呈和科技(688625) - 2025 Q2 - 季度财报

Definitions This section provides definitions for key terms used throughout the report, covering company entities, materials, additives, and certifications Definitions of Common Terms This chapter lists key terms and their definitions, including company entities, materials, additives, and relevant certifications and technical standards - Company, the Company, Chenghe Technology: Refers to Chenghe Technology Co., Ltd[13] - Polymer Material Additives: Various auxiliary substances added to polymer material systems like plastics and rubber to improve processing performance, physical and mechanical properties, enhance functionality, or impart specific application properties, often called chemical additives[13] - Nucleating Agent: A polymer material additive used to increase the crystallinity and accelerate the crystallization rate of incompletely crystalline resin materials such as polyethylene and polypropylene; it can improve the optical and mechanical properties of resin products[13] - Synthetic Hydrotalcite: A lead-free compound with a layered structure, primarily used as a heat stabilizer for PVC production and a halogen scavenger for polyolefin resin production[13] - Compound Additives: Pre-mixed polymer material additives produced by blending multiple additives (such as nucleating agents, synthetic hydrotalcite, antioxidants, dispersants, etc.) according to a specific formula, using special production processes, to simultaneously meet various performance requirements of modified resins[13] Company Profile and Key Financial Indicators This section provides an overview of the company's basic information, contact details, information disclosure, stock summary, and key financial performance Company Basic Information This section introduces the basic information of Chenghe Technology Co., Ltd., including its Chinese name, abbreviation, legal representative, registered and office address, website, and email - Company Chinese Name: Chenghe Technology Co., Ltd[17] - Legal Representative: Zhao Wenlin[17] - Company Registered and Office Address: No. 2, Keqiang Road, Guangzhou Private Science and Technology Park, No. 1633, Beitai Road, Baiyun District, Guangzhou City[17] Contact Persons and Information This section provides contact information for the company's Board Secretary Hu Zhiyi and Securities Affairs Representative Chen Shuxian, including address, phone, fax, and email - Board Secretary: Hu Zhiyi, contact address is Room 6501, Guangzhou Chow Tai Fook Financial Centre, No. 6 Zhujiang East Road, Tianhe District, Guangzhou City[18] - Securities Affairs Representative: Chen Shuxian, contact address is Room 6501, Guangzhou Chow Tai Fook Financial Centre, No. 6 Zhujiang East Road, Tianhe District, Guangzhou City[18] Brief Introduction to Information Disclosure and Document Storage Location Changes This section lists the company's selected information disclosure newspapers, website address for semi-annual reports, and the location for document storage - Company's selected information disclosure newspapers: "China Securities Journal", "Shanghai Securities News", "Securities Times", "Securities Daily"[19] - Website address for semi-annual reports: http://www.sse.com.cn/[19](index=19&type=chunk) - Company's semi-annual report storage location: Company Securities Department[19] Overview of Company Shares/Depositary Receipts This section outlines the listing status of the company's A-shares on the STAR Market of the Shanghai Stock Exchange, including stock abbreviation and code - Company stock type: A-shares, listed on: STAR Market of Shanghai Stock Exchange[20] - Stock Abbreviation: Chenghe Technology, Stock Code: 688625[20] Other Relevant Information This section discloses information about the accounting firm (Lixin Certified Public Accountants) and the sponsor institution (CITIC Securities Co., Ltd.) appointed by the company for continuous supervision - Accounting firm (domestic) appointed by the company: Lixin Certified Public Accountants (Special General Partnership), signing accountants are Huang Chunyan and Xiong Rong[21] - Sponsor institution performing continuous supervision duties: CITIC Securities Co., Ltd., signing sponsor representatives are Hong Shuqin and Yang Xian, with the continuous supervision period from March 2, 2023, to December 31, 2025[21] Company's Key Accounting Data and Financial Indicators This section presents the company's key accounting data and financial indicators for the first half of 2025, explaining changes in certain indicators and highlighting steady growth and market share improvement Key Accounting Data (January-June 2025) | Indicator | Current Period (Jan-Jun) (Yuan) | Prior Year Period (Yuan) | Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 471,085,646.12 | 414,059,355.83 | 13.77 | | Total Profit | 170,429,361.78 | 149,273,148.41 | 14.17 | | Net Profit Attributable to Shareholders of Listed Company | 147,245,579.80 | 127,677,290.91 | 15.33 | | Net Profit Attributable to Shareholders of Listed Company After Deducting Non-Recurring Gains and Losses | 139,654,216.45 | 126,707,837.57 | 10.22 | | Net Cash Flow from Operating Activities | 106,856,196.82 | 102,620,664.68 | 4.13 | | Period-End Indicators | Current Period-End (Yuan) | Prior Year-End (Yuan) | Change (%) | | Net Assets Attributable to Shareholders of Listed Company | 1,427,086,036.84 | 1,360,734,757.27 | 4.88 | | Total Assets | 2,831,074,905.52 | 3,288,312,349.55 | -13.90 | Key Financial Indicators (January-June 2025) | Indicator | Current Period (Jan-Jun) | Prior Year Period | Change (%) | | :--- | :--- | :--- | :--- | | Basic Earnings Per Share (Yuan/share) | 0.78 | 0.94 | -17.02 | | Diluted Earnings Per Share (Yuan/share) | 0.78 | 0.94 | -17.02 | | Basic Earnings Per Share After Deducting Non-Recurring Gains and Losses (Yuan/share) | 0.74 | 0.94 | -21.28 | | Weighted Average Return on Net Assets (%) | 10.56 | 9.79 | Increased by 0.77 percentage points | | Weighted Average Return on Net Assets After Deducting Non-Recurring Gains and Losses (%) | 10.01 | 9.71 | Increased by 0.3 percentage points | | R&D Investment as Percentage of Operating Revenue (%) | 4.55 | 4.02 | Increased by 0.53 percentage points | - Net profit attributable to shareholders of the listed company and net profit after deducting non-recurring gains and losses increased by 15.33% and 10.22% respectively compared to the same period last