Stock Code: 000869. 200869 Stock Abbreviation: Changyu A, Changyu B Notice No.: 2019-Final 02
Yantai Changyu Pioneer Wine Co., Ltd.
2019 the First Quarter Report Main Body
I. Important Notice
The Company’s board of directors, board of supervisors, directors, supervisors and seniorexecutives guarantee the truthfulness, accuracy and completeness of contents contained in thisquarter report as well as no unfaithful facts, misleading statements or significant omissionsand undertake individual and collective legal liabilities.
All directors attended the board meeting for deliberating this quarter report.
Mr. Zhou Hongjiang (person in charge of the Company) and Mr. Jiang Jianxun (person incharge of accounting work, person in charge of accounting organization and person in chargeof accounting) declare to assure the truthfulness, accuracy and completeness of the financialstatement in this quarter report.
II、Corporate Information
1. Key accounting data and financial indicators
Whether the Company need to make retroactive adjustments or restate the accounting data ofprevious fiscal years.
□ Yes √ No
| Item | This report period | The same period of last year | More or less than the same period of last year (%) |
| Operating revenue (CNY) | 1,667,424,758 | 1,804,057,976 | -7.57% |
| Net profit attributed to the shareholders of the listed company (CNY) | 456,381,471 | 479,444,238 | -4.81% |
| Net profit attributed to the shareholders of the listed company after deducting the irregular profit and loss (CNY) | 450,709,661 | 466,181,564 | -3.32% |
| Net cash flows from the operating activities (CNY) | 294,678,342 | 507,263,964 | -41.91% |
| Basic earnings per share (CNY) | 0.67 | 0.70 | -4.29% |
| Diluted earnings per share (CNY) | 0.67 | 0.70 | -4.29% |
| Weighted average for earning rate of the net assets | 4.75% | 5.24% | -0.49% |
| The end of this report period | The end of last year | More or less than the end of last year (%) | |
| Total assets (CNY) | 13,317,351,339 | 13,117,729,052 | 1.52% |
| Net Assets attributed to the shareholders of the listed company (CNY) | 10,055,194,755 | 9,606,099,365 | 4.68% |
Details of irregular profit and lossV Yes □ No
Unit：CNY
| Item | From beginning of year to end of report period | Explanation |
| Gain on disposal of non-current assets, including the reversal of accrued impairment provision | 1,138 | |
| Government grants credited in profit and loss (except for those recurring government grants that are closely related to the entity's operation, in line with related regulations and have proper basis of calculation) | 6,172,178 |
| Other non-operating income and expenses | 1,259,563 | |
| Less: Income tax effect | 1,741,770 | |
| Minority interests effect(after-tax) | 19,299 | |
| Total | 5,671,810 | -- |
The reasons shall be made clear and definitely as to the non-recurring profit and loss that theCompany has defined by virtue of the Explanatory Announcement on Public Company’sInformation Disclosure No.1 - Non-recurring Profit and Loss and as to regarding the non-recurringprofit and loss as recurrent profit and loss as specified in the Explanatory Announcement on PublicCompany’s Information Disclosure No.1 –Non-recurring Profit and Loss.□Available ?Not availableThere is no situation that non-recurring profit and loss is defined and specified as recurrent profitand loss in accordance with the Explanatory Announcement on Public Company’s InformationDisclosure No.1 - Non-recurring Profit and Loss during the report period.
2. The total number of shareholders and top 10 shareholders at the end of the report period1) The number of the common shareholders and preferred shareholders with recovered voting
power as well as the shareholding of top 10 shareholders
Unit: share
| Total number of common shareholders at the end of report period | 45,104 | Total number of preferred shareholders with recovered voting power at the end of report period | 0 | |||||
| Shareholding of top 10 shareholders | ||||||||
| Name of Shareholders | Character of shareholders | Percentage (%) | Shares held | Number of restricted shares | Pledged or frozen | |||
| Share status | Amount | |||||||
| YANTAI CHANGYU GROUP COMPANY LIMITED | Domestic non-state-owned legal person | 50.40% | 345,473,856 | 0 | 0 | |||
| GAOLING FUND,L.P. | Foreign legal person | 3.08% | 21,090,219 | 0 | 0 | |||
| CHINA SECURITIES FINANCE CORP | State-owned legal person | 2.25% | 15,440,794 | 0 | ||||
| BBH BOS S/A FIDELITY FD - CHINA FOCUS FD | Foreign legal person | 2.22% | 15,241,826 | 0 | 0 | |||
| SHENWAN HONGYUAN SECURITIES(HONGKONG) LIMITED | Foreign legal person | 1.24% | 8,492,763 | 0 | 0 | |||
| FIDELITY PURITAN TRUST: FIDELITY SERIES INTRINSIC OPPORTUNITIES FUND | Foreign legal person | 0.93% | 6,350,762 | 0 | 0 | |||
| GUOTAI JUNAN SECURITIES(HONGKONG) LIMITED | Foreign legal person | 0.80% | 5,516,796 | 0 | 0 | |||
| CENTRAL HUIJIN ASSET MANAGEMENT LTD. | State-owned legal person | 0.69% | 4,761,200 | 0 | 0 | |||
