长方集团(300301) - 2025 Q2 - 季度财报

First Section: Important Notice, Table of Contents, and Definitions Important Notice The company's board of directors and senior management affirm the truthfulness, accuracy, and completeness of the semi-annual report, taking legal responsibility, and plan no cash dividends, bonus shares, or capital reserve conversions - The company's board of directors and senior management guarantee the truthfulness, accuracy, and completeness of the semi-annual report and assume legal responsibility[5] - The company plans not to distribute cash dividends, bonus shares, or convert capital reserves into share capital[7] - The company must comply with the disclosure requirements for "LED Industry Chain Related Businesses" under the Shenzhen Stock Exchange Self-Regulatory Guidelines No. 4 for Listed Companies on the ChiNext Board[6] Reference Documents Reference documents for this reporting period include signed financial statements, publicly disclosed company documents, and the chairman's signed semi-annual report, all available at the company's board of directors' office - Reference documents include signed and sealed financial statements, original publicly disclosed documents on designated websites, and the chairman's signed semi-annual report[12][13][14] - Reference documents are kept at the company's board of directors' office[15] Definitions This section provides clear definitions for common terms used in the report, including company names, key subsidiaries, business technologies, units of measurement, and regulatory bodies Key Definitions | Term | Definition | | :--- | :--- | | Company, This Company, Changfang Group | Shenzhen Changfang Group Co., Ltd. | | Kangmingsheng | Changfang Group Kangmingsheng (Shenzhen) Technology Co., Ltd. | | LED | Abbreviation for Light Emitting Diode | | Mini LED | LED device with chip size between 50~200μm | | Reporting Period | January 1, 2025 to June 30, 2025 | Second Section: Company Profile and Key Financial Indicators I. Company Profile The company's stock abbreviation is "Changfang ST", stock code 300301, listed on the Shenzhen Stock Exchange, with Shenzhen Changfang Group Co., Ltd. as its full Chinese name and Wu Taoxiang as its legal representative Company Basic Information | Indicator | Content | | :--- | :--- | | Stock Abbreviation | Changfang ST | | Stock Code | 300301 | | Listing Exchange | Shenzhen Stock Exchange | | Chinese Name | Shenzhen Changfang Group Co., Ltd. | | Legal Representative | Wu Taoxiang | II. Contact Person and Contact Information The company's Board Secretary is Wu Taoxiang and the Securities Affairs Representative is Jiang Meixiu, both sharing the same contact address, phone, and fax numbers, with distinct email addresses Company Contact Information | Position | Name | Contact Address | Phone | Email | | :--- | :--- | :--- | :--- | :--- | | Board Secretary | Wu Taoxiang | 221 Renmin Road, Fucheng Street, Longhua District, Shenzhen, Guangdong Province | 0755-82828966 | wtx@cfled.com | | Securities Affairs Representative | Jiang Meixiu | 221 Renmin Road, Fucheng Street, Longhua District, Shenzhen, Guangdong Province | 0755-82828966 | ir@cfled.com | III. Other Information During the reporting period, the company's registered and office addresses changed, with the new registered address in Pingshan District, Shenzhen, and the semi-annual report disclosed via Securities Times and Cninfo - The company's registered address has changed to the first floor of Changfang Group Headquarters Building, Zhukeng Community, Longtian Street, Pingshan District, Shenzhen, with industrial and commercial change registration completed on May 23, 2025[21][24] - The company's semi-annual report is disclosed through Securities Times and Cninfo (www.cninfo.com.cn)[23](index=23&type=chunk) IV. Key Accounting Data and Financial Indicators The company's operating revenue decreased by 21.14% year-over-year, with net profit attributable to shareholders significantly declining by 178.89%, primarily due to accounting policy changes and operational pressures Key Accounting Data and Financial Indicators (Year-over-Year Change) | Indicator | Current Reporting Period (Yuan) | Prior Year Period (Adjusted, Yuan) | Change from Prior Year Period (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 212,996,906.59 | 270,082,507.18 | -21.14% | | Net Profit Attributable to Shareholders of Listed Company | -54,153,881.11 | -19,417,925.87 | -178.89% | | Net Profit Attributable to Shareholders of Listed Company (Excluding Non-Recurring Gains/Losses) | -57,553,088.47 | -31,176,493.48 | -84.60% | | Net Cash Flow from Operating Activities | -21,931,162.18 | -9,893,984.57 | -121.66% | | Basic Earnings Per Share (Yuan/share) | -0.0653 | -0.0246 | -165.45% | | Weighted Average Return on Net Assets | -26.12% | -46.37% | 20.25% | | Period-End Indicators | Current Period-End (Yuan) | Prior Year-End (Adjusted, Yuan) | Change from Prior Year-End (%) | | Total Assets | 899,757,832.70 | 1,007,373,471.57 | -10.68% | | Net Assets Attributable to Shareholders of Listed Company | 191,495,820.39 | 234,414,952.78 | -18.31% | - The company changed the measurement model for investment properties from the cost model to the fair value model, applying retrospective adjustment to more objectively reflect fair value and enhance financial information accuracy[25][26] V. Differences in Accounting Data Under Domestic and Overseas Accounting Standards During the reporting period, the company reported no differences in net profit and net assets between financial statements prepared under international or overseas accounting standards and those under Chinese accounting standards - The company's financial reports for the reporting period show no differences in net profit and net assets between International Accounting Standards and Chinese Accounting Standards[27] - The company's financial reports for the reporting period show no differences in net profit and net assets between overseas accounting standards and Chinese Accounting Standards[28] VI. Non-Recurring Gains and Losses and Amounts The company's total non-recurring gains and losses for this reporting period amounted to 3,399,207.36 Yuan, primarily from disposal gains/losses of non-current assets and government subsidies recognized in current profit or loss Non-Recurring Gains and Losses Items and Amounts | Item | Amount (Yuan) | | :--- | :--- | | Gains or losses from disposal of non-current assets (including the write-off portion of asset