year, primarily due to the continuous increase in domestic and international market share of polymer material additive products[25] - Basic earnings per share, diluted earnings per share, and basic earnings per share after deducting non-recurring gains and losses decreased, mainly due to the increase in total share capital from capital reserve capitalization during the reporting period[25] Differences in Accounting Data Under Domestic and Overseas Accounting Standards This section states that the company has no differences in accounting data under domestic and overseas accounting standards - The company has no differences in accounting data under domestic and overseas accounting standards[26] Non-Recurring Gains and Losses Items and Amounts This section details the non-recurring gains and losses items and their amounts for the first half of 2025, primarily including government grants recognized in current profit or loss and fair value changes of financial assets Non-Recurring Gains and Losses Items and Amounts (First Half of 2025) | Non-Recurring Gains and Losses Item | Amount (Yuan) | | :--- | :--- | | Government grants recognized in current profit or loss | 1,720,339.95 | | 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 | 7,609,072.34 | | Other non-operating income and expenses apart from the above | -123,666.46 | | Less: Income tax impact | 1,614,382.48 | | Total | 7,591,363.35 | Companies with Equity Incentive or Employee Stock Ownership Plans May Choose to Disclose Net Profit After Deducting Share-Based Payment Impact This section states that the company has no equity incentive or employee stock ownership plans - The company has no equity incentive plans or employee stock ownership plans[29] Explanation of Non-GAAP Performance Indicators This section states that the company has no non-GAAP performance indicators - The company has no non-GAAP performance indicators[29] Management Discussion and Analysis This section provides a comprehensive discussion and analysis of the company's operational performance, industry trends, core competencies, and risk factors Explanation of the Company's Industry and Main Business During the Reporting Period This chapter details the development of the company's industries, including high-performance resins, modified plastics, nucleating agents, synthetic hydrotalcite, and antioxidants, along with its main business, products, operating model, and market position (I) Industry Development During the Reporting Period This section outlines the development trends, market demand, capacity changes, and domestic substitution opportunities in the high-performance resin, modified plastics, nucleating agent, synthetic hydrotalcite, and antioxidant industries, indicating a shift towards high-end, green, and differentiated development - The high-performance resin industry shows positive development, with steady market expansion and increasing diversification in sub-markets, facing opportunities such as domestic substitution, technological iteration, green low-carbon materials, and industrialization of cutting-edge materials[37] - China's modified plastics output continues to grow, reaching 33.2 million tons in 2024, with an average annual compound growth rate of 11.07%, but the mid-to-high-end market still relies on imports, indicating a clear trend of domestic substitution[38] - Demand for nucleating agents is continuously increasing, with national polypropylene output expected to reach 19.2 million tons in the first half of 2025, a year-on-year increase of 13.68%, as the industry is in a critical stage of domestic substitution and will focus on environmental protection, high efficiency, and multi-functionality in the future[39] - Synthetic hydrotalcite, used as a PVC heat stabilizer and polyolefin halogen scavenger, is expected to see expanded application with environmental demands and national standard implementation; the global industrial-grade hydrotalcite market size was approximately $236 million in 2024, projected to reach $314 million by 2031[41][43] - The global plastic antioxidant market reached $1.62 billion in 2024 and is expected to expand to $1.934 billion by 2030, with China as the largest producer and consumer, accelerating import substitution and increasing demand for environmentally friendly antioxidants[45] (II) Company's Main Business and Products During the Reporting Period This section details the company's main business as a national "specialized, refined, unique, and new" "little giant" enterprise, focusing on producing environmentally friendly, safe, and high-performance special polymer material additives, including the specific functions, application areas, and technical advantages of its four major product categories: nucleating agents, synthetic hydrotalcite, antioxidants, and compound additives - The company's main products, polymer material additives, are at the upstream core of the high-performance resin and modified plastics manufacturing industry, significantly improving the optical and mechanical properties and enhancing the stability of general resin products[45] - The company's nucleating agent products include transparent nucleating agents, rigidity-enhancing nucleating agents, and β-crystal toughening nucleating agents, which can improve resin transparency, rigidity, heat distortion temperature, and impact strength[46][47] - Synthetic hydrotalcite products are categorized into general, high-transparency, and flame-retardant types, serving as PVC heat stabilizers and polyolefin halogen scavengers, offering safety, environmental friendliness, improved stability, and elimination of halogen residues[47][48] - The company's antioxidant products are special antioxidant series, mainly hindered phenol antioxidants, possessing antioxidant and metal deactivation functions, widely used in plastics, rubber, chemical fibers, and other fields[49] - Compound additives, physically mixed from various single additives according to formula ratios, simplify customer production processes, improve efficiency, ensure stable product performance, and reduce dust pollution[49][50] (III) Company's Business Model During the Reporting Period This section describes the company's independent business model (R&D, sales, procurement, production) and trade business model (independent trade, agency trade), emphasizing its core technical advantages, customized R&D, direct sales, strict supplier