Guangdong Dongfang Precision Science & Technology Co., Ltd.
Semi-Annual Report 2024
【Date of Disclosure】26 July 2024
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Part I Important Notes, Table of Contents and DefinitionsThe Board of Directors (or the “Board”), the Supervisory Committee as well as thedirectors, supervisors and senior management of Guangdong Dongfang Precision Science &Technology Co., Ltd. (hereinafter referred to as the “Company”) hereby guarantee that thecontents of this Report are true, accurate and complete and free of any misrepresentations,misleading statements, or material omissions, and collectively and individually accept legalresponsibility for such contents.Tang Zhuolin, the Company’s legal representative, Shao Yongfeng, the Company’s ChiefFinancial Officer, and Chen Nan, the Head of the Company’s Accounting Department(equivalent to Financial Manager) hereby guarantee that the financial statements carried inthis Report are truthful, accurate and complete.All directors of the Company attended in person the board meeting for the approval of thisReport.For possible risks with respect to the Company, please refer to “X Risks Faced by theCompany and Countermeasures” of “Part III Management Discussion and Analysis” herein.And investors are kindly advised to read through the aforesaid contents.The Company has no semi-annual dividend plan, either in the form of cash or stock.
Special DeclarationThis Report has been prepared in Chinese and translated into English. Should there beany discrepancies or misunderstandings between the two versions, the Chinese version shallprevail.
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Table of Contents
Part I Important Notes, Table of Contents and Definitions ...... 2
Part II Corporate Information and Key Financial Information ...... 7
Part III Management Discussion and Analysis ...... 10
Part IV Corporate Governance ...... 67
Part V Environmental and Social Responsibilities ...... 70
Part VI Significant Events ...... 72
Part VII Share Changes and Shareholder Information ...... 78
Part VIII Preference Shares ...... 86
Part IX Corporate Bonds ...... 87
Part X Corporate Financial Statements ...... 88
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Documents Available for Reference
1. The financial statements signed and sealed by the Company’s legal representative, Chief Financial Officer,and the person-in-charge of the financial organ.
2. All the originals of the Company’s announcements and documents that were disclosed to the public duringthe Reporting Period on the media designated by the CSRC for information disclosure.
3. The 2024 Semi-Annual Report carrying the signature of the legal representative.
4. The documents above are lodged in the Securities Department of the Company, 18A, China Merchants Plaza,1166 Wanghai Road, Shekou, Shuiwan Community, Zhaoshang Street, Nanshan District, Shenzhen City,Guangdong Province, China.
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Definitions
| Term | Definition |
| Dongfang Precision, or the “Company” | Guangdong Dongfang Precision Science & Technology Co., Ltd., and its consolidated subsidiaries, except where the context otherwise requires |
| Dongfang Precision (China) | The corrugated box packaging machinery division of Guangdong Dongfang Precision Science & Technology Co., Ltd. |
| Fosber Italy | Fosber S.p.A. |
| Fosber Asia | Guangdong Fosber Intelligent Equipment Co., Ltd. |
| Fosber America | Fosber America, Inc. |
| Fosber Tianjin | Fosber Machinery (Tianjin) Co., Ltd |
| Fosber Group | The business group including subsidiaries Fosber Italy, Fosber America, Qcorr, Tiru?a Group, etc. |
| Tiru?a Group | Tiru?a Slu |
| Tiru?a America | Tiru?a America Inc. |
| Tiru?a Asia | Tiru?a (Guangdong) Intelligent Equipment Manufacturing Co., Ltd |
| QCorr | QuantumCorrugated S.r.l. |
| Dongfang Precision (Europe)/EDF | EDF Europe S.r.l. |
| Dongfang Precision (Netherland) | Dong Fang Precision (Netherland) Cooperatief U.A. |
| Dongfang Precision (HK) | Dong Fang Precision (HK) Limited |
| Wonder Digital | Shenzhen Wonder Digital Technology Co., Ltd. |
| Parsun Power | Suzhou Parsun Power Machine Co., Ltd. |
| Suzhou Jinquan | Suzhou High-Tech Zone Jinquan Business Management Partnership (Limited Partnership) |
| Shunyi Investment | Suzhou Shunyi Investment Co., Ltd. |
| Jaten Robot | Guangdong Jaten Robot & Automation Co., Ltd. |
| Yineng Investment | Hainan Yineng Investment Co., Ltd. |
| Yineng International | Dongfang Yineng International Holding Co., Ltd. |
| Dongfang Digicom | Dongfang Digicom Technology Co., Ltd. |
| Dongfang Digicom (Guangdong) | Dongfang Digicom Technology (Guangdong) Co., Ltd. |
| Corrugated cardboard | Corrugated cardboard is a multi-layer paper-bonding object composed of at least one sandwich layer of wavy medium (commonly known as "corrugated paper", "corrugated medium paper", "corrugated paper medium" and "corrugated base paper") and one layer of cardboard (also known as "liner board"). |
| Corrugated box | Corrugated box is a rigid paper container made of corrugated boards through |
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| die cutting, indenting, nailing, or gluing. Corrugated box is one of the most widely used packaging containers in modern business and trade. | |
| Corrugated box printing and packaging production line equipment | Corrugated box printing and packaging production line equipment include corrugated box printing and packaging line and stand-alone products that integrates pre-feeding, printing, grooving, die cutting, forming and packaging functions in whole or in part, which is highly functionally integrated, highly automated and highly technical, can save the capital and manpower investment, reduce workers' workload and improve the production efficiency of box manufacturers, and requires equipment manufacturers to be highly competent in design, technological innovation, assembly and finishing of parts. |
| Corrugated cardboard production lines | A corrugated cardboard production line has two independent process sections as the wet section and the dry section. The wet section, composed of the base paper stand, auto splicer, preheat pre-regulator, single-face corrugator, feeding bridge, glue machine and double facer, is used to make corrugated based paper into three-layer, five-layer, and seven-layer corrugated boards of different corrugated combinations. The dry section, composed of the rotary shear, slitter indenter, cut-off knife and stacker, is used to slit, indent, cut off and stack corrugated boards as ordered. Corrugated cardboard production lines are key production equipment for corrugated board and box manufacturers. |
| Pre-printing and post-printing intelligent automatic packaging machinery | Pre-printing and post-printing intelligent automatic packaging machinery refers to equipment that is compatible with the corrugated box printing line or stand-alone products and can provide functions related to pre-printing and post-printing processes of corrugated box printing and packaging. It includes the pre-feeder, stripper conveyor, intelligent stacker, and folder gluer. |
| Outboard motors | Outboard motors are a kind of detachable power units that are mounted on the stern plate of a boat to drive the boat to sail. |
| General utility small gasoline motors | General utility small gasoline motors are a kind of thermo-dynamic machinery of 20kW power or less with a wide range of applicability. It is characterized by small size, light weight, and easy operation, and is usually used as a power engine for a variety of terminal products. By the structure of engine and principle of work, general utility small gasoline motors can be divided into two-stroke general utility small gasoline motors and four-stroke general utility small gasoline motors. |
| CSRC | China Securities Regulatory Commission |
| SZSE, or the “Stock Exchange” | Shenzhen Stock Exchange |
| RMB yuan, RMB’0,000 | Expressed in the Chinese currency of Renminbi, expressed in tens of thousands of Renminbi |
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| The “Reporting Period” or “Current Period” | The period from 1 January 2024 to 30 June 2024 |
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Part II Corporate Information and Key Financial Information
I Corporate Information
| Stock name | Dongfang Precision | Stock code | 002611 |
| Stock exchange | Shenzhen Stock Exchange | ||
| Company name in Chinese | 广东东方精工科技股份有限公司 | ||
| Abbr. | 东方精工 | ||
| Company name in English (if any) | Guangdong Dongfang Precision Science & Technology Co., Ltd | ||
| Abbr. (if any) | Dongfang Precision | ||
| Legal representative | Tang Zhuolin | ||
II Contact Information
| Board Secretary | Securities Representative | |
| Name | Feng Jia | Zhu Hongyu |
| Office address | 18A, China Merchants Plaza, 1166 Wanghai Road, Shekou, Shuiwan Community, Zhaoshang Street, Nanshan District, Shenzhen City, Guangdong Province, China | 18A, China Merchants Plaza, 1166 Wanghai Road, Shekou, Shuiwan Community, Zhaoshang Street, Nanshan District, Shenzhen City, Guangdong Province, China |
| Tel. | 0755-36889712 | 0755-36889712 |
| Fax | 0755-36889822 | 0755-36889822 |
| Email address | ir@vmtdf.com | ir@vmtdf.com |
III Other Information
1. Contact information of the company
Whether the company's registered address, company office address and its postal code, company website and e-mail address havechanged during the reporting period.
□ Applicable ? Not applicable
The company's registered address, company office address and its postal code, the company's website and e-mail address remainunchanged during the reporting period, which can be found in the 2023 Annual report.
2. Information disclosure and location.
Whether the information disclosure and location have changed during the reporting period.
□ Applicable ? Not applicable
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The name and address of the stock exchange website and media where the Company discloses its half-yearly report and the placewhere the Company's half-yearly report has been filed has not changed during the reporting period, which can be found in the AnnualReport 2023.
3. Other relevant information
Whether other relevant information has changed in the reporting period
□ Applicable √ Not applicable
IV Key Financial InformationIndicate whether there is any retrospectively restated datum in the table below.
□ Yes √ No
| 2024H1 | 2023H1 | change (%) | |
| Operating revenue (RMB yuan) | 2,161,188,907.40 | 2,082,606,453.72 | 3.77% |
| Net profit attributable to the listed company’s shareholders (RMB yuan) | 163,880,472.14 | 206,149,605.30 | -20.50% |
| Net profit attributable to the listed company’s shareholders before exceptional gains and losses (RMB yuan) | 229,107,701.04 | 162,525,892.40 | 40.97% |
| Net cash generated from/used in operating activities (RMB yuan) | 118,570,463.65 | 191,436,066.52 | -38.06% |
| Basic earnings per share (RMB yuan /share) | 0.14 | 0.17 | -17.65% |
| Diluted earnings per share (RMB yuan /share) | 0.14 | 0.17 | -17.65% |
| Weighted average return on equity (%) | 3.58% | 4.95% | -1.37% |
| 30 June 2024 | 30 June 2023 | Change (%) | |
| Total assets (RMB yuan) | 7,338,935,842.58 | 7,538,222,570.02 | -2.64% |
| Equity attributable to the listed company’s shareholders (RMB yuan) | 4,648,163,194.08 | 4,511,690,693.97 | 3.02% |
V Accounting Data Differences under China’s Accounting Standards for Business Enterprises(CAS) and International Financial Reporting Standards (IFRS) and Foreign AccountingStandards
1. Net Profit and Equity under CAS and IFRS
□ Applicable ? Not applicable
No difference for the Reporting Period.
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2. Net Profit and Equity under CAS and Foreign Accounting Standards
□ Applicable ? Not applicable
No difference for the Reporting Period.
VI Exceptional Gains and Losses
? Applicable □ Not applicable
Unit: RMB yuan
| Item | 2024H1 | Note |
| Gain or loss on disposal of non-current assets (inclusive of impairment allowance write-offs) | 5,092,274.31 | |
| Government subsidies included in current profit and loss (excluding those closely related to the company’s normal business operations, in compliance with national policies, enjoyed according to specified standards, and having a continuous impact on the company’s profit and loss) | 10,323,357.51 | |
| Gains and losses from changes in the fair value of financial assets and financial liabilities held by non-financial enterprises, as well as gains and losses from the disposal of financial assets and financial liabilities, excluding effective hedging related to the company’s normal business operations | -90,655,088.24 | |
| Reversal of provision for impairment of accounts receivables individually tested for impairment | 7,396.90 | |
| Non-operating income and expenses other than the above | 552,141.85 | |
| Minus: Income tax effects | -10,195,770.51 | |
| Non-controlling interests effects (net of tax) | 743,081.74 | |
| Total | -65,227,228.90 | -- |
Details of other profit and loss items that meet the definition of non-recurring profit or loss.
□ Applicable ? Not applicable
No such cases in the Reporting Period.
Explanation of why the Company reclassifies as recurrent an exceptional gain/loss item defined or listed in the ExplanatoryAnnouncement No. 1 on Information Disclosure for Companies Offering Their Securities to the Public—Exceptional Gain/LossItems:
□ Applicable ? Not applicable
No such cases in the Reporting Period.
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Part III Management Discussion and AnalysisWith “intelligent equipment manufacturing” as its primary strategic focus, Dongfang Precision concentrateson the manufacturing of high-end intelligent equipment. Its principal operations include “intelligent packagingequipment” and “water powersports equipment”. The “intelligent packaging equipment business” consists of smartcorrugated packaging equipment, digital printers, and industrial Internet industry solutions. Dongfang Precisionaccounts for approximately 15% of the global corrugated packaging equipment market, ranking first amongdomestic enterprises of the same type and Top 2 in the global market.
The company has the capability to flexibly customize intelligent, efficient, and integrated production lineequipment for customers. Leveraging its capabilities in industrial Internet industry solutions and its advancementsin the field of artificial intelligence, the company is upgrading from intelligent equipment manufacturing to high-quality digital and intelligent development, achieving a comprehensive breakthrough in its “digital and intelligent”strategy. In the marine power equipment sector, Parsun Power’s outboard motor products have ranked first in thedomestic industry for three consecutive years (2020-2022). In 2021 and 2023, Parsun Power successfully mass-produced 115-horsepower and 130-horsepower gasoline outboard motors, breaking the long-term monopoly ofAmerican and Japanese brands in this power segment. In March 2024, Parsun Power officially released the 300-horsepower gasoline outboard motor at the Shanghai International Boat Show, marking a full entry of domesticoutboard motors into the global high-end mainstream market.During the reporting period, the company achieved a total operating revenue of approximately 2.161 billionyuan, a year-on-year increase of 3.77%. The net profit attributable to shareholders of the listed company, afterdeducting non-recurring gains and losses, was approximately 229 million yuan, a year-on-year increase of 40.97%.The gross profit margin was 32.07%, a year-on-year increase of 2.78 percentage points. The asset-liability ratio was
33.32%, a year-on-year decrease of 6.62 percentage points. The core main business of the company, the intelligentpackaging equipment sector, achieved a total operating revenue of 1.783 billion yuan, a year-on-year increase of
6.88%, and the gross profit margin increased by 3.95 percentage points year-on-year, further enhancing theprofitability of the sector while the scale grew. Additionally, the company’s digital printing business released thenew WONDER INNO PRO SINGLE PASS industrial high-definition color digital printer. For the first time, thisdevice achieved the application of high-speed digital inkjet printing technology with a baseline printing accuracyof 1800 NPI in the field of industrial-grade paper packaging printing. This provides the color printing packagingfield with a high-definition color digital printing device that can achieve an effect comparable to offset printingthrough digital printing technology. The company’s industrial Internet business launched new products and modulessuch as “InterLink”, “Micro Mes”, and “Equipment After-sales Service Management System”. These have beenprioritized for use in improving the company’s internal various brands and specifications of corrugated box printingand packaging complete line products. They will also help customers in the corrugated paper packaging andcomposite paperboard industries to improve the intelligence and digitization of a large number of existingproduction line equipment, empowering “digital manufacturing.”
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The company’s consistent “1+N” development strategy and “industry-based + capital wings” developmentpath fully utilize the brand platform advantages of listed companies and deep integration and strategic controlcapabilities. The company continuously enriches and improves its industrial layout under the “intelligent equipmentmanufacturing” strategy through the external incubation of intelligent equipment enterprises with technologyinnovation as the core, high technical barriers, and good development prospects. Subsidiaries/holding subsidiariesunder the company, such as the Fosber brand series companies, Tiru?a brand series companies, Parsun Power,Wonder Digital, Dongfang Digicom, etc., have been fully integrated into the development system of listedcompanies, becoming an important part of the company’s main business and profit contribution. Additionally, thecompany’s invested and held companies, such as Jaten Robot, Ruoyu Technology, Nanjing Profeta, etc., have showngood development momentum in the fields of robotics, artificial intelligence, 3D printing, etc., laying the foundationfor the company to expand the application fields of the “intelligent equipment manufacturing” strategy andexpanding the group’s industrial space.I Principal Operations of the Company in the Reporting Period(I) Industries in which the Company principally operatesAccording to the Classification of Strategic Emerging Industries (2018) and the Industrial Classification forNational Economic Activities (GB/T 4754-2017), the industries in which the Company principally operates areshown below:
The Company’s Principal Business Divisions and Their Industries
| Strategic emerging industry | Industry | Principal business division | Primary products and their applications |
| Intelligent manufacturing equipment | Specialized equipment manufacturing | Smart corrugated packaging equipment | 1. Corrugated cardboard production lines: The corrugated cardboard production lines are used for the production of corrugated cardboards of different specifications, are the core machinery for corrugated packaging production, and are widely used by medium and large enterprises (cardboard plants) that produce corrugated cardboards in the corrugated packaging industry. 2. Corrugated box printing and packaging production line equipment: The corrugated box printing and packaging production line equipment is used to produce and process corrugated cardboards into corrugated boxes of different specifications and is the back-end machinery of the corrugated cardboard production lines. Of the machinery, the printing unit is the core machinery, of which the peripheral equipment units includes the paper feeder unit, slotting and die cutter unit, stripper transfer unit, FFG and stitching unit, and the counting and palletizer unit. The corrugated box printing and packaging production line equipment is widely used by various enterprises (box plants) that produce corrugated boxes in the corrugated packaging industry. |
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| Strategic emerging industry | Industry | Principal business division | Primary products and their applications |
| Digital printers | Wonder Digital, one of the subsidiaries controlled by Dongfang Precision, is a leading supplier of digital printers in China. It is committed to providing digital printers for industries such as paper packaging (colour printing & pre-printing), advertising, home decoration, building materials, and label printing. | ||
| Industrial Internet and supporting services | Software and information services | Industrial Internet industry solutions | Build the Industrial Internet Platform for industry, provide end-to-end solutions and operational services that range from intelligent machinery, integrated management of production and operations of enterprises, intelligent business decision-making, to agile corporate reforms and innovation for corporate customers from more than the paper packaging industry, and promote the step-by-step digital transformation of the business with a focus on essentials such as “connecting + data processing and modeling + data intelligence applications”. |
| Manufacturing of ship auxiliary equipment | Railway, shipping, aviation and other transport equipment manufacturing industries | Water powersports equipment | Outboard motors are a kind of detachable power units that are mounted on the stern plate of a boat to drive the boat to sail and can be applied to boats shorter than 24m in inland rivers, lakes, and coastal waters. They are widely used in water recreation, fishing, water traffic, emergency rescue, shore landing and maritime patrol. |
(II) Industry overview
1. The Industries to which the Company's Intelligent Packaging Equipment Business Segment Belongs
1.1 Demand side—customers
The intelligent packaging equipment division of the Company specializes in “smart corrugated packagingequipment” and “digital printers”. This division primarily serves B-end customers such as corrugated cardboard andcorrugated box manufacturers. As a machinery supplier, the Company provides various single machine andcomplete production line products for cardboard and box production, which makes the Company depend on thedevelopment of the downstream paper packaging industry to some extent.End demand for corrugated packaging is growing: The corrugated box field is one of the major fields ofthe paper packaging industry, of which the end demand is relevant to the prosperity of consumption and business
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activities. Corrugated packaging products are used in a vast number of fields, including food and beverage,household chemicals, electronic products, and e-commerce express delivery, and are inelastically demanded byconsumers. Corrugated packaging applications in electronics, beverages, food, household chemicals and expressdelivery accounted for 26%, 21%, 20%, 13% and 13% of the overall applications of corrugated packaging indownstream sectors, respectively.Over the past few years, the scale of China’s express corrugated packaging market has been on the rise. By theforecast of Qianzhan Industry Research Institute, the scale of China’s express corrugated packaging market willcontinue to rise in the upcoming years and is estimated to reach RMB86.4 billion by 2025 (CAGR for 2019 to 2025:
Approximately 15%). Terminal markets, including the express, electronics, and household chemicals terminalmarkets, show an increasing demand for corrugated box and board packaging, which will drive the expansion of thecapacity of corrugated packaging enterprises and thus increase the demand for corrugated packaging machinery,benefiting the machinery manufacturers.Between 2017 and 2023, the domestic express business recorded rapid growth, with a compound annual growthrate (CAGR) of approximately 27%. Data from the State Post Bureau showed that the total volume of domesticexpress delivery for 2023 was 162.48 billion pieces, up 16.8% year-on-year.
Trend of China's Express Business Volume Above Scale, 2016-2023
According to the “June 2024 China Express Development Index Report” and related statistical data releasedby the State Post Bureau in July 2024, China’s express market maintained a rapid development trend in the first halfof 2024, supporting the prosperity of the online economy and adding momentum to economic and socialdevelopment. In the first half of the year, the cumulative volume of express business in the domestic market was
80.16 billion pieces, a year-on-year increase of 23.1%, and the cumulative express business revenue was 653 billionyuan, a year-on-year increase of 15.1%. Since March 2024, the monthly business increment has exceeded 2 billionpieces. Especially during the “May Day” holiday (May 1st-5th) and the Dragon Boat Festival holiday (June 8th-10th), the average daily express business volume increased by 32.7% and 25.6% year-on-year, respectively. Lookingforward to the second half of the year, the fundamentals supporting the continued development of the domesticexpress industry will not change. There are still many favorable factors to promote industry growth. Policy dividendswill continue to be effective, and policy documents issued by various regions and departments to expand domestic
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demand and promote the rapid growth of new consumption will continue to exert force in the second half of theyear. With the improvement of industry service quality and supply capacity, express services will reach morecountries and regions, link more industries and enterprises, better meet more personalized and customized deliveryneeds, and the industry is expected to gain more market increments.
The steady growth of the express industry scale continues to have a positive impact on the development of thedomestic corrugated paper packaging industry. According to statistics, in 2023, the new production capacity ofdomestic corrugated paper and boxboard paper was 7.67 million tons, and the eliminated production capacity was
3.19 million tons, achieving a net new production capacity of 4.48 million tons. It is expected that there will still beabout 6.6 million tons of new production capacity in 2024.
Guided by the “large-scale equipment renewal” policy, a swift acceleration in equipment upgrades isanticipated within the domestic corrugated packaging sector.
In February 2024, the Central Financial and Economic Affairs Commission held its fourth meeting to promotea new round of large-scale equipment renewal and consumer goods trade-in, explicitly mentioning the need to“promote the renewal and technological transformation of various types of production equipment and serviceequipment”. On March 1, the State Council executive meeting considered and passed the Issuing the Action Planfor Promoting Large-scale Equipment Renewals and Consumer Goods Trade-ins, proposing to “promote theproportion of advanced production capacity to continue to increase”.
Over the years, China's corrugated packaging sector has largely consisted of numerous small- and medium-sized box manufacturers dominated by low-end production capacities, leading to a highly decentralized market andrelatively low industry consolidation. Responding to the Party Central Committee and State Council's “large-scaleequipment renewal” policy directive, the corrugated packaging industry anticipates a heightened pace of equipmentmodernization throughout the 14th Five-Year Plan period, with an expected surge in medium- to high-endproduction capacity proportions.
With the continuous development of the downstream end consumption industry in China, the requirements ofcorporate customers for corrugated boxes gradually increase. In the corrugated packaging industry, marketconcentration and the phase-out of low-end production capacity is an inevitable trend, due to market competition,capacity upgrading, M&A, etc. It is estimated that the line machinery that is more intelligent and productive willreplace the existing corrugated cardboard production lines and corrugated box printing and packaging productionline equipment in the upcoming five to ten years. By statistics, there are over 6,000 existing corrugated cardboardproduction lines in the domestic market, and more corrugated box printing and packaging machinery.
According to estimates, the overall market share of the domestic industry of the 15 listed corrugated paperpackaging companies in China increased from 5.7% in 2017 to 10.9% in 2023. Statistics from the China PackagingFederation show that in 2023, there were 2,991 enterprises above designated size in the national paper andpaperboard container manufacturing industry, a decrease of 164 from 2022, indicating a decrease in the number ofenterprises above designated size. The above data shows that the concentration of the domestic corrugated paperpackaging industry is continuously improving. In addition, the China Packaging Federation report shows that thedomestic paper packaging industry achieved a profit of 10.867 billion yuan in 2023, a year-on-year increase of
35.65%, of which the industry achieved a profit of 6.879 billion yuan in the second half of 2023, with a significant
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year-on-year increase in profits in the second half of 2023, and the trend of profit concentration towards leadingenterprises is obvious.
Digital and intelligent upgrading of the paper packaging and printing industry bring new developmentopportunities. The traditional production mode has caused domestic paper packaging and printing enterprises tobe overly dependent on skilled technicians at critical positions and slow to identify the outdated management mode.The “strategy of robot assembling line” and “smart factory” are increasingly recognized by the industry. Amidintelligent manufacturing, the paper packaging and printing industry will usher in industrial upgrading andtransformation. Additionally, leading packaging enterprises, including Xiamen Hexing Packaging Printing Co., Ltd.(HXPP), MYS Group Co. Ltd. (MYS), Shenzhen YUTO Packaging Technology Co., Ltd., and Shenzhen JinjiaGroup Co., Ltd., have pushed ahead with Internet-based development in recent years by entering into intelligentmanufacturing, cloud printing, or other markets, expected to launch a revolution in the Internet-based developmentof the paper packaging and printing industry and injecting new impetus into industry integration. Concurrently, amidintelligent manufacturing and Internet-based packaging, leading enterprises engaged in corrugated packagingmachinery are also expected to embrace new development opportunities.Overseas demand is relatively steadily: In recent years when environmental pollution becomes more andmore serious, growing environmental awareness has led to “plastic bans and restrictions” across the world,providing a major boost to paper as an alternative to plastic. England announced a ban on single-use plastics startingOctober 2023, covering items like disposable plastic plates, trays, bowls and utensils. France is phasing in bans onsingle-use plastic packaging for around 30 fruits and vegetables starting January 2022. The U.S. Department of theInterior announced that single-use plastics will be gradually phased out in national parks and other public lands by2032. The global green packaging market is projected to grow from USD262.27 billion in 2023 to USD381.98billion in 2028, with a compound annual growth rate of 7.81% during the forecast period (2023-2028).
The corrugated cardboard produced by corrugated cardboard production lines is used to make variouscorrugated boxes, corrugated cartons and other corrugated packaging materials, which are rigid consumer productsin European and American countries. According to Statista data, the US e-commerce market is expected to grow ata compound annual growth rate of 12.7% from 2017 to 2027. The philosophy of “sustainability” is gaining groundin the European and US consumer goods packaging markets. With the growing trend of "replacing plastics withpaper" in the packaging industry, demand for corrugated packaging materials in the European and US consumergoods markets continues to grow steadily, helping to drive demand for corrugated packaging production lineequipment.
1.2 Supply side——the Company’s presence in the industry
A． World-leading comprehensive strength
Corrugated cardboard production lines: Major manufacturers of corrugated cardboard production lines aroundthe world include Fosber Group（Business entities under the company）, BHS (Germany), Marquip (a wholly-owned subsidiary of the American Barry-Wehmiller), and J.S. Machine. Among them, Fosber Group and its majorrival from Germany, BHS, lead the others and are leaders in the global middle- and high-end corrugated cardboardproduction line field. Fosber Group holds approximately 30% of the global middle- and high-end corrugatedcardboard production line market and more than 50% of the North American market.
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Corrugated & pressure rollers, key components of corrugated cardboard production lines: The subsidiaryTiru?a Group has more than 40 years of experience in the corrugated and pressure roller segment and is renownedin Europe as a world-leading specialist in this segment.Corrugated box printing and packaging production line equipment: Major manufacturers in this field includeDongfang Precision, Bobst (Switzerland), Gopfert (Germany), Ward (a wholly-owned subsidiary of the AmericanBarry-Wehmiller), Ding Long (Shanghai), and Guangzhou Keshenglong. Dongfang Precision is an industry leaderin China and is competitive with the global industry leader, Bobst, from Switzerland. With an advantage in globalresource coordination, leading design concept, excellent overall R&D strength, and a product system featuringcomplete categories and rich specifications, the Company can produce products that meet dozens of specificationsand different market positioning, covering fixed/open-close type, top printing/bottom printing, and completeproduction line (inline) products/single machine, and has the completest product lines and richest product base ofthe corrugated box printing and packaging production line equipment worldwide.
Digital printers: Major manufacturers include HP, EFI, Koenig & Bauer Durst, Wonder Digital, HanhuaGongye, and Atexco, among others. Wonder Digital, a majority-owned subsidiary of Dongfang Precision, has beenspecializing in the development and manufacturing of digital printers for 13 years, and is a leader in the domesticdigital printer industry. It takes the lead among global suppliers of digital printers in applying high-speed inkjetprinting technology to corrugated packaging and is committed to extending digital printing technology to such fieldsas paper packaging (colour printing & pre-printing), advertising, home furnishing, building materials, and labelprinting.
In conclusion, Dongfang Precision leads the world in terms of its comprehensive strength in smart corrugatedpackaging equipment business and can provide downstream customers such as cardboard plants and box plants with“one-stop” machinery and service support that covers each production process, including corrugated cardboardproduction, corrugated box production, and pre-printing and post-printing production processes, and differenttechnology roadmaps, including flexographic printing and digital printing.
The value of the global corrugated packaging equipment market is estimated to be about RMB30-40billion. In terms of operating revenue, Dongfang Precision accounts for approximately 15% of the globalcorrugated packaging equipment market, ranking first among domestic enterprises of the same type and Top2 in the global market.
B. The rapid development of digital printing brings more development opportunities for the industry.
According to the latest report The Future of Inkjet Printing to 2027 by Smithers Pira, the market value of inkjetprinting in graphic printing and package printing globally reached USD86.8 billion in 2022. The inkjet printingmarket has grown strongly over the past 5 years. Total inkjet printing output in 2022 was 46.2% higher comparedto 2017, with printed volume growing by over two-thirds. The report forecasts that growth of inkjet printing inpackaging will be most rapid from 2022 to 2027, with expected compound annual growth rates of 17.7% byshipment quantity and 16.3% by value. Digital printing is expected to increase its market share in corrugatedpackaging printing from 4% in 2022 to 9% in 2027, with high potential for growth of digital printing in thecorrugated packaging industry.
The main competitive edges of the digital printing technology of Wonder Digital, a majority-owned subsidiary
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of Dongfang Precision, are as follows:
(1) Advanced technology and a wide range of products
Digital printing adopts inkjet printing technology. It can be divided into UV printing (including colour printing& pre-printing, with printing effects close to colour offset printing) and water-based ink printing (including colourprinting & pre-printing, with water-based dye/pigment inks, etc.) in terms of the ink type and printing effects. In2024, Wonder Digital released the new WONDER INNO PRO SINGLE PASS industrial high-definition colordigital printer, with a baseline printing accuracy of up to 1800 NPI, achieving a revolution from color printing tohigh-definition color printing in the field of paper packaging printing with domestic digital printing technology.This provides the color printing packaging field with a high-definition color digital printing device that can achievean effect comparable to offset printing through digital printing technology.
(2) Integrated digital solutions that feature human-machine interaction and an integrated system
Wonder Digital’s digital printers feature high levels of system integration and human-machine interaction inproduct design and technical implementation. Compared to traditional package printers, they are more user-friendlyand easier-to-operate. Wonder Digital’s digital printers can be operated after simple training, with just one personneeded to operate a multi-pass digital printer and two to run a single-pass inline for mass production.
(3) Convenient, flexible and efficient
Digital printing enjoys an absolute advantage in small and medium batches of printing and urgent printingneeds as it saves tedious processes, such as platemaking, imposition, and colour calibration. It enables electronicdocuments generated via typesetting software, design software, and office applications to be directly output to digitalprinters. Moreover, digital printing enables one-sheet, flexible printing, which cannot be done by traditional printing.
Additionally, digital printing enables a more flexible printing method that is, modifying while printing, andvice versa, enabling “zero stock”. Such a flexible and quick printing method has strengthened the competitivenessof customers in a competitive environment where every minute counts. With regard to pattern design, platemakingin traditional printing is not required in digital printing, allowing more freedom for design and enabling designersto give full play to their professionalism and tailor products to customers’ needs.
2. The industry to which the company's industrial Internet industry solutions business belongs
According to the Classification of Strategic Emerging Industries (2018), Dongfang Precision’s “industrialInternet industry solutions” business division falls under the “industrial Internet and supporting services” industry.
Policy side: The Guiding Opinions of the State Council on Deepening the “Internet plus AdvancedManufacturing” and Developing the Industrial Internet released by the State Council in 2017 marked China’s officialentry into digital development from information-based development in terms of industries. “Accelerate thedevelopment of the industrial Internet” was proposed for the first time in the report on government work in 2018and became a frequent visitor in the reports on government work for the next five years. In 2020, the NationalDevelopment and Reform Commission stated that, as one of the new network infrastructure types, the industrialInternet is a part of the new infrastructure. Under the guidance of a range of policies, the industrial Internet andsmart factory have become the strategic development orientation of the transformation and upgrading of China’smanufacturing.
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Market side: China is the only country in the world whose industries cover all industrial categories in theUnited Nations’ industrial classification. Concurrently, it is expected to grow into the world’s largest industrialdigitalization market. For the current manufacturing industry of China, digital transformation is no longer an “option”but a “compulsory course” that is critical to its survival and long-term development.As the manufacturing sector enters a “digital and intelligent” era, an increasing number of manufacturingenterprises have realized that buying production equipment, enterprise resource planning (ERP) systems, ormanufacturing executive systems (MES) cannot meet the systematic requirements of intelligent manufacturing. Bycontrast, industrial Internet platforms can systematically resolve all critical issues that cannot be handled throughtraditional means. According to the Bluebook on the Digital Transformation of Enterprises--Empowering the Low-carbon and Green Transformation of the Real Economy with New IT released by the China Academy of Informationand Communications Technology, after relevant manufacturing enterprises complete digital transformation, onaverage, their production efficiency will be boosted by 37.6%, their operating expenses will be lowered by 21.2%,and their energy utilisation rate will be improved by 16.1%. Concurrently, with the rapid development andcontinuous iteration of the new-generation information technology, the cost of digital transformation of enterprisesis gradually decreasing, and more and more industrial enterprises will implement industrial Internet-based digitaltransformation.According to the data released by Frost & Sullivan, the scale of the market of industrial Internet platforms andrelevant solutions in China by 2025 is estimated to reach RMB193.12 billion. Between 2021 and 2025, the CAGRof the market of industrial Internet platforms and relevant solutions in China is approximately 45.3%.
The Scale of the Market of Industrial Internet Platforms and Relevant Solutions and Forecast between 2020 and 2025
Supply side:According to the White Paper on the Economic Development of the Industrial Internet Industryin China (2022), participants in the construction of industrial Internet platforms in China are diversified. Leadingmanufacturing enterprises, information and communications enterprises, and Internet-based enterprises buildindustrial Internet platforms in different dimensions and from different perspectives based on their own comparative
| RMB'00 million |
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advantages, enabling China’s industrial Internet industry to enjoy industrial enterprises, ICT enterprises, and Internetenterprises at the same time.The key technologies and industries that the industrial Internet involves are extensive and complex and canhardly be fully covered by enterprises. Thus, developing the industrial Internet by relying on industrialmanufacturing enterprises becomes a typical development path of industrial Internet enterprises, such as Root Cloud,Midea Cloud, and Baosight. In the packaging field, major manufacturers that provide industrial Internet-relatedproducts and solutions services include Yunyin, Dongfang Digicom, and Shanghai Wantit.The subsidiary Dongfang Digicom, carrying Dongfang Precision’s missions of expanding into the industrialInternet industry and implementing “digital and intelligent transformation strategies”, was established in 2020. Withthe vision “to become a world-leading provider of industrial Internet industry solutions”, Dongfang Digicom isengaged in building industrial Internet platforms for industries using new-generation information technologies, suchas the IoT, cloud computing, big data, and artificial intelligence to facilitate digital and intelligent upgrading.
3. The Industries to which the company's water power products segment belongs
3.1 Demand side——customers
The outboard motors are the subsidiary Parsun Power’s main water powersports products. The company’smarine power product business segment falls within the outboard motor industry, a subdivision of the shipsupporting equipment industry. Outboard motors are the key auxiliary equipment for small- and medium-sized shipsand are characterized by their compact structures, light weights, convenient installation and maintenance, easyoperations, and low noise. They are widely used in water recreation and sports, fishing, water traffic, emergencyrescue, shore landing, and maritime patrol.The upstream of the outboard motor industry includes manufacturing raw materials and spare parts, such assteel, non-ferrous metals, internal combustion engines, gearboxes, propellers, and electric motors. The upstreamraw material market is relatively mature, with sufficient market competition and product supply, ensuring that thecompany’s raw material procurement can be fully guaranteed. The downstream of the outboard motor industryinvolves the shipbuilding industry, primarily used in yachts, sailboats, and other vessels, which can be utilized forrecreational sports, commercial operations, and military maritime activities.
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Applications of Parsun Power’s Outboard Motors
| Field | Scenario | Example |
| Recreational | Recreational fishing, sailing and water sports | |
| Commercial | Fishing, water traffic and waterway maintenance | |
| Official and military | Emergency rescue and maritime patrol Beach landing and water reconnaissance |
In terms of the global market, according to a report released by Global Market Insights Research PrivateLimited (GMI), the global sales volume of outboard motors is expected to reach 914,800 in 2023 and 1.171 millionin 2030; and the global market value of outboard motors is expected to reach USD11.093 billion in 2023 and
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USD15.975 billion in 2030. By horsepower size, in 2023, the global outboard motor market had a market share of
20.28% for low-horsepower motors and 79.72% for medium-high horsepower motors. The medium-highhorsepower motor market has a larger share, and the trend towards high-horsepower motors capable of drivingrecreational and luxury yachts is more pronounced. Outboard motors enjoy a vast global market. With globaleconomic growth, personal income increase, and the change in personal consumption habits, the global outboardmotor market trends toward stable growth. Worldwide, the outboard motor industry is dominated by Japanese andAmerican brands, including Yamaha (a Japanese outboard motor brand under Yamaha Motor) and Mercury (anAmerican outboard motor brand under Bentfield Group). Compared with major international competitors, ParsunPower continues to capture market share in Europe, the United States and other developed countries, supported byits cost-effective advantage of similar product performance and obvious price advantage.In terms of the Chinese market, according to GMI’s report, the sales volume of outboard motors in China isexpected to reach 45,500 in 2023 and 75,800 million in 2030; and the market value of outboard motors in China isexpected to reach USD306 million in 2023 and USD588 million in 2030, with China’s compound annual growthrate (CAGR) in sales volume and market value both much higher than those of the world. In 2023, the marketshare of low-horsepower and medium-high horsepower outboard motors in China is expected to be 48.01% and
51.99%, respectively.
In recent years, considering the development of China’s water tourism and recreational industry and theemphasis of the government on maritime rights, the Chinese government agencies at all levels have grantedvigorous policy support to ship-related industries. For example, the National Development and ReformCommission has included high-performance ships, such as superyachts, luxury cruise ships, marine surveillancevessels, and small-waterplane-area twin hulls, among items for encouragement. The Ministry of Industry andInformation Technology has proposed developing brand products, such as luxury superyachts, sightseeing boats,and official boats. The State Council has also proposed vigorously developing marine tourism, manufacturinglocalised tourism equipment such as cruises and cruise yachts, and vigorously developing cruise yacht tourism.China’s yacht industry will usher in rapid development.China has become one of the world’s fastest-growing outboard motor markets owing to its rapid economicgrowth and changing recreational habits. With the rise of domestic brands represented by Parsun Power, domesticsubstitution has gradually become one of the mainstream trends in the development of the outboard motorindustry in China, and there is the huge market potential for domestic substitution. Against the backdrop of thecountry’s encouragement of import substitution of domestic equipment, China is expected to usher in a new stageof prosperous development for domestic outboard motor enterprises. Leading domestic outboard motor companieswill enjoy the dual benefits of high industry growth and domestic substitution.
3.2 Supply side——the Company’s presence in the industry
The subsidiary Parsun Power specializes in R&D, manufacturing, and sales of outboard motors, aspiring to bea world-class provider of water powersports products. Its outboard motors span a diverse power spectrum,compatible with fossil fuels, electricity, and alternative energy sources. The majority of its product models havebeen CCS-, CE- and EPA-certified. These products are widely used in water recreation, fishing, water traffic,emergency rescue, shore landing and maritime patrol.
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As a top-ranking manufacturer in the domestic outboard motor industry, Parsun Power is a State-level "LittleGiant" enterprise with specialties, refined management, unique technologies, and innovation, as well as a State-level High-tech Enterprise. Parsun Power’s outboard motors ranked first in the industry for three consecutive yearsfrom 2020 to 2022. In 2021 and 2023, Parsun Power successfully mass-produced 115-horsepower and 130-horsepower gasoline outboard motors, breaking the long-term monopoly of American and Japanese brands in thispower segment. In March 2024, Parsun Power officially released the 300-horsepower gasoline outboard motor atthe Shanghai International Boat Show, marking a full entry of domestic outboard motors into the global high-endmainstream market.(III) Principal operations of the Company in the Reporting PeriodWith “intelligent equipment manufacturing” as its primary strategic focus, Dongfang Precision concentrateson the manufacturing of high-end intelligent equipment. Its principal operations include “intelligent packagingequipment” and “water powersports equipment”. The “intelligent packaging equipment business” consists of smartcorrugated packaging equipment, digital printers, and industrial Internet industry solutions.
Business Divisions and Entities of Dongfang Precision
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A The intelligent packaging equipment divisionThe intelligent packaging equipment division consists of smart corrugated packaging equipment, digital printers, and industrial Internet industry solutions, whichcover the most important links in the value chain of corrugated packaging production (as shown below).
Relationship between Corrugated Packaging Manufacturing Value Chain and the Company's Smart Corrugated Packaging Equipment
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a. Smart corrugated packaging equipment business
(1) Corrugated cardboard production lines (including corrugated rollers)
The corrugated cardboard production lines business of Dongfang Precision is engaged in corrugated cardboardproduction lines (under the brands of Fosber and Quantum) as well as corrugated and pressure rollers (under theTiru?a brand), which are key components of corrugated cardboard production lines. With the overseas Fosber Group(under it, Fosber Italy, Fosber America, QCorr, and Tiru?a Group) as well as the domestic Fosber Asia and Tiru?aAsia, Dongfang Precision is able to provide products and services for customers around the world.From the perspective of end market, the three major series of corrugated cardboard production lines (S/Lineand Pro/Line under the Fosber brand, as well as Quantum Line under the Quantum brand), along with a wide rangeof corrugated and pressure rollers (key components, under the Tiru?a brand), are complementary and synergistic,achieving full coverage of the end market as a product portfolio.From the point of the locations of business entities, the global layout of business assets lays a solid foundationfor the Company's global sales.Overseas, Fobser Group primarily serves large- and medium-sized manufacturers in Europe, North America,Latin America and other countries and regions. All the business units and profit centres of Fosber Group have theirbusiness, assets and staff located in Europe and North America. They adopt a local management and operationmodel, and design, develop and manufacture their products locally. Fosber Group has established stable partnershipswith major manufacturers in the corrugated packaging industry in Europe and the US.
Domestically, Fosber’s corrugated lines have been designed and adapted to the needs of customers in theChinese market. Supported by China’s most complete supply chain across all industrial sectors globally, as well asthe competitive edge of manufacturing, over 90% of the components of the corrugated lines are manufactureddomestically. These products, which are high-tech, high-performance and cost-efficient for they are made in China,are provided for corrugated packaging manufacturers in China, Asia (East Asia, Southeast Asia, South Asia, andthe Middle East), Africa, Europe, and Latin America. Since 2022, the Company has introduced Tiru?a’s corrugatedand pressure rollers to China for domestic design and local production. While catering to the needs of Fosber Asia’scorrugated lines for corrugated and pressure rollers, Tiru?a is also developing new markets in China and the rest ofAsia for its products.
(2) Corrugated box printing and packaging production lines
Dongfang Precision is a professional supplier of medium- and high-end corrugated box printing and packagingproduction lines. Domestically, Dongfang Precision (China) is responsible for business operations associated withcorrugated box printing and packaging equipment, while in the overseas market, it is Dongfang Precision (Europe).
The product matrix of Dongfang Precision (China) includes corrugated converting line and single machineproducts that are of dozens of specifications and different market positioning, featuring fixed type/open-close type,top printing/bottom printing, and other technologies. These products mainly include “Dongfang Star” Quickset TopPrinting FFG and Top Printing Open-Close Type FFG Inline, as well as “Super Star” Bottom Printing Die CutterStripper Vacuum Stacker Converting Line, Bottom Printing Open-Close Type FFG Inline and Bottom PrintingOpen-Closed Type/FFG & Stitcher.
