华海诚科(688535) - 2025 Q2 - 季度财报

Definitions This chapter defines key terms used in the report, primarily covering the semiconductor industry, packaging technologies (e.g., DIP, QFN, BGA, SiP, FOWLP, FOPLP), material properties (e.g., HTRB, lowK, Tg, CTE), company abbreviations, and the reporting period - The company's abbreviation 'Huahaichengke' refers to Jiangsu Huahaichengke New Material Co., Ltd[10] - Semiconductor packaging material industry terms include: semiconductor, integrated circuit, packaging, advanced packaging, traditional packaging, etc[10] - Material property terms include: epoxy resin, phenolic resin, filler, coefficient of thermal expansion, flow performance, water absorption, stress, warpage, dielectric constant, glass transition temperature (Tg), CTE, etc[10][11][12][13] - The reporting period is from January 1, 2025, to June 30, 2025[13] Company Profile and Key Financial Indicators This section provides an overview of the company's basic information, stock details, and key financial performance metrics for the reporting period Company Basic Information This section provides the company's basic information, including its Chinese name, abbreviation, legal representative, registered address, and contact details - Company Chinese name: Jiangsu Huahaichengke New Material Co., Ltd., abbreviation: Huahaichengke[15] - Legal Representative: Han Jianglong[15] - Registered Address: No. 66, Dongfang Avenue, Lianyungang Economic and Technological Development Zone[15] - Email: ir@hhck-em.com[15] Contact Persons and Information This section lists the contact information for the company's Board Secretary and Securities Affairs Representative, ensuring smooth information disclosure and convenient investor communication - Board Secretary (Domestic Representative for Information Disclosure): Dong Dongfeng[16] - Contact Number: 0518-81066978[16] Information Disclosure and Document Availability Changes This section outlines the company's semi-annual report disclosure channels and availability locations, ensuring investors can access company reports promptly - Company's selected information disclosure newspapers: China Securities Journal, Shanghai Securities News, Securities Daily, Securities Times[17] - Website address for semi-annual report publication: **www.sse.com.cn**[17](index=17&type=chunk) Company Stock Overview This section provides the company's stock listing information, including stock type, listing exchange and board, stock abbreviation, and code - Stock Type: RMB Ordinary Shares (A-shares)[18] - Stock Listing Exchange and Board: Shanghai Stock Exchange STAR Market[18] - Stock Abbreviation: Huahaichengke, Stock Code: 688535[18] Key Accounting Data and Financial Indicators This section presents the company's key accounting data and financial indicators for the reporting period, explaining the primary reasons for the year-on-year decline in profit and net cash flow Key Accounting Data (January-June 2025) | Indicator | Current Period (Million Yuan) | Prior Period (Million Yuan) | Period-on-Period Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 179.08 | 155.32 | 15.30 | | Total Profit | 15.05 | 27.68 | -45.62 | | Net Profit Attributable to Shareholders of Listed Company | 13.77 | 24.89 | -44.67 | | Net Profit Attributable to Shareholders of Listed Company After Deducting Non-Recurring Gains and Losses | 12.70 | 23.77 | -46.56 | | Net Cash Flow from Operating Activities | -2.73 | 0.32 | -959.04 | Key Financial Indicators (January-June 2025) | Indicator | Current Period | Prior Period | Period-on-Period Change (%) | | :--- | :--- | :--- | :--- | | Basic Earnings Per Share (Yuan/share) | 0.20 | 0.31 | -35.48 | | Diluted Earnings Per Share (Yuan/share) | 0.17 | 0.31 | -45.16 | | Basic EPS After Deducting Non-Recurring Gains and Losses (Yuan/share) | 0.19 | 0.29 | -34.48 | | Weighted Average Return on Net Assets (%) | 1.33 | 2.40 | Decreased by 1.07 percentage points | | Weighted Average RONAN After Deducting Non-Recurring Gains and Losses (%) | 1.23 | 2.29 | Decreased by 1.06 percentage points | | R&D Investment as Percentage of Operating Revenue (%) | 9.74 | 7.94 | Increased by 1.80 percentage points | - Total profit, net profit attributable to shareholders of the listed company, and net profit attributable to shareholders of the listed company after deducting non-recurring gains and losses decreased year-on-year, primarily due to the accrual of employee equity incentive expenses, intermediary fees during the reorganization period, increased depreciation expenses for new IPO investment project buildings and equipment, and higher bank loan interest[22] - Net cash flow from operating activities decreased by 959.04% year-on-year, mainly due to increased employee compensation and intermediary fees paid[22] Non-Recurring Gains and Losses Items and Amounts This section details the non-recurring gains and losses items and their amounts for the reporting period, totaling 1,075,174.98 Yuan Non-Recurring Gains and Losses Items and Amounts | Non-Recurring Gains and Losses Item | Amount (Yuan) | | :--- | :--- | | Gains and losses from disposal of non-current assets | -91,438.87 | | Government subsidies recognized in current profit or loss | 1,256,132.58 | | Fair value changes and disposal gains/losses from financial assets and liabilities held by non-financial enterprises, excluding effective hedge accounting related to normal business operations | 19,953.91 | | Reversal of impairment provisions for receivables subject to individual impairment testing | 60,000.00 | | Other non-operating income and expenses apart from the above | 2,216.23 | | Less: Income tax impact | 171,542.67 | | Impact on minority interests (after tax) | 146.20 | | Total | 1,075,174.98 | Net Profit After Deducting Impact of Share-Based Payments This section discloses the net profit after deducting the impact of share-based payment expenses, showing a slight year-on-year increase Net Profit After Deducting Impact of Share-Based Payments | Key Accounting Data | Current Period (Jan-Jun) (Million Yuan) | Prior Period (Million Yuan) | Period-on-Period Change (%) | | :--- | :--- | :--- | :--- | | Net Profit After Deducting Impact of Share-Based Payments | 25.25 | 24.89 | 1.44 | Management Discussion and Analysis This section provides an in-depth discussion and analysis of the company's industry, business operations, financial performance, core competencies, and risk factors Industry and Main Business Overview This section elaborates on the company's main business, products, market conditions, development trends, and operating model as a 'Little Giant' enterprise specializing in semiconductor packaging materials Main