汇中股份(300371) - 2025 Q2 - 季度财报

Part I Important Notice, Table of Contents, and Definitions Important Notice The board and senior management guarantee the report's accuracy, highlighting key risks; no semi-annual cash dividends or bonus shares are planned - The company's board of directors and senior management guarantee the truthfulness, accuracy, and completeness of the semi-annual report, with no false statements, misleading representations, or major omissions[7] - The company may face risks such as macroeconomic fluctuations, technological innovation and product iteration, changes in tax incentives and government subsidy policies, intensified market competition, and changes in the overseas market operating environment[8] - The company plans not to distribute cash dividends, issue bonus shares, or convert capital reserves into share capital[9] Table of Contents This section lists the report's overall structure, including eight main chapters and their corresponding page numbers Definitions This section defines key terms used in the report, covering company names, regulations, reporting period, core products, and technical concepts - The reporting period refers to January 1, 2025, to June 30, 2025[20] - Ultrasonic flow meters, ultrasonic heat meters, and ultrasonic water meters are core products, widely used in power, metallurgy, petroleum, chemical, water supply, and heating sectors[20] - Smart Water and Smart Heating refer to real-time sensing and management of urban water supply, drainage, and heating systems through online detection equipment, data collectors, and wireless networks, achieving refined and dynamic management[21] Part II Company Profile and Key Financial Indicators 1. Company Profile Huizhong Instrumentation Co., Ltd. (Stock Code: 300371) is listed on the Shenzhen Stock Exchange, with Zhang Lixin as its legal representative - Company stock abbreviation: Huizhong Shares, stock code: 300371, listed on: Shenzhen Stock Exchange[25] - The company's legal representative is Zhang Lixin[25] 2. Contact Person and Information This section provides contact details for the Board Secretary, Li Junjie, including address, phone, fax, and email for stakeholder communication - The Board Secretary's name is Li Junjie, contact phone numbers are 0315-3856690 and 15733300371, and email is 300371@hzyb.com[26] 3. Other Information The company's registered address, office address, website, and information disclosure channels remained unchanged during the reporting period - The company's registered address, office address, postal code, website, and email remained unchanged during the reporting period[27] - Information disclosure and storage locations remained unchanged during the reporting period, as detailed in the 2024 annual report[28] - The company's registration status remained unchanged during the reporting period, as detailed in the 2024 annual report[29] 4. Key Accounting Data and Financial Indicators The company achieved strong financial performance with significant year-on-year growth in revenue and net profit, and a positive shift in operating cash flow Key Accounting Data and Financial Indicators (Current Period vs Prior Year) | Indicator | Current Period (CNY) | Prior Period (CNY) | YoY Change | | :--- | :--- | :--- | :--- | | Operating Revenue | 213,379,366.15 | 140,688,385.74 | 51.67% | | Net Profit Attributable to Shareholders of Listed Company | 41,557,970.29 | 20,500,605.55 | 102.72% | | Net Profit Attributable to Shareholders of Listed Company (Excluding Non-Recurring Gains/Losses) | 36,335,165.93 | 16,344,603.59 | 122.31% | | Net Cash Flow from Operating Activities | 58,971,767.57 | -8,312,581.44 | 809.43% | | Basic Earnings Per Share (CNY/share) | 0.2091 | 0.1027 | 103.60% | | Diluted Earnings Per Share (CNY/share) | 0.2091 | 0.1027 | 103.60% | | Weighted Average Return on Net Assets | 3.68% | 1.87% | 1.81% | Key Accounting Data and Financial Indicators (Period-End vs Prior Year-End) | Indicator | Amount at Period-End (CNY) | Amount at Prior Year-End (CNY) | Change | | :--- | :--- | :--- | :--- | | Total Assets | 1,248,749,389.01 | 1,226,228,491.18 | 1.84% | | Net Assets Attributable to Shareholders of Listed Company | 1,141,158,825.77 | 1,116,049,143.60 | 2.25% | 5. Differences in Accounting Data under Domestic and International Accounting Standards The company reported no differences in net profit and net assets between Chinese and international/overseas accounting standards during the period - The company reported no differences in net profit and net assets between financial reports disclosed under International Accounting Standards and Chinese Accounting Standards during the reporting period[31] - The company reported no differences in net profit and net assets between financial reports disclosed under overseas accounting standards and Chinese Accounting Standards during the reporting period[32] 6. Non-Recurring Gains and Losses and Amounts Non-recurring gains and losses totaled CNY 5,222,804.36, primarily from government subsidies, fair value changes, and reversal of impairment provisions Non-Recurring Gains and Losses and Amounts | Item | Amount (CNY) | Explanation | | :--- | :--- | :--- | | Gains/Losses from Disposal of Non-Current Assets | 284.18 | | | Government Grants Included in Current Profit/Loss | 2,398,827.30 | | | Gains/Losses from Changes in Fair Value of Financial Assets and Liabilities Held by Non-Financial Enterprises, and Gains/Losses from Disposal of Financial Assets and Liabilities | 894,522.20 | | | Reversal of Impairment Provisions for Accounts Receivable Subject to Separate Impairment Testing | 1,723,760.00 | Primarily due to recovery of overdue payments from Hancheng City Heating Co., Ltd | | Other Non-Operating Income and Expenses Apart from the Above | 43,244.49 | | | Gains/Losses from Wealth Management Products | 1,099,188.41 | | | Less: Income Tax Impact | 925,839.42 | | | Impact on Minority Interests (After Tax) | 11,182.80 | | | Total | 5,222,804.36 | | - The company has not classified 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[35] Part III Management Discussion and Analysis 1. Main Business Activities During the Reporting