Long Yuan Technology has been investigated by 8 institutions： the company has always maintained a leading position in the plasma ignition business. On the one hand, it has benefited from the company’s

　　() The Record Form of Investor Relations Activities was released on April 18th. On April 18th, 2024, the company was investigated by eight institutions, including QFII, insurance companies, others, fund companies, securities companies and Sunshine private equity institutions. The main contents of investor relations activities are introduced:

　　Q: The company released the performance forecast for the first quarter of 2024. Does this forecast have a relatively clear guide for the performance of this year?

　　A: Judging from the current operating situation in the first quarter, the income and profit are better than the same period last year. However, the annual operating situation should be based on the actual situation.

　　Q: In 2023, the company’s fuel-saving business orders were mostly infrastructure projects or renovation projects.

　　A: Judging from the income structure in 2023, the plasma ignition business is still dominated by renovation projects. Judging from the signing situation, the plasma ignition business is still dominated by renovation projects. Judging from the pace of thermal power infrastructure, the number of infrastructure projects will gradually increase in 24-25 years.

　　Q: Is it possible to increase the price of the company’s related equipment?

　　A: As far as the current plasma ignition business is concerned, the average price of orders in 22 and 23 years has little fluctuation. The company has always maintained a leading position in the plasma ignition business. On the one hand, it has benefited from the company’s continuous technology research and development, design update and product iteration, and achieved lightweight, miniaturization and intelligence through product optimization; On the other hand, the company strictly controls the production and manufacturing costs, and the cost control ability is constantly improved. At the same time, the company strengthens procurement management and reasonably controls procurement costs. In the future, the company will continue to do the above work well.

　　Q: What’s the proportion of national energy group in our income at present?

　　A: In 2022, the revenue of products and business of National Energy Group accounted for 63.91%, and in 2023, it accounted for 52.74%, showing a downward trend, indicating that our orders outside the system are increasing.

　　Q: Does the central enterprise group to which the company belongs put forward the task of market value management?

　　A: the State Council SASAC has continuously strengthened and optimized the performance appraisal of central enterprises. Among them, the key requirements include improving core competitiveness, giving play to the supporting role of scientific and technological innovation and carrying out market value management assessment of listed companies. As a listed company controlled by central enterprises, the company actively responded to the call of SASAC and group companies, and took many measures in independent research and development, improving quality and efficiency, corporate governance, practicing ESG and returning shareholders, and achieved positive results.

　　Q: What level of the company’s future profit distribution may be maintained?

　　A: According to the profit distribution policy in the Articles of Association, we will try our best to share the company’s development achievements with the majority of shareholders in the form of cash dividends while insisting on doing all kinds of business work well.

　　Q: Does the company expect flexibility transformation and energy-saving transformation market to have room for growth in the future?

　　A: The capacity of units that need to complete the linkage of three reforms during the 14 th Five-Year Plan period is still surplus, and this part is the current stock market. After the flexibility transformation, it brings some new problems to the overall operation of the unit, and it also needs to meet the needs of the unit for flexible peak shaving, coal consumption reduction and emission reduction. This needs to be systematically solved by technical upgrading, solving the pain points of customers and bringing market opportunities to the company.

　　Q: In recent years, the flexibility transformation of units is the main demand of the market. From the company’s feeling, is this part of the market nearing the end or is there still room for further development?

　　A: The purpose of flexibility transformation is to better absorb new energy and increase the regulation capacity of the power grid. With the gradual implementation of China’s "double carbon" goal, the installed capacity of new energy is still increasing significantly, and the number of thermal power units supporting it is still increasing. The flexible transformation of thermal power units needs to be deepened continuously. However, with the increasing flexibility of the unit, the economy, safety and stability of the unit are facing some new problems, which need to be solved systematically by technical upgrading, which is also one of the directions of the company’s efforts in the future. After the unit meets the flexibility transformation, it is still necessary to do a good job in energy saving and waste heat utilization, and there is also market space.

　　Q: What is the order volume of the company’s three-reform linkage project?

　　A: Because the order of the three-reform linkage project involves a wide range of transformation and the transformation content and supply scope are different, the order volume may range from several million yuan to hundreds of millions of yuan.

　　Q: Could you tell me about the company’s confirmation of deferred income tax assets?

