Stock Code: 200725 Stock Name: BOE-B Announcement No. 2019-025
BOE TECHNOLOGY GROUP CO., LTD.FIRST QUARTER REPORT 2019 (SUMMARY)
Part I Important Notes
The Board of Directors (or the “Board”), the Supervisory Committee as well as the directors,supervisors and senior management of BOE Technology Group Co., Ltd. (hereinafter referredto as the “Company”) hereby guarantee the factuality, accuracy and completeness of thecontents of this Report and its summary, and shall be jointly and severally liable for anymisrepresentations, misleading statements or material omissions therein.All the Company’s directors have attended the Board meeting for the review of this Reportand its summary.Mr. Wang Dongsheng, the Company’s legal representative, Mr. Chen Yanshun, President ofthe Execution Committee (Chief Executive Officer) of the Company, Ms. Sun Yun, theCompany’s Chief Financial Officer, and Ms. Yang Xiaoping, head of the Company’s financialdepartment (equivalent to financial manager)hereby guarantee that the Financial Statementscarried in this Report are factual, accurate and complete.This Report has been prepared in both Chinese and English. Should there be anydiscrepancies or misunderstandings between the two versions, the Chinese version shallprevail.
Part II Key Corporate Information
I Key Financial Information
Indicate by tick mark whether there is any retrospectively restated datum in the table below.□ Yes √ No
| Item | Q1 2019 | Q1 2018 | Change (%) |
| Operating revenue (RMB) | 26,454,258,554.00 | 21,566,813,037.00 | 22.66% |
| Net profit attributable to the listed company’s shareholders (RMB) | 1,051,781,919.00 | 2,018,692,554.00 | -47.90% |
| Net profit attributable to the listed company’s shareholders before exceptional items (RMB) | 352,304,432.00 | 1,238,599,228.00 | -71.56% |
| Net cash generated from/used in operating activities (RMB) | 6,164,241,385.00 | 7,198,088,816.00 | -14.36% |
| Basic earnings per share (RMB/share) | 0.030 | 0.058 | -48.28% |
| Diluted earnings per share (RMB/share) | 0.030 | 0.058 | -48.28% |
| Weighted average return on equity (%) | 1.22% | 2.35% | -1.13% |
| Item | 31 March 2019 | 31 December 2018 | Change (%) |
| Total assets (RMB) | 308,295,146,086.00 | 304,028,491,385.00 | 1.40% |
| Equity attributable to the listed company’s shareholders (RMB) | 87,077,785,020.00 | 85,856,748,703.00 | 1.42% |
Exceptional gains and losses:
√ Applicable □ Not applicableUnit: RMB
| Item | Q1 2019 | Note |
| Gain or loss on disposal of non-current assets (inclusive of impairment allowance write-offs) | 265,209.00 | N/A |
| Tax rebates, reductions and exemptions with ultra vires approval or in lack of duly approved document | 0.00 | N/A |
| Government subsidies charged to current profit and loss (exclusive of government subsidies given in the Company’s ordinary course of business at fixed quotas or amounts as per government’s uniform standards ) | 718,192,876.00 | N/A |
| Capital occupation charges on non-financial enterprises that are charged to current gains and losses | 0.00 | N/A |
| Income equal to the amount by which investment costs for the Company to obtain subsidiaries, associates and joint ventures are lower than the Company’s enjoyable fair value of identifiable net assets of investees when making investments | 0.00 | N/A |
| Gains and losses on non-monetary asset swap | 0.00 | N/A |
| Gains and losses on investment or asset management entrustments to other entities | 0.00 | N/A |
| Allowance for asset impairments due to acts of God such as natural disasters | 0.00 | N/A |
| Gains and losses on debt restructuring | 0.00 | N/A |
| Restructuring costs in staff arrangement, integration, etc. | 0.00 | N/A |
| Gains and losses on over-fair value amount as a result of transactions with distinctly unfair prices | 0.00 | N/A |
| Current gains and losses on subsidiaries acquired through business mergers under same control from period-beginning to merger dates, net | 0.00 | N/A |
