2016 Semi-Annual Report Context of Shenzhen Zhongheng Hwafa Co., Ltd
Shenzhen Zhongheng Hwafa Co., Ltd.
Semi-annual Report in 2016
August 2016
2016 Semi-Annual Report Context of Shenzhen Zhongheng Hwafa Co., Ltd
Section I Important Notice, Contents Interpretation
The board of directors, the board of supervisors, directors, supervisors, and
senior executives of the company shall guarantee the truthfulness, accuracy and
completeness of the content of the annual report, promise that the content is free
from any false records, misleading statements or material omissions, and will
assume several and joint legal liabilities.
All directors have attended the board meeting of considering this report.
The company plans not to distribute cash bonus, issue bonus shares, or
transfer reserve to common shares.
Li Zhongqiu (the company responsible person), Yang Bin (the responsible
person for accountants), and Wu Aijie (responsible person of accounting
mechanism, namely, the accountant responsible person) make the following
statement: This is to guarantee the semi-annual report in its authenticity and
integrity.
Considering that the future plan and other forward-looking statement
involved in the annual report are not considered as the substantial commitment
for investors, please pay attention to the investment risks.
2016 Semi-Annual Report Context of Shenzhen Zhongheng Hwafa Co., Ltd
Contents
Semi-annual Report in 2016 .............................................................................................................. 2
Section I Important Notice, Contents Interpretation ..................................................................... 2
Section II Company Introduction ..................................................................................................... 5
Section III Summary of Accounting Data and Financial Indexes ................................................. 7
Section IV Report of Board of Directors.......................................................................................... 9
Section V Important Events ............................................................................................................ 15
Section VI Change of Share and Conditions of Shareholders ..................................................... 25
Section VII Related Conditions of Preferred Shares .................................................................... 29
Section VIII Conditions of Directors, Supervisors and Senior Manager ................................... 30
Section IX Financial Statements ..................................................................................................... 31
Section Ⅹ Directory of Document Available for Inspection .................................................... 114
2016 Semi-Annual Report Context of Shenzhen Zhongheng Hwafa Co., Ltd
Definitions
Definition item Refers to Definition Content
Company and SHF Refers to Shenzhen Zhongheng Hwafa Co.,Ltd.
Hengfa Technology Refers to Wuhan Hengfa Technology Co., Ltd.
Hwafa Property Refers to Shenzhen Zhongheng Hwafa Property Co.,Ltd.
Hwafa Lease Refers to Shenzhen Hwafa Property Lease Management Co., Ltd.
Wuhan Zhongheng Group Refers to Wuhan Zhongheng New Technology Industry Group Co., Ltd.
Hongkong Yutian Refers to Hongkong Yutian International investment Co., Ltd.
Hengsheng Photoelectricity Refers to Wuhan Hengsheng Photoelectricity Co., Ltd.
Hengsheng Yutian Refers to Wuhan Hengsheng Yutian Industry Co., Ltd.
Yutian Henghua Refers to Shenzhen Yutian Henghua Co., Ltd.
Hwafa Hengtian Refers to Shenzhen Hwafa Hengtian Co., Ltd.
Hwafa Hengtai Refers to Shenzhen Hwafa Hengtian Co., Ltd.
2016 Semi-Annual Report Context of Shenzhen Zhongheng Hwafa Co., Ltd
Section II Company Introduction
I. Company Profile
Stock abbreviation: SHF A SHF B Stock Code 000020 200020
Stock exchange for listing Shenzhen Stock Exchange
Chinese name of the company Shenzhen Zhongheng Hwafa Co.,Ltd
Chinese abbreviation of the company
SHF
name (if any)
Foreign abbreviation of the company
SHENZHEN ZHONGHENG HUAFA CO., LTD.
name (if any)
Legal Representative of the Company Li Zhongqiu
II. Contact and contact way
Secretary of the Board of Directors Securities affairs representative
Name Yang Bin Niu Yuxiang
Floor 33, No. 2 Building, Dachong Floor 33, No. 2 Building, Dachong
Adress Commercial Center, Nanshan District, Commercial Center, Nanshan District,
Shenzhen City Shenzhen City
Tel 0755-86360220 0755-86360201
Fax 0755-86360206 0755-86360206
Electronic mailbox hwafainvestor@126.com.cn hwafainvestor@126.com.cn
III. Other conditions
1. Way of Contact:
Whether the company registered address, office address, post code, company website and email address have been changed within
the report period.
