[中报]南 玻Ｂ:2021年半年度报告（英文版）
原标题:南 玻Ｂ:2021年半年度报告（英文版） CSG HOLDING CO., LTD. SEMI-ANNUAL REPORT 2021 Chairman of the Board: CHEN LIN August 2021 Section I. Important Notice, Content and Paraphrase Board of Directors and the Supervisory Committee of CSG Holding Co., Ltd. (hereinafter referred to as the Company) and its directors, supervisors and senior executives hereby confirm that there are no any fictitious statements, misleading statements, or important omissions carried in this report, and shall take all responsibilities, individual and/or joint, for the facticity, accuracy and completeness of the whole contents. Ms. Chen Lin, Chairman of the Board, Mr. Wang Jian, responsible person in charge of accounting and Ms.WangWenxin, principal of the financial department (accounting officer) confirm that the Financial Report enclosed in the semi-annual report of the Company is true, accurate and complete. All directors were present at the meeting of the Board for deliberating the semi-annual report of the Company in person. The future plans, development strategies and other forward-looking statements mentioned in this report do not constitute a material commitment of the Company to investors. Investors and relevant parties should pay attention to investment risks, and understand the differences between plans, forecasts and commitments. The Company has described the risk factors and countermeasures of the Company's future development in detail in this report. Please refer to Section III. Management Discussion and Analysis The Company shall comply with the disclosure requirements of "Shenzhen Stock Exchange Industry Information Disclosure Guidelines No. 13 - Listed Companies Engaged in Non-Metal Building Materials Related Business". The Company has no plans of cash dividend distribution, bonus shares being sent or converting capital reserve into share capital. This report is prepared both in Chinese and English. Should there be any inconsistency between the Chinese and English versions, the Chinese version shall prevail. Content Section I. Important Notice, Content and Paraphrase .......................................................................... 1 Section II. Company Profile & Financial Highlights ........................................................................... 5 Section III. Business Discussion and Analysis .................................................................................... 8 Section IV. Corporate Governance ..................................................................................................... 28 Section V. Environmental and social responsibility ........................................................................... 29 Section VI. Important Events ............................................................................................................. 35 Section VII. Changes in Shares and Particulars about Shareholders ................................................. 46 Section VIII. Preferred shares ............................................................................................................ 51 Section IX. Bonds .............................................................................................................................. 52 Section X. Financial Report ............................................................................................................... 55 Documents available for Reference I. Text of the Semi-annual Report carrying the legal representative’s signature; II. Text of the financial report carrying the signatures and seals of the legal representative, responsible person in charge of accounting and person in charge of financial institution; III. All texts of the Company’s documents and original public notices disclosed in the papers appointed by CSRC in the report period. Paraphrase Item Refers to Content Company, the Company, CSG or the Group Refers to CSG Holding Co., Ltd. Foresea Life Refers to Foresea Life Insurance Co., Ltd. Ultra-thin electronic glass Refers to The electronic glass with thickness between 0.1~1.1mm Second-generation energy-saving glass Refers to Double silver coated glass Third-generation energy-saving glass Refers to Triple silver coated glass AG glass Refers to Anti-glare glass AF glass Refers to Anti-fingerprint glass Section II. Company Profile & Financial Highlights I. Company Profile Short form of the stock Southern Glass A、Southern Glass B Stock code 000012、200012 Listing stock exchange Shenzhen Stock Exchange Legal Chinese name of the Company 中国南玻集团股份有限公司 Abbr. of legal Chinese name of the Company 南玻集团 Legal English name of the Company CSG Holding Co., Ltd. Abbr. of legal English name of the Company CSG Legal Representative Chen Lin II. Person/Way to contact Secretary of the Board Representative of securities affairs Name Yang Xinyu Chen Chunyan Contact address CSG Building, No.1 of the 6th Industrial Road, Shekou, Shenzhen, P. R.C. CSG Building, No.1 of the 6th Industrial Road, Shekou, Shenzhen, P. R.C. Tel. (86)755-26860666 (86)755-26860666 Fax. (86)755-26860685 (86)755-26860685 [email protected] [email protected] III. Other information 1. Way of contact Whether registered address, office address and their postal codes, website address and email address of the Company changed in the report period or not □ Applicable √Not applicable The registered address, office address and their postal codes, website address and email address of the Company did not change in the report period. More details can be found in Annual Report 2020. 