恒生電子：恒生電子股份有限公司2021年年度報告（英文版）.PDF

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1、2021Annual Report1/243Stock Code:600570Stock Abbreviation:Hundsun TechnologiesHundsun Technologies Inc.2021 Annual Report2021Annual Report2/243Important NoticeI.The Board and the Supervisory Board of the Company and the Directors,Supervisors andmembers of the Senior Management warrant the truthfulne

2、ss,accuracy and completeness of thecontents in this Annual Report and confirm that there are no misrepresentations or misleadingstatements contained in or material omissions from this Annual Report,and accept several andjoint legal responsibilities.II.All Directors attended the board meeting of the

3、Company to consider and approve the annualresults.III.Pan-China Certified Public Accountants LLP has issued a standard unqualified auditors reportfor the Company.IV.Peng Zhenggang,chairman of the Company,and Yao Manying,Financial Controller and Headof the Finance Department(person in charge of accou

4、nting),warrant the truthfulness,accuracyand completeness of the financial statements contained herein.V.Profit distribution plan or capital reserves share capitalization plan during the Reporting Periodupon deliberation at the board meetingHundsun Technologies Inc.(hereinafter referred to as the Com

5、pany,for the parent company,thesame as below)realized a total net profit of RMB1,379,884,502.16(in RMB,the same as below)in 2021.According to the Company Law,the Articles of Association of the Company and the relevant guidelines ofthe China Securities Regulatory Commission and the Shanghai Stock Exc

6、hange,10%of the statutoryreserve fund shall be withdrawn first,plus the profit carry-over from the previous year.According to theactual situation,the Company plans to implement the profit distribution plan in the following order:1.The Company will withdraw 10%of the statutory reserve fund of RMB137,

7、988,450.2 first.2.Based on 1,461,144,040 shares,being the Companys total share capital of 1,461,560,480 shares(as of March 29,2022,the same below)less 416,440 shares in the Companys special repurchaseaccount,a cash dividend of RMB1.00(tax inclusive)per 10 shares will be paid to allshareholders,total

8、ing RMB146,114,404.3.Based on 1,461,144,040 shares,being the Companys total share capital of 1,461,560,480 sharesless 416,440 shares in the Companys special repurchase account,3 bonus shares will bedistributed to all shareholders for every 10 shares,totaling 438,343,212 bonus shares.4.The remaining

9、distributable profits will be carried forward to the next year.The above profit distribution plan shall be submitted for deliberation and approval at the generalmeeting of the Company before implementation.After implementation,the Companys total share capitalwill be 1,899,903,692 shares.If,during th

10、e period between the disclosure of this profit distribution plan and the record date fordividend distribution,the Companys share capital involved in the profit distribution changes due torelevant matters,the Company plans to maintain the same proportion of profit distribution per share,adjustthe tot

11、al amount of distribution accordingly,and announce the details about adjustment separately.VI.Disclaimer of forward-looking statements2021Annual Report3/243Applicable Not ApplicableThe Companys future strategies and plans contained herein do not constitute substantivecommitments to investors by the

12、Company.Investors and stakeholders should be adequately aware of risksherein and understand the differences among plans,forecasts and commitments.VII.Whether the Controlling Shareholder of the Company or its associates has misappropriated theCompanys funds for purposes other than for business?NVIII.

13、Whether the Company has provided external guarantees in violation of any prescribeddecision-making procedures?NIX.Whether more than half of the Directors fail to warrant the truthfulness,accuracy andcompleteness of the contents contained in the annual report disclosed by the Company?NX.Reminder of i

14、mportant risksNone.The Company has described the potential risks in detail herein.Please refer to(IV)Potentialrisks of VI.Discussion and analysis of the future development of the Company in Section IIIManagement Discussion and Analysis for details.XI.Others Applicable Not applicableNote:This documen

15、t is a translated version of the Chinese version 2021 Annual Report(“2021 年年度報告”),and the published announcements in the Chinese version shall prevail.The complete publishedChinese 2021Annual Report may be obtained at Report4/243ContentsSection IDefinitions.5Section IICompany Profile and Key Financi

16、al Indicators.6Section IIIManagement Discussion and Analysis.9Section IVCorporate Governance.37Section VEnvironmental and Social Responsibility.54Section VISignificant Events.55Section VIIChanges in Shares and Particulars of Shareholders.64Section VIIIPreferred Shares.71Section IXCorporate Bonds.72S

17、ection XFinancial Report.73Documents for InspectionI.Accounting statements signed and sealed by the Chairman,Financial Controller,and Headof the Finance Department(person in charge of accounting)of the CompanyII.The original Auditors Report sealed by Pan-China Certified Public Accountants LLP andsea

18、led and signed by Pan-Chinas CPAsIII.Originals of all documents and announcements of the Company publicly disclosed in thenewspaper designated by CSRC during the Reporting Period2021Annual Report5/243Section I DefinitionsI.DefinitionsUnless the context otherwise requires,the following terms shall ha

19、ve the following meanings in this report:Definitions of frequently-used termsHundsun,Hundsun Technologiesor the CompanyHundsun Technologies Inc.Handsome GroupHangzhou Handsome Electronics Group Co.,Ltd.REITsReal Estate Investment TrustsWealth Management Connectan arrangement under which individual r

20、esidents in the Guangdong-Hong Kong-MacaoGreater Bay Area carry out cross-boundary investment in wealth management productsdistributed by banks in the Greater Bay AreaPOSIF investment adviserInvestment Adviser of Publicly Offered Securities Investment FundsFICC servicesFixed Income,Currencies and Co

21、mmodities services,including underlying assets such asfixed income securities,currencies and commodities,as well as derivatives underlyingthose assets.TA systemTransfer Agent,Hundsuns fund registration and transfer system software,used forinvestor account management and asset management in the asset

22、 management industry,including funds,securities,insurance,futures,and private equityFinTechFinTech mainly refers to the low-threshold financial services provided by Internetcompanies or high-tech companies through cloud computing,big data,mobile Internet,and other emerging technologies.O45the Compan

23、ys investment trading system,of which O refers to Oracle version and 45refers to version 4.5UF3.0Core Business Operation Platform System Version 3.0Light technology platformLIGHT,a financial digital infrastructure independently developed by Hundsun and a newgeneration of IT application innovation in

24、frastructure,which is committed to helpingcustomers win business success and build capabilities leading to the future throughtechnical capabilitiesCESIChina Electronics Standardization InstituteNLPNatural Language Processing,a subject that studies the language in human-computerinteractionAIArtificia

25、l Intelligence,abbreviated as AIFinastraa global company based in the UK with a broad range of financial software products andservices,providing financial technology services to financial institutions of all sizesworldwide.LTCa management process that continuously optimizes customer-focused operatio

26、ns andmanagement to improve overall operation targetsIPDa set of product and R&D management system,which examines the idea and frameworkof product and R&D management from the perspective of product investment anddevelopmentThree responsibilities systemIn order to provide customers with a better and

27、more professional service experience,three types of responsible persons are assigned according to business processes andspecialization of work for customer interfaces,namely Account responsible(AR),Solutions responsible(SR),and Fulfillment responsible(FR).Triumvirate systemthe three most important p

28、ositions in product R&D management,i.e.,product manager,system architect,and R&D project managerDSTE strategic planning processDevelop Strategy To ExecutionCRMCustomer Relationship ManagementPB systemPrime Brokerage SystemBPOBusiness Process OutsourcingSaaSSoftware-as-a-Service,i.e.,providing softwa

29、re services over the networkAMSAsset Management SystemRPARobotic Process AutomationAIOpsArtificial Intelligence for IT OperationsEAASEverything As A Service,a service strategy of the Company2021Annual Report6/243Section II Company Profile and Key Financial IndicatorsI.COMPANY INFORMATIONChinese name

30、 of the Company恒生電子股份有限公司Chinese abbreviation恒生電子English name of the CompanyHundsun Technologies Inc.English abbreviationHundsunLegal representative of the CompanyPeng ZhenggangII.CONTACT INFORMATIONSecretary of the BoardRepresentative of SecuritiesAffairsNameTu HaiyanGu NingCorrespondence addressHu

31、ndsun Tower,No.3588 Jiangnan Avenue,Binjiang District,HangzhouHundsun Tower,No.3588 JiangnanAvenue,Binjiang District,HangzhouTel.0571-288297020571-28829702Fax0571-288297030571-28829703E-III.BASIC INFORMATIONRegistered addressHundsun Tower,No.3588 Jiangnan Avenue,Binjiang District,HangzhouHistorical

32、changes to the registered addressNonePrincipal place of businessHundsun Tower,No.3588 Jiangnan Avenue,Binjiang District,HangzhouPostal code of principal place of business310053Website of the CE-IV.INFORMATION DISCLOSURE AND PLACE FOR INSPECTIONNewspapers selected by the Company for informationdisclo

33、sureChina Securities Journal,Shanghai Securities News,SecuritiesTimes,and Securities DailyWebsite designated by the Shanghai Stock Exchange forpublishing the annual Place for inspection of annual reports of the CompanyHundsun Tower,No.3588 Jiangnan Avenue,Binjiang District,HangzhouV.BASIC INFORMATIO

34、N OF THE COMPANYS SHARESBasic Information of the Companys SharesClass of sharesStock exchangeStock abbreviationStock codeStock abbreviationbefore changeA sharesShanghai StockExchangeHundsun Technologies600570NoneVI.OTHER RELEVANT INFORMATIONAccounting firm(domestic)engaged bythe CompanyNamePan-China

35、 Certified Public Accountants LLPOffice addressHangzhou,the PRCNamesofsigningaccountantsChen Caiqin and Fei JunVII.KEY ACCOUNTING DATA AND FINANCIAL INDICATORS FOR THE PAST THREE2021Annual Report7/243YEARS(I)Key accounting dataUnit:YuanCurrency:RMBKey accounting data20212020Increase or decreasefor t

36、he period over thesame period of theprevious year(%)2019Revenue5,496,578,624.884,172,645,156.5631.733,871,840,010.31Net profit attributable toshareholders of theCompany1,463,538,930.141,321,735,522.4810.731,415,848,641.24Net profit attributable toshareholders of theCompany net ofnon-recurring profit

37、 orloss946,569,672.55733,590,924.6129.03889,871,300.91Net cash flows fromoperating activities956,789,306.141,397,902,270.41-31.561,070,787,954.28At the end of 2021At the end of 2020Increase or decreaseat the end of theperiod as compared tothat of the sameperiod of the previousyear(%)At the end of 20

38、19Net assets attributableto shareholders of theCompany5,695,031,051.05 4,554,029,323.5925.054,478,963,385.36Total assets12,079,908,312.769,971,144,688.3421.158,359,497,109.35(II)Key financial indicatorsKey financial indicators20212020Increase or decreasefor the period overthe same period ofthe previ

39、ous year(%)2019Basic earnings per share(RMB/share)1.010.9012.220.97Diluted earnings per share(RMB/share)1.010.9012.220.97Basicearningspersharenetofnon-recurring profit and loss(RMB/share)0.650.5030.000.61Weighted average ROE(%)30.1131.57-1.4637.16Weighted mean ROE net of non-recurringprofit or loss(

