得润电子(002055) - 2025 Q2 - 季度财报

Section I Important Notice, Table of Contents, and Definitions This section provides crucial disclaimers, outlines the report's structure, and defines key terms for clarity Important Notice The Board, Supervisory Board, and management guarantee the report's integrity, while the company plans no cash dividends or bonus shares - The Board of Directors, Supervisory Board, and senior management guarantee the truthfulness, accuracy, and completeness of the semi-annual report, free from false records, misleading statements, or major omissions[4] - Company head Qiu Yang, chief accountant Liu Biao, and head of accounting department Lu Shuyin declare the truthfulness, accuracy, and completeness of the financial report within this semi-annual report[4] - The company plans not to distribute cash dividends, issue bonus shares, or convert capital reserves into share capital[5] Table of Contents This section lists the report's overall structure, covering operations, finance, governance, and significant matters - The report comprises eight main chapters, covering company operations, finance, governance, and significant matters[7] Definitions This section defines common terms used in the report, including company names, subsidiaries, and financial units, for clear understanding - "Company/This Company/Derun Electronics" is defined as Shenzhen Deren Electronic Co., Ltd[10] - Key subsidiaries include Qingdao Hairun, Qingdao Deren, Mianyang Hongrun, Hefei Deren, Wuhan Hanrun, Deren (Hong Kong), Shenzhen Barati, Heshan Deren, Meta, Yibin Mett, Chongqing Meda, Chongqing Ruirun[10] - Associate companies include Liuzhou Shuangfei, Hualin Circuit, Kostal Deren, Yibin Dekang[10] Section II Company Profile and Key Financial Indicators This section provides an overview of the company and its key financial performance metrics for the reporting period I. Company Profile Shenzhen Deren Electronic Co., Ltd. (stock code: 002055) is listed on the Shenzhen Stock Exchange, with Qiu Yang as its legal representative - Company stock abbreviation: Deren Electronics, stock code: 002055[12] - Company stock exchange: Shenzhen Stock Exchange[12] - Company legal representative: Qiu Yang[12] II. Contact Person and Information The company's Board Secretary is He Lianhua, contact number 0755-89492166, and email 002055@deren.com - Board Secretary's name: He Lianhua[13] - Contact number: 0755-89492166[13] - Email: 002055@deren.com[13] III. Other Information No changes occurred in the company's registered address, office address, website, email, or information disclosure locations during the reporting period - The company's registered address, office address, postal code, website, and email remained unchanged during the reporting period[14] - Information disclosure and placement locations remained unchanged during the reporting period[15] IV. Key Accounting Data and Financial Indicators The company achieved a turnaround in H1 2025, with net profit attributable to shareholders increasing by 154.98%, despite a 21.00% revenue decrease due to Meta System S.p.A. deconsolidation 2025 Semi-Annual Key Accounting Data and Financial Indicators | Indicator | Current Period (yuan) | Prior Year (yuan) | YoY Change | | :--- | :--- | :--- | :--- | | Operating Revenue | 2,116,104,030.29 | 2,678,640,151.62 | -21.00% | | Net Profit Attributable to Shareholders | 52,062,335.42 | -94,694,261.60 | 154.98% | | Net Profit Attributable to Shareholders (Excluding Non-Recurring Items) | 43,136,596.25 | -115,246,633.70 | 137.43% | | Net Cash Flow from Operating Activities | -296,185,899.19 | 46,371,987.94 | -738.72% | | Basic Earnings Per Share (yuan/share) | 0.0861 | -0.1567 | 154.95% | | Diluted Earnings Per Share (yuan/share) | 0.0861 | -0.1567 | 154.95% | | Weighted Average Return on Net Assets | 3.78% | -3.69% | 7.47% | | Total Assets (Period-end) | 5,146,340,016.14 | 5,184,575,479.48 | -0.74% | | Net Assets Attributable to Shareholders (Period-end) | 1,408,233,230.79 | 1,347,117,720.01 | 4.54% | - Net cash flow from operating activities decreased significantly by 738.72%, primarily due to Meta's deconsolidation at the end of 2024, changes in settlement methods for home appliance customers, adjustments in supplier settlement methods, and increased strategic business investments[17] V. Differences in Accounting Data Under Domestic and International Accounting Standards The company reports no differences in net profit and net assets between financial statements prepared under international/overseas and Chinese accounting standards - The company reports no differences in net profit and net assets between financial statements disclosed under international accounting standards and Chinese accounting standards during the reporting period[18] - The company reports no differences in net profit and net assets between financial statements disclosed under overseas accounting standards and Chinese accounting standards during the reporting period[19] VI. Non-Recurring Gains and Losses and Amounts Non-recurring gains and losses totaled 8.93 million yuan, mainly comprising government grants, reversal of impairment provisions, debt restructuring gains, and fair value changes Non-Recurring Gains and Losses and Amounts | Item | Amount (yuan) | Explanation | | :--- | :--- | :--- | | Gains/losses on disposal of non-current assets | -536,612.83 | | | Government grants recognized in current profit/loss | 8,394,886.56 | Government grants related to daily operations | | Fair value changes and disposal gains/losses of financial assets/liabilities (excluding effective hedges) | -17,322,174.00 | Primarily fair value changes of other non-current financial assets | | Reversal of impairment provisions for individually assessed receivables | 11,342,151.58 | Reversal of individually provided bad debt provisions | | Debt restructuring gains/losses | 7,253,392.22 | Primarily due to debt restructuring of customer receivables into long-term equity investments | | Other non-operating income and expenses | 833,842.97 | | | Less: Income tax impact | 1,035,231.13 | | | Minority interest impact (after tax) | 4,516.20 | | | Total | 8,925,739.17 | | - The company has not classified any non-recurring gains and losses listed in "Interpretive Announcement No. 1 on Information Disclosure by Companies Issuing Securities to the Public – Non-Recurring Gains and Losses" as recurring gains and losses[22] Section III Management Discussion and Analysis