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宏昌科技(301008) - 2025 Q2 - 季度财报

Section I Important Notice, Table of Contents, and Definitions Important Notice The company's board and senior management guarantee the semi-annual report's truthfulness and completeness, with financial officers ensuring financial report authenticity. - The company's board of directors and senior management guarantee the truthfulness, accuracy, and completeness of the semi-annual report, free from false records, misleading statements, or major omissions, and assume individual and joint legal liabilities5 - Company head Lu Baohong, chief accountant Tao Jue, and head of accounting department Shao Yueqin declare: they guarantee the truthfulness, accuracy, and completeness of the financial report in this semi-annual report5 - All directors attended the board meeting that reviewed this semi-annual report6 Risk Factors The company faces risks from market competition, demand volatility, high customer concentration, uncertain growth, and raw material price fluctuations. - Market competition risk: If the company fails to continuously innovate and provide products that meet demand, it may face risks of reduced sales orders and weakened competitiveness, especially in the fiercely competitive field of fluid solenoid valves for emerging kitchen and bathroom appliances7 - Market demand fluctuation risk: The specialized home appliance accessories market is closely linked to the downstream home appliance industry; if home appliance demand growth slows or product upgrades fall short of expectations, the company may face risks of limited market space and declining demand8 - Customer concentration risk: The company has a high customer concentration and a certain reliance on major clients; changes in key clients' operating strategies or damage to cooperative relationships will adversely affect the company's performance910 - Raw material price fluctuation risk: Direct material costs account for a high proportion of main business costs, and fluctuations in major raw material prices will directly impact the company's profitability13 Profit Distribution Plan The company plans no cash dividends, bonus shares, or capital reserve conversions to share capital for the 2025 semi-annual period. - The company plans not to distribute cash dividends, issue bonus shares, or convert capital reserves into share capital14 Table of Contents and Definitions This section outlines the report's detailed structure, covering eight main chapters, and defines key terms. - The report's table of contents includes eight main chapters, from important notices and company profile to financial reports17 - The definitions section clarifies key terms such as the company, controlling shareholder, major clients (e.g., Haier Group, Midea Group, Panasonic Group), and the reporting period20 Section II Company Profile and Key Financial Indicators Company Profile Zhejiang Hongchang Electric Technology Co., Ltd. (Hongchang Technology), stock code 301008, is listed on the Shenzhen Stock Exchange, with Lu Baohong as its legal representative. Company Basic Information | Indicator | Content | | :--- | :--- | | Stock Abbreviation | Hongchang Technology | | Stock Code | 301008 | | Stock Exchange for Listing | Shenzhen Stock Exchange | | Company Chinese Name | Zhejiang Hongchang Electric Technology Co., Ltd. | | Company Legal Representative | Lu Baohong | Contact Persons and Information The company's Board Secretary is She Yan, and the Securities Affairs Representative is Jiang Yuqi, both located at No. 788 Xinhong Road, Wucheng District, Jinhua City, Zhejiang Province, with contact phone, fax, and email provided. Company Contact Information | Position | Name | Contact Address | Phone | Fax | Email | | :--- | :--- | :--- | :--- | :--- | :--- | | Board Secretary | She Yan | No. 788 Xinhong Road, Wucheng District, Jinhua City, Zhejiang Province | 0579-84896101 | 0579-82271092 | hckj@hongchang.com.cn | | Securities Affairs Representative | Jiang Yuqi | No. 788 Xinhong Road, Wucheng District, Jinhua City, Zhejiang Province | 0579-84896101 | 0579-82271092 | hckj@hongchang.com.cn | Other Information During the reporting period, there were no changes in the company's registered address, office address, website, email, information disclosure and filing locations, or registration status; specific details can be found in the 2024 annual report. - The company's registered address, office address, website, and email remained unchanged during the reporting period; specific details can be found in the 2024 annual report24 - Information disclosure and filing locations remained unchanged during the reporting period; specific details can be found in the 2024 annual report25 - The company's registration status remained unchanged during the reporting period; specific details can be found in the 2024 annual report26 Key Accounting Data and Financial Indicators In H1 2025, operating revenue grew 20.80% to CNY 542.47 million, but net profit attributable to shareholders fell 47.78% to CNY 15.96 million, while operating cash flow improved 226.91%. Key Accounting Data and Financial Indicators (H1 2025 vs. Prior Year Period) | Indicator | Current Reporting Period (CNY) | Prior Year Period (Adjusted, CNY) | YoY Change | | :--- | :--- | :--- | :--- | | Operating Revenue | 542,473,102.14 | 449,057,315.08 | 20.80% | | Net Profit Attributable to Shareholders | 15,962,711.79 | 30,566,367.04 | -47.78% | | Net Profit Attributable to Shareholders Excluding Non-recurring Items | 9,469,852.11 | 23,816,111.90 | -60.24% | | Net Cash Flow from Operating Activities | 26,699,597.83 | -21,037,529.63 | 226.91% | | Basic Earnings Per Share (CNY/share) | 0.1437 | 0.2754 | -47.82% | | Diluted Earnings Per Share (CNY/share) | 0.1412 | 0.2754 | -48.73% | | Weighted Average Return on Net Assets | 1.39% | 2.69% | -1.30% | | Total Assets (Period-end) | 2,106,096,152.58 | 2,051,650,370.66 | 2.65% | | Net Assets Attributable to Shareholders (Period-end) | 1,480,129,294.22 | 1,124,313,791.54 | 31.65% | - Reason for accounting policy change: According to the Ministry of Finance's 'Interpretation No. 18 of Accounting Standards for Business Enterprises,' estimated liabilities arising from guarantee-type quality assurance that do not constitute a single performance