杭州萤石网络股份有限公司2025 年半年度报告 杭州萤石网络股份有限公司 2025 年半年度报告 1 / 186 公司代码：688475 公司简称：萤石网络 杭州萤石网络股份有限公司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、 重大风险提示 报告期内，不存在对公司生产经营构成实质性影响的重大风险。公司已于本报告中详细描述了存 在的相关风险，详见"第三节管理层讨论与分析"中关于公司风险因素的相应内容。 三、 公司全体董事出席董事会会议。 四、 本半年度报告未经审计。 五、 公司负责人蒋海青、主管会计工作负责人郭航标及会计机构负责人（会计主管人员）郑威 海声明：保证半年度报告中财务报告的真实、准确、完整。 六、 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 不适用 七、 是否存在公司治理特殊安排等重要事项 □适用 √不适用 八、 前瞻性陈述的风险声明 □适用 √不适用 √适用 □不适用 本报告所涉及的未来计划、发展战略等前瞻性描述，不构成公司对 ...

[Item 1 Important Notice, Table of Contents and Definitions](index=2&type=section&id=Item%201%20Important%20Notice%2C%20Table%20of%20Contents%20and%20Definitions) This section provides important disclaimers, the report's structure, and definitions of key terms for clarity [Important Notice](index=2&type=section&id=Important%20Notice) The Board of Directors, Supervisory Committee, and senior management ensure the truthfulness, accuracy, and completeness of this semi-annual report, bearing legal responsibility, while forward-looking statements do not constitute substantive commitments - The company's Board of Directors approved the 2025 semi-annual profit distribution plan, proposing a cash dividend of **CNY 9.25 (tax inclusive) per 10 shares** to all shareholders[5](index=5&type=chunk) - The company advises investors to pay attention to six major risks: industry policy risk, macroeconomic environment changes and downstream industry fluctuation risk, raw material price fluctuation risk, market competition risk, technology leakage risk, and accounts receivable risk[4](index=4&type=chunk) [Table of Contents and Definitions](index=3&type=section&id=Table%20of%20Contents%20and%20Definitions) This chapter outlines the report's structure and defines key terms, such as company abbreviation, reporting period, and main products, to facilitate understanding [Item 2 Company Profile and Key Financial Indicators](index=6&type=section&id=Item%202%20Company%20Profile%20and%20Key%20Financial%20Indicators) This section presents the company's fundamental information and a summary of its key financial performance during the reporting period [Company Profile](index=6&type=section&id=Company%20Profile) This chapter provides the company's basic information, including its stock ticker "YUHONG", stock code "002271", listing venue Shenzhen Stock Exchange, legal representative, and contact details [Key Accounting Data and Financial Indicators](index=7&type=section&id=Key%20Accounting%20Data%20and%20Financial%20Indicators) During the reporting period, the company's operating revenue and net profit attributable to shareholders both declined by 10.84% and 40.16% respectively, while net cash flow from operating activities significantly improved by 70.18% 2025 Semi-Annual Key Financial Indicators | Indicator | Current Reporting Period (CNY) | Prior Year Period (CNY) | YoY Change | | :--- | :--- | :--- | :--- | | Operating Revenue | 13,569,021,520.18 | 15,218,469,083.94 | -10.84% | | Net Profit Attributable to Shareholders | 564,438,410.91 | 943,244,314.04 | -40.16% | | Net Cash Flow from Operating Activities | -395,909,846.60 | -1,327,740,373.01 | 70.18% | | Basic Earnings Per Share (CNY/share) | 0.24 | 0.39 | -38.46% | | Weighted Average Return on Net Assets | 2.37% | 3.38% | -1.01% | | **Indicator** | **End of Current Reporting Period (CNY)** | **End of Prior Year (CNY)** | **YoY Change** | | Total Assets | 44,057,392,307.77 | 44,715,448,811.80 | -1.47% | | Net Assets Attributable to Shareholders | 22,777,018,162.43 | 24,934,259,584.77 | -8.65% | [Non-Recurring Gains and Losses and Amounts](index=8&type=section&id=Non-Recurring%20Gains%20and%20Losses%20and%20Amounts) The company's non-recurring gains and losses totaled **CNY 57.29 million** during the reporting period, primarily from government subsidies of **CNY 76.70 million** recognized in current profit, resulting in a net profit attributable to shareholders of **CNY 507 million** after deducting non-recurring items 2025 Semi-Annual Non-Recurring Gains and Losses | Item | Amount (CNY) | | :--- | :--- | | Non-Current Asset Disposal Gains/Losses | -3,017,452.72 | | Government Subsidies Recognized in Current Profit/Loss | 76,699,868.00 | | Fair Value Changes of Financial Assets/Liabilities | -5,631,978.59 | | Debt Restructuring Gains/Losses | 7,106,662.03 | | Other Non-Operating Income and Expenses | -2,724,776.59 | | **Total** | **57,292,927.61** | [Item 3 Management Discussion and Analysis](index=9&type=section&id=Item%203%20Management%20Discussion%20and%20Analysis) This section provides a comprehensive analysis of the company's operations, financial performance, and strategic initiatives during the reporting period [I. Principal Businesses Engaged in During the Reporting Period](index=9&type=section&id=I.%20Principal%20Businesses%20Engaged%20in%20During%20the%20Reporting%20Period) The company maintains high-quality, stable development, focusing on its dual core businesses of building waterproofing and mortar powder, while actively expanding into civil building materials, architectural coatings, and energy-saving insulation [Overview](index=9&type=section&id=Overview) The company prioritized risk control and high-quality, stable development, focusing on waterproofing and mortar powder as dual core businesses, while exploring overseas markets as a third growth curve - The company's strategy focuses on **waterproofing and mortar powder** as dual core businesses, actively exploring overseas markets as a third growth curve, aiming to become a global building materials system service provider[30](index=30&type=chunk)[31](index=31&type=chunk) - In the first half of 2025, combined revenue from **engineering and retail channels totaled CNY 11.41 billion**, accounting for **84.06% of total revenue**, indicating channel sales as the primary mode[32](index=32&type=chunk)[33](index=33&type=chunk) - Retail business was prioritized, achieving **CNY 5.06 billion in revenue** in the first half, representing **37.28% of total revenue**, with Civil Building Materials Group contributing **CNY 4.75 billion**, or **34.99%**[34](index=34&type=chunk) - The company accelerated its overseas expansion by establishing companies in multiple countries, advancing overseas production base construction (USA, Saudi Arabia, Canada, Malaysia), and pursuing mergers and acquisitions (Hong Kong, Chile) to broaden its international market presence[36](index=36&type=chunk) [Introduction to Company's Main Businesses](index=11&type=section&id=Introduction%20to%20Company's%20Main%20Businesses) The company's core business is waterproofing, extending into civil building materials, mortar powder, and architectural coatings, with retail business as a key development focus - The company has evolved into a building materials system service provider, with **waterproofing as its core business**, extending into diverse areas such as civil building materials, mortar powder, architectural coatings, and energy-saving insulation[38](index=38&type=chunk) Retail Business Key Data (First Half 2025) | Business Segment | Operating Revenue (CNY billion) | % of Company's Total Revenue | | :--- | :--- | :--- | | **Total Retail Business** | **5.06** | **37.28%** | | Of which: Civil Building Materials Group | 4.75 | 34.99% | - The company officially launched its B2C professional service brand "Yuhong", covering six major business segments including waterproofing repair and wall renovation, serving nearly **70,000 households** in the first half[46](index=46&type=chunk) - The former Mortar Powder Technology Group and DAW (China) were integrated to form the Coatings and Mortar Powder Technology Group, aiming to provide "one-stop supply" through resource integration and ecological synergy[50](index=50&type=chunk) [Sales Model](index=17&type=section&id=Sales%20Model) The company employs a multi-tiered marketing network combining direct sales and channel models, with channel sales becoming the primary approach - The company's sales model combines direct sales and channel models, with **channel sales (including engineering and retail) currently being the primary sales method**[54](index=54&type=chunk) - The engineering market is managed by provincial integrated companies, strategic centralized procurement divisions, and specialized domain companies, through partner development to strengthen regional market penetration[55](index=55&type=chunk) - Retail channels are managed by the Civil Building Materials Group, B2C service platform, and architectural coatings retail business segment, serving general consumers through a multi-faceted marketing network including home decoration companies, building material supermarkets, and e-commerce[55](index=55&type=chunk) [Industry Overview and Company's Industry Position](index=18&type=section&id=Industry%20Overview%20and%20Company's%20Industry%20Position) The Chinese building waterproofing industry is characterized by a fragmented market, but concentration is gradually increasing towards leading enterprises, with Oriental Yuhong holding a prominent position as an industry leader - The domestic building waterproofing industry is fragmented with low market concentration, but industry concentration is increasing year by year towards leading enterprises due to stricter regulations and higher demands from downstream customers[56](index=56&type=chunk) - As an industry leader, the company ranks among the top in terms of R&D capabilities, product competitiveness, application technology, sales model, and brand influence[57](index=57&type=chunk)[58](index=58&type=chunk) [II. Analysis of Core Competencies](index=19&type=section&id=II.%20Analysis%20of%20Core%20Competencies) The company's core competencies encompass strong brand recognition, leading R&D capabilities, strategic nationwide production capacity, significant cost advantages, a multi-tiered marketing network, comprehensive product categories, advanced application technology, and a commitment to shareholder returns - **Brand Advantage**: The company's "Oriental Yuhong" brand is a recognized premium brand in the building materials sector, complemented by a matrix of sub-brands including "Yuhong Waterproofing", "Huasha", and "DAW"[59](index=59&type=chunk) - **Product R&D Advantage**: The company is a national technology innovation demonstration enterprise, possessing R&D platforms such as the National Key Laboratory for Advanced Waterproofing Materials, and actively pursuing overseas intellectual property布局[60](index=60&type=chunk)[61](index=61&type=chunk)[62](index=62&type=chunk) - **Production Capacity Layout Advantage**: The company has established production, logistics, and R&D bases in major regions across the country, enabling coordinated nationwide production and delivery to reduce logistics costs[63](index=63&type=chunk) - **Cost Advantage**: Significant cost advantages are achieved through the introduction of advanced production lines, economies of scale, strategic cooperation with upstream suppliers, and upstream extension of the industrial chain (e.g., non-woven fabrics, emulsions)[64](index=64&type=chunk) - **Marketing Network Advantage**: A multi-tiered marketing network combining direct sales and channel sales (engineering, retail) has been established, with channel sales becoming the primary model, continuously empowering partner development[65](index=65&type=chunk) - **Shareholder Returns**: The company consistently prioritizes shareholder returns through sustained dividends and share repurchases (CNY 600 million in 2024) to enhance shareholder investment value[68](index=68&type=chunk) [III. Analysis of Main Businesses](index=23&type=section&id=III.%20Analysis%20of%20Main%20Businesses) During the reporting period, the company's operating revenue decreased by 10.84% to **CNY 13.57 billion** due to lower-than-expected market demand, with notable declines in waterproofing materials and engineering construction, while overseas business revenue grew by 42.16% Key Financial Data Year-over-Year Changes | Item | Current Reporting Period (CNY) | Prior Year Period (CNY) | YoY Change | Reason for Change | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue | 13,569,021,520.18 | 15,218,469,083.94 | -10.84% | Primarily due to lower-than-expected market demand | | Operating Cost | 10,122,454,071.97 | 10,771,707,300.44 | -6.03% | Primarily due to decrease in revenue | | Selling Expenses | 1,226,504,971.74 | 1,514,461,093.72 | -19.01% | Primarily due to reduction in employee compensation and promotional expenses | | Administrative Expenses | 769,688,406.70 | 919,425,391.05 | -16.29% | Primarily due to reduction in employee compensation and consulting fees | | Net Cash Flow from Operating Activities | -395,909,846.60 | -1,327,740,373.01 | 70.18% | Primarily due to a comprehensive impact including reduced cash paid for goods and services | | Net Cash Flow from Financing Activities | -991,127,478.08 | -2,153,295,436.89 | 53.97% | Primarily due to net increase in external financing | Operating Revenue Composition (by Channel) | Channel | Current Reporting Period Amount (CNY) | % of Operating Revenue | YoY Change | | :--- | :--- | :--- | :--- | | Retail Channel | 5,058,665,516.42 | 37.28% | -6.98% | | Engineering Channel | 6,347,151,777.48 | 46.78% | -5.26% | | Direct Sales Business | 2,035,915,442.83 | 15.00% | -28.01% | Operating Revenue Composition (by Region) | Region | Current Reporting Period Amount (CNY) | % of Operating Revenue | YoY Change | | :--- | :--- | :--- | :--- | | Mainland China | 12,992,911,535.56 | 95.75% | -12.29% | | Outside China | 576,109,984.62 | 4.25% | 42.16% | [V. Analysis of Assets and Liabilities](index=25&type=section&id=V.%20Analysis%20of%20Assets%20and%20Liabilities) As of the end of the reporting period, the company's total assets were **CNY 44.06 billion**, a slight decrease of 1.47% from the end of the previous year, with changes in asset structure including a 4.71% decrease in cash and cash equivalents and a 4.94% increase in accounts receivable Balance Sheet Major Item Changes | Item | Amount at End of Current Reporting Period (CNY) | % of Total Assets | Change in % from Prior Year End | Significant Change Explanation | | :--- | :--- | :--- | :--- | :--- | | Cash and Cash Equivalents | 5,074,625,075.72 | 11.52% | -4.71% | Primarily due to changes to meet operational needs | | Accounts Receivable | 9,408,638,907.17 | 21.36% | 4.94% | Primarily due to increase in normal performance receivables, consistent with business cycle | | Short-term Borrowings | 5,939,484,324.23 | 13.48% | 3.16% | Primarily to meet operational needs for market expansion | | Contract Liabilities | 2,638,368,456.84 | 5.99% | -2.20% | Normal changes due to business performance | | Receivables Financing | 368,808,653.02 | 0.84% | -2.50% | Primarily due to maturity and payment of bills | [VI. Analysis of Investment Status](index=27&type=section&id=VI.%20Analysis%20of%20Investment%20Status) During the reporting period, the company's investment amounted to **CNY 604 million**, a significant increase of 180.60% year-over-year, with major equity investments made through new establishments or capital increases across various sectors to expand business layout and enhance comprehensive competitiveness - The investment amount for the reporting period was **CNY 604 million**, a **180.60% year-over-year increase**[85](index=85&type=chunk) - The company made significant equity investments in multiple subsidiaries through new establishments and capital increases, including a **CNY 268 million** capital increase in Hong Kong Oriental Yuhong Investment Co., Ltd., a **CNY 200 million** capital increase in Oriental Yuhong Mortar Powder Technology Group Co., Ltd., and a **CNY 280 million** capital increase in JA Yuhong New Energy Power Development Co., Ltd[88](index=88&type=chunk)[90](index=90&type=chunk) [VIII. Analysis of Major Holding and Participating Companies](index=33&type=section&id=VIII.%20Analysis%20of%20Major%20Holding%20and%20Participating%20Companies) During the reporting period, several of the company's major subsidiaries achieved profitability, with Henan Oriental Yuhong, Oriental Yuhong Building Materials Co., Ltd., and Xuzhou Woniushan significantly contributing to the company's net profit Major Subsidiary Operating Performance (First Half 2025) | Company Name | Operating Revenue (CNY) | Net Profit (CNY) | | :--- | :--- | :--- | | Henan Oriental Yuhong Building Materials Co., Ltd. | 758,443,729.23 | 100,876,940.39 | | Oriental Yuhong Building Materials Co., Ltd. | 987,543,205.60 | 90,805,946.85 | | Xuzhou Woniushan New Waterproofing Materials Co., Ltd. | 480,919,455.92 | 83,950,609.16 | | Tangshan Oriental Yuhong Waterproofing Technology Co., Ltd. | 855,077,913.40 | 71,496,505.47 | | Tiandingfeng Holdings Co., Ltd. | 916,952,385.95 | 63,751,785.82 | | Oriental Yuhong Civil Building Materials Co., Ltd. | 4,757,113,214.43 | 133,663,784.89 | [X. Risks Faced by the Company and Countermeasures](index=34&type=section&id=X.%20Risks%20Faced%20by%20the%20Company%20and%20Countermeasures) The company faces key risks including industry policy, macroeconomic and downstream fluctuations, raw material price volatility, market competition, technology leakage, and accounts receivable, which it actively addresses through diversified business expansion, channel reform, procurement system improvements, technological innovation, brand building, and strict accounts receivable management - **Macroeconomic Environment and Downstream Industry Fluctuation Risk**: The company mitigates real estate market volatility by expanding into affordable housing, infrastructure, and other diverse business areas, developing retail and renovation markets, and exploring overseas markets[105](index=105&type=chunk)[106](index=106&type=chunk) - **Raw Material Price Fluctuation Risk**: The company controls costs through a mature procurement system, economies of scale, technological iteration, and upstream extension of the industrial chain (e.g., non-woven fabrics, emulsions)[106](index=106&type=chunk)[107](index=107&type=chunk) - **Accounts Receivable Risk**: The company prioritizes risk control, established a risk control center to assess client performance capabilities, and vigorously promotes full-staff, full-process accounts receivable management, while optimizing channel structure and increasing channel sales proportion to control the scale of new accounts receivable[109](index=109&type=chunk)[110](index=110&type=chunk) [Item 4 Corporate Governance, Environment and Society](index=39&type=section&id=Item%204%20Corporate%20Governance%2C%20Environment%20and%20Society) This section details the company's profit distribution plan, employee incentive programs, environmental disclosures, and social responsibility initiatives [Profit Distribution and Capital Reserve Conversion to Share Capital in This Reporting Period](index=39&type=section&id=Profit%20Distribution%20and%20Capital%20Reserve%20Conversion%20to%20Share%20Capital%20in%20This%20Reporting%20Period) The company proposed a 2025 semi-annual profit distribution plan to distribute a cash dividend of **CNY 9.25 (tax inclusive) per 10 shares**, totaling approximately **CNY 2.21 billion** in cash, with the total cash distribution (including share repurchases) accounting for 100% of the total profit distribution 2025 Semi-Annual Profit Distribution Plan | Item | Amount/Ratio | | :--- | :--- | | Dividend per 10 shares (CNY, tax inclusive) | 9.25 | | Cash Dividend Amount (CNY, tax inclusive) | 2,209,518,932.30 | | Cash Dividend Amount (via other means, e.g., repurchase) (CNY) | 599,909,104.17 | | Total Cash Dividend (including other means) (CNY) | 2,809,428,036.47 | | % of Total Profit Distribution from Total Cash Dividend | 100% | [Implementation of Company's Equity Incentive Plans, Employee Stock Ownership Plans or Other Employee Incentive Measures](index=39&type=section&id=Implementation%20of%20Company's%20Equity%20Incentive%20Plans%2C%20Employee%20Stock%20Ownership%20Plans%20or%20Other%20Employee%20Incentive%20Measures) During the reporting period, the company cancelled **9.07 million** stock options from the 2021 stock option incentive plan due to employee departures or unmet performance targets, while the 2021 employee stock ownership plan remains valid, with 938 employees holding 0.08% of company shares as of the reporting period end - The company cancelled **9.07 million** stock options from the 2021 stock option incentive plan that no longer met exercise conditions[120](index=120&type=chunk) - As of the end of the reporting period, the 2021 employee stock ownership plan had **938 remaining employees**, holding a total of **2 million shares**, accounting for **0.08%** of the company's total share capital[121](index=121&type=chunk)[123](index=123&type=chunk) [Environmental Information Disclosure](index=42&type=section&id=Environmental%20Information%20Disclosure) The company and its nine major subsidiaries are included in the list of enterprises required to disclose environmental information by law, demonstrating the company's transparency and compliance in environmental matters, with no environmental accidents occurring during the reporting period - The company and its **9 major subsidiaries** are included in the list of enterprises required to disclose environmental information by law, with **no environmental accidents** occurring during the reporting period[125](index=125&type=chunk) [Social Responsibility](index=42&type=section&id=Social%20Responsibility) The company actively fulfills its social responsibilities by continuously conducting the "Serving the Public, Rejecting Leakage" charity event, providing free leakage inspection and repair services to communities - The company has continuously carried out the "Serving the Public, Rejecting Leakage" charity event for **19 consecutive years**, providing free leakage inspection and repair services to communities[128](index=128&type=chunk) - The company actively participates in rural talent revitalization, providing professional training for rural construction craftsmen, and cares for special education groups, assisting people with disabilities in employment[129](index=129&type=chunk) [Item 5 Significant Matters](index=45&type=section&id=Item%205%20Significant%20Matters) This section covers significant related party transactions, major contracts and their performance, and other important developments during the reporting period [Significant Related Party Transactions](index=46&type=section&id=Significant%20Related%20Party%20Transactions) During the reporting period, the company engaged in ordinary course related party transactions with Beijing GeoEnviron Engineering & Technology Inc., controlled by the same ultimate controller, primarily involving material procurement and sales, with transaction amounts within the annual approved limits and fair pricing Related Party Transactions with Beijing GeoEnviron Engineering & Technology Inc. | Related Party Transaction Type | Amount Incurred in Current Period (CNY million) | Approved Transaction Limit (CNY million) | | :--- | :--- | :--- | | Sales of Goods/Provision of Services | 4.13 | 60.00 | | Procurement of Goods/Acceptance of Services | 282.64 | 710.00 | [Significant Contracts and Their Performance](index=48&type=section&id=Significant%20Contracts%20and%20Their%20Performance) This chapter primarily discloses the company's significant guarantee situations, with actual external guarantees totaling **CNY 47.53 million** and actual guarantees to subsidiaries totaling **CNY 6.05 billion** as of the reporting period end Company Guarantee Summary (As of End of Reporting Period) | Guarantee Type | Total Actual Guarantee Balance at End of Reporting Period (CNY million) | | :--- | :--- | | External Guarantees (excluding subsidiaries) | 47.53 | | Guarantees to Subsidiaries | 6,054.17 | | **Total Actual Guarantees** | **6,101.70** | | % of Total Actual Guarantees to Company's Net Assets | 26.79% | [Explanation of Other Significant Matters](index=62&type=section&id=Explanation%20of%20Other%20Significant%20Matters) The company disclosed the progress of several external investment projects for production, R&D, and headquarters bases, indicating continuous advancement and improvement of its nationwide production capacity layout - The Guangzhou Huadu Greater Bay Area Green Building Materials Industrial Park project has partially commenced production, while the International Green Building Materials Center project is still under construction[183](index=183&type=chunk) - The Jinan Tianqiao District Green Building Materials Production Base project is in the trial production phase[184](index=184&type=chunk)[185](index=185&type=chunk) - Parts of the production lines at the Wuhan Green Building Materials Production Base project have commenced operation[185](index=185&type=chunk) - Parts of the production lines at the Jiangxi Ji'an New Materials Industrial Park project have commenced operation, and relevant mining permits have been obtained for the associated mines[186](index=186&type=chunk)[187](index=187&type=chunk) [Item 6 Share Changes and Shareholder Information](index=65&type=section&id=Item%206%20Share%20Changes%20and%20Shareholder%20Information) This section details changes in the company's share capital and provides information on its shareholders during the reporting period [I. Share Change Information](index=65&type=section&id=I.%20Share%20Change%20Information) During the reporting period, the company's total share capital decreased from **2.44 billion shares** to **2.39 billion shares**, primarily due to the cancellation of **47,615,662 repurchased shares** and the annual unlocking of restricted shares held by senior executives - During the reporting period, the company's total share capital decreased by **47,615,662 shares**, with the total share capital after the change being **2,388,699,866 shares**[194](index=194&type=chunk) - The main reasons for the share change were: 1) annual unlocking of restricted shares held by senior executives; 2) the company completing the cancellation procedures for **47,615,662 repurchased shares**[194](index=194&type=chunk) - The company's 2024 share repurchase plan has been fully implemented, with a total transaction amount of approximately **CNY 600 million**, and all repurchased shares have been cancelled[195](index=195&type=chunk)[197](index=197&type=chunk) [III. Number of Shareholders and Shareholding Information](index=68&type=section&id=III.