昇辉科技(300423) - 2020 Q2 - 季度财报

Section I Important Notes, Table of Contents, and Definitions Important Notes The Board of Directors, Supervisory Committee, and senior management guarantee the report's accuracy, while investors should note forward-looking statements and key operational risks, with no interim dividend plan - The Company's Board of Directors, Supervisory Committee, and senior management declare the report's content to be true, accurate, and complete, assuming legal responsibility[3] - The report contains forward-looking statements, where actual results may differ significantly and do not constitute a substantive commitment, requiring investors to be aware of investment risks[4] - Key risks faced by the Company include downstream industry policies and customer concentration, significant accounts receivable balances, goodwill impairment, and large inventory balances[4] - The Company plans not to distribute cash dividends, bonus shares, or convert capital reserves into share capital for this half-year period[5] Table of Contents This section presents the complete report directory, covering all chapters from important notes to financial statements and reference documents for easy navigation - The report's table of contents clearly lists twelve main chapters, including Company Profile, Business Overview, Management Discussion and Analysis, Significant Events, Share Changes and Shareholder Information, and Financial Report[8] Definitions This section defines common terms used in the report, such as company name, reporting period, and controlling shareholder, ensuring consistent understanding Key Definitions | Term | Definition | | :--- | :--- | | CSRC, China Securities Regulatory Commission | China Securities Regulatory Commission | | Company, This Company, Luyitong | Shandong Luyitong Intelligent Electrical Co., Ltd. | | Reporting Period, This Reporting Period | January 1, 2020 to June 30, 2020 | | Prior Period, Same Period Last Year | January 1, 2019 to June 30, 2019 | | Period-end, This Period-end | June 30, 2020 | | Company's Controlling Shareholder, Actual Controller | Ji Faqing | | Weihong Investment | Laiyang Weihong Investment Co., Ltd. | | Shenghui Holdings | Shenghui Holdings Co., Ltd., a wholly-owned subsidiary of the Company | Section II Company Profile and Key Financial Indicators Company Profile This section provides the Company's basic information, including stock ticker, code, listing exchange, Chinese and English names, and legal representative Company Basic Information | Indicator | Content | | :--- | :--- | | Stock Abbreviation | Luyitong | | Stock Code | 300423 | | Stock Exchange Listed On | Shenzhen Stock Exchange | | Company's Chinese Name | Shandong Luyitong Intelligent Electrical Co., Ltd. | | Company's Legal Representative | Ji Faqing | Contact Person and Contact Information This section provides contact details for the Company's Board Secretary and Securities Affairs Representative, including names, addresses, phone numbers, faxes, and email addresses, for investor communication Contact Person and Contact Information | Position | Name | Phone | Email | | :--- | :--- | :--- | :--- | | Board Secretary | Cui Jing | 0535-7962672 | lyt@luyitong.com | | Securities Affairs Representative | Zhang Xiaoyan | 0535-7962877 | lyt@luyitong.com | Other Information During the reporting period, the Company's registered address, office address, website, email, and information disclosure newspapers and designated websites remained unchanged, consistent with the 2019 annual report - The Company's contact information, information disclosure, and document storage locations, as well as registration status, remained unchanged during the reporting period; specific details can be found in the 2019 annual report[15][16][17] Key Accounting Data and Financial Indicators This period, operating revenue grew by 4.02% to RMB 1.904 billion, while net profit attributable to shareholders decreased by 1.33% to RMB 276 million, with significant improvement in operating cash flow Key Accounting Data and Financial Indicators (Year-on-Year Change) | Indicator | This Reporting Period (RMB) | Prior Period (RMB) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Operating Revenue | 1,903,603,351.87 | 1,829,964,054.86 | 4.02% | | Net Profit Attributable to Shareholders | 276,463,073.66 | 280,190,064.55 | -1.33% | | Net Profit Attributable to Shareholders After Deducting Non-recurring Gains and Losses | 272,043,693.19 | 275,674,482.21 | -1.32% | | Net Cash Flow from Operating Activities | 255,123,572.40 | -781,826,164.77 | 132.63% | | Basic Earnings Per Share (RMB/share) | 0.56 | 0.58 | -3.45% | | Diluted Earnings Per Share (RMB/share) | 0.56 | 0.57 | -1.75% | | Weighted Average Return on Net Assets | 7.70% | 9.36% | -1.66% | | Period-end Indicators | This Period-end (RMB) | Prior Year-end (RMB) | Change from Prior Year-end | | Total Assets | 8,135,104,012.23 | 7,841,356,297.06 | 3.75% | | Net Assets Attributable to Shareholders | 3,710,220,675.61 | 3,464,365,317.25 | 7.10% | Differences in Accounting Data Under Domestic and International Accounting Standards The Company had no differences in net profit and net assets between financial reports disclosed under International Accounting Standards or foreign accounting standards and Chinese Accounting Standards during the reporting period - The Company had no differences in net profit and net assets under domestic and international accounting standards during the reporting period[19][20] Non-recurring Gains and Losses Items and Amounts This period, the Company's total non-recurring gains and losses amounted to RMB 4.42 million, primarily from government subsidies and entrusted investment income, net of income tax impact Non-recurring Gains and Losses Items and Amounts | Item | Amount (RMB) | | :--- | :--- | | Gains and Losses from Disposal of Non-current Assets | 8,271.71 | | Government Subsidies Recognized in Current Profit and Loss | 3,541,907.93 | | Gains and Losses from Entrusted Investment or Asset Management | 2,613,021.03 | | Other Non-operating Income and Expenses Apart from the Above | -905,434.89 | | Less: Income Tax Impact | 838,385.31 | | Total | 4,419,380.47 | - The Company had no instances of classifying non-recurring gains and losses as recurring gains and losses during the reporting period[22] Section III Company Business Overview Main Businesses Engaged in by the Company During the Reporting Period The Company's main businesses include electrical