obligation should be recognized in 'Cost of Sales' and 'Other Operating Costs,' leading to a retrospective adjustment of the H1 2024 period information, decreasing selling expenses by CNY 2,349,784.32 and increasing operating costs by CNY 2,349,784.322728 Differences in Accounting Data Under Domestic and Overseas Accounting Standards During the reporting period, the company had no differences in net profit and net assets between financial reports disclosed under International Accounting Standards or overseas accounting standards and Chinese Accounting Standards. - During the reporting period, the company had no differences in net profit and net assets between financial reports disclosed under International Accounting Standards and Chinese Accounting Standards29 - During the reporting period, the company had no differences in net profit and net assets between financial reports disclosed under overseas accounting standards and Chinese Accounting Standards31 Non-recurring Gains and Losses Items and Amounts During the reporting period, the company's total non-recurring gains and losses amounted to CNY 6,492,859.68, primarily from fair value changes in financial assets, government grants, and disposal of non-current assets. Non-recurring Gains and Losses Items and Amounts | Item | Amount (CNY) | | :--- | :--- | | Gains/Losses on Disposal of Non-current Assets | 59,094.21 | | Government Grants Recognized in Current Profit/Loss (Excluding Those with Continuous Impact) | 2,584,340.08 | | Gains/Losses from Fair Value Changes and Disposal of Financial Assets and Liabilities Held by Non-financial Enterprises | 4,814,428.73 | | Other Non-operating Income and Expenses Apart from the Above | 25,434.36 | | Less: Income Tax Impact | 990,446.75 | | Minority Interests Impact (After Tax) | -9.05 | | Total | 6,492,859.68 | Section III Management Discussion and Analysis Main Businesses Engaged by the Company During the Reporting Period The company's main businesses include home appliance components, automotive components, molds, and equipment automation, actively expanding into robotics-related ventures. - Home appliance components business: R&D, production, and sales of fluid solenoid valves, sensors, and other electrical accessories, with major clients including Haier, Midea, Hisense, Panasonic, Siemens, and Xiaomi35 - Automotive components business: R&D, production, and sales of automotive interior assembly products, with major clients including Leapmotor and Geely36 - Molds and equipment automation business: Jinhua Hongchi is responsible for the R&D, production, and sales of precision injection molds and non-standard automation equipment, and has adjusted its business strategy to introduce a professional automation team, with mold business undertaken by Jinhua Hongyun37 - Robotics-related business: The company invested CNY 30 million to hold a 30% equity stake in Liangzhi Joint, and jointly established Hangzhou Hongzhi Motor Technology Co., Ltd. with Liangzhi Joint, where the company holds a 70% equity stake, engaging in the R&D, production, and sales of frameless torque motors38 - Liangzhi Joint focuses on the humanoid robot industry chain, primarily engaging in harmonic reducers, planetary reducers, and joint modules, having partnered with robot clients such as Jidian Dynamics and Unitree, and plans to build a smart manufacturing factory in Pinghu, Jiaxing, with an annual output of 200,000 sets of joint modules and reducers39 Main Business Model The company adopts a direct sales-oriented profit model, organizing procurement and production based on customer demand, with R&D combining independent and collaborative efforts. - Profit model: As a specialized manufacturer of magnetic control products, the company primarily signs contracts with clients through direct sales, organizing procurement and manufacturing based on customer demand forecasts or orders, with main revenue derived from fluid solenoid valves, modular components, and water level sensors40 - Procurement model: Major raw materials include enameled wire, plastic raw materials, metal parts, etc.; framework agreements are signed with key suppliers, and procurement prices are affected by market fluctuations; the company strictly controls quality and costs through inquiries and supplier evaluations41 - Production model: Production is organized by order with moderate inventory, developing master production plans and material requirements plans based on customer demand, generating weekly production execution plans, and strictly controlling production and quality according to process flows and work instructions42 - Sales model: Products are sold to domestic and international clients through the sales department via direct sales, with major clients being renowned home appliance companies such as Haier, Midea, Hisense, Panasonic, and TCL; business acquisition methods include bidding and negotiation models43 - R&D model: Adopting a combination of independent and collaborative R&D, establishing multiple product development departments responsible for new product and technology R&D, and collaborating with domestic universities to overcome R&D challenges and enhance innovation capabilities47 Market Position The company holds a leading position in the washing machine inlet valve sector, with a market share of approximately 65%, and has established long-term stable cooperative relationships with renowned home appliance companies. - The company has achieved a certain competitive advantage in the washing machine inlet valve sector, with its market share gradually increasing to approximately 65%, indicating a leading position in this field48 - The company has established stable cooperative relationships with renowned downstream home appliance companies such as Haier, Midea, Hisense, Panasonic, TCL, Siemens, and Leapmotor48 Key Performance Drivers The company's performance growth is primarily driven by product line expansion, increased high-end product sales, overseas market development, and growth in automotive and automation businesses. - Washing machine components have expanded horizontally from solenoid valves to modular components, sensors, and door switches, positively impacting the company's business revenue49 - The proportion of high-end product sales has increased, especially the rising sales