盛科通信(688702) - 2025 Q2 - 季度财报

Section I Definitions Definitions of Common Terms This section defines common terms, company names, major shareholders, subsidiaries, industry terms, and accounting standards for clarity - This section elaborates on key terms in the report, including the company, major shareholders (e.g., China Zhenhua, Industrial Fund), subsidiaries (e.g., Nanjing Centec, Centec Technology), and important industry technical terms (e.g., ASIC, Fabless, FlexE, SDN, TSN, VxLAN), ensuring clarity and accuracy of information disclosure[12][13][14] Section II Company Profile and Key Financial Indicators I. Company's Basic Information This section outlines the company's basic registration information, including its Chinese name, abbreviation, legal representative, registered address, and historical changes - The company's Chinese name is Suzhou Centec Communications Co., Ltd., abbreviated as Centec Communications, with Lv Baoli as the legal representative, and its registered address at No. 258 Jiangyun Road, Suzhou Industrial Park[17][18] II. Contact Person and Information This section provides contact information for the company's Board Secretary and Securities Affairs Representative, facilitating investor inquiries and communication - The Board Secretary (domestic representative for information disclosure) is Zhai Liujing, and the Securities Affairs Representative is Yang Ying, both reachable at 0512-62885850, with the email address ir@centec.com[19] III. Overview of Information Disclosure and Document Storage Location Changes This section describes the company's information disclosure channels and document storage locations for its semi-annual report, ensuring investors can access public information promptly - The company's selected newspapers for information disclosure include China Securities Journal, Shanghai Securities News, etc., the website for the semi-annual report is the Shanghai Stock Exchange website (www.sse.com.cn), and the report is available at the company's Board Office[20] IV. Company Stock/Depositary Receipt Overview This section introduces the company's stock listing information, including stock type, listing exchange and board, stock abbreviation, and code - The company's stock is RMB ordinary shares (A-shares), listed on the STAR Market of the Shanghai Stock Exchange, with stock abbreviation Centec Communications and stock code 688702[21] V. Other Relevant Information This section discloses information about the sponsor institution fulfilling its continuous supervision duties during the reporting period, including its name, office address, names of signing sponsor representatives, and the duration of continuous supervision - The sponsor institution fulfilling continuous supervision duties during the reporting period is China International Capital Corporation Limited, with signing sponsor representatives Kong Yadi and Wu Mingyang, and the continuous supervision period from September 14, 2023, to December 31, 2026[22] VI. 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 total profit, net profit reduction, and net cash flow from operating activities Main Accounting Data (January-June 2025) | Indicator | Current Period (Jan-Jun) (CNY) | Prior Period (CNY) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 507,954,007.61 | 532,196,047.42 | -4.56 | | Total Profit | -23,689,074.15 | -56,887,124.64 | Not Applicable | | Net Profit Attributable to Shareholders of Listed Company | -23,689,074.15 | -56,887,124.64 | Not Applicable | | Net Profit Attributable to Shareholders of Listed Company After Deducting Non-Recurring Gains and Losses | -62,815,284.69 | -80,137,939.23 | Not Applicable | | Net Cash Flow from Operating Activities | 138,784,495.54 | -36,114,164.79 | Not Applicable | | Net Assets Attributable to Shareholders of Listed Company (Period End) | 2,331,215,919.60 | 2,333,283,243.27 | -0.09 | | Total Assets (Period End) | 2,580,762,914.49 | 2,662,111,030.50 | -3.06 | Main Financial Indicators (January-June 2025) | Indicator | Current Period (Jan-Jun) | Prior Period | YoY Change (%) | | :--- | :--- | :--- | :--- | | Basic Earnings Per Share (CNY/share) | -0.06 | -0.14 | Not Applicable | | Diluted Earnings Per Share (CNY/share) | -0.06 | -0.14 | Not Applicable | | Basic Earnings Per Share After Deducting Non-Recurring Gains and Losses (CNY/share) | -0.15 | -0.20 | Not Applicable | | Weighted Average Return on Net Assets (%) | -1.01 | -2.41 | Not Applicable | | Weighted Average Return on Net Assets After Deducting Non-Recurring Gains and Losses (%) | -2.68 | -3.40 | Not Applicable | | R&D Investment as Proportion of Operating Revenue (%) | 47.10 | 42.11 | Increased by 4.99 percentage points | - Company's total profit and net profit decreased losses by CNY 33.1981 million compared to the same period last year, primarily due to optimized supply chain, changes in sales structure leading to a 9.24 percentage point increase in comprehensive gross margin, and the positive contribution of the VAT input tax deduction policy[24] - Net cash flow from operating activities was CNY 138.7845 million, mainly due to a year-on-year decrease in payments for goods and an increase in sales collections during the reporting period[25] VIII. Non-Recurring Gains and Losses Items and Amounts This section details the company's non-recurring gains and losses items and amounts during the reporting period, with input tax deduction being the main contributor Non-Recurring Gains and Losses Items and Amounts (January-June 2025) | Item | Amount (CNY) | | :--- | :--- | | Government grants recognized in current profit or loss (excluding those closely related to the company's normal operations, compliant with national policies, enjoyed according to established standards, and having a sustained impact on the company's profit or loss) | 8,791,733.57 | | 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 (excluding effective hedge accounting related to normal business operations) | 3,623,169.34 | | Other non-operating income and expenses apart from the above items | 187,517.95 | | Other profit and loss items conforming to the definition of non-recurring gains and losses (mainly input tax additional deduction) | 26,523,789.68 | | Total | 39,126,210.54 | - Total non-recurring gains and losses amounted to CNY 39.1262 million, of which input tax deduction contributed CNY 26.5238 million[28] Section III Management Discussion and Analysis I. Industry and Main Business Overview During the Reporting Period This section elaborates on the Ethernet switch chip industry, the company's main business and product application areas, its unique Fabless operating model, and diversified sales strategies (I) Industry Overview The company operates in the integrated circuit design industry within new-generation