Period Huizhong Instrumentation, a smart water and heating solutions provider, saw strong revenue and profit growth from overseas markets, offsetting domestic pressures - Huizhong Instrumentation is a provider of integrated smart water and smart heating solutions, offering "products + solutions + services", with main products including ultrasonic water meters, ultrasonic heat meters, ultrasonic flow meters, and related smart management systems and services[39] - During the reporting period, the company's sustained strategic deep cultivation led to overseas markets becoming a key engine for revenue and profit growth in the first half of the year[39] - The domestic market continued to experience project delays and consumption downgrades due to local fiscal pressures, but national policies like "equipment renewal" provided an offsetting effect[40] 1.1 Overview of the Water Supply Industry The water supply industry is transitioning to smart water management, driven by policies, with ultrasonic water meters gaining traction for leak control and efficiency - Water supply industry policies continue to emerge, covering "rural water renovation", "urban renewal", "water supply safety", and "smart water management", shifting the industry from "growth-driven" to "growth and existing assets combined"[46] - Ultrasonic water meters offer advantages such as low starting flow, wide range ratio, low energy consumption, and no mechanical wear, significantly outperforming mechanical water meters in micro-flow measurement, stability, and accuracy, improving measurement precision by approximately 3%[51] - National policies explicitly require reducing urban water supply network leakage rates to below 9% by 2025 and implementing smart water meter replacement for urban users, aiming for a 60% smart water meter penetration rate by 2025[51][54] - Rising water prices, such as adjustments in Nanjing, Shenzhen, and Guangzhou, not only encourage water conservation but also improve water plant profitability, increasing their willingness to replace with ultrasonic water meters[59] 1.2 Overview of the Heating Industry The heating industry is undergoing reform with policies promoting heat metering and smart heating systems, creating significant demand for smart heat meters - At the national level, scientific top-level design has been implemented for the heating industry, with policies continuously introduced to strengthen heat metering reform, intelligent equipment upgrades, and the establishment of smart heating systems[60] - The "Action Plan for Promoting Large-scale Equipment Renewal and Consumer Goods Trade-in" and "Action Plan for Accelerating Energy Saving and Carbon Reduction in the Building Sector" explicitly propose advancing heat metering and charging based on heat consumption, outlining a clear direction for industrial upgrading and reform in the heating industry[60] - China has 0.9-1.1 billion households with central heating, but the cumulative installation rate of heat meters is only within the 35% to 40% range, and installed meters are entering their replacement cycle, indicating huge demand for existing replacements[63] - By 2030, China's urban building central heating area is expected to reach 15 billion square meters, with over 30 million new heat meters/sets, while incremental markets such as "three supplies and one industry" renovation, heating in southern cities, and energy-saving billing for public buildings are emerging[65] 1.3 Overview of Flow Meter Products The company's ultrasonic flow meters are widely used across various industries, benefiting from national water network and smart water management policies - The company's ultrasonic flow meter products are widely used in water supply, industrial, water conservancy, petrochemical, thermal power, steel, coal, and other water-intensive industries[67] - In recent years, multiple water conservancy policies have been introduced, covering national and provincial water network construction and smart water conservancy development plans, guiding the accelerated development of smart water conservancy[67] 1.4 Industry Position and Competition Huizhong Instrumentation is a leading ultrasonic flow measurement company in China, with strong R&D, numerous patents, and a growing global presence - The company is one of the earliest domestic enterprises to research and develop ultrasonic flow measurement products and ultrasonic heat meter products, and a pioneer in smart heating and smart water software applications, being the first GEM-listed company in the domestic ultrasonic flow measurement field[70] - The company possesses independent intellectual property rights for all its products and over a hundred patented technologies, participating in the formulation of 14 national standards and 8 industry, group, and local standards[70] - The company is in the first tier of the domestic ultrasonic water meter and heat meter market, expanding into overseas markets with customized, high-value products, enhancing its global visibility[71][73][74] 1.5 Main Products Huizhong Instrumentation offers ultrasonic water meters, heat meters, and flow meters, along with smart solutions, leveraging subsidiaries for core technology output - The company has achieved smart management capabilities for its three major product series—ultrasonic water meters, ultrasonic heat meters, and ultrasonic flow meters—based on "one platform, three solutions, and N systems", providing complete industry chain services covering "data acquisition, energy metering, data analysis, solution design, and energy-saving services"[75] - The controlling subsidiary, Huizhong Technology, focuses on the R&D, sales, and related technical services of standard flow sensor components, aiming to help non-ultrasonic industry enterprises apply ultrasonic flow measurement technology and increase market penetration[75][120] - Lishengda Sensor Technology Tangshan Co., Ltd. is dedicated to mastering core technologies in ultrasonic flow piezoelectric ceramic components, has achieved mass production and product delivery, and will meet Huizhong Instrumentation's self-production needs for core metering product