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Dongfang Precision (Europe) specializes in high-end corrugated converting line products. Its primary productsinclude “FD” Quickset Top Printing FFG, “HGL” Quickset Bottom Printing FFG, and Quickset BottomPrinting/Die Cutter Stripper Vacuum Line. These products are designed with noncrush feeder design, full servocontrol, and fully automatic control features, making them more suitable for high-definition printing. DongfangPrecision (Europe) also provides pre-printing and post-printing equipment compatible with the complete lineproducts, covering production processes such as paper feeding, stripping, transferring, palletizing, folding andgluing. Dongfang Precision (Europe) primarily serves the European markets.In the area of corrugated converting lines/single machines, Dongfang Precision is a professional manufacturerwith an early start and a strong foundation among domestic fellow companies, enjoying high brand awareness andcustomer recognition in the industry. The products are highly popular not only in the domestic market but alsoexported to over 60 countries and regions worldwide, including Europe, America, Asia, Africa, Latin America, andOceania.
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Primary Product Portfolio of Dongfang Precision’s intelligent packaging Equipment Business - Corrugated Cardboard Production Lines
| Product type | Brand | Product image | Main characteristics |
| Corrugated Cardboard Production Lines | Fosber Brand S/Line Width: 2.5m~2.8m Production speed: 370~470 meters/minute Designed for large corrugated board manufacturers Beltless Technology Caddy oil-free technology Gapless changeover with no speed reduction of the cadre Industry leading changeover times Optimum board quality and low operating costs Advanced Syncro4 system control Process Control Supervision (PCS) Data Tracking Supervision (DTS) | ||
| Quantum Line： Widths from 1.8m to 2.5m A new concept in corrugated board production Better suited for lightweight corrugated board production Innovative design, compact and flexible Optimum appearance and print surface quality Lower energy consumption and less labor Wavy Line： Designed for the production of single-sided corrugated boards Compact and flexible High quality at high speeds | |||
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| Product type | Brand | Product image | Main characteristics |
| Domestic Line: Width: 2.2m~2.8m Design speed: 270-370 meters/minute Single tile, double tile, triple tile wet section Wet section without belt technology Cadre without lubrication technology High board quality Advanced Syncro system control Process Control Supervision (PCS) Data Tracking Supervision (DTS) | |||
| Instant Set: Dual Module Slitting Machine Gapless order change speed of 250 meters/minute Positioning accuracy of +/-0.5mm, Within 3 seconds to change the order and line up the knives | |||
| Corrugated & pressure rollers | The world's leading supplier of corrugating rolls and pressure rolls with industry-leading machining and tungsten carbide treatment |
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Primary Product Portfolio of Dongfang Precision’s Smart Corrugated Packaging Equipment Business - Corrugated Box Printing and Packaging Production Line Equipment
| Product type | Brand | Product image | Main characteristics | |||||
| Integrated corrugated box printing and packaging lines | Upper printing fixed type Full servo control No downtime for plate change 2 minutes quick order change Vacuum adsorption large belt, high precision cardboard transfer, long service life Energy saving up to 30 Only 2 people are needed to operate the whole line | |||||||
| DONGFANG STAR I QUICKSET TOP PRINTING FFG | ||||||||
| Print-on/off type Vacuum adsorption roller transfer; Computerized adjustment, easy to operate; High speed and stable operation; Patented folding structure; Improve carton molding effect Only 2-3 persons are needed to operate the whole line | ||||||||
| DONGFANG STAR II TOP PRINTING OPEN-CLOSE TYPE FFG | ||||||||
| Suitable for shaped box, machine box and pre-printed box, etc., with one point and multiple die-cutting. Mature down-printing die-cutting technology; Clean chip removal and accurate counting Efficient production; Uninterrupted | ||||||||
| Asia-Pacific STAR I BOTTOM PRINTING DIE CUTTER STRIPPER VACUUM STACKER CONVERTING LINE | ||||||||
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| Product type | Brand | Product image | Main characteristics |
Integratedcorrugatedbox printingandpackaginglines
| Integrated corrugated box printing and packaging lines | feeding; No-speed down output of bundles, flexible palletizing methods Configurable for double-sided printing; 2-3 person operation | ||||||
| Vacuum adsorption roller transfer Computerized adjustment of the whole machine, easy to operate Good effect of clearing waste, can realize one opening and two die-cutting line gluing carton. Patented folding structure improves carton molding effect. The whole line is operated by 2-3 persons | |||||||
| Asia-Pacific STAR II BOTTOM PRINTING OPEN-CLOSE TYPE FFG INLINE | |||||||
| Design concept of down-printing type gluing and nailing as a whole Multi-purpose machine, to meet the production needs of different orders Saving space, reducing process, greatly reducing labor cost. Multiple pre-pressure to enhance folding and molding effect, precise control of molding accuracy. | |||||||
| Asia-Pacific STAR III BOTTOM PRINTING OPEN-CLOSED TYPE/FFG & STITCHER | |||||||
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| Product type | Brand | Product image | Main characteristics |
| Spindle servo drive Quick order change Complete pre-press and post-press supporting units |
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b. Digital printersThe business is primarily led by the subsidiary Shenzhen Wonder Digital Technology Co., Ltd. Wonder Digitalprovides solutions for customers in the digital printing industry, including digital printers, ink, accessories, and professionalservices. Wonder Digital has introduced a variety of digital printers to meet the diverse needs of different market segmentsand customer levels, including:
(1) Multi Pass digital printer series applicable for small-batch paper packaging printing
(2) Single Pass digital printer series applicable for large/medium/small batch paper packaging printing
(3) Single Pass digital series applicable for pre-printing on raw paper
(4) Hybrid printer series that combines Multi Pass high-precision printing and Single Pass high speed printing into one,supporting both scanning mode printing for large size, high precision, and full colour orders, and instantly switching toSingle Pass mode for printing large volumes of small size orders.Wonder Digital offers a diverse range of products that cover various types and specifications, from postprinting to pre-printing, from water-based dye/pigment, water-based ink to spot colour UV ink, from boxes, offset cartons to sheet metal.The products also support a range of application modes and scenarios, from single-sheet printing to exchange ordersseamlessly with variable data printing, and from single machine printing to integration with ERP systems. As a leadingenterprise in the domestic corrugated box digital printing industry, Wonder Digital has always focused on the applicationinnovation of digital printing technology in the field of industrial printing. In 2024, Wonder Digital released the newWONDER INNO PRO SINGLE PASS industrial high-definition color digital printer. This is the first time that high-speeddigital inkjet printing technology with a baseline printing accuracy of 1800 NPI has been applied in the field of industrial-grade paper packaging printing. This device provides the color printing packaging field with a high-definition color digitalprinting solution that can achieve an effect comparable to offset printing through digital printing technology.Apart from digital printers, Wonder Digital also sells supporting units after printing section including slotting andvarnish coating units, as well as special ink products that are compatible with its own-brand equipment. These special inkproducts, including water-based dye ink, water-based pigment ink, and UV ink. Wonder Digital’s high cost-performancedigital printing solution provides customers with cost-effective configuration plans for digital inkjet printing equipment andink formulation plans. The cost-performance ratio of the ink is a crucial factor for customers to consider when evaluatingthe overall solution.Based on accumulated know-how and experience, Wonder Digital provides digital printers for advertising, homedecoration, and other fields, including flatbed printing and roll to roll printing technologies. The flatbed models can be usedfor digital printing on materials such as aluminum panels, glass, metal plates, acrylic sheets, and alucobond panels, whilethe roll-to-roll models are applicable for digital printing on corrugated cardboard, vehicle paste paper, lamp box fabric, PVCfilm, decorated paper, and sheet metal like aluminum sheets, among others. Additionally, Wonder Digital also offers digitalprinters for the label printing industry.
With its comprehensive product matrix, Wonder Digital provides paper packaging digital printers that meet the iverseneeds of industry customers with different market positions and levels. Since its establishment in 2011, Wonder Digital’sdigital printers have been exported to countries and regions such as Europe, America, Middle East, Latin America, andSoutheast Asia, with over 1,600 units of equipment installed worldwide. Leveraging its robust R&D prowess in China'sdigital printer sector, Wonder Digital has forged an enviable brand identity and industry standing. Its cutting-edgetechnology, superior reliability and stability, along with a compelling price-to-performance ratio, constitute the corecompetitive strengths of Wonder Digital.
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Primary Product Portfolio of Dongfang Precision’s intelligent packaging Equipment Business – Digital Printers
| Product type | Brand | Product image | Main characteristics | ||||
| Digital Printers | Printing reference accuracy: 1800 NPI Improved stability and print clarity Better colour printing effect Printing speed: up to 150 metres per minute, to meet the needs of high-speed printing Printing thickness: 0.2mm-15mm Printing material: thin paper/cardboard, yellow and white kraft card, honeycomb board, coated paper, etc. Printing width up to 2500mm Water-based dye ink/water-based pigment waterproof ink is optional. | ||||||
| WONDER INNO PRO SINGLE PASS Industrial High-Definition Color Digital Printer | |||||||
| A cost-effective tool for bulk orders Adopts Epson's latest HD industrial printheads. Printing width up to 2500mm Speed up to 700㎡/h Printing thickness 1.5mm-35mm Full suction platform printing and feeding Coated paper and honeycomb board can also be easily printed. Base accuracy 1200dpi Water-based dye ink/water-based pigment waterproof ink is optional. | |||||||
| WD250++ Series Scanning Wide Format High Quality Carton Digital Printer | |||||||
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| Product type | Brand | Product image | Main characteristics |
Digital Printers
| Digital Printers | \ | Fully automatic feeder system CMYK+W ink colour scheme is optional. Printing quality is delicate and vivid Colour effect comparable to offset printing Printing thickness: 0.2mm-20mm Printing material: cardboard/copperplate paper, coated paper, yellow and white kraft card, etc. | ||||||
| WD250 PRINT MASTER MULTI PASS Digital inkjet color printing equipment | ||||||||
| Reel-to-Reel PrintingSuitable for corrugated paper, body stickers, light box fabric, PVC color film, decorative paper, thin aluminum sheet, etc.Decorative paper, thin aluminum plate, etc.Centralized printing and decentralized printing, cost saving | ||||||||
| Industrial SINGLE PASS roll-to-roll high-speed digital pre-printing machine | ||||||||
| Combines two different digital printing methods: Multi Pass high-precision scanning and Single Pass high-speed printing.Reduce the capital investment in equipment, save space, labor, maintenance and other costs, improve production efficiency | ||||||||
| MULTI PASS-SINGLE PASS All-in-One Digital Printing Machine | ||||||||
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c. Industrial Internet industry solutionsDongfang Digicom, a subsidiary of Dongfang Precision, serves as the primary business entity for “industrialInternet industry solutions”.
Based on the extensive industry experience of Dongfang Precision spanning over three decades in the field ofcorrugated packaging equipment, as well as guided by the Group’s strategies, the subsidiary Dongfang Digicom,leveraging cutting-edge technologies such as the Internet of Things (IoT), cloud computing, big data, 5G, andartificial intelligence (AI), has developed iDataPioneer, an industrial Internet platform for the packaging industryin a broad sense.The platform adheres to the Industrial Internet Architecture (v2.0) set forth by the Ministry of Industry andInformation Technology (MIIT), ensuring all products are secure, autonomous, and manageable. Anchored by thethree pillars of digital factory construction—connecting, data integration and analysis, and intelligent dataapplication. The industrial Internet platform iDataPioneer delivers a comprehensive one-stop service, spanningfrom equipment connectivity for data collection to data integration, processing, analysis, and intelligentapplications. It sets benchmarks in several metrics within the industry, empowering large packaging enterprises toadopt data-driven scientific management and decision-making, thereby facilitating their digital transformation.
Schematic diagram of the iDataPioneer Industrial Internet platform architecture
In 2024, Dongfang Digicom launched new products and modules such as “InterLink,” “Micro Mes,” and“Equipment After-sales Service Management System” for packaging industry customers. These products can be
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2024
adapted to various brands and specifications of corrugated box printing and packaging complete line products,including those under the Dongfang Precision brand. They can also help customers in the corrugated paperpackaging and composite paperboard industries enhance the intelligence and digitization of numerous existingproduction line equipment, empowering “digital manufacturing” for packaging enterprises and assisting in thecreation of digital factories and digital workshops.“InterLink” is a dedicated software system for managing orders and printing equipment, deeply integrating theintelligent production management system with the HMI (Human-Machine Interface). This integration improvesoperational efficiency, increases order processing capacity, and further reduces deployment costs. “Micro Mes” isan integrated application solution based on the intelligent production management system and enterprise ERP. Ithelps customers in the paper packaging printing field achieve a complete closed-loop management from ordercreation, scheduling, and production to reporting. This product can be sold as an embedded system with paperpackaging printing equipment or as standalone software. It features flexible customization and rapid delivery,helping customers in the paper packaging printing industry improve production and manufacturing intelligencewhile achieving cost reduction and efficiency gains. The newly launched “Equipment After-sales ServiceManagement System” focuses on the after-sales service field of packaging printing equipment. Based on DongfangDigicom’s independently developed equipment IoT platform, it realizes intelligent management of the entire processof customer equipment maintenance and repair through systematic after-sales service, online parts management,full lifecycle management of equipment archives, and remote maintenance of equipment, improving the quality ofafter-sales service for equipment suppliers.d. The operational model of the intelligent packaging equipment businessR&D model: The Company has industry-leading independent design and R&D capabilities, continuallyestablishing high-level R&D innovation management mechanisms. The R&D team, spearheaded by industryexperts, employs a blend of long and short-term product R&D planning, supported by a market-oriented R&Dmechanism. Additionally, a robust R&D talent incentive mechanism enhances the Company’s overall technicalproficiency, cementing its leadership position in the industry.Procurement and production model: The Company procures raw materials, such as steel plates, metalcomponents, and electrical parts (such as motors and PLCs), from external suppliers, while producing some corecomponents and corrugated rollers in-house.The majority of the Company’s equipment products adhere to a “made-to-order production” model. Uponreceiving orders and partial deposits from customers, the Company purchases raw materials from suppliers basedon specific customer requirements and inventory levels, and develops production plans and schedules. TheCompany advocates a “lean production” model for production and operational management, ensuring precisecontrol over BOM costs and manufacturing expenses, while continuously enhancing operational efficiency.In the first half of 2024, the delivery period for orders of corrugated board production lines under the FosberGroup was further shortened from 9 months in the second half of 2023 to about 6 months. The delivery period fororders of corrugated box printing and packaging complete machine equipment under the Dongfang Precisionbrand was 3 to 6 months, and the delivery period for orders of digital printing equipment under the WonderDigital brand was 1 to 3 months.
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2024
Marketing Model: The Company employs a “direct selling + distribution” marketing model. It utilizes a directsales approach for the domestic market and a combination of direct sales and agent distribution for overseas markets,tailoring the strategy to suit the unique needs of different countries and regions. This approach not only widens thescope of sales channels and increases sales volume but also reduces market expansion and sales costs.The Company’s complete production line and single machine products are typically one-time sales, with moresignificant transaction amounts. However, accessories, software, and services can be sold multiple times throughoutthe life-cycle of complete production line or single machine products. The growing number of existing equipmentsold in the downstream industry market presents a steady stream of sales opportunities for accessories, software,and services. Additionally, providing high-quality technical support and services helps to promote the sales ofcomplete production line products.
In terms of the settlement of orders, the Company enjoys a high brand awareness and superior bargain powerin the industry, so it collects down payment in advance and payment by stages for the sales of corrugated cardboardproduction lines and corrugated box printing and packaging equipment. Generally, 80% to 90% of the sales paymentcan be collected upon the delivery of products.
B The water powersports equipment division
The subsidiary, Parsun Power, is a leading enterprise in the domestic outboard motor industry. According tothe certificate issued by the China Internal Combustion Engine Industry Association, Parsun Power’s outboardmotors ranked first in the industry for three consecutive years from 2020 to 2022. Parsun Power’s main productsare outboard motors of various specifications and different series, with horsepower ranging from 2 to 130. Itsoutboard motors span a diverse power spectrum, compatible with fossil fuels, electricity, and alternative energysources. The majority of its product models have been CCS-, CE- and EPA-certified. These products are widelyused in water recreation, fishing, water traffic, emergency rescue, shore landing and maritime patrol.The outboardmotor products are exported to hundreds of countries and regions, including Europe, Africa, Oceania, SouthAmerica, North America, the Middle East, and Southeast Asia.
(1) Outboard motors
By the source of power, outboard motor products of Parsun Power are divided into gasoline outboard motors,electric outboard motors, and diesel outboard motors.
Gasoline outboard motors enjoy the most abundant specifications and varieties. Parsun Power has accumulatedyears of industry experience in the field and has had several proprietary technologies and applied them to products.It has achieved mass production of the maximum 115hp gasoline outboard motors and has successfully broken thelong-term monopoly by international well-known brands in the 115hp sector. The stable and reliable quality of its115hp gasoline outboard motors, contributing to the domestic substitution of medium- and high-horsepoweroutboard motors and the improvement of the global market share of domestic brands. After successfully conqueringthe 115hp gasoline model, Parsun Power's R&D team marches toward higher-horsepower models and strives themake domestic-brand high-horsepower outboard motors take a place in the global competition of the high-horsepower outboard motor market. In the first half of 2023, Parsun Power took it to the next level by successfullycompleting the mass production and sale of 130hp gasoline outboard motors. Meanwhile. In March 2024, ParsunPower officially released the 300-horsepower gasoline outboard motor at the Shanghai International Boat Show,marking a full entry of domestic outboard motors and Parsun Power into the global high-end mainstream market.
Electric outboard motors are powered by batteries. They convert electric power into kinetic power through
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2024
motors. Compared with oil-fired ones, electric outboard motors are characterized by zero emissions, low noise, andeasy operation. Most of Parsun Power’s electric outboard motors are of low- and medium-horsepower, which aremainly used in scenic spots and other sectors requiring stricter environmental protection.Diesel outboard motors not only retain the characteristics of easy assembly, easy maintenance, and easyoperation of gasoline outboard motors but also enjoy the advantages of fuel saving, lower emissions, greater torque,and being safer, more reliable, and easier for maintenance. Parsun Power's existing diesel outboard products are theagent in mainland China to sell the Swedish brand OXE Marine's outboard products, models mainly include 150 hp,175 hp, 200 hp, and 300 hp diesel outboards. These motors are mainly used in commercial transportation, offshoreoil extraction, and public law enforcement. Parsun Power is also promoting the research and development of its ownbrand of diesel outboard motors.Parsun Power has achieved a complete product line layout of “gasoline-diesel-electric” outboard motors andwill rely on its years of technical expertise and leading market share in the gasoline outboard motor field to expandinto high-horsepower diesel outboard motors and electric outboard motors.
Parsun Power's outboard motor products have stable quality and reliable performance, and some of them enjoycomprehensive performance comparable to that of internationally well-known brands and emissions reachingEuropean and American standards. In the future, Parsun Power will focus on medium- and high-horsepoweroutboard motors, enrich electric outboard motor production lines, continuously optimize the product structure ofoutboard motors, and consolidate its leading position among domestic outboard motor manufacturers.
(2) General machines
Aside from outboard motors, Parsun Power also engages in the business of general machines. These generalmachines constitute versatile power solutions and associated end-user items, featuring primarily small gasoline anddiesel engines for use in generators (like emergency power kits, and field operation power supplies), agriculturalequipment (e.g., water pumps, cultivators), gardening machinery (e.g., lawnmowers, chainsaws), compactconstruction tools (e.g., cutters, tampers, concrete mixers, and levellers), among other miscellaneous applications.These products find extensive usage across various sectors.
Parsun Power's general machine products mainly include gasoline engines, gasoline generator sets and gasolinewater pump sets. Gasoline engines, primarily single-cylinder four-stroke units, utilize gasoline as fuel and areadaptable for use in agricultural machinery, gardening equipment, and other small machinery applications. Gasolinegenerator sets combine these engines with generators, functioning as standby power sources. The gasoline waterpump sets feature centrifugal pumps driven by gasoline engines and are extensively utilized in agricultural irrigation,livestock watering, and similar domains.
(3) The operational model of the water powersports equipment business
Parsun Power follows an industry-standard sales model that primarily relies on distribution, supplemented bydirect selling. The demand for outboard motors, which are the company’s main product, is mainly distributedoverseas, with end customers scattered throughout the world. Adopting a distribution-centric sales model enablesParsun Power to reach end customers to the fullest extent possible.
Parsun Power produces outboard motor products independently, utilizing sales demand forecasts, customerorders, product inventory status, material delivery progress, and product production cycles to formulate production
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2024
plans. The company then organizes the production of components in accordance with specialized processes andprocedures. In procurement, Parsun Power following the principle of “sales determine production, productiondetermines procurement,” Parsun Power determines the procurement requirements for its outboard motor business,while also taking into account reasonable safety stock.II Core Competitiveness AnalysisThe analysis of the Company’s core competitiveness in the Reporting Period is as follows:
(I) Industry-leading technology and strong capabilities of R&D and innovationThe Company is at the forefront industry-wide in China in terms of R&D and technology. In terms ofintellectual property rights, as at the end of 2023, the Company had been granted a total of 420 domestic and foreignpatents, an increase of 49 as compared to the end of 2022, and a total of 75 software copyrights, an increase of 42as compared to the end of 2022.
1. The smart corrugated packaging equipment business:
The middle- and high-end corrugated cardboard production lines under the Fosber brand are industry-leadingin speed, width, precision, stability, reliability, failure rate, and intelligence, characterized by high efficiency, energysaving, stability, reliability, intelligent control, and easy operation and maintenance. The corrugated cardboardproduction lines under the Fosber brand boast machinery with high technology, quality, and reliability, advancedintelligent software systems, and technical support services and have won the praise of customers worldwide.Fosber Asia has launched the “Instant Set” unit and applied it to corrugated cardboard production lines. Eachcutting blade and indentor are independently controlled by the servo motor, thus significantly improving the speedof the order change of the dry section of corrugated lines and shortening the average time of order change from 8-15 seconds to within 3 seconds. Moreover, it can better support the quick order switch of downstream customersand meet the characteristics of multiple types and small batches of paper packaging orders in China.Fosber Group has control systems that are developed based on Industry 4.0 technologies for its own high-endcorrugated cardboard production lines, including functional modules such as Syncro4, PCS (Process ControlSystem), Pro/Care, and Pro/Quality. These systems can help achieve highly accurate, digital and intelligentmanagement and control of the machine status, production process, routine maintenance, technical support, andquality inspection of corrugated cardboard production lines. Advanced technologies, such as sensors, AdvancedReality (AR), algorithm analysis, big data, and cloud computing, are adopted in these systems to realize the fullautomation and intelligence of the whole process of production and processing of corrugated cardboards, monitorthe temperature, humidity, heat, folds, and other data of corrugated cardboard production lines in real time, andmonitor the dashboard dynamically in the production process. Through data-based production performance analysisand cost analysis, it helps customers improve production efficiency. Through the “self-diagnosis system”, itidentifies abnormal operations and sends alerts, and identifies solutions in an intelligent manner. Through the “bigdata analysis system” module, it collects real-time data in the corrugator production process through sensors, outputsrecommended configuration parameters and improvements through algorithm analysis, and helps customersimprove the effectiveness of production process control.
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2024
How Fosber Group’s PRO Series Intelligent Production Management Information Technology System Works
2. The digital printer business:
Wonder Digital is a leader in the domestic digital printer industry, a State-level High-tech Enterprise, and aState-level “Little Giant” Enterprise with specialties, refined management, unique technologies and innovation.With a complete digital printer offering, Wonder Digital breaks through the edge of mechanical engineering, bridgesthe physical world and the digital world, and provides industry customers with a full range of digital printingsolutions.Wonder Digital’s UV digital color printers and high-speed digital printers have a baseline printing accuracy of1200 dpi. Their color printing effects in terms of clarity, detail, color brightness, and saturation are comparable totraditional offset printing machines. In 2024, Wonder Digital released the new WONDER INNO PRO SINGLEPASS industrial high-definition color digital printer, with a baseline printing accuracy of up to 1800 NPI. Thisrepresents a revolution in domestic digital printing technology in the field of paper packaging printing, transitioningfrom color printing to high-definition color printing. This device provides the color printing packaging field with ahigh-definition color digital printing solution that can achieve an effect comparable to offset printing through digitalprinting technology.
Wonder Digital’s large format roll to roll high speed digital printer outperforms domestic competitors in termsof width and resolution and is competitive on the market in terms of size, energy consumption, and cost-performance.
3. The water powersports equipment business:
The subsidiary Parsun Power is committed to independent R&D and innovation of China-made outboardmotors, and is a state-level "Little Giant" enterprise with specialties, refined management, unique technologies andinnovation, a national high-tech enterprise, the Provincial Outboard Motor Engineering and Technology ResearchInstitute of Jiangsu, a technology center recognized by Jiangsu Province, a leading enterprise in China's internalcombustion engine industry and a council member of the Small Gasoline Motor Branch of China Internal
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2024
Combustion Engine Industry Association. Its outboard motor products have won the Certificate for IndustrializationDemonstration Program under the National Torch Plan and honors including Innovative Products in ChineseMachinery Industry, Products of Well-known Brands in Jiangsu, and Products of Well-known Brands in Suzhou.Parsun Power has been developing in the outboard motor industry for over ten years and has had several China-leading core technologies and accumulated rich scientifically innovative achievements after long-term R&D inputand technical accumulation.As of 31 December 2023, Parsun Power has been granted a total of 73 patents, including11 invention patents; and it has won the Second Prize of China Machinery Industry Science and Technology Awardfor twice.Parsun Power is one of the main drafters of two industry standards including Outboard Gasoline Engines-General Requirements (JB/T 11875-2014) and General Technical Specification of Outboard Engine (CB/T 4505-2020).In 2021, Parsun Power successfully mass-produced a 115-horsepower outboard motor, breaking the long-termmonopoly of internationally renowned brands in this power segment. In 2023, Parsun Power successfully completedthe mass production and sales of a 130-horsepower outboard motor. In March 2024, Parsun Power officially releasedthe 300-horsepower outboard motor at the Shanghai International Boat Show. Currently, Parsun Power hasovercome key core technologies for high-horsepower outboard motors, successfully designing a high-powergasoline outboard motor with a large-displacement V6 vertical shaft engine structure. This design solves the testingdifficulties of high-power gasoline outboard motors and innovatively applies engineering combustion theory to thecombustion and emission optimization of outboard motors, addressing many challenges in the development of high-horsepower outboard motors for domestic brands.
(II) Complete layout in the corrugated packaging machinery industry chain and the most complete andrichest product portfolio in the industryAmong enterprises of the same type in the domestic corrugated packaging machinery industry, DongfangPrecision has the most complete and comprehensive industry chain layout, with its business covering almost all keyprocesses in the corrugated packaging production and processing business chain. Meanwhile, the Company has themost complete and richest corrugated packaging production line equipment in the industry, making it capable ofmeeting the demands for complete production line and single machine products of different market positioning,different customer types and dozens of specifications and models, second to none in China.
1. Corrugated cardboard production lines
In the area of “high-end smart corrugated cardboard production lines”, the subsidiary Fosber Group offersS/Line and Pro/Line corrugated cardboard production lines under the brand of Fosber, Quantum Line microflutecorrugated board production lines, as well as corrugated and pressure rollers (key components of corrugatedcardboard production lines), among others. It provides medium- and high-end corrugated cardboard production linesof various specifications and prices for medium and large corrugated cardboard manufacturers across the world.
The corrugated lines of the Fosber brand are applicable for producing corrugated cardboard with a thicknessof 2mm to 13mm, known for their high load-bearing capacity, excellent shock resistance, plasticity, andenvironmental performance. The resulting corrugated cardboard is extensively used in fields such as logistics andexpress delivery, furniture and household appliances, and electronic product packaging, serving as the outerpackaging for various types of corrugated boxes. The Quantum Line production line of the subsidiary QCorr is
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2024
primarily used for creating solid fiberboard below 2mm and microflute corrugated board. These corrugated boardproducts are known for being lightweight, strong, moisture-resistant, and environmentally friendly. As such, theyare widely used in offset carton packaging, high-end products, electronic products, and cultural and artistic productpackaging. From the perspective of end market, the three major series of corrugated cardboard production lines ofFosber Group, S/Line, Pro/Line, and Quantum Line, are complementary, achieving full coverage of the end marketas a product portfolio.Based on more than 40 years of experience in the corrugated and pressure roller segment, the subsidiary Tiru?aGroup is familiar with a wide range of brands and specifications of corrugated cardboard production lines in themarket, and is able to supply corrugated and pressure rollers compatible with these corrugated board productionlines. Additionally, the company can design and produce customized rollers to meet the specific needs of customers,taking into account their machine types, special coating requirements, and paper characteristics.
2. Corrugated box printing and packaging production lines
Dongfang Precision (China) and Dongfang Precision (Europe) offer high quality corrugated converting lineand single machine products for China and the rest of the world. These products, which are of dozens ofspecifications and different market positioning, cover fixed type/open-close type, top printing/bottom printing,converting line (inline)/single machine, etc. They are the manufacturers with the widest range of products in thissegment across the world.
3. Digital printers
Wonder Digital possesses four major series of digital printers that cover various types and specifications, frompostprinting to pre-printing, from water-based dye/pigment, water-based ink to spot colour UV ink, from boxes,offset cartons to sheet metal. The products also support a range of application modes and scenarios, from single-sheet printing to exchange orders seamlessly with variable data printing, and from single machine printing tointegration with ERP systems. With a complete digital printer portfolio, Wonder Digital serves as a "supermarketof digital printers", providing domestic and foreign industrial customers with a wide range of low-, medium-, andhigh-end digital printers to satisfy the needs of these customers from different market segments.
Apart from digital printers, Wonder Digital also sells supporting units after printing section including slottingand varnish coating units, as well as special ink products that are compatible with its own-brand equipment. Thesespecial ink products, including water-based dye ink, water-based pigment ink, and UV ink.
(III) Profound Know-How experience and experienced team in the industry
Dongfang Precision has an experienced team with profound Know-How experience in the industry, which has20 years of experience in both global and domestic industry markets and has an in-depth understanding of theCompany's industrial layout, development planning, R&D approach, production operation, marketing, and teammanagement. The core management team has a broad vision, can promptly keep up with the general developmenttrend of the smart corrugated packaging equipment manufacturing industry, and can enable the Company to achievesteady and sustainable development through forward-looking strategic planning and layout.
As an enterprise that practices the management model of professional manager team and attaches greatimportance to authorization management, Dongfang Precision takes "a wealth of talent" and "cultural guidance" asthe basis of its corporate strategy and corporate culture, and develops its organizational capacity, improves the
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2024
Group's control over all business units and subsidiaries and integration of resources and assistance and aid, improvesthe Group's overall operational efficiency and reduces the Group's operation cost and promotes the Company'shealthy and sustainable development by optimizing the organizational structure design, standardizing theauthorization and control system, implementing medium- and long-term incentives and further developing thecorporate culture.
(IV) High brand popularity and customer recognition worldwideDongfang Precision-branded corrugated box printing and packaging production line equipment, Fosber-branded corrugated cardboard production lines, Wonder Digital-branded digital printers, Quantum-brandedcorrugated cardboard production lines, Tiru?a-branded corrugated rollers and Parsun-branded outboard motors ofthe Company are enjoying considerable brand recognition and industry influence at home and abroad.In the field of intelligent packaging equipment: The subsidiary Fosber Group, established in 1978, stands asone of the world's top two players in high-end corrugated cardboard production lines. Its Fosber-branded corrugatedlines enjoy strong brand recognition and customer favour in markets like Europe, North America, and Latin America.Tiru?a Group, founded in 1921, boasts almost four decades of expertise in corrugated and pressure rollers, withproducts distributed to over 60 countries globally. The subsidiary Qcorr, previously known as Agnati, an esteemedItalian supplier of corrugated cardboard production lines with over 80 years' experience, commands a high standinginternationally. Dongfang Precision's corrugated box printing and packaging lines lead among Greater Chinacompetitors, exporting to over 60 countries. Wonder Digital, a Chinese front-runner in the area of digital printers,ships its digital printers to over 80 countries, boasting a market presence of over 1,600 installations.With the constant growth in concentration and the continuous upgrading of capacity in the downstream industry,large- and medium-sized packaging enterprises will need more middle- and high-end production line equipment,digital printing solutions, and industrial Internet industry solutions. The Company has seized opportunities andformed a better competitive edge by virtue of its stable business partnership during the industry changes.In the field of water powersports equipment: The subsidiary Parsun Power is a top-ranking manufacturer in thedomestic outboard motor industry. According to the certificate issued by the China Internal Combustion EngineIndustry Association, Parsun Power’s outboard motors ranked first in the industry for three consecutive years from2020 to 2022. Following extensive industry immersion, the Parsun Power brand has garnered significant recognitionand accolades, such as being named a "famous brand product of Jiangsu province" and a "famous brand product ofSuzhou city." Internationally, Parsun Power's distribution network extends to hundreds of countries and regionsacross Europe, Africa, Oceania, South America, North America, the Middle East, and Southeast Asia. Domestically,the company's sales footprint blankets most provinces and regions in China. Backed by dependable product qualityand comprehensive after-sales service, Parsun Power has forged enduring partnerships with numerous clientsworldwide.(V) Global layout of business assetsThe Company mainly serves customers in the corrugated packaging industry worldwide, and has realized theglobal layout of its business assets:
In Asia, the Company has three domestic R&D and production bases in Foshan, Suzhou, and Shenzhen, inEurope, it has R&D and production bases in Lucca, Bologna and Milan, Italy, and Pamplona, Spain, and in North
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2024
America, it has a production base in Green Bay, Wisconsin, USA. With such a layout in the three continents, theCompany has formed a global marketing and service network.An internationalized marketing and service network enables the Company to seize all opportunities in theglobal industry market and to provide product machinery and technical services for customers in the industry inover 100 countries and regions worldwide.
An internationalized product R&D, production and supply chain layout enables the Company to make promptresponses worldwide and meet customer demands and is conducive to the Company's integration of global resources,improvement of resource allocation efficiency, complement of advantages, reduction of the total cost andimprovement of the allocation efficiency, so that the Company can be increasingly competitive in the world whenit is operated as a group.
(VI) Strong capabilities of strategic control and integration
Since listing, the Company has kept expanding its presence in the upstream and downstream of the industrychain of its core business. After years of practice, the Company has developed strong strategic control and deepintegration of its business divisions and accumulated rich experience and practice, through the deep perception ofthe industry, forecast of industry trends, and a clear understanding of its own strategic development objectives.
Strategic control is the core capability that the Company relies on to manage its various business entities. Inpractice, the Company adjusted the strategic development plans, business models, product portfolios, marketstrategies, and core management teams of the companies acquired with its in-depth understanding of the industry,forward-looking foresight to the development trend of the industry, clear awareness of its strategic developmentobjectives, and well-established understanding of the capabilities and resources of all its business entities, so thatthese companies can be energized for new growth and step on a new development stage.
In terms of post-investment integration, the Company has formulated a set of effective controls for post-investment integration, including the corporate governance standardization policy, the “Board of Directors-Supervisory Committee-General Meeting” operation mechanism, the strategic and financial control system,decentralized authorization management, complete audits, and management incentives, forming a set of measures
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2024
for effective controls for post-investment integration with the Company’s own characteristics to secure the effectiveimplementation of the strategic plan.
● Corrugated cardboard production lines: Fosber Group recorded a compound annual growth rate (CAGR) ofnet profit of 26%After acquiring the controlling stake of Fosber Italy in 2014, the Company and its management took severaleffective measures for integration, helped Fosber Group adjust its strategic planning and business strategies andstandardize the authorization management system, implemented the performance incentive policy for the coremanagement, and strengthened financial control.Such measures have successfully stimulated Fosber Group’sbusiness vitality. From 2015 to 2023, the CAGR of the operating revenue of Fosber Group was approximately 15%,and that of its net profit was 26%.
● Water powersports products: Parsun Power’s CAGRs of operating revenue and net profit exceeded 20%
After acquiring the controlling stake of Parsun Power in 2015, the Company helped Parsun Power streamlineand adjust its strategies, develop the new development roadmap, increase inputs in technology, products, and R&D,strengthen the marketing force, and improve the efficiency of the supply chain and production. It also supportedParsun Power to introduce excellent talent for a more powerful core team. These measures enabled Parsun Powerto realize continuous and stable growth. From 2016 to 2023, both CAGRs of the operating revenue and net profitof Parsun Power stood at 20%.
● Tiru?a Group and, the manufacturing pioneer, Agnati, were expanded to effectively stimulate newmomentum of established enterprises
In 2019 and 2020, the Company acquired the relevant business assets of Tiru?a Group, a nearly century-oldcorrugated roller manufacturer, and merged Agnati, an Italian corrugated cardboard production line manufacturerenjoying a high reputation for more than eight decades, into QCorr, a subsidiary of Dongfang Precision. TheCompany and its management fully streamlined and standardized the development strategies, R&D planning,product positioning, marketing, team building, and authorization management of these two established enterprises,based on which optimization and adjustment were performed. These measures effectively stimulated the vitality ofthe two old European companies and the enthusiasm of their manager teams.In 2023, subsidiaries QCorr and Tiru?aGroup both achieved good growth in annual operating revenue, the best annual results since they became membersof the Dongfang Precision family.
Relying on its strong strategic control and integration of business divisions, based on “mutual respect andmutual trust” and with an open mind seeking common grounds while putting aside differences, the Companyeffectively integrated all its business entities continuously released the synergy with the industry chain. Moreover,it conducted active practice and accumulated precious experience in helping domestic private enterprises go globaland perform overseas industrial M&As and overseas companies carry out post-investment integration andmanagement optimization. Concurrently, such practice and experience facilitated the Company to lay a solidfoundation and provided strong support for the Company to promote the implementation of the five-year strategicplanning and realize long-term, sustainable, and steady development.
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2024
III Analysis of Principal Operations
i Overview
In the first half of 2024, China’s economy continued to show a positive recovery trend, operating steadily withprogress. According to data from the National Bureau of Statistics, in June 2024, China’s manufacturing PMI forequipment manufacturing was 51.0%, up 0.3 percentage points from the previous month, marking the fourthconsecutive month of expansion. The transformation and upgrading of the manufacturing industry continue toadvance, and new productive forces continue to grow.Under the strong leadership of the board of directors and the management team, all employees worked hardand made progress in the first half of 2024, achieving stable growth in the company’s core main business. FromJanuary to June 2024, the company achieved a total operating revenue of approximately 2.161 billion yuan, a year-on-year increase of 3.77%. The net profit attributable to shareholders of the listed company was approximately 164million yuan, a year-on-year decrease of 20.50%. However, the net profit attributable to shareholders of the listedcompany after deducting non-recurring gains and losses was approximately 229 million yuan, a year-on-yearincrease of 40.97%.
Unit: RMB 10,000
| Business division | Operating revenue in 2024H1 | YoY change | Gross profit margin in 2024H1 | YOY Change |
| Intelligent packaging equipment | 178,305.86 | 6.88% | 33.86% | 3.95% |
| Corrugated cardboard production lines | 146,960.55 | 10.98% | 34.01% | 6.02% |
| Corrugated box printing and packaging production lines | 22,027.40 | -20.86% | 34.57% | -1.06% |
| Digital printers | 9,317.91 | 41.78% | 29.77% | -14.52% |
| Water powersports equipment | 37,813.03 | -8.75% | 23.64% | -3.17% |
Benefiting from the significant improvement in the supply constraints of chips, electronic components, andraw materials since 2022, as well as the decline in raw material and energy prices, the operating costs of FosberGroup, the main business unit of Dongfang Precision’s corrugated board lines, decreased year-on-year. Additionally,the reliability of the supply chain was significantly improved. This led to an increase in the overall gross profitmargin of the company’s intelligent packaging equipment business by 3.95% compared to the same period last year.Supported by efficient “lean production,” Fosber Group shortened the delivery period for orders from about 9months in the second half of 2023 to about 6 months in the first half of 2024.ii Main Business Operations During the Reporting Period
From January to June 2024, the intelligent packaging equipment sector achieved a total operating revenue of
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2024
1.783 billion yuan, a year-on-year increase of 6.88%, and the gross profit margin increased by 3.95 percentagepoints year-on-year, further enhancing the profitability of the sector as it scaled up.
1. The intelligent packaging equipment division
A. Corrugated Board Production Line Businessa) Overseas SegmentFrom January to June 2024, the subsidiary Fosber Group achieved a total operating revenue of 1.352 billionyuan, a year-on-year increase of 12.80%, and a net profit of 203 million yuan, a year-on-year increase of 76.4%.From the first half of 2018 to the first half of 2024, Fosber Group’s compound annual growth rate (CAGR) ofoperating revenue was 13%, and the CAGR of net profit was 31% (the above operating revenue and net profit arebased on Fosber Group’s consolidated financial statements).In the first half of 2024, Fosber Group maintained stable operations, and supply chain management efficiencycontinued to improve. The decline in raw material and energy costs in the European market further enhanced costreduction and efficiency improvement. Fosber Group adhered to “lean production,” taking measures to increaseefficiency and reduce costs in response to external changes, effectively promoting the improvement of the overallgross profit margin during the reporting period.In the European and North American markets, Fosber Group has maintained close cooperation with leadersand large enterprises in the corrugated packaging industry for many years, becoming a reliable partner with goodindustry customer recognition and brand reputation. During the reporting period, although mergers and acquisitionsamong several major corrugated packaging companies in the European and North American markets slightly sloweddown capital expenditures in the corrugated packaging industry in these regions in the first half of 2024, FosberGroup maintained a stable development momentum due to its stable market position and ample orders on hand. Asof the end of June 2024, the order delivery schedule for Fosber America’s orders had been extended to the secondquarter of 2025. Meanwhile, in Latin America, North Africa, and South Africa, Fosber Group achieved bettergrowth, especially receiving full-line orders from several countries in the Latin American market. Additionally, thenew service center established in Mexico this year has completed preliminary work and will begin normal operationswithin 2024.During the reporting period, the company increased its efforts in the expansion of corrugated packagingequipment parts and after-sales support business. The subsidiary Tiru?a Group, while serving as a core parts supplierof Fosber-branded corrugated lines and supplying corrugated rollers and pressure rollers to Fosber Group, alsoprovided high-performance corrugated rollers and pressure rollers to third-party customers in Europe and theAmericas (including other brands of corrugated board production line manufacturers and corrugated packagingmanufacturers). During the reporting period, Tiru?a Group achieved steady revenue growth, with significantprogress in business expansion to third-party customers, further enhancing its competitiveness in the European andAmerican markets. With the implementation of business plans and “lean production,” Tiru?a Group’s productioncapacity steadily increased, achieving significant cost reduction and efficiency gains. These factors collectively ledto a net profit growth of over 20% for Tiru?a Group in the first half of 2024.b) Domestic Segment
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2024
As a professional supplier of mid-to-high-end corrugated board production lines rooted in China and expandingacross Asia, Fosber Asia achieved positive results in “going global” during the reporting period. The overseasmarket machine sales revenue increased by 17% year-on-year. In terms of parts and services, several equipmenttechnical transformation and upgrade projects from both domestic and international customers were secured in thefirst half of the year, with parts and service sales revenue increasing by more than 30% year-on-year. In the domesticmarket, efforts such as establishing model factories and participating in industry exhibitions continuouslystrengthened domestic industry customers’ recognition of flagship products like the S/Line 370 high-speedcorrugated line and the “Instant Set” dual-module slitter-scorer, which better supports “short-run/small-batch”production. During the reporting period, several machine orders were received from different regional markets,assisting in the digital and intelligent upgrade of the domestic corrugated board manufacturing industry.
During the reporting period, Fosber Asia’s supply chain stability and procurement costs continued to improve.The localization rate of main products, S/Line and Pro/Line, steadily increased. While maintaining a good level oforder production lead times, cost reduction, quality improvement, and efficiency enhancement further strengthenedthe market competitiveness of Fosber Asia’s high-end corrugated lines. As the industry’s influence increased, moreand more industry customers partnered with Fosber Asia, becoming users of domestic high-end corrugated boardproduction lines.
The subsidiary Tiru?a Asia, responsible for localizing the production of Tiru?a brand corrugating rolls andpressure rolls, completed the equipment commissioning and process verification work for the new factory in thefirst half of 2024, initially achieving the capability for mass delivery of corrugating rolls and pressure rolls.
B. Corrugated Box Printing and Packaging Line Business
Overseas Market: In the first half of 2024, Dongfang Precision (China) achieved significant breakthroughs inits overseas business, securing the first order for its new fixed linkage line in the European market. DongfangPrecision (China) adopts a combined “distribution + direct sales” model for its overseas market business. Since2023, the company’s overseas business personnel have intensified efforts to expand the direct sales market, focusingon countries along the “Belt and Road.” During the reporting period, new overseas direct sales markets and multipleoverseas machine orders were obtained. Starting from the first quarter, Dongfang Precision (China) launched a four-month “Key Overseas Market Inspection and Service Training Project,” sending teams to visit several countries toprovide timely and efficient services to overseas customers, earning praise for the “China Speed.” By strengtheningafter-sales support services, the company offers not only machinery and equipment but also comprehensive lifecycleservices and solutions to overseas industry customers.
