华光新材(688379) - 2025 Q2 - 季度财报

Definitions This section provides definitions of common terms used in the report, including company names, major investors, and key customer names, clarifying the reporting period from January 1, 2025, to June 30, 2025 - Clarifies that "Huaguang New Materials/Company/This Company/Joint Stock Company" refers to "Hangzhou Huaguang Welding New Materials Co., Ltd"[12] - Defines the reporting period as January 1, 2025, to June 30, 2025[12] - Lists major customer names including Midea Group, Gree Electric, Haier, and Carrier[12] Company Profile and Key Financial Indicators This section outlines the company's basic information, contact details, stock overview, and key accounting data and financial indicators for the first half of 2025, showing significant growth in operating revenue and net profit, but negative net cash flow from operating activities Company Basic Information Introduces basic information about Hangzhou Huaguang Welding New Materials Co., Ltd., including its Chinese and English names, legal representative, registered and office addresses, company website, and email - The company's Chinese name is Hangzhou Huaguang Welding New Materials Co., Ltd., abbreviated as Huaguang New Materials[14] - The legal representative is Jin Limei, with the registered address in Yuhang District, Hangzhou, Zhejiang Province[14] Contacts and Contact Information Provides contact details including address, phone, fax, and email for the company's Board Secretary (domestic representative for information disclosure) Hu Ling and Securities Affairs Representative Li Meijuan - Contact information for Board Secretary Hu Ling and Securities Affairs Representative Li Meijuan has been disclosed[15] Brief Introduction to Changes in Information Disclosure and Document Storage Locations Specifies the company's designated information disclosure newspapers (e.g., Shanghai Securities News), the website for semi-annual reports (www.sse.com.cn), and the location for report storage (Board Secretary's Office) - The company designates "Shanghai Securities News" and others for information disclosure, with the report website being **www.sse.com.cn**[16](index=16&type=chunk) Brief Introduction to Company Shares/Depositary Receipts Discloses that the company's A-shares are listed on the STAR Market of the Shanghai Stock Exchange, with the stock abbreviation Huaguang New Materials and stock code 688379 - The company's A-shares are listed on the STAR Market of the Shanghai Stock Exchange, stock code 688379[17] Company's Key Accounting Data and Financial Indicators Details the company's key accounting data and financial indicators for H1 2025, showing significant growth in operating revenue and net profit, but negative net cash flow from operating activities, with non-recurring gains contributing significantly to net profit Key Accounting Data for H1 2025 | Indicator | Current Period (Jan-Jun) (Yuan) | Prior Period (Yuan) | Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 1,206,223,590.12 | 867,628,688.83 | 39.03 | | Total Profit | 140,053,647.82 | 49,469,677.77 | 183.11 | | Net Profit Attributable to Shareholders of Listed Company | 123,211,716.56 | 44,964,059.14 | 174.02 | | Net Profit Attributable to Shareholders of Listed Company (Excluding Non-Recurring Gains/Losses) | 44,017,304.54 | 43,547,133.25 | 1.08 | | Net Cash Flow from Operating Activities | -119,427,807.23 | -145,238,736.69 | Not Applicable | Key Financial Indicators for H1 2025 | Indicator | Current Period (Jan-Jun) | Prior Period | Change (%) | | :--- | :--- | :--- | :--- | | Basic Earnings Per Share (Yuan/share) | 1.43 | 0.53 | 169.81 | | Diluted Earnings Per Share (Yuan/share) | 1.42 | 0.52 | 173.08 | | Basic EPS Excluding Non-Recurring Gains/Losses (Yuan/share) | 0.51 | 0.51 | 0.00 | | Weighted Average Return on Net Assets (%) | 11.71 | 4.76 | Increased by 6.95 percentage points | | Weighted Average Return on Net Assets Excluding Non-Recurring Gains/Losses (%) | 4.18 | 4.61 | Decreased by 0.43 percentage points | | R&D Investment as % of Operating Revenue (%) | 2.70 | 3.19 | Decreased by 0.49 percentage points | - Operating revenue increased by 39.03% year-on-year, primarily due to the company's expansion into new sectors like electronics and new energy vehicles, as well as increased product sales and rising raw material prices[20] - Net profit increased by 174.02% year-on-year, mainly attributable to the recognition of demolition gains and growth in operating revenue in H1 2025[21] - Net cash flow from operating activities was negative, primarily due to cash settlements with suppliers, longer credit terms for bill settlements with customers, and some discounted notes receivable being reported as cash flow from financing activities[21] Non-Recurring Gains/Losses Items and Amounts for H1 2025 | Non-Recurring Gain/Loss Item | Amount (Yuan) | | :--- | :--- | | Gains/Losses on Disposal of Non-Current Assets | 87,998,708.47 | | Government Grants Recognized in Current Profit/Loss | 5,496,286.29 | | Gains/Losses from Fair Value Changes and Disposal of Financial Assets and Liabilities | -21,123.64 | | Other Non-Recurring Gains/Losses | -274,332.76 | | Less: Income Tax Impact | 14,005,126.34 | | Total | 79,194,412.02 | Net Profit After Deducting Impact of Share-Based Payments Discloses the net profit after deducting the impact of share-based payments, which was 124.94 million Yuan for the current period, representing a 172.20% year-on-year increase Net Profit After Deducting Impact of Share-Based Payments | Key Accounting Data | Current Period (Jan-Jun) (Yuan) | Prior Period (Yuan) | Change from Prior Period (%) | | :--- | :--- | :--- | :--- | | Net Profit After Deducting Impact of Share-Based Payments | 124,941,416.56 | 45,901,059.14 | 172.20 | Management Discussion and Analysis This section discusses the company's industry, main business, operating model, performance, core competitiveness, and risk factors, highlighting steady growth in traditional businesses, expansion into emerging sectors, increased R&D, internationalization, and digital transformation Industry and Main Business Overview Details the development stage, technical characteristics, and industry position of the special functional welding materials sector, along with the company's main businesses, products, and application areas, emphasizing its leading position in brazing materials and diversified product portfolio (I) Industry Overview Describes the technology-intensive nature of the special functional welding materials industry, its broad applications, and key technical barriers, noting the company's recognition as a "China Manufacturing Single Champion Demonstration Enterprise" - The company operates in the new materials sector, specifically special functional welding materials, with products widely used for brazing connections between similar metals, dissimilar metals, and metals with non-metals[27] - Industry technical barriers include customized design and mass production capabilities, stable batch