远光软件(002063) - 2024 Q2 - 季度财报

Important Notice, Table of Contents, and Definitions This section provides essential disclaimers, a report directory, and definitions of key terms to ensure clarity and understanding of the semi-annual report content Important Notice The Board, Supervisory Board, and senior management guarantee the report's truthfulness and completeness, with the company planning no semi-annual cash dividends or capital increases from reserves - The Board of Directors, Supervisory Board, and senior management guarantee the truthfulness, accuracy, and completeness of the semi-annual report, assuming individual and joint legal responsibility[1] - Company's responsible person Chen Lihao, chief accountant Lin Wuxing, and head of accounting department Zhang Hongting declare the financial report is true, accurate, and complete[1] - The company plans no cash dividends, bonus shares, or capital increase from capital reserves[1] Definitions This section defines key terms used in the report, including company names, major related parties, regulatory bodies, and core products, ensuring clear understanding of the content Key Definitions | Term | Definition | | :--- | :--- | | Company, This Company, YGSOFT | YGSOFT Co., Ltd. | | State Grid, SGCC, State Grid Corporation of China | State Grid Corporation of China | | SGCC Digital Technology, SGCC Digital Technology Co. | State Grid Digital Technology Holdings Co., Ltd. | | DAP | YGSOFT's New Generation Enterprise Digital Core System | Company Profile and Key Financial Indicators This section outlines the company's fundamental information and presents a summary of its key accounting data and financial performance during the reporting period Company Basic Information YGSOFT Co., Ltd., stock code 002063, is listed on the Shenzhen Stock Exchange, with Chen Lihao as its legal representative, and contact information remained unchanged during the reporting period Company Basic Information | Indicator | Content | | :--- | :--- | | Stock Abbreviation | YGSOFT | | Stock Code | 002063 | | Stock Exchange | Shenzhen Stock Exchange | | Legal Representative | Chen Lihao | - The company's registered address, office address, website, and email address remained unchanged during the reporting period[7] Key Accounting Data and Financial Indicators During the reporting period, the company's operating revenue decreased by 3.57%, net profit attributable to shareholders significantly dropped by 37.47%, while net cash flow from operating activities improved by 7.68% Key Accounting Data and Financial Indicators (Current Period vs. Prior Year) | Indicator | Current Period (RMB) | Prior Year Adjusted (RMB) | YoY Change (Adjusted) | | :--- | :--- | :--- | :--- | | Operating Revenue | 1,044,629,742.90 | 1,083,311,144.98 | -3.57% | | Net Profit Attributable to Shareholders | 56,455,891.72 | 90,287,375.79 | -37.47% | | Net Profit Attributable to Shareholders (Excluding Non-Recurring Items) | 54,523,913.72 | 79,669,674.58 | -31.56% | | Net Cash Flow from Operating Activities | -632,279,734.45 | -684,849,230.13 | 7.68% | | Basic Earnings Per Share (RMB/share) | 0.0296 | 0.0474 | -37.55% | | Diluted Earnings Per Share (RMB/share) | 0.0296 | 0.0474 | -37.55% | | Weighted Average Return on Net Assets | 1.63% | 2.86% | -1.23% | | End of Current Period vs. End of Prior Year | | | | | Total Assets | 4,292,510,265.52 | 4,258,110,383.70 | 0.81% | | Net Assets Attributable to Shareholders | 3,489,370,812.23 | 3,426,246,734.18 | 1.84% | - The company retrospectively adjusted prior year accounting data due to changes in accounting policies, primarily based on Interpretation No. 16 of Accounting Standards for Business Enterprises issued by the Ministry of Finance[10] Non-Recurring Gains and Losses The company's total non-recurring gains and losses amounted to RMB 1.93 million, primarily from government subsidies and non-current asset disposals, after tax and minority interest adjustments Non-Recurring Gains and Losses Items and Amounts | Item | Amount (RMB) | | :--- | :--- | | Gains/Losses from Disposal of Non-Current Assets | 83,221.58 | | Government Subsidies Recognized in Current Profit/Loss | 1,932,889.99 | | Other Non-Operating Income and Expenses Apart from the Above | 99,589.89 | | Less: Income Tax Impact | 141,292.32 | | Minority Interest Impact (After Tax) | 42,431.14 | | Total | 1,931,978.00 | Management Discussion and Analysis This section provides an in-depth analysis of the company's principal businesses, core competencies, operational performance, and financial condition during the reporting period Principal Businesses During the Reporting Period The company, a leading IT provider for enterprise management and energy interconnection, focuses on integrating digitalization and information innovation, investing in AI and large models, and building an open ecosystem - The company is a leading domestic provider of information technology, products, and services for enterprise management, energy interconnection, and social services, specializing in large enterprise management informatization for nearly 40 years, and long-term serving energy industry enterprises with informatization management products and services[13] - The company focuses on emerging technologies such as cloud computing, big data, IoT, mobile, AI, and blockchain, continuously increasing investment in AI and large model research, actively accelerating industry chain collaboration, and building an open and win-win ecological cooperation system[12] Industry Overview The digital economy continues to expand, with its core industry value exceeding RMB 12 trillion in 2023, while the software and electricity sectors show stable growth and increasing digitalization investment - In 2023, the added value of the core digital economy industry is estimated to exceed RMB 12 trillion, accounting for approximately 10% of GDP[12] - In 2023, enterprises above designated size in China's software and information technology service industry achieved cumulative software business revenue of RMB 12,325.8 billion, a 13.4% year-on-year increase, with total software industry profit reaching RMB 1,459.1 billion, up 13.6% year-on-year[12] - In 2023, major power enterprises in the electricity sector invested RMB 39.646 billion in digitalization, a 6.2% year-on-year increase[12] Main Businesses and Operating Model The company's main products and services span digital enterprise, smart energy, information innovation platforms, and social interconnection, providing software products and related services to energy industry central enterprises and large group companies - The company's main products and services include digital enterprise, smart energy, information innovation platforms, and social interconnection[13] - The digital enterprise sector focuses on six core applications: strategic performance, resource management, production and operation, shared services, data operation, and industrial interconnection, providing an integrated and intelligent operation management system[13][14][15] - The company's operating model is to provide software