui | Employee Representative Supervisor | Departed | 24.68 | | Wang Yue | Employee Representative Supervisor | Current | 14.57 | | Zhang Haiyan | Supervisor | Current | 1 | | Guo Yuanyuan | Vice President | Departed | 23.2 | | Feng Yulu | Vice President | Current | 55.17 | | Wuliji | Vice President | Departed | 0 | | Yin Xiaodong | Vice President | Departed | 0 | | Li Guirong | Vice President | Current | 0 | | Liang Jin | Chief Financial Officer | Departed | 56.56 | | Tian Xiaonan | Board Secretary | Departed | 36.21 | | Total | -- | -- | 499.49 | [VI. Performance of Directors' Duties During the Reporting Period](index=49&type=section&id=VI.%20Performance%20of%20Directors'%20Duties%20During%20the%20Reporting%20Period) The board held 18 meetings, diligently deliberating key proposals, actively monitoring operations, and ensuring decisions considered minority shareholder interests, with no objections raised by directors - During the reporting period, the company's board of directors held **18 meetings**, deliberating on important proposals such as annual report auditing, re-appointment of accounting firms, and internal control self-evaluation reports[135](index=135&type=chunk)[136](index=136&type=chunk)[137](index=137&type=chunk) - All directors diligently performed their duties, actively monitored the company's operations and financial status, attended meetings on time, and offered advice for the company's business development[140](index=140&type=chunk) - Board decisions fully considered the interests of minority shareholders, enhancing decision-making scientificity and promoting the company's continuous healthy development[140](index=140&type=chunk) - No objections were raised by directors regarding company matters during the reporting period[139](index=139&type=chunk) [VII. Status of Board's Special Committees During the Reporting Period](index=52&type=section&id=VII.%20Status%20of%20Board's%20Special%20Committees%20During%20the%20Reporting%20Period) The board's Strategy, Audit, Nomination, and Remuneration Committees all fulfilled their duties, holding meetings to deliberate on strategic plans, financial reports, personnel appointments, and remuneration policies, with all proposals approved - The Strategy Committee held **1 meeting** to deliberate on the company's annual development strategy and operating plan[141](index=141&type=chunk) - The Audit Committee held **3 meetings** to deliberate on the 2020 annual report audit, re-appointment of accounting firms, internal control self-evaluation report, and 2020 financial report[141](index=141&type=chunk) - The Nomination Committee held **2 meetings** to deliberate on the appointment of the board secretary and the election of independent directors[141](index=141&type=chunk)[142](index=142&type=chunk) - The Remuneration and Appraisal Committee held **1 meeting** to deliberate on the company's 2021 remuneration policy[142](index=142&type=chunk) - All important opinions and suggestions put forward by the special committees were approved, with no dissenting matters[141](index=141&type=chunk)[142](index=142&type=chunk) [VIII. Work of the Supervisory Board](index=53&type=section&id=VIII.%20Work%20of%20the%20Supervisory%20Board) The supervisory board found no risks during its supervision activities and raised no objections to the supervised matters - The supervisory board found no risks in the company's supervision activities during the reporting period[143](index=143&type=chunk) - The supervisory board raised no objections to the supervised matters during the reporting period[143](index=143&type=chunk) [IX. Company Employee Information](index=53&type=section&id=IX.%20Company%20Employee%20Information) As of year-end, the company had **591 employees**, primarily administrative, with **73 R&D personnel**, and a majority holding bachelor's or master's degrees, supported by a remuneration policy and continuous training 2021 Year-End Employee Count and Composition | Indicator | Number (Persons) | | :--- | :--- | | Total Number of Employees at Period-End | 591 | | Production Personnel | 49 | | Sales Personnel | 56 | | Technical Personnel | 55 | | Financial Personnel | 40 | | Administrative Personnel | 233 | | Other | 158 | | Doctorate | 14 | | Master's | 113 | | Bachelor's | 227 | | Associate Degree | 137 | | Other Education Levels | 100 | - The company's remuneration policy consists of position-based salaries and performance-based wages, determined by employee attendance, work completion, and appraisal results[146](index=146&type=chunk) - In 2021, the company conducted micro-classroom training to enhance employees' professional skills and comprehensive quality[147](index=147&type=chunk) [X. Company Profit Distribution and Capital Reserve to Share Capital Conversion](index=54&type=section&id=X.%20Company%20Profit%20Distribution%20and%20Capital%20Reserve%20to%20Share%20Capital%20Conversion) The company did not adjust its profit distribution policy and plans no cash dividends, bonus shares, or capital reserve conversions for the year - The company did not formulate, implement, or adjust its profit distribution policy during the reporting period[148](index=148&type=chunk) - The company plans not to distribute cash dividends, bonus shares, or convert capital reserves into share capital for the year[148](index=148&type=chunk) [XI. Implementation of Equity Incentive Plans, Employee Stock Ownership Plans, or Other Employee Incentive Measures](index=54&type=section&id=XI.%20Implementation%20of%20Equity%20Incentive%20Plans,%20Employee%20Stock%20Ownership%20Plans,%20or%20Other%20Employee%20Incentive%20Measures) The company had no equity incentive plans, employee stock ownership plans, or other employee incentive measures during the reporting period - The company had no equity incentive plans, employee stock ownership plans, or other employee incentive measures and their implementation during the reporting period[149](index=149&type=chunk) [XII. Construction and Implementation of Internal Control System During the Reporting Period](index=54&type=section&id=XII.%20Construction%20and%20Implementation%20of%20Internal%20Control%20System%20During%20the%20Reporting%20Period) The company established an effective internal control structure, revising key systems, standardizing transactions, and providing training, with no significant internal control deficiencies found during the reporting period - The company established an internal control organizational structure comprising the general meeting of shareholders, board of directors, supervisory board, management, and various holding subsidiaries[151](index=151&type=chunk) - During the reporting period, the 'Articles of Association' and other systems were revised to standardize related party transactions, external guarantees, asset disposals, and ensure timely information disclosure[151](index=151&type=chunk) - The company organized regulatory training for directors, supervisors, and senior management to enhance their awareness of standardized operations[151](index=151&type=chunk) - No significant internal control deficiencies were found during the reporting period[152](index=152&type=chunk) [XIII. Management and Control of Subsidiaries During the Reporting Period](index=55&type=section&id=XIII.%20Management%20and%20Control%20of%20Subsidiaries%20During%20the%20Reporting%20Period) The company had no special remarks regarding subsidiary management and control during the reporting period and encountered no integration issues - The company had no special remarks regarding the management and control of its subsidiaries during the reporting period and encountered no integration issues[152](index=152&type=chunk) [XIV. Internal Control Self-Evaluation Report or Internal Control Audit Report](index=55&type=section&id=XIV.%20Internal%20Control%20Self-Evaluation%20Report%20or%20Internal%20Control%20Audit%20Report) The company's internal control evaluation report, covering 100% of assets and revenue, was disclosed on April 28, 2022, with the auditor issuing an unqualified opinion, consistent with the board's self-evaluation - The company's internal control evaluation report was disclosed on April 28, 2022, covering **100%** of the company's total assets and operating revenue[153](index=153&type=chunk) - Internal control deficiency identification standards include qualitative and quantitative criteria for financial and non-financial reporting[153](index=153&type=chunk)[154](index=154&type=chunk) - Zhongxingcai Guanghua Certified Public Accountants issued a standard unqualified internal control audit report, stating that the company maintained effective internal controls over financial reporting in all material respects[155](index=155&type=chunk) - The internal control audit report was consistent with the board's self-evaluation report, finding no significant non-financial reporting deficiencies[155](index=155&type=chunk) [XV. Rectification of Self-Inspected Issues from Special Action on Listed Company Governance](index=57&type=section&id=XV.%20Rectification%20of%20Self-Inspected%20Issues%20from%20Special%20Action%20on%20Listed%20Company%20Governance) The company had no rectification of self-inspected issues from special action on listed company governance during the reporting period - The company had no rectification of self-inspected issues from special action on listed company governance during the reporting period[156](index=156&type=chunk) Part V Environmental and Social Responsibility [I. Significant Environmental Issues](index=58&type=section&id=I.%20Significant%20Environmental%20Issues) The company and its subsidiaries are not key polluting units, received no environmental penalties, and did not disclose carbon reduction measures during the reporting period - The company and its subsidiaries are not classified as key polluting units by environmental protection authorities[158](index=158&type=chunk) - No administrative penalties for environmental issues were received during the reporting period[158](index=158&type=chunk) - Measures taken to reduce carbon emissions and their effects were not disclosed[158](index=158&type=chunk) [II. Social Responsibility](index=58&type=section&id=II.%20Social%20Responsibility) The company protects shareholder rights through robust governance and disclosure, safeguards employee rights with legal compliance and training, and upholds business ethics to foster win-win relationships with customers and suppliers - The company effectively protects the legitimate rights and interests of all shareholders, especially minority investors, by improving governance structure, providing diverse voting methods, and separate vote counting[158](index=158&type=chunk) - The company safeguards employees' legitimate rights and interests in accordance with laws and regulations such as the 'Labor Law,' emphasizing employee training to enhance professional literacy and comprehensive quality[159](index=159&type=chunk) - The company strictly adheres to business ethics, acts with integrity, protects customer and supplier interests, actively resolves project issues, and seeks win-win development for both parties[159](index=159&type=chunk) [III. Consolidation and Expansion of Poverty Alleviation Achievements and Rural Revitalization](index=58&type=section&id=III.%20Consolidation%20and%20Expansion%20of%20Poverty%20Alleviation%20Achievements%20and%20Rural%20Revitalization) The company has not yet undertaken poverty alleviation or rural revitalization initiatives during the reporting period - The company has not yet carried out poverty alleviation and rural revitalization work during the reporting period[160](index=160&type=chunk) Part VI Significant Events [I. Fulfillment of Commitments](index=59&type=section&id=I.%20Fulfillment%20of%20Commitments) Most commitments made during share reform and asset restructuring, covering independence, competition, and related party transactions, are ongoing, with some fulfilled, but an overdue performance compensation commitment exists - Multiple commitments were made by the company's actual controller, shareholders, related parties, and the company during share reform, acquisition reports, and asset restructuring, covering independence, avoiding horizontal competition, standardizing and reducing related party transactions, and avoiding fund occupation[162](index=162&type=chunk)[163](index=163&type=chunk)[164](index=164&type=chunk)[165](index=165&type=chunk)[166](index=166&type=chunk)[167](index=167&type=chunk)[168](index=168&type=chunk)[169](index=169&type=chunk)[170](index=170&type=chunk)[171](index=171&type=chunk)[172](index=172&type=chunk)[173](index=173&type=chunk) - Most commitments are long-term and ongoing, while some share lock-up and information truthfulness commitments have been fulfilled[162](index=162&type=chunk)[163](index=163&type=chunk)[164](index=164&type=chunk)[165](index=165&type=chunk)[166](index=166&type=chunk)[167](index=167&type=chunk)[168](index=168&type=chunk)[169](index=169&type=chunk)[170](index=170&type=chunk)[171](index=171&type=chunk)[172](index=172&type=chunk)[173](index=173&type=chunk) - There is an overdue performance compensation commitment, such as the performance compensation for Northern Landscape by Northern Group and Beikong Consulting[165](index=165&type=chunk) - Whether the company's commitments were fulfilled on time: No[173](index=173&type=chunk) [II. Non-Operating Fund Occupation by Controlling Shareholder and Other Related Parties](index=70&type=section&id=II.%20Non-Operating%20Fund%20Occupation%20by%20Controlling%20Shareholder%20and%20Other%20Related%20Parties) The company had no non-operating fund occupation by its controlling shareholder or other related parties during the reporting period - The company had no non-operating fund occupation by its controlling shareholder or other related parties during the reporting period[174](index=174&type=chunk) [III. Irregular External Guarantees](index=70&type=section&id=III.%20Irregular%20External%20Guarantees) The company had no irregular external guarantees during the reporting period - The company had no irregular external guarantees during the reporting period[175](index=175&type=chunk) [IV. Board of Directors' Explanation on the Latest 'Non-Standard Audit Report'](index=70&type=section&id=IV.%20Board%20of%20Directors'%20Explanation%20on%20the%20Latest%20%22Non-Standard%20Audit%20Report%22) The company had no board of directors' explanation on the latest 'non-standard audit report' during the reporting period - The company had no board of directors' explanation on the latest 'non-standard audit report' during the reporting period[176](index=176&type=chunk) [V. Explanations by the Board of Directors, Supervisory Board, and Independent Directors (if any) on the Accounting Firm's 'Non-Standard Audit Report' for the Current Period](index=70&type=section&id=V.%20Explanations%20by%20the%20Board%20of%20Directors,%20Supervisory%20Board,%20and%20Independent%20Directors%20(if%20any)%20on%20the%20Accounting%20Firm's%20%22Non-Standard%20Audit%20Report%22%20for%20the%20Current%20Period) The company had no explanations from the board, supervisory board, or independent directors regarding the accounting firm's 'non-standard audit report' for the current period - The company had no explanations from the board of directors, supervisory board, or independent directors regarding the accounting firm's 'non-standard audit report' for the current period[176](index=176&type=chunk) [VI. Explanation of Changes in Accounting Policies, Accounting Estimates, or Significant Accounting Error Corrections Compared to the Previous Year's Financial Report](index=70&type=section&id=VI.%20Explanation%20of%20Changes%20in%20Accounting%20Policies,%20Accounting%20Estimates,%20or%20Significant%20Accounting%20Error%20Corrections%20Compared%20to%20the%20Previous%20Year's%20Financial%20Report) Effective January 1, 2021, the company adopted new leasing standards, retrospectively adjusting opening consolidated financial statements, impacting right-of-use assets, lease liabilities, and other related accounts - Effective January 1, 2021, the company adopted new leasing standards, adjusting relevant items in the opening financial statements based on the cumulative impact of initial application[176](index=176&type=chunk) Impact of Adopting New Leasing Standards on 2021 Opening Consolidated Statement Items (Unit: Yuan) | Statement Item | December 31, 2020 | January 1, 2021 | Impact Amount | | :--- | :--- | :--- | :--- | | Right-of-Use Assets | | 68,997,200.85 | 68,997,200.85 | | Fixed Assets | 432,297,833.39 | 414,091,713.16 | -18,206,120.23 | | Long-Term Deferred Expenses | 3,697,800.00 | 3,334,400.00 | -363,400.00 | | Lease Liabilities | | 53,944,842.64 | 53,944,842.64 | | Long-Term Payables | 60,745,941.35 | 58,000,000.00 | -2,745,941.35 | | Retained Earnings | -2,992,645,533.44 | -2,993,244,889.13 | -599,355.69 | | Minority Interests | 393,605,930.27 | 393,434,065.29 | -171,864.98 | [VII. Explanation of Changes in Consolidation Scope Compared to the Previous Year's Financial Report](index=71&type=section&id=VII.%20Explanation%20of%20Changes%20in%20Consolidation%20Scope%20Compared%20to%20the%20Previous%20Year's%20Financial%20Report) In 2021, the company's consolidation scope decreased by one entity to 46 subsidiaries, primarily due to the deregistration of Zhongke Dingzhi (Yichun) Environmental Sanitation Services Co., Ltd - The company's consolidation scope for 2021 included **46 subsidiaries**, a decrease of **1** from the previous period[178](index=178&type=chunk) - The subsidiary deregistered in this period was Zhongke Dingzhi (Yichun) Environmental Sanitation Services Co., Ltd[178](index=178&type=chunk) [VIII. Appointment and Dismissal of Accounting Firms](index=71&type=section&id=VIII.%20Appointment%20and%20Dismissal%20of%20Accounting%20Firms) Zhongxingcai Guanghua Certified Public Accountants serves as the company's domestic accounting firm for the seventh consecutive year, with a remuneration of **1.05 million yuan**, and was also appointed for the 2021 internal control audit Current Accounting Firm Information | Indicator | Content | | :--- | :--- | | Name of Domestic Accounting Firm | Zhongxingcai Guanghua Certified Public Accountants (Special General Partnership) | | Remuneration of Domestic Accounting Firm (10,000 Yuan) | 105 | | Consecutive Years of Audit Service by Domestic Accounting Firm | 7 Years | | Names of Certified Public Accountants at Domestic Accounting Firm | Li Xiaofei, Gao Tao | - The company did not change its accounting firm during the reporting period[179](index=179&type=chunk) - The company appointed Zhongxingcai Guanghua Certified Public Accountants as its internal control audit firm for 2021, with a fee of **600,000 yuan**[179](index=179&type=chunk) [IX. Delisting Risk After Annual Report Disclosure](index=71&type=section&id=IX.%20Delisting%20Risk%20After%20Annual%20Report%20Disclosure) The company did not face delisting risk after the annual report disclosure during the reporting period - The company did not face delisting risk after the annual report disclosure during the reporting period[180](index=180&type=chunk) [X. Bankruptcy and Reorganization Matters](index=72&type=section&id=X.%20Bankruptcy%20and%20Reorganization%20Matters) The company had no bankruptcy and reorganization matters during the reporting period - The company had no bankruptcy and reorganization matters during the reporting period[181](index=181&type=chunk) [XI. Significant Litigation and Arbitration Matters](index=72&type=section&id=XI.%20Significant%20Litigation%20and%20Arbitration%20Matters) The company is involved in multiple significant litigations, including a **72.0878 million yuan** performance compensation lawsuit for Northern Landscape and **97 pending lawsuits** as a defendant totaling **746 million yuan** - Due to the failure to meet performance commitments for the acquisition of Northern Landscape, the company sued Northern Municipal, Gao Xuegang, and others, with the court ruling that the defendants fulfill compensation obligations, involving **72.0878 million yuan**[182](index=182&type=chunk) - This performance compensation lawsuit impacted 2021 total profit and net profit by **26.6412 million yuan**, and 2022 Q1 total profit and net profit by **5.2124 million yuan**[182](index=182&type=chunk) - Northern Landscape was sued by Tianjin Binhai Rural Commercial Bank for failing to repay a loan, involving **23.4 million yuan**, and has received a civil judgment[184](index=184&type=chunk) - The company is a defendant in **97 pending lawsuits**, with a total amount of **745.53015834 million yuan**[185](index=185&type=chunk) - The company is actively resolving various litigation matters, but the specific impact of some matters on subsequent period profits cannot yet be determined[185](index=185&type=chunk) [XII. Penalties and Rectification](index=75&type=section&id=XII.%20Penalties%20and%20Rectification) The company had no penalties or rectification during the reporting period - The company had no penalties or rectification during the reporting period[186](index=186&type=chunk) [XIII. Integrity Status of the Company, its Controlling Shareholder, and Actual Controller](index=75&type=section&id=XIII.%20Integrity%20Status%20of%20the%20Company,%20its%20Controlling%20Shareholder,%20and%20Actual%20Controller) The company and its actual controller, Guo Shaozeng, are listed as dishonest judgment debtors in multiple cases for failing to fulfill legal obligations, which may negatively impact the company's image but has not substantially affected operations Company and Actual Controller Listed as Dishonest Judgment Debtors | Debtor | Enforcement Court | Case Filing Date | Case Number | Fulfillment Status | Specific Circumstances of Dishonest Debtor Behavior | | :--- | :--- | :--- | :--- | :--- | :--- | | Kingland Technology, Kingland Northern, Guo Shaozeng | Tianjin Third Intermediate People's Court | January 27, 2021 | (2021) Jin 03 Zhi 134 Hao | All Unfulfilled | Violation of property reporting system | | Kingland Technology, Guo Shaozeng | Nanjing Gulou District People's Court | July 27, 2021 | (2021) Su 0106 Zhi 6057 Hao | All Unfulfilled | Ability to fulfill but refused to fulfill oblig

[Part I Important Notice, Table of Contents, and Definitions](index=2&type=section&id=Part%20I%20Important%20Notice%2C%20Table%20of%20Contents%2C%20and%20Definitions) This section provides crucial disclaimers, the report's comprehensive table of contents, and definitions of key terms for clarity [Important Notice](index=2&type=section&id=Important%20Notice) The company's board of directors, supervisory board, and senior management guarantee the truthfulness, accuracy, and completeness of the annual report, noting risks in competition, funding, and talent development, and no dividend distribution plan - The company's board of directors, supervisory board, and senior management guarantee the **truthfulness, accuracy, and completeness** of the annual report content[3](index=3&type=chunk) - The company plans **not to distribute cash dividends, bonus shares, or convert capital reserves into share capital**[5](index=5&type=chunk) - Key risks include **intensified industry competition**, **significant capital demand and long operating cycles** in the ecological environment industry, and **rapidly increasing demand for core talent** with diverse backgrounds[4](index=4&type=chunk) [Table of Contents](index=3&type=section&id=Table%20of%20Contents) This section presents the complete directory structure of the annual report, covering all chapters from important notices to financial reports and reference documents, providing readers with the overall framework of the report - The report's table of contents comprises **thirteen sections**, covering core content such as company profile, business overview, operational analysis, significant events, and financial reports[8](index=8&type=chunk) [Definitions](index=4&type=section&id=Definitions) This section provides definitions for common terms and company-related entities used in the report, ensuring accurate understanding of the content - The report clearly defines key entities such as the **China Securities Regulatory Commission (CSRC), Shenzhen Stock Exchange, Jinglan Technology, controlling shareholder Yangshu Lantian, Jinglan Holdings, and its main subsidiaries**[10](index=10&type=chunk) [Part II Company Profile and Key Financial Indicators](index=5&type=section&id=Part%20II%20Company%20Profile%20and%20Key%20Financial%20Indicators) This section outlines the company's fundamental information, historical business changes, and a comprehensive overview of its key financial performance and position over recent periods [I. Company Information](index=5&type=section&id=I.%20Company%20Information) This section provides the company's basic registration information, stock code, listing exchange, legal representative, registered and office addresses, company website, and email contact details - The company's stock abbreviation is **'Jinglan Technology'**, stock code **000711**, listed on the **Shenzhen Stock Exchange**[12](index=12&type=chunk) - The legal representative is **Yang Rengui**, with the registered address in Harbin, Heilongjiang Province, and the office address in Chaoyang District, Beijing[12](index=12&type=chunk) [II. Contact Persons and Information](index=5&type=section&id=II.%20Contact%20Persons%20and%20Information) This section lists the names, contact addresses, telephone numbers, fax numbers, and email addresses of the company's board secretary and securities affairs representative, facilitating communication for investors and relevant parties - The Board Secretary is **Liu Xin**, and the Securities Affairs Representative is **Tian Xiaonan**, both with contact information at the Beijing office address[13](index=13&type=chunk) [III. Information Disclosure and Document Availability](index=5&type=section&id=III.%20Information%20Disclosure%20and%20Document%20Availability) This section specifies the company's designated information disclosure media, the CSRC-designated website, and the location where the annual report is available for inspection - The company's designated information disclosure media are **China Securities Journal, Securities Times, and Shanghai Securities News**, with the designated website being **Juchao Information Network (http://www.cninfo.com.cn)**[14](index=14&type=chunk) [IV. Registration Changes](index=6&type=section&id=IV.%20Registration%20Changes) This section reviews the company's significant business adjustments and changes in controlling shareholders since its listing, reflecting its strategic transformation history - The company's main business has undergone multiple adjustments, from high-tech products and real estate to information system integration, eventually transitioning to focus on **ecological and environmental protection businesses (ecological water saving, landscape environment, soil remediation)** between 2016 and 2018[15](index=15&type=chunk) - Controlling shareholders have changed multiple times, with **Yangshu Lantian becoming the largest shareholder in 2016**, holding **16.68%** of shares at the end of the reporting period[15](index=15&type=chunk) [V. Other Relevant Information](index=6&type=section&id=V.%20Other%20Relevant%20Information) This section discloses information about the accounting firm engaged by the company, the names of its signing accountants, and the financial advisor responsible for continuous supervision during the reporting period - The company engaged **Zhongxingcai Guanghua Certified Public Accountants (Special General Partnership)** for auditing, with **Wang Fengqi and Zhang Mengyong** as the signing accountants[16](index=16&type=chunk) - During the reporting period, **Huatai United Securities Co., Ltd.** served as the financial advisor, fulfilling continuous supervision duties[16](index=16&type=chunk) [VI. Key Accounting Data and Financial Indicators](index=6&type=section&id=VI.%20Key%20Accounting%20Data%20and%20Financial%20Indicators) This section presents the company's key accounting data and financial indicators for the past three years (2018-2020), showing a significant decline in operating revenue and net profit in 2020, but a positive net cash flow from operating activities 2018-2020 Key Accounting Data and Financial Indicators | Indicator | 2020 | 2019 | YoY Change | 2018 | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue (RMB) | 995,410,211.62 | 1,901,408,713.75 | -47.65% | 2,490,857,777.77 | | Net Profit Attributable to Listed Company Shareholders (RMB) | -2,399,698,095.52 | -1,036,745,832.56 | -131.46% | 102,535,975.63 | | Net Cash Flow from Operating Activities (RMB) | 60,169,476.13 | -88,641,195.85 | 167.88% | -843,379,277.69 | | Basic Earnings Per Share (RMB/share) | -2.34 | -1.03 | -127.18% | 0.12 | | Weighted Average Return on Net Assets | -69.79% | -22.11% | -47.68% | 2.39% | | Total Assets (RMB) | 9,671,022,194.26 | 12,118,205,650.23 | -20.19% | 10,994,938,944.75 | | Net Assets Attributable to Listed Company Shareholders (RMB) | 2,229,544,945.43 | 4,635,903,674.91 | -51.91% | 4,343,418,610.61 | - The company's net profit, whichever is lower before and after deducting non-recurring gains and losses, has been **negative for the past three fiscal years**[19](index=19&type=chunk) [VII. Differences in Accounting Data Under Domestic and International Accounting Standards](index=7&type=section&id=VII.%20Differences%20in%20Accounting%20Data%20Under%20Domestic%20and%20International%20Accounting%20Standards) This section states that during the reporting period, there were no differences in net profit and net assets between financial reports disclosed under International Accounting Standards or overseas accounting standards and Chinese Accounting Standards - During the reporting period, the company had **no differences in net profit and net assets** between financial reports disclosed under International Accounting Standards and Chinese Accounting Standards[20](index=20&type=chunk) - During the reporting period, the company had **no differences in net profit and net assets** between financial reports disclosed under overseas accounting standards and Chinese Accounting Standards[21](index=21&type=chunk) [VIII. Quarterly Key Financial Indicators](index=8&type=section&id=VIII.%20Quarterly%20Key%20Financial%20Indicators) This section presents the company's 2020 quarterly operating revenue, net profit attributable to listed company shareholders, net profit after deducting non-recurring gains and losses, and net cash flow from operating activities, showing a significant net loss in the fourth quarter 2020 Quarterly Key Financial Indicators | Indicator | Q1 | Q2 | Q3 | Q4 | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue (RMB) | 158,573,159.16 | 143,222,311.86 | 259,655,768.26 | 433,958,972.34 | | Net Profit Attributable to Listed Company Shareholders (RMB) | -49,845,783.85 | -243,664,863.58 | -143,622,647.95 | -1,962,564,800.14 | | Net Cash Flow from Operating Activities (RMB) | -75,736,894.26 | -112,978,694.35 | 182,154,744.59 | 66,730,320.15 | [IX. Non-Recurring Gains and Losses Items and Amounts](index=8&type=section&id=IX.%20Non-Recurring%20Gains%20and%20Losses%20Items%20and%20Amounts) This section details the company's non-recurring gains and losses items and amounts for the past three years (2018-2020), with a total of 40.44 million RMB in non-recurring gains and losses in 2020 2018-2020 Non-Recurring Gains and Losses Items and Amounts | Item | 2020 Amount (RMB) | 2019 Amount (RMB) | 2018 Amount (RMB) | | :--- | :--- | :--- | :--- | | Non-current asset disposal gains and losses | 79,144.33 | 18,792,269.73 | 14,984,143.92 | | Government grants recognized in current profit or loss | 3,966,846.03 | 8,681,570.64 | 6,120,463.44 | | Fund occupation fees received from non-financial enterprises recognized in current profit or loss | 15,836,442.08 | 25,288,811.71 | 15,087,337.48 | | Reversal of impairment provisions for accounts receivable and contract assets subject to individual impairment testing | 34,106,598.96 | 0.00 | 0.00 | | Other non-operating income and expenses apart from the above | 4,897,346.67 | -16,856,444.28 | -1,958,642.37 | | Less: Income tax impact | 6,236,347.98 | 4,321,541.56 | 4,970,883.34 | | Minority interest impact (after tax) | 12,205,230.60 | 4,555,633.09 | 1,257,471.61 | | Total | 40,444,799.49 | 27,029,033.15 | 28,070,417.04 | [Part III Company Business Overview](index=9&type=section&id=Part%20III%20Company%20Business%20Overview) This section outlines the company's core business segments, significant asset changes, and key competitive advantages, highlighting its strategic focus and market position [I. Main Businesses During the Reporting Period](index=9&type=section&id=I.%20Main%20Businesses%20During%20the%20Reporting%20Period) During the reporting period, the company's main businesses covered four segments: industrial ecology, ecological water conservancy, ecological environment, and smart ecology, with soil remediation being the primary revenue source, accounting for 69.18% of total revenue, utilizing various operating models such as general contracting, EPC, and PPP - The company's main business segments include **industrial ecology, ecological water conservancy, ecological environment, and smart ecology**, forming a virtuous complementary relationship[27](index=27&type=chunk) - In 2020, operating revenue was **995.41 million RMB**, primarily from **soil remediation business**, which generated **688.65 million RMB**, accounting for **69.18% of total revenue**[27](index=27&type=chunk)[28](index=28&type=chunk) - Ecological water conservancy operation services generated **225.52 million RMB** (22.66% of total revenue), while other business segments (e.g., landscape engineering) generated **60.33 million RMB** (6.06% of total revenue)[29](index=29&type=chunk)[30](index=30&type=chunk) - The company's operating models primarily include **general contracting, EPC projects, and PPP projects**[31](index=31&type=chunk) [II. Significant Changes in Major Assets](index=10&type=section&id=II.%20Significant%20Changes%20in%20Major%20Assets) This section explains significant changes in the company's major assets during the reporting period, including the reasons for variations in equity investments, fixed assets, and intangible assets - The increase in equity investments was primarily due to the **combined effect of increased investments in equity-accounted companies and decreased net profit/loss of investees**[33](index=33&type=chunk) - Changes in fixed assets were mainly due to the **combined effect of former subsidiary Jinglan Yunzhi IoT Technology Co., Ltd. no longer being consolidated, new fixed asset purchases, and depreciation accruals**[33](index=33&type=chunk) - The increase in intangible assets was primarily due to **more project companies having concession rights with uncertain revenue amounts**[33](index=33&type=chunk) [III. Analysis of Core Competitiveness](index=10&type=section&id=III.