%20Number%20of%20Shareholders%20and%20Shareholding%20Information) As of the end of the reporting period, the company had **194,641 common shareholders**, with the controlling shareholder and actual controller, Li Weiguo, holding **22.22%** of shares, some of which are pledged - As of the end of the reporting period, the company had a total of **194,641 common shareholders**[202](index=202&type=chunk) Top Ten Shareholders' Shareholding Information | Shareholder Name | Shareholder Nature | Shareholding Ratio | Number of Shares Held at End of Reporting Period | Pledged/Marked/Frozen Status | | :--- | :--- | :--- | :--- | :--- | | Li Weiguo | Domestic Natural Person | 22.22% | 530,802,887 | Pledged 410,872,200 | | Hong Kong Securities Clearing Company Limited | Overseas Legal Person | 15.58% | 372,227,639 | Not Applicable | | Xu Limin | Domestic Natural Person | 3.03% | 72,269,250 | Not Applicable | | DH Capital USD Fund Management Co., Ltd. - DH Capital USD Fund II | Overseas Legal Person | 1.92% | 45,969,375 | Not Applicable | | Kuwait Investment Authority | Overseas Legal Person | 1.34% | 32,105,065 | Not Applicable | [Item 7 Bond-Related Information](index=72&type=section&id=Item%207%20Bond-Related%20Information) This section provides details on any bond-related matters during the reporting period [Bond-Related Information](index=72&type=section&id=Bond-Related%20Information) The company has no bond-related information to disclose for this reporting period - The company has **no bond-related information** for the reporting period[211](index=211&type=chunk) [Item 8 Financial Report](index=73&type=section&id=Item%208%20Financial%20Report) This section contains the company's unaudited semi-annual consolidated and parent company financial statements, providing a comprehensive overview of its financial position, operating results, and cash flows [Financial Statements](index=73&type=section&id=Financial%20Statements) This chapter presents the company's unaudited 2025 semi-annual consolidated and parent company financial statements, including the balance sheet, income statement, cash flow statement, and statement of changes in owners' equity, comprehensively reflecting the company's financial position at the end of the reporting period and its operating results and cash flows during the period Consolidated Balance Sheet Summary (June 30, 2025) | Item | Period-End Balance (CNY) | Period-Beginning Balance (CNY) | | :--- | :--- | :--- | | **Total Assets** | **44,057,392,307.77** | **44,715,448,811.80** | | Total Current Assets | 22,789,689,914.55 | 24,342,835,711.42 | | Total Non-Current Assets | 21,267,702,393.22 | 20,372,613,100.38 | | **Total Liabilities** | **20,950,159,133.12** | **19,401,434,047.07** | | Total Current Liabilities | 18,548,733,890.39 | 17,318,485,971.09 | | Total Non-Current Liabilities | 2,401,425,242.73 | 2,082,948,075.98 | | **Total Owners' Equity** | **23,107,233,174.65** | **25,314,014,764.73** | | Total Owners' Equity Attributable to Parent Company | 22,777,018,162.43 | 24,934,259,584.77 | Consolidated Income Statement Summary (First Half 2025) | Item | First Half 2025 (CNY) | First Half 2024 (CNY) | | :--- | :--- | :--- | | Total Operating Revenue | 13,569,021,520.18 | 15,218,469,083.94 | | Total Operating Costs | 12,561,168,756.32 | 13,739,602,438.91 | | Operating Profit | 796,143,105.46 | 1,292,047,217.39 | | Total Profit | 792,125,093.84 | 1,290,719,148.40 | | Net Profit | 547,138,492.69 | 930,416,762.83 | | Net Profit Attributable to Parent Company Shareholders | 564,438,410.91 | 943,244,314.04 | Consolidated Cash Flow Statement Summary (First Half 2025) | Item | First Half 2025 (CNY) | First Half 2024 (CNY) | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | -395,909,846.60 | -1,327,740,373.01 | | Net Cash Flow from Investing Activities | -844,114,549.68 | -776,219,442.43 | | Net Cash Flow from Financing Activities | -991,127,478.08 | -2,153,295,436.89 | | Net Increase in Cash and Cash Equivalents | -2,232,751,697.05 | -4,251,282,469.24 | [Notes to Consolidated Financial Statements](index=132&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) This chapter provides detailed explanations for each major item in the consolidated financial statements, including cash and cash equivalents, accounts receivable, inventories, fixed assets, construction in progress, goodwill, short-term borrowings, accounts payable, revenue, costs, and various expenses - Cash and cash equivalents at period-end totaled **CNY 5.08 billion**, of which **CNY 505 million** was restricted, primarily for deposits and frozen funds due to litigation[387](index=387&type=chunk) - Accounts receivable book balance at period-end was **CNY 12.18 billion**, with **CNY 2.77 billion** provided for bad debts, resulting in a book value of **CNY 9.41 billion**, including **CNY 2.47 billion** of accounts receivable for which bad debt provisions were individually recognized[404](index=404&type=chunk)[406](index=406&type=chunk) - New goodwill of **CNY 343 million** was added this period, primarily due to the acquisition of MAN CHEONG METALS AND BUILDING MATERIALS COMPANY LIMITED and other companies, bringing the period-end goodwill original book value to **CNY 704 million**[509](index=509&type=chunk)[511](index=511&type=chunk) - Short-term borrowings at period-end amounted to **CNY 5.94 billion**, an increase of **CNY 1.33 billion** from the beginning of the period, primarily consisting of pledged and guaranteed borrowings[527](index=527&type=chunk) [Item 9 Other Submitted Data](index=253&type=section&id=Item%209%20Other%20Submitted%20Data) This section includes additional data submitted by the company, such as investor relations activities [Registration Form for Investor Relations Activities During the Reporting Period](index=253&type=section&id=Registration%20Form%20for%20Investor%20Relations%20Activities%20During%20the%20Reporting%20Period) During the reporting period, the company engaged with numerous institutional investors, including Guotai Haitong Securities, China Merchants Fund, and Ruiyuan Fund, through various channels to discuss key operational issues - The company communicated with multiple institutional investors during the reporting period, discussing operating performance for **FY2024 and Q1 2025**[870](index=870&type=chunk)[872](index=872&type=chunk) - Investor concerns included: reasons for high cash dividends and their impact on operations, pressure from the actual controller's pledged equity, changes in gross profit margin, progress on property-for-debt disposal, development and integration of mortar powder and coatings businesses, civil building materials group operations, and overseas business expansion[870](index=870&type=chunk)[872](index=872&type=chunk)[873](index=873&type=chunk)

Part I [Important Notice, Table of Contents, and Definitions](index=2&type=section&id=Important%20Notice%2C%20Table%20of%20Contents%2C%20and%20Definitions) The Board ensures the report's accuracy and completeness, identifies key operational risks including foreign supplier dependence, price volatility, biosecurity, and raw material costs, with forward-looking statements not being commitments - The company faces major operational risks including: - **Reliance on foreign suppliers and their breeding technologies**: Global original breeding stock sources are controlled by a few foreign companies, posing supply interruption risks[6](index=6&type=chunk) - **Product price fluctuation risk**: Livestock and poultry product market prices frequently fluctuate due to supply and demand, potentially impacting performance adversely[7](index=7&type=chunk) - **Biosecurity risk**: Need to prevent outbreaks of internal livestock and poultry diseases and industry-wide large-scale epidemics[9](index=9&type=chunk) - **Raw material price change risk**: Feed costs account for a high proportion, and rising prices of major raw materials like corn and soybean meal will affect operating performance[10](index=10&type=chunk) - The Board approved the semi-annual profit distribution plan, proposing a cash dividend of **RMB 1.5 per 10 shares** (including tax) to all shareholders, with no bonus shares or capital reserve conversions[10](index=10&type=chunk) [Definitions](index=6&type=section&id=Definitions) This section defines key professional terms and company abbreviations, including entity names, industry-specific terminology like breeding stock generations, and regulatory acronyms, to facilitate investor understanding of the report Part II [Company Profile and Key Financial Indicators](index=7&type=section&id=Company%20Profile%20and%20Key%20Financial%20Indicators) This section provides basic company information, including stock abbreviation 'Yisheng Shares', stock code '002458', listed on the Shenzhen Stock Exchange, with Cao Jisheng as legal representative, and contact details for the Board Secretary and Securities Affairs Representative [Key Accounting Data and Financial Indicators](index=8&type=section&id=Key%20Accounting%20Data%20and%20Financial%20Indicators) During the reporting period, the company's operating revenue slightly decreased by 3.98% year-on-year, while net profit attributable to shareholders plummeted by 96.64%, and non-recurring net profit by 98.16%, with net cash flow from operating activities also down 35.49%, indicating severe deterioration in profitability despite maintaining revenue scale Key Financial Indicators for H1 2025 | Item | Current Period (RMB) | Prior Period (RMB) | YoY Change | | :--- | :--- | :--- | :--- | | Operating Revenue (RMB) | 1,321,093,246.83 | 1,375,847,156.30 | -3.98% | | Net Profit Attributable to Listed Company Shareholders (RMB) | 6,155,066.16 | 182,952,703.17 | -96.64% | | Net Profit Attributable to Listed Company Shareholders (Excluding Non-Recurring Gains/Losses) (RMB) | 3,367,422.62 | 183,182,859.34 | -98.16% | | Net Cash Flow from Operating Activities (RMB) | 142,619,740.02 | 221,081,629.60 | -35.49% | | Basic Earnings Per Share (RMB/share) | 0.01 | 0.17 | -94.12% | | Weighted Average Return on Net Assets | 0.14% | 4.16% | -4.02% | | Total Assets (RMB) | 7,554,529,850.40 | 7,498,646,295.38 | 0.75% | | Net Assets Attributable to Listed Company Shareholders (RMB) | 4,295,431,524.80 | 4,466,478,166.01 | -3.83% | [Non-Recurring Gains and Losses and Amounts](index=8&type=section&id=Non-Recurring%20Gains%20and%20Losses%20and%20Amounts) During the reporting period, the company's total non-recurring gains and losses amounted to **RMB 2.7876 million**, primarily from government subsidies, indicating a significant decline in core business profitability after excluding these items Non-Recurring Gains and Losses Items | Item | Amount (RMB) | | :--- | :--- | | Non-current asset disposal gains and losses | -643,148.32 | | Government subsidies recognized in current profit/loss | 2,923,110.19 | | Other non-operating income and expenses | 616,579.14 | | **Total** | **2,787,643.54** | Part III [Management Discussion and Analysis](index=10&type=section&id=Management%20Discussion%20and%20Analysis) During the reporting period, the company's performance was significantly impacted by a complex macro environment and low domestic broiler prices, leading to a slight loss in the chicken business despite increased chick sales due to sharply falling prices; however, a breakthrough in breeding stock supply from France secured domestic sources, while the strong swine breeding business with substantial year-on-year growth in sales and profit partially offset the chicken segment's decline - Facing interruptions in grandparent stock imports due to avian influenza in the US and New Zealand, the company successfully imported breeding stock from France, becoming an industry pioneer and accounting for nearly **60%** of China's total grandparent broiler breeding stock imports during the reporting period, undertaking the crucial responsibility of securing breeding sources[32](index=32&type=chunk)[33](index=33&type=chunk) - The company's performance showed divergence: the chicken business incurred a slight overall loss due to a significant year-on-year drop in commercial chick prices, while the swine breeding business saw substantial year-on-year increases in sales volume, revenue, and profit due to capacity release[34](index=34&type=chunk)[58](index=58&type=chunk) - The company plans to invest in constructing a **1 million parent stock broiler breeding farm** and a supporting feed mill in Datong, Shanxi, to expand parent stock breeding scale and enhance commercial chick supply capacity[34](index=34&type=chunk) [Company's Main Business, Products, and Industry Development](index=10&type=section&id=Company's%20Main%20Business%2C%20Products%2C%20and%20Industry%20Development) The company's main business spans five segments: broiler chickens, small broiler chickens, breeding pigs, agricultural and animal husbandry equipment, and dairy products, with core products being parent and commercial broiler chicks and breeding pigs; the broiler industry, as a grain-saving, cost-effective protein source, benefits from national food security and healthy eating trends, showing vast consumption potential, while the breeding pig industry sees continuous demand for high-quality breeding pigs with increasing scale and intensification - The company's main business segments include: - **Broiler Chickens**: Importing and raising grandparent and parent stock, selling parent and commercial chicks[34](index=34&type=chunk)[35](index=35&type=chunk) - **Small Broiler Chickens**: Independently developing 'Yisheng 909' breed[38](index=38&type=chunk) - **Swine Breeding**: Raising New Dan and New French breeding pigs, selling original and F1 breeding pigs[41](index=41&type=chunk) - **Agricultural and Animal Husbandry Equipment**: Producing and selling poultry and livestock farming equipment[45](index=45&type=chunk) - **Dairy Products**: Raising dairy cows, producing and selling pasteurized milk, fermented milk, etc[47](index=47&type=chunk) - The broiler industry offers advantages such as grain, land, and water saving, along with low-carbon environmental benefits, aligning with national food security and 'Healthy China 2030' strategies; China's poultry meat production growth is primarily driven by broiler meat, and despite a gap in per capita consumption compared to developed countries, there is significant growth potential[51](index=51&type=chunk)[52](index=52&type=chunk) [Company's Market Position](index=14&type=section&id=Company's%20Market%20Position) The company is a leading enterprise in China's broiler industry, with high-generation livestock and poultry breeding stock supply as its core competency, maintaining a leading position in grandparent broiler supply and being the largest seller of broiler chicks nationwide; in the small broiler segment, independently bred 'Yisheng 909' and 'Yisheng 817' create a differentiated market presence, while the swine breeding business, as a national core pig breeding farm, is gradually releasing capacity, and the company also leads in breeding source purification and serves as president of multiple industry associations - The company is the largest seller of broiler chicks in China and maintains a leading position in the grandparent broiler industry[55](index=55&type=chunk) - The independently bred 'Yisheng 909' and 'Yisheng 817' small broiler breeds have received national certification, establishing a differentiated market presence[56](index=56&type=chunk) - The company is a National Core Pig Breeding Farm, with swine breeding capacity gradually releasing since late 2023, poised to supply the market with high-quality, high-health dual-negative breeding pigs[56](index=56&type=chunk) [Analysis of Core Competencies](index=19&type=section&id=II.%20Analysis%20of%20Core%20Competencies) The company's core competency lies in its high-generation livestock and poultry breeding stock supply capability, with the broiler breeder segment boasting advantages in breed, quality, R&D, technical services, and management team, while the swine breeding segment has established significant strengths in disease prevention, R&D breeding, production management, modern pig housing, and large-scale breeds, backed by twenty-five years of extensive experience [Broiler Breeder Segment](index=19&type=section&id=Broiler%20Breeder%20Segment) The company's core advantages in the broiler breeder segment include: the introduced Lifeng new strain's excellent egg production and low feed-to-meat ratio; robust implementation of breeding source purification to ensure product quality; successful joint cultivation of the 'Yisheng 817' new breed with research institutes, strengthening technological support; a strong technical service team and comprehensive ISO quality management system; and a stable, experienced core management team - The 'Yisheng 817' small broiler matching line jointly developed by the company and Shandong Academy of Agricultural Sciences Poultry Research Institute has been approved by the National Livestock and Poultry Genetic Resources Committee, offering advantages such as low cost, thorough purification, good meat quality, and high survival rates[71](index=71&type=chunk) [Swine Breeding Segment](index=20&type=section&id=Swine%20Breeding%20Segment) Established in 2000, the company's original breeding pig farm is a national core pig breeding farm, with core advantages including a unique swine disease biosecurity control system, collaboration with top international breeding companies for whole-genome breeding to enhance genetic improvement, batch production management for efficiency, high-standard modern, automated, and intelligent pig housing, and large-scale new original breeding pig farms with rich breeding material to meet the needs of large-scale farms - The company's original breeding pig farm was certified as a National Core Pig Breeding Farm in **2013**, re-evaluated and approved in **2018** and **2023**, and collaborates with top international genetic breeding companies to maintain genetic progress in sync with global standards[74](index=74&type=chunk)[75](index=75&type=chunk)[76](index=76&type=chunk) [Analysis of Main Business Operations](index=21&type=section&id=III.%20Analysis%20of%20Main%20Business%20Operations) During the reporting period, the company's main business structure significantly shifted: chicken revenue, as the primary source, decreased by 16.48% year-on-year with a 20.23 percentage point drop in gross margin; conversely, pig revenue surged by 128.73%, increasing its share from 6.49% to 15.47% with a 20.04 percentage point rise in gross margin, becoming a key growth driver, while livestock equipment revenue also grew rapidly by 76.66%, and financial expenses significantly decreased by 55.19% due to increased deposit interest income Key Financial Data Year-on-Year Changes | Item | Current Period (RMB) | Prior Period (RMB) | YoY Change | Main Reason for Change | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue | 1,321,093,246.83 | 1,375,847,156.30 | -3.98% | - | | Operating Cost | 1,160,721,964.51 | 997,962,554.86 | 16.31% | - | | Financial Expenses | 7,569,030.19 | 16,892,325.56 | -55.19% | Increase in deposit interest income | | Net Cash Flow from Operating Activities | 142,619,740.02 | 221,081,629.60 | -35.49% | Decrease in commercial chick sales revenue | | Net Cash Flow from Investing Activities | -108,925,704.99 | -266,535,899.20 | 59.13% | Decrease in cash paid for long-term asset construction | | Net Cash Flow from Financing Activities | 16,307,883.83 | -315,193,591.84 | 105.17% | Increase in cash received from borrowings | | Net Increase in Cash and Cash Equivalents | 50,001,918.33 | -360,647,860.66 | 113.86% | Decrease in investment outflow and increase in financing inflow | Operating Revenue Composition and Gross Margin by Segment | Segment | Operating Revenue (RMB) | Share of Total Revenue | YoY Revenue Change | Gross Margin | YoY Gross Margin Change | | :--- | :--- | :--- | :--- | :--- | :--- | | Chicken Revenue | 1,006,458,317.82 | 76.18% | -16.48% | 9.78% | -20.23% | | Pig Revenue | 204,342,705.45 | 15.47% | 128.73% | 25.51% | 20.04% | | Livestock Equipment Revenue | 72,448,021.92 | 5.48% | 76.66% | 9.78% | -8.67% | [Analysis of Assets and Liabilities](index=23&type=section&id=V.%20Analysis%20of%20Assets%20and%20Liabilities) At the end of the reporting period, the company's total assets were **RMB 7.555 billion**, a slight 0.75% increase from the prior year-end; construction in progress significantly decreased by 91.72% due to transfers to fixed assets, while liabilities saw short-term borrowings increase by 20.33% mainly from bill financing, and long-term borrowings rose by 36.08% due to new bank loans Major Balance Sheet Item Changes | Item | Amount at Period End (RMB) | Share of Total Assets | Change from Prior Year-End | Main Reason for Change | | :--- | :--- | :--- | :--- | :--- | | Construction in Progress | 14,255,133.92 | 0.19% | -91.72% | Due to transfer of Shuangyashan Swine Breeding Project and Weifang Hatchery Phase II Project to fixed assets | | Short-term Borrowings | 2,199,284,966.85 | 29.11% | 20.33% | Due to increase in bill financing short-term borrowings | | Long-term Borrowings | 107,460,000.00 | 1.42% | 36.08% | Due to new bank long-term borrowings | - As of the end of the reporting period, the company had **RMB 516 million** in restricted assets, primarily comprising guarantees for bank acceptances and letters of credit, as well as discounted but unexpired notes receivable[86](index=86&type=chunk) [Analysis of Investment Status](index=24&type=section&id=VI.%20Analysis%20of%20Investment%20Status) The company's investment activities primarily revolved around the **RMB 1.139 billion** raised from a private placement in 2023; during the reporting period, idle raised funds were partially used to temporarily supplement working capital, and some investment projects were altered, converting the planned breeding pig farm project into two poultry farming projects to adapt to market changes and enhance capital efficiency, with some projects failing to meet expected benefits due to low market prices or capacity release cycles - In November **2023**, the company raised a net **RMB 1.139 billion** through a private placement; as of June 30, **2025**, **RMB 694 million** has been utilized, with **RMB 446 million** remaining unused[90](index=90&type=chunk)[93](index=93&type=chunk) - The company altered its original fundraising project, the '3,600 Sow Original Breeding Pig Farm and 100 Boar Station Project,' reallocating remaining funds to construct the 'Yunong Poultry Farm Project' and 'Xingtang Poultry Farm Project' to address the sluggish pig market and leverage its advantages in the broiler industry[98](index=98&type=chunk) - Some fundraising projects did not achieve expected benefits due to factors such as the 'Yunong Poultry Farm Project' being affected by lower commercial chick prices, and the 'Weifang Yisheng Poultry Breeding Co., Ltd. Hatchery Project' not fully releasing its capacity[96](index=96&type=chunk) [Analysis of Major Holding and Participating Companies](index=29&type=section&id=VIII.%20Analysis%20of%20Major%20Holding%20and%20Participating%20Companies) During the reporting period, key subsidiaries Shuangyashan Yisheng Swine Breeding Technology Co., Ltd. and Heilongjiang Liansheng Swine Breeding Co., Ltd. were profitable, with net profits of **RMB 26 million** and **RMB 22.99 million** respectively, while associate company Beidahuang Baoquanling Animal Husbandry Development Co., Ltd. incurred a net loss of **RMB 49.22 million**; the company also established Shanxi Yisheng Poultry Breeding Co., Ltd. and deregistered Hebei Yisheng Swine Breeding Co., Ltd Performance of Major Subsidiaries and Associate Companies | Company Name | Type | Operating Revenue (RMB) | Net Profit (RMB) | | :--- | :--- | :--- | :--- | | Shuangyashan Yisheng Swine Breeding Technology Co., Ltd. | Subsidiary | 114,277,038.96 | 26,001,352.62 | | Heilongjiang Liansheng Swine Breeding Co., Ltd. | Subsidiary | 150,902,480.18 | 22,988,595.25 | | Beidahuang Baoquanling Animal Husbandry Development Co., Ltd. | Associate Company | 519,048,268.41 | -49,222,448.88 | [Risks Faced by the Company and Countermeasures](index=30&type=section&id=X.%20Risks%20Faced%20by%20the%20Company%20and%20Countermeasures) The company identified four major risks and developed corresponding countermeasures: strengthening independent breeding with successful 'Yisheng 909' and 'Yisheng 817' new breeds to counter foreign supplier dependence; stabilizing customers through enhanced product quality and service against price fluctuations; establishing strict epidemic prevention management for biosecurity; and managing raw material price risks via pre-order contracts, increased procurement frequency, and strategic partnerships with large suppliers [Implementation of 'Quality and Return Enhancement' Action Plan](index=30&type=section&id=XII.%20Implementation%20of%20'Quality%20and%20Return%20Enhancement'%20Action%20Plan) To boost investor confidence, the company actively implemented its 'Quality and Return Enhancement' action plan by optimizing capacity layout to improve broiler chick and breeding pig supply, actively rewarding shareholders through **RMB 68.45 million** in share repurchases and a planned **RMB 163 million** semi-annual cash dividend, strengthening technological innovation with the successful 'Yisheng 817' new chicken breed, and enhancing investor relations management - During the reporting period, the company sold **320 million broiler chicks**, a **15.7%** year-on-year increase; total breeding pig sales reached **38,451 heads**, up **354.93%** year-on-year[107](index=107&type=chunk)[108](index=108&type=chunk) - The company actively rewarded shareholders, repurchasing **8.1815 million shares** totaling **RMB 68.4511 million** during the reporting period; since its listing, cumulative cash dividends have reached **RMB 1.529 billion** (excluding the proposed current dividend)[109](index=109&type=chunk)[110](index=110&type=chunk) Part IV [Corporate Governance, Environment, and Society](index=32&type=section&id=Corporate%20Governance%2C%20Environment%2C%20and%20Society) During the reporting period, the company adjusted some executive positions, appointing new Executive Vice President and Vice President, proposed a H1 2025 profit distribution plan of **RMB 1.5 per 10 shares** totaling approximately **RMB 163 million**, extended the 2022 employee stock ownership plan, and accrued the 2024 incentive fund according to the 'Incentive Fund Management Measures' H1 2025 Profit Distribution Plan | Item | Amount/Quantity | | :--- | :--- | | Cash dividend per 10 shares (RMB) (incl. tax) | 1.5 | | Cash dividend amount (RMB) (incl. tax) | 162,779,972.25 | | Cash dividend amount via share repurchase (RMB) | 68,451,095.50 | | **Total cash dividend (incl. other methods) (RMB)** | **231,231,067.75** | [Environmental and Social Responsibility](index=34&type=section&id=Environmental%20and%20Social%20Responsibility) The company actively fulfills social responsibility, continuously investing in public welfare and supporting rural revitalization by funding infrastructure improvements like village roads and electricity, while its technical experts, as members of the National Rural Revitalization Science and Technology Task Force, enhance the chicken industry in Xihe County, Gansu, through technological innovation and model optimization, having trained over a thousand technicians and farmers Part V [Significant Matters](index=35&type=section&id=Significant%20Matters) During the reporting period, the company's controlling shareholder, actual controller Cao Jisheng, and other directors and senior executives are strictly fulfilling various commitments made during refinancing, including share lock-ups, return enhancement measures, and avoidance of horizontal competition, with all commitments being normally performed [Significant Related Party Transactions](index=38&type=section&id=XI.%20Significant%20Related%20Party%20Transactions) During the reporting period, the company engaged in ordinary course related party transactions with associate company Baoquanling Animal Husbandry and its subsidiaries, including purchasing feed and chicken products, and selling parent stock chicks and hatching eggs, with total transaction value of **RMB 37.3875 million**, all within the annual estimated **RMB 100 million** limit and priced at fair market value Related Party Transactions with Baoquanling Animal Husbandry | Related Party Transaction Type | Transaction Content | Transaction Amount (RMB 10,000) | Approved Limit (RMB 10,000) | | :--- | :--- | :--- | :--- | | Purchase of Goods | Feed, chicken products | 2,533.84 | 6,000 | | Sale of Goods | Parent stock chicks, hatching eggs, etc | 1,204.91 | 4,000 | [Significant Contracts and Their Performance](index=39&type=section&id=XII.%20Significant%20Contracts%20and%20Their%20Performance) The company has a significant long-term lease contract for six breeding chicken farms and one hatchery in Tangshan, Hebei; additionally, the company provided substantial guarantees for subsidiaries and related parties, with the actual guarantee balance totaling **RMB 247 million** at the end of the reporting period, representing **5.76%** of the company's net assets - At the end of the reporting period, the company's total actual guarantees amounted to **RMB 247 million**, representing **5.76%** of its net assets, including **RMB 177 million** for subsidiary Shuangyashan Yisheng Swine Breeding Technology Co., Ltd. and **RMB 70 million** for related party Heilongjiang Beisanxia Breeding Co., Ltd[144](index=144&type=chunk)[145](index=145&type=chunk) Part VI [Share Changes and Shareholder Information](index=43&type=section&id=Share%20Changes%20and%20Shareholder%20Information) During the reporting period, the company's total share capital of **1,106,412,915 shares** remained unchanged; the company continued share repurchases, accumulating **8.1815 million shares** totaling **RMB 68.4511 million** in transactions, and as of the period end, the company held a cumulative **21.2131 million shares** from two rounds of repurchases, representing **1.92%** of total share capital - During the reporting period, the company cumulatively repurchased **8,181,500 shares** through centralized bidding under its second repurchase plan, representing **0.74%** of total share capital, with a total transaction value of **RMB 68,451,095.5**[154](index=154&type=chunk) [Number of Shareholders and Shareholding Status](index=44&type=section&id=III.