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深华发B:2021年半年度报告(英文版) 下载公告
公告日期:2021-08-24

SEMI-ANNUAL REPORT 2021

深圳中恒华发股份有限公司

SHENZHEN ZHONGHEN HUAFA CO., LTD.

SEMI-ANNUAL REPORT 2021

August 2021

SEMI-ANNUAL REPORT 2021

Section I. Important Notice, Contents and InterpretationBoard of Directors, Supervisory Committee, all directors, supervisors and seniorexecutives of Shenzhen Zhongheng HUAFA Co., Ltd. (hereinafter referred to asthe Company) hereby confirm that there are no any fictitious statements,misleading statements, or important omissions carried in this report, and shalltake all responsibilities, individual and/or joint, for the reality, accuracy andcompletion of the whole contents.Li Zhongqiu, Principal of the Company, Yang Bin, person in charger ofaccounting works and Chuai Guoxu, person in charge of accounting organ(accounting principal) hereby confirm that the Financial Report of 2021Semi-Annual Report is authentic, accurate and complete.All directors are attended the Board Meeting for report deliberation.Concerning the forward-looking statements with future planning involved in theReport, they do not constitute a substantial commitment for investors. Majorityinvestors are advised to exercise caution of investment risks.Risks factors are being well-described in the Report, found more in risks factorsand countermeasures disclosed in Prospects for Future Development of theBoard of Directors’ Report.The Company has no plan of cash dividends carried out, bonus issued andcapitalizing of common reserves either.

SEMI-ANNUAL REPORT 2021

Contents

Section I Important Notice, Contents and Interpretation ...... 2

Section II Company Profile and Main Financial Indexes ...... 6

Section III Management Discussion and Analysis ...... 9

Section IV Corporate Governance ...... 17

Section V Enviornmental and Social Responsibility ...... 18

Section VI Important Matters ...... 19

Section VII Changes in shares and particular about shareholders ...... 33

Section VIII Preferred Stock ...... 38

Section IX Corporate Bonds ...... 39

Section X Financial Report ...... 40

SEMI-ANNUAL REPORT 2021

Documents Available for Reference

I. Text of the Annual Report caring signature of the Chairman;II. Financial statement carrying the signatures and seals of the person in charge of the Company, principal of theaccounting works and person in charge of accounting organ;III. All documents of the Company and manuscripts of public notices that disclosed in the China Securities journal,Securities Times and Hong Kong Commercial Daily designated by CSRC in the report period;IV. Article of AssociationV. Other relevant files.

SEMI-ANNUAL REPORT 2021

Interpretation

ItemsRefers toContents
Company, Shen HUAFARefers toSHENZHEN ZHONGHENG HUAFA CO., LTD.
Hengfa TechnologyRefers toWuhan Hengfa Technology Co., Ltd.
HUAFA PropertyRefers toShenzhen Zhongheng HUAFA Property Co., Ltd
HUAFA LeaseRefers toShenzhen HUAFA Property Lease Management Co., Ltd
Wuhan Zhongheng GroupRefers toWuhan Zhongheng New Science & Technology Industrial Group Co., Ltd
HK YutianRefers toHong Kong Yutian International Investment Co., Ltd.
Hengsheng Photo-electricityRefers toWuhan Hengsheng Photo-electricity Industry Co., Ltd.
Hengsheng YutianRefers toWuhan Hengsheng Yutian Industrial Co., Ltd.
Yutian HenghuaRefers toShenzhen Yutian Henghua Co., Ltd.
HUAFA HengtianRefers toShenzhen HUAFA Hengtian Co., Ltd.
HUAFA HengtaiRefers toShenzhen HUAFA Hengtai Co., Ltd.
Shenzhen VankeRefers toShenzhen Vanke Real Estate Co., Ltd, now renamed as Shenzhen Vanke Development Co., Ltd.
Vanke GuangmingRefers toShenzhen Vanke Guangming Real Estate Development Co., Ltd
V& T Law FirmRefers toShenzhen V& T Law Firm
Zhongheng Semiconductor (former “Huafa Technology ”)Refers toShenzhen Zhongheng Semiconductor Co., Ltd. (former “Zhongheng Huafa Technology Co., Ltd”)

SEMI-ANNUAL REPORT 2021

Section II. Company Profile and Main Financial IndexesI. Company profile

Short form of the stockShen HUAFA A, Shen HUAFA BStock code000020, 200020
Stock exchange for listingShenzhen Stock Exchange
Name of the Company (in Chinese)深圳中恒华发股份有限公司
Short form of the Company (in Chinese) (if applicable)深华发
Foreign name of the Company (if applicable)SHENZHEN ZHONGHENG HUAFA CO., LTD.
Legal representativeLi Zhongqiu

II. Person/Way to contact

Secretary of the BoardRep. of security affairs
NameNiu Zhuo
Contact add.618, 6/F, East Tower, Huafa Building, No.411 Building, Huafa (N) Road, Futian District, Shenzhen
Tel.0755-86360201
Fax.0755-86360201
E-mailhuafainvestor@126.com.cn

III. Others

1. Way of contact

Whether registrations address, offices address and codes as well as website and email of the Company changed in reporting period ornot

□ Applicable √ Not applicable

Registrations address, offices address and codes as well as website and email of the Company has no change in reporting period,found more details in Annual Report 2020.

2. Information disclosure and preparation place

Whether information disclosure and preparation place changed in reporting period or not

□ Applicable √ Not applicable

SEMI-ANNUAL REPORT 2021

The newspaper appointed for information disclosure, website for semi-annual report publish appointed by CSRC and preparationplace for semi-annual report have no change in reporting period, found more details in Annual Report 2020.VI. Main accounting data and financial indexes

Whether it has retroactive adjustment or re-statement on previous accounting data

□ Yes √ No

Current periodSame period of last yearChanges over last year
Operating income(RMB)391,633,808.55300,703,421.3830.24%
Net profit attributable to shareholders of the listed company(RMB)7,023,114.723,165,597.55121.86%
Net profit attributable to shareholders of the listed company after deducting non-recurring gains and losses(RMB)7,067,951.023,167,896.46123.11%
Net cash flow arising from operating activities(RMB)-21,818,369.5921,200,212.24-202.92%
Basic earnings per share(RMB/Share)0.02480.0112121.43%
Diluted earnings per share(RMB/Share)0.02480.0112121.43%
Weighted average ROE2.07%0.96%1.11%
Current period-endperiod-end of last yearChanges over period-end of last year
Total assets(RMB)673,387,235.69627,779,621.067.26%
Net assets attributable to shareholder of listed company(RMB)343,271,852.01336,248,737.292.09%

V. Difference of the accounting data under accounting rules in and out of China

1. Difference of the net profit and net assets disclosed in financial report, under both IAS (InternationalAccounting Standards) and Chinese GAAP (Generally Accepted Accounting Principles)

□ Applicable √ Not applicable

The Company had no difference of the net profit or net assets disclosed in financial report, under either IAS (InternationalAccounting Standards) or Chinese GAAP (Generally Accepted Accounting Principles) in the period.

2. Difference of the net profit and net assets disclosed in financial report, under both foreign accountingrules and Chinese GAAP (Generally Accepted Accounting Principles)

□ Applicable √ Not applicable

The Company had no difference of the net profit or net assets disclosed in financial report, under either foreign accounting rules orChinese GAAP (Generally Accepted Accounting Principles) in the period.

SEMI-ANNUAL REPORT 2021

VI. Items and amounts of extraordinary profit (gains)/loss

√Applicable □ Not applicable

In RMB

ItemAmountNote
Gain/loss of entrusted investment or assets management149,767.58
Other non-operating income and expenditure except for the aforementioned items-194,603.88
Total-44,836.30--

Concerning the extraordinary profit (gain)/loss defined by Q&A Announcement No.1 on Information Disclosure for CompaniesOffering Their Securities to the Public --- Extraordinary Profit/loss, and the items defined as recurring profit (gain)/loss according tothe lists of extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering TheirSecurities to the Public --- Extraordinary Profit/loss, explain reasons

□ Applicable √ Not applicable

In reporting period, the Company has no particular about items defined as recurring profit (gain)/loss according to the lists ofextraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities tothe Public --- Extraordinary Profit/loss

SEMI-ANNUAL REPORT 2021

Section III Management Discussion and AnalysisI. Main businesses of the company in the reporting periodAfter years of development, the company has gradually formed two main businesses in industry and propertymanagement. Among them, the industrial business mainly includes injection molding, polylon (light-weightpackaging materials), and complete machine production and sales of liquid crystal display, property managementbusiness is mainly the lease of its own property.In the first half of 2021, the company achieved operating income of 391,633,800 yuan, up 30.24% year onyear; Operating profit was 8,552,400 yuan, up 115.69% year on year; Net profit was 7.023,100 yuan, up 121.86%year on year. In the first half of the year, the operating income of industrial production was 366,572,800 yuan, up

30.37% year on year; the operating profit was 887,700 yuan, up 189.91% year on year; and the net profit was814,400 yuan, up 198.77% year on year. Property leasing business in the first half of the year achieved operatingincome of 250.61 million yuan, 34.01% more than the same period last year, operating profit of 756.35 millionyuan, 52.7% more than the same period last year, net profit of 6.1079 million yuan, 53.06% more than the sameperiod last year.II. Core competitiveness analysisAll industrial lands of the Company located in Shenzhen were taken into the first batch of plan under 2010Shenzhen urban upgrade planning. In the future, development and operation of self-owned land resources wouldbecome the income source of the Company on a long-term and stable basis.III. Main business analysis

See the “I. Main businesses of the company in the reporting period”

Change of main financial data on a y-o-y basis

In RMB

Current periodSame period of last yeary-o-y changes (+,-)Reasons
Operation income391,633,808.55300,703,421.3830.24%Video incomes increased
Operation cost334,484,096.74263,959,652.6326.72%
Sales expenses14,094,617.969,100,079.3954.88%After-sales service fee increased
Administrative expenses22,680,307.2417,082,362.6632.77%Repair fee increased
Financial cost5,241,702.863,484,228.8150.44%Exchange increased

SEMI-ANNUAL REPORT 2021

Income tax expense1,590,676.66837,369.5889.96%Profit growth
R&D investment3,955,647.502,423,425.2663.23%Increase new products in the Period
Net cash flow arising from operation activities-21,818,369.5921,200,212.24-202.92%The inventory increased in the Period due to the epidemic in the first half year of last year
Net cash flow arising from investment activities-2,316,374.60-1,338,379.56-73.07%Investment for fixed assets increased
Net cash flow arising from financing activities23,182,219.89-34,838,186.71166.54%Bank loans increased in the period
Net increase of cash and cash equivalent-1,355,867.36-14,832,093.81-90.86%The inventory and account receivable increased

Major changes on profit composition or profit resources in reporting period

□ Applicable √ Not applicable

No major changes on profit composition or profit resources occurred in reporting periodConstitution of operation income

In RMB

Current periodSame period of lat yearIncrease/decrease y-o-y(+,-)
AmountRatio in operation incomeAmountRatio in operation income
Total operation income391,633,808.55100%300,703,421.38100%30.24%
According to industries
Display198,422,034.9150.67%163,278,927.4548.63%4.21%
Plastic injection hardware106,953,726.7427.31%85,278,752.4228.36%-3.22%
Foam parts22,259,297.795.68%19,908,274.026.62%-0.94%
Property leasing25,060,998.646.40%18,701,335.826.22%0.18%
Scrap income38,492,780.649.83%12,121,666.694.03%5.80%
Utilities and others444,969.830.11%1,414,464.980.47%-0.36%
According to products
Display198,422,034.9150.67%163,278,927.4548.63%4.21%
Plastic injection106,953,726.7427.31%85,278,752.4228.36%-3.22%

SEMI-ANNUAL REPORT 2021

hardware
Foam parts22,259,297.795.68%19,908,274.026.62%-0.94%
Property leasing25,060,998.646.40%18,701,335.826.22%0.18%
Scrap income38,492,780.649.83%12,121,666.694.03%5.80%
Utilities and others444,969.830.11%1,414,464.980.47%-0.36%
According to region
Hong Kong and Taiwan95,569,502.3822.37%105,186,479.3434.98%-12.61%
Central China203,317,499.6051.92%136,683,631.6545.45%6.67%
East China87,594,449.1522.37%39,318,383.6613.08%9.29%
South China5,152,357.421.32%19,514,926.736.49%-5.17%

The industries, products, or regions accounting for over 10% of the company’s operating revenue or operating profit

√Applicable □ Not applicable

In RMB

Operation incomeOperation costGross profit ratioIncrease/decrease of operation income y-o-yIncrease/decrease of operation cost y-o-yIncrease/decrease of gross profit ratio y-o-y
According to industries
Display198,422,034.91182,038,564.148.26%22.00%19.00%1.69%
Plastic injection hardware106,953,726.7496,354,708.779.91%25.00%22.00%2.25%
According to products
Display198,422,034.91182,038,564.148.26%22.00%19.00%1.69%
Plastic injection hardware106,953,726.7496,354,708.779.91%25.00%19.00%2.25%
According to region
Hong Kong and Taiwan95,746,383.9279,562,859.8816.90%-8.97%-19.29%10.62%
Central China207,413,929.85194,921,928.056.02%67.15%70.48%-1.84%
East China87,594,449.1580,998,643.407.53%122.78%120.08%1.14%
South China5,152,357.426,030,530.61-17.04%-72.26%195.58%-106.06%

Under circumstances of adjustment in reporting period for statistic scope of main business data, adjusted main business based onlatest one year’s scope of period-end

SEMI-ANNUAL REPORT 2021

□ Applicable √ Not applicable

Reasons for y-o-y relevant data with over 30% changes

√Applicable □Not applicable

Item2021-6-302021-1-1Y-o-y changes (+,-)Causes
Note receivable491,683.7820,240,464.79-98%Discounting of note receivable increased in the period
Receivable financing5,774,948.6910,057,385.11-43%Discounting of note receivable increased in the period
Other account receivable22,540,779.204,466,949.96405%Current accounts increased
Inventory129,917,660.5170,166,013.4985%Inventory has significantly increased from Hengfa
Other current assets741,380.214,255,643.19-83%The input tax to be deducted declined
Long-term deferred expenses623,601.5977,445.31705%Contract renewal of SAP
Short-term loans51,089,579.0012,527,808.00308%Loans of Hengfa increased
Contractual liabilities765,555.97287,140.66167%Account received in advance increased
Wages payable3,886,717.295,737,366.59-32%Last year’s year-end bonus distributed
Interest payable179,523.7226,335.66582%Loans increased
Other current liability211,799.1318,322,972.81-99%Notes already endorsed and outstanding declined
ItemJan.- Jun. 2021Jan.- Jun. 2020Y-o-y changes (+,-)Causes
Operation tax and surcharge1,428,361.921,004,056.0542%Additional tax increased
Interest income189,945.5511,856.691502%Loan subsidies
Other income3,553.35348,540.00-99%Government subsidy
Investment income149,767.5866,780.40124%Wealth management income

SEMI-ANNUAL REPORT 2021

Non-operation revenue276,599.0445,200.06512%Government subsidy
Non-operation expense215,202.927,302.382847%Penalty expenses

IV. Analysis of the non-main business

√Applicable □Not applicable

In RMB

AmountRatio in total profitDescription of formationWhether be sustainable (Y/N)
Investment income149,767.581.74%Interest settlementY
Asset impairment1,350,000.0015.67%Inventory reduction provisionN
Non-operation revenue276,599.043.21%Government subsidyN
Non-operation expense215,202.922.50%PenaltyN

V. Assets and liability analysis

1. Major changes of assets composition

In RMB

End of the current periodEnd of last yearRatio changesNotes of major changes
AmountRatio in total assetsAmountRatio in total assets
Monetary fund59,612,186.228.85%60,968,053.589.71%-0.86%
Account receivable135,750,939.5920.16%128,063,911.7920.40%-0.24%
Inventory129,917,660.5119.29%70,166,013.4911.18%8.11%Inventory from Hengfa increased
Investment real estate46,360,497.136.88%47,224,662.277.52%-0.64%
Fixed assets191,477,026.0828.43%193,605,444.5330.84%-2.41%
Construction in process740,000.000.11%740,000.000.12%-0.01%
Short-term51,089,579.007.59%12,527,808.002.00%5.59%Loans increased in the period

SEMI-ANNUAL REPORT 2021

loans
Contractual liabilities765,555.970.11%287,140.660.05%0.06%
Long-term loans61,000,000.009.06%61,000,000.009.72%-0.66%

2. Major foreign assets

□ Applicable √ Not applicable

3. Assets and liability measured by fair value

□ Applicable √ Not applicable

4. Assets right restriction till end of reporting period

Monetary fund42,990,989.02Security deposit
Fixed assets12,375,571.51Collateral for borrowing
Intangible assets6,752,967.68Collateral for borrowing
Disposal of fixed assets92,857,471.69Court seizure
Investment real estate11,503,400.02Collateral for borrowing
Total166,480,399.92

VI. Investment analysis

1. Overall situation

□ Applicable √ Not applicable

2. The major equity investment obtained in the reporting period

□ Applicable √ Not applicable

3. The major non-equity investment doing in the reporting period

□ Applicable √ Not applicable

4. Financial assets investment

(1) Securities investment

□ Applicable √ Not applicable

The Company has no securities investment in the Period.

SEMI-ANNUAL REPORT 2021

(2) Derivative investment

□ Applicable √ Not applicable

The Company has no derivatives investment in the Period.VII. Sales of major assets and equity

1. Sales of major assets

□ Applicable √ Not applicable

The Company had no sales of major assets in the reporting period.

2. Sales of major equity

□ Applicable √ Not applicable

VIII. Analysis of main holding company and stock-jointly companies

√Applicable □ Not applicable

Particular about main subsidiaries and stock-jointly companies net profit over 10%

In RMB

Company nameTypeMain businessRegister capitalTotal assetsNet assetsOperating revenueOperating profitNet profit
Hengfa Technology CompanySubsidiaryR&D, production and sales of the products as well as export business181,643,111.00517,551,000.92227,012,996.37366,572,809.91887,707.92813,963.14
HUAFA Property CompanySubsidiaryLeasing and management of own property1,000,000.006,324,584.38421,786.502,914,794.331,253,727.861,043,626.48

Particular about subsidiaries obtained or disposed in report period

□Applicable √ Not applicable

Explanation of main holding company and stock-jointly companiesNil

SEMI-ANNUAL REPORT 2021

IX. Structured vehicle controlled by the Company

□ Applicable √Not applicable

X. Risks and countermeasures

(1) Business analysis

Wuhan Hengfa Technology, as an important subsidiary of the company, is faced with increasing pressure under theinfluence of intensifying market competition and tight supply of raw and auxiliary materials and other factors, thekey to solve the dilemma is to upgrade technology, enhance the added value of technology, and improveprofitability; In the context of downstream consumer demand upgrading, it improves production efficiency byincreasing the research and development of new products, adjusting and improving the product structure, andimproving the production process; At the same time, it expands upstream supply channels of raw and auxiliarymaterials to avoid material shortage affecting production.

For a certain period of time, property leasing is still another important business for the development of thecompany. Making full use of the self-owned property to provide operation, leasing and service businesses willbring a certain contribution to the company's cash flow. After the gradual implementation of the urban renewalproject, it will bring long-term and stable sources of income for the company.

(2) Business plan

◆Industrial Business UpgradeThe epidemic of COVID-19 is not over yet, and all colleagues in the company continued to work hard to serveexisting customers, vigorously expanded the market, and gained more market share; Meanwhile, the Companywill intensify the development of raw & auxiliary materials suppliers in shortage within the market, try to avoidthe negative impact of upstream material shortage on the Company’s production. On the basis of maintainingcustomers, actively looked for high-quality technology projects in consumer electronics, and gradually realizedindustrial upgrading through technology optimization and management optimization; at the same time, itstrengthened management, improved production efficiency, improved product quality, and made full use of thegeographical advantages of the company to make the business bigger and stronger.

◆Promote the urban renewal projectSpeed up the promotion of renewal unit project of Huafa District, Gongming Street, Guangming New District,Shenzhen and the renewal project renovation progress of Huafa Building, Huaqiang North Street, Futian District,Shenzhen, accelerate the settlement of project procedures, and strive to make stage progress as early as possible.◆Continue to focus on strengthening the company’s internal controlIn 2021, the company will further optimize the corporate governance structure and improve the internal controlsystem and process and strictly implement and improve the executive ability of relevant system in accordance

SEMI-ANNUAL REPORT 2021

with the governance requirements of listed companies, the company’s management and relevant departments willexecute the administrative provisions for approval procedures of fund utilizing, management system of relatedtransactions, working system of internal audit, internal reporting system of major information in strict accordancewith the requirements of internal control documents.

SEMI-ANNUAL REPORT 2021

Section IV Corporate GovernanceI. In the report period, the Company held annual general meeting and extraordinaryshareholders’ general meeting

1. Shareholders’ General Meeting in the report period

Session of meetingTypeRatio of investor participationDateDate of disclosureResolutions
Annual General Meeting of 2020AGM48.98%20 May 202121 May 2021Juchao Website(http://www.cninfo.com.cn/new/disclosure/detail?plate=szse&orgId=gssz0000020&stockCode=000020&announcementId=1207845176&announcementTime=2020-05-22)

2. Request for extraordinary general meeting by preferred stockholders whose voting rights restore

□ Applicable √ Not applicable

II. Changes of directors, supervisors and senior executives

□ Applicable √ Not applicable

Directors, supervisors and senior executives of the Company has no changes during the reporting period, found more in the AnnualReport of 2020.III. Profit distribution plan and capitalizing of common reserves plan for the Period

□ Applicable √ Not applicable

The Company has no plans of cash dividend distributed, no bonus shares and has no share converted from capital reserve either forthe midterm.

IV. Implementation of the company’s stock incentive plan, employee stock ownership plan orother employee incentives

□ Applicable √ Not applicable

The Company had no stock incentive plan, employee stock ownership plan or other employee incentive in the reporting period.

SEMI-ANNUAL REPORT 2021

Section V. Environmental and Social ResponsibilityI. Important environmental issuesThe listed Company and its subsidiary whether belongs to the key sewage units released from environmental protection department

□ Yes √No

Administrative penalties imposed for environmental issues during the reporting period

The company or subsidiaryReasons for penaltyViolationsPenalty resultsImpact on the production & operation of listed companyCorrective measures
N/AN/AN/AN/AN/AN/A

Other environmental information disclosed with reference to the key emission unitsN/AReasons for not disclosed other environmental informationN/A

II. Social responsibilityNot applicable

SEMI-ANNUAL REPORT 2021

Section VI. Important Matters

I. Commitments that the actual controller, shareholders, related party, offeror and committed party as theCompany etc. have fulfilled during the reporting period and have not yet fulfilled by the end of reportingperiod

□Applicable √Not applicable

During the reporting period of the company, there are no commitments made by the actual controller, shareholders, related parties,purchasers and the company that have been completed in the reporting period or have not been completed by the end of the reportingperiod.II. Non-operational fund occupation from controlling shareholders and its related party

□ Applicable √ Not applicable

No non-operational fund occupation from controlling shareholders and its related party in period.

III. Guarantee outside against the regulation

□Applicable √Not applicable

No guarantee outside against the regulation in Period.IV. Appointment and non-reappointment (dismissal) of CPAWhether the financial report has been audited or not

□Yes √no

The company's semi-annual report has not been audited.V. Explanation from Board of Directors and Supervisory Committee for “Qualified Opinion”that issued by CPA

□ Applicable √Not applicable

VI. Explanation from the Board for “Qualified Opinion” of last year’s

□ Applicable √Not applicable

VII. Bankruptcy reorganization

□ Applicable √Not applicable

No bankruptcy reorganization for the Company in reporting period

SEMI-ANNUAL REPORT 2021

VIII. LawsuitsSignificant lawsuits and arbitration

√Applicable □Not applicable

The basic situation of litigation (Arbitration)Amount of money involved (in 10 thousand Yuan)Predicted liabilities (Y/N)Advances in litigation (Arbitration)The results and effects of litigation (Arbitration)Execution of the litigation (Arbitration)Disclosure dateDisclosure index
In September 2016, Wuhan Zhongheng Group Co., Ltd. and the Company and Shenzhen Vanke were applied for arbitration due to the dispute case of “Contract for the Cooperative Operation of the Old Projects at Huafa Industrial Park, Gongming Street, Guangming New District”.46,460NoRuling on 16 August 2017; put forward the application for dismantling by the Company and controlling shareholder, the application was rejected by the courtFound more in announcement of the CompanyIn September 2018, Shenzhen Vanke applied for compulsory execution. In October 2019, due to the outsider's application of "objection to execution" and "non-enforcement", the execution procedure was terminated. If the outsider's application was rejected by the Shenzhen Intermediate People’s Court, Shenzhen Vanke would have the right to continue to apply for the resumption of compulsory execution.2018-02-09http://www.cninfo.com.cn/cninfo-new/disclosure/szse_main/bulletin_detail/true/1204406606?announceTime=2018-02-09 ;http://www.cninfo.com.cn/new/disclosure/detail?plate=szse&stockCode=000020&announcementId=1205326846&announcementTime=2018-08-25
In March 2016, the Company and HUAFA Property suit947.26NoThe second trial decides the Company wins theExecution completedExecution completed in March 20212016-09-14http://www.cninfo.com.cn/cninfo-new/disclosure/szse_main/bulletin_detail/true/1202702423?announceTime=20

SEMI-ANNUAL REPORT 2021

against Shenzhen Huayongxing Environmental Technology Co., Ltd., and Shenzhen Yidaxin Technology Co., Ltd. for contract violation and refuse to move the sitelawsuit on 15 March 2018, and has applied for enforcement16-09-14 07:41
Application for arbitration in case of contract dispute between the V&T (Shenzhen) Law Firm and Shenzhen Zhongheng Huafa Co., Ltd. and Wuhan Zhongheng Group1,940.2NoArbitration has been heard for adjudicationA decision was issued and the Company’s motion to dismiss was denied.Under implementation2018-11-14http://www.cninfo.com.cn/new/disclosure/detail?plate=szse&stockCode=000020&announcementId=1205602053&announcementTime=2018-11-14
Shenzhen Zhongheng Huafa Semiconductor Co., Ltd bring a suit against Shenzhen Zhongheng Huafa Co.,5,200NoThe judgment (2020) Yue 03 Min Chu No.17 was issued in May 2021, all claims of Semiconductor CompanySemiconductor Company has filed an appealTrial in progress2021-06-03http://www.cninfo.com.cn/new/disclosure/detail?stockCode=000020&announcementId=1210151395&orgId=gssz0000020&announcementTime=2021-06-03

SEMI-ANNUAL REPORT 2021

Ltd for the ownership transfer, performance of asset replacement contract and compensationwere rejected

Other lawsuits

□Applicable √ Not applicable

IX. Penalty and rectification

□Applicable √ Not applicable

The Company has no penalty and rectification in the periodX. Integrity of the company and its controlling shareholders and actual controllers

□ Applicable √Not applicable

XI. Major related transaction

1. Related transaction with routine operation concerned

√Applicable □ Not applicable

Related partyRelationshipType of related transactionContent of related transactionPricing principleRelated transaction priceRelated transaction amount (in 10 thousand Yuan)Proportion in similar transactionsTrading limit approved (in 10 thousand Yuan)Whether over the approved limited or not (Y/N)Clearing form for related transactionAvailable similar market priceDate of disclosureIndex of disclosure
HKUndePurchasPurchaSynchroniz3,773,77515,69NTeleThe average

SEMI-ANNUAL REPORT 2021

Yutianr the same controle of raw materials from related partiessing LCD monitorsed with the market5.18.187.92graphic transfermarket price refers to the price of same specifications which is searched from through the world famous professional market survey company website http://www.witsview.com recognized authority in the industry and LCD professional market survey company website http://www.witsview.com
Hengsheng Photo-electricityUnder the same controlPurchase of raw materials from related partiesPurchasing LCD monitorsIn principle, the transaction price of purchased raw materials is determined at approximately 1% lower than the prevailing average market price, with reference to the respective bargaining power of both parties.5,066.055,066.0513,081.6NTelegraphic transferDitto

SEMI-ANNUAL REPORT 2021

Hengsheng Photo-electricityUnder the same controlPurchase of finished goods from related partiesPurchase of LCD displayBase on the customer purchase order price and reduce 1 yuan per unit as operation fee984.89984.896,540.8NTelegraphic transferDitto
HK YutianUnder the same controlSales of products to related partiesSales of LCD displayDetermined on the basis of the customer’s sales order price6,210.036,210.0319,622.4NTelegraphic transferDitto
Hengsheng Photo-electricityUnder the same controlSales of products to related partiesSales of LCD displayDetermined on the basis of the customer’s sales order price1,561.221,561.226,540.8NTelegraphic transferDitto
Hengsheng Photo-electricityUnder the same controlSales of products to related partiesRelevant products of LCD display, plastic injection hardwareDetermined on the basis of the customer’s sales order price126.07126.07654.08NTelegraphic transferDitto
Hengsheng Photo-electricityUnder the same controlSales of products to related partiesLCD glassDetermined on the basis of the customer’s sales order price44.6944.69457.86NTelegraphic transferDitto
Total----17,76--62,59----------

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8.135.46
Detail of sales return with major amount involvedN/A
Report the actual implementation of the daily related transactions which were projected about their total amount by types during the reporting period(if applicable)In the reporting, Hengfa Technology purchased LCD monitors from HK Yutian with US $ 5.6445 million approximately, 23.52% of the annual amount predicted at the beginning of the year; purchased LCD monitor from Hengsheng Photo-electricity with US $ 6.9138 million approximately, 34.57% of the annual amount predicted at the beginning of the year; purchasing LCD Display from Hengsheng Photo-electricity with about US$ 1.339 million, 13.39% of the annual amount predicted at the beginning of the year; sold LCD Display whole machine to HK Yutian with US$ 9.5462 million approximately, 31.82% of the annual amount predicted at the beginning of the year; sold LCD display to Hengsheng Photo-electricity with about US$ 1.4541 million, 14.54% of the annual amount predicted at the beginning of the year; and sold LCD glass to Hengsheng Photo-electricity with about US$ 68100, 9.73% of the annual amount predicted at the beginning of the year
Reasons for major differences between trading price and market reference priceN/A

2. Related transactions by assets acquisition and sold

□Applicable √Not applicable

No above mentioned transactions occurred

3. Main related transactions of mutual investment outside

□ Applicable √ Not applicable

No main related transactions of mutual investment outside for the Company in reporting period.