40、%)19.4717.521.9523.35Explanation on the key accounting data and financial indicators of the Company for the past three yearsbefore the end of the Reporting PeriodApplicable NotApplicableVIII.ACCOUNTING DATA DIFFERENCES BETWEEN THE PRC GAAP STANDARDS ANDFOREIGNACCOUNTING STANDARDS(I)Difference arisin

41、g from the net profit and net assets attributable to shareholders of theCompany in the financial statements disclosed simultaneously pursuant to the InternationalAccounting Standards and the PRC GAAP StandardsApplicable NotApplicable2021Annual Report8/243(II)Difference arising from the net profit an

42、d net assets attributable to shareholders of the Companyin the financial statements disclosed simultaneously pursuant to the foreign accounting standardsand the PRC GAAP StandardsApplicable NotApplicable(III)Explanation on the difference between domestic and foreign accounting standardsApplicable No

43、tApplicableIX.KEY FINANCIAL DATAOF 2021 BY QUARTERUnit:YuanCurrency:RMBQ1(January toMarch)Q2(April to June)Q3(July to September)Q4(October to December)Revenue751,184,334.011,300,966,351.641,068,727,516.272,375,700,422.96Net profit attributable toshareholders of theCompany168,625,222.28546,464,316.71

44、-31,254,513.82779,703,904.97Net profit attributable toshareholders of theCompany net ofnon-recurring profit or loss37,621,735.72262,070,634.56-25,520,447.04672,397,749.31Net cash flows fromoperating activities-832,461,297.5351,193,250.77180,904,157.441,557,153,195.46Explanation on the difference bet

45、ween quarterly results and information disclosed in periodic reportsApplicable Not ApplicableX.NON-RECURRING PROFITS OR LOSSES AND AMOUNTSApplicable Not ApplicableUnit:YuanCurrency:RMBNon-recurring profits or lossesAmount for 2021Note(if applicable)Amount for 2020Amount for 2019Profit or loss from d

46、isposal ofnon-current assets38,436,050.92 Mainly represented theinvestment income fromthe transfer of shares ofHundSun Chang Yun andthe fair value recognitionof the remaining shares ofDworld AI344,555,568.2162,739,044.33Government grants recognizedin profit or loss for the currentperiod(excluding th

47、ose closelyrelated to the normal businessof the Company and grantedunder the national policies andcontinuously enjoyedaccording to a certain quota ofamount or volume57,355,855.21 Mainly represented thegovernment grants forspecial projects38,004,499.6143,196,217.04Profit or loss from changes inthe fa

48、ir value generated fromthe Companysheld-for-trading and derivativefinancial assets,andheld-for-trading and derivativefinancial liabilities,andinvestment income from thedisposal of held-for-trading489,548,525.78 Mainly represented theprofit and loss from thechanges in the fair valuegenerated from the

49、Companysheld-for-trading financialassets,and the investmentincome from the disposalof the held-for-trading244,076,200.23489,108,448.602021Annual Report9/243Non-recurring profits or lossesAmount for 2021Note(if applicable)Amount for 2020Amount for 2019and derivative financial assets,held-for-trading

50、and derivativefinancial liabilities,and otherdebt investments,except foreffective hedging businessrelated to the Companysnormal businessfinancial assetsOther non-operating incomeand expenses other than theabove-770,038.19-2,223,351.8535,336.42Other profits or losses thatbelong to non-recurring profi

51、tsand losses-10,389,612.76Less:Effect on income tax56,393,147.868,719,973.7557,565,685.81Effect on minority interests(after-tax)11,207,988.2717,158,731.8211,536,020.25Total516,969,257.59588,144,597.87525,977,340.33Explanation on defining the non-recurring profits and losses set out in the Explanator

52、y Announcement No.1 on Information Disclosure for Companies Offering Securities to the Public-Non-Recurring Profit orLoss as recurring profits and lossesApplicable Not ApplicableXI.ITEMS MEASURED AT FAIR VALUESApplicable NotApplicableUnit:YuanCurrency:RMBItemOpening balanceClosing balanceChange for

53、the periodEffect on the profit forthe periodHeld-for-tradingfinancialassets2,723,350,172.041,991,523,094.74-731,827,077.3082,538,604.83Other debt investments83,845,382.7465,681,018.23-18,164,364.512,660,128.09Other non-current financialassets2,229,463,162.162,981,720,276.86752,257,114.70478,786,243.

54、21Total5,036,658,716.945,038,924,389.832,265,672.89563,984,976.13XII.OthersApplicable NotApplicableSection IIIManagement Discussion and AnalysisI.DISCUSSIONAND ANALYSIS OF BUSINESS OPERATIONS(I)Overall operationsIn 2021,China remained a global leader in pandemic prevention and control and in economi

55、c andsocial development through scientifically integrating these goals.Digital technology has played animportant role in terms of information services,pandemic detection and material security in the battleagainst COVID-19.At the same time,the pandemic has created huge public demand for online educat

56、ion,home office services,healthcare and entertainment,making digitalization a hot topic in various industries,the financial industry included.While keeping abreast of changes in regulatory policy and industrydevelopment trends,the Company keenly seized relevant market opportunities,changing or upgra

57、dingrelated business services on a timely basis.Through the efforts of all of its employees,the Company2021Annual Report10/243achieved sustained business and organizational growth,making great progress in its products,technology,operations and management.During the Reporting Period,the Companys reve

58、nue increased by 31.73%year on year,while netprofit attributable to shareholders increased by 10.73%year on year.The main reason for this increase wasthe increased income from main business,under the influence of financial innovation policies,togetherwith the lack of significant asset impairment los

59、ses relative to the previous year,during the ReportingPeriod.During the Reporting Period,continuous growth was maintained in all of the Companys businesses.In terms of industries,good growth was seen in the insurance and private equity markets,while securities,funds,futures and trusts maintained ste

60、ady growth.In terms of products,the Company smoothly promotedits new generation of core products,such as 045,Valuation 6.0&TA,wealth management sales andinvestment advisory products,which were popular with customers.The Company put UF3.0 intofull-service operation and continued to maintain its techn

61、ological leadership via securing in-depthcooperation with a number of brokers using a distributed cloud-native architecture.In terms of the Companys revenue sources,big retail and big asset management services remaineddominant,with product lines such as wealth middle platforms,wealth management sale

62、s and investmentadvisory in big retail services,and product lines such as investment&transaction management,andvaluation&asset management platforms in the big asset management services all achieving significantgrowth.In terms of innovative businesses,revenue from data services,data end-use applicati

63、ons,datamiddle office,and AI for research and investment recorded satisfactory growth.In order to build a double first-class enterprise,the Company continued to improve customersatisfaction,increase the maturity of its duty mechanism for senior executives,and significantly improveefficiency of deliv

64、ery,with a 9.6%year-on-year decrease in the contract delivery cycle period.It continuedto improve product quality,comprehensively reorganized its technological products,optimized its productmanagement principles and resource allocation for key positions,and successfully implemented an2021Annual Repo

65、rt11/243employee share ownership plan.In terms of values,the Company has always adhered to a“customer first”core concept,pursuing the goal of exceeding customer expectations.(II)R&D and technologyDuring the Reporting Period,Hundsuns core products,UF3,O45,Valuation 6 and the new generationof TA all c

66、ompleted cloud-native technological upgrades and were also officially launched to keycustomers.In terms of technological upgrading,the Company continued to improve the Light technologyplatform,making it more powerful via the introduction of new technologies and the release of a series ofnew technolo

67、gical products,such as LightDB,a relational database supporting innovative financial ITapplicationbusinessscenarios;LightCore,acloud-nativefoundationsupportingcomprehensivecloud-based business systems;LightAtom,a low-code development platform supporting customerparticipation in customized developmen

68、t;and LightHSL,a cross-chain service management platformsupporting a variety of heterogeneous underlying chains.It also launched the Light Cloud platform,whichoffers online API distribution,an online development platform and online community services providingcomprehensive assistance customers in th

69、eir digital transformation and upgrading.The Company was also actively involved in the development of standards for emerging technologies.In the field of databases,the product team released a white paper on databases for the industry and won thetender to develop database testing standards for SSEs I

70、T application innovation base.In the highperformance computing field,the product team released an industry initiative on performance measurementstandards for FPGA-based ticker products.In AI,the Companys financial knowledge graph platform wasawarded application platform and construction platform pro

71、duct certificates by CESI.The NLP Teamreleased intelligent Q&A evaluation criteria.The Intelligent Multimedia Team released evaluation criteriafor intelligent dual-recording visual systems.The AI Business Team began formulation of business eventstandards,which currently remains in the project approv

72、al stage.In the blockchain field,the teamparticipated in the development of five blockchain technical standards,and won three industry awards,withrelated products passing MIIT CAICTs evaluation based on five technical indicators.(III)M&A and InvestmentDuring the Reporting Period,the Company continue

73、d to make appropriate efforts concerninginvestment and mergers and acquisitions,acquiring Hengxin Lirong and thereby gaining business andintellectual property rights from Finastra related to the Summit and Opics fund management systems inMainland China,Hong Kong and Macau,and carrying out business i

74、ntegration with the subsidiaryCloudwing Network,thereby improving its layout in the OPICS fund trading system field.The Companycontinued to pursue its internationalization strategy,acquiring a 23.66%stake in N2N Connect,a leadingtrading solutions provider in Malaysia,through the subsidiary Hundsun H

75、oldings Limited,to expand itsbusiness in the Southeast Asian market.The Company further improved its AI investment research productline by increasing its shareholding in Dworld AI.The Company continued to invest in the FinTechecosystem,including a number of leading tech-based startups in niche marke

76、ts,such as XSKY and Horizon,through relevant mutual funds,and cooperated with these companies in related business areas to achievewin-win cooperation through business synergy.(IV)Systems management1.Customer satisfaction first/quality first2021Annual Report12/243The Company continued its adherence t

77、o customer first values.In order to improve customersatisfaction and product quality,the Company actively implemented LTC,IPD and its Threeresponsibilities system,as well as its duty mechanism for senior executives,along with its Triumvirate system,and strives to achieve high performance,high reliab

78、ility and technological leadership in productquality,thereby improving product quality and delivery efficiency.2.Management upgradingThe Company consolidated the DSTE strategic planning process to enhance its strategic planningcapability,and reformed its IPD,enabling the full functioning of process-

79、oriented organization,releasingits organization manual and other related supporting mechanisms.The Company also reformed its LTC toestablish an LTC process structure,redefined its business opportunity types,established and piloted itssales/delivery project operation mechanism,and defined and designe

80、d a sales performance review,decision-making and authorization mechanism for improved decision-making efficiency.It upgraded itsHR system,reconstructed its job position system,established initial professional,expert and managementposition requirements,completed the first round of job qualification a

81、uthentication,and implemented itslong-term incentives policy.3.Organizational growthThe Company increased its talent recruitment and financial budgetary control efforts,with anemphasis on information,gradually upgrading and putting its internal HR platform,operations and R&Dplatforms online.The Comp

82、any continued to work on business risk management,establishing a soundCOVID-19 prevention and response mechanism to prudently combat the pandemic.II.INDUSTRYDEVELOPMENTS DURING THE REPORTING PERIOD1.Financial industry.The Company mainly serves various financial institutions;thus conditions incustome

