渤海化学(600800) - 2024 Q2 - 季度财报

Definitions This section provides definitions for key terms, company names, and reporting periods to ensure clarity and consistency throughout the report Common Terms Definitions This chapter defines common terms used in the report, including company names, abbreviations, related entities, reporting periods, and key business and technical terms, ensuring clarity and consistency Common Terms Definitions | Common Term | Meaning | | :--- | :--- | | Our Company, Company, The Company, Bohai Chemical | Tianjin Bohai Chemical Co., Ltd | | Reporting Period, This Reporting Period | January 1, 2024 to June 30, 2024 | | Bohai Petrochemical, Target Company | Tianjin Bohai Petrochemical Co., Ltd., a wholly-owned subsidiary of the Company | | PDH, Propane Dehydrogenation to Propylene, Lummus Process | Propane dehydrogenation to propylene developed by Lummus can dehydrogenate propane to propylene under the action of a catalyst | Company Profile and Key Financial Indicators This section provides an overview of the company's fundamental information and key financial performance, highlighting significant revenue growth alongside net losses and changes in cash flow Company Basic Information This chapter outlines the company's basic registration information, contact details, information disclosure channels, and stock overview, specifying the company name, legal representative, registered address, and stock code Company Basic Information | Indicator | Content | | :--- | :--- | | Company Chinese Name | Tianjin Bohai Chemical Co., Ltd | | Company Chinese Abbreviation | Bohai Chemical | | Legal Representative | Guo Zijing | | Stock Exchange | Shanghai Stock Exchange | | Stock Abbreviation | Bohai Chemical | | Stock Code | 600800 | Company Key Accounting Data and Financial Indicators During the reporting period, the company's operating revenue significantly increased by 74.69%, but net profit attributable to shareholders and non-recurring net profit were both negative, with losses expanding year-over-year. Net cash flow from operating activities turned positive, while total assets and net assets showed slight changes 2024 Semi-Annual Key Accounting Data | Key Accounting Data | This Reporting Period (Jan-Jun) | Prior Year Period | Change from Prior Year Period (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 2.505 billion Yuan | 1.434 billion Yuan | 74.69 | | Net Profit Attributable to Listed Company Shareholders | -315.52 million Yuan | -266.20 million Yuan | Not applicable | | Net Profit Attributable to Listed Company Shareholders After Deducting Non-Recurring Gains and Losses | -320.51 million Yuan | -264.80 million Yuan | Not applicable | | Net Cash Flow from Operating Activities | 118.28 million Yuan | -448.21 million Yuan | Not applicable | 2024 Semi-Annual Key Financial Indicators | Key Financial Indicators | This Reporting Period (Jan-Jun) | Prior Year Period | Change from Prior Year Period (%) | | :--- | :--- | :--- | :--- | | Basic Earnings Per Share (Yuan/share) | -0.28 | -0.22 | Not applicable | | Diluted Earnings Per Share (Yuan/share) | -0.28 | -0.22 | Not applicable | | Basic Earnings Per Share After Deducting Non-Recurring Gains and Losses (Yuan/share) | -0.29 | -0.22 | Not applicable | | Weighted Average Return on Net Assets (%) | -14.12 | -9.59 | Decreased by 4.53 percentage points | | Weighted Average Return on Net Assets After Deducting Non-Recurring Gains and Losses (%) | -14.35 | -9.54 | Decreased by 4.81 percentage points | Non-Recurring Gains and Losses Items and Amounts During the reporting period, the company's total non-recurring gains and losses amounted to 4.99 million Yuan, primarily from government subsidies and fair value changes in financial assets. Some government subsidies and VAT input tax deductions were deemed related to normal operating activities and not included in non-recurring gains and losses 2024 Semi-Annual Non-Recurring Gains and Losses Items | Non-Recurring Gains and Losses Item | Amount (Yuan) | | :--- | :--- | | Government subsidies included in current profit or loss | 3,242,505.05 | | Gains and losses from changes in fair value of financial assets and liabilities held by non-financial enterprises, and gains and losses from disposal of financial assets and liabilities | 2,208,991.00 | | Other non-operating income and expenses apart from the above | 25,225.12 | | Less: Income tax impact | 482,709.76 | | Total | 4,994,011.41 | - Tianjin Industrial Science and Technology Development Special Fund Project, advanced manufacturing VAT input tax deduction, and sewage treatment subsidies were identified as related to the company's normal operating activities and are not included in non-recurring gains and losses[17] Management Discussion and Analysis This section discusses the company's industry context, core competencies, operational performance, and risk management strategies amidst a challenging market environment Explanation of the Company's Industry and Main Business During the Reporting Period In the first half of 2024, the oil and chemical industry faced multiple challenges including weak market demand, low profits, slowing investment, and insufficient innovation. Propylene, a key petrochemical product, saw increased oversupply pressure due to continuous capacity expansion, leading to price suppression. The company's main business, propylene production, increased year-over-year, but operating rates declined due to spring maintenance and economic factors - In the first half of 2024, China's oil and chemical industry faced weak market demand, low profit levels, and challenges including insufficient effective demand, slowing investment growth, and innovation capabilities needing improvement[18] 2024 January-May Propylene Production and Sales Data | Indicator | Cumulative Production (Ten thousand tons) | Year-on-Year Growth (%) | Cumulative Consumption (Ten thousand tons) | Year-on-Year Growth (%) | | :--- | :--- | :--- | :--- | :--- | | Propylene (Jan-May) | 2242.99 | 13.6 | 2233.06 | 9.2 | - It is estimated that in the second half of 2024, domestic propylene new capacity will reach 6.66 million tons, with total capacity exceeding 72 million tons/year by year-end, a year-on-year increase of approximately 15%, primarily from PDH and refining-chemical integration projects[19] Analysis of Core Competitiveness During the Reporting Period The company's core competitiveness lies in cost control, technological innovation, management model, and geographical advantages. It operates China's first and largest single 600,000 tons PDH unit, utilizing the internationally leading Lummus Catofin process, and benefits from its proximity to Tianjin Port - The company possesses strong cost control advantages through refined management, integrated utility planning, and strict control of period expenses[20] - The company operates China's first and largest single 600,000 tons PDH unit, utilizing the internationally leading Lummus Catofin process, which offers convenient operation, stable capacity, and strong raw material adaptability[20] - Located in one of Tianjin Port's five major port areas, the