impairment provisions) | 133,277.43 | | Government subsidies recognized in current profit or loss (excluding government subsidies closely related to the company's normal business operations, compliant with national policies, enjoyed according to fixed standards, and having a continuous impact on the company's profit or loss) | 3,246,015.43 | | Other non-operating income and expenses apart from the above items | 21,741.48 | | Impact of minority interests (after tax) | 1,826.98 | | Total | 3,399,207.36 | Third Section: Management Discussion and Analysis This section provides an in-depth analysis of the company's business operations, financial performance, core competencies, and the risks it faces during the reporting period I. Main Business Activities of the Company During the Reporting Period During the reporting period, the LED lighting industry's recovery slowed, with orders shifting to emerging markets due to US tariff policies, impacting the company's revenue and net profit across its diverse product portfolio - In the first half of 2025, the LED lighting industry's recovery slowed, with US tariff policies causing domestic enterprise orders to shift to emerging markets such as Southeast Asia, Europe, and Africa[32] - The company primarily engages in the research, design, production, and sales of LED off-grid lighting, emergency lighting, electric fans, portable energy storage products, and LED lighting source devices[33] - During the reporting period, the company's operating revenue decreased by 21.14% year-over-year, and net profit attributable to shareholders decreased by 178.89%, primarily due to industry competition, tariff policies, and share-based payment expenses[56] (I) Industry Overview In the first half of 2025, the LED lighting industry experienced a slow recovery, with US tariff policies redirecting orders to emerging markets, while high-value segments like automotive LED and Mini-LED backlighting saw growth amidst a "volume and price decline" in the downstream mobile lighting replacement market - The LED lighting industry's recovery slowed, with US tariff policies causing domestic enterprise orders to shift to Southeast Asia, Europe, and Africa[32] - Demand in the midstream packaging market is regionally differentiated, with emerging markets rising and high-value segments like automotive LED and Mini-LED backlighting showing significant results[32] - The downstream mobile lighting market is seeing accelerated penetration of LED smart lighting, but the existing replacement market is experiencing a "volume and price decline" trend[32] (II) Company's Industry Position The company is dedicated to the LED lighting sector, extending its business from packaging to off-grid lighting applications, with its subsidiary Kangmingsheng leading the industry in off-grid and smart lighting, possessing independent intellectual property and a global sales network - The company's business extends from white LED packaging for lighting to downstream off-grid lighting application fields[33] - The controlling subsidiary Kangmingsheng highly focuses on off-grid lighting business and has expanded into smart lighting and off-grid home appliance businesses, possessing independent intellectual property rights and holding a leading position in the industry[33] (III) Company's Main Business The company's main business involves the R&D, production, and sales of LED off-grid lighting, emergency lighting, electric fans, portable energy storage products, and LED lighting source devices, widely used in daily life, work, outdoor activities, and emergency relief - The company primarily engages in the research, design, production, and sales of LED off-grid lighting, emergency lighting, electric fans, portable energy storage products, and other electronic products, as well as LED lighting source devices[33] - Lighting and other electronic products are widely used in daily life, production operations, outdoor leisure, fire protection, and emergency relief scenarios[33] (IV) Main Products and Uses Kangmingsheng's main products include off-grid lighting, home appliances, and portable energy storage, while Jiangxi Changfang focuses on SMD LED light sources for various applications, actively developing high-efficiency and plant lighting products - Kangmingsheng's main products include off-grid lighting (LED headlamps, flashlights, portable searchlights, emergency lights), off-grid home appliances (electric mosquito swatters, emergency fans, desk lamps), portable energy storage products, and general lighting products[34][35][36][37][38][39][40][41][42][43] - Jiangxi Changfang's main products are SMD patch-type LED light source products, covering mainstream packaging fields such as PPA, PCT, and EMC, widely used in lighting, display, and indicator electronics, and actively developing high-efficiency, high-CRI, and plant lighting products[44][45] (V) Main Business Models Kangmingsheng employs a sales model primarily through distributors, supplemented by ODM and e-commerce, with a combined "planned production" and "order-based production" approach, while Jiangxi Changfang focuses on "order-based production" for its sales via distributors, direct sales, and OEM/ODM - Kangmingsheng's sales model is primarily distributor-based, supplemented by ODM and e-commerce, covering both domestic and international sales; procurement is managed by the procurement department with assistance from quality and R&D; production combines "planned production" and "order-based production"; R&D is collaborative among product, R&D, and brand centers[46][47][50][52] - Jiangxi Changfang's sales model includes distributors, direct sales, and OEM/ODM; its procurement model combines planned and order-based procurement; and its production model is primarily "order-based production" supplemented by "replenishment production"[54][55] - Kangmingsheng's profitability model is primarily based on the research, development, production, and sales of LED mobile lighting application products, continuously launching new products to meet customer needs and establishing an extensive dealer network[54] (VI) Main Performance Drivers During the reporting period, the company's operating revenue and net profit significantly declined due to slow domestic demand, squeezed market share in Southeast Asia, intense domestic competition, and increased share-based payment expenses 2025 Semi-Annual Performance Overview | Indicator | Amount (10,000 Yuan) | Year-over-Year Change (%) | | :--- | :--- | :--- | | Operating Revenue | 21,299.69 | -21.14% | | Net Profit Attributable to Shareholders of Listed Company | -5,415.39 | -178.89% | | Net Profit After Non-Recurring Gains/Losses | -5,755.31 | -84.60% | - Key drivers for performance decline include slow growth in domestic demand due to the "trade-in" policy, squeezed market share in Southeast Asia due to tariff policy adjustments and peer competition, intense competition in the domestic lighting industry, and increased share-based payment expenses[56][57] - The company plans to enhance operational efficiency by deepening cost control, strengthening inventory turnover management, optimizing production management systems, increasing R&D investment in new products, boosting e-commerce channel investment, and implementing diversified sales channels[57] II. Core Competitiveness Analysis Leveraging years of experience in LED lighting, the company has developed four core competitive advantages: R&D innovation, large-scale manufacturing, extensive sales channels, and a rich product structure with strong brand recognition - The company possesses R&D innovation advantages, with its controlling subsidiary Kangmingsheng having a forward-looking R&D and design team that has won multiple design awards, including Germany's Red Dot and IF[58] - The company boasts a scale advantage, encompassing a comprehensive manufacturing system including design, R&D, molds, injection molding, and production; Kangmingsheng operates a modern production base in Jiangxi with the industry's largest production lines and cost control advantages[58] - The company has established a comprehensive, multi-dimensional sales network both domestically and internationally, covering online and offline channels, demonstrating extensive channel advantages[59] - The company offers a rich product structure, with its off-grid lighting business covering ten series and over 500 products, and owns multiple proprietary brands such as "Kangmingsheng," "VAVOFO," "Duolangda," and "KAMISAFE," enhancing its brand effect[59] III. Main Business Analysis During this reporting period, the company's main business operating revenue decreased by 21.14%, with operating costs down 18.00%, leading to a decline in gross profit margin, while management expenses increased by 28.24% due to share-based payments Key Financial Data Year-over-Year Changes | Indicator | Current Reporting Period (Yuan) | Prior Year Period (Yuan) | Year-over-Year Change (%) | Reason for Change | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue | 212,996,906.59 | 270,082,507.18 | -21.14% | | | Operating Cost | 162,501,023.88 | 198,174,509.54 | -18.00% | | | Selling Expenses | 19,184,597.61 | 17,283,121.57 | 11.00% | | | Administrative Expenses | 42,000,175.92 | 32,752,234.34 | 28.24% | Primarily due to increased share-based payments during the reporting period | | Net Cash Flow from Operating Activities | -21,931,162.18 | -9,893,984.57 | -121.66% | Decrease in cash received from sales of goods and services, and increase in cash paid for other operating activities | | Asset Impairment Losses | -10,032,389.70 | -5,764,880.23 | -74.03% | Primarily due to provision for inventory depreciation during the reporting period | Segmented Product or Service Performance | Product or Service | Operating Revenue (Yuan) | Operating Cost (Yuan) | Gross Profit Margin (%) | Year-over-Year Change in Operating Revenue (%) | | :--- | :--- | :--- | :--- | :--- | | Industrial | 202,044,896.77 | 158,593,786.53 | 21.51% | -21.89% | | SMD LED (including high-power) | 15,665,034.87 | 18,395,743.65 | -17.43% | -44.52% | | Mobile Lighting Application Products and Other Electronic Products | 186,379,861.90 | 140,198,042.88 | 24.78% | -19.12% | Regional Sales Performance | Region | Operating Revenue (Yuan) | Operating Cost (Yuan) | Gross Profit Margin (%) | Year-over-Year Change in Operating Revenue (%) | | :--- | :--- | :--- | :--- | :--- | | Domestic | 79,343,145.75 | 58,051,261.28 | 26.84% | -40.61% | | International | 122,701,751.02 | 100,542,525.25 | 18.06% | -1.88% | Sales Performance by Sales Model | Sales Model Category | Current Reporting Period Amount (Yuan) | Proportion of Operating Revenue (%) | Prior Year Period Amount (Yuan) | Proportion of Operating Revenue (%) | Year-over-Year Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | LED Product Distribution | 74,260,752.24 | 36.75% | 139,903,332.42 | 54.09% | -46.92% | | LED Product Direct Sales | 127,784,144.53 | 63.25% | 118,759,981.58 | 45.91% | 7.60% | IV. Non-Main Business Analysis Non-main business activities negatively impacted total profit this reporting period, primarily due to asset impairment losses (inventory depreciation) and credit impairment losses (accounts receivable), partially offset by government subsidies and asset disposal gains Impact of Non-Main Business on Total Profit | Item | Amount (Yuan) | Proportion of Total Profit (%) | Explanation of Cause | Sustainability | | :--- | :--- | :--- | :--- | :--- | | Asset Impairment | -10,032,389.70 | 18.41% | Primarily due to provision for inventory depreciation | No | | Credit Impairment Losses | -2,089,696.64 | 3.84% | Primarily due to provision for accounts receivable credit risk impairment losses | No | | Other Income | 3,274,700.72 | -6.01% | Primarily from government subsidies | No | | Gains from Asset Disposal | 133,277.43 | -0.24% | Primarily due to gains from disposal of fixed assets during the reporting period | No | V. Analysis of Assets and Liabilities At the end of the reporting period, the company's total assets and net assets attributable to shareholders both decreased, with a notable portion of assets, including cash, fixed assets, intangible assets, and investment properties, being restricted due to pledges or legal freezes Significant Changes in Asset Composition (Period-End Comparison) | Item | Current Period-End Amount (Yuan) | Proportion of Total Assets (%) | Prior Year-End Amount (Yuan) | Proportion of Total Assets (%) | Change in Proportion (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Cash and Cash Equivalents | 14,939,068.86 | 1.66% | 74,977,187.81 | 7.44% | -5.78% | | Inventories | 72,270,138.90 | 8.03% | 87,823,965.42 | 8.72% | -0.69% | | Investment Properties | 299,100,000.00 | 33.24% | 299,100,000.00 | 29.69% | 3.55% | | Fixed Assets | 274,822,130.64 | 30.54% | 288,321,231.28 | 28.62% | 1.92% | | Contract Liabilities | 1,108,328.90 | 0.12% | 4,744,173.74 | 0.47% | -0.35% | Asset Rights Restricted as of the End