This is an English translation version of the Annual Report 2021 ofChongqing Zaisheng Technology Co., Ltd（《重庆再升科技股份有限公司2021年年度报告》）which is disclosed on www.sse.com.cn, the official website of ShanghaiStock Exchange.
If there is any inconsistency between the contents of this version and theChinese version, the Chinese version shall prevail.
All financial data in this report on PRC accounting standards.
CONTET
Chapter 1 Interpretation ...... 4
Chapter 2 Company Profile and Key Financial Indicators ...... 6
Chapter 3 Management Discussion and Analysis ...... 14
Chapter 4 Company Governance ...... 138
Chapter 5 Environmental and Social Responsibility ...... 159
Chapter 6 Important Matters ...... 163
Chapter 7 Changes in Shares and Shareholders ...... 171
Chapter 9 financial report ...... 182
Chapter 1 Interpretation
In this report, unless the context otherwise requires, the terms are translatedas follows:
Zisun: Chongqing Zaisheng Technology Co.，LtdCurrent period, Reporting Period: the Year of 2021Last Term, The Previous Year, Last Year: the year of 20202021 Convertible Bonds: A Share Convertible Bonds of Zisun Planed In 2021Clean Air Products: Micro Glass Fiber Filter Media, Composite Micro Glass Fiber
Filter Media, Glass Fiber Filter Bag, Clean Air Equipment, Melt-Blown Filter
Material, PTFE Membrane, etc.High Efficiency and Energy Saving Products: Vacuum Insulation Panel Core
Material, Inorganic Fiber Sprayed Glass Fiber, Absorbed Glass Mat Separator,
Ultra-Fine Micro Glass Fiber, Sound Insulation Mat, High Silica Fiber and Other
Products
VIP Core Material: Vacuum Insulation Panel Core MaterialAGM Separator: Absorbed Glass Mat SeparatorMelt-Blown Filter Material: Melt-Blown Chemical Fiber Filter MaterialPTFE: Polytetrafluoro ethyleneTROX: TROX TECHNIK GmbH.HVAC: Heating, Ventilation and Air ConditionMP Company: Microporous LLCEUCEB: European Certification Board for Mineral fiber ProductsFraunhofer: Fraunhofer-Gesellschaft
RoHS: Restriction of Hazardous SubstancesREACH: Registration，Evaluation and Authorization of ChemicalsMPPS: Most Penetrating Particle SizeArticles of Association: The Articles of Association of Chongqing ZaishengTechnology Co., LtdSSE: Shanghai Stock ExchangeYuan: RMB in Chinese YuanN/A: Not applicable
Chapter 2 Company Profile and Key Financial Indicators
Ⅰ. Company InformationCompany Name in Chinese：重庆再升科技股份有限公司Company Name：CHONGQING ZAISHENG TECHNOLOGY CO., LTDAbbreviation of company name：ZAISHENG TECHNOLOGYLegal representative of the company：Mr. GUO Mao
Ⅱ. Contact and Contact Information
| Board Secretary | Securities Affairs Representative | |
| Name | Ms. XIE Jia | Ms. LIU Jiapei |
| Add. | No. 1, Chanyi Road, Huixing Street, Yubei District, Chongqing | |
| Phone | 86-023-88651610 | |
| Fax | 86-023-88202892 | |
| E-mail Add | zskjzqb@cqzskj.com | |
Ⅲ. Basic Introduction
| Registered Address | No. 1, Chanyi Rd., Huixing St., Yubei Dist., Chongqing |
| Historical Changes of Registered Address | In Jan. 2020, it changes from No.197, Lianggang Ave. Yuebei Dist., Chongqing (IPO Add.) to the present one. |
| Official Address | No. 1, Chanyi Rd., Huixing St., Yubei Dist., Chongqing |
| Postal Code | 401120 |
| Website | www.cqzskj.com |
| mail@cqzskj.com |
Ⅳ. Information Disclosure and Storage Location
The name and website of the media where the company discloses its annual report:
? Shanghai Securities News (www.cnstock.com)
? China Securities News (www.cs.com.cn)
? Securities Times (www.stcn.com)
? Securities Daily- (www.zqrb.cn)
The website of the stock exchange where the company discloses its annual report:
Shanghai Stock Exchange, www.sse.com.cn
Location of company annual report: No. 1, Chanyi Rd., Huixing St., Yubei Dist.,Chongqing
V. Stock Profile
| Stock Type | Stock Exchange | Stock Abbreviation | Stock Code |
| A Share | Shanghai Stock Exchange | ZAISHENG TECHNOLOGY | 603601 |
Ⅵ. Other Relevant Information
(1) Accounting firm hired by the company (domestic):
Name: Baker Tilly China Certified Public Accountants (Baker Tilly China)
Office Add.: Areas A-1 and A-5, Building 68, No. 19, Chegongzhuang WestRd., Haidian Dist., Beijing
Signing Accountant: Mr. SHEN Jun, Mr. HUANG Luyao
(2) Sponsor of Performance continuous supervision duties during the reportingperiod：
Name: Huafu Securities Co., Ltd.
Office Add.: Floor 3rd, 4th and 5th, Building 1#, No. 27, Guping Rd., GulouDist., Fuzhou City, Fujian Province
Sponsor representative name: Mr. CHEN Canxiong, Mr. Dai Kunzu
Period of continuous supervision: From 2020-5-9 to 2022-12-31
Ⅶ. Major Accounting Data and Financial Indicators in The Past Three Years
1. Key Financial Data
Unit: Yuan Currency: CNY
| Major Accounting Data | 2021 | 2020 | YOY (%) | 2019 |
Operating revenue
| Operating revenue | 1,884,228,703.44 | 1,252,193,566.26 | ||
| Net profit attributable to the shareholders of the listed company | 359,677,001.99 | 170,937,571.47 |
Net profit attributable to the shareholders of the listedcompany after deducting the non-recurring profits andlosses
| Net profit attributable to the shareholders of the listed company after deducting the non-recurring profits and losses | 339,549,989.10 | 164,258,861.60 |
Net cash flows from operating activities
| Net cash flows from operating activities | 291,270,329.26 | 344,513,801.22 | ||
| At the end of 2021 | At the end of2020 | YOY (%) | At the end of 2019 | |
Net assets attributable to the shareholders of the listedcompany
| Net assets attributable to the shareholders of the listed company | 1,821,254,074.67 | 1,424,872,604.20 | ||
| Total assets | 2,742,389,115.64 | 2,448,260,581.66 |
2. Key Financial Indicators
Unit: Yuan Currency: CNY
| Major Financial Indexes | 2021 | 2020 | YOY | 2019 |
| Basic earnings per share | 0.3461 | 0.5037 | -31.29% | 0.2432 |
Diluted earnings per share
| Diluted earnings per share | 0.3438 | 0.4971 | -30.84% | 0.2384 |
Basic earnings per share after deductingnonrecurring profits and losses
| Basic earnings per share after deducting nonrecurring profits and losses | 0.3130 | 0.4755 | -34.17% | 0.2337 |
Weighted average ROE (%)
| Weighted average ROE (%) | 13.08 | 21.59 | -8.51 PP | 12.48 |
Weighted average ROE after deducting non-recurringprofits and losses (%)
| Weighted average ROE after deducting non-recurring profits and losses (%) | 11.83 | 20.38 | -8.55 PP | 11.99 |
Explanation of the company's main accounting data and financial indicators for the firstthree years at the end of the reporting period:
During the reporting period, Zisun operating income decreased by 14.04% overthe same period last year. The reason is that the epidemic caused a sharp increase in therevenue in 2020 from masks and melt-blown material. After removing the impact factorof epidemic related materials, our revenue from other products in 2021 hit an increaseof 0.92% over last year.In2021, the net profit attributable to shareholders of the listed company decreasedby 30.64% compared with the same period of last year, and the net profit after deductingnon-recurring gains and losses decreased by 33.55%. The reason also is epidemicrelated materials which has high sales revenue and gross profit in 2020 and dropsignificantly in 2021.
Ⅷ. Differences in Accounting Data Under Domestic and Foreign Accounting
Standards
1. Differences in Net Profit and Net Assets Attributable to Shareholders of ListedCompanies in The Financial Report Disclosed in Accordance with Both TheInternational Accounting Standards And The Chinese Accounting StandardsN/A
2. Differences Between Net Profit and Net Assets Attributable to Shareholders ofListed Companies in Financial Reports Disclosed in Accordance with ForeignAccounting Standards And Those Disclosed In Accordance With Chinese AccountingStandards
N/A
3. Explanation of Differences Between PRC and Foreign Accounting Standards
N/AⅨ. Key Financial Data by Quarter in 2021
| Items | Q1 | Q2 | Q3 | Q4 |
Operating revenue
| Operating revenue | 452,243,825.57 | 336,758,146.18 | 367,167,688.29 | 463,541,182.62 |
Net profit attributable to theshareholders of the listedcompany
| Net profit attributable to the shareholders of the listed company | 80,444,838.44 | 59,588,415.44 | 47,122,840.90 | 62,315,257.25 |
Net profit after deducting non-recurring gains and lossesattributable to shareholders oflisted companies
| Net profit after deducting non-recurring gains and losses attributable to shareholders of listed companies | 76,469,217.74 | 53,702,649.19 | 38,014,028.42 | 57,432,298.52 |
| Net cash flows from operating activities | 25,316,476.29 | 59,462,581.51 | -13,185,127.86 | 77,178,749.03 |
Ⅹ. Non-Recurring Profit and Loss Items and Amount
Unit: Yuan Currency: CNY
| Non-recurring profit and loss items | Amount in 2021 | Note (If applicable) | Amount in 2020 | Amount in 2019 |
Profit or loss from disposal of non-current assets
| Profit or loss from disposal of non-current assets | -127,483.11 | 747,450.43 | -98,022.36 |
Unauthorized approval, or no formal approval documents, or occasional tax refunds orexemptions
| Unauthorized approval, or no formal approval documents, or occasional tax refunds or exemptions |
Government subsidies included in current profits and losses except for government subsidiesclosely related to the Company business, in line with national policies and obtained by quotaor quantity at unified state standards
| Government subsidies included in current profits and losses except for government subsidies closely related to the Company business, in line with national policies and obtained by quota or quantity at unified state standards | 28,433,861.58 | 21,563,520.37 | 13,930,181.59 |
Capital occupation fees charged to non-financial enterprises included in current profit andloss
| Capital occupation fees charged to non-financial enterprises included in current profit and loss |
The investment cost of acquiring subsidiaries, associates and joint ventures is less than theincome generated by the fair value of the identifiable net assets of the investee when thecompany acquires the investment
| The investment cost of acquiring subsidiaries, associates and joint ventures is less than the income generated by the fair value of the identifiable net assets of the investee when the company acquires the investment | ||||
| Profit and losses on non-monetary assets exchange |
Profit and losses on entrusting others to invest or manage assets
| Profit and losses on entrusting others to invest or manage assets |
Various asset impairment provisions accrued due to force majeure factors such as naturaldisasters Debt restructuring gains and losses
| Various asset impairment provisions accrued due to force majeure factors such as natural disasters Debt restructuring gains and losses |
| Debt Restructuring Profit and Losses |
Enterprise restructuring costs, such as employee placement costs, integration costs, etc.
| Enterprise restructuring costs, such as employee placement costs, integration costs, etc. |
Profits and losses that exceed fair value from transactions where the transaction price isobviously unfair
| Profits and losses that exceed fair value from transactions where the transaction price is obviously unfair |
Net profit and loss for the current period from the beginning of the period to the date ofmerger of subsidiaries arising from business combination under the same control
| Net profit and loss for the current period from the beginning of the period to the date of merger of subsidiaries arising from business combination under the same control |
Profits and losses arising from contingent events unrelated to the normal operation of thecompany
| Profits and losses arising from contingent events unrelated to the normal operation of the company |
Profit or loss on changes in fair values of held-for-trading financial assets, derivativefinancial assets, held-for-trading financial liabilities and derivative financial liabilities, andinvestment income obtained from disposal of held-for-trading financial assets, derivativefinancial assets, held-for-trading financial liabilities, derivative financial liabilities and othercredit investment, except for effective hedging operations associated with the company’snormal operation
| Profit or loss on changes in fair values of held-for-trading financial assets, derivative financial assets, held-for-trading financial liabilities and derivative financial liabilities, and investment income obtained from disposal of held-for-trading financial assets, derivative financial assets, held-for-trading financial liabilities, derivative financial liabilities and other credit investment, except for effective hedging operations associated with the company’s normal operation | -36,984.00 | 1,541,374.19 | -4,257,111.97 | |
| Reversal of provision for impairment of receivables subject to separate impairment test |
Profits and losses from external entrusted loans
| Profits and losses from external entrusted loans |
Gains and losses arising from changes in the fair value of investment properties that aresubsequently measured using the fair value model
| Gains and losses arising from changes in the fair value of investment properties that are subsequently measured using the fair value model |
The impact of a one-time adjustment on current profit and loss according to the requirementsof tax, accounting and other laws and regulations on current profit and loss
| The impact of a one-time adjustment on current profit and loss according to the requirements of tax, accounting and other laws and regulations on current profit and loss |
| Custody fee income from entrusted operations |
Other non-operating revenue and expenses except for the abovementioned items
| Other non-operating revenue and expenses except for the abovementioned items | 70,582.63 | 265,234.04 | -1,667,616.05 | |
| Other profit and loss items that meet the definition of non-recurring profit and loss |
Minus Income tax impact
| Minus Income tax impact | 4,244,470.37 | 3,755,402.28 | 1,234,469.26 |
Affected amount of minority equity（after-tax）
| Affected amount of minority equity（after-tax） | 242,348.57 | 235,163.86 | -5,747.92 | |
| Total | 23,853,158.16 | 20,127,012.89 | 6,678,709.87 |
Ⅺ. Items Measured at Fair Value
Unit: Yuan Currency: CNY
| Items | Dec.31, 2020 | Dec. 31, 2021 | Current Period Change | Amount Of Impact on Current Profit |
| Transaction Monetary Assets | 20,428,616.00 | 2,391,632.00 | -18,036,984.00 | -36,984.00 |
Accounts Receivable Financing
| Accounts Receivable Financing | 94,794,793.11 | 82,675,886.76 | -12,118,906.35 |
Accounts Receivable Financing
| Accounts Receivable Financing | 600,000.00 | 4,350,000.00 | 3,750,000.00 |
Total
| Total | 115,823,409.11 | 89,417,518.76 | -26,405,890.35 | -36,984.00 |
Chapter 3 Management Discussion and AnalysisI. Discussion and Analysis of Operating Conditions
(1) Company Profile
With the mission of “Clean Air” and the vision of “Working Hard for EnergySaving and Cleanliness, Striving for The Happiness of Future Generations”. Zisun willcontinue to uphold the goal orientation of start with purpose and devote all energy tothe work related to “Clean Air” without any distractions, carry out innovative R&D andapplication around the beforehand, processing, and afterwards phrase of clean air, andstrive to achieve the long-term strategic goal of “Be the Global Leader In Clean AirIndustry”.
Zisun, with stable growth, is a future-oriented platform company driven by teambuilding and innovation. Zisun adheres to the organizational structure of “Life, Inter-growth, Zisun”, aiming to realize platform-based transformation, with the culturalplatform of “Conscience, Self-drive, Platform Sharing, Mutual Growing and Win-win”.
Focusing on the future, Zisun actively explores and utilizes the digital technology ofthe times. Zisun continuously optimizes and iterates existing production methods andproduct quality, improves production efficiency, and solves problems such asoverproduction, disorderly competition, and low-level repetitive construction in theindustry. At the same time, Zisun shares information, resources, and technology withits peers and users to give full play to its symbiotic advantages.
Zisun focus on the research of new materials such as super-fine fibers, membrane,adsorption materials, micro electrostatic materials, oil and gas separation materials, andsound and heat insulation materials. Based on the owned technology of materials andour National Enterprise Technology Center, Zisun deeply excavates the advantageousproperties of materials. Zisun gives full play to the technical advantages, materialadvantages, testing advantages, R&D advantages and design advantages that have beencultivated for many years in the fields of “Clean Air” And “High Efficiency and EnergySaving”. Zisun implements a strong integration and cross-border strategy, continuouslyexpands the application field and has served the area of industry and civil, medical,electronics, agriculture and animal husbandry, indoor public space, military industry,aerospace and other fields.
Zisun focuses on innovative R&D and application exploration around the wholeprocess of the beforehand, processing, and afterwards phrase of “Clean Air”, andimplements a strong industrial interconnection strategy to provide professionalmaterials and products for the “Clean Air” And “High Efficiency and Energy Saving”fields. Zisun holds a strong scientific research system, a large-scale production base,
and sufficient capital sources, and is committed to building a leading company in theclean air industry.
We think Clean Air has beforehand, processing, and afterwards phrase.Afterwards phrase is to put a “Mask” on the protected object which not only ishuman being, animals and plants but also people’s living and working space, and thehuman body itself.Processing phrase is to cover the pollutant with a “mask”, which means that thepollutants generated in the process shall be removed as far as possible to preventpollutants from being discharged into the atmosphere.Beforehand phrase is to make pollutants as little as possible, which means that touse clean energy and energy-saving materials as much as possible, and adopt a cleanway of life and production, and adopt a clean way of life and production, and saveenergy and electricity as much as possible. Beforehand phrase is also regards as energysaving portfolio of Zisun. Finally, to eliminate the “Mask” and give a world of blue skyand white clouds to future generations.
(2) Introduction to Zisun Technical Barriers
Zisun has been deeply involved in the research and development, production andapplication of micro glass fiber for tens of years and had built extremely high technicalbarriers. Micro glass fiber is the core raw material of glass fiber filter media, vacuuminsulation panel core material, insulation mat and AGM separator etc...
Mainly made of minerals such as quartz sand, through the physical action of high-speed airflow, micro glass fiber is super fine, short, flocculent, soft and cotton-like. Itpresents low density, good insulation, heat resistance, corrosion resistance. These ultra-small diameter micro glass fibers are intertwined with each other so that they formnumerous tiny gaps. Then this structure has good special effects on filtering, adsorbing,restricting movement of small particles and molecules, etc.
Micro glass fiber is a new inorganic non-metallic material with strongprofessionalism and high entry barriers. Pushed by the various national policypromotion and industry technology iterative update, the productivity and numbers ofsmall producer declines year by year whereas large-scale ones gradually become biggerand stronger.
The diameter of Zisun micro glass fiber could reach 0.1-3.5μm. Zisun holds theindustry-leading, production scale with a variety of patents of formula, equipment andproduction process. The R&D and production of micro glass fiber has high industrybarriers, mainly including technical barriers, process barriers, brand barriers and scalebarriers.
The stable production of micro glass fiber requires continuous R&D investment,superb production technology, professional formula ratio and years of technicalaccumulation.
On a global scale, Zisun owns the ability to independently design manufacture
| TechnicalBarriers | The ultrafineness of the fiber diameter has a direct impact on itsfiltration, thermal insulation and other characteristics. Theproduction of stable ultra-fine nmicro glass fiber requirescontinuous R&D investment, superb production technology,professional formula ratio and years of technical accumulation.Our products have passed EUCEB and German Fraunhofercertification, which are safe, harmless and environmentallyfriendly. |
| CraftBarriers | Through self-designed production equipment, complex processtechnology, systematic control process, unique ingredient formula,and complex processes such as multiple accurate tests, Zisun canproduce micro-glass fiber wool with uniform microporousstructure and stable chemical properties. In order to achieve ultra-fineness and at the same time achieve mass production control,the requirements for process technology are really high. |
| BrandBarriers | Excellent product performance and consistency are critical tocustomer selection.The standards of customers are strict, and the introduction periodis generally long. Once selected, it will form a strong customerstickiness, and will be more trustworthy to companies with brandand technology accumulation in the industry. |
| ScaleBarriers | Zisun has the large-scale production capacity from microfiberglass wool to downstream products, and continuously improvesthe automation and intelligence in production and operationactivities, continuously optimizes resource allocation, consolidatesthe industrial chain, and taps economic benefits. ,Our industrialization, large-scale, intelligent production andcontinuous process improvement continue to improve energyutilization efficiency and continuously strengthen the ability tocontinuously reduce costs. |
Zisun Micro Glass Fiber Industry Barriers
equipment, unique ingredient formula patents, and the ability to control complex andprecise systems.
(3) Introduction to Zisun Products by Application Fields
1. Main Products in Clean Air
Zisun holds multiple core filter materials and filter technologies including highperformance glass fiber filter media, low-resistance melt-blown filter, high-efficiencyPTFE membranes, micro electrostatic filter media, nano-filter materials (underdevelopment) and chemical filter materials and other filter materials and equipment.
| Micro Glass Fiber VS normal Glass Fiber | ||||
| Micro Glass FiberMicro Glass Fiber | ||||
| RawMaterials | Quartz sand and other mineralraw materials | Quartz sand and other mineral rawmaterials | ||
| ProductionProcess | Forming with high-speedairflow and physical action | Pool kiln drawing method, cruciblemethod, etc. | ||
| Physical Size0.1um to 5um5 | More than ten microns to tens ofmicrons | |||
| AppearanceWhite, soft, flocculent | Continuous, fixed-length, multiplefiber bundles | |||
| Performance | Special properties such asfiltration, adsorption,restriction of movement, etc. | Insulation, heat resistance, corrosionresistance, high mechanical strength | ||
| Common Use | As the core raw material ofglass fiber filter media, VIPcore material and batteryseparator etc. | Made of glass fiber cloth/felt bywoven/non-woven process, Or tomake composite materials bycomposite reinforced resin, cementand other materials,used forbuilding waterproof and thermalinsulation, auto parts, wind powerblades, electronic cloth, etc. | ||
Taking different regions, different scenarios, different industry characteristics intoconsideration, Zisun provides customized products for users. There is a fullyconsideration of temperature, humidity, space, region, environment, function and otherfactors on air quality. The goal is to satisfy user’s pursuit of dust-free, sterile, andhealthy environment and solve the current problems of high energy consumption,difficult maintenance, hardness of maintenance and loud noise.
As one of the few worldwide with the supply capacity of high-performance glassfiber media, low-resistance melt-blown filter media, high-efficiency PTFE membranes,micro electrostatic filter and chemical filter materials, our “Clean Air” materials coverinternational standard filtration efficiency (such as EN779, EN1822 andASHRAE/HEPA/ULPA) with the MPPS efficiency of 99.999999% and above.
* The filtration efficiency of air filter material varies with dust particle size. At acertain particle size point, the efficiency is the lowest, that is, the penetration rate is thelargest, which is called the most easily penetrable particle size (MPPS). MPPS varieswith filter material and air speed. For HEPA and ULPA air filter materials, MPPS isgenerally between 0.1-0.25μm.
High-performance glass fiber filter media, low-resistance melt-blown filtermaterial, and high-efficiency PTFE membrane are produced by each patentedtechnology. Based on the connection and combination of superfine fibers of differentdiameters, those air filter materials, which can be observed with distinct morphologiesunder SEM, hold different filtration propertiesDuring the production process, Zisun needs to control the raw material technology
| NameAdvantageUsage | |||
| CLEAN AIR | MicroGlassfiberFilter Media | made of ultra-fine glass fiber, fiberdistribution is uniform, high filtrationprecision, large dust holdingcapacity, good physical strength,good machinability, heat resistance,flame retardant, coveringASHRAE/HEPA/ULPA grades | Used in high-end manufacturingsuch as semiconductor, medicine,biology, also in areas that requirethe Solution of fine particles of0.3um and below |
| Melt-blownFilter Media | made of polypropylene, the fiberdiameter of 1-5um, with a uniquecapillary structure, electrostaticelectreted, the filtration efficiency ofHEPA level, with excellentperformance of both of filtrationand physical strength | Used in air purifiers, fresh airsystems, personal protection andother fields | |
| High-efficiencyPTFEMembrance | Made of nano-fineness PTFE fiber,very high porosity,combination of ultra-low resistanceand ultra-high efficiency,Waterproof and breathable, long life,chemically stable | Used in fields with high filtrationefficiency and low systemresistance requirements, such aselectronics, semiconductors, etc.,and also in fields with waterproofand impact resistancerequirements, such as vacuumcleaners, etc. | |
| MicroElectrostaticFilterMaterial | High capture efficiency, zeroconsumables, reusable cleaning, longlife, low wind resistance, low noise,and more energy saving | Used in indoor air treatment,dealing with polluting particles,efficiently removing air VOCs,quickly and effectively killingpathogenic microorganisms in theair, eliminating peculiar smell in theair, and improving air freshness | |
| NanofiberFilter Media | Fiber diameter of 0.3-0.5um, couldbe used in combination with woodpulp fiber, synthetic fiber and othermaterials, with good durability,physical strength, temperatureresistance and dust holding capacity | Used in automobile cabin, engineintake, gas turbine and high-endmanufacturing where there is aneed for particulate mattermanagement | |
and stabilize large-scale production at the nanoscale. The comprehensive technology isextremely high.
1.1 Glass Fiber Filter Paper
Fine micro glass fiber is the main raw material of glass fiber filter media which isproduce by Wet-laid process. Usually, the thickness of this glass fiber filter media is
0.3mm. Compared with other filter materials made of animal and plant fibers, syntheticfibers and activated carbon, it has the characteristics of large dust holding capacity, highfiltration efficiency and uniform fiber distribution. As an ideal clean air filter material,it is a core component of clean air equipment. Glass fiber filter media is widely used inadvanced manufacturing, biomedicine, animal husbandry and other fields that requirehigh air cleanliness.
(Fig of Glass Fiber Filter Media Product)
(High-performance glass fiber filter media，Zoom in 488 times)
1.2 High-efficiency PTFE Membrane
PTFE is the abbreviation of polytetrafluoro ethylene. It has a molecular weight,which is generally millions, either hundreds of thousands to the lowest or more than tenmillion to the highest. The global industry continues to explore and develop new filtermaterials in recent years. PTFE membrane has attracted widespread attention in theindustry for its unique molecular structure and superior filtration performance. Bulkingand stretching the PTFE molecule in two directions, here come a high-efficiency PTFEmembrane containing a large number of micropores and high porosity. It combines theadvantages of more stable chemical properties, more uniform fiber distribution, higherfiltration performance, and lower resistance and become an irreplaceable new high-endfilter material in some special application fields.After several years of R&D, Zisun owning unique technical advantages, is one ofthe few companies in the world that can stably produce high-performance PTFEmembranes in large quantities.Due to ultra-high efficiency and ultra-low resistance, PTFE Filters shows lowsystem resistance, low energy consumption and stable chemical properties which arewidely used in panels, semiconductors, medicine, household appliances and otherindustries. It can also be matched with other filter materials and equipment to provideoptimal "Clean Air" solutions for different scenarios
1.3 Low-resistance Melt-blown Media
Low-resistance melt-blown media is produced by melt-blown method, in whichpolymer electret masterbatches such as polypropylene are blown through the polymermelt at high temperature and high speed, so that the fibers are rapidly stretched, and thefibers are then cured on the curtain device to form melt-blown filter media. Thefiltration performance is influenced by the fineness of fiber diameter and electrostaticadsorption effect. The low-resistance melt-blown media has a unique capillary structureand the filtration efficiency can reach HEPA level, which can be used in air purifiers,fresh air systems, individual protection and other fields.
1.4 Micro Electrostatic Filtration Media
Micro electrostatic filtration media uses a strong electric field with a uniquedielectric material as the carrier to sterilize and adsorb fine particles (blocking aerosols)to achieve air disinfection and purification technology. The dust collection module ismade of non-metallic materials (polymer) and graphene materials as carriers, and iscombined with driving circuits, which overcomes the disadvantages of traditional metalelectrostatic generation of ozone, lightens arc discharge, with powerful function ofefficient sterilization, adsorption of particles as small as 0.01um.
1.5 Chemical Filtration Media
Chemical filtration media is used for the treatment of nano-scale molecularcompound gases such as VOCs, AICD, BASE, etc., and extremely low concentrationsof airborne molecular pollutants at the ppb level one billionth concentration) or evenppt level (one trillionth concentration).