company benefits from a significant geographical advantage, saving substantial propane transportation and storage costs due to its proximity to the port[21] Discussion and Analysis of Operating Conditions In the first half of 2024, facing weaker-than-expected economic recovery and a downturn in the propylene industry, the company achieved operating revenue of 2,505.11 million Yuan, but both total profit and net profit attributable to parent company shareholders were negative. The second half will focus on cost reduction, efficiency improvement, and accelerating the construction of new materials projects for acrylic esters and superabsorbent resins 2024 First Half Key Operating Performance | Indicator | Amount (Million Yuan) | | :--- | :--- | | Operating Revenue | 2,505.11 | | Total Profit | -371.65 | | Net Profit Attributable to Listed Company Shareholders | -315.52 | - The company will continue to focus on cost reduction and efficiency improvement in the second half of the year to enhance core competitiveness, and accelerate the construction of Bohai Petrochemical's acrylic ester and superabsorbent resin new materials project[22] Main Operating Conditions During the Reporting Period This chapter provides a detailed analysis of the company's financial statement item changes, asset and liability status, and investment situation during the reporting period. Operating revenue and costs significantly increased due to higher production and sales volumes, while administrative expenses decreased due to production expenditures during Bohai Petrochemical's shutdown being reclassified. Financial expenses rose due to increased debt. Multiple changes occurred in the asset and liability structure, such as significant increases in monetary funds, long-term deferred expenses, and short-term borrowings 1 Analysis Table of Changes in Financial Statement Items During the reporting period, the company's operating revenue and operating costs increased by 74.69% and 78.16% respectively due to higher production and sales volumes. Administrative expenses decreased by 60.79% year-on-year, mainly due to production expenditures during Bohai Petrochemical's shutdown being reclassified as administrative expenses. Financial expenses and R&D expenses increased by 33.05% and 54.69% respectively. Net cash flow from operating activities turned positive Major Financial Statement Item Changes | Item | Current Period Amount (Yuan) | Prior Year Period Amount (Yuan) | Change (%) | Reason for Change | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue | 2,505,111,987.80 | 1,434,006,472.87 | 74.69 | Increased production and sales volume | | Operating Costs | 2,711,356,250.29 | 1,521,829,350.61 | 78.16 | Increased production and sales volume | | Selling Expenses | 7,850,588.40 | 6,740,084.56 | 16.48 | Increased production and sales volume, increased warehousing fees | | Administrative Expenses | 49,763,861.61 | 126,921,869.34 | -60.79 | Production expenditures during Bohai Petrochemical's shutdown in the prior period were included in administrative expenses | | Financial Expenses | 21,676,992.87 | 16,292,449.54 | 33.05 | Increased debt scale | | R&D Expenses | 98,598,628.22 | 63,738,934.94 | 54.69 | Increased R&D investment | | Net Cash Flow from Operating Activities | 118,276,084.09 | -448,210,434.82 | Not applicable | Increased revenue, increased payables for raw material procurement | | Net Cash Flow from Investing Activities | -20,955,749.91 | -6,134,168.93 | Not applicable | Increased expenditures for construction in progress and fixed assets | | Net Cash Flow from Financing Activities | 330,731,931.23 | -187,583,485.58 | Not applicable | Increased borrowings by Bohai Petrochemical | (III) Analysis of Assets and Liabilities At the end of the reporting period, the company's monetary funds increased by 81.74% year-on-year to 1.294 billion Yuan, mainly due to increased sales revenue and bank borrowings. Long-term deferred expenses increased by 286.23% due to catalysts being put into use. Short-term and long-term borrowings increased by 50.04% and 57.20% respectively to meet financing needs. Inventories decreased by 38.08%, and accounts payable increased by 66.31%. Additionally, 194.78 million Yuan in monetary funds and 437.74 million Yuan in fixed assets were restricted Asset and Liability Status Changes | Item Name | Current Period End Amount (Yuan) | Current Period End % of Total Assets | Prior Year End Amount (Yuan) | Prior Year End % of Total Assets | Change from Prior Year End (%) | Explanation | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Monetary Funds | 1,293,905,417.59 | 29.21 | 711,971,890.99 | 16.64 | 81.74 | Increased sales revenue and bank borrowings | | Notes Receivable | 719,968.20 | 0.02 | 55,868,019.22 | 1.31 | -98.71 | Notes matured and settled | | Inventories | 427,518,527.24 | 9.65 | 690,408,766.55 | 16.14 | -38.08 | Increased sales led to reduced inventory | | Long-term Deferred Expenses | 187,149,216.48 | 4.22 | 48,455,653.58 | 1.13 | 286.23 | Bohai Petrochemical's catalysts put into use | | Deferred Income Tax Assets | 166,270,487.80 | 3.75 | 109,917,603.89 | 2.57 | 51.27 | Bohai Petrochemical's losses led to deferred income tax asset recognition | | Short-term Borrowings | 785,797,684.99 | 17.74 | 523,723,350.60 | 12.24 | 50.04 | Increased financing needs for Bohai Petrochemical | | Accounts Payable | 434,815,324.52 | 9.82 | 261,447,017.51 | 6.11 | 66.31 | Increased raw material procurement for Bohai Petrochemical | | Long-term Borrowings | 403,960,000.00 | 9.12 | 256,980,000.00 | 6.01 | 57.20 | Increased financing needs for Bohai Petrochemical | Period-End Major Restricted Assets | Item | Period-End Book Value (Yuan) | Reason for Restriction | | :--- | :--- | :--- | | Monetary Funds | 194,783,657.72 | Margin deposits | | Fixed Assets | 437,739,935.41 | Fixed assets under sale-leaseback | (VI) Analysis of Major Holding and Associate Companies The company's main holding subsidiary, Tianjin Bohai Petrochemical Co., Ltd., reported operating revenue of 2.482 billion Yuan but a net loss of 326 million Yuan during the reporting period. Tianjin Global Magnetic Card Technology Co., Ltd. and Tianjin Global Chemical Technology Co., Ltd. also recorded losses, while Huaxu Gold Card Co., Ltd. performed better with a net profit of 47.76 million Yuan Major Holding and Associate Company Operating Performance | Enterprise Name | Main Products or Services | Operating Revenue (Yuan) | Net Profit (Yuan) | | :--- | :--- | :--- | :--- | | Tianjin Bohai Petrochemical Co., Ltd. | Production and sales of petrochemical basic raw materials such as propylene | 2,481,521,132.39 | -325,511,196.28 | | Tianjin Global Magnetic Card Technology Co., Ltd. | Production and sales of data card products, printing products, smart application systems, and supporting equipment | 22,988,412.39 | -25,146,861.93 | | Tianjin Global Chemical Technology Co., Ltd. | Chemical product production, sales | 0.00 | -3,658,600.13 | | Huaxu Gold Card Co., Ltd. | Production of commercial cryptographic products approved by national cryptography administration | 85,277,191.76 | 47,762,588.91 | Other Disclosure Matters The company faces multiple risks including macroeconomic fluctuations, safety and environmental protection, industry market, operational, and financial risks. To mitigate these, the company will closely monitor policies, increase investment in safety and environmental protection, strengthen technological innovation, optimize procurement and sales strategies, and use foreign exchange derivatives to hedge currency risks 1. Macroeconomic Fluctuation Risk The company's profitability, primarily from basic chemical products, is significantly affected by macroeconomic fluctuations, with increasing challenges in domestic economic recovery. The company will closely monitor macroeconomic trends and national policies to adjust its business plans - The company's main products are basic chemical products, and its profitability is significantly affected by macroeconomic fluctuations, with increasing difficulty in domestic economic recovery and development[29] - Countermeasures: Closely monitor macroeconomic trends and national policy directions, adapt to changes, and actively adjust business plans[29] 2. Safety and Environmental Risk The chemical industry faces increasingly stringent safety and environmental regulations, posing significant operational, development, and liability pressures for the company. The company will strictly adhere to safety-first and green development principles, increase investment in safety and environmental protection, and enhance intelligent operations to ensure sustainable development - The chemical industry faces increasingly stringent safety and environmental regulations, and the company faces significant operational and development pressures as well as liability risks[29] - Countermeasures: Strictly adhere to the philosophy of safety first and green development, increase investment in safety and environmental protection, proactively plan for intelligent factories, and strengthen environmental governance and energy conservation and emission reduction[29] 3. Industry Market Risk The company faces risks such as strong reliance on major customers, slow market adoption of new products and technologies, and market competition. The company will actively expand downstream customers, rely on continuous technological innovation, increase R&D investment, and strive for breakthroughs in new materials, new energy, and electronic payment fields - The company faces risks such as strong reliance on major customers, slow market adoption of new products and technologies, and market competition[29] - Countermeasures: Actively expand downstream customers, rely on continuous technological innovation to lead the market, increase R&D investment, and strive for breakthroughs in new materials, new energy, and electronic payment fields[29] 4. Operational Risk Rising raw material costs, weak market demand, and a single product structure may increase operating costs and squeeze profit margins. The company will continue to prioritize safe production, adopt a long-term contract and spot market propane procurement strategy, closely monitor market conditions, adjust sales strategies, and expand the propylene downstream industry chain - Sustained significant increases in raw material costs, weak market demand, and a single product structure will further increase operating costs, squeeze profit margins, and affect operating results[29] - Countermeasures: Continue to prioritize safe production, adopt a long-term contract and spot market strategy for propane procurement, introduce new suppliers; on the sales side, closely monitor market conditions, adjust sales volume, and opportunistically conduct propylene export and propane direct sales business, and improve the layout of the propylene downstream industry chain[29] 5. Financial Risk The US interest rate hikes have kept the dollar interest rate high, exposing the company's import procurement to exchange rate fluctuation risks. The company has improved its international letter of credit forward settlement and hedging team and management system, and utilizes foreign exchange derivatives to mitigate exchange rate risks - The international and domestic situation has not significantly improved, and while the pace of US interest rate hikes has slowed, it has not stopped, keeping dollar interest rates high, which means the company's import procurement still faces exchange rate fluctuation risks[29] - Countermeasures: Improve the international letter of credit forward settlement and hedging team and management system, maintain close communication with financial institutions, and utilize foreign exchange derivatives to hedge and reduce exchange rate fluctuation risks[30] Corporate Governance This section details the company's shareholder meeting activities and decisions regarding profit distribution and capital reserve conversions Brief Introduction to Shareholders' Meetings During the reporting period, the company convened its first extraordinary general meeting in 2024 and the 2023 annual general meeting, approving various proposals including related party transactions, guarantee limits, investment plans, annual reports, and profit distribution plans - The first extraordinary general meeting in 2024 approved proposals including the estimated daily related party transactions for 2024, estimated guarantee limits, and investment plans[30] - The 2023 annual general meeting approved 16 proposals, including the 2023 annual report, board of directors'/supervisory board's work reports, financial final accounts/budget reports, profit distribution plan, internal control audit report, and conducting financial derivatives transactions[30] Profit Distribution or Capital Reserve to Share Capital Increase Plan The company will not distribute profits or convert capital reserves into share capital for the first half of 2024 - The company will not distribute profits or convert capital reserves into share capital for the first half of 2024[32] Environmental and Social Responsibility This section outlines the company's environmental compliance, pollution control measures, and efforts to reduce carbon emissions through renewable energy initiatives Environmental Information The company's subsidiary, Bohai Petrochemical, as a key polluting entity, maintained air and wastewater emissions in compliance with national standards during the reporting period. The company strictly implemented the 'three simultaneities' system for pollution control facilities and developed emergency response plans for environmental incidents and self-monitoring programs 1. Pollution Discharge Information Bohai Petrochemical's total emissions of major atmospheric pollutants, nitrogen oxides, sulfur dioxide, and particulate matter, were all significantly below permitted emission limits, and flue gas pollutant concentrations and total emissions met standards. Total wastewater discharge also complied with permitted emission limits and was discharged after treatment to meet standards Bohai Petrochemical January-June 2024 Waste Gas Emission Status | Pollutant Name | Actual Total Emissions Jan-Jun 2024 (t) | Permitted Emissions (t/year) | | :--- | :--- | :--- | | Nitrogen Oxides | 169.17 | 592.08 | | Sulfur Dioxide | 10.83 | 115 | | Particulate Matter | 15.86 | 94.2 | - Bohai Petrochemical's total external discharge of production wastewater from January to June 2024 was 65,171 tons, which is below the annual permitted emission limit of 125,700 tons, and both emission concentration and total volume met discharge standards[34] 2. Construction and Operation of Pollution Control Facilities Bohai Petrochemical strictly adheres to the "three simultaneities" requirement for pollution prevention and control measures in construction projects, ensuring environmental facilities are designed, constructed, and operated concurrently with the main project. Key environmental facilities include low-NOx combustion devices and NH3-SCR units for waste gas, pre-treatment and membrane treatment systems for wastewater, and noise reduction, silencing, and sound insulation measures, all undergoing daily operation, maintenance, and online monitoring - Bohai Petrochemical strictly implements the "three simultaneities" requirement for pollution prevention and control measures in construction projects, ensuring that environmental facilities are designed, constructed, and operated concurrently with the main project[35] - Major environmental facilities include low-NOx combustion devices and NH3-SCR units for waste gas, wastewater pre-treatment and membrane treatment systems, and noise reduction, silencing, and sound insulation measures[35] 3. Environmental Impact Assessment of Construction Projects and Other Environmental Protection Administrative Permits Bohai Petrochemical's existing 600,000 tons/year propane dehydrogenation unit passed environmental acceptance in 2015, and subsequent projects such as the emergency gas boiler and wastewater pre-treatment have also obtained environmental approvals and completed acceptance - Bohai Petrochemical's existing 600,000 tons/year propane dehydrogenation unit passed environmental acceptance organized by the Tianjin Environmental Protection Bureau in 2015[36] - Multiple subsequent projects, such as the emergency gas boiler, wastewater pre-treatment, odor control, waste heat recovery, gas boiler low-nitrogen combustion, and wastewater membrane treatment projects, have all obtained relevant environmental approvals or completed self-acceptance[36][37] 4. Emergency Response Plan for Environmental Emergencies The company has developed and revised the "Tianjin Bohai Petrochemical Co., Ltd. Emergency Response Plan for Environmental Incidents" and completed its filing on August 30, 2023, to enhance emergency response capabilities - The company has developed and revised the "Tianjin Bohai Petrochemical Co., Ltd. Emergency Response Plan for Environmental Incidents," and completed its filing on August 30, 2023[38] 5. Environmental Self-Monitoring Plan Bohai Petrochemical strictly adheres to the pollutant monitoring plan required by its discharge permit, publicly disclosing environmental monitoring information through the Tianjin Pollutant Source Monitoring Data Management System website, covering waste gas, wastewater, and noise emissions - Bohai Petrochemical strictly adheres to the pollutant monitoring plan required by its discharge permit and promptly discloses enterprise environmental monitoring information to accept public supervision[39] - The environmental self-monitoring plan covers waste gas, wastewater, and noise emissions, specifying major pollution factors, control indicators, monitoring frequency, monitoring methods, and testing instruments[39] Measures Taken and Effects Achieved to Reduce Carbon Emissions During the Reporting Period The company reduced carbon emissions by constructing distributed photovoltaic power generation projects. From January to June 2024, distributed photovoltaic (Phase I + Phase II) generated 163,800 kWh, saving 144.87 tons of carbon dioxide - The company constructed a Phase II photovoltaic power generation project with an approximate generating capacity of 619kW on the roofs of its control center building, maintenance workshop, and spare parts warehouse[40] January-June 2024 Carbon Emission Reduction Status | Indicator | Value | | :--- | :--- | | Carbon Reduction Measures Taken | Yes | | Reduced Carbon Dioxide Equivalent Emissions (tons) | 144.87 | | Distributed Photovoltaic (Phase I + Phase II) Power Generation (Ten thousand kWh) | 16.38 | Significant Matters This section covers the fulfillment of commitments by controlling parties, the company's credit standing, significant related party transactions, guarantees, and the progress and changes in the use of raised capital Fulfillment of Commitments During the reporting period, the company's actual controller, controlling shareholder, and related parties strictly fulfilled all commitments, including maintaining the listed company's independence, not occupying funds, not providing illegal guarantees, not transferring shares suspected of false records, not changing control, avoiding horizontal competition, and managing related party transactions - Tianjin State-owned Capital Investment and Operation Co., Ltd. committed to maintaining separation from the listed company in terms of business, assets, finance, personnel, and organization, and not occupying the listed company's funds or providing illegal guarantees[42] - Controlling shareholder Tianjin Bohai Chemical Group Co., Ltd. committed not to transfer shares in the listed company if investigated for suspected false records, and committed to no plans to change the listed company's control within the next sixty months[42] - Bohai Group committed to ensuring the independence of the listed company's personnel, assets, finance, organization, and business, strictly controlling related party transactions, avoiding horizontal competition, and compensating for losses caused by breach of commitments[44][45] Explanation of the Company's and Its Controlling Shareholder's and Actual Controller's Credit Status During the Reporting Period During the reporting period, the company, its controlling shareholder, and actual controller maintained good credit standing with no significant breaches of trust - During the reporting period, the company, its controlling shareholder, and actual controller maintained good credit standing, with no significant breaches of trust[47] Significant Related Party Transactions The company's estimated annual related party transactions for 2024 amounted to 2.588 billion Yuan, with actual transactions totaling 1.752 billion Yuan as of the end of the reporting period, not exceeding the estimated amount. Related party transactions had no significant impact on the company's independence, and the company's reliance on related parties is low. The company also has deposit services with Tianjin Bohai Group Finance Co., Ltd 2. Matters Already Disclosed in Interim Announcements with Subsequent Progress or Changes The company's estimated annual related party transactions for 2024 amounted to 2,587.67 million Yuan, with actual transactions totaling 1,752.10 million Yuan as of June 30, 2024, not exceeding the estimated