quality control, and comprehensive solution service capabilities[27][28] - The company is a leading enterprise in China's brazing materials industry, having received the National Science and Technology Progress Award (Second Prize) and recognized as a China Manufacturing Single Champion Demonstration Enterprise[29][30] - The company participates in developing multiple national, industry, and group standards, holding 128 authorized patents (including 48 invention patents), demonstrating strong R&D capabilities[31] - The brazing materials industry benefits from investments in new energy vehicles, wind/solar/storage power equipment, aerospace, electronics and semiconductors, and AI industries, with future trends towards green, low-temperature, composite, low-cost, flexible, and high-reliability solutions, integrating with AI technology[32] (II) Main Business, Products, or Services Introduces Huaguang New Materials' focus on R&D, manufacturing, and sales of welding and joining materials and technologies, with main products including copper-based, silver, aluminum-based, silver paste, and tin-based brazing materials, widely applied in smart homes, energy, and new energy vehicles, also offering smart welding solutions - The company's main products include copper-based brazing materials, silver brazing materials, aluminum-based brazing materials, silver paste, and tin-based brazing materials for electronic connections[33] - Products and technologies are widely applied in smart homes, energy and power, rail transit, new energy vehicles, electronic semiconductors, aerospace, and AI industries[33] - The company possesses design and production capabilities for thousands of specifications of brazing materials in various forms, such as welding rods, wires, rings, strips (sheets), flux-cored, flux-coated, and pastes[33] - The company boasts a high-quality customer base including Midea Group, Gree Electric, Haier, Carrier, CRRC, and Hikvision[35] - The company is progressively building smart welding solution service capabilities, offering integrated services including welding materials, smart welding equipment, welding tools, welded component processing, and welding technology[35] (III) Main Operating Model Explains the company's R&D model (independent, market-oriented, industry-academia collaboration), procurement model (primarily self-procurement, supplemented by outsourced processing, based on open market prices), production model (combination of make-to-stock and make-to-order), and sales model (primarily direct sales, supplemented by distribution) - The R&D model is guided by market demand and industry trends, establishing a comprehensive independent R&D system and engaging in industry-academia-research collaboration[39] - The procurement model primarily involves self-procurement of non-ferrous metals like silver and copper, combined with outsourced processing, with prices based on open market rates[39] - The production model combines "make-to-stock" and "make-to-order" approaches, maintaining reasonable inventory to meet customer demand[40] - The sales model is primarily direct sales, supplemented by distribution, providing product and technical service support[40] Discussion and Analysis of Operations During the reporting period, the company achieved significant growth in operating revenue and net profit, driven by steady growth in traditional businesses, accelerated expansion into emerging sectors, increased R&D investment, international development, digital transformation, and ESG practices Operating Performance for H1 2025 | Indicator | Amount (Million Yuan) | Year-on-Year Growth (%) | | :--- | :--- | :--- | | Operating Revenue | 1,206.22 | 39.03 | | Net Profit Attributable to Shareholders of Listed Company | 123.21 | 174.02 | | Net Profit Excluding Non-Recurring Gains/Losses | 44.02 | 1.08 | - Traditional advantageous businesses (refrigeration and HVAC, power and electrical) achieved steady growth, while emerging sectors (electronics, new energy vehicles, AI industry) accelerated expansion, becoming the second growth curve[41][42] Growth in Main Business Revenue by Industry Sector for H1 2025 | Industry Sector | Operating Revenue Year-on-Year Growth (%) | | :--- | :--- | | Refrigeration and HVAC | 22.47 | | Power and Electrical | 66.95 | | Electronics | 75.92 | | New Energy Vehicles | 50.01 | | Silver Paste Products in Electronics | 42.69 | | Tin-based Brazing Materials | 1180.81 | - Increased R&D investment to build a "medium-temperature + low-temperature + high-temperature" full-temperature brazing material system, with new products like welding materials for liquid-cooled plates in computing servers and composite aluminum-based brazing materials for new energy vehicles achieving internationally advanced performance[45][46] - Seized the opportunity of growing thermal management demand in the AI industry, achieving batch revenue in the liquid-cooled computing server sector, accounting for 2.4% of H1 revenue[47] - Actively deployed in the robotics sector, with products already applied in the welding of circuit boards for robotic dexterous hands[47] - Overseas business covers over 50 countries, with operating revenue increasing by 37.96% year-on-year, becoming a new growth engine[48] - Continuously advanced digital transformation, intelligent manufacturing, and lean management, accelerating the construction of "Future Factories" and national-level green factories[49] - Achieved Wind AA and Huazheng A ESG ratings, demonstrating commitment to sustainable development[50] Analysis of Core Competitiveness The company's core competitiveness lies in technological innovation, a diverse product portfolio, high-quality and stable customer resources, professional technical services, and an efficient management system, collectively supporting its leading position and sustained development in the brazing materials industry (I) Core Competitiveness Analysis Leveraging 30 years of technical accumulation, the company holds a leading edge in product formula R&D, process innovation, and automated manufacturing, forming a multi-variety, multi-specification product system, possessing high-quality and stable customer resources, providing customized technical services and comprehensive solutions, and maintaining a stable management team and robust management system - Technological innovation advantage: Possesses strong product formula R&D and process innovation capabilities, forming a leading technical system capable of precise and efficient customized product development[52][53] - Multi-specification product advantage: Offers thousands of product specifications, having developed silver-saving brazing materials, lead-free and cadmium-free green brazing materials, vacuum brazing materials, and composite brazing materials, meeting diverse market demands[54][55] - High-quality and stable customer resources and strong market development capabilities: Serves renowned customers like Gree Electric, Midea Group, Haier, and CRRC, and is experiencing high growth in