Guangdong Dongfang Precision Science & Technology Co., Ltd.
Semi-Annual Report 2022
Date of Disclosure: 27 July 2022
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2022
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 Yao Bin, the Head of the Company’s Accounting Department (equivalentto Financial Manager) hereby guarantee that the financial statements carried in this Report aretruthful, 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.
This Report has been prepared in Chinese and translated into English. Should there beany discrepancies or misunderstandings between the two versions, the Chinese version shallprevail.
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2022
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 ...... 11
Part IV Corporate Governance ...... 64
Part V Environmental and Social Responsibilities ...... 68
Part VI Significant Events ...... 70
Part VII Share Changes and Shareholder Information ...... 77
Part VIII Preference Shares ...... 85
Part IX Corporate Bonds ...... 86
Part X Financial Report ...... 87
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2022
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 2022 Semi-Annual Report carrying the signature of the legal representative.
4. The documents above are lodged in the Securities Department of the Company, 25/F, Hisense SouthernBuilding, 1777 Chuangye Road, Nanshan District, Shenzhen City, Guangdong Province, China.
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2022
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 Group | Fosber S.p.A. |
| Fosber Asia | Guangdong Fosber Intelligent Equipment Co., Ltd. |
| Fosber America | Fosber America, Inc. |
| Fosber Tianjin | Fosber Machinery (Tianjin) Co., Ltd. |
| Tiru?a Group/Spain Tiru?a | Tiru?a Group Industrial, S.L. |
| Tiru?a America | Tiru?a America Inc. |
| 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 |
| Shenzhen Wonder | Shenzhen Wonder Printing System 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. |
| Yinglian Digital | Foshan Yinglian Digital Printing Equipment Co., Ltd. |
| Jaten Robot | Guangdong Jaten Robot & Automation Co., Ltd. |
| Yineng Investment | Hainan Yineng Investment Co., Ltd. |
| Dongfang Digicom | Dongfang Digicom Technology Co., Ltd. |
| Dongfang Digicom (Guangdong) | Dongfang Digicom Technology (Guangdong) Co., Ltd. |
| Corrugated board | Corrugated board 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 die cutting, indenting, nailing, or gluing. Corrugated box is one of the most widely used packaging containers in modern business and trade. |
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2022
| Corrugated box printing and packaging machinery | Corrugated box printing and packaging machinery 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. |
| Corrugator lines | Corrugator lines are assembly lines comprising corrugating, gluing, agglutinating, bundle breaking, dimension board cutting and output processes, which are used to produce and process corrugated boards. A corrugator 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. Corrugator 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 |
| The “Reporting Period” or “Current Period” | The period from 1 January 2022 to 30 June 2022 |
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2022
Part II Corporate Information and Key Financial InformationI 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 | 25/F, Hisense Southern Building, 1777 Chuangye Road, Nanshan District, Shenzhen City, Guangdong Province, China | 25/F, Hisense Southern Building, 1777 Chuangye Road, 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 2021 Annual report.
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2022
2. Information disclosure and location.
Whether the information disclosure and location have changed during the reporting period.
□ Applicable √ Not applicable
The name of the information disclosure newspaper selected by the company, the URL of the website designated by the CSRC thatpublishes the semi-annual report, and the location where the semi-annual report lodges remain unchanged during the reportingperiod, which can be found in the 2021 Annual report.
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
| 2022H1 | 2021H1 | change (%) | |
| Operating revenue (RMB yuan) | 1,535,615,634.26 | 1,400,558,964.18 | 9.64% |
| Net profit attributable to the listed company’s shareholders (RMB yuan) | 148,199,917.83 | 191,117,520.46 | -22.46% |
| Net profit attributable to the listed company’s shareholders before exceptional gains and losses (RMB yuan) | 119,896,025.29 | 156,022,832.56 | -23.15% |
| Net cash generated from/used in operating activities (RMB yuan) | 152,250,706.73 | 206,023,828.25 | -26.10% |
| Basic earnings per share (RMB yuan /share) | 0.12 | 0.14 | -14.29% |
| Diluted earnings per share (RMB yuan /share) | 0.12 | 0.14 | -14.29% |
| Weighted average return on equity (%) | 4.08% | 4.72% | -0.64% |
| 30 June 2022 | 30 June 2021 | Change (%) | |
| Total assets (RMB yuan) | 6,498,246,817.74 | 6,357,168,835.19 | 2.22% |
| Equity attributable to the listed company’s shareholders (RMB yuan) | 3,643,188,598.43 | 3,681,970,298.39 | -1.05% |
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2022
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.
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 | 2022H1 | Note |
| Gain or loss on disposal of non-current assets (inclusive of impairment allowance write-offs) | -367,582.31 | |
| Government grants through profit or loss (exclusive of government grants given in the Company’s ordinary course of business at fixed quotas or amounts as per the government’s uniform standards) | 6,032,264.36 | |
| Gain or loss on fair-value changes on held-for-trading and derivative financial assets and liabilities & income from disposal of held-for-trading and derivative financial assets and liabilities and other debt investments (exclusive of the effective portion of hedges that arise in the Company’s ordinary course of business) | 23,425,024.84 | |
| Non-operating income and expenses other than the above | 453,244.06 | |
| Less: Income tax effects | 997,616.29 | |
| Non-controlling interests effects (net of tax) | 241,442.12 | |
| Total | 28,303,892.54 | -- |
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.
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2022
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/Loss Items:
□ Applicable √ Not applicable
No such cases in the Reporting Period.
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2022
Part III Management Discussion and Analysis
I Principal Business of the Company in the Reporting Period(I) OverviewDuring the reporting period, the Company engaged in no change in its principal business as compared to 2021. Themajor business components are listed below.
[Table 1: Principal Businesses of Dongfang Precision]
| Principal business/product | Main functions and application fields |
| Intelligent corrugated packaging machinery | ? Corrugator lines. It is used for the production of corrugated boards of different specifications, and is the core and key machinery for corrugated packaging production. They are widely used in large- and medium-sized enterprises (primary and secondary plants) producing corrugated boards in the industrial chain. A corrugator line is composed of two process sections, namely wet-end equipment, and dry-end equipment, independent of each other. The former makes corrugated base paper into three-layer, five-layer and seven-layer corrugated boards, and the latter longitudinally cuts, presses, transversely cuts and stacks corrugated boards as required by orders. ? Corrugated box printing and packaging machinery. It is used to produce and process corrugated boards into corrugated boxes of different specifications as required by customers, and it includes such processes as corrugated paper feeding, printing, slotting, die cutting and box stitching. Corrugated box printing and packaging machinery is composed of the corrugated box printing line, the corrugated box printing machine and the supporting pre-printing and post-printing machines for the printing unit including the paper feeding unit, slotting and die cutting unit, waste discharging unit, box pasting and stitching unit and the counting and stacking unit. The printing and packaging machinery is the core of corrugated box production, and is widely used by all kinds of enterprises (primary plants, secondary plants and tertiary plants) that process and produce corrugated boxes in the corrugated packaging industry chain. |
| Corrugated packaging industry Intelligent plant solutions | The Company has built an enterprise- and industry-level intelligent plant platform for customers in the corrugated packaging industry to help the customers realize a digital and network-based equipment layer, connect business, cash, and information flows, and promote comprehensive digitalization of the production and operation layer, as well as data-based reasonable management and decision-making, in order to promote |
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2022
| intelligent transformation, and enhance enterprise competitiveness in all respects. | |
| Outboard power products | 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) Intelligent corrugated packaging machinery business
1. Overview of the intelligent corrugated packaging machinery business
The Company's core business is intelligent corrugated packaging machinery, in which it provides medium- andlarge-sized enterprise customers in the global corrugated packaging industry with core and key production lines andmachines making up the production lines necessary for the corrugated packaging production and processing.The Company has become a one-stop production line and machinery supplier with leading comprehensivestrength in the industry for corrugated packaging enterprise customers and provides machinery products for theproduction and printing of corrugated boards and paper feeding/slotting/die cutting/waste discharging/pasting andstitching/counting/stacking of corrugated boxes of corrugator plants and corrugated box plants.
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2022
[Figure 1 Relationship between Corrugated Packaging Production and Industrial Value Chain and the Company's Intelligent Corrugated Packaging Machinery
Products]
Corrugated base paperKraft paper
Kraft paperCorrugated boxes
Corrugated boxes
Intelligent high-speed corrugator lines
Intelligent high-speed corrugator linesHigh-precision corrugator lines
High-precision corrugator linesCorrugated box printing and packaging lines (top printing fixed type)
Corrugated box printing and packaging lines (top printing fixed type)Corrugated box printing and packaging lines (bottom printing open-close type)
Corrugated box printing and packaging lines (bottom printing open-close type)Corrugator
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2022
2. Main products in intelligent corrugated packaging machinery business
(1) Corrugator lines
The Company's corrugator line business is mainly operated by the wholly owned subsidiary Fosber Group (consisting of Fosber Italy, Fosber America, QCorr,Tiru?a Group, etc.) and the holding subsidiary Fosber Asia.The subsidiary Fosber Group owns S-Line, C-Line and Quantum-Line products, and its main customer groups are in Europe, North America, and Latin America.The subsidiary Fosber Asia owns Pro-Line and E-Line products, and its main customer groups are in China, Southeast Asia, and South Asia.The Company's middle- and high-end corrugator line products are ahead of those of domestic brands of enterprises of the same type in overall performanceincluding velocity, width, intelligence, precision, and stability, and run stably and are provided with good technical support, being greatly competitive in the globalindustry market.
(2) Corrugated box printing and packaging lines
The Company's corrugated box printing and packaging line business is mainly operated by Dongfang Precision (China), Dongfang Precision (Europe) andShenzhen Wonder.
Dongfang Precision (China) owns integrated corrugated box printing and packaging line products including Dongfang Star I top printing fixed type FFG inline,Dongfang Star II top printing open-close type FFG inline, Super Star I bottom printing die cutter stripper vacuum stacker converting line, Super Star II bottom printingopen-close type FFG inline and Super Star III bottom printing open-close type/FFG & stitcher line, covering different types and specifications as fixed type/open-closetype and top printing/bottom printing. Besides, Dongfang Precision (China) also sells the main assemblies of the integrated line products up to dozens of differentspecifications, as well as corrugated box printing and packaging machinery products of different market positioning. Its integrated line products and single machineproducts are marketed in over 30 countries and regions in Europe, America, Asia, Africa, Latin America, and Oceania.
Dongfang Precision (Europe) owns high-end integrated corrugated box printing and packaging lines including FD quickset top printing FFG inline and HGL
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2022
quickset bottom printing FFG inline and quickset bottom printing FFG/die cutter stripper line and sells them in the European market. These lines can feed paper withoutcrushing and be separately controlled by the servo, is fully automatic, and is capable of high-resolution printing. Besides, it also sells pre-printing and post-printingmachines of different specifications that are applicable to integrated line products, including paper feeders, waste dischargers, intelligent stackers, and folder gluer.Shenzhen Wonder is a pioneer and leader among the Chinese brands of digital printing machinery in the corrugated packaging industry. It is one of the severalenterprises worldwide that has demonstrated its leadership in applying the high-speed inkjet printing technology to corrugated packaging, and that specializes inproducing the printing machinery for corrugated packaging based on the Single Pass digital printing technology.After years of development, Shenzhen Wonder has owned the Multi Pass scanning digital printers applicable to small batch printing of corrugated boards and theSingle Pass high-speed digital printers applicable to the printing of the corrugated boards of various specifications and to the pre-printing of the base paper. Additionally,it has formed a complete digital printing machinery matrix that covers multiple application modes and scenarios, ranging from Multi Pass scanning digital printers toSingle Pass high-speed direct-inkjet digital printers, from post-printing to pre-printing, from dye ink, pigment ink to UV inks, from cattle paperboard to coated board,from single-sheet printing to seamless change of variable data, from stand-alone printing to ERP-supported printing. This has enabled Shenzhen Wonder to provide afull range of digital printing solutions for corrugated board packaging to small, medium, and large customers and to export its products to America and Europe, theMiddle East, Latin America, Southeast Asia and elsewhere. Currently, Shenzhen Wonder occupies a market stock of more than 1,300 units in more than 80 countriesworldwide.
Meanwhile, Shenzhen Wonder, with its profound exploration of digital printing of packaging and a good reputation in the industry, has created the digital printingmachinery for advertising, home decoration, building materials and other fields, and the customized high-speed digital printing machinery such as flatbed and roll-to-roll printers. Materials that are applicable to flatbed printers include aluminum gusset, glass, ceramic tile, metal plate, acrylic plate, and pp plate sheet. Materials thatare applicable to roll-to-roll printers include corrugated base paper, removable stickers, print cloth, PVC color film, decorative paper, and metal coils.
[Table 2 Main Product Matrix of the Intelligent Corrugated Packaging Machinery Business of Dongfang Precision - Corrugator Lines]
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2022
| Product type | Brand | Product image | Main characteristics |
| Corrugator lines | Width: 2.5m to 2.8m; Velocity: 250 to 470m/min Pro/Care, Pro/Quality, etc. Industrial Production Information System 4.0 | ||
| Width: 1.8m to 2.5m. Innovation Compact body and high flexibility More suitable to produce light corrugated boards | |||
| Width: 2.2m to 2.8m. Velocity: 180 to 320m/min | |||
| The world's top three professional suppliers of corrugating rolls and pressure rolls, with leading processing and tungsten carbide processing technologies |
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2022
[Table 3 Main Product Matrix of the Intelligent Corrugated Packaging Machinery Business of Dongfang Precision - Corrugated Box Printing and Packaging
Lines]
| Product type | Brand | Product image | Main characteristics | ||||
| Integrated corrugated box printing and packaging lines | Top printing fixed type Full servo control Model change without suspension 2min quick order change Energy-saving, efficient and intelligent | ||||||
| Dongfang Star I top printing fixed type FFG inline | |||||||
| Top printing open-close type Servo motor control Require only 2 to 3 operators for one integrated line | |||||||
| Dongfang Star II top printing open-close type FFG inline | |||||||
| Efficient, stable, thorough cleaning Accurate counting and automatic stacking Suitable for special-shaped boxes, machine-packed boxes, and pre-printed boxes, | |||||||
| Super Star I bottom printing die cutter stripper vacuum stacker converting line | |||||||
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2022
| Product type | Brand | Product image | Main characteristics |
Integratedcorrugated box
printing andpackaging lines
| Integrated corrugated box printing and packaging lines | and can cut dies by continuous clicks once after being powered on, which solves the industry pain point Require only 2 to 3 operators for one integrated line | ||||||
| A professional die cutter FFG line Suitable for efficient production of boxes requiring slotting or die cutting Servo motor control Require only 2 to 3 operators for one integrated line | |||||||
| Super Star II bottom printing open-close type FFG inline | |||||||
| A well-established bottom printing FFG & stitcher All-in-one control and easy operation One machine for multiple purposes supporting order changes Fewer processes and lower labor costs | |||||||
| Super Star III bottom printing open-close type/FFG & stitcher line | |||||||
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2022
| Product type | Brand | Product image | Main characteristics | |
| High-end bottom printing fixed type line Driven by spindle servo Quick order change Complete pre-printing and post-printing supporting units | ||||
| High-end bottom printing open-close type line Servo motor control Require only 2 to 3 operators for one integrated line | ||||
| Industrial printing, benchmark accuracy 1200 DPI Printing speed 150m/min Support 8-color printing Wide format can be customized | ||||
| WD200++SINGLE-PASS Industrial Grade High-Speed Corrugated Board Digital Printing Line | ||||
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2022
| Product type | Brand | Product image | Main characteristics |
| Combines Multi Pass high precision scanning and Single Pass high speed printing with two different digital printing methods in one Reduce equipment investment capital, save space, labor, maintenance, and other costs, greatly improve production efficiency |
3. Business model of intelligent corrugated packaging machinery business
A. R&D modelBoth the corrugator line business represented by the subsidiaries Fosber Group and Fosber Asia and thecorrugated box printing and packaging machinery business represented by Dongfang Precision (China), DongfangPrecision (Europe) and Shenzhen Wonder are equipped work industry-leading independent design and R&Dcapabilities.The Company keeps building a high-level R&D innovation management mechanism and has an R&D teamcomposed of industry-leading experts, and secure the leading position of its technology in the industry with long-term and short-term product R&D plans, market-oriented R&D mechanism and refined R&D talent incentivepolicies.
B. Procurement and production modelThe Company purchases steel plates, metal components and electric components from external suppliers, whileproducing core machining components and corrugating rolls by itself.It produces most of the machinery products according to orders, and purchases raw materials from suppliers,compiles annual, quarterly, and monthly production plans and reasonably arranges production according to salescontracts and raw materials on hand only after receiving customers' orders and requiring customers to pay part ofthe down payment. In production and operation management, the Company promotes "lean production" toaccurately control BOM costs and manufacturing costs and continuously improve operational efficiency.
In general cases, orders of corrugator lines will be delivered in 4 to 6 months, and orders of corrugated boxprinting and packaging machinery will be delivered in 2 to 3 months.C. Marketing modelIn terms of the marketing method, the Company sells products through direct selling and distribution. In thedomestic market, the Company sells products mainly through direct selling, as well as a small amount of distribution.In overseas markets, the subsidiaries Fosber Group and Fosber Asia sell mainly through direct selling and DongfangPrecision (China), Dongfang Precision (Europe) and Shenzhen Wonder sell mainly through agency distribution insome overseas markets.Direct selling allows the Company to directly face customers to ensure accurate demand information, promptinformation transmission and information feedback to the Company's R&D and production departments, so that
customers can be timely provided with overall solutions. Due to the complexity of products, the Company has anoutstanding after sales service team that is responsible for on-site installation, commissioning, training and aftersales services, which can provide 7*24h prompt response and support as required by customers.In terms of the types of products being sold, the Company sells production lines, single machines,accessories, software, and services. Integrated lines and single machines are sold only once, and the amount of eachsale is large. Accessories, software, and services are sold multiple times during the lifecycle of machines.In the industry market, the continuously increasing holding of the Company's machinery boosts ceaseless salesof the Company's accessories, software and services, and high-quality technical support and services drives the salesof production lines and machines, which is fully evidenced by the high re-purchase rate of the Company's middle-and high-end machinery products, so the two support and facilitate each other.In terms of the settlement method of sales payment, the Company enjoys a high brand awareness andsuperior bargain power in the industry, so it collects down payment in advance and payment by stages for the salesof corrugator lines and corrugated box printing and packaging machinery products. In general cases, 80% to 90%of the sales payment can be collected upon the delivery of products.(III) Overall solution business for intelligent plants in the corrugated packaging industryDongfang Digicom, established in 2020, is the key carrier of the implementation of the Group's "digitalizationand intellectualization strategy". Adhering to the purpose and mission of "making the industry more intelligent andmanufacturing simpler" and with the vision of "to become a world-leading supplier of overall solutions of intelligentplants and industrial Internet services in the packaging industry", it is specialized in building an enterprise-level andindustry-level industrial Internet platform for the corrugated packaging industry that integrates new informationtechnologies including IoT, cloud computing, big data, 5G and AI.Aiming at the current situation that most domestic corrugated packaging enterprises are poorly capable ofproduction resources integration and in labor shortage, have unreasonable workshop layout and have a large roomfor production efficiency improvement, the intelligent logistics business team of Dongfang Digicom providescorrugated packaging enterprises in China with tailor-made intelligent logistics solutions for intelligent plants basedon years of profound experience in global and domestic industry markets and ERP, APS, WMS/WC and MEStechnologies and in combination with advanced international technical concepts and the distinctive characteristicsof the carton packaging market in China.The Company enjoys a whole-industrial-chain layout in the corrugated packaging machinery sector, and the
most complete and rich product base in the industry. With nearly 30 years of profound experience in Know-How inthe corrugated packaging machinery sector, it is the firm foundation and solid support for Dongfang Digicom. Withan unswerving strategic focus, the Company continues resources input and import of talents specialized in industrialInternet and has developed the unique and core technical R&D force of Dongfang Digicom to output solutions withcompletely independent intellectual property rights.
Figure 2 Dongfang Digicom's Overall Solutions for Intelligent Plants in the Corrugated Packaging Industry
| Intelligent operation |
| Intelligent plant |
Intelligentmanufacturing
Intelligentmanufacturing
Data
middle
office
Tool
platformIoT
platform
IoT
platform
Supply chainfinance
| Supply chain finance | Online mall | Business synergy | Business operation | Second-hand machinery market |
Decision-making
analysis
| Decision-making analysis | Operation analysis | Abnormality monitoring and handling | Visualized (Web/app...) | Energy monitoring |
Design and manufacturing integration
| Design and manufacturing integration | Network-based synergetic manufacturing | Quality control | Cost management |
Intelligent scheduling
| Intelligent scheduling | Intelligent dispatching | Intelligent collection | Smart monitoring |
Intelligent industry
Intelligent industryAccessory management
Accessory management
Printer production management
system
Printer production management
system
Basic data
| Basic data | Order plan management |
Equipmentmanagement
| Equipment management |
| Report management |
Production
management
Production
management
Quality control
Quality controlAlgorithmanalysis
| Data warehouse | Algorithm analysis |
Low-level code
development
Low-level code
developmentData cleansing
| Data cleansing | Real-time computing | Integrated channel | Data exchange | Data modeling |
Customized
development
| Procedure guide | Report engine | Application integration | Basic services | Customized development |
Hardware integration platform
| Hardware integration platform | Edge computing |
Plant 1
Plant 1Printer
| Printer | Flat-pressing flat die cutter | FFG & stitcher | Corrugator lines |
Other
machineryPlant 1
Plant 1Printer
| Printer | Flat-pressing flat die cutter | FFG & stitcher | Corrugator lines |
Other
machineryPlant 1
Plant 1Printer
| Printer | Flat-pressing flat die cutter | FFG & stitcher | Corrugator lines |
Other
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2022
[Figure 3 Application Model of the Overall Solution Business for Intelligent Plants in the Corrugated Packaging Industry]
| Data cleansing | Data processing |
DFDSplatform(dataapplication)
DFDSplatform(dataapplication)Corrugated packaging enterprises
Corrugated packaging enterprises
APP
| APP | Large screen dashboard | Data report |
Bog dataplatform
Bog dataplatformData storage
| Data storage | Data analysis |
Equipment access
| IOT | Equipment access | Data collection | Data storage | Rules Engine | |||
Border gateway (edge acquisition terminal + intelligent sensing terminal)
Border gateway (edge acquisition terminal + intelligent sensing terminal)Internet of Machines
| Internet of Machines | Internet of Things | Internet of Persons | ||||
| Equipment |
Printer
Printer
Flat-pressing flat die
| cutter | FFG & stitcher | Corrugator lines | ||
Visual
| inspection | Smart electric meter |
Smartwatermeter
Smartwatermeter
Intelligentsensor for
| environmental monitoring | RFID/bar code tag |
Fieldoperators
Fieldoperators
Overall solution for intelligent corrugated packaging plants
Overall solution for intelligent corrugated packaging plantsWhole-plant intelligent logistics
Whole-plant intelligent logisticsFast moving consumer goods
| Fast moving consumer goods | Electronics industry |
Appliance industry
| Appliance industry | Pharmaceuticals industry | Light industry |
Other industries
Other industries
End-market application
(IV) Outboard power product businessThe subsidiary Parsun Power mainly engages in the design, R&D, production, and marketing of outboardmotors, and is committed to becoming a world-class outboard power supplier. Parsun Power is the leading enterprisein the outboard motor industry in China and enjoyed the first market share in the industry from 2018 to 2020. In2021, the sales volume of outboard power products of Parsun Power reached 75,500 units, accounting for 11.11%of the global forecast sales volume of small and medium horsepower outboards power products.
1. Industry situation and market position of Parsun Power
Parsun Power falls under the outboard motor industry in the marine auxiliary equipment industry. Outboardmotors are the key equipment for small- and medium-sized ships, and are widely used in water recreation, fishing,water traffic, emergency rescue, shore landing and maritime patrol, as shown below:
[Table 4 Fields and Scenarios of the Application of Outboard Motors]
| Field of application | Specific scenario | Legend |
| Recreational | Recreational fishing, recreational sailing, and recreational water sports | |
| Commercial | Fishing, water traffic and waterway maintenance |
| Field of application | Specific scenario | Legend |
| Official and military | Emergency rescue and maritime patrol Beach landing and water reconnaissance |
According to the report by Global Market Insights Research Private Limited, the size of the global outboardmotor market in 2020 was USD9,105 million, which is expected to reach USD13,191 million by 2027, with acompound annual growth rate of 5.04% from 2021 to 2027. In 2020, the size of the outboard motor market in Chinawas USD228 million, which is expected to reach USD424 million by 2027, with a compound annual growth rate of
8.91% from 2021 to 2027, significantly higher than that 5.04% of the global market.
Worldwide, the outboard motor industry is dominated by Japanese and American brands, including Yamaha,Japan (an outboard motor brand under Yamaha Motor) and Mercury, USA (an outboard motor brand under BentfieldGroup).
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 motor industryin China, and there is a broad market space for domestic substitution.
Meanwhile, with the increasing attention to global environmental protection and climate changes and theimplementation of China's carbon emission reduction and carbon neutrality policies, the global development trendof outboard motor products toward medium- and high-horsepower and new-energy ones is more and more definitive.
After years of development, Parsun Power has become a leading enterprise among domestic outboard motorbrands, its market share has been ranking the first nationwide for years, and its products are being exported to tensof countries and regions in Europe, Africa, Oceania, South America, North America, the Middle East, and SoutheastAsia. Parsun Power has realized a complete product line layout of "gasoline-diesel-electric power” and has beenmarching toward high-horsepower diesel outboard motors and electric outboard motors with its years of experience
in products and technology and leading market share in the field of petrol outboard motors. In the future, it willraise funds through a spin-off listing, and will improve its core competitiveness to become a professional supplierof aquatic power products in China with global competitiveness.
2. Main products of Parsun Power in outboard motor business
Parsun Power provides outboard motor products from 2hp to 115hp. The output power of an outboard motorincreases with its horsepower, so as the size or velocity of the boat assembled to it.
By the source of engine power, outboard motor products of Parsun Power are divided into gasoline outboardmotors, 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.
In recent years, Parsun Power has developed medium- and high-horsepower outboard motors leading theChinese market and with domestic substitution characteristics, has achieved mass production of the maximum115hp gasoline outboard motors, and has successfully broken the long-term monopoly by international well-knownbrands in the 115hp sector. With stable and reliable quality of its 115hp gasoline outboard motors, Parsun Powerhas won more and more product orders in Europe and China, contributing to domestic substitution of medium- andhigh-horsepower outboard motors and the improvement of the global market share of domestic brands. Aftersuccessfully conquering the 115hp gasoline model, Parsun Power's R&D team marches toward higher-horsepowermodels and strives the make domestic-brand high-horsepower outboard motors take a place in the globalcompetition of the high-horsepower outboard motor market.
Electric outboard motors are powered by batteries. They convert electric power into kinetic power throughmotors, and are characterized by zero emissions, low noise, and easy operation, and are mainly used in scenic spotsand other sectors requiring stricter environmental protection. Parsun Power's electric outboard motors are dividedinto 7hp motors and 9.9hp motors, which are being sold in developed countries such as the United States.
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 torqueand being safer, more reliable, and easier for maintenance, which are mainly used in commercial transportation andpublic law enforcement. Parsun Power now has diesel outboard motors and is selling the high-horsepower outboardmotors of 150hp to 300hp of OXE Marine (a Swedish brand) in the domestic market.
Parsun Power's outboard motor products have stable quality and reliable performance, and some of them enjoy
the comprehensive performance comparable to that of internationally well-known brands and emissions reachingEuropean and American standards. In the future, Parsun Power will focus on high-horsepower outboard motors,enrich electric outboard motor production lines, continuously optimize the product structure of outboard motors,and consolidate its leading position among domestic outboard motor manufacturers.
3. Business model of Parsun Power's outboard motor business
Parsun Power runs its outboard motor business through "Design and R&D + Production + Marketing". In termsof sales model, Parsun Power gives priority to distribution, with direct selling as a supplement.II Core Competitiveness AnalysisIn the Reporting Period, the Company had no significant adverse changes in its core competitiveness. Analysisof the Company's core competitiveness is as follows:
(I) Complete layout in the corrugated packaging machinery industry chain and the most complete andrichest product portfolio in the industry
Among 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. A full-coverage layout in thecorrugated packaging production and processing value chain has been established.
Processes in the corrugated packaging production and processing value chain covered by the Company'sbusiness units include:
1. Corrugator production:
Fosber Group, Fosber Asia and QuantumCorrugated are the business units of the Company engaging in it.They serve large- and medium-sized enterprises in domestic and foreign corrugated board production and processingindustries, and supply middle- and high-end corrugator line products of different specifications, different types, anddifferent market positioning.
Fosber Group has middle- and high-end corrugator lines and leading industrial Internet technologies in thefront rank of the global industry market, and has corrugating roll production lines and high-speed corrugator linessuitable for industrial digital printing, having a complete industrial layout in the core production line and machinerysector in the field of corrugator production and processing.
Specifically, Tiru?a Group, a subsidiary of Fosber Group, is a time-honored, prestigious, and professional
corrugating roll supplier in Spain, and its corrugating roll products are one of the key components of corrugatorlines, and QCorr, another subsidiary of Fosber Group, has the independently developed Quantum high-speedcorrugator line that has the unique design fitting the embedding of industrial digital printing technology.
2. Corrugated box printing and packaging: Dongfang Precision (China), Dongfang Precision (Europe) andShenzhen Wonder are the business units of the Company engaging in it. They serve domestic and foreign corrugatedbox production and processing industry markets, and supply middle- and integrated high-end corrugated boxprinting and packaging lines and single machine products covering all units and all specifications of the productionlines. In terms of corrugated box printing and packaging machinery, Dongfang Precision's products are divided intofixed type/open-close type, top printing/bottom printing and integrated line/single machine products and has theriches product portfolio among domestic enterprises of the same type. In terms of digital printing, the digital printingmachine products of Shenzhen Wonder cover a wide range of application modes and scenarios, including MultiPass scanning and Single Pass high-speed direct-jet, post-printing and pre-printing, ink, and UV, etc., that haveformed a complete digital printing lines and machines product matrix and can provide a full range of digital printingproducts for corrugated packaging for customers of all levels.
3. Overall solution for intelligent corrugated packaging plants: Dongfang Digicom is the business unit ofthe Company engaging in it. It provides customers in the corrugated packaging production and processing industrymarket with the overall solution for intelligent plants covering order management, production management, costanalysis, intelligent decision-making, intelligent logistics and supply chain management and equipmentmanagement, as well as the solution for intelligent whole-plant logistics.
With the full-coverage industry chain layout, the Company has the most complete and richest corrugatedpackaging line and machinery product portfolio in the industry, making it capable of meeting the demands forintegrated line and single machine products of different market positioning, different customer types and dozens ofspecifications and models, second to none in China.