4. Contact of related credit and debt

□ Applicable √ Not applicable

No contact of related credit and debt during the reporting period.

5. Contact with the related finance companies and finance companies that controlled by the Company

□ Applicable √ Not applicable

There are no deposits, loans, credits or other financial business between the Company and the finance companies with relatedrelationships or between the finance companies controlled by the Company and related parties

6. Other significant related transactions

□ Applicable √ Not applicable

The company had no other significant related transactions in reporting period.

SEMI-ANNUAL REPORT 2021

XII. Significant contract and implementations

1. Trusteeship, contract and leasing

(1) Trusteeship

□ Applicable √ Not applicable

No trusteeship for the Company in reporting period.

(2) Contract

□ Applicable √ Not applicable

No contract for the Company in reporting period.

(3) Leasing

□ Applicable √ Not applicable

No leasing for the Company in reporting period.

2. Major guarantees

√Applicable □ Not applicable

In 10 thousand Yuan

Particulars about the external guarantee of the Company (Barring the guarantee for subsidiaries)
Name of the Company guaranteedRelated Announcement disclosure dateGuarantee limitActual date of happeningActual guarantee limitGuarantee typeCollateral (if any)Counter guarantee(if any)Guarantee termImplemented (Y/N)Guarantee for related party (Y/N)
Guarantee of the Company and the subsidiaries
Name of the Company guaranteedRelated Announcement disclosure dateGuarantee limitActual date of happeningActual guarantee limitGuarantee typeCollateral (if any)Counter guarantee(if any)Guarantee termImplemented (Y/N)Guarantee for related party (Y/N)
Wuhan Hengfa Technology Co., Ltd.2021-04-2730,000Joint and several liability guarantee1 yearNY
Total amount of approving guarantee30,000Total amount of actual occurred guarantee for3,480.09

SEMI-ANNUAL REPORT 2021

for subsidiaries in report period (B1)subsidiaries in report period (B2)
Total amount of approved guarantee for subsidiaries at the end of reporting period (B3)30,000Total balance of actual guarantee for subsidiaries at the end of reporting period (B4)2,788.96
Guarantee of the subsidiaries for the subsidiaries
Name of the Company guaranteedRelated Announcement disclosure dateGuarantee limitActual date of happeningActual guarantee limitGuarantee typeCollateral (if any)Counter guarantee(if any)Guarantee termComplete implementation or notGuarantee for related party
Total amount of guarantee of the Company (total of three above mentioned guarantee)
Total amount of approving guarantee in report period (A1+B1+C1)30,000Total amount of actual occurred guarantee in report period (A2+B2+C3)3,480.09
Total amount of approved guarantee at the end of report period (A3+B3+C2)30,000Total balance of actual guarantee at the end of report period (A4+B4+C4)2,788.96
The proportion of the total amount of actually guarantee in the net assets of the Company (that is A4+ B4+C4)8.12%
Including:

Explanation on compound guarantee

3.Trust financing

□Applicable √Not applicable

No trust financing occurred in the reporting period

4.Material contracts for daily operations

□ Applicable √ Not applicable

5. Other material contracts

□ Applicable √ Not applicable

No other material contracts for the Company in reporting period.

SEMI-ANNUAL REPORT 2021

XIII. Explanation on other significant events

√ Applicable □ Not applicable

(i) The Company signed Asset Exchange Contract with Wuhan Zhongheng New Science & Technology IndustrialGroup Co., Ltd (hereinafter referred to as Wuhan Zhongheng Group) on 29 April 2009 (details were referred to inthe announcement dated 30 April 2009), and pursuant to the contract, since part of the assets of the Company(namely two parcel of industrial lands located at Huafa road, Gongming town, Guangming new district, Shenzhen(the property certificate No. were SFDZ No.7226760 and SFDZ No.7226763, No. of parcels were A627-005andA627-007, and the aggregate area was 48,200 sq.m) were the lands listed in the first batch of plan for 2010Shenzhen urbanization unit planning preparation plan. For promotion of such urbanization project and jointcooperation, the Company has not completed the transfer procedures in respect of the aforesaid land.

The Company convoked the first extraordinary meeting of the Board in 2015 on February 16, 2015 and the firstextraordinary general meeting of the Board in 2015 on March 4, 2015, which considered and approved the“Motion on promoting and implementing the urban renewal project for the renewal units of Huafa area atGongming street, Guangming new district, Shenzhen”, specified that the Company and Wuhan Zhongheng Groupshall obtain the corresponding compensatory consideration for removal from the respectively owned project plotsand the respectively contributed and constructed above-ground buildings before the land development, it isestimated that the compensatory consideration obtained by the Company accounts for 50.5% of the totalconsideration and Wuhan Zhongheng Group accounts for 49.5% by calculation.

The sixth extraordinary meeting of the board of directors in 2015 and the third extraordinary general meeting of2015 have considered and adopted the “Proposal on the project promotion and implementation of urban renewaland the progress of related transactions of ‘the updated units at Huafa Area, Gong Ming Street, Guangming NewDistrict, Shenzhen’”, the company has signed the “Agreement on the cooperation of urban renewal project of theupdated units at Huafa Area, Gong Ming Street, Guangming New District, Shenzhen”, “Contract for thecooperative venture of reconstruction project for Huafa Industrial Park, Gong Ming Street, Guangming NewDistrict” on 26 August 2015, and “Agreement on housing acquisition and removal compensation and resettlement”with Wuhan Wuhan Zhongheng Group, Shenzhen Vanke Real Estate Co., Ltd. (hereinafter referred to as“Shenzhen Vanke”), and Shenzhen Vanke Guangming Real Estate Development Co., Ltd. (hereinafter referred toas “Vanke Guangming”).

On 12 September 2016, Shenzhen Vanke applied for arbitration in respect of “Agreement on the cooperation ofurban renewal project of the updated units at Huafa Area, Gong Ming Street, Guangming New District, Shenzhen”against the Company and Wuhan Zhongheng Group. Shenzhen Court of International Arbitration (SCIA) hasgiven a ruling in August 2017. On August 29, 2018, the court accepted the compulsory execution application ofShenzhen Vanke. In October 2019, as a number of outsiders filed an “execution objection” and applied for “noexecution” to Shenzhen Intermediate People’s Court, the Shenzhen Intermediate People’s Court ruled to terminatethe enforcement procedure on March 20, 2020. If the “execution objection” and “no execution” proposed by

SEMI-ANNUAL REPORT 2021

outsiders are rejected according to law, Shenzhen Vanke may continue to apply to the Shenzhen IntermediatePeople’s Court to resume execution. In April 2020, Zhongheng Semiconductor sued the company to ShenzhenIntermediate People’s Court, and requested the company to transfer the above mentioned two pieces of lands andcompensate the economic loss of 52 million yuan, the company received the first trial verdict in the case in May2021. and the company appealed to the supreme people’s court against the judgment, which has not yet enteredinto force. Progress of the case found more in the Notices released on Juchao website dated 14 Sept. 2016, 1 Nov.2016, 16 Nov. 2016, on 18 Feb. 2017, 24 March 2017, 25 April 2017, 1 July 2017, 18 August 2017, 9 Feb. 2018,25 Aug. 2018, 7 Sept. 2018, 21 Apr. 2020, 3 Jun, 2021 and 22 Jul. 2021 respectively.

(ii) On 31 December 2015, the 88,750,047 shares held by Wuhan Zhongheng Group, are pledge to ChinaMerchants Securities Assets Co., Ltd. with due date of 31 December 2016. On 1 Feb. 2016, Wuhan ZhonghengGroup pledge the 27,349,953 shares held to China Merchants Securities Assets Co., Ltd. with due date of 31December 2016. The above-mentioned pledged shares are deferred by Wuhan Zhongheng Group; pledge expiredon 31 December 2017. The trading day for repurchase put off to the date when pledge actually removed. Till endof this period released, controlling shareholder still not removed the pledge and the Company has apply by letter,relevant Notice of Presentment on Stock Pledge from Controlling Shareholder was released. Found more in noticereleased on Juchao website date 2 Feb. 2018.

(iii) The controlling shareholder Wuhan Zhongheng Group holds 119,289,894 shares of the Company’ stock,accounting for 42.13% of the total share capital of the Company, of which 116,489,894 shares were judicially frozenby Shenzhen Intermediate People's Court (hereinafter referred to as "Shenzhen Intermediate Court") on September27, 2016, which were frozen again by the Shenzhen Intermediate People's Court on December 14, 2018, with afrozen period of 36 months; the remaining 2,800,000 shares were frozen by the Shenzhen Intermediate People'sCourt on May 29, 2019, and were frozen again by the Higher People’s Court of Guangdong Province on July 5,2019. For details, please refer to the company’s announcements published on Juchao Website dated October 27,2016, January 11, 2019, May 31, 2019 and August 7, 2019.

(iv)Wuhan Zhongheng Group received the first-instance judgment of Guangdong Higher People’s Court to the“pledged securities repurchase dispute” case sued by China Merchants Securities Asset Management Co., Ltd. inMarch 2021. Wuhan Zhongheng Group refused to accept the judgment and has appealed to the Supreme People'sCourt, the judgment of first instance has not yet taken effect. For details, please refer to the companyannouncement (“progress of the major litigation and arbitration cases of the controlling shareholder”)issued by thecompany on www.cninfo.com.cn on March 19, 2021.

(v) On September 29, 2016, the company and its controlling shareholder, Wuhan Zhongheng Group, signed the“Agency Contract” with V&T Law Firm. On October 8, 2016, the three parties also signed the “SupplementalAgreement for Agency Contract”, it was agreed that V&T acted as an agent for the company and WuhanZhongheng Group to deal with the arbitration case with Shenzhen Vanke. After losing the lawsuit, due to

SEMI-ANNUAL REPORT 2021

differences in the payment of attorney fees, V&T sued our company and Wuhan Zhongheng Group to theShenzhen Court of International Arbitration, and applied to the court to seize a bank account under our company’sname and part of our company dormitories, please refer to “Other Announcements on the Progress InvolvingLitigation and Arbitration” (Announcement Numbers: 2018-43, 2019-02) released on Juchao Website datedNovember 14, 2018 and March 6, 2019. The Shenzhen Court of International Arbitration ruled that the companyand Wuhan Zhongheng Group paid the corresponding fees. The loss of the arbitrament in this case was borne byWuhan Zhongheng Group in whole, and found more on “Other Announcements on the Progress InvolvingLitigation and Arbitration” (Announcement No.: 2019-34) released on Juchao Website dated November 25, 2019.

XIV. Significant event of subsidiary of the Company

□ Applicable √Not applicable

SEMI-ANNUAL REPORT 2021

Section VII. Changes in Shares and Particulars about Shareholders

I. Changes in Share Capital

1. Changes in Share Capital

In Share

Before the ChangeIncrease/Decrease in the Change (+, -)After the Change
AmountProportionNew shares issuedBonus sharesPublic reserve transfer into share capitalOthersSubtotalAmountProportion
I. Restricted shares00.00%0000000.00%
1. State-owned shares
2. State-owned legal person’s shares
3. Other domestic shares
Including: Domestic legal person’s shares
Domestic natural person’s shares
4. Foreign shares
Including: Foreign legal person’s shares
Foreign natural person’s shares
II. Unrestricted shares283,161,227100.00%00000283,161,227100.00%
1. RMB ordinary shares181,165,39163.98%00000181,165,39163.98%
2. Domestically listed foreign shares101,995,83636.02%00000101,995,83636.02%
3. Overseas listed foreign shares
4. Others
III. Total shares283,161,227100.00%00000283,161,227100.00%

Reasons for share changed

□ Applicable √ Not applicable

SEMI-ANNUAL REPORT 2021

Approval of share changed

□ Applicable √ Not applicable

Ownership transfer of share changed

□ Applicable √ Not applicable

Progress of shares buy-back

□ Applicable √ Not applicable

Implementation progress of reducing holdings of shares buy-back by centralized bidding

□ Applicable √ Not applicable

Influence on the basic EPS and diluted EPS as well as other financial indexes of net assets per share attributable to commonshareholders of Company in latest year and period

□ Applicable √ Not applicable

Other information necessary to disclose or need to disclosed under requirement from security regulators

□ Applicable √ Not applicable

2. Changes of lock-up stocks

□ Applicable √ Not applicable

II. Securities issuance and listing

□ Applicable √ Not applicable

III. Amount of shareholders of the Company and particulars about shares holding

In Share

Total common stock shareholders in reporting period-end20,986Total preference shareholders with voting rights recovered at end of reporting period (if applicable) (see note 8)0
Particulars about common shares held above 5% by shareholders or top ten common shareholders
Full name of ShareholdersNature of shareholderProportion of shares heldAmount of common shares held at the end of reporting periodChanges in report periodAmount of restricted common shares heldAmount of common shares held without restrictionInformation of shares pledged, tagged or frozen
State of shareAmount
Wuhan Zhongheng GroupDomestic non-state-owned legal person42.13%119,289,89400119,289,894Pledged116,100,000
Frozen119,289,894

SEMI-ANNUAL REPORT 2021

SEG (HONG KONG) CO., LTD.Overseas legal person5.85%16,569,5600016,569,560Pledged0
Frozen0
GOOD HOPE CORNER INVESTMENTS LTD.Overseas legal person2.50%7,072,000007,072,000Pledged0
Frozen0
Changjiang Securities Brokerage (Hong Kong) Co., Ltd.Overseas legal person1.89%5,355,249005,355,249Pledged0
Frozen0
Guoyuan Securities Brokerage (Hong Kong) LimitedOverseas legal person1.37%3,870,117003,870,117Pledged0
Frozen0
Li ZhongqiuOverseas nature person1.00%2,830,000002,830,000Pledged0
Frozen0
China Merchants Securities Hong Kong Co., Ltd.State-owned legal person0.85%2,394,018002,394,018Pledged0
Frozen0
Li WeiDomestic nature person0.58%1,638,100001,638,100Pledged0
Frozen0
Xu XinfenDomestic nature person0.56%1,585,300001,585,300Pledged0
Frozen0
LI SHERYN ZHAN MINGDomestic nature person0.51%1,446,100001,446,100Pledged0
Frozen0
Strategy investor or general legal person becoming the top 10 common shareholders by placing new shares (if applicable) (see note 3)N/A
Explanation on associated relationship among the aforesaid shareholdersAmong the top ten shareholders, Li Zhongqiu is the actual controller of Wuhan Zhongheng New Technology Industry Group Co., LTD., and belongs to a man of concerted action. It is not known whether other shareholders of the company are related to each other, or whether they belong to

SEMI-ANNUAL REPORT 2021

the concerted action stipulated in the "Management Measures for Disclosure of Information about Changes in Shareholders' Shareholding of Listed Companies".
Description of the above shareholders in relation to delegate/entrusted voting rights and abstention from voting rights.N/A
Special note on the repurchase account among the top 10 shareholders (if applicable) (see note 11)N/A
Particular about top ten shareholders with un-lock up common stocks held
Shareholders’ nameAmount of common shares held without restriction at Period-endType of shares
TypeAmount
Wuhan Zhongheng Group119,289,894RMB common share119,289,894
SEG (HONG KONG) CO., LTD.16,569,560Domestically listed foreign shares16,569,560
GOOD HOPE CORNER INVESTMENTS LTD.7,072,000Domestically listed foreign shares7,072,000
Changjiang Securities Brokerage (Hong Kong) Co., Ltd.5,355,249Domestically listed foreign shares5,355,249
Guoyuan Securities Brokerage (Hong Kong) Limited3,870,117Domestically listed foreign shares3,870,117
Li Zhongqiu2,830,000Domestically listed foreign shares2,830,000
China Merchants Securities Hong Kong Co., Ltd.2,394,018Domestically listed foreign shares2,394,018
Li Wei1,638,100Domestically listed foreign shares1,638,100
Xu Xinfen1,585,300RMB common share1,585,300
LI SHERYN ZHAN MING1,446,100Domestically1,446,100

SEMI-ANNUAL REPORT 2021

listed foreign shares
Expiation on associated relationship or consistent actors within the top 10 un-lock up common shareholders and between top 10 un-lock up common shareholders and top 10 common shareholdersAmong the top ten shareholders, Li Zhongqiu is the actual controller of Wuhan Zhongheng New Technology Industry Group Co., LTD., and belongs to a man of concerted action. It is not known whether other shareholders of the company are related to each other, or whether they belong to the concerted action stipulated in the "Management Measures for Disclosure of Information about Changes in Shareholders' Shareholding of Listed Companies".
Explanation on top 10 common shareholders involving margin business (if applicable) (see note 4)Among the top ten shareholders, Xu Xin Fen holds 400,400 shares through the general account and 1184,900 shares through the credit securities account, for a total of 1585,300 shares.

Whether top ten common stock shareholders or top ten common stock shareholders with un-lock up shares held have a buy-backagreement dealing in reporting period

□ Yes √ No

The top ten common stock shareholders or top ten common stock shareholders with un-lock up shares held of the Company have nobuy-back agreement dealing in reporting period.

IV. Changes of shares held by directors, supervisors and senior executives

□ Applicable √ Not applicable

Shares held by directors, supervisors and senior executives have no changes in reporting period, found more details in Annual Report2020.V. Changes in controlling shareholders or actual controllers

Change of controlling shareholder during the reporting period

□ Applicable √ Not applicable

The Company had no change of controlling shareholder during the reporting periodChange of actual controller during the reporting period

□ Applicable √ Not applicable

The Company had no change of actual controller during the reporting period

SEMI-ANNUAL REPORT 2021

Section VIII. Preferred Stock

□ Applicable √ Not applicable

The Company had no preferred stock in the Period.

SEMI-ANNUAL REPORT 2021

Section IX. Corporate Bonds

□ Applicable √ Not applicable

SEMI-ANNUAL REPORT 2021

Section X. Financial ReportI. Audit report

Whether the semi annual report is audited

□ Yes √ No

The company's semi annual financial report has not been auditedII. Financial Statement

Statement in Financial Notes are carried in RMB/CNY

1. Consolidated Balance Sheet

Prepared by SHENZHEN ZHONGHENG HUAFA CO., LTD.

In RMB

ItemJune 30, 2021December 31, 2020
Current assets:
Monetary funds59,612,186.2260,968,053.58
Settlement provisions
Capital lent
Trading financial assets
Derivative financial assets
Note receivable491,683.7820,240,464.79
Account receivable135,750,939.59128,063,911.79
Receivable financing5,774,948.6910,057,385.11
Accounts paid in advance31,961,398.6439,643,255.11
Insurance receivable
Reinsurance receivables
Contract reserve of reinsurance receivable
Other account receivable22,540,779.204,466,949.96
Including: Interest receivable
Dividend receivable
Buying back the sale of financial assets
Inventories129,917,660.5170,166,013.49
Contractual assets

SEMI-ANNUAL REPORT 2021

Assets held for sale
Non-current asset due within one year
Other current assets741,380.214,255,643.19
Total current assets386,790,976.84337,861,677.02
Non-current assets:
Loans and payments on behalf
Debt investment
Other debt investment
Long-term account receivable
Long-term equity investment
Investment in other equity instrument
Other non-current financial assets
Investment real estate46,360,497.1347,224,662.27
Fixed assets191,477,026.08193,605,444.53
Construction in progress740,000.00740,000.00
Productive biological asset
Oil and gas asset
Right-of-use assets
Intangible assets39,945,399.9240,820,657.80
Expense on Research and Development
Goodwill
Long-term expenses to be apportioned623,601.5977,445.31
Deferred income tax asset7,383,734.137,383,734.13
Other non-current asset66,000.0066,000.00
Total non-current asset286,596,258.85289,917,944.04
Total assets673,387,235.69627,779,621.06
Current liabilities:
Short-term loans51,089,579.0012,527,808.00
Loan from central bank
Capital borrowed
Trading financial liability
Derivative financial liability
Note payable42,983,519.3737,416,381.20
Account payable116,056,638.5798,318,239.88

SEMI-ANNUAL REPORT 2021

Accounts received in advance
Contractual liability765,555.97287,140.66
Selling financial asset of repurchase
Absorbing deposit and interbank deposit
Security trading of agency
Security sales of agency
Wage payable3,886,717.295,737,366.59
Taxes payable12,939,066.9014,204,642.62
Other account payable37,074,456.4527,608,281.01
Including: Interest payable179,523.7226,335.66
Dividend payable
Commission charge and commission payable
Reinsurance payable
Liability held for sale
Non-current liabilities due within one year12,000,000.00
Other current liabilities211,799.1318,322,972.81
Total current liabilities265,007,332.68226,422,832.77
Non-current liabilities:
Insurance contract reserve
Long-term loans61,000,000.0061,000,000.00
Bonds payable
Including: Preferred stock
Perpetual capital securities
Lease liability
Long-term account payable
Long-term wages payable
Accrual liability64,411.0064,411.00
Deferred income4,043,640.004,043,640.00
Deferred income tax liabilities
Other non-current liabilities
Total non-current liabilities65,108,051.0065,108,051.00
Total liabilities330,115,383.68291,530,883.77
Owner’s equity:
Share capital283,161,227.00283,161,227.00

SEMI-ANNUAL REPORT 2021

Other equity instrument
Including: Preferred stock
Perpetual capital securities
Capital public reserve146,577,771.50146,577,771.50
Less: Inventory shares
Other comprehensive income
Reasonable reserve
Surplus public reserve77,391,593.2577,391,593.25
Provision of general risk
Retained profit-163,858,739.74-170,881,854.46
Total owner’ s equity attributable to parent company343,271,852.01336,248,737.29
Minority interests
Total owner’ s equity343,271,852.01336,248,737.29
Total liabilities and owner’ s equity673,387,235.69627,779,621.06

Legal Representative: Li ZhongqiuPerson in charge of accounting works: Yang BinPerson in charge of accounting institute: Chuai Guoxu

2. Balance Sheet of Parent Company

In RMB

ItemJune 30, 2021December 31, 2020
Current assets:
Monetary funds1,331,648.92966,379.17
Trading financial assets
Derivative financial assets
Note receivable
Account receivable
Receivable financing
Accounts paid in advance2,199,741.2573,685.03
Other account receivable87,948,585.0493,922,057.92
Including: Interest receivable
Dividend receivable

SEMI-ANNUAL REPORT 2021

Inventories14,806.5014,806.50
Contractual assets
Assets held for sale
Non-current assets maturing within one year
Other current assets
Total current assets91,494,781.7194,976,928.62
Non-current assets:
Debt investment
Other debt investment
Long-term receivables
Long-term equity investments186,618,400.00186,618,400.00
Investment in other equity instrument
Other non-current financial assets
Investment real estate23,353,697.1023,957,898.42
Fixed assets96,806,187.3796,674,476.52
Construction in progress740,000.00740,000.00
Productive biological assets
Oil and natural gas assets
Right-of-use assets
Intangible assets4,336,290.664,408,763.52
Research and development costs
Goodwill
Long-term deferred expenses
Deferred income tax assets7,443,826.117,443,826.11
Other non-current assets
Total non-current assets319,298,401.24319,843,364.57
Total assets410,793,182.95414,820,293.19
Current liabilities:
Short-term borrowings6,000,000.00
Trading financial liability
Derivative financial liability
Notes payable
Account payable9,740,367.3310,745,840.16
Accounts received in advance46,958.0983,155.09

SEMI-ANNUAL REPORT 2021

Contractual liability
Wage payable819,533.721,476,601.12
Taxes payable7,316,798.887,892,878.33
Other accounts payable20,487,078.4321,304,919.43
Including: Interest payable
Dividend payable
Liability held for sale
Non-current liabilities due within one year12,000,000.00
Other current liabilities
Total current liabilities44,410,736.4553,503,394.13
Non-current liabilities:
Long-term loans61,000,000.0061,000,000.00
Bonds payable
Including: Preferred stock
Perpetual capital securities
Lease liability
Long-term account payable
Long term employee compensation payable
Accrued liabilities64,411.0064,411.00
Deferred income
Deferred income tax liabilities
Other non-current liabilities
Total non-current liabilities61,064,411.0061,064,411.00
Total liabilities105,475,147.45114,567,805.13
Owners’ equity:
Share capital283,161,227.00283,161,227.00
Other equity instrument
Including: Preferred stock
Perpetual capital securities
Capital public reserve146,587,271.50146,587,271.50
Less: Inventory shares
Other comprehensive income
Special reserve
Surplus reserve77,391,593.2577,391,593.25

