Stock Code: 000055, 200055 Stock ID: Fangda Group, Fangda B Announcement No. 2019-34
China Fangda Group Co., Ltd.
Interim Report 2019 SummaryI. Important DeclarationThe interim report summary is abstract from the interim report. Investors should read the annual report from the specified media tofully understand the Company’s business achievements, financial status and future plans.No objection from directors, supervisors and senior management
□ Applicable √ Inapplicable
StatementAll the Directors have attended the meeting of the board meeting at which this report was examined.Non-standard auditing opinion
□ Applicable √ Inapplicable
Profit distribution pre-plan or capitalization plan in the period reviewed by the Board of Directors
□ Applicable √ Inapplicable
The Company will distribute no cash dividends or bonus shares and has no reserve capitalization plan.The preference share profit distribution pre-plan approved by the Board of Directors
□ Applicable √ Inapplicable
II. General Information
1. Company Profile
| Stock ID | Fangda Group, Fangda B | Stock code | 000055, 200055 | |
| Stock Exchange | Shenzhen Stock Exchange | |||
| Modified stock ID (if any) | None | |||
| Contacts and liaisons | Secretary of the Board | Representative of Stock Affairs | ||
| Name | Zhou Zhigang | Guo Linchen | ||
| Office address | 20F, Fangda Technology Building, Kejinan 12th Avenue, High-tech Zone, Hi-tech Park South Zone, Shenzhen, PR China. | 20F, Fangda Technology Building, Kejinan 12th Avenue, High-tech Zone, Hi-tech Park South Zone, Shenzhen, PR China. | ||
| Tel. | 86(755) 26788571 ext. 6622 | 86(755) 26788571 ext. 6622 | ||
| zqb@fangda.com | zqb@fangda.com | |||
2. Financial Highlight
Whether the Company needs to make retroactive adjustment or restatement of financial data of previous years
□ Yes √ No
| This report period | Same period last year | Year-on-year change (%) | |
| Turnover (yuan) | 1,425,890,946.99 | 1,442,050,896.53 | -1.12% |
| Net profit attributable to shareholders of the listed company (yuan) | 128,581,755.01 | 230,131,663.19 | -44.13% |
| Net profit attributable to the shareholders of the listed company and after deducting of non-recurring gain/loss (RMB) | 113,377,064.06 | 209,705,118.34 | -45.94% |
| Net cash flow generated by business operation (RMB) | -372,725,003.11 | -31,426,267.64 | -1,086.03% |
| Basic earnings per share (yuan/share) | 0.11 | 0.19 | -42.11% |
| Diluted Earnings per share (yuan/share) | 0.11 | 0.19 | -42.11% |
| Weighted average net income/asset ratio | 2.55% | 6.99% | -4.44% |
| End of the report period | End of last year | Year-on-year change | |
| Total asset (RMB) | 10,940,802,780.45 | 10,658,854,133.73 | 2.65% |
| Net profit attributable to the shareholders of the listed company (RMB) | 5,023,788,122.76 | 5,195,187,621.88 | -3.30% |
Notes:
1. The above-mentioned decrease in “net profit attributable to shareholders of the listed company” was mainly due to the fact thatthe Fangda Town project which had a higher gross profit during the reporting period and contributed more to the profit in theprevious year, was nearing the end of the planned sales area resulting in a decrease in operating income and profit. In addition, theoperating income, net profit and gross profit margin of the curtain wall systems and materials industries and rail transit screen doorequipment businesses have increased, as follows:
1. The real estate industry realized operating income of RMB204,754,300 in the first quarter of 2019, a decrease of 57.03% overthe same period of the previous year; net profit of RMB55,294,600 was reduced by RMB113,516,400 compared with the sameperiod of the previous year with a decrease of 67.24%.