| VANGUARD EMERGING MARKETS STOCK INDEX FUND | Foreign legal person | 0.55% | 3,788,487 | 0 | 0 | |||||
| FIDELITY CHINA SPECIAL SITUATIONS PLC | Foreign legal person | 0.55% | 3,779,202 | 0 | 0 | |||||
| Shareholding of top 10 shareholders with unrestricted shares | ||||||||||
| Name of Shareholders | Number of unrestricted shares held | Type of share | ||||||||
| Type of share | Amount | |||||||||
| YANTAI CHANGYU GROUP COMPANY LIMITED | 345,473,856 | A share | 345,473,856 | |||||||
| GAOLING FUND,L.P. | 21,090,219 | B share | 21,090,219 | |||||||
| CHINA SECURITIES FINANCE CORP | 15,440,794 | A share | 15,440,794 | |||||||
| BBH BOS S/A FIDELITY FD - CHINA FOCUS FD | 15,241,826 | B share | 15,241,826 | |||||||
| SHENWAN HONGYUAN SECURITIES(HONGKONG) LIMITED | 8,492,763 | B share | 8,492,763 | |||||||
| FIDELITY PURITAN TRUST: FIDELITY SERIES INTRINSIC OPPORTUNITIES FUND | 6,350,762 | B share | 6,350,762 | |||||||
| GUOTAI JUNAN SECURITIES (HONGKONG) LIMITED | 5,516,796 | B share | 5,516,796 | |||||||
| CENTRAL HUIJIN ASSET MANAGEMENT LTD. | 4,761,200 | A share | 4,761,200 | |||||||
| VANGUARD EMERGING MARKETS STOCK INDEX FUND | 3,788,487 | B share | 3,788,487 | |||||||
| FIDELITY CHINA SPECIAL SITUATIONS PLC | 3,779,202 | B share | 3,779,202 | |||||||
| The explanation for the associated relationship and accordant action of the top 10 shareholders | Among the top 10 shareholders, Yantai Changyu Group Company Limited has no associated relationship or accordant action relationship with the other 9 listed shareholders, and the relationship among the other shareholders is unknown. | |||||||||
| Explanation for the top 10 common shareholders who involved in financing activities and stock trading business(if any) | No | |||||||||
Whether or not the Company’s top 10 common shareholders and top 10 common shareholders withunrestricted shares promise to buy back trading during the report period□ Yes √ NoThere are no top 10 common shareholders and top 10 common shareholders with unrestricted sharesin the Company promise to buy back trading during the report period.
2) The total number of the preferred shareholders and top 10 preferred shareholders at the end of
the report period
□Available √Not available
III Major Issue
1. Situation and reason of change in major financial data and financial index during the
report period
√Available □Not available
Compared the end of the report period with the beginning of the report period: Monetary fundincreased by 14.28%, mainly due to the reduce in cash outflow for investment activities andincrease in bank deposit. Notes receivable increased by 64.09%, mainly due to increased amount ofbank acceptances. Advance payment decreased by 55.58%, mainly due to the decrease in advancepayment for raw material procurement. Interest receivable increased by 39.65%, mainly due to theincreased interest of bank term deposits. Non-current liabilities due within one year increased by21.39%, mainly due to the transfer of long-term account payable.
Compared with the same period of last year: operating revenue decreased by 7.57%, which wascaused by four reasons. Firstly, in order to implement the strategy of “Focus on high quality, Focuson mid-to-high end and Focus on big product”, the prices of low-end wines were raised at the endof November 2018. Due to the pressure-bearing process of the market, the low-end wines havefallen sharply. Secondly, due to aging of products as well as relatively concentrated markets, thelow-end brandy has shown a downward trend since last year. However, the growth of mid-to-high-end brandy is not enough to make up for the decline of low-end brandy. Thirdly, the sales policy ofimported wines has further focused on the acquisition brands including Kilikanoon and Indomita etc,which results in a decline in non-acquisition brands in imported wines and drags down the overallgrowth of imported wines. Fourthly, listed company adjusted about 20% of provincial managersand marketing personnel in February, which also had a certain impact on current indicators.
Compared with the same period of last year: sales expense decreased by 14.9%, mainly due todecrease in advertising expense. Financial expense decreased by 156.04%, mainly due to offset offinancial expense by received loan with discounted interest. Net profit attributable to parentcompany decreased by 4.81%, mainly due to decrease in income. Net cash flow from operatingactivities decreased by 41.91%, mainly due to reduce in received cash of selling products andproviding service. Cash inflow from investment activities increased by 9064.93%, mainly due toincrease in withdrawal of fixed term deposit. Cash outflow for investment activities decreased by73.86% and net cash flow from investment activities increased by 79.14%, mainly due to the reducein the cash paid for purchasing fixed term deposit. Net increase in cash and cash equivalentsincreased by 24149.03%, mainly due to reduce in cash outflow for investment activities.