SEMI-ANNUAL REPORT 2021

Retained profit-201,822,056.25-206,887,603.69
Total owner’s equity305,318,035.50300,252,488.06
Total liabilities and owner’s equity410,793,182.95414,820,293.19

3. Consolidated Profit Statement

In RMB

Item2021 semi-annual2020 semi-annual
I. Total operating income391,633,808.55300,703,421.38
Including: Operating income391,633,808.55300,703,421.38
Interest income
Insurance gained
Commission charge and commission income
II. Total operating cost381,884,734.22297,053,804.80
Including: Operating cost334,484,096.74263,959,652.63
Interest expense
Commission charge and commission expense
Cash surrender value
Net amount of expense of compensation
Net amount of withdrawal of insurance contract reserve
Bonus expense of guarantee slip
Reinsurance expense
Tax and extras1,428,361.921,004,056.05
Sales expense14,094,617.969,100,079.39
Administrative expense22,680,307.2417,082,362.66
R&D expense3,955,647.502,423,425.26
Financial expense5,241,702.863,484,228.81
Including: Interest expenses3,774,381.484,018,202.27
Interest income189,945.5511,856.69
Add: Other income3,553.35348,540.00
Investment income (Loss is listed with “-”)149,767.5866,780.40
Including: Investment income on affiliated company and joint venture
The termination of income recognition for financial assets measured by amortized cost

SEMI-ANNUAL REPORT 2021

Exchange income (Loss is listed with “-”)
Net exposure hedging income (Loss is listed with “-”)
Income from change of fair value (Loss is listed with “-”)
Loss of credit impairment (Loss is listed with “-”)
Losses of devaluation of asset (Loss is listed with “-”)-1,350,000.00
Income from assets disposal (Loss is listed with “-”)-99,867.53
III. Operating profit (Loss is listed with “-”)8,552,395.263,965,069.45
Add: Non-operating income276,599.0445,200.06
Less: Non-operating expense215,202.927,302.38
IV. Total profit (Loss is listed with “-”)8,613,791.384,002,967.13
Less: Income tax expense1,590,676.66837,369.58
V. Net profit (Net loss is listed with “-”)7,023,114.723,165,597.55
(i) Classify by business continuity
1.continuous operating net profit (net loss listed with ‘-”)7,023,114.723,165,597.55
2.termination of net profit (net loss listed with ‘-”)
(ii) Classify by ownership
1.Net profit attributable to owner’s of parent company7,023,114.723,165,597.55
2.Minority shareholders’ gains and losses
VI. Net after-tax of other comprehensive income
Net after-tax of other comprehensive income attributable to owners of parent company
(I) Other comprehensive income items which will not be reclassified subsequently to profit of loss
1.Changes of the defined benefit plans that re-measured
2.Other comprehensive income under equity method that cannot be transfer to gain/loss
3.Change of fair value of investment in other equity instrument
4.Fair value change of enterprise's credit risk
5. Other
(ii) Other comprehensive income items which will be reclassified subsequently to profit or loss
1.Other comprehensive income under equity method that can transfer to gain/loss
2.Change of fair value of other debt investment

SEMI-ANNUAL REPORT 2021

3.Amount of financial assets re-classify to other comprehensive income
4.Credit impairment provision for other debt investment
5.Cash flow hedging reserve
6.Translation differences arising on translation of foreign currency financial statements
7.Other
Net after-tax of other comprehensive income attributable to minority shareholders
VII. Total comprehensive income7,023,114.723,165,597.55
Total comprehensive income attributable to owners of parent Company7,023,114.723,165,597.55
Total comprehensive income attributable to minority shareholders
VIII. Earnings per share:
(i) Basic earnings per share0.02480.0112
(ii) Diluted earnings per share0.02480.0112

As for the enterprise combined under the same control, net profit of 0 Yuan achieved by the merged party before combination while 0Yuan achieved last period.Legal Representative: Li ZhongqiuPerson in charge of accounting works: Yang BinPerson in charge of accounting institute: Chuai Guoxu

4. Profit Statement of Parent Company

In RMB

ItemSemi-annual of 2021Semi-annual of 2020
I. Operating income22,146,204.3116,720,522.47
Less: Operating cost4,439,887.162,040,226.11
Taxes and surcharge572,280.19542,709.33
Sales expenses
Administration expenses7,444,373.846,208,200.98
R&D expenses
Financial expenses3,381,988.264,015,977.09

SEMI-ANNUAL REPORT 2021

Including: Interest expenses3,385,557.024,018,202.27
Interest income6,881.46
Add: Other income3,306.96
Investment income (Loss is listed with “-”)
Including: Investment income on affiliated Company and joint venture
The termination of income recognition for financial assets measured by amortized cost (Loss is listed with “-”)
Net exposure hedging income (Loss is listed with “-”)
Changing income of fair value (Loss is listed with “-”)
Loss of credit impairment (Loss is listed with “-”)
Losses of devaluation of asset (Loss is listed with “-”)
Income on disposal of assets (Loss is listed with “-”)
II. Operating profit (Loss is listed with “-”)6,310,981.823,913,408.96
Add: Non-operating income0.3517,754.80
Less: Non-operating expense8,500.00
III. Total Profit (Loss is listed with “-”)6,302,482.173,931,163.76
Less: Income tax1,236,934.73982,790.94
IV. Net profit (Net loss is listed with “-”)5,065,547.442,948,372.82
(i) continuous operating net profit (net loss listed with ‘-”)
(ii) termination of net profit (net loss listed with ‘-”)
V. Net after-tax of other comprehensive income
(i) Other comprehensive income items which will not be reclassified subsequently to profit of loss
1.Changes of the defined benefit plans that re-measured
2.Other comprehensive income under equity method that cannot be transfer to gain/loss
3.Change of fair value of investment in other equity instrument
4.Fair value change of enterprise's credit risk
5. Other
(ii) Other comprehensive income items which will be reclassified subsequently to profit or loss
1.Other comprehensive income under equity method that can transfer to gain/loss

SEMI-ANNUAL REPORT 2021

2.Change of fair value of other debt investment
3.Amount of financial assets re-classify to other comprehensive income
4.Credit impairment provision for other debt investment
5.Cash flow hedging reserve
6.Translation differences arising on translation of foreign currency financial statements
7.Other
VI. Total comprehensive income5,065,547.442,948,372.82
VII. Earnings per share:
(i) Basic earnings per share
(ii) Diluted earnings per share

5. Consolidated Cash Flow Statement

In RMB

ItemSemi-annual of 2021Semi-annual of 2020
I. Cash flows arising from operating activities:
Cash received from selling commodities and providing labor services244,756,106.28251,602,049.92
Net increase of customer deposit and interbank deposit
Net increase of loan from central bank
Net increase of capital borrowed from other financial institution
Cash received from original insurance contract fee
Net cash received from reinsurance business
Net increase of insured savings and investment
Cash received from interest, commission charge and commission
Net increase of capital borrowed
Net increase of returned business capital
Net cash received by agents in sale and purchase of securities
Write-back of tax received2,152,394.35
Other cash received concerning operating activities16,266,093.743,743,255.21
Subtotal of cash inflow arising from operating activities263,174,594.37255,345,305.13

SEMI-ANNUAL REPORT 2021

Cash paid for purchasing commodities and receiving labor service180,586,052.16179,132,887.12
Net increase of customer loans and advances
Net increase of deposits in central bank and interbank
Cash paid for original insurance contract compensation
Net increase of capital lent
Cash paid for interest, commission charge and commission
Cash paid for bonus of guarantee slip
Cash paid to/for staff and workers38,342,263.8424,991,943.90
Taxes paid13,863,743.823,743,185.15
Other cash paid concerning operating activities52,200,904.1426,277,076.72
Subtotal of cash outflow arising from operating activities284,992,963.96234,145,092.89
Net cash flows arising from operating activities-21,818,369.5921,200,212.24
II. Cash flows arising from investing activities:
Cash received from recovering investment
Cash received from investment income186,685.9066,780.40
Net cash received from disposal of fixed, intangible and other long-term assets21,750.00411,000.00
Net cash received from disposal of subsidiaries and other units
Other cash received concerning investing activities35,000,000.00
Subtotal of cash inflow from investing activities208,435.9035,477,780.40
Cash paid for purchasing fixed, intangible and other long-term assets2,524,810.501,816,159.96
Cash paid for investment
Net increase of mortgaged loans
Net cash received from subsidiaries and other units obtained
Other cash paid concerning investing activities35,000,000.00
Subtotal of cash outflow from investing activities2,524,810.5036,816,159.96
Net cash flows arising from investing activities-2,316,374.60-1,338,379.56
III. Cash flows arising from financing activities:
Cash received from absorbing investment
Including: Cash received from absorbing minority shareholders’ investment by subsidiaries
Cash received from loans57,190,879.006,725,056.80
Other cash received concerning financing activities

SEMI-ANNUAL REPORT 2021

Subtotal of cash inflow from financing activities57,190,879.006,725,056.80
Cash paid for settling debts30,430,404.0037,370,812.20
Cash paid for dividend and profit distributing or interest paying3,578,255.114,192,431.31
Including: Dividend and profit of minority shareholder paid by subsidiaries
Other cash paid concerning financing activities
Subtotal of cash outflow from financing activities34,008,659.1141,563,243.51
Net cash flows arising from financing activities23,182,219.89-34,838,186.71
IV. Influence on cash and cash equivalents due to fluctuation in exchange rate-403,343.06144,260.22
V. Net increase of cash and cash equivalents-1,355,867.36-14,832,093.81
Add: Balance of cash and cash equivalents at the period -begin60,968,053.5836,645,061.61
VI. Balance of cash and cash equivalents at the period -end59,612,186.2221,812,967.80

6. Cash Flow Statement of Parent Company

In RMB

ItemSemi-annual of 2021Semi-annual of 2020
I. Cash flows arising from operating activities:
Cash received from selling commodities and providing labor services2,336,572.2617,825,898.30
Write-back of tax received
Other cash received concerning operating activities12,794,492.627,210,631.17
Subtotal of cash inflow arising from operating activities15,131,064.8825,036,529.47
Cash paid for purchasing commodities and receiving labor service
Cash paid to/for staff and workers548,093.932,100,854.64
Taxes paid3,454,113.921,790,646.36
Other cash paid concerning operating activities1,380,064.3211,480,046.39
Subtotal of cash outflow arising from operating activities5,382,272.1715,371,547.39
Net cash flows arising from operating activities9,748,792.719,664,982.08
II. Cash flows arising from investing activities:
Cash received from recovering investment
Cash received from investment income
Net cash received from disposal of fixed, intangible and other

SEMI-ANNUAL REPORT 2021

long-term assets
Net cash received from disposal of subsidiaries and other units
Other cash received concerning investing activities
Subtotal of cash inflow from investing activities
Cash paid for purchasing fixed, intangible and other long-term assets
Cash paid for investment
Net cash received from subsidiaries and other units obtained
Other cash paid concerning investing activities
Subtotal of cash outflow from investing activities
Net cash flows arising from investing activities
III. Cash flows arising from financing activities:
Cash received from absorbing investment
Cash received from loans
Other cash received concerning financing activities
Subtotal of cash inflow from financing activities
Cash paid for settling debts6,000,000.006,000,000.00
Cash paid for dividend and profit distributing or interest paying3,383,290.963,366,124.47
Other cash paid concerning financing activities
Subtotal of cash outflow from financing activities9,383,290.969,366,124.47
Net cash flows arising from financing activities-9,383,290.96-9,366,124.47
IV. Influence on cash and cash equivalents due to fluctuation in exchange rate2,210.11
V. Net increase of cash and cash equivalents365,501.75301,067.72
Add: Balance of cash and cash equivalents at the period -begin966,379.172,046,143.44
VI. Balance of cash and cash equivalents at the period -end1,331,880.922,347,211.16

7. Statement of Changes in Owners’ Equity (Consolidated)

Current Amount

In RMB

ItemSemi-annual of 2021
Owners’ equity attributable to the parent CompanyMinority interestsTotal owners’
ShareOther equity instrumentCapitalLess:OtherReasonabSurplusProvisionRetainedOtherSubtotal

SEMI-ANNUAL REPORT 2021

capitalPreferred stockPerpetual capital securitiesOtherreserveInventory sharescomprehensive incomele reservereserveof general riskprofitequity
I. The ending balance of the previous year283,161,227.00146,577,771.5077,391,593.25-170,881,854.46336,248,737.29336,248,737.29
Add: Changes of accounting policy
Error correction of the last period
Enterprise combine under the same control
Other
II. The beginning balance of the current year283,161,227.00146,577,771.5077,391,593.25-170,881,854.46336,248,737.29336,248,737.29
III. Increase/ Decrease in the period (Decrease is listed with “-”)7,023,114.727,023,114.727,023,114.72
(i) Total comprehensive income7,023,114.727,023,114.727,023,114.72
(ii) Owners’ devoted and decreased

SEMI-ANNUAL REPORT 2021

capital
1.Common shares invested by shareholders
2. Capital invested by holders of other equity instruments
3. Amount reckoned into owners equity with share-based payment
4. Other
(iii) Profit distribution
1. Withdrawal of surplus reserves
2. Withdrawal of general risk provisions
3. Distribution for owners (or shareholders)
4. Other
(iv) Carrying forward internal owners’ equity
1. Capital reserves conversed to capital (share capital)

SEMI-ANNUAL REPORT 2021

2. Surplus reserves conversed to capital (share capital)
3. Remedying loss with surplus reserve
4. Carry-over retained earnings from the defined benefit plans
5. Carry-over retained earnings from other comprehensive income
6. Other
(v) Reasonable reserve
1. Withdrawal in the report period
2. Usage in the report period
(vi) Others
IV. Balance at the end of the period283,161,227.00146,577,771.5077,391,593.25-163,858,739.74343,271,852.01343,271,852.01

Amount of the previous period

In RMB

ItemSemi-annual of 2020
Owners’ equity attributable to the parent CompanyMinoTotal

SEMI-ANNUAL REPORT 2021

Share capitalOther equity instrumentCapital reserveLess: Inventory sharesOther comprehensive incomeReasonable reserveSurplus reserveProvision of general riskRetained profitOtherSubtotalrity interestsowners’ equity
Preferred stockPerpetual capital securitiesOther
I. The ending balance of the previous year283,161,227.00146,587,271.5077,391,593.25-177,712,041.86329,428,049.89329,428,049.89
Add: Changes of accounting policy
Error correction of the last period
Enterprise combine under the same control
Other
II. The beginning balance of the current year283,161,227.00146,587,271.5077,391,593.25-177,712,041.86329,428,049.89329,428,049.89
III. Increase/ Decrease in the period (Decrease is listed with3,165,597.553,165,597.553,165,597.55

SEMI-ANNUAL REPORT 2021

“-”)
(i) Total comprehensive income3,165,597.553,165,597.553,165,597.55
(ii) Owners’ devoted and decreased capital
1.Common shares invested by shareholders
2. Capital invested by holders of other equity instruments
3. Amount reckoned into owners equity with share-based payment
4. Other
(iii) Profit distribution
1. Withdrawal of surplus reserves
2. Withdrawal of general risk provisions
3. Distribution for owners (or shareholders)
4. Other

SEMI-ANNUAL REPORT 2021

(iv) Carrying forward internal owners’ equity
1. Capital reserves conversed to capital (share capital)
2. Surplus reserves conversed to capital (share capital)
3. Remedying loss with surplus reserve
4. Carry-over retained earnings from the defined benefit plans
5. Carry-over retained earnings from other comprehensive income
6. Other
(v) Reasonable reserve
1. Withdrawal in the report period
2. Usage in

SEMI-ANNUAL REPORT 2021

the report period
(vi) Others
IV. Balance at the end of the period283,161,227.00146,587,271.5077,391,593.25-174,546,444.31332,593,647.44332,593,647.44

8. Statement of Changes in Owners’ Equity (Parent Company)

Current Amount

In RMB

ItemSemi-annual of 2021
Share capitalOther equity instrumentCapital reserveLess: Inventory sharesOther comprehensive incomeReasonable reserveSurplus reserveRetained profitOtherTotal owners’ equity
Preferred stockPerpetual capital securitiesOther
I. The ending balance of the previous year283,161,227.00146,587,271.5077,391,593.25-206,887,603.69300,252,488.06
Add: Changes of accounting policy
Error correction of the last period
Other
II. The beginning balance of the current year283,161,227.00146,587,271.5077,391,593.25-206,887,603.69300,252,488.06
III. Increase/ Decrease in the period5,065,547.445,065,547.44

SEMI-ANNUAL REPORT 2021

(Decrease is listed with “-”)
(i) Total comprehensive income5,065,547.445,065,547.44
(ii) Owners’ devoted and decreased capital
1.Common shares invested by shareholders
2. Capital invested by holders of other equity instruments
3. Amount reckoned into owners equity with share-based payment
4. Other
(iii) Profit distribution
1. Withdrawal of surplus reserves
2. Distribution for owners (or shareholders)
3. Other
(iv) Carrying forward internal owners’ equity
1. Capital reserves conversed to

SEMI-ANNUAL REPORT 2021

capital (share capital)
2. Surplus reserves conversed to capital (share capital)
3. Remedying loss with surplus reserve
4. Carry-over retained earnings from the defined benefit plans
5. Carry-over retained earnings from other comprehensive income
6. Other
(v) Reasonable reserve
1. Withdrawal in the report period
2. Usage in the report period
(vi) Others
IV. Balance at the end of the period283,161,227.00146,587,271.5077,391,593.25-201,822,056.25305,318,035.50

Amount of the previous period

In RMB

ItemSemi-annual of 2020
Share capitOther equity instrumentCapital reservLess: InventoryOther comprehensiveReasonable reserveSurplus reserveRetained profitOtherTotal owners’ equity
PreferrePerpetualOther

SEMI-ANNUAL REPORT 2021

ald stockcapital securitiesesharesincome
I. The ending balance of the previous year283,161,227.00146,587,271.5077,391,593.25-208,863,486.54298,276,605.21
Add: Changes of accounting policy
Error correction of the last period
Other
II. The beginning balance of the current year283,161,227.00146,587,271.5077,391,593.25-208,863,486.54298,276,605.21
III. Increase/ Decrease in the period (Decrease is listed with “-”)2,948,372.822,948,372.82
(i) Total comprehensive income2,948,372.822,948,372.82
(ii) Owners’ devoted and decreased capital
1.Common shares invested by shareholders
2. Capital invested by holders of

SEMI-ANNUAL REPORT 2021

other equity instruments
3. Amount reckoned into owners equity with share-based payment
4. Other
(iii) Profit distribution
1. Withdrawal of surplus reserves
2. Distribution for owners (or shareholders)
3. Other
(iv) Carrying forward internal owners’ equity
1. Capital reserves conversed to capital (share capital)
2. Surplus reserves conversed to capital (share capital)
3. Remedying loss with surplus reserve
4. Carry-over

SEMI-ANNUAL REPORT 2021

retained earnings from the defined benefit plans
5. Carry-over retained earnings from other comprehensive income
6. Other
(v) Reasonable reserve
1. Withdrawal in the report period
2. Usage in the report period
(vi) Others
IV. Balance at the end of the period283,161,227.00146,587,271.5077,391,593.25-205,915,113.72301,224,978.03

III. Company profile

1. The registration place of the enterprise, the form of organization and the headquarters addressShenzhen Zhongheng HUAFA Company Limited (hereinafter referred to as Company or the Company),established on 8 December 1981. Uniform social credit code 91440300618830372G.Registered place and head office of the Company: 411 Bldg., Huafa (N) Road, Futian District, ShenzhenLegal representative: Li ZhongqiuRegistered capital: RMB 283,161,227.00

2. The nature of the business and the main business activities

The Company belongs to the computer, telecommunication and manufacturing of other electronic equipment.Business scope: producing and sales of vary color TV set, liquid crystal display, LCD (operates in branch),radio-recorder, sound equipment, electronic watch, electronic game and computers, the printed wiring board,precision injection parts, light packaging material (operates in Wuhan) and hardware (including tool and mould)

SEMI-ANNUAL REPORT 2021

for various electronic products and supporting parts, plating and surface treatment and tin wire, development andoperation of real estate (Shen Fang Di Zi No.: 7226760) and property management. Funded affiliated companiesin Wuhan and Jilin. Setting up branches in capital of the province (Lhasa City excluded) in China andmunicipality directly under the central government.

3. Relevant party offering approval reporting of financial statements and date thereofThe financial statement has been deliberated and approved by BOD on 20 August 2021. According to Article ofAssociation, the statement shall be submitted for deliberation in shareholders general meeting.

Consolidate scope in the Period including: subsidiaries including Shenzhen HUAFA Property Lease ManagementCo., Ltd (no annual inspection in 2011, and business license revoke on 1 April 2014), Shenzhen ZhonghengHUAFA Property Co., Ltd, Wuhan Hengfa Technology Co., Ltd., Shenzhen HUAFA Hengtian Co., Ltd. andShenzhen HUAFA Hengtai Co., Ltd. More of subsidiaries found in “Note VIII. Equity in other subjects”.

IV. Preparation basis of Financial Statements

1. Preparation basis

Base on the running continuously and actual transactions and events, in line with the Accounting Standards forBusiness Enterprise – Basic Standards and specific principle of accounting standards issued by the Ministry ofFinance (hereinafter collectively referred to as Accounting Standards for Business Enterprise), the Companyprepared and formulate the financial statement lies on the followed important accounting policy and estimation.

2. Going concern

The Company expects that the production and sales will be in a virtuous cycle within 12 months from the end ofhe reporting period, and there is no risk that affects the continued operations.

V. Important accounting policy and estimationNotes on specific accounting policies and accounting estimation:

The following disclosure has covered the specific accounting policies and accounting estimates formulated by theCompany according to the actual production and operation characteristics.

1. Declaration of obedience to Accounting Standards for Business EnterpriseThe Financial Statements of the Company are up to requirements of Accounting Standards for Business Enterpriseand also a true and thorough reflection to the relevant information as the Company’s financial position dated 30

th

June 2021 and the operation results as well as cash flow for the first half year of 2021.

SEMI-ANNUAL REPORT 2021

2. Accounting period

The Company’s accounting year is Gregorian calendar year, namely from 1

st

January to 31

stDecember of everyyear.

3. Business cycle

The Company’s business cycle is one year (12 months) as a normal cycle, and the business cycle is thedetermining criterion for the liquidity of assets and liabilities of the Company.

4. Bookkeeping standard currency

The Renminbi (RMB) is taken as the book-keeping standard currency.

5. Accounting methods for consolidation of enterprises under the same control or otherwise

5.1 Consolidation of enterprises under the same control

Where the Company for long term equity investment arising from business combination under common controlsatisfies the combination consideration by payment of cash, transfer of non-cash assets or assumption of debt, thecarrying value of the net assets of the acquire in combined financial statement of the ultimate controller shared bythe Company as at the combination date shall be deemed as the initial investment cost of such long term equityinvestment. If the equity instrument issued by combining party are consider as the combination consideration,than the total value of the issuing shares are consider as the share capital. The difference between the initial cost oflong-term equity investment and book value of consideration (or total face value of the shares issued) paid, capitalsurplus adjusted; if the capital surplus not enough to written down, than retained earning adjusted.

5.2 Business combination not under common control

As for business combination not under common control, combination costs refer to the sum of the fair value of theassets paid, liabilities occurred or assumed as well as equity securities issued by the acquirer to obtain control overthe acquire as at the acquisition date. As for acquiree that obtained by consolidation not under the same control,the qualified confirmation of identified assets, liability and contingency liabilities should calculated by fair valueon day of purchased. If the consolidation cost larger than the fair value amount of identified net assets fromacquiree’s, the differences should be recognized as goodwill. If the consolidation cost less than the fair valueamount of identified net assets from acquiree’s, the differences should reckoned into current non-operatingincome.

6. Preparation methods for consolidated financial statements

6.1 Consolidation financial statement range

The Company includes all the subsidiaries (including the separate entities controlled by the Company) into

SEMI-ANNUAL REPORT 2021

consolidated financial statement, including companies controlled by the Company, non-integral part of theinvestees and structural main body.

6.2 Centralize accounting policies, balance sheet dates and accounting periods of parent and subsidiaries.As for the inconsistency between the subsidiaries and the Company in the accounting policies and periods, thenecessary adjustment is made on the subsidiaries’ financial statements in the preparation of the consolidatedfinancial statements according to the Company’s accounting policies and periods.

6.3 Offset of consolidated financial statement

The consolidated financial statements shall be prepared on the basis of the balance sheet of the parent companyand subsidiaries, which offset the internal transactions incurred between the parent company and subsidiaries andwithin subsidiaries. The owner’s equity of the subsidiaries not attributable to the parent company shall bepresented as minority equity under the owner’s equity item in the consolidated balance sheet. The long term equityinvestment of the parent company held by the subsidiaries, deemed as treasury stock of the corporate group aswell as the reduction of owners’ equity, shall be presented as “Less: treasury stock” under the owners’ equity itemin the consolidated balance sheet.

6.4Accounting for acquisition of subsidiary through combination

For subsidiaries acquired under enterprise merger involving enterprises under common control,the assets, liabilities, operating results and cash flows of the subsidiaries are included in the consolidated financialstatements from the beginning of the financial year in which the combination took place. Whenpreparing the consolidated financial statements, for the subsidiaries acquired from businesscombination not involving entities under common control, the identifiable net assets of the subsidiaries areadjusted on the basis of their fair values on the date of acquisition.

6.5 Accounting treatment of disposal subsidiaries

In the case of partial disposal of long-term equity investments in subsidiaries without loss of control, in theconsolidated financial statements, the difference between the disposal price and the net asset share correspondingto the disposal of long-term equity investments and enjoying the subsidiaries’ continued calculation from thepurchase date or the merger date is used to adjust the capital reserve (capital premium or equity premium). If thecapital reserve is insufficient to offset, the retained earnings are adjusted.

7. Classification of joint venture arrangement and accounting treatment of joint operation

8. Determination criteria of cash and cash equivalent

The cash recognized in the preparation of the cash flow statements, is the Company’s storage cash and depositsavailable for payment anytime. The cash equivalents recognized in the preparation of the cash flow statements

SEMI-ANNUAL REPORT 2021

refers to the investment held by the Company with characteristic of short-term, strong mobility, easy transfer toknown sum cash and has slim risk from value changes.

9. Foreign currency exchange and the conversion of foreign currency statements

9.1 Foreign currency exchange

The approximate exchange rate of the spot exchange rate on transaction occurred should be used for standardmoney conversion while foreign currency exchange occurred On the balance sheet day, the monetary items areconverted on the current rate on the balance sheet day, concerning the exchange differences between the spotexchange rate on that date and initial confirmation or the sport exchange rate on previously balance sheet date,should reckoned in to current gains/losses except the capitalizing on exchange differences for foreign specificloans, which was reckoned into cost for capitalizing. The non-monetary items measured on the historic cost arestill measured by the original bookkeeping rate with the sum of the bookkeeping standard currency unchanged.Items of non-monetary foreign currency which was calculated by fair value, should converted by spot exchangerate on the confirmation day of fair value, difference between the converted amount of bookkeeping currency andoriginal amount of bookkeeping currency, was treated as changes of fair value (including exchange rate changed)reckoned into current gains/losses or recognized as other consolidated income.