%20Analysis%20of%20Core%20Competitiveness) The company's core competitiveness lies in its long-term corporate mission, positive core values, clear development strategy, comprehensive functional division, excellent financial and industrial integration capabilities, strong management team and industry resource integration, robust R&D and independent innovation capabilities, and promising market outlook - The company's mission is **'Green Mountains, Clear Waters, Blue Skies, Enduring China Dream,'** aiming to become a leading international **'ecological environment planning, investment, construction, and operation service provider'**[34](index=34&type=chunk) - The company enhances its smart ecological industry chain through **mergers and acquisitions**, achieving resource integration and improving risk resistance and operational efficiency[35](index=35&type=chunk) - The company possesses multiple **core technologies (soil remediation, water body treatment, agricultural waste recycling)**, **232 invention and utility model patents**, **68 software copyrights**, and operates **academician and postdoctoral workstations**[36](index=36&type=chunk) - The company's main business is in a **national strategic investment priority area**, with **huge market potential in soil remediation and smart water conservancy**, giving it a leading industry advantage and competitive barriers[37](index=37&type=chunk) [Part IV Management Discussion and Analysis](index=12&type=section&id=Part%20IV%20Management%20Discussion%20and%20Analysis) This section provides an in-depth analysis of the company's operational performance, financial position, and investment activities, highlighting key business segments, asset and liability changes, and future development strategies [I. Overview](index=12&type=section&id=I.%20Overview) During the reporting period, the company pursued a diversified development strategy, combining organic growth with external expansion, focusing on four business segments: industrial ecology, ecological water conservancy, ecological environment, and smart ecology; in 2020, operating revenue and net profit significantly declined due to the pandemic and macroeconomic factors, total assets decreased mainly due to goodwill impairment, and total liabilities increased primarily due to financing needs - The company's core business focuses on **four major segments: industrial ecology, ecological water conservancy, ecological environment, and smart ecology**, providing integrated solutions[39](index=39&type=chunk) - The industrial ecology segment (**Zhongke Dingshi**) enhanced its ecological environment layout through acquisitions, gaining **'water and soil co-governance' capabilities** and winning bids for multiple soil and groundwater remediation projects[40](index=40&type=chunk) - The ecological water conservancy segment (**Jinglan Muhe**) deepened its positioning as an **'agricultural steward, ecological expert,'** providing comprehensive solutions for efficient water saving and water source construction, and signing strategic cooperation agreements[41](index=41&type=chunk) - The ecological environment segment (**Beifang Yuanlin, Jinglan Environmental Technology, etc.**) increased soil remediation technology development, won rural revitalization projects, and signed strategic cooperation agreements[42](index=42&type=chunk) 2020 Operating Performance and Asset Status | Indicator | 2020 Amount (RMB 10,000) | YoY Change (RMB 10,000) | Change Ratio | | :--- | :--- | :--- | :--- | | Operating Revenue | 99,541.02 | -90,599.85 | -47.65% | | Net Profit Attributable to Listed Company Shareholders | -239,969.81 | -136,295.23 | -131.46% | | Total Assets (Year-End 2020) | 967,102.22 | -244,718.35 | -20.19% | | Total Liabilities (Year-End 2020) | 704,787.13 | 20,304.42 | 2.97% | - The significant decline in performance was mainly due to the **COVID-19 pandemic, macroeconomic conditions, and changes in the financial environment**, leading to slower project progress, reduced operating revenue, and decreased profit; the decrease in total assets was primarily due to **goodwill impairment**; the increase in total liabilities was mainly due to **increased external financing to meet operating capital needs**[44](index=44&type=chunk) [II. Main Business Analysis](index=13&type=section&id=II.%20Main%20Business%20Analysis) This section details the company's main business revenue and cost structure, including operating revenue and gross profit margins by industry, product, and region; in 2020, ecological water saving and landscape environment business revenues significantly declined, while soil remediation revenue slightly increased; R&D investment decreased year-on-year, but the company still possesses multiple core technologies and research platforms in environmental remediation 2020 Operating Revenue Composition (by Industry) | Industry | 2020 Amount (RMB) | Proportion of Operating Revenue | 2019 Amount (RMB) | Proportion of Operating Revenue | YoY Change | | :--- | :--- | :--- | :--- | :--- | :--- | | Ecological Water-Saving Operation Services | 225,519,519.92 | 22.66% | 1,058,342,650.57 | 55.66% | -78.69% | | Landscape Environmental Technology Services | 60,328,661.70 | 6.06% | 153,724,453.24 | 8.08% | -60.76% | | Soil Remediation Operation Services | 688,652,906.71 | 69.18% | 671,511,136.75 | 35.32% | 2.55% | | Other Industries | 20,909,123.29 | 2.10% | 17,830,473.19 | 0.94% | 17.27% | 2020 Operating Revenue and Cost (by Industry) | Industry | Operating Revenue (RMB) | Operating Cost (RMB) | Gross Profit Margin | YoY Change in Operating Revenue | YoY Change in Operating Cost | YoY Change in Gross Profit Margin | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Ecological Water-Saving Operation Services | 225,519,519.92 | 421,206,683.23 | -86.77% | -78.69% | -47.18% | -111.43% | | Soil Remediation Operation Services | 688,652,906.71 | 452,829,189.52 | 34.24% | 2.55% | 4.13% | -1.00% | 2020 Expense Situation | Item | 2020 (RMB) | 2019 (RMB) | YoY Change | Explanation of Significant Change | | :--- | :--- | :--- | :--- | :--- | | Selling Expenses | 93,275,196.77 | 69,806,287.96 | 33.62% | Due to increased efforts in collections, higher personnel salaries from sales collection policies, and increased agency service fees | | Administrative Expenses | 311,186,989.24 | 289,921,906.39 | 7.33% | Due to controlled expense outlays and increased agency service fees | | Financial Expenses | 638,639,261.89 | 340,587,187.43 | 87.51% | Primarily due to increased interest from changes in financing structure | | R&D Expenses | 27,886,486.05 | 45,572,033.90 | -38.81% | Due to reduced R&D investment | - The company's subsidiary **Zhongke Dingshi possesses core soil remediation technologies** such as thermal desorption, ambient temperature desorption, and solidification/stabilization, and participates in multiple national/provincial-level scientific research projects[57](index=57&type=chunk)[60](index=60&type=chunk)[61](index=61&type=chunk)[62](index=62&type=chunk)[63](index=63&type=chunk)[64](index=64&type=chunk) 2020 R&D Investment | Indicator | 2020 | 2019 | YoY Change | | :--- | :--- | :--- | :--- | | Number of R&D Personnel (people) | 120 | 159 | -24.53% | | R&D Investment Amount (RMB) | 27,886,486.05 | 45,572,033.90 | -38.81% | | R&D Investment as % of Operating Revenue | 2.80% | 2.40% | 0.40% | 2020 Cash Flow | Item | 2020 (RMB) | 2019 (RMB) | YoY Change | | :--- | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 60,169,476.13 | -88,641,195.85 | 167.88% | | Net Cash Flow from Investing Activities | -134,696,371.62 | -131,707,822.40 | -2.27% | | Net Cash Flow from Financing Activities | 96,617,563.31 | 25,110,334.27 | 284.77% | | Net Increase in Cash and Cash Equivalents | 22,090,667.82 | -195,238,683.98 | 111.31% | [III. Non-Core Business Analysis](index=19&type=section&id=III.%20Non-Core%20Business%20Analysis) This section analyzes the impact of non-core businesses on total profit, with asset impairment being the primary factor, accounting for 52.36% of total profit, mainly due to goodwill, long-term assets, and inventory impairment 2020 Impact of Non-Core Businesses on Total Profit | Item | Amount (RMB) | Proportion of Total Profit | Explanation of Cause | Sustainability | | :--- | :--- | :--- | :--- | :--- | | Investment Income | -1,176,371.29 | 0.05% | | Yes | | Asset Impairment | -1,334,086,677.94 | 52.36% | Goodwill, long-term assets, and inventory impairment | No | | Non-operating Income | 7,622,908.40 | -0.30% | | No | | Non-operating Expenses | 2,163,047.76 | -0.08% | | No | [IV. Analysis of Assets and Liabilities](index=20&type=section&id=IV.%20Analysis%20of%20Assets%20and%20Liabilities) This section analyzes the composition and significant changes in the company's assets and liabilities; at the end of 2020, both total assets and net assets attributable to listed company shareholders decreased, the liability structure changed, and both short-term and long-term borrowings increased Significant Changes in Asset Composition at Year-End 2020 | Major Asset | 2020 Year-End Amount (RMB) | Proportion of Total Assets | 2020 Year-Beginning Amount (RMB) | Proportion of Total Assets | Change in Proportion | Explanation of Significant Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Monetary Funds | 321,412,946.15 | 3.32% | 383,372,540.97 | 3.16% | 0.16% | Due to the combined impact of cash flows from operating, investing, and financing activities | | Accounts Receivable | 1,279,570,429.23 | 13.23% | 1,966,154,875.23 | 16.22% | -2.99% | Primarily due to enhanced collection efforts for engineering projects across business segments and impairment of receivables | | Inventories | 789,118,010.73 | 8.16% | 680,900,264.45 | 5.62% | 2.54% | Primarily due to increased contract performance costs and decreased raw materials and inventory goods | | Long-Term Equity Investments | 7,860,758.11 | 0.08% | 5,514,569.40 | 0.05% | 0.03% | Due to the combined impact of increased investments in equity-accounted companies and decreased net profit/loss of investees | | Fixed Assets | 432,297,833.39 | 4.47% | 406,028,004.92 | 3.35% | 1.12% | Primarily due to former subsidiary Jinglan Yunzhi IoT Technology Co., Ltd. no longer being consolidated, new fixed asset purchases, and depreciation accruals | | Short-Term Borrowings | 1,649,970,966.15 | 17.06% | 1,728,798,522.72 | 14.27% | 2.79% | Primarily due to changes in financing structure | | Long-Term Borrowings | 586,600,000.00 | 6.07% | 149,771,608.59 | 1.24% | 4.83% | Primarily due to changes in financing structure | | Contract Assets | 2,940,657,649.19 | 30.41% | 3,203,726,524.07 | 26.44% | 3.97% | Primarily due to contract asset impairment | - As of the end of the reporting period, the company's major assets were **not subject to seizure or detention**, with detailed information on asset mortgages, pledges, and freezes provided in the financial report notes[73](index=73&type=chunk) [V. Investment Status](index=21&type=section&id=V.%20Investment%20Status) This section outlines the company's investment activities during the reporting period, showing a significant year-on-year decrease in total investment; it discloses major equity investments, including in Hangzhou Zhenfu Investment Management Partnership, and details the use of raised funds, noting that some projects did not meet planned progress or expected returns, but the company has taken measures for adjustment and closure Investment Amount During Reporting Period | Indicator | Investment Amount During Reporting Period (RMB) | Investment Amount in Prior Period (RMB) | Change Rate | | :--- | :--- | :--- | :--- | | Total Investment Amount | 127,424,300.00 | 1,338,943,169.88 | -90.48% | - During the reporting period, the company made an equity investment of **113.32 million RMB** in **Hangzhou Zhenfu Investment Management Partnership (Limited Partnership)**, holding a **74.71% stake**[75](index=75&type=chunk) Status of Committed Projects Funded by Raised Capital (Partial) | Committed Investment Project | Adjusted Total Investment (RMB 10,000) | Cumulative Investment at Period-End (RMB 10,000) | Investment Progress at Period-End | Project Achieved Expected Benefits | | :--- | :--- | :--- | :--- | :--- | | Cash consideration for this transaction | 47,300 | 47,300 | 100.00% | Not applicable | | Jinglan Smart Ecological Cloud Platform Project | 10,232 | 5,204.7 | 50.87% | Not applicable | | Annual production of 600 large intelligent sprinkler irrigation machines project | 5,920.71 | 5,864.65 | 99.05% | No | | Smart high-efficiency agricultural water-saving project | 65,000 | 65,028.7 | 100.04% | No | - The **annual production of 600 large intelligent sprinkler irrigation machines project** and the **smart high-efficiency agricultural water-saving project** did not meet planned progress or expected returns, primarily due to **market environment changes, design modifications, stricter environmental policies, and insufficient construction time**[80](index=80&type=chunk) - The **Jinglan Smart Ecological Cloud Platform project**, through cooperation with Alibaba Cloud, significantly **reduced costs and accelerated R&D speed**, achieving expected implementation results and project closure[81](index=81&type=chunk) [VI. Significant Asset and Equity Sales](index=25&type=section&id=VI.%20Significant%20Asset%20and%20Equity%20Sales) This section states that the company did not have any significant asset or equity sales during the reporting period - The company **did not sell significant assets** during the reporting period[83](index=83&type=chunk) - The company **did not sell significant equity** during the reporting period[84](index=84&type=chunk) [VII. Analysis of Major Holding and Participating Companies](index=26&type=section&id=VII.%20Analysis%20of%20Major%20Holding%20and%20Participating%20Companies) This section analyzes the financial status and operating results of the company's major subsidiaries, Jinglan Muhe Water-Saving Equipment Co., Ltd. and Jinglan Beifang Yuanlin (Tianjin) Co., Ltd., and discloses the acquisition and disposal of subsidiaries during the reporting period Major Holding Subsidiary Financial Data (2020) | Company Name | Total Assets (RMB) | Net Assets (RMB) | Operating Revenue (RMB) | Operating Profit (RMB) | Net Profit (RMB) | | :--- | :--- | :--- | :--- | :--- | :--- | | Jinglan Muhe Water-Saving Equipment Co., Ltd. | 5,371,396,025.40 | 1,873,180,673.54 | 222,229,887.71 | -753,057,707.68 | -762,846,136.42 | | Jinglan Beifang Yuanlin (Tianjin) Co., Ltd. | 2,035,922,583.73 | -382,059,965.67 | 60,328,661.70 | -407,295,725.06 | -398,719,029.48 | - During the reporting period, the company **established Jinglan Environmental Technology (Chengdu) Co., Ltd. and Chifeng Muhe Hotel Co., Ltd.**, and **deregistered 3 subsidiaries**, including Jinglan Muhe Julu Tiantiantong Agricultural Water Supply Co., Ltd.[87](index=87&type=chunk) [VIII. Structured Entities Controlled by the Company](index=28&type=section&id=VIII.%20Structured%20Entities%20Controlled%20by%20the%20Company) This section states that the company did not control any structured entities during the reporting period - The company **did not control any structured entities** during the reporting period[88](index=88&type=chunk) [IX. Outlook on Company's Future Development](index=28&type=section&id=IX.%20Outlook%20on%20Company%27s%20Future%20Development) The company's future outlook analyzes external factors (pandemic impact and 'new infrastructure' opportunities) and internal strengths (R&D, qualifications, strategic partnerships); it will adhere to a diversified development strategy, focusing on comprehensive ecological environment governance through organic growth and external expansion, with detailed operational plans for synergistic development across business segments and strengthened internal management to address competition, funding, and talent risks - The **COVID-19 pandemic in 2020 significantly impacted the progress and collection of the company's engineering projects**, but domestic epidemic prevention and control achieved remarkable results, with the central government introducing multiple financial support policies and **'new infrastructure' development opportunities**[87](index=87&type=chunk)[88](index=88&type=chunk) - The company's internal strengths include **R&D capabilities** through cooperation with research institutes and universities (**core technologies in soil remediation, water body treatment**), **multiple high-value qualifications**, and **strategic partnerships with enterprises and institutions**[89](index=89&type=chunk) - The company's development strategy is to adhere to **diversification**, leverage capital market advantages, combine organic growth with external expansion, build a **'solution + investment and operation' business model**, and become a leading international ecological environment service provider[91](index=91&type=chunk) - Operational plans include: **Jinglan Muhe** strengthening market development, risk control, refined management, and talent cultivation; **Zhongke Dingshi** promoting qualification upgrades, market expansion, financial compliance, and technology R&D; **Jinglan Environmental** deepening market expansion, comprehensive budget management, and business contract management; **Jinglan Yuanlin** establishing regional marketing and production models, and implementing project manager contracting[92](index=92&type=chunk)[93](index=93&type=chunk)[94](index=94&type=chunk) - The management headquarters will **enhance internal control compliance**, **improve capital and budget management**, **strengthen human resource development**, **perfect management systems**, and actively **explore domestic and international markets**[95](index=95&type=chunk) - Potential risks and countermeasures: **competition risk** (improving industry chain, external growth), **funding risk** (refinancing, industrial funds, strengthening management), **core talent cultivation risk** (detailed HR system, optimizing structure, improving incentives)[96](index=96&type=chunk) [X. Reception of Research, Communication, Interview, and Other Activities](index=30&type=section&id=X.%20Reception%20of%20Research%2C%20Communication%2C%20Interview%2C%20and%20Other%20Activities) This section discloses the company's reception of investor research and communication activities during the reporting period, including 36 phone communications with individual investors, primarily discussing company operations, project progress, fulfillment of compensation obligations, and future development plans, without disclosing undisclosed material information Reception of Research, Communication, Interview, and Other Activities During Reporting Period | Reception Date | Reception Method | Type of Recipient | Recipient | Main Topics Discussed and Materials Provided | Number of Receptions | Number of Individuals Received | Undisclosed Material Information Disclosed, Revealed, or Leaked | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | November 20, 2020 | Phone Communication | Individual | Investor | Company operations, project progress, fulfillment of compensation obligations, future development plans, etc.; no materials provided | 36 | 36 | No | [Part V Significant Events](index=31&type=section&id=Part%20V%20Significant%20Events) This section details the company's profit distribution plans, fulfillment of commitments, major litigation, and other significant events, providing insights into corporate governance and material developments [I. Profit Distribution of Ordinary Shares and Capital Reserve Conversion to Share Capital](index=31&type=section&id=I.%20Profit%20Distribution%20of%20Ordinary%20Shares%20and%20Capital%20Reserve%20Conversion%20to%20Share%20Capital) This section discloses the company's ordinary share dividend distribution plans for the past three years (2018-2020), all of which involve no cash dividends, bonus shares, or conversion of capital reserves into share capital - The company planned **no cash dividends, bonus shares, or conversion of capital reserves into share capital** for the 2018, 2019, and 2020 fiscal years[99](index=99&type=chunk) Company's Cash Dividend Distribution for Ordinary Shares in the Past Three Years | Dividend Year | Cash Dividend Amount (incl. tax) (RMB) | Net Profit Attributable to Ordinary Shareholders of Listed Company (RMB) | Ratio of Cash Dividend Amount to Net Profit Attributable to Ordinary Shareholders of Listed Company in Consolidated Statements | | :--- | :--- | :--- | :--- | | 2020 | 0.00 | -2,354,850,607.11 | 0.00% | | 2019 | 0.00 | -1,036,745,832.56 | 0.00% | | 2018 | 0.00 | 102,535,975.63 | 0.00% | [II. Profit Distribution and Capital Reserve Conversion to Share Capital for the Current Reporting Period](index=31&type=section&id=II.%20Profit%20Distribution%20and%20Capital%20Reserve%20Conversion%20to%20Share%20Capital%20for%20the%20Current%20Reporting%20Period) This section reiterates the company's plan for the year to not distribute cash dividends, bonus shares, or convert capital reserves into share capital - The company plans **no cash dividends, bonus shares, or conversion of capital reserves into share capital** for the year[102](index=102&type=chunk) [III. Fulfillment of Commitments](index=32&type=section&id=III.%20Fulfillment%20of%20Commitments) This section details the fulfillment status of commitments by the company's actual controller, shareholders, related parties, and the company itself during the reporting period, including independence, avoidance of horizontal competition, regulation of related-party transactions, share lock-up, and performance commitments; notably, Beifang Yuanlin's performance commitment was not met, and the company has filed a lawsuit and obtained a judgment - Multiple commitments are ongoing, including **long-term commitments from the controlling shareholder and actual controller regarding independence, avoidance of horizontal competition, and regulation and reduction of related-party transactions**[103](index=103&type=chunk)[104](index=104&type=chunk)[105](index=105&type=chunk)[106](index=106&type=chunk)[107](index=107&type=chunk)[108](index=108&type=chunk)[109](index=109&type=chunk)[110](index=110&type=chunk)[111](index=111&type=chunk)[112](index=112&type=chunk)[113](index=113&type=chunk) - Beifang Yuanlin's performance commitment was **overdue and unfulfilled**, primarily due to **macroeconomic conditions and changes in the financial environment**, leading to reduced operating revenue and decreased profit; the company has filed a lawsuit and obtained a judgment, requiring the compensation obligors to fulfill their compensation obligations[114](index=114&type=chunk) Zhongke Dingshi Environmental Engineering Co., Ltd. 2020 Performance Commitment Fulfillment | Indicator | Committed Performance (RMB 10,000) | Actual Performance for Current Period (RMB 10,000) | Performance Commitment Ratio | | :--- | :--- | :--- | :--- | | Net profit attributable to parent company after deducting non-recurring gains and losses | 40,000 (three-year cumulative) | 11,685.96 (2020) | N/A | | Net cash flow from operating activities | 15,000 (three-year cumulative) | N/A | N/A | - Zhongke Dingshi's 2020 performance commitment fulfillment **exceeded profit forecast expectations**, and **no goodwill impairment was recognized** during the reporting period[117](index=117&type=chunk) [IV. Non-Operating Fund Occupation by Controlling Shareholder and Its Related Parties](index=44&type=section&id=IV.%20Non-Operating%20Fund%20Occupation%20by%20Controlling%20Shareholder%20and%20Its%20Related%20Parties) This section states that during the reporting period, there was no non-operating fund occupation by the controlling shareholder and its related parties of the listed company - The company **had no non-operating fund occupation by its controlling shareholder or related parties** during the reporting period[117](index=117&type=chunk) [V. Explanations by the Board of Directors, Supervisory Board, and Independent Directors (if any) on the Accounting Firm's 'Non-Standard Audit Report' for the Current Period](index=44&type=section&id=V.%20Explanations%20by%20the%20Board%20of%20Directors%2C%20Supervisory%20Board%2C%20and%20Independent%20Directors%20(if%20any)%20on%20the%20Accounting%20Firm%27s%20%27Non-Standard%20Audit%20Report%27%20for%20the%20Current%20Period) This section states that the accounting firm did not issue a non-standard audit report for the company during the reporting period - The company **did not receive a non-standard audit report** from the accounting firm during the reporting period[118](index=118&type=chunk) [VI. Explanation of Changes in Accounting Policies, Accounting Estimates, and Accounting Methods Compared to the Previous Year's Financial Report](index=44&type=section&id=VI.%20Explanation%20of%20Changes%20in%20Accounting%20Policies%2C%20Accounting%20Estimates%2C%20and%20Accounting%20Methods%20Compared%20to%20the%20Previous%20Year%27s%20Financial%20Report) This section explains that the company adopted new revenue standards from January 1, 2020, and retrospectively adjusted relevant items in the opening consolidated financial statements, detailing the impact on consolidated balance sheet and income statement items under both new and old standards - The company adopted the Ministry of Finance's revised **'Enterprise Accounting Standard No. 14—Revenue' (New Revenue Standard)** starting **January 1, 2020**[118](index=118&type=chunk)[119](index=119&type=chunk) Impact of Adopting New Revenue Standard on Opening Consolidated Statement Items for 2020 | Statement Item | December 31, 2019 (RMB) | January 1, 2020 (RMB) | | :--- | :--- | :--- | | Contract Assets | 0.00 | 3,203,726,524.07 | | Inventories | 4,354,696,634.50 | 680,900,264.45 | | Advances from Customers | 905,195,208.15 | 0.00 | | Contract Liabilities | 0.00 | 412,191,529.29 | | Undistributed Profits | -581,857,220.20 | -592,947,437.92 | | Owners' Equity Attributable to Parent Company | 4,635,903,674.91 | 4,624,813,457.19 | Impact of Adopting New Revenue Standard on 2020 Consolidated Income Statement Items | Statement Item | Current Period Amount Under New Standard (RMB) | Current Period Amount Under Original Standard (RMB) | | :--- | :--- | :--- | | Asset Impairment Losses | -1,334,086,677.94 | -1,338,171,195.42 | | Total Profit | -2,481,562,301.71 | -2,485,646,819.19 | | Net Profit | -2,531,322,158.15 | -2,534,655,123.93 | [VII. Explanation of Significant Accounting Error Corrections Requiring Retrospective Restatement During the Reporting Period](index=45&type=section&id=VII.%20Explanation%20of%20Significant%20Accounting%20Error%20Corrections%20Requiring%20Retrospective%20Restatement%20During%20the%20Reporting%20Period) This section states that the company had no significant accounting error corrections requiring retrospective restatement during the reporting period - The company **had no significant accounting error corrections requiring retrospective restatement** during the reporting period[121](index=121&type=chunk) [VIII. Explanation of Changes in Consolidation Scope Compared to the Previous Year's Financial Report](index=45&type=section&id=VIII.%20Explanation%20of%20Changes%20in%20Consolidation%20Scope%20Compared%20to%20the%20Previous%20Year%27s%20Financial%20Report) This section explains that the company's consolidation scope changed in 2020, with 2 new subsidiaries added and 3 deregistered, reducing the total number of consolidated subsidiaries from 48 to 47 - In 2020, the company consolidated **47 subsidiaries**, an increase of **2** and a decrease of **3** compared to the previous period[122](index=122&type=chunk) - Newly consolidated subsidiaries established in the current period are **Jinglan Environmental Technology (Chengdu) Co., Ltd. and Chifeng Muhe Hotel Co., Ltd.**[123](index=123&type=chunk) - Subsidiaries deregistered in the current period are **Jinglan Muhe Julu Tiantiantong Agricultural Water Supply Co., Ltd., Tianjin Landscape Water Environment Restoration Technology Co., Ltd., and Tianjin Beifang Kechuang Environmental Testing Co., Ltd.**[123](index=123&type=chunk) [IX. Appointment and Dismissal of Accounting Firms](index=46&type=section&id=IX.%20Appointment%20and%20Dismissal%20of%20Accounting%20Firms) This section discloses that the company appointed Zhongxingcai Guanghua Certified Public Accountants (Special General Partnership) as its 2020 audit firm and states that no change in accounting firms occurred during the reporting period - The company engaged **Zhongxingcai Guanghua Certified Public Accountants (Special General Partnership)** as its domestic accounting firm, with **6 consecutive years of audit services** and a remuneration of **1.05 million RMB**[124](index=124&type=chunk) - During the reporting period, the company **did not change its accounting firm**[124](index=124&type=chunk) - The company engaged **Zhongxingcai Guanghua Certified Public Accountants (Special General Partnership)** as its 2020 internal control audit firm, with a fee of **600,000 RMB**[124](index=124&type=chunk) [X. Delisting Risk After Annual Report Disclosure](index=46&type=section&id=X.%20Delisting%20Risk%20After%20Annual%20Report%20Disclosure) This section states that the company does not face delisting after the annual report disclosure - The company **did not face delisting** during the reporting period[125](index=125&type=chunk) [XI. Bankruptcy and Reorganization Matters](index=46&type=section&id=XI.%20Bankruptcy%20and%20Reorganization%20Matters) This section states that the company had no bankruptcy and reorganization matters during the reporting period - The company **had no bankruptcy and reorganization matters** during the reporting period[125](index=125&type=chunk) [XII. Major Litigation and Arbitration Matters](index=46&type=section&id=XII.%20Major%20Litigation%20and%20Arbitration%20Matters) This section discloses the company's major litigation and arbitration matters, primarily including lawsuits filed against relevant parties due to Beifang Yuanlin's unfulfilled performance commitment, for which the court has issued a first-instance judgment requiring compensation; it also discloses other litigation and arbitration cases not meeting the materiality threshold - Due to **Beifang Yuanlin's unfulfilled performance commitment**, the company filed a lawsuit against **Beikong Engineering, Gao Xuegang, and other related parties**, involving an amount of **720.88 million RMB**[126](index=126&type=chunk) - The court has issued a **first-instance judgment** regarding the Beifang Yuanlin performance commitment lawsuit, requiring the defendants to fulfill their compensation obligations, with the judgment result **not impacting the company's 2020 net profit**[126](index=126&type=chunk) Major Litigation and Arbitration Matters During Reporting Period | Basic Information of Litigation (Arbitration) | Amount Involved (RMB 10,000) | Provision for Liabilities Formed | Litigation (Arbitration) Progress | Execution Status of Litigation (Arbitration) Judgment | | :--- | :--- | :--- | :--- | :--- | | Beifang Yuanlin performance commitment unfulfilled lawsuit | 72,087.85 | No | Court has issued a first-instance judgment | Not yet started execution | | Litigation/arbitration not meeting major disclosure standards - Company (incl. subsidiaries) suing others | 3,383.36 | No | Some have been concluded with judgments, some are not yet heard or withdrawn/settled | Some executed, some not yet in execution phase | | Litigation/arbitration not meeting major disclosure standards - Others suing the company (incl. subsidiaries) | 26,097 | No | Some have been concluded with judgments, some are not yet heard or withdrawn/settled | Some executed, some not yet in execution phase | [XIII. Penalties and Rectification](index=48&type=section&id=XIII.%20Penalties%20and%20Rectification) This section states that the company had no penalties or rectification situations during the reporting period - The company **had no penalties or rectification situations** during the reporting period[129](index=129&type=chunk) [XIV. Integrity Status of the Company, Its Controlling Shareholder, and Actual Controller](index=49&type=section&id=XIV.%20Integrity%20Status%20of%20the%20Company%2C%20Its%20Controlling%20Shareholder%2C%20and%20Actual%20Controller) This section states that the company, its controlling shareholder, and actual controller maintain good integrity, with no unfulfilled court judgments or overdue unpaid debts - The company, its controlling shareholder, and actual controller maintain **good integrity**, with **no unfulfilled court judgments or large overdue unpaid debts**[130](index=130&type=chunk) [XV. Implementation of Equity Incentive Plans, Employee Stock Ownership Plans, or Other Employee Incentive Measures](index=49&type=section&id=XV.%20Implementation%20of%20Equity%20Incentive%20Plans%2C%20Employee%20Stock%20Ownership%20Plans%2C%20or%20Other%20Employee%20Incentive%20Measures) This section states that the company had no implementation of equity incentive plans, employee stock ownership plans, or other employee incentive measures during the reporting period - The company **had no equity incentive plans, employee stock ownership plans, or other employee incentive measures** or their implementation during the reporting period[131](index=131&type=chunk) [XVI. Major Related-Party Transactions](index=49&type=section&id=XVI.%20Major%20Related-Party%20Transactions) This section states that during the reporting period, the company had no related-party transactions related to daily operations, asset or equity acquisitions/disposals, joint external investments, or non-operating related-party receivables/payables - The company **had no related-party transactions related to daily operations** during the reporting period[132](index=132&type=chunk) - The company **had no related-party transactions involving asset or equity acquisitions/disposals** during the reporting period[133](index=133&type=chunk) - The company **had no related-party transactions involving joint external investments** during the reporting period[134](index=134&type=chunk) - The company **had no non-operating related-party receivables or payables** during the reporting period[135](index=135&type=chunk) [XVII. Major Contracts and Their Fulfillment](index=50&type=section&id=XVII.