components[122][123] 1.5.1 Full Range of Water Metering Products The smart water supply solution covers the entire water cycle, integrating IoT, big data, and AI for real-time monitoring, leak detection, and intelligent management - The smart water supply solution has achieved full-process coverage from source water, ex-factory water, diversion water, urban water supply networks, urban-rural integrated water supply, industrial and commercial user water, to residential water[76] - Utilizing IoT, smart sensing, and big data technologies to achieve real-time flow reading, pipeline network leak monitoring, online pressure monitoring, and data mining analysis[76][77] - Huizhong Smart Water Platform integrates machine learning, deep learning, NLP, and speech recognition technologies, connects to various leading domestic large language models, and independently develops proprietary water industry models to create an exclusive AI smart assistant for the industry[93] 1.5.2 Full Range of Heating Metering Products The smart heating solution integrates AI, IoT, and big data to optimize heat distribution from source to user, ensuring efficient and demand-driven heating - The company has built a service architecture centered on "Smart Heating Platform + Three Solutions + N Systems" by deeply integrating information and physical systems, comprehensively applying IoT, big data, artificial intelligence, modeling and simulation technologies[94] - The product series covers heat source, pipeline network, heat exchange station monitoring, as well as public building and household metering, featuring high-precision ultrasonic flow measurement technology and precisely matched PT1000 temperature sensors[97][99] - Huizhong Smart Heating Platform integrates AI technology to build a knowledge graph covering the entire industry chain and develops a dynamic terminal balance adjustment system, optimizing the entire network's heat distribution in real-time through IoT smart control valves and room temperature collectors[109] 1.5.3 Full Range of Ultrasonic Flow Meter Products The company's six series of ultrasonic flow meters offer high precision, low power consumption, and diverse installation options for various industrial applications - The company's ultrasonic flow meter products are applied in petroleum, chemical, water resource monitoring, industrial metering, agricultural irrigation, and urban pipeline networks[113] - Products feature technical advantages such as DSP signal processing technology, micro-power consumption (operating for 10 years), multi-path measurement (up to eighteen paths), and high-performance ultrasonic transducers[115] - Provides four installation methods: internal贴式, insertion type, clamp-on type, and pipe section type, enabling online installation with water and pressure, avoiding water outage losses[113][115] 1.5.4 Ultrasonic Flow Measurement Technology and Product Solutions Subsidiaries Huizhong Technology and Lishengda Sensor Technology provide comprehensive ultrasonic flow measurement solutions, including sensors, modules, and smart production lines - Controlling subsidiary Huizhong Technology focuses on the R&D, sales, and related technical services of standard flow sensor components, promoting product upgrades and iterations, and is committed to the output and promotion of core ultrasonic flow measurement technology[120] - Huizhong Technology has a full industry chain product series including sensors, modules, transducers, as well as Huizhong Smart Manufacturing's calibration devices and smart production lines, capable of providing partners with full-cycle, multi-mode integrated solutions[120] - Lishengda Sensor Technology Tangshan Co., Ltd. is dedicated to mastering core technologies in ultrasonic flow piezoelectric ceramic components, has achieved mass production and product delivery, which will meet Huizhong Instrumentation's self-production needs for core metering product components[122][123] 1.6 Business Model The company employs strict procurement, ERP/MES-driven smart manufacturing, a direct/agency sales model, and value-based pricing, generating revenue from software and hardware sales - The procurement model involves supplier pre-selection, on-site audits, sample trials, and performance evaluations for qualified suppliers, in accordance with the "Supplier Management Procedure"[124][125][128][130] - The production model builds a "1+1+X" intelligent manufacturing integrated information platform centered on the ERP system and self-built MES system, adopting a "push + pull" combined production model to achieve digital and networked production[131][132] - The sales model combines direct sales with agency sales, with 8 major sales regions and 26 regional marketing service centers in the domestic market, and international business expanded to over 40 countries globally[137][138] - Product pricing considers strategic needs, product costs, market competition, channel fees, sales expenses, and company market strategies, with customized products subject to personalized pricing[142] - The profitability model generates revenue through the sale of software and hardware products by leveraging technological innovation and intelligent manufacturing to empower products and solution services, continuously improving product performance-price ratio and increasing consumer acceptance[143] 2. Core Competitiveness Analysis Huizhong Instrumentation's core strengths include diversified global strategy, leading R&D, intelligent manufacturing, extensive market reach, comprehensive product portfolio, and strong brand value - The company, with the vision of "building a globally leading ultrasonic flow measurement brand", has formed a unique Huizhong product matrix and industrial ecosystem through diversified global market expansion, intelligent manufacturing, and diversified industrial ecological construction[146] - The company continuously breaks technological boundaries in ultrasonic flow measurement technology, deepens the integration of smart water and heating industries with artificial intelligence, and has achieved CMMI Level 5 software capability maturity[148][149] - The company possesses