volume of three-control and above valve products, becoming one of the company's profit growth drivers50 - Actively expanding overseas markets, supplying components in bulk to Siemens and developing the European market, helps increase overseas sales proportion and reduce reliance on major clients5152 - Leveraging technological accumulation in the washing machine sector, supplying components for smart home appliances such as smart toilets, dishwashers, dryers, and water purifiers, enhancing sales proportion and profitability53 - The automotive components business maintains steady growth, expected to break through the existing business landscape and open up new growth opportunities54 - Equipment automation and mold business (Jinhua Hongchi), as a national high-tech enterprise, actively undertakes external orders, and steady growth will further enhance the company's overall profitability55 Overview of Main Operating Performance In H1 2025, operating revenue grew 20.80% to CNY 542.47 million, with automotive business revenue surging 531.03%, but net profit attributable to shareholders decreased 47.78% to CNY 15.96 million. H1 2025 Key Operating Data | Indicator | Amount (CNY) | YoY Growth | | :--- | :--- | :--- | | Operating Revenue | 542,473,102.14 | 20.80% | | Main Business Sales Revenue | 537,936,569.77 | 20.36% | | Automotive Business Revenue | 16,582,679.86 | 531.03% | | Net Profit Attributable to Shareholders | 15,962,711.79 | -47.78% | Core Competitiveness Analysis The company's core competitiveness stems from its strong technological advantages, efficient design cycles, strict quality control, stable customer base, and leading modular supply capabilities. - Technological advantages: The company is a high-tech enterprise and a national intellectual property advantage enterprise, holding 198 patents (21 invention patents), leading and participating in the drafting of multiple industry and group standards, and has passed various quality management system certifications57 - Design and development cycle advantage: Established a comprehensive design and development control procedure, with effective collaboration among departments, and the laboratory has obtained UL Witness Laboratory certification, shortening the design and development cycle for new fluid solenoid valve products to 4-6 months60 - Quality control advantage: Strict quality management from raw material procurement, production process to finished products, complying with ISO9001:2015 standards, with products certified by CQC, ENEC, TÜV, UL, etc., ensuring stable product quality61 - Customer resource advantage: Established long-term stable cooperative relationships with major downstream home appliance enterprises such as Haier, Midea, Hisense, Panasonic, and TCL, and expanded clients in smart toilets, automotive components, and other fields62 - Modular supply advantage: Possesses strong modular supply capabilities, including modular component development and large-scale supply, meeting customer demands for new products, new functions, and bulk purchases, enhancing customer stickiness63 Main Business Analysis Operating revenue increased 20.80%, but operating costs rose 26.99%, leading to a decline in total profit, while management and financial expenses increased significantly. Year-on-Year Changes in Key Financial Data | Indicator | Current Reporting Period (CNY) | Prior Year Period (CNY) | YoY Change | Reason for Change | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue | 542,473,102.14 | 449,057,315.08 | 20.80% | | | Operating Cost | 467,395,625.76 | 368,069,373.91 | 26.99% | | | Selling Expenses | 7,744,287.94 | 6,811,984.67 | 13.69% | | | Administrative Expenses | 33,050,829.32 | 24,662,958.19 | 34.01% | Primarily due to increased share-based payment expenses recognized in the current period | | Financial Expenses | 5,194,829.13 | 2,621,161.19 | 98.19% | Primarily due to decreased interest income in the current period | | Income Tax Expense | 1,203,725.82 | 3,294,718.58 | -63.46% | Primarily due to decreased income tax payable in the current period | | R&D Investment | 23,781,012.42 | 21,779,908.46 | 9.19% | | | Net Cash Flow from Operating Activities | 26,699,597.83 | -21,037,529.63 | 226.91% | Primarily due to increased cash received from sales of goods in the current period | | Net Cash Flow from Investing Activities | -103,801,025.49 | -233,889,558.47 | 55.62% | Primarily due to increased cash received from investment recovery and disposal of subsidiaries in the current period | | Net Cash Flow from Financing Activities | 9,736,684.52 | -29,089,105.05 | 133.47% | Primarily due to decreased cash paid for dividends and interest in the current period | | Net Increase in Cash and Cash Equivalents | -67,364,743.14 | -284,016,193.15 | 76.28% | Primarily due to increased cash and cash equivalents from operating, investing, and financing activities | Products or Services Accounting for Over 10% (CNY 10,000) | By Product or Service | Operating Revenue | Operating Cost | Gross Margin | YoY Change in Operating Revenue | YoY Change in Operating Cost | YoY Change in Gross Margin | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Smart Home Appliance Components | 52,135.39 | 44,530.19 | 14.59% | 17.34% | 23.23% | -4.08% | | Other | 2,111.92 | 2,209.37 | -4.61% | 343.62% | 407.92% | -13.24% | | By Region | | | | | | | | Domestic Sales | 49,139.06 | 42,592.70 | 13.32% | 19.96% | 26.86% | -4.72% | | Overseas Sales | 5,108.25 | 4,146.86 | 18.82% | 29.59% | 38.35% | -5.14% | Non-Core Business Analysis Non-core businesses significantly contributed to total profit, primarily from wealth management and cash management, though these gains are not sustainable. Impact of Non-Core Businesses on Total Profit | Item | Amount (CNY) | Proportion of Total Profit | Reason for Formation | Sustainability | | :--- | :--- | :--- | :--- | :--- | | Investment Income | 2,115,466.48 | 12.44% | Primarily from wealth management income and acceptance discount expenses | No | | Gains/Losses from Fair Value Changes | 1,894,797.44 | 11.15% | Primarily from cash management related income | No | | Asset Impairment | -229,582.30 | -1.35% | Primarily from inventory impairment provisions | No | | Non-operating Income | 30,573.73 | 0.18% | Primarily from scrap income of self-owned vehicles | No | | Non-operating Expenses | 60,598.69 | 0.36% | Primarily from equipment scrap expenses | No | Analysis of Assets and Liabilities Total assets and net assets attributable to shareholders increased, while the liability structure changed significantly due to convertible bond redemption, leading to a lower asset-liability ratio. Significant Changes in Asset Composition (CNY) | Item | Amount at Period-end | Proportion of Total Assets | Amount at Prior Year-end | Proportion of Total Assets | Change in Proportion | | :--- | :--- | :--- | :--- | :--- | :--- | | Cash and Cash Equivalents | 526,766,616.56 | 25.01% | 537,927,324.69 | 26.22% | -1.21% | | Accounts Receivable | 356,604,653.42 | 16.93% | 384,181,228.74 | 18.73% | -1.80% | | Inventories | 174,025,385.24 | 8.26% | 152,227,650.87 | 7.42% | 0.84% | | Long-term Equity Investments | 22,940,460.42 | 1.09% | 0.00 | 0.00% | 1.09% | | Short-term Borrowings | 54,840,597.23 | 2.60% | 30,031,277.78 | 1.46% | 1.14% | | Bonds Payable | 0.00 | 0.00% | 333,482,300.03 | 16.25% | -16.25% | - Total non-current liabilities significantly decreased from CNY 355 million at the beginning of the period to CNY 18.63 million at the end of the period, primarily due to the redemption of convertible corporate bonds during the reporting period236 Assets and Liabilities Measured at Fair Value (CNY) | Item | Beginning Balance | Ending Balance | | :--- | :--- | :--- | | Financial Assets Held for Trading | 239,579,704.04 | 288,095,703.94 | | Financing Receivables | 53,938,769.94 | 75,547,901.89 | | Total Above | 293,518,473.98 | 363,643,605.83 | Asset Restriction Status (CNY) | Item | Carrying Amount at Period-end | Type of Restriction | Reason for Restriction | | :--- | :--- | :--- | :--- | | Cash and Cash Equivalents | 46,849,678.28 | Margin | Bank acceptance bill margin | | Cash and Cash Equivalents | 62,450,030.00 | Pledged time deposit | Pledged to bank for issuing bank acceptance bills | | Notes Receivable | 77,873,923.93 | Pledge | Pledged to bank for issuing bank acceptance bills | | Financing Receivables | 16,543,890.35 | Endorsed but not due | Endorsed but not yet due Meiyidan | | Fixed Assets | 43,918,395.18 | Mortgage | Bank loan mortgage | | Intangible Assets | 16,877,272.35 | Mortgage | Bank loan mortgage | | Total | 264,513,190.09 | | | Investment Status Analysis Total investment increased 60.08% year-on-year, with equity investments in Liangzhi Joint and Hongzhi Motor, and progress in the electronic water pump industrialization project. Overall Investment Situation | Indicator | Amount (CNY) | | :--- | :--- | | Investment Amount in Reporting Period | 33,000,000.00 | | Investment Amount in Prior Year Period | 20,614,646.00 | | Change Percentage | 60.08% | Significant Equity Investments During the Reporting Period (CNY) | Investee Company Name | Main Business | Investment Method | Investment Amount | Shareholding Ratio | Source of Funds | Progress as of Balance Sheet Date | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Liangzhi Joint | R&D of electromechanical coupling systems, etc. | Capital increase | 30,000,000.00 | 30.00% | Own funds | Completed industrial and commercial change | | Hongzhi Motor | R&D of frameless torque motors, etc. | Capital increase | 7,000,000.00 | 70.00% | Own funds | Completed establishment registration | | Hongchang Zhiyuan | Manufacturing of automotive components and accessories, etc. | New establishment | 10,000,000.00 | 100.00% | Raised funds | Completed consolidation | Significant Non-Equity Investments in Progress During the Reporting Period (CNY) | Project Name | Investment Method | Amount Invested in Current Period | Cumulative Actual Investment as of Period-end | Source of Funds | Project Progress | | :--- | :--- | :--- | :--- | :--- | :--- | | Electronic Water Pump and Injection Molded Parts Industrialization Project | Self-built | 45,058,383.26 | 145,725,077.78 | Own and raised funds | 53.97% | Overall Utilization of Raised Funds (CNY 10,000) | Fundraising Year | Fundraising Method | Net Raised Funds | Total Raised Funds Used in Current Period | Total Raised Funds Used Cumulatively | Utilization Rate of Raised Funds at Period-end | | :--- | :--- | :--- | :--- | :--- | :--- | | 2021 | Initial Public Offering | 54,587.43 | 8,139.30 | 53,500.67 | 98.01% | | 2023 | Issuance of Convertible Corporate Bonds | 37,416.13 | 4,505.84 | 24,988.64 | 66.79% | | Total | | 92,003.56 | 12,645.14 | 78,489.31 | 85.31% | - Among the funds raised from the 2021 initial public offering, a portion of over-raised funds has permanently supplemented working capital, and the 'Annual Production of 19 million sets of Home Appliance Magnetic Fluid Controllers Expansion Project' and 'R&D Center Construction Project' have been completed, with surplus raised funds permanently supplementing working capital838486 Overview of Entrusted Wealth Management During the Reporting Period (CNY 10,000) | Specific Type | Source of Entrusted Wealth Management Funds | Amount of Entrusted Wealth Management Occurred | Outstanding Balance | | :--- | :--- | :--- | :--- | | Bank Wealth Management Products | Raised Funds | 40,500 | 0 | | Bank Wealth Management Products | Own Funds | 14,666.89 | 11,762.12 | | Brokerage Wealth Management Products | Raised Funds | 5,000 | 5,000 | | Brokerage Wealth Management Products | Own Funds | 6,000 | 11,549.9 | | Total | | 66,166.89 | 28,312.02 | Disposal of Significant Assets and Equity The company did not dispose of significant assets but sold a 65.9295% equity stake in Suzhou Naskandi Automotive Components Co., Ltd. for CNY 20.5 million, optimizing resource allocation. - The company did not dispose of significant assets during the reporting period97 Disposal of Significant Equity | Equity Sold | Date of Sale | Transaction Price (CNY 10,000) | Net Profit Contributed by This Equity to the Listed Company from Beginning of Period to Sale Date (CNY 10,000) | Impact of Equity Sale on the Company | Is it a Related Party Transaction | | :--- | :--- | :--- | :--- | :--- | :--- | | 65.9295% Suzhou Naskandi | 2025-02-18 | 2,050.00 | -27.98 | Recovered equity investment funds of CNY 20.5 million, which is beneficial for the company to optimize resource allocation. | No | Analysis of Major Controlled and Invested Companies The company's main subsidiaries cover molds, home appliance, and