Zisun has made a breakthrough in the bottleneck of airborne molecular pollutantcontrol technology through in-depth principle research and application practice. Weprovided chemical filtration equipment for Hefei Jinghe Semiconductor Phase II projectin the semiconductor field, Nanjing China Electronics Panda Lighting, KinWongElectronics and CSCEC Electronics in the panel field, Nine Dragons Paper, Jinhai Pulp& Paper and other paper companies, as well as the Bank of China and China SettlementCenter data room projects to provide chemical filtration equipment to ensure safeproduction in many industries.
With the national policy’s emphasis on “high-quality development” and “high-quality life”, Zisun increasingly recognize that CLEAN AIR materials and technologyplay an important role in this area of improving the work efficiency of people andequipment, minimizing energy consumption, benefiting human health andenvironmental safety.
Zisun has been cultivating the technology of clean air materials for many years,
actively excavating the properties of materials, and striving to expand new materialsand new applications.
2. Technical Mechanism of Zisun Clean Air Materials
The materials, equipment and solution of Zisun Clean Air portfolio is capable toprotect human health, high-end manufacturing production processes, and theenvironment from the harm the air pollutants.Air pollutants components can be subdivided into particulate matter (PM) andairborne molecules (AM). As shown in the figure, different particulate pollutants in theair have different sizes, ranging from 0.1um to 500um.
(Fig from Visual Capitalist)
Common sources of particulate pollutants can be divided into four categories:
? Natural source: soil dust, pollen, spore, bacteria.
? Fixed Manmade source: fuel combustion (e.g., electricity generation,metallurgy, petroleum Industry, chemical industry, textile industry, heatingsupply, various industrial process, cooking etc.）
? Moved Manmade source: Exhaust gas emitted into the atmosphere
when various vehicles consume fossil fuel.
Different production and living environments have different requirements forclean air. From high-end manufacturing to thousands of households, Zisun Clean Airmaterials have important applications scenarios.In the semiconductor field, for example, the production environment requiresextremely high cleanliness, and the airborne particulate contaminants have a significantimpact on the process yield, performance and reliability of products. A rule of thumb isthat the particle size should be less than 1/10 times the size of the smallest feature onthe device, i.e., a particle with a diameter of 0.03?m will damage a feature with a linewidth of 0.3?m. Therefore, controlling particulate contamination in the semiconductormanufacture process is of great significance to the economics of the production process.For the manufacturing process of panel field, the particles will adhere to the
surface of the substrate. In addition, the electrostatic attraction, Brownian motion,thermal motion, photosensitive phenomena, and colloidal micelle effects may causeparticle adhesion. The rule of thumb is that the particle size must be less than half ofthe minimum device feature size, particles larger than this size can cause fatal defects,such as a 2 μm feature size cannot touch particles larger than 1 μm in size.For the public’s daily life related to indoor spaces such as homes, schools, offices,hospitals, etc., the state, industry, and the public are gradually emphasizing, payingattention, and popularizing the effects of airborne particulate pollutants on health.Airborne particulate matter can enter the human body through respiratory, digestion andskin, and has multiple negative impacts on human health.Respirable particulate matter (PM10) with an aerodynamic equivalent diameter ofless than 10 μm can enter the upper and lower respiratory tract of the human body.PM2.5 and smaller diameter particles can enter the lungs and alveoli. PM0.1 canpenetrate the body through the capillary membrane of the alveoli where the air isseparated from the blood flow.
In addition, fine particles may be enriched on heavy metals, acidic oxides, organicpollutants (such as polycyclic aromatic hydrocarbons, pesticides, etc.), and may also becarriers of bacteria and fungi, which are extremely harmful to humans.
(Fig from encyclopedie-environnement.org)Observed from the nano meter scale, Zisun high-performance glass fiber filtermedia, low-resistance melt-blown filter media, and high-efficiency PTFE membraneshave unique filtration structures. According to the diffusion effect, interception effect,inertial effect, van der Waals force and Brownian motion, and sieve effect, our materialscapture and intercept particulate pollutants in the air with various mechanisms.With a variety of patented technologies, Zisun can produce high performancefiberglass filter media, low resistance melt blown material and high efficiency PTFEmembrane in a stable and large scale and make different clean air materials with highfiltration efficiency with the help of connecting combinations of micron-level fibers ofdifferent diameters, which can filter with specific efficiency for various particles in theair. Zisun tests the performance of clean air filtration materials with 0.3um and 0.1umdiameter test particles, and the highest efficiency can reach 99.999999%.
There are common airborne molecular pollutants as follows:
? VOCs: e.g., Benzene, Toluene, Octane, Butyl Acetate, Ethylbenzene, Xyleneand Nonane.
? Acid: e.g., Hydrogen Sulfide, Sulfur Dioxide, Nitrogen Dioxide, Nitric Oxide,
Nitric Acid.
? Alkaline: e.g., Ammonia
? Organic Acids: e.g., hydrochloric acid, hydrogen fluoride, sulfur dioxide,
acetic acid, formic acid
? Ozone molecules
Zisun chemical filter material is for the treatment of nano-scale molecularcompound gases such as VOCs gas, ACID gas, and BASE gas. Its main principle is touse three recording routes based on van der Waals force adsorption, chemical reactionadsorption and chemical reaction absorption to treat airborne molecular pollutants.For different high-end manufacturing fields such as semiconductors, panels,
electronics, and medical care, airborne molecular contamination has differentsignificant impacts on different production processes and production processes.
(Classification of airborne molecular pollutants in semiconductor industry)Taking the semiconductor industry as an example, as SEMI F21-95 StandardClassification of Airborne Molecular Contaminant levels in Clean Environments says,airborne molecular contamination are generally divided into 4 categories. Airbornemolecular contamination directly affects the yield and production efficiency ofsemiconductor manufacturers. For panel manufacturers, Airborne MolecularContaminant can cause various problems such as poor brightness, spots, andacidification of the organic layer of the panel, especially the Lens Haze phenomenon inthe exposure machine process, which shortens the life of the equipment.According to the specific production environment and process requirements ofdifferent users, Zisun comprehensively considers the particle size, chemical properties,pollutant concentration and other factors of the airborne molecular contamination to betreated customizing the design of the type and structure of chemical filter materials toensure the "clean air" of the user's production environment.
3. Solutions and Service of Zisun Clean Air Materials
In response to the specific composition of air particle pollutants and airbornemolecular pollutants, Zisun provides users with a "package" of clean air materials andtechnology combinations, tailored to local conditions with Zisun high-performanceglass fiber filter media, low resistance melt-blown materials, high-efficiency PTFEmembrane, micro-electrostatic filtration materials, chemical filtration materials, tomeet the needs of industrial, commercial, residential and other customers in differentscenarios of dust-free, sterile, healthy. For different air pollutant control needs, Zisunprovides rich material combination solutions, and empowers the platform to provideusers with in-depth services, and firmly establish the brand image of “ENJOY CLEANAIR, USE ZISUN TECHN”.
4. Main Products of Zisun High Efficiency and Energy Saving
In the field of High Efficiency & Energy Saving, Zisun has Micro Glass Fiber,Vacuum Insulation Panel Core (VIP core material), Absorbed Glassfiber Mat (AGMseparator), Aeronautics Insulation for Aircraft, Spray Glass Fiber, High Silica Fiber andother products, which serve the high-end energy saving field with high requirementsfor thermal insulation, acoustic insulation and energy saving.
Our products are conducive to reducing energy consumption, effectivelyimproving energy utilization efficiency, reducing carbon emissions, achieving energyconservation and helping the national green and low-carbon development.
5. The Working Mechanism, Solutions and Service of Zisun High Efficiencyand Energy Saving Materials
Our products such as Aeronautics Insulation for Aircraft, Spray Glass Fiber, HighSilica Fiber, etc. are made into a series of high-efficiency energy-saving productsthrough a special process based on the ultra-fine, uniformity, insulation, corrosion
resistance and other characteristics of our micro glass fiber.
| NameAdvantageUsage | ||
| Microglassfiber | A fibrous cotton-like material made ofhigh-temperature molten silicate (glass)and formed by external forces such ashigh-speed airflow, the average fiberdiameter is about 0.1μm-3.5μm, and hasgood mechanical strength, thermalconductivity, thermal insulation, soundabsorption. Sound insulation, corrosionresistance, chemical stability and othercharacteristics | used in the fields of "clean air" and "highefficiency and energy saving", the coreraw material of glass fiber filter paper,vacuum insulation panel core material,absorbed glass mat of battery etc. |
| Vacuuminsulationpanel corematerial | made of micro glass fiber, low thermalconductivity, small bulk density, non-combustible, good physical processability | Used in green home appliances, buildingenergy conservation and thermalinsulation, etc., the core raw material ofvacuum insulation panel |
| absorbedglass mat | made of micro glass fiber,good acidcorrosion resistance, uniform thickness,high porosity, fast absorption ofelectrolyte, good tensile strength in bothvertical and horizontal directions, goodcompression performance to ensure acertain extreme pressure, good insulation,etc. | used in vehicles such as electric bicycles,automobiles, aircraft and ships, energystorage components of photovoltaicpower generation equipment, wind powergeneration equipment and urban energystorage stations, as well as uninterruptedbackup power supply (UPS) incommunication base stations, databases,traffic monitoring and other fields , is thespecial core material of VRLA battery |
| AeronauticsInsulationfor Aircraft | made of micro glass fiber, with patentedprocess, with the characteristics of lightweight, flame retardant, waterproof,sound absorption, heat insulation, etc. | used in application scenarios with highrequirements for comprehensiveperformance of sound and heatinsulation in aircraft cabins, ship cabins,high-speed railways, subways, etc. |
| Inorganicspray fiber | made of micro glass fiber,Light texture,non-toxic and harmless, sound-absorbingand heat-insulating, fire-resistant andflame-retardant | used for fire protection of buildings,tunnels and other places, heatpreservation and sound absorption ofspecial spaces, heat preservation andenergy saving of mechanical equipment |
| High silicafiber | an exclusive formula and adopts a newprocess,The diameter is stable between 1μm-2μm,has excellent chemical stability andexcellent physical properties, is inert tomost chemicals, and can work normallyand continuously under high heat andstrong radiation conditions | used in the aerospace field, such as thethermal insulation layer of aircraft. |
High efficiency and energy saving
(A certain type of micro glass fiber of Zisun, magnified 500 times)
5.1 Vacuum Insulation Panel Core Material
Zisun Vacuum Insulation Panel Core Material relies on company’s independentR&D. Based on the large-scale production capacity of micro glass fiber and made by avariety of technical indicators of the microfiber glass，Zisun Vacuum Insulation PanelCore Material has the unique pore structure, which confines the air molecules innumerous microporous chambers, reducing heat transfer and convection.
As shown in the figure, a Vacuum Insulation Panel consists of cover, getter andcore material which is the key component for a panel’s performance.
Zisun VIP core material has a global leading comprehensive performance withunique pore structure, excellent uniformity of density and ideal thermal conductivityhave reached the international advanced level and are one tenth of that of traditional
materials, which means it more suitable for long time, extreme temperature, long-termstable insulation and provide the user with long-lasting and stable thermal insulationperformance and greater storage and transportation space.
5.2 Absorbed Glass Mat Separator
AGM separator is one of the core components of the lead acid valve regulatedbattery (aka VRLA battery) used in communication backup power supply, data centerssuch as large Internet companies, operators, banks and financial institutions, in thefields of rail transit and backup power supply for nuclear power plants, as well as innew energy power generation, energy storage for industrial and commercial enterprises,and more. It is applied to urban energy storage stations in the Energy Storage System(ESS), serving the peak shaving and valley filling of wind energy, solar energy andwater energy, the safety of urban electricity consumption, and the peak shaving andvalley filling on the national grid side.It is also widely used in automotive start-stop batteries to ensure that the vehiclestart-stop system (Star-Stop) works, relying solely on the battery to drive in-carentertainment equipment, lighting equipment and other electrical systems when theengine is turned off, and to provide motor energy storage for vehicles with energyrecovery functions (including fuel cars, hybrid cars and new energy vehicles).AGM separator is used to wrap the lead plates of batteries, requiring excellentinsulation, chemical stability and a rich microporous structure that allows the passageof electrons in sulfuric acid while isolating the lead plates from contact within thebattery. The performance of the battery separator has an important influence on thesafety, reliability, service life and electric capacity of VRLA batteries.Our AGM separator is made of micro glass fiber with excellent acid corrosionresistance and high porosity, excellent mechanical processing performance, andoutstanding physical indicators. After two years of rigorous testing by MP company,the results confirm that our AGM products have excellent performance and quality.Zisun AGM products have been supplied to Exide, Tianneng, Nandu, Chaowei and
other outstanding battery manufacturers in batches.
5.3 Aeronautics Insulation for Aircraft
Made by fiberglass, through modified composite and other patented technology,Zisun acoustic and thermal insulation blanket has excellent performance of light weight,flame retardant, waterproof, sound insulation, heat insulation, etc., which can be usedin aircraft cabin, ship cabin, subway and other applications with high comprehensiverequirements for sound insulation and heat insulation.
Zisun has built an acoustic laboratory according to the standard of ASTMcompleted the aerospace quality management system AS9100 certification, and Zisunacoustic and thermal insulation blanket has obtained the qualification certificate ofCOMAC.
The rapid development of global space technology has put forward newapplication environment and requirements for the thermal protection materials ofspacecraft, such as long-time heat protection, high efficiency thermal insulation, highbearing capacity and high reliability of materials. Zisun has successfully developedhigh performance high silica fiber products, which can be used for spacecraft heatinsulation and thermal insulation, and has excellent chemical stability and excellentphysical properties, inert to most chemicals, and can work normally and continuouslyunder high heat and strong radiation conditions. At present, our high-silica fibers havebeen used by international well-known aerospace companies to take the lead in reachingdeep commercial cooperation, which is of great significance to develop high-endapplications in aerospace.
5.4 Micro Glass Fiber Products for Buildings
Our ultra-fine glass fiber is uniform and slender, with moderate aspect ratio,excellent mechanical properties, and good sound absorption and heat insulationproperties. Zisun micro glass fiber has obtained EUCEB non-carcinogenic certificationand Fraunhofer Laboratory biodegradability certification. It has also passed RoHS andREACH hazardous substance testing certification. It is green, environmentally friendly,and biosafe.Based on the various excellent characteristics of our micro glass fiber, Zisun hasexplored the potential of the material to develop and produce a series of products forthe green building field.
5.4.1. Granular Glass Fiber Products
Zisun granular glass fiber products are light, non-toxic and tasteless, with goodweather-resistance, continuous material and convenient construction, which can beparticularly suitable for special-shaped structures, seamless connection and effectivelyblocking the cold and teat bridge, and have three powerful abilities of fire prevention,thermal insulation, sound absorption and noise reduction. Granular glass can also besubdivided into sprayed glass fiber and blown glass fiber.Sprayed glass fiber - It is made of granular cotton to match the size of the fiberspraying equipment. After mixing with water-based adhesive, it is sprayed on thesubstrate to be protected by mixing with atomized water through air pressure pump toform a coating. The coating is naturally dried to form a seamless, overall stable andairtight spray coating with certain strength and thickness. The surface presents elasticnatural texture and fiber texture, and can be widely used in underground garages,equipment rooms, exterior walls, transportation hubs, stadiums, art centers, museums,factories and other different places.Blown glass fiber - It is a kind of cotton with softer texture, larger granular sizeand looser size. It can be directly sprayed into small spaces such as attic ceilings withoutthe use of adhesives through the construction of special blowing equipment. It forms athermal insulation layer with uniform density, no chemical substances, flexible and easyto operate, and is very suitable for thermal insulation applications of high thermalinsulation and high airtight residential buildings.
5.4.2. Energy-saving Glass Fiber Insulation Material for Building
Zisun established Sichuan Zisun Building Energy Conservation Technology Co.,Ltd to the develop and produce more energy efficient, more environmentally friendly,more efficient high-end glass fiber products, relying on its R & D strength and brandadvantages in ultra-fine micro glass fiber industry.
Sichuan Zaisheng glass fiber products have excellent mechanical properties,excellent thermal insulation and sound absorption properties, and the products are light,
soft, non-allergic, low weight capacity, biodegradable and biosafe.
Industrial high-temperature glass fiber, with 4um to 6um of Zisun’ ultra-fine fiberglass fiber as the core material and processed by environment-friendly high-temperature adhesive curing process, has excellent thermal insulation performance, fireand moisture resistance. The product can be widely used in thermal insulation ofequipment and pipelines in electric power, petroleum, chemical, light industry,metallurgy and other industries. Industrial high-temperature glass fiber is made of ultra-fine fiber glass fiber of 4um to 6um of Zaisheng Technology as the core material.Glass fiber for steel structure building, with 4um to 6um of Zisun’ ultra-fine fiberglass fiber of as the core material, organically combined with strength and resilience.The product is easy to construct, effectively avoids the cold-bridge effect, and can bewidely used for thermal insulation and heat insulation of steel structure buildings, blockwater vapor, and prevent the steel structure from corroding.The special glass fiber for animal husbandry fire protection and heat preservationis based on Zisun’ 5um to 7um ultra-fine fiber glass fiber as the core material. Comparedwith other common animal husbandry heat preservation materials, it has obviousadvantages.
High-performance sound-absorbing cotton (also known as fiberglass high-densitypanel) is widely used in applications with high sound-absorption requirements, such asaudio-visual rooms, underground parking garages, auxiliary floor sound insulation, etc.
The porosity of the microfiber structure achieves a balance between elastic shock
absorption performance and mechanical strength, effectively absorbs vibration andsound energy transmitted to the material by pressing layers of ultra-fine and ultra-longfibers, and at the same time has excellent thermal insulation performance, with R valuereaching 0.3 (m
.K)/W. and class-A fireproof material.
II. Overview of the Development and Changes from 2015 to 2021
(1) Adhere To "Three Insistence", Keep an Eclectic and Steady DevelopmentZisun has logged to Shanghai Stock Exchange in 2015 aiming the R&D of thetechnology and materials for the beforehand, processing, and afterwards phrase of cleanair.
Firstly, Zisun insists on standing at the forefront of technology. Secondly, Zisuninsists on developing around the country's industrial policy. Thirdly, Zisun insists onsticking to the manufacturing industry, promoting the high-quality development of theenterprise, and leading the high-quality life of the employees.
Our portfolio cover from Micro Glass Fiber，High Performance Fiber Glass FilterMedia, VIP Core Material to Melt Blown Material, PTFE Membrane, Micro StaticFilter, AMC Filter, Aeronautics Insulation for Aircraft, Spray Glass Fiber, High SilicaFiber.
2022 is the ecological year of Zisun, and we will work around the following threepoints:
Point one: To actively deploy the industrial ecology in the field of clean air.
Point two: To Establish a healthy workplace ecology for employee growth.
Point three: To actively serve users to pursue a better life of science and technologyexperience ecology.
(2) Forge Ahead and Develop Steadily
Since 2015, our main financial indicators have developed steadily, operatingincome and net profit have increased steadily, the asset-liability ratio has remained lowfor a long time, the gross profit margin of single product has been stable, and R&Dinvestment has continued to increase.
From 2015 to 2021, Zisun 's operating income will increase from 234 million yuanto 1.62 billion yuan, CAGR 38.09%; the net profit will increase from 51 million yuanto 249 million yuan, CAGR 30.25%.
Zisun attaches great importance to investor returns and has formulated a
reasonable dividend policy, with total cash dividends of 475 million RMB from 2015to 2020, accounting for 58.65% of the net profit attributable to ordinary shareholdersof the listed company since 2015.
(3) Steady Increase in Production Capacity, Consolidating the LeadingPosition of The Industry
The production capacity of the main products has developed rapidly. Zisuncontinues to consolidate its leading position in the industry in terms of productiontechnology, and the scale advantage of Zisun is becoming more and more obvious. Asof the date of this report, the project under construction of “50,000 tons per year of highperformance ultra-fine fiber glass construction project”, “8,000 tons per year of cleanair filtration material construction project” and “clean air filtration material upgradeand transformation project” has been progressing in an orderly manner.
After the completion of “50,000 tons per year of high performance ultra-finefiberglass construction project”, it can provide sufficient raw materials for ourdownstream products of micro glass fiber.
The above three proposed investment projects will push the Zisun’s product andrevenue scale to a new level, and employees strive to ensure that the project iscompleted and put into production as soon as possible.
(4) Do not Hesitate to Invest in R&D to Consolidate Technical Strength
Zisun does not skimp on continuous R&D investment and values the technicaltalents.
The R&D expenses have increased from 7.11 million RMB at the end of 2015 to
97.7947 million RMB in 2021, and the number of technical personnel has increasedfrom 40 at the end of 2015 to 236 at the end of 2021.
Zisun recruits talents on a global scale with an international perspective for the In-
depth study of Clean Air. Zisun has built a stable talent echelon, created a unique talentmanagement plan, and supported efficient and targeted talent incentive policies, andcultivated a group of technical elites with solid theory and with passion for both Zisunand industry.From a strategic point of view, Zisun always adheres to the high-qualitydevelopment of the enterprise to lead the high-quality life of employees, so that talentscan enjoy their reciprocation.Zisun continues to move forward along the international advanced level, andtalents have a yearn.
The management team employs people without any doubts, so that our employeecan give full play to their strengths. Talents can stand out by streamline administrationand delegate power. Zisun recruits talents with energy fulfilled.
From a practical point of view, Zisun has constructed a talent incentive policy withrich levels including assistance in settlement, daily subsidies, equity incentives and soon.
Zisun attaches great importance to the Industry-University-Research cooperation,cooperating with Tongji University, Chongqing University, Tianjin University andother famous universities in various ways since 2015. Zisun has a professional R & Ddesign team, rich experience in R & D, and an independent R & D system.
Zisun has achieved the full coverage of the raw material formula and preparationprocess of the product with patents. By the end of 2021, Zisun has obtained 151 patentsand dozens of patents have been submitted for review.
Zisun also actively participates in industry academic exchanges and informationsharing. Zisun has published many academic papers, and actively undertakes severalnational and municipal projects. Zisun will continue to expand its R&D team, activelyincubate new products, gather the elements of enterprise development, attract high-endtalents to join, and serve the development of the whole industry.
(5) Promote System Construction with International Vision
Zisun continues to promote the international standard specification system andvarious authoritative certifications. So far, we have passed ISO 19001,IS0 24001,AS9100 and IATF 16949:2016 system Certification. Our microfiber glass has obtainedEUCEB non-carcinogenic certification and Fraunhofer laboratory biodegradabilitycertification. In January 2022, Zisun has obtained the Test Qualification Certificate ofCOMAC.
(6) Strict Management Operation and Continuous Improvement ofManagement Level
As a listed company, Zisun will improve the corporate governance structure instrict accordance with Company Law of the People's Republic of China, Securities Lawof the People's Republic of China, Code of Governance of Listed Companies, StockListing Rules of Shanghai Stock Exchange and other relevant laws.
Zisun ensures the operation standardization and effectiveness of the Board ofshareholders, board of directors and board of supervisors and strictly abides by therelevant laws and regulations of listed companies.
We strengthen the management of investor relations, continues to do a good job ininformation disclosure, adheres to the guidance of investor needs, truthfully, accurately,completely, timely and fairly disclose information.
We continuously improve the initiative, pertinence and effectiveness ofinformation disclosure, and actively accepts the supervision of the society and themajority of investors.
(7) Value Each Employee and Continuously Optimize the WorkingEnvironment
We realized that talent is a great help to promote the development of enterprises.The development of Zisun cannot be separated from the effort of each employee.
Therefore, we create a comfortable and self-driven working atmosphere frommultiple aspects and dimensions of individuals, teams and organizations.
From 2015 to the present, Zisun has a stable management structure with a stablesenior management staff, a rich middle-level staff structure and a continuous increasein the number of technical staff.
Working environment: Zisun optimizes the office and workshop by the strictlycontrol of VOC, CO2, temperature, humidity and. And abundant plants are grown.
Zisun is committed to creating a comfortable, beautiful, clean and technologicallyintelligent office experience center for employees.
Living service support: Zisun has built a courtyard residence in the Zhengyuanfactory area to improve the living environment of employees.
Also, we provide employees with three meals a day for the employees to meet theneeds of the personalized dietary tastes.
Individual and team incentives:
Zisun introduced the “Competitiveness” and comprehensively enhancedemployees’ sense of participation, gain and achievement through the processes of“setting goals - organizing empowerment - evaluation and competitiveness - sharingresults”.
Zisun has set up the Gold Metal Award to stimulate the team awareness andinnovation enthusiasm.
Since January 2018, 2,006 silver medals has been provided, and issued and 103gold medals have been issued.
The 2019 Stock Option Incentive Plan widely covers the middle-level and high-level management employees. And The 2021 Employee Stock Purchase Plan is targetedat the key technical staff.
Those two “plans” are organically combined to create a highly efficient and precisestaff incentive program.
The individual needs are guaranteed in Zisun. There are rich cultural activities and
various team activities from time to time, such as fun sports games, Friday afternoontea and other activities.
(9) Multiple Branding Channels
With the brand strategy of “Enjoy Clean Air, Use Zisun Tech", Zisun has a leadingbrand position in the industry.On the one hand, Zisun has won the trust and reliance of global customers withexcellent product performance and stable supply capacity over the years.On the other hand, with the development of economy and technology, Zisun usesthe Internet (such as WeChat public account, TIK TALK and other platforms) as a toolto enhance brand popularity and expand brand value.Facing the differentiation and diversification of product application fields, Zisunadopts a differentiated marketing model.Zisun explores the core of user needs, does not stick to stereotypes, and choosesthe appropriate model according to local conditions.For example, Zisun actively participates in various industry exhibitions todemonstrate the advanced nature of our materials, technology and production capacity,and also through the establishment of experience stores, allowing users to experiencethe many advantages of the whole-house comfort system.
III. Industry Situation of The Company During the Reporting Period
(1) Overview Of the Industry Situation
In The Fourteenth Five-Year Plan and the Outline of Vision 2035, it proposes topromote green development, promote harmonious coexistence between man and nature,emphasize in-depth pollution prevention and control actions, continuously improveenvironmental quality, accelerate the green transformation of development methods,and comprehensively improve resource utilization efficiency , vigorously develop thegreen economy, build a green development policy system, formulate an action plan for
peaking carbon emissions by 2030, strive to achieve carbon neutrality by 2060, promotea comprehensive green transformation of economic and social development, and builda beautiful China.The “Opinions of the Central Committee of the Communist Party of China and theState Council on Completely Accurately and Comprehensively Implementing the NewDevelopment Concept and Doing a Good Job in Carbon Reaching Peak and CarbonNeutrality” issued by the Party Central Committee and the State Council clearly pointedout:
? To accelerate the formation of green production and lifestyle. Vigorouslypromote energy conservation and emission reduction, comprehensivelypromote clean production, accelerate the development of circular economy,strengthen comprehensive utilization of resources, and continuously improvethe level of green and low carbon development.
? To vigorously develop green and low-carbon industries. Accelerate the
development of new-generation information technology, biotechnology, newenergy, new materials, high-end equipment, new energy vehicles, greenenvironmental protection, and strategic emerging industries such as aerospaceand marine equipment.
? To vigorously develop energy-saving and low-carbon buildings. Continue toimprove energy conservation standards for new buildings, and accelerate thelarge-scale development of ultra-low energy, near-zero energy, and low-carbon buildings. Vigorously promote the energy-saving renovation ofexisting buildings and municipal infrastructure in cities and towns andimprove the energy-saving and low-carbon level of buildings.
The “Proposal of the Central Committee of the Communist Party of China onFormulating the 14th Five-Year Plan for National Economic and Social Developmentand the Visionary Goals for 2035” has made “reaching a new level of people's well-being” one of the main goals of China's economic and social development in the 14th
Five-Year Plan period. To achieve this economic and social development goal, we mustadhere to the people-centered development ideology, further address the most directand realistic interests of the people, promote high-quality development, create a high-quality life, and continuously realize the people's aspirations for a better life.
The China Central Committee and the State Council released the top-level policyof “1+N dual carbon” to help achieve “carbon neutrality and carbon peaking”. Localpolicies are frequently introduced one after another. The global requirements for green,environmental protection and energy saving are constantly improving, and variousdomestic and foreign demands have created more development opportunities for thefields of “clean air” and “high efficiency and energy saving”.
