[年报]振华重工:振华重工2020年年度报告（英文版）
原标题:振华重工:振华重工2020年年度报告（英文版） Stock Code: 600320 900947 Stock Name: Zhenhua Heavy Zhenhua B-share Shanghai Zhenhua Heavy Industries Co., Ltd. Annual Report 2020 CONTENTS Section I Section II Section III Section IV Section V Section VI Section VII Section VIII Section IX Section X Section XI Section XII Definitions 03 Company Profile and Principal Financial Indexes 04 Business Profile 08 Discussion and Analysis of the Performance 10 Important Events 19 Changes in Ordinary Shares and Shareholders' Situation 34 Preferred Shares 38 Directors, Supervisors, Senior Executives and Employees 39 Corporate Governance 45 Related Information on Corporate Bonds 47 Financial Report 48 List of Reference Documents 199 Important Notice The Board of Directors, Board of Supervisors, directors, supervisors and senior executives of the Company hereby guarantee the truthfulness, accuracy and completeness of the contents carried in this annual report, guarantee no false record, serious misleading statement or great omission carried in this annual report and guarantee to assume the legal responsibilities jointly and separately. All directors of the Company are present at the board meeting. Ernst & Young LLP. (Special General Partnership) issues the standard audit report without qualified opinion for the Company. Liu Chengyun, the chairman of the Company, Zhu Xiaohuai, person in charge of accounting work, and Sun Guangbo, person in charge of accounting agency (accountant in charge) hereby declare that the financial statements in this Annual Report are true, accurate and complete. Proposal for profit distribution or common reserves capitalizing during the reporting period reviewed by the board of directors Considering the Company’s business plan and the capital demand in 2021, in order to ensure the Company’s long-term healthy and sustainable development, the profit distribution proposal for 2020 is as follows: the Company will neither distribute the profits nor transfer the capital public reserves into the paid-in capital. Risk declaration of forward-looking statements □Applicable √ Not Applicable Does the Company have non-operating funds occupied by the holding shareholder and its related parties? No Does the Company provide the external guarantees in breach of the stipulated decision- making procedure? No Whether more than half of the directors cannot guarantee the authenticity, accuracy and completeness of the annual report disclosed by the Company? No Major Risk Warning The company has described the related potential risks in this annual report. Investors may pay attention to the same. Please refer to discussion and analysis of the performance and related chapters for the risks the company may be confronted with in the future development. Others □Applicable √ Not Applicable 1 2 3 4 5 6 7 8 9 10 11 Section I Definitions 2020 I. Definitions The terms used in this report shall be defined as follows, unless otherwise specified: Definitions of high frequency terms Company, the Company Refers to Shanghai Zhenhua Heavy Industries Co., Ltd. CCCC Refers to China Communications Construction Company Ltd. CCCG Refers to China Communications Construction Group Co., Ltd. CCCG HK Refers to CCCG (HK) Holding Limited Reporting period Refers to From Jan. 1, 2020 to Dec. 31, 2020 Section II Company Profile and Principal Financial Indexes 1 Company Information Company name in ChineseAbbreviation of the Company name in Chinese 上海振华重工（集团）股份有限公司 振华重工 Company name in English SHANGHAI ZHENHUA HEAVY INDUSTRIES CO.,LTD. Abbreviation of the Company name in English ZPMC Legal representative of the Company Liu Chengyun 2 Contact Information Secretary of the Board of Directors Name Sun Li Address No. 3261, Dongfang Road, Shanghai Telephone 021-50390727 Fax 021-31193316 E-mail [email protected] 3 Basic Information Registered address No.3470, Pudong South Road, Shanghai Postal code of registered address 200125 Office address No. 3261, Dongfang Road, Shanghai Postal code of office address 200125 Website http://www.zpmc.com E-mail [email protected] 4 Information disclosure and placement location Newspaper designated by the Company for information Shanghai Securities News, Hong Kong Wen Wei Po disclosure Website designated by China Securities Regulatory Commission (CSRC) for publishing the annual report of the www.sse.com.cn Company Placement location of the annual report of the Company Securities Affairs Office 20202020 5 Stock information Stock Information Stock type Stock exchange Stock abbreviation Stock code Stock abbreviation before change A-share Shanghai Stock Exchange (SSE) Zhenhua Heavy 600320 ZPMC Industries B-share Shanghai Stock Exchange (SSE) Zhenhua B-share 900947 - 6 Other relevant information Name Ernst & Young LLP (Special General Partnership) Public accounting Room 01-12, Floor 17th, Ernst & Young Tower Oriental Plaza, No.1 firm engaged by the Office address East Changan Street, Dongcheng District, Beijing Company (domestic) Signed by the Accountants Liu Wei, Gu Chengli 7 Main accounting data and financial indexes in recent three years (I) Main accounting