Stock Code: 000020、200020 Public Notice No.: 2022-32Short Form of the Stock: SHEN HUAFA-A, SHEN HUAFA-B
Shenzhen Zhongheng Huafa Co., Ltd.
Summary of Semi-Annual Report 2022
I. Important NoticeThe summary is abstract from full-text of semi-annual report, for more details of operating results, financial condition and futuredevelopment plan of the Company; investors should found in the full-text of semi-annual report that published on media appointedby CSRC.All directors are attended the Board Meeting for report deliberation.Prompt of non-standard audit opinion
□ Applicable √ Not applicable
Profit distribution pre-plan of common stock or capitalizing of common reserves pre-plan deliberated by the Board in the reportingperiod
□ Applicable √ Not applicable
The Company has no plan of cash dividends carried out, bonus issued and capitalizing of common reserves either.Profit distribution pre-plan of preferred stock deliberated and approved by the Board in the reporting period
□ Applicable √ Not applicable
II. Basic information of the company
1. Company profile
| Short form of the stock | Shen HUAFA -A, Shen HUAFA- B | Stock code | 000020 | |
| Stock exchange for listing | Shenzhen Stock Exchange | |||
| Person/Way to contact | Secretary of the Board | Rep. of security affairs | ||
| Name | Niu Zhuo | |||
| Office add. | 618, 6/F, East Tower, No.411 Building, Huafa (N) Road, Futian District, Shenzhen | |||
| Tel. | 0755-86360201 | |||
| huafainvestor@126.com.cn | ||||
2. Main financial data and index
Whether it has retroactive adjustment or re-statement on previous accounting data
□ Yes √ No
| Current Period | Same period last year | Changes in the current reporting period compared with the same period of the previous year (+,-) | |
| Operating revenue (RMB) | 354,146,920.81 | 391,633,808.55 | -9.57% |
| Net profit attributable to shareholders of the listed Company (RMB) | 8,806,785.10 | 6,989,362.48 | 26.00% |
| Net profit attributable to shareholders of the listed Company after deducting non-recurring gains and losses (RMB) | 4,150,928.94 | 7,034,198.78 | -40.99% |
| Net cash flow arising from operating activities (RMB) | 49,720,222.38 | -21,818,369.59 | 327.88% |
| Basic earnings per share (RMB/Share) (note 1) | 0.0311 | 0.0248 | 25.40% |
| Diluted earnings per share (RMB/Share) | 0.0311 | 0.0248 | 25.40% |
| Weighted average ROE | 2.53% | 2.07% | 0.46% |
| End of current period | End of last year | Changes at the end of the reporting period compared with the end of the previous year (+,-) | |
| Total assets (RMB) | 638,152,495.34 | 659,933,225.57 | -3.30% |
| Net assets attributable to shareholder of listed Company (RMB) | 352,257,424.41 | 343,450,639.31 | 2.56% |
3. Number of shareholders and share-holding
Unit: share
| Total common shareholders at period-end | 24,938 | Total preference shareholders with voting rights recovered at end of reporting period (if applicable) | 0 | ||||
| Top ten shareholders | |||||||
| Full name of Shareholders | Nature of shareholder | Proportion of shares held | Amount of shares held | Amount of restricted shares held | Information of shares pledged, tagged or frozen | ||
| State of share | Amount | ||||||
| Wuhan Zhongheng Group | Domestic non-state-owned legal person | 42.13% | 119,289,894 | 0 | Frozen | 119,289,894 | |
| SEG (HONG KONG) CO., LTD. | Overseas legal person | 5.85% | 16,569,560 | 0 | ||
| GOOD HOPE CORNER INVESTMENTS LTD. | Overseas legal person | 2.50% | 7,072,000 | 0 | ||
| Changjiang Securities Brokerage (Hong Kong) Co., Ltd. | Overseas legal person | 1.89% | 5,355,249 | 0 | ||
| Guoyuan Securities Brokerage (Hong Kong) Limited | Overseas legal person | 1.37% | 3,870,117 | 0 | ||
| Li Zhongqiu | Overseas nature person | 1.00% | 2,830,000 | 0 | ||
| Jin Guoping | Domestic nature person | 0.65% | 1,849,300 | 0 | ||
| He Wei | Domestic nature person | 0.64% | 1,818,319 | 0 | ||
| Yao Ming | Domestic nature person | 0.56% | 1,577,300 | 0 | ||
| Li Wei | Domestic nature person | 0.55% | 1,546,800 | 0 | ||
| Explanation on associated relationship among the aforesaid shareholders | Among the top ten shareholders, Li Zhongqiu is the actual controller of Wuhan Zhongheng New Science & Technology Industrial Group Co., Ltd. and is a party acting in concert. The Company neither knew whether there exists associated relationship among the other shareholders, nor they belong to consistent actors that are prescribed in Measures for the Administration of Disclosure of Shareholder Equity Changes of Listed Companies. | |||||
| Explanation on involving margin business (if applicable) | N/A | |||||
4. Changes of controlling shareholders or actual controller
Changes of controlling shareholders in reporting period
□ Applicable √ Not applicable
Changes of controlling shareholders had no change in reporting period.Changes of actual controller in reporting period
□ Applicable √ Not applicable
Changes of actual controller had no change in reporting period.