This section analyzes the company's business operations, financial performance, core competencies, and risk factors during the reporting period I. Principal Businesses During the Reporting Period The company primarily engages in R&D, manufacturing, and sales of electronic connectors and precision components, achieving a turnaround in H1 2025 by focusing on core business and deconsolidating Meta System S.p.A - The company primarily engages in the R&D, manufacturing, and sales of electronic connectors and precision components, with products applied in home appliances, computers, communications, smart cars, and new energy vehicles[24] - The connector industry benefits from global automotive electrification and intelligence trends, communication and data center deployment, consumer electronics iteration, and industrial automation and medical demands, leading to increasing market demand[24] - In H1 2025, the company achieved a turnaround in operating performance compared to the prior year, primarily due to focusing on its core business, strengthening internal management, deconsolidating Meta System S.p.A., and recovering certain debts[27] (I) Company's Main Business The company's core business involves R&D, manufacturing, and sales of electronic connectors and precision components for various high-tech sectors - The company's main business is the R&D, manufacturing, and sales of electronic connectors and precision components[24] - Products are widely used in home appliances, computers and peripherals, communications, smart cars, new energy vehicles, and other fields[24] - Specific product lines include home appliance connectors and wire harnesses, computer connectors, communication connectors, LED connectors, automotive connectors and wire harnesses, and battery connection systems (CCS)[24] (II) Industry Development Status The connector industry is growing due to automotive electrification, smart technologies, and consumer electronics, with Chinese firms gaining market share, while the new energy vehicle market shows strong growth - Global market demand for connector products is gradually increasing, with products evolving towards high-speed, high-bandwidth, miniaturization, integration, high reliability, and durability[24] - Chinese connector manufacturers have rapidly achieved scale advantages due to strong process optimization and cost control capabilities, proximity to customers, and flexible response, benefiting from the trend of domestic substitution[25] New Energy Vehicle Market Forecast | Indicator | 2025 Forecast | 2030 Forecast | | :--- | :--- | :--- | | Global New Energy Vehicle Sales | 22.40 million vehicles | 44.05 million vehicles | | China Total Vehicle Sales | Over 32.90 million vehicles | - | | China New Energy Vehicle Sales | Estimated 16.00 million vehicles | - | | China New Energy Vehicle Penetration Rate | Further increase | - | (III) Company's Main Business Model The company operates on an order-driven model, with sales as the central focus, and its business model, market position, and performance drivers remained unchanged - The company adopts an order-driven business model, with sales as the central link of production and operation[27] - During the reporting period, the company's business model, market position, and main performance drivers remained unchanged[27] (IV) Company Business Development During the Reporting Period In H1 2025, the company achieved a turnaround by focusing on its core business, strengthening management, increasing R&D, and expanding its connector business, while Meta System S.p.A.'s deconsolidation reduced negative profit impact - In H1 2025, the company's operating performance achieved a turnaround compared to the prior year[27] - The company further focused on its core business, strengthened internal management, increased R&D investment and market expansion, and further expanded its connector business scale[27] - Subsidiary Meta System S.p.A. was deconsolidated from the company's financial statements at the end of 2024, significantly reducing its negative impact on the company's profit level[27] II. Analysis of Core Competencies The company maintained stable core competencies by optimizing resource allocation, focusing on core businesses, upgrading management systems, solidifying major client strategies, and continuous R&D innovation - The company continuously implements asset integration and optimization measures, concentrating its strengths on core business areas and building a relatively complete product system[29] - The company continuously upgrades and optimizes its management system, comprehensively deploying MES and promoting SAP systems to enhance operational efficiency and market responsiveness, while deeply practicing ESG sustainable development principles[29][30] - The company actively implements a major client strategy, deepening strategic cooperation with clients through profound technological accumulation, strict quality control, and rapid response capabilities[30] - The company highly values independent R&D and technological innovation, driving technological upgrades and performance optimization around high-speed connectors and new energy core businesses, and actively promoting the integration of "production, academia, and research"[31] III. Analysis of Main Business Main business revenue decreased by 21.00% due to Meta's deconsolidation, but core product lines like automotive electrical systems saw significant growth, with a reclassification of business segments for clarity Year-on-Year Changes in Key Financial Data | Indicator | Current Period (yuan) | Prior Year (yuan) | YoY Change | Reason for Change | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue | 2,116,104,030.29 | 2,678,640,151.62 | -21.00% | Primarily due to the deconsolidation of former controlling subsidiary Meta | | Operating Cost | 1,669,597,457.16 | 2,231,918,867.65 | -25.19% | Same as above | | Selling Expenses | 49,034,006.72 | 66,965,039.21 | -26.78% | Same as above | | Administrative Expenses | 175,637,548.26 | 330,319,175.27 | -46.83% | Same as above | | Financial Expenses | 49,515,159.92 | 87,941,045.96 | -43.70% | Primarily due to the deconsolidation of former controlling subsidiary Meta and exchange rate fluctuations | | Income Tax Expense | 23,863,623.06 | 15,724,318.82 | 51.76% | Primarily due to increased profitability and tax impact from recovery of prior period receivables | | R&D Investment | 88,472,410.22 | 227,233,233.70 | -61.07% | Primarily due to the deconsolidation of former controlling subsidiary Meta | | Net Cash Flow from Operating Activities | -296,185,899.19 | 46,371,987.94 | -738.72% | Primarily due to Meta's deconsolidation, changes in supplier settlement methods, and increased operating cash outflow from higher business volume | | Net Cash Flow from Investing Activities | -31,724,700.67 | -54,412,162.32 | 41.70% | Primarily due to Meta's deconsolidation and redemption of cash management products in the prior period | | Net Cash Flow from Financing Activities | 314,092,359.24 | -52,991,557.43 | 692.72% | Primarily due to payment of long-term payables in the prior period and increased borrowings in the current period | | Net Increase in Cash and Cash Equivalents | -8,247,178.88 | -56,947,941.31 | 85.52% | Primarily due to Meta's deconsolidation, increased borrowings in the current period, and payment of long-term payables in the prior period | Operating Revenue Composition (by Product and Region) | Category | Item | Current Period Amount (yuan) | % of Operating Revenue | Prior Year Amount (yuan) | % of Operating Revenue | YoY Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | By Product | Precision Connectors and Components | 565,930,923.17 | 26.74% | 513,794,131.54 | 19.18% | 10.15% | | | Home Appliance Wire Harnesses and Connection Components | 870,577,852.64 | 41.14% | 740,000,587.19 | 27.63% | 17.65% | | | Automotive Electrical Systems | 337,287,889.83 | 15.94% | 210,125,693.14 | 7.84% | 60.52% | | | Other Precision Components and Other Business Revenue | 342,307,364.65 | 16.18% | 1,214,719,739.75 | 45.35% | -71.82% | | By Region | Mainland China | 1,562,914,060.79 | 73.86% | 1,421,318,892.04 | 53.06% | 9.96% | | | Outside Mainland China | 553,189,969.50 | 26.14% | 1,257,321,259.58 | 46.94% | -56.00% | - The company has reclassified its existing businesses to present business segments more clearly and refine its business development strategy, further focusing on its core business[37] IV. Analysis of Non-Core Business Non-core business impacted total profit, with investment income at 17.91% (partially sustainable) and fair value changes at -22.96% (not sustainable) Impact of Non-Core Business on Total Profit | Item | Amount (yuan) | % of Total Profit | Reason for Formation | Sustainability | | :--- | :--- | :--- | :--- | :--- | | Investment Income | 13,515,418.47 | 17.91% | Primarily gains from debt restructuring and investment income from associates | Investment income from associates is sustainable, others are not | | Fair Value Change Gains/Losses | -17,322,174.00 | -22.96% | Fair value changes of other non-current financial assets held by the company | No | | Asset Impairment | -332,527.74 | -0.44% | Impairment provisions for inventory, fixed assets, intangible assets, etc., in accordance with accounting standards | No | | Other Income | 8,378,886.56 | 11.10% | Government grants related to the company's operations | No | | Gains/Losses on Asset Disposal | 12,046.05 | 0.02% | Gains/losses from disposal of fixed assets and other long-term assets | No | | Credit Impairment Losses | 2,301.95 | 0.00% | Bad debt losses accrued by the company | Yes | V. Analysis of Assets and Liabilities Total assets slightly decreased by 0.74%, while net assets attributable to shareholders increased by 4.54%, with significant changes in receivables and long-term equity investments due to debt restructuring Significant Changes in Asset Composition | Item | Period-end Amount (yuan) | % of Total Assets | Prior Year-end Amount (yuan) | % of Total Assets | % Change | Explanation of Significant Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Cash and Bank Balances | 77,928,687.40 | 1.51% | 79,430,292.79 | 1.53% | -0.02% | | | Accounts Receivable | 1,408,972,532.93 | 27.38% | 1,548,667,095.81 | 29.85% | -2.47% | Primarily due to debt restructuring of customer receivables into long-term equity investments in the current period | | Inventories | 617,623,617.29 | 12.00% | 614,267,549.68 | 11.84% | 0.16% | | | Long-term Equity Investments | 350,591,030.08 | 6.81% | 205,514,065.94 | 3.96% | 2.85% | Primarily due to debt restructuring of customer receivables into long-term equity investments in the current period | | Fixed Assets | 1,049,269,273.41 | 20.39% | 1,029,384,223.43 | 19.84% | 0.55% | | | Short-term Borrowings | 426,592,955.20 | 8.29% | 375,869,509.73 | 7.25% | 1.04% | | | Notes Receivable | 453,897,637.35 | 8.82% | 432,405,061.71 | 8.34% | 0.48% | | Asset Rights Restricted as of the End of the Reporting Period | Item | Amount (yuan) | Restricted Conditions | | :--- | :--- | :--- | | Cash and Bank Balances | 12,199,433.47 | Bank acceptance bill margin | | Accounts Receivable | 82,786,609.73 | Pledged for short-term borrowings | | Fixed Assets | 454,497,141.01 | Mortgaged for long-term/short-term borrowings, bank acceptance bills, agricultural development bank special funds | | Intangible Assets | 128,444,528.09 | Mortgaged for borrowings | | Investment Properties | 11,581,542.34 | Mortgaged for borrowings | | Total | 689,509,254.64 | | - The fair value change loss of other non-current financial assets held by the company was -17.32 million yuan[44] VI. Analysis of Investment Status Total investment increased by 100% to 138.81 million yuan, with securities investments primarily in trading financial assets, and overall raised capital utilization at 84.59% Investment Amount During the Reporting Period | Indicator | Investment Amount (yuan) | Prior Year Investment Amount (yuan) | Change (%) | | :--- | :--- | :--- | :--- | | Total Investment | 138,814,937.89 | 0.00 | 100.00% | Securities Investment Status | Item | Beginning Balance (yuan) | Current Period Fair Value Change Gains/Losses (yuan) | Period-end Balance (yuan) | | :--- | :--- | :--- | :--- | | Trading Financial Assets (excluding derivative financial assets) | 2,151,000.00 | -261,000.00 | 1,890,000.00 | - As of June 30, 2025, the company directly invested 1,389.51 million yuan in raised fund projects, with an overall utilization rate of 84.59%[52][51] - The company terminated the "OBC R&D Center Project" and permanently supplemented working capital with the remaining raised funds[56] - The company previously used 300 million yuan of idle raised funds to temporarily supplement working capital, which was fully repaid by August 11, 2025[57] VII. Significant Asset and Equity Sales The company did not engage in any significant