data Unit: Yuan Currency: CNY Main accounting data 2020 2019 Year-on-year change (%) 2018 Operating revenue Operating revenue after deducting the business income unrelated to primary business and the income without commercial substance Net profit attributable to the shareholders of the listed company Net profit attributable to the shareholders of the listed company after deducting the non-recurring profits and losses Net cash flows from operating activities 22,655,141,652 22,396,639,375 422,240,299 -58,462,207 819,389,020 24,595,587,883 / 514,930,143 311,117,615 1,290,213,109 -7.89 / -18.00 -118.79 -36.49 21,812,389,644 / 443,005,092 121,335,528 553,943,979 At the end of 2020 At the end of 2019 Year-on-year change (%) At the end of 2018 Net assets attributable to the shareholders of the listed company 14,570,822,140 15,543,404,014 -6.26 15,185,861,952 Total assets 79,320,644,540 74,410,783,300 6.60 70,598,364,627 (II) Major financial indexes Major financial indexes 2020 2019 Year-on-year change (%) 2018 Basic earnings per share (RMB/share) Diluted earnings per share (RMB/share) Basic earnings per share after deducting nonrecurring profits and losses (RMB/share) Weighted average ROE (%) Weighted average ROE after deducting non-recurring profits and losses (%) 0.080 0.080 -0.011 3.04 -0.43 0.098 0.098 0.059 3.39 2.06 -18.37 -18.37 -118.64 -0.35 -2.49 0.084 0.084 0.023 2.92 0.80 Notes to the main accounting data and financial indexes in the past 3 years before the end of the reporting period □Applicable √ Not Applicable 18 Differences in accounting data under domestic and overseas accounting standards 1.Difference in net profits and net assets attributable to the shareholders of the listed company in the financial statement synchronously disclosed under the international and national accounting standards □Applicable √ Not Applicable 2.Difference in net profits and net assets attributable to the shareholders of the listed company in the financial statement synchronously disclosed under the domestic and overseas accounting standards □Applicable √ Not Applicable 3.Explanation for differences between the domestic and overseas accounting standards: □Applicable √ Not Applicable 19 Main financial data in 2020 by quarters Unit: Yuan Currency: CNY Q1 (Jan. to Mar.) Q2 (Apr. to Jun.) Q3 (Jul. to Sep.) Q4 (Oct. to Dec.) Operating revenue Net profit attributable to the shareholders of the listed company Net profit attributable to the shareholders of the listed company after deducting the non-recurring profits and losses Net cash flows from operating activities 4,415,427,928 -92,971,034 100,767,019 -375,004,585 4,715,971,907 109,610,761 28,640,017 419,553,753 5,341,644,401 175,488,612 -58,544,317 23,089,584 8,182,097,416 230,111,960 -129,324,926 751,750,268 110 Notes to differences between the quarterly data and the data in periodically disclosed reports Applicable √ Not Applicable Non-recurring profit and loss items and amount √ Applicable □ Not Applicable Unit: Yuan Currency: CNY Non-recurring profit and loss items Amount in 2020 Note (if applicable) Amount in 2019 Amount in 2018 Profit or loss from disposal of non-current assets Government subsidies included in current profits and losses except 36,620,758 49,091,913 155,557,716 for government subsidies closely related to the Company business, in line with national policies and obtained by quota or quantity at unified state standards Profit or loss on changes in fair values of held-for-trading financial assets, derivative financial assets, held-for-trading financial liabilities and derivative financial liabilities, and investment income obtained 97,849,026 93,271,980 114,412,517 from disposal of held-for-trading financial assets, derivative financial assets, held-for-trading financial liabilities, derivative financial liabilities and other credit investment, except for effective hedging operations associated with the company's normal operations 356,116,979 146,517,397 74,200,750 Reversal of provision for impairment of receivables subject to separate impairment test 78,007,100 150,327,138 Other non-operating revenue and expenses except for the abovementioned items 4,718,614 -18,553,180 -67,069,856 Affected amount of minority equity -15,226,311 -23,013,076 -30,908,588 Affected amount of income tax -77,383,660 -43,502,506 -74,850,113 Total 480,702,506 203,812,528 321,669,564 111 111 Items measured at fair value √ Applicable □ Not Applicable Unit: Yuan Currency: CNY Item December 31, 2019 December 31, 2020 Current change Impact on current profits Jiangxi Huawu Brake Co., Ltd. 132,211,332 228,142,450 95,931,118 81,991,399 Qingdao Port International Co., Ltd. 510,671,771 415,582,601 -95,089,170 -58,710,297 China Railway Signal & Communication Corporation Limited 479,560,537 269,294,333 -210,266,204 -150,959,680 Shenwan Hongyuan Group Co., Ltd. 1,119,345 1,154,324 34,979 47,226 COSCO Shipping Holdings Co., Ltd. 585,555,555 679,011,665 93,456,110 423,923,787 Derivative financial assets 22,235,244 0 -22,235,244 3,153,419 Derivative financial liabilities -7,312,741 -458,882 6,853,859 5,825,780 Equity instrument