Securities code: 420063 Securities abbreviation: Wuguo B5 Public Announcement No.: 2019-010
WUHAN BOILER COMPANY LIMITED2019 QUARTERLY ONE REPORT
Section I Important Notes
The Board of Directors, the Board of Supervisors as well as all Board Directors, Supervisors and SeniorManagement of Wuhan Boiler Company Limited (hereinafter referred to as “the Company”) hereby confirm thatthis Report is authentic, accurate and complete without any misstatement, misleading statement or materialomission and will take individual and joint and several liabilities for that.All Board Directors have attended the Board Meeting for reviewing this Report.Stuart Adam Connor, Company Principal, FENG Zheng, Accounting Principal, and ZHANG Ke, AccountingDivision’s Principal (Accounting Manager), hereby ensure that the Financial Statements enclosed in this Reportare authentic, accurate and complete.
Section II Company Profile
I. Major accounting data and financial indexesDoes the Company adjust retrospectively or restate accounting data of previous years?
□ Yes √ No
| Report period | Same period of last year | YoY change | |
| Gross operating revenues (RMB Yuan) | 227,530,574.29 | 199,112,498.59 | 14.27% |
| Net profit attributable to shareholders of the Company (RMB Yuan) | -18,041,223.09 | -30,227,014.74 | 40.30% |
| Net profit attributable to shareholders of the Company after deducting non-recurring gains and losses (RMB Yuan) | -18,110,667.09 | -30,472,784.84 | 40.57% |
| Net cash flow from operating activities (RMB Yuan) | -89,109,199.91 | 38,328,911.19 | -332.49% |
| Basic EPS (RMB Yuan/share) | -0.06 | -0.10 | 40.00% |
| Diluted EPS (RMB Yuan/share) | -0.06 | -0.10 | 40.00% |
| The weighted average ROE | -1.50% | -2.33% | 0.83% |
| Mar. 31, 2019 | Dec. 31, 2018 | Increase/decrease (%) | |
| Total assets (RMB Yuan) | 1,104,930,895.72 | 1,236,668,941.72 | -10.65% |
| Owners’ equity attributable to shareholders of the Company (RMB Yuan) | -1,212,436,433.70 | -1,194,395,210.61 | -1.51% |
| Item | Jan.-Mar. 2019 | Explanation |
| Government grants recognized in the current period, except for those acquired in the ordinary course of business or granted at certain quotas or amounts according to the country’s unified standards | 69,444.00 | Deferred incomes of the land use right in the new factory zone of the Company |
| Total | 69,444.00 | -- |
In the report period, the Company didn’t classify any non-recurring gain/loss item defined or mentioned in theExplanatory Announcement No. 1 on Information Disclosure for Public Listed Companies – Non-recurring Gainsand Losses as a recurrent gain/loss item.
II. Total number of shareholders at the period-end and shareholdings of the top tenshareholders
1. Total number of shareholders with common shares and shareholders with preference shares withresumed voting rights as well as shareholdings of the top ten shareholders
Unit: share
| Total number of shareholders with common shares at the period-end | 5,299 | Total number of shareholders with preference shares who had resumed their voting right at the end of the report period (if any) | -- | |||
| Top 10 shareholders | ||||||
| Name of shareholder | Nature of shareholder | Shareholding percentage (%) | Total shares held | Number of restricted shares held | Pledged or frozen shares | |
| Status of shares | Number of shares | |||||
| ALSTOM (CHINA) INVESTMENT CO., LTD | Domestic non-state-owned corporation | 51.00% | 151,470,000 | 151,470,000 | ||
| WUHAN BOILER GROUP CO., LTD | State-owned corporation | 6.91% | 20,530,000 | 20,530,000 | ||
| WANG XIAO | Domestic natural person | 0.90% | 2,672,800 | 0 | ||
| CHEN PENG | Domestic natural person | 0.79% | 2,331,545 | 0 | ||
| HU ZHIHONG | Domestic natural person | 0.47% | 1,390,397 | 0 | ||
| CHEN CHUYUN | Domestic natural person | 0.46% | 1,367,450 | 0 | ||
| LI ZHIJIAN | Domestic natural person | 0.43% | 1,286,281 | 0 | ||
| HSBC BROKING SECURITIES (ASIA) | Foreign corporation | 0.40% | 1,185,114 | 0 | ||
| LIMITED-CLIENTS A/C | ||||||
| CHINA MERCHANTS SECURITIES (HK) CO., LTD. | State-owned corporation | 0.40% | 1,176,836 | 0 | ||
| ZHUANG CHANGXIONG | Domestic natural person | 0.35% | 1,045,000 | 0 | ||
| Shareholdings of the top ten shareholders with non-restricted shares | ||||||
| Name of shareholder | Number of non-restricted shares held | Type of shares | ||||
| Type | Number | |||||
| WANG XIAO | 2,672,800 | Domestically listed foreign shares | 2,672,800 | |||
| CHEN PENG | 2,331,545 | Domestically listed foreign shares | 2,331,545 | |||
| HU ZHIHONG | 1,390,397 | Domestically listed foreign shares | 1,390,397 | |||
| CHEN CHUYUN | 1,367,450 | Domestically listed foreign shares | 1,367,450 | |||
| LI ZHIJIAN | 1,286,281 | Domestically listed foreign shares | 1,286,281 | |||
| HSBC BROKING SECURITIES (ASIA) LIMITED-CLIENTS A/C | 1,185,114 | Domestically listed foreign shares | 1,185,114 | |||
| CHINA MERCHANTS SECURITIES (HK) CO., LTD. | 1,176,836 | Domestically listed foreign shares | 1,176,836 | |||