of the Reporting Period | Item | Carrying Amount (Yuan) | Reason for Restriction | | :--- | :--- | :--- | | Cash and Cash Equivalents | 562,511.24 | Bank bill deposits, litigation freeze | | Fixed Assets | 133,571,197.95 | Loan collateral | | Intangible Assets | 22,691,934.95 | Loan collateral | | Investment Properties | 299,100,000.00 | Loan collateral, litigation freeze | | Total | 455,925,644.14 | | VI. Investment Analysis During the reporting period, the company did not engage in any significant equity investments, non-equity investments, wealth management, derivative investments, or entrusted loans, nor did it utilize any raised funds - The company had no use of raised funds during the reporting period[72] - The company had no entrusted wealth management, derivative investments, or entrusted loans during the reporting period[73][74][75] VII. Major Asset and Equity Sales During the reporting period, the company did not sell any major assets or equity - The company did not sell any major assets during the reporting period[76] - The company did not sell any major equity during the reporting period[77] VIII. Analysis of Major Holding and Participating Companies The company's main holding subsidiaries, Kangmingsheng and Jiangxi Changfang, both manufacturing entities, reported losses during the reporting period, with Kangmingsheng's net profit at -25.35 million Yuan and Jiangxi Changfang's at -11.71 million Yuan Major Subsidiary Financial Overview | Company Name | Company Type | Main Business | Registered Capital (Yuan) | Total Assets (Yuan) | Net Assets (Yuan) | Operating Revenue (Yuan) | Operating Profit (Yuan) | Net Profit (Yuan) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Kangmingsheng | Subsidiary | Manufacturing | 107,476,000.00 | 438,631,305.41 | 174,628,177.37 | 188,499,456.18 | -25,595,070.75 | -25,351,448.98 | | Jiangxi Changfang | Subsidiary | Manufacturing | 312,244,900.00 | 20,916,898.15 | -61,402,164.93 | 16,459,152.23 | -11,763,853.04 | -11,713,853.04 | IX. Information on Structured Entities Controlled by the Company During the reporting period, the company did not control any structured entities - The company had no controlled structured entities during the reporting period[79] X. Risks Faced by the Company and Countermeasures The company faces risks including intensified market competition, talent loss, liquidity issues, rising raw material and labor costs, foreign exchange rate fluctuations, and new product development challenges, which it plans to address through various strategic measures - The company faces risks such as intensified market competition, talent loss, liquidity, rising raw material prices and labor costs, foreign exchange rate fluctuations, and new product development[78][79][80][81] - Countermeasures include strengthening core competitive advantages, enhancing customer cooperation, integrating upstream and downstream resources, optimizing human resource allocation, revitalizing existing assets, reinforcing cost control, closely monitoring exchange rates, and increasing market research and R&D investment[78][79][80][81] - To attract and retain talent, the company implemented an equity incentive plan in 2024[79] XI. Registration Form for Investor Relations Activities During the Reporting Period On April 14, 2025, the company hosted an online performance briefing for all investors to discuss its 2024 annual results Investor Relations Activities During the Reporting Period | Reception Time | Reception Venue | Reception Method | Type of Reception Object | Main Content Discussed | | :--- | :--- | :--- | :--- | :--- | | April 14, 2025 | Value Online (https://www.ir-online.cn/) online interaction | Online platform communication | Other (all investors participating in the company's 2024 annual performance briefing online) | 2024 Annual Performance Briefing | XII. Formulation and Implementation of Market Value Management System and Valuation Enhancement Plan The company has not formulated a market value management system nor disclosed a valuation enhancement plan - The company has not formulated a market value management system[83] - The company has not disclosed a valuation enhancement plan[83] XIII. Implementation of "Quality and Return Dual Improvement" Action Plan The company has not disclosed an announcement regarding its "Quality and Return Dual Improvement" action plan - The company has not disclosed an announcement regarding its "Quality and Return Dual Improvement" action plan[83] Fourth Section: Corporate Governance, Environment, and Society This section details the company's corporate governance structure, environmental disclosures, and social responsibility initiatives during the reporting period I. Changes in Directors, Supervisors, and Senior Management of the Company During the reporting period, there were no changes in the company's directors, supervisors, or senior management, consistent with the 2024 annual report - There were no changes in the company's directors, supervisors, and senior management during the reporting period[85] II. Profit Distribution and Capital Reserve Conversion to Share Capital During This 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 period[86] III. Implementation of Company's Equity Incentive Plans, Employee Stock Ownership Plans, or Other Employee Incentive Measures During the reporting period, the company had no equity incentive plans, employee stock ownership plans, or other employee incentive measures in place or implemented - The company had no equity incentive plans, employee stock ownership plans, or other employee incentive measures and their implementation during the reporting period[87] IV. Environmental Information Disclosure Neither the company nor its major subsidiaries were included in the list of enterprises required to disclose environmental information by law - The listed company and its major subsidiaries were not included in the list of enterprises required to disclose environmental information by law[88] V. Social Responsibility The company upholds legal and ethical operations, actively fulfilling its social responsibilities by protecting shareholder, employee, and customer rights, prioritizing environmental protection, and engaging in public welfare initiatives - The company protects shareholder rights by establishing a sound corporate governance structure and ensuring timely and accurate information disclosure[88] - The company protects employees' legitimate rights and promotes mutual growth by