Core Viewpoint - The company reported a slight increase in revenue but faced significant losses in net profit due to various factors, indicating challenges in the current market environment and operational adjustments. Financial Performance - In the first half of 2025, the company achieved revenue of 247 million yuan, a year-on-year increase of 3.89% [1][2] - The net profit attributable to shareholders was -12.75 million yuan, compared to a profit of 0.50 million yuan in the same period last year [1][2] - The net profit after deducting non-recurring gains and losses was -17.11 million yuan, a decrease of 128.76% year-on-year [2] - The basic earnings per share were -0.14 yuan [1] Product Performance - Revenue from energy-saving aluminum-clad wooden windows was 168 million yuan, a year-on-year decrease of 9.41% [2] - Revenue from aluminum alloy windows was 53.74 million yuan, an increase of 31.16% year-on-year [2] - Revenue from new plastic windows was 4.69 million yuan, with a gross margin of -9.27% [2] Business Model and Market Strategy - The dealer model generated sales revenue of 116 million yuan, a slight increase of 0.03% year-on-year, with a gross margin of 18.69% [2] - The bulk business model achieved sales revenue of 123 million yuan, a year-on-year increase of 7.95%, with a gross margin of 28.49% [2] - The company is in a channel transformation period, which has affected the growth rate of the dealer model [2] Cost and Expenses - The main business cost was 183 million yuan, a year-on-year increase of 0.58%, contributing to an increase in gross margin [3] - Selling and administrative expenses increased by 16.49% and 13.22% respectively, putting pressure on profitability [3] Market Expansion - The company is expanding its overseas market presence, establishing a dedicated overseas division and developing localized products [3] - The company has completed various international product certifications and is focusing on markets in the United States, Canada, and Australia [3] - In the U.S., the company has established a distribution network in several cities and is collaborating with local builders and designers [3]

Core Viewpoint - The company has adjusted the performance assessment targets for its 2023 restricted stock incentive plan to ensure its smooth implementation and to motivate the participants effectively [2][10][14]. Summary by Sections Incentive Plan Overview - The 2023 restricted stock incentive plan involves granting 1.8 million shares, accounting for 2.32% of the company's total share capital of 94.8 million shares [2][3]. - The plan is designed for middle management and core business personnel, excluding directors, senior management, and significant shareholders [3][5]. Performance Assessment Adjustments - The performance assessment targets for the company level in 2025 have been adjusted based on actual operating conditions [2][10]. - The original target for 2023 was set at 1.02 billion yuan, with a trigger value of 930 million yuan [9][10]. - The adjusted targets will now consider revenue growth rates compared to 2024, enhancing the scientific and rational basis of the performance goals [11][12]. Market Conditions - The company faces external challenges such as a downturn in the real estate market, leading to reduced demand in the mid-to-high-end window retail sector [10][11]. - The overall retail sales of building and decoration materials have declined by 3.85% year-on-year, reflecting a broader market contraction [10]. Internal Strategy - The company aims to transition from bulk business channels to retail channels, which is crucial for its growth strategy [11][12]. - The adjustments in the incentive plan are intended to stimulate employee motivation and align with the company's strategic goals [12][14]. Compliance and Approval - The adjustments have been reviewed and approved by the board of directors and the supervisory board, ensuring compliance with relevant regulations [13][15]. - Legal opinions confirm that the adjustments do not harm the interests of the company or its shareholders [14][15].

Market Position and Competition - The aluminum-clad wooden window industry has a low concentration with a CR5 of less than 2%, and the company's market share is only 0.3% [2] - The company has established strong competitive barriers through core technology, production processes, and a nationwide sales network [3] - The company's products have a higher retail price compared to competitors due to superior performance in thermal transmittance, air tightness, and water tightness [3] Financial Performance - In 2024, revenue from energy-saving aluminum-clad wooden windows decreased by 51.53% to 383 million yuan, with a gross margin decline of 14.32 percentage points [4] - The overall revenue for 2024 dropped by 39.71% to 567 million yuan, and the net profit turned to a loss of 42.19 million yuan [13] - The company's cash flow improved, with operating cash flow turning positive at 10.36 million yuan in Q1 2025 [8] Product Development and Innovation - The company has developed a range of passive building products, with nearly 20 products certified by Germany's PHI [3] - New product lines, including pure plastic windows and aluminum-clad plastic windows, are being developed to target the renovation market [9] - The company plans to enhance its digital transformation and supply chain management through the implementation of MES systems [5] Strategic Initiatives - The company aims to increase its overseas revenue share to 20%-25% by 2028, focusing on markets like North America and Australia [7] - A strategy to expand terminal store layouts and improve single-store output is being implemented [10] - The company is adjusting its traditional bulk business scale, reducing its proportion from 60% to 50% in 2024 [10] Risk Management - The company emphasizes strengthening accounts receivable management, especially in light of extended payment cycles from real estate clients [14] - A cautious approach to bad debt provisions is maintained, with 100% provisions for receivables over three years old [14] Shareholder Returns - The company plans to maintain a cash dividend of no less than 30% of distributable profits, but due to losses in 2024, cash dividends are not feasible [15]