Figure 4 Business Divisions and Entities of Dongfang Precision
(II) Industry-leading technology level and capability of continuous R&D and innovationThe Company's overall R&D strength and technology level are at the forefront among domestic enterprises ofthe same type. As of 30 June 2022, the Company was holding around 330 licensed patents at home and abroad. Andthe Company has been awarded the Provincial Industrial Design Center of Guangdong and the ProvincialDemonstration Enterprise of Intellectual Property Right in Guangdong.Its subsidiary Fosber Group is one of the two companies with the strongest comprehensive technical strengthin the field of high-speed and wide corrugator lines worldwide. Fosber's middle- and high-end corrugator lines areinternationally leading in the industry in velocity, width, precision, stability, reliability, failure rate and intelligence,and its high-technology-content and high-quality machinery products and technical support services have won thepraise of domestic and foreign enterprise customers.During design and R&D of high-end corrugator lines, Fosber Group proactively practices the industrial Internettechnology and applies sensors, VR, big data, and algorithms, and has launched the PRO information-basedintelligent production management system for corrugator lines with tens of years of Know-How experience in themiddle- and high-end corrugator line industry, realizing full automation and intelligence of the whole process ofcorrugator production and processing. Through over 200 sensors in corrugator lines, it monitors the temperature,humidity, heat, folds, and other data of corrugator lines in real time, and monitors the dashboard dynamically in theproduction process. Through data-based production performance analysis and cost analysis, it helps customersimprove production efficiency. Through the self-diagnosis system, it identifies abnormal operations and sends alerts,
and searches solutions in the database and outputs the solutions automatically. Through the "big data analysissystem" 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.Figure 5 How Fosber Group's PRO Information-based Intelligent Production Management System Works
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 InternalCombustion 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 at the end of the Reporting Period, it has got 57 licensed patents and won two secondprizes of the China Machinery Industry Science and Technology Award and is one of the main drafters of twoindustry standards including Outboard Gasoline Engines- General Requirements (JB/T 11875-2014) and GeneralTechnical Specification of Outboard Engine (CB/T 4505-2020). In 2021, Parsun Power successfully realized themass production of 115hp outboard motors, that with independent intellectual property rights, breaking the long-standing monopoly of internationally well-known brands in the 115hp sector.
(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 has
20 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 intelligent corrugated packaging machinery manufacturing industry, and can enable the Company toachieve steady 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 talents" and "cultural orientation"as the basis of its corporate strategy and corporate culture, and develops its organizational capacity, improves theGroup'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 in the industry worldwideDongfang Precision and Shenzhen Wonder corrugated box printing and packaging machinery, Fosber andQuantum corrugator lines, Tiru?a corrugating rolls and Parsun outboard motors of the Company are enjoyingconsiderable brand recognition and industry influence at home and abroad.The Company has become an influential enterprise in the industry, as evidenced by its honors like the "Top500 Private Manufacturers of China", the "Champion in Single Aspect", and the "Leader in Industry Segment".
In the business segment of "intelligent corrugated packaging machinery", the Company has established goodpartnerships with domestically leading enterprises in the corrugated packaging industry including Nine DragonsPaper, Shanying Intl, Yuen Foong Yu, HXPP, MYS, XTL, Great Shengda, Forest Packing Co., Ltd., UCPS andZhengye International, and large international groups in the corrugated packaging industry including InternationalPaper, Smurfit Kappa, DS Smith, APP Sinar Mas and Mpact.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 solutions for intelligent plants as well as middle-and high-end production lines and machinery. The Company has seized opportunities and formed a bettercompetitive edge by virtue of its stable business partnership during the above industry changes.(V) Global layout of business assets
The 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 NorthAmerica, 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 generally competitive in the world when it isoperated as a group.
Figure 6 Global Layout of the Company's Business Assets and Marketing Network
(VI) Strong strategic control and integration of business segments
Since listing, the Company has been making full use of the platform of listed companies to carry out industrialmergers and acquisitions of appropriate subject matters in the corrugated packaging machinery industry chain. TheCompany attaches great importance to post-investment integration. Over the years, the Company has developedstrong strategic control and integration of its business segments through successful practices in acquiring targetcompanies in the corrugated packaging machinery industry chain and has accumulated rich experience in control
and integration.Strategic control is the core capability that the Company relies on to manage its various business entities. Afteryears of practice, the Company adjusted the strategic development plans, business models, product mixes, marketstrategies and core management teams of the target companies acquired with its in-depth understanding of theindustry, forward-looking foresight to the development trend of the industry, clear awareness of its strategicdevelopment objectives and a well-established understanding of the capabilities and resources of all its businessentities, so that these companies can be energized for new growth and step on a new development stage.In terms of post-investment integration, the Company has formulated the legal person governancestandardization policy, the "three-board" operation mechanism and the strategic and financial control system, andimplemented decentralized authorization management, complete audits, and management incentives, forming a setof measures for integrated and effective post-investment control to secure the effective implementation of thestrategic plan.
In 2014, the Company acquired the shareholding right of Fosber Group, and took several effective measuresin the acquisition, helped Fosber Group adjust its strategic plan and business strategy and standardize theauthorization management system, and implemented the performance incentive policy and strengthened financialcontrol over the core management. Such measures have successfully stimulated Fosber Group's business vitality.From 2015 to 2021, the compound annual growth rate of the operating revenue of Fosber Group was about 14%,and the same of its net profit was 30%. In 2022H1, Fosber Italy, that’s the Fosber Group's main business unit, grewrevenue by more than 30% YoY and Fosber America grew revenue by more than 70% YoY, both recording thehighest H1 revenues in the five years since 2018 to date.In 2015, the Company acquired the shareholding right of Parsun Power, helped Parsun Power streamline andadjust 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 talents for a more powerful core team. These measures enabled Parsun Powerto realize continuous and stable growth. From 2017 to 2021, the compound annual growth rate of the operatingrevenue of Parsun Power was about 20%. In 2022H1, Parsun Power's revenue increased by more than 25% YoY.In 2019 and 2020, the Company acquired the relevant business assets of Tiru?a Group, a nearly century-oldcorrugating roll manufacturer, and those of Agnati, an once splendent Italian corrugator line manufacturer. TheCompany fully streamlined the development strategies, R&D systems, product sequences, marketing and team
building of these two companies, based on which it adjusted and optimized the business strategies and outputmanagement, effectively stimulating the vitality of the two old European companies and the enthusiasm of theirmanager teams.Relying on its strong strategic control and integration of business segments, based on "mutual respect andmutual trust" and with an open mind seeking common ground while putting aside differences, the Companyeffectively integrated all its business entities and continuously released the synergy with the industry chain, and hasbecome a successful example among domestic private enterprises in integration after domestic and foreign industrialmergers and acquisitions. The valuable experience and accumulation in industry chain mergers, acquisitions andintegrations lay a solid foundation and provide strong support for the Company to promote the implementation ofthe five-year strategic planning and realize steady and sustainable development.
III Core Business Analysis(I) OverviewThe Russia-Ukraine conflict, the recurring COVID-19 pandemic, the interest rate increases by the FederalReserve of America and other factors in the first half of 2022 have raised the risk of global stagflation andsignificantly increased the uncertainties. Under enormous internal and external pressures, China's economy hasdisplayed strong resilience. Thanks to the effects delivered by a range of robust and stable economic policies, Chinahas overcome the adverse impacts of the factors beyond expectations and achieved a YoY increase of 2.5% in GDPin H1 2022.
The Company was also in face of complex and more challenging domestic and international market conditionsin H1 2022. Under the firm leadership of the Board of Directors and the management and through the hard work ofall employees, the Company bucked up its principal business and continued the trend toward steady growth that hasbeen lasting for years. In the Reporting Period, the Company recorded operating revenue of approximatelyRMB1,536 million, up by 9.64% YoY, and a net profit attributable to its shareholders of approximately RMB148million, down by 22.46% YoY.
(II) Analysis of the performance of the business divisions in the Reporting Period
1. The division of corrugator lines
The corrugator line division is an important component of the Company's core business, contributes to overhalf of the Company's total revenue from principal business, and has been steadily growing for consecutive years.From 2018 to 2021, the compound annual growth rate of the operating revenue from it was about 16%. This divisionincludes the wholly owned subsidiary Fosber Group (including Fosber Italy, Fosber America, QCorr and Tiru?aGroup) and the holding subsidiary Fosber Asia. Fosber Group, largely targeting the American and European markets,is central to this division.Fosber Group's businesses, assets and team members are in Europe and North America. Fosber Group and allits subsidiaries adopt localized management and operation, and have their product design, development andproduction and manufacturing in local regions in Europe and North America. Their products are corrugator linesand corrugating rolls of different market positioning, which are eventually used for the production and processingof corrugated packaging products of different models. Corrugated packages are rigid consumer goods in Europeanand American countries. The official introduction of the plastic ban in Europe in July 2021 further accelerated thetrend of "replacing plastics with paper" in the packaging industry of the European Union. The increase in the demandfor corrugated packaging products in these end markets will be conducive to the increase in the demand forcorrugator lines.In H1 2022, Fosber Italy, a principal business unit (PBU) of Fosber Group, achieved operating revenue ofapproximately EUR75 million and a combined value of new orders of approximately EUR158 million, representingYoY increases of 34% and 67%, respectively. Fosber America, also a PBU of Fosber Group, recorded operatingrevenue of approximately USD70 million and a combined value of new orders of approximately USD100 million,up 72% and 97% year on year, respectively. In H1 2022, both Fosber Italy and Fosber America have achieved thehighest operating revenue and combined value of new orders for H1 in the five years since 2018. The number ofFosber America's orders for integrated line products and single machine products grew dramatically byapproximately 165% year on year, with some orders scheduled for 2024. The real economy of the US in H1 2022remained promising. According to the latest research data released by the research institute Mastercard SpendingPulse on the retail market of the US in June, the total retail sales of consumer goods (excluding automobiles) forJune in the US climbed 9.5% year on year, and the online retail sales were approximately twice as many as thosefor the same period in 2019. The end market boosted the market demand of the corrugated packaging machineryindustry. Fosber Group surpassed its main competitors in terms of sales volume and amount in the North Americanmarket, fully displaying the competitiveness of the corrugator lines of Fosber in the high-end corrugator line market
of North America.During the Reporting Period, Qcorr, a member enterprise of Fosber Group, sold its first 2.5-meter-wideQuantum corrugator line, achieving a breakthrough in sales in the North American market. Meanwhile, theintroduction of the Quantum corrugator line into China was constantly in progress. Tiru?a Group, a memberenterprise of Fosber, achieved a significant increase in its number of corrugating roll-related orders during theReporting Period, approximately twice as many as that for H1 2021.In H1 2022, the Russia-Ukraine conflict and the high inflation rates in Europe and the US increased the energyand raw material costs in the European market, which resulted in a YoY rise in the manufacturing cost. The supplytension of some parts postponed the order delivery date to some extent. All the above-mentioned factors have partlyslowed the profit growth of Fosber Group. Additionally, the euro depreciation was expedited in H1 2022. As therecording currency of Fosber Group's financial statements is the euro, the decrease in the euro exchange rate hasinfluenced the consolidated financial statements to some extent.The subsidiary Fosber Asia mainly serves China and Southeast Asia markets. Fosber Asia's Pro-Linecorrugator lines are tailor-made for the China market, with the import substitution rate of parts standing at around90%. Making full use of China's supply chain advantages with the most complete industrial categories and the mostcomplete supporting facilities in the world, Fosber Asia can design and manufacture these corrugator linesdomestically, providing industrial customers with high-quality and high-end corrugator line products which aremade in China.During the Reporting Period, Fosber Asia constantly expanded its foreign sale territories and entered theRussian market for the first time. The combined value of Fosber Asia's new orders in foreign markets wasapproximately twice as much as that for the same period in 2021. In terms of R&D, the projects of Fosber Asia forthe localization of internationally advanced, high-end corrugator lines and Quantum corrugator lines were in smoothprogress during the Reporting Period. Meanwhile, positive progress was achieved in the project for the localizationof corrugating rolls of Tiru?a.Facing challenges arising from changes in the external environment and the market demand of the industry,the Company responded proactively. Specifically, it adjusted the product and marketing strategies for the corrugatorline division, proactively grasped the new opportunities worldwide brought by the changes in the marketcompetition of the industry, and constantly improved and launched new products that could better solve the painpoints for customers of the industry. Besides, it deepened the internal integration of the corrugator line business and
improved quality and efficiency to enhance its market competitiveness.
2. The division of corrugated box printing and packaging lines
The division of corrugated box printing and packaging lines is the oldest business among the principal typesof business of the Company. By the end of the Reporting Period, this division is comprised of Dongfang Precision(China), Dongfang Precision (Europe) and Shenzhen Wonder.In H1 2022, Dongfang Precision (China) witnessed rapid growth in its export business. Thanks to the surge inthe market demand of foreign industries and intensified efforts in the direct sale and the creation of access to theinternational market, the revenue of Dongfang Precision (China) from export grew by more than 60% year on year;the combined value of new orders stood at approximately RMB290 million, up 43% year on year. Meanwhile,Dongfang Precision (China) was granted another two invention patents and three patents for utility models, andprogress was achieved in the development and design of new models.
In June 2022, the Company completed the acquisition of Shenzhen Wonder. It obtained 51% of the shares anda controlling stake in Shenzhen Wonder through the combination of the acceptance of equity transfer and capitalinjection. Consequently, Shenzhen Wonder became one of the important members of the "division of corrugatedbox printing and packaging lines".
The incorporation of Shenzhen Wonder into the division of corrugated box printing and packaging linessignificantly enhanced the Company's comprehensive strength in the field of digital printing of corrugatedpackaging. Meanwhile, Shenzhen Wonder will be included in the Company's consolidated statements and will alsobecome a new driver to boost the results growth of the Company's division of corrugated box printing and packaginglines. In H1 2022, the combined value of new orders of Shenzhen Wonder reached approximately RMB100 million.So far, Shenzhen Wonder has had eight invention patents and 27 patents for utility models.
3. The division of outboard power products
In H1 2022, the subsidiary Parsun Power maintained the robust growth trend in its outboard motor business. Itachieved operating revenue of approximately RMB280 million, up 25% year on year, and the revenue from theoutboard motor business increased by more than 30% year on year.
The outboard motor business of Parsun Power has been benefiting from the constant growth in the demand foroutboard motors from water entertainment consumption in foreign markets and the trend of replacement withdomestic products in dedicated domestic markets. During the Reporting Period, Parsun Power's revenue from export
continued to grow rapidly, and that from the domestic market basically remained unchanged from the same periodlast year. Parsun Power continued to increase its R&D investment and enrich the product matrix. The R&D of highhorsepower gasoline motors with 200 HPs and above and electric outboard motors was in smooth progress.Meanwhile, Parsun Power filed applications for two invention patents and five patents for utility models. In termsof production and operation, Parsun Power constantly tapped into the existing capacity potential, hit another recordhigh in the output value of outboard motors, improved the automation level of the production, and effectivelycontrolled the operational cost.
3. The division of overall solutions for intelligent corrugated packaging plantsAs the undertaking unit of the Company's business of overall solutions for intelligent corrugated packagingplants, in H1 of 2022, the subsidiary Dongfang Digicom successfully sold the solutions with independent intellectualproperty rights and completed the installation, implementation, and commissioning of the solutions on theproduction lines of potential customers. The solutions can be sold along with the Company's corrugated box printingand packaging line machinery, to help customers of the downstream industry improve the automation level,operational efficiency, and production quality of production lines.
During the Reporting Period, the product R&D of Dongfang Digicom was sped up. The applications for the11 software copyrights, invention patents and patents for utility models submitted were processed. Besides,Dongfang Digicom obtained five certificates of software copyrights and completed the development of more than40 R&D projects in H1.
4. The epitaxial division
During the Reporting Period, the main progress of the Company's epitaxial development business is as follows:
(1) Equity investment in Shenzhen Wonder
During the Reporting Period, Dongfang Precision carried out a direct equity investment in Shenzhen Wonderwith its own funds and obtained 51% of the shares of Shenzhen Wonder. The total investment reached RMB173.8million. Shenzhen Wonder completed the procedures for business information change and filing of this transactionin June 2022. After the completion of the asset delivery and transfer, Shenzhen Wonder was included in theconsolidated statements of Dongfang Precision. For more details, please see the Voluntary Announcement on theEquity Investment in Shenzhen Wonder released by the Company on 15 June 2022.
(2) Investment in Beijing Sinoscience Fullcryo Technology Co., Ltd.
During the Reporting Period, the wholly owned subsidiary Yineng Investment indirectly invested in BeijingSinoscience Fullcryo 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 andobtained non-controlling interests of the two companies.Fullcryo is a high-tech enterprise founded by the Technical Institute of Physics and Chemistry, CAS. It focuseson the strategic guarantee of national big science research projects, the independent and comprehensivedevelopment and utilization of strategic helium resources and the development needs of the green hydrogen energyindustry. Based on the decades of the large-scale cryogenic R&D led by two generations of academicians of theTechnical Institute of Physics and Chemistry, CAS, and with the research achievements of the two phases of nationalprojects for key scientific machinery at the core, Fullcryo has attracted famous experts and scholars and marketingteams at home and abroad and used the core technologies with a working temperature of 20K to 2K (-253°C to -271°C) to provide large-scale cryogenic refrigeration machinery with liquid helium and liquid helium temperaturezones, hydrogen liquefaction machinery, LNG-BOG helium extraction machinery, advanced cryogenic machineryfor the separation and purification of rare gases (such as neon, helium, krypton and xenon), solutions for hydrogenenergy application systems, engineering of highly pure rare gases and industrial gases, and other services. Fullcryois a national supplier in China with independent intellectual property rights, whose services cover the design andmanufacturing of large-scale cryogenic refrigeration machinery, cryogenic system engineering, and industrial gasprovision. Being a subsidiary controlled by Fullcryo, Sinoscience Fullcryo (Zhongshan) Equipment ManufacturingCo., Ltd. is the only advanced machinery manufacturer that owns independent intellectual property and technologiesfor large-scale cryogenic machinery with a working temperature of below 20K (-253°C to -271°C). It is also theonly manufacturer and service provider worldwide that can simultaneously provide the non-standard customization,leasing, and entrusted operation of large-scale cryogenic machinery with working temperatures of 4.2K (-269°C)and 20K (-253°C).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 the
professional opinions of the independent auditor.
(3) Investment in Yuze Semiconductor (Yunnan) Co., Ltd.
During the Reporting Period, the wholly owned subsidiary Yineng Investment indirectly invested in YuzeSemiconductor (Yunnan) Co., Ltd. (referred to as "Yunnan Yuze" in this Report) by making a capital contributionto a limited partnership. Yunnan Yuze mainly engages in the manufacturing of photovoltaic silicon wafers. It is aleading manufacturer of N-type photovoltaic silicon wafers and silicon rods. It has been exploring the R&D andmanufacturing of N-type single-crystal silicon wafers since 2019. With significant first-mover advantages intechnology and talent reserves as well as customer expansion, Yunnan Yuze has created a good image in the industryas a professional supplier of N-type single-crystal silicon wafers.
As one of the limited partners of the partnership, Yineng Investment accounts for 39.37% of the total capitalcontributions. By the agreement on the fund investment decisions in the partnership agreement, the limited partnerYineng Investment does not participate in the operation of the Fund Investment Decision Committee and does nothave veto power over fund investment decisions. Considering the partnership's agreements on investmentorientation, investment decisions, operation and management, income apportionment, and loss bearing, and by therelated regulations in the Accounting Standard for Business Enterprises, the Company does not control funds, sofunds are not included in the consolidated statements of the Company. They will be presented under the "Other non-current financial assets--Financial assets at fair value through profit or loss" item in the consolidated financialstatements.
(4) Impacts of the above-mentioned epitaxial business on the Company
The business purpose of Yineng Investment, the subsidiary, is to focus on the industries related to its principalbusiness and seek investment opportunities in high-end machinery manufacturing and other industries that thecountry encourages to develop in the "14th Five-Year Plan" while carrying out industrial mergers and acquisitionsbased on industries, assisted by capital, guided by its strategic planning, and driven by circulation. It aims to expandthe development space for the Company in emerging industries. It shares profits of the investees in the process oftheir growth and development, thus boosting the Company’s overall profitability.
The aforesaid equity investments do not constitute related-party transactions or major assets restructuring andexert no significant impacts on the Company's operating results or financial condition in the Reporting Period.(III) Capital operation: The capabilities to create value and seek returns for shareholders wereimproved
1. The application for the spin-off listing of the subsidiary Parsun Power on the ChiNext board has beenaccepted by the Shenzhen Stock Exchange for review.During the Reporting Period, the preliminary plan for the spin-off listing of the subsidiary Parsun Power onthe ChiNext board of the Shenzhen Stock Exchange was approved by the Company’s Board of Directors and generalmeetings of shareholders. Parsun Power has filed the application materials to the Shenzhen Stock Exchange for itsinitial public offering on the ChiNext board. It received in June 2022 from the Shenzhen Stock Exchange theNotification on the Acceptance for Review of the Application Materials of Suzhou Parsun Power Machine Co., Ltd.for Its Initial Public Offering on the ChiNext Board (SZSS [2022] No. 189).
2. The share repurchase moved on as scheduled.
During the Reporting Period, the Company carried on with the 2021 share repurchase plan. During the periodfrom October 2021 to 30 June 2022, the Company repurchased a total of approximately 106.6521 million shares (oraround 8.01% of the Company’s total share capital) through centralized bidding. With the highest trading pricebeing RMB6.30/share and the lowest being RMB3.59/share, the total amount paid was approximately RMB551million (exclusive of transaction costs). The Company will carry forward the share repurchase plan and fulfil itsobligation of information disclosure in a timely manner as it does so.According to the share repurchase plan, no lower than 80% of the repurchased shares will be retired to reducethe Company's registered capital while no more than 20% will be used for equity incentives or employee stockownership plans.
3. Equity incentives were steadily promoted to stimulate the internal power
During the Reporting Period, the Company launched the 2022 Restricted Share Incentive Plan. In April 2022,the first grant was completed, where 2,650,000 restricted shares were granted to seven key managerial, technological,and business personnel. In June 2022, as the unlocking conditions were met for the second unlocking period of thefirst grant under the 2022 Restricted Share Incentive Plan, a total of 8,620,000 restricted shares of 37 awardees wereunlocked for public trading.
Steady promotion of equity incentives is beneficial to the Company's sustainable and healthy development andgathering of internal power, to "stabilize the team, boost the morale, gather talents and improve performance". Byclosely binding the interests of the Company's key personnel with the Company's future performance and theimprovement of the capability to seek returns for shareholders, the Company will see continuous improvement in
its business performance and the ability to create value.
(IV) Analysis of key financial indicators
YoY changes in major financial data
Unit: RMB yuan
| 2022H1 | 2021H1 | Change (%) | Cause of change | |
| Operating revenue | 1,535,615,634.26 | 1,400,558,964.18 | 9.64% | Mainly due to the increase in sales for the period. |
| Operating cost | 1,134,044,266.22 | 991,455,474.86 | 14.38% | Mainly due to the increase in sales for the period. |
| Selling expenses | 62,093,800.66 | 68,550,561.32 | -9.42% | Mainly due to the decrease in commissions and agency service fees for the period. |
| Administrative expenses | 133,292,392.91 | 129,761,353.56 | 2.72% | No significant changes. |
| Finance costs | -8,856,622.89 | -1,626,574.56 | -444.50% | Mainly due to the change in foreign exchange gain for the period. |
| Income tax expenses | 31,123,723.82 | 38,037,005.48 | -18.18% | Mainly due to the decrease in income tax payable for the period. |
| R&D expenses | 44,132,225.30 | 52,906,052.88 | -16.58% | Mainly due to the decrease in investment in research and development for the period. |
| Net cash generated from/used in operating activities | 152,250,706.73 | 206,023,828.25 | -26.10% | Mainly due to the increase in taxes and fees paid during the period. |
| Net cash generated from/used in investing activities | -171,226,100.99 | 1,200,263,426.07 | -114.27% | Mainly due to the payment for the acquisition of equity interest in Shenzhen Wonder during the period. |
| Net cash generated from/used in financing activities | -9,276,543.86 | -700,252,772.58 | 98.68% | Mainly due to the combined effect of the payment for share repurchase and the recovery of loan deposits during the period. |
| Net increase in cash and cash equivalents | -31,580,854.21 | 682,597,714.47 | -104.63% | Mainly due to the inflow from operating activities and outflow from investing activities during the period. |
Significant changes in the composition or source of profits during the reporting period.
□ Applicable √ Not applicable
There is no significant change in the composition or source of profits during the reporting period.
Breakdown of Operating Revenue
Unit: RMB yuan
| 2022H1 | 2021H1 | Change | |||
| Operating revenue | As a % of total operating revenue (%) | Operating revenue | As a % of total operating revenue (%) | ||
| Total | 1,535,615,634.26 | 100% | 1,400,558,964.18 | 100% | 9.64% |
| By operating division | |||||
| Intelligent manufacturing | 1,535,615,634.26 | 100.00% | 1,400,558,964.18 | 100.00% | 9.64% |
| By product category | |||||
| Complete lines and individual machine units for intelligent corrugated packaging machinery | 719,585,213.35 | 46.86% | 747,290,015.07 | 53.36% | -3.71% |
| Parts for intelligent corrugated packaging machinery | 431,002,865.60 | 28.07% | 300,176,099.08 | 21.43% | 43.58% |
| Software and services related to intelligent corrugated packaging machinery | 102,910,890.21 | 6.70% | 128,676,852.98 | 9.19% | -20.02% |
| Outboard motors and general utility small gasoline motors | 282,116,665.10 | 18.37% | 224,415,997.05 | 16.02% | 25.71% |
| By operating segment | |||||
| Mainland China | 140,124,894.68 | 9.12% | 331,950,181.68 | 23.70% | -57.79% |
| Other countries and regions | 1,395,490,739.58 | 90.88% | 1,068,608,782.50 | 76.30% | 30.59% |
Operating Division, Product Category or Operating Segment Contributing over 10% of Operating Revenue or Operating Profit
√ Applicable □ Not applicable
Unit: RMB yuan
| Operating revenue | Cost of sales | Gross profit margin | YoY change in operating revenue (%) | YoY change in cost of sales (%) | YoY change in gross profit margin (%) | |
| By operating division | ||||||
| Intelligent manufacturing | 1,535,615,634.26 | 1,134,044,266.22 | 26.15% | 9.64% | 14.38% | -3.06% |
| By product category | ||||||
| Intelligent corrugated packaging machinery | 1,253,498,969.16 | 911,985,158.44 | 27.24% | 6.58% | 11.62% | -3.29% |
| Outboard motors and general utility small gasoline motors | 282,116,665.10 | 222,059,107.78 | 21.29% | 25.71% | 27.32% | -0.99% |
| By operating segment | ||||||
| Mainland China | 140,124,894.68 | 98,415,710.91 | 29.77% | -57.79% | -58.32% | 0.90% |
| Other countries and regions | 1,395,490,739.58 | 1,035,628,555.31 | 25.79% | 30.59% | 37.11% | -3.53% |
When the statistical caliber of the company's main business data is adjusted in the reporting period, the company's last issue of themain business data is adjusted according to the caliber at the end of the reporting period.