amount, and having no significant impact on the company's independence 2024 Annual Daily Related Party Transaction Status | Indicator | Amount (Million Yuan) | | :--- | :--- | | 2024 Estimated Annual Daily Related Party Transaction Amount | 2,587.67 | | Actual Amount as of June 30, 2024 | 1,752.10 | - Related party transactions have no significant impact on the independence of the listed company, and the company's reliance on related parties is low[48] 1. Deposit Business The company has deposit services with Tianjin Bohai Group Finance Co., Ltd., with a period-end balance of 8 million Yuan. A total of 120 million Yuan was deposited and 112 million Yuan was withdrawn during the current period Related Party Deposit Business Status | Related Party | Related Relationship | Deposit Interest Rate Range | Beginning Balance (Yuan) | Total Deposits This Period (Yuan) | Total Withdrawals This Period (Yuan) | Ending Balance (Yuan) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Tianjin Bohai Group Finance Co., Ltd. | Under common control | 1.15/0.35 | 0 | 120,000,000 | 112,000,000 | 8,000,000 | Significant Contracts and Their Fulfillment 1 Custody, Contracting, Leasing Matters As of the end of the reporting period, the company's total guarantee balance for subsidiaries was 35,289,883.86 Yuan, accounting for 1.70% of the company's net assets Company Total Guarantee Amount Status | Indicator | Amount (Yuan) | Percentage of Company's Net Assets (%) | | :--- | :--- | :--- | | Total Guarantee Balance for Subsidiaries at Period-End (B) | 35,289,883.86 | | | Total Guarantees (A+B) | 35,289,883.86 | 1.70 | Explanation of Progress in the Use of Raised Funds The company's total raised capital was 706 million Yuan, with a net amount of 699 million Yuan. As of the end of the reporting period, a cumulative 17 million Yuan had been invested, representing an investment progress of 2.43%. The 'Propane Dehydrogenation Unit Technical Transformation Project' changed its implementation location due to industrial planning policies, and the company is re-conducting feasibility studies and other preliminary preparations. The company also used 200 million Yuan of idle raised capital to temporarily supplement working capital Overall Use of Raised Funds The company's total raised capital was 706 million Yuan, with a net amount of 699 million Yuan after deducting issuance expenses. As of the end of the reporting period, a cumulative 17 million Yuan had been invested, representing an investment progress of 2.43% Overall Use of Raised Funds | Indicator | Amount (Yuan) | | :--- | :--- | | Total Raised Funds | 706,018,058.90 | | Net Raised Funds After Deducting Issuance Expenses (1) | 698,957,878.31 | | Total Cumulative Raised Funds Invested as of Period-End (4) | 17,000,000.00 | | Cumulative Investment Progress of Raised Funds (%) (6) = (4)/(1) | 2.43 | Details of Raised Fund Investment Projects The "Propane Dehydrogenation Unit Technical Transformation Project" has a planned investment of 699 million Yuan, with 0 Yuan invested this year and a cumulative investment of 17 million Yuan, representing an investment progress of 2.43%. The project's implementation location has changed due to Tianjin's industrial planning policies, and the company is re-conducting feasibility studies and other preliminary preparations Raised Fund Investment Project "Propane Dehydrogenation Unit Technical Transformation Project" Progress | Project Name | Planned Total Investment of Raised Funds (1) (Yuan) | Amount Invested This Year (Yuan) | Total Cumulative Raised Funds Invested as of Period-End (2) (Yuan) | Investment Progress (%) (3) = (2)/(1) | | :--- | :--- | :--- | :--- | :--- | | Propane Dehydrogenation Unit Technical Transformation Project | 698,957,878.31 | 0.00 | 17,000,000.00 | 2.43 | - The raised fund investment project's implementation location has been changed to Tianjin Economic-Technological Development Area Nangang Industrial Zone, and the company is re-conducting feasibility studies and other preliminary preparations, due to the impact of Tianjin's relevant industrial planning policies, which prevented its original construction at Bohai Petrochemical's existing plant in Tianjin Binhai New Area Lingang Economic Zone[58] 2. Temporary Supplementation of Working Capital with Idle Raised Funds The company approved the use of up to 200 million Yuan of idle raised funds to temporarily supplement working capital, for a period not exceeding 12 months from April 23, 2024, ensuring no impact on the progress of raised fund investment projects - The company approved the use of up to 200 million Yuan of idle raised funds to temporarily supplement working capital[61] - The usage period is not to exceed 12 months from April 23, 2024, ensuring no impact on the construction progress of raised fund investment projects[61] Explanation of Other Significant Matters On August 27, 2024, the company's board of directors approved the "Proposal on Changing Part of the Raised Capital Investment Projects," transforming the "Propane Dehydrogenation Unit Technical Transformation Project" into the "Acrylic Ester and Superabsorbent Resin New Materials Project" - On August 27, 2024, the company's board of directors approved the "Proposal on Changing Part of the Raised Capital Investment Projects"[62] - The original "Propane Dehydrogenation Unit Technical Transformation Project" was changed to the "Acrylic Ester and Superabsorbent Resin New Materials Project"[62] Share Changes and Shareholder Information This section details the company's share capital stability and provides an overview of its shareholder structure, including major shareholders and any pledged or restricted shares Share Capital Change Information During the reporting period, there were no changes in the company's total share capital or share structure - During the reporting period, there were no changes in the company's total share capital or share structure[63] Shareholder Information As of the end of the reporting period, the company had a total of 40,302 common shareholders. Among the top ten shareholders, Tianjin Bohai Chemical Group Co., Ltd. held 28.41% as the largest shareholder, and Tianjin Global Magnetic Card Group Co., Ltd. held 9.50% as the second largest, both acting in concert. Some shareholders' shares were pledged or restricted Total Common Shareholders as of Period-End | Indicator | Number (Households) | | :--- | :--- | | Total Common Shareholders | 40,302 | Top Ten Shareholders' Shareholding Status | Shareholder Name | Period-End Shareholding Quantity | Percentage (%) | Share Status | Quantity | | :--- | :--- | :--- | :--- | :--- | | Tianjin Bohai Chemical Group Co., Ltd. | 315,392,855 | 28.41 | None | 0 | | Tianjin Global Magnetic Card Group Co., Ltd. | 105,431,347 | 9.50 | Pledged | 42,860,000 | | Tianjin Jinrong Investment Service Group Co., Ltd. | 66,300,000 | 5.97 | None | 0 | | Hebei Hainan Petrochemical New Materials Co., Ltd. | 42,532,900 | 3.83 | None | 0 | | Shanghai Jingneng Petrochemical Co., Ltd. | 24,262,135 | 2.19 | Pledged | 15,650,000 | - The company's largest shareholder, Bohai Group, and second largest