Domestic Market: During the reporting period, Dongfang Precision (China) received multiple “smart factorylogistics” orders in the domestic market. The company aims to create “smart factories” for its customers byproviding intelligent logistics transportation systems under the Dongfang Precision brand, covering both raw paperlogistics and cardboard logistics. This achieves visualized data and digital and intelligent logistics managementprocesses, enhancing the digital and intelligent levels of factory workshops while reducing costs and improvingquality and efficiency.
Production Operations: Dongfang Precision (China) continues to promote “energy saving and consumptionreduction, cost reduction, and efficiency improvement.” Since passing acceptance in 2023, the “digital workshop”
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2024
has been operating well. By introducing intelligent equipment, data collection and analysis, production processoptimization, and artificial intelligence assistance, the company optimizes management in areas such as orderprogress, production performance, capacity analysis, quality management, product traceability, and inventorymanagement. Additionally, the company has taken measures such as improving production processes andstrengthening supply chain management to further reduce overall costs, improve efficiency, and enhance profitmargins. From January to June 2024, Dongfang Precision (China) achieved a year-on-year net profit growth of 12%.C. Digital Printing Equipment BusinessFrom January to June 2024, Wonder Digital achieved an operating revenue of 93.1791 million yuan, a year-on-year increase of 41.9%, setting a new high for operating revenue in the first half of the year since 2022.During the recovery and development of the national economy, the recognition of digital printing equipmenthas continued to increase, especially among the numerous tertiary factories in the corrugated paper packagingindustry. Compared to traditional printing and packaging equipment, digital printing equipment has many features,such as lower initial one-time investment, better print data variability, higher adaptability to the flexibility of endpackaging, and the characteristics of short-run and quick-turnaround marketing needs. In the current marketenvironment, it helps tertiary factory customers achieve higher turnover rates and timely delivery rates, therebyachieving higher investment returns.In the first half of 2024, Wonder Digital participated in four large-scale domestic and international exhibitions,including the Drupa exhibition, the world’s largest trade show for the printing and graphic industry held for the firsttime in nearly four years, and the 2024 South China International Corrugated Exhibition. With the theme “DigitalInkjet, Colorful Printing Future,” Wonder Digital released the new WONDER INNO PRO SINGLE PASS industrialhigh-definition color digital printer for the color printing packaging field. This innovation represents a revolutionin domestic digital printing technology in the field of paper packaging printing, transitioning from color printing tohigh-definition color printing. This device provides the color printing packaging field with a high-definition colordigital printing solution that can achieve an effect comparable to offset printing through digital printing technology.By strengthening the construction of the overseas sales network and market expansion efforts, Wonder Digitalachieved positive results in product sales in overseas markets. The WD250++ scanning high-definition digitalprinter series achieved good sales performance in both domestic and international markets
2. Marine Power Equipment Segment
The subsidiary Parsun Power’s outboard motor business continues to benefit from the demand for outboardmotor products driven by water leisure activities in overseas markets and the trend of domestic substitution for mid-to-high horsepower outboard motors. In March 2024, Parsun Power officially released a 300-horsepower gasolineoutboard motor at the Shanghai International Boat Show, marking the full entry of domestic outboard motors andParsun Power into the global high-end mainstream market.ii Analysis of key financial indicators
Unit: RMB yuan
| 2024H1 | 2023H1 | Change (%) | Reason for any significant change |
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2024
| Operating revenue | 2,161,188,907.40 | 2,082,606,453.72 | 3.77% | No significant change. |
| Operating cost | 1,468,050,770.60 | 1,472,630,144.11 | -0.31% | No significant change. |
| Selling expenses | 123,119,378.16 | 119,248,680.76 | 3.25% | No significant change. |
| Administrative expenses | 161,949,583.52 | 174,818,664.63 | -7.36% | No significant change. |
| Finance costs | -12,794,161.84 | -4,539,148.71 | 181.86% | Mainly due to the increase in interest income in the reporting period. |
| Income tax expenses | 90,957,489.73 | 56,229,619.60 | 61.76% | Mainly due to the increase in income tax payable during the reporting period. |
| R&D expenses | 50,366,067.58 | 59,929,020.05 | -15.96% | No significant change |
| Net cash generated from/used in operating activities | 118,570,463.65 | 191,436,066.52 | -38.06% | Mainly due to the decrease in cash inflow from operating activities in the reporting period. |
| Net cash generated from/used in investing activities | -160,975,009.11 | 20,667,431.59 | -878.88% | Mainly due to the Company's investment in financial assets during the reporting period. |
| Net cash generated from/used in financing activities | -94,150,183.88 | -135,534,045.74 | -30.53% | Mainly due to the combined effect of loan repayment and recovery of loan deposits in the reporting period. |
| Net increase in cash and cash equivalents | -162,323,576.70 | 129,900,525.40 | -224.96% | Mainly due to the impact of net cash flows from investing activities in the reporting period. |
Unit: RMB
| 2024H1 | 2023H1 | Change (%) | |||
| Operating revenue | As a % of total operating revenue (%) | Operating revenue | As a % of total operating revenue (%) | ||
| Total | 2,161,188,907.40 | 100% | 2,082,606,453.72 | 100% | 3.77% |
| By operating division | |||||
| Intelligent manufacturing | 2,161,188,907.40 | 100.00% | 2,082,606,453.72 | 100.00% | 3.77% |
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2024
| By product category | |||||
| Corrugated cardboard production lines | 1,469,605,534.73 | 68.00% | 1,324,169,018.63 | 63.58% | 10.98% |
| Corrugated box printing and packaging production line equipment(Including Digital Printers) | 313,453,089.77 | 14.50% | 344,038,055.26 | 16.52% | -8.89% |
| Water powersports products and general machines | 378,130,282.90 | 17.50% | 414,399,379.83 | 19.90% | -8.75% |
| By operating segment | |||||
| Mainland China | 308,411,411.62 | 14.27% | 367,898,338.78 | 17.67% | -16.17% |
| Other countries and regions | 1,852,777,495.78 | 85.73% | 1,714,708,114.94 | 82.33% | 8.05% |
(2) Operating Division, Product Category or Operating Segment Contributing over 10% of OperatingRevenue or Operating Profit
√ Applicable □ Not applicable
Unit: RMB
| Operating revenue | Cost of sales | Gross profit margin | YoY change in operating revenue (%) | YoY change in cost of sales (%) | Change in gross profit margin (%) | |
| By operating division | ||||||
| Intelligent manufacturing | 2,161,188,907.40 | 1,468,050,770.60 | 32.07% | 3.77% | -0.31% | 2.78% |
| By product category | ||||||
| Corrugated cardboard production lines | 1,469,605,534.73 | 969,756,942.02 | 34.01% | 10.98% | 1.70% | 6.02% |
| Corrugated box printing and packaging production line equipment(Including Digital Printers) | 313,453,089.77 | 209,569,912.21 | 33.14% | -8.89% | -2.88% | -4.14% |
| Water powersports products and general machines | 378,130,282.90 | 288,723,916.37 | 23.64% | -8.75% | -4.80% | -3.17% |
| By operating segment | ||||||
| Mainland China | 308,411,411.62 | 239,827,136.65 | 22.24% | -16.17% | -15.16% | -0.93% |
| Other countries and regions | 1,852,777,495.78 | 1,228,223,633.95 | 33.71% | 8.05% | 3.22% | 3.11% |
Under the circumstances that the statistical caliber of the Company's main business data is adjusted in the Reporting Period, theCompany's main business data that adjusted according to the caliber at the end of the Reporting Period
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2024
□ Applicable √ Not applicable
IV Analysis of Non-Core Businesses
√ Applicable □ Not applicable
Unit: RMB yuan
| Amount | As a % of gross profit | Primary source/reason | Recurrent or not | |
| Return on investment | -8,194,916.20 | -2.94% | Mainly due to the change in investment income recognized from the implementation of investments in securities during the period. | Yes |
| Gain/loss on changes in fair value | -85,374,294.70 | -30.67% | Mainly due to changes in fair value recognized in investments in securities implemented during the period | Yes |
| Asset impairment loss | -5,743,282.79 | -2.06% | Mainly due to provision for decline in value of inventories and impairment of contract assets during the period. | Not |
| Non-operating income | 939,908.99 | 0.34% | No significant change | Not |
| Non-operating expenses | 389,972.29 | 0.14% | No significant change | Not |
V Analysis of Assets and Liabilities
1. Significant Changes in Asset Composition
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2024
UUnit: RMB yuan
| 30 June 2024 | 31 December 2023 | Change in percentage (%) | Reason for any significant change | |||
| Amount | As a % of total assets | Amount | As a % of total assets | |||
| Cash and bank balances | 1,557,965,316.51 | 21.23% | 1,826,419,904.49 | 24.23% | -3.00% | No significant change. |
| Accounts receivable | 842,776,537.22 | 11.48% | 904,003,975.47 | 11.99% | -0.51% | No significant change. |
| Contract assets | 46,416,016.67 | 0.63% | 45,946,377.14 | 0.61% | 0.02% | No significant change. |
| Inventories | 1,300,425,341.66 | 17.72% | 1,182,411,055.68 | 15.69% | 2.03% | No significant change. |
| Long-term equity investments | 0.00 | 0.00% | 0.00% | 0.00% | 0.00% | N/A |
| Fixed assets | 114,307,542.37 | 1.56% | 117,265,884.84 | 1.56% | 0.00% | No significant change. |
| Construction in progress | 613,804,454.53 | 8.36% | 611,851,577.04 | 8.12% | 0.24% | No significant change. |
| Right-of-use assets | 260,781,111.24 | 3.55% | 195,557,097.80 | 2.59% | 0.96% | No significant change. |
| Short-term borrowings | 75,944,108.52 | 1.03% | 82,342,398.83 | 1.09% | -0.06% | No significant change. |
| Contract liability | 93,156,553.78 | 1.27% | 370,549,972.80 | 4.92% | -3.65% | No significant change. |
| Long-term borrowings | 553,691,546.87 | 7.54% | 645,608,919.34 | 8.56% | -1.02% | No significant change. |
| Lease liabilities | 133,690,882.97 | 1.82% | 79,107,701.15 | 1.05% | 0.77% | No significant change. |
| Cash and bank balances | 60,173,070.42 | 0.82% | 65,861,441.32 | 0.87% | -0.05% | No significant change. |
| Financial assets held for trading | 607,015,754.09 | 8.27% | 682,625,442.45 | 9.06% | -0.79% | No significant change. |
2、Overseas assets that take up a large percentage of the Company’s net asset value:
√ Applicable □ Not applicable
| Asset | Source | Asset value (RMB) | Location | Management model | Control measures to protect asset safety | Return | As a % of the Company’s net asset value | Any material impairment risk or not |
| 100% interest of Fosber S.p.A. | M&A | 1,126,610,856.68 | Italy | Producing and marketing by itself | Integration of strategic control, authorisation control, operational control and | Good | 23.02% | Not |
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2024
| financial management | ||||||||
| 100% interest of EDF S.R. L | M&A | 24,358,650.35 | Italy | Producing and marketing by itself | Integration of strategic control, authorisation control, operational control and financial management | Good | 0.50% | Not |
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2024
3. Assets and Liabilities at Fair Value
√ Applicable □ Not applicable
Unit: RMB yuan
| Item | Opening amount | Gain/loss on fair-value changes in the period | Cumulative fair-value changes recognized in equity | Impairment allowance for the period | Purchased in the period | Sold in the period | Other changes | Closing amount |
| Financial assets | ||||||||
| 1. Financial assets held for trading (exclusive of derivative financial assets) | 651,296,267.76 | -66,675,431.51 | 834,405,063.93 | 826,165,733.96 | 592,860,166.22 | |||
| 2. Derivative financial assets | 31,329,174.69 | -18,702,002.81 | 3,944,397.53 | 2,415,981.54 | 14,155,587.87 | |||
| 3.Other non-current financial assets | 461,278,259.67 | 77,777,778.00 | 10,000,000.00 | -979,545.61 | 528,076,492.06 | |||
| Subtotal of financial assets | 1,143,903,702.12 | -85,377,434.32 | 916,127,239.46 | 838,581,715.50 | -979,545.61 | 1,135,092,246.15 | ||
| Other non-current financial assets | 10,248,630.14 | 164,547.94 | 10,413,178.08 | |||||
| Total of the above | 1,154,152,332.26 | -85,212,886.38 | 916,127,239.46 | 838,581,715.50 | -979,545.61 | 1,145,505,424.23 | ||
| Financial liabilities | 138,319,682.01 | -3,139.62 | 327,771.81 | 161,616.03 | -425,746.97 | 138,056,951.20 | ||
Indicate whether any significant change occurred to the measurement attributes of the major assets in the Reporting Period.
□ Yes √ No
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2024
4. Assets to which the Company’s Rights Were Restricted as at the Period-End
Unit: RMB yuan
| Item | Closing carrying amount | Reason for restriction |
| Cash and bank balances | 47,774,281.37 | Deposits used for obtaining bank acceptance bills and guarantees, etc. |
| Fixed assets | 63,977,965.43 | For bank loans obtained by subsidiaries |
| Total | 111,752,246.8 |
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2024
VI Investments Made
1. Total Investment Amount
√ Applicable □ Not applicable
| Total investment amount in 2024H1 (RMB) | Total investment amount in 2023H1 (RMB) | Change (%) |
| 970,338,776.80 | 957,152,298.32 | 1.38% |
2. Significant Equity Investments Acquired in the Reporting Period
□ Applicable √Not applicable
3. Significant Non-Equity Investments of which the Acquisition Was Uncompleted in the Reporting Period
□ Applicable √ Not applicable
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2024
4. Financial Investments
(1) Securities Investments
√ Applicable □ Not applicable
Unit: RMB yuan
| Security type | Security code | Security name | Initial investment cost | Measurement method | Opening carrying amount | Gain/loss on fair-value changes in the period | Cumulative fair-value changes recognized in equity | Purchased in the period | Sold in the period | Gain/loss in the period | Closing carrying amount | Accounting title | Funding source |
| Domestically/ overseas listed stocks | 688563.SH | Baimtec Material | 73,174,942.80 | Fair value | 73,174,942.80 | -9,947,966.08 | -9,947,966.08 | 63,226,976.72 | Financial assets held for trading | Self-funded | |||
| Domestically/ overseas listed stocks | 002123.SZ | Montnets Technology | 65,764,930.00 | Fair value | 65,764,930.00 | -28,818,527.00 | 68,770,034.00 | -28,818,527.00 | 105,716,437.00 | Financial assets held for trading | Self-funded | ||
| Domestically/ overseas listed stocks | Others | 46,403,055.00 | Fair value | 46,403,055.00 | -11,654,214.00 | 21,355,500.00 | 51,712,461.20 | -16,046,093.80 | Financial assets held for trading | Self-funded | |||
| Trust products | 20,000,000.00 | Fair value | 175,347.20 | 20,000,000.00 | 175,347.20 | 20,175,347.20 | Financial assets held for trading | Self-funded |
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2024
| Funds | 332,290,725.57 | Fair value | 332,290,725.57 | -16,598,284.92 | 10,000,000.00 | 20,010,142.35 | -16,596,976.33 | 305,683,606.89 | Financial assets held for trading | Self-funded | |||
| Others | 133,662,614.39 | Fair value | 133,662,614.39 | 168,213.29 | 714,279,529.93 | 751,868,899.76 | 1,984,553.85 | 98,057,798.41 | Financial assets held for trading | Self-funded | |||
| Total | 671,296,267.76 | -- | 651,296,267.76 | -66,675,431.51 | 834,405,063.93 | 823,591,503.31 | -69,249,662.16 | 592,860,166.22 | -- | -- | |||
| Disclosure date of the board announcement approving the securities investments | 28 March 2024 | ||||||||||||
| Disclosure date of the general meeting announcement approving the securities investments (if any) | 20 April 2024 | ||||||||||||
(2) Investments in Derivative Financial Instruments
√ Applicable □Not applicable
1) Derivative Investments for Hedging Purposes in the Reporting Period
√ Applicable □Not applicable
Unit: RMB'0,000
| Type of derivative | Initial investment amount | Opening amount | Gain/loss on fair-value changes in the period | Cumulative fair-value changes recognized in equity | Purchased in the Reporting Period | Sold in the Reporting Period | Closing amount | Closing amount as % of the Company’s closing equity |
| Forward Foreign Exchange | 35,597.64 | 30,341.06 | 72.21 | 0.00 | 5,256.58 | 756.05 | 34,841.59 | 7.50% |
| Swap Foreign | 1,448.82 | 0.00 | 9.17 | 0.00 | 1,448.82 | 0.00 | 1,448.82 | 0.31% |
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2024
| Exchange | ||||||||
| 合计 | 37,046.46 | 30,341.06 | 81.38 | 0.00 | 6,705.40 | 756.05 | 36,290.41 | 7.81% |
| Description of significant changes in accounting policies and specific financial accounting principles in respect of the Company's hedges for the Reporting Period as compared to the prior reporting period | No significant change | |||||||
| Actual gains/losses in the Reporting Period | During the Reporting Period, the actual loss on derivative contracts for hedging purposes stood at RMB-813,800 | |||||||
| Results of hedges | Currently not available | |||||||
| Funding source | Self-funded | |||||||
| Risk analysis of positions held in derivatives during the Reporting Period and description of control measures (Including but not limited to market risk, liquidity risk, credit risk, operational risk, legal risk, etc.) | The above-mentioned hedging transactions are mainly intended to avert and prevent risks arising from fluctuations in exchange rates. In the Rules on the Management of Financial Derivative Transaction Business formulated by the Company, the operating rules, review and approval authority, routine management, and risk control mechanisms on the financial derivative transaction business have been prescribed to standardize business operation as well as prevent and control related risks. Chinese futures exchanges have established well-improved risk control mechanisms. As future exchanges assume the performance responsibility, there is a low probability of credit risk. The Company will strengthen the understanding and mastering of national policies and requirements of relevant governing bodies to avoid related credit and legal risks. | |||||||
| Changes in market prices or fair value of derivative products during the Reporting Period, specific methods used, and relevant assumption and parameter settings shall be disclosed for | Undue forward forex settlement and sale contracts are measured at fair value, i.e., the difference between the signing price of an undue forward forex settlement and sale contract held at the period-end and the bank’s forward forex rates at the period-end. | |||||||
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2024
| analysis of fair value of derivatives | |
| Legal matter (if applicable) | N/A |
| Disclosure date of the announcement about the board’s consent for the derivative investment (if any) | 28 March 2024 |
| Disclosure date of the announcement about the general meeting’s consent for the derivative investment (if any) | 20 April 2024 |
2) Derivative Investments for Speculative Purposes in the Reporting Period
√ Applicable □Not applicable
Unit: RMB'0,000
| Counterparty | Relationship with the Company | Related transaction | Type of derivative | Initial investment amount | Start date | End date | Opening investment amount | Purchased in the Reporting Period | Sold in the Reporting Period | Impairment allowance (if any) | Closing investment amount | Closing investment amount as % of the Company’s closing equity | Actual gain/loss in the Reporting Period |
| Shenwan Hongyuan Securities | N/A | No | Accumulator | 5,000.00 | 15 August 2023 | 19 August 2024 | 5,000.00 | 0 | 0 | 0 | 1,012.24 | 0.22% | -1,858.56 |
| China Merchants Bank | N/A | No | Foreign Exchange Options | 50.00 | 22 May 2024 | 22 August 2024 | 0 | 50 | 0 | 0 | 49.71 | 0.01% | -0.29 |
| Total | 5,050.00 | -- | -- | 5,000.00 | 50 | 0 | 0 | 1,061.95 | 0.23% | -1,858.85 | |||
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2024
| Funding source | Self-funded |
| Legal matter (if applicable) | N/A |
| Disclosure date of the announcement about the board’s consent for the derivative investment (if any) | 28 March 2024 |
| Disclosure date of the announcement about the general meeting’s consent for the derivative investment (if any) | 20 April 2024 |
| Risk analysis of positions held in derivatives during the Reporting Period and description of control measures (Including but not limited to market risk, liquidity risk, credit risk, operational risk, legal risk, etc.) | Risk analysis: 1. Decision-making risk: The Company's involvement in futures and derivatives trading is influenced by a variety of factors, including international and domestic economic policies, economic conditions, developments in the underlying commodity sectors, fluctuations in exchange rates and interest rates. Furthermore, this type of trading is inherently complex and requires a high level of specialisation, thus carrying a certain degree of risk in trading decision-making processes. 2. Market risk: Financial markets are susceptible to macroeconomic conditions, industry cycles, and numerous other influences, causing linked underlyings in snowball products to fluctuate during holding periods, leading to variable valuations that could result in substantial gains or losses. Exchange rate movements are bi-directional; in the context of forward exchange rates, there's a possibility that locked-in forward exchange transactions may lead to settlement exchange rates below the company's book rate on the delivery date, potentially generating foreign exchange losses. Additionally, due to factors tied to futures and other derivative markets, futures prices and spot prices might exhibit discrepancies in timing and volatility, such that during the hedging period, related businesses could incur either additional profits or losses. 3. Liquidity risk: A sudden and extreme shift in the relevant price index, or managing excessively large positions, could potentially result in untimely margin calls and force the liquidation of positions, thereby exposing the Company to liquidity risks. 4. Policy and legal risks: The Company may suffer losses due to alterations in the legal framework, non-compliance with relevant laws, regulations, or contractual breaches by counterparties, leading to improper execution of contracts. 5. Other risks: During transaction execution, failing to adhere to standard procedures for derivatives trading or inadequate comprehension of derivative product information can introduce operational risks, potentially leading to losses stemming from non-compliant actions or unforeseen legal contingencies. Description of control measures: 1. In the Rules on the Management of Financial Derivative Transaction Business formulated by the Company, the operating rules, review and approval authority, routine management, and risk control mechanisms on the financial derivative transaction business have been prescribed to standardise business operation as well as prevent and control related risks. 2. The Company will diligently select qualified financial institutions for partnership and may engage experienced external professionals when needed to offer advisory services. This ensures thorough and methodical research and analysis prior to investments, thereby minimising operational risks and performance uncertainties. 3. Throughout its business operations, the Company and its associates rigorously comply with applicable national laws and regulations to avert legal hazards. They conduct regular supervision and inspections to ensure the derivatives business's standardisation, internal control efficacy, and information disclosure accuracy. They closely monitor shifts in domestic and international regulatory policies and changes to |
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2024
| relevant rules, proactively adjusting hedging strategies accordingly to mitigate potential policy risks well ahead of time. 4. Domestic futures exchanges maintain a robust risk control framework, assuming clearing responsibilities, thereby reducing the likelihood of credit risk significantly. The Company will diligently stay informed and aligned with national policies and management body requirements to mitigate credit and legal risks effectively. 5. The Company will steadfastly uphold cautious investment principles, consistently enhancing its analysis and research on economic policies, market conditions, and environmental shifts, promptly adjusting its investment strategies and scales as needed. Moreover, it will continuously fortify the professional education of its team members, elevating the proficiency of its practitioners. 6. The internal audit departments of the Company are responsible for supervising and verifying the implementation of futures and derivatives trading business, proposing timely rectification opinions on existing problems, and reporting to the Audit Committee of the Board of Directors of the Company. | |
| Changes in market prices or fair value of derivative products during the Reporting Period, specific methods used, and relevant assumption and parameter settings shall be disclosed for analysis of fair value of derivatives | Based on market value changes |
| Description of significant changes in accounting policies and specific financial accounting principles in respect of the Company's derivatives for the Reporting Period as compared to the prior reporting period | No significant change |
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2024
5. Use of Raised Funds
□ Applicable √ Not applicable
No such cases in the Reporting Period.Ⅶ Sale of Major Assets and Equity Investments
1. Sale of Major Assets
□ Applicable √ Not applicable
No such cases in the Reporting Period.
2. Sale of Major Equity Investments
□ Applicable √ Not applicable
No such cases in the Reporting Period.
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2024
Ⅷ Principal Subsidiaries and Joint Stock Companies
√ Applicable □ Not applicable
Principal subsidiaries and joint stock companies with an over 10% effect on the consolidated net profit:
Unit: RMB yuan
| Name | Relationship with the Company | Principal activities | Registered capital | Total assets | Net assets | Operating revenue | Operating profit | Net profit |
| Fosber Group | Subsidiary | R&D, processing, manufacturing, and marketing of corrugated cardboard production lines and parts, as well as provision of after-sales services | EUR1.56 million | 2,564,663,729.38 | 1,126,610,856.68 | 1,352,396,171.63 | 274,451,890.62 | 203,374,841.91 |
| Shunyi Investment | Subsidiary | Shunyi Investment is principally engaged in business entity and project investments, etc. It is the direct controlling shareholder of Parsun Power. | RMB10 million | 752,919,318.77 | 474,494,504.87 | 378,130,282.90 | 59,434,716.95 | 51,812,986.37 |
Ⅸ Structured Bodies Controlled by the Company
√ Applicable □ Not applicable
1. In March 2021, the Company established Tianjin Hangchuang Zhijin Investment Partnership (LimitedPartnership) (the "Tianjin Hangchuang Fund") with AVIC Innovation Capital Management Co., Ltd. The Company,as the sole LP of the Fund, subscribed for the Partnership's contribution share of RMB20,000,000. The Fund is aspecial fund which is to invest in the equity of Sichuan Dajin Stainless Steel Co., Ltd. (now renamed as ChengduDajin Aero-Tech Co., Ltd.).This investment is in line with the Company’s development strategy considering the Fund’s investmentdirection, decision-making, management, income distribution, loss allocation, etc. From the perspective of business
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2024
nature, the Company provides much of the capital of the Tianjin Hangchuang Fund, so it is reasonable to includethe Fund in the Company’s consolidated financial statements of the Reporting Period.
2. In March 2022, the wholly owned subsidiary Yineng Investment indirectly invested in Beijing SinoscienceFullcryo Technology Co., Ltd. (referred to as "Fullcryo" in this Report) and Sinoscience Fullcryo (Zhongshan)Equipment Manufacturing Co., Ltd. by making a capital contribution to a limited partnership and obtained non-controlling interests of the two companies.As one of the limited partners of the partnership, Yineng Investment accounts for 94.86% of the total capitalcontributions. Considering the partnership's agreements on investment orientation, investment decisions, operationand management, income apportionment, and loss bearing, and the fact that Yineng Investment accounts for themajority of the capital contributions to the partnership, the partnership is included in the consolidated statements ofDongfang Precision as a "structured body controlled by the Company" from the perspective of commercialsubstance and after complying with the Accounting Standard for Business Enterprises and referring to theprofessional opinions of the independent auditor.Ⅹ. Possible risks and countermeasures
1. Risks arising from fluctuations in exchange rates
The main settlement currency and recording currency of Fosber Group, the principal overseas business entityof the Company, are euros, while the revenue of Fosber America and domestic entities from export is mainly settledwith the US dollar. Fluctuations in the US dollar and euro exchange rates do not significantly impact the routineoperation of overseas business entities but exert certain impacts on the presentation of their assets and operatingresults in the consolidated financial statements.
In the first half of 2024, the RMB exchange rate exhibited a “rise first, then fall” curve. Factors such as domesticmacroeconomic conditions and policies, changes in the Federal Reserve’s interest rate cut expectations, globalgeopolitical and trade situation changes, central bank monetary policy changes, international balance of payments,inflation rates, and interest levels can all affect the RMB exchange rate. Under the comprehensive influence ofmultiple complex factors, the volatility of the RMB foreign exchange market has significantly increased.
Countermeasures:
The Company can closely track the global financial market and national exchange rate policies, make timelydecisions to select proper exchange rate management tools to manage exchange rate risks actively. It can also reducerisk exposure and increase exchange gains by increasing debts of foreign currency and rely on Group managementto strengthen the level of capital coordination in different countries and regions, balance, and offset fluctuation risksat the Group level.
2. Potential risks of financial investment business
In recent years, the Company has arranged some of its idle owned funds to carry out financial investmentbusiness such as securities investment and entrusted wealth management in an appropriate manner, based on theactual and development needs. There are certain risks of carrying out the above business due to fluctuations in thefinancial market and uncertainty of income; and the risk that the Company may suffer certain investment losses incase of risk events in the process of wealth management activities in terms of investment strategies and use of funds.
Countermeasures:
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2024
On the premise that the funds required for the daily operation of the main business will not be affected, theCompany reasonably controls the capital scale for financial investment; it establishes and improves the internalcontrol system and mechanism standards for securities investment and entrusted financial management, andstrengthens the risk control management of securities investment business, safeguard the safety of investment funds,and strictly control the risk exposure. In accordance with the economic situation and changes in the financial market,it continuously tracks and analyses the progress of securities investment and the investment of funds, the progressof project investment and the performance of the capital market, and timely takes corresponding preservationmeasures to control investment risks.
Ⅹ. Implementation of the “Quality and Earnings Dual Improvement” Action Plan
Indicate whether the Company has disclosed the “Quality and Earnings Dual Improvement” Action Plan.
□ Yes √ No
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2024
Part IV Corporate GovernanceI Annual and Extraordinary General Meetings Convened during the Reporting Period
1. General Meeting Convened during the Reporting Period
| Meeting | Type | Investor participation ratio | Date of the meeting | Disclosure date | Resolution |
| The 2023 Annual General Meeting | Annual General Meeting | 36.37% | 2024-04-19 | 2024-04-20 | 1. The Proposal on the 2023 Work Report of the Board of Directors (including the 2023 Work Report of Independent Directors) was approved. 2. The Proposal on the 2023 Work Report of the Supervisory Committee was approved. 3. The Proposal on the 2023 Annual Report and Its Summary was approved. 4. The Proposal on the 2023 Final Financial Accounts was approved. 5. The Proposal on the 2024 Budget was approved. 6. The Proposal on the 2023 Final Dividend Plan was approved. 7. The Proposal on the 2023 Internal Control Assessment Report was approved. 8. The Proposal on Intention to Appoint the Independent Auditor for 2024 was approved. 9. The Proposal on the Use of Own Funds for Entrusted Wealth Management in 2024 was approved. 10. The Proposal on 2024 Estimated Quota of Futures and Derivatives Transactions was approved. 11. The Proposal on provide guarantees for wholly-owned subsidiaries |
| The First Extraordinary General Meeting of 2024 | Extraordinary General Meeting | 33.35% | 2024-05-27 | 2024-05-28 | 1. The Proposal on the Unfulfilled Conditions for the Release of Restricted Shares during the Second Release Period of Part of the First Grant under the 2022 Restricted Share Incentive Scheme and the Repurchase and Cancellation of Part of the Restricted Shares. 2. The Proposal on Change of the Company's Registered Capital and Amendments to the Company's Articles of Association was approved. |
2. Extraordinary General Meetings Convened at the Request of Preference Shareholders with ResumedVoting Rights
□ Applicable ? Not applicable
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2024
II Changes of Directors, Supervisors and Senior Management
□ Applicable ? Not applicable
The Company’s directors, supervisors and senior management remained unchanged during the Reporting Period.For details, see the 2023 Annual Report.III Dividend Plan for the Reporting Period
□ Applicable ? Not applicable
The Company has no semi-annual dividend plan, either in the form of cash or stock.IV Equity Incentive Plans, Employee Stock Ownership Plans or Other Incentive Measures forEmployees? Applicable □ Not applicable
1. Equity Incentives
To refine its long-term incentive mechanism, boost the enthusiasm of management personnel and keyemployees of all levels, effectively promote long-term development, and achieve the objective of “Promoting TeamStability and Morale, Attract Talent and Improve Operating Performance”, the Company launched the 2020Restricted Share Incentive Plan in the first quarter of 2020. For details, see the Summary of the 2020 RestrictedShare Incentive Plan disclosed by the Company on www.cninfo.com.cn dated 12 March 2020.To further build and improve its long-term incentive mechanism, attract, and retain talent, fully motivate itskey managerial, technological, and business personnel, effectively align the Company’s and shareholders’ interestswith the personal interests of the core team, and make all the parties concerned to focus on the long-termdevelopment of the Company, the Company launched the 2022 Restricted Share Incentive Plan in the first quarterof 2022. For details, see the 2022 Restricted Share Incentive Plan disclosed by the Company on www.cninfo.com.cndated 15 March 2022.The implementations of the above-mentioned incentive plans during the Reporting Period are as follows:
1. On 5 February 2024, the Company held the Second (Interim) Meeting of the Fifth Session of the Board ofDirectors and the Second (Interim) Meeting of the Fifth Session of the Supervisory Committee, at which the''Proposal on the Achievement of the Conditions for Unlocking of the Sale of Shares during the Third UnlockingPeriod of the Reserved Grant Portion of the 2020 Restricted Share Incentive Plan'' was considered and passed. On26 February 2024, the shares released from lock-up during the third lock-up release period of the Company's 2020Restricted Share Incentive Plan were listed and put into circulation, and the number of incentive recipients whofulfilled the conditions for release from lock-up was 17, and the total number of incentive shares released from lock-up was 1,632,000 shares.
2. On 9 May 2024, the Company held the Fifth (Interim) Meeting of the Fifth Session of the Board of Directorsand the Fifth (Interim) Meeting of the Fifth Session of the Supervisory Committee, at which the ''Proposal on the
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2024
Failure to Achieve the Conditions for Unlocking of Sale of Part of the Second Unlocking Period of the First Awardof Part of the Restricted Share Incentive Scheme in 2022 and the Repurchase and Cancellation of Part of theRestricted Shares'' was considered and passed in light of the fact that the Company-level performance appraisal forthe second unlocking period In view of the fact that the Company's performance appraisal target for the secondrelease period had not been achieved and the conditions for the release of restricted shares for the second releaseperiod had not been fulfilled, in accordance with the Incentive Scheme, the Company shall repurchase and cancel880,000 shares of restricted shares held by 5 incentive recipients corresponding to the second release period of thefirst grant portion of the Restricted Share Incentive Scheme for the year 2022 in accordance with the grant price.On 27 May 2024, the First Extraordinary General Meeting of 2024 was convened by the Company, at whichthe ''Proposal on the Unfulfilled Conditions for the Release of Restricted Shares during the Second Release Periodof the First Grant of Part of the Restricted Share Incentive Plan of 2022 and the Repurchase and Cancellation ofPart of the Restricted Shares'' was considered and passed.
2. Implementation of Employee Stock Ownership Plans
□ Applicable ? Not applicable
3. Other Incentive Measures for Employees
□ Applicable ? Not applicable
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2024
Part V Environmental and Social Responsibilities
I Significant Environmental IssuesWhether the listed company and its subsidiaries fell into major pollutant-discharge enterprises and institutions published bynational environmental protection authorities.
□ Yes √ No
The Company and its subsidiaries did not fall into major pollutant-discharge enterprises and institutions published by nationalenvironmental protection authorities, and the Company was not administratively punished for environmental issues in the ReportingPeriod. For other environmental information, please refer to “II Social Responsibilities” below.Measures taken to reduce carbon emissions in the Reporting Period and the impact:
? Applicable □ Not applicable
The subsidiary Fosber Italia has established and implemented a sustainability management system and is certified inaccordance with the following international standards: ISO 45001:2018, ISO 9001:2015, ISO 14001:2015, EMAS (European UnionEco-Management and Audit System) and SA8000:2014.
Our subsidiary, Esaote Power, will build a rooftop photovoltaic power plant with an installed capacity of 1MW in 2023,adopting the method of self-consumption of power generation and feed-in of surplus power, which saves fossil energy consumptionand reduces carbon emissions at the same time.II Social Responsibilities
The Company attached importance to fulfil social responsibility in daily operations, intending to promote the harmony and co-prosperity between it and parties related to its interests. The Company also took active measures in the protection of the rights andinterests of shareholders, creditors, employees, suppliers, customers and consumers, environmental protection, sustainabledevelopment, public relations and social public welfare undertakings, and strived to maximize comprehensive social benefitsincluding the sustainable development of itself.
(1) Corporate governance: During the Reporting Period, the Company strictly abided by the Company Law, the Securities Lawand Code of Corporate Governance for Listed Companies, continued to refine the corporate governance structure, improve theinternal control system, formed the decision-making system comprising the Shareholders' General Meeting, the Board of Directors,the Supervisory Committee and the Management, and timely fulfilled its obligation of information disclosure according to laws andregulations and effectively safeguarded the rights and interests of all shareholders.
(2) Rights and interests of employees: The Company provided employees with welfare and care by providing holiday gifts andholding employee birthday parties, annual meetings and team building activities, improved employees' professional competence byoffering regular or irregular training to employees in the headquarters and domestic and foreign branches and subsidiaries, andcontinued to improve the competitive comprehensive remuneration system to retain and attract talents needed for the Company'ssustainable development.
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2024
(3) Relationship with customers and suppliers: Long adhering to the principle of "honest business" and "mutual benefit andwin-win", the Company took the initiative to construct and develop strategic partnership with suppliers and customers and jointlybuilt a platform of trust and cooperation, and earnestly fulfilled its social responsibilities to suppliers, customers and consumers. TheCompany has been well performing contracts with suppliers and customers and ensuring that the rights and interests of all parties arehighly valued and duly protected.
(4) Safety Production: The company strictly complies with relevant laws and regulations such as the “Labor Law” and the“Labor Contract Law,” focusing on people and addressing employees’ needs. It strives to improve employees’ working and livingenvironments and has established a union to effectively protect employees’ interests. The company provides labor protection suppliesbased on the hazardous factors encountered in different positions, organizes occupational health examinations for employees (beforestarting work, during work, and before leaving work), and purchases “safety liability insurance” for high-risk positions. DongfangPrecision and Fosber Asia have both obtained the “Level 3 Enterprise (Machinery) Safety Production Standardization Certificate,”and Parsun Power has passed the “Level 2 Safety Production Standardization Rating.”
(5) Environmental Protection: The parent company of Dongfang Precision has obtained the “National Pollution DischargePermit” and commissioned a qualified third-party environmental agency to draft the “Emergency Response Plan for SuddenEnvironmental Incidents.” The company has established an “Environmental Self-Monitoring Plan,” commissioning a third party toinstall and operate 24-hour online sewage flow monitoring equipment and commissioning a third-party monitoring agency to conductquarterly tests on wastewater, exhaust gas, and noise, providing third-party test reports. The parent company’s environmentalfacilities (exhaust gas treatment facilities and wastewater treatment facilities) have passed the OHSAS18001:2007 OccupationalHealth and Safety Management System and the ISO14001:2015 Environmental Management System certification reviews and havebeen rated as a “Foshan Clean Production Enterprise.” The subsidiary Parsun Power has obtained the “National Pollution DischargePermit” and passed the ISO14001:2015 Environmental Management System certification, purchasing environmental protectionequipment including a 50,000m3/h organic exhaust gas treatment device and an exhaust gas recovery system, which can meet dailypollutant treatment requirements.
(6) Anti-fraud: The Group complied a thorough internal authorization manual that detailed provisions on internal authorizationprocess of major matters to ensure appropriate internal control and reduce the risk of fraud. In order to create a fair, just, honest andnon-corrupt internal business environment and strengthen internal monitoring, the Company also established and launched the anti-fraud reporting platform to encourage employees to report fraud findings.
(7) Social Honors: Dongfang Precision is a national high-tech enterprise and has been successively rated as one of the “Top 500Private Manufacturing Enterprises in China,” “Top 100 Private Manufacturing Enterprises in Guangdong Province,” “ProvincialIndustrial Design Center in Guangdong Province,” “Leading Enterprise in Subdivided Industry in Foshan,” and “Invisible ChampionEnterprise in Manufacturing in Foshan.” The subsidiary Fosber Asia has been recognized as a “Guangdong Province IntellectualProperty Demonstration Enterprise”. The subsidiaries Wonder Digital and Parsun Power are national-level specialized and new“Little Giant” enterprises. The subsidiary Parsun Power is a national high-tech enterprise, the Jiangsu Provincial Outboard MotorEngineering Technology Research Center, the Jiangsu Provincial Recognized Enterprise Technology Center, a pioneer enterprise inthe Chinese internal combustion engine industry, and a governing unit of the Small Gasoline Engine Branch of the China InternalCombustion Engine Industry Association. Parsun Power’s outboard motor products have also received the National Torch ProgramIndustrialization Demonstration Project Certificate, the China Machinery Industry Innovative Product, the Jiangsu Province FamousBrand Product, and the Suzhou City Famous Brand Product, among other honors.
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2024
Part VI Significant EventsI Undertakings of the Company’s Actual Controller, Shareholders, Related Parties andAcquirers, as well as the Company Itself and Other Entities Fulfilled in the Reporting Periodor Unfulfilled and Overdue at the Period-End
□ Applicable ? Not applicable
No such cases in the Reporting Period.II Occupation of the Company’s Capital by the Controlling Shareholder or Other RelatedParties for Non-Operating Purposes
□ Applicable ? Not applicable
No such cases in the Reporting Period.III Irregularities in Provision of Guarantees
□ Applicable ? Not applicable
No such cases in the Reporting Period.
IV Engagement and Disengagement of Independent AuditorWhether the semi-annual financial report was audited.
□ Yes √ No
The semi-annual financial report was not audited.V Explanations Given by the Board of Directors and the Supervisory Committee Regarding theIndependent Auditor's “Modified Opinion” on the Financial Statements of the ReportingPeriod
□ Applicable ? Not applicable
VI Explanations Given by the Board of Directors Regarding “Modified Opinion” on theFinancial Statements of Last Year
□ Applicable ? Not applicable
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2024
VII Insolvency and Reorganization
□ Applicable ? Not applicable
No such cases in the Reporting Period.VIII Legal MattersSignificant Legal Matters
□ Applicable ? Not applicable
No such cases in the Reporting Period.Other Legal Matter
□ Applicable ? Not applicable
IX Punishments and Rectifications
□ Applicable ? Not applicable
No such cases in the Reporting Period.X Credit Quality of the Company as well as Its Controlling Shareholder and Actual Controller
□ Applicable ? Not applicable
XI Significant Related-Party Transactions
1. Continuing Related-Party Transactions
□ Applicable ? Not applicable
No such cases in the Reporting Period.
2. Related-Party Transactions Regarding Purchase or Sales of Assets or Equity Investments
□ Applicable ? Not applicable
No such cases in the Reporting Period.
3. Related-Party Transactions Regarding Joint Investments in Third Parties
□ Applicable ? Not applicable
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2024
No such cases in the Reporting Period.
4. Amounts Due to and from Related Parties
□ Applicable ? Not applicable
No such cases in the Reporting Period.
5. Transactions with Related Financial Companies
□ Applicable ? Not applicable
No such cases in the Reporting Period.
6. Transactions between the finance company controlled by the company and related parties
□ Applicable ? Not applicable
No such cases in the Reporting Period.
7. Other Significant Related-Party Transactions
□ Applicable ? Not applicable
No such cases in the Reporting Period.XII Significant Contracts and Execution thereof
1. Entrustment, Contracting and Leases
(1) Entrustment
□ Applicable ? Not applicable
No such cases in the Reporting Period.
(2) Contracting
□ Applicable ? Not applicable
No such cases in the Reporting Period.
(3) Leases
□ Applicable ? Not applicable
No such cases in the Reporting Period.
