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汇隆新材(301057) - 2025 Q2 - 季度财报

Section I Important Notice, Table of Contents, and Definitions This section provides crucial disclaimers, the report's structure, and definitions of key terms to ensure clear understanding of the semi-annual report Important Notice The company's board of directors, supervisory board, and senior management guarantee the truthfulness, accuracy, and completeness of the semi-annual report content - The company's board of directors, supervisory board, and senior management guarantee the truthfulness, accuracy, and completeness of the report content and assume legal responsibility3 - Forward-looking statements regarding future plans and development strategies in the report do not constitute substantial commitments, and investors should be aware of investment risks3 - The company plans not to distribute cash dividends, bonus shares, or convert capital reserves into share capital for the semi-annual period4 Table of Contents This report comprises eight main chapters covering company operations, financials, governance, and significant matters, providing comprehensive information for investors - The report includes eight main chapters covering company operations, financials, governance, and significant matters7 Definitions This section defines key terms and abbreviations used in the report, including company names, subsidiaries, financial units, and specialized terms related to polyester fiber manufacturing and environmental certifications, ensuring clarity - The reporting period refers to January 1, 2025, to June 30, 202510 - Huilong New Material's main products are differentiated colored polyester filament yarns such as DTY, FDY, and POY10 - Green fiber refers to chemical fibers made from biomass or recyclable materials, produced with low carbon emissions and environmental protection, and are non-polluting or recyclable after disposal11 Section II Company Profile and Key Financial Indicators This section provides an overview of the company's basic information and presents key financial data and performance metrics for the reporting period Company Profile Zhejiang Huilong New Material Co., Ltd., stock code 301057, is listed on the Shenzhen Stock Exchange, with Shen Shunhua as its legal representative - Stock Abbreviation: Huilong New Material, Stock Code: 301057, Listing Exchange: Shenzhen Stock Exchange13 - Legal Representative: Shen Shunhua13 - The company's registered address, office address, website, and email address remained unchanged during the reporting period15 Key Accounting Data and Financial Indicators In the first half of 2025, the company's operating revenue increased by 8.75% to 441.12 million yuan, and net profit attributable to shareholders increased by 35.41% to 25.58 million yuan Key Accounting Data and Financial Indicators for H1 2025 | Indicator | Current Period (Yuan) | Prior Period (Yuan) | YoY Change | | :--- | :--- | :--- | :--- | | Operating Revenue | 441,115,617.47 | 405,616,732.53 | 8.75% | | Net Profit Attributable to Shareholders of Listed Company | 25,580,664.35 | 18,891,823.07 | 35.41% | | Net Profit Attributable to Shareholders of Listed Company (Excluding Non-Recurring Gains/Losses) | 15,356,213.09 | 19,493,011.77 | -21.22% | | Net Cash Flow from Operating Activities | 13,666,732.54 | -42,341,542.70 | 132.28% | | Basic Earnings Per Share (Yuan/Share) | 0.22 | 0.16 | 37.50% | | Diluted Earnings Per Share (Yuan/Share) | 0.22 | 0.16 | 37.50% | | Weighted Average Return on Net Assets | 3.34% | 2.44% | 0.90% | | End of Current Period (Yuan) | End of Prior Year (Yuan) | Change from Prior Year-End | | | Total Assets | 1,570,662,523.81 | 1,237,359,835.38 | 26.94% | | Net Assets Attributable to Shareholders of Listed Company | 756,414,039.75 | 754,226,399.13 | 0.29% | Differences in Accounting Data Under Domestic and International Accounting Standards The company reported no differences in net profit and net assets between international/overseas accounting standards and Chinese accounting standards during the reporting period - During the reporting period, there were no differences in net profit and net assets between financial reports disclosed under International Accounting Standards and Chinese Accounting Standards19 - During the reporting period, there were no differences in net profit and net assets between financial reports