9.2 Conversion of foreign currency financial statements

Upon the conversion of the foreign currency financial statements of the controlling subsidiaries, joint enterprises,and the affiliated enterprises on the bookkeeping standard currency different from the Company’s, the accountingcheck and preparation of the consolidated financial statements are made. Assets and liabilities items in the balancesheet are converted on the current rate on the balance sheet day; owners’ equity items besides the “retained profit”item, the other items are converted on the actual rate. Items of revenue and expenses in profit statement, shouldconverted by the approximate exchange rate of spot exchange rate on occurring date. The conversion difference ofthe foreign currency financial statements is listed specifically in the owners’ equity in the balance sheet. If theforeign cash flow determined by rational system method, the approximate exchange rate of spot exchange rate onoccurring date should prevail. The cash influenced by the rate fluctuation is listed specifically in the cash flowstatement. As for the foreign operation, the conversion difference of the foreign currency statement related to theforeign operation is transferred in proportion into the disposal of the current loss/gain.

10. Financial instrument

10.1 Category and recognition of financial instrument

Financial instrument is the contract that taken shape of the financial asses for an enterprise and of the financialliability or equity instrument for other units.

(1) Financial assets

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The Company classifies financial assets that meet the following conditions as financial assets measured atamortized cost: ① The Company’s business model for managing financial assets is to collect contractual cashflows as its goal; ② The contractual terms of the financial assets stipulate that the cash flow generated on aspecific date is only the payment of principal and interest based on the outstanding principal amount.

For investment in non-trading equity instruments, the Company may irrevocably designate it as a financial assetmeasured at fair value and its changes included in other comprehensive income at initial recognition. Thedesignation is made on the basis of a single investment, and the relevant investment meets the definition of equityinstruments from the perspective of the issuer.

Except for financial assets classified as financial assets measured at amortized cost and financial assets measuredat fair value and whose changes are included in other comprehensive income, the Company classifies the financialassets as financial assets measured at fair value and whose changes are included in current profit or loss. At theinitial recognition, if the accounting mismatch can be eliminated or reduced, the Company can irrevocablydesignate the financial asset as a financial asset measured at fair value and its changes are included in the currentprofit and loss.

(2) Financial liabilities

Financial liabilities are classified as financial liabilities measured at fair value and whose changes are included inthe current profit or loss, financial liabilities formed by the transfer of financial assets that does not meet theconditions for derecognition or continues to be involved in the transferred financial assets, and financial liabilitiesmeasured at amortized cost at initial recognition. All financial liabilities are not reclassified.

10.2 Measurement of financial instruments

The initial recognition of the Company’s financial instruments is measured at fair value. For financial assets andfinancial liabilities measured at fair value and whose changes are included in the current profit and loss, therelated transaction costs are directly included in the current profit and loss; for other types of financial assets orfinancial liabilities, the related transaction costs are included in the initial recognition amount. For the accountsreceivable or bills receivable arising from the sale of products or the provision of labor services, not containing ornot considering significant financing components, the Company shall use the amount of consideration expected tobe received as the initial recognition amount. The subsequent measurement of financial instruments depends ontheir classification.

(1) Financial assets

① Financial assets measured at amortized cost. After initial recognition, such financial assets are measured atamortized cost by using the effective interest method. Gains or losses arising from financial assets that aremeasured at amortized cost and do not belong to any hedging relationship are included in the current profit or losswhen they are derecognized, reclassified, amortized in accordance with the effective interest rate method, or

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recognized for impairment.

② Financial assets measured at fair value and whose changes are included in the current profit and loss. Afterinitial recognition, for such financial assets (except for a part of financial assets that belong to the hedgingrelationship), the fair value is used for subsequent measurement, and the resulting gains or losses (includinginterest and dividend income) are included in the current profit and loss.

③ Investment in debt instruments measured at fair value and whose changes are included in other comprehensiveincome. After initial recognition, the subsequent measurement of such financial assets is conducted at fair value.Interest, impairment losses or gains calculated by using the effective interest rate method and the exchange gainsand losses are included in the current profit and loss, and other gains or losses are included in othercomprehensive income. In derecognition, the accumulated gains or losses previously included in othercomprehensive income are transferred out of other comprehensive income and included in the current profit andloss.

(2) Financial liabilities

① Financial liabilities measured at fair value and whose changes are included in the current profit and loss. Suchfinancial liabilities include trading financial liabilities (including derivatives that belong to financial liabilities)and financial liabilities designated to be measured at fair value and whose changes are included in the currentprofit and loss. After initial recognition, the subsequent measurement of such financial liabilities is at fair value,except for those related to hedge accounting, gains or losses (including interest expenses) resulting from changesin the fair value of trading financial liabilities are included in the current profit and loss. If a financial liabilitydesignated to be measured at fair value and whose changes are included in the current profit or loss, the amount ofchange in the fair value of the financial liability caused by changes in the enterprise’s own credit risk is includedin other comprehensive income, other changes in fair value are included in the current profit and loss. If theimpact of changes in the financial liability’s own credit risk included in other comprehensive income causes orexpands the accounting mismatch in profit or loss, the Company will include all gains or losses on the financialliability in the current profit and loss.

② Financial liabilities measured at amortized cost. After initial recognition, such financial liabilities aremeasured at amortized cost by using the effective interest method.

10.3 The Company’s methods for confirming the fair value of financial instrumentsIf the financial instrument has an active market, the fair value is determined by the quoted price in the activemarket; if the financial instrument doesn’t have an active market, the fair value is determined by adopting thevaluation technique. Valuation techniques mainly include market approach, income approach and cost approach.In limited circumstances, if the recent information used to determine fair value is insufficient, or the range ofpossible estimated amounts of fair value is widely distributed, and the cost represents the best estimate of fairvalue within this range, the cost may represent the appropriate estimates of fair value within this distribution range.

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The Company uses all information on the performance and operation of the investee gettable after the initialrecognition date to determine whether the cost represents the fair value or not.

10.4 Confirmation basis and measurement method for the transfer of liabilities of financial assets

(1)Financial assets

If the Company’s financial asset meets one of the following conditions, it shall be terminated for confirmation: ①The contract right to receive the cash flow of the financial asset is terminated; ② The financial asset has beentransferred, and the Company has transferred almost all risks and rewards of ownership of the financial asset; ③The financial asset has been transferred, although the Company has neither transferred nor retained almost all theremuneration in the ownership of the financial asset, it has not retained control of the financial asset.

If the transfer of financial assets meets the conditions for derecognition, the difference between the following twoamounts shall be included in the current profit and loss: ① The book value of the transferred financial assets onthe date of derecognition; ② The sum of the consideration received for the transfer of financial assets and theamount corresponding to the derecognized part of the cumulative amount of changes in fair value that was directlyincluded in other comprehensive income (the financial assets involved in the transfer are classified as financialassets measured at fair value and their changes are included in other comprehensive income).

(2) Financial liability

If the current obligation of the financial liability (or part of it) has been discharged, the Company derecognizes thefinancial liability (or part of the financial liability).

If the financial liability (or part of it) is derecognized, the Company shall include the difference between its bookvalue and the consideration paid (including non-cash assets transferred out or liabilities assumed) into the currentprofit and loss.

11.Note receivable

11.1 How to determine expected credit losses

Based on expected credit losses, the Company makes impairment accounting treatment and confirm lossprovisions for financial assets (including receivables) measured at amortized cost and financial assets (includingreceivables financing) that are measured at fair value and whose changes are included in other comprehensiveincome, and lease receivables.

The Company assesses on each balance sheet date whether the credit risk of relevant financial instruments hasincreased significantly since initial recognition, and divides the process of credit impairment of financialinstruments into three stages, and adopts different accounting treatment methods for financial instruments

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impairment at different stages: (1) In the first stage, if the credit risk of a financial instrument has not increasedsignificantly since its initial recognition, the Company shall measure the loss provisions according to the expectedcredit losses of the financial instrument in the next 12 months, and calculate the interest income according to itsbook balance (i.e. without deducting impairment) and actual interest rate; (2) In the second stage, if the credit riskof a financial instrument has increased significantly since the initial recognition but no credit impairment hasoccurred, the Company shall measure the loss provisions according to the expected credit losses of the financialinstrument during the entire duration, and calculate the interest income according to its book balance and actualinterest rate; (3) In the third stage, if the credit impairment occurs after initial recognition, the Company shallmeasure loss provisions based on the expected credit losses of the financial instrument for the entire duration, andcalculate the interest income according to its book balance and actual interest rate.

(1) Methods of measuring loss provisions for financial instruments with lower credit riskFor financial instruments with lower credit risk on the balance sheet date, the Company can directly make theassumption that the credit risk of the instrument has not increased significantly since the initial recognitionwithout comparing with the credit risk at the initial recognition.

If the default risk of financial instruments is low, the debtor’s ability to fulfill its contractual cash flow obligationsis strong in the short term, and even if there are adverse changes in the economic situation and operatingenvironment over a long period of time, it may not necessarily reduce the borrower’s ability to fulfill thecontractual cash flow obligations, the financial instrument shall be considered to have lower credit risk.

(2) Methods of measuring loss provisions for accounts receivable and lease receivables

①Receivables that do not contain significant financing components. For the receivables formed by transactionsregulated by “Accounting Standards for Business Enterprises No.14-Revenue” and without containing significantfinancing components, the Company adopts a simplified method, that is, it always calculates the loss provisionsbased on the expected credit losses for the entire duration.

Based on the nature of financial instruments, the Company assesses whether credit risk has increased significantlyon the basis of individual financial assets or financial assets portfolios. The Company divides the notes receivableand accounts receivable into several portfolios based on the characteristics of credit risk, and calculates theexpected credit losses on the basis of the portfolios, the basis for determining the portfolios is as follows:

Accounts receivable portfolio 1: A portfolio that uses the aging of accounts receivables as credit riskcharacteristics,Accounts receivable portfolio 2: Combination of related parties included in the scope of consolidated statementsNotes receivable portfolio 1: Same as the division of accounts receivable portfolioNotes receivable portfolio 2: Management evaluates that this type of fund is bank acceptance portfolio with lowercredit risk

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For the accounts receivable and notes receivable being divided into portfolio 1, the Company refers to thehistorical credit loss experience, combines with the current conditions and the prediction of future economicsituation, and prepares a comparison table of the aging of accounts receivable and the expected credit loss rate ofthe entire duration, and calculates the expected credit losses.

For accounts receivable and notes receivable being divided into portfolio 2, the Company refers to historical creditloss experience, combines with the current conditions and the predictions of future economic conditions, andcalculates the expected credit losses of 0% through default risk exposure and expected credit loss rate for theentire duration.

②Accounts receivables and leases receivables that contain significant financing components. For accountsreceivables that contain significant financing components and leases receivables regulated by “AccountingStandards for Business Enterprises No. 21-Leases”, the Company measures loss provisions in accordance with thegeneral method, that is, the “third stage” model.

(3) Methods of measuring loss reserves for other financial assets

For financial assets other than the above, such as debt investment, other debt investment, other receivables,long-term receivables other than lease receivables, etc., the Company uses the general method, that is, thethree-stage model to measure loss reserves.When measuring the credit impairment of financial instruments, the Company considers the following factors inassessing whether the credit risk has increased significantly:

The Company divides other receivables into a number of portfolios based on the nature of the money, andcalculates the expected credit loss on the basis of the portfolio. The basis for determining the portfolio is asfollows:

Other receivables portfolio 1: A portfolio of unrelated parties with provision for impairment in accordance withthe expected loss rate

Other receivables portfolio 2: A portfolio of related parties included in the scope of the consolidated statement

For other receivables classified into portfolio 1, the Company refers to historical credit loss experience, combineswith current conditions and forecasts of future economic conditions, compiles a comparison table of accountsreceivable aging and expected credit loss rate of the entire duration, and calculates the expected credit loss.

For other receivables classified into portfolio 2, the Company refers to historical credit loss experience, combineswith current conditions and forecasts of future economic conditions, and calculates an expected credit loss of 0%through the default risk exposure and the expected credit loss rate of the entire duration .

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(4)Accrual method of bad debt provision for those accrual by account age as the portfolio

Account ageExpected credit loss rate of receivable (%)Expected credit loss rate of other receivable (%)
Within one year (one year included)00
1-2 years55
2-3 years1010
Over 3 years3030

11.2 Accounting treatment methods of expected credit losses

In order to reflect the changes in the credit risk of financial instruments since initial recognition, the Companyremeasures the expected credit losses on each balance sheet date, and the resulting increase or reversal of the lossprovisions should be counted as an impairment loss or gain and included in the current profit and loss, and basedon the type of financial instrument, offsets the book value of the financial asset listed in the balance sheet orincludes in the estimated liability (loan commitment or financial guarantee contract) or includes in othercomprehensive income (debt investments measured at fair value and whose changes are included in othercomprehensive income).

12. Account receivable

Same as 10. Note receivable

13.Receivable financing

Same as 10. Note receivable

14. Other account receivable

Determination and accounting treatment on the expected credit losses of other account receivableSame as 10. Note receivable

15. Inventory

15.1 Categories of inventory

The inventory is goods or manufactured products held for sale, products in process, and materials and mattersutilized in the production or supply of labor. Mainly including raw material, revolving materials (wrappage andlow-value consumption goods etc.), outside processing materials, goods in process, semi-finished goods, stocksand so on.

15.2 Accounting method for inventory delivery

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When inventories are issued, the actual cost is determined by the first in first out method.

15.3 Accrual method inventory falling price reserves

On the balance sheet day, the inventory is measured on the lower one between the cost and the net realizable value,and the provision for the falling price reserves is accrued on each inventory item; however, as for the inventory oflarge quantity and low price, the provision is accrued on the inventory category.

15.4 Inventory system

Inventory system of the Company is perpetual inventory system

15.5 Amortization method for the low-value consumables and wrap page

Low-value consumables and packages are amortized by one-point method

16. Contractual assets

17. Contractual costs

18. Assets held for sale

19. Debt investment

20. Other debt investment

21. Long-term account receivable

22. Long-term equity investment

22.1 Recognition of initial investment cost

For a long-term equity investment obtained by a business combination, if it is a business combination under thesame control, take the share of the combine party obtained in the book value of the net assets in the consolidatedfinancial statements of the ultimate controlling party on the combination date as the initial investment cost; in thecase of the consolidation of enterprises not under the same control, recognized as the initial cost is the recognizedconsolidation cost on the purchase day. As for the long term equity investment obtained by cash payment, theinitial investment cost is the actual purchase payment. As for the long term equity investment obtained by theequity securities offering, the initial investment cost is the fair value of the equity securities. As for the long-termequity investment obtained by debt reorganization, initial investment cost of such investment should determine byrelevant regulation of the “Accounting Standards for Business Enterprise No.12- Debt Reorganization”; as for thelong term equity investment obtained by the exchange of the non-monetary assets, the initial investment cost isrecognized on the relevant rules in the “Accounting Standards for Business Enterprise No. 7- Exchange ofNon-Monetary Assets”

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22.2 Subsequent measurement and profit or loss recognition

Where the company has a control over the investee, long-term equity investments are measured using cost method.Long-term equity investments in associates and joint ventures are measured using equity method. Where part ofthe equity investments of an investor in its associates are held indirectly through venture investment institutions,common fund, trust companies or other similar entities including investment linked insurance funds, such part ofequity investments indirectly held by the investor shall be measured at fair value through profit or loss accordingto according to relevant requirements of Accounting Standards for Business Enterprises No.22—Recognitionand measurement of Financial Instruments regardless whether the above entities have significant influence onsuch part of equity investments, while the remaining part shall be measured using equity method.

22.3 Basis of conclusion for common control and significant influence over the investeeJoint control over an investee refers to where the activities which have a significant influence on return on certainarrangement could be decided only by mutual consent of the investing parties sharing the control, which includesthe sales and purchase of goods or services, management of financial assets, acquisition and disposal of assets,research and development activities and financing activities, etc.; Significant influence on the investee refers tothat: significant influence over the investee exists when holding more than 20% but less than 50% of the shareswith voting rights or even if the holding is below 20%, there is still significant influence if any of the followingconditions is met: there is representative in the board of directors or similar governing body of the investee;participation in the investee’s policy setting process; assign key management to the investee; the investee relies onthe technology or technical information of the investing company; or major transactions with the investee.

23. Investment real estate

Measurement for investment real estateCost methodDepreciation or amortization methodThe types of investment real estate of the Company include the leased land use rights, leased buildings, and landuse rights held and prepared for transfer after appreciation. Investment real estate is initially measured at cost andsubsequently measured by using the cost model.

The leased buildings in the Company’s investment property adopts straight-line depreciation to calculate anddistill depreciation, specific accounting policy are same as part of the fixed assets. The leased land use rights inthe investment property and the land use rights to be transferred after appreciation adopt straight-line amortization,specific accounting policy are same as part of the intangible assets.

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24. Fixed assets

(1) Recognition

Fixed assets refers to the tangible assets holding for purpose of producing goods, providing labor services, leasingor operation management, which has one accounting fiscal year of using life. Meanwhile as up to the followingconditions, they are recognized: the economic interest related to the fixed assets probably flow into the Company;the cost of the fixed assets can be measured reliably.

(2) Depreciation method

CategoryDepreciation methodDepreciation life (year)Salvage rateAnnual depreciation rate
House buildingStraight-line depreciation20-50101.8-4.5
Machinery equipmentStraight-line depreciation10109
Mold equipmentStraight-line depreciation31030
Transportation equipmentStraight-line depreciation51018
Instrument equipmentStraight-line depreciation51018
Tool equipmentStraight-line depreciation51018
Office equipmentStraight-line depreciation51018

N/A

(3) Recognition basis, valuation and depreciation method for fixed assets under financing leaseThe fixed assets under financing lease are the lease that has substantially transferred all the risks and rewardsassociated with asset ownership. The initial valuation of the fixed assets under financing lease is to take the lowerone between the fair value of the leased assets and the present value of the minimum lease payments on the startdate of the lease period as the entry value; the subsequent valuation of the fixed assets under financing leaseadopts the depreciation policy consistent with the own fixed assets to make depreciation and impairmentprovision.

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25. Construction in process

Construction in process of the Company divided as self-run construction and out-bag construction. TheConstruction in process of the Company carried forward as fixed assets while the construction is ready for theintended use. Criteria of the expected condition for use should apply one of the follow conditions: The substanceconstruction (installation included) of the fixed assets has completed all or basically; As the projects have been intest production or operation, and the results show that the assets can operate properly and produce the qualifiedproducts stably, or the test operation result shows the assets can operate or open properly. The expenditure of thefixed assets on the construction is a little or little. The fixed assets of the project constructed have been up to therequirements of the design or contract, or basically up to.

26. Borrowing expenses

26.1 Recognition principle on capitalization of borrowing expenses

As for the Company’s actual borrowing expenses directly attributable to the assets construction or production, it iscapitalized and reckoned into the relevant assets cost; as for other borrowing expenses, it is recognized on theactual sum and reckoned into the current loss/gain. The assets up to the capitalization are assets as the capitalassets, investment real estate, and inventory reaching the expectant availability or sale ability.

26.2 Calculation of the capitalization

Capitalization term: the period from the time starts to capitalization to the time the capitalization ends. The periodof capitalization suspended is not included. The capitalization of borrowing expenses should be suspended whilethe abnormal interrupt, which surpass three months continuously, in the middle of acquisition or construction orproduction.

As for the borrowing of the specific borrowing, the capitalization sum is recognized on the current actualinterest expenses less the interest income of the borrowing capital not utilized but deposited in the bank or thereturn of the temporary investment; As for the appropriation of the general borrowing, the capitalization sum isrecognized on the weighted average of, the accumulative assets expenditure above the specific borrowing, andtimes the capitalization rate of the appropriation; As for the discount or premium of the borrowing, the discount orpremium to be diluted in every accounting period is recognized in the actual rate method.

The effective interest method is the method for the measurement of the diluted discount or premium or interestexpenses on the actual interest rate; and the actual interest rate is the interest rate used in the discount of the futurecash flow in the expectant duration period as the current book value of the borrowing.

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27. Biological assets

28. Oil and natural gas assets

29.Right-of-use assets

30. Intangible assets

(1) Accounting method, service life and impairment test

1. Recognition principle on capitalization of borrowing expenses

As for the Company’s actual borrowing expenses directly attributable to the assets construction or production, it iscapitalized and reckoned into the relevant assets cost; as for other borrowing expenses, it is recognized on theactual sum and reckoned into the current loss/gain. The assets up to the capitalization are assets as the capitalassets, investment real estate, and inventory reaching the expectant availability or sale ability.

2. Calculation of the capitalization

Capitalization term: the period from the time starts to capitalization to the time the capitalization ends. The periodof capitalization suspended is not included. The capitalization of borrowing expenses should be suspended whilethe abnormal interrupt, which surpass three months continuously, in the middle of acquisition or construction orproduction.

As for the borrowing of the specific borrowing, the capitalization sum is recognized on the current actualinterest expenses less the interest income of the borrowing capital not utilized but deposited in the bank or thereturn of the temporary investment; As for the appropriation of the general borrowing, the capitalization sum isrecognized on the weighted average of, the accumulative assets expenditure above the specific borrowing, andtimes the capitalization rate of the appropriation; As for the discount or premium of the borrowing, the discount orpremium to be diluted in every accounting period is recognized in the actual rate method.

The effective interest method is the method for the measurement of the diluted discount or premium or interestexpenses on the actual interest rate; and the actual interest rate is the interest rate used in the discount of the futurecash flow in the expectant duration period as the current book value of the borrowing.

(2) Accounting policies for internal research and development expenditure

Specific criteria for the research phase and development phase of internal R&D projects, and specific criteria fordevelopment phase expenditures to qualify for capitalization

Expenditures for internal research and development projects at the research phase shall be included in the current

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profit or loss when incurred; expenditures incurred at the development phase and recognized as intangible assetsshall be transferred to intangible assets accounting.

31. Long-term assets impairment

Long-term equity investments, investment properties measured at cost and long-term assets such as fixed assets,construction in progress, productive biological assets at cost method, oil and gas assets, intangible assets andgoodwill are tested for impairment if there is any indication that an asset may be impaired at the balance date. Ifthe result of the impairment test indicates that the recoverable amount of the asset is less than its carrying amount,a provision for impairment and an impairment loss are recognized for the amount by which the asset’s carryingamount exceeds its recoverable amount.

The recoverable amount is the higher of an asset’s fair value less costs to sell and the present value of the futurecash flows expected to be derived from the asset. Provision for asset impairment is determined and recognized onthe individual asset basis. If it is not possible to estimate the recoverable amount of an individual asset, therecoverable amount of a group of assets to which the asset belongs is determined. A group of assets is the smallestgroup of assets that is able to generate independent cash inflows.

Goodwill arising from a business combination is tested for impairment at least at each year end, irrespective ofwhether there is any indication that the asset may be impaired. For the purpose of impairment testing, the carryingamount of goodwill acquired in a business combination is allocated from the acquisition date on a reasonablebasis to each of the related asset groups; if it is impossible to allocate to the related asset groups, it is allocated toeach of the related set of asset groups. If the carrying amount of the asset group or set of asset groups is higherthan its recoverable amount, the amount of the impairment loss first reduced by the carrying amount of thegoodwill allocated to the asset group or set of asset groups, and then the carrying amount of other assets (otherthan the goodwill) within the asset group or set of asset groups, pro rata based on the carrying amount of eachasset.

Once the impairment loss of such assets is recognized, it is not be reversed in any subsequent period.

32. Long-term deferred expenses

The Company’s long-term deferred expenditure are expenses paid out and with one year above (one-yearexcluded) benefit period. The long-term deferred expenses are diluted by periods according to the benefit period.As the long-term deferred expenses cannot enable the accounting period’s beneficiary, all dilution values of theproject undiluted yet, are transferred into the current loss/gain.

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33. Contractual liabilities

The company presents the obligation to transfer goods or provide services to customers for consideration receivedor receivable as a contract liability.

34. Employees remuneration

(1) Accounting for short-term benefits

In the period of employee services, short-term benefits are actually recognized as liabilities and charged to profitor loss, or if otherwise required or allowed by other accounting standards, to the related costs of assets for thecurrent period. At the time of actual occurrence, The Company’s employee benefits are recorded into the profitsand losses of the current year or assets associated costs according to the actual amount. The non-monetaryemployee benefits are measured at fair value. Regarding to the medical and health insurance, industrial injuryinsurance, maternity insurance and other social insurances, housing fund and labor union expenditure andpersonnel education that the Company paid for employees, the Company should recognize correspondingemployees benefits payable according to the appropriation basis and proportion as stipulated by relevantrequirements and recognize the corresponding liabilities and include these expenses in the profits or losses of thecurrent period or recognized as respective assets costs.

(2) Accounting for post-employment benefits

During the accounting period in which an employee provides service, the amount payable calculated underdefined contribution scheme shall be recognized as a liability and recorded in profit and loss of the current periodor in assets. In respect of the defined benefit scheme, the Company shall use the projected unit credit method andattribute the welfare obligations calculated using the formula stipulated by the defined benefit scheme to theservice period of the employee, and record the obligation in the current profit and loss or related assets cost.

(3) Accounting for termination benefits

The Company recognizes a liability and expenses in the current profit or loss for termination benefits at the earlierof the following dates: when the Company can no longer withdraw the offer of those benefits; and when theCompany recognizes costs for restructuring involving the payment of termination costs.

(4) Accounting for other long-term employee benefits

The Company provides other long-term employee benefits to its employees. For those falling within the scope ofdefined contribution scheme, the Company shall account for them according to relevant requirements of thedefined contribution scheme. In addition, the Company recognizes and measures the net liabilities or net assets ofthe other long-term employee benefits according to relevant requirements of the defined contribution scheme.

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35. Lease liability

36. Accrual liability

The obligation related to contingencies is the current obligation assumed by the company, and performing thisobligation may result in an outflow of economic benefits, and this obligation can be determined as the estimatedliabilities when the amount can be reliably measured. The Company makes initial measurement in accordancewith the best estimate for performing the related current obligation, if the expenditure as needed has a continuousrange, and the likelihood of occurrence of various results in this range is the same, the best estimate is determinedby the median value within the range; if a number of items are involved, the best estimate is determined by thecalculation of various possible outcomes and related probabilities.

At the balance sheet date, the book value of estimated liabilities should be rechecked, if there is conclusiveevidence indicates that this book value cannot truly reflect the current best estimate, and then the book valueshould be adjusted in accordance with the current best estimate.