information technology, where the Ethernet switch chip sector is highly concentrated with high technical barriers, and the company holds a first-mover and leading position in the domestic market - The company's main business is the R&D, design, and sales of Ethernet switch chips and related products, belonging to the "Integrated Circuit Design" sector within the "New Generation Information Technology Industry"[30] - The Ethernet switch chip industry is highly concentrated with high technical, customer, and capital barriers, and a low degree of domestic localization, where the company holds a first-mover advantage and market leading position in China[30] (II) Main Business Operations The company focuses on independent R&D of Ethernet switch chips, covering mid-to-high-end markets, supporting 100Gbps to 25.6Tbps switching capacity and 100M to 800G port rates, widely used in enterprise, carrier, data center, and industrial networks - The company's main business is the R&D, design, and sales of Ethernet switch chips and related products, adhering to independent R&D, with products covering from access layer to core layer Ethernet switch products[31] - The company's products are positioned in the mid-to-high-end market, covering 100Gbps to 25.6Tbps switching capacity and 100M to 800G port rates, applied in enterprise, carrier, data center, and industrial networks[32] - High-end flagship chips (12.8Tbps and 25.6Tbps) have entered the market promotion and gradual application stage, supporting a maximum port rate of 800G, equipped with advanced features such as enhanced secure interconnection, visualization, and programmability[32] (III) Business Model The company operates a Fabless model for Ethernet switch chip design, R&D, and sales, outsourcing wafer manufacturing, packaging, and testing; chip modules and complete switch production are entrusted to hardware processors, with a new authorized licensing sales model - The company adopts a Fabless operating model, responsible for integrated circuit design, quality control, and sales, while wafer manufacturing, packaging, and testing are outsourced to professional foundries[33] - A new authorized licensing sales model has been introduced, where the company charges royalties to licensees, permitting them to purchase the company's chip products and sell them to customers[33] - Chip modules and complete Ethernet switch production are entrusted to hardware processors, sold to customers through direct sales or distribution, and followed by after-sales services[33][34] II. Discussion and Analysis of Operations During the reporting period, the company's total assets and net assets slightly decreased, and operating revenue declined year-on-year, but the net profit attributable to shareholders and non-recurring net profit significantly narrowed losses, mainly due to sustained high R&D investment, market expansion, and optimized supply chain management Operating Overview for H1 2025 | Indicator | Amount (CNY 10,000) | YoY Change | | :--- | :--- | :--- | | Total Assets | 258,076.29 | -3.06% | | Net Assets | 233,121.59 | -0.09% | | Operating Revenue | 50,795.40 | -4.56% | | Net Profit Attributable to Shareholders of Listed Company | -2,368.91 | Loss reduced by 58.36% | | Net Profit Attributable to Shareholders of Listed Company After Deducting Non-Recurring Gains and Losses | -6,281.53 | Loss reduced by 21.62% | - The company maintained high R&D investment, with R&D expenses of CNY 239.2475 million, a year-on-year increase of 6.76%, accounting for 47.10% of operating revenue, to build long-term competitiveness[35] - The company actively expanded markets, enriched its product matrix, optimized performance and quality, and continuously optimized its supply chain investment layout, strengthening cooperation with suppliers to ensure production capacity and product delivery[36] - The company continuously advanced core capability building, improved its quality system, informatization construction, and talent hierarchy development, while strengthening compliance and risk management systems[37] III. Analysis of Core Competitiveness During the Reporting Period This section comprehensively analyzes the company's core competitiveness, including leading technological advantages, first-mover advantage in the domestic market, stable customer resources, localization advantages, and a professional talent team, detailing core technologies and R&D progress during the reporting period (I) Core Competitiveness Analysis The company possesses leading technological advantages in high performance, flexibility, high security, and visualization, with product performance reaching international competitor levels, and holds a first-mover advantage, strong customer stickiness, localized service advantages, and an experienced R&D team in the domestic Ethernet switch chip market - The company's products have technological advantages in high performance, flexibility, high security, and visualization, supporting more port rates, and leading in features such as FlexE, programmable tunnels, and OAM/APS engines[38][39] - The company has a first-mover advantage in the domestic Ethernet switch chip sector, with years of R&D investment and multiple technological iterations, its products have been widely applied in downstream industries, forming strong customer stickiness[40][41] - The company has established long-term cooperative relationships with mainstream domestic communication and information technology manufacturers, with products widely applied in major domestic carriers and industries such as finance and government, forming an industrial ecosystem through localized services and cultural recognition[42][43] - The company boasts a core technical team composed of multiple industry experts with over 15 years of integrated circuit design experience, a stable R&D team with a reasonable talent hierarchy, ensuring long-term development through equity and compensation incentives[44][45] (III) Core Technologies and R&D Progress The company possesses core technologies in high-performance switching architecture, port design, multi-feature pipeline, tenon-and-mortise programmability, secure interconnection, visualization, low latency and determinism, enhanced engines, verification technology, and SDK compatibility, having applied for/obtained multiple intellectual properties during the reporting period, and continuously investing heavily in R&D projects such as core switching chips - The company's core technologies include high-performance switching architecture (single/multi-core, supporting 12.8Tbps/25.6Tbps and higher performance), high-performance port design (supporting 100M to 800G multi-rate), multi-feature pipeline technology (covering multi-scenario applications), and chip tenon-and-mortise programmable