83、rs industry indirectly affect its business activities.Taking brokerages and funds,the Companysmain customer groups,as examples,industry association data indicates that securities companies totalrevenue in 2021 was RMB502.41 billion,representing a year-on-year increase of approximately 12.03%,and tha

84、t their net profit was RMB191.119 billion,representing a year-on-year increase of approximately21.32%:(Source:Securities Association of China)2021Annual Report13/243As of the end of 2021,publicly offered funds managed by fund management companies totaledapproximately RMB25.56 trillion,representing a

85、 year-on-year increase of approximately 28.51%;privateequity funds under management totaled approximately RMB19.76 trillion,representing a year-on-yearincrease of approximately 16.51%:(Source:Asset Management Association of China)Based on the performance of the securities and fund industries describ

86、ed above,the overalldevelopment of the financial industry in 2021 was solid,with financial institutions overall revenue andprofits continuing to grow steadily,creating some positive impact on the Companys normal operations.2.Financial market reform and regulation.In 2021,capital market reforms conti

87、nued to expand andfurther improve.In terms of institutional reform,the Central Economic Work Conference stressed the needto implement pilot comprehensive reform of market-based allocation of factors of production and fullimplementation of a registration system for stock issuance.The further advancem

88、ent of the multi-levelmarket will provide more impetus to innovation-driven transformation for economic development.In terms of financial infrastructure,the merger of the Shenzhen Stock Exchanges main-board andsecond-board market has solved problems relating to homogeneous markets.The start of tradi

89、ng at theBeijing Stock Exchange was a success,and it now offers an ideal platform for serving innovative small andmedium-sized enterprises,resolving the financing difficulties of these specialized,excellent,unique andinnovative enterprises in a targeted manner.In terms of innovative financial produc

90、ts,the first batch of nine infrastructure public REITs wasofficially listed and traded on the Shanghai and Shenzhen exchanges,marking an important milestone inthe piloting process of public Chinese infrastructure REITs.Since then,the piloting of public REITs hascontinued to accelerate,and on July 2,

91、the National Development and Reform Commission issued theNotice on Further Improving the Pilot of Real Estate Investment Trusts(REITs)in the Infrastructure Sector,which extended the pilot to nationwide scope.The official implementation of Wealth ManagementConnect in the Guangdong-Hong Kong-Macao Gre

92、ater Bay Area also represented innovation in personalinvestment business and further expanded overseas use of the RMB,promoting the in-depth developmentof RMB internationalization.With the continued innovation and transformation of wealth managementbusiness models and new highs in the scale of publi

93、c fund management,public fund investment advisorybusiness underwent rapid development,with a total of 60 pilot institutions obtaining approval for fundinvestment advisory pilots.At the same time,the industrys basic system was also gradually improved,and2021Annual Report14/243guidelines on fund inves

94、tment advisory business clarifying responsibilities within that business,wereissued for consultation.As the liberalization of foreign investment continued,approval to enter the Chinese market wasgranted to wholly foreign-owned brokers and public funds,with many additional international investmentban

95、ks and capital management giants in the process of applying for the relevant licenses.Although theirentry into Chinas financial market may challenge local financial companies in the short term,theircorporate governance and assessment mechanisms will,in the long run,positively influence theoptimizati

96、on of local Chinese financial companies,promoting a bigger,better and stronger Chinese fundindustry.In terms of financial market reform and regulatory measures,FinTech provides support for businessesefficient and orderly development,and also plays a positive role in the Companys daily operations.In

97、terms of financial security,the NDRC launched the Demonstration Project for the Secure andControllable Application of Critical Information Infrastructure in 2019,with a focus on actively andsteadily promoting the specific effects of critical information infrastructure innovation in the financialsect

98、or.In 2020,the Proposals of the Central Committee of the Communist Party of China on Formulatingthe Fourteenth Five-Year Plan for National Economic and Social Development and the Long-term Goalsfor 2035 proposed the promotion of infrastructure development in an integrated manner and theguaranteeing

99、of national economic security,and strengthening of early warning,prevention and controlmechanisms,with capacity building to cope with economic security risks,to make key areas such asimportant industries,infrastructure,strategic resources and major science&technology secure andcontrollable,thus stro

100、ngly promoting the IT application innovation strategy.The IT application innovation industry is the technological foundation of national information security.By end-2021,Hundsun had evaluated over 30 business systems(such as UF3.0,TA system,investmenttransaction systems,fund operations systems,and c

101、ustodian and valuation systems)to evaluate whethersuch systems were suitable for ICT application,with over 20 business systems still undergoing this process.3.Landscape of technological development and industrial competition.In recent years,the digitaltransformation of the financial industry has con

102、tinued to accelerate,most especially the data-centrictechnology changes driving innovation and transformation in financial products and services.Fullyreleasing datas potential will be the key determining factor in the industrys high-quality development.Capitalizing on data,utilizing assets and apply

103、ing intelligence sums up Hundsuns logic concerning theevolution of data intelligence.To achieve the goals of digitally-intelligent capital and digitally-intelligentwealth management,the industry requires enterprise-grade cloud-native big data platforms,agile dataarchitecture,more diverse data,high-p

104、erformance databases,and,more importantly,innovative alternativedata acquired via data asset ecology.AI is moving rapidly from perceptual intelligence to cognitiveintelligence and deep integration with financial services,empowering capital management,customerservice,marketing,operations,risk control

105、 and many other areas.In the era of digital intelligence,thechallenge of artificial intelligence lies in the convergence and integration of technologies,the deepeningand broadening of application scenarios,and the implementation and promotion of engineering.In terms of the industry landscape,as the

106、digital transformation of financial institutions accelerates,FinTech companies have increased investment and competition in the market,leading to further2021Annual Report15/243intensification of industrial competition in niche business areas.Financial institutions increasing demandfor customer-speci

107、fic differentiated services and autonomous control has in recent years led to theirincreasing investment in FinTech.With its business experiencing new hotspots,such as data andintelligence business,FICC business,core insurance business and international business,the Company willleverage its strength

108、s to continue growth in such new areas.III.BUSINESS DEVELOPMENT DURING THE REPORTING PERIODA leading provider of FinTech products and services in China,and therefore focused on the financialindustry,the Company mainly serves customers from sectors including securities,futures,public offerings,trusts

109、,insurance,private equity,banking,industry,stock exchanges and emerging industries,providingone-stop FinTech solutions.Against the background of financial digital transformation and upgrading,theCompany has undergone a gradual deepening from process digitization to business digitization,continuously

110、 exploring the intelligent application of FinTech using advanced technologies such ascloud-native,high performance,big data,artificial intelligence and blockchain to empower financialinstitutions to better manage assets and serve their customers,and assist its customers to realize financialdigital t

111、ransformation and upgrading.Based on type of product or service,the Company categorizes its principal business activities into thefollowing six business segments:big retail IT,big asset management IT,banking and industrial IT,datarisk and infrastructure IT,Internet innovation,and non-financial.Big R

112、etail IT BusinessBig retail IT business consists mainly of IT business with securities brokerages and wealth managers.The securities brokerage IT business mainly serves customers from the brokerage business segment,and itsmain core product is centralized trading systems,mainly configured to provide

113、account management,capital clearing and settlement,commission order management,and access(interaction with exchanges,CSDC,etc.)services.The wealth management IT business mainly serves customers from the marketing,sales and customer service business segments of all kinds of wealth management institut

114、ions,includingbanks,securities firms and third parties,and various asset management institutions such as funds,trusts andinsurance asset managers,as well as banks and brokers custody and outsourcing business segments.Its2021Annual Report16/243main core products are registration&transfer,asset alloca

115、tion,product management,and wealthmanagement sales&marketing systems,which are mainly configured to provide product registration&release,wealth planning proposals,financial product management,wealth management sales transactions,investment advisory business operations,customer marketing/service and

116、investor services.In the securities brokerage business,the Company has put UF3.0,its next-generation comprehensivesecurities financial services platform,into full-service operation,continuously developed and implementedits distributed cloud-native architecture in IT application innovation,and achiev

117、ed in-depth cooperation onthis architecture with seven securities brokers including Huatai Securities,Founder Securities and IndustrialSecurities.New business with Beijing Stock Exchange and integrated account optimization also providedretail managers with ample service opportunities and revenues.In

118、 wealth management,the Company seized the opportunity offered by the rapid development ofinvestment advisory business for public offerings,adding over 50 partners in the investment advisorybusiness in 2021,with a winning bid ratio of approximately 85%for asset allocation systems,and 11 newcustomers

119、for its next-generation Huiying marketing service platform.In traditional business,the Companycontracted with 40 new partners via the new-generation TA,38 new partners via the financial sales systemand 21 new partners through the CRM and call center,also cooperating with Credit Suisse Securities via

120、the app.In the trust industry,the Company contracted to jointly develop integrated wealth managementsolutions with new high-quality customers including HKR International Kunlun Trust and China RailwayTrust,and to jointly develop family trust solutions with new high-quality customers including CCB Tr

121、ust,Shandong International Trust and Bank of China.Big Asset Management IT BusinessBig asset management IT business mainly consists of asset management IT business and institutionalservice IT business.The asset management IT business mainly serves customers from investment research,investment tradin

122、g,risk management and other related business segments of securities,funds,insurance,banks,trustsand other asset management institutions;itsmain core products are investmentdecision-making systems,investment trading management systems,valuation&accounting systems,andasset management operation systems

123、,which are mainly configured to assist institutions in building a soundinvestment research process and fund managers in making investment decisions,to provide a tradingplatform for traders and to support the operation of middle and back-end platforms.The institutionalservice IT business mainly serve

124、s customers from brokers institutional business segment;its main coreproducts are institutional service-related business systems,which are mainly configured to support brokersprovision of trading of investments,compliance and risk control,low-latency trading,agency trading,strategy algorithms,custod

125、y and outsourcing,integrated private equity operations,research services,individualized support and other related services to their institutional customers at home and abroad.In 2021,with the continuous opening-up of financial markets,the continuous increase andimprovement of infrastructure and cont

126、inuous innovation in financial business in China,a series of policies,such as the approval of a new fund-raising management institution,the establishment of the Beijing StockExchange,the interconnection of bond markets,the launch of the new bond platform of the Shanghai andShenzhen Stock Exchanges,t

127、he participation of insurance funds in securities lending,and changes in thesettlement mode of securities brokers,were successively introduced,creating many market opportunities2021Annual Report17/243for the Companys asset management business segment.In addition,Hundsuns next generation system alsoa

128、chieved phased results.Outside the trust industry and bank financing sub-industry,the Company officiallylaunched its asset management product O45 to the first customer in the fund industry,cooperated withmany customers from securities firms,banks,trusts and funds on Valuation 6.0,also launching addi

129、tionalproducts at the same time.As the institutionalization of customers accelerates,by integrating new business cooperation scenariossuch as income swaps,low-latency trading and algorithm policies,the i2 integrated institutional serviceplatform solution provides strong support for various sell-side

130、 institutions operation of institutional servicebusiness,while enhancing their single product market coverage.In the field of algorithmic tradingespecially,businesses were linked by the core component PB system,Genus-Finances algorithmic servicesand Cloudbroker Network,forming a service ecology for