management, and "production-to-order" approach to meet customer needs and enhance market competitiveness - The company's independent business model covers R&D, procurement, production, and sales, possessing a complete system[52] - R&D model is divided into forward-looking R&D (anticipating industry development directions) and demand-responsive R&D (providing customized solutions for large clients)[52][53] - Sales model adopts direct sales, targeting end-users and traders, enhancing customer loyalty through technical exchanges and cooperation, and using a consignment model for some large petrochemical enterprise clients[53][54] - Procurement model follows "production-to-order, procurement-to-production," with strict supplier selection and management to ensure raw material quality and timely supply[54] - Production model is "production-to-order, order-driven, reasonable inventory," mastering core production equipment design, product formula design, and production process control technologies to achieve green and environmentally friendly production[55][56] - Trade business is divided into independent trade (assuming inventory and credit risks) and agency trade (earning commissions without assuming transaction risks)[56] (IV) Analysis of the Company's Market Position During the Reporting Period This section analyzes the company's leading market position in nucleating agents, synthetic hydrotalcite, antioxidants, and compound additives, highlighting achievements in domestic substitution and stable cooperation with major domestic and international energy and chemical enterprises, solidifying its industry leadership - The company, through independent R&D and mass production of nucleating agents and synthetic hydrotalcite, achieved breakthroughs for domestic similar products, becoming a leading domestic brand in these fields[56] - In the nucleating agent sector, the company's product quality has reached international advanced levels, earning national and provincial manufacturing single champion enterprise titles, continuously increasing market share, and promoting the domestic substitution process[57] - In the synthetic hydrotalcite sector, the company's general synthetic hydrotalcite is supplied on a large scale to world-renowned enterprises, while ternary high-transparency synthetic hydrotalcite is gradually achieving import substitution in high-end markets and has become a designated domestic product for energy and chemical enterprises like Sinopec and PetroChina[57] - In the antioxidant sector, the company primarily produces special antioxidants, establishing stable cooperative relationships with chemical giants such as Sinopec and CNOOC Shell, focusing on R&D of dust-free, specialized, and environmentally friendly products[58] - In the compound additive sector, the company provides technologically advanced special polymer material additive products and customized solutions to important domestic and international energy and chemical enterprises[58][59] New Important Non-Core Business Activities This section states that the company had no new important non-core business activities during the reporting period - The company had no new important non-core business activities during the reporting period[60] Discussion and Analysis of Operations This chapter discusses the company's operating performance against the backdrop of the new chemical materials industry, including market share growth, revenue increase, capacity enhancement from the fully operational Nansha plant, continued interim dividend policy, and termination of a major asset restructuring - In the first half of 2025, the company achieved operating revenue of RMB 471.0856 million, a year-on-year increase of 13.77%; net profit attributable to shareholders of the listed company was RMB 147.2456 million, a year-on-year increase of 15.33%[62] - The company's Nansha plant became fully operational in June 2025, marking a leap forward in production capacity, technological R&D, and strategic layout, and obtained ISO9001:2015 and ISO14001:2015 certifications[63] - The company plans to continue its 2025 interim dividend distribution, proposing a cash dividend of RMB 2.30 (tax inclusive) per 10 shares to all shareholders, totaling RMB 42.6596 million (tax inclusive)[64] - The company terminated the major asset restructuring to acquire no less than 51% equity of ITO target leader Wuhu Yingri Technology Co., Ltd., as core terms could not be agreed upon[64] Analysis of Core Competitiveness During the Reporting Period This chapter deeply analyzes the company's core competitiveness, including its complete product system, excellent R&D capabilities, advanced patented technology and formula advantages, green manufacturing system, high-quality customer resources, and comprehensive high-standard qualifications and certifications (I) Core Competitiveness Analysis This section elaborates on the company's competitive advantages in products, R&D, technology, green manufacturing, customers, and qualifications, emphasizing its role in domestic substitution and its numerous national honors and international certifications - The company possesses the capability for large-scale production of over 300 different types of nucleating agents, synthetic hydrotalcite, antioxidants, and compound additives, with product performance reaching international advanced levels and the ability to substitute imports[66] - The company has excellent R&D capabilities; its founder, Zhao Wenlin, is a senior chemical process engineer, and the company's R&D center is recognized as "Guangdong Provincial Engineering Technology Research Center for Plastic Additives" and "Guangzhou Engineering Technology Research and Development Center," and approved as a national postdoctoral research workstation[67][68] - The company has a global intellectual property layout, with 76 valid domestic and international patents (59 invention patents) as of June 30, 2025, and its compound additive formulas are a core competitive advantage[68][69] - Adhering to low-carbon, environmental protection, and energy-saving principles, the company has been awarded national and municipal "Green Factory" and "Waste-Free Factory" titles, and rated as an "Environmental Integrity Enterprise (Green Card Enterprise)" for 2024[69] - The company has earned the trust of numerous large energy and chemical enterprises and resin material product manufacturers with its advanced