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2024
2. Significant Guarantees
? Applicable □ Not applicable
Unit: RMB’0,000
| Guarantees provided by the Company as the parent and its subsidiaries for external parties (exclusive of those for subsidiaries) | ||||||||||
| Obligor | Disclosure date of the guarantee line announcement | Line of guarantee | Actual occurrence date | Actual guarantee amount | Type of guarantee | Security (if any) | Counter-guarantees (if any) | Term of guarantee | Having expired or not | Guarantee for a related party or not |
| Guarantees provided by the Company as the parent for its subsidiaries | ||||||||||
| Obligor | Disclosure date of the guarantee line announcement | Line of guarantee | Actual occurrence date | Actual guarantee amount | Type of guarantee | Security (if any) | Counter-guarantees (if any) | Term of guarantee | Having expired or not | Guarantee for a related party or not |
| Dongfang Precision (Netherland) | 2023-06-14 | No more than EUR34.5 million | 2023-06-15 | EUR34.4056 million | Joint liability; Pledge | Security deposits | -- | From the date when the guarantee took effect to 15 June 2024 | Yes | No |
| Tiru?a Asia | 2024-03-28 | No more than RMB 1 billion | 2024-04-28 | RMB67.0375 million | Joint liability | -- | -- | From the effective date of the security agreement until three years after the maturity of the loan | No | No |
| Total approved line for such guarantees in the Reporting Period (B1) | No more than RMB 1 billion | Total actual amount of such guarantees in the Reporting Period (B2) | RMB 330.6429 million | |||||||
| Total approved line for such guarantees at the end of the Reporting Period (B3) | No more than RMB 1 billion | Total actual balance of such guarantees at the end of the Reporting Period (B4) | RMB67.0375 million | |||||||
| Guarantees provided between subsidiaries | ||||||||||
| Obligor | Disclosure date of the guarantee line announcement | Line of guarantee | Actual occurrence date | Actual guarantee amount | Type of guarantee | Security (if any) | Counter-guarantees (if any) | Term of guarantee | Having expired or not | Guarantee for a related party or not |
| QCorr | 2020-05-15 | No more than | 30 April 2020 | EUR0.4124 million | General Guarantee | - | - | From the date when | Yes | No |
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2024
| EUR3 million | the guarantee took effect to 30 June 2024 | |||||
| Total approved line for such guarantees in the Reporting Period (C1) | 0 | Total actual amount of such guarantees in the Reporting Period (C2) | 0 | |||
| Total approved line for such guarantees at the end of the Reporting Period (C3) | 0 | Total actual balance of such guarantees at the end of the Reporting Period (C4) | 0 | |||
| Total guarantee amount (total of the three kinds of guarantees above) | ||||||
| Total guarantee line approved in the Reporting Period (A1+B1+C1) | No more than RMB 1 billion | Total actual guarantee amount in the Reporting Period (A2+B2+C2) | RMB 330.6429 million | |||
| Total approved guarantee line at the end of the Reporting Period (A3+B3+C3) | No more than RMB 1 billion | Total actual guarantee balance at the end of the Reporting Period (A4+B4+C4) | RMB67.0375 million | |||
| Total actual guarantee amount (A4+B4+C4) as % of the Company’s net assets | 1.44% | |||||
| Of which: | ||||||
| Balance of guarantees provided for shareholders, the actual controller and their related parties (D) | 0 | |||||
| Balance of debt guarantees provided directly or indirectly for obligors with an over 70% debt/asset ratio (E) | RMB67.0375 million | |||||
| Amount by which the total guarantee amount exceeds 50% of the Company’s net assets (F) | 0 | |||||
| Total of the three amounts above (D+E+F) | RMB67.0375 million | |||||
| Joint liability possibly borne or already borne in the Reporting Period for outstanding guarantees (if any) | N/A | |||||
| Guarantees provided in breach of prescribed procedures (if any) | N/A | |||||
3. Cash Entrusted for Wealth Management
? Applicable □ Not applicable Unit: RMB’0,000
| Type | Funding source | Amount | Undue amount | Unrecovered overdue amount | Impairment provision for unrecovered overdue amount |
| Bank’s wealth management product | Self-funded | 24,600.00 | 9,800.00 | 0.00 | 0.00 |
| Securities firm’s wealth management product | Self-funded | 32,700.00 | 32,700.00 | 0.00 | 0.00 |
| Trust product | Self-funded | 2,000.00 | 2,358.62 | 358.62 | 358.62 |
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2024
| Total | 59,300.00 | 44,858.62 | 358.62 | 358.62 |
High-risk wealth management transactions with a significant single amount or with low security, low liquidity, and no principalprotection:
□ Applicable ? Not applicable
Wealth management transactions where the principal is expectedly irrecoverable or an impairment may be incurred:
? Applicable □ Not applicableAs of the end of the Reporting Period, the unrecovered amount of trust products was RMB3.5862 million, for which an impairmentallowance of RMB3.5862million was established.
4. Other Significant Contracts
□ Applicable ? Not applicable
No such cases in the Reporting Period.
XIII Other Significant Events
□ Applicable ? Not applicable
XIV Significant Events of Subsidiaries
□ Applicable ? Not applicable
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2024
Part VII Share Changes and Shareholder InformationI Share Changes
1. Share Changes
Unit: share
| Before | Increase/decrease in the period (+/-) | After | |||||||
| Shares | Percentage (%) | New issues | Shares as dividend converted from profit | Shares as dividend converted from capital reserves | Other | Subtotal | Shares | Percentage (%) | |
| 1. Restricted shares | 226,372,533 | 18.25% | 0 | 0 | 0 | -2,398,000 | -2,398,000 | 223,974,533 | 18.37% |
| 1.1 Shares held by the government | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| 1.2 Shares held by state-owned corporations | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| 1.3 Shares held by other domestic investors | 226,212,533 | 18.23% | 0 | 0 | 0 | -2,238,000 | -2,238,000 | 223,974,533 | 18.37% |
| Including: Shares held by domestic corporations | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| Shares held by domestic individuals | 226,212,533 | 18.23% | 0 | 0 | 0 | -2,238,000 | -2,238,000 | 223,974,533 | 18.37% |
| 1.4 Shares held by overseas investors | 160,000 | 0.01% | 0 | 0 | 0 | -160,000 | -160,000 | 0 | 0.00% |
| Including: Shares held by overseas corporations | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| Shares held by overseas individuals | 160,000 | 0.01% | 0 | 0 | 0 | -160,000 | -160,000 | 0 | 0.00% |
| 2. Unrestricted shares | 1,014,245,867 | 81.75% | 0 | 0 | 0 | -19,174,060 | -19,174,060 | 995,071,807 | 81.63% |
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2024
| 2.1 RMB-denominated ordinary shares | 1,014,245,867 | 81.75% | 0 | 0 | 0 | -19,174,060 | -19,174,060 | 995,071,807 | 81.63% |
| 2.2 Domestically listed foreign shares | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| 2.3 Overseas listed foreign shares | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| 2.4 Others | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| 3. Total shares | 1,240,618,400 | 100.00% | 0 | 0 | 0 | -21,572,060 | -21,572,060 | 1,219,046,340 | 100.00% |
Reasons for share changes:
? Applicable □ Not applicable
1. Cancellation of 21,572,060 retired shares
On 1 February 2024, the Company disclosed the Announcement on Completion of the Implementation of Share Repurchase andChanges in Shares, announcing the completion of the implementation of the 2023 share repurchase program launched in January 2023.During the implementation period of such share repurchase, the Company repurchased a total of approximately 21,572,060 shares ofthe Company through centralized bidding transactions, accounting for approximately 1.74% of the total share capital of the Company,with the highest traded price at RMB4.89 per share and the lowest traded price at RMB4.50 per share, and the total cumulative paymentamounted to approximately RMB10,077,500,000 (excluding transaction costs).On 4 March 2024, the Company issued the ''Announcement on the Completion of Cancellation of Repurchased Shares and Changes inShares'', in which the aforesaid 21,572,060 shares of public shares had been repurchased and the cancellation had been completed.
2. Release of certain restricted shares from restricted sale
(1) Unlocking of restricted shares for equity incentives
On 26 February 2024, the shares released from lock-up during the third lock-up release period of the portion of the Company's 2020Restricted Share Incentive Plan reserved for the grant were listed for sale, and the total number of shares released from lock-up was1,632,000 shares.
(2) Change in lock-up shares for senior management
In March 2024, the term of office of Mr. Zhou Wenhui, the outgoing director, as determined at the time of his assumption of office,expired and reached six months after the expiry of the term of office, and the shares held by him in Dongfang Precision were releasedfrom lock-up in accordance with the law and became outstanding shares.Approval of share changes:
√ Applicable □ Not applicable
In the Reporting Period, with respect to share changes involved in the “unlocking for public trading of shares in the third unlockingperiod for the reserved restricted shares under the 2020 Restricted Share Incentive Plan”, the Company followed the applicable lawsand regulations and its Articles of Association, executed the approval procedures with the general meeting and the Board of Directors,and obtained approval from the Shenzhen Stock Exchange.Transfer of share ownership:
√ Applicable □ Not applicable
In the Reporting Period, with respect to the transfers of share ownership involved in the “repurchase and retirement of some restrictedshares”, the Company completed the transfers with the Shenzhen branch of China Securities Depository and Clearing Co., Ltd. afterthey were approved by the Shenzhen Stock Exchange.
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2024
Progress of implementation of share buyback? Applicable □ Not applicableOn 1 February 2024, the Company disclosed the ''Announcement on the Completion of the Implementation of ShareRepurchase and Changes in Shares'', announcing the completion of the implementation of the share repurchaseprogram for the year 2023. During the implementation period of such share repurchase, the Company repurchaseda total of approximately 21,572,060 shares of the Company, representing approximately 1.74% of the total sharecapital of the Company, through centralized bidding transactions, with the highest transaction price at RMB4.89 pershare and the lowest transaction price at RMB4.50 per share, the total cumulative payment amounted toapproximately RMB10,077,550,000 (excluding transaction costs).Progress on reducing the repurchased shares by way of centralized bidding:
□ Applicable ? Not applicable
Effects of share changes on the basic earnings per share, diluted earnings per share, equity per shareattributable to the Company’s ordinary shareholders, and other financial indicators of the prior year and theprior accounting period, respectively:
□ Applicable ? Not applicable
Other information that the Company considers necessary or is required by the securities regulator to bedisclosed:
□ Applicable ? Not applicable
2. Changes in Restricted Shares
? Applicable □ Not applicable
Unit: share
| Shareholder | Opening restricted shares | Unlocked in the period | Increase in restricted shares in the period | Closing restricted shares | Reason for restriction | Date of unlocking |
| Xie Weiwei | 750,000 | 186,000 | 0 | 564,000 | Restricted shares of senior management | 2024-1-2 |
| Zhou Wenhui | 900,000 | 900,000 | 0 | 0 | The term of office established at the time of assumption of office has expired and reached six months after the expiry of the term of office, and the restriction on sale has been lifted in accordance with the law. | 2024-3-21 |
| Shao Yongfeng | 600,000 | 320,000 | 320,000 | 600,000 | Participated in the Restricted Share Incentive Plan of the | 2024-2-26 |
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2024
| Shareholder | Opening restricted shares | Unlocked in the period | Increase in restricted shares in the period | Closing restricted shares | Reason for restriction | Date of unlocking |
| Company/restricted shares of senior management | ||||||
| The other 16 awardees of the reserved grant of the 2020 Restricted Share Incentive Plan | 1,312,000 | 1,312,000 | 0 | 0 | Participated in the Restricted Share Incentive Plan of the Company | 2024-2-26 |
| Total | 3,562,000 | 2,718,000 | 320,000 | 1,164,000 | -- | -- |
II Issuance and Listing of Securities
□ Applicable ? Not applicable
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2024
III Shareholders and Their Shareholdings
Unit: share
| Number of ordinary shareholders at the period-end | 101,895 | Number of preference shareholders with resumed voting rights at the period-end (if any) (see note 8) | 0 | |||||
| 5% or greater ordinary shareholders or top 10 ordinary shareholders | ||||||||
| Name of shareholder | Nature of shareholder | Shareholding percentage | Total ordinary shares held at the period-end | Increase/decrease in the Reporting Period | Restricted ordinary shares held | Unrestricted ordinary shares held | Shares in pledge, marked or frozen | |
| Status | Shares | |||||||
| Tang Zhuolin | Domestic individual | 22.21% | 270,737,568 | 0 | 203,053,176 | 67,684,392 | In pledge | 110,090,000 |
| Tang Zhuomian | Domestic individual | 7.95% | 96,885,134 | 0 | 0 | 96,885,134 | In pledge | 41,660,000 |
| Pulead Technology Industry Co., Ltd. | State-owned corporation | 2.93% | 35,748,587 | 0 | 0 | 35,748,587 | -- | 0 |
| Luzhou Industrial Development Investment Group Co., Ltd. | State-owned corporation | 2.61% | 31,770,010 | 0 | 0 | 31,770,010 | -- | 0 |
| Qinghai Puren Intelligent Technology R & D Center (Limited Partnership) | Domestic non-state-owned corporation | 2.18% | 26,628,340 | 0 | 0 | 26,628,340 | -- | 0 |
| Qiu Yezhi | Domestic individual | 1.92% | 23,382,388 | 0 | 17,536,791 | 5,845,597 | -- | 0 |
| Hong Kong Securities Clearing Company Limited | Overseas corporation | 1.14% | 13,937,519 | -34,245,614 | 0 | 13,937,519 | -- | 0 |
| Liu Wucai | Domestic individual | 0.54% | 6,597,688 | 0 | 0 | 6,597,688 | -- | 0 |
| Beixin Ruifeng Fund - Industrial | Other | 0.51% | 6,171,777 | 0 | 0 | 6,171,777 | -- | 0 |
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2024
| and Commercial Bank of China - Beijing Hengyu Tianze Investment Management Co., Ltd. | ||||||||
| Liu Lijun | Domestic individual | 0.39% | 4,746,001 | 20,000 | 0 | 4,746,001 | -- | 0 |
| Strategic investor or general corporation becoming a top-10 ordinary shareholder in a rights issue (if any) (see note 3) | None | |||||||
| Related or acting-in-concert parties among the shareholders above | Mr. Tang Zhuolin and Mr. Tang Zhuomian are brothers. On 18 August 2010, they signed the Agreement on Acting in Concert. Pulead Technology Industry Co., Ltd. and Qinghai Puren Intelligent Technology R & D Center (Limited Partnership) are acting-in-concert parties. | |||||||
| Above shareholders entrusting or entrusted with voting rights, or waiving voting rights | Apart from that, the Company is not aware of any related or acting-in-concert parties among the other shareholders above. | |||||||
| Top 10 shareholders including the special account of repurchased shares (if any) (see note 11) | As of the end of the Reporting Period, there were21,330,432 shares in the Company’s special account for repurchase, accounting for 1.75% of its total share capital. As per the Shenzhen Stock Exchange Guideline No. 1 for the Self-regulation of Listed Companies—Business Handling, the existence of a special account of repurchased shares among the top 10 shareholders should be specifically stated but not included in the presentation of the top 10 shareholders. | |||||||
| Top 10 unrestricted ordinary shareholders | ||||||||
| Name of shareholder | Unrestricted ordinary shares held at the period-end | Shares by type | ||||||
| Type | Shares | |||||||
| Tang Zhuomian | 96,885,134 | RMB-denominated ordinary stock | 96,885,134 | |||||
| Tang Zhuolin | 67,684,392 | RMB-denominated ordinary stock | 67,684,392 | |||||
| Pulead Technology Industry Co., Ltd. | 35,748,587 | RMB-denominated ordinary stock | 35,748,587 | |||||
| Luzhou Industrial Development Investment Group Co., Ltd. | 31,770,010 | RMB-denominated ordinary stock | 31,770,010 | |||||
| Qinghai Puren Intelligent Technology R & D Center (Limited Partnership) | 26,628,340 | RMB-denominated ordinary stock | 26,628,340 | |||||
| Hong Kong Securities Clearing Company Limited | 13,937,519 | RMB-denominated ordinary stock | 13,937,519 | |||||
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2024
| Liu Wucai | 6,597,688 | RMB-denominated ordinary stock | 6,597,688 |
| Beixin Ruifeng Fund - Industrial and Commercial Bank of China - Beijing Hengyu Tianze Investment Management Co., Ltd. | 6,171,777 | RMB-denominated ordinary stock | 6,171,777 |
| Qiu Yezhi | 5,845,597 | RMB-denominated ordinary stock | 5,845,597 |
| Liu Lijun | 4,746,001 | RMB-denominated ordinary stock | 4,746,001 |
| Related or acting-in-concert parties among top 10 unrestricted ordinary shareholders, as well as between top 10 unrestricted ordinary shareholders and top 10 ordinary shareholders | Mr. Tang Zhuolin and Mr. Tang Zhuomian are brothers. On 18 August 2010, they signed the Agreement on Acting in Concert. Pulead Technology Industry Co., Ltd. and Qinghai Puren Intelligent Technology R & D Center (Limited Partnership) are acting-in-concert parties. Apart from that, the Company is not aware of any related or acting-in-concert parties among the other shareholders above. | ||
| Description of the participation of the top 10 common shareholders in the financing and securities financing business (if any) | The Company's shareholder, Luzhou Industrial Development Investment Group Co., Ltd. holds 31,770,010 shares through a client credit transaction guarantee securities account with Guotai Junan Securities Co. Ltd. | ||
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2024
Top 10 shareholders involved in refinancing shares lending:
□ Applicable √ Not applicable
Changes in top 10 shareholders compared with the prior period:
□ Applicable √ Not applicable
Indicate whether any of the top 10 ordinary shareholders or the top 10 unrestricted ordinary shareholders of theCompany conducted any promissory repo during the Reporting Period.
□ Yes ? No
No such cases in the Reporting Period
IV Changes in the Shareholdings of Directors, Supervisors and Senior Management
□ Applicable ? Not applicable
There were no changes in the shareholdings of the Company's directors, supervisors and senior managementduring the reporting period, which can be found in the Annual Report 2023.V Changes of the Company’s Controlling Shareholder and Actual Controller
Controlling Shareholder changed during the Reporting Period
□ Applicable ? Not applicable
No such cases in the Reporting Period.Actual Controller changed during the Reporting Period
□ Applicable ? Not applicable
No such cases in the Reporting Period.
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2024
Part VIII Preference Shares
□ Applicable ? Not applicable
No preference shares in the Reporting Period.
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2024
Part IX Corporate Bonds
□ Applicable ? Not applicable
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2024
Page 89 of 198
Part X Corporate Financial StatementsI Auditor’s ReportWhether the semi-annual financial statements were audited.
□ Yes ? No
The semi-annual financial statements were not audited.
II Financial StatementsCurrency unit for the tables in the notes to the financial statements: RMB yuan
1. Consolidated Balance Sheet
Prepared by: Guangdong Dongfang Precision Science & Technology Co., Ltd.
30 June 2024
Unit: RMB yuan
| Item | 30 June 2024 | 31 December 2023 |
| Current assets: | ||
| Cash and bank balances | 1,557,965,316.51 | 1,826,419,904.49 |
| Settlement provisions | ||
| Dismantling funds | ||
| Financial assets held for trading | 607,015,754.09 | 682,625,442.45 |
| Derivative financial assets | ||
| Notes receivable | 31,123,201.76 | 47,661,412.88 |
| Accounts receivable | 842,776,537.22 | 904,003,975.47 |
| Receivable financing | 22,923,994.65 | 9,365,344.07 |
| Prepayments | 41,289,117.33 | 45,741,143.90 |
| Premium receivable | ||
| Receivable reinsurance account |
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2024
Page 90 of 198
| Provision for reinsurance contract receivable | ||
| Other receivables | 39,417,246.69 | 51,797,943.96 |
| Including: Interest receivable | ||
| Dividend receivable | ||
| Buy back resale financial assets | ||
| Inventories | 1,300,425,341.66 | 1,182,411,055.68 |
| Of which, Data Resources | ||
| Contract assets | 46,416,016.67 | 45,946,377.14 |
| Assets held for sale | ||
| Current portion of non-current assets | 7,456,750.00 | 5,970,000.00 |
| Other current assets | 96,230,399.69 | 75,234,656.07 |
| Total current assets | 4,593,039,676.27 | 4,877,177,256.11 |
| Non-current assets: | ||
| Loans and advances | ||
| Debt investment | ||
| Other debt investments | ||
| Long-term receivables | 5,149,337.20 | 4,308,196.00 |
| Long-term equity investment | 114,307,542.37 | 117,265,884.84 |
| Investment in other equity instruments | ||
| Other non-current financial assets | 528,076,492.06 | 461,278,259.67 |
| Real estate investment | ||
| Fixed assets | 613,804,454.53 | 611,851,577.04 |
| Construction in progress | 260,781,111.24 | 195,557,097.80 |
| Productive biological assets | ||
| Oil and gas asset | ||
| Right-of-use assets | 75,944,108.52 | 82,342,398.83 |
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2024
Page 91 of 198
| Intangible assets | 350,014,243.27 | 365,954,480.05 |
| Of which, Data Resources | ||
| Development expenditure | ||
| Of which, Data Resources | ||
| Goodwill | 436,235,240.19 | 440,633,826.08 |
| Long-term prepaid expenses | 22,664,231.18 | 28,543,581.54 |
| Deferred tax assets | 249,355,211.99 | 255,872,409.78 |
| Other non-current assets | 89,564,193.76 | 97,437,602.28 |
| Total non-current assets | 2,745,896,166.31 | 2,661,045,313.91 |
| Total assets | 7,338,935,842.58 | 7,538,222,570.02 |
| Current liabilities: | ||
| Short-term borrowings | 93,156,553.78 | 370,549,972.80 |
| Borrowing from the Central Bank | ||
| Borrowed funds | ||
| Financial liabilities held for trading | 116,220,211.63 | 115,900,827.21 |
| Derivative financial liabilities | ||
| Notes payable | 167,522,939.78 | 152,433,276.09 |
| Accounts payable | 690,971,357.11 | 737,544,841.42 |
| Advance receivables | ||
| Contract liabilities | 553,691,546.87 | 645,608,919.34 |
| Selling back financial assets | ||
| Deposits and Interbank deposit | ||
| Agent trading securities | ||
| Agent underwriting securities | ||
| Employee benefits payable | 129,469,547.35 | 153,282,932.10 |
| Tax payable | 102,981,487.69 | 67,609,203.41 |
| Other payables | 124,061,681.76 | 126,415,425.61 |
| Including: Interest payable | ||
| Dividend payable |
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2024
Page 92 of 198
| Fees and commissions | ||
| Reinsurance accounts payable | ||
| Liabilities held for sale | ||
| Current portion of non-current liabilities | 65,098,573.42 | 57,001,396.44 |
| Other current liabilities | 9,007,089.25 | 9,145,175.01 |
| Total current liabilities | 2,052,180,988.64 | 2,435,491,969.43 |
| Non-current liabilities: | ||
| Insurance contract reserve | ||
| Long-term borrowings | 133,690,882.97 | 79,107,701.15 |
| Bonds payable | ||
| Including: Preference Shares | ||
| Perpetual bonds | ||
| Lease liabilities | 60,173,070.42 | 65,861,441.32 |
| Long-term payables | ||
| Long-term employee benefits payable | 13,459,377.58 | 13,964,394.20 |
| Provisions | 150,531,873.32 | 168,358,953.84 |
| Deferred income | 9,398,661.66 | 9,956,991.66 |
| Deferred tax liabilities | 3,068,415.55 | 8,854,294.28 |
| Other non-current liabilities | 22,635,906.84 | 22,418,854.80 |
| Total non-current liabilities | 392,958,188.34 | 368,522,631.25 |
| Total Liabilities | 2,445,139,176.98 | 2,804,014,600.68 |
| Equity: | ||
| Share capital | 1,219,046,340.00 | 1,240,618,400.00 |
| Other equity instruments | ||
| Including: Preference Shares | ||
| Perpetual bonds | ||
| Capital surplus | 2,811,791,319.77 | 2,889,928,997.21 |
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2024
Page 93 of 198
| Less: Treasury stock | 117,523,041.40 | 218,298,532.79 |
| Other comprehensive income | 46,038,557.30 | 75,122,078.52 |
| Special reserve | 16,839,612.27 | 16,229,817.03 |
| Surplus reserves | 51,830,974.45 | 51,830,974.45 |
| General risk preparation | ||
| Retained earnings | 620,139,431.69 | 456,258,959.55 |
| Total equity attributable to owners of the parent | 4,648,163,194.08 | 4,511,690,693.97 |
| Non-controlling interests | 245,633,471.52 | 222,517,275.37 |
| Total equity | 4,893,796,665.60 | 4,734,207,969.34 |
| Total liabilities and equity | 7,338,935,842.58 | 7,538,222,570.02 |
Legal representative: Tang Zhuolin Chief in charge of accounting work: Shao Yongfeng Head of accounting institution: Chen Nan
2. Parent Company Balance Sheet
Unit: RMB yuan
| Item | 30 June 2024 | 31 December 2023 |
| Current assets: | ||
| Cash and bank balances | 527,140,201.07 | 522,275,723.41 |
| Financial assets held for trading | 552,971,937.31 | 641,997,959.60 |
| Derivative financial assets | ||
| Notes receivable | 7,658,794.45 | 5,606,037.02 |
| Accounts receivable | 212,356,423.36 | 190,361,646.28 |
| Receivable financing | 17,869,499.43 | 4,268,677.09 |
| Prepayments | 6,059,859.05 | 5,298,841.09 |
| Other receivables | 487,194,509.81 | 654,825,093.49 |
| Including: Interest receivable | ||
| Dividend receivable | 187,729,679.60 | 272,564,800.00 |
| Inventories | 180,246,826.73 | 159,389,489.31 |
| Of which, Data Resources |
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2024
Page 94 of 198
| Contract assets | 22,116,997.59 | 22,201,442.67 |
| Assets held for sale | ||
| Current portion of non-current assets | 7,456,750.00 | 5,970,000.00 |
| Other current assets | 944,284.91 | 1,583,542.63 |
| Total current assets | 2,022,016,083.71 | 2,213,778,452.59 |
| Non-current assets: | ||
| Debt investment | ||
| Other debt investments | ||
| Long-term receivables | 5,149,337.20 | 4,308,196.00 |
| Long-term equity investment | 873,907,355.61 | 875,978,593.12 |
| Investment in other equity instruments | ||
| Other non-current financial assets | 225,886,448.05 | 148,108,670.05 |
| Real estate investment | ||
| Fixed assets | 288,385,313.70 | 296,287,511.68 |
| Construction in progress | 5,440,950.00 | 4,273,340.82 |
| Productive biological assets | ||
| Oil and gas asset | ||
| Right-of-use assets | 5,424,699.30 | 6,238,404.20 |
| Intangible assets | 54,143,025.89 | 55,652,155.93 |
| Of which, Data Resources | ||
| Development expenditure | ||
| Of which, Data Resources | ||
| Goodwill | ||
| Long-term prepaid expenses | 4,232,286.39 | 4,967,872.25 |
| Deferred tax assets | 166,790,216.19 | 174,616,613.96 |
| Other non-current assets | 73,528,512.50 | 72,919,162.50 |
| Total non-current assets | 1,702,888,144.83 | 1,643,350,520.51 |
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2024
Page 95 of 198
| Total assets | 3,724,904,228.54 | 3,857,128,973.10 |
| Current liabilities: | ||
| Short-term loan | 20,000,000.00 | 20,000,000.00 |
| Financial liabilities held for trading | 728.57 | 728.57 |
| Derivative financial liabilities | ||
| Notes payable | 49,067,448.74 | 39,577,380.86 |
| Accounts payable | 56,349,219.15 | 65,855,068.76 |
| Advance receivables | ||
| Contract liabilities | 56,381,340.41 | 53,704,255.92 |
| Employee benefits payable | 8,805,605.75 | 16,801,339.01 |
| Tax payable | 1,563,522.19 | 5,459,697.96 |
| Other payables | 54,071,905.42 | 103,498,597.36 |
| Including: Interest payable | ||
| Dividend payable | ||
| Liabilities held for sale | ||
| Current portion of non-current liabilities | 9,409,236.07 | 9,361,216.26 |
| Other current liabilities | 4,314,804.12 | 588,152.27 |
| Total current liabilities | 259,963,810.42 | 314,846,436.97 |
| Non-current liabilities: | ||
| Long-term borrowings | 28,588,000.00 | 32,436,000.00 |
| Bonds payable | ||
| Including: Preference Shares | ||
| Perpetual bonds | ||
| Lease liabilities | 4,309,857.64 | 5,166,917.05 |
| Long-term payables | ||
| Long-term employee benefits payable | ||
| Provisions | 1,018,330.37 | 1,418,799.52 |
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2024
Page 96 of 198
| Deferred income | 9,398,661.66 | 9,956,991.66 |
| Deferred tax liabilities | ||
| Other non-current liabilities | 0.00 | |
| Total non-current liabilities | 43,314,849.67 | 48,978,708.23 |
| Total Liabilities | 303,278,660.09 | 363,825,145.20 |
| Equity: | ||
| Share capital | 1,219,046,340.00 | 1,240,618,400.00 |
| Other equity instruments | ||
| Including: Preference Shares | ||
| Perpetual bonds | ||
| Capital surplus | 2,666,658,605.35 | 2,745,450,997.27 |
| Less: Treasury stock | 117,523,041.40 | 218,298,532.79 |
| Other comprehensive income | ||
| Special reserve | 6,333,938.53 | 6,645,318.98 |
| Surplus reserves | 51,830,974.45 | 51,830,974.45 |
| Retained earnings | -404,721,248.48 | -332,943,330.01 |
| Total equity | 3,421,625,568.45 | 3,493,303,827.90 |
| Total liabilities and equity | 3,724,904,228.54 | 3,857,128,973.10 |
3. Consolidated Income Statement
Unit: RMB yuan
| Item | H1 2024 | H1 2023 |
| 1 Total operating revenue | 2,161,188,907.40 | 2,082,606,453.72 |
| Including: Operating revenue | 2,161,188,907.40 | 2,082,606,453.72 |
| Interest income | ||
| Premiums earned | ||
| Fee and commission income | ||
| 2 Total operating cost | 1,800,173,050.63 | 1,830,369,837.74 |
| Including: Cost of sales | 1,468,050,770.60 | 1,472,630,144.11 |
| Interest expense |
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2024
Page 97 of 198
| Payment of fees and commission | ||
| Surrender fund | ||
| Net indemnity expenditure | ||
| Draw the net reserve of insurance liability contract | ||
| Policy dividend expense | ||
| Reinsurance cost | ||
| Taxes and surcharges | 9,481,412.61 | 8,282,476.90 |
| Selling expenses | 123,119,378.16 | 119,248,680.76 |
| Administrative expenses | 161,949,583.52 | 174,818,664.63 |
| R&D expenses | 50,366,067.58 | 59,929,020.05 |
| Finance costs | -12,794,161.84 | -4,539,148.71 |
| Including: Interest expenses | 10,539,931.90 | 5,872,796.16 |
| Interest income | 22,603,240.17 | 12,725,562.50 |
| Add: Other income | 10,323,357.51 | 4,339,827.39 |
| Investment income (loss with "-" sign) | -8,194,916.20 | 36,109,196.08 |
| Including: Share of profit or loss of joint ventures and associates | -2,914,122.66 | -2,332,949.80 |
| Income from derecognition of financial assets measured at amortised cost (loss with "-" sign) | ||
| Exchange gain (loss with "-" sign) | ||
| Net exposure hedging gain (loss with "-" sign) | ||
| Gain/loss on changes in fair value (loss with "-" sign) | -85,374,294.70 | 2,006,095.39 |
| Credit impairment loss (loss is listed with "-" sign) | 662,562.69 | -2,271,114.46 |
| Asset impairment loss (loss with "-" sign) | -5,743,282.79 | -5,612,938.09 |
| Gain/loss on disposal of assets (loss with "-" sign) | 5,094,479.46 | -2,277,157.05 |
| 3 Operating profit (losses are listed with "-" sign) | 277,783,762.74 | 284,530,525.24 |
| Add: Non-operating income | 939,908.99 | 2,034,810.24 |
| Less: Non-operating expenses | 389,972.29 | 1,131,918.48 |
| 5 Gross profit (the gross loss shall be filled in with the sign "-") | 278,333,699.44 | 285,433,417.00 |
| Less: Income tax expenses | 90,957,489.73 | 56,229,619.60 |
| Net profit (net loss is listed with "-" sign) | 187,376,209.71 | 229,203,797.40 |
| (1) Net profit from continuing operations |
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| i. Net profit from continuing operations (net loss with "-" sign) | 187,376,209.71 | 229,203,797.40 |
| ii. Net profit from termination of operation (net loss with "-" sign) | ||
| (2) Net profit classified by attribution of ownership | ||
| i. Net profit attributable to owners of the parent | 163,880,472.14 | 206,149,605.30 |
| ii. Net profit attributable to non-controlling interests | 23,495,737.57 | 23,054,192.10 |
| 6 Other comprehensive income/(loss), net of tax | -28,881,848.39 | 63,837,540.77 |
| Other comprehensive income/(loss) attributable to owners of the parent, net of tax | -29,083,521.22 | 64,443,141.24 |
| (1) Other comprehensive loss that will not be reclassified to profit or loss | 61,371.94 | -247,369.25 |
| i. Changes caused by remeasurements on defined benefit schemes | 61,371.94 | -247,369.25 |
| ii. Other comprehensive income that cannot be transferred to profit or loss under the equity method | ||
| iii. Changes in fair value of investments in other equity instruments | ||
| iv. Fair value change of enterprise's own credit risk | ||
| v. Other | ||
| (2) Other comprehensive income/(loss) that will be reclassified to profit or loss | -29,144,893.16 | 64,690,510.49 |
| i. Other comprehensive income that can be transferred to profit or loss under the equity method | ||
| ii. Changes in fair value of other debt investments | ||
| iii. The amount of financial assets reclassified to other comprehensive income | ||
| iv. Provision for credit impairment of other debt investments | ||
| v. Cash flow hedging reserve | ||
| vi. Differences arising from the translation of foreign currency-denominated financial statements | -29,144,893.16 | 64,690,510.49 |
| vii. Other | ||
| Other comprehensive income attributable to non-controlling interests, net of tax | 201,672.83 | -605,600.47 |
| Total comprehensive income | 158,494,361.32 | 293,041,338.17 |
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| Total comprehensive income attributable to owners of the parent | 134,796,950.92 | 270,592,746.54 |
| Total comprehensive income attributable to non-controlling interests | 23,697,410.40 | 22,448,591.63 |
| Earnings per share: | ||
| (1) Basic earnings per share | 0.14 | 0.17 |
| (2) Diluted earnings per share | 0.14 | 0.17 |
Legal representative: Tang Zhuolin Chief in charge of accounting work: Shao Yongfeng Head of accounting institution: Chen Nan
4. Parent Company Income Statement
Unit: RMB yuan
| Item | H1 2024 | H1 2023 |
| 1 Operating Revenue | 183,076,847.69 | 219,595,252.63 |
| Less: Cost of sales | 100,538,863.01 | 117,899,186.43 |
| Taxes and surcharges | 5,080,596.56 | 4,622,821.78 |
| Selling expenses | 13,018,716.98 | 18,963,858.37 |
| Administrative expenses | 32,618,565.06 | 47,531,438.00 |
| R&D expenses | 9,413,776.76 | 9,329,637.83 |
| Finance costs | -3,498,579.49 | -8,777,405.86 |
| Including: Interest expense | 2,157,788.10 | 443,302.69 |
| Interest income | 7,669,201.91 | 6,549,723.09 |
| Add: other income | 1,345,739.76 | 2,476,014.96 |
| Investment income (loss with "-" sign) | -5,482,815.06 | -4,520,432.89 |
| Including: Share of profit or loss of joint ventures and associates | -2,158,740.92 | -1,781,870.58 |
| Termination of recognition of gains on financial assets measured at amortised cost (loss with "-" sign) | ||
| Net exposure hedging gain (loss with "-" sign) | ||
| Gain/loss on changes in fair value (loss with "-" sign) | -85,765,352.26 | -5,837,992.54 |
| Credit impairment loss (loss is listed with "-" sign) | 419,338.54 | 336,909.99 |
| Asset impairment loss (loss with "-" sign) | -423,541.64 | -336,909.99 |
| Gain/loss on disposal of assets (loss with "-" sign) | -0.01 | |
| 2 Operating profit (loss shall be listed with "-" sign) | -64,001,721.85 | 22,143,305.60 |
| Add: Non-operating income | 50,204.16 | 285,781.66 |
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| Less: Non-operating expenses | 3.01 | 837,597.40 |
| 3 Gross profit (gross loss shall be filled in with the sign "-") | -63,951,520.70 | 21,591,489.86 |
| Less: Income tax expenses | 7,826,397.77 | 3,649,218.29 |
| 4 Net profit (net loss is listed with "-" sign) | -71,777,918.47 | 17,942,271.57 |
| (1) Net profit from continuing operation (net loss with "-" sign) | -71,777,918.47 | 17,942,271.57 |
| (2) Net profit from termination of operation (net loss with "-" sign) | ||
| 5 Other comprehensive income/(loss), net of tax | ||
| (1) Other comprehensive loss that will not be reclassified to profit or loss | ||
| i. Re-measure the change in the benefit plan | ||
| ii. Other comprehensive income that cannot be transferred to profit or loss under the equity method | ||
| iii. Changes in fair value of investments in other equity instruments | ||
| iv. Fair value change of enterprise's own credit risk | ||
| v. Other | ||
| (2) Other comprehensive income/(loss) that will be reclassified to profit or loss | ||
| i. Other comprehensive income that can be transferred to profit or loss under the equity method | ||
| ii. Changes in fair value of other debt investments | ||
| iii. The amount of financial assets reclassified to other comprehensive income. | ||
| iv. Provision for credit impairment of other debt investments. | ||
| v. Cash flow hedging reserve. | ||
| vi. Differences arising from the translation of foreign currency-denominated financial statements | ||
| vii. Other. | ||
| 6 Total comprehensive income | -71,777,918.47 | 17,942,271.57 |
| 7 Earnings per share: | ||
| (1) Basic earnings per share | ||
| (2) Diluted earnings per share |
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5. Consolidated Statement of Cash Flows
Unit: RMB yuan
| Item | H1 2024 | H1 2023 |
| 1 Cash flows from operating activities: | ||
| Proceeds from sale of goods and rendering of services | 2,133,184,710.51 | 2,234,391,644.12 |
| Net increase in customer deposits and interbank deposits | ||
| Net increase in borrowing from the central bank | ||
| Net increase in funds transferred to other financial institutions | ||
| Cash received from the premium of the original insurance contract | ||
| Net cash received from reinsurance business | ||
| Net increase in depositors' deposits and investment funds | ||
| Cash that collects interest, commission, and commission | ||
| Net increase in borrowed funds | ||
| Net increase in funds for repurchase business | ||
| Net cash received by agents buying and selling securities | ||
| Receipts of taxes and surcharges refunds | 29,629,118.26 | 30,108,533.01 |
| Cash generated from other operating activities | 48,750,670.03 | 30,337,789.00 |
| Subtotal of cash generated from operating activities | 2,211,564,498.80 | 2,294,837,966.13 |
| Payments for goods and services | 1,384,098,428.71 | 1,499,173,858.61 |
| Net increase in customer loans and advances | ||
| Net increase in central bank and interbank deposits | ||
| Cash to pay the indemnity of the |
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| original insurance contract | ||
| Net increase in loan funds | ||
| Cash for the payment of interest, fees, and commissions | ||
| Cash for the payment of policy dividends | ||
| Cash payments to and on behalf of employees | 442,114,678.46 | 393,735,088.13 |
| Payments of all types of taxes and surcharges | 94,893,671.53 | 61,126,879.31 |
| Cash used in other operating activities | 171,887,256.45 | 149,366,073.56 |
| Subtotal of cash used in operating activities | 2,092,994,035.15 | 2,103,401,899.61 |
| Net cash generated from/used in operating activities | 118,570,463.65 | 191,436,066.52 |
| 2 Cash flows from investing activities: | ||
| Proceeds from disinvestment | 830,003,799.66 | 1,778,154,089.71 |
| Investment income | 1,966,111.00 | 60,835,876.45 |
| Net proceeds from the disposal of fixed assets, intangible assets, and other long-lived assets | 9,543,239.57 | 92,406.87 |
| Disposal of net cash received by subsidiaries and other business units | ||
| Cash generated from other investing activities | ||
| Subtotal of cash generated from investing activities | 841,513,150.23 | 1,839,082,373.03 |
| Payments for the acquisition of fixed assets, intangible assets, and other long-lived assets | 86,360,919.88 | 113,551,038.37 |
| Payments for investments | 916,127,239.46 | 1,704,863,903.07 |
| Net increase in pledged loans | ||
| Obtain net cash paid by subsidiaries and other business units | ||
| Cash used in other investing activities | ||
| Subtotal of cash used in investing | 1,002,488,159.34 | 1,818,414,941.44 |
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| activities | ||
| Net cash generated from/used in investing activities | -160,975,009.11 | 20,667,431.59 |
| 3 Cash flows from financing activities: | ||
| Absorb the cash received by the investment | ||
| Including: the subsidiary absorbs the cash received from the investment of minority shareholders | ||
| Borrowings raised | 148,093,714.84 | 360,128,520.13 |
| Cash generated from other financing activities | 155,429,105.81 | 39,381,507.99 |
| Subtotal of cash generated from financing activities | 303,522,820.65 | 399,510,028.12 |
| Repayment of borrowings | 332,379,346.30 | 288,815,086.23 |
| Interest and dividends paid | 9,300,470.13 | 7,237,289.74 |
| Including: Interest and dividends paid to minority shareholders | ||
| Cash used in other financing activities | 55,993,188.10 | 238,991,697.89 |
| Subtotal of cash used in financing activities | 397,673,004.53 | 535,044,073.86 |
| Net cash generated from/used in financing activities | -94,150,183.88 | -135,534,045.74 |
| 4 Effect of foreign exchange rates changes on cash and cash equivalents | -25,768,847.36 | 53,331,073.03 |
| 5 Net (decrease)/increase in cash and cash equivalents | -162,323,576.70 | 129,900,525.40 |
| Add: Cash and cash equivalents, beginning of the period | 1,672,514,611.84 | 1,233,720,697.27 |
| 6 Cash and cash equivalents, end of the period | 1,510,191,035.14 | 1,363,621,222.67 |
6. Parent Company Statement of Cash Flow
Unit: RMB yuan
| Item | H1 2024 | H1 2023 |
| 1 Cash flow generated by business |
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| activities: | ||
| Cash received from the sale of goods and the provision of services | 150,619,380.19 | 282,261,729.73 |
| Receipts of taxes and surcharges refunds | 7,593,327.09 | 8,800,337.38 |
| Cash generated from other operating activities | 33,938,546.55 | 14,348,299.02 |
| Subtotal of cash generated from operating activities | 192,151,253.83 | 305,410,366.13 |
| Payments for goods and services | 119,991,428.65 | 115,692,389.65 |
| Cash payments to and on behalf of employees | 53,507,816.89 | 54,177,377.99 |
| Payments of all types of taxes and surcharges | 9,174,721.73 | 4,054,551.59 |
| Cash used in other operating activities | 18,963,431.44 | 126,905,787.49 |
| Subtotal of cash used in operating activities | 201,637,398.71 | 300,830,106.72 |
| Net cash generated from/used in operating activities | -9,486,144.88 | 4,580,259.41 |
| 2 Cash flows from investing activities: | ||
| Proceeds from disinvestment | 463,677,581.78 | 1,174,847,116.06 |
| Investment income | 39,246,958.11 | 18,717,756.49 |
| Net proceeds from the disposal of fixed assets, intangible assets, and other long-lived assets | 0.00 | |
| Disposal of net cash received by subsidiaries and other business units | ||
| Cash generated from other investing activities | 60,000,000.00 | 270,000,000.00 |
| Subtotal of cash generated from investing activities | 562,924,539.89 | 1,463,564,872.55 |
| Payments for the acquisition of fixed assets, intangible assets, and other long-lived assets | 2,086,657.84 | 10,894,394.77 |
| Payments for investments | 540,547,812.01 | 1,281,050,329.82 |
| Obtain net cash paid by subsidiaries and other business units |
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| Cash used in other investing activities | ||
| Subtotal of cash used in investing activities | 542,634,469.85 | 1,291,944,724.59 |
| Net cash generated from/used in investing activities | 20,290,070.04 | 171,620,147.96 |
| 3 Cash flows from financing activities: | ||
| Absorb the cash received by the investment | ||
| Cash received for obtaining loans | 68,180,000.00 | |
| Cash generated from other financing activities | 115,953,756.22 | 8,077,201.63 |
| Subtotal of cash generated from financing activities | 115,953,756.22 | 76,257,201.63 |
| Repayment of borrowings | 3,848,000.00 | |
| Interest and dividends paid | 903,599.82 | 2,635,213.97 |
| Cash used in other financing activities | 20,151,681.90 | 201,228,410.87 |
| Subtotal of cash used in financing activities | 24,903,281.72 | 203,863,624.84 |
| Net cash generated from/used in financing activities | 91,050,474.50 | -127,606,423.21 |
| 4 Effect of foreign exchange rates changes on cash and cash equivalents | ||
| 5 Net (decrease)/increase in cash and cash equivalents | 101,854,399.66 | 48,593,984.16 |
| Add: Cash and cash equivalents, beginning of the period | 405,841,967.20 | 142,319,826.12 |
| 6 Cash and cash equivalents, end of the period | 507,696,366.86 | 190,913,810.28 |
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7. Consolidated Statements of Changes in Equity
Amount of current period
Unit: RMB yuan
| Item | H1 2024 | ||||||||||||||
| Equity attributable to owners of the parent | Non-controlling interests | Total equity | |||||||||||||
| Share capital | Other equity instruments | Capital surplus | Less: Treasury stock | Other comprehensive income | Special reserve | Surplus reserves | General reserve | Retained earnings | Others | Subtotal | |||||
| Preference shares | Perpetual bonds | Others | |||||||||||||
| I. On 31 December 2023 | 1,240,618,400.00 | 2,889,928,997.21 | 218,298,532.79 | 75,122,078.52 | 16,229,817.03 | 51,830,974.45 | 456,258,959.55 | 4,511,690,693.97 | 222,517,275.37 | 4,734,207,969.34 | |||||
| Add: Adjustments for changes in accounting policies | |||||||||||||||
| Adjustments for correction of previous errors | |||||||||||||||
| Other adjustments | |||||||||||||||
| II. On 1 January 2024 | 1,240,618,400.00 | 2,889,928,997.21 | 218,298,532.79 | 75,122,078.52 | 16,229,817.03 | 51,830,974.45 | 456,258,959.55 | 4,511,690,693.97 | 222,517,275.37 | 4,734,207,969.34 | |||||
| III. Changes for the period (“-” for decrease) | -21,572,060.00 | -78,137,677.44 | -100,775,491.39 | -29,083,521.22 | 609,795.24 | 163,880,472.14 | 136,472,500.11 | 23,116,196.15 | 159,588,696.26 | ||||||
| (I) Total comprehensive income | -29,083,521.22 | 163,880,472.14 | 134,796,950.92 | 23,697,410.40 | 158,494,361.32 | ||||||||||
| (II) Owner’s contributions and reduction in capital | -21,572,060.00 | -78,137,677.44 | -100,775,491.39 | 1,065,753.95 | -581,214.25 | 484,539.70 | |||||||||
| 1. Ordinary shares increased by owners | |||||||||||||||
| 2. Capital increased by holders of other equity instruments | |||||||||||||||
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| Item | H1 2024 | ||||||||||||||
| Equity attributable to owners of the parent | Non-controlling interests | Total equity | |||||||||||||
| Share capital | Other equity instruments | Capital surplus | Less: Treasury stock | Other comprehensive income | Special reserve | Surplus reserves | General reserve | Retained earnings | Others | Subtotal | |||||
| Preference shares | Perpetual bonds | Others | |||||||||||||
| 3. Share-based payments included in equity | 1,065,753.95 | 1,065,753.95 | 1,065,753.95 | ||||||||||||
| 4. Others | -21,572,060.00 | -79,203,431.39 | -100,775,491.39 | -581,214.25 | -581,214.25 | ||||||||||
| (III) Profit distribution | |||||||||||||||
| 1. Appropriation to surplus reserves | |||||||||||||||
| 2. Appropriation to general reserve | |||||||||||||||
| 3. Appropriation to owners (or shareholders) | |||||||||||||||
| 4. Others | |||||||||||||||
| (IV) Transfers within equity | |||||||||||||||
| 1. Increase in capital (or share capital) from capital surplus | |||||||||||||||
| 2. Increase in capital (or share capital) from surplus reserves | |||||||||||||||
| 3. Surplus reserves used to offset loss | |||||||||||||||
| 4. Changes in defined benefit schemes transferred to retained | |||||||||||||||
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| Item | H1 2024 | ||||||||||||||
| Equity attributable to owners of the parent | Non-controlling interests | Total equity | |||||||||||||
| Share capital | Other equity instruments | Capital surplus | Less: Treasury stock | Other comprehensive income | Special reserve | Surplus reserves | General reserve | Retained earnings | Others | Subtotal | |||||
| Preference shares | Perpetual bonds | Others | |||||||||||||
| earnings | |||||||||||||||
| 5. Other comprehensive income transferred to retained earnings | |||||||||||||||
| 6. Others | |||||||||||||||
| (V) Special reserve | 609,795.24 | 609,795.24 | 609,795.24 | ||||||||||||
| 1. Provision in the period | 1,198,032.00 | 1,198,032.00 | 1,198,032.00 | ||||||||||||
| 2. Utilisation in the period | -588,236.76 | -588,236.76 | -588,236.76 | ||||||||||||
| (VI) Others | |||||||||||||||
| IV. On 30 June 2024 | 1,219,046,340.00 | 2,811,791,319.77 | 117,523,041.40 | 46,038,557.30 | 16,839,612.27 | 51,830,974.45 | 620,139,431.69 | 4,648,163,194.08 | 245,633,471.52 | 4,893,796,665.60 | |||||
Amount of previous period
Unit: RMB yuan
| Item | H1 2023 | ||||||||||||||
| Equity attributable to owners of the parent | Non-controlling interests | Total equity | |||||||||||||
| Share capital | Other equity instruments | Capital surplus | Less: Treasury stock | Other comprehensive income | Special reserve | Surplus reserves | General reserve | Retained earnings | Others | Subtotal | |||||
| Preference shares | Perpetual bonds | Others | |||||||||||||
| I. On 31 December 2022 | 1,241,106,400.00 | 2,947,263,843.53 | 240,255,502.45 | 26,512,917.07 | 14,488,955.52 | 51,830,974.45 | 23,018,722.11 | 4,063,966,310.23 | 202,028,952.72 | 4,265,995,262.95 | |||||
| Add: Adjustments for | |||||||||||||||
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| Item | H1 2023 | ||||||||||||||
| Equity attributable to owners of the parent | Non-controlling interests | Total equity | |||||||||||||
| Share capital | Other equity instruments | Capital surplus | Less: Treasury stock | Other comprehensive income | Special reserve | Surplus reserves | General reserve | Retained earnings | Others | Subtotal | |||||
