Stock code: 000012; 200012 Short form of the stock: CSG A; CSG B Notice No.: 2020-062Bond code: 149079 Short form of the bond：20 CSG 01
CSG HOLDING CO., LTD.
SUMMARY of SEMI-ANNUAL REPORT 2020
Chairman of the Board:
Chen Lin
August 2020
I. Important noticeThe summary of semi-annual report is excerpted from the full text of the semi-annual report. Inorder 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 has no plans of cash dividend distribution, bonus shares being sent or convertingcapital reserve into share capital.
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 Company
1. 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 securities 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 indexes
Whether it has retroactive adjustment or re-statement on previous accounting data for accountingpolicy changed and accounting error correction or not
□Yes √ No
| The report period (Jan. to Jun.2020) | The same period of last year | Increase/decrease year-on-year | |
| Operating income (RMB) | 4,424,221,349 | 4,888,237,578 | -9.49% |
| Net profit attributable to shareholders of the listed company (RMB) | 391,466,723 | 377,342,401 | 3.74% |
| Net profit attributable to shareholders of the listed company after deducting non-recurring gains and losses (RMB) | 358,644,297 | 283,939,444 | 26.31% |
| Net cash flow arising from operating activities (RMB) | 779,644,389 | 767,982,465 | 1.52% |
| Basic earnings per share (RMB/Share) | 0.13 | 0.12 | 8.33% |
| Diluted earnings per share (RMB/Share) | 0.13 | 0.12 | 8.33% |
| Weighted average ROE | 4.08% | 4.09% | -0.01% |
| End of this period | End of last year | Increase/decrease in this period-end over that of last year-end | |
| Total assets (RMB) | 19,364,312,707 | 18,201,235,959 | 6.39% |
| Net assets attributable to shareholders of the listed company (RMB) | 9,671,644,531 | 9,495,588,878 | 1.85% |
3. Amount of shareholders of the Company and particulars about shareholding
Unit: share
| Total amount of shareholders at the end of the report period | 147,420 | 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. – HailiNiannian | Domestic non state-owned legal person | 15.19% | 466,386,874 | ||||||
| Foresea Life Insurance Co., Ltd. – Universal Insurance Products | Domestic non state-owned legal person | 3.86% | 118,425,007 | ||||||
| Zhongshanruntian Investment Co., Ltd. | Domestic non state-owned legal person | 2.82% | 86,633,447 | Pledged | 81,000,000 | ||||
| Foresea Life Insurance Co., Ltd. – Own Fund | Domestic non state-owned legal person | 2.11% | 64,765,161 | ||||||
| Hong Kong Securities Clearing Company Limited | Foreign legal person | 1.93% | 59,415,950 | ||||||
| Central Huijin Asset Management Ltd. | State-owned legal person | 1.89% | 57,915,488 | ||||||
| China Galaxy International Securities (Hong Kong) Co., Limited | Foreign legal person | 1.35% | 41,349,778 | ||||||
| China Merchants Securities (HK) Co., Limited | State-owned legal person | 1.06% | 32,423,421 | ||||||
| Shenzhen International Holdings (SZ) Limited | State-owned legal person | 0.95% | 29,095,000 | ||||||
| VANGUARD EMERGING MARKETS STOCK INDEX FUND | Foreign legal person | 0.62% | 19,177,013 | ||||||
| Statement on associated relationship or consistent action among the above shareholders: | Among shareholders as listed above, Foresea Life Insurance Co., Ltd.-HailiNiannian, 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 40,187,904 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 | ||||||||
4. Changes of controlling shareholder or actual controller
Changes 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 Bonds
Does the company have corporate bonds that are publicly issued and listed on the stock exchangeand are not due on the approval date of the semi-annual report or are not fully cashed when they aredueYes
| Name | Short name | Bond code | Issue date | Maturity date | Bond balance (RMB 0,000) | Interest rate | Way of repayment of principal and interest |
| CSG Holding Co., Ltd. Public issue of corporate bonds to qualified investors in 2020 (phase I) | 20 CSG 01 | 149079 | 2020-3-24 to 2020-3-25 | 2023-3-25 | 199,165 | 6% | Use simple interest to calculate the annual interest, excluding compound interest. Interest is paid once a year, principal is repaid once due, and the last installment of interest is paid together with the principal. |
III. Business Discussion and Analysis
1. Brief introduction to operation situation in the report period
At the beginning of 2020, a sudden outbreak of COVID-19 brought about a stern test to the nationaleconomy.After the outbreak of the epidemic, the Company resolutely implemented the strategic deploymentof the CPC Central Committee, to start the "war time" command system, and to lay out epidemicprevention and control measures. CSG and its subsidiaries firmly implemented the requirements ofthe governments at all levels, and in accordance with the instructions of "Unswervinglyemphasizing epidemic prevention and going all out to secure production", on one hand, theCompany strictly controlled the epidemic prevention, and on the other hand, it paid close attentionto safe resumption of work and production. The Company has 6 subsidiaries in Hubei Province, theregion that was seriously affected by the epidemic, and the production and operation of thosesubsidiaries were affected to a certain extent for their production, sales and logistics were greatlyaffected by the epidemic. In order to fulfill the social responsibility of a listed company and meetthe urgent demand for protective materials during the epidemic period, the Company activelyresponded to the call of the state and the government to switch to the production of masks anddisinfection products (84 disinfectant), by making use of over 30 years experience in manufacturingtechnology, production and management and its own advantages in production capacity and
