In 2020, the operating income of Huahong Science and Technology increased by 56.18% in the same period.

Recently, Huahong Technology released the 2020 annual results report. During the reporting period in 2020, the company achieved an operating income of 3.376 billion yuan, an increase of 56.18% over the same period last year, and a net profit of 225 million yuan belonging to shareholders of listed companies, up 25.83% over the same period last year.

The company always adheres to the corporate mission of "serving the circular economy and creating a green life", and always adheres to the enterprise spirit of "struggle, realism, innovation and dedication". Focusing on the "four-in-one" of R & D, manufacturing, marketing and service of renewable resources processing equipment, we are committed to becoming a renewable resources processing equipment manufacturer and integrated service provider serving the global market. The company has always been deeply engaged in the circular economy industry, with the leading technical level in the renewable resources and equipment industry, prominent industry position and rich market experience, the company actively layout and expand the downstream renewable resources operation business.

During the reporting period, the issue of shares and the payment of cash to purchase 100% equity and raise matching funds of Jian Xintai Technology Co., Ltd. were approved by the China Securities Regulatory Commission. On March 24, 2020, the transfer of ownership of this transaction involving the purchase of assets has been completed, and 100% of the shares of Xintai Technology have been transferred to the company and become a wholly-owned subsidiary of the company. The company's renewable resources operation business has expanded to the field of comprehensive utilization of rare earth recycled materials.

Jiangsu Wilman Technology Co., Ltd., a wholly owned subsidiary, is a professional manufacturer of international elevator signal systems and safety components. Relying on advanced design concepts, first-class production technology and strong talent team, the company has formed the core advantages in product production, management design and technical research and development.

During the reporting period, the company's main business is divided into two major sectors: renewable resources plate and elevator components plate.

(1) the main business situation of the company

1. Renewable resources plate It mainly includes the research and development, production and sales of renewable resources processing equipment, as well as renewable resources operation business.

The main products of renewable resources processing equipment include all kinds of metal crushing, hydraulic shearing, metal packaging, metal pressing and other equipment, all kinds of non-metal packaging and compression equipment, as well as scrapped automobile disassembly equipment. The products are used in the national circular economy park of renewable resources industry, national urban mineral demonstration base, scrap steel processing and distribution center (base), scrap motor vehicle recycling and disassembly enterprises, and sanitation and other industries.

The operation business of renewable resources is mainly based on scrap processing and trade, comprehensive recycling of scrapped cars and comprehensive utilization of rare earth recycled materials. The two major scrap processing and distribution bases of Donhai Huahong and Qianan Zhili, holding subsidiaries, can directly provide high-quality scrap charge for steel mills by sorting, crushing, removing impurities, packing and other professional treatment of recycled social scrap. The company carries out scrapped motor vehicle recycling and disassembly business through its wholly-owned subsidiary Beijing Huahong, which has the qualification for scrapping military decommissioned equipment. The company has formed a complete industrial chain from the production of scrapped motor vehicle disassembly equipment, to the overall solution design of recycling enterprises, and then to the resource utilization of scrapped motor vehicles.

The main business of Xintai Technology and its subsidiary Jishui Jincheng is the comprehensive utilization of rare earth recycled materials, that is, the use of NdFeB recycled materials and phosphor waste to produce high-purity rare earth oxides; at the same time, Xintai Technology carries out the production business of rare earth permanent magnet materials through its wholly-owned subsidiary Zhonghang New Materials, realizing the extension of the industrial chain. The main products of comprehensive utilization of rare earth recycled materials are praseodymium oxide, neodymium oxide, praseodymium oxide, dysprosium oxide, terbium oxide, europium oxide, gadolinium oxide, holmium oxide and other high-purity rare earth oxides. The products can be widely used in magnetic materials, computers, communication equipment, tricolor phosphors and other high-tech fields. The main products of Zhonghang New Materials are rare earth permanent magnet materials, including sintered NdFeB magnetic steel blank products and sintered NdFeB magnetic steel products. The products can be used as various magnetic steel parts of permanent magnet motors such as electric bicycles and electric vehicles, magnetic steel parts of nuclear magnetic resonance equipment, as well as magnetic separation equipment, electronic products, packaging and other magnetic steel parts.

