Summary of 2024 Annual Report of Shenzhen Textile (Holdings) Co., Ltd.Stock code: 000045,200045 Stock Abbreviation: Shen Textile A, Shen Textile B Announcement No. :2025-10
Summary of 2024 Annual Report of Shenzhen Textile
(Holdings) Co., Ltd.I. Important notesThe summary is abstract from full-text of annual report, for more details information , investors should found inthe full-text of annual report that published on website of Shenzhen Stock Exchange and other website appointedby CSRC.In addition to the following directors, other directors personally attended the Board meeting at which the AnnualReport was considered.
| Names of directors not present in person | Positions of directors not present in person | Reasons for not attending the meeting in person | Name of principal |
| Wang Chuan | Director | Business Related | Wei Junfeng |
| Meng Fei | Director | Business Related | Liu Yu |
Non-standard auditor’s opinion
□ Applicable √Not applicable
Preliminary plan for profit distribution to the common shareholders or turning the capital reserve into the sharecapital for the reporting period, which has been reviewed and approved at the board meeting
√Applicable □ Not applicable
The Company has plan of Converting provident fund to share capital .
□ Applicable √Not applicable
The profit distribution plan reviewed and approved by the Company at the Board is: based on 506,521,849 shares,distribute cash dividends of 0.71RMB (including tax) for every 10 shares to all shareholders, and distribute 0bonus shares (including tax), without converting the provident fund into share capital.The profit distribution plan for preferred stocks for the reporting period passed by the board of directors
□ Applicable √Not applicable
II. Basic information about the company
1. Company profile
| Stock abbreviation | Shen Textile A，Shen Textile B | Stock code | 000045，200045 | |
| Stock exchange for listing | Shenzhen Stock Exchange | |||
| Contact person and contact manner | Board secretary | Securities affairs Representative | ||
| Name | Jiang Peng | Li Zhenyu | ||
| Office Address | 6/F, Shenfang Building, No.3 Huaqiang North Road, Futian District, Shenzhen | 6/F, Shenfang Building, No.3 Huaqiang North Road, Futian District, Shenzhen | ||
| Fax | 0755-83776139 | 0755-83776139 | ||
| Tel | 0755-83776043 | 0755-83776043 | ||
| jiangp@chinasthc.com | lizy@chinasthc.com | |||
2. Brief introduction to the main business or products in the reporting period
(I) Main business of the CompanyThe Company's main business is a high-tech industry focusing on the R&D, production and sales of polarizers for OLED and LCDdisplay, the operation and management of its own properties, and textile and clothing business.During the reporting period, there was no significant change in the Company's primary business. First, the Company activelyadjusted its product structure, implemented a product differentiation strategy, and increased the sales proportion of high-value-addedproducts. It has achieved an industry-leading position in OLED TV polarizer sales volume, and the sales volume of ultra-large-sizeproducts has surged significantly; second, the Company made every effort to overcome quality problems, improve customersatisfaction, reduce product return losses and management costs, and at the same time, played a sales-driven role to promote sales byproduction, and the production and sales volume repeatedly hit a record high; third, the Company strengthened the on-site technicalmanagement level and enhanced the process stability. The improvement of broken film of each production line was remarkable, andthe average frequency of broken film decreased significantly year-on-year, which has reached a higher level in the industry. fourth,the Company continued to strengthen innovation leadership, driving the development and mass production of cutting-edge products.It focused on breakthroughs in key technologies and successfully achieved the development and mass production ofhigh-performance OLED TV polarizers with high transmittance and low reflection in 55-inch, 65-inch, and 77-inch sizes.Additionally, it completed the development of highly alkali-resistant polarizers for OLED mobile phones and the development ofdisplay polarizers that meet the U.S. Energy Star 9.0 energy efficiency standards; fifth, the Company actively phased out subsidiarieswith "non-core businesses and inefficient assets", steadily implemented the performance-based selection mechanism, promoted theshifting of resources from non-core businesses to core businesses, and achieved rational use of resources; Sixth, the Companystrengthened supervision and management, focused on work safety, prepared safety management systems, strengthened safetytraining and education, carried out safety risk identification and hidden danger investigation and management, consolidated weaklinks, and prevented accidents; Seventh, continuously improved the quality of property management service, improve tenantsatisfaction, strived to maintain the Company's property rental rate at a high level, and ensured the stability of the Company'sproperty leasing management business income.