| Gains and losses on contingencies that do not arise in the Company’s ordinary course of business | 0.00 | N/A |
| Gain or loss on fair-value changes in trading financial assets and liabilities and derivative financial assets and liabilities & investment income from disposal of trading financial assets and liabilities and derivative financial assets and liabilities, and other creditors’ investment (exclusive of effective portion of hedges that arise in the Company’s ordinary course of business) | 45,166,494.00 | N/A |
| Reversed portion of impairment allowance for accounts receivable and contract assets which are tested individually for impairment | 0.00 | N/A |
| Gains and losses on loan entrustment | 0.00 | N/A |
| Gains and losses on fair value changes in investment property of which subsequent measurement is carried out using fair value method | 0.00 | N/A |
| Effects of all adjustments required by taxation, accounting and other applicable laws and regulations on current gains and losses | 0.00 | N/A |
| Income from charges on entrusted management | 0.00 | N/A |
| Non-operating income and expense other than above | 31,130,674.00 | N/A |
| Other gains and losses that meet definition of nonrecurring gain/loss | 0.00 | N/A |
| Less: Income tax effects | 54,217,884.00 | N/A |
| Non-controlling interests effects (net of tax) | 41,059,882.00 | N/A |
| Total | 699,477,487.00 | -- |
Explanation of why the Company reclassifies as recurrent an exceptional gain/loss item defined or listed in the ExplanatoryAnnouncement No. 1 on Information Disclosure for Companies Offering Their Securities to the Public—Exceptional Gain/LossItems:
□ Applicable √ Not applicableNo such cases for the Reporting Period.
II Total Number of Shareholders and Holdings of Top 10 Shareholders at 31 March 2019
1. Numbers of Ordinary Shareholders and Preferred Shareholders with Resumed Voting Rights as well asHoldings of Top 10 Shareholders
Unit: share
| Number of ordinary shareholders at the period-end | 1,612,810 (including 1,573,114 A-shareholders and 39,696 B-shareholders) | |||||
| Top 10 shareholders | ||||||
| Name of shareholder | Nature of shareholder | Shareholding percentage | Total shares held | Restricted shares held | Shares in pledge or frozen | |
| Status | Shares | |||||
| Beijing State-owned Capital Operation and Management Center | State-owned legal person | 11.68% | 4,063,333,333 | 0 | N/A | 0 |
| Chongqing Ezcapital Opto-electronic Industry Investment Co., Ltd. | State-owned legal person | 7.62% | 2,652,813,041 | 0 | N/A | 0 |
| Hefei Jianxiang Investment Co., Ltd. | State-owned legal person | 7.21% | 2,510,142,953 | 0 | N/A | 0 |
| Beijing Yizhuang Investment Holdings Co., Ltd | State-owned legal person | 3.57% | 1,241,423,641 | 0 | N/A | 0 |
| Beijing BOE Investment & Development Co., Ltd. | State-owned legal person | 2.36% | 822,092,180 | 0 | N/A | 0 |
| Hong Kong Securities Clearing Company Ltd. | Foreign legal person | 1.13% | 392,805,995 | 0 | N/A | 0 |
| Beijing Electronics Holdings Co., Ltd. | State-owned legal person | 0.79% | 273,735,583 | 0 | N/A | 0 |
| Central Huijin Assets Management Co., Ltd | State-owned legal person | 0.71% | 248,305,300 | 0 | N/A | 0 |
| National Social Security Fund Portfolio 108 | State-owned legal person | 0.52% | 180,722,899 | 0 | N/A | 0 |
| China Securities Finance Corporation Limited | State-owned legal person | 0.38% | 132,480,249 | 0 | N/A | 0 |
| Top 10 unrestricted shareholders | ||||||
| Name of shareholder | Unrestricted shares held | Shares by type | ||||
| Type | Shares | |||||
| Beijing State-owned Capital Operation and Management Center | 4,063,333,333 | RMB ordinary share | 4,063,333,333 | |||
| Chongqing Ezcapital Opto-electronic Industry Investment Co., Ltd. | 2,652,813,041 | RMB ordinary share | 2,652,813,041 | |||