products and high-quality services, accumulating high-quality and reliable customer resources[70] - The company's core products comply with food contact material standards and regulations in major global countries and regions, being the first domestic enterprise to pass US FDA food contact substance approval, and qualified as a designated additive for mainstream polypropylene process technologies globally, including Novolen, Unipol, and LyondellBasell[70][71] - The company has obtained ISO9001, ISO14001, ISO45001, ISO50001 management system certifications and CNAS laboratory accreditation, passed TFS assessment, received ECOVADIS corporate social responsibility "Silver" rating, and possesses overseas access certifications such as EU REACH and Korea K-REACH[71][72] (II) Events Seriously Affecting the Company's Core Competitiveness During the Reporting Period, Impact Analysis, and Countermeasures This section states that no events seriously affecting the company's core competitiveness occurred during the reporting period - No events seriously affecting the company's core competitiveness occurred during the reporting period[73] (III) Core Technologies and R&D Progress This section introduces the company's core technologies and their advanced nature, R&D achievements during the reporting period (2 new Chinese invention patent applications and 4 utility model patents, 6 completed R&D projects), R&D investment, and progress of ongoing projects Core Technologies and Their Advanced Nature | No. | Technology Name | Technical Advanced Nature | Product Category | | :--- | :--- | :--- | :--- | | 1 | β-Crystal Toughening Nucleating Agent Production Technology | Uses tetrahydrophthalic anhydride metal salt as a polypropylene toughening nucleating agent, an industry first, with high β-crystal nucleating efficiency | Nucleating Agent | | 2 | Rigidity-Enhancing and Toughening Nucleating Agent Production Technology | Utilizes synergistic effects of different nucleating agent components to solve the difficulty of balancing rigidity and toughness in polypropylene nucleating modification | Nucleating Agent | | 3 | High-Purity Granular Nucleating Agent Production Technology | Achieves granular conversion using trace binders, maintaining high purity, eliminating static electricity and dust issues, and improving production safety and environmental friendliness | Nucleating Agent | | 4 | Transparent Nucleating Agent Production Technology | Employs an original water-emulsion purification process instead of traditional solvent washing, which is safe and environmentally friendly, producing transparent nucleating agents with high whiteness and no irritating odor | Nucleating Agent | | 5 | Rigidity-Enhancing Nucleating Agent Production Technology | Adopts a one-step synthesis process for efficient heterogeneous carboxylate nucleating agents, eliminating agglomeration or core-shell phenomena, and ensuring good compatibility with polypropylene resin | Nucleating Agent | | 6 | High-Transparency Synthetic Hydrotalcite Production Technology | Synthesizes high-transparency hydrotalcite using three or more metal elements, controlling crystal size and reducing agglomeration through segmented pH adjustment and precursor crystallization technology | Synthetic Hydrotalcite | | 7 | General Synthetic Hydrotalcite Production Technology | Employs a unique surface treatment process, with acid absorption performance comparable to international advanced levels, smaller particle size, and specific surface area more than twice the international advanced level, resulting in better dispersibility | Synthetic Hydrotalcite | | 8 | Compound Additive Production Technology | Uses cold extrusion granulation and dead-angle-free mixing technology to ensure uniform particle composition and dispersibility, meeting various user requirements | Compound Additive | | 9 | Antioxidant Production Technology | Adopts a catalyst method instead of traditional solvent method for synthesis, saving reaction time, reducing solvent loss, and improving production efficiency | Antioxidant | | 10 | Liquid Blended Antioxidant Production Technology | Blends two or more liquid antioxidants to achieve synergistic effects, solving the yellowing problem in the synthesis process of rubber and plastic products | Antioxidant | - The company was recognized as a National "Specialized, Refined, Unique, and New" "Little Giant" Enterprise (2021, 2024) and a Manufacturing "Single Champion Product" (Nucleating Agent, 2023)[74] - As of June 30, 2025, the company had obtained 76 valid domestic and international patents (59 invention patents, 17 utility model patents); during the reporting period, 2 new Chinese invention patent applications and 4 utility model patents were added, and 6 R&D projects completed acceptance and conclusion[75][76] R&D Investment (January-June 2025) | Indicator | Current Period (Yuan) | Prior Year Period (Yuan) | Change (%) | | :--- | :--- | :--- | :--- | | Expensed R&D Investment | 21,454,927.47 | 16,642,057.75 | 28.92 | | Total R&D Investment | 21,454,927.47 | 16,642,057.75 | 28.92 | | Total R&D Investment as Percentage of Operating Revenue (%) | 4.55 | 4.02 | Increased by 0.53 percentage points | Ongoing Projects (Partial) | No. | Project Name | Estimated Total Investment (10,000 Yuan) | Amount Invested in Current Period (10,000 Yuan) | Progress or Stage | Intended Technical Level | | :--- | :--- | :--- | :--- | :--- | :--- | | 1 | Research on Anti-Yellowing Additives | 150.00 | 23.35 | Project completed | Domestic leading | | 2 | Development of Low-Ash Electrical Film Compound Additives | 200.00 | 90.91 | Project completed | Domestic leading | | 3 | Development of Polypropylene Rigidity-Enhancing and Transparency-Improving Nucleating Agents | 400.00 | 94.80 | Project completed | Domestic leading | | 4 | Development of Impact Copolymer Polypropylene Compound Additive WH-306J | 400.00 | 113.63 | Project completed | Domestic leading | | 5 | Development of Low-Ash Capacitor Film Compound Additives | 220.00 | 155.88 | Project completed | Domestic leading | | 6 | Development of High Heat Stable Polypropylene Acid Scavenger | 400.00 | 293.36 | Project completed | Domestic leading | | 7 | Development of Transparent Polypropylene Compound Additive Model X | 240.00 | 216.01 | Pilot production stage | Domestic leading | | 8 | Development of Low Melting Point Transparent Nucleating Agents | 370.00 | 