2. Elevator parts plate

Jiangsu Wilman Technology Co., Ltd. is mainly engaged in the R & D and manufacture of elevator signal system, has always been committed to creating high-quality experience of elevator signal system products, and relies on strong technological innovation ability to promote the development of the industry. lead the reform of the elevator signal system industry. The company's main products include elevator control boxes, call boxes, multimedia displays, arrival lights, buttons, etc., which have won wide acclaim in the market for "advanced process, efficient production and excellent quality". It has established strategic cooperation with Schindler, Kone, Hitachi, Tyson, Shanghai-Mitsubishi and other world first-tier ladder brands to provide reliable products and excellent services for regional markets such as Asia, Africa, Latin America and Europe. Suzhou Nilong Elevator parts Co., Ltd., a subsidiary of Suzhou, is a domestic enterprise specializing in the research, manufacture and sales of elevator safety components, providing services for well-known brands at home and abroad. The main products include speed limiter, tensioning device, hydraulic buffer, safety pliers and so on.

(2) the industry situation and status of the company

1. Renewable resources plate

Adhering to the business philosophy of "green environmental protection, recycling and sustainable development", the company focuses on the recycling of all kinds of metal, non-metallic materials, rare earths and other non-renewable resources, while improving the utilization efficiency of all kinds of scarce resources, it directly and indirectly reduces the soil, air, water and other environmental pollution problems caused by mineral resources exploitation and smelting, and contributes to the construction of a resource-saving and environment-friendly society.

(1) Comprehensive utilization of scrap iron and steel

China is the world's largest steel producer and consumer, and its crude steel output exceeded the 1 billion ton mark for the first time in 2020. However, domestic iron ore resources are relatively scarce and rely heavily on imports. According to statistics, China imported 1.17 billion tons of iron ore in 2020, with an import value of about 118.94 billion US dollars. Scrap steel is an indispensable ferrous raw material for modern iron and steel industry, and it is also the only raw material that can replace iron ore in large quantities. It is a green resource for energy saving and carrying energy. Compared with the steelmaking process with iron ore and coke as the main raw materials, the steelmaking process with scrap steel as raw materials saves the processes of coking, sintering and ironmaking, and can effectively save the consumption of resources such as standard coal, water and concentrate powder. at the same time, effectively reduce carbon dioxide and other waste gas, waste water and solid waste emissions, supporting the green development of the iron and steel industry. On January 1, 2020, the scrap steel industry standard "Technical conditions for processing and Utilization of steelmaking Ferritic charge (scrap Steel)" approved and issued by the Ministry of Industry and Information Technology was officially implemented. With the increase of iron and steel storage and scrap steel resources in China, the total amount of scrap iron and steel resources in China will be very sufficient in the future. The compilation and promotion of practical industry standards for scrap iron and steel processing products play a vital role in standardizing the industry order and guiding product standardization. On December 14, 2020, the State Administration of Market Supervision and Administration (State Standardization Administration) approved and issued the recommended national standard of "recycled Iron and Steel Raw Materials", which was formally implemented on January 1, 2021. The implementation of the standard provides an important guarantee for making full use of high-quality iron resources and improving the quality of recycled iron and steel raw materials.

(2) Recycling and dismantling of scrapped motor vehicles

The measures for the Administration of Recycling of scrapped Motor vehicles will be formally implemented on June 1, 2019. The purpose of the new "measures" is to solve the problem of recycling and dismantling environmental pollution, to clarify the responsibility of producers, to emphasize the concept of green development, to solve the legal obstacles to the remanufacturing of motor vehicle parts, to make it clear that recycling prices are no longer linked to non-metallic prices, to highlight the leading role of market allocation, to solve the problem of supervision over existing scrapped enterprises, and to prohibit the trading of scrapped motor vehicles to promote the healthy and orderly development of the industry. To solve the problem of barriers to the entry of private capital, it is clear that the state implements a qualification system for scrapped motor vehicle recycling enterprises.