products for operational management information systems, along with related consulting, implementation, integration, and O&M services, to central enterprises in the energy sector and other large group enterprises, supported by an independently controllable R&D and operation platform[16] Customer Industry Overview In H1 2024, national electricity consumption increased by 8.1%, total installed power generation capacity grew by 14.1%, and power investment rose by 10.6%, with grid investment up 23.7% - As of the end of June 2024, national electricity consumption totaled 4.66 trillion kWh, a 8.1% year-on-year increase[16] - The national total installed power generation capacity reached 3.07 billion kW, a 14.1% year-on-year increase[16] - Total power investment by key surveyed enterprises nationwide amounted to RMB 598.1 billion, a 10.6% year-on-year increase, with grid investment reaching RMB 254 billion, up 23.7% year-on-year[16][17] Core Competitiveness Analysis The company's core competitiveness stems from deep industry accumulation, strong market brand, extensive service network, high R&D investment, comprehensive industry chain layout, and state-owned capital background, ensuring its leading position in energy informatization - The company has long served large energy groups such as State Grid and China Southern Power Grid, deeply understanding industry characteristics and building core competitiveness in energy informatization[18] - The company has consistently invested over 20% of its revenue in R&D for ten consecutive years, with a cumulative investment of nearly RMB 4 billion, continuously increasing its technological reserves in cloud computing, big data, artificial intelligence, blockchain, and IoT[21] - As a member unit of State Grid Corporation of China, with SGCC Digital Technology Co. as the controlling shareholder and the State-owned Assets Supervision and Administration Commission of the State Council as the actual controller, the company ensures the continuity and stability of its products and services for power enterprises[23] Industry Experience Advantage The company's extensive experience serving major energy groups like State Grid and China Southern Power Grid provides a comprehensive understanding of industry operations and management, enabling horizontal expansion to regional energy groups - The company has long served the informatization engineering construction of energy groups such as State Grid, China Southern Power Grid, and SPIC Group, deeply understanding the characteristics of the energy industry[18] - The company has a comprehensive understanding of the industrial operating models, business management philosophies, unique management models, and complex business processes of energy industry enterprises[18] Market Brand Advantage As a key national software enterprise, the company has nearly four decades of focus on large group enterprise management informatization, maintaining a leading position in the energy electricity sector and earning prestigious industry awards - The company is a key software enterprise encouraged by the state, focusing on large group enterprise management informatization for nearly four decades, and has long been in a leading position in the energy and electricity industry's enterprise management software sector[19] - The company has developed the "Jiutian Intelligent Integrated Cloud Platform" for full-link localized software R&D and launched the new generation enterprise digital core system "YGSOFT DAP," winning the "Reliable Enterprise Core Software Brand" award for the sixth consecutive time[19] Marketing and Service Advantage The company boasts a nationwide marketing and service network with over thirty branches, providing professional, multi-level, efficient localized services through high-quality teams and six industry business units - The company has a comprehensive marketing and service network with over thirty branches and subsidiaries nationwide, and its service teams possess high-quality and efficient work capabilities[20] - The company has established six industry business units, implementation centers, and technical support centers, focusing on the business and application scenarios of large group enterprise clients to enhance understanding and knowledge accumulation across various industry scenarios[20] Technology R&D Advantage With nearly four decades of independent R&D, over 20% of revenue invested in R&D for ten years, and a cumulative RMB 4 billion, the company maintains strong technical reserves in cutting-edge fields and a diversified R&D structure with numerous patents - The company has maintained nearly four decades of independent and controllable software and platform R&D, with R&D investment exceeding 20% of revenue for ten consecutive years, totaling nearly RMB 4 billion[21] - The company has established the YGSOFT Research Institute, four major R&D centers in Zhuhai, Beijing, Wuhan, and Guangzhou, and a postdoctoral workstation, focusing on cutting-edge technologies in blockchain, artificial intelligence, and high-performance computing[21] - As of June 30, 2024, 1,089 patent applications have been accepted, and 320 patents have been granted, including 211 invention patents[21] Industry Chain Advantage Leveraging extensive industry experience, the company strategically deploys digital products and services across the entire energy industry chain, from collection to consumption, to adapt to new energy business models - The company deploys digital products and services across the entire energy industry chain, including "energy collection, power generation, transmission, distribution, sales, and consumption"[22] Capital Advantage As a member of State Grid, with SGCC Digital Technology as its controlling shareholder and SASAC as its actual controller, the company benefits from a stable capital background, ensuring continuous service provision to power enterprises and enhanced investment in energy internet innovation - The company is a member unit of State Grid Corporation of China, with SGCC Digital Technology Co. as the controlling shareholder and the State-owned Assets Supervision and Administration Commission of the State Council as the actual controller[23] - The company's product advantages combined with SGCC Digital Technology Co.'s platform advantages lead to deep cooperation in multiple areas, increasing investment and product technology innovation in the energy internet sector[23] Main Business Analysis The company capitalizes on digitalization, new power systems, domestic substitution, and AI opportunities, collaborating with SGCC Digital Technology to drive strategic innovation, integrate AI into software development, and enhance technical capabilities through microservices and cloud deployment - The company seizes key opportunities such as enterprise digital transformation, new power system construction, domestic software substitution in critical areas, and the integration of AI and large model technologies[24] - The company aims for "AI-assisted programming as the norm, non-use as the exception," deeply applying