| ZHUANG CHANGXIONG | 1,045,000 | Domestically listed foreign shares | 1,045,000 | |||
| SUN WEIWEI | 966,567 | Domestically listed foreign shares | 966,567 | |||
| TANG JUAN | 887,236 | Domestically listed foreign | 887,236 | |||
| shares | |||
| Explanation on affiliated relationship or persons acting in concert among the above-mentioned shareholders | The top ten shareholders of the Company are public shareholders with tradable shares. The Company is not aware of whether there is any affiliated relationship among the top ten shareholders with tradable shares and whether there are persons acting in concert among them. The Company is not aware of whether there is any affiliated relationship among the top ten shareholders and the top ten shareholders with tradable share. | ||
| Explanation on the top 10 shareholders with common shares participating in the margin trading business (if any) (see Note 4) | Not applicable | ||
Section III Significant EventsI. Major changes of main accounting statement items and financial indicators in the reportperiod, as well as reasons for the changes
√Applicable □Not applicable
1. Cash and cash equivalent decreased by 70.92%, mainly due to bank acceptance notes mature this period;
2. Down payment increased by 38.04%, mainly due to increase on purchasing material for Hassyan, pingshanprojects;
3. Tax payable decreased by 55.30%, mainly due to input VAT increase;
4. Tax and surcharges decreased by 31.22%, mainly due to additional tax for VAT decrease this period;
5. Assets impairment loss decreased by 110.53%, mainly due to reversed bad-debt provision more than the same
period last year for the AR collection this period;
6. Changes in fair value gains decreased by 100.00%, mainly due to the decreased of hedging gains arising fromexchange rate movement of hedging instrument;
7. Non-operating income decreased by 72.64%, mainly due to insurance compensation in the prior period but nosame thing this period;
8. Net cash flows from operating activities decreased by 332.49%, mainly due to payment for projects materialincrease this period;
9. Net cash flow generated from investment activities decreased by 1558.23%, mainly due to the increase of
cash out paid for fixed assets this period;
10. Net cash flow generated from financing activities increased by 77.22%, mainly due to the decrease ofrepayments of entrusted loans this period.II. Progress and influence of significant events, as well as the analysis and explanation onsolutions
□Applicable √Not applicable
Progress of any share repurchase
□Applicable √Not applicable
Progress of any reduction of the repurchased shares through centralized bidding
□Applicable √Not applicable
III. Commitments of the Company’s actual controller, shareholders, related parties, acquirer,the Company or other commitment makers ongoing in the report period
√Applicable □Not applicable
| Commitment | Commitment maker | Type of commitment | Contents | Time of making | Period of commitment | Fulfillment |
| commitment | |||||||
| Commitment on share reform Commitment in the acquisition report or the report on equity changes | Alstom (China) Investment Co., Ltd | Disclosed commitment | Avoid horizontal competition | April 14, 2006 | Long-term effective | Strictly fulfill the commitment and no breaches | |
| General Electric Company, GE Albany Global Holdings B.V. | Disclosed commitment | Ensure the independence of the Company | December 28, 2015 | Long-term effective | Strictly fulfill the commitment and no breaches | ||
| General Electric Company, GE Albany Global Holdings B.V. | Disclosed commitment | Avoid horizontal competition | December 28, 2015 | Long-term effective | Strictly fulfill the commitment and no breaches | ||
| General Electric Company, GE Albany Global Holdings B.V. | Disclosed commitment | Ensure new related party transactions will obtain appropriate approvals | December 28, 2015 | Long-term effective | Strictly fulfill the commitment and no breaches | ||
| Commitments made in assets reorganization | |||||||
| Commitments made in IPO or refinancing | |||||||
| Equity incentive commitment | |||||||
| Other commitments made to minority shareholders | |||||||
| Yes | |||||||
explanations on the reasons
□Applicable √Not applicable
V. Securities investment
□ Applicable √ Not applicable
The Company did not invest in any securities in the report period.VI. Derivatives investment
√Applicable □Not applicable
Unit: RMB Ten thousand
| Operator | Relation | Related party transaction or not | Type of derivatives investment | Initial investment amount | Beginning date | Ending date | Opening investment amount | Amount purchased in reporting period | Amount sold in reporting period | Impairment provision (if any) | Closing investment amount | Proportion of the closing investment amount in the Company’s closing net assets (%) | Actual gain/loss in report period |
| HSBC | Non- Relation | No | Forward FX contract | 1,781.59 | 2014/10/28 | 2020/3/30 | 1,781.59 | 4,978.29 | 4,181.79 | 2,578.09 | 11.33% | -0.99 | |
