[中报]博实股份(002698):2023年半年度报告摘要(英文版)

时间:2023年08月29日 17:04:56 中财网

原标题:博实股份:2023年半年度报告摘要(英文版)

HARBIN BOSHI AUTOMATION CO., LTD. Semi-Annual Report 2023
(Abstract)
Ⅰ. Important Notes

This Abstract is extracted from Semi-Annual Report 2023. In order to have a full understanding of the
operating results, financial condition and future development planning of the Company, investors are
suggested to read the full report carefully on the media designated by the China Securities Regulatory
Commission (the “CSRC”). The Company’s 2023 Semi-Annual Report is prepared and published in Chinese
version, and the English version is for reference only. Should there be any inconsistency between the
Chinese version and English version, the Chinese version shall prevail.
All directors attended the Board Meeting in person for reviewing of this Semi-Annual Report.
Indicate by check mark if independent auditor issues non-standard unqualified opinion.
□Applicable √Not applicable

Indicate by check mark if there is a pre-arranged plan of profit distribution or transferring capital reserve into
common stock for the report period which has been reviewed by the Board of Directors.
□Applicable √Not applicable

The Company does not plan to issue cash or equity dividends, nor to convert equity reserve into share capital
of the Company in the mid 2023.

Indicate by check mark if preplan for preferred stocks profit distribution to shareholders for the report period
which has been reviewed and approved by the Board of Directors.
□Applicable √Not applicable










II. Basic Situation of the Company

1. Company Profile


BoshiStock Code
  
  
Contact Person and Contact
Secretary of the Board Securities Affairs Representative
Information

Chen Bo
9 Donghu Street, Concentration Zone of Yingbin Road, Harbin Development Zone
+86-451-84367021
[email protected]

In order to speed up the planning and implementation of the construction function of the Company’s
regional headquarters and provide convenience for value investment, the Company has set up a “Securities
and Investment Affairs Office” at No. 1102, Building 2, Huijin Building, No. 55, Shangxiang Road, Huaqiao
Economic Development Zone, Kunshan City, Jiangsu Province. Welcome securities investors to inquire about the further information.

2. Key Financial Data and Financial Indicators

Does the Company need to make retroactive adjustment or restatement of the accounting data of the previous
year.

□Yes √No

Increase/Decrease over the
2023 H1 2022 H1 same period of previous
year

  
335,465,804.27264,380,786.00
309,863,763.65247,205,017.04
-113,276,773.99172,174,009.00
0.32810.2586
0.32500.2586
10.17%8.69% End of previous year 6,220,273,855.91
End of the current Increase/Decrease over
End of previous year
reporting period previous year end

  
3,258,008,213.623,169,585,012.94

3. Number of Shareholders and Shareholding
Unit: Share

Total number of shareholders of Total number of shareholders of common stocks at the end of the 22,289 preferred stock with resumed voting 0reporting period right at the end of the reporting period
Top 10 shareholders
Pledged, marked or
Quantity of
Quantity of
frozen stocks
Name Nature Ownership restricted
stocks
stocks held
Status Quantity

     
Domestic natural person9.41%   
   72,136,172 
Domestic natural person8.09%   
   62,022,268 
Domestic natural person5.61%   
   43,045,535 
Domestic state-owned corporate5.00%   
     
Domestic natural person4.96%   
     
Domestic natural person4.89%   
     
Foreign legal person2.18%   
     
Domestic natural person1.43%   
     
Domestic natural person1.42%   
     
     
     
4. Change of the controlling shareholder or the actual controller
Change of the controlling shareholder in the reporting period
□Applicable √Not applicable

The controlling shareholder did not change in the reporting period.
Change of the actual controller in the reporting period

□Applicable √Not applicable

The actual controller did not change in the reporting period.
5. Number of preference shareholders and shareholdings of top 10 of them
□Applicable √Not applicable

The Company had no preference shareholders in the reporting period.
6. Corporate bonds that existed on the date when this Report was authorized for issue
√Applicable □Not applicable

(1) Bond profile

Balance of face
value at the end
Bond name Abbreviation Bond code Date of issue Maturity of reporting Coupon rate period
(RMB’0,000)

Boshi Convertible Bonds127072nd Sep. 22 , 2022st Sep. 21 , 202844,993.61

(2) Financial indicators at the end of reporting period.