□ Applicable √ Not applicable
Any over 30% YoY movements in the data above and why:
□ 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 | -222,580.97 | -0.12% | No significant impact. | Yes |
| Gain/loss on changes in fair value | 24,927,586.43 | 13.08% | Mainly due to the increase in fair value changes recognized from the implementation of securities investments during the period. | Yes |
| Asset impairment loss | -6,154,706.43 | -3.23% | Mainly due to the provision for decline in value of inventories during the period. | Not |
| Non-operating income | 1,033,996.47 | 0.54% | No significant impact. | Not |
| Non-operating expenses | 714,629.11 | 0.37% | No significant impact. | Not |
V Analysis of Assets and Liabilities
1. Significant Changes in Asset Composition
Unit: RMB yuan
| 30 June 2022 | 31 December 2021 | Change in percentage (%) | Reason for any significant change | |||
| Amount | As a % of total assets | Amount | As a % of total assets | |||
| Cash and bank balances | 1,242,403,906.96 | 19.12% | 1,664,336,339.35 | 26.18% | -7.06% | Mainly due to the share repurchase, acquisition of Shenzhen Wonder and payment for foreign investment during the period. |
| Accounts receivable | 753,538,571.88 | 11.60% | 741,135,648.09 | 11.66% | -0.06% | No significant change. |
| Contract assets | 6,212,959.35 | 0.10% | 24,414,117.64 | 0.38% | -0.28% | No significant change. |
| Inventories | 1,180,552,585.86 | 18.17% | 867,280,013.47 | 13.64% | 4.53% | Mainly due to the increase in sales orders, resulting in the increase in inventory reserve. |
| Investment property | No significant change. | |||||
| 30 June 2022 | 31 December 2021 | Change in percentage (%) | Reason for any significant change | |||
| Amount | As a % of total assets | Amount | As a % of total assets | |||
| Long-term equity investments | 86,076,091.60 | 1.32% | 84,777,596.67 | 1.33% | -0.01% | No significant change. |
| Fixed assets | 540,843,950.15 | 8.32% | 544,180,159.09 | 8.56% | -0.24% | No significant change. |
| Construction in progress | 36,036,409.77 | 0.55% | 12,298,259.58 | 0.19% | 0.36% | No significant change. |
| Right-of-use assets | 78,147,661.94 | 1.20% | 80,386,832.91 | 1.26% | -0.06% | No significant change. |
| Short-term borrowings | 67,132,224.05 | 1.03% | 228,312,880.73 | 3.59% | -2.56% | Mainly due to partial repayment of short-term loans in the current period. |
| Contract liabilities | 719,487,278.58 | 11.07% | 405,842,932.51 | 6.38% | 4.69% | Manly due to the increase in sales orders and the increase in advance receipts during the period. |
| Long-term borrowings | 72,183,710.90 | 1.11% | 325,026,188.49 | 5.11% | -4.00% | Mainly due to the reclassification of borrowings due within one year during the period. |
| Lease liabilities | 56,626,311.25 | 0.87% | 65,213,555.87 | 1.03% | -0.16% | No significant change. |
2. Major Assets Overseas
√ 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 | 661,616,519.72 | Italy | Producing and marketing by itself | Operation management | Good | 17.08% | Not |
| 100% interest of EDF S.R. L | M&A | 22,365,116.93 | Italy | Producing and marketing by itself | Operation management | Good | 0.58% | Not |
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2022
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) | 775,249,020.94 | 4,748,245.04 | 2,902,010,158.14 | 2,878,253,631.70 | 14,157,091.56 | 817,910,883.98 | ||
| 2. Derivative financial assets | 12,936,500.63 | -256,707.60 | -208,978.46 | 12,470,814.57 | ||||
| Subtotal of financial assets | 788,185,521.57 | 4,491,537.44 | 2,902,010,158.14 | 2,878,253,631.70 | 13,948,113.10 | 830,381,698.55 | ||
| Other non-current financial assets | 162,523,519.41 | 487,879.55 | 108,000,000.00 | -1,210,848.34 | 269,800,550.62 | |||
| Total of the above | 950,709,040.98 | 4,979,416.99 | 3,010,010,158.14 | 2,878,253,631.70 | 12,737,264.76 | 1,100,182,249.17 | ||
| Financial liabilities | 246,925,243.48 | 3,499,085.75 | 250,424,329.23 | |||||
Particulars about other changes:
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 2022
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 | 14,680,985.43 | Used as deposits to obtain bank acceptance bills and letters of guarantee. |
Fixed assets
| Fixed assets | 4,308,785.21 | Used to obtain bank loans for subsidiaries. |
| Other non-current assets due within one year | 305,225,000.00 | Used as deposits for loans for subsidiaries. |
| Total | 324,214,770.64 |
VI Analysis of Investments Made
1. Total Investment Amount
√ Applicable □ Not applicable
| Total investment amount in 2022H1 (RMB) | Total investment amount in 2021H1 (RMB) | Change (%) |
| 1,227,440,484.73 | 1,608,856,907.68 | -23.71% |
2. Significant Equity Investments Acquired in the Reporting Period
√Applicable □ Not applicable
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2022
Unit: RMB yuan
| Name of investee company | Main business | Investment mode | Investment amount | Shareholding ratio | Source of funds | Cooperating party | Investment period | Type of product | Progress as of the balance sheet date | Expected return | Gain or loss of investment for the period | Whether involved in litigation | Date of disclosure (if any) | Index of disclosure (if any) |
| Shenzhen Wonder | Production, sales, R&D and technical services of environmentally friendly packaging and printing equipment and accessories | M&A | 173,800,000.00 | 51.00% | Self-funded | Shenzhen Wonder Business Service Partnership (Limited Partnership) and three persons, including Zhao Jiang, Li Yajun and Luo Sanliang | Indefinite | Shares | Completion of transfer | 0.00 | 789,556.27 | None | June 05,2022 | Published on Cninfor.com, No. 2022-049 |
| 合计 | -- | -- | 173,800,000.00 | -- | -- | -- | -- | -- | -- | 0.00 | 789,556.27 | -- | -- | -- |
3. Significant Non-Equity Investments of which the Acquisition Was Uncompleted in the Reporting Period
□ Applicable √ Not applicable
4. Financial Investments
(1) Securities Investments
√ Applicable □ Not applicable
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2022
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 listed stocks | 688567 | Farasis Energy | 0.00 | Fair value | 0.00 | -4,449,554.36 | 30,265,333.10 | 262,240.00 | -4,454,321.02 | 25,548,772.08 | Financial assets held for trading | Self-funded | |
| Domestically listed stocks | 002407 | Do-Fluoride | 0.00 | Fair value | 0.00 | 15,004,678.74 | 69,067,160.45 | 0.00 | 15,004,678.74 | 84,071,839.19 | Financial assets held for trading | Self-funded | |
| Domestically listed stocks | 300567 | Jingce Electronic | 0.00 | Fair value | 0.00 | -13,454,150.92 | 74,055,562.31 | 2,317,467.00 | -13,798,255.31 | 57,939,840.00 | Financial assets held for trading | Self-funded | |
| Domestically listed stocks | 600760 | Avic Sac | 0.00 | Fair value | 0.00 | 11,401,886.03 | 71,584,544.20 | 26,732,226.00 | 14,336,694.80 | 59,189,013.00 | Financial assets held for trading | Self-funded | |
| Domestically listed stocks | ---- | Other stocks | 0.00 | Fair value | 0.00 | 0.00 | 845,037,558.08 | 840,359,387.98 | -4,678,170.10 | 0.00 | Financial assets held for trading | Self-funded | |
| Trust products | ---- | ---- | 6,631,573.01 | Fair value | 6,631,573.01 | -10,883.33 | 0.00 | 0.00 | 3,125,602.67 | 80,236.57 | 3,586,206.91 | Financial assets held for trading | Self-funded |
| Funds | ---- | ---- | 628,007,924.74 | Fair value | 628,007,924.74 | -4,386,594.45 | 0.00 | 270,000,000.00 | 404,162,537.66 | 10,175,943.21 | 504,021,330.29 | Financial assets held for trading | Self-funded |
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2022
| Others | ---- | ---- | 140,609,523.19 | Fair value | 140,609,523.19 | 642,863.33 | 0.00 | 1,542,000,000.00 | 1,601,294,170.39 | 2,238,529.71 | 83,553,882.51 | Financial assets held for trading | Self-funded |
| Total | 775,249,020.94 | -- | 775,249,020.94 | 4,748,245.04 | 0.00 | 2,902,010,158.14 | 2,878,253,631.70 | 18,905,336.60 | 817,910,883.98 | -- | -- | ||
| Disclosure date of the board announcement approving the securities investments | On 14 March 2022, the Board of Directors of the Company held a meeting to consider and approve the proposal relating to securities investment, with the securities investment valid for 12 months from the date of approval at the shareholders' meeting and the announcement date of the Board of Directors' resolution was 15 March 2022. | ||||||||||||
| Disclosure date of the general meeting announcement approving the securities investments (if any) | On 8 April 2022, the shareholders' meeting was held to consider and approve the proposal relating to securities investment, and the announcement date of the resolution of the shareholders' meeting was 11 April 2022. | ||||||||||||
(2) Investments in Derivative Financial Instruments
√ 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 |
| Huatai Futures Co., Ltd. | N/A | No | Aluminum futures | 0 | 2022-01-01 | 2022-06-30 | 0 | 114.65 | 108.83 | 0 | 0 | -5.82 | |
| Bank | N/A | No | Forward forex settlement and sale contract | 3,312.03 | 2022-01-01 | 2022-06-30 | 3,312.03 | 2,137.84 | 5,030.52 | 0 | 419.35 | 0.12% | -183.10 |
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2022
| 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 |
| Total | 3,312.03 | -- | -- | 3,312.03 | 2,252.49 | 5,139.35 | 0.00 | 419.35 | 0.12% | -188.92 | |||
| 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) | 20 April 2022 | ||||||||||||
| Disclosure date of the announcement about the general meeting’s consent for the derivative investment (if any) | 7 May 2022 | ||||||||||||
| 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 Company's financial derivative transaction business is mainly intended to avert and prevent risks arising from fluctuations in exchange rates and commodity prices. 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 analysis of fair value of derivatives | 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. | ||||||||||||
| 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 | N/A | ||||||||||||
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2022
| 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 |
| Special opinions expressed by independent directors concerning the Company's derivatives investment and risk control | 1. Based on the realities and normal needs of routine operation, the Company and its subsidiaries intend to conduct the financial derivative transaction business, for the purposes of reducing the risks arising from fluctuations in exchange rates and prices of related commodities to the principal business of the Company and decreasing the impacts of market fluctuations on the principal business of the Company and its subsidiaries. By giving full play to the hedging function of financial derivative instruments, the operating results and finance of the Company and its subsidiaries are increasingly robust. 2. The Company has prepared the rules on the internal control management of the financial derivate transaction business by relevant regulatory prescriptions, which is conducive to standardizing and strengthening the risk control management of financial derivative transactions. The Board of Directors of the Company has performed the necessary review and approval procedures for this matter in a legal and rule-compliant manner. No illegalities or violations of regulations and Articles of Association have occurred. 3. In strict compliance with the Stock Listing Rules of the Shenzhen Stock Exchange, the Guideline No. 7 of the Shenzhen Stock Exchange for the Self-regulation of Listed Companies--Transactions and Related-party Transactions, and other relevant laws and regulatory guidelines, the Company shall make prudent decisions and conduct prudent management, inspections and monitoring of the financial derivative transactions of the Company and its subsidiaries, strictly control risks, and promptly discharge the information disclosure duty. 4. We hold that the financial derivative transaction business of the Company and its subsidiaries does not prejudice the interests of the Company and all shareholders, particularly not impair the interests of non-controlling shareholders. Therefore, we approve this matter and suggest submitting it to the General Meeting of Shareholders of the Company for deliberation. | ||||||||||||
5. Use of Raised Funds
□ Applicable √Not applicable
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
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 corrugator lines and parts, as well as provision of after-sales services | EUR1.56 million | 2,189,940,321.16 | 661,616,519.72 | 929,352,568.31 | 100,019,034.32 | 74,778,974.74 |
| Shunyi Investment | Subsidiary | Production of general utility small gasoline motors, shipboard power | RMB10 million | 499,004,539.88 | 278,520,604.89 | 282,116,665.10 | 34,569,321.53 | 30,278,194.96 |
| Name | Relationship with the Company | Principal activities | Registered capital | Total assets | Net assets | Operating revenue | Operating profit | Net profit |
| (outboard motors) and its accessories, as well as provision of after-sales service |
Subsidiaries acquired or disposed of in the Reporting Period:
□ Applicable √ Not applicable
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" or the "Partnership") with AVIC Innovation Capital Management Co.,Ltd. The Company, as the sole LP of the Fund, subscribed for the Partnership's contribution share ofRMB20,000,000. The Fund is a special fund which is to invest in the equity of Sichuan Dajin Stainless Steel Co.,Ltd. (now renamed as Chengdu Dajin 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 businessnature, the Company provides the absolute majority of the capital of the Tianjin Hangchuang Fund, so it isreasonable to include the 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 of
Dongfang 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 Risks Faced by the Company 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 H1 2022, the euro depreciated constantly; the US dollar becamerobust after it entered the interest rate hike cycle, and the US Dollar Index has hit a record high since 2002. The bi-directional fluctuations in the two currencies have exerted impacts on the Company's consolidated statements inaddition to the principal business.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. Risk of fluctuations in the prices of Energy ＆ Raw materials
The raw materials required for the Company's corrugated packaging machinery mainly include various typesof steel plates, steel parts and electrical parts. In 2021, the prices of iron ore and base metals in bulk commoditieswere once highly volatile, resulting in certain fluctuations in the costs of the Company's main business. In the firsthalf of 2022, the price of energy and commodity in international markets also experienced some degree of volatilitydue to the Russian-Ukrainian conflict, geopolitical and inflationary influences.
Countermeasures:
The Company will pay attention to the market prices of steel and other important raw materials constantly, and
conduct dynamic analysis and judgment; in terms of procurement, it will strengthen proactive management andcollaboration by adopting countermeasures such as proper adjustment of payment settlement and entering into long-term purchase agreements for important raw materials to control the fluctuation of procurement prices; it will givefull play to the Group's internal allocation ability brought about by the globalization of business assets, and reachallocation efficiency and reduce overall costs through rational planning and management of internal transactionsand sharing of high-quality supply chain resources.
3. Integration risk due to epitaxial business
Epitaxial business includes industrial M&A, equity investment and other forms. The Company will arrangehigh-end equipment manufacturing through equity control, investment, and other different forms, expecting togradually develop new performance growth points in the future.In the next few years, the Company will continue to expand upstream and downstream in the industry chaininvolving its core business in the world and arrange in the key industries supported by the national 14th Five-YearPlan, such as high-end equipment manufacturing, artificial intelligence, biomedicine, and big consumption. Amongthe business entities of its subordinate companies, there are old European companies with nearly 100 years of historyand profound track record, as well as international companies with multinational distribution of business and assetsand customers around the world, and domestic private companies with roots in the Chinese market and years ofhard-working to be leaders in their niche industries.
During the integration, the new member companies are different from Dongfang Precision in culturalbackground, language differences, business practices, corporate culture, laws and regulations, fiscal and tax policies,internal management mechanisms, etc., which bring about certain challenges to the post-investment managementand integration work.
Countermeasures:
? Promote the implementation of the "globalization" strategy and bring in talents capable ofhandling international business.? Promote the implementation of the "a wealth of talents" strategy, improve the synthetic abilityof the management team and the backbone team of key business, and build a prudent backbone team witha broad vision that highly identifies with the purpose and culture of the Company, and is capable ofwinning battles.? Promote the "synergy" strategy and seek common ground with an open mind on the premise of
"mutual respect and trust”.
? Carry out the post-investment management mechanism of "combination of strategic control +authorized management" to form a unique and effective integration and control mode in the run-in process,which reaches a better industrial synergy and the positive development of each business entity.
4. 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.Based on its own attributes, 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:
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.
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2022
Part IV Corporate Governance
I 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 First Extraordinary General Meeting of 2022 | Extraordinary General Meeting | 33.10% | 14 March 2022 | 15 March 2022 | 1. The Proposal on the 2022 Restricted Share Incentive Plan (Draft) and Its Summary was approved. 2. The Proposal on the Appraisal Management Methods for the 2022 Restricted Share Incentive Plan was approved. 3. The Proposal on the Request for the General Meeting to Authorize the Board of Directors to Handle Matters in Relation to the 2022 Restricted Share Incentive Plan was approved. |
| The 2021 Annual General Meeting | Annual General Meeting | 32.52% | 8 April 2022 | 11 April 2022 | 1. The Proposal on the 2021 Work Report of the Board of Directors (including the 2021 Work Report of Independent Directors was approved. 2. The Proposal on the 2021 Work Report of the Supervisory Committee was approved. 3. The Proposal on the 2021 Annual Report and Its Summary was approved. 4. The Proposal on the 2021 Final Financial Accounts was approved. 5. The Proposal on the 2022 Budget was approved. 6. The Proposal on the 2021 Final Dividend Plan was approved. 7. The Proposal on the 2021 Internal Control Assessment Report was approved. 8. The Proposal on Intension to Appoint the Independent Auditor for 2022 was approved. 9. The Proposal on the Use of Own Funds for Entrusted Wealth Management in 2022 was approved. 10. The Proposal on the Compliance with Applicable Laws and Regulations of the Spin-off Listing of the Subsidiary Suzhou Parsun Power Machine Co., Ltd. on the ChiNext Board was approved. 11. The Proposal on the Plan for the Spin-off Listing of the Subsidiary Suzhou Parsun Power Machine Co., Ltd. on the ChiNext Board was approved. 12. The Proposal on the Preliminary Plan for the Spin-off Listing of the Subsidiary Suzhou Parsun |
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2022
| Power Machine Co., Ltd. on the ChiNext Board was approved. 13. The Proposal on the Compliance with the Spin-off Rules for Listed Companies (Trial) of the Spin-off Listing of the Subsidiary Suzhou Parsun Power Machine Co., Ltd. on the ChiNext Board was approved. 14. The Proposal on the Benefit of the Spin-off Listing of the Subsidiary Suzhou Parsun Power Machine Co., Ltd. on the ChiNext Board in Protecting the Legitimate Interests of Shareholders and Creditors was approved. 15. The Proposal on the Company Maintaining Independence and Going Concern Capability was approved. 16. The Proposal on Suzhou Parsun Power Machine Co., Ltd. Possessing Due Capability of Operation Compliance was approved. 17. The Proposal on the Statement Regarding the Completeness and Compliance of the Statutory Procedures in the Spin-off and the Validity of the Legal Documents Filed was approved. 18. The Proposal on the Purpose, Commercial Rationality, Necessity and Feasibility Analysis of the Spin-off was approved. 19. The Proposal on the Request for the General Meeting to Authorize the Board of Directors and Its Authorized Personnel to Handle Matters in Relation to the Spin-off Listing was approved. | |||||
| The Second Extraordinary General Meeting of 2022 | Extraordinary General Meeting | 32.57% | 6 May 2022 | 7 May 2022 | 1. The Proposal on the Conducting of Financial Derivatives Trading was approved. 2. The Proposal on the Revision of the Articles of Association was approved. 3. The Proposal on the Revision of the Rules of Procedure for General Meeting was approved. 4. The Proposal on the Revision of the Rules of Procedure for the Board of Directors was approved. 5. The Proposal on the Revision of the Rules of Procedure for the Supervisory Committee was approved. 6. The Proposal on the Revision of the Management Rules for Securities Investment was approved. 7. The Proposal on the Formulation of the Management Rules for Financial Derivatives Trading was approved. |
2. Extraordinary General Meetings Convened at the Request of Preference Shareholders with Resumed Voting Rights
□ Applicable ? Not applicable
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2022
II Changes of Directors, Supervisors and Senior Management
? Applicable □ Not applicable
| Name | Office title | Type of change | Date | Reason |
| Feng Jia | Board Secretary | Appointed | 14 March 2022 | Internal reassignment |
| Zhou Wenhui | Board Secretary | Removed | 14 March 2022 | Internal reassignment |
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2022
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 applicableTo 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. The plan was approved at the First Extraordinary GeneralMeeting of 2020 on 27 March 2020. For details, see the Summary of the 2020 Restricted Share Incentive Plandisclosed 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. The plan was approved at the First Extraordinary General Meeting of 2022 on 14 March 2022. For details,see the 2022 Restricted Share Incentive Plan disclosed by the Company on www.cninfo.com.cn dated 15 March2022.
1. On 25 February 2022, the Proposal on the Satisfaction of the Unlocking Conditions for the First UnlockingPeriod for the Reserved Restricted Shares under the 2020 Restricted Share Incentive Plan was approved at the 13th(Extraordinary) Meeting of the 4th Board of Directors and the 10th (Extraordinary) Meeting of the 4th SupervisoryCommittee. On 9 March 2022, 848,000 shares held by 18 awardees were unlocked for public trading in the firstunlocking period for the reserved restricted shares under the 2020 Restricted Share Incentive Plan.
2. On 21 March 2022, the Proposal on the First Grant of Restricted Shares to Awardees under the 2022Restricted Share Incentive Plan was approved at the 15th (Extraordinary) Meeting of the 4th Board of Directors.The date for the first grant was 21 March 2022. In April 2022, the Company completed the ownership transfer ofthe 2.65 million restricted shares to 7 awardees at RMB1.00/share, the listing date of which is 28 April 2022. Fordetails, see the Announcement on the Completion of the Ownership Transfer of the First Grant under the 2022Restricted Share Incentive Plan disclosed by the Company on www.cninfo.com.cn dated 29 April 2022.
3. On 17 June 2022, the Proposal on the Satisfaction of the Unlocking Conditions for the Second UnlockingPeriod for the First Grant under the 2020 Restricted Share Incentive Plan was approved at the 17th (Extraordinary)Meeting of the 4th Board of Directors and the 14th (Extraordinary) Meeting of the 4th Supervisory Committee. On24 June 2022, 8,620,000 shares held by 37 awardees were unlocked for public trading in the second unlockingperiod for the first grant under the 2020 Restricted Share Incentive Plan.
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2022
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 2022
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 by nationalenvironmental 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
II Social ResponsibilitiesThe Company attached importance to fulfil social responsibility in daily operations, intending to promote theharmony and co-prosperity between it and parties related to its interests. The Company also took active measuresin the protection of the rights and interests of shareholders, creditors, employees, suppliers, customers andconsumers, environmental protection, sustainable development, public relations, and social public welfareundertakings, and strived to maximize comprehensive social benefits including the sustainable development of itself.
(1) Corporate governance: During the Reporting Period, the Company strictly abided by the Company Law,the Securities Law and Code of Corporate Governance for Listed Companies, continued to refine the corporategovernance structure, improve the internal control system, formed the decision-making system comprising theShareholders' General Meeting, the Board of Directors, the Supervisory Committee and the Management, and timelyfulfilled its obligation of information disclosure according to laws and regulations and effectively safeguarded therights and interests of all shareholders.
(2) Rights and interests of employees: The Company provided employees with welfare and care by providingholiday gifts and holding employee birthday parties, annual meetings and team building activities, improvedemployees' professional competence by offering regular or irregular training to employees in the headquarters anddomestic and foreign branches and subsidiaries, and continued to improve the competitive comprehensiveremuneration system to retain and attract talents needed for the Company's sustainable development.
(3) Relationship with customers and suppliers: long adhering to the principle of "honest business" and "mutualbenefit and win-win", the Company took the initiative to construct and develop strategic partnership with suppliersand customers and jointly built a platform of trust and cooperation, and earnestly fulfilled its social responsibilitiesto suppliers, customers, and consumers. The Company has been well performing contracts with suppliers andcustomers and ensuring that the rights and interests of all parties are highly valued and duly protected.
(4) Production safety: The Company strictly abided by the Labour Law and the Labour Contract Law, adhered
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2022
to the "people-oriented" principle, attached importance to the needs of employees, strived to improve the workingand living environments of employees, and has set up a labour union to effectively protect the interests of employees.It also provided labour protection supplies according to the risk factors of different posts, organized occupationalhealth examinations for employees (before taking the post, on the post and before leaving the post), and boughtsafety liability insurance for employees on highly risky posts. In 2020, Dongfang Precision extended its Grade IIProduction Safety Standardization Certificate for Machinery Enterprises, and Parsun Power and Fosber Asia weregranted the Grade III Production Safety Standardization Certificate for Machinery Enterprises.
(5) Environmental protection: First, Dongfang Precision was granted the National Pollutant Discharge Permitand met post-licensing regulatory requirements as required. Second, Dongfang Precision commissioned thequalified third-party environmental protection agencies to compile the Contingency Plans for EnvironmentalEmergencies, and commission a third-party testing agency to take samples every quarter to monitor and issue third-party test reports, and transfer hazardous waste in strict accordance with national requirements.Third, the Company’s environmental protection facilities passed the qualification re-examination onOHSAS18001:2007 Occupational Health and Safety Management Systems and ISO14001:2005 EnvironmentalManagement System. Parsun Power which is a subsidiary of the Company is not in the heavy pollution industry, itsproduction process has less impact on the environment, and it has purchased complete environmental protectionequipment, which are in normal operation and can meet the daily pollutant treatment requirements, that leads noviolation of environmental protection related laws and administrative regulations and receive administrativepenalties.
6) Anti-fraud: The Group complied a thorough internal authorization manual that detailed provisions oninternal authorization process of major matters to ensure appropriate internal control and reduce the risk of fraud.To create a fair, just, honest, and non-corrupt internal business environment and strengthen internal monitoring, theCompany also established and launched the anti-fraud reporting platform to encourage employees to report fraudfindings.
(7) Social honour: Dongfang Precision won honorary titles including "Top 500 Private ManufacturingEnterprises in China", "Leading Enterprises in Subdivided Industries in Foshan", and "Guangdong ProvincialIndustrial Design Center "; Fosber Asia won honorary titles including "Guangdong Demonstration Enterprise ofIntellectual Property". Parsun Power is a national "small giant" enterprise, a national high-tech enterprise, anengineering technology research center for outboard engines in Jiangsu Province, an enterprise technology centrerecognized by Jiangsu Province, a leading enterprise in China's internal combustion engine industry and a directorunit of the Small Gasoline Engine Branch of China Internal Combustion Engine Industry Association. The outboardengine of BPS has also won many honors such as the certificate of industrialization demonstration project of nationaltorch plan, innovative product of China machinery industry, famous brand product of Jiangsu province and famousbrand product of Suzhou city.
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2022
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 2022
VII Insolvency and Reorganization
□ Applicable √ Not applicable
No such cases in the Reporting Period.
VIII Legal Matters
Signifiant 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 2022
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.
2. Significant Guarantees
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2022
? 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 guaranteed 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 guaranteed 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) | 30 December 2020 | 17,240.66 | 4 February 2021 | 17,240.66 | Joint liability. Pledge | Deposits | - | From the date when the guarantee took effect to 21 April 2022 | Yes | Not |
| Dongfang Precision (Netherland) | 5 June 2020 | 24,529.40 | 30 June 2020 | 23,478.14 | Joint liability. Pledge | Deposits | N/A | From the date when the guarantee took effect to 29 June 2023 | Not | Not |
| Total approved line for such guarantees in the Reporting Period (B1) | 0 | Total actual amount of such guarantees in the Reporting Period (B2) | 0 | |||||||
| Total approved line for such guarantees at the end of the Reporting Period (B3) | 41,770.06 | Total actual balance of such guarantees at the end of the Reporting Period (B4) | 23,478.14 | |||||||
| Guarantees provided between subsidiaries | ||||||||||
| Obligor | Disclosure date of the guaranteed 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 |
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2022
| QCorr | 15 May 2020 | 2,102.52 | 30 April 2020 | 2,102.52 | Joint liability | N/A | N/A | From the date when the guarantee took effect to 30 June 2024 | Not | Not | |
| 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) | 2,102.52 | Total actual balance of such guarantees at the end of the Reporting Period (C4) | 2,102.52 | ||||||||
| Total guarantee amount (total of the three kinds of guarantees above) | |||||||||||
| Total guarantee line approved in the Reporting Period (A1+B1+C1) | 0 | Total actual guarantee amounts in the Reporting Period (A2+B2+C2) | 0 | ||||||||
| Total approved guarantee line at the end of the Reporting Period (A3+B3+C3) | 43,872.58 | Total actual guarantee balance at the end of the Reporting Period (A4+B4+C4) | 25,580.66 | ||||||||
| Total actual guarantee amount (A4+B4+C4) as % of the Company’s net assets | 7.02% | ||||||||||
| 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) | 2,102.52 | ||||||||||
| Amount by which the total guaranteed amount exceeds 50% of the Company’s net assets (F) | 0 | ||||||||||
| Total of the three amounts above (D+E+F) | 2,102.52 | ||||||||||
| 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
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2022
? 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 | 90,300 | 7,400 | 0 | 0 |
| Securities firm’s wealth management product | Self-funded | 61,000 | 46,000 | 0 | 0 |
| Trust product | Self-funded | 662.07 | 358.62 | 0 | 0 |
| Total | 151,962.07 | 53,758.62 | 0 | 0 | |
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 applicable
4. Other Significant Contracts
□ Applicable ? Not applicable
No such cases in the Reporting Period.XIII Other Significant Events
□ Applicable ? Not applicable
No such cases in the Reporting Period.XIV Significant Events of Subsidiaries
□ Applicable ? Not applicable
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2022
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 | 241,176,130 | 18.10% | 0 | 0 | 0 | -8,293,597 | -8,293,597 | 232,882,533 | 17.48% |
| 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 | 239,736,130 | 17.99% | 0 | 0 | 0 | -7,693,597 | -7,693,597 | 232,042,533 | 17.42% |
| Including: Shares held by domestic corporations | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| Shares held by domestic individuals | 239,736,130 | 17.99% | 0 | 0 | 0 | -7,693,597 | -7,693,597 | 232,042,533 | 17.42% |
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2022
| 1.4 Shares held by overseas investors | 1,440,000 | 0.11% | 0 | 0 | 0 | -600,000 | -600,000 | 840,000 | 0.06% |
| Including: Shares held by overseas corporations | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| Shares held by overseas individuals | 1,440,000 | 0.11% | 0 | 0 | 0 | -600,000 | -600,000 | 840,000 | 0.06% |
| 2. Unrestricted shares | 1,090,762,037 | 81.89% | 0 | 0 | 0 | 8,293,597 | 8,293,597 | 1,099,055,634 | 82.52% |
| 2.1 RMB-denominated ordinary shares | 1,090,762,037 | 81.89% | 0 | 0 | 0 | 8,293,597 | 8,293,597 | 1,099,055,634 | 82.52% |
| 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 | 1,331,938,167 | 100.00% | 0 | 0 | 0 | 0 | 0 | 1,331,938,167 | 100.00% |
Reasons for share changes:
? Applicable □ Not applicable
1. Part of the shares held by Ms. Qiu Yezhi, the director, and CEO of the Company, was unlocked as allowed by the applicable laws and regulationsIn December 2021, Ms. Qiu Yezhi, the director, and CEO of the Company, completed a shareholding reduction. Upon the reduction, she held 23,382,388 sharesin the Company. In January 2022, 5,845,597 shares of hers were unlocked according to the statutory quota of 25% transferable shares in the year.
2. Unlocking for public trading of shares in the first unlocking period for the reserved restricted shares under the Restricted Share Incentive PlanIn March 2022, the shares were unlocked for public trading in the first unlocking period for the reserved restricted shares under the 2020 Restricted Share IncentivePlan, which involved 848,000 shares held by 18 awardees.
3. Completion of the ownership transfer of the first grant under the 2022 Restricted Share Incentive PlanIn April 2022, the Company completed the ownership transfer of the 2.65 million restricted shares in the first grant under the 2022 Restricted Share Incentive Planto 7 awardees.
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2022
4. Unlocking for public trading of shares in the second unlocking period for the first grant under the Restricted Share Incentive PlanIn June 2022, the shares were unlocked for public trading in the second unlocking period for the first grant under the 2020 Restricted Share Incentive Plan, whichinvolved 8,620,000 shares held by 37 awardees.Approval of share changes:
? Applicable □ Not applicableIn the Reporting Period, with respect to share changes involved in the “unlocking for public trading of shares in the first unlocking period for the reserved restrictedshares under the 2020 Restricted Share Incentive Plan”, the “ownership transfer of the first grant under the 2022 Restricted Share Incentive Plan” and the “unlockingfor public trading of shares in the second unlocking period for the first grant under the 2020 Restricted Share Incentive Plan”, the Company followed the applicablelaws and regulations and its Articles of Association, executed the approval procedures with the general meeting and the Board of Directors, and obtained approval fromthe Shenzhen Stock Exchange.Transfer of share ownership:
? Applicable □ Not applicableIn the Reporting Period, with respect to the transfers of share ownership involved in the “ownership transfer of the first grant under the 2022 Restricted ShareIncentive Plan”, the Company completed the transfers with the Shenzhen branch of China Securities Depository and Clearing Co., Ltd. after they were approved bythe Shenzhen Stock Exchange.Progress on any share repurchase:
? Applicable □ Not applicableDuring the period from October 2021 to 30 June 2022, the Company repurchased a total of approximately 106.6521 million shares (or around 8.01% of theCompany’s total share capital) through centralized bidding. With the highest trading price being RMB6.30/share and the lowest being RMB3.59/share, the total amountpaid was approximately RMB551 million (exclusive of 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 share attributable to the Company’s ordinary shareholders and otherfinancial indicators of the prior year and the prior accounting period, respectively:
□ Applicable ? Not applicable
Other information that the Company considers necessary or is required by the securities regulator to be disclosed:
□ Applicable ? Not applicable
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2022
2. Changes in Restricted Shares
? Applicable □ Not applicable
Unit: share
| Shareholder | Opening restricted shares | Increase in restricted shares in the period | Unlocked in the period | Closing restricted shares | Reason for restriction | Date of unlocking |
| Qiu Yezhi | 23,382,388 | 9,445,597 | 3,600,000 | 17,536,791 | Participated in the Restricted Share Incentive Plan of the Company/restricted shares of senior management | 2022-1-4 |
| Xie Weiwei | 800,000 | 400,000 | 350,000 | 750,000 | Participated in the Restricted Share Incentive Plan of the Company/restricted shares of senior management | 2022-6-24 |
| Zhou Wenhui | 960,000 | 480,000 | 420,000 | 900,000 | Participated in the Restricted Share Incentive Plan of the Company/restricted shares of senior management | 2022-6-24 |
| The other 34 awardees of the first grant of the 2020 Restricted Share Incentive Plan | 8,280,000 | 4,140,000 | 0 | 4,140,000 | Participated in the Restricted Share Incentive Plan of the Company | 2022-6-24 |
| Feng Jia | 0 | 0 | 700,000 | 700,000 | Participated in the Restricted Share Incentive | 2023-4-28 |
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2022
| Shareholder | Opening restricted shares | Increase in restricted shares in the period | Unlocked in the period | Closing restricted shares | Reason for restriction | Date of unlocking |
| Plan of the Company | ||||||
| The other 6 awardees of the first grant of the 2022 Restricted Share Incentive Plan | 0 | 0 | 1,950,000 | 1,950,000 | Participated in the Restricted Share Incentive Plan of the Company | 2023-4-28 |
| Shao Yongfeng | 800,000 | 160,000 | 0 | 640,000 | Participated in the Restricted Share Incentive Plan of the Company | 2022-3-9 |
| The other 17 awardees of the reserved grant of the 2020 Restricted Share Incentive Plan | 3,440,000 | 688,000 | 0 | 2,752,000 | Participated in the Restricted Share Incentive Plan of the Company | 2022-3-9 |
| Total | 37,662,388 | 15,313,597 | 7,020,000 | 29,368,791 | -- | -- |
II Issuance and Listing of Securities
□ Applicable ? Not applicable
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2022
III Shareholders and Their Shareholdings
Unit: share
| Number of ordinary shareholders at the period-end | 60,127 | 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 | 20.33% | 270,737,568 | 0 | 203,053,176 | 67,684,392 | In pledge | 135,360,000 |
| Tang Zhuomian | Domestic individual | 7.27% | 96,885,134 | 0 | 0 | 96,885,134 | In pledge | 10,000,000 |
| Pulead Technology Industry Co., Ltd. | State-owned corporation | 3.62% | 48,149,787 | -4,599,771 | 0 | 48,149,787 | ||
| Luzhou Industrial Development Investment Group Co., Ltd. | State-owned corporation | 2.39% | 31,770,010 | 0 | 0 | 31,770,010 | ||
| Qinghai Puren Intelligent Technology R & D Center (Limited Partnership) | Domestic non-state-owned corporation | 2.00% | 26,628,340 | 0 | 0 | 26,628,340 | ||
| Qiu Yezhi | Domestic individual | 1.76% | 23,382,388 | 0 | 17,536,791 | 5,845,597 | ||
| Huarong | Other | 1.73% | 23,043,424 | -8,329,125 | 0 | 23,043,424 | ||
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2022
| Securities－China Merchants Securities－Huarong Youzhi Collective Asset Management Plan No. 1 | ||||||||
| Hong Kong Securities Clearing Company Limited | Overseas corporation | 1.63% | 21,716,035 | -6,650,501 | 0 | 21,716,035 | ||
| Shengji Equity Investment Fund (Shanghai) Co., Ltd. | State-owned corporation | 1.47% | 19,607,843 | 0 | 0 | 19,607,843 | In pledge | 19,607,843 |
| JIC Investment Co., Ltd. | State-owned corporation | 0.97% | 12,984,216 | 0 | 0 | 12,984,216 | ||
| 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. (Chinese name has changed from “北大先行科技产业有限公司” to “东圣先行科技产业有限公司” during the reporting period.) 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. | |||||||
| Above shareholders entrusting or entrusted with voting rights, or waiving voting rights | None | |||||||
| Top 10 shareholders including the special | As of 30 June 2022, there were 112,162,199 shares in the Company’s special account for repurchase, accounting for 8.42% of its total share | |||||||
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2022
| account for repurchase (if any) (see note 11) | capital. | ||
| 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. | 48,149,787 | RMB-denominated ordinary stock | 48,149,787 |
| 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 |
| Huarong Securities－China Merchants Securities－Huarong Youzhi Collective Asset Management Plan No. 1 | 23,043,424 | RMB-denominated ordinary stock | 23,043,424 |
| Hong Kong Securities Clearing Company Limited | 21,716,035 | RMB-denominated ordinary stock | 21,716,035 |
| Shengji Equity Investment Fund (Shanghai) Co., Ltd. | 19,607,843 | RMB-denominated ordinary stock | 19,607,843 |
| JIC Investment Co., Ltd. | 12,984,216 | RMB-denominated ordinary stock | 12,984,216 |
| Beixin Ruifeng Fund－SPD Bank－Beijing International Trust－Beijing Trust·Qingyan Fengshou Wealth Management Collective Capital Trust Plan No. 2015015 | 10,818,183 | RMB-denominated ordinary stock | 10,818,183 |
| Related or acting-in-concert parties among top 10 unrestricted 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. (Chinese name changed from “北大先行科技产业有限公司” to “东圣先行科技产业有限公司”, and English | ||
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2022
| as well as between top 10 unrestricted ordinary shareholders and top 10 ordinary shareholders | name unchanged) 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. |
Indicate whether any of the top 10 ordinary shareholders or the top 10 unrestricted ordinary shareholders of the Company conducted any promissory repo during theReporting Period.
