Stock Code: 000541, 200541 Stock Name: FSL, FSL-B Announcement No. 2019-027
FOSHAN ELECTRICAL AND LIGHTING CO., LTD.
INTERIM REPORT 2019 (SUMMARY)Part I Important NotesThis Summary is based on the full text of the 2019 Interim Report of Foshan Electrical and Lighting Co., Ltd.(together with its consolidated subsidiaries, the “Company”, except where the context otherwise requires). Inorder for a full understanding of the Company’s operating results, financial condition and future developmentplans, investors should carefully read the aforesaid full text, which has been disclosed together with this Summaryon the media designated by the China Securities Regulatory Commission (the “CSRC”).
All the Company’s directors have attended the Board meeting for the review of this Report and its summary.
Independent auditor’s modified opinion:
□ Applicable √ Not applicable
Board-approved interim cash and/or stock dividend plan for ordinary shareholders:
□ Applicable √ Not applicable
The Company has no interim dividend plan, either in the form of cash or stock.
Board-approved interim cash and/or stock dividend plan for preferred shareholders:
□ Applicable √ Not applicable
Part II Key Corporate Information
1. Stock Profile
| Stock name | FSL, FSL-B | Stock code | 000541, 200541 | |
| Stock exchange for stock listing | Shenzhen Stock Exchange | |||
| Contact information | Board Secretary | Securities Representative | ||
| Name | He Yong | Huang Yufen | ||
| Office address | No. 64, Fenjiang North Road, Chancheng District, Foshan City, Guangdong Province, | No. 64, Fenjiang North Road, Chancheng District, Foshan City, Guangdong Province, | ||
| P.R.China | P.R.China | |
| Tel. | 0757-82810239 | 0757-82966028 |
| E-mail address | yh888@chinafsl.com | fslhyf@163.com |
2. Key Financial Information
Indicate by tick mark whether there is any retrospectively restated datum in the table below.
□ Yes √ No
| H1 2019 | H1 2018 | Change (%) | |
| Operating revenue (RMB) | 1,687,184,660.86 | 2,064,779,289.99 | -18.29% |
| Net profit attributable to the listed company’s shareholders (RMB) | 167,275,725.75 | 229,277,455.82 | -27.04% |
| Net profit attributable to the listed company’s shareholders before exceptional gains and losses (RMB) | 154,517,987.66 | 228,028,236.71 | -32.24% |
| Net cash generated from/used in operating activities (RMB) | 190,681,833.48 | 144,723,778.38 | 31.76% |
| Basic earnings per share (RMB/share) | 0.1195 | 0.1638 | -27.05% |
| Diluted earnings per share (RMB/share) | 0.1195 | 0.1638 | -27.05% |
| Weighted average return on equity (%) | 3.77% | 5.32% | -1.55% |
| 30 June 2019 | 31 December 2018 | Change (%) | |
| Total assets (RMB) | 5,478,348,482.66 | 5,588,166,699.30 | -1.97% |
| Equity attributable to the listed company’s shareholders (RMB) | 4,329,873,031.84 | 4,319,259,418.46 | 0.25% |
3. Shareholders and Their Holdings as at 30 June 2019
Unit: share
| Number of ordinary shareholders | 86,354 | Number of preferred shareholders with resumed voting rights (if any) | 0 | ||||||
| Top 10 shareholders | |||||||||
| Name of shareholder | Nature of shareholder | Shareholding percentage | Number of shares | Restricted shares | Shares in pledge or frozen | ||||
| Status | Shares | ||||||||
| Hong Kong Wah Shing Holding Company Limited | Foreign legal person | 13.47% | 188,496,430 | In pledge | 92,363,251 | ||||
| Prosperity Lamps & Components Limited | Foreign legal person | 10.50% | 146,934,857 | ||||||
| Shenzhen Rising Investment Development Co., Ltd. | State-owned legal person | 5.12% | 71,696,136 | In pledge | 35,800,000 | ||||
| Guangdong Electronics Information Industry Group Ltd. | State-owned legal person | 4.74% | 66,393,501 | In pledge | 32,532,815 | ||||
| Central Huijin Asset Management Co., | State-owned legal person | 2.42% | 33,878,900 | ||||||
| Ltd. | ||||||
| Essence International Securities (Hong Kong) Co., Ltd. | Foreign legal person | 2.14% | 30,007,711 | |||
| Rising Investment Development Limited | Foreign legal person | 1.82% | 25,482,252 | |||
| DBS Vickers (Hong Kong) Ltd A/C Clients | Foreign legal person | 1.58% | 22,102,137 | |||
| China Merchants Securities (Hong Kong) Co., Ltd | Foreign legal person | 0.87% | 12,226,036 | |||
| Zhuang Jianyi | Foreign natural person | 0.85% | 11,903,509 | 8,927,632 | ||
| Related or acting-in-concert parties among the shareholders above | Among the top 10 shareholders, Hong Kong Wah Shing Holding Company Limited, Shenzhen Rising Investment Development Co., Ltd., Guangdong Electronics Information Industry Group Ltd. and Rising Investment Development Limited are acting-in-concert parties; and Prosperity Lamps & Components Limited and Zhuang Jianyi are acting-in-concert parties. Apart from that, it is unknown whether there is among the top 10 shareholders any other related parties or acting-in-concert parties as defined in the Administrative Measures for the Acquisition of Listed Companies. | |||||