131、private equity and HNW customers.Data Risk and Infrastructure IT BusinessThe data risk and infrastructure IT business line mainly serves customers from the risk managementand compliance business segments of various financial institutions,local exchanges,etc.Its main coreproducts are compliance manag

132、ement products,which are mainly configured to provide risk monitoring,compliancereporting,processmanagement,informationreportingmanagement,andanti-moneylaundering services.The data risk and infrastructure IT business exhibited generally sound development trends.Dataservices and traditional business

133、grew solidly,with expansion and deepening of underlying data,and theapplication of special data via linkages.Rapid accumulation and coverage of macro industry database EDBdata,together with financial management data,speeded up the self-construction of models for industrialchains and fund valuations,

134、and with increased investments in the construction of public opinion,law-breaking,judicial and trust modules,the in-depth self-construction and integration of models continuesto improve,further enhancing the Companys financial industry market share.Data middle platformbusiness:HDP,the integrated dat

135、a platform system,has significantly improved the efficiency of data assetsystem construction,and acquired 23 new financial industry customers in 2021.The number of customersfor products such as regulatory data reporting,risk data warehouses and the new data center increased,notably alongside a signi

136、ficant increase in regulatory data reporting market share.Risk compliancemanagement:products maintained continuous growth with the influence of the anti-money launderingbusiness further expanding.In terms of financial infrastructure,in 2021,the Company officially putthe National Carbon Emission Regi

137、stration and Trading System it had constructed into operation in thenational carbon market,and won the bid for construction of a National Voluntary Greenhouse GasEmission Reduction Trading System,thus establishing a leading position in the carbon market.In localfinancial supervision,the Company expa

138、nded its digital supervision of local financial business,laying thefoundation for future large-scale promotion.In terms of new business and new products:(1)theCompany further improved its research and investment AI product line through increasing its shareholdingin Dworld AI,acquiring 12 new custome

139、rs;(2)Zhejiang Xunchang Wendao Network Technology Co.,Ltd.,a joint venture with Tianfeng Securities Co.,Ltd.,was set up to operate new content businesses suchas wealth management short video and live streaming.2021Annual Report18/243Banking and Industrial IT BusinessThe banking and industrial IT bus

140、iness,consisting mainly of banking IT business together withindustrial and supply chain finance IT business,mainly serves customers from the corporate business andtechnology departments of commercial banks,finance companies and various industrial customers(such asmedium and large-sized manufacturers

141、,trading enterprises,and e-commerce platforms).Its main coreproducts are cash management platforms and bill business products,mainly configured to provide cashmanagement,enterprise treasury management and bill transaction management services.In 2021,the banking and industrial IT business line releas

142、ed the C9 business finance product brand.The configuration of technology and business middle platforms mainly serving joint-stock and urbancommercial banks became more reasonable and improvements in the middle platform strategy continued.The Company further enhanced its financial integration program

143、 and increased its cooperation withjoint-stock and major urban commercial banks,with over ten newly acquired cooperative customersincreasing its cash management and bill businesses,and the maturity of its industrial and financialintegration program increasing.Internet Innovation Business and Signifi

144、cant SubsidiariesThe Internet innovation business mainly serves customers from funds,securities firms,trusts,futuresbrokers,insurers,emerging and offshore financial institutions,etc.Its main core products are one-stopcloud service solutions,and IaaS+PaaS+SaaS layer cloud computing services,which are

145、 configured toprovide cloud-based investment trading,valuation,custody&clearing,investment supervision,informationdisclosure,performance evaluation&risk management,algorithmic trading,and other,services.Gildata.In 2021,Gildata continued to strengthen and expand its foundational data,comprehensivelyi

146、mproving its investment research and risk data,and actively explored and implemented its digitalintelligence application capabilities in order to achieve continuing growth in its data services(whichremained positive)and organic development of end products(making breakthroughs).In terms ofinvestment

147、research,Gildata improved its terminal emphasizing key areas,made decisive efforts in AI forresearch and investment,and took its national-level financial information service terminal project throughacceptance testing to successfully delivery.In terms of wealth management,innovation in and iterativeu

148、pgrading of AI Xiaofans digital intelligence components continued,permitting rapid contract growth.Interms of capital management and risk control,Smart Eye products took root and blossomed,steadilyopening up the market.Hundsun Ayers.In 2021,Hundsun Ayers continued to maintain its leading position in

149、 Hong Kong,acquiring 18 new retail product line customers and exceeding HK$200 million in revenues.With itsnext-generation securities trading and clearing system with UF3.0 system design and architecturalunderpinning,Hundsun Ayers had made positive progress in the Hong Kong market,contracting with e

150、ightcustomers in a single year.Hundsun Ayers was also active in the prime brokerage and buy-side businesses,and developed new products such as PB/ESOP.Jingteng Network.In 2021,Jingteng Network transformed itself from a traditional software systemconstruction developer into a business solution provid

151、er.Maintaining stability in its original businesses,the company continued to focus on terminal construction,providing terminal product services such as2021Annual Report19/243APP/PC/Web/Html5/applets,product tool services such as cloud components/conditional orders/accountanalysis,and wealth manageme

152、nt services such as investment advisory/wealth management malls,thusachieving contract growth and market development in terms of new customers for all business segments.Jingteng Network made a breakthrough in its innovation business,helping brokers provide targetedcustomer and business operations se

153、rvices based on its“terminal construction to data enrichment”marketstrategy,and by providing integrated intelligent operation services.By further serving investors and helpingemployees in business development from brokers perspective,adoption of a new BPO business modelpermitted the production of ne

154、w business capabilities.Cloudyee Network.In 2021,Cloudyee Network enhanced its core competitiveness by adhering to itsquality-first policy,planning and implementing one-stop wealth management solutions,and developing anew generation of popular core products and services.Operationally,the scale of SA

155、AS services and assetmanagement revenues maintained solid growth,exceeding the same period in the previous year,marketcoverage continued to expand,customers operational capacity improved,and regular customers output andrenewal rates reached new highs.In terms of solutions,progress in the planning of

156、 a one-stop wealthmanagement service business coverage and technology platform went well.Existing products architecturewas upgraded,and the overall quality of products/services was improved.In new products and services,promotion of Institutional Trading System/Easy Connect products covering new indu

157、stries proceededsmoothly.The preliminary verification of AMS integration and operation was completed.Hundsun iBontal.In the first quarter of 2021,Hundsun Technologies acquired Hundsun iBontal,aprovider of end-to-end IT services for insurance industry solutions.After a year of integration anddevelopm

158、ent,the company was progressing rapidly.In terms of product research and development,Hundsun iBontal completed the transfer of its property and casualty insurance system core technicalframework onto Hundsuns LIGHT platform.The functions of the core non-vehicle insurance system wereupgraded iterative

159、ly,with third-party testing showing that its quality had reached an industry-leading level.Hundsun iBontal strengthened its life insurance solutions,winning the contract for King Dragon Lifes coreproject.In terms of capital operations,Hundsun iBontal successfully contracted with Trust Mutual Life,it

160、sfirst strategic investor.IV.ANALYSIS OF CORE COMPETITIVENESS DURING THE REPORTING PERIODApplicable NotApplicableLeading product technology.The goal of the Company is to become a leading one-stop solutionprovider involved in the development and implementation of industry technical standards and qual

161、itystandards.At present,the Companys products are industry-leading in terms of technology.The Companyscore trading system for the securities industry,investment management system for buy side industries suchas funds,comprehensive wealth management system for banking,and TA system for relevant fields

162、 are allhighly regarded by customers.These advantages allow the Company to benefit to some degree fromeconomies of scale,improving marginal returns.At the same time,the Company is also continuouslyexpanding its new areas of business,such as in bond market issuance networks and core insurance systems

163、,via mergers and acquisitions and the establishment of joint ventures,and is improving its data business,with the aim of gaining a technological lead in those new businesses within a short period.In recent years,the Company has been rapidly catching up with the leading international FinTech giants,n

164、arrowing their2021Annual Report20/243lead to rank 38thin the IDC Fintech Rankings 2021,with an overall upward trend in its ranking.Strong brand influence.The FinTech industry imposes exacting technical requirements.Comparedwith industry entrants,the Company has over 20 years of experience as a going

165、 concern,during which itgained knowledge of customers businesses and accumulated capabilities in providing them withcomprehensive services,making its products highly regarded amongst customers.Moreover,financialinstitutions need for stable,safe,long-term and high-quality services,also implies that c

166、ustomers tend toprefer the products and services of industry-leading technology companies.Outstanding ability in innovation.The Company continuously recruits the industrys top talents andhas built complete R&D and product systems and teams.At present,the Company has 899 employees witha masters degre

167、e or above(including doctoral degrees).In 2021,the Company invested a total ofRMB2.139 billion in R&D,accounting for 38.92%of its revenue,making it an industry-leading enterprisein terms of R&D expenditure.V.MAJOR OPERATIONALPARTICULARS DURING THE REPORTING PERIOD2021Annual Report21/243During the Re

168、porting Period,the Company recorded revenue of RMB5,496,578,624.88,representinganincreaseof31.73%year-on-year.ItsnetprofitattributabletoshareholdersamountedtoRMB1,463,538,930.14,representing an increase of 10.73%year-on-year.(I)Analysis of principal businesses1.Analysis on Changes of Relevant Items

169、in Statement of Profit or Loss and Statement of CashFlowsUnit:YuanCurrency:RMBItemDuring the periodDuring the corresponding periodlast yearChange(%)Revenue5,496,578,624.884,172,645,156.5631.73Cost of sales1,484,602,486.66955,906,825.1055.31Selling and distribution expenses557,934,967.43353,806,789.8

170、957.69General and administrative expenses681,453,467.57539,490,612.3026.31Finance costs-906,045.34-6,942,521.87N/AR&D expenses2,139,296,366.071,496,058,838.3243.00Netcashflowsfromoperatingactivities956,789,306.141,397,902,270.41-31.56Netcashflowsfromoperatingactivities-423,425,969.13-791,305,394.02N

171、/ANetcashflowsfromfinancingactivities-174,082,923.91-550,797,168.68N/AThe change in the revenue is mainly due to the growth of the Companys business during the period.The change in the cost of sales is mainly due to the increase in the Companys business and labor costs.The change in selling and dist

172、ribution expenses is mainly due to the increase in employees and theirremuneration during the period.The change in general and administrative expenses is mainly due to the increase in employeesremuneration during the period.The change in finance costs is mainly due to the increase in exchange loss a

173、nd interest expense during theperiod compared with the same period last year.The change in R&D expenses is mainly due to the increase in employees and their remuneration during theperiod.The change in net cash flows from operating activities is mainly due to the significant increase in theremunerati

174、on paid to employees during the period compared with the same period last year.The change in net cash flows from investing activities is mainly due to the decrease in cash paid by theCompany for investment during the period compared with the same period last year.The change in net cash flows from fi

175、nancing activities is mainly due to the increase in bank loans obtainedby the Company during the period.Detailed explanation of major changes in the Companys business type,profit composition or profit sourceduring the periodApplicable NotApplicable2.Analysis on revenue and costsApplicable NotApplica

176、bleSee below for details(1).Performance of principal businesses by segment,by product,by region and by sales model2021Annual Report22/243Unit:YuanCurrency:RMBPrincipal Businesses by SegmentBy segmentRevenueCost of salesGross profitmargin(%)Increase/decrease in revenuefrom last year(%)Increase/decrea