%20Major%20Contracts%20and%20Their%20Fulfillment) This section discloses the company's major contract fulfillment during the reporting period, including leasing matters, significant guarantees, and major ordinary course contracts; the company has office leases and provided multiple guarantees for subsidiaries, with total guarantees accounting for 149.83% of net assets; it also lists several ongoing major ordinary course contracts - To meet office needs, the company leased **part of the second floor of Poly International Plaza T2, Wangjing Dongyuan 7th District, Chaoyang District, Beijing**[139](index=139&type=chunk) External Guarantees by the Company and Its Subsidiaries (Excluding Guarantees to Subsidiaries) | Guaranteed Party Name | Guaranteed Amount (RMB 10,000) | Actual External Guarantee Balance at Period-End (RMB 10,000) | | :--- | :--- | :--- | | Jiaozuo Runhua Chemical Industry Co., Ltd. | 10,000 | 5,000 | | Ulanqab Jinglan Ecological Technology Co., Ltd. | 40,000 | 25,000 | - At the end of the reporting period, the company's **total guarantees amounted to 3.34 billion RMB**, accounting for **149.83% of the company's net assets**[150](index=150&type=chunk) - The company provided multiple guarantees for subsidiaries, including **Jinglan Muhe, Beifang Yuanlin, Jinglan Ecological, Jinglan Nengke, Jinglan Environmental Technology, Jinglan Environmental Construction, Jinglan Resource Technology, and Zhongke Dingshi**, with guarantee methods including **joint and several liability guarantees, mortgage guarantees, and pledge guarantees**[143](index=143&type=chunk)[144](index=144&type=chunk)[145](index=145&type=chunk)[146](index=146&type=chunk)[147](index=147&type=chunk)[148](index=148&type=chunk)[149](index=149&type=chunk)[150](index=150&type=chunk)[151](index=151&type=chunk)[152](index=152&type=chunk)[153](index=153&type=chunk) - The company signed multiple major ordinary course contracts, including the **Gaotang County Rural Revitalization Demonstration Project, Tianjin Beichen District Chemical Hazardous Goods Trade and Storage Company Site Remediation Project, and Shandong Dacheng Agricultural Chemical Co., Ltd. Phase II Soil Remediation Project**, with some projects completed and others in construction or design phases[157](index=157&type=chunk)[158](index=158&type=chunk)[159](index=159&type=chunk) [XVIII. Social Responsibility](index=61&type=section&id=XVIII.%20Social%20Responsibility) This section describes the company's fulfillment of social responsibilities, including upholding its corporate mission, developing core businesses, strictly adhering to environmental responsibilities, engaging in public welfare activities, and technological innovation; the company actively participates in targeted poverty alleviation through donations, educational support, elderly care, disability assistance, and medical aid, and implements industry-based poverty alleviation aligned with its main business - The company upholds its mission of **'Green Mountains, Clear Waters, Blue Skies, Enduring China Dream,'** focusing on the ecological environment sector and striving to become a leading international **'ecological environment planning, investment, construction, and operation service provider'**[161](index=161&type=chunk) - The company actively responded to targeted poverty alleviation initiatives, with **Jinglan Yuanlin donating to 7 assisted villages in Lintan County, Gansu Province**, and **Jinglan Muhe donating supplies to students in Shaburitai Village, Chifeng City**, and participating in poverty alleviation and warmth-giving activities[163](index=163&type=chunk) 2020 Targeted Poverty Alleviation Achievements | Indicator | Unit | Quantity/Status | | :--- | :--- | :--- | | Overall situation: Funds | RMB 10,000 | 7.1 | | Overall situation: Material equivalent | RMB 10,000 | 1.01 | | Other projects: Number of projects | projects | 9 | | Other projects: Investment amount | RMB 10,000 | 8.11 | - The company's subsequent targeted poverty alleviation plan will involve **job creation, placement of disabled individuals, and industry-based poverty alleviation** leveraging its main business[165](index=165&type=chunk) - The company and its subsidiaries are **not classified as key polluting units** by environmental protection authorities[166](index=166&type=chunk) [XIX. Explanation of Other Significant Matters](index=63&type=section&id=XIX.%20Explanation%20of%20Other%20Significant%20Matters) This section states that the company had no other significant matters requiring explanation during the reporting period - The company **had no other significant matters requiring explanation** during the reporting period[166](index=166&type=chunk) [XX. Significant Matters of Company Subsidiaries](index=63&type=section&id=XX.%20Significant%20Matters%20of%20Company%20Subsidiaries) This section states that the company had no significant matters concerning its subsidiaries during the reporting period - The company **had no significant matters concerning its subsidiaries** during the reporting period[167](index=167&type=chunk) [Part VI Share Changes and Shareholder Information](index=64&type=section&id=Part%20VI%20Share%20Changes%20and%20Shareholder%20Information) This section details the company's share capital changes, securities issuance, and the status of its shareholders and actual controller, including major shareholding structures and any pledges or freezes [I. Share Change Status](index=64&type=section&id=I.%20Share%20Change%20Status) This section details the changes in the company's total shares, restricted shares, and unrestricted shares during the reporting period, primarily due to the lifting of restrictions on some shareholders' shares Share Change Status (2020) | Share Class | Number Before Change (shares) | Proportion Before Change | Change (Increase/Decrease) (shares) | Number After Change (shares) | Proportion After Change | | :--- | :--- | :--- | :--- | :--- | :--- | | I. Restricted Shares | 290,697,495 | 28.40% | -88,894,705 | 201,802,790 | 19.71% | | II. Unrestricted Shares | 732,970,321 | 71.60% | 88,894,705 | 821,865,026 | 80.29% | | III. Total Shares | 1,023,667,816 | 100.00% | 0 | 1,023,667,816 | 100.00% | - The main reason for share changes was the company processing the **lifting of restrictions on 82,281,059 shares** for 9 shareholders, including **Yin Xiaodong and Banding Asset Management**[170](index=170&type=chunk) Changes in Restricted Shares (Partial Shareholders) | Shareholder Name | Restricted Shares at Beginning of Period (shares) | Restricted Shares Released in Current Period (shares) | Restricted Shares at End of Period (shares) | Reason for Restriction | | :--- | :--- | :--- | :--- | :--- | | Yin Xiaodong | 113,842,569 | 28,460,642 | 85,381,927 | Additional Issuance | | Banding Asset Management | 48,141,732 | 48,141,732 | 0 | Additional Issuance | | Gu'an Yichang | 5,078,092 | 5,078,092 | 0 | Additional Issuance | [II. Securities Issuance and Listing](index=66&type=section&id=II.%20Securities%20Issuance%20and%20Listing) This section states that the company had no securities issuance during the reporting period, no explanations for changes in total shares, shareholder structure, or asset and liability structure, and no existing internal employee shares - The company **had no securities issuance (excluding preferred shares)** during the reporting period[173](index=173&type=chunk) - The company **had no explanations for changes in total shares and shareholder structure, or changes in the company's asset and liability structure** during the reporting period[173](index=173&type=chunk) - The company **had no existing internal employee shares** during the reporting period[173](index=173&type=chunk) [III. Shareholders and Actual Controller](index=66&type=section&id=III.%20Shareholders%20and%20Actual%20Controller) This section discloses the company's shareholder count and shareholding, including the top 10 shareholders' proportions, quantities, and pledge/freeze status; the controlling shareholder is Beijing Yangshu Lantian Investment Center (Limited Partnership), and the actual controller is Guo Shaozeng, with no changes during the reporting period - At the end of the reporting period, the total number of ordinary shareholders was **32,277**[174](index=174&type=chunk) Top 5 Shareholders' Shareholding (Year-End 2020) | Shareholder Name | Shareholder Nature | Shareholding Proportion | Shares Held at Period-End (shares) | Pledge or Freeze Status (shares) | | :--- | :--- | :--- | :--- | :--- | | Beijing Yangshu Lantian Investment Center (Limited Partnership) | Domestic Non-State-Owned Legal Person | 16.68% | 170,763,781 | Pledged: 170,735,328 | | Yin Xiaodong | Domestic Natural Person | 11.12% | 113,842,569 | N/A | | Beijing Yangshu Jiaye Investment Center (Limited Partnership) | Domestic Non-State-Owned Legal Person | 9.21% | 94,316,806 | Pledged: 94,316,806 | | Wuliji | Domestic Natural Person | 5.65% | 57,814,766 | Pledged: 57,799,998 | | Jinglan Holdings Co., Ltd. | Domestic Non-State-Owned Legal Person | 5.10% | 52,200,000 | Pledged: 50,026,701 | - The controlling shareholder is **Beijing Yangshu Lantian Investment Center (Limited Partnership)**, and the actual controller is **Guo Shaozeng**, with **no changes** during the reporting period[177](index=177&type=chunk)[178](index=178&type=chunk)[179](index=179&type=chunk) [Part VII Preferred Shares Related Information](index=70&type=section&id=Part%20VII%20Preferred%20Shares%20Related%20Information) This section confirms that the company had no preferred shares during the reporting period [Preferred Shares Related Information](index=70&type=section&id=Preferred%20Shares%20Related%20Information) This section states that the company had no preferred shares during the reporting period - The company **had no preferred shares** during the reporting period[184](index=184&type=chunk) [Part VIII Convertible Corporate Bonds Related Information](index=71&type=section&id=Part%20VIII%20Convertible%20Corporate%20Bonds%20Related%20Information) This section confirms that the company had no convertible corporate bonds during the reporting period [Convertible Corporate Bonds Related Information](index=71&type=section&id=Convertible%20Corporate%20Bonds%20Related%20Information) This section states that the company had no convertible corporate bonds during the reporting period - The company **had no convertible corporate bonds** during the reporting period[186](index=186&type=chunk) [Part IX Directors, Supervisors, Senior Management, and Employees](index=72&type=section&id=Part%20IX%20Directors%2C%20Supervisors%2C%20Senior%20Management%2C%20and%20Employees) This section provides details on the shareholdings, changes, professional backgrounds, and compensation of the company's directors, supervisors, and senior management, along with an overview of the employee structure and related policies [I. Shareholding Changes of Directors, Supervisors, and Senior Management](index=72&type=section&id=I.%20Shareholding%20Changes%20of%20Directors%2C%20Supervisors%2C%20and%20Senior%20Management) This section lists the shareholdings of the company's directors, supervisors, and senior management, including opening and closing share counts and changes during the period, noting that some executives, such as Liu Xin, Guo Yuanyuan, Li Guirong, Wuliji, and Yin Xiaodong, hold company shares Shareholding Changes of Directors, Supervisors, and Senior Management (Partial) | Name | Position | Shares Held at Beginning of Period (shares) | Shares Held at End of Period (shares) | | :--- | :--- | :--- | :--- | | Liu Xin | Director, Vice President, Board Secretary | 124,799 | 124,799 | | Guo Yuanyuan | Vice President | 497,400 | 497,400 | | Li Guirong | Vice President | 72,780 | 72,780 | | Wuliji | Vice President | 57,814,766 | 57,814,766 | | Yin Xiaodong | Vice President | 113,842,569 | 113,842,569 | [II. Changes in Company Directors, Supervisors, and Senior Management](index=74&type=section&id=II.%20Changes%20in%20Company%20Directors%2C%20Supervisors%2C%20and%20Senior%20Management) This section discloses changes in the company's directors, supervisors, and senior management during the reporting period, including Jiang Lizhe's resignation as Executive President, position adjustments for Yang Rengui and Hao Xin, and the departures of Wu Chunjun and Li Wenming - Jiang Lizhe resigned as Executive President on **April 13, 2021**, due to personal reasons[190](index=190&type=chunk) - Yang Rengui and Hao Xin's positions were adjusted, with **Yang Rengui appointed President and Hao Xin appointed Executive President**[190](index=190&type=chunk) - Wu Chunjun resigned as Vice Chairman and President, and Li Wenming resigned as Vice President[190](index=190&type=chunk) [III. Employment Status](index=74&type=section&id=III.%20Employment%20Status) This section details the professional backgrounds, key work experiences, and internal and external appointments of the company's current directors, supervisors, and senior management, including positions in shareholder entities and other organizations, and states no securities regulatory penalties in the past three years - Chairman **Yang Rengui holds a Ph.D. in Finance** and previously served as Chairman and President of Boya Software Group[191](index=191&type=chunk) - President **Hao Xin previously served as Director, Party Secretary, and Executive Deputy General Manager of Beijing Urban Construction Environmental Remediation Co., Ltd.**[192](index=192&type=chunk) - Board Secretary **Liu Xin holds a master's degree and a Tsinghua EMBA background**[194](index=194&type=chunk) - Supervisory Board Chairman **Yin Zhoucheng is a Senior Economist** and previously served as Vice President and Chairman of Jilin Pan-Asia Trust and Investment Co., Ltd.[196](index=196&type=chunk) - Vice President **Yin Xiaodong currently serves as Chairman of Zhongke Dingshi**[198](index=198&type=chunk) - The company's current and departed directors, supervisors, and senior management **had no securities regulatory penalties in the past three years**[200](index=200&type=chunk) [IV. Compensation of Directors, Supervisors, and Senior Management](index=78&type=section&id=IV.%20Compensation%20of%20Directors%2C%20Supervisors%2C%20and%20Senior%20Management) This section discloses the decision-making process, determination basis, and actual payment of compensation for the company's directors, supervisors, and senior management; in 2020, the total pre-tax compensation paid to directors, supervisors, and senior management was 5.54 million RMB - Compensation for directors, supervisors, and senior management is determined by the **company's board of directors and general meeting of shareholders**, based on **job responsibilities, performance appraisals, and industry compensation levels**[201](index=201&type=chunk) 2020 Compensation of Directors, Supervisors, and Senior Management (Partial) | Name | Position | Total Pre-Tax Compensation from Company (RMB 10,000) | Received Compensation from Company's Related Parties | | :--- | :--- | :--- | :--- | | Yang Rengui | Chairman | 60 | No | | Hao Xin | Director, President | 82.98 | No | | Jiang Lizhe | Director, Executive President | 66.8 | No | | Liu Xin | Director, Vice President, Board Secretary | 50.17 | No | | Nie Xingkai | Independent Director | 12 | No | | Zhu Jiang | Independent Director | 12 | No | | Meng Chen | Supervisor | 0 | Yes | | Total | -- | 554 | -- | [V. Company Employee Information](index=79&type=section&id=V.%20Company%20Employee%20Information) This section details the company's employee count, professional composition, and education levels, and outlines its compensation policies and training plans; as of the end of the reporting period, the company had a total of 1,078 active employees, with a higher proportion of engineering and technical personnel 2020 Employee Count and Professional Composition | Indicator | Quantity (people) | | :--- | :--- | | Total number of active employees | 1,078 | | Production personnel | 143 | | Sales personnel | 95 | | Technical personnel | 120 | | Financial personnel | 69 | | Administrative personnel | 53 | | Engineering personnel | 345 | | Other | 253 | 2020 Employee Education Level | Education Level Category | Quantity (people) | | :--- | :--- | | Postgraduate (Doctorate and above) | 15 | | Postgraduate (Master's) | 158 | | Undergraduate | 387 | | Junior College | 229 | | High School and below | 289 | - The company's compensation policy is divided into **position-based salary and performance-based salary**, determined by **employee attendance, work completion, and appraisal results**[207](index=207&type=chunk) - In 2020, **new employee training coverage reached 100%**, and online vocational skills training was conducted; in 2021, micro-classroom training will continue to enhance employees' comprehensive quality[208](index=208&type=chunk) [Part X Corporate Governance](index=81&type=section&id=Part%20X%20Corporate%20Governance) This section details the company's corporate governance structure, its independence from the controlling shareholder, the functioning of its board committees and supervisory board, and the internal control system [I. Basic Status of Corporate Governance](index=81&type=section&id=I.%20Basic%20Status%20of%20Corporate%20Governance) This section outlines the basic status of corporate governance, emphasizing the company's strict adherence to rele

无锡路通视信网络股份有限公司 2025 年半年度报告全文 无锡路通视信网络股份有限公司 2025 年半年度报告 2025-075 2025 年 8 月 1 无锡路通视信网络股份有限公司 2025 年半年度报告全文 第一节 重要提示、目录和释义 公司董事会、监事会及除以下存在异议声明的董事、监事、高级管理人 员外的其他董事、监事、高级管理人员均保证半年度报告内容的真实、准确、 完整，不存在虚假记载、误导性陈述或重大遗漏，并承担个别和连带的法律 责任。 2 姓名 职务 内容和原因 曾庆川 监事会主席 1、关于江苏证监局处罚 的整改 公司及相关责任人于 2025 年 6 月 23 日收到 中国证券监督管理委员 会江苏监管局（以下简 称"江苏证监局"）下 发的《江苏证监局关于 对无锡路通视信网络股 份有限公司采取责令改 正措施并对邱京卫采取 出具警示函措施的决 定》。对于上述处罚的 整改，公司《2025 年半 年度报告》之"九、处 罚及整改情况"部分的 董事、监事、高级管理人员异议声明 无锡路通视信网络股份有限公司 2025 年半年度报告全文 | "整改情况说明"第 2 | | --- | | 点中表述，公司"严格 ...

PB / / 1 2025 2025 2025 2025 重要提示 一、本公司董事会、监事会及董事、监事、高级管理人员保证半年度报告内容的真实性、准确性、完整性，不存在虚假记载、 误导性陈述或重大遗漏，并承担个别和连带的法律责任。 二、本报告经公司第五届董事会第十七次会议审议通过。公司全体董事出席董事会会议。 三、本半年度报告未经审计。 四、公司负责人施华、主管会计工作负责人李岩及会计机构负责人（会计主管人员）祖坤声明：保证半年度报告中财务报告 的真实、准确、完整。 五、董事会决议通过的本报告期利润分配预案或公积金转增股本预案 2025 年半年度进行现金分红，以实施现金分红股权登记日登记的总股本为基数，向全体股东每 10 股派发现金红利 0.61 元（含税），合计派发现金红利总额 502,158,185.10 元（含税）。在实施权益分派的股权登记日前公司总股本发生变动的， 维持分配总额不变，相应调整每股分配金额。 六、前瞻性陈述的风险声明 本报告内容涉及的未来计划等前瞻性陈述因存在不确定性，不构成公司对投资者的实质承诺，请投资者注意投资风险。 七、是否存在被控股股东及其他关联方非经营性占用资金情况 否 八、是 ...

[Important Notice](index=2&type=section&id=Important%20Notice) The company's board, supervisory board, and senior management guarantee the truthfulness, accuracy, and completeness of the semi-annual report, which is unaudited, with no profit distribution or capital reserve conversion to share capital during the reporting period, and forward-looking statements do not constitute a substantive commitment to investors - The company's board, supervisory board, and senior management guarantee the truthfulness, accuracy, and completeness of the semi-annual report content, with no false records, misleading statements, or major omissions[3](index=3&type=chunk) - This semi-annual report is unaudited[5](index=5&type=chunk) - No profit distribution or capital reserve conversion to share capital occurred during the reporting period[6](index=6&type=chunk) - Forward-looking statements regarding future plans and development strategies in this report do not constitute a substantive commitment to investors; investors are advised to be aware of investment risks[7](index=7&type=chunk) [Section I Definitions](index=4&type=section&id=Section%20I%20Definitions) This section defines common terms used in the report, such as "CSRC," "SSE," "Huayang Group," and abbreviations for the company and its subsidiaries, ensuring clear understanding of the report content - This section primarily explains common terms used in the report, such as "CSRC," "SSE," "Huayang Group," and abbreviations for the company and its subsidiaries, to ensure clear understanding of the report content[13](index=13&type=chunk)[14](index=14&type=chunk) [Section II Company Profile and Key Financial Indicators](index=6&type=section&id=Section%20II%20Company%20Profile%20and%20Key%20Financial%20Indicators) This section provides the company's basic information, contact details, changes in registration, information disclosure, stock overview, and a summary of key financial data and indicators, highlighting the impact of market conditions on performance [I. Company Information](index=6&type=section&id=I.%20Company%20Information) This section discloses the company's basic registration information, including its Chinese name, abbreviation, foreign name and abbreviation, and legal representative - The company's Chinese name is Shanxi Huayang Group Xinneng Co., Ltd., abbreviated as Huayang Shares, with Wang Yuming as the legal representative[16](index=16&type=chunk) [II. Contact Person and Information](index=6&type=section&id=II.%20Contact%20Person%20and%20Information) This section provides the name, address, telephone number, and email of the company's Board Secretary for investor and public communication - The Board Secretary is Lu Xinbao, contact number **0353-7078618**, email hygf600348@sina.com[17](index=17&type=chunk) [III. Brief Introduction to Changes in Basic Information](index=6&type=section&id=III.%20Brief%20Introduction%20to%20Changes%20in%20Basic%20Information) This section details changes in the company's registered and office addresses, along with its postal code and website - The company's registered and office addresses are both No. 2 Taobei West Street, Yangquan City, Shanxi Province, and the company website is https://yqmy.ymjt.com.cn[18](index=18&type=chunk) [IV. Brief Introduction to Changes in Information Disclosure and Document Storage Locations](index=6&type=section&id=IV.%20Brief%20Introduction%20to%20Changes%20in%20Information%20Disclosure%20and%20Document%20Storage%20Locations) This section specifies the company's designated newspapers for information disclosure, the website for semi-annual reports, and the report storage location - The company's information disclosure newspapers are "China Securities Journal," "Shanghai Securities News," and "Securities Daily," with reports published on www.sse.com.cn[19](index=19&type=chunk) [V. Company Stock Profile](index=6&type=section&id=V.%20Company%20Stock%20Profile) This section provides the company's stock type, listing exchange, stock abbreviation, code, and previous stock abbreviation - The company's A-shares are listed on the Shanghai Stock Exchange, with stock abbreviation Huayang Shares and stock code **600348**[20](index=20&type=chunk) [VII. Company's Key Accounting Data and Financial Indicators](index=6&type=section&id=VII.%20Company's%20Key%20Accounting%20Data%20and%20Financial%20Indicators) During the reporting period, the company experienced significant declines in operating revenue, total profit, and net profit attributable to parent company shareholders, primarily due to coal mine safety regulations and weak coal market demand Key Accounting Data (Jan-Jun 2025 vs. Prior Year Period) | Indicator | Current Period (Jan-Jun) (yuan) | Prior Year Period (yuan) | Period-on-Period Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 11,239,594,090.35 | 12,198,928,752.69 | -7.86 | | Total Profit | 1,268,956,416.93 | 1,919,393,536.75 | -33.89 | | Net Profit Attributable to Parent Company Shareholders | 782,636,331.30 | 1,298,886,234.29 | -39.75 | | Net Profit Attributable to Parent Company Shareholders (Excl. Non-recurring Gains/Losses) | 824,113,353.42 | 1,215,200,294.52 | -32.18 | | Net Cash Flow from Operating Activities | 51,817,267.07 | 140,094,169.67 | -63.01 | | Net Assets Attributable to Parent Company Shareholders (Period-end) | 33,250,077,659.72 | 33,277,589,256.26 | -0.08 | | Total Assets (Period-end) | 82,204,974,697.40 | 80,971,454,001.07 | 1.52 | Key Financial Indicators (Jan-Jun 2025 vs. Prior Year Period) | Indicator | Current Period (Jan-Jun) | Prior Year Period | Period-on-Period Change (%) | | :--- | :--- | :--- | :--- | | Basic Earnings Per Share (yuan/share) | 0.22 | 0.36 | -38.89 | | Diluted Earnings Per Share (yuan/share) | 0.22 | 0.36 | -38.89 | | Basic Earnings Per Share (Excl. Non-recurring Gains/Losses) (yuan/share) | 0.23 | 0.34 | -32.35 | | Weighted Average Return on Equity (%) | 2.81 | 4.53 | Decreased by 1.72 percentage points | | Weighted Average Return on Equity (Excl. Non-recurring Gains/Losses) (%) | 2.96 | 4.24 | Decreased by 1.28 percentage points | - The main reason for the year-on-year decrease in the company's net profit was the decline in the comprehensive selling price of its main coal products, influenced by coal mine safety production supervision and weak coal market demand[24](index=24&type=chunk) [IX. Non-recurring Gains and Losses Items and Amounts](index=7&type=section&id=IX.%20Non-recurring%20Gains%20and%20Losses%20Items%20and%20Amounts) This section lists non-recurring gains and losses for the reporting period, totaling **-41.48 million yuan**, primarily including government subsidies, reversal of impairment provisions for receivables, and other non-operating income and expenses Non-recurring Gains and Losses Items and Amounts | Non-recurring Gains and Losses Item | Amount (yuan) | | :--- | :--- | | Non-current asset disposal gains/losses | -84,173.72 | | Government subsidies included in current profit/loss | 29,819,233.43 | | Reversal of impairment provisions for receivables subject to separate impairment testing | 10,168,549.61 | | Custody fee income from entrusted operations | -259,464.09 | | Other non-operating income and expenses apart from the above | -93,080,455.64 | | Less: Income tax impact | 4,580,671.62 | | Minority interest impact (after tax) | -16,539,959.91 | | Total | -41,477,022.12 | [Section III Management Discussion and Analysis](index=9&type=section&id=Section%20III%20Management%20Discussion%20and%20Analysis) This section discusses the company's industry and main business operations, analyzes operating performance, core competitiveness, and key financial changes, and outlines potential risks and strategic responses [I. Description of the Company's Industry and Main Business Operations during the Reporting Period](index=9&type=section&id=I.%20Description%20of%20the%20Company's%20Industry%20and%20Main%20Business%20Operations%20during%20the%20Reporting%20Period) In the first half of 2025, China's coal industry saw strong supply and weak demand, leading to increased coal production but soft downstream demand, pushing coal prices to a multi-year low, while the company's main business diversified across coal, power, heating, and new energy [(1) Overall Industry Overview](index=9&type=section&id=(1)%20Overall%20Industry%20Overview) In H1 2025, national coal output grew by **5.4%**, but weak demand from power, construction, and steel sectors led to a supply-demand imbalance and record low coal prices, with a short-term price rebound expected in July-August due to high temperatures and supply constraints - From January to June 2025, national coal output above designated size reached **2.40 billion tons**, a year-on-year increase of **5.4%**[30](index=30&type=chunk) - Downstream demand was weak, with thermal power, crude steel, and cement output decreasing by **2.4%**, **3.0%**, and **4.3%** year-on-year, respectively[30](index=30&type=chunk) - The coal market continued to show a strong supply and weak demand pattern, with prices for all coal types reaching multi-year lows[30](index=30&type=chunk) [(2) Description of the Company's Main Business Operations](index=9&type=section&id=(2)%20Description%20of%20the%20Company's%20Main%20Business%20Operations) Huayang Shares, as the listed energy arm of Huayang Group, primarily engages in coal production, washing, processing, and sales, power and heat generation and sales, as well as manufacturing of photovoltaic equipment and sodium-ion batteries, and new energy technology promotion, leveraging rich coal resources and the "Yangyou" brand - The company primarily engages in coal production, washing, processing, and sales; power generation and sales; heat production and sales; manufacturing of photovoltaic equipment and components, and sodium-ion batteries; and new energy technology promotion services[31](index=31&type=chunk) - The company possesses abundant coal resource reserves and has established significant competitiveness in the industry with its "Yangyou" brand[31](index=31&type=chunk) [II. Discussion and Analysis of Operating Performance](index=9&type=section&id=II.%20Discussion%20and%20Analysis%20of%20Operating%20Performance) In the first half of 2025, the company's raw coal output and commercial coal sales increased, but a significant year-on-year drop in the comprehensive coal selling price led to a substantial decline in operating revenue and net profit, while power generation decreased and heating supply increased 2025 H1 Key Operating Data | Indicator | Current Period (10,000 tons/10,000 kWh/10,000 million kilojoules) | Year-on-Year Change (%) | | :--- | :--- | :--- | | Raw Coal Output | 2,076 | 11.25 | | Purchased and Sold Coal | 184 | 14.28 | | Commercial Coal Sales | 1,928 | 12.79 | | Power Generation | 231,652.86 | -21.09 | | Heat Supply | 200.92 | 21.13 | | Comprehensive Coal Selling Price (yuan/ton) | 460.84 | -19.50 | | Operating Revenue (billion yuan) | 112.40 | -7.86 | | Total Profit (billion yuan) | 12.69 | -33.89 | | Net Profit Attributable to Parent Company Owners (billion yuan) | 7.83 | -39.75 | - The comprehensive coal selling price decreased by **19.50%** year-on-year, which was the main reason for the decline in operating revenue and total profit[32](index=32&type=chunk) [III. Analysis of Core Competitiveness during the Reporting Period](index=10&type=section&id=III.%20Analysis%20of%20Core%20Competitiveness%20during%20the%20Reporting%20Period) The company's core competitiveness stems from its vast coal reserves (**6.68 billion tons**), rare anthracite coal types and "Yangyou" brand reputation, intelligent mine construction, full coal washing strategy for quality and efficiency, consistent shareholder returns, and strategic exploration in new energy and materials like sodium-ion batteries and carbon fiber [(1) Total Resources and Resource Succession Potential](index=10&type=section&id=(1)%20Total%20Resources%20and%20Resource%20Succession%20Potential) The company's total controlled coal resources reached **6.68 billion tons** after acquiring new resources through bidding, with several mines increasing capacity or nearing production, expected to boost approved capacity to over **45 million tons per year** - In 2024, the company acquired approximately **630 million tons** of new resources in the Yujiazhuang block, Shouyang County, Shanxi Province, through bidding, bringing the company's total controlled coal resources to **6.68 billion tons**[33](index=33&type=chunk) - With the capacity increase of Yushupo and Pingshu mines, coupled with Qiyuan and Boli mines entering joint trial operation, the approved capacity is expected to increase to over **45 million tons per year** after official production[33](index=33&type=chunk) [(2) Rarity of Coal Type and Brand Reputation](index=10&type=section&id=(2)%20Rarity%20of%20Coal%20Type%20and%20Brand%20Reputation) Over **90%** of the company's coal resources are rare anthracite, known for high fixed carbon, smokelessness, low sulfur, and low ash, with its "Yangyou" brand enjoying a strong reputation for quality in the market - Over **90%** of the company's coal resources are anthracite, a rare coal type widely used in power, chemical, metallurgy, and other industries[33](index=33&type=chunk) - The company's "Yangyou" brand enjoys a strong reputation for its excellent quality in markets such as Northeast China, North China, and Shandong[33](index=33&type=chunk) [(3) Intelligent Mines and Technology Application](index=10&type=section&id=(3)%20Intelligent%20Mines%20and%20Technology%20Application) By the end of 2024, the company had built **7 intelligent mines** and **127 intelligent working faces**, becoming the first in Shanxi Province to achieve full mine intelligence, leveraging **5G, IoT, and AI** to enhance efficiency and safety - As of the end of 2024, the company had cumulatively built **7 intelligent mines**, **127 intelligent working faces**, and **1 intelligent coal washing plant**, with all production mines passing acceptance by the Shanxi Provincial Energy Bureau, becoming the first enterprise in Shanxi Province to achieve full mine intelligence[33](index=33&type=chunk) - The company widely applies advanced technologies such as **5G, IoT, and AI** to achieve remote monitoring, fault early warning, and unmanned operation of underground equipment[33](index=33&type=chunk) [(4) "Full Washing, Premium Coal" and Quality Improvement & Efficiency Enhancement](index=10&type=section&id=(4)%20%E2%80%9CFull%20Washing%2C%20Premium%20Coal%E2%80%9D%20and%20Quality%20Improvement%20%26%20Efficiency%20Enhancement) The company's coal washing plant upgrades enable full coal washing, improving commercial coal quality and calorific value, while new de-dusting processes reduce coal slime and a precise coal blending system increases clean coal yield, enhancing quality and efficiency - The company implemented coal washing plant technical upgrades to achieve full coal washing, improving the quality and calorific value of commercial coal[34](index=34&type=chunk) - Through technical upgrades, new de-dusting processes reduce coal slime, increasing economic benefits, and a precise coal blending system optimizes blending solutions, increasing clean coal yield[34](index=34&type=chunk) [(5) Shareholder Returns and Stable Dividends](index=10&type=section&id=(5)%20Shareholder%20Returns%20and%20Stable%20Dividends) The company prioritizes shareholder returns, having distributed a cumulative cash dividend of **12.931 billion yuan** since listing, with dividend payout ratios exceeding **50%** in both 2023 and 2024, demonstrating a consistent and stable cash dividend policy - The company has cumulatively distributed **12.931 billion yuan** in cash dividends since its listing[34](index=34&type=chunk) - The dividend payout ratio reached over **50%** in 2023 and 2024, reflecting the company's emphasis on shareholder returns[34](index=34&type=chunk) [(6) Transformation Exploration and New Energy & New Materials](index=10&type=section&id=(6)%20Transformation%20Exploration%20and%20New%20Energy%20%26%20New%20Materials) The company is actively transforming into new energy and materials, with sodium-ion coal mine emergency power systems moving from demonstration to commercial batch deployment, and a high-performance carbon fiber demonstration line completing equipment installation and entering joint commissioning, indicating promising prospects for new energy and materials industries - The company is advancing sodium-ion coal mine emergency power systems from individual mine demonstrations to commercial batch deployment[34](index=34&type=chunk) - The company's first phase **200 tons/year T1000-grade high-performance carbon fiber demonstration line** has completed equipment installation and entered the joint commissioning phase[34](index=34&type=chunk) [IV. Main Operating Performance during the Reporting Period](index=10&type=section&id=IV.%20Main%20Operating%20Performance%20during%20the%20Reporting%20Period) During the reporting period, the company's operating revenue and costs both decreased, but the cost reduction outpaced revenue decline, leading to an improved gross margin. Coal product sales revenue and power supply revenue decreased, while heating supply revenue increased. The asset-liability structure changed, with increases in prepayments and development expenditures, decreases in notes payable, and an increase in dividends payable. The company held a small amount of financial assets measured at fair value and analyzed its major controlled and investee companies [(1) Analysis of Main Business Operations](index=10&type=section&id=(1)%20Analysis%20of%20Main%20Business%20Operations) The company's main business revenue decreased by **1.046 billion yuan** year-on-year, primarily due to lower coal selling prices. Operating costs decreased by **9.49%** due to enhanced internal management and cost control. Selling, general and administrative, and R&D expenses all increased, while financial expenses rose due to lower deposit interest rates [1. Analysis Table of Changes in Financial Statement Items](index=10&type=section&id=1.