investment 8,438,278 8,438,278 0 0 Hunan Fengri Power & Electric Co., Ltd. 24,348,689 22,685,894 -1,662,795 0 CCCC Highway Bridges National Engineering Research Centre Co., Ltd. 17,649,136 19,319,276 1,670,140 0 CCCC National Engineering Research Center of Dredging Technology and Equipment Co., Ltd. Shenyang Weichen Crane Equipment Co., Ltd. (Former 9,005,378 8,000,908 -1,004,470 0 name: Shanghai Zhenhua Port Machinery (Group) Shenyang Elevator Co., Ltd.) 2,865,664 4,197,036 1,331,372 938,696 Ningbo Weilong Port Machinery Co., Ltd. (Former name: ZPMC Ningbo Transmission Machinery Co., Ltd) ZPMC Longchang Lifting Equipment Co., Ltd (Former name: 7,241,610 6,565,227 -676,383 5,108,263 Shanghai Zhenhua Port Machinery (Group) Longchang Lifting Equipment Co., Ltd.) 870,791 737,410 -133,381 125,025 CCCC Tianhe Mechanical Equipment Manufacturing Co.,Ltd. -330,094,057 330,094,057 3,627,322 Total 1,794,460,589 1,992,764,577 198,303,988 315,070,940 12 Others □Applicable √ Not Applicable Section III Business Profile I. Main business, business model of the Company and the industrial profile during the reporting period The Company is a famous heavy-duty equipment manufacturer, and a state-owned listed company on A and B shares, with the headquarters in Shanghai and multiple production bases in Shanghai and Nantong. It is also the biggest port heavyduty machinery equipment manufacturer in the world. The business scope of ZPMC mainly covers: marine heavy industry, heavy special steel structure, marine transportation and installation, system integration, engineering general contracting, electrical product, software development and integration, investment and financing business, integrated services. While constantly consolidating its traditional business advantages, it is also actively expanding smart industries, livelihood consumption, integrated development and digital industries. The business scope of the Company covers: design, construction, installation and contracting of large port loading and unloading system and equipment, offshore heavy equipment, engineering machinery, engineering vessels and large metal structural parts and their parts and components; ship repair; leasing of equipment; leasing of self-owned houses; leasing of self-produced crane; sales of the products made by the sales company; international sea transportation by special purpose vessels that can be transported with the whole equipment; specialized contracting of steel structure engineering; construction of electric construction engineering; and construction of electromechanical installation and construction engineering; research and development, installation and sales of oil and gas exploration equipment and mechanical engineering equipment; design of marine engineering buildings; technology development, technical consulting, technical services, and technology transfer in the fields of computer software and information, computer network, mechanical technology, environmental protection technology, new energy technology, intelligent technology; installation and maintenance of railway and urban rail transportation equipment and accessories; property management; loading, unloading, handling and storage; parking lot (warehouse) operation and management; import and export business of goods and technologies (In case of quota, license management, special regulations, quality inspection, safety inspection and construction qualification requirements involved, it shall not carry out the business activities before obtaining the corresponding qualifications or licenses in accordance with the relevant national regulations).[Items subject to approval according to law can be carried out only after such approval is granted by the competent authorities] In recent years, the traditional ports are gradually upgraded towards automation, digitization and intelligence, and are transforming to the new operation mode of “smart port” and “green port”. Accordingly, the port machinery and equipment are also developing towards high efficiency, automation, digitization, intelligence, “green” model and environmental protection. By increasing the investment in scientific and technological research and development, deepening the cooperation with strategic customers and cross-industry cooperation, ZPMC has actively expanded new business fields and further strengthened its competitive advantage while consolidating its leading position in the industry. II. Explanation for major changes in prime assets of the Company during the reporting period □Applicable √ Not Applicable III. Analysis of the core competitiveness during the reporting period √ Applicable □ Not Applicable Leading R & D capability The Company has adhered to the top-level design of scientific and technological innovation and made overall planning of the science and technology innovation system. The design and R&D center of the Company has been building a scientific and technological innovation system with the ZPMC characteristics from many aspects, actively expanded the cooperation space of open innovation alliance, focused on the key technical challenges in