Business and Products The company specializes in R&D and industrialization of semiconductor packaging materials, with main products including epoxy molding compounds and electronic adhesives, widely used in semiconductor packaging and board-level assembly, aiming to be a global leader in high-end packaging materials - The company is a national 'Little Giant' enterprise specializing in the R&D and industrialization of semiconductor packaging materials[30] - Main products include epoxy molding compounds (EMC) and electronic adhesives, applied in semiconductor packaging, board-level assembly, and other scenarios[31] - Epoxy molding compounds primarily protect semiconductor chips, providing composite functions such as thermal conductivity, insulation, moisture resistance, pressure resistance, and support[31] Industry Overview and Development Trends The semiconductor packaging materials industry is a critical support for the semiconductor supply chain, with plastic packaging dominating the market. The global semiconductor materials market is projected to grow by 3.8% in 2024, with strong performance in mainland China. Industry trends include high integration and modularization in advanced packaging, performance enhancement driven by emerging industries like new energy, 5G, and AI, and significant room for domestic substitution - Semiconductor packaging materials are a critical supporting industry for the semiconductor supply chain, with plastic packaging accounting for over 90% of the total packaging industry market size[32] Global Semiconductor Materials Market Sales and Growth Forecast | Indicator | 2024 Sales (Billion USD) | Year-on-Year Growth (%) | 2025 Forecast (Billion USD) | 2023-2028 CAGR (%) | | :--- | :--- | :--- | :--- | :--- | | Global Semiconductor Materials | 67.5 | 3.8 | >26.0 (Packaging Materials) | 5.6 (Packaging Materials) | | Wafer Fabrication Materials | 42.9 | 3.3 | - | - | | Packaging Materials | 24.6 | 4.7 | - | - | - In 2024, mainland China's semiconductor material sales reached 13.5 billion USD, with a year-on-year increase of 5.3%, ranking second globally; the domestic epoxy molding compound market size is approximately 6.6 billion Yuan[33][34] - Industry development trends: Advanced packaging generally exhibits high integration and modularization, requiring epoxy molding compounds to develop towards high thermal conductivity, high fluidity, narrow-pitch high filling, high adhesion, low water absorption, and low warpage[35] - Emerging industries such as new energy vehicles, 5G communication, and artificial intelligence are driving epoxy molding compound products to possess characteristics like ultra-low stress, high reliability, high voltage resistance, high purity, and high glass transition temperature[35] - The market demand for automotive-grade chips is enormous, projected to reach 80.4 billion USD globally by 2025, directly driving demand for high-performance packaging materials[36] - Self-reliance and control in the semiconductor industry have risen to a national strategic level; the localization rate of Chinese semiconductor materials in advanced packaging is low, indicating vast room for domestic substitution[36] Operating Model The company adopts an operating model integrating R&D, procurement, production, and sales, driven by technological innovation, producing based on sales, and customer-centric, forming a sales network covering East China, Southwest China, and South China - R&D Model: Focuses on the development and optimization of semiconductor packaging material formulations and production processes, selecting raw materials and determining process parameters based on customized customer requirements[37] - Procurement Model: Material requirements plans are prepared monthly and weekly by departments such as the procurement department and integrated planning department based on production needs, selecting qualified suppliers through inquiry, negotiation, and comparison[37][38] - Production Model: Implements a combination of production based on sales and demand forecasting, rapidly adjusting product types and output according to customer requirements and market demand[38] - Sales Model: Adheres to a customer-centric approach, primarily serving direct customers supplemented by traders, with sales concentrated in East China, Southwest China, and South China regions[38] Operating Performance and Key Initiatives In the first half of 2025, the company's operating revenue increased by 15.30% year-on-year, but net profit attributable to the parent company decreased by 44.67%, mainly impacted by equity incentives, reorganization expenses, and increased depreciation. During the reporting period, the company made positive progress in new product R&D, quality improvement, shareholder returns, major asset reorganization, internal governance, and IPO investment project construction - In the first half of 2025, operating revenue reached 179.0760 million Yuan, a year-on-year increase of 15.30%[38] - Net profit attributable to shareholders of the listed company was 13.7745 million Yuan, a year-on-year decrease of 44.67%; net profit after deducting non-recurring gains and losses was 12.6994 million Yuan, a year-on-year decrease of 46.56%[38] - After deducting share-based payment expenses of 11.6028 million Yuan, net profit was 25.2505 million Yuan[38] - R&D expenses amounted to 17.4437 million Yuan, a year-on-year increase of 41.37%; 9 new invention patents and utility models were applied for[38] - The company consistently maintains cash dividends at over 30% of net profit attributable to shareholders of the listed company, distributing 16.0632 million Yuan in cash dividends in 2024[41] - As of the end of the reporting period, 460,567 shares had been repurchased, with a total payment of 32.4693 million Yuan[41] - The company initiated a major asset reorganization in November 2024, completing the acquisition of a 30% equity stake in Hengsuo Huawei, and subsequently plans to issue shares, convertible bonds, and pay cash to acquire the remaining 70% equity[42] - The company revised its Articles of Association and relevant internal regulations, abolishing the Board of Supervisors and integrating its statutory functions into the Board Audit Committee[43] - The high-density integrated circuit and system-level module packaging project has completed factory building construction, auxiliary facility installation, and main equipment procurement, while the R&D center upgrade project is nearing completion[45] Core Competencies and R&D Progress The company has built core competencies through leading industry technology, a comprehensive product system, rapid service response, a