technology (supporting SDN, edge computing, SRv6, etc)[46][47][48][49] - Other core technologies include switch chip secure interconnection technology (zero-trust security classification, cloud-network interconnection security), switch chip visualization technology (statistical, flow, path data visualization), network low-latency and deterministic technology (TSN and FlexE), high-performance enhanced engine technology for specific scenarios (OAM engine, wireless AC offload engine), Ethernet switch chip verification technology, and SDK kernel and interface compatibility technology[50][51][52][53][54][55][56][57] - During the reporting period, the company applied for 43 new intellectual properties (all invention patents) and obtained 35 new intellectual properties (including 32 invention patents). As of June 30, 2025, a total of 1,465 intellectual properties have been applied for, and 723 have been obtained[58][59] R&D Investment (January-June 2025) | Indicator | Current Period (CNY 10,000) | Prior Period (CNY 10,000) | Change (%) | | :--- | :--- | :--- | :--- | | Expensed R&D Investment | 23,924.75 | 22,410.80 | 6.76 | | Total R&D Investment | 23,924.75 | 22,410.80 | 6.76 | | Total R&D Investment as Proportion of Operating Revenue (%) | 47.10 | 42.11 | Increased by 4.99 percentage points | - The company's R&D projects include high-performance core switch chip projects (completed 2.4T-25.6T series R&D, 12.8T/25.6T products entering market promotion), aggregation and access switch chip projects (most already mass-produced), chip basic design platform R&D projects, SDN control protocol stack solution projects, network interface chip cooperation projects, and high-performance, flexibility, high security, visualization projects[63][64] R&D Personnel (January-June 2025) | Indicator | Current Period | Prior Period | | :--- | :--- | :--- | | Number of Company R&D Personnel (persons) | 405 | 378 | | Proportion of R&D Personnel to Total Company Personnel (%) | 75.84 | 74.26 | | Total R&D Personnel Compensation (CNY 10,000) | 12,268.88 | 10,739.12 | | Average R&D Personnel Compensation (CNY 10,000) | 29.71 | 27.54 | | Proportion of Master's Degree Holders | 51.85% | - | | Proportion of Bachelor's Degree Holders | 47.41% | - | | Proportion Under 30 Years Old (excluding 30) | 49.38% | - | IV. Risk Factors This section details the various risks faced by the company, including unprofitability, R&D not meeting expectations, loss of core technical personnel, high concentration of suppliers and customers, uncertainty of national project funding, fluctuations in operating performance, inventory impairment, global trade frictions, macroeconomic fluctuations, and exchange rate fluctuations - The company has not yet achieved profitability and has accumulated uncompensated losses, with net profit attributable to shareholders of -CNY 23.6891 million in H1 2025, mainly due to continuous high R&D investment[4][67] - Risks exist regarding R&D not meeting expectations and loss of core technical personnel, which may affect the company's long-term development and performance[68][70] - The company has a high concentration of suppliers and customers; adverse changes in major suppliers or customers could negatively impact the company's production, operations, and performance[71][72] - There is a risk that national project funding may not be fully disbursed, potentially leading to invested funds being reclassified as expenses and affecting operating performance[73] - The company's operating performance is subject to fluctuation risks, influenced by macroeconomic conditions, industry competition, technological iteration, raw material prices, market demand, and other factors[74] - The significant inventory amount (CNY 552.1341 million, accounting for 21.39% of total assets) at period-end poses a risk of impairment[75] - Global trade friction risks, with the company and its subsidiaries listed on the U.S. Export Administration Regulations "Entity List," may impact new product R&D and supply chain assurance[77] - Macroeconomic fluctuations and exchange rate fluctuations may adversely affect the company's operating performance and profit levels[78][79] V. Key Operating Performance During the Reporting Period This section provides a detailed analysis of the company's key operating performance during the reporting period, including changes in financial statement items for its main business, the impact of non-main business on profit, asset and liability status, and analysis of investments and major controlled/invested companies - During the reporting period, the company achieved operating revenue of CNY 507.9540 million, a year-on-year decrease of 4.56%; net profit attributable to shareholders was -CNY 23.6891 million, a reduction in loss of CNY 33.1981 million compared to the same period last year[80] (I) Main Business Analysis Operating revenue decreased by 4.56% year-on-year, operating costs decreased by 18.65%, and financial expenses significantly decreased by 423.11%, mainly due to reduced interest expenses. Net cash flow from operating activities significantly increased, and net cash flow from investing activities substantially grew Analysis of Changes in Financial Statement Items (January-June 2025) | Item | Current Period (CNY) | Prior Period (CNY) | Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 507,954,007.61 | 532,196,047.42 | -4.56 | | Operating Costs | 270,745,699.63 | 332,821,308.97 | -18.65 | | Selling Expenses | 24,543,287.99 | 20,747,585.75 | 18.29 | | Administrative Expenses | 31,581,946.27 | 29,155,106.13 | 8.32 | | Financial Expenses | -3,731,283.02 | 1,154,788.11 | -423.11 | | R&D Expenses | 239,247,539.39 | 224,107,971.76 | 6.76 | | Net Cash Flow from Operating Activities | 138,784,495.54 | -36,114,164.79 | Not Applicable | | Net Cash Flow from Investing Activities | 571,221,031.62 | 49,185,053.12 | 1,061.37 | | Net Cash Flow from Financing Activities | -322,601.96 | -28,885,869.27 | Not Applicable | - Changes in financial expenses were primarily due to a decrease in interest expenses during the reporting period[81] - Changes in net cash flow from operating activities were mainly due to a year-on-year decrease in payments for goods and an increase in sales collections during the reporting period[82] - Changes in net cash flow from investing activities were primarily due to the maturity of the company's structured deposits during the reporting period[82] - Changes in net cash flow from financing activities were mainly due to loan repayments in the same period last year, with no such expenditures in the current reporting period[83] (II) Explanation of Significant Profit Changes Caused by Non-Main Business Non-main business significantly impacted total profit this period, mainly government grants and input