Summary of 2023 Annual Report of Shenzhen Textile (Holdings) Co., Ltd.Stock code: 000045,200045 Stock Abbreviation: Shen Textile A, Shen Textile B Announcement No. :2024-11
Summary of 2023 Annual Report of Shenzhen Textile
(Holdings) Co., Ltd.
I. Important notesThe summary is abstract from full-text of annual report, for more details information , investors should found inthe full-text of annual report that published on website of Shenzhen Stock Exchange and other website appointedby CSRC.All directors personally attended the Board meeting at which the Annual Report was considered.Non-standard auditor’s opinion
□ Applicable √Not applicable
Preliminary plan for profit distribution to the common shareholders or turning the capital reserve into the sharecapital for the reporting period, which has been reviewed and approved at the board meeting
√Applicable □ Not applicable
The Company has plan of Converting provident fund to share capital .
□ Applicable √Not applicable
The company’s profit distribution plan approved by the board of directors this time is: based on 506,521,849shares, a cash dividend of 0.65 yuan (tax included) will be distributed to all shareholders for every 10 shares, and0 shares (tax included) will be given as bonus shares. The capital reserve will not be converted into share capital.The profit distribution plan for preferred stocks for the reporting period passed by the board of directors
□ Applicable √Not applicable
II. Basic information about the company
1. Company profile
| Stock abbreviation | Shen Textile A，Shen Textile B | Stock code | 000045，200045 | |
| Stock exchange for listing | Shenzhen Stock Exchange | |||
| Contact person and contact manner | Board secretary | Securities affairs Representative | ||
| Name | Jiang Peng | Li Zhenyu | ||
| Office Address | 6/F, Shenfang Building, No.3 Huaqiang North Road, Futian District, Shenzhen | 6/F, Shenfang Building, No.3 Huaqiang North Road, Futian District, Shenzhen | ||
| Fax | 0755-83776139 | 0755-83776139 | ||
| Tel | 0755-83776043 | 0755-83776043 | ||
| jiangp@chinasthc.com | lizy@chinasthc.com | |||
2. Brief introduction to the main business or products in the reporting period
(1) The company's main business
The company's main business covered such the high and new technology industry as represented by LCD polarizer, its own propertymanagement business and the retained business of high-end textile and garment.During the reporting period, the Company's main business has not changed significantly.
Summary of 2023 Annual Report of Shenzhen Textile (Holdings) Co., Ltd.First, the Company actively adjusts the product structure, implements the product differentiation strategy, further optimizes theproduct structure, increases the proportion of large-size products, increases the market share of high-value products, implements thepolicy of "ensuring utilization" and seizes market share; Second, it carries out lean management in depth, continuously strengthensefficiency improvement, significantly reduces production line switching time, reduces production costs and strengthens productionmanagement by unifying production technology, to continuously reduce the loss rate of main raw materials, and increase the productyield rate to a higher level in the industry; Third, it strengthens the guidance of innovation, accelerates the construction of amarket-oriented and professional R&D management system, focuses on key technologies and product research, completes theprocess optimization and upgrading of No.4 wide production line, realizes the mass production delivery of 55-inch and 65-inchhigh-transmittance OLED TV polarizers, and completes the development of high alkali-resistant fixed-curvature OLED mobilephone polarizers; Fourth, it actively promotes the elimination of enterprises with "non-main business assets non-dominant businessassets, inefficient assets and ineffective assets", steadily promotes the survival of the fittest, promotes the concentration of resourcesfrom non-non-main business to main business, and improves the efficiency of resource allocation; Fifth, it strengthens supervisionand management, well ensures work safety, formulates safety management system, strengthens safety training and education, carriesout safety risk management and control, investigates and rectifies hidden dangers, consolidates weak links and prevents accidents;Sixth, it continues to well ensure the lease of its own property, improves service quality, and carries out the improvement of textilebusiness operation; Seventh, it promotes major asset restructuring, and actively promotes the audit, evaluation, due diligence andother work involved in this transaction with relevant parties.