new sectors such as electronics and new energy vehicles[56] - Technical service advantage: Customer-centric, providing innovative technical ideas and comprehensive solutions to optimize welding performance and reduce production costs, assisting customers in shortening new product R&D cycles[57] - Management advantage: Stable management team with a "three-tier" technical talent梯队, certified with ISO9001, ISO14001, IATF16949, and actively promoting lean and information-based management[58][59] (III) Core Technologies and R&D Progress The company's core technology system encompasses silver-saving, green, vacuum, composite brazing materials, as well as low/high-temperature silver paste and tin-based brazing materials, continuously innovating preparation processes and advanced welding solutions. During the reporting period, the company achieved multiple R&D results in full-temperature range materials, silver paste products, high-temperature materials, and advanced welding solutions, with R&D investment continuously growing - The core technology system includes silver-saving brazing materials, green brazing materials, vacuum brazing materials, composite brazing materials, low/high-temperature silver paste, tin-based brazing material formulation technologies, as well as preparation processes such as preformed brazing material manufacturing, horizontal continuous casting, automatic cleaning, and integrated forming[60][61][62] - During the reporting period, the company achieved iterative upgrades and digital R&D for precision components in medium-temperature materials such as copper-based, silver, and aluminum brazing materials[65] - For electronic connections and semiconductor fields, the company continuously developed high-reliability, high-activity, and environmentally friendly low-temperature brazing materials, including preformed tin solder sheets and solder paste products[65] - Optimized the performance of silver paste for electronic components, developing new glass powders, low-odor solvents, low-silver products adaptable to different sintering temperatures, and new low-temperature silver pastes[66][67] - Expanded high-temperature material products, developing copper-based solder pastes, high-purity nickel-based solders, and successfully developed high-precision, micro-sized bronze solder rings[67] - In advanced welding solutions, developed multi-tube simultaneous induction brazing equipment for copper-copper, aluminum-aluminum, copper-aluminum, and stainless steel, and conducted in-depth research on intelligent laser brazing, laser cladding, and vacuum brazing application technologies[67] Intellectual Property Status | IP Type | New Applications in Current Period (units) | New Grants in Current Period (units) | Cumulative Applications (units) | Cumulative Grants (units) | | :--- | :--- | :--- | :--- | :--- | | Invention Patents | 8 | 0 | 98 | 48 | | Utility Model Patents | 1 | 5 | 82 | 79 | | Design Patents | 0 | 0 | 1 | 1 | | Software Copyrights | 0 | 2 | 8 | 8 | | Total | 9 | 7 | 189 | 136 | R&D Investment Status | Indicator | Current Period Amount (Yuan) | Prior Period Amount (Yuan) | Change (%) | | :--- | :--- | :--- | :--- | | Expensed R&D Investment | 32,598,833.16 | 27,706,608.51 | 17.66 | | Total R&D Investment | 32,598,833.16 | 27,706,608.51 | 17.66 | | Total R&D Investment as % of Operating Revenue | 2.70 | 3.19 | -0.49 | R&D Personnel Status | Indicator | Current Period | Prior Period | | :--- | :--- | :--- | | Number of R&D Personnel (persons) | 87 | 77 | | R&D Personnel as % of Total Company Staff (%) | 13.30 | 11.88 | | Total R&D Personnel Compensation (Yuan) | 7,508,217.71 | 6,922,760.29 | Risk Factors The company faces operational and core competitiveness risks, including raw material price fluctuations, large inventory, significant accounts receivable and notes receivable leading to negative operating cash flow, new product R&D and trial production, technology leakage, and technological changes in downstream customers, also affected by macroeconomic and downstream industry cyclical fluctuations (I) Operational Risks Key operational risks include raw material price volatility impacting profitability, large inventory balances potentially leading to impairment provisions and cash flow pressure, and significant accounts receivable and notes receivable combined with negative operating cash flow, posing risks of bad debts and working capital strain - Raw material price fluctuation risk: Prices of commodities like silver and copper fluctuate frequently, and the company's pricing mechanism may not fully absorb price volatility, potentially leading to a significant decline in profits during sharp price drops[76] - Risk of large inventory: A substantial inventory balance, coupled with a significant drop in raw material prices, could lead to inventory impairment provisions and impact cash turnover and operating cash flow[78] - Risk of large accounts receivable and notes receivable and negative net cash flow from operating activities: Cash settlements with suppliers and longer credit terms for bill settlements with customers result in negative operating cash flow, posing risks of bad debts and working capital strain[79] (II) Core Competitiveness Risks Core competitiveness risks include long and potentially unsuccessful new product R&D and trial production cycles, loss of core technical personnel or technology leakage, and potential sales reductions of existing products due to technological changes in downstream customers - New product R&D and trial production risk: Long development cycles for new products may lead to development failure, inability to meet customer needs promptly, or difficulty in maintaining technological leadership[80] - Technology leakage risk: The company's core technologies rely on specialized talent, posing risks of loss of core technical personnel or technology leakage[81] - Sales fluctuation risk due to technological changes in downstream customers: Technological innovations downstream may lead to reduced sales of existing products, adversely impacting the company if new products or customers are not developed in a timely manner[82] (III) Macroeconomic Environment Risks The company's business is closely tied to downstream markets such as refrigeration and HVAC, power and electrical, electronics, and new energy vehicles; macroeconomic changes and cyclical fluctuations in these industries may lead to reduced orders and difficulties in collecting payments, thereby affecting company performance - Macroeconomic changes and cyclical fluctuations in downstream industries risk: The company's performance is significantly affected by macroeconomic conditions and the development of downstream industries (refrigeration and HVAC, power and electrical, electronics, new energy vehicles), potentially leading to reduced orders and difficulties in collecting payments[83][84] Key Operating Performance During the Reporting Period During the reporting period, the company's operating revenue reached 1,206.22 million Yuan, a 