(2) Introduction To the Clean Air Industry
1. Indoor Air Quality
Economic development, the continued prevalence of the epidemic, and thepublic’s yearning for a better life have promoted the improvement of IAQ requirements.In the short term, there is an increasing demand for existing air conditioning systemsand air quality improvement equipment and services（such as ventilators, Air CleaningProducts and Air Filters. In the long run, the demand for indoor air quality solutionscontinues to increase by focusing on providing users with value-added and high airquality solutions.
1.1 Relevant Policies
According to the National Health Commission's "Indoor Air Quality Standards",
(1) People spend more than 80% of their time indoors every day, the air theybreathe mainly comes from indoors, and the chance and time of contact with indoorpollutants are more than outdoor.
(2) The sources and types of indoor pollutants are increasing day by day, resultingin an even heavier level of indoor air pollution on the basis of outdoor air pollution
(3) In order to save energy, the degree of airtightness of modern buildings hasincreased. Due to the imperfect central air-conditioning ventilation facilities, indoorpollutants cannot be discharged outdoors in time, resulting in the deterioration of indoorair quality.WELL & Healthy Buildings Application Guide point out that the air, water,nutrition, light, health, comfort and spirit of buildings affect human health and well-being. Healthy Building Evaluation Standard (T/ASC 02-2016) require that the dailyaverage concentration of indoor PM2.5 is not higher than 25ug/m3, the daily averageconcentration of PM10 is not higher than 25ug/m3, and the daily average concentrationof CO2 is not more than 900ppm.According to the World Health Organization (WHO), nine out of ten people in theworld breathe polluted air and seven million premature deaths each year are linked toair pollution which can be divided into 34% stroke; 26% ischemic heart disease; 22%chronic obstructive pulmonary disease; 12% acute lower respiratory tract infection inchildren; 6% lung cancer.
1.2 Industry Trends
Modern humans, especially urban populations, spend the vast majority of theirtime indoors, and indoor air quality has a significant impact on the general public.According to the U.S. Environmental Protection Agency, indoor air quality is about fivetimes worse than outdoor air quality. After the popularity of air conditioning systems inthe 1970s, the sick building syndrome (SBS) emerged, which refers to adverse healthor comfort reactions of people who spend varying amounts of time in buildings that arenot caused by disease or a well-defined pathology. Studies have proven that sickbuilding syndrome is mainly caused by severe indoor air pollution, high carbon dioxideconcentration, poor lighting, and lack of thermal comfort.
In HVAC systems, air intakes often inhale dust particles, chemical contaminants,harmful viruses and bacteria, and other toxic particles which are captured by filters orlodged in ventilation ducts and other areas and may cause serious health risks. Thenkeeping ventilation systems in good clean and hygienic conditions can help prevent thebuild-up of harmful particles from spreading in the system.
The fresh air system is also subdivided into various modes such as one-way flow,two-way flow and displacement ventilation. Displacement ventilation is a cutting-edgeventilation technology that enables high air quality, thermal comfort, and ventilationefficiency in residential areas, while also saving building energy consumption.
1.3 What Zisun Could Do with Indoor Air Quality
At present, indoor air quality and comfort are generally solved by single ormultiple systems such as HVAC unit, fresh air system and floor heating system.
Our subsidiary Zisun Jinghua , together with Germany TROX, relying on our 20years of rich experience in the field of clean air, has formed a professional team tocreate a comfortable and dust-free air conditioner for the high-end residential market.
Zisun Comfort Dust-free Air Conditioner for residential integrates fresh airpurification, cooling and heating, dehumidification and humidification, variable airvolume intelligent monitoring, and intelligent control into one system to provide userswith a customized whole-house comfort system, combined with our rich “Clean Air”Materials, professional equipment and first-class technology, and strive to create a high-quality life for users that is energy-saving, dust-free, quiet, oxygen-rich, beautiful, andintelligent, and strive to seize the trend of consumption upgrades and the rapiddevelopment of the Internet of Things to promote the development of clean air, developto the user end, provide services, identify the enterprise positioning and competitiveadvantages, and build a system integration ecology in the field of comfortableresidential market.
2. New Energy Vehicles and Other Mobile Space Field
As the epidemic continues to spread, the public is paying more and more attentionto the safety of air quality in mobile spaces such as carriages, airplane cabins, and shipcabins.The structural design of new energy vehicles provides the conditions for them tobe equipped with large-sized, high-efficiency cabin filters.
With the gradual increase in the sales and ownership of new energy vehicles, thecabin filter element of new energy vehicles has ushered in a huge market prospect.
2.1 Related Policies
In October 2021, the Central Committee of the Communist Party of China and theState Council issued the Opinions on Completely Accurately Implementing the NewDevelopment Concept and Doing a Good Job in Carbon Neutralization and the CarbonPeaking Action Plan before 2030.
The plan clearly defines carbon reduction measures which calls for focusing onthe implementation of green and low-carbon transformation of energy, energyconservation, carbon reduction and efficiency enhancement, carbon peaking action inthe industrial sector, urban and rural construction carbon peaking action, transportationgreen and low-carbon action, circular economy boosting carbon reduction action, greenlow-carbon action Carbon technology innovation action, carbon sink capacityconsolidation and improvement action, green and low-carbon national action, andorderly carbon peaking action in various regions, etc.
The "New Energy Vehicle Industry Development Plan (2021-2035)" issued by theGeneral Office of the State Council pointed out that my country's new energy vehicleshave entered a new stage of accelerated development, and new energy vehicles havebecome the main direction of the transformation and development of the globalautomobile industry and a driving force for the continuous growth of the worldeconomy. important engine.
The development of new energy vehicles by integrating various national policiesis an important strategic measure to deal with climate change and promote greendevelopment.
2.2 Industrial Trends
According to the report of the Passenger Vehicle Market Information JointConference, during the year of 2021, the cumulative sales of new energy vehiclesnationwide will be 2.446 million with a cumulative year-on-year increase of 168.0%.
By the end of 2021, the number of new energy vehicles in the country will reach
7.84 million, accounting for 2.60% of the total number of vehicles.
Cars gradually change from a means of transportation to a consumer product withdiverse functional needs. Automobile manufacture companies have moved to directlyfacing consumer demand. As the public pays more and more attention to high qualityof life, car users have increasingly higher requirements for safety, comfort, health, andintelligence during driving.
Therefore, healthy and intelligent new energy vehicles have become thedevelopment direction of many automobiles manufacturing companies around theworld by investing a lot of resources in the research and development of "healthy cars".
Due to its structural advantages, new energy vehicles provide conditions forassembling higher performance, larger size, faster and more efficient cabin filters. Withthe continuous increase in the demand for new energy vehicles, the demand for cabinfilters is increasing day by day.
Some leading new energy vehicle companies have proposed that they havedeveloped “anti-biological and chemical weapons-grade” vehicles because air pollutionwill reduce the life expectancy of the public. This type of new energy vehicle isequipped with a variety of gas detectors and HEPA-level cabin filters, and the airpurification effect of the car cabin is hundreds of times better than other.
New energy vehicles have two sets of electrical systems: high-voltage and low-voltage, and the valve-regulated lead-acid battery has to ensure the power supply of thelow-voltage system of the vehicle and also wake up the high-voltage battery system.As the sales and ownership of new energy vehicles continue to increase worldwide, theinstalled capacity of valve-regulated lead-acid batteries continue to increase, and thedemand and technical requirements of AGM battery compartments are increasing.
2.3 Zisun in the Field of New Energy Vehicles and Other Mobile Space
Zisun has been established to provide a variety of filters for car cabin air safetyand air quality, effectively filtering airborne fine particles, gas pollutants, as well asbacteria, viruses, dust, aerosols, plant Pollen, mold spores, dust mite excretion, etc. Thefiltration effect of particles ≥0.3μm can reach 99.97% and above, allowing drivers toenjoy clean and healthy air in the car, which can enhance driving comfort, protect thehealth of drivers and enhance driving safety, prevent dust from accumulating inside theair conditioning system and prolong its service life.
With the application of valve-regulated lead-acid batteries in automotive start-stopbatteries holding a rise, the installed capacity of valve-regulated lead-acid batteries innew energy vehicles continues to increase, and Zisun AGM separator has also usheredin continuous sales growth. We continue to explore customers of battery manufacturers,insist on exploring material performance, and expand product capacity in real time to
meet the multiple demands of the market for battery separator technology and capacity.
3. High Efficiency Agriculture
Chinese agriculture has created the miracle of feeding 20% of the world'spopulation with less than 10% of the world's land resources. Agriculture is China’sbasic industry. China's modernization is inseparable from agricultural modernization.Comprehensively promoting the rural revitalization strategy and accelerating themodernization of agriculture and rural areas are the basic policies of the state.
3.1 Related policies
The Fourteenth Five-Year Plan and Outline of Vision 2035 proposes:
? to accelerate the modernization of agriculture, improve the quality, efficiencyand competitiveness of agriculture, enhance the comprehensive agriculturalproduction capacity, deepen the adjustment of agricultural structure, promotethe green transformation of agriculture, deeply implement the action ofreducing the number of pesticides and fertilizers, and improve the standardsystem of green agriculture;
? to accelerate the development of smart agriculture, promote the digitaltransformation of agricultural production, operation and management services.
? to adhere to the arable land protection system, strengthen the protection of thequantity and quality of arable land, improve the agricultural science andtechnology innovation system, and build smart agriculture.
In February 2021, the "Opinions of the Central Committee of the Communist Partyof China and the State Council on Comprehensively Promoting Rural Revitalizationand Accelerating the Modernization of Agriculture and Rural Areas" called foraccelerating the promotion of agricultural modernization, strengthening the support of
modern agricultural technology and material equipment, and promoting the greendevelopment of agriculture.
3.2 Industry Status
Plant factory, also known as three-dimensional agriculture, refers to an efficientagricultural system that produces vegetables, medicinal plants and fruits at high spatialdensity in a highly controlled environment, and achieves continuous crop productionon an annual basis through high-precision environmental control in the facility, whichis an automatic control of environmental conditions such as temperature, humidity, light,CO2 concentration and nutrient solution for plant growth using intelligent computersand electronic sensing systems, so that the growth and development of plants in thefacility are not or rarely constrained by natural conditions. Compared with traditionalfield farming, its production process does not use pesticides, uses 90% less water, andsaves up to 95% or more of the land.Precision agriculture is a new type of agriculture in which information technologyis fully integrated with agricultural production. Supported by information technology,a whole set of modern farming operation technology and management system isimplemented according to space, positioning, timing and quantification to reduce theuse of fertilizers and pesticides while improving yields.Plant factories and precision agriculture can save land resources as much aspossible, improve output efficiency, reduce resource consumption, especially reducethe consumption of natural resources such as water, land and energy, reduce agriculturalcarbon emissions, and achieve scientific, standardized, quantified and efficientagriculture through industrial centralized planting.As a pioneer of high-efficiency agricultural modernization, the container plantfactory has the technical advantages of standardization, automation, closed type, andplanting. They are equipped with advanced green crop planting systems, and carry outresearch on the lighting, temperature and humidity environment and airfloworganization of plant factories to form a functional and economic closed micro-
environment management plant factory platform, which can realize a sustainableeconomy such as year-round planting, zero chemical agents, energy saving, andresource recovery. Its sea and land transportation are flexible and mobile, can preciselyarrange production, digital operation and fine management of all aspects of agriculturalproduction, can meet the supply needs of agricultural urbanization and community, fillthe gap of local vegetable, flower and fruit trade, reduce intermediate links, and alsocarry out the integration of home, office, commercial and planting laboratories toachieve zero distance contact between vegetables and users.
3.3 Zisun in the Field of Efficient Agriculture
Zisun has carried out active research with experts and professors of TongjiUniversity, a well-known domestic university, to provide intelligent fresh air systemand insulation materials and equipment, to improve the production efficiency andproduct quality of the plant factory and provide technical support for insect-free andpesticide-free vegetables and fruits and serve modern smart agriculture. Zisun isactively building a container plant factory with “Clean Air” and “energy efficient”products and technologies, providing technological support for low-carbon, green,modern and efficient agriculture, contributing to the “low carbonization” of agricultureand creating more social benefits.
(Fig Of Zisun Container Plant Factory)
4. Animal Husbandry
Animal husbandry listed as the two pillars of agricultural production alongsideplanting is one of the main components of agriculture. Animal husbandry is related tothe supply of meat, eggs and milk to the masses. The comprehensive capacity of animalhusbandry is the guarantee of national food security.
4.1 Related polices
The General Office of the State Council's "Opinions on Promoting the High-Quality Development of Animal Husbandry" (Guobanfa [2020] No. 31) pointed out:
? Accelerate the implementation of regional prevention and control of major
animal diseases such as African swine fever, implement the inter-provincialjoint meeting system, and coordinate the prevention and control of animaldiseases, supervision of livestock and poultry and livestock and poultryproducts, and market supply. Unified planning and implementation ofdesignated channel transportation of livestock and poultry. Support qualifiedareas and large-scale farms (households) to build epidemic-free areas andcommunities. Promote the purification of animal diseases, focus on breedinglivestock and poultry farms, give priority to the purification of verticallytransmitted animal diseases, and build a number of purification demonstrationfarms.
? Guide livestock and poultry slaughtering and processing enterprises totransfer to the main breeding areas, promote the local slaughter of livestockand poultry, and reduce the long-distance transportation of live livestock andpoultry. Encourage slaughtering and processing enterprises to buildrefrigerated processing facilities such as cooling warehouses and low-temperature segmentation workshops and configure cold chain transportationequipment. Promote logistics and distribution enterprises to improve the coldchain distribution system, expand the sales network, and promote thetransformation of live livestock and poultry transportation to meattransportation. Standardize the management of cross-regional transfer of live
livestock and poultry and improve the "point-to-point" transfer system.Advocate the safe and healthy consumption of livestock and poultry products,and gradually increase the proportion of chilled meat consumption.
? Strengthen the comprehensive management of veterinary antibiotics,implement the monitoring of animal-derived bacterial resistance, withdrawalof medicated feed additives, and actions to reduce the use of veterinaryantibiotics. Establish an evaluation system for the green development ofanimal husbandry and promote supporting technologies for greendevelopment.According to the "14th Five-Year Plan" National Animal Husbandry andVeterinary Industry Development Plan formulated and issued by the Ministry ofAgriculture and Rural Affairs, by 2025, major progress will be made in themodernization of the national animal husbandry, and dairy cattle, pigs and poultryfarming will take the lead in basically realizing modernization.
In terms of product guarantee goals, the self-sufficiency rate of pork ismaintained at about 95%, the self-sufficiency rate of beef and mutton is maintained atabout 85%, the self-sufficiency rate of milk is more than 70%, and poultry meat andeggs are basically self-sufficient.In terms of industrial safety goals, the ability to comprehensively prevent andcontrol animal diseases has been greatly improved, a breakthrough has been made inthe development of veterinary social services, and the supervision capacity of feed andveterinary drugs has been continuously enhanced.
In terms of green development goals, the comprehensive utilization rate oflivestock and poultry manure will reach more than 80%, forming a new green andcircular development method that combines planting and breeding and recycling ofagriculture and animal husbandry.
In terms of modernization construction goals, the self-sufficiency rate of the corespecies of livestock and poultry will reach 78%, the scale rate of livestock and poultrybreeding will reach more than 78%, and the production and operation of the entireindustrial chain of breeding, slaughtering, processing, and cold chain logistics will beintensified, standardized, and automated. , The level of intelligence has reached a newlevel.The "Animal Epidemic Prevention Law of the People's Republic of China" revisedin 2021 has significantly added the expression "purification and elimination" of animalepidemics, mentioning that "animal epidemic prevention should be based on prevention,and the policy of combining prevention with control, purification and elimination." And"the state promotes the purification of animal epidemics and encourages and supportsunits and individuals that raise animals to carry out purification of animal epidemics.
4.2 Industrial Trends
The use of land in our country's animal husbandry is limited by the availablenatural resources, so the density of animal husbandry in my country is high, especiallythe density of pig breeding is alarming. High-density farming is accompanied by thepressure of environmental protection and disease protection. With the developmentof society and economy, people's consumption of animal food has changed, therequirements for quality are getting higher and higher, and the demand for categories isconstantly diversified. Driven by a variety of policies, the large-scale and intensivetrend of dairy cattle, pigs, and poultry farming has become more and more obvious, atthe same time the accompanying disease control requirements have become more andmore important.
(The interior of pig house overseas)Taking the pig farming industry as an example, China is the world's largestproducer and consumer of pigs, and pork is the mainstream meat consumption varietyin China. African swine fever is an infectious disease caused by African swine fevervirus (ASFV) infecting domestic and wild boars which broke out in China for the firsttime on August 1, 2018. China's hog industry has encountered major epidemicprevention pressure. According to the data released by the National Bureau of Statistics,based on 2017 before the outbreak of African swine fever in China, China’s porkproduction fell by 10.85 million tons and 12.27 million tons in 2019 and 2020,respectively. The number of live pigs in 2019 and 2020 decreased by 144.42 millionand 161.57 million, respectively.
4.3 Zisun in Animal Husbandry
Since the large-scale outbreak of African swine fever in China, the pig breedingenterprises have raised the requirements for the prevention and control of the disease inpig houses. Zisun actively conducts technical communication with animal husbandryusers, and specially developed a new filter material, which is a high-efficiency, low-resistance, high-temperature and high-humidity filter material with a filtration effect ofover 94% for 0.3μm particles, for the special environment of high temperature and high
humidity in pig houses that require the fresh air of pig houses of outstanding breedingenterprises.
(Fig of Fresh Air System of Pig House)Zisun filter materials for animal husbandry has the international leading leveltechnical indicators. It solves the problems of insufficient efficiency and short life spanof chemical fiber filter materials used in the fresh air of pig houses，provides a reliableapplication solution for effectively reducing the spread of the virus, solves the keytechnical problems in the prevention and control of African swine fever, and providesequipment and material guarantees. According to user feedback, after the Zisun filtermaterials and equipment for animal husbandry were put into use, the air quality insidethe pig house was improved. For the more, the growth rate of live pigs was accelerated,and the survival rate of live pigs was improved.In 2021, Zisun continued to provide many outstanding animal husbandrycompanies with fresh air filter materials and equipment. Affected by the progress ofdownstream pig cycle expansion, some fresh air application projects for pig barnslowed down during the reporting period will strive to promote the application of clean
air core products in the field of animal husbandry, actively promote our products andservices through industry exhibitions and other means, provide materials andequipment for different customer needs, and strive to improve the company profitability.
5. Biomedicine, medical and health fields
5.1 Related Policies
In January 2020, the General Administration of Market Regulation (GAMR)issued the “Drug Registration Management Measures” to continuously regulate drugregistration practices and ensure the safety, efficacy and quality control of drugs.
In September 2021, the General Office of the State Council issued a notice on the“14th Five-Year Plan” for national medical security.
On January 17, 2022, President Xi Jinping pointed out in his speech on “SteadfastConfidence, Courageous Progress for a Better World in the Post-Epidemic Era” at theWorld Economic Forum video conference that “the changes of the times and theepidemic of the century have overlapped each other, and the world has entered a newperiod of turbulent change. How to overcome the Covid-19 and how to build a post-pandemic world, which are the major issues of common concern to the people of theworld, and an urgent and important question that we must answer.”
5.2 Industrial Trends
According to the National Bureau of Statistics, the total health expenditure inChina rose from 2,400 billion RMB to 6,600 billion RMB from 2011 to 2019, with acompound annual growth rate of 13.24%.
Based on the macro trends such as domestic population structure and economicdevelopment, and the environment of encouraging innovation and domestic substitutionand internationalization in the medical and health industry, China's biomedicine andmedical and health industries will continue to flourish.
Globally, the continued focus on health and disease treatment in various countriesis driving increased investment and financing in the industry. The growing demand ofdomestic and foreign biomedicine and healthcare industries directly drives the demandfor “clean air” materials and solutions for the industry.The world has suffered untold shocks and disasters since the epidemic of Covid-
19. The ability of all industries to combat the impact of the Covid-19, respond tounexpected health crises and awareness of epidemic prevention and control has beengreatly enhanced. The public health concept, consumption habits, psychological quality,education and culture have changed accordingly. Globally, the continued emphasis onhealth and disease treatment in various countries has driven continued investment inthe industry and continued increases in industry financing. As the epidemic of Covid-19 continues to recur, the demand for medicine and medical treatment will alwayscontinue globally. With the development of science and technology, there will be avariety of needs such as new drugs, vaccines, makeshift hospitals and mobile hospitals,which will directly promote the corresponding application scenarios on the importanceand technical requirements of “clean air”.
In summary, the growing demand in domestic and foreign biomedical andhealthcare industries is directly driving the demand for “clean air” materials andsolutions for the industry.
5.3 What Zisun Could Do with Biomedicine, Medical and Health Industry
For the bio-pharmaceutical, medical and health care industry, it can be subdividedinto pharmaceutical biology, chemical raw materials, pharmaceutical services,traditional Chinese medicine, medical devices, biological products, chemicalpreparations and other production, manufacturing, transportation, storage and otherenvironmental needs of different levels of "clean air" standard users.
For pharmaceutical companies, because their production process involves somehighly active, highly toxic, allergenic, teratogenic drugs or intermediates, the industryhas established OEB (occupational exposure band) level occupational exposure
classification, which in turn has put forward strict requirements for the biosafety of theproduction environment. The trend of production process confinement in the bio-pharmaceutical industry is obvious, and the cleanliness requirements of bio-pharmaceutical companies and the stringency of air management have also increased.For vaccine manufacturers, who need both vaccine quality and bio-safety ofproduction activities, different levels of protection for vaccine production workshopsimpose stringent requirements on “Clean Air” materials, equipment, and technicalsolutions.In the field of biomedical and medical health, “Clean Air” materials play animportant role in ensuring manufacturing and personnel safety. There are various“Clean Air” materials used for ASHRAE/HEPA/ULPA filtration of clean rooms in thisfield, with high reliability.In addition, U-Air provides biosafety equipment and Bag In Bag Out Filter (BIBO)equipment for biopharmaceuticals. With high purification efficiency and airtightness,BIBO equipment is widely used in various fields with high risk or high isolationrequirements, such as: chemical and biological (CB) protection, chemical, biologicaland radiological (CBR) protection, nuclear, biological and chemical (NBC) protection,hospital isolation rooms, pharmaceutical facilities, microelectronic environments, foodprocessing areas, biological research, genetic and biotechnology laboratories, industrialtreatment and discharge systems, chemical processing equipment, animal diseaseresearch laboratories, radioisotope research laboratories, radioactive isotopes, and otherequipment. It is safe and efficient, simple and reliable in use, effectively removingcontaminated particles and gases from hazardous environments and avoiding directcontact with harmful contaminants inside the equipment during filter changes andtesting.In addition, U-Air provides bio-safety equipment and BIBO equipment forbiopharmaceuticals. The BIBO equipment is safe, simple and reliable, removingcontaminated particles and gases from hazardous environments and preventing
personnel from coming into direct contact with harmful contaminants inside theequipment during filter changes and testing. U-Air has already provided services inLiaoning Chengda Biological and Jinhe Youben P3 animal room projects. During thereporting period,U-Air won the bids for the annual clean-room replacement project ofHuadong Pharmaceutical, the GMP plant purification project of Boshengji cellproduction base, the Biological project of Haining Sibe , the project of Yunnan BaiyaoShanghai International Center and the project of Shenyang Sanjiu Pharmaceutical.
（Figs of U-air UltraBIBO Filter Unit）
6. Semiconductor, Panel, Precision Instrument Processing and OtherAdvanced Manufacturing Fields
6.1 Related Policies
The Central Network Security and Informatization Commission issued the "14thFive-Year Plan for National Informatization" to make deployment arrangements for thedevelopment of informatization in my country during the "14th Five-Year Plan" period.Technical breakthrough. Promote innovations in computing chips, memory chips, etc.,accelerate the research and development of key materials such as integrated circuitdesign tools, key equipment, and high-purity targets, and promote breakthroughs in
characteristic processes such as insulated gate bipolar transistors (IGBTs) andmicroelectromechanical systems (MEMS).
6.2 Industrial Trends
In its World Fab Forecast, SEMI highlighted that global front-end fab equipmentspending is expected to grow 10% year-over-year in 2022 to a record high of more than$98 billion. Fab equipment spending rose 17% in 2020 and 39% in 2021, markinganother three-year increase from 2016 to 2018.SEMI released the Year-End Total Semiconductor Equipment Forecast (- OEMPerspective), which states that total global sales of semiconductor manufacturingequipment by original equipment manufacturers are expected to reach a new high of$103 billion in 2021, compared with 710 in 2020. A record increase of 44.7% to $100million. The total global semiconductor manufacturing equipment market is expectedto expand to $114 billion in 2022.
SIA data show that global semiconductor sales in 2021 will reach a record high ofUS$555.9 billion, a year-on-year increase of 26.2%. Among them, the sales of theChinese market were US$192.5 billion, still the largest semiconductor market in theworld, with a year-on-year increase of 27.1%. SIA also expects global semiconductorsales to grow 8.8% this year as chip manufacturers continue to expand capacity to meetdemand.
Frost & Sullivan expects a compound annual growth rate of 9% in global cleanroom investment from 2020 to 2024, while domestic clean room investment, thesemiconductor industry's clean room will have a compound annual growth rate of 20%.According to the data provided by Frost & Sullivan, the domestic clean room market ismainly dominated by semiconductor and electronics industry, which occupies morethan half of the market.
According to SIA and BCG forecasts, the growth rate of foundry capacity inmainland China during the period 2021-2030 will rank first in the world.
A clean environment is an important guarantee for the smooth production ofsemiconductors, panels, precision instrument processing and other industries at homeand abroad. The continuous investment in the industry will promote the demand fornew additions and replacements of "clean air" materials and equipment.
6.3 What Zisun Could Do Within Advanced Manufacturing Fields
Zisun in advanced manufacturing fields such as conductors, panels, and precisioninstrument processing
In the semiconductor manufacturing process, the critical dimensions of printedpatterns are getting smaller and smaller, and the control of airborne particulate andairborne molecular contamination is a key factor affecting its yield. A wafer has to gothrough multiple processes, while any slight contamination in the entire process chainwill have a serious impact on its yield, performance, and reliability.
In clean rooms represented by advanced manufacturing fields such assemiconductors, panels, and precision instrument processing, "Clean Air" materialswhich play an important role in the reduction of air pollutants and energy saving willbe processed into various filters or filter units according to requirements. Zisuncontinues to dig deep into the properties of materials and promote technologicalprogress.
(Figs of U-Air Cylinder Matrix Filter Set and Ultrafan FFU)
Zisun has a wealth of “Clean Air” materials and equipment solutions, accordingto the specific needs of different types and levels of clean rooms, we can providesuitable materials and solutions to effectively deal with particle pollutants and gasmolecules in the clean room; effectively ensure the safe operation of personnel,equipment and materials in the clean room, avoid the escape of pollutants during theproduction process of the clean room, and ensure the safety of the surroundingenvironment.
In 2021, U-air has provided “clean air” products and solutions for more than 40outstanding companies, including Huizhou Xinli, Hefei Jinghe, Dongguan Huawei,Jiasheng Semiconductor, Jingxin Semiconductor, Shanghai BYD and others. U-air alsocontinues to provide “Clean Air” services for BOE, Jiatai Optoelectronics, XiamenTianma, Shanghai Hefei and other users, providing a variety of products and solutions.U-air will continue to dig deeper into the material performance and continuouslyimprove the product quality to meet the increasing application needs of advancedmanufacturing fields such as semiconductor, panel and precision instrument processing.
(3) High-efficiency Energy-saving Industry
1. The Field of Green Appliances
Household appliances are the second largest source of residential energyconsumption, accounting for more than 20% of total residential energy consumption(after heating), and up to 30% of residents' carbon emissions come from householdappliances.
Through the upgrading of the product structure of green household appliances,especially the promotion and popularization of low-energy consumption products in themarket, the carbon emission of residents' consumption side can be effectively reduced.
The structure of the household appliance industry under the requirement of carbonneutrality is facing adjustment, and enterprises with high carbon emissions may beeliminated.