End of the current reporting period 46.75%End of previous year 46.20%Explanation
Item 2023 H1 2022 H1 Explanation

60.62475.39

(3) Top 10 convertible bond holders

    
Industrial and Commercial Bank of China - Southern Guangli Return Bond Securities Investment FundOthers199,51819,951,800.00
Cai ZhihongDomestic natural person198,00919,800,900.00
Zhongtai Securities Asset Management - Gansu Bank “Huifu” Series of Financial Products Plan - Qilu Asset Management 0006 Directional Asset Management ContractOthers165,45316,545,300.00
China Merchants Securities Asset Management-Harmony Health Insurance Co., Ltd.-Universal products-China Merchants Asset Management Security win 202203 Single Asset Management PlanOthers155,17715,517,700.00
Industrial and Commercial Bank of China Limited -Guoshou Pension Stable No. 5 fixed income pension productOthers137,15913,715,900.00
China Construction Bank-Blackrock Fund -Blackrock RMB Credit Bond No. 2 Aggregate Asset Management ProgramOthers135,43813,543,800.00
Huitianfu Fund - Harmony Health Insurance Co., LTD. - Universal Product - Huitianfu Harmony Health 1 Single Asset Management PlanOthers112,40511,240,500.00
Agricultural Bank of China - Southern Xiyuan Convertible Bond Bond-type Securities Investment FundOthers107,35810,735,800.00
Industrial and Commercial Bank of China Limited - Yinhua Convertible Bond Securities Bond-type Securities Investment FundOthers93,4309,343,000.00
III. Operating Performance Discussion and Analysis 1. Company Main Businesses during the Reporting Period (1) Main Businesses and Industry Development Status ① Industry overview According to the proportion of revenue during the reporting period, the Company’s main businesses in its industry are shown in the following figure:
The core growth businesses of the Company are intelligent manufacturing equipment and industrial services
rooted in intelligent manufacturing equipment, which belong to high-end equipment manufacturing industry
and modern service industry respectively. Moreover, they are all key industrial directions supported and
encouraged by the State. From the perspective of revenue composition, the revenue of two core growing
businesses, intelligent manufacturing equipment and industrial services, account for 95.27% of total, as well
as supplemented beneficially by environmental protection process equipment.
Intelligent Manufacturing Equipment:

“Manufacturing is the main body of the national economy, the foundation of building the country, the
instrument of rejuvenating the country and the foundation of strengthening the country.” Made in China
2025 points out that “accelerating the integrated development of the new generation of information
technology and manufacturing technology and taking intelligent manufacturing are the main direction of the
in-depth integration of informatization and industrialization.” The State attaches great importance to the
development of high-end equipment manufacturing industry from the strategic height, and the development
of intelligent manufacturing is a long-term strategic task.
th th
In recent years, the state issued the 14 Five-Year Plan for Intelligent Manufacturing Development, the 14
th
Five-Year Plan for the Development of Robot Industry, the 14 Five-Year Plan for In-depth Integration of IT
th
Application and Industrialization, the 14 Five-Year Plan for the Development of Digital Economy, “Robot
Plus” Application and Implementation Plan, planning and guiding the high-end equipment manufacturing
th
industry in the “14 Five-Year Plan” and 2035 long term goals, which provides strong support for the development of China’s intelligent manufacturing and digital economy.
From the perspective of industry, large-scale Chinese manufacturing enterprises generally have automated
production lines, among them, the proportion of digitalization is not high, data sharing is not much from
factories to factories, and intelligent technology is not widely used. The overall level of intelligent
manufacturing in China is still far away from the world’s advanced level. The endogenous power of leading
manufacturing enterprises has a large potential demand for intelligent manufacturing equipment and the
overall solution of intelligent factories, and the market demand presents long-term, sustainable and without
obvious periodicity.

The Company has been cultivating in the field of intelligent equipment for a long time, and the high-end
intelligent equipment with independent intellectual property rights has been continuously upgrading for
Chinese Manufacturing, replacing imported equipment or being the first applications equipment to promote
the technological progress of related industries. In recent years, with the improvement of 5G, industrial
Internet and other digital economy infrastructures, the Company has accelerated the application of digital and
intelligent technologies mastered by the Company. Now it has the engineering and implementation capability
of the overall solutions of digital workshops and intelligent factories in multiple product application fields.