equipment, LED lighting, smart communities, and public security, operating on a "make-to-order" model, driven by "new infrastructure" policies and technological advancements, achieving revenue growth despite the pandemic - The Company's main businesses include electrical complete equipment, LED lighting, smart community, and public security, covering the entire chain from R&D, design, procurement, production, sales, to after-sales service[25] - The Company primarily adopts a "make-to-order" business model, providing one-stop配套 services to customers[25][28] - "New infrastructure" policies, LED technology iteration, smart city construction, and the growth of the "AI+security" market are the Company's main performance drivers[29][30] - During the reporting period, the Company overcame the impact of the pandemic, achieving operating revenue of RMB 1.904 billion, a year-on-year increase of 4.02%, and actively promoted informatization construction and R&D innovation[30][31][32] Main Business Scope The Company's core businesses span electrical equipment, LED lighting, smart communities, and public security, offering end-to-end services primarily through a "make-to-order" model - The Company's main businesses include electrical complete equipment, LED lighting, smart community, and public security, possessing a complete business system[25] - The Company primarily adopts a "make-to-order" business model, providing professional, convenient, high-quality, and efficient one-stop supporting services to customers[25] Main Products and Uses The Company offers diverse products, including electrical equipment for industrial and civil use, LED lighting with smart pole integration, smart community solutions, and public security systems, including thermal imaging for epidemic prevention - Electrical complete equipment is divided into industrial use (power, petroleum, metallurgy, rail transit, etc.) and civil use (real estate, municipal engineering, etc.), covering high and low voltage complete equipment and various low voltage three-box products[26] - LED lighting products include landscape, home, light source, office, commercial, and outdoor lighting, with innovative R&D of high-quality products and smart light poles[26][27] - Smart community provides intelligent solutions and products for cities, communities, hotels, commercial buildings, and homes, serving smart city scenarios[27] - Public security business focuses on smart policing and government affairs, launching thermal imaging rapid temperature screening solutions to aid epidemic prevention, and extending to police back-end business platforms, participating in "smart new supervision" construction[28] Business Model The Company operates on a "make-to-order" model, providing comprehensive services from R&D to after-sales based on customer needs, through long-term strategic or project collaborations - The Company has a complete business system and primarily adopts a "make-to-order" business model, with a small number of standardized products produced and sold based on market demand[28] - Through long-term strategic cooperation or project cooperation with customers, the Company provides one-stop services for electrical complete equipment, LED lighting, smart community, and public security businesses[28] Key Performance Drivers Performance growth is driven by industry tailwinds like "new infrastructure" and smart city initiatives, coupled with the Company's proactive pandemic response, revenue growth, enhanced efficiency via ERP, and continuous R&D innovation - "New infrastructure" policies (such as State Grid's RMB 460 billion fixed asset investment) will drive demand growth for electrical equipment[29] - LED lighting products continue to increase market penetration due to technological advancements and cost-effectiveness[29] - Smart community and public security, as important components of smart cities, are supported by national policies and are rapidly expanding, with the security industry market size expected to reach nearly RMB 1 trillion by 2022[30] - The Company actively resumed work and production during the pandemic, achieving operating revenue of RMB 1.904 billion, a year-on-year increase of 4.02%, with operating profit largely flat compared to the prior period[30] - The Company enhanced business response speed and operational efficiency through the implementation of ERP information systems, PLM, and SAP solutions, promoting digital transformation in intelligent manufacturing[31][32] - The Company's R&D platform capabilities continue to improve, with a complete R&D team constantly innovating products to meet market demand[32] Industry Development Stage and Cyclical Characteristics The electrical equipment and LED lighting industries are advancing towards intelligence and energy efficiency, while smart community and public security sectors are upgrading with technology, all within cyclical power and real estate markets requiring strategic adjustments - The intelligent electrical complete equipment manufacturing industry is encouraged by national policies, developing towards intelligence and networking, benefiting from the construction of the ubiquitous power IoT[32] - LED lighting technology, due to its high efficiency, low consumption, safety, and reliability, is set to fully replace traditional lighting products under the promotion of national green lighting projects[33] - The smart community and public security industries, with the development of IoT, big data, cloud computing, and AI technologies, are progressing from intelligent to smart stages, benefiting from the rise of "AI+security"[33][34] - Both the power industry and the real estate industry have cyclical characteristics and are susceptible to macroeconomic policies, requiring the Company to strengthen policy research and market strategy adjustments[34][35] Significant Changes in Major Assets During the reporting period, construction in progress increased due to a wholly-owned subsidiary's office facility upgrade project, with no significant overseas assets Significant Changes in Major Assets | Major Asset | Explanation of Significant Change | | :--- | :--- | | Construction in Progress | Increase in construction in progress due to Shenghui office facility improvement project | - The Company had no major overseas assets during the reporting period[38] Analysis of Core Competitiveness The Company's core competitiveness stems from its comprehensive strategic layout, stable client base, continuous R&D innovation, and