　　A: In 2015 and 2016, the company’s financial books suffered losses for two consecutive years, and the taxable income calculated according to the tax law was negative; From 2017 to 2021, although the company’s financial books were continuously profitable, the taxable income calculated according to the tax law in each year was still negative. Based on the production plan, sales plan, market forecast and other materials mastered at that time, and based on the principle of prudence, the company believes that the possibility of realizing enough taxable income to make up for losses within the time limit stipulated by the tax law is not enough to confirm deferred income tax assets according to the provisions of the Accounting Standards for Business Enterprises. In October 2023, the company compiled the profit forecast report for 2023-2028 according to the audited financial statements of 2021 and 2022 and the actual operating performance from January to September 2023, combined with the company’s production plan, sales plan, investment plan, financing plan and other relevant information, and following the principle of prudence. According to the profit forecast report, the company believes that the possibility that the company can realize enough taxable income that can be used to make up for the losses within the loss compensation period stipulated by the tax law meets the conditions for recognizing deferred income tax assets in accounting standards. Therefore, in 2023, the company recognized the above-mentioned recoverable losses as deductible temporary differences and recognized deferred income tax assets.

　　Q: Why did the company’s net interest rate increase in the fourth quarter?

　　A: The fourth quarter is usually the peak season for revenue confirmation of the company in a year, including some high-tech projects in Mao Lijiao. Operating expenses are relatively balanced in each quarter, so the net interest rate in the fourth quarter has increased.

　　Q: Did the company’s expenses change in the first quarter of 2024?

　　A: Compared with the first quarter of last year, the staff size of the company has not changed, and the expenses will not change significantly.

　　Q: Why did the gross profit margin of the company’s fuel-saving business increase in 2023?

　　A: First, the income structure of fuel-saving business has changed, and the income of spare parts with relatively high gross profit margin has increased. Second, the company continues to do a good job in technology research and development and product upgrading. Third, the company continued to strengthen design optimization, strictly control manufacturing costs, improve cost control capabilities, and improve the gross profit margin of fuel-saving business.

　　Q: Will the gross profit margin of spare parts change in the future?

　　A: From the first quarter of this year, the price of metal needed for manufacturing spare parts continues to rise, which will affect the gross profit margin of spare parts.

　　Q: Why did the company’s spare parts increase in 2023?

　　A: The main reason is that with the improvement of the penetration rate of plasma ignition technology, the number of units served by the company continues to increase, and the sales volume of spare parts increases accordingly. At the same time, the company continues to strengthen the quality of after-sales service, improve the after-sales service system, and strive to improve customer satisfaction and increase customer stickiness.

　　Q: What are the company’s spare parts?

　　Answer: It mainly includes cathode and anode related to plasma ignition, burner, fire detector, etc., and some spare parts for low nitrogen burning business.

　　Q: The main reason for the significant increase in revenue of the company’s low-nitrogen combustion business.

　　A: In 2023, the company confirmed large-scale low-nitrogen projects such as Lanshan Tunhe and Baotou Steel Pipe.

　　Q: How long is the cycle of the company’s renovation project?

　　A: It usually takes 3-6 months from the signing of the renovation project to the completion of its implementation.

　　Q: When do companies usually sign orders?

　　A: The time for signing an order depends on the customer’s bidding and purchasing plan.

　　Q: What is the confirmed income of the company’s electric boiler peak shaving project?

　　A: The emergency heating and peak shaving project in Yinchuan City, Lingwu achieved a revenue of 17,289,600 yuan in 2023, but it was not a complete heating period.

　　Q: What is the future development plan of the company’s biomass business?

　　A: Biomass business is our business layout under the goal of "double carbon". At present, we have selected some characteristic technical application scenarios, including different types of biomass preparation and blended combustion. At present, it is in the stage of technical route layout.

　　Q: What are the company’s business objectives in 2024?

　　A: One of the key tasks of the company’s R&D this year is the ammonia mixing project of the 600MW coal-fired boiler in Taishan Power Plant, and the second stage of R&D should be completed. In addition, the company continues to improve refined management in quality improvement, project management, cost control, market expansion, talent construction, etc., and builds four types of enterprises: science and technology leading, engineering general contracting, energy investment and advanced intelligence modeling.

　　Details of participating institutions are as follows: