Konka Group Co., Ltd. Semi-annual Report 2016
KONKA GROUP CO., LTD.
SEMI-ANNUAL REPORT 2016
2016-47
August 2016
2015 Semi-annual Report of Konka Group Co., Ltd.
Section I Important Statements, Contents and Terms
The board of directors (the “Board”), the board of supervisors (the “Board of Supervisors”) as well
as the directors, supervisors and senior management of Konka Group Co., Ltd. (the “Company”)
hereby guarantee the factuality, accuracy and completeness of the contents of the Report, and shall
be jointly and severally liable for any false representation, misleading statements or material
omissions in the Report.
Except for the following directors, all the other directors attended in person the board meeting for
the review of the Report.
Reason for not attending in
Name Office title Proxy
person
Chen Yuehua Director On a business trip Liu Fengxi
Sun Shengdian Independent Director On a business trip N/A
The Company plans not to distribute cash dividends or bonus shares or convert capital reserve into
share capital.
Liu Fengxi, head of the Company, Xiao Qing, accounting head for the Report, and Xu Youshan,
head of the accounting organ (head of accounting), hereby guarantee that the Financial Report
carried in the Report is factual, accurate and complete.
The Report has been prepared in both Chinese and English. Should there be any discrepancies or
misunderstandings between the two versions, the Chinese version shall prevail.
English Translation for Reference Only. Should there be any discrepancy between the two versions,
the Chinese version shall prevail.
2015 Semi-annual Report of Konka Group Co., Ltd.
Contents
Semi-annual Report 2016.................................................................................................................. 1
Section I Important Statements, Contents and Terms....................................................................2
Section II Corporate Profile.............................................................................................................. 6
Section III Highlights of Accounting Data and Financial Indicators............................................ 8
Section IV Report by the Board of Directors.................................................................................10
Section V Significant Events............................................................................................................21
Section VI Share Changes and Shareholders’ Profile................................................................... 33
Section VII Preference Shares.........................................................................................................38
Section VIII Directors, Supervisors and Senior Management..................................................... 39
Section IX Financial Report............................................................................................................ 40
Section X Documents Available for Reference.............................................................................192
2015 Semi-annual Report of Konka Group Co., Ltd.
Terms
Term Meaning
Company, the Company, the Group Konka Group Co., Ltd.
Telecommunication Technology Shenzhen Konka Telecommunications Technology Co., Ltd.
Precision Mold Shenzhen Konka Precision Mold Manufacturing Co., Ltd.
Konka Household Appliances Shenzhen Konka Household Appliances Co., Ltd.
Information Network Shenzhen Konka Information Network Co., Ltd.
Plastic Products Shenzhen Konka Plastic Products Co., Ltd.
Electrical Appliances Shenzhen Konka Electrical Appliances Co., Ltd.
Fittings Technology Shenzhen Konka Electronic Fittings Technology Co., Ltd.
Mudanjiang Appliances Mudanjiang Arctic Ocean Appliances Co., Ltd.
Chongqing Qingjia Chongqing Qingjia Electronics Co., Ltd.
Anhui Konka Anhui Konka Electronic Co., Ltd.
Anhui Household Appliances Anhui Konka Household Appliances Co., Ltd.
Kunshan Konka Kunshan Konka Electronic Co., Ltd.
Dongguan Konka Dongguan Konka Electronic Co., Ltd.
Dongguan Packing Dongguan Konka Packing Materials Co., Ltd.
Dongguan Mould Plastic Dongguan Konka Mould Plastic Co., Ltd.
Boluo Konka Boluo Konka PCB Co., Ltd.
Boluo Precision Boluo Konka Precision Technology Co., Ltd.
Hong Kong Konka Hong Kong Konka Co., Ltd.
Konka Household Appliances Investment Konka Household Appliances Investment & Development Co., Ltd.
Konka Household Appliances International
Konka Household Appliances International Trading Co., Ltd.
Trading
Konka America Konka America, Inc.
Konka Europe Konka (Europe) Co., Ltd.
Konka Factoring Konka Factoring (Shenzhen) Co., Ltd.
Wankaida Shenzhen Wankaida Science and Technology Co., Ltd.
Kunshan Kangsheng Kunshan Kangsheng Investment Development Co., Ltd.
Anhui Tongchuang Anhui Konka Tongchuang Household Appliances Co., Ltd.
Indonesia Konka Indonesia Konka Electronics Co., Ltd.
2015 Semi-annual Report of Konka Group Co., Ltd.
Shushida Logistics Shenzhen Shushida Logistics Service Co., Ltd.
Beijing Konka Electronic Beijing Konka Electronic Co., Ltd.
Konka E-display Shenzhen Konka E-display Co., Ltd.
E-display Service Shenzhen E-display Service Co., Ltd.
Xiamen Dalong Xiamen Dalong Trading Co., Ltd.
Youshi Kangrong Youshi Kangrong Culture Communication Co., Ltd.
Kangqiao Jiacheng Shenzhen Kangqiao Jiacheng Property Investment Co., Ltd.
Konka SmartTech Konka SmartTech Limited
Kaikai Shijie Anhui Kaikai Shijie E-commerce Co., Ltd.
E2info Shenzhen E2info Network Technology Co., Ltd.
Mobile Interconnection Shenzhen Konka Mobile Interconnection Technology Co., Ltd.
Commercial System Technology Shenzhen Konka Commercial System Technology Co., Ltd.
Anhui Jiasen Anhui Jiasen Precision Technology Co., Ltd.
CSRC China Securities Regulation Commission
SZSE Shenzhen Stock Exchange
CSRC Shenzhen Bureau Shenzhen Bureau of China Securities Regulation Commission
RMB Renminbi
2015 Semi-annual Report of Konka Group Co., Ltd.
Section II Corporate Profile
I Corporate information
Stock name Konka A, Konka B Stock code 000016, 200016
Changed stock name (if any) N/A
Stock exchange Shenzhen Stock Exchange
Company name in Chinese 康佳集团股份有限公司
Abbr. (if any) 康佳集团
Company name in English (if any) KONKA GROUP CO.,LTD
Abbr. (if any) KONKA GROUP
Legal representative Liu Fengxi
II Contact information
Board Secretary Securities Representative
Name Wu Yongjun Miao Leiqiang
Board Secretariat, 24/F, Konka R&D Center, 28 Keji Board Secretariat, 24/F, Konka R&D Center, 28 Keji
South Twelfth Road, Science and Technology Park, South Twelfth Road, Science and Technology Park,
Address
Yuehai Street, Nanshan District, Shenzhen, Yuehai Street, Nanshan District, Shenzhen,
Guangdong Province, China Guangdong Province, China
Tel. 0755-26608866 0755-26608866
Fax 0755-26601139 0755-26601139
E-mail szkonka@konka.com szkonka@konka.com
III Other information
1. Ways to contact the Company
Did any change occur to the registered address, office address and their postal codes, website
address and email address of the Company during the Reporting Period?
□ Applicable √ Not applicable
The registered address, office address and their postal codes, website address and email address of
the Company did not change during the Reporting Period. The said information can be found in the
2015 Annual Report.
2. About information disclosure and the place where the Report is kept
Did any change occur to information disclosure media and the place where the Report is kept during
the Reporting Period?
2015 Semi-annual Report of Konka Group Co., Ltd.
□ Applicable √ Not applicable
The newspapers designated by the Company for information disclosure, the website designated by
the CSRC for disclosing the Report and the location where the Report is placed did not change
during the Reporting Period. The said information can be found in the 2015 Annual Report.
3. Change of the registered information
Did any change occur to the registered information during the Reporting Period?
□ Applicable √ Not applicable
The registration date and place of the Company, its business license No., taxation registration No.
and organizational code did not change during the Reporting Period. The said information can be
found in the 2015 Annual Report.
2015 Semi-annual Report of Konka Group Co., Ltd.
Section III Highlights of Accounting Data and Financial Indicators
I Major accounting data and financial indicators
Whether the Company performs any retroactive adjustments to or restatements of its accounting
data of last year due to change in accounting policies or correction of accounting errors
□ Yes √ No
Reporting Period Same period of last year +/- (%)
Operating revenues (RMB) 8,609,080,822.24 8,944,558,920.96 -3.75%
Net profit attributable to shareholders
12,834,736.76 -296,953,507.39 104.32%
of the Company (RMB)
Net profit attributable to shareholders
of the Company excluding -28,736,147.20 -333,938,231.98 91.39%
exceptional profit and loss (RMB)
Net cash flows from operating
-125,542,056.42 70,042,909.63 -279.24%
activities (RMB)
Basic earnings per share
0.0053 -0.1233 104.30%
(RMB/share)
Diluted earnings per share
0.0053 -0.1233 104.30%
(RMB/share)
Weighted average return on equity
0.46% -7.52% 7.98%
(%)
As at the end of the
As at the end of last year +/- (%)
Reporting Period
Total assets (RMB) 14,881,788,535.36 14,250,367,548.28 4.43%
Net assets attributable to shareholders
2,814,748,518.53 2,814,382,870.81 0.01%
of the Company (RMB)
II Differences in accounting data under domestic and overseas accounting standards
1. Differences in the net profit and the net assets disclosed in the financial reports prepared
under international and Chinese accounting standards
□ Applicable √ Not applicable
No such differences for the Reporting Period.
