Section I Important Notes, Table of Contents, and Definitions
The Board of Directors, the Board of Supervisors, and the directors, supervisors, and senior management of the Company guarantee that the information in this semi-annual report is true, accurate, and complete, and that there are no false records, misleading statements, or major omissions, and they assume individual and joint legal liability.
Person in charge of the Company: Shang Chunli, Person in charge of accounting: Wei Xuebing, and Person in charge of the accounting department (accounting supervisor): She Fengdan, declare: The financial reports in this semi-annual report are guaranteed to be true, accurate, and complete.
All directors attended the board meeting to review this semi-annual report.
Any forward-looking statements in this semi-annual report, such as future plans, do not constitute substantive commitments by the Company to investors. Investors and relevant parties should maintain sufficient risk awareness and understand the differences between plans, forecasts, and commitments.
In Section III "Management Discussion and Analysis" under "X. Risks Faced by the Company and Countermeasures," the Company has disclosed in detail the potential risks and countermeasures in its operations. Investors are advised to pay attention to relevant content.
(I) Risk of market demand decline and operating income fluctuation due to macroeconomic fluctuations. The Company is mainly engaged in the production and sales of high-performance quartz glass materials and products, which are widely used in semiconductors, aerospace, optics, electronic circuits, photovoltaics, optical communications, and other fields. If global macroeconomic fluctuations occur in the future, leading to cyclical fluctuations in the industries mentioned above, it will inevitably affect the market demand for the Company's products, thereby affecting the Company's future operating performance. The Company faces the risk of fluctuations or even declines in operating income and profitability. The Company will closely monitor market changes, base its operations on independent innovation, improve product quality through enhanced R&D, and increase the competitiveness of its products. At the same time, it will increase market expansion efforts and implement brand strategies to stabilize its market position.
(II) Risk of major product price fluctuations and gross margin decline. In the future, if competition in the quartz glass material industry intensifies, or if downstream industries strengthen their control over procurement costs for quartz glass materials, or if the Company's raw material and energy procurement prices rise, there is a risk that the Company's comprehensive gross margin will decline. The Company will further improve production efficiency through technological progress, process improvements, and equipment upgrades to prevent the risk of a decline in gross margin.
(III) Some products in the Company's quartz fiber and products for aerospace and other fields involve state secrets. This report discloses relevant content only within the scope permitted by relevant national laws and regulations, which may lead to the risk that investors cannot fully understand and judge the relevant situation of the Company's business, resulting in investment decision errors. The Company organizes specialized personnel to study relevant laws and regulations, combines them with the Company's own characteristics, and improves the Company's information disclosure system and procedures. Under reasonable and compliant conditions, it will improve information disclosure to protect the interests of investors.
(IV) Risk of significant fluctuations in demand for emerging strategic markets. The Company's quartz electronic cloth project is in the stage of client-side testing and terminal customer certification. Influenced by uncertain factors such as customer product iteration and adaptation testing, there is uncertainty in business cooperation and orders, and there is a risk that future business progress may fall short of expectations. Investors are requested to make rational judgments, conduct investment decisions, and pay attention to investment risks. The Company will closely monitor the development trends of downstream industries and reasonably build and release production capacity according to market demand to reduce operational risks brought about by market fluctuations.