□ Yes ? No
No such cases in the Reporting Period.
IV Changes in the Shareholdings of Directors, Supervisors and Senior Management? Applicable □ Not applicable
| Name | Office title | Incumbent/Former | Opening shareholding (share) | Increase in the period (share) | Decrease in the period (share) | Closing shareholding (share) | Opening shareholding of granted restricted shares (share) | Restricted shares granted in the period (share) | Closing shareholding of granted restricted shares (share) |
| Feng Jia | Board Secretary | Incumbent | 0 | 700,000 | 0 | 700,000 | 0 | 700,000 | 700,000 |
| Total | -- | -- | 0 | 700,000 | 0 | 700,000 | 0 | 700,000 | 700,000 |
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.
Part VIII Preference Shares
□ Applicable √ Not applicable
No preference shares in the Reporting Period.
Part IX Corporate Bonds
□ Applicable √ Not applicable
Part X Financial Report
I Audit Report
Whether the semi-annual financial report was audited.
□ Yes √ No
The semi-annual financial report was not audited.II Financial StatementsUnit of the notes to financial statements: RMB
1. Consolidated Balance Sheet
Prepared by: Guangdong Dongfang Precision Science & Technology Co., Ltd.
30 June 2022
Unit: RMB yuan
| Item | 30 June 2022 | 31 December 2021 |
| Current assets: | ||
| Cash and bank balances | 1,242,403,906.96 | 1,664,336,339.35 |
| Settlement provisions | ||
| Dismantling funds | ||
| Financial assets held for trading | 830,381,698.55 | 788,185,521.57 |
| Derivative financial assets | ||
| Notes receivable | 23,793,263.47 | 13,272,025.04 |
| Accounts receivable | 753,538,571.88 | 741,135,648.09 |
| Receivable financing | 32,869,739.53 | 30,692,449.25 |
| Prepayments | 42,821,570.23 | 34,177,802.36 |
| Premium receivable | ||
| Receivable reinsurance account | ||
| Provision for reinsurance contract |
| receivable | ||
| Other receivables | 82,380,620.44 | 71,363,166.84 |
| Including: Interest receivable | ||
| Dividend receivable | ||
| Buy back resale financial assets | ||
| Inventories | 1,180,552,585.86 | 867,280,013.47 |
| Contract assets | 6,212,959.35 | 24,414,117.64 |
| Assets held for sale | ||
| Current portion of non-current assets | 307,103,250.00 | 108,385,000.00 |
| Other current assets | 41,556,112.47 | 32,124,006.99 |
| Total current assets | 4,543,614,278.74 | 4,375,366,090.60 |
| Non-current assets: | ||
| Loans and advances | ||
| Debt investment | ||
| Other debt investments | ||
| Long-term receivables | 143,750.00 | |
| Long-term equity investment | 86,076,091.60 | 84,777,596.67 |
| Investment in other equity instruments | ||
| Other non-current financial assets | 269,800,550.62 | 162,523,519.41 |
| Real estate investment | ||
| Fixed assets | 540,843,950.15 | 544,180,159.09 |
| Construction in progress | 36,036,409.77 | 12,298,259.58 |
| Productive biological assets | ||
| Oil and gas asset | ||
| Right-of-use assets | 78,147,661.94 | 80,386,832.91 |
| Intangible assets | 301,891,110.43 | 293,718,987.62 |
| Development expenditure |
| Goodwill | 447,185,386.62 | 306,969,147.76 |
| Long-term prepaid expenses | 14,207,865.54 | 11,962,127.07 |
| Deferred tax assets | 172,174,858.73 | 180,245,522.94 |
| Other non-current assets | 8,268,653.60 | 304,596,841.54 |
| Total non-current assets | 1,954,632,539.00 | 1,981,802,744.59 |
| Total assets | 6,498,246,817.74 | 6,357,168,835.19 |
| Current liabilities: | ||
| Short-term borrowings | 67,132,224.05 | 228,312,880.73 |
| Borrowing from the Central Bank | ||
| Borrowed funds | ||
| Financial liabilities held for trading | 115,096,944.17 | 110,746,939.04 |
| Derivative financial liabilities | ||
| Notes payable | 133,601,311.71 | 149,191,690.00 |
| Accounts payable | 639,755,248.52 | 619,265,856.18 |
| Advance receivables | ||
| Contract liabilities | 719,487,278.58 | 405,842,932.51 |
| Selling back financial assets | ||
| Deposits and Interbank deposit | ||
| Agent trading securities | ||
| Agent underwriting securities | ||
| Employee benefits payable | 104,806,517.35 | 103,809,783.58 |
| Tax payable | 29,308,458.31 | 60,701,346.24 |
| Other payables | 125,906,503.26 | 100,018,273.09 |
| Including: Interest payable | ||
| Dividend payable | 2,160,000.00 | |
| Fees and commissions | ||
| Reinsurance accounts payable | ||
| Liabilities held for sale | ||
| Current portion of non-current | 286,705,390.02 | 38,495,724.83 |
| liabilities | ||
| Other current liabilities | 9,928,971.98 | 12,836,473.00 |
| Total current liabilities | 2,231,728,847.95 | 1,829,221,899.20 |
| Non-current liabilities: | ||
| Insurance contract reserve | ||
| Long-term borrowings | 72,183,710.90 | 325,026,188.49 |
| Bonds payable | ||
| Including: Preference Shares | ||
| Perpetual bonds | ||
| Lease liabilities | 56,626,311.25 | 65,213,555.87 |
| Long-term payables | ||
| Long-term employee benefits payable | 13,022,074.87 | 16,083,170.32 |
| Provisions | 100,367,571.87 | 117,932,721.59 |
| Deferred income | 11,631,981.66 | 12,190,311.66 |
| Deferred tax liabilities | 2,610,713.55 | 1,747,137.95 |
| Other non-current liabilities | 135,327,385.06 | 136,178,304.44 |
| Total non-current liabilities | 391,769,749.16 | 674,371,390.32 |
| Total Liabilities | 2,623,498,597.11 | 2,503,593,289.52 |
| Equity: | ||
| Share capital | 1,331,938,167.00 | 1,331,938,167.00 |
| Other equity instruments | ||
| Including: Preference Shares | ||
| Perpetual bonds | ||
| Capital surplus | 3,277,610,812.67 | 3,238,765,859.94 |
| Less: Treasury stock | 709,899,049.72 | 494,335,503.94 |
| Other comprehensive income | -44,876,067.29 | -33,322,662.98 |
| Special reserve | 12,543,018.76 | 11,252,639.19 |
| Surplus reserves | 51,830,974.45 | 51,830,974.45 |
| General risk preparation | ||
| Retained earnings | -275,959,257.44 | -424,159,175.27 |
| Total equity attributable to owners of the parent | 3,643,188,598.43 | 3,681,970,298.39 |
| Non-controlling interests | 231,559,622.20 | 171,605,247.28 |
| Total equity | 3,874,748,220.63 | 3,853,575,545.67 |
| Total liabilities and equity | 6,498,246,817.74 | 6,357,168,835.19 |
Legal representative: Tang Zhuolin Chief in charge of accounting work: Shao Yongfeng Head of accounting institution: Yao Bin
2. Parent Company Balance Sheet
Unit: RMB yuan
| Item | 30 June 2022 | 31 December 2021 |
| Current assets: | ||
| Cash and bank balances | 319,748,113.04 | 526,602,901.98 |
| Financial assets held for trading | 495,871,537.20 | 652,931,497.75 |
| Derivative financial assets | ||
| Notes receivable | ||
| Accounts receivable | 200,801,646.23 | 154,703,065.67 |
| Receivable financing | 20,806,060.03 | 14,939,923.99 |
| Prepayments | 9,009,996.21 | 8,893,984.77 |
| Other receivables | 529,593,075.51 | 444,140,266.79 |
| Including: Interest receivable | ||
| Dividend receivable | 17,840,000.00 | |
| Inventories | 177,014,585.00 | 145,283,359.74 |
| Contract assets | 17,681,315.64 | |
| Assets held for sale | ||
| Current portion of non-current assets | 307,103,250.00 | 108,385,000.00 |
| Other current assets | 713,296.22 | |
| Total current assets | 2,059,948,263.22 | 2,074,274,612.55 |
| Non-current assets: | ||
| Debt investment | ||
| Other debt investments | ||
| Long-term receivables | 143,750.00 | |
| Long-term equity investment | 744,360,303.01 | 566,779,845.04 |
| Investment in other equity instruments | ||
| Other non-current financial assets | 95,068,654.33 | 110,672,495.38 |
| Real estate investment | ||
| Fixed assets | 310,028,966.89 | 316,780,357.65 |
| Construction in progress | 4,924,121.65 | 2,040,059.06 |
| Productive biological assets | ||
| Oil and gas asset | ||
| Right-of-use assets | 14,575,949.72 | 17,226,122.41 |
| Intangible assets | 57,501,886.01 | 58,297,372.40 |
| Development expenditure | ||
| Goodwill | ||
| Long-term prepaid expenses | 6,439,442.81 | 4,449,274.82 |
| Deferred tax assets | 111,405,401.06 | 109,447,418.03 |
| Other non-current assets | 300,150,000.00 | |
| Total non-current assets | 1,344,304,725.48 | 1,485,986,694.79 |
| Total assets | 3,404,252,988.70 | 3,560,261,307.34 |
| Current liabilities: | ||
| Short-term loan | ||
| Financial liabilities held for trading | 5,861,200.00 | 5,861,200.00 |
| Derivative financial liabilities | ||
| Notes payable | 42,343,994.77 | 45,445,513.50 |
| Accounts payable | 65,639,210.59 | 61,109,554.88 |
| Advance receivables | ||
| Contract liabilities | 37,531,398.37 | 21,697,782.14 |
| Employee benefits payable | 8,359,987.18 | 13,205,296.64 |
| Tax payable | 1,798,267.61 | 2,850,207.94 |
| Other payables | 151,736,026.05 | 195,636,226.94 |
| Including: Interest payable | ||
| Dividend payable | ||
| Liabilities held for sale | ||
| Current portion of non-current liabilities | 5,475,702.03 | 4,875,266.03 |
| Other current liabilities | 2,171,045.38 | 1,275,327.99 |
| Total current liabilities | 320,916,831.98 | 351,956,376.06 |
| Non-current liabilities: | ||
| Long-term borrowings | ||
| Bonds payable | ||
| Including: Preference Shares | ||
| Perpetual bonds | ||
| Lease liabilities | 10,369,048.27 | 13,331,936.29 |
| Long-term payables | ||
| Long-term employee benefits payable | ||
| Provisions | 4,467,008.95 | 1,635,363.75 |
| Deferred income | 11,631,981.66 | 12,190,311.66 |
| Deferred tax liabilities | ||
| Other non-current liabilities | 12,262,010.40 | 12,262,010.40 |
| Total non-current liabilities | 38,730,049.28 | 39,419,622.10 |
| Total Liabilities | 359,646,881.26 | 391,375,998.16 |
| Equity: |
| Share capital | 1,331,938,167.00 | 1,331,938,167.00 |
| Other equity instruments | ||
| Including: Preference Shares | ||
| Perpetual bonds | ||
| Capital surplus | 3,175,373,724.11 | 3,162,960,902.13 |
| Less: Treasury stock | 709,899,049.72 | 494,335,503.94 |
| Other comprehensive income | ||
| Special reserve | 5,944,597.49 | 5,067,104.62 |
| Surplus reserves | 51,830,974.45 | 51,830,974.45 |
| Retained earnings | -810,582,305.89 | -888,576,335.08 |
| Total equity | 3,044,606,107.44 | 3,168,885,309.18 |
| Total liabilities and equity | 3,404,252,988.70 | 3,560,261,307.34 |
3. Consolidated Income Statement
Unit: RMB yuan
| Item | H1 2022 | H1 2021 |
| 1 Total operating revenue | 1,535,615,634.26 | 1,400,558,964.18 |
| Including: Operating revenue | 1,535,615,634.26 | 1,400,558,964.18 |
| Interest income | ||
| Premiums earned | ||
| Fee and commission income | ||
| 2 Total operating cost | 1,371,662,485.67 | 1,242,685,402.46 |
| Including: Cost of sales | 1,134,044,266.22 | 991,455,474.86 |
| Interest expense | ||
| 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 | 6,956,423.47 | 6,319,014.40 |
| Selling expenses | 62,093,800.66 | 68,550,561.32 |
| Administrative expenses | 133,292,392.91 | 129,761,353.56 |
| R&D expenses | 44,132,225.30 | 48,225,572.88 |
| Finance costs | -8,856,622.89 | -1,626,574.56 |
| Including: Interest expenses | 5,668,853.58 | 4,899,967.92 |
| Interest income | 8,770,967.42 | 11,985,482.68 |
| Add: Other income | 6,210,725.52 | 6,853,659.68 |
| Investment income (loss with "-" sign) | -222,580.97 | 52,969,194.45 |
| Including: Share of profit or loss of joint ventures and associates | 1,279,980.62 | 1,249,209.43 |
| 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) | 24,927,586.43 | 21,393,373.17 |
| Credit impairment loss (loss is listed with "-" sign) | 1,790,013.02 | 487,181.58 |
| Asset impairment loss (loss with "-" sign) | -6,154,706.43 | 583,807.10 |
| Gain/loss on disposal of assets (loss with "-" sign) | -233,705.60 | 276,635.45 |
| 3 Operating profit (losses are listed with "-" sign) | 190,270,480.56 | 240,437,413.15 |
| Add: Non-operating income | 1,033,996.47 | 364,145.89 |
| Less: Non-operating expenses | 714,629.11 | 420,240.48 |
| 5 Gross profit (the gross loss shall be filled in with the sign "-") | 190,589,847.92 | 240,381,318.56 |
| Less: Income tax expenses | 31,123,723.82 | 38,037,005.48 |
| Net profit (net loss is listed with "-" sign) | 159,466,124.10 | 202,344,313.08 |
| (1) Net profit from continuing operations | ||
| i. Net profit from continuing operations (net loss with "-" sign) | 159,466,124.10 | 202,344,313.08 |
| 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 | 148,199,917.83 | 191,117,520.46 |
| ii. Net profit attributable to non-controlling interests | 11,266,206.27 | 11,226,792.62 |
| 6 Other comprehensive income/(loss), net of tax | -12,838,602.70 | -22,999,041.42 |
| Other comprehensive income/(loss) attributable to owners of the parent, net of tax | -11,553,404.31 | -20,068,085.91 |
| (1) Other comprehensive loss that will not be reclassified to profit or loss | 440,788.86 | -95,990.87 |
| i. Changes caused by remeasurements on defined benefit schemes | 440,788.86 | -95,990.87 |
| 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 | -11,994,193.17 | -19,972,095.04 |
| 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 | -11,994,193.17 | -19,972,095.04 |
| vii. Other | ||
| Other comprehensive income attributable to non-controlling interests, net of tax | -1,285,198.39 | -2,930,955.51 |
| Total comprehensive income | 146,627,521.40 | 179,345,271.66 |
| Total comprehensive income attributable to owners of the parent | 136,646,513.52 | 171,049,434.55 |
| Total comprehensive income attributable to non-controlling interests | 9,981,007.88 | 8,295,837.11 |
| Earnings per share: | ||
| (1) Basic earnings per share | 0.12 | 0.14 |
| (2) Diluted earnings per share | 0.12 | 0.14 |
Legal representative: Tang Zhuolin Chief in charge of accounting work: Shao Yongfeng Head of accounting institution: Yao Bin
4. Parent Company Income Statement
Unit: RMB yuan
| Item | H1 2022 | H1 2021 |
| 1 Operating Revenue | 214,661,874.19 | 240,083,153.60 |
| Less: Cost of sales | 117,832,956.03 | 122,283,078.03 |
| Taxes and surcharges | 3,855,068.95 | 3,594,496.78 |
| Selling expenses | 9,405,763.83 | 9,976,195.72 |
| Administrative expenses | 41,497,863.33 | 41,466,916.46 |
| R&D expenses | 9,213,094.41 | 17,269,979.76 |
| Finance costs | -20,244,231.98 | -4,029,733.48 |
| Including: Interest expense | 1,004,912.07 | 1,004,261.21 |
| Interest income | 6,309,101.69 | 6,838,464.74 |
| Add: other income | 1,681,381.91 | 2,778,877.55 |
| Investment income (loss with "-" sign) | 20,596,618.64 | 66,091,613.74 |
| Including: Share of profit or loss of joint ventures and associates | 1,279,980.62 | 1,249,209.43 |
| 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) | 188,520.19 | 21,218,838.14 |
| Credit impairment loss (loss is listed with "-" sign) | 771,446.93 | |
| Asset impairment loss (loss with "-" sign) | 1,232,165.37 | |
| Gain/loss on disposal of assets (loss with "-" sign) | 15,331.98 | 275,491.34 |
| 2 Operating profit (loss shall be listed with "-" sign) | 75,583,212.34 | 141,890,653.40 |
| Add: Non-operating income | 599,580.06 | 61,631.09 |
| Less: Non-operating expenses | 146,746.24 | 60,264.49 |
| 3 Gross profit (gross loss shall be filled in with the sign "-") | 76,036,046.16 | 141,892,020.00 |
| Less: Income tax expenses | -1,957,983.03 | 2,407,968.99 |
| 4 Net profit (net loss is listed with "-" sign) | 77,994,029.19 | 139,484,051.01 |
| (1) Net profit from continuing operation (net loss with "-" sign) | ||
| (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 | 77,994,029.19 | 139,484,051.01 |
| 7 Earnings per share: | ||
| (1) Basic earnings per share | ||
| (2) Diluted earnings per share |
5. Consolidated Statement of Cash Flows
Unit: RMB yuan
| Item | H1 2022 | H1 2021 |
| 1 Cash flows from operating activities: | ||
| Proceeds from sale of goods and rendering of services | 1,802,969,150.43 | 1,550,756,827.80 |
| 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 | 34,829,359.93 | 23,924,614.10 |
| Cash generated from other operating activities | 35,764,026.73 | 29,594,701.84 |
| Subtotal of cash generated from operating activities | 1,873,562,537.09 | 1,604,276,143.74 |
| Payments for goods and services | 1,185,626,748.22 | 927,944,794.17 |
| Net increase in customer loans and advances | ||
| Net increase in central bank and interbank deposits | ||
| Cash to pay the indemnity of the 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 | 338,168,044.20 | 292,416,955.30 |
| Payments of all types of taxes and surcharges | 71,822,125.03 | 44,806,542.67 |
| Cash used in other operating | 125,694,912.91 | 133,084,023.35 |
| activities | ||
| Subtotal of cash used in operating activities | 1,721,311,830.36 | 1,398,252,315.49 |
| Net cash generated from/used in operating activities | 152,250,706.73 | 206,023,828.25 |
| 2 Cash flows from investing activities: | ||
| Proceeds from disinvestment | 2,960,986,699.67 | 2,880,334,839.28 |
| Investment income | 26,404,419.77 | 62,687,677.73 |
| Net proceeds from the disposal of fixed assets, intangible assets, and other long-lived assets | 580,757.16 | 247,765.69 |
| Disposal of net cash received by subsidiaries and other business units | ||
| Cash generated from other investing activities | 742,251.94 | 2,453,179.98 |
| Subtotal of cash generated from investing activities | 2,988,714,128.54 | 2,945,723,462.68 |
| Payments for the acquisition of fixed assets, intangible assets, and other long-lived assets | 58,758,055.34 | 28,354,847.23 |
| Payments for investments | 2,962,010,158.14 | 1,717,105,189.38 |
| Net increase in pledged loans | ||
| Obtain net cash paid by subsidiaries and other business units | 139,172,016.05 | |
| Cash used in other investing activities | ||
| Subtotal of cash used in investing activities | 3,159,940,229.53 | 1,745,460,036.61 |
| Net cash generated from/used in investing activities | -171,226,100.99 | 1,200,263,426.07 |
| 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 | 236,920,326.91 | 237,730,647.37 |
| Cash generated from other | 657,362,397.48 | 74,850,615.97 |
| financing activities | ||
| Subtotal of cash generated from financing activities | 894,282,724.39 | 312,581,263.34 |
| Repayment of borrowings | 406,841,266.43 | 238,444,707.11 |
| Interest and dividends paid | 3,152,285.82 | 3,829,257.01 |
| Including: Interest and dividends paid to minority shareholders | ||
| Cash used in other financing activities | 493,565,716.00 | 770,560,071.80 |
| Subtotal of cash used in financing activities | 903,559,268.25 | 1,012,834,035.92 |
| Net cash generated from/used in financing activities | -9,276,543.86 | -700,252,772.58 |
| 4 Effect of foreign exchange rates changes on cash and cash equivalents | -3,328,916.09 | -23,436,767.27 |
| 5 Net (decrease)/increase in cash and cash equivalents | -31,580,854.21 | 682,597,714.47 |
| Add: Cash and cash equivalents, beginning of the period | 1,259,303,775.74 | 860,601,236.78 |
| 6 Cash and cash equivalents, end of the period | 1,227,722,921.53 | 1,543,198,951.25 |
6. Parent Company Statement of Cash Flow
Unit: RMB yuan
| Item | H1 2022 | H1 2021 |
| 1 Cash flow generated by business activities: | ||
| Cash received from the sale of goods and the provision of services | 175,645,201.33 | 186,517,079.77 |
| Receipts of taxes and surcharges refunds | 10,824,585.72 | 4,894,157.17 |
| Cash generated from other operating activities | 41,727,032.51 | 101,581,249.76 |
| Subtotal of cash generated from operating activities | 228,196,819.56 | 292,992,486.70 |
| Payments for goods and services | 133,586,738.91 | 128,218,993.82 |
| Cash payments to and on behalf of | 47,338,808.49 | 42,396,474.57 |
| employees | ||
| Payments of all types of taxes and surcharges | 4,698,999.52 | 5,067,017.44 |
| Cash used in other operating activities | 23,214,510.22 | 43,563,680.54 |
| Subtotal of cash used in operating activities | 208,839,057.14 | 219,246,166.37 |
| Net cash generated from/used in operating activities | 19,357,762.42 | 73,746,320.33 |
| 2 Cash flows from investing activities: | ||
| Proceeds from disinvestment | 1,622,634,482.77 | 2,038,801,239.59 |
| Investment income | 25,484,477.04 | 79,267,508.64 |
| Net proceeds from the disposal of fixed assets, intangible assets, and other long-lived assets | 23,000.00 | 443,000.00 |
| Disposal of net cash received by subsidiaries and other business units | ||
| Cash generated from other investing activities | 903,000.00 | 11,701,200.00 |
| Subtotal of cash generated from investing activities | 1,649,044,959.81 | 2,130,212,948.23 |
| Payments for the acquisition of fixed assets, intangible assets, and other long-lived assets | 9,616,254.16 | 5,065,813.67 |
| Payments for investments | 1,404,898,673.23 | 890,133,072.92 |
| Obtain net cash paid by subsidiaries and other business units | 149,040,000.00 | 100,000,000.00 |
| Cash used in other investing activities | 295,510,000.00 | |
| Subtotal of cash used in investing activities | 1,563,554,927.39 | 1,290,708,886.59 |
| Net cash generated from/used in investing activities | 85,490,032.42 | 839,504,061.64 |
| 3 Cash flows from financing activities: | ||
| Absorb the cash received by the investment | ||
| Cash received for obtaining loans | ||
| Cash generated from other | 581,434,806.25 | 14,343,880.06 |
| financing activities | ||
| Subtotal of cash generated from financing activities | 581,434,806.25 | 14,343,880.06 |
| Repayment of borrowings | ||
| Interest and dividends paid | 603,835.52 | 500,429.47 |
| Cash used in other financing activities | 527,514,138.31 | 708,837,544.69 |
| Subtotal of cash used in financing activities | 528,117,973.83 | 709,337,974.16 |
| Net cash generated from/used in financing activities | 53,316,832.42 | -694,994,094.10 |
| 4 Effect of foreign exchange rates changes on cash and cash equivalents | ||
| 5 Net (decrease)/increase in cash and cash equivalents | 158,164,627.26 | 218,256,287.87 |
| Add: Cash and cash equivalents, beginning of the period | 156,610,136.21 | 126,339,870.71 |
| 6 Cash and cash equivalents, end of the period | 314,774,763.47 | 344,596,158.58 |
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2022
7. Consolidated Statements of Changes in Equity
Amount of current period
Unit: RMB yuan
| Item | H1 2022 | ||||||||||||||
| 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 2021 | 1,331,938,167.00 | 3,238,765,859.94 | 494,335,503.94 | -33,322,662.98 | 11,252,639.19 | 51,830,974.45 | -424,159,175.27 | 3,681,970,298.39 | 171,605,247.28 | 3,853,575,545.67 | |||||
| Add: Adjustments for changes in accounting policies | |||||||||||||||
| Adjustments for correction of previous errors | |||||||||||||||
| Adjustments for business combinations involving entities under common control | |||||||||||||||
| Other adjustments | |||||||||||||||
| II. On 1 January 2022 | 1,331,938,167.00 | 3,238,765,859.94 | 494,335,503.94 | -33,322,662.98 | 11,252,639.19 | 51,830,974.45 | -424,159,175.27 | 3,681,970,298.39 | 171,605,247.28 | 3,853,575,545.67 | |||||
| III. Changes for the period (“-” for decrease) | 38,844,952.73 | 215,563,545.78 | -11,553,404.31 | 1,290,379.57 | 148,199,917.83 | -38,781,699.96 | 59,954,374.92 | 21,172,674.96 | |||||||
| (I) Total comprehensive income | -11,553,404.31 | 148,199,917.83 | 136,646,513.52 | 9,981,007.88 | 146,627,521.40 | ||||||||||
| (II) Owner’s contributions and reduction in capital | 13,344,952.73 | 215,563,545.78 | -202,218,593.05 | -202,218,593.05 | |||||||||||
| 1. Ordinary shares increased by | |||||||||||||||
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2022
| Item | H1 2022 | ||||||||||||||
| 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 | |||||||||||||
| owners | |||||||||||||||
| 2. Capital increased by holders of other equity instruments | |||||||||||||||
| 3. Share-based payments included in equity | 13,388,065.57 | 13,388,065.57 | 13,388,065.57 | ||||||||||||
| 4. Others | -43,112.84 | 215,563,545.78 | -215,606,658.62 | -215,606,658.62 | |||||||||||
| (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 | |||||||||||||||
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2022
| Item | H1 2022 | ||||||||||||||
| 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 | |||||||||||||
| loss | |||||||||||||||
| 4. Changes in defined benefit schemes transferred to retained earnings | |||||||||||||||
| 5. Other comprehensive income transferred to retained earnings | |||||||||||||||
| 6. Others | |||||||||||||||
| (V) Special reserve | 1,290,379.57 | 1,290,379.57 | 1,290,379.57 | ||||||||||||
| 1. Provision in the period | 2,655,989.89 | 2,655,989.89 | 2,655,989.89 | ||||||||||||
| 2. Utilisation in the period | -1,365,610.32 | -1,365,610.32 | -1,365,610.32 | ||||||||||||
| (VI) Others | 25,500,000.00 | 25,500,000.00 | 49,973,367.04 | 75,473,367.04 | |||||||||||
| IV. On 30 June 2022 | 1,331,938,167.00 | 3,277,610,812.67 | 709,899,049.72 | -44,876,067.29 | 12,543,018.76 | 51,830,974.45 | -275,959,257.44 | 3,643,188,598.43 | 231,559,622.20 | 3,874,748,220.63 | |||||
Amount of previous period
Unit: RMB yuan
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2022
| Item | H1 2021 | ||||||||||||||
| 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 2020 | 1,545,126,957.00 | 4,002,393,061.81 | 579,403,185.12 | 20,026,089.70 | 10,057,438.97 | 51,830,974.45 | -891,492,837.06 | 4,158,538,499.75 | 72,989,978.55 | 4,231,528,478.30 | |||||
| Add: Adjustments for changes in accounting policies | |||||||||||||||
| Adjustments for correction of previous errors | |||||||||||||||
| Adjustments for business combinations involving entities under common control | |||||||||||||||
| Other adjustments | |||||||||||||||
| II. On 1 January 2021 | 1,545,126,957.00 | 4,002,393,061.81 | 579,403,185.12 | 20,026,089.70 | 10,057,438.97 | 51,830,974.45 | -891,492,837.06 | 4,158,538,499.75 | 72,989,978.55 | 4,231,528,478.30 | |||||
| III. Changes for the period (“-” for decrease) | -213,038,790.00 | -751,884,748.81 | -520,343,059.52 | -20,068,085.91 | 973,774.84 | 191,117,520.46 | -272,557,269.90 | 85,795,536.41 | -186,761,733.49 | ||||||
| (I) Total comprehensive income | -20,068,085.91 | 191,117,520.46 | 171,049,434.55 | 8,295,837.11 | 179,345,271.66 | ||||||||||
| (II) Owner’s contributions and reduction in capital | -213,038,790.00 | -775,796,249.51 | -520,343,059.52 | -468,491,979.99 | -468,491,979.99 | ||||||||||
| 1. Ordinary shares increased by owners | |||||||||||||||
| 2. Capital increased by holders of other equity instruments | |||||||||||||||
| 3. Share-based payments included | -900,000.00 | 2,249,341.80 | -20,346,800.00 | 21,696,141.80 | 21,696,141.80 | ||||||||||
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2022
| Item | H1 2021 | ||||||||||||||
| 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 | |||||||||||||
| in equity | |||||||||||||||
| 4. Others | -212,138,790.00 | -778,045,591.31 | -499,996,259.52 | -490,188,121.79 | -490,188,121.79 | ||||||||||
| (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 earnings | |||||||||||||||
| 5. Other comprehensive income | |||||||||||||||
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2022
| Item | H1 2021 | ||||||||||||||
| 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 | |||||||||||||
| transferred to retained earnings | |||||||||||||||
| 6. Others | |||||||||||||||
| (V) Special reserve | 973,774.84 | 973,774.84 | 973,774.84 | ||||||||||||
| 1. Provision in the period | 2,257,128.43 | 2,257,128.43 | 2,257,128.43 | ||||||||||||
| 2. Utilisation in the period | -1,283,353.59 | -1,283,353.59 | -1,283,353.59 | ||||||||||||
| (VI) Others | 23,911,500.70 | 23,911,500.70 | 77,499,699.30 | 101,411,200.00 | |||||||||||
| IV. On 30 June 2021 | 1,332,088,167.00 | 3,250,508,313.00 | 59,060,125.60 | -41,996.21 | 11,031,213.81 | 51,830,974.45 | -700,375,316.60 | 3,885,981,229.85 | 158,785,514.96 | 4,044,766,744.81 | |||||
8. Company Statement of Changes in Equity
Amount of current period
Unit: RMB yuan
| Item | H1 2022 | |||||||||||
| 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 2021 | 1,331,938,167.00 | 3,162,960,902.13 | 494,335,503.94 | 5,067,104.62 | 51,830,974.45 | -888,576,335.08 | 3,168,885,309.18 | |||||
| Add: Adjustments for changes in accounting | ||||||||||||
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2022
| Item | H1 2022 | |||||||||||
| 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 | ||||||||||
| policies | ||||||||||||
| Adjustments for correction of previous errors | ||||||||||||
| Other adjustments | ||||||||||||
| II. On 1 January 2022 | 1,331,938,167.00 | 3,162,960,902.13 | 494,335,503.94 | 5,067,104.62 | 51,830,974.45 | -888,576,335.08 | 3,168,885,309.18 | |||||
| III. Changes for the period (“-” for decrease) | 12,412,821.98 | 215,563,545.78 | 877,492.87 | 77,994,029.19 | -124,279,201.74 | |||||||
| (I) Total comprehensive income | 77,994,029.19 | 77,994,029.19 | ||||||||||
| (II) Owner’s contributions and reduction in capital | 12,412,821.98 | 215,563,545.78 | -203,150,723.80 | |||||||||
| 1. Ordinary shares increased by owners | ||||||||||||
| 2. Capital increased by holders of other equity instruments | ||||||||||||
| 3. Share-based payments included in equity | 12,455,934.82 | 12,455,934.82 | ||||||||||
| 4. Others | -43,112.84 | 215,563,545.78 | -215,606,658.62 | |||||||||
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2022
| Item | H1 2022 | |||||||||||
| 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 | ||||||||||
| (III) Profit distribution | ||||||||||||
| 1. Appropriation to surplus reserves | ||||||||||||
| 2. Appropriation to 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 | ||||||||||||
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2022
| Item | H1 2022 | |||||||||||
| 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 | ||||||||||
| retained earnings | ||||||||||||
| 6. Others | ||||||||||||
| (V) Special reserve | 877,492.87 | 877,492.87 | ||||||||||
| 1. Provision in the period | 936,757.32 | 936,757.32 | ||||||||||
| 2. Utilisation in the period | -59,264.45 | -59,264.45 | ||||||||||
| (VI) Others | ||||||||||||
| IV. On 30 June 2022 | 1,331,938,167.00 | 3,175,373,724.11 | 709,899,049.72 | 5,944,597.49 | 51,830,974.45 | -810,582,305.89 | 3,044,606,107.44 | |||||
Amount of previous period
Unit: RMB yuan
| Item | H1 2021 | |||||||||||
| 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 2020 | 1,545,126,957.00 | 3,846,323,477.68 | 579,403,185.12 | 3,835,986.08 | 51,830,974.45 | -1,183,118,438.56 | 3,684,595,771.53 | |||||
| Add: Adjustments for changes in accounting policies | ||||||||||||
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2022
| Adjustments for correction of previous errors | ||||||||||||
| Other adjustments | ||||||||||||
| II. On 1 January 2021 | 1,545,126,957.00 | 3,846,323,477.68 | 579,403,185.12 | 3,835,986.08 | 51,830,974.45 | -1,183,118,438.56 | 3,684,595,771.53 | |||||
| III. Changes for the period (“-” for decrease) | -213,038,790.00 | -777,166,786.98 | -520,343,059.52 | 586,670.06 | 139,484,051.01 | -329,791,796.39 | ||||||
| (I) Total comprehensive income | 139,484,051.01 | 139,484,051.01 | ||||||||||
| (II) Owner’s contributions and reduction in capital | -213,038,790.00 | -777,166,786.98 | -520,343,059.52 | -469,862,517.46 | ||||||||
| 1. Ordinary shares increased by owners | ||||||||||||
| 2. Capital increased by holders of other equity instruments | ||||||||||||
| 3. Share-based payments included in equity | -900,000.00 | 878,804.33 | -20,346,800.00 | 20,325,604.33 | ||||||||
| 4. Others | -212,138,790.00 | -778,045,591.31 | -499,996,259.52 | -490,188,121.79 | ||||||||
| (III) Profit distribution | ||||||||||||
| 1. Appropriation to surplus reserves | ||||||||||||
| 2. Appropriation to owners (or shareholders) | ||||||||||||
| 3. Others | ||||||||||||
| (IV) Transfers within equity |
Guangdong Dongfang Precision Science & Technology Co., Ltd. Semi-Annual Report 2022
| 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 | 586,670.06 | 586,670.06 | ||||||||||
| 1. Provision in the period | 807,820.75 | 807,820.75 | ||||||||||
| 2. Utilisation in the period | -221,150.69 | -221,150.69 | ||||||||||
| (VI) Others | ||||||||||||
| IV. On 30 June 2021 | 1,332,088,167.00 | 3,069,156,690.70 | 59,060,125.60 | 4,422,656.14 | 51,830,974.45 | -1,043,634,387.55 | 3,354,803,975.14 |
III Corporate Background
Guangdong Dongfang Precision Science & Technology Co., Ltd. (the "Company"), a joint stock company withlimited liability registered in Guangdong Province of the People's Republic of China and established on 9 December1996, obtained a Business License for Enterprise Legal Person with a registration number of 440682000040868.