strong qualifications and brand reputation, all contributing to enhanced market position - The Company expanded its production capacity by enlarging factory buildings, commissioning the Shenghui Holdings integrated building, and actively introducing intelligent production equipment, while focusing on smart city construction, smart communities, and public security to build basic IoT equipment and ecological platforms[38] - The Company possesses stable, high-quality clients in the power, real estate, petroleum, petrochemical, and metallurgy industries, having accumulated deep client resources and high recognition through efficient service and rapid response[38] - The new integrated building of Shenghui Holdings, including a design R&D center, creative incubation center, and analysis and testing center, has been put into use, continuously enhancing R&D platform capabilities with an R&D team of over 300 people, holding 270 patents and 12 software copyrights[39] - The Company's Shenzhen R&D center officially launched, focusing on cutting-edge application R&D in artificial intelligence, IoT, and big data, accelerating technological innovation and promoting high-quality business growth[39][40] - The Company and its subsidiary Shenghui Holdings are both National High-tech Enterprises, having received numerous industry certifications and honors, such as "Shandong Famous Brand," "Sinopec Class A Supplier," and "Guangdong Top 500 Enterprise," and have established close cooperative relationships with Country Garden, ABB, Schneider, and others[41][42] Section IV Management Discussion and Analysis Overview The Company's core businesses include electrical equipment, LED lighting, smart communities, and public security, achieving RMB 1.904 billion in operating revenue, a 4.02% increase, despite a 1.33% net profit decline, with electrical equipment as the main driver - The Company's main businesses include electrical complete equipment (revenue share 67.52%), LED lighting (revenue share 23.65%), and smart community and public security (revenue share 8.83%)[44] - During the reporting period, the Company overcame the impact of the COVID-19 pandemic, actively resumed work and production, achieving total operating revenue of RMB 1.904 billion, a year-on-year increase of 4.02%[44][45] - Operating profit was RMB 320 million, a year-on-year decrease of 0.42%; total profit was RMB 319 million, a year-on-year decrease of 0.64%; net profit was RMB 276 million, a year-on-year decrease of 1.33%[45] Analysis of Main Business Main business revenue increased by 4.02%, but rising costs led to lower gross profit, while sales and administrative expenses significantly decreased, and operating cash flow improved by 132.63%, with LED lighting and smart community showing strong growth Year-on-Year Changes in Key Financial Data | Indicator | This Reporting Period (RMB) | Prior Period (RMB) | Year-on-Year Change | Reason for Change | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue | 1,903,603,351.87 | 1,829,964,054.86 | 4.02% | Sales increase | | Operating Cost | 1,338,747,329.64 | 1,074,827,753.06 | 24.55% | Decrease in gross profit, increase in cost | | Selling Expenses | 38,591,325.87 | 126,108,122.88 | -69.40% | Decrease in salaries, freight, and advertising expenses | | Administrative Expenses | 55,705,662.54 | 167,779,900.51 | -66.80% | Accrual of excess performance bonuses in prior period | | Financial Expenses | 52,503,581.38 | 37,810,818.65 | 38.86% | Increase in loan interest | | R&D Investment | 55,034,495.93 | 72,978,980.68 | -24.59% | R&D slowed due to pandemic | | Net Cash Flow from Operating Activities | 255,123,572.40 | -781,826,164.77 | 132.63% | Increased collection efforts and maturity of acceptance bills | | Net Cash Flow from Investing Activities | -119,887,449.54 | -71,517,492.39 | -67.63% | Payment for acquisition of Shenghui Holdings | | Net Cash Flow from Financing Activities | 113,271,729.13 | 435,468,014.52 | -73.99% | Improved operating cash flow, eased financing | | Net Increase in Cash and Cash Equivalents | 248,507,851.99 | -417,875,642.64 | 159.47% | More cash on hand due to collections and maturity of acceptance bills | Products or Services Accounting for Over 10% of Revenue | Product or Service | Operating Revenue (RMB) | Operating Cost (RMB) | Gross Profit Margin | Operating Revenue Year-on-Year Change | Operating Cost Year-on-Year Change | Gross Profit Margin Year-on-Year Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | High and Low Voltage Complete Equipment | 1,285,386,342.39 | 955,622,672.06 | 25.65% | -5.65% | 19.23% | -15.51% | | LED Lighting Equipment and Installation | 450,173,686.65 | 278,157,524.27 | 38.21% | 33.65% | 42.09% | -3.67% | | Smart Community | 168,043,322.83 | 104,967,133.31 | 37.54% | 28.47% | 35.30% | -3.15% | | Electrical Machinery and Equipment Manufacturing Industry | 1,887,643,309.90 | 1,335,341,943.05 | 29.26% | 3.59% | 24.91% | -12.08% | | South China Region | 753,687,731.92 | 552,396,535.71 | 26.71% | 52.80% | 74.73% | -9.20% | | East China Region | 546,053,892.07 | 374,129,943.60 | 31.48% | -18.78% | -1.79% | -11.85% | | Central China Region | 225,633,924.71 | 151,560,687.98 | 32.83% | -32.13% | -16.66% | -12.47% | Analysis of Non-Core Business Non-core business primarily includes investment income, asset impairment (bad debt provisions), and non-operating income/expenses, with asset impairment having a higher proportion of total profit, and these items are not sustainable Non-Core Business Analysis | Item | Amount (RMB) | Proportion of Total Profit | Explanation of Formation | Sustainability | | :--- | :--- | :--- | :--- | :--- | | Investment Income | 2,613,021.03 | 0.82% | Wealth management income, etc. | No | | Asset Impairment | 39,456,725.40 | 12.35% | Bad debt provisions | No | | Non-operating Income | 8,822.98 | 0.00% | Other | No | | Non-operating Expenses | 914,257.87 | 0.29% | Donation expenses and others | No | Analysis of Assets and Liabilities Period-end total assets increased by 3.75%, with significant increases in cash and fixed assets, decreases in construction in progress and inventory, and some assets subject to restrictions Significant Changes in Asset Composition | Major Asset | Amount at This Period-end (RMB) | Proportion of Total Assets | Amount at Prior Period-end (RMB) | Proportion of Total Assets | Change in Proportion | | :--- | :--- | :--- | :--- | :--- | :--- | | Cash and Bank Balances | 1,089,309,692.04 | 13.39% | 449,056,369.33 | 