%20Analysis%20Table%20of%20Changes%20in%20Financial%20Statement%20Items) Operating revenue decreased by **7.86%** year-on-year, mainly due to lower coal product prices. Operating costs decreased by **9.49%** due to strengthened internal management and cost control. Selling, general and administrative, R&D, and financial expenses all increased to varying degrees Financial Statement Item Changes (Jan-Jun 2025 vs. Prior Year Period) | Item | Current Period Amount (yuan) | Prior Year Period Amount (yuan) | Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 11,239,594,090.35 | 12,198,928,752.69 | -7.86 | | Operating Cost | 7,512,658,707.88 | 8,300,770,169.54 | -9.49 | | Selling Expenses | 70,345,521.32 | 56,098,858.40 | 25.40 | | Administrative Expenses | 674,104,518.83 | 628,352,055.84 | 7.28 | | Financial Expenses | 264,480,501.23 | 235,356,539.71 | 12.37 | | R&D Expenses | 304,653,472.56 | 240,839,216.26 | 26.50 | | Net Cash Flow from Operating Activities | 51,817,267.07 | 140,094,169.67 | -63.01 | | Net Cash Flow from Investing Activities | -2,589,688,987.12 | -1,945,814,432.89 | -33.09 | | Net Cash Flow from Financing Activities | 2,450,817,256.14 | 3,346,558,187.30 | -26.77 | - Operating revenue change was mainly due to a year-on-year decrease in the company's coal product prices, leading to lower commercial coal revenue[37](index=37&type=chunk) - Operating cost change was mainly due to the company strengthening internal management, promoting intelligent mine construction, and comprehensively enhancing cost control[38](index=38&type=chunk) - Selling expenses increased mainly due to a year-on-year increase in coal blending and loading/unloading fees, and an increase in bidding service fees[38](index=38&type=chunk) - Financial expenses increased mainly due to lower deposit interest rates, resulting in reduced interest income[38](index=38&type=chunk) [Revenue and Cost Analysis](index=11&type=section&id=Revenue%20and%20Cost%20Analysis) The company's main business revenue decreased by **1.046 billion yuan** year-on-year, with coal sales revenue down by **901 million yuan** due to lower selling prices. Power supply revenue decreased, while heating supply revenue increased. Gross margins for coal, power, and heating businesses all changed to varying degrees - The company's main business revenue decreased by **1.046 billion yuan** year-on-year, with coal sales revenue decreasing by **901 million yuan**, power supply decreasing by **151 million yuan**, and heating supply increasing by **6 million yuan**[39](index=39&type=chunk) - Coal sales volume increased by **2.19 million tons** year-on-year, increasing sales revenue by **1.252 billion yuan**, but the comprehensive coal selling price decreased by **111.63 yuan/ton**, reducing sales revenue by **2.153 billion yuan**[39](index=39&type=chunk) Main Business by Industry (Jan-Jun 2025) | Industry | Operating Revenue (yuan) | Operating Cost (yuan) | Gross Margin (%) | Operating Revenue Year-on-Year Change (%) | Operating Cost Year-on-Year Change (%) | Gross Margin Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Coal | 8,887,279,402.54 | 5,573,659,196.55 | 37.28 | -9.21 | -7.92 | Decreased by 0.87 percentage points | | Power Supply | 830,212,646.32 | 543,041,174.17 | 34.59 | -15.42 | -40.07 | Increased by 26.90 percentage points | | Heating Supply | 36,866,412.85 | 61,925,519.89 | -67.97 | 22.17 | 17.23 | Increased by 7.08 percentage points | | Subtotal | 9,754,358,461.71 | 6,178,625,890.61 | 36.66 | -9.68 | -11.89 | Increased by 1.59 percentage points | Main Business by Product (Jan-Jun 2025) | Product | Operating Revenue (yuan) | Operating Cost (yuan) | Gross Margin (%) | Operating Revenue Year-on-Year Change (%) | Operating Cost Year-on-Year Change (%) | Gross Margin Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Washed Lump Coal | 1,105,421,911.74 | 558,640,089.52 | 49.46 | -24.38 | -10.59 | Decreased by 7.79 percentage points | | Washed Slack Coal | 680,288,014.95 | 310,056,735.12 | 54.42 | 69.87 | 57.19 | Increased by 3.68 percentage points | | Slack Coal | 5,882,314,689.45 | 3,662,293,978.41 | 37.74 | -10.05 | -10.83 | Increased by 0.55 percentage points | | Coal Slime | 151,182,842.96 | | 100.00 | -31.99 | | Increased by 0.00 percentage points | | Purchased and Sold Coal | 1,068,071,943.44 | 1,042,668,393.50 | 2.38 | -8.28 | -7.24 | Decreased by 1.09 percentage points | [Production and Sales Volume Analysis Table](index=12&type=section&id=Production%20and%20Sales%20Volume%20Analysis%20Table) During the reporting period, coal production and sales volumes both increased year-on-year, but inventory decreased. Power generation and sales volumes decreased, while heating production and sales volumes both increased Main Product Production and Sales Volume (Jan-Jun 2025) | Main Product | Production Volume | Sales Volume | Inventory Volume | Production Volume Year-on-Year Change (%) | Sales Volume Year-on-Year Change (%) | Inventory Volume Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Coal (10,000 tons) | 2,076 | 1,928 | 44 | 11.25 | 12.79 | -11.90 | | Power Supply (10,000 kWh) | 251,260.26 | 231,652.86 | - | -21.80 | -21.09 | - | | Heating Supply (10,000 million kilojoules) | 200.92 | 200.92 | - | 21.13 | 21.13 | - | [Cost Analysis Table](index=12&type=section&id=Cost%20Analysis%20Table) During the reporting period, the company's coal sales cost and unit sales cost both decreased year-on-year, power supply costs significantly decreased, while heating supply costs increased. Coal business remains the primary component of the company's total costs Main Business by Industry Cost (Jan-Jun 2025) | Industry | Current Period Amount (yuan) | Current Period % of Total Cost | Prior Year Period Amount (yuan) | Prior Year Period % of Total Cost | Current Period Amount Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Coal | 5,573,659,196.55 | 90.21 | 6,053,378,206.96 | 86.33 | -7.92 | | Power Supply | 543,041,174.17 | 8.79 | 906,096,628.77 | 12.92 | -40.07 | | Heating Supply | 61,925,519.89 | 1.00 | 52,821,917.11 | 0.75 | 17.23 | | Subtotal | 6,178,625,890.61 | 100.00 | 7,012,296,752.84 | 100.00 | -11.89 | Main Business by Product Cost (Jan-Jun 2025) | Product | Current Period Amount (yuan) | Current Period % of Total Cost | Prior Year Period Amount (yuan) | Prior Year Period % of Total Cost | Current Period Amount Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Washed Lump Coal | 558,640,089.52 | 9.04 | 624,819,938.98 | 8.91 | -10.59 | | Washed Slack Coal | 310,056,735.12 | 5.02 | 197,250,504.36 | 2.81 | 57.19 | | Slack Coal | 3,662,293,978.41 | 59.27 | 4,107,209,246.47 | 58.58 | -10.83 | | Purchased and Sold Coal | 1,042,668,393.50 | 16.88 | 1,124,098,517.15 | 16.03 | -7.24 | - In the first half of 2025, coal sales cost was **5.574 billion yuan**, a decrease of **479 million yuan** year-on-year; unit sales cost was **289.02 yuan**, a decrease of **65.01 yuan** year-on-year[43](index=43&type=chunk) [(3) Analysis of Assets and Liabilities](index=13&type=section&id=(3)%20Analysis%20of%20Assets%20and%20Liabilities) At the end of the reporting period, the company's prepayments and development expenditures significantly increased, mainly due to higher advance payments for goods and increased investment in the high-performance carbon fiber project. Notes payable and non-current liabilities due within one year decreased, while other payables and dividends payable increased due to cash dividend recognition [1. Asset and Liability Status](index=13&type=section&id=1.%20Asset%20and%20Liability%20Status) Prepayments increased by **36.15%** due to higher advance payments for goods. Development expenditures increased by **201.98%** due to increased investment in the first phase of the thousand-ton high-performance carbon fiber project. Notes payable decreased by **57.66%**, dividends payable increased by **234.41%**, and other payables increased by **42.38%** Asset and Liability Status Changes (Period-end vs. Prior Year-end) | Item Name | Current Period-end Amount (yuan) | Current Period-end % of Total Assets | Prior Year-end Amount (yuan) | Prior Year-end % of Total Assets | Current Period-end Amount Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Prepayments | 401,261,269.75 | 0.49 | 294,730,672.83 | 0.36 | 36.15 | | Development Expenditures | 150,988,100.00 | 0.18 | 50,000,000.00 | 0.06 | 201.98 | | Notes Payable | 930,920,819.98 | 1.13 | 2,198,488,368.20 | 2.72 | -57.66 | | Other Payables | 3,051,347,848.51 | 3.71 | 2,143,110,066.79 | 2.65 | 42.38 | | Dividends Payable | 1,261,717,500.00 | 1.53 | 377,300,000.00 | 0.47 | 234.41 | | Non-current Liabilities Due Within One Year | 542,845,199.31 | 0.66 | 929,731,607.35 | 1.15 | -41.61 | - The increase in prepayments was mainly due to an increase in advance payments for goods[45](index=45&type=chunk) - The increase in development expenditures was mainly due to increased investment in the first phase of the thousand-ton high-performance carbon fiber project (200 tons/year demonstration project)[45](index=45&type=chunk) - The increase in dividends payable was mainly due to the recognition of increased cash dividends during the reporting period[45](index=45&type=chunk) [3. Major Asset Restrictions as of the End of the Reporting Period](index=13&type=section&id=3.%20Major%20Asset%20Restrictions%20as%20of%20the%20End%20of%20the%20Reporting%20Period) As of the end of the reporting period, the company's restricted monetary funds and accounts receivable totaled **2.017 billion yuan**, primarily due to litigation freezes, guarantees, and loan pledges Major Asset Restrictions (Period-end) | Item | Period-end Book Value (yuan) | Restriction Reason | | :--- | :--- | :--- | | Monetary Funds | 1,869,823,195.78 | Bank deposits frozen by litigation, special accounts for land reclamation fees and mine environmental governance and restoration funds, bank acceptance bill margins, performance bonds, credit guarantees | | Accounts Receivable | 147,652,411.59 | Loan pledge | | Total | 2,017,475,607.37 | / | [(4) Analysis of Investment Status](index=14&type=section&id=(4)%20Analysis%20of%20Investment%20Status) The company's financial assets measured at fair value primarily include stocks and private equity funds, totaling **215 million yuan** at period-end, with a slight increase in private equity funds during the current period [(3). Financial Assets Measured at Fair Value](index=14&type=section&id=(3).%20Financial%20Assets%20Measured%20at%20Fair%20Value) The company's total financial assets measured at fair value at period-end were **215 million yuan**, comprising **36 million yuan** in stocks and **179 million yuan** in private equity funds, with a small amount of private equity funds purchased during the current period Financial Assets Measured at Fair Value (Period-end) | Asset Category | Beginning Balance (yuan) | Current Period Purchase Amount (yuan) | Period-end Balance (yuan) | | :--- | :--- | :--- | :--- | | Stocks | 36,000,000.00 | | 36,000,000.00 | | Private Equity Funds | 179,202,992.90 | 174,300.00 | 179,377,292.90 | | Total | 215,202,992.90 | 174,300.00 | 215,377,292.90 | [(6) Analysis of Major Controlled and Investee Companies](index=14&type=section&id=(6)%20Analysis%20of%20Major%20Controlled%20and%20Investee%20Companies) The company disclosed financial information for its major controlled subsidiaries and investee companies with a net profit impact exceeding **10%**, covering coal mining, sales, power, heating, and new energy sectors, with some subsidiaries reporting losses during the period - The company's main subsidiaries include Kaiyuan Company, Xinjing Company, Yushupo Company, Qiyuan Company, Boli Company, etc., with businesses covering coal mining, sales, power, heating, and new energy[52](index=52&type=chunk) - Some subsidiaries, such as Jingfu Company, Pingshu Company, and Xinyang Energy Company, reported negative net profits during the reporting period[52](index=52&type=chunk) - Investee company Financial Company achieved a net profit of **111.8325 million yuan** during the reporting period[52](index=52&type=chunk) [V. Other Disclosure Matters](index=16&type=section&id=V.%20Other%20Disclosure%20Matters) The company identified cyclical risks in the coal industry and technological iteration risks in new energy and materials, developing corresponding strategies, and actively implemented its "Quality Improvement, Efficiency Enhancement, and Return" action plan, making progress in safety management, coal main business, new energy and materials development, information disclosure, investor relations, shareholder returns, and corporate governance [(1) Potential Risks](index=16&type=section&id=(1)%20Potential%20Risks) The company faces cyclical risks in the coal industry (supply-demand fluctuations, price drops) and technological iteration risks in new energy and materials (uncertainty of investment recovery), and has developed strategies including stable operations, dynamic production, cost reduction, stable revenue, full industry chain synergy, scenario-based application breakthroughs, and technological innovation cooperation - Coal industry cyclical risk: Demand fluctuations due to macroeconomic conditions, policy adjustments, and energy structure transformation may lead to price drops and overcapacity[53](index=53&type=chunk) - Response strategies include: enhancing coal quality through "full coal washing," comprehensive budget management for cost control, relying on "eight special teams" to strengthen production efficiency; flexibly adjusting output and product structure based on market changes; strictly executing expense budgets and continuously implementing cost reduction initiatives; adopting a "railway-first, long-term contract-first" sales strategy to stabilize revenue[53](index=53&type=chunk) - New energy and new materials industry technological iteration risk: Rapid technological updates in sodium-ion batteries, carbon fiber, etc., pose risks of uncertain investment recovery[53](index=53&type=chunk) - Response strategies include: leveraging anthracite resource advantages to build a full industry chain; focusing on niche markets like coal mine emergency power and low-speed electric vehicles to promote batch delivery; deeply binding with Zhongke Hainan and strengthening cooperation with research institutes and universities to drive technological innovation and achievement transformation[54](index=54&type=chunk) [(2) Other Disclosure Matters](index=16&type=section&id=(2)%20Other%20Disclosure%20Matters) In the first half of 2025, the company actively implemented its "Quality Improvement, Efficiency Enhancement, and Return" action plan, achieving significant progress in safety management, optimizing coal main business, innovating new energy and materials technologies, enhancing information disclosure and investor relations, ensuring shareholder returns, and standardizing corporate governance - Strengthened safety management, with Yushupo successfully passing the national first-level standardization mine re-inspection; the company allocated **614.84 million yuan** for safety expenses this year, using **373.01 million yuan** in the first half[55](index=55&type=chunk) - Focused on the coal main business, promoting high-yield and high-efficiency operations, strengthening process control in coal washing and processing, and Yujiazhuang obtained a mineral resource exploration permit[56](index=56&type=chunk) - Significant technological achievements in new energy and new materials development, such as the "High-Power Sodium-Ion Battery Coal Mine Emergency Power System" reaching international leading levels, and Huana Xinneng being listed among the 2025 Top 10 Innovative Energy Storage Applications[57](index=57&type=chunk) - Continuously optimized information disclosure and investor relations management, publishing **46 announcements** in the first half with "zero errors," actively interacting with investors through online and offline platforms, receiving **297 investor visits**, and answering **421 phone calls**[58](index=58&type=chunk) - Firmly committed to shareholder return policy, distributing a cash dividend of **3.09 yuan per 10 shares** (including tax) to all shareholders in 2025, with a dividend payout ratio of **50.11%**, and cumulative dividends totaling **12.931 billion yuan**[60](index=60&type=chunk) - Strengthened corporate governance structure, holding **4 board meetings, 1 supervisory board meeting, and 2 general meetings of shareholders** in the first half, and enhancing the responsibility and performance capabilities of "key minorities"[61](index=61&type=chunk)[63](index=63&type=chunk) [Section IV Corporate Governance, Environment, and Society](index=19&type=section&id=Section%20IV%20Corporate%20Governance%2C%20Environment%2C%20and%20Society) This section covers the company's corporate governance, including profit distribution plans, environmental information disclosure for its subsidiaries, and specific efforts in consolidating poverty alleviation achievements and rural revitalization [II. Profit Distribution or Capital Reserve Conversion Plan](index=19&type=section&id=II.%20Profit%20Distribution%20or%20Capital%20Reserve%20Conversion%20Plan) The company did not distribute profits or convert capital reserves into share capital during the reporting period - During the reporting period, the company did not distribute profits or convert capital reserves into share capital[65](index=65&type=chunk) [IV. Environmental Information of Listed Companies and Their Major Subsidiaries Included in the List of Enterprises Required to Disclose Environmental Information by Law](index=19&type=section&id=IV.%20Environmental%20Information%20of%20Listed%20Companies%20and%20Their%20Major%20Subsidiaries%20Included%20in%20the%20List%20of%20Enterprises%20Required%20to%20Disclose%20Environmental%20Information%20by%20Law) **Nine** of the company's subsidiaries are on the list of enterprises required to disclose environmental information by law, with query indexes provided for their respective environmental information disclosure reports - **Nine** of the company's subsidiaries are included in the list of enterprises required to disclose environmental information by law[66](index=66&type=chunk) - Environmental information disclosure reports for each enterprise can be queried through the Enterprise Environmental Information Disclosure System (Shanxi)[66](index=66&type=chunk)[67](index=67&type=chunk) [V. Specific Progress in Consolidating Poverty Alleviation Achievements and Rural Revitalization](index=20&type=section&id=V.%20Specific%20Progress%20in%20Consolidating%20Poverty%20Alleviation%20Achievements%20and%20Rural%20Revitalization) In the first half of 2025, Huayang Shares systematically advanced poverty alleviation consolidation and rural revitalization through a "resident assistance + industrial assistance + consumption assistance" model, including dynamic monitoring to prevent relapse into poverty,慰问 activities, assistance project construction, increased industrial support, expanded employment channels, and enhanced effectiveness of consumption assistance - In terms of resident assistance, **1,000 person-times** were surveyed for dynamic monitoring to prevent relapse into poverty, identifying **50 "three-category households"** with no large-scale relapse; **406,300 yuan** in relief supplies were distributed to **2,158 households**; **8 assistance projects** were completed[68](index=68&type=chunk)[69](index=69&type=chunk) - In terms of industrial assistance, approximately **1.5 million catties** of local and surrounding agricultural products were purchased, cold storage services were provided for approximately **4.3 million catties**, and information-assisted sales of approximately **680,000 catties** of fruit were facilitated; **9 employment positions** were provided, absorbing **289 temporary workers**, generating approximately **480,000 yuan** in income[69](index=69&type=chunk) - In terms of consumption assistance, over **60 types** of agricultural products, totaling **5.5858 million catties**, were purchased; **5.6674 million catties** of various assisted agricultural products were sold, with a consumption amount of **52.4305 million yuan**[69](index=69&type=chunk) [Section V Important Matters](index=22&type=section&id=Section%20V%20Important%20Matters) This section details the fulfillment of commitments, particularly regarding related party transactions and guarantees, addresses the impact of regulatory penalties on the controlling shareholder, and outlines the progress of major construction and new energy projects [I. Fulfillment of Commitments](index=22&type=section&id=I.%20Fulfillment%20of%20Commitments) Since 2000, the company's controlling shareholder, Huayang Group, has committed to avoiding horizontal competition and ensuring the listed company's priority rights to acquire assets, businesses, or interests. Huayang Group strictly fulfilled these commitments during the reporting period - Huayang Group committed to avoiding competition with the listed company's products or businesses and granting the listed company priority rights to produce or acquire new products or technologies, and to purchase assets, businesses, or interests[71](index=71&type=chunk) - During the reporting period, Huayang Group strictly fulfilled its commitment to avoid horizontal competition[71](index=71&type=chunk) [VIII. Alleged Violations, Penalties, and Rectification of Listed Company, Its Directors, Supervisors, Senior Management, Controlling Shareholder, and Actual Controller](index=23&type=section&id=VIII.%20Alleged%20Violations%2C%20Penalties%2C%20and%20Rectification%20of%20Listed%20Company%2C%20Its%20Directors%2C%20Supervisors%2C%20Senior%20Management%2C%20Controlling%20Shareholder%2C%20and%20Actual%20Controller) The company's controlling shareholder received an investigation notice and a pre-penalty notice from the CSRC, but this penalty does not involve Huayang Shares and will not affect the company's daily operations. The company will maintain market trust and shareholder rights through improved governance, strengthened internal controls, timely information disclosure, and active investor communication - The company's controlling shareholder received an investigation notice and a pre-penalty notice from the China Securities Regulatory Commission on June 25 and July 2, 2025, respectively[72](index=72&type=chunk) - The aforementioned administrative penalty does not involve Huayang Shares and will not affect the company's daily production and business activities[72](index=72&type=chunk) - The company will maintain market trust and shareholder rights by improving governance, strengthening internal controls, timely information disclosure, and actively communicating with investors[72](index=72&type=chunk) [X. Significant Related Party Transactions](index=23&type=section&id=X.%20Significant%20Related%20Party%20Transactions) The company engaged in related party transactions related to daily operations and conducted financial business, including deposits, loans, and credit facilities, with an affiliated financial company. At period-end, deposits with the affiliated financial company totaled **5.205 billion yuan**, and loans totaled **150 million yuan** [(1) Related Party Transactions Related to Daily Operations](index=23&type=section&id=(1)%20Related%20Party%20Transactions%20Related%20to%20Daily%20Operations) The company has disclosed resolutions regarding the execution of daily related party transactions for 2024 and the estimated daily related party transactions for 2025 in its interim announcements - The company disclosed the "Announcement on the Execution of Daily Related Party Transactions in 2024 and the Estimated Daily Related Party Transactions in 2025 of Shanxi Huayang Group Xinneng Co., Ltd." on April 26, 2025[73](index=73&type=chunk) [(5) Financial Business Between the Company and Affiliated Financial Companies, and Between the Company's Controlled Financial Company and Related Parties](index=24&type=section&id=(5)%20Financial%20Business%20Between%20the%20Company%20and%20Affiliated%20Financial%20Companies%2C%20and%20Between%20the%20Company's%20Controlled%20Financial%20Company%20and%20Related%20Parties) The company conducted deposit, loan, and credit facility businesses with an affiliated financial company. At period-end, deposits with the financial company totaled **5.205 billion yuan**, loans totaled **150 million yuan**, actual credit facility usage was **150 million yuan**, and entrusted loans were **3.369 billion yuan** Deposit Business with Financial Company (Unit: 10,000 yuan) | Related Party | Related Relationship | Maximum Daily Deposit Limit | Deposit Interest Rate Range | Beginning Balance | Total Deposits This Period | Total Withdrawals This Period | Period-end Balance | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Financial Company | Holding subsidiary of parent company | 1,700,000.00 | 0.2%-1.9% | 572,599.94 | 4,448,400.42 | 4,500,481.91 | 520,518.44 | Loan Business with Financial Company (Unit: 10,000 yuan) | Related Party | Related Relationship | Loan Limit | Loan Interest Rate Range | Beginning Balance | Total Loans This Period | Total Repayments This Period | Period-end Balance | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Financial Company | Holding subsidiary of parent company | 400,000.00 | 2.19%-3.45% | 4,000.00 | 15,000.00 | 4,000.00 | 15,000.00 | Credit Facility and Other Financial Business with Financial Company (Unit: 10,000 yuan) | Related Party | Related Relationship | Business Type | Total Amount | Actual Amount | | :--- | :--- | :--- | :--- | :--- | | Financial Company | Holding subsidiary of parent company | Credit Facility | 400,000.00 | 15,000.00 | | Financial Company | Holding subsidiary of parent company | Entrusted Loans | 336,926.00 | 336,926.00 | | Financial Company | Holding subsidiary of parent company | Issuance of Performance Guarantees | 200.00 | 200.00 | [XI. Significant Contracts and Their Fulfillment](index=26&type=section&id=XI.%20Significant%20Contracts%20and%20Their%20Fulfillment) The company had multiple significant guarantees during the reporting period, primarily providing joint liability guarantees for subsidiaries' bank loans, totaling **7.733 billion yuan**, representing **23.26%** of the company's net assets, with **6.905 billion yuan** for guaranteed entities with a debt-to-asset ratio exceeding **70%** [(2) Significant Guarantees Performed and Not Yet Performed During the Reporting Period](index=26&type=section&id=(2)%20Significant%20Guarantees%20Performed%20and%20Not%20Yet%20Performed%20During%20the%20Reporting%20Period) At the end of the reporting period, the company's total guarantee balance for subsidiaries was **7.733 billion yuan**, accounting for **23.26%** of its net assets. Of this, **6.905 billion yuan** was for guaranteed entities with a debt-to-asset ratio exceeding **70%**. Major guaranteed entities include Boli Company, Qiyuan Company, Yangquan Thermal Power Company, Pingshu Railway Company, and Huana Xinneng Company Company's Total Guarantee Amount (Including Guarantees for Subsidiaries) | Indicator | Amount (10,000 yuan) | | :--- | :--- | | Total Guarantee Amount for Subsidiaries During Reporting Period | 192,131.28 | | Total Guarantee Balance for Subsidiaries at Period-end (B) | 773,276.60 | | Total Guarantee Amount (A+B) | 773,276.60 | | Percentage of Net Assets (%) | 23.26 | | Of which: Guarantees for Shareholders, Actual Controllers, and Their Related Parties (C) | | | Debt Guarantees for Entities with Debt-to-Asset Ratio Exceeding 70% (D) | 690,460.18 | | Total of the Above Three Guarantee Amounts (C+D+E) | 690,460.18 | - The company provided multiple joint liability guarantees for bank loans of subsidiaries such as Boli Company, Qiyuan Company, Yangquan Thermal Power Company, Pingshu Railway Company, Huachuang Optoelectronics Company, New Energy Sales Company, Huana Xinneng Company, and Huana Technology Management Company[84](index=84&type=chunk)[85](index=85&type=chunk)[87](index=87&type=chunk)[88](index=88&type=chunk)[89](index=89&type=chunk) - Some guarantees were counter-guaranteed by the controlling shareholder Huayang Group with mining rights, or by subsidiaries with power tariff collection rights, land, plant, and equipment as pledges/mortgages[84](index=84&type=chunk)[85](index=85&type=chunk)[87](index=87&type=chunk)[89](index=89&type=chunk) [XIII. Explanation of Other Significant Matters](index=31&type=section&id=XIII.%20Explanation%20of%20Other%20Significant%20Matters) The company's ongoing coal mine construction projects (Qiyuan Company, Boli Company) are progressing smoothly with substantial cumulative investments. Sodium-ion battery cathode and anode material projects, cell and Pack battery projects, Yujiazhuang coal mine project, and high-performance carbon fiber project are all advancing as planned, with some having completed plant construction or entered commissioning, demonstrating the company's active strategic layout in new energy and new materials [1. Progress of Coal Mine Construction Projects Under Construction](index=31&type=section&id=1.%20Progress%20of%20Coal%20Mine%20Construction%20Projects%20Under%20Construction) The Qiyuan Company coal mine construction project achieved joint trial operation on December 15, 2024, with a cumulative investment of **5.637 billion yuan**. The Boli Company coal mine construction project had a cumulative investment of **4.55 billion yuan**, completing **6,334 meters** of tunneling in the first half of 2025 - Qiyuan Company coal mine construction project, with an approved production capacity of **5 million tons/year**, achieved joint trial operation on December 15, 2024, with a cumulative investment of **5.637 billion yuan**[90](index=90&type=chunk) - Boli Company coal mine construction project, with an approved production capacity of **5 million tons/year**, had a cumulative investment of **4.55 billion yuan**, completing **6,334 meters** of tunneling in the first half of 2025[90](index=90&type=chunk) [2. Sodium-Ion Battery Cathode and Anode Material Projects](index=31&type=section&id=2.%20Sodium-Ion%20Battery%20Cathode%20and%20Anode%20Material%20Projects) The thousand-ton sodium-ion battery cathode and anode material project is completed, and the plant construction for the ten-thousand-ton project is finished, with basement wall masonry, foundation pit backfilling, exterior wall waterproofing, protective layer completed, and dormitory building main structure finished - The thousand-ton sodium-ion battery cathode and anode material project, with a total investment of approximately **130 million yuan**, has been completed[91](index=91&type=chunk) - The ten-thousand-ton sodium-ion battery cathode and anode material project, with a total investment of approximately **1.14 billion yuan**, as of the first half of 2025, has completed all plant construction, basement wall masonry, foundation pit backfilling, exterior wall waterproofing, protective layer, and the main structure of the dormitory building[91](index=91&type=chunk) [3. Sodium-Ion Battery Cell Project and Pack Battery Project](index=31&type=section&id=3.%20Sodium-Ion%20Battery%20Cell%20Project%20and%20Pack%20Battery%20Project) The sodium-ion battery cell and Pack battery projects are implemented by Shanxi Huana Xinneng Technology Co., Ltd., which operates the world's first production line for sodium-ion cells, Pack batteries, and energy storage integration, and its independently developed sodium-ion coal mine emergency power system has successfully operated and reached international leading levels - The sodium-ion battery cell project has a total investment of approximately **316 million yuan**, and the Pack battery project has a total investment of approximately **73 million yuan**, both implemented by Shanxi Huana Xinneng Technology Co., Ltd[92](index=92&type=chunk) - Huana Xinneng Company owns the world's first production lines for sodium-ion cells (**1GWh**), sodium-ion Pack batteries (**1GWh**), and energy storage integration (**1GWh**)[92](index=92&type=chunk) - The independently developed sodium-ion coal mine emergency power system has successfully operated in Jingfu Mine and Kaiyuan Mine, was selected as one of the "Top 10 Innovative Energy Storage Applications" in the International Energy Storage Innovation Competition, and has reached an overall international leading level[92](index=92&type=chunk) [4. Yujiazhuang Coal Mine Project](index=31&type=section&id=4.%20Yujiazhuang%20Coal%20Mine%20Project) In August 2024, the company successfully bid for the coal exploration right of the Yujiazhuang block in Shouyang County, Shanxi Province, with geological reserves of approximately **630 million tons**. As of June 30, 2025, the company has obtained the exploration permit for Yujiazhuang, and exploration engineering and feasibility study report preparation are progressing orderly - On August 22, 2024, the company successfully bid for the coal exploration right of the Yujiazhuang block in Shouyang County, Shanxi Province, for **6.8 billion yuan**, with geological reserves of approximately **630 million tons**[93](index=93&type=chunk) - As of June 30, 2025, the company has obtained the Yujiazhuang mineral resource exploration permit, and exploration engineering is being organized and implemented as planned, with the project feasibility study report also being prepared concurrently[94](index=94&type=chunk) [5. High-Performance Carbon Fiber Project](index=32&type=section&id=5.%20High-Performance%20Carbon%20Fiber%20Project) The high-performance carbon fiber project, with a total investment of approximately **608 million yuan**, is implemented by Shanxi Huayang Carbon Material Technology Co., Ltd. The project commenced full construction on June 15, 2024, and as of the first half of 2025, the public auxiliary workshop completed unit joint debugging, the polymerization workshop completed hot commissioning, the spinning workshop initiated wire drawing joint debugging, and the carbonization workshop continued full-line trial operation - The high-performance carbon fiber project has a total investment of approximately **608 million yuan**, implemented by the company's controlled subsidiary Shanxi Huayang Carbon Material Technology Co., Ltd[95](index=95&type=chunk) - The project commenced full construction on June 15, 2024; as of the first half of 2025, the public auxiliary workshop completed unit joint debugging, the polymerization workshop completed hot commissioning, the spinning workshop initiated wire drawing joint debugging, and the carbonization workshop continued full-line trial operation[95](index=95&type=chunk) [Section VI Share Changes and Shareholder Information](index=33&type=section&id=Section%20VI%20Share%20Changes%20and%20Shareholder%20Information) This section details the company's share capital structure, which remained unchanged during the reporting period, and provides an overview of its shareholders, including the controlling shareholder and top ten shareholders [I. Share Capital Changes](index=33&type=section&id=I.