中达安(300635) - 2025 Q2 - 季度财报

Important Notices, Table of Contents, and Definitions Important Notices The company's management guarantees the authenticity and completeness of the semi-annual report and plans no dividend distribution for the period - The Board of Directors, Supervisory Committee, and senior management guarantee the truthfulness, accuracy, and completeness of the semi-annual report's content, and bear individual and joint legal responsibility[4] - The company's responsible person Chen Tianbao, chief accounting officer Yang Ping, and head of the accounting department Yang Ping declare that the financial reports in this semi-annual report are true, accurate, and complete[4] - The company plans not to distribute cash dividends, issue bonus shares, or convert capital reserves into share capital[5] Table of Contents The report's table of contents clearly lists eight main sections, providing comprehensive navigation for investors Directory of Documents for Inspection Reference documents, including signed financial statements and the original semi-annual report, are available at the company's Board of Directors' office - Documents for inspection include financial statements signed and sealed by the company's responsible person, chief accounting officer, and head of the accounting department; originals of all company documents and announcements publicly disclosed during the reporting period; the original 2025 semi-annual report signed by the company's legal representative; and other reference documents[9] - The location for the above documents is the company's Board of Directors' office[10] Definitions This section defines key terms used in the report, including entity names and units, to ensure accurate understanding - "The Group" refers to Zhongdaan Co, Ltd and its subsidiaries; "the Company," "this Company," or "Zhongdaan" refers to Zhongdaan Co, Ltd[12] - "Reporting Period" refers to January-June 2025; "Yuan, Ten Thousand Yuan" indicates that unless otherwise specified, all monetary units are in RMB[12] Company Profile and Key Financial Indicators Company Profile Zhongdaan Co, Ltd, stock code 300635, is listed on the Shenzhen Stock Exchange with Chen Tianbao as the legal representative Company Basic Information | Indicator | Content | | :--- | :--- | | Stock Abbreviation | Zhongdaan | | Stock Code | 300635 | | Stock Exchange | Shenzhen Stock Exchange | | Company's Chinese Name | 中达安股份有限公司 | | Company's Legal Representative | Chen Tianbao | Contact Persons and Methods The company's Board Secretary is Li Haijie and the Securities Affairs Representative is Liu Li, both located in Guangzhou Contact Information | Position | Name | Contact Address | Telephone | Fax | Email | | :--- | :--- | :--- | :--- | :--- | :--- | | Board Secretary | Li Haijie | 20/F, Tower A, Victory Plaza, 103 Tiyu West Road, Tianhe District, Guangzhou, Guangdong | 020-31525672 | 020-38858516 | dadb@sino-daan.com | | Securities Affairs Representative | Liu Li | 20/F, Tower A, Victory Plaza, 103 Tiyu West Road, Tianhe District, Guangzhou, Guangdong | 020-31525672 | 020-38858516 | dadb@sino-daan.com | Other Information During the reporting period, there were no changes to the company's contact information, disclosure locations, or registration details - The company's registered address, office address and postal code, website, and email address remained unchanged during the reporting period; for details, please refer to the 2024 annual report[16] - The stock exchange website and media names for disclosing the semi-annual report, as well as the location for the report, remained unchanged during the reporting period; for details, please refer to the 2024 annual report[17] - The company's registration information remained unchanged during the reporting period; for details, please refer to the 2024 annual report[18] Key Accounting Data and Financial Indicators The company's revenue and net profit declined year-over-year, while net cash flow from operating activities significantly improved Key Accounting Data and Financial Indicators (Year-on-Year Changes) | Indicator | Current Period (Yuan) | Prior Year Period (Yuan) | YoY Change | | :--- | :--- | :--- | :--- | | Operating Revenue | 302,081,332.73 | 330,057,999.08 | -8.48% | | Net Profit Attributable to Shareholders | 1,847,756.65 | 4,618,582.73 | -59.99% | | Net Profit Attributable to Shareholders (Excluding Non-recurring Items) | 1,430,669.93 | 4,045,077.89 | -64.63% | | Net Cash Flow from Operating Activities | -16,099,801.13 | -68,294,639.78 | 76.43% | | Basic Earnings Per Share (Yuan/Share) | 0.0133 | 0.0339 | -60.77% | | Diluted Earnings Per Share (Yuan/Share) | 0.0136 | 0.0339 | -59.88% | | Weighted Average Return on Equity | 0.49% | 1.08% | -0.59% | | End of Current Period (Yuan) | End of Prior Year (Yuan) | Change from Prior Year-End | | Total Assets | 1,396,567,319.98 | 1,369,362,378.68 | 1.99% | | Net Assets Attributable to Shareholders | 377,569,642.00 | 374,258,077.35 | 0.88% | Differences in Accounting Data under Domestic and Foreign Accounting Standards There were no discrepancies in net profit or net assets between financial reports prepared under Chinese and international or foreign accounting standards - The company has no discrepancies in net profit and net assets between financial reports disclosed under international accounting standards and Chinese accounting standards during the reporting period[20] - The company has no discrepancies in net profit and net assets between financial reports disclosed under foreign accounting standards and Chinese accounting standards during the reporting period[21] Non-recurring Profit and Loss Items and Amounts Non-recurring profit and loss totaled 417,086.72 Yuan, mainly from government grants and fair value changes of financial assets Non-recurring Profit and Loss Items and Amounts | Item | Amount (Yuan) | Description | | :--- | :--- | :--- | | Gain/Loss on Disposal of Non-current Assets | -34,922.46 | Mainly due to asset disposals during the period | | Government Grants Included in Current Profit and Loss | 406,354.07 | Mainly from stable employment subsidies, office purchase subsidies, and high-tech enterprise financial grants | | Fair value gains/losses from holding and disposing of financial assets and liabilities by non-financial enterprises, excluding effective hedging related to normal business operations | 27,601.37 | Mainly due to interest income from structured deposits received by subsidiary Guangdong Shunshui | | Other Non-operating Income and Expenses | 28,861.46 | | | Other Profit and Loss Items Meeting the Definition of Non-recurring | 187,572.31 | | | Less: Income Tax Impact | 103,419.38 | | | Minority Interest Impact (After Tax) | 94,960.65 | | | Total | 417,086.72 | | Management Discussion and Analysis Principal Business Activities During the Reporting Period The company's main businesses include engineering