6.17% | 7.22% | | Accounts Receivable | 1,584,923,492.65 | 19.48% | 1,365,485,778.56 | 18.77% | 0.71% | | Inventories | 1,093,705,328.99 | 13.44% | 1,383,677,505.11 | 19.02% | -5.58% | | Long-term Equity Investments | 19,768,459.47 | 0.24% | 3,967,085.96 | 0.05% | 0.19% | | Fixed Assets | 468,763,550.82 | 5.76% | 180,964,684.95 | 2.49% | 3.27% | | Construction in Progress | 26,233,026.92 | 0.32% | 97,186,894.16 | 1.34% | -1.02% | | Short-term Borrowings | 1,233,638,549.28 | 15.16% | 985,221,445.80 | 13.54% | 1.62% | | Long-term Borrowings | 153,634,140.62 | 1.89% | 340,000,000.00 | 4.67% | -2.78% | Asset Restrictions | Item | Period-end Carrying Amount (RMB) | Reason for Restriction | | :--- | :--- | :--- | | Cash and Bank Balances | 358,502,882.40 | Bank acceptance bill deposits and others | | Fixed Assets | 12,819,326.94 | Pledged for short-term borrowings | | Intangible Assets | 13,976,672.87 | Pledged for short-term borrowings | | Notes Receivable | 443,906,142.60 | Pledged for short-term borrowings | | Accounts Receivable | 8,238,787.33 | Pledged for short-term borrowings | | Total | 837,443,812.14 | -- | Analysis of Investment Status The Company had no significant equity or non-equity investments, nor fair value financial assets, but utilized RMB 497.36 million in raised funds, exceeding the committed investment for the acquisition of Shenghui Holdings, generating RMB 1.795 billion in cumulative benefits, with RMB 8 million in outstanding wealth management products Overall Utilization of Raised Funds | Indicator | Amount (RMB 10,000) | | :--- | :--- | | Total Raised Funds | 49,222.82 | | Total Raised Funds Invested in Reporting Period | 9,735.70 | | Total Raised Funds Cumulatively Invested | 49,735.70 | | Total Raised Funds with Cumulative Change in Use | 0 | | Proportion of Total Raised Funds with Cumulative Change in Use | 0.00% | - The raised funds were primarily used to pay the cash consideration for the acquisition of 100% equity in Shenghui Holdings, having generated cumulative benefits of RMB 1.795 billion as of the end of the reporting period[63] - The Company's entrusted wealth management transactions amounted to RMB 148 million during the reporting period, with an outstanding balance of RMB 8 million at period-end, all being bank wealth management products with no overdue unrecovered amounts[69] Significant Asset and Equity Sales The Company did not engage in any significant asset or equity sales during the reporting period - The Company did not sell significant assets or equity during the reporting period[71][72] Analysis of Major Holding and Participating Companies The main subsidiary, Shenghui Holdings, with RMB 450 million in registered capital, focuses on electrical equipment, LED lighting, smart communities, and public security, reporting RMB 5.893 billion in total assets, RMB 1.952 billion in net assets, RMB 1.821 billion in revenue, and RMB 267 million in net profit Financial Performance of Major Subsidiary Shenghui Holdings Co., Ltd. | Company Name | Company Type | Main Business | Registered Capital (RMB) | Total Assets (RMB) | Net Assets (RMB) | Operating Revenue (RMB) | Net Profit (RMB) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Shenghui Holdings Co., Ltd. | Subsidiary | High and Low Voltage Complete Equipment, LED Lighting, Smart Community and Public Security | 450,000,000 | 5,892,545,228.13 | 1,952,021,474.67 | 1,820,980,440.24 | 267,408,899.95 | - The Company did not acquire or dispose of any subsidiaries during the reporting period[74] Information on Structured Entities Controlled by the Company The Company had no controlled structured entities during the reporting period - The Company had no controlled structured entities during the reporting period[74] Risks Faced by the Company and Countermeasures The Company faces risks from customer concentration, large accounts receivable, goodwill impairment, and high inventory, addressed by diversifying clients, improving receivables management, expanding financing, and enhancing inventory control - The Company's major customers are concentrated in the real estate industry, facing risks from downstream industry policies and customer concentration, which it is mitigating by expanding to well-known real estate developers like Vanke and Sunac, and increasing penetration into municipal engineering and rail transit projects[74][75] - The Company has a large balance of accounts receivable, primarily from Country Garden, posing cash flow pressure risks; it has implemented strict internal controls, intensified collection efforts, and expanded financing channels, leading to significant improvement in operating cash flow during the reporting period[75][76] - The Company faces goodwill impairment risk, but Shenghui Holdings achieved a net profit of RMB 267 million in the first half, demonstrating good profitability, and no goodwill impairment was recognized at period-end, with the Company leveraging M&A synergies to mitigate risk[76][77] - The Company has a large inventory balance, accounting for 13.44% of total assets, posing liquidity risk; operating primarily on a "make-to-order" model, the inventory balance proportion decreased by 5.58% at period-end, and the Company will continue to strengthen inventory management to improve turnover speed[77] Registration Form for Research, Communication, Interview, and Other Activities During the Reporting Period During the reporting period, the Company hosted four institutional research activities, including phone calls and on-site visits, involving 19 institutions such as CITIC Securities, Guosheng Securities, and Tianhong Asset Management, with discussion content disclosed on Juchao Information Website - The Company hosted four institutional research activities on May 29, June 1, June 16, and June 30, 2020, including phone calls and on-site visits[79] - The participants included a total of 19 institutions such as CITIC Securities, Guosheng Securities, Tianhong Asset Management, Qianhai United, Winlion Investment, Zhengjian Investment, Chunjiang Capital, Leijun Asset, Dunhe Asset, Yuan Cheng Fund, and Wanlian Securities[79] - The main discussion content and provided materials have been disclosed on the Juchao Information Website[79] Section V Significant Events Information on Annual General Meetings and Extraordinary General Meetings Held During the Reporting Period During the reporting period, the Company held its 2020 First Extraordinary General Meeting and 2019 Annual General Meeting, with