(2) Main products of the Company and their uses
Currently, the Company has 7 mass-production polarizer production lines, and its products cover TN, STN, TFT, OLED, 3D, dyefilms, optical films for touch screens and other fields. These products are mainly applied to products such as TVs, laptops, navigators,monitors, vehicles, industrial controls, instruments and meters, smartphones, wearable devices, 3D glasses, and sunglasses. Bycontinuously strengthening the expansion of sales channels and the construction of its own brand, the Company has become aqualified supplier for mainstream panel enterprises such as CSOT, BOE, LGD, Xianyang Caihong, HKC, Tianma Microelectronics,Sharp and so on.The main product types and applications of the Company's polarizer production lines are as follows:
| Production lines | Address | Product width | Planned capacity | Main product type |
| Line 1 | Pingshan | 500mm | 600,000 square meters | TN/STN/dye films |
| Line 2 | Pingshan | 500mm | 1.2 million square meters | TN/STN/CSTN |
| Line 3 | Pingshan | 650mm | 1 million square meters | TFT |
| Line 4 | Pingshan | 1490mm | 6 million square meters | TFT/OLED |
| Line 5 | Pingshan | 650mm | 2 million square meters | TFT/OLED |
| Line 6 | Pingshan | 1490mm | 10 million square meters | TFT/OLED |
| Line 7 | Pingshan | 2500mm | 32 million square meters | TFT/OLED |
(3) Industry information of the Company during the reporting period
The polarizer is also called polarized light sheet, which can control the polarization direction of a specific beam. When the naturallight passes through the polarizer, the light with the vibration direction perpendicular to the polarizer transmission axis will beabsorbed, and only the polarized light with the vibration direction parallel to the polarizer transmission axis will be transmitted. Thedownstream applications of polarizers are mainly in the panel industry. According to different panel types, polarizer are mainlyclassified into TN type, STN type, TFT type and OLED type. At present, the global polarizer market is mainly based on polarizers forTFT-LCD panels. One LCD panel requires two polarizers, while one OLED panel requires one polarizer.The high-quality development of the polarizer industry has a profound impact on the entire display industry. As one of the three coreraw materials of the display panel, the demand for polarizer is directly affected by the fluctuation of the display panel market. Inrecent years, with the accelerated transfer of the global display panel industry to China, China's polarizer industry has ushered in astage of rapid development. The production capacity and process technology level of domestic polarizer manufacturers havecontinuously jumped. China's polarizer industry has significantly improved its position and influence in the global market. Chinesemainland has become the world's largest polarizer production base.The Company is one of the main polarizer R&D, production and sales enterprises in China. It is the pioneer of China's polarizer
Summary of 2024 Annual Report of Shenzhen Textile (Holdings) Co., Ltd.industry. Now it has developed into a leading enterprise in China's polarizer industry, and has become an important supplier ofmainstream panel enterprises in the world. In 2024, the global economic and geopolitical situation will remain complex and volatile.Affected by the severe and complex economic and political situation in the world, the global display panel and terminal marketdemand will slowly recover, and the polarizer industry will continue to expand its production capacity. However, it still faces riskssuch as intensified industry competition, rising raw materials costs, and raw materials supply security.
(4)Industry competition pattern
Polarizer industry is a highly concentrated industry. Currently, there are about 10 major polarizer manufacturers worldwide, mainly inmainland China, Japan, South Korea and Taiwan Province of China.With the transfer of production capacity and the expansion ofChinese mainland manufacturers, mainland China has become the largest polarizer production base in the world. According to Omdiadata, by the end of 2023, the global share of Chinese Mainland's polarizer capacity scale is about 54.91%. It is estimated that by 2027,the share of Chinese Mainland's polarizer capacity scale will further increase to 69.66%. In the competition of ultra wide polarizerproduction line brought about by the rapid growth of demand for 65 inch and above large-size display products, Chinese Mainland isin the forefront of the industry. According to Omdia data, by the end of 2023, there are 12 ultra wide production lines with a length of
2.3 meters or more in the world, of which 11 have been built in Chinese Mainland. Polarizer enterprises with good production andoperation capacity of ultra wide production lines will occupy a favorable position in the market competition.