improving employment systems, establishing incentive mechanisms, and providing training[88] - The company selects suppliers based on fair principles and provides high-quality products and services to customers, safeguarding the rights of both suppliers and customers[89] - The company places high importance on environmental protection, adhering to green, low-carbon, and environmentally friendly principles, optimizing production processes, and enhancing employees' environmental awareness[89] - The company actively participates in social welfare activities, serving and giving back to society[90] Fifth Section: Significant Matters This section covers significant events including unfulfilled commitments, related party transactions, litigation, penalties, and other material developments affecting the company I. Commitments Fulfilled During the Reporting Period and Overdue Unfulfilled Commitments as of the End of the Reporting Period by the Company's Actual Controller, Shareholders, Related Parties, Acquirers, and Other Committed Parties During the reporting period, several commitments made by Kangmingsheng's transaction counterparties, including Li Dichu, Li Yinghong, and Nie Wei, regarding avoiding horizontal competition, standardizing related-party transactions, increasing shareholdings, and recovering accounts receivable, remained overdue and unfulfilled due to alleged criminal activities by the committed parties - Kangmingsheng's transaction counterparties, Li Dichu, Li Yinghong, and Nie Wei, have overdue and unfulfilled commitments regarding avoiding horizontal competition and standardizing related-party transactions, as the committed parties are suspected of criminal offenses[92] - Kangmingsheng's transaction counterparties' commitment to increase shareholdings by no less than 330 million Yuan remains unfulfilled, and the transaction consideration has not been fully paid, with the committed parties suspected of criminal offenses[94] - Li Dichu and Nie Wei's commitment to recover no less than 90% of Kangmingsheng's accounts receivable is overdue and unfulfilled, as the committed parties are suspected of criminal offenses[94] - The company has reported the case to the public security authorities and will, based on the judicial outcome, pursue litigation or other means to compel the counterparties to fulfill their commitments or compensate the company for losses[94] II. Non-Operating Funds Occupied by Controlling Shareholders and Other Related Parties of the Listed Company During the reporting period, the company had no instances of non-operating funds being occupied by controlling shareholders or other related parties - The company had no instances of non-operating funds being occupied by controlling shareholders or other related parties of the listed company during the reporting period[95] III. Irregular External Guarantees During the reporting period, the company had no irregular external guarantees - The company had no irregular external guarantees during the reporting period[97] IV. Appointment and Dismissal of Accounting Firms The company's semi-annual financial report was unaudited - The company's semi-annual report was unaudited[98] V. Explanations by the Board of Directors and Audit Committee Regarding "Non-Standard Audit Reports" for This Reporting Period The company did not have a non-standard audit report for this reporting period - The company did not have a non-standard audit report for this reporting period[99] VI. Explanations by the Board of Directors Regarding "Non-Standard Audit Reports" for the Previous Year The company did not have a non-standard audit report for the previous year - The company did not have a non-standard audit report for the previous year[99] VII. Bankruptcy and Reorganization Matters During the reporting period, the company had no bankruptcy and reorganization related matters - The company had no bankruptcy and reorganization related matters during the reporting period[99] VIII. Litigation Matters The company and its subsidiaries are involved in multiple significant lawsuits, including service payment disputes, sales contract disputes, shareholder liability for harming company creditors, and lease contract disputes, with amounts ranging from millions to over a hundred million Yuan, some in execution, awaiting retrial, or still under review Overview of Major Litigation and Arbitration Matters | Litigation (Arbitration) Basic Information | Amount Involved (10,000 Yuan) | Litigation (Arbitration) Progress | | :--- | :--- | :--- | | Lawsuit against a Shenzhen company and a Puning company for unpaid service fees (June 20, 2020) | 1,897 | The court has resumed enforcement proceedings and is currently executing. | | Sales contract lawsuit against a Shenzhen electronics company (January 13, 2022) | 983.04 | The counterparty has no other assets available for enforcement; the company has filed to add the counterparty's two shareholders as respondents for enforcement, which is currently underway. | | Deng Zichang, Deng Ziquan shareholder liability dispute for harming company creditors (March 5, 2024) | 3,985.26 | The court has ruled to withdraw the lawsuit, and the case is closed. | | Lawsuit against a Shenzhen company and a Puning company for unpaid service fees (April 24, 2024) | 6,932.72 | The court has rendered a first-instance judgment; the company appealed the dismissed claims, the second instance upheld the original judgment, and the court subsequently ruled to initiate a retrial, awaiting judgment. | | Deng Zichang, Deng Ziquan liability dispute for harming company creditors (February 21, 2025) | 10,336.23 | As of the disclosure date of this report, the case has not yet been heard. | | Lease contract dispute between a Shenzhen company and Kangmingsheng (March 13, 2025) | 2,246.67 | As of the disclosure date of this report, the case is still under review. | IX. Penalties and Rectification Measures The company was warned and fined 4 million Yuan by the Shenzhen Securities Regulatory Bureau and publicly condemned by the Shenzhen Stock Exchange for its controlling subsidiary Kangmingsheng's inflated profits and accounts receivable, leading to false statements in its 2020 and 2021 annual reports Company and Related Personnel Penalties | Name/Individual | Type | Reason | Type of Investigation/Penalty | Conclusion | | :--- | :--- | :--- | :--- | :--- | | Changfang Group | Other | Controlling subsidiary Kangmingsheng inflated profits and accounts receivable, leading to false statements