The Company’s intelligent manufacturing equipment are applied in petrochemical, sub-merged arc furnace,
new energy, grain, animal feeds, building materials, medicine, food, port, and many other industries, to
provide customers with efficient intelligent manufacturing equipment and intelligent factory overall solutions.
The Company’s technology and intelligent equipment are in the leading position in the application field of
domestic industry, no competitors in the same volume; In some fields, the Company products and technology
applications are in the world leading level.

The Company implements differentiation competitive strategy (technology leadership), with the accumulation and industrial application practice in the direction of automation, digital, intelligent technology,
facing the demand of “Made in China” for intelligent equipment, digital workshop, intelligent factory, the
Company concentrates advantage, integrates resources, saves competitiveness, to response and guild the
market demand actively with rich product line and intelligent manufacturing overall solution; The Company
strives to achieve its own relatively fast development and bring consistent returns to shareholders.

Industrial Service:

th
On March 16 , 2021, the National Development and Reform Commission, the Ministry of Science and Technology, the Ministry of Industry and Information Technology and the like totaling thirteen departments
jointly issued the Opinions on Accelerating the High-quality Development of the Manufacturing Service
Industry, pointing out, “manufacturing service industry is an important support for improving the competitiveness and comprehensive strength of manufacturing products, promoting the transformation and
upgrading of manufacturing industry and high-quality development. At present, China’s manufacturing
service industry supply quality is not high, the degree of specialization and socialization is not enough, the
role of leading the manufacturing value chain is not obvious, and there is still a gap between the requirements of building a modern economic system and realizing high-quality economic development.” “By
and efficiency, innovation capacity, and efficiency of resource allocation, and play a more prominent role in
supporting and leading the high-quality development of the manufacturing industry” to “realize the coupling
and integration of the manufacturing industry and the manufacturing service industry”.
The production and operation management service of the Company’s intelligent manufacturing equipment
field includes integrated industrial services for process plant and equipment daily operation, repair,
maintenance, finished products outbound & inbound, transfer, truck loading and so on. The Company’s
professional services contribute customers to reduce costs and increase efficiency, improve production
efficiency, concentrate resources on core competitiveness, and achieve high-quality development. The
Company relays on the leading technology advantage, and continues to vigorously promote the strategy of
product and service integration over the years. The professional, economic, high-quality and efficient service
has been recognized and praised by customers.

Based on the recognition and encouragement of Company’s outstanding achievements in the integrated
development of intelligent manufacturing equipment and industrial services, the Company was identified as
“Pilot Unit of Advanced Manufacturing and Modern Service Industry” in August 2021 by the National
Development and Reform Commission. The intelligent equipment industry services have covered all regions
except Hong Kong, Macau, Taiwan and Tibet, the service scale and profitability are in the leading position in
the industry. The Company’s industrial services of intelligent equipment, on the one hand, will maintain a
steady growth with the growth of product sales and equipment implement stock. On the other hand, this will
give an active response to the customer’s deep service demand, after the Company undertakes and implements new production and operation industrial service projects, the service scale is expected to
accelerate. The revenue of industrial services has grown year after year, this will enhance the whole
Company’s ability to resist risks. In the H1 of 2023, the revenue of industrial services was RMB 326 million,
and become an important source of revenue and profit for the Company.
The Company’s industrial service network and capability, surrounding “industrial service plus”, are facing
big potential market opportunities; That is, the Company’s industrial service network is expected to
undertake more industrial service market demand independent from the Company’s own equipments, and
then forming a new industrial direction of intelligent manufacturing equipment enabled with “industrial
service plus”.

Environmental Protection Process and Equipment:

th
The 14 Five-Year Plan takes “achieving new progress in ecological civilization construction” as one of the
main goals. Continuing to improve environmental quality and promoting the all-round green transformation
of economic and social development provides important development opportunities for the field of environmental protection. Industrial waste acid and acidic gas treatment and recycling project, implemented
by Harbin Boao Environmental Technology Co., Ltd, the holding subsidiary of the Company, can collect and
treat industrial waste sulfuric acid and sulfur-containing acid gases in chemical production to produce
high-purity sulfuric acid for recycling production, and to recycle and reuse the heat energy released in the
process to achieve energy saving, emission reduction, recycling, environmental protection and economic
results. During this reporting period, the revenue of environmental protection process and equipment
the Company.