AI large model technology to provide AIGC capabilities covering the entire software R&D lifecycle, including requirements, design, development, testing, deployment, and O&M[24] - By strengthening microservices transformation, building business middle-ground services, adhering to distributed system construction strategies, and achieving cloud deployment of products, the company continuously enhances its technical strength and innovation capabilities[24] Digital Enterprise Business In digital enterprise, the company actively supports State Grid and China Southern Power Grid's digital transformation, promoting smart shared financial platforms, digital treasury, and e-invoicing, while expanding into non-financial areas and serving major power generation groups - For State Grid, the company supported the Finance and Assets Department in fully establishing a "Financial Middle-ground + Smart Application" intelligent shared financial platform, completing the full online deployment of financial operational applications such as intelligent expense reporting and marketing business across the grid sector[25] - For China Southern Power Grid, the company focused on promoting the construction of the group's smart treasury system, building a grid-level financial sharing platform, and expanding into non-financial areas such as grid safety supervision, production, and dispatch[26] - In the power generation market, the company actively participates in the digital transformation processes of major power generation groups, providing solutions for financial management, operational analysis, smart treasury, and risk compliance[26] Smart Energy Business In smart energy, the company aims to support new power systems by focusing on power reform innovation, integrated energy, low-carbon management, and green finance, optimizing power trading solutions, exploring vehicle-grid interaction, and developing smart carbon terminals - The company continues to aim at fully supporting the construction of a digital support system for a new power system facing society, deeply cultivating advantageous businesses such as power reform innovation, integrated energy, low-carbon management, and green finance[27] - In power reform innovation, the company is increasing the application of its "agent power purchase calculation and analysis application" product in various provincial grids and continuously optimizing and enhancing power trading solutions for power generation groups, new energy stations, and power sales companies[27] - The company cultivates and develops dual-carbon intelligent sensing terminal business, innovatively developing smart carbon terminals centered on "AI+sensing," identification and decomposition, prediction, and analysis, with the first batch of products deployed in SGCC Digital Technology Co.'s Yongdingyuan office area[28] Frontier Technology Business The company intensifies AI innovation, enhancing its enterprise management large model with knowledge bases, smart forms, and intelligent reporting, while integrating blockchain with its Jiutian platform and applying metaverse technology in financial security - The company continuously increases technological innovation and application in the field of artificial intelligence, improving its enterprise management large model and launching scenario-based intelligent applications such as knowledge bases, smart form filling, smart auditing, and smart reporting based on large models[30] - In AI algorithms, YGSOFT Zhiyian completed the R&D of new local knowledge base functions and launched the integrated AI technology application product, Smart Bidding Assistant; the digital human product, based on large model technology, introduced functions such as smart form filling, smart auditing, smart analysis, and smart writing[30] - In blockchain and metaverse businesses, the "Blockchain Enterprise Application Service Platform" product is deeply integrated with the company's Jiutian platform, assisting the company's low-code "chain application" and participating in State Grid Corporation of China's financial ecosystem innovation planning[30] Data Resource Integration and Services With data assets now recognized, the company actively participates in the "Data Elements ×" action plan, investing in data middle-ground, model services, smart IoT, and digital twin products, enhancing its enterprise intelligent data and analysis platforms with AI and large language models - The data asset capitalization policy has officially taken effect, and the National Data Administration jointly issued the "Three-Year Action Plan for 'Data Elements ×' (2024-2026)," in which the company actively participates[32] - The Enterprise Intelligent Analysis Platform Realinsight released its new V9.0 version, significantly enhancing intelligent analysis capabilities with over 20 built-in advanced algorithm models and integrating large language models for AI intelligent analysis[32] - The Cashinsight financial analysis and control product completed information innovation adaptation, cloud deployment, and data middle-ground technology roadmap transformation, also introducing 3D display rendering front-end effects[32] Other Businesses The company drives industrial internet innovation, expanding government-enterprise and enterprise-enterprise connectivity through electronic vouchers and supply chain digitalization, while providing efficient, secure, and localized system integration and information innovation solutions for cloud ecosystem construction - In the industrial internet sector, the company focuses more on seamless integration and efficient collaboration of information between upstream and downstream industries, assisting enterprises in achieving more comprehensive digital transformation and innovative development[31] - In government-enterprise interconnection, the company steadily expanded the scope of electronic voucher pilot units, assisted dozens of enterprises in their 4200 construction, and successfully built a secure, efficient, and convenient business interconnection channel between enterprises and banks[31] - The company continues to expand in system integration and information innovation, providing customers with efficient, secure, and localized comprehensive solutions, possessing full domestic substitution capabilities, and focusing on the domestic adaptation of databases and application cloud platform infrastructure[31][33][34] Year-on-Year Changes in Key Financial Data Operating revenue decreased by 3.57%, while net profit attributable to shareholders and total profit significantly declined by 37.47% and 48.51% respectively, primarily due to project delays, increased R&D investment, and changes in accounts receivable aging Year-on-Year Changes in Key Financial Data | Indicator | Current Period (RMB) | Prior Year (RMB) | YoY Change | Reason for Change | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue | 1,044,629,742.90 | 1,083,311,144.98 | -3.57% | | | Net Profit Attributable to Shareholders | 56,455,891.72 | 90,287,375.79 | -37.47% | Primarily due to slower-than-expected commercial