(5) Market position of the Company's products
The Company is one of the main domestic enterprises in the R&D, production, and sales of polarizers. It began its polarizer businessin 1995 and achieved the first mass production of polarizers in China in 1998, becoming a pioneer in China's polarizer industry. TheCompany has mastered core technologies for the R&D and production of TN/STN, TFT-LCD, and OLED display polarizers. It is oneof the few domestic polarizer manufacturers with the capability to produce a full range of polarizer products in large, medium, andsmall sizes. The Company was the first to achieve mass production of polarizers for OLED TVs and OLED mobile phones, filling agap in the domestic market.The Company's main products are medium and large-sized polarizers for TFT-LCD. Its Line 7 is one of the few 2,500mm ultra-widepolarizer production lines in the world, capable of meeting the needs of high-generation panel production lines such as 8.5/8.6,
10.5/11 generations globally. Especially, it offers the best economic production efficiency for 10.5/11 generation lines and has anindustry-leading advantage in the technology and production capacities for ultra-large and large-sized products.
3. Major accounting data and financial indicators
(1) Major accounting data and financial indicators for the last three years
Whether it has retroactive adjustment or re-statement on previous accounting data
√Yes □ No
Retroactive adjustment or restatement of causesAccounting policy change and Correction of accounting errors
In RMB
| As at the end of 2024 | As at the end of 2023 | Increase/decrease at the end of this year compared with the end of last year | As at the end of 2022 | |
| Total assets (RMB) | 5,232,150,397.33 | 5,649,822,363.44 | -7.39% | 5,617,137,367.90 |
| Net assets attributable to shareholders of the listed company (RMB) | 2,951,869,910.25 | 2,882,152,266.22 | 2.42% | 2,849,264,555.21 |
| Year 2024 | Year 2023 | Increase/decrease this year compared with last year | Year 2022 | |
| Operating revenue (RMB) | 3,335,283,008.68 | 3,079,678,375.45 | 8.30% | 2,837,988,264.36 |
| Net profit attributable to the shareholders of the listed company (RMB) | 89,371,134.24 | 79,268,250.45 | 12.75% | 73,309,182.94 |
| Net profit attributable to shareholders of listed companies after deducting non-recurring profit or loss (RMB) | 77,028,485.76 | 62,328,667.73 | 23.58% | 61,951,894.68 |
| Net cash flows from operating activities (RMB) | 231,264,525.09 | 184,766,739.80 | 25.17% | 490,238,550.60 |
| Basic earnings per share (RMB/share) | 0.18 | 0.16 | 12.50% | 0.14 |
| Diluted earnings per share (RMB/share) | 0.18 | 0.16 | 12.50% | 0.14 |
| Weighted average rate of return on net assets | 3.06% | 2.77% | 0.29% | 2.59% |
(2) Main Financial Index by Quarters
In RMB
| Q1 | Q2 | Q3 | Q4 | |
| Operating revenue | 761,350,922.92 | 862,033,228.98 | 898,708,470.32 | 813,190,386.46 |
| Net profit attributable to shareholders of the listed company | 20,777,352.85 | 23,116,722.38 | 35,007,531.14 | 10,469,527.87 |
| Net profit attributable to shareholders of listed companies after deducting non-recurring profit or loss | 16,974,425.78 | 18,283,331.01 | 34,873,170.40 | 6,897,558.57 |
| Net cash flows from operating activities | 31,638,249.21 | -19,803,399.27 | 155,500,217.20 | 63,929,457.95 |
Whether significant variances exist between the above financial index or the index with its sum and the financialindex of the quarterly report as well as semi-annual report index disclosed by the Company.