| Shareholders involved in securities margin trading (if any) | Among the top 10 unrestricted shareholders, Shenzhen Xingsen Asset Management Co., Ltd—Phase II Private Fund of Xingsen holds 0 shares in the Company through its common stock accounts and 8,616,776 shares in the Company through its accounts of collateral securities for margin trading, representing a total holding of 8,616,776 shares in the Company. | |||||
4. Change of the Controlling Shareholder or the Actual Controller in the Reporting PeriodChange of the controlling shareholder in the Reporting Period:
□ Applicable √ Not applicable
The controlling shareholder remained the same in the Reporting Period.
Change of the actual controller in the Reporting Period:
□ Applicable √ Not applicable
The actual controller remained the same in the Reporting Period.
5. Number of Preferred Shareholders and Shareholdings of Top 10 of Them
□ Applicable √ Not applicable
No preferred shareholders in the Reporting Period.
6. Corporate bonds
Does the Company have any corporate bonds publicly offered on the stock exchange, which were outstandingbefore the date of this Report’s approval or were due but could not be redeemed in full?No.
Part III Operating Performance Discussion and Analysis
1. Business Overview of the Reporting Period
Is the Company subject to any industry-specific disclosure requirements?No.
In the first half of 2019, China’s economy was under great pressure for growth. From an international perspective,global economic growth slowed down, US-China trade conflicts continued to escalate, the international trade wasin confusion, and overseas market demand played a weaker role in driving China’s economic development; from adomestic perspective, real estate regulation policies remained tight, disparity among manufacturers was gettingincreasingly evident, and many challenges posed a threat to economic development. For lighting companies, onone hand, LED lighting has developed at a fast pace, the penetration rate of LED lighting products has continuedto increase, and the growth of market demand has slowed down in recent years. On the other hand, companieshave released their expanded capacity one after another, resulting in continuously sliding retail prices of lightingproducts and increasingly fierce competition between industries. In light of the macroeconomic pressure, slowedindustrial growth and fierce market competition environment, the Company continued to deepen technicalrenovations and the upgrading of intelligent manufacturing for its main products by centering around the strategicgoal of “Cutting-edge Technology, International Brand and Market and Large-scale Production” raised by theboard of directors. Additionally, it dealt with the pressure of market competition through internal reorganizationand team coordination and the integration of various advantaged resources. For the Reporting Period, theCompany achieved operating revenue of RMB1687.1847 million, a year-on-year decrease of 18.29 %; and a netprofit attributable to the listed company’s shareholders of RMB167.2757 million, a year-on-year decrease of
27.04 %.
In the first half of 2019, the Company mainly focused on the following work:
1. Integrated internal resources and developed market potentials in each segmentIn the first half of 2019, the Company implemented the BU system reform. It set up four business units includingR&D and sales, adjusted the BU organizational structure and talent structure, and sorted out BU process andauthorization to enable fast response to changing goals of market. At the same time, it improved the remuneration
and incentive system of business units, proactively mobilized staff enthusiasm, strengthened the development ofleadership, and kept exploring and innovating in incentive mechanism. It encouraged the orientation by problemsolving and the joint creation of value and sharing of results by everyone who should have a sense of engagement.In terms of domestic sales, the Company explored and promoted the high-end development of its products, set upstores for the experience of a high-end, intelligent and healthy household life, and enhanced the image of FoshanLighting in consumers’ mind through the export at the windows of the experience stores; it proactively developedengineering channel business with a focus on education, real estate, rail transit and brand franchising to increaseits market shares on engineering channel; it continued to develop high quality automotive lamp projects and newLED module projects and increase LED module application vehicle models in an attempt to raise its marketsshares in lamp factories and main device factories. In terms of overseas sales, to deal with the impact of US-Chinatrade conflicts, the Company beefed up the promotion of intelligent products and made joint efforts to developnew products based on the demands of key accounts; it made active steps to explore overseas e-commerce channeland further expanded marketing channels; it made use of the development opportunities brought by “Belt andRoad” to vigorously expand the markets in “Belt and Road” countries, strengthen brand promotion overseas,enhance the influence of self-owned brands, and propel the pace of brand internationalization.