progress of some subsidiary projects, increased R&D investment compared to the prior year, and changes in the aging structure of accounts receivable | | Total Profit | 46,561,457.10 | 90,423,012.47 | -48.51% | Primarily due to slower-than-expected commercial progress of some subsidiary projects, increased R&D investment compared to the prior year, and changes in the aging structure of accounts receivable during the reporting period | | R&D Investment | 363,238,573.65 | 329,859,932.50 | 10.12% | | | Net Cash Flow from Investing Activities | -27,859,182.97 | 739,067,083.35 | -103.77% | Primarily due to the company not purchasing wealth management products during the reporting period, resulting in a decrease in net redemption amount compared to the prior year | | Net Cash Flow from Financing Activities | 84,787,956.64 | -12,289,636.54 | 789.91% | Primarily due to new bank borrowings by the company during the reporting period and the payment of dividends in the first half of 2023 versus the second half of 2024 | - Income tax expense decreased by 81.33% year-on-year, primarily due to the decrease in the company's total profit compared to the prior year[34] - Credit impairment losses increased by 285.27% year-on-year, primarily due to changes in the aging structure of accounts receivable during the reporting period[34] Composition of Operating Revenue Total operating revenue decreased by 3.57% to RMB 1.04 billion, with the power industry contributing 97.09% of revenue, while digital enterprise business remained the largest segment, and the East China region generated the most revenue despite a decline Composition of Operating Revenue (by Industry, Product, Region) | Category | Item | Current Period Amount (RMB) | Share of Operating Revenue | YoY Change | | :--- | :--- | :--- | :--- | :--- | | By Industry | Power Industry | 1,014,199,797.20 | 97.09% | -2.78% | | | Other Industries | 30,429,945.70 | 2.91% | -24.10% | | By Product | Digital Enterprise | 888,529,068.34 | 85.06% | 0.81% | | | Smart Energy | 79,109,957.58 | 7.57% | -27.08% | | | Frontier Technology | 52,698,989.61 | 5.05% | -24.91% | | | Data Resource Integration and Services | 17,903,120.44 | 1.71% | 2.41% | | By Region | East China | 317,755,914.10 | 30.42% | -8.48% | | | South China | 194,562,375.50 | 18.63% | 14.75% | | | Northwest China | 134,704,625.99 | 12.89% | -9.99% | | | North China | 208,676,793.03 | 19.98% | 1.30% | Gross Profit Margin of Main Businesses | Category | Item | Gross Profit Margin | YoY Change in Gross Profit Margin | | :--- | :--- | :--- | :--- | | By Industry | Power Industry | 59.57% | 0.52% | | By Product | Digital Enterprise | 60.16% | 0.76% | | By Region | East China | 60.33% | 2.85% | | | South China | 47.77% | -7.99% | | | Northwest China | 63.56% | 4.30% | Non-Principal Business Analysis Non-principal businesses negatively impacted total profit, with investment income at RMB -1.72 million and asset impairment losses at RMB -47.76 million, primarily from contract asset impairment, which is not sustainable Impact of Non-Principal Businesses on Total Profit | Item | Amount (RMB) | Share of Total Profit | Reason for Formation | Sustainability | | :--- | :--- | :--- | :--- | :--- | | Investment Income | -1,720,053.11 | -3.69% | Long-term equity investment income | Sustainable | | Asset Impairment | -47,763,647.05 | -102.58% | Contract asset impairment and other reasons | No | | Non-Operating Income | 107,708.83 | 0.23% | Receipt of liquidated damages, etc. | No | | Non-Operating Expenses | 8,118.94 | 0.02% | Losses from disposal of fixed assets, etc. | No | Analysis of Assets and Liabilities At period-end, total assets grew by 0.81% to RMB 4.29 billion, with significant shifts including a 13.55% decrease in monetary funds and an 18.73% increase in contract assets due to revenue recognition based on performance progress Significant Changes in Asset Composition (End of Current Period vs. End of Prior Year) | Item | Period-End Amount (RMB) | Share of Total Assets | Prior Year-End Amount (RMB) | Share of Total Assets | Change in Proportion | Explanation of Significant Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Monetary Funds | 240,742,047.50 | 5.61% | 816,049,352.80 | 19.16% | -13.55% | Primarily due to the company's capital settlement characteristics, with Q4 being the peak of capital stock and other quarters having higher capital expenditure demands | | Contract Assets | 1,521,832,579.26 | 35.45% | 711,996,531.64 | 16.72% | 18.73% | The company recognizes revenue for "performance obligations fulfilled over a period of time" according to the progress of performance, but has not yet issued invoices and settled with customers | | Short-term Borrowings | 92,000,000.00 | 2.14% | 0.00 | 0.00% | 2.14% | | | Development Expenditures | 147,080,091.54 | 3.43% | 67,911,540.91 | 1.59% | 1.84% | | - As of the end of the reporting period, RMB 398,335.69 of the company's monetary funds were restricted due to guarantee deposits[43] Investment Analysis During the reporting period, the company did not engage in any significant equity investments, non-equity investments, securities investments, or derivative investments, nor did it utilize any raised funds - The company had no securities investments, derivative investments, significant equity investments, significant non-equity investments, or use of raised funds during the reporting period[44][45][46] Significant Asset and Equity Disposals During the reporting period, the company did not dispose of any significant assets or equity - The company did not dispose of any significant assets or equity during the reporting period[47][48] Analysis of Major Holding and Participating Companies During the reporting period, the company had no important holding or participating company information requiring disclosure - The company had no important holding or participating company information requiring disclosure during the reporting period[48] Risks Faced by the Company and Countermeasures The company faces macroeconomic, policy, market, and talent competition risks, which it addresses by innovating product strategies, monitoring policy changes, enhancing market competitiveness through technology, and strengthening talent acquisition and retention - The company faces macroeconomic risks and will use innovation as its fundamental driving force to explore product strategies adapted to new economies, new business forms, and new models[49] - The company faces industry policy risks and will actively monitor relevant policies, continuously explore innovative models, and research suitable solutions[50] - The company faces market competition risks and will strengthen tracking and forward-looking research on industry frontiers, adjust product strategies as appropriate, and enhance market competitiveness[51] - The company faces talent competition risks and will continuously attract high-quality, high-tech core talent, build a systematic, high-level talent development platform, and optimize assessment and incentive measures[52] Corporate Governance This section details the company's corporate