2. In the first quarter of 2019, the curtain wall system and materials industry realized operating income of RMB1,005,451,500, anincrease of 23.53% over the same period of the previous year; the net profit was RMB48,390,900, an increase of 33%; the grossmargin was 14.55%, up 0.67 percentages from the same period of last year;
3. In the first half of 2019, the rail transit screen door equipment business realized operating income of RMB197,936,300, anincrease of 50.79% over the same period of the previous year; net profit of RMB35,630,100, an increase of 68.76% over the sameperiod of the previous year; gross profit margin of 28.00%, an increase of 4.67 percentage points.
2. The decrease in the above-mentioned “net cash flow from operating activities” was mainly due to the decrease in the revenue ofthe Fangda town project due to the decrease in operating income during the reporting period and the annual corporate income taxsettlement and payment of taxes. The curtain wall system and materials industry and the rail transit screen door equipmentindustry have basically remained the same or improved compared with the same period of the previous year, as follows:
1. The net cash flow generated by the real estate industry in the first half of 2019 was RMB-181,979,600, compared withRMB182,350,800 in the same period of the previous year, a decrease of RMB364,330,400 over the same period of the previous year.
2. The net cash flow generated by the operating activities of the curtain wall system and materials industry in the first half of 2019was RMB -157,339,500, compared with RMB-156,697,800 in the same period of last year, which was basically the same as that ofthe same period of last year;
3. The net cash flow generated by the operating activities of the rail transit screen door equipment industry in the first half of 2019
was RMB-33,676,200, compared with RMB-47,830,600 in the same period of last year, which was improved compared with the
same period of the previous year.
3. Shareholders and shareholding
In share
| Number of shareholders of common shares at the end of the report period | 62,141 | Number of shareholders of preferred stocks of which voting rights recovered in the report period (if any) | 0 | ||||||
| Top 10 Shareholders | |||||||||
| Shareholder | Nature of shareholder | Shareholding percentage | Shareholding number | Conditional shares | Pledging or freezing | ||||
| Share status | Quantity | ||||||||
| Shenzhen Banglin Technologies Development Co., Ltd. | Domestic non-state legal person | 10.08% | 113,202,154 | Pledged | 32,860,000 | ||||
| Shengjiu Investment Ltd. | Foreign legal person | 8.52% | 95,688,766 | ||||||
| Gong Qing Cheng Shi Li He Investment Management Partnership Enterprise (limited partner) | Domestic non-state legal person | 2.38% | 26,791,488 | ||||||
| Fang Wei | Domestic natural person | 1.65% | 18,514,449 | |||
| SUN HUNG KAI INVESTMENT SERVICES LTD | Foreign legal person | 0.89% | 10,053,618 | |||
| VANGUARD EMERGING MARKETS STOCK INDEX FUND | Foreign legal person | 0.71% | 7,946,483 | |||
| Shenwan Hongyuan Securities (Hong Kong) Co., Ltd. | Foreign legal person | 0.55% | 6,158,732 | |||
| VANGUARD TOTAL INTERNATIONAL STOCK INDEX FUND | Foreign legal person | 0.52% | 5,872,007 | |||
| Qu Chunlin | Domestic natural person | 0.38% | 4,236,961 | |||
| First Shanghai Securities Limited | Foreign legal person | 0.36% | 4,001,704 | |||
| Notes to top ten shareholder relationship or "action in concert" | Among the shareholders, Shenzhen Banglin Technology Development Co., Ltd. and Shengjiu Investment Co., Ltd. are parties action-in-concert. Shenzhen Banglin Technology Development Co., Ltd. and Gong Qing Cheng Shi Li He Investment Management Partnership Enterprise are related parties. The Company is not notified of other action-in-concert or related parties among the other holders of current shares. | |||||
| Statement of shareholders participating in margin trade (if any) | None | |||||
4. Changes in controlling shareholder or actual controller
Changes in the controlling shareholder in the reporting period
□ Applicable √ Inapplicable
No change in the controlling shareholder in the report periodChange in the actual controller in the report period
□ Applicable √ Inapplicable
No change in the actual shareholder in the report period
5.Total number of preferred shareholders and shareholding of top 10 preferred shareholders by the end ofthe report period
□ Applicable √ Inapplicable
No shareholder of preferred shares in the report period
6. Bonds
Bonds publicly issued and listed in a securities exchange, immature or not fully paid by the approval date of the annual reportNo
