Core Viewpoint - The company is facing pressure on profitability due to market competition leading to product price declines and changes in customer demand, and it plans to enhance R&D investment and diversify its product offerings to mitigate these risks [1] Group 1: Profitability and Market Conditions - The main factors affecting the company's recent profitability are market competition resulting in product price declines and changes in specific product demand from customers [1] - The company aims to reduce costs and improve efficiency through increased R&D investment and by expanding its proppant and coated sand businesses to counteract the risks associated with declining prices of core products [1] Group 2: Safety and Production Impact - The company has completed rectification work following a safety production accident and has applied for resumption of production according to relevant procedures, acknowledging that the incident has negatively impacted its operations [1] Group 3: Industry Insights - The company notes that suppliers in the proppant industry inherently have weak cost transfer capabilities, which affects their pricing strategies [1] - The company plans to enhance production management and R&D efforts to meet customer demands and improve its ability to respond to price declines in the market [1] Group 4: R&D and Financial Management - The company reported a year-on-year decrease in R&D expenses due to new projects not reaching the pilot stage, but it continues to push for increased investment in new product development [1] - The significant decline in net cash flow from operating activities in the first three quarters is attributed to increased cash payments for procurement, and the company plans to optimize supply chain management to improve cash flow [1] Group 5: Financing and Dividend Policy - The company is actively considering opportunities and plans that are beneficial for its sustainable development, taking into account industry trends and financial conditions [1] - The company emphasizes the importance of a stable dividend policy to enhance investor confidence and improve its corporate image, while evaluating and optimizing its dividend plan based on operational needs and shareholder demands [1] Group 6: Company Overview - The company specializes in the R&D, production, and sales of proppant products, including ceramic proppants and quartz sand proppants, which are primarily used in the extraction of oil and gas from shale formations [1] - Proppants are injected into rock formations during hydraulic fracturing to create and maintain fissures, allowing oil and gas to flow through more efficiently [1]

Group 1: Financial Performance - The company's revenue from fracturing proppants in the first half of 2025 reached 111.02 million yuan, accounting for 21.65% of total revenue, representing a year-on-year growth of 27.57% [2] - The gross profit margin for fracturing proppants is currently at 21.62% [2] Group 2: Oil and Gas Exploration - The company is actively conducting exploration in its oil and gas blocks according to the established exploration plan, with results to be announced as progress is made [2] - As of June 2025, the company has available funds totaling 288.59 million yuan, ensuring that cash flow will not be affected by the exploration investment plan [3] - The oil and gas exploration will not adversely impact the company's main business, as it has accumulated significant experience and expertise in the fracturing proppants sector [3] Group 3: Market Position and Future Plans - The company has recently secured multiple contracts for its quartz sand proppant products, including contracts with major clients such as PetroChina and Sinopec [2] - The company is monitoring developments in emerging industries such as AI and robotics while continuing to strengthen its core business [3]