%20Share%20Capital%20Changes) The company's total share capital and share structure remained unchanged during the reporting period [1. Table of Share Capital Changes](index=33&type=section&id=1.%20Table%20of%20Share%20Capital%20Changes) The company's total share capital and share structure remained unchanged during the reporting period - During the reporting period, the company's total share capital and share structure remained unchanged[97](index=97&type=chunk) [II. Shareholder Information](index=33&type=section&id=II.%20Shareholder%20Information) As of the end of the reporting period, the company had **104,228** common shareholders. The controlling shareholder, Huayang New Materials Technology Group Co., Ltd., held **55.52%** of shares and pledged a portion of its holdings. The top ten shareholders included several institutional investors [(1) Total Number of Shareholders:](index=33&type=section&id=(1)%20Total%20Number%20of%20Shareholders%3A) As of the end of the reporting period, the total number of common shareholders was **104,228** - As of the end of the reporting period, the total number of common shareholders was **104,228**[98](index=98&type=chunk) [(2) Table of Top Ten Shareholders and Top Ten Circulating Shareholders (or Shareholders with No Restricted Shares) as of the End of the Reporting Period](index=33&type=section&id=(2)%20Table%20of%20Top%20Ten%20Shareholders%20and%20Top%20Ten%20Circulating%20Shareholders%20(or%20Shareholders%20with%20No%20Restricted%20Shares)%20as%20of%20the%20End%20of%20the%20Reporting%20Period) As of the end of the reporting period, Huayang New Materials Technology Group Co., Ltd. was the controlling shareholder, holding **55.52%** of the company's shares and pledging **13.76%** of its holdings. The top ten shareholders also included institutional investors such as Hong Kong Securities Clearing Company Limited and ICBC – Guotai CSI Coal ETF Top Ten Shareholders' Holdings (As of Period-end) | Shareholder Name | Period-end Holding Quantity (shares) | Percentage (%) | Share Status | Quantity (shares) | | :--- | :--- | :--- | :--- | :--- | | Huayang New Materials Technology Group Co., Ltd. | 2,003,021,367 | 55.52 | Pledged | 275,559,560 | | Hong Kong Securities Clearing Company Limited | 29,676,217 | 0.82 | Unrestricted | 0 | | Industrial and Commercial Bank of China Co., Ltd. – Guotai CSI Coal Exchange Traded Open-ended Index Securities Investment Fund | 28,016,267 | 0.78 | Unrestricted | 0 | | Agricultural Bank of China Co., Ltd. – CSI 500 Exchange Traded Open-ended Index Securities Investment Fund | 26,754,512 | 0.74 | Unrestricted | 0 | | Guoxin Securities Co., Ltd. | 22,668,911 | 0.63 | Unrestricted | 0 | - Huayang New Materials Technology Group Co., Ltd. pledged **275,559,560 shares**, accounting for **13.76%** of its total holdings in the company and **7.64%** of the company's total share capital[101](index=101&type=chunk) [Section VII Bond-Related Information](index=36&type=section&id=Section%20VII%20Bond-Related%20Information) This section details the company's issuance of multiple tranches of technology innovation perpetual corporate bonds to professional investors, totaling **6 billion yuan**, with interest rates ranging from **2.51% to 2.95%**, none of which had their options exercised. It also covers the company's debt structure and key financial indicators related to debt [I. Corporate Bonds (Including Enterprise Bonds) and Non-Financial Enterprise Debt Financing Instruments](index=36&type=section&id=I.%20Corporate%20Bonds%20(Including%20Enterprise%20Bonds)%20and%20Non-Financial%20Enterprise%20Debt%20Financing%20Instruments) The company issued multiple tranches of technology innovation perpetual corporate bonds to professional investors, totaling **6 billion yuan**, with interest rates between **2.51% and 2.95%**, none of which had their options exercised. These bonds were classified as innovation-driven enterprise issuers. At period-end, the company's consolidated interest-bearing debt balance was **25.993 billion yuan**, a year-on-year change of **17.26%** [(1) Corporate Bonds (Including Enterprise Bonds)](index=36&type=section&id=(1)%20Corporate%20Bonds%20(Including%20Enterprise%20Bonds)) The company issued multiple tranches of technology innovation perpetual corporate bonds to professional investors, totaling **6 billion yuan**, with interest rates between **2.51% and 2.95%**, none of which had their renewal, deferred interest payment, or redemption options exercised [1. Basic Information of Corporate Bonds](index=36&type=section&id=1.%20Basic%20Information%20of%20Corporate%20Bonds) The company issued five tranches of perpetual corporate bonds to professional investors, totaling **6 billion yuan**, with interest rates ranging from **2.51% to 2.95%**, all listed and traded on the Shanghai Stock Exchange Basic Information of Corporate Bonds (As of Period-end) | Bond Name | Abbreviation | Code | Issue Date | Interest Commencement Date | Maturity Date | Bond Balance (billion yuan) | Interest Rate (%) | Trading Venue | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | 2024 Publicly Issued Technology Innovation Perpetual Corporate Bonds (Tranche 1) to Professional Investors | Huayang YK01 | 240807.SH | 2024-3-25 | 2024-3-27 | 2026-3-27 | 20.00 | 2.88 | Shanghai Stock Exchange | | 2024 Publicly Issued Technology Innovation Perpetual Corporate Bonds (Tranche 2) to Professional Investors | Huayang YK02 | 240929.SH | 2024-4-18 | 2024-4-22 | 2026-4-22 | 10.00 | 2.57 | Shanghai Stock Exchange | | 2024 Publicly Issued Perpetual Corporate Bonds (Tranche 1) (Type 1) to Professional Investors | 24 Huayang Y1 | 241770.SH | 2024-10-22 | 2024-10-24 | 2026-10-24 | 5.00 | 2.51 | Shanghai Stock Exchange | | 2024 Publicly Issued Perpetual Corporate Bonds (Tranche 1) (Type 2) to Professional Investors | 24 Huayang Y2 | 241771.SH | 2024-10-22 | 2024-10-24 | 2027-10-24 | 10.00 | 2.95 | Shanghai Stock Exchange | | 2024 Publicly Issued Perpetual Corporate Bonds (Tranche 2) (Type 2) to Professional Investors | 24 Huayang Y4 | 241972.SH | 2024-11-21 | 2024-11-25 | 2027-11-25 | 15.00 | 2.71 | Shanghai Stock Exchange | [2. Triggering and Execution of Company or Investor Option Clauses and Investor Protection Clauses](index=37&type=section&id=2.%20Triggering%20and%20Execution%20of%20Company%20or%20Investor%20Option%20Clauses%20and%20Investor%20Protection%20Clauses) During the reporting period, none of the company's perpetual corporate bonds had their renewal, deferred interest payment, or redemption options exercised, nor were any investor protection clauses triggered - Bonds such as Huayang YK01, Huayang YK02, 24 Huayang Y1, 24 Huayang Y2, and 24 Huayang Y4 all include issuer renewal options, deferred interest payment options, issuer redemption options, as well as issuer credit maintenance commitments and remedy clauses[106](index=106&type=chunk) - During the reporting period, none of the aforementioned bonds had any options exercised[106](index=106&type=chunk) [(3) Other Matters to be Disclosed for Special Category Bonds](index=37&type=section&id=(3)%20Other%20Matters%20to%20be%20Disclosed%20for%20Special%20Category%20Bonds) The company's multiple tranches of perpetual corporate bonds were classified as innovation-driven enterprise issuers, all in their first cycle during the reporting period, with no interest rate step-ups or deferred interest, and were accounted for as equity instruments [3. The Company as an Issuer of Perpetual Corporate Bonds](index=37&type=section&id=3.%20The%20Company%20as%20an%20Issuer%20of%20Perpetual%20Corporate%20Bonds) Huayang YK01, Huayang YK02, 24 Huayang Y1, 24 Huayang Y2, and 24 Huayang Y4 are all perpetual corporate bonds issued by the company, all in their first cycle during the reporting period, with fixed interest rates, no deferred interest or mandatory interest payments, and are accounted for as other equity instruments - Huayang YK01, Huayang YK02, 24 Huayang Y1, 24 Huayang Y2, and 24 Huayang Y4 are all perpetual corporate bonds, all in their first cycle during the reporting period, with fixed interest rates[108](index=108&type=chunk)[109](index=109&type=chunk) - All perpetual bonds did not involve deferred interest or mandatory interest payments during the reporting period and were accounted for as other equity instruments[108](index=108&type=chunk)[109](index=109&type=chunk) [7. The Company as an Issuer of Technology Innovation Corporate Bonds or Innovation and Entrepreneurship Corporate Bonds](index=39&type=section&id=7.%20The%20Company%20as%20an%20Issuer%20of%20Technology%20Innovation%20Corporate%20Bonds%20or%20Innovation%20and%20Entrepreneurship%20Corporate%20Bonds) The company's Huayang YK01 and Huayang YK02 bonds were classified as innovation-driven enterprise issuers, but the use of proceeds does not involve disclosure of progress in innovation projects or the effect of promoting technological innovation - The issuer category for Huayang YK01 and Huayang YK02 bonds is "innovation-driven enterprise"[111](index=111&type=chunk) - These bonds do not involve the progress of innovation projects, and the use of proceeds does not involve the effect of promoting technological innovation[111](index=111&type=chunk) [(4) Important Matters Related to Corporate Bonds During the Reporting Period](index=39&type=section&id=(4)%20Important%20Matters%20Related%20to%20Corporate%20Bonds%20During%20the%20Reporting%20Period) At the end of the reporting period, the company's consolidated non-operating receivables and intercompany borrowings totaled **569 million yuan**, not exceeding **10%** of consolidated net assets. Consolidated interest-bearing debt was **25.993 billion yuan**, a year-on-year change of **17.26%**, with bank loans accounting for **99%** [1. Non-Operating Receivables and Intercompany Borrowings](index=40&type=section&id=1.%20Non-Operating%20Receivables%20and%20Intercompany%20Borrowings) At the end of the reporting period, the company's consolidated non-operating receivables and intercompany borrowings totaled **569 million yuan**, accounting for **1.50%** of consolidated net assets, not exceeding **10%** Non-Operating Receivables and Intercompany Borrowings Balance (Period-end) | Unit Name | Period-end Balance (yuan) | Nature of Payment | Age | Impairment Provision Period-end Balance (yuan) | | :--- | :--- | :--- | :--- | :--- | | Yangquan Coal Industry (Group) Pingding Taichang Coal Industry Co., Ltd. | 547,055,470.20 | Borrowing from former controlled subsidiary | Over 5 years | 547,055,470.20 | | China Railway Taiyuan Bureau Group Co., Ltd. - Shanxi Joint Venture Railway Transportation Dispatching Coordination Center Project Management Department | 22,000,000.00 | Dispatching Coordination Center Project Funds | Over 5 years | 22,000,000.00 | | Total | 569,055,470.20 | | | 569,055,470.20 | - At the end of the reporting period, the proportion of unrecovered consolidated non-operating receivables and intercompany borrowings to consolidated net assets was **1.50%**, not exceeding **10%**[114](index=114&type=chunk) [2. Liability Status](index=40&type=section&id=2.%20Liability%20Status) At the end of the reporting period,

[Important Notice](index=2&type=section&id=Important%20Notice) The board, supervisory board, and senior management guarantee report truthfulness; report is unaudited, no profit distribution, and no related party fund occupation or illegal guarantees - The company's board of directors, supervisory board, and senior management guarantee the truthfulness, accuracy, and completeness of the report and assume legal responsibility[3](index=3&type=chunk) - This semi-annual report is unaudited[5](index=5&type=chunk) - No profit distribution or capital reserve conversion to share capital will be made in this reporting period[6](index=6&type=chunk) - The company has no non-operating occupation of funds by controlling shareholders and other related parties, nor external guarantees provided in violation of decision-making procedures[8](index=8&type=chunk) [Section I Definitions](index=4&type=section&id=Section%20I%20Definitions) This section defines key terms, reporting period, financial indicators, product terms, exchanges, and currency units for consistent understanding - The reporting period refers to **January 1, 2025, to June 30, 2025**[13](index=13&type=chunk) - **EBITDA** refers to Earnings Before Interest, Taxes, Depreciation, and Amortization[13](index=13&type=chunk) - A-shares refer to ordinary shares of the company with a par value of **RMB 1** per share listed on the Shanghai Stock Exchange, and H-shares refer to foreign shares listed on the Hong Kong Stock Exchange[13](index=13&type=chunk) [Section II Company Profile and Key Financial Indicators](index=5&type=section&id=Section%20II%20Company%20Profile%20and%20Key%20Financial%20Indicators) This section provides company basic information, contact details, stock overview, and key financial data including revenue, profit, EPS, and non-recurring items [I. Company Information](index=5&type=section&id=I.%20Company%20Information) The company's Chinese name is Huaxin Cement Co., Ltd., abbreviated as Huaxin Cement, with Li Yeqing as legal representative - Company Chinese Name: **Huaxin Cement Co., Ltd.**, Chinese Abbreviation: **Huaxin Cement**[15](index=15&type=chunk) - Company Legal Representative: **Li Yeqing**[15](index=15&type=chunk) [II. Contact Person and Contact Information](index=5&type=section&id=II.%20Contact%20Person%20and%20Contact%20Information) Board Secretary Ye Jiaxing and Securities Representative Wang Xiaoqiong share contact details and email investor@huaxincem.com - Board Secretary: **Ye Jiaxing**; Securities Affairs Representative: **Wang Xiaoqiong**[16](index=16&type=chunk) - Contact Address: **Building B, Huaxin Building, No. 426 Gaoxin Avenue, East Lake New Technology Development Zone, Wuhan, Hubei Province**[16](index=16&type=chunk) - Email: **investor@huaxincem.com**[16](index=16&type=chunk) [III. Brief Introduction to Changes in Basic Information](index=5&type=section&id=III.%20Brief%20Introduction%20to%20Changes%20in%20Basic%20Information) Company's registered address is Huangshi, office in Wuhan, and website is www.huaxincem.com - Company Registered Address: **No. 600 Daqi Avenue East, Huangshi City, Hubei Province**[17](index=17&type=chunk) - Company Office Address: **Building B, Huaxin Building, No. 426 Gaoxin Avenue, East Lake New Technology Development Zone, Wuhan, Hubei Province**[17](index=17&type=chunk) - Company Website: **www.huaxincem.com**[17](index=17&type=chunk) [IV. Brief Introduction to Changes in Information Disclosure and Document Storage Locations](index=5&type=section&id=IV.%20Brief%20Introduction%20to%20Changes%20in%20Information%20Disclosure%20and%20Document%20Storage%20Locations) Information is disclosed in China Securities Journal and www.sse.com.cn, with reports stored at the Board Secretary's Office - Information Disclosure Newspaper: **China Securities Journal**; Website Address: **www.sse.com.cn**[18](index=18&type=chunk) - Semi-annual Report Storage Locations: **Board Secretary's Office and Securities Department**[18](index=18&type=chunk) [V. Company Stock Overview](index=5&type=section&id=V.%20Company%20Stock%20Overview) Company's A-shares are listed on SSE (600801) and H-shares on HKEX (06655) Company Stock Overview | Stock Type | Listing Exchange | Stock Abbreviation | Stock Code | | :--- | :--- | :--- | :--- | | A-shares | SSE | Huaxin Cement | 600801 | | H-shares | HKEX | Huaxin Cement | 06655 | [VII. Company's Main Accounting Data and Financial Indicators](index=6&type=section&id=VII.%20Company%27s%20Main%20Accounting%20Data%20and%20Financial%20Indicators) Operating revenue slightly decreased, but total profit and net profit significantly grew, with improved EPS and ROE, partly due to non-recurring gains [(I) Main Accounting Data](index=6&type=section&id=%28I%29%20Main%20Accounting%20Data) Operating revenue decreased by 1.17%, while total profit and net profit attributable to shareholders increased by over 50% Main Accounting Data | Main Accounting Data | Current Reporting Period (Jan-Jun) (RMB) | Prior Year Period (RMB) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 16,046,640,187 | 16,237,373,654 | -1.17 | | Total Profit | 2,024,928,214 | 1,343,287,311 | 50.74 | | Net Profit Attributable to Shareholders of Listed Company | 1,103,484,806 | 730,553,374 | 51.05 | | Net Profit Attributable to Shareholders of Listed Company (Excluding Non-Recurring Gains/Losses) | 1,070,009,720 | 680,295,259 | 57.29 | | Net Cash Flow from Operating Activities | 1,623,794,304 | 1,730,584,063 | -6.17 | | Net Assets Attributable to Shareholders of Listed Company | 30,488,032,523 | 30,291,427,176 | 0.65 | | Total Assets | 70,872,821,162 | 69,512,689,187 | 1.96 | [(II) Main Financial Indicators](index=6&type=section&id=%28II%29%20Main%20Financial%20Indicators) Basic and diluted EPS significantly increased, with weighted average ROE improving by over 1 percentage point Main Financial Indicators | Main Financial Indicators | Current Reporting Period (Jan-Jun) | Prior Year Period | YoY Change (%) | | :--- | :--- | :--- | :--- | | Basic Earnings Per Share (RMB/share) | 0.53 | 0.35 | 52.03 | | Diluted Earnings Per Share (RMB/share) | 0.52 | 0.35 | 48.57 | | Basic Earnings Per Share (Excluding Non-Recurring Gains/Losses) (RMB/share) | 0.51 | 0.33 | 54.55 | | Weighted Average Return on Net Assets (%) | 3.57 | 2.49 | Increased by 1.08 percentage points | | Weighted Average Return on Net Assets (Excluding Non-Recurring Gains/Losses) (%) | 3.47 | 2.32 | Increased by 1.15 percentage points | [IX. Non-Recurring Gains and Losses and Amounts](index=6&type=section&id=IX.%20Non-Recurring%20Gains%20and%20Losses%20and%20Amounts) Total non-recurring gains and losses were **RMB 33.48 million**, mainly from government subsidies and receivable impairment reversals Non-Recurring Gains and Losses Items | Non-Recurring Gains and Losses Item | Amount (RMB) | | :--- | :--- | | Disposal gains/losses of non-current assets | -1,416,744 | | Government subsidies recognized in current profit/loss | 54,395,661 | | Gains/losses from changes in fair value and disposal of financial assets and liabilities | 471,938 | | Reversal of impairment provisions for receivables subject to separate impairment testing | 3,153,787 | | Other non-operating income and expenses | -18,304,048 | | Less: Income tax impact | 6,503,665 | | Minority interest impact (after tax) | -1,678,157 | | Total | 33,475,086 | [X. Companies with Equity Incentives or Employee Stock Ownership Plans May Choose to Disclose Net Profit After Deducting Share-Based Payment Impact](index=7&type=section&id=X.%20Companies%20with%20Equity%20Incentives%20or%20Employee%20Stock%20Ownership%20Plans%20May%20Choose%20to%20Disclose%20Net%20Profit%20After%20Deducting%20Share-Based%20Payment%20Impact) Net profit after deducting share-based payment impact was **RMB 1.117 billion**, a **50.59%** year-on-year increase Net Profit After Deducting Share-Based Payment Impact | Main Accounting Data | Current Reporting Period (Jan-Jun) (RMB) | Prior Year Period (RMB) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Net Profit After Deducting Share-Based Payment Impact | 1,116,705,549 | 741,543,049 | 50.59 | [Section III Management Discussion and Analysis](index=8&type=section&id=Section%20III%20Management%20Discussion%20and%20Analysis) This section elaborates on the company's operating performance in the first half of 2025, including the macro environment of the building materials industry, the company's main business and products, operating model, operating results, core competitiveness, and risk response measures [I. Explanation of the Company's Industry and Main Business During the Reporting Period](index=8&type=section&id=I.%20Explanation%20of%20the%20Company%27s%20Industry%20and%20Main%20Business%20During%20the%20Reporting%20Period) The company operates in the building materials industry, which is highly correlated with fixed asset investment, and has evolved into a global group covering the entire industry chain, with cement business remaining dominant [(I) The Company's Industry is Building Materials, Sub-industry is Building Materials](index=8&type=section&id=%28I%29%20The%20Company%27s%20Industry%20is%20Building%20Materials%2C%20Sub-industry%20is%20Building%20Materials) H1 2025 saw a **4.3%** drop in cement output, but prices rebounded, improving industry profitability to **RMB 15-16 billion** - In the first half of 2025, national fixed asset investment increased by **2.8%** year-on-year, with infrastructure investment growing by **4.6%** and real estate development investment decreasing by **11.2%**[27](index=27&type=chunk) - From January to June, national cumulative cement output was **815 million tons**, a year-on-year decrease of **4.3%**, with the decline narrowing compared to the same period last year[27](index=27&type=chunk) - Overall profitability of the cement industry improved in the first half, with total profit expected to be approximately **RMB 15-16 billion**[27](index=27&type=chunk) [(II) Company's Main Businesses](index=8&type=section&id=%28II%29%20Company%27s%20Main%20Businesses) The company is a global building materials group with a full industry chain, operating in 17 domestic and 20 overseas countries, with cement business revenue at **57%** and non-cement EBITDA at **44%** - The company's business covers **17** provinces/cities/autonomous regions in China and **20** overseas countries, with over **300** subsidiaries and branches[29](index=29&type=chunk) - As of June 30, 2025, the company has a cement production capacity of **126 million tons/year**, aggregates of **300 million tons/year**, and waste disposal of **18.24 million tons/year**[30](index=30&type=chunk) - As of June 30, 2025, cement business revenue accounted for **57%** of the company's total operating revenue, and non-cement businesses contributed **44%** of EBITDA[30](index=30&type=chunk) [(III) Company's Main Products](index=8&type=section&id=%28III%29%20Company%27s%20Main%20Products) Main products include cement, concrete, aggregates, and low-carbon materials, with extensive domestic and overseas production networks and overseas operational cement grinding capacity reaching **24.7 million tons/year** - The company's domestic cement production bases are located in **9** provinces/cities, including Hubei, Hunan, Yunnan, Chongqing, Sichuan, Guizhou, Tibet, Guangdong, and Henan[31](index=31&type=chunk) - The company has established production bases in **12** overseas countries, including Tajikistan and Kyrgyzstan, with overseas operational cement grinding capacity reaching **24.7 million tons/year**[31](index=31&type=chunk) - The company actively develops various new low-carbon building materials, such as ultra-high performance concrete (UHPC), mortar, and new wall materials[33](index=33&type=chunk) [(IV) Company's Operating Model](index=9&type=section&id=%28IV%29%20Company%27s%20Operating%20Model) The company uses a three-segment structure, produces based on sales, balances direct/distribution sales, and employs a "centralized procurement + smart" procurement strategy - The company's organizational structure is divided into three segments: "business operations," "business management," and "business support," to enhance management and decision-making efficiency[34](index=34&type=chunk) - The production model is based on sales, the sales model balances direct sales and distribution, and procurement implements a "centralized procurement + smart" strategy[34](index=34&type=chunk) [II. Discussion and Analysis of Operating Performance](index=9&type=section&id=II.%20Discussion%20and%20Analysis%20of%20Operating%20Performance) H1 2025 revenue declined **1.17%** to **RMB 16.046 billion**, but net profit rose **51.05%** to **RMB 1.103 billion** due to price hikes, overseas growth, and cost control 2025 H1 Operating Performance Overview | Indicator | Amount/Ratio | YoY Change | | :--- | :--- | :--- | | Operating Revenue | RMB 16.046 billion | -1.17% | | Net Profit Attributable to Parent Company Shareholders | RMB 1.103 billion | +51.05% | | Cement and Commercial Clinker Sales Volume | 27.7366 million tons | -2.63% | | Overseas Cement and Commercial Clinker Sales Volume | 8.3884 million tons | +10.41% | | Aggregates Sales | 76.0526 million tons | +6.33% | | Concrete Sales | 13.2480 million cubic meters | -9.88% | 2025 H1 Segment Operating Revenue and Gross Profit Margin | Business Type | Operating Revenue (RMB billion) | YoY Change | Gross Profit Margin (%) | Prior Year Gross Profit Margin (%) | | :--- | :--- | :--- | :--- | :--- | | Cement Business | 9.152 | +5.60% | 29.74 | 20.71 | | Domestic Cement Business | 5.024 | -1.26% | - | - | | Overseas Cement Business | 4.128 | +15.37% | - | - | | Aggregates Business | 2.763 | -6.72% | 47.91 | 47.41 | | Concrete Business | 3.457 | -12.33% | 13.12 | 11.61 | | Comprehensive Gross Profit Margin | - | - | 28.92 | 23.65 | - Overseas multi-business development continued to make progress, with projects in Zimbabwe, Zambia, South Africa, and Tanzania completed and put into operation, and the acquisition of **100%** equity of Embu Aggregates Company in Brazil completed, marking the first entry into the Americas market[37](index=37&type=chunk) [III. Analysis of Core Competitiveness During the Reporting Period](index=10&type=section&id=III.%20Analysis%20of%20Core%20Competitiveness%20During%20the%20Reporting%20Period) As one of "China's Top 500 Most Valuable Brands," the company boasts a long history and profound cultural heritage, further consolidating its scale, green development, innovation, brand, quality, and management advantages - The company was founded in **1907**, and is one of "China's Top 500 Most Valuable Brands" large enterprise groups[39](index=39&type=chunk) - The company's core competitiveness includes scale and complete industry chain, green and low-carbon development, technological innovation, trade name and brand, product quality, strategic layout, intelligent management, and professional management team advantages[39](index=39&type=chunk) [IV. Main Operating Performance During the Reporting Period](index=11&type=section&id=IV.%20Main%20Operating%20Performance%20During%20the%20Reporting%20Period) This section analyzes financial statement changes, asset/liability status, investments, and major holding/participating companies, showing profit growth despite revenue decline [(I) Analysis of Main Business](index=11&type=section&id=%28I%29%20Analysis%20of%20Main%20Business) Revenue decreased **1.17%**, costs decreased **8%**, while total profit increased significantly; investment cash flow outflow increased due to M&A Financial Statement Item Variation Analysis | Item | Current Period (RMB) | Prior Year Period (RMB) | Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 16,046,640,187 | 16,237,373,654 | -1.17 | | Operating Cost | 11,405,577,296 | 12,396,833,893 | -8 | | Selling Expenses | 762,586,412 | 787,871,075 | -3.21 | | Administrative Expenses | 939,872,641 | 908,113,338 | 3.5 | | Financial Expenses | 437,166,210 | 399,954,782 | 9.3 | | R&D Expenses | 72,224,935 | 70,954,352 | 1.79 | | Net Cash Flow from Operating Activities | 1,623,794,304 | 1,730,584,063 | -6.17 | | Net Cash Flow from Investment Activities | -2,143,578,153 | -1,178,576,055 | -81.88 | | Net Cash Flow from Financing Activities | 90,949,808 | -1,083,480,073 | 108.39 | - The change in net cash flow from investment activities was primarily due to increased enterprise acquisition expenditures[40](index=40&type=chunk) - The change in net cash flow from financing activities was primarily due to reduced maturing debt[40](index=40&type=chunk) [(III) Analysis of Assets and Liabilities](index=11&type=section&id=%28III%29%20Analysis%20of%20Assets%20and%20Liabilities) Total assets grew **1.96%**; goodwill increased **48.78%** due to overseas M&A; short-term borrowings decreased, and bonds payable increased Asset and Liability Status Changes | Item Name | Current Period End (RMB) | % of Total Assets (Current Period End) | Prior Year End (RMB) | % of Total Assets (Prior Year End) | Change from Prior Year End (%) | Explanation | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Trading Financial Assets | 1,675,259 | - | 31,704,908 | 0.05 | -94.72 | Related financial products liquidated | | Notes Receivable | 123,020,139 | 0.17 | 202,597,711 | 0.29 | -39.28 | Increased endorsement of notes | | Prepayments | 453,238,991 | 0.64 | 314,887,975 | 0.45 | 43.94 | Increased advance payments for goods and services | | Other Receivables | 787,055,227 | 1.11 | 1,237,502,508 | 1.78 | -36.40 | Recovery of asset disposal proceeds | | Goodwill | 1,798,800,610 | 2.54 | 1,209,007,806 | 1.74 | 48.78 | Increased due to overseas acquisitions | | Short-term Borrowings | 137,579,445 | 0.19 | 296,807,055 | 0.43 | -53.65 | Debt structure adjustment | | Employee Compensation Payable | 196,045,620 | 0.28 | 280,892,309 | 0.40 | -30.21 | Payment of prior year's performance bonuses | | Other Payables | 1,417,172,772 | - | 1,011,487,419 | 1.46 | 40.11 | H-share dividends awaiting payment after distribution | | Bonds Payable | 3,543,705,234 | - | 2,445,745,035 | 3.52 | 44.89 | New issuance of RMB 1.1 billion high-growth industrial bonds | | Special Reserves | 68,837,903 | 0.10 | 51,893,030 | 0.07 | 32.65 | Increased safety production fee balance | - Overseas assets amounted to **RMB 14,739,822,415**, accounting for **19.2%** of total assets[43](index=43&type=chunk) Restricted Assets at Period End | Item | Book Value at Period End (RMB) | | :--- | :--- | | Monetary Funds | 913,075,307 | | Fixed Assets | 5,039,418 | | Intangible Assets | 3,409,197 | | Total | 921,523,922 | [(IV) Analysis of Investment Status](index=12&type=section&id=%28IV%29%20Analysis%20of%20Investment%20Status) Other equity investments slightly increased, long-term equity investments stable, and trading financial assets significantly decreased Overall Analysis of External Equity Investments | Item | Balance at Period End (RMB) | Balance at Period Start (RMB) | Change (%) | | :--- | :--- | :--- | :--- | | Other Equity Instrument Investments | 945,621,616 | 934,524,059 | 1.19 | | Other | 1,675,259 | 31,704,908 | -94.72 | | Long-term Equity Investments | 583,078,169 | 584,752,454 | -0.29 | Financial Assets Measured at Fair Value | Asset Category | Balance at Period Start (RMB) | Fair Value Change Gains/Losses in Current Period (RMB) | Purchases in Current Period (RMB) | Sales/Redemptions in Current Period (RMB) | Balance at Period End (RMB) | | :--- | :--- | :--- | :--- | :--- | :--- | | Stocks | 38,143,738 | 2,128,471 | - | - | 39,983,240 | | Other | 31,704,908 | 1,556,780 | 330,000,000 | 360,000,000 | 1,675,259 | | Total | 69,848,646 | 3,685,251 | 330,000,000 | 360,000,000 | 41,658,499 | [(VI) Analysis of Major Holding and Participating Companies](index=13&type=section&id=%28VI%29%20Analysis%20of%20Major%20Holding%20and%20Participating%20Companies) Major subsidiaries Huaxin Green Building Materials (Wuxue) and Huaxin Cement (Wuxue) were profitable; Brazil acquisition had no major impact Major Subsidiaries and Participating Companies with Over 10% Impact on Company's Net Profit | Company Name | Main Business | Registered Capital (RMB) | Total Assets (RMB) | Net Assets (RMB) | Operating Revenue (RMB) | Net Profit (RMB) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Huaxin Green Building Materials (Wuxue) Co., Ltd. | Production and sales of aggregates | 522,500,000 | 1,558,995,359 | 1,000,784,290 | 685,249,976 | 181,870,179 | | Huaxin Cement (Wuxue) Co., Ltd. | Production and sales of cement, aggregates, concrete, wall materials | 300,000,000 | 3,351,396,769 | 1,749,344,745 | 1,032,985,955 | 327,364,888 | - During the reporting period, the company acquired ITATUBA PARTICIPAÇÕES LTDA and its subsidiaries through equity acquisition, which had no significant impact on the company's overall production, operations, and performance[52](index=52&type=chunk) [V. Other Disclosure Matters](index=13&type=section&id=V.%20Other%20Disclosure%20Matters) The company addresses risks like declining demand and rising costs through strategic reforms, and enhances value via "Quality Improvement, Efficiency Enhancement, and Return Focus" plan [(I) Potential Risks](index=13&type=section&id=%28I%29%20Potential%20Risks) The company faces risks from declining domestic cement demand, overcapacity, compliance, rising costs, and international operations/exchange rates - Risks of declining performance due to continuous decline in domestic cement demand and severe overcapacity[52](index=52&type=chunk) - Risks of safe production, energy saving and carbon reduction, environmental emission compliance, and continuously rising production costs[53](index=53&type=chunk) - Risks of international operations and exchange rate fluctuations, influenced by geopolitical factors, economic and trade disputes, and financial market volatility[53](index=53&type=chunk) - The company will address risks by promoting supply-side reform, increasing investment in safety and environmental protection, optimizing capacity, reducing costs, strengthening marketing, and hedging risks[55](index=55&type=chunk) [(II) Other Disclosure Matters](index=14&type=section&id=%28II%29%20Other%20Disclosure%20Matters) The company implements four strategies, engages investors, saw management stock increases, and approved a **40%** dividend payout for 2024 - The company is fully advancing four major strategies: "overseas multi-business development, domestic integrated synergy, carbon reduction and value-added innovation, and digital AI-driven"[56](index=56&type=chunk) - In the first half, the company conducted over **300** investor communication activities, and management purchased **195,300** shares of the company's stock through the secondary market[56](index=56&type=chunk) 2024 Annual Profit Distribution Plan | Indicator | Content | | :--- | :--- | | Distribution Base | 2,078,995,649 shares | | Cash Dividend Per Share (incl. tax) | RMB 0.46/share | | Total Dividends Distributed (incl. tax) | RMB 956,337,999 | | % of Net Profit Attributable to Shareholders of Listed Company | 40% | - The company strictly fulfills its information disclosure obligations in accordance with regulatory requirements, disclosing **2** periodic reports, **18** interim announcements, and **21** other online documents domestically in the first half[57](index=57&type=chunk) [Section IV Corporate Governance, Environment and Society](index=15&type=section&id=Section%20IV%20Corporate%20Governance%2C%20Environment%20and%20Society) This section covers changes in directors (Luo Zhiguang retired, Olivier Milhaud elected), no semi-annual profit distribution, ongoing equity incentive plans, environmental disclosures for **59** subsidiaries, and rural revitalization efforts [I. Changes in Company Directors, Supervisors, and Senior Management](index=15&type=section&id=I.