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 & Technology Co., Ltd.(ZH.J.X.K. [2011] No. 1237), the Company issued Renminbi-denominated ordinary shares to the public and waslisted on the Shenzhen Stock Exchange in the same month. The Company started to use the unified social creditcode (914406002318313119) in 2016. The Company is headquartered in 2 Qiangshi Road, Shishan Town, NanhaiDistrict, Foshan City, Guangdong Province, China.
Business scope of the Company:
General items: Network and information security software development; manufacturing of special printingequipment; computer system services; information system integration services; information consulting services(excluding licensing information consulting services); manufacturing of material handling equipment;manufacturing of special equipment for pulping and papermaking; manufacturing of industrial robots;manufacturing of special-purpose equipment (excluding manufacturing of special licensing equipment);manufacturing of industrial control computers and systems; sales of intelligent material handling equipment;software sales; intelligent control system integration; AI universal application system; domestic freight forwarding;information technology consulting services; socio-economic consulting services; environmental protectionconsulting services; technology intermediary services. (Except for items subject to approval according to law,business activities shall be conducted independently in accordance with the business license) Licensed items: importand export agency; import and export of goods; import and export of technologies. (Business activities that requireapproval according to law shall be subject to the approval by relevant authorities. Specific business items areindicated in the approval documents or permit documents of relevant authorities.) The Company belongs to thespecial-purpose equipment manufacturing industry.
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 26 July 2022.
The consolidation scope for consolidated financial statements is determined based on the concept of control. Fordetails of changes during the period, please refer to Note VIII.
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”).
The financial statements are prepared on a going concern basis.
In the preparation of the financial statements, all items are recorded by using historical cost as the basis ofmeasurement except for some financial instruments. Impairment allowance is made according to relevantregulations if the assets are impaired.
V. Principal Accounting Policies and Accounting Estimates
1. Statement of compliance
The financial statements present truly and completely the financial positions of the Group and the Company as of30 June 2022, and the financial performance and the cash flows for the year then ended in accordance withAccounting 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. Theamounts in the financial statements were denominated in Renminbi yuan, unless otherwise stated.
4. 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 thecombining entities are ultimately controlled by the same party or parties both before and after the businesscombination, and that control is not transitory. The acquirer is the entity that obtains control of the other entitiesparticipating in the combination at the combination date, and the other entities participating in the combination arethe acquirees. The combination date is the date on which the combining party effectively obtains control of theparties being combined.
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.
III. Principal Accounting Policies and Accounting Estimates (Cont’d)
4. Business combination (cont’d)
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 acquirer is the entity that obtains control of the other entities participating in the combination atthe acquisition date, and the other entities participating in the combination are the acquirees. The acquisition date isthe date on which the acquirer effectively obtains control of the acquiree.
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 and equity interestsin the acquiree held prior to the date of acquisition over the share of the attributable net identifiable assets of theacquiree, measured at fair value, was recognized as goodwill, which is subsequently measured at cost lesscumulative 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.
Where a business combination not involving entities under common control realized step by step through multipletransactions, the long-term equity investments held by the acquiree prior to the purchase date shall be remeasuredat the fair value of the long-term equity investments on the purchase date, and the difference between the fair valueand their carrying value shall be recognized in profit or loss. For other comprehensive income of the long-termequity investments under the equity method held by the acquiree prior to the purchase date, accounting treatmentshall be performed on the same basis as the direct disposal of relevant assets or liabilities by the invested entity, andother changes in equity than net profit and loss, other comprehensive income and the distribution of profits shall beconverted into current profits and losses on the purchase date. The changes in the fair value of the equity instrumentinvestments held by the acquiree prior to the purchase date and accumulated in other comprehensive income priorto the purchase date shall be transferred to retained profits and losses.
III. Principal Accounting Policies and Accounting Estimates (Cont’d)
5. 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).
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.
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.
6. 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.
III. Principal Accounting Policies and Accounting Estimates (Cont’d)
7. 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.
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.
III. Principal Accounting Policies and Accounting Estimates (Cont’d)
8. 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:
（
）The right of receiving the cash flow generated from the financial asset has expired;（
）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.
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.
III. Principal Accounting Policies and Accounting Estimates (Cont’d)
8. Financial instruments (cont’d)
Classification and measurement of financial assets (cont’d)
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.
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:
III. Principal Accounting Policies and Accounting Estimates (Cont’d)
8. Financial instruments (cont’d)
Classification and measurement of financial liabilities (cont’d)
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.
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 VIII.3.
III. Principal Accounting Policies and Accounting Estimates (Cont’d)
8. Financial instruments (cont’d)
Impairment of financial instruments (cont’d)
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.
III. Principal Accounting Policies and Accounting Estimates (Cont’d)
9. 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. If the factorsthat give rise to the allowance in prior years are not in effect in the current period, as a result that the net realisablevalue of the inventories is higher than cost, allowance should be reversed within the impaired cost, and recognizedin profit or loss.
Net realisable value is determined based on the estimated selling price in the ordinary course of business, less theestimated costs to completion and estimated costs necessary to make the sale and related taxes. Valuation allowancesfor raw materials are established by category, and those for finished goods by individual item. For inventories thatrelate to products produced and sold in the same region, have the same or similar ultimate purpose, and are difficultto separate in measurement, valuation allowances are established on a combined basis.
III. Principal Accounting Policies and Accounting Estimates (Cont’d)
10. 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. For long-term equityinvestments acquired by way of debt restructuring, the initial investment cost shall be determined in accordancewith “CAS No. 12 — Debt Restructuring.”
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.
III. Principal Accounting Policies and Accounting Estimates (Cont’d)
10. 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.
On disposal of the long-term equity investments, the difference between carrying value and market price isrecognized in profit or loss for the current period. For long-term equity investments under equity method, when theuse of the equity method is discontinued, other comprehensive income previously accounted for under the equitymethod shall be dealt with on the same basis as if the relevant assets or liabilities were disposed of directly by theinvestee. Equity recognized as a result of changes in equity other than the net-off of profit and loss, othercomprehensive income and profit distribution of the investee shall be transferred in full to current profit and loss. Ifthe equity method remains in use, other comprehensive income previously accounted for under the equity methodshall be dealt with on the same basis as if the relevant assets or liabilities were disposed of directly by the investeeand transferred to current profit and loss on a pro-rata basis. Equity recognized as a result of changes in shareholders’equity other than the net-off of profit and loss, other comprehensive income and profit distribution of the investeeshall be transferred to current profit and loss on a pro-rata basis.
III. Principal Accounting Policies and Accounting Estimates (Cont’d)
11. 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.
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 | Estimated residual 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.
12. 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.
Construction in progress is transferred into fixed assets when it is ready for its intended use.
III. Principal Accounting Policies and Accounting Estimates (Cont’d)
13. Borrowing costs
Borrowing costs are interest and other costs incurred by the Group in connection with the borrowings of funds,which include borrowing interest, amortisation of discount or premium on debt, other supplementary costs andcertain foreign exchange differences that occurred from the borrowings in foreign currencies.
14. Right-of-use assets
The right-of-use assets of the Group mainly include buildings and vehicles
At the commencement date of the lease, the Group recognizes a right-of-use asset. The cost of the right-of-use assetcomprises: (1) the amount of the initial measurement of the lease liability; (2) any lease payments made at or beforethe commencement date less any lease incentives received; (3) any initial direct cost incurred; (4) an estimate ofcosts incurred by the lessee in dismantling and removing the underlying asset, restoring the site on which it is locatedor restoring the underlying asset to the condition required by the terms and conditions of the lease. The right-of-useassets are depreciated on a straight-line basis subsequently by the Group. If ownership of the leased asset transfersto the Group at the end of the lease term, depreciation is calculated using the estimated useful life of the asset.Otherwise, the right-of-use assets are depreciated over the shorter of the lease term and the estimated useful livesof the assets.
When the Group remeasures the lease liability at the present value of the changed lease payments and adjusts thecarrying amount of the right-of-use assets accordingly, if the carrying amount of the right-of-use asset is reduced tozero, and there is a further reduction in the measurement of the lease liability, the Group recognize the remainingamount of the remeasurement in profit or loss.
15. Intangible assets
Intangible assets are recognized only when it is probable that economic benefits relating to such intangible assetswould flow into the Group and that their cost can be reliably measured. Intangible assets are initially measured atcost, provided that intangible assets which are acquired in a business combination not under common control andwhose fair value can be reliably measured shall be separately recognized as intangible assets at fair value.
Useful life of an intangible asset is determined by the period over which it is expected to bring economic benefitsto the Group. For an intangible asset with no foreseeable limit to the period over which it is expected to bringeconomic benefits to the Group, it is treated as an intangible asset with indefinite useful life.
Useful life of respective intangible assets is as follows:
| Useful life | |||||
| Land use rights | 40-50 years | ||||
| Land ownership (overseas) | Indefinite | ||||
| Trademarks | 5-10 years | ||||
| Trademarks (overseas) | Uncertain | ||||
| Patents | 5-10 years |
III. Principal Accounting Policies and Accounting Estimates (Cont’d)
15. Intangible assets (cont’d)
Property in land acquired by the Group is normally accounted for as intangible assets. Property in land and buildingsrelating to plants constructed by the Group are accounted for as intangible assets and fixed assets, respectively. Thecosts for acquiring land and buildings are apportioned between the property in land and buildings, or accounted foras fixed assets if they cannot be apportioned.
The straight-line amortisation method is used during the useful life period for intangible assets with definite usefullives. The Group reviews, at least at each year end, useful lives, and amortization method for intangible assets withdefinite lives and makes adjustment when necessary.
For intangible assets with indefinite useful life, impairment tests shall be conducted annually regardless of whetherthere are indications of impairment. Such intangible assets shall not be amortized and their useful life shall bereviewed during each accounting period. If there is evidence suggesting that their useful life is limited, accountingtreatment will be performed according to the above policy on intangible assets with definite useful life.
The land ownership of Fosber S.p.A. ("Fosber Group"), a subsidiary of the Company, in Italy has a permanent term,and the Company believes that the land ownership will be used and will bring expected inflows of economic benefitsto the Company in the foreseeable future, so its useful life is regarded as indefinite. The trademarks registered bysubsidiaries Fosber Group and Fosber America, Inc. ("Fosber America") have a useful life in accordance with thelaw, but at the expiration of the protection period, Fosber Group and Fosber America can apply for an extension atlow service charges, so the Company will benefit from the above trademarks in the long term. Thus, the Companyrecognized the trademark use right as intangible assets with indefinite useful life. The useful life of intangible assetswith indefinite useful life will be reviewed at the end of each year. After review, the useful life of the aboveintangible assets is still uncertain.
The Group classifies the expenses for internal research and development as research costs and development costs.All research costs are charged to the current profit or loss as incurred. Expenditure incurred on projects to developnew products is capitalized and deferred only when the Group can demonstrate the technical feasibility ofcompleting the intangible asset so that it will be available for use or sale, its intention to complete and its ability touse or sell the asset, how the asset will generate future economic benefits (including demonstration that the productderived from the intangible asset or the intangible asset itself will be marketable or, in the case of internal use, theusefulness of the intangible asset as such), the availability of technical and financial resources to complete theproject and procure the use or sale of the intangible asset, and the ability to measure reliably the expenditure duringthe development. Development costs which do not meet these criteria is recognized in profit or loss when incurred.
III. 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:
The Group assesses at each balance sheet date whether there is an indication that a non-financial asset may beimpaired. If any such indication exists, the Group makes an estimate of the asset’s recoverable amount and performsa test of impairment for the asset. For goodwill generated from business consolidation and intangible assets withindefinite useful lives, tests for impairment are performed at least annually regardless of whether there areindications of impairment. Intangible assets which are not yet ready for use are also tested annually for impairment.
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.
III. 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.
III. Principal Accounting Policies and Accounting Estimates (Cont’d)
18. Employee benefits (cont’d)
Retirement benefits (defined benefit schemes) (cont’d)recognizerecognizeNet 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. Lease liabilities
At 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. In calculating the present value ofthe lease payments, the Group uses the interest rate implicit in the lease as the discount rate. If that rate cannot bereadily determined, the Group uses the lessee’s incremental borrowing rate. The Group calculates the interestexpenses of the lease liability in each period during the lease term using the constant periodic rate of interest, andrecognizes such interest expenses in profit or loss, except those that in the related asset costs as required. Variablelease payments that are not included in the measurement of the lease assets are recognized in profit or loss asincurred, except those that shall be included in the related asset costs as required.
After the commencement date, in the event of any change to the substantial constant payments, the estimatedpayables of guaranteed residual value, the index or ratio used to determine lease payments, the assessment resultsor actual vesting of the purchase option, the renewal option or the termination option, the Group remeasures thelease liability at the present value of the modified lease payments.
20. 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:
（
）the obligation is a present obligation of the Group;（
）the obligation would probably result in an outflow of economic benefits from the Group;（
）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.
III. Principal Accounting Policies and Accounting Estimates (Cont’d)
21. 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.
No expenses are recognized for awards that do not ultimately vest due to non-fulfillment of nonmarket conditionsand/or vesting conditions. For the market or non-vesting condition under the share-based payments agreement, itshould be treated as vesting irrespective of whether or not the market or non-vesting condition is satisfied, providedthat other performance condition and/or vesting conditions are satisfied.
22. 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.
III. Principal Accounting Policies and Accounting Estimates (Cont’d)
22. Revenue generating from contracts with customers (cont’d)
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.
Principal/agent
When the Group obtains control of trade goods or services from a third party and then transfers it to a customer, orhas the ability to direct the third party to provide the service to the customer on the Group’s behalf, the Group isentitled to determine the transaction price of the goods or services by itself, i.e., the Group controls the trade goodsor services before they are transferred to the customer. Thus, the Group is a principal and recognizes revenue inthe gross amount of consideration received or receivable. Otherwise, the Group is an agent and recognizes revenuein the amount of any fee or commission to which it expects to be entitled from the customer. The amount is the netamount of the gross consideration received or receivable after paying the other party the consideration received inexchange for the goods or services to be provided by that party.
23. 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.
III. Principal Accounting Policies and Accounting Estimates (Cont’d)
23. Contract assets and contract liabilities (Cont’d)
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.
24. 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:
（
）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;（
）they will increase the resources to be utilized in the Company’s future performance of its contractualobligations;（
）they are expected to be recoverable.
25 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.
III. Principal Accounting Policies and Accounting Estimates (Cont’d)
25. 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,the balance of the deferred income yet to be allocated shall be transferred to “asset disposal” under current profit orloss.
26. Income tax
Income taxes include current and deferred tax. Income taxes are recognized in current profit or loss as income taxexpenses or income tax benefit, except for the adjustment made for goodwill in a business combination and incometax from transactions or items that directly related to equity.
For the current period’s deferred tax assets and liabilities arising in current and prior periods, the Group measuresthem at the amount expected to be paid or recovered according to the relevant taxation regulations.
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:
（
）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;（
）in respect of taxable temporary differences associated with investments in subsidiaries, associates andinterests 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.
III. Principal Accounting Policies and Accounting Estimates (Cont’d)
.Income tax (cont’d)
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:
（
）where the deductible temporary difference arises from transaction that is not a business combination and, atthe time of the transaction, affects neither the accounting profit nor taxable profit or loss;（
）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.
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.
III. Principal Accounting Policies and Accounting Estimates (Cont’d)
27. Leases
Identification of 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. To assess whether a contract conveys the right to control the use of an identified asset for a period oftime, the Group assesses whether, throughout the period of use, the customer has both of the right to obtainsubstantially all of the economic benefits from use of the identified asset and the right to direct the use of theidentified asset.
Identification of separate lease components
For a contract that contains multiple separate lease components, the Group separates the contract and accounts foreach separate lease component. The right to use an underlying asset is a separate lease component if both:
(1) The lessee can benefit from use of the underlying asset either on its own or together with other resources thatare readily available to the lessee;
(2) The underlying asset is neither highly dependent on, nor highly interrelated with, the other underlying assets inthe contract.
Assessment of lease term
The lease term is the non-cancellable period for which the Group has the right to use an underlying asset. The Grouphas an option to extend the lease, that is, the Group has the right to extend the lease, and is reasonably certain toexercise that option, the lease term also includes periods covered by an option to extend the lease. The Group hasan option to terminate the lease, that is, the Group has the right to terminate the lease, but is reasonably certain notto exercise that option, the lease term includes periods covered by an option to terminate the lease. The Groupreassesses whether it is reasonably certain to exercise an extension option, purchase option, or not to exercise atermination option, upon the occurrence of either a significant event or a significant change in the circumstancesthat is within the control of the Group and affect whether the Group is reasonably certain to exercise thecorresponding option.
As lessee
For general accounting practice of the Group as a lessee, please see Items 14 and 19 of Note III.
Lease modificationsA change in the scope of a lease, or the consideration for a lease, that was not part of the original terms and conditionsof the lease, for example, adding or terminating the right to use one or more underlying assets, or extending orshortening the contractual lease term.
The Group accounts for a lease modification as a separate lease if both:
III. Principal Accounting Policies and Accounting Estimates (Cont’d)
27. Leases (Cont’d)
(1) the modification increases the scope of the lease by adding the right to use one or more underlying assets;
(2) the consideration for the lease increases by an amount commensurate with the stand-alone price for the increasein scope and any appropriate adjustments to that stand-alone price to reflect the circumstances of the particularcontract.
For a lease modification that is not accounted for as a separate lease, at the effective date of the lease modificationthe Group remeasures the lease liability by discounting the revised lease payments using a revised discount rate.The revised discount rate is determined as the interest rate implicit in the lease for the remainder of the lease term,if that rate can be readily determined, or the lessee’s incremental borrowing rate at the effective date of themodification, if the interest rate implicit in the lease cannot be readily determined.
For a lease modification that is not accounted for as a separate lease, the Group accounts for the remeasurement ofthe lease liability by:
(1) decreasing the carrying amount of the right-of-use asset to reflect the partial or full termination of the lease forlease modifications that decrease the scope of the lease. The Group recognizes in profit or loss any gain or lossrelating to the partial or full termination of the lease.
(2) making a corresponding adjustment to the right-of-use asset for all other lease modifications.
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 that transfers substantially all the risks and rewards incidental to ownership of a leased asset on itscommencement date is a finance lease. And all the other leases are operating leases.
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.
For any modification to an operating lease, the Group treats it as a new lease from the effective date of themodification, and the received or receivable lease payments related to the lease prior to the modification aretreated as lease payments of the new lease.
III. Principal Accounting Policies and Accounting Estimates (Cont’d)
28. 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.
29. Profit distribution
The Company’s cash dividends are recognized as liabilities upon the approval by the general meeting.
30. 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.
31. 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.
32. 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. TheGroup measures assets or liabilities at fair value with the assumption that the orderly transaction of asset disposalor the transfer of liabilities takes place in the major market for the relevant assets or liabilities. Where there is nomajor market, the Group assumes such transaction takes place in the most favourable market for the relevant assetsor liabilities. The major market (or most favourable market) is a trading market which the Group has access to onthe measurement date. The Group adopts assumptions used by market participants when they price the asset orliability with the aim of maximising its economic benefits.
III. Principal Accounting Policies and Accounting Estimates (Cont’d)
32. Fair value measurement (cont’d)
The Group adopts valuation techniques that are appropriate in the current circumstances and supported by sufficientusable data and other information. Observable input will be used first and foremost. Unobservable input will onlybe used when it is not possible or practicable to obtain observable input.
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.
33. 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.
III. Principal Accounting Policies and Accounting Estimates (Cont’d)
33. Significant accounting judgements and estimates (cont’d)
Judgement (cont’d)
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.
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.
III. Principal Accounting Policies and Accounting Estimates (Cont’d)
33. Significant accounting judgements and estimates (cont’d)
Estimation uncertainty (cont’d)
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.19.
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.
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.
III. Principal Accounting Policies and Accounting Estimates (Cont’d)
33. Significant accounting judgements and estimates (cont’d)
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.
Provisions (cont’d)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.
VI. Taxation
1. Principal tax items and tax rates
Value-added tax (VAT) – The output tax of the taxable income is calculated at the rate of 13% and 6% and
VAT is levied according to the difference after deducting the input tax which isallowed to be deducted in the current period.
City maintenanceand construction tax – Levied at 7% of the turnover tax actually paid
Education surcharge – Levied at 3% of the turnover tax actually paid
Local educationSurcharge – Levied at 2% of the turnover tax actually paid
Corporate income tax – Corporate income tax of the Group’s subsidiaries located in Mainland China shall
be levied at 25% of the taxable income (except for the preferential taxation asdescribed in Note IV 2). Subsidiaries located in Hong Kong shall calculate and paythe corporate income tax at 16.5% of the taxable income, and subsidiaries registeredoverseas shall apply the corporate income tax rate as required by the local tax law.The details are as follows:
| Name of subsidiaries | Income tax rate |
| Dong Fang Precision (Netherland) Cooperatief U.A.（“Dongfang Precision (Netherland)”） | 20% |
| Fosber S.p.A.（“Fosber Group”） | 24% |
| Fosber America, Inc.（“Fosber America”） | 21% |
| EDF Europe s.r.l.（“EDF”） | 24% |
| Tiru?a Group Industrial, S.L.（“Tiru?a Group”） | 28% |
| Tiru?a America inc. (“Tiru?a America”) Quantum Corrugated S.r.l. ( QCorr) Tiru?a S.L.U. | 21% 24% 28% |
| Tratatamientos Industriales Tiru?a S.A.U. | 28% |
| Tiru?a France SARL | 15% |
| SCI Candan | 15% |
Property tax – Ad valorem tax: levied at 1.2% of the remaining value after deducting 30% from the originalvalue of the property; Tax levied from rent: levied at 12% of the rental income.
2. Tax concessions
On 9 December 2020, 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.: GR202044007667) 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%.
Suzhou Parsun Power Machine Co., Ltd. ("Parsun Power"), a subsidiary of the Company, passed the high-techenterprise review by the Department of Science and Technology of Jiangsu Province, Department of Finance ofJiangsu Province and Jiangsu Provincial Tax Service of State Taxation Administration on 7 November 2019 andobtained a High-tech Enterprise Certificate (certificate no.: GR201932000339) 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%.
Guangdong Fosber Intelligent Equipment Co., Ltd. ("Fosber Asia"), a subsidiary of the Company, passed the high-tech enterprise review by the Department of Science and Technology of Guangdong Province, Department ofFinance of Guangdong Province and Guangdong Provincial Tax Service of State Taxation Administration on 20December 2021 and obtained a High-tech Enterprise Certificate (certificate no.: GR202144003984) jointly issuedby the above authorities, with a validity of three years, during which the subsidiary paid the corporate income taxat a reduced rate of 15%.
Shenzhen Wonder Printing System Co., Ltd. ("Shenzhen Wonder") , a subsidiary of the Company, was approvedand granted by the Shenzhen Science and Technology Innovation Committee, Shenzhen Finance Bureau, andShenzhen Tax Service, State Taxation Administration the High-Tech Enterprise Certificate (certificate No.:
GR201944204259) on 9 December 2019, which is valid for three years. During the period of validity, the enterpriseincome tax is calculated and paid at a reduced tax rate of 15%.
VII. Notes to the Consolidated Financial Statements
1. Cash and bank balances
Unit: RMB yuan
| Item | Closing balance | Opening balance |
| Cash on hand | 439,819.27 | 233,281.32 |
| Cash at banks | 1,158,706,979.62 | 999,389,151.51 |
| Other cash balances | 83,257,108.07 | 664,713,906.52 |
| Total | 1,242,403,906.96 | 1,664,336,339.35 |
| Of which: Total amount overseas | 509,500,925.79 | 456,521,434.93 |
| Total restricted amount as collateral, pledge or frozen | 14,680,985.43 | 405,032,563.61 |
Other information:
The fund deposited abroad with restrictions on repatriation was equivalent to RMB6,690,290.20 (31 December 2021:
RMB16,374,076.37).
Current bank deposits earn interest income based on interest rates for current deposits. The period for short-term time deposits is usually7 days, based on the Group’s cash requirement. The short-term time deposits earn interest income based on the corresponding interestrates for time deposits.