(2) Main products and their purposes
Currently, the Company has 7 mass production lines for polarizers, covering TN, STN, TFT, OLED, 3D, dye sheet, optical film fortouch screen and other fields, mainly used in TV, NB, navigator, Monitor, vehicle, industrial control, instruments, smart phones,wearable devices, 3D glasses, sunglasses and other products，the company has become a mainstream panel company such as HuaxingOptoelectronics, BOE, Sharp, LGD, Shenzhen Tianma, Huike, etc. by continuously strengthening sales channel expansion andbuilding its own brand. Qualified suppliers.The Company's main products made in each polarizer production line and their application are as follows:
| Line | Place | Product breadth | Planned capacity | Main projuct |
| Line 1 | Pingshan | 500mm | 600，000 m2 | TN/STN/ Dye sheet |
| Line 2 | Pingshan | 500mm | 1.2 million m2 | TN/STN/CSTN |
| Line 3 | Pingshan | 650mm | 1 million m2 | TFT |
| Line 4 | Pingshan | 1490mm | 6 million m2 | TFT/OLED |
| Line 5 | Pingshan | 650mm | 2 millin m2 | TFT/OLED |
| Line 6 | Pingshan | 1490mm | 10 million m2 | TFT/OLED |
| Line 7 | Pingshan | 2500mm | 32 millin m2 | TFT/OLED |
(3) Industry information of the Company during the reporting period
Polarizers are also known as polaroid, which can control the polarization direction of specific light beams. When natural light passesthrough the polarizer, the light whose vibration direction is perpendicular to the transmission axis of the polarizer will be absorbed,leaving only polarized light whose vibration direction is parallel to the transmission axis of the polarizer. The downstream polarizer ismainly used in the panel industry. According to different panel types, polarizers mainly include TN, STN, TFT and OLED. Currently,the global polarizer market is dominated by polarizers for TFT-LCD panels. Each LCD panel requires two polarizers.The high-quality development of the polarizer industry has a profound impact on the entire display industry. As one of the three coreraw materials for display panels, the demand for polarizers is directly affected by the fluctuations in the display panel market. Inrecent years, with the accelerated transfer of the global display panel industry to Chinese Mainland, China's polarizer industry hasushered in a stage of rapid development. The capacity scale and process technology level of domestic polarizer manufacturers havecontinued to rise. The status and influence of China's polarizer industry in the global market have significantly improved, andChinese Mainland has become the world's largest polarizer production base.The company is one of the main domestic polarizer research and development, production, and sales enterprises. It is a pioneer in thepolarizer industry in China and has now developed into a leading enterprise in the domestic polarizer industry, becoming animportant supplier of mainstream panel enterprises worldwide. In 2023, affected by the severe and complex global economic andpolitical situation, global demand for display panels and terminal markets has slowly recovered. However, polarizer companies stillface significant operational pressures such as intensified market competition, declining sales prices, and rising raw material costs.
(4)Industry competition pattern
Polarizer industry is a highly concentrated industry. Currently, there are about 10 major polarizer manufacturers worldwide, mainly inmainland China, Japan, South Korea and Taiwan Province of China.With the transfer of production capacity and the expansion ofChinese mainland manufacturers, mainland China has become the largest polarizer production base in the world. According to Omdiadata, by the end of 2023, the global share of Chinese Mainland's polarizer capacity scale is about 54.91%. It is estimated that by 2027,the share of Chinese Mainland's polarizer capacity scale will further increase to 69.66%. In the competition of ultra wide polarizerproduction line brought about by the rapid growth of demand for 65 inch and above large-size display products, Chinese Mainland isin the forefront of the industry. According to Omdia data, by the end of 2023, there are 12 ultra wide production lines with a length of
2.3 meters or more in the world, of which 11 have been built in Chinese Mainland. Polarizer enterprises with good production andoperation capacity of ultra wide production lines will occupy a favorable position in the market competition.
