Stock Code: 200725 Stock Name: BOE-B Announcement No. 2019-058
BOE TECHNOLOGY GROUP CO., LTD.THIRD QUARTER REPORT 2019 (SUMMARY)
Part I Important NotesThe 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. Chen Yanshun, the Company’s legal representative, Mr. Liu Xiaodong, president of theCompany’s Execution Committee (Chief Executive Officer), Ms. Sun Yun, the Company’sChief Financial Officer, and Ms. Yang Xiaoping, head of the Company’s financial department(equivalent to financial manager) hereby guarantee that the Financial Statements carried inthis 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 InformationI Key Consolidated Financial InformationIndicate by tick mark whether there is any retrospectively restated datum in the table below.
√ Yes □ No
Reasons for the retrospective restatements:
Changes to the accounting policies.
| Item | 30 September 2019 | 31 December 2018 | Change (%) | |
| Before | Restated | Restated | ||
| Total assets (RMB) | 324,400,678,094.00 | 304,028,491,385.00 | 304,028,491,385.00 | 6.70% |
| Equity attributable to the listed company’s shareholders (RMB) | 86,762,736,301.00 | 85,856,748,703.00 | 85,856,748,703.00 | 1.06% |
| Item | Q3 2019 | YoY change (%) | Q1-Q3 2019 | YoY change (%) |
| Operating revenue (RMB) | 30,682,823,546.00 | 18.05% | 85,722,032,233.00 | 23.40% |
| Net profit attributable to the listed company’s shareholders (RMB) | 183,791,110.00 | -54.49% | 1,852,239,559.00 | -45.18% |
| Net profit attributable to the listed company’s shareholders before exceptional items (RMB) | -840,490,839.00 | -332.16% | -189,000,405.00 | -110.13% |
| Net cash generated from/used in operating activities (RMB) | -- | -- | 16,526,989,409.00 | -10.37% |
| Basic earnings per share (RMB/share) | 0.005 | -58.33% | 0.053 | -45.36% |
| Diluted earnings per share (RMB/share) | 0.005 | -58.33% | 0.053 | -45.36% |
| Weighted average return on equity (%) | 0.21% | -55.32% | 2.14% | -45.41% |
Notes:
In the 2018 Annual Report, the net profit attributable to the listed company’s shareholders before exceptional gains and losses wasrestated according to the audit results. According to the interpretations of the regulatory document CK [2018] No.15, governmentsubsidies received, whether related to assets or income, shall be presented as cash generated from operating activities” in the cashflow statements. Above adjustment has no influence on total assets and equity attributable to the listed company’s shareholders forthe end of last year.Exceptional gains and losses:
√ Applicable □ Not applicable
Unit: RMB
| Item | Q1-Q3 2019 | Note |
| Gain or loss on disposal of non-current assets (inclusive of impairment allowance write-offs) | -10,469,354.00 | 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 ) | 1,433,252,399.00 | 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) | 86,944,711.00 | N/A |
| Reversed portion of impairment allowance for accounts receivable and contract assets which are tested individually for impairment | 393,516.00 | 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 | 63,888,377.00 | N/A |
| Other gains and losses that meet definition of nonrecurring gain/loss | 795,126,980.00 | N/A |
| Less: Income tax effects | 87,489,641.00 | N/A |
| Non-controlling interests effects (net of tax) | 240,407,024.00 | N/A |
| Total | 2,041,239,964.00 | -- |
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 applicable
| Item | Amount | Reason |
| Other gains and losses that meet definition of nonrecurring gain/loss | 795,126,980.00 | The Company undertook the transfer and share swap obligations for investments from non-controlling interests of the Company’s subsidiary Hefei Xinsheng Optoelectronics Technology Co., Ltd. (hereinafter referred to as “Hefei Xinsheng”), which was recorded into financial liabilities as applicable accounting standards related to financial instruments. During the Reporting Period, the Company signed the Equity Transfer Agreement with Hefei Heping Investment Company Limited (hereinafter referred to as “Hefei Heping”), in which the Company was agreed to be transferred the 15.3846% shares in Hefei Xinsheng held by Hefei Heping. Once upon completion of this transfer, Hefei |
