Stock code: 000012; 200012 Short form of the stock: CSG A; CSG B Notice No.: 2018-048
CSG HOLDING CO., LTD.
SUMMARY of SEMI-ANNUAL REPORT 2018
Chairman of the Board:
Chen Lin
August 2018
I. Important noticeThe summary of semi-annual report is excerpted from the full text of the semi-annual report. In
order to fully understand the Company's operating achievements, financial standing and futuredevelopment planning, investors should carefully read the full text of the semi-annual reportannounced on the media designated by CSRC.
This report is prepared both in Chinese and English. Should there be any inconsistency between theChinese and English versions, the Chinese version shall prevail.
Notice of non-standard audit opinion
□Applicable √ Not applicable
Plans of profit distribution and share converted from capital reserve in the report period which wasdeliberated by the Board
□ Applicable √Not applicable
The Company had no plans of cash dividend distribution, bonus shares distribution or shareconverted from capital reserve in the first half of the year.
Profit distribution plan of preferred shares in the report period which was approved by the Board
□Applicable √ Not applicable
II. The basic information of the Company1. Company profile
| Short form for share | Southern Glass A、Southern Glass B | Code for share | 000012、200012 |
| Listing stock exchange | Shenzhen Stock Exchange | ||
| Person/Way to contact | Secretary of the Board | Representative of security affairs | |
| Name | Yang Xinyu | Chen Chunyan | |
| Contact address | CSG Building, No.1 of the 6th Industrial Road, Shekou, Shenzhen, P. R.C. | CSG Building, No.1 of the 6th Industrial Road, Shekou, Shenzhen, P. R.C. | |
| Tel. | (86)755-26860666 | (86)755-26860666 | |
| securities@csgholding.com | securities@csgholding.com | ||
2. Main accounting data and financial indexesWhether it has retroactive adjustment or re-statement on previous accounting data for accounting
policy changed and accounting error correction or not
□Yes √ No
| The report period (Jan. to Jun.2018) | The same period of last year | Increase/decrease year-on-year (%) | |
| Operating income (RMB) | 5,471,169,598 | 4,944,337,861 | 10.66% |
| Net profit attributable to shareholders of the listed company (RMB) [Note (1)] | 352,837,153 | 392,992,163 | -10.22% |
| Net profit attributable to shareholders of the listed company after deducting non-recurring gains and losses (RMB) [Note (2)] | 334,049,718 | 360,945,244 | -7.45% |
| Net cash flow arising from operating activities (RMB) | 764,564,088 | 1,019,889,454 | -25.03% |
| Basic earnings per share (RMB/Share) [Note (3)] | 0.13 | 0.14 | -7.14% |
| Diluted earnings per share (RMB/Share) [Note (4)] | 0.12 | 0.14 | -14.29% |
| Weighted average ROE [Note (5)] | 4.09% | 4.95% | -0.86% |
| End of this period | End of last year | Increase/decrease in this period-end over that of last year-end (%) | |
| Total assets (RMB) | 20,524,811,756 | 19,535,002,368 | 5.07% |
| Net assets attributable to shareholders of the listed company (RMB) | 8,789,183,848 | 8,458,587,873 | 3.91% |
Note (1): The data in the above table has included apportionment of equity incentive expense included in profitand loss of RMB 93.81million from Jan. to Jun. 2018, which affected the net profit attributable to shareholders ofthe listed company of RMB 82.55 million. In the period from Jan. to June 2018, after eliminating the impact ofequity incentive cost sharing, the net profit attributable to shareholders of the listed company was RMB 435.39million, with a year-on-year increase of RMB 42.4 million and growth rate of 10.79%;
Note (2): After eliminating the impact of equity incentive cost sharing, net profit attributable to shareholders of thelisted company from Jan. to June 2018 was RMB 416.6 million with a year-on-year increase of RMB 55.66million and growth rate of 15.42%;
Note (3): After eliminating the impact of equity incentive cost sharing, basic earnings per share from Jan. to June2018 was RMB 0.16 per share, with year-on-year growth rate of 14.29%;
Note (4): After eliminating the impact of equity incentive cost sharing, diluted earnings per share from Jan. toJune 2018 was RMB 0.16 per share, with year-on-year growth rate of 14.29%;
Note (5): After eliminating the impact of equity incentive cost sharing, weighted average ROE from Jan. to June2018 was 5.05%, with year-on-year growth rate of 0.1%.