tax deductions included in other income, totaling CNY 34.75 million Impact of Non-Main Business on Total Profit (January-June 2025) | Item | Amount (CNY) | Proportion of Total Profit | Explanation | Sustainability | | :--- | :--- | :--- | :--- | :--- | | Other Income | 34,750,023.25 | -146.69% | Mainly government grants related to daily operations and input tax additional deduction | No | (III) Analysis of Assets and Liabilities At the end of the reporting period, the company's monetary funds significantly increased by 105.85%, trading financial assets decreased by 92.23%, prepayments increased by 37.04%, intangible assets increased by 35.23%, employee compensation payable decreased by 41.83%, and other current liabilities decreased by 32.74% Changes in Assets and Liabilities (as of June 30, 2025) | Item Name | Current Period End (CNY) | Proportion of Total Assets at Period End (%) | Prior Year End (CNY) | Proportion of Total Assets at Prior Year End (%) | YoY Change at Period End (%) | Explanation | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Monetary Funds | 1,381,846,414.88 | 53.54 | 671,282,995.20 | 25.22 | 105.85 | Mainly due to the company's collection of matured cash management products during the reporting period | | Trading Financial Assets | 50,011,986.30 | 1.94 | 643,847,421.05 | 24.19 | -92.23 | Mainly due to the company's collection of matured cash management products during the reporting period | | Prepayments | 130,739,781.77 | 5.07 | 95,400,823.80 | 3.58 | 37.04 | Mainly due to an increase in prepayments to suppliers during the reporting period | | Intangible Assets | 14,339,880.48 | 0.56 | 10,604,153.26 | 0.40 | 35.23 | Mainly due to the acquisition of intangible assets during the reporting period | | Employee Compensation Payable | 30,106,557.78 | 1.17 | 51,753,368.39 | 1.94 | -41.83 | Mainly due to the payment of last year's year-end bonus during the reporting period | | Non-Current Liabilities Due Within One Year | - | - | 318,547.58 | 0.01 | -100.00 | Mainly due to the payment of rental for leased properties during the reporting period | | Other Current Liabilities | 9,937,846.46 | 0.39 | 14,774,305.66 | 0.55 | -32.74 | Mainly due to the gradual delivery of goods corresponding to customer prepayments during the reporting period | (IV) Investment Analysis During this period, the company's purchases of trading financial assets amounted to CNY 773 million, sales/redemptions amounted to CNY 1.368 billion, and the period-end balance was CNY 50.012 million, a significant decrease from the beginning of the period Financial Assets Measured at Fair Value (January-June 2025) | Asset Category | Beginning Balance (CNY) | Fair Value Change in Current Period (CNY) | Purchases in Current Period (CNY) | Sales/Redemptions in Current Period (CNY) | Ending Balance (CNY) | | :--- | :--- | :--- | :--- | :--- | :--- | | Trading Financial Assets | 643,847,421.05 | 950,594.91 | 773,200,000.00 | 1,367,986,029.66 | 50,011,986.30 | | Receivables Financing | 8,625,196.46 | - | - | - | 5,386,642.00 | | Total | 652,472,617.51 | 950,594.91 | 773,200,000.00 | 1,367,986,029.66 | 55,398,628.30 | - The investment amount for the reporting period was CNY 30 million, a 50% decrease compared to the same period last year[90] (VI) Analysis of Major Controlled and Invested Companies The company has three wholly-owned subsidiaries: Nanjing Centec, Centec Technology, and Beijing Centec. Nanjing Centec and Beijing Centec are profitable, while Centec Technology remains in a loss-making state Operating Performance of Major Subsidiaries (January-June 2025) | Company Name | Registered Capital (CNY) | Total Assets (CNY) | Net Assets (CNY) | Operating Revenue (CNY) | Net Profit (CNY) | | :--- | :--- | :--- | :--- | :--- | :--- | | Nanjing Centec Communications Co., Ltd. | 140,000,000.00 | 45,574,850.72 | 41,619,577.37 | 23,470,968.03 | 1,223,667.82 | | Suzhou Centec Technology Co., Ltd. | 50,000,000.00 | 38,491,176.41 | -207,524,009.73 | 2,196,460.16 | -11,716,350.53 | | Beijing Centec Communications Co., Ltd. | 100,000,000.00 | 51,128,596.56 | 20,772,025.58 | 34,882,144.65 | 1,469,137.10 | Section IV Corporate Governance, Environment, and Society I. Changes in Directors, Supervisors, Senior Management, and Core Technical Personnel This section explains the criteria for identifying the company's core technical personnel, ensuring standardization in technology R&D and talent management - The criteria for identifying the company's core technical personnel include: no less than 15 years of R&D experience in the integrated circuit industry, employed by the company for no less than 10 years; master's degree or above, with professional capabilities matching the business; holding a director-level or above position; leading or deeply participating in core R&D work; making significant contributions to core technology and product R&D; and possessing the ability to coordinate and lead R&D teams[95] II. Profit Distribution or Capital Reserve Conversion Plan The company's board of directors resolved "no" profit distribution plan or capital reserve conversion to share capital plan for this semi-annual period - The company has no profit distribution plan or capital reserve conversion to share capital plan for this semi-annual period[6][96] III. Overview and Impact of Company Equity Incentive Plans, Employee Stock Ownership Plans, or Other Employee Incentive Measures This section discloses the basic information of the company's employee stock ownership plans, including the names of direct and indirect employee stock ownership platforms, the number and proportion of shares held, and the types of employees involved Basic Information of Employee Stock Ownership Platforms | No. | Direct Employee Stock Ownership Platform | Indirect Employee Stock Ownership Platform | Directly Held Company Shares (10,000 shares) | Shareholding Proportion in Company | Employee Type Involved | | :--- | :--- | :--- | :--- | :--- | :--- | | 1 | Suzhou Junmai | Junyong No. 1 | 4,532.2617 | 1.00% | On-the-job employees | | 2 | - | Junyong No. 2 | - | 0.93% | On-the-job employees | | 3 | - | Junyong No. 3 | - | 0.94% | On-the-job employees | | 4 | - | Junyong No. 4 | - | 0.98% | On-the-job employees | | 5 | - | Junyong No. 5 | - | 0.95% | On-the-job employees | | 6 | - | Junyong No. 6 | - | 0.98% | On-the-job employees | | 7 | - | Junyong No. 7 | - | 0.94% | On-the-job employees | | 8 | - | Junyong No. 8 | - | 0.99% | On-the-job employees | | 9 | - | Junyong No. 9 | - | 0.98% | On-the-job employees | | 10 | - | Junyong No. 10 | - | 0.97% | On-the-job employees | | 11 | - | Junyong No. 11 | - | 0.92% | On-the-job employees | | 12 | - | Junyong No. 12 | - | 0.46% | On-the-job employees | | 13 | Yonghong No. 1 | - | 381.9492 | 0.93% | On-the-job, resigned