219.72 | Pilot production stage | Domestic leading | | 9 | Development of Dispersibility for High Transparency Agent Compound Additives | 250.00 | 214.05 | Pilot production stage | Domestic leading | | 10 | Research on Dispersibility of Sodium Benzoate Compound Additives | 300.00 | 126.51 | Pilot production stage | Domestic leading | | 11 | Development of Hydrotalcite Synthesis Using CO2 as Carbon Source | 250.00 | 149.46 | Pilot production completed | Domestic leading | | 12 | Research on Hydrotalcite Dispersibility | 380.00 | 109.05 | Lab-scale test completed | Domestic leading | | 13 | Research on Granulation and Forming Process of Hindered Phenol Antioxidants | 86.00 | 85.45 | Project completed | Domestic leading | | 14 | Research on Environmentally Friendly Non-Toxic Antioxidants | 90.00 | 88.72 | Large-scale production trial | Domestic leading | | 15 | Research on One-Pot Two-Step Synthesis Method for Antioxidant 1010 | 125.00 | 92.36 | Large-scale production trial | Domestic leading | | 16 | Research on Low-Energy Consumption and Environmentally Friendly Dryer for Antioxidant Preparation | 123.00 | 49.49 | Pilot production completed | Domestic leading | | 17 | Research on High Compatibility Antioxidants | 130.00 | 22.74 | Lab-scale test completed | Domestic leading | R&D Personnel Information | Indicator | Current Period | Prior Year Period | | :--- | :--- | :--- | | Number of Company R&D Personnel (persons) | 33 | 27 | | R&D Personnel as Percentage of Total Company Staff (%) | 11.26 | 10.71 | | Total R&D Personnel Compensation (10,000 Yuan) | 510.44 | 562.04 | | Average R&D Personnel Compensation (10,000 Yuan) | 15.47 | 20.82 | | Education Level | | | | Doctoral Candidates | 1 | | | Master's Candidates | 3 | | | Bachelor's Degree | 15 | | | Associate Degree | 9 | | | High School and Below | 5 | | | Age Structure | | | | Under 30 years old | 6 | | | 30-40 years old | 15 | | | 40-50 years old | 7 | | | 50-60 years old | 2 | | | 60 years old and above | 3 | | Risk Factors This chapter identifies and explains potential risks the company faces in its operations, including intellectual property disputes, core technology leakage, product quality control, environmental protection and safety production, gross margin decline, accounts receivable bad debts, exchange rate fluctuations, bank acceptance bill payment, intensified market competition, raw material price increases, and macroeconomic environment - The company faces intellectual property dispute risks, potentially leading to litigation due to patent infringement or infringement of competitors' intellectual property, or technology imitation risks if patents are invalidated[85] - The company faces core technology leakage risks; improper safeguarding of core technical information or insufficient patent protection could harm its competitive advantage[85][86] - Product quality control risks: product quality issues could damage market reputation and customer trust[86] - Environmental protection and safety production risks: the company's production involves chemical synthesis and hazardous chemicals, posing risks of environmental pollution, violations of environmental regulations, and safety accidents, leading to increased compliance costs[86] - Gross margin decline risk, influenced by customer structure, product mix, raw material prices, employee compensation, product yield, capacity utilization, and other factors[87] - Risk of accounts receivable bad debts: the book balance of accounts receivable at period-end is a high proportion of operating revenue; if customer operating conditions deteriorate, the likelihood of bad debts increases[87] - Exchange rate fluctuation risk: overseas sales are settled in foreign currencies, and exchange rate fluctuations may lead to decreased gross margin and increased exchange losses[87] - Bank acceptance bill payment risk: the amount of bank acceptance bills held at period-end is significant; if the creditworthiness of the drawer or accepting bank deteriorates, payments may not be recovered in time[88] - Intensified market competition risk: with expanding market demand and technological progress, existing players' capacity expansion and new entrants may intensify competition, especially in the compound additive sector where technical barriers are relatively lower[88][89] - Risk of raw material price increases or untimely supply: major raw materials rely on external procurement, and significant price increases or supply disruptions could impact operating performance[89] - Macroeconomic environment risk: severe global economic conditions, international trade frictions, geopolitical conflicts, and other uncertainties may adversely affect the company's operating performance[90] Key Operating Performance During the Reporting Period This chapter summarizes the company's key operating performance during the reporting period, including analysis of financial statement item changes, asset and liability status, and investment status (I) Main Business Analysis This section analyzes the changes in the company's main financial statement items, including operating revenue, operating costs, selling expenses, administrative expenses, financial expenses, R&D expenses, and net cash flows from operating, investing, and financing activities Financial Statement Item Change Analysis (January-June 2025) | Item | Current Period (Yuan) | Prior Year Period (Yuan) | Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 471,085,646.12 | 414,059,355.83 | 13.77 | | Operating Costs | 255,386,208.41 | 227,350,666.96 | 12.33 | | Selling Expenses | 16,576,045.81 | 13,920,951.07 | 19.07 | | Administrative Expenses | 25,372,543.64 | 22,449,226.94 | 13.02 | | Financial Expenses | -14,119,384.33 | -16,452,000.80 | 14.18 | | R&D Expenses | 21,454,927.47 | 16,642,057.75 | 28.92 | | Net Cash Flow from Operating Activities | 106,856,196.82 | 102,620,664.68 | 4.13 | | Net Cash Flow from Investing Activities | 401,086,909.06 | -4,104,512.82 | 9,871.85 | | Net Cash Flow from Financing Activities | -565,121,528.65 | -474,678,123.02 | -19.05 | - The change in net cash flow from investing activities was mainly due to an increase in the amount of investment recovered during the reporting period[92] (II) Explanation of Significant Profit Changes Caused by Non-Core Business This section states that no significant profit changes were caused by non-core business during the reporting period - No significant