2. Information disclosure and preparation place Whether information disclosure and preparation place changed in the report period or not □Applicable √ Not applicable The newspapers designated by the Company for information disclosure, the website designated by CSRC for disclosing semi-annual report and preparation place of semi-annual report did not change in the report period. More details can be found in Annual Report 2020. 3. Other relevant information Whether other relevant information changed in the report period or not □Applicable √ Not applicable IV. Main accounting data and financial indexes Whether it has retroactive adjustment or re-statement on previous accounting data for accounting policy changed and accounting error correction or not □Yes √ No The report period (Jan. to Jun.2021) The same period of last year Increase/decrease year-on-year Operating income (RMB) 6,614,802,538 4,424,221,349 49.51% Net profit attributable to shareholders of the listed company (RMB) 1,352,517,465 391,466,723 245.50% Net profit attributable to shareholders of the listed company after deducting non-recurring gains and losses (RMB) 1,329,814,528 358,644,297 270.79% Net cash flow arising from operating activities (RMB) 1,698,245,375 779,644,389 117.82% Basic earnings per share (RMB/Share) 0.44 0.13 238.46% Diluted earnings per share (RMB/Share) 0.44 0.13 238.46% Weighted average ROE 12.60% 4.08% 8.52% End of this period End of last year Increase/decrease in this period-end over that of last year-end Total assets (RMB) 18,563,101,630 17,882,914,898 3.80% Net assets attributable to shareholders of the listed company (RMB) 11,258,594,182 10,212,989,847 10.24% The total share capital of the company as of the previous trading day of disclosure： The total share capital of the company as of the previous trading day of disclosure (share) 3,070,692,107 Fully diluted earnings per share calculated with latest equity (RMB/share) 0.44 V. Difference of accounting data under domestic and overseas accounting standards 1. Differences of the net profit and net assets disclosed in financial report prepared under international and Chinese accounting standards □ Applicable √ Not applicable No such differences in the report period. 2. Difference of the net profit and net assets disclosed in financial report prepared under overseas and Chinese accounting standards □ Applicable √ Not applicable No such differences in the report period. 3. Explanation of the difference of accounting data under domestic and overseas accounting standards □ Applicable √ Not applicable VI. Items and amounts of non-recurring profit (gains)/loss √Applicable□Not applicable Unit: RMB Item Amount Note Gains/losses from the disposal of non-current asset (including the write-off that accrued for impairment of assets) 137,638 Governmental subsidy reckoned into current gains/losses (not including the subsidy enjoyed in quota or ration according to national standards, which are closely relevant to enterprise’s business) 34,784,072 In addition to the effective hedging business related to the normal business of the company, the profit and loss from changes in fair value arising from the holding of trading financial assets, derivative financial assets, trading financial liabilities and derivative financial liabilities, as well as the investment income from the disposal of trading financial assets, derivative financial assets, trading financial liabilities, derivative financial liabilities and other creditor's rights investments 3,672,330 Other non-operating income and expenditure except for the aforementioned items -8,910,187 Less: Impact on income tax 5,384,885 Impact on minority shareholders’ equity (post-tax) 1,596,031 Total 22,702,937 -- Explain reasons for the non-recurring profit (gain)/loss defined by Q&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities to the Public --- Non-recurring Profit/loss, and the items defined as recurring profit (gain)/loss according to the lists of non-recurring profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities to the Public --- Non-recurring Profit/loss. □ Applicable √ Not applicable It did not exist that items defined as recurring profit (gain)/loss according to the lists of non-recurring profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities to the Public --- Non-recurring Profit/loss in the report period. Section III. Business Discussion and Analysis I. Main business of the Company in the report period (I)Main business of the Company CSG is a leading domestic brand of energy-saving glass and a renowned brand of solar PV products and display devices. Its products and technologies are very popular at home and abroad. Its main business covers R&D, manufacturing and sales of highquality float glass and architectural glass, solar glass, silicon material, renewable energy products such as PV battery and modules, and new materials and information display products such as ultra-thin electronic glass and display devices. It also provides