177、se inthe cost ofsales from lastyear(%)Increase/decrease inthe gross profit marginfrom last year(%)Big retail ITbusiness2,111,138,786.79 642,111,363.2669.5839.7975.58Decreased by 6.20%Big assetmanagement ITbusiness1,706,117,915.25 304,358,188.0682.1639.8478.12Decreased by 3.84%Data risk andinfrastruc

178、ture ITbusiness353,668,302.36 151,359,671.5257.2018.5960.11Decreased by 11.10%Banking andindustrial ITbusiness353,719,292.45 181,466,873.4248.70-2.5412.67Decreased by 6.92%Internet innovationbusiness803,916,108.12 160,308,152.4380.0633.6945.56Decrease by 1.62%Non-financialbusiness163,451,862.4744,46

179、9,792.5872.79-6.47-16.36Increased by 3.21%Total5,492,012,267.44 1,484,074,041.2772.9831.7855.32Decreased by 4.09%Principal Businesses by ProductBy productRevenueCost of salesGross profitmargin(%)Increase/decrease in revenuefrom last year(%)Increase/decrease in the costof sales fromlast year(%)Increa

180、se/decrease inthe gross profit marginfrom last year(%)Revenue fromsoftware5,408,195,325.14 1,420,423,285.4173.7432.1459.98Decreased by 4.57%Revenue fromhardware66,608,294.3060,291,366.479.482.81-0.67Increased by 3.16%Revenue fromscience park17,208,648.003,359,389.3980.4872.87-51.31Increased by 49.79

181、%Total5,492,012,267.44 1,484,074,041.2772.9831.7855.32Decreased by 4.09%Principal Businesses by RegionBy regionRevenueCost of salesGross profitmargin(%)Increase/decrease in revenuefrom last year(%)Increase/decrease in the costof sales fromlast year(%)Increase/decrease inthe gross profit marginfrom l

182、ast year(%)Mainland China5,268,862,680.55 1,440,685,304.5572.6633.4058.89Decreased by 4.38%Overseas223,149,586.8943,388,736.7280.562.37-10.97Increased by 2.92%Total5,492,012,267.44 1,484,074,041.2772.9831.7855.32Decreased by 4.09%Explanation on the performance of principal businesses by segment,by p

183、roduct,by region and by salesmodelSee Section Business Development during the Reporting Period for details.(2).Analysis Statement of Production and Sales VolumeApplicable NotApplicable(3).Performance of Major Procurement Contracts and Sales ContractsApplicable NotApplicable(4).Statement of CostAnaly

184、sisUnit:YuanCost by Segment2021Annual Report23/243By segmentCostcomponentsAmount for thecurrent periodProportion ofamountfor thecurrentperiod intotal cost(%)Amount for thesame period lastyearProportionof amountfor the sameperiod lastyear in totalcost(%)Change inthe amountfor thecurrentperiodcompared

185、with thesame periodlast year(%)DescriptionBig retail ITbusinessCost of sales642,111,363.2643.26365,705,114.1838.2875.58Mainly due tothe increase inthe cost of laborfor businessgrowth and thegrowth ofnewly acquiredbusinesses in2021.Big assetmanagementIT businessCost of sales304,358,188.0620.51170,867

186、,764.3717.8878.12Mainly due tothe increase inthe cost of laborfor businessgrowth and thegrowth ofnewly acquiredbusinesses in2021.Data risk andinfrastructureIT businessCost of sales151,359,671.5210.2094,536,256.199.8960.11Mainly due tothe increase inthe cost of laborfor businessgrowth.Banking andindu

187、strial ITbusinessCost of sales181,466,873.4212.23161,062,185.9816.8612.67InternetinnovationbusinessCost of sales160,308,152.4310.80110,132,936.6411.5345.56Mainly due tothe increase inthe cost of laborfor businessgrowth.Non-financialbusinessCost of sales44,469,792.583.0053,164,919.315.56-16.36Total1,

188、484,074,041.27100.00955,469,176.67100.0055.32Cost by ProductBy productCostcomponentsAmount for thecurrent periodProportion ofamountfor thecurrentperiod intotal cost(%)Amount for thesame period lastyearProportionof amountfor the sameperiod lastyear in totalcost(%)Change inthe amountfor thecurrentperi

189、odcomparedwith thesame periodlast year(%)DescriptionRevenue fromsoftwareCost of sales1,420,423,285.4195.71887,872,191.3192.9359.98Mainly due tothe increase inthe cost of laborfor businessgrowth and thegrowth ofnewly acquiredbusinesses in2021.Revenue fromhardwareCost of sales60,291,366.474.0660,697,1

190、91.126.35-0.67Revenue fromscience parkCost of sales3,359,389.390.236,899,794.240.72-51.31Mainly due tothe decrease in2021Annual Report24/243the cost of salesas a result of thedecrease inrevenue fromthe science parkrental business.Total1,484,074,041.27100.00955,469,176.67100.0055.32(5).Changes in the

191、 Scope of Consolidation due to Changes in the Shareholdings of MajorSubsidiaries during the Reporting PeriodApplicable Not Applicable(6).Major Changes or Adjustments in the Companys Business,Products or Services during theReporting PeriodApplicable Not Applicable(7).Key Customers and Key SuppliersA.

192、Key Customers of the CompanySales to the Companys top five customers amounted to RMB248,922,600,accounting for 4.53%of thetotal sales in the year.Among the sales to the top five customers,the sales to their affiliates amounted toRMB0,accounting for 0%of the total sales in the yearDuring the Reportin

193、g Period,there were cases in which sales to a single customer exceed 50%of the total,there are new customers among the top five customers,or the Company is heavily dependent on a fewcustomersApplicable Not ApplicableB.Key Suppliers of the CompanyPurchases from the Companys top five suppliers amounte

194、d to RMB 201,782,400,accounting for 21.83%of the total purchases in the year.Among the purchases to the top five customers,the purchases to theiraffiliates amounted to RMB40,892,500,accounting for 4.42%of the total purchases in the yearDuring the Reporting Period,there were cases in which purchases

195、to a single supplier exceed 50%of thetotal,there are new suppliers among the top five suppliers,or the Company is heavily dependent on a fewsuppliersApplicable Not Applicable3.ExpenseApplicable NotApplicableUnit:YuanCurrency:RMBItemDuring the periodDuring thecorrespondingperiod last yearChange(%)Rea

196、sons for changeSelling and distributionexpenses557,934,967.43353,806,789.8957.69Mainly due to the increase in employeesand their remuneration during the periodGeneral andadministrative expenses681,453,467.57539,490,612.3026.31Mainly due to the increase in employeesand their remuneration during the p

197、eriodR&D expenses2,139,296,366.071,496,058,838.3243.00Mainly due to the increase in employeesand their remuneration during the periodFinance costs-906,045.34-6,942,521.87N/AMainly due to the increase in exchangeloss and interest expense during theperiod compared with the same periodlast year.2021Ann

198、ual Report25/2434.R&D Investment(1).Statement of R&D InvestmentApplicable NotApplicableUnit:YuanExpensed R&D investment for the current period2,139,296,366.07Capitalized R&D investment for the current period0Total R&D investment2,139,296,366.07Proportion of total R&D investment in revenue(%)38.92Pro

199、portion of capitalized R&D investment in totalR&D investment(%)0(2).R&D PersonnelApplicable NotApplicableNumber of R&D personnel6,065Proportion of the number of R&D personnel in the headcount(%)45.6Educational Level of R&D PersonnelEducational levelNumberDoctors Degree8Masters Degree891Bachelors Deg

200、ree4,922Junior college238High school or below6Age Composition of R&D PersonnelAge compositionNumberUnder the age of 30(excluding 30)3,490Age 30-40(including 30 and excluding 40)2,383Age 40-50(including 40 and excluding 50)186Age 50-60(including 50 and excluding 60)5Age 60 or above1(3).DescriptionApp

201、licable NotApplicableThe Company continuously recruits top talents in the industry and has built various sound systems anddedicated teams for research and development as well as its products.In 2021,the Company invested atotal of RMB2.139 billion in R&D,accounting for 38.92%of revenue.The Company is

202、 a top-rankedenterprise in terms of R&D expenses.(4).Reasons for Significant Changes in the Composition of R&D Personnel and Impact on theCompanys Future DevelopmentApplicable NotApplicable5.Cash FlowApplicable NotApplicableUnit:YuanCurrency:RMBItems in the statement of cashflowsDuring the periodDur

203、ing thecorrespondingperiod last yearChange(%)Reasons for change2021Annual Report26/243Sub-total of cash inflows fromoperating activities6,193,014,080.295,350,358,436.1615.75Mainly due to the increase in cashreceived from sales of goods andprovision of services during theperiod compared to the same p

204、eriodlast year.Sub-total of cash outflows foroperating activities5,236,224,774.153,952,456,165.7532.48Mainly due to the increase inemployees and their remunerationand the increase in the purchase ofgoods and receipt of services duringthe period compared to the sameperiod last year.Net cash flows fro

205、m operatingactivities956,789,306.141,397,902,270.41-31.56Mainly due to the fact that theincrease in cash inflows fromoperating activities was less than thatin cash outflows for operatingactivities during the period.Sub-total of cash inflows frominvesting activities5,762,984,326.056,211,972,149.70-7.

206、23Mainly due to the decrease ininvestment returns during the periodcompared to the same period lastyear.Sub-total of cash outflows forinvesting activities6,186,410,295.187,003,277,543.72-11.66Mainly due to the decrease in cashpaid for investments during theperiod compared to the same periodlast year

207、.Net cash flows from operatingactivities-423,425,969.13-791,305,394.02N/ASub-total of cash inflows fromfinancing activities1,923,543,622.44523,466,670.28267.46Mainly due to the increase in bankloans during the period compared tothe same period last year.Sub-total of cash outflows forfinancing activi

208、ties2,097,626,546.351,074,263,838.9695.26Mainly due to the share repurchaseand the increase in bank loanrepayment during the periodcompared to the same period lastyear.Net cash flows from financingactivities-174,082,923.91-550,797,168.68N/ANet increase in cash and cashequivalents353,405,536.9452,096

209、,797.72578.36Mainly due to the decrease in netcash outflows for investing activitiesand financing activities during theperiod compared to the same periodlast year.(II)Significant Changes in the Profit from Non-Principal BusinessApplicable Not ApplicableUnit:YuanCurrency:RMBItemDuring the periodDurin

210、g thecorrespondingperiod last yearChange(%)DescriptionGain from changes infair value414,401,157.02103,091,491.83301.97Mainlyduetothesignificantchanges in the fair value of theCompanys financial assets at fairvalue during the period.Investment income275,837,269.79584,205,393.33-52.78Mainly due to the

211、 increase in gainsgenerated from the disposal of theCompanyssubsidiary,LuofengNetwork.(III)Analysis ofAssets and LiabilitiesApplicable NotApplicable1.Assets and Liabilities2021Annual Report27/243Unit:YuanItemAmount at theend of thecurrent periodProportion ofamount at theend of thecurrent periodin to