□ Yes √No
4. Share capital and shareholders
(1) Number of holders of ordinary shares and preference shares with restored voting right and Top 10shareholders
In shares
| Total number of common shareholders at the end of the reporting period | 33,622 | Total shareholders at the end of the month from the date of disclosing the annual report | 32,264 | The total number of preferred shareholders voting rights restored at period-end(if any) | 0 | Total preferred shareholders at the end of the month from the date of disclosing the annual report(if any) | 0 | |||||
| Shareholdings of top 10 shareholders | ||||||||||||
| Shareholders | Nature of shareholder | Proportion of shares held(%) | Number of shares held at period -end | Amount of restricted shares held | Number of share pledged/frozen | |||||||
| State of share | Amount | |||||||||||
| Shenzhen Investment Holdings Co., Ltd. | State-owned legal person | 46.21% | 234,069,436 | Not applicable | 0 | |||||||
| Shenzhen Shenchao Technology Investment Co., Ltd. | State-owned legal person | 3.18% | 16,129,032 | Not applicable | 0 | |||||||
| Sun Huiming | Domestic natural person | 1.60% | 8,088,853 | Not applicable | 0 | |||||||
| Su Weipeng | Domestic natural person | 0.71% | 3,580,000 | Pledged | 3,000,000 | |||||||
| Chen Xiaobao | Domestic natural person | 0.66% | 3,328,620 | Not applicable | 0 | |||||||
| Li Zengmao | Domestic natural person | 0.61% | 3,077,997 | Not applicable | 0 | |||||||
| Hong Kong Securities Clearing Company Ltd. (HKSCC) | Overseas legal person | 0.50% | 2,507,982 | Not applicable | 0 | |||||||
| Shanghai Submartingale Asset Management Co., Ltd. - Submartingale Value No. 1 Private Fund | Domestic non-state-owned legal person | 0.43% | 2,154,800 | Not applicable | 0 | |
| Sun Wenbo | Domestic natural person | 0.39% | 2,000,200 | Not applicable | 0 | |
| Shanghai Submartingale Asset Management Co., Ltd. - Submartingale Pingchangxin Yuanwang Private Fund | Domestic non-state-owned legal person | 0.39% | 1,991,700 | Not applicable | 0 | |
| Related or acting-in-concert parties among shareholders above | Among the top 10 ordinary shareholders, Shenzhen Investment Holdings Co., Ltd. and Shenzhen Shenchao Technology Investment Co., Ltd. do not constitute a relationship of persons acting in concert. In addition, the Company does not know whether there is a related relationship between the top 10 ordinary shareholders and between the top 10 ordinary shareholders and the top 10 shareholders, nor does it know whether they are persons acting in concert as stipulated in the Administrative Measures for the Acquisition of Listed Companies. | |||||
| Explanation on shareholders participating in the margin trading business(if any ) | None | |||||
Lending of shares by the top ten shareholders participating in refinancing business
□Applicable ?Not applicable
The top ten shareholders have changed from the previous period
□Applicable ?Not applicable
(2) Number of the preference shareholders and the shareholdings of the top 10 of them
□ Applicable √Not applicable
No preference shareholders in the reporting period
(3) Relationship between the Company and its actual controller in the form of diagram
5. Corporation bonds
□ Applicable √Not applicable
III. Significant events
(1) Termination of the restructuring
In 2023, through the integration of high-quality resources in the polarizer industry, the company optimized theindustrial chain layout, and actively promoted the work relating to the acquisition of 100% equity in HengmeiOptoelectronics Co., Ltd. by way of issuance of shares and payment of cash (hereinafter referred to as "theRestructuring" or "the Transaction"). During the period, due to the changes in shareholders and shareholding ratioof the target company, Hengmei Optoelectronics, during the restructuring period, it is necessary to adjust thecounterparty of the restructuring and the transaction plan according to the relevant rules and requirements of theregistration system. On November 17, 2023, the Company reconvened the Board of Directors to review andapprove the revised draft of the transaction plan, and adjusted the pricing base date, issue price, counterparty, etc.of the transaction plan. Since the disclosure of this transaction plan, the Company and relevant parties haveactively promoted the various tasks involved in the Transaction, including additional audit, evaluation andsupplementary due diligence of the target company, and communicated, negotiated and prudently demonstratedwith the