海利尔(603639) - 2025 Q2 - 季度财报

Definitions Definitions of Common Terms This chapter defines core terms used in the report, covering company entities, reporting periods, ultimate controllers, and various chemical names and mechanisms related to pesticide and fertilizer main businesses, providing a foundation for understanding the report content - The Company refers to Hailir Pesticides and Chemicals Group Co., Ltd., and the reporting period is from January 1, 2025, to June 30, 2025[10] - Detailed definitions are provided for various pesticide types (insecticides, fungicides, herbicides) and their main active ingredients, such as Imidacloprid, Acetamiprid, Thiamethoxam, Clothianidin, Dinotefuran, Emamectin Benzoate, Pyraclostrobin, Prothioconazole, Buprofezin, Chlorfenapyr, Difenoconazole, Propiconazole, and Cyclaniliprole[10][11] - Key concepts such as pesticide technical, pesticide formulation, pesticide intermediate, and fertilizer are explained[10][11] Company Profile and Key Financial Indicators Company Information This section provides the company's basic registration information, including its Chinese name, abbreviation, foreign name and its abbreviation, and legal representative Ge Jiacheng - The company's Chinese name is Hailir Pesticides and Chemicals Group Co., Ltd., abbreviated as Hailir[13] - The company's legal representative is Ge Jiacheng[13] Contact Person and Information This section lists the company's Board Secretary Chi Mingming and their contact information, including address, phone, fax, and email, to facilitate communication with investors and relevant parties - The Board Secretary is Chi Mingming, with the contact address at No. 216 Guocheng Road, Chengyang District, Qingdao[14] - The contact phone and fax are both 0532-58659169, and the email address is hailir@hailir.cn[14] Brief Introduction to Changes in Basic Information This section describes the company's basic information, such as registered address, office address, postal code, website, and email, noting no changes during the reporting period - The company's registered and office addresses are both located in Chengyang District, Qingdao, with no changes during the reporting period[15] - The company's website is http://www.hailir.cn, and the email address is hailir@hailir.cn[15] Brief Introduction to Changes in Information Disclosure and Document Custody Locations This section discloses the company's designated newspapers and website for information disclosure, as well as the custody location for the semi-annual report, confirming no changes during the reporting period - The company's selected newspapers for information disclosure are "China Securities Journal" and "Securities Daily", and the website for publishing the semi-annual report is http://www.sse.com.cn[16](index=16&type=chunk) - The custody location for the company's semi-annual report is the company's Board of Directors Office, with no changes during the reporting period[16] Brief Introduction to Company Stock This section provides basic information about the company's stock, including stock type, listing exchange, stock abbreviation, and stock code - The company's stock is A-shares, listed on the Shanghai Stock Exchange, with stock abbreviation "Hailir" and stock code "603639"[17] Company's Key Accounting Data and Financial Indicators This section presents the company's key accounting data and financial indicators for the first half of 2025, showing year-on-year growth in both operating revenue and net profit, along with improved earnings per share and return on net assets Key Accounting Data (Consolidated Statements) | Item | Current Period (Jan-Jun) | Prior Year Same Period | Current Period vs. Prior Year Same Period Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue (CNY) | 2,608,855,595.59 | 2,406,213,273.01 | 8.42 | | Total Profit (CNY) | 239,268,309.37 | 190,679,436.07 | 25.48 | | Net Profit Attributable to Shareholders of Listed Company (CNY) | 201,470,234.71 | 162,122,402.05 | 24.27 | | Net Profit Attributable to Shareholders of Listed Company After Deducting Non-recurring Gains and Losses (CNY) | 191,027,728.28 | 163,134,629.81 | 17.10 | | Net Cash Flow from Operating Activities (CNY) | -114,516,355.20 | -93,880,596.76 | Not Applicable | | Net Assets Attributable to Shareholders of Listed Company (End of Reporting Period) (CNY) | 3,623,244,784.76 | 3,423,813,794.36 | 5.82 | | Total Assets (End of Reporting Period) (CNY) | 7,201,744,063.26 | 6,864,016,889.81 | 4.92 | Key Financial Indicators | Item | Current Period (Jan-Jun) | Prior Year Same Period | Current Period vs. Prior Year Same Period Change (%) | | :--- | :--- | :--- | :--- | | Basic Earnings Per Share (CNY/share) | 0.59 | 0.48 | 22.92 | | Diluted Earnings Per Share (CNY/share) | 0.59 | 0.48 | 22.92 | | Basic Earnings Per Share After Deducting Non-recurring Gains and Losses (CNY/share) | 0.56 | 0.48 | 16.67 | | Weighted Average Return on Net Assets (%) | 5.72 | 4.67 | 1.05 | | Weighted Average Return on Net Assets After Deducting Non-recurring Gains and Losses (%) | 5.42 | 4.70 | 0.72 | Non-recurring Gains and Losses Items and Amounts This section lists the company's non-recurring gains and losses items and their amounts for the first half of 2025, totaling CNY 10,442,506.43, primarily including fair value changes in financial assets and liabilities, and government subsidies Non-recurring Gains and Losses Items and Amounts | Non-recurring Gains and Losses Item | Amount (CNY) | | :--- | :--- | | Gains and losses from disposal of non-current assets | -486,705.71 | | Government subsidies recognized in current profit or loss | 3,162,201.20 | | Gains and losses from changes in fair value of financial assets and financial liabilities held by non-financial enterprises, and gains and losses from disposal of financial assets and financial liabilities, except for effective hedging activities related to the company's normal business operations | 11,723,613.36 | | Reversal of impairment provisions for receivables subject to separate impairment testing | -443,960.00 | | Other non-operating income and expenses apart from the above | -2,228,755.13 | | Less: Income tax impact | 1,283,887.29 | | Total | 10,442,506.43 | Net Profit After Deducting Impact of Share-based Payments This section discloses the company's net profit after deducting the impact of share-based payments, showing a year-on-year increase of 22.70% for this indicator during the reporting period Net Profit After Deducting Impact of Share-based Payments | Key Accounting Data | Current Period (Jan-Jun) | Prior Year Same Period | Current Period vs. Prior Year Same Period Change (%) | | :--- | :--- | :--- | :--- | | Net Profit After Deducting Impact of Share-based Payments (CNY) | 201,353,714.79 | 164,105,844.78 | 22.70 | Management Discussion and Analysis Explanation of the Company's Industry and Main Business Operations During the Reporting Period This section details the overall development trend of the pesticide industry, the company's main business composition, operating model, and market conditions for key active