governance structure, including shareholder meetings, changes in key personnel, and policies regarding profit distribution and equity incentives General Meeting of Shareholders During the reporting period, the company held an extraordinary general meeting to elect directors and an annual general meeting that approved various reports, profit distribution, shareholder return plans, and the appointment of auditors General Meetings of Shareholders During the Reporting Period | Session | Meeting Type | Investor Participation Rate | Meeting Date | Disclosure Date | Meeting Resolutions | | :--- | :--- | :--- | :--- | :--- | :--- | | First Extraordinary General Meeting of 2024 | Extraordinary General Meeting | 30.63% | February 22, 2024 | February 23, 2024 | Approved: 1. "Proposal on the Election of Non-Independent Directors for the Eighth Board of Directors" | | 2023 Annual General Meeting | Annual General Meeting | 33.39% | May 15, 2024 | May 16, 2024 | Approved: 1. "2023 Annual Board of Directors' Work Report" 2. "2023 Annual Supervisory Board's Work Report" 3. "2023 Annual Financial Settlement Report" 4. "2023 Annual Profit Distribution Plan" 5. "2023 Annual Report" and its summary 6. "Shareholder Return Plan for the Next Three Years (2024-2026)" 7. "Proposal on Directors' Remuneration" 8. "Proposal on Supervisors' Remuneration" 9. "Proposal on Purchasing D&O Liability Insurance" 10. "Proposal on Supplementary Confirmation of 2023 Annual Routine Related Party Transactions" 11. "Proposal on Signing Financial Business Service Agreement and Related Party Transactions" 12. "Proposal on Reappointing Audit Firm" | Changes in Directors, Supervisors, and Senior Management During the reporting period, Mr. Gong Zheng was elected as a director of the company, marking a change in the composition of directors, supervisors, and senior management - Mr. Gong Zheng was elected as a director of the company on February 22, 2024[56] Profit Distribution and Equity Incentive The company plans no semi-annual cash dividends, bonus shares, or capital increase from reserves, and its 2021 stock option incentive plan remains in the exercise waiting period with no new developments - The company plans no cash dividends, bonus shares, or capital increase from capital reserves for the semi-annual period[57] - The 2021 stock option incentive plan is currently in the exercise waiting period, with no new developments during the reporting period[57] Environmental and Social Responsibility This section outlines the company's environmental protection efforts and its commitment to social responsibility, including initiatives in low-carbon operations, public welfare, and industry-academia collaboration Major Environmental Issues The company is not a key polluter and received no environmental penalties, focusing on energy sector automation and low-carbon services, actively supporting "dual carbon" strategies, and promoting green operations through ISO14001 certification - The company is not classified as a key polluting unit by environmental protection authorities and received no administrative penalties for environmental issues during the reporting period[58][59] - The company focuses on automation, informatization, intelligence, and low-carbon services in the energy industry, fully utilizing new technologies such as big data and artificial intelligence to build a smart energy service system and promote the coordinated digital and green development of energy[58] - The company has obtained ISO14001 environmental management system certification, strengthened emissions management, consistently promoted energy conservation and consumption reduction, and advocated green office practices[58] Fulfillment of Social Responsibility The company upholds its commitment to social responsibility, publishing reports for 15 years, earning ESG awards, promoting low-carbon initiatives like paperless operations and smart carbon terminals, supporting rural revitalization and education, and fostering industry-academia collaboration - The company adheres to the philosophy of "social responsibility accompanying enterprise development," comprehensively and objectively presenting its management mechanisms and practical achievements in environmental, social responsibility, and corporate governance aspects to all sectors for 15 consecutive years through reports[60] - During the reporting period, the company was awarded the "ESG Model Enterprise Award," and its chairman Chen Lihao received the "ESG Influential Figure Award"[60] - In low-carbon environmental protection, the company comprehensively promotes the construction of numerous projects for State Grid, China Southern Power Grid, PowerChina, and other group enterprises, such such as single-set management of electronic accounting archives and fully digital electronic invoices, accelerating the achievement of "dual carbon" goals; concurrently, it launched innovative products like the "smart carbon terminal"[60] - In social welfare, the company adheres to the philosophy of "sincerely giving back to society," actively supporting public welfare areas such as rural revitalization, education development, and volunteer services[60] - In industry-academia-research collaboration, the company partners with universities such as the University of Macau and Sun Yat-sen University, engaging in extensive cooperation in collaborative innovation, industry-education integration, and talent cultivation[61] Significant Matters This section covers important corporate events and disclosures, including commitments, related party transactions, litigation, and other material issues affecting the company Commitments During the reporting period, there were no unfulfilled or overdue commitments from the company's actual controller, shareholders, related parties, acquirers, or the company itself - During the reporting period, there were no commitments from the company's actual controller, shareholders, related parties, acquirers, or the company itself that were either fulfilled or overdue as of the end of the reporting period[62] Related Party Fund Occupation and Guarantees During the reporting period, the company had no non-operating fund occupation by controlling shareholders or other related parties, nor any irregular external guarantees - During the reporting period, there was no non-operating occupation of funds by controlling shareholders or other related parties of the listed company[62] - The company had no irregular external guarantees during the reporting period[62] Appointment of Accounting Firm The company's semi-annual financial report was unaudited, and there was no mention of "non-standard audit reports" from the accounting firm for the current or prior year, indicating their absence - The company's semi-annual financial report was unaudited[62] - The company's Board of Directors and Supervisory Board did not provide explanations regarding "non-standard audit reports" from the accounting firm for the current or prior year[62] Litigation Matters The company had no significant litigation or arbitration matters during the