one-stop services such as project development, construction, operation and maintenance of solar photovoltaic power plants. Flat glass industry CSG now has 10 float glass production lines representing the most advanced technology, 2 solar glass production lines and 12 solar glass deep processing production lines in Dongguan, Chengdu, Langfang, Wujiang, Xianning, and also has quartz sand raw material processing and production bases in Sichuan Jiangyou and Guangdong Qingyuan. The annual capacity of various high-grade float glass has reached more than 2.47 million tons and the annual capacity of solar glass has reached over 0.43 million tons. The float glass products cover high-grade float glass and ultra-clear float glass with various thicknesses from 1.3mm to 25 mm, and the performance of the products all reach the leading level in China. Solar glass has a capacity of 60 million square meters per year of deep processing, the products of which cover a variety of thickness of 2-4mm deep processing products. Combining the rapid increase in the penetration rate of dual-glass modules and the Company's future development needs, the Company is building a total of three lightweight and high-efficiency double-glass processing production lines in Wujiang and Dongguan, adding 36 million square meters of photovoltaic glass processing capacity, which is expected to be put into operation in 2021.To make up for the shortcomings of the Group's photovoltaic glass business capacity and large-scale layout, the Company signed an investment agreement with the Fengyang County Government of Anhui Province to build a manufacturing base of lightweightand high-permeability panels for solar energy equipment, which contains the construction of four photovoltaic glass production lines and supporting processing lines with a daily melting capacity of 1,200 tons per line. At present, the construction of the project is progressing smoothly as planned. In addition, the Group is building a photovoltaic glass production line and supporting processing lines with a daily melting capacity of 1,200 tons in Xianning base. At present, the above-mentioned projects are progressing smoothly as planned. The glass of CSG is widely used in high-end architectural curtain walls, decoration and furniture, reflective mirror, automotive windshield, scanner and photocopier transparent panel, home appliance panel, display devices protection and solar energy field. The Company’s products are sold all over the world, and it has established long-term, stable business cooperation with many well-known processing enterprises. Architectural glass industry CSG Group is one of the largest suppliers of high-grade engineering and architectural glass in China. It has built five energy-saving glass processing bases in Tianjin, Dongguan, Xianning, Wujiang and Chengdu.In order to better serve the construction needs of Beijing Tianjin Hebei, Yangtze River Delta, Guangdong, Hong Kong and Macao megalopolis, the Board of Directors of the Group successively approved the construction of Zhaoqing architectural glass base, Wujiang architectural glass intelligent factory and Tianjin architectural glass expansion project in 2020. The above projects will be put into operation gradually from the third quarter of this year, which will further strengthen the competition and service capabilities of the Group's architectural glass business in the main battlefield of urban construction, and it will accumulate valuable experience for the construction and operation of CSG's new-generation architectural glass processing base in the era of intelligent manufacturing. At the same time, in line with the trend of urban construction extending to the mainland in depth, the Group has paid close attention to the layout of architectural glass production capacity in the emerging central city group in the mainland. The Board of Directors of the Group has approved the construction of a new architectural glass base in Xi'an, and further seeks to lay out a class I or class II architectural glass processing base suitable for its scale and demand in areas with similar conditions. In 2017, CSG low-E coated glass was awarded the title of Single Champion Product by the Ministry of Industry and Information Technology, and it passed the review again in 2020, which fully proves the leading position of CSG architectural glass in the industry. The Company has the world's leading glass deep processing equipment and testing equipment, and its products cover allkindsof engineering and construction glass. The Company's R&D and application of glass coating technology keep space with the world and its technology of high-end product even leads the world. Following the second generation of energy-saving glass products, the Company has successively developed the third generation and multi-function energy-saving glass products with continuous improving energy-saving and heat-preservation effect. The domestic high-end market share of high-quality energy-saving and environment-friendly LOW-E insulating glass far exceeds that of competitors.At present, the Company’s coated insulating glass and coated glass have reached annual capacity of more than16.00 million square meters and 36.00 million square meters respectively. The