39.03% year-on-year increase; net profit attributable to shareholders of the listed company was 123.21 million Yuan, a 174.02% year-on-year increase Key Operating Performance for H1 2025 | Indicator | Amount (Million Yuan) | Year-on-Year Growth (%) | | :--- | :--- | :--- | | Operating Revenue | 1,206.22 | 39.03 | | Net Profit Attributable to Shareholders of Listed Company | 123.21 | 174.02 | (IV) Analysis of Main Business Both operating revenue and operating costs significantly increased this period, primarily due to the company's expansion into new sectors, increased product sales, and rising raw material prices. Selling expenses decreased, while administrative, financial, and R&D expenses all increased. Net cash flow from operating activities was negative, net cash flow from investing activities turned positive, and net cash flow from financing activities decreased Analysis of Changes in Financial Statement Items | Item | Current Period Amount (Yuan) | Prior Period Amount (Yuan) | Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 1,206,223,590.12 | 867,628,688.83 | 39.03 | | Operating Cost | 1,072,761,512.76 | 737,160,178.54 | 45.53 | | Selling Expenses | 9,565,804.27 | 10,237,618.75 | -6.56 | | Administrative Expenses | 26,089,161.82 | 21,782,556.39 | 19.77 | | Financial Expenses | 18,885,773.07 | 16,367,130.08 | 15.39 | | R&D Expenses | 32,598,833.16 | 27,706,608.51 | 17.66 | | Net Cash Flow from Operating Activities | -119,427,807.23 | -145,238,736.69 | Not Applicable | | Net Cash Flow from Investing Activities | 9,907,203.82 | -37,331,133.51 | Not Applicable | | Net Cash Flow from Financing Activities | 62,487,769.05 | 77,039,335.96 | -18.89 | - Operating revenue growth was primarily due to expansion into new sectors, increased product sales, and rising raw material prices[87] - Net cash flow from investing activities turned positive mainly due to the receipt of gains from the disposal of fixed assets at the Gouzhuang plant[87] - Net cash flow from financing activities decreased primarily due to an increase in the company's cash dividend payout[87] (VI) Analysis of Assets and Liabilities At the end of the reporting period, the company's total assets and net assets attributable to shareholders of the listed company both increased. Significant increases were observed in notes receivable financing, contract assets, construction in progress, other non-current assets, notes payable, and long-term borrowings, while deferred income tax assets and other current liabilities decreased Changes in Assets and Liabilities | Item Name | Current Period End Amount (Yuan) | Current Period End % of Total Assets (%) | Prior Year End Amount (Yuan) | Prior Year End % of Total Assets (%) | Change from Prior Year End (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Notes Receivable Financing | 83,367,867.30 | 3.21 | 42,101,659.53 | 1.77 | 98.02 | | Contract Assets | 10,465,879.22 | 0.40 | 6,436,793.73 | 0.27 | 62.59 | | Construction in Progress | 160,119,780.69 | 6.16 | 93,324,816.68 | 3.93 | 71.57 | | Deferred Income Tax Assets | 4,690,061.51 | 0.18 | 10,453,291.77 | 0.44 | -55.13 | | Other Non-Current Assets | 12,899,793.19 | 0.50 | 6,119,830.68 | 0.26 | 110.79 | | Notes Payable | 368,649,029.59 | 14.17 | 174,454,949.91 | 7.35 | 111.31 | | Other Current Liabilities | 13,408,793.89 | 0.52 | 169,607,391.13 | 7.15 | -92.09 | | Long-Term Borrowings | 216,163,894.33 | 8.31 | 83,578,107.24 | 3.52 | 158.64 | - Notes receivable financing increased by 98.02%, primarily due to an increase in high-credit bank acceptance bills held at period-end[89] - Construction in progress increased by 71.57%, mainly due to increased investment in the construction of the comprehensive building and research building, and equipment[89] - Deferred income tax assets decreased by 55.13%, primarily because a significant increase in net profit this period led to a reduction in deferred income tax assets recognized from deductible temporary differences in prior periods[89] - Notes payable increased by 111.31%, mainly due to increased procurement scale and continuous optimization of payment methods, leading to an increase in outstanding letters of credit and "Xin E Lian" balances at period-end[89] - Long-term borrowings increased by 158.64%, primarily due to the need for plant construction and operations, leading to an increase in long-term bank loans[89] Major Asset Restrictions as of Report End | Item | Period End Book Value (Yuan) | Reason for Restriction | | :--- | :--- | :--- | | Cash and Bank Balances | 13,912,344.00 | Acceptance bill margin, Alipay margin, ETC margin, futures margin | | Notes Receivable | 4,404,638.71 | Pledged for borrowings | | Notes Receivable Financing | 4,768,052.28 | Pledged for borrowings | | Fixed Assets | 234,506,859.81 | Mortgaged for borrowings | | Intangible Assets | 44,691,700.00 | Mortgaged for borrowings | | Total | 302,283,594.80 | | (VII) Analysis of Investment Status The company had no significant equity or non-equity investments during the reporting period. Derivative investments were primarily for hedging purposes, with a period-end book value of 0, but generated fair value change gains/losses, effectively reducing raw material price fluctuation risks Derivative Investments for Hedging Purposes During the Reporting Period | Derivative Investment Type | Initial Investment Amount (Million Yuan) | Beginning Book Value (Million Yuan) | Fair Value Change Gains/Losses in Current Period (Million Yuan) | Amount Purchased in Reporting Period (Million Yuan) | Amount Sold in Reporting Period (Million Yuan) | Period End Book Value (Million Yuan) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Hedging | 0.00 | 0.00 | -0.02 | 52.45 | 52.35 | 0.00 | - The effective portion of hedging activities was recognized in other comprehensive income as -28,800.00 Yuan, while the ineffective portion was recognized in investment income as -56,070.00 Yuan, aiming to mitigate the adverse impact of large-scale raw material price fluctuations on operations[94] - The company formulated the "Futures Hedging Management System" to manage price volatility, capital, liquidity, and operational risks through measures such as scale control, trading plans, and stop-loss limits[94] Corporate Governance, Environment, and Society This section discloses changes in the company's directors, supervisors, senior management, and core technical personnel, profit distribution plan, employee stock ownership plan progress, environmental information disclosure, and rural revitalization efforts Changes in Directors, Supervisors, Senior Management, and Core Technical Personnel During the reporting period, Mr. Fan Zhonghua, a core technical personnel, resigned due to retirement but continues to serve as a company consultant. The company's criteria for identifying core technical personnel include contributions, positions, education, experience, and research achievements - Core technical personnel Mr. Fan Zhonghua resigned due to retirement on April 2, 2025, but continues to serve