√ Applicable □Inapplicable
The company registered address Room 411, North Hwafa Road, Futian District, Shenzhen City
Postal code of registered address
Floor 33, No. 2 Building, Dachong Commercial Center, Nanshan District,
The company office address
Shenzhen City
Postal code of business address
Website http://www.hwafa.com.cn
Company E-mail Address hwafainvestor@126.com.cn
Appointed website inquiry date disclosed in the
Jan. 4, 2016
temporary announcement (if any)
Appointed website inquiry index disclosed in the http://www.cninfo.com.cn/cninfo-new/disclosure/szse_main/bulletin_detail/tru
temporary announcement (if any) e/1201882551?announceTime=2016-01-04
2016 Semi-Annual Report Context of Shenzhen Zhongheng Hwafa Co., Ltd
2. Information disclosure and designated locations
Whether information disclosure and designated location have been changed within the report period.
□ Applicable √Inapplicable
The information disclosure newspaper name appointed by the company, website appointed by the Chinese Securities Regulatory
Commission to publish the half-year report, and the designated location as specified in the half-year report have not been changed
within the report period. Please refer to the 2015 Annual Report.
3. Change situation of registration
Whether registration conditions have been changed within the report period.
√ Applicable □Inapplicable
Registration No. of
Registration Place of business license Tax Registration
Organization code
date registration for business No.
corporation
Room 411, North
Initial registration within the Hwafa Road,
Jun. 9, 2013 440301501120670 440301618830372 61883037-2
report period Futian District,
Shenzhen City
Room 411, North
Final registration within the report Hwafa Road, 914403006188303 914403006188303 914403006188303
Jun. 7, 2016
period Futian District, 72G 72G 72G
Shenzhen City
Appointed website inquiry date
disclosed in the temporary Jun. 13, 2016
announcement (if any)
Appointed website inquiry index
http://www.cninfo.com.cn/cninfo-new/disclosure/szse_main/bulletin_detail/true/1202365307?an
disclosed in the temporary
nounceTime=2016-06-13
announcement (if any)
2016 Semi-Annual Report Context of Shenzhen Zhongheng Hwafa Co., Ltd
Section III Summary of Accounting Data and Financial Indexes
I. Major accounting data and financial index
Whether the company shall trace, adjust or restate the previous annual accounting data because of accounting policy change and
accounting error correction.
□yes √no
Increase or decrease during
Same period of the previous
Current report period this report period over the
year
same period of last year
Operating income (RMB) 309,538,525.56 248,734,629.86 24.45%
Net profit attributed to the shareholders of
7,272,956.22 14,177,311.03 -48.70%
listed company (RMB)
Net profits attributed to shareholders of
listed company after deducting 6,182,473.52 -8,240,712.21 175.02%
non-recurring profits and losses (RMB)
Net amount of cash flow generated from
-25,424,349.57 17,028,593.73 -249.30%
operating activities (RMB)
Basic earnings per share (RMB/ share) 0.0257 0.0501 -48.70%
Diluted earnings per share (RMB/ share) 0.0257 0.0501 -48.70%
Weighted average net asset yield rate 2.31% 4.92% -2.61%
Increase or decrease at the end
End of current report period At the end of last year of this report period than that
at the end of the previous year
Total assets (RMB) 619,748,378.14 1,155,089,236.67 -46.35%
Net assets attributed to the shareholders of
318,679,518.42 311,406,562.20 2.34%
listed company (RMB)
II. Difference in accounting data under domestic and foreign accounting standards
1. Difference between net profits and net assets in the financial report disclosed in accordance with
international accounting standards and the Chinese accounting standards.
□ Applicable √Inapplicable
The difference between net profits and net assets in the financial report disclosed in accordance with international accounting
standards and the Chinese accounting standards is not existing during the reporting period.
2. Difference between net profits and net assets in the financial report disclosed in accordance with
international overseas accounting standards and the Chinese accounting standards.
□ Applicable √Inapplicable
The difference between net profits and net assets in the financial report disclosed in accordance with international accounting
standards and the Chinese accounting standards is not existing during the reporting period.
2016 Semi-Annual Report Context of Shenzhen Zhongheng Hwafa Co., Ltd
III. Items and Amount of Non-recurring Profits and Losses
√ Applicable □Inapplicable
Unit: RMB
Item Amount Statements
Profit and loss on non-current asset disposal (including the
write-off part of preparation for the impairment of the withdrawn 97,083.01
assets).