② Industry policy impact

In recent years, the state has issued intensive industrial policies and industry plans related to intelligent
manufacturing, robot and digital economy, leading the development of the industry, and the field of
intelligent manufacturing equipment is facing major development opportunities. At the same time, the
technology accumulation and technological innovation of high-end equipment manufacturing enterprises are
constantly improved, with the promoting of national digital infrastructure construction, the project
application and implementation ability is becoming increasingly mature. From the Company’s long-term
industrial practice in the field of intelligent equipment industry, intelligent equipment is in great demand for
China’s manufacturing enterprises, and the field of intelligent manufacturing equipment will continue to
flourish.

In January 2023, seventeen departments including the Ministry of Industry and Information Technology,
issued the “Robot Plus” Application Action and Implementation Plan, proposed the density of manufacturing robot will double compared with 2020, by 2025. The depth and breadth of the application of
service robots and special robots industries have been significantly improved, and the ability of robots to
promote high-quality economic and social development will be significantly enhanced. Focus on 10 key
application areas, break through more than 100 kinds of robot innovation application technology and
solutions, promote more than 200 robot typical application scenarios with high technical level, innovative
application mode and significant application effect, build a batch of “robot plus” benchmarking enterprises,
and construct a batch of application experience centers and experimental verification centers.
In April 2022, the Ministry of Industry and Information Technology, the National Development and Reform
Commission, Ministry of Science and Technology, Ecological Environment Ministry, Ministry of Emergency
Management, the National Energy Administration jointly issued the Guidelines on Promoting High-quality
th
Development of Petrochemical and Chemical Industries in the 14 Five-Year Plan, pointing out that the
reform and innovation as the fundamental power, plan development and security as a whole, accelerate the
traditional industry transformation, vigorously develop chemical new materials and fine chemicals, speed up
the industrial digital transformation, improve the level of intrinsic safety and clean production, accelerate
quality change, efficiency change, dynamic change in the petrochemical industry, promote our country from
the petrochemical and chemical great power to strong power. One of the main goals set forth in the guideline
is digital transformation, with enterprises in key areas such as petrochemical and coal chemical industries
achieving an automatic rate of over 95% of their main production devices, building about 30 demonstration
factories of intelligent manufacturing and about 50 demonstration zones of intelligent chemical industry. The
guidelines also proposed to promote the digital transformation of industries, accelerate the collaborative
innovative application of new technologies and new models, create characteristic platforms, accelerate the
integration of 5G, big data, artificial intelligence and other next-generation information technologies with the
petrochemical and chemical industry, constantly enhance the acquisition capacity of chemical process data,
and enrich the data of enterprise production management, process control, product flow and other aspects,
promote demonstration and guidance, and strengthen industrial Internet empowerment. It has issued guidelines for the construction of a standard system for intelligent manufacturing in the petrochemical and
characteristics of the industry, a number of digital workshops, intelligent factories and smart zones will be
built and selected.

th
In December 2021, The State Council issued the 14 Five-Year Plan for the Development of Digital Economy, which defines the guiding ideology, basic principles, development goals, key tasks and safeguard
measures for promoting the healthy development of digital economy during the period. Digital economy is
the main economic form after agricultural economy and industrial economy. It takes data resources as the
key element, modern information network as the main carrier, integrated application of information and
communication technology and all-factor digital transformation as the important driving force, and promotes
a new economic form with more unified fairness and efficiency. According to the plan, the digitalization,
networking and intelligence of the manufacturing industry will be deepened, and the integrated development
of producing services will be accelerated. We will comprehensively deepen the digital transformation of key
industries. Based on the characteristics and differentiated needs of different industries, we will promote
all-round and whole-chain digital transformation of traditional industries and improve total factor
productivity. We will deepen the digital transformation of industry, accelerate the digital transformation of
R&D, design, production and manufacturing, operation and management, and market services across the
whole life cycle, and accelerate the cultivation of a number of small and medium-sized enterprises that are
“specialized and innovative” and individual champions in manufacturing. We will carry out intelligent
manufacturing projects, vigorously promote the digitalization of equipment, carry out special campaigns to
pilot and demonstrate intelligent manufacturing, and improve the national system of intelligent manufacturing standards.