reporting period, though other lawsuits totaled RMB 116.7151 million, including a contract dispute with Jiangsu Runqing Xingtong Enterprise Management Co., Ltd. for RMB 100 million in trust principal, which is still pending - The company had no significant litigation or arbitration matters during the reporting period[62] - The total amount involved in other lawsuits not meeting the disclosure threshold for significant litigation was RMB 116.7151 million[63] - The company filed a lawsuit with the Beijing Financial Court regarding a contract dispute with Jiangsu Runqing Xingtong Enterprise Management Co., Ltd. and others, involving a trust principal of RMB 100 million plus income, liquidated damages, legal fees, preservation fees, and litigation costs, with the case still pending as of the end of the reporting period[63] Significant Related Party Transactions The company engaged in routine related party transactions for goods and services with State Grid and SGCC Digital Technology, totaling RMB 745.2147 million in sales and RMB 30.2533 million in purchases, and held receivables from Zhuhai Haotian Investment Co., Ltd. and deposits with China Power Finance Co., Ltd. Related Party Transactions Related to Routine Operations (Sales of Goods and Provision of Services) | Related Party | Related Party Transaction Content | Related Party Transaction Amount (RMB 10,000) | Share of Similar Transactions | | :--- | :--- | :--- | :--- | | State Grid Corporation of China and its other subsidiaries | Sales of goods and provision of services | 71,277.72 | 68.23% | | State Grid Digital Technology Holdings Co., Ltd. and its subsidiaries | Sales of goods and provision of services | 188.21 | 0.18% | | GD Power Development Co., Ltd. and its subsidiaries | Sales of goods and provision of services | 30.21 | 0.03% | | Total | | 74,521.47 | | Related Party Transactions Related to Routine Operations (Purchases of Goods and Services) | Related Party | Related Party Transaction Content | Related Party Transaction Amount (RMB 10,000) | Share of Similar Transactions | | :--- | :--- | :--- | :--- | | State Grid Corporation of China and its other subsidiaries | Purchases of goods and services | 2,745.36 | 6.34% | | State Grid Digital Technology Holdings Co., Ltd. and its subsidiaries | Purchases of goods and services | 279.97 | 0.65% | | Total | | 3,025.33 | | Receivables from Related Parties | Related Party | Related Party Relationship | Reason for Formation | Period-End Balance (RMB 10,000) | | :--- | :--- | :--- | :--- | | Zhuhai Haotian Investment Co., Ltd. | Enterprise controlled by a shareholder holding over 5% | Asset transfer | 1,123.07 | Deposit Business with China Power Finance Co., Ltd. | Related Party | Related Party Relationship | Daily Maximum Deposit Limit (RMB 10,000) | Deposit Interest Rate Range | Beginning Balance (RMB 10,000) | Period-End Balance (RMB 10,000) | | :--- | :--- | :--- | :--- | :--- | :--- | | China Power Finance Co., Ltd. | Same ultimate controlling shareholder | 100,000 | 0.3%-1.35% | 62,798.65 | 4,439.24 | Significant Contracts and Their Performance During the reporting period, the company had no significant contracts related to trusteeship, contracting, guarantees, wealth management, or other major agreements, but did have leasing matters detailed in the financial report notes - The company had no trusteeship, contracting, significant guarantees, wealth management, or other significant contracts during the reporting period[74][75][76] - The company has leasing matters, detailed in "Section X Financial Report," "VII. Notes to Consolidated Financial Statements," "82. Leases" of this report[74] Share Changes and Shareholder Information This section details changes in the company's share capital, the composition of its shareholders, and any changes in the shareholdings of directors, supervisors, and senior management Share Change Status Restricted shares decreased by 4,728,121 shares, with a corresponding increase in unrestricted shares, primarily due to the lifting of restrictions on senior management shares, while the total share capital remained at 1,905,096,000 shares Share Change Status | Share Type | Quantity Before Change (shares) | Proportion Before Change | Change (Increase/Decrease) Subtotal (shares) | Quantity After Change (shares) | Proportion After Change | | :--- | :--- | :--- | :--- | :--- | :--- | | I. Restricted Shares | 151,006,664 | 7.93% | -4,728,121 | 146,278,543 | 7.68% | | II. Unrestricted Shares | 1,754,089,336 | 92.07% | 4,728,121 | 1,758,817,457 | 92.32% | | III. Total Shares | 1,905,096,000 | 100.00% | 0 | 1,905,096,000 | 100.00% | - Changes in restricted shares primarily involved the lifting of restrictions on senior management lock-up shares, such as Li Meiping's release of 281,876 shares[79][80] Shareholder Numbers and Shareholding At period-end, there were 66,445 common shareholders. SGCC Digital Technology and Chen Lihao, as parties acting in concert, collectively controlled 23.21% of voting rights, with GD Power Development Co., Ltd. holding 6.21%, including 13,010,191 frozen shares - As of the end of the reporting period, the total number of common shareholders was 66,445[82] Top 10 Common Shareholder Shareholding | Shareholder Name | Shareholder Nature | Shareholding Percentage | Number of Common Shares Held at Period-End (shares) | Number of Restricted Common Shares Held (shares) | Number of Unrestricted Common Shares Held (shares) | Share Status | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | State Grid Digital Technology Holdings Co., Ltd. | State-owned Legal Person | 13.25% | 252,454,728 | 0 | 252,454,728 | N/A | | Chen Lihao | Domestic Natural Person | 9.96% | 189,793,194 | 142,344,895 | 47,448,299 | N/A | | GD Power Development Co., Ltd. | State-owned Legal Person | 6.21% | 118,255,608 | 0 | 118,255,608 | Frozen 13,010,191 shares | - State Grid Digital Technology Holdings Co., Ltd. and Chen Lihao are parties acting in concert[83] Shareholding Changes of Directors, Supervisors, and Senior Management During the reporting period, there were no changes in the shareholdings of the company's directors, supervisors, and senior management - There were no changes in the shareholdings of the company's directors, supervisors, and senior management during the reporting period[86] Change in Controlling Shareholder or Actual Controller During the reporting period, there was no change in the company's controlling shareholder or actual controller - The company's controlling shareholder did not change during the reporting period[87] - The company's actual controller did not change during the reporting period[87] Preferred Shares Information This section confirms that the company had no preferred shares during the reporting period Preferred Shares Information The company had no preferred shares during the reporting period - The company had no preferred shares during the reporting period[88] Bonds Information This section confirms that the company had no bonds during the reporting period Bonds Information The company had no bonds during the reporting period - The