employees | | 14 | Yonghong No. 2 | - | 382.6746 | 0.93% | On-the-job, resigned employees | | 15 | Yonghong No. 3 | - | 380.3722 | 0.93% | On-the-job, resigned employees | | 16 | Yonghong No. 4 | - | 380.0745 | 0.93% | On-the-job, resigned employees | | Total | - | - | 6,057.3322 | 14.77% | - | Section V Significant Matters I. Fulfillment of Commitments This section details the fulfillment of commitments made by the company's actual controllers, shareholders, related parties, and the company regarding its initial public offering, including share lock-up, reduction, price stabilization, fraudulent issuance repurchase, immediate return compensation, profit distribution, reduction of related-party transactions, and resolution of horizontal competition, also explaining the extension of share lock-up periods - The company and relevant shareholders (e.g., China Zhenhua, China Electronics, Centec, Suzhou Junmai, etc.) made multiple commitments regarding share lock-up, reduction, price stabilization, fraudulent issuance repurchase, compensation for diluted immediate returns, profit distribution, reduction of related-party transactions, and resolution of horizontal competition, all of which were strictly fulfilled during the reporting period[100][101][102] - The company's stock was listed on September 14, 2023; due to the closing price falling below the offering price for 20 consecutive trading days, the condition for automatic 6-month extension of the share lock-up period for relevant shareholders was triggered[141] X. Significant Related-Party Transactions This section discloses the company's transactions with related parties in daily operations, including procurement of goods/acceptance of services and sales of goods/provision of services, and forecasts the annual related-party transaction amount for 2025 (I) Related-Party Transactions Related to Daily Operations The company has approved the resolution on the estimated annual related-party transaction amount for 2025, and engaged in goods procurement and sales transactions with related parties during the reporting period - The company's board meeting on December 5, 2024, and the shareholders' meeting on December 26, 2024, approved the "Proposal on Estimating the Annual Related-Party Transaction Amount for 2025"[142] Related-Party Transactions for Procurement of Goods/Acceptance of Services (January-June 2025) | Related Party | Related Transaction Content | Current Period Amount (CNY) | Prior Period Amount (CNY) | | :--- | :--- | :--- | :--- | | Guizhou Zhenhua Hualian Electronics Co., Ltd. | Material Procurement | 6,371.68 | 10,486.73 | | Shenzhen Zhenhua Fu Electronics Co., Ltd. | Material Procurement | 26,123.88 | 109,615.95 | | China Zhenhua Group Yunke Electronics Co., Ltd. | Material Procurement | 69,899.17 | 46,120.36 | | China Zhenhua Group Yongguang Electronics Co., Ltd. | Material Procurement | - | 619.47 | | Total | - | 102,394.73 | 166,842.51 | Related-Party Transactions for Sales of Goods/Provision of Services (January-June 2025) | Related Party | Related Transaction Content | Current Period Amount (CNY) | Prior Period Amount (CNY) | | :--- | :--- | :--- | :--- | | Shenzhen CEC Port Technology Co., Ltd. | Sales of Goods | 191,855,132.40 | 143,634,357.53 | | CEAC International Limited | Sales of Goods | 39,759,758.65 | 85,485,910.84 | | Maipu Communication Technology Co., Ltd. | Sales of Goods | 7,309,864.15 | 20,220,584.95 | | Chengdu Huawei Electronics Technology Co., Ltd. | Sales of Goods | - | 8,849.56 | | Total | - | 238,924,755.20 | 249,349,702.88 | XII. Explanation of Progress in Use of Raised Funds This section details the overall use of the company's raised funds, specifics and progress of investment projects, and other uses of raised funds during the reporting period, including cash management of idle funds and completion of investment projects (I) Overall Use of Raised Funds The company's initial public offering raised a total of CNY 2.133 billion, with a net amount of CNY 2.004 billion, including CNY 1.004 billion in over-raised funds. As of the end of the reporting period, a cumulative total of CNY 1.587 billion has been invested, with an investment progress of 79.21% Overall Use of Raised Funds (as of the end of the reporting period) | Source of Raised Funds | Total Raised Funds (CNY 10,000) | Net Raised Funds (CNY 10,000) | Total Investment Committed in Prospectus (CNY 10,000) | Total Over-Raised Funds (CNY 10,000) | Cumulative Raised Funds Invested as of Period End (CNY 10,000) | Cumulative Raised Funds Investment Progress as of Period End (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Initial Public Offering | 213,300.00 | 200,421.58 | 100,000.00 | 100,421.58 | 158,745.65 | 79.21 | (II) Details of Investment Projects The company's investment projects include the New Generation Network Switch Chip R&D and Mass Production Project, Router-Switch Converged Network Chip R&D Project, and Supplementary Working Capital. The "New Generation Network Switch Chip R&D and Mass Production Project" has been completed and reached its intended usable state Details of Investment Projects (as of the end of the reporting period) | Project Name | Planned Investment of Raised Funds (CNY 10,000) | Amount Invested This Year (CNY 10,000) | Cumulative Raised Funds Invested as of Period End (CNY 10,000) | Cumulative Investment Progress as of Period End (%) | Date Project Reached Intended Usable State | Is Project Completed | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | New Generation Network Switch Chip R&D and Mass Production Project | 60,000.00 | 11,995.48 | 58,963.13 | 98.27 | June 2025 | Yes | | Router-Switch Converged Network Chip R&D Project | 35,000.00 | 4,565.34 | 11,782.52 | 33.66 | November 2025 | No | | Supplementary Working Capital | 28,000.00 | 0.00 | 28,000.00 | 100.00 | Not Applicable | Yes | | Over-Raised Funds | 77,421.58 | 30,000.00 | 60,000.00 | 77.50 | Not Applicable | No | (IV) Other Uses of Raised Funds During the Reporting Period The company used a portion of idle raised funds for cash management, with a period-end balance of CNY 325 million. Concurrently, the company used its own funds to pay for investment projects and subsequently replaced them with raised funds of CNY 191 million. The "New Generation Network Switch Chip R&D and Mass Production Project" has been completed - The company used a portion of idle raised funds (including over-raised funds) not exceeding CNY 800 million for cash management; as of June 30, 2025, the cash management balance was CNY 325.39 million[154][158] - The company used its own funds to pay for investment projects and subsequently replaced them with raised funds; as of June 30, 2025, the replacement amount was CNY 191.2808 million[155] - The investment project "New Generation