the development, strengthened the organic connection of innovation chain and industrial chain with the market demand, and has built an open technology innovation alliance or collaborative innovation platform with many domestic and foreign universities, scientific research institutions and enterprises. In 2020, the Company applied for 231 patents, including 99 invention patents and 132 utility models, and was granted 186 patents, including 39 invention patents and 140 utility models; it was also granted 5 international patents, 41 software copyright registrations, and 2 drawing works registrations. In 2020, the “Research and Application of Key Technologies for Yangshan Phase IV Super-Large Automated Container Terminal” won the Grand Prize of the Award for Progress in Science and Technology of Shanghai City, and the “Research and Application of Key Technologies of Super-Large Quayside Bridge for 3E Container Ships” won the Second Prize of the Award for Progress in Science and Technology of Shanghai City. Furthermore, the Company has actively participated in national, industrial and local standardization activities and undertook 63 international, national, industrial, local and group standards, of which 40 have been issued. 2 2 Intelligent manufacturing capability in continuous upgrading In order to improve the product quality and production efficiency, with intelligent equipment and intelligent workshop as the breakthrough points, the Company has carried out pilot transformation and upgrading of intelligent manufacturing in several production bases. The automation and intelligent manufacturing were firstly implemented in the key manufacturing of standardized parts, such as box girder components related steel structure and mechanical accessories in query-side container crane which was the main product of the Company. In the way of promotion, the Company took the construction of intelligent workshop as the starting point to make experiments in building the automated, information-based and efficient production process for quayside bridge box girder components; through the introduction of advanced processing equipment with data acquisition function such as built-in PLC, intelligent welding robot, RGV unmanned transport vehicle and other intelligent equipment, as well as in combination with information integration technology, it realized the interconnection between equipment and the visual management of production site. Through the preliminary building of intelligent workshop, it solved the problem of low automation level in large-scaled lifting equipment manufacturing industry, greatly reduced the over dependence on workers, reduced labor cost, and provided guarantee for the control of the quality stability of products, which was of great reference significance for promoting the adjustment and upgrading of related industrial structure in the same industry. 3 Global marketing network and digital supply chain platform The Company has always focused on global development, actively explored the world market, and constantly strengthened the global network layout of overseas branches. It has established 28 overseas branches in the world, established good partnership and solid cooperation foundation with local enterprises and upstream and downstream enterprises of the industry, and continuously exerted its localization advantages. Based on its global operation and service network, the Company has provided integrated and lean operation and lifecycle service for global customers in a fast, accurate and comprehensive way. The Company has a service team composed of more than 1000 high-quality professionals on the site all over the world, which can provide efficient solutions and perfect spare parts service support and supply goods to the world in the shortest time. Terminexus, a wholly-owned subsidiary of the Company, has built the first digital supply chain platform in port machinery industry. Section IV Discussion and Analysis of the Performance I. Discussion and Analysis of the Performance In 2020, under the guidance of the long-term goal of building a world excellent company with international competitiveness and the established strategies, the Company has overcome COVID-19 and other unfavorable factors, enhanced the confidence in development, persisted in reform and innovation, and promoted the epidemic prevention and control, production and capacity resume, market extension, reform and innovation, environmental protection construction, risk resolution, poverty alleviation and Party building, which ensured the stable development of the Company. During the reporting period, the port machinery business of the Company went on expanding and stabilized the basic development of the Company. The Company products have entered 104 nations and regions, and the Company has won the bidding for some key projects including Adani, Maersk (Ivory Coast), COSCO Haikou and Xiuying Port. Intelligent straddle carrier, ship loader and reach stacker development by the Company have achieved “zero” breakthrough in the market. In offshore business, inventory elimination and new