company had no bonds during the reporting period[89] Financial Report This comprehensive section presents the company's unaudited semi-annual financial statements, including balance sheets, income statements, cash flow statements, and detailed notes on accounting policies, taxes, and specific financial items Audit Report The company's semi-annual financial report was unaudited - The company's semi-annual financial report was unaudited[90] Consolidated Financial Statements This section presents the company's consolidated balance sheet, income statement, cash flow statement, and statement of changes in owners' equity for the first half of 2024, reflecting its financial position, operating results, and cash flows Consolidated Balance Sheet As of June 30, 2024, the company's consolidated total assets were RMB 4.29 billion, with total liabilities at RMB 639.94 million and total owners' equity at RMB 3.65 billion Key Consolidated Balance Sheet Data (Period-End Balance) | Item | Amount (RMB) | | :--- | :--- | | Total Assets | 4,292,510,265.52 | | Total Current Assets | 3,267,099,177.71 | | Total Non-Current Assets | 1,025,411,087.81 | | Total Liabilities | 639,941,500.08 | | Total Owners' Equity | 3,652,568,765.44 | | Total Owners' Equity Attributable to Parent Company | 3,489,370,812.23 | Consolidated Income Statement For the first half of 2024, the company's consolidated total operating revenue was RMB 1.04 billion, with total operating costs at RMB 996.40 million, resulting in a net profit of RMB 45.48 million and basic/diluted EPS of RMB 0.0296 Key Consolidated Income Statement Data (Current Period) | Item | Amount (RMB) | | :--- | :--- | | Total Operating Revenue | 1,044,629,742.90 | | Total Operating Costs | 996,396,047.55 | | Total Profit | 46,561,457.10 | | Net Profit | 45,480,789.36 | | Net Profit Attributable to Parent Company Shareholders | 56,455,891.72 | | Basic Earnings Per Share | 0.0296 | | Diluted Earnings Per Share | 0.0296 | Consolidated Cash Flow Statement For the first half of 2024, net cash flow from operating activities was RMB -632.28 million, from investing activities was RMB -27.86 million, and from financing activities was RMB 84.79 million, resulting in a net decrease in cash and cash equivalents of RMB -575.34 million Key Consolidated Cash Flow Statement Data (Current Period) | Item | Amount (RMB) | | :--- | :--- | | Net Cash Flow from Operating Activities | -632,279,734.45 | | Net Cash Flow from Investing Activities | -27,859,182.97 | | Net Cash Flow from Financing Activities | 84,787,956.64 | | Net Increase in Cash and Cash Equivalents | -575,336,205.30 | | Period-End Cash and Cash Equivalents Balance | 240,343,711.81 | Consolidated Statement of Changes in Owners' Equity For the first half of 2024, consolidated owners' equity increased by RMB 52.15 million, with comprehensive income attributable to parent company owners at RMB 56.46 million and a RMB 6.66 million increase in capital reserves from share-based payments Consolidated Owners' Equity Changes (Current Period Increase/Decrease Amount) | Item | Amount (RMB) | | :--- | :--- | | Total Comprehensive Income | 45,488,275.69 | | Total Comprehensive Income Attributable to Parent Company Owners | 56,463,378.05 | | Total Comprehensive Income Attributable to Minority Shareholders | -10,975,102.36 | | Amount of Share-based Payments Recognized in Owners' Equity | 6,660,700.00 | Company Basic Information YGSOFT Co., Ltd., established in 2001 and listed in 2006, with a capital of RMB 1.905 billion, provides financial and management informatization solutions, and its consolidated scope of 17 subsidiaries remained unchanged - YGSOFT Co., Ltd., formerly Zhuhai YGSOFT New Era Software Industry Co., Ltd., was established as a whole in 2001 and listed on the Shenzhen Stock Exchange on August 23, 2006[118][119] - As of June 30, 2024, the company's share capital was RMB 1,905,096,000.00[119] - The company and its subsidiaries primarily engage in providing comprehensive financial and management informatization solutions and other services to clients; as of June 30, 2024, the company's consolidated scope included 17 subsidiaries, with no change from the prior year[119] Basis of Financial Statement Preparation These financial statements are prepared in accordance with Chinese accounting standards and regulations, based on a going concern assumption, using the accrual basis of accounting and historical cost measurement, with the company maintaining strong going concern ability for the next 12 months - These financial statements are prepared in accordance with the Accounting Standards for Business Enterprises, their application guidelines, interpretations, and other relevant regulations issued by the Ministry of Finance[120] - These financial statements are presented on a going concern basis, with accounting based on the accrual method, and, except for certain financial instruments, measured at historical cost[120] - The company maintains strong going concern ability for 12 months from the end of the reporting period, with no significant events or other important factors found that would materially affect its going concern ability[121] Significant Accounting Policies and Estimates This section details the company's significant accounting policies and estimates for financial statement preparation, covering business combinations, financial instruments, receivables, inventory, fixed assets, intangible assets, revenue recognition, employee benefits, and deferred income tax, with specific criteria for R&D capitalization and revenue recognition - The company determines the capitalization conditions for R&D expenses and revenue recognition policies based on its own production and operation characteristics[122] - At initial recognition, the company classifies financial assets into three categories—measured at amortized cost, at fair value through other comprehensive income, or at fair value through profit or loss—based on the business model for managing financial assets and the contractual cash flow characteristics of the financial assets[138] - The company recognizes revenue when it satisfies a performance obligation in a contract, which is when the customer obtains control of the related goods or services[198] - The company distinguishes expenditures for internal research and development projects into research phase expenditures and development phase expenditures; research phase expenditures are recognized in profit or loss when incurred, while development phase expenditures are capitalized only when specific conditions are met[185] Taxation This section outlines the company's main tax types and rates, including VAT, urban maintenance and construction tax, and corporate income tax, highlighting various tax incentives such as VAT refunds for software products and preferential income tax rates for high-tech and small-profit enterprises Main Tax Categories and Rates | Tax Category | Tax Rate | | :--- | :--- | | Value-Added Tax (VAT) | 6%, 9%, 13% | | Urban Maintenance and Construction Tax | 7% | | Corporate Income Tax | See table below | | Education