| Hefei Jianxiang Investment Co., Ltd. | 2,510,142,953 | RMB ordinary share | 2,510,142,953 | |||
| Beijing Yizhuang Investment Holdings Co., Ltd | 1,241,423,641 | RMB ordinary share | 1,241,423,641 |
| Beijing BOE Investment & Development Co., Ltd. | 822,092,180 | RMB ordinary share | 822,092,180 |
| Hong Kong Securities Clearing Company Ltd. | 392,805,995 | RMB ordinary share | 392,805,995 |
| Beijing Electronics Holdings Co., Ltd. | 273,735,583 | RMB ordinary share | 273,735,583 |
| Central Huijin Assets Management Co., Ltd | 248,305,300 | RMB ordinary share | 248,305,300 |
| National Social Security Fund Portfolio 108 | 180,722,899 | RMB ordinary share | 180,722,899 |
| China Securities Finance Corporation Limited | 132,480,249 | RMB ordinary share | 132,480,249 |
| Related or acting-in-concert parties among the shareholders above | 1. Beijing State-owned Capital Operation and Management Center held 100% equities of Beijing Electronics Holdings Co., Ltd. 2. Beijing Electronics Holdings Co., Ltd. held 66.25% equities of Beijing BOE Investment & Development Co., Ltd. and was its controlling shareholder. 3. After the non-public issuing of BOE in 2014, Hefei Jianxiang Investment Co., Ltd. and Chongqing Ezcapital Opto-electronic Industry Investment Co., Ltd., by entering into Implementation Protocol of Voting Right respectively, agreed to maintain all of the shares held by them respectively unanimous with Beijing BOE Investment & Development Co., Ltd. when executing the voting rights of the shareholders. 4. After the non-public issuing of the Company in 2014, Beijing State-owned Capital Operation and Management Center handed over 70% of the shares directly held by it to Beijing Electronics Holdings Co., Ltd. for management through Stock Management Protocol, and Beijing Electronics Holdings Co., Ltd. gained the incidental shareholders’ rights except for disposing right and usufruct of the shares, of which the rest 30% voting right maintained unanimous with Beijing Electronics Holdings Co., Ltd. through the agreement according to Implementation Protocol of Voting Right. 5. Except for the above relationships, the Company does not know any other connected party or acting-in-concert party among the top 10 shareholders. | ||
| Top 10 ordinary shareholders involved in securities margin trading (if any) | None | ||
Indicate by tick mark whether any of the top 10 ordinary shareholders or the top 10 unrestricted ordinary shareholders of theCompany conducted any promissory repo during the Reporting Period.□ Yea √ NoNo such cases in the Reporting Period.
2. Number of Preferred Shareholders and Shareholdings of Top 10 of Them
□ Applicable √ Not applicable
Part III Significant Events
I Changes in Key Financial Statement Line Items and Explanation of why
√ Applicable □ Not applicable1. The current portion of non-current liabilities as at 31 March 2019 rose 35% compared to 31 December 2018, primarily driven bythe transfer of the current portion of long-term borrowings into this item in Q 1 2019.2. Bonds payable as at 31 March 2019 declined 94% compared to 31 December 2018, primarily driven by the advance cashing ofcorporate bonds in Q 1 2019.3. R&D expense went up 88% during Q 1 2019 compared to Q1 2018, primarily driven by a higher amount of R&D investment inQ1 2019.4. Finance costs went up 58% during Q 1 2019 compared to Q1 2018, primarily driven by a smaller exchange loss and a higherinterest expense resulted from the operation of new projects in Q1 2019.5. Asset impairment loss went down 42% during Q 1 2019 compared to Q1 2018, primarily driven by a decrease in the inventoryvaluation allowance recorded in Q1 2019 according to the lower of cost and net realizable value.6. Return on investment went down 84% during Q 1 2019 compared to Q1 2018, primarily driven by a decrease in mature wealthmanagement products in Q1 2019.