II Total Number of Shareholders and Holdings of Top 10 Shareholders at 30 September 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 | 1,434,390 (including 1,394,366 A-shareholders and 40,024 B-shareholders） | ||||||
| Top 10 shareholders | |||||||
| Name of shareholder | Nature of shareholder | Shareholding percentage | Number of shares | Restricted shares | 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 Capital Opto-electronic Industry Investment Co., Ltd. | State-owned legal person | 7.60% | 2,643,863,541 | 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 | 3.36% | 1,168,209,006 | 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 | 1.37% | 477,597,769 | 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 | |
| Xiamen Hengxing Group Co., Ltd. | Domestic non-state-owned legal person | 0.47% | 163,345,478 | 0 | N/A | 0 | |
| China Securities Finance Corporation Limited | Domestic non-state-owned legal person | 0.38% | 132,480,249 | 0 | N/A | 0 | |
| Top 10 unrestricted shareholders | |||||||
| Name of shareholder | Unrestricted shares | Shares by type | |||||
| Type | Shares | ||||||
| Beijing State-owned Capital Operation and Management Center | 4,063,333,333 | RMB-denominated ordinary stock | 4,063,333,333 | ||||
| Chongqing Capital Opto-electronic Industry Investment Co., Ltd. | 2,643,863,541 | RMB-denominated ordinary stock | 2,643,863,541 |
| Hefei Jianxiang Investment Co., Ltd. | 2,510,142,953 | RMB-denominated ordinary stock | 2,510,142,953 |
| Beijing Yizhuang Investment Holdings Co., Ltd | 1,168,209,006 | RMB-denominated ordinary stock | 1,168,209,006 |
| Beijing BOE Investment & Development Co., Ltd. | 822,092,180 | RMB-denominated ordinary stock | 822,092,180 |
| Hong Kong Securities Clearing Company Ltd. | 477,597,769 | RMB-denominated ordinary stock | 477,597,769 |
| Beijing Electronics Holdings Co., Ltd. | 273,735,583 | RMB-denominated ordinary stock | 273,735,583 |
| Central Huijin Assets Management Co., Ltd | 248,305,300 | RMB-denominated ordinary stock | 248,305,300 |
| Xiamen Hengxing Group Co., Ltd. | 163,345,478 | RMB-denominated ordinary stock | 163,345,478 |
| China Securities Finance Corporation Limited | 132,480,249 | RMB-denominated ordinary stock | 132,480,249 |
| Related or acting-in-concert parties among 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 Capital 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 | The Company’s shareholder Beijing Yizhuang Investment Holdings Co., Ltd. decreased its shareholding in the Company of 30,709,600 shares for involved in refinancing business. The Company’s shareholder Xiamen Hengxing Group Co., Ltd. holds 42,926,898 shares through the securities margin trading account. | ||
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.
□ Yes √ No
No such cases in the Reporting Period.
2. Number of Preferred Shareholders and Shareholdings of Top 10 of Them
□ Applicable √ Not applicable
Part III Significant EventsI Changes in Key Financial Statement Line Items and Explanation of why
√ Applicable □ Not applicable
1. The Construction in progress as at 30 September 2019 rose 35% compared to 31 December 2018, primarily driven by increasewith the progress of new projects in the Reporting Period.
2. Short-term borrowings as at 30 September 2019 rose 75% compared to 31 December 2018, primarily driven by optimization ofdebt structure and reduction of finance costs in the Reporting Period.
3. The current portion of non-current liabilities as at 30 September 2019 rose 88% compared to 31 December 2018, primarily drivenby the transfer of the current portion of long-term borrowings into this item in the Reporting Period.
4. Bonds payable as at 30 September 2019 declined 96% compared to 31 December 2018, primarily driven by the advance cashing ofcorporate bonds in the Reporting period.
5. R&D expense went up 75% during the Reporting Period compared to the same period of last year, primarily driven by a higheramount of R&D investment in the Reporting Period.
6. Finance costs went down 38% during the Reporting Period compared to the same period of last year, primarily driven by reductionof finance costs arising from repayments of carrying convertible creditor’s rights by the Company during the Reporting Period.