signing of projects were advanced simultaneously, and the sales of core accessories such as shield machine gearbox were good. In steel structure business, it has implemented many highquality projects, including Ivory Coast Bridge, Vanuatu Bridge, Guangdong Jieyang wind power pipe pile, Xiamen Second Passage, etc. The offshore service business has actively expanded the business in the field of offshore wind power general contracting. The electrical business has been promoted in an orderly manner, and EZ electronic control has entered 83 nations and regions; the advantages of PV brand are gradually emerging; the intelligent manufacturing project has made great progress. The integrated service business directly faced the challenge of the spread of overseas epidemic, and completed the main tasks of comprehensive production and operation objectives. In investment business, the secondary operation of existing project has achieved remarkable results. Emerging business made new progress. In smart parking business, it won Hengyang smart parking project and the multi-storey parking project of Shanghai Shuguang Hospital, and the economic benefits gradually improved. In the livelihood consumption business, it has actively explored such fields as old residential area renovation, smart campus construction, and the leasing and sales of prefabricated construction modules, among which the scale of service car business in Xiong’an area further increased. The integrated development business continued to improve the qualification, the transformation advantages of main business continued to show, and the key projects are implemented and progressing orderly. The digital business is gradually expanding, and the operation quality and efficiency of Terminexus e-commerce platform continues to be optimized. II.Performance during the reporting period During the reporting period, the Company realized the operating revenue amounting to RMB 22,655,000,000, representing a year-on-year decrease of 7.89%; the net profit attributable to the shareholders of the listed company was RMB 422,000,000, with a year-on-year decrease of 18%; the basic earnings per share was RMB 0.08,with a year-on-year decrease of 18.37%. Analysis of the performance 1. Analysis table of changes in the related items in profit statement and cash flow statement Unit: Yuan Currency: CNY Item Amount in the current period Amount in the same period of the last year Change (%) Operating revenue 22,655,141,652 24,595,587,883 -7.89 Operating cost 19,413,265,254 20,590,531,322 -5.72 Selling and distribution expenses 105,763,639 122,517,036 -13.67 General and administrative expenses 937,700,839 1,095,131,287 -14.38 Research and development expenditures 737,468,137 887,096,178 -16.87 Financial expenses 1,117,741,864 1,496,586,414 -25.31 Investment income 413,517,783 174,600,552 136.84 Credit impairment loss -138,083,561 -38,761,593 N/A Assets impairment loss -213,647,223 -52,494,284 N/A Income from disposal of assets 6,755,688 49,091,913 -86.24 Net cash flows from operating activities 819,389,020 1,290,213,109 -36.49 Net cash flows from investing activities -1,204,413,136 -1,547,161,450 N/A Net cash flows from financing activities 349,410,948 141,933,820 146.18 2. Analysis of revenue and cost √ Applicable □ Not Applicable The decrease in operating revenue was mainly caused by the delay of some foreign projects affected by the epidemic. The decrease in operating cost was mainly caused by the decrease in operating revenue. The decrease in selling and distribution expenses was mainly caused by the decrease in travel expenses affected by the epidemic. The decrease in general and administrative expenses was mainly caused by the decrease in employee compensation. The decrease in the research and development expenditures was mainly caused by the decrease in the expensed expenditures for research and development projects of the Company. The decrease in financial expenses was mainly caused by the decrease in interest expense on bank loans of the Company. The increase in the investment income was mainly caused by the increase in the investment income from the disposal of held-for-trading financial assets of the Company. The change in credit impairment loss was mainly caused by the increase in the Company’s provision for bad debts of accounts receivable. The change in asset impairment loss was mainly caused by the increase in the Company’s provision for inventory depreciation. The decrease in the income from disposal of assets was mainly caused by the decrease in the net gains from the disposal of fixed assets. The changes in the net cash flows from operating activities were mainly caused by the decrease of tax returns received by the Company. The changes in the net cash flows from investing activities were mainly caused by the investment recovery by the Company and the increase in the cash received from investment income. The changes in the net cash flows from financing activities were mainly caused by the increase in cash received by the Company from bank borrowings. (1) Main businesses by sectors, products and regions Unit: Yuan Currency: CNY Main business by products Product Operating revenue Operating cost Gross profit rate (%) Year-on- year change in operating revenue (%) Year-on-year change in operating cost (%) Year-on-year change in gross profit rate (%) Port machinery 14,457,042,916 11,813,606,078 18.28 -12.16 -10.78 -1.27 Heavy-duty equipment 1,062,669,195 994,642,219 6.40 -28.76 -18.35 -11.93 “Building-Transfer” project and engineering 2,365,760,874 2,220,603,949 6.14 -7.74 -8.58 +0.87 construction Steel structure and related income 3,277,507,651 3,170,269,443 3.27 20.97 23.29 -1.82 Marine transport and others 1,233,658,739 1,106,003,124 10.35 24.72 15.27 +7.36 Main business by regions Region Operating revenue Operating cost Gross profit rate (%) Year-on- year change in operating revenue (%) Year-on-year change in operating cost (%) Year-on-year change in gross profit rate (%) Chinese Mainland 12,945,383,848 11,967,807,784 7.55 4.85 6.85 -1.73 Chinese Mainland (export sales) 1,061,063,332 760,474,241 28.33 52.22 117.67 -21.55 Europe 2,604,103,174 2,329,595,327 10.54 -23.78 -22.06 -1.97 Asia (excluding Chinese Mainland) 3,289,553,492 2,404,009,133 26.92 -5.20 -3.18 -1.52 North America 1,345,494,819 948,458,084 29.51 -39.01 -44.78 +7.37 South America 444,522,956 451,059,902 -1.47 -53.85 -47.20 -12.77 Africa 468,958,316 264,264,072 43.65 -38.41 -48.55 +11.10 Oceania 237,559,438 179,456,270 24.46 -32.66 -42.45 +12.85 Notes to the main business by sectors, products and regions 1)The amount listed in “Mainland China (export sales)” in “Main business by regions” was the main operation income from the export sales of this Company to the overseas subsidiaries of the Company and then sales to the related projects of the domestic customers. 2)Affected by the outbreak of COVID-19, the Company’s overseas projects were delayed, resulting in the decrease in overseas operating revenue by regions. (2) Analysis table of cost-volume-profit relationship □Applicable √ Not Applicable (3) Cost analysis table Unit: Yuan By products Product Items of cost structure Amount in the current period Proportion in total cost in the current period (%) Amount in the same period of the last year Proportion of the one in the same period of the last year in total costs (%) Yearon- year change (%) Notes Port machinery Raw material cost, labor cost and production cost 11,813,606,078 61.19 13,240,912,286 64.85 -10.78 Normal operating fluctuations Heavy-duty equipment Raw material cost, labor cost and production cost 994,642,219 5.15 1,218,182,031 5.97 -18.35 Normal operating fluctuations Engineering construction projects Raw material cost, labor cost and production cost 2,220,603,949 11.50 2,428,961,159 11.90 -8.58 Normal operating fluctuations Steel structure and related income Raw material cost, labor cost and production cost 3,170,269,443 16.42 2,571,473,994 12.59 23.29 Normal operating fluctuations Marine transport and others Raw material cost, labor cost and production cost 1,106,003,124 5.73 959,513,561 4.70 15.27 Normal operating fluctuations Other information about cost analysis None (4) Particulars about main customers and suppliers √ Applicable □ Not Applicable The sales volume of top 5 customers was RMB 4.18657 billion, accounting for 19% of total annual sales volume; the sales volume of the related parties in that of top 5 customers was RMB 897.72 million, accounting for 4% of total annual sales volume. The purchase amount of top 5 suppliers was RMB 2.95671 billion, accounting for 12% of total annual purchase amount; the purchase of the related parties in that of top 5 suppliers was RMB 645.33 million, accounting for 3% of total annual purchase amount. Other description None 3. Expenses √ Applicable □ Not Applicable The decrease in selling and distribution expenses was mainly caused by the decrease in travel expenses affected by the epidemic. The decrease in general and administrative expenses was mainly caused by the decrease in employee compensation. The decrease in the research and development expenditures was mainly caused by the decrease in the expensed expenditures for research and development projects of the Company. The decrease in financial expenses was mainly caused by the decrease in interest expense on bank loans of the Company. 4. Investment in R&D (1) Detail table of investment in R&D √ Applicable □ Not Applicable Unit: Yuan Current expensed investment in R&D Current capitalized investment in R&D Total investment in R&D Proportion of total investment in R&D in operating revenue (%) Number of R&D employees in the Company Proportion of number of R&D employees in the total employees of the Company (%) Proportion of capitalized investment in R&D (%) 737,468,137 111,203,919 848,672,056 3.75 1,617 18.6 13.10 (2) Explanation □Applicable √ Not Applicable 5. Cash flow √ Applicable □ Not Applicable The net cash flows from operating activities were RMB 819 million, mainly caused by the decrease of tax returns received by the Company. The net cash flows from investing activities were RMB -1.204 billion, mainly caused by the investment recovery and the increase in cash received from investment income. The net cash flows from financing activities were RMB 349 million, mainly caused by the increase in the cash received from borrowings by the Company. 