212、tal assets(%)Amount at theend of theprevious periodProportion ofamount at theend of thepreviousperiod in totalassets(%)Year-on-yearchange(%)DescriptionCash and bankbalances1,727,704,846.6014.30 1,374,842,591.2413.7925.67No significantchangesHeld-for-tradingfinancial assets1,991,523,094.7416.49 2,723

213、,350,172.0427.31-26.87No significantchangesAccounts receivable762,916,207.506.32523,273,534.515.2545.80Mainly due to thegrowth of theCompanysbusiness and theincrease inaccountsreceivable fromsubsidiaries newlyincluded in thescope ofconsolidationduring the period.Inventories466,992,190.193.87351,690,

214、935.903.5332.78Mainly due to theincrease inexecutory costs asa result of theincrease inemployees andtheir remunerationduring the period.Other debtinvestments65,681,018.230.5483,845,382.740.84-21.66No significantchangesLong-term equityinvestments1,110,946,777.179.20738,974,733.437.4150.34Mainly due t

215、o theCompanysinvestment inNanjing Pengxiand its subsidiaryHundsun HoldingsLimitedsinvestment inN2N CONNECTBERHAD duringthe period.Other non-currentfinancial assets2,981,720,276.8624.68 2,229,463,162.1622.3633.74Mainly due to theincrease innon-currentfinancial assetspurchased by theCompany duringthe

216、period.Investmentproperties127,524,968.931.06111,411,248.791.1214.46No significantchangesFixed assets1,679,515,491.9513.90472,506,719.884.74255.45Mainly due to thetransfer of theHundsun CloudProduction Baseto fixed assets.Construction inprogress26,357,513.900.22732,254,664.287.34-96.40Mainly due to

217、thetransfer of theHundsun CloudProduction Baseto fixed assets.Right-of-use assets32,023,105.440.27N/AMainly due to theimplementation of2021Annual Report28/243the new leasingstandards duringthe period.Intangible assets376,460,020.433.12161,012,651.891.61133.81Mainly due to thepurchase ofintangible as

218、setsfrom abroadduring the period.Goodwill367,492,126.983.04312,158,890.503.1317.73No significantchangesDeferred income taxassets163,436,491.511.3571,410,701.280.72128.87Mainly due to theinconsistencybetween theCorporate IncomeTax Law and thenew incomestandards.Other non-currentassets112,816,169.610.

219、93441,999.000.0025,424.08Mainly due to thepayment ofSummit softwareto Finastra by thesubsidiary,CloudwingNetwork.Short-termborrowings178,028,314.111.4746,718,265.900.47281.07Mainly due to theincrease inborrowings frombanks during theperiod.Accounts payable503,758,715.184.17192,172,938.771.93162.14Ma

220、inly due to theincrease in thepayment tosuppliers forHundsun CloudProduction Baseduring the periodcompared with theend of theprevious year.Contract liabilities3,203,414,609.6926.52 3,107,149,920.4431.163.1No significantchangesEmployeecompensationpayable774,996,501.716.42647,448,189.726.4919.70No sig

221、nificantchangesTaxes payable196,064,942.411.62187,413,250.401.884.62No significantchangesOther payables170,804,176.791.41128,629,520.861.2932.79Mainly due to thepre-receipt ofequity disposalfrom thesubsidiaryHangzhou Xingluduring the period.Current portion ofnon-currentliabilities154,496,614.611.28N

222、/AMainly due to thecurrent portion oflong-term bankborrowings duringthe period.Other currentliabilities305,258,151.462.53305,258,151.463.060No significantchangesLong-termborrowings228,454,065.701.89206,090,358.062.0710.85No significantchangesDeferred income taxliabilities68,201,491.050.5642,478,589.

223、070.4360.55Mainly due to thesignificantchanges in the fair2021Annual Report29/243value of theCompanysfinancial assets atfair value duringthe period.2.OverseasAssetsApplicable Not Applicable(1)Asset scaleIncluding:overseas assets were 822,731,972.19(Unit:Yuan Currency:RMB),accounting for 6.82%of thet

224、otal assets.ItemReasonAsset scaleLocationOperationpatternControlmeasures tosafeguardasset securityRevenueProportionofoverseasassets intotalassets(%)Whetherthere issignificantimpairmentriskJapan HundsunSoftware Inc.Establishedby theCompany43,087,407.06JapanAutonomousoperationCorporategovernance,finan

225、cialmanagement,auditregulatory,performanceassessment635,919.610.36 NHundsunHoldingsLimitedEstablishedby theCompany726,627,786.49HongKongAutonomousoperationCorporategovernance,financialmanagement,auditregulatory,performanceassessment54,093,813.836.02 NHundsunIntercontinentalHoldings(HK)LimitedEstabli

226、shedby theCompany41,065,733.06HongKongAutonomousoperationCorporategovernance,financialmanagement,auditregulatory,performanceassessment29,468.710.34 NHundsun IHSMarkit China(Hong Kong)TechnologiesLimitedEstablishedby theCompany1,059,893.93HongKongAutonomousoperationCorporategovernance,financialmanage

227、ment,auditregulatory,performanceassessment-300,732.020.01 NGenSysTechnology(International)LimitedBusinesscombinationnot undercommoncontrol10,891,151.65HongKongAutonomousoperationCorporategovernance,financialmanagement,auditregulatory,performanceassessment-1,185,270.310.09 N(2)Notes to the High Propo

228、rtion of OverseaAssetsApplicable Not Applicable3.Restriction on MajorAssets as at the End of the Reporting Period2021Annual Report30/243Applicable Not ApplicableUnit:YuanItemCarrying amount at the end of the periodReasonCash and bank balances4,270,755.00 Guarantee depositIntangible assets73,153,291.

229、09 Pledged to secure bank borrowingsConstruction in progress25,139,995.40 Pledged to secure bank borrowingsFixed assets1,117,020,509.26 Pledged to secure bank borrowingsOther debt investments65,681,018.23 Pledged to secure bank borrowingsTotal1,285,265,568.984.Other notesApplicable Not Applicable(IV

230、)Analysis of the Industry Operation InformationApplicable Not ApplicablePlease refer to Section Discussion and Analysis on Business Operations for details.(V)Analysis of InvestmentsOverallAnalysis of External Equity InvestmentsApplicable Not ApplicablePlease refer to the M&A and Investment in Sectio

231、n Discussion and Analysis on Business Operationsfor details.1.Major equity investmentApplicable NotApplicableUnit:10,000 yuan Currency:RMBInvesteePrincipal businessInvestmentcostShareholdingratio at the endof the period(%)Source of fundsInvestmentprofit or lossduring theperiodLawsuitinvolved ornotN2

232、N CONNECTBERHADProvideOTCBBandmarketingintelligenceservices for brokers inSoutheast Asia15,868.4023.657Self-ownedcapital450.23 NNanjing PengxiEquity InvestmentCenter(L.P.)Equity investment12,000.0040Self-ownedcapital-331.57 N2.Major non-equity investmentApplicable NotApplicable3.Financial assets at

233、fair valueApplicable Not ApplicableUnit:10,000 yuan Currency:RMBItemInitialinvestmentcostPurchaseduring theReportingDisposalduring theReportingClosingbalanceClosingbalanceInvestmentincomeChanges infair value2021Annual Report31/243PeriodPeriodStocks21,29072,58355,72238,15065,60178124,316Funds50,36974

234、,10334,79089,68290,3972,2271,759Trusts257,578232,173380,608109,142146,9456,62915,813Others2,9253,7802,0204,6856,039052Financialbonds8,1601,8396,3216,568266Debtinstruments2,8002,800-318-88Financialproducts27,245109,70058,07578,87078,8702,898Equityinstruments91,46521,6323,479109,618109,4722,063Total46

235、1,831513,970539,333436,469503,89214,54641,8524.Specific progress of major asset restructuring and integration during the Reporting PeriodApplicable NotApplicable(VI)Disposal of MajorAssets and EquityApplicable Not Applicable(VII)Analysis of Major Companies Controlled and Invested in by the CompanyAp

236、plicable Not ApplicableUnit:10,000 yuan Currency:RMBFull company nameNature ofbusinessRegisteredcapitalTotal assetsNet assetsRevenueNet profitHangzhou HundsunCloud InvestmentHolding Co.,Ltd.Industrialinvestment16,500.0054,450.1122,148.591,654.79850.78Japan Hundsun SoftwareInc.SoftwareJPY 7,850.004,3

237、08.742,023.685,188.95-213.63Hangzhou CloudyeeNetwork TechnologyCo.,Ltd.Software10,000.0023,563.5316,408.3314,207.266,005.21Hundsun HoldingsLimitedInvestmentmanagementHKD 10,000.0072,662.7858,123.7217,160.175,428.01Hangzhou CloudbrokerNetwork TechnologyCo.,Ltd.Software5,176.507,678.013,673.924,810.88

238、-235.75Hangzhou CloudwingNetwork TechnologyCo.,Ltd.Software46,606.1139,736.4133,436.922,929.41-1,143.81Hangzhou HundsunWengine NetworkTechnology Co.,Ltd.Software1,250.0020,787.1110,882.209,243.125,266.35Hangzhou Xinglu EquityInvestment Partnership(L.P.)Investmentmanagement24,100.0010,560.046,413.87-

239、422.82Zhejiang JingtengNetwork TechnologyCo.,Ltd.Software5,428.5811,927.406,131.8811,791.57148.23Wuxi Xinglu TianchengInvestment ManagementPartnership(L.P.)Investmentmanagement30,100.002,402.512,402.51-347.67Shanghai Gildata IncSoftware12,250.0026,412.479,820.5429,062.17851.582021Annual Report32/243

240、Full company nameNature ofbusinessRegisteredcapitalTotal assetsNet assetsRevenueNet profitBusiness IntelligenceInfo.Tech.(Hangzhou)Co.,Ltd.Software2,793.587,849.763,263.747,463.3565.44Shanghai Genus-FinanceInformation TechnologyCo.,Ltd.Software2,122.039,353.746,717.235,158.58484.22Nanjing XingchengE

241、quity InvestmentPartnership(L.P.)Investmentmanagement30,300.0029,532.7729,532.77-950.60Hundsun&IHS MarkitChina Technologies Co.,Ltd.Software7,000.005,453.095,271.4021.28-1,024.59Hundsun iBontal(Guangdong)TechnologyCo.,Ltd.Software8,000.008,980.726,516.428,092.43-3,393.00Zhejiang XunchangWendao Netwo

242、rkInformation TechnologyCo.,Ltd.Software5,000.004,201.323,606.21440.16-1,393.79Shanghai Dworld AITechnology Co.,Ltd.Software2,161.004,928.604,511.62632.58-366.30Shenzhen RicequantTechnology Co.,Ltd.Software1,140.632,094.961,871.071,409.27-863.17Ant(Hangzhou)FundsSales Co.,Ltd.Finance15,562.00 1,084,

243、851.54100,081.171,212,421.8550,386.38Shenzhen Trade BlazerTechnology Co.,Ltd.Software3,546.9715,098.2714,322.463,393.841,732.86Hundsun CloudFinancing NetworkTechnology Co.,Ltd.Software6,870.0010,780.294,319.2711,461.61-2,929.65(VIII)Status of Structured Entity Controlled by the CompanyApplicable Not