In December 2021, the Ministry of Industry and Information Technology and so on eight departments jointly
th
issued the 14 Five-Year Intelligent Manufacturing Development Plan, put forward the following planning
th
goals: in 14 Five-Year and the future for a long period, promote intelligent manufacturing based on
manufacturing nature, stick to intelligent features, take the process and equipment as the core, take the data
as the base, rely on manufacturing units, workshops, plants and supply chain as carrier, build virtual-real
integrated, knowledge-driven, dynamic optimizing, safe and efficient, green and low carbon intelligent
manufacturing system, promote manufacturing digital transformation, network collaboration and intelligent
reform. By 2025, most large-scale manufacturing enterprises will realize digital networking, and backbone
enterprises in key industries will initially apply intelligence; By 2035, large-scale manufacturing enterprises
will fully popularize digital networking, and backbone enterprises in key industries will basically realize
intelligence.

In December 2021, the Ministry of Industry and Information Technology, the National Development and
Reform Commission, the Ministry of Science and Technology and so on 15 departments jointly issued The
th
14 Five-year Robot Industry Development Plan, put forward the following planning goals: by 2025, China
has become a global robot technology innovation source, high-end manufacturing cluster and new heights of
integrated application. Breakthroughs have been made in the number of core robot technologies and high-end
products, breakthroughs have been made in the number of core robot technologies and high-end products, the
comprehensive index of the complete equipment has reached the international advanced level, and the
performance and reliability of key parts have reached the international level of similar products. The
operating revenue of the robot industry will grow by more than 20% annually, form a number of Giants” enterprises with strong innovation ability and good growth ability, and build 3 to 5 industrial clusters
with international influence. The density of manufacturing robots has doubled. By 2035, the comprehensive
strength of China’s robot industry will reach the international leading level, and robots will become an
important part of economic development, people’s life and social governance.
th
In November 2021, the Ministry of Industry and Information Technology issued the 14 Five-year Plan for
Green Industrial development, put forward the following goals: by 2025, industrial structure, mode of
production and green and low-carbon transition have made significant progress. Green and low-carbon
technologies and equipment have been widely applied, the efficiency of energy and resources utilization has
been greatly improved, and green manufacturing has been comprehensively improved, laying a solid foundation for reaching a Carbon Peak in the industrial sector by 2030.
th
In November 2021, The Ministry of Industry and Information Technology issued the 14 Five-year Plan for
the In-depth Integration of Informatization and Industrialization, put forward the following goals: by 2025,
informatization and industrialization will realize integrated development in a wider range, deeper degree and
higher level, and the penetration of the new generation of information technology into all fields of
manufacturing was accelerated, the scope was significantly expanded, the degree was continuously deepened,
and the quality was greatly improved. The pace of digital transformation of manufacturing was significantly
accelerated. New models and new business forms are widely popularized; industrial digital transformation
has remarkable results; the integration support system is continuously improved; the vitality of enterprise
integration development is activated fully; and the integrated ecosystem is developed prosperously.

(2) Company Main Businesses during the Reporting Period ① Main businesses, products, services composition and market application level of the Company Overall Solution for Intelligent Manufacturing Equipment and Intelligent Factory Post-processing Intelligent Manufacturing Post-processing Intelligent Manufacturing Equipment for Solid Material Equipment for Rubber Robot Plus Intelligent Logistics, Warehousing Systems
② Business mode










Industrial Services——Operation, Maintenance and After-sales Type Industrial Services

Industrial Services——Supplementary Industrial Services and Miscellaneous


③ Key performance driving factors

Since 2017, the Company performance has grown well and rapidly, mainly due to the Company is facing the
strong demand for intelligent manufacturing equipment for the upgrading of digitization and intellectualization in China’s manufacturing industry. The Company implements technology research and
development and product innovation actively, as well as realizes product category expansions. The sales
growth of post-processing intelligent manufacturing equipment for solid material is strong; Represented by
high-temperature furnace operation robots, the special operation robots and their supporting products are
promoted and applied in the fields of high risk, harsh and heavy working conditions. Contracts from
“robots plus” quickly occupy an important marketing share, which strongly promote the rapid growth of
the Company’s overall performance; The successful R&D and application of post-processing intelligent
equipment for solid material in the field of new energy polysilicon raw materials expended the application of
Company product in the field of post process intelligent manufacturing equipment for irregular solid material,
and the market demand has exploded, which promote revenue growth of the Company’s intelligent manufacturing equipment as an increment; The growth of industrial services, enabling intelligent manufacturing equipment, keeps steadily, and become an important source of revenue and profit. Energy
saving, environmental protection process and equipment business brings beneficial supplement to the
Company’s overall revenue.