ingredients in the first half of 2025, emphasizing the inelastic demand for pesticides, China's status as the largest global active ingredient production base, and the company's efforts in product diversification and market expansion Industry Development Status The pesticide industry faces relatively inelastic demand, but domestic "zero growth" policies have reduced application and active ingredient production; global food security drives the expansion of the pesticide formulation market, while rising R&D costs may slow intermediate product launches; China, as the world's largest active ingredient production base, saw a 9.7% year-on-year increase in chemical pesticide active ingredient output in H1 2025 - Pesticides are indispensable production materials for agriculture, with relatively inelastic demand, but the industry is seasonal[28] - China's "zero growth" action for pesticides and fertilizers has reduced pesticide application and active ingredient production, but global food security demands continue to expand the pesticide formulation market[28] - China has become the world's largest active ingredient production base, with national chemical pesticide active ingredient output reaching 2.085 million tons in January-June 2025, a year-on-year increase of 9.7%[29] Main Business The company's main business has not significantly changed, primarily focusing on the R&D, production, and sales of pesticide formulations, intermediates, active ingredients, and water-soluble fertilizers, with products covering various series such as insecticides, fungicides, and herbicides - The company is primarily engaged in the R&D, production, and sales of pesticide formulations, pesticide intermediates, pesticide active ingredients, and water-soluble fertilizers[31] - Pesticide formulations cover series such as insecticides, fungicides, and herbicides, while pesticide active ingredients include various products like Imidacloprid, Acetamiprid, and Pyraclostrobin[31] - Pesticide intermediates mainly include Dichloro, 2-Chloropropionitrile, and p-Chlorophenylglycine, while water-soluble fertilizers cover various types containing amino acids and macronutrients[31] Operating Model The company's operating model remains unchanged, featuring centralized procurement of bulk active ingredients, production of pesticide formulations and fertilizers based on sales with "winter storage," and market-driven production of active ingredients and intermediates; sales channels primarily rely on distributors, with active expansion into government procurement; the future strategy involves a "dual-wheel drive" of active ingredient and formulation integration, alongside simultaneous domestic and international market expansion - The company implements a centralized procurement model for bulk active ingredients and other materials, mitigating risks through advance payments based on market price fluctuations[32] - Pesticide formulations and fertilizers are produced based on sales, with "winter storage" production plans for high-volume products; pesticide active ingredients and intermediates are produced according to market and sales conditions[32] - Sales channels primarily utilize county-level distributors, expanding into government procurement and farmer cooperatives; pesticide active ingredients and intermediates, besides self-use, are mainly sold to domestic pesticide manufacturers, trading companies, and foreign enterprises[32][33] - The company will focus on implementing a "dual-wheel drive" strategy of "integrated development of active ingredients and formulations, with simultaneous domestic and international market expansion"[33] Market Conditions of the Company's Main Active Ingredient Products in H1 2025 The company continuously enriches and differentiates its pesticide varieties, with multiple insecticide and fungicide active ingredient projects successively put into production, hedging against market changes through multi-variety and multi-market strategies to open new performance growth points; this section details the market conditions and characteristics of key active ingredients such as neonicotinoid insecticides, Emamectin Benzoate, Pyraclostrobin, Prothioconazole, Buprofezin, Chlorfenapyr, Difenoconazole, Cyclaniliprole, Dinotefuran, and Propiconazole - The company continuously enriches its pesticide varieties, with multiple insecticide and fungicide active ingredient projects (such as Cyclaniliprole and Dinotefuran) successively entering trial production to hedge against market changes and bring new performance growth points[34] - Neonicotinoid insecticides Imidacloprid and Acetamiprid have large market scales; Thiamethoxam and Clothianidin are highly efficient, low-toxicity second-generation products, broad-spectrum and effective against piercing-sucking pests[35][37] - Emamectin Benzoate is a highly efficient, broad-spectrum, pollution-free biological insecticide with broad market prospects; Pyraclostrobin is one of the top five globally sold broad-spectrum fungicides, with domestic market usage gradually increasing[40][41][43] - Fungicide and insecticide active ingredients such as Prothioconazole, Buprofezin, Chlorfenapyr, Difenoconazole, Cyclaniliprole, Dinotefuran, and Propiconazole all feature high efficiency, broad spectrum, low toxicity, and long-lasting effects, with good market prospects; some products hold the sole registration certificate in China[45][46][47][49][51][52][56] Discussion and Analysis of Operating Conditions In the first half of 2025, the company achieved significant growth in both revenue and net profit attributable to the parent, primarily due to increased production and sales, improved capacity utilization of the Hengning project, reduced costs, and rising prices for some products; during this period, the company completed equity incentive realization, strengthened safety management, deepened its active ingredient development strategy, accelerated breakthroughs in third-party testing, and advanced information platform construction Operating Performance in H1 2025 | Indicator | Amount (CNY billion) | Year-on-Year Growth (%) | | :--- | :--- | :--- | | Sales Revenue | 2.609 | 8.42 | | Net Profit Attributable to Parent Company | 0.201 | 24.27 | - Performance growth is primarily attributed to continuous increases in production and sales volume, gradual improvement in capacity utilization of the Hengning project, cost reductions, and price increases for some products[58] - The company completed the third phase of the 2021 equity incentive plan's reserved grant, unlocking 228,840 shares, effectively incentivizing the management team[59] - Continuous increase in safety investment, significantly enhancing safety management through specialized examination assessments, deepening "standard establishment and institutionalization," and innovating emergency drill models[60] - Deepening the active ingredient development strategy, with multiple new active ingredient projects (such as Cyclaniliprole and Dinotefuran) entering trial production, continuously expanding the active ingredient