globally significant R&D and production capabilities for ultrasonic flow measurement products, achieving flexible customization, precise traceability, and green manufacturing through independently developed flexible production lines and advanced automation equipment[153][154] - The company serves over 3,000 water supply customers and over 2,000 heating customers in the domestic market, with international market coverage in over 40 countries, establishing a service system of "regional service outlets + remote operation and maintenance + full lifecycle management"[158][159] - The company offers three major series of software and hardware products—ultrasonic water meters, ultrasonic heat meters, and ultrasonic flow meters—along with配套 solutions, covering all metering calibers, scenarios, and communication methods[161] - The company integrates the MES system with Kingdee "Cloud Starry Sky", and integrates CRM, PLM, APS, and other information systems, achieving four intelligences ("product, management, manufacturing, service") and five integrations ("finance and business, planning and execution, R&D and manufacturing, pre-sales and after-sales, analysis and decision-making")[164] 3. Analysis of Main Business Main business revenue grew by 51.67% and net profit by 102.72%, driven by innovation, smart manufacturing, and strong overseas market performance, with ultrasonic water and heat meters as key contributors Major Financial Data Year-on-Year Changes | Indicator | Current Period (CNY) | Prior Period (CNY) | YoY Change | Reason for Change | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue | 213,379,366.15 | 140,688,385.74 | 51.67% | Primarily due to increased export revenue | | Operating Cost | 109,502,011.81 | 71,366,922.82 | 53.44% | Primarily due to increased sales volume | | Financial Expenses | -2,278,122.58 | 132,893.26 | -1,814.25% | Primarily due to increased exchange gains | | R&D Investment | 18,081,421.10 | 15,180,372.12 | 19.11% | | | Net Cash Flow from Operating Activities | 58,971,767.57 | -8,312,581.44 | 809.43% | Primarily due to increased sales receipts and decreased raw material payments | Products or Services Accounting for Over 10% | Product or Service | Operating Revenue (CNY) | Operating Cost (CNY) | Gross Margin | YoY Change in Operating Revenue | YoY Change in Operating Cost | YoY Change in Gross Margin | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Ultrasonic Water Meters and Systems | 140,677,916.15 | 83,712,999.67 | 40.49% | 68.30% | 65.59% | 0.97% | | Ultrasonic Heat Meters and Systems | 35,552,196.40 | 15,807,365.05 | 55.54% | 41.77% | 76.40% | -8.73% | | Overseas (by Region) | 73,596,409.96 | 36,955,421.29 | 49.79% | 1,920.58% | 1,555.38% | 11.08% | - The company increased the integration of artificial intelligence, IoT, big data, digital twin, and other application technologies with ultrasonic flow measurement products, building an information system centered on "Smart Platform + Three Solutions + N Systems"[170] - Overseas markets became a key engine for the company's revenue and profit growth, with the company deciding to invest in establishing an Australian subsidiary and forming a strategic partnership with an Italian company to enhance its overseas brand influence[174] 4. Analysis of Non-Main Business Non-main business impacted total profit, with investment income and fair value changes from wealth management, other income from tax refunds and subsidies, and increased credit impairment losses Non-Main Business Items and Amounts | Item | Amount (CNY) | % of Total Profit | Reason for Formation | Sustainability | | :--- | :--- | :--- | :--- | :--- | | Investment Income | 975,519.37 | 2.07% | Income from wealth management products | No | | Gains/Losses from Changes in Fair Value | 894,522.20 | 1.90% | Primarily due to accrued income from wealth management products | No | | Asset Impairment | 755,810.54 | 1.60% | Impairment loss on contract assets | No | | Other Income | 4,694,215.32 | 9.95% | Primarily VAT refunds and government grants | No | | Credit Impairment Loss | -6,680,275.36 | -14.16% | Provision for bad debts on accounts receivable | No | 5. Analysis of Assets and Liabilities Total assets and net assets attributable to shareholders increased, with significant rises in financial assets and accounts receivable, while inventory and contract assets decreased Significant Changes in Asset Composition | Item | Amount at Period-End (CNY) | % of Total Assets | Amount at Prior Year-End (CNY) | % of Total Assets | Change in Proportion | Explanation of Significant Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Cash and Bank Balances | 70,171,163.54 | 5.62% | 58,357,908.88 | 4.76% | 0.86% | Primarily due to the company's continuous strengthening of cash flow management | | Accounts Receivable | 309,654,082.64 | 24.80% | 282,452,281.85 | 23.03% | 1.77% | Primarily due to an increase in accounts receivable not yet due | | Inventories | 196,541,503.77 | 15.74% | 217,216,235.60 | 17.71% | -1.97% | Primarily due to a decrease in raw materials and inventory goods in the current period | | Financial Assets at Fair Value Through Profit or Loss | 150,630,533.16 | 12.06% | 92,230,545.20 | 7.52% | 4.54% | Primarily due to increased purchases of wealth management products in the current period | | Other Current Assets | 41,023,936.83 | 3.29% | 76,319,456.50 | 6.22% | -2.93% | Primarily due to maturity of wealth management products | - The company's restricted cash and bank balances at period-end amounted to CNY 26,762,433.30, primarily consisting of time deposits and guarantees[191] Assets and Liabilities Measured at Fair Value | Item | Amount at Period-End (CNY) | | :--- | :--- | | Financial Assets at Fair Value Through Profit or Loss | 150,630,533.16 | | Accounts Receivable Financing | 7,105,416.04 | | Total Above | 157,735,949.20 | 6. Investment Analysis The company had no major equity, non-equity, or derivative investments, primarily engaging in wealth management with CNY 128 million outstanding and no overdue amounts - The company had no use of raised funds, derivative investments, or entrusted loans during the reporting period[195][199][200] Overview of Wealth Management | Specific Type | Source of Funds for Wealth Management | Amount of Wealth Management (CNY 10,000) | Outstanding Balance (CNY 10,000) | | :--- | :--- | :--- | :--- | | Bank Wealth Management Products | Own Funds | 20,100 | 12,800 | Financial Assets Measured at Fair Value | Asset Category | Amount at Period-End (CNY) | Source of Funds | | :--- | :--- | :--- | | Other (Wealth Management Products) | 150,630,533.16 | Own Funds | 7. Major Asset and Equity Sales The company did not engage in any major asset or equity sales during the reporting period - The company did not sell major assets during the reporting period[202] - The company did not sell major equity during the reporting period[203] 8. Analysis of Major Holding and Participating Companies The company had no significant holding or participating company information to disclose during the reporting period - The company had no significant holding or participating company information to disclose during the reporting period[203] 9. 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[204] 10. Risks Faced by the Company and Countermeasures The company faces risks from macroeconomic fluctuations, technological innovation, policy changes, market competition, overseas operating environment, and exchange rate volatility, with corresponding mitigation strategies in place - The company faces risks from macroeconomic fluctuations, as product demand is closely related to downstream customer capital expenditures, and a slowdown in the macroeconomy may adversely affect operating performance[204] - The company faces risks from technological innovation and product iteration, requiring continuous improvement in technological innovation and rapid product iteration capabilities to meet market demand for highly stable, high-precision, and intelligent metering products[205] - The company faces risks from changes in tax incentives and government subsidy policies, as a weakening or cancellation of relevant policies may lead to a decrease in profit levels[206] - The company faces risks from intensified market competition, as the smart water meter and heat meter industry enters a period of rapid development, potentially leading to fierce "price wars"[207] - The company faces risks from changes in the overseas market operating environment, as complex and volatile international political and economic situations may affect transportation costs, tariffs, and technical requirements[209] - The company faces risks from exchange rate fluctuations, as significant appreciation or depreciation of the RMB exchange rate may affect the competitiveness of overseas products and exchange gains/losses[210] 11. Registration Form for Research, Communication, Interview Activities During the Reporting Period On April 30, 2025, the company engaged with investors via Shenzhen Stock Exchange's "Interactive Easy Platform" to discuss 2024 annual and Q1 2025 performance, strategy, and market - Reception time: April 30, 2025[211] - Reception location: Shenzhen Stock Exchange's "Interactive Easy Platform" "Cloud Interview" section[211] - Reception method: Online platform communication, reception object type: individuals, institutions (public shareholders)[211] - Main topics discussed: The company's 2024 annual and Q1 2025 performance, as well as company strategy, operations, products, and market[211] 12. 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[212] - The company did not disclose a valuation enhancement plan[212] 13. Implementation of "Quality and Return Dual Enhancement" Action Plan The company actively implemented its "Quality and Return Dual Enhancement" plan, achieving revenue and net profit growth, enhancing investor communication, and prioritizing shareholder returns - The company reviewed and disclosed its "Quality and Return Dual Enhancement" action plan on January 22, 2025[212] - At the end of the reporting period, the company achieved operating revenue of CNY 213.3794 million, a year-on-year increase of 51.67%; net profit attributable to shareholders of the listed company was CNY 41.5580 million, a year-on-year increase of 102.72%[212] - The company disclosed its first ESG report and, on February 28, 2025, disclosed a framework plan for a medium-to-long-term employee stock ownership plan, with the first phase already implemented, covering 118 individuals[214] - The company implemented its 2024 profit distribution plan, with a total cash dividend of CNY 17,841,432.33, accounting for over 30% of the 2024 net profit attributable to the parent company[215] - The company completed a share repurchase on March 25, 2025, repurchasing a total of 976,100 shares, with a total payment of CNY 9,975,491, accounting for over 17% of the 2024 net profit attributable to the parent company[215] Part IV Corporate Governance, Environment, and Society 1. Changes in Directors, Supervisors, and Senior Management The reporting period saw multiple changes in directors, supervisors, and senior management, including retirements, new appointments, and reassignments - Dong Jianguo resigned as Vice Chairman due to retirement on January 21, 2025[218] - Qiu Jinghui was elected as an employee director on June 9, 2025, and resigned from senior management due to job relocation[218] - Tang Xin was elected as an independent director on June 9, 2025[218] - Wang Ying, Wan Di, Liu Guoxing, and Fu Die resigned as independent directors or supervisors due to the expiration of their terms, with Wan Di and Liu Guoxing subsequently appointed as senior management[218] 2. Profit Distribution and Capital Reserve Conversion to Share Capital for the Current Reporting Period The company plans no semi-annual cash dividend distribution, bonus share issuance, or capital reserve conversion to share capital - The company plans no semi-annual cash dividend distribution, bonus share issuance, or capital reserve conversion to share capital[219] 3. Implementation of Equity Incentive Plans, Employee Stock Ownership Plans, or Other Employee Incentive Measures The company implemented its first phase of the long-term employee stock ownership plan, covering 118 key personnel, with a total of 