asset or equity sales during the reporting period - The company did not sell significant assets during the reporting period[59] - The company did not sell significant equity during the reporting period[60] VIII. Analysis of Major Holding and Associate Companies Heshan Deren Electronic Technology Co., Ltd. saw revenue and net profit growth, while Shenzhen Deren Optical Co., Ltd. significantly improved profitability, and a new subsidiary, Zhuhai Hengqin Deren Technology Co., Ltd., was established Financial Overview of Major Subsidiaries and Associate Companies | Company Name | Company Type | Operating Revenue (yuan) | Net Profit (yuan) | Business Scope | | :--- | :--- | :--- | :--- | :--- | | Heshan Deren Electronic Technology Co., Ltd. | Subsidiary | 633,408,764.83 | 111,635,898.14 | Production and sales of electronic connectors, etc. | | Qingdao Deren Electronics Co., Ltd. | Subsidiary | 419,321,176.31 | 4,897,283.91 | Production and sales of electronic connectors, etc. | | Shenzhen Deren Optical Co., Ltd. | Subsidiary | 274,011,540.22 | 18,043,823.72 | Production and sales of optoelectronic products, etc. | | Hefei Deren Electronic Devices Co., Ltd. | Subsidiary | 509,900,276.93 | -5,687,547.78 | Production and sales of electronic connectors, etc. | | Guangdong Kostal Deren Automotive Components Co., Ltd. | Associate Company | 829,457,317.32 | 13,065,839.06 | Production and sales of automotive connectors, etc. | - Heshan Deren Electronic Technology Co., Ltd. experienced steady growth in revenue and net profit[61] - Shenzhen Deren Optical Co., Ltd.'s profitability significantly improved due to changes in product structure and other factors[62] - The newly established subsidiary, Zhuhai Hengqin Deren Technology Co., Ltd., had a minor impact on the company's operating performance during the reporting period[61] IX. Structured Entities Controlled by the Company The company did not control any structured entities during the reporting period - The company did not control any structured entities during the reporting period[64] X. Risks Faced by the Company and Countermeasures The company faces macroeconomic, market competition, technological, supply chain, and exchange rate risks, which it addresses through strategic monitoring, innovation, diversified sourcing, and hedging - The company faces macroeconomic environment and policy/regulatory risks and will closely monitor policy trends to formulate development strategies aligned with its situation[65] - The company faces market competition risks and will continuously strengthen technological innovation and product R&D, enhancing product quality and service levels[65] - The company faces technological iteration risks and will increase R&D investment, strengthen deep cooperation with customers, and plan for next-generation product solutions[66] - The company faces supply chain risks and will establish a diversified global supplier network, implement strict supplier evaluation and management, and optimize inventory and procurement processes[66] - The company faces exchange rate risks and will use various methods to reasonably hedge foreign exchange risks and balance risks through global resource allocation[66] XI. Formulation and Implementation of Market Value Management System and Valuation Enhancement Plan The company did not formulate a market value management system or disclose a valuation enhancement plan during the reporting period - The company did not formulate a market value management system[67] - The company did not disclose a valuation enhancement plan[67] XII. Implementation of "Quality and Return Dual Improvement" Action Plan The company did not disclose an announcement regarding the "Quality and Return Dual Improvement" action plan during the reporting period - The company did not disclose an announcement regarding the "Quality and Return Dual Improvement" action plan during the reporting period[67] Section IV Corporate Governance, Environment, and Society This section details changes in the company's governance, profit distribution, employee incentives, environmental disclosures, and social responsibility initiatives I. Changes in Directors, Supervisors, and Senior Management There were no changes in the company's directors, supervisors, and senior management during the reporting period - There were no changes in the company's directors, supervisors, and senior management during the reporting period[69] II. Profit Distribution and Capital Reserve Conversion to Share Capital in This Reporting Period The company plans not to distribute cash dividends, issue bonus shares, or convert capital reserves into share capital for the semi-annual period - The company plans not to distribute cash dividends, issue bonus shares, or convert capital reserves into share capital for the semi-annual period[70] III. Implementation of Equity Incentive Plans, Employee Stock Ownership Plans, or Other Employee Incentive Measures The company had no equity incentive plans, employee stock ownership plans, or other employee incentive measures in place during the reporting period - The company had no equity incentive plans, employee stock ownership plans, or other employee incentive measures or their implementation during the reporting period[71] IV. Environmental Information Disclosure The company and its subsidiary, Shenzhen Deren Optical Co., Ltd., are listed as legally required environmental information disclosure enterprises - The listed company and its major subsidiary, Shenzhen Deren Optical Co., Ltd., are included in the list of enterprises required to disclose environmental information by law[72] - Shenzhen Deren Optical Co., Ltd.'s environmental information disclosure report can be found on the Guangdong Provincial Department of Ecology and Environment - Enterprise Environmental Information Disclosure System[72] V. Social Responsibility The company prioritizes social responsibility, balancing economic, environmental, and social development through good governance, employee welfare, customer/supplier relations, green manufacturing, and community engagement - The company strictly adheres to laws and regulations to improve corporate governance, enhance information disclosure quality, and maintain communication with investors to protect the rights and interests of shareholders and creditors[73] - The company values employee rights protection, establishes comprehensive human resource management systems, provides career development