in annual reports | Investigation or administrative penalty by China Securities Regulatory Commission, public condemnation by stock exchange | Shenzhen Securities Regulatory Bureau issued a warning and a fine of 4 million Yuan; Shenzhen Stock Exchange issued a public condemnation. | | Liu Zhigang | Director | Same as above | Same as above | Shenzhen Securities Regulatory Bureau issued a warning and a fine of 1.5 million Yuan; Shenzhen Stock Exchange issued a public condemnation. | | Jiang Wei | Director, Senior Management | Same as above | Same as above | Shenzhen Securities Regulatory Bureau issued a warning and a fine of 1.5 million Yuan; Shenzhen Stock Exchange issued a public condemnation. | | Jiangxi Kangmingsheng | Other | Product quality issues | Other | Gao'an City Market Supervision Administration decided to fine Jiangxi Kangmingsheng 7,262.4 Yuan and confiscate illegal gains of 1,737.6 Yuan. | X. Integrity Status of the Company, its Controlling Shareholder, and Actual Controller During the reporting period, the company, its controlling shareholder, and actual controller had no unfulfilled court judgments or significant overdue debts - The company had no unfulfilled court judgments or significant overdue debts during the reporting period[109] XI. Major Related Party Transactions During the reporting period, the company did not engage in any related party transactions concerning daily operations, asset or equity acquisitions/disposals, joint external investments, related party creditor-debtor relationships, or dealings with affiliated financial companies - The company had no related party transactions related to daily operations during the reporting period[109] - The company had no related party transactions involving asset or equity acquisitions or disposals during the reporting period[110] - The company had no related party creditor-debtor relationships during the reporting period[112] XII. Major Contracts and Their Performance During the reporting period, the company had no entrustment or contracting arrangements; as a lessor, its rental income primarily came from Shenzhen Changfang Industrial Park, totaling 9,057,373.08 Yuan, while as a lessee, its rental costs were mainly from Fukang Industrial Park, amounting to 2,901,421.70 Yuan - The company had no entrustment or contracting arrangements during the reporting period[116][117] Leasing Situation (as Lessor) | Lessee Name | Type of Leased Asset | 2025 January-June Income (Yuan) | 2024 January-June Income (Yuan) | | :--- | :--- | :--- | :--- | | Lease Customer 1 | Shenzhen Changfang Industrial Park | 9,057,373.08 | 8,626,069.60 | | Total | | 9,057,373.08 | 8,626,069.60 | Leasing Situation (as Lessee) | Lessor Name | Type of Leased Asset | 2025 January-June Cost (Yuan) | 2024 January-June Cost (Yuan) | | :--- | :--- | :--- | :--- | | Lessor 1 | Fukang Industrial Park | 2,901,421.70 | 4,201,953.04 | | Total | | 2,901,421.70 | 4,201,953.04 | Company Guarantee Total | Indicator | Amount (10,000 Yuan) | | :--- | :--- | | Total approved guarantee limit at period-end | 60,000 | | Total actual guarantee balance at period-end | 3,000 | | Proportion of actual guarantee total to company's net assets | 15.67% | | Debt guarantee balance provided directly or indirectly to guaranteed parties with asset-liability ratio exceeding 70% | 1,500 | XIII. Explanation of Other Significant Matters The company's stock trading was subject to other risk warnings starting January 13, 2025, due to its controlling subsidiary Kangmingsheng's inflated profits and accounts receivable, which resulted in false statements in the 2020 and 2021 annual reports - The company's stock trading was subject to other risk warnings starting January 13, 2025, due to its controlling subsidiary Kangmingsheng's inflated profits and accounts receivable, which resulted in false statements in the 2020 and 2021 annual reports[127] XIV. Significant Matters of Company Subsidiaries The company's controlling subsidiary Kangmingsheng is under investigation by the China Securities Regulatory Commission for allegedly obstructing supervision, with related personnel fined, and its former management team is under police investigation for suspected concealment and destruction of accounting documents - Controlling subsidiary Kangmingsheng is under investigation by the China Securities Regulatory Commission for allegedly refusing and obstructing the lawful performance of supervisory inspection duties by securities regulatory authorities, with relevant responsible persons fined[128] - Some members of Kangmingsheng's former management team are under police investigation for suspected concealment and intentional destruction of accounting vouchers and other related cases, with the investigation ongoing[128] Sixth Section: Changes in Shares and Shareholder Information This section outlines changes in the company's share capital, shareholder structure, and the holdings of directors, supervisors, and senior management I. Changes in Shares During the reporting period, the company's total share capital remained unchanged, with the number and proportion of restricted and unrestricted shares also stable Changes in Shares | Category | Number of Shares Before Change (shares) | Proportion Before Change (%) | Increase/Decrease in This Change (＋,－) | Number of Shares After Change (shares) | Proportion After Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | I. Restricted Shares | 39,992,050 | 4.82% | 0 | 39,992,050 | 4.82% | | II. Unrestricted Shares | 789,876,719 | 95.18% | 0 | 789,876,719 | 95.18% | | III. Total Shares | 829,868,769 | 100.00% | 0 | 829,868,769 | 100.00% | - During the reporting period, the company's total share capital, restricted shares, and unrestricted shares all remained unchanged[132] II. Issuance and Listing of Securities During the reporting period, the company had no issuance or listing of securities - The company had no issuance or listing of securities during the reporting period[132] III. Company Shareholder Numbers and Shareholding Structure As of the end of the reporting period, the company had 19,117 common shareholders, with Nanchang Xinwang Capital Enterprise (Limited Partnership) as the largest shareholder holding 7.14%; among the top ten shareholders, Li Dichu's 20,974,776 shares were frozen - As of the end of the reporting period, the total number of common shareholders was 19,117[134] Shareholding of Shareholders Holding 5% or More or Top 10 Shareholders | Shareholder Name | Shareholder