III. Operation Discussion and Analysis
1. Business status in the report period
Whether the Company needs to comply with disclosure requirements of special industriesYesDecorationIn the first half of 2019, the international environment was complex and changeable. The impact of Sino-US trade frictionsintensified and continued. The domestic economy continued to decline. The Company overcame many unfavorable factors andcompleted the targets set at the beginning of the year. During the reporting period, the Company achieved operating income ofRMB1,425,890,900, a year-on-year decrease of 1.12%, and the net profit attributable to owners of the parent company wasRMB128,581,800, a year-on-year decrease of 44.13%. The decrease in operating income and net profit of the Company was mainly
due to the fact that the sales area of Fangda Town project with higher gross profit and greater contribution to profit in the same periodof last year was close completion. The project realized operating income of RMB204,754,300 in the first half of 2019, compared withthe same period of last year. The decrease was RMB271,728,600, a decrease of 57.03%, and the net profit was RMB55,294,600, adecrease of RMB113,516,400 from the same period of the previous year, a decrease of 67.24%. In addition, in the first half of theyear, the Company's two major industrial curtain wall systems and materials industry and rail transit screen door equipment industrydeveloped well. The curtain wall system and materials industry operating income and net profit increased by 23.53% and 33%respectively. The operating income and net profit of the door equipment industry increased by 50.79% and 68.76% respectively. Asof the end of the reporting period, the company's order reserve was RMB4,992,541,500 (excluding real estate sales), an increase of
7.71% compared with the beginning of the year, which was 3.5 times of the operating income in the first half of the year. Adequateorder reserve provided a strong guarantee for the company's sustainable development.
1. High-end curtain wall system and material business
The Company has always practiced the business philosophy of “technology-based, innovation as the source”, adheres to thespirit of “Fangda Quality” with excellence and quality first, and with the core competitiveness of product quality, technical strengthand brand influence. The quality and quantity of the newly signed orders in the first half of the year have remained at a high level. Inthe first half of the year, the Company secured the 188S-C-4 and 188S-D-1 plots of the WS5 unit in the south section of the HuangpuRiver in Xuhui District, Shanghai, and the 31-01(D) plot office building in Xujingzhong, Shanghai Xihongqiao Business District,Chengdu Tianfu Wanke Yuncheng, Chengdu Tianfu International Conference Center, Chengdu Longhu Renmin North Road 6-7Group Central Commercial Street, Chongqing Longhu Shapingba Hub Project, Nanjing Vanke Shangduhui Project, ShenzhenShangzhi Science and Technology Park, Shenzhen Qianhai East Asia Kerry, Shenzhen Jinxiu Science Park Phase III, ShenzhenVanke Antoshan Project, Zhuhai Renhe Hengqin International Chinese Medicine Innovation Center, Marriott Docklands MarriottMelbourne, Australia, Victoria Square, Melbourne, Australia, 89 Victoria Street, Brisbane, Saudi Arabia A large number of high-endcurtain wall systems and materials projects, totaled RMB1.178 bilion. In the first half of 2019, the curtain wall system and materialsindustry realized operating income of RMB1,005,451,500, an increase of 23.53% over the same period of the previous year; the netprofit was RMB48,390,900, an increase of 33%, the gross margin was 14.55%, up 0.67 percentages from the same period of last year.As of the end of the reporting period, the Company's curtain wall system and materials industry orders reserve wasRMB3,134,694,300 which was 3.12 times of the operating income of the curtain wall system and materials industry in the first halfof 2019.In order to meet the growing demand for orders, the Company has established new production bases in Chengdu Xinjin andShanghai Songjiang. In June this year the Fangda Western Headquarters Base of Chengdu Xinjin has been basically completed. Thebase covers an area of 45,000 square meters and has a total construction area of about 21,000 square meters. The company's EastChina production base in Songjiang, Shanghai, has started in the first half of the year and is scheduled to be completed by the end ofthis year. The base covers an area of 23,800 square meters and has a total construction area of 43,000 square meters. After thecompletion of the two bases, the