2 3 Explanation for the significant changes in profits due to non-main business □Applicable √ Not Applicable Analysis of assets and liabilities √ Applicable □ Not Applicable 1. Assets and liabilities Unit: Yuan Item Amount at the end of the current period Proportion of the amount at the end of the current period in total assets (%) Amount at the end of the previous period Proportion of the amount at the end of the previous period in the total assets (%) Year- onyear change (%) Notes Accounts receivable 7,227,065,255 9.11 4,966,175,528 6.67 45.53 Inventories 22,325,839,116 28.15 8,561,251,580 11.51 160.78 Outstanding payments for construction completed — 0.00 12,434,158,624 16.71 -100 Contract assets 2,063,296,890 2.60 — 0.00 N/A Non-current assets due within one 1,884,370,444 2.38 1,313,203,581 1.76 43.49 year Deferred income tax assets 752,960,672 0.95 486,197,635 0.65 54.87 Other non-current assets 837,004,289 1.06 161,337,287 0.22 418.79 Other non-current financial assets 330,094,057 0.42 — 0.00 N/A Advances to suppliers 4,893,675 0.01 822,987,986 1.11 -99.41 Contract liabilities 11,195,309,083 14.11 — 0.00 N/A Amount settled for uncompleted work — 0.00 1,679,950,879 2.26 -100 Payroll payable 188,799,969 0.24 329,978,281 0.44 -42.78 Other payables 481,065,700 0.61 711,389,996 0.96 -32.38 Non-current liabilities due within 1,374,465,319 1.73 7,287,484,513 9.79 -81.14 one year Long-term borrowings 16,850,299,742 21.24 8,413,339,986 11.31 100.28 Estimated liabilities 261,072,318 0.33 484,000,772 0.65 -46.06 Other description The increase in accounts receivable was mainly caused by the adjustment of the beginning amount under new revenue standard. The increase in inventories was mainly caused by the reclassification of outstanding payments for construction completed under new revenue standard implemented by the Company. The decrease in outstanding payments for construction completed was mainly caused by the reclassification of outstanding payments for construction completed under new revenue standard implemented by the Company. The increase in contract assets was mainly caused by the reclassification of outstanding payments for construction completed under new revenue standard implemented by the Company. The increase in the non-current assets due within one year was mainly caused by the increase in the long-term receivables due within one year. The increase in deferred income tax assets was mainly caused by the impact of the adjustment of undistributed profits at the beginning of the year under new revenue standard on enterprise income tax. The increase in other non-current assets was mainly caused by the reclassification of the contract warranty balance under new revenue standard implemented by the Company. The increase in other non-current financial assets was mainly caused by the fair value of the remaining equity after the Company lost the control of Tianhe Mechanical Equipment Manufacturing Co., Ltd. The decrease in advances from customers was mainly caused by the reclassification of advances from customers under new revenue standard implemented by the Company. The increase in contract liabilities was mainly caused by the reclassification of amount settled for uncompleted work and advances from customers under new revenue standard implemented by the Company. The decrease in amount settled for uncompleted work was mainly caused by the reclassification of amount settled for uncompleted work under new revenue standard implemented by the Company. The decrease in payroll payable was mainly caused by the decrease in the accrued bonus of the Company. The decrease in other payables was mainly caused by the Company’s payment of investment funds and other funds to CCCC. The decrease in the non-current liabilities due within one year was mainly caused by the decrease in the long-term bank borrowings due within one year. The increase in long-term borrowings was mainly caused by the increase in long-term bank borrowings of the Company. The decrease in estimated liabilities was mainly caused by the decrease in estimated after-sales service cost of the products. 2. Particulars about main restricted assets by the end of the reporting period √ Applicable □ Not Applicable Item Book value at the end of the period Reason for restriction Monetary funds Fixed assets Long-term receivables 50,332,396 2,821,018,550 5,614,309,162 Special fund, letter of guarantee from the bank and guarantee fund for L/C collected from the overseas projects and deposited in the overseas supervision account Collateral for loan Hypothecation for loan Total 8,485,660,108 / 3. Other description □Applicable √ Not Applicable Analysis of operational information of the industry √ Applicable □ Not Applicable During the reporting period, the value of the newly concluded contracts by the Company on the port machinery was USD 2.933 billion, which was basically the same as that in 2019. The value of the newly concluded contracts