profit changes were caused by non-core business during the reporting period[93] (III) Analysis of Assets and Liabilities This section provides a detailed analysis of changes in period-end assets and liabilities, including notes receivable, accounts receivable, prepayments, non-current assets due within one year, long-term deferred expenses, deferred income tax assets, short-term borrowings, accounts payable, employee compensation payable, other payables, lease liabilities, paid-in capital, and other comprehensive income Asset and Liability Status Change Analysis (June 30, 2025) | Item Name | Current Period-End (Yuan) | Current Period-End as % of Total Assets | Prior Year-End (Yuan) | Prior Year-End as % of Total Assets | Change from Prior Year-End (%) | Explanation | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Notes Receivable | 6,897,000.00 | 0.24 | 38,142,554.74 | 1.16 | -81.92 | Decrease in commercial bills held | | Accounts Receivable | 302,349,317.09 | 10.68 | 213,173,663.32 | 6.48 | 41.83 | Increase in company sales scale | | Prepayments | 32,155,044.09 | 1.14 | 6,542,626.35 | 0.20 | 391.47 | Increase in prepaid procurement | | Non-Current Assets Due Within One Year | 518,303,827.39 | 18.31 | 1,130,450,152.19 | 34.38 | -54.15 | Decrease in time deposits due within one year | | Long-Term Deferred Expenses | 7,678,110.76 | 0.27 | 357,945.17 | 0.01 | 2045.05 | Increase in deferred decoration expenses | | Deferred Income Tax Assets | 5,907,653.88 | 0.21 | 2,946,995.24 | 0.09 | 100.46 | Increase in deductible temporary differences | | Other Non-Current Assets | 1,768,486.79 | 0.06 | - | - | - | Prepaid long-term asset payments | | Short-Term Borrowings | 916,442,040.00 | 32.37 | 1,392,515,938.37 | 42.35 | -34.19 | Repayment of short-term borrowings | | Accounts Payable | 42,286,339.29 | 1.49 | 29,107,209.31 | 0.89 | 45.28 | Increase in raw material purchases due to increased production | | Employee Compensation Payable | 8,020,163.33 | 0.28 | 21,009,882.11 | 0.64 | -61.83 | Payment of year-end bonuses accrued last year | | Other Payables | 6,993,962.20 | 0.25 | 47,709,059.67 | 1.45 | -85.34 | Payment for acquisition of Keao Chemical and Xindafeng | | Lease Liabilities | 5,695,729.07 | 0.20 | 8,360,241.31 | 0.25 | -31.87 | Rent paid | | Paid-in Capital (or Share Capital) | 188,320,951.00 | 6.65 | 135,327,698.00 | 4.12 | 39.16 | Implementation of 2024 profit distribution plan, capitalizing capital reserves into share capital | | Other Comprehensive Income | 3,955,738.15 | 0.14 | 6,556,347.15 | 0.20 | -39.67 | Decrease in foreign currency financial statement translation differences | - Overseas assets amounted to RMB 550.977 million, accounting for 19.46% of total assets[95] Major Asset Restrictions (June 30, 2025) | Item | Period-End Book Value (Yuan) | Reason for Restriction | | :--- | :--- | :--- | | Monetary Funds | 1,024,391.00 | Margin deposit | | Debt Investments | 342,000,000.00 | Ownership pledge | | Non-Current Assets Due Within One Year | 477,000,000.00 | Ownership pledge | | Other Current Assets | 10,000,000.00 | Ownership pledge | | Total | 830,024,391.00 | / | (IV) Analysis of Investment Status This section analyzes the company's external equity investments and financial assets measured at fair value, including changes in trading financial assets, notes receivable financing, other equity instrument investments, and private equity funds Financial Assets Measured at Fair Value (June 30, 2025) | Asset Category | Beginning Balance (Yuan) | Fair Value Change Gains/Losses in Current Period (Yuan) | Amount Purchased in Current Period (Yuan) | Amount Sold/Redeemed in Current Period (Yuan) | Ending Balance (Yuan) | | :--- | :--- | :--- | :--- | :--- | :--- | | Other | 178,400,606.25 | -1,173,270.13 | 353,533,313.01 | 353,404,500.17 | 177,356,148.96 | | Of which: Trading Financial Assets/Measured at Fair Value | 92,520,384.41 | -1,173,270.13 | 152,022,172.69 | 171,860,412.07 | 71,508,874.90 | | Of which: Notes Receivable Financing | 76,160,996.73 | - | 201,511,140.32 | 181,544,088.10 | 96,128,048.95 | | Of which: Other Equity Instrument Investments | 9,719,225.11 | - | - | - | 9,719,225.11 | | Private Equity Funds | 102,730,000.00 | - | - | 13,164,229.37 | 89,565,770.63 | | Total | 281,130,606.25 | -1,173,270.13 | 353,533,313.01 | 366,568,729.54 | 266,921,919.59 | (V) Significant Asset and Equity Sales This section states that there were no significant asset and equity sales during the reporting period - No significant asset and equity sales during the reporting period[102] (VI) Analysis of Major Holding and Participating Companies This section states that there was no analysis of major holding and participating companies during the reporting period - No analysis of major holding and participating companies during the reporting period[102] (VII) Information on Structured Entities Controlled by the Company This section states that the company has no controlled structured entities - The company has no controlled structured entities[102] Other Disclosure Matters This section states that there are no other disclosure matters - No other disclosure matters[102] Corporate Governance, Environment, and Society This section covers changes in the company's governance structure, profit distribution plans, environmental information disclosure, and social responsibility efforts Changes in Directors, Supervisors, Senior Management, and Core Technical Personnel This section discloses changes in the company's senior management during the reporting period, with General Manager Tong Jiaqi resigning and Zhang Xu appointed as General Manager Changes in Company Directors, Supervisors, and Senior Management | Name | Position Held | Change | | :--- | :--- | :--- | | Tong Jiaqi | General Manager | Resigned | | Zhang Xu | General Manager | Appointed | - Tong Jiaqi resigned as General Manager but continues to serve as Chairman and member of the Remuneration and Assessment Committee[104] Profit Distribution or Capital Reserve Conversion Plan This section discloses the company's proposed 2025 semi-annual profit distribution plan, which involves a cash dividend of RMB 2.30 (tax inclusive) per 10 shares to all shareholders, representing 28.97% of the company's semi-annual consolidated net profit attributable to shareholders of the listed company Semi-Annual Profit Distribution Plan | Item | Value | | :--- | :--- | | Is distribution or capitalization