37.Share-based payment

38. Other financial instrument as preferred shares and perpetual bonds

39. Revenue (income)

Accounting policy for recognition and measurement of revenue(income)The Company recognizes revenue based on the transaction price allocated to the performance obligations at thetime when it has fulfilled the performance obligations in the contract, that is, when the customer obtains controlrights of the relevant goods or services. Obtaining control rights of related goods means being able to lead the useof the goods and obtain almost all economic benefits from them. Performance obligations refer to the Company'scommitment to transfer clearly distinguishable goods to customers in the contract. The transaction price refers tothe amount of consideration that the Company expects to be entitled to receive due to the transfer of goods to thecustomer, not including the amount collected on behalf of a third party and the amount that the Company expectsto return to the customer.Whether the performance obligation is to be performed within a certain period of time or at a certain point of timedepends on the terms of the contract and relevant legal provisions. If the performance obligation is performedwithin a certain period of time, the Company recognizes revenue in accordance with the progress of theperformance. Otherwise, the Company recognizes revenue at a certain point when the customer obtains controlrights of the relevant assets.The Company's specific revenue recognition methods:

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The sales contract between the Company and the customer usually only contains the performance obligation forthe transferred goods. The Company’s performance obligation for the transfer of goods does not meet the threeconditions for performance within a certain period of time, therefore, the Company usually recognizes revenue atthe time-point of completion of the inspection of incoming on the basis of comprehensive consideration of thefollowing factors, i.e. for domestic sales, the revenue is recognized when the product has been sent out and theother party has signed for confirmation. For export sales, the revenue is recognized by the relevant customsdeclaration documents when the product has been shipped and customs declaration procedures have beencompleted.The house lease contract signed by the Company and the customer usually only contains the performanceobligation for the provision of lease and property services, the Company recognizes revenue according to theprogress of performance when a performance obligation is performed within a certain period of time, i.e. asagreed in the lease contract, revenue is recognized when related payments are received or evidence of collectionsis obtained.Different business models of similar business resulted in different accounting policies for revenue recognitionN/A

40. Government subsidy

40.1Category of government subsidy and accounting treatment

Governments subsidy of the Company refer to the monetary and non-monetary assets obtained from governmentfor free (excluding the capital invested by government as an owner). If the government grants are monetary assets,it shall be measured according to the amount received or receivable. If the government grants are non-monetaryassets, it shall be measured at fair value; if the fair value cannot be obtained reliably, it shall be measured at thenominal amount.

Government grants related to daily activities are included in other income in accordance with the economicbusiness. Government grants not related to daily activities are included in the non-operating income andexpenditure.

Government grants that the government documents clearly stipulate to be used for the purchase and establishmentor forming long-term assets in other way are recognized as government grants related to assets. For thegovernment grants that the government documents do not clearly specify the subsidy target and can formlong-term assets, the part corresponding to the asset value is recognized as the government grants related to theassets, and the rest is recognized as the government grants related to the income. For the government grants whichare difficult to be distinguished, recognize the whole as the government grants related to the income. Governmentgrants related to assets are recognized as deferred income. The amount recognized as deferred income is includedin the current profit and loss in a reasonable and systematic manner within the useful life of the relevant asset.

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Government grants other than government grants related to assets are recognized as government grants related toincome. If the government grants related to the income are used to compensate the related expenses or losses ofthe enterprise in the future period, recognize them as deferred income and include them in the current profit andloss during the period of recognizing the related expenses. The government grants used to compensate the relevantexpenses or losses incurred by the enterprise are directly included in the current profit and loss.

The Company obtained the policy preferential loan interest subsidy, and the finance allocated the interest subsidyfunds to the loan bank, and the loan bank provides loans to the Company at a preferential interest rate, take theactual amount of the loan received as the entry value of the loan, and calculate the relevant borrowing costsaccording to the loan principal the policy preferential interest rate. If the finance directly appropriates the interestsubsidy funds to the Company, the Company will offset the relevant borrowing costs with the correspondinginterest subsidy.

40.2 Time points to recognize the government grants

Government grants are recognized when they meet the conditions attached to government grants and can bereceived. Government grants measured in accordance with the amount receivable are recognized when there isconclusive evidence at the end of the period that it meets the relevant conditions stipulated in the financial supportpolicy and is expected to receive financial support funds. Other government grants other than government grantsmeasured in accordance with the receivable amount are recognized when the grant is actually received.

41. Deferred income tax asset / deferred income tax liability

41.1 Where there is difference between the carrying amount of the assets or liabilities and its tax base, (as for anitem that has not been recognized as an asset or liability, if its tax base can be determined in light of the tax law,the tax base shall recognized as the difference) the deferred income tax and deferred income tax liabilities shall bedetermined according to the applicable tax rate in period of assets expected to recover or liability expected to payoff.

41.2 The deferred income tax assets shall be recognized to the extent of the amount of the taxable income which itis most likely to obtain and which can be deducted from the deductible temporary difference. On balance sheetdate, if there have concrete evidence of obtaining, in future period, enough taxable amounts to deduct thedeductible temporary difference, the un-confirmed deferred income tax assets in previous accounting period shallbe recognized. If there has no enough taxable amounts, obtained in future period, to deducted the deferred incometax assets, book value of the deferred income tax assets shall be kept in decreased.

41.3The taxable temporary differences related to the investments of subsidiary companies and associated

SEMI-ANNUAL REPORT 2021

enterprises shall recognized as deferred income tax liability, unless the Company can control the time of thereverse of temporary differences and the temporary differences are unlikely to be reversed in the expected future.As for the deductible temporary difference related to the investment of the subsidiary companies and associatedenterprises, deferred income tax assets shall be recognized while the temporary differences are likely to bereversed in the expected future and it is likely to acquire any amount of taxable income tax that may be used formaking up the deductible temporary differences.

42. Leasing

(1) Accounting treatment for operating lease

Operating lease payments are recognized on a straight-line basis over the term of the relevant lease, and are eitherincluded in the cost of related asset or charged to profit or loss for the period.

(2) Accounting treatment for finance lease

Accounting treatment for finance lease: At the commencement of the lease term, the Group records the leasedasset at an amount equal to the lower of the fair value of the leased asset and the present value of the minimumlease payments. The difference between the recorded amounts is accounted for as unrecognized finance charge,using the effective interest method amortization during the lease term. Minimum lease payments deductingunrecognized financing charges are listed as long-term payable.

43. Other important accounting policy and estimates

N/A

44. Changes in important accounting policies and estimates

(1) Changes in important accounting policies

√ Applicable □ Not applicable

Content and reason of changes in accounting policiesApproval procedureNote

44.1 Change in accounting policies and basis

The revised Accounting Standards for Business Enterprise No. 14- Revenue (hereinafter referred to as NewRevenue Standard) was released by the Ministry of Finance in 2017. the Company implemented the New RevenueStandards and Notice since 1 Jan. 2020. and relevant content of the accounting polices are adjusted.

SEMI-ANNUAL REPORT 2021

The new revenue standards replaced the "Accounting Standards for Business Enterprises No. 14-Revenue" and"Accounting Standards for Business Enterprises No. 15-Construction Contracts" (collectively referred to as the"original revenue standards") promulgated by the Ministry of Finance in 2006. Under the original revenuestandards, the Company used the transfer of risk rewards as the judgment standard for the timing of revenuerecognition. The new revenue standards introduce the “five-step method” of revenue recognition andmeasurement, and provide more guidance for specific transactions or events. Under the new revenue standards,the Company uses the transfer of control as the judgment standard for revenue recognition. For the specificaccounting policies of revenue recognition and measurement, please refer to "Note III. (22) Revenue".

The Company has adjusted relevant accounting policies in accordance with the specific provisions of the newrevenue standards on specific matters or transactions. According to the provisions of the new revenue standards,the contract assets or contract liabilities are listed in the balance sheet based on the relationship betweenperformance obligations and customer payments. At the same time, the Company provides more disclosures onincome-related information disclosure requirements in accordance with the new revenue standards, such asinformation related to important contracts or business and performance obligations and information related totransaction prices allocated to the remaining performance obligations, including the usual performance time ofperformance obligations, the important payment terms, the nature of the goods the company promises to transfer(including the explanation of whether the company is an agent), the company’s expected return to customers andother similar obligations, the expected refund to the customer assumed by the company and other similarobligations, the type of quality assurance and related obligations.

The Company reviews revenue sources and customer contract procedures to assess the impact of the new revenuestandards on financial statements. The Company’s revenue is mainly derived from the sale of goods, and revenueis recognized when the goods are delivered or the service acceptance is completed. The adoption of the newrevenue standards has no significant impact on the Company except for the presentation of financial statements.

(2)Changes in important accounting estimates

□ Applicable √Not applicable

(3) Adjustment the financial statements at the beginning of the first year of implementation of new leasingstandards since 2021ApplicableWhether needs to adjust the balance sheet at the beginning of the year

□Yes √No

SEMI-ANNUAL REPORT 2021

Explanation of reasons for not requiring the adjustment of beginning balance sheet accountNo impact items

(4) Retrospective adjustment of early comparison data description when initially implemented the newleasing standards since 2021

□ Applicable √ Not applicable

45. Other

VI. Taxes

1. Major tax and tax rate

TaxesTaxation basisTax rate
VATSales revenue13%, 9%, 6%, 5%, 3%
Consumption taxTurnover tax payable7%
Corporate income taxTaxable income25%, 15%
Educational surtaxTurnover tax payable3%
Local educational surtaxTurnover tax payable2%, 1.5%
Property tax70% of original value of the property1.2%

Explain the different taxation entity of the enterprise income tax

Taxation entityIncome tax rate

2. Tax preferences

According to the “Measures for the Determination of High-tech Enterprises”, and through the enterpriseapplication, expert review, and public announcement and other procedures, the Company’s wholly-ownedsubsidiary, Wuhan Hengfa Technology Co., Ltd., has been identified as a high-tech enterprise, and obtained the“High-tech Enterprise Certificate” jointly issued by the Science and Technology Department of Hubei Province,Hubei Provincial Finance Department, Hubei Provincial Office, SAT, and Local Taxation Bureau of HubeiProvince on December 1, 2020, the certificate number is GR202042003237, which is valid for 3 years. Theapplicable corporate income tax rate of the subsidiary Wuhan Hengfa Technology Co., Ltd. for 2021was 15%.

3. Other

Nil

SEMI-ANNUAL REPORT 2021

VII. Notes to main items in consolidated financial statement

1. Monetary fund

In RMB

ItemEnding balanceOpening balance
Cash on hand903.40138,673.02
Bank deposit16,620,293.8030,141,013.39
Other monetary fund42,990,989.0230,688,367.17
Total59,612,186.2260,968,053.58

Other explanationOther currency funds are bank acceptance bill margin

2. Trading financial assets

In RMB

ItemEnding balanceOpening balance
Including:
Including:

Other note:

3. Derivative financial assets

In RMB

ItemEnding balanceOpening balance

Other note:

4. Note receivable

(1) Category

In RMB

ItemEnding balanceOpening balance
Commercial acceptance bill491,683.7820,240,464.79
Total491,683.7820,240,464.79

In RMB

CategoryEnding balanceOpening balance
Book balanceBad debt provisionBook valueBook balanceBad debt provisionBook value

SEMI-ANNUAL REPORT 2021

AmountProportionAmountAccrual ratioAmountProportionAmountAccrual ratio
Including:
Including:

Accrual of bad debt provision on single basis:

In RMB

NameEnding balance
Book balanceBad debt provisionAccrual ratioAccrual causes

Accrual of bad debt provision on portfolio:

In RMB

NameEnding balance
Book balanceBad debt provisionAccrual ratio

Explanation on portfolio basis:

If the provision for bad debts of note receivable is made in accordance with the general model of expected credit losses, please refer tothe disclosure of other receivables to disclose related information about bad-debt provisions:

□ Applicable √Not applicable

(2) Bad debt provision accrual, collected or reversal in the period

Bad debt provision accrual in the period:

In RMB

CategoryOpening balanceAmount changed in the periodEnding balance
AccrualCollected or reversalWritten-offOther

Including major amount bad debt provision that collected or reversal in the period:

□ Applicable √Not applicable

(3) Notes receivable that the company has pledged at the end of the period

In RMB

ItemAmount pledge at period-end

(4) Notes endorsement or discount and undue on balance sheet date

In RMB

ItemAmount derecognition at period-endAmount not derecognition at period-end
Commercial acceptance bill211,799.13
Total211,799.13

SEMI-ANNUAL REPORT 2021

(5) Notes transfer to account receivable due for failure implementation by drawer at period-end

In RMB

ItemAmount transfer to account receivable at period-end

Other note

(6) Note receivable actually written-off in the period

In RMB

ItemWritten-off amount

Written-off situation of important notes receivable:

In RMB

NameNature of notes receivableWritten-off amountWritten-off reasonWritten-off procedure performedWhether the payment is generated by related party transactions

Notes receivable written-off description:

5. Account receivable

(1) Category

In RMB

CategoryEnding balanceOpening balance
Book balanceBad debt provisionBook valueBook balanceBad debt provisionBook value
AmountProportionAmountAccrual ratioAmountProportionAmountAccrual ratio
Account receivable with bad debt provision accrual on a single basis13,146,290.1813,156,183.96100.00%0.0013,146,290.189.31%13,146,290.18100.00%0.00
Including:
Account receivable with bad debt provision accrual by combination135,770,727.159,893.780.01%135,750,939.59128,073,805.5790.69%9,893.780.01%128,063,911.79
Including:
Combination 1:135,779,893.70.01%135,75128,0790.69%9,893.70.01%128,063,

SEMI-ANNUAL REPORT 2021

Take account ages of receivables as a combination of credit risk characteristics0,727.1580,939.593,805.578911.79
Total148,917,017.3313,166,077.74135,750,939.59141,220,095.75100.00%13,156,183.968.66%128,063,911.79

Accrual of bad debt provision on single basis: 13,146,290.18

In RMB

NameEnding balance
Book balanceBad debt provisionAccrual ratioAccrual causes
Shenzhen Portman Bowling Club Co., Ltd.2,555,374.752,555,374.75100.00%Uncollectible
Hong Kong Haowei Industrial Co., Ltd.1,870,887.181,870,887.18100.00%Uncollectible
TCL ACE ELECTRIC APPLIANCE (HUIZHOU) CO., LTD.1,325,431.751,325,431.75100.00%Uncollectible
Qingdao Haier Parts Procurement Co., Ltd.1,225,326.151,225,326.15100.00%Uncollectible
SKYWORTH Multimedia (Shenzhen) Co., Ltd.579,343.89579,343.89100.00%Uncollectible
Shenzhen Huixin Video Technology Co., Ltd.381,168.96381,168.96100.00%Uncollectible
Shenzhen Wandelai Digital Technology Co., Ltd.351,813.70351,813.70100.00%Uncollectible
Shenzhen Dalong Electronic Co., Ltd.344,700.00344,700.00100.00%Uncollectible
Shenzhen Keya Electronic Co., Ltd.332,337.76332,337.76100.00%Uncollectible
Shenzhen Qunping Electronic Co., Ltd.304,542.95304,542.95100.00%Uncollectible
China Galaxy Electronics (Hong288,261.17288,261.17100.00%Uncollectible

SEMI-ANNUAL REPORT 2021

Kong) Co., Ltd.
Dongguan Weite Electronic Co., Ltd.274,399.80274,399.80100.00%Uncollectible
Chuangjing247,811.87247,811.87100.00%Uncollectible
Hong Kong New Century Electronics Co., Ltd.207,409.40207,409.40100.00%Uncollectible
Shenyang Beitai Electronic Co., Ltd.203,304.02203,304.02100.00%Uncollectible
Beijing Xinfang Weiye Technology Co., Ltd.193,000.00193,000.00100.00%Uncollectible
TCL Electronics (Hong Kong) Co., Ltd.145,087.14145,087.14100.00%Uncollectible
Huizhou TCL Xinte Electronics Co., Ltd.142,707.14142,707.14100.00%Uncollectible
Sky Worth – RGB Electronic Co., Ltd.133,485.83133,485.83100.00%Uncollectible
Other2,039,896.722,039,896.72100.00%Uncollectible
Total13,146,290.1813,146,290.18--

Accrual of bad debt provision on single basis:

In RMB

NameEnding balance
Book balanceBad debt provisionAccrual ratioAccrual causes

Accrual of bad debt provision on portfolio: 9893.78

In RMB

NameEnding balance
Book balanceBad debt provisionAccrual ratio
Within one year
1-2 years50,840.842,542.045.00%
2-3 years65,934.116,593.4110.00%
Over 3 years2,527.77758.3330.00%
Total119,302.729,893.78--

Explanation on portfolio basis:

If the provision for bad debts of accounts receivable is made in accordance with the general model of expected credit losses, pleaserefer to the disclosure of other receivables to disclose related information about bad-debt provisions:

□ Applicable √Not applicable

By account age

SEMI-ANNUAL REPORT 2021

In RMB

Account agesBook balance
Within one year (one year included)135,313,612.32
1-2 years316,209.95
2-3 years65,934.11
Over 3 years13,221,260.95
3-4 years74,970.77
Over 5 years13,146,290.18
Total148,917,017.33

(2) Bad debt provision accrual, collected or reversal in the period

Bad debt provision accrual in the period:

In RMB

CategoryOpening balanceAmount changed in the periodEnding balance
AccrualCollected or reversalWritten-offOther

Including major amount bad debt provision that collected or reversal in the period:

In RMB

CompanyAmount collected or reversalWay of collection

(3) Actual written-off accounts receivable in the current period

In RMB

ItemWritten-off amount

Including the important accounts receivable written-off situation:

In RMB

NameNature of accounts receivableWritten-off amountWritten-off reasonWritten-off procedure performedWhether the payment is generated by related party transactions

Written-off description of accounts receivable:

(4) Top 5 account receivables collected by arrears party at ending balance

In RMB

CompanyEnding balance of account receivableProportion in total account receivables at period-endEnding balance of bad debt provision

SEMI-ANNUAL REPORT 2021

Qingdao Haidayuan Purchasing Service Co., Ltd.55,398,955.6141.00%
Hong Kong Yutian International Investment Co., Ltd.29,037,251.5621.00%
Hefei Hangjia Display Technology Co., Ltd.20,818,896.9915.00%
TCL Air Conditioner (Wuhan) Co., Ltd.17,304,577.4313.00%
Viewsonic International Copera9,050,774.077.00%
Total131,610,455.6697.00%

(5) Account receivable derecognition due to financial assets transfer

Nil

(6) Assets and liabilities resulted by account receivable transfer and continues involvementNilOther note:

Nil

6. Receivable financing

In RMB

ItemEnding balanceOpening balance
Haier Electronic Acceptance5,774,948.6910,057,385.11
Total5,774,948.6910,057,385.11

Receivable financing Changes in the period and changes in fair value

□ Applicable √Not applicable

If the provision for bad debts of accounts receivable is made in accordance with the general model of expected credit losses, pleaserefer to the disclosure of other receivables to disclose related information about bad-debt provisions:

□ Applicable √Not applicable

Other explanation:

SEMI-ANNUAL REPORT 2021

7. Accounts paid in advance

(1) By account age

In RMB

Account agesEnding balanceOpening balance
AmountProportionAmountProportion
Within one year31,776,308.1499.42%39,458,164.6199.52%
1-2 years102,781.000.32%102,781.000.27%
2-3 years82,309.500.26%82,309.500.21%
Over 3 years0.00
Total31,961,398.64--39,643,255.11--

Explanation on reasons of failure to settle on important account paid in advance with age over one year:

Nil

(2) Top 5 account paid in advance at ending balance by prepayment object

CompanyEnding balanceProportion in accounts paid in advance
Hefei Hangjia Display Technology Co., Ltd.10,981,759.0034%
AU Optronics Co., Ltd.8,231,592.5226%
Nanjing CEC Panda LCD Technology Co., Ltd.3,243,380.0010%
Guangzhou Houxiang Electronic Technology Co., Ltd.820,800.003%
Gree Precision Mold (Wuhan) Co., Ltd.745,620.002%

Other explanation:

Nil

8. Other account receivable

In RMB

ItemEnding balanceOpening balance
Other account receivable22,540,779.204,466,949.96
Total22,540,779.204,466,949.96

1) Category of interest receivable

In RMB

ItemEnding balanceOpening balance

SEMI-ANNUAL REPORT 2021

2) Significant overdue interest

In RMB

BorrowerEnding balanceOverdue timeReason for overdueWhether there is impairment and its judgment basis

Other note:

Nil

3) Accrual of bad debt provision

□ Applicable √Not applicable

(2) Dividend receivable

1) Category of dividend receivable

In RMB

Item (or invested unit)Ending balanceOpening balance

2) Important dividend receivable with account age over one year

In RMB

Item (or invested unit)Ending balanceAccount ageReasons for non-recoveryWhether there is impairment and its judgment basis

3) Accrual of bad debt provision

□ Applicable √Not applicable

Other note:

(3) Other account receivable

1) Other account receivable by nature

In RMB

NatureEnding book balanceOpening book balance
Margin & deposit1,381,560.001,681,688.00
Borrow money2,889,381.442,124,073.12
Intercourse funds23,785,393.798,924,093.42

SEMI-ANNUAL REPORT 2021

Rental receivable8,311,911.116,224,167.48
Other1,024,034.71364,429.79
Less: Bad debt provision-14,851,501.85-14,851,501.85
Total22,540,779.204,466,949.96

2) Accrual of bad debt provision

In RMB

Bad debt provisionPhase IPhase IIPhase IIITotal
Expected credit losses over next 12 monthsExpected credit losses for the entire duration (without credit impairment occurred)Expected credit losses for the entire duration (with credit impairment occurred)
Balance on1 Jan. 2021117.7514,812,059.7914,851,501.85
Balance of 1 Jan. 2021 in the period————————
Balance on Dec. 31, 2021117.7514,812,059.7914,851,501.85

Change of book balance of loss provision with amount has major changes in the period

□ Applicable √Not applicable

By account age

In RMB

Account agesBook balance
Within one year (one year included)21,174,519.27
1-2 years297,671.40
2-3 years312,212.44
Over 3 years15,607,877.94
3-4 years1,446,706.00
4-5 years943,020.00
Over 5 years13,218,151.94
Total37,392,281.05

3) Bad debt provision accrual, collected or reversal in the period

Bad debt provision accrual in the period:

In RMB

CategoryOpeningAmount changed in the periodEnding balance

SEMI-ANNUAL REPORT 2021

balanceAccrualCollected or reversalWritten-offOther

Including the important amount collected or switches back in the period:

In RMB

CompanyAmount collected or switches backWay of collection

4) The actual written-off other receivables in the current period

In RMB

ItemWritten-off amount

Including the important written-off situation of other receivables:

In RMB

NameNature of other receivablesWritten-off amountWritten-off reasonWritten-off procedure performedWhether the payment is generated by related party transactions

Description of other receivables written-off:

5) Top 5 other receivables collected by arrears party at ending balance

In RMB

CompanyNatureEnding balanceAccount agesProportion in total other receivables at period-endEnding balance of bad debt provision
PortmanRental receivable4,021,734.22Over 3 years18.00%4,021,734.22
Shenzhen Jifang Investment Co., LtdRental receivable1,380,608.00Over 3 years6.00%1,380,608.00
Fujian Jielian Electronics Co., Ltd.Margin & deposit800,000.00Over 3 years4.00%240,000.00
Compensation for traffic accidentsIntercourse funds555,785.81Over 3 years2.00%555,785.81
Hebei Botou CourtIntercourse funds520,021.00Over 3 years2.00%520,021.00
Total--7,278,149.03--6,718,149.03

6) Receivables involving government subsidies

In RMB

SEMI-ANNUAL REPORT 2021

NameGovernment subsidy itemEnding balanceEnding account ageEstimated time, amount and basis of receipt

7) Other receivable for termination of confirmation due to the transfer of financial assets

8) The amount of assets and liabilities that are transferred other receivable and continued to be involved

Other note:

9. Inventories

Whether companies need to comply with the disclosure requirements of the real estate industryNo

(1) Category

In RMB

ItemEnding balanceOpening balance
Book balanceInventories fall provision or contract performance costs impairment provisionBook valueBook balanceInventories fall provision or contract performance costs impairment provisionBook value
Raw materials67,070,060.382,191,320.9264,878,739.4639,735,101.271,691,320.9238,043,780.35
Inventory goods55,795,276.782,523,369.8253,271,906.9627,562,913.381,673,369.8225,889,543.56
Homemade semi-finished products11,750,725.5429,363.7311,721,361.816,213,029.5629,363.736,183,665.83
Low priced and easily worn articles156,274.66110,622.3845,652.28159,646.13110,622.3849,023.75
Total134,772,337.364,854,676.85129,917,660.5173,670,690.343,504,676.8570,166,013.49

(2) Inventories fall provision or contract performance costs impairment provision

In RMB

ItemOpeningCurrent increasedCurrent decreasedEnding balance

SEMI-ANNUAL REPORT 2021

balanceAccrualOtherReversal or write-offOther
Raw materials1,691,320.92500,000.002,191,320.92
Inventory goods1,673,369.82850,000.002,523,369.82
Homemade semi-finished products29,363.7329,363.73
Low priced and easily worn articles110,622.38110,622.38
Total3,504,676.851,350,000.004,854,676.85

Nil

(3) Explanation on capitalization of borrowing costs at ending balance of inventoryNil

(4) Assets completed without settlement from construction contract at period-endNil

10. Contract assets

In RMB

ItemEnding balanceOpening balance
Book balanceProvision for impairmentBook valueBook balanceProvision for impairmentBook value

The amount and reasons for major changes in the book value of contract assets during the current period:

In RMB

ItemChange amountReason for change

If the provision for bad debts of contract assets is made in accordance with the general model of expected credit losses, please refer tothe disclosure of other receivables to disclose related information about bad-debt provisions:

□ Applicable √Not applicable

Accrual provision for impairment of contract assets in the current period

In RMB

ItemCurrent accrualCurrent reversalCurrent resell/Written-offReason

Other note:

SEMI-ANNUAL REPORT 2021

11. Assets held for sale

In RMB

ItemEnding book balanceProvision for impairmentEnding book valueFair valueEstimated disposal costEstimated disposal time

Other note:

12. Non-current assets due within one year

In RMB

ItemEnding balanceOpening balance

Important debt investment/other debt investment

In RMB

Creditor’s Rights ItemEnding balanceOpening balance
Face valueCoupon rateReal interest rateExpiry dateFace valueCoupon rateReal interest rateExpiry date

Other note:

13. Other current assets

In RMB

ItemEnding balanceOpening balance
Reclassification of input tax to be deducted741,380.214,255,643.19
Total741,380.214,255,643.19

Other explanation:

14. Debt investment

In RMB

ItemEnding balanceOpening balance
Book balanceProvision for impairmentBook valueBook balanceProvision for impairmentBook value

Important debt investment

In RMB

Creditor’s Rights ItemEnding balanceOpening balance
Face valueCoupon rateReal interest rateExpiry dateFace valueCoupon rateReal interest rateExpiry date

SEMI-ANNUAL REPORT 2021

Provision for impairment accrual

In RMB

Bad debt provisionPhase IPhase IIPhase IIITotal
Expected credit losses over next 12 monthsExpected credit losses for the entire duration (without credit impairment occurred)Expected credit losses for the entire duration (with credit impairment occurred)
Balance of 1 Jan. 2021 in the period————————

Change of book balance of loss provision with amount has major changes in the period

□ Applicable √Not applicable

Other note:

15. Other debt investment

In RMB

ItemOpening balanceAccrued interestFair value changes in this periodEnding balanceCostCumulative fair value changesAccumulated loss reserves recognized in other comprehensive incomeNote

Important other debt investment

In RMB

Other Creditor’s Rights ItemEnding balanceOpening balance
Face valueCoupon rateReal interest rateExpiry dateFace valueCoupon rateReal interest rateExpiry date

Provision for impairment accrual

In RMB

Bad debt provisionPhase IPhase IIPhase IIITotal
Expected credit losses over next 12 monthsExpected credit losses for the entire duration (without credit impairment occurred)Expected credit losses for the entire duration (with credit impairment occurred)
Balance of 1 Jan. 2021 in the period————————

Change of book balance of loss provision with amount has major changes in the period