Company’s quality management system for engineering and architectural glass has been respectively approved by organizations of UK AOQC and Australia QAS. The product quality which meets the national standards of the US, the UK and Australia enables CSG has an advantage in the international tendering and bidding. Since 1988, CSG's engineers and technicians have been continuously participating in the formulation and compilation of various national standards and industry standards.Various high-quality architectural glass of the Company has been used in many landmark buildings at home and abroad, such as Beijing Capital International Airport, CCTV, Shanghai Oriental Fisherman’s Wharf, China Resources Headquarters Building, Shenzhen KingKey100 Building, Hong Kong-Zhuhai-Macao Bridge Zhuhai port, Hangzhou Yintai Plaza, Xiamen Yinglan International Financial Center, Gongga Airport in Lhasa, Zhuhai Jinwan Aviation City HUAFA International Business Center, Beijing Dongzhimen Transportation Hub, Hangzhou Xiaoshan International Airport, Zhuhai International Convention and Exhibition Center Phase 2, Ping An Financial Center of China, National Convention Center, Beijing Deputy Administrative Center, Beijing Daxing International Airport, Chengdu Tianfu International Airport, Hangzhou Hampton and other more than ten Hilton Hotels, Hong Kong Four Seasons Hotel, Melbourne Airport, Midtown, International Centre of Abu Dhabi, Egypt's new capital CBD, Korea LCT and Metropolis Phase 2B. Electronic glass and display industry In 2021, the Company's electronic glass business continues to develop. Its four subsidiaries, Hebei Panel, Yichang Photoelectric, Qingyuan New Energy-Saving Materials and Xianning Photoelectric continued to actively implement product upgrading and market upgrading in the application fields of intelligent electronic terminals, touch components, vehicle mounted display, industrial control and commercial display, military security and smart home, so that the market share and brand effect of the Company's medium and high aluminum electronic glass products could improve greatly. Rich product structure, reliable delivery guarantee and strong technical innovation help the Company’s electronic glass business maintain its dominant positionin the fierce market competition. In 2021, the subsidiary Xianning CSG Photoelectric Glass Co., Ltd. continues to expand high-end market share of its second-generation high-aluminum electronic glass and enhance the competitiveness of CSG's electronic glass products with its excellent product performance. The third-generation high-aluminum products have been successfully developed in the laboratory, and their performance can be fully benchmarked against the new generation of competitive products of international brands, which will further enhance the competitive advantages of electronic glass products in the future. Commercial production is currently being promoted as planned. The second phase of the Qingyuan CSG project "One Kiln and Two Lines", which has entered commercial operation in 2021, further increases market share of CSG's electronic glass as well as consolidates and strengthens the Company's competitive advantage. In order to strengthen the Company's high-end market competitiveness in the field of ultra-thin electronic glass for touch applications, the Company plans to invest in a new ultra-thin electronic glass production line with a daily melting capacity of 110 tons and a supporting R&D center in Langfang, Hebei Province. At present, the project is progressing smoothly as planned. After the completion of the above-mentioned projects, CSG Electronic Glass will achieve comprehensive coverage of electronic glass products from the third generation of high aluminum to medium-aluminum, soda-calcium, and from high to middle and low-end electronic glass products, forming a more solid foundation for market competition.CSG has long been committed to becoming the industry's leading electronic glass material solution provider, and it will continue to develop glass-based protective materials with higher strength and competitiveness in the field of touch display, develop human-computer interaction interface materials meeting the requirements of material interconnection in the fields of smart home, vehicle display and advanced medical, and develop revolutionary alternative materials in the fields of transportation and security. CSG has been engaged in the field of touch display since 2000, and now it has formed a complete touch industry chain from vacuum magnetron sputtering coating, fine pattern lithography processing, to touch display modules. Its main business includes ITO conductive glass, ITO conductive film, automotive TP-Sensor and automotive cover. Among them, ITO conductive glass and ITO conductive film, as the traditional business of the Company, are positioned at the middle and high-end customers at home and abroad. In the first half of 2021, the Company's ITO glass market had adequate orders, which created a good operating performance for the Company.In recent years, the Company has focused on the layout of automotive business, and passed IATF16949 quality management system certification, its main business covers core products such as automotive AG glass, automotive