proposed | Yes | | Dividend per 10 shares (Yuan) (tax inclusive) | 2.30 | | Proposed cash dividend (RMB) (tax inclusive) | 42,659,568.78 | | Percentage of semi-annual consolidated net profit attributable to shareholders of listed company | 28.97% | - This profit distribution plan does not involve bonus shares or capitalization of capital reserves into share capital[105] Status and Impact of Company's Equity Incentive Plans, Employee Stock Ownership Plans, or Other Employee Incentive Measures This section states that the company has no equity incentive plans, employee stock ownership plans, or other employee incentive measures - The company has no equity incentive plans, employee stock ownership plans, or other employee incentive measures[106] Environmental Information of Listed Companies and Their Major Subsidiaries Included in the List of Enterprises Required to Disclose Environmental Information by Law This section lists the company and its four subsidiaries included in the list of enterprises required to disclose environmental information by law, and provides an inquiry index Number of Enterprises Included in the List of Enterprises Required to Disclose Environmental Information by Law | Indicator | Quantity | | :--- | :--- | | Number of enterprises included in the list of enterprises required to disclose environmental information by law (units) | 4 | - Chenghe Technology Co., Ltd., Guangzhou Chenghe Plastic New Material Co., Ltd., Guangzhou Kecheng New Material Co., Ltd., and Tangshan Keao Chemical Additives Co., Ltd. are all included in the list of enterprises required to disclose environmental information by law[107] Specific Information on Consolidating and Expanding Poverty Alleviation Achievements, Rural Revitalization, etc. This section states that the company has no specific information on consolidating and expanding poverty alleviation achievements, rural revitalization, etc - The company has no specific information on consolidating and expanding poverty alleviation achievements, rural revitalization, etc[108] Significant Matters This section details the fulfillment of commitments, absence of fund occupation or illegal guarantees, audit status, and other significant events affecting the company Fulfillment of Commitments This section details the fulfillment of various commitments made by the company, its actual controllers, shareholders, related parties, and acquirers during or continuing into the reporting period, including those related to initial public offering, resolving horizontal competition, and related party transactions, all of which were timely and strictly fulfilled - All commitments made by the company, actual controllers, directors, senior management, controlling shareholders, and other related parties during or continuing into the reporting period have been timely and strictly fulfilled[110] - Commitment types include share repurchase, non-interference in company operations, restrictions on job-related consumption, linking remuneration systems to return-filling measures, linking equity incentive exercise conditions to return-filling measures, profit distribution policies, truthfulness of prospectus, resolving horizontal competition, and related party transactions[111][112][113][114][116][117][118][119][121][122][123][124][125][126][127][128] Non-Operating Fund Occupation by Controlling Shareholders and Other Related Parties During the Reporting Period This section states that there was no non-operating fund occupation by controlling shareholders and other related parties during the reporting period - No non-operating fund occupation by controlling shareholders and other related parties during the reporting period[129] Illegal Guarantees This section states that there were no illegal guarantees during the reporting period - No illegal guarantees during the reporting period[129] Half-Year Report Audit Status This section states that this semi-annual report has not been audited - This semi-annual report has not been audited[129] Changes and Handling of Matters Involving Non-Standard Audit Opinions in the Previous Annual Report This section states that the previous annual report had no matters involving non-standard audit opinions - The previous annual report had no matters involving non-standard audit opinions[129] Bankruptcy Reorganization Matters This section states that there were no bankruptcy reorganization matters during the reporting period - No bankruptcy reorganization matters during the reporting period[129] Significant Litigation and Arbitration Matters This section states that there were no significant litigation or arbitration matters during the reporting period - No significant litigation or arbitration matters during the reporting period[129] Listed Company and Its Directors, Supervisors, Senior Management, Controlling Shareholders, Actual Controllers Suspected of Violations, Penalties, and Rectification This section states that during the reporting period, the listed company and its directors, supervisors, senior management, controlling shareholders, and actual controllers were not suspected of violations, subject to penalties, or undergoing rectification - During the reporting period, the listed company and its directors, supervisors, senior management, controlling shareholders, and actual controllers were not suspected of violations, subject to penalties, or undergoing rectification[129] Explanation of the Integrity Status of the Company, Its Controlling Shareholders, and Actual Controllers During the Reporting Period This section states that the integrity status of the company, its controlling shareholders, and actual controllers was good during the reporting period - The integrity status of the company, its controlling shareholders, and actual controllers was good during the reporting period[129] Significant Related Party Transactions This section states that there were no significant related party transactions during the reporting period, including commodity purchases/sales, entrusted management/contracting, related leases, related guarantees, related party fund lending, related party asset transfers/debt restructuring, and other related party transactions - No related party transactions related to daily operations during the reporting period[130] - No related party transactions involving asset or equity acquisitions/disposals during the reporting period[130] - No significant