business scale and perfecting the industrial layout[61] - Wholly-owned subsidiary Qingdao Tengrunxiang Testing and Evaluation Co., Ltd. accelerated breakthroughs in third-party testing, obtaining OECD GLP certification and building an international pharmaceutical safety evaluation platform[62] - Advancing information platform construction, completing the establishment of nine major platforms including marketing, supply chain, business-finance, and human resources, optimizing business processes, and improving management efficiency[63] Analysis of Core Competitiveness During the Reporting Period The company's core competitiveness lies in its integrated advantage of formulations, active ingredients, and intermediates, strong R&D capabilities and comprehensive product structure, as well as its pesticide formulation marketing and brand advantages; these strengths collectively consolidate the company's market position and risk resistance capabilities Integrated Advantage of Formulations, Active Ingredients, and Intermediates By continuously advancing new product layouts and capacity building, the company deepens its integrated strategy of formulations, active ingredients, and intermediates, achieving business complementarity, effectively mitigating the cyclical fluctuation risks of active ingredients, and enhancing overall risk resistance and profitability - The company deepens its integrated strategy of formulations, active ingredients, and intermediates, achieving mutual complementarity and promotion of businesses through new product layouts and capacity building[64] - The integrated advantage effectively mitigates the cyclical fluctuation risks of active ingredients, fully exploits profit opportunities at each stage of the industrial chain, and enhances the company's overall risk resistance capabilities[64] Strong R&D Capabilities and Comprehensive Product Structure The company is a national high-tech enterprise with a national enterprise technology center, a Ministry of Agriculture key pesticide R&D laboratory, and a postdoctoral research workstation; it boasts a robust R&D team, diverse product portfolio, and numerous pesticide and fertilizer registration certificates; wholly-owned subsidiary Qingdao Tengrunxiang provides full-chain pesticide registration services and chemical compliance testing, obtaining OECD GLP certification to accelerate the construction of an international pharmaceutical safety evaluation platform - The company is a "National Torch Program Key High-tech Enterprise" and an "Innovative Pilot Enterprise," possessing a "National Enterprise Technology Center" and a "Ministry of Agriculture Key Pesticide R&D Laboratory"[66] - The company's R&D team has comprehensive departments, covering all aspects of pesticide R&D, making it one of the most complete pesticide R&D centers in China[66] - The company and its subsidiaries hold 254 pesticide registration certificates and multiple fertilizer registration/filing certificates, boasting a rich and comprehensive product portfolio[67] - Wholly-owned subsidiary Qingdao Tengrunxiang Testing and Evaluation Co., Ltd. possesses qualifications as a pesticide registration testing unit from the Ministry of Agriculture and Rural Affairs, CNAS testing accreditation, and has obtained OECD GLP certification, accelerating the construction of an international pharmaceutical safety evaluation platform[67] Pesticide Formulation Marketing and Brand Advantages Adhering to the "Quality Builds Brand" philosophy, the company has established a strong reputation among growers, retailers, and distributors through a rigorous quality tracking system and comprehensive technical marketing services, fostering leading brands like "Hailir" and "Audis"; actively expanding into overseas markets, the company has obtained over 2,100 product registration certificates in dozens of countries and established multiple overseas branches, committed to a dual-wheel drive strategy to enhance comprehensive competitiveness - Adhering to the "Quality Builds Brand" philosophy, the company has established a strong reputation among growers, retailers, and distributors through rigorous quality tracking and technical marketing services, fostering leading brands in the pesticide industry such as "Hailir" and "Audis"[68] - The company has obtained over 2,100 product registration certificates in dozens of countries including Paraguay, Egypt, Kenya, Thailand, and Pakistan, and supports registration in over 90 countries[68] - The company has completed the establishment of overseas branches such as Hailir Brazil, Hailir Argentina, and Hailir Philippines, actively expanding into overseas markets[68] Main Operating Conditions During the Reporting Period This section analyzes the company's main operating conditions during the reporting period, including reasons for changes in financial statement items and asset-liability status, indicating increased revenue and costs with sales growth, decreased administrative expenses, financial expenses influenced by exchange gains/losses, and adjustments in the asset-liability structure (I) Analysis of Main Business This subsection details the changes and reasons for operating revenue, operating costs, selling expenses, administrative expenses, financial expenses, R&D expenses, and net cash flows from operating, investing, and financing activities, using a financial statement item change analysis table Analysis Table of Changes in Financial Statement Items | Item | Current Period Amount (CNY) | Prior Year Same Period Amount (CNY) | Change Ratio (%) | Explanation for Change | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue | 2,608,855,595.59 | 2,406,213,273.01 | 8.42 | Product sales volume growth | | Operating Cost | 1,986,475,457.15 | 1,808,113,374.24 | 9.86 | Product sales volume growth | | Selling Expenses | 115,954,248.69 | 103,201,016.64 | 12.36 | Increase in sales personnel leading to higher compensation and travel expenses, increased promotion expenses | | Administrative Expenses | 90,858,734.41 | 121,891,008.06 | -25.46 | Decrease in maintenance expenses in H1, reduction in compensation and share-based payments | | Financial Expenses | 6,737,280.47 | -12,407,964.66 | 154.30 | Impact of exchange gains and losses | | R&D Expenses | 113,711,934.09 | 96,742,037.41 | 17.54 | Increase in R&D investment | | Net Cash Flow from Operating Activities | -114,516,355.20 | -93,880,596.76 | Not Applicable | Intense market competition, appropriate extension of payment terms; Q2 sales peak, shipments not yet due | | Net Cash Flow from Investing Activities | -282,203,143.55 | -154,825,971.32 | Not Applicable | Redemption of wealth management products for daily production and operations | | Net Cash Flow from Financing Activities | 485,970,766.85 | 283,499,536.09 | 71.42 | New financing to supplement working capital due to business needs | (III) Analysis of Assets and Liabilities This subsection analyzes the changes in the company's assets and liabilities at period-end, including increases and decreases and their reasons for key items such as monetary