automotive components; new subsidiaries Hongchang Zhiyuan and Hangzhou Hongzhi Motor were established, and Suzhou Naskandi's equity was disposed of. Major Subsidiaries and Investee Companies with Over 10% Impact on Company's Net Profit (CNY) | Company Name | Company Type | Main Business | Registered Capital | Total Assets | Net Assets | Operating Revenue | Operating Profit | Net Profit | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Jinhua Hongchi | Subsidiary | Production and sales of molds and automation equipment | 5,000,000 | 41,961,162.96 | 24,354,840.84 | 14,496,207.56 | 654,953.43 | 655,089.11 | | Lanxi Xiecheng | Subsidiary | Production and sales of home appliance components | 10,000,000 | 38,544,759.64 | 37,015,945.24 | 11,132,699.45 | 2,584,294.99 | 2,506,309.34 | | Hongchang Jingzhou | Subsidiary | Production and sales of home appliance components | 30,000,000 | 33,510,526.07 | 24,604,354.22 | 5,105,619.10 | -1,791,489.44 | -1,791,489.44 | | Hongchang Wuxi | Subsidiary | Production and sales of home appliance components | 20,000,000 | 39,341,475.11 | 10,011,404.75 | 23,561,006.97 | 251,186.41 | 245,982.90 | | Hongchang Zhiyuan | Subsidiary | Automotive components | 10,000,000 | 30,673,046.14 | 9,582,235.35 | 4,619.47 | -417,765.20 | -417,764.65 | - During the reporting period, the company established a new wholly-owned subsidiary, Zhejiang Hongchang Zhiyuan Automotive Components Co., Ltd., and jointly established Hangzhou Hongzhi Motor Technology Co., Ltd. with Liangzhi Joint, both of which are included in the consolidated financial statements101 - The company disposed of its 65.93% equity stake in its controlled subsidiary, Suzhou Naskandi Automotive Components Co., Ltd.; after the transaction, it no longer holds equity and is no longer included in the consolidated financial statements101 Information on Structured Entities Controlled by the Company During the reporting period, the company had no controlled structured entities. - During the reporting period, the company had no controlled structured entities102 Risks Faced by the Company and Countermeasures The company identified six major risks and formulated targeted countermeasures, including strengthening R&D, optimizing product structure, expanding new markets, and improving supply chain management. - Market competition risk and countermeasures: Enhance competitiveness by strengthening communication with clients, improving R&D innovation capabilities, enriching product types (e.g., door switches, electronic water pumps), and increasing investment in automotive components and equipment automation businesses102103104 - Market demand fluctuation risk and countermeasures: Continuously optimize business and technology strategies, increase R&D investment in smart home appliance components, automotive components, and equipment automation, and deeply collaborate with major clients to develop new products105 - Customer concentration risk and countermeasures: Continuously cultivate existing major client demands, efficiently assist in new product development, and actively explore overseas markets to increase overseas sales proportion and reduce customer structure risk106 - Growth risk and countermeasures: Increase R&D investment, monitor industry trends, develop smart and environmentally friendly products, strengthen sales team building, respond to the 'trade-in home appliances' policy, and attract and retain outstanding talent107108 - Business stability and sustainability risk and countermeasures: Leverage existing major client service experience, introduce professional talent to strengthen product development, enrich product lines, increase efforts in automotive components and overseas market expansion, reduce the proportion of home appliance business, and increase the proportion of overseas business109 - Raw material price fluctuation risk and countermeasures: Optimize supply chain management, strengthen cooperation with suppliers, control procurement costs through multi-channel price comparisons and inventory adjustments, and enhance internal potential through technological cost reduction and production process optimization110 Registration Form for Research, Communication, Interview, and Other Activities During the Reporting Period During the reporting period, the company hosted three investor research activities, discussing automotive and home appliance businesses, robotics, R&D investment, and raised funds utilization. - On February 27, 2025, the company hosted on-site research by institutions and individuals including Chunhui Private Equity, Shenzhen Yunxi Investment, and Guangdong-Hong Kong-Macao Industrial Investment, discussing the development of automotive components, home appliance components, and other businesses111 - On April 8, 2025, the company held its 2024 annual online performance briefing via the 'Interactive Easy' platform, communicating with investors on the progress of fundraising projects, operating performance, and R&D investment111 - On April 28, 2025, the company hosted on-site research by institutions and individuals including Kaiyuan Securities, CSC Financial, and SDIC Securities, primarily discussing the status of its invested robotics company Liangzhi Joint, strategies for balancing R&D investment and net profit, and the utilization of raised funds111 Formulation and Implementation of Market Value Management System and Valuation Enhancement Plan During the reporting period, the company did not formulate a market value management system nor disclose a valuation enhancement plan. - The company did not formulate a market value management system during the reporting period112 - The company did not disclose a valuation enhancement plan during the reporting period112 Implementation of 'Quality and Return Dual Enhancement' Action Plan During the reporting period, the company did not disclose an announcement regarding the 'Quality and Return Dual Enhancement' action plan. - During the reporting period, the company did not disclose an announcement regarding the 'Quality and Return Dual Enhancement' action plan112 Section IV Corporate Governance, Environment, and Society Changes in Directors, Supervisors, and Senior Management Due to re-election, several independent directors and supervisors left the company's board and supervisory board, and