guarantees and a safe and healthy working environment, and organizes various corporate culture activities to enrich employee life[73][74] - The company adheres to a customer-centric approach, responding quickly to demands and providing high-quality products and services; it fosters win-win cooperation with suppliers, establishing fair evaluation systems to ensure supply chain security and stability[75] - The company advocates green manufacturing and energy conservation, improves its environmental management system, integrates "dual carbon" strategies into daily operations, and enhances production efficiency through technological R&D to achieve energy saving and emission reduction[75] - The company actively fulfills its social responsibilities by paying taxes, creating employment, building good public relations, and organizing and participating in various public welfare activities[76] Section V Significant Matters This section covers significant events, including commitments, related party transactions, litigation, and other material developments affecting the company I. Commitments Fulfilled and Overdue Unfulfilled by Controlling Shareholder, Shareholders, Related Parties, Acquirers, and the Company During and as of the End of the Reporting Period The company reports no commitments by controlling shareholders, shareholders, related parties, acquirers, or the company that were fulfilled or overdue unfulfilled during or as of the end of the reporting period - The company reports no commitments by its controlling shareholder, shareholders, related parties, acquirers, or the company that were fulfilled during or overdue unfulfilled as of the end of the reporting period[78] II. Non-Operating Funds Occupied by Controlling Shareholder and Other Related Parties from the Listed Company The company reports no non-operating funds occupied by its controlling shareholder or other related parties from the listed company during the reporting period - The company reports no non-operating funds occupied by its controlling shareholder or other related parties from the listed company during the reporting period[79] III. Irregular External Guarantees The company had no irregular external guarantees during the reporting period - The company had no irregular external guarantees during the reporting period[80] IV. Appointment and Dismissal of Accounting Firms The company's semi-annual report was not audited - The company's semi-annual report was not audited[81] V. Explanations by the Board of Directors and Supervisory Board on the Accounting Firm's "Non-Standard Audit Report" for This Reporting Period The company reports no explanations from the Board of Directors or Supervisory Board regarding a "non-standard audit report" for this reporting period - The company reports no explanations from the Board of Directors or Supervisory Board regarding a "non-standard audit report" for this reporting period[82] VI. Explanations by the Board of Directors on the "Non-Standard Audit Report" for the Prior Year Zhongzheng Tiantong Certified Public Accountants issued a qualified opinion with an emphasis-of-matter paragraph for the 2024 financial report, citing an ongoing CSRC investigation into alleged information disclosure violations - Zhongzheng Tiantong Certified Public Accountants issued a qualified opinion with an emphasis-of-matter paragraph on the company's 2024 annual financial report[82] - The emphasis-of-matter paragraph concerns the company and one of its actual controllers, Mr. Qiu Jianmin, who received a "Notice of Case Filing" from the China Securities Regulatory Commission on December 25, 2024, for alleged information disclosure violations[82] - As of the disclosure date of this report, the company has not received conclusive opinions or decisions from the CSRC regarding the aforementioned investigation and will actively cooperate and fulfill information disclosure obligations in a timely manner[82] VII. Bankruptcy and Reorganization Matters The company did not experience any bankruptcy or reorganization matters during the reporting period - The company did not experience any bankruptcy or reorganization matters during the reporting period[83] VIII. Litigation Matters The company is involved in multiple significant lawsuits, including claims against Chongqing Meda and Yibin Mett for unpaid loans totaling 547.79 million yuan and 278.92 million yuan, and investor lawsuits for securities misrepresentation totaling 83.35 million yuan Significant Litigation and Arbitration Matters | Litigation (Arbitration) Overview | Amount Involved (million yuan) | Provision for Liabilities Formed | Litigation (Arbitration) Progress | | :--- | :--- | :--- | :--- | | Company's lawsuit against Chongqing Meda for unpaid loan principal, interest, and liquidated damages | 547.79 | No | Officially filed, not yet heard | | Company's lawsuit against Chongqing Meda, Yibin Mett for unpaid loan principal, interest, and liquidated damages | 278.92 | No | Officially filed, not yet heard | | Other lawsuits cumulatively meeting significant litigation disclosure standards | 162.66 | No | Not applicable | - The company has accrued appropriate bad debt provisions for the loans and interest of Chongqing Meda and Yibin Mett, expecting no significant adverse impact on future operating performance[84] Other Litigation Matters | Litigation (Arbitration) Overview | Amount Involved (million yuan) | Provision for Liabilities Formed | Litigation (Arbitration) Progress | | :--- | :--- | :--- | :--- | | Investor lawsuits due to the company's investigation by the CSRC on December 25, 2024 | 83.35 | No | Officially filed, not yet heard | IX. Penalties and Rectification The company had no penalties or rectification situations during the reporting period - The company had no penalties or rectification situations during the reporting period[86] X. Integrity Status of the Company, its Controlling Shareholder, and Actual Controllers The company, its controlling shareholder, and actual controllers had no unfulfilled court judgments or large overdue debts during the reporting period - The company reports no unfulfilled court judgments or large overdue debts during the reporting period[87] XI. Significant Related Party Transactions The company had no significant related party transactions, including daily operations, asset/equity acquisitions/disposals, joint investments, or related party debt/credit, nor financial business with related