%20Changes%20in%20Company%20Directors%2C%20Supervisors%2C%20and%20Senior%20Management) Luo Zhiguang retired as director; Olivier Milhaud was elected non-executive director on **July 15, 2025** - Mr. Luo Zhiguang resigned as director, member of the Board Audit Committee, member of the Board Remuneration and Assessment Committee, and Chairman of the Board Governance and Compliance Committee on **June 4** due to retirement[59](index=59&type=chunk) - On **July 15, 2025**, the company elected Mr. Olivier Milhaud as a non-executive director of the Eleventh Board of Directors[59](index=59&type=chunk) [II. Profit Distribution or Capital Reserve Conversion to Share Capital Plan](index=15&type=section&id=II.%20Profit%20Distribution%20or%20Capital%20Reserve%20Conversion%20to%20Share%20Capital%20Plan) No profit distribution or capital reserve conversion to share capital is planned for this reporting period - No profit distribution or capital reserve conversion to share capital will be made in this reporting period[60](index=60&type=chunk) [III. Company Equity Incentive Plans, Employee Stock Ownership Plans, or Other Employee Incentive Measures and Their Impact](index=15&type=section&id=III.%20Company%20Equity%20Incentive%20Plans%2C%20Employee%20Stock%20Ownership%20Plans%2C%20or%20Other%20Employee%20Incentive%20Measures%20and%20Their%20Impact) Resolutions for the **2024** and **2025** core employee stock ownership plans were approved, continuing incentive measures - The company approved the resolution on the grant results of the "**Second Phase (2024) Core Employee Stock Ownership Plan of the 2023-2025 Core Employee Stock Ownership Plan**"[61](index=61&type=chunk) - The company approved the resolution on the "**Third Phase (2025) Core Employee Stock Ownership Plan of the 2023-2025 Core Employee Stock Ownership Plan**"[61](index=61&type=chunk) [IV. Environmental Information of Listed Companies and Their Major Subsidiaries Included in the List of Enterprises Required to Disclose Environmental Information by Law](index=16&type=section&id=IV.%20Environmental%20Information%20of%20Listed%20Companies%20and%20Their%20Major%20Subsidiaries%20Included%20in%20the%20List%20of%20Enterprises%20Required%20to%20Disclose%20Environmental%20Information%20by%20Law) **59** enterprises are on the environmental disclosure list, with reports accessible via the company website - The company has **59** enterprises included in the list of enterprises required to disclose environmental information by law[63](index=63&type=chunk) - Huaxin Cement Co., Ltd.'s environmental information disclosure report can be accessed at **https://www.huaxincem.com/shehuizeren/shehuizerenbaogao.html**[63](index=63&type=chunk) [V. Specific Progress in Consolidating and Expanding Poverty Alleviation Achievements, Rural Revitalization, etc.](index=17&type=section&id=V.%20Specific%20Progress%20in%20Consolidating%20and%20Expanding%20Poverty%20Alleviation%20Achievements%2C%20Rural%20Revitalization%2C%20etc.) The company actively supports rural revitalization through various assistance programs, enhancing local development capabilities - The company actively responds to the national rural revitalization strategy through multi-dimensional precise assistance measures such as village-based assistance, community co-construction, agricultural support, educational assistance, and material donations[65](index=65&type=chunk) - The company effectively enhances local residents' self-development capabilities and stimulates endogenous vitality in rural areas through industrial drive and educational empowerment[65](index=65&type=chunk) [Section V Important Matters](index=18&type=section&id=Section%20V%20Important%20Matters) This section covers no unfulfilled commitments or illegal related party transactions/guarantees, a significant arbitration case with Moncement Building Materials LLC (**USD 77.07 million**), and the completion of Holcim Nigeria asset acquisition [I. Fulfillment of Commitments](index=18&type=section&id=I.%20Fulfillment%20of%20Commitments) No commitments were fulfilled by the company or related parties during the reporting period - No fulfillment of commitments during the reporting period[67](index=67&type=chunk) [VII. Major Litigation and Arbitration Matters](index=19&type=section&id=VII.%20Major%20Litigation%20and%20Arbitration%20Matters) A **USD 77.07 million** arbitration with Moncement Building Materials LLC is awaiting ruling, with **RMB 40 million** estimated liability Major Litigation and Arbitration Matters | Plaintiff (Applicant) | Defendant (Respondent) | Type of Litigation/Arbitration | Amount Involved in Litigation/Arbitration (USD) | Whether Estimated Liabilities Formed and Amount (RMB) | Progress of Litigation/Arbitration | | :--- | :--- | :--- | :--- | :--- | :--- | | Moncement Building Materials LLC | Huaxin Cement Co., Ltd. | Arbitration | 77.0696 million | Yes, 40 million | Hearing held on March 22-23, 25-28, 2024, awaiting arbitration | [X. Major Related Party Transactions](index=20&type=section&id=X.%20Major%20Related%20Party%20Transactions) The company completed the equity transfer of Holcim Nigeria assets on **August 29, 2025**, bringing target companies into consolidation scope - The company completed the equity transfer of Holcim Nigeria assets on **August 29, 2025**[70](index=70&type=chunk) - The target companies Caricement B.V. and Davis Peak Holdings Limited, as well as the ultimate target company Lafarge Africa Plc, will be included in the company's consolidated financial statements[70](index=70&type=chunk) - The buyer in this transaction will make a tender offer to other shareholders of the ultimate target company[70](index=70&type=chunk) [XI. Major Contracts and Their Performance](index=22&type=section&id=XI.%20Major%20Contracts%20and%20Their%20Performance) No external guarantees were made, but total outstanding guarantees to subsidiaries were **RMB 11.116 billion**, representing **31.75%** of net assets Company's Total Guarantees | Indicator | Amount (RMB) | | :--- | :--- | | Total guarantees provided to subsidiaries during the reporting period | -147,701,974 | | Total outstanding guarantees to subsidiaries at period-end (B) | 11,116,207,818 | | Total Guarantees (A+B) | 11,116,207,818 | | % of Total Guarantees to Company's Net Assets | 31.75 | | Debt guarantees provided for guaranteed parties with asset-liability ratio exceeding 70% (D) | 7,691,979,984 | [Section VI Share Changes and Shareholder Information](index=23&type=section&id=Section%20VI%20Share%20Changes%20and%20Shareholder%20Information) This section details unchanged share capital, **45,661** ordinary shareholders, HKSCC Nominees as the largest shareholder (**35.34%**), and secondary market share increases by key management [I. Share Capital Changes](index=23&type=section&id=I.%20Share%20Capital%20Changes) The company's total share capital and share capital structure remained unchanged during the reporting period - During the reporting period, the company's total share capital and share capital structure remained unchanged[78](index=78&type=chunk) [II. Shareholder Information](index=23&type=section&id=II.%20Shareholder%20Information) Total ordinary shareholders were **45,661**; HKSCC Nominees Limited was the largest shareholder with **35.34%** - Total number of ordinary shareholders at the end of the reporting period: **45,661**[79](index=79&type=chunk) Top Ten Shareholders' Shareholding | Shareholder Name | Shares Held at Period End (shares) | Proportion (%) | Shareholder Nature | | :--- | :--- | :--- | :--- | | HKSCC Nominees Limited | 734,719,819 | 35.34 | Overseas Legal Person | | HOLCHIN B.V. | 451,333,201 | 21.71 | Overseas Legal Person | | Huaxin Group Co., Ltd. | 338,060,739 | 16.26 | State-owned Legal Person | | Hong Kong Securities Clearing Company Limited | 56,903,205 | 2.74 | Overseas Legal Person | [III. Information on Directors, Supervisors, and Senior Management](index=25&type=section&id=III.%20Information%20on%20Directors%2C%20Supervisors%2C%20and%20Senior%20Management) Key management, including Li Yeqing and Chen Qian, increased their company stock holdings via the secondary market Shareholding Changes of Current and Resigned Directors, Supervisors, and Senior Management During the Reporting Period | Name | Position | Shares Held at Period Start (shares) | Shares Held at Period End (shares) | Change in Shares During Period (shares) | Reason for Change | | :--- | :--- | :--- | :--- | :--- | :--- | | Li Yeqing | Director, President | 1,407,930 | 1,537,930 | 130,000 | Secondary market increase | | Chen Qian | Vice President, CFO | 200,000 | 220,000 | 20,000 | Secondary market increase | | Xu Gang | Vice President | 391,300 | 407,900 | 16,600 | Secondary market increase | | Ye Jiaxing | Vice President, Board Secretary | 244,225 | 272,925 | 28,700 | Secondary market increase | [Section VII Bond-Related Information](index=26&type=section&id=Section%20VII%20Bond-Related%20Information) This section details the basic information, use of raised funds, and progress of special bond categories for the company's various corporate bonds and non-financial enterprise debt financing instruments, showing improved interest coverage ratios [I. Corporate Bonds (Including Enterprise Bonds) and Non-Financial Enterprise Debt Financing Instruments](index=26&type=section&id=I.%20Corporate%20Bonds%20%28Including%20Enterprise%20Bonds%29%20and%20Non-Financial%20Enterprise%20Debt%20Financing%20Instruments) The company issued multiple corporate bonds and debt instruments; consolidated interest-bearing debt was **RMB 19.803 billion**, with improved interest coverage [(I) Corporate Bonds (Including Enterprise Bonds)](index=26&type=section&id=%28I%29%20Corporate%20Bonds%20%28Including%20Enterprise%20Bonds%29) Multiple corporate bonds were issued, including overseas, low-carbon, and tech innovation bonds, with varying rates and maturities Corporate Bond Basic Information | Bond Name | Abbreviation | Code | Issue Date | Maturity Date | Bond Balance (RMB 100 million) | Interest Rate (%) | Trading Venue | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Overseas Bond Issued in 2020 | HXCEME | XS2256737722 | Nov 19, 2020 | Nov 18, 2025 | 20 | 2.25 | SGX | | Corporate Bond Publicly Issued to Professional Investors in 2022 (Low-Carbon Transition-Linked Bond) (Tranche 1) (Type 2) | 22 Huaxin 02 | 137545.SH | Jul 15, 2022 | Jul 19, 2027 | 4 | 3.39 | SSE | | Technology Innovation Corporate Bond Publicly Issued to Professional Investors in 2024 (Tranche 1) | 24 Huaxin K1 | 241419.SH | Aug 12, 2024 | Aug 14, 2029 | 11 | 2.49 | SSE | | Corporate Bond Publicly Issued to Professional Investors in 2022 (Low-Carbon Transition-Linked Bond) (Tranche 1) (Type 1) | 22 Huaxin 01 | 137544.SH | Jul 15, 2022 | Jul 19, 2025 | 5 | 2.99 | SSE | | "Belt and Road" Technology Innovation Corporate Bond Publicly Issued to Professional Investors in 2023 (Tranche 1) (Type 1) | 23 Huaxin K1 | 240065.SH | Dec 1, 2023 | Dec 5, 2026 | 8 | 3.12 | SSE | | "Belt and Road" Technology Innovation Corporate Bond Publicly Issued to Professional Investors in 2025 (High-Growth Industrial Bond) (Tranche 1) | 25 Huaxin K1 | 242246.SH | Jan 9, 2025 | Jan 13, 2030 | 11 | 2.14 | SSE | [(II) Corporate Bond Raised Funds Utilization](index=28&type=section&id=%28II%29%20Corporate%20Bond%20Raised%20Funds%20Utilization) The **RMB 1.1 billion** 25 Huaxin K1 bond proceeds were used for working capital and "Belt and Road" acquisitions, which are performing well Raised Funds Basic Information | Bond Code | Bond Abbreviation | Is it a Special Bond? | Specific Type of Special Bond | Total Raised Funds (RMB 100 million) | Raised Funds Balance at Period End (RMB 100 million) | | :--- | :--- | :--- | :--- | :--- | :--- | | 242246.SH | 25 Huaxin K1 | Yes | Belt and Road Bond, Technology Innovation Bond, High-Growth Industrial Bond | 11 | 11 | Actual Use of Raised Funds | Bond Code | Bond Abbreviation | Actual Amount of Raised Funds Used (RMB 100 million) | Amount for Supplementing Working Capital (RMB 100 million) | Amount for Equity Investment, Debt Investment, or Asset Acquisition (RMB 100 million) | | :--- | :--- | :--- | :--- | :--- | | 242246.SH | 25 Huaxin K1 | 11 | 3.30 | 7.70 | - The acquisition project funded by the **25 Huaxin K1** bond completed equity transfer on **March 17, 2025**, and generated operating revenue of **RMB 156 million** and net profit of **RMB 20.87 million** in the second quarter[94](index=94&type=chunk) [(III) Other Matters to be Disclosed for Special Bonds](index=30&type=section&id=%28III%29%20Other%20Matters%20to%20be%20Disclosed%20for%20Special%20Bonds) "Belt and Road" bonds funded overseas investments; low-carbon bond KPIs were met, avoiding coupon rate adjustment - Part of the **23 Huaxin K1** bond's raised funds were used to invest in Natal Portland Cement Company (Pty) Ltd. in South Africa, which has become a wholly-owned subsidiary of the company[96](index=96&type=chunk) - Part of the **25 Huaxin K1** bond's raised funds were used to invest in ITATUBA PARTICIPAÇÕES LTDA and EMBU S.A. ENGENHARIA E COMÉRCIO in Brazil, strategically expanding into emerging potential markets[98](index=98&type=chunk) - The key performance indicators for the **22 Huaxin 02** low-carbon transition-linked corporate bond have been met, with unit clinker carbon emissions of **809.19 kgCO2/t** in 2024, a reduction of **36.61 kgCO2/t** from the baseline, achieving a total carbon emission reduction of approximately **2.2585 million tons**[105](index=105&type=chunk) [(IV) Important Matters Related to Corporate Bonds During the Reporting Period](index=33&type=section&id=%28IV%29%20Important%20Matters%20Related%20to%20Corporate%20Bonds%20During%20the%20Reporting%20Period) Non-operating receivables were **RMB 0.587 billion** (**2%** of net assets); consolidated interest-bearing debt was **RMB 19.803 billion**, with **RMB 2 billion** overseas bonds maturing within one year - At the end of the reporting period, total outstanding non-operating receivables and intercompany loans were **RMB 587 million**, accounting for **2%** of consolidated net assets[106](index=106&type=chunk) Company's Consolidated Interest-Bearing Debt Structure | Interest-Bearing Debt Category | Due Within 1 Year (incl.) (RMB 100 million) | Due Beyond 1 Year (excl.) (RMB 100 million) | Total Amount (RMB 100 million) | % of Total Interest-Bearing Debt | | :--- | :--- | :--- | :--- | :--- | | Corporate Credit Bonds | 25.40 | 35.44 | 60.84 | 30.72 | | Bank Loans | 31.17 | 101.90 | 133.08 | 67.20 | | Non-Bank Financial Institution Loans | 1.58 | 2.54 | 4.11 | 2.08 | | Total | 58.15 | 139.88 | 198.03 | 100 | - At the end of the reporting period, the company's consolidated outstanding overseas bond balance was **RMB 2 billion**, with a principal amount of **RMB 2 billion** maturing within one year[111](index=111&type=chunk) [(V) Non-Financial Enterprise Debt Financing Instruments in the Interbank Bond Market](index=35&type=section&id=%28V%29%20Non-Financial%20Enterprise%20Debt%20Financing%20Instruments%20in%20the%20Interbank%20Bond%20Market) The company issued **RMB 1 billion** of 5-year "25 Huaxin Cement MTN001 (Tech Innovation Bond)" at **2.08%** in 2025 Non-Financial Enterprise Debt Financing Instruments Basic Information | Bond Name | Abbreviation | Code | Issue Date | Maturity Date | Bond Balance (RMB 100 million) | Interest Rate (%) | Trading Venue | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Huaxin Cement Co., Ltd. 2025 First Tranche Technology Innovation Bond | 25 Huaxin Cement MTN001 (Tech Innovation Bond) | 102582893.IB | 2025-7-14 | 2030-7-15 | 10 | 2.08 | Interbank | | Repayment Method | Annual interest payment, principal repayment at maturity | | Investor Appropriateness Arrangement | Professional institutional investors | | Trading Mechanism | Subject to relevant regulations issued by the Interbank Lending Center | [(VII) Main Accounting Data and Financial Indicators](index=36&type=section&id=%28VII%29%20Main%20Accounting%20Data%20and%20Financial%20Indicators) Current and quick ratios improved; asset-liability ratio increased to **50.6%**; net profit (excl. non-recurring) grew **57.29%**; interest coverage ratios significantly improved Main Accounting Data and Financial Indicators | Main Indicator | Current Period End/Current Period (Jan-Jun) | Prior Year End/Prior Year Period | Change from Prior Year End/Prior Period (%) | | :--- | :--- | :--- | :--- | | Current Ratio | 0.90 | 0.87 | 3.45 | | Quick Ratio | 0.70 | 0.68 | 2.94 | | Asset-Liability Ratio (%) | 50.6% | 49.8% | Increased by 0.8 percentage points | | Net Profit (Excluding Non-Recurring Gains/Losses) | 1,070,009,720 | 680,295,259 | 57.29 | | Total Debt to EBITDA | 0.10 | 0.10 | - | | Interest Coverage Ratio | 6.71 | 4.56 | 47.15 | | Cash Interest Coverage Ratio | 8.27 | 7.55 | 9.54 | | EBITDA Interest Coverage Ratio | 10.43 | 9.80 | 6.43 | | Loan Repayment Rate (%) | 100% | 100% | - | | Interest Payment Rate (%) | 100% | 100% | - | [Section VIII Financial Report](index=37&type=section&id=Section%20VIII%20Financial%20Report) This section presents unaudited consolidated and parent company financial statements, including balance sheets, income statements, cash flow statements, and equity changes, along with detailed notes on accounting policies, taxes, and specific financial items [I. Audit Report](index=37&type=section&id=I.%20Audit%20Report) This semi-annual report is unaudited - This semi-annual report is unaudited[5](index=5&type=chunk) [II. Financial Statements](index=37&type=section&id=II.%20Financial%20Statements) This section provides consolidated and parent company balance sheets, income statements, cash flow statements, and equity changes for H1 2025 [Consolidated Balance Sheet](index=37&type=section&id=Consolidated%20Balance%20Sheet) As of **June 30, 2025**, consolidated total assets were **RMB 70.873 billion**, liabilities **RMB 35.863 billion**, and parent equity **RMB 30.488 billion** Consolidated Balance Sheet Key Data | Item | June 30, 2025 (RMB) | December 31, 2024 (RMB) | | :--- | :--- | :--- | | Total Assets | 70,872,821,162 | 69,512,689,187 | | Total Liabilities | 35,863,182,134 | 34,614,884,740 | | Total Owners' Equity Attributable to Parent Company | 30,488,032,523 | 30,291,427,176 | | Total Current Assets | 15,764,521,247 | 15,791,607,023 | | Total Current Liabilities | 17,597,042,515 | 18,168,904,092 | [Parent Company Balance Sheet](index=39&type=section&id=Parent%20Company%20Balance%20Sheet) As of **June 30, 2025**, parent company total assets were **RMB 32.409 billion**, liabilities **RMB 16.353 billion**, and equity **RMB 16.056 billion** Parent Company Balance Sheet Key Data | Item | June 30, 2025 (RMB) | December 31, 2024 (RMB) | | :--- | :--- | :--- | | Total Assets | 32,409,212,476 | 30,400,524,002 | | Total Liabilities | 16,352,888,551 | 14,694,976,691 | | Total Owners' Equity | 16,056,323,925 | 15,705,547,311 | | Total Current Assets | 13,163,529,771 | 12,110,896,656 | | Total Current Liabilities | 9,510,240,251 | 9,179,473,764 | [Consolidated Income Statement](index=41&type=section&id=Consolidated%20Income%20Statement) H1 2025 consolidated revenue was **RMB 16.047 billion** (**-1.17%**), total profit **RMB 2.025 billion** (**+50.74%**), and parent net profit **RMB 1.103 billion** (**+51.05%**) Consolidated Income Statement Key Data | Item | 2025 H1 (RMB) | 2024 H1 (RMB) | | :--- | :--- | :--- | | Total Operating Revenue | 16,046,640,187 | 16,237,373,654 | | Total Operating Costs | 14,034,455,983 | 14,939,003,710 | | Total Profit | 2,024,928,214 | 1,343,287,311 | | Net Profit Attributable to Parent Company Shareholders | 1,103,484,806 | 730,553,374 | | Basic Earnings Per Share (RMB/share) | 0.53 | 0.35 | | Diluted Earnings Per Share (RMB/share) | 0.52 | 0.35 | [Parent Company Income Statement](index=43&type=section&id=Parent%20Company%20Income%20Statement) H1 2025 parent company revenue was **RMB 1.116 billion** (**-7.27%**), net profit **RMB 1.319 billion** (**+21.44%**), with investment income as the main source Parent Company Income Statement Key Data | Item | 2025 H1 (RMB) | 2024 H1 (RMB) | | :--- | :--- | :--- | | Operating Revenue | 1,115,929,981 | 1,203,431,544 | | Total Profit | 1,314,261,641 | 1,074,591,781 | | Net Profit | 1,319,442,160 | 1,086,554,623 | | Investment Income | 1,340,340,740 | 1,122,846,395 | [Consolidated Cash Flow Statement](index=44&type=section&id=Consolidated%20Cash%20Flow%20Statement) H1 2025 operating cash flow was **RMB 1.624 billion** (**-6.17%**); investment cash flow was **RMB -2.144 billion** (due to M&A); financing cash flow turned positive Consolidated Cash Flow Statement Key Data | Item | 2025 H1 (RMB) | 2024 H1 (RMB) | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 1,623,794,304 | 1,730,584,063 | | Net Cash Flow from Investment Activities | -2,143,578,153 | -1,178,576,055 | | Net Cash Flow from Financing Activities | 90,949,808 | -1,083,480,073 | | Net Increase in Cash and Cash Equivalents | -462,206,328 | -546,065,554 | [Parent Company Cash Flow Statement](index=45&type=section&id=Parent%20Company%20Cash%20Flow%20Statement) H1 2025 parent operating cash flow was **RMB 0.533 billion** (**+374.05%**); investment cash flow **RMB 0.092 billion** (**+575.99%**); financing cash flow **RMB -0.941 billion** (**-21.58%**) Parent Company Cash Flow Statement Key Data | Item | 2025 H1 (RMB) | 2024 H1 (RMB) | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 532,678,234 | 112,350,473 | | Net Cash Flow from Investment Activities | 92,428,542 | 13,671,175 | | Net Cash Flow from Financing Activities | -941,114,244 | -774,101,084 | | Net Increase in Cash and Cash Equivalents | -310,014,790 | -647,917,743 | [Consolidated Statement of Changes in Owners' Equity](index=46&type=section&id=Consolidated%20Statement%20of%20Changes%20in%20Owners%27%20Equity) H1 2025 consolidated owners' equity increased by **RMB 0.112 billion**, driven by comprehensive income and profit distribution Consolidated Statement of Changes in Owners' Equity Key Data | Item | 2025 H1 Period-End Balance (RMB) | 2024 H1 Period-End Balance (RMB) | | :--- | :--- | :--- | | Total Owners' Equity | 35,009,639,028 | 32,982,745,374 | | Total Owners' Equity Attributable to Parent Company | 30,488,032,523 | 28,687,519,804 | | Amount of Increase/Decrease in Current Period (decrease indicated by "-") | 111,834,581 | -312,137,068 | | Total Comprehensive Income | 1,458,238,881 | 1,187,768,486 | | Profit Distribution | -1,396,306,924 | -1,519,839,606 | [Parent Company Statement of Changes in Owners' Equity](index=48&type=section&id=Parent%20Company%20Statement%20of%20Changes%20in%20Owners%27%20Equity) H1 2025 parent company owners' equity increased by **RMB 0.351 billion**, influenced by comprehensive income and profit distribution Parent Company Statement of Changes in Owners' Equity Key Data | Item | 2025 H1 Period-End Balance (RMB) | 2024 H1 Period-End Balance (RMB) | | :--- | :--- | :--- | | Total Owners' Equity | 16,056,323,925 | 14,913,460,501 | | Amount of Increase/Decrease in Current Period (decrease indicated by "-") | 350,776,614 | 2,919,812 | | Total Comprehensive Income | 1,307,807,419 | 1,107,518,927 | | Profit Distribution | -956,337,999 | -1,101,867,695 | [III. Company Basic Information](index=50&type=section&id=III.%20Company%20Basic%20Information) Huaxin Cement, established **1993**, listed on SSE/HKEX, produces building materials; H1 2025 financial statements approved **Aug 29, 2025** - Huaxin Cement Co., Ltd. was established on **November 30, 1993**, with A-shares and H-shares respectively listed on the Shanghai Stock Exchange and Hong Kong Stock Exchange[140](index=140&type=chunk) - The company and its subsidiaries primarily engage in the production and sale of building materials such as cement, concrete, clinker, and aggregates[140](index=140&type=chunk) - These financial statements were approved for issuance by the company's Board of Directors on **August 29, 2025**[141](index=141&type=chunk) [IV. Basis of Financial Statement Preparation](index=50&type=section&id=IV.%20Basis%20of%20Financial%20Statement%20Preparation) Financial statements prepared under PRC GAAP, Hong Kong Companies Ordinance, and Listing Rules, on a going concern basis - These financial statements are prepared in accordance with the Accounting Standards for Business Enterprises issued by the Ministry of Finance and relevant regulations, and comply with the requirements of "**Information Disclosure Rules for Companies Issuing Securities to the Public No. 15**" as well as the Hong Kong Companies Ordinance and Listing Rules[143](index=143&type=chunk) - These financial statements are presented on a going concern basis, and management believes the company has sufficient working capital to continue as a going concern[144](index=144&type=chunk) [V. Significant Accounting Policies and Estimates](index=50&type=section&id=V.%20Significant%20Accounting%20Policies%20and%20Estimates) This section details the company's significant accounting policies and estimates, including revenue recognition, financial instruments, and asset impairment - The Group has formulated specific accounting policies and estimates based on its actual production and operation characteristics, mainly reflected in impairment provisions for receivables, inventory valuation methods, depreciation of fixed assets, amortization of intangible assets, and revenue recognition and measurement[145](index=145&type=chunk) - The company's accounting year runs from **January 1 to December 31** of the Gregorian calendar, and its functional currency is **RMB**[147](index=147&type=chunk)[148](index=148&type=chunk) - The company's financial assets are classified as measured at amortized cost, at fair value through other comprehensive income, and at fair value through profit or loss[159](index=159&type=chunk) - The company's revenue recognition principle is to recognize revenue when performance obligations in the contract are satisfied, i.e., when the customer obtains control of the related goods or services[202](index=202&type=chunk) [VI. Taxation](index=66&type=section&id=VI.%20Taxation) Main tax types and rates are listed, with several subsidiaries enjoying corporate income tax incentives and VAT refunds Main Tax Types and Rates | Tax Type | Tax Base | Tax Rate | | :--- | :--- | :--- | | Value-Added Tax | Taxable income | General calculation: 13%, 6%; Simplified calculation: 3%; Overseas companies: 18%, 17%, 16%, 15%, 12%, 5% | | Corporate Income Tax | Taxable income | Overseas companies: 30%, 28%, 20%, 18%, 15%, 13%, 12.5%, 10%; Other companies: 25%, 16.5%, 15%, 12.5%, 9%, 0% | - Multiple subsidiaries of the company enjoy corporate income tax incentives for high-tech enterprises, encouraged industries in Hainan Free Trade Port, encouraged industries in the Western Development region, and third-party pollution control enterprises, with a reduced rate of **15%** or partial income tax exemption[224](index=224&type=chunk)[225](index=225&type=chunk)[226](index=226&type=chunk)[227](index=227&type=chunk) - Some subsidiaries enjoy VAT immediate refund policies for comprehensive utilization products and services, with a refund ratio of **70%**[228](index=228&type=chunk) [VII. Notes to Consolidated Financial Statement Items](index=68&type=section&id=VII.%20Notes%20to%20Consolidated%20Financial%20Statement%20Items) Detailed notes on consolidated balance sheet items, including monetary funds, receivables, inventories, fixed assets, goodwill, and borrowings [1. Monetary Funds](index=68&type=section&id=1.%20Monetary%20Funds) Total monetary funds were **RMB 6.670 billion**, with **RMB 1.123 billion** deposited overseas Monetary Funds Composition | Item | Balance at Period End (RMB) | Balance at Period Start (RMB) | | :--- | :--- | :--- | | Cash on Hand | 3,454,847 | 1,192,015 | | Bank Deposits | 5,753,379,156 | 6,217,848,316 | | Other Monetary Funds | 913,075,307 | 589,962,243 | | Total | 6,669,909,310 | 6,809,002,574 | | Of which: Funds Deposited Overseas | 1,122,597,481 | 1,441,956,475 | [4. Accounts Receivable](index=69&type=section&id=4.%20Accounts%20Receivable) Accounts receivable book value was **RMB 3.531 billion**, with **80.41%** due within one year; impairment provision increased by **RMB 56.52 million** Accounts Receivable Aging Disclosure | Aging | Book Balance at Period End (RMB) | Book Balance at Period Start (RMB) | | :--- | :--- | :--- | | Within 1 year (incl. 1 year) | 3,117,071,483 | 2,679,545,907 | | 1 to 2 years | 528,209,141 | 425,135,025 | | 2 to 3 years | 103,382,207 | 65,994,623 | | Over 3 years | 127,352,208 | 117,966,856 | | Less: Impairment Provision for Accounts Receivable | 344,933,602 | 318,842,528 | | Total | 3,531,081,437 | 2,969,799,883 | Disclosure by Impairment Provision Method | Category | Book Balance at Period End (RMB) | Impairment Provision (RMB) | Provision Ratio (%) | | :--- | :--- | :--- | :--- | | Individually assessed impairment provision | 105,099,259 | 95,636,736 | 91 | | Collectively assessed impairment provision | 3,770,915,780 | 249,296,866 | 7 | - The impairment provision for bad debts increased by **RMB 56,522,932** in the current period[246](index=246&type=chunk) [8. Inventories](index=75&type=section&id=8.%20Inventories) Inventory book value was **RMB 2.938 billion**, including raw materials, WIP, finished goods, and spare parts; total impairment provision was **RMB 0.196 billion** Inventory Classification | Item | Book Value at Period End (RMB) | Book Value at Period Start (RMB) | | :--- | :--- | :--- | | Raw Materials | 581,685,866 | 702,492,244 | | Work in Progress | 925,196,651 | 767,372,439 | | Finished Goods | 661,798,094 | 820,949,819 | | Spare Parts and Auxiliary Materials, etc. | 769,453,627 | 766,954,988 | | Total | 2,938,134,238 | 3,057,769,490 | - Total inventory impairment provision and contract performance cost impairment provision amounted to **RMB 195,584,071**[258](index=258&type=chunk) [13. Fixed Assets](index=78&type=section&id=13.%20Fixed%20Assets) Fixed assets book value was **RMB 28.147 billion**; original cost increased by **RMB 1.273 billion** from transfers and M&A Fixed Assets Book Value | Item | Book Value at Period End (RMB) | Book Value at Period Start (RMB) | | :--- | :--- | :--- | | Buildings and Structures | 15,620,645,210 | 15,545,575,491 | | Machinery and Equipment | 12,252,263,981 | 12,618,076,233 | | Office Equipment | 99,012,543 | 102,012,750 | | Transportation Vehicles | 175,129,848 | 132,365,100 | | Total | 28,147,051,582 | 28,398,029,574 | - The original cost of fixed assets increased by **RMB 1,273,033,109** in the current period, of which **RMB 879,306,858** was transferred from construction in progress and **RMB 356,939,906** was due to business combinations[267](index=267&type=chunk) - The company had temporarily idle fixed assets with a book value of **RMB 329,628,013**[268](index=268&type=chunk) [14. Construction in Progress](index=80&type=section&id=14.%20Construction%20in%20Progress) Construction in progress book value was **RMB 3.975 billion**, up **16.47%**, with major projects like Huangshi manufactured sand and Mozambique plant upgrade Construction in Progress Book Value | Item | Book Value at Period End (RMB) | Book Value at Period Start (RMB) | | :--- | :--- | :--- | | Construction in Progress | 3,974,544,849 | 3,412,128,279 | | Engineering Materials | 76,990,409 | 118,623,991 | | Total | 4,051,535,258 | 3,530,752,270 | - The Huaxin Huangshi Green Building Materials Billion-Ton Manufactured Sand Project has a cumulative investment of **80%** of its budget, and the Mozambique Nacala Plant Upgrade Project has a cumulative investment of **90%** of its budget[274](index=274&type=chunk) - Construction in progress increased by **RMB 1,489,388,890** in the current period, with **RMB 879,306,858** transferred to fixed assets[274](index=274&type=chunk) [17. Goodwill](index=85&type=section&id=17.%20Goodwill) Goodwill original book value was **RMB 1.969 billion**, increasing by **RMB 0.590 billion** due to ITATUBA acquisition Goodwill Original Book Value | Name of Investee or Goodwill-Forming Event | Balance at Period Start (RMB) | Increase in Current Period (formed by business combination) (RMB) | Balance at Period End (RMB) | | :--- | :--- | :--- | :--- | | Natal Portland Cement Company (Pty) Ltd. | 567,704,407 | - | 567,704,407 | | ITATUBA PARTICIPAÇÕES LTDA | - | 589,792,804 | 589,792,804 | | Total | 1,379,370,972 | 589,792,804 | 1,969,163,776 | Goodwill Impairment Provision | Name of Investee or Goodwill-Forming Event | Balance at Period Start (RMB) | Balance at Period End (RMB) | | :--- | :--- | :--- | | Shide Jinying Cement (Hong Kong) Co., Ltd. and its subsidiaries | 69,557,768 | 69,557,768 | | Huaxin Cement (Ezhou) Co., Ltd. | 21,492,135 | 21,492,135 | | Hainan Xinhongda Building Materials Co., Ltd. | 79,313,263 | 79,313,263 | | Total | 170,363,166 | 170,363,166 | [29. Long-term Borrowings](index=92&type=section&id=29.%20Long-term%20Borrowings) Total long-term borrowings were **RMB 10.190 billion**, with annual interest rates from **1.35% to 19.53%** due to overseas investments Long-term Borrowings Classification | Item | Balance at Period End (RMB) | Balance at Period Start (RMB) | | :--- | :--- | :--- | | Guaranteed Borrowings | 8,682,243,181 | 8,591,443,197 | | Credit Borrowings | 4,487,044,762 | 3,969,692,679 | | Guaranteed Borrowings Due Within One Year | 2,279,594,824 | 2,639,427,349 | | Credit Borrowings Due Within One Year | 700,056,745 | 414,937,816 | | Total | 10,189,636,374 | 9,598,770,711 | - As of **June 30, 2025**, the annual interest rate for long-term borrowings ranged from **1.35% to 19.53%**, with higher interest rates mainly due to the overall higher interest rate levels in some countries with overseas investments[312](index=312&type=chunk) [30. Bonds Payable](index=93&type=section&id=30.%20Bonds%20Payable) Total bonds payable were **RMB 3.544 billion**, up **44.89%**, including a new **RMB 1.1 billion** issuance; **RMB 2.540 billion** due within one year Bonds Payable Information | Item | Balance at Period End (RMB) | Balance at Period Start (RMB) | | :--- | :--- | :--- | | Overseas Bond Issued in 2020 | - | - | | Corporate Bond Issued in 2022 (Low-Carbon Transition-Linked Bond) (Tranche 1) | 399,685,909 | 399,823,745 | | Subsidiary Preferred Shares | 149,151,403 | 149,725,053 | | Corporate Bond Issued in 2023 | 798,700,976 | 799,354,497 | | Corporate Bond Issued in 2024 | 1,098,030,772 | 1,096,841,740 | | Corporate Bond Issued in 2025 | 1,098,136,175 | - | | Total | 3,543,705,234 | 2,445,745,035 | - A new issuance of **RMB 1.1 billion** of the 2025 "Belt and Road" Technology Innovation Corporate Bond (High-Growth Industrial Bond) (Tranche 1) was made in the current period[315](index=315&type=chunk) - Bonds payable due within one year amounted to **RMB 2,540,196,941**[309](index=309&type=chunk) [44. Operating Revenue and Operating Costs](index=100&type=section&id=44.%20Operating%20Revenue%20and%20Operating%20Costs) H1 2025 revenue **RMB 16.047 billion** (**-1.17%**), cost **RMB 11.406 billion** (**-8%**); main business revenue **RMB 15.937 billion** Operating Revenue and Operating Costs | Item | Current Period Revenue (RMB) | Current Period Cost (RMB) | Prior Period Revenue (RMB) | Prior Period Cost (RMB) | | :--- | :--- | :--- | :--- | :--- | | Main Business | 15,936,934,688 | 11,333,787,250 | 16,078,811,428 | 12,270,184,750 | | Other Businesses | 109,705,499 | 71,790,046 | 158,562,226 | 126,649,143 | | Total | 16,046,640,187 | 11,405,577,296 | 16,237,373,654 | 12,396,833,893 | Breakdown of Operating Revenue and Operating Costs (by Product Type) | Product Type | Operating Revenue (RMB) | Operating Cost (RMB) | | :--- | :--- | :--- | | Cement Sales | 8,754,581,124 | 6,029,693,118 | | Concrete Sales | 3,456,745,885 | 3,003,271,938 | | Clinker Sales | 397,096,518 | 355,224,754 | | Aggregates Sales | 2,762,583,002 | 1,439,038,459 | | Other | 675,633,658 | 578,666,188 | - The company recognizes revenue from cement and other building materials sales at the point in time when control is transferred, and service revenue is recognized according to the progress of performance[348](index=348&type=chunk)[349](index=349&type=chunk) [58. Earnings Per Share](index=105&type=section&id=58.%20Earnings%20Per%20Share) H1 2025 basic EPS was **RMB 0.53**, diluted EPS **RMB 0.52**, both significantly higher year-on-year Earnings Per Share | Item | Current Period (RMB/share) | Prior Period (RMB/share) | | :--- | :--- | :--- | | Basic Earnings Per Share (Continuing Operations) | 0.53 | 0.35 | | Diluted Earnings Per Share (Continuing Operations) | 0.52 | 0.35 | Earnings Per Share Calculation Basis | Item | Current Period (RMB) | Prior Period (RMB) | | :--- | :--- | :--- | | Net Profit Attributable to Ordinary Shareholders of the Company | 1,103,484,806 | 730,553,347 | | Adjusted Net Profit Attributable to Ordinary Shareholders of the Company | 1,086,938,546 | 724,869,340 | | Weighted Average Number of Ordinary Shares Outstanding of the Company | 2,077,779,049 | 2,078,818,009 | | Adjusted Weighted Average Number of Ordinary Shares Outstanding of the Company | 2,079,932,326 | 2,078,818,009 | [VIII. R&D Expenses](index=112&type=section&id=VIII.%20R%26D%20Expenses) Total R&D expenditure was **RMB 76.0445 million**, with **RMB 72.2249 million** expensed and **RMB 3.8196 million** capitalized R&D Expenditure by Nature of Expense | Item | Current Period (RMB) | Prior Period (RMB) | | :--- | :--- | :--- | | Employee Compensation and Labor | 53,977,035 | 49,712,408 | | Depreciation and Amortization | 3,268,024 | 3,503,893 | | Intermediary Agency Service Fees | 7,152,393 | 6,318,521 | | Daily Office Expenses | 5,667,726 | 5,814,329 | | Other | 5,979,366 | 5,605,201 | | Total | 76,044,544 | 70,954,352 | | Of which: Expensed R&D Expenditure | 72,224,935 | 70,954,352 | | Capitalized R&D Expenditure | 3,819,609 | 399,345 | [IX. Changes in Consolidation Scope](index=112&type=section&id=IX.%20Changes%20in%20Consolidation%20Scope) The company acquired Brazil's ITATUBA PARTICIPAÇÕES LTDA (**100%** equity) for **RMB 1.262 billion**, adding **RMB 0.590 billion** goodwill - In the current period, the company acquired **100%** equity of Brazil's ITATUBA PARTICIPAÇÕES LTDA through a non-same-control business combination, with an equity acquisition cost of **RMB 1,262,165,065**[398](index=398&type=chunk) - This acquisition resulted in goodwill of **RMB 589,792,804**, and the acquired company generated revenue of **RMB 156,245,294** and net profit of **RMB 20,874,967** from the acquisition date to the end of the period[398](index=398&type=chunk)[400](index=400&type=chunk) - The Group deregistered **4** subsidiaries and newly established or acquired **6** subsidiaries through equity acquisition in the current period[403](index=403&type=chunk)[404](index=404&type=chunk) [X. Interests in Other Entities](index=115&type=section&id=X.%20Interests%20in%20Other%20Entities) This section details the company's numerous subsidiaries and important non-wholly-owned subsidiaries, including their financial impact - The company has numerous subsidiaries, with business activities covering building materials production and sales, environmental protection, logistics, and investment[405](index=405&type=chunk)[406](index=406&type=chunk)[407](index=407&type=chunk)[408](index=408&type=chunk)[409](index=409&type=chunk)[410](index=410&type=chunk) - The company exercises control over Huaxin Chunjin Building Materials (Wuxue) Co., Ltd. and Huaxin Yawan Cement Co., Ltd., among others, even with less than **50%** shareholding, primarily through board voting rights[410](index=410&type=chunk)[411](index=411&type=chunk) Key Financial Information of Important Non-Wholly-Owned Subsidiaries (Current Period) | Subsidiary Name | Operating Revenue (RMB) | Net Profit (RMB) | Total Comprehensive Income (RMB) | Cash Flow from Operating Activities (RMB) | | :--- | :--- | :--- | :--- | :--- | | Huangshi Huaxin Green Building Materials Industry Co., Ltd. | 516,175,394 | -90,330,897 | -90,330,897 | -76,635,788 | | Huaxin Green Building Materials (Wuxue) Co., Ltd. | 685,249,976 | 181,870,179 | 181,870,179 | -15,720,020 | | Oman Cement Company SAOG | 630,348,072 | 92,164,478 | 48,620,535 | 130,483,150 | [XI. Risks Related to Financial Instruments](index=124&type=section&id=XI.%20Risks%20Related%20to%20Financial%20Instruments) The company manages credit, liquidity, and market risks (interest rate, foreign currency) through various strate