5. Total preferred stock shareholders of the Company and shares held by top ten shareholders withpreferred stock heldThe Company had no shareholders with preferred stock held in the reporting.
6. Bonds in existence as of the approval date of the semi-annual report
□ Applicable √ Not applicable
III. Important events
(1) The Company signed Asset Exchange Contract with Wuhan Zhongheng New Science & Technology Industrial Group Co., Ltd(hereinafter referred to as Wuhan Zhongheng Group) on 29 April 2009 (details were referred to in the announcement dated 30 April2009), and pursuant to the contract, since part of the assets of the Company (namely two parcel of industrial lands located at Huafaroad, Gongming town, Guangming new district, Shenzhen (the property certificate No. were SFDZ No.7226760 and SFDZNo.7226763, No. of parcels were A627-005 andA627-007, and the aggregate area was 48,200 sq.m) were the lands listed in the firstbatch of plan for 2010 Shenzhen urbanization unit planning preparation plan. For promotion of such urbanization project and jointcooperation, the Company has not completed the transfer procedures in respect of the aforesaid land.The Company convoked the first extraordinary meeting of the Board in 2015 on February 16, 2015 and the first extraordinary generalmeeting of the Board in 2015 on March 4, 2015, which considered and approved the “Motion on promoting and implementing theurban renewal project for the renewal units of Huafa area at Gongming street, Guangming new district, Shenzhen”, specified that theCompany and Wuhan Zhongheng Group shall obtain the corresponding compensatory consideration for removal from therespectively owned project plots and the respectively contributed and constructed above-ground buildings before the landdevelopment, it is estimated that the compensatory consideration obtained by the Company accounts for 50.5% of the totalconsideration and Wuhan Zhongheng Group accounts for 49.5% by calculation.The sixth extraordinary meeting of the board of directors in 2015 and the third extraordinary general meeting of 2015 haveconsidered and adopted the “Proposal on the project promotion and implementation of urban renewal and the progress of relatedtransactions of ‘the updated units at Huafa Area, Gong Ming Street, Guangming New District, Shenzhen’”, the company has signedthe “Agreement on the cooperation of urban renewal project of the updated units at Huafa Area, Gong Ming Street, Guangming NewDistrict, Shenzhen”, “Contract for the cooperative venture of reconstruction project for Huafa Industrial Park, Gong Ming Street,Guangming New District” on 26 August 2015, and “Agreement on housing acquisition and removal compensation and resettlement”with Wuhan Wuhan Zhongheng Group, Shenzhen Vanke Real Estate Co., Ltd. (hereinafter referred to as “Shenzhen Vanke”), andShenzhen Vanke Guangming Real Estate Development Co., Ltd. (hereinafter referred to as “Vanke Guangming”).
On 12 September 2016, Shenzhen Vanke applied for arbitration in respect of “Agreement on the cooperation of urban renewal projectof the updated units at Huafa Area, Gong Ming Street, Guangming New District, Shenzhen” against the Company and WuhanZhongheng Group. Shenzhen Court of International Arbitration (SCIA) has given a ruling in August 2017. On August 29, 2018, thecourt accepted the compulsory execution application of Shenzhen Vanke. In October 2019, as a number of outsiders filed an“execution objection” and applied for “no execution” to Shenzhen Intermediate People’s Court, the Shenzhen Intermediate People’sCourt ruled to terminate the enforcement procedure on March 20, 2020. If the “execution objection” and “no execution” proposed byoutsiders are rejected according to law, Shenzhen Vanke may continue to apply to the Shenzhen Intermediate People’s Court toresume execution.In April 2020, Zhongheng Semiconductor sued the company to Shenzhen Intermediate People’s Court, and requested the company totransfer the above mentioned two pieces of lands and compensate the economic loss of 52 million yuan, the first and second trialjudgments reject the Semiconductor’s appeal; Zhongheng Semiconductor sued the Company and the invalid of “Agreement on thecooperation of urban renewal project of the updated units at Huafa Area, Gong Ming Street, Guangming New District, Shenzhen”signed by Wuhan Zhongheng Group Company and Vanke, the second trial rejects all claims of Zhongheng Semiconductor. Progressof the case found more in the Notices released on Juchao website dated 14 Sept. 2016, 1 Nov. 2016, 16 Nov. 2016, on 18 Feb. 2017,24 March 2017, 25 April 2017, 1 July 2017, 18 August 2017, 9 Feb. 2018, 25 Aug. 2018, 7 Sept. 2018, 21 Apr. 2020, 3 Jun, 2021, 22Jul. 2021 and Mar. 5, 2022 respectively.