1.1 Related polices
In June 2019, the “Green and Efficient Refrigeration Action Plan” jointly issuedby the National Development and Reform Commission and other seven ministries andcommissions put forward specific requirements for the municipal High efficiency andenergy saving level of refrigeration products such as air conditioners in my country.
In the policy documents such as the “Implementation Plan for Promoting theUpdate and Upgrading of Key Consumer Goods and Smooth Resource Recycling(2019-2020)” issued by the Ministry of Ecology and Environment and otherdepartments, it is proposed to support the sales of green and smart home appliances andpromote the upgrading of home appliances.
The “Technology Roadmap for China's Household Refrigerator Industry (2019Edition)” clearly proposes to achieve a comprehensive balance between energy savingand basic functions of refrigerators. By 2025, the High Efficiency and Energy Savinglevel of refrigerators will be increased by 25% compared with 2019, and by 25% in2030 compared with 2025.
1.2 Industrial Trends
Transmission is the major contributor (> 50%) to the total cooling load for typicaldomestic refrigerators. Understandably, insulation in refrigerator walls plays animportant role in reducing it. Compared with traditional refrigerator insulation layer,vacuum insulation board board has lower thermal conductivity, longer insulation timeand smaller thickness, with higher energy saving grade, and can enhance the effectiveutilization rate of refrigerator volume.
With the continuous improvement of High efficiency and energy saving gradestandards and environmental protection requirements for relevant household appliances
around the world, the traditional thermal insulation materials, especially forapplications such as high-power and large-volume refrigerators, can no longer meet therequirements of high High efficiency and energy saving grade household appliances.
（Figs of Vacuum Insulation Panel in Premium Refrigerator）
At present, the VIP panels have been widely used in many premium refrigeratorbrands around the world and have become an important means of achieving Highefficiency and energy saving upgrades for household appliances.
1.3 Zisun and Green Appliances
Refrigerators are an important part of appliances, and since their introduction morethan a hundred years ago, their related technologies and requirements have beenconstantly improving. As the core component of a refrigerator, its insulation layer isstill mainly made of polyurethane. The excellent thermal insulation performance of VIPboard has been gradually extended to water heater, rice cooker, kettle and otherappliances that need thermal insulation and heat preservation.
The high-efficiency inorganic vacuum insulation board produced by Zisun is thecore insulation material of the VIP board. The core indicators such as thermal
resistance coefficient, physical properties and stability of the core material directlyaffect the vacuum degree, water absorption and thermal conductivity of the VIP board,and determine the comprehensive performance and service life of the VIP board.Zisun VIP core material owns the advantages of low thermal conductivity, thinthickness, small volume, light weight, fluorine-free manufacture process and easyrecycling, etc., which could efficiently reduce the energy consumption of householdappliances and increase the use of space and has been widely used in a variety of greenhome appliances, mainly high-end refrigerators. Zisun is grasping the marketopportunities, constantly improving product performance and increasing productcapacity to meet the growing market demand.
2. Cold Chain
Cold chain refers to the special supply of certain products in the process ofprocessing, storage, transportation, distribution and retailing, and use, in which eachlink is always in a specific low-temperature environment necessary for the product toreduce loss, prevent pollution and deterioration, and ensure product safety. chain system.
The cold chain has been deeply integrated into the lives of the public and has awide range of applications, including primary agricultural products, processed foods,and special commodities (such as medicines and vaccines). One of the core componentsof cold chain logistics is temperature control and insulation.
2.1 Related Policy
In December 2021, the State Council’s “14th Five-Year Plan for the Developmentof Cold Chain Logistics” pointed out that cold chain logistics is the use of temperaturecontrol, preservation and other technical processes and facilities and equipment such ascold storage, refrigerated trucks, and refrigerated boxes to ensure that cold chainproducts are in the initial stage.
Professional logistics in which the whole process of processing, storage,transportation, distribution processing, sales, and distribution is always under thespecified temperature environment.Promoting the high-quality development of cold chain logistics is an importantmeans to reduce post-production losses of agricultural products and waste in foodcirculation, expand high-quality market supply, and better meet the people's growingneeds for a better life; it is an important means to support the large-scaleindustrialization of agriculture, promote agricultural transformation and it is animportant foundation for farmers to increase their income and help rural revitalization.It is an important way to meet the individual, quality and differentiatedconsumption needs of urban and rural residents, promote consumption upgrades andcultivate new growth points, and deeply implement the strategy of expanding domesticdemand and promote the formation of a strong domestic market.To improve the quality and safety system of fresh agricultural products “fromfarmland to table, from branch to tip of tongue”, improve the quality control capabilityof the whole process of pharmaceutical product logistics, support the implementationof food safety strategy and an important guarantee for building a healthy China.
The “14th Five-Year” Cold Chain Logistics Development Plan requires:
? to improve the development level of refrigerated vehicles, such as accelerating
the development and manufacture of light and micro new energy refrigeratedvehicles and refrigerated containers
? to promote new refrigerated vehicles, railway refrigerated vehicles, andrefrigerated containers; unitization of transportation vehicles, such as guidingcold chain transportation enterprises to use standardized pallets, turnoverboxes (baskets), cages and other transportation units, as well as unitized coldchain vehicles such as cold storage boxes and incubators, and strengthen thecirculation and sharing system of standardized cold chain vehicles
construction
? to improve the energy-saving level of cold chain logistics facilities, such asimproving the thermal insulation and flame retardant properties of thermalinsulation materials in cold storage, refrigerated vehicles, etc.
? to increase the research and development and application of green cold chain
equipment, such as encouraging the use of green, safe, energy-saving,environmentally friendly refrigerated vehicles and supporting equipmentfacility
? to emphasize R&D and application of cold storage turnover boxes, thermal
insulation packaging, thermal insulation covers, etc. that meet thecharacteristics of cold chain logistics. Encourage the use of green, low-carbon,high-efficiency refrigerants and thermal insulation consumablesIn May 2018, “Technical Specifications for Verification Performance Verificationof Temperature Control Facilities and Equipment for Cold Chain Logistics ofPharmaceutical Products” stipulates the verification of temperature-controlledwarehouses, temperature-controlled vehicles, refrigerators, incubators and temperaturemonitoring systems involved in cold chain logistics of pharmaceutical productsContents, requirements and operation points of performance confirmation.In March 2021, implement the “National Food Safety Standard HygieneSpecification for Food Cold Chain Logistics” (GB 31605-2020) mandatory nationalstandards to improve and standardize the quality and management level of cold chainlogistics services. The healthy and sustainable development of the cold chain logisticsmarket plays an important role in promoting and promoting.
2.2 Industrial Trends
With the improvement of people’s living standards in our country, our demand forcold chain is increasing day by day, and the market scale is constantly expanding.According to the “2021 China Cold Chain Logistics Industry Research Report”, from
2015 to 2020, the market scale of cold chain logistics will increase from 179.2 billionyuan to 360.4 billion yuan with CAGR 15%.At present, the demand for food cold chain drives the growth of demand for coldchain logistics, and various policies support the expansion of cold chain applicationscenarios and customer groups. Taking the promotion of food and beverages to the coldchain industry as an example, the demand for cold chain transportation of coldbeverages, quick-frozen food, dairy products and agricultural products in my countryis increasing. As the penetration rate of the Internet continues to rise, the demand forfresh food e-commerce in online consumption is also increasingly prominent. Inaddition, pharmaceutical cold chain, chemical cold chain, and electronic cold chain willcontinue to drive the demand for cold chain logistics.
The history of the cold chain industry in developed countries has been more than150 years, and the development of cold chain logistics is in a leading position in theworld, with a cold chain market size of $98.47 billion in North America, $78.94 billionin Europe, and $17.65 billion in Japan in 2020. According to the relevant reports,
(1) the cold storage capacity per urban resident in China was only 0.13 cubicmeters in 2018, lower than the global average of 0.15 cubic meters and much lowerthan 0.49 cubic meters in the United States.
(2) from 2015 to 2018, the cold chain circulation rates of Chinese fruits andvegetables, meat and aquatic products were increased from 22%, 34% and 41% to 25%,39% and 63%, respectively. The spoilage rate was controlled at 15%, 8%, and 10% orless, However, there is still a gap with the average cold chain circulation rate of 80%-100% in developed countries and the corrosion rate of less than 5%.
In the post-epidemic era, as the epidemic prevention and control becomes moredifficult and the epidemic of the covid-19 may become a new normal, “vaccine +therapeutic drugs” will become the strategy for the prevention and treatment of thecovid-19. Vaccinations are accelerating domestically and globally. According to iFinDdata, as of the end of October 2021, the total number of covid-19 vaccine doses in the
world was 7.087 billion doses, 2.274 billion doses in China, 424 million doses in theUnited States, 112 million doses in Germany, 99 million doses in France, and 104million doses in the United Kingdom. 1.063 billion doses in India and 276 million dosesin Brazil. The demand for biomedical cold chain driven by the covid-19 vaccination isvigorously driven.
In cold chain logistics, the insulation performance of various containers willdirectly affect the delivery distance of cold chain logistics, the quality stability of goodsand other key indicators, which directly affects the product circulation rate and loss rate.The current cold chain insulation materials are mainly based on traditional polystyreneand polyurethane, with the increasing demand for biological products, pharmaceuticalproducts, various types of vaccines, the transport distance is getting longer and longer,the cold chain logistics in each link of the thermal insulation requirements are alsoincreasing.At present, the cold chain insulation materials are mainly based on traditionalpolystyrene and polyurethane, which have disadvantages such as large volume, shortthermal insulation time, and easy generation of pollutants in the production process.
It can be seen that the thermal conductivity of VIP board is only one tenth of thetraditional materials, which can meet the requirements of long time, extremetemperature and long-lasting stable heat insulation, providing users with longer-lastingstable heat insulation performance and larger storage and transportation space.
In addition, the VIP board has better thickness advantage than traditional organicinsulation materials, which can improve the space utilization rate of logistics containersand storage space.
Combining the various advantages of VIP board, it is expected to gradually replacetraditional thermal insulation materials in the future.
2.3 Zisun in Cold Chain Transportation
The key material of the VIP board is the VIP core material. The thermal resistancecoefficient, physical properties, stability and other core indicators of the VIP corematerial determine the thermal conductivity and service life of the VIP board. The VIPcore material developed and produced by Zisun, relying on the excellent performanceof microfiber glass, has a unique pore structure, minimizes heat transfer caused byconduction and convection, and has excellent performance. The uniformity of surfacedensity and thermal conductivity have reached the international advanced level.
3. Green Building Field
3.1 Related Policy
The Outline of the 14th Five-Year Plan and Vision 2035 proposes to promote newurban construction, green building materials, assembled buildings and steel structurehouses, and build low-carbon cities, emphasizing the acceleration of greentransformation of development. The Ministry of Housing and Urban-RuralDevelopment defines green building as “high-quality buildings that save resources,protect the environment, reduce pollution, provide people with healthy, suitable andefficient use space during the whole life cycle, and maximize the harmoniouscoexistence between man and nature”.
In September 2021, the “Opinions of the Central Committee of the CommunistParty of China and the State Council on Completely, Accurately and ComprehensivelyImplementing the New Development Concept and Doing a Good Job in Peaking andCarbon Neutralization”(Zhongfa [2021] No. 36) pointed out that vigorously developenergy-saving and low-carbon buildings, Continue to improve energy conservationstandards for new buildings, and accelerate the large-scale development of ultra-lowenergy, near-zero energy, and low-carbon buildings. Vigorously promote the energy-saving renovation of existing buildings and municipal infrastructure in cities and townsand improve the energy-saving and low-carbon level of buildings. Gradually carry outbuilding energy consumption quota management, implement building High efficiency
and energy saving evaluation labels, and carry out low-carbon developmentperformance evaluation in the building sector.
The new version of “Green Building Evaluation Standards” (GB/T51356-2019)establishes a new model of green building development that is “people-oriented,emphasizing performance, and improving quality”, and proposes the index system of“safety and durability, health and comfort, life convenience, resource conservation andenvironmental livability”. Green building should take into account the climatecharacteristics, geographic environment, natural resources and other factors, and adoptappropriate exterior insulation system, exterior window insulation system, ventilationsystem, natural lighting, solar energy and building integration, green building materialsand intelligent control and other technologies.The Ministry of Housing and Construction, Development and ReformCommission and other departments issued the “Green Building Creation Action Plan”,the proportion of green building area in new buildings in urban areas reached 70% by2022, star-rated green buildings continued to increase, the level of High efficiency andenergy saving of existing buildings continued to improve, residential healthperformance continued to improve, the proportion of assembled construction methodssteadily increased, the application of green building materials further expanded, greenresidential user supervision fully promoted, the people actively participate in thecreation of green building activities, the formation of a social atmosphere that advocatesgreen living.
3.2 Industrial Trends
According to the China Building High efficiency and energy saving Association'sChina Building Energy Consumption Research Report (2020), the building operationphase accounts for 21.7% of the total national energy consumption, and the buildingoperation phase carbon emissions account for 21.9% of the national carbon emissions.
According to the UCLA paper “Phase Change Composite Materials for EnergyEfficient Building Envelopes”, the energy consumed by heating and cooling needs in
all types of commercial and residential buildings accounts for more than 30% of thetotal energy consumed to operate the building.
The insulation performance of building walls in building operation has asignificant impact on building energy consumption and indoor comfort. The insulationin the building reduces the dissipation of indoor heat to the outdoors, reduces the energyconsumption of building heating and cooling, and improves the comfort of the building.The performance of building insulation materials is affected by the externalenvironment, for example, condensation of water vapor in cold and warm air in theinsulation layer can cause deterioration of materials, shorten service life, breed moldand other adverse effects.Common building insulation materials such as organic materials, inorganicmaterials and composite materials, such as bead rock board, polystyrene particle board,rigid foam polyurethane, rock fiber, mineral fiber, glass fiber, aerogel, etc., and fiberglass has a good market prospect because of its excellent sound absorption andinsulation performance, light and soft, affordable and easy to obtain, biosafe.Currently, high-end construction cotton is monopolized by excellent foreigncompanies, such as Owens Corning and other companies.
Owens Corning is a developer, manufacturer and marketer of insulation materials,roofing systems and fiberglass composites, including building materials such as fiberglass insulation, Formica? extruded foam panels, Langstone? synthetic stone exteriormaterials and Silentex? systems and other composites for solutions in the automotiveindustry. (Taken from the official website of Owens Corning)
3.3 Zisun and Green Buildings
In order to break the foreign monopoly and focus on high quality of life, Zisun isactively laying out dust-free residential air conditioning system and developing andproducing energy-saving materials for buildings. At present, Zisun’ team of comfortresidential dust-free air conditioning system is actively working to promote productR&D in order to creates a comfortable residential environment that is energy-saving,quiet and dust-free for many customers.
In terms of building energy saving, our VIP core material owns the characteristicsof good fire resistance, low thermal conductivity, long service life, low energyconsumption in the production process, low water absorption, light weight, and easyconstruction, which can meet the requirements of green buildings for high-efficiencythermal insulation and energy-saving of walls
Considering the heat and thermal insulation needs around green buildings, relyingon Zisun R&D strength and industry brand advantages in microfiber glass, SichuanZaisheng has been set to develop and produce more energy-saving, environmentallyfriendly and efficient high-end microfiber glass aiming to provide excellent buildinginsulation solutions for green buildings.
Zisun has developed a series of green building insulation products with micro glassfiber as the core material. These materials have excellent physical properties, goodthermal conductivity, lightweight flame retardant, and low water absorption.
It can be widely used in building insulation fields such as household appliances,public buildings, agriculture and animal husbandry, and intelligent workshops. It canalso be used with prefabricated buildings, BIPV (Building Integrated Photovoltaic,building-integrated photovoltaics), passive houses, NET-ZERO buildings (Net ZeroEnergy Building, near-zero energy buildings) and other applications. Zisun will activelyexpand and promote the application of green building insulation products andcontribute to the green building field.
4. Aviation and Aerospace
In order to ensure the temperature and comfort of the cabin in flight, the aircraft isinstalled with an insulation layer between the skin and inner wall which aims to reflectheat radiation or reduce heat conduction, realize the functions of heat insulation, noisereduction and noise reduction in the cabin, improve cabin comfort and reduce aircraftenergy and fuel consumption.
4.1 Related Policy
The CAAC in “The 14th Five-Year Plan for Civil Aviation Development” requiresthe improvement of the industry green development policy management system and theimprovement of the civil aviation green development capability support system. Itemphasizes the application of enhanced new technologies and new materials in aircraftand airports. In detail, the plan, for the green development of the civil aviation industry,proposes specific guidelines which is the carbon dioxide emission per ton-kilometer oftransport aviation will be reduced from 0.928 kg in 2020 to 0.886 kg in 2035, and theenergy consumption per passenger at the airport will be reduced from 0.948 kg ofstandard coal to 0.853 kg of standard coal.
4.2 Industrial Trends
According to the “Commercial Aircraft Market Forecast Annual Report (2020-2039)”, China’s aviation market will receive 8,725 passenger aircraft with more than50 seats in the next 20 years, with an average annual growth rate of the fleet of 4.1%and an average annual growth rate of passenger turnover of 4.3%; China’s fleet willreach 9,641 by 2039. Global air passenger turnover (RPKs) will increase at an averageannual rate of 3.73%, with 40,664 new aircraft expected to be delivered. By 2039, theglobal passenger aircraft fleet is expected to reach 44,400 aircraft, which is the currentfleet (23,856 aircraft) 1.9 times. Routine maintenance and repair affect the safety of theaircraft, and aircraft must be inspected according to strict laws and regulations. Theinterval between inspections is determined by flight hours, flight cycles (landing andtakeoff times), and calendar hours. During the inspection and maintenance, theaircraft’s acoustic and thermal insulation blankets are replaced and maintainedaccording to specific standards and actual conditions.
With the development of technology and the improvement of quality of life, peoplehave put forward higher requirements for the comfort of transportation, and cabin noiseis one of the indicators that passengers focus on. At present, although the airworthinessclause does not impose mandatory restrictions on cabin noise, in order for a model togain stronger competitiveness in the market, it is necessary to strictly control the noise,
vibration and other comfort indicators in the aircraft cabin, and make sure that it is theoptimal design is carried out under the premise of considering various factors.
Aircraft noise is mainly divided into two categories: cabin noise and external noise.Reducing the noise in the cabin is mainly to improve the comfort of passengers, whilereducing the external noise is to meet the airworthiness requirements of the regulatoryauthorities for the aircraft.Generally speaking, the main noise of the aircraft comes from the aerodynamicnoise of the high-speed rotating engine blades and the surface of the aircraft. Reducingengine noise has become an important task in aircraft design. A better aircraft shapedesign helps reduce the noise generated when high-speed airflow rubs against thesurface of the aircraft. The thermal and sound insulation layer laid in the aircraftfuselage also contributes to the reduction of cabin noise.With the increasing global requirements for aircraft energy saving and emissionreduction, as well as the maintenance of newly delivered aircraft and existing aircraft，the need of aircraft insulation mat will be also increased from the aspects of quantityand performance.
(Fig of Insulation of Aircraft, from Virginaustralia Airline)
4.3 Zisun in Aviation and Aerospace
Zisun high-efficiency and energy-saving product, sound and heat insulationblanket, have obtained the test qualification certificate of Commercial AircraftCorporation of China Limited. This product is made of glass fiber through patentedprocesses such as modification and compounding, which has excellent performance oflight weight, flame retardant, waterproof, sound insulation, heat insulation, etc. It canbe used in aircraft cabin, ship cabin, subway and other applications with highcomprehensive requirements for sound insulation and heat insulation. We have obtainedthe aerospace quality management system AS 9100 certification and has built anacoustic laboratory with ASTM standard.In addition, the high-silica fibers developed and produced by Zisun have been usedfor a long time by international well-known aerospace companies, and have reached in-depth commercial cooperation, which is of great significance to develop high-endapplications in aerospace. Zisun will continue to make efforts to provide more userswith high-quality localized products and services.
5. Emerging Application Areas
Achieving peak carbon neutrality and striving to build a clean, low-carbon, safeand efficient energy system is a major decision and deployment made by the PartyCentral Committee and the State Council.
Pumped storage and new energy storage are important technologies and basicequipment supporting new power systems. They have great significance to promotinggreen energy transition, responding to extreme events, ensuring energy security,promoting high-quality energy development, and supporting the realization of climatechange goals.
5.1 Related Policy
In July 2021, the “Guiding Opinions of the National Development and ReformCommission and the National Energy Administration on Accelerating the Developmentof New Energy Storage” requires that by 2025, the transformation of new energystorage from the initial stage of commercialization to large-scale development will berealized. The innovation capability of new energy storage technologies has beensignificantly improved, the independent and controllable level of core technology andequipment has been greatly improved, and great progress has been made in terms ofhigh safety, low cost, high reliability, and long life. The business model is basicallymature, with an installed capacity of over 30 million kilowatts.
New energy storage plays a significant role in promoting the process of carbonneutralization in the energy sector. By 2030, full market development of new energystorage can be achieved. The core technology and equipment of new energy storage isindependently controllable, and its technological innovation and industrial level are atthe forefront of the world. The standard system, market mechanism, and business modelare mature and sound, and are deeply integrated with all aspects of the power system.The installed capacity basically meets the corresponding needs of the new powersystem. New energy storage has become one of the keys supports for the carbonneutralization of the energy sector. The “Opinions” provide detailed planning guidancefor specific plans, including coordinating the development of special energy storageplans, vigorously promoting the construction of power-side energy storage projects,actively promoting the rational layout of grid-side energy storage, and activelysupporting the diversified development of user-side energy storage.
5.2 Industrial Trends
The power system is a stable and balanced system. The energy storage powerstation is to adjust and buffer between various power sources and power demand, whichis equivalent to the role of a reservoir, which can effectively improve the system's abilityto regulate voltage and frequency. Energy storage is critical in electricity consumption.
With the continuous advancement of the parity process of new energy sources suchas wind power and photovoltaics, the installed capacity of new energy sources hascontinued to increase. However, due to the intermittent and unstable characteristics ofnew energy power generation, the accompanying energy consumption problem hasbecome increasingly prominent. energy storage power stations can be used to cut peaksand fill valleys and improve power supply reliability. As "new energy + energy storage"has become a development trend, the energy storage power station industry has usheredin rapid developmentAt present, for urban energy storage systems, lead-acid batteries, lithium-ionbatteries, etc. are the main ways for electrochemical energy storage systems. VRLAbatteries have the advantages of excellent capacity stability, reliable low temperatureoperation, high cycle charging capacity, low accident risk and low environmentalpollution risk, and maintenance-free. It has important applications and wide markets inglobal urban energy storage systems
（Valve-Regulated Lead-Acid Batteries In Energy Storage Stations,
Fig from OFFGRIDENERGY）
5.3 What Zisun Strives
One of the core materials of VRLA batteries is the battery separator made of microglass fiber. The battery separator is placed in the two pole plates of the battery to preventthe positive and negative plates from contacting each other and cause a short circuit,and adsorb the sulfuric acid electrolyte, which is the core material to maintain the long-term, stable and high-efficiency function of the battery. Important indicators such asmicroporosity, chemical stability, and mechanical strength of battery separatorsdetermine the deep cycle life, charge acceptance and safety performance of VRLAbatteries.Zisun produces battery separators, using the self-developed micro glass fiber asthe core raw material, which has excellent affinity with water, acid corrosion resistance,temperature resistance, oxidation resistance, and has a large specific surface area andhigh porosity. The liquid absorption speed is fast, and it has good mechanical strengthand is easy to process. Due to the excellent performance of the Zisun microfiber glass,the battery separator products have extremely low impurity content, which ensures thelow self-discharge rate of the VRLA battery. We digs deep into the performance ofmaterials, grasps the market demand, and continues to promote the continuousimprovement of the performance and production capacity of our battery separatorproducts.
IV. The Business of Zisun During the Reporting Period
Under the impact of the epidemic of the century, the evolution of the century-oldsituation has accelerated, and the instability and uncertainty of the external environmenthave increased significantly. Zisun takes high-quality development as the starting point,focuses on the needs of users for high-quality life, tempers our core competitiveness,and strives hard to give full play to our resilience, cultivate new products, expand newproduction capacity, and quickly respond to changes in the external environment andmarket demand.
By integrating the advantageous resources of the industry, making full use of theaccumulation of long-period technology practice for many years, and deeply exploringthe advantages of materials, Zisun independently researches and develops a wide rangeof high-performance products with full coverage, and carries out innovation andapplication exploration around the beforehand, processing, and afterwards phrase ofclean air. We are committed to providing professional materials and products in thefields of “clean air” and “High efficiency and energy saving” by implementing a strongindustrial interconnection strategy and exploring R&D and applications. With a strongresearch system, a large-scale production base, and sufficient capital resources, Zisunhas built a leading company in the clean air industry, providing “clean air” and “Highefficiency and energy saving” applications and solutions for industrial and residential,medical, electronics, agriculture and animal husbandry, indoor public space, military,aerospace, and other fields.
(1) Indoors Applications
TROX TECHNIK Gmbh. was founded in Germany in 1951 and now has 33subsidiaries in 29 countries, 19 production sites and representative offices in over 70countries. TROX China offers a complete range of products and systems for centralizedand stand-alone ventilation and air conditioning technology, including diffuser, air-water system ends, air adjusting valves, fire and smoke dampers, tunnel industrialvalves, mufflers, filters, air conditioning boxes as well as stand-alone ventilationsystems and laboratory system solutions.
In China, TROX has provided variable air volume air conditioning systems (VAVsystem) for the top three tall buildings in China (Shenzhen Ping An Financial Center,China Resources Building, Shanghai Center Building), as well as for Beijing DaxingAirport, Shanghai Pudong Airport, Hong Kong-Zhuhai-Macao Bridge Tunnel, theWater Cube, National Museum of China, Suzhou Museum, Shanghai Disneyland,China Central Television, One Shenzhen Bay, Zhujiang City and other famousbuildings in China. TROX China has a wide range of air conditioning products,
including all-air systems, air-water air conditioning systems, stand-alone ventilationsystems and laboratory ventilation systems and multi-functional accessories for eachsystem, which can provide a wide range of choices for different indoor environmentsand user needs.
Zisun and TROX will work together to develop a new generation of products,determined to serve the low-carbon energy-saving society and high-quality urban andrural life, to provide users with solutions that can run quietly throughout the year, ensurehigh indoor comfort, and protect indoor air quality, to ensure that users are in constanthumidity, constant temperature, constant oxygen, constant cleanliness, constant quiet,constant intelligence indoor environment throughout the year.Based on years of precipitation in the field of “clean air”, relying on the Zisun“Clean Air” materials and technology, the comfort and dust-free air conditioningsystem has been launched. This system has many advantages such as low energyconsumption, quiet operation and dust-free, which can satisfy the public’s yearning fora better life and ensure the “high-quality life”.
The “dust-free “comfort residential air conditioning system refers to the use ofZisun clean air materials and technologies to efficiently remove airborne particulatepollutants and gas pollutants and ensure that there is no dust accumulation in the airconditioning pipeline, and there is no need for pipeline ash removal and othermaintenance like the traditional central air conditioning system.
Compared with conventional fan-coil unit or the central air conditioning systemof multi variable units, Zisun dust-free comfort air conditioning system for residentialhas a variety of advantages.
| Traditional home central airconditioning system | Zisun Comfort Air ConditionSystem | |||
| IAQ | Air quality cannot be guaranteed,additional fresh air system or airpurifier is required | A variety of Zaisheng Technology "cleanair" materials and technologies toefficiently remove particulate matter(such as PM2.5) and airborne pollutants(VOCs, etc.). | ||
| AirDistribution | The air outlet area of the airconditioner is small, the wind speedis high, and the temperaturedifference is large.The room temperature is veryuneven and the air speed isunevenly distributed. | The air supply temperature is uniform,the air supply temperature difference issmall, and the air supply speed is low.The room temperature and air speedare evenly distributed. | ||
| AcousticEnvironment | There are fans at the end of theroom, and the noise isunacceptable for environmentswith high comfort requirements,such as bedrooms. | It is suitable for rooms with highcomfort requirements. There are nofans and moving parts at the end of theair conditioner, and the operation isvery quiet. | ||
| Hygiene Level | The room is dehumidified by thecold coil, and the condensed wateris collected in the condensed waterpan, which is easy to breedbacteria, and it is difficult tomaintain the furniture and interiordecoration. Fresh air volume cannotbe guaranteed. | The terminal runs in dry conditionswithout generating condensed water;the fresh air is accurately distributed toeach room after filtering,dehumidification, etc., to create ahealthy and comfortable indoorenvironment. | ||
| Air Flow | There is lack of unified planning forsupply and return air,and no orderlyair pressure gradient establishedacross the rooms. | There is organized ventilation, air flowsfrom the comfort zone to the auxiliaryfunction zone, and controls the scent ofodor and humid air. | ||
(Fig of Zisun Residential Comfort & Dust-Free Air Conditioners)
Zisun residential comfort & dust-free air conditioners provide targeted solutionsfor the needs of air quality, thermal comfort and noise levels in indoor environments.