[Important Notice](index=2&type=section&id=%E9%87%8D%E8%A6%81%E6%8F%90%E7%A4%BA) The company's board and senior management confirm the unaudited semi-annual report's accuracy, proposing a 2025 interim cash dividend of RMB 0.28 per 10 shares (30.31% of net profit), cautioning investors on forward-looking statements, and affirming no unauthorized fund occupation or guarantees 2025 Semi-Annual Profit Distribution Plan | Indicator | Amount/Ratio | | :--- | :--- | | Proposed Cash Dividend (tax inclusive) | 26,177,649.93 RMB | | Dividend per 10 shares | 0.28 RMB | | Percentage of Net Profit Attributable to Shareholders for the Reporting Period | 30.31% | | Total Share Capital | 934,916,069 shares | Unaudited Financial Data for January-June 2025 | Indicator | Amount (RMB) | | :--- | :--- | | Net Profit Attributable to Owners of the Parent Company | 86,366,014.84 | | Undistributed Profits Carried Forward from Prior Year | 821,697,297.15 | | Less: 2024 Annual Cash Dividend | 6,544,412.48 | | Actual Distributable Profits | 901,518,899.51 | - This semi-annual report is unaudited[5](index=5&type=chunk) - Forward-looking statements regarding future plans or projections in this report do not constitute a substantive commitment by the company to investors, who should maintain adequate risk awareness[8](index=8&type=chunk) - There is no non-operating occupation of funds by controlling shareholders or other related parties[9](index=9&type=chunk) - There are no instances of providing external guarantees in violation of prescribed decision-making procedures[9](index=9&type=chunk) [Section I Definitions](index=5&type=section&id=%E7%AC%AC%E4%B8%80%E8%8A%82%20%E9%87%8A%E4%B9%89) This section defines key terms and entities used in the report, including regulatory bodies, exchanges, company and subsidiary names, and specialized technical terms like float glass and TCO glass, clarifying the reporting period as January 1 to June 30, 2025 - Common terms such as CSRC, SSE, Group or Company or Yaopi Glass are defined[15](index=15&type=chunk) - Multiple subsidiary names are listed, including Shanghai Yaopi Architectural Glass Co., Ltd., and Tianjin Yaopi Glass Co., Ltd[15](index=15&type=chunk) - Professional technical terms such as TCO glass (Transparent Conductive Oxide substrate glass), CSP glass (Concentrated Solar Power glass), Auto-Low E glass (on-line coated low-emissivity automotive glass), and BIPV (Building Integrated Photovoltaics) are explained[15](index=15&type=chunk) - The reporting period refers to January 1, 2025, to June 30, 2025[15](index=15&type=chunk) [Section II Company Profile and Key Financial Indicators](index=6&type=section&id=%E7%AC%AC%E4%BA%8C%E8%8A%82%20%E5%85%AC%E5%8F%B8%E7%AE%80%E4%BB%8B%E5%92%8C%E4%B8%BB%E8%A6%81%E8%B4%A2%E5%8A%A1%E6%8C%87%E6%A0%87) This section provides the company's basic information, contact details, stock overview, and key accounting data and financial indicators for the first half of 2025, highlighting enhanced profitability due to optimized operating strategies, product structure adjustments, and reduced raw material prices, despite a slight decrease in operating revenue [Company Information](index=6&type=section&id=%E4%BA%8C%E3%80%81%E5%85%AC%E5%8F%B8%E4%BF%A1%E6%81%AF) The company's Chinese name is Shanghai Yaopi Glass Group Co., Ltd., abbreviated as Yaopi Glass, with Yin Jun as its legal representative, and its A-shares (600819) and B-shares (900918) are listed on the Shanghai Stock Exchange - The company's Chinese name is Shanghai Yaopi Glass Group Co., Ltd., abbreviated as Yaopi Glass[17](index=17&type=chunk) - The company's legal representative is Yin Jun[17](index=17&type=chunk) - The company's stock types include A-shares (stock code 600819) and B-shares (stock code 900918), both listed on the Shanghai Stock Exchange[21](index=21&type=chunk) [Key Accounting Data and Financial Indicators](index=7&type=section&id=%E4%B8%83%E3%80%81%E5%85%AC%E5%8F%B8%E4%B8%BB%E8%A6%81%E4%BC%9A%E8%AE%A1%E6%95%B0%E6%8D%AE%E5%92%8C%E8%B4%A2%E5%8A%A1%E6%8C%87%E6%A0%87) In the first half of 2025, the company's operating revenue decreased by 4.81% year-on-year, but total profit and net profit attributable to shareholders increased by 52.44% and 37.92% respectively, with improved basic earnings per share and weighted average return on net assets, driven by optimized operating strategies, product structure adjustments, refined management, and lower raw material prices Key Accounting Data for H1 2025 | Indicator | Current Period (Jan-Jun) | Prior Period | Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 2,617,934,265.73 | 2,750,117,861.12 | -4.81 | | Total Profit | 125,383,863.45 | 82,249,417.14 | 52.44 | | Net Profit Attributable to Shareholders | 86,366,014.84 | 62,621,744.88 | 37.92 | | Net Profit Attributable to Shareholders Excluding Non-Recurring Gains and Losses | 82,496,128.70 | 51,052,994.14 | 61.59 | | Net Cash Flow from Operating Activities | 163,468,448.64 | 267,039,683.92 | -38.78 | | Net Assets Attributable to Shareholders (End of Current Period) | 3,531,592,963.17 | 3,451,771,360.81 | 2.31 | | Total Assets (End of Current Period) | 8,358,918,225.52 | 7,978,369,008.10 | 4.77 | Key Financial Indicators for H1 2025 | Key Financial Indicator | Current Period (Jan-Jun) | Prior Period | Change (%) | | :--- | :--- | :--- | :--- | | Basic Earnings Per Share (RMB/share) | 0.09 | 0.07 | 28.57 | | Diluted Earnings Per Share (RMB/share) | 0.09 | 0.07 | 28.57 | | Basic Earnings Per Share Excluding Non-Recurring Gains and Losses (RMB/share) | 0.09 | 0.05 | 80.00 | | Weighted Average Return on Net Assets (%) | 2.47 | 1.84 | Increased by 0.63 percentage points | | Weighted Average Return on Net Assets Excluding Non-Recurring Gains and Losses (%) | 2.36 | 1.50 | Increased by 0.86 percentage points | - In the first half of 2025, the company continued to deepen its "upstream and downstream integration, product differentiation" operating strategy, optimizing product structure, actively expanding into high-value-added glass markets, strengthening internal refined management to improve production efficiency, and benefiting from favorable factors such as declining raw material prices, leading to an increase in gross profit margin for its main business and enhanced profitability[24](index=24&type=chunk) [Non-Recurring Gains and Losses and Amounts](index=7&type=section&id=%E4%B9%9D%E3%80%81%E9%9D%9E%E7%BB%8F%E5%B8%B8%E6%80%A7%E6%8D%9F%E7%9B%8A%E9%A1%B9%E7%9B%AE%E5%92%8C%E9%87%91%E9%A2%9D) During the reporting period, the company's total non-recurring gains and losses amounted to **RMB 3,869,886.14**, primarily including gains and losses from disposal of non-current assets, government subsidies recognized in current profit or loss, fair value changes and disposal gains/losses of financial assets and liabilities, and reversal of impairment provisions for accounts receivable Non-Recurring Gains and Losses for H1 2025 | Non-Recurring Gain/Loss Item | Amount (RMB) | | :--- | :--- | | Gains and losses from disposal of non-current assets | -1,478,634.20 | | Government subsidies recognized in current profit or loss | 1,108,384.05 | | Gains and losses from changes in fair value of financial assets and liabilities and disposal gains/losses, excluding hedging activities | 26,848.84 | | Reversal of impairment provisions for accounts receivable subject to separate impairment testing | 3,838,592.25 | | Other non-operating income and expenses apart from the above | -1,122,088.47 | | Less: Income tax impact | -725,613.35 | | Minority interest impact (after tax) | -771,170.32 | | **Total** | **3,869,886.14** | [Section III Management Discussion and Analysis](index=8&type=section&id=%E7%AC%AC%E4%B8%89%E8%8A%82%20%E7%AE%A1%E7%90%86%E5%B1%82%E8%AE%A8%E8%AE%BA%E4%B8%8E%E5%88%86%E6%9E%90) This section details the glass manufacturing industry's development, including market dynamics for float glass, architectural processed glass, and automotive processed glass, highlighting the company's "upstream and downstream integration, product differentiation" strategy, technological innovation, and refined management to enhance profitability, achieving RMB 2.618 billion in operating revenue and a 37.92% year-on-year increase in net profit attributable to shareholders, while also analyzing core competencies, asset-liability status, investment, and risks with corresponding strategies [Industry and Main Business Overview for the Reporting Period](index=8&type=section&id=%E4%B8%80%E3%80%81%E6%8A%A5%E5%91%8A%E6%9C%9F%E5%86%85%E5%85%AC%E5%8F%B8%E6%89%80%E5%B1%9E%E8%A1%8C%E4%B8%9A%E5%8F%8A%E4%B8%BB%E8%90%A5%E4%B8%9A%E5%8A%A1%E6%83%85%E5%86%B5%E8%AF%B4%E6%98%8E) The glass manufacturing industry is pursuing high-quality development and transformation, but sub-markets show divergence, with float glass facing worsening supply-demand and high inventory, architectural glass experiencing low demand due to real estate downturn, and automotive glass seeing overall growth, particularly in new energy vehicles, while the company focuses on float, architectural, and automotive glass through innovation and differentiation [Industry Development](index=8&type=section&id=%EF%BC%88%E4%B8%80%EF%BC%89%E8%A1%8C%E4%B8%9A%E5%8F%91%E5%B1%95%E6%83%85%E5%86%B5) In the first half of 2025, the float glass industry experienced worsening supply-demand, declining operating rates and output, yet increasing inventory; architectural processed glass demand remained low due to the real estate market downturn, with significantly reduced order days; while the automotive processed glass industry saw double-digit growth in production and sales, with new energy vehicles being a significant highlight, accounting for 44.3% of total sales - In the first half of 2025, float glass supply and demand deteriorated, prices declined, the average operating rate from January to May decreased by **8.58%** compared to the same period last year, and output decreased by **10%** year-on-year[30](index=30&type=chunk) - As of late June, float glass inventory reached **69.887 million weight cases**, an increase of **54.54%** from the end of last year and **16.82%** year-on-year[30](index=30&type=chunk) - In the first half of 2025, architectural glass demand declined year-on-year, with real estate completion area decreasing by **14.3%** year-on-year, and the average order days for deep processing enterprises being only **6.8 days**, a significant year-on-year decrease of **39.3%**[30](index=30&type=chunk) - In the first half of 2025, China's automobile production and sales both exceeded **15 million units** for the first time, achieving double-digit growth, with new energy vehicle production and sales reaching **6.968 million units** and **6.937 million units** respectively, increasing by **41.4%** and **40.3%** year-on-year, accounting for **44.3%** of total sales[31](index=31&type=chunk) [Company's Main Business](index=9&type=section&id=%EF%BC%88%E4%BA%8C%EF%BC%89%E5%85%AC%E5%8F%B8%E4%B8%BB%E8%A6%81%E4%B8%9A%E5%8A%A1) The company's main business involves the research, development, production, and sale of float glass, architectural processed glass, and automotive processed glass, continuously optimizing its product structure, expanding application scenarios, and consolidating its leading position through technological innovation, refined management, and resource integration - The company's main business is the research, development, production, and sale of float glass, architectural processed glass, and automotive processed glass[32](index=32&type=chunk) - The float glass segment operates **5** advanced high-end float glass production lines, with key differentiated products including high-quality automotive glass, on-line coated low-emissivity glass, TCO glass, and CSP glass, with a primary future direction being to support the development of the solar energy industry[32](index=32&type=chunk) - The architectural processed glass segment is a supplier of high-quality engineered architectural processed glass, focusing on energy-saving, energy-generating glass, off-line low-emissivity coated glass, BIPV, and other high-performance, energy-efficient, and environmentally friendly architectural processed glass, with products widely used in landmark buildings globally[32](index=32&type=chunk) - The automotive processed glass segment is committed to innovation-driven development, vigorously developing energy-saving, heatable, smart, and HUD display technology-linked coated automotive glass, large panoramic sunroof glass, etc., and is a high-quality supplier to renowned automakers such as SAIC Volkswagen, Geely, and BYD[33](index=33&type=chunk) [Operating Model](index=9&type=section&id=%EF%BC%88%E4%B8%89%EF%BC%89%E7%BB%8F%E8%90%A5%E6%A8%A1%E5%BC%8F) The company's production model primarily involves continuous, year-round operation for float glass and build-to-order for processed glass; sales are mainly direct and domestic; procurement is centrally managed by the headquarters' logistics department; and R&D is led by the Yaopi Glass Research Institute, focusing on product high-end, intelligent, and green development - Float glass production is characterized by continuous, year-round operation, with each production base scientifically formulating production plans; architectural processed glass and automotive processed glass primarily adopt a build-to-order production management model, supplemented by planned production[34](index=34&type=chunk) - The company's sales model is primarily direct sales, with a focus on domestic sales and supplementary export sales[34](index=34&type=chunk) - The company's headquarters logistics department formulates procurement policies, supplier policies, bidding strategies, etc., and conducts centralized bidding and pricing for procurement logistics[34](index=34&type=chunk) - The company's Yaopi Glass Research Institute serves as the main body for technological innovation and new product R&D, continuously conducting independent research and development focused on product high-end, intelligent, and green development[34](index=34&type=chunk) [Market Position](index=9&type=section&id=%EF%BC%88%E5%9B%9B%EF%BC%89%E5%B8%82%E5%9C%BA%E5%9C%B0%E4%BD%8D) The company is one of China's earliest listed glass manufacturers, with a full-产业链布局 covering float glass, architectural processed glass, and automotive processed glass, leveraging deep technical expertise, diversified products, and R&D talent, with many products recognized as "China Famous Brand Products" and "Shanghai Famous Brand Products," and holding a leading domestic position in high-end float glass and TCO glass - The company is one of China's earliest listed glass manufacturers and a representative high-quality glass producer in the country[35](index=35&type=chunk) - The company has formed a full industry chain layout covering float glass, architectural processed glass, and automotive processed glass, with float glass and architectural glass products recognized as "China Famous Brand Products" and "Shanghai Famous Brand Products"[35](index=35&type=chunk) - In 2024, the company was selected by China Curtain Wall Network as one of the Top Ten Preferred Brands for Architectural Glass in the 20th AL-Survey Architectural Doors, Windows, and Curtain Wall Industry Brand List for 2024-2025[35](index=35&type=chunk) - The company is one of the few domestic manufacturers capable of producing high-quality automotive-grade float glass and one of the few domestic companies capable of producing 2mm ultra-thin on-line coated Low-E glass[36](index=36&type=chunk) - The company's TCO glass production technology is in a leading position domestically, and its wholly-owned subsidiary Dalian Yaopi is China's earliest manufacturer to achieve commercial production of solar photovoltaic TCO glass[36](index=36&type=chunk) [Performance Drivers](index=10&type=section&id=%EF%BC%88%E4%BA%94%EF%BC%89%E4%B8%9A%E7%BB%A9%E9%A9%B1%E5%8A%A8%E5%9B%A0%E7%B4%A0) The company's performance is primarily driven by technological innovation, deep integration of its "upstream and downstream industry integration" strategy, active strengthening of its differentiated product matrix, and accelerated construction of a new quality productive force system centered on "technological innovation + green intelligent manufacturing," aiming to comprehensively solidify its core competitiveness in the high-end glass sector and enhance profitability - The company relies on the Yaopi Research Institute as an innovation engine, deeply integrating its "upstream and downstream industry integration" strategy, and actively strengthening its differentiated product matrix[37](index=37&type=chunk) - It continuously promotes product structure upgrades towards high-value-added and high-tech content, accelerating the construction of a new quality productive force system centered on "technological innovation + green intelligent manufacturing"[37](index=37&type=chunk) - This comprehensively solidifies the company's core competitiveness in the high-end glass sector and enhances its profitability[37](index=37&type=chunk) [Discussion and Analysis of Operating Performance](index=10&type=section&id=%E4%BA%8C%E3%80%81%E7%BB%8F%E8%90%A5%E6%83%85%E5%86%B5%E7%9A%84%E8%AE%A8%E8%AE%BA%E4%B8%8E%E5%88%86%E6%9E%90) In the first half of 2025, amidst a complex market environment, the company focused on "innovation breakthroughs" and product high-end, intelligent, and green development, achieving operating revenue of **RMB 2.618 billion**, total profit of **RMB 125 million**, and net profit attributable to shareholders of **RMB 86.366 million**, a year-on-year increase of **37.92%**, with all business segments making positive progress in quality and efficiency improvement, differentiated sales, and new energy market expansion - In the first half of 2025, the company achieved operating revenue of **RMB 2.618 billion**, net cash flow of **RMB 163 million**, total profit of **RMB 125 million**, a year-on-year increase of **52.44%**, and net profit attributable to shareholders of **RMB 86.366 million**, a year-on-year increase of **37.92%**[10](index=10&type=chunk) - The float glass segment focused on "quality and efficiency improvement," dynamically adjusting product structure, concentrating on high-value-added products, maintaining stable and high production, achieving significant cost reductions in main materials, and continuously improving operating performance[10](index=10&type=chunk) - In the solar energy sector, the company fully leveraged its first-mover advantage and technological leadership in TCO glass for cadmium telluride and perovskite thin-film solar power glass, maintaining stable sales and establishing strategic partnerships with leading companies[38](index=38&type=chunk) - The architectural processed glass segment continued to strengthen differentiated product sales, with BIPV products applied in multiple projects, and breakthroughs achieved in technical modifications for various differentiated products such as irregular and special-sized glass, enhancing risk resistance capabilities[38](index=38&type=chunk) - The automotive processed glass segment actively expanded new energy customers, with sales revenue of high-value-added products increasing year-on-year, and product structure optimization coupled with domestic material substitution leading to scientific cost reduction, further improving gross profit margin, and securing new business such as the German Audi door project[39](index=39&type=chunk)[40](index=40&type=chunk) - The Research Institute actively promoted its annual plan, continuously carried out multiple R&D efforts, conducted basic development for new Low-E products for Changshu Auto Glass's four-silver coating line, and developed several market-filling products such as silver-free series, super insulation series, and near-zero energy consumption series[41](index=41&type=chunk) [Analysis of Core Competitiveness for the Reporting Period](index=11&type=section&id=%E4%B8%89%E3%80%81%E6%8A%A5%E5%91%8A%E6%9C%9F%E5%86%85%E6%A0%B8%E5%BF%83%E7%AB%9E%E4%BA%89%E5%8A%9B%E5%88%86%E6%9E%90) The company's core competitiveness lies in its professional management and R&D teams, strong independent R&D and technological innovation capabilities, excellent corporate culture, good customer relationships, and sound corporate governance structure, all of which collectively drive its continuous development in the high-end glass sector and meet the diverse needs of global customers - The company emphasizes talent development, possessing a proactive, innovative management team and technical backbone with rich professional experience[42](index=42&type=chunk) - The company consistently prioritizes R&D investment in new technologies and products, actively promoting product upgrades and technological innovation based on absorbing and digesting international advanced technologies, and continuously developing new products and technologies with independent intellectual property rights[43](index=43&type=chunk) - The company adheres to the corporate philosophy of "always pursuing new goals" and the operating strategy of "customer-oriented, with refined management and differentiated competition as means"[43](index=43&type=chunk) - The company focuses on establishing good communication relationships with customers, comprehensively understanding customer needs, and providing comprehensive professional glass solutions, earning customer and market recognition for product quality, technical content, supply capability, and commercial reputation[43](index=43&type=chunk) - The company, based on a sound corporate governance structure and standardized management systems, continuously innovates its operating mechanisms and strictly controls operating risks, laying a solid foundation for its sustained and stable development[43](index=43&type=chunk) [Key Operating Performance for the Reporting Period](index=11&type=section&id=%E5%9B%9B%E3%80%81%E6%8A%A5%E5%91%8A%E6%9C%9F%E5%86%85%E4%B8%BB%E8%A6%81%E7%BB%8F%E8%90%A5%E6%83%85%E5%86%B5) This section analyzes the company's major financial statement item changes, asset-liability status, and investment activities during the reporting period, noting a significant decrease in financial expenses due to increased exchange gains and a decline in net cash flow from operating activities due to increased working capital occupation, alongside increased construction in progress investments and significant growth in short-term borrowings and non-current liabilities due within one year, while the company continues to advance multiple non-equity investment projects and holds a certain scale of financial assets measured at fair value [Analysis of Main Business](index=11&type=section&id=%28%E4%B8%80%29%20%E4%B8%BB%E8%90%A5%E4%B8%9A%E5%8A%A1%E5%88%86%E6%9E%90) During the reporting period, the company's operating revenue decreased by 4.81% year-on-year, but operating costs decreased by 8.44%, and financial expenses significantly reduced due to increased exchange gains; net cash flow from operating activities decreased by 38.78% due to increased working capital occupation, and net cash flows from investing and financing activities also experienced significant changes Analysis of Financial Statement Items | Item | Current Period Amount (RMB) | Prior Period Amount (RMB) | Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 2,617,934,265.73 | 2,750,117,861.12 | -4.81 | | Operating Cost | 2,124,681,721.45 | 2,320,573,590.05 | -8.44 | | Selling Expenses | 64,540,654.87 | 67,536,687.27 | -4.44 | | Administrative Expenses | 148,144,351.29 | 147,745,325.12 | 0.27 | | Financial Expenses | -7,695,008.27 | 13,245,123.37 | N/A | | R&D Expenses | 118,744,133.80 | 116,634,492.92 | 1.81 | | Net Cash Flow from Operating Activities | 163,468,448.64 | 267,039,683.92 | -38.78 | | Net Cash Flow from Investing Activities | -268,974,039.06 | -151,425,482.02 | N/A | | Net Cash Flow from Financing Activities | 188,905,298.57 | -85,373,648.31 | N/A | - The change in financial expenses is mainly due to an increase in exchange gains in the current period[45](index=45&type=chunk) - The change in net cash flow from operating activities is mainly due to an increase in working capital occupation in the current period compared to the prior period[45](index=45&type=chunk) - The change in net cash flow from investing activities is mainly due to increased investment expenditures in projects under construction in the current period[47](index=47&type=chunk) - The change in net cash flow from financing activities is mainly due to a net increase in interest-bearing liabilities in the current period compared to the prior period[47](index=47&type=chunk) [Analysis of Assets and Liabilities](index=12&type=section&id=%28%E4%B8%89%29%20%E8%B5%84%E4%BA%A7%E3%80%81%E8%B4%A0%E5%80%BA%E6%83%85%E5%86%B5%E5%88%86%E6%9E%90) At the end of the reporting period, the company's total assets were **RMB 8.359 billion**, an increase of 4.77% from the end of the previous year, with accounts receivable significantly decreasing by 67.18% and accounts receivable financing increasing by 41.51%, while construction in progress and right-of-use assets grew substantially due to project construction and new leases, and short-term borrowings and non-current liabilities due within one year significantly increased due to working capital and project funding needs Analysis of Changes in Assets and Liabilities | Item Name | End of Current Period (RMB) | Percentage of Total Assets at End of Current Period (%) | End of Prior Year (RMB) | Percentage of Total Assets at End of Prior Year (%) | Change from Prior Year End (%) | Explanation | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Notes Receivable | 38,053,251.59 | 0.46 | 115,961,428.29 | 1.45 | -67.18 | Strengthened bill management, decrease in bank acceptance bills included in notes receivable at period-end | | Accounts Receivable Financing | 477,762,889.97 | 5.72 | 337,625,013.56 | 4.23 | 41.51 | Strengthened bill management and collection management, increase in bank acceptance bills receivable at period-end | | Construction in Progress | 835,064,627.61 | 9.99 | 577,381,827.59 | 7.24 | 44.63 | Projects under construction at Tianjin Yaopi, Dalian Yaopi, Changshu Auto Glass, and Yizheng Auto Glass in current period, increasing period-end balance | | Right-of-Use Assets | 28,411,616.65 | 0.34 | 19,780,306.29 | 0.25 | 43.64 | New factory lease at Guilin Auto Glass in current period, increasing right-of-use assets | | Short-Term Borrowings | 398,974,812.63 | 4.77 | 283,812,186.30 | 3.56 | 40.58 | Increased working capital and project funding needs in current period | | Non-Current Liabilities Due Within One Year | 243,649,999.52 | 2.91 | 56,216,435.39 | 0.70 | 333.41 | Increase in long-term borrowings due within one year in current period | - The balance of overseas assets at the end of the period is **RMB 6,412,627.35**, accounting for **0.08%** of total assets[50](index=50&type=chunk) [Analysis of Investment Activities](index=13&type=section&id=%28%E5%9B%9B%29%20%E6%8A%95%E8%B5%84%E7%8A%B6%E5%86%B5%E5%88%86%E6%9E%90) The company had no significant equity investments during the reporting period but continued to advance multiple non-equity investment projects, primarily in automotive glass coating production lines, fire-resistant glass technical upgrades, bulletproof glass production lines, four-silver low-carbon high-tech special glass innovation demonstration lines, and float glass production line cold repair technical upgrades and energy-saving renovations, while also holding a certain scale of transactional financial assets and fund investments - The second phase project of Changshu Yaopi Automotive Glass Co., Ltd. (coating production line and front windshield pressing line) is under construction, with a total investment of **RMB 443.84 million**[52](index=52&type=chunk) - The tempered/laminated small sunroof and side window production line project of Yizheng Yaopi Automotive Glass Co., Ltd. is undergoing installation and commissioning, with an investment of **RMB 105 million**[52](index=52&type=chunk) - The high borosilicate fire-resistant glass technical upgrade project of Changshu Yaopi Special Glass Co., Ltd. is undergoing upgrade and renovation, with an investment of **RMB 81.7 million**[53](index=53&type=chunk) - The bulletproof glass project for special vehicles at Wuhan Yaopi Kangqiao Automotive Glass Co., Ltd. is under construction, with an investment of **RMB 34.17 million**[54](index=54&type=chunk) - The Shanghai Industrial Glass four-silver low-carbon high-tech special glass innovation demonstration line project is in preparation, with an investment of **RMB 284.22 million**[55](index=55&type=chunk) - The Tianjin Yaopi Glass Co., Ltd. production line cold repair technical upgrade project and the Tianjin Yaopi production line energy-saving upgrade and coating process renovation project are under construction[55](index=55&type=chunk) - The Dalian Yaopi melting furnace energy-saving upgrade and float glass production line automation renovation project is under construction, with a total investment of **RMB 288.3099 million**[55](index=55&type=chunk) Financial Assets Measured at Fair Value | Asset Category | Project Name | Period-End Amount (RMB) | Period-Beginning Amount (RMB) | | :--- | :--- | :--- | :--- | | Other | Transactional Financial Assets - Bank Wealth Management Products | 386,066,238.37 | 340,961,353.43 | | Other | Other Non-Current Financial Assets - Fund Investments | 25,247,528.25 | 25,445,455.23 | | Other | Accounts Receivable Financing | 477,762,889.97 | 337,625,013.56 | | **Total** | | **889,076,656.59** | **704,031,822.22** | [Other Disclosures](index=16&type=section&id=%E4%BA%94%E3%80%81%E5%85%B6%E4%BB%96%E6%8A%AB%E9%9C%B2%E4%BA%8B%E9%A1%B9) This section discloses the company's exposure to domestic and international economic volatility, raw material price fluctuations, intense market competition, customer credit risk, and environmental protection risks, along with corresponding