funds, financial assets held for trading, accounts receivable, contract liabilities, and provisions, also disclosing the scale of overseas assets Changes in Assets and Liabilities | Item Name | Current Period End Amount (CNY) | Change Ratio from Prior Year End (%) | Explanation | | :--- | :--- | :--- | :--- | | Monetary Funds | 936,901,724.85 | -30.47 | Decrease in time deposits | | Financial Assets Held for Trading | 486,511,055.19 | 93.21 | Increase in short-term wealth management products | | Accounts Receivable | 1,347,500,954.93 | 54.31 | Q2 sales peak, shipments not yet due | | Other Receivables | 15,751,440.62 | -61.53 | Decrease in export tax rebates receivable | | Right-of-Use Assets | 13,271,795.58 | 39.37 | Land lease | | Financial Liabilities Held for Trading | - | -100.00 | Unmatured forward foreign exchange contracts | | Contract Liabilities | 97,292,244.09 | -76.19 | Sales peak, decrease in prepayments | | Taxes Payable | 60,036,435.50 | 159.69 | Increase in accrued corporate income tax | | Provisions | 244,783,716.88 | 379.66 | Accrued sales returns and sales discounts by agricultural materials company | | Less: Treasury Stock | 419,687.50 | -85.65 | Unlocking of restricted shares | | Other Comprehensive Income | 44,084.77 | -111.97 | Foreign currency financial statement translation differences | - Overseas assets amounted to CNY 13,271,100.66, accounting for 0.18% of total assets[73] Other Disclosure Matters This section details seven major categories of risks the company may face in its production and operations, including safety production, environmental protection, product price fluctuations, raw material supply, market competition, capacity expansion, changes in laws and regulations, and exchange rate fluctuations, along with corresponding countermeasures to ensure the company's sustained and stable development (I) Potential Risks The company faces multiple risks including production safety and environmental protection, price fluctuations and production instability of pesticide active ingredients, upstream raw material supply and price fluctuations, market competition, future capacity expansion, changes in industry laws and regulations and regulatory policies, and exchange rate fluctuations; the company has formulated corresponding countermeasures to mitigate potential adverse effects - The company's pesticide production involves flammable, explosive, corrosive, or toxic substances, posing safety accident and environmental risks, which the company addresses by improving systems, strengthening management, and conducting emergency drills[77][78] - Pesticide active ingredient product prices are highly volatile due to market demand, upstream petrochemical prices, environmental pressure, and industry competition, which the company addresses through technological upgrades, cost control, and market expansion[79] - The upstream raw material market environment is unstable with significant price fluctuations, which the company addresses through centralized procurement, price comparison, quality monitoring, and supply chain optimization[80][81] - The pesticide industry faces intense market competition and severe product homogenization, which the company addresses through R&D of efficient and low-toxicity pesticides, brand promotion, channel development, and technological transformation[82] - Future capacity expansion may be affected by macroeconomic conditions, environmental policies, competition, prices, market capacity, and marketing channels, which the company addresses by staying informed on policies, market trends, and process improvements[83][84] - Changes in laws, regulations, and regulatory policies in the pesticide industry may directly impact production and operations, which the company addresses by closely monitoring policies and actively communicating and coordinating[85] - With increasing export business, exchange rate fluctuations and trade protectionism may affect the company's operations and product competitiveness, which the company addresses through foreign exchange hedging, reasonable trade terms, and exploring emerging markets[86] Corporate Governance, Environment, and Society Changes in Company Directors and Senior Management During the reporting period, there were changes in the company's Board of Directors and Supervisory Board members; Director Mao Zhijian resigned due to personal reasons, and Chen Ping was elected as an employee director; the company abolished the Supervisory Board, with its functions assumed by the Board's Audit Committee, leading to the resignation of former supervisors Liu Jinling, Liu Guijuan, and Chen Ping from their supervisory positions - Director Mao Zhijian resigned from his position as a director of the company's Fifth Board of Directors on August 13, 2025[88] - Mr. Chen Ping was elected as an employee representative director of the company's Fifth Board of Directors on August 13, 2025[88] - The company abolished the Supervisory Board, with its functions assumed by the Board's Audit Committee, leading to the resignation of Liu Jinling, Liu Guijuan, and Chen Ping from their supervisory positions[88] Profit Distribution or Capital Reserve Conversion Plan During the reporting period, the company's Board of Directors resolved that there was "no" profit distribution plan or capital reserve conversion to share capital plan, meaning no profit distribution or capital reserve conversion to share capital would occur - The company has no profit distribution plan or capital reserve conversion to share capital plan for this semi-annual period[89] Status and Impact of Company's Equity Incentive Plans, Employee Stock Ownership Plans, or Other Employee Incentive Measures In March 2025, the company completed the third phase unlocking of the reserved grant portion of the 2021 Restricted Stock Incentive Plan, involving 228,840 shares; concurrently, in April 2025, it approved the repurchase and cancellation of 20,000 restricted shares granted but not yet unlocked to six departed incentive recipients, with the cancellation completed on August 1, 2025 - In March 2025, the company completed the third phase unlocking of the reserved grant portion of the 2021 Restricted Stock Incentive Plan, with 228,840 shares unlocked, representing 40% of the granted shares[90] - In April 2025, the company approved the repurchase and cancellation of 20,000 restricted shares granted but not yet unlocked to six departed incentive recipients, with the cancellation completed on August 1, 2025[90][115] Environmental Information of Listed Companies and Their Main Subsidiaries Included in the List of Enterprises Required to Disclose Environmental Information by Law The company and its five main subsidiaries (Qingdao Hengning Biotechnology Co., Ltd., Qingdao Kaiyuanxiang Chemical Co., Ltd., Qingdao Audis Biotechnology Co., Ltd., Shandong Hailir Chemical Co., Ltd.) are all included in the list of enterprises required to disclose environmental information by law, with corresponding inquiry indexes for their environmental information disclosure reports provided - The company and its 5 main subsidiaries (Qingdao Hengning, Qingdao Kaiyuanxiang, Qingdao Audis, Shandong Hailir) are all included in the list of enterprises required to disclose environmental information by law[91] - Each enterprise has provided an inquiry index for its environmental information disclosure report[91] Specifics of Consolidating and Expanding Poverty Alleviation Achievements, Rural Revitalization, and Other Work With the mission of "Focusing on Crop Science to Serve World Agriculture," the company actively contributes to rural revitalization and the consolidation of poverty alleviation achievements through various means, including providing crop science services, promoting agricultural alliances and livelihood projects, and offering talent employment and charitable poverty relief - The company, with a technical service team of over 900 people, conducts tens of thousands of technical promotion services annually, serving over one million farming households and promoting agricultural development[92] - The company establishes Hailir cooperatives to integrate resources, drive rural economy, improve ecological civilization, and promote rural development[92] - The company adheres to a "talent-strengthening enterprise" strategy, creating local employment opportunities and helping farmers prosper through direct donations, material aid, and educational support[93][94] Significant Matters Fulfillment of Commitments The company, ultimate controller, controlling shareholder, directors, supervisors, senior management, and securities service institutions all committed that the prospectus contains no false records, misleading statements, or major omissions, and pledged to repurchase shares or compensate investors under specific circumstances; controlling shareholders and shareholders holding 5% or more of shares committed to comply with relevant regulations regarding share reductions; all commitments were strictly fulfilled - The company, ultimate controller, and controlling shareholder committed that the prospectus contains no false records, misleading statements, or major omissions, and pledged to repurchase shares or compensate investors under specific circumstances[96] - The company's directors, supervisors, and senior management committed that the prospectus contains no false records, misleading statements, or major omissions, and pledged to compensate investors under specific circumstances[97] - Securities service institutions (GF Securities, Zhongxinghua Certified Public Accountants, King & Wood Mallesons) committed to legally compensate investors for losses caused by false records, misleading statements, or major omissions in documents they issued[97][98] - Controlling shareholders and shareholders holding 5% or more of shares committed that any share reductions would comply with relevant regulations such as the "Several Provisions on Share Reductions by Major Shareholders, Directors, Supervisors, and Senior Management of Listed Companies"[98][99] - All commitments were strictly fulfilled during the reporting period[96][97][98] Non-operating Fund Occupation by Controlling Shareholders and Other Related Parties During the Reporting Period During the reporting period, the company had no non-operating fund occupation by controlling shareholders or other related parties - During the reporting period, the company had no non-operating fund occupation by controlling shareholders or other related parties[100] Illegal Guarantees During the reporting period, the company did not provide external guarantees in violation of prescribed decision-making procedures - During the reporting period, the company did not provide external guarantees in violation of prescribed decision-making procedures[100] Significant Litigation and Arbitration Matters During the reporting period, the company had no significant litigation or arbitration matters - The company had no significant litigation or arbitration matters during this reporting period[30] Significant Related Party Transactions This section discloses the company's ordinary course related party transactions during the reporting period, including raw material purchases from Shaanxi Jinxinyi Chemical Technology Co., Ltd., asset leases from Qingdao Anxing Real Estate Co., Ltd., and house leases between subsidiaries and Anxing Real Estate, detailing the approval status and transaction amounts - The company's raw material purchase transaction with Shaanxi Jinxinyi Chemical Technology Co., Ltd. amounted to CNY 30 million, approved by the Board of Directors on April 28, 2025[101] - The company's asset lease transaction with Qingdao Anxing Real Estate Co., Ltd. amounted to CNY 305,800, approved by the Board of Directors on April 28, 2025[101] - Hailir Plant Protection and Kaiyuanxiang Chemical signed house lease contracts with Anxing Real Estate, with annual rental amounts of CNY 120,285 and CNY 185,496.3, respectively[102] - During the reporting period, the product transaction amount between the company and its subsidiaries and related party Shaanxi Jinxinyi Chemical Technology Co., Ltd. was CNY 11.0093 million[102] Significant Contracts and Their Fulfillment This section discloses the company's significant lease matters and external guarantees during the reporting period; the company, as lessee, leased multiple land parcels and properties, and provided substantial guarantees for subsidiaries, with the total guarantee amount accounting for 22.63% of the company's net assets, and expects to continue providing comprehensive credit guarantees of up to CNY 4 billion in 2025 (I) Custody, Contracting, and Leasing Matters As a lessee, the company leased multiple land use rights and buildings with long lease terms and stable lease income; these lease matters are all non-related party transactions Leasing Information | Leased Asset Name | Lessor Name | Leased Asset Description | Lease Start Date | Lease End Date | Lease Income Amount (CNY) | Is it a Related Party Transaction | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Land in Zhongzhuangfu Village, Laixi City, Shuiji Street, etc. | Qingdao Hailir Agricultural Technology Professional Cooperative | 387.9 mu cultivated land, 580 mu Xiaokuang Village cultivated land | 2016/3/11 | 2029/3/10 | 803,040.00 | No | | A parcel of land northwest of Moshui River, Chengyang District, Qingdao City | A parcel of land northwest of Moshui River, Chengyang District, Qingdao City | 5.661 mu land under high-voltage lines, 8.844 mu land outside high-voltage lines | 2016/7/19 | 2066/7/18 | 721,620.00 | No | | No. 108 Qiuyang Road, Chengyang District, Qingdao City | Qingdao Pingan Fire Equipment Co., Ltd. | House lease | 2024/10/17 | 2027/10/16 | 3,450,000.00 | No | | Guojin Binjiang, No. 388 Fusheng Road, Xihu District, Nanchang City, Jiangxi | Qingdao Audis Biotechnology Co., Ltd. | House lease | 2023/7/1 | 2026/6/30 | 189,585.00 | No | | Room 12604, Building 46, Fengcheng 9th Road, Economic and Technological Development Zone, Xi'an City | Shaanxi Hengzhi Gas Engineering Co., Ltd. | House lease | 2024/2/29 | 