strong R&D team, high-quality customer resources, and strict quality control. During the reporting period, the company continued to invest in core technology R&D and patent applications, actively advancing multiple ongoing projects, consolidating its leading position in semiconductor packaging materials Core Competencies The company possesses multiple core competencies in semiconductor packaging materials, including leading technological advantages, a comprehensive product system, rapid response capability, a strong R&D team, stable customer resources, and a strict quality control system - The company focuses on products such as QFN, BGA, MUF, wafer-level packaging, IGBT/IPM modules, and automotive electronics in advanced packaging; its FOWLP/FOPLP granular epoxy molding compound production equipment leads domestically, with high thermal conductivity materials reaching 3W/m.K in mass production and preliminary products at 5W/m.K[46][47] - The company has built a product system covering traditional and advanced packaging, being one of the few domestic manufacturers capable of covering all generations of packaging technologies, and has achieved substitution of foreign products with major packaging manufacturers such as JCET and Huatian Technology[49][50] - The company possesses excellent and rapid R&D and service response capabilities, enabling timely response to customer needs and enhancing customer loyalty[51] - The company's R&D team is led by Dr. Han Jianglong, a State Council special allowance expert, with several members selected for provincial and municipal talent development programs, enjoying a high reputation in the industry[52] - The company has established long-term stable cooperative relationships with numerous renowned manufacturers, including JCET, Huatian Technology, Tongfu Microelectronics, Fuman Micro, Yangjie Technology, and Yinhe Microelectronics[53] - The company has established a comprehensive and effective quality management system, having passed multiple management certifications such as ISO9001, ISO14001, IATF16949, and IECQ QC080000[54] Core Technologies and R&D Progress The company holds 31 invention patents and 92 utility model patents in semiconductor packaging materials, and is recognized as a national 'Little Giant' enterprise specializing in niche sectors. During the reporting period, R&D investment increased by 41.37% year-on-year, primarily for the R&D of high-performance and advanced packaging materials, actively advancing multiple ongoing projects to meet high-end chip packaging demands - As of the end of the reporting period, the company holds 31 invention patents and 92 utility model patents, and is recognized as a national 'Little Giant' enterprise specializing in niche sectors[55][57][58][59] - The company's core technology system covers continuous moldability, low stress, high reliability, warpage control, high thermal conductivity, high voltage resistance, high-performance adhesive underfill, etc., and has developed new products such as automotive-grade sulfur-free EMC, IPM, and IGBT module EMC[56] R&D Investment Table | Indicator | Current Period (Million Yuan) | Prior Period (Million Yuan) | Change (%) | | :--- | :--- | :--- | :--- | | Expensed R&D Investment | 17.44 | 12.34 | 41.37 | | Total R&D Investment | 17.44 | 12.34 | 41.37 | | Total R&D Investment as Percentage of Operating Revenue (%) | 9.74 | 7.94 | Increased by 1.80 percentage points | - The increase in total R&D investment compared to the previous year was mainly due to increased R&D personnel, equity incentive expenses, and depreciation expenses for newly purchased R&D equipment for IPO investment projects[61] - The company has multiple ongoing R&D projects, including epoxy molding compounds for large-size QFN particles, MUF molding materials, resin system development for XL underfill materials, R&D and industrialization of high-voltage IC isolation packaging technology, R&D of high-performance stacked capacitor epoxy molding compounds, key technology R&D for granular epoxy molding compounds for advanced packaging, development of high thermal conductivity and high reliability epoxy molding compounds, and R&D of sulfur-free epoxy molding compounds for automotive electronics, all at a leading domestic level[63][64][65][66][67][68] R&D Personnel Information | Indicator | Current Period (persons) | Prior Period (persons) | | :--- | :--- | :--- | | Number of Company R&D Personnel | 86 | 70 | | R&D Personnel as Percentage of Total Company Staff (%) | 19.91 | 18.37 | | Total R&D Personnel Compensation (Million Yuan) | 5.98 | 4.52 | | Average R&D Personnel Compensation (Million Yuan) | 0.0696 | 0.0646 | - R&D personnel education structure: 59.30% with bachelor's degree or above, 36.05% with associate's degree. Age structure: 39.53% aged 31-40, 36.05% aged 30 and below[70] Risk Factors This section elaborates on the main risks faced by the company, including technical risks such as industrialization of advanced packaging materials, R&D progress, and loss of core technical personnel; operational risks such as long product assessment and verification cycles, small market capacity, high market concentration, and customer certification; and financial risks such as accounts receivable recovery and changes in tax preferential policies Technological Risks The company faces risks such as industrialization of advanced packaging epoxy molding compounds falling short of expectations, untimely R&D or failure to meet progress targets, and loss of core technical personnel and technology leakage, all of which could adversely affect the company's long-term development and core competitiveness - Industrialization risk for advanced packaging epoxy molding compounds: The high-end packaging materials market is monopolized by foreign manufacturers, and the company's products require a longer period to gain widespread recognition and achieve industrialization[71] - Risk of untimely R&D or failure to meet progress targets: The company's technological level still lags behind major foreign manufacturers; failure to keep pace with technological development trends or customer demands may impact revenue growth[72] - Risk of loss of core technical personnel and technology leakage: The semiconductor packaging materials industry is technology-intensive, and the stability of the R&D team and technology confidentiality are crucial; loss or leakage would adversely affect core competitiveness[73] Operational Risks The company faces operational risks such as long product assessment and verification cycles, small and highly concentrated niche markets for its main products, and uncertainties in customer certification, which