new independent directors and employee representative directors were elected. Changes in Directors, Supervisors, and Senior Management | Name | Position Held | Type | Date | Reason | | :--- | :--- | :--- | :--- | :--- | | Wu Zhengrong | Independent Director | Term expired, resigned | 2025-04-21 | Re-election | | Fang Guirong | Independent Director | Term expired, resigned | 2025-04-21 | Re-election | | Zhang Yi | Independent Director | Term expired, resigned | 2025-04-21 | Re-election | | Zhou Haiying | Chairperson of Supervisory Board | Term expired, resigned | 2025-04-21 | Re-election | | Ling Dengyang | Supervisor | Term expired, resigned | 2025-04-21 | Re-election | | Jiang Yutao | Employee Representative Supervisor | Term expired, resigned | 2025-04-21 | Re-election | | Liu Wei | Independent Director | Elected | 2025-04-21 | Re-election | | Liu Binhong | Independent Director | Elected | 2025-04-21 | Re-election | | Lv Lan | Independent Director | Elected | 2025-04-21 | Re-election | Profit Distribution and Capital Reserve Conversion to Share Capital in Current Reporting Period The company plans not to distribute cash dividends, issue bonus shares, or convert capital reserves into share capital for the semi-annual period. - The company plans not to distribute cash dividends, issue bonus shares, or convert capital reserves into share capital for the semi-annual period115 Implementation of Company Equity Incentive Plans, Employee Stock Ownership Plans, or Other Employee Incentive Measures The company implemented two phases of restricted stock incentive plans in 2022 and 2024, with the 2022 plan concluded due to unmet performance targets and the 2024 plan granted in December 2024. - 2022 Restricted Stock Incentive Plan: Proposed to grant 1.289 million shares, with 1.057 million shares initially granted to 52 individuals and 0.166 million shares reserved for 10 individuals, at an adjusted grant price of CNY 10.94 per share116117118119120121 - 2022 Plan progress: Due to the failure to meet the 2024 company-level performance targets, a total of 561,960 restricted shares from the first grant and reserved grant's third vesting period were forfeited and invalidated, concluding the incentive plan121122 - 2024 Restricted Stock Incentive Plan: Proposed to grant 3.9572 million shares, accounting for 3.54% of total share capital, granted in a single tranche to 75 incentive recipients at a grant price of CNY 10.09 per share128129 - 2024 Plan vesting arrangement: Restricted shares vest in two tranches after 15 months from the grant date, with vesting ratios of 50% and 50% respectively131 Environmental Information Disclosure The company and its major subsidiaries are not included in the list of enterprises required to disclose environmental information by law. - The listed company and its major subsidiaries are not included in the list of enterprises required to disclose environmental information by law136 Social Responsibility During the reporting period, the company had no social responsibility matters requiring disclosure. - The company has no social responsibility matters requiring disclosure136 Section V Significant Matters Commitments Fulfilled During the Reporting Period and Overdue Unfulfilled Commitments by the Company's Actual Controller, Shareholders, Related Parties, Acquirers, and the Company The company and its related parties were fulfilling various commitments made during the initial public offering or refinancing, with no overdue unfulfilled commitments. - The company's shareholders, actual controller, directors, supervisors, and senior management are all fulfilling their share lock-up commitments made during the initial public offering, with a lock-up period of 36 months from the date of the company's stock listing138139140141142143144145146 - The company, controlling shareholder, actual controller, and directors, supervisors, and senior management all committed to strictly adhere to the profit distribution policy, including the cash dividend policy, and to fulfill relevant decision-making procedures151 - The company, controlling shareholder, actual controller, and directors, supervisors, and senior management all committed to initiating a share price stabilization plan under specific conditions, including company share repurchases and increased shareholdings by the controlling shareholder and directors, supervisors, and senior management152153154155 - The company's controlling shareholder, actual controller, and shareholders holding over 5% committed to avoiding horizontal competition and to taking measures to minimize related-party transactions with the company162163164 - The company and relevant parties committed that if the prospectus contains false records, misleading statements, or major omissions, they will legally bear responsibility for share repurchase and compensation155159160161165166167 Non-Operating Fund Occupation by Controlling Shareholder and Other Related Parties During the reporting period, there was no non-operating occupation of listed company funds by the controlling shareholder or other related parties. - During the reporting period, there was no non-operating occupation of listed company funds by the controlling shareholder or other related parties173 Illegal External Guarantees During the reporting period, the company had no illegal external guarantees. - During the reporting period, the company had no illegal external guarantees174 Appointment and Dismissal of Accounting Firms The company's semi-annual financial report was unaudited. - The company's semi-annual report was unaudited175 Explanation by the Board of Directors, Supervisory Board, and Audit Committee on the Accounting Firm's 'Non-Standard Audit Report' for the Current Period During the reporting period, the company had no non-standard audit report, thus the Board of Directors, Supervisory Board, and Audit Committee do not need to provide an explanation. - During the reporting period, the company had no non-standard audit report176 Explanation by the Board of Directors on the 'Non-Standard Audit Report' for the Prior Year During the reporting period, the company had no non-standard audit report for the prior year, thus the Board of Directors does not need to provide an explanation. - During the reporting period, the company had no