| Preference shares | Perpetual bonds | Others | |||||||||||||
| changes in accounting policies | |||||||||||||||
| Adjustments for correction of previous errors | |||||||||||||||
| Other adjustments | |||||||||||||||
| II. On 1 January 2023 | 1,241,106,400.00 | 2,947,263,843.53 | 240,255,502.45 | 26,512,917.07 | 14,488,955.52 | 51,830,974.45 | 23,018,722.11 | 4,063,966,310.23 | 202,028,952.72 | 4,265,995,262.95 | |||||
| III. Changes for the period (“-” for decrease) | -128,000.00 | -54,701,978.53 | -29,372,784.67 | 64,443,141.24 | 978,436.36 | 206,149,605.30 | 246,113,989.04 | 20,223,901.63 | 266,337,890.67 | ||||||
| (I) Total comprehensive income | 64,443,141.24 | 206,149,605.30 | 270,592,746.54 | 22,448,591.63 | 293,041,338.17 | ||||||||||
| (II) Owner’s contributions and reduction in capital | -128,000.00 | -56,926,668.53 | -29,372,784.67 | -27,681,883.86 | -27,681,883.86 | ||||||||||
| 1. Ordinary shares increased by owners | |||||||||||||||
| 2. Capital increased by holders of other equity instruments | |||||||||||||||
| 3. Share-based payments included in equity | 20,566,434.45 | 20,566,434.45 | 20,566,434.45 | ||||||||||||
| 4. Others | -128,000.00 | -77,493,102.98 | -29,372,784.67 | -48,248,318.31 | -48,248,318.31 | ||||||||||
| (III) Profit distribution | |||||||||||||||
| 1. Appropriation to surplus reserves | |||||||||||||||
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| Item | H1 2023 | ||||||||||||||
| Equity attributable to owners of the parent | Non-controlling interests | Total equity | |||||||||||||
| Share capital | Other equity instruments | Capital surplus | Less: Treasury stock | Other comprehensive income | Special reserve | Surplus reserves | General reserve | Retained earnings | Others | Subtotal | |||||
| Preference shares | Perpetual bonds | Others | |||||||||||||
| 2. Appropriation to general reserve | |||||||||||||||
| 3. Appropriation to owners (or shareholders) | |||||||||||||||
| 4. Others | |||||||||||||||
| (IV) Transfers within equity | |||||||||||||||
| 1. Increase in capital (or share capital) from capital surplus | |||||||||||||||
| 2. Increase in capital (or share capital) from surplus reserves | |||||||||||||||
| 3. Surplus reserves used to offset loss | |||||||||||||||
| 4. Changes in defined benefit schemes transferred to retained earnings | |||||||||||||||
| 5. Other comprehensive income transferred to retained earnings | |||||||||||||||
| 6. Others | |||||||||||||||
| (V) Special reserve | 978,436.36 | 978,436.36 | 978,436.36 | ||||||||||||
| 1. Provision in the period | 2,531,949.77 | 2,531,949.77 | 2,531,949.77 | ||||||||||||
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| Item | H1 2023 | ||||||||||||||
| Equity attributable to owners of the parent | Non-controlling interests | Total equity | |||||||||||||
| Share capital | Other equity instruments | Capital surplus | Less: Treasury stock | Other comprehensive income | Special reserve | Surplus reserves | General reserve | Retained earnings | Others | Subtotal | |||||
| Preference shares | Perpetual bonds | Others | |||||||||||||
| 2. Utilisation in the period | -1,553,513.41 | -1,553,513.41 | -1,553,513.41 | ||||||||||||
| (VI) Others | 2,224,690.00 | 2,224,690.00 | -2,224,690.00 | ||||||||||||
| IV. On 30 June 2023 | 1,240,978,400.00 | 2,892,561,865.00 | 210,882,717.78 | 90,956,058.31 | 15,467,391.88 | 51,830,974.45 | 229,168,327.41 | 4,310,080,299.27 | 222,252,854.35 | 4,532,333,153.62 | |||||
8. Company Statement of Changes in Equity
Amount of current period
Unit: RMB yuan
| Item | H1 2024 | |||||||||||
| Share capital | Other equity instruments | Capital surplus | Less: Treasury stock | Other comprehensive income | Special reserve | Surplus reserves | Retained earnings | Others | Total equity | |||
| Preference shares | Perpetual bonds | Others | ||||||||||
| I. On 31 December 2023 | 1,240,618,400.00 | 2,745,450,997.27 | 218,298,532.79 | 6,645,318.98 | 51,830,974.45 | -332,943,330.01 | 3,493,303,827.90 | |||||
| Add: Adjustments for changes in accounting policies | ||||||||||||
| Adjustments for correction of previous errors | ||||||||||||
| Other | ||||||||||||
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| Item | H1 2024 | |||||||||||
| Share capital | Other equity instruments | Capital surplus | Less: Treasury stock | Other comprehensive income | Special reserve | Surplus reserves | Retained earnings | Others | Total equity | |||
| Preference shares | Perpetual bonds | Others | ||||||||||
| adjustments | ||||||||||||
| II. On 1 January 2024 | 1,240,618,400.00 | 2,745,450,997.27 | 218,298,532.79 | 6,645,318.98 | 51,830,974.45 | -332,943,330.01 | 3,493,303,827.90 | |||||
| III. Changes for the period (“-” for decrease) | -21,572,060.00 | -78,792,391.92 | -100,775,491.39 | -311,380.45 | -71,777,918.47 | -71,678,259.45 | ||||||
| (I) Total comprehensive income | -71,777,918.47 | -71,777,918.47 | ||||||||||
| (II) Owner’s contributions and reduction in capital | -21,572,060.00 | -78,792,391.92 | -100,775,491.39 | 411,039.47 | ||||||||
| 1. Ordinary shares increased by owners | ||||||||||||
| 2. Capital increased by holders of other equity instruments | ||||||||||||
| 3. Share-based payments included in equity | 411,039.47 | 411,039.47 | ||||||||||
| 4. Others | -21,572,060.00 | -79,203,431.39 | -100,775,491.39 | |||||||||
| (III) Profit distribution | ||||||||||||
| 1. Appropriation to surplus reserves | ||||||||||||
| 2. Appropriation to | ||||||||||||
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| Item | H1 2024 | |||||||||||
| Share capital | Other equity instruments | Capital surplus | Less: Treasury stock | Other comprehensive income | Special reserve | Surplus reserves | Retained earnings | Others | Total equity | |||
| Preference shares | Perpetual bonds | Others | ||||||||||
| owners (or shareholders) | ||||||||||||
| 3. Others | ||||||||||||
| (IV) Transfers within equity | ||||||||||||
| 1. Increase in capital (or share capital) from capital surplus | ||||||||||||
| 2. Increase in capital (or share capital) from surplus reserves | ||||||||||||
| 3. Surplus reserves used to offset loss | ||||||||||||
| 4. Changes in defined benefit schemes transferred to retained earnings | ||||||||||||
| 5. Other comprehensive income transferred to retained earnings | ||||||||||||
| 6. Others | ||||||||||||
| (V) Special reserve | -311,380.45 | -311,380.45 | ||||||||||
| 1. Provision in the period | ||||||||||||
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| Item | H1 2024 | |||||||||||
| Share capital | Other equity instruments | Capital surplus | Less: Treasury stock | Other comprehensive income | Special reserve | Surplus reserves | Retained earnings | Others | Total equity | |||
| Preference shares | Perpetual bonds | Others | ||||||||||
| 2. Utilisation in the period | -311,380.45 | -311,380.45 | ||||||||||
| (VI) Others | ||||||||||||
| IV. On 30 June 2024 | 1,219,046,340.00 | 2,666,658,605.35 | 117,523,041.40 | 6,333,938.53 | 51,830,974.45 | -404,721,248.48 | 3,421,625,568.45 | |||||
Amount of previous period
Unit: RMB yuan
| Item | H1 2023 | |||||||||||
| Share capital | Other equity instruments | Capital surplus | Less: Treasury stock | Other comprehensive income | Special reserve | Surplus reserves | Retained earnings | Others | Total equity | |||
| Preference shares | Perpetual bonds | Others | ||||||||||
| I. On 31 December 2022 | 1,241,106,400.00 | 2,820,661,243.26 | 240,255,502.45 | 7,200,502.88 | 51,830,974.45 | -643,877,009.80 | 3,236,666,608.34 | |||||
| Add: Adjustments for changes in accounting policies | ||||||||||||
| Adjustments for correction of previous errors | ||||||||||||
| Other adjustments | ||||||||||||
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| Item | H1 2023 | |||||||||||
| Share capital | Other equity instruments | Capital surplus | Less: Treasury stock | Other comprehensive income | Special reserve | Surplus reserves | Retained earnings | Others | Total equity | |||
| Preference shares | Perpetual bonds | Others | ||||||||||
| II. On 1 January 2023 | 1,241,106,400.00 | 2,820,661,243.26 | 240,255,502.45 | 7,200,502.88 | 51,830,974.45 | -643,877,009.80 | 3,236,666,608.34 | |||||
| III. Changes for the period (“-” for decrease) | -128,000.00 | -57,792,298.44 | -29,372,784.67 | 375,487.90 | 17,942,271.57 | -10,229,754.30 | ||||||
| (I) Total comprehensive income | 17,942,271.57 | 17,942,271.57 | ||||||||||
| (II) Owner’s contributions and reduction in capital | -128,000.00 | -57,792,298.44 | -29,372,784.67 | -28,547,513.77 | ||||||||
| 1. Ordinary shares increased by owners | ||||||||||||
| 2. Capital increased by holders of other equity instruments | ||||||||||||
| 3. Share-based payments included in equity | 19,700,804.54 | 19,700,804.54 | ||||||||||
| 4. Others | -128,000.00 | -77,493,102.98 | -29,372,784.67 | -48,248,318.31 | ||||||||
| (III) Profit distribution | ||||||||||||
| 1. Appropriation to surplus reserves | ||||||||||||
| 2. Appropriation to owners (or shareholders) | ||||||||||||
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| Item | H1 2023 | |||||||||||
| Share capital | Other equity instruments | Capital surplus | Less: Treasury stock | Other comprehensive income | Special reserve | Surplus reserves | Retained earnings | Others | Total equity | |||
| Preference shares | Perpetual bonds | Others | ||||||||||
| 3. Others | ||||||||||||
| (IV) Transfers within equity | ||||||||||||
| 1. Increase in capital (or share capital) from capital surplus | ||||||||||||
| 2. Increase in capital (or share capital) from surplus reserves | ||||||||||||
| 3. Surplus reserves used to offset loss | ||||||||||||
| 4. Changes in defined benefit schemes transferred to retained earnings | ||||||||||||
| 5. Other comprehensive income transferred to retained earnings | ||||||||||||
| 6. Others | ||||||||||||
| (V) Special reserve | 375,487.90 | 375,487.90 | ||||||||||
| 1. Provision in the period | 825,942.88 | 825,942.88 | ||||||||||
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| Item | H1 2023 | |||||||||||
| Share capital | Other equity instruments | Capital surplus | Less: Treasury stock | Other comprehensive income | Special reserve | Surplus reserves | Retained earnings | Others | Total equity | |||
| Preference shares | Perpetual bonds | Others | ||||||||||
| 2. Utilisation in the period | -450,454.98 | -450,454.98 | ||||||||||
| (VI) Others | ||||||||||||
| IV. On 30 June 2023 | 1,240,978,400.00 | 2,762,868,944.82 | 210,882,717.78 | 7,575,990.78 | 51,830,974.45 | -625,934,738.23 | 3,226,436,854.04 | |||||
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III Corporate Background
Guangdong Dongfang Precision Science & Technology Co., Ltd. (the "Company"), a joint stock companywith limited liability registered in Guangdong Province of the People's Republic of China and established on9 December 1996, obtained a Business License for Enterprise Legal Person with a registration number of440682000040868.
In August 2011, upon the approval by the China Securities Regulatory Commission (CSRC) in the Reply onApproving the Initial Public Offering of Shares by Guangdong Dongfang Precision Science & TechnologyCo., Ltd. (ZH.J.X.K. [2011] No. 1237), the Company issued Renminbi-denominated ordinary shares to thepublic, and was listed on the Shenzhen Stock Exchange in the same month. The Company started to use theunified social credit code (914406002318313119) in 2016. The Company is headquartered in 2 Qiangshi Road,Shishan Town, Nanhai District, Foshan City, Guangdong Province, China.
With “intelligent equipment manufacturing”as its primary strategic focus, Dongfang Precisionconcentrates onthe manufacturingof high-end intelligent equipment. Its principal operations include “intelligent packagingequipment”and “water powersports equipment”. The “intelligent packagingequipmentbusiness”consists of smart corrugated packaging equipment, digital printers, and industrialInternet industry solutions.
The actual controllers of the Company are Tang Zhuolin and Tang Zhuomian.
These financial statements were authorized for issue by the Board of Directors of the Company on 25 Julymar2024.IV.Basis of Preparation of the Financial Statements
These financial statements have been prepared in accordance with China’s “Accounting Standards for BusinessEnterprises — Basic Standards” promulgated by the Ministry of Finance and the specific accounting standards,application guidance, interpretations and other relevant regulations issued or amended thereafter (hereaftercollectively referred to as “Accounting Standards for Business Enterprises” or “CAS”). In addition, thefinancial statements also disclose relevant financial information in accordance with the Rules No. 15 for thePreparation of Information Disclosure by Companies Offering Securities to the Public - General Provisions onFinancial Reports.
The financial statements are prepared on a going concern basis.
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V.Principal Accounting Policies and Accounting Estimates
The Group has formulated specific accounting policies and accounting estimates according to thecharacteristics of its actual production and operation, which is mainly embodied in the provision for the baddebt of accounts receivable, provision for write-down of inventories, depreciation of fixed assets, provisionfor product warranties, capitalization conditions for expenditure on the development phase of research anddevelopment expenses and recognition and measurement of revenue.
1. Statement of compliance
The financial statements present truly and completely the financial positions of the Group and the Companyas at 30 June 2024, and the financial performance and the cash flows for the 1
sthalf of 2024 then ended inaccordance with Accounting Standards for Business Enterprises.
2. Accounting year
The accounting year of the Group is from 1 January to 31 December of each calendar year.
3. Functional currency
The Group’s functional currency and the currency used in preparing the financial statements were Renminbi.The amounts in the financial statements were denominated in Renminbi yuan, unless otherwise stated.
4. Determination method and selection basis of materiality criteria
| Materiality criteria | |||
| Significant construction in progress | Budgeted amount for investment exceeds RMB50,000,000 | ||
| Significant cash flows from investing activities | Amount exceeds RMB50,000,000 | ||
| Significant non-wholly owned subsidiaries | Net assets of non-wholly owned subsidiaries account for more than 10% of consolidated net assets | ||
| Significant associates | The carrying amount of long-term equity investments in associates accounts for more than 5% of the consolidated net assets |
5. Business combination
Business combinations are classified into business combinations involving entities under common control andbusiness combinations not involving entities under common control.
Business combinations involving entities under common control
A business combination involving entities under common control is a business combination in which all of thecombining entities are ultimately controlled by the same party or parties both before and after the businesscombination, and that control is not transitory.
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V.Principal Accounting Policies and Accounting Estimates (Cont’d)
5. Business combination (cont’d)
Business combinations involving entities under common control (cont’d)
Assets and liabilities obtained by combining party in the business combination involving entities under commoncontrol (including goodwill arising from the acquisition of the merged party by the ultimate controller) arerecognized on the basis of their carrying amounts at the combination date recorded on the financial statements ofthe ultimate controlling party. The difference between the carrying amount of the consideration paid for thecombination (or aggregate face values of the shares issued) and the carrying amount of the net assets obtained isadjusted to capital surplus. If the capital surplus are not sufficient to absorb the difference, any excess is adjusted toretained earnings.
Business combinations not involving entities under common control
A business combination not involving entities under common control is a business combination in which all of thecombining entities are not ultimately controlled by the same party or parties both before and after the businesscombination.
The acquiree’s identifiable assets, liabilities and contingent liabilities are recognized at their fair values at theacquisition date. The excess of the sum of the consideration paid (or equities issued) for business combination andequity interests in the acquiree held prior to the date of acquisition over the share of the attributable net identifiableassets of the acquiree, measured at fair value, was recognized as goodwill, which is subsequently measured at costless cumulative impairment loss. In case the fair value of the sum of the consideration paid (or equities issued) andequity interests in the acquire held prior to the date of acquisition is less than the fair value of the share of theattributable net identifiable assets of the acquiree, a review of the measurement of the fair values of the identifiableassets, liabilities and contingent liabilities, the consideration paid for the combination (or equity issued) and theequity interests in the acquiree held prior to the date of acquisition is conducted. If the review indicates that the fairvalue of the sum of the consideration paid (or equities issued) and equity interests in the acquiree held prior to thedate of acquisition is indeed less than the fair value of the share of the attributable net identifiable assets of theacquiree, the difference is recognized in profit or loss.
6. Consolidated financial statements
The consolidation scope for consolidated financial statements is determined based on the concept of control,including the Company and all subsidiaries’ financial statements. Subsidiaries are those enterprises or entities whichthe Company has control over (including enterprises, separable components of investee units and structured entitiescontrolled by the Company). An investor controls an investee when the investor is exposed, or has rights, to variablereturns from its involvement with the investee and has the ability to affect those returns through its power over theinvestee.
The financial statements of the subsidiaries are prepared for the same reporting period as the Company, usingconsistent accounting policies. Any inconsistent accounting policies have been adjusted to become consistent withthe Company’s accounting policies. All assets, liabilities, equities, revenues, costs and cash flows arising fromintercompany transactions are eliminated on consolidation.
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V.Principal Accounting Policies and Accounting Estimates (Cont’d)
6. Consolidated financial statements (cont’d)
The excess of current loss attributable to non-controlling shareholders of a subsidiary over their entitlements to theopening balance of equity shall be charged to non-controlling interests.
For subsidiaries obtained through a business combination not involving entities under common control, theoperating results and cash flows of the acquirees will be recognized in consolidated financial statements from thedate the Group effectively obtains the control until the date that control is terminated. When consolidated financialstatement is prepared, the subsidiaries’ financial statements will be adjusted based on the fair values of theidentifiable assets, liabilities and contingent liabilities at the acquisition date.
For subsidiaries acquired through combination of entities under common control, the business results and cash flowsof the combined entities are included in the consolidated financial statements from the beginning of the period inwhich the combination occurred. When preparing and comparing the consolidated financial statements, the Groupmakes adjustments to relevant items of the financial statements of the previous period, deeming the reporting entityformed through combination as existing since initial implementation of control by the ultimate controlling party.
In the event of the change in one or more elements of control as a result of changes in relevant facts and conditions,the Group reassesses whether it has control over the investee.
If the control right is not lost, the change of minority shareholders' equity shall be regarded as equitytransaction.
7. Cash and cash equivalents
Cash comprises cash on hand and deposits readily available for payments. Cash equivalents represent short-termhighly liquid investments which are readily convertible to known amounts of cash, and subject to an insignificantrisk of changes in value.
8. Foreign currency translation
For foreign currency transactions, the Group translates the foreign currency into its functional currency.
Upon initial recognition, foreign currency transactions are translated into the functional currency using the spotexchange rate of the dates on which transactions occur. At the balance sheet date, foreign currency monetary itemsare translated using the spot exchange rate at the balance sheet date. The translation differences arising from thesettlement and foreign currency monetary items are recognized in profit or loss. Also at the balance sheet date,foreign currency non-monetary items measured at historical cost continue to be translated using the spot exchangerate at the dates of the transactions and it does not change its carrying amount in functional currency. Foreigncurrency non-monetary items measured at fair value are translated using the spot exchange rate. The differencesarising from the above translations are recognized in current profit or loss or other comprehensive income accordingto the nature of foreign currency non-monetary items.
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V.Principal Accounting Policies and Accounting Estimates (Cont’d)
8. Foreign currency translation (cont’d)
The Group translates the functional currencies of foreign operations into Renminbi when preparing the financialstatements. Asset and liability items in the balance sheet are translated at the spot exchange rate prevailing at thebalance sheet date. Equity items, except for retained earnings, are translated at the spot exchange rates at the datewhen such items arose. Revenue and expense items in the income statement are translated using the averageexchange rate for the periods when transactions occur. Translation differences arising from the aforesaid translationof financial statements denominated in foreign currency shall be recognized as other comprehensive income. Whenforeign operations are disposed, other comprehensive income relating to the foreign operation is transferred tocurrent profit or loss. Partial disposal shall be recognized on a pro-rata basis.
Cash flows denominated in foreign currencies and foreign subsidiaries’ cash flows are translated using the averageexchange rate for the period when cash flows occur. The impact on cash by the fluctuation of exchange rates ispresented as a separate line item of reconciliation in the statement of cash flows.
9. Financial instruments
Financial instruments refer to the contracts which give rise to a financial asset in one entity and a financial liabilityor equity instrument in another entity.
Recognition and derecognition of financial instruments
The Group recognizes a financial asset or a financial liability when it becomes a party to the contractual provisionsof the financial instrument.
A financial asset (or part of it, or a part of a group of similar financial asset) is derecognized when one of thefollowing criteria is met, that is, when a financial asset is written off from its account and balance sheet:
(1) The right of receiving the cash flow generated from the financial asset has expired;
(2) The right of receiving cash flow generated by the financial assets is transferred, or an obligation of paying
the full amount of cash flow received to third parties in a timely manner has been undertaken under “pass-through” agreements, where (a) substantially all risks and rewards of the ownership of such type of financialassets have been transferred, or (b) control over such type of financial assets has not been retained eventhough substantially all risks and rewards of the ownership of such type of financial assets have been neithertransferred nor retained.
If the obligation of financial liability has been fulfilled, cancelled or expired, the financial liability is derecognized.If the present financial liability is substituted by the same debtee with another liability differing in substance, or theterms of the present liability have been substantially modified, this substitution or modification is treated asderecognition of a present liability and recognition of a new liability with any arising differences recognized inprofit or loss.
Conventional dealings in financial assets are recognized or derecognized under the trade day accounting method.Conventional dealings refer to the receipt or delivery of financial assets within periods stipulated by the law andaccording to usual practices. The trade day is the date on which the Group undertakes to buy or sell a financial asset.
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V.Principal Accounting Policies and Accounting Estimates (Cont’d)
9. Financial instruments (cont’d)
Classification and measurement of financial assets
At initial recognition, the Group classifies its financial assets into: financial assets at fair value through profit orloss, financial assets at amortized cost, or financial assets at fair value through other comprehensive income,according to the Group’s business model for managing financial assets and the contract cash flow characteristics ofthe financial assets. When and only when the Group changes its business model of managing financial assets, allrelevant financial assets affected will be re-classified.
Financial assets are measured at fair value on initial recognition, but if the accounts receivable or notes receivablegenerated from the sales of goods or provision of services do not contain significant financing components or donot consider financing components of no longer than one year, the initial measurement will be based on thetransaction price.
For financial assets at fair value through profit or loss, the relevant transaction costs are directly recognized in profitor loss; for other financial assets, the relevant transaction costs are recognized in their initial recognition amount.
The subsequent measurement of financial assets is dependent on its classification:
Debt instruments measured at amortized costFinancial assets fulfilling all of the following conditions are classified as financial assets at amortized cost: theobjective of the Group’s business management model in respect of such type of financial assets is to generatecontract cash flow; the contract terms of such type of financial assets provide that cash flow generated on specificdates represents interest payment in relation to principal amounts based on outstanding principal amounts only.Interest income from such type of financial assets are recognized using the effective interest rate method, and anyprofit or loss arising from derecognition, amendments or impairment shall be charged to current profit or loss.
Debt instruments at fair value through other comprehensive incomeFinancial assets fulfilling all of the following conditions are classified as financial assets at fair value through othercomprehensive income: the objective of the Group’s business management model in respect of such type of financialassets is both to generate contract cash flow and to sell such type of financial assets; the contract terms of such typeof financial assets provide that cash flow generated on specific dates represents interest payment in relation toprincipal amounts based on outstanding principal amounts only. Interest income from this type of financial assetsis recognized using the effective interest rate method. Other than interest income, impairment loss and exchangedifferences which shall be recognized as current profit or loss, other fair value changes shall be included in othercomprehensive income. Upon derecognition of the financial assets, the cumulative gains or losses previouslyincluded in other comprehensive income shall be transferred from other comprehensive income to current profit orloss.
Financial assets at fair value through profit or lossOther than financial assets measured at amortized cost and financial assets at fair value through other comprehensiveincome as aforementioned, all financial assets are classified as financial assets at fair value through profit or loss,which are subsequently measured at fair value, any changes of which are recognized in current profit or loss.
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V.Principal Accounting Policies and Accounting Estimates (Cont’d)
9. Financial instruments (cont’d)
Classification and measurement of financial liabilitiesThe Group classifies its financial liabilities at initial recognition: financial liabilities at fair value through profit orloss, and other financial liabilities. For financial liabilities at fair value through profit or loss, the relevant transactioncosts are directly recognized in profit or loss; for other financial liabilities, the relevant transaction costs arerecognized in their initial recognition amount.
The subsequent measurement of financial liabilities is dependent on its classification:
Financial liabilities at fair value through profit or lossFinancial liabilities at fair value through profit or loss include mainly financial liabilities held for trading(comprisingderivatives classified as financial liabilities). Financial liabilities held for trading (comprising derivatives classifiedas financial liabilities) are subsequently measured at fair value and all changes are recognized in current profit orloss.
Other financial liabilitiesSubsequent to initial recognition, these financial liabilities are carried at amortized cost using the effective interestmethod.
Impairment of financial instruments
The Group performs impairment treatment on financial assets at amortized cost, debt instruments at fair valuethrough other comprehensive income and contract assets based on expected credit losses (ECL) and recognizesallowances for losses.
For receivables and contract assets that do not contain significant financing components, the Group adopts asimplified measurement method to measure allowances for losses based on an amount equivalent to the lifetimeexpected credit losses.
Financial assets other than those measured with simplified valuation methods, the Group evaluates at each balancesheet date whether its credit risk has significantly increased since initial recognition. The period during which creditrisk has not significantly increased since initial recognition is considered the first stage, at which the Group shallmeasure loss allowance based on the amount of expected credit loss for the next 12 months and shall computeinterest income according to the book balance and effective interest rate; the period during which credit risk hassignificantly increased since initial recognition although no credit impairment has occurred is considered the secondstage, at which the Group shall measure loss allowance based on the amount of expected credit loss for the entirevalid period and shall compute interest income according to the book balance and effective interest rate; The periodduring which credit impairment has occurred after initial recognition is considered the third stage, at which theGroup shall measure loss allowance based on the amount of the lifetime expected credit loss and shall computeinterest income according to the amortized cost and effective interest rate.
The Group estimates the expected credit loss of financial instruments individually and on a group basis. The Groupconsiders the credit risk features of different customers and estimates the expected credit losses of financialinstruments based on aging portfolio.
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V.Principal Accounting Policies and Accounting Estimates (Cont’d)
9. Financial instruments (cont’d)
Impairment of financial instruments (cont’d)
For the Group’s criteria for judging whether credit risks have significantly increased, the definition of assetssubjected to credit impairment, and assumptions underlying the measurement of expected credit losses, please referto Note IX.2.
The Group's approach to measuring ECLs on financial instruments reflects factors such as the unbiasedprobability-weighted average amount determined by evaluating a range of possible outcomes, the time valueof money, and reasonable and supportable information about past events, current conditions and projectionsof future economic conditions available at the balance sheet date without undue additional cost or effort.
When the Group no longer reasonably expects to be able to fully or partially recover the contract cash flow offinancial assets, the Group directly writes down the book balance of such financial assets.
Derivative financial instruments
The Group uses derivative financial instruments. Derivative financial instruments are initially recognized at fairvalue on the date on which a derivative contract is entered into and are subsequently re-measured at fair value.Derivatives are carried as assets when the fair value is positive and as liabilities when the fair value is negative.
Gains or losses arising from changes in the fair value of derivative instruments shall be directly recognized in currentprofit or loss.
Transfer of financial assets
If the Group has transferred substantially all the risks and rewards associated with the ownership of a financial assetto the transferee, the asset should be derecognized. If the Group retains substantially all the risks and rewards ofownership of a financial asset, the asset should not be derecognized.
When the Group has neither transferred nor retained substantially all the risks and rewards of ownership of thefinancial asset, it may either derecognize the financial asset and recognize any associated assets and liabilities ifcontrol of the financial asset has not been retained; or recognizes the financial asset to the extent of its continuinginvolvement in the transferred financial asset and recognizes an associated liability if control has been retained.
Assets formed by the continuing involvement by way of the provision of financial guarantee in respect of thetransferred financial assets shall be recognized as the lower of the carrying value of the financial asset and theamount of financial guarantee. The amount of financial guarantee means the maximum amount amongconsiderations received to be required for repayment.
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V.Principal Accounting Policies and Accounting Estimates (Cont’d)
10. Inventories
Inventories include raw materials, work-in-progress, finished goods, product deliveries, semi-finished goods,materials consigned for processing, etc.
Inventories are initially recorded at costs. Inventories’ costs include purchasing costs, processing costs and othercosts. Actual costs of product deliveries are recognized using the weighted average method. Turnover materialsinclude low-value consumables, packaging materials, etc., which are expensed in full.
The Group adopts the perpetual inventory system.
Inventories on the balance sheet date are stated at the lower of cost or net realisable value. Inventory valuationallowance is made and recognized in profit or loss when the net realisable value is lower than cost. Net realizablevalue is determined based on the estimated selling price in the ordinary course of business, less the estimated coststo completion and estimated costs necessary to make the sale and related taxes. Valuation allowances for rawmaterials are established by category, and those for finished goods by individual item. For inventories that relate toproducts produced and sold in the same region, have the same or similar ultimate purpose, and are difficult toseparate in measurement, valuation allowances are established on a combined basis.
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V.Principal Accounting Policies and Accounting Estimates (Cont’d)
11. Long-term equity investments
Long-term equity investments include equity investments in subsidiaries, joint ventures and associates.
Long-term equity investments were recorded at initial investment cost on acquisition. For long-term equityinvestments acquired through the business combination of entities under common control, the initial investmentcost shall be the share of carrying value of the equity of the merged party at the date of combination as stated in theconsolidated financial statements of the ultimate controlling party. Any difference between the initial investmentcost and the carrying value of the consideration for the combination shall be dealt with by adjusting the capitalsurplus(if the capital surplus are insufficient for setting off the difference, such difference shall be further set offagainst retained earnings). Upon disposal of the investment, other comprehensive income prior to the date ofcombination shall be dealt with on the same basis as if the relevant assets or liabilities were disposed of directly bythe investee. Equity recognized as a result of changes in equity other than the set-off of profit and loss, othercomprehensive income and profit allocation of the investee shall be transferred to current profit and loss upondisposal of the investment. Items which remain long-term equity investments after the disposal shall be accountedfor on a pro-rata basis, while items reclassified as financial instruments following the disposal shall be accountedfor in full. For long-term equity investments acquired through the business combination of entities not undercommon control, the initial investment cost shall be the cost of combination (for business combinations of entitiesnot under common control achieved in stages through multiple transactions, the initial investment cost shall be thesum of the carrying value of the equity investment in the acquired party held at the date of acquisition and newinvestment cost incurred as at the date of acquisition). The cost of combination shall be the sum of assets contributedby the acquiring party, liabilities incurred or assumed by the acquiring party and the fair value of equity securitiesissued. Upon disposal of the investment, other comprehensive income recognized under the equity method heldprior to the date of acquisition shall be dealt with on the same basis as if the relevant assets or liabilities weredisposed of directly by the investee. Equity recognized as a result of changes in equity other than the set-off of profitand loss, other comprehensive income and profit allocation of the investee shall be transferred to current profit andloss upon disposal of the investment. Items which remain long-term equity investments after the disposal shall beaccounted for on a pro-rata basis, while items reclassified as financial instruments following the disposal shall beaccounted for in full. The initial investment cost of long-term equity investments other than those acquired throughbusiness combination shall be recognized in accordance with the following: for those acquired by way of cashpayments, the initial investment cost shall be the consideration actually paid plus expenses, tax amounts and othernecessary outgoings directly related to the acquisition of the long-term equity investments.
In the financial statements of the Company, the cost method is used for long term equity investments in investeesover which the Company exercises control. Control is defined as the power exercisable over the investee, theentitlement to variable return through involvement in the activities of the investee and the ability to influence theamount of return using the power over the investee.
When the cost method is used, long-term equity investments are measured at initial cost on acquisition. Whenadditional investments are made or investments are recouped, the cost of longterm equity investments shall beadjusted. Cash dividend or profit distribution declared by the investee shall be recognized as investment income forthe period.
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V.Principal Accounting Policies and Accounting Estimates (Cont’d)
11. Long-term equity investments (cont’d)
The equity method is used to account for long-term equity investments when the Group can jointly control or hassignificant influence over the invested entity. Joint control is the contractually agreed sharing of control of anarrangement, which exists only when decisions about the relevant activities require the unanimous consent of theparties sharing control. Significant influence means having the authority to take part in the decision over thefinancial and operational policies but not the authority to control or jointly control with other parties the formulationof such policies.
Under the equity method, any excess of the initial investment cost over the Company’s share of the net fair valueof the investment’s identifiable assets and liabilities is included in the initial investment cost of the long-term equityinvestment. When the carrying amount of the investment is less than the Company’s share of the fair value of theinvestment’s identifiable net assets, the difference is recognized in profit or loss of the current period and debitedto long-term equity investments.
Under the equity method, after the long-term equity investments are acquired, investment gains or losses and othercomprehensive income are recognized according to the entitled share of net profit or loss and other comprehensiveincome of the investee and the carrying amount of the long-term equity investment is adjusted accordingly. Whenrecognising the Group’s share of the net profit or loss of the invested entity, the Group makes adjustments based onfair values of the investees’ identifiable assets and liabilities at the acquisition date in accordance with the Group’saccounting policy and accounting period to investee’s net profits, eliminating pro-rata profit or loss from internaltransactions with associates and joint ventures attributed to investor (except that loss from inter-group transactionsdeemed as asset impairment loss shall be fully recognized), provided that invested or sold assets constitutingbusinesses shall be excluded. When the invested enterprise declares profit distribution or cash dividends, thecarrying amount of investment is adjusted down by the Group’s share of the profit distribution and dividends. TheGroup shall derecognize its share of the losses of the investee after the long-term equity investment together withany long-term interests that in substance forms part of the Group’s net investment in the investee are reduced tozero, except to the extent that the Group has incurred obligations to assume additional losses. The Group also adjuststhe carrying amount of long-term equity investments for other changes in owner’s equity of the investees (otherthan the net-off of net profits or losses, other comprehensive income and profit distribution of the investee), andincludes the corresponding adjustment in equity.
12. Fixed assets
A fixed asset is recognized when, and only when, it is probable that future economic benefits that are associatedwith the fixed asset will flow to the Group and the cost can be measured reliably. Subsequent expenditures relatedto a fixed asset are recognized in the carrying amount of the fixed asset if the above recognition criteria are met,and the carrying value of the replaced part is derecognized; otherwise, those expenditures are recognized in profitor loss as incurred.
Fixed assets are initially recognized at cost. Cost of purchased fixed assets includes purchasing price, relevant taxes,and any directly attributable expenditure for bringing the asset to working conditions for its intended use.
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V.Principal Accounting Policies and Accounting Estimates (Cont’d)
12. Fixed assets (cont’d)
Except for those incurred by using the accrued expenses for safety production, fixed assets are depreciated on astraight-line basis, and the respective estimated useful lives, estimated residual value ratios and annual depreciationrates are as follows:
| Useful life | value ratio | Annual depreciation rate | |||||||
| Buildings and constructions | 20-40 years | 5.00% | 2.38%-4.75% | ||||||
| Machinery | 5-18 years | 5.00% | 5.28%-19.00% | ||||||
| Transportation equipment | 5-10 years | 5.00% | 9.5%-19.00% | ||||||
| Electronic equipment | 3-10 years | 5.00% | 9.5%-31.67% | ||||||
| Office equipment | 3-10 years | 5.00% | 9.5%-31.67% | ||||||
| Other equipment | 5-10 years | 5.00% | 9.5%-19.00% | ||||||
The Group reviews, at least at each year end, useful lives, estimated residual values, and depreciation methods offixed assets and makes adjustments if necessary.
13. Construction in progress
Construction in progress is measured at the actual construction expenditures, including necessary project workexpenses incurred during the period while construction is in progress, and other related fees.
The criteria for construction in progress to be transferred to fixed assets when it is ready for its intended useare as follows:
| Criteria | |||
| Buildings and constructions | Actual start of use | ||
| Machinery | The earlier of actual start of use/completion of installation and acceptance |
14. Borrowing costs
The borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying assetare capitalized. The amounts of other borrowing costs incurred are recognised as an expense in the period in whichthey are incurred. The Group has no borrowing costs eligible for capitalization in the current year.
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V.Principal Accounting Policies and Accounting Estimates (Cont’d)
15. Intangible assets
Overseas land use rights and trademark rights are intangible assets with indefinite useful lives. Impairmenttests shall be conducted annually regardless of whether there are indications of impairment. Such intangibleassets shall not be amortized and their useful life shall be reviewed during each accounting period. If there isevidence suggesting that their useful life is limited, accounting treatment will be performed according to theabove policy on intangible assets with definite useful life.
Other intangible assets are amortised on a straight-line basis over their useful lives as follows:
| Useful life | Determination basis | |||||
| Land use rights | 40-50 years | Term of land use right | ||||
| Trademark | 5-10 years | The shorter of the term of trademark rights/expected term of use | ||||
| Patent | 5-10 years | Expected benefit period |
The land ownership of Fosber S.p.A. ("Fosber Group"), a subsidiary of the Company, in Italy has a permanentterm, and the Company believes that the land ownership will be used and will bring expected inflows ofeconomic benefits to the Company in the foreseeable future, so its useful life is regarded as indefinite. Thetrademarks registered by subsidiaries Fosber Group and Fosber America, Inc. ("Fosber America") have auseful life in accordance with the law, but at the expiration of the protection period, Fosber Group and FosberAmerica can apply for an extension at low service charges, so the Company will benefit from the abovetrademarks in the long term. Thus, the Company recognized the trademark use right as intangible assets withindefinite useful life. The useful life of intangible assets with indefinite useful life will be reviewed at the endof each year. After review, the useful life of the above intangible assets is still uncertain.
The Group classifies the expenses for internal research and development as research costs and developmentcosts. All research costs are charged to the current profit or loss as incurred. Expenditure incurred on projectsto develop new products is capitalized and deferred only when the Group can demonstrate the technicalfeasibility of completing the intangible asset so that it will be available for use or sale, its intention to completeand its ability to use or sell the asset, how the asset will generate future economic benefits (includingdemonstration that the product derived from the intangible asset or the intangible asset itself will be marketableor, in the case of internal use, the usefulness of the intangible asset as such), the availability of technical andfinancial resources to complete the project and procure the use or sale of the intangible asset, and the ability tomeasure reliably the expenditure during the development. Development costs which do not meet these criteriais recognized in profit or loss when incurred.
After meeting the above conditions, passing the technical feasibility and economic feasibility study, thecorresponding projects of the Group enter the development stage and begin to be capitalized after beingreviewed and approved.
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V.Principal Accounting Policies and Accounting Estimates (Cont’d)
16. Impairment
The Group assesses impairment of assets other than inventories, contract assets and assets related to contract costs,deferred tax assets and financial assets, using the methods described below:
Impairment of assets (other than the impairment of inventories, contract assets and contract cost assets, investmentproperties measured using the fair value model, deferred tax assets, and financial assets ) is determined in thefollowing way: the Group assesses at the balance sheet date whether there is any indication that an asset may beimpaired; if any indication exists that an asset may be impaired, the Group estimates the recoverable amount of theasset and performs impairment testing; goodwill arising from a business combination, intangible assets withindefinite useful lives and intangible assets not yet available for use are tested for impairment at least at each yearend, irrespective of whether there is any indication that the asset may be impaired.