(2) On 31 December 2015, the 88,750,047 shares held by Wuhan Zhongheng Group, are pledge to China Merchants Securities AssetsCo., Ltd. with due date of 31 December 2016. On 1 Feb. 2016, Wuhan Zhongheng Group pledge the 27,349,953 shares held to ChinaMerchants Securities Assets Co., Ltd. with due date of 31 December 2016. The above-mentioned pledged shares are deferred byWuhan Zhongheng Group; pledge expired on 31 December 2017. The trading day for repurchase put off to the date when pledgeactually removed. Till end of this period released, controlling shareholder still not removed the pledge and the Company has apply byletter, relevant Notice of Presentment on Stock Pledge from Controlling Shareholder was released. Found more in notice released onJuchao website date 2 Feb. 2018.In March 2021, Wuhan Zhongheng Group received the judgment on case of “pledged securities repurchase dispute” brought byChina Merchants Securities Assets Management Co., Ltd from High People’s Court of Guangdong Province. Wuhan ZhonghengGroup appealed to the Supreme People’s Court against the decision. Found more in notice released on Juchao Website dated March19, 2021.
(3) The controlling shareholder Wuhan Zhongheng Group holds 119,289,894 shares of the Company’ stock, accounting for 42.13%of the total share capital of the Company, of which 116,489,894 shares were judicially frozen by Shenzhen Intermediate People'sCourt (hereinafter referred to as "Shenzhen Intermediate Court") on September 27, 2016, which were frozen again by the ShenzhenIntermediate People's Court on December 14, 2018, with a frozen period of 36 months; the remaining 2,800,000 shares were frozenby the Shenzhen Intermediate People's Court on May 29, 2019, and were frozen again by the Higher People’s Court of GuangdongProvince on July 5, 2019. For details, please refer to the company’s announcements published on Juchao Website dated October 27,2016, January 11, 2019, May 31, 2019 and August 7, 2019.
(4) On September 29, 2016, the company and its controlling shareholder, Wuhan Zhongheng Group, signed the “Agency Contract”with V&T Law Firm. On October 8, 2016, the three parties also signed the “Supplemental Agreement for Agency Contract”, it wasagreed that V&T acted as an agent for the company and Wuhan Zhongheng Group to deal with the arbitration case with ShenzhenVanke. After losing the lawsuit, due to differences in the payment of attorney fees, V&T sued our company and Wuhan ZhonghengGroup to the Shenzhen Court of International Arbitration, and applied to the court to seize a bank account under our company’s nameand part of our company dormitories, please refer to “Other Announcements on the Progress Involving Litigation and Arbitration”
(Announcement Numbers: 2018-43, 2019-02) released on Juchao Website dated November 14, 2018 and March 6, 2019. InNovember 2019, the Shenzhen Court of International Arbitration ruled that the company and Wuhan Zhongheng Group paid thecorresponding fees. According to the relevant agreement of the “Entrusted Agency Contract” and “Supplementary Agreement” signedby the three parties, loss of the ruling in the case shall be fully borne by Wuhan Zhongheng Group, therefore, it has no impact on theprofit of the Company. Found more on “Other Announcements on the Progress Involving Litigation and Arbitration” (AnnouncementNo.: 2019-34) released on Juchao Website dated November 25, 2019.(v) Business of the Company - Styrofoam is a traditional manufacturing industry. The industry has stepping into the maturity withsevere overcapacity, the oversupply leads to a low gross margin and downward trend of profitability of the Company’s products. The“proposal to shut down the Styrofoam business from wholly-owned subsidiary” was deliberated and approved by the third interimmeeting of BOD of 2022. Closure of the plant is progressing steadily.