%20Number%20of%20Shareholders%20and%20Shareholding%20Status) As of the end of the reporting period, the company had **48,001** common shareholders; controlling shareholder Cao Jisheng held **40.82%** of shares, with **208 million shares** pledged, and among the top ten shareholders, excluding the controlling shareholder, holdings were dispersed among institutional investors and natural persons Top Five Shareholders' Shareholding Status | Shareholder Name | Shareholding Percentage | Number of Shares Held | Pledged/Marked or Frozen Shares | | :--- | :--- | :--- | :--- | | Cao Jisheng | 40.82% | 451,599,044 | 208,355,000 | | Shenzhen Bisheng Private Securities Fund Management Co., Ltd. - Bisheng Niannian Sheng No. 1 Private Equity Fund | 3.37% | 37,282,907 | 0 | | Jinan Taihao Investment Partnership (Limited Partnership) | 3.10% | 34,246,575 | 0 | | Chi Handong | 2.52% | 27,913,480 | 0 | | Li Ling | 1.71% | 18,968,700 | 0 | Part VII [Bond-Related Information](index=47&type=section&id=Bond-Related%20Information) During the reporting period, the company had no bond-related information Part VIII [Financial Report](index=48&type=section&id=Financial%20Report) This semi-annual financial report is unaudited; as of June 30, **2025**, the financial statements show total assets of **RMB 7.555 billion**, total liabilities of **RMB 3.2 billion**, and equity attributable to parent company owners of **RMB 4.295 billion**, with H1 **2025** operating revenue of **RMB 1.321 billion**, net profit attributable to parent company of **RMB 6.1551 million**, and net cash flow from operating activities of **RMB 143 million** [Consolidated Balance Sheet](index=48&type=section&id=Consolidated%20Balance%20Sheet) As of the end of the reporting period, the company's total assets were **RMB 7.555 billion**, a 0.75% increase from the beginning of the period, including **RMB 1.765 billion** in monetary funds and **RMB 4.077 billion** in fixed assets; total liabilities were **RMB 3.2 billion**, up 7.70% from the beginning of the period, primarily driven by increased short-term borrowings, while equity attributable to parent company owners was **RMB 4.295 billion**, down 3.83% from the beginning of the period [Consolidated Income Statement](index=52&type=section&id=Consolidated%20Income%20Statement) In H1 **2025**, the company achieved total operating revenue of **RMB 1.321 billion**, a 3.98% year-on-year decrease; total operating costs were **RMB 1.313 billion**, a 13.00% year-on-year increase, leading to a sharp decline in operating profit to **RMB 4.89 million**, with net profit attributable to parent company shareholders ultimately plummeting by 96.64% to **RMB 6.1551 million** [Consolidated Cash Flow Statement](index=56&type=section&id=Consolidated%20Cash%20Flow%20Statement) During the reporting period, net cash flow from operating activities was **RMB 143 million**, a 35.49% year-on-year decrease primarily due to reduced cash received from goods sold; net cash outflow from investing activities was **RMB 109 million**, a significant 59.13% year-on-year reduction mainly due to less cash paid for long-term asset construction; net cash inflow from financing activities was **RMB 16 million**, compared to a net outflow of **RMB 315 million** in the prior year, primarily due to increased borrowings; period-end cash and cash equivalents totaled **RMB 1.259 billion** [Notes to Financial Statements](index=67&type=section&id=Notes%20to%20Financial%20Statements) The notes to financial statements detail the company's accounting policies, estimates, and the composition and changes of consolidated financial statement items, highlighting key information such as VAT and corporate income tax exemptions for core businesses, preferential income tax for some high-tech or small and micro subsidiaries, a significant receivable with a **100%** bad debt provision, **RMB 6.11 million** in impairment provisions for consumable biological assets in inventory, multiple construction-in-progress projects transferred to fixed assets this period, and related party transactions primarily involving purchase and sale with associate Beidahuang Baoquanling Animal Husbandry - The company's main businesses of breeding chicken and pig farming, and feed sales, enjoy VAT exemption tax benefits; income from livestock and poultry farming is exempt from corporate income tax[415](index=415&type=chunk) - Among accounts receivable, **RMB 9.46 million** from Xinjiang Kunlun Lvyuan Agricultural Technology Development (Group) Co., Ltd. has been **100%** provisioned for bad debt due to expected unrecoverability[435](index=435&type=chunk)[436](index=436&type=chunk) - During the reporting period, the company established Shanxi Yisheng Poultry Breeding Co., Ltd. and deregistered Hebei Yisheng Swine Breeding Co., Ltd[635](index=635&type=chunk)[636](index=636&type=chunk) Part IX [Other Submitted Data](index=149&type=section&id=Other%20Submitted%20Data) During the reporting period, the company actively engaged with investors through **6** reception activities, including on-site surveys, phone calls, and online platform interactions, primarily targeting institutional investors, with discussions covering the company's fundamentals, industry conditions, market trends, breeding stock import plans, and share repurchase progress

[Section 1 Important Notices, Table of Contents, and Definitions](index=2&type=section&id=Section%201%20Important%20Notices%2C%20Table%20of%20Contents%2C%20and%20Definitions) [Important Notices](index=2&type=section&id=Important%20Notices) The company's management guarantees the truthfulness, accuracy, and completeness of the semi-annual report and assumes legal responsibility - The Board of Directors, Supervisory Committee, and senior management guarantee the truthfulness, accuracy, and completeness of the semi-annual report's content and assume legal responsibility[3](index=3&type=chunk) - The company's responsible person, Cao Zhengguo, the person in charge of accounting, Cao Guiyun, and the head of the accounting department, Cao Guiyun, declare that the financial report in this semi-annual report is true, accurate, and complete[3](index=3&type=chunk) - The profit distribution plan approved by the Board of Directors is a cash dividend of **RMB 3 (tax included) for every 10 shares**, with no bonus shares or conversion of capital reserve[3](index=3&type=chunk) [Table of Contents](index=3&type=section&id=Table%20of%20Contents) This section lists the complete directory structure of the report, providing an overall framework for investors - The report is divided into eight main sections, covering aspects such as company operations, finance, governance, and significant events[5](index=5&type=chunk) [List of Reference Documents](index=4&type=section&id=List%20of%20Reference%20Documents) This section provides a list of reference documents for the semi-annual report, ensuring information is available for review - Reference documents include the semi-annual report text signed by the legal representative, financial statements, original information disclosure documents, and other materials[7](index=7&type=chunk) - All reference documents are kept at the company's Securities Affairs Department[8](index=8&type=chunk) [Definitions](index=5&type=section&id=Definitions) This section defines key terms used in the report to ensure clear understanding of its content - Defines the company and its main subsidiaries, such as Hong Kong Zhengdan, Zhenjiang Zhengdan, Suzhou Zhengdan, Singapore Zhengdan, and Malaysia Huadan[9](index=9&type=chunk) - Explains core product names, chemical formulas, and main uses, including Trimellitic Anhydride (TMA), Trioctyl Trimellitate (TOTM), Vinyl Toluene (VT), and Durene[9](index=9&type=chunk) - Clarifies industry-specific terms such as plasticizers, PVC, DOP, DBP, DINP, trimellitate plasticizers, DOTP, and DVB[9](index=9&type=chunk) [Section 2 Company Profile and Key Financial Indicators](index=6&type=section&id=Section%202%20Company%20Profile%20and%20Key%20Financial%20Indicators) [I. Company Profile](index=6&type=section&id=I.%20Company%20Profile) Jiangsu Zhengdan Chemical Industry Co, Ltd, stock ticker "Zhengdan股份" (300641), is listed on the Shenzhen Stock Exchange - Stock Ticker: Zhengdan股份, Stock Code: 300641, Listing Exchange: Shenzhen Stock Exchange[11](index=11&type=chunk) - The company's legal representative is Cao Zhengguo[11](index=11&type=chunk) [II. Contact Persons and Methods](index=6&type=section&id=II.%20Contact%20Persons%20and%20Methods) Contact information for the Board Secretary and Securities Affairs Representative is disclosed to facilitate investor communication - Board Secretary: Li Tiegang; Securities Affairs Representative: Chen Yalu[12](index=12&type=chunk) - Contact Phone: 0511-88059006; Email: stock@zhengdanchem.com[12](index=12&type=chunk) [III. Other Information](index=6&type=section&id=III.%20Other%20Information) No changes occurred in the company's registered address, office address, website, or information disclosure locations during the reporting period - The company's contact information, information disclosure and filing locations, and registration changes remained unchanged during the reporting period[13](index=13&type=chunk)[14](index=14&type=chunk)[15](index=15&type=chunk) [IV. Key Accounting Data and Financial Indicators](index=7&type=section&id=IV.%20Key%20Accounting%20Data%20and%20Financial%20Indicators) The company's operating revenue grew by 3.37%, while net profit attributable to shareholders surged by 120.35% Key Accounting Data and Financial Indicators (Current Period vs. Same Period Last Year) | Indicator | Current Period (RMB) | Same Period Last Year (RMB) | Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 1,428,744,599.17 | 1,382,165,930.21 | 3.37% | | Net Profit Attributable to Shareholders | 630,005,990.33 | 285,917,101.46 | 120.35% | | Net Profit Attributable to Shareholders (Excluding Non-recurring Items) | 622,959,391.54 | 284,215,216.11 | 119.19% | | Net Cash Flow from Operating Activities | 869,172,636.10 | 65,764,563.16 | 1,221.64% | | Basic Earnings Per Share (RMB/share) | 1.20 | 0.58 | 106.90% | | Diluted Earnings Per Share (RMB/share) | 1.18 | 0.58 | 103.45% | | Weighted Average Return on Equity | 20.39% | 16.50% | 3.89% | | **Period-End Indicators** | **End of Current Period (RMB)** | **End of Last Year (RMB)** | **Change (%)** | | Total Assets | 3,388,746,163.90 | 3,076,435,919.47 | 10.15% | | Net Assets Attributable to Shareholders | 3,273,491,486.68 | 2,799,876,256.30 | 16.92% | [V. Differences in Accounting Data under Domestic and Foreign Accounting Standards](index=7&type=section&id=V.%20Differences%20in%20Accounting%20Data%20under%20Domestic%20and%20Foreign%20Accounting%20Standards) There were no discrepancies in net profit or net assets between financial reports prepared under Chinese and international accounting standards - The company had no differences in accounting data under domestic and foreign accounting standards during the reporting period[17](index=17&type=chunk)[18](index=18&type=chunk) [VI. Non-recurring Profit and Loss Items and Amounts](index=7&type=section&id=VI.%20Non-recurring%20Profit%20and%20Loss%20Items%20and%20Amounts) Non-recurring profit and loss for the period totaled RMB 7.05 million, mainly from investment income and government grants Non-recurring Profit and Loss Items and Amounts | Item | Amount (RMB) | Description | | :--- | :--- | :--- | | Gains/Losses on Disposal of Non-current Assets | -168,261.49 | Loss on disposal of fixed assets | | Government Grants Included in Current Profit/Loss | 368,900.00 | Government grants related to income | | Fair Value Changes and Disposal Gains/Losses on Financial Assets/Liabilities Held by Non-financial Enterprises | 8,141,607.98 | Investment income from cash management of idle funds | | Other Non-operating Income and Expenses | -51,953.80 | | | Less: Income Tax Impact | 1,243,693.90 | | | **Total** | **7,046,598.79** | | [Section 3 Management Discussion and Analysis](index=9&type=section&id=Section%203%20Management%20Discussion%20and%20Analysis) [I. Principal Business Activities during the Reporting Period](index=9&type=section&id=I.%20Principal%20Business%20Activities%20during%20the%20Reporting%20Period) The company specializes in fine chemicals and high-end new materials, with core products including TMA, TOTM, and VT - The company is a high-tech enterprise in the specialty fine chemicals sector, dedicated to providing high-end environmentally friendly new material products[23](index=23&type=chunk) - Key products include Trimellitic Anhydride (TMA), Trioctyl Trimellitate (TOTM), Vinyl Toluene (VT), and Durene, holding leading positions in domestic and international markets[23](index=23&type=chunk)[34](index=34&type=chunk) - During the reporting period, TMA product prices gradually declined from a high point, but sales revenue from anhydride and ester products **increased by 24.34% year-on-year**, mainly due to higher average selling prices[25](index=25&type=chunk)[36](index=36&type=chunk) - The company's main business benefits from national policies promoting the transition of the fine chemical industry towards high-end and green development[31](index=31&type=chunk)[32](index=32&type=chunk)[33](index=33&type=chunk) [1. Overview of Principal Business](index=9&type=section&id=1.%20Overview%20of%20Principal%20Business) The company develops, produces, and sells high-performance new materials along the aromatics industrial chain to drive industry upgrades - The company's main business revolves around the aromatics industrial chain, focusing on R&D, production, and sales of high-performance, eco-friendly, and high-value-added new material products[23](index=23&type=chunk) - The company has a scale advantage in the production of products like Trimellitic Anhydride and Trioctyl Trimellitate, holding a leading position in domestic and international markets[23](index=23&type-chunk) - During the reporting period, the company's main business did not undergo significant changes[23](index=23&type=chunk) [2. Situation of Major Product Segments](index=9&type=section&id=2.%20Situation%20of%20Major%20Product%20Segments) Key products TMA and TOTM serve high-end applications, with TMA prices falling from a peak in the reporting period - TMA is primarily used in the production of eco-friendly plasticizers (TOTM), powder coating resins, polyamide-imide insulating varnishes, and high-grade lubricants[24](index=24&type=chunk)[25](index=25&type=chunk) - In 2024, overseas market demand for Chinese TMA increased significantly, leading to a sharp rise in product prices, which gradually fell from their peak during the reporting period[25](index=25&type=chunk) - As an eco-friendly plasticizer, TOTM has huge demand in the wire and cable, automotive, and medical industries, benefiting from national new infrastructure development[26](index=26&type=chunk)[27](index=27&type=chunk) - Durene is a key raw material for producing polyimide polymer (PI), which has wide applications in aerospace, electrical insulation, and other fields[29](index=29&type=chunk) [3. Company's Main Business Model](index=10&type=section&id=3.%20Company's%20Main%20Business%20Model) The company operates on a "factory-to-factory" model, organizing production based on orders, plans, and inventory levels - The company adopts a "factory-to-factory" operational model, purchasing raw materials and organizing production based on sales orders, plans, and inventory[30](index=30&type=chunk) - Procurement is mainly through direct supply, while sales are primarily directed at downstream manufacturers and some traders[30](index=30&type=chunk) - During the reporting period, the company's main business model did not undergo significant changes[30](index=30&type=chunk) [4. Analysis of the Company's Industry](index=10&type=section&id=4.%20Analysis%20of%20the%20Company's%20Industry) The fine chemical industry is transitioning towards high-end, green development, supported by national policies and safety standards - The company belongs to the fine chemical sub-sector, benefiting from national policies promoting the industry's transition to high-end and green development[31](index=31&type=chunk)[32](index=32&type=chunk)[33](index=33&type=chunk) - The implementation of the "Safety Management Specification for Fine Chemical Enterprises" has improved the intrinsic safety level of the industry[33](index=33&type=chunk) - Green finance policies provide financial support and guarantees for the green transformation of the fine chemical industry[33](index=33&type=chunk) [5. Company's Market Position](index=10&type=section&id=5.%20Company's%20Market%20Position) The company's main products hold leading positions in both domestic and international markets due to strong technical advantages - The company's main products hold leading positions in both domestic and international markets, with product competitiveness and market share at the forefront of the industry[34](index=34&type=chunk) - The company has established a strong brand image and reputation in its sub-sectors[34](index=34&type=chunk) [6. Key Performance Drivers](index=10&type=section&id=6.%20Key%20Performance%20Drivers) Revenue and net profit growth were primarily driven by increased sales prices and higher gross margins for anhydride and ester products Key Performance Drivers | Indicator | Current Period (RMB 10,000) | YoY Change (%) | Driving Factors | | :--- | :--- | :--- | :--- | | Operating Revenue | 142,874.46 | 3.37% | Increased average selling price of anhydride and ester products | | Sales Revenue of Anhydride and Ester Products | 126,270.30 | 24.34% | Average selling price increased compared to the same period last year | | Sales Revenue of High-Boiling Aromatic Products | 14,660.19 | Decrease | The company reduced the production and sales of by-product high-boiling aromatic solvents | | Net Profit Attributable to Shareholders | 63,000.60 | 120.35% | Prices of anhydride and ester products rose compared to the same period last year, leading to higher gross margins | [II. Core Competitiveness Analysis](index=11&type=section&id=II.%20Core%20Competitiveness%20Analysis) The company's core strengths lie in its technological leadership, industrial chain layout, management, and brand advantages - The company adheres to technological innovation, has been recognized as a high-tech enterprise and a "specialized, refined, unique, and new" enterprise in Jiangsu Province, and holds multiple core technologies and independent intellectual property rights[37](index=37&type=chunk) - The company extends its presence up and down the aromatics industrial chain, broadening raw material supply channels and developing more competitive products to effectively control costs and risks[39](index=39&type=chunk) - The company has established a modern scientific management system covering procurement, production, quality control, cost management, marketing, R&D, brand building, and safety and environmental protection[40](index=40&type=chunk) - The company's main products hold a dominant market position, and it has rapidly grown into a leading brand in the trioctyl trimellitate market segment[41](index=41&type=chunk) [1. Technological Leadership Advantage](index=11&type=section&id=1.%20Technological%20Leadership%20Advantage) The company is recognized as a high-tech enterprise and continues to innovate, holding multiple intellectual property honors - The company has been repeatedly recognized as a "High-Tech Enterprise" and is a "specialized, refined, unique, and new" enterprise in Jiangsu Province, as well as an intellectual property demonstration enterprise in China's petroleum and chemical industry[37](index=37&type=chunk) - The company's invention patent "A Method for Continuous Production of Trimellitic Anhydride" won the 25th China Patent Excellence Award[37](index=37&type=chunk) - The company will continue to increase R&D investment, focusing on enhancing its technological advantages in high-grade eco-friendly plasticizers like TOTM, TINTM, and TM810[38](index=38&type=chunk) [2. Industrial Chain Layout Advantage](index=11&type=section&id=2.%20Industrial%20Chain%20Layout%20Advantage) The company's strategic layout along the aromatics industrial chain enhances its cost control and risk management capabilities - Extending upstream in the industrial chain broadens the variety and supply channels of raw materials, improving the flexibility of the procurement system, enhancing bargaining power, and reducing production costs[39](index=39&type=chunk) - Extending downstream in the industrial chain facilitates the development of more competitive products, thereby increasing the company's profitability[39](index=39&type=chunk) - The procurement of multiple raw material varieties and a diverse product layout effectively mitigate the impact of price fluctuations, enhancing the company's risk resilience[39](index=39&type=chunk) [3. Management Advantage](index=11&type=section&id=3.%20Management%20Advantage) A modern scientific management system and a comprehensive internal control framework support the company's sustainable development - The company has established a modern scientific management system covering raw material procurement, production operations, quality control, cost management, marketing, new product development, brand building, and safety and environmental protection[40](index=40&type=chunk) - The company has a relatively complete internal control system, laying a solid foundation for its sustained and healthy development[40](index=40&type=chunk) [4. Brand Advantage](index=11&type=section&id=4.%20Brand%20Advantage) The company holds a dominant market position and has become a leading brand in the trioctyl trimellitate segment - The company's main products hold a dominant position in the market, and it has become a leading brand in the trioctyl trimellitate market segment[41](index=41&type=chunk) - The company has established a strong brand image and reputation through outstanding product quality, technical expertise, and service levels, fostering long-term stable partnerships with key enterprises in the industry[41](index=41&type=chunk) [III. Analysis of Main Business Operations](index=11&type=section&id=III.%20Analysis%20of%20Main%20Business%20Operations) Operating costs decreased by 33.14% due to reduced production, while financial expenses fell significantly due to exchange gains Key Financial Data YoY Changes | Indicator | Current Period (RMB) | Same Period Last Year (RMB) | YoY Change (%) | Reason for Change | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue | 1,428,744,599.17 | 1,382,165,930.21 | 3.37% | | | Operating Costs | 692,424,996.43 | 1,035,640,978.28 | -33.14% | Reduced production and sales of high-boiling aromatic products | | Financial Expenses | -42,339,877.23 | -10,601,030.28 | -299.39% | Increased exchange gains and interest income | | Income Tax Expense | 108,796,088.28 | 50,126,724.41 | 117.04% | Increased profits led to a corresponding increase in income tax expense | | R&D Investment | 44,927,534.61 | 38,267,628.29 | 17.40% | Increased investment due to new R&D projects in the reporting period | | Net Cash Flow from Operating Activities | 869,172,636.10 | 65,764,563.16 | 1,221.64% | Increased cash inflows and decreased outflows from operating activities | | Net Cash Flow from Investing Activities | -772,234,135.61 | -257,540,256.59 | -199.85% | Increased use of idle funds to purchase bank wealth management products | | Net Cash Flow from Financing Activities | -283,173,505.80 | -22,929,768.98 | -1,134.96% | Decreased cash inflows from financing activities and increased dividend payments | | Taxes and Surcharges | 14,942,513.89 | 4,926,568.80 | 203.30% | Increased VAT payments led to higher surcharges | | Investment Income | 3,867,860.35 | -1,273,270.61 | 403.77% | Increased income from wealth management products and decreased interest on discounted notes | | Fair Value Change Gains | 3,685,641.85 | 1,645,181.32 | 124.03% | Increased value of trading financial assets held at period-end | Products or Services Accounting for Over 10% of Revenue | Product/Service | Operating Revenue (RMB) | Operating Costs (RMB) | Gross Margin (%) | Revenue YoY Change (%) | Cost YoY Change (%) | Gross Margin YoY Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Anhydrides and Esters | 1,262,702,963.51 | 525,533,226.26 | 58.38% | 24.34% | -20.48% | 23.46% | | High-Boiling Aromatic Solvents | 146,601,946.58 | 153,569,226.91 | -4.75% | -57.97% | -57.49% | -1.20% | [IV. Analysis of Non-Main Business Operations](index=13&type=section&id=IV.%20Analysis%20of%20Non-Main%20Business%20Operations) Non-main business activities, primarily from financial asset gains, had a minor and non-sustainable impact on total profit Analysis of Non-Main Business Operations | Item | Amount (RMB) | % of Total Profit | Reason | Sustainability | | :--- | :--- | :--- | :--- | :--- | | Investment Income | 3,867,860.35 | 0.52% | Income from disposal of trading financial assets and interest on discounted notes | No | | Fair Value Change Gains | 3,685,641.85 | 0.50% | Fair value changes in trading financial assets | No | | Asset Impairment | -4,379,886.31 | -0.59% | Provision for inventory write-down | No | | Non-operating Income | 11,063.31 | 0.00% | Gain on disposal of non-current assets | No | | Non-operating Expenses | 231,278.60 | 0.03% | Loss on disposal of non-current assets | No | | Credit Impairment Loss | 592,541.97 | 0.08% | Reversal of bad debt provision for accounts receivable | No | [V. Analysis of Assets and Liabilities](index=13&type=section&id=V.%20Analysis%20of%20Assets%20and%20Liabilities) Total assets grew 10.15%, with a significant shift from cash to trading financial assets due to wealth management investments Significant Changes in Asset Composition | Item | End of Current Period (RMB) | % of Total Assets | End of Last Year (RMB) | % of Total Assets | Change in Proportion (%) | Reason for Significant Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Cash and Cash Equivalents | 1,194,540,929.30 | 35.25% | 1,352,387,139.84 | 43.96% | -8.71% | Increased purchase of wealth management products | | Accounts Receivable | 231,813,011.76 | 6.84% | 390,962,106.41 | 12.71% | -5.87% | Collection of payments | | Short-term Borrowings | 4,205,070.96 | 0.12% | 130,211,261.11 | 4.23% | -4.11% | Repayment of matured loans | | Trading Financial Assets | 743,685,641.85 | 21.95% | 0.00 | 0.00% | 21.95% | Increased purchase of wealth management products | - The company has no major overseas assets or restricted assets[50](index=50&type=chunk)[52](index=52&type=chunk) [1. Significant Changes in Asset Composition](index=13&type=section&id=1.%20Significant%20Changes%20in%20Asset%20Composition) Cash holdings decreased as funds were used to purchase wealth management products, leading to a rise in trading financial assets Significant Changes in Asset Composition | Item | End of Current Period (RMB) | % of Total Assets | End of Last Year (RMB) | % of Total Assets | Change in Proportion (%) | Reason for Significant Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Cash and Cash Equivalents | 1,194,540,929.30 | 35.25% | 1,352,387,139.84 | 43.96% | -8.71% | Increased purchase of wealth management products at period-end | | Accounts Receivable | 231,813,011.76 | 6.84% | 390,962,106.41 | 12.71% | -5.87% | Collection of payments | | Short-term Borrowings | 4,205,070.96 | 0.12% | 130,211,261.11 | 4.23% | -4.11% | Repayment of matured loans | | Trading Financial Assets | 743,685,641.85 | 21.95% | 0.00 | 0.00% | 21.95% | Increased purchase of wealth management products at period-end | [3. Assets and Liabilities Measured at Fair Value](index=13&type=section&id=3.