The recoverable amount is the higher of the asset’s fair value less costs to sell and its present value of estimatedfuture cash flows. The Group estimates recoverable value for individual assets. When it is difficult to estimateindividually, the recoverable value of the cash generating units which the asset belongs to will be estimated. Thedefinition of cash generating units is determined on the basis of whether the cash generating units generate cashflows which are largely independent of those from other cash generating units.
Where the carrying amount of an asset or a cash generating unit exceeds its recoverable amount, the asset or cashgenerating unit is considered impaired and is written down to its recoverable amount. The difference between thecarrying amount and recoverable amount is recognized in profit or loss and allowance for impairment is madeaccordingly.
In connection with impairment tests for goodwill, the carrying value of goodwill arising from business combinationis allocated to relevant cash generating units (“CGU”) from the date of acquisition on a reasonable basis. If it isdifficult to allocate such goodwill to a relevant CGU, it should be allocated to a relevant CGU group. A relevantCGU or CGU group is defined as one which can benefit from the synergies of the business combination and is notlarger than the reporting segments determined by the Group.
In connection with impairment tests for CGUs or CGU groups that comprise goodwill, where indications ofimpairment exists in a CGU or CGU group related to goodwill, impairment tests should be performed first on CGUsor CGU groups that do not comprise goodwill and recognize impairment loss after estimating the recoverableamount. Then impairment tests on CGUs or CGU groups that comprise goodwill should be performed and thecarrying value and recoverable amount should be compared. Where the recoverable amount is lower than thecarrying value, the impairment loss should first be offset against the carrying value of the goodwill allocated toCGUs or CGU groups and then against assets in the CGUs or CGU groups other than goodwill in proportion to theweighting of these assets.
Previously recognized impairment losses are not reversed in subsequent periods.
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V.Principal Accounting Policies and Accounting Estimates (Cont’d)
17. Long-term prepaid expenses
Long-term prepaid expenses are amortized using the straight-line method, with the amortization periods as follows:
| Amortization period | |||||
| Decoration expenditures | 3-5 years | ||||
| Amortization of moulds | 3 years | ||||
| Other expenditures | 3-5 years |
18. Employee benefits
Employee benefits include all kinds of rewards or compensation incurred by the Group in exchange for servicerendered by employees or in the termination of employment, other than share-based payment. Employee benefitsinclude short-term benefits, retirement benefits, dismission benefits and other long-term employees’ benefits.Benefits provided by the Group to the spouses, children and dependents of employees and families of deceasedemployees are also a part of employee benefits.
Short-term benefits
For accounting periods during which services are rendered by employees, short-term benefits that will incur isrecognized as liability and included in profit and loss or related capital costs.
Retirement benefits (defined contribution schemes)
Employees of the Group participated in pension insurance and unemployment insurance schemes managed by thelocal government. The contribution costs are charged as asset cost or to profit or loss when incurred.
Retirement benefits (defined benefit schemes)
The Group operates a defined benefit pension scheme, which requires payments to an independently operated fund.No funds have been injected into the scheme. The cost of benefits provided under the defined benefit scheme iscalculated using the expected benefit accrual unit approach.
Remeasurement arising from defined benefit pension schemes, including actuarial gains or losses, changes in theasset cap effect (deducting amounts included in net interest on net liabilities of the defined benefit schemes) andreturn on scheme assets (deducting amounts included in net interest on net liabilities of the defined benefit schemes)are instantly recognized in the balance sheet and charged to equity through other comprehensive income for theperiod during which it is incurred. It will not be reversed to profit and loss in subsequent periods.
Previous service costs are recognized as current expenses when: the defined benefit scheme is revised, or relevantrestructuring costs or dismission benefits are recognized by the Group, whichever earlier.
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V.Principal Accounting Policies and Accounting Estimates (Cont’d)
18. Employee benefits (cont’d)
Retirement benefits (defined benefit schemes) (cont’d)
Net interest is arrived at by multiplying net liabilities or net assets of defined benefits with a discount rate. Changesin net obligations of defined benefits are recognized as cost of sales, administrative expenses, R&D expenses, sellingexpenses and finance costs in the income statement. Service costs included current services costs, past service costsand settlement of profit or loss. Net interest included interest income from scheme assets, interest expenses forscheme obligations and interest of the asset cap effect.
19. Provisions
Other than contingent consideration and assumed contingent liabilities in a business combination not involvingentities under common control, the Group recognizes as provision an obligation that is related to contingent matterswhen all of the following criteria are fulfilled:
(1) the obligation is a present obligation of the Group;
(2) the obligation would probably result in an outflow of economic benefits from the Group;
(3) the obligation could be reliably measured.
Provisions are initially measured according to the best estimate of expenses on fulfilling the current liabilities, inconnection with the risk, uncertainty and timing value of the currency. The carrying value of the provisions wouldbe reassessed on every balance sheet date. The carrying value will be adjusted to the best estimated value if there iscertain evidence that the current carrying value is not the best estimate.
The contingent liabilities obtained from a business combination not involving entities under common control shallbe measured at fair value at the time of initial recognition. After the initial recognition, according to the amountconfirmed by provisions and the balance of the initial recognition amount after deducting the accumulatedamortization determined by the revenue recognition principle, the higher of the two shall prevail for subsequentmeasurements.
20. Share-based payments
Share-based payments can be distinguished into equity-settled share-based payments and cash-settled share-basedpayments. Equity-settled share-based payments are transactions of the Group settled through the payment of sharesor other equity instruments in consideration for receiving services.
Equity-settled share-based payments made in exchange for services rendered by employees are measured at the fairvalue of equity instruments granted to employees. Instruments which are vested immediately upon the grant arecharged to relevant costs or expenses at the fair value on the date of grant and the capital surplus are creditedaccordingly. Instruments of which vesting is conditional upon completion of services or fulfillment of performanceconditions are measured by recognising services rendered during the period in relevant costs or expenses andcrediting the capital surplus accordingly at the fair value on the date of grant according to the best estimates of thenumber of exercisable equity instruments conducted by the Group at each balance sheet date during the pendingperiod. The fair value of equity instruments is determined using the closing price of the Company’s stock on thedate of grant.
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V.Principal Accounting Policies and Accounting Estimates (Cont’d)
21. Revenue generating from contracts with customers
The Group recognizes its revenue upon the fulfilment of contractual performance obligations under a contract,namely, when the customer obtains control over the relevant products or services. The acquisition control overrelevant products or services shall mean the ability to direct the use of the products or the provision of the servicesand receive substantially all economic benefits derived therefrom.
Contract for the sales of productsThe product sales contract between the Group and its customers typically includes different contractual performanceobligations for the transfer of products and the rendering of services. With respect to the sales of products, the Grouptypically recognizes its revenue at the time when the customer takes control over the products, taking into accountthe following factors: the acquisition of the current right to receive payments for the products, the transfer of majorrisks and rewards of ownership, the transfer of the legal title of the products, the transfer of the physical assets ofthe products, and customers’ acceptance of the products.
Contract for the rendering of installation servicesThe service contract between the Group and its customers includes contractual performance obligations forinstallation services. As the customer is able to forthwith obtain and consume the economic benefits brought by theGroup’s contractual performance when the Group performs a contract, the Group considers such contractualperformance obligations to be obligations performed over a period of time, and revenue shall be recognized on eachbalance sheet date according to the progress of installation.
Significant financing componentWhere a contract contains a significant financing component, the Group determines transaction prices based onamounts payable assumed to be settled in cash by customers immediately upon the acquisition of control over theproducts or services. The difference between such transaction price and contract consideration is amortized over thecontract period using the effective interest method based on a ratio that discounts the nominal contractualconsideration to the current selling price of the products or services. The Group shall not give consideration to anysignificant financing component in a contract if the gap between the customer’s acquisition of control over theproducts or services and payment of consideration is expected to be less than 1 year.
Warranty clausesThe Group provides quality assurance for products sold in accordance with contract terms and laws and regulations.The accounting treatment of quality assurance in the form of warranty assuring customers products sold are incompliance with required standards is set out in Note III.20. Where the Group provides a service warranty for astandalone service in addition to the assurance of compliance of products with required standards, such warranty istreated as a standalone contractual performance obligation, and a portion of the transaction price shall be allocatedto the service warranty based on a percentage of the standalone price for the provision of product and servicewarranty. When assessing whether a warranty is rendering a standalone service in addition to providing guaranteeto customers that all sold goods are in compliance with required standards, the Group will consider whether or notsuch warranty is a statutory requirement, the term of the warranty and the nature of the Group’s undertaking toperform its obligations.
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V.Principal Accounting Policies and Accounting Estimates (Cont’d)
22. Contract assets and contract liabilities
The Group presents contract assets or contract liabilities on the balance sheet according to the relationship betweencontractual performance obligations and customer payments.
Contract assetsContract assets are the right to receive consideration following the transfer of products or services to customerswhich is dependent on factors other than the passage of time.
For details of the Group’s determination and accounting treatment of expected credit losses from contract assets,please refer to Note III.8.
Contract liabilitiesContract liabilities are the obligation to pass products or services to customers in connection with customerconsideration received or receivable, for example, amounts received prior to the transfer of the promised productsor services.
23. Assets relating to contract cost
The Group’s assets relating to contract costs include the contract acquisition costs and contract performance costs.The costs are presented in inventory, other current assets or other non-current assets based on liquidity of the assets.
Where the Group expects the incremental costs for acquiring a contract to be recoverable, such contract acquisitioncosts are recognized as an asset (unless the amortisation period of the asset is not more than 1 year).
Costs incurred by the Group for the performance of a contract are recognized as an asset as contract performancecosts if they do not fall under the scope of the relevant standards for inventories, fixed assets or intangible assetsbut meet all the following conditions:
(1) they are directly related to a current or anticipated contract, including direct labour, direct materials,
manufacturing expenses (or similar expenses), to be borne by customers as specifically stipulated, andotherwise incurred solely in connection with the contract;
(2) they will increase the resources to be utilized in the Company’s future performance of its contractual
obligations;
(3) they are expected to be recoverable.
24. Government grants
Government grants are recognized when there is reasonable assurance that the grant will be received and allattaching conditions will be complied with. The grant is measured as the amount received or receivable where ittakes the form of a cash asset, or at fair value where it is not a cash asset. Where the fair value cannot be reliablyobtained, it should be measured at the nominal value.
In accordance with the stipulations of the government instruments, government grants applied towards acquisitionor the formation of long-term assets in other manners are asset-related government grants; the instrumentsunspecifically refer to the exercise of judgement based on the basic conditions for receiving the asset-related grantapplied towards or the formation of long-term assets in other manners. All other grants are recognized as income-related government grants.
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V.Principal Accounting Policies and Accounting Estimates (Cont’d)
24. Government grants (cont’d)
Government grants relating to income and applied to make up for related costs or losses in future periods shall berecognized as deferred income, and shall be recognized in profit or loss of the period for which related costs or lossare recognized. Government grants specifically applied for the reimbursement of incurred related costs and expensesshall be directly recognized in profit or loss.
Government grants relating to assets shall offset the carrying amount of related assets, or be recognized as deferredincome and credited to profit or loss over the useful life of the asset concerned by reasonable and systematicinstalments (provided that government grants measured at nominal value shall be directly recognized in profit orloss). Where the asset concerned is disposed of, transferred, retired or damaged prior to the end of its useful life, thebalance of the deferred income yet to be allocated shall be transferred to “asset disposal” under current profit orloss.
25. Deferred tax assets
The Group recognizes deferred tax assets and liabilities based on temporary differences using the balance sheetliability method. Temporary differences are differences between the carrying amount of assets or liabilities in thebalance sheet and their tax base on the balance sheet date. Temporary differences also include the differencesbetween the carrying values and tax bases of items not recognized as assets or liabilities where the tax base can becalculated according to the relevant tax regulations.
Deferred tax liabilities are recognized for all taxable temporary differences, except:
(1) where the taxable temporary difference arises from goodwill or the initial recognition of an asset or liability
in a transaction that is not a business combination and, at the time of the transaction, affects neither theaccounting profit nor taxable profit or loss;
(2) in respect of taxable temporary differences associated with investments in subsidiaries, associates and
interests in joint ventures, where the timing of the reversal of the temporary differences can be controlledand it is probable that the temporary differences will not reverse in the foreseeable future.
Deferred tax assets are recognized for all deductible temporary differences, carryforward of unused tax credits andunused tax losses, to the extent that it is probable that taxable profit will be available against which the deductibletemporary differences, and the carryforward of unused tax credits and unused tax losses can be utilized except:
(1) where the deductible temporary difference arises from transaction that is not a business combination and, at
the time of the transaction, affects neither the accounting profit nor taxable profit or loss;
(2) deductible temporary differences associated with investments in subsidiaries, associates and interests in joint
ventures are recognized when all following conditions are met: it is probable that the temporary differenceswill reverse in the foreseeable future, it is probable that taxable profit against the deductible temporarydifferences will be available.
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V.Principal Accounting Policies and Accounting Estimates (Cont’d)
25. Deferred tax assets (cont’d)
As at balance sheet date, deferred tax assets and liabilities are measured in accordance with relevant tax laws at thetax rates that are expected to apply to the period when the asset is realized or the liability is settled, and reflects thetax consequences that would follow the manner in which the Group expects, at the balance sheet date, to recoverthe assets or settle the carrying amount of its assets and liabilities.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extentthat it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred taxasset to be utilized. Unrecognized deferred tax assets are reassessed at the end of each reporting period and arerecognized to the extent that it has become probable that sufficient taxable profit will be available to allow all orpart of the deferred tax asset to be recovered.
Deferred tax assets and liabilities are offset and presented as a net amount if all of the following conditions are met:
the Group has the legal right to set off the current income tax assets and liabilities and the deferred tax assets andliabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or differenttaxable entities, provided that the taxable entity concerned intends either to settle current income tax liabilities andassets on a net basis, or to realize the assets and settle the liabilities simultaneously, in each future period in whichsignificant amounts of deferred tax liabilities or assets are expected to be settled or recovered.
26. Leases
At inception of a contract, the Group assesses whether the contract is, or contains, a lease. A contract is, or contains,a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange forconsideration.
As lessee
The Group recognizes leases as the right-of-use asset and lease liabilities, except for short-term leases and leases oflow-value assets.
Right-of-use assetsAt the commencement date of the lease, the Group recognizes a right-of-use asset. The cost of the right-of-useasset comprises: (1) the amount of the initial measurement of the lease liability; (2) any lease payments madeat or before the commencement date less any lease incentives received; (3) any initial direct cost incurred; (4)an estimate of costs incurred by the lessee in dismantling and removing the underlying asset, restoring the siteon which it is located or restoring the underlying asset to the condition required by the terms and conditionsof the lease. The right-of-use assets are depreciated on a straight-line basis subsequently by the Group. Ifownership of the leased asset transfers to the Group at the end of the lease term, depreciation is calculatedusing the estimated useful life of the asset. Otherwise, the right-of-use assets are depreciated over the shorterof the lease term and the estimated useful lives of the assets.
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V.Principal Accounting Policies and Accounting Estimates (Cont’d)
26. Leases (cont’d)
Lease liabilitiesAt the commencement date, the Group measures the lease liability at the present value of the lease payments thatare not paid at that date, except for short-term leases and low-value asset leases. Lease payments include constantpayments and the substantial constant payments net of lease incentives, variable lease payments that depend on anindex or ratio, the estimated payables of guaranteed residual value, and also include the exercise price of thepurchase option or the amount to be paid upon vest of the termination option, provided that the Group is reasonablycertain that the option will be vested or that the lease term reflects that the Group will exercise the terminationoption.
In calculating the present value of the lease payments, the Group uses the interest rate implicit in the lease as thediscount rate. If that rate cannot be readily determined, the Group uses the lessee’s incremental borrowing rate. TheGroup calculates the interest expenses of the lease liability in each period during the lease term using the constantperiodic rate of interest, and recognizes such interest expenses in profit or loss, except those that in the related assetcosts as required. Variable lease payments that are not included in the measurement of the lease assets are recognizedin profit or loss as incurred, except those that shall be included in the related asset costs as required.
After the commencement date, the Group increases the book value of the lease liability when interest is recognizedand decreases the book value of the lease liability when lease payments are made. In the event of any change to thesubstantial constant payments, the estimated payables of guaranteed residual value, the index or ratio used todetermine lease payments, the assessment results or actual vesting of the purchase option, the renewal option or thetermination option, the Group remeasures the lease liability at the present value of the modified lease payments.
Short-term leases and leases of low-value assetsA short-term lease is a lease that, at the commencement date, has a lease term of 12 months or less, and does notcontains any purchase option. The Group does not recognize the right-of-use assets and lease liabilities for buildingsshort-term leases. The Group recognizes lease payments on short-term leases and leases of low-value assets in therelated asset costs or profit or loss on a straight-line basis over the lease term.
As a lessor
A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownershipof an underlying asset, except that a lease is classified as an operating lease at the inception date.
As a lessor of operating leases
Rental income of operating leases is recognized in current profit or loss over the respective periods during the leaseterm on a straight-line basis, while variable lease payment not included in lease receipts is charged to profit or lossas and when incurred.
Initial direct costs are capitalised and recognised over the lease term on the same basis as rental income, throughprofit or loss.
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V.Principal Accounting Policies and Accounting Estimates (Cont’d)
27. Share repurchase
The consideration and transaction costs paid to repurchase equity instruments are charged against owner’s equity.Except for share-based payments, the issue (including refinancing), repurchase, disposal or retirement of theCompany’s own equity instruments are accounted for as changes in equity.
28. Expenses for safety production
The expenses for safety production set side as stipulated shall be included in the cost of relevant products or currentprofits and losses, and included in the special reserve at the same time. When such expenses are used, accountingtreatment will be performed according to whether fixed assets are formed. If identified as expense expenditures, thespecial reserve will be written down directly; if fixed assets are formed, the expenses incurred will be collected,fixed assets will be recognized when they reach a predetermined usable state, and the equivalent amount of specialreserve will be written down and the equivalent accumulated depreciation will be recognized.
29. Put option related to non-controlling interests
In the process of acquiring majority equity of subsidiaries, the Group grants to minority shareholders the option tosell the shares of subsidiaries held by them to the Group (put option). The Group recognizes the shares ofsubsidiaries held by minority shareholders as non-controlling interests in its consolidated financial statements; forthe put option, the Group undertakes the obligation to redeem the shares of the subsidiaries held by minorityshareholders in cash. The Group removes the present value of the amount payable to redeem the put option from itsequity (excluding non-controlling interests) and classifies it as financial liability, which is remeasured in subsequentperiods at the present value of the the amount payable to redeem the put option and recognized in profit or loss.
30. Fair value measurement
At each balance sheet date, the Group measures the fair value of derivative financial instruments and equityinstrument investments. Fair value means the price receivable from the disposal of an asset or required to be paidfor the transfer of a liability in an orderly transaction incurred by market participants on the measurement date.
The fair value hierarchy to which an asset or liability measured or disclosed in the financial statements at fair valuewill be determined on the basis of the lowest level of input which is significant for the fair value measurement as awhole. Input at the first level represents unadjusted quoted prices in an active market for the acquisition of the sameasset or liability on the measurement date. Input at the second level represents directly or indirectly observableassets or liabilities apart from input at the first level. Input at the third level represents unobservable input for theasset or liability.
At each balance sheet date, the Group reassesses assets and liabilities measured at fair value on an ongoing basisrecognized in the financial statements to determine whether the level of fair value measurement should be changed.
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V.Principal Accounting Policies and Accounting Estimates (Cont’d)
31. Significant accounting judgements and estimates
The preparation of financial statements requires judgement and estimation of the management. Such judgement andestimation will affect the reported amounts of revenue, expenses, assets and liabilities and the disclosure ofcontingent liabilities as at the balance sheet date. However, the consequence arising from the uncertain nature ofsuch estimation may result in significant adjustment to the carrying value of the asset or liability affected in thefuture.
Judgement
In the process of applying the Group’s accounting policies, management has made the following judgements, whichhave the most significant effect on the amounts recognized in the financial statements:
Determination of standalone contractual performance obligationsThe intelligent packaging equipment (printers and corrugators) business of the Group includes four kinds of productor service commitments, i.e. the sale, installation, transportation and insurance services of machinery. As thecustomer can benefit from the individual use of the four kinds of products or services or their use together withother readily available resources and such product or service commitments are distinctly separable from otherproducts or service commitments, the aforesaid product or service commitments constitute standalone contractualperformance obligations respectively.
Business modelThe classification of financial assets at initial recognition is dependent on the Group’s business model for managingthe assets. Factors considered by the Group in judging the business model include enterprise valuation, the methodof reporting the results of financial assets to key management members, risks affecting the results of financial assetsand the method for managing such risks, as well as the form of remuneration received by the management personnelof the businesses concerned. In assessing whether the business model is aimed at receiving contract cash flow, theGroup is required to analyse and exercise judgment in respect of the reasons, timing, frequency and values of anydisposals prior to maturity.
Characteristics of contract cash flowThe classification of financial assets at initial recognition is dependent on the characteristics of the contract cashflow of such type of financial assets. Judgement is required to determine whether the contract cash flow representsinterest payment in relation to principal amounts based on outstanding principal amounts only, including judgementof whether it is significantly different from the benchmark cash flow when assessing modifications to the time valueof currencies, and judgement of whether the fair value of early repayment features is minimal where the financialassets include such early repayment features.
Estimation uncertainty
The key assumptions concerning the future and other key sources of estimation uncertainty at the balance sheetdate, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilitieswithin subsequent financial years, are discussed below.
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V.Principal Accounting Policies and Accounting Estimates (Cont’d)
31. Significant accounting judgements and estimates (cont’d)
Estimation uncertainty (cont’d)
Impairment of financial instruments and contract assetsThe Group has adopted the expected credit loss model to evaluate the impairment of financial instruments andcontract assets. The application of the expected credit loss model requires significant judgement and estimates andthe consideration of all reasonable and soundly based information, including forward-looking information. Inmaking such judgement and estimates, the Group estimates the projected movements of the debtor’s credit riskaccording to past repayment records, economic policies, macro-economic indicators and industry risks. Differentestimates may affect impairment allowances, and established impairment allowances may not equal the actualimpairment loss amount in the future.
Impairment of non-current assets other than financial assets (exclusive of goodwill)The Group assesses at each balance sheet date whether there is an indication that a non-current asset other thanfinancial assets may be impaired. For an intangible asset with an indefinite useful life, in addition to the annualimpairment test, it is also tested when there is an indication that it may be impaired. Non-current assets other thanfinancial assets are tested for impairment when there is an indication that the carrying amount is irrecoverable.Where the carrying amount of an asset or an asset group exceeds its recoverable amount—the higher of the asset orasset group’s fair value less costs to sell and its present value of estimated future cash flows, it is consideredimpaired. The net amount of the fair value less costs to sell is determined based on the price of a similar asset’ssales contract in a fair transaction or the observable market price less the incremental cost directly attributable tothe disposal of the asset. When estimating the present value of future cash flows, the management must choose aproper discount rate.
Impairment of goodwillGoodwill must be tested for impairment at least annually. It requires estimating the present value of future cashflows of an asset group or asset group portfolio allocated with goodwill. When estimating the present value of futurecash flows, the Group needs to estimate future cash flows generating from the asset group or asset group portfolio,and at the same time choose a proper discount rate to determine the present value of future cash flows. For details,see Note V.20.
Fair value of unlisted equity investmentsThe unlisted equity investments have been valued based on the expected cash flows discounted at current ratesapplicable for items with similar terms and risk characteristics. This valuation requires the Group to makeestimates about expected future cash flows, credit risk, volatility and discount rates, and hence they are subject touncertainty.
Deferred tax assetsDeferred tax assets are recognized for all unused tax losses, to the extent that it is likely that taxable profit will beavailable to utilize these unused tax losses. Significant judgments are needed from management to estimate thetiming and amount of taxable profit in the future, with tax planning strategies, to determine the amount of thedeferred tax assets that should be recognized.
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V.Principal Accounting Policies and Accounting Estimates (Cont’d)
31. Significant accounting judgements and estimates (cont’d)
Estimation uncertainty (cont’d)
Lessee’s incremental borrowing rateIf the interest rate implicit in the lease cannot be readily determined, the Group measures the lease liability at thepresent value of the lease payments that are not paid at that date. The Group discounted the lease payments usingthe lessee’s incremental borrowing rate. The Group determines the incremental borrowing rate based on theeconomic environment by reference to the observable interest rate. Then the Group adjusts the reference interestrate based on its own circumstances, underlying assets, lease terms and amounts of lease liabilities to determine theapplicable incremental borrowing rate.
ProvisionsThe Group estimates and makes corresponding provision for product quality guaranty according to contract terms,existing knowledge and past experience. When such contingencies have formed a present obligation and it isprobable that an outflow of economic benefits from the Group will be required to settle the obligation, the Grouprecognizes the contingencies as provisions based on the best estimate of the expenditure required to settle the relatedpresent obligation. The recognition and measurement of provisions largely depend on the judgment of management.In the process of making judgment, the Group is required to assess the risks, uncertainties, time value of money andother factors related to such contingencies.
The Group will undertake the provisions for post-sale quality maintenance provided to customers for the sale,maintenance and renovation of the sold goods. The provisions have been made taking into account the Group’srecent data of maintenance experience, and taking into account the risks, uncertainties and other factors related tomaintenance matters. Any increase or decrease in this provision may affect the profit and loss in future years.
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VI. Taxation
1. Principal tax items and tax rates
| Tax basis | Tax rate | |||||
| Value-added tax (VAT) | The output tax: taxable income; VAT: difference after deducting the input tax which is allowed to be deducted in the current period | 13% and 6% | ||||
| City maintenance and construction tax | Turnover tax actually paid | 7% | ||||
| Education surcharge | Turnover tax actually paid | 3% | ||||
| Local education Surcharge | Turnover tax actually paid | 2% | ||||
| Property tax | Ad valorem tax: remaining value after deducting 30% from the original value of the property; Tax levied from rent: rental income. | 1.2% and 12% | ||||
| Corporate income tax | Taxable income | 15%-28% |
The taxpaying entities subject to different corporate income tax rates are as follows:
| Income tax rate | |||
| Guangdong Dongfang Precision Science & Technology Co., Ltd. | 15.0% | ||
| Suzhou Parsun Power Machine Co., Ltd. ("Parsun Power") | 15.0% | ||
| Guangdong Fosber Intelligent Equipment Co., Ltd. ("Fosber Asia") | 15.0% | ||
| Shenzhen Wonder Printing System Co.,Ltd. ("Wonder Printing") | 15.0% | ||
| Dong Fang Precision (HK) Limited (“Dongfang Precision (HK)”) | 16.5% | ||
| Dong Fang Precision (Netherland) Cooperatief U.A.(“Dongfang Precision (Netherland)”) | 20.0% | ||
| Fosber S.p.A. | 24.0% | ||
| Fosber America, Inc.(“Fosber America”) | 21.0% | ||
| EDF Europe s.r.l.(“EDF”) | 24.0% | ||
| Tiru?a America inc. (“Tiru?a America”) | 21.0% | ||
| Quantum Corrugated S.r.l.(“QCorr”) | 24.0% | ||
| Tiru?a S.L.U. | 28.0% | ||
| Tiru?a France SARL | 15.0% | ||
| SCI Candan | 15.0% |
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VI. Taxation (Cont’d)
2. Tax concessions
On 28 December 2023, the Company passed the high-tech enterprise review by the Department of Science andTechnology of Guangdong Province, Department of Finance of Guangdong Province, Guangdong Provincial TaxService of State Taxation Administration and Guangdong Provincial Local Taxation Bureau and obtained a High-tech Enterprise Certificate (certificate no.: GR202344004676) jointly issued by the above authorities, with a validityof three years, during which the Company paid the corporate income tax at a reduced rate of 15%, so the preferentialtax rate of 15% was applicable to the Company's corporate income tax as at 30 June 2024.
Suzhou Parsun Power Machine Co., Ltd., a subsidiary of the Company, passed the high-tech enterprise review bythe Department of Science and Technology of Jiangsu Province, Department of Finance of Jiangsu Province andJiangsu Provincial Tax Service of State Taxation Administration on 18 November 2022 and obtained a High-techEnterprise Certificate (certificate no.: GR201932000339) jointly issued by the above authorities, with a validity ofthree years, during which the subsidiary paid the corporate income tax at a reduced rate of 15%, so the preferentialtax rate of 15% was applicable to the corporate income tax of Parsun Power as at30 June 2024.
Guangdong Fosber Intelligent Equipment Co., Ltd., a subsidiary of the Company, passed the high-tech enterprisereview by the Department of Science and Technology of Guangdong Province, Department of Finance ofGuangdong Province and Guangdong Provincial Tax Service of State Taxation Administration on 20 December2021 and obtained a High-tech Enterprise Certificate (certificate no.: GR202144003984) jointly issued by the aboveauthorities, with a validity of three years, during which the subsidiary paid the corporate income tax at a reducedrate of 15%, so the preferential tax rate of 15% was applicable to the corporate income tax of Fosber Asia as at 30June 2024.
Shenzhen Wonder Printing System Co.,Ltd., a subsidiary of the Company, passed the high-tech enterprise reviewby the Department of Science and Technology of Guangdong Province, Department of Finance of GuangdongProvince and Guangdong Provincial Tax Service of State Taxation Administration on 19 December 2022 andobtained a High-tech Enterprise Certificate (certificate no.: GR202244206125) jointly issued by the aboveauthorities, with a validity of three years, during which the subsidiary paid the corporate income tax at a reducedrate of 15%, so the preferential tax rate of 15% was applicable to the corporate income tax of Wonder Printing as at30 June 2024.
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VII Notes to the Consolidated Financial Statements
1. Cash and bank balances
Unit: RMB yuan
| Item | Closing balance | Opening balance |
| Cash on hand | 2,431,022.70 | 438,600.93 |
| Cash at banks | 1,410,181,236.34 | 1,491,798,403.81 |
| Other cash balances | 145,353,057.47 | 334,182,899.75 |
| Total | 1,557,965,316.51 | 1,826,419,904.49 |
| Of which: Total amount overseas | 632,748,225.36 | 889,925,365.66 |
Other information:
The fund deposited abroad with restrictions on repatriation was equivalent to RMB16,652,093.09 (31 December 2023:
RMB9,020,813.02). Current bank deposits earn interest income based on interest rates for current deposits.
2. Financial assets held for trading
Unit: RMB yuan
| 2024 | 2023 | |
| Financial assets at fair value through profit or loss Asset management plans | 607,015,754.09 | 682,625,442.45 |
| including | ||
| Asset management plans | 305,683,606.89 | 312,284,352.19 |
| Investments in bank’s wealth management products | 101,197,574.41 | 133,662,614.39 |
| Stocks and Funds | 168,943,413.72 | 205,349,301.18 |
| Derivative financial assets | 11,015,811.87 | 31,329,174.69 |
| Investments in trust products | 20,175,347.20 | |
| Total | 607,015,754.09 | 682,625,442.45 |
3. Notes receivable
(1) Notes receivable by type
Unit: RMB yuan
| Item | Closing balance | Opening balance |
| Bank acceptance notes | 31,123,201.76 | 47,661,412.88 |
| Total | 31,123,201.76 | 47,661,412.88 |
4. Accounts receivable
(1) Disclosure by the aging of accounts receivable
Unit: RMB yuan
| 2024 | 2023 | |
| Within 1 year (inclusive) | 775,404,216.37 | 797,174,742.31 |
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| 1-2 years | 70,958,640.66 | 97,122,608.26 |
| 2-3 years | 13,588,419.17 | 30,354,347.33 |
| Over 3 years | 16,997,762.74 | 17,056,828.32 |
| 3-4 years | 4,376,924.91 | 3,905,106.39 |
| 4-5 years | 3,425,500.10 | 4,320,546.03 |
| Over 5 years | 9,195,337.73 | 8,831,175.90 |
| Total | 876,949,038.94 | 941,708,526.22 |
(2) Disclosure classified by the allowance provision method of accounts receivable
Unit: RMB yuan
| Type | Closing balance | Opening balance | ||||||||
| Gross amount | Allowance | Carrying amount | Gross amount | Allowance | Carrying amount | |||||
| Amount | Percentage | Amount | Allowance percentage | Amount | Percentage | Amount | Allowance percentage | |||
| Accounts receivable for which the allowances are established individually | 2,469,906.29 | 0.28% | 2,469,906.29 | 100.00% | 2,477,303.19 | 0.26% | 2,477,303.19 | 100.00% | ||
| Of which: | ||||||||||
| Accounts receivable for which the allowances are established individually | 2,469,906.29 | 0.28% | 2,469,906.29 | 100.00% | 2,477,303.19 | 0.26% | 2,477,303.19 | 100.00% | ||
| Accounts receivable for which the allowances are established by | 874,479,132.65 | 99.72% | 31,702,595.43 | 3.63% | 842,776,537.22 | 939,231,223.03 | 99.74% | 35,227,247.56 | 3.75% | 904,003,975.47 |
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| group | ||||||||||
| Of which: | ||||||||||
| Accounts receivable for which the allowances are established by group with similar credit risk characteristics | 874,479,132.65 | 99.72% | 31,702,595.43 | 3.63% | 842,776,537.22 | 939,231,223.03 | 99.74% | 35,227,247.56 | 3.75% | 904,003,975.47 |
| Total | 876,949,038.94 | 100.00% | 34,172,501.72 | 3.90% | 842,776,537.22 | 941,708,526.22 | 100.00% | 37,704,550.75 | 4.00% | 904,003,975.47 |
Accounts receivable for which the allowances are established individually:
Unit: RMB yuan
| Entity | Opening balance | Closing balance | ||||
| Gross amount | Allowance | Gross amount | Allowance | ECL | Reason for allowance | |
| Customer 1 | 939,000.00 | 939,000.00 | 936,506.29 | 936,506.29 | 100.00% | Customer’s inability to settle the amount due |
| Customer 2 | 641,600.00 | 641,600.00 | 641,600.00 | 641,600.00 | 100.00% | Customer’s inability to settle the amount due |
| Customer 3 | 608,800.00 | 608,800.00 | 608,800.00 | 608,800.00 | 100.00% | Customer’s inability to settle the amount due |
| Customer 4 | 283,000.00 | 283,000.00 | 283,000.00 | 283,000.00 | 100.00% | Customer’s inability to settle the amount due |
| Customer 5 | 4,903.19 | 4,903.19 | Customer’s inability to settle the amount due | |||
| Total | 2,477,303.19 | 2,477,303.19 | 2,469,906.29 | 2,469,906.29 | ||
Accounts receivable for which the allowances are established by group with similar credit risk characteristics are as follows:
Unit: RMB yuan
| Item | Closing balance | ||
| Gross amount | Allowance | ECL | |
| Within 1 year | 775,404,216.37 | 12,184,723.10 | 1.57% |
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| 1-2 years | 70,958,640.66 | 4,626,196.03 | 6.52% |
| 2-3 years | 13,588,419.17 | 3,712,417.63 | 27.32% |
| 3-4 years | 4,376,924.91 | 2,159,036.61 | 49.33% |
| 4-5 years | 3,425,500.10 | 2,294,790.62 | 66.99% |
| Over 5 years | 6,725,431.44 | 6,725,431.44 | 100.00% |
| Total | 874,479,132.65 | 31,702,595.43 |
（3） Allowances established orreversed in the current period
Allowances in the current period:
Unit: RMB yuan
| Type | Opening balance | Change in the current period | Closing balance | |||
| Established | Reversed | Written off | Others | |||
| Allowances for doubtful accounts receivable | 37,704,550.75 | 746,267.19 | 2,279,718.21 | -506,063.63 | 34,172,501.72 | |
| Total | 37,704,550.75 | 746,267.19 | 2,279,718.21 | -506,063.63 | 34,172,501.72 | |
（4） Actual accounts receivable written off in the current period
Unit: RMB yuan
| Type | Amount |
| Accounts receivable actually written off | 2,279,718.21 |
（5） Top five entities with respect to accounts receivable
Unit: RMB yuan
| Entity | Closing balance of accounts receivable | Closing balance of contract assets | Total closing balance of accounts receivable and contract assets | As a % of the closing balance of total accounts receivable and contract asset | Total closing balance of provision for allowances of accounts receivable and provision for impairment of contract asset |
| Customer 6 | 96,444,762.73 | 96,444,762.73 | 10.38% | 759,914.75 | |
| Customer 7 | 62,749,549.78 | 62,749,549.78 | 6.76% | 2,098,380.44 | |
| Customer 8 | 39,891,214.15 | 39,891,214.15 | 4.29% | 1,994,560.71 | |
| Customer 9 | 33,708,057.58 | 33,708,057.58 | 3.63% | 207,263.14 | |
| Customer 10 | 29,365,514.36 | 29,365,514.36 | 3.16% | 293,655.14 | |
| Total | 262,159,098.60 | 262,159,098.60 | 28.22% | 5,353,774.18 |
5、Contract assets
（1） Contract assets
Unit: RMB yuan
| Type | Closing balance | Opening balance |
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| Gross amount | Allowance | Carrying amount | Gross amount | Allowance | Carrying amount | |
| Contract assets | 51,880,460.04 | 5,464,443.37 | 46,416,016.67 | 47,751,792.27 | 1,805,415.13 | 45,946,377.14 |
| Total | 51,880,460.04 | 5,464,443.37 | 46,416,016.67 | 47,751,792.27 | 1,805,415.13 | 45,946,377.14 |
（2） Disclosure classified by the allowance provision method
Unit: RMB yuan
| Type | Closing balance | Opening balance | ||||||||
| Gross amount | Allowance | Carrying amount | Gross amount | Allowance | Carrying amount | |||||
| Amount | Percentage | Amount | Percentage | Amount | Percentage | Amount | Percentage | |||
| Of which: | ||||||||||
| Provision for allowances by group | 51,880,460.04 | 100.00% | 5,464,443.37 | 10.53% | 46,416,016.67 | 47,751,792.27 | 100.00% | 1,805,415.13 | 3.78% | 45,946,377.14 |
| Of which: | ||||||||||
| Contract assets for which allowances are established by group with similar credit risk characteristics | 51,880,460.04 | 100.00% | 5,464,443.37 | 10.53% | 46,416,016.67 | 47,751,792.27 | 100.00% | 1,805,415.13 | 3.78% | 45,946,377.14 |
| Total | 51,880,460.04 | 100.00% | 5,464,443.37 | 10.53% | 46,416,016.67 | 47,751,792.27 | 100.00% | 1,805,415.13 | 3.78% | 45,946,377.14 |
Accounts receivable for which the allowances are established by group:
Unit: RMB yuan
| Type | Closing balance | ||
| Gross amount | Allowance | Percentage | |
| Within 1 year | 32,023,201.29 | 611,665.61 | 1.91% |
| 1-2 years | 12,918,455.01 | 1,263,137.44 | 9.78% |
| 2-3 years | 6,938,803.74 | 3,589,640.32 | 51.73% |
| Total | 51,880,460.04 | 5,464,443.37 | |
（3）Allowances established orreversed in the current period
Unit: RMB yuan
| Type | Established | Reversed | Written off | 原因 |
| Provision for impairment of contract asset | 3,772,053.30 | 113,659.97 | -634.91 |
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| Total | 3,772,053.30 | 113,659.97 | -634.91 |
6. Receivables financing
Unit: RMB yuan
| Item | Closing balance | Opening balance |
| Notes receivable | 22,923,994.65 | 9,365,344.07 |
| Total | 22,923,994.65 | 9,365,344.07 |
7. Other receivables
Unit: RMB yuan
| Item | Closing balance | Opening balance |
| Other receivables | 39,417,246.69 | 51,797,943.96 |
| Total | 39,417,246.69 | 51,797,943.96 |
(1) Other receivables
1) Disclosure by nature
Unit: RMB yuan
| Nature | Closing gross amount | Opening gross amount |
| Prepaid service charges | 14,460,923.20 | 19,593,768.86 |
| Security deposits | 12,015,002.88 | 7,956,393.69 |
| Export tax refunds | 814,611.40 | 2,952,066.14 |
| Employee loans and petty cash | 4,756,103.62 | 5,078,147.88 |
| Others | 8,815,107.40 | 17,553,973.50 |
| Total | 40,861,748.50 | 53,134,350.07 |
2)Disclosure by the aging
Unit: RMB yuan
| Aging | Closing gross amount | Opening gross amount |
| Within 1 year | 30,021,392.17 | 38,472,808.52 |
| 1-2 years | 4,980,101.04 | 6,754,108.79 |
| 2-3 years | 2,222,921.89 | 4,574,557.21 |
| Over 3 years | 3,637,333.40 | 3,332,875.55 |
| 3-4 years | 2,064,138.92 | 2,082,428.89 |
| 4-5 years | 462,013.19 | 138,543.93 |
| Over 5 years | 1,111,181.29 | 1,111,902.73 |
| Total | 40,861,748.50 | 53,134,350.07 |
3) Disclosure classified by the allowances provision methods
Unit: RMB yuan
| Type | Closing balance | Opening balance | ||||
| Gross amount | Allowance | Carryin | Gross amount | Allowance | Carryin | |
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| Amount | Percentage | Amount | Percentage | g amount | Amount | Percentage | Amount | Percentage | g amount | |
| Of which: | ||||||||||
| Provision for allowances by group | 40,861,748.50 | 100.00% | 1,444,501.81 | 3.54% | 39,417,246.69 | 53,134,350.07 | 1,336,406.11 | 2.52% | 51,797,943.96 | |
| Of which: | ||||||||||
| Portfolio of credit risk characteristics | 40,861,748.50 | 100.00% | 1,444,501.81 | 3.54% | 39,417,246.69 | 53,134,350.07 | 1,336,406.11 | 2.52% | 51,797,943.96 | |
| Total | 40,861,748.50 | 100.00% | 1,444,501.81 | 3.54% | 39,417,246.69 | 53,134,350.07 | 0.00% | 1,336,406.11 | 2.52% | 51,797,943.96 |
Unit: RMB yuan
| Type | Closing balance | ||
| Gross amount | Allowance | Percentage | |
| Ageing risk portfolio | 40,861,748.50 | 1,444,501.81 | 3.54% |
| Total | 40,861,748.50 | 1,444,501.81 | |
Allowances：
Unit: RMB yuan
| Allowances | Stage 1 | Stage 2 | Stage 3 | Total |
| 12-month expected credit loss | Lifetime expected credit loss (without credit impairment) | Lifetime expected credit loss (with credit impairment) | ||
| Balance as at 1 January 2024 | 836,406.11 | 500,000.00 | 1,336,406.11 | |
| Balance as at 1 January 2024 in the current period | ||||
| Reversed in the current period | 108,621.25 | 108,621.25 | ||
| Other changes | 525.55 | 525.55 | ||
| Balance as at 30 June 2024 | 944,501.81 | 500,000.00 | 1,444,501.81 |
Balances with significant changes in loss allowances in the current period:
□ Applicable ? Not applicable
4) Allowances established or reversed in the current period
Allowances in the current period:
Unit: RMB yuan
| Type | Opening balance | Change in the current period | Closing balance | |||
| Established | Reversed | Written off | Others | |||
| Allowances for doubtful other | 1,336,406.11 | 108,621.25 | 525.55 | 1,444,501.81 | ||
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| receivables | ||||||
| Total | 1,336,406.11 | 108,621.25 | 525.55 | 1,444,501.81 |
5) Top five entities with respect to other receivables
Unit: RMB yuan
| Entity | Nature of other receivable | Closing balance | Aging | As a % of the closing balance of total other receivables | Closing balance of allowances for doubtful other receivables |
| Entity 1 | Transactions with third parties | 2,908,663.45 | Within 1 year | 7.12% | |
| Entity 2 | Deposi | 1,630,000.00 | 3-4years | 3.99% | |
| Entity 3 | Prepayments for service | 1,524,466.07 | Within 1 year | 3.73% | |
| Entity 4 | Transactions with third parties | 1,432,865.93 | 1-2years | 3.51% | |
| Entity 5 | Deposi | 1,286,764.20 | Within 1 year | 3.15% | |
| Total | 8,782,759.65 | 21.49% |
8. Prepayments
(1) Prepayments by aging
| Aging | Closing balance | Opening balance | ||
| Amount | Percentage | Amount | Percentage | |
| Within 1 year | 37,389,755.50 | 90.56% | 42,509,851.47 | 92.94% |
| 1-2 years | 2,093,339.54 | 5.07% | 2,960,199.29 | 6.47% |
| 2-3 years | 1,562,544.07 | 3.78% | 20,968.14 | 0.05% |
| Over 3 years | 243,478.22 | 0.59% | 250,125.00 | 0.55% |
| Total | 41,289,117.33 | 45,741,143.90 | ||
(2) Top five entities with respect to prepayments
The closing balance of total prepayments to the top five entities amounted to RMB13,322,248.75, accounting for 32.27%of the closing balance of the total prepayments.
9. Inventories
Is the Company subject to the disclosure requirements for the real estate industry?No.