2015 Semi-annual Report of Konka Group Co., Ltd.
2. Differences in the net profit and the net assets disclosed in the financial reports prepared
under overseas and Chinese accounting standards
□ Applicable √ Not applicable
No such differences for the Reporting Period.
III Exceptional profit and loss
√ Applicable □ Not applicable
Unit: RMB
Item Reporting Period Note
Profit/loss on disposal of non-current assets (including offset asset impairment provisions) 5,604,580.65
Government grants charged to the profit/loss for the Reporting Period (except for the
government grants closely related to the business of the Company and given at a fixed quota 51,949,430.12
or amount in accordance with the State’s uniform standards)
Profit/loss on entrusting others with investments or asset management 8,514,982.48
Profit/loss on fair value changes of transactional financial assets and liabilities & investment
income from disposal of transactional financial assets and liabilities as well as financial assets
-18,141,655.39
available for sale, except for effective hedges related to normal business operations of the
Company
Impairment provision reversal for accounts receivable on which the impairment test is carried
72,735.80
out separately
Profit/loss on entrusted loans 707,777.78
Non-operating revenue and expense other than the above 11,582,662.03
Less: Corporate income tax 13,313,484.68
Minority interests (after tax) 5,406,144.83
Total 41,570,883.96 --
Explanation of why the Company classified an item as exceptional profit/loss according to the
definition in the Explanatory Announcement No. 1 on Information Disclosure for Companies
Offering Their Securities to the Public—Exceptional Profit and Loss, or reclassified any exceptional
profit/loss item given as an example in the said explanatory announcement to recurrent profit/loss
√ Applicable □ Not applicable
Amount involved
Item Reason
(RMB)
Tax rebates Government grants closely related to the Company’s normal operation and constantly given
84,594,956.03
on software at certain quotas or amounts according to the government’s policies and standards
Konka Group Co., Ltd. Semi-annual Report 2016
Section IV Report by the Board of Directors
I Overview
We specialize in the production and operation of color TVs, mobile phones and consumer
appliances, which makes us belong to the industries of electronics manufacturing and
telecommunication equipment manufacturing.
In the Reporting Period, we accelerated our transformation, pushed forward mechanism reform and
focused on the improvement of our basic capability through the chain of planning, R&D,
manufacturing, supply, promotion, marketing, after-sales and so on. As a result, our profit increased.
For the Reporting Period, we achieved operating revenues of RMB8.609 billion, down 3.75% from
the same period of last year; net profit attributable to our shareholders of RMB12.8347 million, a
104.32% surge from a year earlier; and earnings per share of RMB0.0053/share.
(I) Performances of our main business lines in the Reporting Period:
1. Domestic sale of color TVs
We adjusted our product mix and marketing strategies according to market changes, launching
series of quality smart TVs such as the V91, X81, 6000, 3000, etc., which has improved our product
sales structure and gross profit margin.
2. Export of color TVs
We adopted a divided task mechanism while strengthening the coordination between finance staff
and business staff, made clear the double incentives in respect of business volume and profit, tried
to attract more customers and made full use of our back-end resources. As a result, the increased
export of our color TVs indicates a better performance in this respect.
3. Mobile phones
Our mobile phones made significant breakthroughs in the third-and-fourth-tier markets of the
country, resulting in increased sales volume, sales revenue and domestic brand recognition.
4. Consumer appliances
We carried out a differentiation strategy on our consumer appliances, quickly improving the product
structure by expanding the range and increasing incentive for our mid-and-high-end products. As a
result, the mid-and-high-end products such as multi-door refrigerators and roller washing machines
took up a higher percentage in our total sales volume, which thus brought up the gross profit
margin.
(II) The net profit attributable to our owners increased from the same period of last year because:
1. The profitability of our color TVs improved. In the Reporting Period, we integrated our resources,
Konka Group Co., Ltd. Semi-annual Report 2016
focused on improving our production coordination capability and overall supply planning capability
for the color TV business, and adjusted our color TV mix and marketing strategies in a timely
manner according to market changes. These measures have improved the profitability of our color
TVs by improving t