shareholder, Magnetic Card Group, have an affiliated relationship and are considered parties acting in concert. Hebei Hainan Petrochemical New Materials Co., Ltd., Guo Fengting, and Shen Jie are parties acting in concert[66] Top Ten Shareholders with Restricted Shares and Restriction Conditions | No. | Name of Shareholder with Restricted Shares | Number of Restricted Shares Held (shares) | Restriction Conditions | | :--- | :--- | :--- | :--- | | 1 | Zhejiang Shengzhou No. 9 Construction Engineering Company | 180,000 | Unpaid shares advanced by the second largest shareholder, Magnetic Card Group, during share reform | | 2 | Shanghai Lingfeng Computer Information Service Co., Ltd. | 105,000 | Unpaid shares advanced by the second largest shareholder, Magnetic Card Group, during share reform | | 3 | Shanghai Guangheng Electronic Engineering Co., Ltd. | 30,000 | Unpaid shares advanced by the second largest shareholder, Magnetic Card Group, during share reform | Preferred Share Information This section confirms the absence of any preferred share-related information for the company during the reporting period Preferred Share Information There was no preferred share information for the company during the reporting period - There was no preferred share information for the company during the reporting period[68] Bond-Related Information This section confirms the absence of any corporate bonds, non-financial enterprise debt financing instruments, or convertible corporate bonds during the reporting period Corporate Bonds (Including Enterprise Bonds) and Non-Financial Enterprise Debt Financing Instruments During the reporting period, the company had no information regarding corporate bonds (including enterprise bonds) or non-financial enterprise debt financing instruments - During the reporting period, the company had no information regarding corporate bonds (including enterprise bonds) or non-financial enterprise debt financing instruments[69] Convertible Corporate Bonds There was no convertible corporate bond information for the company during the reporting period - There was no convertible corporate bond information for the company during the reporting period[69] Financial Report This section includes the unaudited financial statements, company background, significant accounting policies, tax information, detailed notes on consolidated and parent company financial statement items, R&D expenditures, changes in consolidation scope, equity interests, government grants, financial instrument risks, fair value disclosures, related parties and transactions, commitments, and other important matters Audit Report This semi-annual report is unaudited - This semi-annual report is unaudited[2] Financial Statements This chapter presents the company's consolidated and parent company balance sheets, income statements, and cash flow statements for the first half of 2024, comprehensively illustrating its financial position, operating results, and cash flow Consolidated Balance Sheet As of June 30, 2024, the company's total assets were 4.430 billion Yuan, an increase of 3.55% from the end of the previous year. Total current assets were 1.862 billion Yuan, and total non-current assets were 2.568 billion Yuan. Total liabilities were 2.349 billion Yuan, and total owner's equity was 2.080 billion Yuan Consolidated Balance Sheet Key Data | Item | June 30, 2024 (Yuan) | December 31, 2023 (Yuan) | Change (%) | | :--- | :--- | :--- | :--- | | Total Assets | 4,430,049,980.31 | 4,278,152,789.83 | 3.55 | | Total Liabilities | 2,349,481,357.08 | 1,886,176,863.91 | 24.56 | | Total Equity Attributable to Parent Company Owners | 2,079,588,647.73 | 2,391,975,925.92 | -13.06 | Consolidated Income Statement From January to June 2024, the company's total operating revenue was 2.505 billion Yuan, a year-on-year increase of 74.69%. Net profit was -315.52 million Yuan, net profit attributable to parent company shareholders was -315.52 million Yuan, and basic earnings per share was -0.28 Yuan/share Consolidated Income Statement Key Data | Item | Jan-Jun 2024 (Yuan) | Semi-Annual 2023 (Yuan) | Change (%) | | :--- | :--- | :--- | :--- | | Total Operating Revenue | 2,505,111,987.80 | 1,434,006,472.87 | 74.69 | | Total Operating Costs | 2,896,018,179.16 | 1,742,819,805.18 | 66.17 | | Total Profit | -371,646,095.59 | -315,379,099.02 | -17.84 | | Net Profit | -315,518,683.25 | -266,195,925.70 | -18.53 | | Net Profit Attributable to Parent Company Shareholders | -315,518,658.75 | -266,195,925.70 | -18.53 | | Basic Earnings Per Share (Yuan/share) | -0.28 | -0.22 | -27.27 | Consolidated Cash Flow Statement From January to June 2024, net cash flow from operating activities was 118.28 million Yuan, a significant improvement from -448.21 million Yuan in the prior year period. Net cash flow from investing activities was -20.96 million Yuan, and net cash flow from financing activities was 330.73 million Yuan. The period-end cash and cash equivalents balance was 1.099 billion Yuan Consolidated Cash Flow Statement Key Data | Item | Jan-Jun 2024 (Yuan) | Semi-Annual 2023 (Yuan) | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 118,276,084.09 | -448,210,434.82 | | Net Cash Flow from Investing Activities | -20,955,749.91 | -6,134,168.93 | | Net Cash Flow from Financing Activities | 330,731,931.23 | -187,583,485.58 | | Net Increase in Cash and Cash Equivalents | 420,756,013.95 | -641,928,091.19 | | Period-End Cash and Cash Equivalents Balance | 1,099,121,759.87 | 750,248,506.16 | Company Basic Information Tianjin Bohai Chemical Co., Ltd. was established in 1993 and listed on the Shanghai Stock Exchange with stock code 600800. The company's registered capital is 1.110 billion Yuan, and its main businesses include the production and sale of propylene and by-products, card products, printing services, and manufacturing and sales of card-related equipment, operating in the manufacturing industry - Tianjin Bohai Chemical Co., Ltd. was established in 1993 and listed on the Shanghai Stock Exchange on December 6, 1993, with stock code: 600800[98] - As of December 31, 2023, the company's share capital was 1.110 billion shares, and its registered capital has been updated to 1.110 billion Yuan[98] - The company's industry is manufacturing, with main products including the production and sales of propylene and by-products, card products, printing services, and manufacturing and sales of card-related equipment[98] Significant Accounting Policies and Estimates This chapter elaborates on the company's significant accounting policies and estimates, including enterprise accounting standards, accounting period, operating cycle, functional currency, materiality, business combinations, consolidated financial statement preparation, joint arrangements, cash and cash equivalents, foreign currency transactions, financial instruments, inventories, contract assets, assets held for sale, long-term equity investments, fixed assets, construction in progress, borrowing costs, intangible assets, impairment of long-term assets, long-term deferred expenses, contract liabilities, employee compensation, revenue, contract