investor participation rates of 50.00% and 49.99% respectively, and no requests for extraordinary meetings from preferred shareholders Shareholder Meetings During the Reporting Period | Meeting Session | Meeting Type | Investor Participation Rate | Date Held | Disclosure Date | Disclosure Index | | :--- | :--- | :--- | :--- | :--- | :--- | | 2020 First Extraordinary General Meeting | Extraordinary General Meeting | 50.00% | January 16, 2020 | January 16, 2020 | Juchao Information Website | | 2019 Annual General Meeting | Annual General Meeting | 49.99% | May 07, 2020 | May 07, 2020 | Juchao Information Website | - The Company had no preferred shareholders with restored voting rights requesting to convene an extraordinary general meeting[83] Profit Distribution and Capital Reserve Conversion to Share Capital for This Reporting Period The Company plans no cash dividends, bonus shares, or capital reserve conversions to share capital for this half-year period - The Company plans not to distribute cash dividends, bonus shares, or convert capital reserves into share capital for this half-year period[83] Commitments Fulfilled and Overdue Unfulfilled by Actual Controller, Shareholders, Related Parties, Acquirers, and the Company During and as of the End of the Reporting Period During the reporting period, performance commitments and compensation arrangements related to the acquisition of 100% equity in Shenghui Holdings by Li Zhaoqiang and Song Ye were fulfilled, as were share reduction commitments by Ji Faqing and Laiyang Weihong Investment - Li Zhaoqiang and Song Ye's performance commitments and compensation arrangements for Shenghui Electronics for 2017-2019, with a total promised net profit of no less than RMB 655 million, have been fulfilled[84][85][86][87] - Ji Faqing and Laiyang Weihong Investment Co., Ltd.'s commitments to reduce shares within two years after the lock-up period, with a reduction price no lower than the issuance price, have been fulfilled[87] Appointment and Dismissal of Accounting Firms The Company's semi-annual financial report was unaudited, and no accounting firm was appointed or dismissed during the reporting period - The Company's semi-annual report is unaudited[88] Explanation by the Board of Directors and Supervisory Committee on the Accounting Firm's "Non-Standard Audit Report" for This Reporting Period The Company's semi-annual report was unaudited, thus the Board of Directors and Supervisory Committee do not need to provide an explanation for a "non-standard audit report" for this reporting period - The Company's semi-annual report is unaudited, so this explanation is not applicable[89] Explanation by the Board of Directors on the "Non-Standard Audit Report" for the Prior Year The Company had no explanation regarding the "non-standard audit report" for the prior year during the reporting period - The Company had no explanation regarding the "non-standard audit report" for the prior year during the reporting period[89] Bankruptcy and Reorganization Matters The Company had no bankruptcy or reorganization matters during the reporting period - The Company had no bankruptcy or reorganization matters during the reporting period[89] Litigation Matters The Company had no major litigation or arbitration during the reporting period, but other litigation matters totaled RMB 20.99 million, without forming a provision - The Company had no major litigation or arbitration matters during this reporting period[90] Other Litigation Matters | Basic Information on Litigation (Arbitration) | Amount Involved (RMB 10,000) | Whether a Provision is Formed | | :--- | :--- | :--- | | Total Other Litigation | 2,099.33 | No | Media Scrutiny The Company had no widespread media scrutiny during the reporting period - The Company had no widespread media scrutiny during this reporting period[91] Penalties and Rectification The Company had no penalties or rectification matters during the reporting period - The Company had no penalties or rectification matters during the reporting period[92] Integrity Status of the Company, its Controlling Shareholder, and Actual Controller The Company had no issues regarding the integrity status of itself, its controlling shareholder, or its actual controller during the reporting period - The Company had no issues regarding the integrity status of itself, its controlling shareholder, or its actual controller during the reporting period[93] Implementation of Company Equity Incentive Plans, Employee Stock Ownership Plans, or Other Employee Incentive Measures During the reporting period, conditions for the first tranche of the third restricted stock incentive plan and the second tranche of the second restricted stock incentive plan were met, allowing 14 grantees to unlock 1,239,139 restricted shares - The first tranche of the Company's third restricted stock incentive plan met its unlocking conditions, allowing 11 grantees to unlock 912,900 restricted shares, with 851,700 shares actually available for listing and circulation[94] - The second tranche of the Company's second restricted stock incentive plan's reserved grant shares met its unlocking conditions, allowing 3 grantees to unlock 326,239 restricted shares, with 32,624 shares actually available for listing and circulation[95] Significant Related Party Transactions The Company had no related party transactions related to daily operations, asset or equity acquisitions/disposals, joint external investments, or related party debts and credits or other significant related party transactions during the reporting period - The Company had no related party transactions related to daily operations during the reporting period[96] - The Company had no related party transactions involving asset or equity acquisitions or disposals during the reporting period[97] - The Company had no related party debts or credits during the reporting period[99] Significant Contracts and Their Performance The Company had no entrustment, contracting, or leasing matters, but provided several joint liability guarantees for its subsidiary Shenghui Holdings, totaling RMB 1.002 billion at period-end, representing 27.00% of net assets, with no irregular external guarantees or other significant contracts - The Company had no entrustment, contracting, or leasing arrangements during the reporting period[101][102][103] Company Guarantees for Subsidiaries | Guaranteed Party Name | Guaranteed Amount (RMB 10,000) | Actual Guaranteed Amount (RMB 10,000) | Guarantee Type | Guarantee Period | Whether Fulfilled | | :--- | :--- | :--- | :--- | :--- | :--- | | Shenghui Holdings Co., Ltd. | 12,000 | 2,500 | Joint and Several Liability Guarantee | 2019/6/26-2020-6-14 | No | | Shenghui Holdings Co., Ltd. | 16,000 | 8,430 | Joint and Several Liability Guarantee | 2019/2/27-2020/1/27 | Yes | | Shenghui Holdings Co., Ltd. | 18,000 | 8,430 | Joint and Several Liability Guarantee | 2020/5/13-2021/5/12 | No | | Shenghui Holdings Co., Ltd. | 55,000 | 38,000 | Joint and Several Liability Guarantee | 2019/11/7-2020/11/7 | No | | Shenghui Holdings Co., Ltd. | 72,500 | 34,997.65 | Joint and Several Liability Guarantee | 2019/3/29-2020/3/28 | Yes | | Shenghui Holdings Co., Ltd. | 82,500 | 35,000 | Joint and Several Liability Guarantee | 2020/3/23-2022/3/22 | No | | Shenghui Holdings Co., Ltd. | 10,000 | 8,850 | Joint and Several Liability Guarantee | 2019/3/18-2020-3-17 | Yes | | Shenghui Holdings Co., Ltd. | 10,000 | 8,850 | Joint and Several Liability Guarantee | 2020/5/18-2021/5/17 | No | | Shenghui Holdings Co., Ltd. | 5,000 | 4,400 | Joint and Several Liability Guarantee | 2019/7/9-2020/7/9 | No | | Shenghui Holdings Co., Ltd. | 10,000 | 3,000 | Joint and Several Liability Guarantee | 2020/3/1-2021-2-28 | No | | Total Actual Guarantee Balance for Subsidiaries at Period-end | | 100,180 | | | | | Proportion of Total Actual Guarantee to Company's Net Assets | | 27.00% | | | | - The Company had no irregular external guarantees during the reporting period[107] - The Company had no significant contracts related to daily operations or other significant contracts during the reporting period[108][109] Social Responsibility The Company and its subsidiaries are not classified as key polluting entities by environmental protection authorities, and their product manufacturing processes do not involve heavy pollution; the Company prioritizes environmental protection and is ISO14001:2015 certified, ensuring compliance with national emission standards - The Company and its subsidiaries are not classified as key polluting entities by environmental protection authorities, and their product manufacturing processes do not involve heavy pollution[110] - The Company has obtained ISO14001:2015 environmental management system certification, ensuring effective disposal of industrial solid waste and compliance with national environmental standards for all pollutant emissions[110] Explanation of Other Significant Matters The Company had no other significant matters requiring explanation during the reporting period - The Company had no other significant matters requiring explanation during the reporting period[111] Significant Matters of Company Subsidiaries The Company had no significant matters concerning its subsidiaries during the reporting period - The Company had no significant matters concerning its subsidiaries during the reporting period[112] Section VI Share Changes and Shareholder Information Share Change Information During the reporting period, total shares remained unchanged, but restricted shares decreased by 9,411,442, with a corresponding increase in unrestricted shares, primarily due to executive transfer quota changes and restricted stock unlocks, without significant financial impact Share Change Information (shares) | Item | Quantity Before This Change | Proportion Before This Change | Increase/Decrease in This Change (Subtotal) | Quantity After This Change | Proportion After This Change | | :--- | :--- | :--- | :--- | :--- | :--- | | I. Restricted Shares | 252,084,626 | 50.49% | -9,411,442 | 242,673,184 | 48.60% | | II. Unrestricted Shares | 247,223,564 | 49.51% | 9,411,442 | 256,635,006 | 51.40% | | III. Total Shares | 499,308,190 | 100.00% | 0 | 499,308,190 | 100.00% | - Share changes were primarily due to changes in the transferable quotas for directors, supervisors, and senior management, as well as the unlocking of the Company's third and second restricted stock incentive plans[115][116][117] - All share changes have been registered with the Shenzhen Branch of China Securities Depository and Clearing Corporation Limited[118] - The share changes had no significant impact on basic and diluted earnings per share, or net assets per common share attributable to the Company's common shareholders for the most recent year and period[118] Restricted Share Change Information (shares) | Shareholder Name | Restricted Shares at Period Start | Restricted Shares Released This Period | Restricted Shares Increased This Period | Restricted Shares at Period End | Reason for Restriction | | :--- | :--- | :--- | :--- | :--- | :--- | | Ji Faqing | 100,128,340 | 7,488,943 | 0 | 92,639,397 | Executive Lock-up Shares | | Li Zhaoqiang | 114,362,999 | 0 | 0 | 114,362,999 | Post-IPO Restricted Shares, Executive Lock-up Shares | | Song Ye | 22,561,502 | 0 | 0 | 22,561,502 | Post-IPO Restricted Shares | | CHANG PENG | 1,615,000 | 484,500 | 0 | 1,130,500 | Equity Incentive Restricted Shares | | Total | 252,084,626 | 9,411,442 | 0 | 242,673,184 | -- | Securities Issuance and Listing Information The Company had no securities issuance or listing during the reporting period - The Company had no securities issuance or listing during the reporting period[121] Number of Shareholders and Shareholding Information At period-end, there were 12,913 common shareholders, with Ji Faqing as the controlling shareholder and actual controller, holding 29.77% directly and indirectly, and the top three shareholders being Ji Faqing, Li Zhaoqiang, and Laiyang Weihong Investment, with some shares pledged - The total number of common shareholders at the end of the reporting period was 12,913[122] Shareholding Information of Common Shareholders Holding 5% or More or Top 10 Shareholders | Shareholder Name | Shareholder Nature | Shareholding Proportion | Number of Shares Held at Period-end (shares) | Number of Restricted Shares Held (shares) | Number of Unrestricted Shares Held (shares) | Pledge or Freeze Status (number) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Ji Faqing | Domestic Natural Person | 24.74% | 123,519,196 | 92,639,397 | 30,879,799 | Pledged 79,429,900 | | Li Zhaoqiang | Domestic Natural Person | 23.07% | 115,194,849 | 114,362,999 | 831,850 | Pledged 111,860,000 | | Laiyang Weihong Investment Co., Ltd. | Domestic Non-state-owned Legal Person | 5.03% | 25,106,075 | 0 | 25,106,075 | Pledged 10,570,000 | | Song Ye | Domestic Natural Person | 4.52% | 22,561,502 | 22,561,502 | 0 | | | Ningbo Jundu Shangzuo Equity Investment