national industrial layout of the upgrade company will be improved and the production capacity ofthe Company's energy-saving and environmental protection curtain wall will be enhanced to provide guarantee for the Company'ssustained and rapid development. After completion, the Company's curtain wall system and materials industry are formed withShenzhen as the headquarters South China with Dongguan Songshan Lake and Foshan as the base Southwest China with Chengdu asthe base East China with Shanghai and Central China with Nanchang. As the base of the national industrial layout, it provides animportant guarantee for improving market share and comprehensive competitiveness.During the reporting period, the curtain wall project of the four projects of Zhuhai R&F Yingkai Plaza, Shenzhen JinlitongFinancial Center, Shenzhen Vanke Binhai Land Building and Haikou Henghaihua Island under construction completed the aboveprojects with high quality product quality and service capacity. The high-tech and high-difficult curtain wall design andconstruction tasks have won honors such as “Excellent Suppliers” from R&F Group, Qianhai Life Insurance, Vanke and Evergrande,reflecting the recognition of the Company's comprehensive strength and brand of the Company's curtain wall business.
2. Rail transport screen door business
As the national “Belt and Road” initiative continues to deepen and the development strategy of Guangdong, Hong Kong andMacao Dawan District continues to advance in depth, in the first half of 2019, the Company's rail transit screen door equipmentindustry has expanded rapidly and has won the Mumbai Metro Line in India, Nanjing Metro Line 7, Zhengzhou Line 4, NingboMetro Line 1, Guiyang Metro Line 2, Phase II, Jinan Rail Transit R2 Line 1, Wuhan Metro Line 5, Xi'an Metro Line 5 orders forscreen door system projects, and also obtained orders for professional technical maintenance services for shielded doors of WuhanRailway Bureau and Shenzhen Metro Line 9, and Shenzhen Metro 1, 2, 3, 5, 7, 9, and 11. Line shield door installation project orders,the total amount of new signed singles was RMB618,636,600, an increase of 95%. Among them, the Mumbai Metro Line 3 project inIndia is the third project of the company in the Indian market after the Noida subway in India and the Ahmedabad subway project inIndia. The company will continue to firmly grasp the rapid development opportunities of the Indian subway construction. Take the“One Belt, One Road” express train to speed up the overseas market layout and further expand the Company's business landscape. Inthe first half of the year, the Company's rail transit screen door equipment industry realized operating income of RMB197,936,300, ayear-on-year increase of 50.79%, net profit of RMB35,630,100, a year-on-year increase of 68.76%, and a gross profit margin of
28.00%, an increase of 4.67 percentage points. As of the end of the reporting period, the Company's rail transit screen equipmentindustry orders reserve reached RMB1,857,847,200, an increase of 27.38% compared with the beginning of the year, which is 9.38times of the company's rail transit screen equipment industry operating income in the first half of the year. The Company's rail transitscreen door equipment industry has reached a new level, entering a new era of rapid development and continuing to lead the industry.
During the reporting period, the Company's construction of the screen door system of the Wuhan Metro Line 2 South ExtensionLine, Zhengzhou Metro Line 5, Lanzhou Metro Line 1 Phase 1, and Nanchang Metro Line 2 after the passage section were opened.At present, Fangda's screen door system has been applied in rail transit in 41 cities around the world. The domestic coverage of thescreen door system is over 60%. There are more than 10 million people using the large screen door system every day. The marketshare has ranked first in the world for nearly five years, and the Company is the world's largest supplier of rail transit screen doors.
On May 10, the Company participated in the preparation of the national standard “Evaluation Method for Urban Rail TransitEnergy Consumption and Emission Indicators” (GB/T 37420-2019) 5 year, which was issued by the State Administration of Markets
and the National Standardization Administration of China, and will be published in 2019 and formally implemented on December 1,2019. The Company's participation in the preparation of the first domestic screen door industry standard "Urban Rail Transit PlatformScreen Door", andin the standard compilation in the domestic rail transit field reflect the Company's technology in the urban railtransit field.