7. Asset impairment loss went up 51% during the Reporting Period compared to the same period of last year, primarily driven by anincrease in the inventory valuation allowance recorded in the Reporting Period according to the lower of cost and net realizablevalue.
8. Return on investment went down 71% during the Reporting Period compared to the same period of last year, primarily driven by adecrease in mature wealth management products in the Reporting Period.
9. Net cash generated from/used in financing activities went up 38% during the Reporting Period compared to the same period of lastyear, primarily driven by the putting in place of the project company’s investment funds as the progress of the new project.
II Progress, Influence and Solutions with regard to Significant Events
√ Applicable □ Not applicable
1. 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 final verdict of the Supreme People's Court is that the appeal of Letv Mobile is
rejected and the original verdict is maintained. On 8 March 2019, the case was first heard in the Beijing Municipal Higher People’sCourt and the next step for the Company is to wait for notice or judgment from the court. For receivables corresponding toaforementioned amount of claims, the Company has counted provision for bad debts as per regulations in accounting standardaccordingly; therefore, it has uncertain influences on the Company.
| Summary of the significant event | Disclosure date | Index to the related announcement |
| Announcement on Signing Supplementary Agreement of Cooperation Agreement on Life Science and Technology Industrial Base Project (II) | 8 September 2019 | www.cninfo.com.cn |
Progress of any share repurchases:
□ Applicable √ Not applicable
Progress 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 applicable
No such cases in the Reporting Period.
IV Securities Investments
√ Applicable □ Not applicable
Unit: RMB
| 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 | -24,470,177.00 | -133,515,055.00 | 0.00 | 0.00 | 471,354.00 | 1,143,103.00 | 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 | 56,125,880.00 | 49,961,395.00 | 0.00 | 0.00 | 1,883,379.00 | 140,121,823.00 | 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 | -4,000,184.00 | -40,472,517.00 | 0.00 | 0.00 | 3,859,812.00 | 98,835,126.00 | Other equity instruments investment | Self-owned funds |
| Domestic and overseas stock | HK06066 | China Securities | 70,041,364.00 | Fair value method | 44,412,577.00 | 12,415,268.00 | -12,468,379.00 | 0.00 | 0.00 | 2,044,411.00 | 58,945,138.00 | Other equity instruments investment | Self-owned funds |
| Domestic and | HK01518 | New Century | 140,848,850.00 | Fair value method | 125,909,253.00 | -72,588,144.00 | -87,705,450.00 | 0.00 | 0.00 | 0.00 | 57,630,071.00 | Other equity instruments | Self-owned funds |
V Wealth Management Entrustment
√ Applicable □ Not applicable
Unit: RMB’0,000 (in RMB ten thousand yuan)
| Type of wealth management | Funding source | Principal | Outstanding amount before maturity | Overdue amount |
| Wealth management product purchased from bank and structural deposits | Self-funded | 674,150 | 455,750 | 0 |
| total | 674,150 | 455,750 | 0 | |
High-risk wealth management entrustments with amounts that are individually significant, or with low security, low liquidity, or no protection of the principal:
□ Applicable √ Not applicable
Wealth management entrustments with possible impairments including an expectedly unrecoverable principal:
□ Applicable √ Not applicable
| overseas stock | Healthcare | investment | |||||||||||
| 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 | -32,517,357.00 | -224,200,006.00 | 0.00 | 0.00 | 8,258,956.00 | 356,675,261.00 | -- | -- | ||
| 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 applicable
No 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 |
| 24 July 2019 | One-on-one meeting | Institution | 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 |
| 27 August 2019 | By phone | Institution | |
| 4 September 2019 | One-on-one meeting | Institution | |
| 12 September 2019 | One-on-one meeting | Institution | |
| 25 September 2019 | One-on-one meeting | Institution | |
| 25 September 2019 | One-on-one meeting | Institution | |
| 26 September 2019 | One-on-one meeting | Individual |
VIII Irregularities in the Provision of Guarantees
□ Applicable √ Not applicable
No 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 applicable
No such cases in the Reporting Period.
Chairman of the Board (signature)：Chen Yanshun Date of the Board’s approval of this Report:30
thOctober 2019