disclosed under overseas accounting standards and Chinese Accounting Standards20 Non-Recurring Gains and Losses and Amounts The company's total non-recurring gains and losses for the reporting period amounted to 10.22 million yuan, primarily from disposal of non-current assets, government grants, and fair value changes of financial assets Non-Recurring Gains and Losses and Amounts | Item | Amount (Yuan) | Description | | :--- | :--- | :--- | | Gains/losses on disposal of non-current assets (including reversal of impairment provisions) | 3,098,018.90 | | | Government grants recognized in current profit/loss (excluding those closely related to normal business operations, compliant with national policies, enjoyed by fixed standards, and with continuous impact on company's profit/loss) | 2,968,500.00 | | | Fair value changes and disposal gains/losses of financial assets and liabilities held by non-financial enterprises, excluding effective hedge accounting related to normal business operations | 5,990,118.04 | Mainly due to fair value changes of the company's foreign exchange hedging instruments at period-end | | Other non-operating income and expenses apart from the above | -23,691.57 | | | Less: Income tax impact | 1,808,494.11 | | | Total | 10,224,451.26 | | Section III Management Discussion and Analysis This section provides a comprehensive analysis of the company's business operations, financial performance, core competitiveness, and risk factors during the reporting period Principal Business Activities During the Reporting Period The company specializes in the R&D, production, and sales of dope-dyed fibers, primarily differentiated colored polyester filament yarns, maintaining a top-three market position in its niche - The company primarily engages in the R&D, production, and sales of dope-dyed fibers, aligning with national energy-saving and environmental protection strategies, with main products including differentiated colored polyester filament yarns such as DTY, FDY, and POY2531 - From January to June 2025, chemical fiber output increased by 4.91% year-on-year, with a slowdown in growth; chemical fiber prices fluctuated with crude oil, with declines greater than raw materials26 - Chemical fiber exports increased by 14.73% year-on-year, with polyester filament yarn exports growing by 10.90% year-on-year26 - The company ranks among the top three in the dope-dyed polyester filament yarn segment and has been recognized as a national-level "Specialized, Refined, Unique, and New 'Little Giant' Enterprise" and a "Green Factory"29 - The company holds an equity stake in Chongxiaoshe, leveraging capital empowerment and resource synergy to expand its upstream and downstream industrial chain and seek growth breakthroughs30 Industry Overview The company operates in the polyester fiber manufacturing sector, which experienced slowing output growth and price declines in H1 2025, despite strong export performance and increasing investment - The company belongs to "C28 Chemical Fiber Manufacturing" specifically "C2822 Polyester Fiber Manufacturing"25 - From January to June 2025, chemical fiber output increased by 4.91% year-on-year, with a slowdown in growth; prices of polyester POY and FDY declined more than PTA26 - From January to June, total exports of major chemical fiber products reached 3.45 million tons, a year-on-year increase of 14.73%26 - Operating revenue in the chemical fiber industry decreased by 6.9% year-on-year, and total profit decreased by 2.81% year-on-year27 - Fixed asset investment in the textile and chemical fiber industries increased by 14.5% and 10.6% year-on-year, respectively28 Company's Principal Business Activities The company's core business involves the R&D, production, and sales of differentiated colored polyester filament yarns using dope-dyeing technology, which offers significant environmental benefits over traditional dyeing methods - The company's main business is the production of differentiated colored polyester filament yarns such as DTY, FDY, and POY using dope-dyeing technology31 - Dope-dyeing technology features uniform coloring, good colorfastness, energy saving, and environmental protection, effectively addressing high energy consumption, high water consumption, and high COD emissions in traditional dyeing industries at the source33 - The company's products are widely applied in various