Governmental subsidies recorded in current profit and loss (be
closely related to the enterprise business, with an exception of the
1,163,469.00
governmental subsidies enjoyed based on national unified
standard quota or ration)
Other non-business income and expenditure other than above
194,858.82
items
Less: amount affected by income tax 364,928.13
Total 1,090,482.70 --
Where the non-recurring profit and loss item identified by the Company according to No. 1 Company’s Information Disclosure
Explanatory Announcement for Public Issuance of Securities-Non-recurring Profit and Loss and the non-recurring profit and loss
items listed in No. 1 Company’s Information Disclosure Explanatory Announcement for Public Issuance of Securities-Non-recurring
Profit and Loss are defined as the recurring profit and loss items, proper explanation shall be given.
□ Applicable √Inapplicable
During the reporting period, the company involves no defining non-recurring profit and loss listed in Explanatory Announcement No.
1 on Information Disclosure for Companies Offering their Securities to the Public as recurring profit and loss.
2016 Semi-Annual Report Context of Shenzhen Zhongheng Hwafa Co., Ltd
Section IV Report of Board of Directors
I. Overview
As the supporting product supply manufacturing enterprise in the household appliance industry, the company adheres to be
market-oriented, pays attention to management, increase incomes and reduce expenditures, as a result, keeping favorable
performance level regardless of the shocking and bottoming state of household appliance sales in the first half year of 2016.
Meanwhile, the self-owned properties which are located in the North Huaqiang and Guangming New Area of Shenzhen under the
company have entered renovation implementation phase, the commercial interests brought by renovation will significantly enhance
the company funds, in addition. The independent management of moving-back property will develop into the new continuous and
stable economic and benefit growth point, given this, the company will actively master the market tenancy, explore transformation
and upgrading means, develop and foster the new affiliated industries, and keep the continuous growth of performance in the future.
Within the report period, the company has obtained the operating incomes of RMB 309,538,500 with the year-on-year growth of
24.45%.; The operating profits are RMB 8,201,800 with the year-on-year decrement of 36.79%; The net profits are RMB 7,273,000
with the year-on-year decrement of 48.70%.
● As for the injection molding business, the operating incomes are RMB 91,025,800 in the first half year with the year-on-year
decrement of 18.50%. In the first half year of 2016, the household appliance industry has different performances, such as, the air
conditioner industry suffers from decreasing domestic sales due to destocking in the first half year, the ice washing industry keeps
stable growth state, and the kitchen household appliance industry is subject to optimistic growth under the driving of real estate
industry. In consideration of the continuously rising labor costs, the injection molding department has adjusted the product structure
and selects the product order which will bring relatively higher gross margin according to the household appliance market situation.
Meanwhile, the injection molding department will also strengthen the internal management, import competition mechanism, pay
attention to the employee training, provide favorable logistic service works to employees, completely mobilize employees'
enthusiasm, enhance employee quality and reinforce the belongingness sense of employees; Formulate the effective quality
correction and prevention measures, reinforce delicacy management, enhance product quality and overcome the overcritical quality
standard of customers. As a result, the produce has won the high praise from customers and made efforts to get more market shares
with the higher gross margin.
● As for the Polystyrene business, the operating incomes are RMB 30,816,400 in the first half year with the year-on-year
decrement of 11.09%. Faced with the more fierce market competition in the household appliance industry, increasingly rising
production costs and sharply compressing profit space, Polystyrene Department adheres to be market-oriented, actively cooperates
with customers to perfect product structure, continuously explores and innovates, ceaselessly renews equipment, pays attention to
product quality and forms its unique competition advantages. In the future, the company will make efforts to enhance product quality,
decrease raw materials' consumption, reduce production costs, and keep its unique advantages and market shares via innovative
design and product optimization.
● As for LCD complete machine business, the operating incomes are RMB 164,529,000 in the first half year with the
year-on-year growth of 120.85%. In the premise of keeping the basic production, the Video Information Department will pay more
attention to the design, research and development of new products, increase multiple dimensions and new cost-offsetting LCD
products, as well as realize mass production. As a result, the product will be changed from the traditional structure to the super-thin,
ultra-narrow and larger-dimension hook faces. Considering tha