| SCB | Non- Relation | No | Forward FX contract | 6,484.98 | 2015/2/17 | 2019/3/29 | 6,484.98 | 5,612.15 | 3,546.59 | 8,550.54 | 37.58% | -10.04 | |
| Total | 8,266.57 | -- | -- | 8,266.57 | 10,590.44 | 7,728.38 | 11,128.63 | 48.91% | -11.03 | ||||
| Capital source for derivatives investment | Self-funded | ||||||||||||
| Any litigation involved | NA | ||||||||||||
| Disclosure date of the board announcement approving the derivative investment (if any) | April 26, 2019 | ||||||||||||
| Disclosure date of the Shareholders’ Meeting announcement approving the | NA | ||||||||||||
| derivative investment (if any) | |
| Analysis on risks and control measures of derivative products held in the report period (including but not limited to market risk, liquidity risk, credit risk, operation risk, law risk, etc.) | In order to satisfy needs arising from business development and avoid risk concerning exchange rates, the Company signed forward FX contracts with HSBC, SCB, etc. respectively. For exchange rate fluctuations risk, the Company and banks do collaborative exchange rate trend forecasts, closely track changes in exchange rates, changes in market conditions to implement dynamic management; For liquidity risk, foreign exchange hedging operations carried out by the Company are based on the Company's estimated foreign exchange payments and collection of trade, because the foreign exchange hedging operations match with the actual foreign exchange trade, so this can ensure sufficient fund for settlement at delivery time, there is less affected on the liquidation of the company’s current assets; For operational risk, the Company developed a standardized operational processes and authorization management systems, equipped with full-time staff and strictly control their authority to conduct foreign exchange hedging operations; while strengthening business related personnel training and professional ethics , and improving quality of personnel, and the establishing anomalies timely reporting system to avoid the occurrence of operational risk at the maximum; For credit risk, the Company's counterparties of foreign exchange hedging are reputable business and the company has established long-term business relationship with large commercial banks and foreign banks, so, basically there is no performance risk; For legal risk, the Company conducted foreign exchange hedging operations legally in accordance with relevant laws and regulations and relevant transaction management practices, and signed a legal agreement with the counterparties for clear and accurate terms to avoid possible legal disputes at the maximum; and the Company has carried out sufficient assessment and effective control on possible risk concerning credit, operation and cash flows. |
| Changes of market prices or fair values in the report period of the invested derivatives. And the analysis on the fair value of the derivatives should include the specific use methods and the relevant assumptions and parameters | The company recognized the gain and loss of fair values of the invested derivatives, the fair values loss of the invested derivatives this period was 0RMB, the loss of investment was 0.11MRMB. The calculation of fair values was based on the contract values and forward rate quote of end of this accounting period provided by the related business partners which was accordance with the expiry date of each forward contracts. |
| Whether significant changes occurred to the Company’s accounting policy and specific accounting principles of derivatives in the report period compared to the previous report period | No major change |
| Independent Directors’ opinions on derivatives investment and risk control | The foreign exchange trading for hedging purpose made by WBC in order to prevent exchange rate risk is based on reasonable estimation and current need for foreign exchange payment and collection. The business process is compliant with laws and regulations. There is almost no market risk, no performance risk and no impact on liquidity of WBC. WBC has established organization, business procedures, approval process and Internal Control Rules on Derivatives Investment for foreign exchange trading, so as to improve foreign exchange |
risk management and prevent exchange rate risk through derivatives investment business.
VII. Researches, visits and interviews received in this report period
√Applicable □Not applicable
| Date | Way of reception | Visitor type | Main inquiry information |
| Jan. 8, 2019 | By phone | Individual | About the Company’s re-listing progress |
| Feb. 28, 2019 | By phone | Individual | About the Company’s operating results |
| Mar. 6, 2019 | By phone | Individual | Suggested that the Company should try to list on the Science and Technology Innovation Board and that senior management should increase their shareholdings in the Company, as well as asked about the latest tax-cut policy’s impact on Company |