supervision, consulting, and information technology services, driven by national policies and internal strengths (I) Main Business The company's core operations span engineering supervision, consulting, and information technology services leveraging advanced technologies - The company holds a comprehensive engineering supervision qualification from the Ministry of Housing and Urban-Rural Development, allowing it to undertake supervision, project management, and technical consulting for all types of construction projects, with a focus on communications, power, civil engineering, and water conservancy supervision[26] - The company's engineering consulting business includes engineering survey and mapping, planning and architectural design, power engineering design, as well as consulting and agency construction services (project investment opportunity studies, feasibility studies, project agency construction, etc) and bidding agency services[27][28][29] - Information technology consulting and supervision services primarily provide third-party services for the entire lifecycle of informatization construction for government and enterprises, including planning, design, consulting, supervision, and evaluation, and has independently developed a series of smart engineering management and software products like "isDC Smart Engineering Data Center"[30][31] (II) Main Operating Model The company generates revenue through consulting and smart engineering services, primarily securing projects via competitive bidding - In full-process engineering consulting, the company provides one-stop solutions or phased professional services; in smart engineering business, it meets the needs of project supervision and participating units in areas like "intelligent perception + project management + visualization" to generate revenue, cash flow, and profit[33] - The company primarily acquires business through bidding, with strong competitive advantages in housing construction, municipal public works, communications engineering, power engineering (new energy), water conservancy engineering, informatization, and bidding agency[34] - The company has established a procurement management system, determining suppliers through a qualified supplier database via bidding and competitive selection, and signs long-term strategic cooperation agreements with core suppliers for services like labor, collaboration, materials, and leasing[35] (III) Main Performance Drivers Performance is driven by national strategies, industry upgrades, and market expansion, supported by the company's comprehensive qualifications and technological innovation - External drivers include the "14th Five-Year Plan" promoting new urbanization and urban renewal, building energy efficiency, and elderly-friendly renovations, which increase demand for supervision services; the "dual carbon" goals creating demand for technical support in building-integrated photovoltaics and zero-carbon park construction; and the "Guiding Opinions on Deepening the Development of Smart Cities" accelerating the application of technologies like BIM and digital twins, opening up space for the digital transformation of engineering supervision[36] - Internal drivers include the company's "full qualification + full domain" service capability enhanced by its comprehensive engineering supervision qualification and subsidiary-specific qualifications; a national marketing network built through dual headquarters in the north and south and business units in key city clusters; a three-pronged talent strategy of "recruitment-training-incentive" with equity incentives; and the self-developed "Dali AI" vertical large model for the engineering supervision industry, which integrates six core tools to improve supervision process efficiency by over 80%[39][40] Core Competitiveness Analysis The company's core strengths lie in its standardized management, strong brand, multi-domain technical expertise, and robust talent and marketing networks (I) Standardized Project Management System The company has established an industry-leading standardized project management system, certified by multiple international and domestic standards - The company has passed multiple system certifications including ISO9001 Quality Management, ISO14001 Environmental Management, ISO45001 Occupational Health and Safety Management, ISO/IEC27001 Information Security Management, ISO/IEC20000-1 IT Service Management, GB/T29490-2013 Intellectual Property Management, GB/T31950 Corporate Integrity Management, GB/T27922 After-sales Service Certification, and ITSS IT Service Standard Certification[41] - In 2024, the company participated in completing the compilation of two group standards: "Guidelines for Whole-Process Engineering Consulting in Power Construction Part 1: Transmission and Transformation Projects" and "Guidelines for Digital Supervision of Power Grid Projects," and also contributed to group standards such as "Supervision Specification for Information and Communication Construction Projects" and "5G Design Standard for Intelligent Buildings"[42] (II) Brand Image Advantage With over two decades of industry experience, the company has built a strong brand image through innovation and quality service - Over the past two decades of development in supervision services, the company has consistently adhered to the values of "innovation, enterprise, openness, and pragmatism," establishing a strong brand image through continuous technological innovation, strict quality assurance, a comprehensive customer service system, and standardized project management processes[43] - Many of the company's flagship projects, such as the Sinopec Quanzhou 1 million tons/year ethylene and refining expansion project and the South-to-North Water Diversion Middle Route Phase I project, have won the National Quality Engineering Award, the highest honor in construction quality[43] (III) Multi-domain Professional Technical Advantages The company possesses significant technical advantages across information technology, energy, and water conservancy, with notable achievements in each sector - As one of the earliest enterprises engaged in communication engineering consulting services in China, the company has been deeply involved in the development of China's 2G to 5G networks, undertaking major projects like the China Mobile Southern Base and Guangdong Mobile Global Communication Building, and has participated in several landmark digital economy projects such as the Shanghai Zhuanqiao Cloud Base (Data Center) and the National Advanced Computing Industry Innovation (Yichang) Intelligent Computing Hub Center[44][45] - The company independently developed the "Dali AI" large model, integrating six core tools—Zhi Li, Zhi Xi, Zhi Shu, Zhi He, Zhi Xun, and Zhi Ce—to promote the intelligent upgrading of supervision processes, and its isPM Smart Engineering Project Management Platform won the "Quality Digital