1. Solution of Indoor Air Quality
Hong Kong of China is the first area to propose legislation on indoor air quality(IAQ). According to the information provided by the Hong Kong EnvironmentalProtection Department. Humans need to breathe every second and clean air is veryimportant for our health. We spend most of our time indoors in our homes, schools,offices and shopping malls. A polluted indoor environment can cause headaches, itchyeyes, breathing difficulties, skin irritation, vomiting and fatigue. Children, the elderlyand people with respiratory or heart conditions are more vulnerable to indoor air
pollutants. Improving indoor air quality can improve the health, productivity andpsychological well-being of indoor populations.
Indoor air pollutants originate from the external environment and indoor activities.As shown in the figure below, the composition of indoor air pollutants in rooms withdifferent external environments and different functions is different. If the airconditioning system does not have the function of “clean air”, polluted outside air willbe continuously introduced into the room, and many pollutants in the room cannot bedischarged, thus deteriorating the indoor air quality.
（Picture from International WELL Building Institute）
Zisun clean air materials are empowered to efficiently purify the indoor air, removeparticulate pollutants, gas pollutants, and ensure individual fresh air volume. Accordingto specific design requirements, constant air volume variable air volume terminals areused to control different rooms and fresh air volume accurately and automatically in thearea.
2. Solution of Thermal Comfort
Thermal comfort is a state of mind and an expression of people’s ideologicalsatisfaction with heat and cold. Dr. P.O. Fanger proposed an evaluation indexcharacterizing the human thermal response, and this index represents the average valueof the hot and cold sensations of most people in the same environment. The factorsinfluencing thermal comfort include thermal radiation, heat and cold, humidity, blowingsensation, clothing, and metabolism, of which the first four indicators are directlyrelated to the air conditioning system.Based on the thermal comfort standard EN ISO 7730, the indoor comfort level isevaluated by the airflow dissatisfaction DR, which is related to the wind speed,temperature, and vortex intensity in the area where personnel stay. The comfort level isdivided into three grades A, B and C, corresponding to DR values of 10%, 20% and30%. When the grade is B, it indicates that more than 80% of the personnel are satisfiedwith the indoor environment. TROX has four different air conditioning technologies,based on various technical principles such as Kanda effect, thermal plume effect,natural convection and radiation cooling, to meet users’ thermal comfort needs, analyzeairflow distribution characteristics, optimize indoor airflow organization by optimizingair delivery, increase indoor radiant heat transfer surface, ensure uniform indoor airspeed and temperature distribution, and control the range of vertical temperaturegradient fluctuation and cold air sensation.
（Picture from Simulationhub）
3. Solution of Indoor Noise
According to the “Burden of Disease due to Noise Pollution Report” released bythe World Health Organization, noise is second only to air pollution in terms of harmand has become an invisible killer affecting human public health. Studies have shownthat prolonged exposure to a noisy environment may lead to delayed reactions,increased annoyance, and harm to the human cardiovascular system, endocrine system,and nervous system. Therefore, a good acoustic environment is vital, which not onlyenhances people’s attention, but also reduces mental stress and improves sleep.
No fans or other mechanical equipment at the end of the room to ensure no senseof cold air, no noise and temperature balance in the room, and silent operation all yearround. The operation of ordinary air conditioning system generates airflow noise,radiation noise and over-flow noise, which will interfere with the hearing of indoorpeople and affect the comfort of life.
(Picture from TROX)
In accordance with ISO 3741, Trox has built the world’s most advanced acousticlaboratory. The lab is an irregular structure with an overall suspended partition design,which accurately measures airflow noise, radiated noise and insertion loss of HVACequipment by the reverberation method, and combines the measured sound power withthe evaluation standard ARI 885 to provide NC noise values for the indoor occupancyarea.
The diffuser, valves and other products of Zisun residential comfort & dust-freeair conditioning products conform to the aerodynamic principle to avoid airflow noise;products such as mufflers and flow-overs are made of environmentally friendlymaterials and have excellent noise reduction functions; products are designed with nomoving parts , to achieve a good quite effect.
Zisun residential comfort & dust-free air conditioning can achieve low air speed,low temperature difference, low noise and mild air supply, ensuring no cold air feeling,no noise and balanced temperature in the room, and a variety of product appearance tomeet the needs of various interior design styles, which can provide users with a state of“wind and sunshine”.
1.Variable air volume system
The residential comfort dust-free air conditioning system has a unique variable airvolume adjustment system, which can be adjusted intelligently according to user needsthrough the change of air supply volume to achieve room cooling and heatingadjustment; there is no need to install fan parts indoors again, combined with reasonableair outlet arrangement to ensure orderly indoor airflow organization and low operationnoise; to meet the requirements of different air supply methods, and can achieveindependent temperature and humidity control in each room.
The VAV system ensures that the direction and flow rate of airflow in the room arecarefully calculated to avoid the sense of blowing wind, so that the house can ensuremicro-positive pressure relative to the outdoors and avoid the outside polluted air orhumid air from directly penetrating into the room, and also realize the flow of indoorair from the comfort area to the auxiliary function area, and control the odorous air andhumid air in the room can be discharged in an organized manner and not scattered.
TROX provides residential RSD diffuser with special blade structure, through theairflow simulation and experiment, comprehensive air supply, air supply angle andinstallation height and other factors, to achieve the best air supply, to avoid cold airsense blowing sense, High level of user comfort. The series has exquisite appearance,various styles, easy to decorate with, to meet the personalized aesthetic needs of users.
2. HEPA Purification
Zisun residential comfort and dust-free air conditioning system has beencustomized with Zisun “clean air” materials, technology, equipment, to ensure that theindoor air quality into the excellent, to eliminate particles, aerosols, germs and otherpollutants, to achieve HEPA (99.97%@0.3um) above the purification effect.The common pipes of traditional central air-conditioning systems accumulate dustand produce a breeding ground for harmful microorganisms such as bacteria, mold, etc.,resulting in secondary pollution of indoor air; Zisun residential dust-free andcomfortable air-conditioning system pipes are protected by HEPA level to keep dust-free and clean. There is secondary pollution.
3. Low Operating Energy Consumption
Zisun residential comfort and dust-free air conditioning system replaces thetraditional HVAC system's cooling and heating function, floor heating and fresh airsystem and other systems.
During the construction stage, the system was upgraded to reduce the floor heightoccupation of the house and save the indoor floor height for users.
In the actual use stage, the system not only provides users with a high-comfortindoor space, but also consumes less energy than traditional multiple systems.
(Project scene of Zisun residential comfort and dust-free air conditioning system)
In a comprehensive manner, the Zisun dust-free and comfort air conditioningsystem can run all year round and is supported by an intelligent control system to ensurethat the user's indoor environment maintains the following environment all year round.
? Indoor temperature distribution uniformity: set temperature plus or minus 0.5K
? Indoor wind speed distribution uniformity: 0.2m/s to 0.3m/s
? Noise level <NV30 Fresh air supply >40cmh/person
? PM2.5 <25u/m3
Zisun residential dust-free and comfort air conditioning system can be organicallycombined with its thermal insulation glass product line to create a comfortable andpleasant living environment, excellent indoor air quality, and near-zero energyconsumption. Considering the needs of building layout, orientation, shape factor anduse function and the climatic conditions of the building, the thermal insulation glassproduct is used in the non-transparent maintenance structure of the building to optimizethe overall air tightness of the building and improve the thermal insulation performanceof the building, reduce indoor and outdoor energy transfer, reduce building cooling andheating energy consumption.
As the construction of ecological civilization in China continues to progress, theconcept, awareness and demand for green buildings are gradually increasing throughoutthe society. Zisun will follow the direction of the policy, pay close attention to
technology improvement, increase product capacity, and continuously meet the marketdemand for green building.
(2) Mobile Space Field Such as New Energy Vehicles
Zisun has set up Chongqing Langzhirui New Material Technology Co., Ltd. tofocus on the research and development of high-performance, long-life, anti-biochemical weapons-grade automotive air conditioning filter element, which caneffectively filter fine particles, gas pollutants, as well as bacteria, viruses, dust, aerosols,plant pollen, mold spores, dust mite excrement, etc. The filtration effect of particles≥0.3μm can reach 99.97% and above, allowing drivers and passengers to enjoy cleanand healthy air in the car. It can also prevent dust from accumulating inside the airconditioning system and prolong its service life.The high-efficiency PTFE membrane products produced by Baoman NewMaterials, a subsidiary of Zisun, have been adopted by well-known internationalcompanies and applied to the air-conditioning filter elements of automobile cabins,providing stable, efficient and reliable “clean air” guarantee for many users.We will persistently explore the application prospects of various “clean air”materials and technologies in the field of new energy vehicles, and strive to provide“clean air” cabin environment protection for new energy vehicle users worldwide.
(3) Animal Husbandry
Zisun has developed a special filter material with high efficiency, low resistance,high temperature and high humidity resistance for 0.3μm particles with a filtrationeffect of more than 94%, which is the leading level in the world. Our product index isat the international level, which provides reliable application solutions to effectivelyreduce the spread of virus and solve the key technical problems of preventing andcontrolling African swine fever.
(Filter for Pig House)According to users’ feedback, Zisun fresh air filter material and equipment forlivestock industry have been put into use, which has improved the air quality inside thepig house, accelerated the growth rate of pigs and improved the survival rate of pigs.
In 2021, Zisun will continue to actively explore and provide “clean air” solutionsand quality services to high-end domestic pig suppliers. In the first half of 2021, U-airwas awarded the title of Grade 5A supplier of Shepherd Plains, and became the supplierof Xinda Animal Husbandry, and cooperated with Guangxi Nongken Group and YurunGroup.Affected by the downstream pig cycle expansion progress, the new air applicationproject of sub-pig barn slowed down during the reporting period. Zisun will continueto make efforts to promote the application of clean air core products in the field ofanimal husbandry, actively promote our products and services through various wayssuch as industry exhibitions, provide materials and equipment for different customerneeds, and strive to improve our profitability.
(4) Advanced Manufacturing Fields (Semiconductors, Panels, PrecisionInstrument Processing, Biomedicine, And Medical Health etc.)
For high-end manufacturing fields such as semiconductor, panel, precisioninstrument processing, biomedical, medical and health care, etc., different links in their
production activities have different requirements for "clean air". The typical applicationrequirements for "clean air" are clean rooms.
(Fig of Typical Clean Room Structure)
A cleanroom is a controlled environment where pollutants like dust, airbornemicrobes, and aerosol particles are filtered out to provide the cleanest area possible. Acleanroom can be classified into different levels of contamination depending on theamount of particles allowed in the space, per cubic meter. Cleanrooms also controlvariables like temperature, air flow, and humidity. Most cleanrooms are used formanufacturing products such as electronics, pharmaceutical products, and medicalequipment.Cleanrooms work to remove pollutants, particles, and contaminants from outsideambient air. Outside air is first circulated to a filter system. The filters (either HEPA orULPA) then clean and decontaminate this outside air according to their specifications.The filtered air is then forced into the cleanroom. Additionally, contaminated air withinthe cleanroom is forced outside the room by registers, or it is recirculated back into thefilters, and the process restarts.
There are a wide variety of reasons that a company may need a cleanroom. for themanufacture of something is easily affected by contaminants or particles in the air.Some common industries that regularly use cleanrooms, such as: high-end
manufacturing, Research facilities, pharmaceutical production, medical laboratories,electronic part production, aerospace industry nanotechnology production, optics andlens manufacturing, military applications.
Zisun has successfully provided “clean air” products and solutions for outstandingenterprises in the industry such as BOE, CSOT, SMIC, Xiamen Tianma, Hefei Jinghe,and ISV. Zisun will continue to dig deep into material properties and continuouslyimprove product quality to meet the increasing application needs of advancedmanufacturing fields such as semiconductors, panels, and precision instrumentprocessing.
V. Analysis of Core Competitiveness in the Reporting Period
Zisun insists on “team building + innovation” to lead the development of theenterprise, consolidate the moat of the enterprise, cast the brand of “clean air” and refinethe core competitiveness. Our core competitiveness is subdivided into five majoradvantages: technical advantages, intelligent manufacturing advantages, overall R&Dadvantages, brand advantages and management advantages.
(1) Technology Advantage
Zisun has two research institutes, Chongqing Fiber Research Institute andChongqing Paper Research and Design Institute, relying on the “National EnterpriseTechnology Center”, making full use of years of long-period technical practiceaccumulation, constantly increasing investment in research and development, focusing
on intellectual property protection and quality system construction, and consolidatingthe enterprise technology.
As of the date of this report, Zisun has obtained 151 patents, including 68 inventionpatents, 75 utility model patents and 8 design patents; in recent years, we hascontinuously increased its investment in R&D, and invested 97.7947 million RMB inR&D in 2021, an increase of 31.14% compared with 2021; we has strengthened theconstruction of professional R&D and design team, and actively introducedprofessional technical talents from home and abroad to reserve technical strength forthe fields of “Clean Air” and “High Efficiency and Energy Saving”, overcome technicalbarriers, and develop materials and products that can be applied to differentenvironments, conditions and requirements. Zisun strengthens the construction ofprofessional R & D design team, actively introduces professional technical talents fromhome and abroad, reserves technical strength in the field of “Clean Air” and “HighEfficiency and Energy Saving”, tackles technical barriers, develops materials andproducts that can be applied to different environments, different conditions, anddifferent requirements, and promotes the enterprise in the field of “Clean Air” and“High Efficiency Energy Saving”. We will promote the development of technology andopen up new application markets.
(2) Intelligent Manufacturing Advantage
Zisun continues to improve the level of intelligent and smart manufacturing in theproduction workshop by introducing intelligent production equipment, transformingthe automated production system and creating a paperless workshop, using uniqueprocesses for green transformation and improving the efficiency of production kilnmelting. The construction of intelligent factory not only effectively reduces theproduction loss, reduces the labor cost elements on the development of enterprises, andstabilizes product quality, but also significantly improves the production efficiency ofenterprises, which lays a good foundation for the Company's Continuous Steady andHealthy Development.
(3) Collaborative R&D Advantage
Zisun continues to take advantage of the overall thinking of the clean air industry,industrial systems research and development to serve the needs of clean air afterwards,during and beforehand.
Zisun has strong advantages in research and development of industrial systems.We are a high-tech enterprise with a variety of core filtration materials and technologies,including high-performance glass fiber filter media, low-resistance melt-blown filtermedia, high-efficiency PTFE, micro-electrostatic filtration materials, nano-filtrationmaterials (under research and development) and other filtration materials andequipment. Relying on two research institutes and overseas R&D platforms,professional R&D and design team, independent R&D system and abundant R&Dachievements, we strive to grasp new demands and trends in the industry. Zisuncontinues to integrate a variety of materials and technologies to provide customizedproducts for different application scenarios.
(4) Brand Advantage
Taking “Enjoy clean air with Zisun Tech” as the brand strategy, Zisun has theadvantage of leading the industry brand status, priority benefit industry demandexplosion. We take “Clean Air” as its mission and serves global high-quality customers.Its products cover the core material end, intelligent manufacturing end and user serviceend of clean air, forming a unique business model with leading product scale, quality,and technology in the industry.
(5) Management Advantages
Taking “Enjoy Clean Air, Use Zisun Tech “as the brand strategy, has the advantageof leading the industry brand position, priority benefit industry demand explosion.Zisun takes “Clean Air” as mission, and serves global quality customers, with productscovering the core material end, intelligent manufacturing end and user service end of
clean air, forming a unique business model with leading product scale, quality andtechnology in the industry.The initial grant portion of the 2019 Stock Option Incentive Plan formulatedentered the second exercise period and the reserved grant portion entered the secondexercise period. Zisun repurchased 1,124,353 shares from the secondary market in 2020has been used for the employee stock ownership plan, covering the core technical staffof the company.
The implementation of Ziusn Employee Option Incentive Plan and EmployeeStock Ownership Plan effectively enhances the happiness and sense of belonging ofemployees, the cohesion and centripetal force of Zisun, fully mobilizes the enthusiasmof the middle and senior management and key employees, closely combines theinterests of middle and senior management and core employees with those of thecompany and promotes the sustainable development of the company.
VI. Main Business Operations During the Reporting Period
The global economic and political environment is changing, and the epidemic ofCovid-19 continues to infest. In 2021, we will insist on focusing on our main business,taking “high quality development” as the starting point, responding efficiently to themarket demand for “Clean Air” And “High Efficiency And Energy Saving”, continuingto refine our three major capabilities of “continuous cost reduction, continuous R&Dinvestment and ecological development”, promote the construction of new productioncapacity, continue to invest in research and development, and insist on new productdevelopment.
(1) Analysis of The Main Financial Data of The Company
During the reporting period, Zisun realized an operating income of RMB1,619,710,800. The main business income was RMB 1,590,257,500, a decrease ofRMB 274,307,500 compared with the same period of last year, or 14.71%, of which the
clean air segment operating income was RMB 896,106,500, a 29.55% decreasecompared with the same period last year, and the high-efficiency energy-savingsegment operating income was RMB 694,151,100, compared with last year, an increaseof 17.15% over the same period. Zisun realized a net profit attributable to the parentcompany of RMB 249,471,400, and net profit attributable to the parent company ofRMB 225,618,200 after deducting non-recurring gains and losses.
1. Description of the Decrease in Operating Income
In 2020, the sudden outbreak of Covid-19 in China, Zisun quickly responded tothe demand of the government and users and promptly adjusted the company’s strategy,relying on the technical strength and production capacity of its subsidiary ShenzhenZhongfang melt-blown materials, and utilized its clean production workshop to producea batch of melt-blown materials for individual protective masks and multi-seriespersonal protective masks. The operating revenue of our masks and melt-blownmaterials in 2020 was RMB312,578,000, accounting for 16.76% of the main businessin the period.In 2021, as the global ecvid-19 continues, the supply chain and productioncapacity of other domestic companies have been restored and melt-blown materials andpersonal protective materials are no longer in short supply. Our masks and melt-blownmaterial operating revenue was $33,534,100, a significant decrease from the sameperiod last year, accounting for only 2.10% of the main business revenue for the period.The decline in our operating income in this reporting period is mainly due to thedecrease in demand for masks and melt-blown materials. In addition, due to the multipleinfluences of industrial policy and consumption cycle of pig breeding industry, thedemand for fresh air for pig barns from domestic livestock breeding industry customershas slowed down since the second quarter of 2021, and thus the demand for filtermaterials and equipment for fresh air for pig houses has decreased. For the whole yearof 2021, we achieved operating income of RMB100.6123 million from the sales of filter
materials and equipment for fresh air in pig houses, a decrease of RMB 136.9302million.Combined with our business strategy, product structure, market demand and othercomprehensive situation, after deducting the masks and melt-blown materials foroperating income analysis, operating income of Zisun in 2020 is RMB 1,551.968million and in 2021 operating income is RMB 1,586.1767million. As shown in the chartbelow, reviewing our operation from 2015 to 2021, our main business remains forcontinuous growth.
(Fig of the revenue without masks and melt-blown materials)
2. 2021 Revenue Analysis
In 2021, the sales revenue of “Clean Air” products was RMB 896.1065 million,accounting for 56.35% of the main business revenue, a decrease of 11.87% comparedwith the same period last year. The main reason is that the revenue of melt-blownmaterials and masks drop significantly in 2021. For the more, Clean Air Equipment hasbeen affected by factors such as the fluctuation of the construction cycle of downstream
users whose sales revenue is RMB 397.068 million with a decease of 10.41% from2020.
In 2021, “high-efficiency and energy-saving” products achieved sales revenue ofRMB 694.1511 million, accounting for 43.65% of the main business revenue, anincrease of 11.87% over the same period last year.Benefiting from the demand for “High-Efficiency and Energy-Saving” productsin many application fields around the world, our VIP materials and AGM separatorscontinue to have strong demand. Among them, Chongqing Paper Research Instituteefficiently completed the relocation of the AGM separator production line and activelyput it into production. In 2021, the AGM separator shipments reached 8,137.11 tons, anincrease of 18.06% compared with it in 2020.
3.The Superimposed Impact of The Global Shipping Situation on Revenueand Profits
The Ministry of Transport pointed out that, due to the impact of multiple factors,the demand for international container transport has been released centrally since June
2020, and the ship capacity of major liner companies has been basically fully committedto the market except for the necessary repair and maintenance. With the spread of theoverseas Covid-19, ports in the United States, Europe and other places have continuedto experience severe congestion since the fourth quarter of 2020, resulting in chaos andreduced efficiency of the international logistics supply chain, extensive delays in shipschedules, and seriously affecting operational efficiency. The Suez Canal blockingincident and the outbreak of the Covid-19 in South Asia such as India since March 2021have exacerbated the contradiction between supply and demand in the logistics supplychain. The tight shipping capacity and rising freight rates have become a global issue.During the reporting period, the freight-to-value ratio of the export productsincreased due to the rise in shipping costs. Zisun actively took various ways to copewith the situation, including multiple coordination of container supply, price adjustmentand delivery method adjustment, etc., and made every effort to protect the export supplychain and reduce the shipping cost. However, in the context of the sharp rise in globalsea freight, the export orders have been delayed and the shipping cost was still higherthan the same period last year.The main export products are “Clean Air” materials and “High Efficiency andEnergy Saving” materials. During the reporting period, our overseas sales revenueamounted to RMB 535.0392 million, a decrease of 3.11 % compared with the sameperiod last year.
(2) The Proposed Fundraising and Investment Projects Are ProgressingSmoothly, The Product Production Capacity Continues to ExpandOur board of directors reviewed and approved the “Proposal on the Company’sPublic Issuance of A-Share Convertible Corporate Bonds in 2021” in February 2021and has raised funds to invest in the construction project with an annual output of50,000 tons of high-performance ultra-fine fiberglass media., 8,000 tons of CLEAN
AIR filter material construction project and clean air filter material upgrade project.During the reporting period, the construction of the proposed capital raisingproject advanced as scheduled, production equipment was in place as scheduled, andthe overall construction of the proposed capital raising project went smoothly. After thecompletion of the construction of the proposed project, it will help to meet the growingcustomer demand and consolidate the security guarantee of production capacity.
(3) Continuous Expansion of Products and Application Fields
Zisun gives full play to its technical, R&D and production advantages in the fieldsof “clean air” and “high efficiency and energy saving” materials and continues to layout a variety of new products and new applications.During the reporting period, t Zisun actively expanded the scope of application ofits products around “clean air” and “high efficiency and energy saving” applicationsthrough various means such as xx and “introduction” and strived to take the lead in thepolicy wave of “high-quality production” and “high-quality life”.
Zisun digs deeply into the material characteristics of micro fiberglass fiber anddevelops and produces fiber glass filter media for oil and gas separation and hydraulicfiltration, expanding the application of the products in petrochemical, industrialequipment and other scenes.
Zisun has explored the performance of PTFE membrane and expanded theapplication of high efficiency PTFE membrane from high-end manufacturingapplications to household appliance products. During the reporting period, our PTFEmembrane has opened application scenarios in high-end sweeping robots, vacuumcleaners and other household appliances, and the moisture-proof applications of 5Gcommunication base station.
The cooperation between Zisun and MP (Microporous LLC), a world-renownedbattery compartment company with deep channel resources and brand awareness in the
European and American markets, is progressing smoothly. Zisun started cooperationwith MP in May 2019, and the Zisun AGM separator products have achieved excellenttest results and gained recognition from users after two years of severe battery cycletesting. During the reporting period, Zisun has supplied AGM separator products to MPin batches.
During the reporting period, Zisun Platform welcomed new members andestablished Chongqing Langzhirui New Material Technology Co., Ltd., invested inSichuan Zisun Building Energy Saving Technology Co., Ltd., and cooperated withInsulation Technology Investment Co., Ltd. to invest in Sichuan Youpusi NewMaterials Co., Ltd., cultivating products such as “clean air” and “high efficiency andenergy saving”. Sichuan Zisun focuses on the application of micro fiberglass productsin building energy conservation and thermal insulation, serving the green buildingmarket; Sichuan Youpusi deeply explores the synergistic application of micro fiberglassmedia and aerogel, which has great prospects in the fields of thermal insulation, energysaving and insulation.
(4) Adhere To the Driving Force of High-Quality Development and High-Quality Life
Achieving carbon peak and carbon neutral is an extensive and profound economicand social systemic change, facing unprecedented difficulties and challenges. Underthe background of the carbon policy, Zisun continues to dig deeper into the productperformance and improve “internal strength” from management, technology,production and other aspects to maintain a continuous leadership in the industry.
Zisun has maintained “high quality development” for many years and obtainedcertain technical and economic achievements. We are deeply aware that the results ofour high-quality development will continue to be efficiently transformed into servicesfor the people’s “high quality of life”, which is the driving force for our continuousadvancement and help for our continuous development.
The “high-quality development” of the people is inseparable from “clothing, food,
housing and transportation”. Zisun “clean air” and “high-efficiency energy-saving”materials and technologies continue to serve various application fields and continue toopen new application fields. For example, “clothing” involves industrial production of“Clean Air”, “food” involves “Clean Air” and “High Efficiency and Energy Saving” inagriculture and animal husbandry, and “housing” has a broader scope, ranging fromindoor air quality to the pursuit of low energy consumption for building insulation andthermal insulation, and “transportation” is the various application of aircraft, newenergy vehicles and other transportation tools.Zisun will continue to put its various strengths to the service of “high quality oflife” with firm determination and strive to continue to gain more and betterachievements in the field of “clean air” and “high-efficiency energy-saving”.
Zisun adheres to the organizational structure of the platform transformation of “life,symbiosis, and promotion”, focusing on the future, actively exploring and utilizing thedigital technology of the times, continuously optimizing and iterating on the existingproduction methods and product quality, improving production efficiency, whilesharing information, resources and technology with the industry, release huge growthspace for the industry, and give full play to the advantages of symbiosis. The layout ofthe company is centered on the core line of leading enterprise development with scienceand technology and laying out the Clean Air industry.
(5) Forge Ahead with Cooperation and Share Platforms
5.1 Zisun Purification
During the reporting period, Zisun Purification introduced a new team ofcomfortable air conditioning, equity participated in Dongxi Home Furnishing. In orderto further extend the industrial chain, Zisun launched fresh air purification, cooling andheating, dehumidification and humidification, VAV intelligent monitoring, andintelligent control in one whole house comfort system for the high-end residentialmarket. Combined with the rich “Clean Air” materials, We strive to create energy-
saving, dust-free, quiet, oxygen-rich, beautiful, intelligent management of high-qualitywhole-house comfort systems for users, and strive to seize the trend of consumerupgrading, the rapid development of the Internet of Things, promote the developmentof clean air, to the user side of the development, to provide services, to find the rightcorporate positioning and competitive advantage, and build a system integrationecology in the field of residential comfort.During the reporting period, the dust-free air conditioning team of ZisunPurification was aggressive and had completed numbers of projects on the ground,which were well received by users.