downstream sectors, including home textile fabrics like wall coverings, curtains, and sofa fabrics, apparel fabrics, flame-retardant blackout fabrics, automotive and high-speed rail interiors, decorative materials, and outdoor products33 Company Operating Performance In the first half of 2025, the company achieved 441.12 million yuan in operating revenue, a 8.75% year-on-year increase, with net profit attributable to shareholders growing by 35.41% to 25.58 million yuan Operating Performance for H1 2025 | Indicator | Amount (10,000 Yuan) | YoY Growth | | :--- | :--- | :--- | | Operating Revenue | 44,111.56 | 8.75% | | Net Profit Attributable to Shareholders of Listed Company | 2,558.07 | 35.41% | | Earnings Per Share | 0.22 | 37.50% | - In June 2025, the company's Indonesia West Java production base officially commenced operations, marking a new phase of capacity implementation in its internationalization strategy34 - The company launched a series of differentiated products to meet diverse market demands, expanding into downstream applications of green and environmentally friendly fibers such as outdoor products and sportswear34 Business Model The company's business model is characterized by continuous and centralized procurement, production based on sales orders with safety stock, and a sales approach primarily through direct sales complemented by distribution - Procurement Model: Selects several suppliers as partners, adopting a total volume agreement with phased delivery; the production department proposes demands based on plans, and the procurement department executes35 - Production Model: Follows the principle of "production based on sales, safety stock, and moderate adjustment," adjusting production according to annual/monthly sales plans36 - Sales Model: Primarily direct sales, supplemented by distribution; direct sales facilitate customer feedback and production adjustments, while distributors operate on a buy-out basis37 - Settlement Method: Monthly settlement or payment upon delivery for customers, with some customers granted credit terms, and scattered customers requiring payment upon delivery37 Key Performance Drivers The company's performance is primarily driven by increasing market demand for multi-functional, high-performance, and green polyester filament yarns, accelerated adoption of dope-dyeing technology due to environmental policies, strong brand recognition, and continuous technological innovation - Market Demand: Polyester filament yarn demand is becoming multi-functional, high-performance, and green, with the proportion of dope-dyeing technology applications gradually increasing38 - Brand Building and Customer Recognition: The company focuses on brand building, gaining customer recognition and establishing stable cooperative relationships through long-term business interactions and product stability39 - Technological Innovation: Based on technological accumulation and R&D advantages, the company develops differentiated products, enhances added value, and meets diverse market demands40 Analysis of Core Competencies The company's core competencies include continuous innovation in dope-dyeing technology, significant energy-saving and environmental advantages, strong brand recognition, strategic location in the Yangtze River Delta, and a stable, professional management team - Technological Advantage: The company invests heavily in R&D for dope-dyeing technology, mastering thousands of color schemes and various product specifications, and holding dozens of patents related to green fibers41 - Energy-Saving and Environmental Protection Advantage: Dope-dyed fiber technology is energy-saving and environmentally friendly, reducing high energy consumption and pollution issues, and has obtained multiple certifications such as "Green Factory," GRS, RCS, OBP, and Oeko-Tex Standard 10043 - Brand Advantage: The company enjoys high brand recognition in the dope-dyed polyester filament yarn industry, participates in drafting industry standards, and its product output and sales rank among the top three in the segmented industry44 - Geographic Advantage: The production base is located in the Yangtze River Delta region, providing stable and convenient raw material supply channels and abundant downstream customer resources45 - Management Advantage: Possesses a stable management team with strong technical capabilities and rich