SEMI-ANNUAL REPORT 2021

□ Applicable √Not applicable

Other note:

16. Long-term receivables

(1) Long-term receivables

In RMB

ItemEnding balanceOpening balanceDiscount rate range
Book balanceBad debt provisionBook valueBook balanceBad debt provisionBook value

Bad debt provision impairment

In RMB

Bad debt provisionPhase IPhase IIPhase IIITotal
Expected credit losses over next 12 monthsExpected credit losses for the entire duration (without credit impairment occurred)Expected credit losses for the entire duration (with credit impairment occurred)
Balance of 1 Jan. 2021 in the period————————

Change of book balance of loss provision with amount has major changes in the period

□ Applicable √Not applicable

(2) Long-term receivables derecognized due to the transfer of financial assets

(3) The amount of assets and liabilities formed by the transfer of long-term receivables and continuedinvolvement

Other note

17. Long-term equity investment

In RMB

EnterpriseOpening balance (book value)Current changes (+, -)Ending balance (book value)Ending balance of depreciation reserves
Additional investmentCapital reductionInvestment gain/loss recognized underOther comprehensive income adjustmentOther equity changeCash dividend or profit announced to issuedImpairment accrualOther

SEMI-ANNUAL REPORT 2021

equity
I. Joint venture
II. Associated enterprise

Other note

18. Other equity instrument investment

In RMB

ItemEnding balanceOpening balance

Itemized disclosure of investment in non-trading equity instruments for the current period

In RMB

ItemRecognized dividend incomeCumulative gainAccumulated lossThe amount of comprehensive income transferred to retained earningsReasons designated as fair value measurement and its changes included in other comprehensive incomeReason for transferring comprehensive income to retained income

Other note:

19. Other non-current financial assets

In RMB

ItemEnding balanceOpening balance

Other note:

20. Investment real estate

(1) Investment real estate measured at cost

√ Applicable □ Not applicable

In RMB

ItemHouse and buildingLand use rightConstruction in processTotal
I. Original book value
1. Opening balance133,661,686.94133,661,686.94
2. Current increased
(1) Outsourcing

SEMI-ANNUAL REPORT 2021

(2) Inventory\fixed assets\construction in process transfer-in
(3) Increased by combination
3. Current decreased
(1) Disposal
(2) Other transfer-out
4. Ending balance133,661,686.94133,661,686.94
II. Accumulated depreciation and accumulated amortization
1. Opening balance86,437,024.6786,437,024.67
2. Current increased864,165.14864,165.14
(1) Accrual or amortization864,165.14864,165.14
3. Current decreased
(1) Disposal
(2) Other transfer-out
4. Ending balance87,301,189.8187,301,189.81
III. Impairment provision
1. Opening balance
2. Current increased
(1) Accrual
3. Current decreased
(1) Disposal
(2) Other transfer-out
4. Ending balance

SEMI-ANNUAL REPORT 2021

IV. Book value
1. Ending book value46,360,497.1346,360,497.13
2. Opening book value47,224,662.2747,224,662.27

(2) Investment real estate measured by fair value

□ Applicable √Not applicable

(3) Investment real estate without property certification held

In RMB

ItemBook valueReason without property certification held

Other noteNil

21. Fixed assets

In RMB

ItemEnding balanceOpening balance
Fixed assets98,619,554.39100,747,972.84
Disposal of fixed assets92,857,471.6992,857,471.69
Total191,477,026.08193,605,444.53

(1) Fixed asset

In RMB

ItemHouse buildingMachinery equipmentMeans of transportationOffice equipmentInstrument equipmentTool equipmentMold equipmentTotal
I. Original book value
1. Opening balance73,200,617.4195,162,467.543,589,808.827,286,291.603,231,378.039,160,548.0524,950,960.45216,582,071.90
2. Current increased11,482,624.28132,653.66144,179.07149,485.441,310,026.381,896,734.1515,115,702.98
(1) Purchasing11,482,624.28132,653.66144,179.07149,485.441,310,026.381,896,734.1515,115,702.98
(2) Constructio

SEMI-ANNUAL REPORT 2021

n in process transfer-in
(3) Increased by combination
3. Current decreased10,836,574.68122,034.1953,535.2737,852.46818,967.3411,868,963.94
(1) Disposal or scrapping
Transfer to Zhengzhou branch10,836,574.68122,034.1953,535.2737,852.46818,967.3411,868,963.94
4. Ending balance73,200,617.4194,906,526.353,600,428.297,376,935.403,343,011.019,651,607.0926,847,694.60218,926,820.15
II. Accumulative depreciation
1. Opening balance20,835,498.9262,315,100.162,530,234.216,270,774.212,684,698.254,790,714.7016,407,078.61115,834,099.06
2. Current increased952,782.693,955,263.2796,067.6378,981.6978,665.44767,933.591,894,766.497,824,460.80
(1) Accrual952,782.693,955,263.2796,067.6378,981.6978,665.44767,933.591,894,766.497,824,460.80
3. Current decreased2,194,672.6044,847.6429,287.019,781.57170,714.492,449,303.31
(1) Disposal or scrapping
Transfer to Zhengzhou branch2,194,672.6044,847.6429,287.019,781.57170,714.492,449,303.31
4. Ending21,788,28164,075,6902,581,454.6,320,468.2,753,582.5,387,933.18,301,845121,209,25

SEMI-ANNUAL REPORT 2021

balance.61.8320891280.106.55
III. Depreciation reserves
1. Opening balance
2. Current increased
(1) Accrual
3. Current decreased
(1) Disposal or scrapping
4. Ending balance
IV. Book value
1. Ending book value51,412,335.8031,732,826.311,018,974.091,056,466.51589,428.894,263,673.298,545,849.5098,619,554.39
2. Opening book value52,365,118.4932,847,367.381,059,574.611,015,517.39546,679.784,369,833.358,543,881.84100,747,972.84

(2) Temporarily idle fixed assets

In RMB

ItemOriginal book valueAccumulated depreciationProvision for impairmentBook valueNote
House building

(3) Fixed assets leasing-out by operational lease

In RMB

ItemEnding book value
House building

SEMI-ANNUAL REPORT 2021

(4) Fixed assets without property certification held

In RMB

ItemBook valueReason without property certification held

Other note

(5) Disposal of fixed assets

In RMB

ItemEnding balanceOpening balance
Renovation of Gongming Huafa Electric Town92,857,471.6992,857,471.69
Total92,857,471.6992,857,471.69

Other explanation

22. Construction in process

In RMB

ItemEnding balanceOpening balance
Construction in process740,000.00740,000.00
Total740,000.00740,000.00

(1) Construction in process

In RMB

ItemEnding balanceOpening balance
Book balanceImpairment provisionBook valueBook balanceImpairment provisionBook value
Huafa Building Reconstruction Project240,000.00240,000.00240,000.00240,000.00
Gongming Electronic City Reconstruction Project500,000.00500,000.00500,000.00500,000.00
Total740,000.00740,000.00740,000.00740,000.00

SEMI-ANNUAL REPORT 2021

(2) Changes of major projects under construction

In RMB

ItemBudgetOpening balanceCurrent increasedFixed assets transfer-in in the PeriodOther decreased in the PeriodEnding balanceProportion of project investment in budgetProgressAccumulated amount of interest capitalizationincluding: interest capitalized amount of the yearInterest capitalization rate of the yearSource of funds

(3) The provision for impairment of construction projects

In RMB

ItemCurrent accrual amountAccrual reason

Other note

(4) Engineering materials

In RMB

ItemEnding balanceOpening balance
Book balanceProvision for impairmentBook valueBook balanceProvision for impairmentBook value

Other note:

23. Productive biological assets

(1) Productive biological assets measured by cost

□ Applicable √Not applicable

(2) Productive biological assets measured by fair value

□ Applicable √Not applicable

24. Oil and gas assets

□ Applicable √Not applicable

SEMI-ANNUAL REPORT 2021

25. Right to use assets

In RMB

ItemTotal

Other note:

26. Intangible assets

(1) Intangible assets

In RMB

ItemLand use rightPatent rightNon-patented technologyComputer softwareTotal
I. Original book value
1. Opening balance55,415,814.363,113,396.4158,529,210.77
2. Current increased
(1) Purchasing
(2) Internal R&D
(3) Increased by combination
3. Current decreased
(1) Disposal
4. Ending balance
II. Accumulated amortization
1. Opening balance16,651,035.42948,089.6517,599,125.07
2. Current increased
(1) Accrual662,350.40150,518.73
3. Current

SEMI-ANNUAL REPORT 2021

decreased
(1) Disposal
4. Ending balance17,313,385.821,098,608.3818,413,988.90
III. Depreciation reserves
1. Opening balance109,427.90109,427.90
2. Current increased
(1) Accrual62,388.7562,388.75
3. Current decreased
(1) Disposal
4. Ending balance171,816.65171,816.65
IV. Book value
1. Ending book value38,102,428.541,842,971.3839,945,399.92
2. Opening book value38,764,778.942,055,878.8640,820,657.80

The proportion of intangible assets form by internal R&D in total book value of intangible assets at period-end 0.00%

(2) The situation of land use rights that have not completed the ownership certificate

In RMB

ItemBook valueReason without property certification held

Other note:

27. Development expenditure

In RMB

ItemOpening balanceIncrease in the current periodDecrease in the current periodEnding balance
Internal development expenditurOtherRecognized as intangibleTransferred into current profit and

SEMI-ANNUAL REPORT 2021

eassetsloss
Total

Other note

28. Goodwill

(1) Goodwill original book value

In RMB

Invested name or matters forming goodwillOpening balanceIncrease in the current periodDecrease in the current periodEnding balance
Formed by business combinationDispose
Total

(2) Goodwill provision for impairment

In RMB

Invested name or matters forming goodwillOpening balanceIncrease in the current periodDecrease in the current periodEnding balance
AccrualDispose
Total

Information about the asset group or combination of asset groups where the goodwill is locatedExplain the process of goodwill impairment testing, key parameters (such as the growth rate of the forecast period when the presentvalue of future cash flows are expected, the growth rate of the stable period, the profit rate, the discount rate, the forecast period, etc.)and the confirmation method of the impairment loss of goodwill:

The impact of goodwill impairment testingOther note

29. Long-term deferred expenses

In RMB

ItemOpening balanceCurrent increasedAmortized in PeriodOther decreasedEnding balance
Amortization of cloud service fees77,445.31660,284.00114,127.72623,601.59

SEMI-ANNUAL REPORT 2021

Total77,445.31660,284.00114,127.72623,601.59

Other explanationNew contract renewal this year

30. Deferred income tax assets/Deferred income tax liabilities

(1) Deferred income tax assets without offset

In RMB

ItemEnding balanceOpening balance
Deductible temporary differencesDeferred income tax assetsDeductible temporary differencesDeferred income tax assets
Provision for assets impairment28,458,252.746,761,085.3828,458,252.746,761,085.38
Accrual liability64,411.0016,102.7564,411.0016,102.75
Deferred income4,043,640.00606,546.004,043,640.00606,546.00
Total32,566,303.747,383,734.1332,566,303.747,383,734.13

(2) Deferred income tax liabilities that are not offset

In RMB

ItemEnding balanceOpening balance
Taxable temporary differencesDeferred income tax liabilitiesTaxable temporary differencesDeferred income tax liabilities

(3) Amount of deferred income tax asset and deferred income tax liability after trade-off

In RMB

ItemTrade-off between the deferred income tax assets and liabilitiesEnding balance of deferred income tax assets or liabilities after off-setTrade-off between the deferred income tax assets and liabilities at period-beginOpening balance of deferred income tax assets or liabilities after off-set
Deferred income tax assets7,383,734.137,383,734.13

(4) Deferred income tax asset without recognized

In RMB

ItemEnding balanceOpening balance
Deductible temporary differences3,163,837.813,163,837.81

SEMI-ANNUAL REPORT 2021

Deductible loss4,098,904.694,098,904.69
Total7,262,742.507,262,742.50

(5) Deductible losses of un-recognized deferred income tax assets expired on the followed year

In RMB

YearEnding amountOpening amountNote
2021
2022742,401.79742,401.79
2023404,207.57404,207.57
20241,318,067.591,318,067.59
20251,634,227.741,634,227.74
Total4,098,904.694,098,904.69--

Other explanation:

31. Other non-current assets

In RMB

ItemEnding balanceOpening balance
Book balanceImpairment provisionBook valueBook balanceImpairment provisionBook value
Advance payment for equipment66,000.0066,000.0066,000.0066,000.00
Total66,000.0066,000.0066,000.0066,000.00

Other explanation:

32. Short-term borrowings

(1) Category

In RMB

ItemEnding balanceOpening balance
Loan in pledge51,089,579.0012,527,808.00
Total51,089,579.0012,527,808.00

Explanation on category of short-term loans:

(2) Short-term loans that have been overdue and have not been repaid

The total amount of short-term loans that were overdue and not repaid at the end of the period was RMB 0.00, and the importantshort-term loans that were overdue and not repaid are as follows:

SEMI-ANNUAL REPORT 2021

In RMB

BorrowerEnding balanceBorrowing rateOverdue timeOverdue interest rate

Other note:

33. Trading financial liabilities

In RMB

ItemEnding balanceOpening balance
Including:
Including:

Other note:

34. Derivative financial liabilities

In RMB

ItemEnding balanceOpening balance

Other note:

35. Notes payable

In RMB

CategoryEnding balanceOpening balance
Bank acceptance draft42,983,519.3737,416,381.20
Total42,983,519.3737,416,381.20

Totally 0 Yuan due note payable are paid at period-end

36. Account payable

(1) Account payable

In RMB

ItemEnding balanceOpening balance
Within one year112,291,685.7785,862,573.31
Over one year3,764,952.8012,455,666.57
Total116,056,638.5798,318,239.88

(2) Major account payable over one year

In RMB

ItemEnding balanceReasons for non-payment or carry over

SEMI-ANNUAL REPORT 2021

Guangdong Yizumi Precision Injection Technology Co., Ltd.1,020,000.00Without settlement
Guangdong Jinhu Rili Polymer Material Co., Ltd.1,140,800.00Without settlement
Kunshan Zhongji Mould Co., Ltd.379,068.97Without settlement
Wuhan Jufutai Technology Co., Ltd.486,188.78Without settlement
Total3,026,057.75--

Other explanation:

37. Accounts received in advance

(1) Accounts received in advance

In RMB

ItemEnding balanceOpening balance

(2) Important accounts received in advance with account age over one year

In RMB

ItemEnding balanceReasons for outstanding or carry-over

Other note:

38. Contract liabilities

In RMB

ItemEnding balanceOpening balance
Sales received in advance79,195.3279,195.32
Lease received in advance686,360.65207,945.34
Total765,555.97287,140.66

Amount and reasons for significant changes in book value during the reporting period

In RMB

ItemChange AmountReason for change

39. Wage payable

(1) Wage payable

In RMB

ItemOpening balanceIncrease during the periodDecrease during the periodEnding balance

SEMI-ANNUAL REPORT 2021

I. Short-term benefits5,704,816.5331,508,630.6933,359,279.993,854,167.23
II. Post-employment benefits-defined contribution plans32,550.062,773,868.822,773,868.8232,550.06
III. Dismiss welfare434,715.43434,715.43
Total5,737,366.5934,717,214.9436,567,864.243,886,717.29

(2) Short-term benefits

In RMB

ItemOpening balanceIncrease during the periodDecrease during the periodEnding balance
1. Wages , bonuses, allowances and subsidies4,709,654.9226,915,030.1228,779,016.402,845,668.64
2. Employee benefits754.002,531,354.042,518,017.0614,090.98
3. Social insurance premium37,267.032,018,031.092,018,031.0937,267.03
Including: Medical insurance35,408.951,328,799.441,328,799.4435,408.95
Work injury insurance768.3074,744.9774,744.97768.30
Maternity insurance1,089.78116,269.95116,269.951,089.78
4. Housing accumulation fund24,310.0044,215.4444,215.4424,310.00
5. Labor union expenditure and personnel education expense932,830.58932,830.58
Total5,704,816.5331,508,630.6933,359,279.993,854,167.23

(3) Defined contribution plans

In RMB

ItemOpening balanceIncrease during the periodDecrease during the periodEnding balance
1. Basic endowment insurance31,361.592,657,598.872,657,598.8731,361.59
2. Unemployment1,188.47116,269.95116,269.951,188.47

SEMI-ANNUAL REPORT 2021

insurance
Total32,550.062,773,868.822,773,868.8232,550.06

Other explanation:

40. Taxes payable

In RMB

ItemEnding balanceOpening balance
VAT4,823,733.872,980,992.11
Corporate income tax5,551,836.246,558,810.68
Individual income tax4,493.9825,195.14
Urban maintenance and construction tax532,508.801,902,436.52
Property tax520,220.76318,618.51
Land use tax297,696.5133,280.48
Educational surtax229,248.99816,098.15
Local educational surtax122,702.85418,611.03
Dike fee1,665.001,665.00
Stamp tax33,429.9028,895.00
Disposal fund of waste electrical products821,530.001,120,040.00
Total12,939,066.9014,204,642.62

Other explanation:

41. Other accounts payable

In RMB

ItemEnding balanceOpening balance
Interest payable179,523.7226,335.66
Other payable36,894,932.7327,581,945.35
Total37,074,456.4527,608,281.01

(1) Interest payable

In RMB

ItemEnding balanceOpening balance
Interest of short-term loans payable179,523.7226,335.66
Total179,523.7226,335.66

Significant overdue and unpaid interest:

SEMI-ANNUAL REPORT 2021

In RMB

Loan unitOverdue amountReason for overdue

Other explanation:

Nil

(2) Dividend payable

In RMB

ItemEnding balanceOpening balance

Other note, including important dividends payable that have not been paid for more than 1 year, should disclose the reasons for thenon-payment:

Nil

(3) Other accounts payable

1) Other account payable by nature

In RMB

ItemEnding balanceOpening balance
Margin & deposit14,026,279.2211,523,316.67
Lease management fee3,227,985.19
Intercourse funds20,346,239.475,546,586.51
After sale and repairment1,027,879.011,454,341.68
Energy consumption1,443,603.28
Shipping1,494,535.03902,242.26
Reserve fund1,346,345.00
Other2,137,524.76
Total36,894,932.7327,581,945.35

2) Significant other account payable with over one year age

In RMB

ItemEnding balanceReasons for non-payment or carry over
Shenzhen SED Property Development Co., Ltd.1,853,393.35Without settlement
Shenzhen Huayongxing Environmental Protection Technology Co., Ltd.1,000,000.00Electricity fee deposit
Linghang Technology (Shenzhen) Co., Ltd656,345.28Without settlement

SEMI-ANNUAL REPORT 2021

Shenzhen Tongxing Electronics Co., Ltd.578,259.83Without settlement
Total4,087,998.46--

Other explanationNil

42. Liabilities held for sale

In RMB

ItemEnding balanceOpening balance

Other note:

43. Non-current liabilities due within one year

In RMB

ItemEnding balanceOpening balance
Long-term loans due within one year12,000,000.00
Total12,000,000.00

Other explanation:

Nil

44. Other current liabilities

In RMB

ItemEnding balanceOpening balance
Unterminated confirmation on note receivable211,799.1318,309,336.77
Pending sales tax13,636.04
Total211,799.1318,322,972.81

Changes in short-term bonds payable:

In RMB

Name of bondFace valueIssue dateBond maturityIssue AmountOpening balanceCurrent issueInterest accrued at face valuePremium and discount amortizationRepayment in the current periodEnding balance

Other explanation:

Nil

SEMI-ANNUAL REPORT 2021

45. Long-term loans

(1) Category

In RMB

ItemEnding balanceOpening balance
Mortgage loan61,000,000.0061,000,000.00
Total61,000,000.0061,000,000.00

Description of Long-term loans classification:

Other explanation, including interest rate range:

46. Bonds payable

(1) Bonds payable

In RMB

ItemEnding balanceOpening balance

(2) Changes in increase or decrease in bonds payable (excluding preferred stocks, perpetual bonds andother financial instruments classified as financial liabilities)

In RMB

Name of bondFace valueIssue dateBond maturityIssue AmountOpening balanceCurrent issueInterest accrued at face valuePremium and discount amortizationRepayment in the current periodClosing balance
Total------

(3) Description of the conditions and time for the conversion of convertible corporate bonds

(4) Description of other financial instruments classified as financial liabilities

Basic situation of other financial instruments such as preferred stocks and perpetual bonds issued at the end of the periodChanges in financial instruments such as preferred stocks and perpetual bonds issued at the end of the period

In RMB

Financial instruments issuedBeginning of periodIncrease in the current periodDecrease in the current periodEnding of period
AmountBook valueAmountBook valueAmountBook valueAmountBook value

SEMI-ANNUAL REPORT 2021

Explanation of the basis for the classification of other financial instruments into financial liabilitiesOther note

47. Lease liabilities

In RMB

ItemEnding balanceOpening balance

Other note

48. Long-term payables

In RMB

ItemEnding balanceOpening balance

(1) List long-term payables according to the nature of the payment

In RMB

ItemEnding balanceOpening balance

Other note:

(2) Special accounts payable

In RMB

ItemOpening balanceIncrease in the current periodDecrease in the current periodEnding balanceCause of formation

Other note:

49. Long-term Wages payable

(1) Long-term Wages payable

In RMB

ItemEnding balanceOpening balance

(2) Changes in defined benefit plans

Present value of defined benefit plan obligations:

In RMB

ItemThe PeriodLast Period

Plan assets:

In RMB

SEMI-ANNUAL REPORT 2021

ItemThe PeriodLast Period

Defined benefit plan net liabilities (net assets)

In RMB

ItemThe PeriodLast Period

Description of the content of the defined benefit plan and related risks, the impact on the company's future cash flow, time anduncertainty:

Explanation of major actuarial assumptions and sensitivity analysis results of defined benefit plans:

Other note:

50. Accrual liability

In RMB

ItemEnding balanceOpening balanceCauses
Pending action64,411.0064,411.00
Total64,411.0064,411.00--

Other explanations, including important assumptions and estimation about important estimated liabilities:

51. Deferred income

In RMB

ItemOpening balanceIncrease during the periodDecrease during the periodEnding balanceCauses
Industrial transformation subsidy4,043,640.004,043,640.00
Total4,043,640.004,043,640.00

Items involving Government subsidy:

In RMB

LiabilityOpening balanceNew subsidy increased in the periodAmount reckoned in non-operating income in the periodAmount included in other income in the current periodAmount of cost and expense offset in the current periodOther changeEnding balanceAssets-related/Income-related
The transformation and upgrading of1,600,000.001,600,000.00Assets-related

SEMI-ANNUAL REPORT 2021

provincial traditional industries in 2018
Intelligent transformation in 2019472,640.00472,640.00Assets-related
Industrial transformation and intelligence in 20201,971,000.001,971,000.00Assets-related
Total4,043,640.004,043,640.00

Other explanation:

52. Other non-current liabilities

In RMB

ItemEnding balanceOpening balance

Other note:

53. Share capital

In RMB

Opening balanceChanges in the Period (+,-)Ending balance
Issuing new sharesBonus sharesShares transfer from public reservesOtherSubtotal
Total shares283,161,227.00283,161,227.00

Other explanation:

SEMI-ANNUAL REPORT 2021

54. Other equity instruments

(1) Basic information of other financial instruments such as preferred stocks and perpetual bonds issued atthe end of the period

(2) Changes in financial instruments such as preferred stocks and perpetual bonds issued at the end of theperiod

In RMB

Financial instruments issuedBeginning of periodIncrease in the current periodDecrease in the current periodEnding of period
AmountBook valueAmountBook valueAmountBook valueAmountBook value

Other equity instruments' changes in the current period, explanations of the reasons for the changes, and the basis for relatedaccounting treatments:

Other note:

55. Capital public reserve

In RMB

ItemOpening balanceIncrease during the periodDecrease during the periodEnding balance
Capital premium (equity premium)96,501,903.0296,501,903.02
Other capital public reserve50,075,868.4850,075,868.48
Total146,577,771.50146,577,771.50

Other explanation, including changes and reasons of changes:

56. Treasury stocks

In RMB

ItemOpening balanceIncrease in the current periodDecrease in the current periodEnding balance

Other note, including changes in the current period and explanations of the reasons for the changes:

57. Other comprehensive income

In RMB

ItemOpening balanceThe PeriodEnding balanc
Account beforeLess: written inLess: writtenLess: incomeBelong to parentBelong to minority

SEMI-ANNUAL REPORT 2021

income tax in the yearother comprehensive income in previous period and carried forward to gains and losses in current periodin other comprehensive income in previous period and carried forward to retained earnings in current periodtax expensecompany after taxshareholders after taxe

Other explanation, including the adjustment on initial recognition for arbitrage items that transfer from the effective part of cash flowhedge profit/loss:

58. Reasonable reserve

In RMB

ItemOpening balanceIncrease in the current periodDecrease in the current periodEnding balance

Other explanation, including changes and reasons for changes:

59. Surplus public reserve

In RMB

ItemOpening balanceIncrease during the periodDecrease during the periodEnding balance
Statutory surplus reserves21,322,617.2521,322,617.25
Discretionary surplus reserve56,068,976.0056,068,976.00
Total77,391,593.2577,391,593.25

Other explanation, including changes and reasons for changes:

Nil

60. Retained profit

In RMB

SEMI-ANNUAL REPORT 2021

ItemCurrent periodLast period
Retained profit at the end of the previous period before adjustment-170,881,854.46-177,712,041.86
Retained profit at period-begin after adjustment-170,881,854.46-177,712,041.86
Add: net profit attributable to owners of the parent company7,023,114.723,165,597.55
Retained profit at period-end-163,858,739.74-174,546,444.31

Details about adjusting the retained profits at the beginning of the period:

1) The retroactive adjustments to Accounting Standards for Business Enterprises and its relevant new regulations affect the retainedprofits at the beginning of the period amounting to 0 Yuan.

2) The changes in accounting policies affect the retained profits at the beginning of the period amounting to 0 Yuan.

3) The major accounting error correction affects the retained profits at the beginning of the period amounting to 0 Yuan

4) Merge scope changes caused by the same control affect the retained profits at the beginning of the period amounting to 0 Yuan.

5) Other adjustments affect the retained profits at the beginning of the period amounting to 0 Yuan

61. Operating revenue and cost

In RMB

ItemCurrent PeriodLast Period
RevenueCostRevenueCost
Main business323,468,602.68282,596,348.19268,465,953.89249,723,766.92
Other business68,165,205.8747,447,861.3932,237,467.4914,235,885.71
Total391,633,808.55330,044,209.58300,703,421.38263,959,652.63

Information relating to revenue:

In RMB

CategoryBranch 1Branch 2Total
Including:
Including:
Including:
Including:
Including:
Including:
Including:

Information relating to performance obligations:

NilInformation related to the transaction price apportioned to the remaining performance obligations:

The amount of income corresponding to the performance obligations that have been signed at the end of this reporting period but

SEMI-ANNUAL REPORT 2021

have not yet been fulfilled or have not done with fulfillment is 0.00 yuan, among them, yuan of revenue is expected to be recognizedin YEAR, yuan of revenue is expected to be recognized in YEAR, and yuan of revenue is expected to be recognized in YEAR.Other explanationNil

62. Tax and surcharges

In RMB

ItemCurrent PeriodLast Period
Urban maintenance and construction tax53,181.8561,315.21
Educational surtax23,402.0527,476.42
Property tax671,892.72463,763.85
Land use tax380,897.71247,776.03
Stamp tax283,562.58187,803.80
15,425.0115,920.74
Total1,428,361.921,004,056.05

Other explanation:

63. Sales expense

In RMB

ItemCurrent PeriodLast Period
Employee compensation1,940,607.711,544,285.76
Freight4,858,694.343,120,326.41
Commodity inspection fee894,098.13512,749.42
Customs fee204,766.5530,322.36
Commodity loss3,005,591.442,042,886.52
Other3,190,859.791,849,508.92
Total14,094,617.969,100,079.39

Other explanation:

Other is the after-sales service fee, low value and easy consumption, office expenses, etc.