1,803,059 shares and a recognized share-based payment expense of CNY 1.32 million - The company had no ongoing equity incentive matters during the reporting period[220] - The first phase of the medium-to-long-term employee stock ownership plan was completed with non-trading transfers during the reporting period, covering 118 directors (excluding independent directors), senior management, and core key personnel[221] Employee Stock Ownership Plan | Scope of Employees | Number of Employees | Total Shares Held (shares) | % of Company's Total Share Capital | Source of Funds for Plan Implementation | | :--- | :--- | :--- | :--- | :--- | | Company Directors (excluding independent directors), Senior Management, Core Key Personnel | 118 | 1,803,059 | 0.89% | Company's Own Funds | - The total expense recognized for the company's employee stock ownership plan in the first half of 2025 was CNY 1.3207 million, allocated to management expenses, selling expenses, and R&D expenses[224] 4. Environmental Information Disclosure The company and its major subsidiaries were not included in the list of enterprises required to disclose environmental information by law - The listed company and its major subsidiaries were not included in the list of enterprises required to disclose environmental information by law[224] 5. Social Responsibility Performance The company actively fulfilled its social responsibilities through Party building, protecting shareholder rights, employee care, and rural revitalization initiatives, including over CNY 300,000 in agricultural product sales - The company consistently integrates Party building with corporate operations, corporate culture construction, and social responsibility fulfillment, fully leveraging the political core role of Party organizations among employees and their political leadership role in corporate development[225] - The company fully implemented the requirements of laws and regulations such as the "Company Law of the People's Republic of China (Revised 2023)", revised 30 internal systems to optimize its corporate governance structure, and distributed cash dividends of CNY 17,841,432.33 to shareholders on June 13, 2025[227] - The company strictly implements laws and regulations such as the "Labor Contract Law" and "Social Insurance Law", providing welfare benefits to employees, and implemented the first phase of the medium-to-long-term employee stock ownership plan, covering over 20% of the company's total employees[228] - The "Huixingfu" public welfare platform continues to contribute to rural revitalization, establishing assistance and cooperation mechanisms with farmers in Ruoqiang County, Korla City, Xinjiang, and Fengnan District, Tangshan City, Hebei; as of June 30, 2025, it has cumulatively helped sell over CNY 300,000 worth of agricultural products[229][230] Part V Significant Matters 1. Commitments Fulfilled and Overdue Unfulfilled Commitments by Actual Controller, Shareholders, Related Parties, Acquirers, and the Company During the Reporting Period All commitment-related parties, including the actual controller and shareholders, fulfilled their share restriction, share reduction, and IPO price stabilization commitments on time - During the reporting period, the committing parties fulfilled their share restriction commitments[234] - During the reporting period, the committing parties fulfilled their share reduction commitments[235] - During the reporting period, the committing parties fulfilled their IPO price stabilization commitments[235] - Were commitments fulfilled on time: Yes[238] 2. Non-Operating Funds Occupied by Controlling Shareholders and Other Related Parties from the Listed Company The company reported no non-operating funds occupied by controlling shareholders or other related parties during the period - The company reported no non-operating funds occupied by controlling shareholders or other related parties from the listed company during the reporting period[240] 3. 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[241] 4. Appointment and Dismissal of Accounting Firms The company's semi-annual financial report was not audited - The company's semi-annual report was not audited[242] 5. Explanation by the Board of Directors, Supervisory Board, and Audit Committee on the "Non-Standard Audit Report" for the Current Period The company had no non-standard audit report for the current period, thus no explanation from the board, supervisory board, or audit committee is required - The company had no non-standard audit report during the reporting period[243] 6. Explanation by the Board of Directors on the "Non-Standard Audit Report" for the Previous Year The company had no non-standard audit report for the previous year, thus no explanation from the board is required - The company had no non-standard audit report for the previous year during the reporting period[243] 7. Bankruptcy Reorganization Matters The company had no bankruptcy reorganization matters during the reporting period - The company had no bankruptcy reorganization matters during the reporting period[243] 8. Litigation Matters The company had no significant litigation or arbitration matters, nor any other discloseable litigation during the reporting period - The company had no significant litigation or arbitration matters during the current reporting period[244] - The company had no other important contingent matters requiring disclosure[245] 9. 