(5) Market position of company products
The company is one of the main polarization film research and development, production, and sales enterprises in China. It began toengage in polarization film business in 1995 and achieved mass production of the first polarization film in China in 1998. It is apioneer in the polarization film industry in China and has now mastered the core technology of TN/STN, TFT-LCD, OLED displaypolarization film research and production. It is one of the few polarization film manufacturers in China with the ability to produce afull range of large, medium, and small size polarization film products. It is the first to achieve mass production of polarization filmsfor OLED TVs and OLED phones, filling the domestic gap.The company mainly produces polarizing film products for medium and large-sized TFT-LCD. The company's Line 7 is one of thefew 2500mm ultra wide polarizing film production lines in the world, which can meet the needs of higher generation panelproduction lines such as the 8.5/8.6/10.5/11 generation globally. Especially matching the 10.5/11 generation line has the besteconomic production efficiency, and has industry-leading advantages in the technical level and production capacity of ultra large andlarge-sized products.
3.Major accounting data and financial indicators
(1)Major accounting data and financial indicators for the last three years
Whether it has retroactive adjustment or re-statement on previous accounting data
√Yes □ No
Retroactive adjustment or restatement of causesAccounting policy change and Correction of accounting errors
In RMB
| End of 2023 | End of 2022 | Changed over last year（％） | End of 2021 | |
| Gross assets（Yuan） | 5,649,822,363.44 | 5,617,137,367.90 | 0.58% | 5,563,539,326.16 |
| Net assets attributable to shareholders of the listed company（Yuan） | 2,882,152,266.22 | 2,849,264,555.21 | 1.15% | 2,811,366,974.46 |
| 2023 | 2022 | Changes of this period over same period of Last year(%) | 2021 | |
| Operating income（Yuan） | 3,079,678,375.45 | 2,837,988,264.36 | 8.52% | 2,330,061,681.00 |
| Net profit attributable to the shareholders of the listed company（Yuan） | 79,268,250.45 | 73,309,182.94 | 8.13% | 55,733,468.82 |
| Net profit after deducting of non-recurring gain/loss attributable to the shareholders of listed company（Yuan） | 62,328,667.73 | 61,951,894.68 | 0.61% | 41,288,192.98 |
| Cash flow generated by business operation, net（Yuan） | 184,766,739.80 | 490,238,550.60 | -62.31% | -4,436,980.35 |
| Basic earning per share(Yuan/Share) | 0.16 | 0.14 | 14.29% | 0.11 |
| Diluted gains per share(Yuan/Share) | 0.16 | 0.14 | 14.29% | 0.11 |
| Weighted average ROE(%) | 2.77% | 2.59% | 0.18% | 2.00% |
(2)Main Financial Index by Quarters
In RMB
| First quarter | Second quarter | Third quarter | Fourth quarter | |
| Operating income | 679,306,013.14 | 810,789,656.41 | 827,289,643.21 | 762,293,062.69 |
| Net profit attributable to the shareholders of the listed company | 13,108,613.21 | 23,198,549.76 | 30,277,434.06 | 12,683,653.42 |
| Net profit after deducting of non-recurring gain/loss attributable to the shareholders of listed company | 7,600,013.36 | 16,086,591.17 | 28,366,690.84 | 10,275,372.36 |
| Net Cash flow generated by business operation | 2,240,056.33 | 12,162,917.27 | 50,337,535.36 | 120,026,230.84 |
Whether significant variances exist between the above financial index or the index with its sum and the financialindex of the quarterly report as well as semi-annual report index disclosed by the Company.