244、 ApplicableVI.DISCUSSIONAND ANALYSIS OF THE COMPANYS FUTURE DEVELOPMENT(I)Industry pattern and trendsApplicable Not ApplicableIn 2021,the Company continued to be suffered from the effects of the COVID-19 pandemic.In thefinancial industry,efforts to combat the pandemic led to the rapid development of

245、 non-contact financialservices,with banks and other financial institutions attempting to provide users with services such asaccount opening,transfer,repayment,investment and wealth management via various electronic channels.The pandemic has thus become a long-term driver of the financial industrys d

246、igital transformation,which is spreading from products and channels to organizational transformation and the upgrading of ITarchitecture.FinTech has gone through three stages of development and is now moving into the digital era.Thefirst stage,during 2000-2010,was the application of electronics in f

247、inance,i.e.,the application oftechnological tools to replace manpower,mainly for handling transactions.Technology was mainly appliedin the form of databases and middleware,and the technical goal of the whole financial industry was theprovision of solutions support for back-office business systems.Th

248、e second stage was the application of Internet technology in finance,which mainly resolveddifficulties in information discovery through technology,focusing on delivery and links.These technical2021Annual Report33/243capabilities and achievements were embodied in the mobile Internet,cloud computing a

249、nd distributedcomputing,with technology playing the role of business driver.The third stage is the advent of financial digitalization.Technology can now replace mental work,focusing mainly on data processing and content analysis,to make final business decisions,and moreattention is being paying to a

250、ctive push.The main technical capabilities and achievements of this stage liein big data,AI,information distribution&delivery,and data security,In this stage,the mutualempowerment of technology and business is making achieving relevant goals via technology or businessalone difficult,with a spiraling

251、 process of technology and business integration more often suitable,i.e.,theprocess of financial digitalization.1.Regulatory environment and trendsOn January 4,2022,the Central Bank issued the FinTech Development Plan(2022-2025),proposingwhole-process integration of digitalization into financial ser

252、vices,the adoption of digital thinking for allstages of business operations and a focus on technology-driven,data-enabled financial innovation viastrengthened application of financial data,for the main purposes of deepening structural reform of thefinancial supply side,accelerating the digital trans

253、formation of financial institutions,strengtheningprudential regulation of FinTech,and thus achieving a leap forward in the industrys overall standards andcore competitiveness by 2025.The Plan aims to emphasize the digital transformation of financialinstitutions and prudential regulation of FinTech,a

254、s well as the solution of problems such as FinTechsunbalanced and insufficient development,so as to promote a sound FinTech governance system and thedeeper integration and more sustainable development of finance and technology,improve digitalinfrastructure,and better meet the new requirements and ta

255、sks presented by the era of the digital economy.2.FinTech patterns and trends in financial institutionsA wide gap in technological investment between foreign and domestic financial institutions remains.Taking the securities industry as an example,in 2020,the average IT investment of top 10 overseasi

256、nvestment banks accounted for 6.6%of their revenue,while that of the top 10 domestic brokers accountedfor only 3.3%.In the same year,the IT investment of global commercial banks J.P.Morgan Chase and Citiaccounted for 8.6%and 9.8%of their revenue respectively,while that of the top six domestic banksa

257、ccounted for only 2.89%on average.As the domestic economy has developed,leading domestic financialinstitutions have gradually caught up with overseas giants in revenue terms,but the wide gap in ITinvestment remains.In the context of deepening financial reform and an increasingly open domesticfinanci

258、al market,domestic financial institutions must continuously increase their FinTech investment inorder to compete with their foreign financial counterparts.2021Annual Report34/243The market competition in FinTech has also become more intense,mainly in the following ways.Leading financial institutions

259、 have continued to increase their investment in independent R&D,and toexport FinTech to the outside world.Leading FinTech companies have been providing technicalempowerment to financial institutions in the form of scenario-enabled technology.And foreign-fundedfinancial institutions have been enterin

260、g Chinas financial market to set up foreign FinTech companies.Facing these new patterns of competition,Hundsun will continue to increase its R&D investment tomaintain a leading position in the industry,and strengthen cooperative innovation,building innovation labstogether with customers in order to

261、achieve mutual benefit and win-win results3.Development trends in new technologiesHundsun,together with a number of financial institutions,released the FinTech Trends Report 2022,thefirst such report addressed to the industry analyzing and forecasting new technological trends in data,AI,efficiency a

262、nd security.Data:Big data platforms are gradually developing from application in projects/departments toapplication across enterprises;open-source and domestic databases are gradually being applied to corefinancial systems,and NoSQL databases are becoming increasingly dominant;privacy enhancementtec

263、hnologies are helping the data asset ecosystem move towards federalization.AI:AI algorithms are increasingly highly-engineered and multi-modality,with reduced resource and datarequirements ushering financial digital intelligence into a new phase.The integration of RPA and AItechnology is expanding t

264、he scenarios covered by digital operation,and many digital employees are setto be put to use in financial institutions.The development of AI for research and investment requires“one core and three levels of integration”i.e.,core industrial chain knowledge graph technology,plusintegration in terms of

265、 investment&research,data and supply&demand.AIOps will enhance the depthand breadth of financial institutions operation and maintenance through dynamic,optimized insightstrategies.Efficiency:Enterprise-level applications are generally being reconstructed on cloud-native platforms.Achieving high perf

266、ormance and low latency requires the correct combination of hardware and software,leveraging the potential of FPGAs,DPUs,nonvolatile memory,and other hardware.Low-code platformswill become more common as enterprise-level development platforms,permitting rapid innovation.Multi-experience and composab

267、le services will provide the foundation of the digitalized experience.Security:Data security has become core to information security systems,with institutions shifting to2021Annual Report35/243guarantee data asset security compliance via secure operating systems.Zero trust will be the best methodof

268、protecting the financial system in future.The increasingly complex software ecosystem isexacerbating supply chain security risks,with open-source technology becoming a key target ofinformation security protection efforts.As a leading Chinese FinTech company,Hundsun has made rich achievements in the

269、application ofnew technologies as follow.Beginning cooperation with pioneering labs.Based on actual business capability scenarios,pioneeringlabs will actively explore technological,business and integrated innovations that combine domestichigh-end technical achievements,accelerate the implementation

270、of industrial innovation topics andstandards,help to form a consensus on innovation within the industry,and promote the industrys overallprogress.At present,cooperation with pioneer labs includes areas such as the introduction of ITapplication innovation and high-performance ecosystems,incubation of

271、 scenario-based innovation,databases and AI,academic cooperation,research into AI investment,and joint development of businessevent standards.Through its cooperation with pioneering labs,the Company hopes to make cutting-edgetechnologies more suitable for application in the financial industry,finall

272、y permitting realization of theirengineering application within the industry.Databases.Hundsun released its LightDB enterprise database product,completed testing andcertification of its IT application innovation hardware and software platform,and jointly constructed anIT application innovation model

273、 using its next generation TA,initially putting this online in SoochowSecurities.High performance.Hundsun released LDP,a next-generation low-latency,and high-availabilitydistributed technology platform,improving its communications and memory access performance in 2021via platform encapsulation.In Au

274、gust 2021,the LDP platforms end-to-end delay broke through 100ns torank first in the industry.Artificial intelligence.Hundsuns Financial Knowledge Graph Tool Platform 1.0 offers customers alocalized platform implementation providing computing and data services locally.These include equity,suspected

275、actual controller,suspected beneficial owner,persons acting in concert,graph relational dataservices,and group accounts.Blockchain.During the year,Hundsun released two blockchain products,H-BaaS 1.0 and FTCU ChainDigital Asset Platform 1.0 and contracted with 24 customers.It completed the applicatio

276、n of the twoproducts in government and industry,and completed the first blockchain credit financing business.Infuture,in addition to continuing its efforts in existing businesses such as FinTech and supply chainfinance,Hundsun also plans continue to further research blockchain area application scena

277、rios based onregulatory technology.Establishment of Post-Doctoral Research Center.After establishing the Research Center with ZhejiangProvincial Department of Human Resources and Social Security approval,the first batch of postdoctoralresearchers started their research in the Center,which Hundsun is

278、 using as its innovation platform,promoting its overall capacity for scientific research and providing greater technological empowermentto Chinas capital market.In 2021,Hundsuns first postdoctoral researcher at the Center completedhis/her research,with the result,A Cross-Sentence Event Detection Net

279、work,selected for the Annual2021Annual Report36/243Meeting of the Association of Computational Linguistics(ACL).At the same time,Hundsuns doctoralteam also obtained achievements in the macro investment research,financial risk management and stockrisk research areas.(II)Company development strategies

280、Applicable Not Applicable1.Customer satisfaction first,product quality firstCustomer first,quality first”was Hundsuns original vision and remains its strategic cornerstone forfuture development.Hundsun was founded on the basis of customers needs and has grown together withits customers.Hundsun can o

281、nly succeed by satisfying customers,depending on excellent products.Hundsuns aim is to improve its products,service capability and organizational capability in all aspects,including strategic planning,organizational optimization,process systems and team membership,to trulyembody its“customer first”c

282、ore values,exceed customer expectations,and develop into a world-leadingFinTech company.2.Product-oriented strategyThe Company will continue to focus on its product-oriented strategy to maintain its core product linesoverall leadership and the comprehensive strength of its competitive product lines,

283、to strive for excellencein terms of its product lines,and to expand and strengthen its Bank Insurance Fund(BIF)business andinternational business.3.Digital intelligence strategyThe Company aims to establish the top brand in data intelligence,promote its construction of marketdata and customer data c

284、enters,and establish technological leadership via digital intelligence in its corebusiness.4.Light strategyHundsun will continue to construct its unified Light technology brand ecosystem to fully empower thedigital transformation of finance via industry leading technologies.In future,the Company wil

285、l continue itsinvestments in cloud-native architecture,low latency systems,hardware and software systems integration,hybrid clouds,low code development,front-end micro-application systems,information technologyapplication innovation industry databases,big data real-time computing,AI in RPA,blockchai

286、n technology,and other cutting-edge technologies.The Company will continue to make the Light technology platformavailable to the industry,issue complete white papers on technical standards,and operate the developerecosystem,to building up a highly influential FinTech technology brand.5.EAAS strategy

287、The Company will focus on developing wealth management cloud and private equity cloud services,data&component subscription services,and wealth management BPO&KPO services,striving toincrease the proportion of revenues derived from its value-added services.(III)Operation planApplicable Not Applicable

288、Based on the Companys new strategic plan and organizational restructuring,together with the outlookfor the market and regulatory policies in 2022,the Companys main business revenues for 2022 arebudgeted to increase by approximately 25%year on year,while costs and expenses for 2022 are budgeted2021An

289、nual Report37/243to increase by approximately 30%year on year.(IV)Potential risksApplicable Not ApplicableThe main risks faced by the Company are policy and regulatory risks,market competition and HRrisks,and technological risks.Financial regulatory policies on the one hand have a significant impact

290、 on theCompanys customers business development,in turn affecting their demand and revenue sources,and onthe other hand may affect the Companys efforts to invest in innovative products and technologies,inaddition to the formulation and implementation of the Companys strategies.The Companys response t

291、opolicy and regulatory risks is to“embrace regulation&secure innovation”with a focus on compliance inits construction,and strict control and prevention of operational risks.In terms of market competition and HR risks,the Company mainly faces competition from newmarket players in the industry,such as