(1) Inventories by type
Unit: RMB yuan
| Item | Closing balance | Opening balance | ||||
| Gross amount | Inventory | Carrying | Gross amount | Inventory | Carrying | |
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| valuation allowances or impairment allowances for contract performance costs | amount | valuation allowances or impairment allowances for contract performance costs | amount | |||
| Raw materials | 657,648,183.22 | 23,246,459.40 | 634,401,723.82 | 658,870,239.78 | 23,591,282.36 | 635,278,957.42 |
| Work-in-progress | 531,213,033.55 | 20,381,771.56 | 510,831,261.99 | 422,201,722.20 | 20,499,380.02 | 401,702,342.18 |
| Finished goods | 73,511,649.10 | 2,428,096.73 | 71,083,552.37 | 75,950,836.96 | 3,475,752.29 | 72,475,084.67 |
| Product deliveries | 38,336,485.38 | 38,336,485.38 | 31,374,046.56 | 31,374,046.56 | ||
| Semi-finished goods | 45,728,927.36 | 657,696.13 | 45,071,231.23 | 41,372,916.93 | 662,291.37 | 40,710,625.56 |
| Materials consigned for processing | 701,086.87 | 701,086.87 | 869,999.29 | 869,999.29 | ||
| Total | 1,347,139,365.48 | 46,714,023.82 | 1,300,425,341.66 | 1,230,639,761.72 | 48,228,706.04 | 1,182,411,055.68 |
(2) Inventory valuation allowances and impairment allowances for contract performance costs
Unit: RMB yuan
| Item | Opening balance | Increase in the current period | Decrease in the current period | Closing balance | ||
| Established | Others | Reversed or written off | Others | |||
| Raw materials | 23,591,282.36 | 2,959,527.93 | 3,002,584.85 | 301,766.04 | 23,246,459.40 | |
| Work-in-progress | 20,499,380.02 | 8,500.96 | 126,109.42 | 20,381,771.56 | ||
| Finished goods | 3,475,752.29 | 1,047,655.56 | 2,428,096.73 | |||
| Semi-finished goods | 662,291.37 | 4,595.24 | 657,696.13 | |||
| Total | 48,228,706.04 | 2,968,028.89 | 4,054,835.65 | 427,875.46 | 46,714,023.82 | |
10. Current portion of non-current assets
Unit: RMB yuan
| Item | Closing balance | Opening balance |
| Current portion of long-term receivables | 7,456,750.00 | 5,970,000.00 |
| Total | 7,456,750.00 | 5,970,000.00 |
Substantial debt investments/other debt investments:
11. Other current assets
Unit: RMB yuan
| Item | Closing balance | Opening balance |
| Input value-added tax (VAT) to be deducted | 1,412,773.37 | 19,118,882.69 |
| Overpaid VAT | 76,670,114.61 | 37,973,926.46 |
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| Tax repayments | 4,633,256.13 | 5,248,796.24 |
| Others | 13,514,255.58 | 12,893,050.68 |
| Total | 96,230,399.69 | 75,234,656.07 |
12. Long-term receivables
(1) Particulars about long-term receivables
Unit: RMB yuan
| Item | Closing balance | Opening balance | Range of discount rates | ||||
| Gross amount | Impairment allowance | Carrying amount | Gross amount | Impairment allowance | Carrying amount | ||
| Amounts receivable by installment for selling goods | 5,199,250.00 | 49,912.80 | 5,149,337.20 | 4,382,500.00 | 74,304.00 | 4,308,196.00 | |
| Total | 5,199,250.00 | 49,912.80 | 5,149,337.20 | 4,382,500.00 | 74,304.00 | 4,308,196.00 | |
(2) Movements in allowances for doubtful long-term receivables are as follows:
Unit: RMB yuan
| Type | Opening balance | Change in the current period | Closing balance | |||
| Established | Reversed | Written off | Others | |||
| long-term receivables | 74,304.00 | 0.00 | 24,391.20 | 49,912.80 | ||
| Total | 74,304.00 | 0.00 | 24,391.20 | 0.00 | 0.00 | 49,912.80 |
13、Long-term equity investments
Unit: RMB yuan
| Investee | Opening balance (carrying amount) | Change in the current period | Closing balance (carrying amount) | Closing balance of impairment allowance | |||||||
| Additional investment | Reduced investment | Return on investment under the equity method | Adjustment to other comprehensive income | Other equity changes | Declared cash dividends or profit | Impairment allowance | Others | ||||
| 1. Joint ventures | |||||||||||
| 2. Associates | |||||||||||
| Jaten Robot | 87,476,726.17 | -159,036.34 | 87,317,689.83 | ||||||||
| Talleres Tapre | 1,759,901.46 | -44,219.81 | 1,715,681.65 | ||||||||
| Nanj | 28,029,2 | - | 25,274,1 | ||||||||
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| ing Profeta | 57.21 | 2,755,086.32 | 70.89 | ||||||||
| Subtotal | 117,265,884.84 | -2,914,122.66 | -44,219.81 | 114,307,542.37 | |||||||
| Total | 117,265,884.84 | -2,914,122.66 | -44,219.81 | 114,307,542.37 |
The recoverable amount is determined by the net amount after deducting the disposal expenses from the fair value.
□ Applicable ? Not applicable
The recoverable amount is determined by the present value of the expected future cash flows.
□ Applicable ? Not applicable
14. Other non-current financial assets
Unit: RMB yuan
| Item | Closing balance | Opening balance |
| Financial assets at fair value through profit or loss | 528,076,492.06 | 461,278,259.67 |
| Total | 528,076,492.06 | 461,278,259.67 |
15. Fixed assets
Unit: RMB yuan
| Item | Closing balance | Opening balance |
| Fixed assets | 613,800,178.20 | 611,851,577.04 |
| Disposal of fixed assets | 4,276.33 | |
| Total | 613,804,454.53 | 611,851,577.04 |
(1) Particulars about fixed assets
Unit: RMB yuan
| Item | Buildings and constructions | Machinery | Transportation equipment | Other equipment | Total |
| I. Gross amount | |||||
| 1. Opening balance | 664,484,475.58 | 521,052,136.63 | 35,511,284.44 | 71,533,440.95 | 1,292,581,337.60 |
| 2. Increase in the current period | 6,782,132.50 | 22,607,955.74 | 17,701.28 | 2,305,429.89 | 31,713,219.41 |
| (1) Purchases | 242,218.62 | 12,543,564.14 | 11,061.95 | 2,305,429.89 | 15,102,274.60 |
| (2) Transfers from construction in progress | 6,539,913.88 | 10,064,391.60 | 16,604,305.48 | ||
| (3) Increase in business combination | |||||
| (4) Effect of exchange rate movements | 6,639.33 | 6,639.33 | |||
| 3. Decrease in | 3,464,109.92 | 35,006,928.56 | 19,647.90 | 96,141.33 | 38,586,827.71 |
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| the current period | |||||
| (1) Disposal or retirement | 27,396,196.61 | 19,647.90 | 74,778.63 | 27,490,623.14 | |
| (2) Effect of exchange rate movements | 3,464,109.92 | 7,610,731.95 | 21,362.70 | 11,096,204.57 | |
| 4. Closing balance | 667,802,498.16 | 508,653,163.81 | 35,509,337.82 | 73,742,729.51 | 1,285,707,729.30 |
| II. Accumulated depreciation | |||||
| 1. Opening balance | 221,075,804.37 | 394,132,969.99 | 19,130,759.80 | 46,390,226.40 | 680,729,760.56 |
| 2. Increase in the current period | 8,556,580.50 | 9,518,623.18 | 2,055,250.37 | 4,269,444.27 | 24,399,898.32 |
| (1) Provision | 8,556,580.50 | 9,518,623.18 | 2,055,250.37 | 4,269,444.27 | 24,399,898.32 |
| 3. Decrease in the current period | 2,292,746.42 | 30,833,269.63 | 20,588.05 | 75,503.68 | 33,222,107.78 |
| (1) Disposal or retirement | 23,928,114.73 | 67,671.48 | 23,995,786.21 | ||
| (2) Effect of exchange rate movements | 2,292,746.42 | 6,905,154.90 | 20,588.05 | 7,832.20 | 9,226,321.57 |
| 4. Closing balance | 227,339,638.45 | 372,818,323.54 | 21,165,422.12 | 50,584,166.99 | 671,907,551.10 |
| III. Impairment allowances | |||||
| 1. Opening balance | |||||
| 2. Increase in the current period | |||||
| (1) Established | |||||
| 3. Decrease in the current period | |||||
| (1) Disposal or retirement | |||||
| 4. Closing balance | |||||
| IV. Carrying amount | |||||
| 1. Closing carrying amount | 440,462,859.71 | 135,834,840.27 | 14,343,915.70 | 23,158,562.52 | 613,800,178.20 |
| 2. Opening carrying amount | 443,408,671.21 | 126,919,166.64 | 16,380,524.64 | 25,143,214.55 | 611,851,577.04 |
As at 30 June 2024, no registration certificate for properties has been obtained for the new plant with carrying amount of RMB51,528,107.01.
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16. Construction in progress
Unit: RMB yuan
| Item | Closing balance | Opening balance |
| Construction in progress | 260,781,111.24 | 195,557,097.80 |
| Total | 260,781,111.24 | 195,557,097.80 |
(1) Particulars about construction in progress
Unit: RMB yuan
| Item | Closing balance | Opening balance | ||||
| Gross amount | Impairment allowance | Carrying amount | Gross amount | Impairment allowance | Carrying amount | |
| Plants and buildings | 208,719,501.50 | 208,719,501.50 | 161,127,696.15 | 161,127,696.15 | ||
| Equipment installation | 52,061,609.74 | 52,061,609.74 | 34,429,401.65 | 34,429,401.65 | ||
| Total | 260,781,111.24 | 260,781,111.24 | 195,557,097.80 | 195,557,097.80 | ||
(2) Changes in substantial construction in progress in the current period
Unit: RMB yuan
| Project | Budget | Opening balance | Increase in the current period | Transferred to fixed assets in the current period | Other decreases in the current period | Closing balance | Cumulative project investment as a % of the budget | Project progress | Cumulative capitalized interest | Of which: Capitalized interest in the current period | Interest capitalization rate for the current period | Funding source |
| Dongfang Precision - Plant Construction Project | 32,753,000.00 | 4,268,623.84 | 1,167,609.18 | 0.00 | 5,436,233.02 | 16.60% | Self-funded | |||||
| Tiru?a (Guangdong) Intelligent Equipment Manufacturing Co., Ltd. (“Tiru?a Asia”)-Plant Construction | 85,745,627.16 | 13,657,520.15 | 11,621,747.28 | 13,752,276.98 | 11,526,990.45 | 89.58% | Self-funded |
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| Project | ||||||||||||
| Parsun Power - Plant Construction Project | 348,503,300.00 | 86,863,545.66 | 24,520,462.50 | 111,384,008.16 | 31.96% | Self-funded | ||||||
| Fosber Asian – Fosber Songgang Plant | 300,000,000.00 | 39,727,491.84 | 16,092,269.23 | 0.00 | 55,819,761.07 | 18.61% | Self-funded | |||||
| Tiru?a S.L.U.- Corrugated roller production equipment | 74,874,598.40 | 25,079,297.27 | 6,931,931.35 | 2,806,988.67 | 659,159.72 | 28,545,080.23 | 42.75% | Self-funded | ||||
| Fosber Group - Plant Construction Project | 157,184,000.00 | 16,605,803.05 | 19,153,323.85 | 551,600.68 | 35,207,526.22 | 23.34% | Self-funded | |||||
| Others | 9,354,815.99 | 3,522,301.54 | 45,039.83 | -29,434.39 | 12,861,512.09 | Self-funded | ||||||
| Total | 999,060,525.56 | 195,557,097.80 | 83,009,644.93 | 16,604,305.48 | 1,181,326.01 | 260,781,111.24 |
17. Right-of-use assets
Unit: RMB yuan
| Item | Buildings and constructions | Transportation equipment | Total |
| I. Gross amount | |||
| 1. Opening balance | 118,754,693.52 | 28,790,487.11 | 147,545,180.63 |
| 2. Increase in the current period | 711,105.56 | 5,288,128.85 | 5,999,234.41 |
| (1) Increase in the current period | 711,105.56 | 5,288,128.85 | 5,999,234.41 |
| 3. Decrease in the current period | 5,048,280.85 | 760,576.90 | 5,808,857.75 |
| (1) Disposal | 3,012,425.65 | 3,012,425.65 | |
| (2) Effect of exchange rate movements | 2,035,855.20 | 760,576.90 | 2,796,432.10 |
| 4. Closing balance | 114,417,518.23 | 33,318,039.06 | 147,735,557.29 |
| II. Accumulated depreciation | |||
| 1. Opening balance | 47,297,298.40 | 17,905,483.40 | 65,202,781.80 |
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| 2. Increase in the current period | 4,577,843.47 | 5,288,128.85 | 9,865,972.32 |
| (1) Established | 4,577,843.47 | 5,288,128.85 | 9,865,972.32 |
| 3. Decrease in the current period | 3,007,452.00 | 269,853.35 | 3,277,305.35 |
| (1) Disposal | 2,175,640.75 | 2,175,640.75 | |
| (2) Effect of exchange rate movements | 831,811.25 | 269,853.35 | 1,101,664.60 |
| 4. Closing balance | 48,867,689.87 | 22,923,758.90 | 71,791,448.77 |
| III. Impairment allowances | |||
| 1. Opening balance | |||
| 2. Increase in the current period | |||
| (1) Established | |||
| 3. Decrease in the current period | |||
| (1) Disposal | |||
| 4. Closing balance | |||
| IV. Carrying amount | |||
| 1. Closing carrying amount | 65,549,828.36 | 10,394,280.16 | 75,944,108.52 |
| 2. Opening carrying amount | 71,457,395.12 | 10,885,003.71 | 82,342,398.83 |
18. Intangible assets
(1) Particulars about intangible assets
Unit: RMB yuan
| Item | Land use rights | Patent rights | Non-patented technologies | Land ownership | Trademarks and software | Total |
| I. Gross amount | ||||||
| 1. Opening balance | 177,783,228.49 | 119,970,675.09 | 16,814,786.28 | 205,927,442.07 | 520,496,131.93 | |
| 2. Increase in the current period | 10,015.11 | 142,024.92 | 152,040.03 | |||
| (1) Purchases | 10,015.11 | 142,024.92 | 152,040.03 | |||
| (2) Internal R&D | ||||||
| (3) Increase in business combination | ||||||
| 3. Decrease in the current period | 2,475,759.40 | 422,551.94 | 4,398,332.39 | 7,296,643.73 | ||
| (1) Disposal | 524.67 | 524.67 |
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| (2) Effect of exchange rate movements | 2,475,234.73 | 422,551.94 | 4,398,332.39 | 7,296,119.06 | ||
| 4. Closing balance | 177,783,228.49 | 117,504,930.80 | 16,392,234.34 | 201,671,134.60 | 513,351,528.23 | |
| II. Accumulated amortization | ||||||
| 1. Opening balance | 28,873,664.24 | 80,633,114.94 | 45,034,872.70 | 154,541,651.88 | ||
| 2. Increase in the current period | 1,928,010.79 | 5,066,450.48 | 4,564,293.66 | 11,558,754.93 | ||
| (1) Provision | 1,928,010.79 | 5,066,450.48 | 4,564,293.66 | 11,558,754.93 | ||
| 3. Decrease in the current period | 1,924,316.35 | 838,805.50 | 2,763,121.85 | |||
| (1) Disposal | 524.67 | 524.67 | ||||
| (2) Effect of exchange rate movements | 1,923,791.68 | 838,805.50 | 2,762,597.18 | |||
| 4. Closing balance | 30,801,675.03 | 83,775,249.07 | 48,760,360.86 | 163,337,284.96 | ||
| III. Impairment allowances | ||||||
| 1. Opening balance | ||||||
| 2. Increase in the current period | ||||||
| (1) Established | ||||||
| 3. Decrease in the current period | ||||||
| (1) Disposal | ||||||
| 4. Closing balance | ||||||
| IV. Carrying amount | ||||||
| 1. Closing carrying amount | 146,981,553.46 | 33,729,681.73 | 16,392,234.34 | 152,910,773.74 | 350,014,243.27 | |
| 2. Opening carrying amount | 148,909,564.25 | 39,337,560.15 | 16,814,786.28 | 160,892,569.37 | 365,954,480.05 |
As at the period-end, intangible assets arising from internal R&D accounted for 1.26% of the carrying amount of totalintangible assets.
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19. Goodwill
(1) Gross amounts of goodwill
Unit: RMB yuan
| Investee or item generating goodwill | Opening balance | Increase in the current period | Decrease in the current period | Closing balance | ||
| Generated due to business combination | Effect of exchange rate movements | Disposal | Effect of exchange rate movements | |||
| Parsun Power | 208,031,946.10 | 208,031,946.10 | ||||
| EDF | 68,997,515.28 | 1,733,892.67 | 67,263,622.61 | |||
| Fosber Group | 161,353,929.07 | 4,054,789.42 | 157,299,139.65 | |||
| QCorr | 13,680,836.70 | 343,796.47 | 13,337,040.23 | |||
| Wonder Digital | 119,422,168.56 | 119,422,168.56 | ||||
| Total | 571,486,395.71 | 6,132,478.56 | 565,353,917.15 | |||
(2) Impairment allowances for goodwill
Unit: RMB yuan
| Investee or item generating goodwill | Opening balance | Increase in the current period | Decrease in the current period | Closing balance | ||
| Established | Effect of exchange rate movements | Disposal | Effect of exchange rate movements | |||
| Parsun Power | 61,855,054.35 | 61,855,054.35 | ||||
| EDF | 68,997,515.28 | 1,733,892.67 | 67,263,622.61 | |||
| Total | 130,852,569.63 | 1,733,892.67 | 129,118,676.96 | |||
20. Long-term prepaid expenses
Unit: RMB yuan
| Item | Opening balance | Increase in the current period | Amortization in the current period | Other decreases | Closing balance |
| Plant decoration expenditures | 3,119,789.38 | 111,926.60 | 652,050.95 | 2,579,665.03 | |
| Expenditures on plant supporting engineering | 1,841,048.98 | 87,364.55 | 460,130.21 | 1,468,283.32 | |
| Internet access for offices | 48,398.19 | 685,714.32 | 264,253.72 | 469,858.79 | |
| Amortization of lease assets | 2,114,285.71 | 342,857.16 | 685,714.32 | 1,085,714.23 | |
| Office decoration expenditures | 3,914,240.70 | 750,978.64 | 3,163,262.06 | ||
| Amortization of moulds | 17,021,708.05 | 104,567.24 | 3,799,715.38 | 13,326,559.91 | |
| CE certification fee | 484,110.53 | 251,002.12 | 164,224.81 | 570,887.84 | |
| Total | 28,543,581.54 | 1,240,574.83 | 6,434,210.87 | 685,714.32 | 22,664,231.18 |
Other information:
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21. Deferred tax assets/liabilities
(1) Deferred tax assets before offsetting
Unit: RMB yuan
| Item | Closing balance | Opening balance | ||
| Deductible temporary differences | Deferred tax assets | Deductible temporary differences | Deferred tax assets | |
| Asset impairment allowances | 45,301,530.09 | 9,289,922.03 | 41,464,787.21 | 7,585,286.13 |
| Internal unrealized profit | 36,175,227.36 | 8,682,054.56 | 31,106,124.16 | 7,465,469.80 |
| Deductible loss | 24,084,790.86 | 151,837,694.55 | 1,148,967,602.00 | 174,998,363.51 |
| Provisions—after-sales maintenance service charges | 133,188,952.64 | 35,179,064.47 | 137,007,925.99 | 35,957,989.47 |
| Deferred income | 50,785,831.92 | 11,342,720.11 | 52,411,022.56 | 11,682,516.17 |
| Accrued expenses | 42,214,932.50 | 9,137,185.60 | 48,552,350.45 | 9,375,318.47 |
| Equity incentives | 1,993,728.47 | 299,059.27 | 1,549,606.23 | 237,403.35 |
| Credit impairment allowances | 34,952,824.89 | 8,184,625.89 | 41,884,654.49 | 9,319,501.09 |
| Lease liabilities | 20,639,377.30 | 3,095,906.60 | 25,116,594.05 | 3,435,296.89 |
| Financial assets at fair value through profit or loss | 112,515,085.81 | 16,972,772.72 | ||
| Others | 126,451,780.39 | 28,890,072.69 | 117,570,323.59 | 26,223,652.56 |
| Total | 628,304,062.23 | 282,911,078.49 | 1,645,630,990.73 | 286,280,797.44 |
(2) Deferred tax liabilities before offsetting
Unit: RMB yuan
| Item | Closing balance | Opening balance | ||
| Taxable temporary differences | Deferred tax liabilities | Taxable temporary differences | Deferred tax liabilities | |
| Increase in value in asset valuation in business combination not involving entities under common control | 39,219,929.79 | 6,895,126.79 | 42,559,397.20 | 7,565,638.16 |
| Financial assets at fair value through profit or loss | 1,794,832.35 | 233,592.92 | ||
| Depreciation difference of fixed assets | 42,241,387.90 | 7,411,861.10 | 61,963,523.25 | 10,363,510.02 |
| Right-of-use assets | 11,444,813.48 | 1,716,722.03 | 22,733,086.57 | 3,069,779.96 |
| Others | 82,342,140.65 | 20,600,572.13 | 69,220,019.79 | 18,030,160.88 |
| Total | 175,248,271.82 | 36,624,282.05 | 198,270,859.16 | 39,262,681.94 |
(3) Net balances of deferred tax assets/liabilities after offsetting
Unit: RMB yuan
| Item | Offset amount between deferred tax assets and liabilities as at the | Closing balance of deferred tax assets or liabilities after | Offset amount between deferred tax assets and liabilities as at the | Opening balance of deferred tax assets or liabilities after |
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| period-end | offsetting | period-begin | offsetting | |
| Deferred tax assets | 33,555,866.50 | 249,355,211.99 | 30,408,387.66 | 255,872,409.78 |
| Deferred tax liabilities | 33,555,866.50 | 3,068,415.55 | 30,408,387.66 | 8,854,294.28 |
(4) Breakdown of deferred tax assets unrecognized
Unit: RMB yuan
| Item | Closing balance | Opening balance |
| Deductible temporary differences | 1,007,221.51 | 3,925,408.90 |
| Deductible losses | 164,920,745.73 | 149,803,433.80 |
| Total | 165,927,967.24 | 153,728,842.70 |
(5) Deductible losses not recognized as deferred tax assets will expire as follows
Unit: RMB yuan
| Year | Closing amount | Opening amount | Remark |
| 2024 | 1,500,658.71 | 4,418,846.10 | |
| 2025 | 13,984,168.64 | 13,984,168.64 | |
| 2026 | 12,841,957.31 | 12,841,957.31 | |
| 2027 | 73,324,757.62 | 73,324,757.62 | |
| 2028 | 47,378,458.10 | 49,159,113.03 | |
| 2029 | 16,897,966.86 | ||
| Total | 165,927,967.24 | 153,728,842.70 |
22. Other non-current assets
Unit: RMB yuan
| Item | Closing balance | Opening balance |
| Prepayment for acquisition of long-term assets | 79,089,022.11 | 87,122,697.89 |
| Certificates of deposit | 10,413,178.08 | 10,248,630.14 |
| Others | 61,993.57 | 66,274.25 |
| Total | 89,564,193.76 | 97,437,602.28 |
23. Assets with restricted ownership or right of use
Unit: RMB yuan
| Item | Closing balance | Opening balance | ||
| Cash and bank balances | 47,774,281.37 | Deposit and freezing | 153,905,292.65 | Deposit, pledge and freezing |
| Fixed assets | 63,977,965.43 | Mortgage | 4,460,554.82 | Mortgage |
| Total | 111,752,246.80 | 158,365,847.47 | ||
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24. Short-term borrowings
(1) Short-term borrowings by type
Unit: RMB yuan
| Item | Closing balance | Opening balance |
| Guaranteed loan | 260,544,181.40 | |
| Credit loan | 93,156,553.78 | 89,544,237.78 |
| Bills discounted | 20,461,553.62 | |
| Total | 93,156,553.78 | 370,549,972.80 |
25. Financial liabilities held for trading
Unit: RMB yuan
| Item | Closing balance | Opening balance |
| Financial liabilities held for trading | 116,220,211.63 | 115,900,827.21 |
| Of which: | ||
| Non-controlling interests put options | 116,220,211.63 | 115,900,827.21 |
| Of which: | ||
| Total | 116,220,211.63 | 115,900,827.21 |
26. Notes payable
Unit: RMB yuan
| Type | Closing balance | Opening balance |
| Bank acceptance notes | 167,522,939.78 | 152,433,276.09 |
| Total | 167,522,939.78 | 152,433,276.09 |
27. Accounts payable
(1) Breakdown of accounts payable
Unit: RMB yuan
| Item | Closing balance | Opening balance |
| Purchases of inventories | 690,971,357.11 | 737,544,841.42 |
| Total | 690,971,357.11 | 737,544,841.42 |
28. Other payables
Unit: RMB yuan
| Item | Closing balance | Opening balance |
| Other payables | 124,061,681.76 | 126,415,425.61 |
| Total | 124,061,681.76 | 126,415,425.61 |
（1） Other payables
Unit: RMB yuan
| Item | Closing balance | Opening balance |
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| Accrued expenses | 45,690,922.02 | 53,166,304.73 |
| Repurchase obligation of restricted shares | 2,290,000.00 | 2,290,000.00 |
| Payables for settled lawsuit | 3,228,592.11 | 3,311,817.37 |
| Security deposits | 4,658,760.69 | 2,557,648.92 |
| Equity acquisition | 28,754,622.55 | 31,587,327.06 |
| Others | 39,438,784.39 | 33,502,327.53 |
| Total | 124,061,681.76 | 126,415,425.61 |
29. Contract liabilities
Unit: RMB yuan
| Item | Closing balance | Opening balance |
| Contract liabilities | 553,691,546.87 | 645,608,919.34 |
| Total | 553,691,546.87 | 645,608,919.34 |
30. Employee benefits payable
(1) Breakdown of employee benefits payable
Unit: RMB yuan
| Item | Opening balance | Increase in the current period | Decrease in the current period | Closing balance |
| I. Short-term benefits | 139,561,863.20 | 366,849,096.33 | 387,457,722.94 | 118,953,236.59 |
| II. Retirement benefits-defined contribution schemes | 13,721,068.90 | 55,532,699.08 | 58,737,457.22 | 10,516,310.76 |
| Total | 153,282,932.10 | 422,381,795.41 | 446,195,180.16 | 129,469,547.35 |
(2) Breakdown of short-term benefits
Unit: RMB yuan
| Item | Opening balance | Increase in the current period | Decrease in the current period | Closing balance |
| 1. Salaries, bonuses, allowances, and subsidies | 132,643,220.01 | 320,125,067.07 | 342,206,272.24 | 110,562,014.84 |
| 2. Employee welfare | 5,755,809.78 | 17,309,631.69 | 16,015,280.99 | 7,050,160.48 |
| 3. Social security contributions | 295,721.94 | 26,248,331.47 | 26,104,125.55 | 439,927.86 |
| Including: medical insurance | 242,676.82 | 18,679,249.36 | 18,698,219.61 | 223,706.57 |
| Work injury insurance | 36,933.13 | 7,265,337.17 | 7,102,476.35 | 199,793.95 |
| Maternity insurance | 16,111.99 | 303,744.94 | 303,429.59 | 16,427.34 |
| 4. Housing funds | 614,072.00 | 2,567,525.12 | 2,560,605.12 | 620,992.00 |
| 5. Labour union funds and employee education funds | 253,039.47 | 598,540.98 | 571,439.04 | 280,141.41 |
| Total | 139,561,863.20 | 366,849,096.33 | 387,457,722.94 | 118,953,236.59 |
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(3) Breakdown of defined contribution schemes
Unit: RMB yuan
| Item | Opening balance | Increase in the current period | Decrease in the current period | Closing balance |
| 1. Basic endowment insurance | 13,703,110.06 | 55,142,091.58 | 58,346,739.96 | 10,498,461.68 |
| 2. Unemployment insurance | 17,958.84 | 390,607.50 | 390,717.26 | 17,849.08 |
| Total | 13,721,068.90 | 55,532,699.08 | 58,737,457.22 | 10,516,310.76 |
31. Tax payable
Unit: RMB yuan
| Item | Closing balance | Opening balance |
| Value-added tax | 869,317.95 | 5,649,692.90 |
| Corporate income tax | 81,468,090.78 | 45,973,508.11 |
| Individual income tax | 17,752,961.37 | 11,897,332.76 |
| City maintenance and construction tax | 102,182.25 | 430,752.88 |
| Education surcharge | 73,108.62 | 307,070.00 |
| Stamp duties | 112,883.55 | 151,505.57 |
| Property tax | 1,543,451.86 | 2,731,038.94 |
| Land use tax | 235,994.95 | 468,302.25 |
| environmental protection tax | 448.20 | |
| Others | 823,048.16 | |
| Total | 102,981,487.69 | 67,609,203.41 |
32. Current portion of non-current liabilities
Unit: RMB yuan
| Item | Closing balance | Opening balance |
| Current portion of long-term borrowings | 45,128,537.87 | 35,871,630.01 |
| Current portion of lease liabilities | 19,970,035.55 | 21,129,766.43 |
| Total | 65,098,573.42 | 57,001,396.44 |
33、Other current liabilities
Unit: RMB yuan
| Item | Closing balance | Opening balance |
| Output tax to be written off | 5,385,410.56 | 3,769,255.24 |
| Endorsed notes receivable | 2,817,454.66 | 5,375,919.77 |
| Others | 804,224.03 | |
| Total | 9,007,089.25 | 9,145,175.01 |
34. Long-term borrowings
(1) Long-term borrowings by type
Unit: RMB yuan
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| Item | Closing balance | Opening balance |
| Collateralized loan | 62,020,004.91 | 2,150,669.29 |
| Guaranteed loan | 50,914,619.40 | 55,374,274.02 |
| Credit loan | 65,884,796.53 | 57,454,387.85 |
| Less: Current portion of long-term borrowings | -45,128,537.87 | -35,871,630.01 |
| Total | 133,690,882.97 | 79,107,701.15 |
Other information, including interest rate ranges:
On 30 June 2024, the annual interest rates of the loans in the table above ranged from 0.0% to 7.48% (31 December 2023:
0.0%-5.65%).
On 30 June 2024 and 31 December 2023, the Group had no overdue loans.
35. Lease liabilities
Unit: RMB yuan
| Item | Closing balance | Opening balance |
| Lease liabilities | 80,143,105.97 | 86,991,207.75 |
| Less: Current portion of non-current liabilities | -19,970,035.55 | -21,129,766.43 |
| Total | 60,173,070.42 | 65,861,441.32 |
(1) Long-term employee benefits payable
Unit: RMB yuan
| Item | Closing balance | Opening balance |
| Retirement benefits- net liabilities of defined benefit schemes | 13,459,377.58 | 13,964,394.20 |
| Total | 13,459,377.58 | 13,964,394.20 |
(2) Movements in the present value of defined benefit obligations are as follows:
Unit: RMB yuan
| Item | Closing balance | Opening balance |
| Opening balance | 13,964,394.20 | 13,179,944.17 |
| Included in profit or loss | -80,509.59 | -622,045.57 |
| Current service cost | 76,298.00 | 87,904.06 |
| Net interest | -156,807.59 | -709,949.63 |
| Included in other comprehensive income | -68,006.75 | 247,369.25 |
| Actuarial gains or losses | -68,006.75 | 247,369.25 |
| Other changes | -356,500.28 | 927,029.61 |
| Benefits paid | -6,666.14 | 133,262.44 |
| Effect of exchange rate movements | -349,834.14 | 793,767.17 |
| Closing balance | 13,459,377.58 | 13,732,297.46 |
37. Provisions
Unit: RMB yuan
| Item | Closing balance | Opening balance | Reason for provision |
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| Product quality warranty | 134,226,620.26 | 135,804,488.12 | |
| Others | 16,305,253.06 | 32,554,465.72 | |
| Total | 150,531,873.32 | 168,358,953.84 |
38. Deferred income
Unit: RMB yuan
| Item | Opening balance | Increase in the current period | Decrease in the current period | Closing balance | Reason for deferred income |
| Government grants | 9,956,991.66 | 558,330.00 | 9,398,661.66 | ||
| Total | 9,956,991.66 | 558,330.00 | 9,398,661.66 |
39. Other non-current liabilities
Unit: RMB yuan
| Item | Closing balance | Opening balance |
| Purchase obligations of non-controlling interest options | 16,516,181.12 | 16,941,926.93 |
| Other | 6,119,725.72 | 5,476,927.87 |
| Total | 22,635,906.84 | 22,418,854.80 |
40. Share capital
Unit: RMB yuan
| Opening balance | Increase/decrease in the current period | Closing balance | |||||
| New issues | Shares as dividend converted from profit | Shares as dividend converted from capital surplus | Others | Subtotal | |||
| Total share capital | 1,240,618,400.00 | -21,572,060.00 | -21,572,060.00 | 1,219,046,340.00 | |||
Other information:
In the current period, the Company retired a total of 21,572,060shares, reducing its total share capital from 1,240,618,400shares to 1,219,046,340 shares.
41. Capital surplus
Unit: RMB yuan
| Item | Opening balance | Increase in the current period | Decrease in the current period | Closing balance |
| Capital premium (share premium) | 2,752,232,589.91 | 79,203,431.39 | 2,673,029,158.52 | |
| Other capital surplus | 137,696,407.30 | 1,065,753.95 | 138,762,161.25 | |
| Total | 2,889,928,997.21 | 1,065,753.95 | 79,203,431.39 | 2,811,791,319.77 |
Other information, including changes in the current period and reasons for changes:
(1) During the current period, the share-based payment of the Company was included in shareholders' equity, increasingcapital reserve by RMB 1,065,753.95.
(2) During the current period, the Company retired a total of 21,572,060 shares (as described in Note VII, 40), reducingcapital reserve by RMB 79,203,431.39.
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42. Treasury shares
Unit: RMB yuan
| Item | Opening balance | Increase in the current period | Decrease in the current period | Closing balance |
| Share repurchase | 218,298,532.79 | 100,775,491.39 | 117,523,041.40 | |
| Total | 218,298,532.79 | 100,775,491.39 | 117,523,041.40 |
Other information, including changes in the current period and reasons for changes:
The decrease in treasury shares was mainly due to the share retirement (as stated in Item 40 under Note VII).
43. Other comprehensive income
Unit: RMB yuan
| Item | Opening balance | Amount generated in the current period | Closing balance | |||||
| Amount before income tax generated in the current period | Less: amount previously recognized in other comprehensive income and currently transferred to profit or loss | Less: amount previously recognized in other comprehensive income and currently transferred to retained earnings | Less: Income tax expense | After-tax amount attributable to the parent | After-tax amount attributable to non-controlling interests | |||
| I. Other comprehensive income that will not be reclassified to profit or loss | 1,164,980.51 | 61,371.94 | 61,371.94 | 1,226,352.45 | ||||
| Of which: Changes due to remeasurement of defined benefit schemes | 1,164,980.51 | 61,371.94 | 61,371.94 | 1,226,352.45 | ||||
| II. Other comprehensive income that will be reclassified to profit or loss | 73,957,098.01 | -28,943,220.33 | -29,144,893.16 | 201,672.83 | 44,812,204.85 | |||
| Differences arising from the translation | 74,001,070.08 | -28,943,220.33 | -29,144,893.16 | 201,672.83 | 44,856,176.92 | |||
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| of foreign currency-denominated financial statements | ||||||||
| Others | -43,972.07 | -43,972.07 | ||||||
| Total other comprehensive income | 75,122,078.52 | -28,881,848.39 | -29,083,521.22 | 201,672.83 | 46,038,557.30 |
Other information, including the reconciliation from the valid portion of gains and losses on cash flow hedges to initialrecognition amounts of hedged items:
44. Special reserve
Unit: RMB yuan
| Item | Opening balance | Increase in the current period | Decrease in the current period | Closing balance |
| Expenses for safety production | 16,229,817.03 | 1,198,032.00 | 588,236.76 | 16,839,612.27 |
| Total | 16,229,817.03 | 1,198,032.00 | 588,236.76 | 16,839,612.27 |
Other information, including movements in the current period and reasons for the movements:
45. Surplus reserves
Unit: RMB yuan
| Item | Opening balance | Increase in the current period | Decrease in the current period | Closing balance |
| Statutory surplus reserves | 51,830,974.45 | 51,830,974.45 | ||
| Total | 51,830,974.45 | 51,830,974.45 |
Notes to surplus reserves, including movements in the current period and reasons for the movements:
46. Retained earnings
Unit: RMB yuan
| Item | Current period | Last year |
| Opening retained earnings before adjustment | 456,258,959.55 | 23,018,722.11 |
| Opening retained earnings after adjustment | 456,258,959.55 | 23,018,722.11 |
| Add: Net profit attributable to owners of the parent in the current period | 163,880,472.14 | 433,240,237.44 |
| Closing retained earnings | 620,139,431.69 | 456,258,959.55 |
Adjustments to opening retained earnings:
1) Retrospective adjustments as a result of the Accounting Standards for Business Enterprises and related new regulationshad an effect of RMB0.00 on opening retained earnings.
2) Accounting policy changes had an effect of RMB0.00 on opening retained earnings.
3) Correction of material accounting errors had an effect of RMB0.00 on opening retained earnings.
4) Changes to the consolidation scope as a result of any business combination involving entities under common controlhad an effect of RMB0.00 on opening retained earnings.
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5) Other adjustments had a combined effect of RMB0.00 on opening retained earnings.
47. Operating revenue and costs
Unit: RMB yuan
| Item | H1 2024 | H1 2023 | ||
| Revenue | Costs | Revenue | Costs | |
| Principal operations | 2,158,219,373.35 | 1,466,482,328.94 | 2,069,224,162.36 | 1,459,261,571.03 |
| Other operations | 2,969,534.05 | 1,568,441.66 | 13,382,291.36 | 13,368,573.08 |
| Total | 2,161,188,907.40 | 1,468,050,770.60 | 2,082,606,453.72 | 1,472,630,144.11 |
Information related to contract performance obligations:
Information related to the transaction price allocated to residual performance obligations:
At the end of the Reporting Period, the amount of revenue corresponding to performance obligations that had beencontracted but not yet performed or fulfilled was RMB553,691,546.87, of which RMB553,691,546.87 is expected to berecognized during 2024-2025.
48. Taxes and surcharges
Unit: RMB yuan
| Item | H1 2024 | H1 2023 |
| City maintenance and construction tax | 3,685,148.38 | 2,991,325.36 |
| Education surcharge | 2,687,834.54 | 2,143,432.58 |
| Property tax | 2,376,568.91 | 2,241,139.82 |
| Land use tax | 206,660.90 | 311,593.32 |
| Vehicle and vessel use tax | 6,882.77 | 4,782.72 |
| Stamp duties | 458,217.47 | 497,520.52 |
| Others | 60,099.64 | 92,682.58 |
| Total | 9,481,412.61 | 8,282,476.90 |
49、Administrative expenses
Unit: RMB yuan
| Item | H1 2024 | H1 2023 |
| Employee benefits | 86,471,690.69 | 92,138,490.27 |
| Depreciation and amortization expenses | 14,210,998.52 | 15,556,417.85 |
| Intermediary expenses | 13,921,094.92 | 11,002,554.66 |
| Equity incentives | 714,743.91 | 15,217,575.03 |
| Office expenses | 10,201,972.20 | 8,539,427.19 |
| Travel and reception expenses | 6,636,531.47 | 8,038,848.68 |
| Conference expenses | 7,623,766.99 | 5,214,777.28 |
| Rental expenses | 4,170,373.66 | 3,258,863.24 |
| Technology development expenses | 7,544,884.23 | 4,513,652.67 |
| Other expenses | 10,453,526.93 | 11,338,057.76 |
| Total | 161,949,583.52 | 174,818,664.63 |
50. Selling expenses
Unit: RMB yuan
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| Item | H1 2024 | H1 2023 |
| Commissions and agency fees | 29,735,720.82 | 27,156,128.98 |
| Employee benefits | 34,818,930.88 | 33,175,562.84 |
| Product quality warranties | 34,166,847.70 | 35,889,981.39 |
| Advertising and exhibition expenses | 10,370,281.35 | 6,775,903.30 |
| Travel expenses | 6,863,531.64 | 6,013,175.38 |
| equity incentive | 63,351.06 | 2,152,048.69 |
| Depreciation and amortization expenses | 1,121,092.53 | 1,119,258.60 |
| Other expenses | 5,979,622.18 | 6,966,621.58 |
| Total | 123,119,378.16 | 119,248,680.76 |
51. R&D expenses
Unit: RMB yuan
| Item | H1 2024 | H1 2023 |
| Employee benefits | 34,842,850.55 | 34,207,002.02 |
| Depreciation and amortization expenses | 8,149,649.45 | 8,169,488.94 |
| Material expenses | 2,892,339.95 | 4,204,251.70 |
| Technology development expenses | 120,746.76 | 5,470,265.49 |
| equity incentive | 217,044.08 | 2,019,107.48 |
| Other expenses | 4,143,436.79 | 5,858,904.42 |
| Total | 50,366,067.58 | 59,929,020.05 |
52. Finance costs
Unit: RMB yuan
| Item | H1 2024 | H1 2023 |
| Interest expenses | 10,539,931.90 | 5,872,796.16 |
| Less: Interest income | 22,603,240.17 | 12,725,562.50 |
| Exchange gains and losses | -2,315,440.36 | -2,238,057.48 |
| Others | 1,584,586.79 | 4,551,675.11 |
| Total | -12,794,161.84 | -4,539,148.71 |
53. Other income
Unit: RMB yuan
| Source of other income | H1 2024 | H1 2023 |
| Government grants | 9,890,423.74 | 3,598,750.12 |
| Handling charges for individual income tax withheld | 432,933.77 | 741,077.27 |
| Total | 10,323,357.51 | 4,339,827.39 |
54. Gains and losses on changes in fair value
Unit: RMB yuan
| Source of gains and losses on changes in fair value | H1 2024 | H1 2023 |
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| Financial assets held for trading | -85,374,294.70 | 2,006,095.39 |
| Total | -85,374,294.70 | 2,006,095.39 |
55. Investment income
Unit: RMB yuan
| H1 2024 | H1 2023 | |
| Income from long-term equity investments measured at equity method | -2,914,122.66 | -2,332,949.80 |
| Income from financial assets held for trading | -5,280,793.54 | 38,442,145.88 |
| Total | -8,194,916.20 | 36,109,196.08 |
56. Credit impairment loss
Unit: RMB yuan
| Item | H1 2024 | H1 2023 |
| Loss on doubtful accounts receivable | 746,267.19 | -2,281,819.86 |
| Loss on doubtful other receivables | -108,095.70 | 5,293.40 |
| Loss on doubtful long-term receivables | 24,391.20 | 5,412.00 |
| Total | 662,562.69 | -2,271,114.46 |
57. Asset impairment loss
Unit: RMB yuan
| Item | H1 2024 | H1 2023 |
| Inventory valuation loss and loss on impairments of contract performance costs | -2,084,889.45 | -5,276,028.10 |
| Loss on impairments of contract assets | -3,658,393.34 | -336,909.99 |
| Total | -5,743,282.79 | -5,612,938.09 |
58. Gains on disposal of assets
Unit: RMB yuan
| Source of gains on disposal of assets | H1 2024 | H1 2023 |
| Loss on disposal of fixed assets | 5,017,509.44 | -2,277,157.05 |
| Profit or loss from disposal of right-of-use assets | 76,970.02 | |
| Total | 5,094,479.46 | -2,277,157.05 |
59. Non-operating income
Unit: RMB yuan
| Item | H1 2024 | H1 2023 | Amount recognized in exceptional gains and losses |
| Others | 939,908.99 | 2,034,810.24 | 939,908.99 |
| Total | 939,908.99 | 2,034,810.24 | 939,908.99 |
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60. Non-operating expenses
Unit: RMB yuan
| Item | H1 2024 | H1 2023 | Amount recognized in exceptional gains and losses |
| Donations | 163,461.77 | 213,596.37 | 163,461.77 |
| Loss on disposal of non-current assets | 2,205.15 | 10,937.57 | 2,205.15 |
| Others | 224,305.37 | 907,384.54 | 224,305.37 |
| Total | 389,972.29 | 1,131,918.48 | 389,972.29 |
61. Income tax expenses
(1) Income tax expenses
Unit: RMB yuan
| Item | H1 2024 | H1 2023 |
| Current income tax expenses | 83,725,950.64 | 52,891,480.67 |
| Deferred income tax expenses | 7,231,539.09 | 3,338,138.93 |
| Total | 90,957,489.73 | 56,229,619.60 |
(2) Reconciliation between accounting profit and income tax expenses
Unit: RMB yuan
| Item | H1 2024 |
| Gross profit | 278,333,699.44 |
| Income tax calculated at statutory/applicable tax rates | 41,750,054.92 |
| Different tax rates for specific provinces or enacted by local authority | 26,632,080.38 |
| Adjustment to income tax in previous periods | -770,537.27 |
| Income not subject to tax | 631,983.22 |
| Costs, expenses, and losses not deductible for tax | 223,292.65 |
| Utilization of deductible losses on previously unrecognized deferred tax assets | -3,280.29 |
| Effect of deductible temporary differences or deductible losses on current unrecognized deferred tax assets | 25,951,876.83 |
| Over-deduction of the taxable profit amount for R&D | -3,457,980.71 |
| Income tax expenses | 90,957,489.73 |
62. Other comprehensive income
See Item 43 under Note VII.
