Important Notes, Directory, and Definitions
The Board of Directors, Supervisory Board, and the directors, supervisors, and senior management of the company guarantee that the content of the semi-annual report is true, accurate, and complete, with no false records, misleading statements, or significant omissions, and bear individual and joint legal responsibilities. The person in charge of the company, Liu Guiwen, the person in charge of accounting, Chen Chao, and the head of the accounting institution (accounting supervisor) Zhang Yali declare: they guarantee the truthfulness, accuracy, and completeness of the financial report in this semi-annual report. All directors have attended the board meeting to review this report.
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Risk of Stock Delisting On June 23, 2017, the company received a decision from the Shenzhen Stock Exchange regarding the termination of its stock listing. From July 17, 2017, the company's stock trading entered the delisting arrangement period. The next trading day after the delisting arrangement period ends, the Shenzhen Stock Exchange will delist the company's stock. According to relevant regulations of the Shenzhen Stock Exchange, there is no system arrangement for relisting on the Growth Enterprise Market, and fraudulent issuance has characteristics that cannot be corrected, affecting the requirements for relisting. After delisting, the stock cannot be relisted. During the delisting arrangement period, the company will disclose the progress of work during the delisting period and risk warning announcements regarding the stock every five trading days. Investors are advised to pay attention to investment risks and invest rationally.
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Risk of Inability to Sustain Future Operating Performance Currently, China's macroeconomic transformation requires time, and the economic structure is still adjusting, with a slowdown in growth and rising labor costs, increasing operational pressure on enterprises. The company operates in the power transmission and distribution equipment manufacturing industry, closely linked to national macroeconomic policies, industrial policies, and national power planning, making it susceptible to the impact of relevant national industrial policies. The company will gradually improve its operating performance by continuously exploring new markets and developing new products. Additionally, the company aims to broaden its business structure and product lines through external investments to enhance overall operational performance. However, if future grid investments continue to slow down or customer demand decreases, and the expected benefits of external investments are not realized, there is a risk that the company's future operating performance may not sustain growth.
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Market Competition Risk The company is committed to providing energy-saving, environmentally friendly, highly reliable, and high-performance power transmission and transformation products to customers in various industries. It possesses the most advanced domestic production technology for epoxy resin cast dry-type transformers introduced from Germany and leads in the technology of magnetic control parallel reactors and dynamic reactive power compensation devices in China. However, as multinational companies in the power transmission and transformation equipment industry strengthen their manufacturing layout and market expansion in China, along with intensified competition from domestic enterprises, there may still be adverse effects on the company's operating performance.