2. Financial assets held for trading
Unit: RMB yuan
| Item | Closing balance | Opening balance |
| Financial assets at fair value through profit or loss | 830,381,698.55 | 788,185,521.57 |
| Of which: | ||
| Investments in trust products | 3,586,206.91 | 6,631,573.01 |
| Funds management plans | 504,021,330.29 | 628,007,924.74 |
| Derivative financial assets | 12,470,814.57 | 12,936,500.63 |
| Investments in bank’s wealth management products | 83,553,882.51 | 140,609,523.19 |
| Stock investments | 226,749,464.27 | |
| Of which: | ||
| Total | 830,381,698.55 | 788,185,521.57 |
Other information:
3. Notes receivable
(1) Notes receivable by type
Unit: RMB yuan
| Item | Closing balance | Opening balance |
| Bank acceptance notes | 23,793,263.47 | 13,272,025.04 |
| Total | 23,793,263.47 | 13,272,025.04 |
Where allowances for doubtful notes receivable are established using the general model of expected credit loss, please discloseallowance information as other receivables:
□ Applicable ? Not applicable
(2) Notes receivable that were endorsed or discounted but undue on the balance sheet date at the period-end
Unit: RMB yuan
| Item | Closing derecognized amount | Closing un-derecognized amount |
| Bank acceptance notes | 4,440,690.00 | |
| Total | 4,440,690.00 |
4. Accounts receivable
(1) Accounts receivable by type
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 | 2,488,100.00 | 0.32% | 2,488,100.00 | 100.00% | 0.00 | 7,038,180.40 | 0.92% | 7,038,180.40 | 100.00% | 0.00 |
| Of which: | ||||||||||
| Accounts receivable which are | 2,488,100.00 | 0.32% | 2,488,100.00 | 100.00% | 0.00 | 7,038,180.40 | 0.92% | 7,038,180.40 | 100.00% | 0.00 |
| substantial individually and for which the allowances are established individually | ||||||||||
| Accounts receivable for which the allowances are established by group | 776,889,711.30 | 99.68% | 23,351,139.42 | 3.01% | 753,538,571.88 | 760,325,577.49 | 99.08% | 19,189,929.40 | 2.52% | 741,135,648.09 |
| Of which: | ||||||||||
| Accounts receivable for which the allowances are established by group with similar credit risk characteristics | 776,889,711.30 | 99.68% | 23,351,139.42 | 3.01% | 753,538,571.88 | 760,325,577.49 | 99.08% | 19,189,929.40 | 2.52% | 741,135,648.09 |
| Total | 779,377,811.30 | 100.00% | 25,839,239.42 | 753,538,571.88 | 767,363,757.89 | 100.00% | 26,228,109.80 | 741,135,648.09 |
Accounts receivable for which the allowances are established individually:
Unit: RMB yuan
| Entity | Closing balance | |||
| Gross amount | Allowance | Allowance percentage | Reason for allowance | |
| Customer 1 | 641,600.00 | 641,600.00 | 100.00% | Customer’s inability to settle the amount due |
| Customer 2 | 608,800.00 | 608,800.00 | 100.00% | Customer’s inability to settle the amount due |
| Customer 3 | 15,700.00 | 15,700.00 | 100.00% | Customer’s inability to settle the amount due |
| Customer 4 | 939,000.00 | 939,000.00 | 100.00% | Customer’s inability to settle the amount due |
| Customer 5 | 283,000.00 | 283,000.00 | 100.00% | Customer’s inability to settle the amount due |
| Total | 2,488,100.00 | 2,488,100.00 | ||
Accounts receivable for which the allowances are established by group: Accounts receivable for which the allowances are establishedby group with similar credit risk characteristics
Unit: RMB yuan
| Item | Closing balance | ||
| Gross amount | Allowance | Allowance percentage | |
| Within 1 year (inclusive) | 672,268,861.95 | 9,563,198.25 | 1.42% |
| 1-2 years (including 2 years) | 78,122,315.49 | 2,612,864.58 | 3.34% |
| 2-3 years (including 3 years) | 12,762,914.51 | 845,680.95 | 6.63% |
| 3-4 years (including 4 years) | 9,087,177.45 | 5,797,265.03 | 63.80% |
| 4-5 years (including 5 years) | 617,403.10 | 501,091.81 | 81.16% |
| Over 5 years | 4,031,038.80 | 4,031,038.80 | 100.00% |
| Total | 776,889,711.30 | 23,351,139.42 | |
Grouping basis:
Where allowances for doubtful accounts receivable are established using the general model of expected credit loss, please discloseallowance information as other receivables.
□ Applicable ? Not applicable
By aging:
Unit: RMB yuan
| Aging | Closing balance |
| Within 1 year (inclusive) | 672,268,861.95 |
| 1-2 years | 78,122,315.49 |
| 2-3 years | 12,762,914.51 |
| Over 3 years | 16,223,719.35 |
| 3-4 years | 9,087,177.45 |
| 4-5 years | 1,556,403.10 |
| Over 5 years | 5,580,138.80 |
| Total | 779,377,811.30 |
(2) 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 | 26,228,109.80 | 2,543,603.49 | 4,336,799.37 | -642.75 | 1,403,682.75 | 25,839,239.42 |
| Total | 26,228,109.80 | 2,543,603.49 | 4,336,799.37 | -642.75 | 1,403,682.75 | 25,839,239.42 |
Of which, substantial reversed amounts of allowances in the current period:
Unit: RMB yuan
| Entity | Reversed amount | Way of recovery |
(3) Top five entities with respect to accounts receivable
Unit: RMB yuan
| Entity | Closing balance of accounts receivable | As a % of the closing balance of total accounts receivable | Closing balance of allowances |
| Customer 6 | 55,517,964.76 | 7.12% | 484,398.46 |
| Customer 7 | 37,041,130.82 | 4.75% | 245,793.50 |
| Customer 8 | 30,111,463.29 | 3.86% | 411,989.27 |
| Customer 9 | 27,906,402.52 | 3.58% | 189,899.35 |
| Customer 10 | 20,244,849.70 | 2.60% | 87,964.62 |
| Total | 170,821,811.09 | 21.91% |
5. Receivables financing
Unit: RMB yuan
| Item | Closing balance | Opening balance |
| Bank acceptance notes | 32,869,739.53 | 30,692,449.25 |
| Total | 32,869,739.53 | 30,692,449.25 |
Changes in receivables financing and in their fair value in the current period:
□ Applicable ? Not applicable
Where allowances for doubtful receivables financing are established using the general model of expected credit loss, please discloseallowance information as other receivables:
□ Applicable ? Not applicable
Other information:
Notes receivable that were endorsed or discounted but undue on the balance sheet date at the period-end:
| Item | Closing balance | Opening balance | ||
| Derecognized | Un-derecognized | Derecognized | Un-derecognized | |
| Bank acceptance notes | 4,706,573.99 | 24,598,786.91 | ||
6. Prepayments
(1) Prepayments by aging
Unit: RMB yuan
| Aging | Closing balance | Opening balance | ||
| Amount | Percentage | Amount | Percentage | |
| Within 1 year | 41,597,831.49 | 97.14% | 33,901,158.84 | 99.19% |
| 1-2 years | 961,965.43 | 2.25% | 38,710.83 | 0.11% |
| 2-3 years | 162,708.25 | 0.38% | 144,972.14 | 0.42% |
| Over 3 years | 99,065.06 | 0.23% | 92,960.55 | 0.27% |
| Total | 42,821,570.23 | 34,177,802.36 | ||
(2) Top five entities with respect to prepayments
The closing balance of total prepayments to the top five entities amounted to RMB16,641,062.27, accounting for 38.86% of the closingbalance of the total prepayments.Other information：
7. Other receivables
Unit: RMB yuan
| Item | Closing balance | Opening balance |
| Other receivables | 82,380,620.44 | 71,363,166.84 |
| Total | 82,380,620.44 | 71,363,166.84 |
(1) Other receivables
1) Other receivables by nature
Unit: RMB yuan
| Nature | Closing gross amount | Opening gross amount |
| Amount for transfer of equity investments | 36,794,100.00 | 37,903,425.00 |
| Prepaid service charges | 10,716,133.42 | 10,386,867.47 |
| Security deposits | 13,524,732.95 | 5,452,788.82 |
| Export tax refunds | 4,363,961.18 | 912,287.93 |
| Employee loans and petty cash | 3,966,542.94 | 4,537,207.00 |
| Others | 17,981,688.66 | 17,457,275.22 |
| Total | 87,347,159.15 | 76,649,851.44 |
2) 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 2022 | 4,786,684.60 | 500,000.00 | 5,286,684.60 | |
| Balance as at 1 January 2022 in the current period | ||||
| Established in the current period | 3,182.86 | 3,182.86 | ||
| Written off in the current period | 299,132.36 | 299,132.36 | ||
| Other changes | -24,196.40 | -24,196.40 | ||
| Balance as at 30 June 2022 | 4,466,538.70 | 500,000.00 | 4,966,538.70 |
Balances with significant changes in loss allowances in the current period:
□ Applicable ? Not applicable
By aging:
Unit: RMB yuan
| Aging | Closing balance |
| Within 1 year (inclusive) | 43,744,018.73 |
| 1-2 years | 3,416,388.16 |
| 2-3 years | 2,086,469.79 |
| Over 3 years | 38,100,282.47 |
| 3-4 years | 37,007,649.58 |
| 4-5 years | 226,236.64 |
| Over 5 years | 866,396.25 |
| Total | 87,347,159.15 |
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 other receivables | 5,286,684.60 | 3,182.86 | 299,132.36 | -24,196.39 | 4,966,538.71 | |
| Total | 5,286,684.60 | 3,182.86 | 299,132.36 | -24,196.39 | 4,966,538.71 | |
Of which, substantial reversed amounts of allowances in the current period:
Unit: RMB yuan
| Entity | Reversed amount | Way of recovery |
4) 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 | Amount for transfer of equity investments | 36,794,100.00 | 3-4 years | 42.12% | 1,843,534.11 |
| Entity 2 | Security deposits | 5,256,300.00 | Within 1 year | 6.02% | |
| Entity 3 | Export tax refunds | 4,363,961.18 | Within 1 year | 5.00% | |
| Entity 4 | Litigation funds receivable | 2,953,327.50 | Within 1 year | 3.38% | |
| Entity 5 | Security deposits | 1,630,000.00 | 2-3 years | 1.87% |
| Total | 50,997,688.68 | 58.39% | 1,843,534.11 |
8. 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 valuation allowances or impairment allowances for contract performance costs | Carrying amount | Gross amount | Inventory valuation allowances or impairment allowances for contract performance costs | Carrying amount | |
| Raw materials | 501,146,269.47 | 16,891,701.43 | 484,254,568.04 | 365,907,967.74 | 9,445,201.52 | 356,462,766.22 |
| Work-in-progress | 551,830,402.55 | 16,439,086.11 | 535,391,316.44 | 332,359,371.92 | 16,467,899.02 | 315,891,472.90 |
| Finished goods | 86,332,716.64 | 3,817,670.00 | 82,515,046.64 | 80,356,852.12 | 7,117,802.59 | 73,239,049.53 |
| Product deliveries | 57,616,500.58 | 57,616,500.58 | 48,592,282.34 | 48,592,282.34 | ||
| Semi-finished goods | 18,670,977.32 | 838,463.25 | 17,832,514.07 | 72,050,412.10 | 1,004,893.76 | 71,045,518.34 |
| Materials consigned for processing | 2,942,640.09 | 2,942,640.09 | 2,048,924.14 | 2,048,924.14 | ||
| Total | 1,218,539,506.65 | 37,986,920.79 | 1,180,552,585.86 | 901,315,810.36 | 34,035,796.89 | 867,280,013.47 |
(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 | 9,445,201.52 | 6,557,698.75 | 2,057,250.22 | 1,168,449.06 | 16,891,701.43 | |
| Work-in-progress | 16,467,899.02 | 28,812.91 | 16,439,086.11 | |||
| Finished goods | 7,117,802.59 | 3,300,132.59 | 3,817,670.00 | |||
| Semi-finished goods | 1,004,893.76 | 166,430.51 | 838,463.25 | |||
| Total | 34,035,796.89 | 6,557,698.75 | 2,057,250.22 | 4,635,012.16 | 28,812.91 | 37,986,920.79 |
9. Contract assets
Unit: RMB yuan
| Item | Closing balance | Opening balance | ||||
| Gross amount | Impairment allowance | Carrying amount | Gross amount | Impairment allowance | Carrying amount | |
| Contract assets | 6,212,959.35 | 6,212,959.35 | 25,144,462.49 | 730,344.85 | 24,414,117.64 | |
| Total | 6,212,959.35 | 6,212,959.35 | 25,144,462.49 | 730,344.85 | 24,414,117.64 | |
Where impairment allowances for contract assets are established using the general model of expected credit loss, please discloseallowance information as other receivables:
□ Applicable ? Not applicable
Impairment allowances for contract assets in the current period:
Unit: RMB yuan
| Item | Established in the current period | Reversed in the current period | Written off/charged off in the current period | Reason |
| Impairment allowances for contract assets | 730,344.85 | |||
| Total | 730,344.85 | —— |
Other information:
10. Current portion of non-current assets
Unit: RMB yuan
| Item | Closing balance | Opening balance |
| Current portion of long-term receivables | 1,878,250.00 | 4,595,000.00 |
| Current portion of large-amount deposit certificates | 103,790,000.00 | |
| Current portion of long-term security deposits | 305,225,000.00 | |
| Total | 307,103,250.00 | 108,385,000.00 |
11. Other current assets
Unit: RMB yuan
| Item | Closing balance | Opening balance |
| Input value-added tax (VAT) to be deducted | 565,505.37 | 3,358,040.70 |
| Overpaid VAT | 31,198,839.43 | 18,681,339.03 |
| Tax repayments | 8,012,965.14 | 8,202,256.30 |
| Others | 1,778,802.53 | 1,882,370.96 |
| Total | 41,556,112.47 | 32,124,006.99 |
Other information：
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 | 143,750.00 | 143,750.00 | |||||
| Total | 143,750.00 | 143,750.00 | |||||
Balances with significant changes in loss allowances in the current period:
□ Applicable ? Not applicable
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 | 74,780,345.62 | 1,279,980.62 | 76,060,326.24 | ||||||||
| Talleres Tapre | 1,593,382.09 | 18,514.31 | 1,611,896.40 | ||||||||
| Nanjing Profeta | 8,403,868.96 | 8,403,868.96 | |||||||||
| Subtotal | 84,777,596.67 | 1,279,980.62 | 18,514.31 | 86,076,091.60 | |||||||
| Total | 84,777,596.67 | 1,279,980.62 | 18,514.31 | 86,076,091.60 |
Other information
14. Other non-current financial assets
Unit: RMB yuan
| Item | Closing balance | Opening balance |
| Financial assets at fair value through profit or loss | 269,800,550.62 | 162,523,519.41 |
| Total | 269,800,550.62 | 162,523,519.41 |
Other information：
15. Fixed assets
Unit: RMB yuan
| Item | Closing balance | Opening balance |
| Fixed assets | 540,843,950.15 | 544,180,159.09 |
| Total | 540,843,950.15 | 544,180,159.09 |
(1) Particulars about fixed assets
Unit: RMB yuan
| Item | Buildings and constructions | Machinery | Transportation equipment | Office equipment/electronic equipment/other equipment | Total |
| I. Gross amount | |||||
| 1. Opening balance | 574,983,938.89 | 448,050,277.32 | 30,835,181.82 | 57,871,455.89 | 1,111,740,853.92 |
| 2. Increase in | 549,168.29 | 11,576,446.35 | 5,110,267.10 | 3,557,374.35 | 20,793,256.09 |
| the current period | |||||
| (1) Purchases | 549,168.29 | 5,901,881.37 | 3,598,854.20 | 3,026,335.41 | 13,076,239.27 |
| (2) Transfers from construction in progress | 1,543,375.69 | 1,543,375.69 | |||
| (3) Increase in business combination | 4,131,189.29 | 1,307,079.90 | 66,669.99 | 5,504,939.18 | |
| (4) Effect of exchange rate movements | 204,333.00 | 464,368.95 | 668,701.95 | ||
| 3. Decrease in the current period | 957,973.31 | 8,844,864.39 | 1,206,753.93 | 2,402,380.83 | 13,411,972.46 |
| (1) Disposal or retirement | 1,602,661.81 | 1,206,753.93 | 2,402,380.83 | 5,211,796.57 | |
| (2) Transferred out in disposal of subsidiary | |||||
| (3) Effect of exchange rate movements | 957,973.31 | 7,242,202.58 | 8,200,175.89 | ||
| 4. Closing balance | 574,575,133.87 | 450,781,859.28 | 34,738,694.99 | 59,026,449.41 | 1,119,122,137.55 |
| II. Accumulated depreciation | |||||
| 1. Opening balance | 179,915,645.47 | 336,782,386.13 | 19,027,736.61 | 31,834,926.62 | 567,560,694.83 |
| 2. Increase in the current period | 8,032,984.11 | 9,365,846.49 | 1,606,912.19 | 3,856,498.25 | 22,862,241.04 |
| (1) Provision | 8,032,984.11 | 9,365,846.49 | 1,500,790.02 | 3,621,232.93 | 22,520,853.55 |
| (2) Increase in business combination | |||||
| (3) Effect of exchange rate movements | 106,122.17 | 235,265.32 | 341,387.49 | ||
| 3. Decrease in the current period | 1,084,653.99 | 8,088,237.41 | 2,132,913.53 | 838,943.54 | 12,144,748.47 |
| (1) Disposal | 1,454,036.81 | 2,132,913.53 | 838,943.54 | 4,425,893.88 |
| or retirement | |||||
| (2) Transferred out in disposal of subsidiary | |||||
| (3) Effect of exchange rate movements | 1,084,653.99 | 6,634,200.60 | 7,718,854.59 | ||
| 4. Closing balance | 186,863,975.59 | 338,059,995.21 | 18,501,735.27 | 34,852,481.33 | 578,278,187.40 |
| III. Impairment allowances | |||||
| 1. Opening balance | |||||
| 2.Increase in the current period | |||||
| (1) Established | |||||
| (2) Effect of exchange rate movements | |||||
| 3. Decrease in the current period | |||||
| (1) Disposal or retirement | |||||
| (2) Effect of exchange rate movements | |||||
| 4. Closing balance | |||||
| IV. Carrying amount | |||||
| 1. Closing carrying amount | 387,711,158.28 | 112,721,864.07 | 16,236,959.72 | 24,173,968.08 | 540,843,950.15 |
| 2. Opening carrying amount | 395,068,293.42 | 111,267,891.19 | 11,807,445.21 | 26,036,529.27 | 544,180,159.09 |
16. Construction in progress
Unit: RMB yuan
| Item | Closing balance | Opening balance |
| Construction in progress | 36,036,409.77 | 12,298,259.58 |
| Total | 36,036,409.77 | 12,298,259.58 |
(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 | 34,132,661.09 | 34,132,661.09 | 11,582,347.78 | 11,582,347.78 | ||
| Equipment installation | 1,903,748.68 | 1,903,748.68 | 715,911.80 | 715,911.80 | ||
| Total | 36,036,409.77 | 36,036,409.77 | 12,298,259.58 | 12,298,259.58 | ||
(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 |
| Fosber-plant construction | 204,646.15 | 5,015,646.12 | 108,994.75 | 4,874.96 | 5,106,422.56 | Other | ||||||
| Dongfang Precision - plant construction | 7,759,142.53 | 2,035,342.08 | 2,884,062.59 | 4,919,404.67 | Other | |||||||
| Yinglian- plant construction | 50,000,000.00 | 8,548,699.09 | 14,423,417.79 | 22,972,116.88 | Other | |||||||
| Others | 1,509,572.26 | 2,963,274.34 | 1,434,380.94 | 3,038,465.66 | Other | |||||||
| Total | 57,759,142.53 | 12,298,259.58 | 25,286,400.84 | 1,543,375.69 | 4,874.96 | 36,036,409.77 |
17. Right-of-use assets
Unit: RMB yuan
| Item | Buildings and constructions | Transportation equipment | Total |
| I. Gross amount | |||
| 1. Opening balance | 86,255,355.01 | 10,568,691.42 | 96,824,046.43 |
| 2. Increase in the current period | 7,740,282.89 | 285,155.72 | 8,025,438.61 |
| (1) Increase in the current period | 1,659,465.12 | 1,659,465.12 | |
| (2) Increase in business combination | 6,080,817.77 | 6,080,817.77 | |
| (3) Effect of exchange rate movements | 285,155.72 | 285,155.72 | |
| 3. Decrease in the current period | 1,733,404.64 | 1,733,404.64 | |
| Effect of exchange rate movements | 1,733,404.64 | 1,733,404.64 | |
| 4. Closing balance | 92,262,233.26 | 10,853,847.14 | 103,116,080.40 |
| II. Accumulated depreciation | |||
| 1. Opening balance | 12,444,892.40 | 3,992,321.12 | 16,437,213.52 |
| 2. Increase in the current period | 7,094,029.03 | 1,804,723.29 | 8,898,752.32 |
| (1) Established | 7,094,029.03 | 1,804,723.29 | 8,898,752.32 |
| (2) Increase in business combination | |||
| (3) Effect of exchange rate movements | |||
| 3. Decrease in the current period | 232,250.55 | 135,296.83 | 367,547.38 |
| (1) Disposal | |||
| Effect of exchange rate movements | 232,250.55 | 135,296.83 | 367,547.38 |
| 4. Closing balance | 19,306,670.88 | 5,661,747.58 | 24,968,418.46 |
| 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 | 72,955,562.38 | 5,192,099.56 | 78,147,661.94 |
| 2. Opening carrying amount | 73,810,462.61 | 6,576,370.30 | 80,386,832.91 |
Other information：
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 | 114,739,730.08 | 83,813,525.48 | 15,446,573.78 | 179,201,859.84 | 393,201,689.18 | |
| 2. Increase in the current period | 22,235,958.49 | 2,447,105.69 | 24,683,064.18 | |||
| (1) Purchases | 377,358.49 | 2,447,105.69 | 2,824,464.18 | |||
| (2) Internal R&D | ||||||
| (3) Increase in business combination | 21,858,600.00 | 21,858,600.00 | ||||
| (4) Effect of exchange rate movements | ||||||
| 3. Decrease in the current period | 2,470,651.83 | 452,077.10 | 4,297,922.79 | 7,220,651.72 | ||
| (1) Disposal |
| (2) Transferred out in disposal of subsidiary | ||||||
| (3) Effect of exchange rate movements | 2,470,651.83 | 452,077.10 | 4,297,922.79 | 7,220,651.72 | ||
| 4. Closing balance | 114,739,730.08 | 103,578,832.14 | 14,994,496.68 | 177,351,042.74 | 410,664,101.64 | |
| II. Accumulated amortization | ||||||
| 1. Opening balance | 22,218,954.91 | 52,413,720.96 | 24,850,025.69 | 99,482,701.56 | ||
| 2. Increase in the current period | 1,223,121.60 | 5,554,027.41 | 4,450,805.61 | 11,227,954.62 | ||
| (1) Provision | 1,223,121.60 | 5,554,027.41 | 4,450,805.61 | 11,227,954.62 | ||
| (2) Increase in business combination | ||||||
| (3) Effect of exchange rate movements | ||||||
| 3. Decrease in the current period | 1,576,845.96 | 360,819.01 | 1,937,664.97 | |||
| (1) Disposal | ||||||
| (2) Transferred out in disposal of subsidiary | ||||||
| (3) Effect of exchange rate movements | 1,576,845.96 | 360,819.01 | 1,937,664.97 | |||
| 4. Closing | 23,442,076.51 | 56,390,902.41 | 28,940,012.29 | 108,772,991.21 |
| balance | ||||||
| III. Impairment allowances | ||||||
| 1. Opening balance | ||||||
| 2. Increase in the current period | ||||||
| (1) Established | ||||||
| (2) Effect of exchange rate movements | ||||||
| 3. Decrease in the current period | ||||||
| (1) Disposal | ||||||
| (2) Effect of exchange rate movements | ||||||
| 4. Closing balance | ||||||
| IV. Carrying amount | ||||||
| 1. Closing carrying amount | 91,297,653.57 | 47,187,929.73 | 14,994,496.68 | 148,411,030.45 | 301,891,110.43 | |
| 2. Opening carrying amount | 92,520,775.17 | 31,399,804.52 | 15,446,573.78 | 154,351,834.15 | 293,718,987.62 |
As at the period-end, intangible assets arising from internal R&D accounted for 3.58% of the carrying amount of total intangible assets.
19. Goodwill
(1) Gross amounts of goodwill
Unit: RMB yuan
| Investee or item generating | Opening balance | Increase in the current period | Decrease in the current period | Closing balance |
| goodwill | ||||||
| Investee or item generating goodwill | Opening balance | Generated due to business combination | Effect of exchange rate movements | Disposal | Effect of exchange rate movements | Closing balance |
| Parsun Power | 208,031,946.10 | 208,031,946.10 | ||||
| EDF | 63,383,214.71 | 1,855,045.67 | 61,528,169.04 | |||
| Fosber Group | 148,224,623.58 | 4,338,111.41 | 143,886,512.17 | |||
| QCorr | 12,567,632.43 | 367,818.72 | 12,199,813.71 | |||
| Shenzhen Wonder | 144,922,168.99 | 144,922,168.99 | ||||
| Total | 432,207,416.82 | 144,922,168.99 | 6,560,975.80 | 570,568,610.01 |
(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 | ||
| Investee or item generating goodwill | Opening balance | Established | Effect of exchange rate movements | Disposal | Effect of exchange rate movements | Closing balance |
| Parsun Power | 61,855,054.35 | 61,855,054.35 | ||||
| EDF | 63,383,214.71 | 1,855,045.67 | 61,528,169.04 | |||
| Total | 125,238,269.06 | 1,855,045.67 | 123,383,223.39 | |||
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 | 3,070,959.67 | 101,799.80 | 609,557.80 | 2,563,201.67 | |
| Expenditures on plant supporting engineering | 1,094,117.37 | 118,569.49 | 176,741.81 | 1,035,945.05 | |
| Internet access for offices | 968,696.77 | 87,517.52 | 881,179.25 | ||
| Amortization of lease assets | 57,918.55 | 57,918.55 | |||
| Office decoration expenditures | 2,463,148.78 | 3,339,373.12 | 502,582.62 | 5,299,939.28 |
| Amortization of moulds | 4,213,276.71 | 1,807,643.06 | 2,063,579.33 | 3,957,340.44 | |
| CE certification fee | 94,009.22 | 352,235.95 | 33,903.87 | 412,341.30 | |
| Total | 11,962,127.07 | 5,719,621.42 | 3,473,882.95 | 14,207,865.54 |
Other information
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 | 30,981,534.21 | 6,637,985.29 | 27,487,561.72 | 6,769,391.56 |
| Internal unrealized profit | 11,859,951.60 | 2,846,388.38 | ||
| Deductible loss | 470,147,709.27 | 112,839,618.41 | 487,263,663.55 | 110,651,029.11 |
| Credit impairment allowances | 28,845,310.63 | 6,654,695.57 | 29,574,977.76 | 7,004,793.92 |
| Deferred income | 48,714,911.85 | 10,644,700.49 | 50,391,274.95 | 10,996,777.94 |
| Provisions—after-sales maintenance service charges | 93,840,086.46 | 23,647,582.66 | 110,759,543.46 | 27,917,753.88 |
| Accrued expenses | 23,644,118.52 | 3,667,840.81 | 25,860,319.66 | 3,911,857.71 |
| Equity incentives | 53,801,978.97 | 7,515,238.72 | 40,413,913.40 | 5,628,337.80 |
| Effect of the new lease accounting standard | 1,090,988.10 | 206,825.57 | 1,957,313.78 | 438,435.98 |
| Others | 82,895,591.18 | 23,830,482.83 | 83,873,243.64 | 25,583,084.08 |
| Total | 833,962,229.19 | 195,644,970.35 | 869,441,763.52 | 201,747,850.36 |
(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 | 51,936,212.18 | 9,262,976.54 | 31,042,086.34 | 6,347,331.46 |
| Depreciation difference of fixed assets | 14,910,299.58 | 4,009,760.04 | 14,439,128.26 | 3,888,612.02 |
| Financial assets at fair value through profit or loss | 35,519,608.26 | 5,212,438.60 | 35,395,813.71 | 5,204,143.87 |
| Others | 48,666,086.92 | 7,595,649.99 | 46,011,729.25 | 7,809,378.02 |
| Total | 151,032,206.94 | 26,080,825.17 | 126,888,757.56 | 23,249,465.37 |
(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 period-end | Closing balance of deferred tax assets or liabilities after offsetting | Offset amount between deferred tax assets and liabilities as at the period-begin | Opening balance of deferred tax assets or liabilities after offsetting |
| Deferred tax assets | 23,470,111.62 | 172,174,858.73 | 21,502,327.42 | 180,245,522.94 |
| Deferred tax liabilities | 23,470,111.62 | 2,610,713.55 | 21,502,327.42 | 1,747,137.95 |
(4) Breakdown of deferred tax assets unrecognized
Unit: RMB yuan
| Item | Closing balance | Opening balance |
| Deductible temporary differences | 9,166,596.72 | 8,615,142.53 |
| Deductible losses | 889,576,840.53 | 869,889,774.71 |
| Total | 898,743,437.25 | 878,504,917.24 |
(5) Deductible losses not recognized as deferred tax assets will expire as follows
Unit: RMB yuan
| Year | Closing amount | Opening amount | Remark |
| 2022 | 8,615,142.53 | 8,615,142.53 | |
| 2023 | 551,454.19 | ||
| 2024 | 834,076,473.87 | 834,076,473.87 | |
| 2025 | 35,813,300.84 | 35,813,300.84 | |
| 2026 | 19,687,065.82 | ||
| 2027 | |||
| Total | 898,743,437.25 | 878,504,917.24 |
Other information
22. Other non-current assets
Unit: RMB yuan
| Item | Closing balance | Opening balance | ||||
| Gross amount | Impairment allowance | Carrying amount | Gross amount | Impairment allowance | Carrying amount | |
| Prepayments for long-lived assets | 2,133,425.60 | 2,133,425.60 | ||||
| Principal and interest for security deposit for domestic bank to provide guarantee for loan from overseas bank | 300,150,000.00 | 300,150,000.00 | ||||
| Others | 6,135,228.00 | 6,135,228.00 | 4,446,841.54 | 4,446,841.54 | ||
| Total | 8,268,653.60 | 8,268,653.60 | 304,596,841.54 | 304,596,841.54 | ||
Other information：
23. Short-term borrowings
(1) Short-term borrowings by type
Unit: RMB yuan
| Item | Closing balance | Opening balance |
| Guaranteed loan | 176,738,256.00 | |
| Credit loan | 67,132,224.05 | 51,574,624.73 |
| Total | 67,132,224.05 | 228,312,880.73 |
Description of types of short-term borrowings:
24. Financial liabilities held for trading
Unit: RMB yuan
| Item | Closing balance | Opening balance |
| Financial liabilities held for trading | 115,096,944.17 | 110,746,939.04 |
| Of which: |
| Non-controlling interests put options | 109,179,395.52 | 110,746,939.04 |
| Derivative financial liabilities | 5,917,548.65 | |
| Of which: | ||
| Total | 115,096,944.17 | 110,746,939.04 |
Other information：
25. Notes payable
Unit: RMB yuan
| Type | Closing balance | Opening balance |
| Bank acceptance notes | 133,601,311.71 | 149,191,690.00 |
| Total | 133,601,311.71 | 149,191,690.00 |
As at the period-end, notes payable that were due but unpaid totaled RMB .