3. Amount of shareholders of the Company and particulars about shareholding
Unit: share
| Total amount of shareholders at the end of the report period | 153,651 | Total amount of the preferred shareholders who have resumed the voting right at end of report period (if applicable) | 0 | ||||||
| Shareholding of the top ten shareholders | |||||||||
| Full name of Shareholders | Nature of shareholder | Proportion of shares held (%) | Total shares held at the end of report period | Amount of restricted shares held | Number of share pledged/frozen | ||||
| Share status | Amount | ||||||||
| Foresea Life Insurance Co., Ltd. – Haili Niannian | Domestic non state-owned legal person | 14.84% | 423,988,067 | ||||||
| Foresea Life Insurance Co., Ltd. – Universal Insurance Products | Domestic non state-owned legal person | 3.77% | 107,659,097 | ||||||
| Shenzhen Jushenghua Co., Ltd. | Domestic non state-owned legal person | 2.76% | 78,757,679 | Pledged [Note] | 78,757,652 | ||||
| Foresea Life Insurance Co., Ltd. – Own Fund | Domestic non state-owned legal person | 2.06% | 58,877,419 | ||||||
| Central Huijin Asset | State-owned legal person | 1.84% | 52,650,444 | ||||||
| Management Ltd. | ||||||
| China Galaxy International Securities (Hong Kong) Co., Limited | Foreign legal person | 1.31% | 37,313,064 | |||
| China Merchants Securities (HK) Co., Limited | State-owned legal person | 1.02% | 29,155,288 | |||
| Shenzhen International Holdings (SZ) Limited | Domestic non state-owned legal person | 0.93% | 26,450,000 | |||
| Wang Heng | Domestic natural person | 0.63% | 17,939,087 | |||
| VANGUARD EMERGING MARKETS STOCK INDEX FUND | Foreign legal person | 0.61% | 17,563,848 | |||
| Statement on associated relationship or consistent action among the above shareholders: | Among shareholders as listed above, Foresea Life Insurance Co., Ltd.-Haili Niannian, Foresea Life Insurance Co., Ltd.-Universal Insurance Products, Foresea Life Insurance Co., Ltd.-Own Fund are all held by Foresea Life Insurance Co., Ltd. Shenzhen Jushenghua Co., Ltd. is a related legal person of Foresea Life Insurance Co., Ltd. and Chengtai Group Co., Ltd., another related legal person of Foresea Life Insurance Co., Ltd, which held 36,534,458 shares via China Galaxy International Securities (Hong Kong) Co., Limited. Except for the above-mentioned shareholders, it is unknown whether other shareholders belong to related party or have associated relationship regulated by the Management Regulation of Information Disclosure on Change of Shareholding for Listed Companies. | |||||
| Explanation on shareholders involving margin business (if applicable) | N/A | |||||
Note: On July 13, 2018, the Company received the notification letter from Shenzhen Jushenghua Co., Ltd, whichindicated that the 78,757,652 unrestricted A-shares of CSG pledged by Jushenghua to China Galaxy Securities Co.,Ltd had been released on July 12, 2018 and the releasing procedures of pledge has been completed in ShenzhenBranch of China Securities Depository and Clearing Co., Ltd. For detailed contents, please refer to theAnnouncement of Releasing Pledge of Shares Held by Shareholders ((Notice No. : 2018-034) issued on July 14,2018.
4. Changes of controlling shareholder or actual controllerChanges of controlling shareholder in the report period
□Applicable √ Not applicable
Changes of actual controller in the report period
□Applicable √ Not applicable
5. The total number of shareholders of the Company's preferred shares and the shareholdingof the top 10 preferred shareholders
□Applicable √ Not applicable
There were no preferred shares held by shareholders in the report period.6. Corporate BondsWhether the Company had corporate bonds publicly issued and listed on the stock exchange which
hadn’t matured or fully paid until the approval day of the semi-annual report
No
III. Performance Discussion and Analysis1. Brief introduction to operation situation in the report periodWhether the Company needs to comply with the disclosure requirements of specific industries
No
Since 2018, China has continued to deepen the supply-side structural reform, steadily propelled thetasks of de-capacity, de-leveraging, de-stocking, de-cost and addressing weakness, further promotedreplacing old growth drivers with new ones, and continuously improved the structure of economicdevelopment.