may limit the company's market expansion and growth potential - Risk of longer product assessment and verification cycles: New products require rigorous customer assessment before mass production; domestic manufacturers typically need to adapt to packaging manufacturers' established process parameters, leading to longer verification cycles[74] - Risk of small niche market capacity and high market concentration for the company's main products: In 2024, the epoxy molding compound market size in mainland China was approximately 6.6 billion Yuan, a relatively small market, and the company's market share is less than 5%, facing risks of limited growth potential[75][76] - Customer certification risk: New product certification requires significant R&D, sales, and management expenditures; if new or existing customer certification is not obtained as scheduled, initial investments may not be recovered[77] Financial Risks The company faces accounts receivable recovery risk, which could lead to working capital strain and bad debt losses; additionally, changes in tax preferential policies may adversely affect the company's operating performance - Accounts receivable recovery risk: As the operating scale expands, accounts receivable balances may increase; if collection measures are ineffective or customer payment ability changes, it could lead to working capital strain and bad debt risk[78] - Risk of changes in tax preferential policies: The company enjoys high-tech enterprise income tax incentives, integrated circuit enterprise VAT additional deduction policies, etc.; if policies are adjusted or the company no longer meets the conditions, it will adversely affect operating performance[79] Key Operating Performance During the Reporting Period During the reporting period, the company's operating revenue increased by 15.30% year-on-year, but net profit decreased by 44.67%. This section details the reasons for changes in main business-related accounts, the impact of non-main business on profit, and significant changes in asset and liability conditions Main Business Financial Analysis This section analyzes changes in the company's main financial statement accounts, with operating revenue growing by 15.30%, but significant increases in administrative expenses, financial expenses, and R&D expenses, leading to a substantial decrease in net cash flow from operating activities Financial Statement Account Fluctuation Analysis Table | Account | Current Period (Million Yuan) | Prior Period (Million Yuan) | Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 179.08 | 155.32 | 15.30 | | Operating Cost | 131.78 | 112.05 | 17.61 | | Selling Expenses | 8.50 | 7.33 | 15.95 | | Administrative Expenses | 20.06 | 10.04 | 99.74 | | Financial Expenses | 3.19 | 0.60 | 434.06 | | R&D Expenses | 17.44 | 12.34 | 41.37 | | Net Cash Flow from Operating Activities | -2.73 | 0.32 | -959.04 | | Net Cash Flow from Investing Activities | 12.63 | 3.08 | 310.18 | | Net Cash Flow from Financing Activities | -1.98 | -10.95 | 81.92 | - Reasons for change in administrative expenses: Increased equity incentive expenses and compensation for management personnel, depreciation of new office buildings, and intermediary fees during the reorganization period[83] - Reasons for change in financial expenses: Increased loan interest[83] - Reasons for change in net cash flow from operating activities: Increased employee compensation and intermediary fees paid[84] Impact of Non-Main Business on Profit During the reporting period, the company's investment income significantly increased, primarily due to profit contributions from associated enterprises and interest income from large-denomination certificates of deposit - The company's investment income for the reporting period was 12.5381 million Yuan, mainly due to profits from associated enterprises and interest from large-denomination certificates of deposit purchased by the enterprise[85] Asset and Liability Analysis This section analyzes changes in the company's asset and liability structure, with significant increases in trading financial assets, notes receivable financing, prepayments, other current assets, short-term borrowings, and other payables. Additionally, it discloses the restricted status of notes receivable and other non-current assets Changes in Asset and Liability Status | Item Name | Current Period End (Million Yuan) | Current Period End as % of Total Assets | Prior Year End (Million Yuan) | Prior Year End as % of Total Assets | Change from Prior Year End (%) | Explanation | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Trading Financial Assets | 0.10 | 0.01 | - | - | - | Mainly due to purchase of wealth management products | | Notes Receivable Financing | 19.22 | 1.35 | 14.33 | 1.02 | 34.10 | Mainly due to increased bank acceptance bills held from state-owned banks and listed joint-stock banks in current period | | Prepayments | 3.35 | 0.24 | 1.19 | 0.09 | 181.12 | Mainly due to increased prepayment for equipment | | Other Current Assets | 3.84 | 0.27 | 2.05 | 0.15 | 87.56 | Mainly due to increased prepayment for intermediary service fees during asset reorganization | | Short-term Borrowings | 62.55 | 4.39 | 10.75 | 0.77 | 481.98 | Mainly due to new working capital loans in current period | | Other Payables | 19.82 | 1.39 | 1.81 | 0.13 | 996.92 | Mainly due to accrued annual cash dividends not yet distributed in current period | Major Asset Restrictions as of the End of the Reporting Period | Item | Period End (Million Yuan) | Type of Restriction | Restriction Details | | :--- | :--- | :--- | :--- | | Notes Receivable | 45.08 | Other | Discounted/Endorsed bills not yet due | | Other Non-current Assets | 11.00 | Other | Letter of credit margin | Investment Status Analysis This section analyzes the company's investment activities, including financial assets measured at fair value and the financial status of major controlled and associated companies, with Hengsuo Huawei Electronics Co., Ltd. contributing significant net profit as an associated company Financial Assets Measured at Fair Value | Asset Category | Beginning Balance (Million Yuan) | Amount Purchased in Current Period (Million Yuan) | Amount Sold/Redeemed in Current Period (Million Yuan) | Other Changes (Million Yuan) | Ending Balance (Million Yuan) | | :--- | :--- | :--- | :--- | :--- | :--- | | Trading Financial Assets | - | 0.10 | - | - | 0.10 | | Notes Receivable Financing | 14.33 | - | - | 4.89 | 19.22 | | Total | 14.33 | 0.10 | - | 4.89 | 19.32 | Major Controlled and Associated Companies | Company Name | Company Type | Total Assets (Million Yuan) | Net Assets (Million Yuan) | Net Profit (Million Yuan) | Main Business | | :--- | :--- | :--- | :--- | :--- | :--- | | Lianyungang Huahai | Subsidiary | 32.21 | 30.79 | -1.13 | R&D, manufacturing, and sales of new adhesives | | Lianyungang Huahaikexin | Subsidiary | 6.20 | 1.75 | -1.27 | New material technology R&D; new material technology promotion services; rubber product manufacturing, sales; high-quality synthetic rubber sales | | Hengsuo Huawei | Associated Company | 552.56 | 429.42 | 24.01 | Epoxy molding compounds, electrical | Corporate Governance, Environment, and Society This section covers changes in the company's governance structure, including board and management changes, profit distribution plans, and equity incentive programs Changes in Directors, Supervisors, Senior Management, and Core Technical Personnel This section discloses changes in the company's directors, senior management, and core technical personnel, including the election of the fourth board of directors and the appointment of new senior management, as well as significant governance structure adjustments to abolish the Board of Supervisors and integrate its statutory functions into the Board Audit Committee, in accordance with the revised Company Law - The company has elected members of the fourth Board of Directors and appointed a new term of senior management[99] - In accordance with the latest revision of the Company Law, the company has abolished the Board of Supervisors and integrated its statutory functions into the Board Audit Committee[99] - Criteria for identifying core technical personnel include: R&D field, participation in R&D projects and responsibilities undertaken, contribution to the company's actual production and operation, industry experience, professional background, important positions, patent applications, etc[101] Profit Distribution Plan This section explicitly states that the company will not undertake profit distribution or capital reserve to share capital increase for the semi-annual period - Proposed semi-annual profit distribution plan, capital reserve to share capital increase plan: No[102] Equity Incentive Plan This section outlines the progress of the company's 2024 restricted stock incentive plan, including the board's approval of the draft and the initial grant of restricted shares to incentive recipients - On September 24, 2024, the company's Board of Directors approved the '2024 Restricted Stock Incentive Plan (Draft)'[103] - On November 5, 2024, the company's Board of Directors approved the 'Proposal on the Initial Grant of Restricted Shares to Incentive Recipients'[103] Significant Matters This section details the company's commitments, significant related-party transactions, use of raised funds, and other major events during the reporting period Fulfillment of Commitments This section details various commitments made by the company, actual controllers, shareholders, and directors, supervisors, and senior management during the initial public offering and major asset reorganization, covering share lock-up, stock price stabilization, truthfulness of information disclosure, avoidance of horizontal competition and related-party transactions, and describes their fulfillment status - Joint actual controllers Han Jianglong, Cheng Xingming, Tao Jun, and Deyufeng committed not to transfer or entrust others to manage company shares directly or indirectly held before this offering for 36 months from the date of the company's initial public offering and listing[107][117][118] - The company, joint actual controllers, non-independent directors, and senior management committed to initiating share repurchase or increase measures within three years after the company's stock listing if the stock price triggers stabilization conditions[108][121][123][124][125][126] - The company and relevant parties committed that the prospectus contains no false records, misleading statements, or major omissions, and will bear corresponding legal liabilities and compensation obligations[108][127][128][129][130][131][132][133][134][135][136] - Joint actual controllers and Deyufeng committed to avoiding horizontal competition and not seeking business opportunities belonging to the company for themselves or others[109][143][178] - Joint actual controllers, Deyufeng, Jiangsu Xinchao, Huatian Technology, and directors, supervisors, and senior management committed to avoiding and reducing related-party transactions, adhering to fair and equitable principles, and not exploiting their related-party status for undue benefits[109][144][145][146][147][148][175][189] - Commitments related to major asset reorganization: The listed company and all directors, supervisors, and senior management committed to providing true, accurate, and complete information, not disclosing inside information, not reducing shareholdings, and committed to return compensation measures[111][112][113][160][161][162][165][166][167][168][169][170][171][172][173][174][180][181][182][183][184][185][186][187][188][193][194][195][196] Significant Related-Party Transactions This section discloses the company's routine operating purchase and sales transactions and related-party guarantees with related parties during the reporting period, indicating that the estimated amount for routine related-party transactions has been approved, and the company, as the guaranteed party, received guarantees from its actual controllers and their spouses Routine Operating Related-Party Transactions The company's estimated routine related-party transactions for 2025 total 59.00 million Yuan, approved by the Board of Directors and the Shareholders' Meeting, with related directors abstaining from voting - On January 15, 2025, the company convened a Shareholders' Meeting and approved the 'Proposal on Estimated Routine Related-Party Transactions for 2025', with an estimated total amount of 59.00 million Yuan[199] Related-Party Guarantees The company, as the guaranteed party, received multiple guarantees from actual controller Han Jianglong and his spouse Liu Xuan; some guarantees have been fulfilled, while others are still ongoing Related-Party Guarantees Where the Company is the Guaranteed Party | Guarantor | Guaranteed Amount (Million Yuan) | Guarantee Start Date | Guarantee End Date | Is Guarantee Fulfilled | | :--- | :--- | :--- | :--- | :--- | | Han Jianglong, Liu Xuan | 2.00 | 2024-6-28 | 2025-6-23 | Yes | | Han Jianglong, Liu Xuan | 1.00 | 2025-2-11 | 2025-6-18 | Yes | | Han Jianglong, Liu Xuan | 1.00 | 2025-2-11 | 2025-10-20 | No | | Han Jianglong, Liu Xuan | 3.00 | 2025-6-28 | 2026-6-25 | No | Progress in Use of Raised Funds This section details the overall use of the company's raised funds, progress of IPO