2. Improved intelligent product technologies and product categories, resulting in considerable growth in the salesof intelligent productsDuring the Reporting Period, the Company continued to enrich the categories of intelligent products andmaintained the upgrading and improvement of intelligent control technologies. It connected with more influentialmainstream cloud platforms both at home and abroad, including China’s Huawei, Alibaba, Tencent and Jingdong,and foreign Amazon, Google, WIZ and key accounts platforms. Meanwhile, it upgraded its own cloud platformand continued to provide users with solutions from the intelligent control of single product to scenario-basedintelligent household solutions. During the Reporting Period, the Company proactively carried outinterdisciplinary cooperation with other platform enterprises in the field of intelligence. It made use of Huawei’sHiLink intelligent technology to connect with Huawei’s intelligent ecological chain and carried out in-depthcooperation with Huawei in intelligent household lighting; it took the initiative to discuss deep cooperation withBaidu and Alibaba Cloud in intelligent household life. In the first half of 2019, the Company achieved sales
revenue of RMB20,305,900 from its intelligent products, including a centralized purchase order of one millionlamps by Alibaba’s Tmall Genie and a new sales revenue of RMB754,000 from intelligent electrical products.
3. Strengthened efforts in intelligent manufacturing to speed up fast response
The Company’s production automation has improved substantially over recent years’ continuous development inproduction automation. On the basis of that, the Company continued to center around the goal of “Automation,Flexibility and Large Scale”, optimized process automation for some production lines based on the actualproduction conditions, and tried to push the standard and modular process from front end to back end, in an effortto enhance the flexibility and compatibility of production automation. At the same time, the Company acceleratedthe level of information building. On the basis of the existing SAP system, OA system and HR system, itestablished the SRM (supply chain) system, WMS (warehouse) system and PDM (R&D) system and promoted theintegration of its automated production lines and information systems, aiming to achieve inter-connectivity andintegration and open up its business data chains in different segments, including R&D, purchase, manufacturing,warehousing and sales. Thus, it will help the Company’s management to quickly understand productionconditions, expedite the adjustment of its production according to market demands and enhance its overallresponse speed and management abilities, providing customers with better delivery experience and achieving thegoal of win-win results between the Company and its customers.
2. Matters Related to Financial Reporting
(1) Changes to Accounting Policies, Accounting Estimates or Measurement Methods Compared to the LastAccounting Period
√ Applicable □ Not applicable
In 2017, the Ministry of Finance revised and issued the Accounting Standards for Business EnterprisesNo.22-Recognition and Measurement of Financial Instruments, Accounting Standards for Business EnterprisesNo.24-Hedge Accounting, Accounting Standards for Business Enterprises No.37-Presentation of FinancialInstruments and required enterprises listed both domestically and overseas as well as companies listed overseaswith financial report prepared in accordance with International Financial Reporting Standards or AccountingStandards for Business Enterprises to carry out the revised accounting standards since 1 January 2018, required
other domestically listed companies to carry out the revised standards since 1 January 2019, and required unlistedenterprises implementing Accounting Standards for Business Enterprises to carry out the revised standards since 1January 2021. Thus the Company starts to implement the changed new standards governing financial instrumentssince 1 January 2019. For details, refer to the Announcement on Changes in Accounting Policies (AnnouncementNo.: 2019-020) disclosed on cninfo.com.cn.
(2) Retrospective Restatements due to the Correction of Material Accounting Errors in the ReportingPeriod
□ Applicable √ Not applicable
No such cases.
(3) Changes to the Scope of Consolidated Financial Statements Compared to the Last Accounting Period
√ Applicable □ Not applicable
The Company convened the 26
th
Meeting of the 8
thBoard of Directors on 7 September 2018, which reviewed andapproved the Proposal on the De-Registration of Wholly-owned Subsidiary Guangdong Fozhao Finance LeaseCo., Ltd. (hereinafter referred to as “Fozhao Lease”). Upon the receipt of the Notice on Approval ofDe-Registration from the Foshan Administration for Market Regulation on 26 March 2019, the de-registrationprocedure of Fozhao Lease has been completed and Fozhao Lease has been excluded from the scope of theCompany’s consolidated financial statements.
The Board of DirectorsFoshan Electrical and Lighting Co., Ltd.28 August 2019