64. Administrative expense

In RMB

ItemThe PeriodLast Period
Salary6,033,625.104,290,516.96
Depreciation1,259,331.291,094,911.50

SEMI-ANNUAL REPORT 2021

Social security fee1,182,922.32307,654.93
Communication fee1,829,623.452,149,616.64
Employee benefits1,205,669.37975,973.80
Travel expenses705,255.91997,820.46
Amortization of intangible assets863,491.01911,802.71
Transportation expenses220,781.91728,044.47
Consultation fee1,448,658.63154,420.23
Security costs460,539.40826,723.53
Repair cost3,428,358.441,186,397.36
Audit fees714,487.27703,883.50
Office expenses1,075,155.32534,213.91
Communication fee61,127.2066,922.51
Amortization of low-value consumables6,196.30204,519.80
Securities Information Disclosure Fee46,361.00247,008.75
Employee education expenses12,689.53123,799.49
Utility bill284,729.15194,204.27
Rental fees521,230.00496,532.52
Environmental protection fee47,617.53202,101.81
Other fees1,272,457.11685,293.51
Total22,680,307.2417,082,362.66

Other explanation:

65. R& D expenses

In RMB

ItemCurrent PeriodLast Period
Personnel labor costs3,424,760.681,801,065.20
Depreciation and amortization expense437,009.74499,584.18
Other related expenses93,877.08122,775.88
Total3,955,647.502,423,425.26

Other explanation:

66. Financial expense

In RMB

ItemCurrent PeriodLast Period

SEMI-ANNUAL REPORT 2021

Interest costs3,731,443.174,755,143.83
Less: Interest income203,041.26529,170.31
Exchange loss4,068,036.84800,845.19
Less: exchange gains2,461,568.22
Handing expense105,672.1359,100.48
Other1,160.00
Total5,241,702.863,484,228.81

Other explanation:

Inquiry letter courier fee

67. Other income

In RMB

SourcesCurrent PeriodLast Period
Three-agency handling fee3,553.35
Industrial Transformation Item348,540.00
Total3,553.35348,540.00

68. Investment income

In RMB

ItemCurrent PeriodLast Period
Financial income149,767.5866,780.40
Total149,767.5866,780.40

Other explanation:

69. Net exposure hedging income

In RMB

ItemThe PeriodLast Period

Other note:

70, Fair value change income

In RMB

Sources of income from changes in Fair valueThe PeriodLast Period

Other note:

SEMI-ANNUAL REPORT 2021

71. Credit impairment loss

In RMB

ItemCurrent PeriodLast Period

Other explanation:

72. Losses on assets impairment

In RMB

ItemCurrent PeriodLast Period
II. Inventory falling price loss and impairment loss of contract performance cost-1,350,000.00
Total-1,350,000.00

Other explanation:

73. Asset disposal income

In RMB

Source of asset disposal incomeCurrent PeriodLast Period
Dispose income of fixed assets0.00-99,867.53
Total0.00-99,867.53

74. Non-operating income

In RMB

ItemCurrent PeriodLast PeriodAmount included in current non-recurring profits or losses
Government subsidy256,000.00
Disposal of assets2,786.472,786.47
Fine1,400.001,976.001,400.00
Other16,412.5743,224.0016,412.57
Total276,599.0445,200.0620,599.04

Government subsidy reckoned into current gains/losses:

In RMB

ItemIssuing subjectOffering causesNatureSubsidy impact current gains/losseThe special subsidy (Y/N)Amount in the PeriodAmount in last periodAssets-related/Income-related

SEMI-ANNUAL REPORT 2021

s (Y/N)
CAwardSubsidies received for research and development, technological renewal and transformation, etc.NN256,000.00Income-related

Other explanation:

75. Non-operating expenditure

In RMB

ItemCurrent PeriodLast PeriodAmount included in current non-recurring profits or losses
Dealing with fixed assets22,804.3122,804.31
Fine expenditure191,386.997,302.38191,386.99
Total215,202.927,302.38215,202.92

Other explanation:

Nil

76. Income tax expense

(1) Statement of income tax expense

In RMB

ItemCurrent PeriodLast Period
Current income tax expense1,590,676.66982,790.94
Deferred income tax expense-145,421.36
Total1,590,676.66837,369.58

(2) Adjustment on accounting profit and income tax expenses

In RMB

ItemCurrent Period

SEMI-ANNUAL REPORT 2021

Total profit8,613,791.38
Income tax based on statutory/applicable rate2,490,947.85
Impact by different tax rate applied by subsidies230,760.37
Impact of deductible loss of un-recognized deferred income tax assets in the prior period of use-145,421.36
Income tax expense1,590,676.66

Other explanationNil

77. Other comprehensive income

See note

78. Annotation of cash flow statement

(1) Cash received with other operating activities concerned

In RMB

ItemThe PeriodLast Period
Unit intercourse account15,891,476.38423,061.34
Collection management fee and utilities etc.870,339.55
Repayment from employees81,510.67538.70
Margin3,420.00178,441.66
Interest income30,133.3480,873.96
Government subsidy259,553.352,190,000.00
Total16,266,093.743,743,255.21

Note of cash received with other operating activities concerned:

Nil

(2) Cash paid with other operating activities concerned

In RMB

ItemThe PeriodLast Period
Unit intercourse account19,499,576.9412,099,293.44
Employee loan47,686.671,518,843.50
Deposit and security deposit1,804,581.00777,760.00
Communication fee165,926.342,225,069.64

SEMI-ANNUAL REPORT 2021

Utility bill4,662,103.00195,404.27
Travel expenses1,168,068.54631,364.12
Shipping fee2,706,778.652,885,107.75
Transportation expenses708,540.18
Repair cost1,369,952.771,186,397.36
Consultation fee1,400,000.00700,000.00
Security fee363,200.00
Financial institution fee54,316.41
Office expenses19,086.70184,663.65
Communication fee437,439.9166,922.51
Rental fees496,532.52
Other18,919,703.622,183,661.37
Total52,200,904.1426,277,076.72

Note of cash paid with other operating activities concerned:

(3) Cash received with other investment activities concerned

In RMB

ItemCurrent PeriodLast Period
Redemption of principal of financial products35,000,000.00
Total35,000,000.00

Note of cash received with other investment activities concerned:

(4) Cash paid related with investment activities

In RMB

ItemCurrent PeriodLast Period
Purchasing financial products35,000,000.00
Total35,000,000.00

Note of cash paid related with investment activities:

(5) Other cash received related to financing activities

In RMB

ItemThe PeriodLast Period

Description of other received cash related to financing activities:

SEMI-ANNUAL REPORT 2021

(6) Cash paid related with financing activities

In RMB

ItemCurrent PeriodLast Period

Note of cash paid related with financing activities:

79. Supplementary information to statement of cash flow

(1) Supplementary information to statement of cash flow

In RMB

Supplementary informationThis PeriodLast Period
1. Net profit adjusted to cash flow of operation activities:----
Net profit7,023,114.723,165,597.55
Add: Assets impairment provision
Depreciation of fixed assets, consumption of oil assets and depreciation of productive biology assets5,855,066.656,364,464.64
Depreciation of right-of-use assets
Amortization of intangible assets875,257.88911,802.71
Amortization of long-term deferred expenses114,127.72116,167.92
Loss from disposal of fixed assets, intangible assets and other long-term assets (gain is listed with “-”)-156,701.09
Losses on scrapping of fixed assets (gain is listed with “-”)
Gain/loss of fair value changes (gain is listed with “-”)
Financial expenses (gain is listed with “-”)5,241,702.863,786,650.62
Investment loss (gain is listed with “-”)-149,767.58-66,780.40
Decrease of deferred income tax asset ((increase is listed with “-”)-145,421.36
Increase of deferred income tax liability (decrease is listed with “-”)

SEMI-ANNUAL REPORT 2021

Decrease of inventory (increase is listed with “-”)-61,101,647.02-3,086,479.34
Decrease of operating receivable accounts (increase is listed with “-”)97,224,785.91-15,138,062.21
Increase of operating payable accounts (decrease is listed with “-”)-76,901,010.7325,448,973.20
Other
Net cash flows arising from operating activities-21,818,369.5921,200,212.24
2. Material investment and financing not involved in cash flow----
Conversion of debt into capital
Switching Company bonds due within one year
Financing lease of fixed assets
3. Net change of cash and cash equivalents:----
Balance of cash at period end59,612,186.2221,812,967.80
Less: Balance of cash equivalent at year-begin60,968,053.5836,645,061.61
Add: Balance at year-end of cash equivalents
Less: Balance at year-begin of cash equivalents
Net increase of cash and cash equivalents-1,355,867.36-14,832,093.81

(2) Net cash payment for the acquisition of a subsidiary in the period

In RMB

Amount
Including:--
Including:--
Including:--

Other note:

(3) Net cash received from the disposal of subsidiaries

In RMB

SEMI-ANNUAL REPORT 2021

Amount
Including:--
Including:--
Including:--

Other note:

(4) Constitution of cash and cash equivalent

In RMB

ItemEnding balanceOpening balance
I. Cash59,612,186.2260,968,053.58
Including: Cash on hand903.40136,673.02
Bank deposit available for payment at any time16,620,293.8029,912,316.31
Other currency funds available for payment at any time42,990,989.02
III. Balance of cash and cash equivalent at period-end59,612,186.2260,968,053.58

Other explanation:

80. Note of the changes of owners’ equity

Explain the items and amount at period-end adjusted for “Other” at end of the last year:

Nil

81. Assets with ownership or use right restricted

In RMB

ItemEnding book valueLimited reason
Money funds42,990,989.02Margin
Fixed assets12,375,571.51Collateral for borrowing
Intangible assets6,752,967.68Collateral for borrowing
Fixed assets liquidation92,857,471.69Court seizure
Investment real estate11,503,400.02Collateral for borrowing
Accounts receivable financing0.00Bill pledge
Total166,480,399.92--

Other explanation:

SEMI-ANNUAL REPORT 2021

82. Item of foreign currency

(1) Item of foreign currency

In RMB

ItemEnding balance of foreign currencyRate of conversionEnding RMB balance converted
Monetary funds----
Including: USD1,346,535.806.47058,810,879.28
Euro
HKD
Account receivable----
Including: USD5,192,627.926.4705604,526.76
Euro
HKD
Long-term loans----
Including: USD
Euro
HKD

Other explanation:

(2) Explanation on foreign operational entity, including as for the major foreign operational entity,disclosed main operation place, book-keeping currency and basis for selection; if the book-keepingcurrency changed, explain reasons

□ Applicable √Not applicable

83. Hedging

According to the hedge classification, disclose the qualitative and quantitative information of hedging items, related hedging tools,and hedged risks:

84. Government subsidy

(1) Government subsidy

In RMB

SEMI-ANNUAL REPORT 2021

CategoryAmountItem for presentationAmount reckoned into current gains/losses

(2) Government grants rebate

□ Applicable √Not applicable

Other explanation:

85. Other

NilVIII. Changes of consolidation scope

1. Enterprise combine not under the same control

(1) Enterprise combination under the same control in Period

In RMB

PurchaserTime point for equity obtainedCost of equity obtainedRatio of equity obtainedAcquired way Equity obtained wayPurchasing dateStandard to determine the purchasing dateIncome of purchaser from purchasing date to period-endNet profit of purchaser from purchasing date to period-end

Other note:

(2) Combination cost and goodwill

In RMB

Combination cost

The method of determining the fair value of the merger cost, contingent consideration and there changes:

The main reasons for the formation of large amounts of goodwill:

Other explanation:

(3) Identifiable assets and liability on purchasing date under the purchaser

In RMB

Fair value on purchasing dateBook value on purchasing date

Method for determining the fair value of identifiable assets and liabilities:

SEMI-ANNUAL REPORT 2021

The contingent liabilities of the acquiree assumed in the business combination:

Other explanation:

(4) Gains or losses arising from re-measured by fair value for the equity held before purchasing date

Whether it is a business combination realized by two or more transactions of exchange and a transaction of obtained control rights inthe Period or not

□ Yes √ No

(5) Notes relating to the purchase date or the end of the period in which the merger consideration or thefair value of the purchasee’s identifiable assets and liabilities cannot be reasonable determined

(6) Other explanations

2. Enterprise combine under the same control

(1) Enterprise combination under the same control in Period

In RMB

Combined partyPercentage of equity acquired in enterprise combinationConstitute the basis for the enterprise combination under the same controlCombining dateBasis for determining the date of combinationIncome of the combined party from the beginning of the period of combination to the date of combinationNet profit of the combined party from the beginning of the period of combination to the date of combinationIncome of the combined party during the comparison periodNet profit of the combined party during the comparison period

Other note:

(2) Consolidation cost

In RMB

Consolidation cost

Contingent explanation of the consideration and its changes:

Other note:

(3) Book value of the assets/liabilities from combined party at date of combination

In RMB

SEMI-ANNUAL REPORT 2021

Combination dateAt the end of the previous period

Contingent liabilities of the combined party assumed in the enterprise combination:

Other note:

3. Reverse purchase

Basic information of the transaction, the basis for the reverse purchase of the transaction, whether the assets and liabilities retained bythe listed company constitute a business and its basis, the determination of the merger cost, the amount of equity adjusted inaccordance with the equity transaction and its calculation:

4. Disposal of subsidiaries

Whether there is a single disposal of an investment in a subsidiary that resulted in a loss of control

□ Yes √ No

Whether there is a step-by-step disposal of investment in a subsidiary through multiple transactions and loss of control during theperiod

□ Yes √ No

5. Other reasons for consolidation range changed

Explain the reasons on consolidate scope changes (i.e. subsidiary newly established, subsidiary liquidation etc.) and relevantinformation:

6. Other

IX. Equity in other entity

1. Equity in subsidiary

(1) Constitute of enterprise group

SubsidiaryMain operation placeRegistration placeBusiness natureShare-holding ratioAcquired way
DirectlyIndirectly
HUAFA Lease CompanyShenzhenShenzhenProperty management60.00%New investment acquisition
HUAFA Property CompanyShenzhenShenzhenProperty management100.00%New investment acquisition
Hengfa TechnologyWuhanWuhanProduction & sales100.00%New investment

SEMI-ANNUAL REPORT 2021

Companyacquisition
HUAFA Hengtian CompanyShenzhenShenzhenProperty management100.00%New investment acquisition
HUAFA Hengtai CompanyShenzhenShenzhenProperty management100.00%New investment acquisition

Explanation on share-holding ratio in subsidiary different from ratio of voting right:

NilBasis for controlling the invested entity with half or below voting rights held and without controlling invested entity but with overhalf and over voting rights:

NilMajor structured entity included in consolidates statement:

NilBasis of termination of agent or consignor:

NilOther explanationNil

(2) Important non-wholly-owned subsidiary

In RMB

SubsidiaryShare-holding ratio of minorityGains/losses attributable to minority in the PeriodDividend announced to distribute for minority in the PeriodEnding equity of minority

Explanation on holding ratio different from the voting right ratio for minority shareholders:

Other note:

(3) Main finance of the important non-wholly-owned subsidiary

In RMB

SubsidiaryEnding balanceOpening balance
Current assetsNon-current assetsTotal assetsCurrent liabilitiesNon-current liabilitiesTotal liabilitiesCurrent assetsNon-current assetsTotal assetsCurrent liabilitiesNon-current liabilitiesTotal liabilities

In RMB

SubsidiaryThe PeriodLast Period
Operation IncomeNet profitTotal comprehenCash flow fromOperation IncomeNet profitTotal comprehenCash flow from

SEMI-ANNUAL REPORT 2021

sive incomeoperation activitysive incomeoperation activity

Other note:

Nil

(4) Significant restrictions on the use of enterprise group assets and pay off debts of the enterprise groupNil

(5) Financial or other supporting offers to the structured entity included in consolidated financial statementrange

NilOther note:

Nil

2. Transaction that has owners’ equity shares changed in subsidiary but still with controlling rights

(1) Owners’ equity shares changed in subsidiary

(2) Impact on minority’s interest and owners’ equity attributable to parent company

In RMB

Other note

3. Equity in joint venture and associated enterprise

(1) Important joint venture and associated enterprise

Joint venture or associated enterpriseMain operation placeRegistered placeBusiness natureShare-holding ratioAccounting treatment on investment for joint venture and associated enterprise
DirectlyIndirectly

Holding shares ratio different from the voting right ratio:

Has major influence with less 20% voting rights hold, or has minor influence with over 20% (20% included) voting rights hold:

(2) Main financial information of the important joint venture

In RMB

Ending balance /The PeriodOpening balance /Last Period

SEMI-ANNUAL REPORT 2021

Other note

(3) Main financial information of the important associated enterprise

In RMB

Ending balance /The PeriodOpening balance /Last Period

Other note

(4) Financial summary for non-important Joint venture and associated enterprise

In RMB

Ending balance /The PeriodOpening balance /Last Period
Joint venture:----
Amount based on share-holding ratio----
Associated enterprise:----
Amount based on share-holding ratio----

Other note

(5) Major limitation on capital transfer ability to the Company from joint venture or associated enterprise

(6) Excess loss occurred in joint venture or associated enterprise

In RMB

Name of joint venture or associated enterpriseCumulative unrecognized loss accumulated in the previous periodUnrecognized loss in the current period (or net profit shared in the current period)Accumulated unrecognized loss at the end of the period

Other note

(7) Unconfirmed commitment with joint venture investment concerned

(8) Intangible liability with joint venture or associated enterprise investment concerned

4. Major conduct joint operation

Joint business namePrincipal place of businessRegistrationBusiness natureShareholding ratio/shares enjoyed
DirectIndirect

Explanation of the shareholding ratio or the share enjoyed in the joint operation is different from the voting rights ratio:

If a joint operation is a separate entity, the basis for classification as a joint operation:

SEMI-ANNUAL REPORT 2021

Other note

5. Structured body excluding in consolidate financial statement

Relevant explanations for structured entities not included in the scope of the consolidated financial statements:

6. Other

X. Risk related with financial instrumentXI. Disclosure of fair value

1. Ending fair value of the assets and liabilities measured by fair value

In RMB

ItemEnding fair value
First-orderSecond-orderThird-orderTotal
I. Sustaining measured by fair value--------
II. Non-persistent measure--------

SEMI-ANNUAL REPORT 2021

2. Recognized basis for the market price sustaining and non-persistent measured by fair value onfirst-order

3. The qualitative and quantitative information for the valuation technique and critical parameter thatsustaining and non-persistent measured by fair value on second-order

4. The qualitative and quantitative information for the valuation technique and critical parameter thatsustaining and non-persistent measured by fair value on third-order

5. Continuous third-level fair value measurement items, adjustment information between the opening andclosing book value and sensitivity analysis of unobservable parameters

6. Continuous fair value measurement items, if there is a conversion between various levels in the currentperiod, the reasons for the conversion and the policy for determining the timing of the conversion

7. Changes in valuation technology during the current period and reasons for the changes

8. The fair value of financial assets and financial liabilities not measured by fair value

9. Other

XII. Related party and related party transactions

1. Parent company of the enterprise

Parent companyRegistration placeBusiness natureRegistered capitalShare-holding ratio on the enterprise for parent companyVoting right ratio on the enterprise
Wuhan Zhongheng New Science & Technology Industrial Group Co., LtdWuhanProduction and sales, real estate development and sales, housing leasing and management138,000,000.0042.13%42.13%

Explanation on parent company of the enterpriseNilThe ultimate control of the enterprise is Li Zhongqiu.Other note:

Nil

2. Subsidiary of the Enterprise

Found more in VIII. Equity in other entity in the Note

SEMI-ANNUAL REPORT 2021

3. Joint venture and associated enterprise

Found more in NoteOther associated enterprise or joint ventures which has related transaction with the Company in the period or occurred previous:

Name of joint venture or associated enterpriseRelationship with the company

Other note

4. Other Related party

Other Related partyRelationship with the Enterprise
Wuhan Zhongheng Huafa Technology Co., Ltd.Control by same controlling shareholder and ultimate controller
Wuhan Hengsheng Yutian Industrial Co., Ltd.Control by same controlling shareholder and ultimate controller
Wuhan Hengsheng Photo-electricity Industry Co., Ltd.Control by same controlling shareholder and ultimate controller
Hong Kong Yutian International Investment Co., Ltd.Control by same controlling shareholder and ultimate controller
Wuhan New Oriental Real Estate Development Co., Ltd.Control by same controlling shareholder and ultimate controller
Wuhan Zhongheng Property Management Co., Ltd.Control by same controlling shareholder and ultimate controller
Wuhan Optical Valley Display System Co., Ltd.Control by same controlling shareholder and ultimate controller
Wuhan Yutian Industrial Real Estate Co., Ltd.Control by same controlling shareholder and ultimate controller
Wuhan Yutian Dongfang Property Co., Ltd.Control by same controlling shareholder and ultimate controller
Wuhan Xiahua Zhongheng Electronics Co. Ltd.Control by same controlling shareholder and ultimate controller
Wuhan Zhongheng Yutian Trading Co,, LtdControl by same controlling shareholder and ultimate controller
Wuhan Yutian Hongguang Real Estate Co., Ltd.Control by same controlling shareholder and ultimate controller
Shenzhen Zhongheng Huayu Investment Holding Co., Ltd.Control by same controlling shareholder and ultimate controller
Wuhan Yutian Investment Co., Ltd.Control by same controlling shareholder and ultimate controller
Yutian International Co., Ltd.Control by same controlling shareholder and ultimate

SEMI-ANNUAL REPORT 2021

controller
Hong Kong Zhongheng Yutian Co., Ltd.Control by same controlling shareholder and ultimate controller
Shenzhen Yutian Henghua Co., Ltd.Control by same controlling shareholder and ultimate controller
Shenzhen Zhongheng Yongye Technology Co., Ltd.Control by same controlling shareholder and ultimate controller
Shenzhen Yutian Hengrui Co., Ltd.Control by same controlling shareholder and ultimate controller
Wuhan Henglian Optoelectronics Co., Ltd.Control by same controlling shareholder and ultimate controller

Other noteNil

5. Related transaction

(1) Goods purchasing, labor service providing and receiving

Goods purchasing/labor service receiving

In RMB

Related partyContentCurrent PeriodTrading limit approvedWhether over the approved limited or not (Y/N)Last Period
Hong Kong Yutian International Investment Co., Ltd.Purchase goods37,751,811.11156,979,200.00N67,538,078.36
Wuhan Hengsheng Photo-electricity Industry Co., Ltd.Purchase goods60,509,427.57130,816,000.00N60,232,724.51

Goods sold/labor service providing

In RMB

Related partyContentCurrent PeriodLast Period
Hong Kong Yutian International Investment Co., Ltd.Sales of goods62,100,265.7959,074,589.93
Wuhan Hengsheng Photo-electricity IndustrySales of goods17,319,716.6810,283,633.89

SEMI-ANNUAL REPORT 2021

Explanation on goods purchasing, labor service providing and receivingNil

(2) Related trusteeship management/contract & entrust management/ outsourcing

The company's entrusted management/contracting situation table:

In RMB

Co., Ltd.

The name ofthe entrustingparty /outsourcingparty

The name of the entrusting party / outsourcing partyName of contractor/contractorTypes of entrusted/contracted assetsStart date of entrusted/contracted start dateEnd date of entrust/contractingPricing basis for custody income/contracting incomeCustody income/contracting income confirmed in the current period

Description of related custody/contracting situationThe company's entrusted management / outsourcing situation table:

In RMB

The name of the entrusting party / outsourcing partyName of contractor/contractorEntrusted/Outsourced Asset TypeStart date of commission/out of packageEnd date of entrustment/outsourcingCustody fee/package fee pricing basisCustody fee/package fee confirmed in the current period

Explanation on related lease

(3) Related lease

As a lessor for the Company:

In RMB

LesseeAssets typeLease income recognized in the PeriodLease income recognized at last Period

As a tenant for the Company:

In RMB

LessorAssets typeRent costs recognized in the PeriodRent costs recognized at last Period

Explanation on related lease

(4) Related guarantee

As the guarantor

In RMB

SEMI-ANNUAL REPORT 2021

Secured partyAmount guaranteeStartEndCompleted or not (Y/N)
Hengfa Technology27,889,579.00April 20, 2018April 20, 2022N

As the secured party

In RMB

GuarantorAmount guaranteeStartEndCompleted or not (Y/N)
Li Zhongqiu67,000,000.00July 01, 2019July 01, 2022N

Explanation on related guaranteeNil

(5) Related party’s borrowed/lending funds

In RMB

Related partyLoan amountStart dateMaturityNote
Borrowing
Lending

(6) Related party’s assets transfer and debt reorganization

In RMB

Related partyRelated transaction contentThe PeriodLast Period

(3) Remuneration of key manager

In RMB

ItemThe PeriodLast Period

(8) Other related transactions

6. Receivable/payable items of related parties

(1) Receivable

In RMB

ItemRelated partyEnding balanceOpening balance
Book balanceBad debt provisionBook balanceBad debt provision
Accounts receivableHong Kong Yutian International Investment Co.,29,037,251.5641,513,718.58

SEMI-ANNUAL REPORT 2021

Ltd.
Accounts receivableWuhan Hengsheng Photo-electricity Industry Co., Ltd.1,434,688.5212,676.70
PrepaymentsHong Kong Yutian International Investment Co., Ltd.27,025,766.19
Total30,471,940.0868,552,161.47

(2) Payable

In RMB

ItemRelated partyClosing book balanceOpening book balance
Account payableWuhan Hengsheng Photo-electricity Industry Co., Ltd.23,803,488.386,795,240.85
Notes payableWuhan Hengsheng Photo-electricity Industry Co., Ltd.
Total23,803,488.386,795,240.85

7. Undertakings of related party

According to the claim request of the arbitration application of Shenzhen Vanke, Shen Huafa and Wuhan Zhongheng are required topay or bear jointly. The letter of Undertaking issued by Wuhan Zhongheng Group to Shenzhen Huafa will be fully borne by theWuhan Zhongheng Group if the arbitration is decided in favor of Vanke and the dispute arising from the contract leads to thearbitration losses.