investment projects, and cash management of idle raised funds. As of the end of the reporting period, the cumulative investment progress of raised funds was 66.68%, with over-raised funds largely invested, and some IPO investment projects facing risks of delay Overall Use of Raised Funds The company's total raised funds amounted to 706.30 million Yuan, with a net amount of 632.9382 million Yuan. As of the end of the reporting period, cumulative investment of raised funds was 422.0126 million Yuan, with an overall investment progress of 66.68%, and cumulative investment progress of over-raised funds reaching 99.62% Overall Use of Raised Funds | Indicator | Amount (Million Yuan) | | :--- | :--- | | Total Raised Funds | 706.30 | | Net Raised Funds | 632.94 | | Total Committed Investment of Raised Funds in Prospectus or Offering Document | 330.02 | | Total Over-Raised Funds | 302.92 | | Cumulative Investment of Raised Funds as of Period End | 422.01 | | Of which: Cumulative Investment of Over-Raised Funds as of Period End | 301.76 | | Cumulative Investment Progress of Raised Funds as of Period End (%) | 66.68 | | Cumulative Investment Progress of Over-Raised Funds as of Period End (%) | 99.62 | | Amount Invested in Current Year | 17.99 | Details of IPO Investment Projects The high-density integrated circuit and system-level module packaging epoxy molding compound project has a cumulative investment of 54.6153 million Yuan, with 29.68% progress, expected to be completed and put into trial production by December 2025, facing risks of delay. The R&D center upgrade project has a cumulative investment of 65.6361 million Yuan, with 76.32% progress. All over-raised funds have been used to subscribe for a 30% equity stake in Hengsuo Huawei Electronics Co., Ltd. Details of IPO Investment Project Usage | Project Name | Planned Total Investment of Raised Funds (Million Yuan) | Amount Invested in Current Year (Million Yuan) | Cumulative Investment of Raised Funds as of Period End (Million Yuan) | Cumulative Investment Progress as of Period End (%) | | :--- | :--- | :--- | :--- | :--- | | High-Density Integrated Circuit and System-Level Module Packaging Epoxy Molding Compound Project | 184.02 | 8.86 | 54.62 | 29.68 | | R&D Center Upgrade Project | 86.00 | 9.13 | 65.64 | 76.32 | | Replenishment of Working Capital | 60.00 | - | - | - | | Over-Raised Funds - Subscription for 30% Equity in Hengsuo Huawei Electronics Co., Ltd. | 301.76 | - | 301.76 | 100 | - The high-density integrated circuit and system-level module packaging epoxy molding compound project has completed factory building construction, auxiliary facility installation, and main equipment procurement, and is expected to be fully installed and put into trial production by December 2025, but there is a risk of project delay[208] Other Uses of Raised Funds The company utilized idle raised funds for cash management, approved by the Board of Directors, to purchase highly secure, principal-protected products, with limits of up to 574.00 million Yuan and 230.00 million Yuan, respectively - On April 1, 2024, the company approved the use of temporarily idle raised funds up to a maximum of 574.00 million Yuan for cash management[212] - On March 26, 2025, the company again approved the use of temporarily idle raised funds up to a maximum of 230.00 million Yuan for cash management[213] Other Significant Matters This section discloses the company's share repurchase activities during the reporting period, aimed at boosting market confidence and maintaining stock price stability - As of June 30, 2025, the company had cumulatively repurchased 460,567 shares, accounting for 0.57% of the total share capital, with a total payment of 32.4693 million Yuan[215] Share Changes and Shareholder Information This section details the company's share capital changes and shareholder structure, including the top ten shareholders and their restricted share conditions Share Capital Changes This section details the company's share capital changes during the reporting period, primarily reflecting a decrease in restricted shares and an increase in unrestricted tradable shares, due to the lifting of restrictions on some strategic placement shares for public trading Share Change Table | Item | Quantity Before This Change (shares) | Increase/Decrease in This Change (shares) | Quantity After This Change (shares) | | :--- | :--- | :--- | :--- | | I. Restricted Shares | 29,249,905 | -1,009,000 | 28,240,905 | | II. Unrestricted Tradable Shares | 51,446,548 | +1,009,000 | 52,455,548 | | III. Total Shares | 80,696,453 | 0 | 80,696,453 | - On April 7, 2025, 1,009,000 strategically placed restricted shares from the initial public offering were released from restrictions and became tradable[220] Shareholder Information This section discloses the total number of shareholders, the top ten shareholders' shareholdings, and their restricted share conditions as of the end of the reporting period. The company had 9,805 ordinary shareholders, with Han Jianglong and Lianyungang Deyufeng Investment Partnership (Limited Partnership) as the top two shareholders, and actual controllers Han Jianglong, Cheng Xingming, Tao Jun, and Deyufeng forming a concerted action relationship - Total number of ordinary shareholders as of the end of the reporting period: 9,805[223] Top Ten Shareholders' Shareholding | Shareholder Name | Number of Shares Held at Period End (shares) | Percentage (%) | Number of Restricted Shares Held (shares) | Shareholder Nature | | :--- | :--- | :--- | :--- | :--- | | Han Jianglong | 11,241,799 | 13.93 | 11,241,799 | Domestic Natural Person | | Lianyungang Deyufeng Investment Partnership (Limited Partnership) | 10,308,091 | 12.77 | 10,308,091 | Other | | Yang Senmao | 5,390,171 | 6.68 | 0 | Domestic Natural Person | | Tao Jun | 3,459,500 | 4.29 | 3,459,500 | Domestic Natural Person | | Tianshui Huatian Technology Co., Ltd. | 3,257,576 | 4.04 | 0 | State-owned Legal Person | | Cheng Xingming | 3,231,515 | 4.00 | 3,231,515 | Domestic Natural Person | - Company director Tao Jun is the executive partner of Lianyungang Deyufeng Investment Partnership (Limited Partnership). Han Jianglong, Cheng Xingming, and Tao Jun signed a 'Concerted Action Agreement', forming a concerted action relationship[227] Top Ten Restricted Shareholders' Shareholdings and Restriction Conditions | No. | Restricted Shareholder Name | Number of Restricted Shares Held (shares) | Tradable Date | Restriction Conditions | | :--- | :--- | :--- | :--- | :--- | | 1 | Han Jianglong | 11,241,799 | April 4, 2026 | IPO restricted shares, locked up for 36 months from the listing date | | 2 | Lianyungang Deyufeng Investment Partnership (Limited Partnership) | 10,308,091 | April 4, 2026 | IPO restricted shares, locked up for 36 months from the listing date | | 3 | Tao Jun | 3,459,500 | April 4, 2026 | IPO restricted shares, locked up for 36 months from the listing date | | 4 | Cheng Xingming | 3,231,515 | April 4, 2026 | IPO restricted shares, locked up for 36 months from the listing date | Bond-Related Information This section states that the company had no corporate bonds, enterprise bonds, non-financial enterprise debt financing instruments, or convertible corporate bonds during the reporting period - Corporate bonds (including enterprise bonds) and non-financial enterprise debt financing instruments: Not applicable[233] - Convertible corporate bonds: Not applicable[233] Financial Report This section presents the company's unaudited semi-annual financial statements, including the balance sheet, income statement, and cash flow statement, along with detailed notes on accounting policies and financial items Audit Report This section explicitly states that the company's semi-annual report is unaudited - This semi-annual report is unaudited[4] Financial Statements This section provides the company's consolidated and parent company financial statements for the first half of 2025, including the balance sheet, income statement, and cash flow statement, comprehensively reflecting the company's financial position, operating results, and cash flows Consolidated Balance Sheet As of June 30, 2025, the company's consolidated total assets amounted to 1.424 billion Yuan, total liabilities to 408 million Yuan, and total equity attributable to parent company owners to 1.017 billion Yuan Key Data from Consolidated Balance Sheet | Item | June 30, 2025 (Million Yuan) | December 31, 2024 (Million Yuan) | | :--- | :--- | :--- | | Cash and Cash Equivalents | 63.94 | 56.03 | | Trading Financial Assets | 0.10 | - | | Notes Receivable | 54.91 | 67.76 | | Accounts Receivable | 145.33 | 135.63 | | Inventories | 84.57 | 82.89 | | Total Current Assets | 375.70 | 360.17 | | Long-term Equity Investments | 488.11 | 480.25 | | Fixed Assets | 254.72 | 238.73 | | Total Assets | 1,424.36 | 1,402.65 | | Short-term Borrowings | 62.55 | 10.75 | | Accounts Payable | 66.50 | 61.31 | | Total Current Liabilities | 237.28 | 192.17 | | Long-term Borrowings | 141.06 | 141.40 | | Total Liabilities | 407.63 | 363.30 | | Total Equity Attributable to Parent Company Owners | 1,016.56 | 1,039.07 | | Total Liabilities and Equity | 1,424.36 | 1,402.65 | Consolidated Income Statement In the first half of 2025, the company's consolidated total operating revenue was 179 million Yuan, a year-on-year increase of 15.30%. Net profit was 13.6477 million Yuan, net profit attributable to parent company shareholders was 13.7745 million Yuan, basic earnings per share was 0.20 Yuan/share, and diluted earnings per share was 0.17 Yuan/share Key Data from Consolidated Income Statement | Item | H1 2025 (Million Yuan) | H1 2024 (Million Yuan) | | :--- | :--- | :--- | | Total Operating Revenue | 179.08 | 155.32 | | Total Operating Cost | 181.98 | 143.07 | | Operating Profit | 15.14 | 27.29 | | Total Profit | 15.05 | 27.68 | | Net Profit | 13.65 | 24.89 | | Net Profit Attributable to Parent Company Shareholders | 13.77 | 24.89 | | Basic Earnings Per Share (Yuan/share) | 0.20 | 0.31 | | Diluted Earnings Per Share (Yuan/share) | 0.17 | 0.31 | Consolidated Cash Flow Statement In the first half of 2025, the company's net cash flow from operating activities was -2.7322 million Yuan, net cash flow from investing activities was 12.6338 million Yuan, and net cash flow from financing activities was -1.9793 million Yuan. The period-end balance of cash and cash equivalents was 63.9375 million Yuan Key Data from Consolidated Cash Flow Statement | Item | H1 2025 (Million Yuan) | H1 2024 (Million Yuan) | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | -2.73 | 0.32 | | Net Cash Flow from Investing Activities | 12.63 | 3.08 | | Net Cash Flow from Financing Activities | -1.98 | -10.95 | | Net Increase in Cash and Cash Equivalents | 7.91 | -7.47 | | Period-End Balance of Cash and Cash Equivalents | 63.94 | 28.91 | Company Basic Information This section outlines the company's establishment history, share capital evolution, organizational structure, and main operating activities. The company, formerly Jiangsu Huahaichengke New Material Co., Ltd., was established in 2010 and listed on the Shanghai Stock Exchange STAR Market in 2023, primarily engaged in semiconductor packaging materials, including epoxy molding compounds and electronic adhesives - The company's predecessor, Jiangsu Huahaichengke New Material Co., Ltd., was established on December 17, 2010, and listed on the Shanghai Stock Exchange on April 4, 2023[270][271][282] - The company's registered capital is 80,696,453.00 Yuan, with a total share capital of 80,696,453 shares[270] - The company's main operating activities include manufacturing electronic and electrical materials, R&D of microelectronic materials, import and export business, and freight transportation, etc[283] - Main products are epoxy molding compounds and electronic adhesives[283] Basis of Financial Statement Preparation This section states that the company's financial statements are prepared on a going concern basis, in accordance with the Enterprise Accounting Standards issued by the Ministry of Finance and relevant disclosure regulations of the China Securities Regulatory Commission, and confirms no matters or circumstances exist that would cast significant doubt on the going concern assumption for the next 12 months from the end of the reporting period - The company prepares its financial statements on a going concern basis, in accordance with the 'Enterprise Accounting Standards' issued by the Ministry of Finance and the 'Information Disclosure Rules for Companies Issuing Securities to the Public No. 15 - General Provisions for Financial Reports (Revised 2023)' issued by the China Securities Regulatory Commission[285] - The company has no matters or circumstances that would cast significant doubt on the going concern assumption for the 12 months from the end of the reporting period[286] Significant Accounting Policies and Estimates This section elaborates on the significant accounting policies and estimates followed by the company in preparing its financial statements, covering key areas such as business combinations, financial instruments, impairment of receivables, inventories, revenue recognition, government grants, deferred income tax, and share-based payments, ensuring the accuracy and reliability of financial information - The financial statements prepared