mitigation strategies, while also detailing the company's ongoing "quality and efficiency improvement, value return" action plan, including deepening operating strategies, strengthening investor relations, implementing profit distribution, and shareholding increases by the controlling shareholder - The company faces domestic and international economic volatility, raw material price fluctuations, intense market competition, customer credit risk, and environmental protection risks[60](index=60&type=chunk)[61](index=61&type=chunk) - Risk mitigation strategies include increasing R&D investment, optimizing product structure, strengthening refined management, expanding markets, improving credit policies, and enhancing environmental protection efforts[60](index=60&type=chunk)[61](index=61&type=chunk)[62](index=62&type=chunk) - The company continues to deepen its "upstream and downstream integration, product differentiation" operating strategy, focusing on product high-end, intelligent, and green development, achieving good operating results, with net profit attributable to shareholders of **RMB 86.37 million** for January-June 2025, a year-on-year increase of **37.92%**[63](index=63&type=chunk) - The company highly values investor relations, strengthening communication through performance briefings, investor hotlines, the SSE E-interaction platform, and investor surveys[64](index=64&type=chunk) - The company actively practices the "investor-centric" development philosophy, completing **two** profit distributions in 2024 and **one** in July 2025[64](index=64&type=chunk) - The controlling shareholder, Shanghai Building Materials (Group) Co., Ltd., and its concerted action party, Hong Kong Haijian Industrial Co., Ltd., successfully completed their share increase plan, acquiring **9,357,400 A-shares** and **5,216,463 B-shares**[64](index=64&type=chunk) [Section IV Corporate Governance, Environment, and Society](index=18&type=section&id=%E7%AC%AC%E5%9B%9B%E8%8A%82%20%E5%85%AC%E5%8F%B8%E6%B2%BB%E7%90%86%E3%80%81%E7%8E%AF%E5%A2%83%E5%92%8C%E7%A4%BE%E4%BC%9A) This section discloses changes in the company's board of directors, including the election of Sun Dahai as an employee director, and reiterates the 2025 interim profit distribution plan to pay a cash dividend of RMB 0.28 per 10 shares, while confirming no equity incentive or employee stock ownership plans were implemented, and listing seven subsidiaries included in the environmental information disclosure list with details on how to access their environmental information [Changes in Directors and Senior Management](index=18&type=section&id=%E4%B8%80%E3%80%81%E5%85%AC%E5%8F%B8%E8%91%A3%E4%BA%8B%E3%80%81%E9%AB%98%E7%BA%A7%E7%AE%A1%E7%90%86%E4%BA%BA%E5%91%98%E5%8F%98%E5%8A%A8%E6%83%85%E5%86%B5) On June 13, 2025, the company's annual general meeting approved the revision of the Articles of Association and the cancellation of the supervisory board, with the board of directors adding one employee director, Sun Dahai, who was subsequently elected - On June 13, 2025, the company held its 2024 Annual General Meeting, which approved the "Proposal on Revising the Articles of Association and Proposing to Cancel the Supervisory Board"; according to the revised Articles of Association, the company's board of directors added **one** employee director[66](index=66&type=chunk) - Sun Dahai was elected as an employee director[66](index=66&type=chunk) [Profit Distribution or Capital Reserve Conversion Plan](index=18&type=section&id=%E4%BA%8C%E3%80%81%E5%88%A9%E6%B6%A6%E5%88%86%E9%85%8D%E6%88%96%E8%B5%84%E6%9C%AC%E5%85%AC%E7%A7%AF%E9%87%91%E8%BD%AC%E5%A2%9E%E9%A2%84%E6%A1%88) The company proposes a 2025 semi-annual cash dividend of RMB 0.28 per 10 shares (tax inclusive) to all shareholders, totaling **RMB 26,177,649.93**, representing 30.31% of the net profit attributable to listed company shareholders for the reporting period, with no capital reserve conversion to share capital or bonus shares planned for this period 2025 Semi-Annual Profit Distribution Plan | Indicator | Amount/Ratio | | :--- | :--- | | Distribution or Capitalization | No | | Dividend per 10 shares (RMB) (tax inclusive) | 0.28 | | Proposed Cash Dividend (tax inclusive) | 26,177,649.93 RMB | | Percentage of Net Profit Attributable to Shareholders for the Reporting Period | 30.31% | - No capital reserve conversion to share capital or bonus shares will be conducted in this reporting period[67](index=67&type=chunk) [Environmental Information of Listed Companies and Their Major Subsidiaries Included in the Environmental Information Disclosure List](index=19&type=section&id=%E5%9B%9B%E3%80%81%E7%BA%B3%E5%85%A5%E7%8E%AF%E5%A2%83%E4%BF%A1%E6%81%AF%E4%BE%9D%E6%B3%95%E6%8A%AB%E9%9C%B2%E4%BC%81%E4%B8%9A%E5%90%8D%E5%8D%95%E7%9A%84%E4%B8%8A%E5%B8%82%E5%85%AC%E5%8F%B8%E5%8F%8A%E5%85%B6%E4%B8%BB%E8%A6%81%E5%AD%90%E5%85%AC%E5%8F%B8%E7%9A%84%E7%8E%AF%E5%A2%83%E4%BF%A1%E6%81%AF%E6%83%85%E5%86%B5) The company has seven subsidiaries included in the environmental information disclosure list, such as Tianjin Yaopi Glass Co., Ltd. and Dalian Yaopi Glass Co., Ltd., with environmental information accessible through the Enterprise Environmental Information Disclosure System or the National Pollutant Discharge Permit Information Management Platform - The company has **seven** subsidiaries included in the environmental information disclosure list[69](index=69&type=chunk) - Subsidiaries included in the list are Tianjin Yaopi Glass Co., Ltd., Dalian Yaopi Glass Co., Ltd., Jiangsu Pilkington Yaopi Glass Co., Ltd., Changshu Special Glass Co., Ltd., Shanghai Yaopi Architectural Glass Co., Ltd., Shanghai Yaopi Engineering Glass Co., Ltd., and Tianjin Yaopi Engineering Glass Co., Ltd[69](index=69&type=chunk) - Environmental information can be queried through the Enterprise Environmental Information Disclosure System or the National Pollutant Discharge Permit Information Management Platform[69](index=69&type=chunk) [Section V Significant Matters](index=19&type=section&id=%E7%AC%AC%E4%BA%94%E8%8A%82%20%E9%87%8D%E8%A6%81%E4%BA%8B%E9%A1%B9) This section reports no significant abnormalities in the company's commitment fulfillment, fund occupation, unauthorized guarantees, audit, or bankruptcy reorganization, discloses two major litigation and arbitration cases, one of which has been settled with a payment of **USD 185,000** recorded as a provision, and the other still in the document disclosure phase with an unpredictable outcome, notes the company received a rectification order from the Shanghai Securities Regulatory Bureau for information disclosure issues and has completed rectification, confirms the company and its controlling shareholder and actual controller have good credit standing, and details significant related party transactions including sales and purchases of goods, technical services, equipment procurement, and creditor-debtor relationships with NSG UK ENTERPRISES LIMITED and its affiliates, Shanghai Building Materials and its subsidiaries, and Luanzhou Xiaochuan Glass Silica Sand Co., Ltd [Major Litigation and Arbitration Matters](index=20&type=section&id=%E4%B8%83%E3%80%81%E9%87%8D%E5%A4%A7%E8%AF%89%E8%AE%BC%E3%80%81%E4%BB%B2%E8%A3%81%E4%BA%8B%E9%A1%B9) As of June 30, 2025, the company is a defendant in two major outstanding litigation and arbitration cases totaling **USD 23.5693 million**, with one sales contract lawsuit settled in July 2025 requiring a **USD 185,000** payment recorded as a provision, and the other still in the document disclosure phase with an unpredictable outcome - As of June 30, 2025, the company is a defendant in two major outstanding litigation and arbitration cases with a total involved amount of **USD 23.5693 million**, equivalent to approximately **RMB 169.4258 million**[473](index=473&type=chunk) - Case one is a sales contract lawsuit involving tempered glass supply for a building in Texas, USA, with the plaintiff claiming **USD 14.5119 million**; a settlement was reached in July 2025, requiring the company to pay **USD 185,000** (approximately **RMB 1,324,341.00**) in settlement fees, which has been recorded as a provision[72](index=72&type=chunk)[73](index=73&type=chunk)[369](index=369&type=chunk) - Case two is a sales contract lawsuit (arbitration) involving tempered glass supply for a New Jersey project in the USA, with the client claiming **USD 9.0574 million**; both parties are currently in the document disclosure phase, and the outcome of the lawsuit is not yet predictable[73](index=73&type=chunk)[74](index=74&type=chunk) [Illegal Activities, Penalties, and Rectification of Listed Companies, Their Directors, Senior Management, Controlling Shareholders, and Actual Controllers](index=21&type=section&id=%E5%85%AB%E3%80%81%E4%B8%8A%E5%B8%82%E5%85%AC%E5%8F%B8%E5%8F%8A%E5%85%B6%E8%91%A3%E4%BA%8B%E3%80%81%E9%AB%98%E7%BA%A7%E7%AE%A1%E7%90%86%E4%BA%BA%E5%91%98%E3%80%81%E6%8E%A7%E8%82%A1%E8%82%A1%E4%B8%9C%E3%80%81%E5%AE%9E%E9%99%85%E6%8E%A7%E5%88%B6%E4%BA%BA%E6%B6%89%E5%AB%8C%E8%BF%9D%E6%B3%95%E8%BF%9D%E8%A7%84%E3%80%81%E5%8F%97%E5%88%B0%E5%A4%84%E7%BD%9A%E5%8F%8A%E6%95%B4%E6%94%B9%E6%83%85%E5%86%B5) On June 16, 2025, the company received a "Decision on Taking Corrective Measures Against Shanghai Yaopi Glass Group Co., Ltd." from the China Securities Regulatory Commission Shanghai Bureau, and has since completed the required rectifications within the specified timeframe - On June 16, 2025, the company received the "Decision on Taking Corrective Measures Against Shanghai Yaopi Glass Group Co., Ltd." (Hu Zheng Jian Jue [2025] No. 121) issued by the China Securities Regulatory Commission Shanghai Bureau on June 10, 2025[75](index=75&type=chunk) - The company has completed the relevant rectifications within the specified timeframe as required by the decision, and the rectification report has been submitted to the China Securities Regulatory Commission Shanghai Bureau[75](index=75&type=chunk) [Statement on the Integrity of the Company, Its Controlling Shareholder, and Actual Controller During the Reporting Period](index=21&type=section&id=%E4%B9%9D%E3%80%81%E6%8A%A5%E5%91%8A%E6%9C%9F%E5%86%85%E5%85%AC%E5%8F%B8%E5%8F%8A%E5%85%B6%E6%8E%A7%E8%82%A1%E8%82%A1%E4%B8%9C%E3%80%81%E5%AE%9E%E9%99%85%E6%8E%A7%E5%88%B6%E4%BA%BA%E8%AF%9A%E4%BF%A1%E7%8A%B6%E5%86%B5%E7%9A%84%E8%AF%B4%E6%98%8E) During the reporting period, the company, its controlling shareholder, and actual controller maintained good credit standing, with no instances of dishonesty, unfulfilled effective court judgments, or large overdue debts - During the reporting period, the company, its controlling shareholder, and actual controller had no instances of dishonesty, unfulfilled effective court judgments, or large overdue debts[76](index=76&type=chunk) [Significant Related Party Transactions](index=21&type=section&id=%E5%8D%81%E3%80%81%E9%87%8D%E5%A4%A7%E5%85%B3%E8%81%94%E4%BA%A4%E6%98%93) The company engages in transactions with NSG UK ENTERPRISES LIMITED and its affiliates, Shanghai Building Materials (Group) Co., Ltd. and its subsidiaries, and Luanzhou Xiaochuan Glass Silica Sand Co., Ltd., involving sales and purchases of goods, technical services, equipment procurement, and creditor-debtor relationships, notably with significant sales to NSG UK ENTERPRISES LIMITED and its affiliates, and an outstanding payable for industrial support funds from Shanghai Building Materials (Group) Co., Ltd [Related Party Transactions in Ordinary Operations](index=21&type=section&id=%28%E4%B8%80%29%20%E4%B8%8E%E6%97%A5%E5%B8%B8%E7%BB%8F%E8%90%A5%E7%9B%B8%E5%85%B3%E7%9A%84%E5%85%B3%E8%81%94%E4%BA%A4%E6%98%93) The company engages in ordinary operating related party transactions, including procurement of goods, acceptance of services, and sales of goods, with NSG UK ENTERPRISES LIMITED and its affiliates, Shanghai Building Materials (Group) Co., Ltd. and its subsidiaries, and Luanzhou Xiaochuan Glass Silica Sand Co., Ltd Procurement of Goods/Acceptance of Services (Unit: RMB 10,000) | Related Party | Transaction Content | Current Period Amount | 2025 Estimated Amount | | :--- | :--- | :--- | :--- | | NSG UK ENTERPRISES LIMITED and its Affiliates | Equipment Purchase Fee | 43.69 | 4,000.00 | | NSG UK ENTERPRISES LIMITED and its Affiliates | Procurement of Goods | 249.31 | 500.00 | | NSG UK ENTERPRISES LIMITED and its Affiliates | Technical Service Fee | - | 800.00 | | Luanzhou Xiaochuan Glass Silica Sand Co., Ltd. | Procurement of Raw Materials | 1,712.31 | 4,000.00 | Sales of Goods/Provision of Services (Unit: RMB 10,000) | Related Party | Related Transaction Content | Current Period Amount | Prior Period Amount | | :--- | :--- | :--- | :--- | | NSG UK ENTERPRISES LIMITED and its Affiliates | Sales of Goods | 14,968.32 | 12,158.99 | | Shanghai Building Materials (Group) Co., Ltd. and its Subsidiaries | Sales of Goods | 250.63 | - | [Related Party Creditor-Debtor Relationships](index=22&type=section&id=%28%E5%9B%9B%29%20%E5%85%B3%E8%81%94%E5%80%BA%E6%9D%83%E5%80%BA%E5%8A%A1%E5%BE%80%E6%9D%A5) The company has related party creditor-debtor relationships with Luanzhou Xiaochuan Glass Silica Sand Co., Ltd., NSG UK Enterprises Limited and its affiliates, Shanghai Building Materials (Group) Co., Ltd., and Shanghai Boji Intelligent Curtain Wall Co., Ltd., with Shanghai Building Materials (Group) Co., Ltd. providing **RMB 82.3 million** in industrial support funds to the company Related Party Creditor-Debtor Relationships (Unit: RMB 10,000) | Related Party | Related Party Relationship | Funds Provided to Related Party (Period-End Balance) | Funds Provided by Related Party to Listed Company (Period-End Balance) | | :--- | :--- | :--- | :--- | | Luanzhou Xiaochuan Glass Silica Sand Co., Ltd. | Associate Company | 538.25 | 519.26 | | NSG UK Enterprises Limited and its Affiliates | Associate Shareholder | 9,071.04 | 91.63 | | Shanghai Building Materials (Group) Co., Ltd. | Controlling Shareholder | - | 8,230.00 | | Shanghai Boji Intelligent Curtain Wall Co., Ltd. and its Subsidiaries | Controlling Subsidiary of Parent Company | 4.42 | 0 | - The creditor-debtor relationship with Shanghai Building Materials (Group) Co., Ltd. pertains to industrial support funds provided by them to the company[81](index=81&type=chunk) [Section VI Changes in Shares and Shareholder Information](index=23&type=section&id=%E7%AC%AC%E5%85%AD%E8%8A%82%20%E8%82%A1%E4%BB%BD%E5%8F%98%E5%8A%A8%E5%8F%8A%E8%82%A1%E4%B8%9C%E6%83%85%E5%86%B5) During the reporting period, the company's total share capital and structure remained unchanged, with **42,300** common shareholders at period-end, and Shanghai Building Materials (Group) Co., Ltd. as the controlling shareholder with **31.83%** ownership, followed by China Composites Group Co., Ltd. and NSG UK ENTERPRISES LIMITED as the second and third largest shareholders [Changes in Share Capital](index=23&type=section&id=%E4%B8%80%E3%80%81%E8%82%A1%E6%9C%AC%E5%8F%98%E5%8A%A8%E6%83%85%E5%86%B5) During the reporting period, there were no changes in the company's total share capital or share structure - During the reporting period, there were no changes in the company's total share capital or share structure[84](index=84&type=chunk) [Shareholder Information](index=24&type=section&id=%E4%BA%8C%E3%80%81%E8%82%A1%E4%B8%9C%E6%83%85%E5%86%B5) As of the end of the reporting period, the company had **42,300** common shareholders, with Shanghai Building Materials (Group) Co., Ltd. as the controlling shareholder holding **31.83%**, and China Composites Group Co., Ltd. and NSG UK ENTERPRISES LIMITED holding **10.74%** and **10.70%** respectively - Total number of common shareholders at the end of the reporting period: **42,300** households[86](index=86&type=chunk) Top Ten Shareholders' Shareholding at Period-End | Shareholder Name | Number of Shares Held at Period-End (shares) | Percentage (%) | Shareholder Nature | | :--- | :--- | :--- | :--- | | Shanghai Building Materials (Group) Co., Ltd. | 297,625,385 | 31.83 | State-owned Legal Person | | China Composites Group Co., Ltd. | 100,392,175 | 10.74 | State-owned Legal Person | | NSG UK ENTERPRISES LIMITED | 100,046,672 | 10.70 | Overseas Legal Person | | HAITONG INTERNATIONAL SECURITIES COMPANY LIMITED-ACCOUNT CLIENT | 23,992,017 | 2.57 | Other | | Hong Kong Haijian Industrial Co., Ltd. | 8,817,534 | 0.94 | Overseas Legal Person | | MORGAN STANLEY & CO.INTERNATIONAL PLC. | 7,854,663 | 0.84 | Overseas Legal Person | | Baoning Capital Co., Ltd. - Baoning Emerging Markets Small and Medium-sized Enterprise Fund (USA) | 5,741,300 | 0.61 | Overseas Legal Person | | Li Lizhen | 4,482,702 | 0.48 | Overseas Natural Person | | UBS AG | 2,849,511 | 0.30 | Overseas Legal Person | | Industrial and Commercial Bank of China Co., Ltd. - CSI Shanghai State-owned Enterprise ETF | 2,803,830 | 0.30 | Other | - Shanghai Building Materials (Group) Co., Ltd. and Hong Kong Haijian Industrial Co., Ltd. have an associated relationship, collectively holding **32.78%** of the company's total share capital[132](index=132&type=chunk) [Section VII Bond-Related Information](index=26&type=section&id=%E7%AC%AC%E4%B8%83%E8%8A%82%20%E5%80%BA%E5%88%B8%E7%9B%B8%E5%85%B3%E6%83%85%E5%86%B5) This section states that the company had no corporate bonds (including enterprise bonds) or non-financial enterprise debt financing instruments, nor any convertible corporate bonds during the reporting period - The company has no corporate bonds (including enterprise bonds) or non-financial enterprise debt financing instruments[91](index=91&type=chunk) - The company has no convertible corporate bonds[91](index=91&type=chunk) [Section VIII Financial Report](index=27&type=section&id=%E7%AC%AC%E5%85%AB%E8%8A%82%20%E8%B4%A2%E5%8A%A1%E6%8A%A5%E5%91%8A) This section comprises the company's unaudited consolidated and parent company financial statements for the first half of 2025, including the balance sheet, income statement, cash flow statement, and statement of changes in owners' equity, with detailed disclosures on the company's basic information, basis of financial statement preparation, significant accounting policies and estimates, taxation, notes to consolidated financial statement items, R&D expenditures, changes in consolidation scope, equity in other entities, government grants, financial instrument risks, fair value disclosures, related parties and related party transactions, commitments and contingencies, post-balance sheet events, and supplementary information [Audit Report](index=27&type=section&id=%E4%B8%80%E3%80%81%E5%AE%A1%E8%AE%A1%E6%8A%A5%E5%91%8A) This semi-annual report is unaudited - This semi-annual report is unaudited[5](index=5&type=chunk)[93](index=93&type=chunk) [Financial Statements](index=27&type=section&id=%E4%BA%8C%E3%80%81%E8%B4%A2%E5%8A%A1%E6%8A%A5%E8%A1%A8) This section presents the company's consolidated and parent company balance sheets, income statements, cash flow statements, and statements of changes in owners' equity for the first half of 2025, comprehensively illustrating the financial position, operating results, and cash flows at the end of the reporting period [Consolidated Balance Sheet](index=27&type=section&id=%E5%90%88%E5%B9%B6%E8%B5%84%E4%BA%A7%E8%B4%9F%E5%80%BA%E8%A1%A8) As of June 30, 2025, the company's consolidated total assets were **RMB 8.359 billion**, a 4.77% increase from the beginning of the period, with total current assets of **RMB 3.862 billion** and total non-current assets of **RMB 4.497 billion**, while total liabilities amounted to **RMB 3.627 billion** and total owners' equity was **RMB 4.732 billion** Key Data from Consolidated Balance Sheet | Item | June 30, 2025 (RMB) | December 31, 2024 (RMB) | | :--- | :--- | :--- | | Cash and Bank Balances | 736,804,384.21 | 725,079,932.88 | | Transactional Financial Assets | 386,066,238.37 | 340,961,353.43 | | Notes Receivable | 38,053,251.59 | 115,961,428.29 | | Accounts Receivable | 774,917,107.73 | 748,074,406.38 | | Accounts Receivable Financing | 477,762,889.97 | 337,625,013.56 | | Inventories | 1,356,747,437.78 | 1,255,025,526.95 | | Fixed Assets | 2,873,508,550.97 | 3,069,886,248.95 | | Construction in Progress | 835,064,627.61 | 577,381,827.59 | | Short-Term Borrowings | 398,974,812.63 | 283,812,186.30 | | Notes Payable | 867,428,298.87 | 824,259,451.60 | | Accounts Payable | 1,011,049,467.20 | 948,363,711.33 | | Contract Liabilities | 144,587,731.46 | 135,472,238.10 | | Non-Current Liabilities Due Within One Year | 243,649,999.52 | 56,216,435.39 | | Total Owners' Equity Attributable to Parent Company | 3,531,592,963.17 | 3,451,771,360.81 | | Minority Interests | 1,200,433,853.54 | 1,173,286,677.80 | | Total Assets | 8,358,918,225.52 | 7,978,369,008.10 | | Total Liabilities and Owners' Equity | 8,358,918,225.52 | 7,978,369,008.10 | [Consolidated Income Statement](index=31&type=section&id=%E5%90%88%E5%B9%B6%E5%88%A9%E6%B6%A6%E8%A1%A8) For January-June 2025, the company achieved total operating revenue of **RMB 2.618 billion**, a 4.81% year-on-year decrease, with total profit of **RMB 125 million**, a 52.44% year-on-year increase, and net profit attributable to parent company shareholders of **RMB 86.366 million**, a 37.92% year-on-year increase, resulting in basic earnings per share of **RMB 0.09** Key Data from Consolidated Income Statement | Item | H1 2025 (RMB) | H1 2024 (RMB) | | :--- | :--- | :--- | | I. Total Operating Revenue | 2,617,934,265.73 | 2,750,117,861.12 | | II. Total Operating Costs | 2,476,062,197.52 | 2,693,338,950.79 | | Including: Operating Costs | 2,124,681,721.45 | 2,320,573,590.05 | | Financial Expenses | -7,695,008.27 | 13,245,123.37 | | Add: Other Income | 31,504,308.10 | 36,188,712.51 | | Investment Income (Losses indicated by "－") | -1,399,035.75 | 3,383,039.70 | | III. Operating Profit (Losses indicated by "－") | 126,746,408.26 | 81,578,866.38 | | IV. Total Profit (Total losses indicated by "－") | 125,383,863.45 | 82,249,417.14 | | V. Net Profit (Net losses indicated by "－") | 113,513,190.58 | 71,623,129.55 | | Net Profit Attributable to Parent Company Shareholders | 86,366,014.84 | 62,621,744.88 | | Minority Interest Income | 27,147,175.74 | 9,001,384.67 | | VIII. Earnings Per Share: Basic Earnings Per Share (RMB/share) | 0.09 | 0.07 | [Consolidated Cash Flow Statement](index=35&type=section&id=%E5%90%88%E5%B9%B6%E7%8E%B0%E9%87%91%E6%B5%81%E9%87%8F%E8%A1%A8) For January-June 2025, the company's net cash flow from operating activities was **RMB 163 million**, a 38.78% year-on-year decrease, while net cash flow from investing activities was **-RMB 269 million**, primarily due to increased investment expenditures in projects under construction, and net cash flow from financing activities was **RMB 189 million**, mainly due to a net increase in interest-bearing liabilities Key Data from Consolidated Cash Flow Statement | Item | H1 2025 (RMB) | H1 2024 (RMB) | | :--- | :--- | :--- | | Subtotal of Cash Inflows from Operating Activities | 2,922,446,323.63 | 3,145,732,860.65 | | Subtotal of Cash Outflows from Operating Activities | 2,758,977,874.99 | 2,878,693,176.73 | | Net Cash Flow from Operating Activities | 163,468,448.64 | 267,039,683.92 | | Subtotal of Cash Inflows from Investing Activities | 763,432,251.87 | 693,666,751.21 | | Subtotal of Cash Outflows from Investing Activities | 1,032,406,290.93 | 845,092,233.23 | | Net Cash Flow from Investing Activities | -268,974,039.06 | -151,425,482.02 | | Subtotal of Cash Inflows from Financing Activities | 390,312,079.91 | 537,828,352.51 | | Subtotal of Cash Outflows from Financing Activities | 201,406,781.34 | 623,202,000.82 | | Net Cash Flow from Financing Activities | 188,905,298.57 | -85,373,648.31 | | Net Increase in Cash and Cash Equivalents | 88,154,095.36 | 32,344,802.39 | [Company Basic Information](index=47&type=section&id=%E4%B8%89%E3%80%81%E5%85%AC%E5%8F%B8%E5%9F%BA%E6%9C%AC%E6%83%85%E5%86%B5) The company, established in 1983 and listed in 1993, has a registered capital of **RMB 934.9 million**, with its headquarters in China (Shanghai) Pilot Free Trade Zone, primarily engaged in the R&D, production, and sale of various glass products, and controlled by Shanghai Building Materials (Group) Co., Ltd. and ultimately by Shanghai Real Estate (Group) Co., Ltd - Shanghai Yaopi Glass Group Co., Ltd. was established on June 7, 1983, restructured and listed in September 1993, with A-shares listed on January 28, 1994, and B-shares listed on December 10, 1993[124](index=124&type=chunk) - The company's registered capital is **RMB 934,916,069.00**[124](index=124&type=chunk) - The company's registered and office address is Building 4-5, No. 1388 Zhangdong Road, China (Shanghai) Pilot Free Trade Zone[125](index=125&type=chunk) - The company's main business is the research, development, production, and sale of various float glass, rolled glass, automotive processed glass, architectural deep-processed glass, and other special glass series products, as well as the sale of self-produced products[126](index=126&type=chunk) - The company's largest shareholder is Shanghai Building Materials (Group) Co., Ltd., and the ultimate controlling party is Shanghai Real Estate (Group) Co., Ltd[127](index=127&type=chunk) [Basis of Financial Statement Preparation](index=47&type=section&id=%E5%9B%9B%E3%80%81%E8%B4%A2%E5%8A%A1%E6%8A%A5%E8%A1%A8%E7%9A%84%E7%BC%96%E5%88%B6%E5%9F%BA%E7%A1%80) The company's financial statements are prepared on a going concern basis, using the accrual basis of accounting, primarily measuring accounting elements at historical cost, while also employing replacement cost, net realizable value, present value, and fair value when the amounts of determined accounting elements can be obtained and reliably measured, affirming the company's good going concern ability - The company prepares its financial statements on a going concern basis and uses the accrual basis of accounting[129](index=129&type=chunk) - The company generally measures accounting elements at historical cost, and uses replacement cost, net realizable value, present value, and fair value when the amounts of determined accounting elements can be obtained and reliably measured[129](index=129&type=chunk) - Based on the company's assessment, its going concern ability is good for the **12 months** from the end of the reporting period, and there are no factors that would cause significant doubt about its ability to continue as a going concern in the current period[130](index=130&type=chunk) [Significant Accounting Policies and Estimates](index=47&type=section&id=%E4%BA%94%E3%80%81%E9%87%8D%E8%A6%81%E4%BC%9A%E8%AE%A1%E6%94%BF%E7%AD%96%E5%8F%8A%E4%BC%9A%E8%AE%A1%E4%BC%B0%E8%AE%A1) This section details the company's accounting policies and estimates for financial instruments, inventories, fixed assets, intangible assets, and other areas, including financial asset classification, impairment provision, inventory valuation, fixed asset depreciation, intangible asset amortization, R&D expenditure capitalization, long-term asset impairment, contract liabilities, employee compensation, provisions, revenue recognition, contract costs, government grants, deferred income tax, and leases, all in accordance with the materiality principle and subject to regular review of significant accounting judgments and estimates - The company classifies financial assets into three categories based on the business model for managing financial assets and the contractual cash flow characteristics of the financial assets: measured at amortized cost, measured at fair value through other comprehensive income, and measured at fair value through profit or loss[152](index=152&type=chunk) - The company performs impairment accounting and recognizes loss provisions for accounts receivable, lease receivables, loan commitments, and financial guarantee contracts based on expected credit losses[160](index=160&type=chunk) - Inventories are measured at the lower of cost and net realizable value; if the cost of inventory is higher than its net realizable value, an inventory impairment provision is made[181](index=181&type=chunk) - Fixed assets are depreciated using the straight-line method, with depreciation periods of **20-30 years** for buildings and structures, **5-15 years** for machinery and equipment, **5-10 years** for office and other equipment, and **5 years** for transportation equipment[199](index=199&type=chunk) - Intangible assets include land use rights, franchise fees, and software, which are amortized on a straight-line basis over their estimated useful lives[203](index=203&type=chunk)[204](index=204&type=chunk) - R&D expenditures are divided into research phase expenditures and development phase expenditures, with development phase expenditures recognized as intangible assets when specific conditions are met simultaneously[205](index=205&type=chunk) - The company recognizes revenue when performance obligations are satisfied at a point in time, specifically when products are delivered to the agreed-upon location according to the contract and accepted by the buyer[220](index=220&type=chunk) - In applying accounting policies, the company makes significant accounting judgments and estimates for the carrying amounts of financial instrument impairment, inventory impairment provisions, long-term asset impairment provisions, depreciation, and amortization, and conducts regular reviews[240](index=240&type=chunk)[241](index=241&type=chunk)[242](index=242&type=chunk)[243](index=243&type=chunk) [Taxation](index=71&type=section&id=%E5%85%AD%E3%80%81%E7%A8%8E%E9%A1%B9) The company's main taxes include Value-Added Tax, Urban Maintenance and Construction Tax, Education Surcharge, and Corporate Income Tax, with the company and several subsidiaries recognized as high-tech enterprises, enjoying a 15% corporate income tax preferential rate Main Tax Categories and Rates | Tax Category | Tax Base | Tax Rate | | :--- | :--- | :--- | | Value-Added Tax | Taxable Value Added | 13%, 9%, 6%, 0% | | Urban Maintenance and Construction Tax | VAT, Consumption Tax Payable | Paid according to company's location policy | | Education Surcharge | VAT, Consumption Tax Payable | Paid according to company's location policy | | Corporate Income Tax | Taxable Income | See table below | Subsidiaries Enjoying 15% Corporate Income Tax Preferential Rate | Company Name | Applicable Tax Rate (%) | | :--- | :--- | | Shanghai Yaopi Engineering Glass Co., Ltd. | 15 | | Tianjin Yaopi Engineering Glass Co., Ltd. | 15 | | Jiangmen Yaopi Engineering Glass Co., Ltd. | 15 | | Chongqing Yaopi Engineering Glass Co., Ltd. | 15 | | Tianjin Yaopi Glass Co., Ltd. | 15 | | Shanghai Yaopi Kangqiao Automotive Glass Co., Ltd. | 15 | | Wuhan Yaopi Kangqiao Automotive Glass Co., Ltd. | 15 | | Yizheng Yaopi Automotive Glass Co., Ltd. | 15 | | Changshu Yaopi Automotive Glass Co., Ltd. | 15 | | Tianjin Yaopi Automotive Glass Co., Ltd. | 15 | | Guilin Pilkington Safety Glass Co., Ltd. | 15 | [Notes to Consolidated Financial Statement Items](index=72&type=section&id=%E4%B8%83%E3%80%81%E5%90%88%E5%B9%B6%E8%B4%A2%E5%8A%A1%E6%8A%A5%E8%A1%A8%E9%A1%B9%E7%9B%AE%E6%B3%A8%E9%87%8A) This section provides detailed notes for major items in the consolidated financial statements, including cash and bank balances, transactional financial assets, notes receivable, accounts receivable, accounts receivable financing, inventories, construction in progress, fixed assets, intangible assets, goodwill, short-term borrowings, non-current liabilities due within one year, long-term borrowings, provisions, operating revenue and cost, financial expenses, investment income, asset impairment losses, and cash flows, highlighting increased investment in construction in progress, significant growth in short-term borrowings and non-current liabilities due within one year, and reduced financial expenses due to exchange gains - Cash and bank balances at period-end were **RMB 737 million**, of which restricted cash and bank balances were **RMB 188 million**, mainly comprising bank acceptance bill deposits, large-denomination certificates of deposit/time deposits, and other restricted funds[249](index=249&type=chunk) - Transactional financial assets at period-end were **RMB 386 million**, primarily floating-rate wealth management products[251](index=251&type=chunk) - Notes receivable at period-end were **RMB 38.0533 million**, a **67.18%** decrease from the beginning of the period[253](index=253&type=chunk) - Accounts receivable at period-end had a carrying value of **RMB 775 million**, with an impairment provision of **RMB 193 million**, including a **90%** impairment provision for Evergrande-related accounts receivable[262](index=262&type=chunk)[263](index=263&type=chunk) - Accounts receivable financing at period-end was **RMB 478 million**, a **41.51%** increase from the beginning of the period[273](index=273&type=chunk) - Inventories at period-end had a carrying value of **RMB 1.357 billion**, with an inventory impairment provision of **RMB 194 million**[293](index=293&type=chunk) - Construction in progress at period-end had a carrying value of **RMB 792 million**, a **37.73%** increase from the beginning of the period, mainly due to projects such as Changshu fire-resistant glass technical upgrade, Tianjin second line cold repair, and Dalian melting furnace energy-saving upgrade[312](index=312&type=chunk) - Goodwill at period-end had an original carrying value of **RMB 39.2323 million**, with an impairment provision of **RMB 16.328 million**, and an impairment provision of **RMB 1.8694 million** recognized in the current period, mainly due to non-core goodwill corresponding to deferred income tax liabilities arising from non-taxable mergers[322](index=322&type=chunk)[324](index=324&type=chunk) - Short-term borrowings at period-end were **RMB 399 million**, a **40.58%** increase from the beginning of the period, mainly comprising secured borrowings and credit borrowings[339](index=339&type=chunk) - Non-current liabilities due within one year at period-end were **RMB 244 million**, a **333.41%** increase from the beginning of the period, mainly due to long-term borrowings due within one year[359](index=359&type=chunk) - Long-term borrowings at period-end were **RMB 177 million**, a **35.49%** decrease from the beginning of the period, mainly comprising secured borrowings and credit borrowings[362](index=362&type=chunk) - Provisions at period-end were **RMB 1.3243 million**, representing settlement fees for pending litigation[368](index=368&type=chunk)[369](index=369&type=chunk) - Operating revenue was **RMB 2.618 billion**, including **RMB 858 million** from float glass, **RMB 922 million** from architectural processed glass, and **RMB 1.014 billion** from automotive processed glass[381](

华东建筑集团股份有限公司2025 年半年度报告 公司代码：600629 公司简称：华建集团 华东建筑集团股份有限公司 2025 年半年度报告 1 / 193 华东建筑集团股份有限公司2025 年半年度报告 重要提示 一、 本公司董事会、监事会及董事、监事、高级管理人员保证半年度报告内容的真实性、准确 性、完整性，不存在虚假记载、误导性陈述或重大遗漏，并承担个别和连带的法律责任。 二、 公司全体董事出席董事会会议。 三、 本半年度报告未经审计。 否 八、 是否存在违反规定决策程序对外提供担保的情况 否 九、 是否存在半数以上董事无法保证公司所披露半年度报告的真实性、准确性和完整性 否 四、 公司负责人顾伟华、主管会计工作负责人吴峰宇及会计机构负责人（会计主管人员）杨潇 声明：保证半年度报告中财务报告的真实、准确、完整。 五、 董事会决议通过的本报告期利润分配预案或公积金转增股本预案 无 六、 前瞻性陈述的风险声明 √适用 □不适用 本报告中涉及的未来计划、发展战略等前瞻性描述不构成公司对投资者的实质承诺，敬请投 资者注意投资风险。 七、 是否存在被控股股东及其他关联方非经营性占用资金情况 十、 重大风险提示 无 ...