II Progress, Influence and Solutions with regard to Significant Events
√ Applicable □ Not applicable1. The wholly-owned subsidiary, BOE Technology (Hong Kong) Co., Ltd., filed lawsuits to Beijing Municipal Higher People's Courtagainst following Defendants: Letv Mobile Intelligent Information Technology (Beijing) Co., Ltd. (referred to as “Letv Mobilehereinafter”) , TV Plus Holdings (Beijing) Limited, Leseil Mobile Technology (Beijing) Co., Ltd. and Jia Yueting, with the totalamount of claims being about US$41.84 million. Beijing Municipal Higher People's Court issued Notice of Case Acceptance andCivil Ruling Paper for property preservation on 6 July 2017 and 31 July 2017 respectively. Letv Mobile raised the jurisdictionobjection to Beijing Municipal Higher People's Court, which was rejected, and also instituted an appeal to the Supreme People'sCourt for verdict on jurisdiction objection. The Supreme People's Court made the final verdict and rejected the appeal of Letv mobile,upholding the original verdict. On 8 March 2019, this case was heard for the first time by Beijing Municipal Higher People’s Court,waiting for the notice or judgment from the court for the next step. For receivables corresponding to aforementioned amount ofclaims, the Company has counted provision for bad debts as per regulations in accounting standard accordingly; therefore, it hasuncertain influences on the Company.2. The corporate bonds (Phase I) of BOE Technology Group Co., Ltd. issued to public qualified investors from 21 March 2016 to 22March 2016 reached 3 full years by 21 March 2019. According to regulations, the interest should be paid once per year during theinterest-bearing period. According to the agreed put provisions from Prospectus of the Corporate Bonds (Phase I) of BOETechnology Group Co., Ltd. Issued to Public Qualified Investors in 2016, the Company published The First Reminder of NoAdjustments to Coupon Rate of Corporate Bonds “16BOE01” and Implementation Measures for Put-backs by Investors(Announcement No.: 2019-001), The Second Reminder of No Adjustments to Coupon Rate of Corporate Bonds “16BOE01” andImplementation Measures for Put-backs by Investors (Announcement No.: 2019-003), and The Third Reminder of No Adjustments toCoupon Rate of Corporate Bonds “16BOE01” and Implementation Measures for Put-backs by Investors (Announcement No.:
2019-004) on 31 January 2019, 1 February 2019, and 12 February 2019 respectively. Investors can choose to sell all their holding
“16BOE01” or part of it back to the Company within the registered period of put-backs with the price of RMB100/piece (excludinginterests). In accordance with the data provided by Shenzhen Branch of China Securities Depository and Cleaning CorporationLimited, the number of the put-backs of “16BOE01” was 96,705,976, and the price was RMB9,975,221,424.40 (including interests),and the remaining number for trusteeship was 3,294,024. The Company issued Announcement on Payment “16BOE01” Interest 2019(Announcement No.: 2019-009) on 14 March 2019, in which the interest should be paid as per the standard of RMB31.5(tax-inclusive) for every 10 bonds. 21 March 2019 was the payment date for capital and interests of this put-back declaration, and theCompany has paid principal and the current interests to the bondholders of “16BOE01” declared effectively for put-back. TheCompany convened the 1
st
Meeting of Bondholders in 2019 for 2016 Corporate Bonds on 28 March 2019, which reviewed andapproved the Proposal on Payment in Advance to 2016 Corporate Bonds of BOE Technology Group Co., Ltd, and the Companydisclosed Announcement on Resolutions Made at the 1
st
Meeting of Bondholders in 2019 for 2016 Corporate Bonds (AnnouncementNo.: 2019-022) on 29 March 2019. The Company paid the interests of “16BOE01” bonds from 21 March 2019 to 2 April 2019 andits principal on 3 April 2019. The Bonds was delisted on 3 April 2019, and the record date of payment for principal and interests was2 April 2019. The trading of “16BOE01” was terminated on the trading system of Shenzhen Stock Exchange on 3 April 2019.3. The Company issued Pre-disclosure Announcement on Stock Reduction of Shareholders with More than 5% Stocks (I)(Announcement No.: 2019-007) and Pre-disclosure Announcement on Stock Reduction of Shareholders with More than 5% Stocks(II) (Announcement No.: 2019-008) on 6 March 2019; shareholders of the Company as Hefei Jianxiang Investment Co., Ltd. andChongqing Ezcapital Opto-electronic Industry Investment Co., Ltd. planned to reduce no more than 1.00% of general capital of theCompany by means of centralized competitive bidding within 3 months after 15 working days since the issuance of eachAnnouncement.
| Summary of the significant event | Disclosure date | Index to the related announcement |
| Announcement on Project of Investing and Establishing Beijing BOE Life Science and Technology Industrial Base (Phase I) | 26 March 2019 | www.cninfo.com.cn |
Progress of any share repurchases:
□ Applicable √ Not applicableProgress of any reduction of the repurchased shares through centralized bidding:
□ Applicable √ Not applicable
III Commitments that the Company’s Actual Controller, Shareholders, Related Parties,Acquirers, the Company Itself or Other Parties, Failed to Fulfill on Time during theReporting Period
□ Applicable √ Not applicableNo such cases in the Reporting Period.