In 2018, CSG, facing the complex and volatile economic environment and increasingly fiercemarket competition, seized favorable market opportunities timely and coped with all kinds ofdifficulties bravely to ensure the development of production and operation activities. Oriented bymarket demand, the Company carefully analyzed its competitive advantages, took the initiative totransform business mode and update technologies, and improved operating quality by finemanagement to realize the advancement in stability. In the first half of 2018, the operation revenueof the Company was RMB 5,471 million with a year-on-year increase of RMB 527 million andgrowth rate of 10.66%. After eliminating the impact of equity incentive cost sharing, the Companyrealized net profit of RMB 444 million, with a year-on-year increase of RMB 44 million and growthrate of 10.87%, and net profit attributable to the parent company of RMB 435 million, with ayear-on-year increase of RMB 42 million and growth rate of 10.79%.
(I) Glass businessThe State has continuously strengthened the structural adjustment of excess capacity, adopted strictenvironmental protection control policies to eliminate backward production capacity, whichpromoted the glass business to enter a benign operation cycle step by step, and optimized the supplyand demand structure. The Company spares no effort to grasp the development opportunities of allits products in the process of supply-side structural reform.
Float glass: In the first half of 2018, the market of float glass continued the favorable trend of lastyear. The Company adhered to the concept of high-quality, energy-saving and environmentalprotection product. Based on its own technological quality advantages and capacity scaleadvantages, it has kept strengthening internal management and intensive cultivation, improvedproduction technology level, co-ordinated sales management and quality services, facilitateddifferentiation and high-end of products, consolidated its brand advantage, and improved customersatisfaction. Consequently, the operating profit rose significantly and the revenue and net profitincreased by 17 % and 24% respectively.
Architectural glass: In 2018, due to the sustained high prices of bulk raw materials, especiallyglass originals, and the growth of downstream fixed asset investment slowed down, the profitabilityof architectural glass was squeezed. Under this pressure, the Company responded positively througha series of measures such as adjusting its market strategy, strengthening industry synergy,optimizing product structure, increasing overseas orders, intensifying communication withcustomers, improving production efficiency, and guaranteed the profit growth, with revenue risingby 6% year-on-year and net profit rising by 12%.
(II) Solar energy businessIn 2018, the State further promoted high-quality and orderly development of the photovoltaicindustry, and strove to cultivate a number of high-quality photovoltaic enterprises through the handsof the market, so as to push the achieving of the connection to grid at an equal price to be achieved.Besides, the investment and technical innovation in the photovoltaic industry have led to asubstantial increase in production capacity and a downward pressure on market price. In addition, asthe material manufacturing of photovoltaic industry is a heavy assets industry, as well as the energycost of Yichang Base of the group is higher than that of other companies in the same industry.Consequently, the management has adopted various strategies to respond positively includingattaching importance to production technology innovation and product innovation, planningtechnological upgrading, and enhanced the production capacity of high value-added products.Meanwhile, In compliance with the guidance of industry put forward by the State, the Companydetermined the connection to grid at an equal price as the cost control target and industrialdevelopment goal and ultimately realized revenue increased by 3.54% year-on-year, andaccumulated net profit of RMB minus 45 million.
(III)Electronic glass and display device businessIn the first half of 2018, with the accumulation of technology and the steady development of themarket, the performance of the electronic glass and display devices continued to improve. For thesector of electronic glass, the company maintained its current capacity and its technology wasapproaching world-class level. The high-aluminum products of Qingyuan CSG have entered intothe original chips market of cover plate of the domestic mainstream brands of mobile phone andYichang Photoelectric has successfully gained its expected technical objective in technicalinnovation. With the trial production of Xianning Photoelectric, a new generation of high-aluminumproducts will be on the market, and the competitive advantage in the high-end electronic glassmarket will continue to strengthen. For the sector of display device, the Company has alwaysadhered to the high-end and smart product route. As it seized the market opportunities of vehicletouch market in the first half year of 2018, the business shipment volumes of TP module increasedsubstantially, with gross margin rising significantly. The revenue and net profit of the electronicglass and display device business sector rose by 19% year-on-year and 162% year-on-yearrespectively in the first half of the year.
2. Matters relevant to financial report(1) Particulars about the change of accounting policy, accounting estimate and accounting
method compared with last accounting period
□Applicable √ Not applicable
There was no change of accounting policy, accounting estimate and accounting method in the reportperiod.
(2) Particulars about retroactive adjustment or re-statement on major accounting errorcorrection
□Applicable √ Not applicable
There was no retroactive adjustment or re-statement on major accounting error correction in thereport period.
(3)Particulars about the change of consolidation range compared with the annual financialreport of last year
√Applicable □ Not applicableFor details, please refer to “VIII. The changes of consolidation scope” of “Section VIII. FinancialReport” in the full text of Semi-annual Report 2018.
Board of Directors ofCSG Holding Co., Ltd.28 August 2018