WPG(SH:603956)2021-08-26 16:00Financial Performance - The company's operating revenue for the first half of 2021 was approximately ¥445.68 million, representing a 42.68% increase compared to ¥312.36 million in the same period last year[23]. - The net profit attributable to shareholders for the first half of 2021 was approximately ¥70.22 million, a significant increase of 168.46% from ¥26.16 million in the previous year[23]. - The net profit attributable to shareholders after deducting non-recurring gains and losses was approximately ¥58.55 million, reflecting a 187.54% increase from ¥20.36 million year-on-year[23]. - Basic earnings per share increased by 183.33% to CNY 0.17 compared to the same period last year[24]. - Diluted earnings per share rose by 166.67% to CNY 0.16 year-over-year[24]. - The confirmed order amount as of June 30, 2021, was RMB 626,056,900, an increase of 31.81% compared to the same period last year[61]. - The company reported a significant increase in sales to 8,761.07 RMB in the current period compared to 426,548.68 RMB in the previous period for transactions with Qujing Kangyuan Water Co., Ltd.[137]. Cash Flow and Assets - The net cash flow from operating activities was negative at approximately -¥99.55 million, compared to -¥69.34 million in the same period last year[23]. - Cash and cash equivalents decreased by 34.13% to ¥455,712,839.10, accounting for 22.95% of total assets, primarily due to increased cash outflows from normal business operations and share repurchases for equity incentives[72]. - The total assets at the end of the reporting period were approximately ¥1.99 billion, a decrease of 10.74% from ¥2.22 billion at the end of the previous year[23]. - The total liabilities decreased to ¥777,473,430.71 from ¥903,836,136.81, resulting in a reduction of the debt ratio from 40.63% to 39.16%[172]. - The ending cash and cash equivalents balance was ¥421,021,891.66, compared to ¥157,947,275.17 at the end of the previous year[188]. Research and Development - Research and development expenses increased by 43.72% to RMB 37,741,500.07 due to heightened investment in R&D[70]. - The company has developed a range of smart water supply products, including pressure boosting stations and water quality analyzers[30]. - The company has been developing its smart water solutions since 2014, focusing on industrial internet concepts and expanding its software and hardware offerings[57]. Market and Industry Trends - The smart water industry in China is benefiting from the macroeconomic development, with GDP surpassing 100 trillion yuan in 2020, marking a significant enhancement in national strength and economic power[53]. - The government has implemented a series of policies to support the development of the smart water industry, including the "Water Pollution Prevention Action Plan" aiming for overall improvement in water quality by 2030[54]. - The market is evolving towards scale, standardization, and high-quality services, leading to increased market concentration and the elimination of non-compliant companies[57]. Corporate Governance and Shareholder Relations - The company has not disclosed any plans for profit distribution or capital reserve transfer to increase share capital during this reporting period[7]. - The company emphasizes environmental responsibility, with no major pollution sources identified and compliance with environmental standards confirmed by third-party testing[96]. - The company has committed to optimizing its governance structure and ensuring compliance with relevant laws to protect the interests of minority shareholders[117]. - The company held multiple shareholder meetings in 2021, approving various proposals including amendments to the Articles of Association and share repurchase plans[91]. Risks and Challenges - The company faces operational risks due to industry volatility, particularly influenced by urbanization progress and economic cycles, which may affect demand for smart water solutions[82]. - Increased competition in the urban and rural water supply industry poses a risk, as the market has a low concentration with many participants, necessitating continuous innovation to maintain competitiveness[82]. - The company is exposed to raw material price fluctuations, including stainless steel and electrical components, which can impact operational costs[82]. Investments and Future Plans - The company plans to invest a total of ¥2 billion in a smart water supply production and R&D base in the Su-Xi-Tong Industrial Park, with the project being implemented in two phases[75]. - The company plans to raise RMB 1.3 billion through a non-public offering of shares for the smart water supply and drainage production R&D base project[66]. - The company plans to expand its product offerings to include large prefabricated water plants, containerized integrated water plants, smart dosing systems, and rural drinking water pump stations[141].