26. Accounts payable
(1) Breakdown of accounts payable
Unit: RMB yuan
| Item | Closing balance | Opening balance |
| Purchases of inventories | 635,824,636.01 | 618,943,392.87 |
| Others | 3,930,612.51 | 322,463.31 |
| Total | 639,755,248.52 | 619,265,856.18 |
27. Contract liabilities
Unit: RMB yuan
| Item | Closing balance | Opening balance |
| Contract liabilities | 719,487,278.58 | 405,842,932.51 |
| Total | 719,487,278.58 | 405,842,932.51 |
Amounts of and reasons for significant changes in carrying amounts during the Reporting Period:
Unit: RMB yuan
| Item | Amount of change | Reason for change |
28. Employee benefits payable
(1) Breakdown of employee benefits payable
Unit: RMB yuan
| Item | Opening balance | Increase in the current | Decrease in the current | Closing balance |
| period | period | |||
| I. Short-term benefits | 96,387,794.91 | 300,152,461.45 | 295,929,935.04 | 100,610,321.32 |
| II. Retirement benefits-defined contribution schemes | 7,421,988.67 | 39,587,653.19 | 42,813,445.83 | 4,196,196.03 |
| Total | 103,809,783.58 | 339,740,114.64 | 338,743,380.87 | 104,806,517.35 |
(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 | 90,585,519.60 | 267,478,035.18 | 264,040,779.77 | 94,022,775.01 |
| 2. Employee welfare | 4,599,852.75 | 13,549,548.50 | 12,692,015.36 | 5,457,385.89 |
| 3. Social security contributions | 587,926.96 | 16,597,008.62 | 16,474,061.31 | 710,874.27 |
| Including: medical insurance | 576,923.13 | 11,043,369.13 | 11,037,200.66 | 583,091.60 |
| Work injury insurance | 10,914.73 | 5,240,292.67 | 5,124,168.73 | 127,038.67 |
| Maternity insurance | 89.10 | 313,346.82 | 312,691.92 | 744.00 |
| 4. Housing funds | 15,749.64 | 2,071,399.03 | 2,085,998.67 | 1,150.00 |
| 5. Labour union funds and employee education funds | 598,745.96 | 456,470.12 | 637,079.93 | 418,136.15 |
| Total | 96,387,794.91 | 300,152,461.45 | 295,929,935.04 | 100,610,321.32 |
(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 | 7,421,853.15 | 39,495,565.77 | 42,729,279.20 | 4,188,139.72 |
| 2. Unemployment insurance | 135.52 | 92,087.42 | 84,166.63 | 8,056.31 |
| Total | 7,421,988.67 | 39,587,653.19 | 42,813,445.83 | 4,196,196.03 |
Other information
29. Tax payable
Unit: RMB yuan
| Item | Closing balance | Opening balance |
| Value-added tax | 2,659,692.86 | 25,459,136.69 |
| Corporate income tax | 12,867,190.79 | 22,054,501.83 |
| Individual income tax | 10,271,211.82 | 11,666,453.95 |
| City maintenance and construction tax | 520,298.36 | 691,680.71 |
| Education surcharge | 371,641.72 | 494,057.61 |
| Stamp duties | 29,811.20 | 55,317.40 |
| Property tax | 1,449,256.30 | 239,225.19 |
| Land use tax | 222,249.90 | 34,530.60 |
| Others | 917,105.36 | 6,442.26 |
| Total | 29,308,458.31 | 60,701,346.24 |
Other information
30. Other payables
Unit: RMB yuan
| Item | Closing balance | Opening balance |
| Dividends payable | 2,160,000.00 | |
| Other payables | 123,746,503.26 | 100,018,273.09 |
| Total | 125,906,503.26 | 100,018,273.09 |
(1) Dividends payable
Unit: RMB yuan
| Item | Closing balance | Opening balance |
| Dividends payable to ordinary shareholders | 2,160,000.00 | |
| Total | 2,160,000.00 |
Other information, including reasons for substantial dividends payable that are over one year:
(2) Other payables
1) Other payables by nature
Unit: RMB yuan
| Item | Closing balance | Opening balance |
| Accrued expenses | 42,096,551.87 | 47,435,654.91 |
| Repurchase obligation of restricted shares | 28,440,000.00 | 25,790,000.00 |
| Payables for settled lawsuit | 2,953,297.71 | 3,440,221.96 |
| Security deposits | 2,338,873.42 | 3,583,099.39 |
| Acquisition of equity investments | 24,760,000.00 |
| Others | 23,157,780.26 | 19,769,296.83 |
| Total | 123,746,503.26 | 100,018,273.09 |
31. Current portion of non-current liabilities
Unit: RMB yuan
| Item | Closing balance | Opening balance |
| Current portion of long-term borrowings | 262,525,708.99 | 21,342,646.25 |
| Current portion of lease liabilities | 24,179,681.03 | 17,153,078.58 |
| Total | 286,705,390.02 | 38,495,724.83 |
Other information：
32. Other current liabilities
Unit: RMB yuan
| Item | Closing balance | Opening balance |
| Output tax to be written off | 5,049,848.81 | 3,429,923.76 |
| Endorsed undue notes receivable | 4,440,690.00 | 9,391,823.29 |
| Others | 438,433.17 | 14,725.95 |
| Total | 9,928,971.98 | 12,836,473.00 |
33. Long-term borrowings
(1) Long-term borrowings by type
Unit: RMB yuan
| Item | Closing balance | Opening balance |
| Pledge loan | 234,717,324.51 | 2,440,696.11 |
| Guaranteed loan | 59,747,008.37 | 298,477,313.32 |
| Credit loan | 40,245,087.01 | 45,450,825.31 |
| Less: Current portion of long-term borrowings | -262,525,708.99 | -21,342,646.25 |
| Total | 72,183,710.90 | 325,026,188.49 |
Description of types of long-term borrowings:
Other information, including interest rate ranges:
34. Lease liabilities
Unit: RMB yuan
| Item | Closing balance | Opening balance |
| Lease liabilities | 80,805,992.28 | 82,366,634.45 |
| Less: Current portion of non-current liabilities | -24,179,681.03 | -17,153,078.58 |
| Total | 56,626,311.25 | 65,213,555.87 |
Other information：
35. Long-term employee benefits payable
(1) Long-term employee benefits payable
Unit: RMB yuan
| Item | Closing balance | Opening balance |
| I. Retirement benefits- net liabilities of defined benefit schemes | 13,022,074.87 | 16,083,170.32 |
| Total | 13,022,074.87 | 16,083,170.32 |
36. Provisions
Unit: RMB yuan
| Item | Closing balance | Opening balance | Reason for provision |
| Product quality warranty | 94,274,607.26 | 111,207,164.86 | |
| Others | 6,092,964.61 | 6,725,556.73 | |
| Total | 100,367,571.87 | 117,932,721.59 |
Other information, including key assumptions and estimates in relation to substantial provisions:
37. 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 | 12,190,311.66 | 558,330.00 | 11,631,981.66 | ||
| Total | 12,190,311.66 | 558,330.00 | 11,631,981.66 |
Deferred income associated with government grants:
Unit: RMB yuan
| Liabilities | Opening balance | New government grants in the current | Amount recognized in non-operating | Amount recognized in other income in | Amount offsetting costs and expenses in | Other changes | Closing balance | Asset/income-related |
| period | income in the current period | the current period | the current period | |||||
| Amortized deferred income (4 Mitsubishi machining centers and 3 vertical machining centers) | 12,190,311.66 | 558,330.00 | 11,631,981.66 | Asset-related |
Other information：
38. Other non-current liabilities
Unit: RMB yuan
| Item | Closing balance | Opening balance |
| Non-controlling interests options | 135,327,385.06 | 136,178,304.44 |
| Total | 135,327,385.06 | 136,178,304.44 |
Other information：
39. 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 | 1,331,938,167.00 | 1,331,938,167.00 | |||||
Other information：
40. Capital surplus
Unit: RMB yuan
| Item | Opening balance | Increase in the current period | Decrease in the current period | Closing balance |
| Capital premium (share premium) | 3,198,064,392.09 | 25,500,000.00 | 43,112.84 | 3,223,521,279.25 |
| Other capital surplus | 40,701,467.85 | 13,388,065.57 | 54,089,533.42 | |
| Total | 3,238,765,859.94 | 38,888,065.57 | 43,112.84 | 3,277,610,812.67 |
Other information, including changes in the current period and reasons for changes:
(1) The share-based payments by the Group in the period were recorded in shareholders’ equity, increasing capital surplus byRMB13,388,065.57.
(2) The Group acquired Shenzhen Wonder in the period, increasing capital surplus by RMB25,500,000.00.
(3) The share repurchase-related commissions and service charges incurred by the Company in the period reduced capital surplus byRMB43,112.84.
41. Treasury shares
Unit: RMB yuan
| Item | Opening balance | Increase in the current period | Decrease in the current period | Closing balance |
| Share repurchase | 494,335,503.94 | 215,563,545.78 | 709,899,049.72 | |
| Total | 494,335,503.94 | 215,563,545.78 | 709,899,049.72 |
Other information, including changes in the current period and reasons for changes:
The increase in treasury shares was driven by the share repurchases of the Company in the current period.
42. 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 | -647,558.19 | 440,788.86 | 440,788.86 | -206,769.33 | ||||
| Of which: Changes due to remeasurement of | -647,558.19 | 440,788.86 | 440,788.86 | -206,769.33 | ||||
| defined benefit schemes | ||||||||
| II. Other comprehensive income that will be reclassified to profit or loss | -32,675,104.79 | -13,279,391.56 | -11,994,193.17 | -1,285,198.39 | -44,669,297.96 | |||
| Differences arising from the translation of foreign currency-denominated financial statements | -32,631,132.72 | -13,279,391.56 | -11,994,193.17 | -1,285,198.39 | -44,625,325.89 | |||
| Others | -43,972.07 | -43,972.07 | ||||||
| Total other comprehensive income | -33,322,662.98 | -12,838,602.70 | -11,553,404.31 | -1,285,198.39 | -44,876,067.29 |
Other information, including the reconciliation from the valid portion of gains and losses on cash flow hedges to initial recognitionamounts of hedged items:
43. Special reserve
Unit: RMB yuan
| Item | Opening balance | Increase in the current period | Decrease in the current period | Closing balance |
| Expenses for safety production | 11,252,639.19 | 2,655,989.89 | 1,365,610.32 | 12,543,018.76 |
| Total | 11,252,639.19 | 2,655,989.89 | 1,365,610.32 | 12,543,018.76 |
Other information, including movements in the current period and reasons for the movements:
44. 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:
45. Retained earnings
Unit: RMB yuan
| Item | Current period | Last year |
| Retained earnings as at the end of the prior year before adjustment | -424,159,175.27 | -891,492,837.06 |
| Opening retained earnings after adjustment | -424,159,175.27 | -891,492,837.06 |
| Add: Net profit attributable to owners of the parent in the current period | 148,199,917.83 | 467,333,661.79 |
| Closing retained earnings | -275,959,257.44 | -424,159,175.27 |
46. Operating revenue and costs
Unit: RMB yuan
| Item | H1 2022 | H1 2021 | ||
| Revenue | Costs | Revenue | Costs | |
| Principal operations | 1,519,070,665.37 | 1,118,118,448.59 | 1,390,814,259.00 | 988,136,647.75 |
| Other operations | 16,544,968.89 | 15,925,817.63 | 9,744,705.18 | 3,318,827.11 |
| Total | 1,535,615,634.26 | 1,134,044,266.22 | 1,400,558,964.18 | 991,455,474.86 |
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 been contracted but notyet performed or fulfilled was RMB685,378,767.98, of which RMB685,378,767.98 is expected to be recognized during 2022-2023,RMB is expected to be recognized during , and RMB is expected to be recognized during .Other information
47. Taxes and surcharges
Unit: RMB yuan
| Item | H1 2022 | H1 2021 |
| City maintenance and construction tax | 2,403,719.33 | 1,406,514.54 |
| Education surcharge | 1,406,640.94 | 1,908,759.68 |
| Property tax | 2,245,774.79 | 2,265,213.88 |
| Land use tax | 239,515.20 | 269,856.60 |
| Vehicle and vessel use tax | 7,330.53 | 15,452.53 |
| Stamp duties | 446,737.45 | 376,940.91 |
| Others | 206,705.23 | 76,276.26 |
| Total | 6,956,423.47 | 6,319,014.40 |
Other information：
48. Selling expenses
Unit: RMB yuan
| Item | H1 2022 | H1 2021 |
| Commissions and agency fees | 15,772,413.20 | 21,675,931.57 |
| Employee benefits | 26,129,144.08 | 22,547,654.97 |
| Product quality warranties | 6,100,304.93 | 8,474,477.51 |
| Advertising and exhibition expenses | 2,671,213.87 | 2,527,612.71 |
| Travel expenses | 4,913,530.31 | 3,529,504.46 |
| Transportation expenses and miscellaneous costs associated with imports and exports | 156,392.08 | 5,247,059.73 |
| Office expenditures | 986,366.54 | 522,373.50 |
| Depreciation and amortization expenses | 497,868.97 | 555,637.82 |
| Other expenses | 4,866,566.68 | 3,470,309.05 |
| Total | 62,093,800.66 | 68,550,561.32 |
Other information：
49. Administrative expenses
Unit: RMB yuan
| Item | H1 2022 | H1 2021 |
| Employee benefits | 68,012,749.61 | 55,345,233.87 |
| Depreciation and amortization expenses | 16,883,464.07 | 17,355,893.58 |
| Intermediary expenses | 8,308,753.73 | 11,985,471.80 |
| Equity incentives | 13,388,065.57 | 17,386,141.80 |
| Office expenditures | 5,262,273.16 | 4,367,095.01 |
| Travel and business entertainment expenses | 4,778,309.22 | 4,633,656.20 |
| Conference expenses | 4,383,169.39 | 3,059,360.70 |
| Property management expenses | 1,244,898.31 | 1,720,497.48 |
| Other expenses | 11,030,709.85 | 13,908,003.12 |
| Total | 133,292,392.91 | 129,761,353.56 |
Other information
50. R&D expenses
Unit: RMB yuan
| Item | H1 2022 | H1 2021 |
| Employee benefits | 31,029,072.46 | 23,772,680.95 |
| Depreciation and amortization expenses | 5,794,158.26 | 8,386,778.88 |
| Material expenses | 2,142,276.51 | 9,415,709.52 |
| Other expenses | 5,166,718.07 | 6,650,403.53 |
| Total | 44,132,225.30 | 48,225,572.88 |
Other information
51. Finance costs
Unit: RMB yuan
| Item | H1 2022 | H1 2021 |
| Interest expenses | 5,668,853.58 | 4,899,967.92 |
| Less: Interest income | 8,770,967.42 | 11,985,482.68 |
| Exchange gains and losses | -7,211,018.81 | 4,223,803.17 |
| Others | 1,456,509.76 | 1,235,137.03 |
| Total | -8,856,622.89 | -1,626,574.56 |
Other information
52. Other income
Unit: RMB yuan
| Source of other income | H1 2022 | H1 2021 |
| Government grants | 6,032,264.36 | 6,712,327.65 |
| Handling charges for individual income tax withheld | 178,461.16 | 141,332.03 |
| Total | 6,210,725.52 | 6,853,659.68 |
53. Investment income
Unit: RMB yuan
| Item | H1 2022 | H1 2021 |
| Income from long-term equity investments measured at equity method | 1,279,980.62 | 1,249,209.43 |
| Income from financial assets held for trading | -1,502,561.59 | 51,719,985.02 |
| Total | -222,580.97 | 52,969,194.45 |
Other information
54. Gains and losses on changes in fair value
Unit: RMB yuan
| Source of gains and losses on changes in fair value | H1 2022 | H1 2021 |
| Financial assets held for trading | 24,927,586.43 | 21,393,373.17 |
| Total | 24,927,586.43 | 21,393,373.17 |
Other information：
55. Credit impairment loss
Unit: RMB yuan
| Item | H1 2022 | H1 2021 |
| Loss on doubtful receivables | -3,182.86 | |
| Impairment loss of contract assets | 257,325.86 | |
| Loss on doubtful accounts receivable | 1,793,195.88 | 229,855.72 |
| Total | 1,790,013.02 | 487,181.58 |
Other information
56. Asset impairment loss
Unit: RMB yuan
| Item | H1 2022 | H1 2021 |
| II. Inventory valuation loss and loss on impairments of contract performance costs | -6,154,706.43 | 583,807.10 |
| Total | -6,154,706.43 | 583,807.10 |
Other information：
57. Gains on disposal of assets
Unit: RMB yuan
| Source of gains on disposal of assets | H1 2022 | H1 2021 |
| Gain/loss on disposal of non-current assets | -233,705.60 | 276,635.45 |
| Total | -233,705.60 | 276,635.45 |
58. Non-operating income
Unit: RMB yuan
| Item | H1 2022 | H1 2021 | Amount recognized in exceptional gains and losses |
| Others | 1,033,996.47 | 364,145.89 | 1,033,996.47 |
| Total | 1,033,996.47 | 364,145.89 | 1,033,996.47 |
Government grants recognized in profit or loss:
Unit: RMB yuan
| Title | Grantor | Reason | Nature/type | Profit-to-loss/loss-to-profit | Special grant or not | H1 2022 | H1 2021 | Asset-related/income-related |
impact inthe period
Other information：
59. Non-operating expenses
Unit: RMB yuan
| Item | H1 2022 | H1 2021 | Amount recognized in exceptional gains and losses |
| Donations | 185,431.30 | 62,122.44 | 185,431.30 |
| Sponsorship expenditures | 17,600.00 | 2,000.00 | 17,600.00 |
| Loss on disposal of non-current assets | 133,876.71 | 32,016.28 | 133,876.71 |
| Others | 377,721.10 | 324,101.76 | 377,721.10 |
| Total | 714,629.11 | 420,240.48 | 714,629.11 |
Other information：
60. Income tax expenses
(1) Income tax expenses
Unit: RMB yuan
| Item | H1 2022 | H1 2021 |
| Current income tax expenses | 35,242,804.62 | 36,572,973.93 |
| Deferred income tax expenses | -4,119,080.80 | 1,464,031.55 |
| Total | 31,123,723.82 | 38,037,005.48 |
(2) Reconciliation between accounting profit and income tax expenses
Unit: RMB yuan
| Item | H1 2022 |
| Gross profit | 190,589,847.92 |
| Income tax calculated at statutory/applicable tax rates | 28,588,477.16 |
| Different tax rates for specific provinces or enacted by local authority | 10,334,136.62 |
| Adjustment to income tax in previous periods | -1,130,641.81 |
| Income not subject to tax | -4,550,351.09 |
| Costs, expenses, and losses not deductible for tax | -647,625.03 |
| Utilization of deductible losses on previously unrecognized deferred tax assets | -1,947,982.56 |
| Effect of deductible temporary differences or deductible losses on current unrecognized deferred tax assets | 2,792,899.15 |
| Over-deduction of the taxable profit amount for R&D | -2,281,002.84 |
| Others | -34,185.78 |
| Income tax expenses | 31,123,723.82 |
Other information：
61. Other comprehensive income
See Note 42.
62. Line items of the cash flow statement
(1) Cash generated from other operating activities
Unit: RMB yuan
| Item | H1 2022 | H1 2021 |
| Current accounts and others | 10,938,730.56 | 10,559,708.11 |
| Interest income | 2,763,833.20 | 7,150,338.75 |
| Government grants | 5,652,395.52 | 6,146,499.37 |
| Letter of guarantee received | 16,409,067.45 | 5,738,155.61 |
| Total | 35,764,026.73 | 29,594,701.84 |
Notes to cash generated from other operating activities:
(2) Cash used in other operating activities
Unit: RMB yuan
| Item | H1 2022 | H1 2021 |
| Selling expenses in cash | 48,115,660.15 | 38,137,786.88 |
| Administrative expenses in cash | 38,227,480.77 | 53,535,286.25 |
| R&D expenses in cash | 4,950,622.76 | 12,975,177.50 |
| Letter of guarantee paid | 15,780,974.76 | 1,500,000.00 |
| Current accounts and others | 17,375,948.50 | 26,935,772.72 |
| Security deposits | 1,244,225.97 | |
| Total | 125,694,912.91 | 133,084,023.35 |
Notes to cash used in other operating activities:
(3) Cash generated from other investing activities
Unit: RMB yuan
| Item | H1 2022 | H1 2021 |
| Performance compensation | 742,251.94 | 2,453,179.98 |
| Total | 742,251.94 | 2,453,179.98 |
Notes to cash generated from other investing activities：
(4) Cash used in other investing activities
Unit: RMB yuan
| Item | H1 2022 | H1 2021 |
Notes to cash used in other investing activities：
(5) Cash generated from other financing activities
Unit: RMB yuan
| Item | H1 2022 | H1 2021 |
| Security deposits received for internal guarantees for external loans | 420,000,000.00 | |
| Security deposits for bank acceptance notes | 94,712,397.48 | 69,199,415.97 |
| Share subscription | 2,650,000.00 | 5,651,200.00 |
| Deposits for loans | 140,000,000.00 | |
| Total | 657,362,397.48 | 74,850,615.97 |
Notes to cash generated from other financing activities：
(6) Cash used in other financing activities
Unit: RMB yuan
| Item | H1 2022 | H1 2021 |
| Security deposits paid for internal guarantees for external loans | 210,000,000.00 | 210,000,000.00 |
| Share repurchase | 215,606,658.62 | 491,088,121.79 |
| Security deposits for bank acceptance notes | 59,353,845.18 | 58,766,410.12 |
| Repayment of lease liabilities | 8,605,212.20 | 10,705,539.89 |
| Total | 493,565,716.00 | 770,560,071.80 |
Notes to cash used in other financing activities：
63. Supplemental information on statement of cash flows
(1) Supplemental information on statement of cash flows
Unit: RMB yuan
| Supplementary information | H1 2022 | H1 2021 |
| 1. Reconciliation of net profit to net cash generated from/used in investing activities: | ||
| Net profit | 159,466,124.10 | 202,344,313.08 |
| Add: Asset impairment allowances | 4,364,693.41 | -1,070,988.68 |
| Depreciation of fixed assets, depletion of oil and gas assets, and depreciation of productive living assets | 22,520,853.53 | 25,543,700.78 |
| Depreciation of right-of-use assets | 8,898,752.32 | 9,380,832.96 |
| Amortization of intangible assets | 11,227,954.62 | 13,924,270.85 |
| Amortization of long-term prepaid expenses | 3,473,882.95 | 2,191,994.62 |
| Loss on the disposal of fixed assets, intangible assets, and other long-lived assets (“-” for gain) | 233,705.60 | -276,635.45 |
| Loss on the retirement of fixed assets (“-” for gain) | 133,876.71 | 32,016.28 |
| Loss on changes in fair value (“-” for gain) | -24,927,586.43 | -21,393,373.17 |
| Finance costs (“-” for income) | 593,853.58 | 4,899,967.92 |
| Loss on investment (“-” for income) | 222,580.97 | -52,969,194.45 |
| Decrease in deferred tax assets (“-” for increase) | 4,377,469.88 | 295,818.56 |
| Increase in deferred tax liabilities (“-” for decrease) | -7,231,414.10 | 193,925.50 |
| Decrease in inventories (“-” for increase) | -295,593,753.30 | -268,008,107.81 |
| Decrease in operating receivables (“-” for increase) | -176,463,861.35 | -175,004,370.95 |
| Increase in operating payables (“-” for decrease) | 426,275,129.13 | 448,553,516.41 |
| Others | 14,678,445.11 | 17,386,141.80 |
| Net cash generated from/used in operating activities | 152,250,706.73 | 206,023,828.25 |
| 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 | 1,227,722,921.53 | 1,543,198,951.25 |
| Less: Opening balance of cash | 1,259,303,775.74 | 860,601,236.78 |
| Add: Closing balance of cash equivalents | ||
| Less: Opening balance of cash equivalents |
| Net increase in cash and cash equivalents | -31,580,854.21 | 682,597,714.47 |
(2) Net cash payments for the acquisition of subsidiaries in the current period
Unit: RMB yuan
| Amount | |
| Payments of cash or cash equivalents in the current period for business combinations in the current period | 162,040,000.00 |
| Of which: | |
| Less: Cash and cash equivalents held by subsidiary on date of acquisition | 22,867,983.95 |
| Of which: | |
| Of which: | |
| Net cash payments for the acquisition of subsidiaries | 139,172,016.05 |
(3) Breakdown of cash and cash equivalents
Unit: RMB yuan
| Item | Closing balance | Opening balance |
| I. Cash | 1,227,722,921.53 | 1,259,303,775.74 |
| Including: cash on hand | 439,819.27 | 233,281.32 |
| Bank deposits readily available | 1,158,706,979.62 | 999,389,151.51 |
| Other cash and bank balances readily available | 68,576,122.64 | 259,681,342.91 |
| III. Closing balance of cash and cash equivalents | 1,227,722,921.53 | 1,259,303,775.74 |
64. Assets with restricted ownership or right of use
Unit: RMB yuan
| Item | Closing carrying amount | Reason for restriction |
| Cash and bank balances | 14,680,985.43 | Payments of security deposits for bank acceptance notes and performance bonds |
| Fixed assets | 4,308,785.21 | Collaterals for bank loans of subsidiaries |
| Current portion of other non-current assets | 305,225,000.00 | Security deposits for loans of subsidiaries |
| Total | 324,214,770.64 |
65. Monetary items in foreign currencies
(1) Monetary items in foreign currencies
Unit: RMB yuan
| Item | Closing balance in foreign | Exchange rate | Closing balance in RMB |
| currency | |||
| Cash and bank balances | |||
| Including: USD | 56,795,220.10 | 6.7114 | 381,175,440.18 |
| EUR | 48,679,697.49 | 7.0084 | 341,166,791.89 |
| HKD | 71,445.16 | 0.8552 | 61,099.90 |
| AUD | 196.00 | 4.6145 | 904.44 |
| Accounts receivable | |||
| Including: USD | 3,108,925.01 | 6.7114 | 20,865,239.31 |
| EUR | 86,716,489.64 | 7.0084 | 607,743,845.99 |
| HKD | 0.8552 | ||
| Long-term borrowings | |||
| Including: USD | 6.7114 | ||
| EUR | 9,412,568.38 | 7.0084 | 65,967,044.23 |
| HKD | 0.8552 | ||
| Accounts payable | |||
| Including: USD | 6.7114 | ||
| EUR | 60,558,444.62 | 7.0084 | 424,417,803.27 |
| Other receivables | |||
| Including: USD | 245,375.00 | 6.7114 | 1,646,809.78 |
| EUR | 9,401,906.09 | 7.0084 | 65,892,318.64 |
| Short-term borrowings | |||
| Including: USD | 6.7114 | ||
| EUR | 8,979,542.27 | 7.0084 | 62,932,224.05 |
| Current portion of non-current liabilities | |||
| Including: USD | 6.7114 | ||
| EUR | 38,802,979.16 | 7.0084 | 271,946,799.14 |
| Other payables | |||
| Including: USD | 568,598.02 | 6.7114 | 3,816,088.75 |
| EUR | 3,026,047.57 | 7.0084 | 21,207,751.79 |
Other information：
(2) Overseas business entities (for substantial overseas business entities, the following information shall bedisclosed: principal place of business, functional currency, and basis for the choice, change of functionalcurrency and reasons)
? Applicable □ Not applicable
Principal place of business, functional currency, and basis for the choice of substantial overseas business entities included in theconsolidated financial statements are as follows:
| Substantial overseas business entity | Principal place of business | Functional currency | Basis for the choice |
| 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 |
66. Government grants
(1) Basic information of government grants
Unit: RMB yuan
| Type | Amount | Recognized in | Amount recognized in profit or loss |
| 4 Mitsubishi double-column milling machines and 3 fixed double-column milling machines | 11,631,981.66 | Deferred income | 558,330.00 |
| Policy support funds for Solo Champion Manufacturing Enterprise of 2020 | 120,000.33 | Other income | 120,000.33 |
| Subsidy associated with over-deductible of the taxable profit amount for R&D for Solo Champion Manufacturing Enterprise of 2020 | 500,000.00 | Other income | 500,000.00 |
| 2021 steady employment allowance | 48,215.23 | Other income | 48,215.23 |
| Receipt of immediate VAT refund for embedded software (202111) | 111,950.52 | Other income | 111,950.52 |
| Receipt of immediate VAT refund for embedded software (202111) | 73,755.60 | Other income | 73,755.60 |
| Receipt of immediate VAT refund for embedded software (202111) | 52,451.33 | Other income | 52,451.33 |
| Receipt of immediate VAT refund for embedded software (202111) | 32,769.56 | Other income | 32,769.56 |
| One-off job retention subsidy | 21,125.00 | Other income | 21,125.00 |
| Employment security allowance | 4,233.24 | Other income | 4,233.24 |
| Receipt of immediate VAT refund for embedded software (202110-11) | 1,441,156.81 | Other income | 1,441,156.81 |
| Receipt of immediate VAT refund for embedded software (202110-11) | 747,279.87 | Other income | 747,279.87 |
| Receipt of government subsidy (2020 policy support funds for Gazelle Enterprise-exclusive of R&D-related funds) | 81,148.49 | Other income | 81,148.49 |
| Receipt of government subsidy (2021 Qiye First Identification for Solo Champion Manufacturing Enterprise) | 300,000.00 | Other income | 300,000.00 |
| Actually immediate VAT refund for embedded software (202109) (rectification of Certificate 100000983#) | 32,100.35 | Other income | 32,100.35 |
| Receipt of government subsidy (2020 R&D expenses-related subsidy for Gazelle Enterprise) | 600,000.00 | Other income | 600,000.00 |
| 2021 R&D expenses-related reward from the Scientific and Technological Innovation Bureau | 23,600.00 | Other income | 23,600.00 |
| Special funds for business development of Suzhou High-tech Zone Bureau of Commerce | 20,300.00 | Other income | 20,300.00 |
| Funds from the Administration for Market Regulation of the high-tech zone | 120,000.00 | Other income | 120,000.00 |
| Special fund for technological development from the Scientific and Technological Innovation Bureau of Xushuguan Town, Suzhou | 700,000.00 | Other income | 700,000.00 |
| Funds from the Economic Development Committee of Suzhou High-tech Zone | 200,000.00 | Other income | 200,000.00 |
| Refund of social security contributions for steady employment | 136,370.00 | Other income | 136,370.00 |
| Steady employment subsidy for enterprises | 1,096.90 | Other income | 1,096.90 |
| Steady employment subsidy for enterprises | 18,250.00 | Other income | 18,250.00 |
| One-off job retention and training subsidy from the Social Security Bureau | 42,250.00 | Other income | 42,250.00 |
| Second steady employment subsidy | 12,183.60 | Other income | 12,183.60 |
| Foreign government subsidies | 33,697.53 | Other income | 33,697.53 |
VIII. Changes to the Scope of Consolidation
1. Business combination not involving entities under common control
(1) Business combinations not involving entities under common control in the current period
Unit: RMB yuan
| Acquiree | Date of ownership of equity interests | Cost of ownership of equity interests | Ownership percentage | How equity interests is acquired | Date of acquisition | Basis for determination of the date of acquisition | Revenue of acquiree from the date of acquisition to the period-end | Net profit of acquiree from the date of acquisition to the period-end |
| Shenzhen Wonder | 8 June 2022 | 173,800,000.00 | 51.00% | By cash and capital increase | 8 June 2022 | Completion of transfer of equity ownership | 5,612,027.39 | 789,556.27 |
(2) Cost of acquisition and goodwill
Unit: RMB yuan
| Cost of acquisition | Shenzhen Wonder |
| --Cash | 173,800,000.00 |
| --Fair value of non-cash assets | |
| --Fair value of debt issued or borne | |
| --Fair value of equity securities issued | |
| --Fair value of contingent considerations | |
| --Fair value on the date of acquisition of equity interests held before that date | |
| --Others | |
| Total cost of acquisition | 173,800,000.00 |
| Less: Share of fair value of identifiable equities obtained | 28,877,831.01 |
| Amount by which the cost of goodwill/acquisition is lower than the share of fair value of identifiable equities obtained | 144,922,168.99 |
(3) Identifiable assets and liabilities of acquirees on the date of acquisition
Unit: RMB yuan
| Shenzhen Wonder | ||
| Fair value on the date of acquisition | Carrying value on the date of acquisition | |
| Assets： | 118,600,318.94 | 93,981,057.45 |
| Cash and bank balances | 22,867,983.95 | 22,867,983.95 |
| Accounts receivable | 12,147,478.25 | 12,147,478.25 |
| Inventories | 44,297,259.74 | 42,548,955.95 |
| Fixed assets | 5,504,939.18 | 4,492,581.48 |
| Intangible assets | 21,858,600.00 | |
| Notes receivable | 740,481.63 | 740,481.63 |
| Prepayments | 2,411,228.55 | 2,411,228.55 |
| Other receivables | 2,072,193.35 | 2,072,193.35 |
| Other current assets | 37,841.92 | 37,841.92 |
| Right-of-use assets | 6,080,817.77 | 6,080,817.77 |
| Deferred tax assets | 581,494.60 | 581,494.60 |
| Liabilities： | 61,977,120.89 | 58,284,231.66 |
| Borrowings | 10,800,000.00 | 10,800,000.00 |
| Accounts payable | 10,200,334.69 | 10,200,334.69 |
| Deferred tax liabilities | 3,701,257.61 | 8,368.38 |
| Contract liabilities | 6,448,103.80 | 6,448,103.80 |
| Employee benefits payable | 2,729,488.28 | 2,729,488.28 |
| Tax payable | 4,962,681.84 | 4,962,681.84 |
| Other payables | 15,034,104.80 | 15,034,104.80 |
| Current portion of non-current liabilities | 4,204,477.63 | 4,204,477.63 |
| Other current liabilities | 709,454.49 | 709,454.49 |
| Lease liabilities | 3,187,217.75 | 3,187,217.75 |
| Equity | 56,623,198.05 | 35,696,825.79 |
| Less: Non-controlling interests | 27,745,367.04 | 17,491,444.64 |
| Equity obtained | 28,877,831.01 | 18,205,381.15 |
2. Changes to the scope of consolidation for other reasons
Changes to the scope of consolidation due to other reasons (incorporation, liquidation, etc.):
In March 2022, the Company’s wholly-owned subsidiary Hainan Yineng Investment Co., Ltd. (Yineng Investment) signed thePartnership Agreement on Changzhou Xinchen Venture Capital Partnership (Limited Partnership) with Shenzhen Qifu AntaiInvestment Management Co., Ltd. and Liu Haitao, among others to make a joint investment in Changzhou Xinchen Venture CapitalPartnership (Limited Partnership) (hereinafter, the “partnership”). All the parties to the Agreement subscribed for a combined capitalof RMB50.6 million, of which Yineng Investment, as one of the limited partners of the partnership, subscribed for RMB48 million.As one of the limited partners of the partnership, Yineng Investment accounts for 94.86% of the total capital contributions.Considering the partnership's agreements on investment orientation, investment decisions, operation and management, incomeapportionment, and loss bearing, and the fact that Yineng Investment accounts for the majority of the capital contributions to thepartnership, the partnership is included in the consolidated statements of Dongfang Precision as a "structured body controlled by theCompany" from the perspective of commercial substance and after complying with the Accounting Standard for Business Enterprisesand referring to the professional opinions of the independent auditor.