non-standard audit report for the prior year176 Bankruptcy and Reorganization Matters During the reporting period, the company had no bankruptcy and reorganization matters. - During the reporting period, the company had no bankruptcy and reorganization matters176 Litigation Matters The company was involved in two arbitration lawsuits, both in the trial stage, concerning overdue completion liquidated damages, floor rectification costs, and construction payment disputes with Zhejiang Yuede Construction Co., Ltd., with a total amount exceeding CNY 22 million. Other Litigation Matters | Basic Information of Litigation (Arbitration) | Amount Involved (CNY 10,000) | Whether an Estimated Liability is Formed | Litigation (Arbitration) Progress | Litigation (Arbitration) Outcome and Impact | | :--- | :--- | :--- | :--- | :--- | | The company submitted an arbitration application to Jinhua Arbitration Commission, requesting a ruling for Zhejiang Yuede Construction Co., Ltd. to pay overdue completion liquidated damages and floor rectification and reinforcement costs | 669.99 | No | Trial stage | The case is in the trial stage | | The company received a counter-arbitration acceptance notice from Jinhua Arbitration Commission, where the aforementioned defendant requested the company to pay construction fees of CNY 1,249 and overdue interest of CNY 39.72, and to return performance bond of CNY 300 and overdue interest of CNY 9.47 | 1,598.19 | No | Trial stage | The case is in the trial stage | Penalties and Rectification During the reporting period, the company had no penalties or rectification situations. - During the reporting period, the company had no penalties or rectification situations179 Integrity Status of the Company, its Controlling Shareholder, and Actual Controller During the reporting period, there were no integrity issues concerning the company, its controlling shareholder, or actual controller. - During the reporting period, there were no integrity issues concerning the company, its controlling shareholder, or actual controller180 Significant Related Party Transactions The company engaged in ordinary course of business procurement transactions with related parties and made an equity investment in Liangzhi Joint, jointly establishing Hangzhou Hongzhi Motor Technology Co., Ltd. Related Party Transactions Related to Ordinary Operations (CNY 10,000) | Related Party | Related Party Transaction Content | Related Party Transaction Amount | Proportion of Similar Transactions | Approved Transaction Limit | Exceeded Approved Limit | | :--- | :--- | :--- | :--- | :--- | :--- | | Lanxi Weidi | Purchase of Iron Plates | 1,448.41 | 35.37% | 3,000 | No | | Qihang Packaging | Purchase of Cartons | 507.24 | 73.66% | 1,200 | No | | Jinhua Xinyue | Purchase of Energy and Electricity | 90.06 | 9.77% | 500 | No | | Jinhua Xinzhi | Provision of Injection Molded Parts | 0.00 | 0.00% | 300 | No | | Total | | 2,045.71 | | 5,000 | | Related Party Transactions Involving Asset or Equity Acquisition/Disposal (CNY 10,000) | Related Party | Related Party Relationship | Transaction Type | Related Party Transaction Content | Transfer Price | Transaction Gains/Losses | | :--- | :--- | :--- | :--- | :--- | :--- | | Liangzhi Joint | Company director, deputy general manager, board secretary She Yan is a director of Liangzhi Joint, making Liangzhi Joint a related legal entity of the company. | Equity Investment | In May 2025, the company invested CNY 15 million in Liangzhi Joint, holding 30% equity after the investment. | 3,000.00 | 0.00 | Related Party Transactions for Joint External Investment | Joint Investor | Related Party Relationship | Name of Investee Enterprise | Main Business of Investee Enterprise | Registered Capital of Investee Enterprise | | :--- | :--- | :--- | :--- | :--- | | Liangzhi Joint | The company holds 30% equity in Liangzhi Joint, and Mr. She Yan, the company's director, deputy general manager, and board secretary, is a director of Liangzhi Joint. The company jointly invested with Liangzhi Joint to establish a joint venture, where the company invested CNY 7 million and Liangzhi Joint invested CNY 3 million. After the investment, the company holds 70% equity in the joint venture, and Liangzhi Joint holds 30% equity. | Hangzhou Hongzhi Motor Technology Co., Ltd. | Frameless torque motors | CNY 1,000 10,000 | - During the reporting period, the company had no related-party creditor-debtor relationships186 - There were no deposits, loans, credit lines, or other financial transactions between the company and related financial companies, or between the company's controlled financial companies and related parties187188 - During the reporting period, the company had no other significant related-party transactions189 Significant Contracts and Their Performance The company had no trusteeship or contracting situations but was involved in multiple leasing matters and provided a CNY 20 million guarantee for a subsidiary. - During the reporting period, the company had no trusteeship situations190 - During the reporting period, the company had no contracting situations191 Leasing Information | No. | Lessor | Lessee | Lease Address | Lease Area | Lease Period | Purpose | Usage Status | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | 1 | Hongchang Technology | Jinhua Zhonggu | No. 161 Binhong West Road, Jinhua City | 12458 square meters | September 30, 2018 to December 29, 2028 | Sublease | Normal use | | 2 | Hongchang Technology | Zhu Yanming | No. 258 Shuanglin South Street, Qiubin Sub-district, Wucheng District, Jinhua City | 576 square meters | January 1, 2022 to January 31, 2027 | Supermarket, canteen | Normal use | | 3 | Wuxi Mingli Machinery Manufacturing Co., Ltd. | Hongchang Electric (Wuxi) Co., Ltd. | 1st-2nd floor factory building, No. 19-4 Wanghong Road, Hongshan Town, Xinwu District, Wuxi City, Jiangsu Province | 5263 square meters | February 8, 2022 to February 7, 2028 | Production use | Normal use | - During the reporting period, there were no leasing projects that generated profits or losses exceeding 10% of the company's total profit for the reporting period192 Company Guarantees for Subsidiaries (CNY 10,000) | Guaranteed Entity Name | Disclosure Date of Guarantee Limit Announcement | Guarantee Limit | Actual Occurrence Date | Actual