□ Yes √No
4.Share capital and shareholders
(1)Number of holders of ordinary shares and preference shares with restored voting right and Top 10 shareholders
In shares
| Total number of common shareholders at the end of the reporting period | 26,709 | Total shareholders at the end of the month from the date of disclosing the annual report | 26,787 | The total number of preferred shareholders voting rights restored at period-end(if any) | 0 | Total preferred shareholders at the end of the month from the date of disclosing the annual report(if any) | 0 | |||||
| Shareholdings of top 10 shareholders | ||||||||||||
| Shareholders | Nature of shareholder | Proportion of shares held(%) | Number of shares held at period -end | Amount of restricted shares held | Number of share pledged/frozen | |||||||
| State of share | Amount | |||||||||||
| Shenzhen Investment Holdings Co., Ltd. | State-owned legal person | 46.21% | 234,069,436 | |||||||||
| Shenzhen Shenchao Technology Investment Co., Ltd. | State-owned Legal person | 3.18% | 16,129,032 | |||||||||
| Sun Huiming | Domestic Nature person | 1.26% | 6,399,653 | |||||||||
| Su Weipeng | Domestic Nature person | 0.71% | 3,580,000 | Pledge | 2,800,000 | |||||||
| China Construction Bank Co., Ltd－Xinao new energy industry equity securities investment fund | Other | 0.60% | 3,049,784 | |||||||||
| Chen Zhaoyao | Domestic Nature person | 0.60% | 3,035,100 | |||||||||
| Chen Xiaobao | Domestic Nature person | 0.59% | 3,002,384 | |||||||||
| Li Zengmao | Domestic Nature person | 0.56% | 2,831,397 | |||||||||
| Peng Xun | Domestic Nature person | 0.38% | 1,920,500 | |||||||||
| HKSCC | Overseas Legal person | 0.36% | 1,843,603 | |||||||||
| Related or acting-in-concert parties among shareholders above | Among the top 10 common shareholders, Shenzhen Investment Holdings Co., Ltd. and Shenzhen Shenchao Technology Investment Co., Ltd. do not constitute a concerted party relationship. In addition, the company does not know whether there is an associated relationship among the top 10 ordinary shareholders, and between the top 10 ordinary shareholders and the top 10 shareholders, or whether they are persons taking concerted action defined in Regulations on Disclosure of Information about Shareholding of Shareholders of Listed Company. | |||||||||||
| Explanation on shareholders participating in the margin trading business(if any ) | None | |||||||||||
Lending of shares by the top ten shareholders participating in refinancing business
□ Applicable √ Not applicable
The top ten shareholders have changed from the previous period?Applicable □Not applicable
In Shares
| Changes of the top ten shareholders compared with the end of the previous period | |||||
| Name of shareholder (full name) | Addition/Withdrawal in this reporting period | Number of shares lent by refinancing at the end of the period and not yet returned | Number of shares held by shareholders in general accounts and credit accounts and lent by refinancing at the end of the period and not yet returned | ||
| Total quantity | Proportion of total share capital | Total quantity | Proportion of total share capital | ||
| HKSCC | Newly increased | 0 | 0.00% | 1,843,603 | 0.36% |
| Zhangzhou Xiaotian Venture Investment Co., Ltd. | Left | 0 | 0.00% | 0 | 0.00% |
(2)Number of the preference shareholders and the shareholdings of the top 10 of them
□ Applicable √Not applicable
No preference shareholders in the reporting period
(3)Relationship between the Company and its actual controller in the form of diagram
5. Corporation bonds
□ Applicable √Not applicable
III. Significant events(I) Issue shares to purchase assets and raise supporting fundsAccording to the relevant regulations of Shenzhen Stock Exchange, upon the application of the company, theshares of the company were suspended from trading on the morning of December 19, 2022. On December 30,2022, the company held the nineteenth meeting of the Eighth Board of Directors and the thirteenth meeting of theEighth Board of Supervisors, and deliberated and passed the Proposal on the "Plan for Shenzhen Textile (Group)Co., Ltd. to Issue Shares, Pay Cash to Purchase Assets and Raise Matching Funds and Related Party Transactions"and Its Summary and other proposals related to this transaction. The Company intends to purchase 100% equity ofHengmei Optoelectronics Co., Ltd. by issuing shares and paying cash, and at the same time, it plans to raisematching funds from non-public offering of shares to no more than 35 qualified specific targets (hereinafterreferred to as "this transaction"). The company's shares resumed trading on the morning of January 3, 2023.On June 28, 2023, due to the upcoming expiration of the validity period of the financial data of the targetcompany in this transaction, the intermediary agency planned to conduct additional audit and supplementary due