resources, as well as overcoming the difficulties of insufficient equipment, staff and raw materialsduring the epidemic period, and actively undertook the production task of the materials whichShenzhen government reserved up for epidemic prevention and control. During the epidemic period,the Company actively allocated and donated about RMB 15 million of funds and materials forepidemic prevention and control to the places where the headquarter and its subsidiaries located,which suffered a lot from the epidemic such as Hubei and Guangdong etc., and donated 10 millionself-made masks to Shenzhen government, to support the local governments in fighting against theepidemic. As the Company was fully prepared for epidemic response, it timely firmed up thedifferentiated operation strategy according to market changes, adjusted the operation direction, andcontinued to reduce cost and increase efficiency. Although the operating income has decreased yearon year, the net profit achieved a positive growth. In the first half year of 2020, the Companyachieved operating income of RMB 4,424 million with a year-on-year decrease of 9.49%, net profitof RMB 402 million, with a year-on-year increase of 3.91%, and net profit attributable to the parentcompany of RMB 391 million, with a year-on-year increase of 3.74%; within which achieved ayear-on-year increase of 26.31% after deducting non-recurring gains and losses.According to the development trend of the industry and its own advantages and characteristics, theCompany further clarified its development strategy, putting forward the strategy that it adheres tothe principle of making glass industry, its core business, bigger and stronger by polishing "ThreePieces of Glass" (float glass, PV glass, electronic glass), building a brand (engineering glass),taking advantage of its leading superiority in the business in terms of brand, technology andmanagement, improving the industrial scale through horizontal integration and vertical industrialchain extension, exporting its technology and management to improve the quality of the industry,turning the advantages of CSG's technology and management into the advantages of market shareand benefit contribution, and improving the status as a leading enterprise in the industry. During theepidemic period, the Company signed an investment agreement with Fengyang County Governmentof Anhui Province to build a manufacturing base of lightweight & high-permeability panel for solarenergy equipment. At the same time, it applied for non-public issuance of A shares to raiseconstruction funds, and soon obtained the approval of CSRC. At present, the issuance work isactively promoted, which will lay a solid foundation for the Company's future strategicdevelopment.Glass industry:
In the face of adverse effects brought to the glass industry and the upstream and downstreamenterprises by the outbreak of COVID-19, the Company responded positively by adopting effectivemeasures, and the net profit of its glass industry bucked the trend and got increased. In the first halfyear of 2020, the glass industry achieved operating income of RMB 3,592 million a year-on-yeardecrease of 2.14% and net profit of RMB 450 million, with a year-on-year increase of 26.90%. Thedetail is as follows:
Flat glass: Affected by the epidemic, the price and sales volume of float glass fluctuated on ayear-on-year base. In response to the periodic adjustment of the market, the Company took effectivemeasures including reducing costs through centralized procurement and development of newsuppliers, increasing the proportion of differentiated products and high value-added products toenhance profitability, and achieved positive growth of net profit under the impact of the epidemic.The solar glass achieved a significant increase in net profit year-on-year through actively seizingexport orders and increasing the strategy of double-glass products during the epidemic period,which contributed significantly to the overall performance of the Group.Architectural glass: The overseas market of architectural glass was fairly good in the first quarter,but affected by the epidemic, the resumption of work was delayed compared with that in previousyears, and the logistics was also greatly affected. By going all out to resume production in thesecond quarter, the overall business performance in the first half of the year was better than
expected. Through the continuous implementation of differentiated product development andpromotion, equipment automation and informatization, cost reduction and efficiency improvementand cost assessment, the architectural glass kept stable business operation. Under the impact of theepidemic, it showed a strong operational ability in the face of severe market.Electronic glass and display industry:
The Company has 5 manufacturing subsidiaries in the electronic glass and display industry, ofwhich 3 are located in Hubei Province. The resumption of work was delayed in the first quarter andproduction, sales, logistics and other aspects were greatly affected by the epidemic, but graduallyreturned to normal in the second quarter. In order to continuously expand the high-end market ofelectronic glass and produce higher generation products, the Company took the initiative to suspendproduction of Qingyuan phase I for technical transformation at the end of April this year. Therefore,the production and sales volume of the industry decreased year-on-year. In the first half year of2020, the electronic glass and display industry achieved operating income of RMB 405 million witha year-on-year decrease of 20.56%, and net profit of RMB 54 million, with a year-on-year decreaseof 48.56%.The Company firmly followed the development route of product upgrade and acceleration of importsubstitution. After conquering the technology of the new generation of high aluminum electronicglass, Xianning Photoelectric successfully achieved mass production of the second generation highaluminum glass in the first half of 2020, and the excellent performance of the product can meet thedownstream terminal customers' higher standard requirements for basic materials in the fields of 3Dcurved surface technology and 5G communication solutions, the technological level of which canbe comparable with foreign advanced level. At present, the product has been introduced to domesticwell-known mobile phone enterprises, and its market promotion is in smooth progress. At the sametime, the construction of one kiln and two lines for electronic glass in Qingyuan phase II project isbeing accelerated, and it is expected to ignite at the end of September this year. Although affectedby the epidemic and production line upgrading in a short time, with the construction of newproduction lines, the application of new technologies, the gradual increase of the proportion ofhigh-end products, and the acceleration of import substitution process, the future development ofelectronic glass and display industry will continue to be better.Solar Energy and other industries:
Silicon material base of solar energy industry located in Hubei Province, was seriously affected bythe epidemic. Apart from stopping production of polysilicon for technological upgrading, siliconwafer was out of production before April, and gradually resumed production after April. As theoverseas PV market was also affected by the epidemic, the delivery speed of PV products sloweddown, but the production and sales gradually recovered in the second half of the second quarter andthe market gradually improved.In order to respond to the epidemic and fulfill its social responsibility, the Company invested andestablished Shenzhen CSG Medical Technology Co., Ltd. during the critical period of the epidemic,which produced masks, and took the initiative to undertake the production task of the materialswhich Shenzhen government reserved up for epidemic prevention and control At the same time, itmade use of the existing cell workshop purification workshop and PV cell beat-type production andenvironmental purification production experience of Dongguan PV-tech Co., Ltd. to produceanti-epidemic materials such as masks to meet the urgent market demand for protective materials,and donated more than 10 million self-made masks to Shenzhen and other places, which achievedgood social and economic benefits.With the joint efforts of the Group, its solar energy and otherbusinesses achieved operating income of RMB 479 million and net profit of RMB 1 million in thefirst half of 2020 under the influence of the epidemic.
2. Matters relevant to financial report
(1) Particulars about the change of accounting policy, accounting estimate and accountingmethod compared with last accounting period
√Applicable □ Not applicable
On July 5, 2017, the Ministry of Finance issued new Accounting Standards for Business EnterprisesNo. 14 - Revenue (Accounting [2017] No. 22). According to the regulations, for the enterpriseslisted both at home and abroad and enterprises listed abroad which prepared financial statements byadopting international financial reporting standards or accounting standards for business enterprises,the new accounting standard shall be implemented from January 1, 2018, while for other domesticlisted enterprises, it shall be implemented from January 1, 2020. The Group has adopted the abovestandards and notices to prepare the semi-annual financial report 2020. The revised income standardhas no significant impact on the Croup and the Company.Details can be found on the Company's Announcement of Accounting Policy Changes which waspublished on Juchao website (www.cninfo.com.cn) on April 30, 2020.
(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 applicable
On January 7, 2020, the Group set up a subsidiary, CSG (Thailand) Co., Ltd. As of June 30, 2020,the Group has invested USD 808,000. The Group owns 100% of its equity.
On February 5, 2020, the Group set up a subsidiary, Anhui CSG New Energy Materials TechnologyCo., Ltd. As of June 30, 2020, the Group has invested RMB 3 million. The Group owns 100% of itsequity.
On February 8, 2020, the Group set up a subsidiary, Anhui CSG New Quartz Material Co., Ltd. Asof June 30, 2020, As of June 30, 2020, the Group has invested RMB 3 million. The Group owns100% of its equity.
On February 10, 2020, the Group set up a subsidiary, Shenzhen CSG Medical Technology Co., Ltd.As of June 30, 2020, As of June 30, 2020, the Group has invested RMB 20 million. The Groupowns 100% of its equity.
Board of Directors ofCSG Holding Co., Ltd.24 August 2020