as a company consultant[98] - The company's criteria for identifying core technical personnel include outstanding contributions to the company's development, important positions, educational background, work experience, qualifications, research achievements, and awards[99] Profit Distribution or Capital Reserve Conversion Plan The company proposes to distribute a cash dividend of 1.50 Yuan (tax inclusive) per 10 shares to all shareholders, based on the total share capital registered on the equity distribution record date, after deducting repurchased shares, totaling 13,169,533.50 Yuan, which represents 10.69% of the net profit attributable to shareholders of the listed company in H1 2025 - The company proposes a cash dividend of 1.50 Yuan (tax inclusive) per 10 shares, with no capital reserve conversion to share capital and no bonus shares[100] - As of August 29, 2025, based on the share capital of 87,796,890 shares after deducting repurchased shares, a total cash dividend of 13,169,533.50 Yuan (tax inclusive) will be distributed[100] - The profit distribution plan accounts for 10.69% of the net profit attributable to shareholders of the listed company in the H1 2025 consolidated financial statements[100] - The plan has been approved by the Board of Directors and is subject to shareholder approval[101] Equity Incentive and Employee Stock Ownership Plan The company has completed the share registration for the third vesting period of the 2021 restricted stock incentive plan's initial grant and the second vesting period of the reserved grant. The 2024 employee stock ownership plan was approved by the Board and shareholders, with the non-trading transfer of initially acquired shares completed in September 2024 - On January 14, 2025, the company completed the share registration for the third vesting period of the 2021 restricted stock incentive plan's initial grant and the second vesting period of the reserved grant[102] - The 2024 employee stock ownership plan was approved by the Board of Directors and Supervisory Committee in July 2024, and by the Shareholders' Meeting in August[103][104] - On September 20, 2024, 1.6 million shares of the company's stock from the company's dedicated repurchase securities account were non-trading transferred to the 2024 employee stock ownership plan securities account[104] Environmental Information Disclosure The company is included in the list of enterprises required to disclose environmental information by law, with a query index provided for the Zhejiang Provincial Department of Ecology and Environment's enterprise environmental information disclosure system - Hangzhou Huaguang Welding New Materials Co., Ltd. is included in the list of enterprises required to disclose environmental information by law[105] - The environmental information disclosure report can be queried on the Zhejiang Provincial Department of Ecology and Environment - Enterprise Environmental Information Disclosure System[105] Rural Revitalization Work The company actively participates in rural revitalization efforts, partnering with Gangnan Village in Liangzhu Street and Puning Village in Renhe Street, Yuhang District, Hangzhou City, to visit struggling families and procure agricultural products to support rural economic development - The company engaged in paired assistance and co-construction with Gangnan Village in Liangzhu Street and Puning Village in Renhe Street, Yuhang District, Hangzhou City[106] - Actively visited struggling families in Gangnan Village, providing comfort funds and materials[106] - Assisted farmers by purchasing agricultural products from Puning Village, contributing to rural economic development[106] Significant Matters This section details the company's fulfillment of various commitments, including those related to initial public offering such as dividend distribution, related-party transactions, share repurchases, and information disclosure, as well as Huaguang Investment's share lock-up commitment. During the reporting period, the company had no significant lawsuits, arbitrations, illegal guarantees, or occupation of funds by controlling shareholders, maintaining a good credit standing Fulfillment of Commitments The company's actual controller, directors, and the company itself made long-term commitments regarding profit distribution, related-party transactions, share repurchases, and the truthfulness of information disclosure, which were strictly fulfilled during the reporting period. Huaguang Investment also fulfilled its share lock-up commitment - Actual controller Jin Limei committed to urging the proposal of profit distribution plans and voting in favor, with company directors making similar commitments[110][111] - Jin Limei committed to avoiding and reducing related-party transactions, ensuring fair dealings, and not using her shareholder position to harm the company or minority shareholders' interests[112][113] - The company committed to prudently formulating and legally implementing share repurchase plans when conditions are met, ensuring no harm to company interests[114] - The company and Jin Limei committed that the prospectus and information disclosure materials are true, accurate, and complete, and will initiate share repurchase procedures and compensate investors for losses if any false statements are found[121][122][123][124] - All company directors, supervisors, and senior management committed to the truthfulness of information disclosure and will bear compensation liabilities[126] - Jin Limei committed that the share reduction price will not be lower than the offering price within 24 months after the lock-up period expires, and will comply with share reduction regulations[127][128] - Tongzhou Investment committed that the number of shares reduced will not exceed its total holdings in the company within 24 months after the lock-up period expires, and will comply with share reduction regulations[129] - Huaguang Investment committed not to change the substantive operating activities of the restructured assets (8.65 million shares of Huaguang New Materials equity) and not to implement share reductions within 12 consecutive months after the share transfer is completed[132] Explanation of Credit Standing During the reporting period, the company, its controlling shareholder, and actual controller maintained a good credit standing, with no adverse records such as unfulfilled court judgments or overdue large debts - During the reporting period, the company, its controlling shareholder, and actual controller maintained a good credit standing[134] - There were no adverse credit records such as unfulfilled effective court judgments or overdue large debts[134] Share Changes and Shareholder Information This section discloses that the company's share capital structure remained unchanged during the reporting period, along with the total number of shareholders, top ten shareholders' holdings, and changes in shareholdings of directors, supervisors, senior management, and core technical personnel Share