2. Analysis explanation of major issue’s process, influence and solution
□Available √ Not available
Implementation progress of share repurchase□Available √ Not availableImplementation progress of reducing or repurchasing shares by the way of centralized bidding□Available √ Not available
3. The commitments that the Company’s actual controllers, shareholders, related parties,
purchasers, the Company and other related parties do not implement completelyexceeding the time limit within report period√Available □Not available
| Commitments | Commitment Party | Commitment Type | Commitment content | Commitment time | Commitment period | Implementation |
| Commitments at share reform | - | － | ||||
| Commitments made in acquisition report or equity changes report | - | - | - | - | ||
| Commitments at asset restructuring | - | - | - | - | ||
| Commitments at the initial public offering or refinancing | Yantai Changyu Group Co., Ltd. | Solve horizontal competition | Non-horizontal competition | 1997.05.18 | Permanent | Has been fulfilling the commitment |
| Yantai Changyu Group Co., Ltd. | Define the use of trademark use fee | According to Trademark License Contract, the annual trademark use fee of trademarks including “张裕” (Changyu) paid by the Company to Yantai Changyu Group Co., Ltd. should be mainly used by Yantai Changyu Group Co., Ltd. to publicize trademarks | 1997.05.18 | Permanent | According to Trademark License Contract, the annual trademark use fee charged by Yantai Changyu Group Co., Ltd. should be mainly used to publicize trademarks including “张裕” (Changyu) and contractual products. Except the period from 2013 to 2017 when Yantai |
| including “张裕” (Changyu) and contractual products. | Changyu Group Co., Ltd. didn’t strictly fulfill the commitment, Yantai Changyu Group Co., Ltd. has been fulfilling the commitment. | |||||
| Equity incentive commitments | ||||||
| Commitments made to the minority shareholders of the Company | - | - | - | - | ||
| Commitment under timely implementation or not | No | |||||
| For commitments that exceed the time limit and are not completed, specific reasons of not completing the implementation and the next step | According to Trademark License Contract (hereafter referred to as “this Contract”), Changyu Group promised that the annual trademark use fee paid by the Company to Changyu Group would be mainly used by Changyu Group to publicize these trademarks and contractual products. However, the above-mentioned "mainly" is not a specific number. During the implementation process, due to inconsistent understanding, it is easy to cause divergence and leads to problems. Changyu Group totally charged trademark use fee of CNY420,883,902 from 2013 to 2017. Based on this Contract, the amount (51% of trademark use fee) used for publicity of trademarks including “张裕” (Changyu) and contractual products involved in this Contract should be CNY214,650,790, compared to which, the amount that has already been used for publicity of trademarks including “张裕” (Changyu) and contractual products involved in this Contract is CNY50,025,181 with a balance of CNY164,625,609. In addition, Changyu Group totally charged 2017 annual and 2018 annual trademark use fee of CNY155,623,907 in 2018 and 2019. Based on This Contract, the amount (51% of trademark use fee) used for publicity of trademarks including “张裕” (Changyu) and contractual products involved in this Contract should be CNY79,368,193, compared to which, the amount that has already been used for publicity of trademarks including “张裕” (Changyu) and contractual products involved in This Contract is CNY12,225,187 with a balance of CNY67,143,006. From 2013 to now, the total balance of trademark use fee used for publicity of trademarks including “张裕” (Changyu) and contractual products involved in this Contract is CNY231,768,615. Changyu Group promised that Changyu Group would use the trademark use fee that would be charged for 2019 annual to 2022 annual to offset above-mentioned total balance. If it is not enough, the insufficient amount will be complemented for one time in 2023; if it is sufficient, Changyu Group will | |||||
4. Forecast on the operating performance in the period from January to June of 2019Warning and explanation for the estimation on the possible loss of cumulative net profit in theperiod from the beginning of this year to the end of the next report period or the great changecomparing with same period of last year.□Available √ Not available
5. Situation of security investment□Available √ Not availableThere is no security investment during the report period.
6. Situation of derivative investment□Available √ Not availableThere is no derivative investment during the report period.
7. The activities registration form of receptions, communication and interview etc. during thereport period□Available √ Not availableThere are no activities of receptions, communication and interview etc. during the report period.
8. Situation of illegal external guarantee□Available √ Not availableThere is no illegal external guarantee during the report period.
9. Situation of non-operating fund occupation of controlling shareholders and related parties□Available √ Not availableThere is no non-operating fund occupation of controlling shareholders and related parties during thereport period.
Yantai Changyu Pioneer Wine Co., Ltd.
Board of Directors
April 27
th
2019