Summary of 2023 Annual Report of Shenzhen Textile (Holdings) Co., Ltd.diligence, and the Company still needs to communicate with the counterparty to negotiate the details of thetransaction, so the Company could not disclose the draft restructuring report within six months and issue a noticeon the convening of General Meeting of Shareholders. After the parties to the transaction reached an agreementthrough consultation, the Company continued to promote the transaction, and disclosed a special explanationannouncement according to relevant requirements. For details, please refer to Announcement No.2023-29 of theCompany on CNINF (http://www.cninfo.com.cn).Due to the changes in the shareholders and shareholding ratio of the target company Hengmei Optoelectronicsduring the reorganization, it is necessary to adjust the counterparty of this restructuring and the transaction planaccording to the requirements of the relevant rules of the registration system. On November 17, 2023, theCompany reconvened the meeting of the Board of Directors to review and approve the revised draft of thistransaction plan, and adjusted the pricing base date, issue price and counterparty of this transaction plan.Atpresent, while intermediaries continue to promote the overtime audit, evaluation and supplementary due diligenceof the target company, the Company further negotiates the transaction details with the counterparty to consolidatethe restructuring transaction plan. After the transaction plan is determined and the state-owned assets examinationand approval procedures are fulfilled, the Company will convene the meeting of the Board of Directors again toconsider matters related to this transaction.This restructuring is the adjustment and optimization of the Company's main polarizer business in the face of therapidly developing new display industry environment. Through the integration of high-quality resources in thesame industry and the realization of large-scale development, the restructuring will help the Company to optimizethe industrial chain layout in the polarizer industry, deepen the depth of technical reserves, enhance its corecompetitiveness, enhance its overall profitability, give full play to the synergistic effect, and help it become abigger and stronger listed company.
(2)Disposal of assets of the joint venture company Shenzhen Xieli
Shenzhen Xieli Automobile Enterprise Co., Ltd. (hereinafter referred to as "Shenzhen Xieli") is a Sino foreignjoint venture established by the company and Hong Kong Xieli Maintenance Company in 1981, with a registeredcapital of 3.12 million yuan. The company holds 50% of the equity. The company's operating period ended in2008 and its business license was revoked in 2014. The company's main assets are real estate. In March 2020,Shenzhen Xieli Industrial and Commercial Co., Ltd. has been cancelled, but there are still three properties underits name that need to be resolved through further negotiation between the shareholders of both parties.On July 26, 2021, the Company filed a complaint with the People's Court of Yantian District, Shenzhen City,Guangdong Province to revoke the approval of cancelation of Shenzhen Xieli Automobile Enterprise Co., Ltd bytheShenzhen Market Supervision and Administration Bureau. In November 2021, the court ruled to revoke theaforementioned approval of cancellation. Hong Kong Xieli Maintenance Company and Shenzhen MarketSupervision and Administration Bureau were not satisfied and submitted appeal petitions to the ShenzhenIntermediate People's Court respectively. On June 28, 2022, the Shenzhen Intermediate People's Court ruled in thesecond instance: revoked the administrative judgment-No. 1883(2021) Yue 0308 Xingchuof the Yantian DistrictPeople's Court of Shenzhen City, Guangdong Province, and remanded it to the Yantian District People's Court ofShenzhen City, Guangdong Province for a new trial.The case was reopened in Yantian District People's Court on September 29, 2022, and Yantian District People'sCourt made a retrial judgment on December 30, 2022: The administrative act of Shenzhen Xieli AutomobileEnterprise Co., Ltd., which was approved by Shenzhen Administration for Market Regulation on March 9, 2020,was revoked.The third party Xieli Maintenance Company filed an appeal in January 2023. Later, because XieliMaintenance Company failed to pay the appeal fee in advance, the Shenzhen Intermediate People's Court ofGuangdong Province issued an administrative ruling that Hong Kong Xieli withdrew the appeal. The retrialverdict of the first instance came into effect on March 22, 2023.