%20Assets%20and%20Liabilities%20Measured%20at%20Fair%20Value) Financial assets measured at fair value totaled RMB 743.69 million, consisting entirely of trading financial assets Assets and Liabilities Measured at Fair Value | Item | Opening Balance (RMB) | Fair Value Change Gains/Losses (RMB) | Purchases during the Period (RMB) | Sales during the Period (RMB) | Closing Balance (RMB) | | :--- | :--- | :--- | :--- | :--- | :--- | | Trading Financial Assets | 0.00 | 3,685,641.85 | 2,750,000,000.00 | 2,010,000,000.00 | 743,685,641.85 | | Financial Liabilities | 0.00 | | | | 0.00 | [VI. Investment Analysis](index=14&type=section&id=VI.%20Investment%20Analysis) Total investment increased by 159.38% to RMB 2.79 billion, primarily in bank wealth management products and hedging derivatives Investment Amount during the Reporting Period | Indicator | Investment Amount (RMB) | Investment Amount Last Year (RMB) | Change (%) | | :--- | :--- | :--- | :--- | | Total Investment | 2,786,655,495.46 | 1,074,372,686.19 | 159.38% | Financial Assets Measured at Fair Value | Funding Source | Closing Balance (RMB) | | :--- | :--- | | Raised Funds | 90,000,000.00 | | Own Funds | 653,685,641.85 | | **Total** | **743,685,641.85** | - The company's overall utilization rate of raised funds is **86.59%**, with a cumulative investment of **RMB 876.28 million** in designated projects[57](index=57&type=chunk) - The "20,000 tons/year Vinyl Toluene Project" was terminated, and the remaining funds were redirected to the "15,000 tons/year High-Polymer Special Resin Monomer Series Project"[60](index=60&type=chunk)[63](index=63&type=chunk) - The company engaged in foreign exchange swap derivative investments for hedging purposes to mitigate currency risks, with a net gain of **RMB 0.39 million** after hedging[67](index=67&type=chunk) [1. Overall Situation](index=14&type=section&id=1.%20Overall%20Situation) The company's total investment for the reporting period was RMB 2.79 billion, a significant increase of 159.38% year-on-year Investment Amount during the Reporting Period | Indicator | Investment Amount (RMB) | Investment Amount Last Year (RMB) | Change (%) | | :--- | :--- | :--- | :--- | | Total Investment | 2,786,655,495.46 | 1,074,372,686.19 | 159.38% | [4. Financial Assets Measured at Fair Value](index=14&type=section&id=4.%20Financial%20Assets%20Measured%20at%20Fair%20Value) Financial assets measured at fair value totaled RMB 743.69 million, comprising bank wealth management products purchased with both raised and proprietary funds Financial Assets Measured at Fair Value | Funding Source | Closing Balance (RMB) | | :--- | :--- | | Raised Funds | 90,000,000.00 | | Own Funds | 653,685,641.85 | | **Total** | **743,685,641.85** | [5. Use of Raised Funds](index=15&type=section&id=5.%20Use%20of%20Raised%20Funds) The overall utilization rate of raised funds reached 86.59%, with some projects being altered due to market changes Overall Use of Raised Funds | Year of Fundraising | Method | Net Raised Funds (RMB 10,000) | Cumulative Used Funds (RMB 10,000) | Utilization Rate (%) | Funds with Changed Use (RMB 10,000) | | :--- | :--- | :--- | :--- | :--- | :--- | | 2017 | IPO | 69,881.91 | 60,998.89 | 87.29% | 15,610.11 | | 2021 | Convertible Bonds | 31,311.32 | 26,629.29 | 85.05% | 0 | | **Total** | | **101,193.23** | **87,628.18** | **86.59%** | **15,610.11** | - The "100,000 tons/year C9 Aromatic Hydrocarbon Efficient Extraction and Distillation Separation Project" and the "Engineering Technology R&D Center Construction Project" do not directly generate economic benefits[60](index=60&type=chunk) - The "20,000 tons/year Vinyl Toluene Project" was terminated, and the remaining raised funds were redirected to the "15,000 tons/year High-Polymer Special Resin Monomer Series Project"[60](index=60&type=chunk)[63](index=63&type=chunk) - The expected completion date for the "Comprehensive Utilization of Reaction Tail Gas for Nitrogen Production Project" has been adjusted to December 2025[61](index=61&type=chunk) [6. Entrusted Wealth Management, Derivative Investments, and Entrusted Loans](index=19&type=section&id=6.%20Entrusted%20Wealth%20Management%2C%20Derivative%20Investments%2C%20and%20Entrusted%20Loans) The company engaged in wealth management and hedging-purpose derivative investments, with no speculative activities or entrusted loans Overview of Entrusted Wealth Management during the Reporting Period | Type | Funding Source | Amount Incurred (RMB 10,000) | Outstanding Balance (RMB 10,000) | | :--- | :--- | :--- | :--- | | Bank Wealth Management Products | Raised Funds | 10,000 | 9,000 | | Bank Wealth Management Products | Own Funds | 72,000 | 65,000 | | **Total** | | **82,000** | **74,000** | Hedging-Purpose Derivative Investments during the Reporting Period | Derivative Type | Opening Amount (RMB 10,000) | Purchased Amount (RMB 10,000) | Sold Amount (RMB 10,000) | Closing Amount (RMB 10,000) | | :--- | :--- | :--- | :--- | :--- | | Foreign Exchange Swap | 0 | 66,100.16 | 66,100.16 | 0 | | **Total** | **0** | **66,100.16** | **66,100.16** | **0** | - The company's foreign exchange derivative transactions are primarily aimed at mitigating the risk of currency depreciation, with a net gain of **RMB 0.39 million** after hedging during the reporting period[67](index=67&type=chunk) - The company did not engage in speculative derivative investments or entrusted loans[69](index=69&type=chunk)[70](index=70&type=chunk) [VII. Sale of Major Assets and Equity](index=22&type=section&id=VII.%20Sale%20of%20Major%20Assets%20and%20Equity) No major assets or equity were sold during the reporting period - The company did not sell any major assets during the reporting period[71](index=71&type=chunk) - The company did not sell any major equity during the reporting period[72](index=72&type=chunk) [VIII. Analysis of Major Holding and Associated Companies](index=22&type=section&id=VIII.%20Analysis%20of%20Major%20Holding%20and%20Associated%20Companies) There was no disclosable information regarding major holding or associated companies during the reporting period - The company has no disclosable information on major holding and associated companies for the reporting period[72](index=72&type=chunk) [IX. Structured Entities Controlled by the Company](index=22&type=section&id=IX.%20Structured%20Entities%20Controlled%20by%20the%20Company) The company did not control any structured entities during the reporting period - The company did not have any controlled structured entities during the reporting period[73](index=73&type=chunk) [X. Risks Faced by the Company and Countermeasures](index=22&type=section&id=X.%20Risks%20Faced%20by%20the%20Company%20and%20Countermeasures) The company faces risks from macroeconomic fluctuations, raw material price volatility, and production management, with corresponding mitigation strategies - The company faces macroeconomic fluctuation risks and will closely monitor economic trends to adjust its business policies[73](index=73&type=chunk) - To mitigate raw material price volatility risk, the company will strengthen inventory management and establish long-term partnerships with suppliers[73](index=73&type=chunk)[74](index=74&type=chunk) - To address the risk of falling product prices, the company will continue to increase R&D investment, optimize production processes, and launch new products to maintain a competitive edge[74](index=74&type=chunk)[75](index=75&type=chunk) - Regarding production management risks, the company will adhere to sustainable development principles, increase investment in safety and environmental protection, and strengthen management in these areas[75](index=75&type=chunk) [XI. Record of Investor Relations Activities during the Reporting Period](index=23&type=section&id=XI.%20Record%20of%20Investor%20Relations%20Activities%20during%20the%20Reporting%20Period) The company held an online performance briefing for all investors on April 25, 2025 Record of Investor Relations Activities during the Reporting Period | Date | Location | Method | Type of Counterparty | Main Topics and Materials Provided | | :--- | :--- | :--- | :--- | :--- | | April 25, 2025 | Value Online (www.ir online.cn) | Online Platform | Other (All investors of the 2024 online performance briefing) | 2024 online performance briefing, covering the company's core competitiveness in the TMA industry, TMA product supply and pricing, and future profit growth drivers | [XII. Formulation and Implementation of Market Value Management System and Valuation Enhancement Plan](index=23&type=section&id=XII.%20Formulation%20and%20Implementation%20of%20Market%20Value%20Management%20System%20and%20Valuation%20Enhancement%20Plan) The company has established a market value management system to align its market value with intrinsic value - The company has formulated and approved a "Market Value Management System," incorporating it into its corporate governance framework[77](index=77&type=chunk) - The company aims to achieve a dynamic match between market value and intrinsic value through value creation, communication, and maintenance, thereby creating sustainable returns for shareholders[77](index=77&type=chunk) - The company has not disclosed a valuation enhancement plan[77](index=77&type=chunk) [XIII. Implementation of the "Dual Improvement in Quality and Returns" Action Plan](index=23&type=section&id=XIII.%20Implementation%20of%20the%20%22Dual%20Improvement%20in%20Quality%20and%20Returns%22%20Action%20Plan) No "Dual Improvement in Quality and Returns" action plan was disclosed during the reporting period - The company did not disclose a "Dual Improvement in Quality and Returns" action plan announcement during the reporting period[78](index=78&type=chunk) [Section 4 Corporate Governance, Environment, and Society](index=24&type=section&id=Section%204%20Corporate%20Governance%2C%20Environment%2C%20and%20Society) [I. Changes in Directors, Supervisors, and Senior Management](index=24&type=section&id=I.%20Changes%20in%20Directors%2C%20Supervisors%2C%20and%20Senior%20Management) There were no changes in the company's directors, supervisors, or senior management during the reporting period - There were no changes in the company's directors, supervisors, and senior management during the reporting period[80](index=80&type=chunk) [II. Profit Distribution and Capitalization of Capital Reserve during the Reporting Period](index=24&type=section&id=II.%20Profit%20Distribution%20and%20Capitalization%20of%20Capital%20Reserve%20during%20the%20Reporting%20Period) The company plans to distribute a cash dividend of RMB 3 per 10 shares, totaling RMB 157.66 million Profit Distribution and Capitalization of Capital Reserve | Item | Amount/Quantity | | :--- | :--- | | Bonus Shares per 10 Shares (shares) | 0 | | Cash Dividend per 10 Shares (RMB) (tax included) | 3 | | Share Capital Base for Distribution Plan (shares) | 525,544,810 | | Cash Dividend Amount (RMB) (tax included) | 157,663,443.00 | | Total Cash Dividend (including other methods) (RMB) | 157,663,443.00 | | Distributable Profit (RMB) | 1,772,088,978.96 | | Ratio of Total Cash Dividend to Total Profit Distribution | 100.00% | - The company proposes to distribute a cash dividend of **RMB 3.00 (tax included) per 10 shares** to all shareholders, with no bonus shares or capitalization of capital reserve[81](index=81&type=chunk) [III. Implementation of Equity Incentive Plans, Employee Stock Ownership Plans, or Other Employee Incentives](index=24&type=section&id=III.%20Implementation%20of%20Equity%20Incentive%20Plans%2C%20Employee%20Stock%20Ownership%20Plans%2C%20or%20Other%20Employee%20Incentives) The company has an effective employee stock ownership plan covering 42 employees, holding 0.47% of the total share capital - The company had no equity incentive plans during the reporting period[82](index=82&type=chunk) Effective Employee Stock Ownership Plans during the Reporting Period | Scope of Employees | Number of Employees | Total Shares Held (shares) | % of Total Share Capital | Funding Source | | :--- | :--- | :--- | :--- | :--- | | Directors (excluding independent directors), senior management, core employees, and technical backbones of the company and its subsidiaries | 42 | 2,509,260 | 0.47% | Employee compensation, self-raised funds, and other legally permitted methods | Shareholdings of Directors, Supervisors, and Senior Management in the Employee Stock Ownership Plan | Name | Position | Shares Held at Period-End (shares) | % of Total Share Capital | | :--- | :--- | :--- | :--- | | Ren Wei | Director, Deputy General Manager | 150,000 | 0.03% | | Wang Fu | Supervisor | 96,000 | 0.02% | | Li Tiegang | Board Secretary | 96,000 | 0.02% | - The first phase of the employee stock ownership plan voluntarily waives the voting rights of the shares held[83](index=83&type=chunk) - The total expense recognized for equity-settled share-based payments in this reporting period was **RMB 525,017.31**[83](index=83&type=chunk) [IV. Environmental Information Disclosure](index=26&type=section&id=IV.%20Environmental%20Information%20Disclosure) The company is included in the list of enterprises required to disclose environmental information by law - Jiangsu Zhengdan Chemical Industry Co, Ltd is included in the list of enterprises required to disclose environmental information by law[85](index=85&type=chunk) - The environmental information disclosure report can be found on the official website of the Jiangsu Provincial Department of Ecology and Environment[85](index=85&type=chunk) [V. Social Responsibility](index=26&type=section&id=V.%20Social%20Responsibility) The company adheres to strict safety production standards and has established a comprehensive safety management system - The company strictly complies with the "Safety Production Law" and other regulations, having formulated and implemented numerous safety management systems, operating procedures, and responsibility systems[86](index=86&type=chunk) - The company has established a safety production leadership group headed by the General Manager to enhance employee safety awareness and regularly conducts safety training and assessments[86](index=86&type=chunk) - The company promotes safety standardization, has built a risk classification and control system, and established an accident emergency response system[87](index=87&type=chunk) - During the reporting period, the company underwent **13 inspections** by various government departments and had no major violations of safety production laws or major safety accidents[88](index=88&type=chunk) [Section 5 Significant Events](index=27&type=section&id=Section%205%20Significant%20Events) [I. Commitments Fulfilled or Overdue by Relevant Parties during the Reporting Period](index=27&type=section&id=I.%20Commitments%20Fulfilled%20or%20Overdue%20by%20Relevant%20Parties%20during%20the%20Reporting%20Period) There were no fulfilled or overdue commitments by relevant parties during the reporting period - There were no commitments fulfilled or overdue by the company's actual controllers, shareholders, related parties, or acquirers during the reporting period[90](index=90&type=chunk) [II. Non-operational Fund Occupation by Controlling Shareholders and Other Related Parties](index=27&type=section&id=II.%20Non-operational%20Fund%20Occupation%20by%20Controlling%20Shareholders%20and%20Other%20Related%20Parties) There was no non-operational occupation of funds by controlling shareholders or other related parties during the reporting period - There were no instances of non-operational fund occupation by controlling shareholders or other related parties during the reporting period[91](index=91&type=chunk) [III. Irregular External Guarantees](index=27&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[92](index=92&type=chunk) [IV. Appointment and Dismissal of Accounting Firm](index=27&type=section&id=IV.%20Appointment%20and%20Dismissal%20of%20Accounting%20Firm) The company's semi-annual report has not been audited - The company's semi-annual report has not been audited[93](index=93&type=chunk) [V. Explanation on "Non-standard Audit Report" by the Board, Supervisory Committee, and Audit Committee](index=27&type=section&id=V.%20Explanation%20on%20%22Non-standard%20Audit%20Report%22%20by%20the%20Board%2C%20Supervisory%20Committee%2C%20and%20Audit%20Committee) This section is not applicable as there was no non-standard audit report for the period - The company did not receive a non-standard audit report during the reporting period[94](index=94&type=chunk) [VI. Board's Explanation on the Previous Year's "Non-standard Audit Report"](index=27&type=section&id=VI.%20Board's%20Explanation%20on%20the%20Previous%20Year's%20%22Non-standard%20Audit%20Report%22) This section is not applicable as there was no non-standard audit report in the previous year - The company did not receive a non-standard audit report during the reporting period[94](index=94&type=chunk) [VII. Bankruptcy and Reorganization Matters](index=27&type=section&id=VII.%20Bankruptcy%20and%20Reorganization%20Matters) The company was not involved in any bankruptcy or reorganization matters during the reporting period - The company was not involved in any bankruptcy or reorganization matters during the reporting period[94](index=94&type=chunk) [VIII. Litigation Matters](index=27&type=section&id=VIII.%20Litigation%20Matters) The company had no major litigation or arbitration matters during the reporting period - The company had no major litigation or arbitration matters during the reporting period[95](index=95&type=chunk) - The company had no other litigation matters during the reporting period[95](index=95&type=chunk) [IX. Penalties and Rectifications](index=28&type=section&id=IX.%20Penalties%20and%20Rectifications) The company was not subject to any penalties or rectifications during the reporting period - The company was not subject to any penalties or rectifications during the reporting period[96](index=96&type=chunk) [X. Integrity Status of the Company, its Controlling Shareholder, and Actual Controller](index=28&type=section&id=X.%20Integrity%20Status%20of%20the%20Company%2C%20its%20Controlling%20Shareholder%2C%20and%20Actual%20Controller) 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[97](index=97&type=chunk) [XI. Significant Related-Party Transactions](index=28&type=section&id=XI.%20Significant%20Related-Party%20Transactions) The company's main related-party transaction was the procurement of raw materials and a joint investment to establish a production base in Malaysia Related-Party Transactions in Connection with Daily Operations | Related Party | Transaction Type | Transaction Content | Amount (RMB 10,000) | % of Similar Transactions | Approved Limit (RMB 10,000) | Exceeded Limit | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Jiangsu Sopo Chemical Co, Ltd | Purchase from related party | Purchase of acetic acid and other raw materials | 1,540.07 | 99.09% | 4,000 | No | - The company, together with its shareholder Huaxing Investment, established a holding subsidiary in Singapore, Zhengdan Chemical SG Pte, Ltd, to build a production base in Malaysia[101](index=101&type=chunk) - The Malaysian subsidiary, Huadan Chemical (MY) Sdn, Bhd, has signed a land purchase agreement for a plot of **80,900 square meters** for a total of **16.54 million Malaysian Ringgit**[101](index=101&type=chunk) - The company had no related-party transactions involving the acquisition or sale of assets or equity, nor any related-party debt or credit transactions during the reporting period[98](index=98&type=chunk)[102](index=102&type=chunk) [1. Related-Party Transactions in Connection with Daily Operations](index=28&type=section&id=1.%20Related-Party%20Transactions%20in%20Connection%20with%20Daily%20Operations) The company purchased raw materials from Jiangsu Sopo Chemical Co, Ltd for RMB 15.40 million, within the approved limit Related-Party Transactions in Connection with Daily Operations | Related Party | Transaction Content | Amount (RMB 10,000) | % of Similar Transactions | Approved Limit (RMB 10,000) | Exceeded Limit | | :--- | :--- | :--- | :--- | :--- | :--- | | Jiangsu Sopo Chemical Co, Ltd | Purchase of acetic acid and other raw materials | 1,540.07 | 99.09% | 4,000 | No | [3. Related-Party Transactions involving Joint Outward Investment](index=28&type=section&id=3.%20Related-Party%20Transactions%20involving%20Joint%20Outward%20Investment) The company and a major shareholder jointly established a subsidiary in Singapore to build a production base in Malaysia - The company and Huaxing Investment (Zhenjiang) Co, Ltd jointly established a holding subsidiary in Singapore, Zhengdan Chemical SG Pte, Ltd (70% owned by the company)[101](index=101&type=chunk) - The Singaporean subsidiary will invest in and build a production base in Malaysia, and its subsidiary, Huadan Chemical (MY) Sdn, Bhd, has signed a land purchase agreement[101](index=101&type=chunk) - The land for the Malaysian production base covers an area of **80,900 square meters** with a total cost of **16.54 million Malaysian Ringgit**[101](index=101&type=chunk) [XII. Significant Contracts and Their Performance](index=29&type=section&id=XII.%20Significant%20Contracts%20and%20Their%20Performance) The company had no custody, contracting, leasing, or major guarantee matters during the reporting period - The company had no custody, contracting, or leasing matters during the reporting period[106](index=106&type=chunk)[107](index=107&type=chunk)[108](index=108&type=chunk) - The company had no major guarantee situations during the reporting period[109](index=109&type=chunk) - The company had no other significant contracts during the reporting period[112](index=112&type=chunk) [XIII. Explanation of Other Significant Matters](index=30&type=section&id=XIII.%20Explanation%20of%20Other%20Significant%20Matters) There were no other significant matters to be explained during the reporting period - There were no other significant matters requiring explanation during the reporting period[113](index=113&type=chunk) [XIV. Significant Matters of Subsidiaries](index=30&type=section&id=XIV.%20Significant%20Matters%20of%20Subsidiaries) There were no significant matters concerning the company's subsidiaries during the reporting period - There were no significant matters concerning the company's subsidiaries during the reporting period[114](index=114&type=chunk) [Section 6 Share Changes and Shareholder Information](index=31&type=section&id=Section%206%20Share%20Changes%20and%20Shareholder%20Information) [I. Share Changes](index=31&type=section&id=I.%20Share%20Changes) The company's total number of shares and shareholding structure remained unchanged during the reporting period Share Changes | Share Type | Before Change (shares) | Before Change (%) | Change (+, -) (shares) | After Change (shares) | After Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | I. Restricted Shares | 0 | 0.00% | 0 | 0 | 0.00% | | II. Unrestricted Shares | 532,682,322 | 100.00% | 0 | 532,682,322 | 100.00% | | III. Total Shares | 532,682,322 | 100.00% | 0 | 532,682,322 | 100.00% | - The company's total number of shares and shareholding structure did not change during the reporting period[117](index=117&type=chunk) - There were no changes in restricted shares[118](index=118&type=chunk) [II. Securities Issuance and Listing](index=32&type=section&id=II.%20Securities%20Issuance%20and%20Listing) The company did not issue or list any securities during the reporting period - The company did not issue or list any securities during the reporting period[118](index=118&type=chunk) [III. Number of Shareholders and Shareholdings](index=32&type=section&id=III.%20Number%20of%20Shareholders%20and%20Shareholdings) At the end of the period, the company had 53,725 common shareholders, with the top three shareholders acting in concert - At the end of the reporting period, the total number of common shareholders was **53,725**[119](index=119&type=chunk) Shareholdings of Top 10 Shareholders or Those Holding Over 5% | Shareholder Name | Nature | Shareholding (%) | Shares Held at Period-End (shares) | Unrestricted Shares Held (shares) | | :--- | :--- | :--- | :--- | :--- | | He Xing Enterprise Limited | Foreign Legal Entity | 23.81% | 126,808,300 | 126,808,300 | | Huaxing Investment (Zhenjiang) Co, Ltd | Domestic Non-state-owned Legal Entity | 22.36% | 119,085,800 | 119,085,800 | | Zhenjiang Lihao Investment Co, Ltd | Domestic Non-state-owned Legal Entity | 7.87% | 41,909,340 | 41,909,340 | | Zhejiang Yinwan Private Equity Fund Management Co, Ltd - Yinwan Banyan No. 6 Private Equity Fund | Other | 2.23% | 11,881,900 | 11,881,900 | | Jiangsu Zhengdan Chemical Industry Co, Ltd - Phase I Employee Stock Ownership Plan | Other | 0.47% | 2,509,260 | 2,509,260 | | China Merchants Bank Co, Ltd - Southern CSI 1000 ETF | Other | 0.46% | 2,465,004 | 2,465,004 | | Hong Kong Securities Clearing Company Ltd | Foreign Legal Entity | 0.39% | 2,090,659 | 2,090,659 | | Zou Changling | Domestic Individual | 0.28% | 1,495,700 | 1,495,700 | | China Merchants Bank Co, Ltd - Huaxia CSI 1000 ETF | Other | 0.27% | 1,450,400 | 1,450,400 | | Yao Yuanxi | Domestic Individual | 0.24% | 1,301,200 | 1,301,200 | - He Xing Enterprise Limited, Huaxing Investment (Zhenjiang) Co, Ltd, and Zhejiang Yinwan Private Equity Fund Management Co, Ltd - Yinwan Banyan No. 6 Private Equity Fund are parties acting in concert, controlled by the actual controllers Cao Zhengguo and Shen Xingxiu[120](index=120&type=chunk) - The company's dedicated securities account for share buybacks holds **7,137,512 shares**, representing **1.34%** of the total share capital at the end of the reporting period[120](index=120&type=chunk) [IV. Changes in Shareholdings of Directors, Supervisors, and Senior Management](index=34&type=section&id=IV.%20Changes%20in%20Shareholdings%20of%20Directors%2C%20Supervisors%2C%20and%20Senior%20Management) There were no changes in the shareholdings of directors, supervisors, or 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[122](index=122&type=chunk) [V. Changes in Controlling Shareholder or Actual Controller](index=34&type=section&id=V.%20Changes%20in%20Controlling%20Shareholder%20or%20Actual%20Controller) There were no changes in the company's controlling shareholder or actual controller during the reporting period - There was no change in the company's controlling shareholder during the reporting period[123](index=123&type=chunk) - There was no change in the company's actual controller during the reporting period[124](index=124&type=chunk) [VI. Information on Preferred Shares](index=36&type=section&id=VI.%20Information%20on%20Preferred%20Shares) The company had no preferred shares during the reporting period - The company had no preferred shares during the reporting period[125](index=125&type=chunk) [Section 7 Bond-related Matters](index=37&type=section&id=Section%207%20Bond-related%20Matters) [Bond-related Matters](index=37&type=section&id=Bond-related%20Matters) The company had no bond-related matters to report for the period - The company had no bond-related matters during the reporting period[127](index=127&type=chunk) [Section 8 Financial Report](index=38&type=section&id=Section%208%20Financial%20Report) [I. Audit Report](index=38&type=section&id=I.%20Audit%20Report) The semi-annual financial report has not been audited - The company's semi-annual financial report has not been audited[129](index=129&type=chunk) [II. Financial Statements](index=38&type=section&id=II.%20Financial%20Statements) This section presents the company's consolidated and parent company financial statements for the first half of 2025 Consolidated Balance Sheet (Summary) | Item | Closing Balance (RMB) | Opening Balance (RMB) | | :--- | :--- | :--- | | Total Assets | 3,388,746,163.90 | 3,076,435,919.47 | | Total Liabilities | 115,060,054.81 | 276,409,892.65 | | Equity Attributable to Parent Company | 3,273,491,486.68 | 2,799,876,256.30 | Consolidated Income Statement (Summary) | Item | H1 2025 (RMB) | H1 2024 (RMB) | | :--- | :--- | :--- | | Total Operating Revenue | 1,428,744,599.17 | 1,382,165,930.21 | | Operating Profit | 738,946,224.96 | 336,689,092.10 | | Total Profit | 738,726,009.67 | 336,043,825.87 | | Net Profit | 629,929,921.39 | 285,917,101.46 | | Net Profit Attributable to Parent Company | 630,005,990.33 | 285,917,101.46 | Consolidated Cash Flow Statement (Summary) | Item | H1 2025 (RMB) | H1 2024 (RMB) | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 869,172,636.10 | 65,764,563.16 | | Net Cash Flow from Investing Activities | -772,234,135.61 | -257,540,256.59 | | Net Cash Flow from Financing Activities | -283,173,505.80 | -22,929,768.98 | | Net Increase in Cash and Cash Equivalents | -157,846,210.54 | -206,059,200.13 | [1. Consolidated Balance Sheet](index=38&type=section&id=1.