financial companies - The company had no related party transactions related to daily operations during the reporting period[87] - The company had no related party transactions involving asset or equity acquisitions/disposals during the reporting period[88] - The company had no related party debt or credit transactions during the reporting period[90] - The company had no deposits, loans, credit lines, or other financial business with related financial companies[91] XII. Significant Contracts and Their Performance The company had no significant contracts for trusteeship, contracting, or leasing, but provided external guarantees totaling 689.48 million yuan, representing 48.96% of net assets - The company had no significant contracts for trusteeship, contracting, leasing, or other major contracts during the reporting period[94][95][96][101] External Guarantees by the Company and its Subsidiaries | Guarantor Name | Guarantee Limit (million yuan) | Actual Guarantee Amount (million yuan) | Guarantee Type | Guarantee Period | Fulfilled | Related Party Guarantee | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Meda Electric (Chongqing) Co., Ltd. | 121.50 | 121.50 | Joint and several liability | Until Sep 5, 2028 | No | Yes | | Heshan Deren Electronic Technology Co., Ltd. | 280.00 | 280.00 | Joint and several liability | Until Apr 25, 2034 | No | No | | Heshan Deren Electronic Technology Co., Ltd. | 9.50 | 9.50 | Joint and several liability | Until Nov 18, 2027 | No | No | | Hefei Deren Electronic Devices Co., Ltd. | 60.00 | 60.00 | Joint and several liability | Until Jun 4, 2029 | No | No | | Shenzhen Deren Optical Co., Ltd. | 10.00 | 10.00 | Joint and several liability | Until Dec 12, 2028 | No | No | | Heshan Deren Electronic Technology Co., Ltd. | 144.00 | 144.00 | Joint and several liability | Indefinite | No | No | | Chongqing Ruirun Electronics Co., Ltd. | 64.48 | 64.48 | Joint and several liability | Until Jun 6, 2037 | No | No | | Total | 1,413.50 | 689.48 | | | | | - As of the end of the reporting period, the total actual guarantee balance was 689.48 million yuan, accounting for 48.96% of the company's net assets[99] XIII. Explanation of Other Significant Matters The company disclosed various significant announcements, including judicial auctions of controlling shareholder's shares, subsidiary creditor settlement progress, equity transfer, 2024 performance forecast, asset impairment, and related party guarantees - The company disclosed progress announcements regarding the re-judicial auction of some shares of the controlling shareholder that were successfully bid but not transferred in the previous auction[102] - The company disclosed progress announcements regarding its subsidiary's application for creditor settlement procedures[102] - The company disclosed progress announcements regarding the transfer of partial equity in its controlling subsidiary[102] - The company disclosed announcements regarding the accrual of asset impairment provisions and asset write-offs for 2024[103] - The company disclosed announcements regarding providing guarantee limits for controlling subsidiaries' financing[103] XIV. Significant Matters of Company Subsidiaries The company transferred 42% of Liuzhou Shuangfei's equity in 2023, with remaining payments due by year-end 2025, and Meta System S.p.A. will enter liquidation due to asset transfers - The company approved the transfer of 42% equity in controlling subsidiary Liuzhou Shuangfei on February 24, 2023; after the transfer, the company still holds 18% equity, and Liuzhou Shuangfei is no longer included in the consolidated financial statements[105] - As of January 2025, the company received 20 million yuan of the Liuzhou Shuangfei equity transfer payment, with the remaining 144.56 million yuan to be paid by December 31, 2025[105] - Controlling subsidiary Meta System S.p.A. will enter liquidation procedures as its assets, businesses, and personnel have been substantially transferred and delivered[106] - The company expects Meta's liquidation to have no significant impact on its financial position, with the final impact subject to the liquidation results and the annual auditor's report[107] Section VI Share Changes and Shareholder Information This section details changes in the company's share capital, shareholder structure, and holdings of directors, supervisors, and senior management I. Share Changes The company's total share capital remained unchanged at 604,490,017 shares, with restricted shares increasing by 877,754 shares and unrestricted shares decreasing by the same amount due to executive share restrictions Share Changes | Item | Quantity Before Change (shares) | % Before Change | Change (Increase/Decrease) Subtotal (shares) | Quantity After Change (shares) | % After Change | | :--- | :--- | :--- | :--- | :--- | :--- | | I. Restricted Shares | 9,622,246 | 1.59% | 877,754 | 10,500,000 | 1.74% | | II. Unrestricted Shares | 594,867,771 | 98.41% | -877,754 | 593,990,017 | 98.26% | | III. Total Shares | 604,490,017 | 100% | 0 | 604,490,017 | 100% | - The reason for share changes is the restriction of executive shares[110] Restricted Share Changes | Shareholder Name | Beginning Restricted Shares (shares) | Current Period Increase in Restricted Shares (shares) | Period-end Restricted Shares (shares) | Reason for Restriction | | :--- | :--- | :--- | :--- | :--- | | Qiu Jianmin | 9,622,246 | 877,754 | 10,500,000 | Executive shares | II. Securities Issuance and Listing The company had no securities issuance or listing activities during the reporting period - The company had no securities issuance or listing activities during the reporting period[114] III. Number of Shareholders and Shareholding As of the reporting period end, the company had 91,632 common shareholders, with Shenzhen Desheng Asset Management Co., Ltd. and Qiu Jianmin holding significant pledged/frozen shares - Total number of common shareholders at the end of the reporting period: 91,632[115] Shareholding of Shareholders Holding 5% or More or Top 10 Shareholders | Shareholder Name | Shareholder Nature | Shareholding Ratio | Period-end Shareholding (shares) | Restricted Shares Held (shares) | Unrestricted Shares Held (shares) | Share Status | Pledged, Marked, or Frozen Quantity (shares) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Shenzhen Desheng Asset Management Co., Ltd. | Domestic Non-State Legal Person | 5.44% | 32,904,933 | 0 | 32,904,933 | Pledged/Frozen | 32,904,933 | | Qiu Jianmin | Domestic Natural Person | 2.32% | 14,000,000 | 10,500,000 | 3,500,000 | Pledged/Frozen | 14,000,000 | | Yang Hua | Domestic Natural Person | 2.02% | 12,200,033 | 0 | 12,200,033 | Not applicable | 0 | - Shenzhen Desheng Asset Management Co., Ltd., Qiu Jianmin, and Yang Hua may have related party relationships and act in concert[115] IV. Changes in Shareholdings of Directors, Supervisors, and Senior Management There were no changes in the shareholdings of the company's directors, supervisors, and senior management during the reporting period - There were no changes in the shareholdings of the company's directors, supervisors, and senior management during the reporting period[117] V. Changes in Controlling Shareholder or Actual Controller The company's controlling shareholder and actual controller remained unchanged during the reporting period - The company's controlling shareholder remained unchanged during the reporting period[118] - The company's actual controller remained unchanged during the reporting period[118] VI. Preferred Share Information The company had no preferred shares during the reporting period - The company had no preferred shares during the reporting period[119] Section VII Bond-Related Information The company had no bond-related information during the reporting period - The company had no bond-related information during the reporting period[121] Section VIII Financial Report This section presents the company's consolidated and parent company financial statements, including balance sheets, income statements, and cash flow statements I. Audit Report The company's semi-annual financial report was not audited - The company's semi-annual financial report was not audited[123] II. Financial Statements This section provides the company's H1 2025 consolidated and parent company balance sheets, income statements, cash flow statements, and statements of changes in owners' equity Consolidated Balance Sheet Key Data (Period-end) | Item | Amount (yuan) | | :--- | :--- | | Total Assets | 5,146,340,016.14 | | Total Liabilities | 3,741,163,053.51 | | Total Owners' Equity Attributable to Parent Company | 1,408,233,230.79 | | Minority Interests | -3,056,268.16 | | Total Owners' Equity | 1,405,176,962.63 | Consolidated Income Statement Key Data (Current Period) | Item | Amount (yuan) | | :--- | :--- | | Total Operating Revenue | 2,116,104,030.29 | | Operating Profit | 75,159,961.04 | | Total Profit | 75,461,145.13 | | Net Profit | 51,597,522.07 | | Net Profit Attributable to Parent Company Shareholders | 52,062,335.42 | | Basic Earnings Per Share (yuan/share) | 0.0861 | Consolidated Cash Flow Statement Key Data (Current Period) | Item | Amount (yuan) | | :--- | :--- | | Net Cash Flow from Operating Activities | -296,185,899.19 | | Net Cash Flow from Investing Activities | -31,724,700.67 | | Net Cash Flow from Financing Activities | 314,092,359.24 | | Net Increase in Cash and Cash Equivalents | -8,247,178.88 | III. Company Overview Shenzhen Deren Electronic Co., Ltd., established in 1992 and listed in 2006, specializes in electronic connectors, with a registered capital of 604.49 million yuan, controlled by Shenzhen Desheng Asset Management Co., Ltd. and the Qiu brothers - Shenzhen Deren Electronic Co., Ltd. was established on April 10, 1992, and listed on the Shenzhen Stock Exchange on July 25, 2006[156] - As of June 30, 2025, the company's total issued share capital was 604,490,017 shares, with a registered capital of 604.49 million yuan[156] - The company belongs to the electronic components manufacturing industry, primarily engaging in the R&D, manufacturing, and sales of electronic connectors and precision components[157] - The company's controlling shareholder is Shenzhen Desheng Asset Management Co., Ltd., and its actual controllers are brothers Qiu Jianmin and Qiu Weimin, who collectively held 9.78% of the company's equity as of the end of the reporting period[156] - The company's H1 2025 consolidated financial statements include a total of 35 companies[159] IV. Basis of Financial Statement Preparation The financial statements are prepared in accordance with PRC Accounting Standards and CSRC regulations, based on a going concern assumption, with no significant doubts about the company's ability to continue as a going concern - The company prepares its financial statements based on actual transactions and events, in accordance with the "Enterprise Accounting Standards" issued by the Ministry of Finance and other relevant regulations[160] - These financial statements are prepared on a going concern basis, and the company evaluated its ability to continue as a going concern for 12 months from the end of the reporting period, finding no significant doubts[161] V. Significant Accounting Policies and Estimates This section details the company's significant accounting policies and estimates, including those for financial instruments, revenue recognition, and various asset/liability classifications, ensuring true and complete financial reporting - The company's financial statements comply with Enterprise Accounting Standards, truly and completely reflecting its financial position, operating results, and cash flows[162] - The company defines a business cycle as 12 months, which serves as the liquidity classification standard for assets and liabilities[164] - RMB is the functional currency for the company and its domestic subsidiaries, while overseas subsidiaries determine their functional currency based on their primary economic environment[165] - The company classifies financial assets into three categories based on the business model for managing financial assets and their contractual cash flow characteristics: measured at amortized cost, at fair value through other comprehensive income, and at fair value through profit or loss[184] - The method for determining and accounting for expected credit losses on contract assets is detailed in Note V, (XI) 6. Impairment of Financial Instruments[208] - The general principle for revenue recognition is to recognize revenue when the customer obtains control of the related goods, at the transaction price allocated to that performance obligation[252] VI. Taxation The company's main taxes include VAT, urban maintenance and construction tax, and corporate income tax, with several subsidiaries enjoying a 15% high-tech enterprise income tax rate and VAT "exemption, offset, and refund" policies