experience, ensuring consistency and efficiency in strategy execution46 Analysis of Main Business Operations In H1 2025, the company's operating revenue increased by 8.75%, while operating costs rose by 8.31%; sales and administrative expenses increased due to business expansion and personnel costs, but financial expenses decreased significantly due to higher interest income Year-on-Year Changes in Key Financial Data | Indicator | Current Period (Yuan) | Prior Period (Yuan) | YoY Change | Reason for Change | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue | 441,115,617.47 | 405,616,732.53 | 8.75% | | | Operating Cost | 375,560,889.77 | 346,741,581.49 | 8.31% | | | Selling Expenses | 14,902,660.35 | 11,285,361.14 | 32.05% | Mainly due to business expansion, increased employee compensation, and export expenses | | Administrative Expenses | 15,314,659.60 | 12,736,055.85 | 20.25% | Mainly due to increased employee compensation for management personnel | | Financial Expenses | -470,368.67 | -2,617,435.06 | -82.03% | Mainly due to increased interest expenses, decreased interest income, and exchange gains | | Income Tax Expense | 1,833,997.38 | 275,953.07 | 564.60% | Mainly due to increased total profit | | R&D Investment | 18,692,768.97 | 19,507,412.60 | -4.18% | | | Net Cash Flow from Operating Activities | 13,666,732.54 | -42,341,542.70 | 132.28% | Mainly due to increased cash received from sales of goods and provision of services driven by sales revenue growth | | Net Cash Flow from Financing Activities | 235,535,846.19 | 54,213,672.56 | 334.46% | Mainly due to increased bank borrowings | Products or Services Accounting for Over 10% of Revenue | Product or Service | Operating Revenue (Yuan) | Operating Cost (Yuan) | Gross Margin | YoY Change in Operating Revenue | YoY Change in Operating Cost | YoY Change in Gross Margin | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Differentiated Colored Polyester Filament Yarn DTY | 199,470,476.55 | 162,260,849.33 | 18.65% | 10.55% | 10.53% | 0.00% | | Differentiated Colored Polyester Filament Yarn FDY | 224,030,640.13 | 200,036,175.11 | 10.71% | 7.13% | 6.09% | 0.88% | Analysis of Non-Core Business Operations Non-core business contributions primarily stemmed from fair value changes of 5.99 million yuan (21.85% of total profit), mainly from foreign exchange hedging instruments, and investment income of 0.34 million yuan (1.25% of total profit) from external investments Non-Core Business Analysis | Item | Amount (Yuan) | Percentage of Total Profit | Reason for Formation | Sustainability | | :--- | :--- | :--- | :--- | :--- | | Investment Income | 343,440.00 | 1.25% | Mainly from dividends on the company's external investments | No | | Fair Value Change Gains/Losses | 5,990,118.04 | 21.85% | Mainly due to fair value changes of the company's foreign exchange hedging instruments at period-end | No | | Asset Impairment | -1,190,425.48 | -4.34% | Mainly due to the company's inventory impairment provision | No | Analysis of Assets and Liabilities As of the reporting period end, total assets increased by 26.94%, driven by significant growth in construction in progress, while long-term borrowings increased by 10.94% to support project development Significant Changes in Asset Composition | Item | Amount at Current Period-End (Yuan) | Percentage of Total Assets | Amount at Prior Year-End (Yuan) | Percentage of Total Assets | Change in Proportion | Explanation of Significant Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Cash and Bank Balances | 166,209,268.85 | 10.58% | 90,662,563.84 | 7.33% | 3.25% | | | Accounts Receivable | 45,554,812.13 | 2.90% | 52,289,900.70 | 4.23% | -1.33% | | | Inventories | 182,382,551.96 | 11.61% | 171,401,348.35 | 13.85% | -2.24% | | | Fixed Assets | 367,734,804.26 | 23.41% | 376,539,545.79 | 30.43% | -7.02% | Mainly due to no significant change in the company's total fixed assets, leading to a relatively smaller proportion of total assets | | Construction in Progress | 518,642,130.81 | 33.02% | 270,462,300.28 | 21.86% | 11.16% | Mainly due to investment in the company's ongoing projects | | Short-term Borrowings | 116,655,209.58 | 7.43% | 58,043,506.85 | 4.69% | 2.74% | | | Long-term Borrowings | 315,659,232.88 | 20.10% | 113,396,446.85 | 9.16% | 10.94% | Mainly due to increased bank borrowings during the reporting period | Assets and Liabilities Measured