%20Consolidated%20Balance%20Sheet) Total assets reached RMB 3.39 billion, with a significant increase in trading financial assets and a decrease in short-term borrowings Consolidated Balance Sheet (Period-End vs. Beginning of Period) | Item | Closing Balance (RMB) | Opening Balance (RMB) | | :--- | :--- | :--- | | Cash and Cash Equivalents | 1,194,540,929.30 | 1,352,387,139.84 | | Trading Financial Assets | 743,685,641.85 | | | Accounts Receivable | 231,813,011.76 | 390,962,106.41 | | Inventories | 185,379,014.29 | 223,457,743.44 | | Fixed Assets | 460,736,367.30 | 490,572,203.71 | | Construction in Progress | 263,606,276.50 | 237,821,760.75 | | Short-term Borrowings | 4,205,070.96 | 130,211,261.11 | | Total Liabilities | 115,060,054.81 | 276,409,892.65 | | Equity Attributable to Parent Company | 3,273,491,486.68 | 2,799,876,256.30 | | Total Assets | 3,388,746,163.90 | 3,076,435,919.47 | [2. Parent Company Balance Sheet](index=40&type=section&id=2.%20Parent%20Company%20Balance%20Sheet) The parent company's total assets grew to RMB 3.38 billion, while total liabilities decreased significantly by 60.99% Parent Company Balance Sheet (Period-End vs. Beginning of Period) | Item | Closing Balance (RMB) | Opening Balance (RMB) | | :--- | :--- | :--- | | Cash and Cash Equivalents | 1,168,013,093.73 | 1,341,633,251.56 | | Trading Financial Assets | 743,685,641.85 | | | Accounts Receivable | 238,308,243.60 | 405,502,877.82 | | Inventories | 184,705,055.65 | 222,453,976.64 | | Fixed Assets | 460,736,367.30 | 490,572,203.71 | | Construction in Progress | 263,606,276.50 | 237,821,760.75 | | Short-term Borrowings | 4,205,070.96 | 15,211,261.11 | | Notes Payable | | 115,000,000.00 | | Total Liabilities | 114,550,903.66 | 293,834,730.03 | | Total Equity | 3,268,178,860.43 | 2,794,027,612.49 | | Total Assets | 3,382,729,764.09 | 3,087,862,342.52 | [3. Consolidated Income Statement](index=43&type=section&id=3.%20Consolidated%20Income%20Statement) Consolidated net profit surged by 120.35% to RMB 630 million, driven by a significant reduction in operating costs Consolidated Income Statement (Current Period vs. Prior Period) | Item | H1 2025 (RMB) | H1 2024 (RMB) | | :--- | :--- | :--- | | Total Operating Revenue | 1,428,744,599.17 | 1,382,165,930.21 | | Total Operating Costs | 696,649,602.17 | 1,058,119,740.19 | | Operating Profit | 738,946,224.96 | 336,689,092.10 | | Total Profit | 738,726,009.67 | 336,043,825.87 | | Net Profit | 629,929,921.39 | 285,917,101.46 | | Net Profit Attributable to Parent Company | 630,005,990.33 | 285,917,101.46 | | Basic Earnings Per Share | 1.20 | 0.58 | | Diluted Earnings Per Share | 1.18 | 0.58 | [4. Parent Company Income Statement](index=45&type=section&id=4.%20Parent%20Company%20Income%20Statement) The parent company's net profit increased by 121.90% to RMB 631 million for the first half of 2025 Parent Company Income Statement (Current Period vs. Prior Period) | Item | H1 2025 (RMB) | H1 2024 (RMB) | | :--- | :--- | :--- | | Operating Revenue | 1,425,952,261.50 | 1,386,443,504.29 | | Operating Costs | 690,230,994.84 | 1,045,443,011.32 | | Operating Profit | 740,070,314.76 | 334,471,090.09 | | Total Profit | 739,850,099.47 | 333,825,823.86 | | Net Profit | 630,824,156.45 | 284,289,080.41 | [5. Consolidated Cash Flow Statement](index=46&type=section&id=5.%20Consolidated%20Cash%20Flow%20Statement) Net cash flow from operating activities grew significantly by 1221.64%, while investing activities saw a net outflow due to investments Consolidated Cash Flow Statement (Current Period vs. Prior Period) | Item | H1 2025 (RMB) | H1 2024 (RMB) | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 869,172,636.10 | 65,764,563.16 | | Net Cash Flow from Investing Activities | -772,234,135.61 | -257,540,256.59 | | Net Cash Flow from Financing Activities | -283,173,505.80 | -22,929,768.98 | | Net Increase in Cash and Cash Equivalents | -157,846,210.54 | -206,059,200.13 | [6. Parent Company Cash Flow Statement](index=47&type=section&id=6.%20Parent%20Company%20Cash%20Flow%20Statement) The parent company's operating cash flow increased by 840.26%, with significant outflows for investment and financing activities Parent Company Cash Flow Statement (Current Period vs. Prior Period) | Item | H1 2025 (RMB) | H1 2024 (RMB) | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 744,401,604.47 | 79,068,894.68 | | Net Cash Flow from Investing Activities | -778,078,603.61 | -257,540,256.59 | | Net Cash Flow from Financing Activities | -168,173,505.80 | -43,554,373.61 | | Net Increase in Cash and Cash Equivalents | -173,620,157.83 | -213,396,527.31 | [7. Consolidated Statement of Changes in Equity](index=48&type=section&id=7.%20Consolidated%20Statement%20of%20Changes%20in%20Equity) Total consolidated equity increased by RMB 474 million, primarily driven by comprehensive income of RMB 630 million Consolidated Statement of Changes in Equity (Changes during the Current Period) | Item | Capital Reserve (RMB) | Other Comprehensive Income (RMB) | Special Reserve (RMB) | Retained Earnings (RMB) | Subtotal Attributable to Parent (RMB) | Minority Interest (RMB) | Total Equity (RMB) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Net Change | 525,017.31 | 282,148.56 | 465,517.18 | 472,342,547.33 | 473,615,230.38 | 44,851.89 | 473,660,082.27 | | of which: Comprehensive Income | | 282,148.56 | | 630,005,990.33 | 630,288,138.89 | 44,851.89 | 630,332,990.78 | | Capital Contributions | 525,017.31 | | | | 525,017.31 | | 525,017.31 | | Profit Distribution | | | | -157,663,443.00 | -157,663,443.00 | | -157,663,443.00 | | Special Reserve | | | 465,517.18 | | 465,517.18 | | 465,517.18 | [8. Parent Company Statement of Changes in Equity](index=53&type=section&id=8.%20Parent%20Company%20Statement%20of%20Changes%20in%20Equity) The parent company's total equity increased by RMB 474 million, mainly due to comprehensive income of RMB 631 million Parent Company Statement of Changes in Equity (Changes during the Current Period) | Item | Capital Reserve (RMB) | Special Reserve (RMB) | Retained Earnings (RMB) | Total Equity (RMB) | | :--- | :--- | :--- | :--- | :--- | | Net Change | 525,017.31 | 465,517.18 | 473,160,713.45 | 474,151,247.94 | | of which: Comprehensive Income | | | 630,824,156.45 | 630,824,156.45 | | Capital Contributions | 525,017.31 | | | 525,017.31 | | Profit Distribution | | | -157,663,443.00 | -157,663,443.00 | | Special Reserve | | 465,517.18 | | 465,517.18 | [III. Basic Company Information](index=56&type=section&id=III.%20Basic%20Company%20Information) Jiangsu Zhengdan Chemical Industry Co, Ltd was established in 2007, listed in 2017, and is controlled by Cao Zhengguo and Shen Xingxiu - The company was founded in January 2007 and listed on the Shenzhen Stock Exchange in April 2017[160](index=160&type=chunk) - As of June 30, 2025, the company's total issued share capital is **532.68 million shares**[161](index=161&type=chunk) - The company's main business includes the production of hazardous chemicals, import and export of goods, and technology R&D[161](index=161&type=chunk)[162](index=162&type=chunk) - The controlling shareholder is He Xing Enterprise Limited, and the actual controllers are Cao Zhengguo and Shen Xingxiu[162](index=162&type=chunk) [IV. Basis of Preparation for Financial Statements](index=57&type=section&id=IV.%20Basis%20of%20Preparation%20for%20Financial%20Statements) The financial statements are prepared in accordance with China's Accounting Standards for Business Enterprises 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 of the China Securities Regulatory Commission[164](index=164&type=chunk) - These financial statements are prepared on a going concern basis[165](index=165&type=chunk) [V. Significant Accounting Policies and Estimates](index=57&type=section&id=V.%20Significant%20Accounting%20Policies%20and%20Estimates) This section details the company's accounting policies for key areas such as financial instruments, revenue recognition, and leases - The company adheres to the Accounting Standards for Business Enterprises, providing a true and complete reflection of its financial position, operating results, and cash flows[167](index=167&type=chunk) - Financial assets are classified as measured at amortized cost, at fair value through other comprehensive income, or at fair value through profit or loss[190](index=190&type=chunk)[191](index=191&type=chunk) - The company applies an expected credit loss model for impairment of financial assets measured at amortized cost, debt instruments at fair value through other comprehensive income, and financial guarantee contracts[210](index=210&type=chunk) - Revenue is recognized when the customer obtains control of the goods or services, either over time or at a point in time, depending on the nature of the performance obligation[274](index=274&type=chunk)[275](index=275&type=chunk)[276](index=276&type=chunk) - The company accrues safety production costs according to prescribed standards, charging them to relevant product costs or current profit and loss while crediting the "Special Reserve" account[314](index=314&type=chunk)[315](index=315&type=chunk) - There were no significant changes in accounting policies or estimates during the reporting period[316](index=316&type=chunk)[317](index=317&type=chunk) [VI. Taxation](index=82&type=section&id=VI.%20Taxation) The company benefits from a reduced 15% corporate income tax rate as a high-tech enterprise Main Taxes and Rates | Tax Type | Rate | | :--- | :--- | | Value-Added Tax (VAT) | 13% | | Urban Maintenance and Construction Tax | 7% | | Corporate Income Tax | 15%, 16.5%, 25%, 17%, 24% | - Jiangsu Zhengdan Chemical Industry Co, Ltd enjoys a preferential corporate income tax rate of **15%** as a high-tech enterprise[318](index=318&type=chunk) - Hong Kong Zhengdan International Trading Co, Ltd is subject to a preferential profits tax rate in Hong Kong, with assessable profits exceeding HK$2 million taxed at 16.5%[318](index=318&type=chunk) - Suzhou Zhengdan New Material Research Institute Co, Ltd, as a small and micro enterprise, enjoys a preferential income tax policy, with its taxable income calculated at a reduced rate of 25% and taxed at 20%[319](index=319&type=chunk) [VII. Notes to Consolidated Financial Statement Items](index=82&type=section&id=VII.%20Notes%20to%20Consolidated%20Financial%20Statement%20Items) This section provides detailed notes on key items in the consolidated financial statements, including assets, liabilities, and income Key Items in Consolidated Financial Statements at Period-End | Item | Closing Balance (RMB) | | :--- | :--- | | Cash and Cash Equivalents | 1,194,540,929.30 | | Trading Financial Assets | 743,685,641.85 | | Accounts Receivable | 231,813,011.76 | | Short-term Borrowings | 4,205,070.96 | | Operating Revenue | 1,428,744,599.17 | | Operating Costs | 692,424,996.43 | | Net Profit | 629,929,921.39 | | Net Cash Flow from Operating Activities | 869,172,636.10 | - At the end of the period, the total amount of cash and cash equivalents held overseas was **RMB 6,503,893.86**[321](index=321&type=chunk) - The closing balance of accounts receivable was **RMB 232 million**, a decrease from RMB 391 million at the beginning of the year, mainly due to the collection of payments[333](index=333&type=chunk) - Short-term borrowings at period-end were **RMB 4.21 million**, a significant decrease from RMB 130 million at the beginning of the year, primarily due to the repayment of matured loans[388](index=388&type=chunk) - Foreign currency monetary items are mainly in USD and EUR, with period-end balances equivalent to **RMB 48,563,129.92** and **RMB 987,463,955.22**, respectively[454](index=454&type=chunk) [VIII. R&D Expenditures](index=109&type=section&id=VIII.%20R&D%20Expenditures) Total R&D expenditure for the period was RMB 11.16 million, all of which was expensed, marking a 24.09% increase R&D Expenditure Composition | Item | Current Period (RMB) | Prior Period (RMB) | | :--- | :--- | :--- | | Direct Materials | 1,402,614.98 | 1,890,042.68 | | Employee Compensation | 3,435,222.02 | 3,270,767.40 | | Energy Costs | 3,689,589.93 | 648,382.59 | | Other Expenses | 2,628,245.12 | 3,180,960.98 | | **Total** | **11,155,672.05** | **8,990,153.65** | | of which: Expensed R&D | 11,155,672.05 | 8,990

[Important Notice, Table of Contents, and Definitions](index=2&type=section&id=Section%20I.%20Important%20Notice%2C%20Table%20of%20Contents%2C%20and%20Definitions) This section outlines key disclaimers, the report structure, and definitions of terms used herein [Company Profile and Key Financial Indicators](index=6&type=section&id=Section%20II.%20Company%20Profile%20and%20Key%20Financial%20Indicators) This section introduces the company's basic information and presents its key financial performance metrics [Company Profile](index=6&type=section&id=I.%20Company%20Profile) This section provides the company's basic information, including its stock abbreviation 'ZKJF', stock code '002657', full Chinese and English names, and legal representative | Item | Information | | :--- | :--- | | Stock Abbreviation | ZKJF | | Stock Code | 002657 | | Listing Exchange | Shenzhen Stock Exchange | | Company Name | Beijing Zhongke Jincai Technology Co., Ltd. | | Legal Representative | Zhu Yedong | [Key Accounting Data and Financial Indicators](index=7&type=section&id=IV.%20Key%20Accounting%20Data%20and%20Financial%20Indicators) During the reporting period, the company's operating revenue grew by 14.36% year-on-year, but net profit attributable to shareholders of the listed company saw a 71.51% increase in loss, and net cash outflow from operating activities increased by 54.78%; total assets and net assets both slightly decreased compared to the end of the prior year | Key Financial Indicators | Current Period (Yuan) | Prior Period (Yuan) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue (Yuan) | 345,159,140.56 | 301,811,431.40 | 14.36% | | Net Profit Attributable to Shareholders (Yuan) | -84,945,843.08 | -49,529,121.23 | -71.51% | | Net Cash Flow from Operating Activities (Yuan) | -253,357,615.22 | -163,689,762.09 | -54.78% | | Basic EPS (Yuan/Share) | -0.2498 | -0.1500 | -66.53% | | Weighted Average ROE (%) | -4.73% | -2.67% | -2.06% | | **Asset Indicators** | **End of Current Period (Yuan)** | **End of Prior Year (Yuan)** | **Change from Prior Year-end (%)** | | Total Assets (Yuan) | 2,210,628,233.99 | 2,471,026,433.23 | -10.54% | | Net Assets Attributable to Shareholders (Yuan) | 1,752,558,502.76 | 1,835,356,327.68 | -4.51% | [Non-Recurring Gains and Losses Items and Amounts](index=7&type=section&id=VI.%20Non-Recurring%20Gains%20and%20Losses%20Items%20and%20Amounts) During the reporting period, the company's total non-recurring gains and losses amounted to -349,635.97 Yuan, primarily comprising government grants, fair value changes in financial assets, and other non-operating income and expenses | Item | Amount (Yuan) | | :--- | :--- | | Gains/Losses from Disposal of Non-Current Assets | -567,883.40 | | Government Grants Recognized in Current Profit/Loss | 1,846,423.26 | | Gains/Losses from Fair Value Changes of Financial Assets and Liabilities | 354,747.01 | | Other Non-Operating Income and Expenses | -1,968,228.92 | | **Total** | **-349,635.97** | [Management Discussion and Analysis](index=9&type=section&id=Section%20III.%20Management%20Discussion%20and%20Analysis) This section provides an in-depth analysis of the company's operations, financial performance, and future outlook from management's perspective [Principal Businesses](index=9&type=section&id=I.%20Principal%20Businesses%20Engaged%20by%20the%20Company%20During%20the%20Reporting%20Period) The company provides FinTech, AI, and data center integrated services to financial, government, and enterprise clients, with significant growth in AI and data center service revenues during the period, while FinTech services experienced a decline, as the company actively explores AI Agent, computing infrastructure, and multimodal applications - The company's business aligns with national digital economy development, focusing on FinTech, AI, and data center integrated services to empower client digital and intelligent transformation[33](index=33&type=chunk) | Business Segment | Operating Revenue for the Period (Yuan) | | :--- | :--- | | FinTech Integrated Services | 109,284,462.99 | | AI Integrated Services | 48,351,358.59 | | Data Center Integrated Services | 175,363,383.70 | - The company has a comprehensive AI strategy covering computing power, large models, multimodal applications, and AI Agents, establishing ecological partnerships with industry leaders like Alibaba Cloud and Huawei[35](index=35&type=chunk)[36](index=36&type=chunk) - The company has successfully implemented multimodal applications in scenarios such as digital IP overseas expansion and AI digital human live streaming, providing related services to over 200 brands[39](index=39&type=chunk) [Analysis of Core Competencies](index=13&type=section&id=II.%20Analysis%20of%20Core%20Competencies) The company's core competencies include its long-term digital economy strategy, strong brand recognition, close collaboration with global tech leaders, industry-leading 'AI+Data+Business Know-How' capabilities, comprehensive industry qualifications, and a unique 'multi-level partner operational responsibility system' for talent management - The company serves as the president unit of the Beijing Blockchain Technology Application Association and has participated in the formulation of **9 national and industry standards**, demonstrating its industry position and brand image[41](index=41&type=chunk) - The company has established multi-level ecological partnerships with leading enterprises in infrastructure, model, and application layers, including Alibaba Cloud, Tencent Cloud, and Huawei, maintaining technological foresight[43](index=43&type=chunk) - Leveraging over **20 years** of experience in the banking sector, the company has developed core 'AI+Data+Business Know-How' capabilities, forming a solid foundation for products like its AI business process intelligent agent native platform[44](index=44&type=chunk)[45](index=45&type=chunk) - The company holds over **100 industry qualifications** and more than **500 software copyrights and patents**, ranking among the top in the software service industry for qualification completeness[45](index=45&type=chunk) [Analysis of Principal Business](index=15&type=section&id=III.%20Analysis%20of%20Principal%20Business) During the reporting period, the company's total operating revenue increased by 14.36% year-on-year, but its business structure significantly shifted, with financial industry revenue decreasing by 42.12%, while government and public utilities and enterprise sector revenues surged by 135.81% and 172.09% respectively, leading to a 47.45% decline in FinTech services revenue and substantial growth of 189.34% and 101.85% in data center and AI services revenues | Financial Indicator | Current Period (Yuan) | Prior Period (Yuan) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 345,159,140.56 | 301,811,431.40 | 14.36% | | Operating Cost | 288,436,894.17 | 233,491,735.54 | 23.53% | | R&D Expenditure | 98,327,859.61 | 81,611,152.27 | 20.48% | Operating Revenue by Industry | Industry | Current Period Revenue (Yuan) | % of Total Revenue | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Financial | 125,965,049.26 | 36.50% | -42.12% | | Government and Public Utilities | 63,998,490.12 | 18.54% | 135.81% | | Enterprise | 155,195,601.18 | 44.96% | 172.09% | Operating Revenue by Product | Product | Current Period Revenue (Yuan) | % of Total Revenue | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | FinTech Integrated Services | 109,284,462.99 | 31.66% | -47.45% | | Data Center Integrated Services | 175,363,383.70 | 50.81% | 189.34% | | AI Integrated Services | 48,351,358.59 | 14.01% | 101.85% | [Analysis of Assets and Liabilities](index=17&type=section&id=V.%20Analysis%20of%20Assets%20and%20Liabilities) As of the end of the reporting period, the company's total assets were **2.211 billion Yuan**, a 10.54% decrease from the prior year-end, with no significant changes in asset composition, primarily comprising cash and cash equivalents, inventories, long-term equity investments, and other non-current financial assets; contract liabilities decreased, and restricted assets amounted to **28.71 million Yuan**, mainly for letter of guarantee deposits and trust custody funds | Asset/Liability Item | Period-end Amount (Yuan) | % of Total Assets | Change from Prior Year-end (%) | | :--- | :--- | :--- | :--- | | Cash and Cash Equivalents | 381,069,445.40 | 17.24% | -5.51% | | Inventories | 374,148,786.61 | 16.92% | 2.28% | | Long-term Equity Investments | 299,298,122.01 | 13.54% | 0.67% | | Other Non-Current Financial Assets | 406,099,190.07 | 18.37% | 2.35% | | Contract Liabilities | 157,513,044.60 | 7.13% | -0.37% | - As of the end of the reporting period, the company had **28,714,076.77 Yuan** in restricted assets, primarily consisting of letter of guarantee deposits and trust custody funds[63](index=63&type=chunk) [Analysis of Investment Status](index=19&type=section&id=VI.%20Analysis%20of%20Investment%20Status) During the reporting period, the company's investment amounted to **10.25 million Yuan**, a significant 82.33% decrease from **58.02 million Yuan** in the prior year, with no major equity or non-equity investments, and financial asset investments primarily consisting of trust products - Investment during the reporting period was **10.25 million Yuan**, a significant **82.33% year-on-year decrease**[64](index=64&type=chunk) [Analysis of Major Holding and Participating Companies](index=20&type=section&id=VIII.%20Analysis%20of%20Major%20Holding%20and%20Participating%20Companies) During the reporting period, key subsidiaries included Beijing Zhongke Jincai Information Technology Co., Ltd. with a net loss of **68.68 million Yuan** and Hunan Zhongke Jincai Zhisu Technology Co., Ltd. with a net loss of **17.60 million Yuan**; the company established three new subsidiaries and deregistered one, with no significant impact expected on overall operating performance | Company Name | Type | Net Profit for the Period (Yuan) | | :--- | :--- | :--- | | Beijing Zhongke Jincai Information Technology Co., Ltd. | Subsidiary | -68,678,260.67 | | Hunan Zhongke Jincai Zhisu Technology Co., Ltd. | Subsidiary | -17,595,137.27 | - During the reporting period, the company established Zhongke Jincai (Hong Kong) Technology Co., Ltd., Shanghai Zhike Jincai Digital Technology Co., Ltd., and Anqing Zhike Jincai Zhisu Technology Co., Ltd., while deregistering Zhongke Jincai Insurance Brokerage Co., Ltd[72](index=72&type=chunk) [Risks and Countermeasures](index=21&type=section&id=X.%20Risks%20Faced%20by%20the%20Company%20and%20Countermeasures) The company faces key risks including market competition, rapid industry technological updates, human resources (especially the scarcity of high-end AI talent), and industry policy changes, which it plans to address by accelerating business expansion, increasing R&D investment, improving talent retention mechanisms, and continuously monitoring policy developments - Market competition risk: The company will accelerate business expansion and increase market development efforts to mitigate this risk[75](index=75&type=chunk) - Industry technology risk: The company will increase technology R&D investment, improve its R&D system, and enhance innovation capabilities[76](index=76&type=chunk) - Human resource risk: The company will strengthen talent cultivation and recruitment by upgrading its multi-level partner operational responsibility system[77](index=77&type=chunk) - Policy risk: The company will strictly adhere to laws and regulations, continuously monitor and research relevant policy changes to prevent risks[78](index=78&type=chunk) [Corporate Governance, Environment, and Society](index=23&type=section&id=Section%20IV.%20Corporate%20Governance%2C%20Environment%2C%20and%20Society) This section details the company's governance structure, environmental initiatives, and social responsibilities, including shareholder rights, employee development, and community engagement [Corporate Governance and Social Responsibility](index=23&type=section&id=Corporate%20Governance%20and%20Social%20Responsibility) During the reporting period, the company's governance structure remained stable with only one Vice General Manager appointed, and no semi-annual profit distribution is planned; regarding social responsibility, the company emphasizes protecting shareholder and creditor rights, fostering win-win cooperation with suppliers and clients, and prioritizing employee development through its 'multi-level partner operational responsibility system' and diverse training programs - The company plans not to distribute cash dividends, bonus shares, or convert capital reserves into share capital for the half-year period[84](index=84&type=chunk) - The company actively fulfills its social responsibilities, including protecting shareholder interests, achieving win-win outcomes with partners, and prioritizing employee development through its 'Zhongke Jincai Multi-level Partner Operational Responsibility System'[86](index=86&type=chunk)[89](index=89&type=chunk) [Significant Matters](index=25&type=section&id=Section%20V.%20Significant%20Matters) This section covers significant events and disclosures, including commitments, related party transactions, and ongoing legal proceedings [Overview of Significant Matters](index=25&type=section&id=Overview%20of%20Significant%20Matters) During the reporting period, the company had no significant commitments, no controlling shareholder fund occupation, no illegal guarantees, no major asset sales, no significant related-party transactions, or other major contracts; the semi-annual financial report is unaudited, and there are 6 pending litigation or arbitration cases totaling **47.0942 million Yuan** - During the reporting period, the company had no commitments from the actual controller, shareholders, or other related parties, no non-operating fund occupation, no illegal guarantees, and no significant related-party transactions[93](index=93&type=chunk)[94](index=94&type=chunk)[95](index=95&type=chunk)[102](index=102&type=chunk) - The company's semi-annual financial report is unaudited[96](index=96&type=chunk) - As of the end of the reporting period, the company had **6 pending litigation or arbitration cases**, with a total amount involved of **47.0942 million Yuan**[99](index=99&type=chunk) [Share Capital Changes and Shareholder Information](index=29&type=section&id=Section%20VI.%20Share%20Capital%20Changes%20and%20Shareholder%20Information) This section details changes in the company's share capital structure and provides an overview of its shareholder base [Share Capital Changes](index=29&type=section&id=I.%20Share%20Capital%20Changes) During the reporting period, the company's total share capital remained unchanged at 340,051,995 shares, with unrestricted shares accounting for 98.91%; the company completed a share repurchase on March 5, 2025, repurchasing a cumulative 1,476,155 shares, representing 0.43% of total share capital, for a total transaction amount of approximately **20 million Yuan** - The company's total share capital remained unchanged at **340,051,995 shares** during the reporting period[119](index=119&type=chunk)[120](index=120&type=chunk) - The company completed its share repurchase plan, repurchasing a total of **1,476,155 shares** (**0.43%** of total share capital), with a total amount of **20,000,955.55 Yuan**[120](index=120&type=chunk) [Shareholder Information](index=31&type=section&id=III.%20Number%20of%20Shareholders%20and%20Shareholding%20Information%20of%20the%20Company) As of the end of the reporting period, the company had 95,822 common shareholders, with the top two being domestic natural person Shen Sa (8.12% stake) and Hong Kong Securities Clearing Company Limited (2.30% stake); the actual controllers, Zhu Yedong and Shen Sa, are a married couple - As of the end of the reporting period, the total number of common shareholders was **95,822**[125](index=125&type=chunk) | Shareholder Name | Shareholding Percentage | Number of Shares Held (Shares) | | :--- | :--- | :--- | | Shen Sa | 8.12% | 27,623,918 | | Hong Kong Securities Clearing Company Limited | 2.30% | 7,812,271 | | Wang Qinying | 1.85% | 6,301,600 | | Zhu Yedong | 0.96% | 3,264,533 | - Shareholders Zhu Yedong and Shen Sa are a married couple, forming a concerted party[126](index=126&type=chunk) [Bond-Related Information](index=35&type=section&id=Section%20VII.%20Bond-Related%20Information) This section provides details on the company's bond issuance and related financial instruments [Bond Information](index=35&type=section&id=Bond%20Information) During the reporting period, the company had no bond-related information [Financial Report](index=36&type=section&id=Section%20VIII.%20Financial%20Report) This section presents the company's consolidated financial statements, including the balance sheet, income statement, and cash flow statement, along with detailed notes [Financial Statements](index=36&type=section&id=II.%20Financial%20Statements) The financial statements indicate that in the first half of 2025, the company experienced a decrease in total assets, year-on-year growth in operating revenue, but an expanded net loss; operating cash flow remained negative with increased outflow, net cash inflow from investing activities significantly decreased, and financing cash flow remained largely stable [Consolidated Balance Sheet](index=36&type=section&id=1.%20Consolidated%20Balance%20Sheet) As of the end of the reporting period, the company's total assets were **2.211 billion Yuan**, a 10.54% decrease from the beginning of the period; total liabilities were **458 million Yuan**, a 27.94% decrease; and equity attributable to the parent company was **1.753 billion Yuan**, a 4.51% decrease, maintaining a relatively stable asset and liability structure | Item | Period-end Balance (Yuan) | Beginning Balance (Yuan) | | :--- | :--- | :--- | | Total Assets | 2,210,628,233.99 | 2,471,026,433.23 | | Total Liabilities | 458,047,616.52 | 635,648,000.55 | | Total Equity Attributable to Parent Company | 1,752,558,502.76 | 1,835,356,327.68 | [Consolidated Income Statement](index=40&type=section&id=3.%20Consolidated%20Income%20Statement) In the first half of 2025, the company achieved total operating revenue of **345 million Yuan**, a 14.36% year-on-year increase; however, due to increased operating costs and R&D expenses, operating profit was **-82.45 million Yuan**, with losses expanding by 67.99% year-on-year, and net profit attributable to the parent company was **-84.95 million Yuan**, with losses expanding by 71.51% year-on-year | Item | Current Period Amount (Yuan) | Prior Period Amount (Yuan) | | :--- | :--- | :--- | | Total Operating Revenue | 345,159,140.56 | 301,811,431.40 | | Total Operating Cost | 442,646,775.66 | 372,455,046.95 | | Of which: R&D Expenses | 98,327,859.61 | 81,611,152.27 | | Operating Profit | -82,450,234.08 | -49,080,977.70 | | Total Profit | -84,550,234.08 | -49,307,551.86 | | Net Profit Attributable to Parent Company Shareholders | -84,945,843.08 | -49,529,121.23 | [Consolidated Cash Flow Statement](index=44&type=section&id=5.%20Consolidated%20Cash%20Flow%20Statement) During the reporting period, net cash flow from operating activities was **-253 million Yuan**, with net outflow expanding by 54.78% year-on-year, primarily due to increased cash payments for goods and services; net cash flow from investing activities was **82.01 million Yuan**, a 72.96% year-on-year decrease, mainly due to reduced wealth management investments; net cash outflow from financing activities was **1.99 million Yuan**, resulting in a net decrease of **173 million Yuan** in cash and cash equivalents | Item | Current Period Amount (Yuan) | Prior Period Amount (Yuan) | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | -253,357,615.22 | -163,689,762.09 | | Net Cash Flow from Investing Activities | 82,011,695.30 | 303,289,697.93 | | Net Cash Flow from Financing Activities | -1,993,091.77 | -47,148,688.95 | | Net Increase/Decrease in Cash and Cash Equivalents | -173,339,011.69 | 92,451,246.89 | [Notes to Consolidated Financial Statements](index=84&type=section&id=VII.%20Notes%20to%20Consolidated%20Financial%20Statements) This section provides detailed explanations for key items in the consolidated financial statements, noting an increase in accounts receivable book balance with stable bad debt provision, investment income of **3.57 million Yuan** from long-term equity investment in Anliang Futures, goodwill original book value of **818 million Yuan** with accumulated impairment of **794 million Yuan** and no new impairment this period, and R&D expenses increasing by 20.48% to **98.33 million Yuan** [Accounts Receivable](index=85&type=section&id=4.%20Accounts%20Receivable) At the end of the period, the book balance of accounts receivable was **226 million Yuan**, a slight increase from the beginning of the period; bad debt provisions of **42.52 million Yuan** were made based on aging, representing an 18.91% provision rate, with the top five debtors accounting for 49.97% of the total accounts receivable | Aging | Period-end Book Balance (Yuan) | | :--- | :--- | | Within 1 Year | 170,467,644.16 | | 1 to 2 Years | 5,178,946.61 | | 2 to 3 Years | 14,493,903.76 | | Over 3 Years | 36,093,749.42 | | **Total** | **226,234,243.95** | [Long-term Equity Investments](index=94&type=section&id=13.%20Long-term%20Equity%20Investments) At the end of the period, the book value of long-term equity investments was **299 million Yuan**, a decrease from the beginning of the period, primarily comprising investments in associates such as Anliang Futures and Aihuaren Technology; during the reporting period, investment income recognized under the equity method was **3.27 million Yuan**, and dividends of **22 million Yuan** were received from Anliang Futures - For the investment in associate Anliang Futures Co., Ltd., investment income of **3,567,593.86 Yuan** was recognized in the current period, and cash dividends of **22,000,000.00 Yuan** were received[376](index=376&type=chunk) [Goodwill](index=100&type=section&id=19.%20Goodwill) At the end of the period, the original book value of goodwill was **818 million Yuan**, primarily from the acquisitions of Tianjin Zhongke Jincai and Beijing Zhidongfang; accumulated impairment provisions amounted to **794 million Yuan**, resulting in a goodwill book value of **23.76 million Yuan**, with no new goodwill impairment recognized in the current reporting period | Item | Original Book Value (Yuan) | Impairment Provision (Yuan) | Book Value (Yuan) | | :--- | :--- | :--- | :--- | | Tianjin Zhongke Jincai | 624,031,391.94 | 624,031,391.94 | 0.00 | | Beijing Zhidongfang | 193,578,999.56 | 169,823,416.08 | 23,755,583.48 | | **Total** | **817,731,082.47** | **793,975,498.99** | **23,755,583.48** | [R&D Expenses](index=109&type=section&id=43.%20R%26D%20Expenses) During the reporting period, the company's total R&D expenses amounted to **98.33 million Yuan**, a 20.48% year-on-year increase, primarily composed of employee compensation, service fees, and depreciation expenses | Item | Current Period Amount (Yuan) | Prior Period Amount (Yuan) | | :--- | :--- | :--- | | Employee Compensation Payable | 50,040,063.89 | 54,986,853.85 | | Service Fees | 19,014,620.06 | 4,860,479.00 | | Depreciation Expense | 16,956,843.45 | 10,641,357.19 | | Equity Incentive Expenses | 2,148,018.16 | 5,566,232.91 | | **Total** | **98,327,859.61** | **81,611,152.27** | [Other Submitted Data](index=136&type=section&id=Section%20IX.%20Other%20Submitted%20Data) This section includes additional data submitted by the company, such as investor relations activities [Investor Relations Activities](index=136&type=section&id=II.%20Registration%20Form%20for%20Research%2C%20Communication%2C%20Interview%20Activities%20During%20the%20Reporting%20Period) During the reporting period, the company engaged with various institutional and individual investors through multiple channels, including phone calls, online platforms, and on-site visits, primarily discussing the company's business development - During the reporting period (February to May), the company frequently communicated with institutional and individual investors through various methods, including phone calls, online platforms, and on-site research[597](index=597&type=chunk)[598](index=598&type=chunk)[599](index=599&type=chunk)

[Key Financial Data and Indicators](index=1&type=section&id=I.%20Key%20Financial%20Data%20and%20Indicators%20for%20the%20First%20Half%20of%202025) In the first half of 2025, Qingdao Bank achieved robust performance growth with revenue up 7.50% and net profit attributable to shareholders up 16.05%, while total assets expanded by 7.69% and asset quality improved with non-performing loan ratio decreasing to 1.12% and provision coverage ratio increasing to 252.80% Key Financial Data and Indicators | Item | Jan-Jun 2025 (Thousand Yuan) | Jan-Jun 2024 (Thousand Yuan) | Change (%) | | :--- | :--- | :--- | :--- | | **Operating Revenue** | 7,662,414 | 7,128,085 | 7.50% | | **Net Profit Attributable to Parent Company Shareholders** | 3,064,683 | 2,640,917 | 16.05% | | **Basic Earnings Per Share (Yuan/share)** | 0.53 | 0.45 | 17.78% | | **Weighted Average Return on Net Assets (Annualized, %)** | 15.75% | 15.34% | Increased by 0.41 percentage points | | **Item** | **As of Jun 30, 2025 (Thousand Yuan)** | **As of Dec 31, 2024 (Thousand Yuan)** | **Change (%)** | | **Total Assets** | 743,027,546 | 689,963,033 | 7.69% | | **Equity Attributable to Parent Company Shareholders** | 46,078,064 | 43,932,381 | 4.88% | | **Non-Performing Loan Ratio (%)** | 1.12% | 1.14% | Decreased by 0.02 percentage points | | **Provision Coverage Ratio (%)** | 252.80% | 241.32% | Increased by 11.48 percentage points | [Explanation of Operating Performance and Financial Condition](index=2&type=section&id=II.%20Explanation%20of%20Operating%20Performance%20and%20Financial%20Condition) In the first half of 2025, the company adhered to its annual operating philosophy of 'professional enhancement, digital empowerment, system optimization, and distinctive drive,' actively implementing key financial initiatives to achieve simultaneous improvements in business scale, operating efficiency, and asset quality - The company fully implemented central, provincial, and municipal strategic deployments, committed to high-quality development, and further advanced key financial initiatives[5](index=5&type=chunk) [Steady Growth in Operating Scale](index=2&type=section&id=Steady%20Growth%20in%20Operating%20Scale) As of June 2025, the company's business scale steadily expanded, with total assets reaching **743.028 billion yuan**, a 7.69% increase from year-end, and customer loans and deposits growing by 8.14% and 7.90% respectively Operating Scale Growth | Item | As of Jun 2025 (Billion Yuan) | Growth Rate vs. Year-End (%) | | :--- | :--- | :--- | | **Total Assets** | 743.028 | 7.69% | | **Total Customer Loans** | 368.406 | 8.14% | | **Total Liabilities** | 695.944 | 7.89% | | **Total Customer Deposits** | 466.140 | 7.90% | [Robust Improvement in Profitability](index=2&type=section&id=Robust%20Improvement%20in%20Profitability) In the first half of 2025, the company's profitability significantly strengthened, with net profit attributable to parent company shareholders and operating revenue growing by 16.05% and 7.50% respectively, and basic earnings per share increasing by 17.78% to **0.53 yuan** Profitability Indicators | Indicator | First Half 2025 (Billion Yuan) | Year-over-Year Growth | | :--- | :--- | :--- | | **Net Profit Attributable to Parent Company Shareholders** | 3.065 | 16.05% | | **Operating Revenue** | 7.662 | 7.50% | | **Weighted Average Return on Net Assets (Annualized)** | 15.75% | Increased by 0.41 percentage points | | **Basic Earnings Per Share (Yuan)** | 0.53 | 17.78% | [Continued Improvement in Asset Quality](index=2&type=section&id=Continued%20Improvement%20in%20Asset%20Quality) As of June 2025, the company's asset quality continued to improve, with the non-performing loan ratio decreasing by **0.02 percentage points** to **1.12%**, and risk coverage strengthening as the provision coverage ratio increased by **11.48 percentage points** to **252.80%** Asset Quality Indicators | Indicator | As of Jun 2025 | Change vs. Year-End | | :--- | :--- | :--- | | **Non-Performing Loan Ratio** | 1.12% | Decreased by 0.02 percentage points | | **Provision Coverage Ratio** | 252.80% | Increased by 11.48 percentage points | [Reference Documents](index=2&type=section&id=III.%20Reference%20Documents) The reference documents for this performance express report include comparative balance sheets and income statements signed and sealed by the company's senior management, including the legal representative, president, vice president in charge of finance, and general manager of the finance department - Reference documents include comparative balance sheets and income statements signed and sealed by the bank's current legal representative and Chairman Mr. Jing Zailun, President Mr. Wu Xianming, Vice President in charge of finance Ms. Chen Shuang, and General Manager of the Planning and Finance Department Mr. Li Zhendong[7](index=7&type=chunk)

[Important Notes, Table of Contents and Definitions](index=2&type=section&id=Item%201.%20Important%20Notes%2C%20Table%20of%20Contents%20and%20Definitions) [Important Notes](index=2&type=section&id=Important%20Notes) The company's board of directors, audit committee, and all senior executives guarantee the truthfulness, accuracy, and completeness of this semi-annual report, assuming legal responsibility for no false statements, misleading representations, or material omissions - Company management ensures the truthfulness, accuracy, and completeness of the report, assuming corresponding legal responsibilities[4](index=4&type=chunk) [Risk Warnings](index=2&type=section&id=Risk%20Warnings) The company faces five main risks: raw material price fluctuations, product price declines, technology substitution, industry overcapacity, and macroeconomic and policy changes - The company faces key operational risks including: - **Raw Material Price Volatility Risk**: Fluctuations in primary graphite and coke raw material prices may impact the company's profitability[5](index=5&type=chunk) - **Product Price Decline Risk**: Intense market competition, changes in downstream demand, and industry cost reduction trends may lead to lower anode material prices[6](index=6&type=chunk)[7](index=7&type=chunk) - **Technology Substitution Risk**: If the company's R&D lags behind the development of new battery material technologies, it may adversely affect future operations[8](index=8&type=chunk) - **Overcapacity Risk**: Industry expansion and new entrants may lead to slower-than-expected market demand growth and overcapacity[9](index=9&type=chunk) - **Macroeconomic and Policy Change Risk**: Adjustments in new energy industry policies and macroeconomic uncertainties may affect the company's performance[10](index=10&type=chunk)[11](index=11&type=chunk) [Profit Distribution Plan](index=4&type=section&id=Profit%20Distribution%20Plan) The company plans no cash dividends, bonus shares, or capital increase from capital reserves for the 2025 semi-annual period - The company has no plans for cash dividends or share transfers during this reporting period[12](index=12&type=chunk) [Definitions](index=7&type=section&id=Definitions) This section defines professional terms used in the report, covering company entities, key customers, lithium battery industry technologies, and critical performance indicators [Company Profile and Key Financial Indicators](index=9&type=section&id=Item%202.%20Company%20Profile%20and%20Key%20Financial%20Indicators) [Company Profile](index=9&type=section&id=Company%20Profile) Shanghai Xiangfenghua Technology Co Ltd (stock code 300890) is a Shenzhen Stock Exchange-listed company primarily engaged in the R&D, production, and sales of lithium battery anode materials Company Information | Item | Content | | :--- | :--- | | **Stock Abbreviation** | Xiangfenghua | | **Stock Code** | 300890 | | **Listing Exchange** | Shenzhen Stock Exchange | | **Company Name** | Shanghai Xiangfenghua Technology Co Ltd | | **Legal Representative** | Zhao Donghui | [Key Accounting Data and Financial Indicators](index=10&type=section&id=Key%20Accounting%20Data%20and%20Financial%20Indicators) During the reporting period, the company's operating revenue decreased by 2.80% to RMB 687.59 million, resulting in a net loss of RMB 2.95 million due to product price declines, and operating cash flow significantly decreased by 364.68% Key Financial Indicators | Key Financial Indicators | Current Reporting Period (RMB) | Prior Year Period (RMB) | YoY Change | | :--- | :--- | :--- | :--- | | **Operating Revenue** | 687,591,351.12 | 707,372,276.94 | -2.80% | | **Net Profit Attributable to Shareholders** | -2,945,933.47 | 38,240,844.00 | -107.70% | | **Net Profit Excluding Non-Recurring Items** | -14,797,234.41 | 24,807,682.81 | -159.65% | | **Net Cash Flow from Operating Activities** | -181,443,834.19 | 68,551,196.79 | -364.68% | | **Basic Earnings Per Share (RMB/share)** | -0.0247 | 0.3497 | -107.06% | | **Weighted Average Return on Net Assets** | -0.14% | 1.99% | -2.13% | | **Total Assets** | 4,711,012,343.51 | 4,436,207,714.82 (End of Prior Year) | 6.19% | [Non-Recurring Gains and Losses Items and Amounts](index=11&type=section&id=Non-Recurring%20Gains%20and%20Losses%20Items%20and%20Amounts) During the reporting period, the company's non-recurring gains and losses totaled RMB 11.85 million, primarily from government subsidies and other non-operating income and expenses Non-Recurring Gains and Losses | Item | Amount (RMB) | | :--- | :--- | | Government subsidies included in current profit/loss | 8,773,118.80 | | Fair value changes in financial assets/liabilities | 841,748.38 | | Net other non-operating income and expenses | 4,471,847.50 | | **Total** | **11,851,300.94** | [Management Discussion and Analysis](index=12&type=section&id=Item%203.%20Management%20Discussion%20and%20Analysis) [Main Businesses of the Company During the Reporting Period](index=12&type=section&id=I.%20Main%20Businesses%20of%20the%20Company%20During%20the%20Reporting%20Period) The company's core business is the R&D, production, and sales of lithium battery anode materials, with graphite anode materials widely used in power, 3C consumer electronics, and industrial energy storage - The company's core business is graphite anode materials, applied in new energy vehicles, consumer electronics, and energy storage sectors[35](index=35&type=chunk) - The company operates a mature and stable business model, primarily based on production-to-order and direct sales[35](index=35&type=chunk) Key Financial Performance | Financial Indicator | H1 2025 | YoY Change | | :--- | :--- | :--- | | **Operating Revenue** | RMB 688 million | -2.80% | | **Net Profit Attributable to Parent** | RMB -2.95 million | -107.70% | - Performance decline is primarily due to a temporary supply-demand imbalance in the graphite anode material industry, intense market competition, leading to product price reductions and lower gross margins[38](index=38&type=chunk) [Core Competitiveness Analysis](index=13&type=section&id=II.%20Core%20Competitiveness%20Analysis) The company's core competitiveness stems from its technological R&D, core team, and customer resources, including 71 authorized invention patents and strategic partnerships - **Technology and R&D Advantages**: The company boasts a complete product line, adheres to a technology roadmap emphasizing both artificial and natural graphite, holds 71 authorized invention patents as of the reporting period end, and collaborates with universities like Tsinghua University Shenzhen Graduate School for industry-academia-research initiatives[39](index=39&type=chunk)[40](index=40&type=chunk) - **Core Team Advantages**: The core management team, led by individuals with materials science backgrounds from Tsinghua University, possesses over a decade of experience in lithium battery materials[40](index=40&type=chunk) - **Customer Advantages**: The company has cultivated high-quality clients such as LG Energy Solution, Gotion High-tech, and BYD, while actively expanding into international markets including PowerCo SE (Germany) and SK on (South Korea)[41](index=41&type=chunk) [Main Business Analysis](index=14&type=section&id=III.%20Main%20Business%20Analysis) During the reporting period, the company's anode material revenue decreased by 3.04% to RMB 684.12 million, with gross margin falling by 6.23 percentage points to 12.35% due to lower product unit prices Key Financial Data Changes | Key Financial Data | Current Reporting Period (RMB) | Prior Year Period (RMB) | YoY Change | Reason for Change | | :--- | :--- | :--- | :--- | :--- | | **Operating Revenue** | 687,591,351.12 | 707,372,276.94 | -2.80% | Increased industry competition, lower product unit prices | | **Selling Expenses** | 13,440,556.54 | 21,549,360.75 | -37.63% | Decrease in business expenses | | **Net Cash Flow from Operating Activities** | -181,443,834.19 | 68,551,196.79 | -364.68% | Decrease in customer cash collections | | **Net Cash Flow from Financing Activities** | 365,011,050.18 | -172,665,603.14 | -311.40% | Increase in bank borrowings | | **Construction in Progress** | 557,419,741.40 | 361,496,966.29 | 54.20% | Construction of Shanghai North-South Zone projects | | **Short-term Borrowings** | 566,688,381.64 | 331,492,332.21 | 70.95% | Increase in bank borrowings | | **Long-term Borrowings** | 586,156,378.93 | 398,511,626.03 | 47.09% | Increase in special loans for Shanghai North-South Zone construction | Revenue and Gross Margin by Product | By Product | Operating Revenue (RMB) | Operating Cost (RMB) | Gross Margin | YoY Operating Revenue Change | YoY Gross Margin Change | | :--- | :--- | :--- | :--- | :--- | :--- | | **Anode Materials** | 684,122,026.46 | 599,624,124.87 | 12.35% | -3.04% | -6.23% | [Analysis of Assets and Liabilities](index=16&type=section&id=V.%20Analysis%20of%20Assets%20and%20Liabilities) As of the reporting period end, the company's total assets were RMB 4.71 billion, a 6.19% increase from the end of the previous year, with significant growth in construction in progress and borrowings - Construction in progress balance at period-end was **RMB 557.42 million**, a 54.20% increase from the end of the previous year, primarily due to investment in the Shanghai North-South Zone engineering projects[52](index=52&type=chunk) - Short-term and long-term borrowings at period-end were **RMB 566.69 million** and **RMB 586.16 million** respectively, increasing by 70.95% and 47.09% from the end of the previous year, mainly due to increased bank borrowings[52](index=52&type=chunk) Restricted Assets | Item | Book Value at Period-End (RMB) | Restriction Status | | :--- | :--- | :--- | | **Monetary Funds** | 115,286,173.04 | Deposits and frozen funds | | **Notes Receivable** | 51,564,385.23 | Pledged | | **Fixed Assets** | 129,392,466.54 | Loan collateral | | **Intangible Assets** | 174,678,904.13 | Loan collateral | | **Construction in Progress** | 485,631,032.93 | Loan collateral | | **Total** | **956,552,961.87** | / | [Investment Analysis](index=19&type=section&id=VI.%20Investment%20Analysis) During the reporting period, the company's investment amounted to RMB 862 million, a 7.48% year-on-year increase, primarily focused on significant non-equity projects like R&D center construction and production bases - The investment amount for the reporting period was **RMB 862 million**, a 7.48% year-on-year increase[58](index=58&type=chunk) Major Non-Equity Investment Projects | Major Non-Equity Investment Project | Amount Invested in Current Period (RMB) | Cumulative Investment as of Period-End (RMB) | Project Progress | | :--- | :--- | :--- | :--- | | **R&D Center Construction Project** | 28,131,301.00 | 113,712,466.00 | 90.97% | | **60,000-ton Artificial Graphite Anode Material Integrated Production Base** | 34,260,246.45 | 228,566,908.44 | 66.91% | | **Shanghai Tanfeng Sci-Tech Innovation Center** | 177,733,150.82 | 467,430,002.63 | 27.48% | - Progress of raised capital projects has slowed due to objective factors: - **R&D Center Construction Project**: The original implementation site's building load-bearing capacity was insufficient, so the location was changed to Shanghai Tanfeng Sci-Tech Innovation Industrial Park, with an estimated completion time extended to July 2026[72](index=72&type=chunk) - **60,000-ton Artificial Graphite Anode Material Integrated Production Base Project**: Due to delays in land supply, the estimated completion time has been extended to December 2026[72](index=72&type=chunk)[73](index=73&type=chunk) [Analysis of Major Holding and Participating Companies](index=27&type=section&id=VIII.%20Analysis%20of%20Major%20Holding%20and%20Participating%20Companies) The company's major subsidiaries include Fujian Xiangfenghua and Sichuan Xiangfenghua, with Fujian Xiangfenghua being the primary production base and Sichuan Xiangfenghua under construction Major Subsidiaries' Financial Performance (H1 2025) | Major Subsidiary | Total Assets (RMB ten thousand) | Net Assets (RMB ten thousand) | Operating Revenue (RMB ten thousand) | Net Profit (RMB ten thousand) | | :--- | :--- | :--- | :--- | :--- | | **Fujian Xiangfenghua** | 313,918.61 | 129,460.04 | 66,861.86 | 710.49 | | **Sichuan Xiangfenghua** | 103,351.55 | 29,593.36 | 10,898.85 | -243.60 | | **Hainan Xiangfenghua** | 15,405.40 | 7,304.45 | 11,999.52 | 1,402.66 | | **Shanghai Xiangfenghua** | 72,565.18 | 20,333.42 | 0.00 | -97.60 | - On July 25, 2025, the company established a new controlling subsidiary, "Sichuan Xiangzhan Zhenhua New Material Technology Co Ltd," with the company holding 60% equity, primarily engaged in new material technology R&D, graphite and carbon product manufacturing, and sales[86](index=86&type=chunk)[87](index=87&type=chunk) [Corporate Governance, Environment and Society](index=33&type=section&id=Item%204.%20Corporate%20Governance%2C%20Environment%20and%20Society) [Changes in Directors, Supervisors, and Senior Management](index=33&type=section&id=I.%20Changes%20in%20Directors%2C%20Supervisors%2C%20and%20Senior%20Management) During the reporting period, the company underwent a board and supervisory board re-election on June 30, 2025, leading to changes in several directors, supervisors, and senior management positions - On June 30, 2025, due to re-election, several directors, supervisors, and senior management personnel changed, including the election of Zhou Pengwei as Chairman and Zhao Donghui as Vice Chairman and General Manager[95](index=95&type=chunk) - The company plans no cash dividends, bonus shares, or capital increase from capital reserves for the semi-annual period[96](index=96&type=chunk) [Environmental Information Disclosure](index=35&type=section&id=IV.%20Environmental%20Information%20Disclosure) The company and its major subsidiaries are not included in the list of enterprises required to disclose environmental information by law, but actively fulfill social responsibilities - The company actively fulfills its social responsibilities, donating **RMB 1 million** to the Tsinghua University Education Foundation in the first half of the year and providing local employment opportunities[98](index=98&type=chunk) [Significant Matters](index=36&type=section&id=Item%205.%20Significant%20Matters) [Commitments Fulfilled and Overdue Unfulfilled Commitments by Controlling Shareholders, Shareholders, Related Parties, Acquirers, and the Company](index=36&type=section&id=I.%20Commitments%20Fulfilled%20and%20Overdue%20Unfulfilled%20Commitments%20by%20Controlling%20Shareholders%2C%20Shareholders%2C%20Related%20Parties%2C%20Acquirers%2C%20and%20the%20Company) During the reporting period, the company and related parties strictly fulfilled all commitments made during initial public offerings, refinancing, and equity incentive activities, with no violations observed - The company and related parties strictly fulfilled all public commitments during the reporting period, with no violations observed[100](index=100&type=chunk) [Significant Related Party Transactions](index=64&type=section&id=XI.%20Significant%20Related%20Party%20Transactions) During the reporting period, the company engaged in routine related party transactions with Yong'an Dingfeng Carbon Technology Co Ltd, totaling RMB 10.33 million, within the approved annual limit Related Party Transactions | Related Party | Related Transaction Content | Amount Incurred in Current Period (RMB ten thousand) | Approved Transaction Limit (RMB ten thousand) | Exceeded Limit | | :--- | :--- | :--- | :--- | :--- | | Yong'an Dingfeng Carbon Technology Co Ltd | Acceptance of processing services | 739.66 | 2,000 | No | | Yong'an Dingfeng Carbon Technology Co Ltd | Lease of factory buildings and equipment, sale of electricity | 293.00 | 701 | No | [Significant Contracts and Their Performance](index=70&type=section&id=XII.%20Significant%20Contracts%20and%20Their%20Performance) During the reporting period, the company provided significant guarantees for its subsidiaries, with a total approved guarantee limit of RMB 3.10 billion and an actual outstanding guarantee balance of RMB 1.14 billion Guarantee Information | Guarantee Status | Amount (RMB ten thousand) | | :--- | :--- | | **Total approved guarantee limit for subsidiaries at period-end** | 310,099.5 | | **Total actual guarantee balance for subsidiaries at period-end** | 113,989.33 | - The actual total guarantee amount accounts for **52.60%** of the company's net assets[157](index=157&type=chunk) [Changes in Shares and Shareholder Information](index=78&type=section&id=Item%206.%20Changes%20in%20Shares%20and%20Shareholder%20Information) [Changes in Shares](index=78&type=section&id=I.%20Changes%20in%20Shares) During the reporting period, the company's total share capital increased by 673 shares to 119,032,152 shares due to the conversion of "Xiangfeng Convertible Bonds" - During the reporting period, the company's total share capital increased by **673 shares** due to the conversion of "Xiangfeng Convertible Bonds"[163](index=163&type=chunk) Share Capital Changes | Share Class | Quantity Before Change | Quantity After Change | Proportion After Change | | :--- | :--- | :--- | :--- | | **Restricted Shares** | 12,079,360 | 10,438,885 | 8.77% | | **Unrestricted Shares** | 106,952,119 | 108,593,267 | 91.23% | | **Total Share Capital** | **119,031,479** | **119,032,152** | **100.00%** | [Number of Shareholders and Shareholding Information](index=79&type=section&id=III.%20Number%20of%20Shareholders%20and%20Shareholding%20Information) As of the reporting period end, the company had 24,817 common shareholders, with the top ten shareholders' holdings remaining relatively stable - As of the end of the reporting period, the company had a total of **24,817** common shareholders[167](index=167&type=chunk) Top Five Shareholders | Top Five Shareholders | Shareholding Percentage | Shares Held at Period-End | | :--- | :--- | :--- | | Zhou Pengwei | 11.29% | 13,433,514 | | Zhong Yinghao | 5.00% | 5,951,473 | | Lei Zuyun | 2.00% | 2,377,333 | | Huizhou Zhongcheng Zhiyuan Enterprise Management Center | 1.70% | 2,025,913 | | Golden Eagle Fund - Wu Haiyi - Golden Eagle Optimal 196 | 1.61% | 1,916,900 | [Bond-Related Information](index=84&type=section&id=Item%207.%20Bond-Related%20Information) [Convertible Corporate Bonds](index=84&type=section&id=IV.%20Convertible%20Corporate%20Bonds) The company's "Xiangfeng Convertible Bonds" were in their conversion period during the reporting period, with RMB 226.51 million already converted into shares, representing 28.31% of the total issuance - The company's convertible corporate bonds, "Xiangfeng Convertible Bonds" (code 123225), were issued in October 2023, with a total amount of **RMB 800 million** and a term of **6 years**[178](index=178&type=chunk)[562](index=562&type=chunk) Convertible Bond Status | Item | Amount/Quantity | | :--- | :--- | | **Unconverted Amount (RMB)** | 573,488,100.00 | | **Cumulative Converted Amount (RMB)** | 226,511,900.00 | | **Cumulative Converted Shares (shares)** | 8,241,411 | | **Proportion of Unconverted Amount to Total Issuance** | 71.69% | - The conversion price underwent several adjustments during the reporting period, with the latest conversion price at period-end being **RMB 27.44/share**[185](index=185&type=chunk) - China Chengxin International Credit Rating Co Ltd's latest credit rating for the company and its bonds is **AA-**, with a stable outlook[188](index=188&type=chunk) [Financial Report](index=88&type=section&id=Item%208.%20Financial%20Report) [Financial Statements](index=88&type=section&id=Financial%20Statements) This semi-annual financial report is unaudited, presenting consolidated and parent company statements that show steady asset growth but deteriorating profitability and cash flow Consolidated Financial Statement Summary | Consolidated Statement Key Item | Period-End Balance / Current Period Amount (RMB) | | :--- | :--- | | **Total Assets** | 4,711,012,343.51 | | **Total Liabilities** | 2,452,503,616.78 | | **Total Owners' Equity** | 2,258,508,726.73 | | **Total Operating Revenue** | 687,591,351.12 | | **Net Profit** | -3,385,128.92 | | **Net Profit Attributable to Parent Company Owners** | -2,945,933.47 | | **Net Cash Flow from Operating Activities** | -181,443,834.19 | [Consolidated Balance Sheet](index=88&type=section&id=Consolidated%20Balance%20Sheet) As of June 30, 2025, the company's total assets were RMB 4.71 billion, total liabilities RMB 2.45 billion, and owners' equity attributable to the parent company RMB 2.17 billion, with an asset-liability ratio of 52.06% [Consolidated Income Statement](index=92&type=section&id=Consolidated%20Income%20Statement) In the first half of 2025, the company achieved operating revenue of RMB 688 million, with total operating costs of RMB 704 million, resulting in an operating loss of RMB 11.05 million and a net loss of RMB 3.39 million [Consolidated Cash Flow Statement](index=96&type=section&id=Consolidated%20Cash%20Flow%20Statement) During the reporting period, net cash flow from operating activities was RMB -181.44 million, from investing activities RMB -186 million, and from financing activities RMB 365 million, leading to a net decrease in cash and cash equivalents of RMB 2.36 million [Notes to Financial Statements](index=105&type=section&id=Notes%20to%20Financial%20Statements) The financial statement notes detail the company's basic information, financial statement preparation basis, significant accounting policies and estimates, and provide detailed explanations for key items in the consolidated financial statements

[Important Notice, Table of Contents, and Definitions](index=2&type=section&id=%E7%AC%AC%E4%B8%80%E8%8A%82%20%E9%87%8D%E8%A6%81%E6%8F%90%E7%A4%BA%E3%80%81%E7%9B%AE%E5%BD%95%E5%92%8C%E9%87%8A%E4%B9%89) [Company Profile and Key Financial Indicators](index=7&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) During the reporting period, the company experienced significant declines in both operating revenue and net profit, with operating revenue decreasing by **15.94%** year-on-year and net profit attributable to shareholders plummeting by **83.12%**, or **68.24%** after deducting non-recurring gains and losses; total assets slightly increased by **0.43%** while net assets attributable to shareholders marginally decreased by **0.73%** [Key Accounting Data and Financial Indicators](index=8&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 faced significant performance pressure during the reporting period, with operating revenue at **1.075 billion CNY**, a **15.94%** year-on-year decrease, and net profit attributable to parent company shareholders at **34.04 million CNY**, a sharp **83.12%** decline; basic earnings per share were **0.0556 CNY/share**, down **83.25%**, and net cash flow from operating activities was **161.79 million CNY**, a **23.93%** decrease Key Accounting Data and Financial Indicators | Indicator | Current Period | Prior Year Period | YoY Change | | :--- | :--- | :--- | :--- | | Operating Revenue (CNY) | 1,075,034,096.39 | 1,278,911,868.07 | -15.94% | | Net Profit Attributable to Shareholders (CNY) | 34,042,488.83 | 201,725,714.09 | -83.12% | | Net Profit Attributable to Shareholders (Excl. Non-Recurring Items) (CNY) | 63,056,198.41 | 198,561,803.72 | -68.24% | | Net Cash Flow from Operating Activities (CNY) | 161,789,633.02 | 212,680,247.22 | -23.93% | | Basic EPS (CNY/share) | 0.0556 | 0.3320 | -83.25% | | Weighted Average ROE | 0.53% | 3.11% | -2.58% | | **Indicator** | **End of Current Period** | **End of Prior Year** | **YoY Change** | | Total Assets (CNY) | 8,010,813,632.54 | 7,976,306,737.10 | 0.43% | | Net Assets Attributable to Shareholders (CNY) | 6,322,440,254.33 | 6,369,056,728.78 | -0.73% | [Non-Recurring Gains and Losses and Amounts](index=8&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) During the reporting period, the company's total non-recurring gains and losses amounted to **-29.01 million CNY**, primarily influenced by a **10.92 million CNY** loss from fair value changes in other non-current financial assets and **27.23 million CNY** in other non-operating expenses due to tax surcharges and equipment write-offs Non-Recurring Gains and Losses (CNY) | Item | Amount (CNY) | Description | | :--- | :--- | :--- | | Gains/Losses on Disposal of Non-Current Assets | 1,995,701.15 | - | | Government Grants Recognized in Current P&L | 7,195,511.01 | - | | Gains/Losses from Fair Value Changes of Financial Assets/Liabilities | -10,920,599.85 | Primarily fair value change losses on other non-current financial assets during the reporting period | | Other Non-Operating Income and Expenses | -27,228,990.61 | Primarily tax surcharges paid and equipment write-offs due to updates during the reporting period | | **Total** | **-29,013,709.58** | - | [Management Discussion and Analysis](index=10&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) [Company's Main Business, Operating Model, and Performance Drivers](index=10&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 specializes in R&D, production, sales, and service of in vitro diagnostic (IVD) products, forming a complete industry chain covering biochemical, immunoassay, and molecular diagnostics platforms; despite challenges, autonomous product revenue share increased to **81.11%** and multiple products won centralized procurement bids, laying a foundation for future growth - The company is a leading IVD enterprise in China with one of the most comprehensive product lines, covering biochemical, immunoassay, hematology, and molecular diagnostics platforms, and offering laboratory automation solutions[42](index=42&type=chunk)[50](index=50&type=chunk) - Performance decline is primarily attributed to: 1) revenue structure changes due to **divestment of agency business**; 2) intensified market competition from industry policies (e.g., centralized procurement, mutual recognition of test results) leading to both volume and price reductions; 3) a **22 million CNY** year-on-year increase in credit impairment losses; and 4) a **20 million CNY** reduction in current net profit due to **back taxes and late fees** for 2021-2023[51](index=51&type=chunk) Business Segment Performance (2025 H1) | Business Segment | 2025 H1 Revenue / Share | YoY Change | Key Driving Factors | | :--- | :--- | :--- | :--- | | **Autonomous Products** | 872 million CNY / 81.11% | Revenue -6.49%, Sales +3.79% | Instrument installations (2,409 new units/lines), centralized procurement wins driving sales growth | | **Agency Products** | 193 million CNY / 18.89% | Revenue -42.16% | Company strategically divested agency business to focus on autonomous products | | **Overseas Market** | 108 million CNY | Revenue +37.59% | Active expansion in international markets, 220 new overseas registrations | - The company's chemiluminescence (infectious diseases, sex hormones, tumor markers, etc.) and biochemical (renal function, myocardial enzymes, glucose metabolism, etc.) products were selected into Group A in provincial alliance centralized procurement in Anhui, Jiangxi, and other regions, with centralized procurement wins driving significant sales growth for related products, such as a **21.17%** year-on-year increase in tumor marker sales[54](index=54&type=chunk) [Core Competitiveness Analysis](index=18&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 comprehensive "8+1" product platform and smart laboratory solutions, sustained high R&D investment (accounting for **22.38%** of autonomous product revenue) with over **60%** core raw material self-sufficiency, an international-standard full lifecycle quality management and metrological traceability system, and a global marketing network covering **106** countries and regions providing full-cycle laboratory ecosystem empowerment services - **Product Innovation**: Established an "8+1" product platform covering biochemical, immunoassay, and hematology fields, with **519** autonomous product registrations capable of meeting **80%** of medical institutions' project needs, while also launching the Mike "Smart Lab" solution to promote laboratory automation and intelligence upgrades[60](index=60&type=chunk)[61](index=61&type=chunk)[62](index=62&type=chunk) - **Technological Innovation**: Maintained high R&D investment, with **195 million CNY** invested during the reporting period, accounting for **22.38%** of autonomous product revenue, supported by **1,076** R&D personnel and achieving over **60%** core raw material self-sufficiency, ensuring independent control of key technologies[63](index=63&type=chunk)[64](index=64&type=chunk) - **Quality System**: Established a quality control system covering the entire product lifecycle, with its testing center laboratory accredited by CNAS; the company is the first Chinese enterprise representative in JCTLM, having established nearly **90** reference methods, demonstrating industry-leading metrological traceability capabilities[66](index=66&type=chunk)[67](index=67&type=chunk)[69](index=69&type=chunk) - **Global Marketing Network**: Overseas business covers **106** countries and regions, collaborating with over **400** distributors, with overseas sales revenue increasing by **37.59%** year-on-year during the reporting period; the domestic market covers over **9,400** medical institutions, with a **59%** coverage rate in tertiary hospitals[71](index=71&type=chunk)[72](index=72&type=chunk) [Main Business Analysis](index=21&type=section&id=%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 main business revenue was **1.075 billion CNY**, a **15.94%** year-on-year decrease, with a gross profit margin of **56.96%**, largely consistent with the prior year; the performance decline was primarily due to a **42.16%** drop in agency product revenue, while autonomous product revenue, despite a **6.49%** year-on-year decrease, maintained a high gross profit margin of **71.24%**; by region, overseas business showed strong growth, with revenue increasing by **37.59%** year-on-year and gross profit margin improving by **7.37** percentage points Main Business Performance by Category and Region | Category | Operating Revenue (CNY) | Operating Cost (CNY) | Gross Profit Margin | Revenue YoY Change | Cost YoY Change | Gross Profit Margin YoY Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **Total** | **1,075,034,096.39** | **462,706,408.47** | **56.96%** | **-15.94%** | **-15.86%** | **-0.04%** | | Autonomous Products | 871,985,074.94 | 250,802,155.93 | 71.24% | -6.49% | -2.47% | -1.18% | | Agency Products | 193,072,426.78 | 208,303,051.28 | -7.89% | -42.16% | -27.71% | -21.57% | | Southwest Region | 393,994,543.97 | 189,019,598.08 | 52.02% | -19.67% | -13.68% | -3.33% | | East China Region | 217,017,515.45 | 89,748,037.63 | 58.64% | -13.70% | -20.60% | 3.59% | | Overseas Region | 107,805,168.24 | 56,231,556.18 | 47.84% | 37.59% | 20.57% | 7.37% | [Analysis of Assets and Liabilities](index=22&type=section&id=%E4%BA%94%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) As of the end of the reporting period, the company's total assets were **8.011 billion CNY**, a slight increase of **0.43%** from the beginning of the period, with changes in asset structure including a **15.53%** decrease in accounts receivable due to enhanced collection management, a **14.85%** increase in inventory due to increased finished instrument stock, and a **12.34%** increase in construction in progress due to higher investment in the IVD industrial park project; on the liability side, short-term and long-term borrowings increased by **30.04%** and **169.81%** respectively to meet project funding needs Asset and Liability Changes | Asset/Liability Item | Period-End Balance (CNY) | Change from Prior Year-End | Main Reasons for Change | | :--- | :--- | :--- | :--- | | Accounts Receivable | 1,320,355,324.96 | -15.53% | Strengthened accounts receivable management, accelerated collection | | Inventory | 1,035,486,438.13 | +14.85% | Increased finished instrument inventory to support smart laboratory promotion | | Construction in Progress | 1,239,206,813.41 | +12.34% | Increased investment in Tianfu International Bio-City IVD Industrial Park project | | Short-Term Borrowings | 331,715,986.27 | +30.04% | Increased short-term borrowings based on financing needs | | Long-Term Borrowings | 496,763,065.97 | +169.81% | Increased project loans to meet industrial park project investment | [Investment Analysis](index=24&type=section&id=%E5%85%AD%E3%80%81%E6%8A%95%E8%B5%84%E7%8A%B6%E5%86%B5%E5%88%86%E6%9E%90) During the reporting period, the company's total investment was **359 million CNY**, a **22.81%** year-on-year decrease, with significant non-equity investments primarily in the "Mike Bio Tianfu International Bio-City IVD Industrial Park Project," which has a total planned investment of **2.08 billion CNY** and has accumulated **1.229 billion CNY** in investment as of the end of the reporting period, reaching **59.07%** project progress; regarding raised funds, the company modified and extended some of its fundraising projects, terminating the "Instant Diagnostic Product Production Line Sub-project" and reallocating the remaining funds to the "IVD Product Technology R&D Center Sub-project" - The company's most significant investment project is the "Tianfu International Bio-City IVD Industrial Park," with **132 million CNY** invested during the reporting period and a cumulative investment of **1.229 billion CNY**, funded by raised capital, loans, and self-owned funds[87](index=87&type=chunk) - Regarding the use of raised funds, the company terminated the "Instant Diagnostic Product Production Line" sub-project due to insufficient technical and channel competitiveness, reallocating the remaining **86.91 million CNY** to the "IVD Product Technology R&D Center" sub-project[93](index=93&type=chunk)[99](index=99&type=chunk) - Due to external environmental impacts and extended equipment procurement and debugging cycles, the company repeatedly extended the completion dates for the "Tianfu International Bio-City IVD Industrial Park Project" and the "Informationization and Marketing Network Construction Project"[96](index=96&type=chunk)[97](index=97&type=chunk) [Risks and Countermeasures](index=31&type=section&id=%E5%8D%81%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 key risks including policy changes, intensified market competition, technological innovation and leakage, talent loss, and raw material supply risks; specifically, medical reform policies like centralized procurement and DRGs/DIP payment may compress profit margins, industry competition has escalated from product upgrades to business model competition, protecting core technologies and retaining key talent are ongoing challenges for sustainable development, and reliance on imported core raw materials poses supply shortage risks; the company actively responds by closely monitoring policies, enhancing comprehensive competitiveness, improving confidentiality and incentive mechanisms, and increasing raw material self-research - **Policy Change Risk**: Policies such as centralized procurement, separation of technical services and consumables, and DRGs/DIP payments will compress corporate profit margins and accelerate industry consolidation; the company responds by closely monitoring policies and flexibly adjusting its operating strategies[108](index=108&type=chunk) - **Intensified Market Competition Risk**: Industry competition has escalated from single-product pricing to comprehensive competition in capital, product organization, and integrated service capabilities; the company enhances its competitiveness by improving product, channel, and R&D capabilities[109](index=109&type=chunk) - **Technological Innovation and Leakage Risk**: R&D innovation carries uncertainties, and most core technologies exist in non-patent forms, posing leakage risks; the company addresses this by increasing R&D investment and improving confidentiality mechanisms[111](index=111&type=chunk) - **Raw Material Supply Risk**: The domestic IVD industry's core raw materials still primarily rely on imports, facing supply shortage risks from trade frictions; the company mitigates this risk by increasing investment in raw material self-research to enhance self-sufficiency[113](index=113&type=chunk) [Corporate Governance, Environment, and Society](index=34&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) [Changes in Directors, Supervisors, and Senior Management](index=34&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) During the reporting period, due to the company's board of directors and supervisory board re-election, some directors, supervisors, and senior management members changed, with Yang Hui, Fu Daiguo, Wang Lin, and Deng Hong leaving their original positions upon term expiration, while Deng Hong was elected as a new director, Xia Changyuan, Liu Yi, and Chen Xiaoli were elected as new independent directors or supervisors, and Lin Xin was appointed as a senior director - On January 13, 2025, due to re-election, several directors, supervisors, and senior management personnel of the company changed, including the departure of some individuals and the election and appointment of new members[120](index=120&type=chunk) [Implementation of Equity Incentive Plans](index=34&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 launched a restricted stock incentive plan in 2024, but in June 2025, after deliberation by the board of directors, supervisory board, and general meeting of shareholders, it was decided to terminate the plan, consequently repurchasing and canceling the already granted first-class restricted shares and invalidating the granted second-class restricted shares - In June 2024, the company granted **7.3029 million** restricted shares to **117** incentive recipients[124](index=124&type=chunk)[125](index=125&type=chunk) - In June 2025, the company decided to terminate the 2024 restricted stock incentive plan and repurchase, cancel, and invalidate all granted restricted shares[126](index=126&type=chunk) [Social Responsibility (ESG)](index=35&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) In environmental protection, the company organized the "Old Material Flow" World Earth Day event and four consecutive years of "Clean Mountain Action" parent-child environmental public welfare activities to enhance employee environmental awareness and practice green concepts; in community service, the company established the "Maidou Study Club" public welfare project, offering IVD and biomedical knowledge popularization to young people, with **202** students from multiple schools participating - **Environmental Protection**: Promoted a zero-waste lifestyle and organized employees and their families to participate in environmental practices through activities like "Old Material Flow" and "Clean Mountain Action"[127](index=127&type=chunk)[128](index=128&type=chunk) - **Community Service and Science Popularization**: Established the "Maidou Study Club" public welfare project, providing free IVD industry science education and practical platforms for young people, attracting **202** students from **5** schools[130](index=130&type=chunk) [Significant Matters](index=37&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) [Significant Guarantees](index=40&type=section&id=%E4%BA%8C%E3%80%81%E9%87%8D%E5%A4%A7%E6%8B%85%E4%BF%9D) As of the end of the reporting period, the company's actual total guarantees amounted to **605 million CNY**, representing **9.57%** of the company's net assets, including **342 million CNY** in external guarantees provided to distributors and **263 million CNY** in guarantees provided to its subsidiary, Mike Medical Actual Guarantee Balances (CNY) | Guarantee Type | Actual Guarantee Balance at Period-End (CNY) | | :--- | :--- | | External Guarantees (for Distributors) | 342,000,000.00 | | Guarantees for Subsidiaries (Mike Medical) | 263,070,100.00 | | **Total** | **605,070,100.00** | - The company's actual total guarantee amount accounts for **9.57%** of its net assets[150](index=150&type=chunk) [Significant Matters of Subsidiaries](index=42&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) During the reporting period, to advance its globalization strategy, the company established new wholly-owned subsidiaries in Thailand and Hong Kong; concurrently, to focus on core businesses and optimize channels, the company transferred its **52%** equity in controlling subsidiary Shanxi Mike and **51%** equity in Shandong Mike - **New Subsidiaries**: Established sales and service subsidiaries in Thailand and a global marketing network holding platform in Hong Kong to advance the "16+1" globalization strategy[155](index=155&type=chunk) - **Disposal of Subsidiaries**: To optimize resource allocation, the company transferred its controlling stakes in Shanxi Mike and Shandong Mike for **8.28 million CNY** and **17.41 million CNY**, respectively[156](index=156&type=chunk) [Share Changes and Shareholder Information](index=43&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) [Share Changes](index=43&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) During the reporting period, the company's total share capital remained unchanged at **612,469,590** shares; due to changes in directors, supervisors, and senior management, restricted shares increased by **980,256** shares, with a corresponding decrease in unrestricted shares; additionally, the company completed its share repurchase plan, accumulating **3.958 million** shares at a total cost of approximately **50.02 million CNY**, later deciding to cancel these repurchased shares to reduce registered capital - Due to the re-election of directors, supervisors, and senior management, some executives resigned or were newly appointed, leading to a structural change between restricted and unrestricted shares, while the total share capital remained unchanged[159](index=159&type=chunk)[160](index=160&type=chunk) - The company completed its share repurchase plan, repurchasing a cumulative **3.958 million** shares (**0.65%** of total share capital) for a total of **50.02 million CNY**; originally intended for equity incentives, these shares were later designated for "cancellation to reduce registered capital"[161](index=161&type=chunk) [Shareholder Numbers and Shareholding](index=45&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) As of the end of the reporting period, the company had **34,958** common shareholders; among the top ten shareholders, the actual controllers Tang Yong, Wang Dengming, and Liu Qilin are parties acting in concert, holding a combined **23.95%** of shares; Guo Lei, holding **5.84%** of shares, is a party acting in concert with two private equity funds under Shanghai Axing Investment; some major shareholders have pledged their shares Top Shareholders and Shareholding | Shareholder Name | Shareholder Type | Shareholding Percentage | Shares Held at Period-End | Pledge Status | | :--- | :--- | :--- | :--- | :--- | | Tang Yong | Domestic Natural Person | 11.11% | 68,062,301 | Pledged 17,700,000 | | Wang Dengming | Domestic Natural Person | 7.43% | 45,534,495 | - | | Guo Lei | Overseas Natural Person | 5.84% | 35,774,906 | Pledged 22,308,000 | | Liu Qilin | Domestic Natural Person | 5.41% | 33,127,360 | - | | Chen Mei | Domestic Natural Person | 4.30% | 26,320,900 | Pledged 14,720,000 | - Tang Yong, Wang Dengming, and Liu Qilin are parties acting in concert (actual controllers) of the company; Guo Lei is a party acting in concert with funds under Shanghai Axing Investment Management Co., Ltd[166](index=166&type=chunk) [Bond-Related Information](index=49&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) The company had no bond-related matters during the reporting period - The company had no bond-related matters during this reporting period[173](index=173&type=chunk) [Financial Report](index=50&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) [Financial Statements](index=50&type=section&id=%E4%BA%8C%E3%80%81%E8%B4%A2%E5%8A%A1%E6%8A%A5%E8%A1%A8) This semi-annual financial report is unaudited; the consolidated balance sheet shows total assets of **8.011 billion CNY**, total liabilities of **1.639 billion CNY**, and total equity attributable to parent company shareholders of **6.322 billion CNY**; the consolidated income statement reports operating revenue of **1.075 billion CNY**, total operating costs of **1.007 billion CNY**, total profit of **28 million CNY**, net profit of **37 million CNY**, with **34 million CNY** attributable to parent company shareholders; the consolidated cash flow statement indicates net cash inflow from operating activities of **162 million CNY**, net outflow from investing activities of **321 million CNY**, net inflow from financing activities of **169 million CNY**, and cash and cash equivalents balance of **652 million CNY** at period-end Consolidated Balance Sheet Summary (June 30, 2025) | Item | Period-End Balance (CNY) | Period-Beginning Balance (CNY) | | :--- | :--- | :--- | | Total Assets | 8,010,813,632.54 | 7,976,306,737.10 | | Total Liabilities | 1,638,527,023.76 | 1,552,644,190.08 | | Total Equity Attributable to Parent Company Owners | 6,322,440,254.33 | 6,369,056,728.78 | | Total Liabilities and Owners' Equity | 8,010,813,632.54 | 7,976,306,737.10 | Consolidated Income Statement Summary (2025 Half-Year) | Item | 2025 Half-Year (CNY) | 2024 Half-Year (CNY) | | :--- | :--- | :--- | | Total Operating Revenue | 1,075,034,096.39 | 1,278,911,868.07 | | Total Operating Costs | 1,006,684,937.26 | 1,078,405,645.65 | | Total Profit | 28,409,089.61 | 223,137,098.52 | | Net Profit | 36,539,905.57 | 202,489,859.89 | | Net Profit Attributable to Parent Company Shareholders | 34,042,488.83 | 201,725,714.09 | Consolidated Cash Flow Statement Summary (2025 Half-Year) | Item | 2025 Half-Year (CNY) | 2024 Half-Year (CNY) | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 161,789,633.02 | 212,680,247.22 | | Net Cash Flow from Investing Activities | -320,800,087.39 | -291,207,141.87 | | Net Cash Flow from Financing Activities | 169,425,681.25 | 196,011,670.60 | | Net Increase in Cash and Cash Equivalents | 10,938,714.29 | 117,701,765.62 |