Guarantee Amount | Guarantee Type | Fulfilled | Related Party Guarantee | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Jinhua Hongchi Technology Co., Ltd. | March 31, 2025 | 2,000 | | 2,000 | Joint and several liability guarantee | Yes | No | - During the reporting period, the company had no significant ordinary course of business contracts or other significant contracts195196 Explanation of Other Significant Matters During the reporting period, the company had no other significant matters requiring explanation. - During the reporting period, the company had no other significant matters requiring explanation197 Significant Matters of Company Subsidiaries The company sold a 65.93% equity stake in Suzhou Naskandi Automotive Components Co., Ltd., and adjusted Jinhua Hongchi's business, transferring its mold operations to Jinhua Hongyun. - In February 2025, the company transferred a 65.93% equity stake in its controlled subsidiary, Suzhou Naskandi Automotive Components Co., Ltd., to natural person Zhang Chunhua for a transaction price of CNY 20.5 million; the industrial and commercial change has been completed, relevant investment funds have been recovered, and Naskandi is no longer included in the company's consolidated financial statements198 - In August 2025, the company adjusted Jinhua Hongchi's business, introducing a professional equipment automation team, and transferring its original mold business, personnel, and assets to Jinhua Hongyun198 Section VI Share Changes and Shareholder Information Share Change Status Total share capital increased by 19,030,231 shares due to convertible bond conversion, with restricted shares decreasing and unrestricted shares increasing, and convertible bonds fully redeemed and delisted. Share Change Status (Shares) | Item | Quantity Before Change | Proportion Before Change | Net Change (Increase/Decrease) | Quantity After Change | Proportion After Change | | :--- | :--- | :--- | :--- | :--- | :--- | | I. Restricted Shares | 15,120,000 | 13.51% | 0 | 15,120,000 | 11.55% | | II. Unrestricted Shares | 96,813,003 | 86.49% | 19,030,231 | 115,843,234 | 88.45% | | III. Total Shares | 111,933,003 | 100.00% | 19,030,231 | 130,963,234 | 100.00% | - The main reason for share changes was the conversion of the company's convertible bonds, leading to an increase of 19,030,231 shares in total share capital203204 - The company's convertible bonds triggered conditional redemption terms, and the early redemption proposal was approved on May 23, 2025. As of June 16, 2025, a cumulative total of 19,328,912 shares were converted, the remaining 17,902 convertible bonds were redeemed, and they were delisted from the Shenzhen Stock Exchange on June 25, 2025205 - The share changes had a certain dilutive effect on basic and diluted earnings per share for the most recent year and period, but owner's equity increased, the asset-liability ratio decreased, and the reduction in convertible bond balance led to lower financial expenses206 - Changes in unrestricted shares during the reporting period207 Securities Issuance and Listing During the reporting period, the company had no securities issuance or listing activities. - During the reporting period, the company had no securities issuance or listing activities207 Shareholder Numbers and Shareholding Status At period-end, the company had 15,767 common shareholders, with Zhejiang Hongchang Holdings, Lu Baohong, and Zhou Huiming as top shareholders, and Lu Baohong, Zhou Huiming, and Lu Can collectively controlling 58.02% of the company. Total Common Shareholders and Top 10 Shareholders' Shareholding Status at Period-end (Shares) | Shareholder Name | Shareholder Nature | Shareholding Proportion | Number of Shares Held at Period-end | Change During Reporting Period | Number of Restricted Shares Held | Number of Unrestricted Shares Held | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Zhejiang Hongchang Holdings Co., Ltd. | Domestic Non-state-owned Legal Entity | 30.25% | 39,611,964.00 | 0.00 | 0.00 | 39,611,964.00 | | Lu Baohong | Domestic Natural Person | 13.19% | 17,279,976.00 | 0.00 | 12,959,982.00 | 4,319,994.00 | | Zhou Huiming | Domestic Natural Person | 8.53% | 11,174,436.00 | 0.00 | 0.00 | 11,174,436.00 | | Lu Can | Domestic Natural Person | 2.20% | 2,880,024.00 | 0.00 | 2,160,018.00 | 720,006.00 | | Jinhua Hongsheng Enterprise Management Partnership (Limited Partnership) | Domestic Non-state-owned Legal Entity | 2.18% | 2,856,000.00 | 0.00 | 0.00 | 2,856,000.00 | | Jinhua Honghe Enterprise Management Partnership (Limited Partnership) | Domestic Non-state-owned Legal Entity | 1.67% | 2,184,000.00 | 0.00 | 0.00 | 2,184,000.00 | | Bank of China Co., Ltd. - Huaxia Dual Debt Enhanced Bond Fund | Other | 1.27% | 1,659,007.00 | 0.00 | 0.00 | 1,659,007.00 | | Xu Xuhong | Domestic Natural Person | 0.59% | 778,800.00 | 0.00 | 0.00 | 778,800.00 | | Zhejiang Provincial Venture Capital Group Co., Ltd. | State-owned Legal Entity | 0.53% | 693,415.00 | -1,110,319.00 | 0.00 | 693,415.00 | | J. P. Morgan Securities PLC - Proprietary Funds | Other | 0.40% | 520,482.00 | 0.00 | 0.00 | 520,482.00 | - Mr. Lu Baohong and Ms. Zhou Huiming are a married couple, and Mr. Lu Can is their son. Lu Baohong, Zhou Huiming, and Lu Can collectively control 58.02% of the company's equity, directly and indirectly, serving as the company's actual controllers209210 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. Changes in Shareholdings of Directors, Supervisors, and Senior Management (Shares) | Name | Position | Employment Status | Shares Held at Beginning of Period | Shares Increased in Current Period | Shares Decreased in Current Period | Shares Held at Period-end | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Liu Binhong | Independent Director | Current | 0 | 0 | 0 | 0 | | Liu Wei | Independent Director | Current | 0 | 0 | 0 | 0 | | Lv Lan | Independent Director | Current | 0 | 0 | 0 | 0 | | Wu Zhengrong | Independent Director | Resigned | 0 | 0 | 0 | 0 | | Fang Guirong | Independent Director | Resigned | 0 | 0 | 0 | 0 | | Zhang Yi | Independent Director | Resigned | 0 | 0 | 0 | 0 | | Zhou Haiying | Chairperson of Supervisory Board | Resigned | 0 | 0 | 0 | 0 | | Ling Dengyang | Supervisor | Resigned | 0 | 0 | 0 | 0 | | Jiang Yutao | Employee Representative Director | Current |