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[245] 10. Integrity Status of the Company, its Controlling Shareholder, and Actual Controller The company was not required to disclose the integrity status of itself, its controlling shareholder, or actual controller during the reporting period - The company was not required to disclose the integrity status of itself, its controlling shareholder, or actual controller during the reporting period[246] 11. Significant Related Party Transactions The company reported no significant related party transactions, including daily operations, asset/equity acquisitions, joint investments, or related party debts/credits - The company had no related party transactions related to daily operations during the reporting period[246] - The company had no related party transactions involving asset or equity acquisition/disposal during the reporting period[247] - The company had no related party transactions involving joint external investment during the reporting period[248] - The company had no related party debt or credit transactions during the reporting period[249] - The company had no deposits, loans, credit lines, or other financial business with related financial companies, nor did its controlled financial companies have such business with related parties[250][251] 12. Significant Contracts and Their Performance The company had no entrusted management, contracting, or leasing matters or significant guarantees, but disclosed a major operating contract with Customer A, 67.86% fulfilled, with normal performance - The company had no entrusted management, contracting, or leasing situations during the reporting period[253][254][255] - The company had no significant guarantee situations during the reporting period[256] Major Contracts in Ordinary Course of Business | Company Name | Counterparty Name | Total Contract Amount (CNY 10,000) | Contract Performance Progress | Sales Revenue Recognized in Current Period (CNY 10,000) | Cumulative Sales Revenue Recognized (CNY 10,000) | Accounts Receivable Collection Status | Have Major Conditions Affecting Contract Performance Changed Significantly | Is There a Significant Risk of Contract Non-Performance | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Huizhong Instrumentation Co., Ltd. | Customer A | 13,000.00 | 67.86% | 5,442.83 | 8,821.36 | Normal | No | No | 13. Explanation of Other Significant Matters The company had no other significant matters requiring explanation during the reporting period - The company had no other significant matters requiring explanation during the reporting period[261] 14. Significant Matters of Company Subsidiaries The company had no significant matters concerning its subsidiaries during the reporting period - The company had no significant matters concerning its subsidiaries during the reporting period[262] Part VI Share Changes and Shareholder Information 1. Share Change Information Total shares remained unchanged, but restricted shares increased by 1,381,200 due to a director's retirement, while the company completed a share repurchase of 976,100 shares Share Change Information | | Number Before Change (shares) | % Before Change | Change (Increase/Decrease) (shares) | Number After Change (shares) | % After Change | | :--- | :--- | :--- | :--- | :--- | :--- | | I. Restricted Shares | 65,425,715 | 32.52% | 1,381,200 | 66,806,915 | 33.20% | | II. Unrestricted Shares | 135,791,581 | 67.48% | -1,381,200 | 134,410,381 | 66.80% | | III. Total Shares | 201,217,296 | 100.00% | 0 | 201,217,296 | 100.00% | - The share change was primarily due to the retirement and resignation of Mr. Dong Jianguo, Vice Chairman and Director of the company, whose shares were all adjusted to restricted shares[267] - The company has completed its share repurchase, with a cumulative repurchase of 976,100 shares, and a total payment of CNY 9,975,491[269] 2. 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[272] 3. Number of Shareholders and Shareholding As of the reporting period end, the company had 8,783 common shareholders, with Zhang Lixin and Wang Yongcun as top holders; Zhang Lixin and Xu Wenzhi are acting in concert - At the end of the reporting period, the total number of common shareholders was 8,783[273] Shareholding of Shareholders Holding 5% or More or Top 10 Shareholders | Shareholder Name | Shareholder Nature | Shareholding % | Number of Shares Held at Period-End (shares) | Number of Restricted Shares Held (shares) | Number of Unrestricted Shares Held (shares) | | :--- | :--- | :--- | :--- | :--- | :--- | | Zhang Lixin | Domestic Natural Person | 37.95% | 76,362,665 | 57,271,999 | 19,090,666 | | Wang Yongcun | Domestic Natural Person | 9.17% | 18,453,601 | 0 | 18,453,601 | | Dong Jianguo | Domestic Natural Person | 2.75% | 5,524,801 | 5,524,801 | 0 | | Zhang Jichuan | Domestic Natural Person | 2.53% | 5,081,807 | 3,811,355 | 1,270,452 | | Xu Wenzhi | Domestic Natural Person | 2.38% | 4,793,809 | 0 | 4,793,809 | | Liu Jianyin | Domestic Natural Person | 2.08% | 4,178,183 | 0 | 4,178,183 | | Liu Chunhua | Domestic Natural Person | 1.52% | 3,060,495 | 0 | 3,060,495 | | Yi Moujian | Domestic Natural Person | 1.52% | 3,055,520 | 0 | 3,055,520 | | Wang Jian | Domestic Natural Person | 1.31% | 2,630,200 | 0 | 2,630,200 | | Li Zhizhong | Domestic Natural Person | 1.27% | 2,551,640 | 0 | 2,551,640 | - Among the company's top 10 shareholders, Xu Wenzhi and the company's controlling shareholder and actual controller, Zhang Lixin, are spouses and acting in concert[274] 4. 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, as detailed in the 2024 annual report[276] 5. Changes in Controlling Shareholder or Actual Controller There were no changes in the company's controlling shareholder or actual controller during the reporting period - The company's controlling shareholder did not change during the reporting period[277] - The company's actual controller did not change during the reporting period[277] 6. Preferred Share Information The company had no preferred shares during the reporting period - The company had no preferred shares during the reporting period[278] Part VII Bond-Related Information 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[282] Part VIII Financial Report 1. Audit Report The company's semi-annual financial report was not audited - The company's semi-annual financial report was not audited[286] 2. Financial Statements This section presents the company's consolidated and parent company balance sheets, income statements, cash flow statements, and statements of changes in equity for H1 2025 2.1 Consolidated Balance Sheet As of June 30, 2025, total consolidated assets were CNY 1,248.75 million, with significant increases in financial assets and accounts receivable Consolidated Balance Sheet Key Data | Item | Period-End Balance (CNY) | Period-Beginning Balance (CNY) | | :--- | :--- | :--- | | Cash