counterparty on the transaction plan. According to the relevant regulations, the Company shall convenethe Board of Directors to review the draft of the restructuring report and issue a notice to convene the generalmeeting of shareholders before May 17, 2024, and clarify whether to continue or terminate the Restructuring.Since the planning and first announcement of the Transaction, the Company has actively organized all partiesinvolved in the Transaction to promote the restructuring in strict accordance with the requirements of relevantlaws, regulations and normative documents. As of May 16, 2024, due to the complexity of the restructuring planand the involvement of many counterparties, the transaction has not yet completed the approval procedures of allparties involved, and the validity period of the financial data of the target company has expired. The Company isunable to issue a notice of convening the general meeting of shareholders within six months after theannouncement of the first board resolution on the issuance of shares for the purchase of assets, that is, before May17, 2024. From the perspective of safeguarding the interests of all shareholders and the listed company, theCompany has decided to terminate the Restructuring after prudent argumentation by the Company and friendlynegotiation with all parties to the transaction.According to the agreements relating to the Transaction signed by the Company and the counterparties, theagreements relating to the Transaction shall only take effect after the transaction plan is reviewed and approved bythe Board of Directors and the general meeting of shareholders, reviewed and approved by the Shenzhen StockExchange, and registered and agreed to by China Securities Regulatory Commission. In view of the fact that theabove relevant preconditions have not been met, the termination of the Restructuring is a prudent decision madeby the Company after full communication, prudent analysis and friendly negotiation with relevant parties, and theCompany and the parties to the transaction do not need to bear any liability for breach of contract or otherliabilities. The Company's current production and operation are normal. The termination of the Restructuring isnot expected to have any material adverse impact on the Company's existing daily operation and financial position,and there is no harm to the interests of the Company and shareholders, especially minority shareholders. TheCompany will continue to pay attention to and actively explore investment opportunities in polarizer and relatedfields to promote the long-term development of the Company and enhance its value. For details, please refer to theAnnouncement on Termination of Issuance of Shares and Payment of Cash for Purchase of Assets and Raising ofMatching Funds and Related Party Transactions (No. 2024-24) of the Company on Cninfo(http://www.cninfo.com.cn).
(2) Disposal of Assets by Shenzhen Xieli Joint Venture Company
Our company has invested with Hong Kong Xieli Maintenance Company (hereinafter referred to as "Hong KongXieli") to establish a Sino foreign joint venture, Shenzhen Xieli Automobile Enterprise Co., Ltd. (hereinafterreferred to as "Shenzhen Xieli"). In March 2020, Shenzhen Xieli was deregistered by the Shenzhen MunicipalAdministration for Market Regulation. In July 2020, our company filed an administrative action with the YantianDistrict People's Court in Shenzhen, Guangdong Province to revoke the approval of the Shenzhen MarketSupervision Administration for the cancellation of Shenzhen Xieli.In December 2022, the People's Court of Yantian District, Shenzhen, Guangdong Province, reviewed the firstinstance judgment and revoked the administrative action approving the cancellation of Shenzhen Xieli'sregistration. In January 2023, the third party in the original trial, Hong Kong Xieli, appealed to the ShenzhenIntermediate People's Court in Guangdong Province. Later, due to Hong Kong Xieli's failure to pay the caseacceptance fee in advance, the Shenzhen Intermediate People's Court issued an administrative ruling, ruling thatthe appeal should be withdrawn by Hong Kong Xieli. The retrial judgment of the first instance has taken effect on
Summary of 2024 Annual Report of Shenzhen Textile (Holdings) Co., Ltd.March 22, 2023. At present, Shenzhen Xieli has resumed its business registration status, but its future directionstill needs to be negotiated among all shareholders.
The Board of Directors of Shenzhen Textile (Holdings) Co., Ltd.March 28, 2024