by the company comply with the requirements of enterprise accounting standards, truly and completely reflecting the company's financial position, operating results, and cash flows, among other relevant information[288] - The company's accounting year runs from January 1 to December 31 of the Gregorian calendar, with 12 months constituting an operating cycle, and uses RMB as its functional currency[289][290][291] - Detailed accounting methods for business combinations under common control and non-common control, as well as methods for preparing consolidated financial statements, are elaborated[296][297][298][299][301][303][304][305][306][307][308] - Financial instruments are classified as financial assets and liabilities measured at amortized cost, at fair value through other comprehensive income, and at fair value through profit or loss, with detailed explanations of their recognition, measurement, and impairment methods[315][317][318][319][320][321][322][323][324][325][326][327][328][329][330][331][332][333][334][335][336][337][338][339] - Notes receivable, accounts receivable, notes receivable financing, and other receivables are all subject to bad debt provisions based on credit risk characteristics, either individually or in portfolios, with clear definitions of portfolio categories and provisioning bases[340][341][342][343][344][345][346][347][348][349][350][351][352] - Inventories are measured at the lower of cost and net realizable value, with issued inventories valued using the weighted average method at month-end, and inventory impairment provisions made based on aging portfolios[353][354][355][356][357][358][359][360][361] - Revenue recognition uses the transfer of control as the judgment criterion, distinguishing between performance obligations satisfied over time and at a point in time, with detailed explanations of specific recognition principles for domestic and export sales[424][425][426][427][428][429][430] - Government grants are classified as asset-related and income-related, generally recognized and measured upon actual receipt, and accounted for using the gross method[435][436][437][439][440][441][442][443] - Deferred income tax assets and liabilities are recognized and measured based on temporary differences between the carrying amounts of assets and liabilities and their tax bases[444][445][446][447] - Share-based payments include equity-settled and cash-settled, with fair value determined based on active market quotes or valuation techniques, and recognized in relevant costs or expenses based on the best estimate of the number of exercisable equity instruments[416][417][418][419][420][421][422][423] Taxation This section lists the main tax categories, tax rates, and various tax preferential policies enjoyed by the company and its subsidiaries, including high-tech enterprise income tax incentives, small-profit enterprise income tax incentives, and VAT additional deduction policies Main Tax Categories and Rates | Tax Category | Tax Rate | | :--- | :--- | | Value-Added Tax | 6%, 13% (Export tax refund 13%) | | Property Tax | 1.2%, 12% | | Urban Maintenance and Construction Tax | 7% | | Education Surcharge | 3% | | Local Education Surcharge | 2% | | Corporate Income Tax | 15%, 20% | - The company and its subsidiary Lianyungang Huahai enjoy high-tech enterprise income tax incentives, with corporate income tax levied at a reduced rate of 15%[472] - Lianyungang Huahai and Lianyungang Huahaikexin enjoy small-profit enterprise income tax incentives, with taxable income calculated at a reduced 25% and corporate income tax paid at a rate of 20%[473][474] - The company enjoys integrated circuit enterprise VAT additional deduction policy, with 15% of current deductible input VAT added to reduce payable VAT[476] - Lianyungang Huahai enjoys advanced manufacturing enterprise VAT additional deduction policy, with 5% of current deductible input VAT added to reduce payable VAT[476] - Lianyungang Huahai enjoys a 50% reduction in resource tax, urban maintenance and construction tax, property tax, urban land use tax, stamp duty, cultivated land occupation tax, education surcharge, and local education surcharge for small and micro enterprises[477] Notes to Consolidated Financial Statement Items This section provides detailed notes for each item in the consolidated financial statements, including cash and cash equivalents, trading financial assets, notes receivable, accounts receivable, inventories, short-term borrowings, employee compensation payable, long-term borrowings, capital reserves, treasury stock, undistributed profits, operating revenue and costs, R&D expenses, financial expenses, investment income, etc., explaining period-end balances, changes, and main components - Period-end balance of cash and cash equivalents was 63.9375 million Yuan, with no restricted funds due to mortgage, pledge, seizure, freezing, or detention of ownership or usage rights at period-end[479] - Period-end balance of trading financial assets was 100,346.19 Yuan, mainly consisting of bank wealth management products[481][482] - Period-end balance of notes receivable was 54.9059 million Yuan, of which bank acceptance bills endorsed or discounted and not yet due at the balance sheet date amounted to 45.0759 million Yuan[483][484] - Period-end carrying value of accounts receivable was 145.3350 million Yuan, with bad debt provision of 13.3889 million Yuan[161][493] - Period-end carrying value of inventories was 84.5710 million Yuan, with inventory impairment provision of 840,345.43 Yuan[525] - Period-end balance of short-term borrowings was 62.5482 million Yuan, mainly including credit borrowings and discounted notes receivable not yet due that have not been derecognized[563] - Period-end balance of employee compensation payable was 5.0390 million Yuan[569] - Period-end balance of long-term borrowings was 141.06 million Yuan, primarily credit borrowings[580] - Period-end balance of capital reserves was 814.9137 million Yuan, with an increase of 11.6028 million Yuan in the current period mainly due to the equity incentive plan[584] - Period-end balance of treasury stock was 32.4725 million Yuan, resulting from share repurchases in the current period[586] - Period-end balance of undistributed profits was 134.0255 million Yuan[592] - Operating revenue for the current period was 179.0760 million Yuan, and operating cost for the current period was 131.7839 million Yuan[595] - R&D expenses for the current period amounted to 17.4437 million Yuan[601] - Financial expenses for the current period amounted to 3.1941 million Yuan[602] - Investment income for the current period amounted to 12.5381 million Yuan, ma