2029/2/27 | 660,000.00 | No | (II) Significant Guarantees Performed and Not Yet Performed During the Reporting Period During the reporting period, the company primarily provided guarantees for subsidiaries, with the total guarantee balance for subsidiaries amounting to CNY 819.8244 million at the end of the period, accounting for 22.63% of the company's net assets; the company expects to apply for a comprehensive credit line of up to CNY 4 billion from financial institutions in 2025 and provide corresponding guarantees for its subsidiaries Company's Guarantees for Subsidiaries | Guaranteed Party | Guarantee Amount (CNY ten thousand) | Guarantee Start Date | Guarantee End Date | Is Guarantee Fulfilled | | :--- | :--- | :--- | :--- | :--- | | Qingdao Audis Biotechnology Co., Ltd. | 10,000.00 | 2022/4/1 | 2027/4/30 | No | | Qingdao Kaiyuanxiang Chemical Co., Ltd. | 12,000.00 | 2022/4/1 | 2027/5/20 | No | | Shandong Hailir Chemical Co., Ltd. | 27,000.00 | 2022/12/9 | 2025/12/8 | No | | Qingdao Audis Biotechnology Co., Ltd. | 15,000.00 | 2024/6/21 | 2025/6/20 | Yes | | Shandong Hailir Chemical Co., Ltd., Qingdao Kaiyuanxiang Chemical Co., Ltd., Qingdao Audis Biotechnology Co., Ltd., Qingdao Hengning Biotechnology Co., Ltd., Qingdao Hailir Agricultural Services Co., Ltd. | 120,000.00 | 2024/11/21 | 2026/5/15 | No | - During the reporting period, the total amount of guarantees provided to subsidiaries was CNY 433 million, and the total outstanding guarantee balance for subsidiaries at the end of the reporting period was CNY 819.8244 million[109] - The company's total guarantee amount (including guarantees for subsidiaries) was CNY 819.8244 million, accounting for 22.63% of the company's net assets[109] - The company and its subsidiaries expect to apply for a comprehensive credit line exposure of up to CNY 4 billion from financial institutions in 2025, and intend to provide guarantees for subsidiaries, with subsidiaries providing guarantees for the company, totaling no more than CNY 4 billion[109][110] Share Changes and Shareholder Information Share Capital Changes During the reporting period, the company's restricted shares decreased by 228,840 shares due to equity incentive unlocking, with a corresponding increase in unrestricted tradable shares, but the total number of shares remained unchanged; concurrently, the company repurchased and cancelled restricted shares of some departed incentive recipients Table of Share Capital Changes | Share Type | Number Before This Change | Percentage Before This Change (%) | Increase/Decrease in This Change (+, -) | Number After This Change | Percentage After This Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | I. Restricted Shares | 248,840 | 0.07 | -228,840 | 20,000 | 0.01 | | II. Unrestricted Tradable Shares | 339,649,496 | 99.93 | 228,840 | 339,878,336 | 99.99 | | III. Total Shares | 339,898,336 | 100.00 | 0 | 339,898,336 | 100.00 | - On February 24, 2025, the third phase of the reserved grant portion of the 2021 Restricted Stock Incentive Plan unlocked 228,840 shares[115] - On April 28, 2025, the company approved the repurchase and cancellation of 20,000 restricted shares granted but not yet unlocked to six departed incentive recipients, with the cancellation completed on August 1, 2025[115] (II) Changes in Restricted Shares During the reporting period, incentive recipients of the reserved grant portion of the 2021 Restricted Stock Incentive Plan unlocked 248,840 restricted shares, with 20,000 restricted shares remaining at period-end Changes in Restricted Shares | Shareholder Name | Restricted Shares at Beginning of Period | Restricted Shares Unlocked During Reporting Period | Restricted Shares Increased During Reporting Period | Restricted Shares at End of Reporting Period | Reason for Restriction | Unlocking Date | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | 2021 Restricted Stock Incentive Plan Reserved Grant Incentive Recipients | 248,840 | 248,840 | 0 | 20,000 | Equity incentive unlocking | 2025/3/20 | | Total | 248,840 | 248,840 | 0 | 20,000 | / | / | Shareholder Information As of the end of the reporting period, the company had 15,191 common shareholders; among the top ten shareholders, Zhang Aiying, Ge Yaolun, Qingdao Heyi Investment Center, and Ge Jiacheng collectively held a high proportion of shares, with Zhang Aiying, Ge Yaolun, and Ge Jiacheng acting in concert - As of the end of the reporting period, the company had a total of 15,191 common shareholders[118] Top Ten Shareholders' Shareholding as of the End of the Reporting Period | Shareholder Name | Number of Shares Held at Period End | Percentage (%) | Share Status | Pledged, Marked, or Frozen Quantity | | :--- | :--- | :--- | :--- | :--- | | Zhang Aiying | 127,253,000 | 37.44 | Pledged | 1,460,000 | | Ge Yaolun | 62,010,588 | 18.24 | Unrestricted | 0 | | Qingdao Heyi Investment Center (Limited Partnership) | 17,652,151 | 5.19 | Unrestricted | 0 | | Ge Jiacheng | 12,725,300 | 3.74 | Unrestricted | 0 | | Hong Kong Securities Clearing Company Limited | 4,080,853 | 1.20 | Unrestricted | 0 | | Qingdao Liangxin Investment Center (Limited Partnership) | 3,901,002 | 1.15 | Unrestricted | 0 | | Qingdao Haorun Commercial Operation Management Co., Ltd. | 3,300,098 | 0.97 | Unrestricted | 0 | | Liu Xiufen | 2,048,326 | 0.60 | Unrestricted | 0 | | Xu Limin | 1,399,501 | 0.41 | Unrestricted | 0 | | Hong Boyi | 1,324,400 | 0.39 | Unrestricted | 0 | - Zhang Aiying, Ge Yaolun, and Ge Jiacheng are persons acting in concert; Ge Yaolun has an associated relationship with Qingdao Heyi Investment Center (Limited Partnership); Qingdao Heyi Investment Center (Limited Partnership) and Qingdao Liangxin Investment Center (Limited Partnership) are shareholding platforms for the company's senior management and core personnel[122] Bond-Related Information Corporate Bonds (Including Enterprise Bonds) and Non-Financial Enterprise Debt Financing Instruments During the reporting period, the company had no corporate bonds (including enterprise bonds) or non-financial enterprise debt financing instruments - The company had no corporate bonds (including enterprise bonds) or non-financial enterprise debt financing instruments during this reporting period[125] Convertible Corporate Bonds During the reporting period, the company had no convertible corporate bonds - The company had no convertible corporate bonds during this reporting period[125] Financial Report Audit Report This semi-annual report is unaudited - This semi-annual report is unaudited[4] Financial Statements This section provides the company's consolidated and parent company balance sheets, income statements, cash flow statements, and statements of changes in owners' equity for the first half of 2025, comprehensively presenting the company's financial position, operating results, and cash flow situation - Consolidated and parent company balance sheets are provided, reflecting the company's assets, liabilities, and owners' equity at period-end[127][131] - Consolidated and parent company income statements are provided, showcasing the