Product Award" and was recognized as a "Guangdong Famous High-tech Product"[45][46] - In the new energy sector, the company actively responds to the national "carbon peak and carbon neutrality" strategy, participating in several landmark wind, solar, and energy storage projects, including the Kubuqi Desert Base Erdos New Energy 1.1 million kW photovoltaic project, the Tibet Baxoi County 100,000 kW guaranteed grid-connected wind power project, and the Huaneng Yuhuan No 2 offshore wind power project[47][48] - Since acquiring Guangdong Shunshui Engineering Construction Supervision Co, Ltd in 2019, the company has undertaken over 4,000 supervision projects in areas such as water conservancy hubs, sluices, reservoirs, and dikes, with projects like the Dongjiang-Shenzhen Water Supply Renovation Project and the Zhongshun Dawei Xihe Sluice Project winning the "China Water Conservancy Engineering Dayu Award," and has also participated in national key water conservancy projects like the South-to-North Water Diversion Project[49][50][51] (IV) Talent Advantage The company maintains a stable and competitive talent pool through a comprehensive "people-oriented" cultivation and development system - The company has built a comprehensive talent cultivation mechanism, combining internal training with high-quality external educational resources, establishing a scientific assessment and technical grading system, and actively cooperating with universities to provide opportunities for academic and professional advancement[52] - As of June 30, 2025, the company had 952 personnel with various registered qualifications (including Class 1 Registered Structural Engineers, Class 1 Registered Architects, Class 1 Registered Cost Engineers, and Registered Supervision Engineers) and 2,913 professional talents (including IPMP International Project Managers and Information System Supervision Engineers)[52] - The company implements a "mentorship" model where experienced experts serve as mentors to pass on professional knowledge, practical experience, and corporate culture, and provides clear career development plans for employees to enhance their sense of identity and belonging[53] (V) Marketing Network Advantage The company has established a nationwide business network with dual headquarters to ensure rapid customer response and standardized management - The company's business covers all provinces, autonomous regions, and municipalities in China except Hong Kong, Macao, and Taiwan, and has established dual headquarters in the north and south, strengthening regional management capabilities and enabling flexible allocation of resources and personnel to enhance cross-regional business implementation[54] - The company has multiple subsidiaries, affiliated companies, and branches, forming a nationwide business network, and has implemented a responsive problem-solving mechanism through tools like a business consulting WeChat account and a service desk registration system[54] (VI) Professional Qualification and Credit Advantage The company holds numerous high-level qualifications, including comprehensive engineering supervision and Grade A water conservancy supervision, solidifying its market position - The company has obtained several important qualifications and credentials, with core qualifications including the Comprehensive Engineering Supervision Qualification issued by the Ministry of Housing and Urban-Rural Development and the Grade A Water Conservancy Engineering Construction Supervision Qualification issued by the Ministry of Water Resources[55] - Additionally, the company holds 2 engineering survey qualifications, 13 design qualifications, 1 surveying and mapping qualification, 1 urban and rural planning qualification, 3 supervision qualifications from the Ministry of Water Resources, 2 value-added telecommunications business licenses from the Ministry of Industry and Information Technology, 3 engineering consulting credentials, 2 other supervision credentials, and 2 special equipment production licenses[55] - The company continues to deepen its strategic competitiveness in the full business qualification system for informatization, energy, water conservancy, and engineering construction projects, integrating the entire industry chain around these fields and implementing localized business strategies through its regional business unit marketing network[56] Main Business Analysis During the period, main business revenue and costs decreased, while sales and financial expenses increased, and operating cash flow significantly improved Key Financial Data Year-on-Year Changes | Indicator | Current Period (Yuan) | Prior Year Period (Yuan) | YoY Change | Reason for Change | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue | 302,081,332.73 | 330,057,999.08 | -8.48% | | | Operating Cost | 225,332,707.04 | 250,620,053.91 | -10.09% | | | Sales Expenses | 6,356,760.61 | 5,243,892.43 | 21.22% | Mainly due to increased sales expenses for business expansion in the current period | | Administrative Expenses | 42,095,172.38 | 42,193,962.19 | -0.23% | | | Financial Expenses | 9,228,995.22 | 7,259,081.85 | 27.14% | Mainly due to an increase in the average loan balance compared to the same period last year, leading to higher financial expenses | | Income Tax Expense | -981,552.89 | -2,115,913.14 | 53.61% | Mainly due to a decrease in income tax expense accrued in the current period compared to the same period last year | | Net Cash Flow from Operating Activities | -16,099,801.13 | -68,294,639.78 | 76.43% | Mainly due to a decrease in cash paid for goods and services compared to the same period last year | | Net Cash Flow from Investing Activities | -8,701,008.56 | -3,806,708.82 | -128.57% | Mainly due to an increase in equity investment payments and structured deposits by subsidiary Guangdong Shunshui | | Net Cash Flow from Financing Activities | 3,816,005.74 | 54,575,272.16 | -93.01% | Mainly due to a decrease in long-term bank borrowings compared to the same period last year | | Net Increase in Cash and Cash Equivalents | -20,984,803.95 | -17,526,076.44 | -19.73% | Mainly due to a decrease in long-term bank borrowings compared to the same period last year | Products or Services Accounting for Over 10% of Revenue | Product or Service | Operating Revenue (Yuan) | Operating Cost (Yuan) | Gross Margin | YoY Change in Revenue | YoY Change in Cost | YoY Change in Gross Margin | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Civil Engineering Supervision | 59,559,222.46 | 46,557,817.52 | 21.83% | -19.92% | -18.70% | -1.17% | | Communications Supervision | 51,276,755.36 | 37,893,122.79 | 26.10% | -5.65% | -13.88% | 7.05% | | Power Supervision | 62,611,653.49 | 48,126,710.39 | 23.13% | 21.74% | 13.89% | 5.29% | | Water Conservancy Supervision | 48,425,556.50 | 34,152,709.38 | 29.47% | -6.62% | -5.20% | -1.06% | | Consulting and Agency Construction | 54,992,489.93 | 38,580,347.38 | 29.84% | -26.42% | -28.89% | 2.43% | Non-core Business Analysis Non-core business activities, particularly investment income and impairment losses, had a significant and sustainable impact on total profit Non-core Business Items and Impact | Item | Amount (Yuan) | % of Total Profit | Reason | Sustainability | | :--- | :--- | :--- | :--- | :--- | | Investment Income | 1,417,999.79 | 66.63% | Mainly from investment income from associates recognized under the equity method | Yes | | Non-operating Income | 250,001.96 | 11.75% | Mainly from the refund of a prior-year default penalty received this period | No | | Non-operating Expenses | 256,841.57 | 12.07% | Mainly due to owner assessment penalties incurred this period | No | | Credit Impairment Loss | 3,739,244.66 | 175.70% | Mainly from bad debt provisions for accounts receivable, notes receivable, and other receivables | Yes | | Asset Impairment Loss | 5,336,992.55 | 250.77% | Mainly from impairment provisions for contract assets | Yes | Analysis of Assets and Liabilities The company's total assets and net assets grew, with a notable increase in contract assets and short-term borrowings Significant Changes in Asset Composition | Item | End of Period Amount (Yuan) | % of Total Assets | Prior Year-End Amount (Yuan) | % of Total Assets | Change in Proportion | Reason for Significant Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Monetary Funds | 160,517,231.44 | 11.49% | 182,707,598.32 | 13.34% | -1.85% | | | Accounts Receivable | 197,236,062.85 | 14.12% | 191,395,067.59 | 13.98% | 0.14% | | | Contract Assets | 574,349,074.09 | 41.13% | 521,243,946.51 | 38.06% | 3.07% | Mainly due to the recognition of services provided based on performance progress, leading to an increase in contract assets | | Long-term Equity Investments | 110,008,672.42 | 7.88% | 107,900,234.00 | 7.88% | 0.00% | | | Fixed Assets | 48,347,958.89 | 3.46% | 50,042,901.51 | 3.65% | -0.19% | | | Short-term Borrowings | 151,679,011.28 | 10.86% | 126,736,733.42 | 9.26% | 1.60% | Mainly due to the borrowing of short-term loans in the current period | | Long-term Borrowings | 136,364,000.00 | 9.76% | 165,873,000.00 | 12.11% | -2.35% | Mainly due to the reclassification of borrowings due within one year | | Notes Receivable | 4,717,497.98 | 0.34% | 22,727,065.55 | 1.66% | -1.32% | Mainly due to the maturity of notes received in the previous period, resulting in a decrease in the balance | Restricted Assets as of the End of the Reporting Period | Item | Year-end Book Value (Yuan) | Restriction Type | Restriction Details | | :--- | :--- | :--- | :--- | | Monetary Funds | 9,469,351.57 | Guarantee | Security deposits and interest, co-managed accounts, ETC card deposits, etc | | Notes Receivable | 1,296,836.75 | Transfer | Used for transfer | | Fixed Assets | 18,106,163.52 | Finance Lease | Ownership restrictions, disposal restrictions, etc | | Accounts Receivable | 22,732,691.99 | Transfer | Used for transfer | | Total | 51,605,043.83 | | | - The company has pledged its 67% equity in Guangdong Shunshui as collateral for a 34,000,000.00 Yuan acquisition loan; as of June 30, 2025, the book value of this equity in the parent company's accounts was 57,620,000.00 Yuan[67] - The company has pledged its 100% equity in Zhongdaan Design as collateral for a 48,000,000.00 Yuan acquisition loan; as of June 30, 2025, the book value of this equity in the parent company's accounts was 37,902,994.06 Yuan[68] - Zhongdaan Weifang has pledged its 100% equity and the revenue rights of its 5.9MWp distributed generation project for a finance lease with a maximum debt of 24,492,785.00 Yuan, and has also mortgaged photovoltaic auxiliary facilities, modules, and inverters with a book value of 18,106,163.52 Yuan[68][69] Investment Analysis The company's total investment increased by 10.84% year-over-year, with no significant equity or non-equity investments reported Investment Amount During the Reporting Period | Indicator | Amount (Yuan) | | :--- | :--- | | Investment in Reporting Period | 23,050,000.00 | | Investment in Prior Year Period | 20,796,656.80 | | Change | 10.84% | - The company had no significant equity investments, significant non-equity investments, financial assets measured at fair value, use of raised funds, entrusted wealth management, derivative investments, or entrusted loans during the reporting period[71][72][73][74] Sale of Major Assets and Equity No major sales of assets or equity occurred during the reporting period - The company did not sell any major assets during the reporting period[75] - The company did not sell any major equity during the reporting period[76] Analysis of Major Holding and Participating Companies Several key subsidiaries experienced declines in revenue or profit, while the newly established Zhaohui Technology reported a loss Financials of Major Holding and Participating Companies | Company Name | Type | Main Business | Registered Capital (Yuan) | Total Assets (Yuan) | Net Assets (Yuan) | Operating Revenue (Yuan) | Operating Profit (Yuan) | Net Profit (Yuan) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Guangdong Shunshui Engineering Construction Supervision Co, Ltd | Subsidiary | Water Conservancy Supervision | 10,800,000 | 163,792,899.68 | 64,901,957.37 | 49,904,168.50 | 6,589,254.82 | 5,233,679.70 | | Fuzhou Weisi Power Survey and Design Co, Ltd | Subsidiary | Survey and Design | 10,080,000 | 49,830,776.69 | 11,488,698.18 | 9,613,423.80 | 394,780.50 | 697,647.59 | | Zhongdaan Holding Co, Ltd | Subsidiary | Engineering Management Services | 100,000,000 | 70,944,130.79 | 12,810,947.96 | 4,470,030.79 | -4,008,429.50 | -3,737,148.14 | | Da'an Cloud (Zhuhai) Investment Co, Ltd | Subsidiary | Investment and Asset Management | 100,000,000 | 84,059,901.48 | 83,848,903.99 | 0.00 | 1,310,503.70 | 651,152.70 | | Lushan Zhongdaan Engineering Consulting Co, Ltd | Subsidiary | Engineering Management Services | 5,000,000 | 6,460,836.86 | 5,657,732.36 | 1,243,545.86 | -786,867.80 | -616,301.09 | | Shandong Zhongdaan Design and Consulting Co, Ltd | Subsidiary | Architectural Design and Consulting | 50,000,000 | 197,686,926.57 | 37,224,420.33 | 11,223,686.36 | -1,216,644.85 | -858,403.64 | | Hunan Zhaohui Technology Development Co, Ltd | Subsidiary | Technical Consulting, Services | 5,000,000 | 3,251,061.20 | 3,251,061.20 | 0.00 | -1,748,938.80 | -1,748,938.80 | - Guangdong Shunshui's operating revenue decreased by 8.37% YoY, operating profit decreased by 35.25% YoY, and net profit attributable to shareholders decreased by 38.61% YoY[77] - Weisi Power's operating revenue decreased by 31.82% YoY, but operating profit increased by 133.53% YoY, and net profit attributable to shareholders increased by 202.04% YoY[78] - Zhongdaan Holding's operating profit decreased by 241.94% YoY, and net profit decreased by 223.86% YoY; Lushan Zhongdaan's operating revenue decreased by 43.77% YoY, and