On September 1, 2020, the detailed rules for the implementation of the measures for the Recycling Management of scrapped Motor vehicles were formally implemented. The detailed rules make it clear that the state encourages the market-oriented, specialized and intensive development of the scrapped motor vehicle recycling and disassembly industry, promotes the improvement of the scrapped motor vehicle recycling system, and improves the recycling efficiency and service level. With the continuous implementation of the new policy, the scale of scrapped vehicle recycling industry in China will increase greatly in the future. In the face of the coming challenge of the sharp rise in the number of scrapped cars, the green recycling of waste resources must rise to the practical operational level as soon as possible, after clarifying the specific responsibilities of the parties concerned, promote the domestic recycling of scrapped vehicles to transform from theoretical calculation to actual recycling.

(3) Comprehensive utilization of rare earth recovery materials.

Rare earth is the general name of 17 chemical elements of scandium, yttrium and lanthanide in the periodic table, and it is not only a non-renewable resource, but also a key element of a variety of functional materials in high-tech fields, which is known as the "vitamin" of modern industry. With the development of new energy vehicles, wind power and other fields, the market demand of rare earth permanent magnet materials represented by NdFeB increases greatly. China's rare earth mineral resources and rare earth industry have obvious advantages, which are important national strategic resources, but due to the over-exploitation of rare earth resources, it has not only caused a great waste of resources, but also caused serious pollution to the environment. In recent years, the state has carried out total control on the exploitation of rare earth resources, carried out protective development, and put forward policy requirements to gradually improve the utilization rate of rare earth resources. Under the market situation that the total amount of resource exploitation is protected and the market application demand is stable, developing circular economy and improving the comprehensive utilization rate of resources has become the only feasible mode. In January 2021, the Ministry of Industry and Information Technology openly solicited opinions on the regulations on the Administration of rare Earths (draft for soliciting opinions). The rare Earth Management regulations are formulated to standardize the management of the rare earth industry, ensure the rational development and utilization of rare earth resources, promote the sustained and healthy development of the rare earth industry, and protect the ecological environment and the safety of resources. The rare Earth regulations regulate the high-quality and sustainable development of the rare earth industry from the national level, raise the rare earth industry to an unprecedented strategic height, and highlight the importance of its strategic position.

2. Elevator parts plate

With the acceleration of industrialization and urbanization in China, as well as the restriction of urban land resources, the demand for multi-storey and high-rise residential buildings, business buildings and other buildings in China is growing rapidly; in addition, with the increase in the number of elevators, China will gradually enter the peak period of elevator renewal, and the maintenance and replacement of the original elevator has also become a solid foundation for the development of China's elevator market.

At the second session of the 13th National people's Congress, "supporting the installation of elevators in old residential areas" once again appeared in the government report, and the content is more detailed and detailed than before. On July 20, 2020, the General Office of the State Council issued the guidance on comprehensively promoting the renovation of Old Urban Residential areas, pointing out that in order to meet the needs of residents for convenience and improvement of life, buildings with conditions are encouraged to install elevators; at the same time, support residential residents to withdraw housing accumulation fund, which can be used for self-occupied housing reconstruction such as the installation of elevators. In recent years, according to the spirit of the central document, all parts of the country have introduced specific measures on the design plan of adding elevators in existing residential buildings, the budget and sharing of costs, and the later maintenance of elevators, which will really benefit the people's livelihood, and the domestic elevator market has entered the fast lane of development.

Discussion and analysis of business situation

I. Overview

At the beginning of 2020, affected by the novel coronavirus epidemic, the world's major economies fell into a deep recession, various industries reshuffle intensified, coupled with trade disputes, geopolitics and other factors, many enterprises are facing severe challenges and increasing business pressure. In the face of difficulties and challenges, the company takes the initiative to seek change, scientific response, and turn crises into opportunities. All the staff of the company carry forward the work style of hard work, truth-seeking, innovation and dedication, courageously resist the pressure of the epidemic, and focus on the two important tasks of market share and reducing costs and increasing efficiency. Move forward firmly with practical work, once again write a new chapter of high-quality and efficient development, the company's business performance is growing steadily. During the year, the company increased investment in R & D and innovation and market expansion around the two major business sectors of renewable resources and elevator components, laying a solid foundation for the company's revenue and profit growth. In 2020, the company realized operating income of 3.376 billion yuan, up 56.18% over the same period last year, and realized net profit of 225 million yuan belonging to shareholders of listed companies, up 25.83% over the same period last year.