(3)Matters on waiving the preemptive right and equity transfer of controlling subsidiariesThe shareholders' meeting of SAPO Photoelectric , the company's holding subsidiary, agreed that HangzhouJinhang Equity Investment Fund Partnership (limited partnership) would transfer 40% of its shareholding inSAPO Photoelectric to Hengmei Optoelectronics Co., Ltd. For details, see http//www.cninfo.com.cn CompanyAnnouncement No. 2023-01. On January 19, 2023, SAPO Photoelectric obtained the "Registration Notice" issuedby the Shenzhen Municipal Market Supervision and Administration Bureau, and the industrial and commercialchange registration procedures for this equity transfer have been completed. After this change, the company stillholds 60% equity of SAPO Photoelectric, while Hengmei Optoelectronics holds 40% equity of SAPOPhotoelectric. This equity transfer is conducive to synergizing the advantages of both parties in the polarizer
Summary of 2023 Annual Report of Shenzhen Textile (Holdings) Co., Ltd.industry, integrating high- quality resources of both parties, further optimizing and strengthening the mainpolarizer industry, and better enhancing the core competitiveness of listed companies.
(4)About the progress of the Company and its holding subsidiaries involved in litigationIn July and August 2022, the Company and its holding subsidiary SAPO Photoelectric received the legaldocuments such as Notice of Respondence to Action, and Summon, with case numbers of (2022) Y0310 MC No.3507, No.4013 and No.4336 served by Pingshan District People's Court, Shenzhen City, Gu angdong Province,and were informed that the court had accepted Hangzhou Jinhang Equity Investment Fund Partnership (LimitedPartnership) (hereinafter referred to as "Jinhang Fund") v. SAPO Photoelectric for ① dissolution dispute, ②dispute over the confirmation of the validity of company resolutions and ③ dispute over shareholders' right toknow, and the Company was informed to participate in the lawsuit as a party to the case, and SAPO Photoelectricwas informed to respond as the defendant to the case. For details, please refer to the Company's AnnouncementNo. 2022-20 and No. 2022-25 on CNINF (http://www.cninfo.com.cn).In the above-mentioned lawsuits, concerning the dissolution dispute of SAPO Photoelectric and the dispute overshareholders' right to know, the People's Court of Pingshan District of Shenzhen City, Guangdo ng Provincereceived the plaintiff's application for withdrawal on March 30, 2023, and made a ruling on April 6, 2023. TheCompany and SAPO Photoelectric have received the Civil Rulings of the above two cases, with the rulings asfollows: The plaintiff's withdrawal of the lawsuit is a self-disposition of its right of action, which does not violatethe law, does not harm the interests of the state, the collective and others, and it is allowed according to law.For details, please refer to the Company's Announcement No. 2023-19 on CNINF (http://www.cninfo.com.cn).In addition, on May 25, 2023, the People's Court of Pingshan District of Shenzhen City, Guangdong Provincerendered a first-instance judgment in the above-mentioned dispute case over the confirmation of the validity of theresolution of SAPO Photoelectric , and the Company and SAPO Photoelectric have received the Civil Judgmentof the above-mentioned case, with the judgment is as follows: all claims of the plaintiff Jinhang Fund aredismissed. For details, please refer to the Company's Announcement No. 2023-28 on CNINF(http://www.cninfo.com.cn).
The Board of Directors of Shenzhen Textile (Holdings) Co., Ltd.March 28, 2024