Zhejiang Dahua Technology Co., Ltd.
2021 Semi-annual Report
This document is a translated version of the Chinese version 2021 Semi-annual Report“( 2021 年半年度报告”),
and the published 2021 Semi-annual Report in the Chinese version shall prevail.
The complete published Chinese 2021 Semi-annual Report may be obtained at http://www.cninfo.com.cn.
August, 2021
Section I Important Notes, Contents and Definitions
The Board of Directors, the Board of Supervisors, directors, supervisors and senior
executives of the Company hereby guarantee that the information presented in this
semi-annual report is authentic, accurate, complete and free of any false records,
misleading statements or material omissions, and they will bear joint and several liability for
such information.
Fu Liquan, the Company's legal representative, Xu Qiaofen, chief accountant, and Zhu
Zhuling, person in charge of accounting institution (Accounting Officer) hereby declare and
warrant that the financial statements in the Semi-Annual Report are authentic, accurate,
and complete.
All directors attended the meeting of the Board of Directors for deliberation of this
annual report.
During the reporting period, there was no significant change in the risks faced by the
Company. The Company has been trying to identify all kinds of risks and actively take
countermeasures to avoid and reduce the risks:
1. Covid-19 risks: In the face of the Covid-19 outbreak, the Company has taken
stringent prevention and control measures to protect the health of employees at home and
abroad. In addition, the Company offers technological solutions to contribute to the global
effort against the pandemic.
2. Supply chain security risks: In terms of supply security, the Company has
comprehensively reviewed various potential supply risks through dedicated operations, and
strengthened the sustainable and safe supply of key materials by means of research and
development of backup scheme and diversified supply sources to ensure the security of the
supply chain.
3. International operation risks: The Company's products and solutions cover more
than 100 countries and regions overseas. International business operation may face trade
protection risks. In addition, the resurgence of Covid-19 around the world has resulted in
more uncertainties to the overseas economic environment, which may adversely affect the
development of the Company's local business. To actively prevent and respond to
international business risks, the Company has established an overseas compliance and
risk control system, continuously strengthened its understanding of and ability to adapt to
the laws and regulations as well as the political and economic environment of the regions in
which the Company operates, and formulated differentiated "One Country, One Strategy"
national business strategies according to the political and economic changes in different
regions to minimize business risks.
4. Foreign exchange risks: The Company's export transactions are mostly settled in
United States Dollars ("USD"), while overseas business continues to grow. Therefore,
fluctuations in the foreign exchange rate may affect the profits of the Company. The
Company attaches great importance to exchange rate risk control and adopts various
means to effectively control such risks: on the one hand, it manages various currencies by
category, guides the contracting in mainstream currencies and using such currencies to
hedge against the U.S. dollar while increasing the proportion of overseas localized
contracting; for the countries contracted in non-mainstream currencies, exchange rate
protection clauses and price adjustment mechanisms will be set in advance in the contracts
to reduce the risk of exchange rate fluctuations; on the other hand, the Company effectively
uses foreign exchange hedging and a series of derivative instruments, among others, to
offset and hedge exchange rate risks without speculative purposes.
5. Business model change risks: With the development of technologies such as
network communications, cloud computing, big data, and AI, and the upgraded uses of
smartphones, business models in the IOT era may have an impact on the traditional
industry development. If an enterprise cannot grasp opportunities brought about by the
business model transformation in a timely manner, it may face the risk that the original
market structure becomes broken. The Company continues to focus on and study the
major changes in global economy, industry and technology, analyze the industry
development logic, and predict the evolution of global security industry and IoT industry, the
continuous integration of video, information communication and digital technologies,
diversification and uncertainty of customer demands. While consolidating the
advantageous market, The Company actively explores and pilots new businesses and new
commercial mode, and carry out busines
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