Surcharge | 3% | | Local Education Surcharge | 2% | Corporate Income Tax Rates for Main Taxable Entities | Taxable Entity Name | Corporate Income Tax Rate | | :--- | :--- | | YGSOFT Co., Ltd. | 10% | | Nanjing YGSOFT Guang'an Information Technology Co., Ltd. | 15% | | YGSOFT (Wuhan) Co., Ltd. | 15% | | Changsha YGSOFT Ruixiang Technology Co., Ltd. | 15% | | Hangzhou Haomei Technology Co., Ltd. | 15% | | YGSOFT Information Technology (Macau) Co., Ltd. | 0% or 12% | | Hangzhou Weineng Intelligent Technology Co., Ltd. | 5% | | Hangzhou Haomei Electric Power Engineering Co., Ltd. | 5% | | Zhuhai YGSOFT Qingtian Energy Technology Co., Ltd. | 5% | | Foshan Qingfang Solar Technology Co., Ltd. | 5% | | Zhuhai YGSOFT Software Industry Co., Ltd. | 5% | | Zhuhai YGSOFT Fire Technology Co., Ltd. | 5% | | YGSOFT Energy Internet Industry Development (Hengqin) Co., Ltd. | 12.5% | | Other Subsidiaries | 25% | - During the reporting period, the company and its subsidiaries enjoyed VAT preferential policies for software products, receiving RMB 3.6148 million in immediate VAT refunds for software, which increased total profit by RMB 3.6148 million[222] - During the reporting period, the company and its subsidiaries benefited from R&D expense super deduction and corporate income tax preferential policies, reducing income tax expense by RMB 38.7718 million[222] Notes to Consolidated Financial Statements This section provides detailed notes and analysis for consolidated financial statement items, including monetary funds, receivables, contract assets, and R&D expenditures, highlighting a significant decrease in monetary funds and a substantial increase in contract assets Period-End Balance of Monetary Funds | Item | Period-End Balance (RMB) | | :--- | :--- | | Bank Deposits | 195,900,885.10 | | Deposits with Finance Company | 44,392,351.86 | | Total | 240,742,047.50 | Changes in Allowance for Doubtful Accounts (Accounts Receivable) | Category | Beginning Balance (RMB) | Accrued in Current Period (RMB) | Period-End Balance (RMB) | | :--- | :--- | :--- | :--- | | Allowance for doubtful accounts (Accounts Receivable) | 265,537,565.95 | -39,907,138.13 | 225,630,427.82 | Period-End Balance and Changes in Contract Assets | Item | Period-End Book Balance (RMB) | Period-End Allowance for Doubtful Accounts (RMB) | Period-End Book Value (RMB) | | :--- | :--- | :--- | :--- | | Contract Assets | 1,615,868,176.96 | 94,035,597.70 | 1,521,832,579.26 | | Contract asset impairment provision for the current period | 47,763,647.05 | | | Operating Revenue and Operating Costs (Current Period) | Item | Revenue (RMB) | Cost (RMB) | | :--- | :--- | :--- | | Principal Business | 1,043,992,745.93 | 432,545,530.37 | | Other Businesses | 636,996.97 | 387,960.69 | | Total | 1,044,629,742.90 | 432,933,491.06 | R&D Expenditures Total R&D expenditures for the period were RMB 442.41 million, with RMB 363.24 million expensed and RMB 79.17 million capitalized, covering projects such as smart global treasury management, general expense platforms, and AI-based intelligent agent platforms R&D Expenditure Status | Item | Current Period Amount (RMB) | Prior Period Amount (RMB) | | :--- | :--- | :--- | | Employee Compensation | 236,927,572.32 | 216,580,333.51 | | Travel Expenses | 21,995,722.45 | 17,261,762.09 | | Depreciation and Amortization Expenses | 86,891,927.31 | 40,084,593.47 | | Other | 96,591,902.20 | 108,242,786.20 | | Total | 442,407,124.28 | 382,169,475.27 | | Of which: Expensed R&D Expenditures | 363,238,573.65 | 329,859,932.50 | | Capitalized R&D Expenditures | 79,168,550.63 | 52,309,542.77 | - Capitalizable R&D projects include the Smart Global Treasury Management System, General Expense Reporting Platform based on Middle-ground Architecture, Enterprise Smart Risk Control Management Platform based on Middle-ground Architecture, Metaverse Space Collaboration Application, Large Model-based Intelligent Agent Innovation Application Platform, and Microservice-based Industry-Finance-Tax Leqi Direct Digital Platform[357][358] Changes in Consolidation Scope During the reporting period, there were no changes in the company's consolidation scope due to non-same control business combinations, same control business combinations, reverse acquisitions, or loss of control over subsidiaries - No business combinations involving entities not under common control occurred in the current period[359] - No business combinations involving entities under common control occurred in the current period[362] - There were no transactions or events resulting in the loss of control over subsidiaries in the current period[364] Interests in Other Entities This section details the company's interests in 17 subsidiaries, including Guangdong Shuyuan Technology Co., Ltd., where it holds 47% equity but controls 57% of voting rights, thus consolidating it, and its investments in associates with a book value of RMB 27.98 million - The company owns 17 subsidiaries, including Jiruisi Testing Technology Service (Zhuhai) Co., Ltd., YGSOFT (Beijing) Co., Ltd., and others[365] - The company signed an acting-in-concert agreement with SGCC Digital Technology, holding 57% of the voting rights in Guangdong Shuyuan Technology Co., Ltd., thus having substantive control and including it in the consolidated financial statements[366] Summarized Financial Information of Insignificant Associates | Item | Period-End Balance / Current Period Amount (RMB) | | :--- | :--- | | Total Book Value of Investments | 27,980,753.90 | | Net Profit | -1,720,053.11 | | Total Comprehensive Income | -1,720,053.11 | Government Grants At period-end, deferred income from government grants was RMB 650,000, with RMB 150,000 added and RMB 467,901.97 transferred to other income in the current period, while RMB 5,435,865.72 in income-related government grants were recognized in current profit or loss Liability Items Involving Government Grants | Accounting Subject | Beginning Balance (RMB) | New Grants Added in Current Period (RMB) | Amount Transferred to Other Income in Current Period (RMB) | Period-End Balance (RMB) | Asset/Income Related | | :--- | :--- | :--- | :--- | :--- | :--- | | Deferred Income | 1,029,450.88 | 150,000.00 | 467,901.97 | 650,000.00 | Income Related | - Income-related government grants recognized in current profit or loss amounted to RMB 5,435,865.72[375] Risks Related to Financial Instruments The company's financial instruments, including monetary funds and receivables, expose it to credit, liquidity, and market risks, which are managed through diversified investments, credit assessments, cash monitoring, and capital structure oversight, with a period-end asset-liability ratio of 14.91% - The company's main financial instruments, including monetary funds, notes receivable, accounts receivable, other receivables, and long-term receivables, expose it to credit risk, liquidity risk, and market risk[376][377][378] - The company manages risks by assessing customer creditworthiness, regularly monitoring customer credit records, maintaining sufficient cash and cash equivalents, monitoring bank bo