at Fair Value | Item | Beginning Balance (Yuan) | Fair Value Change Gains/Losses for Current Period (Yuan) | Ending Balance (Yuan) | | :--- | :--- | :--- | :--- | | Financial Assets Held for Trading | -428,281.04 | 5,990,118.04 | 5,561,837.00 | | Investments in Other Equity Instruments | 6,000,000.00 | | 12,000,000.00 | | Receivables Financing | 4,473,929.93 | | 9,546,426.71 | | Total | 10,045,648.89 | 5,990,118.04 | 27,108,263.71 | Asset Restrictions as of the End of the Reporting Period | Item | Book Balance (Yuan) | Book Value (Yuan) | Type of Restriction | Restriction Details | | :--- | :--- | :--- | :--- | :--- | | Cash and Bank Balances | 9,530,830.71 | 9,530,830.71 | Pledged | Bank acceptance bill margin | | Intangible Assets | 109,366,893.50 | 106,574,842.18 | Mortgaged | Long-term borrowings, letter of credit mortgage | | Construction in Progress | 489,684,831.20 | 489,684,831.20 | Mortgaged | Long-term borrowings, letter of credit mortgage | | Total | 608,639,555.41 | 605,847,504.09 | | | Analysis of Investment Activities The company had no new investments during the reporting period but continued significant non-equity investments, such as the "Annual 270,000-ton Green New Material and 10 Million Sets of Outdoor Products Digital Factory Project," and engaged in derivative investments for hedging foreign exchange risks - Investment amount for the reporting period was 0.00 yuan, consistent with the prior period60 Significant Non-Equity Investments in Progress During the Reporting Period | Project Name | Investment Method | Is it Fixed Asset Investment | Industry Involved in Investment Project | Amount Invested in Current Period (Yuan) | Cumulative Actual Investment Amount (Yuan) | Source of Funds | Project Progress | Expected Return | Cumulative Realized Return as of Reporting Period-End | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Annual 270,000-ton Green New Material and 10 Million Sets of Outdoor Products Digital Factory Project | Self-built | Yes | Chemical Fiber Manufacturing | 247,528,280.19 | 599,051,724.70 | Own and self-raised funds | 44.37% | 0.00 | 0.00 | Financial Assets Measured at Fair Value | Asset Category | Initial Investment Cost (Yuan) | Fair Value Change Gains/Losses for Current Period (Yuan) | Amount Purchased in Reporting Period (Yuan) | Amount Sold in Reporting Period (Yuan) | Ending Balance (Yuan) | Source of Funds | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Other | 10,045,648.89 | 5,990,118.04 | 51,230,192.24 | 17,622,511.09 | 27,108,263.71 | Own funds | - The company engages in derivative investments for hedging purposes, primarily forward foreign exchange settlements and options, with the period-end investment amount accounting for 0.73% of net assets78 Use of Raised Funds The company's 2021 IPO raised 168.29 million yuan, with 154.51 million yuan (91.82%) utilized by June 30, 2025; the original project was changed to "Annual 100,000-ton Green New Material Project" due to land recovery, with 117.45 million yuan invested to date Overall Use of Raised Funds | Net Raised Funds (10,000 Yuan) | Total Raised Funds Cumulatively Used (10,000 Yuan) | Proportion of Raised Funds Used at Reporting Period-End | Total Raised Funds with Changed Use (10,000 Yuan) | Proportion of Raised Funds with Changed Use | Total Unused Raised Funds (10,000 Yuan) | | :--- | :--- | :--- | :--- | :--- | :--- | | 16,828.56 | 15,451.23 | 91.82% | 13,873.14 | 82.44% | 2,058.93 | - The original IPO project, "Phase I of Annual 150,000-ton Smart Environmental Dope-Dyed Fiber Project," was changed to the new IPO project, "Annual 100,000-ton Green New Material Project," due to land reclamation by the government7074 Details of Changed Raised Funds Projects | New Project Name | Total Raised Funds Planned for Investment (10,000 Yuan) | Cumulative Actual Investment Amount as of Period-End (10,000 Yuan) | Investment Progress as of Period-End | Date Project Reaches Intended Usable State | | :--- | :--- | :--- | :--- | :--- | | Annual 100,000-ton Green New Material Project | 13,873.14 | 11,744.96 | 84.66% | March 1, 2026 | Entrusted Wealth Management, Derivative Investments, and Entrusted Loans The company did not engage in entrusted wealth management or entrusted loans during the reporting period but conducted derivative investments, primarily forward foreign exchange settlements and options, for hedging