292、 niche business competitors and the FinTech subsidiaries oftraditional financial institutions.The competition for outstanding FinTech talents may,in particular,adversely affect the Companys human resources.The Companys responses include strengthening newproduct research and development,improving emp

293、loyees compensation levels,the development of asound performance incentive system and the establishment of a multi-tiered medium and long-termincentive system.In terms of technological risks,due to the rapid development of emerging technology trends,such asAI,blockchain,big data and cloud computing,

294、the Company needs to keep abreast of technological trends,and maintaining sufficient investment in research and development in order to avoid lagging behind.TheCompanys responses include actively monitoring cutting-edge technologies,improving its R&D systemand team,and conducting training on various

295、 new technologies.(V)OthersApplicable Not ApplicableVII.CIRCUMSTANCES OF AND REASONS FOR THE COMPANY FAILING TO MAKEDISCLOSURES IN ACCORDANCE WITH THE RELEVANT STANDARDS FOR SPECIALREASONS,SUCH AS THE NON-APPLICABILITY OF STANDARDS,STATE SECRETS ORTRADE SECRETSApplicable NotApplicableSection IVCorpo

296、rate GovernanceI.EXPLANATION OF CIRCUMSTANCES RELEVANT TO CORPORATE GOVERNANCEApplicable Not ApplicableThrough observing its Customer First,Integrity,Professionalism,Openness,Cooperation&Continuous Growth core values and upholding its mission to Make Finance Easy,Hundsun iscommitted to developing in

297、to the worlds leading FinTech company.Since its establishment,Hundsun hasbeen actively undertaking social responsibility as a corporate citizen and continuously promoting both itsown sustainable development and that of society.In accordance with the relevant national laws andregulations,and with its

298、 Articles of Association,the Company has defined the organizational hierarchy ofthe Board&Supervisory Board,its management&internal departments,staffing,responsibilities&2021Annual Report38/243authority,working procedures,and related requirements.The Company continues to improve its corporategoverna

299、nce structure,standardize its operations and enhance its corporate governance in strict accordancewith the provisions of the Company Law,Securities Law,Rules Governing the Listing of Stocks on theShanghai Stock Exchange and other relevant laws and regulations,as well as the requirements of itsArticl

300、es of Association,Procedural Rules for Shareholders General Meetings,Procedural Rules for BoardMeetings,Procedural Rules for Supervisors Meetings,Management Rules for External Guarantees,Management Rules for Internal Audit and other rules and regulations.(1)Shareholders and shareholders general meet

301、ings.During the Reporting Period,the Companyheld four shareholders general meetings in total.The convening,holding and voting procedures of thesemeetings were in line with the provisions of the Company Law and the Companys Articles of Associationand Procedural Rules for Shareholders General Meetings

302、,with lawyers attending the meetings and issuinglegal opinion attesting to their legality.The Company kept communication channels with its shareholdersopen,treated all shareholders equally,and ensured that shareholders could fully exercise their rights,enjoying their right to be informed and to part

303、icipate in decision-making on major matters.(2)Directors and the Board.The number and composition of the Companys Board meet legal andregulatory requirements,and the Directors are all responsible and diligent.There are a total of 11 directors,including four independent directors;two accounting exper

304、ts,one financial expert and one legal expert(female).The independent directors do not hold positions in the Company other than as director,inaccordance with the relevant regulations.During the Reporting Period,the Company held six board meetings,the convening,holding andvoting procedures of which we

305、re in line with the provisions of the Company Law and the CompanysArticles of Association and Procedural Rules for Board Meetings.The Board has established four specialcommittees,the Strategy&Investment Committee,Audit Committee,Nomination Committee,andRemuneration&Evaluation Committee,and formulate

306、d terms of reference and implementation rules foreach committee designed to fully leverage its professional strengths in order to guarantee the legitimacy,scientific nature and correctness of the Boards collective decisions and reduce the operational risk faced bythe Company.The Board is always eage

307、r to keep up to date with documents issued by the Party CentralCommittee and,during the period during which board meetings were held,based on the recommendationsof the Companys Party Committee,studied documents related to the 10thmeeting of the Central Committeefor Financial and Economic Affairs of

308、the CPC and the Implementation Plan for the High-QualityDevelopment and Construction of a Demonstration Zone for Common Prosperity in Zhejiang.(3)Supervisors and Supervisory Board.The Supervisory Board consists of a Chairman and threemembers,including one employee supervisor(female).During the Repor

309、ting Period,the Company heldfive Supervisory meetings in total,the convening,holding and voting procedures of which were in line withthe provisions of the Company Law,the Companys Articles of Association and Procedural Rules forSupervisors Meetings.The Supervisory Board was able to earnestly perform

310、 its duties and supervise thelegitimacy and compliance of the Companys Directors and Senior Management in the performance of theirduties,safeguarding the legitimate rights and interests of Shareholders.(4)Information disclosure and transparency.The Company fulfills its social responsibilities mainly

311、via ensuring faithful,accurate,timely and complete disclosure of information.In strict accordance with the2021Annual Report39/243regulations relating to information disclosure,the Company makes faithful,accurate,timely and completedisclosures in the form of periodic reports and interim announcements

312、,paying special attention to thedelivery of more effective information to market investors.Since its listing,the Company has increased the efforts relating to the development of its informationdisclosure regulations.Based on actual working requirements,and the relevant CSRC and Shanghai StockExchang

313、e requirements,the Company has developed a series of information disclosure regulations andmanagementmeasures,includingHundsunsRegulationsonInformationDisclosure,HundsunsRegulations on Registration of Insiders Who Have Access to Insider Information,Hundsuns Regulationson Internal Reporting of Signif

314、icant Information,and Hundsuns Regulations on the Management ofExternal Information Reporting and Use.These regulations ensure that all departments and persons incharge fulfill their respective duties and guarantee the unimpeded disclosure of information.In 2021,aseries of rules and guidelines were

315、issued at regulatory level to regulate the operation of the Company andimprove corporate governance.The Company organized study activities in response to the policies andregulations issued by the CSRC and conducted in depth study of newly issued or revised rules such as theMeasures for Administratin

316、g the Information Disclosure of Listed Companies,the Rules Governing theListing of Stocks on Shanghai Stock Exchange,the CSRCs relevant regulatory guidelines,relevantself-regulatory guidelines issued by the Shanghai Stock Exchange,and sample annual and semi-annualreports.The Company increased its pr

317、oactivity of information disclosure,making timely and completedisclosures to the market concerning its business operations and development strategies,and ensured thatthe information disclosed was true,accurate,complete,concise,clear and comprehensible.(5)Investor relations management.The Company att

318、aches importance to investor relationsmanagement and has formulated its Regulations on Investor Relations Management.It receives visits fromindividual investors and institutional investors via its investor hotline,email address open to investors,andSSE E-Interactive platform,and maintains investor r

319、elationships through participation in securitiescompanies exchange summits.During the Reporting Period,the Company directly communicated itsstrategic planning goals and confidence concerning its future sustainable development to investors viaholding its 2020 Earnings Communication Conference and 202

320、1 Semi-annual Earnings CommunicationConference,which allowed investors to learn more about the Company and maintained its relationship withinvestors.The Company strengthens communication with investors via information disclosure andcommunication,increasing investors knowledge of and approval for the

321、 Company,enhancing corporategovernance,maximizing its overall interests,and protecting the legitimate rights and interests of itsinvestors.Whether there are material differences between corporate governance and the provisions of laws,administrative regulations and the CSRC on the governance of liste

322、d companies;if so,the reasons shouldbe givenApplicable Not ApplicableII.SPECIFIC MEASURES TAKEN BY THE CONTROLLING SHAREHOLDER AND ACTUALCONTROLLER TO ENSURE THE INDEPENDENCE OF THE COMPANYS ASSETS,PERSONNEL,FINANCE,DEPARTMENTSANDBUSINESS,ASWELLASTHESOLUTIONS,WORK SCHEDULE AND FOLLOW-UP WORK PLANS A

323、FFECTING THE2021Annual Report40/243COMPANYS INDEPENDENCEApplicable Not ApplicableWhere the Controlling Shareholder,the Actual Controller and other companies under their control areengaged in the same or similar business as the Company,the impact of horizontal competition orsignificant changes in the

324、 horizontal competition facing the Company,solutions adopted,progress andfollow-up solutionsApplicable NotApplicableIII.INTRODUCTION TO SHAREHOLDERS GENERAL MEETINGSession ofmeetingDateMedia in whichresolutions weredisclosedDate of disclosureResolutions2020 annualgeneralmeetingJune 3,June 4,2021The

325、Full Text and Summary of the 2020AnnualReport,the2020AnnualWorkReport of the Board,the 2020 Annual WorkReport of the Supervisory Committee,the2020 Annual Final Accounting Report,theSelf-evaluation Report on Internal Control in2020,the Profit Distribution Plan for 2020,the Proposal on the Further Emp

326、loyment ofPan-China Certified Public Accountants LLPand its Remuneration,and the Proposal onthe Joint Subscription of Nanjing XingdingEquity Investment Partnership(L.P.)by theCompany and its Associated Corporationswereadoptedatthemeetingthroughdeliberation.Details of the above resolutionsare set out

327、 in the Companys AnnouncementNo.2021-027.2021firstextraordinarygeneralmeetingSeptember 14,September 15,2021 The Proposal on the Related Transaction ofProvidingPerformanceGuaranteeofBusiness Contracts for the Subsidiaries,theProposal on the Related Party Transactions ofJointInvestmentinHundsunHolding

328、sLimited by the Company and its AssociatedCorporations,andtheProposalontheElectionofIndependentDirectorswereadopted at the meeting through deliberation.Details of the above resolutions are set out inthe Companys Announcement No.2021-045.2021 secondextraordinarygeneralmeetingNovember 16,November 17,2

329、021The Proposal on Revising the Investment andManagement Measures of Key EmployeesBuyingSharesinHundsunsInnovativeBusiness Subsidiaries and the Proposal on theElection of Supervisors were adopted at themeeting through deliberation.Details of theaboveresolutionsaresetoutintheCompanys Announcement No.

330、2021-054.2021thirdextraordinarygeneralmeetingDecember 14,December 15,2021TheProposalontheRelatedPartyTransactions of Increasing Investment in theSubsidiaryCloudwingNetworkandtheProposal on the Election of Directors wereadopted at the meeting through deliberation.Details of the above resolutions are

331、set out inthe Companys Announcement No.2021-062.The preferred shareholders with resumed voting rights request for an extraordinary general meetingApplicable Not ApplicableInformation of Shareholders General MeetingsApplicable Not Applicable2021Annual Report41/243All the proposals were not rejected b

332、ut adopted at the above general meetings through deliberation.The convening and holding procedures,the qualification of the convener,the qualification of the attendeesand the voting procedures were in line with the provisions of the Company Law and the CompanysArticles of Association,and the resolut

333、ions made at the meetings were legally valid.2021Annual Report42/243IV.Directors,Supervisors and Senior Management(I)Changes in Shareholding and Remuneration of Directors,Supervisors and Senior Management Currently in Office and Resigned during the ReportingPeriodApplicable NotApplicableUnit:shareNamePosition(Note)GenderAgeDate of termcommencementDate of termexpirationNumber ofshares held atthe be