Nature | Shareholding Ratio (%) | Number of Shares Held at Period-End (shares) | Pledge, Mark, or Freeze Status (Share Status / Number) | | :--- | :--- | :--- | :--- | :--- | | Nanchang Xinwang Capital Enterprise (Limited Partnership) | Domestic Non-State-Owned Legal Person | 7.14% | 59,258,158 | Not Applicable / 0 | | Luo Koshu | Domestic Natural Person | 4.76% | 39,495,341 | Not Applicable / 0 | | Wang Gang | Domestic Natural Person | 4.14% | 34,344,861 | Not Applicable / 0 | | Li Dichu | Domestic Natural Person | 2.53% | 20,974,776 | Frozen / 20,974,776 | - The company is unaware of any associated relationships or concerted actions among the top 10 shareholders[134] IV. Changes in 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, as detailed in the 2024 annual report - There were no changes in the shareholdings of the company's directors, supervisors, and senior management during the reporting period[136] V. Changes in Controlling Shareholder or Actual Controller During the reporting period, there were no changes in the company's controlling shareholder or actual controller - The company's controlling shareholder did not change during the reporting period[137] - The company's actual controller did not change during the reporting period[137] VI. Preferred Shares Information During the reporting period, the company had no preferred shares - The company had no preferred shares during the reporting period[138] Seventh Section: Bond-Related Information This section provides information regarding the company's bond-related activities and status during the reporting period Bond-Related Information During the reporting period, the company had no bond-related information - The company had no bond-related information during the reporting period[140] Eighth Section: Financial Report This section presents the company's unaudited financial statements, including balance sheets, income statements, cash flow statements, and notes to the financial statements I. Audit Report The company's semi-annual financial report was unaudited - The company's semi-annual financial report was unaudited[142] II. Financial Statements This section includes the company's 2025 semi-annual consolidated and parent company balance sheets, income statements, cash flow statements, and statements of changes in owners' equity, showing total assets of 899 million Yuan, net assets attributable to the parent company of 191 million Yuan, operating revenue of 213 million Yuan, net profit of -54.18 million Yuan, and net cash flow from operating activities of -21.93 million Yuan Consolidated Balance Sheet Key Data (Period-End) | Item | Period-End Balance (Yuan) | | :--- | :--- | | Total Assets | 899,757,832.70 | | Total Liabilities | 707,481,826.00 | | Total Owners' Equity Attributable to Parent Company | 191,495,820.39 | Consolidated Income Statement Key Data (Current Period) | Item | Current Period Amount (Yuan) | | :--- | :--- | | Total Operating Revenue | 212,996,906.59 | | Operating Profit | -54,480,891.81 | | Total Profit | -54,487,835.62 | | Net Profit | -54,187,847.84 | | Net Profit Attributable to Parent Company Shareholders | -54,153,881.11 | Consolidated Cash Flow Statement Key Data (Current Period) | Item | Current Period Amount (Yuan) | | :--- | :--- | | Net Cash Flow from Operating Activities | -21,931,162.18 | | Net Cash Flow from Investing Activities | -4,180,978.01 | | Net Cash Flow from Financing Activities | -35,129,321.34 | | Net Increase in Cash and Cash Equivalents | -60,276,051.80 | 1、Consolidated Balance Sheet As of June 30, 2025, the company's total consolidated assets were 899 million Yuan, a 10.68% decrease from the beginning of the period, with investment properties accounting for 33.24% of total assets Consolidated Balance Sheet Major Items (Period-End) | Item | Period-End Balance (Yuan) | Period-Beginning Balance (Yuan) | | :--- | :--- | :--- | | Cash and Cash Equivalents | 14,939,068.86 | 74,977,187.81 | | Accounts Receivable | 104,814,797.09 | 102,956,390.92 | | Inventories | 72,270,138.90 | 87,823,965.42 | | Investment Properties | 299,100,000.00 | 299,100,000.00 | | Fixed Assets | 274,822,130.64 | 288,321,231.28 | | Short-Term Borrowings | 85,807,366.72 | 87,530,176.46 | | Other Payables | 412,155,181.72 | 440,303,202.58 | | Total Owners' Equity Attributable to Parent Company | 191,495,820.39 | 234,414,952.78 | 2、Parent Company Balance Sheet As of June 30, 2025, the parent company's total assets were 1.278 billion Yuan, with long-term equity investments and investment properties being significant non-current assets, and total owners' equity at 736 million Yuan Parent Company Balance Sheet Major Items (Period-End) | Item | Period-End Balance (Yuan) | Period-Beginning Balance (Yuan) | | :--- | :--- | :--- | | Cash and Cash Equivalents | 654,757.70 | 905,189.52 | | Accounts Receivable | 43,423,648.81 | 38,331,428.38 | | Long-Term Equity Investments | 758,907,198.95 | 752,970,527.15 | | Investment Properties | 299,100,000.00 | 299,100,000.00 | | Short-Term Borrowings | 70,790,908.39 | 72,512,072.29 | | Other Payables | 406,956,282.33 | 416,744,072.23 | | Total Owners' Equity | 736,699,607.47 | 742,586,158.15 | 3、Consolidated Income Statement For this reporting period, the company's consolidated total operating revenue was 213 million Yuan, a 21.14% year-over-year decrease, resulting in negative operating profit, total profit, and net profit, with net profit attributable to parent company shareholders at -54.15 million Yuan Consolidated Income Statement Key Data (Current Period) | Item | 2025 Semi-Annual (Yuan) | 2024 Semi-Annual (Yuan) | | :--- | :--- | :--- | | Total Operating Revenue | 212,996,906.59 | 270,082,507.18 | | Total Operating Costs | 258,763,690.21 | 290,275,050.55 | | Administrative Expenses | 42,000,175.92 | 32,752,234.34 | | Operating Profit | -54,480,891.81 | -20,368,393.08 | | Net Profit | -54,187,847.84 | -19,407,085.45 | | Net Profit Attributable to Parent Company Shareholders | -54,153,881.11 | -19,417,925.87 | | Basic Earnings Per Share (Yuan/share) | -0.0653 | -0.0246 | 4、Parent Company Income Statement For this reporting period, the parent company's operating revenue was 19.76 million Yuan, a 41.38% year-over-year decrease, resulting in negative operating profit and net profit of -17.12 million Yuan, indicating an expanded loss Parent Company Income Statement Key Data (Current Period) | Item | 2025 Semi-Annual (Yuan) | 2024 Semi-Annual (Yuan) | | :--- | :--- | :--- | | Operating Revenue | 19,768,952.53 | 33,725,269.96 | | Operating Cost | 11,102,520.13 | 27,182,069.80 | | Administrative Expenses | 16,777,760.19 | 13,050,679.95 | | Financial Expenses | 8,539,155.64 | 14,568,567.47 | | Net Profit | -17,121,299.40 | -14,291,906.84 | 5、Consolidated Cash Flow Statement For this reporting period, the company's net cash flow from operating activities was -21.93 million Yuan, from investing activities -4.18 million Yuan, and from financing activities -35.12 million Yuan, resulting in a net decrease in cash and cash equivalents of -60.27 million Yuan Consolidated Cash Flow Statement Key Data (Current Period) | Item | 2025 Semi-Annual (Yuan) | 2024 Semi-Annual (Yuan) | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | -21,931,162.18 | -9,893,984.57 | | Net Cash Flow from Investing Activities | -4,180,978.01 | 22,678,914.47 | | Net Cash Flow from Financing Activities | -35,129,321.34 | 20,970,202.76 | | Net Increase in Cash and Cash Equivalents | -60,276,051.80 | 35,557,674.29 | | Cash and Cash Equivalents at Period-End | 14,376,557.62 | 47,757,762.55 | 6、Parent Company Cash Flow Statement For this reporting period, the parent company's net cash flow from operating activities was -1.70 million Yuan, from investing activities -28.30 million Yuan, and from financing activities 29.51 million Yuan, resulting in a period-end cash and cash equivalents balance of 92,246.46 Yuan Parent Company Cash Flow Statement Key Data (Current Period) | Item | 2025 Semi-Annual (Yuan) | 2024 Semi-Annual (Yuan) | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | -1,702,860.85 | 14,001,004.67 | | Net Cash Flow from Investing Activities | -28,301,972.10 | -142,511,585.85 | | Net Cash Flow from Financing Activities | 29,516,164.91 | 133,642,481.60 | | Net Increase in Cash and Cash Equivalents | -488,668.67 | 5,131,901.39 | | Cash and Cash Equivalents at Period-End | 92,246.46 | 5,294,634.08 | 7、Consolidated Statement of Changes in Owners' Equity At the end of this reporting period, the company's total consolidated owners' equity was 192 million Yuan, a 18.26% decrease from the beginning of the period, with the 191 million Yuan attributable to parent company owners primarily impacted by net profit losses Consolidated Owners' Equity Changes (Current Period) | Item | Period-Beginning Balance (Yuan) | Current Period Change Amount (Yuan) | Period-End Balance (Yuan) | | :--- | :--- | :--- | :--- | | Share Capital | 829,868,769.00 | 0 | 829,868,769.00 | | Capital Reserves | 778,801,831.66 | 11,234,748.72 | 790,036,580.38 | | Retained Earnings | -1,362,147,899.39 | -54,153,881.11 | -1,416,301,780.50 | | Total Owners' Equity Attributable to Parent Company | 234,414,952.78 | -42,919,132.39 | 191,495,820.39 | | Total Owners' Equity | 235,229,105.82 | -42,953,099.12 | 192,276,006.70 | 8、Parent Company Statement of Changes in Owners' Equity At the end of this reporting period, the parent company's total owners' equity was 736 million Yuan, a 0.8% decrease from the beginning of the period, with retained earnings further reduced by net losses and capital reserves increasing due to share-based payments Parent Company Owners' Equity Changes (Current Period) | Item | Period-Beginning Balance (Yuan) | Current Period Change Amount (Yuan) | Period-End Balance (Yuan) | | :--- | :--- | :--- | :--- | | Share Capital | 829,868,769.00 | 0 | 829,868,769.00 | | Capital Reserves | 1,131,463,850.42 | 11,234,748.72 | 1,142,698,599.14 | | Retained Earnings | -1,206,638,712.78 | -17,121,299.40 | -1,223,760,012.18 | | Total Owners' Equity | 742,586,158.15 | -5,886,550.68 | 736,699,607.47 | III. Company Basic Information The company, with unified social credit code 91440300775562228B, is registered in Pingshan District, Shenzhen, with its office in Longhua District, Shenzhen, and a registered capital of 829.868769 million Yuan, engaging in a broad range of businesses from LED product manufacturing to new energy, with this financial report approved on August 27, 2025 - Company unified social credit code: 91440300775562228B; Registered address: First Floor, Changfang Group Headquarters Building, Zhukeng Community, Longtian Street, Pingshan District, Shenzhen; Office address: Fukang Industrial Park, 221 Renmin Road, Fucheng Street, Longhua District, Shenzhen, Guangdong Province[176] - Legal Representative: Wu Taoxiang; Registered Capital: 829,868,769 Yuan[176] - Business scope includes the production and sales of LED, light-emitting diodes, digital tubes, SMD products, solar light sources, semiconductors, indoor and outdoor lighting products, off-grid lighting products, smart lighting products, special lighting products, and LED lighting source SMD brackets; development of lighting energy-saving technologies; contracting and construction of municipal engineering and electromechanical installation projects; property management, self-owned property leasing, and domestic trade; import and export business; production, R&D, design, and sales of hardware, plastic products, new energy, new materials, electrical appliances, electronic products, lighting products, and smart energy storage products[176] - This financial report was approved by the company's board of directors on August 27, 2025[176] IV. Basis of Financial Statement Preparation The company's financial statements are prepared on a going concern basis, adhering to Enterprise Accounting Standards and relevant CSRC regulations, using the accrual basis of accounting and historical cost measurement, with no significant doubts about its going concern ability within 12 months from the reporting period end - The company's financial statements are prepared on a going concern basis, in accordance with the "Enterprise Accounting Standards - Basic Standards" and specific accounting standards, application guidelines, interpretations, and other relevant regulations issued by the Ministry of Finance on or after February 15, 2006, as well as the disclosure requirements of the China Securities Regulatory Commission's "Information Disclosure Rules for Companies Issuing Securities Publicly No. 15 - General Provisions for Financial Reports (Revised 2023)"[177] - The company's accounting is based on the accrual basis; except for certain financial instruments, these financial statements are measured at historical cost, and provisions for asset impairment are made in accordance with relevant regulations[177] - There are no matters or circumstances that raise significant doubts about the company's ability to continue as a