8. Other

NilXIII. Share-based payment

1. Overall situation of share-based payment

□ Applicable √Not applicable

2. Share-based payment settled by equity

□ Applicable √Not applicable

SEMI-ANNUAL REPORT 2021

3. Share-based payment settled by cash

□ Applicable √Not applicable

4. Modification and termination of share-based payment

Nil

5. Other

XIV. Undertakings or contingency

1. Important undertakings

Important undertakings on balance sheet date

Nil

2. Contingency

(1) Contingency on balance sheet date

Nil

(2) For the important contingency not necessary to disclosed by the Company, explained reasons

The Company has no important contingency that need to disclosed

3. Other

As of the date of this report, the company has no undisclosed commitments or contingencies that should be disclosed.XV. Events after balance sheet date

1. Important non adjustment matters

In RMB

ItemContentNumber of impacts on financial status and operating resultsThe reason why the impact number cannot be estimated

2. Profit distribution

In RMB

SEMI-ANNUAL REPORT 2021

3. Sales return

4. Other events after balance sheet date

As of the date of this report, the company has no undisclosed post-balance sheet events that should be disclosed.XVI. Other important events

1. Previous accounting errors collection

(1) Retrospective restatement method

In RMB

Correction of accounting errorsProcessing programNames of report items in each comparison period affectedCumulative influence

(2) Future applicable law

Correction of accounting errorsApproval procedureReasons for adopting future applicable law

2. Debt restructuring

3. Assets replacement

(1) Exchange of non-monetary assets

(2) Other asset replacement

4. Pension plan

5. Termination of operation

In RMB

ItemIncomeExpenseTotal profitIncome tax expenseNet profitTermination of operation profit attributable to owners of the parent company

Other note

SEMI-ANNUAL REPORT 2021

6. Segment

(1) Recognition basis and accounting policy for reportable segment

(2) Financial information for reportable segment

In RMB

ItemOffset of segmentTotal

(3) If the company has no reportable segments or is unable to disclose the total assets and liabilities of eachreportable segment, it should state the reasons

(4) Other explanations

7. Major transaction and events makes influence on investor’s decision

8. Other

1. Matters of adjudication of Southern International Arbitration Shen [2017] No. D376 from Southern ChinaInternational Economic & Trade Arbitration Commission

(1) Arbitration

In August 2015, Shenzhen Zhongheng Huafa Co., Ltd. (hereinafter referred to as “Shenzhen HUAFA”) andWuhan Zhongheng New Technology Industry Group Co., Ltd. (hereinafter referred to as “Wuhan Zhongheng”)signed the “Cooperation Agreement on Urban Renewal Project of Update Units at Huafa Industrial Park,Gongming Street, Guangming New District, Shenzhen”. As Shenzhen HUAFA and Wuhan Zhongheng planned tocooperate with Shenzhen Vanke Real Estate CO., Ltd. (hereinafter referred to as “Shenzhen Vanke”) on the Huafaurban renewal project (hereinafter referred to as “Huafa Renovation Project) at Gongming Street, GuangmingNew District, Shenzhen, both parties appointed that Shenzhen HUAFA entrusted Wuhan Zhongheng to representit in this cooperation, and established project company - Shenzhen Vanke Guangming Real Estate Co., Ltd.(hereinafter referred to as “Vanke Guangming”) as the subject of project implementation with Shenzhen Vanke;Vanke Guangming signed “Demolition Compensation Agreement” with Shenzhen HUAFA and WuhanZhongheng, and paid the compensation for demolition.On August 21, 2015, Shenzhen HUAFA, Wuhan Zhongheng and Shenzhen Vanke signed the “CooperativeOperation Contract of Renovation Project at Huafa Industrial Park, Gongming Street, Guangming NewDistrict”(hereinafter referred to as “Cooperative Operation Contract”), the contract refined and appointed thecooperation model and operating steps of both sides. And then Shenzhen HUAFA, Wuhan Zhongheng andShenzhen Vanke signed the “Agreement on the Housing Acquisition and Removal Compensation and Settlement”.After signing the above agreement, Shenzhen Vanke paid the cooperation price of 600 million Yuan to WuhanZhongheng through Vanke Guangming.In September 2016, Shenzhen Vanke filed an arbitration to South China International Economic and Trade

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Arbitration Commission (hereinafter referred to as “South China Arbitration”) as Shenzhen HUAFA and WuhanZhongheng violated the appointment of “Cooperative Operation Contract” and handled the “Confirmation ofSubject of Reconstruction Implementation” at an overdue time, and required Shenzhen HUAFA and WuhanZhongheng to pay liquidated damages and attorneys' fees of 464.60 million yuan.While filing the arbitration, Shenzhen Vanke also applied for property preservation of 400 million Yuan ofproperty under the name of Shenzhen Huafa and Wuhan Zhongheng to Shenzhen Intermediate People’s Court.According to the ruling of Shenzhen Intermediate People's Court and “Notification of Sealing up, Seizing andFreezing Assets” (The reference numbers are (2016) Yue 03 Cai Bao No. 51, (2016) Yue 03 Cai Bao No. 53), the27 house properties (Note: the property within the scope of Huafa renovation project) under the name of ShenzhenHUAFA and 116,489,894 shares (Note: of which 116,100,000 shares have been pledged) of Shenzhen HUAFAstock held by Wuhan Zhongheng were frozen.

(2) Progress of arbitration

On November 12, 2016, the arbitration court held a hearing on this case.In December 2016, Wuhan Zhongheng to Shenzhen HUAFA issued a “Commitment Letter” which included that ifthe arbitration (Note: the case) ruled in favor of Shenzhen Vanke, the loss of arbitration caused by the contractdisputes should be fully assumed by our company. In the above contingent losses, if the judicial decision ruledyour company to pay the compensation in advance, our company promised to pay your company in cash withinone month, if our company could not pay on time due to uncontrollable factors, our company would like to pay thecorresponding interest according to the benchmark interest rate of bank loans in the corresponding period.Because the plots in the renovation project placed in our company hadn’t been applied for transfer procedures andwere still under your company’s name (Note: based on the “Asset Replacement Contract” signed by WuhanZhongheng and Shenzhen HUAFA on April 29, 2009), therefore, there was no risk of compliance, at the same time,our company promised to give priority to paying the above compensation with the compensation for demolition ofrenovation project.On August 16, 2017, South China International Economic and Trade Arbitration Commission made the “ArbitralAward” SCIA [2017] D376, according to the arbitral award, the applicant and counterclaim respondent inarbitration case SCIA [2017] D376 were Shenzhen Vanke Real Estate Co., Ltd. (hereinafter referred to as“Applicant” and “Vanke”). The first respondent and the first applicant for counterclaim were Wuhan ZhonghengNew Science & Technology Industrial Group Co., Ltd (hereinafter referred to as “Wuhan Zhongheng” and “FirstRespondent”). The second respondent and the second applicant for counterclaim were Zhongheng Huafa. Theaward results were as follows:

① The first respondent and the second respondent pay liquidated damages to the applicant with a base number ofRMB 600 million, calculating by the annual interest rate of 36% from October 1, 2015 to November 11, 2016;

② The first respondent and the second respondent pay the lawyer fees of RMB 1.4 million to the applicant due tothe case;

③ The first respondent and the second respondent pay the property preservation fees of RMB 10,000 to theapplicant;

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④ The arbitration fees for this request and case was RMB 3,101,515.00, the first respondent and the secondrespondent should bear 70%, i.e. RMB 2,171,060.50, and the applicant should bear 30%, i.e. RMB 930,454.50.The applicant had already paid the arbitration fees in full amount for this request which could be used as thearbitration fees of this case and request and shall not be refunded. The first respondent and the second respondentshould directly pay RMB 2,171,060.50 to the applicant;The arbitration fee of counterclaim in this case was RMB 76,050 which was undertaken by the first respondentand the second respondent at their own expense. The first respondent and the second respondent paid thearbitration fees in full amount for this request which could be used as the arbitration fees of this case and requestand shall not be refunded;The actual expenses of the arbitrators in this case amounted to RMB 7,754.90, the first respondent and the secondrespondent assumed 70%, i.e. RMB 5,428.43, and the applicant assumed 30%, i.e. RMB 2,326.47; the aboveactual expenses of the arbitrators had been paid by the Commission, so the first respondent and the secondrespondent and the applicant should directly pay RMB 5,428.43 and RMB 2,326.47 respectively to theCommission;

⑤ Reject the applicant’s other arbitration requests;

⑥ Reject the arbitration counterclaims of the first respondent and the second respondent.In summary, Wuhan Zhongheng and Shenzhen Huafa should pay liquidated damages, interest, lawyer fees,property preservation fees, and arbitration fees for this request to Vanke and pay actual expenses of the arbitratorsin this case and pay the actual expenses incurred by the arbitrators in this case to South China InternationalEconomic and Trade Arbitration Commission.On February 7, 2018, the company and Wuhan Zhongheng Group applied to Shenzhen Intermediate People’sCourt to revoke the Ruling HNGZSC [2017] D376, the court made a judgment on August 16, 2018, rejecting thecompany’s request for revocation. The company and its controlling shareholder Wuhan Zhongheng Groupreceived the “Execution Notice of Shenzhen Intermediate People’s Court” ([2018] Yue03Zhi No. 1870), and theexecutor applied to the court for compulsory execution, the company was listed as dishonest person subject toexecution by Shenzhen Intermediate People’s Court. On December 13, 2019, the company announced that it hadbeen removed from the list of dishonest persons subject to execution by the Shenzhen Intermediate People’sCourt.The Company and Wuhan Zhongheng Group received an enforcement decision in 2020, terminate the executionprocess and wait for the conditions for continuation to be fulfilled before restarting.

(3) The response of the company’s management and the identification of the eventThe company engaged lawyers to make an independent investigation and judgment on the event, and issuedspecial legal opinion that the reasons of Wuhan Zhongheng resulted in a failure of a net handover, and WuhanZhongheng received the full amount of 600 million yuan paid by Vanke Guangming. Therefore, WuhanZhongheng should bear all responsibilities for faults in response to the breach of contract. Wuhan Zhonghengissued the Commitment Letter in December 2016, pledged that if the arbitration judged Vanke to win the case,Wuhan Zhongheng should bear all arbitration losses caused by the contract dispute; after the award came intoeffect, Wuhan Zhongheng issued the Confirmation Letter again on November 23, 2017 to divide the duty of

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performance of the award; the independent directors of the company issued independent opinions after carefulstudy and judgment that Wuhan Zhongheng should bear all liability for satisfaction on the Award HNGZSC [2017]D376.

2. Arbitration case of legal service contract dispute with V&T (Shenzhen) Law FirmOn March 12, 2018, the company received the arbitration notice No. SHEN DX20180087 from Shenzhen Courtof International Arbitration, V&T (Shenzhen) Law Firm requested to make a ruling that the Company and WuhanZhongheng pay the delinquent lawyer’s fees of RMB 19,402,000 and the liquidated damages (The liquidateddamages shall take five ten-thousandths of a day as a standard based on RMB 19,402,000 from August 24, 2017 tothe date of payment of the above-mentioned lawyer’s fees, and the liquidated damages up to February 12, 2018was RMB 1,678,273.00). The company should bear all the arbitration fees for this case.On November 5, 2019, the company received the arbitration award HNGZSC [2019] D618 from Shenzhen Courtof International Arbitration, ruling that the company and its controlling shareholder Wuhan Zhongheng NewScience & Technology Industrial Group Co., Ltd should pay Shenzhen V & T Law Firm the arrears of legal feesof RMB 19,402,000 and the liquidated damages.Guangdong Haibu Attorneys-at-Law engaged by the company made verification opinion on the legalresponsibility assumed for the performance of the arbitration result and believed that this case was caused by theVanke arbitration case No. SHEN DP20160334, and the net land was not handed over on time due to WuhanZhongheng, and Wuhan Zhongheng Heng received 600 million yuan paid by Vanke Guangming in full, so thecompany is not liable for compensation under the judgment of the Vanke case. The nature of the attorney fees ofV&T Law Firm is deduction of royalties. V&T Law Firm's deduction for the company is 0, and V&T Law Firm'sattorney fees paid by the company is 0. In addition, Wuhan Zhongheng Group has issued a "Letter ofCommitment" to Shenzhen Huafa in December 2016, if the arbitration decides that Vanke wins the lawsuit,Wuhan Zhongheng Group will bear the full amount of the arbitration losses caused by the contract disputes.Wuhan Zhongheng Group, as the beneficiary of the "Entrusted Agency Contract", shall bear all the paymentresponsibilities for the “Award” HNGZSC [2019] No. D618, and the company shall not be liable for the losses inthis case.On November 17, 2020, the court enforced the attorney fees that Wuhan Zhongheng Group should assume. As ajoint defendant, the company was forced to enforce partial payment of 1,564,767.46 yuan, Wuhan ZhonghengGroup returned this partial payment to the listed company on the 24th of that month.

3. Dispute with Shenzhen Zhongheng Semiconductor Co., Ltd. (formerly known as "Shenzhen Zhongheng HuafaTechnology Co., Ltd.") concerning land transfer

(1) Cause of the case

On April 29, 2009, the company signed an Asset Replacement Contract with Wuhan Zhongheng Group.According to the contract, the company would use the the land use rights of two plots of land located at HuafaRoad, Gongming Town, Bao’an District, Shenzhen, i.e. land parcel number A627-0005 (real estate registrationnumber 8000101219) and A627-0007 (real estate registration number 8000101218), which are worth 18.55million yuan, to increase capital to Shenzhen Zhongheng Semiconductor Co., Ltd. (former Zhongheng HuafaTechnology Co., Ltd., hereinafter referred to as "Zhongheng Semiconductor") and transfer ownership to

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Zhongheng Semiconductor, Wuhan Zhongheng Group replaced the company's 100% equity in ZhonghengSemiconductor with its 56% equity in Wuhan Hengfa Technology Co., Ltd. For the main content of theabove-mentioned Asset Replacement Contract, please refer to the Announcement on Related Transactions of AssetReplacement with Controlling Shareholders published by the company on Juchao Website dated April 30, 2009,with the announcement number 2009-17. After Wuhan Zhongheng Group fulfilled its obligations under the AssetReplacement Contract, the company transferred 100% of its equity in Zhongheng Semiconductor to WuhanZhongheng Group on December 21, 2009; the company also handed over the above two plots of land toZhongheng Semiconductor for possession, management, and use, but the land use right has not been transferred toZhongheng Semiconductor.

(2) Case progress

On April 17, 2020, the company received the "Notice of Response" (2020) Yue 03 Min Chu No. 17 and otherrelated materials delivered by the Shenzhen Intermediate People’s Court of Guangdong Province. ZhonghengSemiconductor sued the company and required the company and the third party (Wuhan Zhongheng Group) tocontinue to perform the contract, and transfer ownership of the above two plots of land and compensate foreconomic losses of 52 million yuan. The Shenzhen Intermediate People's Court has filed a case with the casenumber (2020) Yue 03 Min Chu No. 17.Since Zhongheng Semiconductor's main appeal is the transfer of land to its name, the company is reaching asettlement with Zhongheng Semiconductor. The company promises to actively cooperate with the land transfer.Zhongheng Semiconductor has issued a letter of commitment to the company promising to abandon the demandfor economic compensation. The Company received the first trial verdict of the case in May 2021. ZhonghengSemiconductor has appealed the decision to the Supreme People’s Court, and the first trial verdict is not yetentered into force.XVII. Principle notes of financial statements of parent company

1. Account receivable

(1) Category of account receivable

In RMB

CategoryEnding balanceOpening balance
Book balanceBad debt provisionBook valueBook balanceBad debt provisionBook value
AmountProportionAmountAccrual ratioAmountProportionAmountAccrual ratio
Account receivable with bad debt provision accrual on a single basis10,293,424.90100.00%10,293,424.90100.00%0.0010,293,424.90100.00%10,293,424.90100.00%0.00

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Including:
Including:
Total10,293,424.9010,293,424.9010,293,424.9010,293,424.90

Accrual of bad debt provision on single basis: 10,293,424.90

In RMB

NameEnding balance
Book balanceBad debt provisionAccrual ratioAccrual causes
Hong Kong Haowei Industrial Co., Ltd.1,870,887.181,870,887.18100.00%Uncollectible
TCL ACE ELECTRIC APPLIANCE (HUIZHOU) CO., LTD.1,325,431.751,325,431.75100.00%Uncollectible
Qingdao Haier Parts Procurement Co., Ltd.1,225,326.151,225,326.15100.00%Uncollectible
SKYWORTH Multimedia (Shenzhen) Co., Ltd.579,343.89579,343.89100.00%Uncollectible
Shenzhen Huixin Video Technology Co., Ltd.381,168.96381,168.96100.00%Uncollectible
Shenzhen Wandelai Digital Technology Co., Ltd.351,813.70351,813.70100.00%Uncollectible
Shenzhen Dalong Electronic Co., Ltd.344,700.00344,700.00100.00%Uncollectible
Shenzhen Keya Electronic Co., Ltd.332,337.76332,337.76100.00%Uncollectible
Shenzhen Qunping Electronic Co., Ltd.304,542.95304,542.95100.00%Uncollectible
China Galaxy Electronics (Hong Kong) Co., Ltd.288,261.17288,261.17100.00%Uncollectible
Dongguan Weite Electronic Co., Ltd.274,399.80274,399.80100.00%Uncollectible
Hong Kong New Century Electronics Co., Ltd.207,409.40207,409.40100.00%Uncollectible

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Shenyang Beitai Electronic Co., Ltd.203,304.02203,304.02100.00%Uncollectible
Beijing Xinfang Weiye Technology Co., Ltd.193,000.00193,000.00100.00%Uncollectible
TCL Electronics (Hong Kong) Co., Ltd.145,087.14145,087.14100.00%Uncollectible
Huizhou TCL Xinte Electronics Co., Ltd.142,707.14142,707.14100.00%Uncollectible
Sky Worth – RGB Electronic Co., Ltd.133,485.83133,485.83100.00%Uncollectible
Other1,990,217.451,990,217.45100.00%Uncollectible
Total10,293,424.2910,293,424.29----

Accrual of bad debt provision on single basis:

In RMB

NameEnding balance
Book balanceBad debt provisionAccrual ratioAccrual causes

Accrual of bad debt provision on portfolio:

In RMB

NameEnding balance
Book balanceBad debt provisionAccrual ratio

Explanation on portfolio basis:

If the provision for bad debts of accounts receivable is made in accordance with the general model of expected credit losses, pleaserefer to the disclosure of other receivables to disclose related information about bad-debt provisions:

□ Applicable √Not applicable

By account age

In RMB

Account ageEnding balance
Over 3 years10,293,424.90
Over 5 years10,293,424.90
Total10,293,424.90

(2) Bad debt provision accrual, collected or reversal in the period

Bad debt provision accrual in the period:

In RMB

CategoryOpening balanceAmount changed in the periodEnding balance
AccrualCollected orWritten-offOther

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Including major amount bad debt provision that collected or reversal in the period:

In RMB

reversalName

NameAmount collected or reversalWay of collection

(3) Actual written-off accounts receivable in the current period

In RMB

ItemWritten-off amount

Including the important accounts receivable written-off situation:

In RMB

NameNature of accounts receivableWritten-off amountWritten-off reasonWritten-off procedure performedWhether the payment is generated by related party transactions

Written-off description of accounts receivable:

Nil

(4) Top 5 account receivables collected by arrears party at ending balance

In RMB

CompanyEnding balance of account receivableProportion in total account receivables at year-endEnding balance of bad debt provision
Hong Kong Haowei Industrial Co., Ltd.1,870,887.1818.18%1,870,887.18
TCL ACE ELECTRIC APPLIANCE (HUIZHOU) CO., LTD.1,325,431.7512.88%1,325,431.75
Qingdao Haier Parts Procurement Co., Ltd.1,225,326.1511.90%1,225,326.15
SKYWORTH Multimedia (Shenzhen) Co., Ltd.579,343.895.63%579,343.89
Shenzhen Huixin Video Technology Co., Ltd.381,168.963.70%381,168.96
Total5,382,157.9352.29%

(5) Account receivable derecognition due to financial assets transfer

Nil

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(6) Assets and liabilities resulted by account receivable transfer and continues involvementNilOther note:

Nil

2. Other account receivable

In RMB

ItemEnding balanceOpening balance
Other account receivable87,948,585.0493,922,057.92
Total87,948,585.0493,922,057.92

(1) Interest receivable

1) Category of interest receivable

In RMB

ItemEnding balanceOpening balance

2) Significant overdue interest

BorrowerEnding balanceOverdue timeOverdue reasonWhether there is impairment and its judgment basis

Other note:

3)Accrual of bad debt provision

□ Applicable √Not applicable

(2)Dividend receivable

1) Category of dividend receivable

In RMB

Item (or invested unit)Ending balanceOpening balance

2) Important dividend receivable with account age over one year

In RMB

Item (or invested unit)Ending balanceAccount ageReasons forWhether there is

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non-recoveryimpairment and its judgment basis

3) Accrual of bad debt provision

□ Applicable √Not applicable

Other note:

(3) Other account receivable

1) Other account receivable by nature

In RMB

NatureEnding book balanceOpening book balance
Margin & deposit4,427,575.45304,608.00
Borrow money2,419,063.121,869,073.12
Intercourse funds70,565,408.13107,488,541.28
Rental receivable29,316,713.515,847,389.48
Other37,294.00168,162.09
Less: Bad debt provision-18,817,469.17-18,512,750.12
Total87,948,585.0497,165,023.85

2)Accrual of bad debt provision

In RMB

Bad debt provisionPhase IPhase IIPhase IIITotal
Expected credit losses over next 12 monthsExpected credit losses for the entire duration (without credit impairment occurred)Expected credit losses for the entire duration (with credit impairment occurred)
Balance on1 Jan. 2021111.7518,817,357.4218,817,469.17
Balance of 1 Jan. 2021 in the period————————
Balance on Dec. 31, 2021111.7518,817,357.4218,817,469.17

Change of book balance of loss provision with amount has major changes in the period

□ Applicable √Not applicable

By account age

In RMB

SEMI-ANNUAL REPORT 2021

Account ageEnding balance
Within one year (one year included)8,752,615.17
1-2 years79,196,078.82
2-3 years312,212.44
Over 3 years18,505,147.78
Over 5 years18,505,147.78
Total106,766,054.21

3) Bad debt provision accrual, collected or reversal in the period

Bad debt provision accrual in the period:

In RMB

CategoryOpening balanceAmount changed in the periodEnding balance
AccrualCollected or reversalWritten-offOther

Including the important amount collected or switches back in the period:

In RMB

NameAmount collected or switches backWay of collection

4) The actual written-off other receivables in the current period

In RMB

ItemWritten-off amount

Including the important written-off situation of other receivables:

In RMB

NameNature of other receivablesWritten-off amountWritten-off reasonWritten-off procedure performedWhether the payment is generated by related party transactions

Description of other receivables written-off:

5) Top 5 other receivables collected by arrears party at ending balance

In RMB

CompanyNatureEnding balanceAccount agesProportion in total other receivables at period-endEnding balance of bad debt provision
Wuhan HengfaIntercourse funds82,263,990.66Within one year;77.00%

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Technology Co., Ltd.1-2 years
Shenzhen Zhongheng HUAFA Property Co., LtdIntercourse funds8,588,951.51Within one year8.00%
Shenzhen HUAFA Property Leasing Co., Ltd.Rental fee receivable4,588,859.19Over 3 years4.00%4,588,859.19
PortmanIntercourse funds4,021,734.22Over 3 years4.00%4,021,734.22
Shenzhen Jifang Investment Co., LtdRental fee receivable1,071,160.00Over 3 years1.00%1,071,160.00
Total--100,534,695.58--9,681,753.41

6) Receivables involving government subsidies

In RMB

NameGovernment subsidy itemEnding balanceEnding account ageEstimated time, amount and basis of receipt

7) Other receivable for termination of confirmation due to the transfer of financial assets

8) The amount of assets and liabilities that are transferred other receivable and continued to be involved

Other note:

3. Long-term equity investments

In RMB

ItemEnding balanceOpening balance
Book balanceProvision for impairmentBook valueBook balanceProvision for impairmentBook value
Investment for subsidiary186,618,400.00186,618,400.00187,218,400.00600,000.00186,618,400.00
Total186,618,400.00186,618,400.00187,218,400.00600,000.00186,618,400.00

(1) Investment for subsidiary

In RMB

The invested entityOpening balance (Book value)Changes in the periodClosing balance (Book value)Closing balance of impairment
AdditionalReduceAccrual of impairmentOther

SEMI-ANNUAL REPORT 2021

investmentinvestmentprovisionprovision
Shenzhen Huafa Property Leasing Co., Ltd.
Shenzhen Zhongheng HUAFA Property Co., Ltd1,000,000.001,000,000.00
Wuhan Hengfa Technology Co., Ltd.183,608,900.00183,608,900.00
Shenzhen HUAFA Hengtian Co., Ltd.1,000,000.001,000,000.00
Shenzhen HUAFA Hengtai Co., Ltd.1,000,000.001,000,000.00
Ruth Co., Ltd.9,500.009,500.00
Total186,618,400.00186,618,400.00

(2) Investment for associates and joint venture

In RMB

EnterpriseOpening balance (book value)Current changes (+, -)Ending balance (book value)Ending balance of depreciation reserves
Additional investmentCapital reductionInvestment gain/loss recognized under equityOther comprehensive income adjustmentOther equity changeCash dividend or profit announced to issuedImpairment accrualOther
I. Joint venture
II. Associated enterprise

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(3) Other note

4. Operating revenue and cost

In RMB

ItemThe PeriodLast Period
RevenueCostRevenueCost
Other business22,146,204.314,439,887.1616,720,522.472,040,226.11
Total22,146,204.314,439,887.1616,720,522.472,040,226.11

Information relating to revenue:

In RMB

CategoryBranch 1Branch 2Total
Including:
Including:
Including:
Including:
Including:
Including:
Including:

Information relating to performance obligations:

NilInformation relating to the transaction price assigned to the remaining performance obligation:

At end of the period, the corresponding revenue amount for performance obligations that have been signed but have not beenperformed or have not been performed is 0.00 yuan, of which, yuan expected to recognized as revenue in the year.Other explanation:

Nil

5. Investment income

In RMB

ItemThe PeriodLast Period

6. Other

Nil

SEMI-ANNUAL REPORT 2021

XVIII. Supplementary Information

1. Current non-recurring gains/losses

√ Applicable □ Not applicable

In RMB

ItemAmountNote
Gain/loss of entrusted investment or assets management149,767.58
Other non-operating income and expenditure except for the aforementioned items-194,603.88
Total-44,836.30--

Concerning the extraordinary profit (gain)/loss defined by Q&A Announcement No.1 on Information Disclosure for CompaniesOffering Their Securities to the Public --- Extraordinary Profit/loss, and the items defined as recurring profit (gain)/loss according tothe lists of extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering TheirSecurities to the Public --- Extraordinary Profit/loss, explain reasons

□ Applicable √Not applicable

2. ROE and earnings per share

Profits during report periodWeighted average ROEEarnings per share
Basic earnings per share (RMB/Share)Diluted earnings per share (RMB/Share)
Net profits belong to common stock stockholders of the Company2.40%0.02480.0248
Net profits belong to common stock stockholders of the Company after deducting nonrecurring gains and losses2.40%0.02860.0286

3. Difference of the accounting data under accounting rules in and out of China

(1) Difference of the net profit and net assets disclosed in financial report, under both IAS (InternationalAccounting Standards) and Chinese GAAP (Generally Accepted Accounting Principles)

□ Applicable √ Not applicable

SEMI-ANNUAL REPORT 2021

(2) Difference of the net profit and net assets disclosed in financial report, under both foreign accountingrules and Chinese GAAP (Generally Accepted Accounting Principles)

□ Applicable √ Not applicable

(3) Explanation on data differences under the accounting standards in and out of China; as for thedifferences adjustment audited by foreign auditing institute, listed name of the institute

4. Other

Nil


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