Capital Changes During the reporting period, the company's total ordinary share capital and share capital structure remained unchanged - During the reporting period, the company's total ordinary share capital and share capital structure remained unchanged[138] Shareholder Information As of the end of the reporting period, the company had 6,068 ordinary shareholders. The top ten shareholders' holdings are disclosed, with Jin Limei holding 36.54% and Hangzhou Huaguang Investment Co., Ltd. holding 9.60% - As of the end of the reporting period, the total number of ordinary shareholders was 6,068[139] Top Ten Shareholders' Holdings as of Report End | Shareholder Name | Period End Holding (shares) | Proportion (%) | Shareholder Nature | | :--- | :--- | :--- | :--- | | Jin Limei | 32,918,000 | 36.54 | Domestic Natural Person | | Hangzhou Huaguang Investment Co., Ltd. | 8,650,000 | 9.60 | Domestic Non-State-Owned Legal Person | | Wang Xiaorong | 4,080,000 | 4.53 | Domestic Natural Person | | Zhang Leilei | 942,029 | 1.05 | Domestic Natural Person | | Hangzhou Tongzhou Investment Management Co., Ltd. | 700,000 | 0.78 | Domestic Non-State-Owned Legal Person | | Lu Xifang | 665,697 | 0.74 | Domestic Natural Person | | Yao Lianrong | 659,699 | 0.73 | Domestic Natural Person | | Wu Yanhui | 566,691 | 0.63 | Domestic Natural Person | | Lu Fuquan | 564,380 | 0.63 | Domestic Natural Person | | China Minsheng Bank Co., Ltd. - Guojin Independent Innovation Mixed Securities Investment Fund | 562,520 | 0.62 | Domestic Non-State-Owned Legal Person | - Among the top ten shareholders is the dedicated repurchase account "Hangzhou Huaguang Welding New Materials Co., Ltd. Repurchase Special Securities Account", holding 2,688,630 ordinary shares, accounting for 2.98% of the total share capital at period-end[142] - Jin Limei holds 90% of Hangzhou Tongzhou Investment Management Co., Ltd. and 35.86% of Hangzhou Huaguang Investment Co., Ltd.; Wang Xiaorong holds 10% of Hangzhou Tongzhou Investment Management Co., Ltd. and 12.60% of Hangzhou Huaguang Investment Co., Ltd[143] Information on Directors, Supervisors, Senior Management, and Core Technical Personnel Discloses changes in shareholdings of core technical personnel Fan Zhonghua and Huang Shisheng during the reporting period, both due to secondary market transactions resulting in a decrease in holdings Changes in Shareholdings of Directors, Supervisors, Senior Management, and Core Technical Personnel | Name | Position | Beginning Holding (shares) | Period End Holding (shares) | Change in Holdings During Reporting Period (shares) | Reason for Change | | :--- | :--- | :--- | :--- | :--- | :--- | | Fan Zhonghua | Core Technical Personnel | 40,000 | 7,500 | -32,500 | Secondary market transactions | | Huang Shisheng | Core Technical Personnel | 55,000 | 41,250 | -13,750 | Secondary market transactions | Bond-Related Information During the reporting period, the company had no corporate bonds (including enterprise bonds) or non-financial enterprise debt financing instruments, nor any convertible corporate bonds - During the reporting period, the company had no corporate bonds (including enterprise bonds) or non-financial enterprise debt financing instruments[148] - During the reporting period, the company had no convertible corporate bonds[148] Financial Report This section includes the company's unaudited consolidated and parent company financial statements, comprising the balance sheet, income statement, cash flow statement, and statement of changes in owners' equity, along with detailed disclosures on the company's basic information, significant accounting policies and estimates, taxation, notes to various financial statement items, and supplementary information related to financial instrument risks, fair value disclosures, related parties and related-party transactions, commitments and contingencies, and post-balance sheet events Audit Report This semi-annual report is unaudited - This semi-annual report is unaudited[4][150] Financial Statements Provides the company's consolidated and parent company balance sheets as of June 30, 2025, consolidated and parent company income statements for January-June 2025, consolidated and parent company cash flow statements, and consolidated and parent company statements of changes in owners' equity - Includes consolidated balance sheet, parent company balance sheet, consolidated income statement, parent company income statement, consolidated cash flow statement, parent company cash flow statement, consolidated statement of changes in owners' equity, and parent company statement of changes in owners' equity[150][154][157][161][164][167][171][178] Company Basic Information Introduces Hangzhou Huaguang Welding New Materials Co., Ltd.'s establishment history, changes in registered capital (due to multiple increases from equity incentive plans), total share capital and share structure, basic organizational structure, and business scope - The company, formerly Hangzhou Huaguang Solder Co., Ltd., was registered on November 19, 1997, and listed on the STAR Market of the Shanghai Stock Exchange on August 19, 2020[185] - As of June 30, 2025, the company's total share capital was 90,085,520.00 shares, with a par value of 1 Yuan per share, all being unrestricted tradable A-shares[189] - Business scope includes manufacturing of non-ferrous metal alloys, electronic special materials, new material technology R&D, and technical services[191] Basis of Financial Statement Preparation The company prepares its financial statements on a going concern basis, in accordance with enterprise accounting standards and relevant regulations of the China Securities Regulatory Commission, and states that there are no significant doubts about the going concern assumption for the 12 months from the end of the reporting period - The company prepares its financial statements on a going concern basis, in accordance with enterprise accounting standards and the China Securities Regulatory Commission's "Reporting Rules for Information Disclosure by Companies Issuing Securities No. 15 - General Provisions for Financial Reports (Revised 2023)"[192] - There are no matters or circumstances that cause significant doubt about the going concern assumption for the 12 months from the end of the reporting period[193] Significant Accounting Policies and Accounting Estimates This section details the company's statement of compliance with enterprise accounting standards, accounting period, operating cycle, functional currency, materiality criteria, business combinations, consolidated financial statement preparation, cash and cash equivalents, foreign currency transactions and translation of foreign currency financial statements, financial instruments, notes receivable, accounts receivable, notes receivable financing, other receivables, inventories, contract assets, long-term equity investments, fixed assets, construction in progress, borrowing costs, intangible assets, impairment of long-term assets, long-term deferred