63. Line items of the cash flow statement
(1) Cash related to operating activities
Unit: RMB yuan
| H1 2024 | H1 2023 | |
| Current accounts and others | 13,443,346.57 | 8,272,973.12 |
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| Interest income | 22,755,414.30 | 7,683,458.57 |
| Government grants | 9,765,027.51 | 6,781,497.39 |
| Guarantee deposit received | 1,332,228.88 | 6,419,859.92 |
| Deposits | 1,454,652.77 | 1,180,000.00 |
| Total | 48,750,670.03 | 30,337,789.00 |
Unit: RMB yuan
| H1 2024 | H1 2023 | |
| Selling expenses in cash | 87,390,198.62 | 68,986,775.28 |
| Administrative expenses in cash | 61,327,958.13 | 52,432,257.53 |
| R&D expenses in cash | 4,262,737.50 | 10,366,406.31 |
| Letter of guarantee paid | 5,855,098.69 | 6,168,384.35 |
| Current accounts and others | 12,744,856.93 | 10,329,778.09 |
| Security deposits | 306,406.58 | 1,082,472.00 |
| Total | 171,887,256.45 | 149,366,073.56 |
(2) Cash related to investing activities
Unit: RMB yuan
| H1 2024 | H1 2023 | |
| Disposal/redemption of financial assets held for trading | 820,003,799.66 | 1,778,154,089.71 |
| Recovery of equity investments | 10,000,000.00 | |
| Total | 830,003,799.66 | 1,778,154,089.71 |
Unit: RMB yuan
| H1 2024 | H1 2023 | |
| Purchase of financial assets held for trading | 838,349,461.46 | 1,654,863,903.07 |
| Purchase of equity investments | 77,777,778.00 | 50,000,000.00 |
| Total | 916,127,239.46 | 1,704,863,903.07 |
(3) Cash related to financing activities
Unit: RMB yuan
| H1 2024 | H1 2023 | |
| Security deposits recovered for internal guarantees for external loans | 107,345,506.70 | |
| Security deposits for bank acceptance notes | 48,083,599.11 | 39,381,507.99 |
| Total | 155,429,105.81 | 39,381,507.99 |
Cash used in other financing activities
Unit: RMB yuan
| Item | H1 2024 | H1 2023 |
| Security deposits paid for internal guarantees for external loans | 107,345,506.70 | |
| Share repurchase | 67,200.00 | 69,926,318.31 |
| Security deposits for bank acceptance notes | 44,775,224.72 | 22,446,295.25 |
| Rental and interest paid | 11,150,763.38 | 10,779,914.10 |
| Deposits for loans paid | 17,700,000.00 | |
| Acquisition of non-controlling interests | 10,793,663.53 | |
| Total | 55,993,188.10 | 238,991,697.89 |
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Unit: RMB yuan
| Opening balance | increase in the current period | decrease in the current period | Closing balance | |||
| Changes in cash | Non-cash changes | Changes in cash | Non-cash changes | |||
| Short-term borrowing | 370,549,972.80 | 64,989,376.25 | 314,906,530.68 | 27,476,264.59 | 93,156,553.78 | |
| Long-term borrowings (Including current portion of long-term borrowings） | 114,979,331.16 | 83,104,338.59 | 7,509,036.84 | 26,773,285.75 | 178,819,420.84 | |
| Lease liabilities (Including current portion of non-current liabilities) | 86,991,207.75 | 4,302,661.60 | 11,150,763.38 | 80,143,105.97 | ||
| Total | 572,520,511.71 | 148,093,714.84 | 11,811,698.44 | 352,830,579.81 | 27,476,264.59 | 352,119,080.59 |
64. Supplemental information on statement of cash flows
(1) Supplemental information on statement of cash flows
Unit: RMB yuan
| Supplementary information | H1 2024 | H1 2023 |
| 1. Reconciliation of net profit to net cash generated from/used in investing activities: | ||
| Net profit | 187,376,209.71 | 229,203,797.40 |
| Add: Asset impairment allowances | 5,743,282.79 | 5,612,938.09 |
| Credit impairment loss | -662,562.69 | 2,271,114.46 |
| Depreciation of fixed assets, depletion of oil and gas assets, and depreciation of productive living assets | 24,399,898.32 | 24,599,520.97 |
| Depreciation of right-of-use assets | 9,865,972.32 | 10,458,604.46 |
| Amortization of intangible assets | 11,558,754.93 | 12,097,591.52 |
| Amortization of long-term prepaid expenses | 6,434,210.87 | 7,480,462.67 |
| Loss on the disposal of fixed assets, intangible assets, and other long-lived assets (“-” for gain) | -5,094,479.46 | 2,277,157.05 |
| Loss on the retirement of fixed assets (“-” for gain) | 2,205.15 | 10,937.57 |
| Loss on changes in fair value (“-” for gain) | 85,374,294.70 | -2,006,095.39 |
| Finance costs (“-” for income) | 15,619,969.13 | 7,219,522.20 |
| Loss on investment (“-” for income) | 8,194,916.20 | -36,109,196.08 |
| Decrease in deferred tax assets (“-” for increase) | 3,369,718.95 | 8,697,392.25 |
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| Increase in deferred tax liabilities (“-” for decrease) | -2,638,399.89 | -4,816,451.79 |
| Decrease in inventories (“-” for increase) | -139,102,847.17 | -253,435,681.37 |
| Decrease in operating receivables (“-” for increase) | 57,187,082.83 | 89,453,122.15 |
| Increase in operating payables (“-” for decrease) | -144,819,176.01 | 66,876,459.48 |
| Others | -4,238,587.03 | 21,544,870.88 |
| Net cash generated from/used in operating activities | 118,570,463.65 | 191,436,066.52 |
| 2. Significant investing and financing activities that involve no cash proceeds or payments: | ||
| Conversion of debt to capital | ||
| Current portion of convertible corporate bonds | ||
| Fixed assets leased in in finance leases | ||
| 3. Net changes in cash and cash equivalents: | ||
| Closing balance of cash | 1,510,191,035.14 | 1,363,621,222.67 |
| Less: Opening balance of cash | 1,672,514,611.84 | 1,233,720,697.27 |
| Add: Closing balance of cash equivalents | ||
| Less: Opening balance of cash equivalents | ||
| Net increase in cash and cash equivalents | -162,323,576.70 | 129,900,525.40 |
(2) Breakdown of cash and cash equivalents
Unit: RMB yuan
| Item | Closing balance | Opening balance |
| I. Cash | 1,510,191,035.14 | 1,672,514,611.84 |
| Including: cash on hand | 2,431,022.70 | 438,600.93 |
| Bank deposits readily available | 1,410,181,236.34 | 1,491,798,403.81 |
| Other cash and bank balances readily available | 97,578,776.10 | 180,277,607.10 |
| III. Closing balance of cash and cash equivalents | 1,510,191,035.14 | 1,672,514,611.84 |
65. Monetary items in foreign currencies
(1) Monetary items in foreign currencies
Unit: RMB yuan
| Item | Closing balance in foreign currency | Exchange rate | Closing balance in RMB |
| Cash and bank balances |
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| Including: USD | 72,345,689.08 | 7.1268 | 515,593,256.94 |
| EUR | 56,524,289.83 | 7.6617 | 433,072,151.39 |
| HKD | 21,538.46 | 0.9127 | 19,658.15 |
| GBP | 345,920.55 | 9.0430 | 3,128,159.53 |
| Accounts receivable | |||
| Including: USD | 251,595.08 | 7.1268 | 1,793,067.82 |
| EUR | 89,176,173.47 | 7.6617 | 683,241,088.28 |
| HKD | |||
| Long-term borrowings | |||
| Including: USD | |||
| EUR | 6,147,837.03 | 7.6617 | 47,102,882.97 |
| HKD | |||
| Accounts payable | |||
| Including: EUR | 59,424,830.45 | 7.6617 | 455,295,223.46 |
| Other receivables | |||
| Including: EUR | 3,279,649.58 | 7.6617 | 25,127,691.19 |
| Short-term borrowings | |||
| Including: EUR | 8,592,286.34 | 7.6617 | 65,831,520.25 |
| Current portion of non-current liabilities | |||
| Including: EUR | 6,034,661.27 | 7.6617 | 46,235,764.25 |
| Other payables | |||
| Including: USD | 463,449.61 | 7.1268 | 3,302,912.68 |
| EUR | 2,017,688.60 | 7.6617 | 15,458,924.75 |
| Lease liabilities | |||
| Including: EUR | 6,342,871.65 | 7.6617 | 48,597,179.72 |
| Contract Assets | |||
| Including: USD | 285,500.00 | 7.1268 | 2,034,701.40 |
| EUR | 94,102.37 | 7.6617 | 720,984.13 |
(2) Overseas business entities (for substantial overseas business entities, the following informationshall be disclosed: principal place of business, functional currency, and basis for the choice, change offunctional currency and reasons)? Applicable □ Not applicable
| Substantial overseas business entity | Principal place of business | Functional currency | Basis for the choice |
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| Fosber Group | Italy | EUR | Settlement currency for local business operations |
| Fosber America | America | USD | Settlement currency for local business operations |
| EDF | Italy | EUR | Settlement currency for local business operations |
| Tiru?a Group | Spain | EUR | Settlement currency for local business operations |
Ⅹ R&D expenditure
Unit: RMB yuan
| Classified by nature | H1 2024 | H1 2023 |
| Employee benefit | 34,842,850.55 | 34,207,002.02 |
| Depreciation and amortization expenses | 8,149,649.45 | 8,169,488.94 |
| Material expenses | 2,892,339.95 | 4,204,251.70 |
| Technology development costs | 120,746.76 | 5,470,265.49 |
| Equity incentive expense | 217,044.08 | 2,019,107.48 |
| Other expenses | 4,143,436.79 | 5,858,904.42 |
| Total | 50,366,067.58 | 59,929,020.05 |
| Of which：Expensed R&D expenditure | 50,366,067.58 | 59,929,020.05 |
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Ⅸ Interests in Other Entities
1. Interests in subsidiaries
Particulars of the subsidiaries of the Company are as follows:
| of business | registration | nature | capita | interest(%) | |||||||||
| Direct | Indirect | ||||||||||||
| Subsidiaries acquired by way of incorporation or investment | |||||||||||||
| Dongfang Precision (HK) | HK | HK | Trading | USD300,000 | 100.00 | - | |||||||
| Dongfang Precision (Netherland) | Netherland | Netherland | Trading | EUR40,000 | 90.00 | 10.00 | |||||||
| Fosber Asia | Foshan, Guangdong, China | Foshan, Guangdong, China | Manufacturing | RMB29,581,891 | 100.00 | - | |||||||
| Italy QCorr | Italy | Italy | Manufacturing | EUR375,000 | - | 60.00 | |||||||
| Suzhou High-Tech Zone Jinquan Business Management Partnership (Limited Partnership)*(“High-Tech Zone Jinquan”) | Suzhou, Jiangsu, China | Suzhou, Jiangsu, China | Investment | RMB10,553,000 | - | 1.23 | |||||||
| Suzhou Parsun Power Technology Co., Ltd. (“Parsun Power Technology”) | Suzhou, Jiangsu, China | Suzhou, Jiangsu, China | Trading | RMB10million | - | 69.61 | |||||||
| Suzhou Baisheng International Trade Co., Ltd. (“Baisheng International”) | Suzhou, Jiangsu, China | Suzhou, Jiangsu, China | Trading | RMB3 million | - | 69.61 | |||||||
| Dongfang Digicom Data Technology Co., Ltd. (“Dongfang Digicom”) | Haikou, Hainan, China | Haikou, Hainan, China | Industrial Internet | RMB100 million | 100.00 | - | |||||||
| Dongfang Digicom Data Technology (Guangdong) Co., Ltd. (“Dongfang Digicom (Guangdong)”) | Foshan, Guangdong, China | Foshan, Guangdong, China | Industrial Internet | RMB8 million | 100.00 | - | |||||||
| Hainan Yineng Investment Co., Ltd. (“Yineng Investment”) | Haikou, Hainan, China | Haikou, Hainan, China | Investment | RMB100 million | 100.00 | - | |||||||
| Dongfang Yineng International Holdings Co., Ltd. (“Yineng International”) | Foshan, Guangdong, China | Foshan, Guangdong, China | Investment | RMB50 million | 100.00 | - | |||||||
| Tianjin Hangchuang Zhijin Investment Partnership (Limited Partnership) (“Tianjin Hangchuang”) | Tianjin, China | Tianjin, China | Investment | RMB21 million | 95.24 | - | |||||||
| Changzhou Xinchen Investment Partnership (Limited Partnership) | Changzhou, | Changzhou, | Investment | RMB50.6 million | - | 94.86 | |||||||
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| (“Changzhou Xinchen”) | Jiangsu, China | Jiangsu, China | |||||||||||||
| Fosber Group | Italy | Italy | Manufacturing | EUR1.56 million | - | 100.00 | |||||||||
| Fosber America | America | America | Manufacturing | USD1.10 million | - | 100.00 | |||||||||
| Forsberg (Machinery) Tianjin Co., Ltd. (“Fosber Tianjin”) | Tianjin, China | Tianjin, China | Manufacturing | USD500,000 | - | 100.00 | |||||||||
| Parsun Power | Suzhou, Jiangsu, China | Suzhou, Jiangsu, China | Manufacturing | RMB85.3 million | 7.83 | 61.78 | |||||||||
| Suzhou Shunyi Investment Co., Ltd. .(“Shunyi Investment”) | Suzhou, Jiangsu, China | Suzhou, Jiangsu, China | Investment | RMB10 million | 100.00 | - | |||||||||
| EDF | Italy | Italy | Manufacturing | EUR100,000 | - | 100.00 | |||||||||
| Tiru?a S.L.U. | Spain | Spain | Manufacturing | EUR1.44 million | - | 100.00 | |||||||||
| Tiru?a FranceSARL | France | France | Manufacturing | EUR100,000 | - | 100.00 | |||||||||
| SCI Candan | France | France | Manufacturing | EUR10,000 | - | 100.00 | |||||||||
| Tiru?a America | America | America | Manufacturing | USD3 million | - | 100.00 | |||||||||
| Guangdong Tiru?a Rolls Manufactury company limited (“Tiru?a Rolls Manufactury”) | Foshan, Guangdong, China | Foshan, Guangdong, China | Manufacturing | EUR21 million | - | 66.30 | |||||||||
| Tiru?a Asia | Foshan, Guangdong, China | Foshan, Guangdong, China | Manufacturing | RMB50 million | 100.00 | - | |||||||||
| Wonder Printing | Shenzhen, Guangdong, China | Shenzhen, Guangdong, China | Manufacturing | RMB31,171,949 | 51.00 | - | |||||||||
| Dongguan Wonder Digital Machinery Co., Ltd. (“Wonder Digital”) | Dongguan, Guangdong, China | Dongguan, Guangdong, China | Manufacturing | RMB5million | - | 51.00 | |||||||||
*According to the partnership agreement, the general partner of the partnership shall execute partnership affairs, and other partners shall not execute partnership affairs. As the solegeneral partner, the Company forms control over the partnership, which is included in the scope of consolidation of the Group.
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Ⅸ Interests in Other Entities
2. Interests in associates
| Principal place of business | Place of registration | Business nature | Registered capital | The Company’s interest (%) | Accounting method | |||||||||
| Direct | Indirect | |||||||||||||
| Associates | ||||||||||||||
| Guangdong Jaten Robot & Automation Co., Ltd. | Foshan, Guangdong, China | Foshan, Guangdong, China | Manufacturing | RMB31.759 million | 19.84 | - | Equity method | |||||||
| Talleres Tapre,S.L. | Spain | Spain | Manufacturing | EUR37,563 | - | 20.00 | Equity method | |||||||
| Nanjing Profeta | Nanjing, Jiangsu, China | Nanjing, Jiangsu, China | Manufacturing | RMB4.5427 million | 15.00 | 5.67 | Equity method | Equity method | ||||||
Financial information of insignificant joint ventures and associates combined
Unit: RMB yuan
| Closing balance/H1 2024 | Opening balance/H1 2023 | |
| Joint ventures: | ||
| Totals based on the Company’s interests | ||
| Associates: | ||
| Total carrying amount of investments | 114,307,542.37 | 117,265,884.84 |
| Totals based on the Company’s interests | ||
| --Net profit | -2,914,122.66 | -2,332,949.80 |
| --Total comprehensive income | -2,914,122.66 | -2,332,949.80 |
Other information:
As there is no obligation to bear additional losses, the net losses incurred by the investee are recognized to theextent that the book value of the long-term equity investment and other long-term interests that substantiallyconstitute the net investment in the investee are reduced to zero.
Ⅹ. Government grants
The government grants recognised in profit or loss are as follows:
Unit: RMB yuan
| 2024 | 2023 | |
| Government grants related to assets Recognised as other income | 558,330.00 | 558,330.00 |
| Government grants related to income Recognised as other income | 9,890,423.74 | 3,598,750.12 |
| Total | 10,448,753.74 | 4,157,080.12 |
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Ⅺ Risks Associated with Financial Instruments
1.Risks of financial instruments
The main risks arising from the Group's financial instruments are credit risk, liquidity risk and market risk.The Group’s policies are summarised below.
Credit risk
The Group transacts only with recognized and reputable third parties. According to the Group's policies, creditchecks are needed for all customers that require transactions should be conducted by means of credit.Additionally, the Group performs continuous monitoring of the balance of accounts receivable to ensure thatthe Group will not face major bad debt risk. For transactions not settled in the accounting standard currency ofthe relevant business unit, unless specifically approved by the credit control department of the Group, theGroup will not provide credit transaction conditions.
Since the counterparties of cash and bank balances and notes receivable are banks with a good reputation andhigh credit rating, the credit risk of such financial instruments is low.
Other financial assets of the Group mainly include accounts receivable, other receivables and contract assets,the credit risk of which arises from counterparty default, and the maximum risk exposure is equal to thecarrying value of these instruments.
The Group transacts only with recognized and reputable third parties, so no collateral is required. Credit riskconcentration is managed by customer/counterparty, geographic region and industry. Because the customerbase of accounts receivable of the Group is widely dispersed in different departments and industries, there isno major credit risk concentration within the Group. The Group does not hold any collateral or other creditenhancement on the balance of accounts receivable.
Criteria for judging significant increases in credit riskThe Group assesses whether or not the credit risk of the relevant financial instruments has increasedsignificantly since the initial recognition at each balance sheet date. The Group's main criteria for determiningsignificant increase in credit risk are that the number of days past due exceed 30 days, or one or more of thefollowing indicators have changed significantly: significant adverse changes in the operating environment ofthe debtor, internal and external credit ratings, and actual or expected operating results.
Definition of credit-impaired financial assetsThe Group's main criterion for determining that credit impairment has occurred is that the number of days pastdue exceeds 90 days. However, in some cases, if internal or external information indicates that the contractamount may not be recovered in full before considering any credit enhancements held, the Group will alsoconsider that credit impairment has occurred.
The credit impairment on a financial asset may be caused by the combined effect of multiple events and maynot be necessarily due to a single event.Liquidity risk
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The Group aims to maintain sufficient cash and credit lines to meet its liquidity requirements. The Groupfinances its working capital requirements through a combination of funds generated from operations and otherborrowings.Market Risk
Interest rate risk
The Group’s exposure to risk of changes in market interest rates relates primarily to the Group’s long-termliabilities with floating interest rates.
Exchange rate risk
The Group is exposed to trading exchange rate risks. Such exposures arise from sales or purchases by businessunits in currencies other than the units’ functional currencies.
The primary objective of the Group’s capital management is to safeguard the Group’s ability to continue as agoing concern and to maintain healthy capital ratios in order to support its business and maximize shareholders’value.
The Group manages its capital structure and makes adjustments in the light of changes in economic conditionsand in the risk profiles of relevant assets. To maintain or adjust the capital structure, the Group may adjust thedividend payment to shareholders, return capital to shareholders or issue new shares. The Group is not subjectto any externally imposed capital requirements. No changes were made in the objectives, policies or processesfor managing capital during 2023 and 2022.Ⅻ Disclosure of Fair Values
1. The closing fair value of assets and liabilities measured at fair value
Unit: RMB yuan
| Item | Closing fair value | |||
| Level 1 fair value measurement | Level 2 fair value measurement | Level 3 fair value measurement | Total | |
| I. Continuous measurement of fair value | -- | -- | -- | -- |
| (I) Financial assets held for trading | 607,015,754.09 | 607,015,754.09 | ||
| Receivables financing | 22,923,994.65 | 22,923,994.65 | ||
| Other non-current financial assets | 31,420,551.63 | 496,655,940.43 | 528,076,492.06 | |
| Other non-current assets | 10,413,178.08 | 10,413,178.08 | ||
| Total assets continuously measured at fair value | 638,436,305.72 | 33,337,172.73 | 496,655,940.43 | 1,168,429,418.88 |
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| (VI) Financial liabilities held for trading | 116,220,211.63 | 116,220,211.63 | ||
| Other non-current liabilities | 22,635,906.84 | 22,635,906.84 | ||
| Total liabilities continuously measured at fair value | 138,856,118.47 | 138,856,118.47 | ||
| II. Non-continuous measurement of fair value | -- | -- | -- | -- |
XIII Related Parties and Related-party Transactions
1. Parent
| Name | Relationship with the Company | Interest in the Company (%) |
| Tang Zhuolin (individual) | The Company’s controlling shareholder and one of the actual controllers | 22.21% |
| Tang Zhuomian (individual) | The Company’s controlling shareholder and one of the actual controllers | 7.95% |
The ultimate controllers of the Company are Tang Zhuolin and Tang Zhuomian.
2. Subsidiaries of the Company
See Item 1 under Ⅸ Interests in Other Entities
3. Joint ventures and associates of the Company
For substantial joint ventures and associates of the Company, see Item 2 under Ⅸ Interests in Other Entities
4. Other related parties
| Other related parties | Relationship with the Company |
| Tang Zhuolin | chairman of the board |
| Qiu Yezhi | Director and General Manager |
| Xie Weiwei | Director and Deputy General Manager |
| Chen Huiyi | Chairman of the Supervisory Committee |
| Zhao Xiuhe | Employee Supervisor |
| He Baohua | Supervisor |
| Li Ketian | Independent Director |
| Liu Da | Independent Director |
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| Tu Haichuan | Independent Director |
| Feng Jia | Director and Board Secretary |
| Shao Yongfeng | Chief Financial Officer and Vice President |
5. Related-party transactions
(1) Remuneration of key management
Unit: RMB yuan
| Item | H1 2024 | H1 2023 |
| Remuneration of key management | 8,429,047.79 | 8,086,182.30 |
XIV Share-based Payments
Unit: RMB yuan
| Granted in the period | Exercised in the period | Unlocked in the period | Expired in the period | |||||
| Number | Amount | Number | Amount | Number | Amount | Number | Amount | |
| Marketing | ||||||||
| management | 800,000.00 | 800,000.00 | ||||||
| R&D | ||||||||
| Production&Operation | 80,000.00 | 80,000.00 | ||||||
| Total | 880,000.00 | 880,000.00 | ||||||
2、Equity-settled share-based payments are as follows：
Unit: RMB yuan
| Determination method of fair value of equity instruments at grant date | Based on the share price on the grant date minus the grant price, it is RMB3.74 (RMB4.74 minus RMB1) | |
| mportant parameters of fair value of equity instruments at grant date | Share price at grant date and Grant Price | |
| Basis for determining the number of vested equity instruments | Make the best estimate of the number of vested employees based on the latest information such as turnover rate and substandard rate | |
| Reasons for significant difference between current year's estimate and prior year's estimate | None | |
| Accumulated amount of equity-settled share-based payment included in capital reserve | 93,258,787.55 | |
| Total expense recognized for equity-settled share-based payments during the period | 1,065,753.95 |
On 27 March 2020, the Company convened the Board of Directors, where the Proposal on Granting RestrictedShares to Awardees was approved, and the Board of Directors agreed to grant restricted shares to 42 qualifiedsenior managers and core technicians, and agreed to have the right to purchase shares at RMB1 within theexercise validity period when the corresponding performance assessment objectives are met within the liftingperiod. The maximum period shall not exceed 60 months from the date of completion of registration of thefirst grant of some restricted shares to the date when all restricted shares granted to the incentive objects arelifted or repurchased and cancelled.
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On 29 December 2020, the Company convened the Board of Directors, where the Proposal on GrantingReserved Restricted Shares to Awardees was approved, and the Board of Directors agreed to grant restrictedshares to 18 qualified senior managers and core technicians, and agreed to have the right to purchase shares atRMB1 within the exercise validity period when the corresponding performance assessment objectives are metwithin the lifting period. The maximum period shall not exceed 60 months from the date of completion ofregistration of the first grant of some restricted shares to the date when all restricted shares granted to theincentive objects are lifted or repurchased and cancelled.
On 21 March 2022, the Company convened the Board of Directors, where the Proposal on Granting RestrictedShares to Awardees was approved, and the Board of Directors agreed to grant restricted shares to 7 qualifiedsenior managers and core technicians, and agreed to have the right to purchase shares at RMB1 within theexercise validity period when the corresponding performance assessment objectives are met within the liftingperiod. The maximum period shall not exceed 60 months from the date of completion of registration of thefirst grant of some restricted shares to the date when all restricted shares granted to the incentive objects arelifted or repurchased and cancelled.Share-based payment expenses incurred during the year are as follows:
Unit: RMB yuan
| Equity-settled share-based payment expenses | Cash-settled share-based payment expenses | ||
| Marketing | 63,351.06 | ||
| management | 714,743.91 | ||
| R&D | 217,044.08 | ||
| Production&Operation | 70,614.90 | ||
| Total | 1,065,753.95 |
XV Commitments and Contingencies
1. Substantial commitments
Outstanding substantial commitments at the balance sheet date:
At the balance sheet date, the Company had no commitments that were required to be disclosed.
2. Contingencies
(1) Explain if the Company has no substantial contingencies that need to be disclosedThe Company had no substantial contingencies that needed to be disclosed.XVI Events after the Balance Sheet Date
1. Other information on events after the balance sheet date
At the balance sheet date, the Company had no events after the balance sheet date that are required to be disclosed.
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XVII Other Significant Matters
1. Segment reporting
(1) Basis for the determination of reporting segments and accounting policies
For management purposes, the Group is divided into business units based on products and services.。
(2) Financial information of reporting segments
Unit: RMB yuan
| Item | Domestic entities | Overseas entities | Offset | Total |
| Operating revenue | 815,441,773.38 | 1,407,235,902.24 | -61,488,768.22 | 2,161,188,907.40 |
| Cost of sales | 554,283,062.84 | 971,818,928.15 | -58,051,220.39 | 1,468,050,770.60 |
| Total assets | 5,660,526,554.00 | 2,955,395,531.38 | -1,276,986,242.80 | 7,338,935,842.58 |
| Total liabilities | 1,286,004,594.83 | 1,767,172,340.07 | -608,037,757.92 | 2,445,139,176.98 |
XVIII Notes to Major Items in the Company Financial Statements
1. Accounts receivable
(1) Disclosure by the aging of accounts receivable
Unit: RMB yuan
| age of accounts | H1 2024 | H1 2023 |
| Within 1 year | 212,841,200.44 | 190,721,565.80 |
| 1-2 years | 206,516.30 | 454,811.38 |
| 2-3 years | 35,600.00 | 357,849.03 |
| 3-4 years | 2,985,024.87 | 2,934,285.66 |
| 4-5 years | 515,118.58 | 456,982.47 |
| Over 5 years | 2,469,906.29 | 2,477,303.19 |
| Total | 216,068,341.61 | 194,468,511.87 |
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(2) Disclosure classified by the bad debt provision methods
Unit: RMB yuan
| Type | Closing balance | Opening balance | ||||||||
| Gross amount | Allowance | Carrying amount | Gross amount | Allowance | Carrying amount | |||||
| Amount | Percentage | Amount | Allowance percentage | Amount | Percentage | Amount | Allowance percentage | |||
| Accounts receivable for which the allowances are established individually | 2,469,906.29 | 1.14% | 2,469,906.29 | 100.00% | 2,477,303.19 | 1.27% | 2,477,303.19 | 100.00% | 2,469,906.29 | |
| Of which: | ||||||||||
| Accounts receivable for which the allowances are established individually | 2,469,906.29 | 1.14% | 2,469,906.29 | 100.00% | 2,477,303.19 | 1.27% | 2,477,303.19 | 100.00% | ||
| Accounts receivable for which the allowances are established by group | 213,598,435.32 | 98.86% | 1,242,011.96 | 0.58% | 212,356,423.36 | 191,991,208.68 | 98.73% | 1,629,562.40 | 0.85% | 190,361,646.28 |
| Of which: | ||||||||||
| Accounts receivable for which the allowances are established | 213,598,435.32 | 98.86% | 1,242,011.96 | 0.58% | 212,356,423.36 | 191,991,208.68 | 98.73% | 1,629,562.40 | 0.85% | 190,361,646.28 |
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| by group with similar credit risk characteristics | ||||||||||
| Total | 216,068,341.61 | 100.00% | 3,711,918.25 | 1.72% | 212,356,423.36 | 194,468,511.87 | 100.00% | 4,106,865.59 | 2.11% | 190,361,646.28 |
Accounts receivable for which the allowances are established individually:
Unit: RMB yuan
| H1 2024 | H1 2023 | |||||
| Gross amount | Allowance | Gross amount | Allowance | ECL (%) | Reason for allowance | |
| Customer 1 | 939,000.00 | 939,000.00 | 936,506.29 | 936,506.29 | 100.00% | Customer’s inability to settle the amount due |
| Customer 2 | 641,600.00 | 641,600.00 | 641,600.00 | 641,600.00 | 100.00% | Customer’s inability to settle the amount due |
| Customer 3 | 608,800.00 | 608,800.00 | 608,800.00 | 608,800.00 | 100.00% | Customer’s inability to settle the amount due |
| Customer 4 | 283,000.00 | 283,000.00 | 283,000.00 | 283,000.00 | 100.00% | Customer’s inability to settle the amount due |
| Customer 5 | 4,903.19 | 4,903.19 | Customer’s inability to settle the amount due | |||
| Total | 2,477,303.19 | 2,477,303.19 | 2,469,906.29 | 2,469,906.29 | ||
Accounts receivable for which the allowances are established by group with similar credit risk characteristics are as follows:
Unit: RMB yuan
| Item | Closing balance | ||
| Gross amount | Allowance | Allowance percentage | |
| Within 1 year (inclusive) | 212,841,200.44 | 696,545.87 | 0.33% |
| 1-2 years (including 2 years) | 206,516.30 | 11,771.43 | 5.70% |
| 2-3 years (including 3 years) | 35,600.00 | 18,576.08 | 52.18% |
| 3-4 years (including 4 years) | 515,118.58 | 515,118.58 | 100.00% |
| Total | 213,598,435.32 | 1,242,011.96 | |
Basis for grouping：
Where allowances for doubtful accounts receivable are established using the general model of expected credit loss.
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2024
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□ Applicable ? Not applicable
(3) Allowances established or reversed in the current period
Allowances in the current period:
Unit: RMB yuan
| Type | Opening balance | Change in the current period | Closing balance | |||
| Established | Reversed | Written off | Others | |||
| Allowances for doubtful accounts receivable | 4,106,865.59 | 394,947.34 | 3,711,918.25 | |||
| Total | 4,106,865.59 | 394,947.34 | 3,711,918.25 | |||
As at 30 June 2024, the top five accounts receivable and contract assets were as follows:
Unit: RMB yuan
| Closing balance of accounts receivable | Closing balance of contract assets | Total closing balance of accounts receivable and contract assets | As a % of the closing balance of total accounts receivable and contract assets | Total closing balance of accounts receivable and contract assets | |
| Dongfang Precision (Netherland) | 105,190,454.15 | 105,190,454.15 | 43.86% | ||
| Dongfang Precision (HK) | 58,449,392.78 | 58,449,392.78 | 27.05% | ||
| Customer 6 | 8,170,876.20 | 8,170,876.20 | 3.78% | ||
| Customer 7 | 5,409,018.00 | 1,220,176.56 | 6,629,194.56 | 3.07% | 63,640.27 |
| Customer 8 | 4,166,230.30 | 117,960.00 | 4,284,190.30 | 1.98% | 41,128.23 |
| Total | 181,385,971.43 | 1,338,136.56 | 182,724,107.99 | 79.74% | 104,768.50 |
2. Other receivables
Unit: RMB yuan
| Item | Closing balance | Opening balance |
| Dividends receivable | 187,729,679.60 | 272,564,800.00 |
| Other receivables | 299,464,830.21 | 382,260,293.49 |
| Total | 487,194,509.81 | 654,825,093.49 |
(1) Dividends receivable
1) Dividends receivable by type
Unit: RMB yuan
| Item (or investee) | Closing balance | Opening balance |
| Dividends receivable | 187,729,679.60 | 272,564,800.00 |
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| Total | 187,729,679.60 | 272,564,800.00 |
(2) Other receivables
1) Disclosure by nature
Unit: RMB yuan
| Nature | Closing gross amount | Opening gross amount |
| Internal transactions with related parties | 294,333,290.81 | 378,012,519.05 |
| Prepaid service charges | 1,353,965.65 | 1,211,065.51 |
| Security deposits | 1,165,323.68 | 976,244.53 |
| Performance compensation | 500,000.00 | 500,000.00 |
| Employee loans and petty cash | 1,536,842.60 | 1,451,110.72 |
| Others | 1,730,432.01 | 1,264,378.22 |
| Total | 300,619,854.75 | 383,415,318.03 |
2) Disclosure by the aging
Unit: RMB yuan
| age of accounts | 2024 | 2023 |
| Within 1 year | 233,569,750.82 | 288,812,991.16 |
| 1-2 years | 48,492,234.36 | 68,762,598.71 |
| 2-3 years | 14,743,534.48 | 24,699,392.06 |
| Over 3 years | 3,814,335.09 | 1,140,336.10 |
| 3-4 years | 2,698,000.00 | 117,761.18 |
| 4-5 years | 97,292.73 | 4,400.00 |
| Over 5 years | 1,019,042.36 | 1,018,174.92 |
| Total | 300,619,854.75 | 383,415,318.03 |
3) Disclosure classified by the allowances provision methods
Unit: RMB yuan
| Type | Closing balance | Opening balance | ||||||||
| Gross amount | Allowance | Carrying amount | Gross amount | Allowance | Carrying amount | |||||
| Amount | Percentage | Amount | Allowance percentage | Amount | Percentage | Amount | Allowance percentage | |||
| Allowances are established individually | 500,000.00 | 0.17% | 500,000.00 | 100.00% | 500,000.00 | 0.13% | 500,000.00 | 100.00% | ||
| Of which: | ||||||||||
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| allowances are established individually | 500,000.00 | 0.17% | 500,000.00 | 100.00% | 500,000.00 | 0.13% | 500,000.00 | 100.00% | ||
| allowances are established by group | 300,119,854.75 | 99.83% | 655,024.54 | 0.22% | 299,464,830.21 | 382,915,318.03 | 99.87% | 655,024.54 | 0.17% | 382,260,293.49 |
| Of which: | ||||||||||
| allowances are established by group with similar credit risk characteristics | 300,119,854.75 | 99.83% | 655,024.54 | 0.22% | 299,464,830.21 | 382,915,318.03 | 99.87% | 655,024.54 | 0.17% | 382,260,293.49 |
| Total | 300,619,854.75 | 100.00% | 1,155,024.54 | 0.38% | 299,464,830.21 | 383,415,318.03 | 100.00% | 1,155,024.54 | 0.30% | 382,260,293.49 |
Allowances are established by group with similar credit risk characteristics
Unit: RMB yuan
| 2024 | |||
| Gross amount | Allowance | Carrying amount | |
| allowances are established by group with similar credit risk characteristics | 300,119,854.75 | 655,024.54 | 0.22% |
| Total | 300,119,854.75 | 655,024.54 | |
Provision for allowance is made according to the general model of expected credit loss:
Unit: RMB yuan
| Stage 1 | Stage 2 | Stage 3 | Total | |
| 12-month ECL | Lifetime ECL | Financial assets with credit impairment (lifetme ECL) | ||
| Opening and closing balance | 655,024.54 | 500,000.00 | 1,155,024.54 | |
| Other movements | 655,024.54 | 500,000.00 | 1,155,024.54 |
4) Allowances established or reversed in the current period
Allowances for doubtful other receivables in the current period:
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Unit: RMB yuan
| Type | Opening balance | Change in the current period | Closing balance | |||
| Established | Reversed | Written off | Others | |||
| Allowances for doubtful other receivables | 1,155,024.54 | 1,155,024.54 | ||||
| Total | 1,155,024.54 | 1,155,024.54 | ||||
5) As at 30 June 2024, top 5 of other receivables are as follows:
Unit: RMB yuan
| Nature | 2024 | Age | As a % of total other receivables | Closing balance of allowance | |
| Hainan Yineng | Current account | 177,726,782.70 | Within 1 year | 59.12% | |
| Tiru?a Aisa | Current account | 55,329,075.24 | Within 1 year; 1-2 years; 2-3years | 18.40% | |
| Dongfang Digicom (Guangdong) | Current account | 34,933,615.27 | Within 1 year; 1-2 years; 2-3years | 11.62% | |
| Dongfang Digicom | Current account | 12,090,924.24 | Within 1 year; 1-2 years; 2-3years | 4.02% | |
| Dongfang Precision (Netherland) | Current account | 6,682,462.38 | Within 1 year; 1-2 years; 3-4years | 2.22% | |
| Total | 286,762,859.83 | 95.38% |
3. Long-term equity investments
Unit: RMB yuan
| Item | Closing balance | Opening balance | ||||
| Gross amount | Impairment allowance | Carrying amount | Gross amount | Impairment allowance | Carrying amount | |
| Investments in subsidiaries | 812,322,784.10 | 45,303,485.99 | 767,019,298.11 | 812,235,280.69 | 45,303,485.99 | 766,931,794.70 |
| Investments in joint ventures and associates | 106,888,057.50 | 106,888,057.50 | 109,046,798.42 | 109,046,798.42 | ||
| Total | 919,210,841.60 | 45,303,485.99 | 873,907,355.61 | 921,282,079.11 | 45,303,485.99 | 875,978,593.12 |
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(1) Investments in subsidiaries
Unit: RMB yuan
| Opening balance | Opening impairment allowance | Change in the period | Closing balance | Closing impairment allowance | ||||
| Additional investment | Reduction in investment | Change in other equity | ||||||
| Dong Fang Precision (HK) Limited | 1,856,010.00 | 1,856,010.00 | ||||||
| Dongfang Precision (Netherland) | 1,602,394.30 | 1,602,394.30 | ||||||
| Guangdong Fosber Intelligent Equipment | 114,790,763.28 | 25,767.35 | 114,816,530.63 | |||||
| Suzhou Shunyi Investment Co., Ltd | 294,799,357.77 | 45,303,485.99 | 294,799,357.77 | 45,303,485.99 | ||||
| Tiru?a (Guangdong) Intelligent Equipment Manufacturing Co., Ltd. | 21,903,462.34 | 21,903,462.34 | ||||||
| Dongfang Digicom Data Technology Co., Ltd. | 4,718,918.74 | 4,718,918.74 | ||||||
| Dongfang Digicom Data Technology (Guangdong) Co., Ltd. | 863,440.97 | 10,000,000.00 | 61,736.06 | 10,925,177.03 | ||||
| Hainan Yineng Investment Co., Ltd. | 102,121,575.83 | 102,121,575.83 | ||||||
| Tianjin Hangchuang | 20,000,000.00 | 10,000,000.00 | 10,000,000.00 | |||||
| Tianjin Hangchuang | 173,800,000.00 | 173,800,000.00 | ||||||
| EDF | 1,832,356.83 | 1,832,356.83 | ||||||
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| Yineng International Holdings Co., Ltd | 28,643,514.64 | 28,643,514.64 | ||||||
| Total | 766,931,794.70 | 45,303,485.99 | 10,000,000.00 | 10,000,000.00 | 87,503.41 | 767,019,298.11 | 45,303,485.99 |
(2) Investments in joint ventures and associates
Unit: RMB yuan
| Opening balance | Opening impairment allowance | Change in the period | Closing balance | Closing impairment allowance | ||||||||
| Additional investment | Reduction in investment | Return on investment recognized using the equity method | Adjustment to other comprehensive income | Other equity changes | Declared cash dividends or profit | Impairment allowance | Others | |||||
| Associates/joint ventures | ||||||||||||
| Guangdong Jaten Robot & Automation Co., Ltd. | 87,476,726.17 | -159,036.34 | 87,317,689.83 | |||||||||
| Nanjing Profeta Intelligent Technology Co., Ltd. | 21,570,072.25 | -1,999,704.58 | 19,570,367.67 | |||||||||
| Total | 109,046,798.42 | -2,158,740.92 | 106,888,057.50 | |||||||||
4. Operating revenue and costs
Unit: RMB yuan
| Item | H1 2024 | H1 2023 | ||
| Revenue | Costs | Revenue | Costs | |
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| Principal operations | 174,730,275.81 | 98,971,447.20 | 199,620,855.04 | 115,715,894.18 |
| Other operations | 8,346,571.88 | 1,567,415.81 | 19,974,397.59 | 2,183,292.25 |
| Total | 183,076,847.69 | 100,538,863.01 | 219,595,252.63 | 117,899,186.43 |
Information related to the transaction price allocated to residual performance obligations:
At the end of the Reporting Period, the amount of revenue corresponding to performance obligations that had beencontracted but not yet performed or fulfilled was RMB56,381,340.41, of which RMB56,381,340.41 is expected to berecognized during 2024-2025.
5. Investment income
Unit: RMB yuan
| Item | H1 2024 | H1 2023 |
| Income from long-term equity investments measured at equity method | -2,158,740.92 | -1,781,870.58 |
| Investment income generated from the disposal of long-term equity investment | 529,048.11 | |
| Income from financial assets held for trading | -3,853,122.25 | -2,738,562.31 |
| Total | -5,482,815.06 | -4,520,432.89 |
XIX Supplementary Information
1. Schedule of exceptional gains and losses in the current period
? Applicable □ Not applicable
Unit: RMB yuan
| Amount | |
| Gain or loss on disposal of non-current assets (inclusive of impairment allowance write-offs) | 5,092,274.31 |
| Government grants through profit or loss (Except for government grants that are closely related to normal business, comply with national policies and regulations, enjoy according to the recognition criteria and have a sustained impact on profit and loss) | 10,323,357.51 |
| Profit or loss from changes in fair value of financial assets and financial liabilities held by non-financial enterprises and profit or loss from disposal of financial assets and financial liabilities, except for effective hedging business related to normal business operations | -90,655,088.24 |
| Reversal of impairment provision for receivables subject to separate impairment test | 7,396.90 |
| Non-operating income and expenses other than the above | 552,141.85 |
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| Minus：Income tax effects | -10,195,770.51 |
| Non-controlling interests effects (net of tax) | 743,081.74 |
| Total | -65,227,228.90 |
Other items that meet the definition of exceptional gain/loss:
□ Applicable ? Not applicable
No such cases for the Reporting Period.Explanation of why the Company reclassifies as recurrent an exceptional gain/loss item listed in the Explanatory Announcement No.1 on Information Disclosure for Companies Offering Their Securities to the Public—Exceptional Gain/Loss Items:
□ Applicable ? Not applicable
2. Return on equity (ROE) and earnings per share (EPS)
| Profit of the Reporting Period | Weighted average ROE | EPS | |
| Basic EPS (RMB yuan/share) | Diluted EPS (RMB yuan/share) | ||
| Net profit attributable to ordinary shareholders of the Company | 3.58% | 0.14 | 0.14 |
| Net profit attributable to ordinary shareholders of the Company before exceptional gains and losses | 5.00% | 0.19 | 0.19 |
3. Accounting data differences under China’s Accounting Standards for Business Enterprises (CAS) andInternational Financial Reporting Standards (IFRS) and foreign accounting standards
(1) Net profit and equity under CAS and IFRS
□ Applicable ? Not applicable
(2) Net profit and equity under CAS and foreign accounting standards
□ Applicable ? Not applicable