TP-Sensor, automotive multifunctional composite cover, which are widely used in automotive intelligent terminals such as automotive central control screens, automotive rearview mirrors, automotive entertainment systems, etc. In the first half of 2021, TP-Sensor was well developed, and its production and sales grew steadily. CSG has become a brand supplier of electronic application materials in the display touch industry, which can provide customers with all-round one-stop touch screen material solutions. In the future, the Company will continue to optimize the layout in the vehicle field, further build the high-end manufacturing industry chain of vehicle touch display, and become a high-quality component supplier in the field of automotive electronics. Solar energy and other industries CSG has entered solar photovoltaic industry since 2005 and is one of enterprises which firstly enter the field in China. After more than ten years of construction, operation and technological upgrading, CSG has built an industry chain in the field, covering high-purity polycrystalline silicon materials, high-efficiency silicon wafer, silicon solar cell and modules, and the design and construction of solar photovoltaic power plants, by which the Company ensures the stable quality and best cost-efficiency of its PV products to customers.The Company has production capacity of high purity polycrystalline silicon with 9,000 tons per year, silicon wafer with 2.2 GW per year, solar cell with 1GWper year, modules with 0.4GW per year, and 132MW installed capacity of photovoltaic power plants. (II)Overview of operation during the report period In the first half of 2021, the national economy continued to recover steadily and keep the momentum of stable growth. As the epidemic has been effectively controlled in China, the domestic industry has recovered significantly and market demand has grown steadily. In this background, the Company continues to follow the development path of "Polishing three pieces of glass (float glass, photovoltaic glass, electronicglass) and forge a brand (architectural glass)", focusing on glass business, and improve competitiveness by upgrading products. At the same time, it continues to promote refined management, reduce costs and increase efficiency, optimize product structure, to further enhance the Company's comprehensive profitability, which lays a solid foundation for achieving sustainable development. In the first half of 2021, the Company seized industry development opportunities and firmly followed the path of high-quality development. It strengthened its differentiated business strategy and reduced overall operating costs by improving quality and efficiency, thereby increasing the profitability of its industries. Its overall operating performance increased significantly year-on-year and achieved leapfrog development.In the first half of 2021, the Company achieved operating income of RMB 6.615 billion, a year-on-year increase of 49.51%; realized net profit of RMB 1.369 billion, a year-on-year increase of 240.65%; and net profit attributable to shareholders of listed company was RMB 1.353 billion, a year-on-year increase of 245.5%. Glass business: In the first half of 2021, the overall economic situation of the glass industry had a well-begun and was forging ahead, with a steady increase in output, and a relatively high increase in industry revenue and profits. According to the data released by the National Bureau of Statistics, the output of flat glass above designated size nationwide was 510 million weight boxes in the first half of the year, a year-on-year increase of 10.8%.In recent years, the effects of the national supply-side structural reforms have appeared, the structure of the glass industry has been optimized, and the benefits of the industry have rebounded.With the extension and development of the industrial chain, the market application fields and scope of glass products continue to expand, effectively creating new market demand. In addition to the traditional real estate market, it is also used in industrial fields such as automobiles, photovoltaics, electronic appliances, and home appliances. Driven by market demand growth and the impact of rising prices of raw and fuel materials, glass prices have continued to maintain a relatively high level.The Company seized the development opportunities of the industry, made full use of its complete industrial chain advantages, technical advantages and brand advantages, actively expanded the scale of advantageous industries and new businesses, and integrated product applications into more subdivided industries through increasing R&D investment and product structure adjustment, so as to expand the product demand market; meanwhile, it carried out an effective cost control through measures such as reducing cost and increasing benefits; therefore the profitability of its glass industry increased significantly.In the first half of 2021, the glass industry (float glass, photovoltaic glass and architectural glass) of the Company achieved operating income of RMB 5.353 billion, a year-on-year increase of 49%; net profit of RMB 1.301 billion, a year-on-year increase of 189%. Float glass is the Company's traditional advantageous industry. The