(1) Renewable resources, equipment and operation plate:

With the development of China's iron and steel industry, scrap consumption is increasing year by year, and the supply of self-produced scrap and social scrap resources is also increasing gradually. The successive introduction and implementation of scrap iron and steel industry standards and "recycled iron and steel raw materials" standards provide an important guarantee for making full use of high-quality iron resources and improving the quality of recycled iron and steel raw materials. According to industry statistics, in 2020, the total consumption of scrap in China reached 250 million tons, and the scrap ratio reached 21%. Under the influence of increasingly stringent environmental supervision and supply-side structural reform, the short-process steelmaking process with scrap as the main raw material has become the core and key for the iron and steel industry to achieve green and low-carbon development. While the market demand for scrap processing equipment of the company continues to be stable, the operation business of renewable resources has also developed rapidly. In order to meet the demand of scrap smelting, the company continues to launch new products and improve old products. 2000T metal hydraulic baler and hydraulic scrap shearing machine passed the appraisal and successfully went off the line during the year. The launch of new products will bring new growth points for the development of the company. The company continues to standardize production safety and environmental protection work, the first time to understand the relevant policies and regulations, self-inspection and self-correction, and strive to ensure the company's safe and sound operation. In recent years, the state has implemented a mandatory plan for the exploitation of rare earth resources, carried out protective development, and put forward policy requirements to gradually improve the utilization rate of rare earth resources. At the beginning of 2020, the company successfully acquired 100% equity of Xintai Technology by issuing shares and paying cash, extending the operation of renewable resources to the field of comprehensive utilization of rare earth recycled materials, further enhancing the company's position in the industry in the field of circular economy and enhancing its competitive advantage in the field of business. In the face of the tense global epidemic situation and the downward trend of the economy, Xintai Science and Technology has bucked the trend and successfully completed the various task targets set by the company at the beginning of the year. In 2020, Xintai Technology realized a net profit of 90.1639 million yuan belonging to the owner of the parent company. Xintai Science and Technology promotes innovation through reform, promotes development through innovation, continuously increases investment in research and development, improves product quality and scientific and technological content, and protects the development of enterprises. In 2020, Xintai Science and Technology was awarded the title of "specializing in the new 'Little Giant' Enterprise" by the Ministry of Industry and Information Technology, and was rated as "Provincial Green Factory" by Jiangxi Provincial Department of Industry and Information Technology.

(2) Elevator parts business plate:

With the development of Internet of things technology and mobile digital applications, signal system as the only medium in the elevator that can interact with users, more humane, more convenient manipulation and intelligent intimate service has become the trend of the industry and the needs of life. In 2020, Wilman made a new breakthrough in the company's performance through the joint efforts of all employees under the leadership of the company's board of directors. Wilman establishes the core values of "customer-centered", actively develops new products, strives for new projects, constantly improves the level of manufacturing technology and quality control, and makes full use of new media to promote brand building. Around the concept of "health ladder", Wilman timely developed and launched more intelligent and convenient products, such as gesture recognition call ladders, face recognition call ladders, antibacterial buttons and so on, to meet the current market demand. With excellent product quality and service, Wilman won the honorary titles of Kone Gold supplier, Schindler Best Cooperative supplier, Haian 5G+ Industrial Internet Innovation demonstration Enterprise and so on. In 2020, Wilman was awarded the title of "specializing in the new 'Little Giant' Enterprise" by the Ministry of Industry and Information Technology. In the second half of 2020, Wilman held a middle-and high-level strategy seminar, on the basis of in-depth analysis and summary of the company's development process, cultural precipitation, resource endowment, experience and lessons, and combined with the external situation, formulated a three-year strategic development plan, defined the development orientation, development direction, development ideas and development goals, and laid a solid foundation for the company's high-quality development in the future.