related party transactions involving joint external investments during the reporting period[130] - No related party creditor-debtor relationships during the reporting period[130] - No financial business between the company and related financial companies, or between the company's controlling financial company and related parties during the reporting period[131] - No other significant related party transactions during the reporting period[131] Significant Contracts and Their Performance This section states that there were no entrusted management, contracting, or leasing matters, no significant guarantees, and no other significant contracts during the reporting period - No entrusted management, contracting, or leasing matters during the reporting period[131] - No significant guarantees during the reporting period[131] - No other significant contracts during the reporting period[131] Explanation of Progress in Use of Raised Funds This chapter details the overall use of the company's raised funds, specifics of the investment projects, and the use of over-raised funds, including the proposal to conclude an investment project and permanently replenish working capital with the remaining funds (I) Overall Use of Raised Funds This section outlines the arrival time, total amount, net amount, committed investment amount, total over-raised funds, cumulative investment as of the end of the reporting period, and investment progress of the company's initial public offering raised funds Overall Use of Raised Funds | Source of Raised Funds | Date Funds Received | Total Raised Funds (Yuan) | Net Raised Funds (1) (Yuan) | Committed Investment Amount in Prospectus (2) (Yuan) | Total Over-Raised Funds (3)=(1)-(2) (Yuan) | Cumulative Raised Funds Invested as of Period-End (4) (Yuan) | Cumulative Over-Raised Funds Invested as of Period-End (5) (Yuan) | Cumulative Investment Progress (%) (6)=(4)/(1) | Cumulative Over-Raised Funds Investment Progress (%) (7)=(5)/(3) | Amount Invested in Current Year (8) (Yuan) | Percentage of Current Year Investment (%) (9)=(8)/(1) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Initial Public Offering | June 2, 2021 | 549,334,432.00 | 483,295,862.66 | 450,000,000.00 | 33,295,862.66 | 499,382,584.44 | 33,766,130.75 | 103.33 | 101.41 | 117,990,286.48 | 24.41 | - The cumulative raised funds invested as of the end of the reporting period include net income from wealth management, bank deposit interest income minus bank handling fees[132] (II) Details of Raised Fund Investment Projects This section details the investment status of the "Guangzhou Kecheng New Polymer Material Additives Construction Project Phase I" and states that the project has been concluded, with the remaining raised funds permanently used to supplement working capital Details of Raised Fund Investment Projects | Project Name | Planned Total Investment of Raised Funds (1) (Yuan) | Cumulative Raised Funds Invested as of Period-End (2) (Yuan) | Cumulative Investment Progress (%) (3)=(2)/(1) | Amount Invested in Current Year (Yuan) | Has Project Feasibility Changed Significantly | Benefits or R&D Achievements Realized in Current Year, if any, please specify | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Guangzhou Kecheng New Polymer Material Additives Construction Project Phase I | 410,000,000.00 | 330,545,698.83 | 80.62 | 22,919,531.62 | No | Not applicable | | Replenishment of Working Capital | 40,000,000.00 | 40,000,000.00 | 100.00 | 0.00 | No | Not applicable | | Polymer Material Additives Production Technology Transformation Project | 33,295,862.66 | 33,766,130.75 | 101.41 | 0.00 | No | Not applicable | | Permanent Replenishment of Working Capital | Not applicable | 95,070,754.86 | - | 95,070,754.86 | No | Not applicable | - The company's raised fund investment project "Guangzhou Kecheng New Polymer Material Additives Construction Project Phase I" has been completed and put into use, and has been concluded; the remaining raised funds of RMB 95.0349 million (including cumulative wealth management income, bank deposit interest income minus bank handling fees, and after deducting subsequent pending payments) will be used to permanently replenish the company's working capital[134] Details of Over-Raised Funds Usage | Purpose | Nature | Planned Total Over-Raised Funds (1) (Yuan) | Cumulative Over-Raised Funds Invested as of Period-End (2) (Yuan) | Cumulative Investment Progress (%) (3)=(2)/(1) | | :--- | :--- | :--- | :--- | :--- | | Production Construction | New Project | 33,295,862.66 | 33,766,130.75 | 101.41 | (III) Changes or Termination of Raised Fund Investment Projects During the Reporting Period This section states that there were no changes or terminations of raised fund investment projects during the reporting period - No changes or terminations of raised fund investment projects during the reporting period[137] (IV) Other Information on the Use of Raised Funds During the Reporting Period This section discloses that the proposal to conclude the raised fund investment project and permanently replenish working capital with the remaining funds has been approved by the board of directors and supervisory board - On January 14, 2025, the company's ninth meeting of the third board of directors and seventeenth meeting of the third supervisory board reviewed and approved the "Proposal on Concluding the Company's Raised Fund Investment Project and Permanently Replenishing Working Capital with Remaining Raised Funds," agreeing to conclude the raised fund investment project "Guangzhou Kecheng New Polymer Material Additives Construction Project Phase I" and use the remaining raised funds of RMB 95.0349 million to permanently replenish the company's working capital[138] (V) Concluding Opinions of Intermediary Agencies on Special Verification and Attestation of Raised Fund Storage and Use This section states that there are no concluding opinions from intermediary agencies on special verification and attestation of raised fund storage and use - No concluding opinions from intermediary agencies on special verification and attestation of raised fund storage and use[139] (VI) Subsequent Rectification of Unauthorized Changes in Use of Raised Funds and Illegal Occupation of Raised Funds This section states that there are no subsequent rectification measures for unauthorized changes in the use of raised funds or illegal occupation of raised funds - No subseq