Company firmly follows the route of high-end differentiated products, focusing on differentiated products such as ultra-white, ultra-wide, ultra-thick and ultra-thin, as well as the market segmentation of special application scenarios of float glass, among which, the proportion of ultra-white float glass in the Company's own product structure is ahead of the industry, and creates the high-end series of CSG ultra-white "Blue Diamond"; through kiln line design, process setting adjustments, and transformation of some production equipment, the Company has greatly improved the yield of ultra-thin and ultra-thick differentiated products with difficult production process and high value-added. The proportion of differentiated products increases significantly, and market share of high-grade float glass enjoys continued leadership in subdivision. Benefiting from the Company's differentiated business strategy and the boom of industry, float glass, rising both on output and price, got a year-on-year increase of 75% in operating income, and a year-on-year increase of 491% in net profit in the first half of 2021. Photovoltaic glass ushers in development opportunities under the goal of ―Emission Peak and Carbon Neutrality‖. The Company has been deeply engaged in the solar glass industry for more than 10 years, which is one of the earliest enterprises engaged in the production of photovoltaic glass in China, with profound accumulation of technical talents and mature production management experience, as well as obvious technical advantages and leading yield in the industry; at the same time, it maintains long-term and deep cooperation with major component manufacturers. In order to achieve the strategic goal that China's non fossil energy accounts for 25% of primary energy consumption by 2030, China's photovoltaic market will usher in a market-oriented construction peak, and the increase in photovoltaic installations and the rapid increase in the penetration rate of double-glass modules will drive the demand for photovoltaic glass. In this context, in order to break through the bottleneck of photovoltaic glass production capacity and effectively improve product competitiveness through scale effect, the Company began large-scale expansion of photovoltaic glass production from 2020, to build 4 photovoltaic glass production lines and supporting processing lines with a daily melting capacity of 1,200 tons per line, to build a total of three photovoltaic glass processing lines both in Wujiang and Dongguan bases, and a photovoltaic glass production line and supporting processing lines with a daily melting capacity of 1,200 tons in Xianning base. While laying out a photovoltaic glass manufacturing base in Fengyang, the Company is also building a supporting ultra-white quartz sand production base in that area. The increase in production capacity and the layout of ultra-white quartz sand mines will drive the Company's rapid cost reduction and continuous improvement in competitiveness. In the first half of the year, the operating income of photovoltaic glass increased by 30%; the net profit increased by 80% year on year. Architectural glass was affected by the sharp increase in the price of float glass in the first half of the year, and its cost increased significantly. The Company's architectural glass business was mainly based on customized production, so it took a certain process and time for the price increase of float glass to be effectively transmitted to the downstream. In response to cost pressure, the Company actively increased efficiency through incremental increases. In the first half of the year, the operating income of architectural glass increased by 38% year on year, and its net profit decreased by 57% year on year. In order to better grasp the construction needs of the Yangtze River Delta, Guangdong, Hong Kong and Macao megalopolis and fill the gaps in the regional market, the Company successively started the expansion of architectural glass production capacity in 2020, including the construction of Zhaoqing base, Xi'an base, Wujiang intelligent factory and Tianjin base expansion projects. With the gradual implementation of new projects, the market share of architectural glass will be further improved. Electronic glass and display business: Benefiting from the commercial operation of Qingyuan Phase II "One Kiln and Two Lines" and the related subsidiaries in Xianning, Hebei, and Yichang achieved both production and sales growth due to product structure adjustments, the operating income of the electronic glass and display industry in the first half of the year increased by 118% year on year; net profit increased by 315% year on year. The positioning of ITO glass business of Hebei Panel Glasswas clearand the ITO market was active, therefore driving the growth of both volume and price. Relying on the rapid growth of the high-end electronic glass market and technological breakthroughs in the CSG electronic glass field, in order to seize the market share of imported products and break the monopoly of foreign products, accelerate the realization of import substitution, during the report period, the Company's Board of Directors approved Hebei Panel Glass to invest in a new ultra-thin electronic glass production line