Network Switch Chip R&D and Mass Production Project" has been completed and reached its intended usable state, and no surplus of raised funds is expected[156][159] Section VI Share Changes and Shareholder Information I. Share Capital Changes During the reporting period, there were no changes in the company's total ordinary shares or share capital structure - During the reporting period, there were no changes in the company's total ordinary shares or share capital structure[162] II. Shareholder Information This section discloses the total number of shareholders, the top ten shareholders, and the top ten shareholders with unrestricted shares as of the end of the reporting period, and explains the associated relationships between shareholders - As of the end of the reporting period, the company had a total of 7,180 ordinary shareholders[164] Top Ten Shareholders' Holdings (as of the end of the reporting period) | Shareholder Name | Shares Held at Period End (shares) | Proportion (%) | Restricted Shares Held (shares) | Shareholder Type | | :--- | :--- | :--- | :--- | :--- | | China Zhenhua Electronics Group Co., Ltd. | 87,172,346 | 21.26 | 87,172,346 | State-owned Legal Person | | National Integrated Circuit Industry Investment Fund Co., Ltd. | 70,049,269 | 17.09 | 0 | State-owned Legal Person | | China-Singapore Suzhou Industrial Park Venture Capital Co., Ltd. | 46,970,515 | 11.46 | 0 | State-owned Legal Person | | Suzhou Junmai Enterprise Management Partnership (Limited Partnership) | 45,322,617 | 11.05 | 45,322,617 | Other | | China Electronics Corporation | 30,399,698 | 7.41 | 30,399,698 | State-owned Legal Person | | Centec Networks, Inc. | 22,815,968 | 5.56 | 22,815,968 | Overseas Legal Person | | CEAC Xinzhe (Beijing) Investment Management Co., Ltd. - Beijing CEAC Development Equity Investment Fund Partnership (Limited Partnership) | 15,891,719 | 3.88 | 0 | Other | | Guoxin Investment Co., Ltd. | 6,344,512 | 1.55 | 0 | State-owned Legal Person | | CEAC Gold Investment Holdings Co., Ltd. | 6,046,883 | 1.47 | 6,046,883 | State-owned Legal Person | | Heshun Xia Zhuang (Hong Kong) Investment Co., Ltd. | 4,264,231 | 1.04 | 0 | Overseas Legal Person | - China Zhenhua Electronics Group Co., Ltd., CEAC Gold Investment Holdings Co., Ltd., and China Electronics Corporation are parties acting in concert. Suzhou Junmai Enterprise Management Partnership (Limited Partnership) and Centec Networks, Inc. are entities controlled by Director and General Manager SUN JIANYONG, and are parties acting in concert[167] - The lock-up period for shares held directly or indirectly by China Zhenhua, China Electronics, Suzhou Junmai, Centec, Yonghong No. 2, Yonghong No. 1, Yonghong No. 3, and Yonghong No. 4 was automatically extended by 6 months because the company's stock closing price fell below the offering price for 20 consecutive trading days[171] (IV) Strategic Investors or General Legal Persons Becoming Top Ten Shareholders Due to New Share/Depositary Receipt Placement This section discloses information on strategic investors who became top ten shareholders due to new share placement Strategic Investor Information | Name of Strategic Investor or General Legal Person | Agreed Shareholding Start Date | Agreed Shareholding End Date | | :--- | :--- | :--- | | CEAC Gold Investment Holdings Co., Ltd. | 2023/9/14 | Not Applicable | Section VII Bond-Related Information I. Corporate Bonds (Including Enterprise Bonds) and Non-Financial Enterprise Debt Financing Instruments During the reporting period, the company had no corporate bonds (including enterprise bonds) or non-financial enterprise debt financing instruments - During the reporting period, the company had no corporate bonds (including enterprise bonds) or non-financial enterprise debt financing instruments[176] II. Convertible Corporate Bonds During the reporting period, the company had no convertible corporate bonds - During the reporting period, the company had no convertible corporate bonds[176] Section VIII Financial Report I. Audit Report This semi-annual report has not been audited - This semi-annual report has not been audited[5][178] II. Financial Statements This section provides the company's consolidated and parent company balance sheets, income statements, cash flow statements, and statements of changes in owners' equity for the first half of 2025, comprehensively presenting the company's financial position and operating results Consolidated Balance Sheet As of June 30, 2025, the company's consolidated total assets were CNY 2.581 billion, total liabilities were CNY 250 million, and owners' equity attributable to the parent company was CNY 2.331 billion Key Data from Consolidated Balance Sheet (as of June 30, 2025) | Item | 2025/6/30 (CNY) | 2024/12/31 (CNY) | | :--- | :--- | :--- | | Monetary Funds | 1,381,846,414.88 | 671,282,995.20 | | Trading Financial Assets | 50,011,986.30 | 643,847,421.05 | | Inventories | 552,134,085.70 | 735,391,692.22 | | Total Current Assets | 2,283,450,648.42 | 2,348,884,067.03 | | Total Non-Current Assets | 297,312,266.07 | 313,226,963.47 | | Total Assets | 2,580,762,914.49 | 2,662,111,030.50 | | Total Current Liabilities | 211,177,960.99 | 282,873,531.76 | | Total Non-Current Liabilities | 38,369,033.90 | 45,954,255.47 | | Total Liabilities | 249,546,994.89 | 328,827,787.23 | | Total Owners' Equity Attributable to Parent Company | 2,331,215,919.60 | 2,333,283,243.27 | | Total Liabilities and Owners' Equity | 2,580,762,914.49 | 2,662,111,030.50 | Parent Company Balance Sheet As of June 30, 2025, the company's parent company total assets were CNY 2.930 billion, total liabilities were CNY 243 million, and total owners' equity was CNY 2.686 billion Key Data from Parent Company Balance Sheet (as of June 30, 2025) | Item | 2025/6/30 (CNY) | 2024/12/31 (CNY) | | :--- | :--- | :--- | | Monetary Funds | 1,297,831,446.97 | 621,909,427.90 | | Trading Financial Assets | 50,011,986.30 | 643,847,421.05 | | Inventories | 552,134,085.70 | 735,391,692.22 | | Total Current Assets | 2,449,664,670.62 | 2,519,422,284.14 | | Total Non-Current Assets | 479,950,497.63 | 466,303,464.94 | | Total Assets | 2,929,615,168.25 | 2,985,725,749.08 | | Total Current Liabilities | 216,017,696.56 | 271,695,243.63 | | Total Non-Current Liabilities | 27,205,700.57 | 34,654,255.47 | | Total Liabilities | 243,223,397.13 | 306,349,499.10 | | Total Owners' Equity | 2,686,391,771.12 | 2,679,376,249.98 | | Total Liabilities and Owners' Equity | 2,929,615,168.25 | 2,985,725,749.08 | Consolidated Income Statement For January-June 2025, the company's consolidated total operating revenue was CNY 508 million, net profit was -CNY 23.6891 million, and basic earnings per share was -CNY 0.06/share Key Data from Consolidated Income Statement (January-June 2025) | Item | 