5.2 U-Air
During this reporting period, U-Air Environment actively explored customers inthe semiconductor field and provided services to leading companies in thesemiconductor industry, including the Huizhou Xinli project, the Hefei Jinghe project,the Xi’an Yiswell project and the Hangzhou Silan project.U-Air Environment also works for Beijing Kehua photoresist production linetransformation project, Riyuexin semiconductor project, Shantou ultrasound project,North Huachuang project, Sunking Asia Pacific semiconductor project, Yuexin PhaseII project, Nansha Lianjingxin Energy Phase I Projects, Hefei Tongfu Project, XuzhouZhineng Semiconductor Project, Guangdong Pilot Project, Nantong Shennan CircuitProject, Jiangyin Changdian Project, Deqing Advanced Chip Project, ShenyangXinyuan Project, Shanxi Zhongke Jingdian Project, Star Zhongda SemiconductorProject, INFI Semiconductor, Dongguan Zhongtu Semiconductor, Shandong YunengProject, Dongguan Huawei Project, Jiasheng Semiconductor, Zhongkexin TimesProject, Jingxin Semiconductor Project, Shanghai BYD Project, Qixing HuachuangProject, Sanmenxia Zhongkexin Times Project. U-Air has provided “clean air” productsand solutions for more than 60 well-known domestic semiconductor projectsthroughout 2021.
At the same time, U-Air Environment actively cooperates with the laboratoryprojects of major universities, such as the Integrated Circuit Center of TsinghuaUniversity, Hefei University of Science and Technology Laboratory, ZhejiangUniversity Ningbo Campus Laboratory, etc.Electronic panel industry: During this reporting period, with years of deepcultivation in the air cleaning industry, U-Air Environment continued to provideproducts and services for BOE’s major projects. Up to now, U-Air Environment hasserved BOE for more than ten major projects one after another. U-Air has alsoperformed well in the TEGA G8.5 ultra-thin glass substrate deep processing project,the bid for Xi’an Yiswei Silicon Industrial Base project, the Shucheng Jingzhuo project,and the bid for Xiamen Tianma’s 6th generation flexible AMOLED production lineproject, contributing a variety of CLEAN AIR solutions for customers. U-Air has wonthe bids for Huaxing Optoelectronics Huizhou and Guangzhou (T9) projects andShanghai Hehui Phase II project.
Agriculture and animal husbandry field: U-Air continued to provide pig barn freshair system solutions and products for Shepherd Group. In the first half of 2021, U-Airwas awarded the title of Grade 5A supplier of Shepherd Group. During this reportingperiod, U-Air became the supplier of Xinda Herding and cooperated with GuangxiNongken Group and Yurun Group.
Biomedical field: U-Air provided biosafety equipment and BIBO equipment forLiaoning Chengda Bio, which specializes in the R&D, production and marketing ofhuman and veterinary vaccines, and Jinhe Youben P3 large animal room project. 2021,U-Air also won the bidding for the annual clean room replacement project of HuadongPharmaceutical, the GMP plant purification project of Boshengji cell production base,the Haining Sibai Bio project, the Yunnan Baiyao Shanghai International Center Projectand Shenyang Sanjiu Pharmaceutical Project.
Chemical filtration field: U-Air has provided clean air to many data centers toprotect customers’ data security. U-Air provided chemical filtration equipment for the
data room project of Xinhua Life Insurance Hefei Backup Center.U-Air has provided clean air solutions for many pulp and paper companies,including Nine Dragons Paper, Jinhai Pulp & Paper, Pingsheng Paper, DongguanTaichang Paper, Jingui Pulp & Paper, and Asia Pacific Semper, etc. Golden Light Groupis a large international paper manufacturing group, and the chemical filter provided byU-Air provides clean air for its automated control room to ensure stable production inthe pulp and paper industry.
U-Air provides chemical filters for AMOLED factories such as NanjingZhongdian Panda, Jingwang Electronics, China Construction Electronics, XiamenMeiri Fengchuang, Shanghai Hehui Optoelectronics Co., Ltd., Huaxing T4Optoelectronics Technology Co., Ltd., etc., for the production process of customers,and provide CLEAN AIR to our customers’ production processes, which greatlyimproves product yields. The chemical filters provided by U-Air also perform well inthe semiconductor field, actively adding to the development of the nationalsemiconductor industry and breaking the technological bottleneck of the industry. U-Air has already provided chemical filters for Hefei Jinghe Semiconductor Phase IIproject.U-Air’s chemical filtration equipment serves customers in the petrochemicalindustry, including Sinopec, Fujian Petrochemical, Xianglu Petrochemical, QingdaoSteel, etc. In the manufacturing industry of safety glass, typical customers of U-Air’schemical filtration equipment include Wuhan Saint-Gobain. In the data center field, U-Air’s chemical filtration equipment has served the Bank of China, China ClearingHouse, etc.
Emerging application areas: U-Air keeps continues to expand customers in newapplication areas. During the reporting period, U-Air actively cooperated with JATechnology, a leading enterprise in the photovoltaic industry, to provide guarantee fora clean production environment for solar cells.
5.3 Shenzhen Zhongfang
During the reporting period, Zisun successfully integrated the majority minorityshareholding of Shenzhen Zhongfang, and shareholding ratio increased from 73.8672%at the beginning of the period to 98.32%. This equity integration is conducive to furtherfocus management and effectively improve production efficiency. Shenzhen Zhongfangwill continue to focus on the development of the demand for CLEAN AIR, vigorouslypromote the development of melt-blown materials, chemical filtration materials andproducts in the high-end market, and strive to build the industry’s leading chemicalfiltration materials production base.
5.4 Chongqing Paper Research Institute
Chongqing Paper Research Institute has efficiently completed the relocation of theproduction line of the “AGM separator construction project”, grasped the marketdemand, and continued to supply AGM separator products for mainstream batterymanufacturers such as Exide, Narada Power, Chaowei, and Tianneng. After 2 years ofbattery deep cycle testing, Chongqing Paper Research Institute’s AGM separatorproducts have been approved by Microporous, LLC, a U.S. company, and have beensupplied in batches during the reporting period.
Chongqing Baoman New Material Co., Ltd., a subsidiary of Chongqing PaperResearch Institute, has developed many new high performance products, such as U-class ultra-high efficiency and low resistance PTFE filter media, high efficiency andwashable PTFE filter media for vacuum cleaners, low resistance and washable PTFEfilter media for household air purifiers, precision liquid filtration filter media, high-enddust removal PTFE filter media, PTFE filter media for atmospheric testing machines,etc.
5.5 Xuanhan Zhengyuan
Xuanhan Zhengyuan focuses on the R&D, production and manufacturing of high-efficiency and energy-saving products such as micro glass fiber and vacuum insulationpanel core material and has the largest production capacity of micro glass fiber in Asia.
In 2021, Xuanhan Zhengyuan promotes the "annual output of 50,000 tons of high-performance ultra-fine micro glass fiber". The project has been implemented onschedule, which fully reflects our management advantages.Xuanhan Zhengyuan insists on taking technology as the driving force of enterprisedevelopment, taking technological innovation as the starting point, and taking the long-term goal of increasing cost and efficiency. In 2021, Xuanhan Zhengyuan will achievean operating income of RMB 549.0189 million, an increase of 19.03% over the sameperiod last year, and a net profit of RMB 142.3078 million, an increase of 32.53% overthe same period last year.
Xuanhan Zhengyuan actively promotes the promotion and application of productsto downstream applications and gives full play to the platform advantages of the parentcompany. During the reporting period, Xuanhan Zhengyuan established twosubsidiaries and invested in one company to continue to explore the application ofmicro glass fiber in new fields.
Based on the geographical advantage of Xuanhan county having the largest marineintegrated natural gas field in China, Xuanhan Zhengyuan completed the engineeringconstruction of the Microfiber International Technology Center so that XuanhanZhengyuan strongly promotes the Xuanhan government's plan to build China's first full-industry-chain microfiber new material industrial park.
(6)) Keep Upright and Innovate, And Move Forward
During the reporting period, Zisun received various awards and certifications,including the First Prize of Chongqing Science and Technology Progress andChongqing May Day Labor Certificate. Our high-efficiency air filtration was awardedthe single champion product of the Ministry of Industry and Information Technology,and our sound insulation and heat insulation blanket obtained the China CommercialAircraft Test Qualification Certificate. The company successfully re-evaluated as asecond-level enterprise of safety standardization and was also rated as “EnvironmentalIntegrity Enterprise”, “Chongqing Health Enterprise” and “Yubei District Peaceful
Enterprise Model Unit”. The company won the “Yubei District Mayor Quality Award”and actively participated in the selection of “China Quality Award”.The company continues to improve its process and manufacturing level internallyand actively participates in industry communication and exchange. During the reportingperiod, the company participated in several industry exhibitions.
(7) Healthy Internal Competition and Self-driven Win-Win
The company introduced the Competitiveness mechanism, through “setting goals- organization empowerment - evaluation and competitiveness - sharing results”,creating a gold medal culture and other methods to comprehensively enhanceemployees’ sense of participation, gain and achievement, and rationally allocate andintegrate human resources to give full play to employee job potential. The companyemphasizes self-driven and win-win, self-management, self-improvement, and refinedassessment management such as “daily elite class schedule” to reduce ineffective labor.
(8) Standardized Company Operation and High-Quality OperationManagement
The board of directors, board of supervisors and senior management of thecompany are all diligent and conscientious in fulfilling their responsibilities, whichstrictly abide by all laws and regulations. During the reporting period, the company held8 board meetings, 8 supervisory meetings and 3 shareholders’ meetings.
The company strives to actively establish open, fair, transparent and multi-dimensional investor relations through various channels, enhance investors’ recognitionof the company, effectively improve the value and market influence, establish andmaintain a good image of the listed company, and promote the long-term healthydevelopment in the capital market.
During the reporting period, the company answered 294 questions from SSE E-interactive investors; participated in 1 online collective reception day for investors inChongqing in 2021; accepted more than 10 on-site investigations by investors;
participated in dozens of investor exchange calls; kept the investor hotline open andactively answered investor calls.The management team continues to pay attention to the latest national policytrends, maintain a good operational structure, strengthen internal control supervisionand audit, and provide more feasible internal control management demand services andresults delivery for the healthy and benign operation, so as to make the internal controlsystem more perfect, reasonable and orderly, guarantee the orderly operation activities,and promote the continuous improvement of corporate governance.
II Analysis of Main Business
(1) Analysis Table of Changes in Relevant Items In The Income StatementAnd Cash Flow Statement
Unit: Yuan Currency: CNY
| Items | Amount in the current period | Amount of the last year | Change (%) |
| Operating revenue | 1,619,710,842.66 | 1,884,228,703.44 | -14.04 |
| Operating costs | 1,118,367,804.01 | 1,167,101,588.03 | -4.18 |
Selling and distribution expenses
| Selling and distribution expenses | 43,617,359.04 | 48,811,269.44 | -10.64 |
General and administrative expenses
| General and administrative expenses | 107,248,428.48 | 107,164,520.12 | 0.08 |
| Financial expenses | 13,209,745.73 | 14,194,182.53 | -6.94 |
| Research and development expenditures | 89,510,799.50 | 72,901,869.46 | 22.78 |
Cash flow from operating activities
| Cash flow from operating activities | 148,772,678.97 | 291,270,329.26 | -48.92 |
Cash flows from investment activities
| Cash flows from investment activities | -214,729,467.05 | -162,706,081.47 | N/A |
Cash flows from financing activities
| Cash flows from financing activities | -46,326,348.26 | -19,432,987.82 | N/A |
Other income
| Other income | 39,611,932.99 | 19,668,353.70 | 101.40 |
Investment income
| Investment income | 8,917,050.80 | 7,576,882.93 | 17.69 |
Credit impairment loss
| Credit impairment loss | -8,850,016.29 | -14,686,997.60 | N/A |
Reasons for changes in operating income：the revenue of masks and meltb-lownmaterials decreased by 89.27% compared with it in 2020.Reasons for changes in operating costs：costs are reduced due to lower operating
incomeReasons for changes in selling expenses：employee compensation are reduced due tolower operating incomeReasons for changes in management expenses：basically the same as last year。Reasons for changes in financial expenses：mainly due to the decrease in interestexpenses during the reporting period.Reasons for changes in R&D expenses：mainly due to the increase in investment innew product research and development during the reporting period.Reasons for changes in net cash flow from operating activities：：mainly due to thesales of masks and melt-blown materials in 2020 received more money.Reasons for changes in net cash flow from investing activities：the main reason isthat the projects to be raised and invested during the reporting period weresuccessively invested and constructed.Reasons for changes in net cash flow from financing activities：the main reason isthat the bank borrowings obtained in the reporting period decreased compared with itin 2020, and the dividend distribution increased.Reasons for changes in other income：mainly due to the increase in governmentsubsidies received during the reporting period compared with the same period of lastyear.Reasons for changes in investment income：mainly due to the increase in thecompany's bank principal-guaranteed wealth management income during thereporting period.reasons for changes in credit impairment losses: mainly because the increase inaccounts receivable at the end of the reporting period compared with the beginning ofthe period decreased compared to the same period last year
(2) Revenue and Cost Analysis
The operating costs of 2021 decreased by 4.18% over the same period of 2020. Due to the decrease in revenue in 2021,the operating costdecreased accordingly YOY. The decrease of cost in2021 is smaller than the decrease of revenue (9.86%), mainly because the raw material cost ofcore products in the current period is at a historically high level
1. Main Business by Industry, Product, Region and Sales Model (Unit: RMB YUAN)Main Business by Industry
| By Industry | Operating Income | Operating Cost | Gross Margin (%) | Change Of Operating Income Over 2020（%） | Change Of Operating Costs Over 2020（%） | Change Of Gross Margin Over 2020（%） |
| Clean Air | 896,106,459.26 | 573,374,338.01 | 36.01 | -29.55 | -14.71 | -11.14 pp |
High Efficiency& Energy Saving
| High Efficiency& Energy Saving | 694,151,060.63 | 524,924,180.28 | 24.38 | 17.15 | 8.21 | 6.25 |
Main Business by Product,
| By Product | Operating Income | Operating Cost | Gross Margin (%) | Change Of Operating Income Over 2020（%） | Change Of Operating Costs Over 2020（%） | Change Of Gross Margin Over 2020（%） |
Clean Air
| Clean Air | 896,106,459.26 | 573,374,338.01 | 36.01 | -29.55 | -14.71 | -11.14 pp |
| In Which, The Equipment | 397,067,978.58 | 285,431,171.22 | 28.12 | -10.41 | -12.69 | +1.88 pp |
High Efficiency and Energy Saving
| High Efficiency and Energy Saving | 694,151,060.63 | 524,924,180.28 | 24.38 | 17.15 | 8.21 | +6.35 pp |
Main business by region
| By Region | Operating Income | Operating Cost | Gross Margin (%) | Change Of Operating Income Over 2020（%） | Change Of Operating Costs Over 2020 | Change Of Gross Margin Over 2020 |
Domestic
| Domestic | 1,055,218,283.63 | 711,291,610.91 | 32.46 | -19.75 | -10.08 | -7.26 pp |
| Overseas | 535,039,236.26 | 387,006,907.38 | 27.94 | -2.74 | 5.65 | -5.72 pp |
Main business by sales model
| By Sales Model | Operating Income | Operating Cost | Gross Margin (%) | Change Of Operating Income Over 2020（%） | Change Of Operating Costs Over 2020 | Change Of Gross Margin Over 2020 |
| direct sales | 1,590,257,519.89 | 1,098,298,518.29 | 30.94 | -14.71 | -5.10 | -6.99 |
2. Production and sales analysis table
| Main Products | Unit | Production | Sales Volume | Inventory | Change Of Production Over 2020（%） | Change Of Sales Volume Over 2020（%） | Change Of Inventory Over 2020（%） |
Filter material
| Filter material | Tons | 11,234.26 | 9,106.28 | 671.93 | -1.74 | -12.05 | -7.88 |
| Filter equipment | PCS | 655,789.00 | 653,151.00 | 46,210.00 | -49.17 | -48.97 | 6.05 |
| Energy saving material | Tons | 76,305.49 | 56,111.24 | 3,467.39 | 8.04 | 6.83 | -25.11 |
3. Implementation of major purchase contracts and major sales contractsN/A
4. Cost analysis table
Cost analysis table by industry
| By industry | Cost Components | Current Amount | of the total cost (%) | Amount of last year | of total cost in last year (%) | Proportion of changes over previous year (%) | statement |
| CLEAN AIR | Raw and auxiliary materials, energy and power, labor, manufacturing costs | 573,374,338.01 | 52.21 | 672,247,271.36 | 58.08 | -14.71 | |
| HIGH EFFICIENCY& ENERGY SAVING | 524,924,180.28 | 47.79 | 485,117,635.78 | 41.92 | 8.21 |
Cost analysis table by product
| By Product | Cost Components | Current Amount | Of The Total Cost (%) | Amount Of Last Year | Of Total Cost In Last Year (%) | Proportion Of Changes Over Previous Year (%) | Statement |
| Clean Air | Direct Materials | 409,477,585.92 | 71.42 | 500,359,477.95 | 74.43 | -18.16 | 产量减少 |
| Other material | 42,038,986.76 | 7.33 | 46,373,248.01 | 6.90 | -9.35 | 产量减少 | |
| labor and manufacturing costs | 121,857,765.34 | 21.25 | 125,514,545.40 | 18.67 | -2.91 | 产量减少 |
HighEfficiency&Energy Saving
| High Efficiency& Energy Saving | Direct Materials | 347,946,441.06 | 66.29 | 316,803,522.19 | 65.30 | 9.83 | 产量增加 |
| Other material | 10,840,565.65 | 2.07 | 11,248,607.77 | 2.32 | -3.63 | 辅助材料回收利用 | |
| labor and manufacturing costs | 166,137,173.56 | 31.65 | 157,065,505.83 | 32.38 | 5.78 | 产量增加 |
5. Changes in the scope of consolidation due to changes in the shareholdings ofmajor subsidiaries during the reporting periodN/A
6. Significant changes or adjustments to the company's business, products orservices during the reporting periodN/A
7. Information on major sales customers and major suppliers
A. The main sales customers of the companyThe sales of the top five customers amounted to RMB 414.9122 million,accounting for 25.62% of the total annual sales; among the sales of the top fivecustomers, the sales of related parties amounted to RMB 101.1699 million, accountingfor 6.25% of the total annual sales.During the reporting period, the proportion of sales to a single customer exceeds50% of the total, and there are new customers among the top 5 customers, or thesituation is heavily dependent on a small number of customersN/AB. The main suppliers of the company
The purchase amount of the top five suppliers was RMB 467,537,700, accountingfor 32.37% of the total annual purchase; among the purchase amount of the top fivesuppliers, the purchase amount of related parties was RMB 195,583,300, accountingfor 13.54% of the total annual purchase.During the reporting period, the proportion of purchases from a single supplierexceeded 50% of the total, and there were new suppliers among the top 5 suppliers ora heavy reliance on a small number of suppliersN/A
(4) R&D
1. R&D Investment Table
Unit: Yuan
| Expenditure R&D investment in the current period | 89,510,799.50 |
| Capitalized R&D investment in the current period | 8,283,905.12 |
Total R&D investment
| Total R&D investment | 97,794,704.62 |
| Proportion of total R&D investment to operating income | 6.04% |
Proportion of capitalization of R&D investment
| Proportion of capitalization of R&D investment | 8.47% |
2. R&D Personnel Information Table
| The number of R&D personnel in the company | 236 |
| The ratio of the number of R&D personnel to the total number of the company | 15.71% |
Educational Structure Of R&D Personnel
| Educational Structure Category | Number Of People |
| PhD | 1 |
| Postgraduate | 10 |
Undergraduate
| Undergraduate | 55 |
| College | 5 |
High school and below
| High school and below | 164 |
Age Structure Of R&D Staff
| Age Structure Category | Number Of People |
| Under 30 years old (excluding 30 years old) | 52 |
| 30-40 years old (excluding 40 years old) | 121 |
40-50 years old (excluding 50 years old)
| 40-50 years old (excluding 50 years old) | 43 |
| 50-60 years old (excluding 60 years old) | 20 |
60 years old and above
| 60 years old and above | 0 |
(5) Cash flow
Unit: Yuan
| Items | Amount of this period | Amount of the last year | Change ratio (%) |
| Net cash flow from operating activities | 148,772,678.97 | 291,270,329.26 | -48.92 |
| Net cash flow from investing activities | -214,729,467.05 | -162,706,081.47 | N/A |
Net cash flow from financing activities
| Net cash flow from financing activities | -46,326,348.26 | -19,432,987.82 | N/A |
IV. Analysis of Assets and Liabilities
(1) Assets And Liabilities
| Item | Closing amount of the current period | The ratio to the total assets (%) | Closing amount of last period | The closing amount of the previous period to the total assets (%) | Changes in the amount compared with the end of the previous period (%) | Statement |
| Tradable Financial Assets | 2,391,632.00 | 0.08 | 20,428,616.00 | 0.74 | -88.29 | 1 |
Accounts Receivable
| Accounts Receivable | 630,601,740.67 | 21.51 | 487,189,958.67 | 17.77 | 29.44 | 2 |
| Contract Assets | 13,133,663.80 | 0.45 | 9,821,763.55 | 0.36 | 33.72 | 3 |
Other Current Assets
| Other Current Assets | 12,430,684.45 | 0.42 | 8,056,456.66 | 0.29 | 54.29 | 4 |
| Long-Term Equity Investment | 85,379,046.38 | 2.86 | 39,794,148.03 | 1.45 | 114.55 | 5 |
Investment In Other Equity Instruments
| Investment In Other Equity Instruments | 4,350,000.00 | 0.15 | 600,000.00 | 0.02 | 625.00 | 6 |
| Construction In Progress | 147,696,378.50 | 5.04 | 12,589,767.15 | 0.46 | 1,073.15 | 7 |
| Long-Term Prepaid Expenses | 7,126,744.84 | 0.24 | 15,299,957.46 | 0.56 | -53.42 | 8 |
Bills Payable
| Bills Payable | 19,085,011.09 | 0.65 | 28,333,230.21 | 1.03 | -32.64 | 9 |
| Other Payables | 20,172,881.81 | 0.69 | 11,718,151.31 | 0.43 | 72.15 | 10 |
1) Main reasons for changes in financial assets held for trading: mainly due to theredemption of all wealth management products during the reporting period.
2) Main reasons for changes in accounts receivable: mainly due to the increase in thecompany's shipments at the end of the year, and the relatively long order cycle forlarge projects.
3) Main reasons for changes in contract assets: mainly due to the increase in the quality
assurance fund receivable within one year during the reporting period.
4) Main reasons for changes in other current assets: mainly due to the report expects toincrease the deductible value-added tax
5) Main reasons for changes in long-term equity investments: mainly due to additionalinvestment in participating companies during the reporting period.
6) Main reasons for changes in investments in other equity instruments: mainly due to
the increase in foreign investment during the reporting period.
7) Main reasons for changes in construction in progress: mainly due to the increase inthe construction of projects to be raised and invested in the reporting period.
8) Main reasons for changes in long-term deferred expenses: mainly due to the increase
in plant decoration costs during the reporting period.
9) Main reasons for changes in notes payable: mainly due to the payment of notes dueduring the reporting period10) Main reasons for changes in other payables: mainly due to the increase in retirement
payments paid on behalf of the Company during the reporting period.
(2) Overseas Assets
The overseas assets are 791,999.49 (unit: yuan currency: RMB), accounting for
0.03% of the total assets.
(3) Restrictions On Major Assets as At the End of The Reporting PeriodAt the end of the period, there were mortgages, pledges, freezes, etc. withrestrictions on use of RMB 8,402,697.94. All that are all other monetary funds, which
were bank acceptance bill deposits and guarantee deposits.V. Analysis of Industry Operating InformationVI. Analysis of Investment Status
(1) Significant equity investment
N/A
(2) Significant non-equity investments
N/A
(3) Financial assets measured at fair value
N/A
(4) The specific progress of major asset restructuring and integration during thereporting periodN/A
VII. Significant Assets and Equity Sales
N/A
VIII. Analysis of major holding companiesRefer to the original Chinese version report.
IX. The Company's Discussion and Analysis on The Future Development of TheCompanyAll details refer to Chapter 3 in this report.
(四)可能面对的风险
1. Risk of Changes in Raw Material Costs
In the cost composition of micro glass fiber, natural gas costs account for arelatively high proportion of the total cost, and the price of natural gas has a greaterimpact on the price of micro glass fiber.Fluctuations in natural gas prices in the future will directly cause fluctuations inthe price of micro glass fiber. If the price and production cost of micro glass fiberfluctuate significantly in the future, it will directly affect the company's net profit.
2. Risk of Changes In Export Tax Rebate Policy.
Our export sales revenue accounted for about 33.77% of the total combined mainbusiness revenue of 2021.
With the changes in the country's economic situation, the country may adjust therelevant export tax rebate policies in the future.
If the export tax rebate rate of our main products is reduced or cancelled, it mayhave an adverse impact on the net profit.
3. Risk of exchange rate changes.
Due to the large proportion of our export business, the current exchange rate in theinternational market fluctuates frequently.
If the exchange rate fluctuation of RMB against the US dollar and the eurocontinues to increase in the future, the company will face the risk of exchange loss dueto exchange rate fluctuations.
4. The Risk of Large Book Balance of Accounts Receivable.
Zisun implements a consistent and prudent credit policy, and the increase in thebook balance of accounts receivable is mainly due to changes in the sales revenue andcustomer structure.
However, if the book balance of accounts receivable continues to rise sharply inthe future, on the one hand, the operating cash flow will continue to decrease, whichwill put the company under greater financial pressure, which may lead to the risk of notbeing able to raise funds in time for necessary research and development and investmentin fixed assets. On the other hand, the possibility of bad debts in the company's accountsreceivable increases, increasing the risk of uncollectible accounts receivable.
5. The risk of talent shortage.
The rapid growth of the company is accompanied by the growing demand fortalents, especially the demand for high-end technical talents and management talents isobvious in the short term.
6. Goodwill impairment risk.
There is a large goodwill in the process of merger and acquisition. If theperformance of the acquired party develops in an unfavorable direction in the future,there may be impairment of goodwill, which will have a certain impact on thecompany's performance.
Chapter 4 Company GovernanceI. Description of Corporate GovernanceDuring the reporting period, according to the relevant laws and regulations such as theCompany Law, the Securities Law, and the Corporate Governance Guidelines for Listed Companies,as well as the requirements of the Articles of Association, Zisun has continuously improved itscorporate governance structure and internal control system. The powers and responsibilities amongthe powers, decision-making bodies, supervisory bodies and management are clearly defined, andthe operation is standardized, effectively protecting the legitimate rights and interests of thecompany and shareholders.
At present, Zisun, in accordance with the requirements of listed companies, hasestablished a corporate governance structure with clear rights and responsibilities,mutual checks and balances, and an effective internal control system for supervision.Zisun operates in strict accordance with the law. The actual status of companygovernance complies with the requirements of relevant laws and regulations. Zisundoes not have the problem that the regulatory authorities require rectification within atime limit.
(1) About Shareholders and the General Meeting of Shareholder:
Strictly following the regulations and requirements of the Articles of Associationand the Rules of Procedure for the General Meeting of Shareholders, Zisun regulatesthe convening, convening and deliberation procedures of the general meeting ofshareholders, and hires lawyers to issue legal opinions on the legality of the generalmeeting of shareholders. Zisun ensures the equal status of all shareholders, especiallysmall and medium shareholders, and fully exercises the legitimate rights and interestsof shareholders. Zisun guarantees the shareholders' right to know, participate and voteon the company's major issues.
(2) The Relationship Between the Controlling Shareholder and the Listed
CompanyThe controlling shareholder of the company, who did not directly or indirectlyinterfere in the company's decision-making and business activities beyond the generalmeeting of shareholders exercises the rights of the investor through the general meetingof shareholders. The company is separated from the controlling shareholder in terms ofpersonnel, assets, finance, organization and business.Zisun has independent and complete business and independent managementcapabilities. Our board of directors, supervisory board and management are capable tooperate independently. During the reporting period, Zisun did not provide guarantee forthe controlling shareholder and its affiliated enterprises, nor did the controllingshareholder occupy the company's funds for non-operational purposes.
(3) Regarding The Directors and The Board of Directors and The
Professional Committees of The Board of Directors
Zisun selects and appoints directors in strict accordance with the provisions of the“Articles of Association”. The number and composition of directors comply withrelevant laws and regulations. All directors are able to perform their dutiesconscientiously and diligently by actively participating in relevant business training andearnestly learning relevant laws and regulations. The rights, obligations andresponsibilities of company directors are clearly defined.