and Bank Balances | 70,171,163.54 | 58,357,908.88 | | Financial Assets at Fair Value Through Profit or Loss | 150,630,533.16 | 92,230,545.20 | | Accounts Receivable | 309,654,082.64 | 282,452,281.85 | | Inventories | 196,541,503.77 | 217,216,235.60 | | Contract Assets | 14,451,855.02 | 24,489,640.30 | | Fixed Assets | 282,152,206.65 | 273,699,370.49 | | Total Assets | 1,248,749,389.01 | 1,226,228,491.18 | | Total Liabilities | 101,195,211.62 | 103,763,822.17 | | Total Owners' Equity Attributable to Parent Company | 1,141,158,825.77 | 1,116,049,143.60 | 2.2 Parent Company Balance Sheet As of June 30, 2025, total parent company assets were CNY 1,245.46 million, showing similar trends to the consolidated balance sheet Parent Company Balance Sheet Key Data | Item | Period-End Balance (CNY) | Period-Beginning Balance (CNY) | | :--- | :--- | :--- | | Cash and Bank Balances | 67,448,014.61 | 44,833,817.71 | | Financial Assets at Fair Value Through Profit or Loss | 150,630,533.16 | 92,230,545.20 | | Accounts Receivable | 305,925,257.62 | 278,148,792.17 | | Inventories | 191,326,286.29 | 213,919,003.29 | | Fixed Assets | 281,650,829.66 | 273,147,997.90 | | Total Assets | 1,245,463,301.58 | 1,214,257,909.40 | | Total Liabilities | 104,525,086.24 | 98,557,046.92 | | Total Owners' Equity | 1,140,938,215.34 | 1,115,700,862.48 | 2.3 Consolidated Income Statement For H1 2025, consolidated total operating revenue grew by 51.67% to CNY 213.38 million, and net profit increased by 111.23% to CNY 41.74 million Consolidated Income Statement Key Data | Item | H1 2025 (CNY) | H1 2024 (CNY) | | :--- | :--- | :--- | | Total Operating Revenue | 213,379,366.15 | 140,688,385.74 | | Total Operating Costs | 166,858,821.66 | 129,821,801.09 | | Operating Profit | 47,160,620.74 | 24,925,624.77 | | Total Profit | 47,160,609.83 | 24,845,588.76 | | Net Profit | 41,744,834.00 | 19,762,831.56 | | Net Profit Attributable to Parent Company Shareholders | 41,557,970.29 | 20,500,605.55 | | Basic Earnings Per Share (CNY/share) | 0.2091 | 0.1027 | 2.4 Parent Company Income Statement For H1 2025, parent company operating revenue grew by 50.87% to CNY 213.08 million, and net profit increased by 93.05% to CNY 41.65 million Parent Company Income Statement Key Data | Item | H1 2025 (CNY) | H1 2024 (CNY) | | :--- | :--- | :--- | | Operating Revenue | 213,080,645.98 | 141,229,443.56 | | Operating Cost | 112,047,513.96 | 72,422,643.13 | | Operating Profit | 47,084,751.66 | 26,721,839.67 | | Total Profit | 47,084,740.75 | 26,641,803.66 | | Net Profit | 41,652,497.64 | 21,586,663.40 | 2.5 Consolidated Cash Flow Statement Operating cash flow turned positive at CNY 58.97 million, driven by increased sales receipts and reduced raw material payments, while investment and financing cash flows were negative Consolidated Cash Flow Statement Key Data | Item | H1 2025 (CNY) | H1 2024 (CNY) | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 58,971,767.57 | -8,312,581.44 | | Net Cash Flow from Investing Activities | -53,168,032.71 | -1,311,838.50 | | Net Cash Flow from Financing Activities | -19,055,989.41 | -41,440,502.50 | | Net Increase in Cash and Cash Equivalents | -12,559,178.64 | -50,982,251.63 | | Cash and Cash Equivalents at Period-End | 43,408,730.24 | 19,022,611.14 | - Net cash flow from operating activities increased by 809.43% year-on-year, primarily due to increased sales receipts and decreased raw material payments[180] - Net cash flow from investing activities decreased by 3,952.94% year-on-year, primarily due to increased wealth management expenditures in the current reporting period[180] - Net cash flow from financing activities increased by 54.02% year-on-year, primarily due to decreased cash dividend payments[180] 2.6 Parent Company Cash Flow Statement Parent company operating cash flow turned positive at CNY 63.93 million, with investment and financing cash flows showing similar trends to the consolidated statement Parent Company Cash Flow Statement Key Data | Item | H1 2025 (CNY) | H1 2024 (CNY) | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 63,932,709.77 | -7,103,522.51 | | Net Cash Flow from Investing Activities | -52,768,032.71 | -1,228,459.50 | | Net Cash Flow from Financing Activities | -13,615,989.41 | -35,172,002.50 | | Net Increase in Cash and Cash Equivalents | -1,758,236.40 | -43,421,313.76 | | Cash and Cash Equivalents at Period-End | 40,685,581.31 | 18,318,816.59 | 2.7 Consolidated Statement of Changes in Owners' Equity Consolidated owners' equity increased by CNY 25.09 million, primarily due to comprehensive income, partially offset by profit distribution and capital adjustments - Total comprehensive income for the current period was CNY 41,744,653.16[303] - Profit distribution for the current period decreased by CNY 18,081,361.38[304] - Capital reserve increased by CNY 1,287,778.22 due to share-based payments recognized in owners' equity, and decreased by CNY 9,467,911.66 due to shares repurchased and transferred to the employee stock ownership plan account[303][333] - Treasury stock increased by CNY 9,987,214.51 due to current period share repurchases, and decreased by CNY 18,753,665.51 due to transfers from the medium-to-long-term employee stock ownership plan[303][334] 2.8 Parent Company Statement of Changes in Owners' Equity Parent company owners' equity increased by CNY 25.24 million, influenced by comprehensive income, profit distribution, and capital adjustments, mirroring consolidated trends - Total comprehensive income for the current period was CNY 41,652,497.64[309] - Profit distribution for the current period decreased by CNY 17,841,361.38[310] - Capital reserve increased by CNY 1,320,740.72 due to share-based payments recognized in owners' equity, and decreased by CNY 9,463,072.44 due to other reasons[309][310] - Treasury stock decreased by CNY 8,766,451.00 due to other reasons[310] 3. Company Overview Huizhong Instrumentation, listed on Shenzhen Stock Exchange since 2014, operates in instrument manufacturing, with Zhang Lixin as actual controller and CNY 201.22 million registered capital - Huizhong Instrumentation Co., Ltd. was established through the overall conversion of Tangs