2025 Half-Year (CNY) | 2024 Half-Year (CNY) | | :--- | :--- | :--- | | Total Operating Revenue | 507,954,007.61 | 532,196,047.42 | | Total Operating Costs | 564,219,226.16 | 608,939,797.30 | | Total Profit | -23,689,074.15 | -56,887,124.64 | | Net Profit | -23,689,074.15 | -56,887,124.64 | | Net Profit Attributable to Parent Company Shareholders | -23,689,074.15 | -56,887,124.64 | | Basic Earnings Per Share (CNY/share) | -0.06 | -0.14 | | Diluted Earnings Per Share (CNY/share) | -0.06 | -0.14 | Parent Company Income Statement For January-June 2025, the company's parent company operating revenue was CNY 503 million, and net profit was -CNY 14.6062 million Key Data from Parent Company Income Statement (January-June 2025) | Item | 2025 Half-Year (CNY) | 2024 Half-Year (CNY) | | :--- | :--- | :--- | | Operating Revenue | 502,784,662.65 | 531,636,714.21 | | Operating Costs | 270,112,599.20 | 332,301,718.71 | | Total Profit | -14,606,229.34 | -28,855,587.87 | | Net Profit | -14,606,229.34 | -28,855,587.87 | Consolidated Cash Flow Statement For January-June 2025, the company's consolidated net cash flow from operating activities was CNY 139 million, net cash flow from investing activities was CNY 571 million, and net cash flow from financing activities was -CNY 0.3226 million Key Data from Consolidated Cash Flow Statement (January-June 2025) | Item | 2025 Half-Year (CNY) | 2024 Half-Year (CNY) | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 138,784,495.54 | -36,114,164.79 | | Net Cash Flow from Investing Activities | 571,221,031.62 | 49,185,053.12 | | Net Cash Flow from Financing Activities | -322,601.96 | -28,885,869.27 | | Net Increase in Cash and Cash Equivalents | 710,563,419.68 | -15,381,088.75 | | Ending Balance of Cash and Cash Equivalents | 1,381,846,414.88 | 1,015,708,207.01 | Parent Company Cash Flow Statement For January-June 2025, the company's parent company net cash flow from operating activities was CNY 153 million, net cash flow from investing activities was CNY 522 million, and net cash flow from financing activities was -CNY 0.1808 million Key Data from Parent Company Cash Flow Statement (January-June 2025) | Item | 2025 Half-Year (CNY) | 2024 Half-Year (CNY) | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 152,875,102.97 | -10,147,833.45 | | Net Cash Flow from Investing Activities | 522,347,231.62 | 9,948,450.38 | | Net Cash Flow from Financing Activities | -180,810.00 | -27,846,205.20 | | Net Increase in Cash and Cash Equivalents | 675,922,019.07 | -27,611,696.08 | | Ending Balance of Cash and Cash Equivalents | 1,297,831,446.97 | 982,329,485.63 | Consolidated Statement of Changes in Owners' Equity For January-June 2025, the company's consolidated total owners' equity decreased by CNY 2.0673 million, mainly due to negative comprehensive income, while equity increased from share-based payments Key Data from Consolidated Statement of Changes in Owners' Equity (January-June 2025) | Item | Paid-in Capital (or Share Capital) (CNY) | Capital Reserve (CNY) | Surplus Reserve (CNY) | Retained Earnings (CNY) | Subtotal of Owners' Equity Attributable to Parent Company (CNY) | | :--- | :--- | :--- | :--- | :--- | :--- | | Beginning Balance | 410,000,000.00 | 2,039,221,437.12 | 16,005,622.48 | -131,943,816.33 | 2,333,283,243.27 | | Changes in Current Period | 0 | 21,621,750.48 | 0 | -23,689,074.15 | -2,067,323.67 | | Ending Balance | 410,000,000.00 | 2,060,843,187.60 | 16,005,622.48 | -155,632,890.48 | 2,331,215,919.60 | Parent Company Statement of Changes in Owners' Equity For January-June 2025, the company's parent company total owners' equity increased by CNY 7.0155 million, mainly due to an increase from share-based payments, while comprehensive income was negative Key Data from Parent Company Statement of Changes in Owners' Equity (January-June 2025) | Item | Paid-in Capital (or Share Capital) (CNY) | Capital Reserve (CNY) | Surplus Reserve (CNY) | Retained Earnings (CNY) | Total Owners' Equity (CNY) | | :--- | :--- | :--- | :--- | :--- | :--- | | Beginning Balance | 410,000,000.00 | 2,116,055,900.25 | 16,005,622.48 | 137,314,727.25 | 2,679,376,249.98 | | Changes in Current Period | 0 | 21,621,750.48 | 0 | -14,606,229.34 | 7,015,521.14 | | Ending Balance | 410,000,000.00 | 2,137,677,650.73 | 16,005,622.48 | 122,708,497.91 | 2,686,391,771.12 | III. Company's Basic Information This section provides an overview of the company, including its establishment date, registered capital, legal representative, registered address, unified social credit code, main business, and business scope - The company was wholly restructured from Centec Networks (Suzhou) Co., Ltd. on February 28, 2021, and listed on the STAR Market of the Shanghai Stock Exchange on September 14, 2023[213] - As of June 30, 2025, the company's registered capital was CNY 410 million, with Lv Baoli as the legal representative, and its main business is the R&D, design, and sales of Ethernet switch chips and related products[213][214] IV. Basis for Preparation of Financial Statements This section explains the basis for preparing the company's financial statements and the going concern assumption, ensuring compliance and reliability of financial reporting - The company's financial statements are prepared in accordance with the "Accounting Standards for Business Enterprises" issued by the Ministry of Finance, its application guidelines, interpretations, and other relevant regulations, as well as the China Securities Regulatory Commission's "Information Disclosure Rules for Companies Issuing Securities No. 15—General Provisions for Financial Reports" (Revised 2023)[215] - As of 12 months from the end of the reporting period, there are no matters or circumstances that raise significant doubts about the company's ability to continue as a going concern, and the financial statements are presented on a going concern basis[216] V. Significant Accounting Policies and Estimates This section details the significant accounting policies and estimates followed by the company in preparing its financial statements, covering financial instruments, receivables, inventories, contract assets, long-term equity investments, fixed assets, intangible assets, employee compensation, share-based payments, revenue, government grants, and deferred income tax - The company has formulated specific accounting policies and estimates for bad debt provisions for receivables, inventory impairment provisions, depreciation of fixed assets, amortization of intangible assets, etc., based on its actual production and operation characteristics[217] - The company classifies financial assets as measured at amortized cost, fair value through other comprehensive income, or fair value through profit or loss, and recognizes and measures them based on business model and