(4) Supervisors and the Supervisory Committee
The Supervisory Committee performs its duties diligently and responsibly, in strictaccordance with relevant laws and regulations and the relevant provisions of theArticles of Association. The board of supervisors supervises the operation of thecompany in accordance with the law including supervising the company's board ofdirectors and senior management to exercise their powers, supervising the company'srelated transactions, financial status and the preparation of regular reports.
(5). Relevant Stakeholders
Zisun fully respects the legal rights of customers, employees, suppliers andpartners, the public and other stakeholders. Zisun strives to actively cooperate withstakeholders and jointly promote the sustainable and healthy development of thecompany. We take into account the simultaneous improvement of the economic andsocial benefits of the company.
(6) Information Disclosure and Transparency
Zisun has formulated the “Information Disclosure Management System” and “TheAccountability System for Major Errors in Information Disclosure in Annual Reports”etc., which clarify the person responsible for information disclosure, and fulfill theobligation of information disclosure in a true, accurate, complete and timely manner.The company discloses the latest information of the company in the newspapers,periodicals and websites designated by the Zisun, so that all shareholders have an equalright to know.
Both the company and its controlling shareholders have formulated a registrationand filing system for insiders of inside information in accordance with the requirementsof the regulatory authorities, which regulates the management of inside information bythe company and controlling shareholders, strengthens the confidentiality of insideinformation, and maintains the principle of fairness in information disclosure.
During the reporting period, the company strictly followed the “Inside InformationInsider Management System” to keep the inside information confidential and theinsider's registration and filing work, and strictly control the insider to the minimumscope and ensure that the major information will not be leaked during the windowperiod.
Our directors, supervisors, and senior managers did not use inside information tobuy or sell the company's stock during the sensitive period. Corporate governance is along-term task for enterprises. Zisun will continue to improve the corporate governancestructure, the internal control mechanism of the company, and further enhance thecompany's directors, supervisors and senior management staff's awareness of
standardized operation and risk control, and promote the company's sustainable, stableand healthy development.Whether there is a material difference between corporate governance and laws,administrative regulations and the Zisun regulations on listed companygovernance; if there is a material difference, the reasons shall be explained
N/A
II. The Specific Measures Taken by The Controlling Shareholder and ActualController of The Company to Ensure the Independence of The Company'sAssets, Personnel, Finance, Organization, Business, Etc., As well as thesolutions, work progress and follow-up work plans that affect the company'sindependence.N/AIf the controlling shareholder, actual controller and other units controlled byit are engaged in the same or similar business as the company.
The impact of horizontal competition or major changes in horizontalcompetition on the company, the resolution measures that have been taken, theprogress of the resolution and the follow-up resolution planN/AIII. Brief Introduction to The General Meeting of Shareholders
| Session | Date | Search Index | Disclosure Date | Meeting Outcome |
| 2021 1st Extraordinary Meeting | 2021-4-30 | www.sse.com.cn | 2021-4-30 | Announcement No. 2021-044 |
| 2020 Annual Meeting | 2021-5-18 | www.sse.com.cn | 2021-5-19 | Announcement No. 2021-049 |
Preference shareholders with restored voting rights request to convene an extraordinarygeneral meetingN/ADescription of the General Meeting of ShareholdersN/A
| 2021 2nd Extraordinary General | 2021-9-13 | www.sse.com.cn | 2021-9-14 | Announcement No. 2021-078 |
IV. Information of Directors, Supervisors and Senior Management
(1) Changes in shareholding and compensation of the current and resigned directors, supervisors and senior executives during thereporting period Current and resigned directors, supervisors and senior management during the reporting period.
| Name | Job Title | Age | Term Start | Term End | Shares Held at The Beginning of The Year | Shares Held at The End of The Year | Changes In Shares During the Year | Total Pre-Tax Remuneration (Ten Thousand Yuan) |
| Mr. GUO Mao | Chairman | 52 | 2020/4/23 | 2023/4/23 | 265,758,863 | 265,758,863 | 0 | 134.54886 |
| Mr. LIEW Xiaotong | Director, General Manager | 51 | 2020/4/23 | 2023/4/23 | 180,180 | 180,180 | 0 | 120.00 |
| Ms. LIU Xiuqin | Vice Chairman | 50 | 2020/4/23 | 2023/4/23 | 204,800 | 254,800 | 50,000 | 101.846431 |
| Mr. TAO Wei | Director | 47 | 2020/4/23 | 2023/4/23 | 68,300 | 170,789 | 102,489 | 16.598560 |
| Mr. Yi Wei | Director | 35 | 2020/4/23 | 2023/4/23 | 0 | 110,419 | 110,419 | 147.758137 |
| Ms. GUO Sihan | Director | 27 | 2020/4/23 | 2023/4/23 | 0 | 0 | 0 | 15.548912 |
| Dr. JIANG Jihai | Independent Director | 47 | 2020/4/23 | 2023/4/23 | 0 | 0 | 0 | 9.60 |
| Dr. LIU Bin | Independent Director | 60 | 2020/4/23 | 2023/4/23 | 0 | 0 | 0 | 9.600 |
| Dr HUANG Zhong | Independent Director | 40 | 2020/4/23 | 2023/4/23 | 0 | 0 | 0 | 9.60 |
| Mr. ZHENG Kaiyun | Supervisor | 44 | 2020/4/23 | 2023/4/23 | 0 | 0 | 0 | 29.782962 |
| Mr. DU Delu | Supervisor | 56 | 2020/4/23 | 2023/4/23 | 0 | 0 | 0 | 24.383257 |
| Ms. ZENG Ying | Supervisor | 32 | 2020/4/23 | 2023/4/23 | 0 | 0 | 0 | 31.968873 |
| Mr. QIN Dajiang | Deputy General Manager | 41 | 2020/4/23 | 2023/4/23 | 136,500 | 150,100 | 13,600 | 74.932770 |
| Ms. ZHOU Lingya | Deputy General Manager | 40 | 2020/4/23 | 2023/4/23 | 136,500 | 131,500 | -5,000 | 199.835438 |
| Mr. YU Yangming | Deputy General Manager | 43 | 2020/4/23 | 2023/4/23 | 116,104 | 87,104 | -29,000 | 64.509967 |
| Mr. YANG Jinming | Deputy General Manager, Chief Financial Officer | 36 | 2020/4/23 | 2023/4/23 | 27,430 | 169,062 | 141,632 | 35.164249 |
| Ms. XIE Jia | Deputy General Manager, Board Secretary | 36 | 2020/4/23 | 2023/4/23 | 50,000 | 144,732 | 94,732 | 105.632611 |
| TOTAL | / | / | / | / | 266,678,677 | 267,157,549 | 478,872 | 1,131.311027 |
(2) Employment of current and outgoing directors, supervisors and senior management during the reporting period
A. Employment in shareholderN/AB. Employment in other organization
| Name | Company Name | Positions | Term Start Date | Term End Date |
| Mr. TAO Wei | Matsushita Vacuum Energy Saving New Material (Chongqing) Co. | President and Vice President | 2016/08/ | |
| Dr. JIANG Jihai | College of Economics and Business Administration, Chongqing University | Professor | 2013/09 | |
| Dr. JIANG Jihai | Chongqing Baiya Sanitary Products Co. | Independent Directors | 2021/08 | |
| Dr HUANG Zhong | Southwest University of Political Science and Law, School of Civil and Commercial Law | Professor, Doctoral Supervisor | 2007 | |
| Dr HUANG Zhong | Chongqing Qinsuo Lian Plastic Co. Ltd | Independent Directors | 2017/08 | |
| Dr HUANG Zhong | Xin Anjie Environmental Sanitation Co. Ltd | Independent Directors | 2020/09 |
| Dr HUANG Zhong | Shandong Mining Machinery Group Co. Ltd | Independent Directors | 2021/05 | ||
| Dr HUANG Zhong | Chongqing Ant Consumer Finance Co. Ltd | Independent Directors | 2021/06 | ||
| Dr. LIU Bin | College of Economics and Business Administration, Chongqing University | Professor, Doctoral Supervisor | 1994/04 | ||
| Dr. LIU Bin | Chongqing Department Store Co. Ltd | Independent Directors | 2016/01 | ||
| Dr. LIU Bin | Chongqing Xiaokang Industrial Group Co. Ltd | Independent Directors | 2017/04 | ||
| Dr. LIU Bin | Chongqing Hualong Network Group Co. Ltd | Independent Directors | 2016/12 | ||
| Dr. LIU Bin | Sichuan Gaojin Co., Ltd | Directors | 2020/07 | ||
| Dr. LIU Bin | Chongqing Cultural Tourism Creative Development Co., Ltd. | Directors | 2019/1 | ||
| Ms. LIU Xiuqin | Chongqing Hongjiu Fruit Products Co. Ltd | Independent Directors | 2020/07 | ||
| Description of employment in other units | N/A | ||||
(3) Remuneration of Directors, Supervisors and Senior Management
| Decision-making procedures for compensation of directors, supervisors and senior management | Directors, supervisors and senior executives are organized and assessed by the Remuneration and Assessment Committee of the Company's Board of Directors in accordance with the Articles of Association and the relevant internal regulations of the Company. |
| The basis for determining the compensation of directors, supervisors and senior management | The remuneration of directors, supervisors and senior management personnel is determined and distributed in accordance with the provisions of the "Working Rules of the Remuneration and Appraisal Committee" of the company's board of directors, in combination with their business performance, work ability, job rank, and annual performance targets. |
| Actual payment of compensation to directors, supervisors and senior management | Refer to the table of VI (1) |
| Total actual remuneration received by all directors, supervisors and senior management at the end of the reporting period | 1131.311027 million |
(4) Changes in directors, supervisors and senior management of the company
N/A
(5) Explanation on Punishments by Securities Regulatory Authorities in the Past Three YearsN/A
V. Information about the Board of Directors held during the reporting period
VI. Directors' Performance of Duties
(1) Directors' participation in the board of directors and shareholders'general meetings
| Session | Date | Meeting Resolution refer to |
The 8th meeting of the 4th Board of Directors
| The 8th meeting of the 4th Board of Directors | 2021-2-8 | the Announcement 2021-006 |
The 9th meeting of the 4th Board of Directors
| The 9th meeting of the 4th Board of Directors | 2021-4-13 | the Announcement 2021-017 |
| The 10th meeting of the 4th Board of Directors | 2021-4-19 | the Announcement 2021-023 |
| The 11th meeting of the 4th Board of Directors | 2021-6-1 | the Announcement 2021-053 |
The 12th meeting of the 4th Board of Directors
| The 12th meeting of the 4th Board of Directors | 2021-7-6 | the Announcement 2021-064 |
The13th meeting of the 4th Board of Directors
| The13th meeting of the 4th Board of Directors | 2021-8-25 | the Announcement 2021-067 |
The 14th meeting of the 4th Board of Directors
| The 14th meeting of the 4th Board of Directors | 2021-10-27 | the Announcement 2021-083 |
| The 15th meeting of the 4th Board of Directors | 2021-12-08 | the Announcement 2021-092 |
Name
| Name | Board Meetings | General Meetings | ||||
| Number Of Meetings to Attend | Attendance In Person | Attendance By Means of Communication | Delegated Attendance | Absence | Number Of Meetings to Attend | |
Mr. GUO Mao
| Mr. GUO Mao | 8 | 8 | 4 | 0 | 0 | 3 |
Mr. LIEWXIAOTONG
| Mr. LIEW XIAOTONG | 8 | 8 | 4 | 0 | 0 | 3 |
| Ms. LIU Xiuqin | 8 | 8 | 4 | 0 | 0 | 3 |
Mr. TAO Wei
| Mr. TAO Wei | 8 | 8 | 4 | 1 | 0 | 3 |
No. of board meetings held during the year: 8Of which,No. of on-site meetings: 4No. of meetings held by means of communication: 4No. of meetings held on-site combined with communication methods: 0
(2) Objections raised by directors on matters related to the company
N/A
(3) Others
N/A
VII. Special Committees Under the Board of Directors
(1) Special Committees under the Board of Directors
? The Audit Committee: Dr. LIU Bin, Dr. JIANG Jihai, Ms. LIU Xiuqin
? Nomination Committee: Dr. HUANG Zhong, Dr. JIANG Jihai, Mr. YI Wei
? Remuneration and Appraisal Committee: Dr. HUANG Zhong, Dr. LIU Bin, Ms.
GUO Sihan
? Strategy Committee: Ms. GUO Mao, Mr. TAO Wei, Dr. JIANG Jihai
(2) During the reporting period, the Audit Committee held 4 meetings
(3) During the reporting period, the Remuneration and Appraisal Committeeheld 2 meetings
| Mr. YI Wei | 8 | 8 | 4 | 0 | 0 | 3 |
Ms. GUO Sihan
| Ms. GUO Sihan | 8 | 8 | 4 | 0 | 0 | 3 |
| Dr. JIANG Jihai | 8 | 8 | 4 | 0 | 0 | 3 |
Dr. LIU Bin
| Dr. LIU Bin | 8 | 8 | 4 | 0 | 0 | 3 |
Dr HUANGZhong
| Dr HUANG Zhong | 8 | 8 | 4 | 0 | 0 | 3 |
(4). During the reporting period, the Strategy Committee held 3 meetings
(5). The specific circumstances of the objection：N/A
VIII. Explanation of The Supervisory Board Finding That the Company HasRisks
The Supervisory Committee has no objection to the supervision matters during thereporting period.
IX. At the End of The Reporting Period, Employees Of The Parent Company And
Major Subsidiaries
(1) Employee Information
? Number of current employees of parent company: 440
? Number of current employees of major subsidiaries: 1056
? The total number of active employees: 1496
? Number of retirees for which the parent company and its major subsidiaries are
required to bear the expenses: 0
Employees by Profession
| Type | Number |
Production personnel
| Production personnel | 920 |
salesperson
| salesperson | 98 |
| technician | 235 |
financial personnel
| financial personnel | 43 |
Administrative staff
| Administrative staff | 200 |
| Total | 1496 |
Employees by Education Level
| Level | Number |
| Master’s degree and above | 25 |
Undergraduate
| Undergraduate | 225 |
| College | 152 |
High school and below
| High school and below | 1094 |
Total
| Total | 1496 |
(2) Salary Policy
Salary policy is a full reflection of the reward for the employee's work. Thecompany is based on the principle of contribution reflecting the correspondingremuneration, and the overall goal is to motivate talents to work hard to create bettereconomic and social benefits.Zisun salary categories include basic salary, job salary, performance bonus,allowance, subsidy, assessment award, etc. In accordance with The Labor Law,combined with the economic level of each subsidiary and the industry wage level, Zisunhas formulated the company's salary scale table, and set the company's departments atall levels and various types of work salary standards to fully stimulate the enthusiasmand creativity of employees.According to the development stage, Zisun has formulated the employee equityincentive plan and employee stock ownership plan, so as to deepen the company'sincentive system, built a long-term effective incentive and restraint mechanism, furtherimprove the company and employees' benefit sharing mechanism, and enhance thecompany's cohesion and competitiveness, which is beneficial to the companysustainable development.
(3) Training Program
The training program is divided into internal training and external training.Internal training includes, but is not limited to, employee job skills training, teamperformance management training, special production safety training, and targetmanagement and execution improvement training. External training includes, but is not
limited to, job certificate training and professional skills training.Staff job skills training. It includes induction training, job skills education, safetyknowledge training, intellectual property training, legal training, etc. The company'senterprise management department cooperates with various departments and factoriesto carry outTeam performance management training. The purpose is to guide the organizationto pursue excellent performance, improve the quality of products, services andoperations, improve the level of enterprise management, and enhance the competitiveadvantage.Special training on production safety, conducted by the enterprise managementdepartment which regularly organizes special training for each factory, aiming tostrengthen employees' awareness of standardized operation and safe production, no lessthan twice a year.Target management and training to improve execution is to improve the efficiencyof enterprise management and operation and to ensure that the business objectives ofthe enterprise are decomposed and implemented at every level.Job license training. For positions that require certification, organize employees toparticipate in license training, review and annual audit training.
Professional skills training. It is to organize people with the positions acquiringhigher professional skills to participate in professional training. The training topicsinclude marketing, on-site management, enterprise structure, production technology,etc.The purpose is to strengthen the professional foundation of each professional teamof the company, cultivate teamwork awareness, broaden professional ideas and enhancemarket competitiveness.
(4) Outsourcing of Labor Services
Total man-hours for labor outsourcing: 1,393,255.70 hours
Total remuneration paid for labor outsourcing: RMB 27,492,767.36X. Profit Distribution or Capital Reserve Conversion Plan
(1) The Formulation and Adjustment of The Cash Dividend Policy
A. Formulation and adjustment of the cash dividend policy
During the reporting period, no adjustment was made to the Company's cashdividend policy. The current cash dividend policy was considered and approved by thefirst extraordinary general meeting of the Company in 2014 on May 6, 2014, and thespecific profit distribution policy is detailed in the relevant articles of profit distributionin the Articles of Association. During the reporting period, the Company's profitdistribution plan strictly implemented the provisions of the relevant dividenddistribution policy.
In order to further plan the profit distribution and cash dividend matters of theCompany and guide shareholders to establish long-term investment and rationalinvestment concepts, the Board of Directors of the Company formulated the "Proposalon the Company's Shareholder Return Planning for the Next Three Years (2015-2017)",which was voted by the Company at the First Extraordinary General Meeting in 2015.The Company held the fourteenth meeting of the third session of the Board of Directorson April 19, 2018, and considered and approved the Proposal on the Company'sShareholder Return Plan for the Next Three Years (2018-2020), which was voted bythe Company at the 2017 Annual General Meeting. The company held the eighthmeeting of the fourth session of the board of directors on February 8, 2021 andconsidered and passed the Zisun shareholder return plan for the next three years (2021-2023)", which was considered and passed at the shareholders' meeting of the company'sfirst extraordinary shareholders' meeting in 2021.
B. Implementation of cash dividend policy
The 2021 profit distribution and capital reserve conversion plan: the companyplans to use the total share capital on the equity registration date when the profitdistribution plan is implemented as the base and use the capital reserve to transfer 4
shares for every 10 shares to all shareholders. All shareholders will distribute a cashdividend of RMB 1.05 (tax included) for every 10 shares.If there is a change in the company's total share capital before the equityregistration date for the implementation of equity distribution, it is proposed to maintainthe distribution amount per share unchanged, and the total distribution amount will beadjusted accordingly. The remaining undistributed profits are carried forward fordistribution in subsequent years. The above profit distribution plan is yet to be reviewedand approved at the company's 2021 annual general meeting.
? Whether it complies with the provisions of the company's articles of association or
the requirements of the resolution of the general meeting of shareholders-Yes
? Whether the dividend standard and ratio are clear and clear-Yes
? Whether the relevant decision-making procedures and mechanisms are complete-Yes
? Whether the independent directors performed their duties and played their due role-Yes
? Whether minority shareholders have the opportunity to fully express their opinionsand demands, and whether their legitimate rights and interests have been fullyprotected-Yes
(3) If it is profitable during the reporting period and the parent company'sprofit available to shareholders for distribution is positive, but no cash profitdistribution plan has been proposed, the company shall disclose the reasons indetail and the purpose and use plan of the undistributed profits.
N/A
XI. Status and Impact of Company Equity Incentive Plans, Employee Stock
Ownership Plans or Other Employee Incentives
(1) Relevant incentive matters have been disclosed in the temporaryannouncement and there is no progress or change in the subsequentimplementation.
All details refer to the Announcement of 2021-031, 032, 033, 034 on April 4
th,2021, the Announcement of 2021-054 on June 2
nd
, 2021, the Announcement of 2021-063 on July 7
th, 2021, the Announcement of 2021-067 on August 26
th, 2021, heAnnouncement of 2021-078 on September 14
th, 2021, and he Announcement of 2021-090 on November 24
th, 2021.
(2) Incentives not disclosed in the temporary announcement or with follow-up progressN/A
(3) Share incentives granted to directors and senior executives during thereporting period
(4) The evaluation mechanism for senior management personnel and theestablishment and implementation of the incentive mechanism during thereporting period
XII. Construction and Implementation of Internal Control System During the
Reporting Period
In order to strengthen and standardize the internal control of enterprises, improvethe level of enterprise management and risk prevention, the company continues tooptimize and improve the construction of the company's internal control system,strengthen the Internal Audit Oversight.
The company established the "Chongqing Zisun Technology Co., Ltd. InternalAudit System", which aims to improve the comprehensive risk management
mechanism, improve the company's internal control system, strengthen the company'sself-discipline, improve business management, ensure the healthy development of thecompany's production and business activities, and improve economic benefits, torealize the preservation and appreciation of the company's assets. Continuously inspectand evaluate the integrity, rationality and effectiveness of the company's internal controlsystem, and continuously monitor the legality, compliance, authenticity and integrity ofthe company's economic activities. Assist in the establishment and improvement of theanti-fraud mechanism, determine the key areas, key links and main contents of anti-fraud, and focus on reviewing the integrity of the internal control system for matterssuch as external investment, purchase and sale of assets, external guarantees, relatedtransactions, use of raised funds, and information disclosure. the validity, rationalityand effectiveness of implementation. In order to adapt to the changing externalenvironment and internal management requirements.The company has a legal review and supervision department to supervise theimplementation of the company's management philosophy, corporate culture, strategicplanning, and annual goals. Supervise R&D design, marketing management, etc.,improve management opinions and rectification measures, and supervise theimplementation of inspections. Continuously promote and enhance the company'sculture and level of supervision and execution and improve the company's own riskmanagement and control capabilities.During the reporting period, the aforesaid internal control system was wellimplemented, the implementation of internal control was basically effective, and therewas no significant legacy.
Explanation on material defects of internal control during the reporting period:
N/A
XIII. Management and Control of Subsidiaries During the Reporting PeriodZisun has built an internal control system construction system based on the
headquarters system and implemented by all subsidiaries, centers and departments.As of the end of the reporting period, the company continued to check and evaluatethe completeness, rationality and implementation effectiveness of the internal controlsystems of its subsidiaries, and conducted inspections on the legality, compliance,authenticity and integrity of its economic data and economic activities. Audits,including financial reports, performance flashbacks, voluntary disclosures of forward-looking financial information, etc.The company continues to supervise the operation and management of eachsubsidiary company's due diligence, manages and supervises matters such as projectinvestment, production and operation, and continuously improves the standardoperation level of the subsidiary companies.
The internal audit department of the company regularly conducts on-siteinspections on the system construction and business activities of the branch companiesand tracks the problems existing in the inspection process and urges rectification.Strengthen the internal management control and coordination of branch companies andimprove the operation and management level of branch companies.
XIV Relevant Information on The Internal Control Audit Report
At the Sixteenth Meeting of the Fourth Session of the Board of Directors of theCompany, the "Proposal on the Confirmation of the Company's 2021 Annual Self-Evaluation Report on Internal Control" was considered and approved, the full report isavailable on the Shanghai Stock Exchange at www.sse.com.cn披露的内容 on March10, 2022.
Whether to disclose the internal control audit report:
- YES
Type of opinion on the internal control audit report:
Standard unqualified opinion
XV. Listed companies governance special action self-examination problemsrectificationN/A
Chapter 5 Environmental and Social ResponsibilityI. Environmental information
(1) Explanation On the Environmental Protection of The Company and ItsMain Subsidiaries That Are Key Pollutant Discharge Units Announced by TheEnvironmental Protection Department
Zisun attaches great importance to environmental protection work, strictlyimplements and implements the Environmental Protection Law of the People'sRepublic of China and other relevant laws and regulations. Adhering to the companyvision of "working hard for energy conservation and cleanliness, and striving for thehappiness of future generations", Zisun continues to carry out standardizedmanagement of environmental protection and pollution prevention.
During the reporting period, the company did not have any environmentalpollution accident, was not subject to environmental administrative penalties, anddischarged the three wastes up to the standard.
The company has passed the ISO14001:2015 environmental management systemcertification and passed the clean production audit. In recent years, the company hassuccessively won the title of Environmental Credit Evaluation and EnvironmentalIntegrity Unit.
Zisun has achieved the standard treatment and comprehensive utilization ofwastewater, meets the requirements of environmental protection laws and regulationsand the production and reuse water standards, reduces environmental pollution andsocial impact, protects and improves environmental quality, and meets the needs ofclean production and water conservation.
Zisun continues to improve the production line process, reduce the use of naturalgas, improve production efficiency, reduce energy consumption, and continue to carryout standardized management of environmental protection and pollution prevention.
A. Pollution Information
? Exhaust Emission Standards：During the reporting period, Zisun strictly follows
the regulations and discharges up to the standard, and there is no excessivedischarge.
? Wastewater Discharge Standard：
Main monitoring indicators: pH, suspended solids, COD, ammonia nitrogen, totalphosphorus, animal and vegetable oils.Number of discharge outlets: 1; distributionLocation: next to the dormitory building.Monitoring results: monitoring does not exceed the standard. Sewage dischargeinto the park sewage treatment plant.
? Noise Emission Standard：
Main source: Equipment operation.Monitoring results: The monitoring does not exceed the standard.B. Construction and Operation of Pollution Prevention and Control Facilities
Xuanhan Zhengyuan adopts a variety of pollution prevention and control facilitiesand ensures that the environmental protection facilities are in good operation.C. Environmental Impact Assessment of Construction Projects And Other
Environmental Protection Administrative Permits
Xuanhan Zhengyuan conducts environmental impact assessment in strictaccordance with regulations, and obtains project acceptance and discharge permits, andobtains project approval documents respectively.
D. Contingency Plan for Unexpected Environmental Incidents
In order to implement the requirements of relevant laws, regulations and rules suchas the Environmental Protection Law of the People's Republic of China, the EmergencyResponse Law of the People's Republic of China, the National Emergency Response
Plan for Environmental Emergencies and the Interim Measures for the Management ofEmergency Response Plans for Environmental Emergencies, the company hasestablished and improved the emergency rescue system for environmental emergencies,so as to improve the prevention, emergency response and disposal capability ofenvironmental emergencies.The company avoids and reduces the occurrence of environmental emergencies asmuch as possible by implementing effective preventive and monitoring measures. Byresponding quickly to environmental emergencies and carrying out effective emergencyactions, the company effectively eliminates and reduces the pollution hazards ofenvironmental emergencies. The company has prepared a contingency plan forenvironmental emergencies, which has been filed with the environmental protectiondepartment of Xuanhan County.E. Environmental Self-Monitoring ProgramN/A
F. Administrative Penalties for Environmental Issues During the Reporting
PeriodN/A
G. Other Environmental Information That Should Be Made PublicN/A
(2) Explanation On Environmental Protection of Companies Other Than KeyPollutant Discharge UnitsN/A
(3) Relevant Information That Is Conducive to Protecting Ecology,Preventing and Controlling Pollution, And Fulfilling EnvironmentalResponsibilities
N/A
(4) Measures Taken to Reduce Carbon Emissions During the ReportingPeriod and Their EffectsN/A
II. Social Responsibility WorkFor details, please refer to our ESG report 2021.
III. Consolidate and Expand the Achievements of Poverty Alleviation and Rural
Revitalization
Zisun is well aware of the social responsibility of the company and activelyundertakes the social responsibility of the company. In 2021, Zisun has invested a totalof 378,600 yuan through charitable donations, agricultural product assistance, andfunding for poor students.
Chapter 6 Important Matters
I. Fulfillment of Commitments
(1) Commitments Made by The Company's Actual Controller, Shareholders, Related Parties, Acquirers And The Company AndOther Relevant Parties During The Reporting Period Or Continuing To The Reporting Period.
All details refer to SSE website（http://www.sse.com.cn/disclosure/credibility/supervision/promisho/）
(2) There Is a Profit Forecast for The Company's Assets or Projects, And the Reporting Period Is Still In The Profit Forecast Period,The Company's Assets Or Projects Are Still In The Profit Forecast Period.
N/A
(3) Completion Of Performance Commitments and Its Impact on Goodwill Impairment Testing
During the reporting period, Suzhou U-air, Papermaking Institute , Shenzhen Zhongfang had no goodwill impairment in the evaluation test.