3. New energy industry
In the first half of the year, there were more rains. The Company strengthened the operation and maintenance of solarphotovoltaic power station equipment. The three solar photovoltaic power plants that have been connected to the grid havemaintained efficient and safe operation.
4. Real estate
(1) Shenzhen Fangda Town Project: In the first half of 2019, the Fangda Town project achieved a sales area of 2,853.75 squaremeters and an accumulated sales area of 85,264.25 square meters. As of the end of the first half of 2019, the area for sale was 7,822square meters. The business investment signing rate was 94%, the cumulative rental area of 1# building was 16,854.13 square meters,and the occupancy rate was 23.24%.
(2) Nanchang Fenghuangzhou Project (Fangda Center Project): The project is located in Fenghuangzhou Area, Honggutan NewDistrict, Nanchang City. Construction started in May 2018. The project covers an area of about 17,000 square meters and has a totalconstruction area of about 93,000 square meters. With a total construction area of 66,000 square meters, Jirong is a commercialcomplex covering commercial, apartment and office buildings. The self-use and sales area of the whole project is half of each. Theproject is scheduled to start pre-sale in the second half of 2019 and be completed and accepted in the first half of 2020. At present,the project construction is progressing in accordance with the expected engineering nodes. In the future, the project will contributeprofits and cash flow to the Company.
(3) Shenzhen Fangda Bangshen Industrial Park Project: The project is located in Fuyong, Bao'an District, Shenzhen. It coversan area of 20,714.9 square meters and is currently an industrial plant. The project has begun to declare the project. As of the end ofthe first half of 2019, the project is still in the stage of approval.
(4) Urban renewal project along the Dagang River in Henggang, Shenzhen: The project is located in Dakang Village, YuanshanStreet, Longgang District, Shenzhen. The area of the project to be demolished is about 80,000 square meters. The update direction ismainly residential function, and finally subject to government approval. The project work is currently being actively promoted.
5. Awards
During the reporting period, the Company won the title of “Guangdong Province May 1st Labor Award”, “Shenzhen QualityStrong City Key Enterprise”, “2018 Shenzhen Quality Credit Demonstration Unit”, and was awarded the “Innovation China·Top 100Listed Company” award. Ranked 12th in the growth list of A-share listed companies in the past five years.
Fangda Jianke Co., a wholly-owned subsidiary, was awarded “2019 Shenzhen University Building Doors and Windows CurtainWall Industry Academic Exchange Advanced Unit”. General Manager Wei Yuexing won the “Innovative Talents” award in ShenzhenDecoration Industry and Zhang Jianhui, Regional Manager, won the “Top Ten Outstanding Project Managers” award. Senior designerHu Guangzhou won the "Top Ten Young Designers" award and the curtain wall maker Xu Xiuhui won the "Top Ten Star Craftsmen"award. The four curtain wall projects including Fangda Town (Phase I), Shenye Shangcheng (Southern District) Tower 2, ChinaEnergy Storage Building and China Southern Power Grid Production and Research Comprehensive Base undertaken by the companywon the “China Construction Engineering Decoration Award”. Shenzhen Hanjing Finance curtain wall project was awarded “MyFavorite Curtain Wall Project”.
Fangda Zhichuang Technology, a wholly-owned subsidiary, was awarded "Shenzhen Metro 2018 Excellent EquipmentSupplier", "Shenzhen Metro Phase III Excellent Equipment Supplier", and "Shenzhen Metro Line 7, 9 and 11 PerformanceEvaluation Excellent Unit" "2018 Xi'an Metro Construction Labor Competition Advanced Unit", employees Ouyang Kehua, ZhuZhenfei, Kong Debing were awarded "Shenzhen Baiyou Craftsman" and Tang Long was awarded "2018 Xi'an Subway ConstructionLabor Competition Advanced Individual".