with a daily melting capacity of 110 tons and a supporting R&D center. After the completion of the project, it will effectively enhance the overall profitability of electronic glass, enhance core technical competitiveness, and further consolidate and strengthen the competitive advantage of CSG in the domestic electronic glass field. At present, the project is progressing smoothly as planned.Qingyuan phase II "One Kiln and Two Lines" entered commercial operation at the end of last year and operated well, becoming a new profit growth point of the Company. The promotion of KK6 high-aluminum second-generation product of Xianning CSG Photoelectric Glass is in line with expectation and it has been certified by mainstream domestic mobile phone manufacturers. The continuous expansion of the market drove business growth. The Line I of Qingyuan is currently in the process of cold repair and technological upgrading, preparing for the industrialization of the third-generation high-aluminum products.The display business relies on the production capacity advantages of CSG electronic glass and the accumulation of more than 20 years of research and development experience in the processing and manufacturing of yellow light touch components. It has built core competitiveness around vehicle display and ITO touch products, and has gradually transformed into an important force for domestic suppliers of automotive display packaging materials, touch components and modules. The operation of this business in the first half of last year was greatly affected by the epidemic prevention and control situation. Compared with the same period of last year, it achieved a significant growth this year. Through the adjustment of product structure and the improvement of production yield, the production capacity efficiency was brought into full play. Solar and other businesses: In the same period last year, due to the epidemic, the production bases of silicon wafer had been stagnant for a period of time, and the performance had been greatly affected; this year, due to the rebound of silicon wafer prices, the production and sales increased significantly year on year, the operating income increased significantly year on year, and the silicon wafer business turned around from deficit to profit. Driven by the goals of ―Emission Peak and Carbon Neutrality‖, the prosperity of the solar energy industry increased in the first half of 2021 and the market demand was released. Meanwhile, the Company reduced production costs through technological refinement, optimization and adjustment, and improved profitability through product structure optimization and quality improvement. Due to the combined efforts of internal and external forces, the operating income and net profit of the solar energy business increased year on year. In order to respond to the epidemic and fulfill its social responsibility, during the critical period of the epidemic, the Company made use of its PV production facilities and experience to develop and produce mask products. In 2021, as the epidemic was effectively controlled in China, demand for anti-epidemic materials such as masks dropped significantly. Relevant business has little impact on the Company's income and profits, and it will no longer be separately listed and explained in the future. In the first half of the year, solar energy and other businesses achieved operating income of RMB 440 million and net profit of RMB -9.37 million. II. Core Competitiveness Analysis CSG, one of the most competitive and influential large-scale enterprises in China's glass industry, is committed to the development of energy conservation renewable, and new material industry. After more than 30 years of development and accumulation, the Company has gradually formed a comprehensive competitive advantage in terms of products and brands, technology research and development, industrial chain and layout, talent team, and green development. 1. Product and brand advantages "CSG" is a famous brand of domestic energy-saving glass, ultra-thin electronic glass, display and solar photovoltaic products. Its products and technology are well-known at home and abroad. The trademarks "南玻" and "SG" held by the Company are both " Famous Trademark of China ". The Company has been listed in the "Top 50 Building Materials Enterprises in China", "Top 100 Industry Leaders in Shenzhen" and "Preferred Brand of Architectural Glass" in Door and Window Curtain Wall Industry for many years. In 2018, "CSG" brand was recognized by the United Nations Industrial Development Organization as the fourth batch of "International Reputation Brand". CSG’s low-E coated glass and ultra-thin electronic glass were awarded the title of Single Champion Product by the Ministry of Industry and Information Technology, and it is the only manufacturer in the domestic glass industry that has two single champion products at the same time. 2. Technology research and development advantage The Company has always attached importance to technology research and development since its establishment, and has taken independent R&D as its foundation which leads the development of China's glass industry. At present, the Company has a total of 17 high-tech enterprises; 1 national engineering laboratory; 1 national enterprise technology center; 3 national intellectual property advantage enterprises; 5 Provincial Science and Technology Progress Awards; 2 Provincial Patent Awards; 5 provincial-level engineering technology research centers; 10 provincial-level enterprise technology centers; 2 provincial-level academician expert workstations; 4 provincial-level intellectual property demonstration construction enterprises; 1 Shenzhen post-doctoral innovation practice base; 4 provincial-level Government Quality Awards. As of June 30, 2021, the Company has applied for a total of 2,093 patents, including 846 inventions, 1,240 utility model patents, and 7 designs. The Company has accumulatively authorized 1,530, including 278 inventions, 1,240 utility models, and 7 designs. 