costs, government grants, deferred income tax assets/liabilities, and leases - The company's financial statements are prepared on a going concern basis, with no events or circumstances that would cause significant doubt about its ability to continue as a going concern for the next 12 months from the end of the reporting period[99][100] - The company has formulated specific accounting policies and estimates for transactions or events such as bad debt provision for receivables, depreciation of fixed assets, amortization of intangible assets, capitalization of R&D expenses, and revenue recognition, based on its actual production and operating characteristics[101] - The company classifies financial assets into three categories: measured at amortized cost, measured at fair value through other comprehensive income, and measured at fair value through profit or loss, and classifies financial liabilities accordingly[114] - Revenue recognition principle is to recognize revenue when the customer obtains control of the related goods or services, at the transaction price allocated to that performance obligation, with main businesses including sales of propylene and by-products, chemical trading, technical services, printing sales, magnetic card sales, equipment sales, and consignment sales revenue[148][149][247] Taxes The company's main taxes include Value-Added Tax (rates of 13%, 9%, 6%), Urban Maintenance and Construction Tax (7%), and Corporate Income Tax (25%, 15%). Both the company and its subsidiary, Tianjin Bohai Petrochemical Co., Ltd., are recognized as high-tech enterprises, enjoying a preferential corporate income tax rate of 15% Major Tax Types and Rates | Tax Type | Tax Basis | Tax Rate | | :--- | :--- | :--- | | Value-Added Tax | Taxable income | 13%, 9%, 6% | | Urban Maintenance and Construction Tax | Actual turnover tax paid | 7% | | Corporate Income Tax | Taxable income | 25%, 15% | - Tianjin Bohai Chemical Co., Ltd. and its subsidiary Tianjin Bohai Petrochemical Co., Ltd. are both recognized as high-tech enterprises, enjoying a preferential corporate income tax rate of 15% for the period 2021-2024[159][160] Notes to Consolidated Financial Statements This chapter provides detailed notes on various asset, liability, owner's equity, and profit and loss items in the consolidated financial statements, including monetary funds, trading financial assets, notes receivable, accounts receivable, other receivables, inventories, long-term deferred expenses, deferred income tax assets/liabilities, short-term borrowings, notes payable, accounts payable, contract liabilities, employee compensation payable, taxes payable, other payables, long-term borrowings, lease liabilities, operating revenue and costs, taxes and surcharges, selling expenses, administrative expenses, research and development expenses, financial expenses, other income, investment income, fair value change gains, credit impairment losses, asset impairment losses, non-operating income/expenses, and income tax expenses 1. Monetary Funds At the end of the reporting period, the company's total monetary funds were 1.294 billion Yuan, a significant increase from 711.97 million Yuan at the beginning of the period. This included 1.093 billion Yuan in bank deposits, 192.73 million Yuan in other monetary funds, and a newly added 8 million Yuan in deposits with finance companies Monetary Funds Composition | Item | Period-End Balance (Yuan) | Period-Beginning Balance (Yuan) | | :--- | :--- | :--- | | Bank Deposits | 1,093,171,937.28 | 678,316,065.08 | | Other Monetary Funds | 192,733,480.31 | 33,652,795.26 | | Deposits with Finance Companies | 8,000,000.00 | 0 | | Total | 1,293,905,417.59 | 711,971,890.99 | 5. Accounts Receivable At the end of the reporting period, the company's accounts receivable book balance was 143.52 million Yuan, with a bad debt provision of 76.91 million Yuan, resulting in a book value of 66.61 million Yuan. Accounts receivable within 1 year amounted to 28.62 million Yuan, and those over 5 years amounted to 64.22 million Yuan. The top five accounts receivable by debtor totaled 58.84 million Yuan, accounting for 41.00% of the total Accounts Receivable Aging Disclosure | Aging | Period-End Book Balance (Yuan) | Period-Beginning Book Balance (Yuan) | | :--- | :--- | :--- | | Within 1 year | 28,620,495.47 | 55,795,257.26 | | 1 to 2 years | 30,464,224.45 | 14,063,529.51 | | 2 to 3 years | 13,577,559.80 | 4,635,470.43 | | Over 5 years | 64,217,366.43 | 61,273,569.43 | | Total | 143,518,429.01 | 144,171,549.43 | Accounts Receivable Bad Debt Provision Classification Disclosure | Category | Book Balance Amount (Yuan) | Percentage (%) | Bad Debt Provision Amount (Yuan) | Provision Rate (%) | Book Value (Yuan) | | :--- | :--- | :--- | :--- | :--- | :--- | | Bad debt provision calculated by portfolio | 143,518,429.01 | 100.00 | 76,907,792.05 | 53.59 | 66,610,636.96 | Top Five Accounts Receivable by Debtor at Period-End | Unit Name | Period-End Accounts Receivable Balance (Yuan) | Percentage of Total Period-End Accounts Receivable and Contract Assets (%) | Period-End Bad Debt Provision Balance (Yuan) | | :--- | :--- | :--- | :--- | | ① | 15,367,440.00 | 10.71 | 768,372.00 | | ② | 16,650,243.90 | 11.60 | 16,650,243.90 | | ③ | 9,708,338.70 | 6.76 | 1,204,670.18 | | ④ | 8,933,847.07 | 6.22 | 720,159.71 | | ⑤ | 8,182,000.00 | 5.70 | 2,454,600.00 | | Total | 58,841,869.67 | 41.00 | 21,798,045.78 | 10. Inventories At the end of the reporting period, the company's inventory book value was 427.52 million Yuan, a decrease of 38.08% from 690.41 million Yuan at the beginning of the period. This included 408.61 million Yuan in raw materials and 17.07 million Yuan in merchandise inventory. Total inventory impairment provision and contract performance cost impairment provision amounted to 27.36 million Yuan Inventory Classification | Item | Period-End Book Value (Yuan) | Period-Beginning Book Value (Yuan) | | :--- | :--- | :--- | | Raw Materials | 408,609,946.42 | 618,125,135.06 | | Work in Progress | 1,788,343.96 | 1,678,398.02 | | Merchandise Inventory | 17,074,268.63 | 70,541,061.73 | | Purchased Goods | 45,968.23 | 64,171.74 | | Total | 427,518,527.24 | 690,408,766.55 | Inventory Impairment Provision and Contract Performance Cost Impairment Provision | Item | Period-Beginning Balance (Yuan) | Amount Increased This Period (Yuan) | Period-End Balance (Yuan) | | :--- | :--- | :--- | | Raw Materials | 18,936,155.42 | 1,878,694.09 | 20,814,849.51 | | Work in Progress | 2,764,766.29 | 390,225.10 | 3,154,991.39 | | Merchandise Inventory | 1,767,512.96 | 711,114.59 | 2,478,627.55 | | Purchased Goods | 906,515.37 | 7,584.04 | 914,099.41 | | Total | 24,374,950.04 | 2,987,617.82 | 27,362,567.86 | 61. Operating Revenue and Operating Costs From January to June 2024, the company's operating revenue was 2.505 billion Yuan and operating costs were 2.711 billion Yuan, representing year-on-year increases of 74.69% and 78.16% respectively. Main business revenue primarily came from propylene and by-products (1.826 billion Yuan) and chemical trading (645.65 million Yuan) Operating Revenue and Operating Costs Status | Item | Current Period Revenue (Yuan) | Current Period Costs (Yuan) | Prior Period Revenue (Yuan) | Prior Period Costs (Yuan) | | :--- | :--- | :--- | :--- | :--- | | Main Business | 2,504,655,309.54 | 2,711,339,034.55 | 1,433,693,290.65 | 1,521,812,134.87 | | Other Business | 456,678.26 | 17,215.74 | 313,182.22 | 17,215.74 | | Total | 2,505,111,987.80 | 2,711,356,250.29 | 1,434,006,472.87 | 1,521,829,350.61 | Operating Revenue and Operating Costs by Product Type | Product Type | Operating Revenue (Yuan) | Operating Costs (Yuan) | | :--- | :--- | :--- | | Propylene and By-products | 1,826,171,210.48 | 2,050,288,760.01 | | Chemical Trading | 645,645,222.76 | 635,810,274.27 | | Technical Services | 9,666,167.03 | 1,723,932.67 | | Printing Sales | 5,038,381.92 | 6,501,810.24 | | Magnetic Card Sales | 15,582,913.65 | 14,805,367.27 | | Equipment Sales | 2,367,116.82 | 2,202,976.60 | Research and Development Expenses During the reporting period, the company's total R&D expenditure was 98.60 million Yuan, a 54.69% increase year-over-year, all of which was expensed. Major investments were in direct inputs, depreciation and amortization, and employee compensation R&D Expenditure Composition | Item | Current Period Amount (Yuan) | Prior Period Amount (Yuan) | | :--- | :--- | :--- | | Employee Compensation | 9,361,815.01 | 8,227,240.89 | | Depreciation and Amortization | 25,961,481.30 | 12,826,083.19 | | Direct Inputs | 62,685,831.13 | 39,374,757.27 | | Outsourced Technology Development Fees | 103,981.13 | 3,136,792.45 | | Other | 485,519.65 | 174,061.14 | | Total | 98,598,628.22 | 63,738,934.94 | | Of which: Expensed R&D Expenditure | 98,598,628.22 | 63,738,934.94 | Changes in Consolidation Scope During the reporting period, the company added one subsidiary to its consolidated scope, a newly established controlling subsidiary, Bohai Kexinrui (Tianjin) Technology Co., Ltd., with the company holding a 51% stake - This period saw the addition of one subsidiary to the consolidated scope, due to the company's new establishment of a controlling subsidiary, Bohai Kexinrui (Tianjin) Technology Co., Ltd.[275] - Bohai Kexinrui has a registered capital of 2 million Yuan, with the company contributing 1.02 million Yuan in cash, holding a 51% stake[275] Interests in Other Entities This chapter discloses the company's equity interests in subsidiaries, joint ventures, and associates. The company owns four subsidiaries, including Tianjin Bohai Petrochemical Co., Ltd., with Bohai Kexinrui (Tianjin) Technology Co., Ltd. being a significant non-wholly owned subsidiary. The company also holds a 40% equity stake in the associate Chongqing Global Paper Co., Ltd 1. Interests in Subsidiaries The company owns four subsidiaries: Tianjin Bohai Petrochemical Co., Ltd., Tianjin Global Chemical Technology Co., Ltd., Tianjin Global Magnetic Card Technology Co., Ltd., and Bohai Kexinrui (Tianjin) Technology Co., Ltd. Bohai Kexinrui (Tianjin) Technology Co., Ltd. is a significant non-wholly owned subsidiary, with minority shareholders holding 49% and a loss attributable to minority shareholders of -24.50 Yuan this period Enterprise Group Composition | Subsidiary Name | Direct Shareholding Percentage (%) | Acquisition Method | | :--- | :--- | :--- | | Tianjin Bohai Petrochemical Co., Ltd. | 100.00 | Acquisition of assets by issuing shares | | Tianjin Global Chemical Technology Co., Ltd. | 100.00 | Acquired through non-common control business combination | | Tianjin Global Magnetic Card Technology Co., Ltd. | 100.00 | Acquired company equity for asset acquisition | | Bohai Kexinrui (Tianjin) Technology Co., Ltd. | 51.00 | Establishment | Financial Information of Significant Non-Wholly Owned Subsidiary | Subsidiary Name | Minority Shareholding Percentage (%) | Net Profit Attributable to Minority Shareholders This Period (Yuan) | Minority Shareholder Equity Balance at Period-End (Yuan) | | :--- | :--- | :--- | :--- | | Bohai Kexinrui (Tianjin) Technology Co., Ltd. | 49.00 | -24.50 | 979,975.50 | 3. Interests in Joint Ventures or Associates The company holds a 40% equity stake in the associate Chongqing Global Paper Co., Ltd., accounted for using the equity method. At the end of the reporting period, Chongqing Global Paper Co., Ltd. had total assets of 210 million Yuan, owner's equity attributable to the parent company of 208 million Yuan, and a net loss of -4.73 million Yuan Significant Associate Company Information | Associate Company Name | Direct Shareholding Percentage (%) | Accounting Method | | :--- | :--- | :--- | | Chongqing Global Paper Co., Ltd. | 40.00 | Equity method | Key Financial Information of Significant Associate Company Chongqing Global Paper Co., Ltd. | Item | Period-End Balance / Current Period Amount (Yuan) | Period-Beginning Balance / Prior Period Amount (Yuan) | | :--- | :--- | :--- | | Total Assets | 209,955,560.49 | 216,491,445.22 | | Owner's Equity Attributable to Parent Company | 207,932,085.69 | 214,927,623.42 | | Net Profit | -4,725,006.90 | -5,064,090.76 | | Total Comprehensive Income | -4,725,006.90 | -4,895,127.66 | Government Grants During the reporting period, the company's deferred income from government grants had an opening balance of 40,000 Yuan, all of which was transferred to other income in the current period, resulting in a closing balance of 0. The total income-related government grants recognized in current profit or loss amounted to 26.49 million Yuan Liability Items Involving Government Grants | Financial Statement Item | Period-Beginning Balance (Yuan) | New Grants This Period (Yuan) | Amount Included in Non-Operating Income This Period (Yuan) | Transferred to Other Income This Period (Yuan) | Period-End Balance (Yuan) | Related to Assets/Income | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Deferred Income | 40,000.00 | 0 | 0 | 40,000.00 | 0 | Related to assets | Government Grants Included in Current Profit or Loss | Type | Current Period Amount (Yuan) | Prior Period Amount (Yuan) | | :--- | :--- | :--- | | Income-related | 26,489,499.71 | 492,721.14 | Risks Related to Financial Instruments The company faces credit risk, market risk (foreign exchange risk, interest rate risk), and liquidity risk. The company manages and mitigates these risks through internal control policies, monitoring credit limits, buying and selling foreign currencies, monitoring interest rate levels, and ensuring sufficient cash - The company faces credit risk, primarily arising from bank deposits, accounts receivable, notes receivable, and other receivables, which is mitigated by establishing internal control policies, credit approval, and monitoring procedures[282] - The company faces market risk, including foreign exchange risk (managed by buying and selling foreign currencies to maintain net exposure) and interest rate risk (mitigated by monitoring interest rate levels, early loan repayment, and expanding financing channels)[282] - The company manages liquidity risk through centralized control by the finance department, monitoring cash balances and marketable securities, and ensuring sufficient cash to repay maturing debts[284](index=284&type