Major Tax Categories and Rates | Tax Category | Tax Base | Tax Rate | | :--- | :--- | :--- | | Value-Added Tax (VAT) | Sales revenue, processing and repair revenue, labor income, and import value | 6%, 9%, 13%, 15% | | Urban Maintenance and Construction Tax | Actual paid turnover tax amount | 1%, 5%, 7% | | Corporate Income Tax | Taxable income | 8.25%, 15%, 16.5%, 20%, 25%, 30% | | Education Surcharge | Actual paid turnover tax amount | 3% | | Property Tax | 70% of original property value (or rental income) as tax base | 1.2%, 12% | - The company and several subsidiaries (e.g., Shenzhen Deren Electronic Co., Ltd., Heshan Deren Electronic Technology Co., Ltd., Huizhou Shenghua Technology Co., Ltd., Heshan Barati Electronics Co., Ltd., Shenzhen Deren Optical Co., Ltd.) enjoy a 15% high-tech enterprise income tax rate[78] - Mianyang Hongrun Electronics Co., Ltd., Chongqing Ruirun Electronics Co., Ltd., Chongqing Deren Automotive Electronics Research Institute Co., Ltd., and Deren Automotive Components (Chongqing) Co., Ltd. are taxed at a 15% corporate income tax rate under the Western Development Strategy[79] - Since 2003, the company has implemented a "tax exemption, offset, and refund" policy for VAT on direct export sales and benefits from the VAT super deduction policy for advanced manufacturing enterprises[78] VII. Notes to Consolidated Financial Statement Items This section details the period-end balances and changes of consolidated financial statement items, including cash, receivables, long-term equity investments, and operating results Cash and Bank Balances (Period-end) | Item | Period-end Balance (yuan) | | :--- | :--- | | Cash on hand | 1,002.20 | | Bank deposits | 66,413,607.21 | | Other cash and bank balances | 11,514,077.99 | | Total | 77,928,687.40 | | Of which: Restricted cash and bank balances | 12,199,433.47 | Notes Receivable (Period-end) | Item | Period-end Balance (yuan) | | :--- | :--- | | Bank acceptance bills | 26,219,443.36 | | Commercial acceptance bills | 429,266,479.97 | | Less: Provision for credit losses | 1,588,285.98 | | Total | 453,897,637.35 | Accounts Receivable (Period-end) | Item | Period-end Book Balance (yuan) | Bad Debt Provision (yuan) | Book Value (yuan) | | :--- | :--- | :--- | :--- | | Provision for bad debts on an individual basis | 164,720,522.91 | 156,560,014.01 | 8,160,508.90 | | Provision for bad debts on a collective basis | 1,654,804,662.91 | 253,992,638.88 | 1,400,812,024.03 | | Total | 1,819,525,185.82 | 410,552,652.89 | 1,408,972,532.93 | Long-term Equity Investments (Period-end) | Item | Book Value (yuan) | | :--- | :--- | | Guangdong Kostal Deren Automotive Components Co., Ltd. | 211,393,693.52 | | Chongqing Yuchang Enterprise Management Partnership (Limited Partnership) | 139,197,336.56 | | Subtotal | 350,591,030.08 | Long-term Payables (Period-end) | Item | Period-end Balance (yuan) | | :--- | :--- | | Investment payables | 1,453,836,578.10 | | Less: Long-term payables due within one year | 244,435,021.30 | | Total | 1,209,401,556.80 | VIII. R&D Expenses Total R&D expenses were 88.47 million yuan, entirely expensed, with no capitalized R&D expenditures, primarily comprising staff salaries, material consumption, and depreciation R&D Expense Composition | Item | Current Period Amount (yuan) | Prior Period Amount (yuan) | | :--- | :--- | :--- | | Employee compensation | 40,298,084.23 | 105,779,893.73 | | Material consumption | 35,917,037.39 | 30,285,669.33 | | Depreciation and amortization | 4,125,272.90 | 15,961,789.00 | | Repair and maintenance expenses | 4,664,945.98 | 6,103,023.48 | | Research and development fees | 901,458.09 | 28,678,358.11 | | Testing fees | 983,988.99 | 2,931,646.22 | | Other | 1,581,622.64 | 12,785,373.11 | | Total | 88,472,410.22 | 202,525,752.98 | | Of which: Expensed R&D expenditures | 88,472,410.22 | 127,890,994.33 | | Capitalized R&D expenditures | 0.00 | 74,634,758.65 | - All R&D expenditures in the current period were expensed, with no capitalized R&D projects[543] IX. Changes in Consolidation Scope The company's consolidation scope changed due to the establishment of Zhuhai Hengqin Deren Technology Co., Ltd. on April 17, 2025, with no non-same control, same control, or reverse mergers - No non-same control business combinations occurred in the current period[547] - No same control business combinations occurred in the current period[548] - No reverse acquisitions occurred in the current period[549] - The company established Zhuhai Hengqin Deren Technology Co., Ltd. on April 17, 2025, with a registered capital of 100,000 yuan[549] X. Interests in Other Entities The company holds interests in 35 subsidiaries and several associate companies, with no loss of control over subsidiaries during the reporting period, and has invested 5 million yuan as a limited partner in Jiaxing Dehong Equity Investment Partnership - The company owns 35 subsidiaries, with business natures covering the production and sales of connectors, precision components, optoelectronic products, automotive key component technology transfer services, investment, trade, and logistics[159][551][552][553] - The company's significant associate companies include Guangdong Kostal Deren Automotive Components Co., Ltd., Yibin Dekang Electronics Co., Ltd., Shenzhen Hualin Circuit Technology Co., Ltd., and Chongqing Yuchang Enterprise Management Partnership (Limited Partnership)[556] - During the reporting period, the company did not engage in any transactions or events that resulted in the loss of control over subsidiaries[549] - The company invested in Jiaxing Dehong Equity Investment Partnership (Limited Partnership) as a limited partner, with a subscribed capital of 10 million yuan, and had actually invested 5 million yuan as of June 30, 2025[562] XI. Government Grants Government grants related to assets totaled 10.02 million yuan in deferred income at period-end, with 1.63 million yuan recognized in current profit or loss Liability Items Involving Government Grants | Account | Beginning Balance (yuan) | Current Period New Grants (yuan) | Current Period Recognized in Non-Operating Income (yuan) | Current Period Transferred to Other Income (yuan) | Period-end Balance (yuan) | Related to Assets/Income | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Deferred Income | 6,111,368.38 | 5,162,734.34 | | 1,254,394.73 | 10,019,707.99 | Related to assets | Government Grants Recognized in Current Profit or Loss | Account |