IV Operating Performance Forecast for H1 2019
Warning of a forecast loss on or a forecast significant year-on-year change in the net profit of H1 2019, as well as explanation ofwhy:
□ Applicable √ Not applicable
V Securities Investments
√ Applicable □ Not applicable
| Variety of security | Symbol of security | Name of security | Initial investment cost | Accounting measurement model | Beginning carrying value | Gain/loss of changes in fair value in the Reporting Period | Accumulative changes in fair value recorded into equities | Purchased in the Reporting Period | Sold in the Reporting Period | Gain/loss in Reporting Period | Ending carrying value | Accounting title | Capital source |
| Domestic and overseas stock | HK00903 | TPV Technology | 134,658,158.00 | Fair value method | 25,613,279.00 | 0.00 | 9,987,282.00 | 0.00 | 0.00 | 0.00 | 38,030,589.00 | Other equity instruments investment | Self-owned funds |
| Domestic and overseas stock | SH600658 | Electronic Zone | 90,160,428.00 | Fair value method | 83,995,943.00 | 0.00 | 43,781,546.00 | 0.00 | 0.00 | 0.00 | 90,457,170.00 | Other equity instruments investment | Self-owned funds |
| Domestic and overseas stock | HK01963 | Bank of Chongqing | 120,084,375.00 | Fair value method | 98,705,065.00 | 0.00 | -11,584,716.00 | 0.00 | 0.00 | 0.00 | 108,499,659.00 | Other equity instruments investment | Self-owned funds |
| Domestic and overseas stock | HK06066 | China Securities | 70,041,364.00 | Fair value method | 44,412,575.00 | 0.00 | -1,855,538.00 | 0.00 | 0.00 | 0.00 | 68,185,826.00 | Other equity instruments investment | Self-owned funds |
| Domestic and overseas stock | HK01518 | New Century Healthcare | 140,848,850.00 | Fair value method | 125,909,255.00 | 0.00 | -36,922,892.00 | 0.00 | 0.00 | 0.00 | 103,925,958.00 | Other equity instruments investment | Self-owned funds |
| Other securities investments held at the period-end | 0.00 | -- | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | -- | -- | ||
| Total | 555,793,175.00 | -- | 378,636,117.00 | 0.00 | 3,405,682.00 | 0.00 | 0.00 | 0.00 | 409,099,202.00 | -- | -- | ||
| Disclosure date of the announcement about the board’s consent for the securities investment | N/A | ||||||||||||
| Disclosure date of the announcement about the general meeting’s consent for the securities investment (if any) | N/A | ||||||||||||
VI Investments in Derivative Financial Instruments
□ Applicable √ Not applicableNo such cases in the Reporting Period.
VII Communications with the Investment Community such as Researches, Inquiries andInterviews during the Reporting Period
√ Applicable □ Not applicable
| Date | Way of communication | Type of communication party | Index to main information communicated |
| 17 January 2019 | One-on-one meeting | Institution | Main contents: 1. the main situations of the industry 2. main operating information of the Company 3. innovations of technology and products 4. future strategy layout For details, see www.cninfo.com.cn |
| 21 January 2019 | One-on-one meeting | Institution | |
| 22 January 2019 | One-on-one meeting | Institution | |
| 15 February 2019 | One-on-one meeting | Institution | |
| 25 February 2019 | One-on-one meeting | Institution | |
| 26 March 2019 | One-on-one meeting | Institution |
VIII Irregularities in the Provision of Guarantees
□ Applicable √ Not applicableNo such cases in the Reporting Period.
IX Occupation of the Company’s Capital by the Controlling Shareholder or Its RelatedParties for Non-Operating Purposes
□ Applicable √ Not applicableNo such cases in the Reporting Period.
Chairman of the Board (signature)：Wang Dongsheng
Date of the Board’s approval of this Report: 29 April 2019