operating profit decreased by 73.42% YoY; Zhongdaan Design's operating revenue decreased by 72.63% YoY, and operating profit decreased by 118.69% YoY[78][79] 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[80] Risks and Countermeasures The company faces risks from industry volatility, competition, and talent retention, which it addresses through strategic adjustments and management enhancements - The company is engaged in construction project management consulting services and faces industry fluctuation risks due to macroeconomic policies and economic cycles; countermeasures include closely monitoring market and legal changes and strengthening client relationships[80] - The engineering consulting service industry is highly market-oriented and competitive, posing market competition risks; countermeasures include establishing a standardized market strategy management mechanism, adjusting the industrial structure, and enhancing technology and services[81] - As of the first half of 2025, the combined book value of accounts receivable and contract assets was 771.5851 million Yuan, accounting for 78.32% of current assets, posing a risk of large balances; countermeasures include timely aging analysis and collection management, linking recovery to the performance assessment of responsible personnel[82] - As of the first half of 2025, the book value of goodwill on the consolidated balance sheet was 129.7293 million Yuan, accounting for 9.29% of total assets, posing a risk of goodwill impairment; goodwill increased by 4.0305 million Yuan this period due to the acquisition of Zhongdaan Information; countermeasures include conducting impairment tests on goodwill and related asset groups annually[82][83] - With nationwide business coverage, the company faces risks in cross-regional operations and project management, including poor information flow, inadequate quality supervision, deviations in policy execution, safety and environmental incidents, and increased operational costs; countermeasures include developing detailed quality supervision standards, regular inspections, using advanced technology for real-time monitoring, and strengthening institutional training[84][85] - The construction project management and consulting industry is technology and knowledge-intensive with high talent mobility, posing a risk of losing core technical and management personnel; countermeasures include continuously introducing management talent, strengthening performance assessments, and building a high-quality talent team through systematic training[86] Record of Investor Relations Activities The company held an online performance briefing on May 23, 2025, to address investor questions - On May 23, 2025, the company hosted investors online for its 2024 annual performance briefing, discussing the annual results and answering investor questions[87] - The index for the activity details can be found on Cninfo (http://www.cninfo.com.cn)[87](index=87&type=chunk) Status of Market Value Management System and Valuation Enhancement Plan The company has not formulated a market value management system or disclosed a valuation enhancement plan - The company did not formulate a market value management system during the reporting period[88] - The company did not disclose a valuation enhancement plan during the reporting period[88] Implementation of the "Dual Improvement in Quality and Returns" Action Plan The company did not disclose a "Dual Improvement in Quality and Returns" action plan during the reporting period - The company did not disclose a "Dual Improvement in Quality and Returns" action plan announcement during the reporting period[88] Corporate Governance, Environment, and Society Changes in Directors, Supervisors, and Senior Management During the period, Zhang Long resigned due to a work transfer, and Li Haijie was appointed as his successor Changes in Directors, Supervisors, and Senior Management | Name | Position | Type | Date | Reason | | :--- | :--- | :--- | :--- | :--- | | Zhang Long | Director, Vice President, Board Secretary | Resigned | June 09, 2025 | Work Transfer | | Li Haijie | Vice President, Board Secretary | Appointed | June 09, 2025 | Work Transfer | | Li Haijie | Director | Elected | June 25, 2025 | Work Transfer | Profit Distribution and Capitalization of Capital Reserve for the Reporting Period The company does not plan to distribute dividends or issue bonus shares for the first half of the year - The company plans not to distribute cash dividends, issue bonus shares, or convert capital reserves into share capital for the semi-annual period[91] Implementation of Equity Incentive Plans, Employee Stock Ownership Plans, or Other Employee Incentive Measures No equity incentive plans or other employee incentive measures were implemented during the reporting period - The company had no equity incentive plans, employee stock ownership plans, or other employee incentive measures and their implementation during the reporting period[92] Environmental Information Disclosure The company and its main subsidiaries are not listed as enterprises required to disclose environmental information by law - The listed company and its main subsidiaries are not included in the list of enterprises required to disclose environmental information by law[93] Social Responsibility The company actively fulfills its state-owned enterprise mission by promoting high-quality development, protecting stakeholder rights, and engaging in social welfare - As an enterprise controlled by the Licheng District Finance Bureau of Jinan City, Shandong Province, the company adheres to its state-owned enterprise mission, dedicating itself to promoting high-quality urban and rural construction development within the province and nationwide through high-quality management and comprehensive professional services, actively responding to key national strategies such as new urbanization, urban renewal, rural revitalization, and "carbon peak and carbon neutrality," and participating in pollution prevention and energy conservation[93] - The company strictly improves its corporate governance structure in accordance with laws and regulations, discloses information in a timely, accurate, true, complete, and sufficient manner, and maintains good communication with investors through various channels such as an investor hotline, email, company website, and investor relations interactive platform to protect the rights and interests of shareholders and creditors[93] - Adhering to a "people-oriented" talent philosophy, the company formulates and implements talent cultivation and human resource management plans, complies with the "Labor Law" and other regulations to protect the legal rights of employees, establishes an online learning platform and internal learning mechanisms, and cooperates with universities to provide platforms for academic and professional advancement[94][95] - The