During the reporting period, the operating revenue and profit have reached the best level in history. The
operating revenue of intelligent manufacturing equipment achieved a strong growth of 43.70%. The operating revenue of industrial service continued to grow steadily; The operating revenue of energy
conservation, emission reduction and environmental protection process and equipment doubled while contributing to profits. Please refer to “Main Businesses Analysis” for details.
Technological innovation and the continuous R&D, application and promotion of new products have realized
“the second curve” to promote the Company to extend growth period. The Company’s intelligent of continuous application of new technology and new products. At present, the company has made a progress in switching from a single machine, automatic production line to the digital factory and intelligent factory in the main product application field, which optimizing the business competition environment faced by the Company, and improving comprehensive competitiveness continuously. 2. Core Competitiveness Analysis As a technology-based enterprise, the Company adheres to a differentiated competitive strategy of leading technology, and relies on a deep understanding of China’s industrial automation field and long-term practical experience in industrial applications to maintain a constant competitive position in the field in which it is engaged. The Company’s intelligent manufacturing equipment and industrial service businesses are effectively synergized and optimally linked, and environmental protection process equipment to the Company’s overall performance constitutes a beneficial supplement. In recent years, the business scale is growing rapidly, the profitability is great enhanced, and the comprehensive competitiveness is continually improved. (1) Industry status The Company has a solid competitive advantage in the field of intelligent manufacturing equipment, and its main product and technology has been playing a leading role for a long time in the domestic product application field, and has won a number of industry awards.


(2) Leading competitiveness of products and technologies Innovation is the first driving force to lead the development of an enterprise and technology-leading is an important core competitiveness of the Company. The Company continuously improves its technology application level and technology reserve capacity, seizes new opportunities, and expands into new fields. Through R&D investment, technology accumulation and technological innovation, outstanding technological leadership advantage continues to enhance and be a competitive position in the industry. From the perspective of intelligent manufacturing equipment product line, the Company’s intelligent equipment has technical advantages of high speed, accuracy and reliability. It is a replacement of imported high-end equipment, suitable for the customer production environment with high efficiency and safety production requirements. In the domestic product application field, products and technology are at the leading level, among them, partial of the product applications are in the worldwide leading position. From the perspective of the overall solution of intelligent manufacturing, the Company integrates multi-category innovative products with the production scenario of manufacturing customers, which realizes the overall solution of solid materials post-processing and sub-merged arc furnace smelting products intelligent manufacturing, help customers realize the digital and intelligent transformation and upgrade of the factory, and realize intelligent manufacturing. (3) Underlying technology accumulation and platform technology to enhance the competitiveness. Mastering the underlying technology, algorithm and platform technology can form the technical advantage of rapidly developing different models and functions according to the industry demand, which is the core technology that the Company must master to implement digital factory, intelligent factory and to realize industrial digitalization. It can truly realize the independence and controllability of core technology, continuously promote the implementation of the Company’s technology leading and differentiation strategy, and enhance the Company’s core competitiveness. Note: This section is schematic diagram, some photos and blurred images, under the premise of technical confidentiality, are used to enhance investors' understanding of relevant applications, the following is omitted. Legend:Motion control system
Legend:Research and development platform of intelligent identification system based on artificial intelligence
Legend:Intelligent inspection and digital vision technology (4) Performance-driven dual engines of “intelligent equipment” + “industrial service” The Company fully integrates product application advantage, technological leading advantage and industrial service, actively promotes the strategy of products and service integration and service business achieves rapid development. The Company’s professional, high-quality, efficient and advanced industrial service model is the necessary guarantee for customers’ continuous production and operation, stable and efficient production, and achieves a win-win situation for the Company and customers.
Legend: The positive interaction between intelligent equipment and industrial service
In August 2021, the Company was identified by the National Development and Reform Commission as the
National “Pilot Unit for Advanced Manufacturing Integrated Development and Modern Service Industry”,
becoming one of the few leading enterprises of “Two Industries Integration” in the country. This award is
prospectively and actively implement this strategy for years. During the reporting period, the Company’s
industrial services achieved revenue of RMB 326 million, continued to maintain steady growth.“Intelligent
equipment”+ “industrial services”, whose operating revenue occupies 95.27% of total, constitutes a
performance-driven dual engine for the Company.