company's operating results such as operating revenue, total profit, and net profit for the current and prior year periods[135][139] - Consolidated and parent company cash flow statements are provided, listing the net cash flows from the company's operating, investing, and financing activities[142][145] - Consolidated and parent company statements of changes in owners' equity are provided, reflecting the changes in each item of the company's owners' equity[148][160] Company Basic Information This section introduces the company's registered address, organizational form, headquarters address, business nature, and main operating activities; the company was established in July 2011, listed on the Shanghai Stock Exchange on January 12, 2017, primarily engaged in the chemical raw materials and chemical products manufacturing industry, with main products including pesticide insecticides, fungicides, and fertilizers - The company was established in July 2011 and listed on the Shanghai Stock Exchange on January 12, 2017, with stock code 603639[164] - As of June 30, 2025, the company's total accumulated issued share capital was 339,898,336.00 shares[164] - The company belongs to the chemical raw materials and chemical products manufacturing industry, with main products including pesticide insecticides, fungicides, and fertilizers[164] - The company's business scope includes the production and sales of water-soluble fertilizers and pesticides, chemical raw material production, import and export of goods and technology, and technical consulting services for agricultural and forestry pest control[165] Basis of Financial Statement Preparation This section explains that the company's financial statements are prepared on a going concern basis, adhering to enterprise accounting standards and relevant regulations of the China Securities Regulatory Commission, using the accrual basis and historical cost measurement, and confirming the company's ability to continue as a going concern for at least 12 months from the end of the reporting period - The company's financial statements are prepared on a going concern basis, adhering to the "Enterprise Accounting Standards" issued by the Ministry of Finance and the "Information Disclosure Rules for Companies Issuing Securities Publicly No. 15 – General Provisions on Financial Reports" issued by the China Securities Regulatory Commission[166] - Accounting is based on the accrual basis, and except for certain financial instruments, all are measured at historical cost[166] - The company has the ability to continue as a going concern for at least 12 months from the end of the reporting period[167] Significant Accounting Policies and Accounting Estimates This section elaborates on the company's specific accounting policies and estimates for business combinations, consolidated financial statement preparation, financial instruments, inventories, fixed assets, intangible assets, revenue recognition, and government grants, providing essential background information for understanding the financial statements - The company adheres to enterprise accounting standards to truthfully and completely reflect its financial position, operating results, and cash flows[168] - Detailed explanations are provided for the accounting treatment of business combinations under common control and not under common control, as well as the preparation methods for consolidated financial statements and criteria for determining control[172][173][176] - Financial assets are classified into three categories based on business model and contractual cash flow characteristics: measured at amortized cost, measured at fair value with changes recognized in other comprehensive income, and measured at fair value with changes recognized in profit or loss, with detailed explanations of their recognition, measurement, and impairment methods[188][189][195] - Revenue recognition follows the principle of recognition when the customer obtains control of the related goods, with specific explanations of recognition timing and methods based on business types (domestic and foreign trade sales of pesticide active ingredients and intermediates, domestic and foreign trade sales of pesticide formulations)[246][247][248][249] - Government grants are classified as asset-related or income-related, recognized as deferred income or directly in current profit or loss, respectively[253] Taxation This section discloses the company's and its subsidiaries' main tax categories and applicable tax rates, including VAT, urban maintenance and construction tax, education surcharge, and corporate income tax; it also details the 15% preferential corporate income tax rate enjoyed by the company and some subsidiaries as high-tech enterprises, and the VAT exemption policy for pesticide product sales Main Tax Categories and Rates | Tax Category | Tax Basis | Tax Rate | | :--- | :--- | :--- | | Value-Added Tax | Paid based on the difference between output tax and input tax | 6%, 9%, 10%, 12%, 16%, 18%, 21% | | Urban Maintenance and Construction Tax | Based on the amount of Value-Added Tax paid | 7% | | Education Surcharge | Based on the amount of Value-Added Tax paid | 3% | | Corporate Income Tax | Based on the annual profit amount | 15%, 16.5%, 25%, 30%, 35% | - Hailir Pesticides and Chemicals Group Co., Ltd., Qingdao Audis Biotechnology Co., Ltd., Shandong Hailir Chemical Co., Ltd., Qingdao Kaiyuanxiang Chemical Co., Ltd., Qingdao Hengning Biotechnology Co., Ltd., and others are recognized as high-tech enterprises, enjoying a 15% preferential corporate income tax rate[266][267] - Subsidiaries such as Qingdao Hailir Agricultural Materials Co., Ltd. are exempt from Value-Added Tax on the sale of pesticide products[264] Notes to Consolidated Financial Statement Items This section provides detailed notes and explanations for each asset, liability, owners' equity, and profit/loss item in the consolidated financial statements, including their period-end balances, beginning balances, changes, and reasons, offering specific composition and accounting treatment details for each financial statement account - Monetary funds at period-end amounted to CNY 936,901,724.85, of which CNY 668,266,477.85 were restricted funds, primarily pledged time deposits, forward foreign exchange settlement and sale margins, and litigation frozen margins[270] - Financial assets held for trading at period-end amounted to CNY 486,511,055.19, an increase of 93.21% from the beginning of the period, mainly due to an increase in short-term wealth management products[72][271] - Accounts receivable at period-end amounted to CNY 1,347,500,954.93, an increase of 54.31% from the beginning of the period, mainly due to shipments during the Q2 sales peak not yet reaching their payment due dates[72][279] - Inventory book value at period-end was CNY 975,015,693.00, an increase of 4.46% from the beginning of the period, with inventory impairment provisions of CNY 26,141,406.84 recognized in the current period[302][304] - Fixed assets book value at period-end was CNY 2,084,810,462.12, with an increase of CNY 121,113,312.42 in the current period, mainly due to transfers from construction in progress[318] - Construction in progress book value at period-end was CNY 365,682,207.32, primarily including Hengning Phase I and Phase II projects and the green and efficient insecticide active ingredient and intermediate project[326] - Short-term borrowings at period-end amounted to CNY 1,198,350,337.06, mainly consisting of bill discount borrowings and letter of credit discount borrowings[362] - Contract liabilities at period-end amounted to CNY 97,292,244.09, a decrease of 76.19% from the beginning of the period, mainly due to reduced prepayments during the sales peak season[72][370] - Provisions at period-end amounted to CNY 244,783,716.88, an increase of 379.66% from the beginning of the period, mainly due to sales returns and sales discounts accrued by the agricultural materials company[72][385] - Operating revenue for the current period was CNY 2,608,855,595.59, and operating cost was CNY 1,986,475,457.15, both showing an increase from the prior period[403] - Financial expenses for the current period amounted to CNY 6,737,280.47, turning from negative to positive compared to the prior period, primarily influenced by exchange gains and losses[71][411] - Credit impairment losses for the current period amounted to CNY -32,809,321.37, and asset impairment losses for the current period amounted to CNY -26,141,406.84[415][416] R&D Expenses This section discloses the company's R&D expenses for the first half of 2025, totaling CNY 113,711,934.09, all of which were expensed R&D expenditures, representing a 17.54% increase from the prior year; major investments were in materials and fuel power, salaries and wages, and other expenses R&D Expenses by Nature of Expense | Item | Current Period Amount (CNY) | Prior Period Amount (CNY) | | :--- | :--- | :--- | | Materials and Fuel Power | 68,025,230.44 | 64,085,507.50 | | Salaries and Wages | 27,073,500.67 | 26,175,532.95 | | Other Expenses | 18,613,202.98 | 6,480,996.96 | | Total | 113,711,934.09 | 96,742,037.41 | | Of which: Expensed R&D Expenditures | 113,711,934.09 | 96,742,037.41 | | Capitalized R&D Expenditures | 0 | 0 | - All R&D expenditures for the current period were expensed, with no capitalized R&D expenditures[442] - R&D expenses for the current period increased by 17.54% compared to the prior period, primarily invested in materials and fuel power, salaries and wages, and other expenses[71][442] Changes in Consolidation Scope During the reporting period, the company's consolidation scope did not significantly change due to business combinations not under common control, business combinations under common control, reverse acquisitions, or disposal of subsidiaries; however, the company newly established a wholly-owned subsidiary, Weifang Hailir Agricultural Services Co., Ltd., leading to a change in the consolidation scope - There were no changes in the consolidation scope due to business combinations not under common control, business combinations under common control, reverse acquisitions, or disposal of subsidiaries during this reporting period[143][144] - The establishment of the wholly-owned subsidiary Weifang Hailir Agricultural Services Co., Ltd. in the current period led to a change in the consolidation scope[147] Interests in Other Entities This section details the company's interests in 28 subsidiaries, including each subsidiary's registered capital, registered address, principal place of business, business nature, and the company's direct or indirect shareholding percentage, showcasing the company's extensive business network and equity structure - The company owns 28 subsidiaries, with businesses covering the production and sales of pesticide formulations and active ingredients, wholesale and retail of agricultural materials, and testing services[145][146][147] - Most subsidiaries are wholly-owned, with some controlled through indirect shareholding, such as Qingdao Audis Agricultural Materials Co., Ltd. and Qingdao Hailir Plant Protection Technology Co., Ltd[145][146][147] - Subsidiaries are widely distributed geographically, including Qingdao, Weifang, Shanghai, Jiangxi, Myanmar, Philippines, Cambodia, Brazil, Argentina, and Mexico, reflecting the company's domestic and international market layout[145][146][147] Government Grants This section discloses the company's government grant-related liability items at period-end and government grants recognized in current profit or loss; the total government grants in deferred income at period-end amounted to CNY 43,308,433.61, with CNY 9,000,000.00 added in the current period and CNY 1,292,552.26 transferred to other income; total government grants recognized in current profit or loss amounted to CNY 3,162,201.20 Liability Items Involving Government Grants | Item | Balance at Beginning of Period (CNY) | New Grant Amount in Current Period (CNY) | Transferred to Other Income in Current Period (CNY) | Balance at End of Period (CNY) | Reason for Formation | | :--- | :--- | :--- | :--- | :--- | :--- | | 1. Ecological Agricultural Science and Technology Demonstration Park Leisure Agriculture Project | 300,000.00 | 0 | 50,000.00 | 250,000.00 | Asset-related | | 2. Hengning Biotechnology Special Support Funds | 23,031,609.17 | 0 | 253,559.00 | 22,778,050.17 | Asset-related | | 3. National Service Industry Development Support Funds | 7,043,158.33 | 0 | 591,558.34 | 6,451,599.99 | Asset-related | | 6. Industrial Foundation Rebuilding and High-Quality Manufacturing Development Special Rewards and Subsidies | 2,972,444.72 | 4,500,000.00 | 55,110.56 | 7,417,334.16 | Asset-related | | 7. Provincial New and Old Kinetic Energy Conversion Rewards and Subsidies | 0 | 4,500,000.00 | 185,709.94 | 4,314,290.06 | Asset-related | | Total | 35,600,985.87 | 9,000,000.00 | 1,292,552.26 | 43,308,433.61 | / | Government Grants Recognized in Current Profit or Loss | Type | Current Period Amount (CNY) | Prior Period Amount (CNY) | | :--- | :--- | :--- | | Asset-related | 1,292,552.26 | 1,022,239.59 | | Income-related | 1,869,648.94 | 3,848,401.24 | | Total | 3,162,201.20 | 4,870,640.83 | Risks Related to Financial Instruments The company's main financial instruments include monetary funds, accounts receivable, and accounts payable, facing credit risk, market risk (foreign exchange risk, interest rate risk, other price risks), and liquidity risk; the company's management effectively manages and controls these risks through measures such as assessing customer credit, managing foreign exchange exposure, optimizing financing structure, and monitoring cash flow - The company's main financial instruments include monetary funds, accounts receivable, notes receivable, other receivables, other current assets, accounts payable, notes payable, employee benefits payable, other payables, and short-term borrowings[452] - The company faces credit risk (primarily from credit sales), market risk (foreign exchange rate fluctuations, market interest rate changes, securities market changes), and liquidity risk