Fangda Jiangxi New Material received titles including 2018 Nanchang High-Tech Industry Park Leading Enterprise, andLeading Company in Standardization.
After 2018, the wholly-owned subsidiary Fangda Real Estate Co., Ltd. was once again awarded the "Shenzhen Real EstateDevelopment Industry Brand Value Enterprise" award by the Shenzhen Real Estate Association.
2. Related issues involved the financial report
(1) Statement of changes to accounting policies, estimates and audit methods compared with the financialreport of the report period
√ Applicable □ Inapplicable
(1) In 2017, the Ministry of Finance revised and released the "Accounting Standards for Business Enterprises No. 22 -Recognition and Measurement of Financial Instruments", "Accounting Standards for Business Enterprises No. 23 - Transfer ofFinancial Assets", "Accounting Standards for Business Enterprises No. 24 - Hedge Accounting" "Accounting Standards for BusinessEnterprises No. 37 - Financial Instruments Presentation" (hereinafter collectively referred to as the "New Financial InstrumentsStandards"), and requires enterprises listed in China to implement the above accounting standards from January 1, 2019. Inaccordance with the above requirements, the Company implement the new financial instrument guidelines from January 1 2019.
The specific impact of the implementation of the new financial instruments guidelines on the financial statement items at thebeginning of 2019 is as follows:
① Provision for impairment according to the new financial instrument standard adjustment to reduce the bad debt provisionfor accounts receivable by RMB 12,690,700, reduce the provision for bad debts of other receivables by RMB 2,145,000, reduce thedeferred income tax assets by RMB 3,305,900 and increase the initial surplus reserve by RMB 8,300, and increase the undistributed
profit of RMB 11,521,500 at the beginning of the period.
② The non-trading equity instrument investment is designated as a financial asset measured at fair value and its changes areincluded in other comprehensive income. The original provision for impairment is adjusted to other comprehensive income and theother comprehensive income at the beginning of the period is reduced by RMB 5,166,400. The initial surplus reserve is increased byRMB 516,600 and the undistributed profit is increased by RMB 4,649,800 at the beginning of the period.The impact of the implementation of the new financial instrument criteria on the company's current financial statement itemsand amounts is as follows:
Provision for impairment according to the new financial instrument standard, adjustment and reduction of bad debt provisionfor accounts receivable of RMB1,215,500, increase of bad debt provision for other receivables of RMB2,084,200, correspondingincrease of deferred income tax assets of RMB436,200, increase credit impairment losses of RMB868,800, reduced income taxexpenses of RMB436,200, reduced net profit attributable to the parent company of RMB419,300, and reduced undistributed profit ofRMB416,600.
(2) On April 30, 2019, the Ministry of Finance issued the Notice on Amending the Format of the 2019 Annual GeneralEnterprise Financial Statements (Accounting [2019] No. 6). Enterprises requiring the implementation of corporate accountingstandards should follow the Accounting Standards for Business Enterprises, requiring for the preparation of the 2019 interimfinancial statements and annual financial statements and financial statements for subsequent periods. In accordance with the abovenotification requirements, the Company has adjusted the financial statement items accordingly, starting from the 2019 interimfinancial statements.
Item It only affects the listing of related items in the financial statements, and does not affect the company's total assets, totalliabilities, net assets and net profit.
(2) Statement of retrospective restatement of major accounting errors in the report period
□ Applicable √ Inapplicable
No retrospective restatement of major accounting errors in the report period
(3) Statement of change in the financial statement consolidation scope compared with the previous financialreport
√ Applicable □ Inapplicable
1. During the period, Fangda Southeast Asia Company Limited was newly established, and the merger of enterprises under the samecontrol increased Shenzhen Zhongrong Litai Investment Co., Ltd., adding 2 subsidiaries in the current consolidated statement.In this period, Shenzhen Kexunda Software Co., Ltd., an indirect controlled subsidiary, was canceled, so the current consolidatedstatement reduced one subsidiary.