contractual cash flow characteristics[227][228][229] - The company consistently measures loss provisions for notes receivable and accounts receivable at an amount equal to the expected credit losses over their entire lifetime, and categorizes them into different portfolios based on credit risk characteristics[236][237] - Inventories are measured at the lower of cost and net realizable value, with impairment provisions made for the difference when cost exceeds net realizable value for individual inventories/inventory categories[243] - The company's revenue recognition principle is to identify each distinct performance obligation within a contract and determine whether it is satisfied over time or at a point in time, recognizing revenue when the customer obtains control of the related goods or services[276][277] - Government grants are recognized when the conditions attached are met and the grants can be received; asset-related grants are recognized as deferred income, and income-related grants used to compensate for future period costs are recognized as deferred income, while those compensating for incurred costs are directly recognized in current profit or loss[283] VI. Taxation This section details the company's main tax types and rates, and discloses the various tax incentives enjoyed by the company, including immediate VAT refunds, additional deductions, high-tech enterprise preferential income tax rates, R&D expense super deduction, and extended loss carryforward periods Main Tax Types and Rates | Tax Type | Tax Basis | Tax Rate | | :--- | :--- | :--- | | Value-Added Tax | Sales of goods or provision of taxable services | 13%, 6%, 0% | | Urban Maintenance and Construction Tax | Amount of turnover tax payable | 7% | | Education Surcharge | Amount of turnover tax payable | 3% | | Local Education Surcharge | Amount of turnover tax payable | 2% | | Property Tax | 70.00% of original value of land and property | 1.20% | | Corporate Income Tax | Taxable income | 25%, 15% | - The company implements an immediate refund policy for VAT exceeding 3% on sales of self-developed software products[296] - From January 1, 2023, to December 31, 2027, the company can deduct an additional 15% of the current period's deductible input VAT from its payable VAT[296] - The company obtained high-tech enterprise status in 2024, enjoying a 15% preferential corporate income tax rate from 2024 for three years[296] - R&D expenses actually incurred by integrated circuit enterprises and industrial mother machine enterprises that do not form intangible assets and are expensed in the current period, can be super-deducted at 100% of the actual amount before tax from January 1, 2023, to December 31, 2027[296] - From January 1, 2024, to December 31, 2027, newly purchased equipment and appliances with a unit value not exceeding CNY 5 million are allowed to be expensed in the current period for corporate income tax calculation[297] - From January 1, 2018, the maximum carryforward period for uncompensated losses incurred by high-tech enterprises or technology-based small and medium-sized enterprises in the 5 years prior to the qualification year has been extended from 5 years to 10 years[298] VII. Notes to Consolidated Financial Statement Items This section provides detailed notes for each item in the consolidated financial statements, including monetary funds, trading financial assets, notes receivable, accounts receivable, receivables financing, prepayments, other receivables, inventories, right-of-use assets, intangible assets, long-term deferred expenses, other non-current assets, accounts payable, contract liabilities, employee compensation payable, taxes payable, other payables, non-current liabilities due within one year, other current liabilities, deferred income, share capital, capital reserves, retained earnings, operating revenue and costs, taxes and surcharges, selling expenses, administrative expenses, R&D expenses, financial expenses, other income, investment income, fair value change gains, credit impairment losses, asset impairment losses, non-operating income, non-operating expenses, cash flow statement items, and foreign currency monetary items Monetary Funds (as of June 30, 2025) | Item | Ending Balance (CNY) | Beginning Balance (CNY) | | :--- | :--- | :--- | | Cash on Hand | 6,239.36 | 54,665.14 | | Bank Deposits | 1,381,840,175.52 | 671,228,330.06 | | Total | 1,381,846,414.88 | 671,282,995.20 | Trading Financial Assets (as of June 30, 2025) | Item | Ending Balance (CNY) | Beginning Balance (CNY) | | :--- | :--- | :--- | | Structured Deposits | 50,011,986.30 | 643,847,421.05 | | Total | 50,011,986.30 | 643,847,421.05 | Ageing Analysis of Accounts Receivable (as of June 30, 2025) | Ageing | Ending Book Balance (CNY) | | :--- | :--- | | Within 1 year (inclusive) | 124,528,949.80 | | 1 to 2 years | 334,573.80 | | 2 to 3 years | 921,040.80 | | Over 3 years | 429,000.00 | | Total | 126,213,564.40 | Inventory Classification (as of June 30, 2025) | Item | Book Balance (CNY) | Inventory Impairment/Contract Cost Impairment (CNY) | Book Value (CNY) | | :--- | :--- | :--- | :--- | | Raw Materials | 205,569,377.88 | 6,240,947.15 | 199,328,430.73 | | Semi-finished Goods | 12,667,487.63 | 1,166,251.80 | 11,501,235.83 | | Finished Goods | 223,120,181.65 | 10,572,178.75 | 212,548,002.90 | | Goods in Transit | 9,288,848.55 | 785,085.92 | 8,503,762.63 | | Consigned Processing Materials | 119,975,644.80 | - | 119,975,644.80 | | Contract Costs | 277,008.81 | - | 277,008.81 | | Total | 570,898,549.32 | 18,764,463.62 | 552,134,085.70 | Operating Revenue and Costs (January-June 2025) | Item | Revenue (CNY) | Cost (CNY) | | :--- | :--- | :--- | | Main Business | 507,954,007.61 | 270,745,699.63 | | Total | 507,954,007.61 | 270,745,699.63 | R&D Expenses (January-June 2025) | Item | Current Period Amount (CNY) | | :--- | :--- | | Employee Compensation | 122,688,806.46 | | R&D Engineering Fees | 88,206,293.86 | | Share-Based Payments | 15,369,894.74 | | Amortization of Intangible Assets | 3,931,994.32 | | Depreciation | 5,475,772.29 | | Material Costs | 1,168,518.26 | | Travel Expenses | 927,026.77 | | Rental Fees | 1,043,245.00 | | Utilities | 236,203.44 | | Other | 199,784.25 | | Total | 239,247,539.39 | VIII. R&D Expenditures This section lists the company's R&D expenditures by nature of expense during the reporting period, totaling CNY 239 million, all of which were expensed R&D Expenditures by Nature of Expense (January-June 2025) | Item | Current Period Amount (CNY) | Prior Period Amount (CNY) | | :--- | :--- | :--- | | Employee Compensation | 122,688,806.46 | 107,391,205.59 | | R&D Engineering Fees | 88,206,293.86 | 75,630,818.17 | | Share-Based Payments | 15,369,894.74 | 15,069,845.06 | | Amortization of Intangible Assets | 3