on marine engineering products and steel structure was USD 1.041 billion, with a year-on-year decrease of 28.84%, among which the one on steel structure was USD 503 million. The value of the newly concluded contracts on investment business was RMB 2.886 billion, with a year-on-year increase of 41.7%. In the port machinery industry, affected by COVID-19, the investment progress of overseas customers is slowing down, and the number of overseas orders is decreasing. Due to the development needs, domestic customers have increased their investments in port machinery and equipment, and the proportion of newly signed domestic orders has increased. The increase in market demand for traditional new equipment has slowed down. Businesses such as the construction of automated terminals, after-sales maintenance and renovation of existing equipment have become new bright spots in the market. With the official commercialization of 5G technology, the cutting-edge technologies such as 5G, artificial intelligence and big data will accelerate the transformation and upgrading of the port and shipping industry. In the offshore industry, as the country attaches more importance to the development of the marine economy, the demand for offshore supporting services such as energy exploitation, transportation, and installation will increase to a certain extent, but the trend of international oil prices still brings uncertainty to the recovery time of the offshore industry. The steel structure industry benefited from the increase in investment in infrastructure, and the overall situation of the industry is more optimistic. At present, the Company focuses on the development of large, heavy and special steel structure business, and the development trend is sound. However, due to the low access threshold, the competition is fiercer, and the efficiency needs to be further improved. The investment industry continues to be optimized, driving the entire industry chain to a new development track. Domestic investment in industries such as manufacturing, infrastructure, and green energy has entered a stage of highquality development. For a long period of time in the future, funds will continue to be biased towards the common benefit of supply and demand, advanced manufacturing and livelihood construction with multiplier effects, infrastructure construction, and other fields. For emerging industries, the exploration and application of 5G and digital technologies will continue to empower manufacturing. The reconstruction of old communities, the construction of prefabricated buildings, and the construction of smart cities are in line with the needs of the times and present strong development potential. With the support of national policies, the integrated development industry has gradually optimized its market environment, gradually consolidated its industrial foundation and integrated its content. Analysis of investment 1. Overall analysis of external equity investment √ Applicable □ Not Applicable Investment amount by the end of reporting period Changes in investment amount (RMB) Investment amount in the same period of the last year Change in investment amount (%) 5,027,018,064 382,244,511 4,644,773,553 8.23 (1) Significant equity investment □Applicable √ Not Applicable (2) Significant non-equity investment □Applicable √ Not Applicable (3) Financial assets measured at fair value √ Applicable □ Not Applicable Stock equity held in other listed companies Stock code Stock abbreviation Initial investment cost Initial shareholding ratio (%) Final shareholding ratio (%) Book value at the end of the period Profit or loss in reporting period Changes in owners’ equity during the reporting period Accounting subject Source of shares 03969 06198 300095 601919 CRSC Qingdao Port Huawu Stock COSCO SHIPPING HOLDINGS 617,854,000 308,515,588 11,071,606 420,000,000 1.16 1.59 5.88 0.91 1.16 1.59 5.88 0.45 269,294,333 415,582,601 228,142,450 679,011,665 -150,959,680 -58,710,297 81,991,399 423,923,787 -150,959,680 -58,710,297 81,991,399 423,923,787 Held-for-trading financial assets Held-for-trading financial assets Held-for-trading financial assets Held-for-trading financial assets Purchase on market Purchase on market Contribution Subscription Stock equity held in financial enterprises Object name Initial investment cost Initial shareholding ratio Final shareholding ratio Book value at the end of the period Profit or loss in reporting period Changes in owners’ equity during the reporting period Accounting subject Source of shares Shenwan Hongyuan 200,000 ﹤0.01 ﹤0.01 1,154,324 47,226 47,226 Held-for-trading financial assets Subscription 6 Sales of significant assets and equities □Applicable √ Not Applicable 7 7 Analysis of the primary holding companies and the joint-stock companies √ Applicable □ Not Applicable Unit: Yuan Company Name Main product or services Registered capital Assets size Net profit/ (loss) Construction and installation of large-scale port equipment, Shanghai Zhenhua Heavy Industries Group (Nantong) Transmitter Co., Ltd. engineering vessels, offshore heavy equipment, mechanical （未完）  |