Partnership (Limited Partnership) | Domestic Non-state-owned Legal Person | 4.40% | 21,982,253 | 0 | 21,982,253 | | - Ji Faqing and Laiyang Weihong Investment Co., Ltd. are parties acting in concert[123] Changes in Controlling Shareholder or Actual Controller The Company's controlling shareholder and actual controller remained unchanged during the reporting period - The Company's controlling shareholder remained unchanged during the reporting period[125] - The Company's actual controller remained unchanged during the reporting period[125] Section VII Preferred Shares Preferred Shares Information The Company had no preferred shares during the reporting period - The Company had no preferred shares during the reporting period[127] Section VIII Convertible Corporate Bonds Convertible Corporate Bonds Information The Company had no convertible corporate bonds during the reporting period - The Company had no convertible corporate bonds during the reporting period[130] Section IX Information on Directors, Supervisors, and Senior Management Changes in Shareholdings of Directors, Supervisors, and Senior Management During the reporting period, the total shareholdings of the Company's directors, supervisors, and senior management slightly decreased, mainly due to reductions by He Zhibo and Wei Chunmei, with some executives holding restricted shares and changes in the number of restricted shares granted at period-end Changes in Shareholdings of Directors, Supervisors, and Senior Management (shares) | Name | Position | Shares Held at Period Start | Shares Reduced This Period | Shares Held at Period End | Number of Restricted Shares Granted at Period End | | :--- | :--- | :--- | :--- | :--- | :--- | | Ji Faqing | Chairman | 123,519,196 | 0 | 123,519,196 | 0 | | Li Zhaoqiang | Director, President | 115,194,849 | 0 | 115,194,849 | 0 | | Liu Yunpeng | Director, General Manager | 3,699,045 | 0 | 3,699,045 | 521,983 | | Cui Jing | Director, Board Secretary, Deputy General Manager | 1,898,233 | 0 | 1,898,233 | 440,422 | | Zhang Yi | Director, Financial Controller | 1,224,000 | 0 | 1,224,000 | 856,800 | | He Zhibo | Deputy General Manager | 992,593 | 99,031 | 893,562 | 81,561 | | Wei Chunmei | Deputy General Manager | 1,135,765 | 4,600 | 1,131,165 | 81,561 | | Xu Kefeng | Deputy General Manager | 456,156 | 0 | 456,156 | 81,561 | | Total | -- | 248,689,203 | 103,631 | 248,585,572 | 2,063,888 | Changes in Company Directors, Supervisors, and Senior Management The Company's directors, supervisors, and senior management remained unchanged during the reporting period, with specific details available in the 2019 annual report - The Company's directors, supervisors, and senior management remained unchanged during the reporting period; specific details can be found in the 2019 annual report[134] Section X Corporate Bonds Corporate Bonds Information The Company had no corporate bonds publicly issued and listed on a stock exchange that were not due or not fully redeemed as of the approval date of the semi-annual report - The Company had no corporate bonds publicly issued and listed on a stock exchange that were not due or not fully redeemed as of the approval date of the semi-annual report[136] Section XI Financial Report Audit Report The Company's semi-annual financial report is unaudited - The Company's semi-annual financial report is unaudited[138] Financial Statements This section presents the Company's 2020 semi-annual consolidated and parent company balance sheets, income statements, cash flow statements, and statements of changes in equity, providing a comprehensive view of financial performance - The consolidated balance sheet shows period-end cash and bank balances of RMB 1.089 billion, notes receivable of RMB 2.054 billion, accounts receivable of RMB 1.585 billion, inventories of RMB 1.094 billion, and total assets of RMB 8.135 billion[140] - The consolidated income statement shows semi-annual total operating revenue of RMB 1.904 billion, net profit of RMB 276 million, and basic earnings per share of RMB 0.56[148][150] - The consolidated cash flow statement shows net cash flow from operating activities of RMB 255 million, net cash flow from investing activities of -RMB 120 million, and net cash flow from financing activities of RMB 113 million[155][157] Consolidated Balance Sheet As of June 30, 2020, consolidated total assets were RMB 8.135 billion, a 3.75% increase from year-end, with total liabilities of RMB 4.425 billion and total owner's equity of RMB 3.710 billion Key Consolidated Balance Sheet Data (June 30, 2020) | Item | June 30, 2020 (RMB) | December 31, 2019 (RMB) | | :--- | :--- | :--- | | Cash and Bank Balances | 1,089,309,692.04 | 790,991,954.75 | | Notes Receivable | 2,053,862,974.43 | 2,291,037,188.81 | | Accounts Receivable | 1,584,923,492.65 | 1,107,237,853.21 | | Inventories | 1,093,705,328.99 | 1,390,796,653.11 | | Total Assets | 8,135,104,012.23 | 7,841,356,297.06 | | Short-term Borrowings | 1,233,638,549.28 | 964,586,519.12 | | Accounts Payable | 1,304,302,588.66 | 1,063,058,329.37 | | Total Liabilities | 4,424,883,336.62 | 4,376,990,979.81 | | Total Equity Attributable to Parent Company Owners | 3,710,220,675.61 | 3,464,365,317.25 | Parent Company Balance Sheet As of June 30, 2020, parent company total assets were RMB 3.217 billion, a 7.64% decrease from year-end, with total liabilities of RMB 558 million and total owner's equity of RMB 2.658 billion Key Parent Company Balance Sheet Data (June 30, 2020) | Item | June 30, 2020 (RMB) | December 31, 2019 (RMB) | | :--- | :--- | :--- | | Cash and Bank Balances | 149,032,751.70 | 239,417,317.06 | | Accounts Receivable | 293,053,274.84 | 452,806,121.99 | | Long-term Equity Investments | 2,415,919,435.20 | 2,412,293,100.00 | | Total Assets | 3,216,737,017.34 | 3,482,662,016.10 | | Short-term Borrowings | 232,506,967.92 | 218,520,894.06 | | Total Liabilities | 558,312,935.59 | 927,921,482.65 | | Total Owner's Equity | 2,658,424,081.75 | 2,554,740,533.45 | Consolidated Income Statement For the first half of 2020, consolidated total operating revenue was RMB 1.904 billion, up 4.02%, with operating profit of RMB 320 million, net profit of RMB 276 million, and basic EPS of RMB 0.56, while sales and administrative expenses significantly decreased Key Consolidated Income Statement Data (First Half of 2020) | Item | First Half of 2020 (RMB) | First Half of 2019 (RMB) | | :--- | :--- | :--- | | Total Operating Revenue | 1,903,603,351.87 | 1,829,964,054.86 | | Total Operating Costs | 1,549,997,144.23 | 1,490,115,665.47 | | Selling Expenses | 38,591,325.87 | 126,108,122.88 | | Administrative Expenses | 55,705,662.54 | 167,779,900.51 | | Financial Expenses | 52,503,581.38 | 37,810,818.65 | | Operating Profit | 320,312,682.91 | 321,663,850.83 | | Net Profit | 276,463,073.66 | 280,190,064.55 | | Basic Earnings Per Share | 0.56 | 0.58 | Parent Company Income Statement For the first half of 2020, parent company operating revenue was RMB 250 million, a 33.17% decrease, while net profit increased by 61.90% to RMB 134 million, driven by significant investment income growth and reduced operating expenses Key Parent Company Income Statement Data (First Half of 2020) | Item | First Half of 2020 (RMB) | First Half of 2019 (RMB) | | :--- | :--- | :--- | | Operating Revenue | 250,352,308.15 | 374,608,134.90 | | Operating Cost | 209,762,706.07 | 317,970,395.06 | | Selling Expenses | 5,618,007.58 | 8,818,671.27 | | Administrative Expenses | 10,426,817.09 | 13,748,064.91 | | R&D Expenses | 7,095,038.26 | 14,266,333.61 | | Investment Income | 126,904,500.00 | 71,765,067.61 | | Net Profit | 134,291,263.60 | 82,956,907.89 | | Basic Earnings Per Share | 0.27 | 0.17 | Consolidated Cash Flow Statement For the first half of 2020, net cash flow from operating activities significantly increased by 132.63% to RMB 255 million, with increased investing outflows and decreased financing outflows, resulting in a period-end cash and cash equivalents balance of RMB 731 million Key Consolidated Cash Flow Statement Data (First Half of 2020) | Item | First Half of 2020 (RMB) | First Half of 2019 (RMB) | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 255,123,572.40 | -781,826,164.77 | | Net Cash Flow from Investing Activities | -119,887,449.54 | -71,517,492.39 | | Net Cash Flow from Financing Activities | 113,271,729.13 | 435,468,014.52 | | Net Increase in Cash and Cash Equivalents | 248,507,851.99 | -417,875,642.64 | | Period-end Cash and Cash Equivalents Balance | 730,806,809.64 | 184,807,045.41 | Parent Company Cash Flow Statement For the first half of 2020, parent company net cash flow from operating activities turned positive to RMB 37.74 million, with net cash flow from investing activities at RMB 36.91 million, and financing activities at -RMB 36.83 million, resulting in a period-end cash and cash equivalents balance of RMB 92.08 million Key Parent Company Cash Flow Statement Data (First Half of 2020) | Item | First Half of 2020 (RMB) | First Half of 2019 (RMB) | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 37,773,660.53 | -114,738,685.00 | | Net Cash Flow from Investing Activities | 36,908,936.32 | -131,687,482.30 | | Net Cash Flow from Financing Activities | -36,829,708.69 | 73,006,302.86 | | Net Increase in Cash and Cash Equivalents | 37,852,888.16 | -173,419,864.44 | | Period-end Cash and Cash Equivalents Balance | 92,075,101.67 | 24,362,363.91 | Consolidated Statement of Changes in Owner's Equity For the first half of 2020, consolidated owner's equity increased by RMB 246 million, primarily due to RMB 276 million in net profit attributable to parent company owners, RMB 3.97 million from share-based payments, and RMB 44.94 million in distributed dividends - Total comprehensive income attributable to parent company owners for this period was RMB 276,463,073.66[163] - Owner contributions and capital reductions increased owner's equity by RMB 14,330,021.80 this period, including RMB 3,971,735.20 from share-based payments recognized in owner's equity[163] - Profit distribution reduced owner's equity by RMB 44,937,737.10 this period[163] - Total equity attributable to parent company owners at period-end was RMB 3,710,220,675.61[164] Parent Company Statement of Changes in Owner's Equity For the first half of 2020, parent company owner's equity increased by RMB 104 million, primarily from RMB 134 million in net profit and RMB 3.97 million from share-based payments, offset by RMB 44.94 million in distributed dividends - Total comprehensive income of the parent company for this period was RMB 134,291,263.60[171] - Owner contributions and capital reductions increased owner's equity by RMB 14,330,021.80 this period, including RMB 3,971,735.20 from share-based payments recognized in owner's equity[171] - Profit distribution reduced owner's equity by RMB 44,937,737.10 this period[171] - Total owner's equity of the parent company at period-end was RMB 2,658,424,081.75[172] Company Basic Information Shandong Luyitong Intelligent Electrical Co., Ltd., established on December 11, 2003, with RMB 499 million in registered capital, listed on the Shenzhen Stock Exchange in 2015, primarily manufactures electrical machinery and equipment, and consolidates seven operating entities including Shenghui Holdings - The Company was established on December 11, 2003, with a registered capital of RMB 499,308,190.00, and its shares were listed on the Shenzhen Stock Exchange on February 17, 2015[176] - The Company's main business is the manufacturing of electrical machinery and equipment, with a business scope including R&D, production, sales of electrical equipment, power supply equipment, components, transmission and distribution and control equipment, and import/export business[176] - As of the end of the reporting period, the Company has included seven operating entities, including Shenghui Holdings Co., Ltd., in its consolidated scope[177] Basis of Financial Statement Preparation The Company's financial statements are prepared on a going concern basis, with no events or circumstances raising significant doubt about its ability to continue as a going concern for the next 12 months from the end of the reporting period - The Company's financial statements are prepared on a going concern basis[178] - The Company has no events or circumstances that would raise significant doubt about its ability to continue as a going concern for the next 12 months from the end of the reporting period[179] Significant Accounting Policies and Estimates This section details the Company's accounting policies and estimates for financial instrument impairment, fixed asset depreciation, intangible asset amortization, and revenue recognition, affirming compliance with accounting standards, with the new revenue standard adopted without prior period adjustments - The Company's financial statements comply with enterprise accounting standards, accurately and completely reflecting financial position, operating results, and cash flows[181] - In business c