II. During the Reporting Period, Non-Operating Capital Occupation by The
Controlling Shareholder and Other Related PartiesN/A
III. Violation of GuaranteeN/A
IV. Explanation of The Board of Directors of The Company on the "Non-StandardOpinion Audit Report" of the Accounting FirmN/A
V. The Company's Analysis and Explanation on The Reasons and Effects ofChanges in Accounting Policies, Accounting Estimates or Correction ofMajor Accounting Errors
(1) The company's analysis and explanation on the reasons and impact of changesin accounting policies and accounting estimatesN/A
(2) The company's analysis and explanation on the reasons and impact of thecorrection of major accounting errors
N/A
(3) Communication with the former accounting firm
N/A
(4) Others
N/A
VI. Appointment and Dismissal of Accounting Firms
Current appointment
| Name of domestic accounting firm | Baker Tilly China Certified Public Accountants (Baker Tilly China) (Special General Partnership) |
| Remuneration of domestic accounting firms | 57 |
| Audit period of domestic accounting firm | 12 |
| Name of overseas accounting firm | N/A |
| Remuneration of overseas accounting firms | N/A |
| Audit period of overseas accounting firm | N/A |
| Name | Remuneration | |
| Internal Control Audit Accounting Firm | Baker Tilly China Certified Public Accountants (Baker Tilly China) | 20 |
| Financial Consultant | Huafu Securities Co. | 15 |
| Sponsor | Huafu Securities Co. | 0 |
Description of Appointment and Dismissal of Accounting FirmsThe Company held the second meeting of the Audit Committee of the FourthSession of the Board of Directors for 2021 on April 16, 2021, and reviewed theprofessional competence, investor protection capability, independence, integrity statusand other information of TIANZHI International CPA Firm (Special GeneralPartnership), and considered that it could follow the professional standards ofindependence, objectivity and impartiality and carry out the audit work independently,and agreed to re-appoint Baker Tilly China Certified Public Accountants (Baker TillyChina) (Special General Partnership) as the auditor of financial report and internalcontrol of the Company for 2021.
The company held the 2020 annual general meeting on May 18, 2021, andconsidered and approved the proposal on the renewal of the appointment of theaccounting firm.Explanation on the change of the accounting firm during the audit period
VII. Situations at Risk of Delisting
N/A
VIII. Bankruptcy and Reorganization Related Matters
N/A
IX. Major Litigation and Arbitration Matters
(1) Litigation and arbitration matters have been disclosed in temporaryannouncements and there is no subsequent progress
All details refer to the announcement No. 2019-068 on August 14
th
2019 and theannouncement No. 2019-075 on October 11
th2019.
（2）Litigation and arbitration that were not disclosed in the interimannouncement or that have follow-up progressN/A
X. The Listed Company and Its Directors, Supervisors, Senior Managers,Controlling Shareholders and Actual Controllers Are Suspected of Violationsof Laws and Regulations, Punishments and RectificationsN/A
XI. Explanation on The Integrity of The Company and Its ControllingShareholder and Actual Controller During the Reporting PeriodN/A
XII. Significant Related Transactions
(1) Related Party Transactions Related to Daily Operations
A. Matters that have been disclosed in the interim announcement and have noprogress or change in subsequent implementation
N/A
B. Matters that have been disclosed in the interim announcement but have progressor changes in subsequent implementation.
All details refer to the Announcement on the 2020 Annual Related PartyTransactions and the 2021 Annual Related Party Transactions Expectation (No. 2021-025) on April 20
th
, 2021.
C. Matters not disclosed in the interim announcement
N/A
(2) Affiliated Transactions Arising from The Acquisition and Sale of Assets orEquity
N/A
(3) Significant Connected Transactions Involving Joint Foreign Investment
A. Matters that have been disclosed in the interim announcement and have noprogress or change in subsequent implementation
All details refer to the announcement No. 2021-010 on February 9
th
2021, theannouncement No. 2021-045 on May 8
th
, 2021, the announcement No. 2021-037 onFebruary 9th，the announcement No. 2021-060 on July 1
st2021.B. Matters that have been disclosed in the interim announcement but have progressor changes in subsequent implementation
N/AC. Matters not disclosed in the interim announcementN/A
(4) Credit And Debt Transactions with Related Parties
N/A
(5) Financial business between the company and the financial company withan associated relationship, the financial company controlled by the company andthe related partyN/A
(6) Others
N/A
XIII Significant Contracts and Their Performance
(1) Entrustment, Contracting and Leasing Matters
N/A
(2) Guarantee
| External Guarantee | Amount |
Total amount of guarantees to subsidiaries during the reporting period
| Total amount of guarantees to subsidiaries during the reporting period | 203,500,000.00 |
| Total balance of guarantees to subsidiaries at the end of the reporting period | 124,385,133.81 |
Total Guarantee
| Total Guarantee | 124,385,133.81 |
The ratio of total guarantees of the company's net assets
| The ratio of total guarantees of the company's net assets | 6.27% |
(3) Entrusting others to manage cash assets
A. Entrusted Financial Managementa. Overall Situation of Entrusted Financial Management
Unit: Ten Thousand Yuan Currency: RMB
| Type | Resource | Amount | Outstanding Balance | Overdue Amount Not Recovered |
Bank wealth management products
| Bank wealth management products | Idle raised funds | 1,800.00 | 0 | 0 |
b. Individual Entrusted Financial Management
Unit: Ten Thousand Yuan Currency: RMB
| Trustee | Type | Amount | Start Date | End Date | Sources | Investment Type | Remuneration Determination Method | Annualized Rate of Return | Actual Profit or Loss | Actual Return on Investment |
CCB
| CCB | Capital Guaranteed | 400 | 2018/11/21 | 2021/5/12 | raised funds | Bank wealth management products | Annualized yield by bank | 2.99% | 29.541918 | withdrawn |
CCB
| CCB | Capital Guaranteed | 1,400 | 2018/11/21 | 2021/8/30 | raised funds | Bank wealth management products | Annualized yield by bank | 2.89% | 112.425753 | withdrawn |
c. Provision for impairment of entrusted wealth managementN/A
Entrusted loansN/A
XIV. Explanation of Other Major Events That Have a Significant Impact on
Investors' Value Judgments and Investment DecisionsN/A
Chapter 7 Changes in Shares and Shareholders
I. Changes in Share Capital
(1) Statement Of Changes in Shares
1. Statement of Changes in Shares
| Before this change | Increase or decrease in this change（＋，－） | After this change | |||||||
| Quantity | Proportion (%) | New Shares Issued | Bonus Shares | Transfer Of Provident Fund to Shares | Other | Subtotal | Quantity | Proportion (%) | |
| Restricted shares | 0 | 0 | |||||||
| 1 State holdings | |||||||||
| 2 State-owned legal person holding | |||||||||
| 3 Other domestic holdings | |||||||||
| Of which: Shares held by domestic non-state-owned legal persons | |||||||||
| Of which: Domestic natural person holding | |||||||||
| 4 Foreign holding | |||||||||
| Of which: Shares held by foreign legal persons | |||||||||
| Of which: Shares held by foreign natural persons | |||||||||
| Unrestricted shares | 718,994,343 | 100 | 6,036,663 | 6,036,663 | 725,031,006 | 100 | |||
| 1 RMB ordinary shares | 718,994,343 | 100 | 6,036,663 | 6,036,663 | 725,031,006 | 100 | |||
| 2 Domestically listed foreign capital | |||||||||
| 3 Overseas listed foreign shares | |||||||||
| 4 Others | |||||||||
| Total number of shares | 718,994,343 | 100 | 6,036,663 | 6,036,663 | 725,031,006 | 100 |
2. Description of Changes in Shares
During the reporting period, 6,036,663 shares of Zisun 2019 Stock OptionIncentive Plan were exercised, and the total number of shares of the company increasedfrom 718,994,343 shares at the beginning of the period to 725,031,006 shares at the endof the reporting period.
3. The impact of changes in shares on financial indicators such as earningsper share and net assets per share in the last year and the latest period (if any)
During the reporting period, due to the exercise of 2019 Stock Option IncentivePlan, the total number of shares of the company increased by 6,036,663 shares from718,994,343 shares at the beginning of the period to 725,031,006 shares at the end ofthe reporting period.
4. Other contents deemed necessary by the company or required by securitiesregulators to disclose
N/A
(2) Changes in restricted shares
N/A
II. Securities Issuance and Listing
(1) Securities issuance as of the reporting period
N/A
(2) Changes in the total number of shares of the company and changes inshareholder structure and changes in the company's asset and liability structure
N/A
(3) Existing internal staff shares
N/A
III. Shareholders and Actual Controllers
(1) Total number of shareholders
1.Total number of common shareholders as of the end of the reporting period:
26,547
2. The total number of ordinary shareholders at the end of the previous monthbefore the disclosure date of the annual report ：29,337
3.The total number of preferred shareholders whose voting rights have beenrestored by the end of the reporting period:0
4. The total number of preferred shareholders whose voting rights have beenrestored at the end of the previous month before the disclosure date of the annualreport:0
(2) As at the end of the reporting period, the shareholding situation of the top ten shareholders and the top ten tradable shareholders (orshareholders without restrictions on sales) as of the end of the reporting period.
| Situation Of the Top Ten Shareholders | |||||
| Shareholder name (Full name) | Changes in 2021 | quantity of shares at the end of the period | Proportion (%) | Restricted shares held | |
| Mr. Guo Mao | 0 | 265,758,863 | 36.65 | 0 | |
| Hong Kong Securities Clearing Company Limited | 15,154,818 | 45,433,279 | 6.27 | 0 | |
| 上海广岑投资中心（有限合伙） | 0 | 44,924,880 | 6.20 | 0 | |
| 兴业银行股份有限公司－天弘永利债券型证券投资基金 | 13,632,134 | 19,673,965 | 2.71 | 0 | |
| UBS AG | 19,653,009 | 19,653,009 | 2.71 | 0 | |
| 南京融京汇聚股权投资合伙企业（有限合伙） | 0 | 17,600,013 | 2.43 | 0 | |
| 中国建设银行股份有限公司－景顺长城环保优势股票型证券投资基金 | -1,139,298 | 12,278,896 | 1.69 | 0 | |
| 中国银行股份有限公司－景顺长城优选混合型证券投资基金 | -1,947,495 | 9,827,582 | 1.36 | 0 | |
| MERRILLLYNCHINTERNATIONAL | 7,114,792 | 9,114,710 | 1.26 | 0 | |
| 施罗德投资管理（香港）有限公司－施罗德环球基金系列中国A股（交易所） | 0 | 8,681,104 | 1.20 | 0 | |
| Shareholdings Of the Top 10 Shareholders with Unrestricted Shareholding | ||
| Shareholder name (Full name) | quantity of unrestricted shares held | |
| Mr. Guo Mao | 265,758,863 | |
| Hong Kong Securities Clearing Company Limited | 45,433,279 | |
| 上海广岑投资中心（有限合伙） | 44,924,880 | |
| 兴业银行股份有限公司－天弘永利债券型证券投资基金 | 19,673,965 | |
| UBSAG | 19,653,009 | |
| 南京融京汇聚股权投资合伙企业（有限合伙） | 17,600,013 | |
| 中国建设银行股份有限公司－景顺长城环保优势股票型证券投资基金 | 12,278,896 | |
| 中国银行股份有限公司－景顺长城优选混合型证券投资基金 | 9,827,582 | |
| MERRILLLYNCHINTERNATIONAL | 9,114,710 | |
| 施罗德投资管理（香港）有限公司－施罗德环球基金系列中国A股（交易所） | 8,681,104 | |
Description of the special account for repurchase among the top ten shareholdersN/AExplanation of the above-mentioned shareholders' entrusted voting rights, entrusted voting rights and abstention from votingN/AExplanation of the related relationship or concerted action of the above shareholders
N/ADescription of preferred shareholders with restored voting rights and the number of shares they holdN/A
(3) Strategic investors or general legal persons become the top 10 shareholders due to placement of new sharesN/A
IV. Controlling Shareholders and Actual Controllers
(I) Controlling Shareholders
1. legal person
N/A
2. Natural Persons
| Name | Mr. Guo Mao |
| Nationality | China |
| Whether to obtain residency in other countries or regions | No |
| Main occupation and position | Chairman Of Zisun |
3. The company does not have a special explanation for controlling shareholdersN/A
4. Explanation on Changes of Controlling Shareholders during the ReportingPeriod
N/A
5. Block diagram of property rights and control relationship between company andcontrolling shareholder
(2) Information about the actual controller
1. legal person
N/A
2. Natural Persons
| Name | Mr. Guo Mao |
| Nationality | China |
Whether to obtain residency in other countries or regions
| Whether to obtain residency in other countries or regions | No |
| Main occupation and position | Chairman Of Zisun |
Domestic and overseas listed companies that have held controlling interest in thepast 10 years
N/A
3. Special explanation on the fact that the company has no actual controller
N/A
4. Explanation on the change of the company's control during the reporting periodN/A
5. Block diagram of the property rights and control relationship between thecompany and the actual controller
6. The actual controller controls the company through trust or other assetmanagement methods
N/A
(3) Other Information on Controlling Shareholders and Actual Controllers
N/AV. The Controlling Shareholder or The Largest Shareholder of The Company and
Its Persons Acting in Concert Have Accumulatively Pledged Shares ThatAccount for More Than 80% Of the Company's Shares Held by ThemN/A
VI. Other Legal Person Shareholders Holding More Than 10% Of the SharesN/A
VII. Explanation on Share Restriction and Reduction
N/A
VII. Specific Implementation of Share Repurchase During the Reporting PeriodN/A
Chapter 9 Financial ReportConsolidated Balance Sheet
As at December 31, 2021Prepared by: CHONGQING ZAISHENG TECHNOLOGY CO., LTD
Unit: Yuan Currency: CNY
| Items | As at December 31,2021 | As at December 31,2020 | |
| Monetary funds | 310,812,258.76 | 432,479,722.16 | |
| Settlement provisions | |||
| Lending funds | |||
| Held-for-trading financial assets | 2,391,632.00 | 20,428,616.00 | |
| Derivative financial assets | |||
| Notes receivable | 57,812,297.68 | 80,228,584.59 | |
| Accounts receivable | 630,601,740.67 | 487,189,958.67 | |
| Receivables financing | 82,675,886.76 | 94,794,793.11 | |
| Advances to suppliers | 14,302,242.83 | 16,022,970.18 | |
| Premiums receivable | |||
| Reinsurance accounts receivable | |||
| Reserves for reinsurance contract receivable | |||
| Other receivables | 22,564,580.85 | 29,863,885.12 | |
| Including: Interest receivable | |||
| Dividend receivable | |||
| Financial assets purchased under agreements to resell | |||
| Inventories | 178,193,155.62 | 154,512,208.69 | |
| Contract assets | 13,133,663.80 | 9,821,763.55 | |
| Assets held for sale | |||
| Non-current assets due within one year | |||
| Other current assets | 12,430,684.45 | 8,056,456.66 | |
| Total current assets | 1,324,918,143.42 | 1,333,398,958.73 | |
| Non-current assets: | |||
| Disbursement of loans and advances | |||
| Debt investment | |||
| Other debt investments | |||
| Long-term receivables | |||
| Long-term equity investments | 83,817,327.91 | 39,794,148.03 | |
| Other equity instrument investment | 4,350,000.00 | 600,000.00 | |
| Other non-current financial assets | |||
| Investment properties | |||
| Fixed assets | 804,101,316.51 | 798,935,379.91 | |
| Construction in progress | 147,696,378.50 | 12,589,767.15 | |
| Productive biological assets | |||
| Oil and gas assets | |||
| Right-of-use assets | 31,004,504.23 | ||
| Intangible assets | 183,372,910.73 | 199,183,483.65 | |
| Development expenditures | 8,283,905.12 | ||
| Goodwill | 280,180,513.05 | 280,180,513.05 | |
| Long-term deferred expenses | 7,126,744.84 | 15,299,957.46 | |
| Deferred income tax assets | 12,745,153.99 | 13,991,153.12 | |
| Other non-current assets | 43,877,399.60 | 48,415,754.54 | |
| Total non-current assets | 1,606,556,154.48 | 1,408,990,156.91 | |
| Total assets | 2,931,474,297.90 | 2,742,389,115.64 | |
| Current liabilities: | |||
| Short-term borrowings | 344,353,954.85 | 342,484,860.80 | |
| Borrowings from the Central Bank | |||
| Borrowing funds | |||
| Held-for-trading financial liabilities | |||
| Derivative financial liabilities | |||
| Notes payable | 19,085,011.09 | 28,333,230.21 | |
| Accounts payable | 232,910,068.38 | 226,965,722.65 | |
| Advances from customers | |||
| Contract liabilities | 21,960,749.50 | 27,769,100.54 | |
| Financial assets sold for repurchase | |||
| Deposits from customers and interbank | |||
| Acting trading securities | |||
| Acting underwriting securities | |||
| Payroll payable | 30,827,314.55 | 38,780,379.70 | |
| Tax payable | 14,569,705.01 | 18,361,636.35 | |
| Other payables | 20,172,881.81 | 11,718,151.31 | |
| Including: Interest payable | 49,305.55 | ||
| Dividends payable | |||
| Fees and commissions payable | |||
| Dividend payable for reinsurance | |||
| Liabilities held for sale | |||
| Non-current liabilities due within a year | 3,291,571.22 | ||
| Other current liabilities | 54,352,356.88 | 54,160,084.65 | |
| Total current liabilities | 741,523,613.29 | 748,573,166.21 | |
| Non-current liabilities: | |||
| Reserve fund for insurance contracts | |||
| Long-term borrowings | 50,000,000.00 | ||
| Bonds payable | |||
| Including: preferred stock | |||
| Perpetual bond | |||
| Lease liabilities | 19,985,845.41 | ||
| Long-term payables | |||
| Long-term payroll payable | |||
| Estimated liabilities | |||
| Deferred income | 71,716,919.44 | 75,920,386.03 | |
| Deferred income tax liabilities | 17,407,696.89 | 19,741,032.58 | |
| Other non-current liabilities | |||
| Total non-current liabilities | 159,110,461.74 | 95,661,418.61 | |
| Total liabilities | 900,634,075.03 | 844,234,584.82 | |
| Owners’ equity (or shareholders’ equity): | |||
| Paid-in capital (or share capital) | 725,031,006.00 | 718,994,343.00 | |
| Other equity instruments | |||
| Including: preferred stock | |||
| Perpetual bond | |||
| Capital reserves | 477,168,526.93 | 434,828,330.55 | |
| Less: treasury stock | 7,847,983.94 | 15,681,209.18 | |
| Other comprehensive income | |||
| Special reserves | ||
| Surplus reserves | 100,039,481.14 | 91,006,800.95 |
| General risk preparation | ||
| Undistributed profits | 688,446,262.59 | 592,105,809.35 |
| Total owners' equities attributable to the owners of parent company | 1,982,837,292.72 | 1,821,254,074.67 |
| Minority equity | 48,002,930.15 | 76,900,456.15 |
| Total owners’ equity (or shareholders' equity) | 2,030,840,222.87 | 1,898,154,530.82 |
| Total liabilities and owners’ equity (or shareholders' equity) | 2,931,474,297.90 | 2,742,389,115.64 |
Consolidated Income Statement
January to December in 2021
Unit: Yuan Currency: CNY
| Items | 2021 | 2020 |
| I. Total operating revenue | 1,619,710,842.66 | 1,884,228,703.44 |
| Including: Operating revenue | 1,619,710,842.66 | 1,884,228,703.44 |
| Interest income | ||
| Premiums earned | ||
| Fee and commission income | ||
| II. Total operating cost | 1,387,931,782.21 | 1,429,334,938.02 |
| Including: operating costs | 1,118,367,804.01 | 1,167,101,588.03 |
| Interest expenses | ||
| Fee and commission expense | ||
| Surrender value | ||
| Net amount of compensation payout | ||
| Net reserves for insurance liabilities | ||
| Policy holder dividend expense | ||
| Reinsurance expenses | ||
| Taxes and surcharges | 15,977,645.45 | 19,161,508.44 |
| Selling and distribution expenses | 43,617,359.04 | 48,811,269.44 |
| General and administrative expenses | 107,248,428.48 | 107,164,520.12 |
| Research and development expenditures | 89,510,799.50 | 72,901,869.46 |
| Financial expenses | 13,209,745.73 | 14,194,182.53 |
| Including: interest expenses | 9,896,426.11 | 11,069,698.09 |
| Interest income | 2,879,879.64 | 2,329,029.40 |
| Plus: other incomes | 39,611,932.99 | 19,668,353.70 |
| Income from investment (loss expressed with “-”) | 8,917,050.80 | 7,576,882.93 |
| Including: Income from investment of joint venture and cooperative enterprise | 7,497,374.09 | 7,757,245.82 |
| Income from derecognition of financial assets measured at amortized cost | ||
| Exchange gain (loss expressed with “-”) | ||
| Net exposure hedging gain (loss expressed with “-”) |
| Income from fair value changes (loss expressed with “-”) | -36,984.00 | 1,541,374.19 |
| Credit impairment losses (loss expressed with “-”) | -8,850,016.29 | -14,686,997.60 |
| Assets impairment losses (loss expressed with “-”) | -1,394,658.13 | 651,785.25 |
| Income from disposal of assets (loss expressed with “-”) | -127,483.11 | 747,450.43 |
| III. Operating profits (loss expressed with “-”) | 269,898,902.71 | 470,392,614.32 |
| Plus: non-operating income | 933,194.04 | 979,922.79 |
| Less: non-operating expenditure | 800,342.15 | 714,688.75 |
| IV. Total profits (total loss expressed with “-”) | 270,031,754.60 | 470,657,848.36 |
| Less: income tax expenses | 18,728,984.29 | 76,110,628.24 |
| V. Net profits (net loss expressed with “-”) | 251,302,770.31 | 394,547,220.12 |
| (I) Classified by business continuity | ||
| 1.Net profits from ongoing operation (net loss expressed with “-”) | 251,302,770.31 | 394,547,220.12 |
| 2.Net profits from discontinuing operation (net loss expressed with “-”) | ||
| (II) Classified by ownership | ||
| 1.Net profit attributable to the shareholders of parent company (net loss expressed with “-”) | 249,471,352.03 | 359,677,001.99 |
| 2.Minority interests (net loss expressed with “-”) | 1,831,418.28 | 34,870,218.13 |
| VI. Net of tax of other comprehensive income | ||
| (I) Net amount of after-tax other comprehensive income attributable to the owners of the parent company | ||
| 1. Other comprehensive income that can't be reclassified into profit and loss | ||
| (1) Remeasure the variation of net indebtedness or net asset of defined benefit plan | ||
| (2) Other comprehensive income that can't be reclassified into profit and loss in the invested enterprise under equity method | ||
| (3) Fair value change of other equity instrument investments | ||
| (4) Fair value change of enterprise credit risks | ||
| 2. Other comprehensive income that will be reclassified into profit and loss |
| (1) Other comprehensive income that will be reclassified into profit and loss in the invested enterprise under equity method | ||
| (2) Fair value change of other debt investments | ||
| (3) Amount of financial assets reclassified into other comprehensive income | ||
| (4) Provision for credit impairment of other debt investments | ||
| (5) Cash flow hedging reserve | ||
| (6) Translation reserve | ||
| (7) Others | ||
| (II) Net of tax of other comprehensive income attributable to the minority shareholders | ||
| VII. Total comprehensive income | 251,302,770.31 | 394,547,220.12 |
| (I) Total comprehensive income belonging to parent company | 249,471,352.03 | 359,677,001.99 |
| (II) Total comprehensive income belonging to minority shareholders | 1,831,418.28 | 34,870,218.13 |
| VIII. Earnings per share: | ||
| (I) Basic earnings per share (Yuan/share) | 0.3461 | 0.5037 |
| (II) Diluted earnings per share (Yuan/share) | 0.3438 | 0.4971 |
Consolidated Statement of Cash Flows
January to December in 2021
Unit: Yuan Currency: CNY
| Items | 2021 | 2020 | ||
| I. Cash flow from operating activities: | ||||
| Cash from selling commodities or offering labor | 1,228,519,393.00 | 1,553,552,497.86 | ||
| Net increase of customer deposit and deposit from other banks | ||||
| Net increase of borrowings from central bank | ||||
| Net increase of borrowing funds from other financial institutions | ||||
| Cash from obtaining original insurance contract premium | ||||
| Net cash received from reinsurance business | ||||
| Net increase in the deposits and investment of insured | ||||
| Cash from interest, handling charges and commissions | ||||
| Net increase of borrowing funds | ||||
| Net increase of repurchase of business funds | ||||
| Net cash from acting trading securities | ||||
| Refund of tax and levies | 73,126,199.17 | 40,534,473.79 | ||
| Other cash received related to operating activities | 90,688,737.48 | 69,148,583.57 | ||
| Subtotal cash inflows from operating activities | 1,392,334,329.65 | 1,663,235,555.22 | ||
| Cash paid for goods purchased and services received | 861,091,149.59 | 923,564,877.51 | ||
| Net increase of customer loans and advances | ||||
| Net increase of amount due from central bank and interbank | ||||
| Cash paid for original insurance contract claims payment | ||||
| Net increase of lending funds | ||||
| Cash paid for interest, handling charges and commissions | ||||
| Cash paid for policy dividend | ||||
| Cash paid to and for employees | 185,877,779.40 | 159,745,102.82 | ||
| Taxes and fees paid | 103,397,485.56 | 184,765,044.03 | ||
| Other cash paid related to operating activities | 93,195,236.13 | 103,890,201.60 | ||
| Subtotal cash outflows from operating activities | 1,243,561,650.68 | 1,371,965,225.96 | |
| Net cash flows from operating activities | 148,772,678.97 | 291,270,329.26 | |
| II. Cash flows from investment activities: | |||
| Cash from investment withdrawal | 18,000,000.00 | 274,250,000.00 | |
| Cash from investment income | 1,817,461.59 | 2,242,958.63 | |
| Net cash received from disposal of fixed assets, intangible assets and other long-term assets | 75,610.00 | 956,990.00 | |
| Net cash from disposal of subsidiaries and other business units | |||
| Other cash received related to investment activities | |||
| Subtotal cash inflows from investment activities | 19,893,071.59 | 277,449,948.63 | |
| Cash paid for purchase of fixed assets, intangible assets and other long-term assets | 158,847,282.49 | 94,206,030.10 | |
| Cash paid for investments | 75,775,256.15 | 213,950,000.00 | |
| Net increase in hypothecated loan | |||
| Net cash paid for obtaining subsidiaries and other business units | |||
| Other cash paid related to investment activities | 132,000,000.00 | ||
| Subtotal cash outflows from investment activities | 234,622,538.64 | 440,156,030.10 | |
| Net cash flow from investment activities | -214,729,467.05 | -162,706,081.47 | |
| III. Cash flows from financing activities: | |||
| Cash from absorption of investments | 51,626,545.64 | 37,085,076.08 | |
| Including: cash received from subsidies’ absorption of minority shareholders’ investment | 9,009,500.00 | 1,472,750.00 | |
| Cash received from borrowings | 430,829,000.00 | 473,625,052.72 | |
| Other cash received related to financing activities | 7,847,983.94 | ||
| Subtotal cash inflows from financing activities | 490,303,529.58 | 510,710,128.80 | |
| Cash repayments of amounts borrowed | 376,212,202.72 | 410,984,550.00 | |
| Cash paid for distribution of dividends, profits or interest expenses | 155,390,093.96 | 83,378,630.70 | |
| Including: dividends and profits paid by subsidiaries to minority shareholders | |||
| Other cash paid related to financing activities | 5,027,581.16 | 35,779,935.92 | |
| Subtotal cash outflows from financing activities | 536,629,877.84 | 530,143,116.62 | |
| Net cash flows from financing activities | -46,326,348.26 | -19,432,987.82 | |
| IV. Impact of exchange rate movements on cash and | -1,326,818.37 | -3,446,228.00 | |
| cash equivalents | ||
| V. Net increase of cash and cash equivalents | -113,609,954.71 | 105,685,031.97 |
| Plus: beginning balance of cash and cash equivalents | 416,019,515.53 | 310,334,483.56 |
| VI. Ending balance of cash and cash equivalents | 302,409,560.82 | 416,019,515.53 |