(5) The overall solution of intelligent manufacturing accelerates the Company’s competitiveness.
Throughout the Company’s technology, product development and industrialization process, the Company
enters new industries and new fields usually with key single unit equipment (“points”); after breakthrough
in solving industry pain points, quickly form an automated production line (“line”); With the accumulation
of technology and the in-depth understanding of the industry, the overall solution (“surface”) of intelligent
manufacturing is completed to help customers realize the upgrade to digital and intelligent factories. This
process of technological progress from “point → line → surface” helps the Company to concentrate
resources, reduce technology development risks, improve the efficiency of R&D investment, open the ceiling
for industry growth, and comprehensively enhance the Company’s core competitiveness.
Single unit sales (“point”), it is inevitable to face large competition, small the project potential contract,
limited market space; The complete equipment sales (“line”), the competitive environment improves, the
competitive pressure decreases, the market space increases, and the potential contract amount is enlarged;
The overall solution of intelligent manufacturing (“surface”), limited competitors, strong competitiveness,
market space and potential contract amount is expected to expand for several times. ??
Take the (high temperature) operation robot for sub-merged arc furnace as an example, the urgent demand
for safety production and replacing labors for traditional calcium carbide sub-merged arc furnace industry,
based on the industrial robot technology, the Company successfully developed and applied (high temperature)
sub-merged arc furnace operation robot which replaces manual work in dangerous and harsh environments
for calcium carbide which has epoch-making significance to traditional production (“point”), and
successively developed ramming robot for calcium carbide, patrolling robot, intelligent pot transfer
technology and other key production system (“line”), until forming science and technology innovation ability
of an intelligent workshop overall solution that truly subverts the traditional production operations of the
industry (“surface”), realizing few men, unmanned factories and intelligent manufacturing. The technology,
product R&D and industrialization process from “point”, “line” to “surface”, created a market space from “0”
to “1” to “N times”, opened the ceiling of the industry growth.
With the Company’s leading technological advantage in the field of calcium carbide sub-merged arc furnace,
the Company continues to develop the application of high temperature special robots in the high temperature
furnace operation environment of industrial silicon furnace, silicon manganese, ferrosilicon, etc., committed
to multi-dimensional technological innovation and breakthrough, and try to develop and recreate several
market opportunities from “0” to “1” to “N times”. In the above areas, the Company has successively
achieved phased results.



(6) Smart workshops, smart factories, and overall solutions further enhance the Company’s competitiveness.

In the field of traditional calcium carbide furnace smelting production, facing high-risk, high-temperature,
high content of toxic and harmful gas operating environment, which is not suitable for manual work.
Meanwhile, the huge production safety pressure and the poor production environment endanger workers’
production safety. In the long run, the production safety is directly affected by the shortage of labor supply.

The Company applies intelligent technologies such as visual recognition, deep learning, robot control
algorithm, and expert control strategy, combined with industrial Internet communication technology, to the
overall solution of intelligent workshops and smart factories, in order to achieve the minimum number of
people and unmanned workshops, relying on intelligent production decision-making management, to help
customers produce safely and efficiently, and promote the upgrading of intelligent manufacturing industry in
related industries.

At present, the Company is actively implementing the smart factory contract and smart workshop project
signed with Inner Mongolia Junzheng Chemical Co., Ltd. and Ningxia Younglight Chemicals Co., Ltd., with
a total value of about RMB 360 million. If these projects can be delivered and accepted successfully, first of
all, the realization of high-tech products to replace the dangerous, harsh, heavy working conditions of
manual work, promote the change of production methods, improve the safety of workers and well-being, is
of great significance to the calcium carbide industry; Secondly, the overall market space of the smart factory
can form several times, ten times the market size of the original high-temperature furnace operation robot; In
the future, the technology formed by the overall solution of the electric stone furnace smart factory can be
further R&D, promoted and applied to other silicon manganese, iron silicon, and industrial silicon etc.,
multiple arc furnace fields, which will bring about the comprehensive improvement of economic and social
benefits for the Company. (未完)
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