purposes, resulting in 5.99 million yuan in fair value change gains and 0.01 million yuan in actual gains - The company had no entrusted wealth management or entrusted loans during the reporting period7580 Derivative Investments for Hedging Purposes During the Reporting Period | Derivative Investment Type | Initial Investment Amount (10,000 Yuan) | Fair Value Change Gains/Losses for Current Period (10,000 Yuan) | Ending Investment Amount (10,000 Yuan) | Proportion of Ending Investment Amount to Company's Net Assets at Reporting Period-End | | :--- | :--- | :--- | :--- | :--- | | Forward foreign exchange settlements, foreign exchange options | 3,250.73 | 599.01 | 556.18 | 0.73% | - During the reporting period, derivative investment activities generated actual gains of 0.011 million yuan78 - The company has established the "Foreign Exchange Hedging Business Management System," which clearly defines operational principles, approval authority, business management, internal operating procedures, information isolation measures, and internal risk management for foreign exchange hedging activities78 Significant Asset and Equity Disposals The company did not undertake any significant asset or equity disposals during the reporting period - The company did not dispose of significant assets during the reporting period81 - The company did not dispose of significant equity during the reporting period82 Analysis of Major Holding and Associate Companies The company has no significant holding or associate company information to disclose for the reporting period - The company has no significant holding or associate company information that should be disclosed during the reporting period82 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 period83 Risks Faced by the Company and Countermeasures The company faces risks including performance volatility, insufficient innovation, core technology leakage, market demand fluctuations, raw material price volatility, macroeconomic shifts, and idle capacity, which are addressed through continuous innovation, market expansion, optimized procurement, and talent development - The company faces performance volatility risk, with non-recurring net profit decreasing by 21.22% year-on-year in the first half of 202583 - Innovation Risk: Requires continuous development of new products and technologies, and their timely conversion and application84 - Raw Material Price Fluctuation Risk: Polyester chip prices are influenced by crude oil and account for approximately 80% of main business costs88 - Countermeasures include: continuous technological innovation, market development (green fibers, Belt and Road Initiative), efficient raw material procurement, and strengthening talent development91929394 Registration Form for Investor Relations Activities During the Reporting Period On May 15, 2025, the company hosted an online performance briefing for 2024, engaging with investors via a network platform - On May 15, 2025, the company hosted an online performance briefing for 2024, engaging with investors via a network platform95 Implementation of Market Value Management System and Valuation Enhancement Plan The company approved its "Market Value Management System" on April 21, 2025, to standardize market value management and protect investor interests, but no valuation enhancement plan was disclosed - On April 21, 2025, the company approved the "Proposal on Formulating the Market Value Management System" to standardize market value management practices96 - The company did not disclose a valuation enhancement plan96 Implementation of "Quality and Return Dual Enhancement" Action Plan The company did not disclose any announcement regarding the "Quality and Return Dual Enhancement" action plan during the reporting period - The company did not disclose an announcement regarding the "Quality and Return Dual Enhancement" action plan97 Section IV Corporate Governance, Environment, and Society This section details changes in the company's governance structure, including personnel adjustments, profit distribution plans, equity incentive implementation, and environmental and social responsibility disclosures Changes in Directors, Supervisors, and Senior Management During the reporting period, Mr. Zhou Guoqiang resigned as Board Secretary and Deputy General Manager on February 28, 2025, and Ms. Xie Minglan was appointed to these roles on