company selects suppliers based on the principles of "fairness, justice, honesty, and credit," establishes long-term and stable cooperative relationships, and continuously improves its list of qualified suppliers; in environmental protection, it adheres to a green development concept, implements energy-saving and environmental protection measures, and advocates for low-carbon, eco-friendly, and green office practices[95] - The company insists on legal and honest operations, pays taxes according to the law, strengthens communication with government authorities, industry associations, and regulatory bodies, and actively engages in social welfare activities, conducting charitable donations and contributing to rural revitalization[95] Significant Matters Commitments Fulfilled During the Reporting Period and Overdue Commitments as of the End of the Reporting Period All relevant parties fulfilled their commitments on time during the reporting period, with no overdue commitments outstanding - Jinan Licheng Holding Group Co, Ltd and Jinan Likong Disen Equity Investment Partnership (Limited Partnership) committed to maintaining Zhongdaan's independence in personnel, assets, finance, organization, and business within their shareholder rights[97] - Jinan Licheng Holding Group Co, Ltd and Jinan Likong Disen Equity Investment Partnership (Limited Partnership) committed to reducing and standardizing related-party transactions, ensuring any necessary transactions are conducted on fair, just, and open principles with legally compliant procedures and fair pricing[97][98] - Jinan Licheng Holding Group Co, Ltd and Jinan Likong Disen Equity Investment Partnership (Limited Partnership) committed to avoiding and resolving horizontal competition through measures like asset restructuring, business adjustments, and business integration, and to avoid engaging in new competitive businesses[98][99] - Company shareholders and senior management (such as Wu Junye, Li Tao, Gan Lu, Wang Sheng) committed that after the lock-up period, annual share transfers during their tenure will not exceed 25% of their total holdings; after resignation, no transfers will be made for six months, and transfers within the following 12 months will not exceed 50%[99][100] - The company and major shareholders (Wu Junye, Li Tao) committed that the prospectus is free from false records, misleading statements, or major omissions, and will initiate share buybacks and compensate investors for losses if such issues exist[101][102][103][104][105] - The company's founders (Wu Junye, Li Tao, Chen Zhixiong, etc) committed to unconditionally provide full compensation if the company incurs liabilities from litigation, arbitration, or administrative penalties related to labor dispatch practices[107][108] - The company's founders committed to bear all costs and provide full compensation if the company or its branches are required to make back payments for social insurance or housing provident funds or are penalized for such matters[108][109] - Wu Junye committed not to seek actual control of Zhongdaan, either alone or jointly, and not to become the company's controlling shareholder or actual controller in any way, and to ensure that any transferee makes the same commitment[113] - During the reporting period, all commitments were fulfilled on time, and there were no overdue commitments[113] Non-operating Fund Occupation by Controlling Shareholders and Other Related Parties There was no non-operating fund occupation by controlling shareholders or other related parties during the reporting period - The company had no instances of non-operating fund occupation by controlling shareholders and other related parties during the reporting period[114] 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[115] Appointment and Dismissal of Accounting Firm The company's semi-annual financial report has not been audited - The company's semi-annual report has not been audited[116] Explanation from the Board of Directors, Supervisory Committee, and Audit Committee on the "Non-standard Audit Report" for the Current Period No non-standard audit report was issued for the reporting period - The company did not have a non-standard audit report for the reporting period[117] Explanation from the Board of Directors on the "Non-standard Audit Report" of the Previous Year No explanation regarding a prior year's non-standard audit report was applicable - The company has no explanation regarding a non-standard audit report from the previous year for the reporting period[117] Bankruptcy and Reorganization Matters No bankruptcy or reorganization matters occurred during the reporting period - No bankruptcy or reorganization matters occurred during the reporting period[117] Litigation Matters The company had no major litigation or arbitration, and other legal matters are not expected to have a significant impact - The company had no major litigation or arbitration matters during this reporting period[118] Summary of Other Litigation Matters | Litigation (Arbitration) Details | Amount Involved (Ten Thousand Yuan) | Provision for Liabilities | Progress | Outcome and Impact | Judgment Execution | | :--- | :--- | :--- | :--- | :--- | :--- | | Summary of other litigation where the company is plaintiff/applicant below major disclosure standards | 1,196.61 | No | Some cases closed, some pending | No significant impact | Judgments executed; some cases pending | | Summary of other litigation where the company is defendant/respondent below major disclosure standards | 54.29 | No | Some cases closed, some pending | No significant impact | Judgments executed; some cases pending | Penalties and Rectifications No penalties or rectifications were recorded during the reporting period - The company had no penalties or rectifications during the reporting period[119] Integrity Status of the Company, its Controlling Shareholders, and Actual Controller There were no integrity issues concerning the company, its controlling shareholders, or actual controller - There were no issues regarding the integrity of the company, its controlling shareholders, or its actual controller during the reporting period[120] Major Related-Party Transactions The company engaged in routine related-party transactions for services, all conducted at market prices and within approved limits Related-Party Transactions in Daily Operations | Related Party | Relationship | Transaction Type | Transaction Content | Transaction Amount (Ten Thousand Yuan) | % of Similar Transactions | Approved Limit (Ten Thousand Yuan) | Exceeded Limit | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Licheng Holding and its controlled entities | Common Control | Providing services to related parties | Full-process consulting, engineering supervision, etc | 3,453.07 | 24.98% | 15,000 | No | | Licheng Holding and its controlled entities | Common Control | Receiving services from related