expenses, contract liabilities, employee compensation, share-based payments, revenue, contract costs, government grants, deferred income tax assets/liabilities, leases, and other significant accounting policies and estimates - The company complies with enterprise accounting standards, accurately and completely reflecting its financial position[196] - The accounting year is from January 1 to December 31 of the Gregorian calendar, with the actual reporting period for this report being January 1, 2025, to June 30, 2025[197] - Detailed provisions are made for the classification, recognition, measurement, impairment, and derecognition of financial instruments, including financial assets and liabilities measured at amortized cost, or at fair value with changes recognized in other comprehensive income or current profit/loss[213][214][216][217][218][219][220][221][222][223][224][225][226][227][228][229] - Revenue recognition is based on the transfer of control, categorized into performance obligations satisfied over time and performance obligations satisfied at a point in time, with specific recognition principles differentiated by settlement models (periodic settlement, single-transaction settlement) and domestic/international sales[287][288][289][290] - Government grants are classified as asset-related or income-related, accounted for using the gross method; asset-related grants are recognized as deferred income and amortized to profit/loss over time, while income-related grants are recognized as deferred income or current profit/loss depending on the compensation object[293][294][295][296] - Deferred income tax assets and liabilities are recognized based on temporary differences between the carrying amounts of assets and liabilities and their tax bases, considering the probability of future taxable income[297][298][299][300] Taxation Discloses the company's main tax types and rates, including VAT, property tax, urban maintenance and construction tax, education surcharges, local education surcharges, and corporate income tax. The company benefits from tax incentives for high-tech enterprises, small low-profit enterprises, and advanced manufacturing enterprises Main Tax Types and Rates | Tax Type | Tax Basis | Tax Rate | | :--- | :--- | :--- | | Value-Added Tax (VAT) | Value-added amount generated from sales of goods or provision of taxable services | 13% etc | | Property Tax | For value-based assessment, 1.2% of the remaining value after a one-time deduction of 30% from the original property value; for rent-based assessment, 12% of rental income | 1.2%, 12% | | Urban Maintenance and Construction Tax | Actual amount of turnover tax paid | 7% | | Education Surcharge | Actual amount of turnover tax paid | 3% | | Local Education Surcharge | Actual amount of turnover tax paid | 2% | | Corporate Income Tax | Taxable income | Applicable tax rate as required by tax laws of different countries and regions | Taxable Entities with Different Corporate Income Tax Rates | Taxable Entity Name | Income Tax Rate (%) | | :--- | :--- | | The Company | 15 | | Hangzhou Fujing Welding Technology Co., Ltd. | 20 | | Overseas Subsidiaries | Applicable local tax rate | - As a high-tech enterprise, the company paid corporate income tax at a rate of 15% for January-June 2025[317] - Subsidiary Hangzhou Fujing Welding Technology Co., Ltd. applies the small low-profit enterprise policy, calculating taxable income at 25% and paying corporate income tax at a rate of 20%[317] - The company applies the VAT additional deduction policy for advanced manufacturing enterprises, allowing an additional 5% deduction of current deductible input VAT from payable VAT[318] Notes to Consolidated Financial Statement Items This section provides detailed notes to various asset, liability, owners' equity, revenue, expense, profit, and cash flow items in the consolidated financial statements, including period-end balances, beginning balances, reasons for changes, impairment provisions, impairment tests, and restricted conditions - Cash and bank balances at period-end were 154,729,879.89 Yuan, including 13,912,344.00 Yuan of restricted funds[320][321] - Notes receivable at period-end were 268,230,097.90 Yuan, of which 4,404,638.71 Yuan were pledged, and 135,232,034.90 Yuan were endorsed or discounted but not derecognized[322][324][326] - Accounts receivable at period-end were 552,944,246.96 Yuan, with bad debt provisions of 31,663,167.35 Yuan[334] - Inventory book value at period-end was 815,117,805.61 Yuan, with inventory impairment provisions of 3,913,442.82 Yuan[379] - Construction in progress book value at period-end was 160,119,780.69 Yuan, mainly for the Renhe Phase II project and equipment awaiting installation[401] - Short-term borrowings at period-end were 544,970,094.49 Yuan, and long-term borrowings at period-end were 216,163,894.33 Yuan[422][439] - Operating revenue was 1,206,223,590.12 Yuan, and operating cost was 1,072,761,512.76 Yuan[455] - Net cash flow from operating activities was -119,427,807.23 Yuan[484] R&D Expenses During the reporting period, the company's total R&D investment was 32,598,833.16 Yuan, all expensed, primarily including direct input, personnel costs, depreciation, and amortization R&D Expenses by Nature of Expense | Item | Current Period Amount (Yuan) | Prior Period Amount (Yuan) | | :--- | :--- | :--- | | Direct Input | 20,443,302.60 | 14,831,278.89 | | Personnel Costs | 7,508,217.71 | 6,922,760.29 | | Depreciation and Amortization of Long-Term Expenses | 3,744,154.88 | 3,820,874.86 | | Share-Based Payments | 326,229.99 | 251,523.60 | | Entrusted Development Fees | 155,000.00 | 1,598,490.57 | | Other Expenses | 421,927.98 | 281,680.30 | | Total | 32,598,833.16 | 27,706,608.51 | | Of which: Expensed R&D Investment | 32,598,833.16 | 27,706,608.51 | Changes in Consolidation Scope During the reporting period, the company established four new subsidiaries, including Huaguang (Hong Kong) Holdings Co., Ltd., and included them in the scope of consolidation - During the reporting period, the company established four new subsidiaries, including Huaguang (Hong Kong) Holdings Co., Ltd., and included them in the scope of consolidation[496] Interests in Other Entities Discloses the company's interests in subsidiaries, including wholly-owned subsidiaries like Hangzhou Fujing Welding Technology Co., Ltd. and Fuhui International Trading Co., Ltd., as well as the book value of investment and share of net profit in associate Guangdong Hoer Laser Technology Co., Ltd Composition of the Enterprise Group | Subsidiary Name | Registered Place | Business Nature | Shareholding (%) Direct | Acquisition Method | | :--- | :--- | :--- | :--- | :--- | | Hangzhou Fujing Welding Technology Co., Ltd. | Hangzhou | Commodity Trading | 100.00 | Direct Establishment | | Fuhui International Trading Co., Ltd. | Hong Kong | Commodity Trading | 100.00 | Direct Establishment | | Huaguang (Hong Kong) Holdings Co., Ltd. | Hong Kong | Investment Management | 100.00 | Direct Establishment | Summarized Financial Information of Insignificant Joint Ventures and Associates | Item | Period End Balance/Current Period Amount (Yuan) | Beginning Balance/Prior Period Amount (Yuan) | | :--- | :--- | :--- | | Total Book Value of Investment in Associates | 4,337,287.82 | 4,420,350.75 | | Net Profit of Associates | -83,062.93 | -204,352.63 | Government Grants During the reporting period, government grants in deferred income had a period-end balance of 18,199,796.79 Yuan, with 4,646,900.00 Yuan added in the current period and 2,672,928.29 Yuan transferred to other income. Total government grants recognized in current profit/loss amounted to 5,810,330.85 Yuan Liability Items Involving Government Grants | Financial Statement Item | Beginning Balance (Yuan) | New Grants in Current Period (Yuan) | Transferred to Other Income in Current Period (Yuan) | Period End Balance (Yuan) | Asset/Income Related | | :--- | :--- | :--- | :--- | :--- | :--- | | Government Grants | 16,225,825.08 | 4,646,900.00 | 2,672,928.29 | 18,199,796.79 | Asset-related and Income-related | Government Grants Recognized in Current Profit/Loss | Type | Current Period Amount (Yuan) | Prior Period Amount (Yuan) | | :--- | :--- | :--- | | Asset-related | 1,262,150.78 | 1,015,052.16 | | Income-related | 4,548,180.07 | 1,726,218.97 | | Total | 5,810,330.85 | 2,741,271.13 | Risks Related to Financial Instruments The company faces credit risk, market risk (foreign exchange risk, interest rate risk, other price risks), and liquidity risk. These risks are managed through a risk management framework, policies, and diversified investments, with hedging activities undertaken to manage raw material price fluctuation risks - The company's main financial instrument risks include credit risk, market risk (foreign exchange risk, interest rate risk, other price risks), and liquidity risk[505] - Within market risk, foreign exchange risk primarily arises from financial assets and liabilities denominated in USD, KRW, JPY, EUR, and HKD; interest rate risk is mainly associated with floating-rate borrowings; there are no other price risks[506][507] - Credit risk primarily arises from bank deposits and receivables, managed by assessing debtor creditworthiness, setting credit limits, and regular monitoring[507][509] - Liquidity risk is managed by monitoring cash balances, marketable securities, and cash flow forecasts, and by mitigating cash flow pressure through supplier financing arrangements[512][513] - The company conducts hedging activities, primarily managing the price fluctuation risk of anticipated future silver purchases through commodity futures contracts, applying cash flow hedge accounting[518][519] Analysis of Financial Liabilities and Off-Balance Sheet Guarantees by Undiscounted Remaining Contractual Cash Flow Maturity (Period End) | Item | Within One Year (Yuan) | One to Two Years (Yuan) | Two to Three Years (Yuan) | Over Three Years (Yuan) | Total (Yuan) | | :--- | :--- | :--- | :--- | :--- | :--- | | Short-Term Borrowings | 553,520,741.55 | - | - | - | 553,520,741.55 | | Notes Payable | 368,649,029.59 | - | - | - | 368,649,029.59 | | Accounts Payable | 107,842,023.20 | - | - | - | 107,842,023.20 | | Other Payables | 18,078,086.81 | - | - | - | 18,078,086.81 | | Other Current Liabilities | 13,075,388.47 | - | - | - | 13,075,388.47 | | Long-Term Borrowings (Including Non-Current Liabilities Due Within One Year) | 224,366,494.41 | 172,163,894.33 | 44,000,000.00 | - | 440,530,388.74 | | Total Financial Liabilities and Contingent Liabilities | 1,285,531,764.03 | 172,163,894.33 | 44,000,000.00 | - | 1,501,695,658.36 | - As of June 30, 2025, the company's asset-liability ratio was 57.70% (December 31, 2024: 58.02%)[516] Financial Asset Transfer Status | Transfer Method | Nature of Transferred Financial Assets | Amount of Transferred Financial Assets (Yuan) | Derecognition Status | Basis for Derecognition Judgment | | :--- | :--- | :--- | :--- | :--- | | Endorsement and Discounting | Notes Receivable | 135,232,034.90 | Not Derecognized | Significant credit risk and deferred payment risk, with primary risks and rewards of ownership not transferred | | Endorsement and Discounting | Notes Receivable Financing | 265,645,437.82 | Derecognized | High credit rating, minimal credit risk and deferred payment risk, with primary risks and rewards of ownership transferred | Financial Assets Derecognized Due to Transfer | Item | Method of Financial Asset Transfer | Amount of Derecognized Financial Assets (Yuan) | Gains or Losses Related to Derecognition (Yuan) | | :--- | :--- | :--- | :--- | | Notes Receivable Financing | Endorsement and Discounting | 265,645,437.82 | -482,818.32 | Fair Value Disclosures Discloses the period-end fair values of the company's assets and liabilities measured at fair value, primarily including other equity instrument investments and notes receivable financing. Notes receivable financing uses face value to determine fair value, while other equity instrument investments use investment cost as a reasonable estimate of fair value Period End Fair Value of Assets and Liabilities Measured at Fair Value | Item | Level 1 Fair Value Measurement (Yuan) | Level 2 Fair Value Measurement (Yuan) | Level 3 Fair Value Measurement (Yuan) | Total (Yuan) | | :--- | :--- | :--- | :--- | :--- | | Other Equity Instrument Investments | - | - | 7,000,000.00 | 7,000,000.00 | | Notes Receivable Financing | - | 83,367,867.30 | - | 83,367,867.30 | | Total Assets Continuously Measured at Fair Value | - | 83,367,867.30 | 7,000,000.00 | 90,367,867.30 | - For trading financial assets and liabilities with active market prices, their fair value is determined by the closing price and market value revaluation at the balance sheet date[528] - Notes receivable financing uses its face value to determine fair value due to its short remaining maturity[529] - Other equity instrument investments use their investment cost as a reasonable estimate of fair value because there have been no significant changes in the operating environment or financial condition of the investee[530] - The carrying amounts of financial assets and liabilities not measured at fair value (such as cash and bank balances, notes receivable, borrowings, etc.) differ minimally from their fair values[531] Related Parties and Related-Party Transactions Discloses the company's main subsidiaries, other related parties (e.g., Hangzhou Huaguang Investment Co., Ltd., Wang Xiaorong, Huang Weiqing), and related-party transactions during the reporting period, including purchases of goods, related-party leases, and related-party guarantees Main Subsidiaries of the Company | Subsidiary Name | Registered Capital | Registered Place | Business Nature | Shareholding (%) Direct | Acquisition Method | | :--- | :--- | :--- | :--- | :--- | :--- | | Hangzhou Fujing Welding Technology Co., Ltd. | RMB 3.2 Million | Hangzhou | Commodity Trading | 100.00 | Direct Establishment | | Fuhui International Trading Co., Ltd. | HKD 1 Million | Hong Kong | Commodity Trading |