[Current Period Performance Forecast](index=1&type=section&id=I.%20Current%20Period%20Performance%20Forecast) The company forecasts a year-over-year increase in 2025 H1 performance, with net profit attributable to shareholders expected to grow **38.65% to 59.85%** 2025 Semi-Annual Performance Forecast (Compared to Prior Period) | Item | Current Reporting Period (Jan 1 - Jun 30, 2025) | Prior Period | | :--- | :--- | :--- | | **Net Profit Attributable to Shareholders (CNY billion)** | Profit: 1.70 – 1.96 | Profit: 1.23 | | Year-over-Year Growth | 38.65% – 59.85% | - | | **Net Profit Excluding Non-Recurring Gains/Losses (CNY billion)** | Profit: 1.55 – 1.81 | Profit: 1.18 | | Year-over-Year Growth | 31.37% – 53.41% | - | [Communication with Accounting Firm](index=1&type=section&id=II.%20Communication%20with%20Accounting%20Firm) The company's performance forecast is a preliminary internal estimate, not yet audited by an accounting firm - This performance forecast is a preliminary company estimate, unaudited by an accounting firm[4](index=4&type=chunk) [Explanation of Performance Changes](index=1&type=section&id=III.%20Explanation%20of%20Performance%20Changes) Significant performance growth is primarily driven by the continuous and successful revenue recognition of existing orders - The primary driver of performance growth is the continuous acceptance and revenue recognition of existing orders during the reporting period[5](index=5&type=chunk) [Other Relevant Information](index=1&type=section&id=IV.%20Other%20Relevant%20Information) The company reiterates that this unaudited performance forecast is preliminary, advising investors to consider investment risks, with final data in the 2025 semi-annual report - The company reminds investors that this performance forecast is a preliminary estimate, unaudited, and final data will be based on the 2025 semi-annual report, requiring cautious decision-making and attention to investment risks[6](index=6&type=chunk)[7](index=7&type=chunk)

[Important Notice, Table of Contents and Definitions](index=2&type=section&id=Section%201.%20Important%20Notice%2C%20Table%20of%20Contents%20and%20Definitions) This section provides important disclaimers, a table of contents, and definitions of key terms used throughout the report [Important Notice](index=2&type=section&id=Important%20Notice) The company's board of directors, supervisory board, and senior management ensure the truthfulness, accuracy, and completeness of this semi-annual report, assuming legal responsibility, and the report details risks, countermeasures, and the 2025 semi-annual profit distribution plan - The company's 2025 semi-annual profit distribution plan is: based on 288,000,000 shares, no cash dividends will be distributed, no bonus shares will be issued, and capital reserves will be converted into 4.5 shares for every 10 shares to all shareholders[3](index=3&type=chunk) - The company's responsible person, chief financial officer, and head of accounting department all declare to guarantee the truthfulness, accuracy, and completeness of the financial report in this semi-annual report[3](index=3&type=chunk) [Definitions of Professional Terms](index=5&type=section&id=Definitions) This section defines key business, technical, and regulatory terms used in the report, including Active Pharmaceutical Ingredients (API), Non-Steroidal Anti-Inflammatory Drugs (NSAID), various drug registration certifications (e.g., CEP, DMF, cGMP), and Contract Development and Manufacturing Organization (CDMO) services, providing a foundation for understanding the company's business and industry background - The report explains several core pharmaceutical industry terms, such as Active Pharmaceutical Ingredients (API), Non-Steroidal Anti-Inflammatory Drugs (NSAID), current Good Manufacturing Practices (cGMP), and Contract Development and Manufacturing Organization (CDMO) services, which helps investors understand the company's business[12](index=12&type=chunk)[13](index=13&type=chunk) [Company Profile and Key Financial Indicators](index=8&type=section&id=Section%202.%20Company%20Profile%20and%20Key%20Financial%20Indicators) This section presents the company's fundamental information and key financial performance indicators for the reporting period [Company Basic Information](index=8&type=section&id=I.%20Company%20Profile) This section provides the company's basic registration information, including its stock abbreviation 'Hengdi Pharmaceutical', stock code '301211', full Chinese and English names, and legal representative, among other core identity details | Item | Content | | :--- | :--- | | Stock Abbreviation | Hengdi Pharmaceutical | | Stock Code | 301211 | | Listing Exchange | Shenzhen Stock Exchange | | Legal Representative | Cheng Zhigang | [Key Accounting Data and Financial Indicators](index=9&type=section&id=IV.%20Key%20Accounting%20Data%20and%20Financial%20Indicators) During the reporting period, the company experienced a significant performance decline, with operating revenue slightly decreasing by 2.93% year-on-year, while net profit attributable to shareholders plummeted by 72.92%, and non-recurring adjusted net profit sharply fell by 93.21%, with net cash flow from operating activities also decreasing by 73.71%, indicating considerable pressure on the company's profitability and cash flow | Indicator | Current Period | Prior Year Period | YoY Change | | :--- | :--- | :--- | :--- | | Operating Revenue(RMB) | 234,768,347.93 | 241,866,955.11 | -2.93% | | Net Profit Attributable to Parent(RMB) | 18,547,082.58 | 68,496,011.31 | -72.92% | | Non-recurring Adjusted Net Profit Attributable to Parent(RMB) | 4,416,152.74 | 65,041,920.42 | -93.21% | | Net Cash Flow from Operating Activities(RMB) | 8,401,294.23 | 31,957,787.67 | -73.71% | | Basic EPS(RMB/share) | 0.06 | 0.24 | -75.00% | | Weighted Average ROE | 0.80% | 2.95% | -2.15% | | Total Assets(RMB) | 2,392,174,132.73 | 2,488,655,694.01 | -3.88% (vs. Prior Year-End) | | Net Assets Attributable to Parent(RMB) | 2,256,889,033.97 | 2,309,688,533.16 | -2.29% (vs. Prior Year-End) | [Non-Recurring Gains and Losses Items and Amounts](index=9&type=section&id=VI.%20Non-Recurring%20Gains%20and%20Losses%20Items%20and%20Amounts) During the reporting period, the company's total non-recurring gains and losses amounted to RMB 14,130,900, significantly impacting net profit, primarily comprising RMB 14,854,300 in fair value changes from financial assets held and RMB 1,671,300 in government grants | Item | Amount(RMB) | | :--- | :--- | | Fair Value Change Gains/Losses from Financial Assets and Liabilities Held by Non-Financial Enterprises | 14,854,328.10 | | Government Grants Included in Current Period P&L | 1,671,322.76 | | **Total Non-Recurring Gains and Losses** | **14,130,929.84** | [Management Discussion and Analysis (MD&A)](index=11&type=section&id=Section%203.%20Management%20Discussion%20and%20Analysis%20(MD%26A)) This section provides a comprehensive analysis of the company's operations, financial condition, and future outlook, as discussed by management [Overview of Main Businesses](index=11&type=section&id=I.%20Main%20Businesses%20During%20the%20Reporting%20Period) The company primarily engages in the research, development, production, and sales of Active Pharmaceutical Ingredients (API) and preparations, also offering CDMO services, with core products including ibuprofen and other non-steroidal anti-inflammatory APIs, while also expanding into cardiovascular and anti-tumor fields; during the reporting period, the company achieved RMB 235 million in revenue, a 2.93% year-on-year decrease, and RMB 18.55 million in net profit, a significant 72.92% year-on-year decrease, with R&D investment of RMB 15.88 million, down 17.72% year-on-year, yet several new drug projects made progress - The company's main business involves the R&D, production, and sales of Active Pharmaceutical Ingredients (API) and preparations, as well as CDMO services, forming a product system centered on non-steroidal anti-inflammatory APIs, supplemented by specialty APIs for cardiovascular and anti-tumor applications[36](index=36&type=chunk) | Financial Indicator | Amount(RMB) | YoY Change | | :--- | :--- | :--- | | Operating Revenue | 234,768,347.93 | -2.93% | | Net Profit Attributable to Parent | 18,547,082.58 | -72.92% | | R&D Investment | 15,876,209.56 | -17.72% | - During the reporting period, products such as Ibuprofen Sustained-Release Capsules and Torasemide Injection obtained drug registration certificates, and multiple R&D projects progressed smoothly[42](index=42&type=chunk) [Analysis of Core Competencies](index=15&type=section&id=II.%20Analysis%20of%20Core%20Competencies) The company's core competencies are evident in four key areas: R&D, through continuous process innovation to reduce ibuprofen costs and expand specialty API product lines; Production, possessing modern, automated manufacturing capabilities and a stringent quality management system; Registration, with products certified by multiple countries' GMP standards and becoming qualified suppliers to international giants like Sanofi and GlaxoSmithKline; and the integrated 'API + Preparation' model, ensuring supply chain stability, cost advantages, and enhanced risk resilience - The company continuously innovates processes for ibuprofen API to reduce production costs, develops derivative products like dexibuprofen, and expands into specialty APIs for anti-tumor and cardiovascular applications[44](index=44&type=chunk)[45](index=45&type=chunk) - The company's main API products have passed GMP certifications and drug registrations in multiple countries and regions, including China, the United States, and the European Union, successfully entering the supply chains of global pharmaceutical giants such as Sanofi, GlaxoSmithKline, and Abbott[47](index=47&type=chunk) - The integrated "API + Preparation" layout is one of the company's core advantages, ensuring raw material supply, reducing preparation costs, and securing market position through cost and quality control in the context of centralized procurement[48](index=48&type=chunk)[49](index=49&type=chunk) [Analysis of Main Business](index=17&type=section&id=III.%20Analysis%20of%20Main%20Business) During the reporting period, the company's main business costs increased by 18.45%, primarily due to a decline in API product gross margin, leading the company to adopt a volume-for-value strategy; financial expenses significantly decreased by 85.51% mainly due to reduced interest income; by product segment, non-steroidal anti-inflammatory drugs remained the largest revenue source but saw both revenue and gross margin decline, while anti-tumor products' revenue grew by 42.67% but their gross margin turned negative at -11.32%, indicating cost control challenges | Financial Item | Current Period(RMB) | YoY Change | Reason for Change | | :--- | :--- | :--- | :--- | | Operating Cost | 183,347,719.02 | 18.45% | Gross margin of API products decreased, and the company increased sales volume to maintain sales revenue | | Financial Expenses | -6,011,409.88 | -85.51% | Interest income decreased in this period | | Income Tax Expense | 1,974,604.33 | -84.06% | Total profit decreased in this period | | Product Category | Operating Revenue(RMB) | Revenue YoY Change | Gross Margin | Gross Margin YoY Change | | :--- | :--- | :--- | :--- | :--- | | Non-Steroidal Anti-Inflammatory | 159,778,817.35 | -9.35% | 15.27% | -12.58% | | Cardiovascular | 37,760,622.99 | 14.57% | 71.83% | -5.20% | | Anti-Tumor | 16,419,201.42 | 42.67% | -11.32% | -35.59% | [Analysis of Assets and Liabilities](index=18&type=section&id=V.%20Analysis%20of%20Assets%20and%20Liabilities) As of the end of the reporting period, the company's total assets were RMB 2.392 billion, a 3.88% decrease from the beginning of the year, with no significant changes in asset composition; financial assets measured at fair value had an ending balance of RMB 1.039 billion, primarily trading financial assets (wealth management products), generating RMB 10.57 million in fair value change gains for the period; additionally, RMB 8.9 million in monetary funds were restricted as collateral - The company's financial assets measured at fair value are primarily trading financial assets (wealth management products), with an ending balance of approximately **RMB 1.03 billion**, generating **RMB 10.57 million** in fair value change gains for the current period[57](index=57&type=chunk)[58](index=58&type=chunk) - As of the end of the reporting period, **RMB 8.9 million** of the company's monetary funds were restricted as collateral[59](index=59&type=chunk) [Analysis of Investment Status](index=19&type=section&id=VI.%20Analysis%20of%20Investment%20Status) During the reporting period, the company's investment amounted to RMB 70 million, a significant 87.32% year-on-year decrease, with a cumulative utilization rate of 40.96% for raised funds; the company adjusted some fundraising projects, terminating the 'Annual Production of 5,000 Tons of Ibuprofen API Project' due to market oversupply and low prices, and extending the construction period for several other projects, including the 'High-End Pharmaceutical Preparation Internationalization Project' - Given the saturated supply and demand and low prices in the international ibuprofen API market, the company decided to terminate the "Annual Production of 5,000 Tons of Ibuprofen API Project" and reallocate part of the corresponding raised funds to other R&D and technical renovation projects[68](index=68&type=chunk) - Due to longer approval times and changes in market conditions, the company extended the estimated ready-for-use date for the "High-End Pharmaceutical Preparation Internationalization Project" to December 2026, and also extended two other API projects[67](index=67&type=chunk) [Risks and Countermeasures](index=25&type=section&id=X.%20Risks%20Faced%20by%20the%20Company%20and%20Countermeasures) The company identified five major operational risks: production safety (involving hazardous chemicals and high-temperature environments), product quality (high drug safety requirements), exchange rate fluctuations (overseas sales affected by RMB exchange rates), international trade environment (e.g., changes in China-India economic and trade relations), and pharmaceutical industry policy (e.g., centralized drug procurement); the company stated it will closely monitor and actively respond - The company faces multiple risks including production safety, product quality, exchange rate fluctuations, international trade environment, and industry policies[77](index=77&type=chunk)[78](index=78&type=chunk)[79](index=79&type=chunk)[81](index=81&type=chunk)[82](index=82&type=chunk) - Regarding international trade risks, one of the company's main raw material suppliers for isobutylbenzene is from India, and some ibuprofen products are also sold to India; changes in China-India economic and trade relations could adversely affect the company's operations[81](index=81&type=chunk) [Corporate Governance, Environment and Society (ESG)](index=26&type=section&id=Section%204.%20Corporate%20Governance%2C%20Environment%20and%20Society%20(ESG)) This section details the company's corporate governance practices, environmental initiatives, and social responsibility efforts [Profit Distribution and Capital Reserve Conversion](index=27&type=section&id=II.%20Profit%20Distribution%20and%20Capital%20Reserve%20to%20Share%20Capital%20Conversion%20in%20This%20Reporting%20Period) The company's 2025 semi-annual profit distribution plan proposes no cash dividends or bonus shares, but a capital reserve transfer of 4.5 shares for every 10 shares to all shareholders, based on a total share capital of 288,000,000 shares | Distribution/Conversion Item | Quantity | | :--- | :--- | | Bonus Shares per 10 Shares(Shares) | 0 | | Dividend per 10 Shares(RMB)(Tax Included) | 0 | | Capital Reserve Conversion per 10 Shares(Shares) | 4.5 | | Share Capital Base for Distribution Plan(Shares) | 288,000,000 | [Environmental Information Disclosure](index=28&type=section&id=IV.%20Environmental%20Information%20Disclosure) The company and its main subsidiaries have been included in the list of enterprises required to disclose environmental information by law, indicating their production and operation activities are under key supervision by environmental protection authorities, and the company must publicly disclose its environmental information as required - Hubei Hengdi Pharmaceutical Co., Ltd. has been included in the list of enterprises required to disclose environmental information by law[89](index=89&type=chunk) [Social Responsibility](index=28&type=section&id=V.%20Social%20Responsibility) The company has implemented various social responsibility measures, including protecting investor rights, caring for employees, safeguarding customer interests, and emphasizing environmental protection; the company promotes a 'low-carbon, energy-saving, green, and healthy' philosophy, achieving clean production through technological transformation and full-process control, and entrusting qualified third parties to handle its 'three wastes', with no environmental violations or irregularities reported during the period - The company emphasizes environmental protection, entrusting qualified third parties to handle its "three wastes" and strictly adhering to emission standards, with no environmental pollution incidents occurring during the reporting period[92](index=92&type=chunk) [Significant Matters](index=30&type=section&id=Section%205.%20Significant%20Matters) This section highlights significant events and commitments during the reporting period, including their fulfillment status [Fulfillment of Commitments](index=30&type=section&id=I.%20Fulfillment%20of%20Commitments%20by%20Controlling%20Shareholders%2C%20Shareholders%2C%20Related%20Parties%2C%20Acquirers%20and%20the%20Company) During the reporting period, all commitments made by the company's related parties during its initial public offering, including share lock-up and share price stabilization, were fulfilled, with no overdue unfulfilled commitments - The company's controlling shareholder, actual controller, directors, supervisors, and senior management, among other related parties, have fulfilled their share lock-up commitments and IPO share price stabilization commitments made during the initial public offering[95](index=95&type=chunk)[96](index=96&type=chunk) [Other Significant Matters](index=38&type=section&id=Other%20Significant%20Matters) During the reporting period, the company had no significant matters requiring special disclosure, such as non-operating fund occupation by controlling shareholders, illegal external guarantees, major litigation or arbitration, significant related-party transactions, or major contracts - During the reporting period, the company had no instances of controlling shareholder fund occupation, illegal guarantees, major litigation, or significant related-party transactions[104](index=104&type=chunk)[105](index=105&type=chunk)[107](index=107&type=chunk)[108](index=108&type=chunk)[121](index=121&type=chunk) [Share Changes and Shareholder Information](index=42&type=section&id=Section%206.%20Share%20Changes%20and%20Shareholder%20Information) This section outlines changes in the company's share capital and provides details on its shareholder structure [Share Change Status](index=42&type=section&id=I.%20Share%20Change%20Status) During the reporting period, the company's total share capital of 288,000,000 shares remained unchanged, with the main change being the lifting of restrictions on 216,000,000 pre-IPO restricted shares, representing 75% of the total share capital, converting them into unrestricted shares - During the reporting period, **216,000,000** restricted shares of the company were released from lock-up, accounting for **75.00%** of the company's total share capital, increasing the proportion of unrestricted shares from **25%** to **100%**[126](index=126&type=chunk)[127](index=127&type=chunk) [Number of Shareholders and Shareholding Status](index=44&type=section&id=III.%20Number%20of%20Shareholders%20and%20Shareholding%20Status) As of the end of the reporting period, the company had a total of 17,134 common shareholders, with the top three being Shanghai Yongdasheng Business Consulting Co., Ltd. (38.25% stake), Liu Tianchao (12.00% stake), and Jingmen Ningkang Enterprise Management Center (Limited Partnership) (5.63% stake) - As of the end of the reporting period, the company had a total of **17,134** shareholders[130](index=130&type=chunk) | Shareholder Name | Shareholding Percentage | Number of Shares Held | | :--- | :--- | :--- | | Shanghai Yongdasheng Business Consulting Co., Ltd. | 38.25% | 110,160,000 | | Liu Tianchao | 12.00% | 34,560,000 | | Jingmen Ningkang Enterprise Management Center (Limited Partnership) | 5.63% | 16,200,000 | [Financial Report](index=49&type=section&id=Section%208.%20Financial%20Report) This section contains the audited financial statements, key accounting policies, and detailed notes to the financial statements [Audit Report](index=49&type=section&id=I.%20Audit%20Report) This semi-annual financial report has been audited by Daxin Certified Public Accountants (Special General Partnership), which issued a standard unqualified audit opinion (Daxin Audit [2025] No. 2-01167) - The company's 2025 semi-annual financial report was audited by Daxin Certified Public Accountants, which issued a standard unqualified opinion[138](index=138&type=chunk) [Financial Statements](index=49&type=section&id=II.%20Financial%20Statements) This section provides 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, serving as core bases for analyzing the company's financial position, operating results, and cash flows - The consolidated and parent company balance sheets as of June 30, 2025, and the income statements, cash flow statements, and statements of changes in owners' equity for the first half of 2025 are provided[138](index=138&type=chunk)[142](index=142&type=chunk)[145](index=145&type=chunk)[150](index=150&type=chunk)[155](index=155&type=chunk) [Significant Accounting Policies and Estimates](index=67&type=section&id=V.%20Significant%20Accounting%20Policies%20and%20Estimates) This section elaborates on the company's fundamental accounting principles, accounting period, and functional currency, and highlights significant accounting policies such as revenue recognition, financial instruments, long-term equity investments, and fixed assets; during the reporting period, the company made a significant change in accounting estimates, adjusting the capitalization point for R&D expenditures to more accurately reflect the value of R&D investments - On April 23, 2025, the company changed its accounting estimate for the capitalization point of R&D expenditures; after the change, expenditures for drugs requiring clinical trials are capitalized after entering Phase III clinical trials, and for other drugs, expenditures are capitalized after obtaining human bioequivalence clinical filing; this change resulted in an increase of **RMB 623,600.00** in development expenditures and a corresponding decrease in R&D expenses[240](index=240&type=chunk)[241](index=241&type=chunk) [Notes to Consolidated Financial Statements](index=84&type=section&id=VII.%20Notes%20to%20Consolidated%20Financial%20Statements) This section provides detailed notes on key items in the consolidated financial statements, including: ending monetary funds of RMB 540 million, of which RMB 8.9 million is restricted; trading financial assets (wealth management products) of RMB 1.03 billion; accounts receivable ending balance of RMB 76.03 million, with a bad debt provision of RMB 7.81 million; inventory of RMB 116 million, with an impairment provision of RMB 2.03 million; and major construction in progress projects primarily being the High-End Pharmaceutical Preparation Internationalization Project and the Ibuprofen Technical Renovation Project - Ending trading financial assets amounted to **RMB 1.03 billion**, primarily consisting of bank wealth management products[248](index=248&type=chunk) - The top five accounts receivable balances at period-end totaled **RMB 18.48 million**, accounting for **24.30%** of the total[261](index=261&type=chunk) - Significant construction in progress projects include the "High-End Pharmaceutical Preparation Internationalization Project" with a budget of **RMB 332 million** and the "Ibuprofen API Wastewater Hydrolysis Acidification Project" with a budget of **RMB 86 million**[296](index=296&type=chunk) [Supplementary Information](index=117&type=section&id=XVI.%20Supplementary%20Information) This section provides a detailed statement of non-recurring gains and losses and calculations for return on net assets and earnings per share; during the reporting period, non-recurring gains and losses totaled RMB 14.13 million, primarily from fair value changes of financial assets; after deducting non-recurring gains and losses, net profit attributable to common shareholders was RMB 4.42 million, weighted average return on net assets decreased to 0.19%, and basic earnings per share was RMB 0.020 | Profit for the Period | Weighted Average ROE | Basic EPS(RMB/share) | | :--- | :--- | :--- | | Net Profit Attributable to Common Shareholders of the Company | 0.80% | 0.06 | | Net Profit Attributable to Common Shareholders of the Company After Deducting Non-Recurring Gains and Losses | 0.19% | 0.020 |