parties | Surveying, project management, etc | 172.14 | 3.69% | 4,000 | No | | Licheng Holding and its controlled entities | Common Control | Receiving services from related parties | Leasing, property management, utilities, etc | 136.62 | 40.95% | 800 | No | | Licheng Chengfa and its controlled entities | Related Legal Entity | Providing services to related parties | Full-process consulting, engineering supervision, etc | 54.12 | 0.39% | 5,000 | No | | Licheng Chengfa and its controlled entities | Related Legal Entity | Receiving services from related parties | Surveying, project management, etc | 0 | 0.00% | 200 | No | | Total | | | | 3,815.95 | | 25,000 | | - The cumulative actual amount of daily related-party transactions with related parties was 38.1595 million Yuan, which did not exceed the total estimated amount of 250 million Yuan[121] - During the reporting period, the company did not engage in related-party transactions involving the acquisition or sale of assets or equity, joint external investments, related-party debt and credit dealings, or any deposit, loan, credit, or other financial business with related financial companies or company-controlled financial companies[122][123][124][125][126] - The company had no other major related-party transactions during the reporting period[127] Major Contracts and Their Performance The company fulfilled its major operating contracts, primarily with China Mobile, and provided necessary guarantees for its subsidiaries - During the reporting period, the company's leasing activities mainly involved renting office space in Shandong, Guangzhou, and other locations for daily operations; the annual costs of these leases did not have a significant impact on the company's profit for the period[130] Guarantees Provided by the Company to Subsidiaries | Guaranteed Party | Guarantee Limit (Ten Thousand Yuan) | Actual Guarantee Amount (Ten Thousand Yuan) | Guarantee Type | Guarantee Period | Completed | | :--- | :--- | :--- | :--- | :--- | :--- | | Weisi Power | 1,000 | 100 | Joint Liability | 2024/4/10-2025/4/10 | Yes | | Weisi Power | 1,000 | 300 | Joint Liability | 2024/4/19-2025/4/19 | Yes | | Weisi Power | 1,000 | 300 | Joint Liability | 2024/5/8-2025/5/8 | Yes | | Weisi Power | 1,000 | 400 | Joint Liability | 2025/4/30-2026/4/30 | No | | Weisi Power | 500 | 500 | Joint Liability | 2024/9/23-2025/9/17 | No | | Guangdong Shunshui | 1,700 | 20 | Joint Liability | 2024/8/9-2025/8/9 | No | | Guangdong Shunshui | 3,000 | 500 | Joint Liability | 2024/12/12-2025/4/7 | Yes | | Zhongdaan Weifang | 1,888 | 188.8 | Joint Liability | 2024/3/14-2036/3/14 | No | | Zhongdaan Weifang | 1,888 | 188.8 | Joint Liability | 2024/4/18-2036/4/18 | No | | Zhongdaan Weifang | 1,888 | 211.2 | Joint Liability | 2024/5/9-2036/5/9 | No | | Zhongdaan Weifang | 1,888 | 435.01 | Joint Liability | 2024/6/19-2036/6/19 | No | | Zhongdaan Weifang | 1,888 | 200 | Joint Liability | 2024/5/8-2036/5/8 | No | | Zhongdaan Weifang | 1,888 | 366.4 | Joint Liability | 2024/6/19-2036/6/19 | No | | Total approved guarantee limit for subsidiaries in the reporting period (B1) | 1,700 | | | | | | Total actual guarantee amount for subsidiaries in the reporting period (B2) | 400 | | | | | | Total approved guarantee limit for subsidiaries at the end of the reporting period (B3) | 8,088 | | | | | | Total actual guarantee balance for subsidiaries at the end of the reporting period (B4) | 2,436.97 | | | | | | Ratio of actual total guarantee amount to company's net assets | 6.45% | | | | | Major Daily Operating Contracts | Contracting Company | Counterparty | Total Contract Amount (Yuan) | Contract Progress | Sales Revenue Recognized This Period (Yuan) | Cumulative Sales Revenue Recognized (Yuan) | Accounts Receivable Collection | Significant Changes in Conditions | Major Risk of Non-performance | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Zhongdaan Co, Ltd | 17 companies directly or indirectly controlled by China Mobile Group in 31 provinces, autonomous regions, and municipalities in mainland China | 809,202,841.45 | In progress | 291,128.90 | 328,265,758.68 | 310,161,580.56 | No | No | | Zhongdaan Co, Ltd | 25 subsidiary companies directly or indirectly controlled by China Mobile Group in provinces, autonomous regions, and municipalities in mainland China | 559,899,624.05 | In progress | 2,568,950.21 | 319,645,954.11 | 309,308,648.82 | No | No | | Zhongdaan Co, Ltd | 20 subsidiary companies directly or indirectly controlled by China Mobile Group in provinces, autonomous regions, and municipalities in mainland China | 393,862,655.98 | In progress | 42,248,467.47 | 127,188,874.82 | 89,286,885.56 | No | No | - The company had no other major contracts during the reporting period[136] Explanation of Other Major Matters The company completed corporate registration changes, terminated an equity acquisition, and is planning a private placement that may alter its control structure - The company has completed the industrial and commercial registration procedures for changing its registered capital, expanding its business scope, and amending the "Articles of Association"[137] - The company terminated the acquisition of 100% equity in Zhongdaan Information Consulting (Shandong) Co, Ltd because the original shareholders could not meet the performance commitments, triggering the buyback condition ahead of schedule[138][139] - Company director, Vice President, and Board Secretary Zhang Long resigned, and Li Haijie was appointed as Vice President and Board Secretary, and elected as a director[140] - The company is planning a private placement of shares to specific investors, which may lead to a change in the company's actual controller; the stock was suspended from June 23 to 25, 2025 for this reason, and the matter has been accepted by the Shenzhen Stock Exchange, pending review and registration approval from the CSRC[141][142][143] Major Matters of Company Subsidiaries No major matters concerning subsidiaries were reported during the period - The company had no major matters concerning its subsidiaries during the reporting period[144] Changes in Share Capital and Shareholders Changes in Share Capital During the period, the company's total share capital remained unchanged, with a shift from restricted to unrestricted shares due to management changes Changes in Share Capital | Share Type | Before Change (Shares) | Before Change (%) | Change (+/- Shares) | After Change (Shares) | After Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | I. Restricted Shares | 20,373,968 | 14.54% | -656,063 | 19,717,905 | 14.07% | | II. Unrestricted Shares | 119,760,032 | 85.46% | 656,063 | 120,416,095 | 85.93% | | III. Total Shares | 140,134,000 | 100.00% | 0 | 140,134,000 | 100.00% | - During the reporting period, upon the expiration of their terms, former director Zhang Xia, supervisor Huang Liang, and senior executives Zhuang Liezhong, Li Qingbin, and