IX. Interests in Other Entities
1. Interests in subsidiaries
(1) Composition of the Group
| Subsidiary | Principal place of business | Place of registration | Business nature | The Company’s interest | How the subsidiary was obtained | |
| Direct | Indirect | |||||
| Dongfang Precision (HK) | HK | HK | Trading | 100.00% | Incorporated | |
| Dongfang Precision (Netherland) | Netherland | Netherland | Trading | 90.00% | 10.00% | Incorporated |
| Fosber Asia | Foshan, Guangdong, China | Foshan, Guangdong, China | Manufacturing | 89.20% | Incorporated | |
| Suzhou Jinquan | Suzhou, Jiangsu, China | Suzhou, Jiangsu, China | Investment | 1.23% | Incorporated | |
| Parsun Power | Suzhou, Jiangsu, China | Suzhou, Jiangsu, China | Manufacturing | 7.83% | 62.95% | Acquired in business combination not under common control |
| Parsun Power Technology | Suzhou, Jiangsu, China | Suzhou, Jiangsu, China | Manufacturing | 70.78% | Incorporated | |
| Shunyi Investment | Suzhou, Jiangsu, China | Suzhou, Jiangsu, China | Investment | 100.00% | Acquired in business combination not under common control | |
| Yinglian Digital | Foshan, Guangdong, China | Foshan, Guangdong, China | Manufacturing | 100.00% | Acquired in business combination not under common control | |
| EDF | Italy | Italy | Manufacturing | 100.00% | Acquired in business combination not under common control | |
| Fosber Group | Italy | Italy | Manufacturing | 100.00% | Acquired in business combination not under | |
| common control | ||||||
| Fosber America | America | America | Manufacturing | 100.00% | Acquired in business combination not under common control | |
| Fosber Tianjin | Tianjin, China | Tianjin, China | Manufacturing | 100.00% | Acquired in business combination not under common control | |
| Tiruna Group | Spain | Spain | Manufacturing | 70.00% | Acquired in business combination not under common control | |
| Tiruna S.L.U. | Spain | Spain | Manufacturing | 70.00% | Acquired in business combination not under common control | |
| Tratatamientos Industriales Tiruna S.A.U. | Spain | Spain | Manufacturing | 70.00% | Acquired in business combination not under common control | |
| Tiruna France SARL | France | France | Manufacturing | 70.00% | Acquired in business combination not under common control | |
| SCI Candan | France | France | Manufacturing | 70.00% | Acquired in business combination not under common control | |
| Tiruna America | America | America | Manufacturing | 85.00% | Acquired in business combination not under common control | |
| Qcorr | Italy | Italy | Manufacturing | 60.00% | Incorporated | |
| Dongfang Digicom | Haikou, Hainan, China | Haikou, Hainan, China | Industrial Internet | 100.00% | Incorporated | |
| Digicom Guangdong | Foshan, Guangdong, | Foshan, Guangdong, | Industrial Internet | 100.00% | Incorporated |
| China | China | |||||
| Yineng Investment | Haikou, Hainan, China | Haikou, Hainan, China | Investment | 100.00% | Incorporated | |
| Tianjin Hangchuang | Tianjin, China | Tianjin, China | Investment | 95.24% | Incorporated | |
| Changzhou Xinchen* | Changzhou, Jiangsu, China | Changzhou, Jiangsu, China | Investment | 94.86% | Incorporated | |
| Shenzhen Wonder | Shenzhen, Guangdong, China | Shenzhen, Guangdong, China | Manufacturing | 51.00% | Acquired in business combination not under common control | |
| Shenzhen Wonder Tejing | Shenzhen, Guangdong, China | Shenzhen, Guangdong, China | Manufacturing | 51.00% | Acquired in business combination not under common control |
Reason for holding different equity percentage and voting right percentage in a subsidiary:
As of the issue date of the 2022 Semi-Annual Report of Dongfang Precision, Dongfang Precision directly holds a 7.83% interest insubsidiary Suzhou Parsun Power Machine Co., Ltd. (Parsun Power).Suzhou Shunyi Investment Co., Ltd. (Shunyi Investment), a wholly-owned subsidiary of Dongfang Precision, holds a 61.72%interest in Parsun Power. Meanwhile, Shunyi Investment, as a general partner and executive partner of Parsun Power’s shareholderSuzhou High-Tech Zone Jinquan Business Management Partnership (Limited Partnership) (Suzhou Jinquan), holds a 1.23% interestand controls a 5.45% interest in Parsun Power via Suzhou Jinquan. Therefore, Dongfang Precision holds a combined interest of 70.78%and controls a combined interest of 75.00% in Parsun Power both directly and indirectly.
Basis for control over substantial structured entities included in the consolidated financial statements:
In March 2022, the Company’s wholly-owned subsidiary Hainan Yineng Investment Co., Ltd. (Yineng Investment) signed thePartnership Agreement on Changzhou Xinchen Venture Capital Partnership (Limited Partnership) with Shenzhen Qifu AntaiInvestment Management Co., Ltd. and Liu Haitao, among others to make a joint investment in Changzhou Xinchen Venture CapitalPartnership (Limited Partnership) (hereinafter, the “partnership”). All the parties to the Agreement subscribed for a combined capitalof RMB50.6 million, of which Yineng Investment, as one of the limited partners of the partnership, subscribed for RMB48 million.
As one of the limited partners of the partnership, Yineng Investment accounts for 94.86% of the total capital contributions.Considering the partnership's agreements on investment orientation, investment decisions, operation and management, incomeapportionment, and loss bearing, and the fact that Yineng Investment accounts for the majority of the capital contributions to thepartnership, the partnership is included in the consolidated statements of Dongfang Precision as a "structured body controlled by theCompany" from the perspective of commercial substance and after complying with the Accounting Standard for Business Enterprisesand referring to the professional opinions of the independent auditor.
2. Interests in joint ventures and associates
(1) Principal joint ventures and associates
| Joint venture or associate | Principal place of business | Place of registration | Business nature | The Company’s interest | Accounting treatment of investment in the joint venture or | |
| Direct | Indirect | |||||
| associate | ||||||
| Jaten Robot | Foshan | Foshan, Guangdong, China | Manufacturing | 21.00% | Equity method |
Reason for holding different equity percentage and voting right percentage in a joint venture or associate:
Reason for holding below 20% voting rights but having a significant influence, or holding 20% or above voting rights but not havinga significant influence:
(2) Key financial information of principal joint ventures
Unit: RMB yuan
| Closing balance/H1 2022 | Opening balance/H1 2021 | |
| Jaten Robot | Jaten Robot | |
| Current assets | 425,134,446.21 | 330,487,248.69 |
| Non-current assets | 115,340,074.66 | 112,183,506.48 |
| Total assets | 540,474,520.87 | 442,670,755.17 |
| Current liabilities | 310,415,625.50 | 231,913,001.95 |
| Non-current liabilities | 21,156,000.00 | 16,210,604.84 |
| Total liabilities | 331,571,625.50 | 248,123,606.79 |
| Non-controlling interests | ||
| Equity attributable to owners of the parent | 208,902,895.37 | 194,547,148.38 |
| Share of net assets based on the Company’s interest | 43,869,608.03 | 40,854,901.16 |
| Adjustments | ||
| --Goodwill | ||
| --Unrealized profit of internal transactions | ||
| --Others | ||
| Carrying amount of equity investments in associates | 76,060,326.24 | 74,780,345.62 |
| Fair value of equity investments in associates with quotations on an open market | ||
| Operating revenue | 112,574,301.37 | 70,380,196.61 |
| Net profit | 6,095,145.83 | 5,948,616.35 |
| Net profit of discontinued operations | ||
| Other comprehensive income |
| Total comprehensive income | 6,095,145.83 | 5,948,616.35 |
| Dividends received from associates in the period |
Other information
X. Risks Associated with Financial Instruments
The Group is faced with various financial instrument risks in its routine activities, mainly including credit risk, liquidity risk andmarket risk (including exchange rate risk and interest rate risk). The Group mainly has the following instruments: cash and bankbalances, equity investment, borrowings, notes receivable, accounts receivable, notes payable and accounts payable. The riskmanagement strategies adopted by the Group to lower risks associated with these financial instruments are described below.The Group's Board of Directors is fully responsible for the determination of risk management objectives and policies and assumesultimate responsibility for such risk management objectives and policies, but the Board of Directors has authorized the ChiefExecutive's Office of the Group to design and implement procedures to ensure the effective execution of risks management objectivesand policies. The Board of Directors reviews the effectiveness of the executed procedures and the rationality of the risk managementobjectives and policies through the monthly reports submitted by the treasury supervisor. The internal auditors of the Group will alsoaudit the risk management policies and procedures and will report relevant findings to the Audit Committee.
The Group's overall goals for risk management are to develop risk management policies to minimize risks without undulyaffecting the competitiveness and strain capacity of the Group.
Credit risk
The Group transacts only with recognized and reputable third parties. According to the Group's policies, credit checks are neededfor all customers that require transactions should be conducted by means of credit. Additionally, the Group performs continuousmonitoring of the balance of accounts receivable to ensure that the Group will not face major bad debt risk. For transactions not settledin the accounting standard currency of the relevant business unit, unless specifically approved by the credit control department of theGroup, the Group will not provide credit transaction conditions.
Since the counterparties of cash and bank balances and notes receivable are banks with a good reputation and high 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 ofwhich arises from counterparty default, and the maximum risk exposure is equal to the carrying value of these instruments.
The Group transacts only with recognized and reputable third parties, so no collateral is required. Credit risk concentration ismanaged by customer/counterparty, geographic region, and industry. Because the customer base of accounts receivable of the Groupis widely dispersed in different departments and industries, there is no major credit risk concentration within the Group. The Groupdoes not hold any collateral or other credit enhancement on the balance of accounts receivable.
Criteria for judging significant increases in credit risk
The Group assesses whether or not the credit risk of the relevant financial instruments has increased significantly since the initialrecognition at each balance sheet date. While determining whether the credit risk has significantly increased since initial recognitionor not, the Group takes into account the reasonable and substantiated information that is accessible without exerting undue extra costor effort, including qualitative and quantitative analysis based on the historical data of the Group, external credit risk rating, andforward-looking information. Based on the single financial instrument or the combination of financial instruments with similar
characteristics of credit risk, the Group compares the risk of default of financial instruments on the balance sheet date with that on theinitial recognition date in order to determine changes in the risk of default during the expected lifetime of financial instruments.
Definition of credit-impaired financial assetsThe standard adopted by the Group to determine whether a credit impairment occurs is consistent with the internal credit riskmanagement objectives of the relevant financial instrument, taking into account quantitative and qualitative criteria. When the Groupassesses whether the credit impairment of debtor occurred, the principal factors considered are as follows:
（1）Significant financial difficulty of the issuer or debtor;
（2）Debtors’ breach of contract, such as defaulting or becoming overdue on interest or principal payments;
（3）The creditor of the debtor, for economic or contractual reasons relating to the debtor’s financial difficulty, having grantedto the debtor a concession that the creditor would not otherwise consider;
（4）It is becoming probable that the debtor will enter bankruptcy or other financial restructuring;
（5）The disappearance of an active market for that financial asset because of financial difficulties of the issuer or debtor;
（6）The purchase or origination of a financial asset at a deep discount that reflects the incurrence of credit losses.
The credit impairment on a financial asset may be caused by the combined effect of multiple events and may not be necessarilydue to a single event.
Parameters of ECL measurement
Based on whether there is a significant increase in credit risk and whether there is an impairment of assets, the Group measuresthe impairment loss for different assets with ECL of 12 months or the entire lifetime respectively. The key measuring parameters ofECL include probability of default (PD), loss given default (LGD) and exposure at default (EAD). The Group takes into account thequantitative analysis of historical statistics (such as ratings of counterparties, manners of guarantees and types of collaterals, repayments,etc.) and forward-looking information.
The relevant definitions are as follows:
（1）PD refers to the possibility that the debtor will not be able to fulfill its obligations of repayment over the next 12 months orthroughout the entire remaining lifetime. The Group’s PD is adjusted based on the results of the expected credit loss model, taking intoaccount the forward-looking information to reflect the debtor’s PD under the current macroeconomic environment;
（2）LGD refers to the Group’s expectation of the extent of the loss resulting from the default exposure. Depending on the typeof counterparty, the method and priority of the recourse, and the type of collaterals, the LGD varies. The LGD is the percentage of lossof risk exposure at the time of default, calculated over the next 12 months or over the entire remaining lifetime.
（3）EAD is the amount that the Group should be reimbursed at the time of the default in the next 12 months or throughout theentire remaining lifetime.
The assessment of a significant increase in credit risk and the calculation of ECL both involve forward-looking information.Through the analysis of historical data, the Group identifies the key economic indicators that affect the credit risk and ECL.
As of 30 June 2022, there were no significant increases in the credit risk of the Group.
Exchange rate risk
The Group is exposed to trading exchange rate risks. Such exposures arise from sales or purchases by business units in currenciesother than the units’ functional currencies.
The sensitivity analysis of exchange rate risks is set out in the following table, reflecting the impact of reasonable and probablechange in the exchange rates of EUR and USD on net profit or loss and other comprehensive income (net of tax) assuming that othervariables remain constant.
| Increase/(decrease) in exchange rate (%) | Increase/(decrease) in net profit or loss | Increase/(decrease) in total equity |
| Stronger RMB against EUR | 2.00 | -2,558,636.28 | -2,558,636.28 |
| Weaker RMB against EUR | (2.00) | 2,558,636.28 | 2,558,636.28 |
| Stronger RMB against USD | 2.00 | -6,677,852.39 | -6,677,852.39 |
| Weaker RMB against USD | (2.00) | 6,677,852.39 | 6,677,852.39 |
Capital managementThe primary objective of the Group’s capital management is to safeguard the Group’s ability to continue as a going concern andto maintain healthy capital ratios in order to support its business and maximise shareholders’ value.The Group manages its capital structure and makes adjustments in the light of changes in economic conditions and in the riskprofiles of relevant assets. To maintain or adjust the capital structure, the Group may adjust the dividend payment to shareholders,return capital to shareholders or issue new shares. The Group is not subject to any externally imposed capital requirements. No changeswere made in the objectives, policies, or processes for managing capital as of 30 June 2022.XI. 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 | 830,381,698.55 | 830,381,698.55 | ||
| Receivables financing | 32,869,739.53 | 32,869,739.53 | ||
| Other non-current financial assets | 4,717,295.10 | 265,083,255.52 | 269,800,550.62 | |
| Total assets continuously measured at fair value | 835,098,993.65 | 32,869,739.53 | 265,083,255.52 | 1,133,051,988.70 |
| (VI) Financial liabilities held for trading | 5,917,548.65 | 109,179,395.52 | 115,096,944.17 | |
| Other non-current liabilities | 135,327,385.06 | 135,327,385.06 | ||
| Total liabilities | 5,917,548.65 | 244,506,780.58 | 250,424,329.23 | |
| continuously measured at fair value | ||||
| II. Non-continuous measurement of fair value | -- | -- | -- | -- |
XII. 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 | 20.33 |
| Tang Zhuomian (individual) | The Company’s controlling shareholder and one of the actual controllers | 7.27 |
The ultimate controllers of the Company are Tang Zhuolin and Tang Zhuomian.
2. Subsidiaries of the Company
See Note IX.
3. Joint ventures and associates of the Company
For substantial joint ventures and associates of the Company, see Note IX.
4. Other related parties
| Other related parties | Relationship with the Company |
| Qiu Yezhi | Director and General Manager |
| Zhou Wenhui | Director |
| Xie Weiwei | Director and Deputy General Manager |
| Mai Zhirong | Independent Director |
| Peng Xiaowei | Independent Director |
| He Weifeng | Independent Director |
| Chen Huiyi | Chairman of the Supervisory Committee |
| Zhao Xiuhe | Employee Supervisor |
| He Baohua | Supervisor |
| Shao Yongfeng | Chief Financial Officer |
| Feng Jia | Board Secretary |
5. Related-party transactions
(7) Remuneration of key management
Unit: RMB yuan
| Item | H1 2022 | H1 2021 |
| Remuneration of key management | 7,801,939.42 | 7,727,395.52 |
XIII. Share-based Payments
1. The overall situation of share-based payments
? Applicable □ Not applicable
Unit: RMB yuan
| Total amount of various equity instruments granted by the Company during the current period | 2,650,000.00 |
| Total amount of various equity instruments exercised by the Company during the current period | 0.00 |
| Total amount of various equity instruments invalidated during the current period of the Company | 0.00 |
Other information
2. Equity-settled share-based payments
? Applicable □ Not applicable
Unit: RMB yuan
| Methods for determining the fair value of equity instruments on the grant date | Market prices |
| Basis for determining the number of feasible right equity instruments | 2020/2022 Restricted Share Incentive Plan |
| Reason for significant difference between estimates of the current period and the last period | Not applicable |
| Cumulative amount of equity-settled share-based payments recognized in capital surplus | 53,801,978.97 |
| Total costs of equity-settled share-based payments in the current period | 13,388,065.57 |
XIV. Other Significant Matters
1. Segment reporting
(1) Basis for the determination of reporting segments and accounting policies
The Company divides reporting segments based on business/product segment. Assets and liabilitiesshared by different segments are allocated to these segments according to their scales.
(2) Financial information of reporting segments
Unit: RMB yuan
| Item | Domestic entities | Overseas entities | Offset | Total |
| Operating revenue | 623,947,200.75 | 1,106,235,884.31 | -194,567,450.80 | 1,535,615,634.26 |
| Cost of sales | 432,301,993.12 | 868,697,745.71 | -166,955,472.61 | 1,134,044,266.22 |
| Total assets | 4,941,457,064.15 | 2,834,538,054.18 | -1,277,748,300.59 | 6,498,246,817.74 |
| Total liabilities | 1,327,346,707.72 | 2,067,764,279.76 | -771,612,390.37 | 2,623,498,597.11 |
XV. Notes to Major Items in the Company Financial Statements
1. Accounts receivable
(1) Accounts receivable by type
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 | 2,488,100.00 | 1.21% | 2,488,100.00 | 100.00% | 0.00 | 3,011,094.20 | 1.89% | 3,011,094.20 | 100.00% | 0.00 |
| Of which: | ||||||||||
| Accounts receivable for which the allowances are established individually | 2,488,100.00 | 1.21% | 2,488,100.00 | 100.00% | 0.00 | 3,011,094.20 | 1.89% | 3,011,094.20 | 100.00% | 0.00 |
| Accounts receivable for which the allowances are established by group | 202,985,125.41 | 98.79% | 2,183,479.18 | 1.08% | 200,801,646.23 | 156,362,907.90 | 98.11% | 1,659,842.23 | 1.06% | 154,703,065.67 |
| Of which: | ||||||||||
| Accounts receivable for which the allowances are established by group with similar credit risk | 202,985,125.41 | 98.79% | 2,183,479.18 | 1.08% | 200,801,646.23 | 156,362,907.90 | 98.11% | 1,659,842.23 | 1.06% | 154,703,065.67 |
| characteristics | ||||||||||
| Total | 205,473,225.41 | 100.00% | 4,671,579.18 | 2.27% | 200,801,646.23 | 159,374,002.10 | 100% | 4,670,936.43 | 2.93% | 154,703,065.67 |
Accounts receivable for which the allowances are established individually:
Unit: RMB yuan
| Entity | Closing balance | |||
| Gross amount | Allowance | Allowance percentage | Reason for allowance | |
| Customer 1 | 641,600.00 | 641,600.00 | 100.00% | Customer’s inability to settle the amount due |
| Customer 2 | 608,800.00 | 608,800.00 | 100.00% | Customer’s inability to settle the amount due |
| Customer 3 | 15,700.00 | 15,700.00 | 100.00% | Customer’s inability to settle the amount due |
| Customer 4 | 939,000.00 | 939,000.00 | 100.00% | Customer’s inability to settle the amount due |
| Customer 5 | 283,000.00 | 283,000.00 | 100.00% | Customer’s inability to settle the amount due |
| Total | 2,488,100.00 | 2,488,100.00 | ||
Accounts receivable for which the allowances are established by group:
Unit: RMB yuan
| Item | Closing balance | ||
| Gross amount | Allowance | Allowance percentage | |
| Within 1 year (inclusive) | 164,987,899.07 | 525,010.55 | 0.32% |
| 1-2 years (including 2 years) | 36,593,300.48 | 1,237,290.87 | 3.38% |
| 2-3 years (including 3 years) | 1,403,925.86 | 421,177.76 | 30.00% |
| 3-4 years (including 4 years) | |||
| 4-5 years (including 5 years) | |||
| Over 5 years | |||
| Total | 202,985,125.41 | 2,183,479.18 | |
Basis for grouping：
Where allowances for doubtful accounts receivable are established using the general model of expected credit loss, please discloseallowance information as other receivables.
□ Applicable ? Not applicable
By aging:
Unit: RMB yuan
| Aging | Closing balance |
| Within 1 year (inclusive) | 164,987,899.07 |
| 1-2 years | 36,593,300.48 |
| 2-3 years | 1,403,925.86 |
| Over 3 years | 2,488,100.00 |
| 4-5 years | 939,000.00 |
| Over 5 years | 1,549,100.00 |
| Total | 205,473,225.41 |
(2) 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 | 4,670,936.43 | -642.75 | 4,671,579.18 | |||
| Total | 4,670,936.43 | -642.75 | 4,671,579.18 | |||
Significant allowances that were withdrawn or reversed in the current period:
Unit: RMB yuan
| Entity | Reversed amount | Way of recovery |
(3) Top five entities with respect to accounts receivable
Unit: RMB yuan
| Entity | Closing balance of accounts receivable | As a % of the closing balance of total accounts receivable | Closing balance of allowances |
| Dongfang Precision (HK) | 110,619,057.68 | 53.84% | |
| Dongfang Precision (Netherland) | 57,418,328.60 | 27.94% | |
| EDF | 9,464,712.05 | 4.61% | |
| Customer 11 | 4,186,000.00 | 2.04% | 141,536.83 |
| Customer 12 | 2,730,000.00 | 1.33% | 92,306.63 |
| Total | 184,418,098.33 | 89.76% |
2. Other receivables
Unit: RMB yuan
| Item | Closing balance | Opening balance |
| Dividends receivable | 17,840,000.00 | |
| Other receivables | 511,753,075.51 | 444,140,266.79 |
| Total | 529,593,075.51 | 444,140,266.79 |
(1) Dividends receivable
1) Dividends receivable by type
Unit: RMB yuan
| Item (or investee) | Closing balance | Opening balance |
| Fosber Asia | 17,840,000.00 | |
| Total | 17,840,000.00 |
(2) Other receivables
1) Other receivables by nature
Unit: RMB yuan
| Nature | Closing gross amount | Opening gross amount |
| Internal transactions with related parties | 504,367,580.16 | 438,222,987.97 |
| Prepaid service charges | 1,088,133.50 | 3,277,042.22 |
| Security deposits | 1,707,512.88 | 1,427,885.96 |
| Performance compensation | 500,000.00 | 500,000.00 |
| Employee loans and petty cash | 462,946.22 | 1,722,721.94 |
| Others | 4,781,927.29 | 144,653.24 |
| Total | 512,908,100.05 | 445,295,291.33 |
2) 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 2022 | 655,024.54 | 500,000.00 | 1,155,024.54 | |
| Balance as at 1 January 2022 in the current period | ||||
| Balance as at 30 June 2022 | 655,024.54 | 500,000.00 | 1,155,024.54 |
Balances with significant changes in loss allowances in the current period:
□ Applicable ? Not applicable
By aging:
Unit: RMB yuan
| Aging | Closing balance |
| Within 1 year (inclusive) | 173,410,526.22 |
| 1-2 years | 338,221,337.63 |
| 2-3 years | 146,735.12 |
| Over 3 years | 1,129,501.08 |
| 3-4 years | 93,071.45 |
| 4-5 years | 197,983.00 |
| Over 5 years | 838,446.63 |
| Total | 512,908,100.05 |
3) Allowances established or reversed in the current period
Allowances for doubtful other receivables 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 receivables | 1,155,024.54 | 1,155,024.54 | ||||
| Total | 1,155,024.54 | 1,155,024.54 | ||||
4) 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 |
| Yineng Investment | Current account | 439,789,674.47 | Within 1 year /1-2 years | 85.55% | |
| Yinglian Digital | Current account | 34,277,531.87 | Within 1 year /1-2 years | 6.67% | |
| Dongfang Digicom (Guangdong) | Current account | 15,020,102.96 | Within 1 year /1-2 years | 2.92% | |
| Dongfang Precision (Netherland) | Current account | 6,594,298.45 | Within 1 year /1-2 years | 1.28% | |
| Dongfang Digicom | Current account | 4,166,271.21 | Within 1 year /1-2 years | 0.81% | |
| Total | 499,847,878.96 | 97.23% |
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 | 713,603,462.76 | 45,303,485.99 | 668,299,976.77 | 537,302,985.41 | 45,303,485.99 | 491,999,499.42 |
| Investments in joint ventures and associates | 76,060,326.24 | 76,060,326.24 | 74,780,345.62 | 74,780,345.62 | ||
| Total | 789,663,789.00 | 45,303,485.99 | 744,360,303.01 | 612,083,331.03 | 45,303,485.99 | 566,779,845.04 |
(1) Investments in subsidiaries
Unit: RMB yuan
| Investee | Opening balance (carrying amount) | Change in the current period | Closing balance (carrying amount) | Closing balance of impairment allowance | |||
| Additional investment | Reduction in investment | Impairment allowance | Others | ||||
| Dongfang Precision (HK) | 1,856,010.00 | 1,856,010.00 | |||||
| Dongfang Precision (Netherland) | 307,666.80 | 307,666.80 | |||||
| Fosber Asia | 54,242,190.72 | 588,886.13 | 54,831,076.85 | ||||
| Shunyi Investment | 305,584,828.17 | 305,584,828.17 | |||||
| Parsun Power | -16,583,107.88 | 1,047,532.15 | -15,535,575.73 | 45,303,485.99 | |||
| Yinglian Digital | 21,903,462.34 | 21,903,462.34 | |||||
| Dongfang Digicom | 3,710,751.60 | 546,493.60 | 4,257,245.20 | ||||
| Dongfang Digicom (Guangdong) | 1.00 | 38,223.56 | 38,224.56 | ||||
| Yineng Investment | 100,000,000.00 | 100,000,000.00 | |||||
| EDF | 977,696.67 | 279,341.91 | 1,257,038.58 | ||||
| Tianjin Hangchuang | 20,000,000.00 | 20,000,000.00 | |||||
| Shenzhen Wonder | 173,800,000.00 | 173,800,000.00 | |||||
| Total | 491,999,499.42 | 173,800,000.00 | 2,500,477.35 | 668,299,976.77 | 45,303,485.99 |
(2) Investments in joint ventures and associates
Unit: RMB yuan
| Investee | Opening balance (carrying amount) | Change in the current period | Closing balance (carrying amount) | Closing balance of 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 | ||||
| 1. Joint ventures | |||||||||||
| 2. Associates | |||||||||||
| Jaten Robot | 74,780,345.62 | 1,279,980.62 | 76,060,326.24 | ||||||||
| Subtotal | 74,780,345.62 | 1,279,980.62 | 76,060,326.24 | ||||||||
| Total | 74,780,345.62 | 1,279,980.62 | 76,060,326.24 | ||||||||
4. Operating revenue and costs
Unit: RMB yuan
| Item | H1 2022 | H1 2021 | ||
| Revenue | Costs | Revenue | Costs | |
| Principal operations | 174,984,173.72 | 111,562,446.47 | 192,965,012.06 | 121,408,712.13 |
| Other operations | 39,677,700.47 | 6,270,509.56 | 47,118,141.54 | 874,365.90 |
| Total | 214,661,874.19 | 117,832,956.03 | 240,083,153.60 | 122,283,078.03 |
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 been contracted but notyet performed or fulfilled was RMB34,288,503.53, of which RMB34,288,503.53 is expected to be recognized during 2022-2023, RMBis expected to be recognized during , and RMB is expected to be recognized during .Other information：
5. Investment income
Unit: RMB yuan
| Item | H1 2022 | H1 2021 |
| Income from long-term equity investments measured at cost method | 17,840,000.00 | 18,992,000.00 |
| Income from long-term equity investments measured at equity method | 1,279,980.62 | 1,249,209.43 |
| Income from the disposal of long-term equity investments | 36,290,838.45 | |
| Income from financial assets held for trading | 1,476,638.02 | 9,559,565.86 |
| Total | 20,596,618.64 | 66,091,613.74 |
XVI. Supplementary Information
1. Schedule of exceptional gains and losses in the current period
? Applicable □ Not applicable
Unit: RMB yuan
| Item | Amount | Note |
| Gain or loss on disposal of non-current assets | -367,582.31 | |
| Government grants through profit or loss (exclusive of government grants given in the Company’s ordinary course of business at fixed quotas or amounts as per the government’s uniform standards) | 6,032,264.36 | |
| Gain or loss on fair-value changes on held-for-trading financial assets and liabilities & income from disposal of held-for-trading financial assets and liabilities and available-for-sale financial assets (exclusive of the effective portion of hedges that arise in the Company’s ordinary course of business) | 23,425,024.84 | |
| Non-operating income and expenses other than the above | 453,244.06 | |
| Less: Income tax effects | 997,616.29 | |
| Non-controlling interests effects (net of tax) | 241,442.12 | |
| Total | 28,303,892.54 | -- |
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 | 4.08% | 0.12 | 0.12 |
| Net profit attributable to ordinary shareholders of the Company before exceptional gains and losses | 3.30% | 0.10 | 0.10 |