April 21, 2025 Changes in Directors, Supervisors, and Senior Management | Name | Position Held | Type | Date | Reason | | :--- | :--- | :--- | :--- | :--- | | Zhou Guoqiang | Board Secretary, Deputy General Manager | Dismissal | February 28, 2025 | Personal reasons | | Xie Minglan | Board Secretary, Deputy General Manager | Appointment | April 21, 2025 | Work transfer | Profit Distribution and Capital Reserve Conversion to Share Capital for the Current Reporting Period The company plans not to distribute cash dividends, bonus shares, or convert capital reserves into share capital for the semi-annual period - The company plans not to distribute cash dividends, bonus shares, or convert capital reserves into share capital for the semi-annual period100 Implementation of Equity Incentive Plans, Employee Stock Ownership Plans, or Other Employee Incentive Measures The second restricted period of the company's 2022 restricted stock incentive plan was lifted, with 396,000 shares becoming tradable on January 9, 2025; however, 421,000 restricted shares were repurchased and cancelled due to unmet 2024 performance targets, reducing total shares to 116,969,438 - On January 7, 2025, the company completed the listing and circulation of 396,000 shares from the second restricted period of the 2022 restricted stock incentive plan's initial grant, with the listing date being January 9, 2025101 - Given that the company's 2024 performance did not meet the conditions for lifting restrictions on the third restricted period of the initial grant and the second restricted period of the reserved grant, the company repurchased and cancelled 421,000 restricted shares that had been granted but not yet unrestricted102 - Following this repurchase and cancellation, the company's total shares changed from 117,390,438 shares to 116,969,438 shares102 Environmental Information Disclosure Zhejiang Huilong New Material Co., Ltd. is listed among enterprises required to disclose environmental information, and its reports are available on the Zhejiang Provincial Department of Ecology and Environment website - The company and its major subsidiaries are included in the list of enterprises required to disclose environmental information by law105 - Zhejiang Huilong New Material Co., Ltd.'s environmental information disclosure report can be found on the website of the Zhejiang Provincial Department of Ecology and Environment105 Social Responsibility The company is committed to balancing economic, environmental, and social benefits by ensuring compliant operations, protecting stakeholder rights, prioritizing employee well-being, fostering strong relationships with partners, promoting eco-friendly production, and actively engaging in social welfare initiatives - The company strictly adheres to laws and regulations, improves corporate governance, protects the legitimate rights and interests of investors and creditors, and has no fund occupation or external guarantees by major shareholders or related parties107 - The company adheres to a people-oriented approach, complies with labor laws, focuses on employee health and safety, values talent development, and builds harmonious labor relations108 - The company has established a comprehensive supplier evaluation system, built long-term stable cooperative relationships with customers, and upholds the philosophy of "integrity-based, innovation for win-win"109 - The company adopts dope-dyeing technology, which is energy-saving and environmentally friendly, reducing wastewater, exhaust gas, and COD emissions, and strictly implements the ISO 14000 environmental management system110 - The company actively participates in social welfare initiatives, including voluntary blood donation, charitable donations, paired assistance for education, poverty alleviation, local construction, and disaster relief efforts112 Section V Significant Matters This section covers important events and disclosures, including commitments, related party transactions, litigation, and other material developments affecting the company [Fulfillment of Commitments by Controlling Shareholder, Shareholders, Related Parties, Acquirers, and the Company During the Reporting Period and Unfulfilled Commitments as of Reporting Period-End](index=30&type=section&id=5.1%20%E5%85%AC%E5%8F%B8%E5%AE%9E%E9%99%85%E6%8E%A7%E5%88%B6%E4%BA%BA%E3%80%81%E8%82%A1%E4%B8%9C%E3%80%81%E5%85%B3