Luo Jun had a total of 645,585 restricted shares released[148] - During the reporting period, senior executives Zhang Xin, Shao Zongze, and Shao Youhe had a total of 55,640 restricted shares unlocked[149] - During the reporting period, 34,537 new restricted shares were added due to the appointment of senior executive Luo Yuanfei, and 10,625 new restricted shares were added due to the resignation of senior executive Zhang Long[149] Changes in Restricted Shares | Shareholder Name | Restricted Shares at Start of Period | Shares Released This Period | Shares Added This Period | Restricted Shares at End of Period | Reason for Restriction | | :--- | :--- | :--- | :--- | :--- | :--- | | Wu Junye | 9,584,148.00 | 0.00 | 0.00 | 9,584,148.00 | Executive Lock-up | | Wang Sheng | 2,743,377.00 | 0.00 | 0.00 | 2,743,377.00 | Executive Lock-up | | Gan Lu | 3,354,750.00 | 0.00 | 0.00 | 3,354,750.00 | Executive Lock-up | | Zhang Xin | 35,025.00 | 12,500.00 | 0.00 | 22,525.00 | Executive Lock-up | | Shao Zongze | 39,500.00 | 27,375.00 | 0.00 | 12,125.00 | Executive Lock-up | | Shao Youhe | 63,058.00 | 15,765.00 | 0.00 | 47,293.00 | Executive Lock-up | | Luo Yuanfei | 0.00 | 0.00 | 34,537.00 | 34,537.00 | Executive Lock-up | | Zhang Long | 31,875.00 | 0.00 | 10,625.00 | 42,500.00 | Resigned Executive Lock-up | | Zhang Xia | 7,200 | 7,200 | 0.00 | 0.00 | Resigned Executive Lock-up | | Huang Liang | 142,875 | 142,875 | 0.00 | 0.00 | Resigned Executive Lock-up | | Zhuang Liezhong | 353,360 | 353,360 | 0.00 | 0.00 | Resigned Executive Lock-up | | Li Qingbin | 68,800 | 68,800 | 0.00 | 0.00 | Resigned Executive Lock-up | | Luo Jun | 73,350 | 73,350 | 0.00 | 0.00 | Resigned Executive Lock-up | | Restricted Stock Incentive Participants | 3,812,000.00 | 0.00 | 0.00 | 3,812,000.00 | Equity Incentive Lock-up | | Total | 20,373,968.00 | 701,225.00 | 45,162.00 | 19,717,905.00 | | Securities Issuance and Listing No securities were issued or listed during the reporting period - The company had no securities issuance or listing activities during the reporting period[152] Number of Shareholders and Shareholding Status At the end of the period, the company had 15,114 shareholders, with the top two shareholders acting in concert - At the end of the reporting period, the total number of common shareholders was 15,114[153] Shareholdings of Shareholders with over 5% or Top 10 Shareholders | Shareholder Name | Shareholder Type | Shareholding Ratio | Shares Held at Period End (Shares) | Restricted Shares Held (Shares) | Unrestricted Shares Held (Shares) | Share Status | Quantity (Shares) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Jinan Likong Disen Equity Investment Partnership (LP) | Domestic Non-state-owned Legal Entity | 10.01% | 14,031,261.00 | 0.00 | 14,031,261.00 | N/A | 0 | | Wu Junye | Domestic Natural Person | 9.12% | 12,778,864.00 | 9,584,148.00 | 3,194,716.00 | N/A | 0 | | Gan Lu | Domestic Natural Person | 3.23% | 4,523,000.00 | 3,404,750.00 | 1,118,250.00 | N/A | 0 | | Wang Sheng | Domestic Natural Person | 2.68% | 3,757,836.00 | 2,843,377.00 | 914,459.00 | Pledged | 3,600,000 | | Beijing Jinju Private Equity Fund Management Co, Ltd - Jinju Xiangrui No 2 Private Fund | Domestic Non-state-owned Legal Entity | 1.26% | 1,768,500.00 | 0.00 | 1,768,500.00 | N/A | 0 | | Zhao Ruijun | Domestic Natural Person | 1.04% | 1,460,100.00 | 50,000.00 | 1,410,100.00 | N/A | 0 | | Xinguorong (Guangzhou) Management Consulting Partnership (LP) | Domestic Non-state-owned Legal Entity | 0.96% | 1,339,421.00 | 0.00 | 1,339,421.00 | N/A | 0 | | Yue Junfeng | Domestic Natural Person | 0.94% | 1,311,600.00 | 0.00 | 1,311,600.00 | N/A | 0 | | Hua Tianzhu | Domestic Natural Person | 0.71% | 1,000,000.00 | 1,000,000.00 | 0.00 | N/A | 0 | | Dong Xiaomeng | Domestic Natural Person | 0.71% | 998,300.00 | 0.00 | 998,300.00 | N/A | 0 | - The company's largest shareholder, Jinan Likong Disen Equity Investment Partnership (Limited Partnership), and the second-largest shareholder, Wu Junye, are parties acting in concert[154] - Company shareholder Wu Junye has entrusted all voting rights corresponding to his shares to Jinan Likong Disen Equity Investment Partnership (Limited Partnership)[154][155] Changes in Shareholdings of Directors, Supervisors, and Senior Management There were no changes in the shareholdings of 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; for details, please refer to the 2024 annual report[156] Changes in Controlling Shareholder or Actual Controller The company's controlling shareholder and actual controller remained unchanged during the reporting period - The company's controlling shareholder did not change during the reporting period[157] - The company's actual controller did not change during the reporting period[157] Preferred Stock Related Matters The company had no preferred stock during the reporting period - The company had no preferred stock during the reporting period[158] Bond-related Matters Bond-related Matters The company had no bond-related matters during the reporting period - The company had no bond-related matters during the reporting period[160] Financial Report Audit Report The semi-annual financial report has not been audited - The company's semi-annual financial report has not been audited[162] Financial Statements This section presents the company's consolidated and parent company financial statements for the first half of 2025 Consolidated Balance Sheet Key Data (June 30, 2025) | Item | Closing Balance (Yuan) | Opening Balance (Yuan) | | :--- | :--- | :--- | | Total Current Assets | 985,222,118.20 | 960,760,748.51 | | Total Non-current Assets | 411,345,201.78 | 408,601,630.17 | | Total Assets | 1,396,567,319.98 | 1,369,362,378.68 | | Total Current Liabilities | 819,836,523.37 | 765,186,670.07 | | Total Non-current Liabilities | 169,764,789.72 | 202,773,272.18 | | Total Liabilities | 989,601,313.09 | 967,959,942.25 | | Total Equity Attributable to Parent Company | 377,569,642.00 | 374,258,077.35 | | Minority Interest | 29,396,364.89 | 27,144,359.08 | | Total Equity | 406,966,006.89 | 401,402,436.43 | | Total Liabilities and Equity | 1,396,567,319.98 | 1,369,362,378.68 | Consolidated Income Statement Key Data (H1 2025) | Item | H1 2025 (Yuan) | H1 2024 (Yuan) | | :--- | :--- | :--- | | Total Operating Revenue | 302,081,332.73 | 330,057,999.08 | | Total Operating Costs | 311,035,225.54 | 334,462,248.40 | | Operating Profit | 2,135,049.18 | 5,250,618.31 | | Total Profit | 2,128,209.57 | 4,770,413.36 | | Net Profit | 3,109,762.46 | 6,886,326.50 | | Net Profit Attributable to Parent Company Shareholders | 1,847,756.65 | 4,618,582.73 | | Minority Interest Income | 1,262,005.81 | 2,267,743.77 | | Basic Earnings Per Share | 0.0133 | 0.0339 | | Diluted Earnings Per Share | 0.0136 | 0.0339 | Consolidated Cash Flow Statement Key Data (H1 2025) | Item | H1 2025 (Yuan) | H1 2024 (Yuan) | | :--- | :--- | :--- | | Net Cash Flow fro