3. Industrial chain and layout advantages The Company has three complete industrial chains of energy-saving glass, electronic glass and display, and solar photovoltaic. With the continuous improvement of the technological level of each link of the industrial chain, the industrial advantage is obvious. At the same time, the Company possesses a complete industry layout. The six major production bases are located in the Yangtze River Delta in East China, the Pearl River Delta in South China, the Chengdu-Chongqing region in Southwest China, Beijing-Jinji region in North China, and the Hubei region in Central China. 4. Talent team advantage The advantage of the Company’s talent team is mainly reflected in two aspects: On the one hand, the Company has established a strong R&D team and R&D system. Through the construction of the core technical team, continuous R&D investment, and abundant technical reserves, it has built up important technological innovation support for the Company’s strategy. Meanwhile, it establishes Industry-University-Research cooperation, actively cooperating with domestic colleges and universities which are in advantage in silicate materials industry, to accelerate the transformation of scientific research results, and strengthen basic research; on the other hand, an excellent and stable management team is one of the most fundamental guarantees for the Company’s rapid and stable development. The Company has formed a good echelon training mechanism for professional managers. At present, the Company's senior management team has comparative advantages in terms of academic background, professional qualities, knowledge reserves, management concepts and experience. 5. Green development advantage The Company prospectively chooses the enterprise development path of environmental protection and green development. Environmental protection is the lifeline of the survival and development of glass enterprises and the concentrated embodiment of corporate social responsibility in high energy consuming industries. As early as more than ten years ago, CSG took the lead in the industry to use natural gas in all furnace production lines, and at the same time took the lead in the industry to adopt waste heat power generation, distributed photovoltaic power generation and other methods to achieve comprehensive energy utilization, and adopt comprehensive exhaust gas treatment such as desulfurization, denitration and dust removal to achieve ultra-low emission, which is far lower than the national standard pollutant emission value. With the promotion of the goal of ―Emission Peak and Carbon Neutrality‖ and the continuous tightening of environmental protection policies, the Company, as a pioneer in the green development of the industry, has won a broad development space for itself. III. Main business analysis Overview Please refer to the relevant content of ―I. Main business of the Company in the report period‖. Year-on-year changes of main financial data Unit: RMB The report period The corresponding period of last year Increase /decrease year-on-year（%） Reasons of change Operating income 6,614,802,538 4,424,221,349 49.51% Mainly due to the rise in the price of float glass and the increase in production capacity of electronic glass Operating costs 4,126,627,145 3,159,567,031 30.61% Mainly due to the increase of operating income and the rise of the price of some raw materials Sales expenses 125,326,015 161,639,534 -22.47% Administration expenses 354,914,704 317,419,407 11.81% Financial expenses 86,999,999 131,743,197 -33.96% Mainly due to the decrease of interest expense Income tax expenses 255,280,290 84,115,208 203.49% Mainly due to the increase in total profit R&D investment 224,886,882 145,063,647 55.03% Mainly due to the increase in R&D investment Taxes and surcharges 73,966,054 52,338,392 41.32% Mainly due to the increase in main business income Assets impairment loss 26,753,082 -154,053 Mainly due to the provision for impairment loss of long-term assets Income from investment 3,672,330 Mainly due to the income generated by structured deposits Income from asset disposal 137,638 -342,005 Mainly due to gains from disposal of non-current assets Non-operating income 7,551,798 2,218,131 240.46% Mainly due to claim income and unpaid payments Net cash flow arising from operating activities 1,698,245,375 779,644,389 117.82% Mainly due to the increase in cash received from sales of goods Net cash flow arising from investment activities （未完）  |